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 Incorporated
351 West Camden Street, Baltimore, MD 21201
(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, 2012
Date of reporting period: August 31, 2012
Table of Contents
Item 1. Reports to Stockholders. |
![]() | August 31, 2012 |
2012 Annual Report
iShares, Inc.
iShares MSCI Japan Index Fund | EWJ | NYSE Arca
Table of Contents
5 | ||||
7 | ||||
8 | ||||
14 | ||||
17 | ||||
18 | ||||
25 | ||||
26 | ||||
Board Review and Approval of Investment Advisory Contract (Unaudited) | 27 | |||
30 | ||||
32 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI JAPAN INDEX FUND
Performance as of August 31, 2012
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(5.96)% | (6.12)% | (5.50)% | (7.00)% | (6.87)% | (6.51)% | 2.50% | 2.47% | 3.02% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(5.96)% | (6.12)% | (5.50)% | (30.42)% | (29.94)% | (28.57)% | 27.97% | 27.68% | 34.70% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
“Average Annual Total Returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 5 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI JAPAN INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector* | Percentage of Net Assets | |||
Consumer Cyclical | 27.46 | % | ||
Industrial | 20.74 | |||
Financial | 17.59 | |||
Consumer Non-Cyclical | 13.62 | |||
Communications | 6.41 | |||
Basic Materials | 5.45 | |||
Technology | 4.02 | |||
Utilities | 2.92 | |||
Energy | 1.59 | |||
Short-Term and Other Net Assets | 0.20 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets | |||
Toyota Motor Corp. | 5.40 | % | ||
Mitsubishi UFJ Financial Group Inc. | 2.86 | |||
Honda Motor Co. Ltd. | 2.51 | |||
Sumitomo Mitsui Financial Group Inc. | 2.06 | |||
Canon Inc. | 1.84 | |||
Mizuho Financial Group Inc. | 1.82 | |||
Takeda Pharmaceutical Co. Ltd. | 1.82 | |||
SoftBank Corp. | 1.81 | |||
FANUC Corp. | 1.51 | |||
Japan Tobacco Inc. | 1.34 | |||
|
| |||
TOTAL | 22.97 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI Japan Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Japan IndexSM (the “Index”). The Index consists of stocks traded primarily on the Tokyo Stock Exchange. 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, 2012 (the “reporting period”), the total return for the Fund was (5.96)%, net of fees, while the total return for the Index was (5.50)%.
Japanese equity markets, as represented by the Index, declined during the reporting period, as the country continued to recover from the effects of the earthquake and tsunami that struck in March 2011 while grappling with a sluggish global economic environment.
Investment related to reconstruction spending in the country’s disaster-struck regions largely drove economic recovery for much of the reporting period. For the first quarter of 2012, annual gross domestic product (“GDP”) expanded 4.7%, surpassing estimates of 3.5% and exceeding economic growth rates in the U.S. and Europe. In the final months of the period, though, reconstruction spending slowed, and economic recovery stalled in Japan. Tepid economic growth in Europe and the U.S. translated into slow demand for exports from Japan. In July 2012, export levels, which have historically been the main driver of Japan’s economic growth, experienced their sharpest annual decline in six months. For the second quarter of 2012, annual GDP growth dropped to a slight 0.7%. Government debt at the end of the reporting period represented 211% of GDP, the largest ratio of government debt to GDP for all industrial countries, even above the levels for the troubled eurozone countries of Spain and Greece.
Sector performance within the Index was mixed for the reporting period. The information technology sector was the most significant detractor from Index returns. The economically sensitive industrials sector, the largest sector at 21% of the Index on average, declined during the reporting period and hurt Index performance. Other sectors that are sensitive to economic conditions include materials and consumer discretionary, and these both declined during the reporting period. The utilities sector also detracted from results, due largely to the destruction caused by the nuclear disaster following the March 2011 earthquake and tsunami. On the positive side, the traditionally economically defensive consumer staples sector gained ground and contributed to Index returns. The health care sector was also a meaningful contributor to Index performance.
6 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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, 2012 to August 31, 2012.
ACTUAL EXPENSES
The first line in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line in the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of Fund shares. Therefore, the second line in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value (3/1/12) | Ending Account Value (8/31/12) | Annualized Expense Ratio | Expenses Paid During Period a | |||||||||||||
Actual | $ | 1,000.00 | $ | 909.80 | 0.53 | % | $ | 2.54 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.50 | 0.53 | 2.69 |
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 (366 days). |
SHAREHOLDER EXPENSES | 7 |
Table of Contents
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 99.80% |
| |||||||
ADVERTISING — 0.32% |
| |||||||
Dentsu Inc. | 427,500 | $ | 10,854,023 | |||||
Hakuhodo DY Holdings Inc. | 59,850 | 3,921,207 | ||||||
|
| |||||||
14,775,230 | ||||||||
AGRICULTURE — 1.34% | ||||||||
Japan Tobacco Inc. | 2,052,000 | 61,874,483 | ||||||
|
| |||||||
61,874,483 | ||||||||
AIRLINES — 0.12% | ||||||||
All Nippon Airways Co. Ltd.a | 2,565,000 | 5,667,241 | ||||||
|
| |||||||
5,667,241 | ||||||||
APPAREL — 0.12% | ||||||||
ASICS Corp. | 427,500 | 5,634,483 | ||||||
|
| |||||||
5,634,483 | ||||||||
AUTO MANUFACTURERS — 10.55% | ||||||||
Daihatsu Motor Co. Ltd. | 341,000 | 5,561,392 | ||||||
Fuji Heavy Industries Ltd. | 1,710,000 | 13,671,264 | ||||||
Hino Motors Ltd. | 855,000 | 5,896,552 | ||||||
Honda Motor Co. Ltd. | 3,676,500 | 116,070,345 | ||||||
Isuzu Motors Ltd. | 2,565,000 | 13,070,690 | ||||||
Mazda Motor Corp.b | 5,985,000 | 7,185,057 | ||||||
Mitsubishi Motors Corp.b | 9,405,000 | 8,768,391 | ||||||
Nissan Motor Co. Ltd. | 5,643,000 | 52,610,345 | ||||||
Suzuki Motor Corp. | 855,000 | 15,593,103 | ||||||
Toyota Motor Corp. | 6,327,000 | 250,090,230 | ||||||
|
| |||||||
488,517,369 | ||||||||
AUTO PARTS & EQUIPMENT — 3.41% | ||||||||
Aisin Seiki Co. Ltd. | 427,700 | 13,601,188 | ||||||
Bridgestone Corp. | 1,453,500 | 33,692,241 | ||||||
Denso Corp. | 1,111,500 | 37,050,000 | ||||||
JTEKT Corp. | 513,000 | 4,016,207 | ||||||
Koito Manufacturing Co. Ltd. | 100,000 | 1,243,934 | ||||||
NGK Insulators Ltd. | 855,000 | 10,111,494 | ||||||
NGK Spark Plug Co. Ltd. | 389,000 | 4,198,021 | ||||||
NHK Spring Co. Ltd. | 342,000 | 3,367,586 | ||||||
NOK Corp. | 256,500 | 4,291,379 | ||||||
Stanley Electric Co. Ltd. | 343,200 | 5,071,295 | ||||||
Sumitomo Electric Industries Ltd. | 1,624,500 | 18,257,471 | ||||||
Sumitomo Rubber Industries Inc. | 427,500 | 5,214,081 | ||||||
Toyoda Gosei Co. Ltd. | 171,000 | 3,531,379 | ||||||
Toyota Boshoku Corp. | 171,000 | 1,963,333 |
Security | Shares | Value | ||||||
Toyota Industries Corp. | 427,500 | $ | 12,011,494 | |||||
|
| |||||||
157,621,103 | ||||||||
BANKS — 9.76% | ||||||||
Aozora Bank Ltd. | 1,710,000 | 5,088,506 | ||||||
Bank of Kyoto Ltd. (The) | 855,000 | 6,781,035 | ||||||
Bank of Yokohama Ltd. (The) | 2,565,000 | 11,891,379 | ||||||
Chiba Bank Ltd. (The) | 1,710,000 | 9,893,103 | ||||||
Fukuoka Financial Group Inc. | 1,716,000 | 6,750,038 | ||||||
Gunma Bank Ltd. (The) | 855,000 | 4,498,851 | ||||||
Hachijuni Bank Ltd. (The) | 855,000 | 4,695,402 | ||||||
Iyo Bank Ltd. (The) | 855,000 | 6,933,908 | ||||||
Joyo Bank Ltd. (The) | 1,710,000 | 8,211,494 | ||||||
Mitsubishi UFJ Financial Group Inc. | 29,155,580 | 132,559,214 | ||||||
Mizuho Financial Group Inc. | 52,411,580 | 84,340,474 | ||||||
Nishi-Nippon City Bank Ltd. (The) | 1,710,000 | 3,647,126 | ||||||
Resona Holdings Inc. | 4,275,000 | 16,652,299 | ||||||
Seven Bank Ltd. | 1,282,500 | 3,537,931 | ||||||
Shinsei Bank Ltd. | 3,420,000 | 3,974,713 | ||||||
Shizuoka Bank Ltd. (The) | 1,710,000 | 17,755,172 | ||||||
Sumitomo Mitsui Financial Group Inc. | 3,078,000 | 95,288,276 | ||||||
Sumitomo Mitsui Trust Holdings Inc. | 6,846,320 | 19,061,274 | ||||||
Suruga Bank Ltd. | 855,000 | 9,838,506 | ||||||
Yamaguchi Financial Group Inc. | 55,000 | 459,387 | ||||||
|
| |||||||
451,858,088 | ||||||||
BEVERAGES — 0.94% | ||||||||
Asahi Group Holdings Ltd. | 855,000 | 20,692,529 | ||||||
Coca-Cola West Co. Ltd. | 85,500 | 1,419,540 | ||||||
Kirin Holdings Co. Ltd. | 1,710,000 | 21,293,103 | ||||||
|
| |||||||
43,405,172 | ||||||||
BUILDING MATERIALS — 1.30% | ||||||||
Asahi Glass Co. Ltd. | 2,565,000 | 15,527,586 | ||||||
Daikin Industries Ltd. | 513,000 | 13,660,345 | ||||||
LIXIL Group Corp. | 598,500 | 12,849,023 | ||||||
Rinnai Corp. | 85,500 | 6,224,138 | ||||||
Taiheiyo Cement Corp. | 2,565,000 | 5,536,207 | ||||||
TOTO Ltd. | 855,000 | 6,377,011 | ||||||
|
| |||||||
60,174,310 | ||||||||
CHEMICALS — 3.45% | ||||||||
Air Water Inc. | 78,000 | 907,510 | ||||||
Asahi Kasei Corp. | 2,565,000 | 13,332,759 | ||||||
Daicel Corp. | 855,000 | 5,241,379 | ||||||
Denki Kagaku Kogyo K.K. | 855,000 | 2,806,322 |
8 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Hitachi Chemical Co. Ltd. | 256,500 | $ | 3,668,966 | |||||
JSR Corp. | 427,500 | 7,261,494 | ||||||
Kaneka Corp. | 855,000 | 4,225,862 | ||||||
Kansai Paint Co. Ltd. | 95,000 | 957,280 | ||||||
Kuraray Co. Ltd. | 769,500 | 8,874,310 | ||||||
Mitsubishi Chemical Holdings Corp. | 2,992,500 | 11,580,172 | ||||||
Mitsubishi Gas Chemical Co. Inc. | 855,000 | 4,793,678 | ||||||
Mitsui Chemicals Inc. | 1,710,000 | 3,472,414 | ||||||
Nitto Denko Corp. | 342,000 | 15,789,655 | ||||||
Shin-Etsu Chemical Co. Ltd. | 940,500 | 50,268,103 | ||||||
Showa Denko K.K. | 3,420,000 | 5,765,517 | ||||||
Sumitomo Chemical Co. Ltd. | 3,420,000 | 8,910,345 | ||||||
Taiyo Nippon Sanso Corp. | 855,000 | 4,258,621 | ||||||
Tosoh Corp. | 855,000 | 1,801,724 | ||||||
Ube Industries Ltd. | 2,565,000 | 5,601,724 | ||||||
|
| |||||||
159,517,835 | ||||||||
COMMERCIAL SERVICES — 1.13% | ||||||||
Benesse Holdings Inc. | 171,000 | 8,462,644 | ||||||
Dai Nippon Printing Co. Ltd. | 1,710,000 | 12,120,689 | ||||||
Secom Co. Ltd. | 427,500 | 21,593,391 | ||||||
Toppan Printing Co. Ltd. | 1,710,000 | 10,002,299 | ||||||
|
| |||||||
52,179,023 | ||||||||
COMPUTERS — 0.85% | ||||||||
Fujitsu Ltd. | 4,275,000 | 17,362,069 | ||||||
Itochu Techno-Solutions Corp. | 85,500 | 4,684,483 | ||||||
NTT Data Corp. | 2,565 | 7,645,862 | ||||||
TDK Corp. | 256,500 | 9,775,172 | ||||||
|
| |||||||
39,467,586 | ||||||||
COSMETICS & PERSONAL CARE — 1.34% |
| |||||||
Kao Corp. | 1,197,000 | 36,139,310 | ||||||
Shiseido Co. Ltd. | 769,500 | 10,957,759 | ||||||
Unicharm Corp. | 256,500 | 14,921,552 | ||||||
|
| |||||||
62,018,621 | ||||||||
DISTRIBUTION & WHOLESALE — 4.75% |
| |||||||
Hitachi High-Technologies Corp. | 171,000 | 4,228,046 | ||||||
ITOCHU Corp. | 3,420,000 | 34,680,460 | ||||||
Marubeni Corp. | 3,420,000 | 21,926,437 | ||||||
Mitsubishi Corp. | 3,163,500 | 58,138,908 | ||||||
Mitsui & Co. Ltd. | 3,933,000 | 54,901,264 | ||||||
Sojitz Corp. | 2,565,000 | 3,439,655 | ||||||
Sumitomo Corp. | 2,565,000 | 33,937,931 |
Security | Shares | Value | ||||||
Toyota Tsusho Corp. | 427,500 | $ | 8,724,713 | |||||
|
| |||||||
219,977,414 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 1.74% |
| |||||||
AEON Credit Service Co. Ltd. | 171,070 | 3,279,388 | ||||||
Credit Saison Co. Ltd. | 342,000 | 7,997,471 | ||||||
Daiwa Securities Group Inc. | 3,420,000 | 12,360,920 | ||||||
Mitsubishi UFJ Lease & Finance Co. Ltd. | 136,800 | 5,879,081 | ||||||
Nomura Holdings Inc. | 8,293,500 | 27,327,241 | ||||||
ORIX Corp. | 256,500 | 23,717,241 | ||||||
|
| |||||||
80,561,342 | ||||||||
ELECTRIC — 1.68% | ||||||||
Chubu Electric Power Co. Inc. | 1,453,500 | 17,263,793 | ||||||
Chugoku Electric Power Co. Inc. (The) | 684,000 | 8,630,805 | ||||||
Electric Power Development Co. Ltd. | 256,500 | 6,129,138 | ||||||
Hokkaido Electric Power Co. Inc. | 427,500 | 3,286,782 | ||||||
Hokuriku Electric Power Co. | 427,500 | 4,935,632 | ||||||
Kansai Electric Power Co. Inc. (The) | 1,710,000 | 12,754,023 | ||||||
Kyushu Electric Power Co. Inc. | 940,500 | 7,122,816 | ||||||
Shikoku Electric Power Co. Inc. | 427,500 | 5,192,241 | ||||||
Tohoku Electric Power Co. Inc.b | 1,026,000 | 7,167,586 | ||||||
Tokyo Electric Power Co. Inc.b | 3,249,000 | 5,435,747 | ||||||
|
| |||||||
77,918,563 | ||||||||
ELECTRICAL COMPONENTS & EQUIPMENT — 2.93% |
| |||||||
Brother Industries Ltd. | 513,000 | 5,195,517 | ||||||
Casio Computer Co. Ltd.a | 513,000 | 3,714,828 | ||||||
Furukawa Electric Co. Ltd. | 1,710,000 | 3,341,379 | ||||||
GS Yuasa Corp.a | 855,000 | 3,232,184 | ||||||
Hitachi Ltd. | 10,260,000 | 58,834,483 | ||||||
Mabuchi Motor Co. Ltd. | 85,500 | 3,554,310 | ||||||
Mitsubishi Electric Corp. | 4,275,000 | 34,724,138 | ||||||
Nidec Corp. | 256,500 | 20,179,311 | ||||||
Ushio Inc. | 256,500 | 3,013,793 | ||||||
|
| |||||||
135,789,943 | ||||||||
ELECTRONICS — 3.87% | ||||||||
Advantest Corp. | 342,000 | 4,961,839 | ||||||
Hamamatsu Photonics K.K. | 85,500 | 3,023,621 | ||||||
Hirose Electric Co. Ltd. | 85,500 | 8,866,667 | ||||||
Hoya Corp. | 940,500 | 21,212,299 | ||||||
IBIDEN Co. Ltd. | 256,500 | 3,872,069 | ||||||
Keyence Corp. | 94,926 | 24,998,392 | ||||||
Kyocera Corp. | 342,000 | 29,351,724 | ||||||
Murata Manufacturing Co. Ltd. | 427,500 | 21,074,713 |
SCHEDULEOF INVESTMENTS | 9 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
NEC Corp.b | 5,964,000 | $ | 8,530,881 | |||||
Nippon Electric Glass Co. Ltd. | 855,500 | 4,064,444 | ||||||
Omron Corp. | 427,500 | 8,342,529 | ||||||
Toshiba Corp. | 9,405,000 | 30,028,736 | ||||||
Yaskawa Electric Corp. | 855,000 | 5,601,724 | ||||||
Yokogawa Electric Corp. | 427,500 | 4,984,770 | ||||||
|
| |||||||
178,914,408 | ||||||||
ENGINEERING & CONSTRUCTION — 1.17% |
| |||||||
Chiyoda Corp. | 235,000 | 3,091,316 | ||||||
JGC Corp. | 855,000 | 26,316,092 | ||||||
Kajima Corp. | 1,710,000 | 4,739,081 | ||||||
Obayashi Corp. | 1,710,000 | 7,425,287 | ||||||
Shimizu Corp. | 1,710,000 | 5,459,770 | ||||||
Taisei Corp. | 2,565,000 | 6,977,586 | ||||||
|
| |||||||
54,009,132 | ||||||||
ENTERTAINMENT — 0.48% | ||||||||
Oriental Land Co. Ltd. | 85,500 | 11,531,034 | ||||||
Sankyo Co. Ltd. | 171,000 | 7,894,828 | ||||||
Toho Co. Ltd. | 171,000 | 2,972,299 | ||||||
|
| |||||||
22,398,161 | ||||||||
ENVIRONMENTAL CONTROL — 0.12% |
| |||||||
Kurita Water Industries Ltd. | 256,500 | 5,490,345 | ||||||
|
| |||||||
5,490,345 | ||||||||
FOOD — 1.77% | ||||||||
Ajinomoto Co. Inc. | 1,710,000 | 26,054,023 | ||||||
Kikkoman Corp. | 855,000 | 11,290,804 | ||||||
Meiji Holdings Co. Ltd. | 171,028 | 7,972,570 | ||||||
Nippon Meat Packers Inc. | 855,000 | 11,498,276 | ||||||
Nisshin Seifun Group Inc. | 429,500 | 5,200,077 | ||||||
Nissin Foods Holdings Co. Ltd. | 171,000 | 6,606,322 | ||||||
Toyo Suisan Kaisha Ltd. | 89,000 | 2,207,382 | ||||||
Yakult Honsha Co. Ltd. | 256,500 | 11,006,896 | ||||||
|
| |||||||
81,836,350 | ||||||||
FOREST PRODUCTS & PAPER — 0.16% |
| |||||||
Nippon Paper Group Inc.a | 171,000 | 2,020,115 | ||||||
Oji Paper Co. Ltd. | 1,710,000 | 5,350,575 | ||||||
|
| |||||||
7,370,690 | ||||||||
GAS — 1.24% | ||||||||
Osaka Gas Co. Ltd. | 4,275,000 | 18,672,414 | ||||||
Toho Gas Co. Ltd. | 855,000 | 5,579,885 |
Security | Shares | Value | ||||||
Tokyo Gas Co. Ltd. | 5,985,000 | $ | 33,020,689 | |||||
|
| |||||||
57,272,988 | ||||||||
HAND & MACHINE TOOLS — 0.89% | ||||||||
Fuji Electric Holdings Co. Ltd. | 855,000 | 1,692,529 | ||||||
Makita Corp. | 256,500 | 8,726,897 | ||||||
SMC Corp. | 171,000 | 26,840,230 | ||||||
THK Co. Ltd. | 257,100 | 4,012,467 | ||||||
|
| |||||||
41,272,123 | ||||||||
HEALTH CARE — PRODUCTS — 0.53% |
| |||||||
Shimadzu Corp. | 236,000 | 1,639,642 | ||||||
Sysmex Corp. | 171,000 | 7,840,230 | ||||||
Terumo Corp. | 342,000 | 15,134,483 | ||||||
|
| |||||||
24,614,355 | ||||||||
HEALTH CARE — SERVICES — 0.17% |
| |||||||
Miraca Holdings Inc. | 171,000 | 7,654,598 | ||||||
|
| |||||||
7,654,598 | ||||||||
HOME BUILDERS — 0.58% | ||||||||
Daiwa House Industry Co. Ltd. | 855,000 | 11,902,299 | ||||||
Sekisui Chemical Co. Ltd. | 862,000 | 7,045,721 | ||||||
Sekisui House Ltd. | 855,000 | 8,004,023 | ||||||
|
| |||||||
26,952,043 | ||||||||
HOME FURNISHINGS — 1.41% | ||||||||
Panasonic Corp. | 4,959,015 | 33,693,435 | ||||||
Sharp Corp.a | 2,565,000 | 6,486,207 | ||||||
Sony Corp. | 2,223,000 | 25,012,299 | ||||||
|
| |||||||
65,191,941 | ||||||||
INSURANCE — 2.38% | ||||||||
Dai-ichi Life Insurance Co. Ltd. (The) | 19,665 | 20,016,609 | ||||||
MS&AD Insurance Group Holdings Inc. | 1,111,540 | 17,517,757 | ||||||
NKSJ Holdings Inc. | 769,550 | 13,838,140 | ||||||
Sony Financial Holdings Inc. | 427,500 | 7,032,184 | ||||||
T&D Holdings Inc. | 1,282,500 | 12,972,414 | ||||||
Tokio Marine Holdings Inc. | 1,624,500 | 38,880,115 | ||||||
|
| |||||||
110,257,219 | ||||||||
INTERNET — 1.02% | ||||||||
Dena Co. Ltd.a | 256,500 | 7,141,379 | ||||||
Gree Inc.a | 171,000 | 2,843,448 | ||||||
Rakuten Inc. | 1,624,500 | 15,684,828 | ||||||
SBI Holdings Inc. | 47,880 | 2,913,770 | ||||||
Trend Micro Inc. | 256,500 | 7,108,621 |
10 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Yahoo! Japan Corp. | 33,345 | $ | 11,468,465 | |||||
|
| |||||||
47,160,511 | ||||||||
IRON & STEEL — 1.42% | ||||||||
Daido Steel Co. Ltd. | 855,000 | 4,389,655 | ||||||
Hitachi Metals Ltd. | 242,000 | 2,506,539 | ||||||
Japan Steel Works Ltd. (The) | 855,000 | 4,564,368 | ||||||
JFE Holdings Inc. | 1,026,050 | 12,946,838 | ||||||
Kobe Steel Ltd. | 5,985,000 | 4,586,207 | ||||||
Nippon Steel Corp. | 11,115,000 | 21,435,057 | ||||||
Nisshin Steel Co. Ltd. | 1,710,000 | 1,616,092 | ||||||
Sumitomo Metal Industries Ltd. | 7,695,000 | 10,908,621 | ||||||
Yamato Kogyo Co. Ltd. | 85,500 | 2,557,356 | ||||||
|
| |||||||
65,510,733 | ||||||||
LEISURE TIME — 0.64% | ||||||||
Sega Sammy Holdings Inc. | 427,500 | 8,828,448 | ||||||
Shimano Inc. | 171,000 | 12,317,241 | ||||||
Yamaha Corp. | 342,000 | 3,433,104 | ||||||
Yamaha Motor Co. Ltd. | 598,500 | 5,182,414 | ||||||
|
| |||||||
29,761,207 | ||||||||
MACHINERY — 4.14% | ||||||||
Amada Co. Ltd. | 855,000 | 3,865,517 | ||||||
FANUC Corp. | 427,500 | 69,830,460 | ||||||
Hitachi Construction Machinery Co. Ltd.a | 256,500 | 4,245,517 | ||||||
IHI Corp. | 2,565,000 | 5,503,448 | ||||||
Kawasaki Heavy Industries Ltd. | 3,420,000 | 7,250,575 | ||||||
Komatsu Ltd. | 2,137,500 | 42,040,230 | ||||||
Kubota Corp. | 2,565,000 | 24,634,483 | ||||||
Mitsubishi Heavy Industries Ltd. | 6,840,000 | 28,303,448 | ||||||
Nabtesco Corp. | 171,000 | 3,131,724 | ||||||
Sumitomo Heavy Industries Ltd. | 855,000 | 2,937,357 | ||||||
|
| |||||||
191,742,759 | ||||||||
MANUFACTURING — 1.25% | ||||||||
FUJIFILM Holdings Corp. | 1,026,000 | 17,021,379 | ||||||
Konica Minolta Holdings Inc. | 1,282,500 | 9,483,621 | ||||||
Nikon Corp. | 769,500 | 21,148,965 | ||||||
Olympus Corp.b | 513,000 | 10,122,414 | ||||||
|
| |||||||
57,776,379 | ||||||||
MEDIA — 0.11% | ||||||||
Jupiter Telecommunications Co. Ltd. | 5,130 | 5,234,828 | ||||||
|
| |||||||
5,234,828 |
Security | Shares | Value | ||||||
METAL FABRICATE & HARDWARE — 0.18% |
| |||||||
Maruichi Steel Tube Ltd. | 85,500 | $ | 1,641,207 | |||||
NSK Ltd. | 855,000 | 5,012,069 | ||||||
NTN Corp. | 855,000 | 1,801,724 | ||||||
|
| |||||||
8,455,000 | ||||||||
MINING — 0.43% | ||||||||
Mitsubishi Materials Corp. | 2,565,000 | 7,174,138 | ||||||
Sumitomo Metal Mining Co. Ltd. | 1,224,000 | 12,630,805 | ||||||
|
| |||||||
19,804,943 | ||||||||
OFFICE & BUSINESS EQUIPMENT — 2.16% |
| |||||||
Canon Inc. | 2,565,050 | 85,010,278 | ||||||
Ricoh Co. Ltd.a | 1,710,000 | 13,452,873 | ||||||
Seiko Epson Corp.a | 256,500 | 1,644,483 | ||||||
|
| |||||||
100,107,634 | ||||||||
OIL & GAS — 1.59% | ||||||||
Cosmo Oil Co. Ltd. | 1,710,000 | 3,275,862 | ||||||
Idemitsu Kosan Co. Ltd. | 85,500 | 6,868,391 | ||||||
INPEX Corp. | 5,130 | 29,155,173 | ||||||
JX Holdings Inc. | 4,959,095 | 25,650,491 | ||||||
Showa Shell Sekiyu K.K. | 256,500 | 1,320,172 | ||||||
TonenGeneral Sekiyu K.K. | 855,000 | 7,228,736 | ||||||
|
| |||||||
73,498,825 | ||||||||
PACKAGING & CONTAINERS — 0.06% |
| |||||||
Toyo Seikan Kaisha Ltd. | 256,500 | 2,761,552 | ||||||
|
| |||||||
2,761,552 | ||||||||
PHARMACEUTICALS — 6.42% | ||||||||
Alfresa Holdings Corp. | 85,500 | 4,220,402 | ||||||
Astellas Pharma Inc. | 1,026,030 | 50,056,636 | ||||||
Chugai Pharmaceutical Co. Ltd. | 513,000 | 10,220,690 | ||||||
Daiichi Sankyo Co. Ltd. | 1,453,569 | 23,947,689 | ||||||
Dainippon Sumitomo Pharma Co. Ltd. | 342,000 | 3,773,793 | ||||||
Eisai Co. Ltd. | 598,500 | 27,326,149 | ||||||
Hisamitsu Pharmaceutical Co. Inc. | 85,500 | 4,558,908 | ||||||
Kyowa Hakko Kirin Co. Ltd. | 855,000 | 9,554,598 | ||||||
Medipal Holdings Corp. | 342,000 | 4,896,322 | ||||||
Mitsubishi Tanabe Pharma Corp. | 427,500 | 6,338,793 | ||||||
Ono Pharmaceutical Co. Ltd. | 171,000 | 10,613,793 | ||||||
Otsuka Holdings Co. Ltd. | 769,500 | 23,468,276 | ||||||
Santen Pharmaceutical Co. Ltd. | 171,000 | 7,425,287 | ||||||
Shionogi & Co. Ltd. | 598,500 | 8,622,069 | ||||||
Suzuken Co. Ltd. | 171,000 | 5,789,540 |
SCHEDULEOF INVESTMENTS | 11 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Taisho Pharmaceutical Holdings Co. Ltd. | 85,500 | $ | 6,890,230 | |||||
Takeda Pharmaceutical Co. Ltd. | 1,795,500 | 84,156,897 | ||||||
Tsumura & Co. | 171,000 | 5,269,770 | ||||||
|
| |||||||
297,129,842 | ||||||||
REAL ESTATE — 2.97% | ||||||||
AEON Mall Co. Ltd. | 256,500 | 5,985,000 | ||||||
Daito Trust Construction Co. Ltd. | 171,000 | 16,685,058 | ||||||
Hulic Co. Ltd.b | 513,000 | 2,574,828 | ||||||
Mitsubishi Estate Co. Ltd. | 2,671,000 | 46,836,309 | ||||||
Mitsui Fudosan Co. Ltd. | 1,816,000 | 33,699,208 | ||||||
Nomura Real Estate Holdings Inc. | 256,500 | 4,268,448 | ||||||
NTT Urban Development Corp. | 3,420 | 2,590,115 | ||||||
Sumitomo Realty & Development Co. Ltd. | 855,000 | 20,845,402 | ||||||
Tokyu Land Corp. | 855,000 | 4,193,103 | ||||||
|
| |||||||
137,677,471 | ||||||||
REAL ESTATE INVESTMENT TRUSTS — 0.73% |
| |||||||
Japan Prime Realty Investment Corp. | 1,710 | 4,800,230 | ||||||
Japan Real Estate Investment Corp. | 855 | 8,342,529 | ||||||
Japan Retail Fund Investment Corp. | 4,275 | 7,305,172 | ||||||
Nippon Building Fund Inc. | 855 | 8,648,276 | ||||||
Nomura Real Estate Office Fund Inc. | 855 | 4,919,253 | ||||||
|
| |||||||
34,015,460 | ||||||||
RETAIL — 3.91% | ||||||||
ABC-MART Inc. | 85,500 | 3,576,149 | ||||||
AEON Co. Ltd. | 1,368,000 | 15,724,138 | ||||||
Citizen Holdings Co. Ltd. | 598,500 | 3,309,713 | ||||||
FamilyMart Co. Ltd. | 171,000 | 8,244,253 | ||||||
Fast Retailing Co. Ltd. | 105,200 | 24,546,667 | ||||||
Isetan Mitsukoshi Holdings Ltd. | 769,560 | 8,019,936 | ||||||
J. Front Retailing Co. Ltd. | 855,000 | 4,269,540 | ||||||
Lawson Inc. | 171,000 | 13,103,448 | ||||||
Marui Group Co. Ltd. | 513,000 | 3,754,138 | ||||||
McDonald’s Holdings Co. (Japan) Ltd. | 171,000 | 4,848,276 | ||||||
Nitori Holdings Co. Ltd. | 85,500 | 8,560,919 | ||||||
Seven & I Holdings Co. Ltd. | 1,710,080 | 51,870,243 | ||||||
Shimamura Co. Ltd. | 85,500 | 10,144,253 | ||||||
Takashimaya Co. Ltd. | 855,000 | 6,104,023 | ||||||
USS Co. Ltd. | 51,300 | 5,510,000 | ||||||
Yamada Denki Co. Ltd. | 196,650 | 9,468,333 | ||||||
|
| |||||||
181,054,029 |
Security | Shares | Value | ||||||
SEMICONDUCTORS — 0.57% | ||||||||
Rohm Co. Ltd. | 256,500 | $ | 8,369,827 | |||||
Sumco Corp.b | 256,500 | 1,932,759 | ||||||
Tokyo Electron Ltd. | 342,052 | 16,054,165 | ||||||
|
| |||||||
26,356,751 | ||||||||
SOFTWARE — 0.44% | ||||||||
Konami Corp. | 256,500 | 5,886,724 | ||||||
Nexon Co. Ltd.a,b | 256,500 | 3,698,448 | ||||||
Nomura Research Institute Ltd. | 171,000 | 3,570,690 | ||||||
Oracle Corp. Japan | 85,500 | 4,133,046 | ||||||
Square Enix Holdings Co. Ltd. | 171,000 | 2,865,287 | ||||||
|
| |||||||
20,154,195 | ||||||||
STORAGE & WAREHOUSING — 0.07% |
| |||||||
Mitsubishi Logistics Corp. | 284,000 | 3,231,724 | ||||||
|
| |||||||
3,231,724 | ||||||||
TELECOMMUNICATIONS — 4.96% |
| |||||||
KDDI Corp. | 5,985 | 42,804,597 | ||||||
Nippon Telegraph and Telephone Corp. | 940,500 | 43,421,552 | ||||||
NTT DOCOMO Inc. | 35,055 | 59,633,793 | ||||||
SoftBank Corp. | 2,052,000 | 83,600,000 | ||||||
|
| |||||||
229,459,942 | ||||||||
TEXTILES — 0.57% | ||||||||
Teijin Ltd. | 2,565,000 | 5,634,483 | ||||||
Toray Industries Inc. | 3,420,000 | 20,878,161 | ||||||
|
| |||||||
26,512,644 | ||||||||
TOYS, GAMES & HOBBIES — 0.83% |
| |||||||
Namco Bandai Holdings Inc. | 427,598 | 6,771,667 | ||||||
Nintendo Co. Ltd. | 256,500 | 28,696,552 | ||||||
Sanrio Co. Ltd.a | 85,500 | 2,942,816 | ||||||
|
| |||||||
38,411,035 | ||||||||
TRANSPORTATION — 4.83% | ||||||||
Central Japan Railway Co. | 3,420 | 29,744,827 | ||||||
East Japan Railway Co. | 769,500 | 51,496,552 | ||||||
Hankyu Hanshin Holdings Inc. | 1,710,000 | 9,718,391 | ||||||
Kamigumi Co. Ltd. | 855,000 | 6,868,391 | ||||||
Kawasaki Kisen Kaisha Ltd.a,b | 1,710,000 | 2,293,103 | ||||||
Keikyu Corp. | 859,000 | 8,381,558 | ||||||
Keio Corp. | 1,710,000 | 13,387,356 | ||||||
Keisei Electric Railway Co. Ltd. | 120,000 | 1,157,088 | ||||||
Kintetsu Corp.a | 3,755,000 | 15,442,018 | ||||||
Mitsui O.S.K. Lines Ltd. | 2,565,000 | 6,420,690 |
12 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Nippon Express Co. Ltd. | 1,710,000 | $ | 6,704,598 | |||||
Nippon Yusen K.K. | 3,420,000 | 6,901,149 | ||||||
Odakyu Electric Railway Co. Ltd. | 965,000 | 10,241,571 | ||||||
Tobu Railway Co. Ltd. | 1,710,000 | 9,500,000 | ||||||
Tokyu Corp. | 2,565,000 | 12,612,069 | ||||||
West Japan Railway Co. | 427,500 | 18,699,713 | ||||||
Yamato Holdings Co. Ltd. | 855,000 | 14,195,402 | ||||||
|
| |||||||
223,764,476 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $6,518,910,851) | 4,619,774,099 | |||||||
SHORT-TERM INVESTMENTS — 1.45% |
| |||||||
MONEY MARKET FUNDS — 1.45% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.23%c,d,e | 61,765,442 | 61,765,442 | ||||||
BlackRock Cash Funds: Prime |
| |||||||
0.23%c,d,e | 4,680,670 | 4,680,670 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%c,d | 524,241 | 524,241 | ||||||
|
| |||||||
66,970,353 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $66,970,353) | 66,970,353 | |||||||
|
| |||||||
TOTAL INVESTMENTS | 4,686,744,452 | |||||||
Other Assets, Less Liabilities — (1.25)% |
| (57,710,084 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% | $ | 4,629,034,368 | ||||||
|
|
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. |
Financial futures contracts purchased as of August 31, 2012 were as follows:
Number of Contracts | Issue (Expiration) | Exchange | Notional Value | Net Unrealized Appreciation (Depreciation) | ||||||||||
94 | TOPIX Index (Sept. 2012) | Tokyo Stock | $8,721,711 | $(168,072) | ||||||||||
See notes to financial statements.
SCHEDULEOF INVESTMENTS | 13 |
Table of Contents
Statement of Assets and Liabilities
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2012
ASSETS | ||||
Investments, at cost: | ||||
Unaffiliated | $ | 6,518,910,851 | ||
Affiliated (Note 2) | 66,970,353 | |||
|
| |||
Total cost of investments | $ | 6,585,881,204 | ||
|
| |||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||
Unaffiliated | $ | 4,619,774,099 | ||
Affiliated (Note 2) | 66,970,353 | |||
|
| |||
Total fair value of investments | 4,686,744,452 | |||
Foreign currencies, at valueb | 5,115,398 | |||
Cash held at broker, at valuec | 3,238,570 | |||
Receivables: | ||||
Dividends and interest | 4,183,161 | |||
|
| |||
Total Assets | 4,699,281,581 | |||
|
| |||
LIABILITIES | ||||
Payables: | ||||
Collateral for securities on loan (Note 5) | 66,446,112 | |||
Capital shares redeemed | 1,467,555 | |||
Futures variation margin | 168,072 | |||
Investment advisory fees (Note 2) | 2,165,474 | |||
|
| |||
Total Liabilities | 70,247,213 | |||
|
| |||
NET ASSETS | $ | 4,629,034,368 | ||
|
| |||
Net assets consist of: | ||||
Paid-in capital | $ | 7,398,500,833 | ||
Undistributed net investment income | 3,443,177 | |||
Accumulated net realized loss | (873,742,171 | ) | ||
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies | (1,899,167,471 | ) | ||
|
| |||
NET ASSETS | $ | 4,629,034,368 | ||
|
| |||
Shares outstandingd | 513,000,000 | |||
|
| |||
Net asset value per share | $ | 9.02 | ||
|
|
a | Securities on loan with a value of $63,157,973. See Note 5. |
b | Cost of foreign currencies: $5,087,019. |
c | Cost of cash held at broker: $3,178,498. |
d | $0.001 par value, number of shares authorized: 2,124,600,000. |
See notes to financial statements.
14 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statement of Operations
iSHARES® MSCI JAPAN INDEX FUND
Year ended August 31, 2012
NET INVESTMENT INCOME | ||||
Dividends — unaffiliateda | $ | 134,515,381 | ||
Interest — affiliated (Note 2) | 1,047 | |||
Securities lending income — affiliated (Note 2) | 1,259,601 | |||
|
| |||
Total investment income | 135,776,029 | |||
|
| |||
EXPENSES | ||||
Investment advisory fees (Note 2) | 28,798,955 | |||
|
| |||
Total expenses | 28,798,955 | |||
|
| |||
Net investment income | 106,977,074 | |||
|
| |||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||
Net realized gain (loss) from: | ||||
Investments — unaffiliated | (163,584,584 | ) | ||
In-kind redemptions — unaffiliated | (101,785,274 | ) | ||
Futures contracts | 1,173,245 | |||
Foreign currency transactions | 986,925 | |||
|
| |||
Net realized loss | (263,209,688 | ) | ||
|
| |||
Net change in unrealized appreciation/depreciation on: | ||||
Investments | (266,764,734 | ) | ||
Futures contracts | (168,072 | ) | ||
Translation of assets and liabilities in foreign currencies | (33,903 | ) | ||
|
| |||
Net change in unrealized appreciation/depreciation | (266,966,709 | ) | ||
|
| |||
Net realized and unrealized loss | (530,176,397 | ) | ||
|
| |||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (423,199,323 | ) | |
|
|
a | Net of foreign withholding tax of $10,094,180. |
See notes to financial statements.
FINANCIAL STATEMENTS | 15 |
Table of Contents
Statements of Changes in Net Assets
iSHARES® MSCI JAPAN INDEX FUND
Year ended August 31, 2012 | Year ended August 31, 2011 | |||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||
OPERATIONS: | ||||||||
Net investment income | $ | 106,977,074 | $ | 90,153,430 | ||||
Net realized loss | (263,209,688 | ) | (34,907,354 | ) | ||||
Net change in unrealized appreciation/depreciation | (266,966,709 | ) | (73,435,639 | ) | ||||
|
|
|
| |||||
Net decrease in net assets resulting from operations | (423,199,323 | ) | (18,189,563 | ) | ||||
|
|
|
| |||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||
From net investment income | (109,422,889 | ) | (93,105,502 | ) | ||||
|
|
|
| |||||
Total distributions to shareholders | (109,422,889 | ) | (93,105,502 | ) | ||||
|
|
|
| |||||
CAPITAL SHARE TRANSACTIONS: | ||||||||
Proceeds from shares sold | 758,956,904 | 4,949,223,864 | ||||||
Cost of shares redeemed | (2,791,809,212 | ) | (1,586,188,582 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in net assets from capital share transactions | (2,032,852,308 | ) | 3,363,035,282 | |||||
|
|
|
| |||||
INCREASE (DECREASE) IN NET ASSETS | (2,565,474,520 | ) | 3,251,740,217 | |||||
NET ASSETS | ||||||||
Beginning of year | 7,194,508,888 | 3,942,768,671 | ||||||
|
|
|
| |||||
End of year | $ | 4,629,034,368 | $ | 7,194,508,888 | ||||
|
|
|
| |||||
Undistributed net investment income included in net assets at end of year | $ | 3,443,177 | $ | 3,196,412 | ||||
|
|
|
| |||||
SHARES ISSUED AND REDEEMED | ||||||||
Shares sold | 76,800,000 | 471,600,000 | ||||||
Shares redeemed | (298,200,000 | ) | (155,400,000 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (221,400,000 | ) | 316,200,000 | |||||
|
|
|
|
See notes to financial statements.
16 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI JAPAN INDEX FUND
(For a share outstanding throughout each period)
Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | ||||||||||||||||
Net asset value, beginning of year | $ | 9.80 | $ | 9.43 | $ | 10.24 | $ | 11.62 | $ | 14.07 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.18 | 0.16 | 0.12 | 0.13 | 0.14 | |||||||||||||||
Net realized and unrealized gain (loss)b | (0.77 | ) | 0.37 | (0.77 | ) | (1.39 | ) | (2.39 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (0.59 | ) | 0.53 | (0.65 | ) | (1.26 | ) | (2.25 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.19 | ) | (0.16 | ) | (0.16 | ) | (0.12 | ) | (0.20 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.19 | ) | (0.16 | ) | (0.16 | ) | (0.12 | ) | (0.20 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 9.02 | $ | 9.80 | $ | 9.43 | $ | 10.24 | $ | 11.62 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | (5.96 | )% | 5.54 | % | (6.41 | )% | (10.68 | )% | (16.13 | )% | ||||||||||
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Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 4,629,034 | $ | 7,194,509 | $ | 3,942,769 | $ | 6,164,170 | $ | 7,499,536 | ||||||||||
Ratio of expenses to average net assets | 0.53 | % | 0.51 | % | 0.54 | % | 0.56 | % | 0.52 | % | ||||||||||
Ratio of net investment income to average net assets | 1.95 | % | 1.53 | % | 1.20 | % | 1.46 | % | 1.11 | % | ||||||||||
Portfolio turnover ratec | 3 | % | 4 | % | 5 | % | 4 | % | 4 | % |
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 | 17 |
Table of Contents
iSHARES® MSCI JAPAN INDEX FUND
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 following fund (the “Fund”):
iShares MSCI Index Fund | Diversification Classification | |
Japan | Diversified |
Non-diversified funds generally hold securities of fewer issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers.
The investment objective of the Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index. The investment adviser uses a “passive” or index approach to try to achieve the Fund’s investment objective.
The Fund may invest in securities of non-U.S. issuers that may trade in non-U.S. markets. This may involve certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: generally less liquid and less efficient securities markets; generally greater price volatility; exchange rate fluctuations and exchange controls; imposition of restrictions on the expatriation of funds or other assets of the Fund; less publicly available information about issuers; the imposition of withholding or other taxes; higher transaction and custody costs; settlement delays and risk of loss attendant in settlement procedures; difficulties in enforcing contractual obligations; less regulation of securities markets; different accounting, disclosure and reporting requirements; more substantial governmental involvement in the economy; higher inflation rates; greater social, economic and political uncertainties; the risk of nationalization or expropriation of assets and the risk of war.
Pursuant to the Company’s organizational documents, the Fund’s officers and directors are indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred.
1. | SIGNIFICANT ACCOUNTING POLICIES |
The following significant accounting policies are consistently followed by the Fund in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
SECURITY VALUATION
The Fund’s investments are valued at fair value each day that the Fund’s listing exchange is open. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) provides oversight of the valuation of
18 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES® MSCI JAPAN INDEX FUND
investments for the Fund. The investments of the Fund are valued pursuant to policies and procedures developed by the Global Valuation Committee and approved by the Board of Directors of the Company (the “Board”).
• | Equity investments traded on a recognized securities exchange are valued at that day’s last reported trade price or the official closing price, as applicable, on the exchange where the stock is primarily traded. Equity investments traded on a recognized exchange for which there were no sales on that day are valued at the last traded price. |
• | Open-end U.S. mutual funds are valued at that day’s published net asset value (NAV). |
• | Financial futures contracts are valued at that day’s last reported settlement price on the exchange where the contract is traded. |
In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the fair value of such investment or if a price is not available, the investment will be valued based upon other available factors deemed relevant by the Global Valuation Committee, in accordance with policies approved by the Board. These factors include but are not limited to (i) attributes specific to the investment; (ii) the principal market for the investment; (iii) the customary participants in the principal market for the investment; (iv) data assumptions by market participants for the investment, if reasonably available; (v) quoted prices for similar investments in active markets; and (vi) other factors, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and/or other default rates. Valuations based on such factors are reported to the Board on a quarterly basis.
The Global Valuation Committee employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the Company’s pricing vendors, a regular review of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices and large movements in market values, and reviews of market related activity.
Fair value pricing could result in a difference between the prices used to calculate the Fund’s net asset value and the prices used by the Fund’s underlying index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s underlying index.
Various inputs are used in determining the fair value of financial instruments. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes. The level of a value determined for 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. The three levels of the fair value hierarchy are as follows:
• | Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities; |
• | Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability (such as exchange rates, financing terms, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs; and |
• | Level 3 — Unobservable inputs for the asset or liability, including the Fund’s assumptions used in determining the fair value of investments. |
NOTESTO FINANCIAL STATEMENTS | 19 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES® MSCI JAPAN INDEX FUND
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. In accordance with the Company’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period.
As of August 31, 2012, the value of each of the Fund’s investments was classified as Level 1. The breakdown of the Fund’s investments into major categories is disclosed in its Schedule of Investments.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are accounted for on trade date. Dividend income is recognized on the ex-dividend date, net of any foreign taxes withheld at source. Any taxes withheld that are reclaimable from foreign tax authorities as of August 31, 2012 are reflected in dividends receivable. Non-cash dividends received in the form of stock in an elective dividend, if any, are recorded as dividend income at fair value. Distributions received by the Fund may include a return of capital that is estimated by management. Such amounts are recorded as a reduction of the cost of investments or reclassified to capital gains. Interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method.
FOREIGN CURRENCY TRANSLATION
The accounting records of the Fund are maintained in U.S. dollars. Foreign currencies, as well as investment securities and other assets and liabilities denominated in foreign currencies, are translated into U.S. dollars using exchange rates deemed appropriate by the investment adviser. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars on the respective dates of such transactions.
The Fund does not isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of securities. Such fluctuations are reflected by the Fund as a component of realized and unrealized gains and losses from investments for financial reporting purposes.
FOREIGN TAXES
The Fund may be subject to foreign taxes (a portion of which may be reclaimable) on income, capital gains on investments, certain foreign currency transactions or other corporate events. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the Fund invests. These foreign taxes, if any, are paid by the Fund and are reflected in its Statement of Operations as follows: foreign taxes withheld at source are presented as a reduction of income, foreign taxes on securities lending income are presented as a reduction of securities lending income, foreign taxes on capital gains from sales of investments and foreign currency transactions are included in their respective net realized gain (loss) categories, and foreign taxes on other corporate events are reflected in “Other foreign taxes.” Foreign taxes payable as of August 31, 2012, if any, are disclosed in the Fund’s Statement of Assets and Liabilities.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends and distributions paid by the Fund are recorded on the ex-dividend dates. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Fund.
20 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES® MSCI JAPAN INDEX 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 is required.
2. | INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES |
Pursuant to an Investment Advisory Agreement with the Company, BlackRock Fund Advisors (“BFA”) manages the investment of the Fund’s assets. BFA is a California corporation indirectly owned by BlackRock, Inc. (“BlackRock”). Under the Investment Advisory Agreement, BFA is responsible for substantially all expenses of the Fund, except interest, taxes, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution fees, litigation expenses and any extraordinary expenses.
For its investment advisory services to the Fund, BFA is entitled to an annual investment advisory fee based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds, as follows:
Investment Advisory Fee | Aggregate Average Daily Net Assets | ||||
0.59 | % | 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 BlackRock Institutional Trust Company, N.A. (“BTC”) to serve as securities lending agent for the Fund, subject to applicable conditions. BTC is an affiliate of BFA. Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, and any fees or other payments to and from borrowers of securities. The Fund retains 65% of securities lending income and pays a fee to BTC equal to 35% of such income. As securities lending agent, BTC is responsible for all transaction fees and all other operational costs relating to securities lending activities, other than extraordinary expenses. BTC is also responsible for fees and expenses incurred by the Fund as a result of the investment of cash collateral received for securities on loan in a money market fund managed by BFA or an affiliate.
For the year ended August 31, 2012, BTC earned securities lending agent fees of $678,247 from the Fund.
At a special meeting of the Board held on January 5, 2012, the directors approved a new distribution agreement with BlackRock Investments, LLC (“BRIL”). BRIL is an affiliate of BFA. Effective April 1, 2012, BRIL replaced SEI Investments Distribution Co. as the distributor for the Fund. Pursuant to the new distribution agreement, BFA is responsible for any fees or expenses for distribution services provided to the Fund.
The Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is included in “Interest — affiliated” in the Statement of Operations.
The PNC Financial Services Group, Inc. is the largest stockholder of BlackRock and is considered to be an affiliate of the Fund for 1940 Act purposes.
NOTESTO FINANCIAL STATEMENTS | 21 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES® MSCI JAPAN INDEX FUND
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, 2012, aggregated $148,910,146 and $177,908,708, respectively.
In-kind purchases and sales (see Note 4) for the year ended August 31, 2012, aggregated $748,187,939 and $2,752,316,713, respectively.
4. | CAPITAL SHARE TRANSACTIONS |
Capital shares are issued and redeemed by the Fund only in aggregations of a specified number of shares or multiples thereof (“Creation Units”) at net asset value. Except when aggregated in Creation Units, shares of the Fund are not redeemable. Transactions in capital shares for the Fund are disclosed in detail in the Statements of Changes in Net Assets.
The consideration for the purchase of Creation Units of a fund in the Company generally consists of the in-kind deposit of a designated portfolio of securities, which constitutes an optimized representation of the securities of that fund’s underlying index, and a specified amount of cash. Certain funds in the Company may be offered in Creation Units solely or partially for cash in U.S. dollars. Investors purchasing and redeeming Creation Units may pay a purchase transaction fee and a redemption transaction fee directly to State Street Bank and Trust Company, the Company’s administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash. Investors transacting in Creation Units for cash pay an additional variable charge to compensate the relevant fund for certain transaction costs (i.e., stamp taxes, taxes on currency or other financial transactions, and brokerage costs) and market impact expenses relating to investing in portfolio securities.
5. | 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 a fund or through one or more joint accounts or money market funds, including those managed by BFA or its affiliates. The Fund could suffer a loss if the value of an investment purchased with cash collateral falls below the value of the cash collateral received.
As of August 31, 2012, any securities on loan 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, 2012 and the value of the related collateral are disclosed in the Statement of Assets and Liabilities. Securities lending income, as disclosed in the Statement of Operations, represents the income earned from the investment of the cash collateral, net of fees and other payments to and from borrowers, and less the fees paid to BTC as securities lending agent.
22 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES® MSCI JAPAN INDEX FUND
6. | INCOME TAX INFORMATION |
U.S. GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset values per share. The following permanent differences as of August 31, 2012, attributable to passive foreign investment companies, the expiration of capital loss carryforwards, foreign currency transactions and realized gains (losses) from in-kind redemptions, were reclassified to the following accounts:
Paid-in Capital | Undistributed Net Investment Income/Distributions in Excess of Net Investment Income | Undistributed Net Realized Gain/Accumulated Net Realized Loss | ||||||
$(164,807,840) | $ | 2,692,580 | $ | 162,115,260 |
The tax character of distributions paid during the years ended August 31, 2012 and August 31, 2011 was as follows:
2012 | 2011 | |||||||
Ordinary income | $ | 109,422,889 | $ | 93,105,502 | ||||
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| |||||
As of August 31, 2012, the tax components of accumulated net earnings (losses) were as follows:
Undistributed Ordinary Income | Capital Loss Carryforwards | Net Unrealized Gains (Losses) a | Qualified Late-Year Losses b | Total | ||||||||||||
$8,602,016 | $ | (697,166,401 | ) | $ | (1,958,284,365 | ) | $ | (122,617,715 | ) | $ | (2,769,466,465 | ) |
a | The difference between book-basis and tax-basis unrealized gains (losses) was attributable primarily to the tax deferral of losses on wash sales and the realization for tax purposes of unrealized gains on investments in passive foreign investment companies. |
b | The Fund has elected to defer certain qualified late-year losses and recognize such losses in the year ending August 31, 2013. |
As of August 31, 2012, the Fund had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:
Non- Expiring a | Expiring 2013 | Expiring 2014 | Expiring 2015 | Expiring 2016 | Expiring 2017 | Expiring 2018 | Expiring 2019 | Total | ||||||||||||||||||||||||||||
$ | 118,947,587 | $ | 8,733,802 | $ | 68,122,871 | $ | 27,817,841 | $ | 44,443,527 | $ | 116,295,478 | $ | 173,577,101 | $ | 139,228,194 | $ | 697,166,401 |
a | Must be utilized prior to losses subject to expiration. |
The Fund may own shares in certain foreign investment entities, referred to, under U.S. tax law, as “passive foreign investment companies.” The Fund may elect to mark-to-market annually the shares of each passive foreign investment company and would be required to distribute to shareholders any such marked-to-market gains.
As of August 31, 2012, the cost of investments for federal income tax purposes was $6,644,998,098. Net unrealized depreciation was $1,958,253,646, of which $146,956,758 represented gross unrealized appreciation on securities and $2,105,210,404 represented gross unrealized depreciation on securities.
NOTESTO FINANCIAL STATEMENTS | 23 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES® MSCI JAPAN INDEX FUND
Management has reviewed the tax positions as of August 31, 2012, inclusive of the open tax return years, and has determined that no provision for income tax is required in the Fund’s financial statements.
7. | FINANCIAL FUTURES CONTRACTS |
The Fund may purchase or sell financial futures contracts in an effort to help the Fund track its underlying index. A futures contract is a standardized, exchange-traded agreement to buy and sell a financial instrument at a set price on a future date. Upon entering into a futures contract, the Fund is required to pledge to the executing broker which holds segregated from its own assets, an amount of cash, U.S. government securities or other high-quality debt and equity securities equal to the minimum initial margin requirements of the exchange on which the contract is traded. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as margin variation and are recorded by the Fund as unrealized appreciation or depreciation. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Losses may arise if the value of a futures contract decreases due to an unfavorable change in the market rates or values of the underlying instrument during the term of the contract or if the counterparty does not perform under the contract. The use of futures contracts also involves the risk of an imperfect correlation in the movements in the price of futures contracts and the assets underlying such contracts.
The following table shows the value of futures contracts held as of August 31, 2012 and the related locations in the Statement of Assets and Liabilities, presented by risk exposure category:
Liabilities | ||||
Equity contracts: | ||||
Variation margin/Net assets consist of – net unrealized appreciation (depreciation)a | $ | (168,072 | ) | |
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| |||
a | Represents cumulative depreciation of futures contracts as reported in the Schedule of Investments. |
The following table shows the realized and unrealized gains (losses) on futures contracts held during the year ended August 31, 2012 and the related locations in the Statement of Operations, presented by risk exposure category:
Net Realized Gain (Loss) | Net Change in Unrealized Appreciation/Depreciation | |||||||
Equity contracts: | ||||||||
Futures contracts | $ | 1,173,245 | $ | (168,072 | ) | |||
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| |||||
For the year ended August 31, 2012, the average quarter-end number of contracts and notional value of open futures contracts for the Fund were 247 and $23,488,330, respectively.
8. | 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.
24 | 2012 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 Japan Index Fund (the “Fund”), at August 31, 2012, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and 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, 2012 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
October 23, 2012
REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 25 |
Table of Contents
iSHARES® MSCI JAPAN INDEX FUND
For the fiscal year ended August 31, 2012, the Fund earned foreign source income of $144,609,561 and paid foreign taxes of $10,091,119 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 $119,514,008 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, 2012.
In February 2013, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2012. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.
26 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Board Review and Approval of Investment Advisory
Contract (Unaudited)
iSHARES® MSCI JAPAN 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 annually to consider the Investment Advisory Contract between the Company and BFA (the “Advisory Contract”) on behalf of the Fund. The Independent Directors requested, and BFA provided, such information as the Independent Directors, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of Independent Directors (the “15(c) Committee”), with independent counsel, met with management on April 19, 2012, April 27, 2012, and May 16, 2012, to discuss the types of information the Independent Directors required and the manner in which management would organize and present such information. At a meeting held on May 17, 2012, management presented information to the Board relating to the continuance of the Advisory Contract, and the Board, including the Independent Directors, reviewed and discussed such information at length. The Independent Directors requested from management certain additional information, and the 15(c) Committee met with management on June 8, 2012, to discuss the additional requests. At a meeting held on June 20-21, 2012, the Board, including the Independent Directors, reviewed additional information provided by management in response to these requests. The Board, including a majority of the Independent Directors, approved the continuance of the Advisory Contract for the Fund, based on a review of qualitative and quantitative information provided by BFA, including a review of supplemental information management provided at the request of the Independent Directors. The Board noted its satisfaction with the extent and quality of information, and detailed responses, provided by BFA. The Independent Directors were advised by their independent counsel throughout the process. In approving the Advisory Contract for the Fund, the Board, including the Independent Directors, considered the following factors, no one of which was controlling, and made the following conclusions:
Expenses and Performance of the Fund — 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, sponsor, inception date, or other differentiating factors, but that 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 those tracked by the Fund, the Lipper Group 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), as applicable. 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 also received a detailed explanation from BFA regarding its rationale for including funds that had been excluded from Lipper’s consideration due to Lipper’s methodology parameters, as well as information showing the effect of including these additional funds in the analysis. The Board further noted that due to the limitations in providing comparable funds in the various Lipper Groups, the statistical information may or may not provide meaningful direct comparisons to the Fund.
The Board also noted that the investment advisory fees and overall expenses for the Fund compared favorably to the investment advisory fee rates and overall expenses of the funds in the Lipper Group.
In addition, the Board reviewed statistical information prepared by Lipper regarding the performance of the Fund for the one-, three-, five-, ten-year, and since inception periods, as applicable, and the “last quarter” period ended December 31, 2011, and a comparison of the Fund’s performance to its performance benchmark index for the same periods. To the extent that any of the comparison funds included in the Lipper Group track the same index as the Fund, Lipper also provided, and the Board reviewed, a comparison of the Fund’s performance to that of such relevant comparison funds for the same periods. The Board noted that the Fund generally performed in line with its performance benchmark index over the relevant periods. In considering this information, the Board noted that the Lipper Group includes funds that may have different investment objectives and/or benchmarks from the Fund. In addition, the Board noted that the Fund seeks to
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 27 |
Table of Contents
Board Review and Approval of Investment Advisory
Contract (Unaudited) (Continued)
iSHARES® MSCI JAPAN INDEX FUND
track its benchmark index and that, during the prior year, the Board received periodic reports on the Fund’s performance in comparison with its benchmark index. Such periodic comparative performance information was also considered by the Board.
Based on this review, the other factors considered at the meeting, and their general knowledge of mutual fund pricing, the Board concluded that the investment advisory fees and expense levels and the historical performance of the Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA over prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the Fund and its shareholders. The Board noted that BFA became an indirect wholly-owned subsidiary of BlackRock, Inc. (“BlackRock”) in December 2009. The Board acknowledged that additional resources to support the Fund and its shareholders have been added or enhanced since then, including in such areas as investor education, product management, customized portfolio consulting support, and capital markets support. The Board also considered BFA’s compliance program and its compliance record with respect to the Fund. In that regard, 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 on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Fund. In addition to the above considerations, the Board reviewed and considered BFA’s investment and risk management processes and strategies, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that the Fund had met its investment objective consistently since its inception date.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Fund under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Costs of Services Provided to Fund and Profits Realized by BFA and Affiliates — The Board reviewed information about the profitability to BFA of the Fund based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and all other sources of revenue and expense to BFA and its affiliates from the Fund’s operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, noting that the 15(c) Committee had focused on the methodology and proposed presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC from securities lending by the Fund. The Board also discussed BFA’s profit margin as reflected in the Fund’s profitability analysis and reviewed information regarding economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Fund and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.
Economies of Scale — The Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Fund’s assets, noting that the issue of economies of scale had been focused on extensively by the 15(c) Committee during its meetings and addressed by management. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through breakpoints, waivers, or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BFA’s historical profitability, including BFA’s and its affiliates’ costs in providing
28 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Board Review and Approval of Investment Advisory
Contract (Unaudited) (Continued)
iSHARES® MSCI JAPAN INDEX FUND
services. The cost information distinguished between fixed and variable costs, and explained how the nature of such costs may impact the existence of scale benefits. The Board noted that the Advisory Contract for the Fund already provided for breakpoints in the Fund’s investment advisory fee rates as the assets of the Fund, on an aggregated basis with the assets of certain other iShares funds, increase. The Board noted that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding new or revised breakpoints in the future. Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider this issue at least annually, concluded that the structure of the investment advisory fees reflects appropriate sharing of potential economies of scale with the Fund’s shareholders and supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end and closed-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds and institutional separate accounts (together, the “Other Accounts”). The Board noted that BFA and its affiliates do manage Other Accounts with a substantially similar investment objective and strategy as the Fund. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Fund, including in terms of the different generally more extensive services provided, as well as other significant differences in the approach of BFA and its affiliates to the Fund, on one hand, and Other Accounts, on the other. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks of managing and providing other services to the Fund, as a publicly traded exchange traded fund, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rates under the Advisory Contract for the Fund were generally higher than the investment advisory/management fee rates for the Other Accounts that are institutional clients of BFA (or its affiliates) and concluded that the differences appeared to be consistent with the factors discussed.
Other Benefits to BFA and/or its Affiliates — The Board reviewed ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Fund by BFA, such as payment of revenue to BTC, the Fund’s securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Fund in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board noted that BFA generally does 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 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. The Board concluded that any such ancillary benefits would not be disadvantageous to the Fund’s shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.
Based on the considerations described above, the Board determined that the investment advisory fee rates under the Advisory Contract do not constitute fees that are so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that it is in the best interest of the Fund and its shareholders to approve the continuance of the Advisory Contract for the coming year.
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 29 |
Table of Contents
Supplemental Information (Unaudited)
iSHARES® MSCI JAPAN INDEX FUND
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 the 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 | |||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||
$ | 0.19385 | $ | — | $ | — | $0.19385 | 100 | % | — | % | — | % | 100 | % |
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 are listed for trading, as of the time that the Fund’s NAV is calculated. The Fund’s Market Price may be at, above or below its NAV. The NAV of the Fund will fluctuate with changes in the market value of its portfolio holdings. The Market Price of the Fund will fluctuate in accordance with changes in its NAV, as well as market supply and demand.
Premiums or discounts are the differences (expressed as a percentage) between the NAV and Market Price of the Fund on a given day, generally at the time NAV is calculated. A premium is the amount that the Fund is trading above the reported NAV, expressed as a percentage of the NAV. A discount is the amount that the Fund is trading below the reported NAV, expressed as a percentage of the NAV.
The following information shows the frequency distributions of premiums and discounts for the Fund included in this report. The information shown for the Fund is for five calendar years through the date of the most recent calendar quarter-end. The specific period covered for the Fund is disclosed in the table.
30 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES® MSCI JAPAN INDEX 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 the table. All data presented here represents past performance, which cannot be used to predict future results.
Period Covered: January 1, 2007 through June 30, 2012
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% | 1 | 0.07 | ||||||
Greater than 5.0% and Less than 5.5% | 3 | 0.22 | ||||||
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% | 3 | 0.22 | ||||||
Greater than 2.5% and Less than 3.0% | 17 | 1.23 | ||||||
Greater than 2.0% and Less than 2.5% | 18 | 1.30 | ||||||
Greater than 1.5% and Less than 2.0% | 47 | 3.40 | ||||||
Greater than 1.0% and Less than 1.5% | 99 | 7.15 | ||||||
Greater than 0.5% and Less than 1.0% | 223 | 16.10 | ||||||
Between 0.5% and –0.5% | 550 | 39.73 | ||||||
Less than –0.5% and Greater than –1.0% | 154 | 11.13 | ||||||
Less than –1.0% and Greater than –1.5% | 93 | 6.72 | ||||||
Less than –1.5% and Greater than –2.0% | 67 | 4.84 | ||||||
Less than –2.0% and Greater than –2.5% | 35 | 2.53 | ||||||
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% | 7 | 0.51 | ||||||
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% | 4 | 0.29 | ||||||
Less than –5.5% | 5 | 0.36 | ||||||
|
|
|
| |||||
1,384 | 100.00 | % | ||||||
|
|
|
|
SUPPLEMENTAL INFORMATION | 31 |
Table of Contents
Director and Officer Information (Unaudited)
iSHARES® MSCI JAPAN INDEX FUND
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 he or she resigns, is removed, dies, retires or becomes incapacitated. The President, Treasurer and Secretary shall each hold office until their successors are chosen and qualified, and all other officers shall hold office until he or she resigns or is removed. Directors who are not interested persons (as defined in the 1940 Act) are referred to as Independent Directors.
The registered investment companies advised by BFA or its affiliates are organized into one complex of closed-end funds, two complexes of open-end funds and one complex of exchange-traded funds (“Exchange-Traded Fund Complex”) (each, a “BlackRock Fund Complex”). Each Fund is included in the BlackRock Fund Complex referred to as the Exchange-Traded Fund Complex. Each Director of iShares, Inc. also serves as a Trustee of iShares Trust, a Director of iShares MSCI Russia Capped Index Fund, Inc. and a Trustee of iShares U.S. ETF Trust and, as a result, oversees a total of 276 funds within the Exchange-Traded 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 Robert H. Silver 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-iShares (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 (55) | 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); President of Board of Directors, Hope & Heroes Children’s Cancer Fund (since 2002); President of the Board of Directors, Periwinkle Theatre for Youth (since 1983). | Director of BlackRock, Inc. (since 2007); Trustee of iShares Trust (since 2009); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). | |||
Michael Lathamb (47) | Director (since 2010); President (since 2007). | Chairman of iShares, BlackRock (since 2011); Global Chief Executive Officer of iShares, BlackRock (2010-2011); Managing Director, BlackRock (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, BGI (2003-2007). | Trustee of iShares Trust (since 2010); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). |
a | Robert S. Kapito is deemed to be an “interested person” (as defined in the 1940 Act) of the Trust 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 Trust due to his affiliations with BlackRock, Inc. and its affiliates. |
32 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Director and Officer Information (Unaudited) (Continued)
iSHARES® MSCI JAPAN INDEX FUND
Independent Directors
Name (Age) | Position(s) (Length of Service) | Principal Occupation(s) During the Past 5 Years | Other Directorships Held | |||
Robert H. Silver (57) | Director (since 2007); Independent Chairman (since 2012). | President and Co-Founder of The Bravitas Group, Inc. (since 2006); Director and Vice Chairman of the YMCA of Greater NYC (2001-2011); Broadway Producer (2006-2011); 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); President and Chief Operating Officer of UBS Financial Services Inc. (formerly Pain Webber Inc.) (2004-2005) and various executive positions with UBS and its affiliates (1988-2005); CPA and Audit Manager of KPMG, LLP (formerly Peat Marwick Mitchell) (1977-1983). | Trustee of iShares Trust (since 2007); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Independent Chairman of iShares, Inc., iShares MSCI Russia Capped Index Fund, Inc. and iShares U.S. ETF Trust (since 2012). | |||
Cecilia H. Herbert (63) | Director (since 2005); Nominating and Governance Committee Chair and Equity Plus Committee Chair (since 2012). | Director (since 1998) and President (2007-2011) of the Board of Directors, Catholic Charities CYO; Trustee (since 2002) and Chair of the Finance Committee (2006-2009) and Investment Committee (since 2006), The Thacher School; Trustee of Pacific Select Funds (2004-2005); Member (since 1994) and Chair (1994-2005) of the Investment Committee, Archdiocese of San Francisco. | Trustee of iShares Trust (since 2005); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of Forward Funds (35 portfolios) (since 2009). | |||
Charles A. Hurty (69) | Director (since 2005); Audit Committee Chair (since 2006). | Retired; Partner, KPMG LLP (1968-2001). | Trustee of iShares Trust (since 2005); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of GMAM Absolute Return Strategy Fund (1 portfolio) (since 2002); Director of SkyBridge Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (1 portfolio) (since 2002). | |||
John E. Kerrigan (57) | Director (since 2005); Fixed Income Plus Committee Chair (since 2012). | Chief Investment Officer, Santa Clara University (since 2002). | Trustee of iShares Trust (since 2005); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). |
DIRECTORAND OFFICER INFORMATION | 33 |
Table of Contents
Director and Officer Information (Unaudited) (Continued)
iSHARES® MSCI JAPAN INDEX FUND
Independent Directors (Continued)
Name (Age) | Position(s) (Length of Service) | Principal Occupation(s) During the Past 5 Years | Other Directorships Held | |||
John E. Martinez (51) | Director (since 2003); Securities Lending Committee Chair (since 2012). | Director of FirstREX Agreement Corp. (formerly EquityRock, Inc.) (since 2005). | Trustee of iShares Trust (since 2003); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). | |||
George G.C. Parker (73) | Director (since 2002). | Dean Witter Distinguished Professor of Finance, Emeritus, Stanford University Graduate School of Business (Professor since 1973; Emeritus since 2006). | Trustee of iShares Trust (since 2002); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of Tejon Ranch Company (since 1999); Director of Threshold Pharmaceuticals (since 2004); Director of Colony Financial, Inc. (since 2009); Director of First Republic Bank (since 2010). | |||
Madhav V. Rajan (48) | Director (since 2011); 15(c) Committee Chair (since 2012). | Robert K. Jaedicke Professor of Accounting and Senior Associate Dean for Academic Affairs and Head of MBA Program, Stanford University Graduate School of Business (since 2001); Professor of Law (by courtesy), Stanford Law School (since 2005); Visiting Professor, University of Chicago (Winter 2007-2008). | Trustee of iShares Trust (since 2011); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2011); Trustee of iShares U.S. ETF Trust (since 2011). |
34 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Director and Officer Information (Unaudited) (Continued)
iSHARES® MSCI JAPAN INDEX FUND
Officers
Name (Age) | Position(s) (Length of Service) | Principal Occupation(s) During the Past 5 Years | ||
Edward B. Baer (44) | Vice President and Chief Legal Officer (since 2012). | Managing Director, BlackRock (since 2006). | ||
Eilleen M. Clavere (60) | Secretary (since 2007). | Director, BlackRock (since 2009); Director of Legal Administration of Intermediary Investor Business, BGI (2006-2009). | ||
Jack Gee (53) | Treasurer and Chief Financial Officer (since 2008). | Managing Director, BlackRock (since 2009); Senior Director of Fund Administration of Intermediary Investor Business, BGI (2009); Director of Fund Administration of Intermediary Investor Business, BGI (2004-2009). | ||
Amy Schioldager (50) | Executive Vice President (since 2007). | Managing Director, BlackRock (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008). | ||
Ira P. Shapiro (49) | Vice President (since 2007). | Managing Director, BlackRock (since 2009); Chief Legal Officer, Exchange-Traded Funds Complex (2007-2012); Associate General Counsel, BGI (2004-2009). | ||
Scott Radell (43) | Executive Vice President (since 2012). | Managing Director, BlackRock (since 2009); Head of Portfolio Solutions, BGI (2007-2009); Credit Portfolio Manager, BGI (2005-2007). |
DIRECTORAND OFFICER INFORMATION | 35 |
Table of Contents
Notes:
36 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes:
NOTES | 37 |
Table of Contents
Notes:
38 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
For more information visit www.iShares.com
or call 1-800-474-2737
This report is intended for the Fund’s shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.
Investing involves risk, including possible loss of principal.
The iShares Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds. BlackRock is not affiliated with the company listed above.
A description of the policies that the Fund uses to determine how to vote proxies relating to portfolio securities and information about how the Fund voted proxies
relating to portfolio securities during the most recent twelve-month period ending June 30 is available without charge, upon request, by calling toll-free 1-800-474-2737; on the Fund’s website at www.iShares.com; and on the U.S. Securities and Exchange Commission (SEC) website at www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Form N-Q is available on the SEC’s website or may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Fund also discloses its complete schedule of portfolio holdings on a daily and monthly basis on the Fund’s website.
©2012 BlackRock. All rights reserved. iShares® and BlackRock® are registered trademarks of BlackRock. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.
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iS-AR-81-0812
Table of Contents
![]() | August 31, 2012 |
2012 Annual Report
iShares, Inc.
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
Table of Contents
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Board Review and Approval of Investment Advisory Contract (Unaudited) | 105 | |||
109 | ||||
121 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI AUSTRIA INVESTABLE MARKET INDEX FUND
Performance as of August 31, 2012
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(19.81)% | (19.82)% | (19.74)% | (14.17)% | (14.22)% | (15.04)% | 8.45% | 8.54% | 8.16% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(19.81)% | (19.82)% | (19.74)% | (53.43)% | (53.56)% | (55.73)% | 124.97% | 127.01% | 119.06% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
Index performance reflects the performance of the MSCI Austria IndexSM through January 31, 2008 and the MSCI Austria Investable Market IndexSM thereafter.
“Average Annual Total Returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 5 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI AUSTRIA INVESTABLE MARKET INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector* | Percentage of Net Assets |
Financial | 35.30 | % | ||
Industrial | 25.10 | |||
Energy | 15.52 | |||
Basic Materials | 11.65 | |||
Utilities | 4.96 | |||
Communications | 4.70 | |||
Consumer Non-Cyclical | 1.17 | |||
Consumer Cyclical | 0.48 | |||
Short-Term and Other Net Assets | 1.12 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
OMV AG | 12.63 | % | ||
Erste Group Bank AG | 11.48 | |||
Andritz AG | 9.62 | |||
voestalpine AG | 8.18 | |||
IMMOFINANZ AG | 7.53 | |||
Telekom Austria AG | 4.70 | |||
Raiffeisen International Bank Holding AG | 4.39 | |||
Vienna Insurance Group AG | 4.37 | |||
Verbund AG | 3.68 | |||
Oesterreichische Post AG | 3.01 | |||
|
| |||
TOTAL | 69.59 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI Austria Investable Market Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Austria Investable Market IndexSM (the “Index”). The Index consists of stocks traded primarily on the Vienna Stock Exchange. 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, 2012 (the “reporting period”), the total return for the Fund was (19.81)%, net of fees, while the total return for the Index was (19.74)%.
The European economy continued to slide downward during the reporting period. The unemployment rate in the 17-nation eurozone reached 11.3% in July 2012, up from 10.1% in July 2011. During the second quarter of 2012, gross domestic product (GDP) declined 0.2% compared to the first quarter of 2012. Manufacturing activity in eurozone factories fell further in August 2012, marking the 13th consecutive month of economic contraction. Retail sales were down 0.2% in July 2012 versus the prior month, and were down 1.7% compared to July 2011. Meanwhile, the annual rate of inflation in the eurozone hit 2.6% in August 2012, above the European Central Bank’s target rate of 2%. The European Commission’s sentiment gauge, the Economic Sentiment Indicator, showed confidence in the European economy as of August 2012, but was at its lowest level in three years.
However, there was a wide disparity between the Continent as a whole and the stronger eurozone nations such as Austria, where the jobless rate was just 4.5% in July 2012, the lowest in the European Union. Meanwhile, retail sales in Austria increased 3% in the first six months of 2012 compared to the same period in 2011. The International Monetary Fund recently commended Austria for its “strong economic performance.” However, Bank Austria noted that economic momentum was slowing in July and August 2012, as Austria’s export industry was adversely affected by the weak European economy. After growing 2.7% in 2011 versus 2010, Austria’s economy grew just 0.2% in the second quarter of 2012 versus the first quarter of the year. Bank Austria’s Purchasing Manager Index declined in July 2012, indicating that the industrial sector was contracting.
Despite Austria’s relatively strong economic performance, stocks, as represented by the Index, fell during the reporting period. All sectors reported negative performance. The financials sector, which represents almost a third of the Index on average, contributed the most significantly to negative Index returns. The utilities sector produced the worst total returns, but its impact on returns was limited because of its light weighting — about 6% of the Index throughout the reporting period.
6 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI BELGIUM INVESTABLE MARKET INDEX FUND
Performance as of August 31, 2012
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
1.11% | 1.40% | 11.81% | (10.45)% | (10.44)% | (9.50)% | 5.33% | 5.39% | 5.58% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
1.11% | 1.40% | 11.81% | (42.41)% | (42.39)% | (39.30)% | 68.15% | 69.11% | 72.11% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
Index performance reflects the performance of the MSCI Belgium IndexSM through November 30, 2007 and the MSCI Belgium Investable Market IndexSM thereafter.
“Average Annual Total Returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 7 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI BELGIUM INVESTABLE MARKET INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector* | Percentage of Net Assets |
Consumer Non-Cyclical | 43.29 | % | ||
Financial | 15.08 | |||
Basic Materials | 12.21 | |||
Communications | 9.95 | |||
Diversified | 8.50 | |||
Utilities | 3.96 | |||
Industrial | 3.34 | |||
Consumer Cyclical | 2.04 | |||
Technology | 1.02 | |||
Short-Term and Other Net Assets | 0.61 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
Anheuser-Busch InBev NV | 23.93 | % | ||
UCB SA | 6.94 | |||
Groupe Bruxelles Lambert SA | 6.26 | |||
Solvay SA | 6.15 | |||
Belgacom SA | 5.81 | |||
Colruyt SA | 4.79 | |||
Umicore SA | 4.65 | |||
Ageas SA/NV | 4.18 | |||
Elia System Operator SA | 3.96 | |||
Telenet Group Holding NV | 3.37 | |||
|
| |||
TOTAL | 70.04 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI Belgium Investable Market Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Belgium Investable Market IndexSM (the “Index”). The Index consists of stocks traded primarily on the Brussels Stock Exchange. 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, 2012 (the “reporting period”), the total return for the Fund was 1.11%, net of fees, while the total return for the Index was 11.81%.
The European economy continued to slide downward during the reporting period. The unemployment rate in the 17-nation eurozone reached 11.3% in July 2012, up from 10.1% in July 2011. During the second quarter of 2012, gross domestic product (“GDP”) declined 0.2% compared to the first quarter of 2012. Manufacturing activity in eurozone factories fell further in August 2012, marking the 13th consecutive month of economic contraction. Retail sales were down 0.2% in July 2012 versus the prior month, and were down 1.7% compared to July 2011. Meanwhile, the annual rate of inflation in the eurozone hit 2.6% in August 2012, above the European Central Bank’s target rate of 2%. The European Commission’s sentiment gauge, the Economic Sentiment Indicator, showed confidence in the European economy as of August 2012, but was at its lowest level in three years.
Belgium’s economic performance was in line with the region. According to Moody’s Analytics, second quarter 2012 GDP fell 0.6% from the first quarter of 2012 and 0.4% when compared to the second quarter of 2011. At the same time, Belgian business confidence declined in August 2012 as trade sentiment fell to its lowest level since March 2012. Because Belgium relies on its European neighbors for the majority of its exports, a downturn in the economic health of these countries caused investor concern. In particular, Belgium is especially affected by the health of Germany’s economy, where GDP rose just 0.3% in the second quarter of 2012 versus the first quarter of 2012. In addition, German business confidence fell for the fourth straight month in August 2012.
Despite Belgium’s weak economic conditions, the Index advanced at a double-digit rate during the reporting period, primarily due to Anheuser-Busch InBev NV, which performed much better than the Belgium market overall and represented nearly half of the Index, on average, during the reporting period. Otherwise all sectors generally detracted from Index performance.
8 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI BELGIUM INVESTABLE MARKET INDEX FUND
During the reporting period, the Fund’s performance diverged significantly from the Index primarily as a result of regulatory restrictions which can affect the investment adviser’s ability to optimize the portfolio of a fund relative to the constituent weightings of the underlying index. As a regulated investment company, the Fund may not invest more than 25% of the value of its total assets in the securities of one singular issuer, and therefore was obligated to underweight Anheuser-Busch InBev NV, relative to the Index, by approximately 20%, on average, during the reporting period. Consequently, the investment adviser had to overweight other securities in the portfolio, relative to the Index, which did not perform as well as Anheuser-Busch InBev NV during the reporting period.
Special note — On or about November 9, 2012, the investment objective of the Fund will change to track a new underlying index, the MSCI Belgium IMI 25/50 Index (the “IMI 25/50 Index”). The IMI 25/50 Index is designed to measure broad-based equity market performance in Belgium where a capping methodology is applied that limits the weight of any single component to a maximum of 25% of the IMI 25/50 Index. In addition, the Fund will change its name to the iShares MSCI Belgium Capped Investable Market Index Fund.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 9 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI EMERGING MARKETS EASTERN EUROPE INDEX FUND
Performance as of August 31, 2012
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||
Year Ended 8/31/12 | Inception to 8/31/12 | Inception to 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(13.14)% | (12.43)% | (13.17)% | 1.80% | 1.72% | 2.20% | 5.35% | 5.09% | 6.56% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
Total returns for the period since inception are calculated from the inception date of the Fund (9/30/09). “Average Annual Total Returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (10/2/09), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
10 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS EASTERN EUROPE INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector* | Percentage of Net Assets |
Energy | 46.39 | % | ||
Financial | 21.32 | |||
Basic Materials | 9.65 | |||
Communications | 8.63 | |||
Utilities | 7.06 | |||
Consumer Non-Cyclical | 4.43 | |||
Technology | 0.33 | |||
Industrial | 0.28 | |||
Short-Term and Other Net Assets | 1.91 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
Gazprom OAO (Russia) | 18.28 | % | ||
LUKOIL OAO (Russia) | 10.21 | |||
Sberbank of Russia (Russia) | 8.77 | |||
NovaTek OAO SP GDR (Russia) | 3.83 | |||
Uralkali OJSC (Russia) | 3.55 | |||
Mobile TeleSystems OJSC SP ADR (Russia) | 3.35 | |||
Tatneft OAO (Russia) | 3.04 | |||
Magnit OJSC SP GDR (Russia) | 2.92 | |||
Powszechna Kasa Oszczednosci Bank Polski SA (Poland) | 2.81 | |||
Rosneft Oil Co. OJSC (Russia) | 2.68 | |||
|
| |||
TOTAL | 59.44 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI Emerging Markets Eastern Europe Index Fund (the “Fund”) seeks 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 index designed to measure equity market 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 12-month period ended August 31, 2012 (the “reporting period”), the total return for the Fund was (13.14)%, net of fees, while the total return for the Index was (13.17)%.
As represented by the Index, stock markets in Eastern Europe posted double-digit losses for the reporting period, reflecting a slowdown in global economic growth. Among the four countries represented in the Index — Russia, Poland, Czech Republic, and Hungary—three of them saw their economic growth rates fall during the reporting period, with Hungary and the Czech Republic falling into recession by the end of the reporting period. Russia was the lone exception, as its economic growth rate was largely unchanged for the reporting period. The primary factor behind the diminishing economic activity was the continuing sovereign debt crisis in Europe, which had a negative impact on financial institutions around the globe and led to a meaningful slowdown in European economic growth, including recessions in the most fiscally challenged countries in the region. Exports to the eurozone are an important component of emerging economies in Eastern Europe, and the economic slowdown in the region weighed on economic activity in these countries.
In addition, the central banks in Russia, Poland, and Hungary raised short-term interest rates in 2011 to curb rising inflation, and this had a negative impact on economic growth in 2012 as higher borrowing costs put downward pressure on their domestic economies. By the spring of 2012, the central banks in Russia and Hungary reversed course and began lowering short-term rates, while Poland’s held rates steady.
Another factor behind the Index’s overall decline was a stronger U.S. dollar, which lowered international equity returns for U.S. investors (in local currency terms, the Index declined 2.98% for the reporting period). The U.S. dollar appreciated by 12% against the Russian ruble, 15% versus the Polish zloty, 18% versus the Czech koruna, and 20% against the Hungarian forint for the reporting period.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 11 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS EASTERN EUROPE INDEX FUND
Russia, the largest country weighting in the Index (comprising approximately three-quarters of the Index on average during the reporting period), declined by more than 12% for the reporting period as falling commodity prices weighed on the Russian equity market. Poland’s stock market, which made up approximately 17% of the Index, also posted a double-digit decline as economic growth in the country slowed from 4.5% at the beginning of the reporting period to 2.5% at the end of the reporting period. Among the two smaller Index components, stocks in the Czech Republic held up best, declining by just under 10%, while the Hungarian stock market tumbled by 19%. Both countries faced recessions, but the Czech central bank has taken more dramatic actions to stimulate economic growth than the Hungarian central bank, which has struggled with an inflation rate of nearly 6%.
From a sector perspective, eight of the nine sectors in the Index declined for the reporting period. The consumer discretionary sector fell by more than 30% as retail spending declined. The materials and utilities sectors suffered declines of more than 25% amid sharply lower commodity prices. The only sector of the Index to advance was consumer staples, which is considered to be a defensive sector of the market.
12 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI EMU INDEX FUND
Performance as of August 31, 2012
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(3.99)% | (4.12)% | (4.01)% | (9.00)% | (9.05)% | (8.92)% | 5.28% | 5.29% | 5.48% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(3.99)% | (4.12)% | (4.01)% | (37.60)% | (37.76)% | (37.31)% | 67.28% | 67.51% | 70.51% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
“Average Annual Total Returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 13 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMU INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector | Percentage of Net Assets |
Consumer Non-Cyclical | 21.83 | % | ||
Financial | 18.79 | |||
Industrial | 12.42 | |||
Communications | 8.75 | |||
Consumer Cyclical | 8.52 | |||
Basic Materials | 8.41 | |||
Energy | 8.05 | |||
Utilities | 6.54 | |||
Technology | 4.44 | |||
Diversified | 2.00 | |||
Short-Term and Other Net Assets | 0.25 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
Total SA (France) | 3.82 | % | ||
Sanofi (France) | 3.50 | |||
Siemens AG Registered (Germany) | 2.80 | |||
BASF SE (Germany) | 2.57 | |||
Banco Santander SA (Spain) | 2.52 | |||
Anheuser-Busch InBev NV (Belgium) | 2.43 | |||
Bayer AG Registered (Germany) | 2.31 | |||
SAP AG (Germany) | 2.18 | |||
Unilever NV CVA (Netherlands) | 2.04 | |||
Eni SpA (Italy) | 2.02 | |||
|
| |||
TOTAL | 26.19 | % | ||
|
|
The iShares MSCI EMU Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI EMU IndexSM (the “Index”). The Index consists of stocks from Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Portugal and Spain. 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, 2012 (the “reporting period”), the total return for the Fund was (3.99)%, net of fees, while the total return for the Index was (4.01)%.
The European economy continued to slide downward during the reporting period. The unemployment rate in the 17-nation eurozone reached 11.3% in July 2012, up from 10.1% in July 2011. During the second quarter of 2012, gross domestic product (“GDP”) declined 0.2% compared to the first quarter of 2012. Manufacturing activity in eurozone factories fell further in August 2012, marking the 13th consecutive month of economic contraction. Retail sales were down 0.2% in July 2012 versus the prior month, and were down 1.7% compared to July 2011. Meanwhile, the annual rate of inflation in the eurozone hit 2.6% in August 2012, above the European Central Bank’s target rate of 2%. The European Commission’s sentiment gauge, the Economic Sentiment Indicator, showed confidence in the European economy as of August 2012, but was at its lowest level in three years.
Although the unemployment rate in Germany, Europe’s largest economy, remained modest at 6.8% in July 2012, the country’s GDP rose just 0.3% in the second quarter of 2012 versus the first quarter of 2012, and just 0.5% in the first quarter of 2012 compared to the final quarter of 2011. Most of Germany’s exports continued to depend on European markets, many of which were undergoing aggressive austerity programs. In France, second quarter 2012 GDP did not advance from the first quarter of 2012, marking the third straight quarter of zero growth in Europe’s second largest economy. During the second quarter of 2012, Spain’s economy contracted 0.4% from the first quarter of 2012 and 1% from the second quarter of 2011 as unemployment reached 25%. The sluggish economy in Spain has led to high budget deficits, which the government has sought to close by seeking more than $125 billion in spending cuts and tax increases. Spain’s banking system showed signs of weakness during the reporting period, as the government requested a $126 billion bailout from the European Central Bank.
14 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMU INDEX FUND
In Italy, GDP declined by 0.70% during the second quarter of 2012 compared to the first quarter of 2012, marking the fourth consecutive quarter of economic contraction. Meanwhile, economic growth in the Netherlands has also been quite weak, with GDP shrinking by 0.8% during the first quarter of 2012 compared with the same quarter in 2011.
In keeping with the generally negative sentiment in Europe, the Index declined during the reporting period. From a country perspective, Spain, France and Italy contributed the most to the Index’s negative performance, while Germany, Belgium and the Netherlands posted modest positive returns.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 15 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI FRANCE INDEX FUND
Performance as of August 31, 2012
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(5.05)% | (5.34)% | (5.16)% | (7.42)% | (7.51)% | (7.36)% | 5.49% | 5.50% | 5.68% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(5.05)% | (5.34)% | (5.16)% | (32.00)% | (32.34)% | (31.76)% | 70.72% | 70.76% | 73.71% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
“Average Annual Total Returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
16 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI FRANCE INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector* | Percentage of Net Assets |
Consumer Non-Cyclical | 26.06 | % | ||
Industrial | 15.09 | |||
Financial | 13.84 | |||
Energy | 12.93 | |||
Communications | 8.90 | |||
Basic Materials | 6.00 | |||
Consumer Cyclical | 5.14 | |||
Diversified | 4.71 | |||
Utilities | 4.61 | |||
Technology | 2.65 | |||
Short-Term and Other Net Assets | 0.07 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
Total SA | 11.38 | % | ||
Sanofi | 10.43 | |||
BNP Paribas SA | 4.50 | |||
LVMH Moet Hennessy Louis Vuitton SA | 4.44 | |||
L’Air Liquide SA | 3.94 | |||
Danone SA | 3.87 | |||
Schneider Electric SA | 3.53 | |||
GDF Suez | 3.36 | |||
L’Oreal SA | 3.18 | |||
France Telecom SA | 2.75 | |||
|
| |||
TOTAL | 51.38 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI France Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI France IndexSM (the “Index”). The Index consists of stocks traded primarily on the Paris Stock Exchange. 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, 2012 (the “reporting period”), the total return for the Fund was (5.05)%, net of fees, while the total return for the Index was (5.16)%.
The European economy continued to slide downward during the reporting period. The unemployment rate in the 17-nation eurozone reached 11.3% in July 2012, up from 10.1% in July 2011. During the second quarter of 2012, gross domestic product (“GDP”) declined 0.2% compared to the first quarter of 2012. Manufacturing activity in eurozone factories fell further in August 2012, marking the 13th consecutive month of economic contraction. Retail sales were down 0.2% in July 2012 versus the prior month, and were down 1.7% compared to July 2011. Meanwhile, the annual rate of inflation in the eurozone hit 2.6% in August 2012, above the European Central Bank’s target rate of 2%. The European Commission’s sentiment gauge, the Economic Sentiment Indicator, showed confidence in the European economy as of August 2012, but was at its lowest level in three years.
In France, second quarter 2012 GDP did not advance from the first quarter of 2012, marking the third straight quarter of zero growth in Europe’s second largest economy after Germany. The stalled economy and an unemployment rate above 10% were the challenges facing newly elected President Francois Hollande, who promised to cut spending or raise taxes to approach a balanced budget. However, either move was generally seen as a damper on economic growth, as the number of unemployed people in France reached 3 million for the first time since 1999. Many firms have announced factory closures or job losses, including a major airline and a major carmaker, which announced job losses of 5,000 and 3,000 respectively.
In line with the country’s economic performance, the Index declined during the reporting period. The worst performing sectors in terms of contributions to returns were industrials, financials and utilities, while the best performing sectors were health care, energy and consumer staples. Shares of industrial and financials companies typically perform poorly in a sluggish economic environment, while shares of health care and consumer staples companies typically fare better since demand for these services are not typically linked to economic growth.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 17 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI GERMANY INDEX FUND
Performance as of August 31, 2012
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
4.55% | 4.61% | 4.67% | (4.96)% | (5.11)% | (4.95)% | 8.18% | 8.12% | 8.32% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
4.55% | 4.61% | 4.67% | (22.46)% | (23.06)% | (22.41)% | 119.43% | 118.35% | 122.32% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
“Average Annual Total Returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
18 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI GERMANY INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector* | Percentage of Net Assets |
Consumer Non-Cyclical | 16.83 | % | ||
Consumer Cyclical | 16.60 | |||
Basic Materials | 15.75 | |||
Financial | 15.44 | |||
Industrial | 13.05 | |||
Technology | 8.17 | |||
Utilities | 7.59 | |||
Communications | 5.42 | |||
Diversified | 0.55 | |||
Short-Term and Other Net Assets | 0.60 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
Siemens AG Registered | 9.34 | % | ||
BASF SE | 8.55 | |||
Bayer AG Registered | 7.68 | |||
SAP AG | 7.27 | |||
Allianz SE Registered | 5.98 | |||
Daimler AG Registered | 5.32 | |||
E.ON AG | 4.96 | |||
Deutsche Telekom AG Registered | 4.01 | |||
Deutsche Bank AG Registered | 3.96 | |||
Linde AG | 3.49 | |||
|
| |||
TOTAL | 60.56 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI Germany Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Germany IndexSM (the “Index”). The Index consists of stocks traded primarily on the Frankfurt Stock Exchange. 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, 2012 (the “reporting period”), the total return for the Fund was 4.55%, net of fees, while the total return for the Index was 4.67%.
The European economy continued to slide downward during the reporting period. The unemployment rate in the 17-nation eurozone reached 11.3% in July 2012, up from 10.1% in July 2011. During the second quarter of 2012, gross domestic product (“GDP”) declined 0.2% compared to the first quarter of 2012. Manufacturing activity in eurozone factories fell further in August 2012, marking the 13th consecutive month of economic contraction. Retail sales were down 0.2% in July 2012 versus the prior month, and were down 1.7% compared to July 2011. Meanwhile, the annual rate of inflation in the eurozone hit 2.6% in August 2012, above the European Central Bank’s target rate of 2%. The European Commission’s sentiment gauge, the Economic Sentiment Indicator, showed confidence in the European economy as of August 2012, but was at its lowest level in three years.
In terms of its domestic economy, Germany continues to be Europe’s steadiest performer. The unemployment rate was just 6.8% in July 2012; youth unemployment was 7.9% compared to 22.6% for Europe as a whole. However, in recent quarters, Germany’s overall economy has not been the powerhouse of prior years. Germany’s GDP rose just 0.3% in the second quarter of 2012 versus the first quarter of 2012, which in turn grew 0.5% compared to the final quarter of 2011. In addition, German business confidence fell for the fourth straight month in August 2012. Most of Germany’s exports depend on European markets, many of which are undergoing aggressive austerity programs. In addition, China, which made up 7% of Germany’s exports in 2011, experienced slowing in its economy as well. In the second quarter of 2012, China’s annualized 7.6% GDP growth rate was its slowest since 2009. American demand for German goods has faded as well, as U.S. GDP growth slowed from 2.0% in the first quarter of 2012 to 1.5% in the second quarter of the year.
Despite Germany’s economic challenges, the Index generated one of the stronger returns in the eurozone during the reporting period. The strongest sectors included health care, utilities and information technology. The weakest sectors were consumer discretionary, industrials and materials — areas that typically do poorly in a sluggish economy.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 19 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI ITALY INDEX FUND
Performance as of August 31, 2012
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(9.98)% | (10.44)% | (10.03)% | (15.40)% | (15.49)% | (15.41)% | 0.88% | 0.86% | 0.86% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(9.98)% | (10.44)% | (10.03)% | (56.68)% | (56.90)% | (56.69)% | 9.11% | 8.98% | 8.98% |
GROWTH OF $10,000 INVESTMENT (AT NET ASSET VALUE)
“Average Annual Total Returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
20 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI ITALY INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector* | Percentage of Net Assets | |||
Energy | 30.06 | % | ||
Financial | 26.49 | |||
Utilities | 15.86 | |||
Consumer Cyclical | 8.52 | |||
Industrial | 7.67 | |||
Communications | 5.81 | |||
Consumer Non-Cyclical | 4.51 | |||
Diversified | 1.12 | |||
Short-Term and Other Assets, Less Liabilities | (0.04 | ) | ||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets | |||
Eni SpA | 23.68 | % | ||
Enel SpA | 10.23 | |||
Assicurazioni Generali SpA | 7.99 | |||
Intesa Sanpaolo SpA | 7.41 | |||
Saipem SpA | 4.86 | |||
Tenaris SA | 4.86 | |||
UniCredit SpA | 4.84 | |||
Fiat Industrial SpA | 4.15 | |||
Telecom Italia SpA | 3.47 | |||
Snam SpA | 3.41 | |||
|
| |||
TOTAL | 74.90 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI Italy Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Italy IndexSM (the “Index”). The Index consists of stocks traded primarily on the Milan Stock Exchange. 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, 2012 (the “reporting period”), the total return for the Fund was (9.98)%, net of fees, while the total return for the Index was (10.03)%.
The European economy continued to slide downward during the reporting period. The unemployment rate in the 17-nation eurozone reached 11.3% in July 2012, up from 10.1% in July 2011. During the second quarter of 2012, gross domestic product (“GDP”) declined 0.2% compared to the first quarter of 2012. Manufacturing activity in eurozone factories fell further in August 2012, marking the 13th consecutive month of economic contraction. Retail sales were down 0.2% in July 2012 versus the prior month, and were down 1.7% compared to July 2011. Meanwhile, the annual rate of inflation in the eurozone hit 2.6% in August 2012, above the European Central Bank’s target rate of 2%. The European Commission’s sentiment gauge, the Economic Sentiment Indicator, showed confidence in the European economy as of August 2012, but was at its lowest level in three years.
The Italian economy is the third largest in the eurozone behind France and Germany. Italy’s national debt equals 120% of GDP, second only to Greece in terms of eurozone countries’ debt to GDP ratios. In late 2011, the Italian government declared that the economy was in a recession, which caused a change in leadership, ending the reign of Prime Minister Silvio Berlusconi. His successor, Mario Monti, quickly passed a number of economic measures including increasing the retirement age, raising property taxes, simplifying government bureaucracy and enforcing income tax collections. Still, GDP declined by 0.70% during the second quarter of 2012 compared to the first quarter of 2012. Manufacturing contracted significantly, with industrial activity dropping to a 10-month low in August 2012.
The Index declined steadily during the reporting period, as Italy’s fiscal woes came to light. From a sector perspective, financials, utilities and telecommunication services were the largest contributors to the Index’s negative returns, while energy, which had the largest average weight in the Index, was the only positively performing sector during 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, 2012
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
1.96% | 1.78% | 2.91% | (5.98)% | (6.00)% | (5.30)% | 5.06% | 5.07% | 5.65% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
1.96% | 1.78% | 2.91% | (26.52)% | (26.61)% | (23.85)% | 63.86% | 63.98% | 73.21% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
Index performance reflects the performance of the MSCI Netherlands IndexSM through January 31, 2008 and the MSCI Netherlands Investable Market IndexSM thereafter.
“Average Annual Total Returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
22 | 2012 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 8/31/12
Sector* | Percentage of Net Assets | |||
Consumer Non-Cyclical | 38.02 | % | ||
Financial | 17.62 | |||
Industrial | 15.59 | |||
Technology | 9.90 | |||
Communications | 8.40 | |||
Basic Materials | 7.45 | |||
Energy | 2.44 | |||
Consumer Cyclical | 0.25 | |||
Short-Term and Other Net Assets | 0.33 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets | |||
Unilever NV CVA | 20.83 | % | ||
ING Groep NV CVA | 10.70 | |||
ASML Holding NV | 8.68 | |||
Koninklijke Philips Electronics NV | 8.61 | |||
Akzo Nobel NV | 4.76 | |||
Heineken NV | 4.67 | |||
Koninklijke Ahold NV | 4.54 | |||
Reed Elsevier NV | 3.24 | |||
AEGON NV | 3.20 | |||
Koninklijke KPN NV | 3.15 | |||
|
| |||
TOTAL | 72.38 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI Netherlands Investable Market Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Netherlands Investable Market IndexSM (the “Index”). The Index consists of stocks traded primarily on the Amsterdam Stock Exchange. 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, 2012 (the “reporting period”), the total return for the Fund was 1.96%, net of fees, while the total return for the Index was 2.91%.
The European economy continued to slide downward during the reporting period. The unemployment rate in the 17-nation eurozone reached 11.3% in July 2012, up from 10.1% in July 2011. During the second quarter of 2012, gross domestic product (“GDP”) declined 0.2% compared to the first quarter of 2012. Manufacturing activity in eurozone factories fell further in August 2012, marking the 13th consecutive month of economic contraction. Retail sales were down 0.2% in July 2012 versus the prior month, and were down 1.7% compared to July 2011. Meanwhile, the annual rate of inflation in the eurozone hit 2.6% in August 2012, above the European Central Bank’s target rate of 2%. The European Commission’s sentiment gauge, the Economic Sentiment Indicator, showed confidence in the European economy as of August 2012, but was at its lowest level in three years.
Economic growth in the Netherlands was weak during the reporting period, with GDP shrinking by 0.8% during the first quarter of 2012 compared with the same quarter in 2011. As of August 2012, consumer confidence in the Netherlands remained low, as the public remained pessimistic about spending as well as the overall economy. Economic sentiment in the Netherlands was negative for the past five years, and deteriorated further in 2012 as the government cut spending, home prices slumped and the debt crisis in Europe continued. The government has pledged to cut spending to reduce the Netherlands budget deficit below 3% of GDP as prescribed by the European Union.
Despite the negative environment, the Index posted a small gain for the reporting period. From a sector perspective, information technology produced the largest total return for the reporting period, and despite its small average allocation in the Index produced the largest total contribution to the Index’s returns, followed by the consumer staples and industrials sectors. On a negative note, the telecommunication services, financials and energy sectors detracted the most from returns.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 23 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI SPAIN INDEX FUND
Performance as of August 31, 2012
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(19.36)% | (19.82)% | (20.18)% | (9.36)% | (9.47)% | (9.97)% | 7.74% | 7.73% | 7.55% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(19.36)% | (19.82)% | (20.18)% | (38.81)% | (39.19)% | (40.86)% | 110.81% | 110.53% | 107.09% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
“Average Annual Total Returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
24 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI SPAIN INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector* | Percentage of Net Assets |
Financial | 43.73 | % | ||
Communications | 16.85 | |||
Utilities | 10.97 | |||
Industrial | 6.70 | |||
Consumer Non-Cyclical | 6.57 | |||
Consumer Cyclical | 6.06 | |||
Energy | 4.85 | |||
Technology | 3.21 | |||
Basic Materials | 0.94 | |||
Short-Term and Other Net Assets | 0.12 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
Banco Santander SA | 22.26 | % | ||
Telefonica SA | 16.86 | |||
Banco Bilbao Vizcaya Argentaria SA | 10.76 | |||
Repsol SA | 4.85 | |||
Industria de Diseno Textil SA | 4.84 | |||
Iberdrola SA | 4.25 | |||
Banco de Sabadell SA | 3.64 | |||
Amadeus IT Holding SA Class A | 3.21 | |||
Abertis Infraestructuras SA | 3.00 | |||
Ferrovial SA | 2.57 | |||
|
| |||
TOTAL | 76.24 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI Spain Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Spain IndexSM (the “Index”). The Index consists of stocks traded primarily on the Madrid Stock Exchange. 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, 2012 (the “reporting period”), the total return for the Fund was (19.36)%, net of fees, while the total return for the Index was (20.18)%.
The European economy continued to slide downward during the reporting period. The unemployment rate in the 17-nation eurozone reached 11.3% in July 2012, up from 10.1% in July 2011. During the second quarter of 2012, gross domestic product (“GDP”) declined 0.2% compared to the first quarter of 2012. Manufacturing activity in eurozone factories fell further in August 2012, marking the 13th consecutive month of economic contraction. Retail sales were down 0.2% in July 2012 versus the prior month, and were down 1.7% compared to July 2011. Meanwhile, the annual rate of inflation in the eurozone hit 2.6% in August 2012, above the European Central Bank’s target rate of 2%. The European Commission’s sentiment gauge, the Economic Sentiment Indicator showed confidence in the European economy as of August 2012, but was at its lowest level in three years.
During the second quarter of 2012, Spain’s economy contracted 0.4% from the first quarter of 2012 and 1% from the second quarter of 2011 as the unemployment rate reached 25%. The sluggish economy has led to high budget deficits, which the government has sought to close by seeking more than $125 billion in spending cuts and tax increases. Spain’s banking system also showed signs of weakness during the reporting period, as the government requested a $126 billion bailout from the European Central Bank. In addition, the Spanish government removed a regulation that capped the interest rates that banks were able to offer to depositors, enabling banks to raise the interest rates on bank accounts.
The Index declined steadily during most of the reporting period. From a sector perspective, telecommunication services, financials and utilities produced the largest negative contributions to the Index’s returns. In terms of weighting, these sectors together comprised, on average, about 75% of the Index. The consumer discretionary and consumer staples sectors contributed positively to the Index’s returns. However, their combined weighting, on average, was only about 8 percent of the Index.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 25 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI SWEDEN INDEX FUND
Performance as of August 31, 2012
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
5.57% | 5.52% | 5.46% | (0.64)% | (0.73)% | (0.72)% | 13.72% | 13.68% | 13.77% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
5.57% | 5.52% | 5.46% | (3.18)% | (3.58)% | (3.54)% | 261.62% | 260.43% | 263.40% |
GROWTH OF $10,000 INVESTMENT (AT NET ASSET VALUE)
“Average Annual Total Returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
26 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI SWEDEN INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector* | Percentage of Net Assets | |||
Industrial | 22.17 | % | ||
Financial | 20.88 | |||
Consumer Cyclical | 19.82 | |||
Communications | 17.61 | |||
Consumer Non-Cyclical | 7.34 | |||
Basic Materials | 5.30 | |||
Diversified | 5.29 | |||
Energy | 1.57 | |||
Short-Term and Other Net Assets | 0.02 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets | |||
Hennes & Mauritz AB Class B | 10.75 | % | ||
Telefonaktiebolaget LM Ericsson Class B | 8.82 | |||
Nordea Bank AB | 7.62 | |||
Volvo AB Class B | 5.52 | |||
Svenska Handelsbanken AB Class A | 5.38 | |||
Atlas Copco AB Class A | 4.69 | |||
TeliaSonera AB | 4.68 | |||
Swedbank AB Class A | 4.50 | |||
Sandvik AB | 4.20 | |||
Skandinaviska Enskilda Banken AB Class A | 3.38 | |||
|
| |||
TOTAL | 59.54 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI Sweden Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Sweden IndexSM (the “Index”). The Index consists of stocks traded primarily on the Stockholm Stock Exchange. 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, 2012 (the “reporting period”), the total return for the Fund was 5.57%, net of fees, while the total return for the Index was 5.46%.
The stock market in Sweden, as represented by the Index, posted an overall gain for the reporting period. However, the Index was volatile, declining in the fall of 2011 and again in early summer of 2012, as news from Europe, a major trading partner, worsened.
Except for a minor slide in manufacturing productivity in August 2012, the Swedish economy seemed to be unaffected by Europe’s challenging environment. Sweden’s gross domestic product (GDP) rose 2.3% on an annual basis in the second quarter of 2012 compared to the second quarter of 2011. Growth was fueled by a surge of exports outside of Europe, as its famous home appliance manufacturers posted profit increases during the second quarter of 2012. Yields on Swedish Treasury bills, normally offering modest interest, were in negative territory, generally suggesting that investors were willing to pay to invest there. Unlike most countries in the world, Sweden’s federal budget is actually running a surplus. The economy’s strength has driven the Swedish krona higher against the euro, although this could become a concern due to Sweden’s reliance on exports.
Meanwhile, the European economy continued to slide downward during the reporting period. Unemployment in the 17-nation eurozone reached 11.3% in July 2012, up from 10.1% in July 2011. Manufacturing activity in eurozone factories fell further in August 2012, marking the 13th consecutive month of economic contraction. Retail sales were down 0.2% in July 2012 versus the prior month, and were down 1.7% compared to July 2011. The European Commission’s sentiment gauge, the Economic Sentiment Indicator, showed confidence in the European economy as of August 2012, but was at its lowest level in three years.
During the reporting period, the financials and consumer discretionary sectors within the Index performed the best, while information technology and telecommunication services had the largest negative impact on results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 27 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI SWITZERLAND INDEX FUND
Performance as of August 31, 2012
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(0.53)% | (0.99)% | (0.34)% | 0.68% | 0.63% | (0.03)% | 8.97% | 8.92% | 8.57% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(0.53)% | (0.99)% | (0.34)% | 3.46% | 3.18% | (0.15)% | 136.09% | 134.94% | 127.57% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
“Average Annual Total Returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
28 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI SWITZERLAND INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector* | Percentage of Net Assets |
Consumer Non-Cyclical | 56.06 | % | ||
Financial | 18.39 | |||
Industrial | 9.74 | |||
Consumer Cyclical | 5.55 | |||
Basic Materials | 5.46 | |||
Communications | 2.01 | |||
Energy | 1.89 | |||
Short-Term and Other Net Assets | 0.90 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
Nestle SA Registered | 21.82 | % | ||
Novartis AG Registered | 13.99 | |||
Roche Holding AG Genusschein | 13.46 | |||
UBS AG Registered | 4.38 | |||
Zurich Insurance Group AG | 4.37 | |||
ABB Ltd. Registered | 4.28 | |||
Syngenta AG Registered | 3.88 | |||
Compagnie Financiere Richemont SA Class A Bearer | 3.71 | |||
Swiss Re AG | 2.69 | |||
Credit Suisse Group AG Registered | 2.57 | |||
|
| |||
TOTAL | 75.15 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI Switzerland Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Switzerland IndexSM (the “Index”). The Index consists of stocks traded primarily on the Zurich Stock Exchange. 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, 2012 (the “reporting period”), the total return for the Fund was (0.53)%, net of fees, while the total return for the Index was (0.34)%.
The Switzerland stock market, as represented by the Index, was flat for the reporting period. However, the market encountered headwinds during the fall of 2011 and again as summer 2012 approached, as news from Europe, an important trading partner, worsened. In addition, the Swiss economy stalled during the second quarter of 2012.
Until the second quarter of 2012, the Swiss economy seemed to be unaffected by the economic problems plaguing Europe. First quarter 2012 gross domestic product (“GDP”) grew 0.5% versus the fourth quarter of 2011, which in turn grew 0.4% over the prior quarter. However, the Swiss economy contracted by 0.1% during the second quarter of 2012 versus the first quarter of 2012, primarily due to falling exports to the eurozone. The Swiss franc has remained relatively strong versus the euro, which put Switzerland’s exports at a competitive disadvantage. The manufacturing sector reported declining orders in the latter half of the reporting period.
Meanwhile, the European economy continued to slide downward. The unemployment rate in the 17-nation eurozone reached 11.3% in July 2012, up from 10.1% in July 2011. During the second quarter of 2012, GDP declined 0.2% compared to the first quarter of 2012. Manufacturing activity in eurozone factories fell further in August 2012, marking the 13th consecutive month of economic contraction. Meanwhile, the European Commission’s sentiment gauge, the Economic Sentiment Indicator, showed confidence in the European economy as of August 2012, but was at its lowest level in three years.
Although the Swiss economy, long resistant to the downturn in Europe, finally showed weakness, there were bright spots during the reporting period. From a sector perspective, financials and industrials produced the largest negative contributions to returns for the Index, while health care and consumer staples provided the strongest positive returns for the Index. In a sluggish economy, sectors such as health care and consumer staples often do relatively well because demand for these products and services are not directly correlated to economic growth. On the other hand, sectors such as financials and industrials would tend not to do well because their success is more directly tied to the economy.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 29 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI UNITED KINGDOM INDEX FUND
Performance as of August 31, 2012
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
6.94% | 7.73% | 7.56% | (3.57)% | (3.46)% | (3.03)% | 6.38% | 6.39% | 7.08% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
6.94% | 7.73% | 7.56% | (16.62)% | (16.14)% | (14.24)% | 85.54% | 85.77% | 98.21% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
“Average Annual Total Returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
30 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI UNITED KINGDOM INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector* | Percentage of Net Assets |
Consumer Non-Cyclical | 28.38 | % | ||
Energy | 19.49 | |||
Financial | 17.81 | |||
Basic Materials | 10.78 | |||
Communications | 9.96 | |||
Utilities | 4.26 | |||
Consumer Cyclical | 4.14 | |||
Industrial | 3.50 | |||
Technology | 0.79 | |||
Short-Term and Other Net Assets | 0.89 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
HSBC Holdings PLC | 6.70 | % | ||
Vodafone Group PLC | 6.04 | |||
BP PLC | 5.66 | |||
Royal Dutch Shell PLC Class A | 5.48 | |||
GlaxoSmithKline PLC | 4.82 | |||
British American Tobacco PLC | 4.36 | |||
Royal Dutch Shell PLC Class B | 4.06 | |||
BG Group PLC | 2.95 | |||
Diageo PLC | 2.91 | |||
BHP Billiton PLC | 2.62 | |||
|
| |||
TOTAL | 45.60 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI United Kingdom Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI United Kingdom IndexSM (the “Index”). The Index consists of stocks traded primarily on the London Stock Exchange. 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, 2012 (the “reporting period”), the total return for the Fund was 6.94%, net of fees, while the total return for the Index was 7.56%.
The United Kingdom’s stock market, as represented by the Index, generally climbed for most of the reporting period. However, the path was bumpy, as the Index declined in the fall of 2011 and again in the early summer of 2012, as news from Europe, its most important trading partner, worsened and U.K. economic growth stalled.
In the second quarter of 2012, gross domestic product (“GDP”) in the U.K. fell 0.5% compared to the first quarter of 2012, which in turn fell 0.3% versus the fourth quarter of 2011. Household consumption of goods and services, which makes up about 60% of the U.K.’s GDP, fell 0.4% in the second quarter of 2012 compared to the first quarter of 2012. Consumer confidence suffered its longest slump since the 1970s, despite the surge in national pride during the London Olympic Games.
Meanwhile, the European economy continued to slide downward during the reporting period. The unemployment rate in the 17-nation eurozone reached 11.3% in July 2012, up from 10.1% in July 2011. During the second quarter of 2012, GDP declined 0.2% compared to the first quarter of 2012. Manufacturing activity in eurozone factories fell further in August 2012, marking the 13th consecutive month of economic contraction. Retail sales were down 0.2% in July 2012 versus the prior month, and were down 1.7% compared to July 2011. The European Commission’s sentiment gauge, the Economic Sentiment Indicator, showed confidence in the European economy as of August 2012, but was at its lowest level in three years.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 31 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI UNITED KINGDOM INDEX FUND
Despite challenges in Europe and the U.K. economy, the U.K. stock market posted better results than most of its counterparts in Europe. All sectors except materials posted a positive return during the reporting period. Shares of materials companies tend to do well when the economy is robust, and tend to decline when the economy faces challenges. The sector providing the highest positive contribution to the Index’s return was consumer staples. Shares of consumer staples companies generally do well in a sluggish economic environment because demand for products such as food and beverages typically remain relatively consistent.
32 | 2012 iSHARES ANNUAL REPORTTO 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, 2012 to August 31, 2012.
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 (3/1/12) | Ending Account Value (8/31/12) | Annualized Expense Ratio | Expenses Paid During Period a | ||||||||||||
Austria Investable Market | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 890.10 | 0.53 | % | $ | 2.52 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.50 | 0.53 | 2.69 | ||||||||||||
Belgium Investable Market | ||||||||||||||||
Actual | 1,000.00 | 1,036.70 | 0.53 | 2.71 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.50 | 0.53 | 2.69 | ||||||||||||
Emerging Markets Eastern Europe | ||||||||||||||||
Actual | 1,000.00 | 857.20 | 0.68 | 3.17 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,021.70 | 0.68 | 3.46 | ||||||||||||
EMU | ||||||||||||||||
Actual | 1,000.00 | 946.50 | 0.53 | 2.59 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.50 | 0.53 | 2.69 |
SHAREHOLDER EXPENSES | 33 |
Table of Contents
Shareholder Expenses (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Index Fund | Beginning Account Value (3/1/12) | Ending Account Value (8/31/12) | Annualized Expense Ratio | Expenses Paid During Period a | ||||||||||||
France | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 959.10 | 0.53 | % | $ | 2.61 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.50 | 0.53 | 2.69 | ||||||||||||
Germany | ||||||||||||||||
Actual | 1,000.00 | 954.30 | 0.53 | 2.60 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.50 | 0.53 | 2.69 | ||||||||||||
Italy | ||||||||||||||||
Actual | 1,000.00 | 899.40 | 0.53 | 2.53 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.50 | 0.53 | 2.69 | ||||||||||||
Netherlands Investable Market | ||||||||||||||||
Actual | 1,000.00 | 992.20 | 0.53 | 2.65 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.50 | 0.53 | 2.69 | ||||||||||||
Spain | ||||||||||||||||
Actual | 1,000.00 | 864.30 | 0.53 | 2.48 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.50 | 0.53 | 2.69 | ||||||||||||
Sweden | ||||||||||||||||
Actual | 1,000.00 | 957.50 | 0.53 | 2.61 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.50 | 0.53 | 2.69 | ||||||||||||
Switzerland | ||||||||||||||||
Actual | 1,000.00 | 1,002.50 | 0.53 | 2.67 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.50 | 0.53 | 2.69 | ||||||||||||
United Kingdom | ||||||||||||||||
Actual | 1,000.00 | 989.50 | 0.53 | 2.65 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.50 | 0.53 | 2.69 |
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 (366 days). |
34 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI AUSTRIA INVESTABLE MARKET INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 98.88% |
| |||||||
AUTO MANUFACTURERS — 0.48% |
| |||||||
Rosenbauer International AG | 5,069 | $ | 259,221 | |||||
|
| |||||||
259,221 | ||||||||
BANKS — 15.88% | ||||||||
Erste Group Bank AGa | 304,954 | 6,173,376 | ||||||
Raiffeisen International Bank Holding AG | 70,522 | 2,363,220 | ||||||
|
| |||||||
8,536,596 | ||||||||
BIOTECHNOLOGY — 0.28% | ||||||||
Intercell AGa,b | 63,640 | 148,404 | ||||||
|
| |||||||
148,404 | ||||||||
BUILDING MATERIALS — 2.46% | ||||||||
Wienerberger AG | 172,161 | 1,324,188 | ||||||
|
| |||||||
1,324,188 | ||||||||
CHEMICALS — 2.48% | ||||||||
Lenzing AG | 15,318 | 1,331,503 | ||||||
|
| |||||||
1,331,503 | ||||||||
COMMERCIAL SERVICES — 0.89% | ||||||||
Kapsch TrafficCom AG | 7,622 | 480,376 | ||||||
|
| |||||||
480,376 | ||||||||
ELECTRIC — 4.96% | ||||||||
EVN AG | 51,171 | 690,161 | ||||||
Verbund AG | 97,421 | 1,977,681 | ||||||
|
| |||||||
2,667,842 | ||||||||
ELECTRICAL COMPONENTS & EQUIPMENT — 0.87% |
| |||||||
Zumtobel AG | 41,551 | 470,118 | ||||||
|
| |||||||
470,118 | ||||||||
ELECTRONICS — 0.33% | ||||||||
Austria Technologie & Systemtechnik AG | 19,980 | 176,545 | ||||||
|
| |||||||
176,545 | ||||||||
ENGINEERING & CONSTRUCTION — 2.69% | ||||||||
Flughafen Wien AG | 15,281 | 698,622 | ||||||
Strabag SE | 33,115 | 745,920 | ||||||
|
| |||||||
1,444,542 | ||||||||
ENVIRONMENTAL CONTROL — 0.61% |
| |||||||
BWT AG | 17,982 | 328,095 | ||||||
|
| |||||||
328,095 | ||||||||
INSURANCE — 4.37% | ||||||||
Vienna Insurance Group AG | 55,944 | 2,347,525 | ||||||
|
| |||||||
2,347,525 |
Security | Shares | Value | ||||||
IRON & STEEL — 9.17% | ||||||||
AMAG Austria Metall AGc,h | 21,534 | $ | 533,372 | |||||
voestalpine AG | 153,254 | 4,397,666 | ||||||
|
| |||||||
4,931,038 | ||||||||
MACHINERY — 10.36% | ||||||||
Andritz AG | 100,011 | 5,170,509 | ||||||
Palfinger AG | 18,722 | 400,005 | ||||||
|
| |||||||
5,570,514 | ||||||||
MANUFACTURING — 2.52% | ||||||||
RHI AG | 32,819 | 802,546 | ||||||
Semperit AG Holding | 15,096 | 552,017 | ||||||
|
| |||||||
1,354,563 | ||||||||
OIL & GAS — 12.63% | ||||||||
OMV AG | 204,166 | 6,787,639 | ||||||
|
| |||||||
6,787,639 | ||||||||
OIL & GAS SERVICES — 2.89% | ||||||||
Schoeller-Bleckmann Oilfield Equipment AG | 16,243 | 1,555,228 | ||||||
|
| |||||||
1,555,228 | ||||||||
PACKAGING & CONTAINERS — 2.24% | ||||||||
Mayr-Melnhof Karton AG | 12,950 | 1,201,408 | ||||||
|
| |||||||
1,201,408 | ||||||||
REAL ESTATE — 15.05% | ||||||||
Atrium European Real Estate Ltd. | 296,407 | 1,457,122 | ||||||
CA Immobilien Anlagen AGa | 109,372 | 1,076,713 | ||||||
conwert Immobilien Invest SE | 99,752 | 1,093,915 | ||||||
IMMOEAST AG Escrowa,d | 998,769 | 126 | ||||||
IMMOFINANZ AGa | 1,257,038 | 4,046,804 | ||||||
IMMOFINANZ AG Escrowa,d | 897,599 | 113 | ||||||
S IMMO AG | 70,633 | 416,674 | ||||||
|
| |||||||
8,091,467 | ||||||||
TELECOMMUNICATIONS — 4.70% | ||||||||
Telekom Austria AG | 315,795 | 2,526,086 | ||||||
|
| |||||||
2,526,086 | ||||||||
TRANSPORTATION — 3.02% |
| |||||||
Oesterreichische Post AG | 48,248 | 1,620,762 | ||||||
|
| |||||||
1,620,762 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $108,484,140) | 53,153,660 |
SCHEDULESOF INVESTMENTS | 35 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI AUSTRIA INVESTABLE MARKET INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS — 0.29% |
| |||||||
MONEY MARKET FUNDS — 0.29% | ||||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.23%e,f,g | 141,385 | $ | 141,385 | |||||
BlackRock Cash Funds: Prime, | ||||||||
0.23%e,f,g | 10,715 | 10,715 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%e,f | 4,321 | 4,321 | ||||||
|
| |||||||
156,421 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $156,421) |
| 156,421 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $108,640,561) |
| 53,310,081 | ||||||
Other Assets, Less Liabilities — 0.83% |
| 447,035 | ||||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 53,757,116 | |||||
|
|
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 5. |
c | This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933. |
d | Security valued using Level 3 inputs in accordance with management’s fair valuation policy. See Note 1. |
e | Affiliated issuer. See Note 2. |
f | The rate quoted is the annualized seven-day yield of the fund at period end. |
g | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
h | This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933. |
See notes to financial statements.
36 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
iSHARES® MSCI BELGIUM INVESTABLE MARKET INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 99.39% |
| |||||||
AGRICULTURE — 1.73% |
| |||||||
SIPEF NV | 5,406 | $ | 438,293 | |||||
|
| |||||||
438,293 | ||||||||
BANKS — 2.54% |
| |||||||
Dexia SAa | 117,342 | 29,582 | ||||||
KBC Groep NV | 28,196 | 614,327 | ||||||
|
| |||||||
643,909 | ||||||||
BEVERAGES — 23.94% |
| |||||||
Anheuser-Busch InBev NV | 72,186 | 6,076,342 | ||||||
|
| |||||||
6,076,342 | ||||||||
BIOTECHNOLOGY — 0.12% |
| |||||||
Ablynx NVa | 8,162 | 30,350 | ||||||
|
| |||||||
30,350 | ||||||||
BUILDING MATERIALS — 0.09% |
| |||||||
Deceuninck NVa | 16,112 | 22,137 | ||||||
|
| |||||||
22,137 | ||||||||
CHEMICALS — 6.94% |
| |||||||
Recticel SA | 4,717 | 29,788 | ||||||
Solvay SA | 13,886 | 1,561,470 | ||||||
Tessenderlo Chemie NV | 5,936 | 170,896 | ||||||
|
| |||||||
1,762,154 | ||||||||
COMPUTERS — 0.72% |
| |||||||
Econocom Group SA | 8,056 | 183,798 | ||||||
|
| |||||||
183,798 | ||||||||
DISTRIBUTION & WHOLESALE — 0.65% |
| |||||||
SA D’Ieteren NV | 3,710 | 164,424 | ||||||
|
| |||||||
164,424 | ||||||||
ELECTRIC — 3.96% |
| |||||||
Elia System Operator SA | 25,652 | 1,004,467 | ||||||
|
| |||||||
1,004,467 | ||||||||
ELECTRICAL COMPONENTS & EQUIPMENT — 0.84% |
| |||||||
Bekaert NV | 8,162 | 213,583 | ||||||
|
| |||||||
213,583 | ||||||||
ELECTRONICS — 1.01% |
| |||||||
Barco NV | 2,279 | 137,199 | ||||||
EVS Broadcast Equipment SA | 2,438 | 118,315 | ||||||
|
| |||||||
255,514 | ||||||||
ENGINEERING & CONSTRUCTION — 0.44% |
| |||||||
Compagnie d’Entreprises CFE SA | 1,855 | 88,408 |
Security | Shares | Value | ||||||
Hamon & Cie (International) SA | 1,431 | $ | 23,197 | |||||
|
| |||||||
111,605 | ||||||||
ENTERTAINMENT — 1.39% |
| |||||||
Kinepolis Group NV | 4,134 | 354,081 | ||||||
|
| |||||||
354,081 | ||||||||
FOOD — 8.05% |
| |||||||
Colruyt SA | 25,546 | 1,215,417 | ||||||
Delhaize Group SA | 20,829 | 827,293 | ||||||
|
| |||||||
2,042,710 | ||||||||
HEALTH CARE — PRODUCTS — 0.10% |
| |||||||
Ion Beam Applications SAa | 4,823 | 25,837 | ||||||
|
| |||||||
25,837 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 9.08% |
| |||||||
Ackermans & van Haaren NV | 7,367 | 569,981 | ||||||
Groupe Bruxelles Lambert SA | 22,949 | 1,588,104 | ||||||
KBC Ancora SCAa,b | 6,413 | 56,828 | ||||||
RHJ International SAa | 19,580 | 91,071 | ||||||
|
| |||||||
2,305,984 | ||||||||
INSURANCE — 4.18% |
| |||||||
Ageas SA/NV | 47,583 | 1,061,617 | ||||||
|
| |||||||
1,061,617 | ||||||||
MANUFACTURING — 0.23% |
| |||||||
Agfa-Gevaert NVa | 36,782 | 57,955 | ||||||
|
| |||||||
57,955 | ||||||||
MEDIA — 0.06% |
| |||||||
Roularta Media Group NV | 954 | 16,354 | ||||||
|
| |||||||
16,354 | ||||||||
MINING — 5.27% |
| |||||||
Nyrstar NVa | 32,171 | 155,313 | ||||||
Umicore SA | 24,857 | 1,181,852 | ||||||
|
| |||||||
1,337,165 | ||||||||
PHARMACEUTICALS — 9.36% |
| |||||||
Arseus NV | 14,734 | 239,210 | ||||||
Galapagos NVa,b | 6,519 | 108,056 | ||||||
ThromboGenics NVa,b | 7,632 | 268,594 | ||||||
UCB SA | 35,828 | 1,761,287 | ||||||
|
| |||||||
2,377,147 | ||||||||
REAL ESTATE INVESTMENT TRUSTS — 6.38% |
| |||||||
Befimmo SCA | 4,293 | 249,138 | ||||||
Cofinimmo SA | 5,141 | 567,020 |
SCHEDULESOF INVESTMENTS | 37 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI BELGIUM INVESTABLE MARKET INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Intervest Offices & Warehouses | 4,134 | $ | 96,558 | |||||
Leasinvest Real Estate SCA | 1,961 | 158,346 | ||||||
Warehouses De Pauw SCA | 5,830 | 286,600 | ||||||
Wereldhave Belgium NV | 2,756 | 261,414 | ||||||
|
| |||||||
1,619,076 | ||||||||
SEMICONDUCTORS — 0.29% |
| |||||||
Melexis NV | 4,558 | 74,690 | ||||||
|
| |||||||
74,690 | ||||||||
TELECOMMUNICATIONS — 9.89% |
| |||||||
Belgacom SA | 49,714 | 1,476,375 | ||||||
Mobistar SA | 5,671 | 179,887 | ||||||
Telenet Group Holding NV | 21,942 | 854,491 | ||||||
|
| |||||||
2,510,753 | ||||||||
TRANSPORTATION — 0.73% |
| |||||||
Compagnie Maritime Belge SA | 4,876 | 98,339 | ||||||
Euronav SAa | 4,240 | 24,745 | ||||||
Exmar NV | 8,957 | 63,565 | ||||||
|
| |||||||
186,649 | ||||||||
VENTURE CAPITAL — 1.40% |
| |||||||
GIMV NV | 7,685 | 354,639 | ||||||
|
| |||||||
354,639 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $41,994,533) |
| 25,231,233 | ||||||
SHORT-TERM INVESTMENTS — 1.47% |
| |||||||
MONEY MARKET FUNDS — 1.47% |
| |||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.23%c,d,e | 337,123 | 337,123 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.23%c,d,e | 25,548 | 25,548 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%c,d | 9,870 | 9,870 | ||||||
|
| |||||||
372,541 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $372,541) |
| 372,541 | ||||||
|
|
Value | ||||||
TOTAL INVESTMENTS | ||||||
(Cost: $42,367,074) | $ | 25,603,774 | ||||
Other Assets, Less Liabilities — (0.86)% | (217,821 | ) | ||||
|
| |||||
NET ASSETS — 100.00% | $ | 25,385,953 | ||||
|
|
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.
38 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
iSHARES® MSCI EMERGING MARKETS EASTERN EUROPE INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 94.85% |
| |||||||
CZECH REPUBLIC — 4.10% |
| |||||||
CEZ AS | 11,753 | $ | 461,573 | |||||
Komercni Banka AS | 1,105 | 214,465 | ||||||
Telefonica O2 Czech Republic AS | 7,998 | 169,600 | ||||||
|
| |||||||
845,638 | ||||||||
HUNGARY — 3.49% |
| |||||||
Magyar Telekom Telecommunications PLC | 34,850 | 66,129 | ||||||
MOL Hungarian Oil and Gas PLC | 2,992 | 220,463 | ||||||
OTP Bank Nyrt | 16,337 | 259,225 | ||||||
Richter Gedeon Nyrt | 1,020 | 174,102 | ||||||
|
| |||||||
719,919 | ||||||||
POLAND — 17.46% |
| |||||||
Asseco Poland SA | 5,089 | 68,031 | ||||||
Bank Handlowy w Warszawie SA | 2,414 | 56,889 | ||||||
Bank Millennium SAa | 31,009 | 32,800 | ||||||
Bank Pekao SA | 8,585 | 389,628 | ||||||
BRE Bank SAa | 1,088 | 100,036 | ||||||
Cyfrowy Polsat SAa | 14,076 | 58,369 | ||||||
ENEA SA | 8,347 | 41,455 | ||||||
Eurocash SA | 4,981 | 60,043 | ||||||
Grupa Lotos SAa | 4,318 | 34,458 | ||||||
Jastrzebska Spolka Weglowa SA | 2,635 | 69,720 | ||||||
Kernel Holding SAa | 3,774 | 77,338 | ||||||
KGHM Polska Miedz SA | 10,115 | 395,967 | ||||||
Polska Grupa Energetyczna SA | 54,910 | 309,275 | ||||||
Polski Koncern Naftowy Orlen SAa | 23,409 | 275,479 | ||||||
Polskie Gornictwo Naftowe i Gazownictwo SAa | 127,460 | 156,334 | ||||||
Powszechna Kasa Oszczednosci Bank Polski SA | 53,943 | 578,721 | ||||||
Powszechny Zaklad Ubezpieczen SA | 4,063 | 423,038 | ||||||
Synthos SA | 38,746 | 63,754 | ||||||
Tauron Polska Energia SA | 75,854 | 111,553 | ||||||
Telekomunikacja Polska SA | 54,026 | 270,268 | ||||||
TVN SA | 11,101 | 23,451 | ||||||
|
| |||||||
3,596,607 | ||||||||
RUSSIA — 69.80% |
| |||||||
Federal Grid Co. of Unified Energy System OJSCa | 22,838,000 | 141,223 | ||||||
Gazprom OAO | 773,332 | 3,765,728 |
Security | Shares | Value | ||||||
IDGC Holding JSCa | 1,250,500 | $ | 66,851 | |||||
Inter RAO UES OJSCa | 142,100,000 | 113,900 | ||||||
LSR Group OJSC SP GDRb | 14,926 | 61,570 | ||||||
LUKOIL OAO | 37,009 | 2,103,727 | ||||||
Magnit OJSC SP GDRb | 18,829 | 600,457 | ||||||
Mechel OAO SP ADR | 10,421 | 59,712 | ||||||
MMC Norilsk Nickel OJSC | 3,466 | 511,905 | ||||||
Mobile TeleSystems OJSC SP ADR | 37,537 | 691,056 | ||||||
NovaTek OAO SP GDRb | 6,611 | 788,692 | ||||||
Novolipetsk Steel OJSC SP GDRb | 4,777 | 86,368 | ||||||
Rosneft Oil Co. OJSC | 92,674 | 552,768 | ||||||
Rostelecom OJSC | 85,550 | 326,730 | ||||||
RusHydro OJSC | 8,262,000 | 208,827 | ||||||
Sberbank of Russia | 626,895 | 1,806,769 | ||||||
Severstal OAO | 12,149 | 138,840 | ||||||
Sistema JSFC SP GDRb | 8,806 | 173,566 | ||||||
Surgutneftegas OJSC | 520,260 | 448,753 | ||||||
Tatneft OAO | 103,449 | 626,543 | ||||||
TMK OAO SP GDRb | 4,267 | 58,671 | ||||||
Uralkali OJSC | 95,715 | 731,400 | ||||||
VTB Bank OJSC | 191,360,999 | 316,135 | ||||||
|
| |||||||
14,380,191 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $27,441,997) |
| 19,542,355 | ||||||
PREFERRED STOCKS — 3.24% |
| |||||||
RUSSIA — 3.24% | ||||||||
AK Transneft OAO | 114 | 185,744 | ||||||
Sberbank of Russia | 72,100 | 152,726 | ||||||
Surgutneftegas OJSC | 510,000 | 328,495 | ||||||
|
| |||||||
666,965 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $648,121) |
| 666,965 |
SCHEDULESOF INVESTMENTS | 39 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS EASTERN EUROPE INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS — 1.55% |
| |||||||
MONEY MARKET FUNDS — 1.55% |
| |||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%c,d | 319,344 | $ | 319,344 | |||||
|
| |||||||
319,344 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $319,344) |
| 319,344 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $28,409,462) |
| 20,528,664 | ||||||
Other Assets, Less Liabilities — 0.36% |
| 73,342 | ||||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 20,602,006 | |||||
|
|
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.
40 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 97.84% |
| |||||||
AUSTRIA — 0.92% |
| |||||||
Andritz AG | 20,748 | $ | 1,072,659 | |||||
Erste Group Bank AGa | 61,152 | 1,237,939 | ||||||
IMMOEAST AG Escrowa,b | 105,078 | 13 | ||||||
IMMOFINANZ AGa | 266,721 | 858,660 | ||||||
IMMOFINANZ AG Escrowa,b | 68,575 | 9 | ||||||
OMV AG | 42,042 | 1,397,715 | ||||||
Raiffeisen International Bank Holding AG | 13,923 | 466,565 | ||||||
Telekom Austria AG | 65,793 | 526,287 | ||||||
Verbund AG | 19,383 | 393,482 | ||||||
Vienna Insurance Group AG | 11,193 | 469,681 | ||||||
voestalpine AG | 31,395 | 900,888 | ||||||
|
| |||||||
7,323,898 | ||||||||
BELGIUM — 4.12% | ||||||||
Ageas SA/NV | 66,612 | 1,486,170 | ||||||
Anheuser-Busch InBev NV | 228,774 | 19,257,323 | ||||||
Belgacom SA | 43,134 | 1,280,967 | ||||||
Colruyt SA | 21,567 | 1,026,106 | ||||||
Delhaize Group SA | 28,938 | 1,149,370 | ||||||
Groupe Bruxelles Lambert SA | 23,205 | 1,605,820 | ||||||
KBC Groep NV | 46,137 | 1,005,221 | ||||||
Mobistar SA | 8,463 | 268,450 | ||||||
Solvay SA | 16,926 | 1,903,315 | ||||||
Telenet Group Holding NV | 16,107 | 627,257 | ||||||
UCB SA | 31,395 | 1,543,362 | ||||||
Umicore SA | 32,487 | 1,544,629 | ||||||
|
| |||||||
32,697,990 | ||||||||
FINLAND — 2.64% | ||||||||
Elisa OYJ | 40,131 | 850,336 | ||||||
Fortum OYJ | 126,399 | 2,340,498 | ||||||
Kesko OYJ Class B | 18,018 | 478,081 | ||||||
Kone OYJ Class B | 44,226 | 2,712,085 | ||||||
Metso OYJ | 36,309 | 1,301,628 | ||||||
Neste Oil OYJ | 36,855 | 425,534 | ||||||
Nokia OYJc | 1,066,884 | 3,039,264 | ||||||
Nokian Renkaat OYJ | 31,668 | 1,249,019 | ||||||
Orion OYJ Class B | 27,300 | 561,598 | ||||||
Pohjola Bank PLC Class A | 39,858 | 450,411 | ||||||
Sampo OYJ Class A | 119,301 | 3,430,143 | ||||||
Stora Enso OYJ Class R | 157,248 | 951,413 |
Security | Shares | Value | ||||||
UPM-Kymmene OYJ | 149,604 | $ | 1,660,410 | |||||
Wartsila OYJ Abp | 47,775 | 1,541,040 | ||||||
|
| |||||||
20,991,460 | ||||||||
FRANCE — 33.53% | ||||||||
Accor SA | 42,042 | 1,335,977 | ||||||
Aeroports de Paris | 8,463 | 672,166 | ||||||
Alcatel-Lucenta | 663,663 | 757,075 | ||||||
ALSTOM | 58,695 | 2,094,517 | ||||||
ArcelorMittal | 266,994 | 3,989,752 | ||||||
Arkema SA | 17,745 | 1,513,837 | ||||||
Atos SA | 15,288 | 897,043 | ||||||
AXA SA | 504,231 | 7,315,562 | ||||||
BNP Paribas SA | 275,184 | 11,986,073 | ||||||
Bouygues SA | 54,054 | 1,347,371 | ||||||
Bureau Veritas SA | 15,834 | 1,463,975 | ||||||
Cap Gemini SA | 42,315 | 1,558,805 | ||||||
Carrefour SA | 164,619 | 3,458,025 | ||||||
Casino Guichard-Perrachon SA | 15,834 | 1,408,290 | ||||||
Christian Dior SA | 15,561 | 2,224,300 | ||||||
CNP Assurances SA | 42,861 | 520,867 | ||||||
Compagnie de Saint-Gobain | 112,476 | 3,866,940 | ||||||
Compagnie Generale de Geophysique-Veritasa | 39,039 | 1,134,998 | ||||||
Compagnie Generale des Etablissements Michelin Class B | 51,324 | 3,690,787 | ||||||
Credit Agricole SAa | 283,374 | 1,656,661 | ||||||
Danone SA | 165,165 | 10,315,838 | ||||||
Dassault Systemes SA | 17,472 | 1,700,431 | ||||||
Edenred SA | 48,594 | 1,301,008 | ||||||
Electricite de France SA | 68,523 | 1,398,383 | ||||||
Essilor International SA | 57,330 | 5,014,431 | ||||||
Eurazeo | 8,463 | 373,206 | ||||||
European Aeronautic Defence and Space Co. NV | 117,390 | 4,486,453 | ||||||
Eutelsat Communications SA | 37,674 | 1,160,609 | ||||||
Fonciere des Regions | 7,098 | 500,139 | ||||||
France Telecom SA | 528,255 | 7,321,190 | ||||||
GDF Suez | 363,636 | 8,972,459 | ||||||
Gecina SA | 6,279 | 603,019 | ||||||
Gemalto NV | 22,386 | 1,777,988 | ||||||
Groupe Eurotunnel SA Registered | 159,978 | 1,201,848 | ||||||
Icade | 6,825 | 520,476 |
SCHEDULESOF INVESTMENTS | 41 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMU INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Iliad SA | 6,552 | $ | 1,040,608 | |||||
Imerys SA | 9,828 | 486,732 | ||||||
JCDecaux SA | 18,837 | 430,717 | ||||||
Klepierre | 27,027 | 874,173 | ||||||
L’Air Liquide SA | 88,998 | 10,494,624 | ||||||
L’Oreal SA | 68,796 | 8,475,754 | ||||||
Lafarge SA | 53,235 | 2,544,199 | ||||||
Lagardere SCA | 33,852 | 953,471 | ||||||
Legrand SA | 67,704 | 2,344,741 | ||||||
LVMH Moet Hennessy Louis Vuitton SA | 72,345 | 11,836,575 | ||||||
Natixis | 262,353 | 718,602 | ||||||
Pernod Ricard SA | 60,333 | 6,515,182 | ||||||
PPR SA | 21,567 | 3,376,402 | ||||||
PSA Peugeot Citroen SAa | 65,247 | 494,697 | ||||||
Publicis Groupe SA | 50,505 | 2,626,994 | ||||||
Remy Cointreau SA | 6,279 | 718,732 | ||||||
Renault SA | 54,873 | 2,570,607 | ||||||
Rexel SA | 30,849 | 603,692 | ||||||
Safran SA | 65,520 | 2,300,488 | ||||||
Sanofi | 338,793 | 27,779,509 | ||||||
Schneider Electric SA | 148,512 | 9,399,280 | ||||||
SCOR SE | 46,683 | 1,150,104 | ||||||
SES SA Class A FDR | 85,995 | 2,217,796 | ||||||
Societe BIC SA | 8,190 | 883,381 | ||||||
Societe Generalea | 199,290 | 5,287,866 | ||||||
Sodexo | 27,027 | 2,141,826 | ||||||
STMicroelectronics NV | 181,272 | 1,077,803 | ||||||
Suez Environnement SA | 80,535 | 904,493 | ||||||
Technip SA | 28,392 | 2,996,897 | ||||||
Thales SA | 25,935 | 863,698 | ||||||
Total SA | 606,333 | 30,345,846 | ||||||
Unibail-Rodamco SE | 26,208 | 5,356,655 | ||||||
Vallourec SA | 29,484 | 1,370,258 | ||||||
Veolia Environnement | 96,642 | 1,025,214 | ||||||
Vinci SA | 130,221 | 5,677,726 | ||||||
Vivendi SA | 367,185 | 7,215,624 | ||||||
Wendel | 9,590 | 723,237 | ||||||
Zodiac Aerospace | 9,828 | 939,273 | ||||||
|
| |||||||
266,303,975 | ||||||||
GERMANY — 27.93% | ||||||||
Adidas AG | 59,514 | 4,666,832 | ||||||
Allianz SE Registered | 129,675 | 14,264,747 | ||||||
Axel Springer AG | 11,193 | 510,314 |
Security | Shares | Value | ||||||
BASF SE | 261,534 | $ | 20,376,507 | |||||
Bayer AG Registered | 235,599 | 18,314,296 | ||||||
Bayerische Motoren Werke AG | 94,185 | 6,845,406 | ||||||
Beiersdorf AG | 28,665 | 2,059,537 | ||||||
Brenntag AG | 14,742 | 1,760,672 | ||||||
Celesio AG | 24,297 | 445,154 | ||||||
Commerzbank AGa | 1,037,127 | 1,647,196 | ||||||
Continental AG | 22,659 | 2,258,086 | ||||||
Daimler AG Registered | 258,258 | 12,695,834 | ||||||
Deutsche Bank AG Registered | 264,810 | 9,437,997 | ||||||
Deutsche Boerse AG | 55,146 | 2,845,107 | ||||||
Deutsche Lufthansa AG Registered | 65,247 | 806,812 | ||||||
Deutsche Post AG Registered | 240,786 | 4,687,723 | ||||||
Deutsche Telekom AG Registered | 799,617 | 9,560,095 | ||||||
E.ON AG | 512,967 | 11,822,988 | ||||||
Fraport AG | 10,374 | 579,220 | ||||||
Fresenius Medical Care AG & Co. KGaA | 59,787 | 4,320,475 | ||||||
Fresenius SE & Co. KGaA | 35,217 | 3,765,247 | ||||||
GEA Group AG | 49,686 | 1,315,213 | ||||||
Hannover Rueckversicherung AG Registered | 17,199 | 1,052,965 | ||||||
HeidelbergCement AG | 40,131 | 2,032,004 | ||||||
Henkel AG & Co. KGaA | 37,128 | 2,308,636 | ||||||
Hochtief AGa | 8,736 | 410,297 | ||||||
Hugo Boss AG | 7,098 | 657,696 | ||||||
Infineon Technologies AG | 309,582 | 2,144,303 | ||||||
K+S AG Registered | 49,140 | 2,409,504 | ||||||
Kabel Deutschland Holding AGa | 25,389 | 1,686,549 | ||||||
Lanxess AG | 23,751 | 1,805,868 | ||||||
Linde AG | 52,689 | 8,318,414 | ||||||
MAN SE | 12,012 | 1,111,056 | ||||||
Merck KGaA | 18,291 | 2,096,695 | ||||||
METRO AG | 36,855 | 1,112,615 | ||||||
Muenchener Rueckversicherungs-Gesellschaft AG Registered | 51,051 | 7,573,970 | ||||||
QIAGEN NVa | 66,885 | 1,205,191 | ||||||
RWE AG | 138,957 | 5,840,553 | ||||||
Salzgitter AG | 11,193 | 412,823 | ||||||
SAP AG | 262,353 | 17,331,775 | ||||||
Siemens AG Registered | 234,234 | 22,267,902 | ||||||
Suedzucker AG | 18,837 | 633,016 | ||||||
ThyssenKrupp AG | 110,019 | 2,196,675 | ||||||
United Internet AG Registered | 27,300 | 553,855 |
42 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMU INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Volkswagen AG | 8,463 | $ | 1,381,456 | |||||
Wacker Chemie AGc | 4,368 | 281,350 | ||||||
|
| |||||||
221,810,626 | ||||||||
GREECE — 0.18% | ||||||||
Coca-Cola Hellenic Bottling Co. SAa | 52,961 | 992,014 | ||||||
OPAP SA | 57,820 | 403,767 | ||||||
|
| |||||||
1,395,781 | ||||||||
IRELAND — 0.96% |
| |||||||
CRH PLC | 205,569 | 3,634,154 | ||||||
Elan Corp. PLCa | 143,871 | 1,651,186 | ||||||
Irish Bank Resolution Corp. Ltd.a,b | 446,666 | 56 | ||||||
Kerry Group PLC Class A | 42,861 | 2,057,862 | ||||||
Ryanair Holdings PLCa | 43,520 | 229,302 | ||||||
Ryanair Holdings PLC SP ADRa | 1,092 | 33,896 | ||||||
|
| |||||||
7,606,456 | ||||||||
ITALY — 7.97% | ||||||||
Assicurazioni Generali SpA | 332,787 | 4,756,881 | ||||||
Atlantia SpA | 93,912 | 1,322,261 | ||||||
Autogrill SpA | 32,760 | 279,973 | ||||||
Banca Monte dei Paschi di Siena SpAa,c | 1,842,204 | 520,150 | ||||||
Banco Popolare SpAa | 500,682 | 732,087 | ||||||
Enel Green Power SpA | 499,044 | 822,162 | ||||||
Enel SpA | 1,874,964 | 6,192,087 | ||||||
Eni SpA | 723,996 | 16,079,958 | ||||||
Exor SpA | 18,291 | 437,830 | ||||||
Fiat Industrial SpA | 243,789 | 2,459,905 | ||||||
Fiat SpAa | 249,522 | 1,362,511 | ||||||
Finmeccanica SpAa,c | 115,479 | 513,540 | ||||||
Intesa Sanpaolo SpA | 2,868,957 | 4,520,400 | ||||||
Intesa Sanpaolo SpA RNC | 271,362 | 345,814 | ||||||
Luxottica Group SpA | 33,306 | 1,217,484 | ||||||
Mediaset SpA | 203,112 | 408,100 | ||||||
Mediobanca SpA | 146,601 | 687,790 | ||||||
Pirelli & C. SpA | 67,431 | 743,722 | ||||||
Prysmian SpA | 57,603 | 966,420 | ||||||
Saipem SpA | 75,348 | 3,585,350 | ||||||
Snam SpA | 479,934 | 2,022,976 | ||||||
Telecom Italia SpA | 2,667,483 | 2,488,148 | ||||||
Telecom Italia SpA RNC | 1,723,449 | 1,367,531 | ||||||
Tenaris SA | 134,589 | 2,807,698 | ||||||
Terna SpA | 371,280 | 1,292,612 | ||||||
UniCredit SpAa | 1,154,244 | 4,580,102 |
Security | Shares | Value | ||||||
Unione di Banche Italiane ScpA | 244,881 | $ | 823,538 | |||||
|
| |||||||
63,337,030 | ||||||||
NETHERLANDS — 8.97% | ||||||||
AEGON NV | 490,035 | 2,522,025 | ||||||
Akzo Nobel NV | 66,885 | 3,863,017 | ||||||
ASML Holding NV | 119,574 | 6,787,811 | ||||||
Corio NV | 18,564 | 792,087 | ||||||
DE Master Blenders 1753 NVa | 168,441 | 1,988,163 | ||||||
Delta Lloyd NV | 40,404 | 557,930 | ||||||
Fugro NV CVA | 19,656 | 1,198,434 | ||||||
Heineken Holding NV | 28,665 | 1,329,305 | ||||||
Heineken NV | 65,520 | 3,640,064 | ||||||
ING Groep NV CVAa | 1,091,454 | 8,367,480 | ||||||
Koninklijke Ahold NV | 297,297 | 3,683,722 | ||||||
Koninklijke DSM NV | 43,953 | 2,065,692 | ||||||
Koninklijke KPN NV | 285,012 | 2,450,137 | ||||||
Koninklijke Philips Electronics NV | 295,932 | 6,818,847 | ||||||
Randstad Holding NV | 34,398 | 1,120,822 | ||||||
Reed Elsevier NV | 195,741 | 2,561,073 | ||||||
Royal Boskalis Westminster NV CVA | 20,475 | 693,481 | ||||||
Royal Vopak NV | 19,929 | 1,281,146 | ||||||
SBM Offshore NVa | 48,594 | 688,481 | ||||||
TNT Express NV | 92,547 | 1,044,300 | ||||||
Unilever NV CVA | 463,827 | 16,212,453 | ||||||
Wolters Kluwer NV | 85,995 | 1,550,073 | ||||||
|
| |||||||
71,216,543 | ||||||||
PORTUGAL — 0.59% | ||||||||
Banco Espirito Santo SA Registereda | 567,294 | 396,151 | ||||||
Energias de Portugal SA | 544,089 | 1,329,127 | ||||||
Galp Energia SGPS SA Class B | 66,339 | 998,845 | ||||||
Jeronimo Martins SGPS SA | 63,063 | 1,055,639 | ||||||
Portugal Telecom SGPS SA Registered | 179,361 | 877,208 | ||||||
|
| |||||||
4,656,970 | ||||||||
SPAIN — 10.03% | ||||||||
Abertis Infraestructuras SA | 103,618 | 1,409,940 | ||||||
Acciona SAc | 6,279 | 294,268 | ||||||
Acerinox SAc | 28,977 | 310,978 | ||||||
Actividades de Construcciones y Servicios SAc | 40,950 | 815,040 | ||||||
Amadeus IT Holding SA Class A | 89,544 | 2,004,575 | ||||||
Banco Bilbao Vizcaya Argentaria SA | 1,530,438 | 11,715,528 | ||||||
Banco de Sabadell SAc | 708,865 | 2,055,106 |
SCHEDULESOF INVESTMENTS | 43 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMU INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Banco Popular Espanol SAc | 377,832 | $ | 863,454 | |||||
Banco Santander SA | 2,803,164 | 20,034,311 | ||||||
Bankia SAa,c | 283,101 | 508,866 | ||||||
CaixaBank SAc | 219,020 | 837,059 | ||||||
Distribuidora Internacional de Alimentacion SA | 175,539 | 933,968 | ||||||
Enagas SA | 51,324 | 955,205 | ||||||
Ferrovial SA | 115,752 | 1,369,322 | ||||||
Gas Natural SDG SA | 99,918 | 1,235,033 | ||||||
Grifols SAa | 42,315 | 1,194,772 | ||||||
Iberdrola SA | 1,111,110 | 4,417,348 | ||||||
Industria de Diseno Textil SA | 62,244 | 6,936,521 | ||||||
International Consolidated Airlines Group SAa | 266,994 | 596,696 | ||||||
Mapfre SA | 219,821 | 534,773 | ||||||
Red Electrica Corporacion SA | 30,849 | 1,338,427 | ||||||
Repsol SA | 230,412 | 4,250,506 | ||||||
Telefonica SA | 1,149,876 | 14,552,163 | ||||||
Zardoya Otis SA | 44,590 | 517,654 | ||||||
|
| |||||||
79,681,513 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $1,173,532,465) | 777,022,242 | |||||||
PREFERRED STOCKS — 1.91% |
| |||||||
GERMANY — 1.91% |
| |||||||
Bayerische Motoren Werke AG | 15,288 | 768,894 | ||||||
Henkel AG & Co. KGaA | 50,505 | 3,825,423 | ||||||
Porsche Automobil Holding SE | 43,680 | 2,262,910 | ||||||
ProSiebenSat.1 Media AG | 25,116 | 606,423 | ||||||
RWE AG NVS | 11,466 | 432,936 | ||||||
Volkswagen AG | 41,223 | 7,295,407 | ||||||
|
| |||||||
15,191,993 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS | ||||||||
(Cost: $16,976,337) | 15,191,993 | |||||||
SHORT-TERM INVESTMENTS — 1.04% |
| |||||||
MONEY MARKET FUNDS — 1.04% |
| |||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.23%d,e,f | 7,147,772 | 7,147,772 |
Security | Shares | Value | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.23%d,e,f | 541,668 | $ | 541,668 | |||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%d,e | 599,014 | 599,014 | ||||||
|
| |||||||
8,288,454 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS | ||||||||
(Cost: $8,288,454) | 8,288,454 | |||||||
|
| |||||||
TOTAL INVESTMENTS IN SECURITIES —100.79% |
| |||||||
(Cost: $1,198,797,256) | 800,502,689 | |||||||
Other Assets, Less Liabilities — (0.79)% |
| (6,276,682 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 794,226,007 | |||||
|
|
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.
44 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
iSHARES® MSCI FRANCE INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 99.93% |
| |||||||
ADVERTISING — 1.14% |
| |||||||
JCDecaux SA | 28,518 | $ | 652,078 | |||||
Publicis Groupe SA | 75,660 | 3,935,419 | ||||||
|
| |||||||
4,587,497 | ||||||||
AEROSPACE & DEFENSE — 3.22% |
| |||||||
European Aeronautic Defence and Space Co. NV | 176,928 | 6,761,898 | ||||||
Safran SA | 98,552 | 3,460,282 | ||||||
Thales SA | 39,285 | 1,308,285 | ||||||
Zodiac Aerospace | 14,647 | 1,399,830 | ||||||
|
| |||||||
12,930,295 | ||||||||
APPAREL — 0.83% |
| |||||||
Christian Dior SA | 23,474 | 3,355,390 | ||||||
|
| |||||||
3,355,390 | ||||||||
AUTO MANUFACTURERS — 1.15% |
| |||||||
PSA Peugeot Citroen SAa | 99,328 | 753,096 | ||||||
Renault SA | 82,547 | 3,867,036 | ||||||
|
| |||||||
4,620,132 | ||||||||
AUTO PARTS & EQUIPMENT — 1.38% |
| |||||||
Compagnie Generale des Etablissements Michelin Class B | 77,309 | 5,559,408 | ||||||
|
| |||||||
5,559,408 | ||||||||
BANKS — 7.38% |
| |||||||
BNP Paribas SA | 414,869 | 18,070,273 | ||||||
Credit Agricole SAa | 429,225 | 2,509,335 | ||||||
Natixis | 395,954 | 1,084,544 | ||||||
Societe Generalea | 300,021 | 7,960,615 | ||||||
|
| |||||||
29,624,767 | ||||||||
BEVERAGES — 2.72% |
| |||||||
Pernod Ricard SA | 90,986 | 9,825,308 | ||||||
Remy Cointreau SA | 9,603 | 1,099,217 | ||||||
|
| |||||||
10,924,525 | ||||||||
BUILDING MATERIALS — 2.59% |
| |||||||
Compagnie de Saint-Gobain | 169,556 | 5,829,359 | ||||||
Imerys SA | 14,647 | 725,393 | ||||||
Lafarge SA | 80,219 | 3,833,815 | ||||||
|
| |||||||
10,388,567 | ||||||||
CHEMICALS — 4.50% |
| |||||||
Arkema SA | 26,675 | 2,275,661 | ||||||
L’Air Liquide SA | 134,151 | 15,819,056 | ||||||
|
| |||||||
18,094,717 |
Security | Shares | Value | ||||||
COMMERCIAL SERVICES — 1.82% |
| |||||||
Bureau Veritas SA | 23,474 | $ | 2,170,351 | |||||
Edenred SA | 73,041 | 1,955,528 | ||||||
Sodexo | 40,449 | 3,205,488 | ||||||
|
| |||||||
7,331,367 | ||||||||
COMPUTERS — 1.60% |
| |||||||
Atos SA | 23,377 | 1,371,675 | ||||||
Cap Gemini SA | 63,632 | 2,344,083 | ||||||
Gemalto NV | 34,047 | 2,704,152 | ||||||
|
| |||||||
6,419,910 | ||||||||
COSMETICS & PERSONAL CARE — 3.18% |
| |||||||
L’Oreal SA | 103,596 | 12,763,158 | ||||||
|
| |||||||
12,763,158 | ||||||||
ELECTRIC — 3.89% |
| |||||||
Electricite de France SA | 103,305 | 2,108,196 | ||||||
GDF Suez | 547,662 | 13,513,169 | ||||||
|
| |||||||
15,621,365 | ||||||||
ELECTRICAL COMPONENTS & EQUIPMENT — 4.41% |
| |||||||
Legrand SA | 101,753 | 3,523,934 | ||||||
Schneider Electric SA | 224,070 | 14,181,324 | ||||||
|
| |||||||
17,705,258 | ||||||||
ELECTRONICS — 0.23% |
| |||||||
Rexel SA | 46,560 | 911,145 | ||||||
|
| |||||||
911,145 | ||||||||
ENGINEERING & CONSTRUCTION — 2.90% |
| |||||||
Aeroports de Paris | 12,804 | 1,016,946 | ||||||
Bouygues SA | 81,286 | 2,026,166 | ||||||
Vinci SA | 197,007 | 8,589,642 | ||||||
|
| |||||||
11,632,754 | ||||||||
FOOD — 5.69% |
| |||||||
Carrefour SA | 248,029 | 5,210,155 | ||||||
Casino Guichard-Perrachon SA | 23,765 | 2,113,680 | ||||||
Danone SA | 248,708 | 15,533,748 | ||||||
|
| |||||||
22,857,583 | ||||||||
HEALTH CARE — PRODUCTS — 1.88% |
| |||||||
Essilor International SA | 86,427 | 7,559,432 | ||||||
|
| |||||||
7,559,432 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 4.85% |
| |||||||
Eurazeo | 12,804 | 564,639 |
SCHEDULESOF INVESTMENTS | 45 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI FRANCE INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
LVMH Moet Hennessy Louis Vuitton SA | 109,125 | $ | 17,854,257 | |||||
Wendel | 14,065 | 1,060,722 | ||||||
|
| |||||||
19,479,618 | ||||||||
HOUSEHOLD PRODUCTS & WARES — 0.33% |
| |||||||
Societe BIC SA | 12,319 | 1,328,739 | ||||||
|
| |||||||
1,328,739 | ||||||||
INSURANCE — 3.37% |
| |||||||
AXA SA | 759,413 | 11,017,833 | ||||||
CNP Assurances SA | 63,923 | 776,823 | ||||||
SCOR SE | 69,937 | 1,723,001 | ||||||
|
| |||||||
13,517,657 | ||||||||
INTERNET — 0.39% |
| |||||||
Iliad SA | 9,894 | 1,571,395 | ||||||
|
| |||||||
1,571,395 | ||||||||
IRON & STEEL — 1.50% |
| |||||||
ArcelorMittal | 402,162 | 6,009,598 | ||||||
|
| |||||||
6,009,598 | ||||||||
LODGING — 0.50% |
| |||||||
Accor SA | 63,341 | 2,012,800 | ||||||
|
| |||||||
2,012,800 | ||||||||
MACHINERY — 0.79% |
| |||||||
ALSTOM | 88,561 | 3,160,278 | ||||||
|
| |||||||
3,160,278 | ||||||||
MEDIA — 0.36% |
| |||||||
Lagardere SCA | 50,828 | 1,431,615 | ||||||
|
| |||||||
1,431,615 | ||||||||
METAL FABRICATE & HARDWARE — 0.51% |
| |||||||
Vallourec SA | 44,329 | 2,060,174 | ||||||
|
| |||||||
2,060,174 | ||||||||
OIL & GAS — 11.38% |
| |||||||
Total SA | 913,546 | 45,721,288 | ||||||
|
| |||||||
45,721,288 | ||||||||
OIL & GAS SERVICES — 1.55% |
| |||||||
Compagnie Generale de Geophysique-Veritasa | 58,685 | 1,706,174 | ||||||
Technip SA | 42,777 | 4,515,295 | ||||||
|
| |||||||
6,221,469 | ||||||||
PHARMACEUTICALS — 10.43% |
| |||||||
Sanofi | 510,705 | 41,875,523 | ||||||
|
| |||||||
41,875,523 |
Security | Shares | Value | ||||||
REAL ESTATE INVESTMENT TRUSTS — 2.96% |
| |||||||
Fonciere des Regions | 11,058 | $ | 779,168 | |||||
Gecina SA | 9,409 | 903,617 | ||||||
Icade | 10,088 | 769,313 | ||||||
Klepierre | 42,195 | 1,364,773 | ||||||
Unibail-Rodamco SE | 39,479 | 8,069,116 | ||||||
|
| |||||||
11,885,987 | ||||||||
RETAIL — 1.27% |
| |||||||
PPR SA | 32,495 | 5,087,225 | ||||||
|
| |||||||
5,087,225 | ||||||||
SEMICONDUCTORS — 0.41% |
| |||||||
STMicroelectronics NV | 274,122 | 1,629,869 | ||||||
|
| |||||||
1,629,869 | ||||||||
SOFTWARE — 0.64% |
| |||||||
Dassault Systemes SA | 26,481 | 2,577,216 | ||||||
|
| |||||||
2,577,216 | ||||||||
TELECOMMUNICATIONS — 7.01% |
| |||||||
Alcatel-Lucenta | 997,742 | 1,138,176 | ||||||
Eutelsat Communications SA | 56,939 | 1,754,098 | ||||||
France Telecom SA | 796,661 | 11,041,082 | ||||||
SES SA Class A FDR | 129,786 | 3,347,159 | ||||||
Vivendi SA | 553,676 | 10,880,395 | ||||||
|
| |||||||
28,160,910 | ||||||||
TRANSPORTATION — 0.45% |
| |||||||
Groupe Eurotunnel SA Registered | 241,530 | 1,814,513 | ||||||
|
| |||||||
1,814,513 | ||||||||
WATER — 0.72% |
| |||||||
Suez Environnement SA | 120,668 | 1,355,229 | ||||||
Veolia Environnement | 145,015 | 1,538,372 | ||||||
|
| |||||||
2,893,601 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $516,923,238) |
| 401,326,745 | ||||||
SHORT-TERM INVESTMENTS — 0.00% |
| |||||||
MONEY MARKET FUNDS — 0.00% |
| |||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%b,c | 10,099 | 10,099 | ||||||
|
| |||||||
10,099 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $10,099) |
| 10,099 | ||||||
|
|
46 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI FRANCE INDEX FUND
August 31, 2012
Value | ||||||
TOTAL INVESTMENTS | ||||||
(Cost: $516,933,337) | $ | 401,336,844 | ||||
Other Assets, Less Liabilities — 0.07% | 288,658 | |||||
|
| |||||
NET ASSETS — 100.00% | $ | 401,625,502 | ||||
|
|
FDR — Fiduciary 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 | 47 |
Table of Contents
Schedule of Investments
iSHARES® MSCI GERMANY INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 93.04% |
| |||||||
AIRLINES — 0.34% |
| |||||||
Deutsche Lufthansa AG Registered | 764,313 | $ | 9,451,116 | |||||
|
| |||||||
9,451,116 | ||||||||
APPAREL — 2.23% |
| |||||||
Adidas AG | 699,200 | 54,828,259 | ||||||
Hugo Boss AG | 82,156 | 7,612,522 | ||||||
|
| |||||||
62,440,781 | ||||||||
AUTO MANUFACTURERS — 8.77% |
| |||||||
Bayerische Motoren Werke AG | 1,105,610 | 80,356,208 | ||||||
Daimler AG Registered | 3,028,410 | 148,875,117 | ||||||
Volkswagen AG | 98,762 | 16,121,390 | ||||||
|
| |||||||
245,352,715 | ||||||||
AUTO PARTS & EQUIPMENT — 0.95% |
| |||||||
Continental AG | 267,007 | 26,608,617 | ||||||
|
| |||||||
26,608,617 | ||||||||
BANKS — 4.65% |
| |||||||
Commerzbank AGa | 12,142,482 | 19,285,054 | ||||||
Deutsche Bank AG Registered | 3,105,759 | 110,691,227 | ||||||
|
| |||||||
129,976,281 | ||||||||
BUILDING MATERIALS — 0.85% |
| |||||||
HeidelbergCement AG | 469,338 | 23,764,593 | ||||||
|
| |||||||
23,764,593 | ||||||||
CHEMICALS — 14.66% |
| |||||||
BASF SE | 3,068,614 | 239,080,328 | ||||||
Brenntag AG | 172,178 | 20,563,627 | ||||||
K+S AG Registered | 575,092 | 28,198,744 | ||||||
Lanxess AG | 277,932 | 21,132,103 | ||||||
Linde AG | 618,355 | 97,624,416 | ||||||
Wacker Chemie AGb | 52,440 | 3,377,742 | ||||||
|
| |||||||
409,976,960 | ||||||||
COSMETICS & PERSONAL CARE — 0.87% |
| |||||||
Beiersdorf AG | 336,927 | 24,207,699 | ||||||
|
| |||||||
24,207,699 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 1.19% |
| |||||||
Deutsche Boerse AG | 645,449 | 33,300,175 | ||||||
|
| |||||||
33,300,175 | ||||||||
ELECTRIC — 7.41% |
| |||||||
E.ON AG | 6,017,053 | 138,682,493 | ||||||
RWE AG | 1,633,069 | 68,640,129 | ||||||
|
| |||||||
207,322,622 |
Security | Shares | Value | ||||||
ENGINEERING & CONSTRUCTION — 0.42% |
| |||||||
Fraport AG | 122,360 | $ | 6,831,829 | |||||
Hochtief AGa | 102,695 | 4,823,197 | ||||||
|
| |||||||
11,655,026 | ||||||||
FOOD — 0.73% |
| |||||||
METRO AG | 433,067 | 13,073,848 | ||||||
Suedzucker AG | 221,559 | 7,445,475 | ||||||
|
| |||||||
20,519,323 | ||||||||
HEALTH CARE — PRODUCTS — 2.09% |
| |||||||
Fresenius SE & Co. KGaA | 414,276 | 44,292,570 | ||||||
QIAGEN NVa | 783,541 | 14,118,505 | ||||||
|
| |||||||
58,411,075 | ||||||||
HEALTH CARE — SERVICES — 1.81% |
| |||||||
Fresenius Medical Care AG & Co. KGaA | 701,385 | 50,685,210 | ||||||
|
| |||||||
50,685,210 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 0.55% |
| |||||||
GEA Group AG | 583,832 | 15,454,325 | ||||||
|
| |||||||
15,454,325 | ||||||||
HOUSEHOLD PRODUCTS & WARES — 0.97% |
| |||||||
Henkel AG & Co. KGaA | 436,563 | 27,145,690 | ||||||
|
| |||||||
27,145,690 | ||||||||
INSURANCE — 9.60% |
| |||||||
Allianz SE Registered | 1,521,197 | 167,337,499 | ||||||
Hannover Rueckversicherung AG Registered | 201,894 | 12,360,452 | ||||||
Muenchener Rueckversicherungs-Gesellschaft AG Registered | 599,127 | 88,886,989 | ||||||
|
| |||||||
268,584,940 | ||||||||
INTERNET — 0.23% |
| |||||||
United Internet AG Registered | 324,254 | 6,578,383 | ||||||
|
| |||||||
6,578,383 | ||||||||
IRON & STEEL — 1.09% |
| |||||||
Salzgitter AG | 130,663 | 4,819,143 | ||||||
ThyssenKrupp AG | 1,288,713 | 25,730,855 | ||||||
|
| |||||||
30,549,998 | ||||||||
MACHINERY — 0.47% |
| |||||||
MAN SE | 141,151 | 13,055,831 | ||||||
|
| |||||||
13,055,831 | ||||||||
MANUFACTURING — 9.34% |
| |||||||
Siemens AG Registered | 2,749,167 | 261,354,805 | ||||||
|
| |||||||
261,354,805 |
48 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI GERMANY INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
MEDIA — 0.92% |
| |||||||
Axel Springer AG | 132,411 | $ | 6,036,920 | |||||
Kabel Deutschland Holding AGa | 296,286 | 19,681,790 | ||||||
|
| |||||||
25,718,710 | ||||||||
PHARMACEUTICALS — 8.75% |
| |||||||
Bayer AG Registered | 2,763,151 | 214,793,634 | ||||||
Celesio AG | 284,050 | 5,204,184 | ||||||
Merck KGaA | 215,878 | 24,746,066 | ||||||
|
| |||||||
244,743,884 | ||||||||
SEMICONDUCTORS — 0.90% |
| |||||||
Infineon Technologies AG | 3,633,655 | 25,168,320 | ||||||
|
| |||||||
25,168,320 | ||||||||
SOFTWARE — 7.27% |
| |||||||
SAP AG | 3,076,043 | 203,212,023 | ||||||
|
| |||||||
203,212,023 | ||||||||
TELECOMMUNICATIONS — 4.01% |
| |||||||
Deutsche Telekom AG Registered | 9,385,449 | 112,210,947 | ||||||
|
| |||||||
112,210,947 | ||||||||
TRANSPORTATION — 1.97% |
| |||||||
Deutsche Post AG Registered | 2,827,827 | 55,053,329 | ||||||
|
| |||||||
55,053,329 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $3,143,148,126) |
| 2,602,503,378 | ||||||
PREFERRED STOCKS — 6.36% |
| |||||||
AUTO MANUFACTURERS — 4.32% |
| |||||||
Bayerische Motoren Werke AG | 175,237 | 8,813,361 | ||||||
Porsche Automobil Holding SE | 511,727 | 26,510,809 | ||||||
Volkswagen AG | 483,322 | 85,535,522 | ||||||
|
| |||||||
120,859,692 | ||||||||
ELECTRIC — 0.18% |
| |||||||
RWE AG NVS | 132,848 | 5,016,112 | ||||||
|
| |||||||
5,016,112 | ||||||||
HOUSEHOLD PRODUCTS & WARES — 1.61% |
| |||||||
Henkel AG & Co. KGaA | 593,446 | 44,949,643 | ||||||
|
| |||||||
44,949,643 | ||||||||
MEDIA — 0.25% |
| |||||||
ProSiebenSat.1 Media AG | 292,790 | 7,069,378 | ||||||
|
| |||||||
7,069,378 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $181,557,481) |
| 177,894,825 |
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS — 0.09% |
| |||||||
MONEY MARKET FUNDS — 0.09% |
| |||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.23%c,d,e | 2,190,316 | $ | 2,190,316 | |||||
BlackRock Cash Funds: Prime, | ||||||||
0.23%c,d,e | 165,985 | 165,985 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%c,d | 33,936 | 33,936 | ||||||
|
| |||||||
2,390,237 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $2,390,237) |
| 2,390,237 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $3,327,095,844) |
| 2,782,788,440 | ||||||
Other Assets, Less Liabilities — 0.51% |
| 14,240,628 | ||||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 2,797,029,068 | |||||
|
|
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. |
Financial futures contracts purchased as of August 31, 2012 were as follows:
Number of Contracts | Issue (Expiration) | Exchange | Notional Value | Net Unrealized Appreciation (Depreciation) | ||||||||||
75 | DAX Index (Sept. 2012) | Eurex | $16,471,977 | $1,632,458 | ||||||||||
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 49 |
Table of Contents
Schedule of Investments
iSHARES® MSCI ITALY INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 100.04% |
| |||||||
AEROSPACE & DEFENSE — 0.99% |
| |||||||
Finmeccanica SpAa,b | 435,120 | $ | 1,934,998 | |||||
|
| |||||||
1,934,998 | ||||||||
AUTO MANUFACTURERS — 6.54% |
| |||||||
Fiat Industrial SpA | 806,748 | 8,140,331 | ||||||
Fiat SpAa | 859,362 | 4,692,534 | ||||||
|
| |||||||
12,832,865 | ||||||||
AUTO PARTS & EQUIPMENT — 1.38% |
| |||||||
Pirelli & C. SpA | 245,865 | 2,711,737 | ||||||
|
| |||||||
2,711,737 | ||||||||
BANKS — 18.50% |
| |||||||
Banca Monte dei Paschi di Siena SpAa,b | 7,346,757 | 2,074,371 | ||||||
Banco Popolare SpAa | 1,917,192 | 2,803,280 | ||||||
Intesa Sanpaolo SpA | 9,234,090 | 14,549,463 | ||||||
Intesa Sanpaolo SpA RNC | 1,136,862 | 1,448,778 | ||||||
Mediobanca SpA | 597,291 | 2,802,239 | ||||||
UniCredit SpAa | 2,393,049 | 9,495,747 | ||||||
Unione di Banche Italiane ScpA | 931,512 | 3,132,688 | ||||||
|
| |||||||
36,306,566 | ||||||||
COMMERCIAL SERVICES — 2.42% |
| |||||||
Atlantia SpA | 337,884 | 4,757,334 | ||||||
|
| |||||||
4,757,334 | ||||||||
ELECTRIC — 12.44% |
| |||||||
Enel SpA | 6,077,361 | 20,070,545 | ||||||
Terna SpA | 1,246,863 | 4,340,955 | ||||||
|
| |||||||
24,411,500 | ||||||||
ELECTRICAL COMPONENTS & EQUIPMENT —1.83% |
| |||||||
Prysmian SpA | 214,341 | 3,596,054 | ||||||
|
| |||||||
3,596,054 | ||||||||
ENERGY — ALTERNATE SOURCES — 1.53% |
| |||||||
Enel Green Power SpA | 1,816,182 | 2,992,112 | ||||||
|
| |||||||
2,992,112 | ||||||||
GAS — 3.41% |
| |||||||
Snam SpA | 1,588,632 | 6,696,262 | ||||||
|
| |||||||
6,696,262 | ||||||||
HEALTH CARE — PRODUCTS — 2.08% |
| |||||||
Luxottica Group SpA | 111,777 | 4,085,952 | ||||||
|
| |||||||
4,085,952 |
Security | Shares | Value | ||||||
HOLDING COMPANIES - DIVERSIFIED — 1.11% |
| |||||||
Exor SpA | 91,353 | $ | 2,186,707 | |||||
|
| |||||||
2,186,707 | ||||||||
INSURANCE — 7.99% |
| |||||||
Assicurazioni Generali SpA | 1,096,680 | 15,676,020 | ||||||
|
| |||||||
15,676,020 | ||||||||
MEDIA — 0.98% |
| |||||||
Mediaset SpA | 954,489 | 1,917,795 | ||||||
|
| |||||||
1,917,795 | ||||||||
METAL FABRICATE & HARDWARE — 4.86% |
| |||||||
Tenaris SA | 456,654 | 9,526,384 | ||||||
|
| |||||||
9,526,384 | ||||||||
OIL & GAS — 23.68% |
| |||||||
Eni SpA | 2,091,906 | 46,461,252 | ||||||
|
| |||||||
46,461,252 | ||||||||
OIL & GAS SERVICES — 4.86% |
| |||||||
Saipem SpA | 200,244 | 9,528,385 | ||||||
|
| |||||||
9,528,385 | ||||||||
RETAIL — 0.60% |
| |||||||
Autogrill SpA | 137,418 | 1,174,400 | ||||||
|
| |||||||
1,174,400 | ||||||||
TELECOMMUNICATIONS — 4.84% |
| |||||||
Telecom Italia SpA | 7,301,136 | 6,810,280 | ||||||
Telecom Italia SpA RNC | 3,376,620 | 2,679,296 | ||||||
|
| |||||||
9,489,576 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $248,748,451) | 196,285,899 | |||||||
SHORT-TERM INVESTMENTS — 1.68% |
| |||||||
MONEY MARKET FUNDS — 1.68% | ||||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.23%c,d,e | 3,056,449 | 3,056,449 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.23%c,d,e | 231,622 | 231,622 |
50 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI ITALY INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%c,d | 22,255 | $ | 22,255 | |||||
|
| |||||||
3,310,326 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS | ||||||||
(Cost: $3,310,326) | 3,310,326 | |||||||
|
| |||||||
TOTAL INVESTMENTS | 199,596,225 | |||||||
Other Assets, Less Liabilities — (1.72)% |
| (3,384,473 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 196,211,752 | |||||
|
|
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
Schedule of Investments
iSHARES® MSCI NETHERLANDS INVESTABLE MARKET INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 99.67% |
| |||||||
BANKS — 0.08% |
| |||||||
SNS REAAL NVa,b | 45,064 | $ | 64,926 | |||||
|
| |||||||
64,926 | ||||||||
BEVERAGES — 8.93% |
| |||||||
DE Master Blenders 1753 NVa | 166,926 | 1,970,281 | ||||||
Heineken Holding NV | 29,498 | 1,367,934 | ||||||
Heineken NV | 65,876 | 3,659,843 | ||||||
|
| |||||||
6,998,058 | ||||||||
CHEMICALS — 7.45% | ||||||||
Akzo Nobel NV | 64,672 | 3,735,203 | ||||||
Koninklijke DSM NV | 44,806 | 2,105,781 | ||||||
|
| |||||||
5,840,984 | ||||||||
COMMERCIAL SERVICES — 1.78% |
| |||||||
Brunel International NV | 2,494 | 109,055 | ||||||
Randstad Holding NV | 35,174 | 1,146,107 | ||||||
USG People NV | 18,662 | 137,518 | ||||||
|
| |||||||
1,392,680 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 0.21% |
| |||||||
BinckBank NV | 16,340 | 115,897 | ||||||
KAS Bank NV CVA | 5,504 | 49,730 | ||||||
|
| |||||||
165,627 | ||||||||
ELECTRICAL COMPONENTS & EQUIPMENT — 0.22% |
| |||||||
TKH Group NV | 8,514 | 174,393 | ||||||
|
| |||||||
174,393 | ||||||||
ELECTRONICS — 8.61% |
| |||||||
Koninklijke Philips Electronics NV | 292,830 | 6,747,371 | ||||||
|
| |||||||
6,747,371 | ||||||||
ENGINEERING & CONSTRUCTION — 2.28% |
| |||||||
Arcadis NV | 16,340 | 341,903 | ||||||
Grontmij NVa | 14,534 | 43,968 | ||||||
Koninklijke BAM Groep NV | 62,780 | 179,635 | ||||||
Royal Boskalis Westminster NV CVA | 20,382 | 690,331 | ||||||
Royal Imtech NV | 20,468 | 530,446 | ||||||
|
| |||||||
1,786,283 | ||||||||
FOOD — 27.09% |
| |||||||
Amsterdam Commodities NV | 3,526 | 54,268 | ||||||
CSM NV CVA | 20,382 | 344,266 | ||||||
Koninklijke Ahold NV | 287,412 | 3,561,240 | ||||||
Koninklijke Wessanen NV | 18,232 | 48,261 |
Security | Shares | Value | ||||||
Nutreco NV | 10,234 | $ | 749,746 | |||||
Sligro Food Group NV | 6,364 | 154,821 | ||||||
Unilever NV CVA | 467,066 | 16,325,668 | ||||||
|
| |||||||
21,238,270 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 0.40% |
| |||||||
Kardan NVa | 12,728 | 8,664 | ||||||
Tetragon Financial Group Ltd. | 38,012 | 304,856 | ||||||
|
| |||||||
313,520 | ||||||||
INSURANCE — 14.57% |
| |||||||
AEGON NV | 488,050 | 2,511,809 | ||||||
Delta Lloyd NV | 37,418 | 516,697 | ||||||
ING Groep NV CVAa | 1,094,436 | 8,390,341 | ||||||
|
| |||||||
11,418,847 | ||||||||
LEISURE TIME — 0.11% |
| |||||||
Accell Group NV | 4,902 | 83,787 | ||||||
|
| |||||||
83,787 | ||||||||
MACHINERY — 0.08% |
| |||||||
Kendrion NV | 3,182 | 61,788 | ||||||
|
| |||||||
61,788 | ||||||||
MANUFACTURING — 0.79% |
| |||||||
Aalberts Industries NV | 26,058 | 447,200 | ||||||
Koninklijke Ten Cate NV | 7,224 | 173,557 | ||||||
|
| |||||||
620,757 | ||||||||
MEDIA — 5.25% |
| |||||||
Reed Elsevier NV | 194,188 | 2,540,754 | ||||||
Wolters Kluwer NV | 87,204 | 1,571,865 | ||||||
|
| |||||||
4,112,619 | ||||||||
METAL FABRICATE & HARDWARE — 0.06% |
| |||||||
Advanced Metallurgical Group NVa | 6,536 | 48,690 | ||||||
|
| |||||||
48,690 | ||||||||
OIL & GAS SERVICES — 2.44% |
| |||||||
Fugro NV CVA | 19,780 | 1,205,994 | ||||||
SBM Offshore NVa | 49,880 | 706,701 | ||||||
|
| |||||||
1,912,695 | ||||||||
PHARMACEUTICALS — 0.22% |
| |||||||
Mediq NV | 14,792 | 174,837 | ||||||
|
| |||||||
174,837 | ||||||||
REAL ESTATE INVESTMENT TRUSTS — 2.36% |
| |||||||
Corio NV | 19,006 | 810,947 | ||||||
Eurocommercial Properties NV | 11,094 | 392,251 |
52 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI NETHERLANDS INVESTABLE MARKET INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Nieuwe Steen Investments NV | 12,470 | $ | 104,103 | |||||
VastNed Retail NV | 5,418 | 221,272 | ||||||
Wereldhave NV | 6,278 | 323,105 | ||||||
|
| |||||||
1,851,678 | ||||||||
RETAIL — 0.14% |
| |||||||
Beter Bed Holding NV | 6,278 | 112,924 | ||||||
|
| |||||||
112,924 | ||||||||
SEMICONDUCTORS — 9.34% |
| |||||||
ASM International NV | 12,040 | 424,940 | ||||||
ASML Holding NV | 119,798 | 6,800,527 | ||||||
BE Semiconductor Industries NV | 12,900 | 97,237 | ||||||
|
| |||||||
7,322,704 | ||||||||
SOFTWARE — 0.56% |
| |||||||
Exact Holding NV | 5,160 | 110,896 | ||||||
TomTom NVa,b | 26,574 | 116,903 | ||||||
Unit4 NV | 8,600 | 213,771 | ||||||
|
| |||||||
441,570 | ||||||||
TELECOMMUNICATIONS — 3.15% |
| |||||||
Koninklijke KPN NV | 287,498 | 2,471,508 | ||||||
|
| |||||||
2,471,508 | ||||||||
TRANSPORTATION — 3.55% |
| |||||||
PostNL NV | 121,346 | 435,773 | ||||||
Royal Vopak NV | 20,382 | 1,310,267 | ||||||
TNT Express NV | 91,762 | 1,035,442 | ||||||
|
| |||||||
2,781,482 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $109,156,225) |
| 78,137,998 | ||||||
WARRANTS — 0.00% |
| |||||||
REAL ESTATE INVESTMENT TRUSTS — 0.00% |
| |||||||
Nieuwe Steen Investments NV | 6,200 | 1 | ||||||
|
| |||||||
1 | ||||||||
|
| |||||||
TOTAL WARRANTS |
| |||||||
(Cost: $0) |
| 1 |
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS — 0.27% |
| |||||||
MONEY MARKET FUNDS — 0.27% |
| |||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.23%d,e,f | 135,184 | $ | 135,184 | |||||
BlackRock Cash Funds: Prime, | ||||||||
0.23%d,e,f | 10,244 | 10,244 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%d,e | 69,489 | 69,489 | ||||||
|
| |||||||
214,917 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $214,917) |
| 214,917 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $109,371,142) | 78,352,916 | |||||||
Other Assets, Less Liabilities — 0.06% |
| 43,625 | ||||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 78,396,541 | |||||
|
|
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 | 53 |
Table of Contents
Schedule of Investments
iSHARES® MSCI SPAIN INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 99.88% |
| |||||||
AIRLINES — 1.22% |
| |||||||
International Consolidated Airlines Group SAa | 1,066,527 | $ | 2,383,546 | |||||
|
| |||||||
2,383,546 | ||||||||
BANKS — 41.89% |
| |||||||
Banco Bilbao Vizcaya Argentaria SA | 2,742,795 | 20,996,140 | ||||||
Banco de Sabadell SA | 2,448,430 | 7,098,366 | ||||||
Banco Popular Espanol SAb | 1,583,505 | 3,618,762 | ||||||
Banco Santander SA | 6,076,759 | 43,430,808 | ||||||
Bankia SAa,b | 1,181,664 | 2,124,009 | ||||||
CaixaBank SAb | 1,166,090 | 4,456,605 | ||||||
|
| |||||||
81,724,690 | ||||||||
COMMERCIAL SERVICES — 3.00% |
| |||||||
Abertis Infraestructuras SA | 430,056 | 5,851,814 | ||||||
|
| |||||||
5,851,814 | ||||||||
ELECTRIC — 6.69% |
| |||||||
Iberdrola SA | 2,086,645 | 8,295,701 | ||||||
Red Electrica Corporacion SA | 109,395 | 4,746,256 | ||||||
|
| |||||||
13,041,957 | ||||||||
ENGINEERING & CONSTRUCTION — 5.46% |
| |||||||
Acciona SAb | 36,036 | 1,688,841 | ||||||
Actividades de Construcciones y Servicios SAb | 198,441 | 3,949,630 | ||||||
Ferrovial SA | 424,413 | 5,020,717 | ||||||
|
| |||||||
10,659,188 | ||||||||
FOOD — 1.69% |
| |||||||
Distribuidora Internacional de Alimentacion SA | 619,542 | 3,296,317 | ||||||
|
| |||||||
3,296,317 | ||||||||
GAS — 4.28% |
| |||||||
Enagas SA | 206,019 | 3,834,278 | ||||||
Gas Natural SDG SA | 366,102 | 4,525,190 | ||||||
|
| |||||||
8,359,468 | ||||||||
INSURANCE — 1.84% |
| |||||||
Mapfre SAb | 1,473,219 | 3,583,996 | ||||||
|
| |||||||
3,583,996 | ||||||||
IRON & STEEL — 0.94% |
| |||||||
Acerinox SAb | 170,082 | 1,825,303 | ||||||
|
| |||||||
1,825,303 |
Security | Shares | Value | ||||||
MACHINERY — 1.24% |
| |||||||
Zardoya Otis SA | 208,656 | $ | 2,422,330 | |||||
|
| |||||||
2,422,330 | ||||||||
OIL & GAS — 4.85% |
| |||||||
Repsol SA | 512,424 | 9,452,899 | ||||||
|
| |||||||
9,452,899 | ||||||||
PHARMACEUTICALS — 1.88% |
| |||||||
Grifols SAa | 129,789 | 3,664,618 | ||||||
|
| |||||||
3,664,618 | ||||||||
RETAIL — 4.84% |
| |||||||
Industria de Diseno Textil SA | 84,744 | 9,443,939 | ||||||
|
| |||||||
9,443,939 | ||||||||
SOFTWARE — 3.21% |
| |||||||
Amadeus IT Holding SA Class A | 279,675 | 6,260,939 | ||||||
|
| |||||||
6,260,939 | ||||||||
TELECOMMUNICATIONS — 16.85% |
| |||||||
Telefonica SA | 2,598,194 | 32,881,235 | ||||||
|
| |||||||
32,881,235 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $282,179,850) |
| 194,852,239 | ||||||
SHORT-TERM INVESTMENTS — 6.52% |
| |||||||
MONEY MARKET FUNDS — 6.52% |
| |||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.23%c,d,e | 11,750,256 | 11,750,256 | ||||||
BlackRock Cash Funds: Prime | ||||||||
0.23%c,d,e | 890,451 | 890,451 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%c,d | 84,884 | 84,884 | ||||||
|
| |||||||
12,725,591 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $12,725,591) |
| 12,725,591 | ||||||
|
|
54 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SPAIN INDEX FUND
August 31, 2012
Value | ||||||
TOTAL INVESTMENTS | ||||||
(Cost: $294,905,441) | $ | 207,577,830 | ||||
Other Assets, Less Liabilities — (6.40)% | (12,484,811 | ) | ||||
|
| |||||
NET ASSETS — 100.00% | $ | 195,093,019 | ||||
|
|
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
Schedule of Investments
iSHARES® MSCI SWEDEN INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 99.98% |
| |||||||
AGRICULTURE — 2.68% | ||||||||
Swedish Match AB | 239,282 | $ | 9,944,713 | |||||
|
| |||||||
9,944,713 | ||||||||
AUTO MANUFACTURERS — 7.24% | ||||||||
Scania AB Class B | 371,593 | 6,397,439 | ||||||
Volvo AB Class B | 1,613,977 | 20,462,176 | ||||||
|
| |||||||
26,859,615 | ||||||||
BANKS — 20.88% | ||||||||
Nordea Bank AB | 3,053,832 | 28,247,825 | ||||||
Skandinaviska Enskilda Banken AB Class A | 1,637,326 | 12,536,517 | ||||||
Svenska Handelsbanken AB Class A | 572,503 | 19,963,445 | ||||||
Swedbank AB Class A | 953,327 | 16,686,264 | ||||||
|
| |||||||
77,434,051 | ||||||||
COMMERCIAL SERVICES — 0.73% |
| |||||||
Securitas AB Class B | 363,629 | 2,710,613 | ||||||
|
| |||||||
2,710,613 | ||||||||
ENGINEERING & CONSTRUCTION — 1.83% |
| |||||||
Skanska AB Class B | 441,278 | 6,797,453 | ||||||
|
| |||||||
6,797,453 | ||||||||
FOREST PRODUCTS & PAPER — 3.67% | ||||||||
Holmen AB Class B | 61,359 | 1,584,558 | ||||||
Svenska Cellulosa AB Class B | 671,872 | 12,013,568 | ||||||
|
| |||||||
13,598,126 | ||||||||
HAND & MACHINE TOOLS — 4.20% | ||||||||
Sandvik AB | 1,163,830 | 15,572,454 | ||||||
|
| |||||||
15,572,454 | ||||||||
HEALTH CARE — PRODUCTS — 3.33% | ||||||||
Elekta AB Class B | 106,247 | 5,415,321 | ||||||
Getinge AB Class B | 232,404 | 6,924,756 | ||||||
|
| |||||||
12,340,077 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 5.29% |
| |||||||
Industrivarden AB Class C | 136,836 | 1,838,146 | ||||||
Investment AB Kinnevik Class B | 238,920 | 4,831,332 | ||||||
Investor AB Class B | 528,882 | 10,958,388 | ||||||
Ratos AB Class B | 222,811 | 1,997,060 | ||||||
|
| |||||||
19,624,926 | ||||||||
HOME FURNISHINGS — 1.82% | ||||||||
Electrolux AB Class B | 279,283 | 6,765,231 | ||||||
|
| |||||||
6,765,231 |
Security | Shares | Value | ||||||
HOUSEHOLD PRODUCTS & WARES — 0.61% |
| |||||||
Husqvarna AB Class B | 467,704 | $ | 2,242,583 | |||||
|
| |||||||
2,242,583 | ||||||||
IRON & STEEL — 0.37% | ||||||||
SSAB AB Class A | 181,724 | 1,373,568 | ||||||
|
| |||||||
1,373,568 | ||||||||
MACHINERY — 8.61% | ||||||||
Atlas Copco AB Class A | 777,938 | 17,411,130 | ||||||
Atlas Copco AB Class B | 454,129 | 8,998,018 | ||||||
Hexagon AB Class B | 274,939 | 5,522,323 | ||||||
|
| |||||||
31,931,471 | ||||||||
MANUFACTURING — 1.80% | ||||||||
Alfa Laval AB | 389,693 | 6,673,742 | ||||||
|
| |||||||
6,673,742 | ||||||||
MEDIA — 0.65% | ||||||||
Modern Times Group MTG AB Class B | 53,033 | 2,422,732 | ||||||
|
| |||||||
2,422,732 | ||||||||
METAL FABRICATE & HARDWARE — 5.73% |
| |||||||
Assa Abloy AB Class B | 384,444 | 11,756,875 | ||||||
SKF AB Class B | 455,215 | 9,473,262 | ||||||
|
| |||||||
21,230,137 | ||||||||
MINING — 1.26% | ||||||||
Boliden AB | 317,474 | 4,665,034 | ||||||
|
| |||||||
4,665,034 | ||||||||
OIL & GAS — 1.57% | ||||||||
Lundin Petroleum ABa | 258,468 | 5,835,550 | ||||||
|
| |||||||
5,835,550 | ||||||||
RETAIL — 10.75% | ||||||||
Hennes & Mauritz AB Class B | 1,101,566 | 39,859,433 | ||||||
|
| |||||||
39,859,433 | ||||||||
TELECOMMUNICATIONS — 16.96% | ||||||||
Millicom International Cellular SA SDR | 73,305 | 6,310,187 | ||||||
Tele2 AB Class B | 369,059 | 6,493,151 | ||||||
Telefonaktiebolaget LM Ericsson Class B | 3,494,024 | 32,715,333 | ||||||
TeliaSonera AB | 2,510,832 | 17,355,309 | ||||||
|
| |||||||
62,873,980 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $421,853,313) | 370,755,489 |
56 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SWEDEN INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS — 0.01% |
| |||||||
MONEY MARKET FUNDS — 0.01% | ||||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%b,c | 28,285 | $ | 28,285 | |||||
|
| |||||||
28,285 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $28,285) |
| 28,285 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $421,881,598) |
| 370,783,774 | ||||||
Other Assets, Less Liabilities — 0.01% |
| 48,609 | ||||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 370,832,383 | |||||
|
|
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 | 57 |
Table of Contents
Schedule of Investments
iSHARES® MSCI SWITZERLAND INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 99.10% |
| |||||||
BANKS — 8.15% | ||||||||
Banque Cantonale Vaudoise Registered | 4,092 | $ | 2,175,727 | |||||
Credit Suisse Group AG Registered | 736,374 | 14,254,395 | ||||||
Julius Baer Group Ltd.a | 135,594 | 4,465,236 | ||||||
UBS AG Registereda | 2,168,946 | 24,316,968 | ||||||
|
| |||||||
45,212,326 | ||||||||
BUILDING MATERIALS — 3.10% | ||||||||
Geberit AG Registereda | 27,714 | 5,856,422 | ||||||
Holcim Ltd. Registereda | 148,986 | 9,157,181 | ||||||
Sika AG Bearer | 1,116 | 2,161,474 | ||||||
|
| |||||||
17,175,077 | ||||||||
CHEMICALS — 5.46% | ||||||||
Givaudan SA Registereda | 7,068 | 6,685,144 | ||||||
Lonza Group AG Registereda | 44,640 | 2,071,734 | ||||||
Syngenta AG Registered | 63,612 | 21,495,594 | ||||||
|
| |||||||
30,252,472 | ||||||||
COMMERCIAL SERVICES — 2.32% | ||||||||
Adecco SA Registereda | 85,002 | 3,863,727 | ||||||
SGS SA Registered | 4,464 | 9,025,472 | ||||||
|
| |||||||
12,889,199 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 0.77% |
| |||||||
GAM Holding AGa | 117,924 | 1,398,846 | ||||||
Partners Group Holding AG | 14,880 | 2,871,031 | ||||||
|
| |||||||
4,269,877 | ||||||||
ENGINEERING & CONSTRUCTION — 4.28% |
| |||||||
ABB Ltd. Registereda | 1,361,148 | 23,733,643 | ||||||
|
| |||||||
23,733,643 | ||||||||
FOOD — 24.79% | ||||||||
Aryzta AGa | 92,256 | 4,546,944 | ||||||
Barry Callebaut AG Registereda | 2,976 | 2,822,608 | ||||||
Lindt & Spruengli AG Participation Certificatesa | 744 | 2,323,536 | ||||||
Lindt & Spruengli AG Registereda | 186 | 6,744,111 | ||||||
Nestle SA Registered | 1,942,398 | 121,017,553 | ||||||
|
| |||||||
137,454,752 | ||||||||
HAND & MACHINE TOOLS — 1.25% | ||||||||
Schindler Holding AG Participation Certificates | 37,014 | 4,371,273 | ||||||
Schindler Holding AG Registered | 21,762 | 2,574,614 | ||||||
|
| |||||||
6,945,887 |
Security | Shares | Value | ||||||
HEALTH CARE — PRODUCTS — 0.80% | ||||||||
Sonova Holding AG Registereda | 37,758 | $ | 3,507,855 | |||||
Straumann Holding AG Registered | 7,812 | 930,781 | ||||||
|
| |||||||
4,438,636 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 0.43% |
| |||||||
Pargesa Holding SA Bearer | 37,386 | 2,382,249 | ||||||
|
| |||||||
2,382,249 | ||||||||
INSURANCE — 8.04% | ||||||||
Baloise Holding AG Registered | 40,362 | 2,976,517 | ||||||
Swiss Life Holding AG Registereda | 21,576 | 2,455,216 | ||||||
Swiss Re AGa | 237,336 | 14,911,358 | ||||||
Zurich Insurance Group AGa | 100,626 | 24,242,775 | ||||||
|
| |||||||
44,585,866 | ||||||||
MANUFACTURING — 0.34% | ||||||||
Sulzer AG Registered | 13,950 | 1,890,557 | ||||||
|
| |||||||
1,890,557 | ||||||||
OIL & GAS — 1.89% | ||||||||
Transocean Ltd. | 216,318 | 10,491,173 | ||||||
|
| |||||||
10,491,173 | ||||||||
PHARMACEUTICALS — 28.15% | ||||||||
Actelion Ltd. Registereda | 81,654 | 3,867,550 | ||||||
Novartis AG Registered | 1,314,276 | 77,606,577 | ||||||
Roche Holding AG Genusschein | 409,014 | 74,623,801 | ||||||
|
| |||||||
156,097,928 | ||||||||
REAL ESTATE — 1.00% | ||||||||
Swiss Prime Site AG Registereda | 67,146 | 5,536,761 | ||||||
|
| |||||||
5,536,761 | ||||||||
RETAIL — 5.55% | ||||||||
Compagnie Financiere Richemont SA Class A Bearer | 334,800 | 20,577,934 | ||||||
Swatch Group AG (The) Bearer | 19,716 | 8,088,403 | ||||||
Swatch Group AG (The) Registered | 29,760 | 2,107,193 | ||||||
|
| |||||||
30,773,530 | ||||||||
TELECOMMUNICATIONS — 2.01% | ||||||||
Swisscom AG Registered | 27,714 | 11,154,260 | ||||||
|
| |||||||
11,154,260 | ||||||||
TRANSPORTATION — 0.77% | ||||||||
Kuehne & Nagel International AG Registered | 37,572 | 4,287,294 | ||||||
|
| |||||||
4,287,294 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $549,191,468) | 549,571,487 |
58 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SWITZERLAND INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS — 0.02% |
| |||||||
MONEY MARKET FUNDS — 0.02% | ||||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%b,c | 133,871 | $ | 133,871 | |||||
|
| |||||||
133,871 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS | ||||||||
(Cost: $133,871) | 133,871 | |||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $549,325,339) | 549,705,358 | |||||||
Other Assets, Less Liabilities — 0.88% | 4,864,356 | |||||||
|
| |||||||
NET ASSETS — 100.00% | $ | 554,569,714 | ||||||
|
|
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 | 59 |
Table of Contents
Schedule of Investments
iSHARES® MSCI UNITED KINGDOM INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 99.11% |
| |||||||
ADVERTISING — 0.69% |
| |||||||
WPP PLC | 725,409 | $ | 9,390,460 | |||||
|
| |||||||
9,390,460 | ||||||||
AEROSPACE & DEFENSE — 2.10% |
| |||||||
BAE Systems PLC | 1,869,462 | 9,457,414 | ||||||
Cobham PLC | 622,352 | 2,167,809 | ||||||
Meggitt PLC | 451,526 | 2,834,301 | ||||||
Rolls-Royce Holdings PLCa | 1,078,289 | 14,061,274 | ||||||
|
| |||||||
28,520,798 | ||||||||
AGRICULTURE — 6.00% |
| |||||||
British American Tobacco PLC | 1,126,409 | 59,068,199 | ||||||
Imperial Tobacco Group PLC | 573,430 | 22,369,439 | ||||||
|
| |||||||
81,437,638 | ||||||||
APPAREL — 0.40% |
| |||||||
Burberry Group PLC | 252,630 | 5,429,115 | ||||||
|
| |||||||
5,429,115 | ||||||||
AUTO PARTS & EQUIPMENT — 0.22% |
| |||||||
GKN PLC | 892,626 | 3,027,009 | ||||||
|
| |||||||
3,027,009 | ||||||||
BANKS — 11.65% |
| |||||||
Barclays PLC | 6,689,883 | 19,471,922 | ||||||
HSBC Holdings PLC | 10,458,481 | 90,882,789 | ||||||
Lloyds Banking Group PLCa | 24,304,209 | 12,858,859 | ||||||
Royal Bank of Scotland Group PLCa | 1,199,391 | 4,311,135 | ||||||
Standard Chartered PLC | 1,377,034 | 30,435,062 | ||||||
|
| |||||||
157,959,767 | ||||||||
BEVERAGES — 4.71% |
| |||||||
Diageo PLC | 1,442,798 | 39,531,287 | ||||||
SABMiller PLC | 550,172 | 24,289,103 | ||||||
|
| |||||||
63,820,390 | ||||||||
CHEMICALS — 0.55% |
| |||||||
Croda International PLC | 77,794 | 2,911,171 | ||||||
Johnson Matthey PLC | 117,894 | 4,496,040 | ||||||
|
| |||||||
7,407,211 | ||||||||
COMMERCIAL SERVICES — 2.64% |
| |||||||
Aggreko PLC | 154,385 | 5,787,133 | ||||||
Babcock International Group PLC | 206,114 | 3,067,562 | ||||||
Bunzl PLC | 190,074 | 3,393,402 | ||||||
Capita PLC | 375,336 | 4,304,312 |
Security | Shares | Value | ||||||
Experian PLC | 580,648 | $ | 9,259,616 | |||||
G4S PLC | 810,421 | 3,256,698 | ||||||
Intertek Group PLC | 92,230 | 4,123,794 | ||||||
Serco Group PLC | 285,913 | 2,554,481 | ||||||
|
| |||||||
35,746,998 | ||||||||
DISTRIBUTION & WHOLESALE — 0.49% |
| |||||||
Wolseley PLC | 164,410 | 6,638,196 | ||||||
|
| |||||||
6,638,196 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 1.28% |
| |||||||
Aberdeen Asset Management PLC | 494,032 | 2,186,948 | ||||||
ICAP PLC | 315,186 | 1,590,488 | ||||||
Investec PLC | 310,775 | 1,853,048 | ||||||
London Stock Exchange Group PLC | 101,854 | 1,607,283 | ||||||
Man Group PLC | 1,057,838 | 1,197,995 | ||||||
Old Mutual PLC | 2,802,188 | 7,406,225 | ||||||
Schroders PLC | 65,363 | 1,475,273 | ||||||
|
| |||||||
17,317,260 | ||||||||
ELECTRIC — 0.87% |
| |||||||
SSE PLC | 544,157 | 11,823,788 | ||||||
|
| |||||||
11,823,788 | ||||||||
ENGINEERING & CONSTRUCTION — 0.13% |
| |||||||
Balfour Beatty PLC | 395,787 | 1,762,730 | ||||||
|
| |||||||
1,762,730 | ||||||||
FOOD — 5.02% |
| |||||||
Associated British Foods PLC | 204,911 | 4,309,229 | ||||||
J Sainsbury PLC | 705,359 | 3,670,290 | ||||||
Tate & Lyle PLC | 267,868 | 2,791,072 | ||||||
Tesco PLC | 4,629,144 | 24,749,197 | ||||||
Unilever PLC | 739,444 | 26,590,594 | ||||||
Wm Morrison Supermarkets PLC | 1,346,959 | 5,990,440 | ||||||
|
| |||||||
68,100,822 | ||||||||
FOOD SERVICE — 0.90% |
| |||||||
Compass Group PLC | 1,081,898 | 12,183,691 | ||||||
|
| |||||||
12,183,691 | ||||||||
GAS — 2.79% |
| |||||||
Centrica PLC | 2,985,445 | 15,491,894 | ||||||
National Grid PLC | 2,055,526 | 22,315,561 | ||||||
|
| |||||||
37,807,455 | ||||||||
HEALTH CARE — PRODUCTS — 0.40% |
| |||||||
Smith & Nephew PLC | 515,285 | 5,459,082 | ||||||
|
| |||||||
5,459,082 |
60 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI UNITED KINGDOM INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
HOUSEHOLD PRODUCTS & WARES — 1.56% |
| |||||||
Reckitt Benckiser Group PLC | 374,935 | $ | 21,200,802 | |||||
|
| |||||||
21,200,802 | ||||||||
INSURANCE — 3.56% |
| |||||||
Admiral Group PLC | 117,894 | 2,220,868 | ||||||
Aviva PLC | 1,681,794 | 8,711,038 | ||||||
Legal & General Group PLC | 3,380,831 | 6,873,529 | ||||||
Prudential PLC | 1,469,264 | 18,366,267 | ||||||
Resolution Ltd. | 798,792 | 2,737,987 | ||||||
RSA Insurance Group PLC | 2,042,293 | 3,698,020 | ||||||
Standard Life PLC | 1,359,791 | 5,730,014 | ||||||
|
| |||||||
48,337,723 | ||||||||
IRON & STEEL — 0.05% |
| |||||||
Evraz PLC | 193,282 | 690,749 | ||||||
|
| |||||||
690,749 | ||||||||
LEISURE TIME — 0.33% |
| |||||||
Carnival PLC | 104,661 | 3,589,086 | ||||||
TUI Travel PLC | 258,244 | 868,355 | ||||||
|
| |||||||
4,457,441 | ||||||||
LODGING — 0.57% |
| |||||||
InterContinental Hotels Group PLC | 167,217 | 4,262,867 | ||||||
Whitbread PLC | 102,255 | 3,459,477 | ||||||
|
| |||||||
7,722,344 | ||||||||
MACHINERY — 0.24% |
| |||||||
Weir Group PLC (The) | 122,706 | 3,182,719 | ||||||
|
| |||||||
3,182,719 | ||||||||
MANUFACTURING — 0.79% |
| |||||||
IMI PLC | 185,262 | 2,530,645 | ||||||
Invensys PLC | 466,764 | 1,790,444 | ||||||
Melrose PLC | 691,725 | 2,600,627 | ||||||
Smiths Group PLC | 226,966 | 3,767,241 | ||||||
|
| |||||||
10,688,957 | ||||||||
MEDIA — 1.91% |
| |||||||
British Sky Broadcasting Group PLC | 630,372 | 7,619,525 | ||||||
ITV PLC | 2,125,300 | 2,811,976 | ||||||
Pearson PLC | 469,972 | 8,920,438 | ||||||
Reed Elsevier PLC | 700,948 | 6,574,338 | ||||||
|
| |||||||
25,926,277 | ||||||||
MINING — 10.18% |
| |||||||
Anglo American PLC | 800,396 | 22,247,913 | ||||||
Antofagasta PLC | 226,164 | 3,976,650 |
Security | Shares | Value | ||||||
BHP Billiton PLC | 1,216,233 | $ | 35,467,925 | |||||
Eurasian Natural Resources Corp. | 150,375 | 721,083 | ||||||
Fresnillo PLC | 102,656 | 2,545,268 | ||||||
Glencore International PLCb | 2,192,668 | 13,410,233 | ||||||
Kazakhmys PLC | 120,300 | 1,133,096 | ||||||
Lonmin PLC | 94,235 | 857,656 | ||||||
Randgold Resources Ltd. | 50,125 | 5,031,735 | ||||||
Rio Tinto PLC | 771,925 | 33,539,620 | ||||||
Vedanta Resources PLC | 62,155 | 856,430 | ||||||
Xstrata PLC | 1,210,218 | 18,303,667 | ||||||
|
| |||||||
138,091,276 | ||||||||
OIL & GAS — 18.99% |
| |||||||
BG Group PLC | 1,956,078 | 40,017,352 | ||||||
BP PLC | 10,956,122 | 76,804,437 | ||||||
Royal Dutch Shell PLC Class A | 2,124,899 | 74,386,856 | ||||||
Royal Dutch Shell PLC Class B | 1,526,206 | 55,064,565 | ||||||
Tullow Oil PLC | 522,102 | 11,303,099 | ||||||
|
| |||||||
257,576,309 | ||||||||
OIL & GAS SERVICES — 0.50% |
| |||||||
AMEC PLC | 186,064 | 3,277,481 | ||||||
Petrofac Ltd. | 148,771 | 3,549,233 | ||||||
|
| |||||||
6,826,714 | ||||||||
PACKAGING & CONTAINERS — 0.25% |
| |||||||
Rexam PLC | 503,656 | 3,390,325 | ||||||
|
| |||||||
3,390,325 | ||||||||
PHARMACEUTICALS — 8.05% |
| |||||||
AstraZeneca PLC | 727,815 | 33,946,681 | ||||||
GlaxoSmithKline PLC | 2,888,804 | 65,385,170 | ||||||
Shire PLC | 324,008 | 9,860,469 | ||||||
|
| |||||||
109,192,320 | ||||||||
REAL ESTATE INVESTMENT TRUSTS — 1.19% |
| |||||||
British Land Co. PLC | 486,814 | 4,171,583 | ||||||
Capital Shopping Centres Group PLC | 321,201 | 1,723,387 | ||||||
Hammerson PLC | 412,228 | 2,992,265 | ||||||
Land Securities Group PLC | 449,120 | 5,642,677 | ||||||
SEGRO PLC | 427,065 | 1,570,331 | ||||||
|
| |||||||
16,100,243 | ||||||||
RETAIL — 1.23% | ||||||||
Kingfisher PLC | 1,364,202 | 5,971,786 | ||||||
Marks & Spencer Group PLC | 927,112 | 5,268,887 | ||||||
Next PLC | 95,438 | 5,419,306 | ||||||
|
| |||||||
16,659,979 |
SCHEDULESOF INVESTMENTS | 61 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI UNITED KINGDOM INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
SEMICONDUCTORS — 0.53% |
| |||||||
ARM Holdings PLC | 792,777 | $ | 7,227,852 | |||||
|
| |||||||
7,227,852 | ||||||||
SOFTWARE — 0.25% |
| |||||||
Sage Group PLC (The) | 731,023 | 3,439,239 | ||||||
|
| |||||||
3,439,239 | ||||||||
TELECOMMUNICATIONS — 7.36% |
| |||||||
BT Group PLC | 4,494,408 | 15,533,800 | ||||||
Inmarsat PLC | 259,046 | 2,355,585 | ||||||
Vodafone Group PLC | 28,420,073 | 81,930,977 | ||||||
|
| |||||||
99,820,362 | ||||||||
VENTURE CAPITAL — 0.13% |
| |||||||
3i Group PLC | 556,187 | 1,817,195 | ||||||
|
| |||||||
1,817,195 | ||||||||
WATER — 0.60% |
| |||||||
Severn Trent PLC | 137,543 | 3,781,655 | ||||||
United Utilities Group PLC | 391,777 | 4,411,959 | ||||||
|
| |||||||
8,193,614 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $1,449,809,142) |
| 1,344,374,850 | ||||||
SHORT-TERM INVESTMENTS — 0.20% |
| |||||||
MONEY MARKET FUNDS — 0.20% |
| |||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.23%c,d,e | 190,805 | 190,805 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.23%c,d,e | 2,517,835 | 2,517,835 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%c,d | 50,472 | 50,472 | ||||||
|
| |||||||
2,759,112 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $2,759,112) |
| 2,759,112 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $1,452,568,254) | 1,347,133,962 | |||||||
Other Assets, Less Liabilities — 0.69% |
| 9,360,137 | ||||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 1,356,494,099 | |||||
|
|
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. |
Financial futures contracts purchased as of August 31, 2012 were as follows:
Number of Contracts | Issue (Expiration) | Exchange | Notional Value | Net Unrealized Appreciation (Depreciation) | ||||||||||
134 | FTSE 100 Index (Sept. 2012) | NYSE Liffe London | $12,128,628 | $33,022 | ||||||||||
See notes to financial statements.
62 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Assets and Liabilities
iSHARES®, INC.
August 31, 2012
iShares MSCI Austria Investable Market Index Fund | iShares MSCI Belgium Investable Market Index Fund | iShares MSCI Emerging Markets Eastern Europe Index Fund | ||||||||||
ASSETS | ||||||||||||
Investments, at cost: | ||||||||||||
Unaffiliated | $ | 108,484,140 | $ | 41,994,533 | $ | 28,090,118 | ||||||
Affiliated (Note 2) | 156,421 | 372,541 | 319,344 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments | $ | 108,640,561 | $ | 42,367,074 | $ | 28,409,462 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 53,153,660 | $ | 25,231,233 | $ | 20,209,320 | ||||||
Affiliated (Note 2) | 156,421 | 372,541 | 319,344 | |||||||||
|
|
|
|
|
| |||||||
Total fair value of investments | 53,310,081 | 25,603,774 | 20,528,664 | |||||||||
Foreign currencies, at valueb | 38,560 | 105,087 | 3,051 | |||||||||
Cash | — | — | 2,200 | |||||||||
Receivables: | ||||||||||||
Investment securities sold | 1,768,684 | 1,018,563 | 89,866 | |||||||||
Dividends and interest | 586,381 | 49,086 | 84,666 | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 55,703,706 | 26,776,510 | 20,708,447 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 1,770,189 | 1,016,745 | 94,462 | |||||||||
Collateral for securities on loan (Note 5) | 152,100 | 362,671 | — | |||||||||
Investment advisory fees (Note 2) | 24,301 | 11,141 | 11,979 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 1,946,590 | 1,390,557 | 106,441 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 53,757,116 | $ | 25,385,953 | $ | 20,602,006 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 174,308,054 | $ | 85,789,836 | $ | 29,713,196 | ||||||
Undistributed (distributions in excess of) net investment income | (273 | ) | (4,077 | ) | 75,982 | |||||||
Accumulated net realized loss | (65,167,540 | ) | (43,634,642 | ) | (1,306,629 | ) | ||||||
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies | (55,383,125 | ) | (16,765,164 | ) | (7,880,543 | ) | ||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 53,757,116 | $ | 25,385,953 | $ | 20,602,006 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingc | 3,700,000 | 2,120,000 | 850,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 14.53 | $ | 11.97 | $ | 24.24 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $148,404, $347,691 and $ —, respectively. See Note 5. |
b | Cost of foreign currencies: $37,863, $104,432 and $3,032, respectively. |
c | $0.001 par value, number of shares authorized: 100 million, 136.2 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, 2012
iShares MSCI EMU Index Fund | iShares MSCI France Index Fund | iShares MSCI Germany Index Fund | ||||||||||
ASSETS | ||||||||||||
Investments, at cost: | ||||||||||||
Unaffiliated | $ | 1,190,508,802 | $ | 516,923,238 | $ | 3,324,705,607 | ||||||
Affiliated (Note 2) | 8,288,454 | 10,099 | 2,390,237 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments | $ | 1,198,797,256 | $ | 516,933,337 | $ | 3,327,095,844 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 792,214,235 | $ | 401,326,745 | $ | 2,780,398,203 | ||||||
Affiliated (Note 2) | 8,288,454 | 10,099 | 2,390,237 | |||||||||
|
|
|
|
|
| |||||||
Total fair value of investments | 800,502,689 | 401,336,844 | 2,782,788,440 | |||||||||
Foreign currencies, at valueb | 563,582 | 371,154 | 1,037,932 | |||||||||
Cash held at broker, at valuec | — | — | 1,133,039 | |||||||||
Receivables: | ||||||||||||
Investment securities sold | 4,724,924 | 1,429,640 | 2,003,337 | |||||||||
Due from custodian (Note 4) | 486,840 | — | — | |||||||||
Dividends and interest | 1,184,359 | 89,157 | 14,160,719 | |||||||||
Capital shares sold | 53,209 | — | — | |||||||||
Futures variation margin | — | — | 1,632,458 | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 807,515,603 | 403,226,795 | 2,802,755,925 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 5,281,471 | 1,421,100 | 2,034,468 | |||||||||
Collateral for securities on loan (Note 5) | 7,689,440 | — | 2,356,301 | |||||||||
Capital shares redeemed | — | — | 75,065 | |||||||||
Investment advisory fees (Note 2) | 318,685 | 180,193 | 1,261,023 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 13,289,596 | 1,601,293 | 5,726,857 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 794,226,007 | $ | 401,625,502 | $ | 2,797,029,068 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 1,381,114,933 | $ | 544,501,949 | $ | 3,532,707,199 | ||||||
Undistributed (distributions in excess of) net investment income | 941,872 | (48,128 | ) | — | ||||||||
Accumulated net realized loss | (189,521,855 | ) | (27,243,868 | ) | (192,143,841 | ) | ||||||
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies | (398,308,943 | ) | (115,584,451 | ) | (543,534,290 | ) | ||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 794,226,007 | $ | 401,625,502 | $ | 2,797,029,068 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingd | 27,300,000 | 19,400,000 | 131,100,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 29.09 | $ | 20.70 | $ | 21.34 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $7,624,222, $ — and $2,258,527, respectively. See Note 5. |
b | Cost of foreign currencies: $552,788, $359,635 and $970,707, respectively. |
c | Cost of cash held at broker: $ —, $ — and $1,140,385, respectively. |
d | $0.001 par value, number of shares authorized: 1 billion, 340.2 million and 382.2 million, respectively. |
See notes to financial statements.
64 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Assets and Liabilities (Continued)
iSHARES®, INC.
August 31, 2012
iShares MSCI Italy Index Fund | iShares MSCI Netherlands Investable Market Index Fund | iShares MSCI Spain Index Fund | ||||||||||
ASSETS | ||||||||||||
Investments, at cost: | ||||||||||||
Unaffiliated | $ | 248,748,451 | $ | 109,156,225 | $ | 282,179,850 | ||||||
Affiliated (Note 2) | 3,310,326 | 214,917 | 12,725,591 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments | $ | 252,058,777 | $ | 109,371,142 | $ | 294,905,441 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 196,285,899 | $ | 78,137,999 | $ | 194,852,239 | ||||||
Affiliated (Note 2) | 3,310,326 | 214,917 | 12,725,591 | |||||||||
|
|
|
|
|
| |||||||
Total fair value of investments | 199,596,225 | 78,352,916 | 207,577,830 | |||||||||
Foreign currencies, at valueb | 102,309 | 66,271 | 128,006 | |||||||||
Receivables: | ||||||||||||
Investment securities sold | 7,946,655 | 143,285 | 647,981 | |||||||||
Due from custodian (Note 4) | — | — | 93,562 | |||||||||
Dividends and interest | 1,060 | 174,413 | 111,751 | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 207,646,249 | 78,736,885 | 208,559,130 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 8,067,696 | 165,919 | 743,283 | |||||||||
Collateral for securities on loan (Note 5) | 3,288,071 | 145,428 | 12,640,707 | |||||||||
Investment advisory fees (Note 2) | 78,730 | 28,997 | 82,121 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 11,434,497 | 340,344 | 13,466,111 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 196,211,752 | $ | 78,396,541 | $ | 195,093,019 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 316,610,533 | $ | 149,640,824 | $ | 339,717,762 | ||||||
Undistributed (distributions in excess of) net investment income | (61,840 | ) | 159,212 | 2,782,477 | ||||||||
Accumulated net realized loss | (67,876,200 | ) | (40,388,690 | ) | (60,082,322 | ) | ||||||
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies | (52,460,741 | ) | (31,014,805 | ) | (87,324,898 | ) | ||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 196,211,752 | $ | 78,396,541 | $ | 195,093,019 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingc | 16,650,000 | 4,300,000 | 7,425,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 11.78 | $ | 18.23 | $ | 26.28 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $3,252,697, $139,245 and $12,371,323, respectively. See Note 5. |
b | Cost of foreign currencies: $100,497, $65,736 and $125,111, respectively. |
c | $0.001 par value, number of shares authorized: 63.6 million, 255 million and 127.8 million, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 65 |
Table of Contents
Statements of Assets and Liabilities (Continued)
iSHARES®, INC.
August 31, 2012
iShares MSCI Sweden Index Fund | iShares MSCI Switzerland Index Fund | iShares MSCI United Kingdom Index Fund | ||||||||||
ASSETS | ||||||||||||
Investments, at cost: | ||||||||||||
Unaffiliated | $ | 421,853,313 | $ | 549,191,468 | $ | 1,449,809,142 | ||||||
Affiliated (Note 2) | 28,285 | 133,871 | 2,759,112 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments | $ | 421,881,598 | $ | 549,325,339 | $ | 1,452,568,254 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 370,755,489 | $ | 549,571,487 | $ | 1,344,374,850 | ||||||
Affiliated (Note 2) | 28,285 | 133,871 | 2,759,112 | |||||||||
|
|
|
|
|
| |||||||
Total fair value of investments | 370,783,774 | 549,705,358 | 1,347,133,962 | |||||||||
Foreign currencies, at valueb | 206,237 | 12,946 | 3,595,115 | |||||||||
Cash held at broker, at valuec | — | — | 1,433,305 | |||||||||
Receivables: | ||||||||||||
Investment securities sold | 338,681 | 13,926,436 | 8,100,339 | |||||||||
Dividends and interest | 375 | 4,874,140 | 9,755,024 | |||||||||
Futures variation margin | — | — | 33,022 | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 371,329,067 | 568,518,880 | 1,370,050,767 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 333,891 | 13,680,371 | 10,240,503 | |||||||||
Collateral for securities on loan (Note 5) | — | — | 2,708,640 | |||||||||
Capital shares redeemed | — | 25,364 | — | |||||||||
Investment advisory fees (Note 2) | 162,793 | 243,431 | 607,525 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 496,684 | 13,949,166 | 13,556,668 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 370,832,383 | $ | 554,569,714 | $ | 1,356,494,099 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 463,321,582 | $ | 606,634,949 | $ | 1,608,102,724 | ||||||
Undistributed (distributions in excess of) net investment income | (43,823 | ) | (89,854 | ) | 9,541,575 | |||||||
Accumulated net realized loss | (41,351,767 | ) | (52,368,927 | ) | (155,893,106 | ) | ||||||
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies | (51,093,609 | ) | 393,546 | (105,257,094 | ) | |||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 370,832,383 | $ | 554,569,714 | $ | 1,356,494,099 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingd | 13,575,000 | 23,250,000 | 80,200,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 27.32 | $ | 23.85 | $ | 16.91 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $ —, $ — and $2,788,870, respectively. See Note 5. |
b | Cost of foreign currencies: $202,023, $12,631 and $3,561,819, respectively. |
c | Cost of cash held at broker: $ —, $ — and $1,400,620, respectively. |
d | $0.001 par value, number of shares authorized: 63.6 million, 318.625 million and 934.2 million, respectively. |
See notes to financial statements.
66 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Operations
iSHARES®, INC.
Year ended August 31, 2012
iShares MSCI Austria Investable Market Index Fund | iShares MSCI Belgium Investable Market Index Fund | iShares MSCI Emerging Markets Eastern Europe Index Fund | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliateda | $ | 1,798,633 | $ | 954,251 | $ | 1,160,069 | ||||||
Interest — unaffiliated | 5,425 | — | — | |||||||||
Interest — affiliated (Note 2) | 23 | 12 | 22 | |||||||||
Securities lending income — affiliated (Note 2) | 95,248 | 19,268 | 237 | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 1,899,329 | 973,531 | 1,160,328 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 350,168 | 131,854 | 171,465 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 350,168 | 131,854 | 171,465 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 1,549,161 | 841,677 | 988,863 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | (13,167,058 | ) | (2,557,621 | ) | (1,216,662 | ) | ||||||
In-kind redemptions — unaffiliated | (27,783,959 | ) | (1,264,952 | ) | (2,682,504 | ) | ||||||
Foreign currency transactions | (22,611 | ) | (122,664 | ) | (42,971 | ) | ||||||
|
|
|
|
|
| |||||||
Net realized loss | (40,973,628 | ) | (3,945,237 | ) | (3,942,137 | ) | ||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments | 13,334,926 | 3,015,569 | (1,764,474 | ) | ||||||||
Translation of assets and liabilities in foreign currencies | (103,706 | ) | 51,906 | 1,105 | ||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | 13,231,220 | 3,067,475 | (1,763,369 | ) | ||||||||
|
|
|
|
|
| |||||||
Net realized and unrealized loss | (27,742,408 | ) | (877,762 | ) | (5,705,506 | ) | ||||||
|
|
|
|
|
| |||||||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (26,193,247 | ) | $ | (36,085 | ) | $ | (4,716,643 | ) | |||
|
|
|
|
|
|
a | Net of foreign withholding tax of $248,503, $122,368 and $200,926, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 67 |
Table of Contents
Statements of Operations (Continued)
iSHARES®, INC.
Year ended August 31, 2012
iShares MSCI EMU Index Fund | iShares MSCI France Index Fund | iShares MSCI Germany Index Fund | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliateda | $ | 28,364,909 | $ | 9,928,009 | $ | 86,595,547 | ||||||
Interest — unaffiliated | 258 | — | 20 | |||||||||
Interest — affiliated (Note 2) | 194 | 78 | 721 | |||||||||
Securities lending income — affiliated (Note 2) | 312,517 | 72,418 | 488,417 | |||||||||
|
|
|
|
|
| |||||||
28,677,878 | 10,000,505 | 87,084,705 | ||||||||||
Less: Other foreign taxes (Note 1) | (808 | ) | (1,006 | ) | — | |||||||
|
|
|
|
|
| |||||||
Total investment income | 28,677,070 | 9,999,499 | 87,084,705 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 3,695,691 | 1,529,840 | 14,093,002 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 3,695,691 | 1,529,840 | 14,093,002 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 24,981,379 | 8,469,659 | 72,991,703 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | (66,586,194 | ) | (23,796,526 | ) | (76,426,767 | ) | ||||||
In-kind redemptions — unaffiliated | 2,721,446 | (22,895,105 | ) | 54,283,982 | ||||||||
Futures contracts | — | — | 23,600 | |||||||||
Foreign currency transactions | (376,734 | ) | (148,510 | ) | (1,084,164 | ) | ||||||
|
|
|
|
|
| |||||||
Net realized loss | (64,241,482 | ) | (46,840,141 | ) | (23,203,349 | ) | ||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments | 3,603,438 | 21,061,115 | 55,283,887 | |||||||||
Futures contracts | — | — | 1,632,458 | |||||||||
Translation of assets and liabilities in foreign currencies | (4,728 | ) | 9,605 | (840,185 | ) | |||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | 3,598,710 | 21,070,720 | 56,076,160 | |||||||||
|
|
|
|
|
| |||||||
Net realized and unrealized gain (loss) | (60,642,772 | ) | (25,769,421 | ) | 32,872,811 | |||||||
|
|
|
|
|
| |||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | (35,661,393 | ) | $ | (17,299,762 | ) | $ | 105,864,514 | ||||
|
|
|
|
|
|
a | Net of foreign withholding tax of $4,187,889, $1,741,344 and $13,236,802, respectively. |
See notes to financial statements.
68 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Operations (Continued)
iSHARES®, INC.
Year ended August 31, 2012
iShares MSCI Italy Index Fund | iShares MSCI Netherlands Investable Market Index Fund | iShares MSCI Spain Index Fund | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliateda | $ | 5,112,846 | $ | 1,920,753 | $ | 10,488,940 | ||||||
Interest — affiliated (Note 2) | 41 | 17 | 105 | |||||||||
Securities lending income — affiliated (Note 2) | 40,173 | 21,596 | 416,598 | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 5,153,060 | 1,942,366 | 10,905,643 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 687,537 | 373,539 | 705,321 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 687,537 | 373,539 | 705,321 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 4,465,523 | 1,568,827 | 10,200,322 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | (31,724,058 | ) | (5,771,725 | ) | (30,352,643 | ) | ||||||
In-kind redemptions — unaffiliated | 1,864,340 | (14,661,575 | ) | (24,902,153 | ) | |||||||
Foreign currency transactions | 17,638 | (56,324 | ) | (65,899 | ) | |||||||
|
|
|
|
|
| |||||||
Net realized loss | (29,842,080 | ) | (20,489,624 | ) | (55,320,695 | ) | ||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments | 14,197,062 | 16,002,868 | 23,659,167 | |||||||||
Translation of assets and liabilities in foreign currencies | 929 | (1,500 | ) | (368 | ) | |||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | 14,197,991 | 16,001,368 | 23,658,799 | |||||||||
|
|
|
|
|
| |||||||
Net realized and unrealized loss | (15,644,089 | ) | (4,488,256 | ) | (31,661,896 | ) | ||||||
|
|
|
|
|
| |||||||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (11,178,566 | ) | $ | (2,919,429 | ) | $ | (21,461,574 | ) | |||
|
|
|
|
|
|
a | Net of foreign withholding tax of $869,486, $332,733 and $855,365, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 69 |
Table of Contents
Statements of Operations (Continued)
iSHARES®, INC.
Year ended August 31, 2012
iShares MSCI Sweden Index Fund | iShares MSCI Switzerland Index Fund | iShares MSCI United Kingdom Index Fund | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliateda | $ | 11,429,399 | $ | 16,780,021 | $ | 58,648,688 | ||||||
Interest — unaffiliated | — | — | 280 | |||||||||
Interest — affiliated (Note 2) | 45 | 102 | 424 | |||||||||
Securities lending income — affiliated (Note 2) | 1,613 | 629 | 41,492 | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 11,431,057 | 16,780,752 | 58,690,884 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 1,624,714 | 2,708,262 | 6,994,397 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 1,624,714 | 2,708,262 | 6,994,397 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 9,806,343 | 14,072,490 | 51,696,487 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | (8,868,064 | ) | (6,774,061 | ) | (36,834,010 | ) | ||||||
In-kind redemptions — unaffiliated | (9,460,688 | ) | 6,032,891 | 23,861,329 | ||||||||
Futures contracts | — | — | (128,697 | ) | ||||||||
Foreign currency transactions | (251,254 | ) | (182,317 | ) | (848,676 | ) | ||||||
|
|
|
|
|
| |||||||
Net realized loss | (18,580,006 | ) | (923,487 | ) | (13,950,054 | ) | ||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments | 18,531,048 | (14,994,228 | ) | 52,219,421 | ||||||||
Futures contracts | — | — | 33,022 | |||||||||
Translation of assets and liabilities in foreign currencies | 3,360 | (622,338 | ) | 180,064 | ||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | 18,534,408 | (15,616,566 | ) | 52,432,507 | ||||||||
|
|
|
|
|
| |||||||
Net realized and unrealized gain (loss) | (45,598 | ) | (16,540,053 | ) | 38,482,453 | |||||||
|
|
|
|
|
| |||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | 9,760,745 | $ | (2,467,563 | ) | $ | 90,178,940 | |||||
|
|
|
|
|
|
a | Net of foreign withholding tax of $2,016,953, $2,452,125 and $683,787, respectively. |
See notes to financial statements.
70 | 2012 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, 2012 | Year ended August 31, 2011 | Year ended August 31, 2012 | Year ended August 31, 2011 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 1,549,161 | $ | 3,240,793 | $ | 841,677 | $ | 1,389,784 | ||||||||
Net realized gain (loss) | (40,973,628 | ) | 3,890,979 | (3,945,237 | ) | (4,660,818 | ) | |||||||||
Net change in unrealized appreciation/depreciation | 13,231,220 | 5,563,324 | 3,067,475 | 8,534,470 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | (26,193,247 | ) | 12,695,096 | (36,085 | ) | 5,263,436 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (1,874,586 | ) | (3,303,650 | ) | (1,434,412 | ) | (1,401,041 | ) | ||||||||
Return of capital | — | — | (27,668 | ) | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (1,874,586 | ) | (3,303,650 | ) | (1,462,080 | ) | (1,401,041 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 30,854,845 | 153,911,553 | 3,661,417 | 70,362,308 | ||||||||||||
Cost of shares redeemed | (86,004,103 | ) | (136,848,453 | ) | (8,033,134 | ) | (101,865,045 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | (55,149,258 | ) | 17,063,100 | (4,371,717 | ) | (31,502,737 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | (83,217,091 | ) | 26,454,546 | (5,869,882 | ) | (27,640,342 | ) | |||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 136,974,207 | 110,519,661 | 31,255,835 | 58,896,177 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year | $ | 53,757,116 | $ | 136,974,207 | $ | 25,385,953 | $ | 31,255,835 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of year | $ | (273 | ) | $ | 111,146 | $ | (4,077 | ) | $ | 709,744 | ||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 1,900,000 | 7,100,000 | 320,000 | 4,920,000 | ||||||||||||
Shares redeemed | (5,500,000 | ) | (6,200,000 | ) | (680,000 | ) | (7,440,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | (3,600,000 | ) | 900,000 | (360,000 | ) | (2,520,000 | ) | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
FINANCIAL STATEMENTS | 71 |
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 | |||||||||||||||
Year ended August 31, 2012 | Year ended August 31, 2011 | Year ended August 31, 2012 | Year ended August 31, 2011 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 988,863 | $ | 671,515 | $ | 24,981,379 | $ | 29,284,564 | ||||||||
Net realized gain (loss) | (3,942,137 | ) | 4,507,041 | (64,241,482 | ) | (9,900,693 | ) | |||||||||
Net change in unrealized appreciation/depreciation | (1,763,369 | ) | (5,857,166 | ) | 3,598,710 | 6,777,116 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | (4,716,643 | ) | (678,610 | ) | (35,661,393 | ) | 26,160,987 | |||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (999,697 | ) | (575,285 | ) | (26,115,000 | ) | (27,791,723 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (999,697 | ) | (575,285 | ) | (26,115,000 | ) | (27,791,723 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 3,811,852 | 76,250,166 | 423,843,438 | 558,259,495 | ||||||||||||
Cost of shares redeemed | (9,705,031 | ) | (55,616,346 | ) | (306,073,712 | ) | (642,368,122 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | (5,893,179 | ) | 20,633,820 | 117,769,726 | (84,108,627 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | (11,609,519 | ) | 19,379,925 | 55,993,333 | (85,739,363 | ) | ||||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 32,211,525 | 12,831,600 | 738,232,674 | 823,972,037 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year | $ | 20,602,006 | $ | 32,211,525 | $ | 794,226,007 | $ | 738,232,674 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed net investment income included in net assets at end of year | $ | 75,982 | $ | 129,787 | $ | 941,872 | $ | 2,355,966 | ||||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 150,000 | 2,250,000 | 14,700,000 | 14,400,000 | ||||||||||||
Shares redeemed | (400,000 | ) | (1,650,000 | ) | (10,800,000 | ) | (17,800,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | (250,000 | ) | 600,000 | 3,900,000 | (3,400,000 | ) | ||||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
72 | 2012 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, 2012 | Year ended August 31, 2011 | Year ended August 31, 2012 | Year ended August 31, 2011 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 8,469,659 | $ | 11,923,061 | $ | 72,991,703 | $ | 91,494,830 | ||||||||
Net realized gain (loss) | (46,840,141 | ) | (2,882,430 | ) | (23,203,349 | ) | 106,517,591 | |||||||||
Net change in unrealized appreciation/depreciation | 21,070,720 | (10,589,579 | ) | 56,076,160 | (323,290,675 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | (17,299,762 | ) | (1,548,948 | ) | 105,864,514 | (125,278,254 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (8,849,764 | ) | (11,811,674 | ) | (74,836,476 | ) | (93,072,582 | ) | ||||||||
Return of capital | (2,754 | ) | — | — | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (8,852,518 | ) | (11,811,674 | ) | (74,836,476 | ) | (93,072,582 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 407,882,087 | 327,507,874 | 1,528,900,109 | 2,649,782,675 | ||||||||||||
Cost of shares redeemed | (337,241,789 | ) | (196,716,202 | ) | (1,531,070,466 | ) | (1,151,141,454 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | 70,640,298 | 130,791,672 | (2,170,357 | ) | 1,498,641,221 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE IN NET ASSETS | 44,488,018 | 117,431,050 | 28,857,681 | 1,280,290,385 | ||||||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 357,137,484 | 239,706,434 | 2,768,171,387 | 1,487,881,002 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year | $ | 401,625,502 | $ | 357,137,484 | $ | 2,797,029,068 | $ | 2,768,171,387 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of year | $ | (48,128 | ) | $ | 480,487 | $ | — | $ | — | |||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 21,000,000 | 12,400,000 | 72,900,000 | 102,900,000 | ||||||||||||
Shares redeemed | (17,400,000 | ) | (8,000,000 | ) | (73,500,000 | ) | (47,700,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | 3,600,000 | 4,400,000 | (600,000 | ) | 55,200,000 | |||||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
FINANCIAL STATEMENTS | 73 |
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, 2012 | Year ended August 31, 2011 | Year ended August 31, 2012 | Year ended August 31, 2011 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 4,465,523 | $ | 3,714,465 | $ | 1,568,827 | $ | 3,819,725 | ||||||||
Net realized gain (loss) | (29,842,080 | ) | (7,907,880 | ) | (20,489,624 | ) | 8,037,705 | |||||||||
Net change in unrealized appreciation/depreciation | 14,197,991 | (7,314,629 | ) | 16,001,368 | (605,357 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | (11,178,566 | ) | (11,508,044 | ) | (2,919,429 | ) | 11,252,073 | |||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (4,578,996 | ) | (3,814,673 | ) | (1,910,545 | ) | (3,654,048 | ) | ||||||||
Return of capital | (1,125 | ) | — | — | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (4,580,121 | ) | (3,814,673 | ) | (1,910,545 | ) | (3,654,048 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 186,146,005 | 233,854,014 | 38,973,623 | 63,107,207 | ||||||||||||
Cost of shares redeemed | (118,787,548 | ) | (150,419,367 | ) | (77,487,514 | ) | (96,575,333 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | 67,358,457 | 83,434,647 | (38,513,891 | ) | (33,468,126 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | 51,599,770 | 68,111,930 | (43,343,865 | ) | (25,870,101 | ) | ||||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 144,611,982 | 76,500,052 | 121,740,406 | 147,610,507 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year | $ | 196,211,752 | $ | 144,611,982 | $ | 78,396,541 | $ | 121,740,406 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of year | $ | (61,840 | ) | $ | 14,337 | $ | 159,212 | $ | 557,254 | |||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 15,750,000 | 14,400,000 | 2,200,000 | 2,850,000 | ||||||||||||
Shares redeemed | (9,750,000 | ) | (8,850,000 | ) | (4,500,000 | ) | (4,500,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | 6,000,000 | 5,550,000 | (2,300,000 | ) | (1,650,000 | ) | ||||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
74 | 2012 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, 2012 | Year ended August 31, 2011 | Year ended August 31, 2012 | Year ended August 31, 2011 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 10,200,322 | $ | 11,073,134 | $ | 9,806,343 | $ | 18,747,767 | ||||||||
Net realized gain (loss) | (55,320,695 | ) | (583,970 | ) | (18,580,006 | ) | 3,646,225 | |||||||||
Net change in unrealized appreciation/depreciation | 23,658,799 | (10,416,178 | ) | 18,534,408 | (18,154,073 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | (21,461,574 | ) | 72,986 | 9,760,745 | 4,239,919 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (11,503,970 | ) | (8,211,532 | ) | (9,531,005 | ) | (19,236,805 | ) | ||||||||
Return of capital | — | — | (613,518 | ) | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (11,503,970 | ) | (8,211,532 | ) | (10,144,523 | ) | (19,236,805 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 226,627,780 | 418,742,090 | 141,186,783 | 366,716,894 | ||||||||||||
Cost of shares redeemed | (178,928,842 | ) | (424,605,441 | ) | (99,857,806 | ) | (271,324,012 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | 47,698,938 | (5,863,351 | ) | 41,328,977 | 95,392,882 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | 14,733,394 | (14,001,897 | ) | 40,945,199 | 80,395,996 | |||||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 180,359,625 | 194,361,522 | 329,887,184 | 249,491,188 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year | $ | 195,093,019 | $ | 180,359,625 | $ | 370,832,383 | $ | 329,887,184 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of year | $ | 2,782,477 | $ | 4,152,024 | $ | (43,823 | ) | $ | — | |||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 8,550,000 | 10,200,000 | 5,250,000 | 11,850,000 | ||||||||||||
Shares redeemed | (6,150,000 | ) | (10,425,000 | ) | (3,975,000 | ) | (9,750,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | 2,400,000 | (225,000 | ) | 1,275,000 | 2,100,000 | |||||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
FINANCIAL STATEMENTS | 75 |
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, 2012 | Year ended August 31, 2011 | Year ended August 31, 2012 | Year ended August 31, 2011 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 14,072,490 | $ | 11,696,805 | $ | 51,696,487 | $ | 37,030,142 | ||||||||
Net realized gain (loss) | (923,487 | ) | 9,971,355 | (13,950,054 | ) | 19,495,286 | ||||||||||
Net change in unrealized appreciation/depreciation | (15,616,566 | ) | 39,334,532 | 52,432,507 | 45,745,307 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | (2,467,563 | ) | 61,002,692 | 90,178,940 | 102,270,735 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (14,947,529 | ) | (11,911,242 | ) | (49,722,633 | ) | (33,922,128 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (14,947,529 | ) | (11,911,242 | ) | (49,722,633 | ) | (33,922,128 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 90,416,035 | 136,480,631 | 243,232,911 | 406,184,764 | ||||||||||||
Cost of shares redeemed | (42,590,064 | ) | (67,167,856 | ) | (126,527,912 | ) | (205,612,227 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets from capital share transactions | 47,825,971 | 69,312,775 | 116,704,999 | 200,572,537 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE IN NET ASSETS | 30,410,879 | 118,404,225 | 157,161,306 | 268,921,144 | ||||||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 524,158,835 | 405,754,610 | 1,199,332,793 | 930,411,649 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year | $ | 554,569,714 | $ | 524,158,835 | $ | 1,356,494,099 | $ | 1,199,332,793 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of year | $ | (89,854 | ) | $ | 226,960 | $ | 9,541,575 | $ | 8,406,831 | |||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 3,875,000 | 5,125,000 | 14,800,000 | 23,400,000 | ||||||||||||
Shares redeemed | (1,875,000 | ) | (2,625,000 | ) | (7,600,000 | ) | (12,400,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in shares outstanding | 2,000,000 | 2,500,000 | 7,200,000 | 11,000,000 | ||||||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
76 | 2012 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, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | ||||||||||||||||
Net asset value, beginning of year | $ | 18.76 | $ | 17.27 | $ | 20.21 | $ | 29.78 | $ | 37.28 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.35 | 0.42 | 0.43 | 0.51 | 0.56 | |||||||||||||||
Net realized and unrealized gain (loss)b | (4.09 | ) | 1.53 | (2.62 | ) | (9.36 | ) | (6.98 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (3.74 | ) | 1.95 | (2.19 | ) | (8.85 | ) | (6.42 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.49 | ) | (0.46 | ) | (0.75 | ) | (0.72 | ) | (1.08 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.49 | ) | (0.46 | ) | (0.75 | ) | (0.72 | ) | (1.08 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 14.53 | $ | 18.76 | $ | 17.27 | $ | 20.21 | $ | 29.78 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | (19.81 | )% | 10.92 | % | (11.07 | )% | (28.52 | )% | (17.64 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 53,757 | $ | 136,974 | $ | 110,520 | $ | 159,666 | $ | 193,602 | ||||||||||
Ratio of expenses to average net assets | 0.52 | % | 0.52 | % | 0.54 | % | 0.55 | % | 0.52 | % | ||||||||||
Ratio of net investment income to average net assets | 2.32 | % | 1.95 | % | 2.20 | % | 3.25 | % | 1.57 | % | ||||||||||
Portfolio turnover ratec | 13 | % | 12 | % | 11 | % | 26 | % | 26 | % |
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 | 77 |
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, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | ||||||||||||||||
Net asset value, beginning of year | $ | 12.60 | $ | 11.78 | $ | 12.06 | $ | 17.64 | $ | 25.89 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.38 | 0.35 | 0.19 | 0.22 | 0.78 | |||||||||||||||
Net realized and unrealized gain (loss)b | (0.33 | ) | 0.80 | (0.27 | ) | (5.46 | ) | (7.27 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 0.05 | 1.15 | (0.08 | ) | (5.24 | ) | (6.49 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.67 | ) | (0.33 | ) | (0.20 | ) | (0.34 | ) | (1.76 | ) | ||||||||||
Return of capital | (0.01 | ) | — | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.68 | ) | (0.33 | ) | (0.20 | ) | (0.34 | ) | (1.76 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 11.97 | $ | 12.60 | $ | 11.78 | $ | 12.06 | $ | 17.64 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 1.11 | % | 9.59 | % | (0.60 | )% | (29.15 | )% | (26.21 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 25,386 | $ | 31,256 | $ | 58,896 | $ | 53,042 | $ | 119,955 | ||||||||||
Ratio of expenses to average net assets | 0.53 | % | 0.52 | % | 0.54 | % | 0.56 | % | 0.52 | % | ||||||||||
Ratio of net investment income to average net assets | 3.35 | % | 2.56 | % | 1.55 | % | 2.23 | % | 3.32 | % | ||||||||||
Portfolio turnover ratec | 19 | % | 12 | % | 17 | % | 33 | % | 31 | % |
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 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Emerging Markets Eastern Europe Index Fund | ||||||||||||
Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Period from to Aug. 31, 2010 | ||||||||||
Net asset value, beginning of period | $ | 29.28 | $ | 25.66 | $ | 24.65 | ||||||
|
|
|
|
|
| |||||||
Income from investment operations: | ||||||||||||
Net investment incomeb | 1.01 | 0.67 | 0.26 | |||||||||
Net realized and unrealized gain (loss)c | (4.92 | ) | 3.45 | 0.89 | ||||||||
|
|
|
|
|
| |||||||
Total from investment operations | (3.91 | ) | 4.12 | 1.15 | ||||||||
|
|
|
|
|
| |||||||
Less distributions from: | ||||||||||||
Net investment income | (1.13 | ) | (0.50 | ) | (0.13 | ) | ||||||
Net realized gain | — | — | (0.01 | ) | ||||||||
|
|
|
|
|
| |||||||
Total distributions | (1.13 | ) | (0.50 | ) | (0.14 | ) | ||||||
|
|
|
|
|
| |||||||
Net asset value, end of period | $ | 24.24 | $ | 29.28 | $ | 25.66 | ||||||
|
|
|
|
|
| |||||||
Total return | (13.14 | )% | 15.86 | % | 4.68 | %d | ||||||
|
|
|
|
|
| |||||||
Ratios/Supplemental data: | ||||||||||||
Net assets, end of period (000s) | $ | 20,602 | $ | 32,212 | $ | 12,832 | ||||||
Ratio of expenses to average net assetse | 0.69 | % | 0.68 | % | 0.69 | % | ||||||
Ratio of expenses to average net assets prior to waived fees | n/a | 0.68 | % | n/a | ||||||||
Ratio of net investment income to average net assetse | 3.97 | % | 2.06 | % | 1.05 | % | ||||||
Portfolio turnover ratef | 8 | % | 24 | % | 13 | % |
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
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI EMU Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008a | ||||||||||||||||
Net asset value, beginning of year | $ | 31.55 | $ | 30.75 | $ | 35.64 | $ | 45.97 | $ | 57.15 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomeb | 1.02 | 1.23 | 0.80 | 0.93 | 1.71 | |||||||||||||||
Net realized and unrealized gain (loss)c | (2.38 | ) | 0.71 | (4.76 | ) | (9.97 | ) | (9.59 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (1.36 | ) | 1.94 | (3.96 | ) | (9.04 | ) | (7.88 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (1.10 | ) | (1.14 | ) | (0.93 | ) | (1.29 | ) | (3.30 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (1.10 | ) | (1.14 | ) | (0.93 | ) | (1.29 | ) | (3.30 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 29.09 | $ | 31.55 | $ | 30.75 | $ | 35.64 | $ | 45.97 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | (3.99 | )% | 5.78 | % | (11.19 | )% | (19.05 | )% | (14.52 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 794,226 | $ | 738,233 | $ | 823,972 | $ | 741,270 | $ | 1,291,808 | ||||||||||
Ratio of expenses to average net assetsd | 0.53 | % | 0.52 | % | 0.54 | % | 0.56 | % | 0.52 | % | ||||||||||
Ratio of net investment income to average net assets | 3.55 | % | 3.38 | % | 2.29 | % | 3.07 | % | 3.06 | % | ||||||||||
Portfolio turnover ratee | 7 | % | 8 | % | 5 | % | 8 | % | 27 | % |
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 | Ratios for the years ended August 31, 2010 and prior have been recalculated, as necessary, to conform with the current presentation of foreign taxes. |
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.
80 | 2012 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, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | ||||||||||||||||
Net asset value, beginning of year | $ | 22.60 | $ | 21.03 | $ | 24.28 | $ | 30.70 | $ | 36.53 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.59 | 0.86 | 0.65 | 0.66 | 0.93 | |||||||||||||||
Net realized and unrealized gain (loss)b | (1.80 | ) | 1.38 | (3.30 | ) | (6.13 | ) | (5.17 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (1.21 | ) | 2.24 | (2.65 | ) | (5.47 | ) | (4.24 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.69 | ) | (0.67 | ) | (0.60 | ) | (0.95 | ) | (1.59 | ) | ||||||||||
Return of capital | (0.00 | )c | — | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.69 | ) | (0.67 | ) | (0.60 | ) | (0.95 | ) | (1.59 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 20.70 | $ | 22.60 | $ | 21.03 | $ | 24.28 | $ | 30.70 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | (5.05 | )% | 10.24 | % | (10.98 | )% | (17.11 | )% | (11.96 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 401,626 | $ | 357,137 | $ | 239,706 | $ | 184,511 | $ | 227,203 | ||||||||||
Ratio of expenses to average net assetsd | 0.53 | % | 0.52 | % | 0.53 | % | 0.55 | % | 0.52 | % | ||||||||||
Ratio of net investment income to average net assets | 2.91 | % | 3.38 | % | 2.71 | % | 3.18 | % | 2.60 | % | ||||||||||
Portfolio turnover ratee | 6 | % | 6 | % | 6 | % | 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 | Rounds to less than $0.01. |
d | Ratios for the years ended August 31, 2010 and prior have been recalculated, as necessary, to conform with the current presentation of foreign taxes. |
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
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Germany Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | ||||||||||||||||
Net asset value, beginning of year | $ | 21.02 | $ | 19.45 | $ | 20.86 | $ | 27.55 | $ | 32.18 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.56 | 0.86 | 0.38 | 0.58 | 0.88 | |||||||||||||||
Net realized and unrealized gain (loss)b | 0.34 | 1.38 | (1.49 | ) | (6.65 | ) | (3.84 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 0.90 | 2.24 | (1.11 | ) | (6.07 | ) | (2.96 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.58 | ) | (0.67 | ) | (0.30 | ) | (0.62 | ) | (1.67 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.58 | ) | (0.67 | ) | (0.30 | ) | (0.62 | ) | (1.67 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 21.34 | $ | 21.02 | $ | 19.45 | $ | 20.86 | $ | 27.55 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 4.55 | % | 10.84 | % | (5.35 | )% | (21.62 | )% | (9.81 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 2,797,029 | $ | 2,768,171 | $ | 1,487,881 | $ | 619,638 | $ | 669,452 | ||||||||||
Ratio of expenses to average net assets | 0.53 | % | 0.51 | % | 0.53 | % | 0.55 | % | 0.52 | % | ||||||||||
Ratio of net investment income to average net assets | 2.72 | % | 3.45 | % | 1.80 | % | 3.18 | % | 2.72 | % | ||||||||||
Portfolio turnover ratec | 4 | % | 13 | % | 5 | % | 15 | % | 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.
82 | 2012 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, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | ||||||||||||||||
Net asset value, beginning of year | $ | 13.58 | $ | 15.00 | $ | 19.05 | $ | 25.04 | $ | 33.82 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.41 | 0.54 | 0.39 | 0.47 | 1.53 | |||||||||||||||
Net realized and unrealized lossb | (1.79 | ) | (1.47 | ) | (3.99 | ) | (5.82 | ) | (7.71 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (1.38 | ) | (0.93 | ) | (3.60 | ) | (5.35 | ) | (6.18 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.42 | ) | (0.49 | ) | (0.44 | ) | (0.64 | ) | (2.60 | ) | ||||||||||
Return of capital | (0.00 | )c | — | (0.01 | ) | — | — | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.42 | ) | (0.49 | ) | (0.45 | ) | (0.64 | ) | (2.60 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 11.78 | $ | 13.58 | $ | 15.00 | $ | 19.05 | $ | 25.04 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | (9.98 | )% | (6.80 | )% | (19.11 | )% | (20.78 | )% | (19.43 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 196,212 | $ | 144,612 | $ | 76,500 | $ | 125,716 | $ | 244,154 | ||||||||||
Ratio of expenses to average net assetsd | 0.53 | % | 0.51 | % | 0.54 | % | 0.55 | % | 0.52 | % | ||||||||||
Ratio of net investment income to average net assets | 3.41 | % | 3.15 | % | 2.17 | % | 2.85 | % | 5.06 | % | ||||||||||
Portfolio turnover ratee | 14 | % | 16 | % | 12 | % | 18 | % | 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 | Rounds to less than $0.01. |
d | Ratios for the years ended August 31, 2010 and prior have been recalculated, as necessary, to conform with the current presentation of foreign taxes. |
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 | 83 |
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, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | ||||||||||||||||
Net asset value, beginning of year | $ | 18.45 | $ | 17.89 | $ | 18.52 | $ | 24.38 | $ | 29.75 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.39 | 0.48 | 0.45 | 0.35 | 1.10 | |||||||||||||||
Net realized and unrealized gain (loss)b | (0.08 | ) | 0.55 | (0.70 | ) | (5.55 | ) | (4.68 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 0.31 | 1.03 | (0.25 | ) | (5.20 | ) | (3.58 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.53 | ) | (0.47 | ) | (0.38 | ) | (0.66 | ) | (1.79 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.53 | ) | (0.47 | ) | (0.38 | ) | (0.66 | ) | (1.79 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 18.23 | $ | 18.45 | $ | 17.89 | $ | 18.52 | $ | 24.38 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 1.96 | % | 5.44 | % | (1.44 | )% | (20.59 | )% | (12.67 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 78,397 | $ | 121,740 | $ | 147,611 | $ | 83,351 | $ | 209,653 | ||||||||||
Ratio of expenses to average net assets | 0.53 | % | 0.52 | % | 0.53 | % | 0.55 | % | 0.52 | % | ||||||||||
Ratio of net investment income to average net assets | 2.21 | % | 2.26 | % | 2.31 | % | 2.24 | % | 3.86 | % | ||||||||||
Portfolio turnover ratec | 10 | % | 6 | % | 9 | % | 15 | % | 26 | % |
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 | 2012 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, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | ||||||||||||||||
Net asset value, beginning of year | $ | 35.89 | $ | 37.02 | $ | 47.65 | $ | 50.41 | $ | 58.06 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 2.12 | 2.14 | 1.64 | 1.75 | 1.98 | |||||||||||||||
Net realized and unrealized lossb | (8.93 | ) | (1.36 | ) | (10.01 | ) | (2.14 | ) | (7.33 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (6.81 | ) | 0.78 | (8.37 | ) | (0.39 | ) | (5.35 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (2.80 | ) | (1.91 | ) | (2.26 | ) | (2.37 | ) | (2.30 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (2.80 | ) | (1.91 | ) | (2.26 | ) | (2.37 | ) | (2.30 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 26.28 | $ | 35.89 | $ | 37.02 | $ | 47.65 | $ | 50.41 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | (19.36 | )% | 1.78 | % | (17.91 | )% | 0.64 | % | (9.76 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 195,093 | $ | 180,360 | $ | 194,362 | $ | 278,734 | $ | 321,349 | ||||||||||
Ratio of expenses to average net assets | 0.53 | % | 0.52 | % | 0.54 | % | 0.56 | % | 0.52 | % | ||||||||||
Ratio of net investment income to average net assets | 7.60 | % | 5.31 | % | 3.72 | % | 4.70 | % | 3.28 | % | ||||||||||
Portfolio turnover ratec | 17 | % | 14 | % | 9 | % | 19 | % | 22 | % |
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 Sweden Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | ||||||||||||||||
Net asset value, beginning of year | $ | 26.82 | $ | 24.46 | $ | 22.86 | $ | 24.48 | $ | 34.57 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.83 | 1.18 | 0.48 | 0.40 | 0.91 | |||||||||||||||
Net realized and unrealized gain (loss)b | 0.58 | 2.22 | 1.73 | (1.56 | ) | (8.63 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 1.41 | 3.40 | 2.21 | (1.16 | ) | (7.72 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.86 | ) | (1.04 | ) | (0.61 | ) | (0.46 | ) | (2.37 | ) | ||||||||||
Return of capital | (0.05 | ) | — | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.91 | ) | (1.04 | ) | (0.61 | ) | (0.46 | ) | (2.37 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 27.32 | $ | 26.82 | $ | 24.46 | $ | 22.86 | $ | 24.48 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 5.57 | % | 13.40 | % | 9.70 | % | (4.04 | )% | (23.16 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 370,832 | $ | 329,887 | $ | 249,491 | $ | 190,333 | $ | 227,654 | ||||||||||
Ratio of expenses to average net assets | 0.53 | % | 0.51 | % | 0.53 | % | 0.55 | % | 0.51 | % | ||||||||||
Ratio of net investment income to average net assets | 3.17 | % | 3.80 | % | 1.97 | % | 2.34 | % | 2.91 | % | ||||||||||
Portfolio turnover ratec | 7 | % | 9 | % | 10 | % | 9 | % | 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 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Switzerland Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | ||||||||||||||||
Net asset value, beginning of year | $ | 24.67 | $ | 21.64 | $ | 20.71 | $ | 23.09 | $ | 25.78 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.63 | 0.59 | 0.39 | 0.25 | 0.49 | |||||||||||||||
Net realized and unrealized gain (loss)b | (0.80 | ) | 2.97 | 0.90 | (2.30 | ) | (2.51 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (0.17 | ) | 3.56 | 1.29 | (2.05 | ) | (2.02 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.65 | ) | (0.53 | ) | (0.36 | ) | (0.33 | ) | (0.67 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.65 | ) | (0.53 | ) | (0.36 | ) | (0.33 | ) | (0.67 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 23.85 | $ | 24.67 | $ | 21.64 | $ | 20.71 | $ | 23.09 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | (0.53 | )% | 16.30 | % | 6.35 | % | (8.63 | )% | (7.97 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 554,570 | $ | 524,159 | $ | 405,755 | $ | 271,855 | $ | 366,525 | ||||||||||
Ratio of expenses to average net assets | 0.53 | % | 0.52 | % | 0.53 | % | 0.56 | % | 0.52 | % | ||||||||||
Ratio of net investment income to average net assets | 2.73 | % | 2.35 | % | 1.80 | % | 1.42 | % | 1.93 | % | ||||||||||
Portfolio turnover ratec | 8 | % | 7 | % | 7 | % | 16 | % | 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.
FINANCIAL HIGHLIGHTS | 87 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI United Kingdom Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | ||||||||||||||||
Net asset value, beginning of year | $ | 16.43 | $ | 15.01 | $ | 15.02 | $ | 19.35 | $ | 24.73 | ||||||||||
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Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.64 | 0.54 | 0.46 | 0.50 | 0.83 | |||||||||||||||
Net realized and unrealized gain (loss)b | 0.46 | 1.35 | (0.03 | ) | (4.26 | ) | (4.89 | ) | ||||||||||||
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Total from investment operations | 1.10 | 1.89 | 0.43 | (3.76 | ) | (4.06 | ) | |||||||||||||
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Less distributions from: | ||||||||||||||||||||
Net investment income | (0.62 | ) | (0.47 | ) | (0.44 | ) | (0.57 | ) | (1.32 | ) | ||||||||||
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Total distributions | (0.62 | ) | (0.47 | ) | (0.44 | ) | (0.57 | ) | (1.32 | ) | ||||||||||
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Net asset value, end of year | $ | 16.91 | $ | 16.43 | $ | 15.01 | $ | 15.02 | $ | 19.35 | ||||||||||
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Total return | 6.94 | % | 12.50 | % | 2.87 | % | (18.68 | )% | (17.16 | )% | ||||||||||
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Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 1,356,494 | $ | 1,199,333 | $ | 930,412 | $ | 739,124 | $ | 882,502 | ||||||||||
Ratio of expenses to average net assets | 0.53 | % | 0.52 | % | 0.53 | % | 0.55 | % | 0.52 | % | ||||||||||
Ratio of net investment income to average net assets | 3.88 | % | 3.07 | % | 2.98 | % | 3.90 | % | 3.64 | % | ||||||||||
Portfolio turnover ratec | 7 | % | 4 | % | 7 | % | 11 | % | 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.
88 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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 following funds (each, a “Fund,” and collectively, the “Funds”):
iShares MSCI Index Fund | Diversification Classification | |||
Austria Investable Market | Non-diversified | |||
Belgium Investable Market | Non-diversified | |||
Emerging Markets Eastern Europe | Non-diversified | |||
EMU | Diversified | |||
France | Non-diversified | |||
Germany | Non-diversified |
iShares MSCI Index Fund | Diversification Classification | |||
Italy | Non-diversified | |||
Netherlands Investable Market | Non-diversified | |||
Spain | Non-diversified | |||
Sweden | Non-diversified | |||
Switzerland | Non-diversified | |||
United Kingdom | Non-diversified |
Non-diversified funds generally hold securities of fewer issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers.
The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index. The investment adviser uses a “passive” or index approach to try to achieve each Fund’s investment objective.
Each Fund may invest in securities of non-U.S. issuers that may trade in non-U.S. markets. This may involve certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: generally less liquid and less efficient securities markets; generally greater price volatility; exchange rate fluctuations and exchange controls; imposition of restrictions on the expatriation of funds or other assets of the Funds; 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 Funds in the preparation of their 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.
NOTESTO FINANCIAL STATEMENTS | 89 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
SECURITY VALUATION
Each Fund’s investments are valued at fair value each day that the Fund’s listing exchange is open. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) provides oversight of the valuation of investments for the Funds. The investments of each Fund are valued pursuant to policies and procedures developed by the Global Valuation Committee and approved by the Board of Directors of the Company (the “Board”).
• | Equity investments traded on a recognized securities exchange are valued at that day’s last reported trade price or the official closing price, as applicable, on the exchange where the stock is primarily traded. Equity investments traded on a recognized exchange for which there were no sales on that day are valued at the last traded price. |
• | Open-end U.S. mutual funds are valued at that day’s published net asset value (NAV). |
• | Financial futures contracts are valued at that day’s last reported settlement price on the exchange where the contract is traded. |
In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the fair value of such investment or if a price is not available, the investment will be valued based upon other available factors deemed relevant by the Global Valuation Committee, in accordance with policies approved by the Board. These factors include but are not limited to (i) attributes specific to the investment; (ii) the principal market for the investment; (iii) the customary participants in the principal market for the investment; (iv) data assumptions by market participants for the investment, if reasonably available; (v) quoted prices for similar investments in active markets; and (vi) other factors, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and/or other default rates. Valuations based on such factors are reported to the Board on a quarterly basis.
The Global Valuation Committee employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the Company’s pricing vendors, a regular review of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices and large movements in market values, and reviews of market related activity.
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.
Various inputs are used in determining the fair value of financial instruments. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes. The level of a value determined for 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. The three levels of the fair value hierarchy are as follows:
• | Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities; |
90 | 2012 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 (such as exchange rates, financing terms, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs; and |
• | Level 3 — Unobservable inputs for the asset or liability, including the Funds’ assumptions used in determining the fair value of investments. |
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. In accordance with the Company’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period.
The following table summarizes the value of each of the Funds’ investments according to the fair value hierarchy as of August 31, 2012. The breakdown of each Fund’s investments into major categories is disclosed in its respective Schedule of Investments.
iShares MSCI Index Fund and | Investments | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Austria Investable Market | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 53,153,421 | $ | — | $ | 239 | $ | 53,153,660 | ||||||||
Short-Term Investments | 156,421 | — | — | 156,421 | ||||||||||||
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$ | 53,309,842 | $ | — | $ | 239 | $ | 53,310,081 | |||||||||
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Belgium Investable Market | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 25,231,233 | $ | — | $ | — | $ | 25,231,233 | ||||||||
Short-Term Investments | 372,541 | — | — | 372,541 | ||||||||||||
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$ | 25,603,774 | $ | — | $ | — | $ | 25,603,774 | |||||||||
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Emerging Markets Eastern Europe | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 19,542,355 | $ | — | $ | — | $ | 19,542,355 | ||||||||
Preferred Stocks | 666,965 | — | — | 666,965 | ||||||||||||
Short-Term Investments | 319,344 | — | — | 319,344 | ||||||||||||
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$ | 20,528,664 | $ | — | $ | — | $ | 20,528,664 | |||||||||
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EMU | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 777,022,164 | $ | — | $ | 78 | $ | 777,022,242 | ||||||||
Preferred Stocks | 15,191,993 | — | — | 15,191,993 | ||||||||||||
Short-Term Investments | 8,288,454 | — | — | 8,288,454 | ||||||||||||
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$ | 800,502,611 | $ | — | $ | 78 | $ | 800,502,689 | |||||||||
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NOTESTO FINANCIAL STATEMENTS | 91 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
iShares MSCI Index Fund and | Investments | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
France | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 401,326,745 | $ | — | $ | — | $ | 401,326,745 | ||||||||
Short-Term Investments | 10,099 | — | — | 10,099 | ||||||||||||
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$ | 401,336,844 | $ | — | $ | — | $ | 401,336,844 | |||||||||
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Germany | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 2,602,503,378 | $ | — | $ | — | $ | 2,602,503,378 | ||||||||
Preferred Stocks | 177,894,825 | — | — | 177,894,825 | ||||||||||||
Short-Term Investments | 2,390,237 | — | — | 2,390,237 | ||||||||||||
Futures Contractsa | 1,632,458 | — | — | 1,632,458 | ||||||||||||
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$ | 2,784,420,898 | $ | — | $ | — | $ | 2,784,420,898 | |||||||||
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Italy | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 196,285,899 | $ | — | $ | — | $ | 196,285,899 | ||||||||
Short-Term Investments | 3,310,326 | — | — | 3,310,326 | ||||||||||||
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$ | 199,596,225 | $ | — | $ | — | $ | 199,596,225 | |||||||||
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Netherlands Investable Market | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 78,137,998 | $ | — | $ | — | $ | 78,137,998 | ||||||||
Warrants | — | — | 1 | 1 | ||||||||||||
Short-Term Investments | 214,917 | — | — | 214,917 | ||||||||||||
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$ | 78,352,915 | $ | — | $ | 1 | $ | 78,352,916 | |||||||||
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Spain | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 194,852,239 | $ | — | $ | — | $ | 194,852,239 | ||||||||
Short-Term Investments | 12,725,591 | — | — | 12,725,591 | ||||||||||||
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$ | 207,577,830 | $ | — | $ | — | $ | 207,577,830 | |||||||||
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Sweden | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 370,755,489 | $ | — | $ | — | $ | 370,755,489 | ||||||||
Short-Term Investments | 28,285 | — | — | 28,285 | ||||||||||||
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$ | 370,783,774 | $ | — | $ | — | $ | 370,783,774 | |||||||||
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92 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
iShares MSCI Index Fund and | Investments | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Switzerland | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 549,571,487 | $ | — | $ | — | $ | 549,571,487 | ||||||||
Short-Term Investments | 133,871 | — | — | 133,871 | ||||||||||||
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$ | 549,705,358 | $ | — | $ | — | $ | 549,705,358 | |||||||||
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United Kingdom | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 1,344,374,850 | $ | — | $ | — | $ | 1,344,374,850 | ||||||||
Short-Term Investments | 2,759,112 | — | — | 2,759,112 | ||||||||||||
Futures Contractsa | 33,022 | — | — | 33,022 | ||||||||||||
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$ | 1,347,166,984 | $ | — | $ | — | $ | 1,347,166,984 | |||||||||
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a | Futures contracts are shown at the net unrealized appreciation (depreciation) on the contracts. |
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are accounted for on trade date. Dividend income is recognized on the ex-dividend date, net of any foreign taxes withheld at source. Any taxes withheld that are reclaimable from foreign tax authorities as of August 31, 2012 are reflected in dividends receivable. Non-cash dividends received in the form of stock in an elective dividend, if any, are recorded as dividend income at fair value. Distributions received by the 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. Interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method.
FOREIGN CURRENCY TRANSLATION
The accounting records of the Funds are maintained in U.S. dollars. Foreign currencies, as well as investment securities and other assets and liabilities denominated in foreign currencies, are translated into U.S. dollars using exchange rates deemed appropriate by the investment adviser. 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, capital gains on investments, certain foreign currency transactions or other corporate events. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the Funds invest. These foreign taxes, if any, are paid by the Funds and are reflected in their Statements of Operations as follows: foreign taxes withheld at source are presented as a reduction of income, foreign taxes on securities lending income are presented as a reduction of securities lending income, foreign taxes on capital gains from sales of
NOTESTO FINANCIAL STATEMENTS | 93 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
investments and foreign currency transactions are included in their respective net realized gain (loss) categories, and foreign taxes on other corporate events are reflected in “Other foreign taxes.” Foreign taxes payable as of August 31, 2012, if any, are disclosed in the Funds’ Statements of Assets and Liabilities.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends and distributions paid by each Fund are recorded on the ex-dividend dates. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds.
FEDERAL INCOME TAXES
Each Fund is treated as an entity separate from the Company’s other funds 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 is required.
2. | INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES |
Pursuant to an Investment Advisory Agreement with the Company, BlackRock Fund Advisors (“BFA”) manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock, Inc. (“BlackRock”). Under the Investment Advisory Agreement, BFA is responsible for substantially all expenses of the Funds, except interest, taxes, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution fees, litigation expenses and any extraordinary expenses.
For its investment advisory services to each Fund, 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 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 |
94 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
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, up to and including $42 billion | |
0.56 | Over $42 billion, up to and including $56 billion | |
0.50 | Over $56 billion, up to and including $70 billion | |
0.45 | Over $70 billion, up to and including $84 billion | |
0.40 | Over $84 billion |
The U.S. Securities and Exchange Commission has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (“BTC”) to serve as securities lending agent for the Funds, subject to applicable conditions. BTC is an affiliate of BFA. Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, and any fees or other payments to and from borrowers of securities. Each Fund retains 65% of securities lending income and pays a fee to BTC equal to 35% of such income. As securities lending agent, BTC is responsible for all transaction fees and all other operational costs relating to securities lending activities, other than extraordinary expenses. BTC is also responsible for fees and expenses incurred by each Fund as a result of the investment of cash collateral received for securities on loan in a money market fund managed by BFA or an affiliate.
For the year ended August 31, 2012, BTC earned securities lending agent fees from the Funds as follows:
iShares MSCI Index Fund | Securities Lending Agent Fees | |||
Austria Investable Market | $ | 51,287 | ||
Belgium Investable Market | 10,375 | |||
Emerging Markets Eastern Europe | 128 | |||
EMU | 168,278 | |||
France | 38,995 | |||
Germany | 262,994 |
iShares MSCI Index Fund | Securities Lending Agent Fees | |||
Italy | $ | 21,634 | ||
Netherlands Investable Market | 11,629 | |||
Spain | 224,322 | |||
Sweden | 868 | |||
Switzerland | 336 | |||
United Kingdom | 22,342 |
At a special meeting of the Board held on January 5, 2012, the directors approved a new distribution agreement with BlackRock Investments, LLC (“BRIL”). BRIL is an affiliate of BFA. Effective April 1, 2012, BRIL replaced SEI Investments Distribution Co. as the distributor for each Fund. Pursuant to the new distribution agreement, BFA is responsible for any fees or expenses for distribution services provided to the Funds.
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 — affiliated” in the Statements of Operations.
The PNC Financial Services Group, Inc. is the largest stockholder of BlackRock and is considered to be an affiliate of the Funds for 1940 Act purposes.
Certain directors and officers of the Company are also officers of BTC and/or BFA.
NOTESTO FINANCIAL STATEMENTS | 95 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
3. | INVESTMENT PORTFOLIO TRANSACTIONS |
Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended August 31, 2012 were as follows:
iShares MSCI Index Fund | Purchases | Sales | ||||||
Austria Investable Market | $ | 9,240,185 | $ | 9,687,080 | ||||
Belgium Investable Market | 4,876,519 | 5,002,246 | ||||||
Emerging Markets Eastern Europe | 2,045,366 | 2,384,354 | ||||||
EMU | 48,846,419 | 49,738,349 | ||||||
France | 20,599,040 | 19,139,824 | ||||||
Germany | 111,297,973 | 117,145,633 | ||||||
Italy | 20,101,025 | 19,240,789 | ||||||
Netherlands Investable Market | 7,307,305 | 7,563,223 | ||||||
Spain | 23,329,846 | 23,978,040 | ||||||
Sweden | 21,368,251 | 22,069,186 | ||||||
Switzerland | 41,556,233 | 44,271,576 | ||||||
United Kingdom | 88,601,801 | 90,103,297 |
In-kind transactions (see Note 4) for the year ended August 31, 2012 were as follows:
iShares MSCI Index Fund | In-kind Purchases | In-kind Sales | ||||||
Austria Investable Market | $ | 30,467,983 | $ | 85,097,053 | ||||
Belgium Investable Market | 3,634,337 | 7,929,939 | ||||||
Emerging Markets Eastern Europe | 3,768,010 | 9,547,019 | ||||||
EMU | 420,895,887 | 304,038,318 | ||||||
France | 404,466,876 | 335,926,636 | ||||||
Germany | 1,521,762,360 | 1,524,332,401 | ||||||
Italy | 185,198,814 | 118,577,023 | ||||||
Netherlands Investable Market | 38,881,243 | 77,360,185 | ||||||
Spain | 225,201,735 | 178,178,049 | ||||||
Sweden | 141,100,128 | 99,620,799 | ||||||
Switzerland | 89,650,056 | 42,218,373 | ||||||
United Kingdom | 241,753,024 | 125,367,622 |
4. | CAPITAL SHARE TRANSACTIONS |
Capital shares are issued and redeemed by each Fund only in aggregations of a specified number of shares or multiples thereof (“Creation Units”) at net asset value. Except when aggregated in Creation Units, shares of 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 in the Company generally consists of the in-kind deposit of a designated portfolio of securities, which constitutes an optimized representation of the securities of that fund’s underlying index, and a specified
96 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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iSHARES®, INC.
amount of cash. Certain funds in the Company may be offered in Creation Units solely or partially for cash in U.S. dollars. Investors purchasing and redeeming Creation Units may pay a purchase transaction fee and a redemption transaction fee directly to State Street Bank and Trust Company, the Company’s administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash. Investors transacting in Creation Units for cash pay an additional variable charge to compensate the relevant fund for certain transaction costs (i.e., stamp taxes, taxes on currency or other financial transactions, and brokerage costs) and market impact expenses relating to investing in portfolio securities.
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. Each Fund could suffer a loss if the value of an investment purchased with cash collateral falls below the value of the cash collateral received.
As of August 31, 2012, any securities on loan 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, 2012 and the value of the related collateral are disclosed in the Statements of Assets and Liabilities. Securities lending income, as disclosed in the Statements of Operations, represents the income earned from the investment of the cash collateral, net of fees and other payments to and from borrowers, and less the fees paid to BTC as securities lending agent.
6. | INCOME TAX INFORMATION |
U.S. GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset values per share. The following permanent differences as of August 31, 2012, attributable to passive foreign investment companies, the expiration of capital loss carryforwards, distributions paid in excess of
NOTESTO FINANCIAL STATEMENTS | 97 |
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Notes to Financial Statements (Continued)
iSHARES®, INC.
taxable income, foreign currency transactions and realized gains (losses) from in-kind redemptions, were reclassified to the following accounts:
iShares MSCI Index Fund | Paid-in Capital | Undistributed Net Investment Income/Distributions in Excess of Net Investment Income | Undistributed Net Realized Gain/Accumulated Net Realized Loss | |||||||||
Austria Investable Market | $ | (34,684,755 | ) | $ | 214,006 | $ | 34,470,749 | |||||
Belgium Investable Market | (1,882,297 | ) | (121,086 | ) | 2,003,383 | |||||||
Emerging Markets Eastern Europe | (3,272,998 | ) | (42,971 | ) | 3,315,969 | |||||||
EMU | (38,657,763 | ) | (280,473 | ) | 38,938,236 | |||||||
France | (44,467,523 | ) | (148,510 | ) | 44,616,033 | |||||||
Germany | (32,767,514 | ) | 1,844,773 | 30,922,741 | ||||||||
Italy | (9,573,091 | ) | 37,296 | 9,535,795 | ||||||||
Netherlands Investable Market | (20,492,143 | ) | (56,324 | ) | 20,548,467 | |||||||
Spain | (33,568,458 | ) | (65,899 | ) | 33,634,357 | |||||||
Sweden | (13,517,934 | ) | (319,161 | ) | 13,837,095 | |||||||
Switzerland | 2,754,127 | 558,225 | (3,312,352 | ) | ||||||||
United Kingdom | 12,240,989 | (839,110 | ) | (11,401,879 | ) |
The tax character of distributions paid during the years ended August 31, 2012 and August 31, 2011 was as follows:
iShares MSCI Index Fund | 2012 | 2011 | ||||||
Austria Investable Market | ||||||||
Ordinary income | $ | 1,874,586 | $ | 3,303,650 | ||||
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|
|
| |||||
Belgium Investable Market | ||||||||
Ordinary income | $ | 1,434,412 | $ | 1,401,041 | ||||
Return of capital | 27,668 | — | ||||||
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| |||||
$ | 1,462,080 | $ | 1,401,041 | |||||
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| |||||
Emerging Markets Eastern Europe | ||||||||
Ordinary income | $ | 999,697 | $ | 575,285 | ||||
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EMU | ||||||||
Ordinary income | $ | 26,115,000 | $ | 27,791,723 | ||||
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| |||||
France | ||||||||
Ordinary income | $ | 8,849,764 | $ | 11,811,674 | ||||
Return of capital | 2,754 | — | ||||||
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| |||||
$ | 8,852,518 | $ | 11,811,674 | |||||
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| |||||
Germany | ||||||||
Ordinary income | $ | 74,836,476 | $ | 93,072,582 | ||||
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| |||||
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iSHARES®, INC.
iShares MSCI Index Fund | 2012 | 2011 | ||||||
Italy | ||||||||
Ordinary income | $ | 4,578,996 | $ | 3,814,673 | ||||
Return of capital | 1,125 | — | ||||||
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| |||||
$ | 4,580,121 | $ | 3,814,673 | |||||
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| |||||
Netherlands Investable Market | ||||||||
Ordinary income | $ | 1,910,545 | $ | 3,654,048 | ||||
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| |||||
Spain | ||||||||
Ordinary income | $ | 11,503,970 | $ | 8,211,532 | ||||
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| |||||
Sweden | ||||||||
Ordinary income | $ | 9,531,005 | $ | 19,236,805 | ||||
Return of capital | 613,518 | — | ||||||
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| |||||
$ | 10,144,523 | $ | 19,236,805 | |||||
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| |||||
Switzerland | ||||||||
Ordinary income | $ | 14,947,529 | $ | 11,911,242 | ||||
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| |||||
United Kingdom | ||||||||
Ordinary income | $ | 49,722,633 | $ | 33,922,128 | ||||
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| |||||
As of August 31, 2012, the tax components of accumulated net earnings (losses) were as follows:
iShares MSCI Index Fund | Undistributed Ordinary Income | Capital Loss Carryforwards | Net Unrealized Gains (Losses) a | Qualified Late-Year Losses b | Total | |||||||||||||||
Austria Investable Market | $ | — | $ | (53,394,481 | ) | $ | (57,368,842 | ) | $ | (9,787,615 | ) | $ | (120,550,938 | ) | ||||||
Belgium Investable Market | — | (40,949,518 | ) | (16,949,115 | ) | (2,505,250 | ) | (60,403,883 | ) | |||||||||||
Emerging Markets Eastern Europe | 75,982 | (448,093 | ) | (8,032,017 | ) | (707,062 | ) | (9,111,190 | ) | |||||||||||
EMU | 1,024,848 | (143,459,680 | ) | (420,454,037 | ) | (24,000,057 | ) | (586,888,926 | ) | |||||||||||
France | — | (14,206,315 | ) | (121,722,822 | ) | (6,947,310 | ) | (142,876,447 | ) | |||||||||||
Germany | — | (107,589,044 | ) | (620,466,421 | ) | (7,622,666 | ) | (735,678,131 | ) | |||||||||||
Italy | — | (34,703,700 | ) | (80,072,608 | ) | (5,622,473 | ) | (120,398,781 | ) | |||||||||||
Netherlands Investable Market | 164,106 | (35,489,370 | ) | (32,534,940 | ) | (3,384,079 | ) | (71,244,283 | ) | |||||||||||
Spain | 2,782,477 | (34,913,308 | ) | (97,369,673 | ) | (15,124,239 | ) | (144,624,743 | ) | |||||||||||
Sweden | — | (32,845,764 | ) | (56,920,074 | ) | (2,723,361 | ) | (92,489,199 | ) | |||||||||||
Switzerland | — | (36,182,064 | ) | (11,086,060 | ) | (4,797,111 | ) | (52,065,235 | ) | |||||||||||
United Kingdom | 9,567,268 | (78,815,341 | ) | (157,027,322 | ) | (25,333,230 | ) | (251,608,625 | ) |
a | The difference between book-basis and tax-basis unrealized gains (losses) was attributable primarily to the tax deferral of losses on wash sales, the realization for tax purposes of unrealized gains/losses on certain futures contracts and the realization for tax purposes of unrealized gains on investments in passive foreign investment companies. |
b | The Funds have elected to defer certain qualified late-year losses and recognize such losses in the year ending August 31, 2013. |
NOTESTO FINANCIAL STATEMENTS | 99 |
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Notes to Financial Statements (Continued)
iSHARES®, INC.
As of August 31, 2012, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:
iShares MSCI Index Fund | Non- Expiring a | Expiring 2013 | Expiring 2014 | Expiring 2015 | Expiring 2016 | Expiring 2017 | Expiring 2018 | Expiring 2019 | Total | |||||||||||||||||||||||||||
Austria Investable Market | $ | 3,424,334 | $ | — | $ | — | $ | 9,795,917 | $ | 2,587,916 | $ | 7,102,366 | $ | 16,657,011 | $ | 13,826,937 | $ | 53,394,481 | ||||||||||||||||||
Belgium Investable Market | 3,414,294 | 33,969 | — | — | 1,698,444 | 5,953,120 | 10,826,174 | 19,023,517 | 40,949,518 | |||||||||||||||||||||||||||
Emerging Markets Eastern Europe | 243,179 | — | — | — | — | — | — | 204,914 | 448,093 | |||||||||||||||||||||||||||
EMU | 16,675,236 | 1,873,963 | — | — | — | 26,644,200 | 68,035,542 | 30,230,739 | 143,459,680 | |||||||||||||||||||||||||||
France | 436,330 | — | — | 158,472 | 335,795 | 3,408,374 | 7,008,530 | 2,858,814 | 14,206,315 | |||||||||||||||||||||||||||
Germany | 9,227,956 | 2,241,687 | — | 4,227,713 | 3,394,735 | 27,790,050 | 28,490,949 | 32,215,954 | 107,589,044 | |||||||||||||||||||||||||||
Italy | 3,331,166 | 527,327 | — | — | 472,268 | 2,743,650 | 18,169,627 | 9,459,662 | 34,703,700 | |||||||||||||||||||||||||||
Netherlands Investable Market | 3,096,503 | 129,137 | 403,525 | 260,715 | 1,195,162 | 5,819,153 | 22,256,170 | 2,329,005 | 35,489,370 | |||||||||||||||||||||||||||
Spain | 5,225,806 | — | — | — | — | 5,946,927 | 15,120,672 | 8,619,903 | 34,913,308 | |||||||||||||||||||||||||||
Sweden | 5,222,903 | — | 107,613 | — | 100,015 | 13,686,746 | 8,483,510 | 5,244,977 | 32,845,764 | |||||||||||||||||||||||||||
Switzerland | 3,464,888 | 354,252 | — | — | — | 2,837,786 | 22,569,380 | 6,955,758 | 36,182,064 | |||||||||||||||||||||||||||
United Kingdom | 7,758,079 | 1,517,783 | 7,063,063 | — | 261,754 | 16,140,312 | 23,559,917 | 22,514,433 | 78,815,341 |
a | Must be utililized prior to losses subject to expiration. |
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.
As of August 31, 2012, 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) | ||||||||||||
Austria Investable Market | $ | 110,626,278 | $ | 691,444 | $ | (58,007,641 | ) | $ | (57,316,197 | ) | ||||||
Belgium Investable Market | 42,551,025 | 1,848,689 | (18,795,940 | ) | (16,947,251 | ) | ||||||||||
Emerging Markets Eastern Europe | 28,560,936 | 97,415 | (8,129,687 | ) | (8,032,272 | ) | ||||||||||
EMU | 1,220,942,350 | 15,670,840 | (436,110,501 | ) | (420,439,661 | ) | ||||||||||
France | 523,071,708 | 2,941,829 | (124,676,693 | ) | (121,734,864 | ) | ||||||||||
Germany | 3,404,027,975 | 52,968,685 | (674,208,220 | ) | (621,239,535 | ) | ||||||||||
Italy | 279,670,644 | 519,176 | (80,593,595 | ) | (80,074,419 | ) | ||||||||||
Netherlands Investable Market | 110,891,277 | 2,226,858 | (34,765,219 | ) | (32,538,361 | ) | ||||||||||
Spain | 304,950,216 | 2,956,815 | (100,329,201 | ) | (97,372,386 | ) | ||||||||||
Sweden | 427,708,063 | 8,806,380 | (65,730,669 | ) | (56,924,289 | ) | ||||||||||
Switzerland | 560,804,945 | 51,338,806 | (62,438,393 | ) | (11,099,587 | ) | ||||||||||
United Kingdom | 1,504,305,460 | 100,407,618 | (257,579,116 | ) | (157,171,498 | ) |
100 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Notes to Financial Statements (Continued)
iSHARES®, INC.
Management has reviewed the tax positions as of August 31, 2012, inclusive of the open tax return years, and has determined that no provision for income tax is required in the Funds’ financial statements.
7. | FINANCIAL FUTURES CONTRACTS |
Each Fund may purchase or sell financial futures contracts in an effort to help such Fund track its underlying index. A futures contract is a standardized, exchange-traded agreement to buy and sell a financial instrument at a set price on a future date. Upon entering into a futures contract, the Fund is required to pledge to the executing broker which holds segregated from its own assets, an amount of cash, U.S. government securities or other high-quality debt and equity securities equal to the minimum initial margin requirements of the exchange on which the contract is traded. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as margin variation and are recorded by the Fund as unrealized appreciation or depreciation. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Losses may arise if the value of a futures contract decreases due to an unfavorable change in the market rates or values of the underlying instrument during the term of the contract or if the counterparty does not perform under the contract. The use of futures contracts also involves the risk of an imperfect correlation in the movements in the price of futures contracts and the assets underlying such contracts.
The following table shows the values of futures contracts held as of August 31, 2012 and the related locations in the Statements of Assets and Liabilities, presented by risk exposure category:
Assets | ||||||||
iShares MSCI Germany Index Fund | iShares MSCI United Kingdom Index Fund | |||||||
Equity contracts: | ||||||||
Variation margin/Net assets consist of — net unrealized appreciation (depreciation)a | $ | 1,632,458 | $ | 33,022 | ||||
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| |||||
a | Represents cumulative appreciation of futures contracts as reported in the Schedules of Investments. |
NOTESTO FINANCIAL STATEMENTS | 101 |
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Notes to Financial Statements (Continued)
iSHARES®, INC.
The following table shows the realized and unrealized gains (losses) on futures contracts held during the year ended August 31, 2012 and the related locations in the Statements of Operations, presented by risk exposure category:
Net Realized Gain (Loss) | ||||||||
iShares MSCI Germany Index Fund | iShares MSCI United Kingdom Index Fund | |||||||
Equity contracts: | ||||||||
Futures contracts | $ | 23,600 | $ | (128,697 | ) | |||
|
|
|
| |||||
Net Change in Unrealized Appreciation/Depreciation | ||||||||
iShares MSCI Germany Index Fund | iShares MSCI United Kingdom Index Fund | |||||||
Equity contracts: | ||||||||
Futures contracts | $ | 1,632,458 | $ | 33,022 | ||||
|
|
|
| |||||
The following table shows the average quarter-end balances of open futures contracts for the year ended August 31, 2012:
iShares MSCI Germany Index Fund | iShares MSCI United Kingdom Index Fund | |||||||
Average number of contracts purchased | 63 | 89 | ||||||
Average value of contracts purchased | $ | 13,013,200 | $ | 7,879,728 |
8. | SUBSEQUENT EVENTS |
On or about November 9, 2012, the investment objective of the iShares MSCI Belgium Investable Market Index Fund will change to track a new underlying index, the MSCI Belgium IMI 25/50 Index, which is designed to measure broad-based equity market performance in Belgium where a capping methodology is applied that limits the weight of any single component to a maximum of 25% of the index. In addition, the Fund will change its name to the iShares MSCI Belgium Capped Investable Market Index Fund.
102 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of
iShares, Inc.:
In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the iShares MSCI Austria 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 (the “Funds”), at August 31, 2012, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and 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 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, 2012 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
October 23, 2012
REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 103 |
Table of Contents
iSHARES®, INC.
For the fiscal year ended August 31, 2012, 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 | $ | 2,047,136 | $ | 248,503 | ||||
Belgium Investable Market | 1,076,619 | 122,368 | ||||||
Emerging Markets Eastern Europe | 1,360,995 | 199,049 | ||||||
EMU | 32,548,010 | 4,184,317 | ||||||
France | 11,669,353 | 1,733,748 | ||||||
Germany | 99,832,349 | 13,186,028 | ||||||
Italy | 5,967,943 | 862,996 | ||||||
Netherlands Investable Market | 2,253,486 | 332,396 | ||||||
Spain | 11,343,132 | 851,480 | ||||||
Sweden | 13,446,352 | 2,015,790 | ||||||
Switzerland | 19,130,976 | 2,452,125 | ||||||
United Kingdom | 59,332,475 | 683,787 |
For corporate shareholders, 0.68% of the income dividends paid by the iShares MSCI Switzerland Index Fund during the fiscal year ended August 31, 2012 qualified for the dividends-received deduction.
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, 2012:
iShares MSCI Index Fund | Qualified Dividend Income | |||
Austria Investable Market | $ | 1,946,248 | ||
Belgium Investable Market | 928,785 | |||
Emerging Markets Eastern Europe | 1,198,746 | |||
EMU | 30,299,317 | |||
France | 10,583,512 | |||
Germany | 88,022,504 |
iShares MSCI Index Fund | Qualified Dividend Income | |||
Italy | $ | 5,441,992 | ||
Netherlands Investable Market | 2,212,668 | |||
Spain | 10,968,665 | |||
Sweden | 11,546,795 | |||
Switzerland | 17,399,654 | |||
United Kingdom | 50,406,420 |
In February 2013, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2012. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.
104 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Board Review and Approval of Investment Advisory
Contract (Unaudited)
iSHARES®, INC.
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 annually to consider the Investment Advisory Contract between the Company and BFA (the “Advisory Contract”) on behalf of the Funds. The Independent Directors requested, and BFA provided, such information as the Independent Directors, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of Independent Directors (the “15(c) Committee”), with independent counsel, met with management on April 19, 2012, April 27, 2012, and May 16, 2012, to discuss the types of information the Independent Directors required and the manner in which management would organize and present such information. At a meeting held on May 17, 2012, management presented information to the Board relating to the continuance of the Advisory Contract, and the Board, including the Independent Directors, reviewed and discussed such information at length. The Independent Directors requested from management certain additional information, and the 15(c) Committee met with management on June 8, 2012, to discuss the additional requests. At a meeting held on June 20-21, 2012, the Board, including the Independent Directors, reviewed additional information provided by management in response to these requests. The Board, including a majority of the Independent Directors, approved the continuance of the Advisory Contract for the Funds, based on a review of qualitative and quantitative information provided by BFA, including a review of supplemental information management provided at the request of the Independent Directors. The Board noted its satisfaction with the extent and quality of information, and detailed responses, provided by BFA. The Independent Directors were advised by their independent counsel throughout the process. In approving the Advisory Contract for the Funds, the Board, including the Independent Directors, considered the following factors, no one of which was controlling, and made the following conclusions:
Expenses and Performance of the Funds — The Board reviewed statistical information prepared by Lipper Inc. (“Lipper”), an independent provider of investment company data, regarding the expense ratio components, including actual advisory fees, waivers/reimbursements, and gross and net total expenses of each Fund in comparison with the same information for other registered investment companies objectively selected by Lipper as comprising such 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, sponsor, inception date, or other differentiating factors, but that 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 those tracked by the Funds, the Lipper Group 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), as applicable. 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 also received a detailed explanation from BFA regarding its rationale for including funds that had been excluded from Lipper’s consideration due to Lipper’s methodology parameters, as well as information showing the effect of including these additional funds in the analysis. The Board further noted that due to the limitations in providing comparable funds in the various Lipper Groups, the statistical information may or may not provide meaningful direct comparisons to the Funds.
The Board also noted that the investment advisory fees and overall expenses for the Funds compared favorably to the investment advisory fee rates and overall expenses of the funds in their respective Lipper Group.
In addition, the Board reviewed statistical information prepared by Lipper regarding the performance of each Fund for the one-, three-, five-, ten-year, and since inception periods, as applicable, and the “last quarter” period ended December 31, 2011, and a comparison of each Fund’s performance to its performance benchmark index for the same periods. To the extent that any of the comparison funds included in the Lipper Group track the same index as any particular Fund, Lipper also provided, and the Board reviewed, a comparison of such Fund’s performance to that of such relevant comparison funds for the same periods. The Board noted that the Funds generally performed in line with their respective performance benchmark indexes over the relevant periods. In considering this information, the Board noted that the
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 105 |
Table of Contents
Board Review and Approval of Investment Advisory
Contract (Unaudited) (Continued)
iSHARES®, INC.
Lipper Group includes funds that may have different investment objectives and/or benchmarks from the Funds. In addition, the Board noted that each Fund seeks to track its benchmark index and that, during the prior year, the Board received periodic reports on the Funds’ performance in comparison with their relevant benchmark indexes. Such periodic comparative performance information was also considered by the Board.
Based on this review, the other factors considered at the meeting, and their general knowledge of mutual fund pricing, the Board concluded that the investment advisory fees and expense levels and the historical performance of each Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA over prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the Funds and their shareholders. The Board noted that BFA became an indirect wholly-owned subsidiary of BlackRock, Inc. (“BlackRock”) in December 2009. The Board acknowledged that additional resources to support the Funds and their shareholders have been added or enhanced since then, including in such areas as investor education, product management, customized portfolio consulting support, and capital markets support. The Board also considered BFA’s compliance program and its compliance record with respect to the Funds. In that regard, 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 on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Funds. In addition to the above considerations, the Board reviewed and considered BFA’s investment and risk management processes and strategies, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that each Fund had met its investment objective consistently since its respective inception date.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Funds under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Costs of Services Provided to Funds and Profits Realized by BFA and Affiliates — The Board reviewed information about the profitability to BFA of the Funds based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and all other sources of revenue and expense to BFA and its affiliates from the Funds’ operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, noting that the 15(c) Committee had focused on the methodology and proposed presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC from securities lending by the Funds. The Board also discussed BFA’s profit margin as reflected in the Funds’ profitability analysis and reviewed information regarding economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Funds and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.
Economies of Scale — The Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Funds’ assets, noting that the issue of economies of scale had been focused on extensively by the 15(c) Committee during its meetings and addressed by management. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through breakpoints, waivers, or other fee reductions, as well as through additional investment in the iShares
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Table of Contents
Board Review and Approval of Investment Advisory
Contract (Unaudited) (Continued)
iSHARES®, INC.
business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BFA’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished between fixed and variable costs, and explained how the nature of such costs may impact the existence of scale benefits. The Board noted that the Advisory Contract for the Funds already provided for breakpoints in the Funds’ investment advisory fee rates as the assets of the Funds, on an aggregated basis with the assets of certain other iShares funds, increase. The Board noted that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding new or revised breakpoints in the future. Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider this issue at least annually, concluded that the structure of the investment advisory fees reflects appropriate sharing of potential economies of scale with the Funds’ shareholders and supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end and closed-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds and institutional separate accounts (together, the “Other Accounts”). The Board noted that BFA and its affiliates do not manage Other Accounts with substantially similar investment objectives and strategies as the Funds, except for iShares MSCI EMU Index Fund, iShares MSCI Sweden Index Fund, iShares MSCI Switzerland Index Fund, and iShares MSCI United Kingdom Index Fund. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Funds, including in terms of the different generally more extensive services provided, as well as other significant differences in the approach of BFA and its affiliates to the Funds, on one hand, and Other Accounts, on the other. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks of managing and providing other services to the Funds, as publicly traded exchange traded funds, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also considered the “all-inclusive” nature of the Funds’ advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rates under the Advisory Contract for the Funds were generally higher than the investment advisory/management fee rates for the Other Accounts that are institutional clients of BFA (or its affiliates) and concluded that the differences appeared to be consistent with the factors discussed.
Other Benefits to BFA and/or its Affiliates — The Board reviewed ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Funds by BFA, such as payment of revenue to BTC, the Funds’ securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Funds in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board noted that BFA generally does 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 Funds. The Board further noted that any portfolio transactions on behalf of the Funds 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. The Board concluded that any such ancillary benefits would not be disadvantageous to the Funds’ shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 107 |
Table of Contents
Board Review and Approval of Investment Advisory
Contract (Unaudited) (Continued)
iSHARES®, INC.
Based on the considerations described above, the Board determined that the investment advisory fee rates under the Advisory Contract do not constitute fees that are so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that it is in the best interest of the Funds and their shareholders to approve the continuance of the Advisory Contract for the coming year.
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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 | ||||||||||||||||||||||||
Austria Investable Market | $ | 0.37621 | $ | — | $ | 0.11710 | $ | 0.49331 | 76 | % | — | % | 24 | % | 100 | % | ||||||||||||||||
Belgium Investable Market | 0.67745 | — | — | 0.67745 | 100 | — | — | 100 | ||||||||||||||||||||||||
Emerging Markets Eastern Europe | 1.12532 | — | — | 1.12532 | 100 | — | — | 100 | ||||||||||||||||||||||||
EMU | 1.09783 | — | — | 1.09783 | 100 | — | — | 100 | ||||||||||||||||||||||||
France | 0.69160 | — | — | 0.69160 | 100 | — | — | 100 | ||||||||||||||||||||||||
Italy | 0.41782 | — | — | 0.41782 | 100 | — | — | 100 | ||||||||||||||||||||||||
Netherlands Investable Market | 0.52797 | — | — | 0.52797 | 100 | — | — | 100 | ||||||||||||||||||||||||
Spain | 2.79582 | — | — | 2.79582 | 100 | — | — | 100 | ||||||||||||||||||||||||
Switzerland | 0.65115 | — | — | 0.65115 | 100 | — | — | 100 | ||||||||||||||||||||||||
United Kingdom | 0.61883 | — | — | 0.61883 | 100 | — | — | 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 are 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 quarter-end. The specific periods covered for each Fund are disclosed in the table for such Fund.
SUPPLEMENTAL INFORMATION | 109 |
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Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
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 Austria Investable Market Index Fund
Period Covered: January 1, 2007 through June 30, 2012
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% | 4 | 0.29 | ||||||
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% | 14 | 1.01 | ||||||
Greater than 1.5% and Less than 2.0% | 25 | 1.81 | ||||||
Greater than 1.0% and Less than 1.5% | 81 | 5.85 | ||||||
Greater than 0.5% and Less than 1.0% | 189 | 13.66 | ||||||
Between 0.5% and –0.5% | 706 | 51.02 | ||||||
Less than –0.5% and Greater than –1.0% | 159 | 11.49 | ||||||
Less than –1.0% and Greater than –1.5% | 93 | 6.72 | ||||||
Less than –1.5% and Greater than –2.0% | 47 | 3.40 | ||||||
Less than –2.0% and Greater than –2.5% | 25 | 1.81 | ||||||
Less than –2.5% and Greater than –3.0% | 9 | 0.65 | ||||||
Less than –3.0% and Greater than –3.5% | 6 | 0.43 | ||||||
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% | 6 | 0.43 | ||||||
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1,384 | 100.00 | % | ||||||
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Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Belgium Investable Market Index Fund
Period Covered: January 1, 2007 through June 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 4.5% | 4 | 0.29 | % | |||||
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% | 31 | 2.24 | ||||||
Greater than 1.0% and Less than 1.5% | 69 | 4.99 | ||||||
Greater than 0.5% and Less than 1.0% | 181 | 13.08 | ||||||
Between 0.5% and –0.5% | 768 | 55.49 | ||||||
Less than –0.5% and Greater than –1.0% | 168 | 12.14 | ||||||
Less than –1.0% and Greater than –1.5% | 81 | 5.85 | ||||||
Less than –1.5% and Greater than –2.0% | 30 | 2.17 | ||||||
Less than –2.0% and Greater than –2.5% | 10 | 0.72 | ||||||
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% | 3 | 0.22 | ||||||
Less than –4.0% | 5 | 0.36 | ||||||
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1,384 | 100.00 | % | ||||||
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SUPPLEMENTAL INFORMATION | 111 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Emerging Market Eastern Europe Index Fund
Period Covered: October 1, 2009 through June 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 3.0% | 2 | 0.29 | % | |||||
Greater than 2.5% and Less than 3.0% | 3 | 0.43 | ||||||
Greater than 2.0% and Less than 2.5% | 4 | 0.58 | ||||||
Greater than 1.5% and Less than 2.0% | 22 | 3.17 | ||||||
Greater than 1.0% and Less than 1.5% | 45 | 6.49 | ||||||
Greater than 0.5% and Less than 1.0% | 158 | 22.80 | ||||||
Between 0.5% and –0.5% | 316 | 45.61 | ||||||
Less than –0.5% and Greater than –1.0% | 60 | 8.66 | ||||||
Less than –1.0% and Greater than –1.5% | 42 | 6.06 | ||||||
Less than –1.5% and Greater than –2.0% | 23 | 3.32 | ||||||
Less than –2.0% and Greater than –2.5% | 8 | 1.15 | ||||||
Less than –2.5% and Greater than –3.0% | 3 | 0.43 | ||||||
Less than –3.0% and Greater than –3.5% | 5 | 0.72 | ||||||
Less than –3.5% and Greater than –4.0% | 2 | 0.29 | ||||||
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| |||||
693 | 100.00 | % | ||||||
|
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|
|
iShares MSCI EMU Index Fund
Period Covered: January 1, 2007 through June 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 3.5% | 13 | 0.94 | % | |||||
Greater than 3.0% and Less than 3.5% | 5 | 0.36 | ||||||
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% | 32 | 2.31 | ||||||
Greater than 1.0% and Less than 1.5% | 73 | 5.27 | ||||||
Greater than 0.5% and Less than 1.0% | 195 | 14.09 | ||||||
Between 0.5% and –0.5% | 764 | 55.20 | ||||||
Less than –0.5% and Greater than –1.0% | 158 | 11.42 | ||||||
Less than –1.0% and Greater than –1.5% | 68 | 4.92 | ||||||
Less than –1.5% and Greater than –2.0% | 32 | 2.31 | ||||||
Less than –2.0% and Greater than –2.5% | 10 | 0.72 | ||||||
Less than –2.5% and Greater than –3.0% | 8 | 0.58 | ||||||
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% | 1 | 0.07 | ||||||
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1,384 | 100.00 | % | ||||||
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Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI France Index Fund
Period Covered: January 1, 2007 through June 30, 2012
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% | 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% | 10 | 0.72 | ||||||
Greater than 1.5% and Less than 2.0% | 31 | 2.24 | ||||||
Greater than 1.0% and Less than 1.5% | 81 | 5.85 | ||||||
Greater than 0.5% and Less than 1.0% | 212 | 15.33 | ||||||
Between 0.5% and –0.5% | 747 | 53.98 | ||||||
Less than –0.5% and Greater than –1.0% | 153 | 11.06 | ||||||
Less than –1.0% and Greater than –1.5% | 68 | 4.92 | ||||||
Less than –1.5% and Greater than –2.0% | 33 | 2.39 | ||||||
Less than –2.0% and Greater than –2.5% | 11 | 0.79 | ||||||
Less than –2.5% and Greater than –3.0% | 10 | 0.72 | ||||||
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 | ||||||
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1,384 | 100.00 | % | ||||||
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SUPPLEMENTAL INFORMATION | 113 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Germany Index Fund
Period Covered: January 1, 2007 through June 30, 2012
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% | 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% | 15 | 1.08 | ||||||
Greater than 1.5% and Less than 2.0% | 22 | 1.59 | ||||||
Greater than 1.0% and Less than 1.5% | 71 | 5.13 | ||||||
Greater than 0.5% and Less than 1.0% | 199 | 14.39 | ||||||
Between 0.5% and –0.5% | 808 | 58.39 | ||||||
Less than –0.5% and Greater than –1.0% | 139 | 10.05 | ||||||
Less than –1.0% and Greater than –1.5% | 67 | 4.84 | ||||||
Less than –1.5% and Greater than –2.0% | 21 | 1.52 | ||||||
Less than –2.0% and Greater than –2.5% | 11 | 0.79 | ||||||
Less than –2.5% and Greater than –3.0% | 5 | 0.36 | ||||||
Less than –3.0% and Greater than –3.5% | 3 | 0.22 | ||||||
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 | ||||||
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Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Italy Index Fund
Period Covered: January 1, 2007 through June 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 5.5% | 3 | 0.22 | % | |||||
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% | 3 | 0.22 | ||||||
Greater than 3.0% and Less than 3.5% | 5 | 0.36 | ||||||
Greater than 2.5% and Less than 3.0% | 6 | 0.43 | ||||||
Greater than 2.0% and Less than 2.5% | 13 | 0.94 | ||||||
Greater than 1.5% and Less than 2.0% | 33 | 2.39 | ||||||
Greater than 1.0% and Less than 1.5% | 97 | 7.01 | ||||||
Greater than 0.5% and Less than 1.0% | 195 | 14.09 | ||||||
Between 0.5% and –0.5% | 720 | 52.03 | ||||||
Less than –0.5% and Greater than –1.0% | 155 | 11.20 | ||||||
Less than –1.0% and Greater than –1.5% | 81 | 5.85 | ||||||
Less than –1.5% and Greater than –2.0% | 30 | 2.17 | ||||||
Less than –2.0% and Greater than –2.5% | 15 | 1.08 | ||||||
Less than –2.5% and Greater than –3.0% | 9 | 0.65 | ||||||
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% | 4 | 0.29 | ||||||
Less than –4.5% | 1 | 0.07 | ||||||
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1,384 | 100.00 | % | ||||||
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SUPPLEMENTAL INFORMATION | 115 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Netherlands Investable Market Index Fund
Period Covered: January 1, 2007 through June 30, 2012
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% | 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% | 13 | 0.94 | ||||||
Greater than 1.5% and Less than 2.0% | 23 | 1.66 | ||||||
Greater than 1.0% and Less than 1.5% | 72 | 5.20 | ||||||
Greater than 0.5% and Less than 1.0% | 204 | 14.75 | ||||||
Between 0.5% and –0.5% | 757 | 54.71 | ||||||
Less than –0.5% and Greater than –1.0% | 162 | 11.71 | ||||||
Less than –1.0% and Greater than –1.5% | 81 | 5.85 | ||||||
Less than –1.5% and Greater than –2.0% | 25 | 1.81 | ||||||
Less than –2.0% and Greater than –2.5% | 10 | 0.72 | ||||||
Less than –2.5% and Greater than –3.0% | 8 | 0.58 | ||||||
Less than –3.0% and Greater than –3.5% | 6 | 0.43 | ||||||
Less than –3.5% and Greater than –4.0% | 1 | 0.07 | ||||||
Less than –4.0% and Greater than –4.5% | 2 | 0.14 | ||||||
Less than –4.5% | 3 | 0.22 | ||||||
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Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Spain Index Fund
Period Covered: January 1, 2007 through June 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 3.5% | 11 | 0.79 | % | |||||
Greater than 3.0% and Less than 3.5% | 4 | 0.29 | ||||||
Greater than 2.5% and Less than 3.0% | 4 | 0.29 | ||||||
Greater than 2.0% and Less than 2.5% | 20 | 1.45 | ||||||
Greater than 1.5% and Less than 2.0% | 34 | 2.46 | ||||||
Greater than 1.0% and Less than 1.5% | 84 | 6.07 | ||||||
Greater than 0.5% and Less than 1.0% | 186 | 13.44 | ||||||
Between 0.5% and –0.5% | 722 | 52.17 | ||||||
Less than –0.5% and Greater than –1.0% | 163 | 11.78 | ||||||
Less than –1.0% and Greater than –1.5% | 87 | 6.29 | ||||||
Less than –1.5% and Greater than –2.0% | 35 | 2.53 | ||||||
Less than –2.0% and Greater than –2.5% | 14 | 1.01 | ||||||
Less than –2.5% and Greater than –3.0% | 11 | 0.79 | ||||||
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 | ||||||
|
|
|
| |||||
1,384 | 100.00 | % | ||||||
|
|
|
|
SUPPLEMENTAL INFORMATION | 117 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Sweden Index Fund
Period Covered: January 1, 2007 through June 30, 2012
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% | 6 | 0.43 | ||||||
Greater than 2.5% and Less than 3.0% | 9 | 0.65 | ||||||
Greater than 2.0% and Less than 2.5% | 14 | 1.01 | ||||||
Greater than 1.5% and Less than 2.0% | 43 | 3.11 | ||||||
Greater than 1.0% and Less than 1.5% | 90 | 6.50 | ||||||
Greater than 0.5% and Less than 1.0% | 215 | 15.53 | ||||||
Between 0.5% and –0.5% | 645 | 46.61 | ||||||
Less than –0.5% and Greater than –1.0% | 163 | 11.78 | ||||||
Less than –1.0% and Greater than –1.5% | 87 | 6.29 | ||||||
Less than –1.5% and Greater than –2.0% | 47 | 3.40 | ||||||
Less than –2.0% and Greater than –2.5% | 18 | 1.30 | ||||||
Less than –2.5% and Greater than –3.0% | 13 | 0.94 | ||||||
Less than –3.0% and Greater than –3.5% | 6 | 0.43 | ||||||
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 | ||||||
|
|
|
| |||||
1,384 | 100.00 | % | ||||||
|
|
|
|
118 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Switzerland Index Fund
Period Covered: January 1, 2007 through June 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 4.0% | 7 | 0.51 | % | |||||
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% | 24 | 1.73 | ||||||
Greater than 1.0% and Less than 1.5% | 58 | 4.19 | ||||||
Greater than 0.5% and Less than 1.0% | 219 | 15.83 | ||||||
Between 0.5% and –0.5% | 830 | 59.97 | ||||||
Less than –0.5% and Greater than –1.0% | 126 | 9.10 | ||||||
Less than –1.0% and Greater than –1.5% | 65 | 4.70 | ||||||
Less than –1.5% and Greater than –2.0% | 16 | 1.16 | ||||||
Less than –2.0% and Greater than –2.5% | 15 | 1.08 | ||||||
Less than –2.5% and Greater than –3.0% | 4 | 0.29 | ||||||
Less than –3.0% | 6 | 0.43 | ||||||
|
|
|
| |||||
1,384 | 100.00 | % | ||||||
|
|
|
|
SUPPLEMENTAL INFORMATION | 119 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI United Kingdom Index Fund
Period Covered: January 1, 2007 through June 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 4.5% | 5 | 0.36 | % | |||||
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% | 1 | 0.07 | ||||||
Greater than 2.5% and Less than 3.0% | 7 | 0.51 | ||||||
Greater than 2.0% and Less than 2.5% | 15 | 1.08 | ||||||
Greater than 1.5% and Less than 2.0% | 45 | 3.25 | ||||||
Greater than 1.0% and Less than 1.5% | 144 | 10.40 | ||||||
Greater than 0.5% and Less than 1.0% | 354 | 25.58 | ||||||
Between 0.5% and –0.5% | 612 | 44.22 | ||||||
Less than –0.5% and Greater than –1.0% | 103 | 7.45 | ||||||
Less than –1.0% and Greater than –1.5% | 43 | 3.11 | ||||||
Less than –1.5% and Greater than –2.0% | 21 | 1.52 | ||||||
Less than –2.0% and Greater than –2.5% | 7 | 0.51 | ||||||
Less than –2.5% and Greater than –3.0% | 7 | 0.51 | ||||||
Less than –3.0% and Greater than –3.5% | 5 | 0.36 | ||||||
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 | ||||||
|
|
|
| |||||
1,384 | 100.00 | % | ||||||
|
|
|
|
120 | 2012 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 he or she resigns, is removed, dies, retires or becomes incapacitated. The President, Treasurer and Secretary shall each hold office until their successors are chosen and qualified, and all other officers shall hold office until he or she resigns or is removed. Directors who are not interested persons (as defined in the 1940 Act) are referred to as Independent Directors.
The registered investment companies advised by BFA or its affiliates are organized into one complex of closed-end funds, two complexes of open-end funds and one complex of exchange-traded funds (“Exchange-Traded Fund Complex”) (each, a “BlackRock Fund Complex”). Each Fund is included in the BlackRock Fund Complex referred to as the Exchange-Traded Fund Complex. Each Director of iShares, Inc. also serves as a Trustee of iShares Trust, a Director of iShares MSCI Russia Capped Index Fund, Inc. and a Trustee of iShares U.S. ETF Trust and, as a result, oversees a total of 276 funds within the Exchange-Traded 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 Robert H. Silver 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-iShares (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 (55) | 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); President of Board of Directors, Hope & Heroes Children’s Cancer Fund (since 2002); President of the Board of Directors, Periwinkle Theatre for Youth (since 1983). | Director of BlackRock, Inc. (since 2007); Trustee of iShares Trust (since 2009); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). | |||
Michael Lathamb (47) | Director (since 2010); President (since 2007). | Chairman of iShares, BlackRock (since 2011); Global Chief Executive Officer of iShares, BlackRock (2010-2011); Managing Director, BlackRock (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, BGI (2003-2007). | Trustee of iShares Trust (since 2010); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). |
a | Robert S. Kapito is deemed to be an “interested person” (as defined in the 1940 Act) of the Trust 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 Trust due to his affiliations with BlackRock, Inc. and its affiliates. |
DIRECTORAND OFFICER INFORMATION | 121 |
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 | |||
Robert H. Silver (57) | Director (since 2007); Independent Chairman (since 2012). | President and Co-Founder of The Bravitas Group, Inc. (since 2006); Director and Vice Chairman of the YMCA of Greater NYC (2001-2011); Broadway Producer (2006-2011); 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); President and Chief Operating Officer of UBS Financial Services Inc. (formerly Pain Webber Inc.) (2004-2005) and various executive positions with UBS and its affiliates (1988-2005); CPA and Audit Manager of KPMG, LLP (formerly Peat Marwick Mitchell) (1977-1983). | Trustee of iShares Trust (since 2007); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Independent Chairman of iShares, Inc., iShares MSCI Russia Capped Index Fund, Inc. and iShares U.S. ETF Trust (since 2012). | |||
Cecilia H. Herbert (63) | Director (since 2005); Nominating and Governance Committee Chair and Equity Plus Committee Chair (since 2012). | Director (since 1998) and President (2007-2011) of the Board of Directors, Catholic Charities CYO; Trustee (since 2002) and Chair of the Finance Committee (2006-2009) and Investment Committee (since 2006), The Thacher School; Trustee of Pacific Select Funds (2004-2005); Member (since 1994) and Chair (1994-2005) of the Investment Committee, Archdiocese of San Francisco. | Trustee of iShares Trust (since 2005); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of Forward Funds (35 portfolios) (since 2009). | |||
Charles A. Hurty (69) | Director (since 2005); Audit Committee Chair (since 2006). | Retired; Partner, KPMG LLP (1968-2001). | Trustee of iShares Trust (since 2005); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of GMAM Absolute Return Strategy Fund (1 portfolio) (since 2002); Director of SkyBridge Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (1 portfolio) (since 2002). | |||
John E. Kerrigan (57) | Director (since 2005); Fixed Income Plus Committee Chair (since 2012). | Chief Investment Officer, Santa Clara University (since 2002). | Trustee of iShares Trust (since 2005); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). |
122 | 2012 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 | |||
John E. Martinez (51) | Director (since 2003); Securities Lending Committee Chair (since 2012). | Director of FirstREX Agreement Corp. (formerly EquityRock, Inc.) (since 2005). | Trustee of iShares Trust (since 2003); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). | |||
George G.C. Parker (73) | Director (since 2002). | Dean Witter Distinguished Professor of Finance, Emeritus, Stanford University Graduate School of Business (Professor since 1973; Emeritus since 2006). | Trustee of iShares Trust (since 2002); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of Tejon Ranch Company (since 1999); Director of Threshold Pharmaceuticals (since 2004); Director of Colony Financial, Inc. (since 2009); Director of First Republic Bank (since 2010). | |||
Madhav V. Rajan (48) | Director (since 2011); 15(c) Committee Chair (since 2012). | Robert K. Jaedicke Professor of Accounting and Senior Associate Dean for Academic Affairs and Head of MBA Program, Stanford University Graduate School of Business (since 2001); Professor of Law (by courtesy), Stanford Law School (since 2005); Visiting Professor, University of Chicago (Winter 2007-2008). | Trustee of iShares Trust (since 2011); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2011); Trustee of iShares U.S. ETF Trust (since 2011). |
DIRECTORAND OFFICER INFORMATION | 123 |
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 | ||
Edward B. Baer (44) | Vice President and Chief Legal Officer (since 2012). | Managing Director, BlackRock (since 2006). | ||
Eilleen M. Clavere (60) | Secretary (since 2007). | Director, BlackRock (since 2009); Director of Legal Administration of Intermediary Investor Business, BGI (2006-2009). | ||
Jack Gee (53) | Treasurer and Chief Financial Officer (since 2008). | Managing Director, BlackRock (since 2009); Senior Director of Fund Administration of Intermediary Investor Business, BGI (2009); Director of Fund Administration of Intermediary Investor Business, BGI (2004-2009). | ||
Amy Schioldager (50) | Executive Vice President (since 2007). | Managing Director, BlackRock (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008). | ||
Ira P. Shapiro (49) | Vice President (since 2007). | Managing Director, BlackRock (since 2009); Chief Legal Officer, Exchange-Traded Funds Complex (2007-2012); Associate General Counsel, BGI (2004-2009). | ||
Scott Radell (43) | Executive Vice President (since 2012). | Managing Director, BlackRock (since 2009); Head of Portfolio Solutions, BGI (2007-2009); Credit Portfolio Manager, BGI (2005-2007). |
124 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes:
NOTES | 125 |
Table of Contents
Notes:
126 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
For more information visit www.iShares.com
or call 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 BlackRock Investments, LLC (together with its affiliates, “BlackRock”).
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds. BlackRock is not affiliated with the company listed above.
A description of the policies that the 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 daily and monthly basis on the Funds’ website.
©2012 BlackRock. All rights reserved. iShares® and BlackRock® are registered trademarks of BlackRock. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.
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iS-AR-82-0812
Table of Contents
![]() | August 31, 2012 |
2012 Annual Report
iShares, Inc.
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
Table of Contents
5 | ||||
26 | ||||
28 | ||||
28 | ||||
31 | ||||
33 | ||||
44 | ||||
46 | ||||
49 | ||||
51 | ||||
54 | ||||
57 | ||||
60 | ||||
71 | ||||
80 | ||||
94 | ||||
95 | ||||
Board Review and Approval of Investment Advisory Contract (Unaudited) | 96 | |||
103 | ||||
113 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI AUSTRALIA INDEX FUND
Performance as of August 31, 2012
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
1.84% | 1.56% | 2.15% | 1.63% | 1.49% | 1.69% | 14.35% | 14.37% | 14.15% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
1.84% | 1.56% | 2.15% | 8.44% | 7.69% | 8.75% | 282.33% | 282.84% | 275.75% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
“Average Annual Total Returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 5 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI AUSTRALIA INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector* | Percentage of Net Assets |
Financial | 47.89 | % | ||
Basic Materials | 19.40 | |||
Consumer Non-Cyclical | 11.48 | |||
Consumer Cyclical | 5.65 | |||
Industrial | 4.82 | |||
Energy | 4.56 | |||
Utilities | 2.61 | |||
Communications | 2.02 | |||
Technology | 0.42 | |||
Short-Term and Other Net Assets | 1.15 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
BHP Billiton Ltd. | 11.69 | % | ||
Commonwealth Bank of Australia | 9.94 | |||
Westpac Banking Corp. | 8.63 | |||
Australia and New Zealand Banking Group Ltd. | 7.58 | |||
National Australia Bank Ltd. | 6.44 | |||
Woolworths Ltd. | 4.15 | |||
Wesfarmers Ltd. | 3.96 | |||
CSL Ltd. | 2.58 | |||
Woodside Petroleum Ltd. | 2.57 | |||
Rio Tinto Ltd. | 2.45 | |||
|
| |||
TOTAL | 59.99 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI Australia Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Australia IndexSM (the “Index”). The Index consists of stocks traded primarily on the Australian Stock Exchange. 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, 2012 (the “reporting period”), the total return for the Fund was 1.84%, net of fees, while the total return for the Index was 2.15%.
The Australian equity market, as represented by the Index, delivered positive returns for the reporting period, despite slow global economic conditions. Because of Australia’s abundant natural resources, including coal, iron ore, copper, gold, and natural gas, its economy relies heavily on mining and exports of natural resources. During much of the reporting period, the Australian economy continued to benefit from a boom in its mining sector: gross domestic product (GDP) growth was solid, expanding 3.7% in the second quarter of 2012 versus a year earlier. Unemployment levels remained just above 5%, and exports, which reached an all-time high in August 2011, remained at healthy levels.
However, economic slowdown in China — Australia’s largest commodity export market — as well as the ongoing sovereign debt crisis in Europe and lower commodity prices sparked concerns about the impact on Australia’s mining industry in particular, as well as its overall economy. In an effort to support its domestic economy and spur domestic consumption, the Reserve Bank of Australia lowered interest rates in May and June 2012 a cumulative 0.75%, reducing its target rate to 3.50%. Household consumption as well as housing prices climbed during the remainder of the reporting period, although consumer sentiment declined modestly. In the final months of the reporting period, though, prices for iron ore and other commodities dropped sharply, and the robust levels of investment spending within the mining industry contracted.
6 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI AUSTRALIA INDEX FUND
Sector performance was varied during the reporting period. The financials sector, which comprised 45% of the Index on average, posted solid results and was the strongest contributor to Index gains. The traditionally economically defensive consumer staples and health care sectors also contributed positively to Index performance. The materials sector, which experienced a sharp decline in commodity prices late in the reporting period, declined. Because it represented approximately 26% of the Index throughout the reporting period, the materials sector detracted meaningfully from Index returns. The energy sector also lost ground as oil and natural gas prices fell during the reporting period.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 7 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI HONG KONG INDEX FUND
Performance as of August 31, 2012
Average Annual Total Returns | ||||||||||||||||||||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||||||||||||
(0.33)% | (0.43)% | (0.01)% | 1.83% | 1.74% | 2.36% | 10.77% | 10.94% | 11.47% | ||||||||||||||||||||||||||
Cumulative Total Returns | ||||||||||||||||||||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||||||||||||
(0.33)% | (0.43)% | (0.01)% | 9.48% | 9.00% | 12.39% | 178.17% | 182.33% | 196.28% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
“Average Annual Total Returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
8 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI HONG KONG INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector* | Percentage of Net Assets |
Financial | 55.58 | % | ||
Consumer Cyclical | 12.93 | |||
Utilities | 12.91 | |||
Diversified | 12.82 | |||
Industrial | 3.07 | |||
Consumer Non-Cyclical | 0.84 | |||
Communications | 0.77 | |||
Technology | 0.70 | |||
Short-Term and Other Net Assets | 0.38 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
AIA Group Ltd. | 11.69 | % | ||
Sun Hung Kai Properties Ltd. | 6.68 | |||
Cheung Kong (Holdings) Ltd. | 6.42 | |||
Hutchison Whampoa Ltd. | 6.20 | |||
CLP Holdings Ltd. | 5.00 | |||
Hong Kong Exchanges and Clearing Ltd. | 4.60 | |||
Hong Kong and China Gas Co. Ltd. (The) | 4.08 | |||
BOC Hong Kong (Holdings) Ltd. | 3.86 | |||
Power Assets Holdings Ltd. | 3.83 | |||
Hang Seng Bank Ltd. | 3.59 | |||
|
| |||
TOTAL | 55.95 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI Hong Kong Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Hong Kong IndexSM (the “Index”). The Index consists of stocks traded primarily on the Stock Exchange of Hong Kong Limited. 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, 2012 (the “reporting period”), the total return for the Fund was (0.33)%, net of fees, while the total return for the Index was (0.01)%.
The Hong Kong equity market, as represented by the Index, declined slightly for the reporting period, lagging the performance of the broader international market. The country’s gross domestic product (“GDP”) growth slowed during the reporting period as the sovereign debt crisis in Europe and slower economic growth in China trimmed Hong Kong’s export demand. After reaching an all-time high in August 2011, export levels fell modestly throughout the reporting period. For the first and second quarters of 2012, annual GDP growth registered 0.4% and 1.1%, respectively. Retail sales also slowed: in July 2012, annual retail sales growth sank to 1.3%, its slowest pace since 2009 and far below its historic average (from 2005 until 2012) of 12%.
Inflation, which had emerged as a new threat for the Hong Kong economy in the previous reporting period, fell throughout the reporting period, dipping to 1.60% in July 2012. Partially driving this decline was a slowdown in Hong Kong’s real estate market, which had soared in recent years as low interest rates and a surge of buyers from mainland China had driven up prices. In June 2012, real estate transactions dropped by 30%, reflecting lower demand from mainland China and a slowdown in new projects by developers. Food price inflation also was tempered. Although food prices continued to climb, they did so at a more moderate pace. Unemployment levels dropped, reaching 3.2% in the final months of the reporting period.
Sector performance was mixed during the reporting period. The financials sector, the largest sector at 60% of the Index on average, registered a slight gain and was the largest single sector contributor to Index gains. The utilities and industrials sectors also achieved positive returns and contributed slightly to Index performance. The traditionally economically sensitive consumer discretionary sector declined and detracted from Index results. The information technology sector also declined, but at approximately 1% of the Index, its impact on Index performance was negligible.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 9 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
Performance as of August 31, 2012
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||
Year Ended 8/31/12 | Inception to 8/31/12 | Inception to 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(5.18)% | (5.57)% | (5.09)% | (0.84)% | (0.77)% | (0.57)% | (3.87)% | (3.55)% | (2.63)% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
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 periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (12/21/07), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
10 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector* | Percentage of Net Assets |
Industrial | 24.25 | % | ||
Consumer Cyclical | 24.02 | |||
Financial | 18.15 | |||
Consumer Non-Cyclical | 15.11 | |||
Basic Materials | 9.56 | |||
Communications | 4.33 | |||
Technology | 3.70 | |||
Utilities | 0.23 | |||
Energy | 0.15 | |||
Diversified | 0.07 | |||
Short-Term and Other Net Assets | 0.43 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
United Urban Investment Corp. | 0.63 | % | ||
Advance Residence Investment Corp. | 0.56 | |||
Anritsu Corp. | 0.56 | |||
Sawai Pharmaceutical Co. Ltd. | 0.55 | |||
Misumi Group Inc. | 0.52 | |||
Yokohama Rubber Co. Ltd. (The) | 0.52 | |||
Don Quijote Co. Ltd. | 0.51 | |||
Nippon Kayaku Co. Ltd. | 0.48 | |||
Kagome Co. Ltd. | 0.48 | |||
Ebara Corp. | 0.47 | |||
|
| |||
TOTAL | 5.28 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI Japan Small Cap Index Fund (the “Fund”) seeks 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 Index, which consists of stocks traded primarily on the Tokyo Stock Exchange. 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, 2012 (the “reporting period”), the total return for the Fund was (5.18)%, net of fees, while the total return for the Index was (5.09)%.
Japanese small cap equities, as represented by the Index, declined during the reporting period, as the country continued to recover from the effects of the earthquake and tsunami that struck in March 2011, while grappling with a sluggish global economic environment.
Investment related to reconstruction spending in the country’s disaster-struck regions largely drove economic recovery for much of the reporting period. For the first quarter of 2012, annual gross domestic product (“GDP”) expanded 4.7%, surpassing estimates of 3.5% and exceeding economic growth rates in the U.S. and Europe. In the final months of the period, though, reconstruction spending slowed, and economic recovery stalled in Japan. Tepid economic growth in Europe and the U.S. translated into slow demand for exports from Japan. In July 2012, export levels, which have historically been the main driver of Japan’s economic growth, experienced their sharpest annual decline in six months. For the second quarter of 2012, annual GDP growth dropped to a slight 0.7%. Government debt at the end of the reporting period represented 211% of GDP, the largest ratio of government debt to GDP for all industrial countries and above the levels for the troubled eurozone countries of Spain and Greece.
Sector performance within the Index was mixed for the reporting period. The economically sensitive materials and industrials sectors detracted the most from Index returns. The information technology sector was also a significant detractor from Index returns, as was the consumer discretionary sector. The utilities sector also detracted from results, due largely to the destruction caused by the nuclear disaster following the March 2011 earthquake and tsunami. However, at less than 1% of the Index, the impact to Index performance was negligible. On the positive side, the health care sector and the traditionally economically defensive consumer staples sector were the only two sectors to contribute gains to Index performance for the reporting period.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 11 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI MALAYSIA INDEX FUND
Performance as of August 31, 2012
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
8.61% | 6.43% | 9.24% | 9.61% | 9.23% | 10.13% | 13.16% | 13.23% | 13.90% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
8.61% | 6.43% | 9.24% | 58.18% | 55.48% | 62.01% | 244.40% | 246.40% | 267.55% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
“Average Annual Total Returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. 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 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.
12 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI MALAYSIA INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/12
Sector* | Percentage of Net Assets |
Financial | 29.38 | % | ||
Consumer Non-Cyclical | 13.79 | |||
Communications | 13.05 | |||
Diversified | 11.07 | |||
Consumer Cyclical | 11.01 | |||
Utilities | 8.45 | |||
Industrial | 5.26 | |||
Basic Materials | 4.50 | |||
Energy | 3.27 | |||
Short-Term and Other Net Assets | 0.22 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS As of 8/31/12
Security | Percentage of Net Assets |
CIMB Group Holdings Bhd | 9.34 | % | ||
Malayan Banking Bhd | 7.80 | |||
Sime Darby Bhd | 6.58 | |||
Tenaga Nasional Bhd | 4.64 | |||
Genting Bhd | 4.58 | |||
Petronas Chemicals Group Bhd | 4.50 | |||
IOI Corp. Bhd | 4.10 | |||
Maxis Communications Bhd | 3.93 | |||
Axiata Group Bhd | 3.79 | |||
Public Bank Bhd Foreign | 3.77 | |||
|
| |||
TOTAL | 53.03 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI Malaysia Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Malaysia IndexSM (the “Index”). The Index consists of stocks traded primarily on the Kuala Lumpur Stock Exchange. 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, 2012 (the “reporting period”), the total return for the Fund was 8.61%, net of fees, while the total return for the Index was 9.24%.
The Malaysian equity market, as represented by the Index, delivered positive results for the reporting period, and outpaced the performance of the broader international market. As a key exporter, Malaysia has historically been somewhat reliant on its trading partners for its economic growth. However, in recent years, the government has taken steps to build domestic demand in order to reduce the country’s vulnerability to the economic well-being of its trading partners.
In a reporting period marked by tepid global economic growth and a sovereign debt crisis in Europe, the effect of those government efforts was evident. Although the country’s export levels declined, the weakness was offset by solid domestic demand and government spending. Private consumption climbed 8.8% in the second quarter of 2012 compared with a year earlier, and public consumption rose 9.4%. As a result, economic growth was solid, as measured by an annual gross domestic product (GDP) growth rate of 5.4% for the second quarter of 2012. Unemployment remained low, declining to 2.8% in June 2012. Inflation, which had peaked in 2008 at over 8%, was relatively benign throughout the reporting period and was recorded at 1.40% in July 2012.
Sector performance was largely positive during the reporting period. The telecommunications sector logged robust gains and was the largest sector contributor to Index performance. The utilities sector also experienced solid absolute returns and added significantly to Index results. The financials sector, the largest sector at 31% of the Index on average, registered gains and contributed meaningfully to Index performance, as did the consumer staples sector. The economically sensitive industrials sector, which accounted for 16% of the Index on average, lost ground during the reporting period and detracted from Index results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 13 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI PACIFIC EX-JAPAN INDEX FUND
Performance as of August 31, 2012
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
1.82% | 1.61% | 2.12% | 2.00% | 1.88% | 2.13% | 13.48% | 13.34% | 13.51% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
1.82% | 1.61% | 2.12% | 10.41% | 9.74% | 11.13% | 254.31% | 249.84% | 255.01% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
“Average Annual Total Returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
14 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI PACIFIC EX-JAPAN INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector* | Percentage of Net Assets |
Financial | 49.22 | % | ||
Basic Materials | 12.45 | |||
Consumer Non-Cyclical | 8.33 | |||
Consumer Cyclical | 8.01 | |||
Industrial | 5.63 | |||
Utilities | 4.50 | |||
Diversified | 3.88 | |||
Communications | 3.76 | |||
Energy | 2.93 | |||
Technology | 0.43 | |||
Short-Term and Other Net Assets | 0.86 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
BHP Billiton Ltd. (Australia) | 7.51 | % | ||
Commonwealth Bank of Australia (Australia) | 6.38 | |||
Westpac Banking Corp. (Australia) | 5.54 | |||
Australia and New Zealand Banking Group Ltd. (Australia) | 4.87 | |||
National Australia Bank Ltd. (Australia) | 4.13 | |||
Woolworths Ltd. (Australia) | 2.67 | |||
Wesfarmers Ltd. (Australia) | 2.54 | |||
AIA Group Ltd. (Hong Kong) | 2.49 | |||
CSL Ltd. (Australia) | 1.66 | |||
Woodside Petroleum Ltd. (Australia) | 1.66 | |||
|
| |||
TOTAL | 39.45 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI Pacific ex-Japan Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Pacific ex-Japan IndexSM (the “Index”). The Index consists of stocks from Australia, Hong Kong, New Zealand and Singapore. 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, 2012 (the “reporting period”), the total return for the Fund was 1.82%, net of fees, while the total return for the Index was 2.12%.
At the end of the reporting period, the majority of the Fund was invested in three countries: Australia, Hong Kong, and Singapore. The three markets delivered mixed results for the reporting period, but generally outpaced the broader international markets.
The Australian equity market delivered positive returns for the reporting period. Australia’s economy relies heavily on mining and exports. During much of the period, the economy continued to benefit from a boom in its mining sector: gross domestic product (“GDP”) growth was solid, expanding 3.7% in the second quarter of 2012 versus a year earlier. However, global macroeconomic conditions led to worries about future growth. In response, the Reserve Bank of Australia lowered interest rates a cumulative 0.75%, reducing its target rate to 3.50%. Household consumption climbed during the remainder of the reporting period. In the final months of the reporting period, though, commodities prices dropped sharply, and investment spending within the mining industry contracted.
The Hong Kong equity market declined slightly during the reporting period. The country’s GDP growth slowed as the sovereign debt crisis in Europe and weaker economic growth in China trimmed Hong Kong’s export demand. After reaching an all-time high in August 2011, export levels fell modestly throughout the reporting period. For the first and second quarters of 2012, annual GDP growth registered 0.4% and 1.1%, respectively. Hong Kong’s real estate market, which had soared in recent years, began to soften. In June 2012, real estate transactions in Hong Kong dropped by 30%, reflecting lower demand from mainland China and a slowdown in new projects by developers.
The Singapore equity market gained during the reporting period. As an exporter of consumer electronics, information technology products, and pharmaceuticals, Singapore is dependent on the economic strength of its trading partners. Economic growth, as measured by GDP,
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 15 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI PACIFIC EX-JAPAN INDEX FUND
cooled during the period, slowing to a 2.00% annual pace in the second quarter of 2012. To reduce the economy’s dependence on export trade, the Singaporean government pursued measures to boost tourism and financial services. Tourism levels remained fairly resilient during the reporting period, but other areas of Singapore’s economy softened. Retail sales fell 1% in July 2012 compared with a year earlier. Industrial production grew by only 1.90% in July 2012, compared with a historical average (from 2000 until 2012) of 6.85%.
Six out of the ten major industry sectors within the Index delivered positive results during the reporting period. The financials sector, the largest sector at 48% of the Index on average, registered solid gains and was the largest single sector contributor to Index gains. The health care, telecommunication services, and consumer staples sectors also added positively to Index returns. The materials sector, which accounted for approximately 17% of the Index over the reporting period, declined as commodity prices fell, detracting significantly from Index returns.
16 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI SINGAPORE INDEX FUND
Performance as of August 31, 2012
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
4.67% | 5.06% | 5.15% | 4.00% | 4.03% | 4.09% | 14.02% | 13.96% | 13.93% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
4.67% | 5.06% | 5.15% | 21.65% | 21.82% | 22.19% | 271.30% | 269.27% | 268.54% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
“Average Annual Total Returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 17 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI SINGAPORE INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector* | Percentage of Net Assets |
Financial | 47.90 | % | ||
Communications | 14.83 | |||
Industrial | 11.15 | |||
Consumer Cyclical | 10.98 | |||
Diversified | 8.76 | |||
Consumer Non-Cyclical | 5.74 | |||
Short-Term and Other Net Assets | 0.64 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
Singapore Telecommunications Ltd. | 11.21 | % | ||
DBS Group Holdings Ltd. | 10.61 | |||
United Overseas Bank Ltd. | 10.03 | |||
Oversea-Chinese Banking Corp. Ltd. | 9.67 | |||
Keppel Corp. Ltd. | 6.85 | |||
Genting Singapore PLC | 3.43 | |||
CapitaLand Ltd. | 3.13 | |||
Fraser and Neave Ltd. | 3.01 | |||
Jardine Cycle & Carriage Ltd. | 2.83 | |||
Singapore Press Holdings Ltd. | 2.74 | |||
|
| |||
TOTAL | 63.51 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI Singapore Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Singapore IndexSM (the “Index”). The Index consists of stocks traded primarily on the Singapore Stock Exchange. 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, 2012 (the “reporting period”), the total return for the Fund was 4.67%, net of fees, while the total return for the Index was 5.15%.
The Singapore equity market, as represented by the Index, delivered positive results for the reporting period, and outpaced the performance of the broader international market. As an exporter of consumer electronics, information technology products, and pharmaceuticals, Singapore is heavily dependent on the economic strength of its trading partners for its economic health. During the course of the reporting period, economic growth cooled in Singapore as the sovereign debt crisis in Europe and economic sluggishness in the United States translated into reduced demand for exports from Singapore.
Economic growth, as measured by gross domestic product (GDP), slowed to a 2.00% annual pace in the second quarter of 2012. In an effort to reduce the economy’s dependence on export trade, the Singaporean government pursued measures to boost tourism and financial services. Tourism levels remained fairly resilient during the reporting period, but other areas of Singapore’s economy softened. Retail sales fell 1.00% in July 2012 compared with a year earlier. Industrial production grew by only 1.90% in July 2012, compared with a historical average (from 2000 until 2012) of 6.85%.
The Singapore dollar had climbed to unprecedented highs in the previous reporting period after the central bank indicated that it would allow additional appreciation of the currency to rein in inflation. During the reporting period, inflation moderated, dropping from 5.7% in August 2011 to 4.0% in July 2012, and the currency weakened.
Sector performance was mixed during the reporting period. The financials sector, the largest sector at 46% of the Index on average, registered gains and was the largest single sector contributor to Index gains. The industrials sector, which accounted for 25% of the Index on average, also contributed significantly to Index returns. The consumer staples sector was the most significant detractor from performance for the reporting period.
18 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI SOUTH KOREA INDEX FUND
Performance as of August 31, 2012
Average Annual Total Returns | ||||||||||||||||||||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||||||||||||
(0.62)% | 0.08% | (0.29)% | (1.48)% | (1.54)% | (1.08)% | 11.09% | 11.36% | 12.16% | ||||||||||||||||||||||||||
Cumulative Total Returns | ||||||||||||||||||||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||||||||||||
(0.62)% | 0.08% | (0.29)% | (7.16)% | (7.45)% | (5.29)% | 186.20% | 193.27% | 214.95% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
“Average Annual Total Returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. 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 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 KOREA INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector* | Percentage of Net Assets |
Technology | 26.72 | % | ||
Consumer Cyclical | 21.38 | |||
Industrial | 13.58 | |||
Financial | 13.20 | |||
Basic Materials | 9.71 | |||
Consumer Non-Cyclical | 5.60 | |||
Communications | 4.13 | |||
Energy | 3.78 | |||
Utilities | 1.30 | |||
Diversified | 0.47 | |||
Short-Term and Other Net Assets | 0.13 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
Samsung Electronics Co. Ltd. | 22.17 | % | ||
Hyundai Motor Co. | 6.24 | |||
POSCO | 4.06 | |||
Hyundai Mobis Co. Ltd. | 3.54 | |||
Kia Motors Corp. | 3.33 | |||
Shinhan Financial Group Co. Ltd. | 2.51 | |||
LG Chem Ltd. | 2.36 | |||
KB Financial Group Inc. | 2.26 | |||
SK Hynix Inc. | 1.97 | |||
NHN Corp. | 1.83 | |||
|
| |||
TOTAL | 50.27 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI South Korea Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Korea IndexSM (the “Index”). The Index consists of stocks traded primarily on the Stock Market Division of the Korean Exchange. 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, 2012 (the “reporting period”), the total return for the Fund was (0.62)%, net of fees, while the total return for the Index was (0.29)%.
The South Korean equity market, as represented by the Index, delivered slightly negative results for the reporting period. Due to the country’s dependence on manufacturing exports for its economic livelihood, South Korean equities are typically considered a leading indicator of global economic conditions. During the reporting period, South Korean exports began to soften, as the sovereign debt crisis in Europe and tepid economic conditions in the U.S. reduced demand for exports from South Korea.
Economic growth, as measured by annual gross domestic product (GDP) growth slowed to 2.30% in the second quarter of 2012 as industrial output cooled, dipping to 1.6% in June 2012. Accordingly, consumer confidence levels declined in the final months of the reporting period, falling from 105 in May 2012 to 99 in August 2012 (a consumer confidence level of 100 is considered neutral; levels below 100 are pessimistic, and levels above 100 are optimistic). In response to the slowing conditions, South Korea’s central bank cut short-term interest rates to 3.0% in July 2012, for the first time in three years, in an effort to boost liquidity in the financial system and help the country to regain economic momentum.
Sector performance within the Index was mostly negative during the reporting period. Reflecting reduced demand and a sharp decline in commodity prices during the reporting period, the materials sector declined and detracted significantly from Index returns. Industrials and financials also detracted meaningfully from Index performance, as did the economically sensitive consumer discretionary sector. Energy stocks declined as a group, as oil and natural gas prices reversed course during the reporting period. On the positive side, the information technology sector, which accounted for 31% of the Index on average, delivered strong absolute gains and contributed substantially to Index results. Utilities advanced, but at only 1% of the Index, the impact to Index performance was modest.
20 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI TAIWAN INDEX FUND
Performance as of August 31, 2012
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(4.80)% | (4.13)% | (4.46)% | (1.09)% | (1.07)% | (0.59)% | 5.98% | 6.74% | 6.73% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(4.80)% | (4.13)% | (4.46)% | (5.33)% | (5.24)% | (2.93)% | 78.78% | 91.97% | 91.82% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
“Average Annual Total Returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. 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 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 8/31/12
Sector* | Percentage of Net Assets |
Technology | 35.95 | % | ||
Industrial | 20.05 | |||
Financial | 14.91 | |||
Basic Materials | 11.59 | |||
Communications | 7.26 | |||
Consumer Cyclical | 6.31 | |||
Consumer Non-Cyclical | 1.93 | |||
Energy | 0.91 | |||
Short-Term and Other Net Assets | 1.09 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
Taiwan Semiconductor Manufacturing Co. Ltd. | 18.13 | % | ||
Hon Hai Precision Industry Co. Ltd. | 7.54 | |||
MediaTek Inc. | 3.24 | |||
Chunghwa Telecom Co. Ltd. | 3.00 | |||
Formosa Plastics Corp. | 2.79 | |||
China Steel Corp. | 2.59 | |||
Nan Ya Plastics Corp. | 2.31 | |||
Formosa Chemicals & Fibre Corp. | 2.15 | |||
Cathay Financial Holding Co. Ltd. | 1.79 | |||
ASUSTeK Computer Inc. | 1.75 | |||
|
| |||
TOTAL | 45.29 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI Taiwan Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Taiwan IndexSM (the “Index”). The Index consists of stocks traded primarily on the Taiwan Stock Exchange. 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, 2012 (the “reporting period”), the total return for the Fund was (4.80)%, net of fees, while the total return for the Index was (4.46)%.
The Taiwan market, as represented by the Index, delivered negative results for the reporting period, as it struggled with the effects of a weak global economic environment. A slowdown in China’s economy, the sovereign debt crisis in Europe, and tepid economic conditions in the U.S. all dragged down export demand from Taiwan, causing the country’s economy to slow and ultimately contract.
Economic activity, as measured by annual gross domestic product (GDP) growth, contracted 0.18% in the second quarter of 2012 as Taiwan’s statistics office cut its forecast for export growth from 2.69% to 0.07%. Within its export market, demand for communications equipment, optronics, and chemicals were hurt the most. Domestic demand, which had offset weak export demand in the previous reporting period, weakened during the reporting period, amid a decline in industrial production and modest rise in unemployment levels. Meanwhile, inflation levels climbed to 3.42% in August 2012 due to rising global food prices and severe weather conditions in the country. Taiwan’s central bank, which had cut interest rates for five consecutive quarters as the reporting period opened, left interest rates unchanged throughout the reporting period.
Sector performance within the Index was mixed during the reporting period. The financial sector, which accounted for 15% of the Index on average, was the largest sector detractor from Index performance. Materials stocks, which declined as commodity prices fell, also hurt Index returns meaningfully. Industrials stocks, which tend to be sensitive to the state of the economic environment, also declined. On the positive side, telecommunications services as a group contributed modestly to Index results. The information technology sector, the largest sector at 54% of the Index on average, registered only moderate gains for the reporting period.
22 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI THAILAND INVESTABLE MARKET INDEX FUND
Performance as of August 31, 2012
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||
Year Ended 8/31/12 | Inception to 8/31/12 | Inception to 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
9.57% | 9.71% | 9.95% | 11.20% | 11.27% | 11.72% | 60.13% | 60.56% | 63.42% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
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 periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (3/28/08), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 23 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI THAILAND INVESTABLE MARKET INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/12
Sector* | Percentage of Net Assets |
Financial | 36.87 | % | ||
Energy | 19.62 | |||
Communications | 10.16 | |||
Consumer Cyclical | 8.17 | |||
Basic Materials | 7.43 | |||
Consumer Non-Cyclical | 5.81 | |||
Diversified | 4.58 | |||
Industrial | 3.37 | |||
Utilities | 2.95 | |||
Technology | 0.20 | |||
Short-Term and Other Net Assets | 0.84 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS As of 8/31/12
Security | Percentage of Net Assets |
PTT PCL NVDR | 9.48 | % | ||
Siam Commercial Bank PCL NVDR | 7.82 | |||
Kasikornbank PCL Foreign | 6.84 | |||
Advanced Information Service PCL NVDR | 6.49 | |||
PTT Exploration & Production PCL NVDR | 5.82 | |||
Bangkok Bank PCL Foreign | 5.50 | |||
CP All PCL NVDR | 4.72 | |||
Kasikornbank PCL NVDR | 3.79 | |||
Siam Cement PCL Foreign | 3.77 | |||
PTT Global Chemical PCL NVDR | 3.66 | |||
|
| |||
TOTAL | 57.89 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI Thailand Investable Market Index Fund (the “Fund”) seeks 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, 2012 (the “reporting period”), the total return for the Fund was 9.57%, net of fees, while the total return for the Index was 9.95%.
The Thailand equity market, as represented by the Index, delivered solid results for the reporting period, outpacing the performance of the broader international market. Thailand’s export-driven economy makes the country heavily reliant on the economic strength of its trading partners. During the reporting period, the sovereign debt crisis, slower economic conditions in China, and a tepid economic environment all translated into reduced demand for Thailand’s exports.
Helping to offset the decline in exports, private spending expanded. Both private consumption and investment grew, in part due to the Thai government’s stimulative measures and accommodative monetary policy. However, natural disaster brought further challenges to the Thai economy. In late 2011, severe flooding caused a number of industrial hubs to close and resulted in disruptions to manufacturing supply chains, particularly for the automobile and technology industries. In the final months of the reporting period, manufacturing levels began to recover, growing 2.7% in the second quarter of 2012 compared with a contraction of 4.3% in the first quarter of 2012, adding to overall gross domestic product (“GDP”) growth for the country. After contracting 8.9% on an annual basis in the fourth quarter of 2011 and gaining only 0.4% annually in the first quarter of 2012, economic activity as measured by GDP grew at an annual 4.2% rate in the second quarter of 2012.
24 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI THAILAND INVESTABLE MARKET INDEX FUND
Seven of the ten major industry sectors within the Index delivered positive results during the reporting period. The financials sector, the largest sector at 33% of the Index on average, delivered gains and was the most significant contributor to Index returns. Telecommunications services experienced robust absolute returns and also added substantially to Index performance. Consumer staples and consumer discretionary were also meaningful contributors to Index results. On the negative side, both the energy and materials sectors declined as commodity prices fell. Because the energy sector accounted for 25% of the Index on average, it had a more significant impact on Index performance than did the materials sector, which represented approximately 12% of the Index throughout the reporting period.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 25 |
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, 2012 to August 31, 2012.
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 (3/1/12) | Ending Account Value (8/31/12) | Annualized Expense Ratio | Expenses Paid During Period a | ||||||||||||
Australia | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 991.20 | 0.53 | % | $ | 2.65 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.50 | 0.53 | 2.69 | ||||||||||||
Hong Kong | ||||||||||||||||
Actual | 1,000.00 | 945.50 | 0.53 | 2.59 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.50 | 0.53 | 2.69 | ||||||||||||
Japan Small Cap | ||||||||||||||||
Actual | 1,000.00 | 947.10 | 0.53 | 2.59 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.50 | 0.53 | 2.69 | ||||||||||||
Malaysia | ||||||||||||||||
Actual | 1,000.00 | 993.60 | 0.53 | 2.66 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.50 | 0.53 | 2.69 |
26 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Shareholder Expenses (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Index Fund | Beginning Account Value (3/1/12) | Ending Account Value (8/31/12) | Annualized Expense Ratio | Expenses Paid During Period a | ||||||||||||
Pacific ex-Japan | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 986.20 | 0.50 | % | $ | 2.50 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.60 | 0.50 | 2.54 | ||||||||||||
Singapore | ||||||||||||||||
Actual | 1,000.00 | 1,025.80 | 0.53 | 2.70 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.50 | 0.53 | 2.69 | ||||||||||||
South Korea | ||||||||||||||||
Actual | 1,000.00 | 931.40 | 0.62 | 3.01 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.00 | 0.62 | 3.15 | ||||||||||||
Taiwan | ||||||||||||||||
Actual | 1,000.00 | 914.90 | 0.62 | 2.98 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.00 | 0.62 | 3.15 | ||||||||||||
Thailand Investable Market | ||||||||||||||||
Actual | 1,000.00 | 990.80 | 0.62 | 3.10 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.00 | 0.62 | 3.15 |
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 (366 days). |
SHAREHOLDER EXPENSES | 27 |
Table of Contents
iSHARES® MSCI AUSTRALIA INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 98.85% |
| |||||||
AIRLINES — 0.15% |
| |||||||
Qantas Airways Ltd.a | 3,050,892 | $ | 3,625,885 | |||||
|
| |||||||
3,625,885 | ||||||||
BANKS — 32.92% |
| |||||||
Australia and New Zealand Banking | 7,370,857 | 189,064,109 | ||||||
Bendigo and Adelaide Bank Ltd. | 1,091,051 | 8,546,801 | ||||||
Commonwealth Bank of Australia | 4,379,661 | 247,761,954 | ||||||
National Australia Bank Ltd. | 6,159,881 | 160,485,018 | ||||||
Westpac Banking Corp. | 8,403,278 | 215,111,717 | ||||||
|
| |||||||
820,969,599 | ||||||||
BEVERAGES — 0.89% |
| |||||||
Coca-Cola Amatil Ltd. | 1,568,619 | 22,192,705 | ||||||
|
| |||||||
22,192,705 | ||||||||
BIOTECHNOLOGY — 2.58% |
| |||||||
CSL Ltd. | 1,403,922 | 64,462,719 | ||||||
|
| |||||||
64,462,719 | ||||||||
BUILDING MATERIALS — 0.71% |
| |||||||
Boral Ltd. | 2,071,238 | 7,384,795 | ||||||
James Hardie Industries SE | 1,200,849 | 10,399,722 | ||||||
|
| |||||||
17,784,517 | ||||||||
CHEMICALS — 0.54% |
| |||||||
Incitec Pivot Ltd. | 4,483,596 | 13,483,691 | ||||||
|
| |||||||
13,483,691 | ||||||||
COAL — 0.17% |
| |||||||
Whitehaven Coal Ltd. | 1,256,814 | 4,247,253 | ||||||
|
| |||||||
4,247,253 | ||||||||
COMMERCIAL SERVICES — 2.11% |
| |||||||
Brambles Ltd. | 4,278,924 | 30,114,178 | ||||||
Transurban Group | 3,612,141 | 22,584,444 | ||||||
|
| |||||||
52,698,622 | ||||||||
COMPUTERS — 0.43% |
| |||||||
Computershare Ltd. | 1,223,235 | 10,618,875 | ||||||
|
| |||||||
10,618,875 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 1.62% |
| |||||||
ASX Ltd. | 481,832 | 15,167,530 | ||||||
Macquarie Group Ltd. | 911,963 | 25,314,687 | ||||||
|
| |||||||
40,482,217 |
Security | Shares | Value | ||||||
ELECTRIC — 2.61% |
| |||||||
AGL Energy Ltd. | 1,491,867 | $ | 23,388,643 | |||||
Origin Energy Ltd. | 2,993,328 | 36,812,100 | ||||||
SP AusNet | 4,580,602 | 4,994,182 | ||||||
|
| |||||||
65,194,925 | ||||||||
ENGINEERING & CONSTRUCTION — 1.04% |
| |||||||
Leighton Holdings Ltd.b | 417,872 | 6,905,276 | ||||||
Sydney Airport | 1,026,558 | 3,447,912 | ||||||
WorleyParsons Ltd. | 566,046 | 15,513,671 | ||||||
|
| |||||||
25,866,859 | ||||||||
ENTERTAINMENT — 0.66% |
| |||||||
Tabcorp Holdings Ltd. | 1,979,562 | 5,973,671 | ||||||
Tatts Group Ltd. | 3,749,122 | 10,538,718 | ||||||
|
| |||||||
16,512,389 | ||||||||
FOOD — 4.52% |
| |||||||
Metcash Ltd. | 2,378,246 | 8,995,539 | ||||||
Woolworths Ltd. | 3,385,083 | 103,620,028 | ||||||
|
| |||||||
112,615,567 | ||||||||
HEALTH CARE — PRODUCTS — 0.44% |
| |||||||
Cochlear Ltd. | 156,702 | 10,915,001 | ||||||
|
| |||||||
10,915,001 | ||||||||
HEALTH CARE — SERVICES — 0.94% |
| |||||||
Ramsay Health Care Ltd. | 361,374 | 9,299,200 | ||||||
Sonic Healthcare Ltd. | 1,020,162 | 14,137,976 | ||||||
|
| |||||||
23,437,176 | ||||||||
INSURANCE — 5.56% |
| |||||||
AMP Ltd. | 7,963,020 | 36,703,036 | ||||||
Insurance Australia Group Ltd. | 5,723,354 | 24,546,413 | ||||||
QBE Insurance Group Ltd. | 3,244,371 | 43,688,210 | ||||||
Suncorp Group Ltd. | 3,542,318 | 33,642,820 | ||||||
|
| |||||||
138,580,479 | ||||||||
IRON & STEEL — 0.56% |
| |||||||
Fortescue Metals Group Ltd. | 3,853,590 | 14,098,019 | ||||||
|
| |||||||
14,098,019 | ||||||||
LODGING — 0.76% |
| |||||||
Crown Ltd. | 1,102,777 | 10,234,187 | ||||||
Echo Entertainment Group Ltd. | 2,048,852 | 8,638,933 | ||||||
|
| |||||||
18,873,120 |
28 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI AUSTRALIA INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
MANUFACTURING — 0.32% |
| |||||||
ALS Ltd/Queensland | 930,085 | $ | 7,929,867 | |||||
|
| |||||||
7,929,867 | ||||||||
MEDIA — 0.11% |
| |||||||
Fairfax Media Ltd.b | 6,151,353 | 2,669,988 | ||||||
|
| |||||||
2,669,988 | ||||||||
METAL FABRICATE & HARDWARE — 0.17% |
| |||||||
Sims Metal Management Ltd. | 453,050 | 4,270,024 | ||||||
|
| |||||||
4,270,024 | ||||||||
MINING — 18.29% |
| |||||||
Alumina Ltd. | 6,736,587 | 5,151,823 | ||||||
BHP Billiton Ltd. | 8,869,653 | 291,397,946 | ||||||
Iluka Resources Ltd. | 1,151,280 | 10,946,067 | ||||||
Lynas Corp. Ltd.a,b | 4,715,984 | 3,119,189 | ||||||
Newcrest Mining Ltd. | 2,118,142 | 53,958,681 | ||||||
Orica Ltd. | 1,004,705 | 25,127,152 | ||||||
OZ Minerals Ltd. | 848,003 | 5,468,539 | ||||||
Rio Tinto Ltd. | 1,198,717 | 60,999,186 | ||||||
|
| |||||||
456,168,583 | ||||||||
OIL & GAS — 4.04% |
| |||||||
Caltex Australia Ltd. | 370,968 | 5,988,345 | ||||||
Santos Ltd. | 2,623,426 | 30,446,537 | ||||||
Woodside Petroleum Ltd. | 1,811,134 | 64,199,853 | ||||||
|
| |||||||
100,634,735 | ||||||||
PACKAGING & CONTAINERS — 1.04% |
| |||||||
Amcor Ltd. | 3,321,656 | 25,848,715 | ||||||
|
| |||||||
25,848,715 | ||||||||
PIPELINES — 0.35% |
| |||||||
APA Groupb | 1,772,225 | 8,827,856 | ||||||
|
| |||||||
8,827,856 | ||||||||
REAL ESTATE — 0.53% |
| |||||||
BGP Holdings PLCa,c | 18,888,372 | 2,381 | ||||||
Lend Lease Group | 1,496,131 | 13,127,035 | ||||||
|
| |||||||
13,129,416 | ||||||||
REAL ESTATE INVESTMENT TRUSTS — 7.26% |
| |||||||
Centro Retail Australia | 3,509,805 | 7,762,223 | ||||||
CFS Retail Property Trust Group | 5,473,910 | 10,833,175 | ||||||
Dexus Property Group | 12,658,750 | 12,493,483 | ||||||
Goodman Group | 4,258,670 | 17,560,473 | ||||||
GPT Group | 3,935,672 | 14,276,289 | ||||||
Mirvac Group | 9,404,252 | 13,120,408 |
Security | Shares | Value | ||||||
Stockland Corp. Ltd. | 6,189,729 | $ | 20,341,739 | |||||
Westfield Group | 5,933,889 | 60,771,842 | ||||||
Westfield Retail Trust | 7,987,005 | 23,854,545 | ||||||
|
| |||||||
181,014,177 | ||||||||
RETAIL — 4.08% |
| |||||||
Harvey Norman Holdings Ltd.b | 1,463,618 | 3,100,780 | ||||||
Wesfarmers Ltd. | 2,768,402 | 98,761,862 | ||||||
|
| |||||||
101,862,642 | ||||||||
TELECOMMUNICATIONS — 1.91% |
| |||||||
Telstra Corp. Ltd. | 11,983,972 | 47,681,603 | ||||||
|
| |||||||
47,681,603 | ||||||||
TRANSPORTATION — 1.54% |
| |||||||
Asciano Group | 2,684,188 | 12,427,400 | ||||||
QR National Ltd. | 4,701,593 | 17,006,009 | ||||||
Toll Holdings Ltd. | 1,875,627 | 8,974,635 | ||||||
|
| |||||||
38,408,044 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $2,533,518,026) |
| 2,465,105,268 | ||||||
SHORT-TERM INVESTMENTS — 0.51% |
| |||||||
MONEY MARKET FUNDS — 0.51% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.23%d,e,f | 11,674,728 | 11,674,728 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.23%d,e,f | 884,727 | 884,727 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%d,e | 89,424 | 89,424 | ||||||
|
| |||||||
12,648,879 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $12,648,879) |
| 12,648,879 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $2,546,166,905) | 2,477,754,147 | |||||||
Other Assets, Less Liabilities — 0.64% |
| 15,944,609 | ||||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 2,493,698,756 | |||||
|
|
SCHEDULESOF INVESTMENTS | 29 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI AUSTRALIA INDEX FUND
August 31, 2012
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. |
Financial futures contracts purchased as of August 31, 2012 were as follows:
Number of Contracts | Issue (Expiration) | Exchange | Notional Value | Net Unrealized Appreciation (Depreciation) | ||||||||||
88 | ASX SPI 200 Index (Sept. 2012) | Australian Securities | $9,794,623 | $(50,019) | ||||||||||
See notes to financial statements.
30 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
iSHARES® MSCI HONG KONG INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 99.62% |
| |||||||
AIRLINES — 0.64% |
| |||||||
Cathay Pacific Airways Ltd. | 7,345,000 | $ | 11,969,805 | |||||
|
| |||||||
11,969,805 | ||||||||
APPAREL — 0.68% |
| |||||||
Yue Yuen Industrial (Holdings) Ltd. | 4,407,000 | 12,727,388 | ||||||
|
| |||||||
12,727,388 | ||||||||
BANKS — 9.56% |
| |||||||
Bank of East Asia Ltd. (The)a | 8,226,410 | 29,962,428 | ||||||
BOC Hong Kong (Holdings) Ltd. | 22,769,500 | 72,069,779 | ||||||
Hang Seng Bank Ltd.a | 4,700,800 | 66,909,695 | ||||||
Wing Hang Bank Ltd.a | 1,064,000 | 9,437,963 | ||||||
|
| |||||||
178,379,865 | ||||||||
DISTRIBUTION & WHOLESALE — 3.07% |
| |||||||
Li & Fung Ltd. | 35,256,000 | 57,273,244 | ||||||
|
| |||||||
57,273,244 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 4.60% |
| |||||||
Hong Kong Exchanges and Clearing Ltd.a | 6,463,600 | 85,834,108 | ||||||
|
| |||||||
85,834,108 | ||||||||
ELECTRIC — 8.83% |
| |||||||
CLP Holdings Ltd. | 11,193,700 | 93,301,880 | ||||||
Power Assets Holdings Ltd.a | 8,814,000 | 71,421,099 | ||||||
|
| |||||||
164,722,979 | ||||||||
ENGINEERING & CONSTRUCTION — 0.95% |
| |||||||
Cheung Kong Infrastructure Holdings Ltd. | 2,938,000 | 17,765,312 | ||||||
|
| |||||||
17,765,312 | ||||||||
FOOD — 0.85% |
| |||||||
First Pacific Co. Ltd. | 14,690,000 | 15,757,718 | ||||||
|
| |||||||
15,757,718 | ||||||||
GAS — 4.08% |
| |||||||
Hong Kong and China Gas Co. Ltd. (The) | 32,318,958 | 76,169,612 | ||||||
|
| |||||||
76,169,612 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 12.82% |
| |||||||
Hutchison Whampoa Ltd. | 13,221,800 | 115,661,451 | ||||||
NWS Holdings Ltd. | 8,814,000 | 14,045,581 | ||||||
Swire Pacific Ltd. Class A | 4,407,000 | 52,074,334 |
Security | Shares | Value | ||||||
Wharf (Holdings) Ltd. (The) | 9,323,150 | $ | 57,396,347 | |||||
|
| |||||||
239,177,713 | ||||||||
INSURANCE — 11.69% |
| |||||||
AIA Group Ltd. | 63,460,800 | 218,047,422 | ||||||
|
| |||||||
218,047,422 | ||||||||
LODGING — 8.19% |
| |||||||
Galaxy Entertainment Group Ltd.a,b | 8,814,000 | 25,057,044 | ||||||
MGM China Holdings Ltd. | 5,876,000 | 9,681,906 | ||||||
Sands China Ltd. | 15,277,600 | 53,970,184 | ||||||
Shangri-La Asia Ltd. | 8,814,000 | 16,500,149 | ||||||
SJM Holdings Ltd. | 11,752,000 | 24,757,799 | ||||||
Wynn Macau Ltd.a | 9,989,200 | 22,924,449 | ||||||
|
| |||||||
152,891,531 | ||||||||
REAL ESTATE — 26.40% |
| |||||||
Cheung Kong (Holdings) Ltd.a | 8,814,000 | 119,887,446 | ||||||
Hang Lung Group Ltd.a | 5,353,000 | 33,403,410 | ||||||
Hang Lung Properties Ltd. | 13,621,000 | 46,537,502 | ||||||
Henderson Land Development Co. Ltd. | 5,876,332 | 36,138,731 | ||||||
Hopewell Holdings Ltd.a | 3,672,742 | 11,766,980 | ||||||
Hysan Development Co. Ltd. | 4,407,000 | 19,772,906 | ||||||
Kerry Properties Ltd. | 4,407,000 | 20,937,689 | ||||||
New World Development Co. Ltd. | 22,735,800 | 28,257,613 | ||||||
Sino Land Co. Ltd. | 17,628,000 | 28,863,897 | ||||||
Sun Hung Kai Properties Ltd. | 9,615,000 | 124,708,332 | ||||||
Wheelock and Co. Ltd. | 5,876,357 | 22,387,926 | ||||||
|
| |||||||
492,662,432 | ||||||||
REAL ESTATE INVESTMENT TRUSTS — 3.34% |
| |||||||
Link REIT (The)a | 13,955,500 | 62,254,350 | ||||||
|
| |||||||
62,254,350 | ||||||||
RETAIL — 0.34% |
| |||||||
Lifestyle International Holdings Ltd. | 2,938,000 | 6,424,300 | ||||||
|
| |||||||
6,424,300 | ||||||||
SEMICONDUCTORS — 0.70% |
| |||||||
ASM Pacific Technology Ltd.a | 1,175,200 | 13,091,027 | ||||||
|
| |||||||
13,091,027 | ||||||||
TELECOMMUNICATIONS — 0.77% |
| |||||||
Foxconn International Holdings Ltd.b | 13,221,000 | 4,159,128 | ||||||
PCCW Ltd. | 26,442,000 | 10,159,183 | ||||||
|
| |||||||
14,318,311 |
SCHEDULESOF INVESTMENTS | 31 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI HONG KONG INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
TRANSPORTATION — 2.11% |
| |||||||
MTR Corp. Ltd. | 8,814,083 | $ | 31,591,492 | |||||
Orient Overseas International Ltd. | 1,469,200 | 7,842,047 | ||||||
|
| |||||||
39,433,539 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $1,937,290,898) |
| 1,858,900,656 | ||||||
SHORT-TERM INVESTMENTS — 8.49% |
| |||||||
MONEY MARKET FUNDS — 8.49% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.23%c,d,e | 146,072,306 | 146,072,306 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
0.23%c,d,e | 11,069,562 | 11,069,562 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.06%c,d | 1,254,304 | 1,254,304 | ||||||
|
| |||||||
158,396,172 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $158,396,172) |
| 158,396,172 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $2,095,687,070) | 2,017,296,828 | |||||||
Other Assets, Less Liabilities — (8.11)% |
| (151,322,671 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 1,865,974,157 | |||||
|
|
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. |
Financial futures contracts purchased as of August 31, 2012 were as follows:
Number of Contracts | Issue (Expiration) | Exchange | Notional Value | Net Unrealized Appreciation (Depreciation) | ||||||||||
51 | Hang Seng Index (Sept. 2012) | Hong Kong Futures | $6,367,890 | $(23,375) | ||||||||||
See notes to financial statements.
32 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 99.57% |
| |||||||
ADVERTISING — 0.41% |
| |||||||
Asatsu-DK Inc. | 4,000 | $ | 102,733 | |||||
Moshi Moshi Hotline Inc. | 5,000 | 73,244 | ||||||
|
| |||||||
175,977 | ||||||||
AGRICULTURE — 0.26% | ||||||||
Hokuto Corp. | 3,000 | 58,583 | ||||||
Sakata Seed Corp. | 4,000 | 52,107 | ||||||
|
| |||||||
110,690 | ||||||||
AIRLINES — 0.03% | ||||||||
Skymark Airlines Inc.a | 3,000 | 13,410 | ||||||
|
| |||||||
13,410 | ||||||||
APPAREL — 1.19% | ||||||||
Atsugi Co. Ltd. | 10,000 | 11,622 | ||||||
Daidoh Ltd. | 2,000 | 13,180 | ||||||
Descente Ltd. | 10,000 | 56,960 | ||||||
Gunze Ltd. | 20,000 | 50,575 | ||||||
Japan Wool Textile Co. Ltd. (The) | 10,000 | 72,031 | ||||||
Nagaileben Co. Ltd. | 2,000 | 30,856 | ||||||
Onward Holdings Co. Ltd. | 10,000 | 74,968 | ||||||
Sanyo Shokai Ltd. | 10,000 | 30,524 | ||||||
TSI Holdings Co. Ltd. | 9,000 | 57,356 | ||||||
Wacoal Holdings Corp. | 10,000 | 111,877 | ||||||
|
| |||||||
509,949 | ||||||||
AUTO MANUFACTURERS — 0.43% | ||||||||
Kyokuto Kaihatsu Kogyo Co. Ltd. | 3,000 | 24,943 | ||||||
Nissan Shatai Co. Ltd. | 10,000 | 112,261 | ||||||
ShinMaywa Industries Ltd. | 10,000 | 48,914 | ||||||
|
| |||||||
186,118 | ||||||||
AUTO PARTS & EQUIPMENT — 4.05% | ||||||||
Aisan Industry Co. Ltd. | 3,000 | 24,061 | ||||||
Akebono Brake Industry Co. Ltd.b | 8,000 | 40,460 | ||||||
Calsonic Kansei Corp. | 20,000 | 96,296 | ||||||
Exedy Corp. | 4,000 | 81,839 | ||||||
FCC Co. Ltd. | 4,000 | 64,112 | ||||||
Futaba Industrial Co. Ltd.a | 7,000 | 32,005 | ||||||
Keihin Corp. | 5,000 | 65,198 | ||||||
KYB Co. Ltd.b | 20,000 | 73,308 | ||||||
Musashi Seimitsu Industry Co. Ltd. | 3,000 | 56,207 | ||||||
Nidec-Tosok Corp. | 1,000 | 7,739 | ||||||
Nifco Inc. | 5,000 | 117,625 |
Security | Shares | Value | ||||||
Nippon Seiki Co. Ltd. | 2,000 | $ | 20,358 | |||||
Nissin Kogyo Co. Ltd. | 5,000 | 68,008 | ||||||
Press Kogyo Co. Ltd. | 10,000 | 39,847 | ||||||
Riken Corp. | 10,000 | 38,697 | ||||||
Sanden Corp. | 10,000 | 28,863 | ||||||
Sanoh Industrial Co. Ltd. | 2,000 | 14,891 | ||||||
Showa Corp. | 6,000 | 51,877 | ||||||
T.RAD Co. Ltd. | 10,000 | 27,458 | ||||||
Tachi-S Co. Ltd. | 2,000 | 37,701 | ||||||
Taiho Kogyo Co. Ltd. | 1,000 | 10,345 | ||||||
Takata Corp. | 4,000 | 74,943 | ||||||
Tokai Rika Co. Ltd. | 6,000 | 89,579 | ||||||
Topre Corp. | 6,000 | 52,337 | ||||||
Toyo Tire & Rubber Co. Ltd. | 20,000 | 54,151 | ||||||
TPR Co. Ltd. | 2,000 | 25,211 | ||||||
TS Tech Co. Ltd. | 5,000 | 90,166 | ||||||
Unipres Corp. | 4,000 | 109,885 | ||||||
Yokohama Rubber Co. Ltd. (The) | 30,000 | 222,989 | ||||||
Yorozu Corp. | 1,000 | 15,977 | ||||||
|
| |||||||
1,732,133 | ||||||||
BANKS — 8.18% | ||||||||
77 Bank Ltd. (The) | 30,000 | 114,559 | ||||||
Aichi Bank Ltd. (The) | 1,000 | 53,576 | ||||||
Aomori Bank Ltd. (The) | 20,000 | 61,047 | ||||||
Awa Bank Ltd. (The) | 20,000 | 123,372 | ||||||
Bank of Iwate Ltd. (The) | 2,000 | 90,294 | ||||||
Bank of Nagoya Ltd. (The) | 20,000 | 67,944 | ||||||
Bank of Okinawa Ltd. (The) | 2,000 | 86,335 | ||||||
Bank of Saga Ltd. (The) | 20,000 | 46,743 | ||||||
Bank of the Ryukyus Ltd. | 5,000 | 64,432 | ||||||
Chiba Kogyo Bank Ltd. (The)a | 4,000 | 22,018 | ||||||
Daishi Bank Ltd. (The) | 40,000 | 126,181 | ||||||
Eighteenth Bank Ltd. (The) | 20,000 | 50,575 | ||||||
Higashi-Nippon Bank Ltd. (The) | 20,000 | 44,189 | ||||||
Higo Bank Ltd. (The) | 20,000 | 116,220 | ||||||
Hokkoku Bank Ltd. (The) | 30,000 | 114,559 | ||||||
Hokuetsu Bank Ltd. (The) | 30,000 | 56,705 | ||||||
Hyakugo Bank Ltd. (The) | 30,000 | 131,801 | ||||||
Hyakujushi Bank Ltd. (The) | 30,000 | 115,326 | ||||||
Juroku Bank Ltd. (The) | 40,000 | 132,822 | ||||||
Kagoshima Bank Ltd. (The) | 20,000 | 127,714 | ||||||
Kansai Urban Banking Corp. | 30,000 | 37,548 |
SCHEDULESOF INVESTMENTS | 33 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Keiyo Bank Ltd. (The) | 30,000 | $ | 136,398 | |||||
Kiyo Holdings Inc. | 70,000 | 94,764 | ||||||
Mie Bank Ltd. (The) | 10,000 | 22,222 | ||||||
Minato Bank Ltd. (The) | 20,000 | 36,271 | ||||||
Miyazaki Bank Ltd. (The) | 20,000 | 49,808 | ||||||
Musashino Bank Ltd. (The) | 3,000 | 88,659 | ||||||
Nanto Bank Ltd. (The) | 30,000 | 138,314 | ||||||
Ogaki Kyoritsu Bank Ltd. (The) | 30,000 | 104,598 | ||||||
Oita Bank Ltd. (The) | 20,000 | 62,835 | ||||||
San-in Godo Bank Ltd. (The) | 20,000 | 143,806 | ||||||
Sapporo Hokuyo Holdings Inc. | 35,000 | 89,400 | ||||||
Senshu Ikeda Holdings Inc. | 22,200 | 129,004 | ||||||
Shiga Bank Ltd. (The) | 30,000 | 182,375 | ||||||
Tochigi Bank Ltd. (The) | 10,000 | 34,994 | ||||||
Toho Bank Ltd. (The) | 20,000 | 63,602 | ||||||
Tokyo Tomin Bank Ltd. (The) | 4,000 | 38,416 | ||||||
TOMONY Holdings Inc. | 12,000 | 49,655 | ||||||
Towa Bank Ltd. (The) | 20,000 | 19,412 | ||||||
Tsukuba Bank Ltd. (The) | 7,000 | 23,244 | ||||||
Yachiyo Bank Ltd. (The) | 2,000 | 38,186 | ||||||
Yamagata Bank Ltd. (The) | 20,000 | 85,313 | ||||||
Yamanashi Chuo Bank Ltd. (The) | 20,000 | 85,313 | ||||||
|
| |||||||
3,500,549 | ||||||||
BEVERAGES — 1.47% |
| |||||||
Coca-Cola Central Japan Co. Ltd. | 2,000 | 25,415 | ||||||
Dydo Drinco Inc. | 1,000 | 46,615 | ||||||
ITO EN Ltd. | 5,000 | 99,425 | ||||||
Kagome Co. Ltd. | 9,000 | 204,023 | ||||||
KEY Coffee Inc. | 1,000 | 19,464 | ||||||
Mikuni Coca-Cola Bottling Co. Ltd. | 1,000 | 8,608 | ||||||
Sapporo Holdings Ltd. | 30,000 | 85,441 | ||||||
Takara Holdings Inc. | 20,000 | 142,273 | ||||||
|
| |||||||
631,264 | ||||||||
BIOTECHNOLOGY — 0.14% |
| |||||||
JCR Pharmaceuticals Co. Ltd. | 1,000 | 12,299 | ||||||
OncoTherapy Science Inc.a | 20 | 28,582 | ||||||
Takara Bio Inc. | 4,000 | 20,179 | ||||||
|
| |||||||
61,060 | ||||||||
BUILDING MATERIALS — 1.83% |
| |||||||
Central Glass Co. Ltd. | 20,000 | 65,390 | ||||||
Chofu Seisakusho Co. Ltd. | 3,000 | 67,816 | ||||||
Cleanup Corp. | 2,000 | 13,921 |
Security | Shares | Value | ||||||
Fujitec Co. Ltd. | 10,000 | $ | 63,602 | |||||
Nice Holdings Inc. | 10,000 | 24,138 | ||||||
Nichias Corp. | 10,000 | 51,596 | ||||||
Nichiha Corp. | 2,000 | 23,627 | ||||||
Nippon Sheet Glass Co. Ltd. | 100,000 | 70,243 | ||||||
Noritz Corp. | 3,000 | 53,295 | ||||||
Okabe Co. Ltd. | 3,000 | 18,314 | ||||||
Sanwa Holdings Corp. | 30,000 | 124,904 | ||||||
Sumitomo Osaka Cement Co. Ltd. | 40,000 | 129,757 | ||||||
Takara Standard Co. Ltd. | 10,000 | 75,351 | ||||||
|
| |||||||
781,954 | ||||||||
CHEMICALS — 6.41% |
| |||||||
Adeka Corp. | 11,000 | 86,258 | ||||||
Aica Kogyo Co. Ltd. | 6,000 | 96,322 | ||||||
C. Uyemura & Co. Ltd. | 1,000 | 33,665 | ||||||
Chugoku Marine Paints Ltd. | 10,000 | 47,510 | ||||||
Dai Nippon Toryo Co. Ltd. | 10,000 | 11,111 | ||||||
Dainichiseika Color & Chemicals Manufacturing Co. Ltd. | 10,000 | 42,273 | ||||||
Daiso Co. Ltd. | 10,000 | 26,820 | ||||||
DIC Corp. | 80,000 | 131,801 | ||||||
Earth Chemical Co. Ltd. | 2,000 | 74,049 | ||||||
Fujimi Inc. | 3,000 | 47,701 | ||||||
Ishihara Sangyo Kaisha Ltd.a | 40,000 | 30,140 | ||||||
Kinugawa Rubber Industrial Co. Ltd. | 2,000 | 13,103 | ||||||
Kureha Corp. | 20,000 | 83,014 | ||||||
Lintec Corp. | 6,000 | 113,103 | ||||||
New Japan Chemical Co. Ltd. | 3,000 | 19,770 | ||||||
Nihon Nohyaku Co. Ltd. | 10,000 | 45,977 | ||||||
Nihon Parkerizing Co. Ltd. | 6,000 | 85,900 | ||||||
Nippon Carbon Co. Ltd. | 20,000 | 37,548 | ||||||
Nippon Kayaku Co. Ltd. | 20,000 | 206,386 | ||||||
Nippon Paint Co. Ltd. | 20,000 | 171,137 | ||||||
Nippon Shokubai Co. Ltd. | 13,000 | 144,943 | ||||||
Nippon Soda Co. Ltd. | 20,000 | 85,824 | ||||||
Nippon Synthetic Chemical Industry Co. Ltd. (The) | 10,000 | 66,156 | ||||||
Nissan Chemical Industries Ltd. | 14,000 | 155,377 | ||||||
NOF Corp. | 20,000 | 95,019 | ||||||
S.T. Corp. | 1,000 | 11,686 | ||||||
Sakai Chemical Industry Co. Ltd. | 10,000 | 28,097 | ||||||
Sanyo Chemical Industries Ltd. | 1,000 | 5,594 | ||||||
Stella Chemifa Corp. | 1,000 | 18,276 |
34 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Sumitomo Bakelite Co. Ltd. | 20,000 | $ | 79,693 | |||||
Taiyo Ink Manufacturing Co. Ltd. | 2,000 | 54,968 | ||||||
Takasago International Corp. | 10,000 | 48,531 | ||||||
Toagosei Co. Ltd. | 20,000 | 73,819 | ||||||
Tokai Carbon Co. Ltd. | 20,000 | 62,835 | ||||||
Tokuyama Corp.b | 30,000 | 63,218 | ||||||
Tokyo Ohka Kogyo Co. Ltd. | 5,000 | 111,941 | ||||||
Toyo Ink Manufacturing Co. Ltd. | 20,000 | 72,031 | ||||||
Zeon Corp. | 20,000 | 161,175 | ||||||
|
| |||||||
2,742,771 | ||||||||
COAL — 0.03% |
| |||||||
Mitsui Matsushima Co. Ltd. | 10,000 | 13,665 | ||||||
|
| |||||||
13,665 | ||||||||
COMMERCIAL SERVICES — 2.17% |
| |||||||
Aeon Delight Co. Ltd. | 2,000 | 46,309 | ||||||
Duskin Co. Ltd. | 6,000 | 120,077 | ||||||
Future Architect Inc. | 20 | 7,591 | ||||||
GMO Payment Gateway Inc. | 737 | 13,177 | ||||||
Kyodo Printing Co. Ltd. | 10,000 | 23,372 | ||||||
Kyoritsu Maintenance Co. Ltd. | 1,000 | 22,350 | ||||||
Meitec Corp. | 4,000 | 88,684 | ||||||
Nichii Gakkan Co. | 6,000 | 61,533 | ||||||
Nihon M&A Center Inc. | 1,000 | 27,854 | ||||||
Nishio Rent All Co. Ltd. | 2,000 | 22,248 | ||||||
PARK24 Co. Ltd. | 12,000 | 197,854 | ||||||
Pasona Group Inc. | 40 | 26,258 | ||||||
Pronexus Inc. | 2,000 | 12,082 | ||||||
Sohgo Security Services Co. Ltd. | 7,000 | 103,257 | ||||||
Temp Holdings Co. Ltd. | 2,000 | 23,934 | ||||||
TKC Corp. | 2,000 | 40,843 | ||||||
Toppan Forms Co. Ltd. | 6,000 | 55,249 | ||||||
Weathernews Inc. | 1,000 | 38,633 | ||||||
|
| |||||||
931,305 | ||||||||
COMPUTERS — 1.54% |
| |||||||
DTS Corp. | 3,000 | 39,885 | ||||||
Ferrotec Corp. | 3,000 | 12,797 | ||||||
Ines Corp. | 3,000 | 17,854 | ||||||
Information Services International-Dentsu Ltd. | 1,000 | 9,221 | ||||||
Japan Digital Laboratory Co. Ltd. | 2,000 | 21,456 | ||||||
Melco Holdings Inc. | 1,000 | 21,481 | ||||||
NEC Networks & System Integration Corp. | 2,000 | 35,223 |
Security | Shares | Value | ||||||
Net One Systems Co. Ltd. | 10,000 | $ | 132,056 | |||||
NS Solutions Corp. | 2,000 | 38,851 | ||||||
OBIC Co. Ltd. | 700 | 147,152 | ||||||
Roland DG Corp. | 1,000 | 11,635 | ||||||
SCSK Corp. | 5,256 | 82,767 | ||||||
Wacom Co. Ltd. | 40 | 89,962 | ||||||
|
| |||||||
660,340 | ||||||||
COSMETICS & PERSONAL CARE — 1.39% |
| |||||||
Aderans Co. Ltd.a | 3,000 | 36,513 | ||||||
Dr. Ci:Labo Co. Ltd. | 10 | 39,081 | ||||||
Fancl Corp. | 5,000 | 57,982 | ||||||
Kose Corp. | 4,000 | 92,925 | ||||||
Lion Corp. | 20,000 | 116,475 | ||||||
Mandom Corp. | 2,000 | 53,103 | ||||||
Milbon Co. Ltd. | 1,000 | 33,755 | ||||||
Pigeon Corp. | 2,000 | 94,125 | ||||||
Pola Orbis Holdings Inc. | 2,000 | 69,987 | ||||||
|
| |||||||
593,946 | ||||||||
DISTRIBUTION & WHOLESALE — 1.96% |
| |||||||
Ai Holdings Corp. | 5,000 | 30,396 | ||||||
Canon Marketing Japan Inc. | 5,000 | 68,902 | ||||||
Chori Co. Ltd. | 10,000 | 12,133 | ||||||
Daiwabo Holdings Co. Ltd. | 20,000 | 35,249 | ||||||
Doshisha Co. Ltd. | 1,000 | 29,566 | ||||||
Hakuto Co. Ltd. | 1,000 | 9,476 | ||||||
Inabata & Co. Ltd. | 3,000 | 19,655 | ||||||
Itochu Enex Co. Ltd. | 7,000 | 37,369 | ||||||
Iwatani Corp. | 20,000 | 69,476 | ||||||
Japan Pulp & Paper Co. Ltd. | 10,000 | 32,950 | ||||||
Kanematsu Corp.a | 60,000 | 68,966 | ||||||
Matsuda Sangyo Co. Ltd. | 2,060 | 31,071 | ||||||
Meiwa Corp. | 2,000 | 10,805 | ||||||
Mitsuuroko Holdings Co. Ltd. | 2,000 | 13,921 | ||||||
Nagase & Co. Ltd. | 11,000 | 128,123 | ||||||
Paltac Corp. | 2,000 | 28,429 | ||||||
Ryoyo Electro Corp. | 2,000 | 19,591 | ||||||
Sankyo-Tateyama Holdings Inc. | 30,000 | 60,153 | ||||||
Shimojima Co. Ltd. | 1,000 | 12,937 | ||||||
Trusco Nakayama Corp. | 3,000 | 55,326 | ||||||
Yamazen Corp. | 7,000 | 46,130 | ||||||
Yuasa Trading Co. Ltd. | 10,000 | 17,369 | ||||||
|
| |||||||
837,993 |
SCHEDULESOF INVESTMENTS | 35 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
DIVERSIFIED FINANCIAL SERVICES — 2.17% |
| |||||||
AIFUL Corp.a,b | 16,500 | $ | 29,923 | |||||
Century Tokyo Leasing Corp. | 5,080 | 94,788 | ||||||
Fuyo General Lease Co. Ltd. | 2,000 | 58,135 | ||||||
GCA Savvian Group Corp. | 10 | 10,025 | ||||||
Hitachi Capital Corp. | 5,000 | 87,420 | ||||||
IBJ Leasing Co. Ltd. | 2,000 | 49,732 | ||||||
Ichiyoshi Securities Co. Ltd. | 5,000 | 24,585 | ||||||
J Trust Co. Ltd. | 3,000 | 28,429 | ||||||
Jaccs Co. Ltd. | 20,000 | 72,031 | ||||||
Japan Securities Finance Co. Ltd. | 11,000 | 50,013 | ||||||
Kenedix Inc.a | 260 | 25,535 | ||||||
Marusan Securities Co. Ltd. | 9,000 | 28,161 | ||||||
NEC Capital Solutions Ltd. | 1,000 | 13,691 | ||||||
Okasan Securities Group Inc. | 20,000 | 67,688 | ||||||
Orient Corp.a | 30,000 | 38,314 | ||||||
Osaka Securities Exchange Co. Ltd. | 30 | 136,207 | ||||||
Ricoh Leasing Co. Ltd. | 2,000 | 46,156 | ||||||
SPARX Group Co. Ltd.a | 90 | 5,874 | ||||||
Tokai Tokyo Financial Holdings Inc. | 20,000 | 64,368 | ||||||
|
| |||||||
931,075 | ||||||||
ELECTRIC — 0.15% |
| |||||||
Okinawa Electric Power Co. Inc. (The) | 2,000 | 64,777 | ||||||
|
| |||||||
64,777 | ||||||||
ELECTRICAL COMPONENTS & EQUIPMENT — 0.91% |
| |||||||
Fujikura Ltd. | 40,000 | 120,562 | ||||||
Funai Electric Co. Ltd. | 2,000 | 26,181 | ||||||
Hitachi Cable Ltd.a | 20,000 | 27,586 | ||||||
Icom Inc. | 1,000 | 23,040 | ||||||
Nippon Signal Co. Ltd. (The) | 5,000 | 30,971 | ||||||
Nissin Electric Co. Ltd. | 1,000 | 6,731 | ||||||
Sinfonia Technology Co. Ltd. | 10,000 | 18,646 | ||||||
SWCC Showa Holdings Co. Ltd. | 20,000 | 15,326 | ||||||
Takaoka Electric Manufacturing Co. Ltd. | 10,000 | 17,880 | ||||||
Tatsuta Electric Wire and Cable Co. Ltd. | 10,000 | 76,245 | ||||||
Tokyo Rope Manufacturing Co. Ltd. | 20,000 | 25,798 | ||||||
|
| |||||||
388,966 | ||||||||
ELECTRONICS — 5.54% |
| |||||||
Alps Electric Co. Ltd. | 20,000 | 106,513 | ||||||
Anritsu Corp. | 20,000 | 241,379 | ||||||
Azbil Corp. | 7,000 | 137,854 | ||||||
Chiyoda Integre Co. Ltd. | 2,000 | 21,916 |
Security | Shares | Value | ||||||
CMK Corp. | 6,000 | $ | 18,850 | |||||
Cosel Co. Ltd. | 3,000 | 39,732 | ||||||
Dai-ichi Seiko Co. Ltd. | 1,000 | 15,389 | ||||||
Dainippon Screen Manufacturing Co. Ltd. | 20,000 | 107,280 | ||||||
Eizo Nanao Corp. | 2,000 | 35,862 | ||||||
Enplas Corp. | 1,000 | 31,622 | ||||||
FDK Corp.a,b | 10,000 | 9,323 | ||||||
Fujitsu General Ltd. | 10,000 | 85,441 | ||||||
Furuno Electric Co. Ltd. | 4,000 | 15,632 | ||||||
Futaba Corp. | 4,000 | 51,392 | ||||||
Hioki E.E. Corp. | 1,000 | 16,782 | ||||||
HORIBA Ltd. | 4,000 | 117,957 | ||||||
Hosiden Corp. | 7,000 | 36,028 | ||||||
IDEC Corp. | 2,000 | 17,318 | ||||||
Inaba Denki Sangyo Co. Ltd. | 3,000 | 83,525 | ||||||
Japan Aviation Electronics Industry Ltd. | 10,000 | 82,631 | ||||||
JEOL Ltd. | 10,000 | 21,328 | ||||||
Kaga Electronics Co. Ltd. | 4,000 | 39,183 | ||||||
Koa Corp. | 5,000 | 42,529 | ||||||
Kuroda Electric Co. Ltd. | 4,000 | 48,071 | ||||||
Macnica Inc. | 1,000 | 20,562 | ||||||
MARUWA Co. Ltd. | 1,000 | 27,011 | ||||||
Meiko Electronics Co. Ltd. | 1,000 | 6,935 | ||||||
Minebea Co. Ltd. | 40,000 | 138,953 | ||||||
Mitsumi Electric Co. Ltd.a | 9,000 | 51,724 | ||||||
Nichicon Corp. | 6,000 | 45,977 | ||||||
Nidec Copal Electronics Corp. | 1,000 | 5,351 | ||||||
Nihon Dempa Kogyo Co. Ltd. | 2,000 | 23,244 | ||||||
Nippon Ceramic Co. Ltd. | 1,000 | 13,423 | ||||||
Nissha Printing Co. Ltd.a | 3,000 | 28,774 | ||||||
Nitto Kogyo Corp. | 3,000 | 49,349 | ||||||
Ryosan Co. Ltd. | 4,000 | 73,154 | ||||||
Sanshin Electronics Co. Ltd. | 4,000 | 28,506 | ||||||
Sanyo Denki Co. Ltd. | 10,000 | 51,213 | ||||||
Shinko Shoji Co. Ltd. | 2,000 | 18,059 | ||||||
SIIX Corp. | 1,000 | 13,423 | ||||||
Sodick Co. Ltd. | 5,000 | 22,158 | ||||||
Star Micronics Co. Ltd. | 5,000 | 48,595 | ||||||
Taiyo Yuden Co. Ltd. | 11,000 | 95,389 | ||||||
Tamura Corp. | 10,000 | 23,244 | ||||||
TOKO Inc.a | 10,000 | 27,331 | ||||||
Tokyo Seimitsu Co. Ltd. | 4,000 | 57,778 | ||||||
Toyo Corp. | 4,000 | 44,547 |
36 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
ULVAC Inc.a | 4,000 | $ | 32,133 | |||||
|
| |||||||
2,370,370 | ||||||||
ENGINEERING & CONSTRUCTION — 4.05% | ||||||||
Chudenko Corp. | 4,000 | 38,570 | ||||||
COMSYS Holdings Corp. | 12,000 | 153,257 | ||||||
Fudo Tetra Corp.a | 12,000 | 16,705 | ||||||
Hibiya Engineering Ltd. | 2,000 | 23,525 | ||||||
Japan Airport Terminal Co. Ltd. | 5,000 | 58,365 | ||||||
Kandenko Co. Ltd. | 10,000 | 48,787 | ||||||
Kyowa Exeo Corp. | 9,000 | 96,552 | ||||||
Maeda Corp. | 20,000 | 85,568 | ||||||
Maeda Road Construction Co. Ltd. | 10,000 | 126,564 | ||||||
MIRAIT Holdings Corp. | 5,000 | 35,760 | ||||||
Nippo Corp. | 10,000 | 109,195 | ||||||
Nippon Koei Co. Ltd. | 10,000 | 33,844 | ||||||
Nippon Road Co. Ltd. (The) | 10,000 | 36,015 | ||||||
Nishimatsu Construction Co. Ltd. | 30,000 | 46,360 | ||||||
Okumura Corp. | 20,000 | 62,580 | ||||||
Penta-Ocean Construction Co. Ltd.b | 35,000 | 81,354 | ||||||
Shinko Plantech Co. Ltd. | 5,000 | 41,507 | ||||||
SHO-BOND Holdings Co. Ltd. | 3,000 | 100,728 | ||||||
Taihei Dengyo Kaisha Ltd. | 1,000 | 6,386 | ||||||
Taihei Kogyo Co. Ltd. | 10,000 | 39,336 | ||||||
Taikisha Ltd. | 3,000 | 68,467 | ||||||
Takasago Thermal Engineering Co. Ltd. | 7,000 | 54,087 | ||||||
Takuma Co. Ltd. | 10,000 | 47,382 | ||||||
Toa Corp. | 20,000 | 31,673 | ||||||
Toda Corp. | 30,000 | 87,739 | ||||||
Tokyu Construction Co. Ltd. | 12,600 | 24,782 | ||||||
Toshiba Plant Systems & Services Corp. | 5,000 | 59,451 | ||||||
Toyo Construction Co. Ltd. | 40,000 | 26,564 | ||||||
Toyo Engineering Corp. | 20,000 | 78,672 | ||||||
Yahagi Construction Co. Ltd. | 3,000 | 12,797 | ||||||
|
| |||||||
1,732,572 | ||||||||
ENTERTAINMENT — 1.06% | ||||||||
Avex Group Holdings Inc. | 4,000 | 71,775 | ||||||
Heiwa Corp. | 5,000 | 87,420 | ||||||
Mars Engineering Corp. | 1,000 | 23,946 | ||||||
Shochiku Co. Ltd. | 10,000 | 97,318 | ||||||
Toei Co. Ltd. | 10,000 | 48,148 | ||||||
Tokyotokeiba Co. Ltd. | 20,000 | 28,097 | ||||||
Universal Entertainment Corp. | 3,000 | 63,640 |
Security | Shares | Value | ||||||
Yomiuri Land Co. Ltd. | 10,000 | $ | 32,823 | |||||
|
| |||||||
453,167 | ||||||||
ENVIRONMENTAL CONTROL — 0.56% | ||||||||
Asahi Holdings Inc. | 3,000 | 49,655 | ||||||
Daiseki Co. Ltd. | 4,060 | 66,267 | ||||||
Hitachi Zosen Corp. | 90,000 | 100,000 | ||||||
Oyo Corp. | 2,000 | 22,299 | ||||||
|
| |||||||
238,221 | ||||||||
FOOD — 4.30% | ||||||||
Ariake Japan Co. Ltd. | 3,000 | 67,395 | ||||||
Calbee Inc.b | 2,000 | 158,110 | ||||||
Ezaki Glico Co. Ltd. | 10,000 | 118,135 | ||||||
Fuji Oil Co. Ltd. | 7,000 | 93,423 | ||||||
Fujiya Co. Ltd.a | 10,000 | 25,032 | ||||||
House Foods Corp. | 8,000 | 135,479 | ||||||
Itoham Foods Inc. | 20,000 | 85,313 | ||||||
Izumiya Co. Ltd. | 10,000 | 48,404 | ||||||
J-Oil Mills Inc. | 10,000 | 28,097 | ||||||
Kasumi Co. Ltd. | 3,000 | 20,575 | ||||||
Kato Sangyo Co. Ltd. | 3,000 | 56,322 | ||||||
Kewpie Corp. | 11,000 | 170,128 | ||||||
Marudai Food Co. Ltd. | 10,000 | 36,271 | ||||||
Maruha Nichiro Holdings Inc. | 50,000 | 86,845 | ||||||
MEGMILK SNOW BRAND Co. Ltd. | 5,000 | 85,888 | ||||||
Meito Sangyo Co. Ltd. | 1,000 | 13,908 | ||||||
Mitsubishi Shokuhin Co. Ltd. | 1,000 | 24,291 | ||||||
Mitsui Sugar Co. Ltd. | 10,000 | 33,078 | ||||||
Morinaga & Co. Ltd. | 30,000 | 68,965 | ||||||
Morinaga Milk Industry Co. Ltd. | 20,000 | 68,966 | ||||||
Nichirei Corp. | 30,000 | 157,471 | ||||||
Nippon Beet Sugar Manufacturing Co. Ltd. | 20,000 | 39,080 | ||||||
Nippon Flour Mills Co. Ltd. | 10,000 | 43,167 | ||||||
Nippon Suisan Kaisha Ltd. | 28,000 | 61,507 | ||||||
Nisshin OilliO Group Ltd. (The) | 10,000 | 38,825 | ||||||
Prima Meat Packers Ltd. | 20,000 | 37,037 | ||||||
Yokohama Reito Co. Ltd. | 4,000 | 31,775 | ||||||
Yonekyu Corp. | 1,000 | 8,889 | ||||||
|
| |||||||
1,842,376 | ||||||||
FOREST PRODUCTS & PAPER — 0.78% | ||||||||
Chuetsu Pulp & Paper Co. Ltd. | 10,000 | 17,114 | ||||||
Daio Paper Corp. | 10,000 | 61,175 | ||||||
Hokuetsu Kishu Paper Co. Ltd. | 15,000 | 70,498 |
SCHEDULESOF INVESTMENTS | 37 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Mitsubishi Paper Mills Ltd.a | 40,000 | $ | 33,716 | |||||
Pack Corp. (The) | 1,000 | 17,497 | ||||||
Sumitomo Forestry Co. Ltd. | 16,000 | 132,618 | ||||||
|
| |||||||
332,618 | ||||||||
GAS — 0.08% | ||||||||
Shizuoka Gas Co. Ltd. | 5,000 | 34,674 | ||||||
|
| |||||||
34,674 | ||||||||
HAND & MACHINE TOOLS — 1.25% | ||||||||
Asahi Diamond Industrial Co. Ltd. | 5,000 | 54,981 | ||||||
DISCO Corp. | 3,000 | 148,659 | ||||||
Hitachi Koki Co. Ltd. | 6,000 | 44,521 | ||||||
Meidensha Corp.b | 20,000 | 73,052 | ||||||
Mori Seiki Co. Ltd. | 11,000 | 70,243 | ||||||
OSG Corp. | 8,000 | 113,716 | ||||||
Union Tool Co. | 2,000 | 28,787 | ||||||
|
| |||||||
533,959 | ||||||||
HEALTH CARE — PRODUCTS — 0.91% | ||||||||
Asahi Intecc Co. Ltd. | 1,000 | 30,856 | ||||||
Hogy Medical Co. Ltd. | 1,000 | 49,553 | ||||||
Nihon Kohden Corp. | 4,000 | 135,581 | ||||||
Nipro Corp. | 12,000 | 71,111 | ||||||
Paramount Bed Holdings Co. Ltd. | 2,000 | 61,456 | ||||||
Topcon Corp. | 7,000 | 42,107 | ||||||
|
| |||||||
390,664 | ||||||||
HEALTH CARE — SERVICES — 0.47% |
| |||||||
Ain Pharmaciez Inc. | 1,000 | 67,816 | ||||||
BML Inc. | 1,000 | 26,054 | ||||||
CMIC Holdings Co. Ltd. | 1,000 | 15,734 | ||||||
EPS Co. Ltd. | 20 | 59,336 | ||||||
Message Co. Ltd. | 10 | 34,483 | ||||||
|
| |||||||
203,423 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 0.06% |
| |||||||
Seiko Holdings Corp.a | 10,000 | 27,586 | ||||||
|
| |||||||
27,586 | ||||||||
HOME BUILDERS — 0.69% |
| |||||||
HAJIME CONSTRUCTION Co. Ltd. | 1,000 | 30,204 | ||||||
Haseko Corp.a | 140,000 | 87,612 | ||||||
Misawa Homes Co. Ltd. | 3,000 | 42,912 | ||||||
PanaHome Corp. | 10,000 | 57,344 | ||||||
SxL Corp.a | 10,000 | 18,263 | ||||||
Takamatsu Construction Group Co. Ltd. | 1,000 | 19,029 |
Security | Shares | Value | ||||||
Token Corp. | 1,000 | $ | 42,018 | |||||
|
| |||||||
297,382 | ||||||||
HOME FURNISHINGS — 1.13% |
| |||||||
Alpine Electronics Inc. | 5,000 | 48,340 | ||||||
Canon Electronics Inc. | 3,000 | 64,100 | ||||||
Clarion Co. Ltd.a | 10,000 | 17,752 | ||||||
Corona Corp. | 1,000 | 13,103 | ||||||
Foster Electric Co. Ltd. | 2,000 | 31,980 | ||||||
France Bed Holdings Co. Ltd. | 20,000 | 43,423 | ||||||
Hoshizaki Electric Co. Ltd. | 3,000 | 83,908 | ||||||
JVC Kenwood Corp. | 15,040 | 53,014 | ||||||
Nidec Sankyo Corp. | 10,000 | 53,384 | ||||||
Pioneer Corp.a | 28,000 | 74,023 | ||||||
|
| |||||||
483,027 | ||||||||
HOUSEHOLD PRODUCTS & WARES — 0.31% |
| |||||||
Kokuyo Co. Ltd. | 10,000 | 77,267 | ||||||
Mitsubishi Pencil Co. Ltd. | 1,000 | 18,161 | ||||||
Pilot Corp. | 20 | 36,501 | ||||||
|
| |||||||
131,929 | ||||||||
HOUSEWARES — 0.24% |
| |||||||
Noritake Co. Ltd. | 10,000 | 25,543 | ||||||
Sangetsu Co. Ltd. | 3,000 | 77,778 | ||||||
|
| |||||||
103,321 | ||||||||
INTERNET — 2.32% |
| |||||||
Access Co. Ltd.a | 30 | 23,027 | ||||||
Bit-Isle Inc. | 2,000 | 16,296 | ||||||
CyberAgent Inc. | 60 | 122,375 | ||||||
Digital Garage Inc. | 20 | 31,622 | ||||||
Dwango Co. Ltd. | 10 | 14,151 | ||||||
eAccess Ltd.b | 200 | 36,449 | ||||||
GMO Internet Inc. | 7,000 | 42,644 | ||||||
Gurunavi Inc. | 2,000 | 22,069 | ||||||
Internet Initiative Japan Inc. | 10 | 44,317 | ||||||
kabu.com Securities Co. Ltd. | 10,000 | 28,608 | ||||||
Kakaku.com Inc. | 4,000 | 143,193 | ||||||
Macromill Inc. | 2,000 | 23,729 | ||||||
Matsui Securities Co. Ltd. | 7,000 | 42,912 | ||||||
Mixi Inc.b | 10 | 15,096 | ||||||
Monex Group Inc. | 160 | 27,933 | ||||||
MonotaRO Co. Ltd. | 1,000 | 21,405 | ||||||
So-net Entertainment Corp. | 20 | 144,572 | ||||||
So-net M3 Inc. | 20 | 105,875 |
38 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Start Today Co. Ltd. | 6,000 | $ | 87,203 | |||||
|
| |||||||
993,476 | ||||||||
IRON & STEEL — 0.97% |
| |||||||
Aichi Steel Corp. | 10,000 | 39,208 | ||||||
Godo Steel Ltd. | 20,000 | 32,695 | ||||||
JFE Shoji Trade Corp.a | 12,000 | 41,226 | ||||||
Kyoei Steel Ltd. | 2,000 | 36,935 | ||||||
Mitsubishi Steel Manufacturing Co. Ltd. | 20,000 | 39,080 | ||||||
Nippon Koshuha Steel Co. Ltd. | 10,000 | 9,834 | ||||||
Nippon Yakin Kogyo Co. Ltd.a | 15,000 | 13,601 | ||||||
Osaka Steel Co. Ltd. | 1,000 | 17,893 | ||||||
Sanyo Special Steel Co. Ltd. | 10,000 | 33,206 | ||||||
Tokyo Steel Manufacturing Co. Ltd. | 11,000 | 35,824 | ||||||
TOPY Industries Ltd. | 20,000 | 48,787 | ||||||
Yodogawa Steel Works Ltd. | 20,000 | 68,965 | ||||||
|
| |||||||
417,254 | ||||||||
LEISURE TIME — 1.22% |
| |||||||
Accordia Golf Co. Ltd. | 110 | 70,243 | ||||||
Daiichikosho Co. Ltd. | 5,000 | 114,687 | ||||||
Dunlop Sports Co. Ltd. | 1,000 | 12,465 | ||||||
Fields Corp. | 20 | 30,753 | ||||||
H.I.S. Co. Ltd. | 3,000 | 103,678 | ||||||
Mizuno Corp. | 10,000 | 48,787 | ||||||
PGM Holdings K.K. | 30 | 22,605 | ||||||
Roland Corp. | 3,000 | 22,414 | ||||||
Round One Corp. | 7,000 | 34,061 | ||||||
Tokyo Dome Corp.a | 20,000 | 61,814 | ||||||
|
| |||||||
521,507 | ||||||||
LODGING — 0.25% |
| |||||||
Fujita Kanko Inc. | 10,000 | 33,206 | ||||||
Resorttrust Inc. | 4,000 | 75,198 | ||||||
|
| |||||||
108,404 | ||||||||
MACHINERY — 3.80% |
| |||||||
Aichi Corp. | 2,000 | 8,276 | ||||||
Aida Engineering Ltd. | 8,000 | 51,699 | ||||||
Chugai Ro Co. Ltd. | 10,000 | 28,991 | ||||||
CKD Corp. | 6,000 | 36,398 | ||||||
Daifuku Co. Ltd. | 10,000 | 52,490 | ||||||
Daihen Corp. | 10,000 | 27,969 | ||||||
Daiwa Industries Ltd. | 10,000 | 45,083 | ||||||
Denyo Co. Ltd. | 1,000 | 10,971 | ||||||
Ebara Corp. | 50,000 | 200,511 |
Security | Shares | Value | ||||||
Fuji Machine Manufacturing Co. Ltd. | 4,000 | $ | 54,355 | |||||
Furukawa Co. Ltd.a | 40,000 | 36,271 | ||||||
Harmonic Drive Systems Inc. | 1,000 | 19,298 | ||||||
Iseki & Co. Ltd. | 20,000 | 49,298 | ||||||
Juki Corp. | 20,000 | 28,863 | ||||||
Komori Corp. | 8,000 | 41,890 | ||||||
Makino Milling Machine Co. Ltd. | 10,000 | 47,510 | ||||||
Max Co. Ltd. | 4,000 | 45,262 | ||||||
Miura Co. Ltd. | 3,000 | 74,943 | ||||||
Modec Inc. | 3,000 | 53,257 | ||||||
Nippon Sharyo Ltd. | 10,000 | 34,355 | ||||||
Nippon Thompson Co. Ltd. | 10,000 | 37,165 | ||||||
Nitto Kohki Co. Ltd. | 1,000 | 23,142 | ||||||
Obara Group Inc. | 2,000 | 24,674 | ||||||
Okuma Corp. | 20,000 | 118,774 | ||||||
Shima Seiki Manufacturing Ltd. | 3,000 | 40,843 | ||||||
Sintokogio Ltd. | 6,000 | 47,356 | ||||||
Tadano Ltd. | 13,000 | 90,153 | ||||||
Torishima Pump Manufacturing Co. Ltd. | 2,000 | 16,730 | ||||||
Toshiba Machine Co. Ltd. | 10,000 | 39,591 | ||||||
Toyo Kanetsu K.K. | 20,000 | 42,146 | ||||||
Tsubakimoto Chain Co. | 20,000 | 118,263 | ||||||
Tsugami Corp. | 8,000 | 60,383 | ||||||
Yushin Precision Equipment Co. Ltd. | 1,000 | 18,071 | ||||||
|
| |||||||
1,624,981 | ||||||||
MANUFACTURING — 1.56% |
| |||||||
Amano Corp. | 7,000 | 59,719 | ||||||
Bando Chemical Industries Ltd. | 10,000 | 34,610 | ||||||
Glory Ltd. | 7,000 | 155,645 | ||||||
Japan Cash Machine Co. Ltd. | 1,000 | 8,697 | ||||||
JSP Corp. | 2,000 | 28,991 | ||||||
Nikkiso Co. Ltd. | 10,000 | 114,176 | ||||||
Nippon Valqua Industries Ltd. | 10,000 | 26,054 | ||||||
Nitta Corp. | 3,000 | 48,199 | ||||||
Noritsu Koki Co. Ltd. | 1,000 | 4,381 | ||||||
Ohara Inc. | 1,000 | 8,442 | ||||||
Shin-Etsu Polymer Co. Ltd. | 3,000 | 11,916 | ||||||
Tamron Co. Ltd. | 2,000 | 66,258 | ||||||
Tenma Corp. | 3,000 | 32,950 | ||||||
Tokai Rubber Industries Ltd. | 4,000 | 42,656 | ||||||
Toyo Tanso Co. Ltd. | 1,000 | 25,275 | ||||||
|
| |||||||
667,969 |
SCHEDULESOF INVESTMENTS | 39 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
MEDIA — 0.52% |
| |||||||
Gakken Holdings Co. Ltd. | 10,000 | $ | 26,564 | |||||
Kadokawa Group Holdings Inc.b | 2,000 | 54,866 | ||||||
SKY Perfect JSAT Holdings Inc. | 200 | 89,400 | ||||||
Tohokushinsha Film Corp. | 1,000 | 7,791 | ||||||
Tokyo Broadcasting System Holdings Inc. | 2,000 | 20,536 | ||||||
TV Asahi Corp. | 10 | 13,997 | ||||||
USEN Corp.a,b | 13,200 | 10,958 | ||||||
|
| |||||||
224,112 | ||||||||
METAL FABRICATE & HARDWARE — 1.64% |
| |||||||
Furukawa-Sky Aluminum Corp. | 10,000 | 25,543 | ||||||
Hanwa Co. Ltd. | 20,000 | 67,433 | ||||||
Kitz Corp. | 10,000 | 41,635 | ||||||
Misumi Group Inc. | 9,000 | 224,483 | ||||||
Mitsui High-Tech Inc.a | 3,000 | 14,981 | ||||||
Nachi-Fujikoshi Corp. | 20,000 | 57,982 | ||||||
Neturen Co. Ltd. | 4,000 | 25,287 | ||||||
Oiles Corp. | 3,080 | 61,836 | ||||||
Onoken Co. Ltd. | 2,000 | 16,169 | ||||||
Ryobi Ltd. | 20,000 | 47,254 | ||||||
Sumikin Bussan Corp. | 10,000 | 24,393 | ||||||
Tocalo Co. Ltd. | 2,000 | 28,327 | ||||||
Toho Zinc Co. Ltd. | 20,000 | 67,688 | ||||||
|
| |||||||
703,011 | ||||||||
MINING — 1.40% |
| |||||||
Dowa Holdings Co. Ltd. | 20,000 | 131,290 | ||||||
Mitsui Mining & Smelting Co. Ltd. | 60,000 | 120,307 | ||||||
Nippon Coke & Engineering Co. Ltd. | 25,000 | 30,332 | ||||||
Nippon Denko Co. Ltd. | 10,000 | 27,203 | ||||||
Nippon Light Metal Co. Ltd. | 60,000 | 59,770 | ||||||
Nittetsu Mining Co. Ltd. | 10,000 | 37,803 | ||||||
OSAKA Titanium technologies Co. Ltd. | 2,000 | 45,952 | ||||||
Pacific Metals Co. Ltd. | 20,000 | 64,112 | ||||||
Sumitomo Light Metal Industries Ltd. | 50,000 | 44,061 | ||||||
Toho Titanium Co. Ltd. | 4,000 | 39,285 | ||||||
|
| |||||||
600,115 | ||||||||
OFFICE & BUSINESS EQUIPMENT — 0.34% |
| |||||||
Riso Kagaku Corp. | 2,000 | 34,457 | ||||||
Sato Holdings Corp. | 2,000 | 30,243 | ||||||
Toshiba Tec Corp. | 20,000 | 81,226 | ||||||
|
| |||||||
145,926 |
Security | Shares | Value | ||||||
OFFICE FURNISHINGS — 0.19% |
| |||||||
Okamura Corp. | 10,000 | $ | 81,098 | |||||
|
| |||||||
81,098 | ||||||||
OIL & GAS — 0.12% |
| |||||||
AOC Holdings Inc. | 5,000 | 14,687 | ||||||
TOKAI Holdings Corp. | 8,000 | 36,884 | ||||||
|
| |||||||
51,571 | ||||||||
PACKAGING & CONTAINERS — 0.79% |
| |||||||
Achilles Corp. | 10,000 | 12,899 | ||||||
FP Corp. | 2,000 | 148,404 | ||||||
Fuji Seal International Inc. | 3,000 | 58,314 | ||||||
Nihon Yamamura Glass Co. Ltd. | 10,000 | 22,989 | ||||||
Rengo Co. Ltd. | 20,000 | 94,508 | ||||||
|
| |||||||
337,114 | ||||||||
PHARMACEUTICALS — 3.68% |
| |||||||
Fuso Pharmaceutical Industries Ltd. | 10,000 | 31,290 | ||||||
Kaken Pharmaceutical Co. Ltd. | 10,000 | 143,040 | ||||||
Katakura Industries Co. Ltd. | 4,000 | 34,789 | ||||||
Kissei Pharmaceutical Co. Ltd. | 2,000 | 34,815 | ||||||
Kobayashi Pharmaceutical Co. Ltd. | 3,000 | 160,345 | ||||||
KYORIN Holdings Inc. | 5,000 | 115,453 | ||||||
Mochida Pharmaceutical Co. Ltd. | 10,000 | 120,690 | ||||||
Nichi-Iko Pharmaceutical Co. Ltd. | 3,000 | 67,318 | ||||||
Nippon Shinyaku Co. Ltd. | 10,000 | 120,817 | ||||||
Rohto Pharmaceutical Co. Ltd. | 10,000 | 144,955 | ||||||
Sawai Pharmaceutical Co. Ltd. | 2,000 | 233,461 | ||||||
Seikagaku Corp. | 4,000 | 45,670 | ||||||
Ship Healthcare Holdings Inc. | 4,000 | 116,373 | ||||||
Toho Holdings Co. Ltd. | 5,000 | 89,655 | ||||||
Torii Pharmaceutical Co. Ltd. | 1,000 | 22,043 | ||||||
Towa Pharmaceutical Co. Ltd. | 1,000 | 64,496 | ||||||
Vital KSK Holdings Inc. | 3,000 | 29,234 | ||||||
|
| |||||||
1,574,444 | ||||||||
REAL ESTATE — 1.59% |
| |||||||
Airport Facilities Co. Ltd. | 2,000 | 8,991 | ||||||
Arnest One Corp. | 5,000 | 73,435 | ||||||
Daibiru Corp. | 7,000 | 45,773 | ||||||
Daikyo Inc. | 30,000 | 72,031 | ||||||
Goldcrest Co. Ltd. | 2,100 | 30,709 | ||||||
Heiwa Real Estate Co. Ltd. | 25,000 | 57,790 | ||||||
Iida Home Max Co. Ltd. | 2,000 | 17,905 | ||||||
Leopalace21 Corp.a | 16,000 | 51,699 |
40 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Relo Holdings Inc. | 1,000 | $ | 33,308 | |||||
Sumitomo Real Estate Sales Co. Ltd. | 1,000 | 48,404 | ||||||
TOC Co. Ltd. | 10,000 | 51,085 | ||||||
Toho Real Estate Co. Ltd. | 2,000 | 10,600 | ||||||
Tokyo Tatemono Co. Ltd.a | 40,000 | 132,312 | ||||||
Tokyu Livable Inc. | 3,000 | 36,437 | ||||||
Touei Housing Corp. | 1,000 | 10,192 | ||||||
|
| |||||||
680,671 | ||||||||
REAL ESTATE INVESTMENT TRUSTS — 6.07% |
| |||||||
Advance Residence Investment Corp. | 120 | 241,686 | ||||||
DA Office Investment Corp. | 30 | 88,506 | ||||||
Daiwahouse Residential Investment Corp. | 20 | 142,018 | ||||||
Frontier Real Estate Investment Corp. | 20 | 168,327 | ||||||
Fukuoka REIT Corp. | 10 | 69,987 | ||||||
Global One Real Estate Investment Corp. Ltd. | 10 | 61,558 | ||||||
Hankyu REIT Inc. | 10 | 46,743 | ||||||
Heiwa Real Estate REIT Inc. | 50 | 31,290 | ||||||
Industrial & Infrastructure Fund Investment Corp. | 10 | 71,648 | ||||||
Japan Excellent Inc. | 20 | 102,427 | ||||||
Japan Hotel Real Estate Investment Corp. | 150 | 41,111 | ||||||
Japan Logistics Fund Inc. | 20 | 179,310 | ||||||
Japan Rental Housing Investments Inc. | 80 | 42,810 | ||||||
Kenedix Realty Investment Corp. | 30 | 98,467 | ||||||
MID REIT Inc. | 20 | 50,600 | �� | |||||
Mori Hills REIT Investment Corp. | 20 | 85,185 | ||||||
MORI TRUST Sogo REIT Inc. | 20 | 176,756 | ||||||
Nippon Accommodations Fund Inc. | 20 | 133,844 | ||||||
Nomura Real Estate Residential Fund Inc. | 10 | 53,895 | ||||||
ORIX JREIT Inc. | 30 | 137,165 | ||||||
Premier Investment Corp. | 20 | 72,286 | ||||||
Sekisui House SI Investment Corp. | 10 | 46,552 | ||||||
TOKYU REIT Inc. | 20 | 97,829 | ||||||
Top REIT Inc. | 20 | 93,231 | ||||||
United Urban Investment Corp. | 240 | 267,893 | ||||||
|
| |||||||
2,601,124 | ||||||||
RETAIL — 10.27% |
| |||||||
Alpen Co. Ltd. | 2,000 | 38,519 | ||||||
Aoki Holdings Inc. | 2,000 | 42,503 | ||||||
Aoyama Trading Co. Ltd. | 6,000 | 117,778 | ||||||
Arc Land Sakamoto Co. Ltd. | 1,000 | 15,466 |
Security | Shares | Value | ||||||
Arcs Co. Ltd. | 4,000 | $ | 93,078 | |||||
Asahi Co. Ltd.b | 1,000 | 15,326 | ||||||
Askul Corp. | 2,000 | 26,207 | ||||||
Atom Corp. | 3,000 | 15,249 | ||||||
Autobacs Seven Co. Ltd. | 3,000 | 141,379 | ||||||
Belluna Co. Ltd. | 3,000 | 24,789 | ||||||
Best Denki Co. Ltd.a | 10,000 | 16,986 | ||||||
BIC Camera Inc.b | 80 | 40,000 | ||||||
Cawachi Ltd. | 2,000 | 38,314 | ||||||
Chiyoda Co. Ltd. | 3,000 | 76,782 | ||||||
cocokara fine Inc. | 1,000 | 34,496 | ||||||
Colowide Co. Ltd. | 5,000 | 42,656 | ||||||
Cosmos Pharmaceutical Corp. | 1,000 | 85,313 | ||||||
CREATE HOLDINGS Co. Ltd. | 1,000 | 28,493 | ||||||
Daiei Inc. (The)a | 11,500 | 25,409 | ||||||
DCM Holdings Co. Ltd. | 10,000 | 65,773 | ||||||
Don Quijote Co. Ltd. | 6,000 | 218,467 | ||||||
Doutor Nichires Holdings Co. Ltd. | 4,000 | 49,502 | ||||||
EDION Corp. | 8,000 | 35,147 | ||||||
Fuji Co. Ltd. | 2,000 | 45,236 | ||||||
Geo Holdings Corp. | 40 | 47,152 | ||||||
Growell Holdings Co. Ltd. | 1,000 | 33,793 | ||||||
Gulliver International Co. Ltd. | 500 | 15,006 | ||||||
H2O Retailing Corp. | 10,000 | 105,492 | ||||||
Heiwado Co. Ltd. | 4,000 | 60,434 | ||||||
Honeys Co. Ltd. | 1,800 | 25,126 | ||||||
Izumi Co. Ltd. | 6,000 | 116,015 | ||||||
Joshin Denki Co. Ltd. | 10,000 | 114,049 | ||||||
K’s Holdings Corp. | 5,000 | 142,337 | ||||||
Kappa Create Co. Ltd. | 1,000 | 22,375 | ||||||
Keiyo Co. Ltd.b | 5,000 | 30,268 | ||||||
Kisoji Co. Ltd. | 3,000 | 63,333 | ||||||
Kohnan Shoji Co. Ltd. | 3,000 | 36,130 | ||||||
Kojima Co. Ltd. | 2,000 | 5,594 | ||||||
Komeri Co. Ltd. | 3,000 | 75,747 | ||||||
Konaka Co. Ltd. | 2,000 | 19,642 | ||||||
Kura Corp. | 1,000 | 14,355 | ||||||
Maruetsu Inc. (The) | 10,000 | 34,355 | ||||||
Matsumotokiyoshi Co. Ltd. | 3,000 | 71,916 | ||||||
Matsuya Co. Ltd.a,b | 4,000 | 39,080 | ||||||
Megane Top Co. Ltd. | 3,000 | 34,291 | ||||||
Ministop Co. Ltd. | 1,000 | 16,667 | ||||||
MOS Food Services Inc. | 3,000 | 60,307 |
SCHEDULESOF INVESTMENTS | 41 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Nafco Co. Ltd. | 1,000 | $ | 17,510 | |||||
Nishimatsuya Chain Co. Ltd. | 6,000 | 48,276 | ||||||
Nissen Holdings Co. Ltd. | 4,000 | 15,990 | ||||||
Ohsho Food Service Corp. | 1,000 | 25,415 | ||||||
Otsuka Kagu Ltd. | 1,000 | 9,400 | ||||||
Pal Co. Ltd. | 500 | 29,885 | ||||||
Parco Co. Ltd. | 800 | 8,787 | ||||||
Paris Miki Holdings Inc. | 4,000 | 23,755 | ||||||
Plenus Co. Ltd. | 3,000 | 52,912 | ||||||
Point Inc. | 1,700 | 60,922 | ||||||
Ringer Hut Co. Ltd. | 2,000 | 26,488 | ||||||
Royal Holdings Co. Ltd. | 2,000 | 23,959 | ||||||
Ryohin Keikaku Co. Ltd. | 2,000 | 122,989 | ||||||
Saint Marc Holdings Co. Ltd. | 1,000 | 37,024 | ||||||
Saizeriya Co. Ltd.b | 4,000 | 61,354 | ||||||
San-A & Co. Ltd. | 1,000 | 39,080 | ||||||
Senshukai Co. Ltd. | 5,000 | 31,609 | ||||||
Seria Co. Ltd. | 2,000 | 31,213 | ||||||
Shimachu Co. Ltd. | 5,000 | 103,384 | ||||||
Sugi Holdings Co. Ltd. | 4,000 | 139,923 | ||||||
Sundrug Co. Ltd. | 4,000 | 145,441 | ||||||
Toridoll Corp. | 2,000 | 33,257 | ||||||
Tsuruha Holdings Inc. | 2,000 | 130,268 | ||||||
United Arrows Ltd. | 2,000 | 58,238 | ||||||
UNY Co. Ltd. | 23,000 | 190,639 | ||||||
Valor Co. Ltd. | 4,000 | 69,834 | ||||||
Watami Co. Ltd. | 3,000 | 66,897 | ||||||
Xebio Co. Ltd. | 3,000 | 63,180 | ||||||
Yellow Hat Ltd. | 2,000 | 31,392 | ||||||
Yoshinoya Holdings Co. Ltd. | 60 | 77,854 | ||||||
Zensho Holdings Co. Ltd.b | 8,000 | 103,193 | ||||||
|
| |||||||
4,396,400 | ||||||||
SEMICONDUCTORS — 0.52% |
| |||||||
Axell Corp. | 1,000 | 23,052 | ||||||
Megachips Corp. | 2,000 | 37,573 | ||||||
Mimasu Semiconductor Industry Co. Ltd. | 3,000 | 22,874 | ||||||
Nippon Chemi-Con Corp.a,b | 20,000 | 38,570 | ||||||
Sanken Electric Co. Ltd. | 10,000 | 30,141 | ||||||
Shindengen Electric Manufacturing Co. Ltd. | 10,000 | 24,138 | ||||||
Shinko Electric Industries Co. Ltd. | 7,000 | 45,862 | ||||||
|
| |||||||
222,210 |
Security | Shares | Value | ||||||
SHIPBUILDING — 0.29% |
| |||||||
Mitsui Engineering & Shipbuilding Co. Ltd. | 80,000 | $ | 87,867 | |||||
Namura Shipbuilding Co. Ltd. | 6,000 | 18,085 | ||||||
Sasebo Heavy Industries Co. Ltd. | 20,000 | 16,858 | ||||||
|
| |||||||
122,810 | ||||||||
SOFTWARE — 1.30% |
| |||||||
Capcom Co. Ltd. | 5,000 | 99,361 | ||||||
Fuji Soft Inc. | 3,000 | 53,372 | ||||||
IT Holdings Corp. | 9,048 | 114,284 | ||||||
NEC Mobiling Ltd. | 1,000 | 39,911 | ||||||
Nihon Unisys Ltd. | 7,000 | 46,488 | ||||||
NSD Co. Ltd. | 5,000 | 45,977 | ||||||
Obic Business Consultants Co. Ltd. | 500 | 27,395 | ||||||
Simplex Technology Inc. | 30 | 10,647 | ||||||
Systena Corp. | 20 | 16,092 | ||||||
Tecmo Koei Holdings Co. Ltd. | 4,000 | 32,286 | ||||||
Trans Cosmos Inc. | 3,000 | 37,663 | ||||||
Zenrin Co. Ltd. | 3,000 | 33,831 | ||||||
|
| |||||||
557,307 | ||||||||
STORAGE & WAREHOUSING — 0.28% |
| |||||||
Mitsui-Soko Co. Ltd. | 10,000 | 31,928 | ||||||
Sumitomo Warehouse Co. Ltd. (The) | 20,000 | 88,123 | ||||||
|
| |||||||
120,051 | ||||||||
TELECOMMUNICATIONS — 1.07% |
| |||||||
AIPHONE Co. Ltd. | 1,000 | 19,681 | ||||||
Denki Kogyo Co. Ltd. | 10,000 | 39,463 | ||||||
Hikari Tsushin Inc. | 3,000 | 150,191 | ||||||
Hitachi Kokusai Electric Inc. | 10,000 | 64,112 | ||||||
Japan Radio Co. Ltd.a | 10,000 | 23,372 | ||||||
MTI Ltd. | 10 | 10,447 | ||||||
Oki Electric Industry Co. Ltd.a | 80,000 | 92,976 | ||||||
T-Gaia Corp. | 20 | 37,778 | ||||||
Uniden Corp. | 10,000 | 21,967 | ||||||
|
| |||||||
459,987 | ||||||||
TEXTILES — 0.93% |
| |||||||
Kurabo Industries Ltd. | 30,000 | 49,425 | ||||||
Nisshinbo Holdings Inc. | 12,000 | 75,402 | ||||||
Nitto Boseki Co. Ltd. | 20,000 | 68,455 | ||||||
Seiren Co. Ltd. | 6,000 | 41,226 | ||||||
Tokai Corp. (GIFU) | 1,000 | 24,917 | ||||||
Toyobo Co. Ltd. | 100,000 | 107,280 |
42 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Unitika Ltd.a | 60,000 | $ | 29,885 | |||||
|
| |||||||
396,590 | ||||||||
TOYS, GAMES & HOBBIES — 0.11% |
| |||||||
Tomy Co. Ltd. | 8,000 | 45,466 | ||||||
|
| |||||||
45,466 | ||||||||
TRANSPORTATION — 2.06% |
| |||||||
Daiichi Chuo Kisen Kaishaa,b | 10,000 | 7,918 | ||||||
Fukuyama Transporting Co. Ltd. | 20,000 | 111,622 | ||||||
Hitachi Transport System Ltd. | 5,000 | 86,015 | ||||||
Iino Kaiun Kaisha Ltd. | 10,000 | 36,399 | ||||||
Kintetsu World Express Inc. | 2,000 | 62,324 | ||||||
Nippon Konpo Unyu Soko Co. Ltd. | 5,000 | 64,559 | ||||||
Sankyu Inc. | 30,000 | 112,261 | ||||||
Seino Holdings Co. Ltd. | 20,000 | 124,904 | ||||||
Senko Co. Ltd. | 10,000 | 42,529 | ||||||
Shibusawa Warehouse Co. Ltd. (The) | 10,000 | 27,842 | ||||||
Shinwa Kaiun Kaisha Ltd.a | 10,000 | 11,239 | ||||||
Sotetsu Holdings Inc. | 50,000 | 171,775 | ||||||
Yusen Air & Sea Service Co. Ltd. | 2,000 | 20,613 | ||||||
|
| |||||||
880,000 | ||||||||
VENTURE CAPITAL — 0.13% |
| |||||||
JAFCO Co. Ltd. | 3,000 | 57,395 | ||||||
|
| |||||||
57,395 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $48,165,176) | 42,634,224 | |||||||
SHORT-TERM INVESTMENTS — 2.10% |
| |||||||
MONEY MARKET FUNDS — 2.10% | ||||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.23%c,d,e | 831,560 | 831,560 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.23%c,d,e | 63,017 | 63,017 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%c,d | 4,831 | 4,831 | ||||||
|
| |||||||
899,408 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $899,408) |
| 899,408 | ||||||
|
|
Value | ||||||
TOTAL INVESTMENTS | ||||||
(Cost: $49,064,584) | $ | 43,533,632 | ||||
Other Assets, Less Liabilities — (1.67)% | (716,567 | ) | ||||
|
| |||||
NET ASSETS — 100.00% | $ | 42,817,065 | ||||
|
|
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 | 43 |
Table of Contents
Schedule of Investments
iSHARES® MSCI MALAYSIA INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 99.78% |
| |||||||
AGRICULTURE — 9.20% |
| |||||||
British American Tobacco (Malaysia) Bhd | 829,300 | $ | 16,928,390 | |||||
Genting Plantations Bhd | 1,653,200 | 4,915,419 | ||||||
IOI Corp. Bhd | 23,329,830 | 38,379,045 | ||||||
Kuala Lumpur Kepong Bhd | 3,488,200 | 25,945,197 | ||||||
|
| |||||||
86,168,051 | ||||||||
AIRLINES — 1.07% | ||||||||
AirAsia Bhd | 9,081,000 | 10,027,028 | ||||||
|
| |||||||
10,027,028 | ||||||||
AUTO MANUFACTURERS — 1.33% | ||||||||
UMW Holdings Bhd | 3,817,600 | 12,462,640 | ||||||
|
| |||||||
12,462,640 | ||||||||
BANKS — 27.63% | ||||||||
Alliance Financial Group Bhd | 7,307,100 | 9,658,609 | ||||||
AMMB Holdings Bhd | 12,037,737 | 24,464,596 | ||||||
CIMB Group Holdings Bhd | 35,080,864 | 87,463,572 | ||||||
Hong Leong Bank Bhd | 4,095,240 | 17,615,627 | ||||||
Malayan Banking Bhd | 24,962,120 | 73,100,783 | ||||||
Public Bank Bhd Foreign | 7,693,800 | 35,310,959 | ||||||
RHB Capital Bhd | 4,803,100 | 11,191,092 | ||||||
|
| |||||||
258,805,238 | ||||||||
BUILDING MATERIALS — 0.82% | ||||||||
Lafarge Malayan Cement Bhd | 2,776,560 | 7,642,316 | ||||||
|
| |||||||
7,642,316 | ||||||||
CHEMICALS — 4.50% | ||||||||
Petronas Chemicals Group Bhd | 20,331,400 | 42,165,938 | ||||||
|
| |||||||
42,165,938 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 0.63% |
| |||||||
Hong Leong Financial Group Bhd | 1,529,100 | 5,892,259 | ||||||
|
| |||||||
5,892,259 | ||||||||
ELECTRIC — 5.59% | ||||||||
Tenaga Nasional Bhd | 19,862,112 | 43,481,148 | ||||||
YTL Power International Bhd | 15,960,875 | 8,888,437 | ||||||
|
| |||||||
52,369,585 | ||||||||
ENGINEERING & CONSTRUCTION — 2.16% |
| |||||||
Gamuda Bhd | 12,067,400 | 13,324,541 | ||||||
Malaysia Airports Holdings Bhd | 3,954,000 | 6,934,844 | ||||||
|
| |||||||
20,259,385 |
Security | Shares | Value | ||||||
ENTERTAINMENT — 0.74% |
| |||||||
Berjaya Sports Toto Bhd | 4,905,450 | $ | 6,923,679 | |||||
|
| |||||||
6,923,679 | ||||||||
FOOD — 2.99% | ||||||||
Felda Global Ventures Holdings Bhda | 7,947,300 | 12,717,715 | ||||||
PPB Group Bhd | 3,443,366 | 15,318,543 | ||||||
|
| |||||||
28,036,258 | ||||||||
GAS — 2.85% | ||||||||
Petronas Gas Bhd | 4,310,400 | 26,735,654 | ||||||
|
| |||||||
26,735,654 | ||||||||
HEALTH CARE-SERVICES — 1.60% | ||||||||
IHH Healthcare Bhda | 14,623,400 | 14,976,758 | ||||||
|
| |||||||
14,976,758 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 11.07% |
| |||||||
Berjaya Corp. Bhd | 18,640,200 | 3,997,098 | ||||||
IJM Corp. Bhd | 8,527,840 | 14,028,836 | ||||||
MMC Corp. Bhd | 5,515,800 | 4,325,079 | ||||||
Sime Darby Bhd | 19,636,125 | 61,651,588 | ||||||
YTL Corp. Bhd | 33,993,212 | 19,692,019 | ||||||
|
| |||||||
103,694,620 | ||||||||
LODGING — 7.18% | ||||||||
Genting Bhd | 14,852,300 | 42,876,539 | ||||||
Genting Malaysia Bhd | 21,536,200 | 24,331,184 | ||||||
|
| |||||||
67,207,723 | ||||||||
OIL & GAS — 1.38% | ||||||||
Petronas Dagangan Bhd | 1,803,500 | 12,929,557 | ||||||
|
| |||||||
12,929,557 | ||||||||
OIL & GAS SERVICES — 1.89% | ||||||||
Malaysia Marine and Heavy Engineering Holdings Bhd | 3,485,700 | 5,332,580 | ||||||
Sapurakencana Petroleum Bhda | 16,352,500 | 12,403,721 | ||||||
|
| |||||||
17,736,301 | ||||||||
REAL ESTATE — 1.12% | ||||||||
SP Setia Bhd | 3,477,600 | 3,962,316 | ||||||
UEM Land Holdings Bhda | 10,999,300 | 6,512,628 | ||||||
|
| |||||||
10,474,944 | ||||||||
RETAIL — 0.70% | ||||||||
Parkson Holdings Bhd | 4,368,971 | 6,544,018 | ||||||
|
| |||||||
6,544,018 |
44 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI MALAYSIA INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
TELECOMMUNICATIONS — 13.05% | ||||||||
Axiata Group Bhd | 18,497,200 | $ | 35,461,107 | |||||
DiGi.Com Bhd | 22,582,400 | 34,764,392 | ||||||
Maxis Communications Bhd | 16,333,700 | 36,802,448 | ||||||
Telekom Malaysia Bhd | 7,793,100 | 15,164,682 | ||||||
|
| |||||||
122,192,629 | ||||||||
TRANSPORTATION — 2.28% | ||||||||
Bumi Armada Bhda | 8,506,000 | 10,317,728 | ||||||
MISC Bhd | 8,103,420 | 11,048,350 | ||||||
|
| |||||||
21,366,078 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $497,803,699) | 934,610,659 | |||||||
SHORT-TERM INVESTMENTS — 0.01% |
| |||||||
MONEY MARKET FUNDS — 0.01% | ||||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%b,c | 131,852 | 131,852 | ||||||
|
| |||||||
131,852 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS | ||||||||
(Cost: $131,852) | 131,852 | |||||||
|
| |||||||
TOTAL INVESTMENTS | ||||||||
(Cost: $497,935,551) | 934,742,511 | |||||||
Other Assets, Less Liabilities — 0.21% |
| 1,949,746 | ||||||
|
| |||||||
NET ASSETS — 100.00% | $ | 936,692,257 | ||||||
|
|
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
Schedule of Investments
iSHARES® MSCI PACIFIC EX-JAPAN INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 99.14% | ||||||||
AUSTRALIA — 63.48% | ||||||||
AGL Energy Ltd. | 1,229,262 | $ | 19,271,671 | |||||
ALS Ltd/Queensland | 767,520 | 6,543,845 | ||||||
Alumina Ltd. | 5,538,198 | 4,235,352 | ||||||
Amcor Ltd. | 2,719,530 | 21,163,045 | ||||||
AMP Ltd. | 6,528,348 | 30,090,367 | ||||||
APA Groupa | 1,459,518 | 7,270,191 | ||||||
Asciano Group | 2,195,058 | 10,162,799 | ||||||
ASX Ltd. | 395,322 | 12,444,292 | ||||||
Australia and New Zealand Banking Group Ltd. | 6,052,338 | 155,243,805 | ||||||
Bendigo and Adelaide Bank Ltd. | 890,520 | 6,975,932 | ||||||
BGP Holdings PLCb,c | 27,004,595 | 3,404 | ||||||
BHP Billiton Ltd. | 7,284,060 | 239,305,881 | ||||||
Boral Ltd. | 1,704,534 | 6,077,348 | ||||||
Brambles Ltd. | 3,508,944 | 24,695,219 | ||||||
Caltex Australia Ltd. | 304,056 | 4,908,219 | ||||||
Centro Retail Australia | 2,903,292 | 6,420,869 | ||||||
CFS Retail Property Trust Group | 4,510,656 | 8,926,841 | ||||||
Coca-Cola Amatil Ltd. | 1,289,286 | 18,240,723 | ||||||
Cochlear Ltd. | 128,166 | 8,927,340 | ||||||
Commonwealth Bank of Australia | 3,595,536 | 203,403,192 | ||||||
Computershare Ltd. | 998,760 | 8,670,213 | ||||||
Crown Ltd. | 898,146 | 8,335,134 | ||||||
CSL Ltd. | 1,154,970 | 53,031,797 | ||||||
Dexus Property Group | 10,415,886 | 10,279,901 | ||||||
Echo Entertainment Group Ltd. | 1,673,292 | 7,055,393 | ||||||
Fairfax Media Ltd.a | 5,042,016 | 2,188,481 | ||||||
Fortescue Metals Group Ltd. | 3,161,346 | 11,565,505 | ||||||
Goodman Group | 3,482,622 | 14,360,467 | ||||||
GPT Group | 3,278,196 | 11,891,355 | ||||||
Harvey Norman Holdings Ltd. | 1,212,780 | 2,569,361 | ||||||
Iluka Resources Ltd. | 944,148 | 8,976,711 | ||||||
Incitec Pivot Ltd. | 3,680,406 | 11,068,227 | ||||||
Insurance Australia Group Ltd. | 4,691,958 | 20,122,945 | ||||||
James Hardie Industries SE | 988,920 | 8,564,352 | ||||||
Leighton Holdings Ltd. | 342,924 | 5,666,771 | ||||||
Lend Lease Group | 1,226,556 | 10,761,787 | ||||||
Lynas Corp. Ltd.a,b | 3,844,980 | 2,543,100 | ||||||
Macquarie Group Ltd. | 748,332 | 20,772,542 | ||||||
Metcash Ltd. | 1,953,486 | 7,388,916 |
Security | Shares | Value | ||||||
Mirvac Group | 7,726,614 | $ | 10,779,840 | |||||
National Australia Bank Ltd. | 5,058,744 | 131,796,803 | ||||||
Newcrest Mining Ltd. | 1,727,904 | 44,017,550 | ||||||
Orica Ltd. | 823,116 | 20,585,705 | ||||||
Origin Energy Ltd. | 2,460,984 | 30,265,307 | ||||||
OZ Minerals Ltd. | 707,742 | 4,564,034 | ||||||
Qantas Airways Ltd.b | 2,487,552 | 2,956,374 | ||||||
QBE Insurance Group Ltd. | 2,666,640 | 35,908,572 | ||||||
QR National Ltd. | 3,847,440 | 13,916,474 | ||||||
Ramsay Health Care Ltd. | 299,874 | 7,716,627 | ||||||
Rio Tinto Ltd. | 984,738 | 50,110,423 | ||||||
Santos Ltd. | 2,156,682 | 25,029,674 | ||||||
Sims Metal Management Ltd. | 368,262 | 3,470,892 | ||||||
Sonic Healthcare Ltd. | 835,170 | 11,574,254 | ||||||
SP AusNet | 3,750,762 | 4,089,416 | ||||||
Stockland Corp. Ltd. | 5,132,544 | 16,867,438 | ||||||
Suncorp Group Ltd. | 2,907,966 | 27,618,123 | ||||||
Sydney Airport | 819,672 | 2,753,042 | ||||||
Tabcorp Holdings Ltd. | 1,624,092 | 4,900,979 | ||||||
Tatts Group Ltd. | 3,046,710 | 8,564,250 | ||||||
Telstra Corp. Ltd. | 9,847,872 | 39,182,528 | ||||||
Toll Holdings Ltd. | 1,535,040 | 7,344,970 | ||||||
Transurban Group | 2,961,102 | 18,513,907 | ||||||
Wesfarmers Ltd. | 2,273,286 | 81,098,756 | ||||||
Westfield Group | 4,894,908 | 50,131,133 | ||||||
Westfield Retail Trust | 6,566,478 | 19,611,900 | ||||||
Westpac Banking Corp. | 6,901,038 | 176,656,554 | ||||||
Whitehaven Coal Ltd. | 1,027,788 | 3,473,287 | ||||||
Woodside Petroleum Ltd. | 1,488,546 | 52,764,972 | ||||||
Woolworths Ltd. | 2,777,586 | 85,024,071 | ||||||
WorleyParsons Ltd. | 464,448 | 12,729,166 | ||||||
|
| |||||||
2,024,140,314 | ||||||||
HONG KONG — 21.22% |
| |||||||
AIA Group Ltd. | 23,124,000 | 79,452,648 | ||||||
ASM Pacific Technology Ltd.a | 442,800 | 4,932,528 | ||||||
Bank of East Asia Ltd. (The)a | 3,050,520 | 11,110,677 | ||||||
BOC Hong Kong (Holdings) Ltd. | 8,364,000 | 26,473,644 | ||||||
Cathay Pacific Airways Ltd.a | 2,706,000 | 4,409,842 | ||||||
Cheung Kong (Holdings) Ltd. | 3,198,000 | 43,498,985 | ||||||
Cheung Kong Infrastructure Holdings Ltd. | 984,000 | 5,949,989 | ||||||
CLP Holdings Ltd. | 4,059,000 | 33,832,632 | ||||||
First Pacific Co. Ltd. | 4,920,000 | 5,277,602 |
46 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI PACIFIC EX-JAPAN INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Foxconn International Holdings Ltd.b | 4,920,000 | $ | 1,547,758 | |||||
Galaxy Entertainment Group Ltd.a,b | 3,444,000 | 9,790,840 | ||||||
Hang Lung Group Ltd.a | 1,968,000 | 12,280,574 | ||||||
Hang Lung Properties Ltd. | 4,920,736 | 16,812,184 | ||||||
Hang Seng Bank Ltd.a | 1,746,600 | 24,860,550 | ||||||
Henderson Land Development Co. Ltd.a | 2,214,056 | 13,616,177 | ||||||
Hong Kong and China Gas Co. Ltd. (The) | 11,808,097 | 27,829,430 | ||||||
Hong Kong Exchanges and Clearing Ltd.a | 2,312,400 | 30,707,778 | ||||||
Hopewell Holdings Ltd. | 1,353,000 | 4,334,833 | ||||||
Hutchison Whampoa Ltd. | 4,920,000 | 43,039,097 | ||||||
Hysan Development Co. Ltd. | 1,476,000 | 6,622,376 | ||||||
Kerry Properties Ltd. | 1,722,000 | 8,181,234 | ||||||
Li & Fung Ltd.a | 13,285,200 | 21,581,759 | ||||||
Lifestyle International Holdings Ltd. | 1,107,000 | 2,420,592 | ||||||
Link REIT (The) | 5,166,000 | 23,045,106 | ||||||
MGM China Holdings Ltd. | 2,164,800 | 3,566,948 | ||||||
MTR Corp. Ltd. | 3,321,000 | 11,903,149 | ||||||
New World Development Co. Ltd. | 8,364,941 | 10,396,523 | ||||||
NWS Holdings Ltd. | 3,198,000 | 5,096,184 | ||||||
Orient Overseas International Ltd. | 492,000 | 2,626,114 | ||||||
PCCW Ltd. | 9,102,000 | 3,497,046 | ||||||
Power Assets Holdings Ltd. | 3,075,000 | 24,917,164 | ||||||
Sands China Ltd. | 5,412,000 | 19,118,620 | ||||||
Shangri-La Asia Ltd. | 3,445,000 | 6,449,173 | ||||||
Sino Land Co. Ltd. | 6,396,800 | 10,474,051 | ||||||
SJM Holdings Ltd. | 4,428,000 | 9,328,415 | ||||||
Sun Hung Kai Properties Ltd. | 3,474,000 | 45,058,424 | ||||||
Swire Pacific Ltd. Class A | 1,476,000 | 17,440,825 | ||||||
Wharf (Holdings) Ltd. (The) | 3,444,600 | 21,206,079 | ||||||
Wheelock and Co. Ltd. | 1,968,000 | 7,497,747 | ||||||
Wing Hang Bank Ltd. | 369,000 | 3,273,128 | ||||||
Wynn Macau Ltd.a | 3,542,400 | 8,129,537 | ||||||
Yue Yuen Industrial (Holdings) Ltd.a | 1,722,000 | 4,973,125 | ||||||
|
| |||||||
676,561,087 | ||||||||
NEW ZEALAND — 0.89% |
| |||||||
Auckland International Airport Ltd. | 2,098,380 | 4,383,180 | ||||||
Contact Energy Ltd.b | 818,688 | 3,209,742 | ||||||
Fletcher Building Ltd. | 1,541,436 | 8,235,291 | ||||||
SKYCITY Entertainment Group Ltd. | 1,295,928 | 3,945,953 |
Security | Shares | Value | ||||||
Telecom Corp. of New Zealand Ltd. | 4,311,642 | $ | 8,521,374 | |||||
|
| |||||||
28,295,540 | ||||||||
SINGAPORE — 13.55% |
| |||||||
Ascendas REIT | 4,182,813 | 7,913,611 | ||||||
CapitaLand Ltd. | 5,658,000 | 13,652,862 | ||||||
CapitaMall Trust Management Ltd. | 5,166,000 | 8,200,000 | ||||||
CapitaMalls Asia Ltd. | 2,952,000 | 3,916,595 | ||||||
City Developments Ltd. | 1,230,000 | 11,359,307 | ||||||
ComfortDelGro Corp. Ltd.a | 4,182,000 | 5,615,560 | ||||||
COSCO Corp. (Singapore) Ltd.a | 2,214,104 | 1,721,726 | ||||||
DBS Group Holdings Ltd. | 4,056,000 | 46,985,089 | ||||||
Fraser and Neave Ltd. | 2,214,150 | 14,572,849 | ||||||
Genting Singapore PLCa | 13,776,400 | 15,075,185 | ||||||
Global Logistic Properties Ltd. | 4,674,000 | 8,880,375 | ||||||
Golden Agri-Resources Ltd. | 15,006,987 | 8,541,735 | ||||||
Hutchison Port Holdings Trust | 11,808,000 | 8,265,600 | ||||||
Jardine Cycle & Carriage Ltd. | 246,000 | 9,128,860 | ||||||
Keppel Corp. Ltd. | 3,198,200 | 28,689,962 | ||||||
Keppel Land Ltd.a | 1,722,000 | 4,679,798 | ||||||
Neptune Orient Lines Ltd.a,b | 1,968,750 | 1,720,328 | ||||||
Noble Group Ltd.a | 8,610,708 | 8,283,509 | ||||||
Olam International Ltd.a | 3,690,600 | 5,680,577 | ||||||
Oversea-Chinese Banking Corp. Ltd. | 5,904,600 | 43,974,454 | ||||||
SembCorp Industries Ltd. | 2,214,240 | 10,029,226 | ||||||
SembCorp Marine Ltd.a | 1,968,200 | 7,889,210 | ||||||
Singapore Airlines Ltd. | 1,230,800 | 10,508,273 | ||||||
Singapore Exchange Ltd.a | 1,968,000 | 11,106,878 | ||||||
Singapore Press Holdings Ltd.a | 3,750,517 | 11,936,470 | ||||||
Singapore Technologies Engineering Ltd. | 3,444,000 | 9,414,815 | ||||||
Singapore Telecommunications Ltd. | 17,958,328 | 48,804,499 | ||||||
StarHub Ltd. | 1,476,000 | 4,271,573 | ||||||
United Overseas Bank Ltd. | 2,796,000 | 42,789,514 | ||||||
UOL Group Ltd. | 984,000 | 4,157,191 | ||||||
Wilmar International Ltd.a | 4,428,000 | 11,110,823 | ||||||
Yangzijiang Shipbuilding (Holdings) Ltd.a | 4,182,000 | 3,302,285 | ||||||
|
| |||||||
432,178,739 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $2,764,962,689) |
| 3,161,175,680 |
SCHEDULESOF INVESTMENTS | 47 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI PACIFIC EX-JAPAN INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS — 2.92% |
| |||||||
MONEY MARKET FUNDS — 2.92% |
| |||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.23%d,e,f | 86,271,015 | $ | 86,271,015 | |||||
BlackRock Cash Funds: Prime, | ||||||||
0.23%d,e,f | 6,537,737 | 6,537,737 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%d,e | 301,802 | 301,802 | ||||||
|
| |||||||
93,110,554 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $93,110,554) |
| 93,110,554 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $2,858,073,243) |
| 3,254,286,234 | ||||||
Other Assets, Less Liabilities — (2.06)% |
| (65,704,365 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 3,188,581,869 | |||||
|
|
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.
48 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
iSHARES® MSCI SINGAPORE INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 99.36% |
| |||||||
AGRICULTURE — 4.45% |
| |||||||
Golden Agri-Resources Ltd. | 51,975,628 | $ | 29,583,691 | |||||
Wilmar International Ltd.a | 15,015,000 | 37,675,926 | ||||||
|
| |||||||
67,259,617 | ||||||||
AIRLINES — 2.61% |
| |||||||
Singapore Airlines Ltd.a | 4,620,467 | 39,448,432 | ||||||
|
| |||||||
39,448,432 | ||||||||
BANKS — 30.31% |
| |||||||
DBS Group Holdings Ltd. | 13,860,500 | 160,561,348 | ||||||
Oversea-Chinese Banking Corp. Ltd. | 19,635,000 | 146,231,481 | ||||||
United Overseas Bank Ltd. | 9,910,000 | 151,660,975 | ||||||
|
| |||||||
458,453,804 | ||||||||
DISTRIBUTION & WHOLESALE — 2.83% |
| |||||||
Jardine Cycle & Carriage Ltd. | 1,155,000 | 42,861,111 | ||||||
|
| |||||||
42,861,111 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 2.58% |
| |||||||
Singapore Exchange Ltd.a | 6,930,000 | 39,111,111 | ||||||
|
| |||||||
39,111,111 | ||||||||
ENGINEERING & CONSTRUCTION — 4.51% |
| |||||||
SembCorp Industries Ltd. | 8,085,000 | 36,620,370 | ||||||
Singapore Technologies Engineering Ltd. | 11,550,000 | 31,574,074 | ||||||
|
| |||||||
68,194,444 | ||||||||
ENTERTAINMENT — 3.42% |
| |||||||
Genting Singapore PLCa | 47,355,400 | 51,819,882 | ||||||
|
| |||||||
51,819,882 | ||||||||
FOOD — 1.29% |
| |||||||
Olam International Ltd.a | 12,705,000 | 19,555,556 | ||||||
|
| |||||||
19,555,556 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 8.76% |
| |||||||
Keppel Corp. Ltd. | 11,550,100 | 103,612,008 | ||||||
Noble Group Ltd. | 30,030,999 | 28,889,850 | ||||||
|
| |||||||
132,501,858 | ||||||||
LODGING — 2.11% |
| |||||||
City Developments Ltd. | 3,465,000 | 32,000,000 | ||||||
|
| |||||||
32,000,000 | ||||||||
MEDIA — 2.74% |
| |||||||
Singapore Press Holdings Ltd.a | 13,027,000 | 41,459,989 | ||||||
|
| |||||||
41,459,989 |
Security | Shares | Value | ||||||
REAL ESTATE — 11.20% |
| |||||||
CapitaLand Ltd. | 19,635,000 | $ | 47,379,630 | |||||
CapitaMalls Asia Ltd. | 11,550,000 | 15,324,074 | ||||||
Fraser and Neave Ltd. | 6,930,000 | 45,611,111 | ||||||
Global Logistic Properties Ltd. | 16,170,000 | 30,722,222 | ||||||
Keppel Land Ltd.a | 5,775,000 | 15,694,444 | ||||||
UOL Group Ltd.a | 3,465,000 | 14,638,889 | ||||||
|
| |||||||
169,370,370 | ||||||||
REAL ESTATE INVESTMENT TRUSTS — 3.82% |
| |||||||
Ascendas REIT | 15,015,335 | 28,408,041 | ||||||
CapitaMall Trust Management Ltd. | 18,480,800 | 29,334,603 | ||||||
|
| |||||||
57,742,644 | ||||||||
SHIPBUILDING — 3.04% |
| |||||||
COSCO Corp. (Singapore) Ltd.a | 8,085,000 | 6,287,037 | ||||||
SembCorp Marine Ltd.a | 6,930,000 | 27,777,778 | ||||||
Yangzijiang Shipbuilding (Holdings) Ltd.a | 15,015,000 | 11,856,481 | ||||||
|
| |||||||
45,921,296 | ||||||||
TELECOMMUNICATIONS — 12.09% |
| |||||||
Singapore Telecommunications Ltd. | 62,370,568 | 169,501,544 | ||||||
StarHub Ltd. | 4,620,000 | 13,370,370 | ||||||
|
| |||||||
182,871,914 | ||||||||
TRANSPORTATION — 3.60% |
| |||||||
ComfortDelGro Corp. Ltd.a | 15,015,000 | 20,162,037 | ||||||
Hutchison Port Holdings Trust | 40,425,000 | 28,297,500 | ||||||
Neptune Orient Lines Ltd.a,b | 6,930,499 | 6,055,992 | ||||||
|
| |||||||
54,515,529 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $1,391,265,764) |
| 1,503,087,557 | ||||||
SHORT-TERM INVESTMENTS — 6.20% |
| |||||||
MONEY MARKET FUNDS — 6.20% | ||||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.23%c,d,e | 85,804,787 | 85,804,787 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.23%c,d,e | 6,502,406 | 6,502,406 |
SCHEDULESOF INVESTMENTS | 49 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SINGAPORE INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%c,d | 1,432,138 | $ | 1,432,138 | |||||
|
| |||||||
93,739,331 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $93,739,331) |
| 93,739,331 | ||||||
|
| |||||||
TOTAL INVESTMENTS | ||||||||
(Cost: $1,485,005,095) |
| 1,596,826,888 | ||||||
Other Assets, Less Liabilities — (5.56)% |
| (84,140,381 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 1,512,686,507 | |||||
|
|
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. |
Financial futures contracts purchased as of August 31, 2012 were as follows:
Number of Contracts | Issue (Expiration) | Exchange | Notional Value | Net Unrealized Appreciation (Depreciation) | ||||||||||
182 | SGX MSCI Singapore Index (Sept. 2012) | Singapore | $10,128,620 | $(43,899) | ||||||||||
See notes to financial statements.
50 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
iSHARES® MSCI SOUTH KOREA INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 97.30% |
| |||||||
AEROSPACE & DEFENSE — 0.16% |
| |||||||
Korea Aerospace Industries Ltd.a | 183,410 | $ | 4,162,439 | |||||
|
| |||||||
4,162,439 | ||||||||
AGRICULTURE — 1.59% |
| |||||||
KT&G Corp. | 560,001 | 42,396,462 | ||||||
|
| |||||||
42,396,462 | ||||||||
AIRLINES — 0.29% |
| |||||||
Korean Air Lines Co. Ltd.b | 182,160 | 7,625,956 | ||||||
|
| |||||||
7,625,956 | ||||||||
AUTO MANUFACTURERS — 9.57% |
| |||||||
Hyundai Motor Co. | 786,177 | 166,641,462 | ||||||
Kia Motors Corp. | 1,360,564 | 88,855,606 | ||||||
|
| |||||||
255,497,068 | ||||||||
AUTO PARTS & EQUIPMENT — 5.06% |
| |||||||
Hankook Tire Co. Ltd. | 498,830 | 18,289,151 | ||||||
Hyundai Mobis Co. Ltd. | 348,479 | 94,442,915 | ||||||
Hyundai Wia Corp. | 81,870 | 12,988,080 | ||||||
Mando Corp.a | 66,656 | 9,458,293 | ||||||
|
| |||||||
135,178,439 | ||||||||
BANKS — 0.69% |
| |||||||
Industrial Bank of Korea | 827,640 | 8,789,743 | ||||||
Korea Exchange Bankb | 1,287,620 | 9,702,898 | ||||||
|
| |||||||
18,492,641 | ||||||||
BIOTECHNOLOGY — 0.55% |
| |||||||
Celltrion Inc.a | 548,299 | 14,569,761 | ||||||
|
| |||||||
14,569,761 | ||||||||
CHEMICALS — 4.05% |
| |||||||
Hanwha Chemical Corp. | 429,310 | 7,907,969 | ||||||
Honam Petrochemical Corp.a | 74,400 | 15,343,924 | ||||||
KCC Corp. | 23,066 | 5,753,159 | ||||||
KP Chemical Corp. | 267,120 | 2,825,110 | ||||||
LG Chem Ltd.a | 237,213 | 62,929,261 | ||||||
OCI Co. Ltd.a | 79,346 | 13,286,980 | ||||||
|
| |||||||
108,046,403 | ||||||||
COMMERCIAL SERVICES — 0.19% |
| |||||||
S1 Corp.a | 98,149 | 5,103,705 | ||||||
|
| |||||||
5,103,705 |
Security | Shares | Value | ||||||
COMPUTERS — 0.44% |
| |||||||
SK C&C Co. Ltd. | 120,527 | $ | 11,631,778 | |||||
|
| |||||||
11,631,778 | ||||||||
COSMETICS & PERSONAL CARE — 1.87% |
| |||||||
AmorePacific Corp.a | 16,635 | 17,138,980 | ||||||
AmorePacific Group | 15,639 | 5,981,999 | ||||||
LG Household & Health Care Ltd.a | 49,002 | 26,862,835 | ||||||
|
| |||||||
49,983,814 | ||||||||
DISTRIBUTION & WHOLESALE — 2.03% |
| |||||||
Daewoo International Corp. | 194,113 | 5,876,639 | ||||||
Hanwha Corp. | 229,050 | 6,651,711 | ||||||
Samsung C&T Corp.a | 642,826 | 36,542,714 | ||||||
SK Networks Co. Ltd.a | 618,410 | 5,145,128 | ||||||
|
| |||||||
54,216,192 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 9.25% |
| |||||||
BS Financial Group Inc. | 883,092 | 9,184,079 | ||||||
Daewoo Securities Co. Ltd. | 838,677 | 8,315,625 | ||||||
DGB Financial Group Inc. | 673,440 | 7,775,312 | ||||||
Hana Financial Group Inc. | 1,172,561 | 35,033,441 | ||||||
Hyundai Securities Co. Ltd. | 592,527 | 4,428,449 | ||||||
KB Financial Group Inc. | 1,859,012 | 60,212,573 | ||||||
Korea Investment Holdings Co. Ltd. | 206,575 | 6,945,763 | ||||||
Mirae Asset Securities Co. Ltd. | 116,822 | 3,181,491 | ||||||
Samsung Card Co. Ltd. | 214,930 | 6,809,945 | ||||||
Samsung Securities Co. Ltd. | 317,297 | 13,576,970 | ||||||
Shinhan Financial Group Co. Ltd. | 2,154,967 | 67,044,473 | ||||||
Woori Finance Holdings Co. Ltd. | 1,870,510 | 17,804,568 | ||||||
Woori Investment & Securities Co. Ltd. | 672,898 | 6,582,940 | ||||||
|
| |||||||
246,895,629 | ||||||||
ELECTRIC — 1.07% |
| |||||||
Korea Electric Power Corp.b | 1,313,330 | 28,474,534 | ||||||
|
| |||||||
28,474,534 | ||||||||
ELECTRICAL COMPONENTS & EQUIPMENT — 1.62% |
| |||||||
LG Electronics Inc.a | 540,467 | 33,534,319 | ||||||
LG Innotek Co. Ltd.a,b | 65,810 | 5,208,539 | ||||||
LS Industrial Systems Co. Ltd.a | 80,176 | 4,557,763 | ||||||
|
| |||||||
43,300,621 | ||||||||
ELECTRONICS — 2.08% |
| |||||||
LG Display Co. Ltd.a,b | 1,228,782 | 28,103,464 | ||||||
Samsung Electro-Mechanics Co. Ltd. | 320,794 | 27,509,755 | ||||||
|
| |||||||
55,613,219 |
SCHEDULESOF INVESTMENTS | 51 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SOUTH KOREA INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
ENGINEERING & CONSTRUCTION — 2.75% |
| |||||||
Daelim Industrial Co. Ltd. | 146,149 | $ | 11,438,168 | |||||
Daewoo Engineering & Construction Co. Ltd.b | 538,344 | 4,744,687 | ||||||
GS Engineering & Construction Corp. | 184,130 | 11,392,245 | ||||||
Hyundai Engineering & Construction Co. Ltd. | 346,339 | 19,352,555 | ||||||
Samsung Engineering Co. Ltd.a | 155,565 | 26,393,092 | ||||||
|
| |||||||
73,320,747 | ||||||||
ENVIRONMENTAL CONTROL — 0.37% |
| |||||||
Woongjin Coway Co. Ltd. | 286,730 | 9,918,830 | ||||||
|
| |||||||
9,918,830 | ||||||||
FOOD — 1.20% |
| |||||||
CJ CheilJedang Corp. | 41,084 | 11,080,052 | ||||||
Lotte Confectionery Co. Ltd.a | 3,809 | 5,451,860 | ||||||
ORION Corp.a | 19,151 | 15,528,408 | ||||||
|
| |||||||
32,060,320 | ||||||||
GAS — 0.23% |
| |||||||
Korea Gas Corp. | 122,620 | 6,160,044 | ||||||
|
| |||||||
6,160,044 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 0.47% |
| |||||||
CJ Corp.a | 76,824 | 5,525,031 | ||||||
LS Corp. | 91,449 | 7,076,543 | ||||||
|
| |||||||
12,601,574 | ||||||||
HOME BUILDERS — 0.21% |
| |||||||
Hyundai Development Co. | 304,817 | 5,601,352 | ||||||
|
| |||||||
5,601,352 | ||||||||
HOME FURNISHINGS — 1.01% |
| |||||||
LG Corp. | 486,779 | 26,856,772 | ||||||
|
| |||||||
26,856,772 | ||||||||
INSURANCE — 3.25% |
| |||||||
Dongbu Insurance Co. Ltd. | 215,260 | 8,793,479 | ||||||
Hyundai Marine & Fire Insurance Co. Ltd. | 322,250 | 9,287,275 | ||||||
Korea Life Insurance Co. Ltd. | 880,130 | 5,507,479 | ||||||
Samsung Fire & Marine Insurance Co. Ltd. | 181,645 | 37,461,655 | ||||||
Samsung Life Insurance Co. Ltd. | 303,564 | 25,818,157 | ||||||
|
| |||||||
86,868,045 |
Security | Shares | Value | ||||||
INTERNET — 2.50% |
| |||||||
NCsoft Corp.a | 80,971 | $ | 18,019,326 | |||||
NHN Corp.a | 213,257 | 48,773,993 | ||||||
|
| |||||||
66,793,319 | ||||||||
IRON & STEEL — 4.93% |
| |||||||
Dongkuk Steel Mill Co. Ltd.a | 166,471 | 2,310,824 | ||||||
Hyundai Steel Co. | 283,678 | 20,901,602 | ||||||
POSCO | 333,570 | 108,482,829 | ||||||
|
| |||||||
131,695,255 | ||||||||
LODGING — 0.39% |
| |||||||
Kangwon Land Inc. | 508,912 | 10,405,868 | ||||||
|
| |||||||
10,405,868 | ||||||||
MACHINERY — 0.79% |
| |||||||
Doosan Heavy Industries & Construction Co. Ltd. | 250,178 | 13,053,245 | ||||||
Doosan Infracore Co. Ltd.a,b | 514,230 | 8,021,920 | ||||||
|
| |||||||
21,075,165 | ||||||||
MANUFACTURING — 1.27% |
| |||||||
Cheil Industries Inc. | 240,610 | 21,948,340 | ||||||
Doosan Corp.a | 40,345 | 4,818,109 | ||||||
Kumho Petro Chemical Co. Ltd.a | 71,447 | 7,084,092 | ||||||
|
| |||||||
33,850,541 | ||||||||
METAL FABRICATE & HARDWARE — 0.51% |
| |||||||
Hyosung Corp. | 115,641 | 6,186,545 | ||||||
Hyundai Hysco Co. Ltd. | 178,300 | 7,480,075 | ||||||
|
| |||||||
13,666,620 | ||||||||
MINING — 0.61% |
| |||||||
Korea Zinc Co. Ltd. | 45,260 | 16,314,941 | ||||||
|
| |||||||
16,314,941 | ||||||||
OIL & GAS — 3.78% |
| |||||||
GS Holdings Corp. | 268,736 | 15,395,254 | ||||||
S-Oil Corp.a | 235,123 | 21,344,205 | ||||||
SK Holdings Co. Ltd. | 132,869 | 19,556,349 | ||||||
SK Innovation Co. Ltd. | 309,171 | 44,551,688 | ||||||
|
| |||||||
100,847,496 | ||||||||
PHARMACEUTICALS — 0.20% |
| |||||||
Yuhan Corp. | 45,469 | 5,369,920 | ||||||
|
| |||||||
5,369,920 |
52 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SOUTH KOREA INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
RETAIL — 2.06% |
| |||||||
E-Mart Co. Ltd.a | 107,812 | $ | 23,469,925 | |||||
Hyundai Department Store Co. Ltd.a | 79,144 | 9,939,866 | ||||||
Lotte Shopping Co. Ltd. | 52,111 | 14,673,980 | ||||||
Shinsegae Co. Ltd. | 34,351 | 6,842,195 | ||||||
|
| |||||||
54,925,966 | ||||||||
SEMICONDUCTORS — 24.60% |
| |||||||
Samsung Electronics Co. Ltd. | 544,575 | 591,791,099 | ||||||
Samsung Techwin Co. Ltd.a | 197,295 | 12,380,658 | ||||||
SK Hynix Inc.a,b | 2,813,470 | 52,568,526 | ||||||
|
| |||||||
656,740,283 | ||||||||
SHIPBUILDING — 3.30% | �� | |||||||
Daewoo Shipbuilding & Marine Engineering Co. Ltd. | 498,330 | 10,694,578 | ||||||
Hyundai Heavy Industries Co. Ltd. | 214,001 | 43,663,088 | ||||||
Hyundai Mipo Dockyard Co. Ltd. | 57,951 | 6,256,691 | ||||||
Samsung Heavy Industries Co. Ltd. | 840,210 | 27,510,236 | ||||||
|
| |||||||
88,124,593 | ||||||||
TELECOMMUNICATIONS — 1.63% |
| |||||||
KT Corp. | 169,812 | 5,148,426 | ||||||
LG Uplus Corp. | 1,211,485 | 8,114,827 | ||||||
Samsung SDI Co. Ltd. | 185,570 | 23,387,912 | ||||||
SK Telecom Co. Ltd. | 53,517 | 6,862,817 | ||||||
|
| |||||||
43,513,982 | ||||||||
TRANSPORTATION — 0.73% |
| |||||||
Hyundai Glovis Co. Ltd.a | 70,585 | 14,183,876 | ||||||
Hyundai Merchant Marine Co. Ltd.a,b | 220,050 | 5,313,976 | ||||||
|
| |||||||
19,497,852 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $1,192,542,749) | 2,597,398,146 | |||||||
PREFERRED STOCKS — 2.57% |
| |||||||
AUTO MANUFACTURERS — 0.77% |
| |||||||
Hyundai Motor Co. Ltd.a | 118,306 | 7,215,401 | ||||||
Hyundai Motor Co. Ltd. Series 2 | 197,816 | 13,285,076 | ||||||
|
| |||||||
20,500,477 | ||||||||
CHEMICALS — 0.12% |
| |||||||
LG Chem Ltd. | 39,115 | 3,133,682 | ||||||
|
| |||||||
3,133,682 |
Security | Shares | Value | ||||||
SEMICONDUCTORS — 1.68% |
| |||||||
Samsung Electronics Co. Ltd. | 70,032 | $ | 44,995,772 | |||||
|
| |||||||
44,995,772 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS | ||||||||
(Cost: $35,542,963) | 68,629,931 | |||||||
SHORT-TERM INVESTMENTS — 6.26% |
| |||||||
MONEY MARKET FUNDS — 6.26% |
| |||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.23%c,d,e | 150,784,807 | 150,784,807 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.23%c,d,e | 11,426,681 | 11,426,681 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%c,d | 5,008,334 | 5,008,334 | ||||||
|
| |||||||
167,219,822 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| 167,219,822 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| 2,833,247,899 | ||||||
Other Assets, Less Liabilities — (6.13)% |
| (163,696,684 | ) | |||||
|
| |||||||
NET ASSETS —100.00% |
| $ | 2,669,551,215 | |||||
|
|
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 | 53 |
Table of Contents
Schedule of Investments
iSHARES® MSCI TAIWAN INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 98.91% |
| |||||||
AIRLINES — 0.51% |
| |||||||
China Airlines Ltd. | 15,631,761 | $ | 6,001,978 | |||||
EVA Airways Corp. | 9,823,212 | 5,509,999 | ||||||
|
| |||||||
11,511,977 | ||||||||
APPAREL — 1.44% | ||||||||
Far Eastern New Century Corp. | 18,396,031 | 19,347,433 | ||||||
Pou Chen Corp. | 13,395,103 | 12,925,060 | ||||||
|
| |||||||
32,272,493 | ||||||||
AUTO MANUFACTURERS — 0.58% |
| |||||||
China Motor Co. Ltd. | 3,572,000 | 3,267,764 | ||||||
Yulon Motor Co. Ltd.a | 5,358,362 | 9,732,393 | ||||||
|
| |||||||
13,000,157 | ||||||||
AUTO PARTS & EQUIPMENT — 1.34% |
| |||||||
Cheng Shin Rubber Industry Co. Ltd. | 10,716,757 | 26,048,543 | ||||||
Nan Kang Rubber Tire Co. Ltd.a | 2,763,076 | 4,003,789 | ||||||
|
| |||||||
30,052,332 | ||||||||
BANKS — 0.81% | ||||||||
Chang Hwa Commercial Bank Ltd.a | 25,797,155 | 13,307,270 | ||||||
Taiwan Business Bank Ltd.b | 17,045,556 | 4,894,387 | ||||||
|
| |||||||
18,201,657 | ||||||||
BUILDING MATERIALS — 1.72% | ||||||||
Asia Cement Corp.a | 11,037,181 | 12,676,673 | ||||||
Taiwan Cement Corp. | 18,753,504 | 20,380,840 | ||||||
Taiwan Glass Industry Corp.a | 5,585,693 | 5,548,208 | ||||||
|
| |||||||
38,605,721 | ||||||||
CHEMICALS — 8.63% | ||||||||
China Petrochemical Development Corp. | 8,037,800 | 6,427,342 | ||||||
Eternal Chemical Co. Ltd. | 3,873,839 | 3,201,146 | ||||||
Formosa Chemicals & Fibre Corp. | 18,753,204 | 48,399,809 | ||||||
Formosa Plastics Corp.a | 23,256,768 | 62,663,055 | ||||||
LCY Chemical Corp.a | 2,679,250 | 3,640,796 | ||||||
Nan Ya Plastics Corp. | 27,683,860 | 52,038,373 | ||||||
Taiwan Fertilizer Co. Ltd. | 4,465,000 | 11,016,777 | ||||||
TSRC Corp.a | 3,167,720 | 6,663,095 | ||||||
|
| |||||||
194,050,393 |
Security | Shares | Value | ||||||
COMPUTERS — 8.28% | ||||||||
Acer Inc.a,b | 14,288,841 | $ | 12,618,605 | |||||
Advantech Co. Ltd. | 1,786,771 | 6,204,273 | ||||||
ASUSTeK Computer Inc. | 3,934,857 | 39,281,568 | ||||||
Chicony Electronics Co. Ltd. | 2,769,135 | 5,843,188 | ||||||
Chimei Innolux Corp.a,b | 30,362,008 | 9,711,463 | ||||||
Clevo Co.a | 2,679,300 | 3,524,571 | ||||||
Compal Electronics Inc.a | 25,004,554 | 21,914,779 | ||||||
Foxconn Technology Co. Ltd. | 4,312,442 | 16,414,089 | ||||||
Inventec Corp. | 13,395,868 | 4,383,143 | ||||||
Lite-On Technology Corp. | 12,560,639 | 15,202,269 | ||||||
Quanta Computer Inc.a | 14,463,240 | 37,327,918 | ||||||
Wistron Corp.a | 12,153,404 | 13,593,504 | ||||||
|
| |||||||
186,019,370 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 10.84% |
| |||||||
Capital Securities Corp. | 9,823,043 | 3,328,900 | ||||||
China Development Financial Holding Corp.a | 73,226,508 | 17,358,626 | ||||||
Chinatrust Financial Holding Co. Ltd.a | 60,866,868 | 36,376,646 | ||||||
E.Sun Financial Holding Co. Ltd. | 22,508,553 | 12,550,260 | ||||||
First Financial Holding Co. Ltd. | 38,807,536 | 22,480,410 | ||||||
Fubon Financial Holding Co. Ltd. | 33,737,515 | 33,511,104 | ||||||
Hua Nan Financial Holdings Co. Ltd. | 30,362,410 | 16,321,151 | ||||||
Mega Financial Holding Co. Ltd. | 47,999,972 | 36,139,006 | ||||||
SinoPac Financial Holdings Co. Ltd. | 35,878,979 | 14,255,279 | ||||||
Taishin Financial Holdings Co. Ltd. | 39,196,361 | 14,984,419 | ||||||
Taiwan Cooperative Financial Holding Co. Ltd. | 25,254,692 | 13,870,645 | ||||||
Yuanta Financial Holding Co. Ltd. | 48,222,453 | 22,379,623 | ||||||
|
| |||||||
243,556,069 | ||||||||
ELECTRICAL COMPONENTS & EQUIPMENT — 2.37% |
| |||||||
Delta Electronics Inc. | 10,716,180 | 36,494,620 | ||||||
Pacific Electric Wire & Cable Co. Ltd.b,c | 197 | — | ||||||
Simplo Technology Co. Ltd.a | 1,786,835 | 10,559,574 | ||||||
Walsin Lihwa Corp.b | 19,646,069 | 6,178,958 | ||||||
|
| |||||||
53,233,152 |
54 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI TAIWAN INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
ELECTRONICS — 13.00% | ||||||||
AU Optronics Corp.a,b | 44,650,830 | $ | 13,551,335 | |||||
Cheng Uei Precision Industry Co. Ltd.a | 2,679,762 | 5,323,556 | ||||||
E Ink Holdings Inc.a | 4,465,000 | 4,464,851 | ||||||
Hon Hai Precision Industry Co. Ltd. | 59,831,899 | 169,401,524 | ||||||
Kinsus Interconnect Technology Corp.a | 1,786,043 | 5,110,477 | ||||||
Nan Ya Printed Circuit Board Corp.a | 956,446 | 1,532,817 | ||||||
Pegatron Corp.a | 9,823,037 | 12,315,283 | ||||||
Phison Electronics Corp.a | 893,698 | 6,743,539 | ||||||
Radiant Opto-Electronics Corp.a | 2,493,450 | 10,697,751 | ||||||
Synnex Technology International Corp.a | 7,144,538 | 15,934,531 | ||||||
TPK Holding Co. Ltd.a | 1,194,466 | 15,433,820 | ||||||
Tripod Technology Corp. | 2,679,061 | 5,903,577 | ||||||
Unimicron Technology Corp.a | 7,144,794 | 8,122,608 | ||||||
Wintek Corp.a,b | 9,823,926 | 4,985,599 | ||||||
WPG Holdings Co. Ltd.a | 8,037,744 | 9,473,218 | ||||||
Ya Hsin Industrial Co. Ltd.b,c | 6,845,461 | 23 | ||||||
Zhen Ding Technology Holding Ltd.a | 957,450 | 3,036,885 | ||||||
|
| |||||||
292,031,394 | ||||||||
ENGINEERING & CONSTRUCTION — 0.30% |
| |||||||
CTCI Corp. | 3,572,000 | 6,762,125 | ||||||
|
| |||||||
6,762,125 | ||||||||
FOOD — 1.93% | ||||||||
Standard Foods Corp. | 1,786,920 | 4,743,085 | ||||||
Uni-President Enterprises Co.a | 24,118,547 | 38,612,545 | ||||||
|
| |||||||
43,355,630 | ||||||||
INSURANCE — 2.65% |
| |||||||
Cathay Financial Holding Co. Ltd.a | 42,142,987 | 40,242,043 | ||||||
China Life Insurance Co. Ltd.a | 10,716,139 | 9,696,082 | ||||||
Shin Kong Financial Holding Co. Ltd.a,b | 35,720,411 | 9,672,216 | ||||||
|
| |||||||
59,610,341 | ||||||||
IRON & STEEL — 2.96% | ||||||||
China Steel Corp.a | 67,961,701 | 58,202,318 | ||||||
Feng Hsin Iron & Steel Co. Ltd.a | 2,679,050 | 4,141,432 | ||||||
Tung Ho Steel Enterprise Corp. | 4,465,882 | 4,115,333 | ||||||
|
| |||||||
66,459,083 |
Security | Shares | Value | ||||||
LEISURE TIME — 0.40% | ||||||||
Giant Manufacturing Co. Ltd. | 1,786,590 | $ | 9,007,215 | |||||
|
| |||||||
9,007,215 | ||||||||
LODGING — 0.09% | ||||||||
Formosa International Hotels Corp.a | 178,200 | 1,951,507 | ||||||
|
| |||||||
1,951,507 | ||||||||
MACHINERY — 0.31% | ||||||||
Teco Electric and Machinery Co. Ltd. | 10,716,092 | 7,084,192 | ||||||
|
| |||||||
7,084,192 | ||||||||
MANUFACTURING — 0.93% | ||||||||
Airtac International Group | 468,000 | 2,281,326 | ||||||
Hiwin Technologies Corp.a | 977,854 | 7,052,067 | ||||||
Largan Precision Co. Ltd.a | 553,794 | 11,519,270 | ||||||
|
| |||||||
20,852,663 | ||||||||
METAL FABRICATE & HARDWARE — 0.72% |
| |||||||
Catcher Technology Co. Ltd.a | 3,239,743 | 16,171,132 | ||||||
|
| |||||||
16,171,132 | ||||||||
OIL & GAS — 0.91% | ||||||||
Formosa Petrochemical Corp. | 7,144,950 | 20,372,566 | ||||||
|
| |||||||
20,372,566 | ||||||||
REAL ESTATE — 0.61% | ||||||||
Farglory Land Development Co. Ltd.a | 1,786,000 | 3,214,096 | ||||||
Highwealth Construction Corp. | 2,679,000 | 4,472,305 | ||||||
Ruentex Development Co. Ltd. | 3,572,665 | 5,988,040 | ||||||
|
| |||||||
13,674,441 | ||||||||
RETAIL — 1.78% | ||||||||
Far Eastern Department Stores Co. Ltd.a | 5,565,090 | 5,472,001 | ||||||
Hotai Motor Co. Ltd.a | 1,421,000 | 10,247,938 | ||||||
President Chain Store Corp.a | 3,572,215 | 19,023,348 | ||||||
Ruentex Industries Ltd.a | 2,679,550 | 5,206,832 | ||||||
|
| |||||||
39,950,119 | ||||||||
SEMICONDUCTORS — 27.67% | ||||||||
Advanced Semiconductor Engineering Inc.a | 36,645,448 | 27,406,699 | ||||||
Epistar Corp.a | 4,465,047 | 9,063,966 | ||||||
Everlight Electronics Co. Ltd.a | 1,942,784 | 3,000,025 | ||||||
Inotera Memories Inc.a,b | 10,716,024 | 1,835,438 |
SCHEDULESOF INVESTMENTS | 55 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI TAIWAN INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Macronix International Co. Ltd.a | 21,432,448 | $ | 5,781,916 | |||||
MediaTek Inc.a | 6,814,632 | 72,808,328 | ||||||
Motech Industries Inc.a,b | 1,786,118 | 1,747,296 | ||||||
MStar Semiconductor Inc.a | 1,257,634 | 10,014,547 | ||||||
Novatek Microelectronics Corp. Ltd.a | 2,995,544 | 9,651,430 | ||||||
Powertech Technology Inc.a | 4,465,036 | 8,422,909 | ||||||
Realtek Semiconductor Corp.a | 2,706,746 | 5,097,008 | ||||||
Richtek Technology Corp. | 893,416 | 5,085,888 | ||||||
Siliconware Precision Industries Co. Ltd. | 17,860,214 | 20,155,428 | ||||||
Sino-American Silicon Products Inc.a | 2,679,408 | 3,180,293 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 146,452,882 | 407,316,119 | ||||||
Transcend Information Inc.a | 893,905 | 2,345,863 | ||||||
United Microelectronics Corp. | 72,333,501 | 28,980,736 | ||||||
|
| |||||||
621,893,889 | ||||||||
TELECOMMUNICATIONS — 7.25% |
| |||||||
Chunghwa Telecom Co. Ltd. | 22,325,648 | 67,459,221 | ||||||
Far EasTone Telecommunications Co. Ltd. | 9,351,259 | 23,041,732 | ||||||
HTC Corp.a | 4,194,884 | 36,135,023 | ||||||
Taiwan Mobile Co. Ltd. | 9,823,609 | 36,406,818 | ||||||
|
| |||||||
163,042,794 | ||||||||
TEXTILES — 0.18% | ||||||||
Formosa Taffeta Co. Ltd. | 4,465,515 | 4,070,267 | ||||||
|
| |||||||
4,070,267 | ||||||||
TRANSPORTATION — 0.70% | ||||||||
Evergreen Marine Corp. Ltd. | 9,823,766 | 5,247,914 | ||||||
U-Ming Marine Transport Corp. | 2,679,800 | 4,026,276 | ||||||
Wan Hai Lines Ltd.b | 6,251,854 | 3,172,788 | ||||||
Yang Ming Marine Transport Corp. | 8,350,635 | 3,331,778 | ||||||
|
| |||||||
15,778,756 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $1,503,763,165) | 2,222,571,435 |
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS — 9.69% |
| |||||||
MONEY MARKET FUNDS — 9.69% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.23%d,e,f | 195,747,847 | $ | 195,747,847 | |||||
BlackRock Cash Funds: Prime, | ||||||||
0.23%d,e,f | 14,834,043 | 14,834,043 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%d,e | 7,309,605 | 7,309,605 | ||||||
|
| |||||||
217,891,495 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $217,891,495) | 217,891,495 | |||||||
|
| |||||||
TOTAL INVESTMENTS | ||||||||
(Cost: $1,721,654,660) | 2,440,462,930 | |||||||
Other Assets, Less Liabilities — (8.60)% |
| (193,334,940 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% | $ | 2,247,127,990 | ||||||
|
|
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. |
Financial futures contracts purchased as of August 31, 2012 were as follows:
Number of Contracts | Issue (Expiration) | Exchange | Notional Value | Net Unrealized Appreciation (Depreciation) | ||||||||||||||
781 | MSCI Taiwan Index (Sept. 2012) | Singapore | $20,415,340 | $(165,994) | ||||||||||||||
See notes to financial statements.
56 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
iSHARES® MSCI THAILAND INVESTABLE MARKET INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 99.05% |
| |||||||
AIRLINES — 0.48% |
| |||||||
Thai Airways International PCL NVDRa | 4,310,366 | $ | 2,833,686 | |||||
|
| |||||||
2,833,686 | ||||||||
AUTO PARTS & EQUIPMENT — 0.15% |
| |||||||
Somboon Advance Technology PCL NVDR | 952,900 | 904,700 | ||||||
|
| |||||||
904,700 | ||||||||
BANKS — 32.58% | ||||||||
Bangkok Bank PCL Foreign | 5,325,000 | 32,797,990 | ||||||
Bangkok Bank PCL NVDR | 3,365,800 | 20,193,726 | ||||||
Bank of Ayudhya PCL NVDR | 12,149,400 | 12,310,306 | ||||||
Kasikornbank PCL Foreign | 7,560,200 | 40,774,655 | ||||||
Kasikornbank PCL NVDR | 4,192,600 | 22,612,076 | ||||||
Kiatnakin Bank PCL NVDR | 2,078,900 | 2,769,876 | ||||||
Krung Thai Bank PCL NVDR | 19,129,600 | 10,134,079 | ||||||
LH Financial Group PCL NVDR | 26,161,643 | 1,093,721 | ||||||
Siam Commercial Bank PCL NVDR | 9,738,100 | 46,616,084 | ||||||
Thanachart Capital PCL NVDR | 4,529,200 | 4,878,267 | ||||||
|
| |||||||
194,180,780 | ||||||||
BUILDING MATERIALS — 0.55% | ||||||||
Dynasty Ceramic PCL NVDR | 1,111,800 | 1,836,147 | ||||||
TPI Polene PCL NVDR | 3,911,900 | 1,423,190 | ||||||
|
| |||||||
3,259,337 | ||||||||
CHEMICALS — 7.09% | ||||||||
Indorama Ventures PCL NVDR | 9,429,710 | 8,651,800 | ||||||
IRPC PCL NVDR | 66,270,200 | 7,952,001 | ||||||
PTT Global Chemical PCL NVDR | 10,920,507 | 21,781,768 | ||||||
Siam Gas and Petrochemicals PCL NVDR | 2,095,700 | 943,015 | ||||||
Sri Trang Agro-Industry PCL NVDR | 4,023,471 | 1,848,986 | ||||||
Vinythai PCL NVDR | 1,851,565 | 1,099,062 | ||||||
|
| |||||||
42,276,632 | ||||||||
COAL — 1.72% | ||||||||
Banpu PCL NVDR | 712,150 | 10,227,142 | ||||||
|
| |||||||
10,227,142 | ||||||||
COMMERCIAL SERVICES — 0.41% | ||||||||
Bangkok Expressway PCL NVDR | 2,756,100 | 2,440,778 | ||||||
|
| |||||||
2,440,778 |
Security | Shares | Value | ||||||
COMPUTERS — 0.20% | ||||||||
Cal-Comp Electronics (Thailand) PCL NVDR | 13,706,800 | $ | 1,198,552 | |||||
|
| |||||||
1,198,552 | ||||||||
DISTRIBUTION & WHOLESALE — 0.12% |
| |||||||
Energy Earth PCL NVDRa | 4,559,200 | 718,763 | ||||||
|
| |||||||
718,763 | ||||||||
DIVERSIFIED FINANCIAL SERVICES —0.74% |
| |||||||
Phatra Capital PCL NVDR | 818,800 | 966,829 | ||||||
TISCO Financial Group PCL NVDR | 2,676,200 | 3,416,244 | ||||||
|
| |||||||
4,383,073 | ||||||||
ELECTRIC — 2.50% | ||||||||
Electricity Generating PCL NVDR | 1,040,700 | 3,985,448 | ||||||
Glow Energy PCL NVDR | 3,442,400 | 6,866,124 | ||||||
Ratchaburi Electricity Generating Holding PCL NVDR | 2,754,800 | 4,066,044 | ||||||
|
| |||||||
14,917,616 | ||||||||
ELECTRONICS — 0.87% | ||||||||
Delta Electronics (Thailand) PCL NVDR | 3,403,444 | 2,682,785 | ||||||
Hana Microelectronics PCL NVDR | 3,855,900 | 2,497,998 | ||||||
|
| |||||||
5,180,783 | ||||||||
ENGINEERING & CONSTRUCTION — 0.65% |
| |||||||
CH. Karnchang PCL NVDR | 2,866,200 | 649,434 | ||||||
Italian-Thai Development PCL NVDRa | 8,685,300 | 936,854 | ||||||
Sino-Thai Engineering & Construction PCL NVDR | 4,169,700 | 2,262,164 | ||||||
|
| |||||||
3,848,452 | ||||||||
ENTERTAINMENT — 0.29% | ||||||||
Major Cineplex Group PCL NVDR | 3,177,200 | 1,743,987 | ||||||
|
| |||||||
1,743,987 | ||||||||
FOOD — 4.15% | ||||||||
Charoen Pokphand Foods PCL NVDR | 20,037,400 | 20,302,775 | ||||||
GFPT PCL NVDR | 3,266,300 | 760,938 | ||||||
Khon Kaen Sugar Industry PCL NVDR | 3,578,100 | 1,404,520 | ||||||
Thai Vegetable Oil PCL NVDR | 2,751,053 | 2,282,667 | ||||||
|
| |||||||
24,750,900 | ||||||||
HEALTH CARE — SERVICES — 1.25% | ||||||||
Bangkok Chain Hospital PCL NVDR | 4,715,100 | 1,384,360 | ||||||
Bumrungrad Hospital PCL NVDR | 2,433,776 | 6,058,227 | ||||||
|
| |||||||
7,442,587 |
SCHEDULESOF INVESTMENTS | 57 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI THAILAND INVESTABLE MARKET INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
HOLDING COMPANIES — DIVERSIFIED — 4.58% |
| |||||||
Siam Cement PCL Foreign | 1,919,400 | $ | 22,480,287 | |||||
Siam Cement PCL NVDR | 456,200 | 4,833,522 | ||||||
|
| |||||||
27,313,809 | ||||||||
HOME BUILDERS — 0.48% | ||||||||
Asian Property Development PCL NVDR | 5,846,060 | 1,501,860 | ||||||
Quality Houses PCL NVDR | 23,415,641 | 1,337,610 | ||||||
|
| |||||||
2,839,470 | ||||||||
INSURANCE — 0.53% |
| |||||||
Bangkok Life Assurance PCL NVDR | 2,225,500 | 3,160,515 | ||||||
|
| |||||||
3,160,515 | ||||||||
IRON & STEEL — 0.33% | ||||||||
G J Steel PCL NVDRa | 115,238,600 | 514,869 | ||||||
G Steel PCL NVDRa | 52,018,200 | 630,825 | ||||||
Sahaviriya Steel Industries PCL NVDRa | 47,293,640 | 830,110 | ||||||
|
| |||||||
1,975,804 | ||||||||
LODGING — 0.34% | ||||||||
Central Plaza Hotel PCL NVDR | 3,926,200 | 2,054,881 | ||||||
|
| |||||||
2,054,881 | ||||||||
MEDIA — 1.98% | ||||||||
BEC World PCL NVDR | 6,572,200 | 10,906,475 | ||||||
MCOT PCL NVDR | 956,400 | 877,501 | ||||||
|
| |||||||
11,783,976 | ||||||||
METAL FABRICATE & HARDWARE — 0.16% |
| |||||||
STP & I PCL NVDR | 821,100 | 969,545 | ||||||
|
| |||||||
969,545 | ||||||||
OIL & GAS — 17.90% | ||||||||
Bangchak Petroleum PCL NVDR | 2,543,500 | 1,858,821 | ||||||
Esso (Thailand) PCL NVDR | 7,135,200 | 2,390,924 | ||||||
PTT Exploration & Production PCL NVDR | 7,289,700 | 34,663,006 | ||||||
PTT PCL NVDR | 5,363,900 | 56,489,134 | ||||||
Thai Oil PCL NVDR | 5,395,900 | 11,279,127 | ||||||
|
| |||||||
106,681,012 | ||||||||
PACKAGING & CONTAINERS — 0.20% |
| |||||||
Polyplex PCL NVDR | 2,714,350 | 1,195,405 | ||||||
|
| |||||||
1,195,405 | ||||||||
REAL ESTATE — 2.91% | ||||||||
Amata Corp. PCL NVDR | 3,565,900 | 1,957,347 |
Security | Shares | Value | ||||||
Asset Corp. PCL NVDR | 1,850,000 | $ | 903,303 | |||||
Bangkok Land PCL NVDR | 47,725,600 | 1,401,230 | ||||||
Hemaraj Land and Development PCL NVDR | 33,503,700 | 3,207,630 | ||||||
LPN Development PCL NVDR | 3,879,647 | 2,080,041 | ||||||
Pruksa Real Estate PCL NVDR | 4,308,080 | 2,337,238 | ||||||
Sansiri PCL NVDR | 18,358,428 | 1,359,233 | ||||||
Siam Future Development PCL NVDR | 3,731,700 | 905,088 | ||||||
Supalai PCL NVDR | 3,707,700 | 2,153,507 | ||||||
Ticon Industrial Connection PCL NVDR | 2,506,483 | 1,039,869 | ||||||
|
| |||||||
17,344,486 | ||||||||
RETAIL — 6.31% | ||||||||
CP All PCL NVDR | 25,536,000 | 28,115,270 | ||||||
Minor International PCL NVDR | 6,574,590 | 3,084,298 | ||||||
Robinson Department Store PCL NVDR | 2,343,700 | 4,618,589 | ||||||
Siam Global House PCL NVDR | 3,834,040 | 1,786,404 | ||||||
|
| |||||||
37,604,561 | ||||||||
TELECOMMUNICATIONS — 8.19% | ||||||||
Advanced Information Service PCL NVDR | 5,588,200 | 38,699,199 | ||||||
Jasmine International PCL NVDR | 23,812,300 | 2,750,934 | ||||||
Samart Corp. PCL NVDR | 2,511,900 | 745,514 | ||||||
Thaicom PCL NVDRa | 3,203,300 | 1,911,655 | ||||||
True Corp. PCL NVDRa | 33,956,300 | 4,681,386 | ||||||
|
| |||||||
48,788,688 | ||||||||
TRANSPORTATION — 0.95% | ||||||||
Precious Shipping PCL NVDR | 1,975,700 | 838,577 | ||||||
Tanayong PCL NVDR | 20,426,249 | 3,650,454 | ||||||
Thoresen Thai Agencies PCL NVDR | 2,356,230 | 1,165,520 | ||||||
|
| |||||||
5,654,551 | ||||||||
WATER — 0.44% | ||||||||
Thai Tap Water Supply PCL NVDR | 10,994,166 | 2,631,442 | ||||||
|
| |||||||
2,631,442 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $573,393,782) |
| 590,305,913 | ||||||
RIGHTS — 0.10% | ||||||||
BANKS — 0.10% | ||||||||
Krung Thai Bank PCL NVDRa | 4,782,400 | 610,487 | ||||||
|
| |||||||
610,487 |
58 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI THAILAND INVESTABLE MARKET INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
IRON & STEEL — 0.00% | ||||||||
G Steel PCL NVDRa | 3,426,840 | $ | 11 | |||||
G Steel PCL NVDRa Warrants | 23,020,366 | 73 | ||||||
|
| |||||||
84 | ||||||||
REAL ESTATE — 0.00% | ||||||||
Ticon Industrial Connection PCL NVDRa | 309,610 | 29,642 | ||||||
|
| |||||||
29,642 | ||||||||
|
| |||||||
TOTAL RIGHTS |
| |||||||
(Cost: $0) |
| 640,213 | ||||||
WARRANTS — 0.01% |
| |||||||
REAL ESTATE — 0.01% |
| |||||||
Bangkok Land PCL NVDR | 6,189,157 | 41,478 | ||||||
|
| |||||||
41,478 | ||||||||
|
| |||||||
TOTAL WARRANTS |
| |||||||
(Cost: $0) |
| 41,478 | ||||||
SHORT-TERM INVESTMENTS — 0.51% |
| |||||||
MONEY MARKET FUNDS — 0.51% |
| |||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%b,c | 3,026,377 | 3,026,377 | ||||||
|
| |||||||
3,026,377 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $3,026,377) |
| 3,026,377 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $576,420,159) | 594,013,981 | |||||||
Other Assets, Less Liabilities — 0.33% |
| 1,953,519 | ||||||
|
| |||||||
NET ASSETS — 100.00% | $ | 595,967,500 | ||||||
|
|
NVDR | — Non-Voting 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 | 59 |
Table of Contents
Statements of Assets and Liabilities
iSHARES®, INC.
August 31, 2012
iShares MSCI Australia Index Fund | iShares MSCI Hong Kong Index Fund | iShares MSCI Japan Small Cap Index Fund | ||||||||||
ASSETS | ||||||||||||
Investments, at cost: | ||||||||||||
Unaffiliated | $ | 2,533,518,026 | $ | 1,937,290,898 | $ | 48,165,176 | ||||||
Affiliated (Note 2) | 12,648,879 | 158,396,172 | 899,408 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments | $ | 2,546,166,905 | $ | 2,095,687,070 | $ | 49,064,584 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 2,465,105,268 | $ | 1,858,900,656 | $ | 42,634,224 | ||||||
Affiliated (Note 2) | 12,648,879 | 158,396,172 | 899,408 | |||||||||
|
|
|
|
|
| |||||||
Total fair value of investments | 2,477,754,147 | 2,017,296,828 | 43,533,632 | |||||||||
Foreign currencies, at valueb | 5,036,955 | 2,486,198 | 109,757 | |||||||||
Cash held at broker, at valuec | 1,033,248 | 193,249 | — | |||||||||
Receivables: | ||||||||||||
Investment securities sold | 4,766,604 | 3,461,705 | — | |||||||||
Dividends and interest | 23,777,783 | 3,962,650 | 87,541 | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 2,512,368,737 | 2,027,400,630 | 43,730,930 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 4,908,212 | 3,442,861 | — | |||||||||
Collateral for securities on loan (Note 5) | 12,559,455 | 157,141,868 | 894,577 | |||||||||
Futures variation margin | 50,019 | 23,375 | — | |||||||||
Securities related to in-kind transactions (Note 4) | 52,749 | — | — | |||||||||
Investment advisory fees (Note 2) | 1,099,546 | 818,369 | 19,288 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 18,669,981 | 161,426,473 | 913,865 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 2,493,698,756 | $ | 1,865,974,157 | $ | 42,817,065 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 2,763,686,770 | $ | 2,326,480,918 | $ | 50,180,320 | ||||||
Undistributed net investment income | 15,190,680 | 4,985,539 | 41,015 | |||||||||
Accumulated net realized loss | (216,493,091 | ) | (387,078,954 | ) | (1,874,388 | ) | ||||||
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies | (68,685,603 | ) | (78,413,346 | ) | (5,529,882 | ) | ||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 2,493,698,756 | $ | 1,865,974,157 | $ | 42,817,065 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingd | 106,600,000 | 110,175,000 | 1,000,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 23.39 | $ | 16.94 | $ | 42.82 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $11,595,572, $149,152,566 and $852,710, respectively. See Note 5. |
b | Cost of foreign currencies: $5,126,714, $2,486,153 and $109,602, respectively. |
c | Cost of cash held at broker: $961,292, $193,237 and $ —, respectively. |
d | $0.001 par value, number of shares authorized: 627.8 million, 250 million and 500 million, respectively. |
See notes to financial statements.
60 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Assets and Liabilities (Continued)
iSHARES®, INC.
August 31, 2012
iShares MSCI | iShares MSCI Pacific ex-Japan Index Fund | iShares MSCI | ||||||||||
ASSETS | ||||||||||||
Investments, at cost: | ||||||||||||
Unaffiliated | $ | 497,803,699 | $ | 2,764,962,689 | $ | 1,391,265,764 | ||||||
Affiliated (Note 2) | 131,852 | 93,110,554 | 93,739,331 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments | $ | 497,935,551 | $ | 2,858,073,243 | $ | 1,485,005,095 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 934,610,659 | $ | 3,161,175,680 | $ | 1,503,087,557 | ||||||
Affiliated (Note 2) | 131,852 | 93,110,554 | 93,739,331 | |||||||||
|
|
|
|
|
| |||||||
Total fair value of investments | 934,742,511 | 3,254,286,234 | 1,596,826,888 | |||||||||
Foreign currencies, at valueb | 1,216,837 | 10,539,009 | 3,802,304 | |||||||||
Cash held at broker, at valuec | — | — | 597,376 | |||||||||
Receivables: | ||||||||||||
Investment securities sold | 5,866,768 | 1,931,637 | — | |||||||||
Dividends and interest | 1,201,642 | 23,068,734 | 7,042,431 | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 943,027,758 | 3,289,825,614 | 1,608,268,999 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 5,917,872 | 7,083,043 | 2,225,568 | |||||||||
Collateral for securities on loan (Note 5) | — | 92,808,752 | 92,307,193 | |||||||||
Capital shares redeemed | — | — | 328,497 | |||||||||
Futures variation margin | — | — | 43,899 | |||||||||
Investment advisory fees (Note 2) | 417,629 | 1,351,950 | 677,335 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 6,335,501 | 101,243,745 | 95,582,492 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 936,692,257 | $ | 3,188,581,869 | $ | 1,512,686,507 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 581,509,537 | $ | 3,260,367,349 | $ | 1,632,475,855 | ||||||
Undistributed net investment income | — | 8,784,423 | 4,917,504 | |||||||||
Accumulated net realized loss | (81,611,245 | ) | (476,615,611 | ) | (236,511,623 | ) | ||||||
Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies | 436,793,965 | 396,045,708 | 111,804,771 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 936,692,257 | $ | 3,188,581,869 | $ | 1,512,686,507 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingd | 64,500,000 | 73,800,000 | 115,500,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 14.52 | $ | 43.21 | $ | 13.10 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $ —, $87,611,909 and $87,245,393, respectively. See Note 5. |
b | Cost of foreign currencies: $1,227,871, $10,540,612 and $3,801,146, respectively. |
c | Cost of cash held at broker: $ —, $ — and $588,820, respectively. |
d | $0.001 par value, number of shares authorized: 300 million, 1 billion and 300 million, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 61 |
Table of Contents
Statements of Assets and Liabilities (Continued)
iSHARES®, INC.
August 31, 2012
iShares MSCI South Korea Index Fund | iShares MSCI Taiwan Index Fund | iShares MSCI Thailand Investable Market Index Fund | ||||||||||
ASSETS | ||||||||||||
Investments, at cost: | ||||||||||||
Unaffiliated | $ | 1,228,085,712 | $ | 1,503,763,165 | $ | 573,393,782 | ||||||
Affiliated (Note 2) | 167,219,822 | 217,891,495 | 3,026,377 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments | $ | 1,395,305,534 | $ | 1,721,654,660 | $ | 576,420,159 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 2,666,028,077 | $ | 2,222,571,435 | $ | 590,987,604 | ||||||
Affiliated (Note 2) | 167,219,822 | 217,891,495 | 3,026,377 | |||||||||
|
|
|
|
|
| |||||||
Total fair value of investments | 2,833,247,899 | 2,440,462,930 | 594,013,981 | |||||||||
Foreign currencies, at valueb | — | 578,160 | — | |||||||||
Cash | — | 5,849,593 | — | |||||||||
Cash held at broker, at value | — | 2,136,000 | — | |||||||||
Receivables: | ||||||||||||
Investment securities sold | 44,341,108 | 2,583,854 | 3,388,961 | |||||||||
Dividends and interest | 351,209 | 17,498,237 | 2,581,734 | |||||||||
Capital shares sold | 19,625,244 | — | — | |||||||||
Futures variation margin | — | 23,828 | — | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 2,897,565,460 | 2,469,132,602 | 599,984,676 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 64,390,348 | 8,433,816 | 3,701,613 | |||||||||
Collateral for securities on loan (Note 5) | 162,211,488 | 210,581,890 | — | |||||||||
Foreign taxes (Note 1) | 17,251 | 1,832,649 | — | |||||||||
Investment advisory fees (Note 2) | 1,395,158 | 1,156,257 | 315,563 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 228,014,245 | 222,004,612 | 4,017,176 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 2,669,551,215 | $ | 2,247,127,990 | $ | 595,967,500 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 2,110,828,534 | $ | 2,528,748,366 | $ | 593,028,011 | ||||||
Undistributed (distributions in excess of) net investment income | (8,724,136 | ) | 49,800,550 | 2,546,326 | ||||||||
Accumulated net realized loss | (870,481,180 | ) | (1,050,070,320 | ) | (17,203,163 | ) | ||||||
Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies | 1,437,927,997 | 718,649,394 | 17,596,326 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 2,669,551,215 | $ | 2,247,127,990 | $ | 595,967,500 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingc | 47,700,000 | 178,600,000 | 8,450,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 55.97 | $ | 12.58 | $ | 70.53 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $154,344,908, $199,702,589 and $ —, respectively. See Note 5. |
b | Cost of foreign currencies: $ —, $578,742 and $ —, respectively. |
c | $0.001 par value, number of shares authorized: 200 million, 900 million and 200 million, respectively. |
See notes to financial statements.
62 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Operations
iSHARES®, INC.
Year ended August 31, 2012
iShares MSCI | iShares MSCI Hong Kong Index Fund | iShares MSCI Japan Small Cap Index Fund | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliateda | $ | 135,071,680 | $ | 65,294,787 | $ | 1,293,278 | ||||||
Interest — affiliated (Note 2) | 1,038 | 994 | 10 | |||||||||
Securities lending income — affiliated (Note 2) | 72,055 | 951,866 | 22,396 | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 135,144,773 | 66,247,647 | 1,315,684 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 13,830,149 | 9,202,379 | 291,630 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 13,830,149 | 9,202,379 | 291,630 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 121,314,624 | 57,045,268 | 1,024,054 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | (78,881,140 | ) | (168,647,637 | ) | (492,031 | ) | ||||||
In-kind redemptions — unaffiliated | 82,368,603 | 72,430,126 | 3,133,155 | |||||||||
Futures contracts | (202 | ) | (142 | ) | — | |||||||
Foreign currency transactions | (3,633,614 | ) | 45,573 | 12,976 | ||||||||
|
|
|
|
|
| |||||||
Net realized gain (loss) | (146,353 | ) | (96,172,080 | ) | 2,654,100 | |||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments | (123,840,642 | ) | 77,318,889 | (8,076,630 | ) | |||||||
Futures contracts | (50,019 | ) | (23,375 | ) | — | |||||||
Translation of assets and liabilities in foreign currencies | (787,901 | ) | (3,561 | ) | (1,898 | ) | ||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | (124,678,562 | ) | 77,291,953 | (8,078,528 | ) | |||||||
|
|
|
|
|
| |||||||
Net realized and unrealized loss | (124,824,915 | ) | (18,880,127 | ) | (5,424,428 | ) | ||||||
|
|
|
|
|
| |||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | (3,510,291 | ) | $ | 38,165,141 | $ | (4,400,374 | ) | ||||
|
|
|
|
|
|
a | Net of foreign withholding tax of $659,171, $ — and $96,084, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 63 |
Table of Contents
Statements of Operations (Continued)
iSHARES®, INC.
Year ended August 31, 2012
Malaysia | Pacific ex-Japan Index Fund | iShares MSCI Singapore Index Fund | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliateda | $ | 29,248,661 | $ | 150,035,023 | $ | 55,587,272 | ||||||
Interest — affiliated (Note 2) | 378 | 1,459 | 631 | |||||||||
Securities lending income — affiliated (Note 2) | — | 704,110 | 722,355 | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 29,249,039 | 150,740,592 | 56,310,258 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 4,728,077 | 16,176,388 | 7,690,242 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 4,728,077 | 16,176,388 | 7,690,242 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 24,520,962 | 134,564,204 | 48,620,016 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | (2,428,870 | ) | (82,848,651 | ) | (22,302,172 | ) | ||||||
In-kind redemptions - unaffiliated | — | 105,380,021 | 28,660,711 | |||||||||
Futures contracts | — | — | 297,219 | |||||||||
Foreign currency transactions | (694,528 | ) | (3,033,064 | ) | (1,039,852 | ) | ||||||
|
|
|
|
|
| |||||||
Net realized gain (loss) | (3,123,398 | ) | 19,498,306 | 5,615,906 | ||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments | 42,690,801 | (127,312,719 | ) | (25,655,363 | ) | |||||||
Futures contracts | — | — | (43,899 | ) | ||||||||
Translation of assets and liabilities in foreign currencies | (2,560 | ) | (637,305 | ) | (100,164 | ) | ||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | 42,688,241 | (127,950,024 | ) | (25,799,426 | ) | |||||||
|
|
|
|
|
| |||||||
Net realized and unrealized gain (loss) | 39,564,843 | (108,451,718 | ) | (20,183,520 | ) | |||||||
|
|
|
|
|
| |||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 64,085,805 | $ | 26,112,486 | $ | 28,436,496 | ||||||
|
|
|
|
|
|
a | Net of foreign withholding tax of $2,050,846, $838,289 and $234,795, respectively. |
See notes to financial statements.
64 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Operations (Continued)
iSHARES®, INC.
Year ended August 31, 2012
iShares MSCI South Korea | iShares MSCI Taiwan Index Fund | iShares MSCI Thailand Investable Market Index Fund | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliateda | $ | 29,627,113 | $ | 62,757,119 | $ | 19,248,406 | ||||||
Interest — unaffiliated | 368 | 151 | — | |||||||||
Interest — affiliated (Note 2) | 2,784 | 2,527 | 727 | |||||||||
Securities lending income — affiliated (Note 2) | 2,919,840 | 6,887,058 | b | — | ||||||||
|
|
|
|
|
| |||||||
32,550,105 | 69,646,855 | 19,249,133 | ||||||||||
Less: Other foreign taxes (Note 1) | (17,299 | ) | (2,792,719 | ) | (90,237 | ) | ||||||
|
|
|
|
|
| |||||||
Total investment income | 32,532,806 | 66,854,136 | 19,158,896 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 19,188,641 | 14,284,338 | 3,584,474 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 19,188,641 | 14,284,338 | 3,584,474 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 13,344,165 | 52,569,798 | 15,574,422 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | 294,427,131 | 8,911,597 | (12,792,391 | ) | ||||||||
In-kind redemptions — unaffiliated | — | — | 72,001,230 | |||||||||
Futures contracts | — | 1,589,034 | — | |||||||||
Foreign currency transactions | (947,417 | ) | (692,597 | ) | (373,072 | ) | ||||||
|
|
|
|
|
| |||||||
Net realized gain | 293,479,714 | 9,808,034 | 58,835,767 | |||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments | (395,819,148 | ) | (244,891,193 | ) | (54,341,003 | ) | ||||||
Futures contracts | — | (165,994 | ) | — | ||||||||
Translation of assets and liabilities in foreign currencies | (14,602 | ) | 56,839 | 11,751 | ||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | (395,833,750 | ) | (245,000,348 | ) | (54,329,252 | ) | ||||||
|
|
|
|
|
| |||||||
Net realized and unrealized gain (loss) | (102,354,036 | ) | (235,192,314 | ) | 4,506,515 | |||||||
|
|
|
|
|
| |||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | (89,009,871 | ) | $ | (182,622,516 | ) | $ | 20,080,937 | ||||
|
|
|
|
|
|
a | Net of foreign withholding tax of $5,756,996, $13,501,070 and $2,138,712, respectively. |
b | Net of foreign tax paid of $1,583,232. |
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, 2012 | Year ended August 31, 2011 | Year ended August 31, 2012 | Year ended August 31, 2011 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 121,314,624 | $ | 118,543,422 | $ | 57,045,268 | $ | 45,630,453 | ||||||||
Net realized gain (loss) | (146,353 | ) | 106,704,629 | (96,172,080 | ) | 84,133,431 | ||||||||||
Net change in unrealized appreciation/depreciation | (124,678,562 | ) | 256,987,740 | 77,291,953 | 91,543,565 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | (3,510,291 | ) | 482,235,791 | 38,165,141 | 221,307,449 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (127,985,295 | ) | (126,555,555 | ) | (55,827,349 | ) | (46,031,342 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (127,985,295 | ) | (126,555,555 | ) | (55,827,349 | ) | (46,031,342 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 379,920,871 | 1,069,986,680 | 1,187,272,846 | 712,651,212 | ||||||||||||
Cost of shares redeemed | (845,151,157 | ) | (532,059,432 | ) | (911,618,933 | ) | (1,256,261,691 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | (465,230,286 | ) | 537,927,248 | 275,653,913 | (543,610,479 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | (596,725,872 | ) | 893,607,484 | 257,991,705 | (368,334,372 | ) | ||||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 3,090,424,628 | 2,196,817,144 | 1,607,982,452 | 1,976,316,824 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year | $ | 2,493,698,756 | $ | 3,090,424,628 | $ | 1,865,974,157 | $ | 1,607,982,452 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed net investment income included in net assets at end of year | $ | 15,190,680 | $ | 18,032,011 | $ | 4,985,539 | $ | 3,722,047 | ||||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 16,400,000 | 43,800,000 | 73,350,000 | 37,275,000 | ||||||||||||
Shares redeemed | (37,600,000 | ) | (21,000,000 | ) | (54,600,000 | ) | (69,225,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | (21,200,000 | ) | 22,800,000 | 18,750,000 | (31,950,000 | ) | ||||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
66 | 2012 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, 2012 | Year ended August 31, 2011 | Year ended August 31, 2012 | Year ended August 31, 2011 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 1,024,054 | $ | 901,280 | $ | 24,520,962 | $ | 28,277,199 | ||||||||
Net realized gain (loss) | 2,654,100 | 1,510,649 | (3,123,398 | ) | 8,082,452 | |||||||||||
Net change in unrealized appreciation/depreciation | (8,078,528 | ) | 5,914,053 | 42,688,241 | 41,299,342 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | (4,400,374 | ) | 8,325,982 | 64,085,805 | 77,658,993 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (1,368,220 | ) | (1,015,659 | ) | (32,637,576 | ) | (26,214,422 | ) | ||||||||
Return of capital | — | — | (1,278,099 | ) | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (1,368,220 | ) | (1,015,659 | ) | (33,915,675 | ) | (26,214,422 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 4,249,057 | 39,895,589 | 102,342,503 | 475,718,489 | ||||||||||||
Cost of shares redeemed | (30,050,195 | ) | (9,483,428 | ) | (174,222,658 | ) | (342,902,968 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | (25,801,138 | ) | 30,412,161 | (71,880,155 | ) | 132,815,521 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | (31,569,732 | ) | 37,722,484 | (41,710,025 | ) | 184,260,092 | ||||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 74,386,797 | 36,664,313 | 978,402,282 | 794,142,190 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year | $ | 42,817,065 | $ | 74,386,797 | $ | 936,692,257 | $ | 978,402,282 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of year | $ | 41,015 | $ | (75,439 | ) | $ | — | $ | 4,891,859 | |||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 100,000 | 900,000 | 7,275,000 | 32,925,000 | ||||||||||||
Shares redeemed | (700,000 | ) | (200,000 | ) | (13,050,000 | ) | (23,850,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | (600,000 | ) | 700,000 | (5,775,000 | ) | 9,075,000 | ||||||||||
|
|
|
|
|
|
|
|
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, 2012 | Year ended August 31, 2011 | Year ended August 31, 2012 | Year ended August 31, 2011 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 134,564,204 | $ | 142,331,398 | $ | 48,620,016 | $ | 66,235,936 | ||||||||
Net realized gain | 19,498,306 | 289,132,578 | 5,615,906 | 117,167,420 | ||||||||||||
Net change in unrealized appreciation/depreciation | (127,950,024 | ) | 183,180,135 | (25,799,426 | ) | 18,189,273 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 26,112,486 | 614,644,111 | 28,436,496 | 201,592,629 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (141,521,654 | ) | (153,265,871 | ) | (55,248,494 | ) | (74,873,803 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (141,521,654 | ) | (153,265,871 | ) | (55,248,494 | ) | (74,873,803 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 77,411,532 | 433,392,558 | 109,538,489 | 315,210,889 | ||||||||||||
Cost of shares redeemed | (322,287,900 | ) | (784,052,063 | ) | (283,239,248 | ) | (458,731,234 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease in net assets from capital share transactions | (244,876,368 | ) | (350,659,505 | ) | (173,700,759 | ) | (143,520,345 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | (360,285,536 | ) | 110,718,735 | (200,512,757 | ) | (16,801,519 | ) | |||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 3,548,867,405 | 3,438,148,670 | 1,713,199,264 | 1,730,000,783 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year | $ | 3,188,581,869 | $ | 3,548,867,405 | $ | 1,512,686,507 | $ | 1,713,199,264 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed net investment income included in net assets at end of year | $ | 8,784,423 | $ | 12,091,695 | $ | 4,917,504 | $ | 8,735,601 | ||||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 1,800,000 | 9,300,000 | 8,600,000 | 23,500,000 | ||||||||||||
Shares redeemed | (7,800,000 | ) | (17,100,000 | ) | (24,400,000 | ) | (34,300,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease in shares outstanding | (6,000,000 | ) | (7,800,000 | ) | (15,800,000 | ) | (10,800,000 | ) | ||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
68 | 2012 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, 2012 | Year ended August 31, 2011 | Year ended August 31, 2012 | Year ended August 31, 2011 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 13,344,165 | $ | 21,371,322 | $ | 52,569,798 | $ | 86,901,644 | ||||||||
Net realized gain (loss) | 293,479,714 | (60,197,500 | ) | 9,808,034 | (8,104,404 | ) | ||||||||||
Net change in unrealized appreciation/depreciation | (395,833,750 | ) | 635,977,653 | (245,000,348 | ) | 293,449,652 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | (89,009,871 | ) | 597,151,475 | (182,622,516 | ) | 372,246,892 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (21,597,221 | ) | (31,827,218 | ) | (88,700,282 | ) | (61,236,384 | ) | ||||||||
Return of capital | — | (4,789,805 | ) | — | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (21,597,221 | ) | (36,617,023 | ) | (88,700,282 | ) | (61,236,384 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 128,924,534 | 805,031,141 | 381,912,612 | 504,845,705 | ||||||||||||
Cost of shares redeemed | (1,419,990,818 | ) | (549,508,621 | ) | (720,973,706 | ) | (679,782,864 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | (1,291,066,284 | ) | 255,522,520 | (339,061,094 | ) | (174,937,159 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | (1,401,673,376 | ) | 816,056,972 | (610,383,892 | ) | 136,073,349 | ||||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 4,071,224,591 | 3,255,167,619 | 2,857,511,882 | 2,721,438,533 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year | $ | 2,669,551,215 | $ | 4,071,224,591 | $ | 2,247,127,990 | $ | 2,857,511,882 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of year | $ | (8,724,136 | ) | $ | (13,854,595 | ) | $ | 49,800,550 | $ | 84,856,114 | ||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 2,350,000 | 13,050,000 | 30,600,000 | 33,200,000 | ||||||||||||
Shares redeemed | (26,400,000 | ) | (9,450,000 | ) | (59,400,000 | ) | (49,000,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | (24,050,000 | ) | 3,600,000 | (28,800,000 | ) | (15,800,000 | ) | |||||||||
|
|
|
|
|
|
|
|
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, 2012 | Year ended August 31, 2011 | |||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||
OPERATIONS: | ||||||||
Net investment income | $ | 15,574,422 | $ | 16,617,847 | ||||
Net realized gain | 58,835,767 | 84,255,527 | ||||||
Net change in unrealized appreciation/depreciation | (54,329,252 | ) | 9,058,953 | |||||
|
|
|
| |||||
Net increase in net assets resulting from operations | 20,080,937 | 109,932,327 | ||||||
|
|
|
| |||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||
From net investment income | (15,932,327 | ) | (15,281,425 | ) | ||||
|
|
|
| |||||
Total distributions to shareholders | (15,932,327 | ) | (15,281,425 | ) | ||||
|
|
|
| |||||
CAPITAL SHARE TRANSACTIONS: | ||||||||
Proceeds from shares sold | 364,124,479 | 335,427,814 | ||||||
Cost of shares redeemed | (405,145,323 | ) | (317,542,787 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in net assets from capital share transactions | (41,020,844 | ) | 17,885,027 | |||||
|
|
|
| |||||
INCREASE (DECREASE) IN NET ASSETS | (36,872,234 | ) | 112,535,929 | |||||
NET ASSETS | ||||||||
Beginning of year | 632,839,734 | 520,303,805 | ||||||
|
|
|
| |||||
End of year | $ | 595,967,500 | $ | 632,839,734 | ||||
|
|
|
| |||||
Undistributed net investment income included in net assets at end of year | $ | 2,546,326 | $ | 3,277,303 | ||||
|
|
|
| |||||
SHARES ISSUED AND REDEEMED | ||||||||
Shares sold | 5,250,000 | 5,150,000 | ||||||
Shares redeemed | (6,350,000 | ) | (5,050,000 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (1,100,000 | ) | 100,000 | |||||
|
|
|
|
See notes to financial statements.
70 | 2012 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, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | ||||||||||||||||
Net asset value, beginning of year | $ | 24.18 | $ | 20.92 | $ | 20.33 | $ | 23.96 | $ | 27.62 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 1.04 | 0.99 | 0.72 | 0.78 | 0.96 | |||||||||||||||
Net realized and unrealized gain (loss)b | (0.72 | ) | 3.33 | 0.69 | (3.47 | ) | (3.34 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 0.32 | 4.32 | 1.41 | (2.69 | ) | (2.38 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (1.11 | ) | (1.06 | ) | (0.82 | ) | (0.94 | ) | (1.28 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (1.11 | ) | (1.06 | ) | (0.82 | ) | (0.94 | ) | (1.28 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 23.39 | $ | 24.18 | $ | 20.92 | $ | 20.33 | $ | 23.96 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 1.84 | % | 20.54 | % | 6.86 | % | (8.91 | )% | (9.25 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 2,493,699 | $ | 3,090,425 | $ | 2,196,817 | $ | 1,593,676 | $ | 1,059,092 | ||||||||||
Ratio of expenses to average net assets | 0.53 | % | 0.52 | % | 0.53 | % | 0.55 | % | 0.52 | % | ||||||||||
Ratio of net investment income to average net assets | 4.61 | % | 3.95 | % | 3.24 | % | 4.92 | % | 3.38 | % | ||||||||||
Portfolio turnover ratec | 9 | % | 9 | % | 8 | % | 14 | % | 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 | 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, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | ||||||||||||||||
Net asset value, beginning of year | $ | 17.59 | $ | 16.02 | $ | 14.39 | $ | 15.87 | $ | 18.30 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.54 | 0.42 | 0.42 | 0.52 | 0.45 | |||||||||||||||
Net realized and unrealized gain (loss)b | (0.65 | ) | 1.56 | 1.69 | (1.46 | ) | (2.25 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (0.11 | ) | 1.98 | 2.11 | (0.94 | ) | (1.80 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.54 | ) | (0.41 | ) | (0.48 | ) | (0.54 | ) | (0.63 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.54 | ) | (0.41 | ) | (0.48 | ) | (0.54 | ) | (0.63 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 16.94 | $ | 17.59 | $ | 16.02 | $ | 14.39 | $ | 15.87 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | (0.33 | )% | 12.27 | % | 14.85 | % | (4.77 | )% | (10.54 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 1,865,974 | $ | 1,607,982 | $ | 1,976,317 | $ | 1,951,777 | $ | 1,675,184 | ||||||||||
Ratio of expenses to average net assets | 0.53 | % | 0.52 | % | 0.53 | % | 0.55 | % | 0.52 | % | ||||||||||
Ratio of net investment income to average net assets | 3.26 | % | 2.25 | % | 2.67 | % | 4.29 | % | 2.34 | % | ||||||||||
Portfolio turnover ratec | 11 | % | 15 | % | 5 | % | 9 | % | 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.
72 | 2012 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, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Period from to | ||||||||||||||||
Net asset value, beginning of period | $ | 46.49 | $ | 40.74 | $ | 44.45 | $ | 43.24 | $ | 48.85 | ||||||||||
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| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomeb | 0.82 | 0.78 | 0.61 | 0.60 | 0.29 | |||||||||||||||
Net realized and unrealized gain (loss)c | (3.25 | ) | 5.87 | (3.39 | ) | 1.29 | (5.74 | ) | ||||||||||||
|
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|
|
|
|
|
|
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| |||||||||||
Total from investment operations | (2.43 | ) | 6.65 | (2.78 | ) | 1.89 | (5.45 | ) | ||||||||||||
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|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (1.24 | ) | (0.90 | ) | (0.93 | ) | (0.68 | ) | (0.16 | ) | ||||||||||
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|
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|
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| |||||||||||
Total distributions | (1.24 | ) | (0.90 | ) | (0.93 | ) | (0.68 | ) | (0.16 | ) | ||||||||||
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| |||||||||||
Net asset value, end of period | $ | 42.82 | $ | 46.49 | $ | 40.74 | $ | 44.45 | $ | 43.24 | ||||||||||
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| |||||||||||
Total return | (5.18 | )% | 16.38 | % | (6.25 | )% | 4.62 | % | (11.19 | )%d | ||||||||||
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| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of period (000s) | $ | 42,817 | $ | 74,387 | $ | 36,664 | $ | 35,556 | $ | 34,594 | ||||||||||
Ratio of expenses to average net assetse | 0.53 | % | 0.51 | % | 0.53 | % | 0.56 | % | 0.53 | % | ||||||||||
Ratio of net investment income to average net assetse | 1.84 | % | 1.72 | % | 1.46 | % | 1.59 | % | 0.93 | % | ||||||||||
Portfolio turnover ratef | 7 | % | 10 | % | 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, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | ||||||||||||||||
Net asset value, beginning of year | $ | 13.92 | $ | 12.98 | $ | 9.79 | $ | 9.39 | $ | 10.97 | ||||||||||
|
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| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.38 | 0.41 | 0.24 | 0.28 | 0.34 | |||||||||||||||
Net realized and unrealized gain (loss)b | 0.76 | 0.92 | 3.20 | 0.40 | (1.31 | ) | ||||||||||||||
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| |||||||||||
Total from investment operations | 1.14 | 1.33 | 3.44 | 0.68 | (0.97 | ) | ||||||||||||||
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|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.52 | ) | (0.39 | ) | (0.25 | ) | (0.28 | ) | (0.61 | ) | ||||||||||
Return of capital | (0.02 | ) | — | — | — | — | ||||||||||||||
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|
|
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| |||||||||||
Total distributions | (0.54 | ) | (0.39 | ) | (0.25 | ) | (0.28 | ) | (0.61 | ) | ||||||||||
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| |||||||||||
Net asset value, end of year | $ | 14.52 | $ | 13.92 | $ | 12.98 | $ | 9.79 | $ | 9.39 | ||||||||||
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| |||||||||||
Total return | 8.61 | % | 10.19 | % | 35.76 | % | 8.00 | % | (9.86 | )% | ||||||||||
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|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 936,692 | $ | 978,402 | $ | 794,142 | $ | 513,000 | $ | 473,091 | ||||||||||
Ratio of expenses to average net assets | 0.53 | % | 0.52 | % | 0.53 | % | 0.56 | % | 0.52 | % | ||||||||||
Ratio of net investment income to average net assets | 2.73 | % | 2.84 | % | 2.17 | % | 3.45 | % | 2.84 | % | ||||||||||
Portfolio turnover ratec | 24 | % | 49 | % | 29 | % | 52 | % | 92 | % |
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, 2012, August 31, 2011, August 31, 2010, August 31, 2009 and August 31, 2008 would have been 14%,14%, 10%, 12% and 16%, respectively. See Note 4. |
See notes to financial statements.
74 | 2012 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, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008a | ||||||||||||||||
Net asset value, beginning of year | $ | 44.47 | $ | 39.25 | $ | 36.85 | $ | 41.37 | $ | 48.31 | ||||||||||
|
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|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomeb | 1.73 | 1.64 | 1.25 | 1.38 | 1.64 | |||||||||||||||
Net realized and unrealized gain (loss)c | (1.14 | ) | 5.31 | 2.52 | (4.79 | ) | (6.01 | ) | ||||||||||||
|
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|
|
|
|
|
|
| |||||||||||
Total from investment operations | 0.59 | 6.95 | 3.77 | (3.41 | ) | (4.37 | ) | |||||||||||||
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|
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|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (1.85 | ) | (1.73 | ) | (1.37 | ) | (1.11 | ) | (2.51 | ) | ||||||||||
Net realized gain | — | — | — | — | (0.06 | ) | ||||||||||||||
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|
|
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|
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| |||||||||||
Total distributions | (1.85 | ) | (1.73 | ) | (1.37 | ) | (1.11 | ) | (2.57 | ) | ||||||||||
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|
|
|
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|
|
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| |||||||||||
Net asset value, end of year | $ | 43.21 | $ | 44.47 | $ | 39.25 | $ | 36.85 | $ | 41.37 | ||||||||||
|
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|
|
|
|
|
|
|
| |||||||||||
Total return | 1.82 | % | 17.61 | % | 10.27 | % | (7.23 | )% | (9.87 | )% | ||||||||||
|
|
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|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 3,188,582 | $ | 3,548,867 | $ | 3,438,149 | $ | 3,382,554 | $ | 3,263,971 | ||||||||||
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 | 4.16 | % | 3.53 | % | 3.09 | % | 4.83 | % | 3.35 | % | ||||||||||
Portfolio turnover rated | 7 | % | 10 | % | 7 | % | 10 | % | 14 | % |
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, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | ||||||||||||||||
Net asset value, beginning of year | $ | 13.05 | $ | 12.17 | $ | 10.25 | $ | 11.44 | $ | 13.28 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.41 | 0.45 | 0.32 | 0.32 | 0.47 | |||||||||||||||
Net realized and unrealized gain (loss)b | 0.11 | 0.92 | 1.97 | (1.16 | ) | (1.67 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 0.52 | 1.37 | 2.29 | (0.84 | ) | (1.20 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.47 | ) | (0.49 | ) | (0.37 | ) | (0.35 | ) | (0.64 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.47 | ) | (0.49 | ) | (0.37 | ) | (0.35 | ) | (0.64 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 13.10 | $ | 13.05 | $ | 12.17 | $ | 10.25 | $ | 11.44 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 4.67 | % | 11.27 | % | 22.68 | % | (5.87 | )% | (9.55 | )% | ||||||||||
|
|
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|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 1,512,687 | $ | 1,713,199 | $ | 1,730,001 | $ | 1,294,039 | $ | 1,476,968 | ||||||||||
Ratio of expenses to average net assets | 0.53 | % | 0.52 | % | 0.53 | % | 0.55 | % | 0.52 | % | ||||||||||
Ratio of net investment income to average net assets | 3.32 | % | 3.34 | % | 2.80 | % | 3.97 | % | 3.56 | % | ||||||||||
Portfolio turnover ratec | 3 | % | 10 | % | 9 | % | 15 | % | 16 | % |
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 | 2012 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, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | ||||||||||||||||
Net asset value, beginning of year | $ | 56.74 | $ | 47.76 | $ | 42.01 | $ | 43.55 | $ | 63.60 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.23 | 0.29 | 0.32 | 0.30 | 0.80 | |||||||||||||||
Net realized and unrealized gain (loss)b | (0.63 | ) | 9.19 | 5.82 | (1.45 | ) | (19.87 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (0.40 | ) | 9.48 | 6.14 | (1.15 | ) | (19.07 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.37 | ) | (0.43 | ) | (0.39 | ) | (0.39 | ) | (0.98 | ) | ||||||||||
Return of capital | — | (0.07 | ) | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.37 | ) | (0.50 | ) | (0.39 | ) | (0.39 | ) | (0.98 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 55.97 | $ | 56.74 | $ | 47.76 | $ | 42.01 | $ | 43.55 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | (0.62 | )% | 19.76 | % | 14.65 | % | (2.31 | )% | (30.35 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 2,669,551 | $ | 4,071,225 | $ | 3,255,168 | $ | 2,398,550 | $ | 1,985,763 | ||||||||||
Ratio of expenses to average net assetsc | 0.61 | % | 0.59 | % | 0.61 | % | 0.65 | % | 0.63 | % | ||||||||||
Ratio of net investment income to average net assets | 0.42 | % | 0.49 | % | 0.67 | % | 0.91 | % | 1.35 | % | ||||||||||
Portfolio turnover rated | 12 | % | 18 | % | 14 | % | 62 | % | 42 | % |
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 | Ratios for the years ended August 31, 2010 and prior have been recalculated, as necessary, to conform with the current presentation of foreign taxes. |
d | 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, 2012, August 31, 2011, August 31, 2010, August 31, 2009 and August 31, 2008 would have been 8%, 6%, 6%, 8% and 15%, 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, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | ||||||||||||||||
Net asset value, beginning of year | $ | 13.78 | $ | 12.19 | $ | 10.94 | $ | 13.13 | $ | 15.99 | ||||||||||
|
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|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.28 | 0.39 | 0.23 | 0.30 | 0.54 | |||||||||||||||
Net realized and unrealized gain (loss)b | (1.01 | ) | 1.49 | 1.23 | (1.89 | ) | (3.01 | ) | ||||||||||||
|
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|
|
|
|
|
|
| |||||||||||
Total from investment operations | (0.73 | ) | 1.88 | 1.46 | (1.59 | ) | (2.47 | ) | ||||||||||||
|
|
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|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.47 | ) | (0.29 | ) | (0.21 | ) | (0.60 | ) | (0.39 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.47 | ) | (0.29 | ) | (0.21 | ) | (0.60 | ) | (0.39 | ) | ||||||||||
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|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 12.58 | $ | 13.78 | $ | 12.19 | $ | 10.94 | $ | 13.13 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | (4.80 | )% | 15.24 | % | 13.30 | % | (9.67 | )% | (15.69 | )% | ||||||||||
|
|
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|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 2,247,128 | $ | 2,857,512 | $ | 2,721,439 | $ | 3,035,331 | $ | 2,918,008 | ||||||||||
Ratio of expenses to average net assetsc | 0.61 | % | 0.59 | % | 0.61 | % | 0.65 | % | 0.63 | % | ||||||||||
Ratio of net investment income to average net assets | 2.25 | % | 2.64 | % | 1.90 | % | 3.18 | % | 3.54 | % | ||||||||||
Portfolio turnover rated | 22 | % | 23 | % | 9 | % | 52 | % | 33 | % |
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 | Ratios for the years ended August 31, 2010 and prior have been recalculated, as necessary, to conform with the current presentation of foreign taxes. |
d | 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 years ended August 31, 2012, August 31, 2011, August 31, 2010, August 31, 2009 and August 31, 2008 would have been 7%, 8%, 4%, 14% and 11%, respectively. See Note 4. |
See notes to financial statements.
78 | 2012 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, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Period from to Aug. 31, 2008 | ||||||||||||||||
Net asset value, beginning of period | $ | 66.27 | $ | 55.06 | $ | 36.87 | $ | 38.83 | $ | 50.03 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomeb | 1.76 | 1.65 | 1.44 | 1.17 | 0.32 | |||||||||||||||
Net realized and unrealized gain (loss)c | 4.37 | 11.10 | 17.95 | (1.88 | ) | (11.52 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 6.13 | 12.75 | 19.39 | (0.71 | ) | (11.20 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (1.87 | ) | (1.54 | ) | (1.20 | ) | (1.25 | ) | 0.00 | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (1.87 | ) | (1.54 | ) | (1.20 | ) | (1.25 | ) | 0.00 | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of period | $ | 70.53 | $ | 66.27 | $ | 55.06 | $ | 36.87 | $ | 38.83 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 9.57 | % | 23.33 | % | 53.19 | % | (0.33 | )% | (22.39 | )%d | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of period (000s) | $ | 595,968 | $ | 632,840 | $ | 520,304 | $ | 94,021 | $ | 58,248 | ||||||||||
Ratio of expenses to average net assetse,f | 0.61 | % | 0.59 | % | 0.61 | % | 0.65 | % | 0.63 | % | ||||||||||
Ratio of net investment income to average net assetse | 2.66 | % | 2.56 | % | 3.22 | % | 4.00 | % | 1.68 | % | ||||||||||
Portfolio turnover rateg | 12 | % | 22 | % | 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 | Ratios for the years ended August 31, 2010 and prior have been recalculated, as necessary, to conform with the current presentation of foreign taxes. |
g | 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 following funds (each, a “Fund,” and collectively, the “Funds”):
iShares MSCI Index Fund | Diversification Classification | |||
Australia | Non-diversified | |||
Hong Kong | Non-diversified | |||
Japan Small Cap | Diversified | |||
Malaysia | Non-diversified | |||
Pacific ex-Japan | Diversified |
iShares MSCI Index Fund | Diversification Classification | |||
Singapore | Non-diversified | |||
South Korea | Non-diversified | |||
Taiwan | Non-diversified | |||
Thailand Investable Market | Non-diversified |
Non-diversified funds generally hold securities of fewer issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers.
The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index. The investment adviser uses a “passive” or index approach to try to achieve each Fund’s investment objective.
Each Fund may invest in securities of non-U.S. issuers that may trade in non-U.S. markets. This may involve certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: generally less liquid and less efficient securities markets; generally greater price volatility; exchange rate fluctuations and exchange controls; imposition of restrictions on the expatriation of funds or other assets of the Funds; 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 Funds in the preparation of their 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.
80 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
SECURITY VALUATION
Each Fund’s investments are valued at fair value each day that the Fund’s listing exchange is open. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) provides oversight of the valuation of investments for the Funds. The investments of each Fund are valued pursuant to policies and procedures developed by the Global Valuation Committee and approved by the Board of Directors of the Company (the “Board”).
• | Equity investments traded on a recognized securities exchange are valued at that day’s last reported trade price or the official closing price, as applicable, on the exchange where the stock is primarily traded. Equity investments traded on a recognized exchange for which there were no sales on that day are valued at the last traded price. |
• | Open-end U.S. mutual funds are valued at that day’s published net asset value (NAV). |
• | Financial futures contracts are valued at that day’s last reported settlement price on the exchange where the contract is traded. |
In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the fair value of such investment or if a price is not available, the investment will be valued based upon other available factors deemed relevant by the Global Valuation Committee, in accordance with policies approved by the Board. These factors include but are not limited to (i) attributes specific to the investment; (ii) the principal market for the investment; (iii) the customary participants in the principal market for the investment; (iv) data assumptions by market participants for the investment, if reasonably available; (v) quoted prices for similar investments in active markets; and (vi) other factors, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and/or other default rates. Valuations based on such factors are reported to the Board on a quarterly basis.
The Global Valuation Committee employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the Company’s pricing vendors, a regular review of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices and large movements in market values, and reviews of market related activity.
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.
Various inputs are used in determining the fair value of financial instruments. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes. The level of a value determined for 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. The three levels of the fair value hierarchy are as follows:
• | Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities; |
• | Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability |
NOTESTO FINANCIAL STATEMENTS | 81 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
(such as exchange rates, financing terms, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs; and |
• | Level 3 — Unobservable inputs for the asset or liability, including the Funds’ assumptions used in determining the fair value of investments. |
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. In accordance with the Company’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period.
The following table summarizes the value of each of the Funds’ investments according to the fair value hierarchy as of August 31, 2012. The breakdown of each Fund’s investments into major categories is disclosed in its respective Schedule of Investments.
iShares MSCI Index Fund and
| Investments | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Australia | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 2,465,102,887 | $ | — | $ | 2,381 | $ | 2,465,105,268 | ||||||||
Short-Term Investments | 12,648,879 | — | — | 12,648,879 | ||||||||||||
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$ | 2,477,751,766 | $ | — | $ | 2,381 | $ | 2,477,754,147 | |||||||||
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Liabilities: | ||||||||||||||||
Futures Contractsa | $ | (50,019 | ) | $ | — | $ | — | $ | (50,019 | ) | ||||||
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$ | (50,019 | ) | $ | — | $ | — | $ | (50,019 | ) | |||||||
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Hong Kong | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 1,858,900,656 | $ | — | $ | — | $ | 1,858,900,656 | ||||||||
Short-Term Investments | 158,396,172 | — | — | 158,396,172 | ||||||||||||
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$ | 2,017,296,828 | $ | — | $ | — | $ | 2,017,296,828 | |||||||||
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Liabilities: | ||||||||||||||||
Futures Contractsa | $ | (23,375 | ) | $ | — | $ | — | $ | (23,375 | ) | ||||||
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$ | (23,375 | ) | $ | — | $ | — | $ | (23,375 | ) | |||||||
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Japan Small Cap | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 42,634,224 | $ | — | $ | — | $ | 42,634,224 | ||||||||
Short-Term Investments | 899,408 | — | — | 899,408 | ||||||||||||
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$ | 43,533,632 | $ | — | $ | — | $ | 43,533,632 | |||||||||
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82 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
iShares MSCI Index Fund and
| Investments | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Malaysia | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 934,610,659 | $ | — | $ | — | $ | 934,610,659 | ||||||||
Short-Term Investments | 131,852 | — | — | 131,852 | ||||||||||||
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$ | 934,742,511 | $ | — | $ | — | $ | 934,742,511 | |||||||||
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Pacific ex-Japan | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 3,161,172,276 | $ | — | $ | 3,404 | $ | 3,161,175,680 | ||||||||
Short-Term Investments | 93,110,554 | — | — | 93,110,554 | ||||||||||||
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$ | 3,254,282,830 | $ | — | $ | 3,404 | $ | 3,254,286,234 | |||||||||
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Singapore | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 1,503,087,557 | $ | — | $ | — | $ | 1,503,087,557 | ||||||||
Short-Term Investments | 93,739,331 | — | — | 93,739,331 | ||||||||||||
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$ | 1,596,826,888 | $ | — | $ | — | $ | 1,596,826,888 | |||||||||
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Liabilities: | ||||||||||||||||
Futures Contractsa | $ | (43,899 | ) | $ | — | $ | — | $ | (43,899 | ) | ||||||
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$ | (43,899 | ) | $ | — | $ | — | $ | (43,899 | ) | |||||||
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South Korea | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 2,579,108,995 | $ | 18,289,151 | $ | — | $ | 2,597,398,146 | ||||||||
Preferred Stocks | 68,629,931 | — | — | 68,629,931 | ||||||||||||
Short-Term Investments | 167,219,822 | — | — | 167,219,822 | ||||||||||||
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$ | 2,814,958,748 | $ | 18,289,151 | $ | — | $ | 2,833,247,899 | |||||||||
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Taiwan | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 2,222,571,412 | $ | — | $ | 23 | $ | 2,222,571,435 | ||||||||
Short-Term Investments | 217,891,495 | — | — | 217,891,495 | ||||||||||||
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$ | 2,440,462,907 | $ | — | $ | 23 | $ | 2,440,462,930 | |||||||||
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Liabilities: | ||||||||||||||||
Futures Contractsa | $ | (165,994 | ) | $ | — | $ | — | $ | (165,994 | ) | ||||||
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$ | (165,994 | ) | $ | — | $ | — | $ | (165,994 | ) | |||||||
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NOTESTO FINANCIAL STATEMENTS | 83 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
iShares MSCI Index Fund and
| Investments | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Thailand Investable Market | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 590,305,913 | $ | — | $ | — | $ | 590,305,913 | ||||||||
Rights | — | 640,213 | — | 640,213 | ||||||||||||
Warrants | 41,478 | — | — | 41,478 | ||||||||||||
Short-Term Investments | 3,026,377 | — | — | 3,026,377 | ||||||||||||
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$ | 593,373,768 | $ | 640,213 | $ | — | $ | 594,013,981 | |||||||||
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a | Futures contracts are shown at the net unrealized appreciation (depreciation) on the contracts. |
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are accounted for on trade date. Dividend income is recognized on the ex-dividend date, net of any foreign taxes withheld at source. Any taxes withheld that are reclaimable from foreign tax authorities as of August 31, 2012 are reflected in dividends receivable. Non-cash dividends received in the form of stock in an elective dividend, if any, are recorded as dividend income at fair value. Distributions received by the 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. Interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method.
FOREIGN CURRENCY TRANSLATION
The accounting records of the Funds are maintained in U.S. dollars. Foreign currencies, as well as investment securities and other assets and liabilities denominated in foreign currencies, are translated into U.S. dollars using exchange rates deemed appropriate by the investment adviser. 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, capital gains on investments, certain foreign currency transactions or other corporate events. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the Funds invest. These foreign taxes, if any, are paid by the Funds and are reflected in their Statements of Operations as follows: foreign taxes withheld at source are presented as a reduction of income, foreign taxes on securities lending income are presented as a reduction of securities lending income, foreign taxes on capital gains from sales of investments and foreign currency transactions are included in their respective net realized gain (loss) categories, and foreign taxes on other corporate events are reflected in “Other foreign taxes.” Foreign taxes payable as of August 31, 2012, if any, are disclosed in the Funds’ Statements of Assets and Liabilities.
84 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends and distributions paid by each Fund are recorded on the ex-dividend dates. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds.
FEDERAL INCOME TAXES
Each Fund is treated as an entity separate from the Company’s other funds 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 is required.
2. | INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES |
Pursuant to an Investment Advisory Agreement with the Company, BlackRock Fund Advisors (“BFA”) manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock, Inc. (“BlackRock”). Under the Investment Advisory Agreement, BFA is responsible for substantially all expenses of the Funds, except interest, taxes, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution fees, litigation expenses and any extraordinary expenses.
For its investment advisory services to each of 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 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 |
For its investment advisory services to each of 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 the Fund and certain other iShares funds, as follows:
Investment Advisory Fee | Aggregate Average Daily Net Assets | |
0.74% | First $2 billion | |
0.69 | Over $2 billion, up to and including $4 billion | |
0.64 | Over $4 billion, up to and including $8 billion | |
0.57 | Over $8 billion, up to and including $16 billion | |
0.51 | Over $16 billion, up to and including $32 billion | |
0.45 | Over $32 billion |
NOTESTO FINANCIAL STATEMENTS | 85 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
Effective June 30, 2012, 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% based on the Fund’s allocable portion of the aggregate of the average daily net assets (of the Fund and certain other iShares funds) up to $46 billion, and 0.475% on its allocable portion of the aggregate average daily net assets in excess of $46 billion. Prior to June 30, 2012, for its investment advisory services to the Fund, BFA was entitled to an annual investment advisory fee of 0.50% based on the average daily net assets of the Fund.
The U.S. Securities and Exchange Commission has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (“BTC”) to serve as securities lending agent for the Funds, subject to applicable conditions. BTC is an affiliate of BFA. Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, and any fees or other payments to and from borrowers of securities. Each Fund retains 65% of securities lending income and pays a fee to BTC equal to 35% of such income. As securities lending agent, BTC is responsible for all transaction fees and all other operational costs relating to securities lending activities, other than extraordinary expenses. BTC is also responsible for fees and expenses incurred by each Fund as a result of the investment of cash collateral received for securities on loan in a money market fund managed by BFA or an affiliate.
For the year ended August 31, 2012, BTC earned securities lending agent fees from the Funds as follows:
iShares MSCI Index Fund | Securities Lending Agent Fees | |||
Australia | $ | 38,799 | ||
Hong Kong | 512,543 | |||
Japan Small Cap | 12,059 | |||
Pacific ex-Japan | 379,136 | |||
Singapore | 388,961 | |||
South Korea | 1,572,222 | |||
Taiwan | 4,262,547 |
For the year ended August 31, 2012, BTC, the Funds’ securities lending agent, has agreed to voluntarily reimburse the iShares MSCI Taiwan Index Fund in the amount of $554,131, related to the foreign tax on the securities lending income. Such reimbursement is included in the “Securities lending income — affiliated” in the Fund’s Statement of Operations.
At a special meeting of the Board held on January 5, 2012, the directors approved a new distribution agreement with BlackRock Investments, LLC (“BRIL”). BRIL is an affiliate of BFA. Effective April 1, 2012, BRIL replaced SEI Investments Distribution Co. as the distributor for each Fund. Pursuant to the new distribution agreement, BFA is responsible for any fees or expenses for distribution services provided to the Funds.
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 — affiliated” in the Statements of Operations.
The PNC Financial Services Group, Inc. is the largest stockholder of BlackRock and is considered to be an affiliate of the Funds for 1940 Act purposes.
Certain directors and officers of the Company are also officers of BTC and/or BFA.
86 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
3. | INVESTMENT PORTFOLIO TRANSACTIONS |
Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended August 31, 2012 were as follows:
iShares MSCI Index Fund | Purchases | Sales | ||||||
Australia | $ | 228,165,806 | $ | 239,802,176 | ||||
Hong Kong | 187,763,455 | 449,391,802 | ||||||
Japan Small Cap | 3,909,599 | 4,545,120 | ||||||
Malaysia | 220,327,800 | 302,753,431 | ||||||
Pacific ex-Japan | 240,859,953 | 250,147,455 | ||||||
Singapore | 49,281,305 | 59,533,585 | ||||||
South Korea | 368,959,624 | 1,669,395,008 | ||||||
Taiwan | 524,453,959 | 895,776,143 | ||||||
Thailand Investable Market | 100,753,794 | 68,160,848 |
In-kind transactions (see Note 4) for the year ended August 31, 2012 were as follows:
iShares MSCI Index Fund | In-kind Purchases | In-kind Sales | ||||||
Australia | $ | 378,325,886 | $ | 837,950,867 | ||||
Hong Kong | 1,131,043,306 | 593,221,463 | ||||||
Japan Small Cap | 4,210,481 | 29,714,377 | ||||||
Pacific ex-Japan | 76,874,400 | 318,997,518 | ||||||
Singapore | 105,638,187 | 274,316,584 | ||||||
Thailand Investable Market | 325,386,319 | 400,624,037 |
4. | CAPITAL SHARE TRANSACTIONS |
Capital shares are issued and redeemed by each Fund only in aggregations of a specified number of shares or multiples thereof (“Creation Units”) at net asset value. Except when aggregated in Creation Units, shares of 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 in the Company generally consists of the in-kind deposit of a designated portfolio of securities, which constitutes an optimized representation of the securities of that fund’s underlying index, and a specified amount of cash. Certain funds in the Company may be offered in Creation Units solely or partially for cash in U.S. dollars. Investors purchasing and redeeming Creation Units may pay a purchase transaction fee and a redemption transaction fee directly to State Street Bank and Trust Company, the Company’s administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash. Investors transacting in Creation Units for cash pay an additional variable charge to compensate the relevant fund for certain transaction costs (i.e., stamp taxes, taxes on currency or other financial transactions, and brokerage costs) and market impact expenses relating to investing in portfolio securities.
NOTESTO FINANCIAL STATEMENTS | 87 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
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. Each Fund could suffer a loss if the value of an investment purchased with cash collateral falls below the value of the cash collateral received.
As of August 31, 2012, any securities on loan 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, 2012 and the value of the related collateral are disclosed in the Statements of Assets and Liabilities. Securities lending income, as disclosed in the Statements of Operations, represents the income earned from the investment of the cash collateral, net of fees and other payments to and from borrowers, and less the fees paid to BTC as securities lending agent.
6. | INCOME TAX INFORMATION |
U.S. GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset values per share. The following permanent differences as of August 31, 2012, attributable to passive foreign investment companies, the expiration of capital loss carryforwards, distributions paid in excess of taxable income, foreign currency transactions and realized gains (losses) from in-kind redemptions, were reclassified to the following accounts:
iShares MSCI Index Fund | Paid-in Capital | Undistributed Net Investment Income/Distributions in Excess of Net Investment Income | Undistributed Net Realized Gain/Accumulated Net Realized Loss | |||||||||
Australia | $ | 27,415,134 | $ | 3,829,340 | $ | (31,244,474 | ) | |||||
Hong Kong | 40,275,941 | 45,573 | (40,321,514 | ) | ||||||||
Japan Small Cap | 2,638,813 | 460,620 | (3,099,433 | ) | ||||||||
Malaysia | (2,953,935 | ) | 3,224,755 | (270,820 | ) | |||||||
Pacific ex-Japan | 85,551,430 | 3,650,178 | (89,201,608 | ) | ||||||||
Singapore | 13,995,745 | 2,810,381 | (16,806,126 | ) | ||||||||
South Korea | (12,103,908 | ) | 13,383,515 | (1,279,607 | ) | |||||||
Taiwan | (9,129,874 | ) | 1,074,920 | 8,054,954 | ||||||||
Thailand Investable Market | 67,721,779 | (373,072 | ) | (67,348,707 | ) |
88 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
The tax character of distributions paid during the years ended August 31, 2012 and August 31, 2011 was as follows:
iShares MSCI Index Fund | 2012 | 2011 | ||||||
Australia | ||||||||
Ordinary income | $ | 127,985,295 | $ | 126,555,555 | ||||
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Hong Kong | ||||||||
Ordinary income | $ | 55,827,349 | $ | 46,031,342 | ||||
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Japan Small Cap | ||||||||
Ordinary income | $ | 1,368,220 | $ | 1,015,659 | ||||
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Malaysia | ||||||||
Ordinary income | $ | 32,637,576 | $ | 26,214,422 | ||||
Return of capital | 1,278,099 | — | ||||||
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$ | 33,915,675 | $ | 26,214,422 | |||||
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Pacific ex-Japan | ||||||||
Ordinary income | $ | 141,521,654 | $ | 153,265,871 | ||||
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Singapore | ||||||||
Ordinary income | $ | 55,248,494 | $ | 74,873,803 | ||||
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South Korea | ||||||||
Ordinary income | $ | 21,597,221 | $ | 31,827,218 | ||||
Return of capital | — | 4,789,805 | ||||||
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$ | 21,597,221 | $ | 36,617,023 | |||||
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Taiwan | ||||||||
Ordinary income | $ | 88,700,282 | $ | 61,236,384 | ||||
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Thailand Investable Market | ||||||||
Ordinary income | $ | 15,932,327 | $ | 15,281,425 | ||||
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NOTESTO FINANCIAL STATEMENTS | 89 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
As of August 31, 2012, the tax components of accumulated net earnings (losses) were as follows:
iShares MSCI Index Fund | Undistributed Ordinary Income | Capital Loss Carryforwards | Net Unrealized Gains (Losses)a | Qualified Late-Year Lossesb | Total | |||||||||||||||
Australia | $ | 35,171,363 | $ | (83,748,394 | ) | $ | (180,103,003 | ) | $ | (41,307,980 | ) | $ | (269,988,014 | ) | ||||||
Hong Kong | 4,985,539 | (221,631,319 | ) | (146,622,533 | ) | (97,238,448 | ) | (460,506,761 | ) | |||||||||||
Japan Small Cap | 316,645 | (1,363,321 | ) | (5,892,555 | ) | (424,024 | ) | (7,363,255 | ) | |||||||||||
Malaysia | — | (39,171,645 | ) | 398,019,062 | (3,664,697 | ) | 355,182,720 | |||||||||||||
Pacific ex-Japan | 38,415,218 | (266,976,532 | ) | 233,952,896 | (77,177,062 | ) | (71,785,480 | ) | ||||||||||||
Singapore | 19,173,778 | (175,729,472 | ) | 55,179,811 | (18,413,465 | ) | (119,789,348 | ) | ||||||||||||
South Korea | — | (366,086,322 | ) | 951,755,831 | (26,946,828 | ) | 558,722,681 | |||||||||||||
Taiwan | 52,224,425 | (839,147,106 | ) | 529,053,835 | (23,751,530 | ) | (281,620,376 | ) | ||||||||||||
Thailand Investable Market | 2,546,326 | (6,554,963 | ) | 10,400,363 | (3,452,237 | ) | 2,939,489 |
a | The difference between book-basis and tax-basis unrealized gains (losses) was attributable primarily to the tax deferral of losses on wash sales and the realization for tax purposes of unrealized gains on investments in passive foreign investment companies. |
b | The Funds have elected to defer certain qualified late-year losses and recognize such losses in the year ending August 31, 2013. |
As of August 31, 2012, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:
iShares MSCI Index Fund | Non- Expiringa | Expiring 2013 | Expiring 2014 | Expiring 2015 | Expiring 2016 | Expiring 2017 | Expiring 2018 | Expiring 2019 | Total | |||||||||||||||||||||||||||
Australia | $ | 23,345,303 | $ | 384,424 | $ | — | $ | 7,066 | $ | 529,868 | $ | 24,006,125 | $ | 23,348,244 | $ | 12,127,364 | $ | 83,748,394 | ||||||||||||||||||
Hong Kong | 36,014,089 | 468,716 | 425,440 | 2,899,247 | 3,185,408 | 29,235,556 | 114,836,904 | 34,565,959 | 221,631,319 | |||||||||||||||||||||||||||
Japan Small Cap | 486,584 | — | — | — | — | 131,718 | 541,322 | 203,697 | 1,363,321 | |||||||||||||||||||||||||||
Malaysia | — | — | — | — | — | 39,171,645 | — | — | 39,171,645 | |||||||||||||||||||||||||||
Pacific ex-Japan | 59,368,214 | — | — | — | — | 66,207,828 | 104,799,503 | 36,600,987 | 266,976,532 | |||||||||||||||||||||||||||
Singapore | 12,674,147 | 2,558,348 | — | — | 807,115 | 15,680,510 | 132,420,824 | 11,588,528 | 175,729,472 | |||||||||||||||||||||||||||
South Korea | — | — | — | — | — | 60,990,953 | 226,591,665 | 78,503,704 | 366,086,322 | |||||||||||||||||||||||||||
Taiwan | 4,857,121 | 12,022,719 | 14,435,986 | 64,999,586 | 16,734,578 | 343,375,145 | 363,052,013 | 19,669,958 | 839,147,106 | |||||||||||||||||||||||||||
Thailand Investable Market | 2,373,181 | — | — | — | — | 555,444 | 2,321,428 | 1,304,910 | 6,554,963 |
a | Must be utilized prior to losses subject to expiration. |
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.
For the year ended August 31, 2012, the Funds utilized their capital loss carryforwards as follows:
iShares MSCI Index Fund | Utilized | |||
Malaysia | $ | 2,953,935 | ||
South Korea | 174,121,897 |
90 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
As of August 31, 2012, 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 | $ | 2,657,584,305 | 177,500,015 | (357,330,173 | ) | $ | (179,830,158 | ) | ||||||||
Hong Kong | 2,163,896,257 | 102,798,102 | (249,397,531 | ) | (146,599,429 | ) | ||||||||||
Japan Small Cap | 49,427,257 | 3,270,759 | (9,164,384 | ) | (5,893,625 | ) | ||||||||||
Malaysia | 536,710,454 | 448,603,463 | (50,571,406 | ) | 398,032,057 | |||||||||||
Pacific ex-Japan | 3,020,166,055 | 569,050,520 | (334,930,341 | ) | 234,120,179 | |||||||||||
Singapore | 1,541,630,055 | 201,081,698 | (145,884,865 | ) | 55,196,833 | |||||||||||
South Korea | 1,881,477,700 | 1,461,874,526 | (510,104,327 | ) | 951,770,199 | |||||||||||
Taiwan | 1,911,250,219 | 795,694,640 | (266,481,929 | ) | 529,212,711 | |||||||||||
Thailand Investable Market | 583,616,122 | 60,016,559 | (49,618,700 | ) | 10,397,859 |
Management has reviewed the tax positions as of August 31, 2012, inclusive of the open tax return years, and has determined that no provision for income tax is required in the Funds’ financial statements.
7. | FINANCIAL FUTURES CONTRACTS |
Each Fund may purchase or sell financial futures contracts in an effort to help such Fund track its underlying index. A futures contract is a standardized, exchange-traded agreement to buy and sell a financial instrument at a set price on a future date. Upon entering into a futures contract, the Fund is required to pledge to the executing broker which holds segregated from its own assets, an amount of cash, U.S. government securities or other high-quality debt and equity securities equal to the minimum initial margin requirements of the exchange on which the contract is traded. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as margin variation and are recorded by the Fund as unrealized appreciation or depreciation. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Losses may arise if the value of a futures contract decreases due to an unfavorable change in the market rates or values of the underlying instrument during the term of the contract or if the counterparty does not perform under the contract. The use of futures contracts also involves the risk of an imperfect correlation in the movements in the price of futures contracts and the assets underlying such contracts.
NOTESTO FINANCIAL STATEMENTS | 91 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
The following table shows the value of futures contracts held as of August 31, 2012 and the related locations in the Statements of Assets and Liabilities, presented by risk exposure category:
Liabilities | ||||||||||||||||
iShares MSCI Australia Index Fund | iShares MSCI Hong Kong Index Fund | iShares MSCI Singapore Index Fund | iShares MSCI Taiwan Index Fund | |||||||||||||
Equity contracts: | ||||||||||||||||
Variation margin/Net assets consist of — net unrealized appreciation (depreciation)a | $ | (50,019 | ) | $ | (23,375 | ) | $ | (43,899 | ) | $ | (165,994 | )b | ||||
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a | Represents cumulative depreciation of futures contracts as reported in the Schedules of Investments. |
b | Only current day’s variation margin is reported in the Statement of Assets and Liabilities. |
The following table shows the realized and unrealized gains (losses) on futures contracts held during the year ended August 31, 2012 and the related locations in the Statements of Operations, presented by risk exposure category:
Net Realized Gain (Loss) | ||||||||||||||||
iShares MSCI Australia Index Fund | iShares MSCI Hong Kong Index Fund | iShares MSCI Singapore Index Fund | iShares MSCI Taiwan Index Fund | |||||||||||||
Equity contracts: | ||||||||||||||||
Futures contracts | $ | (202 | ) | $ | (142 | ) | $ | 297,219 | $ | 1,589,034 | ||||||
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Net Change in Unrealized Appreciation/Depreciation | ||||||||||||||||
iShares MSCI Australia Index Fund | iShares MSCI Hong Kong Index Fund | iShares MSCI Singapore Index Fund | iShares MSCI Taiwan Index Fund | |||||||||||||
Equity contracts: | ||||||||||||||||
Futures contracts | $ | (50,019 | ) | $ | (23,375 | ) | $ | (43,899 | ) | $ | (165,994 | ) | ||||
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92 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
The following table shows the average quarter-end balances of open futures contracts for the year ended August 31, 2012:
iShares MSCI Australia Index Fund | iShares MSCI Hong Kong Index Fund | iShares MSCI Singapore Index Fund | iShares MSCI Taiwan Index Fund | |||||||||||||
Average number of contracts purchased | 88 | 31 | 144 | 391 | ||||||||||||
Average value of contracts purchased | $ | 9,850,970 | $ | 3,820,650 | $ | 7,754,199 | $ | 10,220,095 |
8. | 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.
NOTESTOFINANCIALSTATEMENTS | 93 |
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 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 (the “Funds”), at August 31, 2012, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and 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 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, 2012 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
October 23, 2012
94 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES®, INC.
For the fiscal year ended August 31, 2012, 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 | $ | 135,730,851 | $ | 658,850 | ||||
Hong Kong | 65,294,787 | — | ||||||
Japan Small Cap | 1,389,362 | 96,084 | ||||||
Malaysia | 31,299,507 | — | ||||||
Pacific ex-Japan | 150,873,312 | 837,764 | ||||||
Singapore | 55,822,067 | 234,795 | ||||||
South Korea | 35,384,109 | 5,774,082 | ||||||
Taiwan | 76,256,349 | 17,847,498 | ||||||
Thailand Investable Market | 21,387,118 | 2,225,746 |
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, 2012:
iShares MSCI Index Fund | Qualified Dividend Income | |||
Australia | $ | 124,259,907 | ||
Japan Small Cap | 1,181,543 | |||
Pacific ex-Japan | 99,175,164 | |||
South Korea | 27,371,303 | |||
Thailand Investable Market | 18,158,073 |
In February 2013, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2012. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.
TAX INFORMATION | 95 |
Table of Contents
Board Review and Approval of Investment Advisory
Contract (Unaudited)
iSHARES®, INC.
I. iShares MSCI Australia, iShares MSCI Hong Kong, iShares MSCI Japan Small Cap, iShares MSCI Malaysia, iShares MSCI Singapore, iShares MSCI South Korea, iShares MSCI Taiwan, and iShares MSCI Thailand Investable Market Index Funds
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 annually to consider the Investment Advisory Contract between the Company and BFA (the “Advisory Contract”) on behalf of the Funds. The Independent Directors requested, and BFA provided, such information as the Independent Directors, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of Independent Directors (the “15(c) Committee”), with independent counsel, met with management on April 19, 2012, April 27, 2012, and May 16, 2012, to discuss the types of information the Independent Directors required and the manner in which management would organize and present such information. At a meeting held on May 17, 2012, management presented information to the Board relating to the continuance of the Advisory Contract, and the Board, including the Independent Directors, reviewed and discussed such information at length. The Independent Directors requested from management certain additional information, and the 15(c) Committee met with management on June 8, 2012, to discuss the additional requests. At a meeting held on June 20-21, 2012, the Board, including the Independent Directors, reviewed additional information provided by management in response to these requests. The Board, including a majority of the Independent Directors, approved the continuance of the Advisory Contract for the Funds, based on a review of qualitative and quantitative information provided by BFA, including a review of supplemental information management provided at the request of the Independent Directors. The Board noted its satisfaction with the extent and quality of information, and detailed responses, provided by BFA. The Independent Directors were advised by their independent counsel throughout the process. In approving the Advisory Contract for the Funds, the Board, including the Independent Directors, considered the following factors, no one of which was controlling, and made the following conclusions:
Expenses and Performance of the Funds — The Board reviewed statistical information prepared by Lipper Inc. (“Lipper”), an independent provider of investment company data, regarding the expense ratio components, including actual advisory fees, waivers/reimbursements, and gross and net total expenses of each Fund in comparison with the same information for other registered investment companies objectively selected by Lipper as comprising such 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, sponsor, inception date, or other differentiating factors, but that 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 those tracked by the Funds, the Lipper Group 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), as applicable. 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 also received a detailed explanation from BFA regarding its rationale for including funds that had been excluded from Lipper’s consideration due to Lipper’s methodology parameters, as well as information showing the effect of including these additional funds in the analysis. The Board further noted that due to the limitations in providing comparable funds in the various Lipper Groups, the statistical information may or may not provide meaningful direct comparisons to the Funds.
The Board also noted that the investment advisory fees and overall expenses for the Funds compared favorably to the investment advisory fee rates and overall expenses of the funds in their respective Lipper Group.
In addition, the Board reviewed statistical information prepared by Lipper regarding the performance of each Fund for the one-, three-, five-, ten-year, and since inception periods, as applicable, and the “last quarter” period ended December 31, 2011, and a comparison of each Fund’s performance to its performance benchmark index for the same periods. To the extent that any of the comparison funds included in
96 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Board Review and Approval of Investment Advisory
Contract (Unaudited) (Continued)
iSHARES®, INC.
the Lipper Group track the same index as any particular Fund, Lipper also provided, and the Board reviewed, a comparison of such Fund’s performance to that of such relevant comparison funds for the same periods. The Board noted that the Funds generally performed in line with their respective performance benchmark indexes over the relevant periods. In considering this information, the Board noted that the Lipper Group includes funds that may have different investment objectives and/or benchmarks from the Funds. In addition, the Board noted that each Fund seeks to track its benchmark index and that, during the prior year, the Board received periodic reports on the Funds’ performance in comparison with their relevant benchmark indexes. Such periodic comparative performance information was also considered by the Board.
Based on this review, the other factors considered at the meeting, and their general knowledge of mutual fund pricing, the Board concluded that the investment advisory fees and expense levels and the historical performance of each Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA over prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the Funds and their shareholders. The Board noted that BFA became an indirect wholly-owned subsidiary of BlackRock, Inc. (“BlackRock”) in December 2009. The Board acknowledged that additional resources to support the Funds and their shareholders have been added or enhanced since then, including in such areas as investor education, product management, customized portfolio consulting support, and capital markets support. The Board also considered BFA’s compliance program and its compliance record with respect to the Funds. In that regard, 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 on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Funds. In addition to the above considerations, the Board reviewed and considered BFA’s investment and risk management processes and strategies, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that each Fund had met its investment objective consistently since its respective inception date.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Funds under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Costs of Services Provided to Funds and Profits Realized by BFA and Affiliates — The Board reviewed information about the profitability to BFA of the Funds based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and all other sources of revenue and expense to BFA and its affiliates from the Funds’ operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, noting that the 15(c) Committee had focused on the methodology and proposed presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC from securities lending by the Funds. The Board also discussed BFA’s profit margin as reflected in the Funds’ profitability analysis and reviewed information regarding economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Funds and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 97 |
Table of Contents
Board Review and Approval of Investment Advisory
Contract (Unaudited) (Continued)
iSHARES®, INC.
Economies of Scale — The Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Funds’ assets, noting that the issue of economies of scale had been focused on extensively by the 15(c) Committee during its meetings and addressed by management. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through breakpoints, waivers, or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BFA’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished between fixed and variable costs, and explained how the nature of such costs may impact the existence of scale benefits. The Board noted that the Advisory Contract for the Funds already provided for breakpoints in the Funds’ investment advisory fee rates as the assets of the Funds, on an aggregated basis with the assets of certain other iShares funds, increase. The Board noted that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding new or revised breakpoints in the future. Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider this issue at least annually, concluded that the structure of the investment advisory fees reflects appropriate sharing of potential economies of scale with the Funds’ shareholders and supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end and closed-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds and institutional separate accounts (together, the “Other Accounts”). The Board noted that BFA and its affiliates do manage Other Accounts with substantially similar investment objectives and strategies as the Funds, except for iShares MSCI Australia Index Fund and iShares MSCI Japan Small Cap Index Fund. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Funds, including in terms of the different generally more extensive services provided, as well as other significant differences in the approach of BFA and its affiliates to the Funds, on one hand, and Other Accounts, on the other. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks of managing and providing other services to the Funds, as publicly traded exchange traded funds, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also considered the “all-inclusive” nature of the Funds’ advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rates under the Advisory Contract for the Funds were generally higher than the investment advisory/management fee rates for the Other Accounts that are institutional clients of BFA (or its affiliates) and concluded that the differences appeared to be consistent with the factors discussed.
Other Benefits to BFA and/or its Affiliates — The Board reviewed ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Funds by BFA, such as payment of revenue to BTC, the Funds’ securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Funds in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board noted that BFA generally does 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 Funds. The Board further noted that any portfolio transactions on behalf of the Funds 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. The Board concluded that any such ancillary benefits would not be disadvantageous to the Funds’ shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.
98 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Board Review and Approval of Investment Advisory
Contract (Unaudited) (Continued)
iSHARES®, INC.
Based on the considerations described above, the Board determined that the investment advisory fee rates under the Advisory Contract do not constitute fees that are so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that it is in the best interest of the Funds and their shareholders to approve the continuance of the Advisory Contract for the coming year.
II. iShares MSCI Pacific ex-Japan 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 annually to consider the Investment Advisory Contract between the Company and BFA (the “Advisory Contract”) on behalf of the Fund. The Independent Directors requested, and BFA provided, such information as the Independent Directors, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of Independent Directors (the “15(c) Committee”), with independent counsel, met with management on April 19, 2012, April 27, 2012, and May 16, 2012, to discuss the types of information the Independent Directors required and the manner in which management would organize and present such information. At a meeting held on May 17, 2012, management presented information to the Board relating to the continuance of the Advisory Contract, and the Board, including the Independent Directors, reviewed and discussed such information at length. The Independent Directors requested from management certain additional information, and the 15(c) Committee met with management on June 8, 2012, to discuss the additional requests. At a meeting held on June 20-21, 2012, the Board, including the Independent Directors, reviewed additional information provided by management in response to these requests. The Board, including a majority of the Independent Directors, approved the continuance of the Advisory Contract for the Fund, based on a review of qualitative and quantitative information provided by BFA, including a review of supplemental information management provided at the request of the Independent Directors. The Board noted its satisfaction with the extent and quality of information, and detailed responses, provided by BFA. The Independent Directors were advised by their independent counsel throughout the process. In approving the Advisory Contract for the Fund, the Board, including the Independent Directors, considered the following factors, no one of which was controlling, and made the following conclusions:
Expenses and Performance of the Fund — 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, sponsor, inception date, or other differentiating factors, but that 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 those tracked by the Fund, the Lipper Group 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), as applicable. 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 also received a detailed explanation from BFA regarding its rationale for including funds that had been excluded from Lipper’s consideration due to Lipper’s methodology parameters, as well as information showing the effect of including these additional funds in the analysis. The Board further noted that due to the limitations in providing comparable funds in the various Lipper Groups, the statistical information may or may not provide meaningful direct comparisons to the Fund.
The Board also noted that the investment advisory fees and overall expenses for the Fund compared favorably to the investment advisory fee rates and overall expenses of the funds in the Lipper Group.
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 99 |
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Board Review and Approval of Investment Advisory
Contract (Unaudited) (Continued)
iSHARES®, INC.
In addition, the Board reviewed statistical information prepared by Lipper regarding the performance of the Fund for the one-, three-, five-, ten-year, and since inception periods, as applicable, and the “last quarter” period ended December 31, 2011, and a comparison of the Fund’s performance to its performance benchmark index for the same periods. To the extent that any of the comparison funds included in the Lipper Group track the same index as the Fund, Lipper also provided, and the Board reviewed, a comparison of the Fund’s performance to that of such relevant comparison funds for the same periods. The Board noted that the Fund generally performed in line with its performance benchmark index over the relevant periods. In considering this information, the Board noted that the Lipper Group includes funds that may have different investment objectives and/or benchmarks from the Fund. In addition, the Board noted that the Fund seeks to track its benchmark index and that, during the prior year, the Board received periodic reports on the Fund’s performance in comparison with its benchmark index. Such periodic comparative performance information was also considered by the Board.
Based on this review, the other factors considered at the meeting, and their general knowledge of mutual fund pricing, the Board concluded that the investment advisory fees and expense levels and the historical performance of the Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA over prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the Fund and its shareholders. The Board noted that BFA became an indirect wholly-owned subsidiary of BlackRock, Inc. (“BlackRock”) in December 2009. The Board acknowledged that additional resources to support the Fund and its shareholders have been added or enhanced since then, including in such areas as investor education, product management, customized portfolio consulting support, and capital markets support. The Board also considered BFA’s compliance program and its compliance record with respect to the Fund. In that regard, 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 on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Fund. In addition to the above considerations, the Board reviewed and considered BFA’s investment and risk management processes and strategies, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that the Fund had met its investment objective consistently since its inception date.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Fund under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Costs of Services Provided to Fund and Profits Realized by BFA and Affiliates — The Board reviewed information about the profitability to BFA of the Fund based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and all other sources of revenue and expense to BFA and its affiliates from the Fund’s operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, noting that the 15(c) Committee had focused on the methodology and proposed presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC from securities lending by the Fund. The Board also discussed BFA’s profit margin as reflected in the Fund’s profitability analysis and reviewed information regarding economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Fund and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.
100 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Board Review and Approval of Investment Advisory
Contract (Unaudited) (Continued)
iSHARES®, INC.
Economies of Scale — The Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Fund’s assets, noting that the issue of economies of scale had been focused on extensively by the 15(c) Committee during its meetings and addressed by management. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through breakpoints, waivers, or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BFA’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished between fixed and variable costs, and explained how the nature of such costs may impact the existence of scale benefits. The Board noted that BFA and the Board had agreed to revise the Advisory Contract for the Fund to provide for a breakpoint in the Fund’s investment advisory fee rate as the aggregate assets of certain iShares funds, including the Fund, increase. The Board noted that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding new or revised breakpoints in the future. Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider this issue at least annually, concluded that the structure of the investment advisory fees reflects appropriate sharing of potential economies of scale with the Fund’s shareholders and supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end and closed-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds and institutional separate accounts (together, the “Other Accounts”). The Board noted that BFA and its affiliates do manage Other Accounts with a substantially similar investment objective and strategy as the Fund. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Fund, including in terms of the different generally more extensive services provided, as well as other significant differences in the approach of BFA and its affiliates to the Fund, on one hand, and Other Accounts, on the other. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks of managing and providing other services to the Fund, as a publicly traded exchange traded fund, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rates under the Advisory Contract for the Fund were generally higher than the investment advisory/management fee rates for the Other Accounts that are institutional clients of BFA (or its affiliates) and concluded that the differences appeared to be consistent with the factors discussed.
Other Benefits to BFA and/or its Affiliates — The Board reviewed ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Fund by BFA, such as payment of revenue to BTC, the Fund’s securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Fund in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board noted that BFA generally does 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 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. The Board concluded that any such ancillary benefits would not be disadvantageous to the Fund’s shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 101 |
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Board Review and Approval of Investment Advisory
Contract (Unaudited) (Continued)
iSHARES®, INC.
Based on the considerations described above, the Board determined that the investment advisory fee rates under the Advisory Contract do not constitute fees that are so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that it is in the best interest of the Fund and its shareholders to approve the continuance of the Advisory Contract for the coming year.
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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 | ||||||||||||||||||||||||
Australia | $ | 1.08982 | $ | — | $ | 0.01782 | $ | 1.10764 | 98 | % | — | % | 2 | % | 100 | % | ||||||||||||||||
Japan Small Cap | 1.24384 | — | — | 1.24384 | 100 | — | — | 100 | ||||||||||||||||||||||||
Malaysia | 0.43207 | — | 0.10494 | 0.53701 | 80 | — | 20 | 100 | ||||||||||||||||||||||||
Pacific ex-Japan | 1.84997 | — | — | 1.84997 | 100 | — | — | 100 | ||||||||||||||||||||||||
Singapore | 0.45773 | — | 0.01549 | 0.47322 | 97 | — | 3 | 100 | ||||||||||||||||||||||||
South Korea | 0.37301 | — | — | 0.37301 | 100 | — | — | 100 | ||||||||||||||||||||||||
Taiwan | 0.47282 | — | — | 0.47282 | 100 | — | — | 100 | ||||||||||||||||||||||||
Thailand Investable Market | 1.86655 | — | — | 1.86655 | 100 | — | — | 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 are 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 quarter-end. The specific periods covered for each Fund are disclosed in the table for such Fund.
SUPPLEMENTAL INFORMATION | 103 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
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 Australia Index Fund
Period Covered: January 1, 2007 through June 30, 2012
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% | 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% | 13 | 0.94 | ||||||
Greater than 2.5% and Less than 3.0% | 20 | 1.45 | ||||||
Greater than 2.0% and Less than 2.5% | 26 | 1.88 | ||||||
Greater than 1.5% and Less than 2.0% | 74 | 5.35 | ||||||
Greater than 1.0% and Less than 1.5% | 122 | 8.82 | ||||||
Greater than 0.5% and Less than 1.0% | 238 | 17.19 | ||||||
Between 0.5% and –0.5% | 493 | 35.61 | ||||||
Less than –0.5% and Greater than –1.0% | 126 | 9.10 | ||||||
Less than –1.0% and Greater than –1.5% | 100 | 7.23 | ||||||
Less than –1.5% and Greater than –2.0% | 47 | 3.40 | ||||||
Less than –2.0% and Greater than –2.5% | 43 | 3.11 | ||||||
Less than –2.5% and Greater than –3.0% | 24 | 1.73 | ||||||
Less than –3.0% and Greater than –3.5% | 11 | 0.79 | ||||||
Less than –3.5% and Greater than –4.0% | 8 | 0.58 | ||||||
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% | 5 | 0.36 | ||||||
Less than –5.5% and Greater than –6.0% | 2 | 0.14 | ||||||
Less than –6.0% | 5 | 0.36 | ||||||
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1,384 | 100.00 | % | ||||||
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104 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Hong Kong Index Fund
Period Covered: January 1, 2007 through June 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 6.0% | 6 | 0.43 | % | |||||
Greater than 5.5% and Less than 6.0% | 1 | 0.07 | ||||||
Greater than 5.0% and Less than 5.5% | 1 | 0.07 | ||||||
Greater than 4.5% and Less than 5.0% | 2 | 0.14 | ||||||
Greater than 4.0% and Less than 4.5% | 6 | 0.43 | ||||||
Greater than 3.5% and Less than 4.0% | 5 | 0.36 | ||||||
Greater than 3.0% and Less than 3.5% | 12 | 0.87 | ||||||
Greater than 2.5% and Less than 3.0% | 17 | 1.23 | ||||||
Greater than 2.0% and Less than 2.5% | 40 | 2.89 | ||||||
Greater than 1.5% and Less than 2.0% | 49 | 3.54 | ||||||
Greater than 1.0% and Less than 1.5% | 97 | 7.01 | ||||||
Greater than 0.5% and Less than 1.0% | 208 | 15.03 | ||||||
Between 0.5% and –0.5% | 560 | 40.47 | ||||||
Less than –0.5% and Greater than –1.0% | 138 | 9.97 | ||||||
Less than –1.0% and Greater than –1.5% | 91 | 6.58 | ||||||
Less than –1.5% and Greater than –2.0% | 54 | 3.90 | ||||||
Less than –2.0% and Greater than –2.5% | 38 | 2.75 | ||||||
Less than –2.5% and Greater than –3.0% | 21 | 1.52 | ||||||
Less than –3.0% and Greater than –3.5% | 15 | 1.08 | ||||||
Less than –3.5% and Greater than –4.0% | 3 | 0.22 | ||||||
Less than –4.0% and Greater than –4.5% | 5 | 0.36 | ||||||
Less than –4.5% and Greater than –5.0% | 6 | 0.43 | ||||||
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 | ||||||
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1,384 | 100.00 | % | ||||||
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SUPPLEMENTAL INFORMATION | 105 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Japan Small Cap Index Fund
Period Covered: January 1, 2008 through June 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 5.0% | 12 | 1.06 | % | |||||
Greater than 4.5% and Less than 5.0% | 3 | 0.26 | ||||||
Greater than 4.0% and Less than 4.5% | 3 | 0.26 | ||||||
Greater than 3.5% and Less than 4.0% | 5 | 0.44 | ||||||
Greater than 3.0% and Less than 3.5% | 10 | 0.88 | ||||||
Greater than 2.5% and Less than 3.0% | 12 | 1.06 | ||||||
Greater than 2.0% and Less than 2.5% | 21 | 1.85 | ||||||
Greater than 1.5% and Less than 2.0% | 56 | 4.94 | ||||||
Greater than 1.0% and Less than 1.5% | 104 | 9.18 | ||||||
Greater than 0.5% and Less than 1.0% | 161 | 14.22 | ||||||
Between 0.5% and –0.5% | 436 | 38.49 | ||||||
Less than –0.5% and Greater than –1.0% | 120 | 10.60 | ||||||
Less than –1.0% and Greater than –1.5% | 69 | 6.09 | ||||||
Less than –1.5% and Greater than –2.0% | 44 | 3.88 | ||||||
Less than –2.0% and Greater than –2.5% | 30 | 2.65 | ||||||
Less than –2.5% and Greater than –3.0% | 14 | 1.24 | ||||||
Less than –3.0% and Greater than –3.5% | 13 | 1.15 | ||||||
Less than –3.5% and Greater than –4.0% | 6 | 0.53 | ||||||
Less than –4.0% and Greater than –4.5% | 3 | 0.26 | ||||||
Less than –4.5% and Greater than –5.0% | 2 | 0.18 | ||||||
Less than –5.0% and Greater than –5.5% | 3 | 0.26 | ||||||
Less than –5.5% and Greater than –6.0% | 3 | 0.26 | ||||||
Less than –6.0% | 3 | 0.26 | ||||||
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1,133 | 100.00 | % | ||||||
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Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Malaysia Index Fund
Period Covered: January 1, 2007 through June 30, 2012
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% | 2 | 0.14 | ||||||
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% | 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% | 18 | 1.30 | ||||||
Greater than 1.5% and Less than 2.0% | 39 | 2.83 | ||||||
Greater than 1.0% and Less than 1.5% | 101 | 7.31 | ||||||
Greater than 0.5% and Less than 1.0% | 219 | 15.83 | ||||||
Between 0.5% and –0.5% | 600 | 43.36 | ||||||
Less than –0.5% and Greater than –1.0% | 186 | 13.44 | ||||||
Less than –1.0% and Greater than –1.5% | 89 | 6.43 | ||||||
Less than –1.5% and Greater than –2.0% | 41 | 2.96 | ||||||
Less than –2.0% and Greater than –2.5% | 31 | 2.24 | ||||||
Less than –2.5% and Greater than –3.0% | 15 | 1.08 | ||||||
Less than –3.0% and Greater than –3.5% | 8 | 0.58 | ||||||
Less than –3.5% and Greater than –4.0% | 5 | 0.36 | ||||||
Less than –4.0% and Greater than –4.5% | 8 | 0.58 | ||||||
Less than –4.5% and Greater than –5.0% | 2 | 0.14 | ||||||
Less than –5.0% and Greater than –5.5% | 2 | 0.14 | ||||||
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1,384 | 100.00 | % | ||||||
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SUPPLEMENTAL INFORMATION | 107 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Pacific ex-Japan Index Fund
Period Covered: January 1, 2007 through June 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 4.5% | 9 | 0.65 | % | |||||
Greater than 4.0% and Less than 4.5% | 3 | 0.22 | ||||||
Greater than 3.5% and Less than 4.0% | 10 | 0.72 | ||||||
Greater than 3.0% and Less than 3.5% | 10 | 0.72 | ||||||
Greater than 2.5% and Less than 3.0% | 12 | 0.87 | ||||||
Greater than 2.0% and Less than 2.5% | 30 | 2.17 | ||||||
Greater than 1.5% and Less than 2.0% | 60 | 4.34 | ||||||
Greater than 1.0% and Less than 1.5% | 127 | 9.18 | ||||||
Greater than 0.5% and Less than 1.0% | 228 | 16.47 | ||||||
Between 0.5% and –0.5% | 524 | 37.85 | ||||||
Less than –0.5% and Greater than –1.0% | 127 | 9.18 | ||||||
Less than –1.0% and Greater than –1.5% | 99 | 7.15 | ||||||
Less than –1.5% and Greater than –2.0% | 53 | 3.83 | ||||||
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% | 13 | 0.94 | ||||||
Less than –3.5% and Greater than –4.0% | 7 | 0.51 | ||||||
Less than –4.0% and Greater than –4.5% | 5 | 0.36 | ||||||
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% | 2 | 0.14 | ||||||
Less than –6.0% | 5 | 0.36 | ||||||
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1,384 | 100.00 | % | ||||||
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Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Singapore Index Fund
Period Covered: January 1, 2007 through June 30, 2012
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% | 4 | 0.29 | ||||||
Greater than 3.0% and Less than 3.5% | 3 | 0.22 | ||||||
Greater than 2.5% and Less than 3.0% | 10 | 0.72 | ||||||
Greater than 2.0% and Less than 2.5% | 33 | 2.39 | ||||||
Greater than 1.5% and Less than 2.0% | 36 | 2.60 | ||||||
Greater than 1.0% and Less than 1.5% | 104 | 7.51 | ||||||
Greater than 0.5% and Less than 1.0% | 217 | 15.68 | ||||||
Between 0.5% and –0.5% | 611 | 44.15 | ||||||
Less than –0.5% and Greater than –1.0% | 152 | 10.98 | ||||||
Less than –1.0% and Greater than –1.5% | 81 | 5.85 | ||||||
Less than –1.5% and Greater than –2.0% | 47 | 3.40 | ||||||
Less than –2.0% and Greater than –2.5% | 36 | 2.60 | ||||||
Less than –2.5% and Greater than –3.0% | 13 | 0.94 | ||||||
Less than –3.0% and Greater than –3.5% | 8 | 0.58 | ||||||
Less than –3.5% and Greater than –4.0% | 5 | 0.36 | ||||||
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% | 2 | 0.14 | ||||||
Less than –5.5% | 2 | 0.14 | ||||||
|
|
|
| |||||
1,384 | 100.00 | % | ||||||
|
|
|
|
SUPPLEMENTAL INFORMATION | 109 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI South Korea Index Fund
Period Covered: January 1, 2007 through June 30, 2012
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% | 2 | 0.14 | ||||||
Greater than 4.5% and Less than 5.0% | 5 | 0.36 | ||||||
Greater than 4.0% and Less than 4.5% | 5 | 0.36 | ||||||
Greater than 3.5% and Less than 4.0% | 8 | 0.58 | ||||||
Greater than 3.0% and Less than 3.5% | 10 | 0.72 | ||||||
Greater than 2.5% and Less than 3.0% | 26 | 1.88 | ||||||
Greater than 2.0% and Less than 2.5% | 40 | 2.89 | ||||||
Greater than 1.5% and Less than 2.0% | 64 | 4.62 | ||||||
Greater than 1.0% and Less than 1.5% | 99 | 7.15 | ||||||
Greater than 0.5% and Less than 1.0% | 208 | 15.03 | ||||||
Between 0.5% and –0.5% | 433 | 31.29 | ||||||
Less than –0.5% and Greater than –1.0% | 176 | 12.72 | ||||||
Less than –1.0% and Greater than –1.5% | 91 | 6.58 | ||||||
Less than –1.5% and Greater than –2.0% | 61 | 4.41 | ||||||
Less than –2.0% and Greater than –2.5% | 41 | 2.96 | ||||||
Less than –2.5% and Greater than –3.0% | 36 | 2.60 | ||||||
Less than –3.0% and Greater than –3.5% | 17 | 1.23 | ||||||
Less than –3.5% and Greater than –4.0% | 13 | 0.94 | ||||||
Less than –4.0% and Greater than –4.5% | 10 | 0.72 | ||||||
Less than –4.5% and Greater than –5.0% | 7 | 0.51 | ||||||
Less than –5.0% and Greater than –5.5% | 4 | 0.29 | ||||||
Less than –5.5% and Greater than –6.0% | 6 | 0.43 | ||||||
Less than –6.0% | 13 | 0.94 | ||||||
|
|
|
| |||||
1,384 | 100.00 | % | ||||||
|
|
|
|
110 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Taiwan Index Fund
Period Covered: January 1, 2007 through June 30, 2012
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% | 6 | 0.43 | ||||||
Greater than 4.0% and Less than 4.5% | 5 | 0.36 | ||||||
Greater than 3.5% and Less than 4.0% | 14 | 1.01 | ||||||
Greater than 3.0% and Less than 3.5% | 14 | 1.01 | ||||||
Greater than 2.5% and Less than 3.0% | 14 | 1.01 | ||||||
Greater than 2.0% and Less than 2.5% | 30 | 2.17 | ||||||
Greater than 1.5% and Less than 2.0% | 47 | 3.40 | ||||||
Greater than 1.0% and Less than 1.5% | 107 | 7.73 | ||||||
Greater than 0.5% and Less than 1.0% | 200 | 14.45 | ||||||
Between 0.5% and –0.5% | 499 | 36.06 | ||||||
Less than –0.5% and Greater than –1.0% | 195 | 14.09 | ||||||
Less than –1.0% and Greater than –1.5% | 89 | 6.43 | ||||||
Less than –1.5% and Greater than –2.0% | 52 | 3.76 | ||||||
Less than –2.0% and Greater than –2.5% | 36 | 2.60 | ||||||
Less than –2.5% and Greater than –3.0% | 21 | 1.52 | ||||||
Less than –3.0% and Greater than –3.5% | 22 | 1.59 | ||||||
Less than –3.5% and Greater than –4.0% | 8 | 0.58 | ||||||
Less than –4.0% and Greater than –4.5% | 4 | 0.29 | ||||||
Less than –4.5% and Greater than –5.0% | 4 | 0.29 | ||||||
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 | ||||||
|
|
|
| |||||
1,384 | 100.00 | % | ||||||
|
|
|
|
SUPPLEMENTAL INFORMATION | 111 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Thailand Index Fund
Period Covered: April 1, 2008 through June 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 5.0% | 1 | 0.09 | % | |||||
Greater than 4.5% and Less than 5.0% | 3 | 0.28 | ||||||
Greater than 4.0% and Less than 4.5% | 3 | 0.28 | ||||||
Greater than 3.5% and Less than 4.0% | 5 | 0.47 | ||||||
Greater than 3.0% and Less than 3.5% | 5 | 0.47 | ||||||
Greater than 2.5% and Less than 3.0% | 19 | 1.77 | ||||||
Greater than 2.0% and Less than 2.5% | 22 | 2.05 | ||||||
Greater than 1.5% and Less than 2.0% | 51 | 4.76 | ||||||
Greater than 1.0% and Less than 1.5% | 136 | 12.69 | ||||||
Greater than 0.5% and Less than 1.0% | 185 | 17.26 | ||||||
Between 0.5% and –0.5% | 361 | 33.67 | ||||||
Less than –0.5% and Greater than –1.0% | 113 | 10.54 | ||||||
Less than –1.0% and Greater than –1.5% | 66 | 6.16 | ||||||
Less than –1.5% and Greater than –2.0% | 36 | 3.36 | ||||||
Less than –2.0% and Greater than –2.5% | 27 | 2.52 | ||||||
Less than –2.5% and Greater than –3.0% | 13 | 1.21 | ||||||
Less than –3.0% and Greater than –3.5% | 10 | 0.93 | ||||||
Less than –3.5% and Greater than –4.0% | 2 | 0.19 | ||||||
Less than –4.0% and Greater than –4.5% | 2 | 0.19 | ||||||
Less than –4.5% and Greater than –5.0% | 4 | 0.37 | ||||||
Less than –5.0% and Greater than –5.5% | 3 | 0.28 | ||||||
Less than –5.5% and Greater than –6.0% | 1 | 0.09 | ||||||
Less than –6.0% | 4 | 0.37 | ||||||
|
|
|
| |||||
1,072 | 100.00 | % | ||||||
|
|
|
|
112 | 2012 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 he or she resigns, is removed, dies, retires or becomes incapacitated. The President, Treasurer and Secretary shall each hold office until their successors are chosen and qualified, and all other officers shall hold office until he or she resigns or is removed. Directors who are not interested persons (as defined in the 1940 Act) are referred to as Independent Directors.
The registered investment companies advised by BFA or its affiliates are organized into one complex of closed-end funds, two complexes of open-end funds and one complex of exchange-traded funds (“Exchange-Traded Fund Complex”) (each, a “BlackRock Fund Complex”). Each Fund is included in the BlackRock Fund Complex referred to as the Exchange-Traded Fund Complex. Each Director of iShares, Inc. also serves as a Trustee of iShares Trust, a Director of iShares MSCI Russia Capped Index Fund, Inc. and a Trustee of iShares U.S. ETF Trust and, as a result, oversees a total of 276 funds within the Exchange-Traded 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 Robert H. Silver 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-iShares (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 (55) | 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); President of Board of Directors, Hope & Heroes Children’s Cancer Fund (since 2002); President of the Board of Directors, Periwinkle Theatre for Youth (since 1983). | Director of BlackRock, Inc. (since 2007); Trustee of iShares Trust (since 2009); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). | |||
Michael Lathamb (47) | Director (since 2010); President (since 2007). | Chairman of iShares, BlackRock (since 2011); Global Chief Executive Officer of iShares, BlackRock (2010-2011); Managing Director, BlackRock (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, BGI (2003-2007). | Trustee of iShares Trust (since 2010); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). |
a | Robert S. Kapito is deemed to be an “interested person” (as defined in the 1940 Act) of the Trust 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 Trust due to his affiliations with BlackRock, Inc. and its affiliates. |
DIRECTORAND OFFICER INFORMATION | 113 |
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 | |||
Robert H. Silver (57) | Director (since 2007); Independent Chairman (since 2012). | President and Co-Founder of The Bravitas Group, Inc. (since 2006); Director and Vice Chairman of the YMCA of Greater NYC (2001-2011); Broadway Producer (2006-2011); 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); President and Chief Operating Officer of UBS Financial Services Inc. (formerly Pain Webber Inc.) (2004-2005) and various executive positions with UBS and its affiliates (1988-2005); CPA and Audit Manager of KPMG, LLP (formerly Peat Marwick Mitchell) (1977-1983). | Trustee of iShares Trust (since 2007); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Independent Chairman of iShares, Inc., iShares MSCI Russia Capped Index Fund, Inc. and iShares U.S. ETF Trust (since 2012). | |||
Cecilia H. Herbert (63) | Director (since 2005); Nominating and Governance Committee Chair and Equity Plus Committee Chair (since 2012). | Director (since 1998) and President (2007-2011) of the Board of Directors, Catholic Charities CYO; Trustee (since 2002) and Chair of the Finance Committee (2006-2009) and Investment Committee (since 2006), The Thacher School; Trustee of Pacific Select Funds (2004-2005); Member (since 1994) and Chair (1994-2005) of the Investment Committee, Archdiocese of San Francisco. | Trustee of iShares Trust (since 2005); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of Forward Funds (35 portfolios) (since 2009). | |||
Charles A. Hurty (69) | Director (since 2005); Audit Committee Chair (since 2006). | Retired; Partner, KPMG LLP (1968-2001). | Trustee of iShares Trust (since 2005); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of GMAM Absolute Return Strategy Fund (1 portfolio) (since 2002); Director of SkyBridge Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (1 portfolio) (since 2002). | |||
John E. Kerrigan (57) | Director (since 2005); Fixed Income Plus Committee Chair (since 2012). | Chief Investment Officer, Santa Clara University (since 2002). | Trustee of iShares Trust (since 2005); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). |
114 | 2012 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 | |||
John E. Martinez (51) | Director (since 2003); Securities Lending Committee Chair (since 2012). | Director of FirstREX Agreement Corp. (formerly EquityRock, Inc.) (since 2005). | Trustee of iShares Trust (since 2003); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). | |||
George G.C. Parker (73) | Director (since 2002). | Dean Witter Distinguished Professor of Finance, Emeritus, Stanford University Graduate School of Business (Professor since 1973; Emeritus since 2006). | Trustee of iShares Trust (since 2002); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of Tejon Ranch Company (since 1999); Director of Threshold Pharmaceuticals (since 2004); Director of Colony Financial, Inc. (since 2009); Director of First Republic Bank (since 2010). | |||
Madhav V. Rajan (48) | Director (since 2011); 15(c) Committee Chair (since 2012). | Robert K. Jaedicke Professor of Accounting and Senior Associate Dean for Academic Affairs and Head of MBA Program, Stanford University Graduate School of Business (since 2001); Professor of Law (by courtesy), Stanford Law School (since 2005); Visiting Professor, University of Chicago (Winter 2007-2008). | Trustee of iShares Trust (since 2011); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2011); Trustee of iShares U.S. ETF Trust (since 2011). |
DIRECTORAND OFFICER INFORMATION | 115 |
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 | ||
Edward B. Baer (44) | Vice President and Chief Legal Officer (since 2012). | Managing Director, BlackRock (since 2006). | ||
Eilleen M. Clavere (60) | Secretary (since 2007). | Director, BlackRock (since 2009); Director of Legal Administration of Intermediary Investor Business, BGI (2006-2009). | ||
Jack Gee (53) | Treasurer and Chief Financial Officer (since 2008). | Managing Director, BlackRock (since 2009); Senior Director of Fund Administration of Intermediary Investor Business, BGI (2009); Director of Fund Administration of Intermediary Investor Business, BGI (2004-2009). | ||
Amy Schioldager (50) | Executive Vice President (since 2007). | Managing Director, BlackRock (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008). | ||
Ira P. Shapiro (49) | Vice President (since 2007). | Managing Director, BlackRock (since 2009); Chief Legal Officer, Exchange-Traded Funds Complex (2007-2012); Associate General Counsel, BGI (2004-2009). | ||
Scott Radell (43) | Executive Vice President (since 2012). | Managing Director, BlackRock (since 2009); Head of Portfolio Solutions, BGI (2007-2009); Credit Portfolio Manager, BGI (2005-2007). |
116 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes:
NOTES | 117 |
Table of Contents
Notes:
118 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
For more information visit www.iShares.com
or call 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 BlackRock Investments, LLC (together with its affiliates, “BlackRock”).
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds. BlackRock is not affiliated with the company listed above.
A description of the policies that the 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 daily and monthly basis on the Funds’ website.
©2012 BlackRock. All rights reserved. iShares® and BlackRock® are registered trademarks of BlackRock. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.
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iS-AR-83-0812
Table of Contents
Item 1. Reports to Stockholders. | August 31, 2012 |
2012 Annual Report
iShares, Inc.
iShares MSCI Brazil Index Fund | EWZ | 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
Table of Contents
5 | ||||
24 | ||||
26 | ||||
26 | ||||
29 | ||||
32 | ||||
34 | ||||
36 | ||||
38 | ||||
40 | ||||
43 | ||||
53 | ||||
63 | ||||
71 | ||||
83 | ||||
84 | ||||
Board Review and Approval of Investment Advisory Contract (Unaudited) | 85 | |||
92 | ||||
99 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI BRAZIL INDEX FUND
Performance as of August 31, 2012
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(16.79)% | (17.32)% | (16.47)% | 0.64% | 0.75% | 1.23% | 23.68% | 23.92% | 24.87% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(16.79)% | (17.32)% | (16.47)% | 3.25% | 3.80% | 6.32% | 737.32% | 753.88% | 821.77% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
“Average Annual Total Returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 5 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI BRAZIL INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector* | Percentage of Net Assets |
Financial | 24.56 | % | ||
Consumer Non-Cyclical | 20.11 | |||
Basic Materials | 18.24 | |||
Energy | 17.28 | |||
Utilities | 7.78 | |||
Consumer Cyclical | 3.30 | |||
Communications | 3.17 | |||
Diversified | 2.67 | |||
Industrial | 2.10 | |||
Technology | 0.45 | |||
Short-Term and Other Net Assets | 0.34 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
Petroleo Brasileiro SA (Preferred) | 9.45 | % | ||
Itau Unibanco Holding SA (Preferred) | 7.83 | |||
Vale SA Class A (Preferred) | 7.42 | |||
Petroleo Brasileiro SA | 6.91 | |||
Banco Bradesco SA (Preferred) | 6.74 | |||
Companhia de Bebidas das Americas (Preferred) | 6.16 | |||
Vale SA | 3.61 | |||
Itausa — Investimentos Itau SA (Preferred) | 2.67 | |||
BRF — Brasil Foods SA | 2.34 | |||
BM&F Bovespa SA | 2.11 | |||
|
| |||
TOTAL | 55.24 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI Brazil Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Brazil IndexSM (the “Index”). The Index consists of stocks traded primarily on the BM&FBOVESPA (the Brazilian exchange). 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, 2012 (the “reporting period”), the total return for the Fund was (16.79)%, net of fees, while the total return for the Index was (16.47)%.
The Brazilian equity market, as represented by the Index, declined for the reporting period, lagging broader international markets. Economic activity slowed dramatically in Brazil due to reduced demand from Europe, China, and the U.S. for Brazil’s exports, and due to earlier government efforts to slow an overheating economy.
As the sovereign debt crisis in Europe continued, economic activity in China cooled, and U.S. economic conditions remained tepid, Brazil’s economy, which relies heavily on exports to these markets, softened. For the second quarter of 2012, economic activity, as measured by annual gross domestic product (“GDP”) growth, expanded at a slight 0.5% pace, slowing for the ninth consecutive quarter. Industrial output fell 2.5% during the second quarter of 2012 amid declines in manufacturing, mining, and civil construction. Investment also shrank, largely due to a bleak international environment sapping enthusiasm for expansion of production capacity. In an effort to spur growth, the Brazilian government reduced payroll taxes, cut levies on automobiles and appliances, and implemented policies to weaken Brazil’s currency.
Agriculture was one bright spot, representing the largest contributor to Brazil’s GDP in the second quarter of 2012. Brazil also began to receive attention from foreign investors in anticipation of the 2014 World Cup and the 2016 Summer Olympics.
Sector performance was mostly negative during the reporting period. The materials and energy sectors, which represented 21% and 20% of the Index on average, respectively, both declined sharply as demand and prices for commodities fell, accounting for the bulk of Index declines. The financials and telecommunication services sectors also detracted from Index returns significantly. On the positive side, the information technology sector delivered solid gains. At only 3% of the Index, though, its impact on Index performance was modest. The consumer staples sector also added moderately to Index results.
6 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI CANADA INDEX FUND
Performance as of August 31, 2012
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(5.87)% | (5.76)% | (5.73)% | 0.27% | 0.19% | 0.49% | 12.83% | 12.69% | 13.15% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(5.87)% | (5.76)% | (5.73)% | 1.34% | 0.93% | 2.49% | 234.48% | 230.24% | 243.98% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
“Average Annual Total Returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
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 8/31/12
Sector* | Percentage of Net Assets |
Financial | 33.20 | % | ||
Energy | 26.53 | |||
Basic Materials | 19.61 | |||
Industrial | 6.26 | |||
Communications | 4.64 | |||
Consumer Non-Cyclical | 3.70 | |||
Consumer Cyclical | 3.43 | |||
Utilities | 1.11 | |||
Technology | 0.99 | |||
Diversified | 0.30 | |||
Short-Term and Other Net Assets | 0.23 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
Royal Bank of Canada | 6.60 | % | ||
Toronto-Dominion Bank (The) | 6.10 | |||
Bank of Nova Scotia | 4.78 | |||
Suncor Energy Inc. | 3.99 | |||
Canadian National Railway Co. | 3.29 | |||
Barrick Gold Corp. | 3.16 | |||
Bank of Montreal | 3.08 | |||
Potash Corp. of Saskatchewan Inc. | 2.88 | |||
Canadian Natural Resources Ltd. | 2.74 | |||
Goldcorp Inc. | 2.72 | |||
|
| |||
TOTAL | 39.34 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI Canada Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Canada IndexSM (the “Index”). The Index consists of stocks traded primarily on the Toronto Stock Exchange. 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, 2012 (the “reporting period”), the total return for the Fund was (5.87)%, net of fees, while the total return for the Index was (5.73)%.
Canada’s economy grew at an annual rate of 1.8% in the second quarter of 2012 compared to the second quarter of 2011, matching the annual growth rate in the first quarter of 2012. Growth was somewhat muted by a rail strike as well as weakening global demand for Canadian exports. Confidence in the Canadian economy was evident, as foreign investors bid up the value of Canadian government securities, resulting in lower interest rates, with the 10-year bond averaging 1.75% in June 2012. Interest rates fell further in July 2012, but reversed course in August 2012 as global economic news became more favorable and demand for other currencies strengthened. Canada’s central bank kept its target interest rates unchanged throughout the reporting period at 1.0%.
Inflation was modest during the reporting period. In August 2012, the Canadian inflation rate was 1.2% compared to August 2011. Consumers pulled back as demand for household credit slowed significantly as policymakers warned about the dangers associated with too much debt. The unemployment rate was 7.3% as the reporting period came to a close, with the economy creating about 20,000 jobs per month during the period. Consumer spending advanced at an annual rate of 1.1% in the second quarter of 2012, up from 0.7% in the first quarter of 2012 but down from 2.8% in the fourth quarter of 2011.
Canadian exports expanded at a rate of 0.8% during the second quarter of 2012 compared to the second quarter of 2011, down from 4.0% in the first quarter of 2012 and 7.2% in the fourth quarter of 2011. As with much of the world, Canada’s economy depended in part on Europe’s fortunes, which continued to slide downward during the reporting period. Other trading partners, such as China and the U.S., were also experiencing slowing economies.
8 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI CANADA INDEX FUND
The Index posted a decline for the reporting period. Three sectors which contributed negatively to Index performance were materials, information technology and energy, which together represented on average, 49% of the Index. On a positive note, the financials and industrials sectors contributed modestly to Index performance.
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, 2012
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||
Year Ended 8/31/12 | Inception to 8/31/12 | Inception to 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(8.68)% | (9.49)% | (7.55)% | 5.95% | 5.88% | 6.80% | 32.00% | 31.59% | 37.11% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
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 periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (11/16/07), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
10 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI CHILE INVESTABLE MARKET INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector* | Percentage of Net Assets |
Utilities | 23.43 | % | ||
Financial | 17.09 | |||
Basic Materials | 16.00 | |||
Consumer Cyclical | 13.80 | |||
Consumer Non-Cyclical | 12.02 | |||
Diversified | 8.52 | |||
Industrial | 3.92 | |||
Communications | 3.51 | |||
Technology | 1.59 | |||
Short-Term and Other Net Assets | 0.12 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
Empresas Copec SA | 8.52 | % | ||
LATAM Airlines Group SA | 8.43 | |||
Sociedad Quimica y Minera de Chile SA Series B (Preferred) | 7.15 | |||
Cencosud SA | 6.87 | |||
Empresa Nacional de Electricidad SA | 6.75 | |||
Banco Santander (Chile) SA | 6.06 | |||
Enersis SA | 5.35 | |||
S.A.C.I. Falabella SA | 4.76 | |||
Empresas CMPC SA | 4.70 | |||
Banco de Chile | 4.13 | |||
|
| |||
TOTAL | 62.72 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI Chile Investable Market Index Fund (the “Fund”) seeks 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, 2012 (the “reporting period”), the total return for the Fund was (8.68)%, net of fees, while the total return for the Index was (7.55)%.
The Chilean equity market, as represented by the Index, declined during the reporting period. During the reporting period, the economy accelerated. Economic activity, as measured by annual gross domestic product (GDP) growth, expanded 5.5% in the second quarter of 2012, up from 3.7% in the second quarter of 2011. Largely driving the growth, domestic demand rose 7.1% in the second quarter of 2012.
As the world’s largest producer of copper, the Chilean economy relies heavily on mining and exports. Although export levels continued to rise in the second quarter of 2012, the country’s current account deficit expanded as copper prices fell and import demand grew amid strong domestic demand. Key sectors of the economy, notably services, retail sales, and construction, all remained solid. In an environment of strong local growth and declining inflation levels, Chile’s central bank left its key interest rate unchanged at 5.00% after cutting it once, from 5.25% to 5.00%, in January 2012. Despite the country’s overall economic health, the Chilean stock market softened largely due to overall macroeconomic concerns as investors braced for the headwind created by economic slowdown in China, Chile’s largest trading partner, as well as poor economic conditions in Europe.
Sector performance was mostly negative during the reporting period. The industrials sector was the most significant detractor from Index performance. Materials stocks also declined, reflecting the price decline for copper and other commodities, as well as investor concern about the outlook for the sector. Utilities, the largest sector at 23% of the Index on average, also hurt Index results. On the positive side, the health care sector delivered positive absolute returns. However, at less than 1% of the Index, the health care sector’s contribution to Index returns was negligible.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 11 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI ISRAEL CAPPED INVESTABLE MARKET INDEX FUND
Performance as of August 31, 2012
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||
Year Ended 8/31/12 | Inception to 8/31/12 | Inception to 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(16.52)% | (16.69)% | (16.58)% | (4.04)% | (4.12)% | (3.44)% | (16.71)% | (17.01)% | (14.37)% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
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 periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (3/28/08), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
12 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI ISRAEL CAPPED INVESTABLE MARKET INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector* | Percentage of Net Assets |
Financial | 29.33 | % | ||
Consumer Non-Cyclical | 27.03 | |||
Communications | 12.17 | |||
Technology | 11.39 | |||
Basic Materials | 11.26 | |||
Industrial | 3.38 | |||
Energy | 3.13 | |||
Consumer Cyclical | 1.04 | |||
Diversified | 0.90 | |||
Short-Term and Other Net Assets | 0.37 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
Teva Pharmaceutical Industries Ltd. | 22.88 | % | ||
Israel Chemicals Ltd. | 10.25 | |||
Mellanox Technologies Ltd. | 9.35 | |||
Bank Hapoalim Ltd. | 6.66 | |||
Bezeq The Israel Telecommunication Corp. Ltd. | 4.87 | |||
Bank Leumi le-Israel | 4.74 | |||
NICE Systems Ltd. | 4.35 | |||
Israel Corp. Ltd. (The) | 3.14 | |||
Mizrahi Tefahot Bank Ltd. | 2.44 | |||
Israel Discount Bank Ltd. Class A | 2.12 | |||
|
| |||
TOTAL | 70.80 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI Israel Capped Investable Market Index Fund (the “Fund”) seeks 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, 2012 (the “reporting period”), the total return for the Fund was (16.52)%, net of fees, while the total return for the Index was (16.58)%.
The Israeli equity market, as represented by the Index, delivered negative results for the reporting period, lagging broader international markets. Israel enjoyed a relatively healthy economic environment, as measured by annual gross domestic product (“GDP”) growth, although it slowed during the course of the reporting period, from 4.9% in the third quarter of 2011 to 3.1% in the second quarter of 2012.
As major economies worldwide struggled with sluggish economic conditions and debt during the reporting period, Israel’s economy remained relatively solid. Although the global financial crisis of 2008-2009 had caused a brief recession in Israel, the country rebounded much better than most advanced economies. Key to its recovery was a prudent fiscal policy and a resilient financials sector. As a net lender of debt, Israel’s government debt accounts for approximately 74% of GDP, significantly lower than most advanced countries.
Bolstering Israel’s economy during the reporting period, export levels and domestic consumption remained strong, and investment increased. For the second quarter of 2012, export levels of goods and services expanded at an annual rate of 10.3%, and private consumption levels grew at an annual rate of 5.4%. After peaking at 4.2% in June 2011, inflation steadily dropped during the reporting period, ending the reporting period at 1.9%. The Bank of Israel cut its benchmark interest rate four times during the reporting period, from 3.25% to 2.25% cumulatively.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 13 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI MEXICO INVESTABLE MARKET INDEX FUND
Performance as of August 31, 2012
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
6.13% | 6.20% | 5.58% | 2.71% | 2.88% | 2.22% | 18.20% | 18.23% | 17.52% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Ten Years Ended 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
6.13% | 6.20% | 5.58% | 14.29% | 15.27% | 11.60% | 432.10% | 433.60% | 402.30% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
Index performance reflects the performance of the MSCI Mexico IndexSM through November 30, 2007 and the MSCI Mexico Investable Market IndexSM thereafter.
“Average Annual Total Returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
14 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI MEXICO INVESTABLE MARKET INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector* | Percentage of Net Assets |
Communications | 29.15 | % | ||
Consumer Non-Cyclical | 23.91 | |||
Basic Materials | 13.20 | |||
Consumer Cyclical | 10.34 | |||
Industrial | 9.69 | |||
Financial | 9.50 | |||
Diversified | 4.10 | |||
Short-Term and Other Net Assets | 0.11 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
America Movil SAB de CV Series L | 23.36 | % | ||
Fomento Economico Mexicano SAB de CV BD Units | 9.41 | |||
Wal-Mart de Mexico SAB de CV Series V | 8.24 | |||
Grupo Mexico SAB de CV Series B | 6.12 | |||
Grupo Televisa SAB CPO | 4.98 | |||
Grupo Financiero Banorte SAB de CV Series O | 4.76 | |||
Cemex SAB de CV CPO | 4.52 | |||
Grupo Modelo SAB de CV Series C | 3.63 | |||
Grupo Financiero Inbursa SAB de CV Series O | 3.49 | |||
Coca-Cola FEMSA SAB de CV Series L | 3.27 | |||
|
| |||
TOTAL | 71.78 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI Mexico Investable Market Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Mexico Investable Market IndexSM (the “Index”). The Index consists of stocks traded primarily on the Mexican Stock Exchange. 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, 2012 (the “reporting period”), the total return for the Fund was 6.13%, net of fees, while the total return for the Index was 5.58%.
The Mexican equity market, as represented by the Index, delivered positive results for the reporting period, outpacing broader international markets. Unlike many countries, Mexico enjoyed steady economic expansion during the reporting period, with an annual gross domestic product (GDP) growth rate of 4.1% in the second quarter of 2012.
As the largest exporter in Latin America, Mexico exports more than 80% of its goods to the U.S. and Canada. During the reporting period, Mexico’s export levels remained strong, reaching an all-time high in May 2012. Manufacturing, particularly automobile production, was the main driver of growth. This was in part due to a recovery for light vehicle sales in the U.S., which provided the Mexican economy a buffer from overall global economic malaise for the reporting period. In July 2012, automobile production climbed 17.7%, with 68% of exported vehicles going to the U.S. Construction also expanded during the reporting period.
Unemployment levels declined to 4.75% by July 2012. Consumer confidence was healthy, rising to 98.9 in July 2012, its highest level since early 2008, though it decreased to 97.6 in August 2012 (a consumer confidence level of 100 is considered neutral; levels below 100 are pessimistic, and levels above 100 are optimistic). Accordingly, private consumption represented an important part of Mexico’s economic expansion. As household consumption grew during the reporting period, so too did demand for imports, leading to an uneven balance of trade throughout the reporting period. Given the steady economic environment, the benchmark interest rate was left unchanged at 4.5% throughout the reporting period.
Sector performance was mostly positive during the reporting period. The consumer staples sector, which represented 28% of the Index on average, gained ground and was the most significant contributor to Index gains. The financials and industrials sectors also helped Index performance. On the negative side, consumer discretionary stocks declined for the reporting period, detracting meaningfully from Index results. The telecommunication services sector, which accounted for approximately 29% of the Index throughout the reporting period, also detracted modestly from Index results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 15 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI SOUTH AFRICA INDEX FUND
Performance as of August 31, 2012
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Inception to 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(3.17)% | (2.63)% | (2.54)% | 4.57% | 4.52% | 5.50% | 16.64% | 16.66% | 17.82% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Inception to 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(3.17)% | (2.63)% | (2.54)% | 25.04% | 24.77% | 30.67% | 336.65% | 337.56% | 380.75% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
Total returns for the period since inception are calculated from the inception date of the Fund (2/3/03). “Average Annual Total Returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
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 calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
16 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI SOUTH AFRICA INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector* | Percentage of Net Assets |
Basic Materials | 25.55 | % | ||
Financial | 23.98 | |||
Communications | 21.54 | |||
Consumer Non-Cyclical | 9.72 | |||
Consumer Cyclical | 8.92 | |||
Diversified | 7.56 | |||
Industrial | 1.11 | |||
Energy | 0.80 | |||
Technology | 0.55 | |||
Short-Term and Other Net Assets | 0.27 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
MTN Group Ltd. | 11.54 | % | ||
Sasol Ltd. | 8.60 | |||
Naspers Ltd. Class N | 8.28 | |||
Standard Bank Group Ltd. | 5.74 | |||
AngloGold Ashanti Ltd. | 4.36 | |||
FirstRand Ltd. | 3.69 | |||
Gold Fields Ltd. | 3.17 | |||
Shoprite Holdings Ltd. | 3.13 | |||
Impala Platinum Holdings Ltd. | 3.10 | |||
Sanlam Ltd. | 2.86 | |||
|
| |||
TOTAL | 54.47 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI South Africa Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI South Africa IndexSM (the “Index”). The Index consists of stocks traded primarily on the Johannesburg Stock Exchange. 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, 2012 (the “reporting period”), the total return for the Fund was (3.17)%, net of fees, while the total return for the Index was (2.54)%.
The South African equity market, as represented by the Index, declined only modestly for the reporting period, despite global economic conditions. South Africa is the world’s largest producer and exporter of gold and platinum, and is a key exporter of coal and diamonds. During the reporting period, South Africa’s economy, as measured by annual gross domestic product (“GDP”) growth, remained healthy. For the second quarter of 2012, annual GDP expanded by 3.0%, up from 2.1% in the first quarter of 2012.
Underlying the apparent steady growth, the country’s mining industry experienced turbulence during the reporting period, as it was plagued by strikes and protests, as well as global economic sluggishness, but rebounded sharply in the second quarter of 2012. Retail sales also remained healthy, climbing by 8.3% annually in the second quarter of 2012. However, ongoing clashes between striking mine workers and police caused prolonged shutdowns and led to investor concern about further production slowdowns in the mining industry, which would crimp exports. Meanwhile, manufacturing and construction activity was poor during the reporting period. The softer outlook, combined with an uncertain global economy, led the South Africa Reserve Bank to reduce its benchmark interest rate in July 2012 from 5.50% to 5.00%, its first interest rate cut since 2010.
Sector performance was varied during the reporting period. The consumer discretionary sector, buoyed by healthy consumer confidence levels, delivered gains and made the most significant sector contribution to Index returns. The financials sector, which comprised 25% of the Index on average, also contributed meaningfully to Index results, as did the traditionally economically defensive consumer staples and health care sectors. On the negative side, the materials sector declined, enduring turbulence in the mining industry and a decline in commodity prices. Because the materials sector represented approximately 22% of the Index throughout the reporting period, the sector’s negative performance had a significant impact on Index results. The energy sector also declined during the reporting period as oil and natural gas prices fell.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 17 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI TURKEY INVESTABLE MARKET INDEX FUND
Performance as of August 31, 2012
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||
Year Ended 8/31/12 | Inception to 8/31/12 | Inception to 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
20.37% | 15.59% | 20.63% | 4.81% | 4.67% | 5.15% | 23.17% | 22.43% | 24.94% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
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 periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (3/28/08), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
18 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI TURKEY INVESTABLE MARKET INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector* | Percentage of Net Assets |
Financial | 44.57 | % | ||
Consumer Non-Cyclical | 13.40 | |||
Diversified | 9.77 | |||
Communications | 9.69 | |||
Consumer Cyclical | 7.25 | |||
Industrial | 5.68 | |||
Basic Materials | 5.41 | |||
Energy | 3.92 | |||
Utilities | 0.31 | |||
Short-Term and Other Assets, less Liabilities | (0.00 | )a | ||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
Turkiye Garanti Bankasi AS | 13.58 | % | ||
Akbank TAS | 9.74 | |||
Turkiye Is Bankasi AS Class C | 6.58 | |||
Turkcell Iletisim Hizmetleri AS | 6.27 | |||
BIM Birlesik Magazalar AS | 5.99 | |||
Haci Omer Sabanci Holding AS | 4.81 | |||
Turkiye Petrol Rafinerileri AS | 3.93 | |||
Anadolu Efes Biracilik ve Malt Sanayii AS | 3.88 | |||
Turkiye Halk Bankasi AS | 3.87 | |||
KOC Holding AS | 3.53 | |||
|
| |||
TOTAL | 62.18 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
a | Rounds to less than 0.01%. |
The iShares MSCI Turkey Investable Market Index Fund (the “Fund”) seeks 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, 2012 (the “reporting period”), the total return for the Fund was 20.37%, net of fees, while the total return for the Index was 20.63%.
The Turkish equity market, as represented by the Index, delivered positive results for the reporting period, outpacing broader international markets. Turkey enjoyed a healthy economic environment, as measured by annual gross domestic product (GDP) growth, although it slowed during the course of the reporting period, from 8.4% in the third quarter of 2011 to 3.2% in the second quarter of 2012.
After two years of rapid expansion, the Turkish economy softened during the reporting period. Turkey’s largest trading partner, Europe, accounts for roughly 60% of Turkey’s exports. During the reporting period, the ongoing sovereign debt crisis in Europe worsened, spreading to include several peripheral European markets. As a result, economic activity throughout Europe was hampered, in turn, reducing European demand for exports. Export trade with the Middle East, Turkey’s second-largest trading partner, was threatened when conflict arose in Syria.
As demand slowed, though, Turkey focused on the markets of Northern Africa, as well as North America and South America. As a result, overall export levels did not experience the sharp decline that they might otherwise have experienced. During the first half of 2012, for example, while Turkish automobile exports — which accounted for 13% of all Turkish exports for the first eight months of 2012 — from Turkey to Europe declined by 10%, automobile exports to North African countries climbed sharply, with exports to Morocco up 56%, to Tunisia up 68%, to Egypt up 30%, and to Libya up 328%. Export of gold, to Iran in particular, represented a critical component of Turkey’s export market in 2012. Iran became Turkey’s largest export market, representing 86% of Turkey’s total exports, as it began acquiring large amounts of gold. Turkey continued to struggle with a trade deficit throughout the reporting period, although the deficit did narrow late in the reporting period.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 19 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI TURKEY INVESTABLE MARKET INDEX FUND
Sector performance was mostly positive during the reporting period. The financials sector, which represented 46% of the Index on average, delivered solid total returns and was the most significant contributor to Index gains. The consumer staples and industrials sectors also added significantly to Index performance. The only negative sector returns came from utilities, though at less than 1% of the Index, the impact on Index results was negligible.
20 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI USA INDEX FUND
Performance as of August 31, 2012
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||
Year Ended 8/31/12 | Inception to 8/31/12 | Inception to 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
17.44% | 17.57% | 17.69% | 10.66% | 10.69% | 10.88% | 26.55% | 26.63% | 27.07% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
Total returns for the period since inception are calculated from the inception date of the Fund (5/5/10). “Average Annual Total Returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (5/7/10), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 21 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI USA INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector* | Percentage of Net Assets |
Consumer Non-Cyclical | 21.26 | % | ||
Technology | 15.24 | |||
Financial | 14.69 | |||
Communications | 11.27 | |||
Energy | 11.23 | |||
Industrial | 10.02 | |||
Consumer Cyclical | 9.37 | |||
Utilities | 3.39 | |||
Basic Materials | 3.24 | |||
Diversified | 0.03 | |||
Short-Term and Other Net Assets | 0.26 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
Apple Inc. | 4.69 | % | ||
Exxon Mobil Corp. | 3.08 | |||
Microsoft Corp. | 1.76 | |||
Chevron Corp. | 1.67 | |||
General Electric Co. | 1.66 | |||
AT&T Inc. | 1.62 | |||
International Business Machines Corp. | 1.61 | |||
Johnson & Johnson | 1.40 | |||
Procter & Gamble Co. (The) | 1.39 | |||
Pfizer Inc. | 1.35 | |||
|
| |||
TOTAL | 20.23 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI USA Index Fund (the “Fund”) seeks 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 12-month period ended August 31, 2012 (the “reporting period”), the total return for the Fund was 17.44%, net of fees, while the total return for the Index was 17.69%.
Although U.S. stocks as a group performed very well, the U.S. economy weakened as the reporting period came to a close. During the second quarter of 2012, the nation’s economy posted a 1.7% growth in gross domestic product (GDP), down from 2.0% in the first quarter and 3.0% in the fourth quarter of 2011. Although job growth was significant in certain industries such as health care, the overall unemployment rate stayed above 8% for the reporting period. In addition, the number of U.S. jobs created each month, particularly the 96,000 added in August 2012, was considered a sign that the economy was lagging.
In this environment, consumers and businesses were reluctant to spend money. The growth rate in consumer spending declined from 2.4% in the first quarter of 2012 compared to the first quarter of 2011, to 1.5% in the second quarter of 2012 compared to the second quarter of 2011. Despite record low interest rates, savings on disposable personal income rose to 4.0% in the second quarter of 2012, up from 3.6% in the first quarter of 2012. Business investment expanded 5.3% in the second quarter of 2012 compared to the second quarter of 2011, down from 7.5% in the first quarter of 2012 compared to the first quarter of 2011. Many economists blamed investor skittishness on the uncertainty surrounding U.S. tax laws as well as the continuing recession in Europe.
Still, there have been some encouraging signs. During the second quarter of 2012, home prices rose by their largest percentage in nearly a decade. Automakers continued selling cars at a brisk pace, keeping factories running at high capacity in the normally slow summer months. In addition, corporations took advantage of ultra-low intermediate- and long-term interest rates by selling nearly $600 billion of corporate bonds to investors over the first seven months of 2012, 6.5% more than same period last year.
22 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI USA INDEX FUND
Within the Index, all sectors posted positive performance for the reporting period. The top three positive contributors to performance were the information technology, consumer discretionary and health care sectors, while the weakest performers were the materials, utilities and telecommunication services sectors.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 23 |
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, 2012 to August 31, 2012.
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 (3/1/12) | Ending Account Value (8/31/12) | Annualized Expense Ratio | Expenses Paid During Period a | ||||||||||||
Brazil | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 777.10 | 0.62 | % | $ | 2.77 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.00 | 0.62 | 3.15 | ||||||||||||
Canada | ||||||||||||||||
Actual | 1,000.00 | 952.20 | 0.53 | 2.60 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.50 | 0.53 | 2.69 | ||||||||||||
Chile Investable Market | ||||||||||||||||
Actual | 1,000.00 | 904.30 | 0.62 | 2.97 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.00 | 0.62 | 3.15 | ||||||||||||
Israel Capped Investable Market | ||||||||||||||||
Actual | 1,000.00 | 928.80 | 0.62 | 3.01 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.00 | 0.62 | 3.15 |
24 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Shareholder Expenses (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Index Fund | Beginning Account Value (3/1/12) | Ending Account Value (8/31/12) | Annualized Expense Ratio | Expenses Paid During Period a | ||||||||||||
Mexico Investable Market | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,030.90 | 0.53 | % | $ | 2.71 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.50 | 0.53 | 2.69 | ||||||||||||
South Africa | ||||||||||||||||
Actual | 1,000.00 | 926.10 | 0.62 | 3.00 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.00 | 0.62 | 3.15 | ||||||||||||
Turkey Investable Market | ||||||||||||||||
Actual | 1,000.00 | 1,093.90 | 0.62 | 3.26 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.00 | 0.62 | 3.15 | ||||||||||||
USA | ||||||||||||||||
Actual | 1,000.00 | 1,037.30 | 0.15 | 0.77 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,024.40 | 0.15 | 0.76 |
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 (366 days). |
SHAREHOLDER EXPENSES | 25 |
Table of Contents
iSHARES® MSCI BRAZIL INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 46.83% |
| |||||||
AEROSPACE & DEFENSE — 0.88% |
| |||||||
Embraer SA | 9,362,432 | $ | 64,654,490 | |||||
|
| |||||||
64,654,490 | ||||||||
AGRICULTURE — 1.22% |
| |||||||
Souza Cruz SA | 6,724,800 | 90,258,870 | ||||||
|
| |||||||
90,258,870 | ||||||||
BANKS — 2.81% |
| |||||||
Banco do Brasil SA | 9,475,897 | 108,346,714 | ||||||
Banco Santander (Brasil) SA Units | 12,821,741 | 98,662,832 | ||||||
|
| |||||||
207,009,546 | ||||||||
BUILDING MATERIALS — 0.39% |
| |||||||
Duratex SA | 4,763,400 | 28,688,953 | ||||||
|
| |||||||
28,688,953 | ||||||||
CHEMICALS — 1.54% |
| |||||||
Ultrapar Participacoes SA | 5,312,900 | 113,737,414 | ||||||
|
| |||||||
113,737,414 | ||||||||
COMMERCIAL SERVICES — 6.63% |
| |||||||
Anhanguera Educacional Participacoes SA | 1,951,600 | 29,081,949 | ||||||
CCR SA | 14,493,900 | 130,404,348 | ||||||
Cielo SA | 4,920,260 | 145,644,356 | ||||||
EcoRodovias Infraestrutura e Logistica SA | 2,788,000 | 23,172,594 | ||||||
Localiza Rent A Car SA | 1,950,900 | 34,450,856 | ||||||
Multiplus SA | 836,100 | 17,816,564 | ||||||
Obrascon Huarte Lain Brasil SA | 1,672,200 | 16,208,124 | ||||||
Redecard SA | 5,574,000 | 92,244,710 | ||||||
|
| |||||||
489,023,501 | ||||||||
COSMETICS & PERSONAL CARE — 0.95% |
| |||||||
Natura Cosmeticos SA | 2,787,000 | 69,974,005 | ||||||
|
| |||||||
69,974,005 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 2.69% |
| |||||||
BM&F Bovespa SA | 29,263,500 | 155,173,198 | ||||||
CETIP SA — Mercados Organizados | 3,347,725 | 43,099,503 | ||||||
|
| |||||||
198,272,701 | ||||||||
ELECTRIC — 2.23% |
| |||||||
Centrais Eletricas Brasileiras SA | 4,443,099 | 28,535,071 | ||||||
CPFL Energia SA | 3,901,800 | 41,379,520 | ||||||
EDP Energias do Brasil SA | 3,623,100 | 23,179,405 |
Security | Shares | Value | ||||||
Light SA | 1,114,800 | $ | 13,538,389 | |||||
MPX Energia SAa | 2,508,300 | 15,589,493 | ||||||
Tractebel Energia SA | 2,508,300 | 41,769,944 | ||||||
|
| |||||||
163,991,822 | ||||||||
ENGINEERING & CONSTRUCTION — 0.39% |
| |||||||
Multiplan Empreendimentos Imobiliarios SA | 1,114,800 | 28,539,496 | ||||||
|
| |||||||
28,539,496 | ||||||||
FOOD — 3.06% |
| |||||||
BRF — Brasil Foods SA | 10,723,550 | 172,492,954 | ||||||
Cosan SA Industria e Comercio | 1,950,990 | 32,527,727 | ||||||
JBS SAa | 7,285,222 | 20,734,835 | ||||||
|
| |||||||
225,755,516 | ||||||||
FOREST PRODUCTS & PAPER — 0.44% |
| |||||||
Fibria Celulose SAa | 4,180,526 | 32,560,798 | ||||||
|
| |||||||
32,560,798 | ||||||||
HEALTH CARE — SERVICES — 0.60% |
| |||||||
Amil Participacoes SA | 1,950,900 | 19,823,677 | ||||||
Diagnosticos da America SA | 3,903,300 | 24,663,973 | ||||||
|
| |||||||
44,487,650 | ||||||||
HOME BUILDERS — 0.42% |
| |||||||
MRV Engenharia e Participacoes SA | 5,276,747 | 30,661,510 | ||||||
|
| |||||||
30,661,510 | ||||||||
INSURANCE — 0.78% |
| |||||||
Odontoprev SA | 4,180,500 | 22,683,125 | ||||||
Porto Seguro SA | 2,231,400 | 20,626,664 | ||||||
Sul America SA Units | 1,986,237 | 14,127,923 | ||||||
|
| |||||||
57,437,712 | ||||||||
IRON & STEEL — 5.43% |
| |||||||
Companhia Siderurgica Nacional SA | 12,375,654 | 61,045,006 | ||||||
MMX Mineracao e Metalicos SAa | 3,362,400 | 9,039,155 | ||||||
Vale SA | 15,971,400 | 266,124,349 | ||||||
Vale SA SP ADR | 3,916,417 | 64,111,746 | ||||||
|
| |||||||
400,320,256 | ||||||||
OIL & GAS — 7.82% |
| |||||||
OGX Petroleo e Gas Participacoes SAa | 21,575,400 | 67,047,314 | ||||||
Petroleo Brasileiro SA | 48,493,844 | 509,504,700 | ||||||
|
| |||||||
576,552,014 | ||||||||
PHARMACEUTICALS — 0.49% |
| |||||||
Hypermarcas SAa | 5,575,500 | 35,835,232 | ||||||
|
| |||||||
35,835,232 |
26 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI BRAZIL INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
REAL ESTATE — 2.65% |
| |||||||
BR Malls Participacoes SA | 6,688,800 | $ | 83,473,901 | |||||
BR Properties SA | 2,787,000 | 33,955,951 | ||||||
Cyrela Brazil Realty SA | 5,016,600 | 40,854,371 | ||||||
PDG Realty SA Empreendimentos e Participacoes | 18,951,600 | 36,925,379 | ||||||
|
| |||||||
195,209,602 | ||||||||
RETAIL — 1.31% | ||||||||
Lojas Renner SA | 1,950,900 | 64,398,080 | ||||||
Raia Drogasil SA | 3,065,700 | 32,467,114 | ||||||
|
| |||||||
96,865,194 | ||||||||
SOFTWARE — 0.45% | ||||||||
Totvs SA | 1,708,600 | 33,248,296 | ||||||
|
| |||||||
33,248,296 | ||||||||
TELECOMMUNICATIONS — 0.99% | ||||||||
Oi SA | 3,901,873 | �� | 17,610,683 | |||||
TIM Participacoes SA | 13,936,590 | 55,476,881 | ||||||
|
| |||||||
73,087,564 | ||||||||
TEXTILES — 0.66% | ||||||||
Companhia Hering SA | 2,229,600 | 48,775,593 | ||||||
|
| |||||||
48,775,593 | ||||||||
TRANSPORTATION — 0.45% | ||||||||
ALL — America Latina Logistica SA | 7,443,900 | 32,789,438 | ||||||
|
| |||||||
32,789,438 | ||||||||
WATER — 1.55% | ||||||||
Companhia de Saneamento Basico do Estado de Sao Paulo | 2,229,600 | 94,361,802 | ||||||
Companhia de Saneamento de Minas Gerais SA | 836,100 | 20,002,392 | ||||||
|
| |||||||
114,364,194 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $2,881,985,051) | 3,452,101,367 | |||||||
PREFERRED STOCKS — 52.83% |
| |||||||
AUTO PARTS & EQUIPMENT — 0.26% |
| |||||||
Marcopolo SA | 3,362,400 | 18,874,420 | ||||||
|
| |||||||
18,874,420 | ||||||||
BANKS — 14.94% | ||||||||
Banco Bradesco SA | 30,514,915 | 496,715,925 |
Security | Shares | Value | ||||||
Banco do Estado do Rio Grande do Sul SA Class B | 3,362,410 | $ | 27,449,261 | |||||
Itau Unibanco Holding SA | 36,915,300 | 577,228,338 | ||||||
|
| |||||||
1,101,393,524 | ||||||||
BEVERAGES — 6.16% | ||||||||
Companhia de Bebidas das Americas | 11,984,132 | 454,289,224 | ||||||
|
| |||||||
454,289,224 | ||||||||
CHEMICALS — 0.22% | ||||||||
Braskem SA Class A | 2,508,336 | 15,837,173 | ||||||
|
| |||||||
15,837,173 | ||||||||
ELECTRIC — 4.01% | ||||||||
AES Tiete SA | 1,672,700 | 22,896,180 | ||||||
Centrais Eletricas Brasileiras SA Class B | 3,901,851 | 35,702,331 | ||||||
Companhia de Transmissao de Energia Eletrica Paulista | 617,080 | 13,727,770 | ||||||
Companhia Energetica de Minas Gerais | 8,016,193 | 137,010,352 | ||||||
Companhia Energetica de Sao Paulo Class B | 2,787,070 | 43,236,498 | ||||||
Companhia Paranaense de Energia Class B | 1,672,200 | 30,015,961 | ||||||
Eletropaulo Metropolitana Eletricidade de Sao Paulo SA | 1,393,520 | 12,785,218 | ||||||
|
| |||||||
295,374,310 | ||||||||
FOOD — 0.98% | ||||||||
Companhia Brasileira de Distribuicao Grupo Pao de Acucar Class A | 1,718,364 | 72,386,073 | ||||||
|
| |||||||
72,386,073 | ||||||||
FOREST PRODUCTS & PAPER — 0.45% |
| |||||||
Klabin SA | 7,450,800 | 33,444,621 | ||||||
|
| |||||||
33,444,621 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 3.36% |
| |||||||
Bradespar SA | 3,901,800 | 51,002,664 | ||||||
Itausa — Investimentos Itau SA | 42,641,188 | 196,663,102 | ||||||
|
| |||||||
247,665,766 | ||||||||
IRON & STEEL — 10.15% | ||||||||
Gerdau SA | 14,213,746 | 125,850,511 | ||||||
Metalurgica Gerdau SA | 4,459,290 | 48,875,560 | ||||||
Usinas Siderurgicas de Minas Gerais SA Class A | 6,724,800 | 27,034,539 |
SCHEDULESOF INVESTMENTS | 27 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI BRAZIL INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Vale SA Class A | 33,395,400 | $ | 546,569,019 | |||||
|
| |||||||
748,329,629 | ||||||||
OIL & GAS — 9.46% | ||||||||
Petroleo Brasileiro SA | 68,088,678 | 696,907,250 | ||||||
|
| |||||||
696,907,250 | ||||||||
RETAIL — 0.66% | ||||||||
Lojas Americanas SA | 6,722,506 | 48,446,608 | ||||||
|
| |||||||
48,446,608 | ||||||||
TELECOMMUNICATIONS — 2.18% | ||||||||
Oi SA | 13,663,693 | 51,964,225 | ||||||
Telefonica Brasil SA | 5,016,674 | 108,880,607 | ||||||
|
| |||||||
160,844,832 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS | ||||||||
(Cost: $2,635,656,019) | 3,893,793,430 | |||||||
SHORT-TERM INVESTMENTS — 0.01% |
| |||||||
MONEY MARKET FUNDS — 0.01% |
| |||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%b,c | 751,668 | 751,668 | ||||||
|
| |||||||
751,668 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $751,668) |
| 751,668 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $5,518,392,738) |
| 7,346,646,465 | ||||||
Other Assets, Less Liabilities — 0.33% |
| 23,970,625 | ||||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 7,370,617,090 | |||||
|
|
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.
28 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
iSHARES® MSCI CANADA INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 99.77% | ||||||||
AEROSPACE & DEFENSE — 0.22% | ||||||||
CAE Inc. | 903,874 | $ | 9,232,457 | |||||
|
| |||||||
9,232,457 | ||||||||
APPAREL — 0.29% | ||||||||
Gildan Activewear Inc. | 403,283 | 12,218,839 | ||||||
|
| |||||||
12,218,839 | ||||||||
AUTO PARTS & EQUIPMENT — 0.78% |
| |||||||
Magna International Inc. Class A | 773,812 | 33,356,602 | ||||||
|
| |||||||
33,356,602 | ||||||||
BANKS — 24.11% | ||||||||
Bank of Montreal | 2,243,563 | 130,996,707 | ||||||
Bank of Nova Scotia | 3,838,242 | 203,220,494 | ||||||
Canadian Imperial Bank of Commerce | 1,412,112 | 109,079,696 | ||||||
National Bank of Canada | 564,107 | 42,305,881 | ||||||
Royal Bank of Canada | 5,021,733 | 280,740,751 | ||||||
Toronto-Dominion Bank (The) | 3,174,457 | 259,399,313 | ||||||
|
| |||||||
1,025,742,842 | ||||||||
CHEMICALS — 4.15% | ||||||||
Agrium Inc. | 550,385 | 54,104,320 | ||||||
Potash Corp. of Saskatchewan Inc. | 2,995,271 | 122,500,013 | ||||||
|
| |||||||
176,604,333 | ||||||||
COMMERCIAL SERVICES — 0.14% | ||||||||
Ritchie Bros. Auctioneers Inc.a | 317,479 | 5,909,803 | ||||||
|
| |||||||
5,909,803 | ||||||||
COMPUTERS — 0.74% | ||||||||
CGI Group Inc. Class Ab | 785,350 | 20,484,277 | ||||||
Research In Motion Ltd.a,b | 1,650,803 | 10,990,298 | ||||||
|
| |||||||
31,474,575 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 0.67% |
| |||||||
CI Financial Corp. | 545,673 | 12,264,303 | ||||||
IGM Financial Inc. | 356,191 | 13,683,134 | ||||||
TMX Group Inc. | 51,950 | 2,624,216 | ||||||
|
| |||||||
28,571,653 | ||||||||
ELECTRIC — 0.79% | ||||||||
Fortis Inc. | 661,189 | 21,768,284 | ||||||
TransAlta Corp. | 791,030 | 11,935,387 | ||||||
|
| |||||||
33,703,671 | ||||||||
ENGINEERING & CONSTRUCTION — 0.44% |
| |||||||
SNC-Lavalin Group Inc. | 527,009 | 18,691,103 | ||||||
|
| |||||||
18,691,103 |
Security | Shares | Value | ||||||
FOOD — 1.66% | ||||||||
Empire Co. Ltd. Class A | 105,808 | $ | 6,130,720 | |||||
George Weston Ltd. | 179,392 | 11,537,731 | ||||||
Loblaw Companies Ltd.a | 393,261 | 13,804,085 | ||||||
Metro Inc. Class A | 343,686 | 19,941,694 | ||||||
Saputo Inc. | 451,644 | 19,020,444 | ||||||
|
| |||||||
70,434,674 | ||||||||
FOREST PRODUCTS & PAPER — 0.00% |
| |||||||
Sino-Forest Corp. Class Aa,b,c | 841,337 | 85 | ||||||
|
| |||||||
85 | ||||||||
GAS — 0.32% | ||||||||
Canadian Utilities Ltd. Class A | 198,156 | 13,650,144 | ||||||
|
| |||||||
13,650,144 | ||||||||
HAND & MACHINE TOOLS — 0.32% | ||||||||
Finning International Inc. | 599,448 | 13,776,644 | ||||||
|
| |||||||
13,776,644 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 0.29% |
| |||||||
Onex Corp. | 319,336 | 12,542,396 | ||||||
|
| |||||||
12,542,396 | ||||||||
INSURANCE — 5.94% | ||||||||
Fairfax Financial Holdings Ltd. | 69,385 | 26,096,803 | ||||||
Great-West Lifeco Inc. | 993,157 | 21,909,133 | ||||||
Industrial Alliance Insurance and Financial Services Inc. | 317,121 | 8,072,229 | ||||||
Intact Financial Corp. | 451,212 | 27,479,193 | ||||||
Manulife Financial Corp. | 6,301,034 | 70,490,364 | ||||||
Power Corp. of Canada | 1,216,705 | 28,985,899 | ||||||
Power Financial Corp. | 863,929 | 21,745,956 | ||||||
Sun Life Financial Inc. | 2,060,580 | 48,045,747 | ||||||
|
| |||||||
252,825,324 | ||||||||
MANUFACTURING — 0.42% | ||||||||
Bombardier Inc. Class B | 5,019,748 | 17,803,231 | ||||||
|
| |||||||
17,803,231 | ||||||||
MEDIA — 1.50% | ||||||||
Shaw Communications Inc. Class B | 1,315,058 | 26,864,842 | ||||||
Thomson Reuters Corp. | 1,300,567 | 36,874,768 | ||||||
|
| |||||||
63,739,610 | ||||||||
MINING — 15.45% | ||||||||
Agnico-Eagle Mines Ltd. | 597,368 | 28,819,669 | ||||||
Barrick Gold Corp. | 3,488,709 | 134,372,832 | ||||||
Cameco Corp. | 1,379,186 | 30,019,674 |
SCHEDULESOF INVESTMENTS | 29 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI CANADA INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Centerra Gold Inc. | 573,572 | $ | 4,359,112 | |||||
Eldorado Gold Corp. | 2,360,180 | 31,306,436 | ||||||
First Quantum Minerals Ltd. | 1,663,037 | 32,001,898 | ||||||
Franco-Nevada Corp. | 501,878 | 26,008,047 | ||||||
Goldcorp Inc. | 2,824,589 | 115,834,338 | ||||||
IAMGOLD Corp. | 1,311,942 | 17,136,274 | ||||||
Inmet Mining Corp. | 180,636 | 8,055,723 | ||||||
Kinross Gold Corp. | 3,972,196 | 35,260,107 | ||||||
New Gold Inc.b | 1,609,910 | 17,814,478 | ||||||
Osisko Mining Corp.a,b | 1,349,597 | 13,087,747 | ||||||
Pan American Silver Corp. | 536,648 | 9,413,160 | ||||||
Silver Wheaton Corp. | 1,233,180 | 42,586,791 | ||||||
Teck Resources Ltd. Class B | 2,010,634 | 55,499,488 | ||||||
Turquoise Hill Resources Ltd.a,b | 1,391,374 | 11,166,522 | ||||||
Yamana Gold Inc. | 2,619,547 | 44,754,079 | ||||||
|
| |||||||
657,496,375 | ||||||||
OIL & GAS — 20.90% | ||||||||
ARC Resources Ltd. | 1,012,774 | 23,922,341 | ||||||
Athabasca Oil Corp.b | 1,116,402 | 15,362,759 | ||||||
Baytex Energy Corp. | 415,101 | 18,886,391 | ||||||
Bonavista Energy Corp. | 508,547 | 8,518,298 | ||||||
Canadian Natural Resources Ltd. | 3,834,972 | 116,543,355 | ||||||
Canadian Oil Sands Ltd. | 1,690,830 | 36,049,109 | ||||||
Cenovus Energy Inc. | 2,631,848 | 86,141,450 | ||||||
Crescent Point Energy Corp. | 1,106,832 | 45,973,596 | ||||||
Encana Corp. | 2,567,391 | 56,766,957 | ||||||
Enerplus Corp. | 685,744 | 10,798,462 | ||||||
Husky Energy Inc. | 1,188,132 | 31,387,345 | ||||||
Imperial Oil Ltd. | 1,034,786 | 47,196,350 | ||||||
MEG Energy Corp.b | 438,539 | 17,250,934 | ||||||
Nexen Inc. | 1,845,668 | 46,345,091 | ||||||
Pacific Rubiales Energy Corp. | 1,026,841 | 25,076,626 | ||||||
Pengrowth Energy Corp. | 1,738,275 | 11,731,176 | ||||||
Penn West Petroleum Ltd. | 1,647,713 | 23,341,975 | ||||||
Precision Drilling Corp.b | 823,871 | 6,086,051 | ||||||
Progress Energy Resources Corp. | 655,140 | 14,585,221 | ||||||
Suncor Energy Inc. | 5,440,935 | 169,868,985 | ||||||
Talisman Energy Inc. | 3,596,542 | 49,929,194 | ||||||
Tourmaline Oil Corp.b | 446,688 | 12,483,817 | ||||||
Vermilion Energy Inc. | 324,589 | 14,771,538 | ||||||
|
| |||||||
889,017,021 |
Security | Shares | Value | ||||||
PHARMACEUTICALS — 1.90% | ||||||||
Catamaran Corp.b | 336,060 | $ | 29,136,438 | |||||
Valeant Pharmaceuticals International Inc.b | 1,013,747 | 51,845,580 | ||||||
|
| |||||||
80,982,018 | ||||||||
PIPELINES — 5.64% | ||||||||
Enbridge Inc. | 2,600,549 | 102,272,186 | ||||||
Pembina Pipeline Corp. | 997,573 | 27,010,337 | ||||||
TransCanada Corp. | 2,455,831 | 110,491,864 | ||||||
|
| |||||||
239,774,387 | ||||||||
REAL ESTATE — 1.96% | ||||||||
Brookfield Asset Management Inc. Class A | 1,956,323 | 67,341,837 | ||||||
Brookfield Office Properties Inc. | 966,988 | 16,216,904 | ||||||
|
| |||||||
83,558,741 | ||||||||
REAL ESTATE INVESTMENT TRUSTS — 0.51% |
| |||||||
H&R Real Estate Investment Trust | 308,922 | 7,919,873 | ||||||
RioCan Real Estate Investment Trust | 488,177 | 13,663,119 | ||||||
|
| |||||||
21,582,992 | ||||||||
RETAIL — 2.36% | ||||||||
Alimentation Couche-Tard Inc. Class B | 435,849 | 22,144,671 | ||||||
Canadian Tire Corp. Ltd. Class A | 272,072 | 19,648,955 | ||||||
Shoppers Drug Mart Corp. | 732,602 | 31,097,632 | ||||||
Tim Hortons Inc. | 544,310 | 27,467,840 | ||||||
|
| |||||||
100,359,098 | ||||||||
SOFTWARE �� 0.25% | ||||||||
Open Text Corp.b | 201,688 | 10,829,860 | ||||||
|
| |||||||
10,829,860 | ||||||||
TELECOMMUNICATIONS — 3.15% | ||||||||
BCE Inc. | 890,718 | 39,551,363 | ||||||
Bell Aliant Inc. | 263,488 | 7,019,405 | ||||||
Rogers Communications Inc. Class B | 1,366,146 | 55,055,607 | ||||||
TELUS Corp. NVSa | 523,526 | 32,222,698 | ||||||
|
| |||||||
133,849,073 | ||||||||
TRANSPORTATION — 4.87% | ||||||||
Canadian National Railway Co. | 1,529,492 | 139,798,529 | ||||||
Canadian Pacific Railway Ltd. | 595,968 | 49,206,539 | ||||||
Viterra Inc. | 1,102,259 | 18,027,522 | ||||||
|
| |||||||
207,032,590 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS (Cost: $4,735,126,382) | 4,244,760,141 |
30 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI CANADA INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS — 1.74% |
| |||||||
MONEY MARKET FUNDS — 1.74% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | ||||||||
0.23%d,e,f | 68,650,544 | $ | 68,650,544 | |||||
BlackRock Cash Funds: Prime, SL Agency Shares | ||||||||
0.23%d,e,f | 5,202,433 | 5,202,433 | ||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | ||||||||
0.06%d,e | 175,709 | 175,709 | ||||||
|
| |||||||
74,028,686 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS (Cost: $74,028,686) | 74,028,686 | |||||||
|
| |||||||
TOTAL INVESTMENTS IN SECURITIES — 101.51% (Cost: $4,809,155,068) | 4,318,788,827 | |||||||
Other Assets, Less Liabilities — (1.51)% |
| (64,244,525 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% | $ | 4,254,544,302 | ||||||
|
|
NVS — Non-Voting Shares
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. |
Financial futures contracts purchased as of August 31, 2012 were as follows:
Number of Contracts | Issue (Expiration) | Exchange | Notional Value | Net Unrealized Appreciation (Depreciation) | ||||||||||
63 | S&P/TSE 60 Index (Sept. 2012) | Montreal | $8,716,644 | $(44,971) | ||||||||||
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 31 |
Table of Contents
Schedule of Investments
iSHARES® MSCI CHILE INVESTABLE MARKET INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 92.73% |
| |||||||
AIRLINES — 8.43% |
| |||||||
LATAM Airlines Group SA | 1,949,038 | $ | 46,233,561 | |||||
|
| |||||||
46,233,561 | ||||||||
BANKS — 15.24% |
| |||||||
Banco de Chile | 160,970,043 | 22,685,725 | ||||||
Banco de Credito e Inversiones | 281,606 | 17,775,297 | ||||||
Banco Santander (Chile) SA | 464,296,196 | 33,278,027 | ||||||
CorpBanca SA | 828,718,436 | 9,876,590 | ||||||
|
| |||||||
83,615,639 | ||||||||
BEVERAGES — 3.59% |
| |||||||
Compania Cervecerias Unidas SA | 948,220 | 12,379,906 | ||||||
Vina Concha y Toro SA | 3,731,182 | 7,304,472 | ||||||
|
| |||||||
19,684,378 | ||||||||
BUILDING MATERIALS — 0.99% |
| |||||||
SalfaCorp SA | 2,805,166 | 5,436,043 | ||||||
|
| |||||||
5,436,043 | ||||||||
COMPUTERS — 1.59% |
| |||||||
Sonda SA | 3,081,260 | 8,738,208 | ||||||
|
| |||||||
8,738,208 | ||||||||
ELECTRIC — 19.72% |
| |||||||
AES Gener SA | 21,043,932 | 11,868,699 | ||||||
Colbun SAa | 66,209,962 | 18,775,239 | ||||||
E.CL SA | 4,583,670 | 11,145,208 | ||||||
Empresa Nacional de Electricidad SA | 22,412,572 | 37,056,044 | ||||||
Enersis SA | 89,028,758 | 29,373,276 | ||||||
|
| |||||||
108,218,466 | ||||||||
ENGINEERING & CONSTRUCTION — 1.08% |
| |||||||
Besalco SA | 2,408,952 | 4,108,695 | ||||||
Socovesa SA | 4,462,014 | 1,831,754 | ||||||
|
| |||||||
5,940,449 | ||||||||
FOOD — 7.95% |
| |||||||
AquaChile SAa | 3,462,550 | 2,021,402 | ||||||
Cencosud SA | 6,494,124 | 37,671,196 | ||||||
Compania Pesquera Camanchaca SAa | 15,638,896 | 806,465 | ||||||
Empresas Iansa SA | 23,459,436 | 1,857,399 | ||||||
Multiexport Foods SA | 5,927,012 | 1,241,962 | ||||||
|
| |||||||
43,598,424 | ||||||||
FOREST PRODUCTS & PAPER — 5.12% |
| |||||||
Empresas CMPC SA | 6,930,742 | 25,766,273 |
Security | Shares | Value | ||||||
Masisa SA | 25,908,610 | $ | 2,353,071 | |||||
|
| |||||||
28,119,344 | ||||||||
HEALTH CARE — SERVICES — 0.49% |
| |||||||
Cruz Blanca Salud SA | 2,559,648 | 2,702,790 | ||||||
|
| |||||||
2,702,790 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 8.92% |
| |||||||
Empresas Copec SA | 3,244,332 | 46,761,103 | ||||||
Norte Grande SA | 236,272,374 | 2,215,284 | ||||||
|
| |||||||
48,976,387 | ||||||||
IRON & STEEL — 3.73% |
| |||||||
CAP SA | 607,516 | 20,476,688 | ||||||
|
| |||||||
20,476,688 | ||||||||
LODGING — 0.24% |
| |||||||
Enjoy SA | 6,946,287 | 1,302,709 | ||||||
|
| |||||||
1,302,709 | ||||||||
REAL ESTATE — 1.45% |
| |||||||
Parque Arauco SA | 3,900,260 | 7,360,720 | ||||||
PAZ Corp. SA | 1,219,582 | 573,136 | ||||||
|
| |||||||
7,933,856 | ||||||||
RETAIL — 5.13% |
| |||||||
Empresas Hites SA | 1,869,686 | 1,212,852 | ||||||
La Polar SAa | 2,084,276 | 813,647 | ||||||
S.A.C.I. Falabella SA | 2,868,502 | 26,146,131 | ||||||
|
| |||||||
28,172,630 | ||||||||
TELECOMMUNICATIONS — 3.51% |
| |||||||
Empresa Nacional de Telecomunicaciones SA | 999,180 | 19,283,685 | ||||||
|
| |||||||
19,283,685 | ||||||||
TRANSPORTATION — 1.84% |
| |||||||
Compania SudAmericana de Vapores SAa | 38,213,812 | 4,197,588 | ||||||
Sociedad Matriz SAAM SAa | 55,862,170 | 5,905,712 | ||||||
|
| |||||||
10,103,300 | ||||||||
WATER — 3.71% |
| |||||||
Aguas Andinas SA | 20,524,948 | 13,437,971 | ||||||
Inversiones Aguas Metropolitanas SA | 3,938,662 | 6,925,956 | ||||||
|
| |||||||
20,363,927 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $393,509,776) | 508,900,484 |
32 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI CHILE INVESTABLE MARKET INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
PREFERRED STOCKS — 7.15% |
| |||||||
CHEMICALS — 7.15% |
| |||||||
Sociedad Quimica y Minera de Chile SA | ||||||||
Series B | 635,908 | $ | 39,230,337 | |||||
|
| |||||||
39,230,337 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS | ||||||||
(Cost: $18,056,634) | 39,230,337 | |||||||
RIGHTS — 0.00% |
| |||||||
RETAIL — 0.00% | ||||||||
La Polar SAa,b | 6,322,144 | 1 | ||||||
|
| |||||||
1 | ||||||||
|
| |||||||
TOTAL RIGHTS | ||||||||
(Cost: $0) | 1 | |||||||
SHORT-TERM INVESTMENTS — 0.16% |
| |||||||
MONEY MARKET FUNDS — 0.16% | ||||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%c,d | 900,524 | 900,524 | ||||||
|
| |||||||
900,524 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS | ||||||||
(Cost: $900,524) | 900,524 | |||||||
|
| |||||||
TOTAL INVESTMENTS | ||||||||
(Cost: $412,466,934) | 549,031,346 | |||||||
Other Assets, Less Liabilities — (0.04)% |
| (234,701 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% | $ | 548,796,645 | ||||||
|
|
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 | 33 |
Table of Contents
Schedule of Investments
iSHARES® MSCI ISRAEL CAPPED INVESTABLE MARKET INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 99.63% |
| |||||||
AEROSPACE & DEFENSE — 1.78% |
| |||||||
Elbit Systems Ltd.a | 39,479 | $ | 1,226,511 | |||||
|
| |||||||
1,226,511 | ||||||||
BANKS — 16.75% | ||||||||
Bank Hapoalim Ltd. | 1,491,655 | 4,589,594 | ||||||
Bank Leumi le-Israelb | 1,424,796 | 3,265,723 | ||||||
First International Bank of Israel Ltd.b | 40,478 | 417,098 | ||||||
Israel Discount Bank Ltd. Class Ab | 1,398,712 | 1,461,837 | ||||||
Mizrahi Tefahot Bank Ltd.b | 217,116 | 1,684,957 | ||||||
Union Bank of Israelb | 47,582 | 122,931 | ||||||
|
| |||||||
11,542,140 | ||||||||
BIOTECHNOLOGY — 0.20% |
| |||||||
Clal Biotechnology Industries Ltd.b | 60,976 | 140,596 | ||||||
|
| |||||||
140,596 | ||||||||
CHEMICALS — 11.09% |
| |||||||
Frutarom | 63,159 | 579,215 | ||||||
Israel Chemicals Ltd. | 654,900 | 7,064,831 | ||||||
|
| |||||||
7,644,046 | ||||||||
COMMERCIAL SERVICES — 0.51% |
| |||||||
Nitsba Holdings (1995) Ltd.b | 51,356 | 353,773 | ||||||
|
| |||||||
353,773 | ||||||||
COMPUTERS — 0.33% | ||||||||
MATRIX IT Ltd. | 57,979 | 225,627 | ||||||
|
| |||||||
225,627 | ||||||||
ELECTRONICS — 0.41% |
| |||||||
Ituran Location and Control Ltd. | 25,160 | 282,700 | ||||||
|
| |||||||
282,700 | ||||||||
ENERGY — ALTERNATE SOURCES — 0.62% |
| |||||||
Ormat Industries Ltd. | 89,022 | 426,275 | ||||||
|
| |||||||
426,275 | ||||||||
ENGINEERING & CONSTRUCTION — 0.98% |
| |||||||
Electra (Israel) Ltd. | 2,886 | 193,773 | ||||||
Shikun & Binui Ltd.a | 351,574 | 480,608 | ||||||
|
| |||||||
674,381 | ||||||||
FOOD — 2.88% | ||||||||
Alon Holdings Blue Square — Israel Ltd. | 33,633 | 64,529 | ||||||
Osem Investment Ltd. | 57,535 | 705,095 | ||||||
Rami Levi Chain Stores Hashikma Marketing 2006 Ltd. | 9,879 | 280,580 |
Security | Shares | Value | ||||||
Shufersal Ltd. | 138,343 | $ | 330,188 | |||||
Strauss Group Ltd.b | 64,898 | 601,792 | ||||||
|
| |||||||
1,982,184 | ||||||||
FOREST PRODUCTS & PAPER — 0.17% |
| |||||||
Hadera Paper Ltd.b | 3,404 | 117,796 | ||||||
|
| |||||||
117,796 | ||||||||
HEALTH CARE — PRODUCTS — 0.56% |
| |||||||
Given Imaging Ltd.b | 27,898 | 382,274 | ||||||
|
| |||||||
382,274 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 5.75% |
| |||||||
Clal Industries and Investments Ltd. | 97,310 | 242,193 | ||||||
Delek Group Ltd. (The) | 7,622 | 1,111,061 | ||||||
Discount Investment Corp. Ltd. Registeredb | 51,985 | 64,757 | ||||||
FIBI Holdings Ltd.b | 12,173 | 143,146 | ||||||
Israel Corp. Ltd. (The) | 3,774 | 2,165,383 | ||||||
Israel Land Development Co. Ltd. (The) | 15,133 | 63,792 | ||||||
Koor Industries Ltd.b | 22,718 | 172,570 | ||||||
|
| |||||||
3,962,902 | ||||||||
HOME BUILDERS — 0.41% | ||||||||
Bayside Land Corp. Ltd. | 1,110 | 178,646 | ||||||
Property & Building Corp. Ltd. | 3,071 | 102,830 | ||||||
|
| |||||||
281,476 | ||||||||
INSURANCE — 2.60% | ||||||||
Clal Insurance Enterprises Holdings Ltd. | 38,961 | 359,146 | ||||||
Harel Insurance Investments & Financial Services Ltd.b | 19,869 | 510,851 | ||||||
Menorah Mivtachim Holdings Ltd.b | 45,473 | 249,918 | ||||||
Migdal Insurance & Financial Holdings Ltd. | 508,269 | 516,646 | ||||||
Phoenix Holdings Ltd.b | 96,349 | 157,083 | ||||||
|
| |||||||
1,793,644 | ||||||||
MANUFACTURING — 0.21% | ||||||||
Plasson Industries Ltd. | 6,253 | 145,878 | ||||||
|
| |||||||
145,878 | ||||||||
MEDIA — 0.40% | ||||||||
Hot Telecommunication Systems Ltd. | 28,860 | 273,224 | ||||||
|
| |||||||
273,224 | ||||||||
OIL & GAS — 2.51% | ||||||||
Jerusalem Oil Exploration Ltd.b | 15,355 | 232,750 | ||||||
Naphtha Israel Petroleum Corp. Ltd.b | 57,980 | 185,472 | ||||||
Oil Refineries Ltd.b | 1,459,206 | 548,950 | ||||||
Paz Oil Co. Ltd. | 7,659 | 761,921 | ||||||
|
| |||||||
1,729,093 |
34 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI ISRAEL CAPPED INVESTABLE MARKET INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
PHARMACEUTICALS — 22.88% | ||||||||
Teva Pharmaceutical Industries Ltd. | 395,308 | $ | 15,767,607 | |||||
|
| |||||||
15,767,607 | ||||||||
REAL ESTATE — 5.12% | ||||||||
Africa Israel Investments Ltd.b | 149,555 | 231,755 | ||||||
Africa Israel Properties Ltd.b | 20,425 | 126,043 | ||||||
Airport City Ltd.b | 56,277 | 210,591 | ||||||
AL-ROV (Israel) Ltd.b | 7,659 | 115,156 | ||||||
Alony Hetz Properties & Investments Ltd. | 113,035 | 477,896 | ||||||
Alrov Properties and Lodgings Ltd.b | 7,918 | 106,899 | ||||||
Amot Investments Ltd. | 117,327 | 246,384 | ||||||
Gazit Globe Ltd.a | 125,097 | 1,204,891 | ||||||
Industrial Buildings Corp. Ltd.a,b | 129,870 | 150,453 | ||||||
Jerusalem Economy Ltd.b | 42,846 | 154,781 | ||||||
Melisron Ltd. | 21,979 | 324,216 | ||||||
Norstar Holdings Inc. | 11,433 | 180,873 | ||||||
|
| |||||||
3,529,938 | ||||||||
RETAIL — 0.46% | ||||||||
Delek Automotive Systems Ltd. | 58,349 | 313,125 | ||||||
|
| |||||||
313,125 | ||||||||
SEMICONDUCTORS — 9.70% | ||||||||
Mellanox Technologies Ltd.a,b | 54,760 | 6,443,476 | ||||||
Tower Semiconductor Ltd.b | 31,471 | 239,217 | ||||||
|
| |||||||
6,682,693 | ||||||||
SOFTWARE — 1.36% | ||||||||
Babylon Ltd. | 46,768 | 385,670 | ||||||
Retalix Ltd.b | 26,714 | 553,201 | ||||||
|
| |||||||
938,871 | ||||||||
TELECOMMUNICATIONS — 11.77% | ||||||||
012 Smile.Communications Ltd.b | 16,095 | 44,229 | ||||||
Bezeq The Israel Telecommunication Corp. Ltd. | 2,953,303 | 3,355,148 | ||||||
Cellcom Israel Ltd.a | 92,463 | 648,463 | ||||||
Ceragon Networks Ltd.b | 47,101 | 330,917 | ||||||
Gilat Satellite Networks Ltd.b | 44,470 | 143,475 | ||||||
NICE Systems Ltd.b | 95,460 | 2,996,614 | ||||||
Partner Communications Co. Ltd. | 144,522 | 594,096 | ||||||
|
| |||||||
8,112,942 |
Security | Shares | Value | ||||||
TEXTILES — 0.18% | ||||||||
Avgol Industries 1953 Ltd. | 182,484 | $ | 124,888 | |||||
|
| |||||||
124,888 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $103,109,027) | 68,654,584 | |||||||
SHORT-TERM INVESTMENTS — 12.34% |
| |||||||
MONEY MARKET FUNDS — 12.34% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | ||||||||
0.23%c,d,e | 7,894,928 | 7,894,928 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.23%c,d,e | 598,288 | 598,288 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%c,d | 11,100 | 11,100 | ||||||
|
| |||||||
8,504,316 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS | ||||||||
(Cost: $8,504,316) | 8,504,316 | |||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $111,613,343) | 77,158,900 | |||||||
Other Assets, Less Liabilities — (11.97)% |
| (8,246,412 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% | $ | 68,912,488 | ||||||
|
|
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 | 35 |
Table of Contents
Schedule of Investments
iSHARES® MSCI MEXICO INVESTABLE MARKET INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 99.89% |
| |||||||
AIRLINES — 0.16% |
| |||||||
Grupo Aeromexico SAB de CVa,b | 1,280,500 | $ | 1,933,887 | |||||
|
| |||||||
1,933,887 | ||||||||
BANKS — 9.02% |
| |||||||
Compartamos SAB de CV | 9,099,000 | 9,088,017 | ||||||
Grupo Financiero Banorte SAB de CV Series O | 11,096,800 | 56,312,744 | ||||||
Grupo Financiero Inbursa SAB de CV Series O | 15,306,600 | 41,291,794 | ||||||
|
| |||||||
106,692,555 | ||||||||
BEVERAGES — 17.79% |
| |||||||
Arca Continental SAB de CV | 2,808,678 | 17,552,119 | ||||||
Coca-Cola FEMSA SAB de CV Series L | 3,181,700 | 38,621,556 | ||||||
Fomento Economico Mexicano SAB de CV BD Units | 13,269,608 | 111,304,142 | ||||||
Grupo Modelo SAB de CV Series C | 4,767,056 | 42,930,835 | ||||||
|
| |||||||
210,408,652 | ||||||||
BUILDING MATERIALS — 5.33% |
| |||||||
Cemex SAB de CV CPOa | 72,614,222 | 53,408,922 | ||||||
Corporacion Geo SAB de CV Series Ba,b | 3,977,060 | 4,008,262 | ||||||
Desarrolladora Homex SAB de CVa,b | 1,784,930 | 3,324,526 | ||||||
Urbi Desarrollos Urbanos SAB de CVa,b | 4,501,900 | 2,268,610 | ||||||
|
| |||||||
63,010,320 | ||||||||
CHEMICALS — 2.13% |
| |||||||
Mexichem SAB de CV | 5,669,257 | 25,198,598 | ||||||
|
| |||||||
25,198,598 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 0.48% |
| |||||||
Bolsa Mexicana de Valores SAB de CVb | 2,907,400 | 5,689,345 | ||||||
|
| |||||||
5,689,345 | ||||||||
ENGINEERING & CONSTRUCTION — 3.66% |
| |||||||
Empresas ICA SAB de CVa,b | 4,637,474 | 8,224,729 | ||||||
Grupo Aeroportuario del Centro Norte SAB de CV | 1,649,000 | 3,536,593 | ||||||
Grupo Aeroportuario del Pacifico SAB de CV Series B | 4,535,700 | 17,809,534 | ||||||
Grupo Aeroportuario del Sureste SAB de CV Series Bb | 562,700 | 4,704,165 |
Security | Shares | Value | ||||||
Grupo Aeroportuario del Sureste SAB de CV Series B SP ADR | 107,205 | $ | 9,003,076 | |||||
|
| |||||||
43,278,097 | ||||||||
FOOD — 3.03% |
| |||||||
Gruma SAB de CV Series Ba | 1,703,869 | 4,613,146 | ||||||
Grupo Bimbo SAB de CV Series A | 12,757,300 | 27,620,286 | ||||||
Grupo Herdez SAB de CVb | 1,532,800 | 3,625,021 | ||||||
|
| |||||||
35,858,453 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 4.10% |
| |||||||
Alfa SAB de CV Series A | 2,072,400 | 32,679,072 | ||||||
Grupo Carso SAB de CV Series A1 | 4,830,630 | 15,819,074 | ||||||
|
| |||||||
48,498,146 | ||||||||
HOME BUILDERS — 0.19% |
| |||||||
Consorcio ARA SAB de CVa,b | 8,516,600 | 2,222,951 | ||||||
|
| |||||||
2,222,951 | ||||||||
HOUSEHOLD PRODUCTS & WARES — 2.12% |
| |||||||
Kimberly-Clark de Mexico SAB de CV Series A | 12,465,800 | 25,061,374 | ||||||
|
| |||||||
25,061,374 | ||||||||
IRON & STEEL — 0.32% |
| |||||||
Compania Minera Autlan SAB de CV Series Bb | 450,900 | 453,757 | ||||||
Grupo Simec SAB de CV Series Ba | 911,900 | 3,310,935 | ||||||
|
| |||||||
3,764,692 | ||||||||
MACHINERY — 0.70% |
| |||||||
Industrias CH SAB de CV Series Ba | 1,513,200 | 8,285,158 | ||||||
|
| |||||||
8,285,158 | ||||||||
MEDIA — 5.58% |
| |||||||
Grupo Televisa SAB CPO | 12,842,899 | 58,847,140 | ||||||
TV Azteca SAB de CV CPOb | 11,466,100 | 7,101,439 | ||||||
|
| |||||||
65,948,579 | ||||||||
MINING — 10.76% |
| |||||||
Grupo Mexico SAB de CV Series B | 24,521,615 | 72,366,142 | ||||||
Industrias Penoles SAB de CV | 935,080 | 37,997,853 | ||||||
Minera Frisco SAB de CV Series A1a,b | 4,423,230 | 16,850,718 | ||||||
|
| |||||||
127,214,713 | ||||||||
PHARMACEUTICALS — 0.96% |
| |||||||
Genomma Lab Internacional SAB de CV Series Ba,b | 5,704,300 | 11,412,043 | ||||||
|
| |||||||
11,412,043 |
36 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI MEXICO INVESTABLE MARKET INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
RETAIL — 9.99% |
| |||||||
Alsea SAB de CVa,b | 3,832,192 | $ | 5,460,931 | |||||
El Puerto de Liverpool SA de CV Series C1 | 1,629,600 | 13,177,190 | ||||||
Grupo Famsa SAB de CV Series Aa,b | 1,901,215 | 2,009,356 | ||||||
Wal-Mart de Mexico SAB de CV Series V | 36,715,300 | 97,466,159 | ||||||
|
| |||||||
118,113,636 | ||||||||
TELECOMMUNICATIONS — 23.57% |
| |||||||
America Movil SAB de CV Series L | 216,174,270 | 276,251,670 | ||||||
Axtel SAB de CV CPOa,b | 14,706,400 | 2,573,842 | ||||||
|
| |||||||
278,825,512 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $1,297,070,613) |
| 1,181,416,711 | ||||||
SHORT-TERM INVESTMENTS — 1.70% |
| |||||||
MONEY MARKET FUNDS — 1.70% |
| |||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | ||||||||
0.23%c,d,e | 18,510,846 | 18,510,846 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.23%c,d,e | 1,402,777 | 1,402,777 | ||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | ||||||||
0.06%c,d | 127,223 | 127,223 | ||||||
|
| |||||||
20,040,846 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $20,040,846) |
| 20,040,846 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $1,317,111,459) |
| 1,201,457,557 | ||||||
Other Assets, Less Liabilities — (1.59)% |
| (18,758,005 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 1,182,699,552 | |||||
|
|
CPO — Certificates of Participation (Ordinary)
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 | 37 |
Table of Contents
Schedule of Investments
iSHARES® MSCI SOUTH AFRICA INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 99.73% |
| |||||||
BANKS — 12.82% |
| |||||||
Absa Group Ltd. | 494,824 | $ | 8,351,274 | |||||
FirstRand Ltd. | 5,340,922 | 17,394,354 | ||||||
Nedbank Group Ltd. | 349,546 | 7,672,303 | ||||||
Standard Bank Group Ltd. | 2,056,676 | 27,085,607 | ||||||
|
| |||||||
60,503,538 | ||||||||
BUILDING MATERIALS — 0.57% |
| |||||||
Pretoria Portland Cement Co. Ltd. | 857,910 | 2,707,529 | ||||||
|
| |||||||
2,707,529 | ||||||||
CHEMICALS — 8.60% |
| |||||||
Sasol Ltd. | 943,496 | 40,604,414 | ||||||
|
| |||||||
40,604,414 | ||||||||
COAL — 0.80% |
| |||||||
Exxaro Resources Ltd. | 213,560 | 3,791,301 | ||||||
|
| |||||||
3,791,301 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 2.65% |
| |||||||
African Bank Investments Ltd. | 1,246,422 | 4,806,159 | ||||||
Investec Ltd. | 403,926 | 2,441,719 | ||||||
RMB Holdings Ltd. | 1,215,596 | 5,244,002 | ||||||
|
| |||||||
12,491,880 | ||||||||
ENGINEERING & CONSTRUCTION — 0.54% |
| |||||||
Aveng Ltd. | 691,456 | 2,524,305 | ||||||
|
| |||||||
2,524,305 | ||||||||
FOOD — 6.00% |
| |||||||
Shoprite Holdings Ltd. | 737,050 | 14,777,728 | ||||||
SPAR Group Ltd. (The) | 296,822 | 4,363,320 | ||||||
Tiger Brands Ltd. | 279,104 | 9,169,354 | ||||||
|
| |||||||
28,310,402 | ||||||||
FOREST PRODUCTS & PAPER — 0.55% |
| |||||||
Sappi Ltd.a | 931,335 | 2,596,710 | ||||||
|
| |||||||
2,596,710 | ||||||||
HEALTH CARE — PRODUCTS — 1.76% |
| |||||||
Aspen Pharmacare Holdings Ltd.a | 488,702 | 8,321,009 | ||||||
|
| |||||||
8,321,009 | ||||||||
HEALTH CARE — SERVICES — 1.95% |
| |||||||
Life Healthcare Group Holdings Ltd. | 1,614,694 | 6,111,258 | ||||||
Netcare Ltd. | 1,496,282 | 3,112,039 | ||||||
|
| |||||||
9,223,297 |
Security | Shares | Value | ||||||
HOLDING COMPANIES — DIVERSIFIED — 8.11% |
| |||||||
Barloworld Ltd. | 378,068 | $ | 3,184,769 | |||||
Bidvest Group Ltd. | 508,006 | 12,295,572 | ||||||
Imperial Holdings Ltd. | 307,194 | 7,440,666 | ||||||
Remgro Ltd. | 747,710 | 12,765,672 | ||||||
RMI Holdings Ltd. | 1,151,060 | 2,594,785 | ||||||
|
| |||||||
38,281,464 | ||||||||
HOME FURNISHINGS — 1.31% |
| |||||||
Steinhoff International Holdings Ltd.a,b | 1,980,950 | 6,174,237 | ||||||
|
| |||||||
6,174,237 | ||||||||
INSURANCE — 4.88% |
| |||||||
Discovery Holdings Ltd. | 509,590 | 3,487,353 | ||||||
Liberty Holdings Ltd. | 197,066 | 2,146,601 | ||||||
MMI Holdings Ltd. | 1,683,408 | 3,886,708 | ||||||
Sanlam Ltd. | 3,074,460 | 13,489,177 | ||||||
|
| |||||||
23,009,839 | ||||||||
IRON & STEEL — 1.99% |
| |||||||
ArcelorMittal South Africa Ltd.a | 306,978 | 1,478,710 | ||||||
Kumba Iron Ore Ltd.b | 138,652 | 7,896,181 | ||||||
|
| |||||||
9,374,891 | ||||||||
MEDIA — 8.28% |
| |||||||
Naspers Ltd. Class N | 673,625 | 39,081,999 | ||||||
|
| |||||||
39,081,999 | ||||||||
MINING — 14.41% |
| |||||||
African Rainbow Minerals Ltd. | 184,720 | 3,221,669 | ||||||
Anglo American Platinum Ltd.b | 116,108 | 5,771,168 | ||||||
AngloGold Ashanti Ltd. | 658,998 | 20,554,545 | ||||||
Assore Ltd.b | 60,000 | 2,178,324 | ||||||
Gold Fields Ltd. | 1,248,008 | 14,959,512 | ||||||
Harmony Gold Mining Co. Ltd. | 668,696 | 5,413,990 | ||||||
Impala Platinum Holdings Ltd. | 926,620 | 14,621,873 | ||||||
Northam Platinum Ltd. | 394,346 | 1,263,255 | ||||||
|
| |||||||
67,984,336 | ||||||||
OFFICE & BUSINESS EQUIPMENT — 0.55% |
| |||||||
Reunert Ltd. | 309,284 | 2,611,218 | ||||||
|
| |||||||
2,611,218 | ||||||||
REAL ESTATE — 3.09% |
| |||||||
Growthpoint Properties Ltd. | 2,853,450 | 9,286,366 | ||||||
Redefine Properties Ltd. | 4,636,790 | 5,281,270 | ||||||
|
| |||||||
14,567,636 |
38 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SOUTH AFRICA INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
RETAIL — 7.61% |
| |||||||
Foschini Group Ltd. (The) | 352,068 | $ | 5,639,103 | |||||
Massmart Holdings Ltd. | 185,902 | 3,752,889 | ||||||
Mr. Price Group Ltd. | 409,761 | 6,616,655 | ||||||
Pick’n Pay Stores Ltd. | 413,002 | 2,177,099 | ||||||
Truworths International Ltd. | 754,120 | 8,522,267 | ||||||
Woolworths Holdings Ltd. | 1,294,896 | 9,217,982 | ||||||
|
| |||||||
35,925,995 | ||||||||
TELECOMMUNICATIONS — 13.26% |
| |||||||
MTN Group Ltd. | 2,921,906 | 54,427,151 | ||||||
Vodacom Group Ltd. | 640,678 | 8,131,901 | ||||||
|
| |||||||
62,559,052 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $499,779,322) | 470,645,052 | |||||||
SHORT-TERM INVESTMENTS — 3.49% |
| |||||||
MONEY MARKET FUNDS — 3.49% |
| |||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.23%c,d,e | 15,224,809 | 15,224,809 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.23%c,d,e | 1,153,757 | 1,153,757 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%c,d | 104,657 | 104,657 | ||||||
|
| |||||||
16,483,223 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS | ||||||||
(Cost: $16,483,223) | 16,483,223 | |||||||
|
| |||||||
TOTAL INVESTMENTS | ||||||||
(Cost: $516,262,545) | 487,128,275 | |||||||
Other Assets, Less Liabilities — (3.22)% |
| (15,206,097 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 471,922,178 | |||||
|
|
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
Schedule of Investments
iSHARES® MSCI TURKEY INVESTABLE MARKET INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 100.00% |
| |||||||
AEROSPACE & DEFENSE — 0.50% |
| |||||||
Aselsan Elektronik Sanayi ve TASa | 771,806 | $ | 2,801,859 | |||||
|
| |||||||
2,801,859 | ||||||||
AIRLINES — 1.30% |
| |||||||
Turk Hava Yollari AOb | 3,693,650 | 7,313,957 | ||||||
|
| |||||||
7,313,957 | ||||||||
AUTO MANUFACTURERS — 1.19% |
| |||||||
Ford Otomotiv Sanayi AS | 539,647 | 5,298,368 | ||||||
Otokar Otomotiv Ve Savunma Sanayi ASa | 64,340 | 1,401,427 | ||||||
|
| |||||||
6,699,795 | ||||||||
AUTO PARTS & EQUIPMENT — 0.14% |
| |||||||
Goodyear Lastikleri Turk AS | 27,402 | 757,378 | ||||||
|
| |||||||
757,378 | ||||||||
BANKS — 40.27% |
| |||||||
Akbank TAS | 13,846,219 | 54,682,683 | ||||||
Albaraka Turk Katilim Bankasi ASa,b | 2,437,259 | 1,850,014 | ||||||
Asya Katilim Bankasi ASb | 3,808,507 | 4,022,075 | ||||||
Sekerbank TASa,b | 2,707,049 | 1,920,791 | ||||||
Turkiye Garanti Bankasi AS | 17,768,878 | 76,234,014 | ||||||
Turkiye Halk Bankasi AS | 2,404,354 | 21,688,845 | ||||||
Turkiye Is Bankasi AS Class C | 12,116,120 | 36,920,494 | ||||||
Turkiye Vakiflar Bankasi TAO Class Da | 5,773,880 | 13,084,561 | ||||||
Yapi ve Kredi Bankasi ASa,b | 6,687,750 | 15,596,964 | ||||||
|
| |||||||
226,000,441 | ||||||||
BEVERAGES — 5.43% |
| |||||||
Anadolu Efes Biracilik ve Malt Sanayii AS | 1,557,923 | 21,765,762 | ||||||
Coca-Cola Icecek AS | 489,685 | 8,726,820 | ||||||
|
| |||||||
30,492,582 | ||||||||
BUILDING MATERIALS — 1.81% |
| |||||||
Adana Cimento Sanayii TAS Class Aa | 439,270 | 845,656 | ||||||
Afyon Cimento Sanayi TASa,b | 11,475 | 495,469 | ||||||
Akcansa Cimento Sanayi ve TAS | 370,093 | 1,616,313 | ||||||
Baticim Bati Anodolu Cimento Sanayii AS | 315,918 | 1,126,014 | ||||||
Bursa Cimento Fabrikasi AS | 446,041 | 1,167,820 | ||||||
Cimsa Cimento Sanayi ve TAS | 365,479 | 1,668,533 |
Security | Shares | Value | ||||||
Goltas Goller Bolgesi Cimento Sanayi ve TAS | 27,548 | $ | 840,964 | |||||
Konya Cimento Sanayii ASa | 7,512 | 1,313,944 | ||||||
Mardin Cimento Sanayii ve TAS | 377,709 | 1,084,481 | ||||||
|
| |||||||
10,159,194 | ||||||||
CHEMICALS — 0.81% |
| |||||||
Aksa Akrilik Kimya Sanayii ASa | 643,949 | 1,569,096 | ||||||
Bagfas Bandirma Gubre Fabrikalari ASa | 13,752 | 1,308,598 | ||||||
Gubre Fabrikalari TASb | 159,949 | 1,174,513 | ||||||
Soda Sanayii ASb | 292,097 | 475,568 | ||||||
|
| |||||||
4,527,775 | ||||||||
COMMERCIAL SERVICES — 0.58% |
| |||||||
Ihlas Holding ASa,b | 5,172,299 | 3,271,716 | ||||||
|
| |||||||
3,271,716 | ||||||||
DISTRIBUTION & WHOLESALE — 0.34% |
| |||||||
Aygaz AS | 1 | 4 | ||||||
Bizim Toptan Satis Magazalari AS | 139,104 | 1,886,039 | ||||||
|
| |||||||
1,886,043 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 1.08% |
| |||||||
Is Finansal Fabrikasi ASb | 1,192,611 | 603,505 | ||||||
Is Yatirim Menkul Degerler AS | 657,552 | 636,557 | ||||||
Turkiye Sinai Kalkinma Bankasi ASa | 4,230,707 | 4,840,279 | ||||||
|
| |||||||
6,080,341 | ||||||||
ELECTRIC — 0.32% |
| |||||||
Akenerji Elektrik Uretim ASa,b | 864,082 | 964,817 | ||||||
Zorlu Enerji Elektrik Uretim ASa,b | 1,341,264 | 811,524 | ||||||
|
| |||||||
1,776,341 | ||||||||
ENGINEERING & CONSTRUCTION — 2.76% |
| |||||||
Alarko Holding AS | 513,812 | 1,170,035 | ||||||
Enka Insaat ve Sanayi AS | 2,800,270 | 7,762,911 | ||||||
TAV Havalimanlari Holding AS | 1,257,460 | 6,543,039 | ||||||
|
| |||||||
15,475,985 | ||||||||
ENTERTAINMENT — 0.32% |
| |||||||
Fenerbahce Sportif Hizmetler Sanayi ve Ticaret ASa,b | 28,709 | 789,555 | ||||||
Galatasaray Sportif Sinai ve Ticari Yatirimlar ASa,b | 12,191 | 385,568 |
40 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI TURKEY INVESTABLE MARKET INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Galatasaray Sportif Sinai ve Ticari Yatirimlar AS Newb | 19,872 | $ | 601,172 | |||||
|
| |||||||
1,776,295 | ||||||||
FOOD — 6.85% |
| |||||||
BIM Birlesik Magazalar AS | 817,439 | 33,609,398 | ||||||
Pinar Sut Mamulleri Sanayii AS | 137,806 | 1,208,991 | ||||||
Tat Konserve Sanayii ASb | 521,134 | 627,751 | ||||||
Ulker Biskuvi Sanayi ASa | 657,939 | 3,003,709 | ||||||
|
| |||||||
38,449,849 | ||||||||
FOREST PRODUCTS & PAPER — 0.49% |
| |||||||
Ipek Dogal Enerji Kaynaklari Ve Uretim ASa,b | 796,423 | 1,800,445 | ||||||
Kartonsan Karton Sanayi ve TAS | 6,496 | 932,568 | ||||||
|
| |||||||
2,733,013 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 9.77% |
| |||||||
Akfen Holding ASa,b | 337,272 | 1,840,289 | ||||||
Dogan Sirketler Grubu Holding ASa,b | 5,666,952 | 2,618,322 | ||||||
Eczacibasi Yatirim Holding Ortakligi AS | 241,420 | 825,958 | ||||||
Haci Omer Sabanci Holding AS | 6,278,854 | 27,007,309 | ||||||
KOC Holding AS | 4,873,344 | 19,835,949 | ||||||
Yazicilar Holding ASa | 370,034 | 2,706,995 | ||||||
|
| |||||||
54,834,822 | ||||||||
HOME FURNISHINGS — 2.05% |
| |||||||
Arcelik AS | 1,821,274 | 10,077,840 | ||||||
Vestel Beyaz Esya Sanayi ve TASb | 436,850 | 588,698 | ||||||
Vestel Elektronik Sanayi ve TASb | 771,286 | 831,507 | ||||||
|
| |||||||
11,498,045 | ||||||||
HOUSEWARES — 1.04% |
| |||||||
Anadolu Cam Sanayii ASa,b | 762,471 | 956,208 | ||||||
Turkiye Sise ve Cam Fabrikalari AS | 3,323,972 | 4,881,607 | ||||||
|
| |||||||
5,837,815 | ||||||||
INSURANCE — 0.95% |
| |||||||
Aksigorta ASa | 938,086 | 1,011,330 | ||||||
Anadolu Anonim Turk Sigorta Sirketia,b | 1,532,848 | 767,246 | ||||||
Anadolu Hayat Emeklilik ASa | 459,845 | 1,077,495 | ||||||
Yapi Kredi Sigorta ASa | 275,639 | 2,494,025 | ||||||
|
| |||||||
5,350,096 |
Security | Shares | Value | ||||||
IRON & STEEL — 2.28% |
| |||||||
Eregli Demir ve Celik Fabrikalari TAS | 7,137,903 | $ | 7,970,047 | |||||
Izmir Demir Celik Sanayi ASa,b | 579,055 | 1,340,899 | ||||||
Kardemir Karabuk Demir Celik Sanayi ve TAS Class Aa | 922,738 | 710,560 | ||||||
Kardemir Karabuk Demir Celik Sanayi ve TAS Class Ba | 458,743 | 572,782 | ||||||
Kardemir Karabuk Demir Celik Sanayi ve TAS Class Da | 3,485,479 | 2,223,897 | ||||||
|
| |||||||
12,818,185 | ||||||||
LODGING — 0.15% |
| |||||||
Net Holding ASa,b | 981,098 | 868,825 | ||||||
|
| |||||||
868,825 | ||||||||
MANUFACTURING — 0.34% |
| |||||||
Trakya Cam Sanayii ASa,b | 1,607,374 | 1,909,699 | ||||||
|
| |||||||
1,909,699 | ||||||||
MEDIA — 0.34% |
| |||||||
Dogan Yayin Holding ASa,b | 3,869,532 | 1,426,026 | ||||||
Hurriyet Gazetecilik ve Matbaacilik ASa,b | 1,057,657 | 494,491 | ||||||
|
| |||||||
1,920,517 | ||||||||
METAL FABRICATE & HARDWARE — 0.18% |
| |||||||
Borusan Mannesmann Boru Sanayi ve TASa | 65,143 | 1,035,523 | ||||||
|
| |||||||
1,035,523 | ||||||||
MINING — 1.83% |
| |||||||
Koza Altin Isletmeleri AS | 293,259 | 5,774,688 | ||||||
Koza Anadolu Metal Madencilik Isletmeleri ASa,b | 1,345,693 | 3,049,562 | ||||||
Park Elektrik Uretim Madencilik Sanayi ve TASa | 399,306 | 1,458,371 | ||||||
|
| |||||||
10,282,621 | ||||||||
OIL & GAS — 3.93% |
| |||||||
Turkiye Petrol Rafinerileri AS | 963,304 | 22,041,993 | ||||||
|
| |||||||
22,041,993 | ||||||||
PHARMACEUTICALS — 0.53% |
| |||||||
Deva Holding ASb | 306,533 | 360,815 | ||||||
EIS Eczacibasi Ilac Sanayi ve TAS | 1,272,632 | 1,301,997 |
SCHEDULESOF INVESTMENTS | 41 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI TURKEY INVESTABLE MARKET INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Selcuk Ecza Deposu Ticaret ve Sanayi AS | 1,189,864 | $ | 1,322,035 | |||||
|
| |||||||
2,984,847 | ||||||||
REAL ESTATE — 1.25% |
| |||||||
Emlak Konut Gayrimenkul Yatirim Ortakligi AS | 4,808,867 | 7,035,882 | ||||||
|
| |||||||
7,035,882 | ||||||||
REAL ESTATE INVESTMENT TRUSTS — 1.01% |
| |||||||
Akmerkez Gayrimenkul Yatirim Ortakligi AS | 158,275 | 1,645,388 | ||||||
Is Gayrimenkul Yatirim Ortakligi ASa | 2,092,087 | 1,588,009 | ||||||
Saf Gayrimenkul Yatirim Ortakligi AS | 2,038,520 | 874,589 | ||||||
Sinpas Gayrimenkul Yatirim Ortakligi ASa | 1,149,635 | 815,725 | ||||||
Vakif Gayrimenkul Yatirim Ortakligi ASb | 402,336 | 759,062 | ||||||
|
| |||||||
5,682,773 | ||||||||
RETAIL — 0.63% |
| |||||||
Boyner Buyuk Magazacilik ASa,b | 282,247 | 594,596 | ||||||
Dogus Otomotiv Servis ve TAS | 594,866 | 2,113,712 | ||||||
Turcas Petrolculuk ASa | 517,308 | 825,167 | ||||||
|
| |||||||
3,533,475 | ||||||||
TELECOMMUNICATIONS — 9.35% |
| |||||||
Nortel Networks Netas Telekomunikasyon ASa | 174,804 | 1,278,784 | ||||||
Turk Telekomunikasyon AS | 4,038,707 | 15,994,439 | ||||||
Turkcell Iletisim Hizmetleri ASb | 5,923,472 | 35,187,975 | ||||||
|
| |||||||
52,461,198 | ||||||||
TEXTILES — 0.09% |
| |||||||
Polyester Sanayi ASb | 828,873 | 510,623 | ||||||
|
| |||||||
510,623 | ||||||||
TRANSPORTATION — 0.09% |
| |||||||
Celebi Hava Servisi ASa,b | 46,524 | 484,931 | ||||||
|
| |||||||
484,931 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $612,448,912) | 561,294,434 |
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS — 3.98% |
| |||||||
MONEY MARKET FUNDS — 3.98% | ||||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.23%c,d,e | 20,581,494 | $ | 20,581,494 | |||||
BlackRock Cash Funds: Prime, | ||||||||
0.23%c,d,e | 1,559,694 | 1,559,694 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%c,d | 161,359 | 161,359 | ||||||
|
| |||||||
22,302,547 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $22,302,547) | 22,302,547 | |||||||
|
| |||||||
TOTAL INVESTMENTS | ||||||||
(Cost: $634,751,459) | 583,596,981 | |||||||
Other Assets, Less Liabilities — (3.98)% |
| (22,312,696 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 561,284,285 | |||||
|
|
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.
42 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 99.74% |
| |||||||
ADVERTISING — 0.14% |
| |||||||
Interpublic Group of Companies Inc. (The) | 4,890 | $ | 52,030 | |||||
Omnicom Group Inc. | 2,989 | 153,545 | ||||||
|
| |||||||
205,575 | ||||||||
AEROSPACE & DEFENSE — 1.66% |
| |||||||
Boeing Co. (The) | 7,816 | 558,062 | ||||||
General Dynamics Corp. | 3,372 | 220,900 | ||||||
L-3 Communications Holdings Inc. | 1,055 | 74,103 | ||||||
Lockheed Martin Corp. | 3,039 | 276,974 | ||||||
Northrop Grumman Corp. | 2,626 | 175,653 | ||||||
Raytheon Co. | 3,657 | 206,694 | ||||||
Rockwell Collins Inc. | 1,504 | 73,501 | ||||||
TransDigm Group Inc.a,b | 537 | 74,439 | ||||||
United Technologies Corp. | 9,517 | 759,932 | ||||||
|
| |||||||
2,420,258 | ||||||||
AGRICULTURE — 2.11% |
| |||||||
Altria Group Inc. | 22,327 | 758,225 | ||||||
Archer-Daniels-Midland Co. | 7,256 | 194,098 | ||||||
Bunge Ltd. | 1,600 | 101,840 | ||||||
Lorillard Inc. | 1,430 | 179,479 | ||||||
Philip Morris International Inc. | 18,714 | 1,671,160 | ||||||
Reynolds American Inc. | 3,740 | 172,414 | ||||||
|
| |||||||
3,077,216 | ||||||||
AIRLINES — 0.04% |
| |||||||
Delta Air Lines Inc.a | 2,345 | 20,284 | ||||||
Southwest Airlines Co. | 2,144 | 19,168 | ||||||
United Continental Holdings Inc.a,b | 949 | 17,509 | ||||||
|
| |||||||
56,961 | ||||||||
APPAREL — 0.57% |
| |||||||
Coach Inc. | 3,155 | 183,400 | ||||||
Nike Inc. Class B | 4,042 | 393,529 | ||||||
Ralph Lauren Corp. | 686 | 108,834 | ||||||
VF Corp. | 959 | 146,420 | ||||||
|
| |||||||
832,183 | ||||||||
AUTO MANUFACTURERS — 0.48% |
| |||||||
Ford Motor Co. | 39,102 | 365,213 | ||||||
General Motors Co.a | 8,657 | 184,827 | ||||||
PACCAR Inc. | 3,719 | 148,425 | ||||||
|
| |||||||
698,465 |
Security | Shares | Value | ||||||
AUTO PARTS & EQUIPMENT — 0.37% |
| |||||||
Autoliv Inc. | 1,055 | $ | 62,551 | |||||
BorgWarner Inc.a | 1,266 | 87,075 | ||||||
Delphi Automotive PLCa | 3,440 | 104,198 | ||||||
Goodyear Tire & Rubber Co. (The)a | 2,794 | 34,087 | ||||||
Johnson Controls Inc. | 7,466 | 203,150 | ||||||
TRW Automotive Holdings Corp.a | 1,181 | 51,621 | ||||||
|
| |||||||
542,682 | ||||||||
BANKS — 6.30% |
| |||||||
Bank of America Corp. | 118,318 | 945,361 | ||||||
Bank of New York Mellon Corp. (The) | 13,086 | 294,958 | ||||||
BB&T Corp. | 7,697 | 242,763 | ||||||
Capital One Financial Corp. | 5,741 | 324,539 | ||||||
CIT Group Inc.a | 2,087 | 78,805 | ||||||
Citigroup Inc. | 32,192 | 956,424 | ||||||
Comerica Inc. | 2,142 | 65,781 | ||||||
Fifth Third Bancorp | 10,094 | 152,823 | ||||||
First Republic Bank | 995 | 32,527 | ||||||
Goldman Sachs Group Inc. (The) | 5,127 | 542,026 | ||||||
J.P. Morgan Chase & Co. | 41,784 | 1,551,858 | ||||||
KeyCorp | 10,644 | 89,729 | ||||||
M&T Bank Corp. | 1,265 | 109,929 | ||||||
Morgan Stanley | 16,298 | 244,470 | ||||||
Northern Trust Corp. | 2,390 | 110,992 | ||||||
PNC Financial Services Group Inc. (The)c | 5,825 | 362,082 | ||||||
Regions Financial Corp. | 15,577 | 108,416 | ||||||
State Street Corp. | 5,399 | 224,598 | ||||||
SunTrust Banks Inc. | 5,911 | 148,780 | ||||||
U.S. Bancorp | 20,783 | 694,360 | ||||||
Wells Fargo & Co. | 55,409 | 1,885,568 | ||||||
|
| |||||||
9,166,789 | ||||||||
BEVERAGES — 2.44% |
| |||||||
Beam Inc. | 1,566 | 91,392 | ||||||
Brown-Forman Corp. Class B NVS | 1,364 | 87,432 | ||||||
Coca-Cola Co. (The) | 44,556 | 1,666,394 | ||||||
Coca-Cola Enterprises Inc. | 3,320 | 98,040 | ||||||
Constellation Brands Inc. Class Aa | 1,813 | 59,720 | ||||||
Dr Pepper Snapple Group Inc. | 2,322 | 104,049 | ||||||
Green Mountain Coffee Roasters Inc.a,b | 1,508 | 36,660 | ||||||
Molson Coors Brewing Co. Class B NVS | 1,631 | 72,645 | ||||||
Monster Beverage Corp.a | 1,653 | 97,411 | ||||||
PepsiCo Inc. | 17,160 | 1,242,899 | ||||||
|
| |||||||
3,556,642 |
SCHEDULESOF INVESTMENTS | 43 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI USA INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
BIOTECHNOLOGY — 1.74% |
| |||||||
Alexion Pharmaceuticals Inc.a | 2,113 | $ | 226,535 | |||||
Amgen Inc. | 8,533 | 716,089 | ||||||
Biogen Idec Inc.a | 2,501 | 366,621 | ||||||
Celgene Corp.a | 4,841 | 348,746 | ||||||
Gilead Sciences Inc.a | 8,318 | 479,865 | ||||||
Illumina Inc.a | 1,376 | 57,902 | ||||||
Life Technologies Corp.a | 1,942 | 92,653 | ||||||
Regeneron Pharmaceuticals Inc.a | 820 | 121,401 | ||||||
Vertex Pharmaceuticals Inc.a | 2,320 | 123,726 | ||||||
|
| |||||||
2,533,538 | ||||||||
BUILDING MATERIALS — 0.07% |
| |||||||
Martin Marietta Materials Inc. | 520 | 39,718 | ||||||
Masco Corp. | 3,937 | 55,748 | ||||||
|
| |||||||
95,466 | ||||||||
CHEMICALS — 2.40% |
| |||||||
Air Products and Chemicals Inc. | 2,330 | 192,411 | ||||||
Airgas Inc. | 732 | 60,807 | ||||||
Albemarle Corp. | 973 | 53,252 | ||||||
Celanese Corp. Series A | 1,757 | 67,223 | ||||||
CF Industries Holdings Inc. | 723 | 149,668 | ||||||
Dow Chemical Co. (The) | 13,135 | 384,987 | ||||||
E.I. du Pont de Nemours and Co. | 10,303 | 512,574 | ||||||
Eastman Chemical Co. | 1,691 | 93,445 | ||||||
Ecolab Inc. | 3,222 | 206,305 | ||||||
FMC Corp. | 1,504 | 81,697 | ||||||
International Flavors & Fragrances Inc. | 885 | 53,560 | ||||||
LyondellBasell Industries NV Class A | 3,500 | 170,940 | ||||||
Monsanto Co. | 5,853 | 509,855 | ||||||
Mosaic Co. (The) | 3,253 | 188,381 | ||||||
PPG Industries Inc. | 1,681 | 184,944 | ||||||
Praxair Inc. | 3,290 | 347,095 | ||||||
Sherwin-Williams Co. (The) | 956 | 136,785 | ||||||
Sigma-Aldrich Corp. | 1,314 | 93,333 | ||||||
|
| |||||||
3,487,262 | ||||||||
COAL — 0.10% |
| |||||||
CONSOL Energy Inc. | 2,528 | 76,346 | ||||||
Peabody Energy Corp. | 2,983 | 64,522 | ||||||
|
| |||||||
140,868 | ||||||||
COMMERCIAL SERVICES — 1.20% |
| |||||||
Alliance Data Systems Corp.a,b | 551 | 75,845 | ||||||
Automatic Data Processing Inc. | 5,373 | 312,064 |
Security | Shares | Value | ||||||
Equifax Inc. | 1,354 | $ | 61,986 | |||||
H&R Block Inc. | 3,206 | 53,091 | ||||||
Hertz Global Holdings Inc.a | 2,970 | 42,115 | ||||||
Iron Mountain Inc. | 1,410 | 46,248 | ||||||
Manpower Inc. | 888 | 32,954 | ||||||
MasterCard Inc. Class A | 1,197 | 506,211 | ||||||
Moody’s Corp. | 2,235 | 88,506 | ||||||
Paychex Inc. | 3,623 | 120,501 | ||||||
Quanta Services Inc.a | 2,349 | 56,376 | ||||||
Robert Half International Inc. | 1,497 | 39,371 | ||||||
SAIC Inc. | 3,123 | 38,132 | ||||||
SEI Investments Co. | 1,547 | 33,647 | ||||||
Total System Services Inc. | 1,737 | 40,264 | ||||||
Verisk Analytics Inc. Class Aa | 1,568 | 76,079 | ||||||
Western Union Co. | 6,714 | 118,234 | ||||||
|
| |||||||
1,741,624 | ||||||||
COMPUTERS — 8.10% |
| |||||||
Accenture PLC Class A | 7,071 | 435,574 | ||||||
Apple Inc. | 10,260 | 6,825,362 | ||||||
Cognizant Technology Solutions Corp. Class Aa | 3,341 | 214,760 | ||||||
Computer Sciences Corp. | 1,703 | 54,854 | ||||||
Dell Inc.a | 16,309 | 172,712 | ||||||
EMC Corp.a | 23,060 | 606,247 | ||||||
Hewlett-Packard Co. | 21,693 | 366,178 | ||||||
IHS Inc. Class Aa,b | 627 | 71,503 | ||||||
International Business Machines Corp. | 12,024 | 2,342,876 | ||||||
NetApp Inc.a | 4,000 | 138,080 | ||||||
SanDisk Corp.a | 2,687 | 110,758 | ||||||
Seagate Technology PLC | 4,198 | 134,378 | ||||||
Synopsys Inc.a | 1,607 | 53,079 | ||||||
Teradata Corp.a | 1,860 | 142,067 | ||||||
Western Digital Corp.a | 2,591 | 108,356 | ||||||
|
| |||||||
11,776,784 | ||||||||
COSMETICS & PERSONAL CARE — 1.93% |
| |||||||
Avon Products Inc. | 4,825 | 74,546 | ||||||
Colgate-Palmolive Co. | 5,236 | 556,639 | ||||||
Estee Lauder Companies Inc. (The) Class A | 2,606 | 156,230 | ||||||
Procter & Gamble Co. (The) | 30,066 | 2,020,135 | ||||||
|
| |||||||
2,807,550 |
44 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI USA INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
DISTRIBUTION & WHOLESALE — 0.32% |
| |||||||
Arrow Electronics Inc.a,b | 1,255 | $ | 45,494 | |||||
Fastenal Co. | 3,083 | 132,846 | ||||||
Fossil Inc.a | 586 | 49,781 | ||||||
Genuine Parts Co. | 1,716 | 108,382 | ||||||
W.W. Grainger Inc. | 657 | 135,316 | ||||||
|
| |||||||
471,819 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 2.29% |
| |||||||
Affiliated Managers Group Inc.a | 568 | 66,808 | ||||||
American Express Co. | 11,365 | 662,580 | ||||||
Ameriprise Financial Inc. | 2,392 | 131,345 | ||||||
BlackRock Inc.c | 1,445 | 254,855 | ||||||
Charles Schwab Corp. (The) | 11,990 | 161,745 | ||||||
CME Group Inc. | 3,460 | 189,954 | ||||||
Discover Financial Services | 5,814 | 225,176 | ||||||
Eaton Vance Corp. | 1,283 | 34,756 | ||||||
Franklin Resources Inc. | 1,654 | 194,180 | ||||||
IntercontinentalExchange Inc.a | 799 | 109,223 | ||||||
Invesco Ltd. | 4,977 | 117,855 | ||||||
Legg Mason Inc. | 1,456 | 35,788 | ||||||
NASDAQ OMX Group Inc. (The) | 1,427 | 32,636 | ||||||
NYSE Euronext Inc. | 2,745 | 68,762 | ||||||
SLM Corp. | 5,349 | 84,247 | ||||||
T. Rowe Price Group Inc. | 2,817 | 173,076 | ||||||
TD Ameritrade Holding Corp. | 2,399 | 41,047 | ||||||
Visa Inc. Class A | 5,798 | 743,594 | ||||||
|
| |||||||
3,327,627 | ||||||||
ELECTRIC — 3.11% |
| |||||||
AES Corp. (The)a | 7,132 | 81,233 | ||||||
Alliant Energy Corp. | 1,228 | 54,130 | ||||||
Ameren Corp. | 2,666 | 87,232 | ||||||
American Electric Power Co. Inc. | 5,314 | 228,449 | ||||||
Calpine Corp.a | 3,491 | 61,267 | ||||||
CMS Energy Corp. | 2,905 | 67,018 | ||||||
Consolidated Edison Inc. | 3,238 | 196,288 | ||||||
Dominion Resources Inc. | 6,284 | 329,784 | ||||||
DTE Energy Co. | 1,885 | 110,084 | ||||||
Duke Energy Corp. | 7,745 | 501,721 | ||||||
Edison International | 3,387 | 148,317 | ||||||
Entergy Corp. | 1,938 | 131,939 | ||||||
Exelon Corp. | 9,384 | 342,234 | ||||||
FirstEnergy Corp. | 4,605 | 201,239 |
Security | Shares | Value | ||||||
Integrys Energy Group Inc. | 858 | $ | 46,323 | |||||
MDU Resources Group Inc. | 1,961 | 42,260 | ||||||
NextEra Energy Inc. | 4,360 | 293,472 | ||||||
Northeast Utilities | 3,434 | 129,359 | ||||||
NRG Energy Inc. | 2,524 | 53,862 | ||||||
Pepco Holdings Inc. | 2,533 | 48,912 | ||||||
PG&E Corp. | 4,646 | 201,683 | ||||||
Pinnacle West Capital Corp. | 1,209 | 62,106 | ||||||
PPL Corp. | 6,375 | 186,979 | ||||||
Public Service Enterprise Group Inc. | 5,567 | 176,251 | ||||||
SCANA Corp. | 1,367 | 64,741 | ||||||
Southern Co. (The) | 9,544 | 432,630 | ||||||
Wisconsin Energy Corp. | 2,527 | 95,925 | ||||||
Xcel Energy Inc. | 5,341 | 148,960 | ||||||
�� |
|
| ||||||
4,524,398 | ||||||||
ELECTRICAL COMPONENTS & EQUIPMENT — 0.38% |
| |||||||
AMETEK Inc. | 2,685 | 92,122 | ||||||
Emerson Electric Co. | 8,051 | 408,347 | ||||||
Energizer Holdings Inc. | 715 | 49,264 | ||||||
|
| |||||||
549,733 | ||||||||
ELECTRONICS — 1.22% |
| |||||||
Agilent Technologies Inc. | 3,843 | 142,806 | ||||||
Amphenol Corp. Class A | 1,760 | 107,131 | ||||||
Avnet Inc.a,b | 1,610 | 51,858 | ||||||
Flextronics International Ltd.a | 7,526 | 50,650 | ||||||
FLIR Systems Inc. | 1,708 | 33,818 | ||||||
Garmin Ltd.b | 1,266 | 51,083 | ||||||
Honeywell International Inc. | 8,141 | 475,841 | ||||||
Sensata Technologies Holding NVa | 966 | 29,009 | ||||||
TE Connectivity Ltd. | 4,703 | 165,405 | ||||||
Thermo Fisher Scientific Inc. | 4,048 | 232,153 | ||||||
Trimble Navigation Ltd.a | 1,365 | 66,953 | ||||||
Tyco International Ltd. | 5,092 | 287,087 | ||||||
Waters Corp.a,b | 982 | 78,747 | ||||||
|
| |||||||
1,772,541 | ||||||||
ENGINEERING & CONSTRUCTION — 0.16% |
| |||||||
Fluor Corp. | 1,864 | 95,996 | ||||||
Jacobs Engineering Group Inc.a,b | 1,454 | 57,491 | ||||||
KBR Inc. | 1,642 | 44,482 | ||||||
URS Corp. | 808 | 29,419 | ||||||
|
| |||||||
227,388 |
SCHEDULESOF INVESTMENTS | 45 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI USA INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
ENTERTAINMENT — 0.04% |
| |||||||
Dolby Laboratories Inc. Class Aa | 515 | $ | 17,088 | |||||
International Game Technology | 3,205 | 39,389 | ||||||
|
| |||||||
56,477 | ||||||||
ENVIRONMENTAL CONTROL — 0.24% |
| |||||||
Republic Services Inc. | 3,449 | 95,365 | ||||||
Stericycle Inc.a,b | 946 | 86,578 | ||||||
Waste Management Inc. | 4,812 | 166,399 | ||||||
|
| |||||||
348,342 | ||||||||
FOOD — 1.77% |
| |||||||
Campbell Soup Co. | 2,054 | 72,178 | ||||||
ConAgra Foods Inc. | 4,602 | 115,556 | ||||||
General Mills Inc. | 7,096 | 279,086 | ||||||
H.J. Heinz Co. | 3,496 | 194,797 | ||||||
Hershey Co. (The) | 1,690 | 121,376 | ||||||
Hormel Foods Corp. | 1,642 | 47,158 | ||||||
J.M. Smucker Co. (The) | 1,224 | 104,003 | ||||||
Kellogg Co. | 2,763 | 139,946 | ||||||
Kraft Foods Inc. Class A | 18,495 | 768,097 | ||||||
Kroger Co. (The) | 5,846 | 130,249 | ||||||
McCormick & Co. Inc. NVS | 1,318 | 80,978 | ||||||
Ralcorp Holdings Inc.a | 616 | 43,711 | ||||||
Safeway Inc. | 2,635 | 41,238 | ||||||
Sysco Corp. | 6,477 | 196,253 | ||||||
Tyson Foods Inc. Class A | 3,286 | 51,459 | ||||||
Whole Foods Market Inc. | 1,922 | 185,953 | ||||||
|
| |||||||
2,572,038 | ||||||||
FOREST PRODUCTS & PAPER — 0.15% |
| |||||||
International Paper Co. | 4,566 | 157,801 | ||||||
MeadWestvaco Corp. | 1,927 | 55,420 | ||||||
|
| |||||||
213,221 | ||||||||
GAS — 0.23% |
| |||||||
CenterPoint Energy Inc. | 4,513 | 92,020 | ||||||
NiSource Inc. | 3,147 | 76,598 | ||||||
Sempra Energy | 2,523 | 167,023 | ||||||
|
| |||||||
335,641 | ||||||||
HAND & MACHINE TOOLS — 0.08% |
| |||||||
Stanley Black & Decker Inc. | 1,798 | 118,272 | ||||||
|
| |||||||
118,272 | ||||||||
HEALTH CARE — PRODUCTS — 1.76% |
| |||||||
Baxter International Inc. | 6,104 | 358,183 | ||||||
Becton, Dickinson and Co. | 2,224 | 168,980 |
Security | Shares | Value | ||||||
Boston Scientific Corp.a,b | 15,541 | $ | 83,921 | |||||
C.R. Bard Inc. | 874 | 85,748 | ||||||
CareFusion Corp.a | 2,441 | 64,125 | ||||||
Covidien PLC | 5,281 | 296,000 | ||||||
Edwards Lifesciences Corp.a,b | 1,249 | 127,535 | ||||||
Henry Schein Inc.a,b | 981 | 75,351 | ||||||
Hologic Inc.a,b | 2,982 | 58,537 | ||||||
Hospira Inc.a | 1,831 | 61,485 | ||||||
Intuitive Surgical Inc.a | 436 | 214,420 | ||||||
Medtronic Inc. | 11,380 | 462,711 | ||||||
St. Jude Medical Inc. | 3,440 | 129,894 | ||||||
Stryker Corp. | 3,343 | 178,048 | ||||||
Varian Medical Systems Inc.a,b | 1,236 | 72,664 | ||||||
Zimmer Holdings Inc. | 1,916 | 118,371 | ||||||
|
| |||||||
2,555,973 | ||||||||
HEALTH CARE — SERVICES — 1.15% |
| |||||||
Aetna Inc. | 3,788 | 145,497 | ||||||
Cigna Corp. | 3,163 | 144,771 | ||||||
Coventry Health Care Inc. | 1,563 | 65,068 | ||||||
DaVita Inc.a | 1,047 | 101,842 | ||||||
HCA Holdings Inc. | 1,908 | 54,473 | ||||||
Humana Inc. | 1,791 | 125,513 | ||||||
Laboratory Corp. of America Holdingsa | 1,064 | 93,579 | ||||||
Quest Diagnostics Inc. | 1,762 | 106,548 | ||||||
UnitedHealth Group Inc. | 11,383 | 618,097 | ||||||
WellPoint Inc. | 3,629 | 217,268 | ||||||
|
| |||||||
1,672,656 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 0.03% |
| |||||||
Leucadia National Corp. | 2,281 | 48,768 | ||||||
|
| |||||||
48,768 | ||||||||
HOME BUILDERS — 0.08% |
| |||||||
D.R. Horton Inc. | 3,191 | 60,597 | ||||||
Toll Brothers Inc.a,b | 1,657 | 54,217 | ||||||
|
| |||||||
114,814 | ||||||||
HOME FURNISHINGS — 0.04% |
| |||||||
Whirlpool Corp. | 846 | 63,839 | ||||||
|
| |||||||
63,839 | ||||||||
HOUSEHOLD PRODUCTS & WARES — 0.40% |
| |||||||
Avery Dennison Corp. | 1,165 | 36,383 | ||||||
Church & Dwight Co. Inc. | 1,523 | 83,369 | ||||||
Clorox Co. (The) | 1,351 | 98,285 | ||||||
Kimberly-Clark Corp. | 4,313 | 360,567 | ||||||
|
| |||||||
578,604 |
46 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI USA INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
HOUSEWARES — 0.04% |
| |||||||
Newell Rubbermaid Inc. | 3,167 | $ | 56,784 | |||||
|
| |||||||
56,784 | ||||||||
INSURANCE — 3.15% |
| |||||||
ACE Ltd. | 3,726 | 274,718 | ||||||
Aflac Inc. | 5,160 | 238,289 | ||||||
Alleghany Corp.a | 141 | 47,538 | ||||||
Allstate Corp. (The) | 5,381 | 200,604 | ||||||
American International Group Inc.a | 7,153 | 245,562 | ||||||
Aon PLC | 3,383 | 175,781 | ||||||
Arch Capital Group Ltd.a,b | 1,504 | 60,025 | ||||||
Assurant Inc. | 959 | 33,805 | ||||||
Axis Capital Holdings Ltd.b | 1,286 | 43,814 | ||||||
Berkshire Hathaway Inc. Class Ba | 10,083 | 850,400 | ||||||
Chubb Corp. (The) | 2,967 | 219,232 | ||||||
Cincinnati Financial Corp. | 1,716 | 66,340 | ||||||
Everest Re Group Ltd. | 568 | 58,879 | ||||||
Fidelity National Financial Inc. Class A | 2,188 | 41,222 | ||||||
Genworth Financial Inc. Class Aa | 5,381 | 28,465 | ||||||
Hartford Financial Services Group Inc. (The) | 4,615 | 82,747 | ||||||
Lincoln National Corp. | 3,130 | 72,679 | ||||||
Loews Corp. | 3,470 | 141,055 | ||||||
Marsh & McLennan Companies Inc. | 6,010 | 205,362 | ||||||
MetLife Inc. | 9,313 | 317,853 | ||||||
PartnerRe Ltd. | 708 | 51,967 | ||||||
Principal Financial Group Inc. | 3,300 | 90,552 | ||||||
Progressive Corp. (The) | 6,364 | 124,289 | ||||||
Prudential Financial Inc. | 5,133 | 279,800 | ||||||
RenaissanceRe Holdings Ltd.b | 575 | 44,419 | ||||||
Torchmark Corp. | 1,094 | 55,991 | ||||||
Travelers Companies Inc. (The) | 4,268 | 276,310 | ||||||
Unum Group | 3,135 | 61,164 | ||||||
W.R. Berkley Corp. | 1,326 | 49,566 | ||||||
Willis Group Holdings PLC | 1,910 | 71,281 | ||||||
XL Group PLC | 3,378 | 78,099 | ||||||
|
| |||||||
4,587,808 | ||||||||
INTERNET — 3.37% |
| |||||||
Amazon.com Inc.a | 3,955 | 981,750 | ||||||
eBay Inc.a | 12,763 | 605,860 | ||||||
Equinix Inc.a | 530 | 104,754 | ||||||
Expedia Inc. | 1,002 | 51,463 | ||||||
F5 Networks Inc.a,b | 868 | 84,621 |
Security | Shares | Value | ||||||
Facebook Inc. Class Aa | 4,880 | $ | 88,230 | |||||
Google Inc. Class Aa | 2,853 | 1,954,562 | ||||||
Liberty Interactive Corp. Series Aa | 5,810 | 105,974 | ||||||
LinkedIn Corp. Class Aa | 689 | 73,930 | ||||||
Netflix Inc.a,b | 577 | 34,458 | ||||||
Priceline.com Inc.a | 546 | 330,095 | ||||||
Rackspace Hosting Inc.a | 1,211 | 72,636 | ||||||
Symantec Corp.a | 7,906 | 140,964 | ||||||
VeriSign Inc.a | 1,746 | 83,249 | ||||||
Yahoo! Inc.a | 12,778 | 187,198 | ||||||
|
| |||||||
4,899,744 | ||||||||
IRON & STEEL — 0.13% |
| |||||||
Allegheny Technologies Inc. | 1,147 | 33,997 | ||||||
Nucor Corp. | 3,471 | 130,683 | ||||||
United States Steel Corp.b | 1,628 | 31,665 | ||||||
|
| |||||||
196,345 | ||||||||
LEISURE TIME — 0.22% |
| |||||||
Carnival Corp. | 4,905 | 170,105 | ||||||
Harley-Davidson Inc. | 2,571 | 107,879 | ||||||
Royal Caribbean Cruises Ltd. | 1,574 | 42,530 | ||||||
|
| |||||||
320,514 | ||||||||
LODGING — 0.44% |
| |||||||
Las Vegas Sands Corp. | 4,527 | 191,900 | ||||||
Marriott International Inc. Class A | 2,922 | 110,101 | ||||||
MGM Resorts Internationala | 4,020 | 39,637 | ||||||
Starwood Hotels & Resorts Worldwide Inc. | 2,187 | 120,569 | ||||||
Wyndham Worldwide Corp. | 1,607 | 83,789 | ||||||
Wynn Resorts Ltd. | 888 | 91,615 | ||||||
|
| |||||||
637,611 | ||||||||
MACHINERY — 1.04% |
| |||||||
AGCO Corp.a,b | 1,082 | 45,541 | ||||||
Caterpillar Inc. | 7,167 | 611,560 | ||||||
Cummins Inc. | 2,000 | 194,220 | ||||||
Deere & Co. | 4,146 | 311,406 | ||||||
Flowserve Corp. | 611 | 78,000 | ||||||
Rockwell Automation Inc. | 1,574 | 113,423 | ||||||
Roper Industries Inc. | 1,080 | 111,013 | ||||||
Xylem Inc. | 2,024 | 49,163 | ||||||
|
| |||||||
1,514,326 | ||||||||
MANUFACTURING — 3.21% |
| |||||||
3M Co. | 7,233 | 669,776 | ||||||
Cooper Industries PLC | 1,768 | 129,329 |
SCHEDULESOF INVESTMENTS | 47 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI USA INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Danaher Corp. | 6,474 | $ | 346,812 | |||||
Dover Corp. | 2,013 | 116,372 | ||||||
Eaton Corp. | 3,532 | 157,951 | ||||||
General Electric Co. | 116,286 | 2,408,283 | ||||||
Illinois Tool Works Inc. | 4,713 | 279,434 | ||||||
Ingersoll-Rand PLC | 3,304 | 154,495 | ||||||
Leggett & Platt Inc. | 1,536 | 36,465 | ||||||
Pall Corp. | 1,265 | 70,220 | ||||||
Parker Hannifin Corp. | 1,657 | 132,527 | ||||||
Pentair Inc. | 1,073 | 45,602 | ||||||
SPX Corp. | 579 | 36,998 | ||||||
Textron Inc. | 3,133 | 83,714 | ||||||
|
| |||||||
4,667,978 | ||||||||
MEDIA — 3.42% |
| |||||||
Cablevision NY Group Class A | 2,204 | 32,950 | ||||||
CBS Corp. Class B NVS | 6,636 | 241,152 | ||||||
Charter Communications Inc. Class Aa | 445 | 34,621 | ||||||
Comcast Corp. Class A | 23,165 | 776,722 | ||||||
Comcast Corp. Class A Special NVS | 6,330 | 208,067 | ||||||
DIRECTVa | 7,186 | 374,319 | ||||||
Discovery Communications Inc. Series Aa | 1,615 | 88,567 | ||||||
Discovery Communications Inc. | 1,124 | 58,234 | ||||||
DISH Network Corp. Class A | 2,313 | 73,993 | ||||||
Liberty Global Inc. Series Aa | 1,506 | 83,237 | ||||||
Liberty Global Inc. Series C NVSa | 1,257 | 65,603 | ||||||
Liberty Media Corp. Series Aa | 1,146 | 119,505 | ||||||
McGraw-Hill Companies Inc. (The) | 2,787 | 142,694 | ||||||
News Corp. Class A NVS | 17,808 | 416,529 | ||||||
News Corp. Class B | 4,812 | 113,323 | ||||||
Nielsen Holdings NVa | 1,398 | 39,200 | ||||||
Scripps Networks Interactive Inc. Class A | 981 | 57,977 | ||||||
Sirius XM Radio Inc.a | 41,921 | 106,060 | ||||||
Time Warner Cable Inc. | 3,427 | 304,386 | ||||||
Time Warner Inc. | 10,532 | 437,605 | ||||||
Viacom Inc. Class B NVS | 5,227 | 261,402 | ||||||
Walt Disney Co. (The) | 18,631 | 921,675 | ||||||
Washington Post Co. (The) Class Bb | 52 | 18,330 | ||||||
|
| |||||||
4,976,151 | ||||||||
METAL FABRICATE & HARDWARE — 0.18% |
| |||||||
Precision Castparts Corp. | 1,588 | 255,795 | ||||||
|
| |||||||
255,795 |
Security | Shares | Value | ||||||
MINING — 0.56% |
| |||||||
Alcoa Inc. | 11,885 | $ | 101,736 | |||||
Freeport-McMoRan Copper & Gold Inc. | 10,449 | 377,313 | ||||||
Newmont Mining Corp. | 5,431 | 275,243 | ||||||
Vulcan Materials Co. | 1,423 | 55,383 | ||||||
|
| |||||||
809,675 | ||||||||
OFFICE & BUSINESS EQUIPMENT — 0.10% |
| |||||||
Pitney Bowes Inc. | 2,264 | 30,247 | ||||||
Xerox Corp. | 14,870 | 109,592 | ||||||
|
| |||||||
139,839 | ||||||||
OIL & GAS — 8.88% |
| |||||||
Anadarko Petroleum Corp. | 5,494 | 380,569 | ||||||
Apache Corp. | 4,295 | 368,296 | ||||||
Cabot Oil & Gas Corp. | 2,280 | 94,415 | ||||||
Chesapeake Energy Corp. | 7,306 | 141,371 | ||||||
Chevron Corp. | 21,645 | 2,427,703 | ||||||
Cimarex Energy Co. | 953 | 54,521 | ||||||
Cobalt International Energy Inc.a | 1,999 | 45,397 | ||||||
Concho Resources Inc.a | 1,098 | 98,535 | ||||||
ConocoPhillips | 13,181 | 748,549 | ||||||
Continental Resources Inc.a | 494 | 36,586 | ||||||
Denbury Resources Inc.a | 4,367 | 67,645 | ||||||
Devon Energy Corp. | 4,209 | 243,406 | ||||||
Diamond Offshore Drilling Inc. | 767 | 51,404 | ||||||
Energen Corp. | 770 | 39,308 | ||||||
Ensco PLC Class A | 2,555 | 146,580 | ||||||
EOG Resources Inc. | 2,959 | 320,460 | ||||||
EQT Corp. | 1,640 | 88,494 | ||||||
Exxon Mobil Corp. | 51,310 | 4,479,363 | ||||||
Helmerich & Payne Inc. | 1,169 | 53,353 | ||||||
Hess Corp. | 3,392 | 171,398 | ||||||
HollyFrontier Corp. | 2,172 | 87,510 | ||||||
Marathon Oil Corp. | 7,784 | 216,551 | ||||||
Marathon Petroleum Corp. | 3,738 | 193,441 | ||||||
Murphy Oil Corp. | 2,023 | 103,841 | ||||||
Nabors Industries Ltd.a | 3,222 | 47,589 | ||||||
Newfield Exploration Co.a | 1,476 | 48,162 | ||||||
Noble Corp.a | 2,766 | 105,495 | ||||||
Noble Energy Inc. | 1,952 | 171,581 | ||||||
Occidental Petroleum Corp. | 8,902 | 756,759 | ||||||
Phillips 66 | 6,517 | 273,714 | ||||||
Pioneer Natural Resources Co. | 1,280 | 124,621 |
48 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI USA INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Plains Exploration & Production Co.a | 1,409 | $ | 55,402 | |||||
QEP Resources Inc. | 1,962 | 56,290 | ||||||
Range Resources Corp. | 1,767 | 115,191 | ||||||
Rowan Companies PLCa | 1,353 | 47,599 | ||||||
Southwestern Energy Co.a | 3,876 | 120,660 | ||||||
Sunoco Inc. | 1,146 | 54,080 | ||||||
Ultra Petroleum Corp.a,b | 1,669 | 34,315 | ||||||
Valero Energy Corp. | 6,090 | 190,373 | ||||||
Whiting Petroleum Corp.a | 1,323 | 58,900 | ||||||
|
| |||||||
12,919,427 | ||||||||
OIL & GAS SERVICES — 1.68% |
| |||||||
Baker Hughes Inc. | 4,802 | 218,971 | ||||||
Cameron International Corp.a | 2,706 | 148,045 | ||||||
Core Laboratories NV | 518 | 63,295 | ||||||
FMC Technologies Inc.a | 2,656 | 124,407 | ||||||
Halliburton Co. | 10,165 | 333,005 | ||||||
National Oilwell Varco Inc. | 4,671 | 368,075 | ||||||
Schlumberger Ltd. | 14,639 | 1,059,571 | ||||||
Superior Energy Services Inc.a | 1,788 | 37,137 | ||||||
Weatherford International Ltd.a | 8,424 | 99,066 | ||||||
|
| |||||||
2,451,572 | ||||||||
PACKAGING & CONTAINERS — 0.16% |
| |||||||
Ball Corp. | 1,626 | 68,568 | ||||||
Crown Holdings Inc.a | 1,631 | 59,124 | ||||||
Owens-Illinois Inc.a | 1,714 | 29,961 | ||||||
Rock-Tenn Co. Class A | 780 | 52,081 | ||||||
Sealed Air Corp. | 2,001 | 28,554 | ||||||
|
| |||||||
238,288 | ||||||||
PHARMACEUTICALS — 6.76% |
| |||||||
Abbott Laboratories | 17,273 | 1,132,072 | ||||||
Allergan Inc. | 3,381 | 291,205 | ||||||
AmerisourceBergen Corp. | 2,775 | 106,893 | ||||||
Bristol-Myers Squibb Co. | 18,566 | 612,864 | ||||||
Cardinal Health Inc. | 3,829 | 151,437 | ||||||
DENTSPLY International Inc. | 1,540 | 55,856 | ||||||
Eli Lilly and Co. | 11,491 | 516,061 | ||||||
Express Scripts Holding Co.a | 8,847 | 553,999 | ||||||
Forest Laboratories Inc.a | 2,894 | 100,393 | ||||||
Herbalife Ltd. | 1,273 | 61,600 | ||||||
Johnson & Johnson | 30,106 | 2,030,048 | ||||||
McKesson Corp. | 2,583 | 225,005 | ||||||
Mead Johnson Nutrition Co. Class A | 2,235 | 163,893 |
Security | Shares | Value | ||||||
Merck & Co. Inc. | 33,384 | $ | 1,437,181 | |||||
Mylan Inc.a | 4,729 | 111,463 | ||||||
Omnicare Inc. | 1,248 | 40,410 | ||||||
Patterson Companies Inc. | 971 | 32,985 | ||||||
Perrigo Co. | 970 | 106,671 | ||||||
Pfizer Inc. | 82,164 | 1,960,433 | ||||||
Warner Chilcott PLC Class A | 1,914 | 26,069 | ||||||
Watson Pharmaceuticals Inc.a | 1,398 | 113,727 | ||||||
|
| |||||||
9,830,265 | ||||||||
PIPELINES — 0.57% |
| |||||||
Kinder Morgan Inc. | 6,171 | 220,737 | ||||||
Kinder Morgan Management LLCa | 1,097 | 81,310 | ||||||
ONEOK Inc. | 2,154 | 95,918 | ||||||
Spectra Energy Corp. | 7,183 | 202,991 | ||||||
Williams Companies Inc. (The) | 6,882 | 222,082 | ||||||
|
| |||||||
823,038 | ||||||||
REAL ESTATE — 0.04% |
| |||||||
CBRE Group Inc. Class Aa | 3,497 | 60,533 | ||||||
|
| |||||||
60,533 | ||||||||
REAL ESTATE INVESTMENT TRUSTS — 2.80% |
| |||||||
American Capital Agency Corp. | 3,686 | 128,420 | ||||||
American Tower Corp. | 4,345 | 305,888 | ||||||
Annaly Capital Management Inc. | 10,671 | 184,715 | ||||||
AvalonBay Communities Inc. | 1,046 | 148,030 | ||||||
Boston Properties Inc. | 1,649 | 184,902 | ||||||
Camden Property Trust | 889 | 61,723 | ||||||
Digital Realty Trust Inc.b | 1,340 | 99,843 | ||||||
Duke Realty Corp.b | 3,019 | 43,776 | ||||||
Equity Residential | 3,321 | 200,588 | ||||||
Federal Realty Investment Trust | 713 | 76,940 | ||||||
General Growth Properties Inc. | 4,606 | 94,792 | ||||||
HCP Inc.b | 4,615 | 211,644 | ||||||
Health Care REIT Inc. | 2,487 | 145,340 | ||||||
Host Hotels & Resorts Inc. | 7,949 | 121,620 | ||||||
Kimco Realty Corp. | 4,439 | 90,200 | ||||||
Liberty Property Trust | 1,277 | 47,096 | ||||||
Macerich Co. (The) | 1,459 | 86,913 | ||||||
Plum Creek Timber Co. Inc. | 1,789 | 73,224 | ||||||
Prologis Inc. | 5,049 | 172,524 | ||||||
Public Storage | 1,608 | 234,061 | ||||||
Rayonier Inc. | 1,343 | 65,794 | ||||||
Realty Income Corp. | 1,477 | 62,226 |
SCHEDULESOF INVESTMENTS | 49 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI USA INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Regency Centers Corp. | 996 | $ | 48,804 | |||||
Simon Property Group Inc. | 3,326 | 527,836 | ||||||
SL Green Realty Corp. | 992 | 79,955 | ||||||
UDR Inc. | 2,713 | 68,503 | ||||||
Ventas Inc. | 3,237 | 211,991 | ||||||
Vornado Realty Trustb | 1,835 | 148,947 | ||||||
Weyerhaeuser Co. | 5,944 | 148,065 | ||||||
|
| |||||||
4,074,360 | ||||||||
RETAIL — 6.54% |
| |||||||
Abercrombie & Fitch Co. Class A | 922 | 33,183 | ||||||
Advance Auto Parts Inc. | 827 | 58,816 | ||||||
AutoZone Inc.a | 376 | 135,977 | ||||||
Bed Bath & Beyond Inc.a | 2,550 | 171,284 | ||||||
Best Buy Co. Inc. | 3,151 | 55,899 | ||||||
CarMax Inc.a | 2,542 | 77,760 | ||||||
Chipotle Mexican Grill Inc.a,b | 347 | 100,158 | ||||||
Costco Wholesale Corp. | 4,745 | 464,393 | ||||||
CVS Caremark Corp. | 14,061 | 640,479 | ||||||
Darden Restaurants Inc. | 1,411 | 73,301 | ||||||
Dick’s Sporting Goods Inc. | 1,018 | 50,656 | ||||||
Dollar General Corp.a | 2,370 | 121,036 | ||||||
Dollar Tree Inc.a | 2,544 | 122,544 | ||||||
Family Dollar Stores Inc. | 1,093 | 69,559 | ||||||
GameStop Corp. Class Ab | 1,461 | 27,876 | ||||||
Gap Inc. (The) | 3,532 | 126,516 | ||||||
Home Depot Inc. (The) | 16,795 | 953,116 | ||||||
J.C. Penney Co. Inc.b | 1,805 | 47,074 | ||||||
Kohl’s Corp. | 2,499 | 130,448 | ||||||
Limited Brands Inc. | 2,721 | 132,241 | ||||||
Lowe’s Companies Inc. | 12,910 | 367,677 | ||||||
Lululemon Athletica Inc.a,b | 1,123 | 73,208 | ||||||
Macy’s Inc. | 4,537 | 182,886 | ||||||
McDonald’s Corp. | 11,146 | 997,456 | ||||||
Nordstrom Inc. | 1,821 | 105,308 | ||||||
O’Reilly Automotive Inc.a | 1,391 | 118,165 | ||||||
PetSmart Inc. | 1,189 | 84,324 | ||||||
PVH Corp. | 756 | 70,988 | ||||||
Ross Stores Inc. | 2,472 | 171,038 | ||||||
Sears Holdings Corp.a,b | 405 | 21,364 | ||||||
Staples Inc. | 7,488 | 81,769 | ||||||
Starbucks Corp. | 8,334 | 413,450 | ||||||
Target Corp. | 6,892 | 441,708 | ||||||
Tiffany & Co. | 1,386 | 85,863 |
Security | Shares | Value | ||||||
TJX Companies Inc. (The) | 8,129 | $ | 372,227 | |||||
Tractor Supply Co. | 807 | 77,052 | ||||||
Ulta Salon, Cosmetics & Fragrance Inc. | 657 | 61,758 | ||||||
Urban Outfitters Inc.a | 1,263 | 47,413 | ||||||
Wal-Mart Stores Inc. | 20,419 | 1,482,419 | ||||||
Walgreen Co. | 9,466 | 338,504 | ||||||
Yum! Brands Inc. | 5,051 | 321,850 | ||||||
|
| |||||||
9,508,743 | ||||||||
SAVINGS & LOANS — 0.10% |
| |||||||
Hudson City Bancorp Inc. | 5,183 | 37,266 | ||||||
New York Community Bancorp Inc. | 4,799 | 63,635 | ||||||
People’s United Financial Inc. | 3,846 | 46,036 | ||||||
|
| |||||||
146,937 | ||||||||
SEMICONDUCTORS — 3.06% |
| |||||||
Advanced Micro Devices Inc.a,b | 6,436 | 23,942 | ||||||
Altera Corp. | 3,569 | 133,231 | ||||||
Analog Devices Inc. | 3,290 | 130,745 | ||||||
Applied Materials Inc. | 13,972 | 163,333 | ||||||
Avago Technologies Ltd. | 2,535 | 92,705 | ||||||
Broadcom Corp. Class Aa | 5,480 | 194,704 | ||||||
Cree Inc.a,b | 1,213 | 34,207 | ||||||
Intel Corp. | 55,226 | 1,371,261 | ||||||
KLA-Tencor Corp. | 1,845 | 94,667 | ||||||
Lam Research Corp.a,b | 2,268 | 77,407 | ||||||
Linear Technology Corp. | 2,536 | 83,751 | ||||||
LSI Corp.a | 6,206 | 48,345 | ||||||
Marvell Technology Group Ltd. | 5,243 | 53,374 | ||||||
Maxim Integrated Products Inc. | 3,195 | 86,712 | ||||||
Microchip Technology Inc. | 2,135 | 74,191 | ||||||
Micron Technology Inc.a | 10,829 | 67,248 | ||||||
NVIDIA Corp.a | 6,829 | 95,811 | ||||||
QUALCOMM Inc. | 18,819 | 1,156,616 | ||||||
Texas Instruments Inc. | 12,552 | 364,510 | ||||||
Xilinx Inc. | 2,931 | 99,390 | ||||||
|
| |||||||
4,446,150 | ||||||||
SOFTWARE — 3.99% |
| |||||||
Activision Blizzard Inc. | 4,920 | 57,859 | ||||||
Adobe Systems Inc.a | 5,455 | 170,578 | ||||||
Akamai Technologies Inc.a | 1,945 | 72,957 | ||||||
ANSYS Inc.a | 1,024 | 71,373 | ||||||
Autodesk Inc.a | 2,559 | 79,457 | ||||||
BMC Software Inc.a | 1,746 | 72,284 |
50 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI USA INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
CA Inc. | 3,623 | $ | 94,307 | |||||
Cerner Corp.a | 1,603 | 117,243 | ||||||
Citrix Systems Inc.a | 2,058 | 159,886 | ||||||
Dun & Bradstreet Corp. (The) | 544 | 44,037 | ||||||
Electronic Arts Inc.a | 3,467 | 46,215 | ||||||
Fidelity National Information Services Inc. | 2,605 | 82,057 | ||||||
Fiserv Inc.a,b | 1,497 | 106,751 | ||||||
Intuit Inc. | 3,064 | 179,367 | ||||||
Microsoft Corp. | 82,980 | 2,557,444 | ||||||
Nuance Communications Inc.a | 2,701 | 64,419 | ||||||
Oracle Corp. | 43,671 | 1,382,187 | ||||||
Red Hat Inc.a | 2,112 | 118,356 | ||||||
Salesforce.com Inc.a | 1,442 | 209,350 | ||||||
VeriFone Systems Inc.a | 1,226 | 42,591 | ||||||
VMware Inc. Class Aa | 914 | 81,383 | ||||||
|
| |||||||
5,810,101 | ||||||||
TELECOMMUNICATIONS — 4.34% |
| |||||||
AT&T Inc. | 64,332 | 2,357,124 | ||||||
CenturyLink Inc. | 6,825 | 288,424 | ||||||
Cisco Systems Inc. | 58,777 | 1,121,465 | ||||||
Corning Inc. | 16,730 | 200,593 | ||||||
Crown Castle International Corp.a | 3,224 | 204,595 | ||||||
Frontier Communications Corp.b | 11,071 | 51,148 | ||||||
Harris Corp. | 1,226 | 57,659 | ||||||
Juniper Networks Inc.a,b | 5,841 | 101,867 | ||||||
Level 3 Communications Inc.a | 1,694 | 36,506 | ||||||
MetroPCS Communications Inc.a | 3,375 | 32,839 | ||||||
Motorola Solutions Inc. | 2,883 | 137,404 | ||||||
SBA Communications Corp. Class Aa | 1,340 | 80,105 | ||||||
Sprint Nextel Corp.a | 32,850 | 159,322 | ||||||
Verizon Communications Inc. | 31,186 | 1,339,127 | ||||||
Virgin Media Inc. | 2,903 | 80,036 | ||||||
Windstream Corp. | 6,388 | 63,050 | ||||||
|
| |||||||
6,311,264 | ||||||||
TEXTILES — 0.07% |
| |||||||
Cintas Corp. | 1,277 | 51,616 | ||||||
Mohawk Industries Inc.a | 631 | 45,464 | ||||||
|
| |||||||
97,080 | ||||||||
TOYS, GAMES & HOBBIES — 0.12% |
| |||||||
Hasbro Inc. | 1,277 | 47,900 | ||||||
Mattel Inc. | 3,771 | 132,513 | ||||||
|
| |||||||
180,413 |
Security | Shares | Value | ||||||
TRANSPORTATION — 1.62% |
| |||||||
C.H. Robinson Worldwide Inc. | 1,775 | $ | 100,483 | |||||
CSX Corp. | 11,401 | 256,066 | ||||||
Expeditors International of Washington Inc. | 2,322 | 85,008 | ||||||
FedEx Corp. | 3,296 | 288,829 | ||||||
J.B. Hunt Transport Services Inc. | 1,012 | 53,069 | ||||||
Kansas City Southern Industries Inc. | 1,204 | 93,105 | ||||||
Norfolk Southern Corp. | 3,574 | 258,972 | ||||||
Union Pacific Corp. | 5,249 | 637,439 | ||||||
United Parcel Service Inc. Class B | 7,971 | 588,340 | ||||||
|
| |||||||
2,361,311 | ||||||||
WATER — 0.05% |
| |||||||
American Water Works Co. Inc. | 1,968 | 72,560 | ||||||
|
| |||||||
72,560 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $130,519,814) |
| 145,086,626 | ||||||
RIGHTS — 0.00% |
| |||||||
INTERNET — 0.00% |
| |||||||
Liberty Venturesa,d | 100 | 995 | ||||||
|
| |||||||
995 | ||||||||
|
| |||||||
TOTAL RIGHTS |
| |||||||
(Cost: $656) |
| 995 | ||||||
SHORT-TERM INVESTMENTS — 1.26% |
| |||||||
MONEY MARKET FUNDS — 1.26% |
| |||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | ||||||||
0.23%c,e,f | 1,529,898 | 1,529,898 | ||||||
BlackRock Cash Funds: Prime, SL Agency Shares | ||||||||
0.23%c,e,f | 115,938 | 115,938 | ||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | ||||||||
0.06%c,e | 193,647 | 193,647 | ||||||
|
| |||||||
1,839,483 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $1,839,483) |
| 1,839,483 | ||||||
�� |
|
|
SCHEDULESOF INVESTMENTS | 51 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI USA INDEX FUND
August 31, 2012
Value | ||||||
TOTAL INVESTMENTS | ||||||
(Cost: $132,359,953) | $ | 146,927,104 | ||||
Other Assets, Less Liabilities — (1.00)% | (1,457,271 | ) | ||||
|
| |||||
NET ASSETS — 100.00% | $ | 145,469,833 | ||||
|
|
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 | Security valued using Level 3 inputs in accordance with management’s fair valuation policy. See Note 1. |
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.
52 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Assets and Liabilities
iSHARES®, INC.
August 31, 2012
iShares MSCI Brazil Index Fund | iShares MSCI Canada Index Fund | iShares MSCI Chile Investable Market Index Fund | ||||||||||
ASSETS | ||||||||||||
Investments, at cost: | ||||||||||||
Unaffiliated | $ | 5,517,641,070 | $ | 4,735,126,382 | $ | 411,566,410 | ||||||
Affiliated (Note 2) | 751,668 | 74,028,686 | 900,524 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments | $ | 5,518,392,738 | $ | 4,809,155,068 | $ | 412,466,934 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 7,345,894,797 | $ | 4,244,760,141 | $ | 548,130,822 | ||||||
Affiliated (Note 2) | 751,668 | 74,028,686 | 900,524 | |||||||||
|
|
|
|
|
| |||||||
Total fair value of investments | 7,346,646,465 | 4,318,788,827 | 549,031,346 | |||||||||
Foreign currencies, at valueb | 19,203,811 | 7,010,253 | — | |||||||||
Cash held at broker, at valuec | — | 1,013,119 | — | |||||||||
Receivables: | ||||||||||||
Investment securities sold | 22,195,333 | 17,097,115 | 2,986,288 | |||||||||
Dividends and interest | 19,776,625 | 6,707,552 | 65,682 | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 7,407,822,234 | 4,350,616,866 | 552,083,316 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 33,197,490 | 20,191,046 | 8,686 | |||||||||
Collateral for securities on loan (Note 5) | — | 73,852,977 | — | |||||||||
Capital shares redeemed | — | 96,457 | 2,981,330 | |||||||||
Futures variation margin | — | 44,971 | — | |||||||||
Investment advisory fees (Note 2) | 4,007,654 | 1,887,113 | 296,655 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 37,205,144 | 96,072,564 | 3,286,671 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 7,370,617,090 | $ | 4,254,544,302 | $ | 548,796,645 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | 6,831,551,708 | 5,002,441,634 | 504,815,303 | |||||||||
Undistributed (distributions in excess of) net investment income | (53,385,526 | ) | 12,529,913 | — | ||||||||
Accumulated net realized loss | (1,234,724,865 | ) | (270,065,289 | ) | (92,578,843 | ) | ||||||
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies | 1,827,175,773 | (490,361,956 | ) | 136,560,185 | ||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 7,370,617,090 | $ | 4,254,544,302 | $ | 548,796,645 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingd | 140,100,000 | 154,600,000 | 9,100,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 52.61 | $ | 27.52 | $ | 60.31 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $ —, $69,624,222 and $ —, respectively. See Note 5. |
b | Cost of foreign currencies: $19,171,921, $7,000,391 and $ —, respectively. |
c | Cost of cash held at broker: $ —, $992,144 and $ —, respectively. |
d | $0.001 par value, number of shares authorized: 500 million, 340.2 million and 200 million, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 53 |
Table of Contents
Statements of Assets and Liabilities (Continued)
iSHARES®, INC.
August 31, 2012
iShares MSCI Israel Capped Investable Market Index Fund | iShares MSCI Mexico Investable Market Index Fund | iShares MSCI South Africa Index Fund | ||||||||||
ASSETS | ||||||||||||
Investments, at cost: | ||||||||||||
Unaffiliated | $ | 103,109,027 | $ | 1,297,070,613 | $ | 499,779,322 | ||||||
Affiliated (Note 2) | 8,504,316 | 20,040,846 | 16,483,223 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments | $ | 111,613,343 | $ | 1,317,111,459 | $ | 516,262,545 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 68,654,584 | $ | 1,181,416,711 | $ | 470,645,052 | ||||||
Affiliated (Note 2) | 8,504,316 | 20,040,846 | 16,483,223 | |||||||||
|
|
|
|
|
| |||||||
Total fair value of investments | 77,158,900 | 1,201,457,557 | 487,128,275 | |||||||||
Foreign currencies, at valueb | 76,413 | 1,692,152 | 853,570 | |||||||||
Receivables: | ||||||||||||
Investment securities sold | 3,089,902 | — | — | |||||||||
Dividends and interest | 288,470 | 12,837 | 1,125,393 | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 80,613,685 | 1,203,162,546 | 489,107,238 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 3,172,908 | — | 468,246 | |||||||||
Collateral for securities on loan (Note 5) | 8,493,216 | 19,913,623 | 16,378,566 | |||||||||
Capital shares redeemed | — | — | 72,549 | |||||||||
Investment advisory fees (Note 2) | 35,073 | 549,371 | 265,699 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 11,701,197 | 20,462,994 | 17,185,060 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 68,912,488 | $ | 1,182,699,552 | $ | 471,922,178 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | 133,233,734 | 1,384,339,320 | 565,163,807 | |||||||||
Undistributed (distributions in excess of) net investment income | (3,903 | ) | 1,561,425 | (948,355 | ) | |||||||
Accumulated net realized loss | (29,863,351 | ) | (87,540,257 | ) | (63,143,743 | ) | ||||||
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies | (34,453,992 | ) | (115,660,936 | ) | (29,149,531 | ) | ||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 68,912,488 | $ | 1,182,699,552 | $ | 471,922,178 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingc | 1,850,000 | 19,400,000 | 7,300,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 37.25 | $ | 60.96 | $ | 64.65 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $8,155,682, $18,314,263 and $15,210,894, respectively. See Note 5. |
b | Cost of foreign currencies: $76,994, $1,699,186 and $864,018, respectively. |
c | $0.001 par value, number of shares authorized: 500 million, 255 million and 400 million, respectively. |
See notes to financial statements.
54 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Assets and Liabilities (Continued)
iSHARES®, INC.
August 31, 2012
iShares MSCI Turkey Investable Market Index Fund | iShares MSCI USA Index Fund | |||||||
ASSETS | ||||||||
Investments, at cost: | ||||||||
Unaffiliated | $ | 612,448,912 | $ | 129,943,835 | ||||
Affiliated (Note 2) | 22,302,547 | 2,416,118 | ||||||
|
|
|
| |||||
Total cost of investments | $ | 634,751,459 | $ | 132,359,953 | ||||
|
|
|
| |||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||
Unaffiliated | $ | 561,294,434 | $ | 144,470,684 | ||||
Affiliated (Note 2) | 22,302,547 | 2,456,420 | ||||||
|
|
|
| |||||
Total fair value of investments | 583,596,981 | 146,927,104 | ||||||
Foreign currencies, at valueb | 45,057 | — | ||||||
Receivables: | ||||||||
Investment securities sold | — | 840,475 | ||||||
Dividends and interest | 65,866 | 347,351 | ||||||
|
|
|
| |||||
Total Assets | 583,707,904 | 148,114,930 | ||||||
|
|
|
| |||||
LIABILITIES | ||||||||
Payables: | ||||||||
Investment securities purchased | — | 980,854 | ||||||
Collateral for securities on loan (Note 5) | 22,141,188 | 1,645,836 | ||||||
Investment advisory fees (Note 2) | 282,431 | 18,407 | ||||||
|
|
|
| |||||
Total Liabilities | 22,423,619 | 2,645,097 | ||||||
|
|
|
| |||||
NET ASSETS | $ | 561,284,285 | $ | 145,469,833 | ||||
|
|
|
| |||||
Net assets consist of: | ||||||||
Paid-in capital | 653,746,537 | 130,820,663 | ||||||
Undistributed (distributions in excess of) net investment income | (529,751 | ) | 589,867 | |||||
Accumulated net realized loss | (40,777,518 | ) | (507,848 | ) | ||||
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies | (51,154,983 | ) | 14,567,151 | |||||
|
|
|
| |||||
NET ASSETS | $ | 561,284,285 | $ | 145,469,833 | ||||
|
|
|
| |||||
Shares outstandingc | 10,000,000 | 4,800,000 | ||||||
|
|
|
| |||||
Net asset value per share | $ | 56.13 | $ | 30.31 | ||||
|
|
|
|
a | Securities on loan with values of $21,268,939 and $1,608,616, respectively. See Note 5. |
b | Cost of foreign currencies: $45,573 and $ —, respectively. |
c | $0.001 par value, number of shares authorized: 200 million and 500 million, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 55 |
Table of Contents
Statements of Operations
iSHARES®, INC.
Year ended August 31, 2012
iShares MSCI Brazil Index Fund | iShares MSCI Canada Index Fund | iShares MSCI Chile Investable Market Index Fund | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliateda | $ | 320,967,780 | $ | 111,072,111 | $ | 12,967,433 | ||||||
Interest — affiliated (Note 2) | 2,530 | 1,284 | 492 | |||||||||
Securities lending income — affiliated (Note 2) | 2,233 | 283,696 | — | |||||||||
|
|
|
|
|
| |||||||
320,972,543 | 111,357,091 | 12,967,925 | ||||||||||
Less: Other foreign taxes (Note 1) | — | (11,406 | ) | — | ||||||||
|
|
|
|
|
| |||||||
Total investment income | 320,972,543 | 111,345,685 | 12,967,925 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 55,389,902 | 23,683,748 | 3,655,560 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 55,389,902 | 23,683,748 | 3,655,560 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 265,582,641 | 87,661,937 | 9,312,365 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | (531,476,853 | ) | (82,922,657 | ) | (53,319,519 | ) | ||||||
In-kind redemptions — unaffiliated | — | 103,949,741 | — | |||||||||
Futures contracts | — | (206 | ) | — | ||||||||
Foreign currency transactions | (11,746,875 | ) | 317,817 | (627,834 | ) | |||||||
|
|
|
|
|
| |||||||
Net realized gain (loss) | (543,223,728 | ) | 21,344,695 | (53,947,353 | ) | |||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments | (1,350,755,635 | ) | (434,440,700 | ) | (39,628,008 | ) | ||||||
Futures contracts | — | (44,971 | ) | — | ||||||||
Translation of assets and liabilities in foreign currencies | (3,916,285 | ) | (32,367 | ) | (1,421 | ) | ||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | (1,354,671,920 | ) | (434,518,038 | ) | (39,629,429 | ) | ||||||
|
|
|
|
|
| |||||||
Net realized and unrealized loss | (1,897,895,648 | ) | (413,173,343 | ) | (93,576,782 | ) | ||||||
|
|
|
|
|
| |||||||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (1,632,313,007 | ) | $ | (325,511,406 | ) | $ | (84,264,417 | ) | |||
|
|
|
|
|
|
a | Net of foreign withholding tax of $29,501,494, $19,537,309 and $4,076,485, respectively. |
See notes to financial statements.
56 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Operations (Continued)
iSHARES®, INC.
Year ended August 31, 2012
iShares MSCI Israel Capped Investable Market Index Fund | iShares MSCI Mexico Investable Market Index Fund | iShares MSCI South Africa Index Fund | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliateda | $ | 2,521,743 | $ | 20,178,499 | $ | 19,838,559 | ||||||
Interest — affiliated (Note 2) | 84 | 327 | 102 | |||||||||
Securities lending income — affiliated (Note 2) | 64,726 | 426,671 | 118,612 | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 2,586,553 | 20,605,497 | 19,957,273 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 469,665 | 6,061,230 | 3,145,182 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 469,665 | 6,061,230 | 3,145,182 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 2,116,888 | 14,544,267 | 16,812,091 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | (9,758,844 | ) | (44,417,227 | ) | (15,517,638 | ) | ||||||
In-kind redemptions — unaffiliated | 1,007,522 | 96,098,861 | 25,087,193 | |||||||||
Foreign currency transactions | (31,471 | ) | 32,143 | (354,779 | ) | |||||||
|
|
|
|
|
| |||||||
Net realized gain (loss) | (8,782,793 | ) | 51,713,777 | 9,214,776 | ||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments | (7,354,374 | ) | (17,433,810 | ) | (37,998,271 | ) | ||||||
Translation of assets and liabilities in foreign currencies | (256 | ) | 18,058 | (31,210 | ) | |||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | (7,354,630 | ) | (17,415,752 | ) | (38,029,481 | ) | ||||||
|
|
|
|
|
| |||||||
Net realized and unrealized gain (loss) | (16,137,423 | ) | 34,298,025 | (28,814,705 | ) | |||||||
|
|
|
|
|
| |||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | (14,020,535 | ) | $ | 48,842,292 | $ | (12,002,614 | ) | ||||
|
|
|
|
|
|
a | Net of foreign withholding tax of $501,258, $ — and $520,032, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 57 |
Table of Contents
Statements of Operations (Continued)
iSHARES®, INC.
Year ended August 31, 2012
iShares MSCI Turkey Investable Market Index Fund | iShares MSCI USA Index Fund | |||||||
NET INVESTMENT INCOME | ||||||||
Dividends — unaffiliateda | $ | 8,949,668 | $ | 2,132,989 | ||||
Dividends — affiliated (Note 2) | — | 13,474 | ||||||
Interest — affiliated (Note 2) | 136 | 51 | ||||||
Securities lending income — affiliated (Note 2) | 1,048,966 | 9,532 | ||||||
|
|
|
| |||||
Total investment income | 9,998,770 | 2,156,046 | ||||||
|
|
|
| |||||
EXPENSES | ||||||||
Investment advisory fees (Note 2) | 2,589,437 | 147,696 | ||||||
|
|
|
| |||||
Total expenses | 2,589,437 | 147,696 | ||||||
|
|
|
| |||||
Net investment income | 7,409,333 | 2,008,350 | ||||||
|
|
|
| |||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||
Net realized gain (loss) from: | ||||||||
Investments — unaffiliated | (23,864,682 | ) | (556,671 | ) | ||||
Investments — affiliated (Note 2) | — | (545 | ) | |||||
In-kind redemptions — unaffiliated | (19,119,854 | ) | 2,333,994 | |||||
In-kind redemptions — affiliated (Note 2) | — | 10,292 | ||||||
Foreign currency transactions | (65,112 | ) | — | |||||
|
|
|
| |||||
Net realized gain (loss) | (43,049,648 | ) | 1,787,070 | |||||
|
|
|
| |||||
Net change in unrealized appreciation/depreciation on: | ||||||||
Investments | 111,604,136 | 14,419,985 | ||||||
Translation of assets and liabilities in foreign currencies | 12,276 | — | ||||||
|
|
|
| |||||
Net change in unrealized appreciation/depreciation | 111,616,412 | 14,419,985 | ||||||
|
|
|
| |||||
Net realized and unrealized gain | 68,566,764 | 16,207,055 | ||||||
|
|
|
| |||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 75,976,097 | $ | 18,215,405 | ||||
|
|
|
|
a | Net of foreign withholding tax of $1,356,113 and $553, respectively. |
See notes to financial statements.
58 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets
iSHARES®, INC.
iShares MSCI Brazil Index Fund | iShares MSCI Canada Index Fund | |||||||||||||||
Year ended August 31, 2012 | Year ended August 31, 2011 | Year ended August 31, 2012 | Year ended August 31, 2011 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 265,582,641 | $ | 367,867,712 | $ | 87,661,937 | $ | 86,191,078 | ||||||||
Net realized gain (loss) | (543,223,728 | ) | 13,713,035 | 21,344,695 | 183,034,604 | |||||||||||
Net change in unrealized appreciation/depreciation | (1,354,671,920 | ) | (647,882,263 | ) | (434,518,038 | ) | 229,031,923 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | (1,632,313,007 | ) | (266,301,516 | ) | (325,511,406 | ) | 498,257,605 | |||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (82,370,233 | ) | (577,419,673 | ) | (94,130,044 | ) | (84,459,614 | ) | ||||||||
Return of capital | (133,826,010 | ) | — | — | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (216,196,243 | ) | (577,419,673 | ) | (94,130,044 | ) | (84,459,614 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 139,197,302 | 2,935,390,134 | 652,923,013 | 2,412,404,012 | ||||||||||||
Cost of shares redeemed | (2,252,192,423 | ) | — | (1,071,283,795 | ) | (1,180,897,966 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | (2,112,995,121 | ) | 2,935,390,134 | (418,360,782 | ) | 1,231,506,046 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | (3,961,504,371 | ) | 2,091,668,945 | (838,002,232 | ) | 1,645,304,037 | ||||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 11,332,121,461 | 9,240,452,516 | 5,092,546,534 | 3,447,242,497 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year | $ | 7,370,617,090 | $ | 11,332,121,461 | $ | 4,254,544,302 | $ | 5,092,546,534 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of year | $ | (53,385,526 | ) | $ | (237,401,416 | ) | $ | 12,529,913 | $ | 15,657,081 | ||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 2,600,000 | 38,600,000 | 23,900,000 | 76,300,000 | ||||||||||||
Shares redeemed | (36,850,000 | ) | — | (39,700,000 | ) | (38,000,000 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | (34,250,000 | ) | 38,600,000 | (15,800,000 | ) | 38,300,000 | ||||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
FINANCIAL STATEMENTS | 59 |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Chile Investable Market Index Fund | iShares MSCI Israel Capped Investable Market Index Fund | |||||||||||||||
Year ended August 31, 2012 | Year ended August 31, 2011 | Year ended August 31, 2012 | Year ended August 31, 2011 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 9,312,365 | $ | 11,376,957 | $ | 2,116,888 | $ | 3,152,768 | ||||||||
Net realized loss | (53,947,353 | ) | (12,848,131 | ) | (8,782,793 | ) | (713,779 | ) | ||||||||
Net change in unrealized appreciation/depreciation | (39,629,429 | ) | (7,548,871 | ) | (7,354,630 | ) | (3,185,397 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease in net assets resulting from operations | (84,264,417 | ) | (9,020,045 | ) | (14,020,535 | ) | (746,408 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (8,674,940 | ) | (11,314,677 | ) | (1,986,153 | ) | (3,733,516 | ) | ||||||||
Return of capital | (430,786 | ) | (9,331 | ) | (63,813 | ) | — | |||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (9,105,726 | ) | (11,324,008 | ) | (2,049,966 | ) | (3,733,516 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 168,360,287 | 288,309,806 | 54,151,938 | 46,097,654 | ||||||||||||
Cost of shares redeemed | (234,211,464 | ) | (230,298,194 | ) | (47,186,462 | ) | (92,072,921 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | (65,851,177 | ) | 58,011,612 | 6,965,476 | (45,975,267 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | (159,221,320 | ) | 37,667,559 | (9,105,025 | ) | (50,455,191 | ) | |||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 708,017,965 | 670,350,406 | 78,017,513 | 128,472,704 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year | $ | 548,796,645 | $ | 708,017,965 | $ | 68,912,488 | $ | 78,017,513 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Distributions in excess of net investment income included in net assets at end of year | $ | — | $ | (2,119 | ) | $ | (3,903 | ) | $ | (151,592 | ) | |||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 2,600,000 | 3,950,000 | 1,300,000 | 850,000 | ||||||||||||
Shares redeemed | (4,050,000 | ) | (3,350,000 | ) | (1,150,000 | ) | (1,750,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | (1,450,000 | ) | 600,000 | 150,000 | (900,000 | ) | ||||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
60 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Mexico Investable Market Index Fund | iShares MSCI South Africa Index Fund | |||||||||||||||
Year ended August 31, 2012 | Year ended August 31, 2011 | Year ended August 31, 2012 | Year ended August 31, 2011 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 14,544,267 | $ | 21,339,325 | $ | 16,812,091 | $ | 14,792,435 | ||||||||
Net realized gain | 51,713,777 | 179,585,751 | 9,214,776 | 43,216,708 | ||||||||||||
Net change in unrealized appreciation/depreciation | (17,415,752 | ) | 111,537,604 | (38,029,481 | ) | 45,035,353 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 48,842,292 | 312,462,680 | (12,002,614 | ) | 103,044,496 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (16,941,924 | ) | (19,365,342 | ) | (16,263,704 | ) | (21,537,358 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (16,941,924 | ) | (19,365,342 | ) | (16,263,704 | ) | (21,537,358 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 1,078,823,186 | 737,959,537 | 164,594,240 | 174,104,575 | ||||||||||||
Cost of shares redeemed | (1,171,754,823 | ) | (1,237,364,625 | ) | (168,507,993 | ) | (256,700,202 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease in net assets from capital share transactions | (92,931,637 | ) | (499,405,088 | ) | (3,913,753 | ) | (82,595,627 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
DECREASE IN NET ASSETS | (61,031,269 | ) | (206,307,750 | ) | (32,180,071 | ) | (1,088,489 | ) | ||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 1,243,730,821 | 1,450,038,571 | 504,102,249 | 505,190,738 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year | $ | 1,182,699,552 | $ | 1,243,730,821 | $ | 471,922,178 | $ | 504,102,249 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of year | $ | 1,561,425 | $ | 3,926,939 | $ | (948,355 | ) | $ | (2,758,650 | ) | ||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 18,600,000 | 12,300,000 | 2,600,000 | 2,500,000 | ||||||||||||
Shares redeemed | (20,500,000 | ) | (21,100,000 | ) | (2,600,000 | ) | (3,800,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease in shares outstanding | (1,900,000 | ) | (8,800,000 | ) | — | (1,300,000 | ) | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
FINANCIAL STATEMENTS | 61 |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Turkey Investable Market Index Fund | iShares MSCI USA Index Fund | |||||||||||||||
Year ended August 31, 2012 | Year ended August 31, 2011 | Year ended August 31, 2012 | Year ended August 31, 2011 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 7,409,333 | $ | 8,905,310 | $ | 2,008,350 | $ | 36,203 | ||||||||
Net realized gain (loss) | (43,049,648 | ) | 71,241,274 | 1,787,070 | 10,879 | |||||||||||
Net change in unrealized appreciation/depreciation | 111,616,412 | (215,343,703 | ) | 14,419,985 | 393,770 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 75,976,097 | (135,197,119 | ) | 18,215,405 | 440,852 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (8,952,333 | ) | (13,656,029 | ) | (1,429,449 | ) | (35,212 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (8,952,333 | ) | (13,656,029 | ) | (1,429,449 | ) | (35,212 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 169,170,485 | 431,490,354 | 150,498,448 | 3,846,426 | ||||||||||||
Cost of shares redeemed | (123,586,926 | ) | (435,948,383 | ) | (27,048,052 | ) | (1,262,145 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | 45,583,559 | (4,458,029 | ) | 123,450,396 | 2,584,281 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | 112,607,323 | (153,311,177 | ) | 140,236,352 | 2,989,921 | |||||||||||
NET ASSETS | ||||||||||||||||
Beginning of period | 448,676,962 | 601,988,139 | 5,233,481 | 2,243,560 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 561,284,285 | $ | 448,676,962 | $ | 145,469,833 | $ | 5,233,481 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of period | $ | (529,751 | ) | $ | (695,924 | ) | $ | 589,867 | $ | 10,966 | ||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 3,250,000 | 6,400,000 | 5,550,000 | 150,000 | ||||||||||||
Shares redeemed | (2,650,000 | ) | (6,900,000 | ) | (950,000 | ) | (50,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | 600,000 | (500,000 | ) | 4,600,000 | 100,000 | |||||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
62 | 2012 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, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | ||||||||||||||||
Net asset value, beginning of year | $ | 65.00 | $ | 68.07 | $ | 58.26 | $ | 73.27 | $ | 61.59 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: |
| |||||||||||||||||||
Net investment incomea | 1.73 | 2.24 | 1.56 | 1.56 | 1.93 | |||||||||||||||
Net realized and unrealized gain (loss)b | (12.64 | ) | (1.69 | ) | 10.83 | (14.63 | ) | 11.59 | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (10.91 | ) | 0.55 | 12.39 | (13.07 | ) | 13.52 | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.56 | ) | (3.62 | ) | (2.58 | ) | (1.94 | ) | (1.41 | ) | ||||||||||
Net realized gain | — | — | — | — | (0.43 | ) | ||||||||||||||
Return of capital | (0.92 | ) | — | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (1.48 | ) | (3.62 | ) | (2.58 | ) | (1.94 | ) | (1.84 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 52.61 | $ | 65.00 | $ | 68.07 | $ | 58.26 | $ | 73.27 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | (16.79 | )% | 0.36 | % | 21.12 | % | (16.05 | )% | 21.58 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 7,370,617 | $ | 11,332,121 | $ | 9,240,453 | $ | 8,777,366 | $ | 7,242,260 | ||||||||||
Ratio of expenses to average net assetsc | 0.61 | % | 0.59 | % | 0.61 | % | 0.65 | % | 0.63 | % | ||||||||||
Ratio of net investment income to average net assets | 2.92 | % | 3.08 | % | 2.24 | % | 3.38 | % | 2.37 | % | ||||||||||
Portfolio turnover rated | 7 | % | 11 | % | 13 | % | 30 | % | 30 | % |
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 | Ratios for the years ended August 31, 2010 and prior have been recalculated, as necessary, to conform with the current presentation of foreign taxes. |
d | 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, 2012, August 31, 2011, August 31, 2010, August 31, 2009 and August 31, 2008 would have been 6%, 11%, 13%, 14%, and 19%, respectively. See Note 4. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 63 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Canada Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | ||||||||||||||||
Net asset value, beginning of year | $ | 29.89 | $ | 26.10 | $ | 23.70 | $ | 30.55 | $ | 29.87 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: |
| |||||||||||||||||||
Net investment incomea | 0.53 | 0.53 | 0.43 | 0.41 | 0.47 | |||||||||||||||
Net realized and unrealized gain (loss)b | (2.33 | ) | 3.78 | 2.39 | (6.84 | ) | 0.72 | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (1.80 | ) | 4.31 | 2.82 | (6.43 | ) | 1.19 | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.57 | ) | (0.52 | ) | (0.42 | ) | (0.42 | ) | (0.51 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.57 | ) | (0.52 | ) | (0.42 | ) | (0.42 | ) | (0.51 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 27.52 | $ | 29.89 | $ | 26.10 | $ | 23.70 | $ | 30.55 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | (5.87 | )% | 16.50 | % | 11.91 | % | (20.51 | )% | 3.88 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 4,254,544 | $ | 5,092,547 | $ | 3,447,242 | $ | 2,393,638 | $ | 2,071,061 | ||||||||||
Ratio of expenses to average net assetsc | 0.53 | % | 0.52 | % | 0.53 | % | 0.55 | % | 0.52 | % | ||||||||||
Ratio of net investment income to average net assets | 1.94 | % | 1.70 | % | 1.63 | % | 2.00 | % | 1.46 | % | ||||||||||
Portfolio turnover rated | 5 | % | 8 | % | 6 | % | 6 | % | 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 | Ratios for the years ended August 31, 2010 and prior have been recalculated, as necessary, to conform with the current presentation of foreign taxes. |
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.
64 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Period from to Aug. 31, 2008 | ||||||||||||||||
Net asset value, beginning of period | $ | 67.11 | $ | 67.37 | $ | 44.61 | $ | 44.80 | $ | 48.84 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomeb | 0.97 | 0.95 | 0.59 | 0.76 | 0.92 | |||||||||||||||
Net realized and unrealized gain (loss)c | (6.80 | ) | (0.23 | ) | 22.86 | (0.42 | ) | (4.38 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (5.83 | ) | 0.72 | 23.45 | 0.34 | (3.46 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.92 | ) | (0.98 | ) | (0.66 | ) | (0.53 | ) | (0.58 | ) | ||||||||||
Return of capital | (0.05 | ) | (0.00 | )d | (0.03 | ) | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.97 | ) | (0.98 | ) | (0.69 | ) | (0.53 | ) | (0.58 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of period | $ | 60.31 | $ | 67.11 | $ | 67.37 | $ | 44.61 | $ | 44.80 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | (8.68 | )% | 0.93 | % | 52.88 | % | 0.89 | % | (7.15 | )%e | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of period (000s) | $ | 548,797 | $ | 708,018 | $ | 670,350 | $ | 263,205 | $ | 76,158 | ||||||||||
Ratio of expenses to average net assetsf | 0.61 | % | 0.59 | % | 0.61 | % | 0.65 | % | 0.63 | % | ||||||||||
Ratio of net investment income to average net assetsf | 1.55 | % | 1.30 | % | 1.05 | % | 1.98 | % | 2.38 | % | ||||||||||
Portfolio turnover rateg | 48 | % | 38 | % | 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 | Rounds to less than $0.01. |
e | Not annualized. |
f | Annualized for periods of less than one year. |
g | 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, 2012, August 31, 2011, August 31, 2010, August 31, 2009 and the period ended August 31, 2008 would have been 20%, 12%, 9%, 14% and 16%, respectively. See Note 4. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 65 |
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, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Period from to Aug. 31, 2008 | ||||||||||||||||
Net asset value, beginning of period | $ | 45.89 | $ | 49.41 | $ | 46.87 | $ | 48.62 | $ | 50.33 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomeb | 1.12 | 1.39 | 1.40 | 0.98 | 0.21 | |||||||||||||||
Net realized and unrealized gain (loss)c | (8.66 | ) | (3.18 | ) | 2.63 | (1.75 | ) | (1.92 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (7.54 | ) | (1.79 | ) | 4.03 | (0.77 | ) | (1.71 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (1.07 | ) | (1.73 | ) | (1.49 | ) | (0.98 | ) | — | |||||||||||
Return of capital | (0.03 | ) | — | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (1.10 | ) | (1.73 | ) | (1.49 | ) | (0.98 | ) | — | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of period | $ | 37.25 | $ | 45.89 | $ | 49.41 | $ | 46.87 | $ | 48.62 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | (16.52 | )% | (4.26 | )% | 8.57 | % | (0.63 | )% | (3.40 | )%d | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of period (000s) | $ | 68,912 | $ | 78,018 | $ | 128,473 | $ | 107,792 | $ | 204,201 | ||||||||||
Ratio of expenses to average net assetse | 0.61 | % | 0.59 | % | 0.61 | % | 0.66 | % | 0.63 | % | ||||||||||
Ratio of net investment income to average net assetse | 2.75 | % | 2.49 | % | 2.64 | % | 2.66 | % | 0.93 | % | ||||||||||
Portfolio turnover ratef | 20 | % | 17 | % | 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.
66 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | ||||||||||||||||
Net asset value, beginning of year | $ | 58.39 | $ | 48.17 | $ | 42.59 | $ | 51.94 | $ | 58.35 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.73 | 0.80 | 0.72 | 0.43 | 1.40 | |||||||||||||||
Net realized and unrealized gain (loss)b | 2.76 | 10.15 | 5.61 | (9.17 | ) | (6.21 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 3.49 | 10.95 | 6.33 | (8.74 | ) | (4.81 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.92 | ) | (0.73 | ) | (0.75 | ) | (0.61 | ) | (1.60 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.92 | ) | (0.73 | ) | (0.75 | ) | (0.61 | ) | (1.60 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 60.96 | $ | 58.39 | $ | 48.17 | $ | 42.59 | $ | 51.94 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 6.13 | % | 22.67 | % | 14.83 | % | (16.50 | )% | (8.44 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 1,182,700 | $ | 1,243,731 | $ | 1,450,039 | $ | 694,278 | $ | 955,684 | ||||||||||
Ratio of expenses to average net assets | 0.53 | % | 0.52 | % | 0.53 | % | 0.55 | % | 0.52 | % | ||||||||||
Ratio of net investment income to average net assets | 1.26 | % | 1.35 | % | 1.46 | % | 1.25 | % | 2.42 | % | ||||||||||
Portfolio turnover ratec | 10 | % | 5 | % | 11 | % | 13 | % | 13 | % |
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 | 67 |
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, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008a | ||||||||||||||||
Net asset value, beginning of year | $ | 69.06 | $ | 58.74 | $ | 51.99 | $ | 55.80 | $ | 62.26 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomeb | 2.10 | 1.65 | 1.18 | 1.94 | 2.28 | |||||||||||||||
Net realized and unrealized gain (loss)c | (4.41 | ) | 11.08 | 6.92 | (3.84 | ) | (6.02 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (2.31 | ) | 12.73 | 8.10 | (1.90 | ) | (3.74 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (2.10 | ) | (2.41 | ) | (1.35 | ) | (1.91 | ) | (2.72 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (2.10 | ) | (2.41 | ) | (1.35 | ) | (1.91 | ) | (2.72 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 64.65 | $ | 69.06 | $ | 58.74 | $ | 51.99 | $ | 55.80 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | (3.17 | )% | 21.58 | % | 15.80 | % | (2.23 | )% | (6.18 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 471,922 | $ | 504,102 | $ | 505,191 | $ | 488,728 | $ | 429,655 | ||||||||||
Ratio of expenses to average net assets | 0.61 | % | 0.59 | % | 0.61 | % | 0.66 | % | 0.63 | % | ||||||||||
Ratio of net investment income to average net assets | 3.26 | % | 2.38 | % | 2.09 | % | 4.81 | % | 3.61 | % | ||||||||||
Portfolio turnover rated | 4 | % | 4 | % | 5 | % | 16 | % | 21 | % |
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.
68 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Period from to Aug. 31, 2008 | ||||||||||||||||
Net asset value, beginning of period | $ | 47.73 | $ | 60.81 | $ | 48.01 | $ | 52.42 | $ | 50.30 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomeb | 0.86 | 0.84 | 1.00 | 0.78 | 0.83 | |||||||||||||||
Net realized and unrealized gain (loss)c | 8.70 | (12.59 | ) | 13.02 | (4.22 | ) | 1.29 | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 9.56 | (11.75 | ) | 14.02 | (3.44 | ) | 2.12 | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (1.16 | ) | (1.33 | ) | (1.22 | ) | (0.97 | ) | — | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (1.16 | ) | (1.33 | ) | (1.22 | ) | (0.97 | ) | — | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of period | $ | 56.13 | $ | 47.73 | $ | 60.81 | $ | 48.01 | $ | 52.42 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 20.37 | % | (19.74 | )% | 29.55 | % | (5.56 | )% | 4.22 | %d | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of period (000s) | $ | 561,284 | $ | 448,677 | $ | 601,988 | $ | 242,435 | $ | 152,021 | ||||||||||
Ratio of expenses to average net assetse | 0.61 | % | 0.59 | % | 0.61 | % | 0.65 | % | 0.63 | % | ||||||||||
Ratio of net investment income to average net assetse | 1.75 | % | 1.30 | % | 1.81 | % | 2.39 | % | 3.78 | % | ||||||||||
Portfolio turnover ratef | 9 | % | 12 | % | 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.
FINANCIAL HIGHLIGHTS | 69 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI USA Index Fund | ||||||||||||
Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Period from to | ||||||||||
Net asset value, beginning of period | $ | 26.17 | $ | 22.44 | $ | 24.83 | ||||||
|
|
|
|
|
| |||||||
Income from investment operations: | ||||||||||||
Net investment incomeb | 0.59 | 0.51 | 0.17 | |||||||||
Net realized and unrealized gain (loss)c | 3.94 | 3.73 | (2.49 | ) | ||||||||
|
|
|
|
|
| |||||||
Total from investment operations | 4.53 | 4.24 | (2.32 | ) | ||||||||
|
|
|
|
|
| |||||||
Less distributions from: | ||||||||||||
Net investment income | (0.39 | ) | (0.51 | ) | (0.07 | ) | ||||||
|
|
|
|
|
| |||||||
Total distributions | (0.39 | ) | (0.51 | ) | (0.07 | ) | ||||||
|
|
|
|
|
| |||||||
Net asset value, end of period | $ | 30.31 | $ | 26.17 | $ | 22.44 | ||||||
|
|
|
|
|
| |||||||
Total return | 17.44 | % | 18.89 | % | (9.37 | )%d | ||||||
|
|
|
|
|
| |||||||
Ratios/Supplemental data: | ||||||||||||
Net assets, end of period (000s) | $ | 145,470 | $ | 5,233 | $ | 2,244 | ||||||
Ratio of expenses to average net assetse | 0.15 | % | 0.15 | % | 0.15 | % | ||||||
Ratio of net investment income to average net assetse | 2.04 | % | 1.90 | % | 2.21 | % | ||||||
Portfolio turnover ratef | 6 | % | 8 | % | 1 | % |
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.
70 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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 following funds (each, a “Fund,” and collectively, the “Funds”):
iShares MSCI Index Fund | Diversification Classification | |||
Brazil | Non-diversified | |||
Canada | Diversified | |||
Chile Investable Market | Non-diversified | |||
Israel Capped Investable Market | Non-diversified |
iShares MSCI Index Fund | Diversification Classification | |||
Mexico Investable Market | Non-diversified | |||
South Africa | Non-diversified | |||
Turkey Investable Market | Non-diversified | |||
USA | Non-diversified |
Non-diversified funds generally hold securities of fewer issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers.
The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index. The investment adviser uses a “passive” or index approach to try to achieve each Fund’s investment objective.
Certain Funds may invest in securities of non-U.S. issuers that may trade in non-U.S. markets. This may involve certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: generally less liquid and less efficient securities markets; generally greater price volatility; exchange rate fluctuations and exchange controls; imposition of restrictions on the expatriation of funds or other assets of the Funds; 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 Funds in the preparation of their 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
Each Fund’s investments are valued at fair value each day that the Fund’s listing exchange is open. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement
NOTESTO FINANCIAL STATEMENTS | 71 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
date. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) provides oversight of the valuation of investments for the Funds. The investments of each Fund are valued pursuant to policies and procedures developed by the Global Valuation Committee and approved by the Board of Directors of the Company (the “Board”).
• | Equity investments traded on a recognized securities exchange are valued at that day’s last reported trade price or the official closing price, as applicable, on the exchange where the stock is primarily traded. Equity investments traded on a recognized exchange for which there were no sales on that day are valued at the last traded price. |
• | Open-end U.S. mutual funds are valued at that day’s published net asset value (NAV). |
• | Financial futures contracts are valued at that day’s last reported settlement price on the exchange where the contract is traded. |
In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the fair value of such investment or if a price is not available, the investment will be valued based upon other available factors deemed relevant by the Global Valuation Committee, in accordance with policies approved by the Board. These factors include but are not limited to (i) attributes specific to the investment; (ii) the principal market for the investment; (iii) the customary participants in the principal market for the investment; (iv) data assumptions by market participants for the investment, if reasonably available; (v) quoted prices for similar investments in active markets; and (vi) other factors, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and/or other default rates. Valuations based on such factors are reported to the Board on a quarterly basis.
The Global Valuation Committee employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the Company’s pricing vendors, a regular review of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices and large movements in market values, and reviews of market related activity.
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.
Various inputs are used in determining the fair value of financial instruments. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes. The level of a value determined for 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. The three levels of the fair value hierarchy are as follows:
• | Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities; |
• | Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability (such as exchange rates, financing terms, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs; and |
• | Level 3 — Unobservable inputs for the asset or liability, including the Funds’ assumptions used in determining the fair value of investments. |
72 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. In accordance with the Company’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period.
The following table summarizes the value of each of the Funds’ investments according to the fair value hierarchy as of August 31, 2012. The breakdown of each Fund’s investments into major categories is disclosed in its respective Schedule of Investments.
iShares MSCI Index Fund and | Investments | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Brazil | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 3,452,101,367 | $ | — | $ | — | $ | 3,452,101,367 | ||||||||
Preferred Stocks | 3,893,793,430 | — | — | 3,893,793,430 | ||||||||||||
Short-Term Investments | 751,668 | — | — | 751,668 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 7,346,646,465 | $ | — | $ | — | $ | 7,346,646,465 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Canada | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 4,244,760,056 | $ | — | $ | 85 | $ | 4,244,760,141 | ||||||||
Short-Term Investments | 74,028,686 | — | — | 74,028,686 | ||||||||||||
Liabilities: | ||||||||||||||||
Futures Contractsa | (44,971 | ) | — | — | (44,971 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 4,318,743,771 | $ | — | $ | 85 | $ | 4,318,743,856 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Chile Investable Market | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 508,900,484 | $ | — | $ | — | $ | 508,900,484 | ||||||||
Preferred Stocks | 39,230,337 | — | — | 39,230,337 | ||||||||||||
Rights | — | — | 1 | 1 | ||||||||||||
Short-Term Investments | 900,524 | — | — | 900,524 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 549,031,345 | $ | — | $ | 1 | $ | 549,031,346 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Israel Capped Investable Market | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 68,654,584 | $ | — | $ | — | $ | 68,654,584 | ||||||||
Short-Term Investments | 8,504,316 | — | — | 8,504,316 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 77,158,900 | $ | — | $ | — | $ | 77,158,900 | |||||||||
|
|
|
|
|
|
|
| |||||||||
NOTESTO FINANCIAL STATEMENTS | 73 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
iShares MSCI Index Fund and | Investments | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Mexico Investable Market | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 1,181,416,711 | $ | — | $ | — | $ | 1,181,416,711 | ||||||||
Short-Term Investments | 20,040,846 | — | — | 20,040,846 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 1,201,457,557 | $ | — | $ | — | $ | 1,201,457,557 | |||||||||
|
|
|
|
|
|
|
| |||||||||
South Africa | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 470,645,052 | $ | — | $ | — | $ | 470,645,052 | ||||||||
Short-Term Investments | 16,483,223 | — | — | 16,483,223 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 487,128,275 | $ | — | $ | — | $ | 487,128,275 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Turkey Investable Market | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 561,294,434 | $ | — | $ | — | $ | 561,294,434 | ||||||||
Short-Term Investments | 22,302,547 | — | — | 22,302,547 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 583,596,981 | $ | — | $ | — | $ | 583,596,981 | |||||||||
|
|
|
|
|
|
|
| |||||||||
USA | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 145,086,626 | $ | — | $ | — | $ | 145,086,626 | ||||||||
Rights | — | — | 995 | 995 | ||||||||||||
Short-Term Investments | 1,839,483 | — | — | 1,839,483 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 146,926,109 | $ | — | $ | 995 | $ | 146,927,104 | |||||||||
|
|
|
|
|
|
|
| |||||||||
a | Futures Contracts are shown at the net unrealized appreciation (depreciation) on the contracts. |
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are accounted for on trade date. Dividend income is recognized on the ex-dividend date, net of any foreign taxes withheld at source. Any taxes withheld that are reclaimable from foreign tax authorities as of August 31, 2012 are reflected in dividends receivable. Non-cash dividends received in the form of stock in an elective dividend, if any, are recorded as dividend income at fair value. Distributions received by the 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. Interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method.
FOREIGN CURRENCY TRANSLATION
The accounting records of the Funds are maintained in U.S. dollars. Foreign currencies, as well as investment securities and other assets and liabilities denominated in foreign currencies, are translated into U.S. dollars using exchange rates deemed appropriate by the investment adviser. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars on the respective dates of such transactions.
74 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
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, capital gains on investments, certain foreign currency transactions or other corporate events. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the Funds invest. These foreign taxes, if any, are paid by the Funds and are reflected in their Statements of Operations as follows: foreign taxes withheld at source are presented as a reduction of income, foreign taxes on securities lending income are presented as a reduction of securities lending income, foreign taxes on capital gains from sales of investments and foreign currency transactions are included in their respective net realized gain (loss) categories, and foreign taxes on other corporate events are reflected in “Other foreign taxes.” Foreign taxes payable as of August 31, 2012, if any, are disclosed in the Funds’ Statements of Assets and Liabilities.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends and distributions paid by each Fund are recorded on the ex-dividend dates. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds.
FEDERAL INCOME TAXES
Each Fund is treated as an entity separate from the Company’s other funds 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 is required.
2. | INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES |
Pursuant to an Investment Advisory Agreement with the Company, BlackRock Fund Advisors (“BFA”) manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock, Inc. (“BlackRock”). Under the Investment Advisory Agreement, BFA is responsible for substantially all expenses of the Funds, except interest, taxes, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution fees, litigation expenses and any extraordinary expenses.
For its investment advisory services to each of 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 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 |
NOTESTO FINANCIAL STATEMENTS | 75 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
For its investment advisory services to each of 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 the Fund and certain other iShares funds, as follows:
Investment Advisory Fee | Aggregate Average Daily Net Assets | |||
0.74 | % | First $2 billion | ||
0.69 | Over $2 billion, up to and including $4 billion | |||
0.64 | Over $4 billion, up to and including $8 billion | |||
0.57 | Over $8 billion, up to and including $16 billion | |||
0.51 | Over $16 billion, up to and including $32 billion | |||
0.45 | Over $32 billion |
For its investment advisory services to the iShares MSCI USA Index Fund, BFA is entitled to an annual investment advisory fee of 0.15% based on the average daily net assets of the Fund.
The U.S. Securities and Exchange Commission has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (“BTC”) to serve as securities lending agent for the Funds, subject to applicable conditions. BTC is an affiliate of BFA. Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, and any fees or other payments to and from borrowers of securities. Each Fund retains 65% of securities lending income and pays a fee to BTC equal to 35% of such income. As securities lending agent, BTC is responsible for all transaction fees and all other operational costs relating to securities lending activities, other than extraordinary expenses. BTC is also responsible for fees and expenses incurred by each Fund as a result of the investment of cash collateral received for securities on loan in a money market fund managed by BFA or an affiliate.
For the year ended August 31, 2012, BTC earned securities lending agent fees from the Funds as follows:
iShares MSCI Index Fund | Securities Lending Agent Fees | |||
Brazil | $ | 999 | ||
Canada | 152,759 | |||
Israel Capped Investable Market | 34,852 | |||
Mexico Investable Market | 229,746 | |||
South Africa | 63,868 | |||
Turkey Investable Market | 564,828 | |||
USA | 5,135 |
At a special meeting of the Board held on January 5, 2012, the directors approved a new distribution agreement with BlackRock Investments, LLC (“BRIL”). BRIL is an affiliate of BFA. Effective April 1, 2012, BRIL replaced SEI Investments Distribution Co. as the distributor for each Fund. Pursuant to the new distribution agreement, BFA is responsible for any fees or expenses for distribution services provided to the Funds.
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 — affiliated” in the Statements of Operations.
76 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
The PNC Financial Services Group, Inc. is the largest stockholder of BlackRock and is considered to be an affiliate of the Funds for 1940 Act purposes.
Investments in issuers considered to be affiliates of the Funds (excluding short-term investments) during the year ended August 31, 2012, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:
iShares MSCI Index Fund and Name of Affiliated Issuer | Shares Held at Beginning of Year | Shares Purchased | Shares Sold | Shares Held of Year | Value at of Year | Dividend Income | Net Realized Gain (Loss) | |||||||||||||||||||||
USA | ||||||||||||||||||||||||||||
BlackRock Inc. | 42 | 1,645 | (242 | ) | 1,445 | $ | 254,855 | $ | 7,034 | $ | 2,474 | |||||||||||||||||
PNC Financial Services Group Inc. (The) | 236 | 6,726 | (1,137 | ) | 5,825 | 362,082 | 6,440 | 7,273 | ||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||
$ | 616,937 | $ | 13,474 | $ | 9,747 | |||||||||||||||||||||||
|
|
|
|
|
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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, 2012 were as follows:
iShares MSCI Index Fund | Purchases | Sales | ||||||
Brazil | $ | 677,745,152 | $ | 2,687,930,140 | ||||
Canada | 218,082,422 | 231,204,849 | ||||||
Chile Investable Market | 289,404,783 | 355,650,955 | ||||||
Israel Capped Investable Market | 15,662,730 | 15,433,746 | ||||||
Mexico Investable Market | 112,275,470 | 115,569,470 | ||||||
South Africa | 28,029,725 | 21,585,330 | ||||||
Turkey Investable Market | 44,704,827 | 39,906,554 | ||||||
USA | 7,113,772 | 6,415,668 |
In-kind transactions (see Note 4) for the year ended August 31, 2012 were as follows:
iShares MSCI Index Fund | In-kind Purchases | In-kind Sales | ||||||
Canada | $ | 647,280,432 | $ | 1,061,787,843 | ||||
Israel Capped Investable Market | 53,704,433 | 46,921,730 | ||||||
Mexico Investable Market | 1,076,855,290 | 1,169,587,848 | ||||||
South Africa | 157,574,724 | 168,111,741 | ||||||
Turkey Investable Market | 161,238,727 | 123,075,175 | ||||||
USA | 149,988,187 | 27,014,749 |
NOTESTO FINANCIAL STATEMENTS | 77 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
4. | CAPITAL SHARE TRANSACTIONS |
Capital shares are issued and redeemed by each Fund only in aggregations of a specified number of shares or multiples thereof (“Creation Units”) at net asset value. Except when aggregated in Creation Units, shares of 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 in the Company generally consists of the in-kind deposit of a designated portfolio of securities, which constitutes an optimized representation of the securities of that fund’s underlying index, and a specified amount of cash. Certain funds in the Company may be offered in Creation Units solely or partially for cash in U.S. dollars. Investors purchasing and redeeming Creation Units may pay a purchase transaction fee and a redemption transaction fee directly to State Street Bank and Trust Company, the Company’s administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash. Investors transacting in Creation Units for cash pay an additional variable charge to compensate the relevant fund for certain transaction costs (i.e., stamp taxes, taxes on currency or other financial transactions, and brokerage costs) and market impact expenses relating to investing in portfolio securities.
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. Each Fund could suffer a loss if the value of an investment purchased with cash collateral falls below the value of the cash collateral received.
As of August 31, 2012, any securities on loan 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, 2012 and the value of the related collateral are disclosed in the Statements of Assets and Liabilities. Securities lending income, as disclosed in the Statements of Operations, represents the income earned from the investment of the cash collateral, net of fees and other payments to and from borrowers, and less the fees paid to BTC as securities lending agent.
78 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Notes to Financial Statements (Continued)
iSHARES®, INC.
6. | INCOME TAX INFORMATION |
U.S. GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset values per share. The following permanent differences as of August 31, 2012, attributable to passive foreign investment companies, the expiration of capital loss carryforwards, distributions paid in excess of taxable income, foreign currency transactions and realized gains (losses) from in-kind redemptions, were reclassified to the following accounts:
iShares MSCI Index Fund | Paid-in Capital | Undistributed Net Investment Income/Distributions in Excess of Net Investment Income | Undistributed Net Realized Gain/Accumulated Net Realized Loss | |||||||||
Brazil | $ | — | $ | 803,482 | $ | (803,482 | ) | |||||
Canada | 46,499,708 | 3,340,939 | (49,840,647 | ) | ||||||||
Chile Investable Market | — | (635,306 | ) | 635,306 | ||||||||
Israel Capped Investable Market | (531,147 | ) | 16,954 | 514,193 | ||||||||
Mexico Investable Market | 82,604,850 | 32,143 | (82,636,993 | ) | ||||||||
South Africa | 19,275,126 | 1,261,908 | (20,537,034 | ) | ||||||||
Turkey Investable Market | (25,995,923 | ) | 1,709,173 | 24,286,750 | ||||||||
USA | 2,283,670 | — | (2,283,670 | ) |
The tax character of distributions paid during the years ended August 31, 2012 and August 31, 2011 was as follows:
iShares MSCI Index Fund | 2012 | 2011 | ||||||
Brazil | ||||||||
Ordinary income | $ | 82,370,233 | $ | 577,419,673 | ||||
Return of Capital | 133,826,010 | — | ||||||
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$ | 216,196,243 | $ | 577,419,673 | |||||
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Canada | ||||||||
Ordinary income | $ | 94,130,044 | $ | 84,459,614 | ||||
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Chile Investable Market | ||||||||
Ordinary income | $ | 8,674,940 | $ | 11,314,677 | ||||
Return of Capital | 430,786 | 9,331 | ||||||
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$ | 9,105,726 | $ | 11,324,008 | |||||
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Israel Capped Investable Market | ||||||||
Ordinary income | $ | 1,986,153 | $ | 3,733,516 | ||||
Return of Capital | 63,813 | — | ||||||
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$ | 2,049,966 | $ | 3,733,516 | |||||
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Mexico Investable Market | ||||||||
Ordinary income | $ | 16,941,924 | $ | 19,365,342 | ||||
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NOTESTO FINANCIAL STATEMENTS | 79 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
iShares MSCI Index Fund | 2012 | 2011 | ||||||
South Africa | ||||||||
Ordinary income | $ | 16,263,704 | $ | 21,537,358 | ||||
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Turkey Investable Market | ||||||||
Ordinary income | $ | 8,952,333 | $ | 13,656,029 | ||||
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USA | ||||||||
Ordinary income | $ | 1,429,449 | $ | 35,212 | ||||
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As of August 31, 2012, the tax components of accumulated net earnings (losses) were as follows:
iShares MSCI Index Fund | Undistributed Ordinary Income | Capital Loss Carryforwards | Net Unrealized Gains (Losses) a | Qualified Late-Year Losses b | Total | |||||||||||||||
Brazil | $ | — | $ | (358,257,493 | ) | $ | 1,331,322,754 | $ | (433,999,879 | ) | $ | 539,065,382 | ||||||||
Canada | 22,938,870 | (156,573,257 | ) | (584,100,631 | ) | (30,162,314 | ) | (747,897,332 | ) | |||||||||||
Chile Investable Market | — | (45,080,793 | ) | 114,530,728 | (25,468,593 | ) | 43,981,342 | |||||||||||||
Israel Capped Investable Market | — | (21,857,675 | ) | (36,630,621 | ) | (5,832,950 | ) | (64,321,246 | ) | |||||||||||
Mexico Investable Market | 1,561,425 | (42,722,155 | ) | (126,372,383 | ) | (34,106,655 | ) | (201,639,768 | ) | |||||||||||
South Africa | 1,630,938 | (44,186,775 | ) | (39,214,805 | ) | (11,470,987 | ) | (93,241,629 | ) | |||||||||||
Turkey Investable Market | — | (15,384,001 | ) | (59,253,675 | ) | (17,824,576 | ) | (92,462,252 | ) | |||||||||||
USA | 589,867 | (2,724 | ) | 14,353,895 | (291,868 | ) | 14,649,170 |
a | The difference between book-basis and tax-basis unrealized gains (losses) was attributable primarily to the tax deferral of losses on wash sales and the realization for tax purposes of unrealized gains on investments in passive foreign investment companies. |
b | The Funds have elected to defer certain qualified late-year losses and recognize such losses in the year ending August 31, 2013. |
As of August 31, 2012, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:
iShares MSCI Index Fund | Non- Expiring a | Expiring 2013 | Expiring 2014 | Expiring 2015 | Expiring 2016 | Expiring 2017 | Expiring 2018 | Expiring 2019 | Total | |||||||||||||||||||||||||||
Brazil | $ | 160,031,183 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 198,226,310 | $ | — | $ | 358,257,493 | ||||||||||||||||||
Canada | 31,451,368 | 2,931,648 | — | 5,363,291 | 5,107,471 | 27,886,883 | 68,928,677 | 14,903,919 | 156,573,257 | |||||||||||||||||||||||||||
Chile Investable Market | 30,504,831 | — | — | — | — | 1,886,881 | 11,712,090 | 976,991 | 45,080,793 | |||||||||||||||||||||||||||
Israel Capped Investable Market | 3,141,756 | — | — | — | — | 784,479 | 10,801,191 | 7,130,249 | 21,857,675 | |||||||||||||||||||||||||||
Mexico Investable Market | 6,596,203 | 12,912 | 632,766 | — | 853,150 | 8,973,988 | 2,789,471 | 22,863,665 | 42,722,155 | |||||||||||||||||||||||||||
South Africa | 5,013,197 | — | 260,738 | 1,607,845 | 972,024 | 15,339,464 | 14,856,365 | 6,137,142 | 44,186,775 | |||||||||||||||||||||||||||
Turkey Investable Market | 4,821,444 | — | — | — | — | 720,636 | 5,982,737 | 3,859,184 | 15,384,001 | |||||||||||||||||||||||||||
USA | 2,724 | — | — | — | — | — | — | — | 2,724 |
a | Must be utilized prior to losses subject to expiration. |
80 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
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.
As of August 31, 2012, 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 | $ | 6,014,245,757 | $ | 2,181,751,958 | $ | (849,351,250 | ) | $ | 1,332,400,708 | |||||||
Canada | 4,902,893,743 | 276,291,437 | (860,396,353 | ) | (584,104,916 | ) | ||||||||||
Chile Investable Market | 434,496,391 | 149,186,694 | (34,651,739 | ) | 114,534,955 | |||||||||||
Israel Capped Investable Market | 113,789,972 | 4,188,910 | (40,819,982 | ) | (36,631,072 | ) | ||||||||||
Mexico Investable Market | 1,327,822,906 | 52,144,359 | (178,509,708 | ) | (126,365,349 | ) | ||||||||||
South Africa | 526,327,819 | 51,910,461 | (91,110,005 | ) | (39,199,544 | ) | ||||||||||
Turkey Investable Market | 642,850,151 | 19,752,825 | (79,005,995 | ) | (59,253,170 | ) | ||||||||||
USA | 132,573,209 | 16,843,494 | (2,489,599 | ) | 14,353,895 |
Management has reviewed the tax positions as of August 31, 2012, inclusive of the open tax return years, and has determined that no provision for income tax is required in the Funds’ financial statements.
7. | FINANCIAL FUTURES CONTRACTS |
Each Fund may purchase or sell financial futures contracts in an effort to help such Fund track its underlying index. A futures contract is a standardized, exchange-traded agreement to buy and sell a financial instrument at a set price on a future date. Upon entering into a futures contract, the Fund is required to pledge to the executing broker which holds segregated from its own assets, an amount of cash, U.S. government securities or other high-quality debt and equity securities equal to the minimum initial margin requirements of the exchange on which the contract is traded. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as margin variation and are recorded by the Fund as unrealized appreciation or depreciation. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Losses may arise if the value of a futures contract decreases due to an unfavorable change in the market rates or values of the underlying instrument during the term of the contract or if the counterparty does not perform under the contract. The use of futures contracts also involves the risk of an imperfect correlation in the movements in the price of futures contracts and the assets underlying such contracts.
The following table shows the value of futures contracts held by iShares MSCI Canada Index Fund as of August 31, 2012 and the related locations in the Statements of Assets and Liabilities, presented by risk exposure category:
Liabilities | ||||
Equity contracts: | ||||
Variation margin/Net assets consist of — net Unrealized appreciation (depreciation)a | $ | (44,971 | ) | |
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| |||
a | Represents cumulative depreciation of futures contracts as reported in the Schedule of Investments. |
NOTESTO FINANCIAL STATEMENTS | 81 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
The following table shows the realized and unrealized gains (losses) on futures contracts held by iShares MSCI Canada Index Fund during the year ended August 31, 2012 and the related locations in the Statements of Operations, presented by risk exposure category:
Net Realized Gain (Loss) | Net Change in Unrealized Appreciation/Depreciation | |||||||
Equity contracts: | ||||||||
Futures contracts | $ | (206 | ) | $ | (44,971 | ) | ||
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| |||||
For the year ended August 31, 2012, the average quarter-end number of contracts and notional value of open futures contracts for the iShares MSCI Canada Index Fund were 63 and $8,728,041, respectively.
8. | 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.
82 | 2012 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 Brazil 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 (the “Funds”), at August 31, 2012, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and 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 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, 2012 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
October 23, 2012
REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 83 |
Table of Contents
iSHARES®, INC.
For corporate shareholders, the following percentages of the income dividends paid by the Funds during the fiscal year ended August 31, 2012 qualified for the dividends-received deduction:
iShares MSCI Index Fund | Dividends- Received Deduction | |||
USA | 100 | % |
For the fiscal year ended August 31, 2012, 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 | $ | 350,469,274 | $ | 29,448,759 | ||||
Canada | 130,609,420 | 19,541,009 | ||||||
Chile Investable Market | 17,043,918 | 4,070,280 | ||||||
Israel Capped Investable Market | 3,023,001 | 499,955 | ||||||
Mexico Investable Market | 20,178,499 | — | ||||||
South Africa | 20,358,591 | 520,000 | ||||||
Turkey Investable Market | 10,305,602 | 1,356,036 |
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, 2012:
iShares MSCI Index Fund | Qualified Dividend Income | |||
Brazil | $ | 20,706,964 | ||
Canada | 113,671,053 | |||
Chile Investable | 12,242 | |||
Israel Capped | 2,484,962 |
iShares MSCI Index Fund | Qualified Dividend Income | |||
Mexico Capped | $ | 16,941,924 | ||
South Africa | 16,783,704 | |||
Turkey Investable | 9,552,745 | |||
USA | 1,429,449 |
In February 2013, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2012. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.
84 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Board Review and Approval of Investment Advisory
Contract (Unaudited)
iSHARES®, INC.
I. iShares MSCI Brazil, iShares MSCI Canada, iShares MSCI Chile Investable Market, iShares MSCI Israel Capped Investable Market, iShares MSCI Mexico Investable Market, iShares MSCI South Africa, and iShares MSCI Turkey Investable Market Index Funds
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 annually to consider the Investment Advisory Contract between the Company and BFA (the “Advisory Contract”) on behalf of the Funds. The Independent Directors requested, and BFA provided, such information as the Independent Directors, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of Independent Directors (the “15(c) Committee”), with independent counsel, met with management on April 19, 2012, April 27, 2012, and May 16, 2012, to discuss the types of information the Independent Directors required and the manner in which management would organize and present such information. At a meeting held on May 17, 2012, management presented information to the Board relating to the continuance of the Advisory Contract, and the Board, including the Independent Directors, reviewed and discussed such information at length. The Independent Directors requested from management certain additional information, and the 15(c) Committee met with management on June 8, 2012, to discuss the additional requests. At a meeting held on June 20-21, 2012, the Board, including the Independent Directors, reviewed additional information provided by management in response to these requests. The Board, including a majority of the Independent Directors, approved the continuance of the Advisory Contract for the Funds, based on a review of qualitative and quantitative information provided by BFA, including a review of supplemental information management provided at the request of the Independent Directors. The Board noted its satisfaction with the extent and quality of information, and detailed responses, provided by BFA. The Independent Directors were advised by their independent counsel throughout the process. In approving the Advisory Contract for the Funds, the Board, including the Independent Directors, considered the following factors, no one of which was controlling, and made the following conclusions:
Expenses and Performance of the Funds — The Board reviewed statistical information prepared by Lipper Inc. (“Lipper”), an independent provider of investment company data, regarding the expense ratio components, including actual advisory fees, waivers/reimbursements, and gross and net total expenses of each Fund in comparison with the same information for other registered investment companies objectively selected by Lipper as comprising such 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, sponsor, inception date, or other differentiating factors, but that 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 those tracked by the Funds, the Lipper Group 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), as applicable. 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 also received a detailed explanation from BFA regarding its rationale for including funds that had been excluded from Lipper’s consideration due to Lipper’s methodology parameters, as well as information showing the effect of including these additional funds in the analysis. The Board further noted that due to the limitations in providing comparable funds in the various Lipper Groups, the statistical information may or may not provide meaningful direct comparisons to the Funds.
The Board also noted that the investment advisory fees and overall expenses for the Funds compared favorably to the investment advisory fee rates and overall expenses of the funds in their respective Lipper Group.
In addition, the Board reviewed statistical information prepared by Lipper regarding the performance of each Fund for the one-, three-, five-, ten-year, and since inception periods, as applicable, and the “last quarter” period ended December 31, 2011, and a comparison of each Fund’s performance to its performance benchmark index for the same periods. To the extent that any of the comparison funds included in
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 85 |
Table of Contents
Board Review and Approval of Investment Advisory
Contract (Unaudited) (Continued)
iSHARES®, INC.
the Lipper Group track the same index as any particular Fund, Lipper also provided, and the Board reviewed, a comparison of such Fund’s performance to that of such relevant comparison funds for the same periods. The Board noted that the Funds generally performed in line with their respective performance benchmark indexes over the relevant periods. In considering this information, the Board noted that the Lipper Group includes funds that may have different investment objectives and/or benchmarks from the Funds. In addition, the Board noted that each Fund seeks to track its benchmark index and that, during the prior year, the Board received periodic reports on the Funds’ performance in comparison with their relevant benchmark indexes. Such periodic comparative performance information was also considered by the Board.
Based on this review, the other factors considered at the meeting, and their general knowledge of mutual fund pricing, the Board concluded that the investment advisory fees and expense levels and the historical performance of each Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA over prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the Funds and their shareholders. The Board noted that BFA became an indirect wholly-owned subsidiary of BlackRock, Inc. (“BlackRock”) in December 2009. The Board acknowledged that additional resources to support the Funds and their shareholders have been added or enhanced since then, including in such areas as investor education, product management, customized portfolio consulting support, and capital markets support. The Board also considered BFA’s compliance program and its compliance record with respect to the Funds. In that regard, 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 on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Funds. In addition to the above considerations, the Board reviewed and considered BFA’s investment and risk management processes and strategies, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that each Fund had met its investment objective consistently since its respective inception date.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Funds under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Costs of Services Provided to Funds and Profits Realized by BFA and Affiliates — The Board reviewed information about the profitability to BFA of the Funds based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and all other sources of revenue and expense to BFA and its affiliates from the Funds’ operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, noting that the 15(c) Committee had focused on the methodology and proposed presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC from securities lending by the Funds. The Board also discussed BFA’s profit margin as reflected in the Funds’ profitability analysis and reviewed information regarding economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Funds and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.
86 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Board Review and Approval of Investment Advisory
Contract (Unaudited) (Continued)
iSHARES®, INC.
Economies of Scale — The Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Funds’ assets, noting that the issue of economies of scale had been focused on extensively by the 15(c) Committee during its meetings and addressed by management. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through breakpoints, waivers, or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BFA’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished between fixed and variable costs, and explained how the nature of such costs may impact the existence of scale benefits. The Board noted that the Advisory Contract for the Funds already provided for breakpoints in the Funds’ investment advisory fee rates as the assets of the Funds, on an aggregated basis with the assets of certain other iShares funds, increase. The Board noted that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding new or revised breakpoints in the future. Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider this issue at least annually, concluded that the structure of the investment advisory fees reflects appropriate sharing of potential economies of scale with the Funds’ shareholders and supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end and closed-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds and institutional separate accounts (together, the “Other Accounts”). The Board noted that BFA and its affiliates do manage Other Accounts with substantially similar investment objectives and strategies as the Funds, except for iShares MSCI Chile Investable Market Index Fund, iShares Israel Capped Investable Market Index Fund, and iShares MSCI Mexico Investable Market Index Fund. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Funds, including in terms of the different generally more extensive services provided, as well as other significant differences in the approach of BFA and its affiliates to the Funds, on one hand, and Other Accounts, on the other. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks of managing and providing other services to the Funds, as publicly traded exchange traded funds, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also considered the “all-inclusive” nature of the Funds’ advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rates under the Advisory Contract for the Funds were generally higher than the investment advisory/management fee rates for the Other Accounts that are institutional clients of BFA (or its affiliates) and concluded that the differences appeared to be consistent with the factors discussed.
Other Benefits to BFA and/or its Affiliates — The Board reviewed ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Funds by BFA, such as payment of revenue to BTC, the Funds’ securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Funds in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board noted that BFA generally does 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 Funds. The Board further noted that any portfolio transactions on behalf of the Funds 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. The Board concluded that any such ancillary benefits would not be
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Board Review and Approval of Investment Advisory
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disadvantageous to the Funds’ shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.
Based on the considerations described above, the Board determined that the investment advisory fee rates under the Advisory Contract do not constitute fees that are so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that it is in the best interest of the Funds and their shareholders to approve the continuance of the Advisory Contract for the coming year.
II. 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 annually to consider the Investment Advisory Contract between the Company and BFA (the “Advisory Contract”) on behalf of the Fund. The Independent Directors requested, and BFA provided, such information as the Independent Directors, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of Independent Directors (the “15(c) Committee”), with independent counsel, met with management on April 19, 2012, April 27, 2012, and May 16, 2012, to discuss the types of information the Independent Directors required and the manner in which management would organize and present such information. At a meeting held on May 17, 2012, management presented information to the Board relating to the continuance of the Advisory Contract, and the Board, including the Independent Directors, reviewed and discussed such information at length. The Independent Directors requested from management certain additional information, and the 15(c) Committee met with management on June 8, 2012, to discuss the additional requests. At a meeting held on June 20-21, 2012, the Board, including the Independent Directors, reviewed additional information provided by management in response to these requests. The Board, including a majority of the Independent Directors, approved the continuance of the Advisory Contract for the Fund, based on a review of qualitative and quantitative information provided by BFA, including a review of supplemental information management provided at the request of the Independent Directors. The Board noted its satisfaction with the extent and quality of information, and detailed responses, provided by BFA. The Independent Directors were advised by their independent counsel throughout the process. In approving the Advisory Contract for the Fund, the Board, including the Independent Directors, considered the following factors, no one of which was controlling, and made the following conclusions:
Expenses and Performance of the Fund — 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, sponsor, inception date, or other differentiating factors, but that 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 those tracked by the Fund, the Lipper Group 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), as applicable. 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 also received a detailed explanation from BFA regarding its rationale for including funds that had been excluded from Lipper’s consideration due to Lipper’s methodology parameters, as well as information showing the effect of including these additional funds in the analysis. The Board further noted that due to the limitations in providing comparable funds in the various Lipper Groups, the statistical information may or may not provide meaningful direct comparisons to the Fund.
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The Board also noted that the investment advisory fees and overall expenses for the Fund compared favorably to the investment advisory fee rates and overall expenses of the funds in the Lipper Group.
In addition, the Board reviewed statistical information prepared by Lipper regarding the performance of the Fund for the one-, three-, five-, ten-year, and since inception periods, as applicable, and the “last quarter” period ended December 31, 2011, and a comparison of the Fund’s performance to its performance benchmark index for the same periods. To the extent that any of the comparison funds included in the Lipper Group track the same index as the Fund, Lipper also provided, and the Board reviewed, a comparison of the Fund’s performance to that of such relevant comparison funds for the same periods. The Board noted that the Fund generally performed in line with its performance benchmark index over the relevant periods. In considering this information, the Board noted that the Lipper Group includes funds that may have different investment objectives and/or benchmarks from the Fund. In addition, the Board noted that the Fund seeks to track its benchmark index and that, during the prior year, the Board received periodic reports on the Fund’s performance in comparison with its benchmark index. Such periodic comparative performance information was also considered by the Board.
Based on this review, the other factors considered at the meeting, and their general knowledge of mutual fund pricing, the Board concluded that the investment advisory fees and expense levels and the historical performance of the Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA over prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the Fund and its shareholders. The Board noted that BFA became an indirect wholly-owned subsidiary of BlackRock, Inc. (“BlackRock”) in December 2009. The Board acknowledged that additional resources to support the Fund and its shareholders have been added or enhanced since then, including in such areas as investor education, product management, customized portfolio consulting support, and capital markets support. The Board also considered BFA’s compliance program and its compliance record with respect to the Fund. In that regard, 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 on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Fund. In addition to the above considerations, the Board reviewed and considered BFA’s investment and risk management processes and strategies, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that the Fund had met its investment objective consistently since its inception date.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Fund under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Costs of Services Provided to Fund and Profits Realized by BFA and Affiliates — The Board reviewed information about the profitability to BFA of the Fund based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and all other sources of revenue and expense to BFA and its affiliates from the Fund’s operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, noting that the 15(c) Committee had focused on the methodology and proposed presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC from securities lending by the Fund. The Board also discussed BFA’s profit margin as reflected in the Fund’s profitability analysis and
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Board Review and Approval of Investment Advisory
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reviewed information regarding economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Fund and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.
Economies of Scale — The Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Fund’s assets, noting that the issue of economies of scale had been focused on extensively by the 15(c) Committee during its meetings and addressed by management. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through breakpoints, waivers, or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BFA’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished between fixed and variable costs, and explained how the nature of such costs may impact the existence of scale benefits. The Board noted that the Advisory Contract for the Fund 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 management’s assertion that future economies of scale for the Fund had been taken into consideration by fixing the investment advisory fee rate at the low end of the market place, effectively giving Fund shareholders, from inception, the benefits of lower fees. The Board noted that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding breakpoints in the future. Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider this issue at least annually, concluded that the investment advisory fee rate incorporates potential economies of scale and supported the approval of the continuance of the Advisory Contract for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end and closed-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds and institutional separate accounts (together, the “Other Accounts”). The Board noted that BFA and its affiliates do manage Other Accounts with a substantially similar investment objective and strategy as the Fund. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Fund, including in terms of the different generally more extensive services provided, as well as other significant differences in the approach of BFA and its affiliates to the Fund, on one hand, and Other Accounts, on the other. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks of managing and providing other services to the Fund, as a publicly traded exchange traded fund, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rates under the Advisory Contract for the Fund were generally higher than the investment advisory/management fee rates for the Other Accounts that are institutional clients of BFA (or its affiliates) and concluded that the differences appeared to be consistent with the factors discussed.
Other Benefits to BFA and/or its Affiliates — The Board reviewed ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Fund by BFA, such as payment of revenue to BTC, the Fund’s securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Fund in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting
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Board Review and Approval of Investment Advisory
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brokers for portfolio transactions for 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. The Board concluded that any such ancillary benefits would not be disadvantageous to the Fund’s shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.
Based on the considerations described above, the Board determined that the investment advisory fee rates under the Advisory Contract do not constitute fees that are so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that it is in the best interest of the Fund and its shareholders to approve the continuance of the Advisory Contract for the coming year.
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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 | ||||||||||||||||||||||||
Canada | $ | 0.56791 | $ | — | $ | 0.00126 | $ | 0.56917 | 100 | % | — | % | 0 | %a | 100 | % | ||||||||||||||||
Israel Capped Investable Market | 1.00580 | — | 0.09714 | 1.10294 | 91 | — | 9 | 100 | ||||||||||||||||||||||||
Mexico Investable Market | 0.91647 | — | — | 0.91647 | 100 | — | — | 100 | ||||||||||||||||||||||||
South Africa | 2.02260 | — | 0.07432 | 2.09692 | 96 | — | 4 | 100 | ||||||||||||||||||||||||
Turkey Investable Market | 1.01488 | — | 0.14474 | 1.15962 | 88 | — | 12 | 100 | ||||||||||||||||||||||||
USA | 0.38886 | �� | — | 0.00269 | 0.39155 | 99 | — | 1 | 100 |
a | Rounds to less than 1%. |
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 are 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 quarter-end. The specific periods covered for each Fund are disclosed in the table for such Fund.
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Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
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, 2007 through June 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 4.0% | 2 | 0.14 | % | |||||
Greater than 3.5% and Less than 4.0% | 1 | 0.07 | ||||||
Greater than 3.0% and Less than 3.5% | 5 | 0.36 | ||||||
Greater than 2.5% and Less than 3.0% | 13 | 0.94 | ||||||
Greater than 2.0% and Less than 2.5% | 34 | 2.46 | ||||||
Greater than 1.5% and Less than 2.0% | 69 | 4.99 | ||||||
Greater than 1.0% and Less than 1.5% | 104 | 7.51 | ||||||
Greater than 0.5% and Less than 1.0% | 149 | 10.77 | ||||||
Between 0.5% and –0.5% | 891 | 64.39 | ||||||
Less than –0.5% and Greater than –1.0% | 74 | 5.35 | ||||||
Less than –1.0% and Greater than –1.5% | 14 | 1.01 | ||||||
Less than –1.5% and Greater than –2.0% | 10 | 0.72 | ||||||
Less than –2.0% and Greater than –2.5% | 7 | 0.51 | ||||||
Less than –2.5% and Greater than –3.0% | 2 | 0.14 | ||||||
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% | 1 | 0.07 | ||||||
Less than –5.0% | 2 | 0.14 | ||||||
|
|
|
| |||||
1,384 | 100.00 | % | ||||||
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SUPPLEMENTAL INFORMATION | 93 |
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Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Canada Index Fund
Period Covered: January 1, 2007 through June 30, 2012
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% | 2 | 0.14 | ||||||
Greater than 2.5% and Less than 3.0% | 2 | 0.14 | ||||||
Greater than 2.0% and Less than 2.5% | 4 | 0.29 | ||||||
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% | 103 | 7.45 | ||||||
Between 0.5% and –0.5% | 1,113 | 80.42 | ||||||
Less than –0.5% and Greater than –1.0% | 103 | 7.45 | ||||||
Less than –1.0% and Greater than –1.5% | 24 | 1.73 | ||||||
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 | ||||||
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| |||||
1,384 | 100.00 | % | ||||||
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|
|
iShares MSCI Chile Investable Market Index Fund
Period Covered: January 1, 2008 through June 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 4.0% | 4 | 0.35 | % | |||||
Greater than 3.5% and Less than 4.0% | 2 | 0.18 | ||||||
Greater than 3.0% and Less than 3.5% | 1 | 0.09 | ||||||
Greater than 2.5% and Less than 3.0% | 5 | 0.44 | ||||||
Greater than 2.0% and Less than 2.5% | 8 | 0.71 | ||||||
Greater than 1.5% and Less than 2.0% | 13 | 1.15 | ||||||
Greater than 1.0% and Less than 1.5% | 46 | 4.06 | ||||||
Greater than 0.5% and Less than 1.0% | 221 | 19.50 | ||||||
Between 0.5% and –0.5% | 604 | 53.30 | ||||||
Less than –0.5% and Greater than –1.0% | 163 | 14.39 | ||||||
Less than –1.0% and Greater than –1.5% | 30 | 2.65 | ||||||
Less than –1.5% and Greater than –2.0% | 17 | 1.50 | ||||||
Less than –2.0% and Greater than –2.5% | 7 | 0.62 | ||||||
Less than –2.5% and Greater than –3.0% | 4 | 0.35 | ||||||
Less than –3.0% | 8 | 0.71 | ||||||
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| |||||
1,133 | 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, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 5.0% | 3 | 0.28 | % | |||||
Greater than 4.5% and Less than 5.0% | 1 | 0.09 | ||||||
Greater than 4.0% and Less than 4.5% | 3 | 0.28 | ||||||
Greater than 3.5% and Less than 4.0% | 1 | 0.09 | ||||||
Greater than 3.0% and Less than 3.5% | 5 | 0.47 | ||||||
Greater than 2.5% and Less than 3.0% | 5 | 0.47 | ||||||
Greater than 2.0% and Less than 2.5% | 13 | 1.21 | ||||||
Greater than 1.5% and Less than 2.0% | 31 | 2.89 | ||||||
Greater than 1.0% and Less than 1.5% | 69 | 6.44 | ||||||
Greater than 0.5% and Less than 1.0% | 168 | 15.66 | ||||||
Between 0.5% and –0.5% | 497 | 46.35 | ||||||
Less than –0.5% and Greater than –1.0% | 115 | 10.73 | ||||||
Less than –1.0% and Greater than –1.5% | 69 | 6.44 | ||||||
Less than –1.5% and Greater than –2.0% | 48 | 4.48 | ||||||
Less than –2.0% and Greater than –2.5% | 14 | 1.31 | ||||||
Less than –2.5% and Greater than –3.0% | 12 | 1.12 | ||||||
Less than –3.0% and Greater than –3.5% | 5 | 0.47 | ||||||
Less than –3.5% and Greater than –4.0% | 2 | 0.19 | ||||||
Less than –4.0% and Greater than –4.5% | 1 | 0.09 | ||||||
Less than –4.5% and Greater than –5.0% | 4 | 0.37 | ||||||
Less than –5.0% and Greater than –5.5% | 2 | 0.19 | ||||||
Less than –5.5% and Greater than –6.0% | 2 | 0.19 | ||||||
Less than –6.0% | 2 | 0.19 | ||||||
|
|
|
| |||||
1,072 | 100.00 | % | ||||||
|
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SUPPLEMENTAL INFORMATION | 95 |
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Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Mexico Investable Market Index Fund
Period Covered: January 1, 2007 through June 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 4.5% | 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% | 3 | 0.22 | ||||||
Greater than 2.5% and Less than 3.0% | 3 | 0.22 | ||||||
Greater than 2.0% and Less than 2.5% | 2 | 0.14 | ||||||
Greater than 1.5% and Less than 2.0% | 11 | 0.79 | ||||||
Greater than 1.0% and Less than 1.5% | 28 | 2.02 | ||||||
Greater than 0.5% and Less than 1.0% | 101 | 7.31 | ||||||
Between 0.5% and –0.5% | 985 | 71.17 | ||||||
Less than –0.5% and Greater than –1.0% | 171 | 12.37 | ||||||
Less than –1.0% and Greater than –1.5% | 48 | 3.47 | ||||||
Less than –1.5% and Greater than –2.0% | 14 | 1.01 | ||||||
Less than –2.0% and Greater than –2.5% | 6 | 0.43 | ||||||
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 | ||||||
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| |||||
1,384 | 100.00 | % | ||||||
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Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI South Africa Index Fund
Period Covered: January 1, 2007 through June 30, 2012
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% | 3 | 0.22 | ||||||
Greater than 3.5% and Less than 4.0% | 6 | 0.43 | ||||||
Greater than 3.0% and Less than 3.5% | 14 | 1.01 | ||||||
Greater than 2.5% and Less than 3.0% | 11 | 0.79 | ||||||
Greater than 2.0% and Less than 2.5% | 43 | 3.11 | ||||||
Greater than 1.5% and Less than 2.0% | 64 | 4.62 | ||||||
Greater than 1.0% and Less than 1.5% | 124 | 8.96 | ||||||
Greater than 0.5% and Less than 1.0% | 233 | 16.84 | ||||||
Between 0.5% and –0.5% | 496 | 35.84 | ||||||
Less than –0.5% and Greater than –1.0% | 154 | 11.13 | ||||||
Less than –1.0% and Greater than –1.5% | 75 | 5.42 | ||||||
Less than –1.5% and Greater than –2.0% | 62 | 4.48 | ||||||
Less than –2.0% and Greater than –2.5% | 34 | 2.46 | ||||||
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% | 5 | 0.36 | ||||||
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% | 2 | 0.14 | ||||||
Less than –5.5% and Greater than –6.0% | 3 | 0.22 | ||||||
Less than –6.0% | 8 | 0.58 | ||||||
|
|
|
| |||||
1,384 | 100.00 | % | ||||||
|
|
|
|
SUPPLEMENTAL INFORMATION | 97 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Turkey Investable Market Index Fund
Period Covered: April 1, 2008 through June 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 6.0% | 7 | 0.65 | % | |||||
Greater than 5.5% and Less than 6.0% | 3 | 0.28 | ||||||
Greater than 5.0% and Less than 5.5% | 1 | 0.09 | ||||||
Greater than 4.5% and Less than 5.0% | 2 | 0.19 | ||||||
Greater than 4.0% and Less than 4.5% | 3 | 0.28 | ||||||
Greater than 3.5% and Less than 4.0% | 2 | 0.19 | ||||||
Greater than 3.0% and Less than 3.5% | 11 | 1.03 | ||||||
Greater than 2.5% and Less than 3.0% | 20 | 1.87 | ||||||
Greater than 2.0% and Less than 2.5% | 21 | 1.96 | ||||||
Greater than 1.5% and Less than 2.0% | 38 | 3.54 | ||||||
Greater than 1.0% and Less than 1.5% | 109 | 10.17 | ||||||
Greater than 0.5% and Less than 1.0% | 181 | 16.88 | ||||||
Between 0.5% and –0.5% | 380 | 35.46 | ||||||
Less than –0.5% and Greater than –1.0% | 110 | 10.26 | ||||||
Less than –1.0% and Greater than –1.5% | 74 | 6.90 | ||||||
Less than –1.5% and Greater than –2.0% | 41 | 3.82 | ||||||
Less than –2.0% and Greater than –2.5% | 22 | 2.05 | ||||||
Less than –2.5% and Greater than –3.0% | 14 | 1.31 | ||||||
Less than –3.0% and Greater than –3.5% | 9 | 0.84 | ||||||
Less than –3.5% and Greater than –4.0% | 6 | 0.56 | ||||||
Less than –4.0% and Greater than –4.5% | 4 | 0.37 | ||||||
Less than –4.5% and Greater than –5.0% | 2 | 0.19 | ||||||
Less than –5.0% and Greater than –5.5% | 1 | 0.09 | ||||||
Less than –5.5% and Greater than –6.0% | 4 | 0.37 | ||||||
Less than –6.0% | 7 | 0.65 | ||||||
|
|
|
| |||||
1,072 | 100.00 | % | ||||||
|
|
|
|
iShares MSCI USA Index Fund
Period Covered: July 1, 2010 through June 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 1.5% | 1 | 0.20 | % | |||||
Greater than 1.0% and Less than 1.5% | 3 | 0.59 | ||||||
Greater than 0.5% and Less than 1.0% | 7 | 1.39 | ||||||
Between 0.5% and –0.5% | 482 | 95.44 | ||||||
Less than –0.5% and Greater than –1.0% | 12 | 2.38 | ||||||
|
|
|
| |||||
505 | 100.00 | % | ||||||
|
|
|
|
98 | 2012 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 he or she resigns, is removed, dies, retires or becomes incapacitated. The President, Treasurer and Secretary shall each hold office until their successors are chosen and qualified, and all other officers shall hold office until he or she resigns or is removed. Directors who are not interested persons (as defined in the 1940 Act) are referred to as Independent Directors.
The registered investment companies advised by BFA or its affiliates are organized into one complex of closed-end funds, two complexes of open-end funds and one complex of exchange-traded funds (“Exchange-Traded Fund Complex”) (each, a “BlackRock Fund Complex”). Each Fund is included in the BlackRock Fund Complex referred to as the Exchange-Traded Fund Complex. Each Director of iShares, Inc. also serves as a Trustee of iShares Trust, a Director of iShares MSCI Russia Capped Index Fund, Inc. and a Trustee of iShares U.S. ETF Trust and, as a result, oversees a total of 276 funds within the Exchange-Traded 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 Robert H. Silver 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-iShares (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 (55) | 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); President of Board of Directors, Hope & Heroes Children’s Cancer Fund (since 2002); President of the Board of Directors, Periwinkle Theatre for Youth (since 1983). | Director of BlackRock, Inc. (since 2007); Trustee of iShares Trust (since 2009); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). | |||
Michael Lathamb (47) | Director (since 2010); President (since 2007). | Chairman of iShares, BlackRock (since 2011); Global Chief Executive Officer of iShares, BlackRock (2010-2011); Managing Director, BlackRock (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, BGI (2003-2007). | Trustee of iShares Trust (since 2010); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). |
a | Robert S. Kapito is deemed to be an “interested person” (as defined in the 1940 Act) of the Trust 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 Trust due to his affiliations with BlackRock, Inc. and its affiliates. |
DIRECTORAND OFFICER INFORMATION | 99 |
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 | |||
Robert H. Silver (57) | Director (since 2007); Independent Chairman (since 2012). | President and Co-Founder of The Bravitas Group, Inc. (since 2006); Director and Vice Chairman of the YMCA of Greater NYC (2001-2011); Broadway Producer (2006-2011); 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); President and Chief Operating Officer of UBS Financial Services Inc. (formerly Pain Webber Inc.) (2004-2005) and various executive positions with UBS and its affiliates (1988-2005); CPA and Audit Manager of KPMG, LLP (formerly Peat Marwick Mitchell) (1977-1983). | Trustee of iShares Trust (since 2007); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Independent Chairman of iShares, Inc., iShares MSCI Russia Capped Index Fund, Inc. and iShares U.S. ETF Trust (since 2012). | |||
Cecilia H. Herbert (63) | Director (since 2005); Nominating and Governance Committee Chair and Equity Plus Committee Chair (since 2012). | Director (since 1998) and President (2007-2011) of the Board of Directors, Catholic Charities CYO; Trustee (since 2002) and Chair of the Finance Committee (2006-2009) and Investment Committee (since 2006), The Thacher School; Trustee of Pacific Select Funds (2004-2005); Member (since 1994) and Chair (1994-2005) of the Investment Committee, Archdiocese of San Francisco. | Trustee of iShares Trust (since 2005); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of Forward Funds (35 portfolios) (since 2009). | |||
Charles A. Hurty (69) | Director (since 2005); Audit Committee Chair (since 2006). | Retired; Partner, KPMG LLP (1968-2001). | Trustee of iShares Trust (since 2005); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of GMAM Absolute Return Strategy Fund (1 portfolio) (since 2002); Director of SkyBridge Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (1 portfolio) (since 2002). | |||
John E. Kerrigan (57) | Director (since 2005); Fixed Income Plus Committee Chair (since 2012). | Chief Investment Officer, Santa Clara University (since 2002). | Trustee of iShares Trust (since 2005); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). |
100 | 2012 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 | |||
John E. Martinez (51) | Director (since 2003); Securities Lending Committee Chair (since 2012). | Director of FirstREX Agreement Corp. (formerly EquityRock, Inc.) (since 2005). | Trustee of iShares Trust (since 2003); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). | |||
George G.C. Parker (73) | Director (since 2002). | Dean Witter Distinguished Professor of Finance, Emeritus, Stanford University Graduate School of Business (Professor since 1973; Emeritus since 2006). | Trustee of iShares Trust (since 2002); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of Tejon Ranch Company (since 1999); Director of Threshold Pharmaceuticals (since 2004); Director of Colony Financial, Inc. (since 2009); Director of First Republic Bank (since 2010). | |||
Madhav V. Rajan (48) | Director (since 2011); 15(c) Committee Chair (since 2012). | Robert K. Jaedicke Professor of Accounting and Senior Associate Dean for Academic Affairs and Head of MBA Program, Stanford University Graduate School of Business (since 2001); Professor of Law (by courtesy), Stanford Law School (since 2005); Visiting Professor, University of Chicago (Winter 2007-2008). | Trustee of iShares Trust (since 2011); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2011); Trustee of iShares U.S. ETF Trust (since 2011). |
DIRECTORAND OFFICER INFORMATION | 101 |
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 | ||
Edward B. Baer (44) | Vice President and Chief Legal Officer (since 2012). | Managing Director, BlackRock (since 2006). | ||
Eilleen M. Clavere (60) | Secretary (since 2007). | Director, BlackRock (since 2009); Director of Legal Administration of Intermediary Investor Business, BGI (2006-2009). | ||
Jack Gee (53) | Treasurer and Chief Financial Officer (since 2008). | Managing Director, BlackRock (since 2009); Senior Director of Fund Administration of Intermediary Investor Business, BGI (2009); Director of Fund Administration of Intermediary Investor Business, BGI (2004-2009). | ||
Amy Schioldager (50) | Executive Vice President (since 2007). | Managing Director, BlackRock (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008). | ||
Ira P. Shapiro (49) | Vice President (since 2007). | Managing Director, BlackRock (since 2009); Chief Legal Officer, Exchange-Traded Funds Complex (2007-2012); Associate General Counsel, BGI (2004-2009). | ||
Scott Radell (43) | Executive Vice President (since 2012). | Managing Director, BlackRock (since 2009); Head of Portfolio Solutions, BGI (2007-2009); Credit Portfolio Manager, BGI (2005-2007). |
102 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
For more information visit www.iShares.com
or call 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 BlackRock Investments, LLC (together with its affiliates, “BlackRock”).
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds. BlackRock is not affiliated with the company listed above.
A description of the policies that the 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 daily and monthly basis on the Funds’ website.
©2012 BlackRock. All rights reserved. iShares® and BlackRock® are registered trademarks of BlackRock. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.
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iS-AR-84-0812
Table of Contents
![]() | August 31, 2012 |
2012 Annual Report
iShares, Inc.
iShares MSCI Emerging Markets Index Fund | EEM | NYSE Arca
Table of Contents
Table of Contents
5 | ||||
8 | ||||
9 | ||||
23 | ||||
26 | ||||
27 | ||||
36 | ||||
37 | ||||
Board Review and Approval of Investment Advisory Contract (Unaudited) | 38 | |||
41 | ||||
43 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI EMERGING MARKETS INDEX FUND
Performance as of August 31, 2012
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Inception to 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(6.18)% | (6.19)% | (5.80)% | (0.64)% | (0.54)% | (0.37)% | 15.96% | 15.97% | 16.35% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/12 | Five Years Ended 8/31/12 | Inception to 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(6.18)% | (6.19)% | (5.80)% | (3.15)% | (2.69)% | (1.82)% | 302.21% | 302.52% | 314.82% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
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 periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (4/11/03), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 5 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/12 | ||
Sector* | Percentage of Net Assets |
Financial | 24.10 | % | ||
Energy | 12.12 | |||
Communications | 11.19 | |||
Basic Materials | 10.68 | |||
Consumer Non-Cyclical | 9.76 | |||
Technology | 9.52 | |||
Consumer Cyclical | 9.10 | |||
Industrial | 6.96 | |||
Utilities | 3.71 | |||
Diversified | 2.36 | |||
Short-Term and Other Net Assets | 0.50 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS As of 8/31/12
Security | Percentage of Net Assets |
Samsung Electronics Co. Ltd. (South Korea) | 3.58 | % | ||
China Mobile Ltd. (China) | 1.90 | |||
Taiwan Semiconductor Manufacturing Co. Ltd. (Taiwan) | 1.86 | |||
Gazprom OAO (Russia) | 1.53 | |||
America Movil SAB de CV Series L (Mexico) | 1.51 | |||
China Construction Bank Corp. Class H (China) | 1.36 | |||
Petroleo Brasileiro SA (Preferred) (Brazil) | 1.26 | |||
Itau Unibanco Holding SA (Preferred) (Brazil) | 1.03 | |||
CNOOC Ltd. (China) | 1.00 | |||
Hyundai Motor Co. (South Korea) | 1.00 | |||
|
| |||
TOTAL | 16.03 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI Emerging Markets Index Fund (the “Fund”) seeks 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, 2012 (the “reporting period”), the total return for the Fund was (6.18)%, net of fees, while the total return for the Index was (5.80)%.
As represented by the Index, emerging markets stocks declined for the reporting period, reflecting a slowdown in growth rates in many emerging economies. Larger countries such as China, India, and Brazil — among the most rapidly growing economies in the world over the past decade — saw their economic growth rates fall during the reporting period. One factor behind this trend was the continuing sovereign debt crisis in Europe, which had a negative impact on financial institutions around the globe and led to a meaningful slowdown in European economic growth, including recessions in the most fiscally challenged countries in the region. Exports to developed regions of the world are an important component of emerging economies — for example, exports comprise approximately 40% of the Chinese economy, and the European Union is its largest trading partner. A marked decline in exports to Europe weighed on economic activity in many emerging markets.
In addition, central banks in many emerging markets raised short-term interest rates in 2011 to curb rising inflation, and this had a negative impact on domestic economic growth in 2012. Central banks in China, South Korea, and Brazil — the three largest country weightings in the Index on average — all raised interest rates in 2011 to combat runaway inflation. Although these three central banks were successful in lowering the inflation rate, higher borrowing costs put downward pressure on their respective domestic economies. By the spring of 2012, all three central banks began lowering short-term rates.
The primary factor behind the Index’s overall decline, however, was a stronger U.S. dollar, which lowered international equity returns for U.S. investors (in local currency terms, the Index gained 3.38% for the reporting period). Although the U.S. dollar was largely unchanged versus the Chinese yuan, it appreciated by 6.5% versus the South Korean won and more than 20% against the Brazilian real, Indian rupee, and South African rand.
6 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
On a regional basis, emerging markets in Eastern Europe suffered the most significant declines for the reporting period. Close proximity to the troubled eurozone contributed to the decline in Eastern European markets, most notably in Hungary, Poland, and Russia. Equity markets in Latin America also struggled during the reporting period, led by a sharp decline in the Brazilian stock market. Emerging markets in the Asia/Pacific region held up best as positive returns in the Philippines and Malaysia helped mitigate declines elsewhere, particularly the two largest economies in the region — India and China.
From a sector perspective, six of the ten sectors in the Index declined for the reporting period. The most economically sensitive sectors—including energy, materials, and industrials — posted double-digit declines for the reporting period. In particular, the energy and materials sectors were adversely impacted by a substantial decline in commodity prices. On the positive side, information technology stocks generated the best returns, gaining more than 13% as a group for the reporting period. The other sectors that gained ground are considered to be defensive sectors of the market — consumer staples, health care, and telecommunication services.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 7 |
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, 2012 to August 31, 2012.
ACTUAL EXPENSES
The first line in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line in the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of Fund shares. Therefore, the second line in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value (3/1/12) | Ending Account Value (8/31/12) | Annualized Expense Ratio | Expenses Paid During Period a | |||||||||||||
Actual | $ | 1,000.00 | $ | 892.50 | 0.68 | % | $ | 3.23 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,021.70 | 0.68 | 3.46 |
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 (366 days). |
8 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 91.69% |
| |||||||
BRAZIL — 6.10% |
| |||||||
ALL-America Latina Logistica SA | 4,491,100 | $ | 19,765,665 | |||||
Amil Participacoes SA | 1,352,500 | 13,731,303 | ||||||
Anhanguera Educacional Participacoes SA | 1,162,900 | 17,314,117 | ||||||
Banco do Brasil SA | 6,179,874 | 70,599,285 | ||||||
Banco Santander (Brasil) SA Units | 7,368,080 | 56,648,209 | ||||||
BM&F Bovespa SA | 18,644,600 | 98,779,946 | ||||||
BR Malls Participacoes SA | 4,113,900 | 51,295,764 | ||||||
BR Properties SA | 1,095,100 | 13,330,854 | ||||||
BRF-Brasil Foods SA | 6,508,185 | 104,596,690 | ||||||
CCR SA | 9,039,100 | 81,256,344 | ||||||
Centrais Eletricas Brasileiras SA | 2,627,237 | 16,858,444 | ||||||
CETIP SA-Mercados Organizados | 1,963,403 | 25,255,572 | ||||||
Cielo SA | 3,050,952 | 90,233,178 | ||||||
Companhia de Saneamento Basico do Estado de Sao Paulo | 1,353,008 | 57,213,024 | ||||||
Companhia de Saneamento de Minas Gerais SA | 270,900 | 6,475,272 | ||||||
Companhia Hering SA | 1,343,100 | 29,356,834 | ||||||
Companhia Siderurgica Nacional SA | 7,256,128 | 35,761,208 | ||||||
Cosan SA Industria e Comercio | 1,234,100 | 20,557,690 | ||||||
CPFL Energia SA | 2,124,936 | 22,516,017 | ||||||
Cyrela Brazil Realty SA | 3,226,900 | 26,256,681 | ||||||
Diagnosticos da America SA | 2,371,300 | 14,970,727 | ||||||
Duratex SA | 3,154,880 | 18,984,788 | ||||||
EcoRodovias Infraestrutura e Logistica SA | 1,884,600 | 15,650,432 | ||||||
EDP Energias do Brasil SA | 2,694,200 | 17,221,741 | ||||||
Embraer SA | 5,559,400 | 38,358,641 | ||||||
Fibria Celulose SAa | 2,529,261 | 19,682,625 | ||||||
Hypermarcas SAa | 2,845,600 | 18,273,659 | ||||||
JBS SAa | 5,728,665 | 16,290,578 | ||||||
Light SA | 720,400 | 8,741,159 | ||||||
Localiza Rent A Car SA | 1,133,500 | 19,999,162 | ||||||
Lojas Renner SA | 1,235,700 | 40,754,562 | ||||||
MMX Mineracao e Metalicos SAa | 2,832,300 | 7,607,518 | ||||||
MPX Energia SAa | 729,600 | 4,530,672 | ||||||
MRV Engenharia e Participacoes SA | 2,881,200 | 16,727,304 | ||||||
Multiplan Empreendimentos Imobiliarios SA | 623,000 | 15,935,388 |
Security | Shares | Value | ||||||
Multiplus SA | 291,900 | $ | 6,214,770 | |||||
Natura Cosmeticos SA | 1,769,700 | 44,394,042 | ||||||
Obrascon Huarte Lain Brasil SA | 1,204,900 | 11,668,655 | ||||||
Odontoprev SA | 3,224,000 | 17,478,130 | ||||||
OGX Petroleo e Gas Participacoes SAa | 13,362,700 | 41,489,865 | ||||||
Oi SA | 1,370,108 | 6,178,501 | ||||||
PDG Realty SA Empreendimentos e Participacoes | 11,255,900 | 21,912,129 | ||||||
Petroleo Brasileiro SA | 30,310,374 | 318,183,863 | ||||||
Porto Seguro SA | 876,900 | 8,098,916 | ||||||
Raia Drogasil SA | 1,518,400 | 16,066,656 | ||||||
Redecard SA | 3,362,100 | 55,591,757 | ||||||
Souza Cruz SA | 3,793,100 | 50,866,293 | ||||||
Sul America SA Units | 1,152,271 | 8,188,930 | ||||||
TIM Participacoes SA | 8,689,976 | 34,562,040 | ||||||
Totvs SA | 1,118,600 | 21,748,488 | ||||||
Tractebel Energia SA | 1,392,200 | 23,163,881 | ||||||
Ultrapar Participacoes SA | 3,227,000 | 69,023,336 | ||||||
Vale SA | 12,165,448 | 202,532,630 | ||||||
|
| |||||||
2,088,893,935 | ||||||||
CHILE — 1.89% |
| |||||||
AES Gener SA | 11,995,257 | 6,760,350 | ||||||
Aguas Andinas SA | 12,313,347 | 8,055,846 | ||||||
Banco de Chile | 212,396,726 | 29,911,544 | ||||||
Banco de Credito e Inversiones | 240,554 | 15,172,982 | ||||||
Banco Santander (Chile) SA SP ADRb | 1,141,421 | 84,796,166 | ||||||
CAP SA | 417,591 | 14,064,896 | ||||||
Cencosud SA | 7,584,574 | 43,964,631 | ||||||
Colbun SAa | 50,883,210 | 14,418,499 | ||||||
Compania Cervecerias Unidas SA | 491,207 | 6,408,497 | ||||||
CorpBanca SA | 966,661,862 | 11,512,192 | ||||||
E.CL SA | 5,783,229 | 14,051,693 | ||||||
Empresa Nacional de Electricidad SA | 22,185,057 | 36,653,151 | ||||||
Empresa Nacional de Electricidad SA SP ADR | 247,715 | 12,202,441 | ||||||
Empresa Nacional de Telecomunicaciones SA | 705,203 | 13,600,155 | ||||||
Empresas CMPC SA | 7,773,567 | 28,878,567 | ||||||
Empresas Copec SA | 3,490,907 | 50,278,364 |
CONSOLIDATED SCHEDULEOF INVESTMENTS | 9 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Enersis SA SP ADR | 4,354,222 | $ | 71,714,036 | |||||
LATAM Airlines Group SA BDRa | 628,765 | 14,254,548 | ||||||
LATAM Airlines Group SA SP ADRb | 2,451,384 | 57,828,149 | ||||||
S.A.C.I. Falabella SA | 3,539,692 | 32,240,455 | ||||||
Sociedad Quimica y Minera de Chile SA Series B SP ADRb | 1,290,584 | 79,551,598 | ||||||
Vina Concha y Toro SA | 784,495 | 1,534,674 | ||||||
|
| |||||||
647,853,434 | ||||||||
CHINA — 17.17% |
| |||||||
Agile Property Holdings Ltd.b | 16,996,000 | 19,502,259 | ||||||
Agricultural Bank of China Ltd. Class H | 197,147,000 | 72,694,978 | ||||||
Air China Ltd. Class H | 22,098,000 | 13,305,097 | ||||||
Aluminum Corp. of China Ltd. Class Ha,b | 33,614,000 | 12,871,372 | ||||||
Angang Steel Co. Ltd. Class Ha,b | 17,513,320 | 8,557,677 | ||||||
Anhui Conch Cement Co. Ltd. Class Hb | 13,200,000 | 32,947,881 | ||||||
Anta Sports Products Ltd.b | 8,795,402 | 5,204,950 | ||||||
AviChina Industry & Technology Co. Ltd. Class H | 18,324,000 | 6,614,949 | ||||||
Bank of China Ltd. Class H | 723,804,000 | 263,159,037 | ||||||
Bank of Communications Co. Ltd. Class H | 76,128,600 | 49,762,708 | ||||||
BBMG Corp. Class Hb | 10,294,500 | 6,264,630 | ||||||
Beijing Capital International Airport Co. Ltd. Class H | 26,794,000 | 18,308,873 | ||||||
Beijing Enterprises Holdings Ltd.b | 5,970,500 | 39,489,012 | ||||||
Belle International Holdings Ltd.b | 43,106,000 | 77,806,156 | ||||||
Bosideng International Holdings Ltd. | 20,274,000 | 5,593,729 | ||||||
Brilliance China Automotive Holdings Ltd.a,b | 21,396,000 | 20,909,806 | ||||||
BYD Co. Ltd. Class Ha,b | 3,437,000 | 5,991,070 | ||||||
China Agri-Industries Holdings Ltd. | 22,040,000 | 10,911,665 | ||||||
China BlueChemical Ltd. Class H | 8,264,000 | 4,762,621 | ||||||
China CITIC Bank Corp. Ltd. Class H | 64,340,800 | 30,692,791 | ||||||
China Coal Energy Co. Class H | 39,189,000 | 32,639,605 | ||||||
China Communications Construction Co. Ltd. Class H | 45,441,000 | 34,917,436 | ||||||
China Communications Services Corp. Ltd. Class H | 9,540,000 | 5,301,196 |
Security | Shares | Value | ||||||
China Construction Bank Corp. Class H | 706,380,760 | $ | 464,469,541 | |||||
China COSCO Holdings Co. Ltd. Class Ha,b | 25,298,500 | 9,589,375 | ||||||
China Everbright Ltd.b | 17,140,000 | 20,838,704 | ||||||
China Gas Holdings Ltd.b | 33,126,000 | 18,108,524 | ||||||
China International Marine Containers (Group) Co. Ltd. Class B | 279,500 | 352,787 | ||||||
China Life Insurance Co. Ltd. Class H | 76,380,000 | 204,336,503 | ||||||
China Longyuan Power Group Corp. Ltd. Class H | 14,376,000 | 9,322,969 | ||||||
China Mengniu Dairy Co. Ltd.b | 13,602,000 | 40,948,487 | ||||||
China Merchants Bank Co. Ltd. Class H | 39,332,042 | 67,850,150 | ||||||
China Merchants Holdings (International) Co. Ltd.b | 11,448,000 | 32,840,355 | ||||||
China Minsheng Banking Corp. Ltd. Class Hb | 52,137,700 | 42,483,193 | ||||||
China Mobile Ltd. | 61,024,500 | 651,452,519 | ||||||
China National Building Material Co. Ltd. Class Hb | 30,358,000 | 28,415,675 | ||||||
China Oilfield Services Ltd. Class H | 13,252,000 | 21,151,943 | ||||||
China Overseas Land & Investment Ltd.b | 43,288,960 | 97,782,121 | ||||||
China Pacific Insurance (Group) Co. Ltd. Class H | 16,209,400 | 48,066,553 | ||||||
China Petroleum & Chemical Corp. Class H | 168,126,000 | 158,236,235 | ||||||
China Railway Construction Corp. Ltd. Class Hb | 18,686,000 | 14,117,642 | ||||||
China Railway Group Ltd. Class H | 35,675,000 | 13,430,588 | ||||||
China Resources Cement Holdings Ltd.b | 22,774,000 | 10,041,848 | ||||||
China Resources Enterprise Ltd.b | 15,162,000 | 45,058,385 | ||||||
China Resources Gas Group Ltd.b | 6,186,000 | 12,170,619 | ||||||
China Resources Land Ltd. | 23,664,000 | 45,703,364 | ||||||
China Resources Power Holdings Co. Ltd. | 19,598,999 | 41,895,427 | ||||||
China Rongsheng Heavy Industries Group Holdings Ltd.b | 17,010,000 | 2,324,654 |
10 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
China Shanshui Cement Group Ltd. | 18,795,000 | $ | 9,813,989 | |||||
China Shenhua Energy Co. Ltd. Class H | 33,892,000 | 123,442,256 | ||||||
China Shipping Container Lines Co. Ltd. Class Ha,b | 49,968,000 | 9,534,587 | ||||||
China Shipping Development Co. Ltd. Class H | 19,068,000 | 7,153,957 | ||||||
China Southern Airlines Co. Ltd. Class Hb | 11,864,000 | 5,032,401 | ||||||
China State Construction International Holdings Ltd. | 14,466,000 | 15,405,532 | ||||||
China Taiping Insurance Holdings Co. Ltd.a,b | 5,612,800 | 7,482,527 | ||||||
China Telecom Corp. Ltd. Class H | 129,000,000 | 70,851,249 | ||||||
China Unicom (Hong Kong) Ltd. | 50,720,000 | 80,301,898 | ||||||
China Vanke Co. Ltd. Class B | 6,242,061 | 7,806,349 | ||||||
China Yurun Food Group Ltd.a,b | 14,485,000 | 8,852,074 | ||||||
China ZhengTong Auto Services Holdings Ltd.a,b | 8,917,500 | 5,334,691 | ||||||
China Zhongwang Holdings Ltd.a,b | 2,640,000 | 1,068,764 | ||||||
Chongqing Rural Commercial Bank Co. Ltd. Class Hb | 22,983,000 | 9,422,845 | ||||||
CITIC Pacific Ltd.b | 15,913,000 | 19,470,024 | ||||||
CITIC Securities Co. Ltd. Class H | 1,827,500 | 3,067,726 | ||||||
CNOOC Ltd. | 181,779,000 | 344,047,152 | ||||||
COSCO Pacific Ltd. | 12,708,000 | 15,679,685 | ||||||
Country Garden Holdings Co. Ltd.a | 35,620,381 | 12,491,531 | ||||||
CSG Holding Co. Ltd. Class B | 2,702,800 | 1,662,189 | ||||||
CSR Corp Ltd. Class Hb | 15,736,000 | 10,671,569 | ||||||
Dah Chong Hong Holdings Ltd.b | 8,291,000 | 7,525,369 | ||||||
Daphne International Holdings Ltd.b | 9,102,000 | 9,106,401 | ||||||
Datang International Power Generation Co. Ltd. Class H | 26,790,000 | 8,980,371 | ||||||
Dongfang Electric Corp. Ltd. Class H | 6,042,000 | 8,241,658 | ||||||
Dongfeng Motor Group Co. Ltd. Class H | 26,012,000 | 33,670,972 | ||||||
ENN Energy Holdings Ltd. | 8,184,000 | 32,287,562 | ||||||
Evergrande Real Estate Group Ltd.b | 55,637,388 | 21,232,770 | ||||||
Far East Horizon Ltd. | 11,485,000 | 7,966,388 |
Security | Shares | Value | ||||||
Fosun International Ltd.b | 12,278,000 | $ | 5,793,712 | |||||
Franshion Properties (China) Ltd.b | 22,972,000 | 6,752,768 | ||||||
GCL-Poly Energy Holdings Ltd.b | 83,055,000 | 12,742,685 | ||||||
Geely Automobile Holdings Ltd.b | 31,350,000 | 10,064,335 | ||||||
Golden Eagle Retail Group Ltd.b | 6,199,000 | 11,365,000 | ||||||
GOME Electrical Appliances Holdings Ltd.b | 94,135,200 | 8,131,582 | ||||||
Great Wall Motor Co. Ltd. Class Hb | 9,919,500 | 22,406,400 | ||||||
Guangdong Investment Ltd.b | 29,010,110 | 21,431,482 | ||||||
Guangzhou Automobile Group Co. Ltd. Class H | 25,586,742 | 17,846,804 | ||||||
Guangzhou R&F Properties Co. Ltd. Class Hb | 13,431,200 | 15,515,688 | ||||||
Haier Electronics Group Co. Ltd.a | 8,280,000 | 9,746,514 | ||||||
Hengan International Group Co. Ltd.b | 7,164,000 | 72,044,093 | ||||||
Hengdeli Holdings Ltd.b | 19,451,329 | 5,115,966 | ||||||
Huabao International Holdings Ltd.b | 15,402,000 | 7,903,299 | ||||||
Huaneng Power International Inc. Class H | 38,734,000 | 26,717,409 | ||||||
Industrial and Commercial Bank of China Ltd. Class H | 630,909,085 | 341,636,507 | ||||||
Inner Mongolia Yitai Coal Co. Ltd. Class B | 4,769,175 | 25,972,927 | ||||||
Intime Department Store Group Co. Ltd.b | 9,699,500 | 9,966,803 | ||||||
Jiangsu Expressway Co. Ltd. Class H | 9,996,000 | 8,235,222 | ||||||
Jiangxi Copper Co. Ltd. Class H | 16,016,000 | 34,773,175 | ||||||
Kingboard Chemical Holdings Co. Ltd. | 4,333,000 | 9,474,640 | ||||||
Kunlun Energy Co. Ltd.b | 30,190,000 | 51,612,493 | ||||||
Lee & Man Paper Manufacturing Ltd.b | 11,630,000 | 4,768,206 | ||||||
Lenovo Group Ltd.b | 62,868,000 | 51,064,419 | ||||||
Longfor Properties Co. Ltd.b | 16,773,000 | 24,176,908 | ||||||
Metallurgical Corp. of China Ltd. Class Ha | 3,496,000 | 739,203 | ||||||
Minmetals Resources Ltd.a | 16,096,000 | 5,997,414 | ||||||
Nine Dragons Paper (Holdings) Ltd.b | 18,306,000 | 8,236,962 | ||||||
Parkson Retail Group Ltd.b | 8,721,500 | 7,084,023 | ||||||
PetroChina Co. Ltd. Class H | 212,964,000 | 256,723,726 |
CONSOLIDATED SCHEDULEOF INVESTMENTS | 11 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
PICC Property and Casualty Co. Ltd. Class H | 29,877,200 | $ | 35,939,310 | |||||
Ping An Insurance (Group) Co. of China Ltd. Class H | 17,760,500 | 128,230,524 | ||||||
Poly Property Group Co. Ltd.a,b | 23,789,458 | 11,777,795 | ||||||
Sany Heavy Equipment International Holdings Co. Ltd.b | 9,558,000 | 4,953,832 | ||||||
Shandong Weigao Group Medical Polymer Co. Ltd. Class H | 11,864,000 | 13,062,828 | ||||||
Shanghai Electric Group Co. Ltd. Class H | 12,742,000 | 5,109,121 | ||||||
Shanghai Industrial Holdings Ltd.b | 6,721,000 | 18,457,025 | ||||||
Shanghai Pharmaceuticals Holding Co. Ltd. Class H | 4,967,900 | 8,480,257 | ||||||
Shimao Property Holdings Ltd.b | 17,175,500 | 25,908,571 | ||||||
Shougang Fushan Resources Group Ltd.b | 19,250,000 | 5,063,014 | ||||||
Shui On Land Ltd.b | 51,199,450 | 18,614,981 | ||||||
Sihuan Pharmaceutical Holdings Group Ltd.b | 15,895,000 | 6,352,877 | ||||||
Sino-Ocean Land Holdings Ltd.b | 50,091,000 | 22,474,350 | ||||||
Sinopec Shanghai Petrochemical Co. Ltd. Class H | 31,906,000 | 8,350,579 | ||||||
Sinopharm Group Co. Ltd. Class Hb | 9,043,600 | 28,741,304 | ||||||
SOHO China Ltd.b | 28,837,500 | 18,441,128 | ||||||
Sun Art Retail Group Ltd.b | 19,346,000 | 24,418,674 | ||||||
Tencent Holdings Ltd. | 10,183,100 | 311,154,836 | ||||||
Tingyi (Cayman Islands) Holding Corp.b | 19,142,000 | 56,639,342 | ||||||
Tsingtao Brewery Co. Ltd. Class Hb | 3,960,000 | 21,239,130 | ||||||
Uni-President China Holdings Ltd.b | 3,613,000 | 3,726,543 | ||||||
Want Want China Holdings Ltd.b | 63,542,000 | 78,646,666 | ||||||
Weichai Power Co. Ltd. Class Hb | 3,661,200 | 9,676,661 | ||||||
Wumart Stores Inc. Class H | 2,145,750 | 3,618,554 | ||||||
Yanzhou Coal Mining Co. Ltd. Class H | 21,548,800 | 30,727,443 | ||||||
Yingde Gases Group Co. Ltd.b | 9,149,500 | 7,089,572 | ||||||
Yuexiu Property Co. Ltd.b | 51,614,000 | 12,044,653 | ||||||
Zhaojin Mining Industry Co. Ltd. Class H | 9,919,000 | 13,120,895 | ||||||
Zhejiang Expressway Co. Ltd. Class H | 29,022,000 | 19,157,794 | ||||||
Zhongsheng Group Holdings Ltd.b | 5,806,000 | 7,298,437 |
Security | Shares | Value | ||||||
Zhuzhou CSR Times Electric Co. Ltd. Class H | 4,794,000 | $ | 11,570,499 | |||||
Zijin Mining Group Co. Ltd. Class Hb | 64,540,000 | 20,220,106 | ||||||
Zoomlion Heavy Industry Science and Technology Co. Ltd. Class Hb | 10,255,640 | 10,974,609 | ||||||
ZTE Corp. Class Hb | 6,241,200 | 8,255,886 | ||||||
|
| |||||||
5,880,380,306 | ||||||||
COLOMBIA — 1.12% |
| |||||||
Almacenes Exito SA | 1,732,261 | 28,301,194 | ||||||
Bancolombia SA | 158,556 | 2,242,733 | ||||||
Bancolombia SA SP ADRb | 1,963,443 | 112,819,435 | ||||||
Cementos Argos SA | 2,309,658 | 8,990,445 | ||||||
Corporacion Financiera Colombiana SA | 929,638 | 16,819,109 | ||||||
Ecopetrol SA | 49,235,156 | 142,252,890 | ||||||
Grupo Argos SA | 1,992,611 | 19,226,948 | ||||||
Grupo de Inversiones Suramericana SA | 1,869,396 | 31,074,609 | ||||||
Interconexion Electrica SA ESP | 2,309,786 | 13,878,977 | ||||||
Isagen SA ESP | 5,650,806 | 7,636,643 | ||||||
|
| |||||||
383,242,983 | ||||||||
CZECH REPUBLIC — 0.39% |
| |||||||
CEZ AS | 2,215,457 | 87,007,079 | ||||||
Komercni Banka AS | 205,734 | 39,930,154 | ||||||
Telefonica O2 Czech Republic AS | 306,104 | 6,491,014 | ||||||
|
| |||||||
133,428,247 | ||||||||
EGYPT — 0.32% | ||||||||
Orascom Construction Industries SAE SP GDRb | 1,683,520 | 75,674,224 | ||||||
Orascom Telecom Holding SAE SP GDRa,c | 11,786,572 | 34,534,656 | ||||||
|
| |||||||
110,208,880 | ||||||||
HUNGARY — 0.34% | ||||||||
Magyar Telekom Telecommunications PLC | 3,454,572 | 6,555,126 | ||||||
MOL Hungarian Oil and Gas PLC | 524,754 | 38,666,049 | ||||||
OTP Bank Nyrtb | 2,158,571 | 34,250,826 | ||||||
Richter Gedeon Nyrt | 216,823 | 37,009,149 | ||||||
|
| |||||||
116,481,150 |
12 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
INDIA — 6.39% |
| |||||||
ACC Ltd. | 559,723 | $ | 13,166,697 | |||||
Adani Enterprises Ltd. | 1,708,441 | 4,785,170 | ||||||
Adani Ports and Special Economic Zone Ltd. | 2,513,268 | 5,139,492 | ||||||
Aditya Birla Nuvo Ltd. | 95,047 | 1,272,306 | ||||||
Ambuja Cements Ltd. | 5,580,326 | 18,589,383 | ||||||
Asian Paints Ltd. | 219,572 | 14,371,160 | ||||||
Axis Bank Ltd. | 1,549,175 | 27,621,964 | ||||||
Axis Bank Ltd. SP GDRb,c | 1,014,533 | 18,403,629 | ||||||
Bajaj Auto Ltd. | 674,015 | 19,595,812 | ||||||
Bank of Baroda | 742,670 | 8,436,064 | ||||||
Bank of India | 881,551 | 4,046,022 | ||||||
Bharat Heavy Electricals Ltd. | 4,742,342 | 18,180,754 | ||||||
Bharat Petroleum Corp. Ltd. | 1,417,114 | 8,530,708 | ||||||
Bharti Airtel Ltd. | 5,767,366 | 25,692,643 | ||||||
Cairn India Ltd.a | 2,121,630 | 12,970,072 | ||||||
Canara Bank Ltd. | 725,298 | 4,147,727 | ||||||
Cipla Ltd. | 2,726,525 | 18,452,141 | ||||||
Coal India Ltd. | 5,252,854 | 33,188,594 | ||||||
Dabur India Ltd. | 2,058,839 | 4,535,923 | ||||||
DLF Ltd. | 3,712,800 | 13,018,996 | ||||||
Dr. Reddy’s Laboratories Ltd. | 253,733 | 7,652,359 | ||||||
Dr. Reddy’s Laboratories Ltd. SP ADR | 1,179,740 | 35,439,390 | ||||||
GAIL (India) Ltd. | 3,259,000 | 20,801,941 | ||||||
GMR Infrastructure Ltd.a | 3,858,567 | 1,262,488 | ||||||
Godrej Consumer Products Ltd. | 805,182 | 10,021,169 | ||||||
HCL Technologies Ltd. | 1,228,444 | 12,022,740 | ||||||
HDFC Bank Ltd. | 9,708,803 | 103,912,555 | ||||||
HDFC Bank Ltd. SP ADRb | 2,120,509 | 71,206,692 | ||||||
Hero Motocorp Ltd. | 593,226 | 18,801,931 | ||||||
Hindalco Industries Ltd. | 9,036,539 | 16,870,914 | ||||||
Hindustan Unilever Ltd. | 8,264,695 | 76,532,933 | ||||||
Housing Development Finance Corp. Ltd. | 12,467,118 | 164,801,292 | ||||||
ICICI Bank Ltd. | 2,062,029 | 33,442,867 | ||||||
ICICI Bank Ltd. SP ADR | 1,403,898 | 45,668,802 | ||||||
Idea Cellular Ltd.a | 6,690,386 | 8,978,648 | ||||||
Infosys Ltd. | 3,646,486 | 154,817,504 | ||||||
Infosys Ltd. SP ADRb | 728,217 | 30,971,069 | ||||||
Infrastructure Development Finance Co. Ltd. | 8,671,645 | 20,897,690 |
Security | Shares | Value | ||||||
ITC Ltd. | 20,701,342 | $ | 99,608,345 | |||||
Jaiprakash Associates Ltd. | 6,932,133 | 8,044,390 | ||||||
Jindal Steel & Power Ltd. | 3,070,008 | 19,435,565 | ||||||
JSW Steel Ltd. | 644,368 | 8,035,921 | ||||||
Kotak Mahindra Bank Ltd. | 2,120,219 | 21,882,566 | ||||||
Larsen & Toubro Ltd. | 981,976 | 23,706,887 | ||||||
Larsen & Toubro Ltd. SP GDRc | 1,609,902 | 39,442,599 | ||||||
LIC Housing Finance Ltd. | 3,086,623 | 13,323,113 | ||||||
Lupin Ltd. | 1,176,442 | 12,543,780 | ||||||
Mahanagar Telephone Nigam Ltd. SP ADRa | 1,152,978 | 1,521,931 | ||||||
Mahindra & Mahindra Ltd. | 2,681,964 | 36,795,341 | ||||||
Maruti Suzuki (India) Ltd. | 326,206 | 6,704,743 | ||||||
NTPC Ltd. | 3,989,639 | 12,053,193 | ||||||
Oil & Natural Gas Corp. Ltd. | 7,389,880 | 36,653,805 | ||||||
Piramal Healthcare Ltd. | 244,767 | 2,112,587 | ||||||
Power Finance Corp. Ltd. | 2,672,738 | 7,702,290 | ||||||
Power Grid Corp. of India Ltd. | 8,525,203 | 18,307,155 | ||||||
Ranbaxy Laboratories Ltd.a | 942,592 | 9,348,818 | ||||||
Reliance Capital Ltd. | 791,439 | 4,550,152 | ||||||
Reliance Communications Ltd. | 2,904,501 | 2,516,799 | ||||||
Reliance Industries Ltd. | 10,069,375 | 138,735,622 | ||||||
Reliance Industries Ltd. SP GDRd | 1,512,963 | 41,379,538 | ||||||
Reliance Infrastructure Ltd. | 819,335 | 6,541,423 | ||||||
Reliance Power Ltd.a | 4,365,829 | 5,980,695 | ||||||
Rural Electrification Corp. Ltd. | 1,550,323 | 5,259,253 | ||||||
Satyam Computer Services Ltd.a | 4,888,350 | 8,194,852 | ||||||
Sesa Goa Ltd. | 2,183,396 | 6,729,766 | ||||||
Shriram Transport Finance Co. Ltd. | 920,094 | 10,506,026 | ||||||
Siemens Ltd. | 316,427 | 3,857,138 | ||||||
State Bank of India | 1,073,405 | 35,455,653 | ||||||
State Bank of India SP GDR | 179,354 | 12,465,103 | ||||||
Sterlite Industries (India) Ltd. | 3,244,033 | 5,607,439 | ||||||
Sterlite Industries (India) Ltd. SP ADRb | 4,873,169 | 34,404,573 | ||||||
Sun Pharmaceuticals Industries Ltd. | 2,742,299 | 32,951,958 | ||||||
Tata Communications Ltd. SP ADR | 4,934,087 | 39,127,310 | ||||||
Tata Consultancy Services Ltd. | 4,671,164 | 112,842,726 | ||||||
Tata Motors Ltd. | 8,377,839 | 35,288,587 | ||||||
Tata Motors Ltd. SP ADR | 1,521,937 | 32,143,309 | ||||||
Tata Power Co. Ltd. | 7,422,323 | 13,276,784 | ||||||
Tata Steel Ltd. | 2,413,916 | 15,683,402 |
CONSOLIDATED SCHEDULEOF INVESTMENTS | 13 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Titan Industries Ltd. | 2,160,805 | $ | 8,559,701 | |||||
Ultratech Cement Ltd. | 553,661 | 16,860,159 | ||||||
Unitech Ltd.a | 9,517,513 | 3,148,265 | ||||||
United Phosphorus Ltd. | 786,724 | 1,691,545 | ||||||
United Spirits Ltd. | 698,434 | 12,168,761 | ||||||
Wipro Ltd. SP ADRb | 6,310,712 | 49,097,339 | ||||||
Zee Entertainment Enterprises Ltd. | 3,015,743 | 8,861,541 | ||||||
|
| |||||||
2,189,356,689 | ||||||||
INDONESIA — 2.72% |
| |||||||
PT Adaro Energy Tbk | 108,378,000 | 15,571,878 | ||||||
PT Astra Agro Lestari Tbk | 4,076,000 | 9,532,753 | ||||||
PT Astra International Tbk | 211,248,500 | 149,546,657 | ||||||
PT Bank Central Asia Tbk | 137,505,000 | 111,763,372 | ||||||
PT Bank Danamon Indonesia Tbk | 37,001,716 | 23,283,723 | ||||||
PT Bank Mandiri (Persero) Tbk | 95,389,900 | 78,032,640 | ||||||
PT Bank Negara Indonesia (Persero) Tbk | 72,414,276 | 28,289,793 | ||||||
PT Bank Rakyat Indonesia (Persero) Tbk | 118,363,122 | 86,274,116 | ||||||
PT Bukit Asam (Persero) Tbk | 4,705,500 | 7,205,066 | ||||||
PT Bumi Resources Tbk | 169,490,000 | 12,442,895 | ||||||
PT Charoen Pokphand Indonesia Tbk | 82,641,445 | 23,401,353 | ||||||
PT Gudang Garam Tbk | 6,192,000 | 32,534,788 | ||||||
PT Indo Tambangraya Megah Tbk | 3,654,500 | 14,640,996 | ||||||
PT Indocement Tunggal Prakarsa Tbk | 9,343,500 | 19,843,301 | ||||||
PT Indofood Sukses Makmur Tbk | 47,323,000 | 26,800,650 | ||||||
PT Indosat Tbk | 2,268,560 | 1,213,388 | ||||||
PT Jasa Marga (Persero) Tbk | 16,095,000 | 9,705,952 | ||||||
PT Kalbe Farma Tbk | 31,231,903 | 12,692,567 | ||||||
PT Perusahaan Gas Negara (Persero) Tbk | 131,383,500 | 50,982,585 | ||||||
PT Semen Gresik (Persero) Tbk | 24,464,000 | 31,814,746 | ||||||
PT Telekomunikasi Indonesia (Persero) Tbk | 96,055,000 | 93,687,624 | ||||||
PT Unilever Indonesia Tbk | 9,314,000 | 26,471,882 | ||||||
PT United Tractors Tbk | 24,059,653 | 50,592,139 | ||||||
PT Vale Indonesia Tbk | 15,349,500 | 3,702,554 | ||||||
PT XL Axiata Tbk | 17,273,500 | 13,043,440 | ||||||
|
| |||||||
933,070,858 |
Security | Shares | Value | ||||||
MALAYSIA — 3.79% |
| |||||||
AirAsia Bhd | 15,620,400 | $ | 17,247,681 | |||||
Alliance Financial Group Bhd | 7,378,700 | 9,753,250 | ||||||
AMMB Holdings Bhd | 25,580,075 | 51,987,030 | ||||||
Axiata Group Bhd | 25,337,800 | 48,575,267 | ||||||
Berjaya Corp. Bhd | 11,013,200 | 2,361,608 | ||||||
Berjaya Sports Toto Bhd | 14,253,600 | 20,117,899 | ||||||
British American Tobacco (Malaysia) Bhd | 1,498,500 | 30,588,680 | ||||||
Bumi Armada Bhda | 8,973,300 | 10,884,560 | ||||||
CIMB Group Holdings Bhd | 43,046,300 | 107,322,988 | ||||||
DiGi.Com Bhd | 23,663,200 | 36,428,226 | ||||||
Felda Global Ventures Holdings Bhda | 10,889,400 | 17,425,828 | ||||||
Gamuda Bhd | 30,934,100 | 34,156,712 | ||||||
Genting Bhd | 23,455,800 | 67,713,655 | ||||||
Genting Malaysia Bhd | 45,507,200 | 51,413,159 | ||||||
Genting Plantations Bhd | 4,031,400 | 11,986,464 | ||||||
Hong Leong Bank Bhd | 3,166,700 | 13,621,523 | ||||||
Hong Leong Financial Group Bhd | 722,500 | 2,784,093 | ||||||
IHH Healthcare Bhda | 19,992,300 | 20,475,391 | ||||||
IJM Corp. Bhd | 18,743,220 | 30,833,782 | ||||||
IOI Corp. Bhd | 37,683,820 | 61,992,266 | ||||||
Kuala Lumpur Kepong Bhd | 5,813,600 | 43,241,499 | ||||||
Lafarge Malayan Cement Bhd | 3,587,900 | 9,875,481 | ||||||
Malayan Banking Bhd | 31,611,600 | 92,573,577 | ||||||
Malaysia Airports Holdings Bhd | 4,468,300 | 7,836,865 | ||||||
Malaysia Marine and Heavy Engineering Holdings Bhd | 4,873,900 | 7,456,310 | ||||||
Maxis Communications Bhd | 17,605,800 | 39,668,693 | ||||||
MISC Bhd | 7,254,000 | 9,890,235 | ||||||
MMC Corp. Bhd | 12,614,900 | 9,891,664 | ||||||
Parkson Holdings Bhd | 7,377,910 | 11,050,926 | ||||||
Petronas Chemicals Group Bhd | 18,145,100 | 37,631,700 | ||||||
Petronas Dagangan Bhd | 1,137,800 | 8,157,056 | ||||||
Petronas Gas Bhd | 4,118,900 | 25,547,858 | ||||||
PPB Group Bhd | 5,077,600 | 22,588,779 | ||||||
Public Bank Bhd Foreign | 7,104,600 | 32,606,806 | ||||||
RHB Capital Bhd | 3,725,800 | 8,681,013 | ||||||
Sapurakencana Petroleum Bhda | 14,491,000 | 10,991,733 | ||||||
Sime Darby Bhd | 29,063,573 | 91,250,969 | ||||||
SP Setia Bhd | 2,241,500 | 2,553,925 |
14 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Telekom Malaysia Bhd | 12,937,900 | $ | 25,176,006 | |||||
Tenaga Nasional Bhd | 35,999,350 | 78,807,987 | ||||||
UEM Land Holdings Bhda | 10,221,600 | 6,052,156 | ||||||
UMW Holdings Bhd | 7,812,300 | 25,503,428 | ||||||
YTL Corp. Bhd | 42,742,262 | 24,760,280 | ||||||
YTL Power International Bhd | 34,546,560 | 19,238,603 | ||||||
|
| |||||||
1,298,703,611 | ||||||||
MEXICO — 4.90% |
| |||||||
Alfa SAB de CV Series A | 4,092,000 | 64,525,555 | ||||||
America Movil SAB de CV Series L | 405,660,600 | 518,398,504 | ||||||
Arca Continental SAB de CV | 5,228,136 | 32,671,906 | ||||||
Cemex SAB de CV CPOa,b | 102,221,102 | 75,185,255 | ||||||
Coca-Cola FEMSA SAB de CV Series L | 2,432,093 | 29,522,336 | ||||||
Compartamos SAB de CVb | 10,243,300 | 10,230,936 | ||||||
El Puerto de Liverpool SA de CV Series C1b | 2,000,400 | 16,175,534 | ||||||
Fomento Economico Mexicano SAB de CV BD Units | 22,205,700 | 186,259,187 | ||||||
Grupo Aeroportuario del Pacifico SAB de CV Series B | 130,500 | 512,411 | ||||||
Grupo Bimbo SAB de CV Series Ab | 6,380,400 | 13,813,932 | ||||||
Grupo Carso SAB de CV Series A1 | 1,707,441 | 5,591,431 | ||||||
Grupo Financiero Banorte SAB de CV Series O | 17,460,256 | 88,605,267 | ||||||
Grupo Financiero Inbursa SAB de CV Series O | 13,442,100 | 36,262,032 | ||||||
Grupo Mexico SAB de CV Series B | 39,855,688 | 117,618,778 | ||||||
Grupo Modelo SAB de CV Series Cb | 7,773,598 | 70,006,950 | ||||||
Grupo Televisa SAB CPO | 27,897,200 | 127,827,092 | ||||||
Industrias Penoles SAB de CV | 1,403,528 | 57,033,677 | ||||||
Kimberly-Clark de Mexico SAB de CV Series A | 24,153,000 | 48,557,442 | ||||||
Mexichem SAB de CV | 3,610,592 | 16,048,286 | ||||||
Minera Frisco SAB de CV Series A1a,b | 2,627,341 | 10,009,107 | ||||||
Wal-Mart de Mexico SAB de CV Series V | 57,878,900 | 153,648,046 | ||||||
|
| |||||||
1,678,503,664 |
Security | Shares | Value | ||||||
PERU — 0.67% |
| |||||||
Compania de Minas Buenaventura SA SP ADR | 2,279,961 | $ | 79,023,448 | |||||
Credicorp Ltd. | 689,792 | 83,140,630 | ||||||
Southern Copper Corp. | 2,078,456 | 67,632,958 | ||||||
|
| |||||||
229,797,036 | ||||||||
PHILIPPINES — 0.95% |
| |||||||
Aboitiz Equity Ventures Inc. | 19,474,900 | 22,448,786 | ||||||
Aboitiz Power Corp. | 4,535,164 | 3,664,779 | ||||||
Alliance Global Group Inc. | 5,341,580 | 1,495,515 | ||||||
Ayala Corp. | 3,091,056 | 30,194,273 | ||||||
Ayala Land Inc. | 49,249,300 | 26,219,473 | ||||||
Bank of the Philippine Islands | 14,424,614 | 25,712,324 | ||||||
BDO Unibank Inc. | 1,399,866 | 2,031,178 | ||||||
DMCI Holdings Inc. | 1,198,000 | 1,648,585 | ||||||
Energy Development Corp. | 1,165,600 | 165,663 | ||||||
Globe Telecom Inc. | 619,550 | 16,860,006 | ||||||
International Container Terminal Services Inc. | 7,484,800 | 12,185,592 | ||||||
Jollibee Foods Corp. | 12,742,399 | 30,284,965 | ||||||
Manila Electric Co. | 4,035,435 | 23,747,444 | ||||||
Metropolitan Bank & Trust Co. | 562,065 | 1,216,305 | ||||||
Philippine Long Distance Telephone Co. | 461,875 | 30,078,134 | ||||||
San Miguel Corp. | 4,630,749 | 12,326,652 | ||||||
SM Investments Corp. | 2,401,911 | 40,474,270 | ||||||
SM Prime Holdings Inc. | 102,664,625 | 34,160,541 | ||||||
Universal Robina Corp. | 7,956,100 | 11,515,781 | ||||||
|
| |||||||
326,430,266 | ||||||||
POLAND — 1.38% |
| |||||||
Asseco Poland SA | 590,888 | 7,899,163 | ||||||
Bank Handlowy w Warszawie SA | 324,539 | 7,648,178 | ||||||
Bank Millennium SAa | 4,208,141 | 4,451,248 | ||||||
Bank Pekao SA | 1,232,240 | 55,924,824 | ||||||
BRE Bank SAa,b | 144,387 | 13,275,615 | ||||||
Cyfrowy Polsat SAa | 2,346,108 | 9,728,610 | ||||||
ENEA SA | 1,146,395 | 5,693,454 | ||||||
Eurocash SAb | 503,701 | 6,071,796 | ||||||
Grupa Lotos SAa,b | 638,827 | 5,097,833 | ||||||
Jastrzebska Spolka Weglowa SAb | 440,052 | 11,643,482 | ||||||
Kernel Holding SAa | 439,039 | 8,996,972 | ||||||
KGHM Polska Miedz SAb | 1,411,629 | 55,260,406 |
CONSOLIDATED SCHEDULEOF INVESTMENTS | 15 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Polska Grupa Energetyczna SA | 5,044,588 | $ | 28,413,148 | |||||
Polski Koncern Naftowy Orlen SAa,b | 3,324,842 | 39,126,987 | ||||||
Polskie Gornictwo Naftowe i Gazownictwo SAa | 17,923,734 | 21,984,027 | ||||||
Powszechna Kasa Oszczednosci Bank Polski SA | 6,695,679 | 71,833,822 | ||||||
Powszechny Zaklad Ubezpieczen SA | 504,299 | 52,507,400 | ||||||
Synthos SA | 6,048,080 | 9,951,637 | ||||||
Tauron Polska Energia SA | 11,041,964 | 16,238,672 | ||||||
Telekomunikacja Polska SA | 7,488,654 | 37,462,452 | ||||||
TVN SA | 1,447,474 | 3,057,829 | ||||||
|
| |||||||
472,267,555 | ||||||||
RUSSIA — 5.80% |
| |||||||
Federal Grid Co. of Unified Energy System OJSCa | 2,354,408,500 | 14,558,929 | ||||||
Gazprom OAO | 107,274,237 | 522,370,236 | ||||||
IDGC Holding JSCa | 174,262,700 | 9,315,935 | ||||||
Inter RAO UES OJSCa | 8,273,541,700 | 6,631,631 | ||||||
LSR Group OJSC SP GDRc | 1,831,352 | 7,554,327 | ||||||
LUKOIL OAO | 4,852,619 | 275,840,586 | ||||||
Magnit OJSC SP GDRb,c | 2,298,131 | 73,287,398 | ||||||
Mechel OAO SP ADRb | 1,549,853 | 8,880,658 | ||||||
MMC Norilsk Nickel OJSC | 526,726 | 77,793,880 | ||||||
Mobile TeleSystems OJSC SP ADR | 5,126,895 | 94,386,137 | ||||||
NovaTek OAO SP GDRc | 925,171 | 110,372,900 | ||||||
Novolipetsk Steel OJSC SP GDRc | 1,092,210 | 19,747,157 | ||||||
Rosneft Oil Co. OJSC | 12,688,107 | 75,680,174 | ||||||
Rostelecom OJSC | 12,730,480 | 48,619,908 | ||||||
RusHydro OJSC | 1,171,472,100 | 29,609,581 | ||||||
RusHydro OJSC SP ADR | 1,306,542 | 3,229,772 | ||||||
Sberbank of Russia | 88,775,561 | 255,859,276 | ||||||
Severstal OAO | 2,441,093 | 27,897,127 | ||||||
Sistema JSFC SP GDRb,c | 1,018,757 | 20,079,700 | ||||||
Surgutneftegas OJSC | 76,574,310 | 66,049,525 | ||||||
Tatneft OAO | 15,673,170 | 94,925,140 | ||||||
TMK OAO SP GDRc | 654,127 | 8,994,246 | ||||||
Uralkali OJSC | 12,133,755 | 92,719,362 | ||||||
VTB Bank OJSC | 25,624,112,000 | 42,331,956 | ||||||
|
| |||||||
1,986,735,541 |
Security | Shares | Value | ||||||
SOUTH AFRICA — 7.98% |
| |||||||
Absa Group Ltd. | 2,063,281 | $ | 34,822,533 | |||||
African Bank Investments Ltd. | 12,068,833 | 46,536,996 | ||||||
African Rainbow Minerals Ltd. | 519,272 | 9,056,532 | ||||||
Anglo American Platinum Ltd.b | 574,289 | 28,545,131 | ||||||
AngloGold Ashanti Ltd. | 3,759,675 | 117,266,532 | ||||||
ArcelorMittal South Africa Ltd.a | 3,636,459 | 17,516,787 | ||||||
Aspen Pharmacare Holdings Ltd.a | 1,806,447 | 30,757,930 | ||||||
Assore Ltd. | 67,685 | 2,457,330 | ||||||
Aveng Ltd. | 2,538,200 | 9,266,229 | ||||||
Barloworld Ltd. | 2,106,737 | 17,746,732 | ||||||
Bidvest Group Ltd. | 3,264,289 | 79,007,529 | ||||||
Discovery Holdings Ltd. | 210,158 | 1,438,205 | ||||||
Exxaro Resources Ltd.b | 2,003,246 | 35,563,350 | ||||||
FirstRand Ltd. | 38,445,058 | 125,208,144 | ||||||
Foschini Group Ltd. (The) | 3,258,418 | 52,190,358 | ||||||
Gold Fields Ltd. | 7,258,119 | 87,000,980 | ||||||
Growthpoint Properties Ltd. | 4,519,121 | 14,707,183 | ||||||
Harmony Gold Mining Co. Ltd. | 3,927,441 | 31,797,897 | ||||||
Impala Platinum Holdings Ltd. | 5,030,935 | 79,387,122 | ||||||
Imperial Holdings Ltd. | 2,415,845 | 58,515,128 | ||||||
Investec Ltd. | 5,163,876 | 31,215,457 | ||||||
Kumba Iron Ore Ltd.b | 661,572 | 37,676,284 | ||||||
Liberty Holdings Ltd. | 1,208,486 | 13,163,801 | ||||||
Life Healthcare Group Holdings Ltd. | 7,409,976 | 28,045,113 | ||||||
Massmart Holdings Ltd. | 501,688 | 10,127,806 | ||||||
MMI Holdings Ltd. | 7,133,415 | 16,469,865 | ||||||
Mr. Price Group Ltd. | 1,642,580 | 26,523,716 | ||||||
MTN Group Ltd. | 16,609,024 | 309,380,882 | ||||||
Naspers Ltd. Class N | 4,030,014 | 233,811,099 | ||||||
Nedbank Group Ltd. | 3,214,248 | 70,550,618 | ||||||
Netcare Ltd. | 20,469,816 | 42,574,109 | ||||||
Northam Platinum Ltd. | 776,220 | 2,486,556 | ||||||
Pick’n Pay Stores Ltd. | 5,530,100 | 29,151,373 | ||||||
Pretoria Portland Cement Co. Ltd. | 5,934,083 | 18,727,722 | ||||||
Redefine Properties Ltd. | 1,800,428 | 2,050,674 | ||||||
Remgro Ltd. | 2,272,279 | 38,794,679 | ||||||
Reunert Ltd. | 2,276,113 | 19,216,729 | ||||||
RMB Holdings Ltd. | 2,076,542 | 8,958,067 | ||||||
RMI Holdings Ltd. | 1,768,474 | 3,986,594 | ||||||
Sanlam Ltd. | 23,161,883 | 101,622,641 | ||||||
Sappi Ltd.a | 2,570,512 | 7,166,997 | ||||||
Sasol Ltd. | 5,938,409 | 255,566,126 |
16 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Shoprite Holdings Ltd. | 5,258,001 | $ | 105,422,031 | |||||
SPAR Group Ltd. (The) | 1,798,910 | 26,444,201 | ||||||
Standard Bank Group Ltd. | 12,390,543 | 163,178,534 | ||||||
Steinhoff International Holdings Ltd.a | 4,598,300 | 14,332,009 | ||||||
Tiger Brands Ltd. | 2,168,894 | 71,254,286 | ||||||
Truworths International Ltd. | 6,054,444 | 68,420,928 | ||||||
Vodacom Group Ltd. | 2,160,558 | 27,423,206 | ||||||
Woolworths Holdings Ltd. | 9,999,907 | 71,186,382 | ||||||
|
| |||||||
2,733,717,113 | ||||||||
SOUTH KOREA — 14.91% |
| |||||||
AmorePacific Corp.b | 38,386 | 39,548,956 | ||||||
AmorePacific Group | 19,470 | 7,447,377 | ||||||
BS Financial Group Inc. | 1,319,200 | 13,719,564 | ||||||
Celltrion Inc.b | 1,217,511 | 32,352,501 | ||||||
Cheil Industries Inc. | 498,437 | 45,467,207 | ||||||
CJ CheilJedang Corp.b | 90,073 | 24,292,024 | ||||||
CJ Corp. | 146,763 | 10,554,907 | ||||||
Daelim Industrial Co. Ltd.b | 239,452 | 18,740,410 | ||||||
Daewoo Engineering & Construction Co. Ltd.a,b | 405,350 | 3,572,546 | ||||||
Daewoo International Corp.b | 237,916 | 7,202,745 | ||||||
Daewoo Securities Co. Ltd. | 1,469,420 | 14,569,549 | ||||||
Daewoo Shipbuilding & Marine Engineering Co. Ltd.b | 983,480 | 21,106,302 | ||||||
DGB Financial Group Inc. | 829,630 | 9,578,630 | ||||||
Dongbu Insurance Co. Ltd. | 255,330 | 10,430,358 | ||||||
Dongkuk Steel Mill Co. Ltd.b | 351,110 | 4,873,842 | ||||||
Doosan Corp.b | 135,805 | 16,218,202 | ||||||
Doosan Heavy Industries & Construction Co. Ltd.b | 383,829 | 20,026,596 | ||||||
Doosan Infracore Co. Ltd.a,b | 874,190 | 13,637,248 | ||||||
E-Mart Co. Ltd. | 230,551 | 50,189,355 | ||||||
GS Engineering & Construction Corp.b | 323,836 | 20,035,948 | ||||||
GS Holdings Corp. | 454,620 | 26,044,112 | ||||||
Hana Financial Group Inc. | 2,299,440 | 68,702,008 | ||||||
Hankook Tire Co. Ltd.b | 906,650 | 33,241,503 | ||||||
Hanwha Chemical Corp.b | 774,440 | 14,265,326 | ||||||
Hanwha Corp. | 355,320 | 10,318,646 | ||||||
Honam Petrochemical Corp.b | 134,805 | 27,801,582 | ||||||
Hyosung Corp.b | 234,473 | 12,543,802 | ||||||
Hyundai Department Store Co. Ltd.b | 106,354 | 13,357,228 |
Security | Shares | Value | ||||||
Hyundai Development Co.b | 421,290 | $ | 7,741,674 | |||||
Hyundai Engineering & Construction Co. Ltd. | 729,944 | 40,787,440 | ||||||
Hyundai Glovis Co. Ltd.b | 107,026 | 21,506,602 | ||||||
Hyundai Heavy Industries Co. Ltd. | 415,816 | 84,839,840 | ||||||
Hyundai Hysco Co. Ltd.b | 325,650 | 13,661,730 | ||||||
Hyundai Marine & Fire Insurance Co. Ltd. | 633,210 | 18,249,172 | ||||||
Hyundai Merchant Marine Co. Ltd.a,b | 386,222 | 9,326,855 | ||||||
Hyundai Mipo Dockyard Co. Ltd.b | 123,281 | 13,310,056 | ||||||
Hyundai Mobis Co. Ltd.b | 695,874 | 188,592,050 | ||||||
Hyundai Motor Co. | 1,622,752 | 343,965,501 | ||||||
Hyundai Securities Co. Ltd. | 431,310 | 3,223,540 | ||||||
Hyundai Steel Co.b | 569,971 | 41,995,880 | ||||||
Hyundai Wia Corp.b | 127,735 | 20,264,228 | ||||||
Industrial Bank of Korea | 1,289,490 | 13,694,705 | ||||||
Kangwon Land Inc.b | 609,500 | 12,462,620 | ||||||
KB Financial Group Inc. | 3,915,085 | 126,807,865 | ||||||
KCC Corp. | 23,535 | 5,870,138 | ||||||
Kia Motors Corp. | 2,455,286 | 160,349,624 | ||||||
Korea Aerospace Industries Ltd.b | 444,140 | 10,079,634 | ||||||
Korea Electric Power Corp.a | 1,551,386 | 33,635,867 | ||||||
Korea Electric Power Corp. SP ADRa | 2,555,778 | 27,372,382 | ||||||
Korea Exchange Banka | 2,019,120 | 15,215,138 | ||||||
Korea Gas Corp. | 276,470 | 13,888,985 | ||||||
Korea Investment Holdings Co. Ltd. | 242,200 | 8,143,598 | ||||||
Korea Life Insurance Co. Ltd. | 2,063,250 | 12,910,940 | ||||||
Korea Zinc Co. Ltd. | 78,143 | 28,168,326 | ||||||
Korean Air Lines Co. Ltd.a | 345,309 | 14,456,034 | ||||||
KP Chemical Corp. | 499,350 | 5,281,216 | ||||||
KT Corp. SP ADR | 1,528,192 | 23,090,981 | ||||||
KT&G Corp.b | 1,205,298 | 91,250,500 | ||||||
Kumho Petro Chemical Co. Ltd.b | 108,004 | 10,708,780 | ||||||
LG Chem Ltd.b | 479,702 | 127,258,171 | ||||||
LG Corp. | 1,002,510 | 55,310,897 | ||||||
LG Display Co. Ltd.a,b | 2,213,212 | 50,618,355 | ||||||
LG Display Co. Ltd. SP ADRa,b | 633,602 | 7,451,160 | ||||||
LG Electronics Inc.b | 1,063,434 | 65,982,817 | ||||||
LG Household & Health Care Ltd.b | 106,124 | 58,177,044 | ||||||
LG Innotek Co. Ltd.a,b | 124,113 | 9,822,935 | ||||||
LG Uplus Corp. | 2,273,960 | 15,231,549 | ||||||
Lotte Confectionery Co. Ltd.b | 3,897 | 5,577,815 | ||||||
Lotte Shopping Co. Ltd. | 89,525 | 25,209,419 |
CONSOLIDATED SCHEDULEOF INVESTMENTS | 17 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
LS Corp. | 116,592 | $ | 9,022,168 | |||||
LS Industrial Systems Co. Ltd.b | 166,138 | 9,444,443 | ||||||
Mando Corp. | 108,416 | 15,383,916 | ||||||
Mirae Asset Securities Co. Ltd. | 137,429 | 3,742,696 | ||||||
NCsoft Corp.b | 166,742 | 37,106,846 | ||||||
NHN Corp.b | 432,176 | 98,842,941 | ||||||
OCI Co. Ltd.b | 150,614 | 25,221,249 | ||||||
ORION Corp.b | 36,191 | 29,345,132 | ||||||
POSCO | 672,271 | 218,634,350 | ||||||
S-Oil Corp.b | 441,032 | 40,036,396 | ||||||
S1 Corp. | 243,435 | 12,658,513 | ||||||
Samsung C&T Corp.b | 1,332,583 | 75,753,314 | ||||||
Samsung Card Co. Ltd. | 279,268 | 8,848,461 | ||||||
Samsung Electro-Mechanics Co. Ltd.b | 636,677 | 54,598,367 | ||||||
Samsung Electronics Co. Ltd. | 1,127,604 | 1,225,370,261 | ||||||
Samsung Engineering Co. Ltd.b | 296,529 | 50,308,985 | ||||||
Samsung Fire & Marine Insurance Co. Ltd. | 388,797 | 80,183,759 | ||||||
Samsung Heavy Industries Co. Ltd.b | 1,701,150 | 55,699,216 | ||||||
Samsung Life Insurance Co. Ltd. | 504,390 | 42,898,433 | ||||||
Samsung SDI Co. Ltd.b | 362,500 | 45,686,901 | ||||||
Samsung Securities Co. Ltd. | 496,926 | 21,263,199 | ||||||
Samsung Techwin Co. Ltd.b | 422,685 | 26,524,334 | ||||||
Shinhan Financial Group Co. Ltd. | 4,543,458 | 141,354,251 | ||||||
Shinsegae Co. Ltd.b | 78,421 | 15,620,267 | ||||||
SK C&C Co. Ltd.b | 171,352 | 16,536,780 | ||||||
SK Holdings Co. Ltd. | 220,344 | 32,431,374 | ||||||
SK Hynix Inc.a,b | 5,107,180 | 95,425,551 | ||||||
SK Innovation Co. Ltd. | 609,493 | 87,828,230 | ||||||
SK Networks Co. Ltd.b | 476,650 | 3,965,694 | ||||||
SK Telecom Co. Ltd. SP ADR | 1,521,475 | 21,817,952 | ||||||
Woongjin Coway Co. Ltd. | 647,810 | 22,409,644 | ||||||
Woori Finance Holdings Co. Ltd. | 3,284,850 | 31,267,053 | ||||||
Woori Investment & Securities Co. Ltd. | 838,481 | 8,202,833 | ||||||
Yuhan Corp.b | 107,684 | 12,717,555 | ||||||
|
| |||||||
5,107,481,601 | ||||||||
TAIWAN — 10.93% |
| |||||||
Acer Inc.a,b | 27,934,053 | 24,668,816 | ||||||
Advanced Semiconductor Engineering Inc. | 50,332,701 | 37,643,234 |
Security | Shares | Value | ||||||
Advantech Co. Ltd. | 1,982,800 | $ | 6,884,952 | |||||
Airtac International Group | 124,000 | 604,454 | ||||||
Asia Cement Corp.b | 22,340,463 | 25,658,974 | ||||||
ASUSTeK Computer Inc.b | 6,141,968 | 61,315,096 | ||||||
AU Optronics Corp.a,b | 79,377,000 | 24,090,579 | ||||||
AU Optronics Corp. SP ADRa | 663,722 | 2,011,078 | ||||||
Capital Securities Corp. | 22,226,879 | 7,532,397 | ||||||
Catcher Technology Co. Ltd.b | 5,002,210 | 24,968,462 | ||||||
Cathay Financial Holding Co. Ltd.b | 68,676,023 | 65,578,253 | ||||||
Chang Hwa Commercial Bank Ltd. | 29,475,095 | 15,204,508 | ||||||
Cheng Shin Rubber Industry Co. Ltd. | 23,593,112 | 57,346,284 | ||||||
Cheng Uei Precision Industry Co. Ltd. | 3,186,503 | 6,330,237 | ||||||
Chicony Electronics Co. Ltd. | 7,046,253 | 14,868,391 | ||||||
Chimei Innolux Corp.a,b | 42,681,487 | 13,651,920 | ||||||
China Airlines Ltd. | 20,885,347 | 8,019,148 | ||||||
China Development Financial Holding Corp. | 145,335,848 | 34,452,423 | ||||||
China Life Insurance Co. Ltd.b | 14,679,280 | 13,281,977 | ||||||
China Motor Co. Ltd.b | 4,578,000 | 4,188,081 | ||||||
China Petrochemical Development Corp. | 17,935,000 | 14,341,533 | ||||||
China Steel Corp.b | 127,149,146 | 108,890,374 | ||||||
Chinatrust Financial Holding Co. Ltd. | 91,553,204 | 54,716,115 | ||||||
Chunghwa Telecom Co. Ltd. | 44,646,410 | 134,903,679 | ||||||
Clevo Co.b | 7,764,000 | 10,213,402 | ||||||
Compal Electronics Inc. | 42,782,908 | 37,496,288 | ||||||
CTCI Corp. | 1,013,000 | 1,917,702 | ||||||
Delta Electronics Inc.b | 19,800,000 | 67,430,136 | ||||||
E Ink Holdings Inc.b | 8,741,000 | 8,740,708 | ||||||
E.Sun Financial Holding Co. Ltd. | 22,296,615 | 12,432,088 | ||||||
Epistar Corp.b | 5,522,345 | 11,210,263 | ||||||
Eternal Chemical Co. Ltd. | 5,739,740 | 4,743,032 | ||||||
EVA Airways Corp. | 12,448,800 | 6,982,733 | ||||||
Evergreen Marine Corp. Ltd. | 17,663,325 | 9,435,852 | ||||||
Everlight Electronics Co. Ltd.b | 2,089,000 | 3,225,810 | ||||||
Far Eastern Department Stores Co. Ltd. | 12,646,812 | 12,435,265 | ||||||
Far Eastern New Century Corp. | 28,482,428 | 29,955,477 | ||||||
Far EasTone Telecommunications Co. Ltd. | 13,238,000 | 32,618,757 |
18 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Farglory Land Development Co. Ltd. | 12,618,000 | $ | 22,707,429 | |||||
Feng Hsin Iron & Steel Co. Ltd. | 5,832,000 | 9,015,445 | ||||||
First Financial Holding Co. Ltd. | 47,632,485 | 27,592,522 | ||||||
Formosa Chemicals & Fibre Corp. | 29,147,000 | 75,224,971 | ||||||
Formosa International Hotels Corp. | 224,730 | 2,461,068 | ||||||
Formosa Petrochemical Corp.b | 8,257,000 | 23,543,381 | ||||||
Formosa Plastics Corp. | 43,092,000 | 116,107,122 | ||||||
Formosa Taffeta Co. Ltd. | 9,821,000 | 8,951,731 | ||||||
Foxconn Technology Co. Ltd. | 5,691,542 | 21,663,243 | ||||||
Fubon Financial Holding Co. Ltd.b | 66,438,970 | 65,993,101 | ||||||
Giant Manufacturing Co. Ltd. | 4,823,203 | 24,316,505 | ||||||
Highwealth Construction Corp. | 4,066,000 | 6,787,753 | ||||||
Hiwin Technologies Corp.b | 1,668,408 | 12,032,190 | ||||||
Hon Hai Precision Industry Co. Ltd. | 101,944,231 | 288,633,795 | ||||||
Hotai Motor Co. Ltd.b | 2,476,000 | 17,856,365 | ||||||
HTC Corp.b | 7,455,708 | 64,223,988 | ||||||
Hua Nan Financial Holdings Co. Ltd. | 21,461,202 | 11,536,354 | ||||||
Inotera Memories Inc.a,b | 4,342,000 | 743,697 | ||||||
Inventec Corp. | 16,903,281 | 5,530,772 | ||||||
Kinsus Interconnect Technology Corp. | 1,407,000 | 4,025,906 | ||||||
Largan Precision Co. Ltd.b | 1,149,000 | 23,899,937 | ||||||
LCY Chemical Corp.b | 4,550,397 | 6,183,472 | ||||||
Lite-On Technology Corp. | 15,634,506 | 18,922,602 | ||||||
Macronix International Co. Ltd.b | 44,955,261 | 12,127,759 | ||||||
MediaTek Inc.b | 10,627,176 | 113,541,996 | ||||||
Mega Financial Holding Co. Ltd. | 66,007,229 | 49,696,605 | ||||||
Motech Industries Inc.a,b | 4,569,942 | 4,470,612 | ||||||
MStar Semiconductor Inc.b | 3,763,331 | 29,967,428 | ||||||
Nan Kang Rubber Tire Co. Ltd.b | 4,800,266 | 6,955,746 | ||||||
Nan Ya Plastics Corp.b | 51,503,000 | 96,812,090 | ||||||
Nan Ya Printed Circuit Board Corp.b | 999,270 | 1,601,448 | ||||||
Novatek Microelectronics Corp. Ltd. | 2,331,000 | 7,510,317 | ||||||
Pegatron Corp.b | 11,686,414 | 14,651,425 | ||||||
Phison Electronics Corp.b | 1,407,535 | 10,620,778 | ||||||
Pou Chen Corp. | 30,470,220 | 29,401,000 | ||||||
Powertech Technology Inc.b | 4,228,300 | 7,976,326 |
Security | Shares | Value | ||||||
President Chain Store Corp. | 6,875,000 | $ | 36,611,883 | |||||
Quanta Computer Inc.b | 21,855,000 | 56,405,178 | ||||||
Radiant Opto-Electronics Corp.b | 4,337,690 | 18,610,169 | ||||||
Realtek Semiconductor Corp.b | 1,581,512 | 2,978,107 | ||||||
Richtek Technology Corp.b | 654,150 | 3,723,835 | ||||||
Ruentex Development Co. Ltd.b | 10,567,608 | 17,712,060 | ||||||
Ruentex Industries Ltd. | 7,777,009 | 15,112,080 | ||||||
Shin Kong Financial Holding Co. Ltd.a,b | 20,451,002 | 5,537,632 | ||||||
Siliconware Precision Industries Co. Ltd. | 29,977,190 | 33,829,556 | ||||||
Siliconware Precision Industries Co. Ltd. SP ADRb | 2,775,714 | 15,460,727 | ||||||
Simplo Technology Co. Ltd.b | 3,595,202 | 21,246,394 | ||||||
Sino-American Silicon Products Inc.b | 3,284,479 | 3,898,475 | ||||||
SinoPac Financial Holdings Co. Ltd. | 34,906,888 | 13,869,052 | ||||||
Standard Foods Corp. | 2,615,360 | 6,942,043 | ||||||
Synnex Technology International Corp. | 14,266,985 | 31,819,792 | ||||||
Taishin Financial Holdings Co. Ltd. | 27,833,958 | 10,640,674 | ||||||
Taiwan Business Bank Ltd.a | 19,173,242 | 5,505,321 | ||||||
Taiwan Cement Corp. | 38,456,296 | 41,793,344 | ||||||
Taiwan Cooperative Financial Holding Co. Ltd. | 23,074,089 | 12,672,991 | ||||||
Taiwan Fertilizer Co. Ltd. | 6,513,000 | 16,069,938 | ||||||
Taiwan Glass Industry Corp.b | 4,600,176 | 4,569,304 | ||||||
Taiwan Mobile Co. Ltd. | 20,909,600 | 77,492,090 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 229,147,000 | 637,305,769 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. SP ADR | 3,029,799 | 44,538,045 | ||||||
Teco Electric and Machinery Co. Ltd.b | 30,964,000 | 20,469,674 | ||||||
TPK Holding Co. Ltd.b | 1,670,827 | 21,588,930 | ||||||
Transcend Information Inc. | 151,000 | 396,267 | ||||||
Tripod Technology Corp.b | 2,790,920 | 6,150,069 | ||||||
TSRC Corp.b | 9,626,850 | 20,249,459 | ||||||
Tung Ho Steel Enterprise Corp. | 10,796,000 | 9,948,569 | ||||||
U-Ming Marine Transport Corp. | 4,034,000 | 6,060,899 | ||||||
Uni-President Enterprises Co. | 48,497,711 | 77,642,324 | ||||||
Unimicron Technology Corp.b | 9,499,000 | 10,799,003 |
CONSOLIDATED SCHEDULEOF INVESTMENTS | 19 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
United Microelectronics Corp.b | 98,985,000 | $ | 39,658,776 | |||||
United Microelectronics Corp. SP ADRb | 11,713,448 | 23,778,299 | ||||||
Walsin Lihwa Corp.a | 19,437,000 | 6,113,203 | ||||||
Wan Hai Lines Ltd.a | 2,521,300 | 1,279,549 | ||||||
Wintek Corp.a,b | 16,225,438 | 8,234,338 | ||||||
Wistron Corp.b | 18,251,298 | 20,413,959 | ||||||
WPG Holdings Co. Ltd.b | 10,684,532 | 12,592,701 | ||||||
Yang Ming Marine Transport Corp. | 28,547,075 | 11,389,855 | ||||||
Yuanta Financial Holding Co. Ltd. | 72,322,140 | 33,564,080 | ||||||
Yulon Motor Co. Ltd.b | 12,099,000 | 21,975,413 | ||||||
Zhen Ding Technology Holding Ltd.b | 1,054,500 | 3,344,713 | ||||||
|
| |||||||
3,743,269,896 | ||||||||
THAILAND — 2.18% |
| |||||||
Advanced Information Service PCL Foreign | 991,900 | 6,869,070 | ||||||
Advanced Information Service PCL NVDR | 7,928,700 | 54,907,544 | ||||||
Bangkok Bank PCL Foreign | 8,504,500 | 52,381,315 | ||||||
Bangkok Bank PCL NVDR | 6,780,900 | 40,683,236 | ||||||
Bank of Ayudhya PCL NVDR | 18,568,200 | 18,814,117 | ||||||
Banpu PCL Foreign | 1,916,200 | 27,518,430 | ||||||
BEC World PCL Foreign | 356,400 | 591,441 | ||||||
BEC World PCL NVDR | 7,935,600 | 13,169,019 | ||||||
Charoen Pokphand Foods PCL | 4,488,500 | 4,547,946 | ||||||
Charoen Pokphand Foods PCL NVDR | 32,639,600 | 33,071,878 | ||||||
CP All PCL Foreign | 5,429,900 | 5,978,348 | ||||||
CP All PCL NVDR | 41,385,100 | 45,565,213 | ||||||
Glow Energy PCL Foreign | 289,200 | 576,831 | ||||||
Glow Energy PCL NVDR | 4,926,400 | 9,826,073 | ||||||
Indorama Ventures PCL NVDR | 18,563,480 | 17,032,074 | ||||||
IRPC PCL Foreign | 93,157,200 | 11,178,269 | ||||||
Kasikornbank PCL Foreign | 12,580,100 | 67,848,632 | ||||||
Kasikornbank PCL NVDR | 6,198,200 | 33,428,939 | ||||||
Krung Thai Bank PCL Foreign | 34,654,400 | 18,358,482 | ||||||
PTT Exploration & Production PCL Foreign | 7,450,500 | 35,427,621 | ||||||
PTT Global Chemical PCL Foreign | 13,831,630 | 27,588,220 | ||||||
PTT PCL Foreign | 8,025,000 | 84,514,122 | ||||||
Siam Cement PCL Foreign | 3,020,600 | 35,377,699 | ||||||
Siam Cement PCL NVDR | 984,700 | 10,433,075 |
Security | Shares | Value | ||||||
Siam Commercial Bank PCL NVDR | 15,580,700 | $ | 74,584,490 | |||||
Thai Oil PCL NVDR | 8,443,200 | 17,648,942 | ||||||
|
| |||||||
747,921,026 | ||||||||
TURKEY — 1.76% |
| |||||||
Akbank TAS | 17,083,962 | 67,469,457 | ||||||
Anadolu Efes Biracilik ve Malt Sanayii AS | 1,515,770 | 21,176,842 | ||||||
Arcelik AS | 892,688 | 4,939,601 | ||||||
Asya Katilim Bankasi ASa | 15,379,185 | 16,241,597 | ||||||
BIM Birlesik Magazalar AS | 945,468 | 38,873,371 | ||||||
Coca-Cola Icecek AS | 266,402 | 4,747,628 | ||||||
Emlak Konut Gayrimenkul Yatirim Ortakligi AS | 6,349,566 | 9,290,089 | ||||||
Enka Insaat ve Sanayi AS | 1,316,223 | 3,648,833 | ||||||
Eregli Demir ve Celik Fabrikalari TAS | 14,531,463 | 16,225,554 | ||||||
Ford Otomotiv Sanayi AS | 711,666 | 6,987,287 | ||||||
Haci Omer Sabanci Holding AS | 5,638,120 | 24,251,312 | ||||||
KOC Holding AS | 5,672,125 | 23,087,223 | ||||||
Koza Altin Isletmeleri AS | 463,892 | 9,134,696 | ||||||
Migros Ticaret ASa | 1 | 6 | ||||||
TAV Havalimanlari Holding AS | 1,660,430 | 8,639,844 | ||||||
Turk Hava Yollari AOa | 4,559,760 | 9,028,979 | ||||||
Turk Telekomunikasyon AS | 3,774,546 | 14,948,286 | ||||||
Turkcell Iletisim Hizmetleri ASa | 6,497,623 | 38,598,679 | ||||||
Turkiye Garanti Bankasi AS | 23,700,323 | 101,681,758 | ||||||
Turkiye Halk Bankasi AS | 2,966,730 | 26,761,845 | ||||||
Turkiye Is Bankasi AS Class C | 15,152,638 | 46,173,436 | ||||||
Turkiye Petrol Rafinerileri AS | 1,329,245 | 30,415,331 | ||||||
Turkiye Sise ve Cam Fabrikalari AS | 4,390,922 | 6,448,536 | ||||||
Turkiye Vakiflar Bankasi TAO Class D | 16,459,344 | 37,299,578 | ||||||
Yapi ve Kredi Bankasi ASa,b | 15,179,370 | 35,400,858 | ||||||
|
| |||||||
601,470,626 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $33,090,735,231) |
| 31,409,214,417 | ||||||
PREFERRED STOCKS — 7.81% |
| |||||||
BRAZIL — 7.02% |
| |||||||
AES Tiete SA | 1,078,400 | 14,748,577 | ||||||
Banco Bradesco SA | 19,172,180 | 311,811,902 | ||||||
Banco do Estado do Rio Grande do Sul SA Class B | 1,882,500 | 15,354,661 |
20 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Bradespar SA | 2,304,200 | $ | 30,093,541 | |||||
Braskem SA Class A | 1,586,700 | 10,009,492 | ||||||
Centrais Eletricas Brasileiras SA Class B | 2,309,137 | 21,110,614 | ||||||
Companhia Brasileira de Distribuicao Grupo Pao de Acucar Class A | 1,075,186 | 45,253,140 | ||||||
Companhia de Bebidas das Americas | 7,582,123 | 287,171,904 | ||||||
Companhia de Transmissao de Energia Eletrica Paulista | 368,722 | 8,195,639 | ||||||
Companhia Energetica de Minas Gerais | 4,867,486 | 83,121,850 | ||||||
Companhia Energetica de Sao Paulo Class B | 1,708,200 | 26,476,869 | ||||||
Companhia Paranaense de Energia Class B | 1,063,275 | 19,069,307 | ||||||
Eletropaulo Metropolitana Eletricidade de Sao Paulo SA | 989,200 | 9,067,850 | ||||||
Gerdau SA | 9,375,785 | 82,942,924 | ||||||
Itau Unibanco Holding SA | 22,506,911 | 351,627,155 | ||||||
Itausa—Investimentos Itau SA | 26,379,150 | 121,556,912 | ||||||
Klabin SA | 4,452,300 | 19,967,931 | ||||||
Lojas Americanas SA | 3,624,016 | 26,094,416 | ||||||
Marcopolo SA | 1,947,000 | 10,919,820 | ||||||
Metalurgica Gerdau SA | 2,794,200 | 30,599,110 | ||||||
Oi SA | 8,329,368 | 31,649,997 | ||||||
Petroleo Brasileiro SA | 42,254,527 | 432,114,258 | ||||||
Telefonica Brasil SA | 3,202,967 | 69,456,420 | ||||||
Usinas Siderurgicas de Minas Gerais SA Class A | 5,000,100 | 20,083,692 | ||||||
Vale SA Class A | 19,983,651 | 326,782,258 | ||||||
|
| |||||||
2,405,280,239 | ||||||||
COLOMBIA — 0.10% |
| |||||||
Banco Davivienda SA | 773,243 | 9,114,432 | ||||||
Grupo Argos SA | 780,495 | 7,531,092 | ||||||
Grupo Aval Acciones y Valores SA | 18,050,745 | 11,380,678 | ||||||
Grupo de Inversiones Suramericana SA | 348,288 | 6,190,514 | ||||||
|
| |||||||
34,216,716 |
Security | Shares | Value | ||||||
RUSSIA — 0.30% |
| |||||||
AK Transneft OAO | 16,741 | $ | 27,276,585 | |||||
Sberbank of Russia | 11,876,838 | 25,158,191 | ||||||
Surgutneftegas OJSC | 75,862,400 | 48,863,612 | ||||||
|
| |||||||
101,298,388 | ||||||||
SOUTH KOREA — 0.39% |
| |||||||
Hyundai Motor Co. Ltd. | 50,256 | 3,065,079 | ||||||
Hyundai Motor Co. Ltd. Series 2 | 284,848 | 19,130,036 | ||||||
LG Chem Ltd. | 81,636 | 6,540,234 | ||||||
Samsung Electronics Co. Ltd.b | 161,630 | 103,847,765 | ||||||
|
| |||||||
132,583,114 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $3,040,838,348) |
| 2,673,378,457 | ||||||
RIGHTS — 0.00% |
| |||||||
THAILAND — 0.00% |
| |||||||
Krung Thai Bank PCL Foreigna | 10,065,200 | 1,284,851 | ||||||
|
| |||||||
1,284,851 | ||||||||
|
| |||||||
TOTAL RIGHTS |
| |||||||
(Cost: $0) |
| 1,284,851 | ||||||
SHORT-TERM INVESTMENTS — 5.21% |
| |||||||
MONEY MARKET FUNDS — 5.21% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.23%e,f,g | 1,617,064,169 | 1,617,064,169 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
0.23%e,f,g | 122,543,360 | 122,543,360 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.06%e,f | 44,923,920 | 44,923,920 | ||||||
|
| |||||||
1,784,531,449 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $1,784,531,449) |
| 1,784,531,449 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $37,916,105,028) | 35,868,409,174 | |||||||
Other Assets, Less Liabilities — (4.71)% |
| (1,611,780,894 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 34,256,628,280 | |||||
|
|
CONSOLIDATED SCHEDULEOF INVESTMENTS | 21 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2012
BDR — Brazilian Depositary Receipts
CPO — Certificates of Participation (Ordinary)
NVDR — Non-Voting 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 | This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933. |
d | This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933. |
e | Affiliated issuer. See Note 2. |
f | The rate quoted is the annualized seven-day yield of the fund at period end. |
g | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
Financial futures contracts purchased as of August 31, 2012 were as follows:
Number of Contracts | Issue (Expiration) | Exchange | Notional Value | Net Unrealized Appreciation (Depreciation) | ||||||||||
3,396 | MSCI Emerging Markets E-Mini (Sept. 2012) | NYSE LIFFE | $160,851,540 | $7,733,312 | ||||||||||
See notes to consolidated financial statements.
22 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Statement of Assets and Liabilities
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2012
ASSETS | ||||
Investments, at cost: | ||||
Unaffiliated | $ | 36,131,573,579 | ||
Affiliated (Note 2) | 1,784,531,449 | |||
|
| |||
Total cost of investments | $ | 37,916,105,028 | ||
|
| |||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||
Unaffiliated | $ | 34,083,877,725 | ||
Affiliated (Note 2) | 1,784,531,449 | |||
|
| |||
Total fair value of investments | 35,868,409,174 | |||
Foreign currencies, at valueb | 58,015,684 | |||
Cash | 32,480,966 | |||
Cash held at broker, at value | 18,604,000 | |||
Receivables: | ||||
Investment securities sold | 135,362,655 | |||
Dividends and interest | 78,027,535 | |||
Futures variation margin | 1,511,220 | |||
|
| |||
Total Assets | 36,192,411,234 | |||
|
| |||
LIABILITIES | ||||
Payables: | ||||
Investment securities purchased | 117,870,739 | |||
Collateral for securities on loan (Note 5) | 1,739,607,529 | |||
Capital shares redeemed | 53,773,661 | |||
Foreign taxes (Note 1) | 4,350,696 | |||
Investment advisory fees (Note 2) | 20,180,329 | |||
|
| |||
Total Liabilities | 1,935,782,954 | |||
|
| |||
NET ASSETS | $ | 34,256,628,280 | ||
|
| |||
Net assets consist of: | ||||
Paid-in capital | $ | 40,751,814,714 | ||
Undistributed net investment income | 90,247,601 | |||
Accumulated net realized loss | (4,544,676,689 | ) | ||
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies | (2,040,757,346 | ) | ||
|
| |||
NET ASSETS | $ | 34,256,628,280 | ||
|
| |||
Shares outstandingc | 873,450,000 | |||
|
| |||
Net asset value per share | $ | 39.22 | ||
|
|
a | Securities on loan with a value of $1,637,267,392. See Note 5. |
b | Cost of foreign currencies: $57,911,959. |
c | $0.001 par value, number of shares authorized: 2 billion. |
See notes to consolidated financial statements.
CONSOLIDATED FINANCIAL STATEMENTS | 23 |
Table of Contents
Consolidated Statement of Operations
iSHARES® MSCI EMERGING MARKETS INDEX FUND
Year ended August 31, 2012
NET INVESTMENT INCOME | ||||
Dividends — unaffiliateda | $ | 946,944,370 | ||
Interest — unaffiliated | 1,215 | |||
Interest — affiliated (Note 2) | 27,388 | |||
Securities lending income — affiliated (Note 2)b | 33,159,893 | |||
|
| |||
980,132,866 | ||||
Less: Other foreign taxes (Note 1) | (4,190,077 | ) | ||
|
| |||
Total investment income | 975,942,789 | |||
|
| |||
EXPENSES | ||||
Investment advisory fees (Note 2) | 238,711,967 | |||
Mauritius income taxes (Note 1) | 286,269 | |||
Commitment fees (Note 7) | 55,104 | |||
Interest expense (Note 7) | 29,571 | |||
|
| |||
Total expenses | 239,082,911 | |||
Less investment advisory fees waived (Note 2) | (2,970,385 | ) | ||
|
| |||
Net expenses | 236,112,526 | |||
|
| |||
Net investment income | 739,830,263 | |||
|
| |||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||
Net realized gain (loss) from: | ||||
Investments — unaffiliated | (1,383,793,216 | ) | ||
Investments — affiliated (Note 2) | (119,037 | ) | ||
In-kind redemptions — unaffiliated | 346,741,091 | |||
In-kind redemptions — affiliated (Note 2) | (12,443 | ) | ||
Futures contracts | 2,511,231 | |||
Foreign currency transactions | (33,736,832 | ) | ||
|
| |||
Net realized loss | (1,068,409,206 | ) | ||
|
| |||
Net change in unrealized appreciation/depreciation on: | ||||
Investments | (1,949,295,568 | ) | ||
Futures contracts | 7,733,312 | |||
Translation of assets and liabilities in foreign currencies | (661,884 | ) | ||
|
| |||
Net change in unrealized appreciation/depreciation | (1,942,224,140 | ) | ||
|
| |||
Net realized and unrealized loss | (3,010,633,346 | ) | ||
|
| |||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (2,270,803,083 | ) | |
|
|
a | Net of foreign withholding tax of $106,651,366. |
b | Net of foreign tax paid of $1,156,628. |
See notes to consolidated financial statements.
24 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Statements of Changes in Net Assets
iSHARES® MSCI EMERGING MARKETS INDEX FUND
Year ended August 31, 2012 | Year ended August 31, 2011 | |||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||
OPERATIONS: | ||||||||
Net investment income | $ | 739,830,263 | $ | 729,292,060 | ||||
Net realized gain (loss) | (1,068,409,206 | ) | 2,985,401,279 | |||||
Net change in unrealized appreciation/depreciation | (1,942,224,140 | ) | 63,663,978 | |||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | (2,270,803,083 | ) | 3,778,357,317 | |||||
|
|
|
| |||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||
From net investment income | (703,374,541 | ) | (763,134,134 | ) | ||||
|
|
|
| |||||
Total distributions to shareholders | (703,374,541 | ) | (763,134,134 | ) | ||||
|
|
|
| |||||
CAPITAL SHARE TRANSACTIONS: | ||||||||
Proceeds from shares sold | 7,880,602,043 | 5,567,132,618 | ||||||
Cost of shares redeemed | (4,146,345,050 | ) | (14,852,761,754 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in net assets from capital share transactions | 3,734,256,993 | (9,285,629,136 | ) | |||||
|
|
|
| |||||
INCREASE (DECREASE) IN NET ASSETS | 760,079,369 | (6,270,405,953 | ) | |||||
NET ASSETS | ||||||||
Beginning of year | 33,496,548,911 | 39,766,954,864 | ||||||
|
|
|
| |||||
End of year | $ | 34,256,628,280 | $ | 33,496,548,911 | ||||
|
|
|
| |||||
Undistributed net investment income included in net assets at end of year | $ | 90,247,601 | $ | 84,964,451 | ||||
|
|
|
| |||||
SHARES ISSUED AND REDEEMED | ||||||||
Shares sold | 193,950,000 | 118,800,000 | ||||||
Shares redeemed | (104,850,000 | ) | (324,000,000 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 89,100,000 | (205,200,000 | ) | |||||
|
|
|
|
See notes to consolidated financial statements.
CONSOLIDATED FINANCIAL STATEMENTS | 25 |
Table of Contents
iSHARES® MSCI EMERGING MARKETS INDEX FUND
(For a share outstanding throughout each period)
Year ended (Consolidated) | Year ended Aug. 31, 2011 (Consolidated) | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008a | ||||||||||||||||
Net asset value, beginning of year | $ | 42.71 | $ | 40.19 | $ | 35.48 | $ | 40.07 | $ | 44.78 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: |
| |||||||||||||||||||
Net investment incomeb | 0.86 | 0.81 | 0.58 | 0.66 | 1.10 | |||||||||||||||
Net realized and unrealized gain (loss)c | (3.53 | ) | 2.56 | 4.73 | (4.66 | ) | (4.64 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (2.67 | ) | 3.37 | 5.31 | (4.00 | ) | (3.54 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.82 | ) | (0.85 | ) | (0.60 | ) | (0.59 | ) | (1.17 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.82 | ) | (0.85 | ) | (0.60 | ) | (0.59 | ) | (1.17 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 39.22 | $ | 42.71 | $ | 40.19 | $ | 35.48 | $ | 40.07 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | (6.18 | )% | 8.23 | % | 14.97 | % | (9.47 | )% | (8.36 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 34,256,628 | $ | 33,496,549 | $ | 39,766,955 | $ | 30,268,121 | $ | 20,302,756 | ||||||||||
Ratio of expenses to average net assetsd | 0.68 | % | 0.67 | % | 0.68 | % | 0.72 | % | 0.72 | % | ||||||||||
Ratio of expenses to average net assets prior to waived feesd | 0.69 | % | 0.67 | % | 0.68 | % | 0.72 | % | 0.72 | % | ||||||||||
Ratio of net investment income to average net assets | 2.13 | % | 1.76 | % | 1.45 | % | 2.32 | % | 2.32 | % | ||||||||||
Portfolio turnover ratee | 15 | % | 17 | % | 14 | % | 5 | % | 11 | % |
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 | Ratios for the periods ended August 31, 2010 and prior have been recalculated, as necessary, to conform with the current presentation of foreign taxes. |
e | 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 rates for the years ended August 31, 2012 and August 31, 2011 would have been 10% and 15%, respectively. See Note 4. |
See notes to consolidated financial statements.
26 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Consolidated Financial Statements
iSHARES® MSCI EMERGING MARKETS INDEX FUND
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 consolidated financial statements relate only to the following fund (the “Fund”):
iShares MSCI Index Fund | Diversification Classification | |
Emerging Markets | Diversified |
Non-diversified funds generally hold securities of fewer issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers.
The investment objective of the Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index. The investment adviser uses a “passive” or index approach to try to achieve the Fund’s investment objective.
The Fund carries out its investment strategies associated with investment in Indian securities by investing in a wholly-owned subsidiary in the Republic of Mauritius (the “Subsidiary”), which in turn invests in Indian securities included in the underlying index. The investment adviser of the Fund also serves as the investment adviser to the Subsidiary. Through this investment structure, the Fund expects to obtain certain benefits under a current tax treaty between Mauritius and India. The accompanying consolidated financial statements for the Fund include the accounts of the Subsidiary.
The Fund may invest in securities of non-U.S. issuers that may trade in non-U.S. markets. This may involve certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: generally less liquid and less efficient securities markets; generally greater price volatility; exchange rate fluctuations and exchange controls; imposition of restrictions on the expatriation of funds or other assets of the Fund; less publicly available information about issuers; the imposition of withholding or other taxes; higher transaction and custody costs; settlement delays and risk of loss attendant in settlement procedures; difficulties in enforcing contractual obligations; less regulation of securities markets; different accounting, disclosure and reporting requirements; more substantial governmental involvement in the economy; higher inflation rates; greater social, economic and political uncertainties; the risk of nationalization or expropriation of assets and the risk of war.
Pursuant to the Company’s organizational documents, the Fund’s officers and directors are indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred.
1. | SIGNIFICANT ACCOUNTING POLICIES |
The following significant accounting policies are consistently followed by the Fund in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
NOTESTO CONSOLIDATED FINANCIAL STATEMENTS | 27 |
Table of Contents
Notes to Consolidated Financial Statements (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
SECURITY VALUATION
The Fund’s investments are valued at fair value each day that the Fund’s listing exchange is open. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) provides oversight of the valuation of investments for the Fund. The investments of the Fund are valued pursuant to policies and procedures developed by the Global Valuation Committee and approved by the Board of Directors of the Company (the “Board”).
• | Equity investments traded on a recognized securities exchange are valued at that day’s last reported trade price or the official closing price, as applicable, on the exchange where the stock is primarily traded. Equity investments traded on a recognized exchange for which there were no sales on that day are valued at the last traded price. |
• | Exchange-traded funds and closed-end funds traded on a recognized securities exchange are valued at that day’s last reported trade price or the official closing price, as applicable, on the exchange where the fund is primarily traded. Funds traded on a recognized exchange for which there were no sales on that day are valued at the last traded price. |
• | Open-end U.S. mutual funds are valued at that day’s published net asset value (NAV). |
• | Financial futures contracts are valued at that day’s last reported settlement price on the exchange where the contract is traded. |
In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the fair value of such investment or if a price is not available, the investment will be valued based upon other available factors deemed relevant by the Global Valuation Committee, in accordance with policies approved by the Board. These factors include but are not limited to (i) attributes specific to the investment; (ii) the principal market for the investment; (iii) the customary participants in the principal market for the investment; (iv) data assumptions by market participants for the investment, if reasonably available; (v) quoted prices for similar investments in active markets; and (vi) other factors, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and/or other default rates. Valuations based on such factors are reported to the Board on a quarterly basis.
The Global Valuation Committee employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the Company’s pricing vendors, a regular review of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices and large movements in market values, and reviews of market related activity.
Fair value pricing could result in a difference between the prices used to calculate the Fund’s net asset value and the prices used by the Fund’s underlying index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s underlying index.
Various inputs are used in determining the fair value of financial instruments. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes. The level of a value determined for 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. The three levels of the fair value hierarchy are as follows:
• | Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities; |
28 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Consolidated Financial Statements (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
• | 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 (such as exchange rates, financing terms, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs; and |
• | Level 3 — Unobservable inputs for the asset or liability, including the Fund’s assumptions used in determining the fair value of investments. |
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. In accordance with the Company’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period.
The following table summarizes the value of each of the Fund’s investments according to the fair value hierarchy as of August 31, 2012. The breakdown of the Fund’s investments into major categories is disclosed in its Consolidated Schedule of Investments.
Investments | ||||||||||||||||
Investment Type | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 31,375,972,914 | $ | 33,241,503 | $ | — | $ | 31,409,214,417 | ||||||||
Preferred Stocks | 2,673,378,457 | — | — | 2,673,378,457 | ||||||||||||
Rights | — | 1,284,851 | — | 1,284,851 | ||||||||||||
Short-Term Investments | 1,784,531,449 | — | — | 1,784,531,449 | ||||||||||||
Futures Contractsa | 7,733,312 | — | — | 7,733,312 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 35,841,616,132 | $ | 34,526,354 | $ | — | $ | 35,876,142,486 | |||||||||
|
|
|
|
|
|
|
| |||||||||
a | Futures contracts are shown at the net unrealized appreciation (depreciation) on the contracts. |
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are accounted for on trade date. Dividend income is recognized on the ex-dividend date, net of any foreign taxes withheld at source. Any taxes withheld that are reclaimable from foreign tax authorities as of August 31, 2012 are reflected in dividends receivable. Non-cash dividends received in the form of stock in an elective dividend, if any, are recorded as dividend income at fair value. Distributions received by the Fund may include a return of capital that is estimated by management. Such amounts are recorded as a reduction of the cost of investments or reclassified to capital gains. Interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method.
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.
NOTESTO CONSOLIDATED FINANCIAL STATEMENTS | 29 |
Table of Contents
Notes to Consolidated Financial Statements (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
The Fund does not isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of securities. Such fluctuations are reflected by the Fund as a component of realized and unrealized gains and losses from investments for financial reporting purposes.
FOREIGN TAXES
The Fund may be subject to foreign taxes (a portion of which may be reclaimable) on income, capital gains on investments, certain foreign currency transactions or other corporate events. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the Fund invests. These foreign taxes, if any, are paid by the Fund and are reflected in its Consolidated Statement of Operations as follows: foreign taxes withheld at source are presented as a reduction of income, foreign taxes on securities lending income are presented as a reduction of securities lending income, foreign taxes on capital gains from sales of investments and foreign currency transactions are included in their respective net realized gain (loss) categories, and foreign taxes on other corporate events are reflected in “Other foreign taxes.” Foreign taxes payable as of August 31, 2012, if any, are disclosed in the Fund’s Consolidated Statement of Assets and Liabilities.
The Fund conducts its investment activities in India through the Subsidiary and expects to obtain benefits under the Double Tax Avoidance Agreement (“DTAA”). In order to be eligible to claim benefits under the DTAA, the Subsidiary must satisfy certain conditions, including the establishment and maintenance of valid tax residence in Mauritius. The Subsidiary is subject to tax in Mauritius on its net income at the rate of 15%. However, a system of foreign tax credits effectively reduces the Mauritius income tax rate to a maximum of 3%. These income taxes, if any, are paid by the Fund and are disclosed in the Consolidated Statement of Operations. Further, the Subsidiary is not subject to capital gains tax in Mauritius nor is it subject to tax in Mauritius on any gains from the sale of securities. Any dividends paid by the Subsidiary to the Fund will also be exempt from tax in Mauritius. The foregoing is based upon current interpretation and practice and is subject to future changes in the tax laws of India or Mauritius and in the DTAA.
As a result of recent legislative changes enacted by the 2012 India Finance Act (“the Act”) and its general anti-avoidance rules (“GAAR”), which are effective April 1, 2013, the Subsidiary’s ability to leverage the treaty between Mauritius and India may be adversely impacted, and therefore the Fund may be subject to taxes on capital gains and/or dividends realized on Indian securities. The Act also includes provisions that impose Indian tax on the transfer of shares of an Indian company. However, until more definitive guidance on the legislative changes is available, the impact to the Fund, if any, cannot be determined at this time.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends and distributions paid by the Fund are recorded on the ex-dividend dates. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Fund.
FEDERAL INCOME TAXES
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 is required.
30 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Consolidated Financial Statements (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
2. | INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES |
Pursuant to an Investment Advisory Agreement with the Company, BlackRock Fund Advisors (“BFA”) manages the investment of the Fund’s assets. BFA is a California corporation indirectly owned by BlackRock, Inc. (“BlackRock”). Under the Investment Advisory Agreement, BFA is responsible for substantially all expenses of the Fund, except interest, taxes, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution fees, litigation expenses and any extraordinary expenses.
The Subsidiary has entered into a separate contract with BFA under which BFA provides investment advisory services to the Subsidiary but does not receive separate compensation from the Subsidiary for providing it with such services. The Subsidiary has also entered into separate arrangements that provide for the provision of other services to the Subsidiary (including administrative, custody, transfer agency and other services), and BFA pays the costs and expenses related to the provision of those services.
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, up to and including $42 billion | |
0.56 | Over $42 billion, up to and including $56 billion | |
0.50 | Over $56 billion, up to and including $70 billion | |
0.45 | Over $70 billion, up to and including $84 billion | |
0.40 | Over $84 billion |
BFA has voluntarily waived a portion of its investment advisory fees for the Fund in the amount of $2,966,217.
BFA has contractually agreed to waive a portion of its investment advisory fees for the Fund through June 30, 2013 in an amount equal to the investment advisory fees payable on the amount of the Fund’s investment in other iShares funds. In association with this agreement, for the year ended August 31, 2012, BFA waived its investment advisory fees for the Fund in the amount of $4,168.
The U.S. Securities and Exchange Commission has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (“BTC”) to serve as securities lending agent for the Fund, subject to applicable conditions. BTC is an affiliate of BFA. Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, and any fees or other payments to and from borrowers of securities. The Fund retains 65% of securities lending income and pays a fee to BTC equal to 35% of such income. As securities lending agent, BTC is responsible for all transaction fees and all other operational costs relating to securities lending activities, other than extraordinary expenses. BTC is also responsible for fees and expenses incurred by the Fund as a result of the investment of cash collateral received for securities on loan in a money market fund managed by BFA or an affiliate.
For the year ended August 31, 2012, BTC earned securities lending agent fees from the Fund of $18,260,147.
For the year ended August 31, 2012, BTC, the Fund’s securities lending agent, has agreed to voluntarily reimburse the Fund in the amount of $404,820, related to the foreign tax on the securities lending income. Such reimbursement is included in the “Securities lending income – affiliated” in the Fund’s Consolidated Statement of Operations.
NOTESTO CONSOLIDATED FINANCIAL STATEMENTS | 31 |
Table of Contents
Notes to Consolidated Financial Statements (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
At a special meeting of the Board held on January 5, 2012, the directors approved a new distribution agreement with BlackRock Investments, LLC (“BRIL”). BRIL is an affiliate of BFA. Effective April 1, 2012, BRIL replaced SEI Investments Distribution Co. as the distributor for the Fund. Pursuant to the new distribution agreement, BFA is responsible for any fees or expenses for distribution services provided to the Fund.
The Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is included in “Interest — affiliated” in the Consolidated Statement of Operations.
The PNC Financial Services Group, Inc. is the largest stockholder of BlackRock and is considered to be an affiliate of the Fund for 1940 Act purposes.
The Fund, in order to improve its portfolio liquidity and its ability to track its underlying index, may invest in shares of other iShares funds that invest in securities in the Fund’s underlying index.
Investments in issuers considered to be affiliates of the Fund (excluding short-term investments) during the year ended August 31, 2012, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:
Name of Affiliated Issuer | Shares Held at Beginning of Year | Shares Purchased | Shares Sold | Shares Held at End of Year | Value at End of Year | Dividend Income | Net Realized Gain (Loss) | |||||||||||||||||||||
iShares MSCI Malaysia Index Fund | 349,867 | 43,826 | (393,693 | ) | — | $ | — | $ | — | $ | (131,480 | ) | ||||||||||||||||
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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, 2012, were $6,862,980,988 and $5,058,173,451, respectively.
In-kind purchases and sales (see Note 4) for the year ended August 31, 2012, aggregated $4,140,909,712 and $2,241,885,429, respectively.
4. | CAPITAL SHARE TRANSACTIONS |
Capital shares are issued and redeemed by the Fund only in aggregations of a specified number of shares or multiples thereof (“Creation Units”) at net asset value. Except when aggregated in Creation Units, shares of the Fund are not redeemable. Transactions in capital shares for the Fund are disclosed in detail in the Consolidated Statements of Changes in Net Assets.
The consideration for the purchase of Creation Units of a fund in the Company generally consists of the in-kind deposit of a designated portfolio of securities, which constitutes an optimized representation of the securities of that fund’s underlying index, and a specified amount of cash. Certain funds in the Company may be offered in Creation Units solely or partially for cash in U.S. dollars. Investors purchasing and redeeming Creation Units may pay a purchase transaction fee and a redemption transaction fee directly to State Street Bank and Trust Company, the Company’s administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash. Investors transacting in Creation Units for cash pay an additional variable
32 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Consolidated Financial Statements (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
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 |
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 a fund or through one or more joint accounts or money market funds, including those managed by BFA or its affiliates. The Fund could suffer a loss if the value of an investment purchased with cash collateral falls below the value of the cash collateral received.
As of August 31, 2012, any securities on loan 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, 2012 and the value of the related collateral are disclosed in the Consolidated Statement of Assets and Liabilities. Securities lending income, as disclosed in the Consolidated Statement of Operations, represents the income earned from the investment of the cash collateral, net of fees and other payments to and from borrowers, and less the fees paid to BTC as securities lending agent.
6. | INCOME TAX INFORMATION |
U.S. GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset values per share. The following permanent differences as of August 31, 2012, attributable to passive foreign investment companies, the expiration of capital loss carryforwards, foreign currency transactions and realized gains (losses) from in-kind redemptions, were reclassified to the following accounts:
Paid-in Capital | Undistributed Net Investment Income/Distributions in Excess of Net Investment Income | Undistributed Net Realized Gain/Accumulated Net Realized Loss | ||||||||
$ | 241,735,240 | $ | (31,172,572) | $ | (210,562,668) |
The tax character of distributions paid during the years ended August 31, 2012 and August 31, 2011 was as follows:
2012 | 2011 | |||||||
Ordinary income | $ | 703,374,541 | $ | 763,134,134 | ||||
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NOTESTO CONSOLIDATED FINANCIAL STATEMENTS | 33 |
Table of Contents
Notes to Consolidated Financial Statements (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
As of August 31, 2012, the tax components of accumulated net earnings (losses) were as follows:
Undistributed Ordinary Income | Capital Loss Carryforwards | Net Unrealized Gains (Losses)a | Qualified Late-Year Lossesb | Total | ||||||||||||||
$ | 106,067,286 | $ | (2,980,649,149 | ) | $ | (2,616,246,283 | ) | $ | (1,004,358,288 | ) | $ | (6,495,186,434 | ) |
a | The difference between book-basis and tax-basis unrealized gains (losses) was attributable primarily to the tax deferral of losses on wash sales, the realization for tax purposes of unrealized gains (losses) on certain futures contracts and the realization for tax purposes of unrealized gains on investments in passive foreign investment companies. |
b | The Fund has elected to defer certain qualified late-year losses and recognize such losses in the year ending August 31, 2013. |
As of August 31, 2012, the Fund had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:
Non- Expiringa | Expiring 2013 | Expiring 2014 | Expiring 2015 | Expiring 2016 | Expiring 2017 | Expiring 2018 | Expiring 2019 | Total | ||||||||||||||||||||||||||
$ | 602,564,447 | $ | 20,296,564 | $ | 11,239,258 | $ | 29,973,301 | $ | 13,844,901 | $ | 228,196,854 | $ | 1,201,366,175 | $ | 873,167,649 | $ | 2,980,649,149 |
a | Must be utilized prior to losses subject to expiration. |
The Fund may own shares in certain foreign investment entities, referred to, under U.S. tax law, as “passive foreign investment companies.” The Fund may elect to mark-to-market annually the shares of each passive foreign investment company and would be required to distribute to shareholders any such marked-to-market gains.
As of August 31, 2012, the cost of investments for federal income tax purposes was $38,483,860,653. Net unrealized depreciation was $2,615,451,479, of which $4,207,139,867 represented gross unrealized appreciation on securities and $6,822,591,346 represented gross unrealized depreciation on securities.
Management has reviewed the tax positions as of August 31, 2012, inclusive of the open tax return years, and has determined that no provision for income tax is required in the Fund’s consolidated financial statements.
7. | FINANCIAL FUTURES CONTRACTS |
The Fund may purchase or sell financial futures contracts in an effort to help the Fund track its underlying index. A futures contract is a standardized, exchange-traded agreement to buy and sell a financial instrument at a set price on a future date. Upon entering into a futures contract, the Fund is required to pledge to the executing broker which holds segregated from its own assets, an amount of cash, U.S. government securities or other high-quality debt and equity securities equal to the minimum initial margin requirements of the exchange on which the contract is traded. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as margin variation and are recorded by the Fund as unrealized appreciation or depreciation. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Losses may arise if the value of a futures contract decreases due to an unfavorable change in the market rates or values of the underlying instrument during the term of the contract or if the counterparty does not perform under the contract. The use of futures contracts also involves the risk of an imperfect correlation in the movements in the price of futures contracts and the assets underlying such contracts.
34 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Consolidated Financial Statements (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
The following table shows the value of futures contracts held as of August 31, 2012 and the related locations in the Consolidated Statement of Assets and Liabilities, presented by risk exposure category:
Assets | ||||
Equity contracts: | ||||
Variation margin/Net assets consist | $ | 7,733,312 | ||
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a | Represents cumulative appreciation of futures contracts as reported in the Consolidated Schedule of Investments. Only current day’s variation margin is reported within the Consolidated Statement of Assets and Liabilities. |
The following table shows the realized and unrealized gains (losses) on futures contracts held during the year ended August 31, 2012 and the related locations in the Consolidated Statement of Operations, presented by risk exposure category:
Net Realized Gain (Loss) | Net Change in Unrealized Appreciation/Depreciation | |||||||
Equity contracts: | ||||||||
Futures contracts | $ | 2,511,231 | $ | 7,733,312 | ||||
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For the year ended August 31, 2012, the average quarter-end number of contracts and notional value of open futures contracts for the Fund were 1,907 and $89,914,370, respectively.
8. | LINE OF CREDIT |
The Fund, along with certain other iShares funds, is a party to a $125 million credit agreement with State Street Bank and Trust Company, which expires October 31, 2012. The credit agreement was established to facilitate the funding of purchases of securities in India. The credit agreement has the following terms: a commitment fee of 0.08% per annum on the unused portion of the credit agreement and interest at a rate equal to the higher of (a) the one-month LIBOR plus 1.00% per annum or (b) the U.S. Federal Funds rate plus 1.00% per annum on amounts borrowed. The commitment fee is allocated to each fund participating in the credit agreement based on each fund’s pro-rata share of the aggregate average daily value of assets invested in local Indian securities.
For the year ended August 31, 2012, the Fund’s maximum amount borrowed, the average borrowings and the average interest rate under the credit agreement were $118,769,420, $2,277,770 and 1.24%, respectively.
9. | SUBSEQUENT EVENTS |
Management has evaluated the impact of all subsequent events on the Fund through the date the consolidated financial statements were available to be issued and has determined that there were no subsequent events requiring adjustment or disclosure in the consolidated financial statements.
NOTESTO CONSOLIDATED FINANCIAL STATEMENTS | 35 |
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 consolidated statement of assets and liabilities, including the consolidated schedule of investments, and the related consolidated statements of operations and of changes in net assets and the consolidated financial highlights present fairly, in all material respects, the financial position of the iShares MSCI Emerging Markets Index Fund and its subsidiary (the “Fund”), at August 31, 2012, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and 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, 2012 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
October 23, 2012
36 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI EMERGING MARKETS INDEX FUND
For corporate shareholders, 0.49% of the income dividends paid by the Fund during the fiscal year August 31, 2012 qualified for the dividends-received deduction.
For the fiscal year ended August 31, 2012, the Fund earned foreign source income of $1,053,594,515 and paid foreign taxes of $109,766,119 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 $640,469,790 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, 2012.
In February 2013, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2012. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.
TAX INFORMATION | 37 |
Table of Contents
Board Review and Approval of Investment Advisory
Contract (Unaudited)
iSHARES® MSCI EMERGING MARKETS 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 annually to consider the Investment Advisory Contract between the Company and BFA (the “Advisory Contract”) on behalf of the Fund. The Independent Directors requested, and BFA provided, such information as the Independent Directors, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of Independent Directors (the “15(c) Committee”), with independent counsel, met with management on April 19, 2012, April 27, 2012, and May 16, 2012, to discuss the types of information the Independent Directors required and the manner in which management would organize and present such information. At a meeting held on May 17, 2012, management presented information to the Board relating to the continuance of the Advisory Contract, and the Board, including the Independent Directors, reviewed and discussed such information at length. The Independent Directors requested from management certain additional information, and the 15(c) Committee met with management on June 8, 2012, to discuss the additional requests. At a meeting held on June 20-21, 2012, the Board, including the Independent Directors, reviewed additional information provided by management in response to these requests. The Board, including a majority of the Independent Directors, approved the continuance of the Advisory Contract for the Fund, based on a review of qualitative and quantitative information provided by BFA, including a review of supplemental information management provided at the request of the Independent Directors. The Board noted its satisfaction with the extent and quality of information, and detailed responses, provided by BFA. The Independent Directors were advised by their independent counsel throughout the process. In approving the Advisory Contract for the Fund, the Board, including the Independent Directors, considered the following factors, no one of which was controlling, and made the following conclusions:
Expenses and Performance of the Fund — 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, sponsor, inception date, or other differentiating factors, but that 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 those tracked by the Fund, the Lipper Group 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), as applicable. 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 also received a detailed explanation from BFA regarding its rationale for including funds that had been excluded from Lipper’s consideration due to Lipper’s methodology parameters, as well as information showing the effect of including these additional funds in the analysis. The Board further noted that due to the limitations in providing comparable funds in the various Lipper Groups, the statistical information may or may not provide meaningful direct comparisons to the Fund.
The Board also noted that the investment advisory fees and overall expenses for the Fund compared favorably to the investment advisory fee rates and overall expenses of the funds in the Lipper Group.
In addition, the Board reviewed statistical information prepared by Lipper regarding the performance of the Fund for the one-, three-, five-, ten-year, and since inception periods, as applicable, and the “last quarter” period ended December 31, 2011, and a comparison of the Fund’s performance to its performance benchmark index for the same periods. To the extent that any of the comparison funds included in the Lipper Group track the same index as the Fund, Lipper also provided, and the Board reviewed, a comparison of the Fund’s performance to that of such relevant comparison funds for the same periods. The Board noted that the Fund generally performed in line with its performance benchmark index over the relevant periods. In considering this information, the Board noted that the Lipper Group includes
38 | 2012 iSHARESANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Board Review and Approval of Investment Advisory
Contract (Unaudited) (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
funds that may have different investment objectives and/or benchmarks from the Fund. In addition, the Board noted that the Fund seeks to track its benchmark index and that, during the prior year, the Board received periodic reports on the Fund’s performance in comparison with its benchmark index. Such periodic comparative performance information was also considered by the Board.
Based on this review, the other factors considered at the meeting, and their general knowledge of mutual fund pricing, the Board concluded that the investment advisory fees and expense levels and the historical performance of the Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA over prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the Fund and its shareholders. The Board noted that BFA became an indirect wholly-owned subsidiary of BlackRock, Inc. (“BlackRock”) in December 2009. The Board acknowledged that additional resources to support the Fund and its shareholders have been added or enhanced since then, including in such areas as investor education, product management, customized portfolio consulting support, and capital markets support. The Board also considered BFA’s compliance program and its compliance record with respect to the Fund. In that regard, 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 on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Fund. In addition to the above considerations, the Board reviewed and considered BFA’s investment and risk management processes and strategies, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that the Fund had met its investment objective consistently since its inception date.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Fund under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Costs of Services Provided to Fund and Profits Realized by BFA and Affiliates — The Board reviewed information about the profitability to BFA of the Fund based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and all other sources of revenue and expense to BFA and its affiliates from the Fund’s operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, noting that the 15(c) Committee had focused on the methodology and proposed presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC from securities lending by the Fund. The Board also discussed BFA’s profit margin as reflected in the Fund’s profitability analysis and reviewed information regarding economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Fund and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.
Economies of Scale — The Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Fund’s assets, noting that the issue of economies of scale had been focused on extensively by the 15(c) Committee during its meetings and addressed by management. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through breakpoints, waivers, or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 39 |
Table of Contents
Board Review and Approval of Investment Advisory
Contract (Unaudited) (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
the 15(c) Committee received information regarding BFA’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished between fixed and variable costs, and explained how the nature of such costs may impact the existence of scale benefits. The Board noted that the Advisory Contract for the Fund already provided for breakpoints in the Fund’s investment advisory fee rates as the assets of the Fund, on an aggregated basis with the assets of certain other iShares funds, increase. The Board noted that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding new or revised breakpoints in the future. Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider this issue at least annually, concluded that the structure of the investment advisory fees reflects appropriate sharing of potential economies of scale with the Fund’s shareholders and supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end and closed-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds and institutional separate accounts (together, the “Other Accounts”). The Board noted that BFA and its affiliates do manage Other Accounts with a substantially similar investment objective and strategy as the Fund. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Fund, including in terms of the different generally more extensive services provided, as well as other significant differences in the approach of BFA and its affiliates to the Fund, on one hand, and Other Accounts, on the other. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks of managing and providing other services to the Fund, as a publicly traded exchange traded fund, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rates under the Advisory Contract for the Fund were generally higher than the investment advisory/management fee rates for the Other Accounts that are institutional clients of BFA (or its affiliates) and concluded that the differences appeared to be consistent with the factors discussed.
Other Benefits to BFA and/or its Affiliates — The Board reviewed ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Fund by BFA, such as payment of revenue to BTC, the Fund’s securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Fund in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board noted that BFA generally does 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 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. The Board concluded that any such ancillary benefits would not be disadvantageous to the Fund’s shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.
Based on the considerations described above, the Board determined that the investment advisory fee rates under the Advisory Contract do not constitute fees that are so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that it is in the best interest of the Fund and its shareholders to approve the continuance of the Advisory Contract for the coming year.
40 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
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 the 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 | |||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||
$ | 0.77400 | $ | — | $ | 0.04132 | $ | 0.81532 | 95 | % | — | % | 5 | % | 100 | % |
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 primary stock exchange on which the shares of the Fund are listed for trading, as of the time 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 included in this report. The information shown for the Fund is for five calendar years through the date of the most recent calendar quarter-end. The specific period covered for the Fund is disclosed in the table.
SUPPLEMENTAL INFORMATION | 41 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX 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 the table. All data presented here represents past performance, which cannot be used to predict future results.
Period Covered: January 1, 2007 through June 30, 2012
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% | 4 | 0.29 | ||||||
Greater than 3.0% and Less than 3.5% | 2 | 0.14 | ||||||
Greater than 2.5% and Less than 3.0% | 10 | 0.72 | ||||||
Greater than 2.0% and Less than 2.5% | 15 | 1.08 | ||||||
Greater than 1.5% and Less than 2.0% | 29 | 2.10 | ||||||
Greater than 1.0% and Less than 1.5% | 66 | 4.77 | ||||||
Greater than 0.5% and Less than 1.0% | 241 | 17.42 | ||||||
Between 0.5% and –0.5% | 684 | 49.43 | ||||||
Less than –0.5% and Greater than –1.0% | 174 | 12.57 | ||||||
Less than –1.0% and Greater than –1.5% | 88 | 6.36 | ||||||
Less than –1.5% and Greater than –2.0% | 32 | 2.31 | ||||||
Less than –2.0% and Greater than –2.5% | 13 | 0.94 | ||||||
Less than –2.5% and Greater than –3.0% | 6 | 0.43 | ||||||
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% | 5 | 0.36 | ||||||
Less than –4.5% | 3 | 0.22 | ||||||
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1,384 | 100.00 | % | ||||||
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42 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Director and Officer Information (Unaudited)
iSHARES® MSCI EMERGING MARKET INDEX FUND
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 he or she resigns, is removed, dies, retires or becomes incapacitated. The President, Treasurer and Secretary shall each hold office until their successors are chosen and qualified, and all other officers shall hold office until he or she resigns or is removed. Directors who are not interested persons (as defined in the 1940 Act) are referred to as Independent Directors.
The registered investment companies advised by BFA or its affiliates are organized into one complex of closed-end funds, two complexes of open-end funds and one complex of exchange-traded funds (“Exchange-Traded Fund Complex”) (each, a “BlackRock Fund Complex”). Each Fund is included in the BlackRock Fund Complex referred to as the Exchange-Traded Fund Complex. Each Director of iShares MSCI Russia Capped Index Fund, Inc. also serves as a Director of iShares, Inc., a Trustee of iShares Trust and a Trustee of iShares U.S. ETF Trust and, as a result, oversees a total of 276 funds within the Exchange-Traded 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 Robert H. Silver as its Independent Chairman. Additional information about the Fund’s Directors and Officers may be found in the Fund’s Statement of Additional Information, which is available without charge, upon request, by calling toll-free 1-800-iShares (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 (55) | Director (since 2010). | 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); President of Board of Directors, Hope & Heroes Children’s Cancer Fund (since 2002); President of the Board of Directors, Periwinkle Theatre for Youth (since 1983). | Director of BlackRock, Inc. (since 2007); Director of iShares, Inc. (since 2009); Trustee of iShares Trust (since 2009); Trustee of iShares U.S. ETF Trust (since 2011). | |||
Michael Lathamb (47) | Director | Chairman of iShares, BlackRock (since 2011); Global Chief Executive Officer of iShares, BlackRock (2010-2011); Managing Director, BlackRock (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, BGI (2003-2007). | Director of iShares, Inc. (since 2010); Trustee of iShares Trust (since 2010); Trustee of iShares U.S. ETF Trust |
a | Robert S. Kapito is deemed to be an “interested person” (as defined in the 1940 Act) of the Trust 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 Trust due to his affiliations with BlackRock, Inc. and its affiliates. |
DIRECTORAND OFFICER INFORMATION | 43 |
Table of Contents
Director and Officer Information (Unaudited) (Continued)
iSHARES® MSCI EMERGING MARKET INDEX FUND
Independent Directors
Name (Age) | Position(s) (Length of Service) | Principal Occupation(s) During the Past 5 Years | Other Directorships Held | |||
Robert H. Silver (57) | Director (since 2010); Independent Chairman (since 2012). | President and Co-Founder of The Bravitas Group, Inc. (since 2006); Director and Vice Chairman of the YMCA of Greater NYC (2001-2011); Broadway Producer (2006-2011); 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); President and Chief Operating Officer of UBS Financial Services Inc. (formerly Pain Webber Inc.) (2004-2005) and various executive positions with UBS and its affiliates (1988-2005); CPA and Audit Manager of KPMG, LLP (formerly Peat Marwick Mitchell) (1977-1983). | Director of iShares, Inc. (since 2007); Trustee of iShares Trust (since 2007); Trustee of iShares U.S. ETF Trust (since 2011); Independent Chairman of iShares, Inc., iShares Trust and iShares U.S. ETF Trust (since 2012). | |||
Cecilia H. Herbert (63) | Director (since 2010); Nominating and Governance Committee Chair and Equity Plus Committee Chair (since 2012). | Director (since 1998) and President (2007-2011) of the Board of Directors, Catholic Charities CYO; Trustee (since 2002) and Chair of the Finance Committee (2006-2009) and Investment Committee (since 2006), The Thacher School; Trustee of Pacific Select Funds (2004-2005); Member (since 1994) and Chair (1994-2005) of the Investment Committee, Archdiocese of San Francisco. | Director of iShares, Inc. (since 2005); Trustee of iShares Trust (since 2005); Trustee of iShares U.S. ETF Trust (since 2011); Director of Forward Funds (35 portfolios) (since 2009). | |||
Charles A. Hurty (69) | Director (since 2010); Audit Committee Chair (since 2006). | Retired; Partner, KPMG LLP (1968-2001). | Director of iShares, Inc. (since 2005); Trustee of iShares Trust (since 2005); Trustee of iShares U.S. ETF Trust (since 2011); Director of GMAM Absolute Return Strategy Fund (1 portfolio) (since 2002); Director of SkyBridge Alternative Investment Multi-Adviser Hedge Fund Portfolios LLC (1 portfolio) (since 2002). | |||
John E. Kerrigan (57) | Director (since 2010); Fixed Income Plus Committee Chair (since 2012). | Chief Investment Officer, Santa Clara University (since 2002). | Director of iShares, Inc. (since 2005); Trustee of iShares Trust (since 2005); Trustee of iShares U.S. ETF Trust (since 2011). |
44 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Director and Officer Information (Unaudited) (Continued)
iSHARES® MSCI EMERGING MARKET INDEX FUND
Independent Directors (Continued)
Name (Age) | Position(s) (Length of Service) | Principal Occupation(s) During the Past 5 Years | Other Directorships Held | |||
John E. Martinez (51) | Director (since 2010); Securities Lending Committee Chair (since 2012). | Director of FirstREX Agreement Corp. (formerly EquityRock, Inc.) (since 2005). | Director of iShares, Inc. (since 2003); Trustee of iShares Trust (since 2003); Trustee of iShares U.S. ETF Trust (since 2011). | |||
George G.C. Parker (73) | Director (since 2010). | Dean Witter Distinguished Professor of Finance, Emeritus, Stanford University Graduate School of Business (Professor since 1973; Emeritus since 2006). | Director of iShares, Inc. (since 2002); Trustee of iShares Trust (since 2000); Trustee of iShares U.S. ETF Trust (since 2011); Director of Tejon Ranch Company (since 1999); Director of Threshold Pharmaceuticals (since 2004); Director of Colony Financial, Inc. (since 2009); Director of First Republic Bank (since 2010). | |||
Madhav V. Rajan (48) | Director (since 2011); 15(c) Committee Chair (since 2012). | Robert K. Jaedicke Professor of Accounting and Senior Associate Dean for Academic Affairs and Head of MBA Program, Stanford University Graduate School of Business (since 2001); Professor of Law (by courtesy), Stanford Law School (since 2005); Visiting Professor, University of Chicago (Winter 2007-2008). | Director of iShares, Inc. (since 2011); Trustee of iShares Trust (since 2011); Trustee of iShares U.S. ETF Trust (since 2011). |
DIRECTORAND OFFICER INFORMATION | 45 |
Table of Contents
Director and Officer Information (Unaudited) (Continued)
iSHARES® MSCI EMERGING MARKET INDEX FUND
Officers
Name (Age) | Position(s) (Length of Service) | Principal Occupation(s) During the Past 5 Years | ||
Edward B. Baer (44) | Vice President and Chief Legal Officer (since 2012). | Managing Director, BlackRock (since 2006). | ||
Eilleen M. Clavere (60) | Secretary (since 2010). | Director, BlackRock (since 2009); Director of Legal Administration of Intermediary Investor Business, BGI (2006-2009). | ||
Jack Gee (53) | Treasurer and Chief Financial Officer (since 2010). | Managing Director, BlackRock (since 2009); Senior Director of Fund Administration of Intermediary Investor Business, BGI (2009); Director of Fund Administration of Intermediary Investor Business, BGI (2004-2009). | ||
Amy Schioldager (50) | Executive Vice President (since 2010). | Managing Director, BlackRock (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008). | ||
Ira P. Shapiro (49) | Vice President (since 2010). | Managing Director, BlackRock (since 2009); Chief Legal Officer, Exchange-Traded Funds Complex (2007-2012); Associate General Counsel, BGI (2004-2009). | ||
Scott Radell (43) | Executive Vice President (since 2012). | Managing Director, BlackRock (since 2009); Head of Portfolio Solutions, BGI (2007-2009); Credit Portfolio Manager, BGI (2005-2007). |
46 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
For more information visit www.iShares.com
or call 1-800-474-2737
This report is intended for the Fund’s shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.
Investing involves risk, including possible loss of principal.
The iShares Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds. BlackRock is not affiliated with the company listed above.
A description of the policies that the Fund uses to determine how to vote proxies relating to portfolio securities and information about how the Fund voted proxies relating to portfolio securities during the most recent twelve-month period ending June 30 is available without charge, upon request, by calling toll-free 1-800-474-2737; on the Fund’s website at www.iShares.com; and on the U.S. Securities and Exchange Commission (SEC) website at www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Form N-Q is available on the SEC’s website or may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Fund also discloses its complete schedule of portfolio holdings on a daily and monthly basis on the Fund’s website.
©2012 BlackRock. All rights reserved. iShares® and BlackRock® are registered trademarks of BlackRock. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.
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iS-AR-85-0812
Table of Contents
![]() | August 31, 2012 |
2012 Annual Report
iShares, Inc.
iShares MSCI BRIC Index Fund | BKF | NYSE Arca
iShares MSCI Emerging Markets Asia Index Fund | EEMA | NASDAQ
iShares MSCI Emerging Markets Consumer Discretionary Sector Index Fund | EMDI | NASDAQ
iShares MSCI Emerging Markets Energy Sector Capped Index Fund | EMEY | NASDAQ
iShares MSCI Emerging Markets Growth Index Fund | EGRW | NASDAQ
iShares MSCI Emerging Markets Minimum Volatility Index Fund | EEMV | NYSE Arca
iShares MSCI Emerging Markets Small Cap Index Fund | EEMS | NYSE Arca
iShares MSCI Emerging Markets Value Index Fund | EVAL | NASDAQ
Table of Contents
5 | ||||
28 | ||||
30 | ||||
30 | ||||
35 | ||||
iShares MSCI Emerging Markets Consumer Discretionary Sector Index Fund | 43 | |||
iShares MSCI Emerging Markets Energy Sector Capped Index Fund | 45 | |||
47 | ||||
54 | ||||
58 | ||||
67 | ||||
74 | ||||
84 | ||||
92 | ||||
104 | ||||
105 | ||||
Board Review and Approval of Investment Advisory Contract (Unaudited) | 106 | |||
110 | ||||
115 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI BRIC INDEX FUND
Performance as of August 31, 2012
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||
Year Ended 8/31/12 | Inception to 8/31/12 | Inception to 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(13.33)% | (12.90)% | (12.17)% | (7.50)% | (7.52)% | (7.19)% | (31.22)% | (31.30)% | (30.12)% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
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 periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (11/16/07), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 5 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI BRIC INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector* | Percentage of Net Assets |
Financial | 28.74 | % | ||
Energy | 22.87 | |||
Consumer Non-Cyclical | 11.71 | |||
Communications | 10.02 | |||
Basic Materials | 9.03 | |||
Consumer Cyclical | 5.04 | |||
Utilities | 4.39 | |||
Industrial | 3.85 | |||
Technology | 2.83 | |||
Diversified | 1.05 | |||
Short-Term and Other Net Assets | 0.47 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
China Mobile Ltd. (China) | 4.27 | % | ||
Gazprom OAO (Russia) | 3.51 | |||
China Construction Bank Corp. Class H (China) | 3.21 | |||
Petroleo Brasileiro SA (Preferred) (Brazil) | 2.92 | |||
Itau Unibanco Holding SA (Preferred) (Brazil) | 2.45 | |||
Industrial and Commercial Bank of China Ltd. Class H (China) | 2.40 | |||
CNOOC Ltd. (China) | 2.33 | |||
Vale SA Class A (Preferred) (Brazil) | 2.20 | |||
Petroleo Brasileiro SA (Brazil) | 2.12 | |||
Banco Bradesco SA (Preferred) (Brazil) | 2.10 | |||
|
| |||
TOTAL | 27.51 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI BRIC Index Fund (the “Fund”) seeks 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, 2012 (the “reporting period”), the total return for the Fund was (13.33)%, net of fees, while the total return for the Index was (12.17)%.
As represented by the Index, the stock markets in the BRIC countries posted double-digit declines for the reporting period, reflecting a slowdown in global economic growth. China, Brazil, and India — among the most rapidly growing economies in the world over the past decade — saw their economic growth rates fall during the reporting period, while Russia’s growth rate was largely unchanged. One factor behind this trend was the continuing sovereign debt crisis in Europe, which had a negative impact on financial institutions around the globe and led to a meaningful slowdown in European economic growth, including recessions in the most fiscally challenged countries in the region. Exports to developed regions of the world are an important component of emerging economies. For example, exports comprise approximately 40% of the Chinese economy, and the European Union is its largest trading partner. A marked decline in exports to Europe weighed on economic activity in BRIC countries.
In addition, central banks in the BRIC countries raised short-term interest rates in 2011 to combat runaway inflation, and this had a negative impact on domestic economic growth in 2012. Although the central banks were successful in lowering the inflation rate in their respective countries, higher borrowing costs put downward pressure on their domestic economies. By the spring of 2012, all four central banks began lowering short-term rates.
Another factor behind the Index’s overall decline was a stronger U.S. dollar, which lowered international equity returns for U.S. investors (in local currency terms, the Index returned declined 1.11% for the reporting period). Although the U.S. dollar was largely unchanged versus the Chinese yuan, it appreciated by 12% against the Russian ruble, 21% versus the Indian rupee, and 28% against the Brazilian real.
6 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI BRIC INDEX FUND
Chinese stocks, the Index’s largest country weighting, declined by about 8% during the reporting period. China’s economy grew by 7.6% for the 12 months ended June 30, 2012, the country’s slowest growth rate since the global downturn in 2008. Nonetheless, China remains one of the fastest-growing countries in the world. Indian and Russian stocks posted declines of approximately 12% for the reporting period. India’s economy grew at a 5.5% rate for the 12 months ended June 30, 2012 — its lowest level of growth since 2005 — while the Russian economy held steady at a 4% annual rate for the reporting period. The weakest performer among the four markets represented in the Index was Brazil, whose stocks declined by more than 16% for the reporting period. Brazil’s economy grew by just 0.5% during the reporting period, prompting the Brazilian central bank to cut interest rates sharply, from a peak of 12.5% to 7.5% by the end of the reporting period.
From a sector perspective, eight of the ten sectors in the Index declined for the reporting period. The materials sector fell by more than 30% as commodity prices declined substantially. The consumer discretionary, energy, and industrials sectors also posted double-digit declines for the reporting period. The only two sectors of the Index to advance were information technology and consumer staples.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 7 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI EMERGING MARKETS ASIA INDEX FUND
Performance as of August 31, 2012
Cumulative Total Returns | ||||||||||
Inception to 8/31/12 | ||||||||||
NAV | MARKET | INDEX | ||||||||
(7.52)% | (7.03)% | (7.22)% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
“Cumulative Total Returns” represent the total change in value of an investment over the period indicated and are calculated from an inception date of 2/8/12.
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 (2/9/12), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
8 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS ASIA INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector* | Percentage of Net Assets |
Financial | 25.02 | % | ||
Technology | 15.80 | |||
Consumer Cyclical | 11.37 | |||
Industrial | 10.22 | |||
Communications | 10.07 | |||
Energy | 9.17 | |||
Consumer Non-Cyclical | 7.02 | |||
Basic Materials | 6.72 | |||
Utilities | 2.71 | |||
Diversified | 1.58 | |||
Short-Term and Other Net Assets | 0.32 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
Samsung Electronics Co. Ltd. (South Korea) | 5.89 | % | ||
Taiwan Semiconductor Manufacturing Co. Ltd. (Taiwan) | 3.38 | |||
China Mobile Ltd. (China) | 3.14 | |||
China Construction Bank Corp. Class H (China) | 2.32 | |||
Industrial and Commercial Bank of China Ltd. Class H (China) | 1.70 | |||
CNOOC Ltd. (China) | 1.68 | |||
Hyundai Motor Co. (South Korea) | 1.60 | |||
Tencent Holdings Ltd. (China) | 1.52 | |||
Hon Hai Precision Industry Co. Ltd. (Taiwan) | 1.40 | |||
Bank of China Ltd. Class H (China) | 1.33 | |||
|
| |||
TOTAL | 23.96 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI Emerging Markets Asia Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Emerging Markets Asia IndexSM (the “Index”). The Index is designed to measure the equity market performance in the emerging market countries of Asia. 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 February 8, 2012 (inception date of the Fund) through August 31, 2012 (the “reporting period”), the total return for the Fund was (7.52)%, net of fees, while the total return for the Index was (7.22)%.
As represented by the Index, emerging markets in Asia declined for the reporting period. One factor contributing to the decline in Asian emerging markets was the continuing sovereign debt crisis in Europe, which had a negative impact on financial institutions around the globe and led to a meaningful slowdown in European economic growth, including recessions in the most fiscally challenged countries in the region. Exports to developed regions of the world are an important component of emerging economies in Asia. For example, exports comprise approximately 40% of the Chinese economy, and the European Union is its largest trading partner. A marked decline in exports to Europe weighed on economic activity in many Asian emerging markets, as did falling commodity prices.
In addition, central banks in many Asian countries — including China, South Korea, and India, which comprise three of the larger country weightings in the Index — raised short-term interest rates in 2011 to curb rising inflation, and the higher borrowing costs put downward pressure on their respective domestic economies in 2012. The inflation-fighting efforts of these central banks were generally successful, though, leading many of them to begin lowering short-term rates by the end of the reporting period.
Another factor contributing to the Index’s overall decline was a stronger U.S. dollar, which lowered international equity returns for U.S. investors (in local currency terms, the Index declined 4.74% for the reporting period). Among the largest countries represented in the Index, the U.S. dollar appreciated by 1% versus the Chinese yuan, 1.5% versus the South Korean won and Taiwan dollar, and 13% versus the Indian rupee for the reporting period.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 9 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS ASIA INDEX FUND
China, the Index’s largest country weighting, posted a double-digit decline for the reporting period. China’s economy grew by 7.6% for the 12 months ended June 30, 2012, the country’s slowest growth rate since the global downturn in 2008. India was the only other country in the Index to decline by more than 10% for the reporting period. India’s economy grew at a 5.5% rate for the 12 months ended June 30, 2012, its slowest level of growth since 2005. Stock markets in the Philippines, Thailand, and Malaysia posted positive returns for the reporting period as these countries benefited from greater trade activity with the U.S. versus the European Union.
From a sector perspective, six of the ten sectors in the Index declined for the reporting period. The energy and materials sectors suffered the largest losses, falling by more than 15% amid sharply lower commodity prices. The financials sector, the largest sector weighting in the Index during the reporting period, also posted a double-digit decline. On the positive side, the more defensive segments of the market — including consumer staples, health care, telecommunication services, and utilities — gained ground for the reporting period.
10 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI EMERGING MARKETS CONSUMER DISCRETIONARY SECTOR INDEX FUND
Performance as of August 31, 2012
Cumulative Total Returns | ||||||||||
Inception to 8/31/12 | ||||||||||
NAV | MARKET | INDEX | ||||||||
(5.68)% | (4.44)% | (5.16)% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
“Cumulative Total Returns” represent the total change in value of an investment over the period indicated and are calculated from an inception date of 2/8/12.
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 (2/9/12), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 11 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS CONSUMER DISCRETIONARY SECTOR INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector* | Percentage of Net Assets |
Auto Manufacturers | 29.71 | % | ||
Retail | 26.52 | |||
Media | 14.13 | |||
Auto Parts & Equipment | 11.25 | |||
Lodging | 4.04 | |||
Electrical Components & Equipment | 2.36 | |||
Home Furnishings | 2.09 | |||
Leisure Time | 1.94 | |||
Real Estate | 1.66 | |||
Holding Companies—Diversified | 1.55 | |||
Textiles | 1.35 | |||
Other** | 3.10 | |||
Short-Term and Other Net Assets | 0.30 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
Hyundai Motor Co. (South Korea) | 11.77 | % | ||
Naspers Ltd. Class N (South Africa) | 8.28 | |||
Hyundai Mobis Co. Ltd. (South Korea) | 6.68 | |||
Kia Motors Corp. (South Korea) | 6.25 | |||
PT Astra International Tbk (Indonesia) | 5.14 | |||
Grupo Televisa SAB CPO (Mexico) | 4.37 | |||
Belle International Holdings Ltd. (China) | 3.05 | |||
LG Electronics Inc. (South Korea) | 2.36 | |||
Tata Motors Ltd. (India) | 2.24 | |||
Genting Bhd (Malaysia) | 2.12 | |||
|
| |||
TOTAL | 52.26 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
** | Other includes sectors which individually represent less than 1% of net assets. |
The iShares MSCI Emerging Markets Consumer Discretionary Sector Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Emerging Markets Consumer Discretionary IndexSM (the “Index”). The Index is designed to measure the combined equity market performance of the consumer discretionary sector of emerging market countries. 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 February 8, 2012 (inception date of the Fund) through August 31, 2012 (the “reporting period”), the total return for the Fund was (5.68)%, net of fees, while the total return for the Index was (5.16)%.
As represented by the Index, consumer discretionary stocks in emerging markets declined for the reporting period, reflecting a slowdown in growth rates in many emerging economies. Consumer discretionary stocks are typically sensitive to economic fluctuations and tend to move in response to the ups and downs of the economy. During the reporting period, countries such as China, India, and Brazil — among the most rapidly growing economies in the world over the past decade — saw their economic growth rates fall, mirroring a broad economic slowdown around the globe. In addition, central banks in many emerging markets raised short-term interest rates in 2011 to curb rising inflation, and this had a negative impact on domestic economic growth in 2012. For example, central banks in China, South Korea, and India — three of the larger Asian country weightings in the Index as of August 31, 2012 — all raised interest rates in 2011 to combat runaway inflation. Although these three central banks were successful in lowering the inflation rate, higher borrowing costs put downward pressure on their respective domestic economies.
Another factor contributing to the Index’s overall decline was a stronger U.S. dollar, which lowered international equity returns for U.S. investors. Among the largest countries represented in the Index, the U.S. dollar appreciated by 1% versus the Chinese yuan, 1.55% against the South Korean won, 10% versus the South African rand, 13% against the Indian rupee, and 18% versus the Brazilian real for the reporting period.
12 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS CONSUMER DISCRETIONARY SECTOR INDEX FUND
On a regional basis, consumer discretionary stocks in China, Brazil, and Poland suffered the most significant declines, falling by more than 20% for the reporting period. China’s economy grew by 7.6% for the 12 months ended June 30, 2012, the country’s slowest growth rate since the global downturn in 2008, while Brazil’s economy grew by just 0.5% for the 12 months ended June 30, 2012. Consumer discretionary stocks in Thailand and South Africa posted the best returns, gaining more than 15% for the reporting period. Consumer discretionary stocks in South Korea, which comprised more than one-third of the Index as of the end of the reporting period, advanced by 1% overall.
Within the consumer discretionary sector, the best performers included leisure products makers, distributors, and household appliance manufacturers, all of which posted double-digit gains for the reporting period. Media companies, including broadcasters and cable and satellite television operators, also posted strong returns. On the downside, computer and electronics retailers, homebuilders, and specialty retail stores posted the largest declines for the reporting period.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 13 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI EMERGING MARKETS ENERGY SECTOR CAPPED INDEX FUND
Performance as of August 31, 2012
Cumulative Total Returns | ||||||||||
Inception to 8/31/12 | ||||||||||
NAV | MARKET | INDEX | ||||||||
(19.71)% | (19.22)% | (18.98)% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
“Cumulative Total Returns” represent the total change in value of an investment over the period indicated and are calculated from an inception date of 2/8/12.
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 ma rket 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 (2/9/12), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
14 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS ENERGY SECTOR CAPPED INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector | Percentage of Net Assets |
Oil & Gas | 79.69 | % | ||
Coal | 7.82 | |||
Chemicals | 6.58 | |||
Oil & Gas Services | 1.26 | |||
Other* | 1.66 | |||
Short-Term and Other Net Assets | 2.99 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
* | Other includes sectors which individually represent less than 1% of net assets. |
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
Gazprom OAO (Russia) | 10.88 | % | ||
Petroleo Brasileiro SA (Preferred) (Brazil) | 8.81 | |||
CNOOC Ltd. (China) | 6.98 | |||
Petroleo Brasileiro SA (Brazil) | 6.22 | |||
LUKOIL OAO (Russia) | 5.86 | |||
PetroChina Co. Ltd. Class H (China) | 5.16 | |||
Sasol Ltd. (South Africa) | 4.50 | |||
Reliance Industries Ltd. (India) | 4.18 | |||
China Petroleum & Chemical Corp. Class H (China) | 3.66 | |||
Ecopetrol SA SP ADR (Colombia) | 3.11 | |||
|
| |||
TOTAL | 59.36 | % | ||
|
|
The iShares MSCI Emerging Markets Energy Sector Capped Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Emerging Markets Energy 25/50 IndexSM (the “Index”). The Index is designed to measure the performance of energy-related companies in emerging market countries. A capping methodology is applied that limits the weight of any single component to a maximum of 25% of 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 period from February 8, 2012 (inception date of the Fund) through August 31, 2012 (the “reporting period”), the total return for the Fund was (19.71)%, net of fees, while the total return for the Index was (18.98)%.
As represented by the Index, energy stocks in emerging markets posted double-digit declines for the reporting period. The decline in energy stocks reflected a broad global economic slowdown, which led to reduced demand for commodities in general. One factor behind this trend was the continuing sovereign debt crisis in Europe, which had a negative impact on financial institutions around the globe and led to a meaningful slowdown in European economic growth, including recessions in the most fiscally challenged countries in the region. The weaker economic environment in Europe weighed on Continental demand for energy. Decelerating economic growth in the U.S. and China also contributed to reduced global demand for energy.
Nonetheless, energy prices held up reasonably well during the reporting period. The price of oil declined by just 2%, falling from $98.80 per barrel at the beginning of the reporting period to $96.50 as of August 31, 2012, while natural gas prices increased by nearly 10%, rising from $2.48 per million British thermal units (“BTUs”) at the beginning of the period to $2.72 as of August 31, 2012. However, both oil and natural gas prices experienced significant volatility during the reporting period. Oil prices peaked in early March of 2012 at $109 per barrel, then dipped as low as $77 per barrel in late June of 2012 before rebounding over the last two months of the reporting period. Meanwhile, natural gas followed an opposite pattern, falling to $1.82 per million BTUs in mid-April of 2012, then surging to $3.20 per million BTUs in late July of 2012 before falling back over the last month of the reporting period.
Another factor contributing to the Index’s overall decline was a stronger U.S. dollar, which lowered international equity returns for U.S. investors. Among the largest countries represented in the Index, the U.S. dollar appreciated by 1% versus the Chinese yuan, 8.5% against the Russian ruble, 13% versus the Indian rupee, and 18% against the Brazilian real for the reporting period.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 15 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS ENERGY SECTOR CAPPED INDEX FUND
Other factors influencing the performance of energy stocks during the reporting period included a relatively mild winter and attractive dividend payouts. Warmer-than-normal temperatures and below-average snowfall across the Midwest and Northeast regions of the U.S. contributed to lower demand for energy.
16 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI EMERGING MARKETS GROWTH INDEX FUND
Performance as of August 31, 2012
Cumulative Total Returns | ||||||||||
Inception to 8/31/12 | ||||||||||
NAV | MARKET | INDEX | ||||||||
(5.90)% | (6.34)% | (5.45)% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
“Cumulative Total Returns” represent the total change in value of an investment over the period indicated and are calculated from an inception date of 2/8/12.
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 (2/9/12), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 17 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS GROWTH INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector* | Percentage of Net Assets |
Financial | 20.63 | % | ||
Consumer Non-Cyclical | 15.67 | |||
Technology | 13.42 | |||
Consumer Cyclical | 12.63 | |||
Communications | 11.62 | |||
Industrial | 7.73 | |||
Energy | 7.42 | |||
Basic Materials | 6.47 | |||
Utilities | 3.14 | |||
Diversified | 0.98 | |||
Short-Term and Other Net Assets | 0.29 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
Samsung Electronics Co. Ltd. (South Korea) | 6.90 | % | ||
Taiwan Semiconductor Manufacturing Co. Ltd. (Taiwan) | 3.96 | |||
CNOOC Ltd. (China) | 1.93 | |||
MTN Group Ltd. (South Africa) | 1.83 | |||
Tencent Holdings Ltd. (China) | 1.81 | |||
Banco Bradesco SA (Preferred) (Brazil) | 1.80 | |||
Companhia de Bebidas das Americas (Preferred) (Brazil) | 1.65 | |||
Hon Hai Precision Industry Co. Ltd. (Taiwan) | 1.63 | |||
Sberbank of Russia (Russia) | 1.48 | |||
America Movil SAB de CV Series L (Mexico) | 1.45 | |||
|
| |||
TOTAL | 24.44 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI Emerging Markets Growth Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Emerging Markets Growth IndexSM (the “Index”). The Index generally represents approximately 50% of the MSCI Emerging Markets Index and consists of those securities classified by the Index provider as most representing the growth style. 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 February 8, 2012 (inception date of the Fund) through August 31, 2012 (the “reporting period”), the total return for the Fund was (5.90)%, net of fees, while the total return for the Index was (5.45)%.
As represented by the Index, growth stocks in emerging markets declined for the reporting period, reflecting a slowdown in growth rates in many emerging economies. Larger countries such as China, India, and Brazil — among the most rapidly growing economies in the world over the past decade — saw their economic growth rates fall during the reporting period. One factor behind this trend was the continuing sovereign debt crisis in Europe, which had a negative impact on financial institutions around the globe and led to a meaningful slowdown in European economic growth, including recessions in the most fiscally challenged countries in the region. Exports to developed regions of the world are an important component of emerging economies. For example, exports comprise approximately 40% of the Chinese economy, with the European Union as is its largest trading partner. A marked decline in exports to Europe weighed on economic activity in many emerging markets.
In addition, central banks in many emerging markets raised short-term interest rates in 2011 to curb rising inflation, which had a negative impact on domestic economic growth in 2012. Central banks in China, South Korea, and Brazil — the three largest country weightings in the Index as of August 31, 2012 — all raised interest rates in 2011 to combat runaway inflation. Although these three central banks were successful in lowering the inflation rate, higher borrowing costs put downward pressure on their respective domestic economies. By the spring of 2012, all three central banks began lowering short-term rates.
18 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS GROWTH INDEX FUND
The primary factor behind the Index’s overall decline, however, was a stronger U.S. dollar, which lowered international equity returns for U.S. investors (in local currency terms, the Index gained 0.01% for the reporting period). Among the largest countries represented in the Index, the U.S. dollar appreciated by 1% versus the Chinese yuan, 1.5% versus the South Korean won and Taiwan dollar, 10% against the South African rand, 13% versus the Indian rupee, and 18% against the Brazilian real for the reporting period.
On a regional basis, the Latin American growth stocks in the Index fell the most during the reporting period, declining by 12% as a group. Growth stocks in Brazil and Peru led the decline in Latin America. Close proximity to the troubled eurozone contributed to the decline in Eastern European growth stocks, most notably in Hungary and Russia. Growth stocks in the Middle East and Asia/Pacific regions held up best, led by positive returns in Egypt, Turkey, and the Philippines.
From a sector perspective, six of the ten sectors in the Index declined for the reporting period. The energy and materials sectors posted the largest declines as a substantial drop in commodity prices adversely impacted these sectors of the Index. Financials, the largest sector weighting in the Index during the reporting period, also declined. On the positive side, the health care and consumer staples sectors — considered to be defensive sectors of the market — generated the best returns.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 19 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI EMERGING MARKETS MINIMUM VOLATILITY INDEX FUND
Performance as of August 31, 2012
Cumulative Total Returns | ||||||||||
Inception to 8/31/12 | ||||||||||
NAV | MARKET | INDEX | ||||||||
15.16% | 15.58% | 15.60% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
“Cumulative Total Returns” represent the total change in value of an investment over the period indicated and are calculated from an inception date of 10/18/11.
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 (10/20/11), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
20 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS MINIMUM VOLATILITY INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector | Percentage of Net Assets |
Financial | 23.66 | % | ||
Consumer Non-Cyclical | 18.76 | |||
Communications | 16.29 | |||
Consumer Cyclical | 8.51 | |||
Utilities | 8.02 | |||
Energy | 7.11 | |||
Industrial | 5.69 | |||
Technology | 5.14 | |||
Basic Materials | 4.12 | |||
Diversified | 2.12 | |||
Short-Term and Other Net Assets | 0.58 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
PT Unilever Indonesia Tbk (Indonesia) | 1.76 | % | ||
Maxis Communications Bhd (Malaysia) | 1.75 | |||
Advanced Information Service PCL NVDR (Thailand) | 1.70 | |||
Taiwan Mobile Co. Ltd. (Taiwan) | 1.54 | |||
LATAM Airlines Group SA (Chile) | 1.51 | |||
Public Bank Bhd Foreign (Malaysia) | 1.48 | |||
Ecopetrol SA (Colombia) | 1.38 | |||
CP All PCL NVDR (Thailand) | 1.37 | |||
Far EasTone Telecommunications Co. Ltd. (Taiwan) | 1.31 | |||
Credicorp Ltd. (Peru) | 1.29 | |||
|
| |||
TOTAL | 15.09 | % | ||
|
|
The iShares MSCI Emerging Markets Minimum Volatility Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Emerging Markets Minimum Volatility Index (the “Index”). The Index measures the performance of equity securities in global emerging markets that have lower absolute volatility. 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 October 18, 2011 (inception date of the Fund) through August 31, 2012 (the “reporting period”), the total return for the Fund was 15.16%, net of fees, while the total return for the Index was 15.60%.
As represented by the Index, lower-volatility stocks in emerging markets posted double-digit gains for the reporting period. Shortly after the beginning of the reporting period, the Index began a broad rally as signs of improving global economic growth boosted investor confidence. The rally in low-volatility emerging markets stocks lasted through April 2012. The Index lost some of its previous gains in May 2012 as global economic activity decelerated, putting downward pressure on emerging markets as demand for their exports waned. In particular, the continuing sovereign debt crisis in Europe led to a meaningful slowdown in European economic growth, including recessions in the most fiscally challenged countries in the region. However, low-volatility emerging markets stocks bottomed in June 2012 and moved gradually higher over the last three months of the reporting period as investors grew more comfortable with the global economic outlook.
Currency fluctuations had a negative impact on Index performance, including a stronger U.S. dollar, which lowered international equity returns for U.S. investors (in local currency terms, the Index returned 19.21% for the reporting period). China, Taiwan, and Brazil were among the larger country weightings in the Index. Although the U.S. dollar was largely unchanged against the Chinese yuan and Taiwan dollar during the reporting period, the U.S. dollar appreciated by nearly 16% versus the Brazilian real for the reporting period.
On a regional basis, low-volatility stocks in the Asia/Pacific region (comprising approximately two-thirds of the Index as of August 31, 2012) generated the best returns for the reporting period, gaining about 16%. Strong returns from smaller countries in the region helped offset weaker performance from China and Taiwan, the two largest country weightings in the Index. Low-volatility stocks in Europe, the Middle East, and Africa also posted double-digit gains for the reporting period. The laggards were low-volatility stocks in Latin America, which returned about 6% overall. A decline in Brazilian stocks contributed to the weaker returns in Latin America.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 21 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI EMERGING MARKETS SMALL CAP INDEX FUND
Performance as of August 31, 2012
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||
Year Ended 8/31/12 | Inception to 8/31/12 | Inception to 8/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(9.98)% | (11.19)% | (8.57)% | (11.19)% | (11.24)% | (9.79)% | (11.65)% | (11.70)% | (10.17)% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
Total returns for the period since inception are calculated from the inception date of the Fund (8/16/11). “Average Annual Total Returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (8/18/11), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
22 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS SMALL CAP INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector* | Percentage of Net Assets |
Financial | 20.16 | % | ||
Industrial | 19.46 | |||
Consumer Cyclical | 15.42 | |||
Consumer Non-Cyclical | 15.35 | |||
Basic Materials | 7.98 | |||
Technology | 7.94 | |||
Communications | 5.90 | |||
Utilities | 3.09 | |||
Energy | 2.19 | |||
Diversified | 1.97 | |||
Short-Term and Other Net Assets | 0.54 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
Cheil Worldwide Inc. (South Korea) | 0.46 | % | ||
Tongaat Hulett Ltd. (South Africa) | 0.44 | |||
KLCC Property Holdings Bhd (Malaysia) | 0.41 | |||
Hotel Shilla Co. Ltd. (South Korea) | 0.40 | |||
Brait SE (South Africa) | 0.39 | |||
Nampak Ltd. (South Africa) | 0.37 | |||
PT Lippo Karawaci Tbk (Indonesia) | 0.36 | |||
Acucap Properties Ltd. (South Africa) | 0.36 | |||
Grupo Aeroportuario del Sureste SAB de CV Series B (Mexico) | 0.36 | |||
Bumrungrad Hospital PCL NVDR (Thailand) | 0.35 | |||
|
| |||
TOTAL | 3.90 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI Emerging Markets Small Cap Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Emerging Markets Small Cap IndexSM (the “Index”). The Index measures the performance of equity securities of small capitalization companies, whose market capitalization represents the bottom 14% of companies in emerging market countries, as measured by market capitalization. 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, 2012 (the “reporting period”), the total return for the Fund was (9.98)%, net of fees, while the total return for the Index was (8.57)%.
As represented by the Index, small-cap stocks in emerging markets declined for the reporting period, reflecting a slowdown in growth rates in many emerging economies. Larger countries such as China, India, and Brazil — among the most rapidly growing economies in the world over the past decade — saw their economic growth rates fall during the reporting period. One key factor behind this trend was the continuing sovereign debt crisis in Europe, which had a negative impact on financial institutions around the globe and led to a meaningful slowdown in European economic growth, including recessions in the most fiscally challenged countries in the region. Exports to developed regions of the world are an important component of emerging economies — for example, exports comprise approximately 40% of the Chinese economy, and the European Union is its largest trading partner. A marked decline in exports to Europe weighed on economic activity in many emerging markets.
In addition, central banks in many emerging markets raised short-term interest rates in 2011 to curb rising inflation, and this had a negative impact on domestic economic growth in 2012. Central banks in China, South Korea, and India — three of the five largest country weightings in the Index as of August 31, 2012 — all raised interest rates in 2011 to combat runaway inflation. Although these three central banks were successful in lowering the inflation rate, higher borrowing costs put downward pressure on their respective domestic economies. By the spring of 2012, all three central banks began lowering short-term rates.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 23 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS SMALL CAP INDEX FUND
Another factor behind the Index’s overall decline was a stronger U.S. dollar, which lowered international equity returns for U.S. investors (in local currency terms, the Index declined 1.04% for the reporting period). Although the U.S. dollar was largely unchanged versus the Chinese yuan, it appreciated by 3% versus the Taiwan dollar and 6.5% versus the South Korean won. Furthermore, the U.S. dollar rallied by more than 20% against the Brazilian real, Indian rupee, and South African rand.
On a regional basis, small-cap stocks in Eastern Europe suffered the most significant declines for the reporting period. Close proximity to the troubled eurozone contributed to the decline in Eastern European markets, most notably in Hungary, Russia, and the Czech Republic. Small-cap stocks in the Asia/Pacific region also struggled as positive returns in the Philippines, Thailand, and Malaysia were more than offset by sharp declines in the two largest economies in the region — India and China. Small-cap stocks in Latin America held up best, led by Mexico and Brazil.
From a sector perspective, nine of the ten sectors in the Index declined for the reporting period. The most economically sensitive sectors — energy, materials, and industrials — declined the most for the reporting period. In particular, the energy and materials sectors were adversely impacted by a substantial decline in commodity prices. The telecommunication services and utilities sectors of the Index also posted double-digit declines for the reporting period. On the positive side, the only sector of the Index to advance was consumer staples, which is generally considered to be a defensive sector of the market.
24 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI EMERGING MARKETS VALUE INDEX FUND
Performance as of August 31, 2012
Cumulative Total Returns | ||||||||||
Inception to 8/31/12 | ||||||||||
NAV | MARKET | INDEX | ||||||||
(12.41)% | (11.30)% | (12.14)% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
“Cumulative Total Returns” represent the total change in value of an investment over the period indicated and are calculated from an inception date of 2/8/12.
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 (2/9/12), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 25 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS VALUE INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector* | Percentage of Net Assets |
Financial | 28.36 | % | ||
Energy | 16.82 | |||
Basic Materials | 15.15 | |||
Communications | 10.77 | |||
Industrial | 5.99 | |||
Technology | 5.77 | |||
Consumer Cyclical | 4.72 | |||
Utilities | 4.29 | |||
Diversified | 3.92 | |||
Consumer Non-Cyclical | 3.61 | |||
Short-Term and Other Net Assets | 0.60 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
China Mobile Ltd. (China) | 3.83 | % | ||
Gazprom OAO (Russia) | 3.07 | |||
China Construction Bank Corp. Class H (China) | 2.75 | |||
Petroleo Brasileiro SA (Preferred) (Brazil) | 2.57 | |||
Industrial and Commercial Bank of China Ltd. Class H (China) | 2.09 | |||
Petroleo Brasileiro SA (Brazil) | 1.83 | |||
LUKOIL OAO (Russia) | 1.75 | |||
Bank of China Ltd. Class H (China) | 1.64 | |||
America Movil SAB de CV Series L (Mexico) | 1.50 | |||
PetroChina Co. Ltd. Class H (China) | 1.49 | |||
|
| |||
TOTAL | 22.52 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI Emerging Markets Value Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Emerging Markets Value IndexSM (the “Index”). The Index generally represents approximately 50% of the MSCI Emerging Markets Index and consists of those securities classified by the Index provider as most representing the value style. 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 February 8, 2012 (inception date of the Fund) through August 31, 2012 (the “reporting period”), the total return for the Fund was (12.41)%, net of fees, while the total return for the Index was (12.14)%.
As represented by the Index, value stocks in emerging markets declined for the reporting period, reflecting a slowdown in growth rates in many emerging economies. Countries such as China, India, and Brazil — among the most rapidly growing economies in the world over the past decade — saw their economic growth rates fall during the reporting period. One factor behind this trend was the continuing sovereign debt crisis in Europe, which had a negative impact on financial institutions around the globe and led to a meaningful slowdown in European economic growth, including recessions in the most fiscally challenged countries in the region. Exports to developed regions of the world are an important component of emerging economies. For example, exports comprise approximately 40% of the Chinese economy, and the European Union is its largest trading partner. A marked decline in exports to Europe weighed on economic activity in many emerging markets.
In addition, central banks in many emerging markets raised short-term interest rates in 2011 to curb rising inflation, which had a negative impact on domestic economic growth in 2012. Central banks in China, South Korea, and Brazil — the three largest country weightings in the Index as of August 31, 2012 — all raised interest rates in 2011 to combat runaway inflation. Although these three central banks were successful in lowering the inflation rate, higher borrowing costs put downward pressure on their respective domestic economies. By the spring of 2012, all three central banks began lowering short-term rates.
26 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS VALUE INDEX FUND
Another factor contributing to the Index’s overall decline was a stronger U.S. dollar, which lowered international equity returns for U.S. investors (in local currency terms, the Index fell 7.05% for the reporting period). Among the larger countries represented in the Index, the U.S. dollar appreciated by 1% versus the Chinese yuan, 1.5% versus the South Korean won and Taiwan dollar, 10% against the South African rand, 13% versus the Indian rupee, and 18% against the Brazilian real for the reporting period.
On a regional basis, the Latin American value stocks in the Index fell the most during the reporting period, declining by 18% as a group. Value stocks in Brazil, which fell by more than 25% for the reporting period, more than offset positive returns in Colombia and Mexico. Returns for value stocks in the Eastern Europe and Asia/Pacific regions were in line with the performance of the overall Index, while value stocks in the Middle East held up best, led by positive returns in Egypt and Turkey.
From a sector perspective, eight of the ten sectors in the Index declined for the reporting period. The energy and materials sectors posted the largest losses, declining by more than 20% as a substantial drop in commodity prices adversely impacted these sectors of the Index. Financials, the largest sector weighting in the Index during the reporting period, also declined. The only two sectors of the Index to generate positive returns for the reporting period were telecommunication services and consumer staples.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 27 |
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, 2012 to August 31, 2012.
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 (3/1/12) | Ending Account Value (8/31/12) | Annualized Expense Ratio | Expenses Paid During Period a | ||||||||||||
BRIC | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 827.40 | 0.69 | % | $ | 3.17 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,021.70 | 0.69 | 3.51 | ||||||||||||
Emerging Markets Asia | ||||||||||||||||
Actual | 1,000.00 | 906.70 | 0.49 | 2.35 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.70 | 0.49 | 2.49 | ||||||||||||
Emerging Markets Consumer Discretionary Sector | ||||||||||||||||
Actual | 1,000.00 | 931.50 | 0.68 | 3.30 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,021.70 | 0.68 | 3.46 | ||||||||||||
Emerging Markets Energy Sector Capped | ||||||||||||||||
Actual | 1,000.00 | 798.80 | 0.68 | 3.07 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,021.70 | 0.68 | 3.46 |
28 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Shareholder Expenses (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Index Fund | Beginning Account Value (3/1/12) | Ending Account Value (8/31/12) | Annualized Expense Ratio | Expenses Paid During Period a | ||||||||||||
Emerging Markets Growth | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 916.80 | 0.49 | % | $ | 2.36 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.70 | 0.49 | 2.49 | ||||||||||||
Emerging Markets Minimum Volatility | ||||||||||||||||
Actual | 1,000.00 | 990.70 | 0.25 | 1.25 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,023.90 | 0.25 | 1.27 | ||||||||||||
Emerging Markets Small Cap | ||||||||||||||||
Actual | 1,000.00 | 907.50 | 0.68 | 3.26 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,021.70 | 0.68 | 3.46 | ||||||||||||
Emerging Markets Value | ||||||||||||||||
Actual | 1,000.00 | 868.70 | 0.49 | 2.30 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.70 | 0.49 | 2.49 |
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 (366 days). |
SHAREHOLDER EXPENSES | 29 |
Table of Contents
Consolidated Schedule of Investments
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 82.70% |
| |||||||
BRAZIL — 14.28% |
| |||||||
ALL—America Latina Logistica SA | 192,000 | $ | 845,736 | |||||
Amil Participacoes SA | 76,800 | 780,388 | ||||||
Anhanguera Educacional Participacoes SA | 38,400 | 572,221 | ||||||
Banco do Brasil SA | 275,089 | 3,145,347 | ||||||
Banco Santander (Brasil) SA Units | 345,637 | 2,659,664 | ||||||
BM&F Bovespa SA | 844,869 | 4,480,019 | ||||||
BR Malls Participacoes SA | 192,000 | 2,396,093 | ||||||
BR Properties SA | 76,800 | 935,708 | ||||||
BRF—Brasil Foods SA | 307,200 | 4,941,445 | ||||||
CCR SA | 422,400 | 3,800,412 | ||||||
Centrais Eletricas Brasileiras SA | 115,200 | 739,853 | ||||||
CETIP SA — Mercados Organizados | 77,278 | 994,898 | ||||||
Cielo SA | 143,220 | 4,239,448 | ||||||
Companhia de Saneamento Basico do Estado de Sao Paulo | 38,400 | 1,625,176 | ||||||
Companhia de Saneamento de Minas Gerais SA | 38,400 | 918,660 | ||||||
Companhia Hering SA | 76,800 | 1,680,107 | ||||||
Companhia Siderurgica Nacional SA | 345,600 | 1,704,730 | ||||||
Cosan SA Industria e Comercio | 38,400 | 640,221 | ||||||
CPFL Energia SA | 115,200 | 1,221,723 | ||||||
Cyrela Brazil Realty SA | 115,200 | 938,170 | ||||||
Diagnosticos da America SA | 115,200 | 727,920 | ||||||
Duratex SA | 115,200 | 693,825 | ||||||
EcoRodovias Infraestrutura e Logistica SA | 76,800 | 638,327 | ||||||
EDP Energias do Brasil SA | 115,200 | 737,012 | ||||||
Embraer SA | 268,800 | 1,856,262 | ||||||
Fibria Celulose SAa | 115,241 | 897,576 | ||||||
Hypermarcas SAa | 153,600 | 987,228 | ||||||
JBS SAa | 192,052 | 546,609 | ||||||
Light SA | 38,400 | 466,338 | ||||||
Localiza Rent A Car SA | 76,800 | 1,356,208 | ||||||
Lojas Renner SA | 38,400 | 1,267,562 | ||||||
MMX Mineracao e Metalicos SAa | 76,800 | 206,462 | ||||||
MPX Energia SAa | 115,200 | 715,987 | ||||||
MRV Engenharia e Participacoes SA | 153,600 | 892,521 | ||||||
Multiplan Empreendimentos Imobiliarios SA | 38,400 | 983,061 | ||||||
Multiplus SA | 38,400 | 818,271 | ||||||
Natura Cosmeticos SA | 76,800 | 1,928,240 | ||||||
Obrascon Huarte Lain Brasil SA | 76,800 | 744,399 |
Security | Shares | Value | ||||||
Odontoprev SA | 115,200 | $ | 625,068 | |||||
OGX Petroleo e Gas Participacoes SAa | 576,000 | 1,789,967 | ||||||
Oi SA | 115,224 | 520,051 | ||||||
PDG Realty SA Empreendimentos e Participacoes | 499,200 | 972,643 | ||||||
Petroleo Brasileiro SA | 1,382,400 | 14,524,303 | ||||||
Porto Seguro SA | 38,400 | 354,963 | ||||||
Raia Drogasil SA | 76,850 | 813,875 | ||||||
Redecard SA | 153,600 | 2,541,942 | ||||||
Souza Cruz SA | 192,000 | 2,576,984 | ||||||
Sul America SA Units | 39,144 | 278,428 | ||||||
TIM Participacoes SA | 384,069 | 1,528,850 | ||||||
Totvs SA | 38,400 | 747,240 | ||||||
Tractebel Energia SA | 76,800 | 1,278,927 | ||||||
Ultrapar Participacoes SA | 153,600 | 3,288,236 | ||||||
Vale SA | 614,400 | 10,237,474 | ||||||
|
| |||||||
97,802,778 | ||||||||
CHINA — 40.01% |
| |||||||
Agile Property Holdings Ltd.b | 768,000 | 881,251 | ||||||
Agricultural Bank of China Ltd. Class H | 9,984,000 | 3,681,449 | ||||||
Air China Ltd. Class H | 768,000 | 462,409 | ||||||
Aluminum Corp. of China Ltd. Class Ha,b | 1,536,000 | 588,161 | ||||||
Angang Steel Co. Ltd. Class Ha,b | 768,000 | 375,274 | ||||||
Anhui Conch Cement Co. Ltd. Class H | 576,000 | 1,437,726 | ||||||
Anta Sports Products Ltd.b | 384,040 | 227,267 | ||||||
AviChina Industry & Technology Co. | 1,536,000 | 554,495 | ||||||
Bank of China Ltd. Class H | 34,944,000 | 12,704,861 | ||||||
Bank of Communications Co. Ltd. Class H | 3,456,200 | �� | 2,259,202 | |||||
BBMG Corp. Class H | 576,000 | 350,520 | ||||||
Beijing Capital International Airport Co. Ltd. Class H | 768,000 | 524,790 | ||||||
Beijing Enterprises Holdings Ltd.b | 192,000 | 1,269,892 | ||||||
Belle International Holdings Ltd. | 2,304,000 | 4,158,711 | ||||||
Bosideng International Holdings Ltd. | 1,536,000 | 423,792 | ||||||
Brilliance China Automotive Holdings Ltd.a | 768,000 | 750,548 | ||||||
BYD Co. Ltd. Class Ha,b | 192,000 | 334,677 | ||||||
China Agri-Industries Holdings Ltd. | 768,000 | 380,225 | ||||||
China BlueChemical Ltd. Class H | 768,000 | 442,606 | ||||||
China CITIC Bank Corp. Ltd. Class H | 3,456,000 | 1,648,632 | ||||||
China Coal Energy Co. Class H | 1,920,000 | 1,599,123 |
30 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI BRIC INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
China Communications Construction Co. Ltd. Class H | 1,920,000 | $ | 1,475,352 | |||||
China Communications Services Corp. Ltd. Class H | 918,800 | 510,560 | ||||||
China Construction Bank Corp. Class H | 33,408,370 | 21,967,147 | ||||||
China COSCO Holdings Co. Ltd. Class Ha,b | 1,152,000 | 436,665 | ||||||
China Everbright Ltd. | 404,000 | 491,181 | ||||||
China Gas Holdings Ltd. | 1,556,000 | 850,597 | ||||||
China International Marine Containers (Group) Co. Ltd. Class B | 312,800 | 394,819 | ||||||
China Life Insurance Co. Ltd. Class H | 3,456,000 | 9,245,705 | ||||||
China Longyuan Power Group Corp. Ltd. Class H | 1,152,000 | 747,083 | ||||||
China Mengniu Dairy Co. Ltd.b | 768,000 | 2,312,045 | ||||||
China Merchants Bank Co. Ltd. Class H | 1,728,297 | 2,981,417 | ||||||
China Merchants Holdings (International) Co. Ltd.b | 524,000 | 1,503,175 | ||||||
China Minsheng Banking Corp. Ltd. Class H | 2,496,000 | 2,033,808 | ||||||
China Mobile Ltd. | 2,738,000 | 29,228,867 | ||||||
China National Building Material Co. Ltd. Class Hb | 1,536,000 | 1,437,726 | ||||||
China Oilfield Services Ltd. Class H | 768,000 | 1,225,829 | ||||||
China Overseas Land & Investment Ltd. | 1,536,800 | 3,471,360 | ||||||
China Pacific Insurance (Group) Co. Ltd. Class H | 921,600 | 2,732,867 | ||||||
China Petroleum & Chemical Corp. Class H | 7,680,000 | 7,228,235 | ||||||
China Railway Construction Corp. Ltd. Class H | 960,000 | 725,299 | ||||||
China Railway Group Ltd. Class H | 1,920,000 | 722,824 | ||||||
China Resources Cement Holdings Ltd.b | 768,000 | 338,638 | ||||||
China Resources Enterprise Ltd.b | 768,000 | 2,282,340 | ||||||
China Resources Land Ltd. | 768,000 | 1,483,273 | ||||||
China Resources Power Holdings Co. Ltd. | 802,200 | 1,714,808 | ||||||
China Rongsheng Heavy Industries Group Holdings Ltd.b | 1,344,000 | 183,676 | ||||||
China Shanshui Cement Group Ltd. | 768,000 | 401,019 | ||||||
China Shenhua Energy Co. Ltd. Class H | 1,536,000 | 5,594,456 | ||||||
China Shipping Container Lines Co. Ltd. Class Ha,b | 1,536,000 | 293,090 |
Security | Shares | Value | ||||||
China Shipping Development Co. Ltd. Class H | 768,000 | $ | 288,139 | |||||
China Southern Airlines Co. Ltd. Class H | 768,000 | 325,766 | ||||||
China State Construction International Holdings Ltd. | 768,000 | 817,880 | ||||||
China Taiping Insurance Holdings Co. Ltd.a | 384,000 | 511,917 | ||||||
China Telecom Corp. Ltd. Class H | 6,912,000 | 3,796,309 | ||||||
China Unicom (Hong Kong) Ltd. | 2,305,900 | 3,650,792 | ||||||
China Vanke Co. Ltd. Class B | 730,001 | 912,942 | ||||||
China Yurun Food Group Ltd.a,b | 768,000 | 469,340 | ||||||
China ZhengTong Auto Services Holdings Ltd.a,b | 384,000 | 229,719 | ||||||
China Zhongwang Holdings Ltd.a | 768,000 | 310,913 | ||||||
Chongqing Rural Commercial Bank Co. Ltd. Class H | 1,152,000 | 472,311 | ||||||
CITIC Pacific Ltd.b | 768,000 | 939,671 | ||||||
CITIC Securities Co. Ltd. Class H | 384,000 | 644,600 | ||||||
CNOOC Ltd. | 8,448,000 | 15,989,253 | ||||||
COSCO Pacific Ltd. | 768,000 | 947,592 | ||||||
Country Garden Holdings Co. Ltd.a | 2,024,356 | 709,911 | ||||||
CSG Holding Co. Ltd. Class B | 391,000 | 240,460 | ||||||
CSR Corp Ltd. Class Hb | 771,000 | 522,863 | ||||||
Dah Chong Hong Holdings Ltd.b | 384,000 | 348,540 | ||||||
Daphne International Holdings Ltd.b | 488,000 | 488,236 | ||||||
Datang International Power Generation Co. Ltd. Class H | 1,536,000 | 514,888 | ||||||
Dongfang Electric Corp. Ltd. Class H | 153,600 | 209,520 | ||||||
Dongfeng Motor Group Co. Ltd. Class H | 1,536,000 | 1,988,260 | ||||||
ENN Energy Holdings Ltd. | 142,000 | 560,219 | ||||||
Evergrande Real Estate Group Ltd.b | 2,304,000 | 879,270 | ||||||
Far East Horizon Ltd.b | 768,000 | 532,711 | ||||||
Fosun International Ltd. | 768,000 | 362,402 | ||||||
Franshion Properties (China) Ltd.b | 1,536,000 | 451,517 | ||||||
GCL-Poly Energy Holdings Ltd.b | 3,456,000 | 530,236 | ||||||
Geely Automobile Holdings Ltd. | 1,920,000 | 616,380 | ||||||
Golden Eagle Retail Group Ltd.b | 384,000 | 704,010 | ||||||
GOME Electrical Appliances Holdings Ltd. | 4,608,400 | 398,083 | ||||||
Great Wall Motor Co. Ltd. Class Hb | 384,000 | 867,388 | ||||||
Guangdong Investment Ltd.b | 1,536,000 | 1,134,734 | ||||||
Guangzhou Automobile Group Co. Ltd. Class H | 1,094,454 | 763,384 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 31 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI BRIC INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Guangzhou R&F Properties Co. Ltd. Class Hb | 460,800 | $ | 532,315 | |||||
Haier Electronics Group Co. Ltd.a | 384,000 | 452,012 | ||||||
Hengan International Group Co. Ltd.b | 384,000 | 3,861,660 | ||||||
Hengdeli Holdings Ltd.b | 1,536,000 | 403,989 | ||||||
Huabao International Holdings Ltd.b | 768,000 | 394,087 | ||||||
Huaneng Power International Inc. Class H | 1,536,000 | 1,059,481 | ||||||
Industrial and Commercial Bank of China Ltd. Class H | 30,336,050 | 16,426,934 | ||||||
Inner Mongolia Yitai Coal Co. Ltd. Class B | 269,285 | 1,466,526 | ||||||
Intime Department Store Group Co. Ltd. | 384,000 | 394,582 | ||||||
Jiangsu Expressway Co. Ltd. Class H | 768,000 | 632,718 | ||||||
Jiangxi Copper Co. Ltd. Class H | 768,000 | 1,667,445 | ||||||
Kingboard Chemical Holdings Co. Ltd. | 192,000 | 419,832 | ||||||
Kunlun Energy Co. Ltd. | 1,536,000 | 2,625,929 | ||||||
Lee & Man Paper Manufacturing Ltd.b | 768,000 | 314,874 | ||||||
Lenovo Group Ltd.b | 3,072,000 | 2,495,226 | ||||||
Longfor Properties Co. Ltd.b | 576,000 | 830,257 | ||||||
Metallurgical Corp. of China Ltd. Class Ha | 1,536,000 | 324,775 | ||||||
Nine Dragons Paper (Holdings) Ltd. | 768,000 | 345,569 | ||||||
Parkson Retail Group Ltd.b | 768,000 | 623,807 | ||||||
PetroChina Co. Ltd. Class H | 9,984,000 | 12,035,507 | ||||||
PICC Property and Casualty Co. Ltd. Class H | 1,545,200 | 1,858,722 | ||||||
Ping An Insurance (Group) Co. of China Ltd. Class H | 768,000 | 5,544,948 | ||||||
Poly Property Group Co. Ltd.a,b | 776,984 | 384,673 | ||||||
Sany Heavy Equipment International Holdings Co. Ltd. | 384,000 | 199,024 | ||||||
Shandong Weigao Group Medical Polymer Co. Ltd. Class H | 880,000 | 968,922 | ||||||
Shanghai Electric Group Co. Ltd. Class H | 1,536,000 | 615,885 | ||||||
Shanghai Industrial Holdings Ltd.b | 384,000 | 1,054,530 | ||||||
Shanghai Pharmaceuticals Holding Co. Ltd. Class H | 268,800 | 458,844 | ||||||
Shimao Property Holdings Ltd.b | 576,000 | 868,873 | ||||||
Shougang Fushan Resources Group Ltd.b | 1,536,000 | 403,989 | ||||||
Shui On Land Ltd.b | 1,344,000 | 488,648 |
Security | Shares | Value | ||||||
Sihuan Pharmaceutical Holdings Group Ltd.b | 768,000 | $ | 306,952 | |||||
Sino-Ocean Land Holdings Ltd. | 1,344,000 | 603,013 | ||||||
Sinopec Shanghai Petrochemical Co. Ltd. Class H | 768,000 | 201,004 | ||||||
Sinopharm Group Co. Ltd. Class Hb | 307,200 | 976,307 | ||||||
SOHO China Ltd.b | 1,152,000 | 736,686 | ||||||
Sun Art Retail Group Ltd. | 960,000 | 1,211,720 | ||||||
Tencent Holdings Ltd. | 460,800 | 14,080,206 | ||||||
Tingyi (Cayman Islands) Holding Corp.b | 768,000 | 2,272,438 | ||||||
Uni-President China Holdings Ltd. | 384,000 | 396,068 | ||||||
Want Want China Holdings Ltd.b | 2,688,000 | 3,326,969 | ||||||
Weichai Power Co. Ltd. Class H | 239,775 | 633,732 | ||||||
Wumart Stores Inc. Class H | 384,000 | 647,571 | ||||||
Yanzhou Coal Mining Co. Ltd. Class H | 768,000 | 1,095,127 | ||||||
Yingde Gases Group Co. Ltd.b | 467,500 | 362,247 | ||||||
Yuexiu Property Co. Ltd.b | 3,096,000 | 722,483 | ||||||
Zhaojin Mining Industry Co. Ltd. Class H | 384,000 | 507,957 | ||||||
Zhejiang Expressway Co. Ltd. Class H | 768,000 | 506,967 | ||||||
Zhongsheng Group Holdings Ltd. | 192,000 | 241,354 | ||||||
Zhuzhou CSR Times Electric Co. Ltd. Class H | 384,000 | 926,798 | ||||||
Zijin Mining Group Co. Ltd. Class Hb | 3,039,000 | 952,106 | ||||||
Zoomlion Heavy Industry Science and Technology Co. Ltd. Class Hb | 640,800 | 685,723 | ||||||
ZTE Corp. Class Hb | 307,240 | 406,418 | ||||||
|
| |||||||
274,154,057 | ||||||||
INDIA — 15.01% | ||||||||
ACC Ltd. | 25,141 | 591,407 | ||||||
Adani Enterprises Ltd. | 95,583 | 267,718 | ||||||
Adani Ports and Special Economic Zone Ltd. | 170,206 | 348,062 | ||||||
Aditya Birla Nuvo Ltd. | 14,976 | 200,470 | ||||||
Ambuja Cements Ltd. | 273,740 | 911,892 | ||||||
Asian Paints Ltd. | 14,208 | 929,925 | ||||||
Axis Bank Ltd. | 107,136 | 1,910,247 | ||||||
Bajaj Auto Ltd. | 38,400 | 1,116,413 | ||||||
Bank of Baroda | 31,872 | 362,037 | ||||||
Bank of India | 52,110 | 239,167 | ||||||
Bharat Heavy Electricals Ltd. | 268,800 | 1,030,501 | ||||||
Bharat Petroleum Corp. Ltd. | 82,944 | 499,304 | ||||||
Bharti Airtel Ltd. | 264,576 | 1,178,641 | ||||||
Cairn India Ltd.a | 107,520 | 657,298 |
32 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI BRIC INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Canara Bank Ltd. | 40,490 | $ | 231,548 | |||||
Cipla Ltd. | 165,120 | 1,117,473 | ||||||
Coal India Ltd. | 235,392 | 1,487,254 | ||||||
Dabur India Ltd. | 203,646 | 448,662 | ||||||
DLF Ltd. | 196,224 | 688,063 | ||||||
Dr. Reddy’s Laboratories Ltd. | 48,000 | 1,447,637 | ||||||
GAIL (India) Ltd. | 186,624 | 1,191,206 | ||||||
GMR Infrastructure Ltd.a | 463,872 | 151,775 | ||||||
Godrej Consumer Products Ltd. | 56,448 | 702,543 | ||||||
HCL Technologies Ltd. | 39,168 | 383,336 | ||||||
HDFC Bank Ltd. | 710,799 | 7,607,626 | ||||||
Hero Motocorp Ltd. | 18,432 | 584,191 | ||||||
Hindalco Industries Ltd. | 470,016 | 877,504 | ||||||
Hindustan Unilever Ltd. | 405,425 | 3,754,327 | ||||||
Housing Development Finance Corp. Ltd. | 604,416 | 7,989,700 | ||||||
ICICI Bank Ltd. | 200,448 | 3,250,951 | ||||||
Idea Cellular Ltd.a | 315,125 | 422,905 | ||||||
Infosys Ltd. | 199,680 | 8,477,740 | ||||||
Infrastructure Development Finance Co. Ltd. | 475,008 | 1,144,716 | ||||||
ITC Ltd. | 1,021,056 | 4,913,000 | ||||||
Jaiprakash Associates Ltd. | 437,760 | 507,998 | ||||||
Jindal Steel & Power Ltd. | 170,112 | 1,076,943 | ||||||
JSW Steel Ltd. | 34,560 | 430,998 | ||||||
Kotak Mahindra Bank Ltd. | 131,328 | 1,355,423 | ||||||
Larsen & Toubro Ltd. | 95,616 | 2,308,364 | ||||||
LIC Housing Finance Ltd. | 136,704 | 590,070 | ||||||
Lupin Ltd. | 71,040 | 757,462 | ||||||
Mahindra & Mahindra Ltd. | 141,312 | 1,938,737 | ||||||
Maruti Suzuki (India) Ltd. | 15,744 | 323,598 | ||||||
NTPC Ltd. | 297,216 | 897,926 | ||||||
Oil & Natural Gas Corp. Ltd. | 351,744 | 1,744,650 | ||||||
Piramal Healthcare Ltd. | 35,328 | 304,916 | ||||||
Power Finance Corp. Ltd. | 114,816 | 330,876 | ||||||
Power Grid Corp. of India Ltd. | 552,960 | 1,187,435 | ||||||
Ranbaxy Laboratories Ltd.a | 60,672 | 601,757 | ||||||
Reliance Capital Ltd. | 38,357 | 220,523 | ||||||
Reliance Communications Ltd. | 248,832 | 215,617 | ||||||
Reliance Industries Ltd. | 605,184 | 8,338,211 | ||||||
Reliance Infrastructure Ltd. | 50,911 | 406,464 | ||||||
Reliance Power Ltd.a | 270,148 | 370,072 | ||||||
Rural Electrification Corp. Ltd. | 129,801 | 440,332 |
Security | Shares | Value | ||||||
Satyam Computer Services Ltd.a | 297,908 | $ | 499,414 | |||||
Sesa Goa Ltd. | 156,288 | 481,718 | ||||||
Shriram Transport Finance Co. Ltd. | 54,568 | 623,081 | ||||||
Siemens Ltd. | 28,803 | 351,099 | ||||||
State Bank of India | 61,056 | 2,016,741 | ||||||
Sterlite Industries (India) Ltd. | 607,872 | 1,050,731 | ||||||
Sun Pharmaceuticals Industries Ltd. | 147,072 | 1,767,244 | ||||||
Tata Consultancy Services Ltd. | 218,496 | 5,278,274 | ||||||
Tata Motors Ltd. | 686,208 | 2,890,401 | ||||||
Tata Power Co. Ltd. | 485,376 | 868,223 | ||||||
Tata Steel Ltd. | 136,320 | 885,682 | ||||||
Titan Industries Ltd. | 98,688 | 390,937 | ||||||
Ultratech Cement Ltd. | 33,286 | 1,013,630 | ||||||
Unitech Ltd.a | 528,935 | 174,965 | ||||||
United Phosphorus Ltd. | 106,554 | 229,103 | ||||||
United Spirits Ltd. | 40,066 | 698,067 | ||||||
Wipro Ltd. | 228,864 | 1,491,885 | ||||||
Zee Entertainment Enterprises Ltd. | 218,176 | 641,094 | ||||||
|
| |||||||
102,815,900 | ||||||||
RUSSIA — 13.40% | ||||||||
Federal Grid Co. of Unified Energy System OJSCa | 145,928,500 | 902,376 | ||||||
Gazprom OAO | 4,934,408 | 24,028,023 | ||||||
IDGC Holding JSCa | 7,878,800 | 421,194 | ||||||
Inter RAO UES OJSCa | 576,000,000 | 461,691 | ||||||
LSR Group OJSC SP GDRc | 92,182 | 380,251 | ||||||
LUKOIL OAO | 236,928 | 13,467,853 | ||||||
Magnit OJSC SP GDRb,c | 123,648 | 3,943,135 | ||||||
Mechel OAO SP ADR | 61,824 | 354,252 | ||||||
MMC Norilsk Nickel OJSC | 22,272 | 3,289,424 | ||||||
Mobile TeleSystems OJSC SP ADR | 242,688 | 4,467,886 | ||||||
NovaTek OAO SP GDRc | 42,240 | 5,039,232 | ||||||
Novolipetsk Steel OJSC SP GDRc | 28,416 | 513,761 | ||||||
Rosneft Oil Co. OJSC | 587,522 | 3,504,366 | ||||||
Rostelecom OJSC | 552,960 | 2,111,850 | ||||||
RusHydro OJSC | 54,912,200 | 1,387,935 | ||||||
Sberbank of Russia | 4,016,640 | 11,576,323 | ||||||
Severstal OAO | 80,640 | 921,564 | ||||||
Sistema JSFC SP GDRc | 56,064 | 1,105,022 | ||||||
Surgutneftegas OJSC | 3,302,420 | 2,848,518 | ||||||
Tatneft OAO | 652,803 | 3,953,726 | ||||||
TMK OAO SP GDRc | 27,264 | 374,880 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 33 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI BRIC INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Uralkali OJSC | 622,080 | $ | 4,753,587 | |||||
VTB Bank OJSC | 1,221,166,001 | 2,017,410 | ||||||
|
| |||||||
91,824,259 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $643,910,508) | 566,596,994 | |||||||
PREFERRED STOCKS — 16.83% |
| |||||||
BRAZIL — 16.20% |
| |||||||
AES Tiete SA | 38,400 | 525,625 | ||||||
Banco Bradesco SA | 883,262 | 14,377,569 | ||||||
Banco do Estado do Rio Grande do Sul SA Class B | 76,800 | 626,962 | ||||||
Bradespar SA | 115,200 | 1,505,845 | ||||||
Braskem SA Class A | 76,800 | 484,901 | ||||||
Centrais Eletricas Brasileiras SA Class B | 115,282 | 1,054,842 | ||||||
Companhia Brasileira de Distribuicao Grupo Pao de Acucar Class A | 38,656 | 1,628,384 | ||||||
Companhia de Bebidas das Americas | 357,973 | 13,569,884 | ||||||
Companhia de Transmissao de Energia Eletrica Paulista | 4,232 | 94,147 | ||||||
Companhia Energetica de Minas Gerais | 241,141 | 4,121,509 | ||||||
Companhia Energetica de Sao Paulo Class B | 76,800 | 1,191,417 | ||||||
Companhia Paranaense de Energia Class B | 38,400 | 689,279 | ||||||
Eletropaulo Metropolitana Eletricidade de Sao Paulo SA | 39,700 | 364,238 | ||||||
Gerdau SA | 422,400 | 3,739,989 | ||||||
Itau Unibanco Holding SA | 1,075,200 | 16,812,430 | ||||||
Itausa—Investimentos Itau SA | 1,190,436 | 5,490,345 | ||||||
Klabin SA | 230,400 | 1,034,203 | ||||||
Lojas Americanas SA | 203,970 | 1,469,939 | ||||||
Marcopolo SA | 78,600 | 441,212 | ||||||
Metalurgica Gerdau SA | 115,200 | 1,262,637 | ||||||
Oi SA | 384,099 | 1,460,762 | ||||||
Petroleo Brasileiro SA | 1,958,414 | 20,044,932 | ||||||
Telefonica Brasil SA | 154,064 | 3,343,766 | ||||||
Usinas Siderurgicas de Minas Gerais SA Class A | 153,600 | 617,491 |
Security | Shares | Value | ||||||
Vale SA Class A | 921,600 | $ | 15,083,455 | |||||
|
| |||||||
111,035,763 | ||||||||
RUSSIA — 0.63% |
| |||||||
AK Transneft OAO | 768 | 1,251,324 | ||||||
Sberbank of Russia | 461,230 | 977,004 | ||||||
Surgutneftegas OJSC | 3,225,600 | 2,077,636 | ||||||
|
| |||||||
4,305,964 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $114,880,812) |
| 115,341,727 | ||||||
SHORT-TERM INVESTMENTS — 5.33% |
| |||||||
MONEY MARKET FUNDS — 5.33% |
| |||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.23%d,e,f | 32,877,704 | 32,877,704 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.23%d,e,f | 2,491,518 | 2,491,518 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%d,e | 1,115,567 | 1,115,567 | ||||||
|
| |||||||
36,484,789 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $36,484,789) |
| 36,484,789 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $795,276,109) |
| 718,423,510 | ||||||
Other Assets, Less Liabilities — (4.86)% |
| (33,274,832 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 685,148,678 | |||||
|
|
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 | This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933. |
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 consolidated financial statements.
34 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments
iSHARES® MSCI EMERGING MARKETS ASIA INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 98.82% | ||||||||
CHINA — 28.82% | ||||||||
Agile Property Holdings Ltd. | 12,000 | $ | 13,770 | |||||
Agricultural Bank of China Ltd. Class H | 200,000 | 73,747 | ||||||
Air China Ltd. Class H | 20,000 | 12,042 | ||||||
Aluminum Corp. of China Ltd. Class Ha | 36,000 | 13,785 | ||||||
Angang Steel Co. Ltd. Class Ha | 16,000 | 7,818 | ||||||
Anhui Conch Cement Co. Ltd. Class H | 12,000 | 29,953 | ||||||
Anta Sports Products Ltd. | 10,000 | 5,918 | ||||||
AviChina Industry & Technology Co. Ltd. Class H | 24,000 | 8,664 | ||||||
Bank of China Ltd. Class H | 734,000 | 266,866 | ||||||
Bank of Communications Co. Ltd. Class H | 74,000 | 48,371 | ||||||
BBMG Corp. Class H | 13,000 | 7,911 | ||||||
Beijing Capital International Airport Co. Ltd. Class H | 20,000 | 13,666 | ||||||
Beijing Enterprises Holdings Ltd. | 5,000 | 33,070 | ||||||
Belle International Holdings Ltd. | 46,000 | 83,030 | ||||||
Bosideng International Holdings Ltd. | 36,000 | 9,933 | ||||||
Brilliance China Automotive Holdings Ltd.a | 24,000 | 23,455 | ||||||
BYD Co. Ltd. Class Ha | 5,000 | 8,716 | ||||||
China Agri-Industries Holdings Ltd. | 16,000 | 7,921 | ||||||
China BlueChemical Ltd. Class H | 16,000 | 9,221 | ||||||
China CITIC Bank Corp. Ltd. Class H | 76,000 | 36,255 | ||||||
China Coal Energy Co. Class H | 42,000 | 34,981 | ||||||
China Communications Construction Co. Ltd. Class H | 44,000 | 33,810 | ||||||
China Communications Services Corp. Ltd. Class H | 24,000 | 13,336 | ||||||
China Construction Bank Corp. Class H | 708,000 | 465,534 | ||||||
China COSCO Holdings Co. Ltd. Class Ha | 23,000 | 8,718 | ||||||
China Everbright Ltd. | 8,000 | 9,726 | ||||||
China Gas Holdings Ltd. | 28,000 | 15,306 | ||||||
China Life Insurance Co. Ltd. Class H | 74,000 | 197,969 | ||||||
China Longyuan Power Group Corp. Ltd. Class H | 20,000 | 12,970 | ||||||
China Mengniu Dairy Co. Ltd. | 12,000 | 36,126 | ||||||
China Merchants Bank Co. Ltd. Class H | 39,000 | 67,277 | ||||||
China Merchants Holdings (International) Co. Ltd. | 12,000 | 34,424 | ||||||
China Minsheng Banking Corp. Ltd. Class H | 46,000 | 37,482 | ||||||
China Mobile Ltd. | 59,000 | 629,840 |
Security | Shares | Value | ||||||
China National Building Material Co. Ltd. Class H | 28,000 | $ | 26,209 | |||||
China Oilfield Services Ltd. Class H | 16,000 | 25,538 | ||||||
China Overseas Land & Investment Ltd. | 40,000 | 90,353 | ||||||
China Pacific Insurance (Group) Co. Ltd. Class H | 16,000 | 47,446 | ||||||
China Petroleum & Chemical Corp. Class H | 168,000 | 158,118 | ||||||
China Railway Construction Corp. Ltd. Class H | 19,000 | 14,355 | ||||||
China Railway Group Ltd. Class H | 38,000 | 14,306 | ||||||
China Resources Cement Holdings Ltd. | 20,000 | 8,819 | ||||||
China Resources Enterprise Ltd. | 12,000 | 35,662 | ||||||
China Resources Gas Group Ltd. | 8,000 | 15,740 | ||||||
China Resources Land Ltd. | 20,000 | 38,627 | ||||||
China Resources Power Holdings Co. Ltd. | 16,000 | 34,202 | ||||||
China Rongsheng Heavy Industries Group Holdings Ltd. | 33,000 | 4,510 | ||||||
China Shanshui Cement Group Ltd. | 16,000 | 8,355 | ||||||
China Shenhua Energy Co. Ltd. Class H | 34,000 | 123,836 | ||||||
China Shipping Container Lines Co. Ltd. Class Ha | 46,000 | 8,777 | ||||||
China Shipping Development Co. Ltd. Class H | 16,000 | 6,003 | ||||||
China Southern Airlines Co. Ltd. Class H | 20,000 | 8,483 | ||||||
China State Construction International Holdings Ltd. | 16,000 | 17,039 | ||||||
China Taiping Insurance Holdings Co. Ltd.a | 7,600 | 10,132 | ||||||
China Telecom Corp. Ltd. Class H | 140,000 | 76,893 | ||||||
China Unicom (Hong Kong) Ltd. | 44,000 | 69,663 | ||||||
China Yurun Food Group Ltd.a | 14,000 | 8,556 | ||||||
China ZhengTong Auto Services Holdings Ltd.a | 11,000 | 6,581 | ||||||
China Zhongwang Holdings Ltd.a | 28,000 | 11,335 | ||||||
Chongqing Rural Commercial Bank Co. Ltd. Class H | 22,000 | 9,020 | ||||||
CITIC Pacific Ltd. | 12,000 | 14,682 | ||||||
CITIC Securities Co. Ltd. Class H | 6,000 | 10,072 | ||||||
CNOOC Ltd. | 178,000 | 336,895 | ||||||
COSCO Pacific Ltd. | 16,000 | 19,741 | ||||||
Country Garden Holdings Co. Ltd.a | 41,964 | 14,716 | ||||||
CSR Corp Ltd. Class H | 18,000 | 12,207 | ||||||
Dah Chong Hong Holdings Ltd. | 8,000 | 7,261 | ||||||
Daphne International Holdings Ltd. | 12,000 | 12,006 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 35 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS ASIA INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Datang International Power Generation Co. Ltd. Class H | 32,000 | $ | 10,727 | |||||
Dongfang Electric Corp. Ltd. Class H | 3,200 | 4,365 | ||||||
Dongfeng Motor Group Co. Ltd. Class H | 28,000 | 36,244 | ||||||
ENN Energy Holdings Ltd. | 8,000 | 31,562 | ||||||
Evergrande Real Estate Group Ltd. | 50,000 | 19,081 | ||||||
Far East Horizon Ltd. | 12,000 | 8,324 | ||||||
Fosun International Ltd. | 18,000 | 8,494 | ||||||
Franshion Properties (China) Ltd. | 52,000 | 15,286 | ||||||
GCL-Poly Energy Holdings Ltd. | 68,000 | 10,433 | ||||||
Geely Automobile Holdings Ltd. | 30,000 | 9,631 | ||||||
Golden Eagle Retail Group Ltd. | 6,000 | 11,000 | ||||||
GOME Electrical Appliances Holdings Ltd. | 100,000 | 8,638 | ||||||
Great Wall Motor Co. Ltd. Class H | 10,000 | 22,588 | ||||||
Guangdong Investment Ltd. | 28,000 | 20,685 | ||||||
Guangzhou Automobile Group Co. Ltd. Class H | 24,000 | 16,740 | ||||||
Guangzhou R&F Properties Co. Ltd. Class H | 12,000 | 13,862 | ||||||
Haier Electronics Group Co. Ltd.a | 10,000 | 11,771 | ||||||
Hengan International Group Co. Ltd. | 7,000 | 70,395 | ||||||
Hengdeli Holdings Ltd. | 32,000 | 8,416 | ||||||
Huabao International Holdings Ltd. | 20,000 | 10,263 | ||||||
Huaneng Power International Inc. Class H | 32,000 | 22,073 | ||||||
Industrial and Commercial Bank of China Ltd. Class H | 632,000 | 342,227 | ||||||
Intime Department Store Group Co. Ltd. | 9,000 | 9,248 | ||||||
Jiangsu Expressway Co. Ltd. Class H | 12,000 | 9,886 | ||||||
Jiangxi Copper Co. Ltd. Class H | 14,000 | 30,396 | ||||||
Kingboard Chemical Holdings Co. Ltd. | 6,000 | 13,120 | ||||||
Kunlun Energy Co. Ltd. | 28,000 | 47,868 | ||||||
Lee & Man Paper Manufacturing Ltd. | 28,000 | 11,480 | ||||||
Lenovo Group Ltd. | 64,000 | 51,984 | ||||||
Longfor Properties Co. Ltd. | 13,000 | 18,738 | ||||||
Metallurgical Corp. of China Ltd. Class Ha | 52,000 | 10,995 | ||||||
Minmetals Resources Ltd.a | 24,000 | 8,942 | ||||||
Nine Dragons Paper (Holdings) Ltd. | 16,000 | 7,199 | ||||||
Parkson Retail Group Ltd. | 14,000 | 11,371 | ||||||
PetroChina Co. Ltd. Class H | 208,000 | 250,740 | ||||||
PICC Property and Casualty Co. Ltd. Class H | 28,000 | 33,681 | ||||||
Ping An Insurance (Group) Co. of China Ltd. Class H | 17,000 | 122,740 | ||||||
Poly Property Group Co. Ltd.a | 24,000 | 11,882 |
Security | Shares | Value | ||||||
Sany Heavy Equipment International Holdings Co. Ltd. | 12,000 | $ | 6,220 | |||||
Shandong Weigao Group Medical Polymer Co. Ltd. Class H | 16,000 | 17,617 | ||||||
Shanghai Electric Group Co. Ltd. Class H | 28,000 | 11,227 | ||||||
Shanghai Industrial Holdings Ltd. | 6,000 | 16,477 | ||||||
Shanghai Pharmaceuticals Holding Co. Ltd. Class H | 5,600 | 9,559 | ||||||
Shimao Property Holdings Ltd. | 15,000 | 22,627 | ||||||
Shougang Fushan Resources Group Ltd. | 28,000 | 7,364 | ||||||
Shui On Land Ltd. | 34,000 | 12,362 | ||||||
Sihuan Pharmaceutical Holdings Group Ltd. | 14,000 | 5,595 | ||||||
Sino-Ocean Land Holdings Ltd. | 31,000 | 13,909 | ||||||
Sinopec Shanghai Petrochemical Co. Ltd. Class H | 32,000 | 8,375 | ||||||
Sinopharm Group Co. Ltd. Class H | 8,000 | 25,425 | ||||||
SOHO China Ltd. | 21,000 | 13,429 | ||||||
Sun Art Retail Group Ltd. | 19,000 | 23,982 | ||||||
Tencent Holdings Ltd. | 10,000 | 305,560 | ||||||
Tingyi (Cayman Islands) Holding Corp. | 20,000 | 59,178 | ||||||
Uni-President China Holdings Ltd. | 14,000 | 14,440 | ||||||
Want Want China Holdings Ltd. | 60,000 | 74,263 | ||||||
Weichai Power Co. Ltd. Class H | 4,800 | 12,687 | ||||||
Wumart Stores Inc. Class H | 6,000 | 10,118 | ||||||
Yanzhou Coal Mining Co. Ltd. Class H | 20,000 | 28,519 | ||||||
Yingde Gases Group Co. Ltd. | 10,000 | 7,749 | ||||||
Yuexiu Property Co. Ltd. | 68,000 | 15,868 | ||||||
Zhaojin Mining Industry Co. Ltd. Class H | 8,000 | 10,582 | ||||||
Zhejiang Expressway Co. Ltd. Class H | 20,000 | 13,202 | ||||||
Zhongsheng Group Holdings Ltd. | 6,000 | 7,542 | ||||||
Zhuzhou CSR Times Electric Co. Ltd. Class H | 4,000 | 9,654 | ||||||
Zijin Mining Group Co. Ltd. Class H | 60,000 | 18,798 | ||||||
Zoomlion Heavy Industry Science and Technology Co. Ltd. Class H | 12,400 | 13,269 | ||||||
ZTE Corp. Class H | 6,000 | 7,937 | ||||||
|
| |||||||
5,784,358 | ||||||||
INDIA — 10.83% | ||||||||
ACC Ltd. | 528 | 12,421 | ||||||
Adani Enterprises Ltd. | 2,122 | 5,944 | ||||||
Adani Ports and Special Economic Zone Ltd. | 3,916 | 8,008 | ||||||
Aditya Birla Nuvo Ltd. | 574 | 7,684 | ||||||
Ambuja Cements Ltd. | 6,066 | 20,207 | ||||||
Asian Paints Ltd. | 290 | 18,981 |
36 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS ASIA INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Axis Bank Ltd. | 2,244 | $ | 40,011 | |||||
Bajaj Auto Ltd. | 872 | 25,352 | ||||||
Bank of India | 1,506 | 6,912 | ||||||
Bharat Heavy Electricals Ltd. | 5,720 | 21,929 | ||||||
Bharat Petroleum Corp. Ltd. | 1,900 | 11,438 | ||||||
Bharti Airtel Ltd. | 5,684 | 25,321 | ||||||
Cairn India Ltd.a | 2,000 | 12,227 | ||||||
Canara Bank Ltd. | 1,144 | 6,542 | ||||||
Cipla Ltd. | 3,236 | 21,900 | ||||||
Coal India Ltd. | 5,290 | 33,423 | ||||||
Dabur India Ltd. | 2,822 | 6,217 | ||||||
DLF Ltd. | 3,718 | 13,037 | ||||||
Dr. Reddy’s Laboratories Ltd. | 1,008 | 30,400 | ||||||
GAIL (India) Ltd. | 3,832 | 24,459 | ||||||
Godrej Consumer Products Ltd. | 1,002 | 12,471 | ||||||
HCL Technologies Ltd. | 1,236 | 12,097 | ||||||
HDFC Bank Ltd. | 14,758 | 157,954 | ||||||
Hero Motocorp Ltd. | 408 | 12,931 | ||||||
Hindalco Industries Ltd. | 10,040 | 18,744 | ||||||
Hindustan Unilever Ltd. | 8,890 | 82,323 | ||||||
Housing Development Finance Corp. Ltd. | 12,892 | 170,418 | ||||||
ICICI Bank Ltd. | 4,248 | 68,896 | ||||||
Idea Cellular Ltd.a | 6,550 | 8,790 | ||||||
Infosys Ltd. | 4,170 | 177,044 | ||||||
Infrastructure Development Finance Co. Ltd. | 8,940 | 21,544 | ||||||
ITC Ltd. | 22,694 | 109,196 | ||||||
Jaiprakash Associates Ltd. | 8,456 | 9,813 | ||||||
Jindal Steel & Power Ltd. | 3,524 | 22,310 | ||||||
JSW Steel Ltd. | 834 | 10,401 | ||||||
Kotak Mahindra Bank Ltd. | 2,702 | 27,887 | ||||||
Larsen & Toubro Ltd. | 2,048 | 49,443 | ||||||
LIC Housing Finance Ltd. | 2,776 | 11,982 | ||||||
Lupin Ltd. | 1,502 | 16,015 | ||||||
Mahindra & Mahindra Ltd. | 3,050 | 41,845 | ||||||
Maruti Suzuki (India) Ltd. | 398 | 8,180 | ||||||
NTPC Ltd. | 5,902 | 17,831 | ||||||
Oil & Natural Gas Corp. Ltd. | 7,874 | 39,055 | ||||||
Power Finance Corp. Ltd. | 2,992 | 8,622 | ||||||
Power Grid Corp. of India Ltd. | 11,202 | 24,055 | ||||||
Ranbaxy Laboratories Ltd.a | 1,230 | 12,199 | ||||||
Reliance Capital Ltd. | 860 | 4,944 | ||||||
Reliance Communications Ltd. | 6,442 | 5,582 | ||||||
Reliance Industries Ltd. | 13,110 | 180,629 |
Security | Shares | Value | ||||||
Reliance Infrastructure Ltd. | 1,236 | $ | 9,868 | |||||
Reliance Power Ltd.a | 5,970 | 8,178 | ||||||
Rural Electrification Corp. Ltd. | 2,656 | 9,010 | ||||||
Satyam Computer Services Ltd.a | 7,596 | 12,734 | ||||||
Sesa Goa Ltd. | 2,838 | 8,747 | ||||||
Shriram Transport Finance Co. Ltd. | 1,178 | 13,451 | ||||||
Siemens Ltd. | 712 | 8,679 | ||||||
State Bank of India | 1,266 | 41,817 | ||||||
Sterlite Industries (India) Ltd. | 11,810 | 20,414 | ||||||
Sun Pharmaceuticals Industries Ltd. | 3,104 | 37,298 | ||||||
Tata Consultancy Services Ltd. | 4,460 | 107,742 | ||||||
Tata Motors Ltd. | 14,702 | 61,927 | ||||||
Tata Power Co. Ltd. | 9,234 | 16,518 | ||||||
Tata Steel Ltd. | 2,780 | 18,062 | ||||||
Titan Industries Ltd. | 2,796 | 11,076 | ||||||
Ultratech Cement Ltd. | 698 | 21,256 | ||||||
Unitech Ltd.a | 21,372 | 7,070 | ||||||
United Phosphorus Ltd. | 3,896 | 8,377 | ||||||
United Spirits Ltd. | 768 | 13,381 | ||||||
Wipro Ltd. | 4,770 | 31,094 | ||||||
Zee Entertainment Enterprises Ltd. | 4,016 | 11,801 | ||||||
|
| |||||||
2,174,114 | ||||||||
INDONESIA — 4.58% | ||||||||
PT Adaro Energy Tbk | 141,000 | 20,259 | ||||||
PT Astra Agro Lestari Tbk | 5,000 | 11,694 | ||||||
PT Astra International Tbk | 200,000 | 141,584 | ||||||
PT Bank Central Asia Tbk | 123,000 | 99,974 | ||||||
PT Bank Danamon Indonesia Tbk | 32,000 | 20,136 | ||||||
PT Bank Mandiri (Persero) Tbk | 92,000 | 75,260 | ||||||
PT Bank Negara Indonesia (Persero) Tbk | 73,000 | 28,519 | ||||||
PT Bank Rakyat Indonesia (Persero) Tbk | 110,000 | 80,178 | ||||||
PT Bukit Asam (Persero) Tbk | 8,000 | 12,250 | ||||||
PT Bumi Resources Tbk | 153,000 | 11,232 | ||||||
PT Charoen Pokphand Indonesia Tbk | 71,000 | 20,105 | ||||||
PT Gudang Garam Tbk | 5,000 | 26,272 | ||||||
PT Indo Tambangraya Megah Tbk | 4,000 | 16,025 | ||||||
PT Indocement Tunggal Prakarsa Tbk | 14,000 | 29,733 | ||||||
PT Indofood Sukses Makmur Tbk | 42,000 | 23,786 | ||||||
PT Indosat Tbk | 17,000 | 9,093 | ||||||
PT Kalbe Farma Tbk | 44,000 | 17,881 | ||||||
PT Perusahaan Gas Negara (Persero) Tbk | 106,000 | 41,133 | ||||||
PT Semen Gresik (Persero) Tbk | 29,000 | 37,714 | ||||||
PT Telekomunikasi Indonesia (Persero) Tbk | 100,000 | 97,535 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 37 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS ASIA INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
PT Unilever Indonesia Tbk | 15,000 | $ | 42,632 | |||||
PT United Tractors Tbk | 16,000 | 33,644 | ||||||
PT Vale Indonesia Tbk | 29,000 | 6,995 | ||||||
PT XL Axiata Tbk | 20,000 | 15,102 | ||||||
|
| |||||||
918,736 | ||||||||
MALAYSIA — 6.25% | ||||||||
AirAsia Bhd | 11,800 | 13,029 | ||||||
Alliance Financial Group Bhd | 8,600 | 11,368 | ||||||
AMMB Holdings Bhd | 16,000 | 32,517 | ||||||
Axiata Group Bhd | 25,200 | 48,311 | ||||||
Berjaya Corp. Bhd | 31,400 | 6,733 | ||||||
Berjaya Sports Toto Bhd | 7,600 | 10,727 | ||||||
British American Tobacco (Malaysia) Bhd | 1,000 | 20,413 | ||||||
Bumi Armada Bhda | 8,200 | 9,947 | ||||||
CIMB Group Holdings Bhd | 48,800 | 121,668 | ||||||
DiGi.Com Bhd | 30,400 | 46,799 | ||||||
Felda Global Ventures Holdings Bhda | 10,600 | 16,963 | ||||||
Gamuda Bhd | 14,600 | 16,121 | ||||||
Genting Bhd | 20,000 | 57,737 | ||||||
Genting Malaysia Bhd | 28,800 | 32,538 | ||||||
Genting Plantations Bhd | 4,000 | 11,893 | ||||||
Hong Leong Bank Bhd | 5,600 | 24,088 | ||||||
Hong Leong Financial Group Bhd | 2,800 | 10,790 | ||||||
IHH Healthcare Bhda | 15,000 | 15,362 | ||||||
IJM Corp. Bhd | 10,400 | 17,109 | ||||||
IOI Corp. Bhd | 31,200 | 51,326 | ||||||
Kuala Lumpur Kepong Bhd | 4,800 | 35,702 | ||||||
Lafarge Malayan Cement Bhd | 4,600 | 12,661 | ||||||
Malayan Banking Bhd | 34,400 | 100,739 | ||||||
Malaysia Airports Holdings Bhd | 5,400 | 9,471 | ||||||
Malaysia Marine and Heavy Engineering Holdings Bhd | 5,600 | 8,567 | ||||||
Maxis Communications Bhd | 22,200 | 50,020 | ||||||
MISC Bhd | 9,600 | 13,089 | ||||||
MMC Corp. Bhd | 12,600 | 9,880 | ||||||
Parkson Holdings Bhd | 5,600 | 8,388 | ||||||
Petronas Chemicals Group Bhd | 23,400 | 48,530 | ||||||
Petronas Dagangan Bhd | 2,600 | 18,640 | ||||||
Petronas Gas Bhd | 7,000 | 43,418 | ||||||
PPB Group Bhd | 4,600 | 20,464 | ||||||
Public Bank Bhd Foreign | 11,200 | 51,403 | ||||||
RHB Capital Bhd | 5,200 | 12,116 | ||||||
Sapurakencana Petroleum Bhda | 20,000 | 15,170 |
Security | Shares | Value | ||||||
Sime Darby Bhd | 26,800 | $ | 84,144 | |||||
Telekom Malaysia Bhd | 10,000 | 19,459 | ||||||
Tenaga Nasional Bhd | 26,600 | 58,231 | ||||||
UEM Land Holdings Bhda | 14,400 | 8,526 | ||||||
UMW Holdings Bhd | 4,800 | 15,670 | ||||||
YTL Corp. Bhd | 41,053 | 23,782 | ||||||
YTL Power International Bhd | 19,000 | 10,581 | ||||||
|
| |||||||
1,254,090 | ||||||||
PHILIPPINES — 1.54% | ||||||||
Aboitiz Equity Ventures Inc. | 18,800 | 21,671 | ||||||
Aboitiz Power Corp. | 18,200 | 14,707 | ||||||
Alliance Global Group Inc. | 40,600 | 11,367 | ||||||
Ayala Corp. | 1,560 | 15,239 | ||||||
Ayala Land Inc. | 47,600 | 25,342 | ||||||
Bank of the Philippine Islands | 7,780 | 13,868 | ||||||
BDO Unibank Inc. | 11,810 | 17,136 | ||||||
DMCI Holdings Inc. | 8,000 | 11,009 | ||||||
Energy Development Corp. | 71,000 | 10,091 | ||||||
Globe Telecom Inc. | 440 | 11,974 | ||||||
International Container Terminal Services Inc. | 8,200 | 13,350 | ||||||
Jollibee Foods Corp. | 4,800 | 11,408 | ||||||
Manila Electric Co. | 2,700 | 15,889 | ||||||
Metropolitan Bank & Trust Co. | 3,880 | 8,396 | ||||||
Philippine Long Distance Telephone Co. | 420 | 27,351 | ||||||
San Miguel Corp. | 4,623 | 12,306 | ||||||
SM Investments Corp. | 2,040 | 34,376 | ||||||
SM Prime Holdings Inc. | 62,750 | 20,879 | ||||||
Universal Robina Corp. | 8,800 | 12,737 | ||||||
|
| |||||||
309,096 | ||||||||
SOUTH KOREA — 24.84% | ||||||||
AmorePacific Corp. | 32 | 32,969 | ||||||
BS Financial Group Inc. | 1,800 | 18,720 | ||||||
Celltrion Inc. | 1,053 | 27,981 | ||||||
Cheil Industries Inc. | 440 | 40,137 | ||||||
CJ CheilJedang Corp. | 78 | 21,036 | ||||||
CJ Corp. | 142 | 10,212 | ||||||
Daelim Industrial Co. Ltd. | 272 | 21,288 | ||||||
Daewoo Engineering & Construction Co. Ltd.a | 1,140 | 10,047 | ||||||
Daewoo International Corp. | 400 | 12,110 | ||||||
Daewoo Securities Co. Ltd. | 1,600 | 15,864 | ||||||
Daewoo Shipbuilding & Marine Engineering Co. Ltd. | 920 | 19,744 |
38 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS ASIA INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
DGB Financial Group Inc. | 900 | $ | 10,391 | |||||
Dongbu Insurance Co. Ltd. | 420 | 17,157 | ||||||
Doosan Corp. | 98 | 11,703 | ||||||
Doosan Heavy Industries & Construction Co. Ltd. | 412 | 21,496 | ||||||
Doosan Infracore Co. Ltd.a | 960 | 14,976 | ||||||
E-Mart Co. Ltd. | 200 | 43,539 | ||||||
GS Engineering & Construction Corp. | 350 | 21,655 | ||||||
GS Holdings Corp. | 506 | 28,988 | ||||||
Hana Financial Group Inc. | 2,270 | 67,822 | ||||||
Hankook Tire Co. Ltd. | 920 | 33,731 | ||||||
Hanwha Chemical Corp. | 820 | 15,105 | ||||||
Hanwha Corp. | 420 | 12,197 | ||||||
Honam Petrochemical Corp. | 142 | 29,285 | ||||||
Hyosung Corp. | 212 | 11,342 | ||||||
Hyundai Department Store Co. Ltd. | 150 | 18,839 | ||||||
Hyundai Development Co. | 580 | 10,658 | ||||||
Hyundai Engineering & Construction Co. Ltd. | 658 | 36,767 | ||||||
Hyundai Glovis Co. Ltd. | 130 | 26,123 | ||||||
Hyundai Heavy Industries Co. Ltd. | 414 | 84,469 | ||||||
Hyundai Hysco Co. Ltd. | 300 | 12,586 | ||||||
Hyundai Marine & Fire Insurance Co. Ltd. | 620 | 17,868 | ||||||
Hyundai Merchant Marine Co. Ltd.a | 440 | 10,626 | ||||||
Hyundai Mipo Dockyard Co. Ltd. | 102 | 11,012 | ||||||
Hyundai Mobis Co. Ltd. | 658 | 178,328 | ||||||
Hyundai Motor Co. | 1,516 | 321,338 | ||||||
Hyundai Securities Co. Ltd. | 1,180 | 8,819 | ||||||
Hyundai Steel Co. | 540 | 39,788 | ||||||
Hyundai Wia Corp. | 152 | 24,114 | ||||||
Industrial Bank of Korea | 1,620 | 17,205 | ||||||
Kangwon Land Inc. | 980 | 20,038 | ||||||
KB Financial Group Inc. | 3,640 | 117,898 | ||||||
KCC Corp. | 44 | 10,975 | ||||||
Kia Motors Corp. | 2,562 | 167,319 | ||||||
Korea Aerospace Industries Ltd. | 460 | 10,440 | ||||||
Korea Electric Power Corp.a | 2,560 | 55,504 | ||||||
Korea Exchange Banka | 2,520 | 18,990 | ||||||
Korea Gas Corp. | 280 | 14,066 | ||||||
Korea Investment Holdings Co. Ltd. | 320 | 10,760 | ||||||
Korea Life Insurance Co. Ltd. | 1,760 | 11,013 | ||||||
Korea Zinc Co. Ltd. | 82 | 29,559 | ||||||
Korean Air Lines Co. Ltd.a | 340 | 14,234 | ||||||
KP Chemical Corp. | 660 | 6,980 |
Security | Shares | Value | ||||||
KT Corp. SP ADR | 639 | $ | 9,655 | |||||
KT&G Corp. | 1,040 | 78,736 | ||||||
Kumho Petro Chemical Co. Ltd. | 146 | 14,476 | ||||||
LG Chem Ltd. | 454 | 120,440 | ||||||
LG Corp. | 936 | 51,641 | ||||||
LG Display Co. Ltd.a | 2,280 | 52,146 | ||||||
LG Electronics Inc. | 1,016 | 63,040 | ||||||
LG Household & Health Care Ltd. | 94 | 51,531 | ||||||
LG Innotek Co. Ltd.a | 158 | 12,505 | ||||||
LG Uplus Corp. | 2,240 | 15,004 | ||||||
Lotte Confectionery Co. Ltd. | 8 | 11,450 | ||||||
Lotte Shopping Co. Ltd. | 102 | 28,722 | ||||||
LS Corp. | 166 | 12,845 | ||||||
LS Industrial Systems Co. Ltd. | 180 | 10,232 | ||||||
Mando Corp. | 126 | 17,879 | ||||||
Mirae Asset Securities Co. Ltd. | 300 | 8,170 | ||||||
NCsoft Corp. | 152 | 33,826 | ||||||
NHN Corp. | 408 | 93,314 | ||||||
OCI Co. Ltd. | 154 | 25,788 | ||||||
ORION Corp. | 36 | 29,190 | ||||||
POSCO | 630 | 204,887 | ||||||
S-Oil Corp. | 450 | 40,851 | ||||||
S1 Corp. | 206 | 10,712 | ||||||
Samsung C&T Corp. | 1,156 | 65,715 | ||||||
Samsung Card Co. Ltd. | 420 | 13,307 | ||||||
Samsung Electro-Mechanics Co. Ltd. | 590 | 50,596 | ||||||
Samsung Electronics Co. Ltd. | 1,088 | 1,182,333 | ||||||
Samsung Engineering Co. Ltd. | 298 | 50,559 | ||||||
Samsung Fire & Marine Insurance Co. Ltd. | 356 | 73,420 | ||||||
Samsung Heavy Industries Co. Ltd. | 1,600 | 52,387 | ||||||
Samsung Life Insurance Co. Ltd. | 640 | 54,432 | ||||||
Samsung SDI Co. Ltd. | 338 | 42,599 | ||||||
Samsung Securities Co. Ltd. | 540 | 23,106 | ||||||
Samsung Techwin Co. Ltd. | 352 | 22,089 | ||||||
Shinhan Financial Group Co. Ltd. | 4,180 | 130,046 | ||||||
Shinsegae Co. Ltd. | 70 | 13,943 | ||||||
SK C&C Co. Ltd. | 208 | 20,074 | ||||||
SK Holdings Co. Ltd. | 254 | 37,385 | ||||||
SK Hynix Inc.a | 5,240 | 97,907 | ||||||
SK Innovation Co. Ltd. | 598 | 86,172 | ||||||
SK Networks Co. Ltd. | 1,080 | 8,986 | ||||||
SK Telecom Co. Ltd. | 78 | 10,002 | ||||||
Woongjin Coway Co. Ltd. | 520 | 17,988 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 39 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS ASIA INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Woori Finance Holdings Co. Ltd. | 3,600 | $ | 34,267 | |||||
Woori Investment & Securities Co. Ltd. | 1,580 | 15,457 | ||||||
Yuhan Corp. | 88 | 10,393 | ||||||
|
| |||||||
4,986,014 | ||||||||
TAIWAN — 18.30% | ||||||||
Acer Inc.a | 24,000 | 21,195 | ||||||
Advanced Semiconductor Engineering Inc. | 52,434 | 39,215 | ||||||
Advantech Co. Ltd. | 4,000 | 13,889 | ||||||
Asia Cement Corp. | 18,540 | 21,294 | ||||||
ASUSTeK Computer Inc. | 6,000 | 59,898 | ||||||
AU Optronics Corp.a | 72,000 | 21,852 | ||||||
Capital Securities Corp. | 28,000 | 9,489 | ||||||
Catcher Technology Co. Ltd. | 6,000 | 29,949 | ||||||
Cathay Financial Holding Co. Ltd. | 69,300 | 66,174 | ||||||
Chang Hwa Commercial Bank Ltd. | 42,800 | 22,078 | ||||||
Cheng Shin Rubber Industry Co. Ltd. | 18,240 | 44,335 | ||||||
Cheng Uei Precision Industry Co. Ltd. | 6,059 | 12,037 | ||||||
Chicony Electronics Co. Ltd. | 8,280 | 17,472 | ||||||
Chimei Innolux Corp.a | 46,000 | 14,713 | ||||||
China Airlines Ltd. | 24,000 | 9,215 | ||||||
China Development Financial Holding Corp. | 117,200 | 27,783 | ||||||
China Life Insurance Co. Ltd. | 16,000 | 14,477 | ||||||
China Petrochemical Development Corp. | 16,000 | 12,794 | ||||||
China Steel Corp. | 111,650 | 95,617 | ||||||
Chinatrust Financial Holding Co. Ltd. | 98,348 | 58,777 | ||||||
Chunghwa Telecom Co. Ltd. | 38,000 | 114,821 | ||||||
Clevo Co. | 8,000 | 10,524 | ||||||
Compal Electronics Inc. | 40,000 | 35,057 | ||||||
CTCI Corp. | 4,000 | 7,572 | ||||||
Delta Electronics Inc. | 18,000 | 61,300 | ||||||
E Ink Holdings Inc. | 8,000 | 8,000 | ||||||
E.Sun Financial Holding Co. Ltd. | 37,800 | 21,076 | ||||||
Epistar Corp. | 8,000 | 16,240 | ||||||
Eternal Chemical Co. Ltd. | 14,000 | 11,569 | ||||||
EVA Airways Corp. | 18,000 | 10,096 | ||||||
Evergreen Marine Corp. Ltd. | 22,000 | 11,753 | ||||||
Everlight Electronics Co. Ltd. | 4,000 | 6,177 | ||||||
Far Eastern Department Stores Co. Ltd. | 8,320 | 8,181 | ||||||
Far Eastern New Century Corp. | 28,840 | 30,332 | ||||||
Far EasTone Telecommunications Co. Ltd. | 16,000 | 39,424 | ||||||
Farglory Land Development Co. Ltd. | 6,000 | 10,798 | ||||||
Feng Hsin Iron & Steel Co. Ltd. | 8,000 | 12,367 | ||||||
First Financial Holding Co. Ltd. | 59,360 | 34,386 |
Security | Shares | Value | ||||||
Formosa Chemicals & Fibre Corp. | 30,000 | $ | 77,426 | |||||
Formosa Petrochemical Corp. | 12,000 | 34,216 | ||||||
Formosa Plastics Corp. | 40,000 | 107,776 | ||||||
Formosa Taffeta Co. Ltd. | 12,000 | 10,938 | ||||||
Foxconn Technology Co. Ltd. | 6,300 | 23,979 | ||||||
Fubon Financial Holding Co. Ltd. | 50,396 | 50,058 | ||||||
Giant Manufacturing Co. Ltd. | 4,000 | 20,166 | ||||||
Highwealth Construction Corp. | 4,000 | 6,678 | ||||||
Hiwin Technologies Corp. | 2,100 | 15,145 | ||||||
Hon Hai Precision Industry Co. Ltd. | 99,000 | 280,298 | ||||||
Hotai Motor Co. Ltd. | 2,000 | 14,424 | ||||||
HTC Corp. | 6,000 | 51,684 | ||||||
Hua Nan Financial Holdings Co. Ltd. | 48,300 | 25,963 | ||||||
Inventec Corp. | 28,980 | 9,482 | ||||||
Kinsus Interconnect Technology Corp. | 4,000 | 11,445 | ||||||
LCY Chemical Corp. | 4,000 | 5,436 | ||||||
Lite-On Technology Corp. | 20,100 | 24,327 | ||||||
Macronix International Co. Ltd. | 52,139 | 14,066 | ||||||
MediaTek Inc. | 12,000 | 128,209 | ||||||
Mega Financial Holding Co. Ltd. | 79,170 | 59,607 | ||||||
MStar Semiconductor Inc. | 2,000 | 15,926 | ||||||
Nan Kang Rubber Tire Co. Ltd. | 8,000 | 11,592 | ||||||
Nan Ya Plastics Corp. | 46,000 | 86,468 | ||||||
Novatek Microelectronics Corp. Ltd. | 4,000 | 12,888 | ||||||
Pegatron Corp. | 16,000 | 20,059 | ||||||
Phison Electronics Corp. | 2,000 | 15,091 | ||||||
Pou Chen Corp. | 18,000 | 17,368 | ||||||
Powertech Technology Inc. | 6,000 | 11,318 | ||||||
President Chain Store Corp. | 6,000 | 31,952 | ||||||
Quanta Computer Inc. | 24,000 | 61,941 | ||||||
Radiant Opto-Electronics Corp. | 4,120 | 17,676 | ||||||
Realtek Semiconductor Corp. | 4,040 | 7,608 | ||||||
Ruentex Development Co. Ltd. | 6,000 | 10,056 | ||||||
Ruentex Industries Ltd. | 6,000 | 11,659 | ||||||
Shin Kong Financial Holding Co. Ltd.a | 52,000 | 14,080 | ||||||
Siliconware Precision Industries Co. Ltd. | 28,000 | 31,598 | ||||||
Simplo Technology Co. Ltd. | 2,200 | 13,001 | ||||||
Sino-American Silicon Products Inc. | 4,000 | 4,748 | ||||||
SinoPac Financial Holdings Co. Ltd. | 55,706 | 22,133 | ||||||
Standard Foods Corp. | 2,480 | 6,583 | ||||||
Synnex Technology International Corp. | 12,000 | 26,764 | ||||||
Taishin Financial Holdings Co. Ltd. | 52,298 | 19,993 | ||||||
Taiwan Business Bank Ltd.a | 35,360 | 10,153 |
40 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS ASIA INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Taiwan Cement Corp. | 32,000 | $ | 34,777 | |||||
Taiwan Cooperative Financial Holding Co. Ltd. | 39,900 | 21,914 | ||||||
Taiwan Fertilizer Co. Ltd. | 6,000 | 14,804 | ||||||
Taiwan Glass Industry Corp. | 10,450 | 10,380 | ||||||
Taiwan Mobile Co. Ltd. | 16,000 | 59,297 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 244,000 | 678,615 | ||||||
Teco Electric and Machinery Co. Ltd. | 18,000 | 11,899 | ||||||
TPK Holding Co. Ltd. | 2,591 | 33,479 | ||||||
Tripod Technology Corp. | 6,000 | 13,222 | ||||||
TSRC Corp. | 6,600 | 13,883 | ||||||
Tung Ho Steel Enterprise Corp. | 12,000 | 11,058 | ||||||
U-Ming Marine Transport Corp. | 8,000 | 12,020 | ||||||
Uni-President Enterprises Co. | 40,660 | 65,095 | ||||||
Unimicron Technology Corp. | 12,000 | 13,642 | ||||||
United Microelectronics Corp. | 120,000 | 48,078 | ||||||
Walsin Lihwa Corp.a | 34,000 | 10,693 | ||||||
Wintek Corp.a | 14,000 | 7,105 | ||||||
Wistron Corp. | 18,900 | 21,140 | ||||||
WPG Holdings Co. Ltd. | 12,000 | 14,143 | ||||||
Yang Ming Marine Transport Corp. | 16,000 | 6,384 | ||||||
Yuanta Financial Holding Co. Ltd. | 78,000 | 36,199 | ||||||
Yulon Motor Co. Ltd. | 8,000 | 14,530 | ||||||
Zhen Ding Technology Holding Ltd. | 2,100 | 6,661 | ||||||
|
| |||||||
3,672,922 | ||||||||
THAILAND — 3.66% | ||||||||
Advanced Information Service PCL NVDR | 8,200 | 56,786 | ||||||
Bangkok Bank PCL Foreign | 8,000 | 49,274 | ||||||
Bangkok Bank PCL NVDR | 5,000 | 29,998 | ||||||
Bank of Ayudhya PCL NVDR | 18,400 | 18,644 | ||||||
Banpu PCL NVDR | 1,400 | 20,105 | ||||||
BEC World PCL NVDR | 8,600 | 14,272 | ||||||
Charoen Pokphand Foods PCL NVDR | 30,800 | 31,208 | ||||||
CP All PCL NVDR | 45,200 | 49,765 | ||||||
Glow Energy PCL NVDR | 5,600 | 11,170 | ||||||
Indorama Ventures PCL NVDR | 14,200 | 13,029 | ||||||
IRPC PCL NVDR | 98,600 | 11,831 | ||||||
Kasikornbank PCL Foreign | 11,600 | 62,563 | ||||||
Kasikornbank PCL NVDR | 6,000 | 32,360 | ||||||
Krung Thai Bank PCL NVDR | 28,200 | 14,939 | ||||||
PTT Exploration & Production PCL NVDR | 11,800 | 56,110 | ||||||
PTT Global Chemical PCL NVDR | 15,000 | 29,919 |
Security | Shares | Value | ||||||
PTT PCL NVDR | 8,400 | $ | 88,463 | |||||
Siam Cement PCL Foreign | 3,000 | 35,136 | ||||||
Siam Cement PCL NVDR | 1,400 | 14,833 | ||||||
Siam Commercial Bank PCL NVDR | 16,000 | 76,592 | ||||||
Thai Oil PCL NVDR | 8,200 | 17,141 | ||||||
|
| |||||||
734,138 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $21,534,845) | 19,833,468 | |||||||
PREFERRED STOCKS — 0.86% |
| |||||||
SOUTH KOREA — 0.86% |
| |||||||
Hyundai Motor Co. Ltd. | 216 | 13,174 | ||||||
Hyundai Motor Co. Ltd. Series 2 | 372 | 24,983 | ||||||
LG Chem Ltd. | 104 | 8,332 | ||||||
Samsung Electronics Co. Ltd. | 198 | 127,215 | ||||||
|
| |||||||
173,704 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $171,923) |
| 173,704 | ||||||
RIGHTS — 0.00% |
| |||||||
THAILAND — 0.00% |
| |||||||
Krung Thai Bank PCL NVDRa | 7,050 | 900 | ||||||
|
| |||||||
900 | ||||||||
|
| |||||||
TOTAL RIGHTS | ||||||||
(Cost: $0) | 900 | |||||||
SHORT-TERM INVESTMENTS — 0.05% |
| |||||||
MONEY MARKET FUNDS — 0.05% |
| |||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%b,c | 9,178 | 9,178 | ||||||
|
| |||||||
9,178 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS | ||||||||
(Cost: $9,178) | 9,178 | |||||||
|
| |||||||
TOTAL INVESTMENTS | ||||||||
(Cost: $21,715,946) | 20,017,250 | |||||||
Other Assets, Less Liabilities — 0.27% |
| 53,415 | ||||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 20,070,665 | |||||
|
|
CONSOLIDATED SCHEDULESOF INVESTMENTS | 41 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS ASIA INDEX FUND
August 31, 2012
NVDR — Non-Voting Depositary Receipts
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 consolidated financial statements.
42 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments
iSHARES® MSCI EMERGING MARKETS CONSUMER DISCRETIONARY SECTOR INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 97.23% |
| |||||||
BRAZIL — 5.57% |
| |||||||
Anhanguera Educacional Participacoes SA | 1,102 | $ | 16,407 | |||||
Companhia Hering SA | 1,200 | 26,229 | ||||||
Cyrela Brazil Realty SA | 2,600 | 21,156 | ||||||
Lojas Renner SA | 1,102 | 36,345 | ||||||
MRV Engenharia e Participacoes SA | 2,702 | 15,687 | ||||||
PDG Realty SA Empreendimentos e Participacoes | 9,802 | 19,082 | ||||||
|
| |||||||
134,906 | ||||||||
CHILE — 1.58% |
| |||||||
S.A.C.I. Falabella SA | 4,192 | 38,182 | ||||||
|
| |||||||
38,182 | ||||||||
CHINA — 11.03% |
| |||||||
Anta Sports Products Ltd.a | 8,002 | 4,735 | ||||||
Belle International Holdings Ltd. | 41,001 | 74,007 | ||||||
Bosideng International Holdings Ltd. | 24,000 | 6,622 | ||||||
Brilliance China Automotive Holdings Ltd.b | 22,000 | 21,500 | ||||||
BYD Co. Ltd. Class Ha,b | 4,500 | 7,844 | ||||||
China ZhengTong Auto Services Holdings Ltd.b | 7,501 | 4,487 | ||||||
Dah Chong Hong Holdings Ltd. | 7,001 | 6,354 | ||||||
Daphne International Holdings Ltd. | 8,001 | 8,005 | ||||||
Dongfeng Motor Group Co. Ltd. Class H | 24,001 | 31,068 | ||||||
Geely Automobile Holdings Ltd. | 35,001 | 11,236 | ||||||
Golden Eagle Retail Group Ltd. | 6,000 | 11,000 | ||||||
GOME Electrical Appliances Holdings Ltd. | 88,000 | 7,602 | ||||||
Great Wall Motor Co. Ltd. Class H | 9,002 | 20,334 | ||||||
Guangzhou Automobile Group Co. Ltd. Class H | 20,001 | 13,951 | ||||||
Haier Electronics Group Co. Ltd.a,b | 7,001 | 8,241 | ||||||
Hengdeli Holdings Ltd. | 20,002 | 5,261 | ||||||
Intime Department Store Group Co. Ltd. | 8,501 | 8,735 | ||||||
Parkson Retail Group Ltd. | 12,501 | 10,154 | ||||||
Zhongsheng Group Holdings Ltd. | 5,000 | 6,285 | ||||||
|
| |||||||
267,421 | ||||||||
INDIA — 6.12% |
| |||||||
Bajaj Auto Ltd. | 728 | 21,165 | ||||||
Hero Motocorp Ltd. | 342 | 10,840 | ||||||
Mahindra & Mahindra Ltd. | 2,667 | 36,590 | ||||||
Maruti Suzuki (India) Ltd. | 299 | 6,146 |
Security | Shares | Value | ||||||
Tata Motors Ltd. | 12,868 | $ | 54,202 | |||||
Titan Industries Ltd. | 1,851 | 7,332 | ||||||
Zee Entertainment Enterprises Ltd. | 4,126 | 12,124 | ||||||
|
| |||||||
148,399 | ||||||||
INDONESIA — 5.14% |
| |||||||
PT Astra International Tbk | 176,000 | 124,594 | ||||||
|
| |||||||
124,594 | ||||||||
MALAYSIA — 4.60% |
| |||||||
Berjaya Sports Toto Bhd | 5,901 | 8,329 | ||||||
Genting Bhd | 17,800 | 51,386 | ||||||
Genting Malaysia Bhd | 25,901 | 29,262 | ||||||
Parkson Holdings Bhd | 5,301 | 7,940 | ||||||
UMW Holdings Bhd | 4,501 | 14,694 | ||||||
|
| |||||||
111,611 | ||||||||
MEXICO — 4.90% |
| |||||||
El Puerto de Liverpool SA de CV Series C1 | 1,601 | 12,946 | ||||||
Grupo Televisa SAB CPO | 23,102 | 105,855 | ||||||
|
| |||||||
118,801 | ||||||||
PHILIPPINES — 0.35% |
| |||||||
Jollibee Foods Corp. | 3,611 | 8,582 | ||||||
|
| |||||||
8,582 | ||||||||
POLAND — 0.40% |
| |||||||
Cyfrowy Polsat SAb | 1,657 | 6,871 | ||||||
TVN SA | 1,341 | 2,833 | ||||||
|
| |||||||
9,704 | ||||||||
SOUTH AFRICA — 17.34% |
| |||||||
Foschini Group Ltd. (The) | 1,762 | 28,222 | ||||||
Imperial Holdings Ltd. | 1,551 | 37,567 | ||||||
Mr. Price Group Ltd. | 2,057 | 33,216 | ||||||
Naspers Ltd. Class N | 3,460 | 200,740 | ||||||
Steinhoff International Holdings Ltd.b | 9,989 | 31,134 | ||||||
Truworths International Ltd. | 3,807 | 43,023 | ||||||
Woolworths Holdings Ltd. | 6,533 | 46,506 | ||||||
|
| |||||||
420,408 | ||||||||
SOUTH KOREA — 33.38% |
| |||||||
Hankook Tire Co. Ltd. | 792 | 29,038 | ||||||
Hyundai Department Store Co. Ltd. | 132 | 16,578 | ||||||
Hyundai Mobis Co. Ltd. | 598 | 162,067 | ||||||
Hyundai Motor Co. | 1,346 | 285,304 | ||||||
Hyundai Wia Corp. | 134 | 21,258 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 43 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS CONSUMER DISCRETIONARY SECTOR INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Kangwon Land Inc. | 842 | $ | 17,217 | |||||
Kia Motors Corp. | 2,320 | 151,514 | ||||||
LG Electronics Inc. | 923 | 57,269 | ||||||
Lotte Shopping Co. Ltd. | 87 | 24,498 | ||||||
Mando Corp. | 111 | 15,751 | ||||||
Shinsegae Co. Ltd. | 62 | 12,350 | ||||||
Woongjin Coway Co. Ltd. | 471 | 16,293 | ||||||
|
| |||||||
809,137 | ||||||||
TAIWAN — 5.53% |
| |||||||
Cheng Shin Rubber Industry Co. Ltd. | 15,960 | 38,793 | ||||||
China Motor Co. Ltd. | 5,002 | 4,576 | ||||||
Far Eastern Department Stores Co. Ltd. | 8,320 | 8,181 | ||||||
Formosa International Hotels Corp. | 1 | 11 | ||||||
Formosa Taffeta Co. Ltd. | 7,002 | 6,382 | ||||||
Giant Manufacturing Co. Ltd. | 3,001 | 15,130 | ||||||
Hotai Motor Co. Ltd. | 2,001 | 14,431 | ||||||
Nan Kang Rubber Tire Co. Ltd. | 4,000 | 5,796 | ||||||
Pou Chen Corp. | 19,000 | 18,333 | ||||||
Ruentex Industries Ltd. | 4,000 | 7,773 | ||||||
Yulon Motor Co. Ltd. | 8,001 | 14,532 | ||||||
|
| |||||||
133,938 | ||||||||
THAILAND — 0.58% |
| |||||||
BEC World PCL NVDR | 8,501 | 14,107 | ||||||
|
| |||||||
14,107 | ||||||||
TURKEY — 0.71% |
| |||||||
Arcelik AS | 2,053 | 11,360 | ||||||
Ford Otomotiv Sanayi AS | 600 | 5,891 | ||||||
|
| |||||||
17,251 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $2,445,580) |
| 2,357,041 | ||||||
PREFERRED STOCKS — 2.47% |
| |||||||
BRAZIL — 1.04% |
| |||||||
Lojas Americanas SA | 3,501 | 25,210 | ||||||
|
| |||||||
25,210 | ||||||||
SOUTH KOREA — 1.43% |
| |||||||
Hyundai Motor Co. Ltd. | 207 | 12,625 | ||||||
Hyundai Motor Co. Ltd. Series 2 | 327 | 21,961 | ||||||
|
| |||||||
34,586 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS | ||||||||
(Cost: $59,108) |
| 59,796 |
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS — 0.87% |
| |||||||
MONEY MARKET FUNDS — 0.87% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.23%c,d,e | 18,145 | $ | 18,145 | |||||
BlackRock Cash Funds: Prime, |
| |||||||
0.23%c,d,e | 1,375 | 1,375 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.06%c,d | 1,588 | 1,588 | ||||||
|
| |||||||
21,108 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $21,108) | 21,108 | |||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $2,525,796) | 2,437,945 | |||||||
Other Assets, Less Liabilities — (0.57)% |
| (13,727 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 2,424,218 | |||||
|
|
CPO — Certificates of Participation (Ordinary)
NVDR — Non-Voting 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 consolidated financial statements.
44 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments
iSHARES® MSCI EMERGING MARKETS ENERGY SECTOR CAPPED INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 86.25% |
| |||||||
BRAZIL — 9.01% |
| |||||||
Cosan SA Industria e Comercio | 200 | $ | 3,332 | |||||
OGX Petroleo e Gas Participacoes SAa | 5,902 | 18,325 | ||||||
Petroleo Brasileiro SA | 11,902 | 124,942 | ||||||
Ultrapar Participacoes SA | 1,601 | 34,244 | ||||||
|
| |||||||
180,843 | ||||||||
CHINA — 21.42% |
| |||||||
China Coal Energy Co. Class H | 21,000 | 17,491 | ||||||
China Oilfield Services Ltd. Class H | 10,001 | 15,963 | ||||||
China Petroleum & Chemical Corp. Class H | 78,002 | 73,414 | ||||||
China Shenhua Energy Co. Ltd. Class H | 16,000 | 58,276 | ||||||
CNOOC Ltd. | 74,001 | 140,059 | ||||||
Kunlun Energy Co. Ltd. | 4,000 | 6,838 | ||||||
PetroChina Co. Ltd. Class H | 86,000 | 103,671 | ||||||
Yanzhou Coal Mining Co. Ltd. Class H | 10,002 | 14,262 | ||||||
|
| |||||||
429,974 | ||||||||
COLOMBIA — 3.11% |
| |||||||
Ecopetrol SA SP ADR | 1,079 | 62,420 | ||||||
|
| |||||||
62,420 | ||||||||
HUNGARY — 0.78% |
| |||||||
MOL Hungarian Oil and Gas PLC | 213 | 15,695 | ||||||
|
| |||||||
15,695 | ||||||||
INDIA — 6.80% |
| |||||||
Bharat Petroleum Corp. Ltd. | 1,542 | 9,282 | ||||||
Cairn India Ltd.a | 1,141 | 6,975 | ||||||
Coal India Ltd. | 2,708 | 17,110 | ||||||
Oil & Natural Gas Corp. Ltd. | 3,884 | 19,265 | ||||||
Reliance Industries Ltd. | 6,086 | 83,853 | ||||||
|
| |||||||
136,485 | ||||||||
INDONESIA — 1.70% |
| |||||||
PT Adaro Energy Tbk | 75,502 | 10,848 | ||||||
PT Bukit Asam (Persero) Tbk | 5,000 | 7,656 | ||||||
PT Bumi Resources Tbk | 77,500 | 5,689 | ||||||
PT Indo Tambangraya Megah Tbk | 2,500 | 10,016 | ||||||
|
| |||||||
34,209 | ||||||||
MALAYSIA — 1.55% |
| |||||||
Bumi Armada Bhda | 6,801 | 8,250 | ||||||
Petronas Dagangan Bhd | 1,901 | 13,628 | ||||||
Sapurakencana Petroleum Bhda | 12,201 | 9,255 | ||||||
|
| |||||||
31,133 |
Security | Shares | Value | ||||||
POLAND — 1.84% |
| |||||||
Grupa Lotos SAa | 668 | $ | 5,331 | |||||
Polski Koncern Naftowy Orlen SAa | 1,585 | 18,652 | ||||||
Polskie Gornictwo Naftowe i Gazownictwo SAa | 10,564 | 12,957 | ||||||
|
| |||||||
36,940 | ||||||||
RUSSIA — 24.71% |
| |||||||
Gazprom OAO | 44,860 | 218,445 | ||||||
LUKOIL OAO | 2,070 | 117,666 | ||||||
NovaTek OAO SP GDRb | 414 | 49,390 | ||||||
Rosneft Oil Co. OJSC | 5,982 | 35,681 | ||||||
Surgutneftegas OJSC | 34,302 | 29,587 | ||||||
Tatneft OAO | 6,571 | 39,798 | ||||||
TMK OAO SP GDRb | 401 | 5,514 | ||||||
|
| |||||||
496,081 | ||||||||
SOUTH AFRICA — 4.75% |
| |||||||
Exxaro Resources Ltd. | 281 | 4,988 | ||||||
Sasol Ltd. | 2,101 | 90,419 | ||||||
|
| |||||||
95,407 | ||||||||
SOUTH KOREA — 3.95% |
| |||||||
GS Holdings Corp. | 272 | 15,582 | ||||||
S-Oil Corp. | 228 | 20,698 | ||||||
SK Innovation Co. Ltd. | 299 | 43,086 | ||||||
|
| |||||||
79,366 | ||||||||
TAIWAN — 0.85% |
| |||||||
Formosa Petrochemical Corp. | 6,000 | 17,108 | ||||||
|
| |||||||
17,108 | ||||||||
THAILAND — 4.99% |
| |||||||
Banpu PCL NVDR | 750 | 10,771 | ||||||
IRPC PCL NVDR | 61,600 | 7,392 | ||||||
PTT Exploration & Production PCL NVDR | 5,600 | 26,628 | ||||||
PTT PCL NVDR | 4,302 | 45,306 | ||||||
Thai Oil PCL NVDR | 4,801 | 10,035 | ||||||
|
| |||||||
100,132 | ||||||||
TURKEY — 0.79% |
| |||||||
Turkiye Petrol Rafinerileri AS | 695 | 15,903 | ||||||
|
| |||||||
15,903 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $2,150,622) |
| 1,731,696 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 45 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS ENERGY SECTOR CAPPED INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
PREFERRED STOCKS — 10.76% |
| |||||||
BRAZIL — 8.81% |
| |||||||
Petroleo Brasileiro SA | 17,300 | $ | 176,918 | |||||
|
| |||||||
176,918 | ||||||||
RUSSIA — 1.95% |
| |||||||
AK Transneft OAO | 10 | 16,293 | ||||||
Surgutneftegas OJSC | 35,502 | 22,867 | ||||||
|
| |||||||
39,160 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $294,526) |
| 216,078 | ||||||
SHORT-TERM INVESTMENTS — 2.93% |
| |||||||
MONEY MARKET FUNDS — 2.93% |
| |||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.06%c,d | 58,812 | 58,812 | ||||||
|
| |||||||
58,812 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $58,812) |
| 58,812 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $2,503,960) |
| 2,006,586 | ||||||
Other Assets, Less Liabilities — 0.06% |
| 1,241 | ||||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 2,007,827 | |||||
|
|
NVDR — Non-Voting 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 consolidated financial statements.
46 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments
iSHARES® MSCI EMERGING MARKETS GROWTH INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 92.53% |
| |||||||
BRAZIL — 6.49% |
| |||||||
ALL — America Latina Logistica SA | 2,600 | $ | 11,443 | |||||
Amil Participacoes SA | 800 | 8,122 | ||||||
Anhanguera Educacional Participacoes SA | 700 | 10,422 | ||||||
BR Malls Participacoes SA | 2,400 | 29,925 | ||||||
BR Properties SA | 1,100 | 13,390 | ||||||
BRF — Brasil Foods SA | 3,900 | 62,679 | ||||||
CCR SA | 5,300 | 47,644 | ||||||
CETIP SA — Mercados Organizados | 1,100 | 14,149 | ||||||
Cielo SA | 1,680 | 49,687 | ||||||
Companhia Hering SA | 900 | 19,672 | ||||||
Cosan SA Industria e Comercio | 700 | 11,661 | ||||||
Cyrela Brazil Realty SA | 1,700 | 13,832 | ||||||
Diagnosticos da America SA | 1,400 | 8,839 | ||||||
Duratex SA | 1,300 | 7,823 | ||||||
EcoRodovias Infraestrutura e Logistica SA | 1,100 | 9,135 | ||||||
Hypermarcas SAa | 2,400 | 15,412 | ||||||
JBS SAa | 1,400 | 3,981 | ||||||
Localiza Rent A Car SA | 700 | 12,351 | ||||||
Lojas Renner SA | 700 | 23,087 | ||||||
MMX Mineracao e Metalicos SAa | 600 | 1,611 | ||||||
MPX Energia SAa | 900 | 5,589 | ||||||
MRV Engenharia e Participacoes SA | 1,700 | 9,870 | ||||||
Multiplan Empreendimentos Imobiliarios SA | 500 | 12,789 | ||||||
Multiplus SA | 200 | 4,258 | ||||||
Natura Cosmeticos SA | 1,000 | 25,086 | ||||||
Odontoprev SA | 1,500 | 8,132 | ||||||
OGX Petroleo e Gas Participacoes SAa | 7,700 | 23,908 | ||||||
Oi SA | 1,400 | 6,313 | ||||||
Raia Drogasil SA | 900 | 9,523 | ||||||
Redecard SA | 1,000 | 16,535 | ||||||
Souza Cruz SA | 2,000 | 26,820 | ||||||
TIM Participacoes SA | 4,900 | 19,488 | ||||||
Totvs SA | 700 | 13,610 | ||||||
Tractebel Energia SA | 700 | 11,647 | ||||||
Ultrapar Participacoes SA | 1,900 | 40,640 | ||||||
Vale SA | 2,900 | 48,280 | ||||||
|
| |||||||
657,353 | ||||||||
CHILE — 1.64% |
| |||||||
AES Gener SA | 7,210 | 4,063 |
Security | Shares | Value | ||||||
Banco de Credito e Inversiones | 83 | $ | 5,235 | |||||
CAP SA | 155 | 5,221 | ||||||
Cencosud SA | 5,288 | 30,652 | ||||||
Colbun SAa | 45,848 | 12,992 | ||||||
Compania Cervecerias Unidas SA | 658 | 8,585 | ||||||
Empresa Nacional de Electricidad SA | 18,922 | 31,262 | ||||||
LATAM Airlines Group SA | 1,549 | 36,717 | ||||||
S.A.C.I. Falabella SA | 2,819 | 25,676 | ||||||
Vina Concha y Toro SA | 3,158 | 6,178 | ||||||
|
| |||||||
166,581 | ||||||||
CHINA — 17.13% | ||||||||
Agile Property Holdings Ltd. | 4,000 | 4,590 | ||||||
Agricultural Bank of China Ltd. Class H | 126,000 | 46,461 | ||||||
Anhui Conch Cement Co. Ltd. Class H | 7,500 | 18,720 | ||||||
AviChina Industry & Technology Co. Ltd. Class H | 12,000 | 4,332 | ||||||
BBMG Corp. Class H | 3,000 | 1,826 | ||||||
Beijing Capital International Airport Co. Ltd. Class H | 12,000 | 8,200 | ||||||
Beijing Enterprises Holdings Ltd. | 3,000 | 19,842 | ||||||
Belle International Holdings Ltd. | 27,000 | 48,735 | ||||||
Brilliance China Automotive Holdings Ltd.a | 14,000 | 13,682 | ||||||
BYD Co. Ltd. Class Ha | 2,500 | 4,358 | ||||||
China Coal Energy Co. Class H | 25,000 | 20,822 | ||||||
China Communications Construction Co. Ltd. | 25,000 | 19,210 | ||||||
China Communications Services Corp. Ltd. Class Hb | 16,000 | 8,891 | ||||||
China Gas Holdings Ltd. | 18,000 | 9,840 | ||||||
China Life Insurance Co. Ltd. Class H | 44,000 | 117,711 | ||||||
China Longyuan Power Group Corp. Ltd. Class Hb | 12,000 | 7,782 | ||||||
China Mengniu Dairy Co. Ltd.b | 7,000 | 21,073 | ||||||
China Merchants Bank Co. Ltd. Class H | 23,000 | 39,676 | ||||||
China Minsheng Banking Corp. Ltd. Class H | 11,000 | 8,963 | ||||||
China National Building Material Co. Ltd. Class H | 18,000 | 16,848 | ||||||
China Oilfield Services Ltd. Class H | 10,000 | 15,961 | ||||||
China Overseas Land & Investment Ltd. | 24,000 | 54,212 | ||||||
China Pacific Insurance (Group) Co. Ltd. Class H | 10,400 | 30,840 | ||||||
China Railway Construction Corp. Ltd. Class H | 11,500 | 8,688 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 47 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS GROWTH INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
China Resources Cement Holdings Ltd. | 12,000 | $ | 5,291 | |||||
China Resources Enterprise Ltd. | 8,000 | 23,774 | ||||||
China Resources Gas Group Ltd. | 4,000 | 7,870 | ||||||
China Resources Land Ltd. | 12,000 | 23,176 | ||||||
China Resources Power Holdings | 10,000 | 21,376 | ||||||
China Shanshui Cement Group Ltd. | 10,000 | 5,222 | ||||||
China Shenhua Energy Co. Ltd. Class H | 19,500 | 71,023 | ||||||
China State Construction International Holdings Ltd. | 8,000 | 8,520 | ||||||
China Taiping Insurance Holdings | 4,800 | 6,399 | ||||||
China Unicom (Hong Kong) Ltd. | 30,000 | 47,497 | ||||||
China Yurun Food Group Ltd.a,b | 4,000 | 2,444 | ||||||
China ZhengTong Auto Services Holdings Ltd.a,b | 5,500 | 3,290 | ||||||
CNOOC Ltd. | 103,000 | 194,945 | ||||||
Country Garden Holdings Co. Ltd.a | 13,638 | 4,783 | ||||||
CSR Corp Ltd. Class H | 11,000 | 7,460 | ||||||
Dah Chong Hong Holdings Ltd. | 5,000 | 4,538 | ||||||
Daphne International Holdings Ltd. | 6,000 | 6,003 | ||||||
Dongfang Electric Corp. Ltd. Class H | 2,000 | 2,728 | ||||||
Dongfeng Motor Group Co. Ltd. Class H | 16,000 | 20,711 | ||||||
ENN Energy Holdings Ltd. | 4,000 | 15,781 | ||||||
Evergrande Real Estate Group Ltd. | 30,000 | 11,449 | ||||||
Far East Horizon Ltd. | 7,000 | 4,855 | ||||||
Geely Automobile Holdings Ltd. | 25,000 | 8,026 | ||||||
Golden Eagle Retail Group Ltd. | 4,000 | 7,333 | ||||||
GOME Electrical Appliances Holdings Ltd. | 60,000 | 5,183 | ||||||
Great Wall Motor Co. Ltd. Class Hb | 6,000 | 13,553 | ||||||
Guangzhou Automobile Group Co. Ltd. Class H | 14,000 | 9,765 | ||||||
Haier Electronics Group Co. Ltd.a | 5,000 | 5,886 | ||||||
Hengan International Group Co. Ltd. | 4,500 | 45,254 | ||||||
Hengdeli Holdings Ltd. | 16,000 | 4,208 | ||||||
Huabao International Holdings Ltd.b | 12,000 | 6,158 | ||||||
Intime Department Store Group Co. Ltd. | 5,500 | 5,652 | ||||||
Kunlun Energy Co. Ltd. | 18,000 | 30,773 | ||||||
Lenovo Group Ltd. | 36,000 | 29,241 | ||||||
Longfor Properties Co. Ltd. | 8,000 | 11,531 | ||||||
Minmetals Resources Ltd.a | 12,000 | 4,471 | ||||||
Nine Dragons Paper (Holdings) Ltd. | 9,000 | 4,050 | ||||||
Parkson Retail Group Ltd. | 8,500 | 6,904 | ||||||
PICC Property and Casualty Co. Ltd. Class H | 16,000 | 19,246 |
Security | Shares | Value | ||||||
Ping An Insurance (Group) Co. of China Ltd. | 11,000 | $ | 79,420 | |||||
Sany Heavy Equipment International Holdings Co. Ltd. | 6,000 | 3,110 | ||||||
Shandong Weigao Group Medical Polymer Co. Ltd. Class H | 8,000 | 8,808 | ||||||
Shanghai Pharmaceuticals Holding Co. Ltd. Class H | 3,200 | 5,462 | ||||||
Sihuan Pharmaceutical Holdings | 14,000 | 5,595 | ||||||
Sinopharm Group Co. Ltd. Class Hb | 4,800 | 15,255 | ||||||
Sun Art Retail Group Ltd. | 11,500 | 14,515 | ||||||
Tencent Holdings Ltd. | 6,000 | 183,336 | ||||||
Tingyi (Cayman Islands) Holding Corp. | 12,000 | 35,507 | ||||||
Tsingtao Brewery Co. Ltd. Class H | 2,000 | 10,727 | ||||||
Uni-President China Holdings Ltd. | 6,000 | 6,189 | ||||||
Want Want China Holdings Ltd. | 35,000 | 43,320 | ||||||
Weichai Power Co. Ltd. Class H | 1,200 | 3,172 | ||||||
Wumart Stores Inc. Class Hb | 3,000 | 5,059 | ||||||
Yingde Gases Group Co. Ltd.b | 6,000 | 4,649 | ||||||
Zhaojin Mining Industry Co. Ltd. Class H | 5,000 | 6,614 | ||||||
Zhongsheng Group Holdings Ltd. | 3,500 | 4,400 | ||||||
Zhuzhou CSR Times Electric Co. Ltd. Class Hb | 3,000 | 7,241 | ||||||
Zijin Mining Group Co. Ltd. Class Hb | 34,000 | 10,652 | ||||||
Zoomlion Heavy Industry Science and Technology Co. Ltd. Class Hb | 7,400 | 7,919 | ||||||
ZTE Corp. Class H | 3,600 | 4,762 | ||||||
|
| |||||||
1,733,344 | ||||||||
COLOMBIA — 0.97% |
| |||||||
Bancolombia SA SP ADR | 1,017 | 58,437 | ||||||
Ecopetrol SA SP ADR | 682 | 39,454 | ||||||
|
| |||||||
97,891 | ||||||||
CZECH REPUBLIC — 0.39% |
| |||||||
CEZ AS | 1,007 | 39,548 | ||||||
|
| |||||||
39,548 | ||||||||
EGYPT — 0.35% |
| |||||||
Orascom Construction Industries SAE SP GDR | 781 | 35,106 | ||||||
|
| |||||||
35,106 | ||||||||
HUNGARY — 0.28% |
| |||||||
MOL Hungarian Oil and Gas PLC | 255 | 18,789 |
48 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS GROWTH INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Richter Gedeon Nyrt | 55 | $ | 9,388 | |||||
|
| |||||||
28,177 | ||||||||
INDIA — 6.71% |
| |||||||
Adani Enterprises Ltd. | 1,300 | 3,641 | ||||||
Adani Ports and Special Economic Zone Ltd. | 2,390 | 4,887 | ||||||
Asian Paints Ltd. | 185 | 12,108 | ||||||
Axis Bank Ltd. | 799 | 14,246 | ||||||
Bajaj Auto Ltd. | 496 | 14,420 | ||||||
Bharti Airtel Ltd. | 3,362 | 14,977 | ||||||
Cipla Ltd. | 2,008 | 13,590 | ||||||
Coal India Ltd. | 999 | 6,312 | ||||||
Dabur India Ltd. | 2,683 | 5,911 | ||||||
Dr. Reddy’s Laboratories Ltd. | 606 | 18,277 | ||||||
Godrej Consumer Products Ltd. | 555 | 6,908 | ||||||
HCL Technologies Ltd. | 620 | 6,068 | ||||||
HDFC Bank Ltd. | 8,903 | 95,288 | ||||||
Hindustan Unilever Ltd. | 4,885 | 45,236 | ||||||
Housing Development Finance Corp. Ltd. | 7,406 | 97,899 | ||||||
Idea Cellular Ltd.a | 3,908 | 5,245 | ||||||
ITC Ltd. | 13,334 | 64,159 | ||||||
Jaiprakash Associates Ltd. | 4,730 | 5,489 | ||||||
Jindal Steel & Power Ltd. | 2,205 | 13,959 | ||||||
Kotak Mahindra Bank Ltd. | 1,629 | 16,813 | ||||||
LIC Housing Finance Ltd. | 1,534 | 6,621 | ||||||
Lupin Ltd. | 910 | 9,703 | ||||||
Maruti Suzuki (India) Ltd. | 259 | 5,323 | ||||||
Ranbaxy Laboratories Ltd.a | 255 | 2,529 | ||||||
Reliance Power Ltd.a | 3,510 | 4,808 | ||||||
Satyam Computer Services Ltd.a | 3,798 | 6,367 | ||||||
Shriram Transport Finance Co. Ltd. | 740 | 8,450 | ||||||
Siemens Ltd. | 424 | 5,169 | ||||||
Sun Pharmaceuticals Industries Ltd. | 1,843 | 22,146 | ||||||
Tata Consultancy Services Ltd. | 2,754 | 66,529 | ||||||
Tata Motors Ltd. | 8,072 | 34,000 | ||||||
Titan Industries Ltd. | 1,398 | 5,538 | ||||||
Ultratech Cement Ltd. | 374 | 11,389 | ||||||
United Spirits Ltd. | 509 | 8,868 | ||||||
Wipro Ltd. | 1,550 | 10,104 | ||||||
Zee Entertainment Enterprises Ltd. | 2,007 | 5,898 | ||||||
|
| |||||||
678,875 | ||||||||
INDONESIA — 2.55% |
| |||||||
PT Astra International Tbk | 60,000 | 42,475 |
Security | Shares | Value | ||||||
PT Bank Central Asia Tbk | 71,500 | $ | 58,115 | |||||
PT Bank Rakyat Indonesia (Persero) Tbk | 41,000 | 29,885 | ||||||
PT Bukit Asam (Persero) Tbk | 3,500 | 5,359 | ||||||
PT Bumi Resources Tbk | 92,500 | 6,791 | ||||||
PT Charoen Pokphand Indonesia Tbk | 43,000 | 12,176 | ||||||
PT Gudang Garam Tbk | 2,500 | 13,136 | ||||||
PT Indo Tambangraya Megah Tbk | 1,500 | 6,009 | ||||||
PT Indocement Tunggal Prakarsa Tbk | 8,500 | 18,052 | ||||||
PT Indosat Tbk | 7,500 | 4,012 | ||||||
PT Jasa Marga (Persero) Tbk | 8,000 | 4,824 | ||||||
PT Kalbe Farma Tbk | 26,500 | 10,769 | ||||||
PT Unilever Indonesia Tbk | 6,500 | 18,474 | ||||||
PT United Tractors Tbk | 10,000 | 21,028 | ||||||
PT XL Axiata Tbk | 10,000 | 7,551 | ||||||
|
| |||||||
258,656 | ||||||||
MALAYSIA — 3.88% |
| |||||||
AirAsia Bhd | 7,300 | 8,061 | ||||||
Axiata Group Bhd | 14,200 | 27,223 | ||||||
Berjaya Sports Toto Bhd | 3,800 | 5,363 | ||||||
British American Tobacco (Malaysia) Bhd | 500 | 10,206 | ||||||
Bumi Armada Bhda | 6,300 | 7,642 | ||||||
CIMB Group Holdings Bhd | 21,200 | 52,856 | ||||||
DiGi.Com Bhd | 16,000 | 24,631 | ||||||
Felda Global Ventures Holdings Bhda | 6,300 | 10,082 | ||||||
Gamuda Bhd | 5,800 | 6,404 | ||||||
Genting Bhd | 12,000 | 34,642 | ||||||
Genting Plantations Bhd | 2,000 | 5,947 | ||||||
Hong Leong Bank Bhd | 3,200 | 13,765 | ||||||
IHH Healthcare Bhda | 11,000 | 11,266 | ||||||
IJM Corp. Bhd | 6,600 | 10,857 | ||||||
IOI Corp. Bhd | 5,500 | 9,048 | ||||||
Kuala Lumpur Kepong Bhd | 2,900 | 21,570 | ||||||
Malaysia Marine and Heavy Engineering Holdings Bhd | 2,800 | 4,284 | ||||||
MMC Corp. Bhd | 6,100 | 4,783 | ||||||
Parkson Holdings Bhd | 3,100 | 4,643 | ||||||
Petronas Chemicals Group Bhd | 14,300 | 29,657 | ||||||
Petronas Dagangan Bhd | 1,800 | 12,905 | ||||||
Petronas Gas Bhd | 4,200 | 26,051 | ||||||
Public Bank Bhd Foreign | 6,200 | 28,455 | ||||||
Sapurakencana Petroleum Bhda | 9,300 | 7,054 | ||||||
SP Setia Bhd | 3,200 | 3,646 | ||||||
Telekom Malaysia Bhd | 3,500 | 6,811 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 49 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS GROWTH INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
UEM Land Holdings Bhda | 7,700 | $ | 4,559 | |||||
|
| |||||||
392,411 | ||||||||
MEXICO — 4.85% | ||||||||
Alfa SAB de CV Series A | 700 | 11,038 | ||||||
America Movil SAB de CV Series L | 114,900 | 146,832 | ||||||
Arca Continental SAB de CV | 2,000 | 12,498 | ||||||
Coca-Cola FEMSA SAB de CV Series L | 2,300 | 27,919 | ||||||
Compartamos SAB de CV | 6,600 | 6,592 | ||||||
El Puerto de Liverpool SA de CV Series C1 | 1,300 | 10,512 | ||||||
Grupo Bimbo SAB de CV Series A | 10,000 | 21,651 | ||||||
Grupo Financiero Banorte SAB de CV Series O | 10,600 | 53,792 | ||||||
Grupo Financiero Inbursa SAB de CV Series O | 6,100 | 16,456 | ||||||
Grupo Televisa SAB CPO | 7,400 | 33,907 | ||||||
Industrias Penoles SAB de CV | 810 | 32,915 | ||||||
Mexichem SAB de CV | 4,569 | 20,308 | ||||||
Minera Frisco SAB de CV Series A1a | 3,800 | 14,476 | ||||||
Wal-Mart de Mexico SAB de CV Series V | 31,100 | 82,560 | ||||||
|
| |||||||
491,456 | ||||||||
PERU — 0.74% | ||||||||
Compania de Minas Buenaventura SA SP ADR | 572 | 19,826 | ||||||
Credicorp Ltd. | 455 | 54,841 | ||||||
|
| |||||||
74,667 | ||||||||
PHILIPPINES — 0.91% | ||||||||
Aboitiz Equity Ventures Inc. | 11,100 | 12,795 | ||||||
Ayala Land Inc. | 32,800 | 17,462 | ||||||
DMCI Holdings Inc. | 4,000 | 5,504 | ||||||
Energy Development Corp. | 38,700 | 5,500 | ||||||
International Container Terminal Services Inc. | 4,300 | 7,001 | ||||||
Jollibee Foods Corp. | 2,720 | 6,465 | ||||||
Manila Electric Co. | 950 | 5,591 | ||||||
SM Investments Corp. | 1,040 | 17,525 | ||||||
SM Prime Holdings Inc. | 43,500 | 14,474 | ||||||
|
| |||||||
92,317 | ||||||||
POLAND — 1.44% | ||||||||
Asseco Poland SA | 372 | 4,973 | ||||||
Bank Pekao SA | 435 | 19,742 | ||||||
BRE Bank SAa | 82 | 7,540 | ||||||
Cyfrowy Polsat SAa | 1,267 | 5,254 |
Security | Shares | Value | ||||||
Eurocash SA | 373 | $ | 4,496 | |||||
Kernel Holding SAa | 277 | 5,676 | ||||||
Polska Grupa Energetyczna SA | 1,410 | 7,942 | ||||||
Polskie Gornictwo Naftowe i Gazownictwo SAa | 11,477 | 14,077 | ||||||
Powszechna Kasa Oszczednosci Bank Polski SA | 4,139 | 44,405 | ||||||
Synthos SA | 3,818 | 6,282 | ||||||
Telekomunikacja Polska SA | 4,354 | 21,781 | ||||||
TVN SA | 1,686 | 3,562 | ||||||
|
| |||||||
145,730 | ||||||||
RUSSIA — 5.78% | ||||||||
Federal Grid Co. of Unified Energy System OJSCa | 1,880,000 | 11,625 | ||||||
Inter RAO UES OJSCa | 4,800,000 | 3,847 | ||||||
LSR Group OJSC SP GDRc | 993 | 4,096 | ||||||
Magnit OJSC SP GDRc | 1,467 | 46,783 | ||||||
Mobile TeleSystems OJSC SP ADR | 2,968 | 54,641 | ||||||
NovaTek OAO SP GDRc | 542 | 64,661 | ||||||
Rosneft Oil Co. OJSC | 7,550 | 45,033 | ||||||
Rostelecom OJSC | 6,680 | 25,512 | ||||||
RusHydro OJSC | 700,000 | 17,693 | ||||||
Sberbank of Russia | 51,800 | 149,292 | ||||||
Severstal OAO | 1,170 | 13,371 | ||||||
Sistema JSFC SP GDRc | 313 | 6,169 | ||||||
Surgutneftegas OJSC | 17,800 | 15,354 | ||||||
Tatneft OAO | 8,480 | 51,360 | ||||||
TMK OAO SP GDRc | 455 | 6,256 | ||||||
Uralkali OJSC | 7,600 | 58,075 | ||||||
VTB Bank OJSC | 6,560,000 | 10,837 | ||||||
|
| |||||||
584,605 | ||||||||
SOUTH AFRICA — 8.04% | ||||||||
African Rainbow Minerals Ltd. | 292 | 5,093 | ||||||
Anglo American Platinum Ltd. | 222 | 11,035 | ||||||
AngloGold Ashanti Ltd. | 2,226 | 69,430 | ||||||
ArcelorMittal South Africa Ltd.a | 1,099 | 5,294 | ||||||
Aspen Pharmacare Holdings Ltd.a | 1,675 | 28,520 | ||||||
Barloworld Ltd. | 541 | 4,557 | ||||||
Bidvest Group Ltd. | 1,638 | 39,645 | ||||||
Discovery Holdings Ltd. | 1,931 | 13,215 | ||||||
Exxaro Resources Ltd. | 161 | 2,858 | ||||||
Foschini Group Ltd. (The) | 1,145 | 18,340 |
50 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS GROWTH INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Gold Fields Ltd. | 1,343 | $ | 16,098 | |||||
Harmony Gold Mining Co. Ltd. | 944 | 7,643 | ||||||
Kumba Iron Ore Ltd.b | 259 | 14,750 | ||||||
Life Healthcare Group Holdings Ltd. | 5,559 | 21,040 | ||||||
Massmart Holdings Ltd. | 659 | 13,303 | ||||||
Mr. Price Group Ltd. | 1,333 | 21,525 | ||||||
MTN Group Ltd. | 9,965 | 185,621 | ||||||
Naspers Ltd. Class Nb | 2,265 | 131,409 | ||||||
Netcare Ltd. | 5,036 | 10,474 | ||||||
Northam Platinum Ltd. | 1,185 | 3,796 | ||||||
Pick’n Pay Stores Ltd. | 1,404 | 7,401 | ||||||
Pretoria Portland Cement Co. Ltd. | 1,823 | 5,753 | ||||||
Shoprite Holdings Ltd. | 2,420 | 48,521 | ||||||
SPAR Group Ltd. (The) | 1,077 | 15,832 | ||||||
Steinhoff International Holdings Ltd.a | 6,621 | 20,636 | ||||||
Tiger Brands Ltd. | 966 | 31,736 | ||||||
Truworths International Ltd. | 2,556 | 28,885 | ||||||
Woolworths Holdings Ltd. | 4,397 | 31,301 | ||||||
|
| |||||||
813,711 | ||||||||
SOUTH KOREA — 15.49% | ||||||||
AmorePacific Corp. | 20 | 20,606 | ||||||
AmorePacific Group | 16 | 6,120 | ||||||
Celltrion Inc. | 636 | 16,900 | ||||||
Cheil Industries Inc. | 137 | 12,497 | ||||||
CJ CheilJedang Corp. | 48 | 12,945 | ||||||
Daewoo International Corp. | 240 | 7,266 | ||||||
Doosan Heavy Industries & Construction Co. Ltd. | 89 | 4,644 | ||||||
Doosan Infracore Co. Ltd.a | 240 | 3,744 | ||||||
E-Mart Co. Ltd. | 110 | 23,946 | ||||||
Hankook Tire Co. Ltd. | 540 | 19,799 | ||||||
Honam Petrochemical Corp. | 74 | 15,261 | ||||||
Hyosung Corp. | 88 | 4,708 | ||||||
Hyundai Department Store Co. Ltd. | 58 | 7,284 | ||||||
Hyundai Engineering & Construction Co. Ltd. | 399 | 22,295 | ||||||
Hyundai Glovis Co. Ltd. | 80 | 16,076 | ||||||
Hyundai Hysco Co. Ltd. | 200 | 8,390 | ||||||
Hyundai Marine & Fire Insurance Co. Ltd. | 220 | 6,340 | ||||||
Hyundai Merchant Marine Co. Ltd.a | 190 | 4,588 | ||||||
Hyundai Mobis Co. Ltd. | 385 | 104,341 | ||||||
Hyundai Motor Co. | 314 | 66,557 | ||||||
Hyundai Wia Corp. | 97 | 15,388 |
Security | Shares | Value | ||||||
Kia Motors Corp. | 1,486 | $ | 97,048 | |||||
Korea Aerospace Industries Ltd. | 260 | 5,901 | ||||||
LG Electronics Inc. | 197 | 12,223 | ||||||
LG Household & Health Care Ltd. | 57 | 31,247 | ||||||
LG Innotek Co. Ltd.a | 78 | 6,173 | ||||||
Lotte Confectionery Co. Ltd. | 4 | 5,725 | ||||||
LS Industrial Systems Co. Ltd. | 98 | 5,571 | ||||||
Mando Corp. | 76 | 10,784 | ||||||
NCsoft Corp. | 91 | 20,251 | ||||||
NHN Corp. | 245 | 56,034 | ||||||
OCI Co. Ltd. | 83 | 13,899 | ||||||
ORION Corp. | 15 | 12,163 | ||||||
S1 Corp. | 60 | 3,120 | ||||||
Samsung C&T Corp. | 197 | 11,199 | ||||||
Samsung Electro-Mechanics Co. Ltd. | 356 | 30,529 | ||||||
Samsung Electronics Co. Ltd. | 643 | 698,750 | ||||||
Samsung Engineering Co. Ltd. | 179 | 30,369 | ||||||
Samsung SDI Co. Ltd. | 189 | 23,820 | ||||||
Samsung Techwin Co. Ltd. | 227 | 14,245 | ||||||
Shinsegae Co. Ltd. | 30 | 5,976 | ||||||
SK C&C Co. Ltd. | 143 | 13,801 | ||||||
SK Hynix Inc.a | 1,870 | 34,940 | ||||||
SK Innovation Co. Ltd. | 166 | 23,921 | ||||||
|
| |||||||
1,567,384 | ||||||||
TAIWAN — 10.98% | ||||||||
Advantech Co. Ltd. | 2,000 | 6,945 | ||||||
Airtac International Group | 1,000 | 4,875 | ||||||
Catcher Technology Co. Ltd. | 3,000 | 14,974 | ||||||
Cathay Financial Holding Co. Ltd. | 42,000 | 40,106 | ||||||
Cheng Shin Rubber Industry Co. Ltd. | 10,260 | 24,938 | ||||||
China Airlines Ltd. | 11,000 | 4,224 | ||||||
China Development Financial Holding Corp. | 26,000 | 6,163 | ||||||
China Life Insurance Co. Ltd. | 9,000 | 8,143 | ||||||
Chinatrust Financial Holding Co. Ltd. | 24,748 | 14,790 | ||||||
Clevo Co. | 4,000 | 5,262 | ||||||
CTCI Corp. | 3,000 | 5,679 | ||||||
Delta Electronics Inc. | 10,000 | 34,056 | ||||||
E.Sun Financial Holding Co. Ltd. | 22,050 | 12,295 | ||||||
Far Eastern Department Stores Co. Ltd. | 5,200 | 5,113 | ||||||
Far EasTone Telecommunications Co. Ltd. | 8,000 | 19,712 | ||||||
Formosa Petrochemical Corp. | 4,000 | 11,405 | ||||||
Foxconn Technology Co. Ltd. | 4,200 | 15,986 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 51 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS GROWTH INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Giant Manufacturing Co. Ltd. | 2,000 | $ | 10,083 | |||||
Hiwin Technologies Corp. | 1,050 | 7,572 | ||||||
Hon Hai Precision Industry Co. Ltd. | 58,300 | 165,064 | ||||||
Hotai Motor Co. Ltd. | 1,000 | 7,212 | ||||||
HTC Corp. | 3,000 | 25,842 | ||||||
Kinsus Interconnect Technology Corp. | 2,000 | 5,723 | ||||||
MediaTek Inc. | 2,000 | 21,368 | ||||||
Nan Kang Rubber Tire Co. Ltd. | 4,000 | 5,796 | ||||||
Pegatron Corp. | 8,000 | 10,030 | ||||||
Phison Electronics Corp. | 1,000 | 7,546 | ||||||
President Chain Store Corp. | 3,000 | 15,976 | ||||||
Radiant Opto-Electronics Corp. | 2,060 | 8,838 | ||||||
Richtek Technology Corp. | 1,000 | 5,693 | ||||||
Ruentex Industries Ltd. | 3,000 | 5,830 | ||||||
Simplo Technology Co. Ltd. | 2,100 | 12,410 | ||||||
Sino-American Silicon Products Inc. | 3,000 | 3,561 | ||||||
Standard Foods Corp. | 2,480 | 6,583 | ||||||
Synnex Technology International Corp. | 8,000 | 17,842 | ||||||
Taiwan Fertilizer Co. Ltd. | 3,000 | 7,402 | ||||||
Taiwan Glass Industry Corp. | 5,225 | 5,190 | ||||||
Taiwan Mobile Co. Ltd. | 7,000 | 25,942 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 144,000 | 400,494 | ||||||
TPK Holding Co. Ltd. | 1,295 | 16,733 | ||||||
TSRC Corp. | 1,100 | 2,314 | ||||||
Uni-President Enterprises Co. | 23,540 | 37,686 | ||||||
Wintek Corp.a | 8,000 | 4,060 | ||||||
Yuanta Financial Holding Co. Ltd. | 47,000 | 21,812 | ||||||
Yulon Motor Co. Ltd. | 5,000 | 9,082 | ||||||
Zhen Ding Technology Holding Ltd. | 1,000 | 3,172 | ||||||
|
| |||||||
1,111,522 | ||||||||
THAILAND — 2.11% | ||||||||
Bank of Ayudhya PCL NVDR | 11,500 | 11,652 | ||||||
Banpu PCL NVDR | 400 | 5,744 | ||||||
BEC World PCL NVDR | 5,400 | 8,961 | ||||||
Charoen Pokphand Foods PCL NVDR | 18,000 | 18,239 | ||||||
CP All PCL NVDR | 26,600 | 29,287 | ||||||
Indorama Ventures PCL NVDR | 8,600 | 7,891 | ||||||
Kasikornbank PCL Foreign | 7,000 | 37,753 | ||||||
Kasikornbank PCL NVDR | 3,400 | 18,337 | ||||||
PTT Exploration & Production PCL NVDR | 6,300 | 29,957 | ||||||
Siam Cement PCL Foreign | 1,300 | 15,226 |
Security | Shares | Value | ||||||
Siam Commercial Bank PCL NVDR | 6,300 | $ | 30,158 | |||||
|
| |||||||
213,205 | ||||||||
TURKEY — 1.80% | ||||||||
Akbank TAS | 2,638 | 10,418 | ||||||
Anadolu Efes Biracilik ve Malt Sanayii AS | 1,235 | 17,254 | ||||||
BIM Birlesik Magazalar AS | 610 | 25,080 | ||||||
Coca-Cola Icecek AS | 396 | 7,057 | ||||||
Emlak Konut Gayrimenkul Yatirim Ortakligi AS | 4,227 | 6,185 | ||||||
Koza Altin Isletmeleri AS | 306 | 6,026 | ||||||
TAV Havalimanlari Holding AS | 1,162 | 6,046 | ||||||
Turk Hava Yollari AOa | 1,891 | 3,744 | ||||||
Turkcell Iletisim Hizmetleri ASa | 2,339 | 13,895 | ||||||
Turkiye Garanti Bankasi AS | 13,510 | 57,962 | ||||||
Turkiye Halk Bankasi AS | 1,829 | 16,499 | ||||||
Turkiye Vakiflar Bankasi TAO Class D | 2,409 | 5,459 | ||||||
Yapi ve Kredi Bankasi ASa | 2,669 | 6,225 | ||||||
|
| |||||||
181,850 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $9,719,550) |
| 9,364,389 | ||||||
PREFERRED STOCKS — 7.18% |
| |||||||
BRAZIL — 6.74% |
| |||||||
Banco Bradesco SA | 11,200 | 182,154 | ||||||
Banco do Estado do Rio Grande do Sul SA Class B | 1,000 | 8,157 | ||||||
Braskem SA Class A | 800 | 5,047 | ||||||
Companhia Brasileira de Distribuicao Grupo Pao de Acucar Class A | 600 | 25,253 | ||||||
Companhia de Bebidas das Americas | 4,400 | 166,650 | ||||||
Companhia Energetica de Minas Gerais | 2,875 | 49,096 | ||||||
Companhia Energetica de Sao Paulo Class B | 1,000 | 15,500 | ||||||
Itau Unibanco Holding SA | 8,500 | 132,796 | ||||||
Klabin SA | 2,300 | 10,315 | ||||||
Lojas Americanas SA | 2,429 | 17,489 | ||||||
Marcopolo SA | 800 | 4,487 | ||||||
Vale SA Class A | 4,000 | 65,410 | ||||||
|
| |||||||
682,354 |
52 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS GROWTH INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
CHILE — 0.34% | ||||||||
Sociedad Quimica y Minera de Chile SA Series B | 563 | $ | 34,707 | |||||
|
| |||||||
34,707 | ||||||||
RUSSIA — 0.10% | ||||||||
AK Transneft OAO | 3 | 4,888 | ||||||
Sberbank of Russia | 2,200 | 4,660 | ||||||
|
| |||||||
9,548 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $839,720) |
| 726,609 | ||||||
SHORT-TERM INVESTMENTS — 2.20% |
| |||||||
MONEY MARKET FUNDS — 2.20% |
| |||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.23%d,e,f | 207,169 | 207,169 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.23%d,e,f | 15,700 | 15,700 | ||||||
|
| |||||||
222,869 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $222,869) |
| 222,869 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $10,782,139) | 10,313,867 | |||||||
Other Assets, Less Liabilities — (1.91)% |
| (192,909 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 10,120,958 | |||||
|
|
CPO — Certificates of Participation (Ordinary)
NVDR — Non-Voting 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 | This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933. |
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 consolidated financial statements.
CONSOLIDATED SCHEDULESOF INVESTMENTS | 53 |
Table of Contents
Consolidated Schedule of Investments
iSHARES® MSCI EMERGING MARKETS MINIMUM VOLATILITY INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 94.60% |
| |||||||
BRAZIL — 5.04% |
| |||||||
CCR SA | 227,500 | $ | 2,045,095 | |||||
Cielo SA | 32,100 | 949,371 | ||||||
CPFL Energia SA | 203,000 | 2,151,006 | ||||||
EcoRodovias Infraestrutura e Logistica SA | 84,000 | 697,568 | ||||||
EDP Energias do Brasil SA | 420,000 | 2,684,705 | ||||||
Natura Cosmeticos SA | 59,500 | 1,492,595 | ||||||
Porto Seguro SA | 52,500 | 484,882 | ||||||
Redecard SA | 91,000 | 1,504,670 | ||||||
Souza Cruz SA | 259,000 | 3,473,246 | ||||||
Totvs SA | 10,500 | 204,147 | ||||||
Tractebel Energia SA | 217,000 | 3,610,517 | ||||||
Ultrapar Participacoes SA | 10,500 | 224,588 | ||||||
|
| |||||||
19,522,390 | ||||||||
CHILE — 5.86% |
| |||||||
AES Gener SA | 1,128,330 | 635,910 | ||||||
Aguas Andinas SA | 1,393,490 | 911,673 | ||||||
Banco de Chile | 16,411,325 | 2,311,185 | ||||||
Banco de Credito e Inversiones | 28,280 | 1,783,766 | ||||||
Colbun SAa | 9,766,190 | 2,767,392 | ||||||
CorpBanca SA | 226,587,445 | 2,698,480 | ||||||
E.CL SA | 79,905 | 194,148 | ||||||
Empresa Nacional de Electricidad SA | 1,690,885 | 2,793,604 | ||||||
Empresa Nacional de Telecomunicaciones SA | 51,415 | 991,561 | ||||||
Empresas CMPC SA | 64,715 | 240,414 | ||||||
LATAM Airlines Group SA | 246,260 | 5,837,331 | ||||||
S.A.C.I. Falabella SA | 51,590 | 469,895 | ||||||
Vina Concha y Toro SA | 535,885 | 1,048,329 | ||||||
|
| |||||||
22,683,688 | ||||||||
CHINA — 12.54% |
| |||||||
Agricultural Bank of China Ltd. Class H | 3,150,000 | 1,161,515 | ||||||
Bank of China Ltd. Class H | 8,435,000 | 3,066,778 | ||||||
Bank of Communications Co. Ltd. Class H | 490,000 | 320,297 | ||||||
China CITIC Bank Corp. Ltd. Class H | 840,000 | 400,709 | ||||||
China Construction Bank Corp. Class H | 3,745,000 | 2,462,466 | ||||||
China Life Insurance Co. Ltd. Class H | 700,000 | 1,872,683 |
Security | Shares | Value | ||||||
China Merchants Bank Co. Ltd. Class H | 227,500 | $ | 392,451 | |||||
China Minsheng Banking Corp. Ltd. | 5,950,000 | 4,848,219 | ||||||
China Mobile Ltd. | 332,500 | 3,549,525 | ||||||
China Pacific Insurance (Group) Co. Ltd. Class H | 581,000 | 1,722,869 | ||||||
China Petroleum & Chemical Corp. Class H | 1,190,000 | 1,120,000 | ||||||
China Resources Enterprise Ltd. | 140,000 | 416,052 | ||||||
China Resources Gas Group Ltd. | 210,000 | 413,164 | ||||||
China Resources Power Holdings Co. Ltd. | 700,000 | 1,496,342 | ||||||
China Telecom Corp. Ltd. Class H | 1,470,000 | 807,375 | ||||||
China Vanke Co. Ltd. Class B | 493,513 | 617,189 | ||||||
CSG Holding Co. Ltd. Class B | 264,100 | 162,418 | ||||||
Guangdong Investment Ltd. | 1,260,000 | 930,836 | ||||||
Hengan International Group Co. Ltd. | 297,500 | 2,991,781 | ||||||
Industrial and Commercial Bank of China Ltd. Class H | 5,075,000 | 2,748,106 | ||||||
Inner Mongolia Yitai Coal Co. Ltd. Class B | 199,500 | 1,086,477 | ||||||
Jiangsu Expressway Co. Ltd. Class H | 2,310,000 | 1,903,097 | ||||||
Kunlun Energy Co. Ltd. | 770,000 | 1,316,384 | ||||||
PetroChina Co. Ltd. Class H | 700,000 | 843,836 | ||||||
Shandong Weigao Group Medical Polymer Co. Ltd. Class H | 280,000 | 308,293 | ||||||
Shanghai Pharmaceuticals Holding Co. Ltd. Class H | 1,256,500 | 2,144,859 | ||||||
Sihuan Pharmaceutical Holdings Group Ltd. | 560,000 | 223,819 | ||||||
Sinopec Shanghai Petrochemical Co. Ltd. | 1,260,000 | 329,773 | ||||||
Sinopharm Group Co. Ltd. Class H | 182,000 | 578,411 | ||||||
Tencent Holdings Ltd. | 49,000 | 1,497,244 | ||||||
Tingyi (Cayman Islands) Holding Corp. | 1,190,000 | 3,521,096 | ||||||
Tsingtao Brewery Co. Ltd. Class H | 210,000 | 1,126,317 | ||||||
Zhejiang Expressway Co. Ltd. Class H | 2,730,000 | 1,802,108 | ||||||
ZTE Corp. Class H | 273,000 | 361,125 | ||||||
|
| |||||||
48,543,614 | ||||||||
COLOMBIA — 2.63% |
| |||||||
Almacenes Exito SA | 37,030 | 604,986 | ||||||
Cementos Argos SA | 450,424 | 1,753,295 | ||||||
Corporacion Financiera Colombiana SA | 40,880 | 739,605 |
54 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS MINIMUM VOLATILITY INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Ecopetrol SA | 1,849,330 | $ | 5,343,185 | |||||
Grupo Argos SA | 179,200 | 1,729,123 | ||||||
|
| |||||||
10,170,194 | ||||||||
CZECH REPUBLIC — 0.93% |
| |||||||
Telefonica O2 Czech Republic AS | 169,645 | 3,597,366 | ||||||
|
| |||||||
3,597,366 | ||||||||
EGYPT — 1.17% |
| |||||||
Commercial International Bank Egypt SAE | 739,445 | 3,645,881 | ||||||
Egyptian Kuwaiti Holding Co. SAE | 236,183 | 299,953 | ||||||
National Societe Generale Bank SAE | 113,189 | 586,277 | ||||||
|
| |||||||
4,532,111 | ||||||||
INDIA — 3.22% |
| |||||||
Bharat Petroleum Corp. Ltd. | 346,010 | 2,082,902 | ||||||
Cipla Ltd. | 340,445 | 2,304,009 | ||||||
Coal India Ltd. | 255,500 | 1,614,301 | ||||||
Dr. Reddy’s Laboratories Ltd. | 26,600 | 802,232 | ||||||
Infosys Ltd. | 25,795 | 1,095,169 | ||||||
Oil & Natural Gas Corp. Ltd. | 40,845 | 202,591 | ||||||
Piramal Healthcare Ltd. | 137,620 | 1,187,800 | ||||||
Sun Pharmaceuticals Industries Ltd. | 265,685 | 3,192,519 | ||||||
|
| |||||||
12,481,523 | ||||||||
INDONESIA — 5.38% |
| |||||||
PT Bank Central Asia Tbk | 5,897,500 | 4,793,458 | ||||||
PT Bank Mandiri (Persero) Tbk | 1,330,000 | 1,087,992 | ||||||
PT Bank Rakyat Indonesia (Persero) Tbk | 2,660,000 | 1,938,857 | ||||||
PT Indofood Sukses Makmur Tbk | 752,500 | 426,167 | ||||||
PT Semen Gresik (Persero) Tbk | 945,000 | 1,228,946 | ||||||
PT Telekomunikasi Indonesia (Persero) Tbk | 4,672,500 | 4,557,341 | ||||||
PT Unilever Indonesia Tbk | 2,397,500 | 6,814,080 | ||||||
|
| |||||||
20,846,841 | ||||||||
MALAYSIA — 8.95% |
| |||||||
Berjaya Sports Toto Bhd | 1,302,000 | 1,837,676 | ||||||
Bumi Armada Bhda | 1,802,500 | 2,186,422 | ||||||
Genting Malaysia Bhd | 290,500 | 328,201 | ||||||
Hong Leong Bank Bhd | 763,000 | 3,282,036 | ||||||
Malayan Banking Bhd | 1,582,000 | 4,632,837 | ||||||
Maxis Communications Bhd | 3,017,000 | 6,797,785 | ||||||
MISC Bhd | 203,000 | 276,774 | ||||||
Petronas Chemicals Group Bhd | 889,000 | 1,843,725 | ||||||
Petronas Dagangan Bhd | 448,000 | 3,211,778 |
Security | Shares | Value | ||||||
Petronas Gas Bhd | 364,000 | $ | 2,257,744 | |||||
PPB Group Bhd | 38,500 | 171,275 | ||||||
Public Bank Bhd Foreign | 1,249,500 | 5,734,623 | ||||||
Sime Darby Bhd | 511,000 | 1,604,388 | ||||||
Tenaga Nasional Bhd | 234,500 | 513,356 | ||||||
|
| |||||||
34,678,620 | ||||||||
MEXICO — 1.75% |
| |||||||
Arca Continental SAB de CV | 59,500 | 371,830 | ||||||
Coca-Cola FEMSA SAB de CV Series L | 63,000 | 764,735 | ||||||
El Puerto de Liverpool SA de CV Series C1 | 329,000 | 2,660,343 | ||||||
Grupo Modelo SAB de CV Series C | 255,500 | 2,300,965 | ||||||
Wal-Mart de Mexico SAB de CV Series V | 255,500 | 678,263 | ||||||
|
| |||||||
6,776,136 | ||||||||
MOROCCO — 0.29% |
| |||||||
Attijariwafa Bank | 28,560 | 1,117,445 | ||||||
|
| |||||||
1,117,445 | ||||||||
PERU — 1.88% |
| |||||||
Compania de Minas Buenaventura SA SP ADR | 66,220 | 2,295,185 | ||||||
Credicorp Ltd. | 41,475 | 4,998,982 | ||||||
|
| |||||||
7,294,167 | ||||||||
PHILIPPINES — 2.73% |
| |||||||
Aboitiz Power Corp. | 360,500 | 291,313 | ||||||
Ayala Corp. | 25,200 | 246,161 | ||||||
Bank of the Philippine Islands | 1,468,950 | 2,618,449 | ||||||
Energy Development Corp. | 1,298,500 | 184,552 | ||||||
Jollibee Foods Corp. | 348,950 | 829,352 | ||||||
Philippine Long Distance Telephone Co. | 69,825 | 4,547,130 | ||||||
San Miguel Corp. | 693,700 | 1,846,569 | ||||||
|
| |||||||
10,563,526 | ||||||||
POLAND — 1.10% |
| |||||||
Asseco Poland SA | 38,710 | 517,486 | ||||||
Cyfrowy Polsat SAa | 122,430 | 507,681 | ||||||
Polskie Gornictwo Naftowe i Gazownictwo SAa | 2,140,915 | 2,625,900 | ||||||
Telekomunikacja Polska SA | 118,300 | 591,803 | ||||||
|
| |||||||
4,242,870 | ||||||||
RUSSIA — 0.69% |
| |||||||
LUKOIL OAO | 47,215 | 2,683,873 | ||||||
|
| |||||||
2,683,873 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 55 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS MINIMUM VOLATILITY INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
SOUTH AFRICA — 8.59% |
| |||||||
Aspen Pharmacare Holdings Ltd.a | 258,160 | $ | 4,395,627 | |||||
Bidvest Group Ltd. | 40,915 | 990,290 | ||||||
Discovery Holdings Ltd. | 110,320 | 754,969 | ||||||
Foschini Group Ltd. (The) | 41,195 | 659,824 | ||||||
Growthpoint Properties Ltd. | 1,194,060 | 3,885,990 | ||||||
Life Healthcare Group Holdings Ltd. | 1,032,955 | 3,909,505 | ||||||
Massmart Holdings Ltd. | 15,050 | 303,821 | ||||||
Pick’n Pay Stores Ltd. | 187,740 | 989,653 | ||||||
Pretoria Portland Cement Co. Ltd. | 389,550 | 1,229,404 | ||||||
Redefine Properties Ltd. | 2,301,460 | 2,621,346 | ||||||
Remgro Ltd. | 188,055 | 3,210,668 | ||||||
Shoprite Holdings Ltd. | 195,965 | 3,929,065 | ||||||
Tiger Brands Ltd. | 38,220 | 1,255,635 | ||||||
Truworths International Ltd. | 234,675 | 2,652,049 | ||||||
Vodacom Group Ltd. | 194,495 | 2,468,657 | ||||||
|
| |||||||
33,256,503 | ||||||||
SOUTH KOREA — 9.83% |
| |||||||
AmorePacific Corp. | 2,905 | 2,993,011 | ||||||
Celltrion Inc.b | 25,242 | 670,747 | ||||||
Cheil Industries Inc. | 10,115 | 922,686 | ||||||
CJ CheilJedang Corp. | 2,380 | 641,868 | ||||||
E-Mart Co. Ltd. | 1,050 | 228,578 | ||||||
Hyundai Marine & Fire Insurance Co. Ltd. | 22,400 | 645,570 | ||||||
Kangwon Land Inc. | 62,300 | 1,273,866 | ||||||
Korea Electric Power Corp.a | 16,100 | 349,067 | ||||||
Korea Exchange Banka | 215,950 | 1,627,298 | ||||||
Korean Air Lines Co. Ltd.a | 14,700 | 615,402 | ||||||
KT Corp. | 11,200 | 339,566 | ||||||
KT Corp. SP ADR | 6,860 | 103,655 | ||||||
KT&G Corp. | 55,370 | 4,191,943 | ||||||
LG Household & Health Care Ltd. | 3,430 | 1,880,322 | ||||||
LG Uplus Corp. | 148,750 | 996,364 | ||||||
Lotte Shopping Co. Ltd. | 1,820 | 512,495 | ||||||
NCsoft Corp. | 2,870 | 638,691 | ||||||
NHN Corp.b | 11,270 | 2,577,561 | ||||||
S1 Corp. | 33,355 | 1,734,445 | ||||||
Samsung Electro-Mechanics Co. Ltd. | 3,990 | 342,163 | ||||||
Samsung Electronics Co. Ltd. | 3,185 | 3,461,148 | ||||||
Samsung Fire & Marine Insurance Co. Ltd. | 3,955 | 815,661 |
Security | Shares | Value | ||||||
Samsung Life Insurance Co. Ltd. | 23,590 | $ | 2,006,332 | |||||
Samsung SDI Co. Ltd. | 7,245 | 913,108 | ||||||
Shinhan Financial Group Co. Ltd. | 15,800 | 491,563 | ||||||
Shinsegae Co. Ltd.b | 3,955 | 787,776 | ||||||
SK C&C Co. Ltd. | 2,765 | 266,844 | ||||||
SK Telecom Co. Ltd. | 21,630 | 2,773,749 | ||||||
Woongjin Coway Co. Ltd. | 38,850 | 1,343,935 | ||||||
Yuhan Corp. | 16,205 | 1,913,822 | ||||||
|
| |||||||
38,059,236 | ||||||||
TAIWAN — 15.42% |
| |||||||
Advantech Co. Ltd. | 595,000 | 2,066,041 | ||||||
Asia Cement Corp. | 1,838,550 | 2,111,653 | ||||||
China Airlines Ltd. | 455,828 | 175,020 | ||||||
China Steel Corp. | 3,500,375 | 2,997,717 | ||||||
Chunghwa Telecom Co. Ltd. | 1,505,000 | 4,547,511 | ||||||
Compal Electronics Inc. | 990,000 | 867,667 | ||||||
Delta Electronics Inc. | 595,000 | 2,026,310 | ||||||
Far EasTone Telecommunications Co. Ltd. | 2,065,000 | 5,088,211 | ||||||
First Financial Holding Co. Ltd. | 2,300,200 | 1,332,459 | ||||||
Formosa Chemicals & Fibre Corp. | 980,000 | 2,529,264 | ||||||
Formosa Petrochemical Corp. | 1,225,000 | 3,492,872 | ||||||
Formosa Plastics Corp. | 875,000 | 2,357,601 | ||||||
Formosa Taffeta Co. Ltd. | 1,024,000 | 933,365 | ||||||
Giant Manufacturing Co. Ltd. | 210,000 | 1,058,729 | ||||||
Inventec Corp. | 5,110,800 | 1,672,259 | ||||||
Lite-On Technology Corp. | 527,475 | 638,408 | ||||||
Macronix International Co. Ltd. | 643,672 | 173,646 | ||||||
Nan Ya Plastics Corp. | 665,000 | 1,250,025 | ||||||
Nan Ya Printed Circuit Board Corp. | 115,000 | 184,301 | ||||||
President Chain Store Corp. | 315,000 | 1,677,490 | ||||||
Realtek Semiconductor Corp. | 636,300 | 1,198,201 | ||||||
Synnex Technology International Corp. | 1,155,000 | 2,576,008 | ||||||
Taiwan Cement Corp. | 1,190,000 | 1,293,262 | ||||||
Taiwan Cooperative Financial Holding Co. Ltd. | 6,198,900 | 3,404,624 | ||||||
Taiwan Mobile Co. Ltd. | 1,610,000 | 5,966,746 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 1,645,000 | 4,575,089 | ||||||
Transcend Information Inc. | 385,000 | 1,010,350 | ||||||
TSRC Corp. | 422,100 | 887,860 | ||||||
U-Ming Marine Transport Corp. | 875,000 | 1,314,647 |
56 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS MINIMUM VOLATILITY INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
United Microelectronics Corp. | 805,000 | $ | 322,527 | |||||
|
| |||||||
59,729,863 | ||||||||
THAILAND — 6.60% |
| |||||||
Advanced Information Service PCL NVDR | 948,500 | 6,568,518 | ||||||
Bangkok Bank PCL NVDR | 637,000 | 3,821,797 | ||||||
BEC World PCL NVDR | 1,375,500 | 2,282,623 | ||||||
Charoen Pokphand Foods PCL NVDR | 1,393,000 | 1,411,449 | ||||||
CP All PCL NVDR | 4,805,500 | 5,290,881 | ||||||
IRPC PCL NVDR | 6,272,000 | 752,600 | ||||||
Kasikornbank PCL NVDR | 483,000 | 2,604,978 | ||||||
Siam Commercial Bank PCL NVDR | 588,000 | 2,814,744 | ||||||
|
| |||||||
25,547,590 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $356,981,560) |
| 366,327,556 | ||||||
PREFERRED STOCKS — 4.82% |
| |||||||
BRAZIL — 2.74% | ||||||||
AES Tiete SA | 192,500 | 2,632,698 | ||||||
Companhia de Bebidas das Americas | 45,500 | 1,723,306 | ||||||
Companhia de Transmissao de Energia Eletrica Paulista | 63,000 | 1,400,311 | ||||||
Companhia Energetica de Minas Gerais | 77,050 | 1,315,780 | ||||||
Companhia Paranaense de Energia Class B | 136,500 | 2,448,059 | ||||||
Eletropaulo Metropolitana Eletricidade de Sao Paulo SA | 119,000 | 1,090,855 | ||||||
|
| |||||||
10,611,009 | ||||||||
CHILE — 0.06% |
| |||||||
Sociedad Quimica y Minera de Chile SA Series B | 3,885 | 239,498 | ||||||
|
| |||||||
239,498 | ||||||||
COLOMBIA — 1.05% |
| |||||||
Banco Davivienda SA | 179,830 | 2,119,707 | ||||||
Bancolombia SA | 40,390 | 582,820 | ||||||
Grupo Argos SA | 141,785 | 1,368,101 | ||||||
|
| |||||||
4,070,628 | ||||||||
RUSSIA — 0.50% |
| |||||||
Surgutneftegas OJSC | 2,975,000 | 1,916,223 | ||||||
|
| |||||||
1,916,223 |
Security | Shares | Value | ||||||
SOUTH KOREA — 0.47% |
| |||||||
Samsung Electronics Co. Ltd. | 2,835 | $ | 1,821,496 | |||||
|
| |||||||
1,821,496 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $19,905,647) | 18,658,854 | |||||||
SHORT-TERM INVESTMENTS — 0.42% |
| |||||||
MONEY MARKET FUNDS — 0.42% | ||||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.23%c,d,e | 622,705 | 622,705 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.23%c,d,e | 47,189 | 47,189 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%c,d | 932,627 | 932,627 | ||||||
|
| |||||||
1,602,521 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $1,602,521) | 1,602,521 | |||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $378,489,728) | 386,588,931 | |||||||
Other Assets, Less Liabilities — 0.16% | 638,143 | |||||||
|
| |||||||
NET ASSETS — 100.00% | $ | 387,227,074 | ||||||
|
|
NVDR — Non-Voting Depositary Receipts
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 consolidated financial statements.
CONSOLIDATED SCHEDULESOF INVESTMENTS | 57 |
Table of Contents
Consolidated Schedule of Investments
iSHARES® MSCI EMERGING MARKETS SMALL CAP INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 98.21% |
| |||||||
BRAZIL — 5.45% |
| |||||||
Aliansce Shopping Centers SA | 1,400 | $ | 14,000 | |||||
Arezzo Industria e Comercio SA | 1,000 | 16,742 | ||||||
Autometal SA | 1,400 | 13,455 | ||||||
Banco ABC Brasil SA Newa | 75 | 444 | ||||||
Brasil Brokers Participacoes SA | 3,600 | 11,745 | ||||||
Brasil Insurance Participacoes e Administracao SA | 1,100 | 10,571 | ||||||
Cremer SA | 1,300 | 9,284 | ||||||
Equatorial Energia SA | 1,500 | 11,496 | ||||||
Estacio Participacoes SA | 1,500 | 23,287 | ||||||
Eternit SA | 2,500 | 11,951 | ||||||
Even Construtora e Incorporadora SA | 4,200 | 15,938 | ||||||
EZ TEC Empreendimentos e Participacoes SA | 1,200 | 14,490 | ||||||
Fleury SA | 900 | 9,780 | ||||||
Gafisa SAa | 11,000 | 21,956 | ||||||
Grendene SA | 2,400 | 14,963 | ||||||
Helbor Empreendimentos SA | 3,600 | 19,304 | ||||||
HRT Participacoes em Petroleo SAa | 5,300 | 12,146 | ||||||
Iguatemi Empresa de Shopping Centers SA | 500 | 12,025 | ||||||
Iochpe-Maxion SA | 1,200 | 17,027 | ||||||
Julio Simoes Logistica SA | 1,800 | 9,732 | ||||||
Kroton Educacional SAa | 1,412 | 23,104 | ||||||
LLX Logistica SAa | 6,100 | 9,620 | ||||||
LPS Brasil — Consultoria de Imoveis SA | 900 | 15,702 | ||||||
Marfrig Alimentos SAa | 3,800 | 21,537 | ||||||
Mills Estruturas e Servicos de Engenharia SA | 1,200 | 17,742 | ||||||
Restoque Comercio e Confeccoes de Roupas SA | 2,700 | 11,457 | ||||||
Santos Brasil Participacoes SA | 700 | 11,626 | ||||||
Sao Martinho SA | 1,000 | 11,675 | ||||||
SLC Agricola SA | 1,400 | 14,697 | ||||||
Tecnisa SA | 2,400 | 10,113 | ||||||
Tegma Gestao Logistica SA | 900 | 14,194 | ||||||
TPI — Triunfo Participacoes e Investimentos SA | 1,800 | 8,365 | ||||||
Valid Solucoes e Servicos de Seguranca em Meios de Pagamento e Identificacao SA | 1,600 | 27,599 | ||||||
Vanguarda Agro SAa | 34,800 | 6,174 | ||||||
|
| |||||||
473,941 |
Security | Shares | Value | ||||||
CHILE — 1.67% |
| |||||||
Administradora de Fondos de Pensiones Provida SA | 3,427 | $ | 20,626 | |||||
Besalco SA | 10,865 | 18,518 | ||||||
Compania SudAmericana de Vapores SAa | 70,000 | 7,684 | ||||||
Inversiones Aguas Metropolitanas SA | 10,113 | 17,770 | ||||||
Norte Grande SA | 930,598 | 8,719 | ||||||
Parque Arauco SA | 11,413 | 21,523 | ||||||
SalfaCorp SA | 7,171 | 13,886 | ||||||
Sociedad Matriz SAAM SAa | 131,305 | 13,871 | ||||||
Sonda SA | 7,977 | 22,606 | ||||||
|
| |||||||
145,203 | ||||||||
CHINA — 14.53% |
| |||||||
361 Degrees International Ltd. | 43,000 | 11,365 | ||||||
Ajisen (China) Holdings Ltd. | 8,000 | 4,910 | ||||||
AMVIG Holdings Ltd. | 22,000 | 6,807 | ||||||
Anhui Expressway Co. Ltd. Class H | 18,000 | 7,566 | ||||||
Anxin-China Holdings Ltd. | 48,000 | 10,149 | ||||||
Asia Cement China Holdings Corp. | 24,000 | 8,973 | ||||||
Asian Citrus Holdings Ltd. | 20,000 | 9,489 | ||||||
Beijing Capital Land Ltd. Class H | 42,000 | 11,101 | ||||||
Beijing Enterprises Water Group Ltd. | 58,000 | 11,591 | ||||||
Biostime International Holdings Ltd. | 5,000 | 12,313 | ||||||
Boshiwa International Holding Ltd.a,b | 32,000 | 5,198 | ||||||
C C Land Holdings Ltd. | 53,000 | 11,070 | ||||||
China Automation Group Ltd. | 43,000 | 7,373 | ||||||
China Datang Corp. Renewable Power Co. Ltd. Class H | 84,000 | 7,798 | ||||||
China Everbright International Ltd. | 44,000 | 21,557 | ||||||
China High Speed Transmission Equipment Group Co. Ltd.a | 32,000 | 9,819 | ||||||
China Huiyuan Juice Group Ltd.a | 31,500 | 9,463 | ||||||
China Lilang Ltd. | 10,000 | 7,052 | ||||||
China Metal Recycling Holdings Ltd. | 9,600 | 7,661 | ||||||
China Modern Dairy Holdings Ltd.a | 41,000 | 10,625 | ||||||
China Oil and Gas Group Ltd.a | 180,000 | 18,102 | ||||||
China Overseas Grand Oceans Group Ltd. | 12,000 | 11,371 | ||||||
China Pharmaceutical Group Ltd.a | 60,000 | 17,019 | ||||||
China Power International Development Ltd. | 50,000 | 13,344 | ||||||
China Power New Energy Development Co. Ltd.a | 280,000 | 10,108 |
58 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS SMALL CAP INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
China Precious Metal Resources Holdings Co. Ltd.a | 60,000 | $ | 10,521 | |||||
China Rare Earth Holdings Ltd. | 52,000 | 11,196 | ||||||
China Shineway Pharmaceutical Group Ltd. | 7,000 | 10,541 | ||||||
China Singyes Solar Technologies Holdings Ltd. | 24,000 | 8,664 | ||||||
China South City Holdings Ltd. | 98,000 | 13,772 | ||||||
China Suntien Green Energy Corp. Ltd. Class H | 65,000 | 11,649 | ||||||
China Travel International Investment Hong Kong Ltd. | 78,000 | 13,375 | ||||||
China Vanadium Titano-Magnetite Mining Co. Ltd. | 65,000 | 9,386 | ||||||
China Water Affairs Group Ltd. | 50,000 | 12,442 | ||||||
China Wireless Technologies Ltd. | 72,000 | 12,810 | ||||||
Chinasoft International Ltd.a | 40,000 | 9,025 | ||||||
Chongqing Machinery & Electric Co. Ltd. Class H | 62,000 | 7,514 | ||||||
CITIC Dameng Holdings Ltd. | 88,000 | 8,169 | ||||||
CITIC Resources Holdings Ltd.a | 112,000 | 13,862 | ||||||
Comba Telecom Systems Holdings Ltd. | 23,000 | 5,931 | ||||||
Cosco International Holdings Ltd. | 32,000 | 12,377 | ||||||
Dazhong Transportation Group Co. Ltd. Class B | 21,600 | 9,720 | ||||||
DBA Telecommunications (Asia) Holdings Ltd. | 20,000 | 12,661 | ||||||
Digital China Holdings Ltd. | 18,000 | 29,009 | ||||||
Extrawell Pharmaceutical Holdings Ltd.a | 200,000 | 12,248 | ||||||
Fantasia Holdings Group Co. Ltd. | 79,500 | 7,482 | ||||||
First Tractor Co. Ltd. Class Ha | 12,000 | 9,159 | ||||||
Fufeng Group Ltd. | 26,000 | 8,615 | ||||||
Global Bio-Chem Technology Group Co. Ltd. | 44,000 | 4,368 | ||||||
Greentown China Holdings Ltd. | 13,000 | 13,610 | ||||||
Haitian International Holdings Ltd. | 12,000 | 12,114 | ||||||
Hangzhou Steam Turbine Co. Ltd. Class B | 13,080 | 13,289 | ||||||
Harbin Electric Co. Ltd. Class H | 16,000 | 12,893 | ||||||
Heng Tai Consumables Group Ltd.a | 432,000 | 9,023 | ||||||
Heng Xin China Holdings Ltd.a | 264,000 | 10,551 | ||||||
Hi Sun Technology (China) Ltd.a | 18,000 | 1,056 | ||||||
Hopson Development Holdings Ltd.a | 22,000 | 13,728 | ||||||
Hunan Nonferrous Metal Corp. Ltd. Class Ha | 42,000 | 12,400 | ||||||
Inspur International Ltd. | 335,000 | 9,588 | ||||||
Interchina Holdings Co. Ltd.a | 170,000 | 10,521 |
Security | Shares | Value | ||||||
Jiangsu Future Land Co. Ltd. Class B | 24,900 | $ | 15,463 | |||||
Ju Teng International Holdings Ltd. | 42,000 | 18,682 | ||||||
Kaisa Group Holdings Ltd.a | 42,000 | 7,419 | ||||||
Kingdee International Software Group Co. Ltd.a | 66,000 | 9,871 | ||||||
Kingsoft Corp. Ltd. | 24,000 | 11,108 | ||||||
KWG Property Holdings Ltd. | 12,000 | 6,173 | ||||||
Labixiaoxin Snacks Group Ltd. | 29,000 | 9,347 | ||||||
Li Ning Co. Ltd. | 22,500 | 10,791 | ||||||
Lijun International Pharmaceutical Holding Co. Ltd. | 30,000 | 8,548 | ||||||
Lumena Resources Corp. | 46,000 | 7,591 | ||||||
Luthai Textile Co. Ltd. Class B | 10,900 | 9,064 | ||||||
MIE Holdings Corp. | 28,000 | 6,678 | ||||||
Minth Group Ltd. | 14,000 | 15,595 | ||||||
New World Department Store China Ltd. | 17,000 | 9,227 | ||||||
North Mining Shares Co. Ltd.a | 290,000 | 14,769 | ||||||
NVC Lighting Holdings Ltd. | 54,000 | 10,025 | ||||||
PCD Stores Ltd. | 82,000 | 5,603 | ||||||
Peak Sport Products Co. Ltd. | 62,000 | 9,512 | ||||||
Ports Design Ltd. | 10,000 | 7,878 | ||||||
Renhe Commercial Holdings Co. Ltd.a | 234,000 | 9,503 | ||||||
REXLot Holdings Ltd. | 200,000 | 14,182 | ||||||
Semiconductor Manufacturing International Corp.a | 401,000 | 15,252 | ||||||
Shenzhen Expressway Co. Ltd. Class H | 22,000 | 7,857 | ||||||
Shenzhen International Holdings Ltd. | 265,000 | 17,766 | ||||||
Shenzhen Investment Ltd. | 82,000 | 18,607 | ||||||
Shenzhou International Group Holdings Ltd. | 9,000 | 14,829 | ||||||
Shougang Concord International Enterprises Co. Ltd.a | 290,000 | 13,086 | ||||||
Silver Grant International Industries Ltd. | 6,000 | 758 | ||||||
Sino Biopharmaceutical Ltd. | 64,000 | 25,002 | ||||||
Sino Oil And Gas Holdings Ltd.a | 265,000 | 5,330 | ||||||
Sinotrans Ltd. Class H | 99,000 | 13,402 | ||||||
Sinotrans Shipping Ltd. | 83,000 | 16,801 | ||||||
Skyworth Digital Holdings Ltd. | 36,000 | 14,713 | ||||||
Sparkle Roll Group Ltd. | 144,000 | 8,076 | ||||||
Sunac China Holdings Ltd. | 23,000 | 10,646 | ||||||
TCL Communication Technology Holdings Ltd. | 39,000 | 8,447 | ||||||
Tech Pro Technology Development Ltd.a | 18,000 | 6,684 | ||||||
Tianjin Development Holdings Ltd.a | 36,000 | 16,106 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 59 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS SMALL CAP INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Tianjin Port Development Holdings Ltd. | 102,000 | $ | 10,784 | |||||
Tianneng Power International Ltd. | 22,000 | 13,274 | ||||||
Tibet 5100 Water Resources Holdings Ltd. | 47,000 | 12,483 | ||||||
Towngas China Co. Ltd. | 11,000 | 8,495 | ||||||
Travelsky Technology Ltd. Class H | 25,000 | 12,990 | ||||||
Vinda International Holdings Ltd. | 11,000 | 17,189 | ||||||
VODone Ltd. | 78,000 | 6,537 | ||||||
West China Cement Ltd. | 54,000 | 8,424 | ||||||
Winsway Coking Coal Holding Ltd. | 42,000 | 5,253 | ||||||
Xingda International Holdings Ltd. | 24,000 | 7,179 | ||||||
Xinjiang Xinxin Mining Industry Co. Ltd. Class H | 43,000 | 7,429 | ||||||
XTEP International Holdings Ltd. | 25,500 | 9,304 | ||||||
Yanchang Petroleum International Ltd.a | 190,000 | 12,983 | ||||||
Yip’s Chemical Holdings Ltd. | 12,000 | 7,782 | ||||||
Yuexiu Real Estate Investment Trust | 45,000 | 20,944 | ||||||
Yuexiu Transport Infrastructure Ltd. | 34,000 | 14,773 | ||||||
Zhejiang Southeast Electric Power Co. Ltd. Class B | 22,600 | 11,345 | ||||||
|
| |||||||
1,262,652 | ||||||||
CZECH REPUBLIC — 0.49% |
| |||||||
Central European Media Enterprises Ltd. Class Aa | 1,652 | 9,280 | ||||||
Pegas Nonwovens SA | 671 | 15,417 | ||||||
Philip Morris CR AS | 31 | 17,729 | ||||||
|
| |||||||
42,426 | ||||||||
EGYPT — 0.29% |
| |||||||
Orascom Telecom Media And Technology Holding SAE SP GDR | 56,898 | 24,921 | ||||||
|
| |||||||
24,921 | ||||||||
INDIA — 7.02% |
| |||||||
Alstom T&D India Ltd. | 3,666 | 12,166 | ||||||
Amtek Auto Ltd. | 5,454 | 8,663 | ||||||
Andhra Bank | 4,310 | 6,989 | ||||||
Apollo Hospitals Enterprise Ltd. | 1,949 | 22,022 | ||||||
Ashok Leyland Ltd. | 37,060 | 13,725 | ||||||
Aurobindo Pharma Ltd. | 4,672 | 9,264 | ||||||
Bharat Forge Ltd. | 3,626 | 18,184 | ||||||
Biocon Ltd. | 2,349 | 11,092 | ||||||
CESC Ltd. | 2,507 | 13,814 | ||||||
Cox & Kings Ltd. | 3,244 | 7,576 | ||||||
Educomp Solutions Ltd. | 2,228 | 5,796 |
Security | Shares | Value | ||||||
EID Parry India Ltd. | 2,954 | $ | 11,412 | |||||
Emami Ltd. | 1,305 | 11,465 | ||||||
Federal Bank Ltd. | 3,042 | 22,228 | ||||||
Financial Technologies India Ltd. | 1,174 | 17,740 | ||||||
Fortis Healthcare Ltd.a | 3,836 | 6,269 | ||||||
Great Eastern Shipping Co. Ltd. (The) | 3,625 | 16,403 | ||||||
Gujarat Fluorochemicals Ltd. | 855 | 5,314 | ||||||
Gujarat Gas Co. Ltd. | 1,295 | 6,862 | ||||||
Gujarat Mineral Development Corp. Ltd. | 4,079 | 13,947 | ||||||
Gujarat State Petronet Ltd. | 6,127 | 8,636 | ||||||
GVK Power & Infrastructure Ltd.a | 52,220 | 10,467 | ||||||
Hexaware Technologies Ltd. | 8,836 | 19,546 | ||||||
Housing Development & Infrastructure Ltd.a | 9,467 | 11,377 | ||||||
India Infoline Ltd. | 12,290 | 11,765 | ||||||
Indiabulls Financial Services Ltd. | 5,417 | 17,894 | ||||||
Indian Hotels Co. Ltd. | 12,331 | 13,079 | ||||||
Indraprastha Gas Ltd. | 1,872 | 8,042 | ||||||
IRB Infrastructure Developers Ltd. | 4,791 | 10,788 | ||||||
IVRCL Ltd. Class L | 15,942 | 11,005 | ||||||
Jammu & Kashmir Bank Ltd. | 868 | 14,353 | ||||||
Jindal Saw Ltd. | 7,375 | 15,632 | ||||||
Jubilant Foodworks Ltd.a | 532 | 11,144 | ||||||
Kemrock Industries & Exports Ltd. | 677 | 1,405 | ||||||
Mahindra & Mahindra Financial Services Ltd. | 1,000 | 13,259 | ||||||
Manappuram Finance Ltd. | 19,388 | 11,955 | ||||||
MAX India Ltd.a | 5,994 | 19,407 | ||||||
Monnet Ispat & Energy Ltd. | 1,388 | 7,188 | ||||||
PTC India Ltd. | 12,802 | 12,808 | ||||||
Redington India Ltd. | 9,894 | 13,358 | ||||||
REI Agro Ltd. | 41,082 | 6,905 | ||||||
Strides Arcolab Ltd. | 1,188 | 17,504 | ||||||
Syndicate Bank | 5,385 | 9,008 | ||||||
Tata Global Beverages Ltd. | 9,969 | 23,262 | ||||||
Thermax Ltd. | 1,744 | 15,239 | ||||||
Torrent Pharmaceuticals Ltd. | 924 | 11,711 | ||||||
Voltas Ltd. | 6,961 | 13,791 | ||||||
Welspun Corp. Ltd. | 6,123 | 10,369 | ||||||
Wockhardt Ltd.a | 815 | 18,016 | ||||||
|
| |||||||
609,844 | ||||||||
INDONESIA — 4.31% |
| |||||||
PT Agung Podomoro Land Tbka | 281,500 | 9,447 | ||||||
PT AKR Corporindo Tbk | 31,000 | 11,379 |
60 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS SMALL CAP INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
PT Alam Sutera Realty Tbk | 222,500 | $ | 10,267 | |||||
PT Bakrie and Brothers Tbka | 2,041,000 | 10,703 | ||||||
PT Bakrie Sumatera Plantations Tbk | 315,500 | 4,434 | ||||||
PT Bakrie Telecom Tbka | 410,500 | 6,200 | ||||||
PT Bakrieland Development Tbka | 955,500 | 5,011 | ||||||
PT Bank Bukopin Tbk | 111,000 | 7,450 | ||||||
PT Bank Pembangunan Daerah Jawa Barat dan Banten Tbk | 76,000 | 7,811 | ||||||
PT Bank Tabungan Negara (Persero) Tbk | 54,500 | 7,488 | ||||||
PT Barito Pacific Tbka | 126,500 | 5,970 | ||||||
PT Benakat Petroleum Energy Tbka | 464,000 | 8,857 | ||||||
PT Bhakti Investama Tbk | 514,000 | 20,754 | ||||||
PT Ciputra Development Tbk | 258,000 | 16,776 | ||||||
PT Citra Marga Nusaphala Persada Tbk | 45,500 | 9,496 | ||||||
PT Energi Mega Persada Tbka | 601,500 | 5,804 | ||||||
PT Erajaya Swasembada Tbka | 36,500 | 8,039 | ||||||
PT Gajah Tunggal Tbk | 33,000 | 8,393 | ||||||
PT Garuda Indonesia (Persero) Tbka | 188,000 | 12,422 | ||||||
PT Holcim Indonesia Tbk | 42,000 | 11,563 | ||||||
PT Indah Kiat Pulp and Paper Tbka | 120,000 | 13,214 | ||||||
PT Japfa Comfeed Indonesia Tbk | 17,000 | 7,934 | ||||||
PT Kawasan Industri Jababeka Tbka | 492,000 | 9,494 | ||||||
PT Krakatau Steel (Persero) Tbk | 86,500 | 5,987 | ||||||
PT Lippo Karawaci Tbk | 346,500 | 31,616 | ||||||
PT Medco Energi Internasional Tbk | 48,500 | 8,545 | ||||||
PT Mitra Adiperkasa Tbk | 18,500 | 12,805 | ||||||
PT Ramayana Lestari Sentosa Tbk | 173,500 | 18,924 | ||||||
PT Sampoerna Agro Tbk | 24,000 | 6,670 | ||||||
PT Sentul City Tbka | 521,000 | 10,436 | ||||||
PT Summarecon Agung Tbk | 112,000 | 17,267 | ||||||
PT Surya Semesta Internusa Tbk | 80,650 | 9,896 | ||||||
PT Timah (Persero)Tbk | 40,000 | 5,454 | ||||||
PT Tower Bersama Infrastructure Tbka | 44,500 | 18,085 | ||||||
PT Trada Maritime Tbka | 113,500 | 9,642 | ||||||
|
| |||||||
374,233 | ||||||||
MALAYSIA — 5.75% |
| |||||||
Affin Holdings Bhd | 9,600 | 10,692 | ||||||
Carlsberg Brewery Malaysia Bhd | 3,800 | 14,862 | ||||||
Dialog Group Bhd | 26,580 | 19,991 | ||||||
DRB-Hicom Bhd | 21,100 | 17,085 | ||||||
Eastern & Oriental Bhd | 30,300 | 15,710 | ||||||
Hai-O Enterprise Bhd | 19,300 | 12,601 |
Security | Shares | Value | ||||||
Hibiscus Petroleum Bhda | 10,600 | $ | 5,598 | |||||
IGB Corp. Bhd | 31,000 | 25,399 | ||||||
IJM Land Bhd | 15,500 | 11,856 | ||||||
KFC Holdings Malaysia Bhd | 7,700 | 9,414 | ||||||
KLCC Property Holdings Bhd | 19,600 | 36,007 | ||||||
KNM Group Bhda | 43,200 | 9,194 | ||||||
KPJ Healthcare Bhd | 7,600 | 15,251 | ||||||
Kulim Malaysia Bhd | 8,200 | 13,516 | ||||||
Mah Sing Group Bhd | 15,500 | 11,856 | ||||||
Malaysian Airline System Bhda | 21,400 | 7,192 | ||||||
Malaysian Pacific Industries Bhd | 11,900 | 10,093 | ||||||
Malaysian Resources Corp. Bhd | 38,900 | 21,041 | ||||||
Media Prima Bhd | 26,500 | 20,355 | ||||||
Multi-Purpose Holdings Bhd | 16,200 | 19,391 | ||||||
OSK Holdings Bhd | 36,187 | 16,794 | ||||||
POS Malaysia Bhd | 17,400 | 17,765 | ||||||
QL Resources Bhd | 11,800 | 12,274 | ||||||
Sarawak Oil Palms Bhd | 4,200 | 9,168 | ||||||
Scomi Group Bhda | 150,600 | 13,737 | ||||||
Sunway Real Estate Investment Trust Bhd | 63,900 | 29,450 | ||||||
TAN Chong Motor Holdings Bhd | 11,900 | 17,291 | ||||||
TIME dotCom Bhda | 10,400 | 11,350 | ||||||
Top Glove Corp. Bhd | 9,700 | 16,423 | ||||||
Uchi Technologies Bhd | 42,600 | 15,543 | ||||||
Wah Seong Corp. Bhd | 17,500 | 10,194 | ||||||
WCT Bhd | 26,600 | 22,560 | ||||||
|
| |||||||
499,653 | ||||||||
MEXICO — 2.51% |
| |||||||
Alsea SAB de CVa | 10,659 | 15,189 | ||||||
Axtel SAB de CV CPOa | 58,400 | 10,221 | ||||||
Bolsa Mexicana de Valores SAB de CV | 6,100 | 11,937 | ||||||
Consorcio ARA SAB de CVa | 46,400 | 12,111 | ||||||
Corporacion Geo SAB de CV Series Ba | 12,900 | 13,001 | ||||||
Desarrolladora Homex SAB de CVa | 6,200 | 11,548 | ||||||
Empresas ICA SAB de CVa | 15,900 | 28,199 | ||||||
Genomma Lab Internacional SAB de CV Series Ba | 9,600 | 19,206 | ||||||
Gruma SAB de CV Series Ba | 5,400 | 14,620 | ||||||
Grupo Aeroportuario del Sureste SAB de CV Series B | 3,700 | 30,932 | ||||||
Grupo Herdez SAB de CV | 3,600 | 8,514 | ||||||
Industrias CH SAB de CV Series Ba | 5,100 | 27,924 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 61 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS SMALL CAP INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
TV Azteca SAB de CV CPO | 18,900 | $ | 11,706 | |||||
Urbi Desarrollos Urbanos SAB de CVa | 6,500 | 3,275 | ||||||
|
| |||||||
218,383 | ||||||||
PHILIPPINES — 1.90% |
| |||||||
Belle Corp.a | 119,833 | 13,443 | ||||||
Cebu Air Inc. | 5,280 | 7,379 | ||||||
Filinvest Land Inc. | 524,000 | 15,941 | ||||||
First Gen Corp.a | 30,600 | 13,542 | ||||||
First Philippine Holdings Corp. | 5,010 | 9,067 | ||||||
Manila Water Co. Inc. | 22,300 | 14,337 | ||||||
Megaworld Corp. | 285,000 | 14,766 | ||||||
Philex Petroleum Corp.a | 9,000 | 7,401 | ||||||
Philippine National Banka | 7,576 | 12,451 | ||||||
Puregold Price Club Inc. | 13,549 | 9,178 | ||||||
Robinsons Land Corp. | 52,900 | 23,385 | ||||||
Security Bank Corp. | 4,500 | 15,508 | ||||||
SM Development Corp. | 59,800 | 8,613 | ||||||
|
| |||||||
165,011 | ||||||||
POLAND — 1.11% |
| |||||||
Budimex SA | 729 | 10,523 | ||||||
KRUK SAa | 1,040 | 14,730 | ||||||
Lubelski Wegiel Bogdanka SA | 796 | 28,810 | ||||||
Netia SAa | 8,983 | 16,270 | ||||||
Polimex-Mostostal SA | 65,920 | 10,330 | ||||||
Warsaw Stock Exchange | 1,507 | 15,396 | ||||||
|
| |||||||
96,059 | ||||||||
RUSSIA — 0.72% |
| |||||||
Aeroflot—Russian Airlines OJSC | 9,256 | 12,199 | ||||||
OGK-1 OAOa | 426,900 | 7,787 | ||||||
OGK-2 OJSC | 618,461 | 8,143 | ||||||
PIK Groupa | 3,700 | 8,327 | ||||||
RBC OJSCa | 25,300 | 11,740 | ||||||
Sollers OJSCa | 1,053 | 14,106 | ||||||
|
| |||||||
62,302 | ||||||||
SOUTH AFRICA — 9.26% |
| |||||||
Acucap Properties Ltd. | 5,416 | 31,159 | ||||||
Adcock Ingram Holdings Ltd. | 3,136 | 21,394 | ||||||
Aeci Ltd. | 2,736 | 26,943 | ||||||
Afgri Ltd. | 13,674 | 8,923 | ||||||
African Oxygen Ltd. | 7,021 | 15,785 | ||||||
Allied Technologies Ltd. | 1,212 | 6,003 | ||||||
Astral Foods Ltd. | 1,139 | 14,264 |
Security | Shares | Value | ||||||
AVI Ltd. | 3,726 | $ | 25,640 | |||||
Brait SEa | 10,112 | 34,192 | ||||||
Capital Property Fund | 13,558 | 17,550 | ||||||
Cipla Medpro South Africa Ltd. | 17,682 | 14,685 | ||||||
City Lodge Hotels Ltd. | 1,625 | 16,773 | ||||||
Clicks Group Ltd. | 4,450 | 30,358 | ||||||
Clover Industries Ltd. | 3,455 | 5,124 | ||||||
Coronation Fund Managers Ltd. | 3,559 | 12,478 | ||||||
DataTec Ltd. | 5,172 | 30,375 | ||||||
DRDGOLD Ltd. | 10,172 | 5,491 | ||||||
Emira Property Fund | 10,819 | 17,752 | ||||||
Famous Brands Ltd. | 1,681 | 13,662 | ||||||
Fountainhead Property Trust | 29,093 | 28,926 | ||||||
Grindrod Ltd. | 9,878 | 17,357 | ||||||
Group Five Ltd. | 3,169 | 9,964 | ||||||
Hyprop Investments Ltd. | 2,623 | 22,874 | ||||||
Illovo Sugar Ltd. | 5,270 | 18,820 | ||||||
JD Group Ltd. | 3,600 | 19,131 | ||||||
JSE Ltd. | 2,355 | 19,754 | ||||||
Lewis Group Ltd. | 1,551 | 13,360 | ||||||
Mondi Ltd. | 2,605 | 23,211 | ||||||
Murray & Roberts Holdings Ltd.a | 7,829 | 20,259 | ||||||
Nampak Ltd. | 9,992 | 32,068 | ||||||
Omnia Holdings Ltd. | 1,727 | 24,383 | ||||||
Palabora Mining Co. Ltd. | 492 | 4,576 | ||||||
Pick’n Pay Holdings Ltd. | 5,070 | 12,037 | ||||||
Pinnacle Technology Holdings Ltd. | 2,803 | 5,757 | ||||||
Resilient Property Income Fund Ltd. | 4,143 | 24,209 | ||||||
Royal Bafokeng Platinum Ltd.a | 1,087 | 5,816 | ||||||
SA Corporate Real Estate Fund Nominees Pty Ltd. | 47,032 | 19,977 | ||||||
Sun International Ltd. | 2,181 | 21,995 | ||||||
Super Group Ltd.a | 8,100 | 15,309 | ||||||
Sycom Property Fund | 3,692 | 12,357 | ||||||
Tongaat Hulett Ltd. | 2,254 | 37,974 | ||||||
Vukile Property Fund Ltd. | 10,969 | 25,521 | ||||||
Wilson Bayly Holmes-Ovcon Ltd. | 1,282 | 20,046 | ||||||
|
| |||||||
804,232 | ||||||||
SOUTH KOREA — 16.77% |
| |||||||
3S Korea Co. Ltd.a | 903 | 12,336 | ||||||
Able C&C Co. Ltd. | 200 | 13,943 | ||||||
Ahnlab Inc. | 98 | 10,667 | ||||||
Asiana Airlines Inc.a | 2,000 | 13,608 |
62 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS SMALL CAP INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Binggrae Co. Ltd. | 276 | $ | 20,822 | |||||
Capro Corp. | 520 | 6,737 | ||||||
Chabio & Diostech Co. Ltd.a | 1,002 | 8,319 | ||||||
Cheil Worldwide Inc. | 2,220 | 39,621 | ||||||
CJ CGV Co. Ltd. | 600 | 14,912 | ||||||
CJ E&M Corp.a | 520 | 13,153 | ||||||
CJ O Shopping Co. Ltd. | 68 | 13,005 | ||||||
Cosmax Inc. | 320 | 10,717 | ||||||
CrucialTec Co. Ltd.a | 1,067 | 9,498 | ||||||
Daishin Securities Co. Ltd. | 1,920 | 14,147 | ||||||
Daum Communications Corp. | 257 | 25,663 | ||||||
Digitech Systems Co. Ltd.a | 943 | 8,153 | ||||||
Dong-A Pharmaceutical Co. Ltd. | 195 | 16,430 | ||||||
Dongsuh Co. Inc. | 406 | 11,343 | ||||||
Dongyang Mechatronics Corp. | 850 | 9,477 | ||||||
Doosan Engine Co. Ltd.a | 760 | 6,866 | ||||||
Duksan Hi-Metal Co. Ltd.a | 505 | 9,681 | ||||||
Fila Korea Ltd. | 227 | 15,145 | ||||||
Foosung Co. Ltd.a | 1,610 | 8,940 | ||||||
Gamevil Inc.a | 113 | 9,969 | ||||||
GemVax & Kael Co. Ltd.a | 517 | 20,459 | ||||||
Grand Korea Leisure Co. Ltd. | 480 | 12,205 | ||||||
Green Cross Corp. | 119 | 16,466 | ||||||
GS Home Shopping Inc. | 91 | 8,526 | ||||||
Halla Climate Control Corp. | 900 | 19,116 | ||||||
Hana Tour Service Inc. | 294 | 12,580 | ||||||
Handsome Co. Ltd. | 530 | 13,009 | ||||||
Hanjin Heavy Industries & Construction Co. Ltd.a | 770 | 8,178 | ||||||
Hanjin Shipping Co. Ltd.a | 1,870 | 24,063 | ||||||
Hanmi Pharm Co. Ltd.a | 200 | 14,454 | ||||||
Hansol Paper Co. | 1,810 | 14,277 | ||||||
Hanwha Securities Co. | 3,790 | 12,810 | ||||||
Hotel Shilla Co. Ltd. | 740 | 35,023 | ||||||
Huchems Fine Chemical Corp. | 650 | 13,864 | ||||||
Hwa Shin Co. Ltd. | 750 | 6,214 | ||||||
Hyundai Corp. | 400 | 7,897 | ||||||
Hyundai Greenfood Co. Ltd. | 930 | 14,385 | ||||||
Hyundai Home Shopping Network Corp. | 137 | 13,886 | ||||||
Ilyang Pharmaceutical Co. Ltd.a | 400 | 8,902 | ||||||
Infraware Inc.a | 1,488 | 10,282 | ||||||
Interflex Co. Ltd. | 185 | 12,522 | ||||||
INTOPS Co. Ltd. | 610 | 9,731 |
Security | Shares | Value | ||||||
Jusung Engineering Co. Ltd.a | 1,438 | $ | 8,466 | |||||
KEPCO Plant Service & Engineering Co. Ltd. | 400 | 17,662 | ||||||
KIWOOM Securities Co. Ltd. | 349 | 18,640 | ||||||
Kolon Industries Inc. | 348 | 19,691 | ||||||
Komipharm International Co. Ltd.a | 1,155 | 9,548 | ||||||
Korea Petrochemical Ind Co. Ltd. | 130 | 8,020 | ||||||
Korean Reinsurance Co. | 1,806 | 17,588 | ||||||
KT Skylife Co. Ltd.a | 680 | 15,402 | ||||||
Kumho Industrial Co. Ltd.a | 1,890 | 5,747 | ||||||
Kumho Tire Co. Inc.a | 1,030 | 14,434 | ||||||
LG Fashion Corp. | 440 | 12,855 | ||||||
LG Hausys Ltd. | 299 | 18,605 | ||||||
LG International Corp. | 672 | 24,105 | ||||||
LG Life Sciences Ltd.a | 420 | 14,585 | ||||||
LIG Insurance Co. Ltd. | 830 | 17,922 | ||||||
Lock & Lock Co. Ltd. | 375 | 8,825 | ||||||
Lotte Chilsung Beverage Co. Ltd. | 15 | 18,482 | ||||||
Lotte Midopa Co. Ltd. | 630 | 7,385 | ||||||
Lotte Samkang Co. Ltd. | 33 | 14,542 | ||||||
Medipost Co. Ltd.a | 197 | 18,786 | ||||||
MegaStudy Co. Ltd. | 112 | 6,456 | ||||||
Meritz Finance Group Inc.a | 4,730 | 11,735 | ||||||
Meritz Fire & Marine Insurance Co. Ltd. | 1,190 | 13,215 | ||||||
Namhae Chemical Corp. | 1,250 | 10,345 | ||||||
Namyang Dairy Products Co. Ltd. | 19 | 13,832 | ||||||
Neowiz Games Corp.a | 310 | 7,076 | ||||||
Nexen Tire Corp. | 840 | 14,436 | ||||||
NongShim Co. Ltd. | 82 | 18,068 | ||||||
OCI Materials Co. Ltd. | 155 | 6,318 | ||||||
Paradise Co. Ltd. | 891 | 12,486 | ||||||
Partron Co. Ltd. | 1,579 | 15,934 | ||||||
Poongsan Corp. | 500 | 13,198 | ||||||
POSCO Chemtech Co. Ltd. | 63 | 8,257 | ||||||
Posco ICT Co. Ltd. | 1,958 | 11,907 | ||||||
RNL BIO Co. Ltd.a | 2,230 | 9,650 | ||||||
S&T Dynamics Co. Ltd. | 1,060 | 11,631 | ||||||
Samsung Fine Chemicals Co. Ltd. | 471 | 25,862 | ||||||
Samyang Holdings Corp. | 128 | 6,374 | ||||||
SeAH Besteel Corp. | 240 | 7,477 | ||||||
Seegene Inc.a | 168 | 9,772 | ||||||
Seoul Semiconductor Co. Ltd. | 992 | 18,098 | ||||||
SFA Engineering Corp. | 304 | 13,182 | ||||||
SK Broadband Co. Ltd.a | 4,666 | 13,036 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 63 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS SMALL CAP INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
SK Chemicals Co. Ltd. | 351 | $ | 18,840 | |||||
SK Communications Co. Ltd.a | 965 | 7,672 | ||||||
SK Securities Co. Ltd. | 14,210 | 15,843 | ||||||
SKC Co. Ltd. | 421 | 16,604 | ||||||
SM Entertainment Co.a | 360 | 17,800 | ||||||
Soulbrain Co. Ltd. | 281 | 9,609 | ||||||
STX Corp. Co. Ltd. | 1,110 | 8,296 | ||||||
STX Engine Co. Ltd. | 1,250 | 9,926 | ||||||
STX Offshore & Shipbuilding Co. Ltd. | 1,230 | 10,320 | ||||||
Sung Kwang Bend Co. Ltd. | 669 | 14,180 | ||||||
Sungwoo Hitech Co. Ltd. | 809 | 9,661 | ||||||
Suprema Inc. | 786 | 12,054 | ||||||
Taekwang Industrial Co. Ltd. | 9 | 7,091 | ||||||
Taewoong Co. Ltd.a | 361 | 6,491 | ||||||
Taihan Electric Wire Co. Ltd.a | 4,200 | 6,737 | ||||||
TK Corp.a | 629 | 15,800 | ||||||
Tong Yang Life Insurance Co. | 920 | 8,230 | ||||||
TONGYANG Securities Inc. | 3,480 | 11,916 | ||||||
ViroMed Co. Ltd.a | 400 | 10,347 | ||||||
Wonik IPS Co. Ltd.a | 1,659 | 8,422 | ||||||
Woongjin Thinkbig Co. Ltd. | 1,070 | 8,676 | ||||||
YESCO Co. Ltd. | 240 | 5,701 | ||||||
Youngone Corp. | 510 | 15,485 | ||||||
|
| |||||||
1,457,337 | ||||||||
TAIWAN — 19.80% | ||||||||
Ability Enterprise Co. Ltd. | 18,000 | 17,428 | ||||||
ALI Corp. | 13,000 | 13,737 | ||||||
Altek Corp. | 17,133 | 9,181 | ||||||
Ambassador Hotel Ltd. (The) | 9,000 | 9,315 | ||||||
AmTRAN Technology Co. Ltd. | 26,312 | 20,206 | ||||||
Asia Optical Co. Inc.a | 10,000 | 10,150 | ||||||
Asia Polymer Corp. | 14,400 | 13,438 | ||||||
BES Engineering Corp. | 50,000 | 11,869 | ||||||
Career Technology MFG. Co. Ltd. | 7,000 | 9,933 | ||||||
Cathay Real Estate Development Co. Ltd. | 21,000 | 9,045 | ||||||
Chailease Holding Co. Ltd. | 13,000 | 21,919 | ||||||
Cheng Loong Corp. | 44,000 | 16,454 | ||||||
China Bills Finance Corp. | 30,000 | 10,567 | ||||||
China Manmade Fibers Corp.a | 31,000 | 11,127 | ||||||
China Steel Chemical Corp. | 4,000 | 16,761 | ||||||
China Synthetic Rubber Corp. | 17,000 | 16,687 | ||||||
Chipbond Technology Corp. | 18,000 | 26,413 | ||||||
Chong Hong Construction Co. | 4,040 | 10,332 |
Security | Shares | Value | ||||||
Chroma ATE Inc. | 9,000 | $ | 18,811 | |||||
Chung Hung Steel Corp.a | 42,000 | 10,321 | ||||||
Compal Communications Inc.a | 10,000 | 10,935 | ||||||
Compeq Manufacturing Co. | 38,000 | 16,176 | ||||||
Coretronic Corp. | 18,000 | 16,617 | ||||||
CSBC Corp. | 23,420 | 15,522 | ||||||
Cyberlink Corp. | 6,213 | 21,781 | ||||||
CyberTAN Technology Inc. | 14,000 | 10,260 | ||||||
D-Link Corp. | 22,000 | 13,662 | ||||||
Dynapack International Technology Corp. | 3,000 | 14,474 | ||||||
Elan Microelectronics Corp. | 14,000 | 21,922 | ||||||
Faraday Technology Corp. | 14,000 | 19,842 | ||||||
FLEXium Interconnect Inc. | 3,229 | 14,608 | ||||||
Formosan Rubber Group Inc. | 15,000 | 9,816 | ||||||
G Tech Optoelectronics Corp. | 4,000 | 11,005 | ||||||
Gemtek Technology Corp. | 20,000 | 22,136 | ||||||
Genesis Photonics Inc.a | 12,715 | 9,700 | ||||||
Genius Electronic Optical Co. Ltd. | 1,000 | 7,212 | ||||||
Gigabyte Technology Co. Ltd. | 21,000 | 18,160 | ||||||
Gigastorage Corp. | 10,400 | 8,038 | ||||||
Global Unichip Corp. | 4,000 | 14,557 | ||||||
Gloria Material Technology Corp. | 14,684 | 13,948 | ||||||
Goldsun Development & Construction Co. Ltd. | 30,000 | 10,617 | ||||||
Grand Pacific Petrochemical Corp. | 20,000 | 9,415 | ||||||
Great Wall Enterprise Co. Ltd. | 10,253 | 9,243 | ||||||
Greatek Electronics Inc. | 26,000 | 20,183 | ||||||
Green Energy Technology Inc. | 12,125 | 7,773 | ||||||
HannStar Display Corp.a | 146,000 | 9,359 | ||||||
HannsTouch Solution Inc.a | 28,000 | 10,844 | ||||||
Hey Song Corp. | 10,000 | 12,888 | ||||||
Ho Tung Chemical Corp.a | 25,640 | 15,110 | ||||||
Holy Stone Enterprise Co. Ltd. | 25,000 | 21,118 | ||||||
Huaku Development Co. Ltd. | 4,080 | 9,740 | ||||||
Huang Hsiang Construction Co. | 4,000 | 9,001 | ||||||
Hung Sheng Construction Co. Ltd. | 37,000 | 18,963 | ||||||
Infortrend Technology Inc. | 20,000 | 12,955 | ||||||
ITEQ Corp. | 17,600 | 17,629 | ||||||
Jih Sun Financial Holdings Co. Ltd. | 29,205 | 7,820 | ||||||
Kenda Rubber Industrial Co. Ltd. | 11,715 | 14,120 | ||||||
Kerry TJ Logistics Co. Ltd. | 10,000 | 13,455 | ||||||
Kindom Construction Co. | 13,000 | 8,551 | ||||||
King Yuan Electronics Co. Ltd. | 55,000 | 29,381 |
64 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS SMALL CAP INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
King’s Town Banka | 14,000 | $ | 9,349 | |||||
Kinpo Electronics Inc. | 94,000 | 20,243 | ||||||
Lealea Enterprise Co. Ltd. | 23,690 | 8,424 | ||||||
Lien Hwa Industrial Corp. | 15,000 | 9,340 | ||||||
LITE-ON IT Corp. | 15,074 | 13,010 | ||||||
Makalot Industrial Co. Ltd. | 6,000 | 17,168 | ||||||
Masterlink Securities Corp. | 26,000 | 7,787 | ||||||
Mercuries & Associates Ltd. | 9,360 | 8,563 | ||||||
Merida Industry Co. Ltd. | 5,750 | 19,121 | ||||||
Micro-Star International Co. Ltd. | 42,000 | 20,123 | ||||||
Microbio Co. Ltd. | 14,280 | 16,163 | ||||||
MIN AIK Technology Co. Ltd. | 6,000 | 17,048 | ||||||
MiTAC International Corp. | 57,000 | 18,384 | ||||||
Oriental Union Chemical Corp. | 11,000 | 12,322 | ||||||
Pan-International Industrial Corp.a | 16,000 | 15,519 | ||||||
PChome Online Inc. | 2,312 | 13,046 | ||||||
Phihong Technology Co. Ltd. | 8,000 | 6,971 | ||||||
Pixart Imaging Inc. | 7,635 | 23,452 | ||||||
President Securities Corp. | 17,510 | 9,003 | ||||||
Prince Housing & Development Corp. | 15,190 | 10,879 | ||||||
Radium Life Tech Co. Ltd. | 32,182 | 21,114 | ||||||
Ritek Corp.a | 116,000 | 15,182 | ||||||
Sanyang Industry Co. Ltd.a | 23,820 | 15,150 | ||||||
Senao International Co. Ltd. | 3,000 | 10,567 | ||||||
Shihlin Electric & Engineering Corp. | 15,000 | 17,428 | ||||||
Shining Building Business Co. Ltd.a | 12,000 | 9,676 | ||||||
Shinkong Synthetic Fibers Corp. | 42,135 | 12,858 | ||||||
Shinkong Textile Co. Ltd. | 9,000 | 12,110 | ||||||
Silitech Technology Corp. | 6,060 | 11,391 | ||||||
Sinyi Realty Co. | 6,360 | 8,324 | ||||||
Soft-World International Corp. | 7,140 | 14,351 | ||||||
Solar Applied Materials Technology Corp. | 8,799 | 10,738 | ||||||
Solartech Energy Corp.a | 10,000 | 6,444 | ||||||
Ta Chen Stainless Pipe Co. Ltd. | 42,000 | 20,824 | ||||||
Ta Chong Bank Ltd.a | 30,900 | 9,708 | ||||||
Taichung Commercial Bank Co. Ltd.a | 27,250 | 8,825 | ||||||
Taiflex Scientific Co. Ltd. | 7,000 | 9,185 | ||||||
Taiwan Hon Chuan Enterprise Co. Ltd. | 4,000 | 8,654 | ||||||
Taiwan Life Insurance Co. Ltd.a | 15,850 | 10,108 | ||||||
Taiwan Paiho Ltd. | 16,050 | 9,887 | ||||||
Taiwan Secom Co. Ltd. | 12,000 | 24,640 | ||||||
Taiwan Surface Mounting Technology Co. Ltd. | 6,420 | 10,546 |
Security | Shares | Value | ||||||
Taiwan TEA Corp. | 19,000 | $ | 9,706 | |||||
Taiwan-Sogo Shinkong Security Corp. | 21,000 | 21,946 | ||||||
Ton Yi Industrial Corp. | 16,000 | 9,001 | ||||||
Tong Hsing Electronic Industries Ltd. | 4,000 | 13,288 | ||||||
Tong Yang Industry Co. Ltd. | 15,984 | 15,210 | ||||||
Tsann Kuen Enterprise Co. Ltd. | 5,000 | 10,350 | ||||||
TTY Biopharm Co. Ltd. | 3,720 | 13,476 | ||||||
TXC Corp. | 12,000 | 18,931 | ||||||
Union Bank of Taiwana | 32,000 | 11,432 | ||||||
Unity Opto Technology Co. Ltd. | 17,679 | 17,383 | ||||||
UPC Technology Corp. | 15,748 | 8,150 | ||||||
USI Corp. | 14,950 | 12,529 | ||||||
Ve Wong Corp. | 8,000 | 5,502 | ||||||
Visual Photonics Epitaxy Co. Ltd. | 9,900 | 14,048 | ||||||
Wafer Works Corp. | 15,270 | 8,055 | ||||||
Wah Lee Industrial Corp. | 14,000 | 18,277 | ||||||
Waterland Financial Holdings Co. Ltd. | 31,021 | 9,322 | ||||||
Win Semiconductors Corp. | 10,000 | 12,654 | ||||||
WT Microelectronics Co. Ltd. | 10,299 | 11,932 | ||||||
Yageo Corp. | 61,000 | 17,556 | ||||||
Yieh Phui Enterprise Co. Ltd. | 65,700 | 20,247 | ||||||
Yuen Foong Yu Paper Manufacturing Co. Ltd. | 33,000 | 12,891 | ||||||
YungShin Global Holding Corp. | 7,000 | 9,325 | ||||||
Yungtay Engineering Co. Ltd. | 6,000 | 10,718 | ||||||
Zinwell Corp. | 13,000 | 12,522 | ||||||
|
| |||||||
1,720,306 | ||||||||
THAILAND — 4.07% |
| |||||||
Amata Corp. PCL NVDR | 31,200 | 17,126 | ||||||
Bumrungrad Hospital PCL NVDR | 12,300 | 30,618 | ||||||
Delta Electronics (Thailand) PCL NVDR | 24,400 | 19,233 | ||||||
Electricity Generating PCL NVDR | 3,400 | 13,021 | ||||||
Esso (Thailand) PCL NVDR | 28,700 | 9,617 | ||||||
Hana Microelectronics PCL NVDR | 27,200 | 17,621 | ||||||
Hemaraj Land and Development PCL NVDR | 179,500 | 17,185 | ||||||
Jasmine International PCL NVDR | 107,600 | 12,431 | ||||||
Khon Kaen Sugar Industry PCL NVDR | 25,900 | 10,167 | ||||||
Kiatnakin Bank PCL NVDR | 17,500 | 23,317 | ||||||
Minor International PCL NVDR | 35,850 | 16,818 | ||||||
Phatra Capital PCL NVDR | 5,400 | 6,376 | ||||||
Pruksa Real Estate PCL NVDR | 23,100 | 12,532 | ||||||
Ratchaburi Electricity Generating Holding PCL NVDR | 10,200 | 15,055 | ||||||
Robinson Department Store PCL NVDR | 8,600 | 16,947 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 65 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS SMALL CAP INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Sahaviriya Steel Industries PCL NVDRa | 582,700 | $ | 10,228 | |||||
Sri Trang Agro-Industry PCL NVDR | 15,400 | 7,077 | ||||||
Supalai PCL NVDR | 25,100 | 14,579 | ||||||
Thai Airways International PCL NVDRa | 22,100 | 14,529 | ||||||
Thai Tap Water Supply PCL NVDR | 59,400 | 14,217 | ||||||
Thai Vegetable Oil PCL NVDR | 13,700 | 11,367 | ||||||
Thanachart Capital PCL NVDR | 15,900 | 17,125 | ||||||
TISCO Financial Group PCL NVDR | 7,800 | 9,957 | ||||||
True Corp. PCL NVDRa | 120,300 | 16,585 | ||||||
|
| |||||||
353,728 | ||||||||
TURKEY — 2.56% |
| |||||||
Afyon Cimento Sanayi TASa | 147 | 6,347 | ||||||
Bagfas Bandirma Gubre Fabrikalari AS | 104 | 9,896 | ||||||
Bizim Toptan Satis Magazalari AS | 1,040 | 14,101 | ||||||
Eczacibasi Yatirim Holding Ortakligi AS | 4,819 | 16,487 | ||||||
Ihlas Holding ASa | 26,053 | 16,480 | ||||||
Kardemir Karabuk Demir Celik Sanayi ve TAS Class D | 44,876 | 28,633 | ||||||
Koza Anadolu Metal Madencilik Isletmeleri ASa | 9,749 | 22,093 | ||||||
Net Holding ASa | 15,185 | 13,447 | ||||||
Nortel Networks Netas Telekomunikasyon AS | 1,410 | 10,315 | ||||||
Polyester Sanayi ASa | 10,615 | 6,539 | ||||||
Saf Gayrimenkul Yatirim Ortakligi AS | 21,974 | 9,428 | ||||||
Tat Konserve Sanayii ASa | 7,443 | 8,966 | ||||||
Turkiye Sinai Kalkinma Bankasi AS | 19,732 | 22,575 | ||||||
Ulker Biskuvi Sanayi AS | 4,958 | 22,635 | ||||||
Yazicilar Holding AS | 2,014 | 14,733 | ||||||
|
| |||||||
222,675 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $9,260,321) |
| 8,532,906 | ||||||
PREFERRED STOCKS — 1.25% | ||||||||
BRAZIL — 1.25% | ||||||||
Banco ABC Brasil SA | 2,000 | 12,301 | ||||||
Banco Daycoval SA | 2,000 | 10,251 | ||||||
Banco Industrial e Comercial SA | 2,100 | 6,158 | ||||||
Banco Panamericano SA | 5,911 | 14,129 | ||||||
Companhia de Ferro Ligas da Bahia—Ferbasa | 2,500 | 13,492 | ||||||
Contax Participacoes SA | 1,500 | 14,327 | ||||||
GOL Linhas Aereas Inteligentes SA | 2,700 | 12,907 |
Security | Shares | Value | ||||||
Randon Implementos e Participacoes SA | 2,700 | $ | 14,105 | |||||
Saraiva Livreiros Editores SA | 1,100 | 11,141 | ||||||
|
| |||||||
108,811 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS | ||||||||
(Cost: $125,065) | 108,811 | |||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $9,385,386) | 8,641,717 | |||||||
Other Assets, Less Liabilities — 0.54% |
| 46,842 | ||||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 8,688,559 | |||||
|
|
CPO — Certificates of Participation (Ordinary)
NVDR — Non-Voting Depositary Receipts
SP GDR — Sponsored Global 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. |
See notes to consolidated financial statements.
66 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments
iSHARES® MSCI EMERGING MARKETS VALUE INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 90.69% |
| |||||||
BRAZIL — 5.81% |
| |||||||
Banco do Brasil SA | 3,100 | $ | 35,415 | |||||
Banco Santander (Brasil) SA Units | 4,200 | 32,291 | ||||||
BM&F Bovespa SA | 9,600 | 50,861 | ||||||
Centrais Eletricas Brasileiras SA | 500 | 3,208 | ||||||
Companhia de Saneamento Basico do Estado de Sao Paulo | 600 | 25,372 | ||||||
Companhia de Saneamento de Minas Gerais SA | 400 | 9,561 | ||||||
Companhia Siderurgica Nacional SA | 4,000 | 19,714 | ||||||
CPFL Energia SA | 1,100 | 11,656 | ||||||
EDP Energias do Brasil SA | 1,500 | 9,588 | ||||||
Embraer SA | 2,700 | 18,629 | ||||||
Fibria Celulose SAa | 1,100 | 8,560 | ||||||
JBS SAa | 600 | 1,706 | ||||||
Light SA | 400 | 4,854 | ||||||
Obrascon Huarte Lain Brasil SA | 600 | 5,811 | ||||||
PDG Realty SA Empreendimentos e Participacoes | 5,700 | 11,096 | ||||||
Petroleo Brasileiro SA | 15,800 | 165,861 | ||||||
Porto Seguro SA | 500 | 4,618 | ||||||
Redecard SA | 1,000 | 16,535 | ||||||
Sul America SA Units | 610 | 4,335 | ||||||
Tractebel Energia SA | 500 | 8,319 | ||||||
Vale SA | 4,700 | 78,246 | ||||||
|
| |||||||
526,236 | ||||||||
CHILE — 1.91% |
| |||||||
AES Gener SA | 13,471 | 7,592 | ||||||
Aguas Andinas SA | 9,972 | 6,524 | ||||||
Banco de Chile | 95,577 | 13,460 | ||||||
Banco de Credito e Inversiones | 85 | 5,361 | ||||||
Banco Santander (Chile) SA | 352,271 | 25,230 | ||||||
CAP SA | 220 | 7,410 | ||||||
CorpBanca SA | 961,780 | 11,454 | ||||||
E.CL SA | 1,764 | 4,286 | ||||||
Empresa Nacional de Telecomunicaciones SA | 443 | 8,544 | ||||||
Empresas CMPC SA | 5,963 | 22,152 | ||||||
Empresas Copec SA | 2,474 | 35,632 | ||||||
Enersis SA | 78,197 | 25,781 | ||||||
|
| |||||||
173,426 |
Security | Shares | Value | ||||||
CHINA — 17.28% |
| |||||||
Agile Property Holdings Ltd. | 4,000 | $ | 4,590 | |||||
Air China Ltd. Class H | 10,000 | 6,021 | ||||||
Aluminum Corp. of China Ltd. Class Ha | 20,000 | 7,658 | ||||||
Angang Steel Co. Ltd. Class Ha | 8,000 | 3,909 | ||||||
Anta Sports Products Ltd. | 5,000 | 2,959 | ||||||
Bank of China Ltd. Class H | 408,000 | 148,340 | ||||||
Bank of Communications Co. Ltd. Class H | 39,000 | 25,493 | ||||||
Bosideng International Holdings Ltd. | 18,000 | 4,966 | ||||||
BYD Co. Ltd. Class Ha | 2,000 | 3,486 | ||||||
China Agri-Industries Holdings Ltd. | 8,000 | 3,961 | ||||||
China BlueChemical Ltd. Class H | 8,000 | 4,610 | ||||||
China CITIC Bank Corp. Ltd. Class H | 37,000 | 17,650 | ||||||
China Construction Bank Corp. Class H | 379,000 | 249,205 | ||||||
China COSCO Holdings Co. Ltd. Class Ha | 13,000 | 4,928 | ||||||
China Everbright Ltd. | 4,000 | 4,863 | ||||||
China Merchants Holdings (International) Co. Ltd. | 6,000 | 17,212 | ||||||
China Minsheng Banking Corp. Ltd. Class H | 19,500 | 15,889 | ||||||
China Mobile Ltd. | 32,500 | 346,946 | ||||||
China Petroleum & Chemical Corp. Class H | 94,000 | 88,471 | ||||||
China Railway Group Ltd. Class H | 21,000 | 7,906 | ||||||
China Rongsheng Heavy Industries Group Holdings Ltd. | 16,000 | 2,187 | ||||||
China Shipping Container Lines Co. Ltd. Class Ha | 23,000 | 4,389 | ||||||
China Shipping Development Co. Ltd. Class H | 8,000 | 3,001 | ||||||
China Southern Airlines Co. Ltd. Class H | 10,000 | 4,242 | ||||||
China Telecom Corp. Ltd. Class H | 74,000 | 40,643 | ||||||
China Yurun Food Group Ltd.a | 5,000 | 3,056 | ||||||
China Zhongwang Holdings Ltd.a | 12,400 | 5,020 | ||||||
Chongqing Rural Commercial Bank Co. Ltd. Class H | 12,000 | 4,920 | ||||||
CITIC Pacific Ltd. | 7,000 | 8,565 | ||||||
CITIC Securities Co. Ltd. Class H | 3,000 | 5,036 | ||||||
COSCO Pacific Ltd. | 8,000 | 9,871 | ||||||
Country Garden Holdings Co. Ltd.a | 14,687 | 5,150 | ||||||
Datang International Power Generation Co. Ltd. Class H | 16,000 | 5,363 | ||||||
Fosun International Ltd. | 8,500 | 4,011 | ||||||
Franshion Properties (China) Ltd. | 22,000 | 6,467 | ||||||
GCL-Poly Energy Holdings Ltd. | 40,000 | 6,137 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 67 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS VALUE INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Guangdong Investment Ltd. | 14,000 | $ | 10,343 | |||||
Guangzhou R&F Properties Co. Ltd. Class H | 5,200 | 6,007 | ||||||
Huaneng Power International Inc. Class H | 16,000 | 11,036 | ||||||
Industrial and Commercial Bank of China Ltd. Class H | 349,000 | 188,983 | ||||||
Jiangsu Expressway Co. Ltd. Class H | 6,000 | 4,943 | ||||||
Jiangxi Copper Co. Ltd. Class H | 7,000 | 15,198 | ||||||
Kingboard Chemical Holdings Co. Ltd. | 3,000 | 6,560 | ||||||
Lee & Man Paper Manufacturing Ltd. | 13,000 | 5,330 | ||||||
Metallurgical Corp. of China Ltd. Class Ha | 22,000 | 4,652 | ||||||
PetroChina Co. Ltd. Class H | 112,000 | 135,014 | ||||||
Poly Property Group Co. Ltd.a | 11,000 | 5,446 | ||||||
Shanghai Electric Group Co. Ltd. Class H | 14,000 | 5,613 | ||||||
Shanghai Industrial Holdings Ltd. | 3,000 | 8,238 | ||||||
Shimao Property Holdings Ltd. | 8,500 | 12,822 | ||||||
Shougang Fushan Resources Group Ltd. | 16,000 | 4,208 | ||||||
Shui On Land Ltd. | 14,500 | 5,272 | ||||||
Sino-Ocean Land Holdings Ltd. | 18,000 | 8,076 | ||||||
Sinopec Shanghai Petrochemical Co. Ltd. Class H | 16,000 | 4,188 | ||||||
SOHO China Ltd. | 11,000 | 7,034 | ||||||
Weichai Power Co. Ltd. Class H | 1,200 | 3,172 | ||||||
Yanzhou Coal Mining Co. Ltd. Class H | 10,000 | 14,259 | ||||||
Yuexiu Property Co. Ltd. | 30,000 | 7,001 | ||||||
Zhejiang Expressway Co. Ltd. Class H | 8,000 | 5,281 | ||||||
|
| |||||||
1,565,797 | ||||||||
COLOMBIA — 0.97% | ||||||||
Bancolombia SA SP ADR | 609 | 34,993 | ||||||
Ecopetrol SA SP ADR | 918 | 53,106 | ||||||
|
| |||||||
88,099 | ||||||||
CZECH REPUBLIC — 0.37% | ||||||||
Komercni Banka AS | 80 | 15,527 | ||||||
Telefonica O2 Czech Republic AS | 866 | 18,364 | ||||||
|
| |||||||
33,891 | ||||||||
EGYPT — 0.38% | ||||||||
Commercial International Bank Egypt SAE SP GDR | 3,800 | 19,380 | ||||||
Orascom Telecom Holding SAE SP GDRa,b | 5,002 | 14,656 | ||||||
|
| |||||||
34,036 | ||||||||
HUNGARY — 0.34% | ||||||||
Magyar Telekom Telecommunications PLC | 2,879 | 5,463 | ||||||
OTP Bank Nyrt | 1,240 | 19,675 |
Security | Shares | Value | ||||||
Richter Gedeon Nyrt | 32 | $ | 5,462 | |||||
|
| |||||||
30,600 | ||||||||
INDIA — 6.28% | ||||||||
ACC Ltd. | 314 | 7,386 | ||||||
Aditya Birla Nuvo Ltd. | 305 | 4,083 | ||||||
Ambuja Cements Ltd. | 3,499 | 11,656 | ||||||
Axis Bank Ltd. | 480 | 8,558 | ||||||
Bank of Baroda | 381 | 4,328 | ||||||
Bank of India | 723 | 3,318 | ||||||
Bharat Heavy Electricals Ltd. | 3,262 | 12,506 | ||||||
Bharat Petroleum Corp. Ltd. | 968 | 5,827 | ||||||
Cairn India Ltd.a | 846 | 5,172 | ||||||
Canara Bank Ltd. | 530 | 3,031 | ||||||
Coal India Ltd. | 1,481 | 9,357 | ||||||
DLF Ltd. | 2,229 | 7,816 | ||||||
GAIL (India) Ltd. | 2,147 | 13,704 | ||||||
Hero Motocorp Ltd. | 216 | 6,846 | ||||||
Hindalco Industries Ltd. | 5,957 | 11,122 | ||||||
ICICI Bank Ltd. | 2,322 | 37,659 | ||||||
Infosys Ltd. | 2,294 | 97,395 | ||||||
Infrastructure Development Finance Co. Ltd. | 5,244 | 12,637 | ||||||
JSW Steel Ltd. | 468 | 5,836 | ||||||
Larsen & Toubro Ltd. | 1,145 | 27,643 | ||||||
Mahindra & Mahindra Ltd. | 1,644 | 22,555 | ||||||
NTPC Ltd. | 3,277 | 9,900 | ||||||
Oil & Natural Gas Corp. Ltd. | 4,128 | 20,475 | ||||||
Piramal Healthcare Ltd. | 608 | 5,248 | ||||||
Power Finance Corp. Ltd. | 1,466 | 4,225 | ||||||
Power Grid Corp. of India Ltd. | 7,080 | 15,204 | ||||||
Reliance Capital Ltd. | 811 | 4,663 | ||||||
Reliance Communications Ltd. | 2,753 | 2,386 | ||||||
Reliance Industries Ltd. | 7,157 | 98,609 | ||||||
Reliance Infrastructure Ltd. | 570 | 4,551 | ||||||
Rural Electrification Corp. Ltd. | 1,594 | 5,407 | ||||||
Sesa Goa Ltd. | 1,848 | 5,696 | ||||||
State Bank of India | 675 | 22,296 | ||||||
Sterlite Industries (India) Ltd. | 7,235 | 12,506 | ||||||
Tata Power Co. Ltd. | 5,353 | 9,575 | ||||||
Tata Steel Ltd. | 1,623 | 10,545 | ||||||
Unitech Ltd.a | 9,558 | 3,162 | ||||||
United Phosphorus Ltd. | 1,687 | 3,627 | ||||||
Wipro Ltd. | 1,046 | 6,818 |
68 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS VALUE INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Zee Entertainment Enterprises Ltd. | 1,947 | $ | 5,721 | |||||
|
| |||||||
569,049 | ||||||||
INDONESIA — 3.06% | ||||||||
PT Adaro Energy Tbk | 76,500 | 10,992 | ||||||
PT Astra Agro Lestari Tbk | 2,500 | 5,847 | ||||||
PT Astra International Tbk | 60,500 | 42,829 | ||||||
PT Bank Danamon Indonesia Tbk | 18,000 | 11,327 | ||||||
PT Bank Mandiri (Persero) Tbk | 50,000 | 40,902 | ||||||
PT Bank Negara Indonesia (Persero) Tbk | 40,000 | 15,627 | ||||||
PT Bank Rakyat Indonesia (Persero) Tbk | 20,500 | 14,942 | ||||||
PT Indo Tambangraya Megah Tbk | 1,500 | 6,009 | ||||||
PT Indofood Sukses Makmur Tbk | 24,000 | 13,592 | ||||||
PT Indosat Tbk | 8,500 | 4,546 | ||||||
PT Perusahaan Gas Negara (Persero) Tbk | 59,000 | 22,894 | ||||||
PT Semen Gresik (Persero) Tbk | 16,500 | 21,458 | ||||||
PT Telekomunikasi Indonesia (Persero) Tbk | 56,000 | 54,620 | ||||||
PT Unilever Indonesia Tbk | 3,000 | 8,526 | ||||||
PT Vale Indonesia Tbk | 12,000 | 2,895 | ||||||
|
| |||||||
277,006 | ||||||||
MALAYSIA — 3.63% | ||||||||
Alliance Financial Group Bhd | 4,800 | 6,345 | ||||||
AMMB Holdings Bhd | 7,000 | 14,226 | ||||||
Berjaya Corp. Bhd | 16,100 | 3,452 | ||||||
Berjaya Sports Toto Bhd | 3,500 | 4,940 | ||||||
British American Tobacco (Malaysia) Bhd | 400 | 8,165 | ||||||
CIMB Group Holdings Bhd | 8,300 | 20,694 | ||||||
Genting Malaysia Bhd | 16,600 | 18,754 | ||||||
IOI Corp. Bhd | 10,500 | 17,273 | ||||||
Lafarge Malayan Cement Bhd | 2,500 | 6,881 | ||||||
Malayan Banking Bhd | 18,000 | 52,712 | ||||||
Malaysia Airports Holdings Bhd | 2,700 | 4,735 | ||||||
Maxis Communications Bhd | 12,900 | 29,066 | ||||||
MISC Bhd | 5,900 | 8,044 | ||||||
PPB Group Bhd | 2,700 | 12,012 | ||||||
RHB Capital Bhd | 2,200 | 5,126 | ||||||
Sime Darby Bhd | 14,700 | 46,154 | ||||||
Telekom Malaysia Bhd | 4,000 | 7,784 | ||||||
Tenaga Nasional Bhd | 14,700 | 32,181 | ||||||
UMW Holdings Bhd | 2,400 | 7,835 | ||||||
YTL Corp. Bhd | 28,053 | 16,251 | ||||||
YTL Power International Bhd | 10,600 | 5,903 | ||||||
|
| |||||||
328,533 |
Security | Shares | Value | ||||||
MEXICO — 5.00% | ||||||||
Alfa SAB de CV Series A | 800 | $ | 12,615 | |||||
America Movil SAB de CV Series L | 106,100 | 135,586 | ||||||
Cemex SAB de CV CPOa | 57,408 | 42,225 | ||||||
Fomento Economico Mexicano SAB de CV BD Units | 10,800 | 90,589 | ||||||
Grupo Aeroportuario del Pacifico SAB de CV | 1,300 | 5,104 | ||||||
Grupo Carso SAB de CV Series A1 | 3,100 | 10,152 | ||||||
Grupo Financiero Inbursa SAB de CV Series O | 4,600 | 12,409 | ||||||
Grupo Mexico SAB de CV Series B | 20,800 | 61,383 | ||||||
Grupo Modelo SAB de CV Series C | 3,600 | 32,421 | ||||||
Grupo Televisa SAB CPO | 7,000 | 32,075 | ||||||
Kimberly-Clark de Mexico SAB de CV Series A | 9,000 | 18,094 | ||||||
|
| |||||||
452,653 | ||||||||
PERU — 0.66% | ||||||||
Compania de Minas Buenaventura SA SP ADR | 628 | 21,767 | ||||||
Southern Copper Corp. | 1,184 | 38,527 | ||||||
|
| |||||||
60,294 | ||||||||
PHILIPPINES — 0.87% |
| |||||||
Aboitiz Power Corp. | 9,200 | 7,434 | ||||||
Alliance Global Group Inc. | 19,600 | 5,487 | ||||||
Ayala Corp. | 990 | 9,671 | ||||||
Bank of the Philippine Islands | 3,920 | 6,987 | ||||||
BDO Unibank Inc. | 6,454 | 9,365 | ||||||
Globe Telecom Inc. | 190 | 5,171 | ||||||
Metropolitan Bank & Trust Co. | 2,850 | 6,167 | ||||||
Philippine Long Distance Telephone Co. | 235 | 15,304 | ||||||
San Miguel Corp. | 2,475 | 6,588 | ||||||
Universal Robina Corp. | 4,400 | 6,369 | ||||||
|
| |||||||
78,543 | ||||||||
POLAND — 1.40% |
| |||||||
Bank Handlowy w Warszawie SA | 224 | 5,279 | ||||||
Bank Pekao SA | 234 | 10,620 | ||||||
ENEA SA | 903 | 4,485 | ||||||
Jastrzebska Spolka Weglowa SA | 54 | 1,429 | ||||||
KGHM Polska Miedz SA | 760 | 29,751 | ||||||
Polska Grupa Energetyczna SA | 2,402 | 13,529 | ||||||
Polski Koncern Naftowy Orlen SAa | 1,708 | 20,100 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 69 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS VALUE INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Powszechny Zaklad Ubezpieczen SA | 319 | $ | 33,214 | |||||
Tauron Polska Energia SA | 6,062 | 8,915 | ||||||
|
| |||||||
127,322 | ||||||||
RUSSIA — 5.84% |
| |||||||
Gazprom OAO | 57,220 | 278,632 | ||||||
IDGC Holding JSCa | 97,000 | 5,185 | ||||||
Inter RAO UES OJSCa | 4,800,000 | 3,847 | ||||||
LUKOIL OAO | 2,791 | 158,651 | ||||||
MMC Norilsk Nickel OJSC | 259 | 38,252 | ||||||
Novolipetsk Steel OJSC SP GDRb | 359 | 6,491 | ||||||
Sistema JSFC SP GDRb | 325 | 6,406 | ||||||
Surgutneftegas OJSC | 20,800 | 17,941 | ||||||
VTB Bank OJSC | 8,620,000 | 14,241 | ||||||
|
| |||||||
529,646 | ||||||||
SOUTH AFRICA — 7.87% |
| |||||||
Absa Group Ltd. | 1,231 | 20,776 | ||||||
African Bank Investments Ltd. | 3,937 | 15,181 | ||||||
African Rainbow Minerals Ltd. | 296 | 5,162 | ||||||
Anglo American Platinum Ltd. | 143 | 7,108 | ||||||
Assore Ltd. | 170 | 6,172 | ||||||
Aveng Ltd. | 2,093 | 7,641 | ||||||
Barloworld Ltd. | 754 | 6,352 | ||||||
Exxaro Resources Ltd. | 273 | 4,847 | ||||||
FirstRand Ltd. | 15,747 | 51,285 | ||||||
Gold Fields Ltd. | 2,728 | 32,700 | ||||||
Growthpoint Properties Ltd. | 9,229 | 30,035 | ||||||
Harmony Gold Mining Co. Ltd. | 1,052 | 8,517 | ||||||
Impala Platinum Holdings Ltd. | 2,851 | 44,988 | ||||||
Imperial Holdings Ltd. | 979 | 23,713 | ||||||
Investec Ltd. | 1,313 | 7,937 | ||||||
Kumba Iron Ore Ltd. | 184 | 10,479 | ||||||
Liberty Holdings Ltd. | 633 | 6,895 | ||||||
MMI Holdings Ltd. | 6,069 | 14,012 | ||||||
Nedbank Group Ltd. | 1,100 | 24,144 | ||||||
Pretoria Portland Cement Co. Ltd. | 1,716 | 5,416 | ||||||
Redefine Properties Ltd. | 14,967 | 17,047 | ||||||
Remgro Ltd. | 2,501 | 42,700 | ||||||
Reunert Ltd. | 1,110 | 9,371 | ||||||
RMB Holdings Ltd. | 4,123 | 17,786 | ||||||
RMI Holdings Ltd. | 2,505 | 5,647 | ||||||
Sanlam Ltd. | 9,822 | 43,094 | ||||||
Sappi Ltd.a | 2,589 | 7,219 |
Security | Shares | Value | ||||||
Sasol Ltd. | 2,879 | $ | 123,901 | |||||
Standard Bank Group Ltd. | 6,505 | 85,668 | ||||||
Vodacom Group Ltd. | 2,128 | 27,010 | ||||||
|
| |||||||
712,803 | ||||||||
SOUTH KOREA — 14.02% |
| |||||||
BS Financial Group Inc. | 980 | 10,192 | ||||||
Cheil Industries Inc. | 105 | 9,578 | ||||||
CJ Corp. | 75 | 5,394 | ||||||
Daelim Industrial Co. Ltd. | 151 | 11,818 | ||||||
Daewoo Engineering & Construction Co. Ltd.a | 560 | 4,935 | ||||||
Daewoo Securities Co. Ltd. | 960 | 9,519 | ||||||
Daewoo Shipbuilding & Marine Engineering Co. Ltd. | 510 | 10,945 | ||||||
DGB Financial Group Inc. | 720 | 8,313 | ||||||
Dongbu Insurance Co. Ltd. | 230 | 9,396 | ||||||
Dongkuk Steel Mill Co. Ltd. | 240 | 3,331 | ||||||
Doosan Corp. | 10 | 1,194 | ||||||
Doosan Heavy Industries & Construction Co. Ltd. | 215 | 11,218 | ||||||
Doosan Infracore Co. Ltd.a | 270 | 4,212 | ||||||
GS Engineering & Construction Corp. | 194 | 12,003 | ||||||
GS Holdings Corp. | 271 | 15,525 | ||||||
Hana Financial Group Inc. | 1,190 | 35,554 | ||||||
Hanwha Chemical Corp. | 450 | 8,289 | ||||||
Hanwha Corp. | 240 | 6,970 | ||||||
Hyosung Corp. | 15 | 802 | ||||||
Hyundai Development Co. | 300 | 5,513 | ||||||
Hyundai Heavy Industries Co. Ltd. | 228 | 46,519 | ||||||
Hyundai Merchant Marine Co. Ltd.a | 10 | 241 | ||||||
Hyundai Mipo Dockyard Co. Ltd. | 58 | 6,262 | ||||||
Hyundai Motor Co. | 534 | 113,189 | ||||||
Hyundai Securities Co. Ltd. | 660 | 4,933 | ||||||
Hyundai Steel Co. | 301 | 22,178 | ||||||
Industrial Bank of Korea | 850 | 9,027 | ||||||
Kangwon Land Inc. | 550 | 11,246 | ||||||
KB Financial Group Inc. | 2,010 | 65,103 | ||||||
KCC Corp. | 23 | 5,737 | ||||||
Korea Electric Power Corp.a | 1,400 | 30,354 | ||||||
Korea Exchange Banka | 1,360 | 10,248 | ||||||
Korea Gas Corp. | 130 | 6,531 | ||||||
Korea Investment Holdings Co. Ltd. | 210 | 7,061 | ||||||
Korea Life Insurance Co. Ltd. | 980 | 6,132 | ||||||
Korea Zinc Co. Ltd. | 40 | 14,419 |
70 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS VALUE INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Korean Air Lines Co. Ltd.a | 200 | $ | 8,373 | |||||
KP Chemical Corp. | 350 | 3,702 | ||||||
KT Corp. SP ADR | 380 | 5,742 | ||||||
KT&G Corp. | 600 | 45,425 | ||||||
Kumho Petro Chemical Co. Ltd. | 61 | 6,048 | ||||||
LG Chem Ltd. | 252 | 66,852 | ||||||
LG Corp. | 517 | 28,524 | ||||||
LG Display Co. Ltd.a | 1,270 | 29,046 | ||||||
LG Electronics Inc. | 375 | 23,268 | ||||||
LG Uplus Corp. | 1,300 | 8,708 | ||||||
Lotte Shopping Co. Ltd. | 57 | 16,051 | ||||||
LS Corp. | 94 | 7,274 | ||||||
Mirae Asset Securities Co. Ltd. | 150 | 4,085 | ||||||
ORION Corp. | 7 | 5,676 | ||||||
POSCO | 362 | 117,729 | ||||||
S-Oil Corp. | 222 | 20,153 | ||||||
S1 Corp. | 99 | 5,148 | ||||||
Samsung C&T Corp. | 446 | 25,354 | ||||||
Samsung Card Co. Ltd. | 240 | 7,604 | ||||||
Samsung Fire & Marine Insurance Co. Ltd. | 196 | 40,422 | ||||||
Samsung Heavy Industries Co. Ltd. | 880 | 28,813 | ||||||
Samsung Life Insurance Co. Ltd. | 342 | 29,087 | ||||||
Samsung Securities Co. Ltd. | 310 | 13,265 | ||||||
Shinhan Financial Group Co. Ltd. | 2,190 | 68,134 | ||||||
SK Holdings Co. Ltd. | 138 | 20,311 | ||||||
SK Hynix Inc.a | 990 | 18,498 | ||||||
SK Innovation Co. Ltd. | 154 | 22,191 | ||||||
SK Networks Co. Ltd. | 600 | 4,992 | ||||||
SK Telecom Co. Ltd. | 58 | 7,438 | ||||||
Woongjin Coway Co. Ltd. | 250 | 8,648 | ||||||
Woori Finance Holdings Co. Ltd. | 1,930 | 18,371 | ||||||
Woori Investment & Securities Co. Ltd. | 630 | 6,163 | ||||||
Yuhan Corp. | 48 | 5,669 | ||||||
|
| |||||||
1,270,645 | ||||||||
TAIWAN — 10.94% |
| |||||||
Acer Inc.a | 14,000 | 12,364 | ||||||
Advanced Semiconductor Engineering Inc. | 29,636 | 22,164 | ||||||
Asia Cement Corp. | 10,300 | 11,830 | ||||||
ASUSTeK Computer Inc. | 4,000 | 39,932 | ||||||
AU Optronics Corp.a | 41,000 | 12,443 | ||||||
Capital Securities Corp. | 13,000 | 4,406 | ||||||
Chang Hwa Commercial Bank Ltd. | 24,610 | 12,695 |
Security | Shares | Value | ||||||
Chicony Electronics Co. Ltd. | 3,105 | $ | 6,552 | |||||
Chimei Innolux Corp.a | 25,000 | 7,996 | ||||||
China Airlines Ltd. | 14,000 | 5,375 | ||||||
China Development Financial Holding Corp. | 64,000 | 15,171 | ||||||
China Motor Co. Ltd. | 5,000 | 4,574 | ||||||
China Petrochemical Development Corp. | 6,000 | 4,798 | ||||||
China Steel Corp. | 56,840 | 48,678 | ||||||
Chinatrust Financial Holding Co. Ltd. | 33,849 | 20,230 | ||||||
Chunghwa Telecom Co. Ltd. | 20,000 | 60,432 | ||||||
Compal Electronics Inc. | 23,000 | 20,158 | ||||||
E Ink Holdings Inc. | 5,000 | 5,000 | ||||||
Epistar Corp. | 4,000 | 8,120 | ||||||
Eternal Chemical Co. Ltd. | 7,000 | 5,784 | ||||||
EVA Airways Corp. | 9,000 | 5,048 | ||||||
Evergreen Marine Corp. Ltd. | 9,000 | 4,808 | ||||||
Everlight Electronics Co. Ltd. | 3,000 | 4,633 | ||||||
Far Eastern New Century Corp. | 15,450 | 16,249 | ||||||
Farglory Land Development Co. Ltd. | 3,000 | 5,399 | ||||||
Feng Hsin Iron & Steel Co. Ltd. | 4,000 | 6,183 | ||||||
First Financial Holding Co. Ltd. | 32,860 | 19,035 | ||||||
Formosa Chemicals & Fibre Corp. | 16,000 | 41,294 | ||||||
Formosa Petrochemical Corp. | 2,000 | 5,703 | ||||||
Formosa Plastics Corp. | 21,000 | 56,582 | ||||||
Formosa Taffeta Co. Ltd. | 6,000 | 5,469 | ||||||
Fubon Financial Holding Co. Ltd. | 28,348 | 28,158 | ||||||
HTC Corp. | 1,000 | 8,614 | ||||||
Hua Nan Financial Holdings Co. Ltd. | 25,200 | 13,546 | ||||||
Inventec Corp. | 12,420 | 4,064 | ||||||
LCY Chemical Corp. | 3,000 | 4,077 | ||||||
Lite-On Technology Corp. | 11,055 | 13,380 | ||||||
Macronix International Co. Ltd. | 18,683 | 5,040 | ||||||
MediaTek Inc. | 3,000 | 32,052 | ||||||
Mega Financial Holding Co. Ltd. | 42,630 | 32,096 | ||||||
Motech Industries Inc.a | 3,000 | 2,935 | ||||||
MStar Semiconductor Inc. | 2,000 | 15,926 | ||||||
Nan Ya Plastics Corp. | 25,000 | 46,993 | ||||||
Novatek Microelectronics Corp. Ltd. | 3,000 | 9,666 | ||||||
Pou Chen Corp. | 11,000 | 10,614 | ||||||
Powertech Technology Inc. | 4,000 | 7,546 | ||||||
Quanta Computer Inc. | 14,000 | 36,132 | ||||||
Realtek Semiconductor Corp. | 3,030 | 5,706 | ||||||
Ruentex Development Co. Ltd. | 5,000 | 8,380 | ||||||
Shin Kong Financial Holding Co. Ltd.a | 30,000 | 8,123 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 71 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS VALUE INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Siliconware Precision Industries Co. Ltd. | 16,000 | $ | 18,056 | |||||
SinoPac Financial Holdings Co. Ltd. | 29,916 | 11,886 | ||||||
Taishin Financial Holdings Co. Ltd. | 30,507 | 11,663 | ||||||
Taiwan Business Bank Ltd.a | 16,640 | 4,778 | ||||||
Taiwan Cement Corp. | 18,000 | 19,562 | ||||||
Taiwan Cooperative Financial Holding Co. Ltd. | 21,000 | 11,534 | ||||||
Taiwan Fertilizer Co. Ltd. | 2,000 | 4,935 | ||||||
Taiwan Mobile Co. Ltd. | 5,000 | 18,530 | ||||||
Teco Electric and Machinery Co. Ltd. | 8,000 | 5,289 | ||||||
Transcend Information Inc. | 2,000 | 5,249 | ||||||
Tripod Technology Corp. | 2,000 | 4,407 | ||||||
Tung Ho Steel Enterprise Corp. | 6,000 | 5,529 | ||||||
U-Ming Marine Transport Corp. | 4,000 | 6,010 | ||||||
Unimicron Technology Corp. | 7,000 | 7,958 | ||||||
United Microelectronics Corp. | 68,000 | 27,244 | ||||||
Walsin Lihwa Corp.a | 16,000 | 5,032 | ||||||
Wan Hai Lines Ltd.a | 10,000 | 5,075 | ||||||
Wistron Corp. | 11,550 | 12,919 | ||||||
WPG Holdings Co. Ltd. | 7,000 | 8,250 | ||||||
Yang Ming Marine Transport Corp. | 12,000 | 4,788 | ||||||
|
| |||||||
990,847 | ||||||||
THAILAND — 2.24% |
| |||||||
Advanced Information Service PCL NVDR | 5,000 | 34,626 | ||||||
Bangkok Bank PCL Foreign | 4,700 | 28,949 | ||||||
Bangkok Bank PCL NVDR | 2,600 | 15,599 | ||||||
Banpu PCL NVDR | 200 | 2,872 | ||||||
Glow Energy PCL NVDR | 2,800 | 5,585 | ||||||
IRPC PCL NVDR | 67,900 | 8,148 | ||||||
Krung Thai Bank PCL NVDR | 20,400 | 10,807 | ||||||
PTT Global Chemical PCL NVDR | 9,000 | 17,951 | ||||||
PTT PCL NVDR | 4,600 | 48,444 | ||||||
Siam Cement PCL Foreign | 600 | 7,027 | ||||||
Siam Commercial Bank PCL NVDR | 3,900 | 18,669 | ||||||
Thai Oil PCL NVDR | 2,200 | 4,599 | ||||||
|
| |||||||
203,276 | ||||||||
TURKEY — 1.82% |
| |||||||
Akbank TAS | 5,930 | 23,419 | ||||||
Arcelik AS | 1,107 | 6,125 | ||||||
Asya Katilim Bankasi ASa | 5,293 | 5,590 | ||||||
Enka Insaat ve Sanayi AS | 2,087 | 5,786 | ||||||
Eregli Demir ve Celik Fabrikalari TAS | 4,285 | 4,784 | ||||||
Ford Otomotiv Sanayi AS | 558 | 5,479 |
Security | Shares | Value | ||||||
Haci Omer Sabanci Holding AS | 4,155 | $ | 17,872 | |||||
KOC Holding AS | 3,381 | 13,762 | ||||||
Turk Telekomunikasyon AS | 2,982 | 11,810 | ||||||
Turkcell Iletisim Hizmetleri ASa | 2,195 | 13,039 | ||||||
Turkiye Is Bankasi AS Class C | 8,516 | 25,950 | ||||||
Turkiye Petrol Rafinerileri AS | 671 | 15,354 | ||||||
Turkiye Vakiflar Bankasi TAO Class D | 3,932 | 8,910 | ||||||
Yapi ve Kredi Bankasi ASa | 2,963 | 6,910 | ||||||
|
| |||||||
164,790 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $9,272,515) |
| 8,217,492 | ||||||
PREFERRED STOCKS — 8.70% |
| |||||||
BRAZIL — 7.23% |
| |||||||
AES Tiete SA | 600 | 8,206 | ||||||
Bradespar SA | 1,200 | 15,672 | ||||||
Braskem SA Class A | 800 | 5,047 | ||||||
Centrais Eletricas Brasileiras SA Class B | 1,900 | 17,370 | ||||||
Companhia de Transmissao de Energia Eletrica Paulista | 200 | 4,445 | ||||||
Companhia Paranaense de Energia Class B | 600 | 10,761 | ||||||
Eletropaulo Metropolitana Eletricidade de Sao Paulo SA | 500 | 4,584 | ||||||
Gerdau SA | 4,700 | 41,579 | ||||||
Itau Unibanco Holding SA | 4,200 | 65,617 | ||||||
Itausa — Investimentos Itau SA | 13,860 | 63,868 | ||||||
Metalurgica Gerdau SA | 1,500 | 16,426 | ||||||
Oi SA | 4,419 | 16,791 | ||||||
Petroleo Brasileiro SA | 22,800 | 233,163 | ||||||
Telefonica Brasil SA | 1,400 | 30,359 | ||||||
Usinas Siderurgicas de Minas Gerais SA Class A | 2,500 | 10,042 | ||||||
Vale SA Class A | 6,800 | 111,197 | ||||||
|
| |||||||
655,127 | ||||||||
RUSSIA — 0.40% |
| |||||||
AK Transneft OAO | 4 | 6,517 | ||||||
Sberbank of Russia | 2,900 | 6,143 | ||||||
Surgutneftegas OJSC | 37,200 | 23,961 | ||||||
|
| |||||||
36,621 | ||||||||
SOUTH KOREA — 1.07% |
| |||||||
Hyundai Motor Co. Ltd. | 113 | 6,892 | ||||||
Hyundai Motor Co. Ltd. Series 2 | 196 | 13,163 |
72 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS VALUE INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
LG Chem Ltd. | 47 | $ | 3,765 | |||||
Samsung Electronics Co. Ltd. | 113 | 72,603 | ||||||
|
| |||||||
96,423 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $1,037,994) |
| 788,171 | ||||||
RIGHTS — 0.01% |
| |||||||
THAILAND — 0.01% |
| |||||||
Krung Thai Bank PCL NVDRa | 5,100 | 651 | ||||||
|
| |||||||
651 | ||||||||
|
| |||||||
TOTAL RIGHTS |
| |||||||
(Cost: $0) |
| 651 | ||||||
SHORT-TERM INVESTMENTS — 0.32% |
| |||||||
MONEY MARKET FUNDS — 0.32% |
| |||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.06%c,d | 29,373 | 29,373 | ||||||
|
| |||||||
29,373 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $29,373) |
| 29,373 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $10,339,882) |
| 9,035,687 | ||||||
Other Assets, Less Liabilities — 0.28% |
| 25,014 | ||||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 9,060,701 | |||||
|
|
CPO — Certificates of Participation (Ordinary)
NVDR — Non-Voting 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 consolidated financial statements.
CONSOLIDATED SCHEDULESOF INVESTMENTS | 73 |
Table of Contents
Consolidated Statements of Assets and Liabilities
iSHARES®, INC.
August 31, 2012
iShares MSCI BRIC Index Fund | iShares MSCI Emerging Markets Asia Index Fund | iShares MSCI Emerging Markets Consumer Discretionary Sector Index Fund | ||||||||||
ASSETS | ||||||||||||
Investments, at cost: | ||||||||||||
Unaffiliated | $ | 758,791,320 | $ | 21,706,768 | $ | 2,504,688 | ||||||
Affiliated (Note 2) | 36,484,789 | 9,178 | 21,108 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments | $ | 795,276,109 | $ | 21,715,946 | $ | 2,525,796 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 681,938,721 | $ | 20,008,072 | $ | 2,416,837 | ||||||
Affiliated (Note 2) | 36,484,789 | 9,178 | 21,108 | |||||||||
|
|
|
|
|
| |||||||
Total fair value of investments | 718,423,510 | 20,017,250 | 2,437,945 | |||||||||
Foreign currencies, at valueb | 473,310 | 10,215 | 3,845 | |||||||||
Cash | 2,623,807 | 30,000 | — | |||||||||
Receivables: | ||||||||||||
Investment securities sold | 9,677,742 | 15,513 | 5,514 | |||||||||
Dividends and interest | 1,026,934 | 35,482 | 2,719 | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 732,225,303 | 20,108,460 | 2,450,023 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 2,405,632 | 26,418 | 4,710 | |||||||||
Collateral for securities on loan (Note 5) | 35,369,222 | — | 19,520 | |||||||||
Capital shares redeemed | 7,578,958 | — | — | |||||||||
Line of credit (Note 7) | 1,300,178 | — | — | |||||||||
Foreign taxes (Note 1) | — | 2,898 | 152 | |||||||||
Investment advisory fees (Note 2) | 422,635 | 8,479 | 1,423 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 47,076,625 | 37,795 | 25,805 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 685,148,678 | $ | 20,070,665 | $ | 2,424,218 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 900,929,076 | $ | 21,747,292 | $ | 3,272,295 | ||||||
Undistributed (distributions in excess of) net investment income | (631,851 | ) | 120,446 | 15,100 | ||||||||
Accumulated net realized loss | (138,253,632 | ) | (98,362 | ) | (775,325 | ) | ||||||
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies | (76,894,915 | ) | (1,698,711 | ) | (87,852 | ) | ||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 685,148,678 | $ | 20,070,665 | $ | 2,424,218 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingc | 19,200,000 | 400,000 | 50,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 35.68 | $ | 50.18 | $ | 48.48 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $32,837,121, $ — and $18,434, respectively. See Note 5. |
b | Cost of foreign currencies: $471,922, $10,233 and $3,846, respectively. |
c | $0.001 par value, number of shares authorized: 500 million, 500 million and 500 million, respectively. |
See notes to consolidated financial statements.
74 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Statements of Assets and Liabilities (Continued)
iSHARES®, INC.
August 31, 2012
iShares MSCI Emerging Markets Energy Sector Capped | iShares MSCI Emerging Markets Growth | iShares MSCI Emerging Markets Minimum Volatility Index Fund | ||||||||||
ASSETS | ||||||||||||
Investments, at cost: | ||||||||||||
Unaffiliated | $ | 2,445,148 | $ | 10,559,270 | $ | 376,887,207 | ||||||
Affiliated (Note 2) | 58,812 | 222,869 | 1,602,521 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments | $ | 2,503,960 | $ | 10,782,139 | $ | 378,489,728 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 1,947,774 | $ | 10,090,998 | $ | 384,986,410 | ||||||
Affiliated (Note 2) | 58,812 | 222,869 | 1,602,521 | |||||||||
|
|
|
|
|
| |||||||
Total fair value of investments | 2,006,586 | 10,313,867 | 386,588,931 | |||||||||
Foreign currencies, at valueb | 1,645 | 6,557 | 223,110 | |||||||||
Cash | 4,702 | 10,930 | — | |||||||||
Receivables: | ||||||||||||
Investment securities sold | 10,293 | 44,868 | 1,653,638 | |||||||||
Dividends and interest | 548 | 18,218 | 1,090,834 | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 2,023,774 | 10,394,440 | 389,556,513 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 14,755 | 45,552 | 1,566,515 | |||||||||
Collateral for securities on loan (Note 5) | — | 222,869 | 669,894 | |||||||||
Foreign taxes (Note 1) | — | 796 | 14,845 | |||||||||
Investment advisory fees (Note 2) | 1,192 | 4,265 | 78,185 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 15,947 | 273,482 | 2,329,439 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 2,007,827 | $ | 10,120,958 | $ | 387,227,074 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 3,421,694 | $ | 10,854,325 | $ | 382,079,323 | ||||||
Undistributed net investment income | — | 40,694 | 1,751,482 | |||||||||
Accumulated net realized loss | (916,494 | ) | (305,634 | ) | (4,700,131 | ) | ||||||
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies | (497,373 | ) | (468,427 | ) | 8,096,400 | |||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 2,007,827 | $ | 10,120,958 | $ | 387,227,074 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingc | 50,000 | 200,000 | 7,000,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 40.16 | $ | 50.60 | $ | 55.32 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $ —, $211,904 and $632,603, respectively. See Note 5. |
b | Cost of foreign currencies: $1,635, $6,567 and $223,966, respectively. |
c | $0.001 par value, number of shares authorized: 500 million, 500 million and 500 million, respectively. |
See notes to consolidated financial statements.
CONSOLIDATED FINANCIAL STATEMENTS | 75 |
Table of Contents
Consolidated Statements of Assets and Liabilities (Continued)
iSHARES®, INC.
August 31, 2012
iShares MSCI Markets Small Cap Index Fund | iShares MSCI Emerging Markets Value Index Fund | |||||||
ASSETS | ||||||||
Investments, at cost: | ||||||||
Unaffiliated | $ | 9,385,386 | $ | 10,310,509 | ||||
Affiliated (Note 2) | — | 29,373 | ||||||
|
|
|
| |||||
Total cost of investments | $ | 9,385,386 | $ | 10,339,882 | ||||
|
|
|
| |||||
Investments in securities, at fair value (Note 1): | ||||||||
Unaffiliated | $ | 8,641,717 | $ | 9,006,314 | ||||
Affiliated (Note 2) | — | 29,373 | ||||||
|
|
|
| |||||
Total fair value of investments | 8,641,717 | 9,035,687 | ||||||
Foreign currencies, at valuea | 12,649 | 9,425 | ||||||
Cash | 17,065 | 152 | ||||||
Receivables: | ||||||||
Investment securities sold | 101,819 | 4,572 | ||||||
Dividends and interest | 27,619 | 20,611 | ||||||
|
|
|
| |||||
Total Assets | 8,800,869 | 9,070,447 | ||||||
|
|
|
| |||||
LIABILITIES | ||||||||
Payables: | ||||||||
Investment securities purchased | 105,984 | 5,053 | ||||||
Foreign taxes (Note 1) | 1,267 | 848 | ||||||
Investment advisory fees (Note 2) | 5,059 | 3,845 | ||||||
|
|
|
| |||||
Total Liabilities | 112,310 | 9,746 | ||||||
|
|
|
| |||||
NET ASSETS | $ | 8,688,559 | $ | 9,060,701 | ||||
|
|
|
| |||||
Net assets consist of: | ||||||||
Paid-in capital | $ | 17,785,830 | $ | 10,520,963 | ||||
Undistributed net investment income | 237,427 | 43,741 | ||||||
Accumulated net realized loss | (8,590,803 | ) | (199,744 | ) | ||||
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies | (743,895 | ) | (1,304,259 | ) | ||||
|
|
|
| |||||
NET ASSETS | $ | 8,688,559 | $ | 9,060,701 | ||||
|
|
|
| |||||
Shares outstandingb | 200,000 | 200,000 | ||||||
|
|
|
| |||||
Net asset value per share | $ | 43.44 | $ | 45.30 | ||||
|
|
|
|
a | Cost of foreign currencies: $12,653 and $9,424, respectively. |
b | $0.001 par value, number of shares authorized: 500 million and 500 million, respectively. |
See notes to consolidated financial statements.
76 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Statements of Operations
iSHARES®, INC.
Period ended August 31, 2012
iShares MSCI Index Fund | iShares MSCI Emerging Markets Asia | iShares MSCI Markets Consumer Discretionary Sector | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliatedb | $ | 24,725,808 | $ | 337,821 | $ | 74,739 | ||||||
Interest — affiliated (Note 2) | 344 | 5 | 1 | |||||||||
Securities lending income — affiliated (Note 2) | 702,843 | — | 948 | |||||||||
|
|
|
|
|
| |||||||
25,428,995 | 337,826 | 75,688 | ||||||||||
Less: Other foreign taxes (Note 1) | — | (3,724 | ) | (152 | ) | |||||||
|
|
|
|
|
| |||||||
Total investment income | 25,428,995 | 334,102 | 75,536 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 5,399,206 | 64,202 | 31,777 | |||||||||
Commitment fees (Note 7) | 4,609 | 34 | 14 | |||||||||
Interest expense (Note 7) | 1,160 | — | — | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 5,404,975 | 64,236 | 31,791 | |||||||||
Less investment advisory fees waived (Note 2) | — | (17,939 | ) | — | ||||||||
|
|
|
|
|
| |||||||
Net expenses | 5,404,975 | 46,297 | 31,791 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 20,024,020 | 287,805 | 43,745 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | (89,543,283 | ) | (96,787 | ) | (776,862 | ) | ||||||
In-kind redemptions — unaffiliated | 24,302,811 | — | (179,013 | ) | ||||||||
Foreign currency transactions | (1,343,260 | ) | (5,970 | ) | (2,515 | ) | ||||||
|
|
|
|
|
| |||||||
Net realized loss | (66,583,732 | ) | (102,757 | ) | (958,390 | ) | ||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments | (88,384,034 | ) | (1,698,696 | ) | (87,851 | ) | ||||||
Translation of assets and liabilities in foreign currencies | (148,296 | ) | (15 | ) | (1 | ) | ||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | (88,532,330 | ) | (1,698,711 | ) | (87,852 | ) | ||||||
|
|
|
|
|
| |||||||
Net realized and unrealized loss | (155,116,062 | ) | (1,801,468 | ) | (1,046,242 | ) | ||||||
|
|
|
|
|
| |||||||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (135,092,042 | ) | $ | (1,513,663 | ) | $ | (1,002,497 | ) | |||
|
|
|
|
|
|
a | For the period from February 8, 2012 (commencement of operations) to August 31, 2012. |
b | Net of foreign withholding tax of $2,455,381, $49,278 and $7,263, respectively. |
See notes to consolidated financial statements.
CONSOLIDATED FINANCIAL STATEMENTS | 77 |
Table of Contents
Consolidated Statements of Operations (Continued)
iSHARES®, INC.
Period ended August 31, 2012
iShares MSCI Emerging Markets Energy Sector Capped Index Funda | iShares MSCI Markets Growth Index Funda | iShares MSCI Emerging Markets Minimum Volatility Index Fundb | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliatedc | $ | 204,950 | $ | 159,563 | $ | 4,594,755 | ||||||
Interest — unaffiliated | — | — | 321 | |||||||||
Interest — affiliated (Note 2) | 2 | 2 | 72 | |||||||||
Securities lending income — affiliated (Note 2) | 1 | 1,118 | 12,329 | |||||||||
|
|
|
|
|
| |||||||
204,953 | 160,683 | 4,607,477 | ||||||||||
Less: Other foreign taxes (Note 1) | — | (899 | ) | (27,867 | ) | |||||||
|
|
|
|
|
| |||||||
Total investment income | 204,953 | 159,784 | 4,579,610 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 28,472 | 39,428 | 726,408 | |||||||||
Commitment fees (Note 7) | 11 | 14 | 112 | |||||||||
Interest expense (Note 7) | 6 | 21 | 116 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 28,489 | 39,463 | 726,636 | |||||||||
Less investment advisory fees waived (Note 2) | — | (11,017 | ) | (461,865 | ) | |||||||
|
|
|
|
|
| |||||||
Net expenses | 28,489 | 28,446 | 264,771 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 176,464 | 131,338 | 4,314,839 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | (916,494 | ) | (305,634 | ) | (4,730,152 | ) | ||||||
In-kind redemptions — unaffiliated | (870,580 | ) | — | 1,183,641 | ||||||||
Foreign currency transactions | (8,266 | ) | (5,596 | ) | (302,989 | ) | ||||||
|
|
|
|
|
| |||||||
Net realized loss | (1,795,340 | ) | (311,230 | ) | (3,849,500 | ) | ||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments | (497,374 | ) | (468,272 | ) | 8,099,203 | |||||||
Translation of assets and liabilities in foreign currencies | 1 | (155 | ) | (2,803 | ) | |||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | (497,373 | ) | (468,427 | ) | 8,096,400 | |||||||
|
|
|
|
|
| |||||||
Net realized and unrealized gain (loss) | (2,292,713 | ) | (779,657 | ) | 4,246,900 | |||||||
|
|
|
|
|
| |||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | (2,116,249 | ) | $ | (648,319 | ) | $ | 8,561,739 | ||||
|
|
|
|
|
|
a | For the period from February 8, 2012 (commencement of operations) to August 31, 2012. |
b | For the period from October 18, 2011 (commencement of operations) to August 31, 2012. |
c | Net of foreign withholding tax of $26,336, $18,177 and $639,425, respectively. |
See notes to consolidated financial statements.
78 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Statements of Operations (Continued)
iSHARES®, INC.
Period ended August 31, 2012
iShares MSCI Emerging Markets Small Cap | iShares MSCI Emerging Markets Value Index Funda | |||||||
NET INVESTMENT INCOME | ||||||||
Dividends — unaffiliatedb | $ | 659,962 | $ | 226,587 | ||||
Interest — unaffiliated | 2 | — | ||||||
Interest — affiliated (Note 2) | 18 | 2 | ||||||
|
|
|
| |||||
659,982 | 226,589 | |||||||
Less: Other foreign taxes (Note 1) | (7,991 | ) | (1,198 | ) | ||||
|
|
|
| |||||
Total investment income | 651,991 | 225,391 | ||||||
|
|
|
| |||||
EXPENSES | ||||||||
Investment advisory fees (Note 2) | 246,547 | 36,290 | ||||||
Commitment fees (Note 7) | 122 | 13 | ||||||
Interest expense (Note 7) | 424 | 20 | ||||||
|
|
|
| |||||
Total expenses | 247,093 | 36,323 | ||||||
Less investment advisory fees waived (Note 2) | — | (10,140 | ) | |||||
|
|
|
| |||||
Net expenses | 247,093 | 26,183 | ||||||
|
|
|
| |||||
Net investment income | 404,898 | 199,208 | ||||||
|
|
|
| |||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||
Net realized gain (loss) from: | ||||||||
Investments — unaffiliated | (8,472,797 | ) | (199,744 | ) | ||||
In-kind redemptions — unaffiliated | (2,448,237 | ) | — | |||||
Foreign currency transactions | 152,435 | (6,976 | ) | |||||
|
|
|
| |||||
Net realized loss | (10,768,599 | ) | (206,720 | ) | ||||
|
|
|
| |||||
Net change in unrealized appreciation/depreciation on: | ||||||||
Investments | 643,123 | (1,304,195 | ) | |||||
Translation of assets and liabilities in foreign currencies | 822 | (64 | ) | |||||
|
|
|
| |||||
Net change in unrealized appreciation/depreciation | 643,945 | (1,304,259 | ) | |||||
|
|
|
| |||||
Net realized and unrealized loss | (10,124,654 | ) | (1,510,979 | ) | ||||
|
|
|
| |||||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (9,719,756 | ) | $ | (1,311,771 | ) | ||
|
|
|
|
a | For the period from February 8, 2012 (commencement of operations) to August 31, 2012. |
b | Net of foreign withholding tax of $64,407 and $29,110, respectively. |
See notes to consolidated financial statements.
CONSOLIDATED FINANCIAL STATEMENTS | 79 |
Table of Contents
Consolidated Statements of Changes in Net Assets
iSHARES®, INC.
iShares MSCI BRIC Index Fund | iShares MSCI Emerging Markets Asia Index Fund | |||||||||||
Year ended August 31, 2012 | Year ended August 31, 2011 | Period from to August 31, 2012 | ||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||
OPERATIONS: | ||||||||||||
Net investment income | $ | 20,024,020 | $ | 20,442,911 | $ | 287,805 | ||||||
Net realized gain (loss) | (66,583,732 | ) | 18,189,682 | (102,757 | ) | |||||||
Net change in unrealized appreciation/depreciation | (88,532,330 | ) | (29,622,905 | ) | (1,698,711 | ) | ||||||
|
|
|
|
|
| |||||||
Net increase (decrease) in net assets resulting from operations | (135,092,042 | ) | 9,009,688 | (1,513,663 | ) | |||||||
|
|
|
|
|
| |||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||
From net investment income | (18,504,865 | ) | (22,858,814 | ) | (162,964 | ) | ||||||
|
|
|
|
|
| |||||||
Total distributions to shareholders | (18,504,865 | ) | (22,858,814 | ) | (162,964 | ) | ||||||
|
|
|
|
|
| |||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||
Proceeds from shares sold | 247,215,549 | 111,929,766 | 21,747,292 | |||||||||
Cost of shares redeemed | (274,663,908 | ) | (178,701,150 | ) | — | |||||||
|
|
|
|
|
| |||||||
Net increase (decrease) in net assets from capital share transactions | (27,448,359 | ) | (66,771,384 | ) | 21,747,292 | |||||||
|
|
|
|
|
| |||||||
INCREASE (DECREASE) IN NET ASSETS | (181,045,266 | ) | (80,620,510 | ) | 20,070,665 | |||||||
NET ASSETS | ||||||||||||
Beginning of period | 866,193,944 | 946,814,454 | — | |||||||||
|
|
|
|
|
| |||||||
End of period | $ | 685,148,678 | $ | 866,193,944 | $ | 20,070,665 | ||||||
|
|
|
|
|
| |||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of period | $ | (631,851 | ) | $ | (1,686,142 | ) | $ | 120,446 | ||||
|
|
|
|
|
| |||||||
SHARES ISSUED AND REDEEMED | ||||||||||||
Shares sold | 6,050,000 | 2,300,000 | 400,000 | |||||||||
Shares redeemed | (7,350,000 | ) | (3,850,000 | ) | — | |||||||
|
|
|
|
|
| |||||||
Net increase (decrease) in shares outstanding | (1,300,000 | ) | (1,550,000 | ) | 400,000 | |||||||
|
|
|
|
|
|
a | Commencement of operations. |
See notes to consolidated financial statements.
80 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Emerging Markets Consumer Discretionary Sector Index Fund | iShares MSCI Emerging Markets Energy Sector Capped Index Fund | |||||||
Period from to August 31, 2012 | Period from to August 31, 2012 | |||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||
OPERATIONS: | ||||||||
Net investment income | $ | 43,745 | $ | 176,464 | ||||
Net realized loss | (958,390 | ) | (1,795,340 | ) | ||||
Net change in unrealized appreciation/depreciation | (87,852 | ) | (497,373 | ) | ||||
|
|
|
| |||||
Net decrease in net assets resulting from operations | (1,002,497 | ) | (2,116,249 | ) | ||||
|
|
|
| |||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||
From net investment income | (26,130 | ) | (168,198 | ) | ||||
Return of capital | — | (6,779 | ) | |||||
|
|
|
| |||||
Total distributions to shareholders | (26,130 | ) | (174,977 | ) | ||||
|
|
|
| |||||
CAPITAL SHARE TRANSACTIONS: | ||||||||
Proceeds from shares sold | 10,313,556 | 10,227,402 | ||||||
Cost of shares redeemed | (6,860,711 | ) | (5,928,349 | ) | ||||
|
|
|
| |||||
Net increase in net assets from capital share transactions | 3,452,845 | 4,299,053 | ||||||
|
|
|
| |||||
INCREASE IN NET ASSETS | 2,424,218 | 2,007,827 | ||||||
NET ASSETS | ||||||||
Beginning of period | — | — | ||||||
|
|
|
| |||||
End of period | $ | 2,424,218 | $ | 2,007,827 | ||||
|
|
|
| |||||
Undistributed net investment income included in net assets at end of period | $ | 15,100 | $ | — | ||||
|
|
|
| |||||
SHARES ISSUED AND REDEEMED | ||||||||
Shares sold | 200,000 | 200,000 | ||||||
Shares redeemed | (150,000 | ) | (150,000 | ) | ||||
|
|
|
| |||||
Net increase in shares outstanding | 50,000 | 50,000 | ||||||
|
|
|
|
a | Commencement of operations. |
See notes to consolidated financial statements.
CONSOLIDATED FINANCIAL STATEMENTS | 81 |
Table of Contents
Consolidated Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Emerging Markets Growth Index Fund | iShares MSCI Emerging Markets Minimum Volatility Index Fund | |||||||
Period from to August 31, 2012 | Period from to August 31, 2012 | |||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||
OPERATIONS: | ||||||||
Net investment income | $ | 131,338 | $ | 4,314,839 | ||||
Net realized loss | (311,230 | ) | (3,849,500 | ) | ||||
Net change in unrealized appreciation/depreciation | (468,427 | ) | 8,096,400 | |||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | (648,319 | ) | 8,561,739 | |||||
|
|
|
| |||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||
From net investment income | (85,048 | ) | (2,260,368 | ) | ||||
|
|
|
| |||||
Total distributions to shareholders | (85,048 | ) | (2,260,368 | ) | ||||
|
|
|
| |||||
CAPITAL SHARE TRANSACTIONS: | ||||||||
Proceeds from shares sold | 10,854,325 | 411,979,067 | ||||||
Cost of shares redeemed | — | (31,053,364 | ) | |||||
|
|
|
| |||||
Net increase in net assets from capital share transactions | 10,854,325 | 380,925,703 | ||||||
|
|
|
| |||||
INCREASE IN NET ASSETS | 10,120,958 | 387,227,074 | ||||||
NET ASSETS | ||||||||
Beginning of period | — | — | ||||||
|
|
|
| |||||
End of period | $ | 10,120,958 | $ | 387,227,074 | ||||
|
|
|
| |||||
Undistributed net investment income included in net assets at end of period | $ | 40,694 | $ | 1,751,482 | ||||
|
|
|
| |||||
SHARES ISSUED AND REDEEMED | ||||||||
Shares sold | 200,000 | 7,600,000 | ||||||
Shares redeemed | — | (600,000 | ) | |||||
|
|
|
| |||||
Net increase in shares outstanding | 200,000 | 7,000,000 | ||||||
|
|
|
|
a | Commencement of operations. |
See notes to consolidated financial statements.
82 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Emerging Markets Small Cap Index Fund | iShares MSCI Emerging Markets Value Index Fund | |||||||||||
Year ended August 31, 2012 | Period from to August 31, 2011 | Period from to August 31, 2012 | ||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||
OPERATIONS: | ||||||||||||
Net investment income | $ | 404,898 | $ | 92,673 | $ | 199,208 | ||||||
Net realized loss | (10,768,599 | ) | (93,859 | ) | (206,720 | ) | ||||||
Net change in unrealized appreciation/depreciation | 643,945 | (1,387,840 | ) | (1,304,259 | ) | |||||||
|
|
|
|
|
| |||||||
Net decrease in net assets resulting from operations | (9,719,756 | ) | (1,389,026 | ) | (1,311,771 | ) | ||||||
|
|
|
|
|
| |||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||
From net investment income | (500,104 | ) | — | (148,491 | ) | |||||||
|
|
|
|
|
| |||||||
Total distributions to shareholders | (500,104 | ) | — | (148,491 | ) | |||||||
|
|
|
|
|
| |||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||
Proceeds from shares sold | 9,491,705 | 70,832,414 | 10,520,963 | |||||||||
Cost of shares redeemed | (60,026,674 | ) | — | — | ||||||||
|
|
|
|
|
| |||||||
Net increase (decrease) in net assets from capital share transactions | (50,534,969 | ) | 70,832,414 | 10,520,963 | ||||||||
|
|
|
|
|
| |||||||
INCREASE (DECREASE) IN NET ASSETS | (60,754,829 | ) | 69,443,388 | 9,060,701 | ||||||||
NET ASSETS | ||||||||||||
Beginning of period | 69,443,388 | — | — | |||||||||
|
|
|
|
|
| |||||||
End of period | $ | 8,688,559 | $ | 69,443,388 | $ | 9,060,701 | ||||||
|
|
|
|
|
| |||||||
Undistributed net investment income included in net assets at end of period | $ | 237,427 | $ | 62,835 | $ | 43,741 | ||||||
|
|
|
|
|
| |||||||
SHARES ISSUED AND REDEEMED | ||||||||||||
Shares sold | 200,000 | 1,400,000 | 200,000 | |||||||||
Shares redeemed | (1,400,000 | ) | — | — | ||||||||
|
|
|
|
|
| |||||||
Net increase (decrease) in shares outstanding | (1,200,000 | ) | 1,400,000 | 200,000 | ||||||||
|
|
|
|
|
|
a | Commencement of operations. |
See notes to consolidated financial statements.
CONSOLIDATED FINANCIAL STATEMENTS | 83 |
Table of Contents
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI BRIC Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2012 (Consolidated) | Year ended Aug. 31, 2011 (Consolidated) | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Period from to Aug. 31, 2008 | ||||||||||||||||
Net asset value, beginning of period | $ | 42.25 | $ | 42.94 | $ | 37.57 | $ | 44.13 | $ | 56.50 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: |
| |||||||||||||||||||
Net investment incomeb | 0.98 | 0.89 | 0.66 | 0.58 | 0.72 | |||||||||||||||
Net realized and unrealized gain (loss)c | (6.62 | ) | (0.58 | ) | 5.35 | (6.60 | ) | (12.93 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (5.64 | ) | 0.31 | 6.01 | (6.02 | ) | (12.21 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.93 | ) | (1.00 | ) | (0.64 | ) | (0.54 | ) | (0.16 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.93 | ) | (1.00 | ) | (0.64 | ) | (0.54 | ) | (0.16 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of period | $ | 35.68 | $ | 42.25 | $ | 42.94 | $ | 37.57 | $ | 44.13 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | (13.33 | )% | 0.49 | % | 15.95 | % | (13.08 | )% | (21.65 | )%d | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: |
| |||||||||||||||||||
Net assets, end of period (000s) | $ | 685,149 | $ | 866,194 | $ | 946,814 | $ | 497,839 | $ | 161,092 | ||||||||||
Ratio of expenses to average net assetse | 0.69 | % | 0.67 | % | 0.69 | % | 0.72 | % | 0.72 | % | ||||||||||
Ratio of expenses to average net assets prior to waived feese,f | n/a | 0.67 | % | n/a | n/a | n/a | ||||||||||||||
Ratio of net investment income to average net assetse | 2.55 | % | 1.86 | % | 1.52 | % | 1.87 | % | 1.74 | % | ||||||||||
Portfolio turnover rateg | 32 | % | 13 | % | 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 | Ratios for the periods ended August 31, 2010 and prior have been recalculated, as necessary, to conform with the current presentation of foreign taxes. |
g | 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, 2012, August 31, 2011, August 31, 2010, August 31, 2009 and the period ended August 31, 2008 would have been 20%, 10%, 8%, 6% and 2%, respectively. See Note 4. |
See notes to consolidated financial statements.
84 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout the period)
iShares MSCI Emerging Markets Asia Index Fund | ||||
Period from to Aug. 31, 2012 | ||||
Net asset value, beginning of period | $ | 54.71 | ||
|
| |||
Income from investment operations: |
| |||
Net investment incomeb | 0.87 | |||
Net realized and unrealized lossc | (4.99 | ) | ||
|
| |||
Total from investment operations | (4.12 | ) | ||
|
| |||
Less distributions from: | ||||
Net investment income | (0.41 | ) | ||
|
| |||
Total distributions | (0.41 | ) | ||
|
| |||
Net asset value, end of period | $ | 50.18 | ||
|
| |||
Total return | (7.52 | )%d | ||
|
| |||
Ratios/Supplemental data: | ||||
Net assets, end of period (000s) | $ | 20,071 | ||
Ratio of expenses to average net assetse | 0.49 | % | ||
Ratio of expenses to average net assets prior to waived feese | 0.68 | % | ||
Ratio of net investment income to average net assetse | 3.05 | % | ||
Portfolio turnover ratef | 3 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout the period. |
c | The amount 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 rate excludes portfolio securities received or delivered in Creation Units but includes 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 period ended August 31, 2012 would have been 3%. See Note 4. |
See notes to consolidated financial statements.
CONSOLIDATED FINANCIAL HIGHLIGHTS | 85 |
Table of Contents
Consolidated Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout the period)
iShares MSCI Emerging Markets Consumer Discretionary Sector Index Fund | ||||
Period from to Aug. 31, 2012 | ||||
Net asset value, beginning of period | $ | 51.54 | ||
|
| |||
Income from investment operations: |
| |||
Net investment incomeb | 0.26 | |||
Net realized and unrealized lossc | (3.19 | ) | ||
|
| |||
Total from investment operations | (2.93 | ) | ||
|
| |||
Less distributions from: | ||||
Net investment income | (0.13 | ) | ||
|
| |||
Total distributions | (0.13 | ) | ||
|
| |||
Net asset value, end of period | $ | 48.48 | ||
|
| |||
Total return | (5.68 | )%d | ||
|
| |||
Ratios/Supplemental data: | ||||
Net assets, end of period (000s) | $ | 2,424 | ||
Ratio of expenses to average net assetse | 0.68 | % | ||
Ratio of net investment income to average net assetse | 0.94 | % | ||
Portfolio turnover ratef | 54 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout the period. |
c | The amount 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 rate excludes portfolio securities received or delivered in Creation Units but includes 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 period ended August 31, 2012 would have been 5%. See Note 4. |
See notes to consolidated financial statements.
86 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout the period)
iShares MSCI Emerging Markets Energy Sector Capped Index Fund | ||||
Period from to Aug. 31, 2012 | ||||
Net asset value, beginning of period | $ | 51.12 | ||
|
| |||
Income from investment operations: |
| |||
Net investment incomeb | 1.05 | |||
Net realized and unrealized lossc | (11.14 | ) | ||
|
| |||
Total from investment operations | (10.09 | ) | ||
|
| |||
Less distributions from: | ||||
Net investment income | (0.84 | ) | ||
Return of capital | (0.03 | ) | ||
|
| |||
Total distributions | (0.87 | ) | ||
|
| |||
Net asset value, end of period | $ | 40.16 | ||
|
| |||
Total return | (19.71 | )%d | ||
|
| |||
Ratios/Supplemental data: | ||||
Net assets, end of period (000s) | $ | 2,008 | ||
Ratio of expenses to average net assetse | 0.68 | % | ||
Ratio of net investment income to average net assetse | 4.23 | % | ||
Portfolio turnover ratef | 29 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout the period. |
c | The amount 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 rate excludes portfolio securities received or delivered in Creation Units but includes 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 period ended August 31, 2012 would have been 3%. See Note 4. |
See notes to consolidated financial statements.
CONSOLIDATED FINANCIAL HIGHLIGHTS | 87 |
Table of Contents
Consolidated Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout the period)
iShares MSCI Emerging Markets Growth Index Fund | ||||
Period from to Aug. 31, 2012 | ||||
Net asset value, beginning of period | $ | 54.24 | ||
|
| |||
Income from investment operations: |
| |||
Net investment incomeb | 0.66 | |||
Net realized and unrealized lossc | (3.87 | ) | ||
|
| |||
Total from investment operations | (3.21 | ) | ||
|
| |||
Less distributions from: | ||||
Net investment income | (0.43 | ) | ||
|
| |||
Total distributions | (0.43 | ) | ||
|
| |||
Net asset value, end of period | $ | 50.60 | ||
|
| |||
Total return | (5.90 | )%d | ||
|
| |||
Ratios/Supplemental data: | ||||
Net assets, end of period (000s) | $ | 10,121 | ||
Ratio of expenses to average net assetse | 0.49 | % | ||
Ratio of expenses to average net assets prior to waived feese | 0.68 | % | ||
Ratio of net investment income to average net assetse | 2.27 | % | ||
Portfolio turnover ratef | 12 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout the period. |
c | The amount 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 rate excludes portfolio securities received or delivered in Creation Units but includes 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 period ended August 31, 2012 would have been 12%. See Note 4. |
See notes to consolidated financial statements.
88 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout the period)
iShares MSCI Emerging Markets Minimum Volatility Index Fund | ||||
Period from to Aug. 31, 2012 | ||||
Net asset value, beginning of period | $ | 49.30 | ||
|
| |||
Income from investment operations: |
| |||
Net investment incomeb | 1.93 | |||
Net realized and unrealized gainc | 5.41 | |||
|
| |||
Total from investment operations | 7.34 | |||
|
| |||
Less distributions from: | ||||
Net investment income | (1.32 | ) | ||
|
| |||
Total distributions | (1.32 | ) | ||
|
| |||
Net asset value, end of period | $ | 55.32 | ||
|
| |||
Total return | 15.16 | %d | ||
|
| |||
Ratios/Supplemental data: | ||||
Net assets, end of period (000s) | $ | 387,227 | ||
Ratio of expenses to average net assetse | 0.25 | % | ||
Ratio of expenses to average net assets prior to waived feese | 0.69 | % | ||
Ratio of net investment income to average net assetse | 4.08 | % | ||
Portfolio turnover ratef | 31 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout the period. |
c | The amount 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 rate excludes portfolio securities received or delivered in Creation Units but includes 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 period ended August 31, 2012 would have been 16%. See Note 4. |
See notes to consolidated financial statements.
CONSOLIDATED FINANCIAL HIGHLIGHTS | 89 |
Table of Contents
Consolidated Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Emerging Markets Small Cap Index Fund
Year ended Aug. 31, 2012 | Period from to Aug. 31, 2011 | |||||||
Net asset value, beginning of period | $ | 49.60 | $ | 50.54 | ||||
|
|
|
| |||||
Income from investment operations: |
| |||||||
Net investment incomeb | 0.50 | 0.07 | ||||||
Net realized and unrealized lossc | (5.52 | ) | (1.01 | ) | ||||
|
|
|
| |||||
Total from investment operations | (5.02 | ) | (0.94 | ) | ||||
|
|
|
| |||||
Less distributions from: | ||||||||
Net investment income | (1.14 | ) | 0.00 | |||||
|
|
|
| |||||
Total distributions | (1.14 | ) | 0.00 | |||||
|
|
|
| |||||
Net asset value, end of period | $ | 43.44 | $ | 49.60 | ||||
|
|
|
| |||||
Total return | (9.98 | )% | (1.86 | )%d | ||||
|
|
|
| |||||
Ratios/Supplemental data: | ||||||||
Net assets, end of period (000s) | $ | 8,689 | $ | 69,443 | ||||
Ratio of expenses to average net assetse | 0.69 | % | 0.69 | % | ||||
Ratio of net investment income to average net assetse | 1.13 | % | 3.33 | % | ||||
Portfolio turnover ratef | 32 | % | 2 | % |
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 includes 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 year ended August 31, 2012 and the period ended August 31, 2011 would have been 17% and 2%, respectively. See Note 4. |
See notes to consolidated financial statements.
90 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout the period)
iShares MSCI Emerging Markets Value Index Fund | ||||
Period from to Aug. 31, 2012 | ||||
Net asset value, beginning of period | $ | 52.58 | ||
|
| |||
Income from investment operations: |
| |||
Net investment incomeb | 1.00 | |||
Net realized and unrealized lossc | (7.54 | ) | ||
|
| |||
Total from investment operations | (6.54 | ) | ||
|
| |||
Less distributions from: | ||||
Net investment income | (0.74 | ) | ||
|
| |||
Total distributions | (0.74 | ) | ||
|
| |||
Net asset value, end of period | $ | 45.30 | ||
|
| |||
Total return | (12.41 | )%d | ||
|
| |||
Ratios/Supplemental data: | ||||
Net assets, end of period (000s) | $ | 9,061 | ||
Ratio of expenses to average net assetse | 0.49 | % | ||
Ratio of expenses to average net assets prior to waived feese | 0.68 | % | ||
Ratio of net investment income to average net assetse | 3.73 | % | ||
Portfolio turnover ratef | 12 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout the period. |
c | The amount 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 rate excludes portfolio securities received or delivered in Creation Units but includes 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 period ended August 31, 2012 would have been 12%. See Note 4. |
See notes to consolidated financial statements.
CONSOLIDATED FINANCIAL HIGHLIGHTS | 91 |
Table of Contents
Notes to Consolidated Financial Statements
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 consolidated financial statements relate only to the following funds (each, a “Fund,” and collectively, the “Funds”):
iShares MSCI Index Fund | Diversification Classification | |||
BRIC | Non-diversified | |||
Emerging Markets Asiaa | Diversified | |||
Emerging Markets Consumer Discretionary Sectora | Non-diversified | |||
Emerging Markets Energy Sector Cappeda | Non-diversified |
iShares MSCI Index Fund | Diversification Classification | |||
Emerging Markets Growtha | Non-diversified | |||
Emerging Markets Minimum Volatilityb | Non-diversified | |||
Emerging Markets Small Cap | Non-diversified | |||
Emerging Markets Valuea | Non-diversified |
a | The Fund commenced operations on February 8, 2012. |
b | The Fund commenced operations on October 18, 2011. |
Non-diversified funds generally hold securities of fewer issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers.
The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index. The investment adviser uses a “passive” or index approach to try to achieve each Fund’s investment objective.
Each Fund carries out its investment strategies associated with investment in Indian securities by investing in a wholly-owned subsidiary in the Republic of Mauritius (each, a “Subsidiary,” and collectively, the “Subsidiaries”), which in turn invests in Indian securities included in the underlying index. The investment adviser of each Fund also serves as the investment adviser to each Subsidiary. Through this investment structure, each Fund expects to obtain certain benefits under a current tax treaty between Mauritius and India. The accompanying consolidated financial statements for each Fund include the accounts of its Subsidiary.
Each Fund may invest in securities of non-U.S. issuers that may trade in non-U.S. markets. This may involve certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: generally less liquid and less efficient securities markets; generally greater price volatility; exchange rate fluctuations and exchange controls; imposition of restrictions on the expatriation of funds or other assets of the Funds; 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.
92 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Consolidated Financial Statements (Continued)
iSHARES®, INC.
1. | SIGNIFICANT ACCOUNTING POLICIES |
The following significant accounting policies are consistently followed by the Funds in the preparation of their 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
Each Fund’s investments are valued at fair value each day that the Fund’s listing exchange is open. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) provides oversight of the valuation of investments for the Funds. The investments of each Fund are valued pursuant to policies and procedures developed by the Global Valuation Committee and approved by the Board of Directors of the Company (the “Board”).
• | Equity investments traded on a recognized securities exchange are valued at that day’s last reported trade price or the official closing price, as applicable, on the exchange where the stock is primarily traded. Equity investments traded on a recognized exchange for which there were no sales on that day are valued at the last traded price. |
• | Open-end U.S. mutual funds are valued at that day’s published net asset value (NAV). |
In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the fair value of such investment or if a price is not available, the investment will be valued based upon other available factors deemed relevant by the Global Valuation Committee, in accordance with policies approved by the Board. These factors include but are not limited to (i) attributes specific to the investment; (ii) the principal market for the investment; (iii) the customary participants in the principal market for the investment; (iv) data assumptions by market participants for the investment, if reasonably available; (v) quoted prices for similar investments in active markets; and (vi) other factors, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and/or other default rates. Valuations based on such factors are reported to the Board on a quarterly basis.
The Global Valuation Committee employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the Company’s pricing vendors, a regular review of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices and large movements in market values, and reviews of market related activity.
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.
Various inputs are used in determining the fair value of financial instruments. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes. The level of a value determined for 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
NOTESTO CONSOLIDATED FINANCIAL STATEMENTS | 93 |
Table of Contents
Notes to Consolidated Financial Statements (Continued)
iSHARES®, INC.
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. The three levels of the fair value hierarchy are as follows:
• | Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities; |
• | Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability (such as exchange rates, financing terms, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs; and |
• | Level 3 — Unobservable inputs for the asset or liability, including the Funds’ assumptions used in determining the fair value of investments. |
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. In accordance with the Company’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period.
The following table summarizes the value of each of the Funds’ investments according to the fair value hierarchy as of August 31, 2012. The breakdown of each Fund’s investments into major categories is disclosed in its respective Consolidated Schedule of Investments.
iShares MSCI Index Fund and | Investments | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
BRIC | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 566,596,994 | $ | — | $ | — | $ | 566,596,994 | ||||||||
Preferred Stocks | 115,341,727 | — | — | 115,341,727 | ||||||||||||
Short-Term Investments | 36,484,789 | — | — | 36,484,789 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 718,423,510 | $ | — | $ | — | $ | 718,423,510 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Emerging Markets Asia | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 19,799,737 | $ | 33,731 | $ | — | $ | 19,833,468 | ||||||||
Preferred Stocks | 173,704 | — | — | 173,704 | ||||||||||||
Rights | — | 900 | — | 900 | ||||||||||||
Short-Term Investments | 9,178 | — | — | 9,178 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 19,982,619 | $ | 34,631 | $ | — | $ | 20,017,250 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Emerging Markets Consumer Discretionary Sector | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 2,328,003 | $ | 29,038 | $ | — | $ | 2,357,041 | ||||||||
Preferred Stocks | 59,796 | — | — | 59,796 | ||||||||||||
Short-Term Investments | 21,108 | — | — | 21,108 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 2,408,907 | $ | 29,038 | $ | — | $ | 2,437,945 | |||||||||
|
|
|
|
|
|
|
| |||||||||
94 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Consolidated Financial Statements (Continued)
iSHARES®, INC.
iShares MSCI Index Fund and | Investments | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Emerging Markets Energy Sector Capped | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 1,731,696 | $ | — | $ | — | $ | 1,731,696 | ||||||||
Preferred Stocks | 216,078 | — | — | 216,078 | ||||||||||||
Short-Term Investments | 58,812 | — | — | 58,812 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 2,006,586 | $ | — | $ | — | $ | 2,006,586 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Emerging Markets Growth | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 9,344,590 | $ | 19,799 | $ | — | $ | 9,364,389 | ||||||||
Preferred Stocks | 726,609 | — | — | 726,609 | ||||||||||||
Short-Term Investments | 222,869 | — | — | 222,869 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 10,294,068 | $ | 19,799 | $ | — | $ | 10,313,867 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Emerging Markets Minimum Volatility | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 366,327,556 | $ | — | $ | — | $ | 366,327,556 | ||||||||
Preferred Stocks | 18,658,854 | — | — | 18,658,854 | ||||||||||||
Short-Term Investments | 1,602,521 | — | — | 1,602,521 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 386,588,931 | $ | — | $ | — | $ | 386,588,931 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Emerging Markets Small Cap | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 8,517,187 | $ | 10,521 | $ | 5,198 | $ | 8,532,906 | ||||||||
Preferred Stocks | 108,811 | — | — | 108,811 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 8,625,998 | $ | 10,521 | $ | 5,198 | $ | 8,641,717 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Emerging Markets Value | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 8,217,492 | $ | — | $ | — | $ | 8,217,492 | ||||||||
Preferred Stocks | 788,171 | — | — | 788,171 | ||||||||||||
Rights | — | 651 | — | 651 | ||||||||||||
Short-Term Investments | 29,373 | — | — | 29,373 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 9,035,036 | $ | 651 | $ | — | $ | 9,035,687 | |||||||||
|
|
|
|
|
|
|
| |||||||||
The iShares MSCI Emerging Markets Consumer Discretionary Sector Index Fund had transfers from Level 1 to Level 2 during the period ended August 31, 2012 in the amount of $31,538, measured as of the point of acquisition by the Fund, resulting from a temporary suspension of trading due to a pending corporate action.
NOTESTO CONSOLIDATED FINANCIAL STATEMENTS | 95 |
Table of Contents
Notes to Consolidated Financial Statements (Continued)
iSHARES®, INC.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are accounted for on trade date. Dividend income is recognized on the ex-dividend date, net of any foreign taxes withheld at source. Any taxes withheld that are reclaimable from foreign tax authorities as of August 31, 2012 are reflected in dividends receivable. Non-cash dividends received in the form of stock in an elective dividend, if any, are recorded as dividend income at fair value. Distributions received by the 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. Interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method.
FOREIGN CURRENCY TRANSLATION
The accounting records of the Funds are maintained in U.S. dollars. Foreign currencies, as well as investment securities and other assets and liabilities denominated in foreign currencies, are translated into U.S. dollars using exchange rates deemed appropriate by the investment adviser. 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, capital gains on investments, certain foreign currency transactions or other corporate events. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the Funds invest. These foreign taxes, if any, are paid by the Funds and are reflected in their Consolidated Statements of Operations as follows: foreign taxes withheld at source are presented as a reduction of income, foreign taxes on securities lending income are presented as a reduction of securities lending income, foreign taxes on capital gains from sales of investments and foreign currency transactions are included in their respective net realized gain (loss) categories, and foreign taxes on other corporate events are reflected in “Other foreign taxes.” Foreign taxes payable as of August 31, 2012, if any, are disclosed in the Funds’ Consolidated Statements of Assets and Liabilities.
Each Fund conducts its investment activities in India through its Subsidiary and expects to obtain benefits under the Double Tax Avoidance Agreement (“DTAA”). In order to be eligible to claim benefits under the DTAA, each Subsidiary must satisfy certain conditions, including the establishment and maintenance of valid tax residence in Mauritius. Each Subsidiary is subject to tax in Mauritius on its net income at the rate of 15%. However, a system of tax credits effectively reduces the Mauritius income tax rate to a maximum of 3%. These income taxes, if any, are paid by the Funds and are disclosed in the Consolidated Statements of Operations. Further, each Subsidiary is not subject to tax in Mauritius on any gains from the sale of securities. Any dividends paid by a Subsidiary to its Fund will also be exempt from tax in Mauritius. The foregoing is based upon current interpretation and practice and is subject to future changes in the tax laws of India or Mauritius and in the DTAA.
As a result of recent legislative changes enacted by the 2012 India Finance Act (“the Act”) and its general anti-avoidance rules (“GAAR”), which are effective April 1, 2013, the Subsidiaries’ ability to leverage the treaty between Mauritius and India may be adversely impacted, and therefore the Funds may be subject to taxes on capital gains and/or dividends realized on Indian securities. The Act also includes provisions that impose Indian tax on the transfer of shares of an Indian company. However, until more definitive guidance on the legislative changes is available, the impact to the Funds, if any, cannot be determined at this time.
96 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Consolidated Financial Statements (Continued)
iSHARES®, INC.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends and distributions paid by each Fund are recorded on the ex-dividend dates. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds.
FEDERAL INCOME TAXES
Each Fund is treated as an entity separate from the Company’s other funds 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 is required.
2. | INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES |
Pursuant to an Investment Advisory Agreement with the Company, BlackRock Fund Advisors (“BFA”) manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock, Inc. (“BlackRock”). Under the Investment Advisory Agreement, BFA is responsible for substantially all expenses of the Funds, except interest, taxes, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution fees, litigation expenses and any extraordinary expenses.
Each Subsidiary has entered into a separate contract with BFA under which BFA provides investment advisory services to the Subsidiary but does not receive separate compensation from the Subsidiary for providing it with such services. Each Subsidiary has also entered into separate arrangements that provide for the provision of other services to the Subsidiary (including administrative, custody, transfer agency and other services), and BFA pays the costs and expenses related to the provision of those services.
For its investment advisory services to each of the iShares MSCI BRIC, iShares MSCI Emerging Markets Consumer Discretionary Sector, iShares MSCI Emerging Markets Energy Sector Capped, iShares MSCI Emerging Markets Minimum Volatility and iShares MSCI Emerging Markets Small Cap 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 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, up to and including $42 billion | |
0.56 | Over $42 billion, up to and including $56 billion | |
0.50 | Over $56 billion, up to and including $70 billion | |
0.45 | Over $70 billion, up to and including $84 billion | |
0.40 | Over $84 billion |
BFA has contractually agreed to waive a portion of its investment advisory fees for the iShares MSCI Emerging Markets Minimum Volatility Index Fund through December 31, 2014 in order to limit total annual operating expenses to 0.25% of average daily net assets.
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For its investment advisory services to each Fund, BFA is entitled to an annual investment advisory fee based on the average daily net assets of each Fund as follows:
iShares MSCI Index Fund | Investment Advisory Fee | |||
Emerging Markets Asia | 0.68 | % | ||
Emerging Markets Growth | 0.68 | |||
Emerging Markets Value | 0.68 |
BFA has contractually agreed to waive a portion of its investment advisory fees for the iShares MSCI Emerging Markets Asia, iShares Emerging Markets Growth and iShares Emerging Markets Value Index Funds through December 31, 2014 in order to limit total annual operating expenses to 0.49% of average daily net assets.
The U.S. Securities and Exchange Commission has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (“BTC”) to serve as securities lending agent for the Funds, subject to applicable conditions. BTC is an affiliate of BFA. Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, and any fees or other payments to and from borrowers of securities. Each Fund retains 65% of securities lending income and pays a fee to BTC equal to 35% of such income. As securities lending agent, BTC is responsible for all transaction fees and all other operational costs relating to securities lending activities, other than extraordinary expenses. BTC is also responsible for fees and expenses incurred by each Fund as a result of the investment of cash collateral received for securities on loan in a money market fund managed by BFA or an affiliate.
For the period ended August 31, 2012, BTC earned securities lending agent fees from the Funds as follows:
iShares MSCI Index Fund | Securities Lending Agent Fees | |||
BRIC | $ | 378,454 | ||
Emerging Markets Consumer Discretionary Sector | 510 | |||
Emerging Markets Energy Sector Capped | 1 | |||
Emerging Markets Growth | 602 | |||
Emerging Markets Minimum Volatility | 6,639 |
At a special meeting of the Board held on January 5, 2012, the directors approved a new distribution agreement with BlackRock Investments, LLC (“BRIL”). BRIL is an affiliate of BFA. Effective April 1, 2012, BRIL replaced SEI Investments Distribution Co. as the distributor for each Fund. Pursuant to the new distribution agreement, BFA is responsible for any fees or expenses for distribution services provided to the Funds.
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 — affiliated” in the Consolidated Statements of Operations.
The PNC Financial Services Group, Inc. is the largest stockholder of BlackRock and is considered to be an affiliate of the Funds for 1940 Act purposes.
Certain directors and officers of the Company are also officers of BTC and/or BFA.
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iSHARES®, INC.
3. | INVESTMENT PORTFOLIO TRANSACTIONS |
Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the period ended August 31, 2012 were as follows:
iShares MSCI Index Fund | Purchases | Sales | ||||||
BRIC | $ | 307,127,204 | $ | 246,688,173 | ||||
Emerging Markets Asia | 13,703,462 | 519,643 | ||||||
Emerging Markets Consumer Discretionary Sector | 6,391,360 | 4,331,864 | ||||||
Emerging Markets Energy Sector Capped | 3,799,118 | 2,135,986 | ||||||
Emerging Markets Growth | 6,970,290 | 1,257,169 | ||||||
Emerging Markets Minimum Volatility | 256,608,538 | 37,428,933 | ||||||
Emerging Markets Small Cap | 11,366,668 | 40,610,387 | ||||||
Emerging Markets Value | 6,709,812 | 1,115,470 |
In-kind transactions (see Note 4) for the period ended August 31, 2012 were as follows:
iShares MSCI Index Fund | In-kind Purchases | In-kind Sales | ||||||
BRIC | $ | 89,219,400 | $ | 177,560,937 | ||||
Emerging Markets Asia | 8,619,735 | — | ||||||
Emerging Markets Consumer Discretionary Sector | 4,283,154 | 2,882,087 | ||||||
Emerging Markets Energy Sector Capped | 6,671,622 | 4,102,533 | ||||||
Emerging Markets Growth | 5,151,783 | — | ||||||
Emerging Markets Minimum Volatility | 174,696,121 | 13,442,008 | ||||||
Emerging Markets Small Cap | 3,844,423 | 25,147,268 | ||||||
Emerging Markets Value | 4,915,911 | — |
4. | CAPITAL SHARE TRANSACTIONS |
Capital shares are issued and redeemed by each Fund only in aggregations of a specified number of shares or multiples thereof (“Creation Units”) at net asset value. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the Consolidated Statements of Changes in Net Assets.
The consideration for the purchase of Creation Units of a fund in the Company generally consists of the in-kind deposit of a designated portfolio of securities, which constitutes an optimized representation of the securities of that fund’s underlying index, and a specified amount of cash. Certain funds in the Company may be offered in Creation Units solely or partially for cash in U.S. dollars. Investors purchasing and redeeming Creation Units may pay a purchase transaction fee and a redemption transaction fee directly to State Street Bank and Trust Company, the Company’s administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash. Investors transacting in Creation Units for cash pay an additional variable charge to compensate the relevant fund for certain transaction costs (i.e., stamp taxes, taxes on currency or other financial transactions, and brokerage costs) and market impact expenses relating to investing in portfolio securities.
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iSHARES®, INC.
5. | LOANS OF PORTFOLIO SECURITIES |
Each Fund may lend its investment securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. government. The initial collateral received by each Fund is required to have a value of at least 102% of the 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. Each Fund could suffer a loss if the value of an investment purchased with cash collateral falls below the value of the cash collateral received.
As of August 31, 2012, any securities on loan 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, 2012 and the value of the related collateral are disclosed in the Consolidated Statements of Assets and Liabilities. Securities lending income, as disclosed in the Consolidated Statements of Operations, represents the income earned from the investment of the cash collateral, net of fees and other payments to and from borrowers, and less the fees paid to BTC as securities lending agent.
6. | INCOME TAX INFORMATION |
U.S. GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset values per share. The following permanent differences as of August 31, 2012, attributable to passive foreign investment companies, distributions paid in excess of taxable income, foreign currency transactions and realized gains (losses) from in-kind redemptions, were reclassified to the following accounts:
iShares MSCI Index Fund | Paid-in Capital | Undistributed Net Investment Income/Distributions in Excess of Net Investment Income | Undistributed Net Realized Gain/Accumulated Net Realized Loss | |||||||||
BRIC | $ | 21,253,839 | $ | (464,864 | ) | $ | (20,788,975 | ) | ||||
Emerging Markets Asia | — | (4,395 | ) | 4,395 | ||||||||
Emerging Markets Consumer Discretionary Sector | (180,550 | ) | (2,515 | ) | 183,065 | |||||||
Emerging Markets Energy Sector Capped | (870,580 | ) | (8,266 | ) | 878,846 | |||||||
Emerging Markets Growth | — | (5,596 | ) | 5,596 | ||||||||
Emerging Markets Minimum Volatility | 1,153,620 | (302,989 | ) | (850,631 | ) | |||||||
Emerging Markets Small Cap | (2,511,615 | ) | 269,798 | 2,241,817 | ||||||||
Emerging Markets Value | — | (6,976 | ) | 6,976 |
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iSHARES®, INC.
The tax character of distributions paid during the periods ended August 31, 2012 and August 31, 2011 was as follows:
iShares MSCI Index Fund | 2012 | 2011 | ||||||
BRIC | ||||||||
Ordinary income | $ | 18,504,865 | $ | 22,858,814 | ||||
|
|
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Emerging Markets Asia | ||||||||
Ordinary income | $ | 162,964 | $ | — | ||||
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| |||||
Emerging Markets Consumer Discretionary Sector | ||||||||
Ordinary income | $ | 26,130 | $ | — | ||||
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Emerging Markets Energy Sector Capped | ||||||||
Ordinary income | $ | 168,198 | — | |||||
Return of capital | 6,779 | — | ||||||
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| |||||
$ | 174,977 | $ | — | |||||
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| |||||
Emerging Markets Growth | ||||||||
Ordinary income | $ | 85,048 | $ | — | ||||
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Emerging Markets Minimum Volatility | ||||||||
Ordinary income | $ | 2,260,368 | $ | — | ||||
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| |||||
Emerging Markets Small Cap | ||||||||
Ordinary income | $ | 500,104 | $ | — | ||||
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Emerging Markets Value | ||||||||
Ordinary income | $ | 148,491 | $ | — | ||||
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| |||||
As of August 31, 2012, the tax components of accumulated net earnings (losses) were as follows:
iShares MSCI Index Fund | Undistributed Ordinary | Capital Carryforwards | Net Unrealized Gains (Losses) a | Qualified Late-Year Losses b | Total | |||||||||||||||
BRIC | $ | — | $ | (83,793,558 | ) | $ | (90,525,811 | ) | $ | (41,461,029 | ) | $ | (215,780,398 | ) | ||||||
Emerging Markets Asia | 123,992 | (97,800 | ) | (1,702,819 | ) | — | (1,676,627 | ) | ||||||||||||
Emerging Markets Consumer Discretionary Sector | 15,100 | (769,548 | ) | (93,629 | ) | — | (848,077 | ) | ||||||||||||
Emerging Markets Energy Sector Capped | — | (911,455 | ) | (502,412 | ) | — | (1,413,867 | ) | ||||||||||||
Emerging Markets Growth | 42,036 | (302,438 | ) | (472,965 | ) | — | (733,367 | ) | ||||||||||||
Emerging Markets Minimum Volatility | 1,897,442 | (1,248,753 | ) | 4,499,062 | — | 5,147,751 | ||||||||||||||
Emerging Markets Small Cap | 278,346 | (62,813 | ) | (890,376 | ) | (8,422,428 | ) | (9,097,271 | ) | |||||||||||
Emerging Markets Value | 49,010 | (188,505 | ) | (1,320,767 | ) | — | (1,460,262 | ) |
a | The difference between book-basis and tax-basis unrealized gains (losses) was attributable primarily to the tax deferral of losses on wash sales and the realization for tax purposes of unrealized gains on investments in passive foreign investment companies. |
b | The Funds have elected to defer certain qualified late-year losses and recognize such losses in the year ending August 31, 2013. |
NOTESTO CONSOLIDATED FINANCIAL STATEMENTS | 101 |
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Notes to Consolidated Financial Statements (Continued)
iSHARES®, INC.
As of August 31, 2012, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:
iShares MSCI Index Fund | Non- Expiring a | Expiring 2017 | Expiring 2018 | Expiring 2019 | Total | |||||||||||||||
BRIC | $ | 63,224,174 | $ | 1,540,740 | $ | 11,268,086 | $ | 7,760,558 | $ | 83,793,558 | ||||||||||
Emerging Markets Asia | 97,800 | — | — | — | 97,800 | |||||||||||||||
Emerging Markets Consumer Discretionary Sector | 769,548 | — | — | — | 769,548 | |||||||||||||||
Emerging Markets Energy Sector Capped | 911,455 | — | — | — | 911,455 | |||||||||||||||
Emerging Markets Growth | 302,438 | — | — | — | 302,438 | |||||||||||||||
Emerging Markets Minimum Volatility | 1,248,753 | — | — | — | 1,248,753 | |||||||||||||||
Emerging Markets Small Cap | 62,813 | — | — | — | 62,813 | |||||||||||||||
Emerging Markets Value | 188,505 | — | — | — | 188,505 |
a | Must be utilized prior to losses subject to expiration. |
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.
As of August 31, 2012, 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) | ||||||||||||
BRIC | $ | 808,907,005 | $ | 55,368,235 | $ | (145,851,730 | ) | $ | (90,483,495 | ) | ||||||
Emerging Markets Asia | 21,720,054 | 522,389 | (2,225,193 | ) | (1,702,804 | ) | ||||||||||
Emerging Markets Consumer Discretionary Sector | 2,531,573 | 144,701 | (238,329 | ) | (93,628 | ) | ||||||||||
Emerging Markets Energy Sector Capped | 2,508,999 | 10,583 | (512,996 | ) | (502,413 | ) | ||||||||||
Emerging Markets Growth | 10,786,677 | 534,481 | (1,007,291 | ) | (472,810 | ) | ||||||||||
Emerging Markets Minimum Volatility | 382,087,066 | 15,911,137 | (11,409,272 | ) | 4,501,865 | |||||||||||
Emerging Markets Small Cap | 9,531,867 | 599,932 | (1,490,082 | ) | (890,150 | ) | ||||||||||
Emerging Markets Value | 10,356,390 | 251,522 | (1,572,225 | ) | (1,320,703 | ) |
Management has reviewed the tax positions as of August 31, 2012, inclusive of the open tax return years, and has determined that no provision for income tax is required in the Funds’ consolidated financial statements.
7. | LINE OF CREDIT |
The Funds, along with certain other iShares funds, are a party to a $125 million credit agreement with State Street Bank and Trust Company, which expires October 31, 2012. The credit agreement was established to facilitate the funding of purchases of securities in India. The credit agreement has the following terms: a commitment fee of 0.08% per annum on the unused portion of the credit agreement and interest at a rate equal to the higher of (a) the one-month LIBOR plus 1.00% per annum or (b) the U.S. Federal Funds rate plus
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Notes to Consolidated Financial Statements (Continued)
iSHARES®, INC.
1.00% per annum on amounts borrowed. The commitment fee is allocated to each fund participating in the credit agreement based on each fund’s pro-rata share of the aggregate average daily value of assets invested in local Indian securities.
For the period ended August 31, 2012, the maximum amounts borrowed, the average borrowings and the average interest rates under the credit agreement were as follows:
iShares MSCI Index Fund | Maximum Amount Borrowed | Average Borrowings | Average Interest Rates | |||||||||
BRIC | $ | 2,400,000 | $ | 79,558 | 1.26 | % | ||||||
Emerging Markets Energy Sector Capped | 22,470 | 456 | 1.24 | |||||||||
Emerging Markets Growth | 83,460 | 1,601 | 1.24 | |||||||||
Emerging Markets Minimum Volatility | 400,000 | 8,952 | 1.27 | |||||||||
Emerging Markets Small Cap | 1,500,000 | 32,877 | 1.27 | |||||||||
Emerging Markets Value | 80,250 | 1,539 | 1.24 |
8. | SUBSEQUENT EVENTS |
Management has evaluated the impact of all subsequent events on the Funds through the date the consolidated financial statements were available to be issued and has determined that there were no subsequent events requiring adjustment or disclosure in the consolidated financial statement
NOTESTO CONSOLIDATED FINANCIAL STATEMENTS | 103 |
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 consolidated statements of assets and liabilities, including the consolidated schedules of investments, and the related consolidated statements of operations and of changes in net assets and the consolidated financial highlights present fairly, in all material respects, the financial position of the iShares MSCI BRIC Index Fund, iShares MSCI Emerging Markets Asia Index Fund, iShares MSCI Emerging Markets Consumer Discretionary Sector Index Fund, iShares MSCI Emerging Markets Energy Sector Capped Index Fund, iShares MSCI Emerging Markets Growth Index Fund, iShares MSCI Emerging Markets Minimum Volatility Index Fund, iShares MSCI Emerging Markets Small Cap Index Fund, iShares MSCI Emerging Markets Value Index Fund and their subsidiaries (the “Funds”), at August 31, 2012, 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 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, 2012 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
October 23, 2012
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iSHARES®, INC.
For the fiscal period ended August 31, 2012, 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 follow:
iShares MSCI Index Fund | Foreign Source Income Earned | Foreign Taxes Paid | ||||||
BRIC | $ | 27,181,189 | $ | 2,451,142 | ||||
Emerging Markets Asia | 387,099 | 51,542 | ||||||
Emerging Markets Consumer Discretionary Sector | 82,002 | 6,784 | ||||||
Emerging Markets Energy Sector Capped | 231,286 | 23,409 | ||||||
Emerging Markets Growth | 177,740 | 17,466 | ||||||
Emerging Markets Minimum Volatility | 5,234,180 | 653,827 | ||||||
Emerging Markets Small Cap | 724,290 | 65,394 | ||||||
Emerging Markets Value | 255,697 | 27,249 |
For corporate shareholders, the following percentages of the income dividends paid by certain Funds during the fiscal period ended August 31, 2012 qualified for the dividends-received deduction:
iShares MSCI Index Fund | Dividends- Received Deduction | |||
Emerging Markets Growth | 0.90 | % | ||
Emerging Markets Value | 0.19 |
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 period ended August 31, 2012:
iShares MSCI Index Fund | Qualified Dividend Income | |||
BRIC | $ | 15,491,384 | ||
Emerging Markets Asia | 207,904 | |||
Emerging Markets Consumer Discretionary Sector | 32,914 | |||
Emerging Markets Energy Sector Capped | 191,607 |
iShares MSCI Index Fund | Qualified Dividend Income | |||
Emerging Markets Growth | $ | 94,715 | ||
Emerging Markets Minimum Volatility | 2,085,048 | |||
Emerging Markets Small Cap | 284,657 | |||
Emerging Markets Value | 155,906 |
In February 2013, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2012. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.
TAX INFORMATION | 105 |
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Board Review and Approval of Investment Advisory
Contract (Unaudited)
iSHARES®, INC.
iShares MSCI BRIC, iShares MSCI Emerging Markets Minimum Volatility, and iShares MSCI Emerging Markets Small Cap Index Funds
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 annually to consider the Investment Advisory Contract between the Company and BFA (the “Advisory Contract”) on behalf of the Funds. The Independent Directors requested, and BFA provided, such information as the Independent Directors, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of Independent Directors (the “15(c) Committee”), with independent counsel, met with management on April 19, 2012, April 27, 2012, and May 16, 2012, to discuss the types of information the Independent Directors required and the manner in which management would organize and present such information. At a meeting held on May 17, 2012, management presented information to the Board relating to the continuance of the Advisory Contract, and the Board, including the Independent Directors, reviewed and discussed such information at length. The Independent Directors requested from management certain additional information, and the 15(c) Committee met with management on June 8, 2012, to discuss the additional requests. At a meeting held on June 20-21, 2012, the Board, including the Independent Directors, reviewed additional information provided by management in response to these requests. The Board, including a majority of the Independent Directors, approved the continuance of the Advisory Contract for the Funds, based on a review of qualitative and quantitative information provided by BFA, including a review of supplemental information management provided at the request of the Independent Directors. The Board noted its satisfaction with the extent and quality of information, and detailed responses, provided by BFA. The Independent Directors were advised by their independent counsel throughout the process. In approving the Advisory Contract for the Funds, the Board, including the Independent Directors, considered the following factors, no one of which was controlling, and made the following conclusions:
Expenses and Performance of the Funds — The Board reviewed statistical information prepared by Lipper Inc. (“Lipper”), an independent provider of investment company data, regarding the expense ratio components, including actual advisory fees, waivers/reimbursements, and gross and net total expenses of each Fund in comparison with the same information for other registered investment companies objectively selected by Lipper as comprising such 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, sponsor, inception date, or other differentiating factors, but that 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 those tracked by the Funds, the Lipper Group 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), as applicable. 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 also received a detailed explanation from BFA regarding its rationale for including funds that had been excluded from Lipper’s consideration due to Lipper’s methodology parameters, as well as information showing the effect of including these additional funds in the analysis. The Board further noted that due to the limitations in providing comparable funds in the various Lipper Groups, the statistical information may or may not provide meaningful direct comparisons to the Funds.
The Board also noted that the investment advisory fees and overall expenses for the Funds compared favorably to the investment advisory fee rates and overall expenses of the funds in their respective Lipper Group.
In addition, the Board reviewed statistical information prepared by Lipper regarding the performance of each Fund for the one-, three-, five-, ten-year, and since inception periods, as applicable, and the “last quarter” period ended December 31, 2011, and a comparison of each Fund’s performance to its performance benchmark index for the same periods. To the extent that any of the comparison funds included in the Lipper Group track the same index as any particular Fund, Lipper also provided, and the Board reviewed, a comparison of such Fund’s
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Board Review and Approval of Investment Advisory
Contract (Unaudited) (Continued)
iSHARES®, INC.
performance to that of such relevant comparison funds for the same periods. The Board noted that the Funds generally performed in line with their respective performance benchmark indexes over the relevant periods. In considering this information, the Board noted that the Lipper Group includes funds that may have different investment objectives and/or benchmarks from the Funds. In addition, the Board noted that each Fund seeks to track its benchmark index and that, during the prior year, the Board received periodic reports on the Funds’ performance in comparison with their relevant benchmark indexes. Such periodic comparative performance information was also considered by the Board.
Based on this review, the other factors considered at the meeting, and their general knowledge of mutual fund pricing, the Board concluded that the investment advisory fees and expense levels and the historical performance of each Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA over prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the Funds and their shareholders. The Board noted that BFA became an indirect wholly-owned subsidiary of BlackRock, Inc. (“BlackRock”) in December 2009. The Board acknowledged that additional resources to support the Funds and their shareholders have been added or enhanced since then, including in such areas as investor education, product management, customized portfolio consulting support, and capital markets support. The Board also considered BFA’s compliance program and its compliance record with respect to the Funds. In that regard, 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 on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Funds. In addition to the above considerations, the Board reviewed and considered BFA’s investment and risk management processes and strategies, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that each Fund had met its investment objective consistently since its respective inception date.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Funds under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Costs of Services Provided to Funds and Profits Realized by BFA and Affiliates — The Board reviewed information about the profitability to BFA of the Funds based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and all other sources of revenue and expense to BFA and its affiliates from the Funds’ operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, noting that the 15(c) Committee had focused on the methodology and proposed presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC from securities lending by the Funds. The Board also discussed BFA’s profit margin as reflected in the Funds’ profitability analysis and reviewed information regarding economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Funds and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.
Economies of Scale — The Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Funds’ assets, noting that the issue of economies of scale had been focused on extensively by the 15(c) Committee during its meetings
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 107 |
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Board Review and Approval of Investment Advisory
Contract (Unaudited) (Continued)
iSHARES®, INC.
and addressed by management. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through breakpoints, waivers, or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BFA’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished between fixed and variable costs, and explained how the nature of such costs may impact the existence of scale benefits. The Board noted that the Advisory Contract for the Funds already provided for breakpoints in the Funds’ investment advisory fee rates as the assets of the Funds, on an aggregated basis with the assets of certain other iShares funds, increase. The Board noted that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding new or revised breakpoints in the future. Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider this issue at least annually, concluded that the structure of the investment advisory fees reflects appropriate sharing of potential economies of scale with the Funds’ shareholders and supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end and closed-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds and institutional separate accounts (together, the “Other Accounts”). The Board noted that BFA and its affiliates do not manage Other Accounts with substantially similar investment objectives and strategies as the Funds, except for iShares MSCI Emerging Markets Small Cap Index Fund. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Funds, including in terms of the different generally more extensive services provided, as well as other significant differences in the approach of BFA and its affiliates to the Funds, on one hand, and Other Accounts, on the other. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks of managing and providing other services to the Funds, as publicly traded exchange traded funds, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also considered the “all-inclusive” nature of the Funds’ advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rates under the Advisory Contract for the Funds were generally higher than the investment advisory/management fee rates for the Other Accounts that are institutional clients of BFA (or its affiliates) and concluded that the differences appeared to be consistent with the factors discussed.
Other Benefits to BFA and/or its Affiliates — The Board reviewed ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Funds by BFA, such as payment of revenue to BTC, the Funds’ securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Funds in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board noted that BFA generally does 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 Funds. The Board further noted that any portfolio transactions on behalf of the Funds 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. The Board concluded that any such ancillary benefits would not be disadvantageous to the Funds’ shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.
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Board Review and Approval of Investment Advisory
Contract (Unaudited) (Continued)
iSHARES®, INC.
Based on the considerations described above, the Board determined that the investment advisory fee rates under the Advisory Contract do not constitute fees that are so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that it is in the best interest of the Funds and their shareholders to approve the continuance of the Advisory Contract for the coming year.
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 109 |
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 Minimum Volatility | $ | 1.21232 | $ | — | $ | 0.11167 | $ | 1.32399 | 92 | % | — | % | 8 | % | 100 | % | ||||||||||||||||
Emerging Markets Small Cap | 1.14227 | — | — | 1.14227 | 100 | — | — | 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 are 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.
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Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
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 BRIC Index Fund
Period Covered: January 1, 2008 through June 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 5.5% | 3 | 0.26 | % | |||||
Greater than 5.0% and Less than 5.5% | 1 | 0.09 | ||||||
Greater than 4.5% and Less than 5.0% | 3 | 0.26 | ||||||
Greater than 4.0% and Less than 4.5% | 2 | 0.18 | ||||||
Greater than 3.5% and Less than 4.0% | 2 | 0.18 | ||||||
Greater than 3.0% and Less than 3.5% | 5 | 0.44 | ||||||
Greater than 2.5% and Less than 3.0% | 11 | 0.97 | ||||||
Greater than 2.0% and Less than 2.5% | 26 | 2.29 | ||||||
Greater than 1.5% and Less than 2.0% | 54 | 4.77 | ||||||
Greater than 1.0% and Less than 1.5% | 164 | 14.47 | ||||||
Greater than 0.5% and Less than 1.0% | 206 | 18.18 | ||||||
Between 0.5% and –0.5% | 420 | 37.07 | ||||||
Less than –0.5% and Greater than –1.0% | 136 | 12.00 | ||||||
Less than –1.0% and Greater than –1.5% | 48 | 4.24 | ||||||
Less than –1.5% and Greater than –2.0% | 23 | 2.03 | ||||||
Less than –2.0% and Greater than –2.5% | 13 | 1.15 | ||||||
Less than –2.5% and Greater than –3.0% | 5 | 0.44 | ||||||
Less than –3.0% and Greater than –3.5% | 1 | 0.09 | ||||||
Less than –3.5% and Greater than –4.0% | 2 | 0.18 | ||||||
Less than –4.0% and Greater than –4.5% | 2 | 0.18 | ||||||
Less than –4.5% and Greater than –5.0% | 2 | 0.18 | ||||||
Less than –5.0% and Greater than –5.5% | 1 | 0.09 | ||||||
Less than –5.5% | 3 | 0.26 | ||||||
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| |||||
1,133 | 100.00 | % | ||||||
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|
SUPPLEMENTAL INFORMATION | 111 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Emerging Markets Asia Index Fund
Period Covered: April 1, 2012 through June 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 2.0% | 1 | 1.59 | % | |||||
Greater than 1.5% and Less than 2.0% | 9 | 14.29 | ||||||
Greater than 1.0% and Less than 1.5% | 8 | 12.70 | ||||||
Greater than 0.5% and Less than 1.0% | 5 | 7.94 | ||||||
Between 0.5% and –0.5% | 26 | 41.26 | ||||||
Less than –0.5% and Greater than –1.0% | 6 | 9.52 | ||||||
Less than –1.0% and Greater than –1.5% | 5 | 7.94 | ||||||
Less than –1.5% and Greater than –2.0% | 3 | 4.76 | ||||||
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| |||||
63 | 100.00 | % | ||||||
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|
|
iShares MSCI Emerging Markets Consumer Discretionary Index Sector Fund
Period Covered: April 1, 2012 through June 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 2.0% and Less than 2.5% | 1 | 1.59 | % | |||||
Greater than 1.5% and Less than 2.0% | 1 | 1.59 | ||||||
Greater than 1.0% and Less than 1.5% | 5 | 7.94 | ||||||
Greater than 0.5% and Less than 1.0% | 13 | 20.64 | ||||||
Between 0.5% and –0.5% | 30 | 47.61 | ||||||
Less than –0.5% and Greater than –1.0% | 6 | 9.52 | ||||||
Less than –1.0% and Greater than –1.5% | 6 | 9.52 | ||||||
Less than –1.5% | 1 | 1.59 | ||||||
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63 | 100.00 | % | ||||||
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iShares MSCI Emerging Markets Energy Sector Capped Index Fund
Period Covered: April 1, 2012 through June 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 1.5% and Less than 2.0% | 3 | 4.76 | % | |||||
Greater than 1.0% and Less than 1.5% | 10 | 15.87 | ||||||
Greater than 0.5% and Less than 1.0% | 15 | 23.82 | ||||||
Between 0.5% and –0.5% | 29 | 46.03 | ||||||
Less than –0.5% and Greater than –1.0% | 3 | 4.76 | ||||||
Less than –1.0% and Greater than –1.5% | 3 | 4.76 | ||||||
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| |||||
63 | 100.00 | % | ||||||
|
|
|
|
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Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Emerging Markets Growth Index Fund
Period Covered: April 1, 2012 through June 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 1.5% and Less than 2.0% | 2 | 3.17 | % | |||||
Greater than 1.0% and Less than 1.5% | 2 | 3.17 | ||||||
Greater than 0.5% and Less than 1.0% | 13 | 20.64 | ||||||
Between 0.5% and –0.5% | 33 | 52.39 | ||||||
Less than –0.5% and Greater than –1.0% | 9 | 14.29 | ||||||
Less than –1.0% and Greater than –1.5% | 2 | 3.17 | ||||||
Less than –1.5% and Greater than –2.0% | 2 | 3.17 | ||||||
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63 | 100.00 | % | ||||||
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iShares MSCI Emerging Markets Minimum Volatility Index Fund
Period Covered: January 1, 2012 through June 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 2.0% | 1 | 0.80 | % | |||||
Greater than 1.5% and Less than 2.0% | 9 | 7.20 | ||||||
Greater than 1.0% and Less than 1.5% | 19 | 15.20 | ||||||
Greater than 0.5% and Less than 1.0% | 39 | 31.20 | ||||||
Between 0.5% and –0.5% | 43 | 34.40 | ||||||
Less than –0.5% and Greater than –1.0% | 9 | 7.20 | ||||||
Less than –1.0% and Greater than –1.5% | 4 | 3.20 | ||||||
Less than –1.5% and Greater than –2.0% | 1 | 0.80 | ||||||
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| |||||
125 | 100.00 | % | ||||||
|
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|
|
SUPPLEMENTAL INFORMATION | 113 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Emerging Markets Small Cap Index Fund
Period Covered: October 1, 2011 through June 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 3.5% | 3 | 1.59 | % | |||||
Greater than 3.0% and Less than 3.5% | 2 | 1.06 | ||||||
Greater than 2.5% and Less than 3.0% | 3 | 1.59 | ||||||
Greater than 2.0% and Less than 2.5% | 6 | 3.19 | ||||||
Greater than 1.5% and Less than 2.0% | 19 | 10.11 | ||||||
Greater than 1.0% and Less than 1.5% | 25 | 13.30 | ||||||
Greater than 0.5% and Less than 1.0% | 30 | 15.96 | ||||||
Between 0.5% and –0.5% | 55 | 29.26 | ||||||
Less than –0.5% and Greater than –1.0% | 24 | 12.77 | ||||||
Less than –1.0% and Greater than –1.5% | 12 | 6.38 | ||||||
Less than –1.5% and Greater than –2.0% | 4 | 2.13 | ||||||
Less than –2.0% and Greater than –2.5% | 5 | 2.66 | ||||||
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| |||||
188 | 100.00 | % | ||||||
|
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|
|
iShares MSCI Emerging Markets Value Index Fund
Period Covered: April 1, 2012 through June 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 2.0% | 1 | 1.59 | % | |||||
Greater than 1.5% and Less than 2.0% | 4 | 6.35 | ||||||
Greater than 1.0% and Less than 1.5% | 12 | 19.05 | ||||||
Greater than 0.5% and Less than 1.0% | 10 | 15.87 | ||||||
Between 0.5% and –0.5% | 29 | 46.03 | ||||||
Less than –0.5% and Greater than –1.0% | 6 | 9.52 | ||||||
Less than –1.0% and Greater than –1.5% | 1 | 1.59 | ||||||
|
|
|
| |||||
63 | 100.00 | % | ||||||
|
|
|
|
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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 he or she resigns, is removed, dies, retires or becomes incapacitated. The President, Treasurer and Secretary shall each hold office until their successors are chosen and qualified, and all other officers shall hold office until he or she resigns or is removed. Directors who are not interested persons (as defined in the 1940 Act) are referred to as Independent Directors.
The registered investment companies advised by BFA or its affiliates are organized into one complex of closed-end funds, two complexes of open-end funds and one complex of exchange-traded funds (“Exchange-Traded Fund Complex”) (each, a “BlackRock Fund Complex”). Each Fund is included in the BlackRock Fund Complex referred to as the Exchange-Traded Fund Complex. Each Director of iShares, Inc. also serves as a Trustee of iShares Trust, a Director of iShares MSCI Russia Capped Index Fund, Inc. and a Trustee of iShares U.S. ETF Trust and, as a result, oversees a total of 276 funds within the Exchange-Traded 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 Robert H. Silver 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-iShares (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 (55) | 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); President of Board of Directors, Hope & Heroes Children’s Cancer Fund (since 2002); President of the Board of Directors, Periwinkle Theatre for Youth (since 1983). | Director of BlackRock, Inc. (since 2007); Trustee of iShares Trust (since 2009); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). | |||
Michael Lathamb (47) | Director (since 2010); President (since 2007). | Chairman of iShares, BlackRock (since 2011); Global Chief Executive Officer of iShares, BlackRock (2010-2011); Managing Director, BlackRock (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, BGI (2003-2007). | Trustee of iShares Trust (since 2010); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). |
a | Robert S. Kapito is deemed to be an “interested person” (as defined in the 1940 Act) of the Trust 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 Trust due to his affiliations with BlackRock, Inc. and its affiliates. |
DIRECTORAND OFFICER INFORMATION | 115 |
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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 | |||
Robert H. Silver (57) | Director (since 2007); Independent Chairman (since 2012). | President and Co-Founder of The Bravitas Group, Inc. (since 2006); Director and Vice Chairman of the YMCA of Greater NYC (2001-2011); Broadway Producer (2006-2011); 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); President and Chief Operating Officer of UBS Financial Services Inc. (formerly Pain Webber Inc.) (2004-2005) and various executive positions with UBS and its affiliates (1988-2005); CPA and Audit Manager of KPMG, LLP (formerly Peat Marwick Mitchell) (1977-1983). | Trustee of iShares Trust (since 2007); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Independent Chairman of iShares, Inc., iShares MSCI Russia Capped Index Fund, Inc. and iShares U.S. ETF Trust (since 2012). | |||
Cecilia H. Herbert (63) | Director (since 2005); Nominating and Governance Committee Chair and Equity Plus Committee Chair (since 2012). | Director (since 1998) and President (2007-2011) of the Board of Directors, Catholic Charities CYO; Trustee (since 2002) and Chair of the Finance Committee (2006-2009) and Investment Committee (since 2006), The Thacher School; Trustee of Pacific Select Funds (2004-2005); Member (since 1994) and Chair (1994-2005) of the Investment Committee, Archdiocese of San Francisco. | Trustee of iShares Trust (since 2005); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of Forward Funds (35 portfolios) (since 2009). | |||
Charles A. Hurty (69) | Director (since 2005); Audit Committee Chair (since 2006). | Retired; Partner, KPMG LLP (1968-2001). | Trustee of iShares Trust (since 2005); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of GMAM Absolute Return Strategy Fund (1 portfolio) (since 2002); Director of SkyBridge Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (1 portfolio) (since 2002). | |||
John E. Kerrigan (57) | Director (since 2005); Fixed Income Plus Committee Chair (since 2012). | Chief Investment Officer, Santa Clara University (since 2002). | Trustee of iShares Trust (since 2005); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). |
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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 | |||
John E. Martinez (51) | Director (since 2003); Securities Lending Committee Chair (since 2012). | Director of FirstREX Agreement Corp. (formerly EquityRock, Inc.) (since 2005). | Trustee of iShares Trust (since 2003); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). | |||
George G.C. Parker (73) | Director (since 2002). | Dean Witter Distinguished Professor of Finance, Emeritus, Stanford University Graduate School of Business (Professor since 1973; Emeritus since 2006). | Trustee of iShares Trust (since 2002); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of Tejon Ranch Company (since 1999); Director of Threshold Pharmaceuticals (since 2004); Director of Colony Financial, Inc. (since 2009); Director of First Republic Bank (since 2010). | |||
Madhav V. Rajan (48) | Director (since 2011); 15(c) Committee Chair (since 2012). | Robert K. Jaedicke Professor of Accounting and Senior Associate Dean for Academic Affairs and Head of MBA Program, Stanford University Graduate School of Business (since 2001); Professor of Law (by courtesy), Stanford Law School (since 2005); Visiting Professor, University of Chicago (Winter 2007-2008). | Trustee of iShares Trust (since 2011); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2011); Trustee of iShares U.S. ETF Trust (since 2011). |
DIRECTORAND OFFICER INFORMATION | 117 |
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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 | ||
Edward B. Baer (44) | Vice President and Chief Legal Officer (since 2012). | Managing Director, BlackRock (since 2006). | ||
Eilleen M. Clavere (60) | Secretary (since 2007). | Director, BlackRock (since 2009); Director of Legal Administration of Intermediary Investor Business, BGI (2006-2009). | ||
Jack Gee (53) | Treasurer and Chief Financial Officer (since 2008). | Managing Director, BlackRock (since 2009); Senior Director of Fund Administration of Intermediary Investor Business, BGI (2009); Director of Fund Administration of Intermediary Investor Business, BGI (2004-2009). | ||
Amy Schioldager (50) | Executive Vice President (since 2007). | Managing Director, BlackRock (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008). | ||
Ira P. Shapiro (49) | Vice President (since 2007). | Managing Director, BlackRock (since 2009); Chief Legal Officer, Exchange-Traded Funds Complex (2007-2012); Associate General Counsel, BGI (2004-2009). | ||
Scott Radell (43) | Executive Vice President (since 2012). | Managing Director, BlackRock (since 2009); Head of Portfolio Solutions, BGI (2007-2009); Credit Portfolio Manager, BGI (2005-2007). |
118 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
For more information visit www.iShares.com
or call 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 BlackRock Investments, LLC (together with its affiliates, “BlackRock”).
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds. BlackRock is not affiliated with the company listed above.
A description of the policies that the 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 daily and monthly basis on the Funds’ website.
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iS-AR-810-0812
Table of Contents
![]() | August 31, 2012 |
2012 Annual Report
iShares, Inc.
iShares MSCI All Country World Minimum Volatility Index Fund | ACWV | NYSE Arca
iShares MSCI Emerging Markets EMEA Index Fund | EEME | NASDAQ
iShares MSCI World Index Fund | URTH | NYSE Arca
Table of Contents
5 | ||||
14 | ||||
15 | ||||
iShares MSCI All Country World Minimum Volatility Index Fund | 15 | |||
20 | ||||
23 | ||||
40 | ||||
44 | ||||
47 | ||||
56 | ||||
57 | ||||
Board Review and Approval of Investment Advisory Contract (Unaudited) | 58 | |||
62 | ||||
64 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI ALL COUNTRY WORLD MINIMUM VOLATILITY INDEX FUND
Performance as of August 31, 2012
Cumulative Total Returns | ||||||||||
Inception to 8/31/12 | ||||||||||
NAV | MARKET | INDEX | ||||||||
12.41% | 13.02% | 12.19% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
“Cumulative Total Returns” represent the total change in value of an investment over the period indicated and are calculated from an inception date of 10/18/11.
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 (10/20/11), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 5 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI ALL COUNTRY WORLD MINIMUM VOLATILITY INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector/Investment Type | Percentage of Net Assets |
Consumer Non-Cyclical | 33.94 | % | ||
Financial | 13.91 | |||
Communications | 12.28 | |||
Consumer Cyclical | 10.96 | |||
Utilities | 8.31 | |||
Energy | 6.76 | |||
Technology | 4.84 | |||
Industrial | 4.45 | |||
Basic Materials | 3.89 | |||
Exchange-Traded Funds | 0.28 | |||
Diversified | 0.07 | |||
Short-Term and Other Net Assets | 0.31 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
Johnson & Johnson | 2.13 | % | ||
Automatic Data Processing Inc. | 1.51 | |||
Amgen Inc. | 1.50 | |||
TransCanada Corp. (Canada) | 1.49 | |||
Abbott Laboratories | 1.44 | |||
Enbridge Inc. (Canada) | 1.41 | |||
Southern Co. (The) | 1.38 | |||
Kinder Morgan Inc. | 1.32 | |||
McDonald’s Corp. | 1.27 | |||
NTT DOCOMO Inc. (Japan) | 1.25 | |||
|
| |||
TOTAL | 14.70 | % | ||
|
| |||
The iShares MSCI All Country World Minimum Volatility Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI All Country World Minimum Volatility Index (the “Index”). The Index is designed to measure the combined performance of equity securities in both emerging and developed markets that have lower absolute volatility. 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 October 18, 2011 (inception date of the Fund) through August 31, 2012 (the “reporting period”), the total return for the Fund was 12.41%, net of fees, while the total return for the Index was 12.19%.
As represented by the Index, lower-volatility stocks worldwide posted double-digit gains for the reporting period. Shortly after the beginning of the reporting period, the Index began a broad rally as signs of improving economic growth, particularly in the U.S. and U.K., boosted investor confidence. The rally in low-volatility stocks lasted through the first quarter of 2012. The Index lost some of its previous gains in April and May 2012 as global economic activity decelerated, putting downward pressure on global equity markets. In particular, the continuing sovereign debt crisis in Europe had a negative impact on financial institutions around the globe and led to a meaningful slowdown in European economic growth, including recessions in the most fiscally challenged countries in the region. However, global stocks bottomed in June 2012 and moved gradually higher over the last three months of the reporting period as investors grew more comfortable with the economic environment and Europe’s efforts to solve its sovereign debt crisis.
Currency fluctuations had a modestly negative impact on Index performance for the reporting period (in local currency terms, the Index returned 12.91% for the reporting period). The U.S. dollar was largely unchanged against the Canadian dollar but appreciated by 2% versus the Japanese yen and 6% against the Swiss franc; excluding the U.S., Japan, Canada, and Switzerland were the largest country weightings in the Index. The stronger U.S. dollar lowered international equity returns for U.S. investors.
On a regional basis, the U.S. equity market (which comprised just over half of the Index as of August 31, 2012) posted the best returns, gaining nearly 17% for the reporting period. The U.S. economy held up better than other regions of the globe during the reporting period, providing a favorable backdrop for U.S. stocks. The European stocks in the Index gained about 8% for the reporting period, while Index stocks in the Asia/Pacific region advanced by roughly 12%.
6 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI ALL COUNTRY WORLD MINIMUM VOLATILITY INDEX FUND
One additional factor favoring the Index was its relatively high dividend yield, which was approximately 4% as of the end of the reporting period. Dividend payouts helped boost the performance of the Index.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 7 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI EMERGING MARKETS EMEA INDEX FUND
Performance as of August 31, 2012
Cumulative Total Returns | ||||||||||
Inception to 8/31/12 | ||||||||||
NAV | MARKET | INDEX | ||||||||
2.91% | 3.38% | 3.36% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
“Cumulative Total Returns” represent the total change in value of an investment over the period indicated and are calculated from an inception date of 1/18/12.
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 (1/19/12), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
8 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS EMEA INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector* | Percentage of Net Assets | |||
Financial | 25.34 | % | ||
Energy | 21.38 | |||
Basic Materials | 15.56 | |||
Communications | 15.05 | |||
Consumer Non-Cyclical | 7.66 | |||
Consumer Cyclical | 4.52 | |||
Diversified | 4.24 | |||
Utilities | 3.24 | |||
Industrial | 1.71 | |||
Technology | 0.41 | |||
Short-Term and Other Net Assets | 0.89 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets | |||
Gazprom OAO (Russia) | 8.16 | % | ||
MTN Group Ltd. (South Africa) | 4.99 | |||
LUKOIL OAO (Russia) | 4.55 | |||
Sberbank of Russia (Russia) | 3.85 | |||
Sasol Ltd. (South Africa) | 3.70 | |||
Naspers Ltd. Class N (South Africa) | 3.59 | |||
Standard Bank Group Ltd. (South Africa) | 2.53 | |||
AngloGold Ashanti Ltd. (South Africa) | 1.88 | |||
NovaTek OAO SP GDR (Russia) | 1.72 | |||
Mobile TeleSystems OJSC SP ADR (Russia) | 1.66 | |||
|
| |||
TOTAL | 36.63 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI Emerging Markets EMEA Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Emerging Markets EMEA Index (the “Index”). The Index is designed to measure the performance of equity securities in the emerging market countries of Europe, the Middle East and Africa. 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 January 18, 2012 (inception date of the Fund) through August 31, 2012 (the “reporting period”), the total return for the Fund was 2.91%, net of fees, while the total return for the Index was 3.36%.
As represented by the Index, stock markets in Eastern Europe, the Middle East, and Africa advanced for the reporting period. The Index posted a positive return despite a broad slowdown in global economic growth, driven in large part by a continuing sovereign debt crisis in Europe, which had a negative impact on financial institutions around the globe and led to a meaningful slowdown in European economic growth. Exports to developed regions of the world are an important component of emerging economies, and a marked decline in exports to Europe weighed on economic activity in many countries represented in the Index.
Nonetheless, most of these economies held up reasonably well thanks to improving domestic consumption. One factor contributing to domestic demand was a series of interest rate cuts by central banks in a number of countries represented in the Index, including Russia, South Africa, and Hungary. The resulting reduction in borrowing costs boosted domestic economic activity, which helped offset weaker export demand.
Currency fluctuations detracted from Index performance; in local currency terms, the Index returned 5.94% for the reporting period. The difference resulted from a stronger U.S. dollar, which lowered international equity returns for U.S. investors. The U.S. dollar appreciated by 5% versus the South African rand and 2.5% against the Russian ruble for the reporting period. South Africa and Russia were the largest components of the Index, comprising more than three-quarters of the Index as of August 31, 2012.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 9 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS EMEA INDEX FUND
South Africa, the largest country weighting in the Index (comprising more than 40% of the Index), posted a modest gain for the reporting period. A major exporter of minerals, South Africa saw its exports weaken amid falling demand for commodities, but improving industrial production and retail spending domestically helped support the South African economy. Russia, which comprised approximately 35% of the Index on average, was one of two markets in the Index to decline for the reporting period. Falling energy prices, particularly a sharp decline in the price of oil during the second quarter of 2012, weighed on the Russian equity market. Turkey was among the top-performing stock markets in the Index, gaining more than 25% for the reporting period. Turkey increased its exports to countries in the Middle East and North Africa, where growth has been more robust than in Europe and other developed nations.
From a sector perspective, seven of the ten sectors in the Index advanced for the reporting period. The health care and consumer discretionary sectors posted the best returns, each gaining more than 20% for the reporting period. Financials, the largest sector weighting in the Index as of August 31, 2012, also generated a strong return, advancing by approximately 15%. The only sectors of the Index to register negative returns were materials, utilities, and energy, all of which were adversely affected by the decline in commodity prices.
10 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI WORLD INDEX FUND
Performance as of August 31, 2012
Cumulative Total Returns | ||||||||||
Inception to 8/31/12 | ||||||||||
NAV | MARKET | INDEX | ||||||||
7.76% | 8.34% | 7.68% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
“Cumulative Total Returns” represent the total change in value of an investment over the period indicated and are calculated from an inception date of 1/10/12.
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 (1/12/12), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 11 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI WORLD INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector* | Percentage of Net Assets | |||
Consumer Non-Cyclical | 21.28 | % | ||
Financial | 18.45 | |||
Energy | 10.72 | |||
Industrial | 10.46 | |||
Consumer Cyclical | 9.58 | |||
Communications | 9.46 | |||
Technology | 9.29 | |||
Basic Materials | 6.19 | |||
Utilities | 3.54 | |||
Diversified | 0.62 | |||
Short-Term and Other Net Assets | 0.41 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets | |||
Apple Inc. | 2.53 | % | ||
Exxon Mobil Corp. | 1.68 | |||
Microsoft Corp. | 0.94 | |||
Chevron Corp. | 0.89 | |||
General Electric Co. | 0.88 | |||
AT&T Inc. | 0.88 | |||
International Business Machines Corp. | 0.86 | |||
Nestle SA Registered (Switzerland) | 0.83 | |||
Johnson & Johnson | 0.76 | |||
Procter & Gamble Co. (The) | 0.75 | |||
|
| |||
TOTAL | 11.00 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
The iShares MSCI World Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI World Index (the “Index”). The Index is designed to measure the performance of equity securities in the top 85% of equity market capitalization, as calculated by the index provider, in certain developed market countries. 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 January 10, 2012 (inception date of the Fund) through August 31, 2012 (the “reporting period”), the total return for the Fund was 7.76%, net of fees, while the total return for the Index was 7.68%.
As represented by the Index, stocks worldwide advanced for the reporting period. As the period began, global equity markets were in the midst of a broad rally as signs of improving economic growth, particularly in the U.S. and U.K., boosted investor confidence. After peaking in late March 2012, however, global stocks declined as global economic activity began to decelerate. One factor behind this trend was the continuing sovereign debt crisis in Europe, which had a negative impact on financial institutions around the globe and led to a meaningful slowdown in European economic growth, including recessions in the most fiscally challenged countries in the region. Weaker economic growth in the U.S. and China also weighed on equity markets worldwide. Global stocks bottomed in June 2012 and moved gradually higher over the last three months of the reporting period as investors grew more comfortable with the economic environment and Europe’s efforts to solve its sovereign debt crisis.
Currency fluctuations had a modestly positive impact on Index performance for the reporting period (in local currency terms, the Index returned 7.47% for the reporting period). The U.S. dollar depreciated by 2% versus the British pound and was largely unchanged against the Canadian dollar; excluding the U.S., the U.K. and Canada were the largest country weightings in the Index. The U.S. dollar also appreciated by 2% versus both the Japanese yen and the euro. The net result of the U.S. dollar’s fluctuations against various currencies during the reporting period was a slight overall decline, which boosted Index performance for U.S. investors.
On a regional basis, the U.S. equity market (which comprised approximately half of the Index as of August 31, 2012) returned about 10% for the reporting period. The U.S. economy held up better than other regions of the globe during the reporting period, providing a favorable
12 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI WORLD INDEX FUND
backdrop for U.S. stocks. The remainder of the Index was split between equity markets in Europe, which gained about 7% for the reporting period, and the Asia/Pacific region, which rose by 3.5%. Stocks in the Asia/Pacific region were held in check by declining exports resulting from decelerating economic growth in the U.S. and Europe.
From a sector perspective, eight of the ten sectors in the Index advanced for the reporting period. Information technology generated the largest returns for the reporting period, gaining about 13%. Financials, the largest sector weighting in the Index as of August 31, 2012, and the two consumer sectors — consumer discretionary and consumer staples — also posted double-digit gains for the reporting period. The only two sectors in the Index to decline for the reporting period were energy and materials, which were both adversely impacted by a substantial decline in commodity prices.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 13 |
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, 2012 to August 31, 2012.
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 (3/1/12) | Ending Account Value (8/31/12) | Annualized Expense Ratio | Expenses Paid During Period a | ||||||||||||
All Country World Minimum Volatility | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,047.60 | 0.23 | % | $ | 1.18 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,024.00 | 0.23 | 1.17 | ||||||||||||
Emerging Markets EMEA | ||||||||||||||||
Actual | 1,000.00 | 908.10 | 0.49 | 2.35 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.70 | 0.49 | 2.49 | ||||||||||||
World | ||||||||||||||||
Actual | 1,000.00 | 999.60 | 0.24 | 1.21 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,023.90 | 0.24 | 1.22 |
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 (366 days). |
14 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI ALL COUNTRY WORLD MINIMUM VOLATILITY INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 99.24% |
| |||||||
BELGIUM — 0.15% |
| |||||||
Belgacom SA | 29,380 | $ | 872,509 | |||||
|
| |||||||
872,509 | ||||||||
CANADA — 6.62% |
| |||||||
Barrick Gold Corp. | 20,280 | 781,114 | ||||||
BCE Inc. | 94,016 | 4,174,678 | ||||||
Bell Aliant Inc. | 29,016 | 772,996 | ||||||
Enbridge Inc. | 207,688 | 8,167,778 | ||||||
Fairfax Financial Holdings Ltd. | 8,216 | 3,090,168 | ||||||
Franco-Nevada Corp. | 20,540 | 1,064,413 | ||||||
Goldcorp Inc. | 30,524 | 1,251,767 | ||||||
Intact Financial Corp. | 26,156 | 1,592,923 | ||||||
Pembina Pipeline Corp. | 10,556 | 285,815 | ||||||
Rogers Communications Inc. Class B | 16,536 | 666,400 | ||||||
Thomson Reuters Corp. | 150,072 | 4,254,967 | ||||||
Tim Hortons Inc. | 65,260 | 3,293,254 | ||||||
TMX Group Inc. | 6,188 | 312,582 | ||||||
TransCanada Corp. | 190,892 | 8,588,544 | ||||||
|
| |||||||
38,297,399 | ||||||||
CHILE — 0.47% |
| |||||||
Banco de Credito e Inversiones | 12,078 | 761,822 | ||||||
Empresa Nacional de Electricidad SA | 205,504 | 339,524 | ||||||
LATAM Airlines Group SA | 68,016 | 1,612,247 | ||||||
|
| |||||||
2,713,593 | ||||||||
CHINA — 2.08% |
| |||||||
China Construction Bank Corp. Class H | 3,120,000 | 2,051,507 | ||||||
China Minsheng Banking Corp. Ltd. Class H | 780,000 | 635,565 | ||||||
China Mobile Ltd. | 416,000 | 4,440,909 | ||||||
China Resources Gas Group Ltd.a | 208,000 | 409,229 | ||||||
China Resources Power Holdings Co. Ltd. | 624,000 | 1,333,882 | ||||||
Inner Mongolia Yitai Coal Co. Ltd. Class B | 83,200 | 453,107 | ||||||
Jiangsu Expressway Co. Ltd. Class H | 520,000 | 428,403 | ||||||
Kunlun Energy Co. Ltd.a | 208,000 | 355,594 | ||||||
Tingyi (Cayman Islands) Holding Corp.a | 520,000 | 1,538,630 | ||||||
Zhejiang Expressway Co. Ltd. Class H | 624,000 | 411,910 | ||||||
|
| |||||||
12,058,736 | ||||||||
COLOMBIA — 0.31% |
| |||||||
Cementos Argos SA | 78,676 | 306,250 | ||||||
Corporacion Financiera Colombiana SA | 16,588 | 300,112 |
Security | Shares | Value | ||||||
Grupo Argos SA | 120,744 | $ | 1,165,073 | |||||
|
| |||||||
1,771,435 | ||||||||
CZECH REPUBLIC — 0.11% |
| |||||||
Telefonica O2 Czech Republic AS | 30,940 | 656,091 | ||||||
|
| |||||||
656,091 | ||||||||
DENMARK — 0.17% |
| |||||||
Novo Nordisk A/S Class B | 6,396 | 1,009,468 | ||||||
|
| |||||||
1,009,468 | ||||||||
EGYPT — 0.16% |
| |||||||
Commercial International Bank Egypt SAE | 184,236 | 908,387 | ||||||
|
| |||||||
908,387 | ||||||||
FINLAND — 0.05% |
| |||||||
Orion OYJ Class B | 12,792 | 263,149 | ||||||
|
| |||||||
263,149 | ||||||||
FRANCE — 0.34% |
| |||||||
Eutelsat Communications | 50,648 | 1,560,294 | ||||||
Societe BIC SA | 4,004 | 431,875 | ||||||
|
| |||||||
1,992,169 | ||||||||
HONG KONG — 3.37% |
| |||||||
Cheung Kong Infrastructure Holdings Ltd. | 156,000 | 943,291 | ||||||
CLP Holdings Ltd. | 650,000 | 5,417,889 | ||||||
Hang Seng Bank Ltd.a | 312,000 | 4,440,909 | ||||||
Hopewell Holdings Ltd. | 260,000 | 833,006 | ||||||
Link REIT (The) | 858,000 | 3,827,468 | ||||||
MTR Corp. Ltd. | 598,000 | 2,143,355 | ||||||
Power Assets Holdings Ltd. | 234,000 | 1,896,135 | ||||||
|
| |||||||
19,502,053 | ||||||||
INDONESIA — 1.12% |
| |||||||
PT Bank Central Asia Tbk | 2,054,000 | 1,669,481 | ||||||
PT Telekomunikasi Indonesia (Persero) Tbk | 3,328,000 | 3,245,978 | ||||||
PT Unilever Indonesia Tbk | 546,000 | 1,551,820 | ||||||
|
| |||||||
6,467,279 | ||||||||
ISRAEL — 0.53% |
| |||||||
Bezeq The Israel Telecommunication Corp. Ltd.a | 507,156 | 576,163 | ||||||
NICE Systems Ltd.b | 24,544 | 770,468 | ||||||
Teva Pharmaceutical Industries Ltd. | 42,640 | 1,700,777 | ||||||
|
| |||||||
3,047,408 |
SCHEDULESOF INVESTMENTS | 15 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI ALL COUNTRY WORLD MINIMUM VOLATILITY INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
JAPAN — 13.15% |
| |||||||
ABC-MART Inc. | 10,400 | $ | 434,994 | |||||
All Nippon Airways Co. Ltd.a | 416,000 | 919,131 | ||||||
Bank of Kyoto Ltd. (The) | 104,000 | 824,828 | ||||||
Benesse Holdings Inc. | 26,000 | 1,286,718 | ||||||
Chugai Pharmaceutical Co. Ltd. | 62,400 | 1,243,218 | ||||||
Chugoku Bank Ltd. (The) | 104,000 | 1,419,872 | ||||||
Eisai Co. Ltd. | 67,600 | 3,086,462 | ||||||
FamilyMart Co. Ltd. | 20,800 | 1,002,810 | ||||||
Gunma Bank Ltd. (The) | 156,000 | 820,843 | ||||||
Hachijuni Bank Ltd. (The) | 156,000 | 856,705 | ||||||
Itochu Techno-Solutions Corp. | 10,400 | 569,808 | ||||||
Iyo Bank Ltd. (The) | 104,000 | 843,423 | ||||||
Japan Real Estate Investment Corp. | 104 | 1,014,764 | ||||||
Jupiter Telecommunications Co. Ltd. | 676 | 689,813 | ||||||
Kamigumi Co. Ltd. | 104,000 | 835,453 | ||||||
Keikyu Corp. | 156,000 | 1,522,146 | ||||||
Keio Corp. | 104,000 | 814,202 | ||||||
Kintetsu Corp.a | 208,000 | 855,377 | ||||||
Lawson Inc. | 20,800 | 1,593,870 | ||||||
McDonald’s Holdings Co. (Japan) Ltd. | 26,000 | 737,165 | ||||||
Miraca Holdings Inc. | 26,000 | 1,163,857 | ||||||
Mitsubishi Tanabe Pharma Corp. | 83,200 | 1,233,655 | ||||||
Nexon Co. Ltd.b | 41,600 | 599,826 | ||||||
Nippon Building Fund Inc. | 104 | 1,051,954 | ||||||
Nissin Foods Holdings Co. Ltd. | 20,800 | 803,576 | ||||||
Nitori Holdings Co. Ltd. | 13,000 | 1,301,660 | ||||||
NTT DOCOMO Inc. | 4,264 | 7,253,701 | ||||||
Odakyu Electric Railway Co. Ltd. | 260,000 | 2,759,387 | ||||||
Ono Pharmaceutical Co. Ltd. | 31,200 | 1,936,552 | ||||||
Oracle Corp. Japan | 15,600 | 754,100 | ||||||
Oriental Land Co. Ltd. | 20,800 | 2,805,211 | ||||||
Osaka Gas Co. Ltd. | 416,000 | 1,817,011 | ||||||
Otsuka Holdings Co. Ltd. | 46,800 | 1,427,310 | ||||||
Rakuten Inc. | 72,800 | 702,897 | ||||||
Rinnai Corp. | 10,400 | 757,088 | ||||||
Sankyo Co. Ltd. | 15,600 | 720,230 | ||||||
Santen Pharmaceutical Co. Ltd. | 26,000 | 1,128,991 | ||||||
Secom Co. Ltd. | 62,400 | 3,151,877 | ||||||
Seven Bank Ltd. | 208,000 | 573,793 | ||||||
Shikoku Electric Power Co. Inc. | 31,200 | 378,942 | ||||||
Shimamura Co. Ltd. | 10,400 | 1,233,921 | ||||||
Shizuoka Bank Ltd. (The) | 208,000 | 2,159,693 |
Security | Shares | Value | ||||||
Suzuken Co. Ltd. | 26,000 | $ | 880,281 | |||||
Taisho Pharmaceutical Holdings Co. Ltd. | 10,400 | 838,110 | ||||||
Takeda Pharmaceutical Co. Ltd. | 135,200 | 6,336,960 | ||||||
Toho Co. Ltd. | 20,800 | 361,543 | ||||||
Tokyo Gas Co. Ltd. | 728,000 | 4,016,552 | ||||||
TonenGeneral Sekiyu K.K. | 104,000 | 879,285 | ||||||
Tsumura & Co. | 26,000 | 801,252 | ||||||
Unicharm Corp. | 26,000 | 1,512,516 | ||||||
West Japan Railway Co. | 62,400 | 2,729,502 | ||||||
Yamazaki Baking Co. Ltd. | 52,000 | 683,372 | ||||||
|
| |||||||
76,126,207 | ||||||||
MALAYSIA — 1.37% | ||||||||
Berjaya Sports Toto Bhd | 312,000 | 440,365 | ||||||
Bumi Armada Bhd(b) | 405,600 | 491,990 | ||||||
Hong Leong Bank Bhd | 78,000 | 335,516 | ||||||
Malayan Banking Bhd | 327,600 | 959,366 | ||||||
Maxis Communications Bhd | 754,000 | 1,698,883 | ||||||
Petronas Dagangan Bhd | 88,400 | 633,753 | ||||||
Petronas Gas Bhd | 109,200 | 677,323 | ||||||
Public Bank Bhd Foreign | 436,800 | 2,004,709 | ||||||
Telekom Malaysia Bhd | 364,000 | 708,312 | ||||||
|
| |||||||
7,950,217 | ||||||||
PERU — 0.22% | ||||||||
Compania de Minas Buenaventura SA SP ADR | 36,452 | 1,263,426 | ||||||
|
| |||||||
1,263,426 | ||||||||
PHILIPPINES — 0.38% | ||||||||
Bank of the Philippine Islands | 307,320 | 547,808 | ||||||
Philippine Long Distance Telephone Co. | 18,720 | 1,219,080 | ||||||
San Miguel Corp. | 157,560 | 419,411 | ||||||
|
| |||||||
2,186,299 | ||||||||
SINGAPORE — 1.85% | ||||||||
ComfortDelGro Corp. Ltd. | 936,000 | 1,256,854 | ||||||
Oversea-Chinese Banking Corp. Ltd. | 260,000 | 1,936,348 | ||||||
Singapore Airlines Ltd.a | 208,000 | 1,775,854 | ||||||
Singapore Press Holdings Ltd.a | 10,000 | 31,826 | ||||||
Singapore Telecommunications Ltd. | 1,716,000 | 4,663,492 | ||||||
StarHub Ltd.a | 364,000 | 1,053,423 | ||||||
|
| |||||||
10,717,797 | ||||||||
SPAIN — 0.28% | ||||||||
Amadeus IT Holding SA Class A | 48,308 | 1,081,446 |
16 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI ALL COUNTRY WORLD MINIMUM VOLATILITY INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Bankia SAb | 297,076 | $ | 533,986 | |||||
|
| |||||||
1,615,432 | ||||||||
SWITZERLAND — 5.04% | ||||||||
Givaudan SA Registeredb | 2,756 | 2,606,714 | ||||||
Lindt & Spruengli AG Registeredb | 52 | 1,885,450 | ||||||
Nestle SA Registered | 106,184 | 6,615,600 | ||||||
Novartis AG Registered | 108,524 | 6,408,225 | ||||||
Roche Holding AG Genusschein | 10,712 | 1,954,383 | ||||||
Schindler Holding AG Participation Certificates | 2,652 | 313,196 | ||||||
SGS SA Registered | 1,976 | 3,995,146 | ||||||
Swiss Prime Site AG Registeredb | 19,708 | 1,625,093 | ||||||
Swisscom AG Registered | 9,360 | 3,767,189 | ||||||
|
| |||||||
29,170,996 | ||||||||
TAIWAN — 4.00% | ||||||||
Advantech Co. Ltd. | 104,000 | 361,123 | ||||||
Chang Hwa Commercial Bank Ltd. | 556,400 | 287,015 | ||||||
China Steel Corp. | 3,694,050 | 3,163,580 | ||||||
Chunghwa Telecom Co. Ltd. | 1,560,000 | 4,713,699 | ||||||
Far EasTone Telecommunications Co. Ltd. | 676,000 | 1,665,680 | ||||||
First Financial Holding Co. Ltd. | 1,102,400 | 638,598 | ||||||
Formosa Petrochemical Corp. | 416,000 | 1,186,151 | ||||||
Fubon Financial Holding Co. Ltd. | 379,031 | 376,487 | ||||||
Inventec Corp. | 961,830 | 314,712 | ||||||
MStar Semiconductor Inc. | 104,000 | 828,153 | ||||||
Synnex Technology International Corp. | 520,000 | 1,159,761 | ||||||
Taiwan Cooperative Financial Holding Co. Ltd. | 1,686,550 | 926,304 | ||||||
Taiwan Mobile Co. Ltd. | 676,000 | 2,505,292 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 1,716,000 | 4,772,555 | ||||||
U-Ming Marine Transport Corp. | 156,000 | 234,383 | ||||||
|
| |||||||
23,133,493 | ||||||||
THAILAND — 0.82% | ||||||||
Advanced Information Service PCL NVDR | 214,000 | 1,481,985 | ||||||
Bangkok Bank PCL Foreign | 57,200 | 352,309 | ||||||
Bangkok Bank PCL NVDR | 62,400 | 374,380 | ||||||
BEC World PCL NVDR | 280,800 | 465,984 | ||||||
Charoen Pokphand Foods PCL NVDR | 384,800 | 389,896 | ||||||
CP All PCL NVDR | 1,544,400 | 1,700,393 | ||||||
|
| |||||||
4,764,947 |
Security | Shares | Value | ||||||
UNITED KINGDOM — 4.38% |
| |||||||
Aon PLC | 109,252 | $ | 5,676,734 | |||||
Babcock International Group PLC | 77,376 | 1,151,575 | ||||||
British Sky Broadcasting Group PLC | 28,288 | 341,927 | ||||||
Capita PLC | 195,624 | 2,243,395 | ||||||
Compass Group PLC | 228,540 | 2,573,681 | ||||||
Experian PLC | 24,596 | 392,233 | ||||||
Pearson PLC | 123,604 | 2,346,101 | ||||||
Reckitt Benckiser Group PLC | 27,508 | 1,555,447 | ||||||
Reed Elsevier PLC | 243,516 | 2,283,988 | ||||||
Serco Group PLC | 204,464 | 1,826,778 | ||||||
Shire PLC | 38,636 | 1,175,801 | ||||||
SSE PLC | 58,084 | 1,262,086 | ||||||
Unilever PLC | 8,528 | 306,669 | ||||||
Vodafone Group PLC | 449,644 | 1,296,259 | ||||||
Wm Morrison Supermarkets PLC | 204,672 | 910,254 | ||||||
|
| |||||||
25,342,928 | ||||||||
UNITED STATES — 52.27% | ||||||||
3M Co. | 3,120 | 288,912 | ||||||
Abbott Laboratories | 127,192 | 8,336,164 | ||||||
Activision Blizzard Inc. | 181,844 | 2,138,485 | ||||||
Advance Auto Parts Inc. | 29,432 | 2,093,204 | ||||||
Airgas Inc. | 3,900 | 323,973 | ||||||
Allergan Inc. | 3,068 | 264,247 | ||||||
Altria Group Inc. | 100,568 | 3,415,289 | ||||||
American Capital Agency Corp. | 129,948 | 4,527,388 | ||||||
AmerisourceBergen Corp. | 79,612 | 3,066,654 | ||||||
Amgen Inc. | 103,116 | 8,653,495 | ||||||
Annaly Capital Management Inc.a | 397,748 | 6,885,018 | ||||||
Arch Capital Group Ltd.a,b | 55,172 | 2,201,915 | ||||||
AT&T Inc. | 81,796 | 2,997,005 | ||||||
Automatic Data Processing Inc. | 150,540 | 8,743,363 | ||||||
AutoZone Inc.b | 10,868 | 3,930,303 | ||||||
Becton, Dickinson and Co. | 40,924 | 3,109,406 | ||||||
Bristol-Myers Squibb Co. | 63,232 | 2,087,288 | ||||||
C.H. Robinson Worldwide Inc. | 7,592 | 429,783 | ||||||
C.R. Bard Inc. | 31,772 | 3,117,151 | ||||||
Campbell Soup Co. | 76,960 | 2,704,374 | ||||||
Chevron Corp. | 13,624 | 1,528,068 | ||||||
Church & Dwight Co. Inc. | 51,584 | 2,823,708 | ||||||
Clorox Co. (The) | 40,456 | 2,943,174 | ||||||
Coca-Cola Co. (The) | 123,968 | 4,636,403 |
SCHEDULESOF INVESTMENTS | 17 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI ALL COUNTRY WORLD MINIMUM VOLATILITY INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Colgate-Palmolive Co. | 52,832 | $ | 5,616,570 | |||||
Consolidated Edison Inc. | 102,024 | 6,184,695 | ||||||
Costco Wholesale Corp. | 4,992 | 488,567 | ||||||
DIRECTVb | 26,572 | 1,384,135 | ||||||
Dollar General Corp.b | 17,056 | 871,050 | ||||||
Dollar Tree Inc.b | 97,916 | 4,716,614 | ||||||
Dominion Resources Inc. | 34,112 | 1,790,198 | ||||||
Duke Energy Corp. | 43,056 | 2,789,168 | ||||||
Dun & Bradstreet Corp. (The) | 17,264 | 1,397,521 | ||||||
Ecolab Inc. | 110,708 | 7,088,633 | ||||||
Eli Lilly and Co. | 136,448 | 6,127,880 | ||||||
Everest Re Group Ltd. | 20,072 | 2,080,664 | ||||||
Exxon Mobil Corp. | 73,996 | 6,459,851 | ||||||
Family Dollar Stores Inc. | 35,516 | 2,260,238 | ||||||
Forest Laboratories Inc.b | 26,936 | 934,410 | ||||||
General Mills Inc. | 169,104 | 6,650,860 | ||||||
H.J. Heinz Co. | 5,408 | 301,334 | ||||||
Health Care REIT Inc.a | 83,408 | 4,874,363 | ||||||
Hershey Co. (The) | 32,864 | 2,360,292 | ||||||
Hormel Foods Corp. | 58,760 | 1,687,587 | ||||||
International Business Machines Corp. | 19,708 | 3,840,104 | ||||||
Intuit Inc. | 42,276 | 2,474,837 | ||||||
J.M. Smucker Co. (The) | 42,016 | 3,570,100 | ||||||
Johnson & Johnson | 183,144 | 12,349,400 | ||||||
Kellogg Co. | 92,300 | 4,674,995 | ||||||
Kimberly-Clark Corp. | 65,416 | 5,468,778 | ||||||
Kinder Morgan Inc. | 213,356 | 7,631,744 | ||||||
Kinder Morgan Management LLCa,b | 39,988 | 2,963,911 | ||||||
Kroger Co. (The) | 23,244 | 517,876 | ||||||
Laboratory Corp. of America Holdingsb | 30,680 | 2,698,306 | ||||||
Marsh & McLennan Companies Inc. | 104,624 | 3,575,002 | ||||||
McCormick & Co. Inc. NVS | 43,524 | 2,674,115 | ||||||
McDonald’s Corp. | 82,264 | 7,361,805 | ||||||
Microsoft Corp. | 180,492 | 5,562,763 | ||||||
Newmont Mining Corp. | 6,344 | 321,514 | ||||||
NextEra Energy Inc. | 7,540 | 507,517 | ||||||
O’Reilly Automotive Inc.b | 47,892 | 4,068,425 | ||||||
PartnerRe Ltd.a | 26,416 | 1,938,934 | ||||||
Paychex Inc. | 133,068 | 4,425,842 | ||||||
People’s United Financial Inc. | 130,468 | 1,561,702 | ||||||
PepsiCo Inc. | 64,584 | 4,677,819 | ||||||
PG&E Corp. | 125,632 | 5,453,685 | ||||||
Procter & Gamble Co. (The) | 101,192 | 6,799,090 |
Security | Shares | Value | ||||||
Raytheon Co. | 8,788 | $ | 496,698 | |||||
RenaissanceRe Holdings Ltd. | 19,448 | 1,502,358 | ||||||
Ross Stores Inc. | 60,788 | 4,205,922 | ||||||
SAIC Inc. | 109,408 | 1,335,872 | ||||||
Sherwin-Williams Co. (The) | 32,656 | 4,672,420 | ||||||
Southern Co. (The) | 175,864 | 7,971,915 | ||||||
Stericycle Inc.a,b | 29,640 | 2,712,653 | ||||||
Synopsys Inc.b | 58,604 | 1,935,690 | ||||||
Target Corp. | 34,684 | 2,222,898 | ||||||
TJX Companies Inc. (The) | 57,564 | 2,635,856 | ||||||
Total System Services Inc. | 64,272 | 1,489,825 | ||||||
Travelers Companies Inc. (The) | 35,412 | 2,292,573 | ||||||
VeriSign Inc.b | 8,892 | 423,971 | ||||||
Verisk Analytics Inc. Class Ab | 51,688 | 2,507,902 | ||||||
Verizon Communications Inc. | 108,264 | 4,648,856 | ||||||
W.R. Berkley Corp. | 43,992 | 1,644,421 | ||||||
Wal-Mart Stores Inc. | 77,844 | 5,651,474 | ||||||
Washington Post Co. (The) Class B | 2,028 | 714,870 | ||||||
Waste Management Inc. | 98,228 | 3,396,724 | ||||||
Wisconsin Energy Corp. | 84,396 | 3,203,672 | ||||||
Xcel Energy Inc. | 94,640 | 2,639,510 | ||||||
Xilinx Inc. | 40,404 | 1,370,100 | ||||||
Yum! Brands Inc. | 6,604 | 420,807 | ||||||
|
| |||||||
302,524,651 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | 574,356,069 | |||||||
INVESTMENT COMPANIES — 0.28% |
| |||||||
EXCHANGE-TRADED FUNDS — 0.28% |
| |||||||
iShares S&P India Nifty 50 Index Fundc | 73,268 | 1,640,470 | ||||||
|
| |||||||
1,640,470 | ||||||||
|
| |||||||
TOTAL INVESTMENT COMPANIES | 1,640,470 | |||||||
PREFERRED STOCKS — 0.17% | ||||||||
COLOMBIA — 0.17% | ||||||||
Banco Davivienda SA | 37,180 | 438,251 | ||||||
Grupo Argos SA | 17,992 | 173,607 | ||||||
Grupo Aval Acciones y Valores SA | 625,040 | 394,077 | ||||||
|
| |||||||
1,005,935 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS | 1,005,935 |
18 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI ALL COUNTRY WORLD MINIMUM VOLATILITY INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS — 3.91% |
| |||||||
MONEY MARKET FUNDS — 3.91% |
| |||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | ||||||||
0.23%c,d,e | 20,805,217 | $ | 20,805,217 | |||||
BlackRock Cash Funds: Prime, | ||||||||
0.23%c,d,e | 1,576,648 | 1,576,648 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%c,d | 246,190 | 246,190 | ||||||
|
| |||||||
22,628,055 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| 22,628,055 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| 599,630,529 | ||||||
Other Assets, Less Liabilities — (3.60)% |
| (20,854,941 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% | $ | 578,775,588 | ||||||
|
|
NVDR — Non-Voting Depositary Receipts
NVS — Non-Voting Shares
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.
SCHEDULESOF INVESTMENTS | 19 |
Table of Contents
Schedule of Investments
iSHARES® MSCI EMERGING MARKETS EMEA INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 97.66% |
| |||||||
CZECH REPUBLIC — 2.03% |
| |||||||
CEZ AS | 2,764 | $ | 108,550 | |||||
Komercni Banka AS | 272 | 52,791 | ||||||
Telefonica O2 Czech Republic AS | 2,274 | 48,221 | ||||||
|
| |||||||
209,562 | ||||||||
EGYPT — 1.97% | ||||||||
Commercial International Bank Egypt SAE SP GDR | 15,000 | 76,500 | ||||||
Orascom Construction Industries SAE SP GDR | 1,868 | 83,967 | ||||||
Orascom Telecom Holding SAE SP GDRa,b | 14,950 | 43,803 | ||||||
|
| |||||||
204,270 | ||||||||
HUNGARY — 1.51% | ||||||||
Magyar Telekom Telecommunications PLC | 8,992 | 17,063 | ||||||
MOL Hungarian Oil and Gas PLC | 618 | 45,537 | ||||||
OTP Bank Nyrt | 3,370 | 53,473 | ||||||
Richter Gedeon Nyrt | 236 | 40,282 | ||||||
|
| |||||||
156,355 | ||||||||
POLAND — 7.86% | ||||||||
Asseco Poland SA | 1,234 | 16,496 | ||||||
Bank Handlowy w Warszawie SA | 540 | 12,726 | ||||||
Bank Millennium SAa | 9,446 | 9,992 | ||||||
Bank Pekao SA | 1,914 | 86,866 | ||||||
BRE Bank SAa | 234 | 21,515 | ||||||
Cyfrowy Polsat SAa | 3,868 | 16,039 | ||||||
ENEA SA | 2,484 | 12,337 | ||||||
Eurocash SA | 922 | 11,114 | ||||||
Grupa Lotos SAa | 770 | 6,145 | ||||||
Jastrzebska Spolka Weglowa SA | 612 | 16,193 | ||||||
Kernel Holding SAa | 862 | 17,664 | ||||||
KGHM Polska Miedz SA | 2,232 | 87,375 | ||||||
Polska Grupa Energetyczna SA | 12,176 | 68,580 | ||||||
Polski Koncern Naftowy Orlen SAa | 5,000 | 58,840 | ||||||
Polskie Gornictwo Naftowe i Gazownictwo SAa | 30,860 | 37,851 | ||||||
Powszechna Kasa Oszczednosci Bank Polski SA | 12,070 | 129,492 | ||||||
Powszechny Zaklad Ubezpieczen SA | 888 | 92,458 | ||||||
Synthos SA | 8,106 | 13,338 | ||||||
Tauron Polska Energia SA | 18,864 | 27,742 |
Security | Shares | Value | ||||||
Telekomunikacja Polska SA | 12,642 | $ | 63,242 | |||||
TVN SA | 3,346 | 7,069 | ||||||
|
| |||||||
813,074 | ||||||||
RUSSIA — 31.41% | ||||||||
Federal Grid Co. of Unified Energy System OJSCa | 5,360,000 | 33,145 | ||||||
Gazprom OAO | 173,220 | 843,492 | ||||||
IDGC Holding JSCa | 310,000 | 16,572 | ||||||
Inter RAO UES OJSCa | 21,400,000 | 17,153 | ||||||
LSR Group OJSC SP GDRb | 3,748 | 15,461 | ||||||
LUKOIL OAO | 8,274 | 470,324 | ||||||
Magnit OJSC SP GDRb | 4,558 | 145,355 | ||||||
Mechel OAO SP ADR | 3,810 | 21,831 | ||||||
MMC Norilsk Nickel OJSC | 780 | 115,201 | ||||||
Mobile TeleSystems OJSC SP ADR | 9,340 | 171,949 | ||||||
NovaTek OAO SP GDRb | 1,492 | 177,996 | ||||||
Novolipetsk Steel OJSC SP GDRb | 972 | 17,574 | ||||||
Rosneft Oil Co. OJSC | 20,540 | 122,514 | ||||||
Rostelecom OJSC | 20,100 | 76,765 | ||||||
RusHydro OJSC | 2,024,000 | 51,158 | ||||||
Sberbank of Russia | 138,080 | 397,959 | ||||||
Severstal OAO | 2,320 | 26,513 | ||||||
Sistema JSFC SP GDRb | 1,950 | 38,434 | ||||||
Surgutneftegas OJSC | 115,600 | 99,711 | ||||||
Tatneft OAO | 23,240 | 140,754 | ||||||
TMK OAO SP GDRb | 890 | 12,238 | ||||||
Uralkali OJSC | 21,840 | 166,889 | ||||||
VTB Bank OJSC | 42,640,000 | 70,443 | ||||||
|
| |||||||
3,249,431 | ||||||||
SOUTH AFRICA — 43.25% | ||||||||
Absa Group Ltd. | 4,558 | 76,927 | ||||||
African Bank Investments Ltd. | 11,084 | 42,740 | ||||||
African Rainbow Minerals Ltd. | 1,598 | 27,870 | ||||||
Anglo American Platinum Ltd. | 1,098 | 54,576 | ||||||
AngloGold Ashanti Ltd. | 6,242 | 194,692 | ||||||
ArcelorMittal South Africa Ltd.a | 3,058 | 14,730 | ||||||
Aspen Pharmacare Holdings Ltd.a | 4,858 | 82,716 | ||||||
Assore Ltd. | 556 | 20,186 | ||||||
Aveng Ltd. | 6,238 | 22,773 | ||||||
Barloworld Ltd. | 3,238 | 27,276 | ||||||
Bidvest Group Ltd. | 4,710 | 113,999 | ||||||
Discovery Holdings Ltd. | 4,656 | 31,863 |
20 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS EMEA INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Exxaro Resources Ltd. | 1,834 | $ | 32,559 | |||||
FirstRand Ltd. | 50,476 | 164,391 | ||||||
Foschini Group Ltd. (The) | 3,464 | 55,483 | ||||||
Gold Fields Ltd. | 11,740 | 140,724 | ||||||
Growthpoint Properties Ltd. | 28,656 | 93,259 | ||||||
Harmony Gold Mining Co. Ltd. | 6,478 | 52,448 | ||||||
Impala Platinum Holdings Ltd. | 8,710 | 137,442 | ||||||
Imperial Holdings Ltd. | 2,914 | 70,581 | ||||||
Investec Ltd. | 3,828 | 23,140 | ||||||
Kumba Iron Ore Ltd. | 1,216 | 69,251 | ||||||
Liberty Holdings Ltd. | 1,882 | 20,500 | ||||||
Life Healthcare Group Holdings Ltd. | 15,268 | 57,786 | ||||||
Massmart Holdings Ltd. | 2,026 | 40,900 | ||||||
MMI Holdings Ltd. | 17,546 | 40,511 | ||||||
Mr. Price Group Ltd. | 3,584 | 57,873 | ||||||
MTN Group Ltd. | 27,724 | 516,423 | ||||||
Naspers Ltd. Class N | 6,396 | 371,080 | ||||||
Nedbank Group Ltd. | 3,290 | 72,213 | ||||||
Netcare Ltd. | 15,624 | 32,496 | ||||||
Northam Platinum Ltd. | 4,370 | 13,999 | ||||||
Pick’n Pay Stores Ltd. | 4,792 | 25,261 | ||||||
Pretoria Portland Cement Co. Ltd. | 7,622 | 24,055 | ||||||
Redefine Properties Ltd. | 50,778 | 57,836 | ||||||
Remgro Ltd. | 7,564 | 129,140 | ||||||
Reunert Ltd. | 3,028 | 25,565 | ||||||
RMB Holdings Ltd. | 12,306 | 53,087 | ||||||
RMI Holdings Ltd. | 10,526 | 23,728 | ||||||
Sanlam Ltd. | 28,350 | 124,385 | ||||||
Sappi Ltd.a | 8,136 | 22,684 | ||||||
Sasol Ltd. | 8,904 | 383,194 | ||||||
Shoprite Holdings Ltd. | 7,002 | 140,389 | ||||||
SPAR Group Ltd. (The) | 2,930 | 43,071 | ||||||
Standard Bank Group Ltd. | 19,846 | 261,364 | ||||||
Steinhoff International Holdings Ltd.a | 17,686 | 55,124 | ||||||
Tiger Brands Ltd. | 2,620 | 86,074 | ||||||
Truworths International Ltd. | 7,318 | 82,700 | ||||||
Vodacom Group Ltd. | 5,808 | 73,719 | ||||||
Woolworths Holdings Ltd. | 12,418 | 88,400 | ||||||
|
| |||||||
4,473,183 | ||||||||
TURKEY — 9.63% | ||||||||
Akbank TAS | 28,306 | 111,789 | ||||||
Anadolu Efes Biracilik ve Malt Sanayii AS | 3,218 | 44,959 |
Security | Shares | Value | ||||||
Arcelik AS | 4,092 | $ | 22,643 | |||||
Asya Katilim Bankasi ASa | 10,326 | 10,905 | ||||||
BIM Birlesik Magazalar AS | 1,718 | 70,636 | ||||||
Coca-Cola Icecek AS | 1,134 | 20,209 | ||||||
Emlak Konut Gayrimenkul Yatirim Ortakligi AS | 10,404 | 15,222 | ||||||
Enka Insaat ve Sanayi AS | 6,194 | 17,171 | ||||||
Eregli Demir ve Celik Fabrikalari TAS | 13,886 | 15,505 | ||||||
Ford Otomotiv Sanayi AS | 1,296 | 12,724 | ||||||
Haci Omer Sabanci Holding AS | 13,054 | 56,149 | ||||||
KOC Holding AS | 10,130 | 41,232 | ||||||
Koza Altin Isletmeleri AS | 662 | 13,036 | ||||||
TAV Havalimanlari Holding AS | 3,192 | 16,609 | ||||||
Turk Hava Yollari AOa | 7,840 | 15,524 | ||||||
Turk Telekomunikasyon AS | 9,034 | 35,777 | ||||||
Turkcell Iletisim Hizmetleri ASa | 12,970 | 77,047 | ||||||
Turkiye Garanti Bankasi AS | 37,332 | 160,166 | ||||||
Turkiye Halk Bankasi AS | 5,010 | 45,194 | ||||||
Turkiye Is Bankasi AS Class C | 25,726 | 78,393 | ||||||
Turkiye Petrol Rafinerileri AS | 2,008 | 45,946 | ||||||
Turkiye Sise ve Cam Fabrikalari AS | 7,232 | 10,621 | ||||||
Turkiye Vakiflar Bankasi TAO Class D | 12,048 | 27,303 | ||||||
Yapi ve Kredi Bankasi ASa | 13,324 | 31,074 | ||||||
|
| |||||||
995,834 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | 10,101,709 | |||||||
PREFERRED STOCKS — 1.45% | ||||||||
RUSSIA — 1.45% | ||||||||
AK Transneft OAO | 26 | 42,363 | ||||||
Sberbank of Russia | 17,000 | 36,010 | ||||||
Surgutneftegas OJSC | 111,000 | 71,496 | ||||||
|
| |||||||
149,869 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS | 149,869 | |||||||
|
| |||||||
TOTAL INVESTMENTS | 10,251,578 | |||||||
Other Assets, Less Liabilities — 0.89% | 91,665 | |||||||
|
| |||||||
NET ASSETS — 100.00% | $ | 10,343,243 | ||||||
|
|
SCHEDULESOF INVESTMENTS | 21 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS EMEA INDEX FUND
August 31, 2012
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. |
See notes to financial statements.
22 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
iSHARES® MSCI WORLD INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 99.41% |
| |||||||
AUSTRALIA — 3.67% |
| |||||||
AGL Energy Ltd. | 245 | $ | 3,841 | |||||
ALS Ltd. | 170 | 1,449 | ||||||
Amcor Ltd. | 536 | 4,171 | ||||||
AMP Ltd. | 1,321 | 6,089 | ||||||
APA Group | 477 | 2,376 | ||||||
Asciano Group | 497 | 2,301 | ||||||
ASX Ltd. | 88 | 2,770 | ||||||
Australia and New Zealand Banking Group Ltd. | 1,152 | 29,549 | ||||||
Bendigo and Adelaide Bank Ltd. | 319 | 2,499 | ||||||
BHP Billiton Ltd. | 1,412 | 46,389 | ||||||
Brambles Ltd. | 710 | 4,997 | ||||||
CFS Retail Property Trust Group | 1,066 | 2,110 | ||||||
Coca-Cola Amatil Ltd. | 271 | 3,834 | ||||||
Cochlear Ltd. | 27 | 1,881 | ||||||
Commonwealth Bank of Australia | 681 | 38,525 | ||||||
Computershare Ltd. | 233 | 2,023 | ||||||
Crown Ltd. | 225 | 2,088 | ||||||
CSL Ltd. | 228 | 10,469 | ||||||
Dexus Property Group | 2,352 | 2,321 | ||||||
Echo Entertainment Group Ltd. | 393 | 1,657 | ||||||
Fortescue Metals Group Ltd. | 651 | 2,382 | ||||||
Goodman Group | 732 | 3,018 | ||||||
GPT Group | 731 | 2,652 | ||||||
Iluka Resources Ltd. | 204 | 1,940 | ||||||
Incitec Pivot Ltd. | 787 | 2,367 | ||||||
Insurance Australia Group Ltd. | 946 | 4,057 | ||||||
James Hardie Industries SE | 209 | 1,810 | ||||||
Lend Lease Group | 291 | 2,553 | ||||||
Macquarie Group Ltd. | 150 | 4,164 | ||||||
Metcash Ltd. | 691 | 2,614 | ||||||
Mirvac Group | 1,790 | 2,497 | ||||||
National Australia Bank Ltd. | 967 | 25,193 | ||||||
Newcrest Mining Ltd. | 343 | 8,738 | ||||||
Orica Ltd. | 166 | 4,151 | ||||||
Origin Energy Ltd. | 499 | 6,137 | ||||||
OZ Minerals Ltd. | 300 | 1,935 | ||||||
QBE Insurance Group Ltd. | 510 | 6,868 | ||||||
QR National Ltd. | 795 | 2,876 | ||||||
Ramsay Health Care Ltd. | 96 | 2,470 |
Security | Shares | Value | ||||||
Rio Tinto Ltd. | 142 | $ | 7,226 | |||||
Santos Ltd. | 421 | 4,886 | ||||||
Sonic Healthcare Ltd. | 177 | 2,453 | ||||||
SP AusNet | 234 | 255 | ||||||
Stockland Corp. Ltd. | 1,073 | 3,526 | ||||||
Suncorp Group Ltd. | 583 | 5,537 | ||||||
Tatts Group Ltd. | 797 | 2,240 | ||||||
Telstra Corp. Ltd. | 1,847 | 7,349 | ||||||
Toll Holdings Ltd. | 601 | 2,876 | ||||||
Transurban Group | 604 | 3,776 | ||||||
Wesfarmers Ltd. | 439 | 15,661 | ||||||
Westfield Group | 953 | 9,760 | ||||||
Westfield Retail Trust | 1,327 | 3,963 | ||||||
Westpac Banking Corp. | 1,317 | 33,713 | ||||||
Woodside Petroleum Ltd. | 281 | 9,961 | ||||||
Woolworths Ltd. | 531 | 16,254 | ||||||
WorleyParsons Ltd. | 96 | 2,631 | ||||||
|
| |||||||
391,828 | ||||||||
AUSTRIA — 0.11% |
| |||||||
Andritz AG | 39 | 2,016 | ||||||
Erste Group Bank AGa | 111 | 2,247 | ||||||
IMMOFINANZ AGa | 646 | 2,080 | ||||||
OMV AG | 81 | 2,693 | ||||||
Telekom Austria AG | 312 | 2,496 | ||||||
|
| |||||||
11,532 | ||||||||
BELGIUM — 0.49% |
| |||||||
Ageas SA/NV | 110 | 2,454 | ||||||
Anheuser-Busch InBev NV | 348 | 29,293 | ||||||
Belgacom SA | 76 | 2,257 | ||||||
Colruyt SA | 38 | 1,808 | ||||||
Delhaize Group SA | 53 | 2,105 | ||||||
Groupe Bruxelles Lambert SA | 42 | 2,906 | ||||||
KBC Groep NV | 119 | 2,593 | ||||||
Mobistar SA | 29 | 920 | ||||||
Solvay SA | 27 | 3,036 | ||||||
UCB SA | 50 | 2,458 | ||||||
Umicore SA | 54 | 2,568 | ||||||
|
| |||||||
52,398 | ||||||||
CANADA — 4.97% |
| |||||||
Agnico-Eagle Mines Ltd. | 78 | 3,763 | ||||||
Agrium Inc. | 69 | 6,783 | ||||||
Alimentation Couche-Tard Inc. Class B | 53 | 2,693 |
SCHEDULESOF INVESTMENTS | 23 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI WORLD INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
ARC Resources Ltd. | 129 | $ | 3,047 | |||||
Athabasca Oil Corp.a | 100 | 1,376 | ||||||
Bank of Montreal | 277 | 16,173 | ||||||
Bank of Nova Scotia | 473 | 25,044 | ||||||
Barrick Gold Corp. | 438 | 16,870 | ||||||
Baytex Energy Corp. | 55 | 2,502 | ||||||
BCE Inc. | 86 | 3,819 | ||||||
Bombardier Inc. Class B | 624 | 2,213 | ||||||
Brookfield Asset Management Inc. Class A | 247 | 8,502 | ||||||
Brookfield Office Properties Inc. | 136 | 2,281 | ||||||
Cameco Corp. | 178 | 3,874 | ||||||
Canadian Imperial Bank of Commerce | 174 | 13,441 | ||||||
Canadian National Railway Co. | 191 | 17,458 | ||||||
Canadian Natural Resources Ltd. | 478 | 14,526 | ||||||
Canadian Oil Sands Ltd. | 212 | 4,520 | ||||||
Canadian Pacific Railway Ltd. | 75 | 6,192 | ||||||
Canadian Tire Corp. Ltd. Class A | 39 | 2,817 | ||||||
Canadian Utilities Ltd. Class A | 27 | 1,860 | ||||||
Catamaran Corp.a | 42 | 3,641 | ||||||
Cenovus Energy Inc. | 331 | 10,834 | ||||||
CGI Group Inc. Class Aa | 102 | 2,660 | ||||||
CI Financial Corp. | 83 | 1,865 | ||||||
Crescent Point Energy Corp. | 129 | 5,358 | ||||||
Eldorado Gold Corp. | 305 | 4,046 | ||||||
Enbridge Inc. | 321 | 12,624 | ||||||
Encana Corp. | 321 | 7,098 | ||||||
Fairfax Financial Holdings Ltd. | 9 | 3,385 | ||||||
Finning International Inc. | 82 | 1,885 | ||||||
First Quantum Minerals Ltd. | 215 | 4,137 | ||||||
Fortis Inc. | 90 | 2,963 | ||||||
Franco-Nevada Corp. | 64 | 3,317 | ||||||
George Weston Ltd. | 47 | 3,023 | ||||||
Gildan Activewear Inc. | 55 | 1,666 | ||||||
Goldcorp Inc. | 357 | 14,640 | ||||||
Great-West Lifeco Inc. | 129 | 2,846 | ||||||
Husky Energy Inc. | 154 | 4,068 | ||||||
IAMGOLD Corp. | 180 | 2,351 | ||||||
IGM Financial Inc. | 55 | 2,113 | ||||||
Imperial Oil Ltd. | 133 | 6,066 | ||||||
Intact Financial Corp. | 56 | 3,410 | ||||||
Kinross Gold Corp. | 508 | 4,509 | ||||||
Loblaw Companies Ltd. | 59 | 2,071 |
Security | Shares | Value | ||||||
Magna International Inc. Class A | 99 | $ | 4,268 | |||||
Manulife Financial Corp. | 778 | 8,704 | ||||||
MEG Energy Corp.a | 100 | 3,934 | ||||||
Metro Inc. Class A | 50 | 2,901 | ||||||
National Bank of Canada | 72 | 5,400 | ||||||
New Gold Inc.a | 210 | 2,324 | ||||||
Nexen Inc. | 231 | 5,800 | ||||||
Onex Corp. | 49 | 1,925 | ||||||
Open Text Corp.a | 51 | 2,739 | ||||||
Osisko Mining Corp.a | 291 | 2,822 | ||||||
Pacific Rubiales Energy Corp. | 128 | 3,126 | ||||||
Pembina Pipeline Corp. | 129 | 3,493 | ||||||
Pengrowth Energy Corp. | 290 | 1,957 | ||||||
Penn West Petroleum Ltd. | 214 | 3,032 | ||||||
Potash Corp. of Saskatchewan Inc. | 373 | 15,255 | ||||||
Power Corp. of Canada | 157 | 3,740 | ||||||
Power Financial Corp. | 116 | 2,920 | ||||||
Progress Energy Resources Corp. | 84 | 1,870 | ||||||
Research In Motion Ltd.a | 220 | 1,465 | ||||||
RioCan Real Estate Investment Trust | 67 | 1,875 | ||||||
Rogers Communications Inc. Class B | 174 | 7,012 | ||||||
Royal Bank of Canada | 619 | 34,605 | ||||||
Saputo Inc. | 62 | 2,611 | ||||||
Shaw Communications Inc. Class B | 180 | 3,677 | ||||||
Shoppers Drug Mart Corp. | 97 | 4,117 | ||||||
Silver Wheaton Corp. | 160 | 5,525 | ||||||
SNC-Lavalin Group Inc. | 71 | 2,518 | ||||||
Sun Life Financial Inc. | 256 | 5,969 | ||||||
Suncor Energy Inc. | 687 | 21,449 | ||||||
Talisman Energy Inc. | 453 | 6,289 | ||||||
Teck Resources Ltd. Class B | 207 | 5,714 | ||||||
TELUS Corp. NVS | 71 | 4,370 | ||||||
Thomson Reuters Corp. | 173 | 4,905 | ||||||
Tim Hortons Inc. | 74 | 3,734 | ||||||
TMX Group Inc. | 3 | 152 | ||||||
Toronto-Dominion Bank (The) | 389 | 31,787 | ||||||
Tourmaline Oil Corp.a | 100 | 2,795 | ||||||
TransAlta Corp. | 114 | 1,720 | ||||||
TransCanada Corp. | 307 | 13,812 | ||||||
Turquoise Hill Resources Ltd.a | 337 | 2,705 | ||||||
Valeant Pharmaceuticals International Inc.a | 128 | 6,546 | ||||||
Vermilion Energy Inc. | 44 | 2,002 |
24 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI WORLD INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Viterra Inc. | 137 | $ | 2,241 | |||||
Yamana Gold Inc. | 329 | 5,621 | ||||||
|
| |||||||
531,756 | ||||||||
DENMARK — 0.52% |
| |||||||
A.P. Moeller-Maersk A/S Class B | 1 | 6,553 | ||||||
Carlsberg A/S Class B | 49 | 4,252 | ||||||
Coloplast A/S Class B | 11 | 2,201 | ||||||
Danske Bank A/Sa | 305 | 5,314 | ||||||
DSV A/S | 105 | 2,290 | ||||||
Novo Nordisk A/S Class B | 177 | 27,936 | ||||||
Novozymes A/S Class B | 117 | 3,252 | ||||||
TDC A/S | 337 | 2,249 | ||||||
William Demant Holding A/Sa | 19 | 1,642 | ||||||
|
| |||||||
55,689 | ||||||||
FINLAND — 0.30% |
| |||||||
Elisa OYJ | 125 | 2,649 | ||||||
Fortum OYJ | 203 | 3,759 | ||||||
Kone OYJ Class B | 70 | 4,293 | ||||||
Metso OYJ | 65 | 2,330 | ||||||
Nokia OYJ | 1,722 | 4,905 | ||||||
Nokian Renkaat OYJ | 52 | 2,051 | ||||||
Sampo OYJ Class A | 187 | 5,377 | ||||||
Stora Enso OYJ Class R | 283 | 1,712 | ||||||
UPM-Kymmene OYJ | 246 | 2,730 | ||||||
Wartsila OYJ ABP | 80 | 2,580 | ||||||
|
| |||||||
32,386 | ||||||||
FRANCE — 3.79% |
| |||||||
Accor SA | 75 | 2,383 | ||||||
Alcatel-Lucenta | 1,113 | 1,270 | ||||||
ALSTOM | 98 | 3,497 | ||||||
ArcelorMittal | 257 | 3,840 | ||||||
Arkema SA | 29 | 2,474 | ||||||
Atos SA | 44 | 2,582 | ||||||
AXA SA | 776 | 11,259 | ||||||
BNP Paribas SA | 424 | 18,468 | ||||||
Bouygues SA | 92 | 2,293 | ||||||
Bureau Veritas SA | 26 | 2,404 | ||||||
Cap Gemini SA | 72 | 2,652 | ||||||
Carrefour SA | 267 | 5,609 | ||||||
Casino Guichard-Perrachon SA | 27 | 2,401 | ||||||
Christian Dior SA | 26 | 3,717 | ||||||
Compagnie de Saint-Gobain | 181 | 6,223 |
Security | Shares | Value | ||||||
Compagnie Generale de | 66 | $ | 1,919 | |||||
Compagnie Generale des Etablissements Michelin Class B | 81 | 5,825 | ||||||
Credit Agricole SAa | 499 | 2,917 | ||||||
Danone SA | 252 | 15,739 | ||||||
Dassault Systemes SA | 29 | 2,822 | ||||||
Edenred SA | 81 | 2,169 | ||||||
Electricite de France SA | 116 | 2,367 | ||||||
Essilor International SA | 87 | 7,610 | ||||||
European Aeronautic Defence and Space Co. NV | 179 | 6,841 | ||||||
Eutelsat Communications SA | 92 | 2,834 | ||||||
France Telecom SA | 826 | 11,448 | ||||||
GDF Suez | 543 | 13,398 | ||||||
Gemalto NV | 36 | 2,859 | ||||||
Groupe Eurotunnel SA Registered | 283 | 2,126 | ||||||
Iliad SA | 11 | 1,747 | ||||||
Klepierre | 53 | 1,714 | ||||||
L’Air Liquide SA | 135 | 15,919 | ||||||
L’Oreal SA | 104 | 12,813 | ||||||
Lafarge SA | 86 | 4,110 | ||||||
Lagardere SCA | 63 | 1,775 | ||||||
Legrand SA | 112 | 3,879 | ||||||
LVMH Moet Hennessy Louis Vuitton SA | 111 | 18,161 | ||||||
Pernod Ricard SA | 94 | 10,151 | ||||||
PPR SA | 35 | 5,479 | ||||||
Publicis Groupe SA | 72 | 3,745 | ||||||
Renault SA | 87 | 4,076 | ||||||
Safran SA | 102 | 3,581 | ||||||
Sanofi | 520 | 42,638 | ||||||
Schneider Electric SA | 229 | 14,493 | ||||||
SCOR SE | 82 | 2,020 | ||||||
SES SA Class A FDR | 141 | 3,636 | ||||||
Societe BIC SA | 15 | 1,618 | ||||||
Societe Generalea | 311 | 8,252 | ||||||
Sodexo | 48 | 3,804 | ||||||
STMicroelectronics NV | 317 | 1,885 | ||||||
Suez Environnement SA | 145 | 1,629 | ||||||
Technip SA | 44 | 4,644 | ||||||
Thales SA | 49 | 1,632 | ||||||
Total SA | 919 | 45,994 | ||||||
Unibail-Rodamco SE | 41 | 8,380 |
SCHEDULESOF INVESTMENTS | 25 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI WORLD INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Vallourec SA | 51 | $ | 2,370 | |||||
Veolia Environnement | 163 | 1,729 | ||||||
Vinci SA | 201 | 8,764 | ||||||
Vivendi SA | 568 | 11,162 | ||||||
Zodiac Aerospace | 16 | 1,529 | ||||||
|
| |||||||
405,275 | ||||||||
GERMANY — 3.17% |
| |||||||
Adidas AG | 94 | 7,371 | ||||||
Allianz SE Registered | 198 | 21,781 | ||||||
BASF SE | 398 | 31,009 | ||||||
Bayer AG Registered | 360 | 27,985 | ||||||
Bayerische Motoren Werke AG | 156 | 11,338 | ||||||
Beiersdorf AG | 47 | 3,377 | ||||||
Brenntag AG | 22 | 2,627 | ||||||
Commerzbank AGa | 1,727 | 2,743 | ||||||
Continental AG | 37 | 3,687 | ||||||
Daimler AG Registered | 395 | 19,418 | ||||||
Deutsche Bank AG Registered | 408 | 14,541 | ||||||
Deutsche Boerse AG | 89 | 4,592 | ||||||
Deutsche Post AG Registered | 375 | 7,301 | ||||||
Deutsche Telekom AG Registered | 1,233 | 14,742 | ||||||
E.ON AG | 787 | 18,139 | ||||||
Fresenius Medical Care AG & Co. KGaA | 92 | 6,648 | ||||||
Fresenius SE & Co. KGaA | 54 | 5,773 | ||||||
GEA Group AG | 89 | 2,356 | ||||||
Hannover Rueckversicherung | 30 | 1,837 | ||||||
HeidelbergCement AG | 65 | 3,291 | ||||||
Henkel AG & Co. KGaA | 98 | 6,094 | ||||||
Infineon Technologies AG | 500 | 3,463 | ||||||
K+S AG Registered | 80 | 3,923 | ||||||
Kabel Deutschland Holding AGa | 43 | 2,856 | ||||||
Lanxess AG | 38 | 2,889 | ||||||
Linde AG | 75 | 11,841 | ||||||
MAN SE | 20 | 1,850 | ||||||
Merck KGaA | 29 | 3,324 | ||||||
METRO AG | 66 | 1,992 | ||||||
Muenchener Rueckversicherungs-Gesellschaft AG Registered | 78 | 11,572 | ||||||
QIAGEN NVa | 120 | 2,162 | ||||||
RWE AG | 230 | 9,667 | ||||||
SAP AG | 400 | 26,425 | ||||||
Siemens AG Registered | 358 | 34,034 |
Security | Shares | Value | ||||||
ThyssenKrupp AG | 188 | $ | 3,754 | |||||
Volkswagen AG | 15 | 2,449 | ||||||
|
| |||||||
338,851 | ||||||||
GREECE — 0.05% |
| |||||||
Coca-Cola Hellenic Bottling Co. SAa | 160 | 2,997 | ||||||
OPAP SA | 284 | 1,983 | ||||||
|
| |||||||
4,980 | ||||||||
HONG KONG — 1.27% |
| |||||||
AIA Group Ltd. | 4,400 | 15,118 | ||||||
ASM Pacific Technology Ltd. | 100 | 1,114 | ||||||
Bank of East Asia Ltd. (The) | 800 | 2,914 | ||||||
BOC Hong Kong (Holdings) Ltd. | 1,500 | 4,748 | ||||||
Cheung Kong (Holdings) Ltd. | 1,000 | 13,602 | ||||||
CLP Holdings Ltd. | 1,000 | 8,335 | ||||||
Galaxy Entertainment Group Ltd.a | 1,000 | 2,843 | ||||||
Hang Lung Properties Ltd. | 1,000 | 3,417 | ||||||
Hang Seng Bank Ltd. | 400 | 5,693 | ||||||
Hong Kong and China Gas Co. Ltd. (The) | 2,400 | 5,656 | ||||||
Hong Kong Exchanges and | 500 | 6,640 | ||||||
Hutchison Whampoa Ltd. | 1,000 | 8,748 | ||||||
Kerry Properties Ltd. | 500 | 2,375 | ||||||
Li & Fung Ltd. | 2,000 | 3,249 | ||||||
Link REIT (The) | 1,000 | 4,461 | ||||||
MTR Corp. Ltd. | 1,000 | 3,584 | ||||||
New World Development Co. Ltd. | 2,000 | 2,486 | ||||||
Power Assets Holdings Ltd. | 500 | 4,052 | ||||||
Sands China Ltd. | 1,200 | 4,239 | ||||||
Sino Land Co. Ltd. | 2,000 | 3,275 | ||||||
SJM Holdings Ltd. | 1,000 | 2,107 | ||||||
Sun Hung Kai Properties Ltd. | 1,000 | 12,970 | ||||||
Swire Pacific Ltd. Class A | 500 | 5,908 | ||||||
Wharf (Holdings) Ltd. (The) | 1,000 | 6,156 | ||||||
Wynn Macau Ltd.b | 800 | 1,836 | ||||||
|
| |||||||
135,526 | ||||||||
IRELAND — 0.10% | ||||||||
CRH PLC | 300 | 5,303 | ||||||
Elan Corp. PLCa | 207 | 2,376 | ||||||
Kerry Group PLC Class A | 57 | 2,737 | ||||||
|
| |||||||
10,416 | ||||||||
ISRAEL — 0.21% |
| |||||||
Bank Hapoalim Ltd. | 784 | 2,412 |
26 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI WORLD INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Israel Chemicals Ltd. | 235 | $ | 2,535 | |||||
Teva Pharmaceutical Industries Ltd. | 449 | 17,909 | ||||||
|
| |||||||
22,856 | ||||||||
ITALY — 0.88% |
| |||||||
Assicurazioni Generali SpA | 538 | 7,690 | ||||||
Atlantia SpA | 177 | 2,492 | ||||||
Banca Monte dei Paschi di Siena SpAa | 4,155 | 1,173 | ||||||
Enel Green Power SpA | 1,515 | 2,496 | ||||||
Enel SpA | 2,979 | 9,838 | ||||||
Eni SpA | 1,052 | 23,365 | ||||||
Fiat Industrial SpA | 394 | 3,976 | ||||||
Fiat SpAa | 425 | 2,321 | ||||||
Intesa Sanpaolo SpA | 4,847 | 7,637 | ||||||
Luxottica Group SpA | 61 | 2,230 | ||||||
Mediaset SpA | 629 | 1,264 | ||||||
Saipem SpA | 121 | 5,758 | ||||||
Snam SpA | 802 | 3,380 | ||||||
Telecom Italia SpA | 4,528 | 4,224 | ||||||
Telecom Italia SpA RNC | 2,528 | 2,006 | ||||||
Tenaris SA | 220 | 4,589 | ||||||
Terna SpA | 688 | 2,395 | ||||||
UniCredit SpAa | 1,820 | 7,222 | ||||||
|
| |||||||
94,056 | ||||||||
JAPAN — 8.24% |
| |||||||
AEON Co. Ltd. | 300 | 3,448 | ||||||
Aisin Seiki Co. Ltd. | 100 | 3,180 | ||||||
All Nippon Airways Co. Ltd.b | 1,000 | 2,209 | ||||||
Asahi Glass Co. Ltd. | 1,000 | 6,054 | ||||||
Asahi Group Holdings Ltd. | 200 | 4,840 | ||||||
Asahi Kasei Corp. | 1,000 | 5,198 | ||||||
Astellas Pharma Inc. | 200 | 9,757 | ||||||
Bank of Yokohama Ltd. (The) | 1,000 | 4,636 | ||||||
Bridgestone Corp. | 300 | 6,954 | ||||||
Brother Industries Ltd. | 100 | 1,013 | ||||||
Canon Inc. | 500 | 16,571 | ||||||
Central Japan Railway Co. | 1 | 8,697 | ||||||
Chubu Electric Power Co. Inc. | 300 | 3,563 | ||||||
Chugai Pharmaceutical Co. Ltd. | 200 | 3,985 | ||||||
Chugoku Electric Power Co. Inc. (The) | 200 | 2,524 | ||||||
Credit Saison Co. Ltd. | 100 | 2,338 | ||||||
Dai-ichi Life Insurance Co. Ltd. (The) | 4 | 4,072 | ||||||
Daiichi Sankyo Co. Ltd. | 300 | 4,943 |
Security | Shares | Value | ||||||
Daikin Industries Ltd. | 100 | $ | 2,663 | |||||
Dainippon Sumitomo Pharma Co. Ltd. | 100 | 1,103 | ||||||
Daiwa Securities Group Inc. | 1,000 | 3,614 | ||||||
Dena Co. Ltd. | 100 | 2,784 | ||||||
Denso Corp. | 200 | 6,667 | ||||||
Dentsu Inc. | 100 | 2,539 | ||||||
East Japan Railway Co. | 200 | 13,384 | ||||||
Eisai Co. Ltd. | 100 | 4,566 | ||||||
Electric Power Development Co. Ltd. | 100 | 2,390 | ||||||
FANUC Corp. | 100 | 16,335 | ||||||
FUJIFILM Holdings Corp. | 200 | 3,318 | ||||||
Fujitsu Ltd. | 1,000 | 4,061 | ||||||
Fukuoka Financial Group Inc. | 1,000 | 3,934 | ||||||
Hakuhodo DY Holdings Inc. | 30 | 1,966 | ||||||
Hankyu Hanshin Holdings Inc. | 1,000 | 5,683 | ||||||
Hitachi Ltd. | 2,000 | 11,469 | ||||||
Hokkaido Electric Power Co. Inc. | 100 | 769 | ||||||
Hokuriku Electric Power Co. | 200 | 2,309 | ||||||
Honda Motor Co. Ltd. | 700 | 22,100 | ||||||
Hoya Corp. | 200 | 4,511 | ||||||
IBIDEN Co. Ltd. | 100 | 1,510 | ||||||
IHI Corp. | 1,000 | 2,146 | ||||||
INPEX Corp. | 1 | 5,683 | ||||||
Isetan Mitsukoshi Holdings Ltd. | 200 | 2,084 | ||||||
Isuzu Motors Ltd. | 1,000 | 5,096 | ||||||
ITOCHU Corp. | 700 | 7,098 | ||||||
Japan Prime Realty Investment Corp. | 1 | 2,807 | ||||||
Japan Retail Fund Investment Corp. | 1 | 1,709 | ||||||
Japan Tobacco Inc. | 400 | 12,061 | ||||||
JFE Holdings Inc. | 200 | 2,524 | ||||||
JSR Corp. | 100 | 1,699 | ||||||
JTEKT Corp. | 200 | 1,566 | ||||||
Jupiter Telecommunications Co. Ltd. | 2 | 2,041 | ||||||
JX Holdings Inc. | 1,100 | 5,690 | ||||||
Kajima Corp. | 1,000 | 2,771 | ||||||
Kansai Electric Power Co. Inc. (The) | 400 | 2,983 | ||||||
Kao Corp. | 300 | 9,057 | ||||||
Kawasaki Heavy Industries Ltd. | 1,000 | 2,120 | ||||||
KDDI Corp. | 1 | 7,152 | ||||||
Kintetsu Corp. | 1,000 | 4,112 | ||||||
Kobe Steel Ltd. | 2,000 | 1,533 | ||||||
Komatsu Ltd. | 400 | 7,867 | ||||||
Konami Corp. | 100 | 2,295 |
SCHEDULESOF INVESTMENTS | 27 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI WORLD INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Konica Minolta Holdings Inc. | 500 | $ | 3,697 | |||||
Kubota Corp. | 1,000 | 9,604 | ||||||
Kuraray Co. Ltd. | 200 | 2,307 | ||||||
Kurita Water Industries Ltd. | 100 | 2,140 | ||||||
Kyocera Corp. | 100 | 8,582 | ||||||
Kyushu Electric Power Co. Inc. | 200 | 1,515 | ||||||
LIXIL Group Corp. | 100 | 2,147 | ||||||
Makita Corp. | 100 | 3,402 | ||||||
Marubeni Corp. | 1,000 | 6,411 | ||||||
Marui Group Co. Ltd. | 200 | 1,464 | ||||||
Mazda Motor Corp.a | 2,000 | 2,401 | ||||||
McDonald’s Holdings Co. (Japan) Ltd. | 100 | 2,835 | ||||||
Medipal Holdings Corp. | 100 | 1,432 | ||||||
Mitsubishi Chemical Holdings Corp. | 500 | 1,935 | ||||||
Mitsubishi Corp. | 600 | 11,027 | ||||||
Mitsubishi Electric Corp. | 1,000 | 8,123 | ||||||
Mitsubishi Estate Co. Ltd. | 1,000 | 17,535 | ||||||
Mitsubishi Heavy Industries Ltd. | 1,000 | 4,138 | ||||||
Mitsubishi Materials Corp. | 1,000 | 2,797 | ||||||
Mitsubishi Motors Corp.a | 3,000 | 2,797 | ||||||
Mitsubishi Tanabe Pharma Corp. | 100 | 1,483 | ||||||
Mitsubishi UFJ Financial Group Inc. | 5,700 | 25,916 | ||||||
Mitsubishi UFJ Lease & Finance Co. Ltd. | 50 | 2,149 | ||||||
Mitsui & Co. Ltd. | 800 | 11,167 | ||||||
Mitsui Chemicals Inc. | 1,000 | 2,031 | ||||||
Mitsui O.S.K. Lines Ltd. | 1,000 | 2,503 | ||||||
Mizuho Financial Group Inc. | 10,200 | 16,414 | ||||||
MS&AD Insurance Group Holdings Inc. | 300 | 4,728 | ||||||
Murata Manufacturing Co. Ltd. | 100 | 4,930 | ||||||
Nabtesco Corp. | 100 | 1,831 | ||||||
Namco Bandai Holdings Inc. | 100 | 1,584 | ||||||
NEC Corp.a | 1,000 | 1,430 | ||||||
Nidec Corp. | 100 | 7,867 | ||||||
Nikon Corp. | 200 | 5,497 | ||||||
Nippon Express Co. Ltd. | 1,000 | 3,921 | ||||||
Nippon Steel Corp. | 3,000 | 5,785 | ||||||
Nippon Telegraph and Telephone Corp. | 200 | 9,234 | ||||||
Nippon Yusen K.K. | 1,000 | 2,018 | ||||||
Nissan Motor Co. Ltd. | 1,100 | 10,255 | ||||||
Nissin Foods Holdings Co. Ltd. | 100 | 3,863 | ||||||
Nitto Denko Corp. | 100 | 4,617 | ||||||
NKSJ Holdings Inc. | 200 | 3,596 | ||||||
NOK Corp. | 100 | 1,673 |
Security | Shares | Value | ||||||
Nomura Holdings Inc. | 1,700 | $ | 5,602 | |||||
Nomura Real Estate Holdings Inc. | 100 | 1,664 | ||||||
Nomura Research Institute Ltd. | 100 | 2,088 | ||||||
NTT Data Corp. | 1 | 2,981 | ||||||
NTT DOCOMO Inc. | 7 | 11,908 | ||||||
Oji Paper Co. Ltd. | 1,000 | 3,129 | ||||||
Olympus Corp.a | 100 | 1,973 | ||||||
Omron Corp. | 100 | 1,951 | ||||||
ORIX Corp. | 50 | 4,623 | ||||||
Osaka Gas Co. Ltd. | 1,000 | 4,368 | ||||||
Otsuka Holdings Co. Ltd. | 200 | 6,100 | ||||||
Panasonic Corp. | 1,000 | 6,794 | ||||||
Rakuten Inc. | 400 | 3,862 | ||||||
Resona Holdings Inc. | 1,000 | 3,895 | ||||||
Rohm Co. Ltd. | 100 | 3,263 | ||||||
Secom Co. Ltd. | 100 | 5,051 | ||||||
Sega Sammy Holdings Inc. | 100 | 2,065 | ||||||
Seven & I Holdings Co. Ltd. | 300 | 9,100 | ||||||
Seven Bank Ltd. | 500 | 1,379 | ||||||
Sharp Corp.b | 1,000 | 2,529 | ||||||
Shikoku Electric Power Co. Inc. | 100 | 1,215 | ||||||
Shin-Etsu Chemical Co. Ltd. | 200 | 10,690 | ||||||
Shionogi & Co. Ltd. | 200 | 2,881 | ||||||
Shiseido Co. Ltd. | 200 | 2,848 | ||||||
Showa Denko K.K. | 1,000 | 1,686 | ||||||
SoftBank Corp. | 400 | 16,296 | ||||||
Sojitz Corp. | 1,100 | 1,475 | ||||||
Sony Corp. | 500 | 5,626 | ||||||
Sony Financial Holdings Inc. | 100 | 1,645 | ||||||
Stanley Electric Co. Ltd. | 100 | 1,478 | ||||||
Sumitomo Chemical Co. Ltd. | 1,000 | 2,605 | ||||||
Sumitomo Corp. | 500 | 6,616 | ||||||
Sumitomo Electric Industries Ltd. | 400 | 4,496 | ||||||
Sumitomo Metal Industries Ltd. | 2,000 | 2,835 | ||||||
Sumitomo Mitsui Financial Group Inc. | 600 | 18,575 | ||||||
Sumitomo Mitsui Trust Holdings Inc. | 2,000 | 5,568 | ||||||
Sumitomo Rubber Industries Inc. | 100 | 1,220 | ||||||
Suzuki Motor Corp. | 200 | 3,647 | ||||||
T&D Holdings Inc. | 300 | 3,034 | ||||||
Taiheiyo Cement Corp. | 1,000 | 2,158 | ||||||
Taisei Corp. | 1,000 | 2,720 | ||||||
Takeda Pharmaceutical Co. Ltd. | 400 | 18,748 | ||||||
TDK Corp. | 100 | 3,811 |
28 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI WORLD INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Teijin Ltd. | 1,000 | $ | 2,197 | |||||
Terumo Corp. | 100 | 4,425 | ||||||
THK Co. Ltd. | 100 | 1,561 | ||||||
Tobu Railway Co. Ltd. | 1,000 | 5,556 | ||||||
Toho Co. Ltd. | 100 | 1,738 | ||||||
Tohoku Electric Power Co. Inc.a | 200 | 1,397 | ||||||
Tokio Marine Holdings Inc. | 300 | 7,180 | ||||||
Tokyo Electric Power Co. Inc.a | 1,200 | 2,008 | ||||||
Tokyo Electron Ltd. | 100 | 4,693 | ||||||
Tokyo Gas Co. Ltd. | 1,000 | 5,517 | ||||||
Tokyu Corp. | 1,000 | 4,917 | ||||||
Toray Industries Inc. | 1,000 | 6,105 | ||||||
Toshiba Corp. | 2,000 | 6,386 | ||||||
Toyo Seikan Kaisha Ltd. | 100 | 1,077 | ||||||
Toyota Industries Corp. | 100 | 2,810 | ||||||
Toyota Motor Corp. | 1,200 | 47,433 | ||||||
Toyota Tsusho Corp. | 100 | 2,041 | ||||||
Trend Micro Inc. | 100 | 2,771 | ||||||
Ube Industries Ltd. | 1,000 | 2,184 | ||||||
Unicharm Corp. | 100 | 5,817 | ||||||
USS Co. Ltd. | 20 | 2,148 | ||||||
West Japan Railway Co. | 100 | 4,374 | ||||||
Yahoo! Japan Corp. | 8 | 2,751 | ||||||
Yakult Honsha Co. Ltd. | 100 | 4,291 | ||||||
Yamada Denki Co. Ltd. | 70 | 3,370 | ||||||
Yamato Holdings Co. Ltd. | 200 | 3,321 | ||||||
Yokogawa Electric Corp. | 200 | 2,332 | ||||||
|
| |||||||
881,130 | ||||||||
NETHERLANDS — 1.02% | ||||||||
AEGON NV | 766 | 3,942 | ||||||
Akzo Nobel NV | 104 | 6,007 | ||||||
ASML Holding NV | 180 | 10,218 | ||||||
Core Laboratories NV | 21 | 2,566 | ||||||
Corio NV | 51 | 2,176 | ||||||
DE Master Blenders 1753 NVa | 268 | 3,163 | ||||||
Fugro NV CVA | 31 | 1,890 | ||||||
Heineken Holding NV | 50 | 2,319 | ||||||
Heineken NV | 101 | 5,611 | ||||||
ING Groep NV CVAa | 1,432 | 10,978 | ||||||
Koninklijke Ahold NV | 458 | 5,675 | ||||||
Koninklijke DSM NV | 66 | 3,102 | ||||||
Koninklijke KPN NV | 445 | 3,826 |
Security | Shares | Value | ||||||
Koninklijke Philips Electronics NV | 441 | $ | 10,162 | |||||
Randstad Holding NV | 59 | 1,922 | ||||||
Reed Elsevier NV | 323 | 4,226 | ||||||
Royal Vopak NV | 31 | 1,993 | ||||||
TNT Express NV | 145 | 1,636 | ||||||
Unilever NV CVA | 697 | 24,363 | ||||||
Wolters Kluwer NV | 160 | 2,884 | ||||||
|
| |||||||
108,659 | ||||||||
NEW ZEALAND — 0.04% | ||||||||
Fletcher Building Ltd. | 528 | 2,821 | ||||||
Telecom Corp. of New Zealand Ltd. | 886 | 1,751 | ||||||
|
| |||||||
4,572 | ||||||||
NORWAY — 0.40% | ||||||||
DNB ASA | 464 | 5,335 | ||||||
Norsk Hydro ASA | 557 | 2,388 | ||||||
Orkla ASA | 390 | 2,883 | ||||||
Seadrill Ltd. | 154 | 6,335 | ||||||
Statoil ASA | 484 | 12,433 | ||||||
Subsea 7 SA | 132 | 3,035 | ||||||
Telenor ASA | 328 | 5,997 | ||||||
Yara International ASA | 84 | 4,113 | ||||||
|
| |||||||
42,519 | ||||||||
PORTUGAL — 0.08% | ||||||||
Energias de Portugal SA | 944 | 2,306 | ||||||
Galp Energia SGPS SA Class B | 121 | 1,822 | ||||||
Jeronimo Martins SGPS SA | 107 | 1,791 | ||||||
Portugal Telecom SGPS SA Registered | 509 | 2,489 | ||||||
|
| |||||||
8,408 | ||||||||
SINGAPORE — 0.72% | ||||||||
Ascendas REIT | 1,000 | 1,892 | ||||||
CapitaLand Ltd. | 1,000 | 2,413 | ||||||
CapitaMall Trust Management Ltd. | 2,000 | 3,174 | ||||||
ComfortDelGro Corp. Ltd. | 1,000 | 1,343 | ||||||
DBS Group Holdings Ltd. | 1,000 | 11,584 | ||||||
Genting Singapore PLC | 3,000 | 3,283 | ||||||
Global Logistic Properties Ltd. | 1,000 | 1,900 | ||||||
Golden Agri-Resources Ltd. | 4,000 | 2,277 | ||||||
Hutchison Port Holdings Trust | 4,000 | 2,800 | ||||||
Keppel Corp. Ltd. | 1,000 | 8,971 | ||||||
Noble Group Ltd. | 2,000 | 1,924 | ||||||
Olam International Ltd.b | 1,000 | 1,539 | ||||||
Oversea-Chinese Banking Corp. Ltd. | 1,000 | 7,447 |
SCHEDULESOF INVESTMENTS | 29 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI WORLD INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
SembCorp Industries Ltd. | 1,000 | $ | 4,529 | |||||
Singapore Exchange Ltd. | 1,000 | 5,644 | ||||||
Singapore Technologies Engineering Ltd. | 1,000 | 2,734 | ||||||
Singapore Telecommunications Ltd. | 4,000 | 10,871 | ||||||
Wilmar International Ltd.b | 1,000 | 2,509 | ||||||
|
| |||||||
76,834 | ||||||||
SPAIN — 1.12% |
| |||||||
Abertis Infraestructuras SA | 199 | 2,708 | ||||||
Acciona SA | 20 | 937 | ||||||
Actividades de Construcciones y Servicios SA | 8 | 159 | ||||||
Amadeus IT Holding SA Class A | 145 | 3,246 | ||||||
Banco Bilbao Vizcaya Argentaria SA | 2,116 | 16,198 | ||||||
Banco de Sabadell SA | 84 | 244 | ||||||
Banco Santander SA | 4,371 | 31,240 | ||||||
CaixaBank SA | 660 | 2,522 | ||||||
Distribuidora Internacional de Alimentacion SA | 504 | 2,682 | ||||||
Enagas SA | 144 | 2,680 | ||||||
Ferrovial SA | 204 | 2,413 | ||||||
Gas Natural SDG SA | 191 | 2,361 | ||||||
Grifols SAa | 70 | 1,976 | ||||||
Iberdrola SA | 1,309 | 5,204 | ||||||
Industria de Diseno Textil SA | 97 | 10,810 | ||||||
International Consolidated Airlines Group SAa | 908 | 2,029 | ||||||
Red Electrica Corporacion SA | 54 | 2,343 | ||||||
Repsol SA | 368 | 6,789 | ||||||
Telefonica SA | 1,816 | 22,982 | ||||||
Zardoya Otis SA | 6 | 70 | ||||||
|
| |||||||
119,593 | ||||||||
SWEDEN — 1.27% |
| |||||||
Alfa Laval AB | 161 | 2,757 | ||||||
Assa Abloy AB Class B | 149 | 4,557 | ||||||
Atlas Copco AB Class A | 299 | 6,692 | ||||||
Atlas Copco AB Class B | 163 | 3,230 | ||||||
Boliden AB | 155 | 2,278 | ||||||
Electrolux AB Class B | 112 | 2,713 | ||||||
Elekta AB Class B | 41 | 2,090 | ||||||
Getinge AB Class B | 94 | 2,801 | ||||||
Hennes & Mauritz AB Class B | 416 | 15,053 | ||||||
Hexagon AB Class B | 113 | 2,270 |
Security | Shares | Value | ||||||
Investment AB Kinnevik Class B | 105 | $ | 2,123 | |||||
Investor AB Class B | 207 | 4,289 | ||||||
Lundin Petroleum ABa | 98 | 2,212 | ||||||
Millicom International Cellular SA SDR | 30 | 2,582 | ||||||
Nordea Bank AB | 1,163 | 10,758 | ||||||
Sandvik AB | 450 | 6,021 | ||||||
Scania AB Class B | 146 | 2,513 | ||||||
Skandinaviska Enskilda Banken AB Class A | 653 | 5,000 | ||||||
Skanska AB Class B | 184 | 2,834 | ||||||
SKF AB Class B | 180 | 3,746 | ||||||
Svenska Cellulosa AB Class B | 252 | 4,506 | ||||||
Svenska Handelsbanken AB Class A | 215 | 7,497 | ||||||
Swedbank AB Class A | 363 | 6,354 | ||||||
Swedish Match AB | 95 | 3,948 | ||||||
Tele2 AB Class B | 151 | 2,657 | ||||||
Telefonaktiebolaget LM Ericsson Class B | 1,330 | 12,453 | ||||||
TeliaSonera AB | 965 | 6,670 | ||||||
Volvo AB Class B | 445 | 5,642 | ||||||
|
| |||||||
136,246 | ||||||||
SWITZERLAND — 3.54% |
| |||||||
ABB Ltd. Registereda | 973 | 16,966 | ||||||
Actelion Ltd. Registereda | 54 | 2,558 | ||||||
Adecco SA Registereda | 66 | 3,000 | ||||||
Aryzta AGa | 64 | 3,154 | ||||||
Baloise Holding AG Registered | 35 | 2,581 | ||||||
Compagnie Financiere Richemont SA Class A Bearer | 231 | 14,198 | ||||||
Credit Suisse Group AG Registered | 522 | 10,105 | ||||||
Geberit AG Registereda | 19 | 4,015 | ||||||
Givaudan SA Registereda | 4 | 3,783 | ||||||
Holcim Ltd. Registereda | 105 | 6,454 | ||||||
Julius Baer Group Ltd.a | 101 | 3,326 | ||||||
Kuehne & Nagel International | 28 | 3,195 | ||||||
Lindt & Spruengli AG | 1 | 3,123 | ||||||
Nestle SA Registered | 1,429 | 89,031 | ||||||
Novartis AG Registered | 995 | 58,754 | ||||||
Partners Group Holding AG | 13 | 2,508 | ||||||
Roche Holding AG Genusschein | 304 | 55,464 | ||||||
Schindler Holding AG | 17 | 2,008 |
30 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI WORLD INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Schindler Holding AG Registered | 18 | $ | 2,129 | |||||
SGS SA Registered | 3 | 6,065 | ||||||
Sika AG Bearer | 1 | 1,937 | ||||||
Sonova Holding AG Registereda | 23 | 2,137 | ||||||
Sulzer AG Registered | 13 | 1,762 | ||||||
Swatch Group AG (The) Bearer | 15 | 6,154 | ||||||
Swiss Life Holding AG Registereda | 26 | 2,959 | ||||||
Swiss Prime Site AG Registereda | 29 | 2,391 | ||||||
Swiss Re AGa | 155 | 9,738 | ||||||
Swisscom AG Registered | 11 | 4,427 | ||||||
Syngenta AG Registered | 41 | 13,855 | ||||||
Transocean Ltd. | 156 | 7,566 | ||||||
UBS AG Registereda | 1,604 | 17,983 | ||||||
Zurich Insurance Group AGa | 64 | 15,419 | ||||||
|
| |||||||
378,745 | ||||||||
UNITED KINGDOM — 9.67% | ||||||||
3i Group PLC | 512 | 1,673 | ||||||
Aberdeen Asset Management PLC | 528 | 2,337 | ||||||
Admiral Group PLC | 91 | 1,714 | ||||||
Aggreko PLC | 118 | 4,423 | ||||||
AMEC PLC | 148 | 2,607 | ||||||
Anglo American PLC | 585 | 16,261 | ||||||
Antofagasta PLC | 188 | 3,306 | ||||||
Aon PLC | 133 | 6,911 | ||||||
ARM Holdings PLC | 606 | 5,525 | ||||||
Associated British Foods PLC | 161 | 3,386 | ||||||
AstraZeneca PLC | 547 | 25,513 | ||||||
Aviva PLC | 1,283 | 6,645 | ||||||
Babcock International Group PLC | 163 | 2,426 | ||||||
BAE Systems PLC | 1,401 | 7,088 | ||||||
Balfour Beatty PLC | 343 | 1,528 | ||||||
Barclays PLC | 5,058 | 14,722 | ||||||
BG Group PLC | 1,472 | 30,114 | ||||||
BHP Billiton PLC | 922 | 26,887 | ||||||
BP PLC | 8,197 | 57,463 | ||||||
British American Tobacco PLC | 863 | 45,255 | ||||||
British Land Co. PLC | 392 | 3,359 | ||||||
British Sky Broadcasting Group PLC | 493 | 5,959 | ||||||
BT Group PLC | 3,355 | 11,596 | ||||||
Bunzl PLC | 145 | 2,589 | ||||||
Burberry Group PLC | 194 | 4,169 | ||||||
Capita PLC | 295 | 3,383 | ||||||
Capital Shopping Centres Group PLC | 468 | 2,511 |
Security | Shares | Value | ||||||
Carnival PLC | 85 | $ | 2,915 | |||||
Centrica PLC | 2,199 | 11,411 | ||||||
Cobham PLC | 496 | 1,728 | ||||||
Compass Group PLC | 839 | 9,448 | ||||||
Croda International PLC | 59 | 2,208 | ||||||
Delphi Automotive PLCa | 136 | 4,119 | ||||||
Diageo PLC | 1,072 | 29,372 | ||||||
Ensco PLC Class A | 101 | 5,794 | ||||||
Experian PLC | 437 | 6,969 | ||||||
Fresnillo PLC | 84 | 2,083 | ||||||
G4S PLC | 639 | 2,568 | ||||||
GKN PLC | 724 | 2,455 | ||||||
GlaxoSmithKline PLC | 2,163 | 48,957 | ||||||
Glencore International PLC | 1,658 | 10,140 | ||||||
Hammerson PLC | 340 | 2,468 | ||||||
HSBC Holdings PLC | 7,743 | 67,286 | ||||||
ICAP PLC | 276 | 1,393 | ||||||
IMI PLC | 151 | 2,063 | ||||||
Imperial Tobacco Group PLC | 429 | 16,735 | ||||||
Inmarsat PLC | 219 | 1,991 | ||||||
InterContinental Hotels Group PLC | 135 | 3,442 | ||||||
Intertek Group PLC | 70 | 3,130 | ||||||
Invensys PLC | 388 | 1,488 | ||||||
Investec PLC | 344 | 2,051 | ||||||
ITV PLC | 1,746 | 2,310 | ||||||
J Sainsbury PLC | 553 | 2,878 | ||||||
Johnson Matthey PLC | 91 | 3,470 | ||||||
Kazakhmys PLC | 187 | 1,761 | ||||||
Kingfisher PLC | 1,079 | 4,723 | ||||||
Land Securities Group PLC | 345 | 4,335 | ||||||
Legal & General Group PLC | 2,536 | 5,156 | ||||||
Lloyds Banking Group PLCa | 18,170 | 9,613 | ||||||
London Stock Exchange Group PLC | 122 | 1,925 | ||||||
Marks & Spencer Group PLC | 748 | 4,251 | ||||||
Meggitt PLC | 363 | 2,279 | ||||||
National Grid PLC | 1,489 | 16,165 | ||||||
Next PLC | 75 | 4,259 | ||||||
Old Mutual PLC | 2,083 | 5,505 | ||||||
Pearson PLC | 358 | 6,795 | ||||||
Petrofac Ltd. | 115 | 2,744 | ||||||
Prudential PLC | 1,089 | 13,613 | ||||||
Randgold Resources Ltd. | 39 | 3,915 | ||||||
Reckitt Benckiser Group PLC | 281 | 15,889 |
SCHEDULESOF INVESTMENTS | 31 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI WORLD INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Reed Elsevier PLC | 557 | $ | 5,224 | |||||
Resolution Ltd. | 658 | 2,255 | ||||||
Rexam PLC | 379 | 2,551 | ||||||
Rio Tinto PLC | 588 | 25,548 | ||||||
Rolls-Royce Holdings PLCa | 799 | 10,419 | ||||||
Rowan Companies PLCa | 58 | 2,040 | ||||||
Royal Bank of Scotland Group PLCa | 945 | 3,397 | ||||||
Royal Dutch Shell PLC Class A | 1,650 | 57,762 | ||||||
Royal Dutch Shell PLC Class B | 1,084 | 39,110 | ||||||
RSA Insurance Group PLC | 1,595 | 2,888 | ||||||
SABMiller PLC | 410 | 18,101 | ||||||
Sage Group PLC (The) | 613 | 2,884 | ||||||
SEGRO PLC | 640 | 2,353 | ||||||
Serco Group PLC | 241 | 2,153 | ||||||
Severn Trent PLC | 103 | 2,832 | ||||||
Shire PLC | 246 | 7,486 | ||||||
Smith & Nephew PLC | 392 | 4,153 | ||||||
Smiths Group PLC | 181 | 3,004 | ||||||
SSE PLC | 394 | 8,561 | ||||||
Standard Chartered PLC | 1,033 | 22,831 | ||||||
Standard Life PLC | 1,027 | 4,328 | ||||||
Tate & Lyle PLC | 221 | 2,303 | ||||||
Tesco PLC | 3,481 | 18,611 | ||||||
Tullow Oil PLC | 392 | 8,487 | ||||||
Unilever PLC | 550 | 19,778 | ||||||
United Utilities Group PLC | 294 | 3,311 | ||||||
Vodafone Group PLC | 21,411 | 61,725 | ||||||
Weir Group PLC (The) | 97 | 2,516 | ||||||
Whitbread PLC | 84 | 2,842 | ||||||
Wm Morrison Supermarkets PLC | 1,049 | 4,665 | ||||||
Wolseley PLC | 124 | 5,007 | ||||||
WPP PLC | 558 | 7,223 | ||||||
Xstrata PLC | 914 | 13,824 | ||||||
|
| |||||||
1,033,322 | ||||||||
UNITED STATES — 53.78% |
| |||||||
3M Co. | 282 | 26,113 | ||||||
Abbott Laboratories | 689 | 45,157 | ||||||
Abercrombie & Fitch Co. Class A | 42 | 1,512 | ||||||
Accenture PLC Class A | 280 | 17,248 | ||||||
ACE Ltd. | 142 | 10,470 | ||||||
Activision Blizzard Inc. | 196 | 2,305 | ||||||
Adobe Systems Inc.a | 215 | 6,723 | ||||||
Advance Auto Parts Inc. | 34 | 2,418 |
Security | Shares | Value | ||||||
Advanced Micro Devices Inc.a | 281 | $ | 1,045 | |||||
AES Corp. (The)a | 288 | 3,280 | ||||||
Aetna Inc. | 152 | 5,838 | ||||||
Affiliated Managers Group Inc.a | 25 | 2,940 | ||||||
Aflac Inc. | 204 | 9,421 | ||||||
AGCO Corp.a | 46 | 1,936 | ||||||
Agilent Technologies Inc. | 154 | 5,723 | ||||||
Air Products and Chemicals Inc. | 93 | 7,680 | ||||||
Airgas Inc. | 30 | 2,492 | ||||||
Akamai Technologies Inc.a | 82 | 3,076 | ||||||
Albemarle Corp. | 42 | 2,299 | ||||||
Alcoa Inc. | 512 | 4,383 | ||||||
Alexion Pharmaceuticals Inc.a | 90 | 9,649 | ||||||
Alleghany Corp.a | 6 | 2,023 | ||||||
Allegheny Technologies Inc. | 53 | 1,571 | ||||||
Allergan Inc. | 132 | 11,369 | ||||||
Alliance Data Systems Corp.a | 23 | 3,166 | ||||||
Alliant Energy Corp. | 53 | 2,336 | ||||||
Allstate Corp. (The) | 206 | 7,680 | ||||||
Altera Corp. | 144 | 5,376 | ||||||
Altria Group Inc. | 901 | 30,598 | ||||||
Amazon.com Inc.a | 158 | 39,220 | ||||||
Ameren Corp. | 105 | 3,436 | ||||||
American Capital Agency Corp. | 116 | 4,041 | ||||||
American Electric Power Co. Inc. | 205 | 8,813 | ||||||
American Express Co. | 449 | 26,177 | ||||||
American International Group Inc.a | 259 | 8,891 | ||||||
American Tower Corp. | 184 | 12,954 | ||||||
American Water Works Co. Inc. | 80 | 2,950 | ||||||
Ameriprise Financial Inc. | 100 | 5,491 | ||||||
AmerisourceBergen Corp. | 113 | 4,353 | ||||||
AMETEK Inc. | 108 | 3,705 | ||||||
Amgen Inc. | 340 | 28,533 | ||||||
Amphenol Corp. Class A | 74 | 4,504 | ||||||
Anadarko Petroleum Corp. | 216 | 14,962 | ||||||
Analog Devices Inc. | 132 | 5,246 | ||||||
Annaly Capital Management Inc. | 401 | 6,941 | ||||||
ANSYS Inc.a | 44 | 3,067 | ||||||
Apache Corp. | 167 | 14,320 | ||||||
Apollo Group Inc. Class Aa,b | 54 | 1,450 | ||||||
Apple Inc. | 406 | 270,087 | ||||||
Applied Materials Inc. | 562 | 6,570 | ||||||
Arch Capital Group Ltd.a | 61 | 2,435 |
32 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI WORLD INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Archer-Daniels-Midland Co. | 290 | $ | 7,757 | |||||
Arrow Electronics Inc.a | 55 | 1,994 | ||||||
Assurant Inc. | 43 | 1,516 | ||||||
AT&T Inc. | 2,556 | 93,652 | ||||||
Autodesk Inc.a | 103 | 3,198 | ||||||
Autoliv Inc. | 43 | 2,549 | ||||||
Automatic Data Processing Inc. | 212 | 12,313 | ||||||
AutoZone Inc.a | 16 | 5,786 | ||||||
Avago Technologies Ltd. | 102 | 3,730 | ||||||
AvalonBay Communities Inc. | 42 | 5,944 | ||||||
Avery Dennison Corp. | 88 | 2,748 | ||||||
Avnet Inc.a | 70 | 2,255 | ||||||
Avon Products Inc. | 195 | 3,013 | ||||||
Axis Capital Holdings Ltd. | 55 | 1,874 | ||||||
Baker Hughes Inc. | 193 | 8,801 | ||||||
Ball Corp. | 67 | 2,825 | ||||||
Bank of America Corp. | 4,641 | 37,082 | ||||||
Bank of New York Mellon Corp. (The) | 524 | 11,811 | ||||||
Baxter International Inc. | 241 | 14,142 | ||||||
BB&T Corp. | 300 | 9,462 | ||||||
Beam Inc. | 64 | 3,735 | ||||||
Becton, Dickinson and Co. | 92 | 6,990 | ||||||
Bed Bath & Beyond Inc.a | 107 | 7,187 | ||||||
Berkshire Hathaway Inc. Class Ba | 386 | 32,555 | ||||||
Best Buy Co. Inc. | 139 | 2,466 | ||||||
Biogen Idec Inc.a | 98 | 14,366 | ||||||
BlackRock Inc.c | 58 | 10,229 | ||||||
BMC Software Inc.a | 74 | 3,064 | ||||||
Boeing Co. (The) | 305 | 21,777 | ||||||
BorgWarner Inc.a | 49 | 3,370 | ||||||
Boston Properties Inc. | 66 | 7,401 | ||||||
Boston Scientific Corp.a | 639 | 3,451 | ||||||
Bristol-Myers Squibb Co. | 718 | 23,701 | ||||||
Broadcom Corp. Class Aa | 214 | 7,603 | ||||||
Brown-Forman Corp. Class B NVS | 55 | 3,525 | ||||||
Bunge Ltd. | 67 | 4,265 | ||||||
C.H. Robinson Worldwide Inc. | 74 | 4,189 | ||||||
C.R. Bard Inc. | 35 | 3,434 | ||||||
CA Inc. | 147 | 3,826 | ||||||
Cabot Oil & Gas Corp. | 91 | 3,768 | ||||||
Calpine Corp.a | 140 | 2,457 | ||||||
Cameron International Corp.a,b | 109 | 5,963 | ||||||
Campbell Soup Co. | 92 | 3,233 |
Security | Shares | Value | ||||||
Capital One Financial Corp. | 214 | $ | 12,097 | |||||
Cardinal Health Inc. | 150 | 5,932 | ||||||
CareFusion Corp.a | 104 | 2,732 | ||||||
CarMax Inc.a,b | 107 | 3,273 | ||||||
Carnival Corp. | 199 | 6,901 | ||||||
Caterpillar Inc. | 280 | 23,892 | ||||||
CBRE Group Inc. Class Aa | 148 | 2,562 | ||||||
CBS Corp. Class B NVS | 263 | 9,557 | ||||||
Celanese Corp. Series A | 74 | 2,831 | ||||||
Celgene Corp.a | 191 | 13,760 | ||||||
CenterPoint Energy Inc. | 172 | 3,507 | ||||||
CenturyLink Inc. | 269 | 11,368 | ||||||
Cerner Corp.a | 62 | 4,535 | ||||||
CF Industries Holdings Inc. | 28 | 5,796 | ||||||
Charles Schwab Corp. (The) | 472 | 6,367 | ||||||
Charter Communications Inc. Class Aa | 20 | 1,556 | ||||||
Chesapeake Energy Corp. | 291 | 5,631 | ||||||
Chevron Corp. | 854 | 95,785 | ||||||
Chipotle Mexican Grill Inc.a | 14 | 4,041 | ||||||
Chubb Corp. (The) | 113 | 8,350 | ||||||
Church & Dwight Co. Inc. | 63 | 3,449 | ||||||
Cigna Corp. | 125 | 5,721 | ||||||
Cimarex Energy Co. | 40 | 2,288 | ||||||
Cincinnati Financial Corp. | 64 | 2,474 | ||||||
Cintas Corp. | 55 | 2,223 | ||||||
Cisco Systems Inc. | 2,336 | 44,571 | ||||||
CIT Group Inc.a | 90 | 3,398 | ||||||
Citigroup Inc. | 1,270 | 37,732 | ||||||
Citrix Systems Inc.a | 82 | 6,371 | ||||||
Cliffs Natural Resources Inc. | 67 | 2,401 | ||||||
Clorox Co. (The) | 55 | 4,001 | ||||||
CME Group Inc. | 135 | 7,411 | ||||||
CMS Energy Corp. | 110 | 2,538 | ||||||
Coach Inc. | 126 | 7,324 | ||||||
Cobalt International Energy Inc.a | 81 | 1,840 | ||||||
Coca-Cola Co. (The) | 1,783 | 66,684 | ||||||
Coca-Cola Enterprises Inc. | 139 | 4,105 | ||||||
Cognizant Technology Solutions Corp. Class Aa | 134 | 8,614 | ||||||
Colgate-Palmolive Co. | 205 | 21,794 | ||||||
Comcast Corp. Class A | 943 | 31,619 | ||||||
Comcast Corp. Class A Special NVS | 215 | 7,067 | ||||||
Comerica Inc. | 92 | 2,825 |
SCHEDULESOF INVESTMENTS | 33 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI WORLD INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Computer Sciences Corp. | 75 | $ | 2,416 | |||||
ConAgra Foods Inc. | 187 | 4,696 | ||||||
Concho Resources Inc.a | 44 | 3,949 | ||||||
ConocoPhillips | 516 | 29,304 | ||||||
CONSOL Energy Inc. | 104 | 3,141 | ||||||
Consolidated Edison Inc. | 106 | 6,426 | ||||||
Constellation Brands Inc. Class Aa | 80 | 2,635 | ||||||
Continental Resources Inc.a | 21 | 1,555 | ||||||
Cooper Industries PLC | 69 | 5,047 | ||||||
Corning Inc. | 665 | 7,973 | ||||||
Costco Wholesale Corp. | 198 | 19,378 | ||||||
Coventry Health Care Inc. | 64 | 2,664 | ||||||
Covidien PLC | 206 | 11,546 | ||||||
Cree Inc.a,b | 60 | 1,692 | ||||||
Crown Castle International Corp.a | 125 | 7,932 | ||||||
Crown Holdings Inc.a | 69 | 2,501 | ||||||
CSX Corp. | 456 | 10,242 | ||||||
Cummins Inc. | 80 | 7,769 | ||||||
CVS Caremark Corp. | 558 | 25,417 | ||||||
D.R. Horton Inc. | 125 | 2,374 | ||||||
Danaher Corp. | 252 | 13,500 | ||||||
Darden Restaurants Inc. | 60 | 3,117 | ||||||
DaVita Inc.a | 41 | 3,988 | ||||||
Deere & Co. | 166 | 12,468 | ||||||
Dell Inc.a | 666 | 7,053 | ||||||
Denbury Resources Inc.a | 177 | 2,742 | ||||||
DENTSPLY International Inc. | 67 | 2,430 | ||||||
Devon Energy Corp. | 166 | 9,600 | ||||||
Diamond Offshore Drilling Inc. | 32 | 2,145 | ||||||
Dick’s Sporting Goods Inc. | 45 | 2,239 | ||||||
Digital Realty Trust Inc. | 53 | 3,949 | ||||||
DIRECTVa | 294 | 15,314 | ||||||
Discover Financial Services | 223 | 8,637 | ||||||
Discovery Communications Inc. Series Aa | 59 | 3,236 | ||||||
Discovery Communications Inc. Series C NVSa | 51 | 2,642 | ||||||
DISH Network Corp. Class A | 92 | 2,943 | ||||||
Dollar General Corp.a | 96 | 4,903 | ||||||
Dollar Tree Inc.a | 106 | 5,106 | ||||||
Dominion Resources Inc. | 241 | 12,648 | ||||||
Dover Corp. | 83 | 4,798 | ||||||
Dow Chemical Co. (The) | 512 | 15,007 | ||||||
Dr Pepper Snapple Group Inc. | 96 | 4,302 |
Security | Shares | Value | ||||||
DTE Energy Co. | 74 | $ | 4,322 | |||||
Duke Energy Corp. | 298 | 19,304 | ||||||
Duke Realty Corp. | 124 | 1,798 | ||||||
Dun & Bradstreet Corp. (The) | 25 | 2,024 | ||||||
E.I. du Pont de Nemours and Co. | 399 | 19,850 | ||||||
Eastman Chemical Co. | 68 | 3,758 | ||||||
Eaton Corp. | 142 | 6,350 | ||||||
Eaton Vance Corp. | 94 | 2,546 | ||||||
eBay Inc.a | 502 | 23,830 | ||||||
Ecolab Inc. | 124 | 7,940 | ||||||
Edison International | 130 | 5,693 | ||||||
Edwards Lifesciences Corp.a | 50 | 5,105 | ||||||
Electronic Arts Inc.a | 159 | 2,119 | ||||||
Eli Lilly and Co. | 443 | 19,895 | ||||||
EMC Corp.a | 890 | 23,398 | ||||||
Emerson Electric Co. | 319 | 16,180 | ||||||
Energen Corp. | 36 | 1,838 | ||||||
Energizer Holdings Inc. | 31 | 2,136 | ||||||
Entergy Corp. | 77 | 5,242 | ||||||
EOG Resources Inc. | 117 | 12,671 | ||||||
EQT Corp. | 66 | 3,561 | ||||||
Equifax Inc. | 56 | 2,564 | ||||||
Equinix Inc.a | 21 | 4,151 | ||||||
Equity Residential | 131 | 7,912 | ||||||
Estee Lauder Companies Inc. (The) Class A | 103 | 6,175 | ||||||
Everest Re Group Ltd. | 23 | 2,384 | ||||||
Exelon Corp. | 361 | 13,166 | ||||||
Expedia Inc. | 43 | 2,208 | ||||||
Expeditors International of | 97 | 3,551 | ||||||
Express Scripts Holding Co.a | 345 | 21,604 | ||||||
Exxon Mobil Corp. | 2,054 | 179,314 | ||||||
F5 Networks Inc.a | 36 | 3,510 | ||||||
Facebook Inc. Class Aa | 195 | 3,526 | ||||||
Family Dollar Stores Inc. | 46 | 2,927 | ||||||
Fastenal Co. | 122 | 5,257 | ||||||
Federal Realty Investment Trust | 30 | 3,237 | ||||||
FedEx Corp. | 129 | 11,304 | ||||||
Fidelity National Financial Inc. Class A | 83 | 1,564 | ||||||
Fidelity National Information Services Inc. | 104 | 3,276 | ||||||
Fifth Third Bancorp | 396 | 5,995 | ||||||
First Republic Bank | 46 | 1,504 |
34 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI WORLD INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
FirstEnergy Corp. | 177 | $ | 7,735 | |||||
Fiserv Inc.a | 62 | 4,421 | ||||||
Flextronics International Ltd.a | 321 | 2,160 | ||||||
FLIR Systems Inc. | 81 | 1,604 | ||||||
Flowserve Corp. | 26 | 3,319 | ||||||
Fluor Corp. | 78 | 4,017 | ||||||
FMC Corp. | 63 | 3,422 | ||||||
FMC Technologies Inc.a | 107 | 5,012 | ||||||
Ford Motor Co. | 1,525 | 14,243 | ||||||
Forest Laboratories Inc.a | 118 | 4,093 | ||||||
Fossil Inc.a | 24 | 2,039 | ||||||
Franklin Resources Inc. | 66 | 7,748 | ||||||
Freeport-McMoRan Copper & Gold Inc. | 420 | 15,166 | ||||||
Frontier Communications Corp.b | 476 | 2,199 | ||||||
Gap Inc. (The) | 142 | 5,086 | ||||||
Garmin Ltd. | 54 | 2,179 | ||||||
General Dynamics Corp. | 131 | 8,582 | ||||||
General Electric Co. | 4,566 | 94,562 | ||||||
General Growth Properties Inc. | 189 | 3,890 | ||||||
General Mills Inc. | 254 | 9,990 | ||||||
General Motors Co.a | 340 | 7,259 | ||||||
Genuine Parts Co. | 73 | 4,611 | ||||||
Gilead Sciences Inc.a | 328 | 18,922 | ||||||
Goldman Sachs Group Inc. (The) | 204 | 21,567 | ||||||
Google Inc. Class Aa | 112 | 76,730 | ||||||
Green Mountain Coffee Roasters Inc.a,b | 60 | 1,459 | ||||||
H&R Block Inc. | 139 | 2,302 | ||||||
H.J. Heinz Co. | 141 | 7,857 | ||||||
Halliburton Co. | 401 | 13,137 | ||||||
Harley-Davidson Inc. | 100 | 4,196 | ||||||
Harris Corp. | 58 | 2,728 | ||||||
Hartford Financial Services Group | 189 | 3,389 | ||||||
Hasbro Inc. | 57 | 2,138 | ||||||
HCA Holdings Inc. | 77 | 2,198 | ||||||
HCP Inc.b | 177 | 8,117 | ||||||
Health Care REIT Inc. | 92 | 5,376 | ||||||
Helmerich & Payne Inc. | 51 | 2,328 | ||||||
Henry Schein Inc.a | 41 | 3,149 | ||||||
Herbalife Ltd. | 52 | 2,516 | ||||||
Hershey Co. (The) | 68 | 4,884 | ||||||
Hertz Global Holdings Inc.a | 126 | 1,787 | ||||||
Hess Corp. | 138 | 6,973 |
Security | Shares | Value | ||||||
Hewlett-Packard Co. | 862 | $ | 14,551 | |||||
HollyFrontier Corp. | 86 | 3,465 | ||||||
Hologic Inc.a | 120 | 2,356 | ||||||
Home Depot Inc. (The) | 685 | 38,874 | ||||||
Honeywell International Inc. | 316 | 18,470 | ||||||
Hormel Foods Corp. | 76 | 2,183 | ||||||
Hospira Inc.a | 77 | 2,586 | ||||||
Host Hotels & Resorts Inc.b | 316 | 4,835 | ||||||
Humana Inc. | 72 | 5,046 | ||||||
IHS Inc. Class Aa | 26 | 2,965 | ||||||
Illinois Tool Works Inc. | 186 | 11,028 | ||||||
Illumina Inc.a | 55 | 2,314 | ||||||
Ingersoll-Rand PLC | 131 | 6,126 | ||||||
Integrys Energy Group Inc. | 38 | 2,052 | ||||||
Intel Corp. | 2,149 | 53,360 | ||||||
IntercontinentalExchange Inc.a | 33 | 4,511 | ||||||
International Business Machines Corp. | 475 | 92,554 | ||||||
International Flavors & Fragrances Inc. | 39 | 2,360 | ||||||
International Game Technology | 147 | 1,807 | ||||||
International Paper Co. | 181 | 6,255 | ||||||
Interpublic Group of Companies Inc. (The) | 208 | 2,213 | ||||||
Intuit Inc. | 122 | 7,142 | ||||||
Intuitive Surgical Inc.a | 17 | 8,360 | ||||||
Invesco Ltd. | 201 | 4,760 | ||||||
Iron Mountain Inc. | 60 | 1,968 | ||||||
J.B. Hunt Transport Services Inc. | 42 | 2,202 | ||||||
J.C. Penney Co. Inc.b | 77 | 2,008 | ||||||
J.M. Smucker Co. (The) | 53 | 4,503 | ||||||
J.P. Morgan Chase & Co. | 1,641 | 60,947 | ||||||
Jacobs Engineering Group Inc.a | 63 | 2,491 | ||||||
Johnson & Johnson | 1,199 | 80,849 | ||||||
Johnson Controls Inc. | 299 | 8,136 | ||||||
Joy Global Inc. | 51 | 2,722 | ||||||
Juniper Networks Inc.a | 240 | 4,186 | ||||||
Kansas City Southern Industries Inc. | 50 | 3,866 | ||||||
KBR Inc. | 74 | 2,005 | ||||||
Kellogg Co. | 113 | 5,723 | ||||||
KeyCorp | 425 | 3,583 | ||||||
Kimberly-Clark Corp. | 167 | 13,961 | ||||||
Kimco Realty Corp.b | 184 | 3,739 | ||||||
Kinder Morgan Inc. | 234 | 8,370 | ||||||
Kinder Morgan Management LLCa | 43 | 3,187 | ||||||
KLA-Tencor Corp. | 74 | 3,797 |
SCHEDULESOF INVESTMENTS | 35 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI WORLD INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Kohl’s Corp. | 109 | $ | 5,690 | |||||
Kraft Foods Inc. Class A | 718 | 29,819 | ||||||
Kroger Co. (The) | 239 | 5,325 | ||||||
L-3 Communications Holdings Inc. | 46 | 3,231 | ||||||
Laboratory Corp. of America Holdingsa | 44 | 3,870 | ||||||
Lam Research Corp.a,b | 116 | 3,959 | ||||||
Las Vegas Sands Corp. | 178 | 7,545 | ||||||
Legg Mason Inc. | 64 | 1,573 | ||||||
Leggett & Platt Inc. | 71 | 1,686 | ||||||
Leucadia National Corp. | 107 | 2,288 | ||||||
Level 3 Communications Inc.a | 98 | 2,112 | ||||||
Liberty Global Inc. Series Aa | 50 | 2,763 | ||||||
Liberty Global Inc. Series C NVSa | 67 | 3,497 | ||||||
Liberty Interactive Corp. Series Aa | 248 | 4,524 | ||||||
Liberty Media Corp. Series Aa | 48 | 5,005 | ||||||
Liberty Property Trust | 58 | 2,139 | ||||||
Life Technologies Corp.a,b | 81 | 3,865 | ||||||
Limited Brands Inc. | 114 | 5,540 | ||||||
Lincoln National Corp. | 132 | 3,065 | ||||||
Linear Technology Corp. | 105 | 3,468 | ||||||
LinkedIn Corp. Class Aa | 19 | 2,039 | ||||||
Lockheed Martin Corp. | 117 | 10,663 | ||||||
Loews Corp. | 136 | 5,528 | ||||||
Lorillard Inc. | 57 | 7,154 | ||||||
Lowe’s Companies Inc. | 541 | 15,408 | ||||||
LSI Corp.a | 260 | 2,025 | ||||||
Lululemon Athletica Inc.a,b | 44 | 2,868 | ||||||
LyondellBasell Industries NV Class A | 136 | 6,642 | ||||||
M&T Bank Corp. | 52 | 4,519 | ||||||
Macerich Co. (The) | 61 | 3,634 | ||||||
Macy’s Inc. | 183 | 7,377 | ||||||
Manpower Inc. | 72 | 2,672 | ||||||
Marathon Oil Corp. | 304 | 8,457 | ||||||
Marathon Petroleum Corp. | 152 | 7,866 | ||||||
Marriott International Inc. Class A | 123 | 4,635 | ||||||
Marsh & McLennan Companies Inc. | 228 | 7,791 | ||||||
Martin Marietta Materials Inc. | 23 | 1,757 | ||||||
Marvell Technology Group Ltd. | 221 | 2,250 | ||||||
Masco Corp. | 162 | 2,294 | ||||||
MasterCard Inc. Class A | 47 | 19,876 | ||||||
Mattel Inc. | 149 | 5,236 | ||||||
Maxim Integrated Products Inc. | 131 | 3,555 | ||||||
McCormick & Co. Inc. NVS | 57 | 3,502 |
Security | Shares | Value | ||||||
McDonald’s Corp. | 439 | $ | 39,286 | |||||
McGraw-Hill Companies Inc. (The) | 113 | 5,786 | ||||||
McKesson Corp. | 105 | 9,147 | ||||||
MDU Resources Group Inc. | 93 | 2,004 | ||||||
Mead Johnson Nutrition Co. Class A | 89 | 6,526 | ||||||
MeadWestvaco Corp. | 80 | 2,301 | ||||||
Medtronic Inc. | 450 | 18,297 | ||||||
Merck & Co. Inc. | 1,310 | 56,395 | ||||||
MetLife Inc. | 368 | 12,560 | ||||||
MGM Resorts Internationala | 174 | 1,716 | ||||||
Microchip Technology Inc. | 89 | 3,093 | ||||||
Micron Technology Inc.a | 438 | 2,720 | ||||||
Microsoft Corp. | 3,263 | 100,566 | ||||||
Mohawk Industries Inc.a | 28 | 2,017 | ||||||
Molson Coors Brewing Co. Class B NVS | 71 | 3,162 | ||||||
Monsanto Co. | 231 | 20,122 | ||||||
Monster Beverage Corp.a | 79 | 4,655 | ||||||
Moody’s Corp. | 90 | 3,564 | ||||||
Morgan Stanley | 652 | 9,780 | ||||||
Mosaic Co. (The) | 129 | 7,470 | ||||||
Motorola Solutions Inc. | 121 | 5,767 | ||||||
Murphy Oil Corp. | 84 | 4,312 | ||||||
Mylan Inc.a | 189 | 4,455 | ||||||
Nabors Industries Ltd.a | 136 | 2,009 | ||||||
NASDAQ OMX Group Inc. (The) | 105 | 2,401 | ||||||
National Oilwell Varco Inc. | 183 | 14,420 | ||||||
NetApp Inc.a | 159 | 5,489 | ||||||
Netflix Inc.a,b | 24 | 1,433 | ||||||
New York Community Bancorp Inc. | 207 | 2,745 | ||||||
Newell Rubbermaid Inc. | 132 | 2,367 | ||||||
Newfield Exploration Co.a | 64 | 2,088 | ||||||
Newmont Mining Corp. | 219 | 11,099 | ||||||
News Corp. Class A NVS | 649 | 15,180 | ||||||
News Corp. Class B | 267 | 6,288 | ||||||
NextEra Energy Inc. | 167 | 11,241 | ||||||
Nielsen Holdings NVa | 81 | 2,271 | ||||||
Nike Inc. Class B | 159 | 15,480 | ||||||
NiSource Inc. | 119 | 2,896 | ||||||
Noble Corp.a | 112 | 4,272 | ||||||
Noble Energy Inc. | 77 | 6,768 | ||||||
Nordstrom Inc. | 77 | 4,453 | ||||||
Norfolk Southern Corp. | 144 | 10,434 | ||||||
Northeast Utilities | 133 | 5,010 |
36 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI WORLD INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Northern Trust Corp. | 98 | $ | 4,551 | |||||
Northrop Grumman Corp. | 104 | 6,957 | ||||||
NRG Energy Inc. | 111 | 2,369 | ||||||
Nuance Communications Inc.a,b | 113 | 2,695 | ||||||
Nucor Corp. | 146 | 5,497 | ||||||
NVIDIA Corp.a | 270 | 3,788 | ||||||
NYSE Euronext Inc. | 120 | 3,006 | ||||||
O’Reilly Automotive Inc.a | 57 | 4,842 | ||||||
Occidental Petroleum Corp. | 353 | 30,009 | ||||||
Omnicare Inc. | 54 | 1,749 | ||||||
Omnicom Group Inc. | 124 | 6,370 | ||||||
ONEOK Inc. | 87 | 3,874 | ||||||
Oracle Corp. | 1,741 | 55,103 | ||||||
Owens-Illinois Inc.a | 79 | 1,381 | ||||||
PACCAR Inc. | 151 | 6,026 | ||||||
Pall Corp. | 53 | 2,942 | ||||||
Parker Hannifin Corp. | 67 | 5,359 | ||||||
PartnerRe Ltd. | 30 | 2,202 | ||||||
Patterson Companies Inc. | 44 | 1,495 | ||||||
Paychex Inc. | 146 | 4,856 | ||||||
Pentair Inc. | 48 | 2,040 | ||||||
People’s United Financial Inc. | 172 | 2,059 | ||||||
Pepco Holdings Inc. | 106 | 2,047 | ||||||
PepsiCo Inc. | 678 | 49,108 | ||||||
Perrigo Co. | 39 | 4,289 | ||||||
PetSmart Inc. | 51 | 3,617 | ||||||
Pfizer Inc. | 3,292 | 78,547 | ||||||
PG&E Corp. | 174 | 7,553 | ||||||
Philip Morris International Inc. | 757 | 67,600 | ||||||
Phillips 66 | 275 | 11,550 | ||||||
Pinnacle West Capital Corp. | 50 | 2,568 | ||||||
Pioneer Natural Resources Co. | 51 | 4,965 | ||||||
Plains Exploration & Production Co.a | 57 | 2,241 | ||||||
Plum Creek Timber Co. Inc. | 79 | 3,233 | ||||||
PNC Financial Services Group Inc. (The)c | 227 | 14,110 | ||||||
PPG Industries Inc. | 66 | 7,261 | ||||||
PPL Corp. | 212 | 6,218 | ||||||
Praxair Inc. | 128 | 13,504 | ||||||
Precision Castparts Corp. | 63 | 10,148 | ||||||
Priceline.com Inc.a | 22 | 13,301 | ||||||
Principal Financial Group Inc. | 135 | 3,704 | ||||||
Procter & Gamble Co. (The) | 1,188 | 79,822 | ||||||
Progressive Corp. (The) | 243 | 4,746 |
Security | Shares | Value | ||||||
Prologis Inc. | 202 | $ | 6,902 | |||||
Prudential Financial Inc. | 204 | 11,120 | ||||||
Public Service Enterprise Group Inc. | 218 | 6,902 | ||||||
Public Storage | 63 | 9,170 | ||||||
PVH Corp. | 31 | 2,911 | ||||||
QEP Resources Inc. | 82 | 2,353 | ||||||
QUALCOMM Inc. | 732 | 44,989 | ||||||
Quanta Services Inc.a | 94 | 2,256 | ||||||
Quest Diagnostics Inc. | 70 | 4,233 | ||||||
Rackspace Hosting Inc.a | 50 | 2,999 | ||||||
Ralcorp Holdings Inc.a | 28 | 1,987 | ||||||
Ralph Lauren Corp. | 27 | 4,284 | ||||||
Range Resources Corp. | 71 | 4,628 | ||||||
Rayonier Inc. | 61 | 2,988 | ||||||
Raytheon Co. | 146 | 8,252 | ||||||
Red Hat Inc.a | 85 | 4,763 | ||||||
Regency Centers Corp. | 45 | 2,205 | ||||||
Regeneron Pharmaceuticals Inc.a | 32 | 4,738 | ||||||
Regions Financial Corp. | 617 | 4,294 | ||||||
RenaissanceRe Holdings Ltd. | 25 | 1,931 | ||||||
Republic Services Inc. | 143 | 3,954 | ||||||
Reynolds American Inc. | 149 | 6,869 | ||||||
Robert Half International Inc. | 67 | 1,762 | ||||||
Rock-Tenn Co. Class A | 34 | 2,270 | ||||||
Rockwell Automation Inc. | 64 | 4,612 | ||||||
Rockwell Collins Inc. | 66 | 3,225 | ||||||
Roper Industries Inc. | 44 | 4,523 | ||||||
Ross Stores Inc. | 100 | 6,919 | ||||||
Royal Caribbean Cruises Ltd. | 72 | 1,945 | ||||||
Safeway Inc. | 124 | 1,941 | ||||||
SAIC Inc. | 225 | 2,747 | ||||||
Salesforce.com Inc.a | 57 | 8,275 | ||||||
SanDisk Corp.a | 109 | 4,493 | ||||||
SBA Communications Corp. Class Aa | 52 | 3,109 | ||||||
SCANA Corp. | 57 | 2,700 | ||||||
Schlumberger Ltd. | 577 | 41,763 | ||||||
Scripps Networks Interactive Inc. Class A | 43 | 2,541 | ||||||
Seagate Technology PLC | 175 | 5,602 | ||||||
SEI Investments Co. | 125 | 2,719 | ||||||
Sempra Energy | 96 | 6,355 | ||||||
Sherwin-Williams Co. (The) | 37 | 5,294 | ||||||
Sigma-Aldrich Corp. | 54 | 3,836 | ||||||
Simon Property Group Inc. | 127 | 20,155 |
SCHEDULESOF INVESTMENTS | 37 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI WORLD INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Sirius XM Radio Inc.a,b | 1,679 | $ | 4,248 | |||||
SL Green Realty Corp. | 38 | 3,063 | ||||||
SLM Corp. | 224 | 3,528 | ||||||
Southern Co. (The) | 363 | 16,455 | ||||||
Southwestern Energy Co.a,b | 154 | 4,794 | ||||||
Spectra Energy Corp. | 285 | 8,054 | ||||||
Sprint Nextel Corp.a | 1,324 | 6,421 | ||||||
SPX Corp. | 26 | 1,661 | ||||||
St. Jude Medical Inc. | 139 | 5,249 | ||||||
Stanley Black & Decker Inc. | 72 | 4,736 | ||||||
Staples Inc. | 316 | 3,451 | ||||||
Starbucks Corp. | 325 | 16,123 | ||||||
Starwood Hotels & Resorts | 91 | 5,017 | ||||||
State Street Corp. | 212 | 8,819 | ||||||
Stericycle Inc.a | 39 | 3,569 | ||||||
Stryker Corp. | 133 | 7,084 | ||||||
Sunoco Inc. | 48 | 2,265 | ||||||
SunTrust Banks Inc. | 236 | 5,940 | ||||||
Superior Energy Services Inc.a | 97 | 2,015 | ||||||
Symantec Corp.a | 325 | 5,795 | ||||||
Synopsys Inc.a | 71 | 2,345 | ||||||
Sysco Corp. | 256 | 7,757 | ||||||
T. Rowe Price Group Inc. | 112 | 6,881 | ||||||
Target Corp. | 277 | 17,753 | ||||||
TD Ameritrade Holding Corp. | 104 | 1,779 | ||||||
TE Connectivity Ltd. | 190 | 6,682 | ||||||
Teradata Corp.a | 73 | 5,576 | ||||||
Texas Instruments Inc. | 495 | 14,375 | ||||||
Textron Inc. | 125 | 3,340 | ||||||
Thermo Fisher Scientific Inc. | 162 | 9,291 | ||||||
Tiffany & Co. | 59 | 3,655 | ||||||
Time Warner Cable Inc. | 137 | 12,168 | ||||||
Time Warner Inc. | 421 | 17,493 | ||||||
TJX Companies Inc. (The) | 352 | 16,118 | ||||||
Toll Brothers Inc.a | 68 | 2,225 | ||||||
Torchmark Corp. | 45 | 2,303 | ||||||
Total System Services Inc. | 77 | 1,785 | ||||||
Tractor Supply Co. | 33 | 3,151 | ||||||
TransDigm Group Inc.a | 21 | 2,911 | ||||||
Travelers Companies Inc. (The) | 163 | 10,553 | ||||||
Trimble Navigation Ltd.a | 57 | 2,796 | ||||||
TRW Automotive Holdings Corp.a | 50 | 2,186 |
Security | Shares | Value | ||||||
Tyco International Ltd. | 198 | $ | 11,163 | |||||
Tyson Foods Inc. Class A | 137 | 2,145 | ||||||
U.S. Bancorp | 811 | 27,096 | ||||||
UDR Inc. | 118 | 2,979 | ||||||
Ulta Salon, Cosmetics & Fragrance Inc. | 27 | 2,538 | ||||||
Ultra Petroleum Corp.a,b | 75 | 1,542 | ||||||
Union Pacific Corp. | 206 | 25,017 | ||||||
United Parcel Service Inc. Class B | 307 | 22,660 | ||||||
United Technologies Corp. | 372 | 29,704 | ||||||
UnitedHealth Group Inc. | 446 | 24,218 | ||||||
Unum Group | 134 | 2,614 | ||||||
Urban Outfitters Inc.a | 57 | 2,140 | ||||||
URS Corp. | 71 | 2,585 | ||||||
Valero Energy Corp. | 245 | 7,659 | ||||||
Varian Medical Systems Inc.a | 52 | 3,057 | ||||||
Ventas Inc. | 125 | 8,186 | ||||||
VeriFone Systems Inc.a | 50 | 1,737 | ||||||
VeriSign Inc.a | 74 | 3,528 | ||||||
Verisk Analytics Inc. Class Aa | 62 | 3,008 | ||||||
Verizon Communications Inc. | 1,217 | 52,258 | ||||||
Vertex Pharmaceuticals Inc.a | 92 | 4,906 | ||||||
VF Corp. | 39 | 5,955 | ||||||
Viacom Inc. Class B NVS | 213 | 10,652 | ||||||
Virgin Media Inc. | 123 | 3,391 | ||||||
Visa Inc. Class A | 226 | 28,984 | ||||||
VMware Inc. Class Aa | 36 | 3,205 | ||||||
Vornado Realty Trust | 74 | 6,007 | ||||||
Vulcan Materials Co. | 59 | 2,296 | ||||||
W.R. Berkley Corp. | 53 | 1,981 | ||||||
W.W. Grainger Inc. | 26 | 5,355 | ||||||
Wal-Mart Stores Inc. | 818 | 59,387 | ||||||
Walgreen Co. | 380 | 13,589 | ||||||
Walt Disney Co. (The) | 733 | 36,262 | ||||||
Warner Chilcott PLC Class A | 122 | 1,662 | ||||||
Washington Post Co. (The) Class B | 1 | 353 | ||||||
Waste Management Inc. | 192 | 6,639 | ||||||
Waters Corp.a | 41 | 3,288 | ||||||
Watson Pharmaceuticals Inc.a | 55 | 4,474 | ||||||
Weatherford International Ltd.a | 338 | 3,975 | ||||||
WellPoint Inc. | 145 | 8,681 | ||||||
Wells Fargo & Co. | 2,188 | 74,458 | ||||||
Western Digital Corp.a | 104 | 4,349 | ||||||
Western Union Co. | 279 | 4,913 |
38 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI WORLD INDEX FUND
August 31, 2012
Security | Shares | Value | ||||||
Weyerhaeuser Co. | 235 | $ | 5,854 | |||||
Whirlpool Corp. | 35 | 2,641 | ||||||
Whiting Petroleum Corp.a | 54 | 2,404 | ||||||
Whole Foods Market Inc. | 74 | 7,159 | ||||||
Williams Companies Inc. (The) | 257 | 8,293 | ||||||
Willis Group Holdings PLC | 79 | 2,948 | ||||||
Windstream Corp. | 273 | 2,695 | ||||||
Wisconsin Energy Corp. | 97 | 3,682 | ||||||
Wyndham Worldwide Corp. | 66 | 3,441 | ||||||
Wynn Resorts Ltd. | 37 | 3,817 | ||||||
Xcel Energy Inc. | 204 | 5,690 | ||||||
Xerox Corp. | 594 | 4,378 | ||||||
Xilinx Inc. | 117 | 3,967 | ||||||
XL Group PLC | 139 | 3,214 | ||||||
Xylem Inc. | 91 | 2,210 | ||||||
Yahoo! Inc.a | 504 | 7,384 | ||||||
Yum! Brands Inc. | 200 | 12,744 | ||||||
Zimmer Holdings Inc. | 77 | 4,757 | ||||||
|
| |||||||
5,748,379 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $10,045,422) | 10,625,956 | |||||||
PREFERRED STOCKS — 0.18% | ||||||||
GERMANY — 0.18% | ||||||||
Henkel AG & Co. KGaA | 61 | 4,620 | ||||||
Porsche Automobil Holding SE | 69 | 3,575 | ||||||
Volkswagen AG | 61 | 10,796 | ||||||
|
| |||||||
18,991 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS | ||||||||
(Cost: $17,043) | 18,991 | |||||||
RIGHTS — 0.00% | ||||||||
UNITED STATES — 0.00% | ||||||||
Liberty Venturesa,d | 4 | 40 | ||||||
|
| |||||||
40 | ||||||||
|
| |||||||
TOTAL RIGHTS | ||||||||
(Cost: $27) | 40 |
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS — 0.52% |
| |||||||
MONEY MARKET FUNDS — 0.52% |
| |||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.23%c,e,f | 48,823 | $ | 48,823 | |||||
BlackRock Cash Funds: Prime, | ||||||||
0.23%c,e,f | 3,700 | 3,700 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%c,e | 2,848 | 2,848 | ||||||
|
| |||||||
55,371 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS | ||||||||
(Cost: $55,371) | 55,371 | |||||||
|
| |||||||
TOTAL INVESTMENTS | ||||||||
(Cost: $10,117,863) | 10,700,358 | |||||||
Other Assets, Less Liabilities — (0.11)% |
| (11,350 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% | $ | 10,689,008 | ||||||
|
|
FDR — Fiduciary Depositary Receipts
NVS — Non-Voting Shares
SDR — Swedish 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 | Security valued using Level 3 inputs in accordance with management’s fair valuation policy. See Note 1. |
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 | 39 |
Table of Contents
Statements of Assets and Liabilities
iSHARES®, INC.
August 31, 2012
iShares MSCI All Country World Minimum Volatility Index Fund | iShares MSCI Emerging Index Fund | iShares MSCI World Index Fund | ||||||||||
ASSETS | ||||||||||||
Investments, at cost: | ||||||||||||
Unaffiliated | $ | 555,947,606 | $ | 10,598,098 | $ | 10,037,896 | ||||||
Affiliated (Note 2) | 24,154,997 | — | 79,967 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments | $ | 580,102,603 | $ | 10,598,098 | $ | 10,117,863 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 575,362,004 | $ | 10,251,578 | $ | 10,620,648 | ||||||
Affiliated (Note 2) | 24,268,525 | — | 79,710 | |||||||||
|
|
|
|
|
| |||||||
Total fair value of investments | 599,630,529 | 10,251,578 | 10,700,358 | |||||||||
Foreign currencies, at valueb | 437,784 | 4,018 | 13,458 | |||||||||
Cash | 12,028 | 60,986 | — | |||||||||
Receivables: | ||||||||||||
Investment securities sold | 1,531,645 | 324 | 11,793 | |||||||||
Dividends and interest | 1,287,460 | 22,583 | 34,160 | |||||||||
Capital shares sold | — | 85,445 | — | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 602,899,446 | 10,424,934 | 10,759,769 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 1,640,620 | 79,446 | 16,072 | |||||||||
Collateral for securities on loan (Note 5) | 22,381,865 | — | 52,523 | |||||||||
Foreign taxes (Note 1) | 10,105 | — | — | |||||||||
Investment advisory fees (Note 2) | 91,268 | 2,245 | 2,166 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 24,123,858 | 81,691 | 70,761 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 578,775,588 | $ | 10,343,243 | $ | 10,689,008 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 559,445,278 | $ | 10,725,256 | $ | 10,070,791 | ||||||
Undistributed net investment income | 2,864,392 | 23,724 | 57,276 | |||||||||
Accumulated net realized loss | (3,065,984 | ) | (58,760 | ) | (21,434 | ) | ||||||
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies | 19,531,902 | (346,977 | ) | 582,375 | ||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 578,775,588 | $ | 10,343,243 | $ | 10,689,008 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingc | 10,400,000 | 200,000 | 200,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 55.65 | $ | 51.72 | $ | 53.45 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $21,853,129, $ — and $51,291, respectively. See Note 5. |
b | Cost of foreign currencies: $436,110, $3,963 and $13,375, respectively. |
c | $0.001 par value, number of shares authorized: 500 million, 500 million and 500 million, respectively. |
See notes to financial statements.
40 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Operations
iSHARES®, INC.
Period ended August 31, 2012
iShares MSCI All Country World | iShares MSCI Emerging Index Fundb | iShares MSCI World Index Fundc | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliatedd | $ | 5,272,338 | $ | 231,366 | $ | 382,289 | ||||||
Dividends — affiliated (Note 2) | 3,671 | — | 914 | |||||||||
Interest — unaffiliated | 37 | — | — | |||||||||
Interest — affiliated (Note 2) | 111 | 3 | 5 | |||||||||
Securities lending income — affiliated (Note 2) | 64,779 | 7 | 515 | |||||||||
|
|
|
|
|
| |||||||
5,340,936 | 231,376 | 383,723 | ||||||||||
Less: Other foreign taxes (Note 1) | (12,680 | ) | — | (3 | ) | |||||||
|
|
|
|
|
| |||||||
Total investment income | 5,328,256 | 231,376 | 383,720 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 538,193 | 31,766 | 29,225 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 538,193 | 31,766 | 29,225 | |||||||||
Less investment advisory fees waived (Note 2) | (178,744 | ) | (8,876 | ) | — | |||||||
|
|
|
|
|
| |||||||
Net expenses | 359,449 | 22,890 | 29,225 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 4,968,807 | 208,486 | 354,495 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | (2,703,017 | ) | (59,866 | ) | (25,774 | ) | ||||||
Investments — affiliated (Note 2) | (362,675 | ) | — | — | ||||||||
In-kind redemptions — unaffiliated | — | (159,185 | ) | 274,702 | ||||||||
In-kind redemptions — affiliated (Note 2) | — | — | (41 | ) | ||||||||
Foreign currency transactions | (16,737 | ) | (6,522 | ) | (1,482 | ) | ||||||
|
|
|
|
|
| |||||||
Net realized gain (loss) | (3,082,429 | ) | (225,573 | ) | 247,405 | |||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments | 19,527,926 | (346,520 | ) | 582,495 | ||||||||
Translation of assets and liabilities in foreign currencies | 3,976 | (457 | ) | (120 | ) | |||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | 19,531,902 | (346,977 | ) | 582,375 | ||||||||
|
|
|
|
|
| |||||||
Net realized and unrealized gain (loss) | 16,449,473 | (572,550 | ) | 829,780 | ||||||||
|
|
|
|
|
| |||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | 21,418,280 | $ | (364,064 | ) | $ | 1,184,275 | |||||
|
|
|
|
|
|
a | For the period from October 18, 2011 (commencement of operations) to August 31, 2012. |
b | For the period from January 18, 2012 (commencement of operations) to August 31, 2012. |
c | For the period from January 10, 2012 (commencement of operations) to August 31, 2012. |
d | Net of foreign withholding tax of $340,499, $32,761 and $22,094, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 41 |
Table of Contents
Statements of Changes in Net Assets
iSHARES®, INC.
iShares MSCI All Country World Minimum Volatility Index Fund | iShares MSCI Emerging Markets EMEA Index Fund | |||||||
Period from October 18, 2011a to August 31, 2012 | Period from January 18, 2012a to August 31, 2012 | |||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||
OPERATIONS: | ||||||||
Net investment income | $ | 4,968,807 | $ | 208,486 | ||||
Net realized gain (loss) | (3,082,429 | ) | (225,573 | ) | ||||
Net change in unrealized appreciation/depreciation | 19,531,902 | (346,977 | ) | |||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | 21,418,280 | (364,064 | ) | |||||
|
|
|
| |||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||
From net investment income | (2,087,970 | ) | (178,240 | ) | ||||
|
|
|
| |||||
Total distributions to shareholders | (2,087,970 | ) | (178,240 | ) | ||||
|
|
|
| |||||
CAPITAL SHARE TRANSACTIONS: | ||||||||
Proceeds from shares sold | 559,445,278 | 15,732,186 | ||||||
Cost of shares redeemed | — | (4,846,639 | ) | |||||
|
|
|
| |||||
Net increase in net assets from capital share transactions | 559,445,278 | 10,885,547 | ||||||
|
|
|
| |||||
INCREASE IN NET ASSETS | 578,775,588 | 10,343,243 | ||||||
NET ASSETS | ||||||||
Beginning of period | — | — | ||||||
|
|
|
| |||||
End of period | $ | 578,775,588 | $ | 10,343,243 | ||||
|
|
|
| |||||
Undistributed net investment income included in net assets at end of period | $ | 2,864,392 | $ | 23,724 | ||||
|
|
|
| |||||
SHARES ISSUED AND REDEEMED | ||||||||
Shares sold | 10,400,000 | 300,000 | ||||||
Shares redeemed | — | (100,000 | ) | |||||
|
|
|
| |||||
Net increase in shares outstanding | 10,400,000 | 200,000 | ||||||
|
|
|
|
a | Commencement of operations. |
See notes to financial statements.
42 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI World Index Fund | ||||
Period from to August 31, 2012 | ||||
INCREASE (DECREASE) IN NET ASSETS | ||||
OPERATIONS: | ||||
Net investment income | $ | 354,495 | ||
Net realized gain | 247,405 | |||
Net change in unrealized appreciation/depreciation | 582,375 | |||
|
| |||
Net increase in net assets resulting from operations | 1,184,275 | |||
|
| |||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||
From net investment income | (295,901 | ) | ||
|
| |||
Total distributions to shareholders | (295,901 | ) | ||
|
| |||
CAPITAL SHARE TRANSACTIONS: | ||||
Proceeds from shares sold | 20,127,850 | |||
Cost of shares redeemed | (10,327,216 | ) | ||
|
| |||
Net increase in net assets from capital share transactions | 9,800,634 | |||
|
| |||
INCREASE IN NET ASSETS | 10,689,008 | |||
NET ASSETS | ||||
Beginning of period | — | |||
|
| |||
End of period | $ | 10,689,008 | ||
|
| |||
Undistributed net investment income included in net assets at end of period | $ | 57,276 | ||
|
| |||
SHARES ISSUED AND REDEEMED | ||||
Shares sold | 400,000 | |||
Shares redeemed | (200,000 | ) | ||
|
| |||
Net increase in shares outstanding | 200,000 | |||
|
|
a | Commencement of operations. |
See notes to financial statements.
FINANCIAL STATEMENTS | 43 |
Table of Contents
iSHARES®, INC.
(For a share outstanding throughout the period)
iShares MSCI All Country World Minimum Volatility Index Fund | ||||
Period from to Aug. 31, 2012 | ||||
Net asset value, beginning of period | $ | 50.02 | ||
|
| |||
Income from investment operations: | ||||
Net investment incomeb | 1.49 | |||
Net realized and unrealized gainc | 4.67 | |||
|
| |||
Total from investment operations | 6.16 | |||
|
| |||
Less distributions from: | ||||
Net investment income | (0.53 | ) | ||
|
| |||
Total distributions | (0.53 | ) | ||
|
| |||
Net asset value, end of period | $ | 55.65 | ||
|
| |||
Total return | 12.41 | %d | ||
|
| |||
Ratios/Supplemental data: | ||||
Net assets, end of period (000s) | $ | 578,776 | ||
Ratio of expenses to average net assetse | 0.23 | % | ||
Ratio of expenses to average net assets prior to waived feese | 0.34 | % | ||
Ratio of net investment income to average net assetse | 3.17 | % | ||
Portfolio turnover ratef | 22 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout the period. |
c | The amount 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 rate excludes portfolio securities received or delivered in Creation Units but includes 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 period ended August 31, 2012 would have been 22%. See Note 4. |
See notes to financial statements.
44 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout the period)
iShares MSCI Emerging Markets EMEA Index Fund | ||||
Period from to Aug. 31, 2012 | ||||
Net asset value, beginning of period | $ | 51.16 | ||
|
| |||
Income from investment operations: | ||||
Net investment incomeb | 1.43 | |||
Net realized and unrealized gainc | 0.02 | |||
|
| |||
Total from investment operations | 1.45 | |||
|
| |||
Less distributions from: | ||||
Net investment income | (0.89 | ) | ||
|
| |||
Total distributions | (0.89 | ) | ||
|
| |||
Net asset value, end of period | $ | 51.72 | ||
|
| |||
Total return | 2.91 | %d | ||
|
| |||
Ratios/Supplemental data: | ||||
Net assets, end of period (000s) | $ | 10,343 | ||
Ratio of expenses to average net assetse | 0.49 | % | ||
Ratio of expenses to average net assets prior to waived feese | 0.68 | % | ||
Ratio of net investment income to average net assetse | 4.46 | % | ||
Portfolio turnover ratef | 5 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout the period. |
c | The amount 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 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 | 45 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout the period)
iShares MSCI World Index Fund | ||||
Period from to Aug. 31, 2012 | ||||
Net asset value, beginning of period | $ | 50.32 | ||
|
| |||
Income from investment operations: | ||||
Net investment incomeb | 0.98 | |||
Net realized and unrealized gainc | 2.89 | |||
|
| |||
Total from investment operations | 3.87 | |||
|
| |||
Less distributions from: | ||||
Net investment income | (0.74 | ) | ||
|
| |||
Total distributions | (0.74 | ) | ||
|
| |||
Net asset value, end of period | $ | 53.45 | ||
|
| |||
Total return | 7.76 | %d | ||
|
| |||
Ratios/Supplemental data: | ||||
Net assets, end of period (000s) | $ | 10,689 | ||
Ratio of expenses to average net assetse | 0.24 | % | ||
Ratio of net investment income to average net assetse | 2.91 | % | ||
Portfolio turnover ratef | 3 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout the period. |
c | The amount 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 rate excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
46 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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 following funds (each, a “Fund,” and collectively, the “Funds”):
iShares MSCI Index Fund | Diversification Classification | |
All Country World MinimumVolatilitya | Non-diversified | |
Emerging Markets EMEAb | Non-diversified | |
Worldc | Diversified |
a | The Fund commenced operations on October 18, 2011. |
b | The Fund commenced operations on January 18, 2012. |
c | The Fund commenced operations on January 10, 2012. |
Non-diversified funds generally hold securities of fewer issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers.
The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index. The investment adviser uses a “passive” or index approach to try to achieve each Fund’s investment objective.
Each Fund may invest in securities of non-U.S. issuers that may trade in non-U.S. markets. This may involve certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: generally less liquid and less efficient securities markets; generally greater price volatility; exchange rate fluctuations and exchange controls; imposition of restrictions on the expatriation of funds or other assets of the Funds; 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 Funds in the preparation of their 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.
NOTESTO FINANCIAL STATEMENTS | 47 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
SECURITY VALUATION
Each Fund’s investments are valued at fair value each day that the Fund’s listing exchange is open. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) provides oversight of the valuation of investments for the Funds. The investments of each Fund are valued pursuant to policies and procedures developed by the Global Valuation Committee and approved by the Board of Directors of the Company (the “Board”).
• | Equity investments traded on a recognized securities exchange are valued at that day’s last reported trade price or the official closing price, as applicable, on the exchange where the stock is primarily traded. Equity investments traded on a recognized exchange for which there were no sales on that day are valued at the last traded price. |
• | Open-end U.S. mutual funds are valued at that day’s published net asset value (NAV). |
• | Exchange-traded funds and closed-end funds traded on a recognized securities exchange are valued at that day’s last reported trade price or the official closing price, as applicable, on the exchange where the fund is primarily traded. Funds traded on a recognized exchange for which there were no sales on that day are valued at the last traded price. |
In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the fair value of such investment or if a price is not available, the investment will be valued based upon other available factors deemed relevant by the Global Valuation Committee, in accordance with policies approved by the Board. These factors include but are not limited to (i) attributes specific to the investment; (ii) the principal market for the investment; (iii) the customary participants in the principal market for the investment; (iv) data assumptions by market participants for the investment, if reasonably available; (v) quoted prices for similar investments in active markets; and (vi) other factors, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and/or other default rates. Valuations based on such factors are reported to the Board on a quarterly basis.
The Global Valuation Committee employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the Company’s pricing vendors, a regular review of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices and large movements in market values, and reviews of market related activity.
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.
Various inputs are used in determining the fair value of financial instruments. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes. The level of a value determined for 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. The three levels of the fair value hierarchy are as follows:
• | Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities; |
48 | 2012 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 (such as exchange rates, financing terms, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs; and |
• | Level 3 — Unobservable inputs for the asset or liability, including the Funds’ assumptions used in determining the fair value of investments. |
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. In accordance with the Company’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period.
The following table summarizes the value of each of the Funds’ investments according to the fair value hierarchy as of August 31, 2012. The breakdown of each Fund’s investments into major categories is disclosed in its respective Schedule of Investments.
iShares MSCI Index Fund and
| Investments | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
All Country World Minimum Volatility | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 574,356,069 | $ | — | $ | — | $ | 574,356,069 | ||||||||
Investment Companies | 1,640,470 | — | — | 1,640,470 | ||||||||||||
Preferred Stocks | 1,005,935 | — | — | 1,005,935 | ||||||||||||
Short-Term Investments | 22,628,055 | — | — | 22,628,055 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 599,630,529 | $ | — | $ | — | $ | 599,630,529 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Emerging Markets EMEA | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 10,101,709 | $ | — | $ | — | $ | 10,101,709 | ||||||||
Preferred Stocks | 149,869 | — | — | 149,869 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 10,251,578 | $ | — | $ | — | $ | 10,251,578 | |||||||||
|
|
|
|
|
|
|
| |||||||||
World | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 10,625,956 | $ | — | $ | — | $ | 10,625,956 | ||||||||
Preferred Stocks | 18,991 | — | — | 18,991 | ||||||||||||
Rights | — | — | 40 | 40 | ||||||||||||
Short-Term Investments | 55,371 | — | — | 55,371 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 10,700,318 | $ | — | $ | 40 | $ | 10,700,358 | |||||||||
|
|
|
|
|
|
|
| |||||||||
NOTESTO FINANCIAL STATEMENTS | 49 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are accounted for on trade date. Dividend income is recognized on the ex-dividend date, net of any foreign taxes withheld at source. Any taxes withheld that are reclaimable from foreign tax authorities as of August 31, 2012 are reflected in dividends receivable. Non-cash dividends received in the form of stock in an elective dividend, if any, are recorded as dividend income at fair value. Distributions received by the 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. Interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method.
FOREIGN CURRENCY TRANSLATION
The accounting records of the Funds are maintained in U.S. dollars. Foreign currencies, as well as investment securities and other assets and liabilities denominated in foreign currencies, are translated into U.S. dollars using exchange rates deemed appropriate by the investment adviser. 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, capital gains on investments, certain foreign currency transactions or other corporate events. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the Funds invest. These foreign taxes, if any, are paid by the Funds and are reflected in their Statements of Operations as follows: foreign taxes withheld at source are presented as a reduction of income, foreign taxes on securities lending income are presented as a reduction of securities lending income, foreign taxes on capital gains from sales of investments and foreign currency transactions are included in their respective net realized gain (loss) categories, and foreign taxes on other corporate events are reflected in “Other foreign taxes.” Foreign taxes payable as of August 31, 2012, if any, are disclosed in the Funds’ Statements of Assets and Liabilities.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends and distributions paid by each Fund are recorded on the ex-dividend dates. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds.
FEDERAL INCOME TAXES
Each Fund is treated as an entity separate from the Company’s other funds 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 is required.
50 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
2. | INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES |
Pursuant to an Investment Advisory Agreement with the Company, BlackRock Fund Advisors (“BFA”) manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock, Inc. (“BlackRock”). Under the Investment Advisory Agreement, BFA is responsible for substantially all expenses of the Funds, except interest, taxes, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution fees, litigation expenses and any extraordinary expenses.
For its investment advisory services to the iShares MSCI All Country World Minimum Volatility 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 asset of the fund and certain other iShares funds, as follows:
Investment Advisory Fee | Aggregate Average Daily Net Assets | |
0.35% | First $30 billion | |
0.32 | Over $30 billion, up to and including $60 billion | |
0.28 | Over $60 billion |
BFA has voluntarily waived a portion of its investment advisory fees for the iShares MSCI All Country World Minimum Volatility Index Fund in the amount of $171,948.
BFA has contractually agreed to waive a portion of its investment advisory fees for the iShares MSCI All Country World Minimum Volatility Index Fund through June 30, 2013 in an amount equal to the investment advisory fees payable on the amount of the Fund’s investment in other iShares funds. In association with this agreement, for the period ended August 31, 2012, BFA waived its investment advisory fees for the fund in the amount of $6,796.
For its investment advisory services to each Fund, BFA is entitled to an annual investment advisory fee based on the average daily net assets of each Fund as follows:
iShares MSCI Index Fund | Investment Advisory Fee | |||
Emerging Markets EMEA | 0.68 | % | ||
World | 0.24 |
BFA has contractually agreed to waive a portion of its investment advisory fees for the iShares MSCI Emerging Markets EMEA Index Fund through December 31, 2014 in order to limit total annual operating expenses to 0.49% of average daily net assets.
The U.S. Securities and Exchange Commission has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (“BTC”) to serve as securities lending agent for the Funds, subject to applicable conditions. BTC is an affiliate of BFA. Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, and any fees or other payments to and from borrowers of securities. Each Fund retains 65% of securities lending income and pays a fee to BTC equal to 35% of such income. As securities lending agent, BTC is responsible for all transaction fees and all other operational costs relating to securities lending activities, other than extraordinary expenses. BTC is also responsible for fees and expenses incurred by each Fund as a result of the investment of cash collateral received for securities on loan in a money market fund managed by BFA or an affiliate.
NOTESTO FINANCIAL STATEMENTS | 51 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
For the period ended August 31, 2012, BTC earned securities lending agent fees from the Funds as follows:
iShares MSCI Index Fund | Securities Lending Agent Fees | |||
All Country World Minimum Volatility | $ | 34,881 | ||
Emerging Markets EMEA | 4 | |||
World | 277 |
At a special meeting of the Board held on January 5, 2012, the directors approved a new distribution agreement with BlackRock Investments, LLC (“BRIL”). BRIL is an affiliate of BFA. Effective April 1, 2012, BRIL replaced SEI Investments Distribution Co. as the distributor for each Fund. Pursuant to the new distribution agreement, BFA is responsible for any fees or expenses for distribution services provided to the Funds.
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 — affiliated” in the Statements of Operations.
The PNC Financial Services Group, Inc. is the largest stockholder of BlackRock and is considered to be an affiliate of the Funds for 1940 Act purposes.
The iShares MSCI All Country World Minimum Volatility Index Fund, in order to improve its portfolio liquidity and its ability to track its underlying index, may invest in shares of other iShares funds that invest in securities in the Fund’s underlying index.
Investments in issuers considered to be affiliates of the Funds (excluding short-term investments) during the period ended August 31, 2012, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:
iShares MSCI Index Fund and Name of Affiliated Issuer | Shares Held at Beginning of Period | Shares Purchased | Shares Sold | Shares Held at End of Period | Value at End of Period | Dividend Income | Net Realized Gain (Loss) | |||||||||||||||||||||
All Country World Minimum Volatility | ||||||||||||||||||||||||||||
iShares S&P India Nifty 50 Index Fund | — | 176,068 | (102,800 | ) | 73,268 | $ | 1,640,470 | $ | 3,671 | $ | (362,675 | ) | ||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||
World | ||||||||||||||||||||||||||||
BlackRock Inc. | — | 117 | (59 | ) | 58 | $ | 10,229 | $ | 384 | $ | 90 | |||||||||||||||||
PNC Financial Services Group Inc. (The) | — | 461 | (234 | ) | 227 | 14,110 | 530 | (131 | ) | |||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||
$ | 24,339 | $ | 914 | $ | (41 | ) | ||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||
Certain directors and officers of the Company are also officers of BTC and/or BFA.
52 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
3. | INVESTMENT PORTFOLIO TRANSACTIONS |
Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the period ended August 31, 2012 were as follows:
iShares MSCI Index Fund | Purchases | Sales | ||||||
All Country World Minimum Volatility | $ | 82,162,614 | $ | 39,931,094 | ||||
Emerging Markets EMEA | 369,861 | 396,331 | ||||||
World | 585,141 | 573,153 |
In-kind transactions (see Note 4) for the period ended August 31, 2012 were as follows:
iShares MSCI Index Fund | In-kind Purchases | In-kind Sales | ||||||
All Country World Minimum Volatility | $ | 518,308,720 | $ | — | ||||
Emerging Markets EMEA | 15,619,683 | 4,776,064 | ||||||
World | 20,107,850 | 10,306,233 |
4. | CAPITAL SHARE TRANSACTIONS |
Capital shares are issued and redeemed by each Fund only in aggregations of a specified number of shares or multiples thereof (“Creation Units”) at net asset value. Except when aggregated in Creation Units, shares of 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 in the Company generally consists of the in-kind deposit of a designated portfolio of securities, which constitutes an optimized representation of the securities of that fund’s underlying index, and a specified amount of cash. Certain funds in the Company may be offered in Creation Units solely or partially for cash in U.S. dollars. Investors purchasing and redeeming Creation Units may pay a purchase transaction fee and a redemption transaction fee directly to State Street Bank and Trust Company, the Company’s administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash. Investors transacting in Creation Units for cash pay an additional variable charge to compensate the relevant fund for certain transaction costs (i.e., stamp taxes, taxes on currency or other financial transactions, and brokerage costs) and market impact expenses relating to investing in portfolio securities.
5. | 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. Each Fund could suffer a loss if the value of an investment purchased with cash collateral falls below the value of the cash collateral received.
NOTESTO FINANCIAL STATEMENTS | 53 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
As of August 31, 2012, any securities on loan 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, 2012 and the value of the related collateral are disclosed in the Statements of Assets and Liabilities. Securities lending income, as disclosed in the Statements of Operations, represents the income earned from the investment of the cash collateral, net of fees and other payments to and from borrowers, and less the fees paid to BTC as securities lending agent.
6. | INCOME TAX INFORMATION |
U.S. GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset values per share. The following permanent differences as of August 31, 2012, attributable to passive foreign investment companies, foreign currency transactions and realized gains (losses) from in-kind redemptions, were reclassified to the following accounts:
iShares MSCI Index Fund | Paid-in Capital | Undistributed Net Investment Income/Distributions in Excess of Net Investment Income | Undistributed Net Realized Gain/Accumulated Net Realized Loss | |||||||||
All Country World Minimum Volatility | $ | — | $ | (16,445 | ) | $ | 16,445 | |||||
Emerging Markets EMEA | (160,291 | ) | (6,522 | ) | 166,813 | |||||||
World | 270,157 | (1,318 | ) | (268,839 | ) |
The tax character of distributions paid during the period ended August 31, 2012 was as follows:
iShares MSCI Index Fund | 2012 | |||
All Country World Minimum Volatility | ||||
Ordinary income | $ | 2,087,970 | ||
|
| |||
Emerging Markets EMEA | ||||
Ordinary income | $ | 178,240 | ||
|
| |||
World | ||||
Ordinary income | $ | 295,901 | ||
|
| |||
54 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
As of August 31, 2012, the tax components of accumulated net earnings (losses) were as follows:
iShares MSCI Index Fund | Undistributed Ordinary Income | Capital Loss | Net Unrealized | Total | ||||||||||||
All Country World Minimum Volatility | $ | 3,609,683 | $ | (1,876,800 | ) | $ | 17,597,427 | $ | 19,330,310 | |||||||
Emerging Markets EMEA | 29,656 | (55,073 | ) | (356,596 | ) | (382,013 | ) | |||||||||
World | 65,396 | (19,493 | ) | 572,314 | 618,217 |
a | The difference between book-basis and tax-basis unrealized gains (losses) was attributable primarily to the tax deferral of losses on wash sales and the realization for tax purposes of unrealized gains on investments in passive foreign investment companies. |
As of August 31, 2012, the Funds had non-expiring capital loss carryforwards available to offset future realized capital gains as follows:
iShares MSCI Index Fund | Non- Expiring | |||
All Country World Minimum Volatility | $ | 1,876,800 | ||
Emerging Markets EMEA | 55,073 | |||
World | 19,493 |
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.
As of August 31, 2012, 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 | Gross Unrealized Depreciation | Net Unrealized Appreciation (Depreciation) | ||||||||||||
All Country World Minimum Volatility | $ | 582,037,078 | $ | 24,631,715 | $ | (7,038,264 | ) | $ | 17,593,451 | |||||||
Emerging Markets EMEA | 10,607,717 | 200,328 | (556,467 | ) | (356,139 | ) | ||||||||||
World | 10,127,924 | 941,735 | (369,301 | ) | 572,434 |
Management has reviewed the tax positions as of August 31, 2012 and has determined that no provision for income tax is required in the Funds’ financial statements.
7. | 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.
NOTESTO FINANCIAL STATEMENTS | 55 |
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 All Country World Minimum Volatility Index Fund, iShares MSCI Emerging Markets EMEA Index Fund and iShares MSCI World Index Fund (the “Funds”), at August 31, 2012, 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 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, 2012 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
October 23, 2012
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Table of Contents
iSHARES®, INC.
For the fiscal period ended August 31, 2012, the iShares MSCI Emerging Markets EMEA Index Fund earned foreign source income of $264,127 and paid foreign taxes of $31,194 which it intends to pass through to its shareholders pursuant to Section 853 of the Internal Revenue Code (the “Code”).
For corporate shareholders, the following percentages of the income dividends paid by certain Funds during the fiscal period ended August 31, 2012 qualified for the dividends-received deduction:
iShares MSCI Index Fund | Dividends- Received Deduction | |||
All Country World Minimum Volatility | 77.92 | % | ||
World | 42.54 |
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 period ended August 31, 2012:
iShares MSCI Index Fund | Qualified Dividend Income | |||
All Country World Minimum Volatility | $ | 2,087,970 | ||
Emerging Markets EMEA | 209,434 | |||
World | 295,901 |
In February 2013, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2012. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.
TAX INFORMATION | 57 |
Table of Contents
Board Review and Approval of Investment Advisory
Contract (Unaudited)
iSHARES®, INC.
iShares MSCI All Country World Minimum Volatility 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 annually to consider the Investment Advisory Contract between the Company and BFA (the “Advisory Contract”) on behalf of the Fund. The Independent Directors requested, and BFA provided, such information as the Independent Directors, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of Independent Directors (the “15(c) Committee”), with independent counsel, met with management on April 19, 2012, April 27, 2012, and May 16, 2012, to discuss the types of information the Independent Directors required and the manner in which management would organize and present such information. At a meeting held on May 17, 2012, management presented information to the Board relating to the continuance of the Advisory Contract, and the Board, including the Independent Directors, reviewed and discussed such information at length. The Independent Directors requested from management certain additional information, and the 15(c) Committee met with management on June 8, 2012, to discuss the additional requests. At a meeting held on June 20-21, 2012, the Board, including the Independent Directors, reviewed additional information provided by management in response to these requests. The Board, including a majority of the Independent Directors, approved the continuance of the Advisory Contract for the Fund, based on a review of qualitative and quantitative information provided by BFA, including a review of supplemental information management provided at the request of the Independent Directors. The Board noted its satisfaction with the extent and quality of information, and detailed responses, provided by BFA. The Independent Directors were advised by their independent counsel throughout the process. In approving the Advisory Contract for the Fund, the Board, including the Independent Directors, considered the following factors, no one of which was controlling, and made the following conclusions:
Expenses and Performance of the Fund — 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, sponsor, inception date, or other differentiating factors, but that 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 those tracked by the Fund, the Lipper Group 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), as applicable. 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 also received a detailed explanation from BFA regarding its rationale for including funds that had been excluded from Lipper’s consideration due to Lipper’s methodology parameters, as well as information showing the effect of including these additional funds in the analysis. The Board further noted that due to the limitations in providing comparable funds in the various Lipper Groups, the statistical information may or may not provide meaningful direct comparisons to the Fund.
The Board also noted that the investment advisory fees and overall expenses for the Fund compared favorably to the investment advisory fee rates and overall expenses of the funds in the Lipper Group.
In addition, the Board reviewed statistical information prepared by Lipper regarding the performance of the Fund for the one-, three-, five-, ten-year, and since inception periods, as applicable, and the “last quarter” period ended December 31, 2011, and a comparison of the Fund’s performance to its performance benchmark index for the same periods. To the extent that any of the comparison funds included in the Lipper Group track the same index as the Fund, Lipper also provided, and the Board reviewed, a comparison of the Fund’s performance
58 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Board Review and Approval of Investment Advisory
Contract (Unaudited) (Continued)
iSHARES®, INC.
to that of such relevant comparison funds for the same periods. The Board noted that the Fund generally performed in line with its performance benchmark index over the relevant periods. In considering this information, the Board noted that the Lipper Group includes funds that may have different investment objectives and/or benchmarks from the Fund. In addition, the Board noted that the Fund seeks to track its benchmark index and that, during the prior year, the Board received periodic reports on the Fund’s performance in comparison with its benchmark index. Such periodic comparative performance information was also considered by the Board.
Based on this review, the other factors considered at the meeting, and their general knowledge of mutual fund pricing, the Board concluded that the investment advisory fees and expense levels and the historical performance of the Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA over prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the Fund and its shareholders. The Board noted that BFA became an indirect wholly-owned subsidiary of BlackRock, Inc. (“BlackRock”) in December 2009. The Board acknowledged that additional resources to support the Fund and its shareholders have been added or enhanced since then, including in such areas as investor education, product management, customized portfolio consulting support, and capital markets support. The Board also considered BFA’s compliance program and its compliance record with respect to the Fund. In that regard, 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 on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Fund. In addition to the above considerations, the Board reviewed and considered BFA’s investment and risk management processes and strategies, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that the Fund had met its investment objective consistently since its inception date.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Fund under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Costs of Services Provided to Fund and Profits Realized by BFA and Affiliates — The Board reviewed information about the profitability to BFA of the Fund based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and all other sources of revenue and expense to BFA and its affiliates from the Fund’s operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, noting that the 15(c) Committee had focused on the methodology and proposed presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC from securities lending by the Fund. The Board also discussed BFA’s profit margin as reflected in the Fund’s profitability analysis and reviewed information regarding economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Fund and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.
Economies of Scale — The Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Fund’s assets, noting that the issue of economies of scale had been focused on extensively by the 15(c) Committee during its meetings and addressed by management. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 59 |
Table of Contents
Board Review and Approval of Investment Advisory
Contract (Unaudited) (Continued)
iSHARES®, INC.
with the iShares funds through breakpoints, waivers, or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BFA’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished between fixed and variable costs, and explained how the nature of such costs may impact the existence of scale benefits. The Board noted that the Advisory Contract for the Fund already provided for breakpoints in the Fund’s investment advisory fee rates as the assets of the Fund, on an aggregated basis with the assets of certain other iShares funds, increase. The Board noted that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding new or revised breakpoints in the future. Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider this issue at least annually, concluded that the structure of the investment advisory fees reflects appropriate sharing of potential economies of scale with the Fund’s shareholders and supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end and closed-end funds registered under the 1940 Act (including sub- advised funds), collective trust funds and institutional separate accounts (together, the “Other Accounts”). The Board noted that BFA and its affiliates do not manage Other Accounts with a substantially similar investment objective and strategy as the Fund. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Fund, including in terms of the different generally more extensive services provided, as well as other significant differences in the approach of BFA and its affiliates to the Fund, on one hand, and Other Accounts, on the other. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks of managing and providing other services to the Fund, as a publicly traded exchange traded fund, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rates under the Advisory Contract for the Fund were generally higher than the investment advisory/management fee rates for the Other Accounts that are institutional clients of BFA (or its affiliates) and concluded that the differences appeared to be consistent with the factors discussed.
Other Benefits to BFA and/or its Affiliates — The Board reviewed ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Fund by BFA, such as payment of revenue to BTC, the Fund’s securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Fund in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board noted that BFA generally does 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 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. The Board concluded that any such ancillary benefits would not be disadvantageous to the Fund’s shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.
Based on the considerations described above, the Board determined that the investment advisory fee rates under the Advisory Contract do not constitute fees that are so disproportionately large as to bear no reasonable relationship to the services rendered and that could not
60 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Board Review and Approval of Investment Advisory
Contract (Unaudited) (Continued)
iSHARES®, INC.
have been the product of arm’s-length bargaining, and concluded that it is in the best interest of the Fund and its shareholders to approve the continuance of the Advisory Contract for the coming year.
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 61 |
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 | ||||||||||||||||||||||||
All Country World | $ | 0.53103 | $ | — | $ | — | $ | 0.53103 | 100 | % | — | % | — | % | 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 are 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 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.
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Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI All Country World Minimum Volatility Index Fund
Period Covered: January 1, 2012 through June 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 3.0% | 2 | 1.60 | % | |||||
Greater than 2.5% and Less than 3.0% | 1 | 0.80 | ||||||
Greater than 2.0% and Less than 2.5% | 6 | 4.80 | ||||||
Greater than 1.5% and Less than 2.0% | 3 | 2.40 | ||||||
Greater than 1.0% and Less than 1.5% | 15 | 12.00 | ||||||
Greater than 0.5% and Less than 1.0% | 39 | 31.20 | ||||||
Between 0.5% and –0.5% | 56 | 44.80 | ||||||
Less than –0.5% and Greater than –1.0% | 2 | 1.60 | ||||||
Less than –1.0% and Greater than –1.5% | 1 | 0.80 | ||||||
|
|
|
| |||||
125 | 100.00 | % | ||||||
|
|
|
|
iShares MSCI Emerging Markets EMEA Index Fund
Period Covered: April 1, 2012 through June 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 1.5% and Less than 2.0% | 3 | 4.76 | % | |||||
Greater than 1.0% and Less than 1.5% | 8 | 12.70 | ||||||
Greater than 0.5% and Less than 1.0% | 10 | 15.87 | ||||||
Between 0.5% and –0.5% | 29 | 46.03 | ||||||
Less than –0.5% and Greater than –1.0% | 9 | 14.29 | ||||||
Less than –1.0% and Greater than –1.5% | 3 | 4.76 | ||||||
Less than –1.5% | 1 | 1.59 | ||||||
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|
|
| |||||
63 | 100.00 | % | ||||||
|
|
|
|
iShares MSCI World Index Fund
Period Covered: April 1, 2012 through June 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 1.5% and Less than 2.0% | 10 | 15.87 | % | |||||
Greater than 1.0% and Less than 1.5% | 14 | 22.23 | ||||||
Greater than 0.5% and Less than 1.0% | 29 | 46.03 | ||||||
Between 0.5% and –0.5% | 10 | 15.87 | ||||||
|
|
|
| |||||
63 | 100.00 | % | ||||||
|
|
|
|
SUPPLEMENTAL INFORMATION | 63 |
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 he or she resigns, is removed, dies, retires or becomes incapacitated. The President, Treasurer and Secretary shall each hold office until their successors are chosen and qualified, and all other officers shall hold office until he or she resigns or is removed. Directors who are not interested persons (as defined in the 1940 Act) are referred to as Independent Directors.
The registered investment companies advised by BFA or its affiliates are organized into one complex of closed-end funds, two complexes of open-end funds and one complex of exchange-traded funds (“Exchange-Traded Fund Complex”) (each, a “BlackRock Fund Complex”). Each Fund is included in the BlackRock Fund Complex referred to as the Exchange-Traded Fund Complex. Each Director of iShares, Inc. also serves as a Trustee of iShares Trust, a Director of iShares MSCI Russia Capped Index Fund, Inc. and a Trustee of iShares U.S. ETF Trust and, as a result, oversees a total of 276 funds within the Exchange-Traded 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 Robert H. Silver 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-iShares (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 (55) | 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); President of Board of Directors, Hope & Heroes Children’s Cancer Fund (since 2002); President of the Board of Directors, Periwinkle Theatre for Youth (since 1983). | Director of BlackRock, Inc. (since 2007); Trustee of iShares Trust (since 2009); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). | |||
Michael Lathamb (47) | Director (since 2010); President (since 2007). | Chairman of iShares, BlackRock (since 2011); Global Chief Executive Officer of iShares, BlackRock (2010-2011); Managing Director, BlackRock (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, BGI (2003-2007). | Trustee of iShares Trust (since 2010); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). |
a | Robert S. Kapito is deemed to be an “interested person” (as defined in the 1940 Act) of the Trust 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 Trust due to his affiliations with BlackRock, Inc. and its affiliates. |
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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 | |||
Robert H. Silver (57) | Director (since 2007); Independent Chairman (since 2012). | President and Co-Founder of The Bravitas Group, Inc. (since 2006); Director and Vice Chairman of the YMCA of Greater NYC (2001-2011); Broadway Producer (2006-2011); 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); President and Chief Operating Officer of UBS Financial Services Inc. (formerly Pain Webber Inc.) (2004-2005) and various executive positions with UBS and its affiliates (1988-2005); CPA and Audit Manager of KPMG, LLP (formerly Peat Marwick Mitchell) (1977-1983). | Trustee of iShares Trust (since 2007); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Independent Chairman of iShares, Inc., iShares MSCI Russia Capped Index Fund, Inc. and iShares U.S. ETF Trust (since 2012). | |||
Cecilia H. Herbert (63) | Director (since 2005); Nominating and Governance Committee Chair and Equity Plus Committee Chair (since 2012). | Director (since 1998) and President (2007-2011) of the Board of Directors, Catholic Charities CYO; Trustee (since 2002) and Chair of the Finance Committee (2006-2009) and Investment Committee (since 2006), The Thacher School; Trustee of Pacific Select Funds (2004-2005); Member (since 1994) and Chair (1994-2005) of the Investment Committee, Archdiocese of San Francisco. | Trustee of iShares Trust (since 2005); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of Forward Funds (35 portfolios) (since 2009). | |||
Charles A. Hurty (69) | Director (since 2005); Audit Committee Chair (since 2006). | Retired; Partner, KPMG LLP (1968-2001). | Trustee of iShares Trust (since 2005); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of GMAM Absolute Return Strategy Fund (1 portfolio) (since 2002); Director of SkyBridge Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (1 portfolio) (since 2002). | |||
John E. Kerrigan (57) | Director (since 2005); Fixed Income Plus Committee Chair (since 2012). | Chief Investment Officer, Santa Clara University (since 2002). | Trustee of iShares Trust (since 2005); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). |
DIRECTORAND OFFICER INFORMATION | 65 |
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 | |||
John E. Martinez (51) | Director (since 2003); Securities Lending Committee Chair (since 2012). | Director of FirstREX Agreement Corp. (formerly EquityRock, Inc.) (since 2005). | Trustee of iShares Trust (since 2003); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). | |||
George G.C. Parker (73) | Director (since 2002). | Dean Witter Distinguished Professor of Finance, Emeritus, Stanford University Graduate School of Business (Professor since 1973; Emeritus since 2006). | Trustee of iShares Trust (since 2002); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of Tejon Ranch Company (since 1999); Director of Threshold Pharmaceuticals (since 2004); Director of Colony Financial, Inc. (since 2009); Director of First Republic Bank (since 2010). | |||
Madhav V. Rajan (48) | Director (since 2011); 15(c) Committee Chair (since 2012). | Robert K. Jaedicke Professor of Accounting and Senior Associate Dean for Academic Affairs and Head of MBA Program, Stanford University Graduate School of Business (since 2001); Professor of Law (by courtesy), Stanford Law School (since 2005); Visiting Professor, University of Chicago (Winter 2007-2008). | Trustee of iShares Trust (since 2011); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2011); Trustee of iShares U.S. ETF Trust (since 2011). |
66 | 2012 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 | ||
Edward B. Baer (44) | Vice President and Chief Legal Officer (since 2012). | Managing Director, BlackRock (since 2006). | ||
Eilleen M. Clavere (60) | Secretary (since 2007). | Director, BlackRock (since 2009); Director of Legal Administration of Intermediary Investor Business, BGI (2006-2009). | ||
Jack Gee (53) | Treasurer and Chief Financial Officer (since 2008). | Managing Director, BlackRock (since 2009); Senior Director of Fund Administration of Intermediary Investor Business, BGI (2009); Director of Fund Administration of Intermediary Investor Business, BGI (2004-2009). | ||
Amy Schioldager (50) | Executive Vice President (since 2007). | Managing Director, BlackRock (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008). | ||
Ira P. Shapiro (49) | Vice President (since 2007). | Managing Director, BlackRock (since 2009); Chief Legal Officer, Exchange-Traded Funds Complex (2007-2012); Associate General Counsel, BGI (2004-2009). | ||
Scott Radell (43) | Executive Vice President (since 2012). | Managing Director, BlackRock (since 2009); Head of Portfolio Solutions, BGI (2007-2009); Credit Portfolio Manager, BGI (2005-2007). |
DIRECTORAND OFFICER INFORMATION | 67 |
Table of Contents
Notes:
68 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes:
NOTES | 69 |
Table of Contents
Notes:
70 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
For more information visit www.iShares.com
or call 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 BlackRock Investments, LLC (together with its affiliates, “BlackRock”).
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds. BlackRock is not affiliated with the company listed above.
A description of the policies that the 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 daily and monthly basis on the Funds’ website.
©2012 BlackRock. All rights reserved. iShares® and BlackRock® are registered trademarks of BlackRock. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.
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iS-AR-811-0812
Table of Contents
![]() | August 31, 2012 |
2012 Annual Report
iShares, Inc.
iShares MSCI Global Agriculture Producers Fund | VEGI | NYSE Arca
iShares MSCI Global Energy Producers Fund | FILL | NYSE Arca
iShares MSCI Global Gold Miners Fund | RING | NYSE Arca
iShares MSCI Global Select Metals & Mining Producers Fund | PICK | NYSE Arca
iShares MSCI Global Silver Miners Fund | SLVP | NYSE Arca
Table of Contents
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37 | ||||
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45 | ||||
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62 | ||||
64 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI GLOBAL AGRICULTURE PRODUCERS FUND
Performance as of August 31, 2012
Cumulative Total Returns | ||||||||||
Inception to 8/31/12 | ||||||||||
NAV | MARKET | INDEX | ||||||||
0.97% | 1.42% | 1.15% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
“Cumulative Total Returns” represent the total change in value of an investment over the period indicated and are calculated from an inception date of 1/31/12.
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 (2/2/12), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 5 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI GLOBAL AGRICULTURE PRODUCERS FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector*/Investment Type | Percentage of Net Assets |
Chemicals | 55.99 | % | ||
Agriculture | 16.44 | |||
Machinery | 11.81 | |||
Food | 8.72 | |||
Auto Manufacturers | 2.28 | |||
Transportation | 1.37 | |||
Exchange-Traded Funds | 0.80 | |||
Other** | 2.32 | |||
Short-Term and Other Net Assets | 0.27 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
Monsanto Co. | 12.31 | % | ||
Potash Corp. of Saskatchewan Inc. (Canada) | 9.31 | |||
Syngenta AG Registered (Switzerland) | 8.49 | |||
Deere & Co. | 7.52 | |||
Archer-Daniels-Midland Co. | 4.67 | |||
Mosaic Co. (The) | 4.55 | |||
Agrium Inc. (Canada) | 4.13 | |||
CF Industries Holdings Inc. | 3.61 | |||
Kubota Corp. (Japan) | 2.70 | |||
Uralkali OJSC (Russia) | 2.68 | |||
|
| |||
TOTAL | 59.97 | % | ||
|
|
* | Sector classifications used to describe the Fund’s portfolio allocation may differ from sector classifications used to describe the Fund’s corresponding index in management’s commentary. As a result, sector allocation percentages for the Fund may differ from those referenced for the Index in the commentary. |
** | Other includes sectors which individually represent less than 1% of net assets. |
The iShares MSCI Global Agriculture Producers Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI ACWI Select Agriculture Producers Investable Market Index (the “Index”). The Index is designed to measure the combined performance of equity securities of companies primarily engaged in the business of agriculture in both developed and 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 period from January 31, 2012 (inception date of the Fund) through August 31, 2012 (the “reporting period”), the total return for the Fund was 0.97%, net of fees, while the total return for the Index was 1.15%.
As represented by the Index, global agriculture stocks advanced modestly for the reporting period. The reporting period was characterized by a broad global economic slowdown, which led to reduced demand for commodities in general. One factor behind this trend was the continuing sovereign debt crisis in Europe, which had a negative impact on financial institutions around the globe and led to a meaningful slowdown in European economic growth, including recessions in the most fiscally challenged countries in the region. The weaker economic environment in Europe weighed on Continental demand for commodities, including agricultural products. Decelerating economic growth in the U.S. and China also contributed to reduced global demand for agriculture-related products.
While demand declined, the supply of agricultural products also weakened during the reporting period. A late frost in the spring of 2012, followed by drought conditions in the summer (including the worst drought in the U.S. since 1956), led to expectations of lower yields for grains and other food crops around the world.
As a result, prices for many agricultural commodities increased during the reporting period. The prices of barley and wheat both increased by more than 25%, while corn prices rose by 22% and soybean prices surged by more than 40% for the reporting period. The most significant exception was sugar prices, which fell by 15% for the reporting period as sugar crops held up better than other crops in drought conditions. Overall, according to data from the International Monetary Fund (“IMF”), prices for food and beverage commodities increased by approximately 11% for the reporting period.
6 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI GLOBAL AGRICULTURE PRODUCERS FUND
Currency fluctuations detracted overall from Index performance as the U.S. dollar generally strengthened during the reporting period, which lowered international equity returns for U.S. investors. The U.S. is the largest country weighting in the Index, comprising approximately 40% of the Index as of August 31, 2012. In the remainder of the Index, top country weightings included Canada, Switzerland, Japan, and the eurozone. The U.S. dollar appreciated by 1% against the Canadian dollar, 3.5% versus the Swiss franc, 2.5% against the Japanese yen, and 4% versus the euro.
From a sector perspective, materials stocks comprised approximately 55% of the Index as of the end of the reporting period. Many of these materials companies produce agricultural chemicals, fertilizers, and other raw materials used in agriculture production. According to IMF data, the prices of agricultural raw materials declined by approximately 2% for the reporting period. Food, beverage, and tobacco makers comprised just over 25% of the Index, while capital goods companies — which typically produce agricultural machinery and equipment — made up another 15% of the Index.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 7 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI GLOBAL ENERGY PRODUCERS FUND
Performance as of August 31, 2012
Cumulative Total Returns | ||||||||||
Inception to 8/31/12 | ||||||||||
NAV | MARKET | INDEX | ||||||||
(3.77)% | (4.09)% | (3.76)% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
“Cumulative Total Returns” represent the total change in value of an investment over the period indicated and are calculated from an inception date of 1/31/12.
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 (2/2/12), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
8 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI GLOBAL ENERGY PRODUCERS FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector | Percentage of Net Assets |
Oil & Gas | 96.74 | % | ||
Coal | 2.06 | |||
Other* | 0.63 | |||
Short-Term and Other Net Assets | 0.57 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
* | Other includes sectors which individually represent less than 1% of net assets. |
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
Exxon Mobil Corp. | 15.81 | % | ||
Chevron Corp. | 8.57 | |||
BP PLC (United Kingdom) | 5.14 | |||
Royal Dutch Shell PLC Class A (United Kingdom) | 4.93 | |||
Total SA (France) | 4.13 | |||
Royal Dutch Shell PLC Class B (United Kingdom) | 3.77 | |||
BG Group PLC (United Kingdom) | 2.68 | |||
ConocoPhillips | 2.66 | |||
Occidental Petroleum Corp. | 2.66 | |||
Eni SpA (Italy) | 2.18 | |||
|
| |||
TOTAL | 52.53 | % | ||
|
|
The iShares MSCI Global Energy Producers Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI ACWI Select Energy Producers Investable Market Index (the “Index”). The Index is designed to measure the combined performance of equity securities of companies primarily engaged in the business of energy exploration and production in both developed and 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 period from January 31, 2012 (inception date of the Fund) through August 31, 2012 (the “reporting period”), the total return for the Fund was (3.77)%, net of fees, while the total return for the Index was (3.76)%.
As represented by the Index, global energy exploration and production stocks declined for the reporting period. The decline in energy stocks reflected a broad global economic slowdown, which led to reduced demand for commodities in general. One factor behind this trend was the continuing sovereign debt crisis in Europe, which had a negative impact on financial institutions around the globe and led to a meaningful slowdown in European economic growth, including recessions in the most fiscally challenged countries in the region. The weaker economic environment in Europe weighed on Continental demand for energy. Decelerating economic growth in the U.S. and China also contributed to reduced global demand for energy.
Nonetheless, energy prices held up reasonably well during the reporting period. The price of oil declined by just 2%, falling from $98.50 per barrel at the beginning of the reporting period to $96.50 as of August 31, 2012, while natural gas prices increased by 8%, rising from $2.51 per million British thermal units (“BTUs”) at the beginning of the period to $2.72 as of August 31, 2012. However, both oil and natural gas prices experienced significant volatility during the reporting period. Oil prices peaked in early March of 2012 at $109 per barrel, then dipped as low as $77 a barrel in late June of 2012 before rebounding over the last two months of the reporting period. Meanwhile, natural gas followed an opposite pattern, falling to $1.82 per million BTUs in mid-April of 2012, then surging to $3.20 per million BTUs in late July of 2012 before falling back over the last month of the reporting period.
Another contributing factor to the overall decline in the Index was a stronger U.S. dollar, which lowered international equity returns for U.S. investors. The U.S. is the largest country weighting in the Index, comprising approximately 45% of the Index as of August 31, 2012. In the remainder of the Index, top country weightings included the U.K., Canada, China, and France. The U.S. dollar declined by 0.5% versus the British pound during the reporting period, but appreciated by 1% against the Canadian dollar and Chinese yuan and by 4% versus the euro.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 9 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI GLOBAL ENERGY PRODUCERS FUND
Other factors influencing the performance of energy stocks during the reporting period included a relatively mild winter and attractive dividend payouts. Warmer-than-normal temperatures and below-average snowfall across the Midwest and Northeast regions of the U.S. contributed to lower demand for energy. On the positive side, however, the Index’s dividend yield as of August 31, 2012 was approximately 3%, which helped mitigate the overall decline in the Index.
10 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI GLOBAL GOLD MINERS FUND
Performance as of August 31, 2012
Cumulative Total Returns | ||||||||||
Inception to 8/31/12 | ||||||||||
NAV | MARKET | INDEX | ||||||||
(19.45)% | (18.85)% | (19.34)% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
“Cumulative Total Returns” represent the total change in value of an investment over the period indicated and are calculated from an inception date of 1/31/12.
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 (2/2/12), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 11 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI GLOBAL GOLD MINERS FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector | Percentage of Net Assets |
Mining | 99.82 | % | ||
Short-Term and Other Net Assets | 0.18 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
Barrick Gold Corp. (Canada) | 15.70 | % | ||
Goldcorp Inc. (Canada) | 13.22 | |||
Newmont Mining Corp. | 9.63 | |||
Newcrest Mining Ltd. (Australia) | 7.27 | |||
Yamana Gold Inc. (Canada) | 4.79 | |||
Kinross Gold Corp. (Canada) | 4.44 | |||
Eldorado Gold Corp. (Canada) | 4.40 | |||
Agnico-Eagle Mines Ltd. (Canada) | 4.08 | |||
AngloGold Ashanti Ltd. (South Africa) | 3.97 | |||
Gold Fields Ltd. (South Africa) | 3.94 | |||
|
| |||
TOTAL | 71.44 | % | ||
|
|
The iShares MSCI Global Miners Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI ACWI Select Gold Miners Investable Market Index (the “Index”). The Index is designed to measure the combined performance of equity securities of companies primarily engaged in the business of gold mining in both developed and 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 period from January 31, 2012 (inception date of the Fund) through August 31, 2012 (the “reporting period”), the total return for the Fund was (19.45)%, net of fees, while the total return for the Index was (19.34)%.
As represented by the Index, global gold mining stocks posted double-digit declines for the reporting period. The decline in gold mining stocks reflected a broad global economic slowdown, which led to reduced demand for gold. One factor behind this trend was the continuing sovereign debt crisis in Europe, which had a negative impact on financial institutions around the globe and led to a meaningful slowdown in European economic growth, including recessions in the most fiscally challenged countries in the region. The weaker economic environment in Europe weighed on Continental demand for gold. Although demand for gold typically increases when inflation or inflation expectations rise, decelerating economic growth on a global basis generally curbed inflation concerns and also weighed on demand for gold during the reporting period.
For the reporting period, the price of gold fell by just 2% overall, but there was some meaningful volatility along the way. At the beginning of the reporting period, the price of gold was approximately $1,730 per ounce, but fell by almost 10% to $1,575 per ounce in mid-May of 2012 as the U.S., China, and Europe all reported a slowdown in economic activity. The price of gold hovered around this level until the final six weeks of the reporting period, when the price rose to just under $1,700 per ounce as of August 31, 2012.
Gold mining stocks tend to be more volatile than the price of the base metal, so stock prices fell more sharply as the price of gold declined. In addition, because of geopolitical risks and variability in annual production levels, gold mining stocks are perceived to be among the riskier segments of the global equity markets. During the reporting period, slowing global growth and turmoil in Europe led to significant bouts of risk aversion in the global equity markets, and gold mining stocks suffered as a result. Rising production costs and the threat of higher taxes on mining operations in a number of countries also detracted from Index performance.
12 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI GLOBAL GOLD MINERS FUND
Another contributing factor to the overall decline in the Index was a stronger U.S. dollar, which lowered international equity returns for U.S. investors. Because gold is generally priced in U.S. dollars, the stronger U.S. dollar made gold more expensive for foreign buyers. The U.S. dollar appreciated by 1% against the Canadian dollar, 2% against the Australian dollar, and 7% against the South African rand. Canada, Australia, and South Africa comprised approximately three-quarters of the Index as of August 31, 2012.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 13 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI GLOBAL SELECT METALS & MINING PRODUCERS FUND
Performance as of August 31, 2012
Cumulative Total Returns | ||||||||||
Inception to 8/31/12 | ||||||||||
NAV | MARKET | INDEX | ||||||||
(22.76)% | (21.87)% | (22.92)% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
“Cumulative Total Returns” represent the total change in value of an investment over the period indicated and are calculated from an inception date of 1/31/12.
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 (2/2/12), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
14 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI GLOBAL SELECT METALS & MINING PRODUCERS FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector | Percentage of Net Assets |
Mining | 67.17 | % | ||
Iron & Steel | 28.85 | |||
Metal Fabricate & Hardware | 1.55 | |||
Other* | 1.94 | |||
Short-Term and Other Net Assets | 0.49 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
* | Other includes sectors which individually represent less than 1% of net assets. |
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
BHP Billiton Ltd. (Australia) | 12.58 | % | ||
BHP Billiton PLC (United Kingdom) | 7.31 | |||
Rio Tinto PLC (United Kingdom) | 6.89 | |||
Anglo American PLC (United Kingdom) | 4.59 | |||
Freeport-McMoRan Copper & Gold Inc. | 4.06 | |||
Vale SA Class A (Preferred) (Brazil) | 3.96 | |||
Xstrata PLC (United Kingdom) | 3.78 | |||
Glencore International PLC (United Kingdom) | 2.77 | |||
Rio Tinto Ltd. (Australia) | 2.63 | |||
Vale SA (Brazil) | 2.54 | |||
|
| |||
TOTAL | 51.11 | % | ||
|
|
The iShares MSCI Global Select Metals & Mining Producers Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI ACWI Select Metals & Mining Producers Ex Gold & Silver Investable Market Index (the “Index”). The Index is designed to measure the combined performance of equity securities of companies primarily involved in the extraction and production of diversified metals, aluminum, steel, and precious metals and minerals, excluding gold and silver, in both developed and 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 period from January 31, 2012 (inception date of the Fund) through August 31, 2012 (the “reporting period”), the total return for the Fund was (22.76)%, net of fees, while the total return for the Index was (22.92)%.
As represented by the Index, global metals and mining stocks declined by more than 20% for the reporting period. The decline in metals and mining stocks reflected a broad global economic slowdown, which led to reduced demand for commodities in general and metals in particular. One factor behind this trend was the continuing sovereign debt crisis in Europe, which had a negative impact on financial institutions around the globe and led to a meaningful slowdown in European economic growth, including recessions in the most fiscally challenged countries in the region. The weaker economic environment in Europe weighed on Continental demand for metals.
As a result, metals prices fell during the reporting period. The price of copper declined by about 7%, the price of lead dipped by approximately 10%, the price of aluminum fell by roughly 14%, and the prices for nickel and iron ore slumped by more than 20%. In addition, the prices for various types of steel declined by 10% to 15% during the reporting period.
Metals and mining stocks tend to be more volatile than the price of the underlying base metals because there are greater risks involved — changing production costs, geopolitical risks (including the threat of nationalization or higher taxes on mining operations), and variability in annual production levels can influence metals and mining stocks as much as the prices of the underlying metals. During the reporting period, slowing global growth and turmoil in Europe led to significant bouts of risk aversion in the global equity markets, and metals and mining stocks suffered as a result.
Another contributing factor to the overall decline in the Index was a stronger U.S. dollar, which lowered international equity returns for U.S. investors. Although the U.S. dollar declined by 0.5% versus the British pound during the reporting period (the U.K. was the largest country weighting in the Index as of August 31, 2012), the U.S. dollar appreciated by 2% against the Australian dollar, 2.5% versus the Japanese yen, and 16% against the Brazilian real. Australia, Japan, and Brazil comprised more than one-third of the Index as of August 31, 2012.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 15 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI GLOBAL SILVER MINERS FUND
Performance as of August 31, 2012
Cumulative Total Returns | ||||||||||
Inception to 8/31/12 | ||||||||||
NAV | MARKET | INDEX | ||||||||
(15.18)% | (16.67)% | (15.01)% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
“Cumulative Total Returns” represent the total change in value of an investment over the period indicated and are calculated from an inception date of 1/31/12.
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 (2/2/12), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
16 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI GLOBAL SILVER MINERS FUND
PORTFOLIO ALLOCATION
As of 8/31/12
Sector | Percentage of Net Assets |
Mining | 99.82 | % | ||
Short-Term and Other Net Assets | 0.18 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/12
Security | Percentage of Net Assets |
Silver Wheaton Corp. (Canada) | 21.09 | % | ||
Compania de Minas Buenaventura SA SP ADR (Peru) | 10.33 | |||
Industrias Penoles SAB de CV (Mexico) | 8.45 | |||
Fresnillo PLC (United Kingdom) | 5.46 | |||
First Majestic Silver Corp. (Canada) | 4.71 | |||
Coeur d’Alene Mines Corp. | 4.71 | |||
Pan American Silver Corp. (Canada) | 4.59 | |||
AuRico Gold Inc. (Canada) | 4.29 | |||
Tahoe Resources Inc. (Canada) | 4.19 | |||
Hecla Mining Co. | 3.78 | |||
|
| |||
TOTAL | 71.60 | % | ||
|
|
The iShares MSCI Global Silver Miners Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI ACWI Select Silver Miners Investable Market Index (the “Index”). The Index is designed to measure the combined performance of equity securities of companies primarily engaged in the business of silver mining in both developed and 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 period from January 31, 2012 (inception date of the Fund) through August 31, 2012 (the “reporting period”), the total return for the Fund was (15.18)%, net of fees, while the total return for the Index was (15.01)%.
As represented by the Index, global silver mining stocks posted double-digit declines for the reporting period. The decline in silver mining stocks reflected a broad global economic slowdown, which led to reduced demand for silver. One factor behind this trend was the continuing sovereign debt crisis in Europe, which had a negative impact on financial institutions around the globe and led to a meaningful slowdown in European economic growth, including recessions in the most fiscally challenged countries in the region. The weaker economic environment in Europe weighed on Continental demand for silver. Decelerating economic growth in the U.S. and China also contributed to reduced global demand for silver.
For the reporting period, the price of silver fell by approximately 9% overall, but there was even greater volatility along the way. At the beginning of the reporting period, the price of silver was $33.60 per ounce, but fell by 20% to $26.67 per ounce in mid-July of 2012 as the U.S., China, and Europe all reported a slowdown in economic activity. The price of silver hovered around this level until the final two weeks of the reporting period, when it rose to $30.50 per ounce as of August 31, 2012.
Silver mining stocks tend to be more volatile than the price of the base metal, so stock prices fell more sharply as the price of silver declined. In addition, because of geopolitical risks and variability in annual production levels, silver mining stocks are perceived to be among the riskier segments of the global equity markets. During the reporting period, slowing global growth and turmoil in Europe led to significant bouts of risk aversion in the global equity markets, and silver mining stocks suffered as a result.
Currency fluctuations were mixed but detracted overall from Index performance as the U.S. dollar generally strengthened during the reporting period. A stronger U.S. dollar lowered international equity returns for U.S. investors. Because silver is generally priced in U.S. dollars, the stronger U.S. dollar made silver more expensive for foreign buyers. Among the countries represented in the Index, the U.S. dollar appreciated by 1% against the Canadian dollar (Canada comprised approximately half of the Index as of August 31, 2012) and 1.5% against the Mexican peso, but depreciated by 0.5% against the British pound and 3% against the Peruvian sol.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 17 |
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, 2012 to August 31, 2012.
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 Fund | Beginning Account Value (3/1/12) | Ending Account Value (8/31/12) | Annualized Expense Ratio | Expenses Paid During Period a | ||||||||||||
Global Agriculture Producers | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 979.40 | 0.38 | % | $ | 1.89 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,023.20 | 0.38 | 1.93 | ||||||||||||
Global Energy Producers | ||||||||||||||||
Actual | 1,000.00 | 908.70 | 0.39 | 1.87 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,023.20 | 0.39 | 1.98 | ||||||||||||
Global Gold Miners | ||||||||||||||||
Actual | 1,000.00 | 805.80 | 0.39 | 1.77 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,023.20 | 0.39 | 1.98 | ||||||||||||
Global Select Metals & Mining Producers | ||||||||||||||||
Actual | 1,000.00 | 760.40 | 0.39 | 1.73 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,023.20 | 0.39 | 1.98 |
18 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Shareholder Expenses (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Fund | Beginning Account Value (3/1/12) | Ending Account Value (8/31/12) | Annualized Expense Ratio | Expenses Paid During Period a | ||||||||||||
Global Silver Miners | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 826.60 | 0.39 | % | $ | 1.79 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,023.20 | 0.39 | 1.98 |
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 (366 days). |
SHAREHOLDER EXPENSES | 19 |
Table of Contents
iSHARES® MSCI GLOBAL AGRICULTURE PRODUCERS FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 97.43% |
| |||||||
AUSTRALIA — 2.19% |
| |||||||
Australian Agricultural Co. Ltd.a | 5,872 | $ | 7,828 | |||||
GrainCorp Ltd. | 5,300 | 50,501 | ||||||
Incitec Pivot Ltd. | 42,996 | 129,304 | ||||||
Nufarm Ltd. | 4,376 | 26,456 | ||||||
Tassal Group Ltd. | 3,000 | 3,844 | ||||||
|
| |||||||
217,933 | ||||||||
BELGIUM — 0.14% | ||||||||
SIPEF NV | 168 | 13,621 | ||||||
|
| |||||||
13,621 | ||||||||
BRAZIL — 0.30% |
| |||||||
Fertilizantes Heringer SAa | 400 | 2,993 | ||||||
Sao Martinho SA | 1,200 | 14,010 | ||||||
SLC Agricola SA | 1,200 | 12,597 | ||||||
|
| |||||||
29,600 | ||||||||
CANADA — 14.92% |
| |||||||
AG Growth International Inc. | 340 | 11,170 | ||||||
Agrium Inc. | 4,188 | 411,692 | ||||||
Potash Corp. of Saskatchewan Inc. | 22,680 | 927,562 | ||||||
Viterra Inc. | 8,360 | 136,728 | ||||||
|
| |||||||
1,487,152 | ||||||||
CHILE — 0.17% |
| |||||||
AquaChile SAa | 9,384 | 5,474 | ||||||
Compania Pesquera Camanchaca SAa | 43,088 | 2,220 | ||||||
Empresas Iansa SA | 71,888 | 5,688 | ||||||
Multiexport Foods SA | 16,184 | 3,389 | ||||||
|
| |||||||
16,771 | ||||||||
CHINA — 1.04% |
| |||||||
Asian Citrus Holdings Ltd. | 24,000 | 11,387 | ||||||
China Agri-Industries Holdings Ltd. | 44,000 | 21,784 | ||||||
China BlueChemical Ltd. Class H | 48,000 | 27,663 | ||||||
China Green Holdings Ltd. | 12,000 | 2,630 | ||||||
China Modern Dairy Holdings Ltd.a | 56,000 | 14,512 | ||||||
DaChan Food Asia Ltd. | 12,000 | 1,826 | ||||||
First Tractor Co. Ltd. Class Ha | 8,000 | 6,106 | ||||||
Global Bio-Chem Technology Group Co. Ltd. | 56,000 | 5,559 | ||||||
Sinofert Holdings Ltd.b | 64,000 | 12,294 | ||||||
|
| |||||||
103,761 | ||||||||
DENMARK — 0.25% |
| |||||||
Auriga Industries A/S Class Ba | 436 | 6,527 |
Security | Shares | Value | ||||||
East Asiatic Co. Ltd. A/S | 312 | $ | 6,413 | |||||
United International Enterprises Ltd. | 72 | 12,094 | ||||||
|
| |||||||
25,034 | ||||||||
FINLAND — 0.02% |
| |||||||
HKScan OYJ Class A | 592 | 2,425 | ||||||
|
| |||||||
2,425 | ||||||||
FRANCE — 0.23% |
| |||||||
Naturex | 120 | 8,017 | ||||||
Vilmorin & Cie | 128 | 14,960 | ||||||
|
| |||||||
22,977 | ||||||||
GERMANY — 3.00% |
| |||||||
Asian Bamboo AG Bearer | 320 | 2,481 | ||||||
K+S AG Registered | 4,564 | 223,788 | ||||||
KWS Saat AG | 56 | 14,612 | ||||||
Suedzucker AG | 1,728 | 58,069 | ||||||
|
| |||||||
298,950 | ||||||||
HONG KONG — 0.02% |
| |||||||
Pacific Andes International Holdings Ltd. | 40,000 | 2,037 | ||||||
|
| |||||||
2,037 | ||||||||
INDONESIA — 1.19% |
| |||||||
PT Astra Agro Lestari Tbk | 10,000 | 23,387 | ||||||
PT Bakrie Sumatera Plantations Tbk | 398,000 | 5,593 | ||||||
PT Bisi International Tbk | 66,000 | 7,476 | ||||||
PT BW Plantation Tbk | 38,000 | 5,739 | ||||||
PT Charoen Pokphand Indonesia Tbk | 198,000 | 56,067 | ||||||
PT Japfa Comfeed Indonesia Tbk | 24,000 | 11,201 | ||||||
PT Sampoerna Agro Tbk | 18,000 | 5,003 | ||||||
PT Tunas Baru Lampung Tbk | 62,000 | 3,576 | ||||||
|
| |||||||
118,042 | ||||||||
ISRAEL — 1.60% |
| |||||||
Israel Chemicals Ltd. | 11,620 | 125,352 | ||||||
Israel Corp. Ltd. (The) | 60 | 34,426 | ||||||
|
| |||||||
159,778 | ||||||||
ITALY — 2.31% |
| |||||||
Fiat Industrial SpA | 22,488 | 226,911 | ||||||
Societa per la Bonifica dei Terreni Ferraresi e Imprese Agricole SpA | 72 | 3,293 | ||||||
|
| |||||||
230,204 | ||||||||
JAPAN — 3.97% |
| |||||||
Hokuto Corp. | 800 | 15,622 | ||||||
Iseki & Co. Ltd. | 4,000 | 9,860 |
20 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI GLOBAL AGRICULTURE PRODUCERS FUND
August 31, 2012
Security | Shares | Value | ||||||
Kubota Corp. | 28,000 | $ | 268,914 | |||||
Maruha Nichiro Holdings Inc. | 12,000 | 20,843 | ||||||
Mitsui Sugar Co. Ltd. | 1,000 | 3,308 | ||||||
Nippon Beet Sugar Manufacturing Co. Ltd. | 4,000 | 7,816 | ||||||
Nippon Meat Packers Inc. | 4,000 | 53,793 | ||||||
Sakata Seed Corp. | 1,200 | 15,632 | ||||||
|
| |||||||
395,788 | ||||||||
MALAYSIA — 3.81% |
| |||||||
Felda Global Ventures Holdings Bhda | 28,400 | 45,447 | ||||||
Genting Plantations Bhd | 6,000 | 17,840 | ||||||
Hap Seng Plantations Holdings Bhd | 4,400 | 4,253 | ||||||
IJM Plantations Bhd | 6,400 | 7,292 | ||||||
IOI Corp. Bhd | 83,200 | 136,869 | ||||||
Kim Loong Resources Bhd | 3,200 | 2,509 | ||||||
Kuala Lumpur Kepong Bhd | 12,400 | 92,231 | ||||||
Kulim Malaysia Bhd | 11,600 | 19,120 | ||||||
MSM Malaysia Holdings Bhd | 5,200 | 8,388 | ||||||
QL Resources Bhd | 9,600 | 9,986 | ||||||
Rimbunan Sawit Bhd | 11,200 | 3,692 | ||||||
Sarawak Oil Palms Bhd | 4,000 | 8,731 | ||||||
TDM Bhd | 2,400 | 2,903 | ||||||
TH Plantations Bhd | 4,800 | 3,687 | ||||||
Tradewinds Malaysia Bhd | 2,400 | 5,784 | ||||||
TSH Resources Bhd | 8,000 | 6,299 | ||||||
United Malacca Bhd | 2,000 | 4,929 | ||||||
|
| |||||||
379,960 | ||||||||
NETHERLANDS — 0.67% |
| |||||||
Nutreco NV | 916 | 67,106 | ||||||
|
| |||||||
67,106 | ||||||||
NEW ZEALAND — 0.02% |
| |||||||
PGG Wrightson Ltd.a | 7,712 | 2,231 | ||||||
|
| |||||||
2,231 | ||||||||
NORWAY — 3.51% |
| |||||||
Austevoll Seafood ASA | 2,720 | 11,645 | ||||||
Bakkafrost P/F | 608 | 4,818 | ||||||
Cermaq ASAa | 1,504 | 20,123 | ||||||
Copeinca ASA | 516 | 3,848 | ||||||
Leroey Seafood Group ASA | 508 | 10,129 | ||||||
Marine Harvest ASAa | 76,112 | 58,971 | ||||||
Yara International ASA | 4,912 | 240,491 | ||||||
|
| |||||||
350,025 |
Security | Shares | Value | ||||||
POLAND — 0.33% |
| |||||||
Kernel Holding SAa | 1,316 | $ | 26,968 | |||||
Zaklady Azotowe Pulawy SA | 180 | 6,282 | ||||||
|
| |||||||
33,250 | ||||||||
RUSSIA — 2.68% |
| |||||||
Uralkali OJSC | 34,920 | 266,839 | ||||||
|
| |||||||
266,839 | ||||||||
SINGAPORE — 2.75% |
| |||||||
China XLX Fertiliser Ltd. | 24,000 | 5,868 | ||||||
First Resources Ltd.b | 8,000 | 13,340 | ||||||
GMG Global Ltd. | 92,000 | 8,998 | ||||||
Golden Agri-Resources Ltd. | 172,000 | 97,900 | ||||||
Indofood Agri Resources Ltd. | 16,000 | 17,893 | ||||||
Wilmar International Ltd. | 52,000 | 130,479 | ||||||
|
| |||||||
274,478 | ||||||||
SOUTH AFRICA — 0.90% |
| |||||||
Afgri Ltd. | 8,908 | 5,813 | ||||||
Astral Foods Ltd. | 956 | 11,972 | ||||||
Illovo Sugar Ltd. | 5,572 | 19,899 | ||||||
Tongaat Hulett Ltd. | 2,784 | 46,904 | ||||||
Zeder Investments Ltd. | 14,684 | 5,000 | ||||||
|
| |||||||
89,588 | ||||||||
SOUTH KOREA — 0.23% |
| |||||||
Dongwon Industries Co. Ltd. | 32 | 6,444 | ||||||
Harim Co. Ltd. | 732 | 2,184 | ||||||
Namhae Chemical Corp. | 880 | 7,283 | ||||||
Sajo Industries Co. Ltd. | 48 | 2,475 | ||||||
Silla Co. Ltd. | 200 | 2,997 | ||||||
TS Corp. | 80 | 1,505 | ||||||
|
| |||||||
22,888 | ||||||||
SPAIN — 0.05% |
| |||||||
Pescanova SA | 276 | 4,822 | ||||||
|
| |||||||
4,822 | ||||||||
SWEDEN — 0.05% |
| |||||||
Black Earth Farming Ltd. SDRa | 2,384 | 4,878 | ||||||
|
| |||||||
4,878 | ||||||||
SWITZERLAND — 8.49% |
| |||||||
Syngenta AG Registered | 2,504 | 846,145 | ||||||
|
| |||||||
846,145 | ||||||||
TAIWAN — 0.63% |
| |||||||
Sesoda Corp. | 4,000 | 4,387 |
SCHEDULESOF INVESTMENTS | 21 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI GLOBAL AGRICULTURE PRODUCERS FUND
August 31, 2012
Security | Shares | Value | ||||||
Sinon Corp. | 12,000 | $ | 5,509 | |||||
Taiwan Fertilizer Co. Ltd. | 20,000 | 49,347 | ||||||
Taiyen Biotech Co. Ltd. | 4,000 | 3,005 | ||||||
|
| |||||||
62,248 | ||||||||
THAILAND — 0.91% |
| |||||||
Charoen Pokphand Foods PCL NVDR | 82,000 | 83,086 | ||||||
GFPT PCL NVDR | 11,600 | 2,702 | ||||||
Khon Kaen Sugar Industry PCL NVDR | 13,200 | 5,182 | ||||||
|
| |||||||
90,970 | ||||||||
TURKEY — 0.12% |
| |||||||
Bagfas Bandirma Gubre Fabrikalari AS | 60 | 5,710 | ||||||
Gubre Fabrikalari TASa | 788 | 5,786 | ||||||
|
| |||||||
11,496 | ||||||||
UNITED STATES — 40.93% |
| |||||||
AGCO Corp.a | 2,552 | 107,414 | ||||||
Alico Inc. | 108 | 3,416 | ||||||
American Vanguard Corp. | 588 | 17,299 | ||||||
Archer-Daniels-Midland Co. | 17,388 | 465,129 | ||||||
Bunge Ltd. | 3,836 | 244,161 | ||||||
Cal-Maine Foods Inc. | 376 | 15,108 | ||||||
CF Industries Holdings Inc. | 1,736 | 359,369 | ||||||
Darling International Inc.a | 3,112 | 51,721 | ||||||
Deere & Co. | 9,980 | 749,598 | ||||||
Dole Food Co. Inc.a | 1,200 | 15,456 | ||||||
Fresh Del Monte Produce Inc. | 1,068 | 26,380 | ||||||
Ingredion Inc. | 2,024 | 108,952 | ||||||
Intrepid Potash Inc.a | 1,472 | 33,017 | ||||||
Lindsay Corp. | 360 | 23,530 | ||||||
Monsanto Co. | 14,084 | 1,226,857 | ||||||
Mosaic Co. (The) | 7,828 | 453,320 | ||||||
Pilgrim’s Pride Corp.a | 1,600 | 8,512 | ||||||
Sanderson Farms Inc. | 516 | 22,714 | ||||||
Scotts Miracle-Gro Co. (The) Class A | 1,132 | 47,148 | ||||||
Smithfield Foods Inc.a | 4,020 | 77,666 | ||||||
Titan International Inc. | 1,016 | 21,214 | ||||||
|
| |||||||
4,077,981 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $9,794,570) |
| 9,708,978 |
Security | Shares | Value | ||||||
PREFERRED STOCKS — 1.50% |
| |||||||
CHILE — 1.50% |
| |||||||
Sociedad Quimica y Minera de Chile SA Series B | 2,424 | $ | 149,432 | |||||
|
| |||||||
149,432 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS | ||||||||
(Cost: $144,922) | 149,432 | |||||||
INVESTMENT COMPANIES — 0.80% | ||||||||
EXCHANGE-TRADED FUNDS — 0.80% | ||||||||
iShares S&P India Nifty 50 Index Fundc | 3,572 | 79,977 | ||||||
|
| |||||||
79,977 | ||||||||
|
| |||||||
TOTAL INVESTMENT COMPANIES |
| |||||||
(Cost: $82,681) |
| 79,977 | ||||||
RIGHTS — 0.00% | ||||||||
AUSTRALIA — 0.00% | ||||||||
GrainCorp Ltd.a | 358 | 156 | ||||||
|
| |||||||
156 | ||||||||
|
| |||||||
TOTAL RIGHTS |
| |||||||
(Cost: $0) |
| 156 | ||||||
SHORT-TERM INVESTMENTS — 0.31% |
| |||||||
MONEY MARKET FUNDS — 0.31% |
| |||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.23%c,d,e | 6,739 | 6,739 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.23%c,d,e | 511 | 511 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%c,d | 23,220 | 23,220 | ||||||
|
| |||||||
30,470 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $30,470) | 30,470 | |||||||
|
|
22 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI GLOBAL AGRICULTURE PRODUCERS FUND
August 31, 2012
Value | ||||||
TOTAL INVESTMENTS | ||||||
(Cost: $10,052,643) | $ | 9,969,013 | ||||
Other Assets, Less Liabilities — (0.04)% | (4,403 | ) | ||||
|
| |||||
NET ASSETS — 100.00% | $ | 9,964,610 | ||||
|
|
NVDR — Non-Voting Depositary Receipts
SDR — Swedish 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 | 23 |
Table of Contents
Schedule of Investments
iSHARES® MSCI GLOBAL ENERGY PRODUCERS FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 97.56% |
| |||||||
AUSTRALIA — 1.85% |
| |||||||
Aquila Resources Ltd.a,b | 266 | $ | 632 | |||||
Aurora Oil and Gas Ltd.a | 632 | 2,123 | ||||||
AWE Ltd. | 938 | 1,386 | ||||||
Beach Energy Ltd. | 2,211 | 2,696 | ||||||
Buru Energy Ltd.a | 324 | 924 | ||||||
Caltex Australia Ltd. | 240 | 3,874 | ||||||
Coalspur Mines Ltd.a | 560 | 347 | ||||||
Cockatoo Coal Ltd.a | 1,028 | 143 | ||||||
Dart Energy Ltd.a | 770 | 151 | ||||||
Drillsearch Energy Ltd.a | 812 | 1,208 | ||||||
Energy Resources of Australia Ltd.a | 308 | 430 | ||||||
Guildford Coal Ltd.a | 276 | 97 | ||||||
Horizon Oil Ltd.a | 1,626 | 504 | ||||||
Karoon Gas Australia Ltd.a | 312 | 1,290 | ||||||
Linc Energy Ltd.a | 812 | 445 | ||||||
Molopo Energy Ltd.a | 482 | 267 | ||||||
Nexus Energy Ltd.a | 4,072 | 547 | ||||||
Paladin Energy Ltd.a | 1,324 | 1,799 | ||||||
Roc Oil Co. Ltd.a | 1,350 | 440 | ||||||
Santos Ltd. | 1,720 | 19,962 | ||||||
Senex Energy Ltd.a | 1,285 | 943 | ||||||
White Energy Co. Ltd.a | 1,670 | 449 | ||||||
Whitehaven Coal Ltd. | 750 | 2,535 | ||||||
Woodside Petroleum Ltd. | 1,230 | 43,600 | ||||||
|
| |||||||
86,792 | ||||||||
AUSTRIA — 0.21% | ||||||||
OMV AG | 296 | 9,841 | ||||||
|
| |||||||
9,841 | ||||||||
BRAZIL — 1.39% | ||||||||
HRT Participacoes em Petroleo SAa | 400 | 917 | ||||||
OGX Petroleo e Gas Participacoes SAa | 2,400 | 7,452 | ||||||
Petroleo Brasileiro SA | 5,400 | 56,687 | ||||||
Refinaria de Petroleos Manguinhos SAa | 600 | 233 | ||||||
|
| |||||||
65,289 | ||||||||
CANADA — 11.19% | ||||||||
Advantage Oil & Gas Ltd.a | 272 | 948 | ||||||
Angle Energy Inc.a | 108 | 424 | ||||||
ARC Resources Ltd. | 528 | 12,472 | ||||||
Athabasca Oil Corp.a | 600 | 8,257 |
Security | Shares | Value | ||||||
Bankers Petroleum Ltd.a | 422 | $ | 1,146 | |||||
Baytex Energy Corp. | 214 | 9,737 | ||||||
Bellatrix Exploration Ltd.a | 174 | 584 | ||||||
Birchcliff Energy Ltd.a | 158 | 1,079 | ||||||
BlackPearl Resources Inc.a | 470 | 1,514 | ||||||
BNK Petroleum Inc.a | 188 | 185 | ||||||
Bonavista Energy Corp. | 268 | 4,489 | ||||||
Bonterra Energy Corp. | 30 | 1,336 | ||||||
C&C Energia Ltd.a | 60 | 376 | ||||||
Cameco Corp. | 718 | 15,628 | ||||||
Canacol Energy Ltd.a | 1,600 | 713 | ||||||
Canadian Natural Resources Ltd. | 1,998 | 60,718 | ||||||
Canadian Oil Sands Ltd. | 882 | 18,805 | ||||||
Celtic Exploration Ltd.a | 160 | 2,682 | ||||||
Cenovus Energy Inc. | 1,376 | 45,037 | ||||||
Cequence Energy Ltd.a | 200 | 247 | ||||||
Connacher Oil and Gas Ltd.a | 736 | 309 | ||||||
Crescent Point Energy Corp. | 580 | 24,091 | ||||||
Crew Energy Inc.a | 180 | 1,144 | ||||||
Denison Mines Corp.a | 538 | 752 | ||||||
Encana Corp. | 1,348 | 29,805 | ||||||
Enerplus Corp. | 338 | 5,322 | ||||||
Fairborne Energy Ltd.a | 126 | 169 | ||||||
Freehold Royalties Ltd. | 100 | 1,987 | ||||||
Guide Exploration Ltd.a | 172 | 279 | ||||||
Husky Energy Inc. | 620 | 16,379 | ||||||
Imperial Oil Ltd. | 552 | 25,177 | ||||||
Ithaca Energy Inc.a | 538 | 1,145 | ||||||
Ivanhoe Energy Inc.a | 476 | 338 | ||||||
Legacy Oil & Gas Inc. Class Aa | 226 | 1,482 | ||||||
MEG Energy Corp.a | 200 | 7,867 | ||||||
Nexen Inc. | 960 | 24,106 | ||||||
Niko Resources Ltd. | 86 | 1,240 | ||||||
NuVista Energy Ltd.a | 156 | 692 | ||||||
Pace Oil & Gas Ltd.a | 78 | 224 | ||||||
Pacific Rubiales Energy Corp. | 548 | 13,383 | ||||||
Paramount Resources Ltd. Class Aa | 88 | 2,148 | ||||||
Parex Resources Inc.a | 200 | 896 | ||||||
Pengrowth Energy Corp. | 881 | 5,946 | ||||||
Penn West Petroleum Ltd. | 858 | 12,155 | ||||||
PetroBakken Energy Ltd. Class A | 174 | 2,292 | ||||||
Petrobank Energy and Resources Ltd.a | 204 | 2,557 | ||||||
Petrominerales Ltd. | 180 | 1,698 |
24 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI GLOBAL ENERGY PRODUCERS FUND
August 31, 2012
Security | Shares | Value | ||||||
Peyto Exploration & Development Corp. | 242 | $ | 5,010 | |||||
Progress Energy Resources Corp. | 352 | 7,836 | ||||||
Southern Pacific Resource Corp.a | 528 | 808 | ||||||
SouthGobi Resources Ltd.a | 200 | 545 | ||||||
Sprott Resource Corp.a | 206 | 831 | ||||||
Suncor Energy Inc. | 2,824 | 88,167 | ||||||
Surge Energy Inc.a | 200 | 1,599 | ||||||
Tag Oil Ltd.a | 200 | 1,295 | ||||||
Talisman Energy Inc. | 1,932 | 26,821 | ||||||
Tourmaline Oil Corp.a | 200 | 5,589 | ||||||
TransGlobe Energy Corp.a | 116 | 1,186 | ||||||
Trilogy Energy Corp. | 96 | 2,101 | ||||||
Twin Butte Energy Ltd. | 600 | 1,569 | ||||||
Uranium One Inc.a | 850 | 2,033 | ||||||
Vermilion Energy Inc. | 194 | 8,829 | ||||||
Whitecap Resources Inc.a | 200 | 1,494 | ||||||
Zargon Oil & Gas Ltd. | 64 | 562 | ||||||
|
| |||||||
526,235 | ||||||||
CHINA — 3.40% | ||||||||
China Coal Energy Co. Class H | 8,000 | 6,663 | ||||||
China Qinfa Group Ltd.a | 4,000 | 439 | ||||||
China Shenhua Energy Co. Ltd. Class H | 6,000 | 21,853 | ||||||
CNOOC Ltd. | 32,000 | 60,565 | ||||||
Hidili Industry International Development Ltd. | 4,000 | 856 | ||||||
Kunlun Energy Co. Ltd. | 8,000 | 13,677 | ||||||
MIE Holdings Corp. | 4,000 | 954 | ||||||
PetroChina Co. Ltd. Class H | 40,000 | 48,219 | ||||||
Sino Oil And Gas Holdings Ltd.a | 50,000 | 1,006 | ||||||
Yanzhou Coal Mining Co. Ltd. Class H | 4,000 | 5,704 | ||||||
|
| |||||||
159,936 | ||||||||
COLOMBIA — 0.49% | ||||||||
Ecopetrol SA SP ADR | 400 | 23,140 | ||||||
|
| |||||||
23,140 | ||||||||
FINLAND — 0.05% | ||||||||
Neste Oil OYJ | 210 | 2,425 | ||||||
|
| |||||||
2,425 | ||||||||
FRANCE — 4.19% | ||||||||
Esso SA Francaise | 8 | 588 | ||||||
Etablissements Maurel et Prom | 148 | 2,324 | ||||||
Total SA | 3,878 | 194,087 | ||||||
|
| |||||||
196,999 |
Security | Shares | Value | ||||||
GREECE — 0.05% | ||||||||
Hellenic Petroleum SA | 285 | $ | 2,048 | |||||
Motor Oil (Hellas) Corinth Refineries SA | 64 | 384 | ||||||
|
| |||||||
2,432 | ||||||||
HONG KONG — 0.01% | ||||||||
Mongolia Energy Corp. Ltd.a | 8,000 | 345 | ||||||
Ruifeng Petroleum Chemical Holdings Ltd.a | 20,000 | 168 | ||||||
|
| |||||||
513 | ||||||||
HUNGARY — 0.12% | ||||||||
MOL Hungarian Oil and Gas PLC | 76 | 5,600 | ||||||
|
| |||||||
5,600 | ||||||||
INDIA — 0.70% | ||||||||
Reliance Industries Ltd. SP GDRc | 1,206 | 32,984 | ||||||
|
| |||||||
32,984 | ||||||||
INDONESIA — 0.38% | ||||||||
PT ABM Investama Tbka | 5,000 | 1,914 | ||||||
PT Adaro Energy Tbk | 27,000 | 3,879 | ||||||
PT Benakat Petroleum Energy Tbka | 29,000 | 554 | ||||||
PT Bukit Asam (Persero) Tbk | 2,000 | 3,062 | ||||||
PT Bumi Resources Tbk | 29,000 | 2,129 | ||||||
PT Delta Dunia Makmur Tbka | 11,000 | 289 | ||||||
PT Energi Mega Persada Tbka | 53,000 | 511 | ||||||
PT Indika Energy Tbk | 3,000 | 481 | ||||||
PT Indo Tambangraya Megah Tbk | 1,000 | 4,006 | ||||||
PT Medco Energi Internasional Tbk | 3,000 | 529 | ||||||
PT Resource Alam Indonesia Tbk | 1,000 | 299 | ||||||
|
| |||||||
17,653 | ||||||||
ISRAEL — 0.05% |
| |||||||
Naphtha Israel Petroleum Corp. Ltd.a | 123 | 392 | ||||||
Oil Refineries Ltd.a | 2,218 | 834 | ||||||
Paz Oil Co. Ltd. | 12 | 1,194 | ||||||
|
| |||||||
2,420 | ||||||||
ITALY — 2.22% | ||||||||
Eni SpA | 4,616 | 102,521 | ||||||
ERG SpA | 172 | 1,169 | ||||||
Saras SpAa | 582 | 631 | ||||||
|
| |||||||
104,321 | ||||||||
JAPAN — 1.16% | ||||||||
Cosmo Oil Co. Ltd. | 2,000 | 3,831 | ||||||
INPEX Corp. | 4 | 22,733 | ||||||
JX Holdings Inc. | 4,800 | 24,828 |
SCHEDULESOF INVESTMENTS | 25 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI GLOBAL ENERGY PRODUCERS FUND
August 31, 2012
Security | Shares | Value | ||||||
Showa Shell Sekiyu K.K. | 600 | $ | 3,088 | |||||
|
| |||||||
54,480 | ||||||||
MALAYSIA — 0.01% | ||||||||
Esso Malaysia Bhd | 600 | 540 | ||||||
|
| |||||||
540 | ||||||||
NEW ZEALAND — 0.01% | ||||||||
New Zealand Oil & Gas Ltd. | 968 | 653 | ||||||
|
| |||||||
653 | ||||||||
NORWAY — 1.23% | ||||||||
Det norske oljeselskap ASAa | 104 | 1,678 | ||||||
DNO International ASAa | 1,152 | 1,708 | ||||||
Norwegian Energy Co. ASAa | 694 | 624 | ||||||
Panoro Energy ASAa | 340 | 220 | ||||||
Statoil ASA | 2,088 | 53,638 | ||||||
|
| |||||||
57,868 | ||||||||
PHILIPPINES — 0.04% | ||||||||
Philex Petroleum Corp.a | 2,000 | 1,645 | ||||||
|
| |||||||
1,645 | ||||||||
POLAND — 0.20% | ||||||||
Grupa Lotos SAa | 84 | 670 | ||||||
Lubelski Wegiel Bogdanka SA | 64 | 2,316 | ||||||
Polski Koncern Naftowy Orlen SAa | 558 | 6,567 | ||||||
|
| |||||||
9,553 | ||||||||
PORTUGAL — 0.15% | ||||||||
Galp Energia SGPS SA Class B | 456 | 6,866 | ||||||
|
| |||||||
6,866 | ||||||||
RUSSIA — 2.43% | ||||||||
LUKOIL OAO | 940 | 53,433 | ||||||
NovaTek OAO SP GDRd | 164 | 19,565 | ||||||
Rosneft Oil Co. OJSC | 2,350 | 14,017 | ||||||
Surgutneftegas OJSC | 13,200 | 11,386 | ||||||
Tatneft OAO | 2,580 | 15,626 | ||||||
|
| |||||||
114,027 | ||||||||
SINGAPORE — 0.06% | ||||||||
Sakari Resources Ltd. | 2,000 | 2,998 | ||||||
|
| |||||||
2,998 | ||||||||
SOUTH AFRICA — 0.10% | ||||||||
Exxaro Resources Ltd. | 262 | 4,651 | ||||||
|
| |||||||
4,651 |
Security | Shares | Value | ||||||
SOUTH KOREA — 0.50% | ||||||||
S-Oil Corp. | 84 | $ | 7,625 | |||||
SK Innovation Co. Ltd. | 110 | 15,851 | ||||||
|
| |||||||
23,476 | ||||||||
SPAIN — 0.59% | ||||||||
Repsol SA | 1,509 | 27,837 | ||||||
|
| |||||||
27,837 | ||||||||
SWEDEN — 0.20% | ||||||||
Alliance Oil Co. Ltd. SDRa | 14 | 108 | ||||||
Lundin Petroleum ABa | 394 | 8,895 | ||||||
PA Resources ABa | 1,200 | 149 | ||||||
|
| |||||||
9,152 | ||||||||
THAILAND — 0.47% | ||||||||
Bangchak Petroleum PCL NVDR | 1,000 | 731 | ||||||
Banpu PCL NVDR | 300 | 4,308 | ||||||
Esso (Thailand) PCL NVDR | 2,200 | 737 | ||||||
IRPC PCL NVDR | 20,000 | 2,400 | ||||||
PTT Exploration & Production PCL NVDR | 2,200 | 10,461 | ||||||
Thai Oil PCL NVDR | 1,600 | 3,345 | ||||||
|
| |||||||
21,982 | ||||||||
TURKEY — 0.16% | ||||||||
Turkiye Petrol Rafinerileri AS | 334 | 7,642 | ||||||
|
| |||||||
7,642 | ||||||||
UNITED KINGDOM — 18.13% | ||||||||
Afren PLCa | 1,888 | 3,862 | ||||||
Amerisur Resources PLCa | 1,274 | 734 | ||||||
Anglo Pacific Group PLC | 212 | 787 | ||||||
Aurelian Oil & Gas PLCa | 800 | 114 | ||||||
Bahamas Petroleum Co. PLCa | 2,326 | 250 | ||||||
BG Group PLC | 6,160 | 126,021 | ||||||
Borders & Southern Petroleum PLCa | 830 | 343 | ||||||
Bowleven PLCa | 676 | 749 | ||||||
BP PLC | 34,486 | 241,753 | ||||||
Cairn Energy PLCa | 1,010 | 4,604 | ||||||
Chariot Oil & Gas Ltd.a | 240 | 435 | ||||||
EnQuest PLCa | 1,090 | 1,925 | ||||||
Essar Energy PLCa | 568 | 905 | ||||||
Falkland Oil & Gas Ltd.a | 466 | 690 | ||||||
Faroe Petroleum PLCa | 328 | 736 | ||||||
Gulf Keystone Petroleum Ltd.a | 1,480 | 4,831 | ||||||
Gulfsands Petroleum PLCa | 212 | 434 |
26 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI GLOBAL ENERGY PRODUCERS FUND
August 31, 2012
Security | Shares | Value | ||||||
Hardy Oil & Gas PLCa | 164 | $ | 339 | |||||
Hargreaves Services PLC | 54 | 616 | ||||||
Heritage Oil PLCa | 340 | 1,048 | ||||||
JKX Oil & Gas PLCa | 224 | 302 | ||||||
Ophir Energy PLCa | 472 | 4,232 | ||||||
Premier Oil PLCa | 986 | 5,856 | ||||||
Rockhopper Exploration PLCa | 482 | 1,315 | ||||||
Royal Dutch Shell PLC Class A | 6,624 | 231,888 | ||||||
Royal Dutch Shell PLC Class B | 4,906 | 177,005 | ||||||
Salamander Energy PLCa | 485 | 1,510 | ||||||
San Leon Energy PLCa | 1,246 | 228 | ||||||
SOCO International PLCa | 434 | 2,322 | ||||||
Tullow Oil PLC | 1,642 | 35,548 | ||||||
Valiant Petroleum PLCa | 92 | 650 | ||||||
Xcite Energy Ltd.a | 258 | 459 | ||||||
|
| |||||||
852,491 | ||||||||
UNITED STATES — 45.82% | ||||||||
Abraxas Petroleum Corp.a | 126 | 256 | ||||||
Alpha Natural Resources Inc.a | 404 | 2,400 | ||||||
Anadarko Petroleum Corp. | 908 | 62,897 | ||||||
Apache Corp. | 706 | 60,539 | ||||||
Approach Resources Inc.a | 44 | 1,265 | ||||||
Arch Coal Inc. | 372 | 2,273 | ||||||
Berry Petroleum Co. Class A | 82 | 3,021 | ||||||
Bill Barrett Corp.a | 94 | 2,061 | ||||||
BPZ Resources Inc.a | 158 | 362 | ||||||
Cabot Oil & Gas Corp. | 380 | 15,736 | ||||||
Carrizo Oil & Gas Inc.a | 64 | 1,615 | ||||||
Chesapeake Energy Corp. | 1,204 | 23,297 | ||||||
Chevron Corp. | 3,592 | 402,879 | ||||||
Cimarex Energy Co. | 154 | 8,810 | ||||||
Clayton Williams Energy Inc.a | 12 | 577 | ||||||
Cloud Peak Energy Inc.a | 98 | 1,724 | ||||||
Cobalt International Energy Inc.a | 326 | 7,403 | ||||||
Comstock Resources Inc.a | 84 | 1,385 | ||||||
Concho Resources Inc.a | 180 | 16,153 | ||||||
ConocoPhillips | 2,204 | 125,165 | ||||||
CONSOL Energy Inc. | 412 | 12,442 | ||||||
Contango Oil & Gas Co.a | 44 | 2,443 | ||||||
Continental Resources Inc.a | 82 | 6,073 | ||||||
CVR Energy Inc.a | 32 | 954 | ||||||
Denbury Resources Inc.a | 728 | 11,277 | ||||||
Devon Energy Corp. | 708 | 40,944 |
Security | Shares | Value | ||||||
Endeavour International Corp.a | 50 | $ | 422 | |||||
Energen Corp. | 134 | 6,841 | ||||||
Energy XXI (Bermuda) Ltd. | 122 | 4,013 | ||||||
EOG Resources Inc. | 492 | 53,284 | ||||||
EQT Corp. | 282 | 15,217 | ||||||
EXCO Resources Inc. | 236 | 1,617 | ||||||
Exxon Mobil Corp. | 8,514 | 743,272 | ||||||
Forest Oil Corp.a | 198 | 1,467 | ||||||
FX Energy Inc.a | 78 | 597 | ||||||
Gastar Exploration Ltd.a | 126 | 202 | ||||||
Goodrich Petroleum Corp.a | 48 | 610 | ||||||
Gulfport Energy Corp.a | 80 | 2,104 | ||||||
Halcon Resources Corp.a | 167 | 1,283 | ||||||
Harvest Natural Resources Inc.a | 50 | 426 | ||||||
Hess Corp. | 556 | 28,095 | ||||||
HollyFrontier Corp. | 348 | 14,021 | ||||||
Hyperdynamics Corp.a | 262 | 183 | ||||||
James River Coal Co.a | 50 | 142 | ||||||
Kodiak Oil & Gas Corp.a | 400 | 3,576 | ||||||
Laredo Petroleum Holdings Inc.a | 50 | 1,088 | ||||||
Lone Pine Resources Inc.a | 170 | 221 | ||||||
Magnum Hunter Resources Corp.a | 190 | 817 | ||||||
Marathon Oil Corp. | 1,300 | 36,166 | ||||||
Marathon Petroleum Corp. | 616 | 31,878 | ||||||
McMoRan Exploration Co.a | 170 | 2,147 | ||||||
Newfield Exploration Co.a | 244 | 7,962 | ||||||
Noble Energy Inc. | 326 | 28,655 | ||||||
Northern Oil and Gas Inc.a | 100 | 1,634 | ||||||
Oasis Petroleum Inc.a | 138 | 4,048 | ||||||
Occidental Petroleum Corp. | 1,470 | 124,965 | ||||||
PDC Energy Inc.a | 40 | 1,113 | ||||||
Peabody Energy Corp. | 490 | 10,599 | ||||||
Penn Virginia Corp. | 82 | 501 | ||||||
PetroQuest Energy Inc.a | 98 | 624 | ||||||
Phillips 66 | 1,078 | 45,276 | ||||||
Pioneer Natural Resources Co. | 210 | 20,446 | ||||||
Plains Exploration & Production Co.a | 218 | 8,572 | ||||||
QEP Resources Inc. | 324 | 9,296 | ||||||
Quicksilver Resources Inc.a | 160 | 544 | ||||||
Range Resources Corp. | 296 | 19,296 | ||||||
Resolute Energy Corp.a | 106 | 958 | ||||||
Rex Energy Corp.a | 66 | 818 | ||||||
Rosetta Resources Inc.a | 96 | 4,122 |
SCHEDULESOF INVESTMENTS | 27 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI GLOBAL ENERGY PRODUCERS FUND
August 31, 2012
Security | Shares | Value | ||||||
SandRidge Energy Inc.a | 656 | $ | 4,310 | |||||
SM Energy Co. | 116 | 5,479 | ||||||
Solazyme Inc.a | 76 | 911 | ||||||
Southwestern Energy Co.a | 644 | 20,048 | ||||||
Stone Energy Corp.a | 72 | 1,694 | ||||||
Swift Energy Co.a | 74 | 1,442 | ||||||
Tesoro Corp. | 256 | 10,173 | ||||||
Ultra Petroleum Corp.a | 286 | 5,880 | ||||||
Uranium Energy Corp.a | 130 | 331 | ||||||
VAALCO Energy Inc.a | 96 | 711 | ||||||
Valero Energy Corp. | 988 | 30,885 | ||||||
Venoco Inc.a | 44 | 492 | ||||||
W&T Offshore Inc. | 58 | 1,001 | ||||||
Warren Resources Inc.a | 102 | 297 | ||||||
Western Refining Inc. | 84 | 2,349 | ||||||
Whiting Petroleum Corp.a | 212 | 9,438 | ||||||
WPX Energy Inc.a | 356 | 5,554 | ||||||
|
| |||||||
2,154,064 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | 4,586,505 | |||||||
PREFERRED STOCKS — 1.87% | ||||||||
BRAZIL — 1.70% | ||||||||
Petroleo Brasileiro SA | 7,800 | 79,766 | ||||||
|
| |||||||
79,766 | ||||||||
RUSSIA — 0.17% | ||||||||
Surgutneftegas OJSC | 12,800 | 8,245 | ||||||
|
| |||||||
8,245 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS | 88,011 | |||||||
SHORT-TERM INVESTMENTS — 0.13% | ||||||||
MONEY MARKET FUNDS — 0.13% | ||||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.23%e,f,g | 618 | 618 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.23%e,f,g | 47 | 47 |
Security | Shares | Value | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%e,f | 5,271 | $ | 5,271 | |||||
|
| |||||||
5,936 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS | 5,936 | |||||||
|
| |||||||
TOTAL INVESTMENTS | 4,680,452 | |||||||
Other Assets, Less Liabilities — 0.44% | 20,668 | |||||||
|
| |||||||
NET ASSETS — 100.00% | $ | 4,701,120 | ||||||
|
|
NVDR — Non-Voting Depositary Receipts
SDR — Swedish 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 | This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933. |
d | This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933. |
e | Affiliated issuer. See Note 2. |
f | The rate quoted is the annualized seven-day yield of the fund at period end. |
g | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
See notes to financial statements.
28 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
iSHARES® MSCI GLOBAL GOLD MINERS FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 99.82% |
| |||||||
AUSTRALIA — 10.20% |
| |||||||
Focus Minerals Ltd.a | 503,760 | $ | 19,784 | |||||
Kingsgate Consolidated Ltd. | 44,624 | 197,379 | ||||||
Kingsrose Mining Ltd. | 131,472 | 153,533 | ||||||
Medusa Mining Ltd. | 46,080 | 236,678 | ||||||
Newcrest Mining Ltd. | 91,584 | 2,333,060 | ||||||
Northern Star Resources Ltd. | 23,744 | 26,379 | ||||||
Resolute Mining Ltd.a | 48,000 | 73,168 | ||||||
Silver Lake Resources Ltd.a | 69,632 | 213,725 | ||||||
Troy Resources Ltd. | 4,112 | 17,848 | ||||||
|
| |||||||
3,271,554 | ||||||||
CANADA — 56.01% |
| |||||||
Agnico-Eagle Mines Ltd. | 27,120 | 1,308,388 | ||||||
Alacer Gold Corp.a | 20,096 | 120,554 | ||||||
Argonaut Gold Inc.a | 4,176 | 38,508 | ||||||
AuRico Gold Inc.a | 57,792 | 401,150 | ||||||
Avion Gold Corp.a | 158,864 | 112,687 | ||||||
B2Gold Corp.a | 83,136 | 317,599 | ||||||
Barrick Gold Corp. | 130,784 | 5,037,341 | ||||||
Centerra Gold Inc. | 35,856 | 272,503 | ||||||
China Gold International Resources Corp. Ltd.a | 61,408 | 212,814 | ||||||
Eldorado Gold Corp. | 106,528 | 1,413,033 | ||||||
Goldcorp Inc. | 103,408 | 4,240,687 | ||||||
Great Basin Gold Ltd.a,b | 228,272 | 43,950 | ||||||
High River Gold Mines Ltd.a | 123,408 | 175,073 | ||||||
Jaguar Mining Inc.a,b | 12,048 | 12,086 | ||||||
Kinross Gold Corp. | 160,560 | 1,425,248 | ||||||
Kirkland Lake Gold Inc.a | 18,800 | 259,658 | ||||||
Lake Shore Gold Corp.a,b | 18,608 | 18,856 | ||||||
Nevsun Resources Ltd. | 8,224 | 33,001 | ||||||
OceanaGold Corp.a | 9,008 | 23,733 | ||||||
Osisko Mining Corp.a | 46,704 | 452,913 | ||||||
San Gold Corp.a | 128,784 | 100,485 | ||||||
SEMAFO Inc. | 65,392 | 246,500 | ||||||
Yamana Gold Inc. | 89,904 | 1,535,980 | ||||||
Yukon-Nevada Gold Corp.a | 592,128 | 168,005 | ||||||
|
| |||||||
17,970,752 | ||||||||
CHINA — 2.20% |
| |||||||
China Precious Metal Resources Holdings Co. Ltd.a | 1,056,000 | 185,162 |
Security | Shares | Value | ||||||
Lingbao Gold Co. Ltd. Class H | 320,000 | $ | 128,309 | |||||
Zijin Mining Group Co. Ltd. Class H | 1,248,000 | 390,993 | ||||||
|
| |||||||
704,464 | ||||||||
PERU — 3.31% |
| |||||||
Compania de Minas Buenaventura SA SP ADR | 30,672 | 1,063,091 | ||||||
|
| |||||||
1,063,091 | ||||||||
SOUTH AFRICA — 10.10% |
| |||||||
AngloGold Ashanti Ltd. | 40,864 | 1,274,573 | ||||||
DRDGOLD Ltd. | 267,648 | 144,485 | ||||||
Gold Fields Ltd. | 105,520 | 1,264,838 | ||||||
Harmony Gold Mining Co. Ltd. | 68,912 | 557,935 | ||||||
|
| |||||||
3,241,831 | ||||||||
TURKEY — 0.12% |
| |||||||
Koza Altin Isletmeleri AS | 1,984 | 39,068 | ||||||
|
| |||||||
39,068 | ||||||||
UNITED KINGDOM — 5.99% |
| |||||||
African Barrick Gold PLC | 1,648 | 11,625 | ||||||
Centamin PLCa | 256,464 | 323,847 | ||||||
Highland Gold Mining Ltd. | 95,216 | 173,922 | ||||||
Pan African Resources PLC | 70,304 | 19,542 | ||||||
Petropavlovsk PLC | 41,632 | 230,053 | ||||||
Randgold Resources Ltd. | 11,584 | 1,162,845 | ||||||
|
| |||||||
1,921,834 | ||||||||
UNITED STATES — 11.89% |
| |||||||
Allied Nevada Gold Corp.a | 16,576 | 540,046 | ||||||
Gold Resource Corp. | 9,792 | 185,656 | ||||||
Newmont Mining Corp. | 60,928 | 3,087,831 | ||||||
|
| |||||||
3,813,533 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $36,120,451) |
| 32,026,127 | ||||||
SHORT-TERM INVESTMENTS — 0.25% |
| |||||||
MONEY MARKET FUNDS — 0.25% |
| |||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.23%c,d,e | 68,915 | 68,915 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.23%c,d,e | 5,223 | 5,223 |
SCHEDULESOF INVESTMENTS | 29 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI GLOBAL GOLD MINERS FUND
August 31, 2012
Security | Shares | Value | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%c,d | 6,944 | $ | 6,944 | |||||
|
| |||||||
81,082 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $81,082) |
| 81,082 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $36,201,533) |
| 32,107,209 | ||||||
Other Assets, Less Liabilities — (0.07)% |
| (22,796 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 32,084,413 | |||||
|
|
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.
30 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
iSHARES® MSCI GLOBAL SELECT METALS & MINING PRODUCERS FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 93.73% |
| |||||||
AUSTRALIA — 18.55% |
| |||||||
Aditya Birla Minerals Ltd. | 14,950 | $ | 6,335 | |||||
Alumina Ltd. | 368,095 | 281,502 | ||||||
Aquarius Platinum Ltd. | 68,380 | 39,574 | ||||||
Arrium Ltd. | 194,220 | 129,462 | ||||||
Aspire Mining Ltd.a | 29,705 | 3,684 | ||||||
Atlas Iron Ltd. | 125,385 | 174,932 | ||||||
Bathurst Resources Ltd.a | 91,195 | 32,986 | ||||||
BHP Billiton Ltd. | 473,200 | 15,546,212 | ||||||
BlueScope Steel Ltd.a | 501,930 | 173,771 | ||||||
Cudeco Ltd.a | 19,760 | 84,951 | ||||||
Discovery Metals Ltd.a | 57,915 | 57,757 | ||||||
Elemental Minerals Ltd.a | 21,255 | 15,815 | ||||||
Fortescue Metals Group Ltd. | 200,070 | 731,938 | ||||||
Gindalbie Metals Ltd.a | 125,775 | 42,894 | ||||||
Grange Resources Ltd. | 49,010 | 15,195 | ||||||
Iluka Resources Ltd. | 63,310 | 601,935 | ||||||
Imdex Ltd. | 30,225 | 41,232 | ||||||
Independence Group NL | 33,995 | 122,962 | ||||||
Indophil Resources NLa | 112,255 | 39,443 | ||||||
Ivanhoe Australia Ltd.a | 31,850 | 12,179 | ||||||
Jupiter Mines Ltd.a | 41,210 | 8,518 | ||||||
Jupiter Mines Ltd. Newa | 333 | 69 | ||||||
Kagara Ltd.a,b | 1,161 | — | ||||||
Kangaroo Resources Ltd.a | 158,275 | 9,978 | ||||||
Lynas Corp. Ltd.a | 254,020 | 168,011 | ||||||
Metals X Ltd.a | 66,495 | 9,277 | ||||||
Metminco Ltd.a | 130,715 | 10,942 | ||||||
Mincor Resources NL | 27,040 | 16,208 | ||||||
Mineral Deposits Ltd.a | 12,090 | 62,472 | ||||||
Mirabela Nickel Ltd.a | 69,095 | 19,994 | ||||||
Mount Gibson Iron Ltd. | 92,755 | 69,976 | ||||||
Northern Iron Ltd.a | 37,050 | 32,737 | ||||||
OM Holdings Ltd.a | 32,890 | 11,897 | ||||||
OZ Minerals Ltd. | 47,515 | 306,411 | ||||||
PanAust Ltd.a | 71,110 | 194,745 | ||||||
Panoramic Resources Ltd. | 29,640 | 16,388 | ||||||
Perilya Ltd.a | 32,305 | 8,847 | ||||||
Rex Minerals Ltd.a | 18,460 | 13,068 | ||||||
Rio Tinto Ltd. | 63,765 | 3,244,813 | ||||||
Sandfire Resources NLa | 10,205 | 75,934 |
Security | Shares | Value | ||||||
Sims Metal Management Ltd. | 27,105 | $ | 255,466 | |||||
Sundance Resources Ltd.a | 379,925 | 125,643 | ||||||
Tiger Resources Ltd.a | 76,180 | 22,831 | ||||||
Western Areas NL | 18,070 | 74,324 | ||||||
|
| |||||||
22,913,308 | ||||||||
AUSTRIA — 0.44% | ||||||||
AMAG Austria Metall AGc,d | 2,860 | 70,839 | ||||||
voestalpine AG | 16,575 | 475,624 | ||||||
|
| |||||||
546,463 | ||||||||
BELGIUM — 0.84% | ||||||||
Bekaert NV | 5,720 | 149,681 | ||||||
Nyrstar NVa | 22,945 | 110,772 | ||||||
Umicore SA | 16,380 | 778,804 | ||||||
|
| |||||||
1,039,257 | ||||||||
BRAZIL — 3.04% | ||||||||
Companhia Siderurgica Nacional SA | 110,500 | 544,590 | ||||||
MMX Mineracao e Metalicos SAa | 26,000 | 69,835 | ||||||
Vale SA | 188,500 | 3,138,183 | ||||||
|
| |||||||
3,752,608 | ||||||||
CANADA — 5.13% | ||||||||
Augusta Resource Corp.a | 15,080 | 40,953 | ||||||
Avalon Rare Metals Inc.a | 16,315 | 28,932 | ||||||
Capstone Mining Corp.a | 42,510 | 104,245 | ||||||
Cline Mining Corp.a | 28,860 | 6,580 | ||||||
Copper Mountain Mining Corp.a | 14,950 | 39,691 | ||||||
Dundee Precious Metals Inc.a | 13,325 | 114,772 | ||||||
Eastern Platinum Ltd.a | 139,880 | 25,514 | ||||||
First Quantum Minerals Ltd. | 70,915 | 1,364,621 | ||||||
Harry Winston Diamond Corp.a | 9,685 | 121,694 | ||||||
HudBay Minerals Inc. | 26,325 | 224,877 | ||||||
Imperial Metals Corp.a | 6,890 | 79,732 | ||||||
Inmet Mining Corp. | 7,800 | 347,852 | ||||||
Katanga Mining Ltd.a | 71,500 | 33,328 | ||||||
Labrador Iron Mines Holdings Ltd.a | 12,350 | 21,400 | ||||||
Lundin Mining Corp.a | 77,285 | 350,067 | ||||||
Major Drilling Group International | 12,935 | 122,423 | ||||||
Mercator Minerals Ltd.a | 32,435 | 14,297 | ||||||
North American Palladium Ltd.a | 20,280 | 36,991 | ||||||
Northern Dynasty Minerals Ltd.a | 9,620 | 27,490 | ||||||
Sabina Gold & Silver Corp.a | 22,165 | 73,895 | ||||||
Sherritt International Corp. | 43,160 | 191,997 | ||||||
Taseko Mines Ltd.a | 30,290 | 90,853 |
SCHEDULESOF INVESTMENTS | 31 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI GLOBAL SELECT METALS & MINING PRODUCERS FUND
August 31, 2012
Security | Shares | Value | ||||||
Teck Resources Ltd. Class B | 84,305 | $ | 2,327,069 | |||||
Thompson Creek Metals Co. Inc.a | 24,245 | 68,299 | ||||||
Turquoise Hill Resources Ltd.a | 59,216 | 475,240 | ||||||
|
| |||||||
6,332,812 | ||||||||
CHILE — 0.32% | ||||||||
CAP SA | 11,635 | 391,879 | ||||||
|
| |||||||
391,879 | ||||||||
CHINA — 1.36% | ||||||||
Aluminum Corp. of China Ltd. Class Ha | 650,000 | 248,896 | ||||||
Angang Steel Co. Ltd. Class Ha | 130,000 | 63,523 | ||||||
China Kingstone Mining Holdings Ltd.a | 195,000 | 7,165 | ||||||
China Metal Recycling Holdings Ltd. | 78,000 | 62,249 | ||||||
China Nickel Resources Holding Co. Ltd.a | 130,000 | 8,883 | ||||||
China Rare Earth Holdings Ltd. | 260,000 | 55,981 | ||||||
China Vanadium Titano-Magnetite Mining Co. Ltd. | 130,000 | 18,772 | ||||||
China Zhongwang Holdings Ltd.a | 260,000 | 105,257 | ||||||
Chongqing Iron & Steel Co. Ltd. Class Ha | 130,000 | 15,587 | ||||||
Chu Kong Petroleum & Natural Gas Steel Pipe Holdings Ltd. | 65,000 | 22,627 | ||||||
CITIC Dameng Holdings Ltd. | 130,000 | 12,068 | ||||||
Fosun International Ltd. | 260,000 | 122,688 | ||||||
Hunan Nonferrous Metal Corp. Ltd. Class Ha | 260,000 | 76,764 | ||||||
Jiangxi Copper Co. Ltd. Class H | 195,000 | 423,375 | ||||||
Minmetals Resources Ltd.a | 260,000 | 96,877 | ||||||
North Mining Shares Co. Ltd.a | 1,300,000 | 66,205 | ||||||
Shougang Concord International Enterprises Co. Ltd.a | 780,000 | 35,197 | ||||||
Shougang Fushan Resources Group Ltd. | 390,000 | 102,575 | ||||||
Tiangong International Co. Ltd. | 260,000 | 46,259 | ||||||
Winsway Coking Coal Holding Ltd. | 260,000 | 32,516 | ||||||
Xingda International Holdings Ltd. | 130,000 | 38,885 | ||||||
Xinjiang Xinxin Mining Industry Co. Ltd. Class H | 130,000 | 22,459 | ||||||
|
| |||||||
1,684,808 | ||||||||
FINLAND — 0.19% | ||||||||
Outokumpu OYJa | 134,160 | 120,236 | ||||||
Rautaruukki OYJ | 10,595 | 68,044 | ||||||
Talvivaara Mining Co. PLCa | 21,320 | 43,804 | ||||||
|
| |||||||
232,084 |
Security | Shares | Value | ||||||
FRANCE — 1.72% | ||||||||
Aperam | 6,630 | $ | 86,705 | |||||
ArcelorMittal | 136,760 | 2,043,636 | ||||||
|
| |||||||
2,130,341 | ||||||||
GERMANY — 1.35% | ||||||||
Aurubis AG | 5,590 | 303,409 | ||||||
Salzgitter AG | 6,175 | 227,748 | ||||||
ThyssenKrupp AG | 56,940 | 1,136,882 | ||||||
|
| |||||||
1,668,039 | ||||||||
GREECE — 0.00% | ||||||||
Mytilineos Holdings SAa | 524 | 1,499 | ||||||
Viohalco Hellenic Copper and Aluminum Industry SAa | 200 | 525 | ||||||
|
| |||||||
2,024 | ||||||||
HONG KONG — 0.08% | ||||||||
CST Mining Group Ltd.a | 3,640,000 | 48,338 | ||||||
IRC Ltd.a | 260,000 | 21,453 | ||||||
Newton Resources Ltd.a | 260,000 | 24,806 | ||||||
|
| |||||||
94,597 | ||||||||
INDIA — 1.17% | ||||||||
Sterlite Industries (India) Ltd. SP ADR | 92,235 | 651,179 | ||||||
Tata Steel Ltd. SP GDRd | 113,165 | 792,155 | ||||||
|
| |||||||
1,443,334 | ||||||||
INDONESIA — 0.23% | ||||||||
PT Aneka Tambang (Persero) Tbk | 585,000 | 76,078 | ||||||
PT Darma Henwa Tbka | 2,632,500 | 13,804 | ||||||
PT Krakatau Steel (Persero) Tbk | 747,500 | 51,741 | ||||||
PT Timah (Persero) Tbk | 357,500 | 48,742 | ||||||
PT Vale Indonesia Tbk | 390,000 | 94,074 | ||||||
|
| |||||||
284,439 | ||||||||
ITALY — 0.04% | ||||||||
KME Group SpAa | 103,220 | 50,092 | ||||||
|
| |||||||
50,092 | ||||||||
JAPAN — 5.53% | ||||||||
Asahi Holdings Inc. | 6,500 | 107,586 | ||||||
Daido Steel Co. Ltd. | 65,000 | 333,716 | ||||||
Dowa Holdings Co. Ltd. | 65,000 | 426,692 | ||||||
JFE Holdings Inc. | 71,500 | 902,197 | ||||||
Kobe Steel Ltd. | 390,000 | 298,851 | ||||||
Maruichi Steel Tube Ltd. | 6,500 | 124,770 | ||||||
Mitsubishi Materials Corp. | 195,000 | 545,402 |
32 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI GLOBAL SELECT METALS & MINING PRODUCERS FUND
August 31, 2012
Security | Shares | Value | ||||||
Mitsui Mining & Smelting Co. Ltd. | 65,000 | $ | 130,332 | |||||
Neturen Co. Ltd. | 6,500 | 41,092 | ||||||
Nippon Coke & Engineering Co. Ltd. | 32,500 | 39,432 | ||||||
Nippon Koshuha Steel Co. Ltd. | 65,000 | 63,921 | ||||||
Nippon Light Metal Co. Ltd. | 65,000 | 64,751 | ||||||
Nippon Steel Corp. | 780,000 | 1,504,214 | ||||||
Nippon Yakin Kogyo Co. Ltd.a | 32,500 | 29,470 | ||||||
Nisshin Steel Co. Ltd. | 130,000 | 122,861 | ||||||
OSAKA Titanium technologies Co. Ltd. | 6,500 | 149,342 | ||||||
Sumitomo Light Metal Industries Ltd. | 65,000 | 57,280 | ||||||
Sumitomo Metal Industries Ltd. | 520,000 | 737,165 | ||||||
Sumitomo Metal Mining Co. Ltd. | 65,000 | 670,753 | ||||||
Toho Titanium Co. Ltd. | 6,500 | 63,838 | ||||||
Tokyo Steel Manufacturing Co. Ltd. | 19,500 | 63,506 | ||||||
TOPY Industries Ltd. | 65,000 | 158,557 | ||||||
Yamato Kogyo Co. Ltd. | 6,500 | 194,419 | ||||||
|
| |||||||
6,830,147 | ||||||||
MALAYSIA — 0.09% | ||||||||
Ann Joo Resources Bhd | 45,500 | 21,552 | ||||||
CSC Steel Holdings Bhd | 65,000 | 25,588 | ||||||
Kinsteel Bhd | 143,000 | 18,536 | ||||||
Lion Industries Corp. Bhd | 71,500 | 26,316 | ||||||
Press Metal Bhd | 32,500 | 17,683 | ||||||
|
| |||||||
109,675 | ||||||||
MEXICO — 1.80% | ||||||||
Compania Minera Autlan SAB de CV Series B | 13,000 | 13,082 | ||||||
Grupo Mexico SAB de CV Series B | 552,500 | 1,630,492 | ||||||
Grupo Simec SAB de CV Series Ba | 19,500 | 70,801 | ||||||
Industrias CH SAB de CV Series Ba | 26,000 | 142,357 | ||||||
Minera Frisco SAB de CV Series A1a | 97,500 | 371,435 | ||||||
|
| |||||||
2,228,167 | ||||||||
NETHERLANDS — 0.03% | ||||||||
Advanced Metallurgical Group NVa | 4,485 | 33,411 | ||||||
|
| |||||||
33,411 | ||||||||
NORWAY — 0.50% | ||||||||
Norsk Hydro ASA | 138,125 | 592,084 | ||||||
Northland Resources SAa | 33,605 | 21,639 | ||||||
|
| |||||||
613,723 | ||||||||
PERU — 0.90% | ||||||||
Southern Copper Corp. | 34,060 | 1,108,312 | ||||||
|
| |||||||
1,108,312 |
Security | Shares | Value | ||||||
PHILIPPINES — 0.09% | ||||||||
Atlas Consolidated Mining & Development Corp.a | 130,000 | $ | 52,402 | |||||
Nickel Asia Corp. | 156,000 | 61,547 | ||||||
|
| |||||||
113,949 | ||||||||
POLAND — 0.80% | ||||||||
Alchemia SAa | 22,100 | 35,298 | ||||||
Impexmetal SAa | 5,460 | 5,545 | ||||||
Jastrzebska Spolka Weglowa SA | 5,590 | 147,908 | ||||||
KGHM Polska Miedz SA | 20,475 | 801,526 | ||||||
|
| |||||||
990,277 | ||||||||
RUSSIA — 1.31% | ||||||||
Belon OJSCa | 39,000 | 9,218 | ||||||
Mechel OAO SP ADR | 20,605 | 118,067 | ||||||
MMC Norilsk Nickel OJSC | 6,890 | 1,017,607 | ||||||
Novolipetsk Steel OJSC SP GDRd | 10,140 | 183,331 | ||||||
Severstal OAO | 26,000 | 297,131 | ||||||
|
| |||||||
1,625,354 | ||||||||
SINGAPORE — 0.04% | ||||||||
Midas Holdings Ltd. | 195,000 | 54,714 | ||||||
|
| |||||||
54,714 | ||||||||
SOUTH AFRICA — 2.69% | ||||||||
African Rainbow Minerals Ltd. | 16,380 | 285,681 | ||||||
Anglo American Platinum Ltd. | 10,010 | 497,549 | ||||||
ArcelorMittal South Africa Ltd.a | 29,250 | 140,897 | ||||||
Assore Ltd. | 5,200 | 188,788 | ||||||
Hulamin Ltd.a | 41,080 | 17,302 | ||||||
Impala Platinum Holdings Ltd. | 79,560 | 1,255,440 | ||||||
Kumba Iron Ore Ltd. | 12,285 | 699,626 | ||||||
Merafe Resources Ltd.a | 230,230 | 21,853 | ||||||
Northam Platinum Ltd. | 39,585 | 126,807 | ||||||
Palabora Mining Co. Ltd. | 2,080 | 19,345 | ||||||
Royal Bafokeng Platinum Ltd.a | 8,905 | 47,650 | ||||||
Sentula Mining Ltd.a | 121,550 | 26,391 | ||||||
|
| |||||||
3,327,329 | ||||||||
SOUTH KOREA — 3.93% | ||||||||
Daehan Steel Co. Ltd. | 1,950 | 15,193 | ||||||
Dongbu Steel Co. Ltd.a | 3,900 | 15,502 | ||||||
Dongil Industries Co. Ltd. | 325 | 13,778 | ||||||
Dongkuk Industries Co. Ltd. | 4,355 | 15,104 | ||||||
Dongkuk Steel Mill Co. Ltd. | 5,200 | 72,182 | ||||||
EG Corp. | 715 | 37,495 |
SCHEDULESOF INVESTMENTS | 33 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI GLOBAL SELECT METALS & MINING PRODUCERS FUND
August 31, 2012
Security | Shares | Value | ||||||
Hyundai BNG Steel Co. Ltd.a | 1,300 | $ | 11,309 | |||||
Hyundai Hysco Co. Ltd. | 5,200 | 218,151 | ||||||
Hyundai Steel Co. | 8,255 | 608,234 | ||||||
KISCO Corp. | 650 | 18,618 | ||||||
KISWIRE Ltd. | 650 | 18,704 | ||||||
Korea Zinc Co. Ltd. | 1,235 | 445,182 | ||||||
Poongsan Corp. | 2,600 | 68,631 | ||||||
Poongsan Holdings Corp. | 650 | 12,775 | ||||||
POSCO | 9,555 | 3,107,454 | ||||||
POSCO Chemtech Co. Ltd. | 390 | 51,112 | ||||||
Posco M-Tech Co. Ltd. | 3,900 | 23,683 | ||||||
SeAH Besteel Corp. | 1,950 | 60,754 | ||||||
SeAH Holdings Corp. | 130 | 10,610 | ||||||
SeAH Steel Corp. | 325 | 25,321 | ||||||
|
| |||||||
4,849,792 | ||||||||
SPAIN — 0.16% | ||||||||
Acerinox SA | 12,155 | 130,446 | ||||||
Tubacex SAa | 15,990 | 34,365 | ||||||
Tubos Reunidos SA | 19,045 | 38,050 | ||||||
|
| |||||||
202,861 | ||||||||
SWEDEN — 0.67% | ||||||||
Boliden AB | 39,260 | 576,895 | ||||||
Hoganas AB Class B | 2,405 | 79,360 | ||||||
SSAB AB Class A | 23,075 | 174,413 | ||||||
|
| |||||||
830,668 | ||||||||
SWITZERLAND — 0.03% | ||||||||
Schmolz + Bickenbach AG Registereda | 10,790 | 37,605 | ||||||
|
| |||||||
37,605 | ||||||||
TAIWAN — 1.66% | ||||||||
China Metal Products Co. Ltd. | 65,080 | 43,892 | ||||||
China Steel Corp. | 1,690,780 | 1,447,982 | ||||||
Chun Yuan Steel Industrial Co. Ltd. | 65,040 | 24,973 | ||||||
Chung Hung Steel Corp.a | 130,000 | 31,945 | ||||||
Feng Hsin Iron & Steel Co. Ltd. | 65,000 | 100,481 | ||||||
Gloria Material Technology Corp. | 65,097 | 61,835 | ||||||
Hsin Kuang Steel Co. Ltd. | 65,000 | 38,413 | ||||||
Ta Chen Stainless Pipe Co. Ltd. | 65,000 | 32,227 | ||||||
Ton Yi Industrial Corp. | 130,000 | 73,136 | ||||||
Tung Ho Steel Enterprise Corp. | 130,000 | 119,796 | ||||||
YC INOX Co. Ltd. | 65,000 | 33,096 | ||||||
Yieh Phui Enterprise Co. Ltd. | 130,000 | 40,062 | ||||||
|
| |||||||
2,047,838 |
Security | Shares | Value | ||||||
THAILAND — 0.11% | ||||||||
G J Steel PCL NVDRa | 6,207,500 | $ | 27,734 | |||||
G Steel PCL NVDRa | 2,444,000 | 29,638 | ||||||
Sahaviriya Steel Industries PCL NVDRa | 2,015,000 | 35,368 | ||||||
STP & I PCL NVDR | 32,500 | 38,376 | ||||||
|
| |||||||
131,116 | ||||||||
TURKEY — 0.34% | ||||||||
Borusan Mannesmann Boru Sanayi ve TAS | 2,210 | 35,130 | ||||||
Eregli Demir ve Celik Fabrikalari TAS | 131,690 | 147,043 | ||||||
Izmir Demir Celik Sanayi ASa | 23,725 | 54,939 | ||||||
Kardemir Karabuk Demir Celik Sanayi ve TAS Class A | 42,770 | 32,935 | ||||||
Kardemir Karabuk Demir Celik Sanayi ve TAS Class B | 26,780 | 33,437 | ||||||
Kardemir Karabuk Demir Celik Sanayi ve TAS Class D | 43,225 | 27,580 | ||||||
Koza Anadolu Metal Madencilik Isletmeleri ASa | 19,175 | 43,454 | ||||||
Park Elektrik Uretim Madencilik Sanayi ve TAS | 12,935 | 47,242 | ||||||
|
| |||||||
421,760 | ||||||||
UNITED KINGDOM — 27.53% | ||||||||
African Minerals Ltd.a | 34,840 | 139,452 | ||||||
Anglo American PLC | 203,970 | 5,669,577 | ||||||
Antofagasta PLC | 58,565 | 1,029,751 | ||||||
BHP Billiton PLC | 309,595 | 9,028,444 | ||||||
Eurasian Natural Resources Corp. | 37,570 | 180,157 | ||||||
Evraz PLC | 44,655 | 159,587 | ||||||
Ferrexpo PLC | 35,100 | 90,150 | ||||||
Gem Diamonds Ltd.a | 17,225 | 45,334 | ||||||
Glencore International PLC | 558,675 | 3,416,825 | ||||||
Hill & Smith Holdings PLC | 13,650 | 74,799 | ||||||
Kazakhmys PLC | 31,330 | 295,095 | ||||||
London Mining PLCa | 17,680 | 38,543 | ||||||
Lonmin PLC | 23,595 | 214,744 | ||||||
New World Resources PLC Class A | 14,365 | 61,810 | ||||||
Petra Diamonds Ltd.a | 56,940 | 94,510 | ||||||
Rio Tinto PLC | 195,975 | 8,514,982 | ||||||
Sirius Minerals PLCa | 253,630 | 68,485 | ||||||
Vedanta Resources PLC | 15,210 | 209,578 |
34 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI GLOBAL SELECT METALS & MINING PRODUCERS FUND
August 31, 2012
Security | Shares | Value | ||||||
Xstrata PLC | 308,750 | $ | 4,669,619 | |||||
|
| |||||||
34,001,442 | ||||||||
UNITED STATES — 11.06% | ||||||||
A.M. Castle & Co.a | 2,535 | 33,031 | ||||||
AK Steel Holding Corp. | 16,380 | 85,504 | ||||||
Alcoa Inc. | 158,340 | 1,355,390 | ||||||
Allegheny Technologies Inc. | 15,015 | 445,045 | ||||||
AMCOL International Corp. | 3,770 | 113,364 | ||||||
Carpenter Technology Corp. | 6,630 | 313,334 | ||||||
Century Aluminum Co.a | 8,645 | 53,858 | ||||||
Cliffs Natural Resources Inc. | 20,345 | 729,165 | ||||||
Commercial Metals Co. | 13,520 | 172,245 | ||||||
Compass Minerals International Inc. | 5,005 | 359,459 | ||||||
Freeport-McMoRan Copper & Gold Inc. | 138,970 | 5,018,207 | ||||||
General Moly Inc.a | 9,425 | 25,542 | ||||||
Globe Specialty Metals Inc. | 6,500 | 94,835 | ||||||
Haynes International Inc. | 1,885 | 91,894 | ||||||
Horsehead Holding Corp.a | 6,045 | 53,438 | ||||||
Kaiser Aluminum Corp. | 2,340 | 130,689 | ||||||
Materion Corp. | 2,795 | 59,366 | ||||||
Molycorp Inc.a | 8,840 | 101,748 | ||||||
Noranda Aluminium Holding Corp. | 2,730 | 16,271 | ||||||
Nucor Corp. | 46,410 | 1,747,336 | ||||||
Olympic Steel Inc. | 1,430 | 22,537 | ||||||
Reliance Steel & Aluminum Co. | 11,180 | 574,987 | ||||||
RTI International Metals Inc.a | 4,550 | 98,690 | ||||||
Schnitzer Steel Industries Inc. Class A | 3,705 | 102,332 | ||||||
Steel Dynamics Inc. | 31,070 | 379,675 | ||||||
Stillwater Mining Co.a | 16,965 | 178,641 | ||||||
SunCoke Energy Inc.a | 10,075 | 159,386 | ||||||
Titanium Metals Corp. | 13,325 | 163,098 | ||||||
United States Steel Corp. | 21,385 | 415,938 | ||||||
Universal Stainless & Alloy Products Inc.a | 1,105 | 39,670 | ||||||
US Silica Holdings Inc.a | 3,185 | 37,902 | ||||||
Walter Energy Inc. | 9,230 | 301,821 | ||||||
Worthington Industries Inc. | 8,905 | 186,114 | ||||||
|
| |||||||
13,660,512 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $116,389,865) | 115,784,737 |
Security | Shares | Value | ||||||
PREFERRED STOCKS — 5.78% | ||||||||
BRAZIL — 5.78% | ||||||||
Bradespar SA | 32,500 | $ | 424,460 | |||||
Companhia de Ferro Ligas da Bahia — Ferbasa | 6,500 | 35,078 | ||||||
Gerdau SA | 130,000 | 1,150,046 | ||||||
Metalurgica Gerdau SA | 39,000 | 427,086 | ||||||
Usinas Siderurgicas de Minas Gerais SA Class A | 52,000 | 208,866 | ||||||
Vale SA Class A | 299,000 | 4,889,392 | ||||||
|
| |||||||
7,134,928 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS | ||||||||
(Cost: $7,196,636) | 7,134,928 | |||||||
RIGHTS — 0.00% | ||||||||
AUSTRALIA — 0.00% | ||||||||
OM Holdings Ltd.a | 303 | — | ||||||
|
| |||||||
— | ||||||||
THAILAND — 0.00% | ||||||||
G Steel PCL NVDRa | 5,013 | — | ||||||
G Steel PCL NVDRa Warrants | 12,533 | — | ||||||
|
| |||||||
— | ||||||||
|
| |||||||
TOTAL RIGHTS | ||||||||
(Cost: $0) | — | |||||||
SHORT-TERM INVESTMENTS — 0.00% |
| |||||||
MONEY MARKET FUNDS — 0.00% | ||||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.23%e,f,g | 70 | 70 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.23%e,f,g | 5 | 5 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%e,f | 3,675 | 3,675 | ||||||
|
| |||||||
3,750 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $3,750) |
| 3,750 | ||||||
|
|
SCHEDULESOF INVESTMENTS | 35 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI GLOBAL SELECT METALS & MINING PRODUCERS FUND
August 31, 2012
Value | ||||||
TOTAL INVESTMENTS | ||||||
(Cost: $123,590,251) | $ | 122,923,415 | ||||
Other Assets, Less Liabilities — 0.49% | 600,267 | |||||
|
| |||||
NET ASSETS — 100.00% | $ | 123,523,682 | ||||
|
|
NVDR — Non-Voting Depositary Receipts
SP ADR — Sponsored American Depositary Receipts
SP GDR — Sponsored Global 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 | This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933. |
d | This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933. |
e | Affiliated issuer. See Note 2. |
f | The rate quoted is the annualized seven-day yield of the fund at period end. |
g | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
See notes to financial statements.
36 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
iSHARES® MSCI GLOBAL SILVER MINERS FUND
August 31, 2012
Security | Shares | Value | ||||||
COMMON STOCKS — 99.82% |
| |||||||
CANADA — 55.76% |
| |||||||
Alexco Resource Corp.a | 4,725 | $ | 16,710 | |||||
AuRico Gold Inc.a | 12,946 | 89,862 | ||||||
Endeavour Silver Corp.a | 5,065 | 44,961 | ||||||
Excellon Resources Inc.a | 34,251 | 13,015 | ||||||
First Majestic Silver Corp.a | 5,005 | 98,644 | ||||||
Fortuna Silver Mines Inc.a | 8,244 | 38,845 | ||||||
Great Panther Silver Ltd.a | 12,167 | 23,919 | ||||||
MAG Silver Corp.a | 3,665 | 37,584 | ||||||
Mandalay Resources Corp.a | 20,976 | 16,579 | ||||||
Pan American Silver Corp. | 5,482 | 96,158 | ||||||
Scorpio Mining Corp.a | 20,776 | 17,474 | ||||||
Silver Standard Resources Inc.a | 4,479 | 66,446 | ||||||
Silver Wheaton Corp. | 12,791 | 441,726 | ||||||
Silvercorp Metals Inc. | 9,239 | 54,300 | ||||||
Tahoe Resources Inc.a | 4,825 | 87,812 | ||||||
US Silver & Gold Inc.a | 10,702 | 23,750 | ||||||
|
| |||||||
1,167,785 | ||||||||
HONG KONG — 1.92% | ||||||||
G-Resources Group Ltd.a,b | 879,000 | 40,231 | ||||||
|
| |||||||
40,231 | ||||||||
MEXICO — 8.45% | ||||||||
Industrias Penoles SAB de CV | 4,355 | 176,970 | ||||||
|
| |||||||
176,970 | ||||||||
PERU — 10.33% | ||||||||
Compania de Minas Buenaventura SA SP ADR | 6,241 | 216,313 | ||||||
|
| |||||||
216,313 | ||||||||
UNITED KINGDOM — 10.21% | ||||||||
Arian Silver Corp.a | 54,010 | 14,905 | ||||||
Fresnillo PLC | 4,612 | 114,351 | ||||||
Hochschild Mining PLC | 9,449 | 64,911 | ||||||
Patagonia Gold PLCa | 45,714 | 19,786 | ||||||
|
| |||||||
213,953 | ||||||||
UNITED STATES — 13.15% | ||||||||
Coeur d’Alene Mines Corp.a | 4,288 | 98,581 | ||||||
Golden Minerals Co.a | 4,119 | 22,037 | ||||||
Hecla Mining Co. | 14,646 | 79,235 | ||||||
McEwen Mining Inc.a | 12,996 | 51,464 |
Security | Shares | Value | ||||||
Paramount Gold and Silver Corp.a | 9,713 | $ | 24,088 | |||||
|
| |||||||
275,405 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS (Cost: $2,432,131) | 2,090,657 | |||||||
SHORT-TERM INVESTMENTS — 0.49% | ||||||||
MONEY MARKET FUNDS — 0.49% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | ||||||||
0.23%c,d,e | 7,808 | 7,808 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.23%c,d,e | 592 | 592 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.06%c,d | 1,847 | 1,847 | ||||||
|
| |||||||
10,247 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS (Cost: $10,247) | 10,247 | |||||||
|
| |||||||
TOTAL INVESTMENTS | 2,100,904 | |||||||
Other Assets, Less Liabilities — (0.31)% | (6,489 | ) | ||||||
|
| |||||||
NET ASSETS — 100.00% | $ | 2,094,415 | ||||||
|
|
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 | 37 |
Table of Contents
Statements of Assets and Liabilities
iSHARES®, INC.
August 31, 2012
iShares MSCI Global Agriculture Producers Fund | iShares MSCI Global Energy Producers Fund | iShares MSCI Global Gold | ||||||||||
ASSETS | ||||||||||||
Investments, at cost: | ||||||||||||
Unaffiliated | $ | 9,939,492 | $ | 5,010,932 | $ | 36,120,451 | ||||||
Affiliated (Note 2) | 113,151 | 5,936 | 81,082 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments | $ | 10,052,643 | $ | 5,016,868 | $ | 36,201,533 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 9,858,566 | $ | 4,674,516 | $ | 32,026,127 | ||||||
Affiliated (Note 2) | 110,447 | 5,936 | 81,082 | |||||||||
|
|
|
|
|
| |||||||
Total fair value of investments | 9,969,013 | 4,680,452 | 32,107,209 | |||||||||
Foreign currencies, at valueb | 5,375 | 5,868 | 26,536 | |||||||||
Receivables: | ||||||||||||
Investment securities sold | 86,992 | 44,367 | 424,950 | |||||||||
Due from custodian (Note 4) | 332,500 | — | — | |||||||||
Dividends and interest | 9,906 | 21,335 | 31,801 | |||||||||
Capital shares sold | 95,885 | — | — | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 10,499,671 | 4,752,022 | 32,590,496 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 525,888 | 48,680 | 421,736 | |||||||||
Collateral for securities on loan (Note 5) | 7,250 | 665 | 74,138 | |||||||||
Investment advisory fees (Note 2) | 1,923 | 1,557 | 10,209 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 535,061 | 50,902 | 506,083 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 9,964,610 | $ | 4,701,120 | $ | 32,084,413 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 10,058,281 | $ | 5,040,238 | $ | 36,768,976 | ||||||
Undistributed net investment income | 14,236 | 21,897 | 34,928 | |||||||||
Accumulated net realized loss | (24,276 | ) | (24,692 | ) | (625,429 | ) | ||||||
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies | (83,631 | ) | (336,323 | ) | (4,094,062 | ) | ||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 9,964,610 | $ | 4,701,120 | $ | 32,084,413 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingc | 400,000 | 200,000 | 1,600,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 24.91 | $ | 23.51 | $ | 20.05 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $6,539, $632 and $69,320, respectively. See Note 5. |
b | Cost of foreign currencies: $5,318, $5,796 and $26,362, respectively. |
c | $0.001 par value, number of shares authorized: 500 million, 500 million and 500 million, respectively. |
See notes to financial statements.
38 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Assets and Liabilities (Continued)
iSHARES®, INC.
August 31, 2012
iShares MSCI Global Select Producers Fund | iShares MSCI Global Silver | |||||||
ASSETS | ||||||||
Investments, at cost: | ||||||||
Unaffiliated | $ | 123,586,501 | $ | 2,432,131 | ||||
Affiliated (Note 2) | 3,750 | 10,247 | ||||||
|
|
|
| |||||
Total cost of investments | $ | 123,590,251 | $ | 2,442,378 | ||||
|
|
|
| |||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||
Unaffiliated | $ | 122,919,665 | $ | 2,090,657 | ||||
Affiliated (Note 2) | 3,750 | 10,247 | ||||||
|
|
|
| |||||
Total fair value of investments | 122,923,415 | 2,100,904 | ||||||
Foreign currencies, at valueb | 3,704 | 492 | ||||||
Receivables: | ||||||||
Investment securities sold | 64,707 | 41,660 | ||||||
Dividends and interest | 14,281 | 2,292 | ||||||
Capital shares sold | 18,326,334 | — | ||||||
|
|
|
| |||||
Total Assets | 141,332,441 | 2,145,348 | ||||||
|
|
|
| |||||
LIABILITIES | ||||||||
Payables: | ||||||||
Investment securities purchased | 17,807,313 | 41,886 | ||||||
Collateral for securities on loan (Note 5) | 75 | 8,400 | ||||||
Foreign taxes (Note 1) | 60 | — | ||||||
Investment advisory fees (Note 2) | 1,311 | 647 | ||||||
|
|
|
| |||||
Total Liabilities | 17,808,759 | 50,933 | ||||||
|
|
|
| |||||
NET ASSETS | $ | 123,523,682 | $ | 2,094,415 | ||||
|
|
|
| |||||
Net assets consist of: | ||||||||
Paid-in capital | $ | 124,215,632 | $ | 2,516,572 | ||||
Undistributed net investment income | 22,110 | 5,092 | ||||||
Accumulated net realized loss | (36,927 | ) | (85,784 | ) | ||||
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies | (677,133 | ) | (341,465 | ) | ||||
|
|
|
| |||||
NET ASSETS | $ | 123,523,682 | $ | 2,094,415 | ||||
|
|
|
| |||||
Shares outstandingc | 6,500,000 | 100,000 | ||||||
|
|
|
| |||||
Net asset value per share | $ | 19.00 | $ | 20.94 | ||||
|
|
|
|
a | Securities on loan with values of $70 and $7,689, respectively. See Note 5. |
b | Cost of foreign currencies: $3,670 and $491, respectively. |
c | $0.001 par value, number of shares authorized: 500 million and 500 million, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 39 |
Table of Contents
Statements of Operations
iSHARES®, INC.
Period ended August 31, 2012
iShares MSCI Producers Funda | iShares MSCI Global Energy Producers Funda | iShares MSCI Global Gold | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliatedb | $ | 66,325 | $ | 94,512 | $ | 223,586 | ||||||
Dividends — affiliated (Note 2) | 168 | — | — | |||||||||
Interest — affiliated (Note 2) | 1 | 1 | 9 | |||||||||
Securities lending income — affiliated (Note 2) | 1 | 0 | c | 311 | ||||||||
|
|
|
|
|
| |||||||
Total investment income | 66,495 | 94,513 | 223,906 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 11,217 | 10,385 | 53,344 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 11,217 | 10,385 | 53,344 | |||||||||
Less investment advisory fees waived (Note 2) | (206 | ) | — | — | ||||||||
|
|
|
|
|
| |||||||
Net expenses | 11,011 | 10,385 | 53,344 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 55,484 | 84,128 | 170,562 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | (23,653 | ) | (22,986 | ) | (625,429 | ) | ||||||
Investments — affiliated (Note 2) | (623 | ) | — | — | ||||||||
In-kind redemptions — unaffiliated | — | — | (180,781 | ) | ||||||||
Foreign currency transactions | (1,624 | ) | (880 | ) | 139 | |||||||
|
|
|
|
|
| |||||||
Net realized loss | (25,900 | ) | (23,866 | ) | (806,071 | ) | ||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments | (83,630 | ) | (336,416 | ) | (4,094,324 | ) | ||||||
Translation of assets and liabilities in foreign currencies | (1 | ) | 93 | 262 | ||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | (83,631 | ) | (336,323 | ) | (4,094,062 | ) | ||||||
|
|
|
|
|
| |||||||
Net realized and unrealized loss | (109,531 | ) | (360,189 | ) | (4,900,133 | ) | ||||||
|
|
|
|
|
| |||||||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (54,047 | ) | $ | (276,061 | ) | $ | (4,729,571 | ) | |||
|
|
|
|
|
|
a | For the period from January 31, 2012 (commencement of operations) to August 31, 2012. |
b | Net of foreign withholding tax of $6,751, $6,303 and $22,380, respectively. |
c | Rounds to less than $1. |
See notes to financial statements.
40 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Operations (Continued)
iSHARES®, INC.
Period ended August 31, 2012
iShares MSCI Global Select Metals & Mining Producers Funda | iShares MSCI Global Silver Miners Funda | |||||||
NET INVESTMENT INCOME |
| |||||||
Dividends — unaffiliatedb | $ | 55,666 | $ | 21,854 | ||||
Interest — affiliated (Note 2) | 1 | 1 | ||||||
Securities lending income — affiliated (Note 2) | 45 | 3 | ||||||
|
|
|
| |||||
55,712 | 21,858 | |||||||
Less: Other foreign taxes (Note 1) | (66 | ) | — | |||||
|
|
|
| |||||
Total investment income | 55,646 | 21,858 | ||||||
|
|
|
| |||||
EXPENSES | ||||||||
Investment advisory fees (Note 2) | 6,435 | 6,803 | ||||||
|
|
|
| |||||
Total expenses | 6,435 | 6,803 | ||||||
|
|
|
| |||||
Net investment income | 49,211 | 15,055 | ||||||
|
|
|
| |||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||
Net realized gain (loss) from: | ||||||||
Investments — unaffiliated | (36,927 | ) | (83,681 | ) | ||||
In-kind redemptions — unaffiliated | — | (476,571 | ) | |||||
Foreign currency transactions | (1,196 | ) | (743 | ) | ||||
|
|
|
| |||||
Net realized loss | (38,123 | ) | (560,995 | ) | ||||
|
|
|
| |||||
Net change in unrealized appreciation/depreciation on: | ||||||||
Investments | (666,836 | ) | (341,474 | ) | ||||
Translation of assets and liabilities in foreign currencies | (10,297 | ) | 9 | |||||
|
|
|
| |||||
Net change in unrealized appreciation/depreciation | (677,133 | ) | (341,465 | ) | ||||
|
|
|
| |||||
Net realized and unrealized loss | (715,256 | ) | (902,460 | ) | ||||
|
|
|
| |||||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (666,045 | ) | $ | (887,405 | ) | ||
|
|
|
|
a | For the period from January 31, 2012 (commencement of operations) to August 31, 2012. |
b | Net of foreign withholding tax of $3,422 and $1,155, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 41 |
Table of Contents
Statements of Changes in Net Assets
iSHARES®, INC.
iShares MSCI Global Agriculture Producers Fund | iShares MSCI Global Energy Producers Fund | |||||||
Period from to August 31, 2012 | Period from to | |||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||
OPERATIONS: | ||||||||
Net investment income | $ | 55,484 | $ | 84,128 | ||||
Net realized loss | (25,900 | ) | (23,866 | ) | ||||
Net change in unrealized appreciation/depreciation | (83,631 | ) | (336,323 | ) | ||||
|
|
|
| |||||
Net decrease in net assets resulting from operations | (54,047 | ) | (276,061 | ) | ||||
|
|
|
| |||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||
From net investment income | (39,624 | ) | (63,057 | ) | ||||
|
|
|
| |||||
Total distributions to shareholders | (39,624 | ) | (63,057 | ) | ||||
|
|
|
| |||||
CAPITAL SHARE TRANSACTIONS: | ||||||||
Proceeds from shares sold | 10,058,281 | 5,040,238 | ||||||
|
|
|
| |||||
Net increase in net assets from capital share transactions | 10,058,281 | 5,040,238 | ||||||
|
|
|
| |||||
INCREASE IN NET ASSETS | 9,964,610 | 4,701,120 | ||||||
NET ASSETS | ||||||||
Beginning of period | — | — | ||||||
|
|
|
| |||||
End of period | $ | 9,964,610 | $ | 4,701,120 | ||||
|
|
|
| |||||
Undistributed net investment income included in net assets at end of period | $ | 14,236 | $ | 21,897 | ||||
|
|
|
| |||||
SHARES ISSUED | ||||||||
Shares sold | 400,000 | 200,000 | ||||||
|
|
|
| |||||
Net increase in shares outstanding | 400,000 | 200,000 | ||||||
|
|
|
|
a | Commencement of operations. |
See notes to financial statements.
42 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Global Gold Miners Fund | iShares MSCI Global Select Metals & Mining Producers Fund | |||||||
Period from to August 31, 2012 | Period from to August 31, 2012 | |||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||
OPERATIONS: | ||||||||
Net investment income | $ | 170,562 | $ | 49,211 | ||||
Net realized loss | (806,071 | ) | (38,123 | ) | ||||
Net change in unrealized appreciation/depreciation | (4,094,062 | ) | (677,133 | ) | ||||
|
|
|
| |||||
Net decrease in net assets resulting from operations | (4,729,571 | ) | (666,045 | ) | ||||
|
|
|
| |||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||
From net investment income | (135,773 | ) | (25,905 | ) | ||||
|
|
|
| |||||
Total distributions to shareholders | (135,773 | ) | (25,905 | ) | ||||
|
|
|
| |||||
CAPITAL SHARE TRANSACTIONS: | ||||||||
Proceeds from shares sold | 39,170,494 | 124,215,632 | ||||||
Cost of shares redeemed | (2,220,737 | ) | — | |||||
|
|
|
| |||||
Net increase in net assets from capital share transactions | 36,949,757 | 124,215,632 | ||||||
|
|
|
| |||||
INCREASE IN NET ASSETS | 32,084,413 | 123,523,682 | ||||||
NET ASSETS | ||||||||
Beginning of period | — | — | ||||||
|
|
|
| |||||
End of period | $ | 32,084,413 | $ | 123,523,682 | ||||
|
|
|
| |||||
Undistributed net investment income included in net assets at end of period | $ | 34,928 | $ | 22,110 | ||||
|
|
|
| |||||
SHARES ISSUED AND REDEEMED | ||||||||
Shares sold | 1,700,000 | 6,500,000 | ||||||
Shares redeemed | (100,000 | ) | — | |||||
|
|
|
| |||||
Net increase in shares outstanding | 1,600,000 | 6,500,000 | ||||||
|
|
|
|
a | Commencement of operations. |
See notes to financial statements.
FINANCIAL STATEMENTS | 43 |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Global Silver Miners Fund | ||||
Period from to August 31, 2012 | ||||
INCREASE (DECREASE) IN NET ASSETS | ||||
OPERATIONS: | ||||
Net investment income | $ | 15,055 | ||
Net realized loss | (560,995 | ) | ||
Net change in unrealized appreciation/depreciation | (341,465 | ) | ||
|
| |||
Net decrease in net assets resulting from operations | (887,405 | ) | ||
|
| |||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||
From net investment income | (14,066 | ) | ||
|
| |||
Total distributions to shareholders | (14,066 | ) | ||
|
| |||
CAPITAL SHARE TRANSACTIONS: | ||||
Proceeds from shares sold | 4,939,471 | |||
Cost of shares redeemed | (1,943,585 | ) | ||
|
| |||
Net increase in net assets from capital share transactions | 2,995,886 | |||
|
| |||
INCREASE IN NET ASSETS | 2,094,415 | |||
NET ASSETS | ||||
Beginning of period | — | |||
|
| |||
End of period | $ | 2,094,415 | ||
|
| |||
Undistributed net investment income included in net assets at end of period | $ | 5,092 | ||
|
| |||
SHARES ISSUED AND REDEEMED | ||||
Shares sold | 200,000 | |||
Shares redeemed | (100,000 | ) | ||
|
| |||
Net increase in shares outstanding | 100,000 | |||
|
|
a | Commencement of operations. |
See notes to financial statements.
44 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES®, INC.
(For a share outstanding throughout the period)
iShares MSCI Global Agriculture Producers Fund | ||||
Period from to Aug. 31, 2012 | ||||
Net asset value, beginning of period | $ | 24.88 | ||
|
| |||
Income from investment operations: | ||||
Net investment incomeb | 0.28 | |||
Net realized and unrealized lossc | (0.05 | ) | ||
|
| |||
Total from investment operations | 0.23 | |||
|
| |||
Less distributions from: | ||||
Net investment income | (0.20 | ) | ||
|
| |||
Total distributions | (0.20 | ) | ||
|
| |||
Net asset value, end of period | $ | 24.91 | ||
|
| |||
Total return | 0.97 | %d | ||
|
| |||
Ratios/Supplemental data: | ||||
Net assets, end of period (000s) | $ | 9,965 | ||
Ratio of expenses to average net assetse | 0.38 | % | ||
Ratio of expenses to average net assets prior to waived feese | 0.39 | % | ||
Ratio of net investment income to average net assetse | 1.93 | % | ||
Portfolio turnover ratef | 6 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout the period. |
c | The amount 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 rate excludes portfolio securities received or delivered in Creation Units but includes 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 period ended August 31, 2012 would have been 6%. See Note 4. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 45 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout the period)
iShares MSCI Global Energy Producers Fund | ||||
Period from to Aug. 31, 2012 | ||||
Net asset value, beginning of period | $ | 24.79 | ||
|
| |||
Income from investment operations: |
| |||
Net investment incomeb | 0.43 | |||
Net realized and unrealized lossc | (1.39 | ) | ||
|
| |||
Total from investment operations | (0.96 | ) | ||
|
| |||
Less distributions from: | ||||
Net investment income | (0.32 | ) | ||
|
| |||
Total distributions | (0.32 | ) | ||
|
| |||
Net asset value, end of period | $ | 23.51 | ||
|
| |||
Total return | (3.77 | )%d | ||
|
| |||
Ratios/Supplemental data: | ||||
Net assets, end of period (000s) | $ | 4,701 | ||
Ratio of expenses to average net assetse | 0.39 | % | ||
Ratio of net investment income to average net assetse | 3.16 | % | ||
Portfolio turnover ratef | 5 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout the period. |
c | The amount 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 rate excludes portfolio securities received or delivered in Creation Units but includes 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 period ended August 31, 2012 would have been 5%. See Note 4. |
See notes to financial statements.
46 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout the period)
iShares MSCI Global Gold Miners Fund | ||||
Period from to Aug. 31, 2012 | ||||
Net asset value, beginning of period | $ | 25.00 | ||
|
| |||
Income from investment operations: |
| |||
Net investment incomeb | 0.15 | |||
Net realized and unrealized lossc | (5.02 | ) | ||
|
| |||
Total from investment operations | (4.87 | ) | ||
|
| |||
Less distributions from: | ||||
Net investment income | (0.08 | ) | ||
|
| |||
Total distributions | (0.08 | ) | ||
|
| |||
Net asset value, end of period | $ | 20.05 | ||
|
| |||
Total return | (19.45 | )%d | ||
|
| |||
Ratios/Supplemental data: | ||||
Net assets, end of period (000s) | $ | 32,084 | ||
Ratio of expenses to average net assetse | 0.39 | % | ||
Ratio of net investment income to average net assetse | 1.25 | % | ||
Portfolio turnover ratef | 11 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout the period. |
c | The amount 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 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 | 47 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout the period)
iShares MSCI Global Select Metals & Mining Producers Fund | ||||
Period from to Aug. 31, 2012 | ||||
Net asset value, beginning of period | $ | 24.76 | ||
|
| |||
Income from investment operations: |
| |||
Net investment incomeb | 0.37 | |||
Net realized and unrealized lossc | (6.00 | ) | ||
|
| |||
Total from investment operations | (5.63 | ) | ||
|
| |||
Less distributions from: | ||||
Net investment income | (0.13 | ) | ||
|
| |||
Total distributions | (0.13 | ) | ||
|
| |||
Net asset value, end of period | $ | 19.00 | ||
|
| |||
Total return | (22.76 | )%d | ||
|
| |||
Ratios/Supplemental data: | ||||
Net assets, end of period (000s) | $ | 123,524 | ||
Ratio of expenses to average net assetse | 0.39 | % | ||
Ratio of net investment income to average net assetse | 2.98 | % | ||
Portfolio turnover ratef | 1 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout the period. |
c | The amount 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 rate excludes portfolio securities received or delivered in Creation Units but includes 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 period ended August 31, 2012 would have been 1%. See Note 4. |
See notes to financial statements.
48 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout the period)
iShares MSCI Global Silver Miners Fund | ||||
Period from to Aug. 31, 2012 | ||||
Net asset value, beginning of period | $ | 24.87 | ||
|
| |||
Income from investment operations: |
| |||
Net investment incomeb | 0.11 | |||
Net realized and unrealized lossc | (3.90 | ) | ||
|
| |||
Total from investment operations | (3.79 | ) | ||
|
| |||
Less distributions from: | ||||
Net investment income | (0.14 | ) | ||
|
| |||
Total distributions | (0.14 | ) | ||
|
| |||
Net asset value, end of period | $ | 20.94 | ||
|
| |||
Total return | (15.18 | )%d | ||
|
| |||
Ratios/Supplemental data: | ||||
Net assets, end of period (000s) | $ | 2,094 | ||
Ratio of expenses to average net assetse | 0.39 | % | ||
Ratio of net investment income to average net assetse | 0.86 | % | ||
Portfolio turnover ratef | 9 | % |
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 | Not annualized. |
e | Annualized for periods of less than one year. |
f | 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 | 49 |
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 following funds (each, a “Fund,” and collectively, the “Funds”):
iShares MSCI Fund | Diversification Classification | |
Global Agriculture Producersa | Non-diversified | |
Global Energy Producersa | Non-diversified | |
Global Gold Minersa | Non-diversified | |
Global Select Metals & Mining Producersa | Non-diversified | |
Global Silver Minersa | Non-diversified |
a | The Fund commenced operations on January 31, 2012. |
Non-diversified funds generally hold securities of fewer issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers.
The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index. The investment adviser uses a “passive” or index approach to try to achieve each Fund’s investment objective.
Each Fund may invest in securities of non-U.S. issuers that may trade in non-U.S. markets. This may involve certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: generally less liquid and less efficient securities markets; generally greater price volatility; exchange rate fluctuations and exchange controls; imposition of restrictions on the expatriation of funds or other assets of the Funds; 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 Funds in the preparation of their 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.
50 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
SECURITY VALUATION
Each Fund’s investments are valued at fair value each day that the Fund’s listing exchange is open. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) provides oversight of the valuation of investments for the Funds. The investments of each Fund are valued pursuant to policies and procedures developed by the Global Valuation Committee and approved by the Board of Directors of the Company (the “Board”).
• | Equity investments traded on a recognized securities exchange are valued at that day’s last reported trade price or the official closing price, as applicable, on the exchange where the stock is primarily traded. Equity investments traded on a recognized exchange for which there were no sales on that day are valued at the last traded price. |
• | Exchange-traded funds and closed-end funds traded on a recognized securities exchange are valued at that day’s last reported trade price or the official closing price, as applicable, on the exchange where the fund is primarily traded. Funds traded on a recognized exchange for which there were no sales on that day are valued at the last traded price. |
• | Open-end U.S. mutual funds are valued at that day’s published net asset value (NAV). |
In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the fair value of such investment or if a price is not available, the investment will be valued based upon other available factors deemed relevant by the Global Valuation Committee, in accordance with policies approved by the Board. These factors include but are not limited to (i) attributes specific to the investment; (ii) the principal market for the investment; (iii) the customary participants in the principal market for the investment; (iv) data assumptions by market participants for the investment, if reasonably available; (v) quoted prices for similar investments in active markets; and (vi) other factors, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and/or other default rates. Valuations based on such factors are reported to the Board on a quarterly basis.
The Global Valuation Committee employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the Company’s pricing vendors, a regular review of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices and large movements in market values, and reviews of market related activity.
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.
Various inputs are used in determining the fair value of financial instruments. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes. The level of a value determined for 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. The three levels of the fair value hierarchy are as follows:
• | Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities; |
NOTESTO FINANCIAL STATEMENTS | 51 |
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 (such as exchange rates, financing terms, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs; and |
• | Level 3 — Unobservable inputs for the asset or liability, including the Funds’ assumptions used in determining the fair value of investments. |
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. In accordance with the Company’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period.
The following table summarizes the value of each of the Funds’ investments according to the fair value hierarchy as of August 31, 2012. The breakdown of each Fund’s investments into major categories is disclosed in its respective Schedule of Investments.
iShares MSCI Fund and | Investments | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Global Agriculture Producers | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 9,708,978 | $ | — | $ | — | $ | 9,708,978 | ||||||||
Preferred Stocks | 149,432 | — | — | 149,432 | ||||||||||||
Investment Companies | 79,977 | — | — | 79,977 | ||||||||||||
Rights | — | 156 | — | 156 | ||||||||||||
Short-Term Investments | 30,470 | — | — | 30,470 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 9,968,857 | $ | 156 | $ | — | $ | 9,969,013 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Global Energy Producers | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 4,586,505 | $ | — | $ | — | $ | 4,586,505 | ||||||||
Preferred Stocks | 88,011 | — | — | 88,011 | ||||||||||||
Short-Term Investments | 5,936 | — | — | 5,936 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 4,680,452 | $ | — | $ | — | $ | 4,680,452 | |||||||||
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Global Gold Miners | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 32,026,127 | $ | — | $ | — | $ | 32,026,127 | ||||||||
Short-Term Investments | 81,082 | — | — | 81,082 | ||||||||||||
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| |||||||||
$ | 32,107,209 | $ | — | $ | — | $ | 32,107,209 | |||||||||
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| |||||||||
52 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
iShares MSCI Fund and | Investments | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Global Select Metals & Mining Producers | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 115,784,668 | $ | 69 | $ | 0 | a | $ | 115,784,737 | |||||||
Preferred Stocks | 7,134,928 | — | — | 7,134,928 | ||||||||||||
Rights | — | 0 | a | — | 0 | a | ||||||||||
Short-Term Investments | 3,750 | — | — | 3,750 | ||||||||||||
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| |||||||||
$ | 122,923,346 | $ | 69 | $ | 0 | a | $ | 122,923,415 | ||||||||
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Global Silver Miners | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 2,090,657 | $ | — | $ | — | $ | 2,090,657 | ||||||||
Short-Term Investments | 10,247 | — | — | 10,247 | ||||||||||||
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| |||||||||
$ | 2,100,904 | $ | — | $ | — | $ | 2,100,904 | |||||||||
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a | Rounds to less than $1. |
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are accounted for on trade date. Dividend income is recognized on the ex-dividend date, net of any foreign taxes withheld at source. Any taxes withheld that are reclaimable from foreign tax authorities as of August 31, 2012 are reflected in dividends receivable. Non-cash dividends received in the form of stock in an elective dividend, if any, are recorded as dividend income at fair value. Distributions received by the 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. Interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method.
FOREIGN CURRENCY TRANSLATION
The accounting records of the Funds are maintained in U.S. dollars. Foreign currencies, as well as investment securities and other assets and liabilities denominated in foreign currencies, are translated into U.S. dollars using exchange rates deemed appropriate by the investment adviser. 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, capital gains on investments, certain foreign currency transactions or other corporate events. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the Funds invest. These foreign taxes, if any, are paid by the Funds and are reflected in their Statements of Operations as follows: foreign taxes withheld at source are presented as a reduction of income, foreign taxes on
NOTESTO FINANCIAL STATEMENTS | 53 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
securities lending income are presented as a reduction of securities lending income, foreign taxes on capital gains from sales of investments and foreign currency transactions are included in their respective net realized gain (loss) categories, and foreign taxes on other corporate events are reflected in “Other foreign taxes.” Foreign taxes payable as of August 31, 2012, if any, are disclosed in the Funds’ Statements of Assets and Liabilities.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends and distributions paid by each Fund are recorded on the ex-dividend dates. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds.
FEDERAL INCOME TAXES
Each Fund is treated as an entity separate from the Company’s other funds 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 is required.
2. | INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES |
Pursuant to an Investment Advisory Agreement with the Company, BlackRock Fund Advisors (“BFA”) manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock, Inc. (“BlackRock”). Under the Investment Advisory Agreement, BFA is responsible for substantially all expenses of the Funds, except interest, taxes, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution fees, litigation expenses and any extraordinary expenses.
For its investment advisory services to each Fund, BFA is entitled to an annual investment advisory fee of 0.39% based on the average daily net assets of each Fund.
BFA has contractually agreed to waive a portion of its investment advisory fees for the iShares MSCI Global Agriculture Producers and iShares MSCI Global Select Metals & Mining Producers Funds through December 31, 2014 in an amount equal to the investment advisory fees payable on the amount of each Fund’s investment in other iShares funds. The iShares MSCI Global Select Metals & Mining Producers Fund did not hold any iShares funds during the period ended August 31, 2012.
The U.S. Securities and Exchange Commission has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (“BTC”) to serve as securities lending agent for the Funds, subject to applicable conditions. BTC is an affiliate of BFA. Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, and any fees or other payments to and from borrowers of securities. Each Fund retains 65% of securities lending income and pays a fee to BTC equal to 35% of such income. As securities lending agent, BTC is responsible for all transaction fees and all other operational costs relating to securities lending activities, other than extraordinary expenses. BTC is also responsible for fees and expenses incurred by each Fund as a result of the investment of cash collateral received for securities on loan in a money market fund managed by BFA or an affiliate.
54 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
For the period ended August 31, 2012, BTC earned securities lending agent fees from the Funds as follows:
iShares MSCI Fund | Securities Lending Agent Fees | |||
Global Agriculture Producers | $ | 0 | a | |
Global Energy Producers | 0 | a | ||
Global Gold Miners | 167 | |||
Global Select Metals & Mining Producers | 24 | |||
Global Silver Miners | 2 |
a | Rounds to less than $1. |
At a special meeting of the Board held on January 5, 2012, the directors approved a new distribution agreement with BlackRock Investments, LLC (“BRIL”). BRIL is an affiliate of BFA. Effective April 1, 2012, BRIL replaced SEI Investments Distribution Co. as the distributor for each Fund. Pursuant to the new distribution agreement, BFA is responsible for any fees or expenses for distribution services provided to the Funds.
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 — affiliated” in the Statements of Operations.
The PNC Financial Services Group, Inc. is the largest stockholder of BlackRock and is considered to be an affiliate of the Funds for 1940 Act purposes.
The iShares MSCI Global Agriculture Producers and iShares MSCI Global Select Metals & Mining Producers Funds, in order to improve their portfolio liquidity and their ability to track their respective underlying index, may invest in shares of other iShares funds that invest in securities in each Fund’s respective underlying index.
Investments in issuers considered to be affiliates of the Funds (excluding short-term investments) during the period ended August 31, 2012, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:
iShares MSCI Fund and Name of Affiliated Issuer | Shares Held at Beginning of Period | Shares Purchased | Shares Sold | Shares Held at End of Period | Value at of Period | Dividend Income | Net Realized Gain (Loss) | |||||||||||||||||||||
Global Agriculture Producers | ||||||||||||||||||||||||||||
iShares S&P India Nifty 50 Index Fund | — | 3,716 | (144 | ) | 3,572 | $ | 79,977 | $ | 168 | $ | (623 | ) | ||||||||||||||||
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Certain directors and officers of the Company are also officers of BTC and/or BFA.
NOTESTO FINANCIAL STATEMENTS | 55 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
3. | INVESTMENT PORTFOLIO TRANSACTIONS |
Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the period ended August 31, 2012 were as follows:
iShares MSCI Fund | Purchases | Sales | ||||||
Global Agriculture Producers | $ | 1,086,638 | $ | 330,770 | ||||
Global Energy Producers | 455,236 | 201,558 | ||||||
Global Gold Miners | 2,753,364 | 2,730,222 | ||||||
Global Select Metals & Mining Producers | 18,628,589 | 153,006 | ||||||
Global Silver Miners | 285,367 | 289,262 |
In-kind transactions (see Note 4) for the period ended August 31, 2012 were as follows:
iShares MSCI Fund | In-kind Purchases | In-kind Sales | ||||||
Global Agriculture Producers | $ | 9,290,581 | $ | — | ||||
Global Energy Producers | 4,780,240 | — | ||||||
Global Gold Miners | 39,118,738 | 2,215,219 | ||||||
Global Select Metals & Mining Producers | 105,148,319 | — | ||||||
Global Silver Miners | 4,934,895 | 1,938,617 |
4. | CAPITAL SHARE TRANSACTIONS |
Capital shares are issued and redeemed by each Fund only in aggregations of a specified number of shares or multiples thereof (“Creation Units”) at net asset value. Except when aggregated in Creation Units, shares of 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 in the Company generally consists of the in-kind deposit of a designated portfolio of securities, which constitutes an optimized representation of the securities of that fund’s underlying index, and a specified amount of cash. Certain funds in the Company may be offered in Creation Units solely or partially for cash in U.S. dollars. Investors purchasing and redeeming Creation Units may pay a purchase transaction fee and a redemption transaction fee directly to State Street Bank and Trust Company, the Company’s administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash. Investors transacting in Creation Units for cash pay an additional variable charge to compensate the relevant fund for certain transaction costs (i.e., stamp taxes, taxes on currency or other financial transactions, and brokerage costs) and market impact expenses relating to investing in portfolio securities.
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.
56 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
5. | LOANS OF PORTFOLIO SECURITIES |
Each Fund may lend its investment securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. government. The initial collateral received by each Fund is required to have a value of at least 102% of the 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. Each Fund could suffer a loss if the value of an investment purchased with cash collateral falls below the value of the cash collateral received.
As of August 31, 2012, any securities on loan 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, 2012 and the value of the related collateral are disclosed in the Statements of Assets and Liabilities. Securities lending income, as disclosed in the Statements of Operations, represents the income earned from the investment of the cash collateral, net of fees and other payments to and from borrowers, and less the fees paid to BTC as securities lending agent.
6. | INCOME TAX INFORMATION |
U.S. GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset values per share. The following permanent differences as of August 31, 2012, attributable to passive foreign investment companies, foreign currency transactions and realized gains (losses) from in-kind redemptions, were reclassified to the following accounts:
iShares MSCI Fund | Paid-in Capital | Undistributed Net Investment Income/Distributions in Excess of Net Investment Income | Undistributed Net Realized Gain/Accumulated Net Realized Loss | |||||||||
Global Agriculture Producers | $ | — | $ | (1,624 | ) | $ | 1,624 | |||||
Global Energy Producers | — | 826 | (826 | ) | ||||||||
Global Gold Miners | (180,781 | ) | 139 | 180,642 | ||||||||
Global Select Metals & Mining Producers | — | (1,196 | ) | 1,196 | ||||||||
Global Silver Miners | (479,314 | ) | 4,103 | 475,211 |
NOTESTO FINANCIAL STATEMENTS | 57 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
The tax character of distributions paid during the period ended August 31, 2012 was as follows:
iShares MSCI Fund | 2012 | |||
Global Agriculture Producers | ||||
Ordinary income | $ | 39,624 | ||
|
| |||
Global Energy Producers | ||||
Ordinary income | $ | 63,057 | ||
|
| |||
Global Gold Miners | ||||
Ordinary income | $ | 135,773 | ||
|
| |||
Global Select Metals & Mining Producers | ||||
Ordinary income | $ | 25,905 | ||
|
| |||
Global Silver Miners | ||||
Ordinary income | $ | 14,066 | ||
|
| |||
As of August 31, 2012, the tax components of accumulated net earnings (losses) were as follows:
iShares MSCI Fund | Undistributed Ordinary Income | Capital Loss Carryforwards | Net Unrealized Gains (Losses) a | Total | ||||||||||||
Global Agriculture Producers | $ | 14,301 | $ | (20,341 | ) | $ | (87,631 | ) | $ | (93,671 | ) | |||||
Global Energy Producers | 24,467 | (20,639 | ) | (342,946 | ) | (339,118 | ) | |||||||||
Global Gold Miners | 34,928 | (259,179 | ) | (4,460,312 | ) | (4,684,563 | ) | |||||||||
Global Select Metals & Mining Producers | 23,590 | (9,471 | ) | (706,069 | ) | (691,950 | ) | |||||||||
Global Silver Miners | 11,498 | (83,082 | ) | (350,573 | ) | (422,157 | ) |
a | The difference between book-basis and tax-basis unrealized gains (losses) was attributable primarily to the tax deferral of losses on wash sales and the realization for tax purposes of unrealized gains on investments in passive foreign investment companies. |
As of August 31, 2012, the Funds had non-expiring capital loss carryforwards available to offset future realized capital gains as follows:
iShares MSCI Fund | Non- Expiring | |||
Global Agriculture Producers | $ | 20,341 | ||
Global Energy Producers | 20,639 | |||
Global Gold Miners | 259,179 | |||
Global Select Metals & Mining Producers | 9,471 | |||
Global Silver Miners | 83,082 |
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.
58 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
As of August 31, 2012, gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes were as follows:
iShares MSCI Fund | Tax Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation (Depreciation) | ||||||||||||
Global Agriculture Producers | $ | 10,056,643 | $ | 244,122 | $ | (331,752 | ) | $ | (87,630 | ) | ||||||
Global Energy Producers | 5,023,491 | 119,205 | (462,244 | ) | (343,039 | ) | ||||||||||
Global Gold Miners | 36,567,783 | 823,941 | (5,284,515 | ) | (4,460,574 | ) | ||||||||||
Global Select Metals & Mining Producers | 123,619,187 | 16,455 | (712,227 | ) | (695,772 | ) | ||||||||||
Global Silver Miners | 2,451,486 | 18,886 | (369,468 | ) | (350,582 | ) |
Management has reviewed the tax positions as of August 31, 2012, and has determined that no provision for income tax is required in the Funds’ financial statements.
7. | 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.
NOTESTO FINANCIAL STATEMENTS | 59 |
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 Global Agriculture Producers Fund, iShares MSCI Global Energy Producers Fund, iShares MSCI Global Gold Miners Fund, iShares MSCI Global Select Metals & Mining Producers Fund and iShares MSCI Global Silver Miners Fund (the “Funds”), at August 31, 2012, the results of each of their operations, the changes in each of their net assets and their financial highlights for the period of January 31, 2012 (commencement of operations) through August 31, 2012, 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 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, 2012 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
October 23, 2012
60 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES®, INC.
For the fiscal period ended August 31, 2012, 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 Fund | Foreign Source Income Earned | Foreign Taxes Paid | ||||||
Global Agriculture Producers | $ | 55,804 | $ | 6,544 | ||||
Global Energy Producers | 68,612 | 6,296 | ||||||
Global Gold Miners | 209,943 | 21,875 | ||||||
Global Select Metals & Mining Producers | 54,101 | 3,488 | ||||||
Global Silver Miners | 22,343 | 1,155 |
For corporate shareholders, the following percentages of the income dividends paid by the Funds during the fiscal period ended August 31, 2012 qualified for the dividends-received deduction:
iShares MSCI Fund | Dividends- Received Deduction | |||
Global Agriculture Producers | 43.59 | % | ||
Global Energy Producers | 51.07 | |||
Global Gold Miners | 25.58 | |||
Global Select Metals & Mining Producers | 21.57 | |||
Global Silver Miners | 4.73 |
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 period ended August 31, 2012:
iShares MSCI Fund | Qualified Dividend Income | |||
Global Agriculture Producers | $ | 46,168 | ||
Global Energy Producers | 69,353 | |||
Global Gold Miners | 157,648 | |||
Global Select Metals & Mining Producers | 29,393 | |||
Global Silver Miners | 15,221 |
In February 2013, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2012. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.
TAX INFORMATION | 61 |
Table of Contents
Supplemental Information (Unaudited)
iSHARES®, INC.
Premium/Discount Information
The tables that follow presents 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 Funds are 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 the 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 the Funds. The information shown for each Fund is for each full calendar quarter completed after the inception date through the date of the most recent 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 Global Agriculture Producers Fund
Period Covered: April 1, 2012 through June 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 1.0% and Less than 1.5% | 3 | 4.76 | % | |||||
Greater than 0.5% and Less than 1.0% | 21 | 33.33 | ||||||
Between 0.5% and –0.5% | 37 | 58.74 | ||||||
Less than -0.5% and Greater than –1.0% | 2 | 3.17 | ||||||
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| |||||
63 | 100.00 | % | ||||||
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|
iShares MSCI Global Energy Producers Fund
Period Covered: April 1, 2012 through June 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 0.5% and Less than 1.0% | 4 | 6.35 | % | |||||
Between 0.5% and –0.5% | 44 | 69.84 | ||||||
Less than -0.5% and Greater than –1.0% | 15 | 23.81 | ||||||
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|
|
| |||||
63 | 100.00 | % | ||||||
|
|
|
|
62 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Global Gold Miners Fund
Period Covered: April 1, 2012 through June 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 1.5% | 2 | 3.17 | % | |||||
Greater than 1.0% and Less than 1.5% | 2 | 3.17 | ||||||
Greater than 0.5% and Less than 1.0% | 14 | 22.22 | ||||||
Between 0.5% and –0.5% | 42 | 66.68 | ||||||
Less than -0.5% and Greater than –1.0% | 2 | 3.17 | ||||||
Less than -1.0% and Greater than –1.5% | 1 | 1.59 | ||||||
|
|
|
| |||||
63 | 100.00 | % | ||||||
|
|
|
|
iShares MSCI Global Select Metals & Mining Producers Fund
Period Covered: April 1, 2012 through June 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 3.0% | 4 | 6.35 | % | |||||
Greater than 2.5% and Less than 3.0% | 3 | 4.76 | ||||||
Greater than 2.0% and Less than 2.5% | 5 | 7.94 | ||||||
Greater than 1.5% and Less than 2.0% | 6 | 9.52 | ||||||
Greater than 1.0% and Less than 1.5% | 6 | 9.52 | ||||||
Greater than 0.5% and Less than 1.0% | 5 | 7.94 | ||||||
Between 0.5% and –0.5% | 25 | 39.68 | ||||||
Less than -0.5% and Greater than –1.0% | 8 | 12.70 | ||||||
Less than -1.0% and Greater than –1.5% | 1 | 1.59 | ||||||
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|
|
| |||||
63 | 100.00 | % | ||||||
|
|
|
|
iShares MSCI Global Silver Miners Fund
Period Covered: April 1, 2012 through June 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 0.5% and Less than 1.0% | 3 | 4.76 | % | |||||
Between 0.5% and –0.5% | 13 | 20.63 | ||||||
Less than –0.5% and Greater than –1.0% | 15 | 23.81 | ||||||
Less than –1.0% and Greater than –1.5% | 12 | 19.06 | ||||||
Less than –1.5% and Greater than –2.0% | 13 | 20.63 | ||||||
Less than –2.0% and Greater than –2.5% | 6 | 9.52 | ||||||
Less than –2.5% and Greater than –3.0% | 1 | 1.59 | ||||||
|
|
|
| |||||
63 | 100.00 | % | ||||||
|
|
|
|
SUPPLEMENTAL INFORMATION | 63 |
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 he or she resigns, is removed, dies, retires or becomes incapacitated. The President, Treasurer and Secretary shall each hold office until their successors are chosen and qualified, and all other officers shall hold office until he or she resigns or is removed. Directors who are not interested persons (as defined in the 1940 Act) are referred to as Independent Directors.
The registered investment companies advised by BFA or its affiliates are organized into one complex of closed-end funds, two complexes of open-end funds and one complex of exchange-traded funds (“Exchange-Traded Fund Complex”) (each, a “BlackRock Fund Complex”). Each Fund is included in the BlackRock Fund Complex referred to as the Exchange-Traded Fund Complex. Each Director of iShares, Inc. also serves as a Trustee of iShares Trust, a Director of iShares MSCI Russia Capped Index Fund, Inc. and a Trustee of iShares U.S. ETF Trust and, as a result, oversees a total of 276 funds within the Exchange-Traded 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 Robert H. Silver 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-iShares (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 (55) | 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); President of Board of Directors, Hope & Heroes Children’s Cancer Fund (since 2002); President of the Board of Directors, Periwinkle Theatre for Youth (since 1983). | Director of BlackRock, Inc. (since 2007); Trustee of iShares Trust (since 2009); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). | |||
Michael Lathamb (47) | Director (since 2010); President (since 2007). | Chairman of iShares, BlackRock (since 2011); Global Chief Executive Officer of iShares, BlackRock (2010-2011); Managing Director, BlackRock (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, BGI (2003-2007). | Trustee of iShares Trust (since 2010); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). |
a | Robert S. Kapito is deemed to be an “interested person” (as defined in the 1940 Act) of the Trust 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 Trust due to his affiliations with BlackRock, Inc. and its affiliates. |
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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 | |||
Robert H. Silver (57) | Director (since 2007); Independent Chairman (since 2012). | President and Co-Founder of The Bravitas Group, Inc. (since 2006); Director and Vice Chairman of the YMCA of Greater NYC (2001-2011); Broadway Producer (2006-2011); 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); President and Chief Operating Officer of UBS Financial Services Inc. (formerly Pain Webber Inc.) (2004-2005) and various executive positions with UBS and its affiliates (1988-2005); CPA and Audit Manager of KPMG, LLP (formerly Peat Marwick Mitchell) (1977-1983). | Trustee of iShares Trust (since 2007); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Independent Chairman of iShares, Inc., iShares MSCI Russia Capped Index Fund, Inc. and iShares U.S. ETF Trust (since 2012). | |||
Cecilia H. Herbert (63) | Director (since 2005); Nominating and Governance Committee Chair and Equity Plus Committee Chair (since 2012). | Director (since 1998) and President (2007-2011) of the Board of Directors, Catholic Charities CYO; Trustee (since 2002) and Chair of the Finance Committee (2006-2009) and Investment Committee (since 2006), The Thacher School; Trustee of Pacific Select Funds (2004-2005); Member (since 1994) and Chair (1994-2005) of the Investment Committee, Archdiocese of San Francisco. | Trustee of iShares Trust (since 2005); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of Forward Funds (35 portfolios) (since 2009). | |||
Charles A. Hurty (69) | Director (since 2005); (since 2006). | Retired; Partner, KPMG LLP (1968-2001). | Trustee of iShares Trust (since 2005); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of GMAM Absolute Return Strategy Fund (1 portfolio) (since 2002); Director of SkyBridge Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (1 portfolio) (since 2002). | |||
John E. Kerrigan (57) | Director (since 2005); (since 2012). | Chief Investment Officer, Santa Clara University (since 2002). | Trustee of iShares Trust (since 2005); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). |
DIRECTORAND OFFICER INFORMATION | 65 |
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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 | |||
John E. Martinez (51) | Director (since 2003); Securities Lending Committee Chair (since 2012). | Director of FirstREX Agreement Corp. (formerly EquityRock, Inc.) (since 2005). | Trustee of iShares Trust (since 2003); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). | |||
George G.C. Parker (73) | Director (since 2002). | Dean Witter Distinguished Professor of Finance, Emeritus, Stanford University Graduate School of Business (Professor since 1973; Emeritus since 2006). | Trustee of iShares Trust (since 2002); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of Tejon Ranch Company (since 1999); Director of Threshold Pharmaceuticals (since 2004); Director of Colony Financial, Inc. (since 2009); Director of First Republic Bank (since 2010). | |||
Madhav V. Rajan (48) | Director (since 2011); 15(c) Committee Chair (since 2012). | Robert K. Jaedicke Professor of Accounting and Senior Associate Dean for Academic Affairs and Head of MBA Program, Stanford University Graduate School of Business (since 2001); Professor of Law (by courtesy), Stanford Law School (since 2005); Visiting Professor, University of Chicago (Winter 2007-2008). | Trustee of iShares Trust (since 2011); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2011); Trustee of iShares U.S. ETF Trust (since 2011). |
66 | 2012 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 | ||
Edward B. Baer (44) | Vice President and Chief Legal Officer (since 2012). | Managing Director, BlackRock (since 2006). | ||
Eilleen M. Clavere (60) | Secretary (since 2007). | Director, BlackRock (since 2009); Director of Legal Administration of Intermediary Investor Business, BGI (2006-2009). | ||
Jack Gee (53) | Treasurer and Chief Financial Officer (since 2008). | Managing Director, BlackRock (since 2009); Senior Director of Fund Administration of Intermediary Investor Business, BGI (2009); Director, Fund Administration of Intermediary Investor Business, BGI (2004-2009). | ||
Amy Schioldager (50) | Executive Vice President (since 2007). | Managing Director, BlackRock (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008). | ||
Ira P. Shapiro (49) | Vice President (since 2007). | Managing Director, BlackRock (since 2009); Chief Legal Officer, Exchange- Traded Funds Complex (2007-2012); Associate General Counsel, BGI (2004-2009). | ||
Scott Radell (43) | Executive Vice President (since 2012). | Managing Director, BlackRock (since 2009); Head of Portfolio Solutions, BGI (2007-2009); Credit Portfolio Manager, BGI (2005-2007). |
DIRECTORAND OFFICER INFORMATION | 67 |
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Notes:
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Notes:
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For more information visit www.iShares.com
or call 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 BlackRock Investments, LLC (together with its affiliates, “BlackRock”).
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds. BlackRock is not affiliated with the company listed above.
A description of the policies that the 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 daily and monthly basis on the Funds’ website.
©2012 BlackRock. All rights reserved. iShares® and BlackRock® are registered trademarks of BlackRock. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.
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iS-AR-812-0812
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Item 2. Code of Ethics.
iShares, Inc. (the “Registrant”) adopted a new code of ethics on July 1, 2011 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, 2012, there were no amendments to any provision of the former and new codes of ethics, nor were there any waivers granted from any provision of the former and new codes of ethics. A copy of the new 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, Robert H. Silver and Madhav V. Rajan, all of whom are independent, as that term is defined under Item 3(a)(2).
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Item 4. Principal Accountant Fees and Services.
The principal accountant fees disclosed in items 4(a), 4(b), 4(c), 4(d) and 4(g) are for the forty-seven series of the Registrant for which the fiscal year-end is August 31, 2012 (the “Funds”), and whose annual financial statements are reported in Item 1.
(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 $498,227 for the fiscal year ended August 31, 2011 and $706,950 for the fiscal year ended August 31, 2012. |
(b) | Audit-Related Fees – There were no fees billed for the fiscal years ended August 31, 2011 and August 31, 2012 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 $161,600 for the fiscal year ended August 31, 2011 and $230,230 for the fiscal year ended August 31, 2012. |
(d) | All Other Fees – There were no other fees billed for the fiscal years ended August 31, 2011 and August 31, 2012 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, 2012 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, $2,611,296 for the fiscal year ended August 31, 2011 and $4,042,680 for the fiscal year ended August 31, 2012. |
(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. |
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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, John E. Martinez and Madhav V. Rajan.
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 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 23, 2012 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By: /s/ Michael Latham | ||
Michael Latham, President (Principal Executive Officer) | ||
Date: | October 23, 2012 | |
By: /s/ Jack Gee | ||
Jack Gee, Treasurer and Chief Financial Officer (Principal Financial Officer) | ||
Date: | October 23, 2012 |