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: 415-670-2000
Date of fiscal year end: August 31, 2013
Date of reporting period: August 31, 2013
Table of Contents
Item 1. Reports to Stockholders.
Table of Contents
AUGUST 31, 2013
2013 ANNUAL REPORT
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iShares, Inc.
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Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI JAPAN ETF
ASIA MARKET OVERVIEW
Asian stock markets experienced mixed performance during the 12-month period ended August 31, 2013 (the “reporting period”). Slow global growth and shifting policy winds in the Western world were among the biggest challenges for Asian equities during the reporting period.
Asian equities began the reporting period with weak performance, partially due to the European debt crisis. Global stock markets rallied in the fall of 2012 when the European Central Bank (the “ECB”) pledged to backstop the euro by buying bonds of the weaker Southern European countries. The ECB’s move relieved tension related to Europe’s debt crisis, which calmed markets throughout the world. Asian equities benefited from the rally on expectations of improving growth in Europe and the United States.
During the first quarter of 2013, Asian equities broadly declined. Stocks in Europe and the United States posted solid returns on better-than-expected economic data, while emerging markets declined on expectations that growth would remain uneven until the developed world established a solid growth trend.
Most Asian stock markets tumbled from May 2013 through the end of the reporting period. The U.S. Federal Reserve Bank (the “Fed”) announced that it may reduce bond purchases, which was helping stimulate global growth. The announcement unnerved investors, prompting a global selloff in equities and other risky assets. Emerging markets proved to be particularly vulnerable to the policy change, as most emerging countries rely heavily on foreign capital for economic growth and balance between imports and exports. Most emerging markets experienced an exodus of foreign capital, which lowered the value of their stocks and currencies.
China’s economy grew at roughly 8.0% annualized pace during the reporting period, which was down from the torrid 10.0% growth rate of prior decades. The Chinese economy continued to transition from investment and export-driven growth to a focus on domestic consumption. This shift toward more sustainable growth sources has generated slower growth rates for the Chinese economy in recent years, extending into the reporting period. Fears of bad loans and excessive debt levels hindered economic development somewhat, prompting the International Monetary Fund to sound a warning about the Chinese banking system. In June 2013, interbank lending rates hit an all-time high on fears of bad debt.
The economic slowdown in China, the largest economy in Asia, reverberated throughout Asia. Countries that rely heavily on exports to China — Indonesia, Thailand, Malaysia and South Korea — experienced economic difficulty, as exports to China and foreign investment declined. Australia’s economy also downshifted, reflecting weaker exports of natural resources to China. Meanwhile, Hong Kong’s economy continued to benefit from Chinese tourism and shopping, as visitors were attracted to the lack of sales tax and a reputation for authentic consumer items. The Philippines was also a bright spot, as services and investment grew at a relatively fast pace.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 5 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI JAPAN ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | 23.46% | 21.63% | 24.18% | 23.46% | 21.63% | 24.18% | ||||||||||||||||||||
5 Years | 0.48% | 0.65% | 1.05% | 2.42% | 3.27% | 5.37% | ||||||||||||||||||||
10 Years | 4.00% | 3.87% | 4.60% | 48.07% | 46.15% | 56.83% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 8 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,074.90 | $ | 2.61 | $ | 1,000.00 | $ | 1,022.70 | $ | 2.55 | 0.50% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 8 for more information. |
6 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI JAPAN ETF
The iShares MSCI Japan ETF (the “Fund”), formerly the iShares MSCI Japan Index 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 reporting period ended August 31, 2013, the total return for the Fund was 23.46%, net of fees, while the total return for the Index was 24.18%.
The Index rallied sharply during the reporting period. The Japanese stock market posted its biggest gains from November 2012 to May 2013, buoyed by optimism about new leadership in Japan and changes to Japanese monetary policy.
The Japanese economy has been mired in slow growth and declining prices for more than a decade. During the reporting period, the new leadership of Japan made strong commitments to quantitative easing, or asset purchases by the Bank of Japan, to support growth and risk taking sentiment. These relatively drastic monetary policy moves ignited a sharp rally in stocks and a decline in the Japanese yen, as investors hoped that Japan’s export-driven economy would benefit from the stimulus and other economic reforms. The Japanese stock market declined with global markets during the summer of 2013, as investors reacted to the Fed’s announcement that it may slow the pace of bond purchasing.
Turning to sector performance, nine of the ten economic sectors in the Index posted positive returns during the reporting period. The financials sector had the largest positive impact on Index performance, as investors anticipated improving credit conditions and banking profits. The consumer discretionary sector also delivered a solid positive contribution to returns during the reporting period, as hopes that Japanese consumers would finally increase spending following many years of heavy saving. The industrials and materials sectors rounded out the top contributors to Index performance, reflecting expectations of a broad-based economic recovery. On the downside, the energy sector was the only sector with negative performance for the reporting period.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector* | Percentage of Net Assets |
Consumer Cyclical | 27.52 | % | ||
Financial | 20.49 | |||
Industrial | 19.21 | |||
Consumer Non-Cyclical | 12.99 | |||
Communications | 6.78 | |||
Basic Materials | 5.48 | |||
Technology | 3.18 | |||
Utilities | 2.79 | |||
Energy | 1.33 | |||
Short-Term and Other Net Assets | 0.23 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Toyota Motor Corp. | 6.62 | % | ||
Mitsubishi UFJ Financial Group Inc. | 2.98 | |||
SoftBank Corp. | 2.38 | |||
Honda Motor Co. Ltd. | 2.36 | |||
Sumitomo Mitsui Financial Group Inc. | 2.29 | |||
Mizuho Financial Group Inc. | 1.86 | |||
Japan Tobacco Inc. | 1.50 | |||
Takeda Pharmaceutical Co. Ltd. | 1.45 | |||
Canon Inc. | 1.37 | |||
Mitsubishi Estate Co. Ltd. | 1.27 | |||
|
| |||
TOTAL | 24.08 | % | ||
|
|
* | 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. |
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 7 |
Table of Contents
Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.iShares.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are redeemed or sold in the market. Performance for certain funds may reflect a waiver of a portion of investment management fees. Without such waiver, performance would have been lower.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The 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 a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of a fund may not have traded in the secondary market until after the fund’s inception, for the period from inception to the first day of secondary trading, 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 at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. 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.
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 expense example, which is based on an investment of $1,000 invested on March 1, 2013 and held through August 31, 2013, 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.
Actual Expenses — The table provides information about actual account values and actual expenses. To estimate the expenses that you paid on your account 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 for your Fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Example for Comparison Purposes — The table also 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. 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 hypothetical examples are 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.
8 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI JAPAN ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 99.77% |
| |||||||
ADVERTISING — 0.33% |
| |||||||
Dentsu Inc. | 795,000 | $ | 26,617,490 | |||||
Hakuhodo DY Holdings Inc. | 111,300 | 7,600,367 | ||||||
|
| |||||||
34,217,857 | ||||||||
AEROSPACE & DEFENSE — 0.19% |
| |||||||
IHI Corp. | 4,770,000 | 19,349,335 | ||||||
|
| |||||||
19,349,335 | ||||||||
AGRICULTURE — 1.50% |
| |||||||
Japan Tobacco Inc. | 4,611,000 | 156,731,234 | ||||||
|
| |||||||
156,731,234 | ||||||||
AIRLINES — 0.25% |
| |||||||
ANA Holdings Inc.a | 4,770,000 | 9,723,284 | ||||||
Japan Airlines Co. Ltd. | 318,000 | 16,886,103 | ||||||
|
| |||||||
26,609,387 | ||||||||
APPAREL — 0.11% |
| |||||||
ASICS Corp. | 636,000 | 11,188,259 | ||||||
|
| |||||||
11,188,259 | ||||||||
AUTO MANUFACTURERS — 12.02% |
| |||||||
Daihatsu Motor Co. Ltd. | 341,000 | 6,405,371 | ||||||
Fuji Heavy Industries Ltd. | 2,437,000 | 59,338,460 | ||||||
Hino Motors Ltd. | 1,590,000 | 20,856,444 | ||||||
Honda Motor Co. Ltd. | 6,837,000 | 247,028,130 | ||||||
Isuzu Motors Ltd. | 4,770,000 | 29,218,468 | ||||||
Mazda Motor Corp.b | 11,130,000 | 44,808,133 | ||||||
Mitsubishi Motors Corp.b | 1,749,900 | 18,459,425 | ||||||
Nissan Motor Co. Ltd. | 10,494,000 | 104,496,132 | ||||||
Suzuki Motor Corp. | 1,590,000 | 34,225,960 | ||||||
Toyota Motor Corp. | 11,448,000 | 693,075,677 | ||||||
|
| |||||||
1,257,912,200 | ||||||||
AUTO PARTS & EQUIPMENT — 3.57% |
| |||||||
Aisin Seiki Co. Ltd. | 795,200 | 30,676,574 | ||||||
Bridgestone Corp. | 2,703,000 | 88,984,253 | ||||||
Denso Corp. | 2,067,000 | 94,802,018 | ||||||
JTEKT Corp. | 954,000 | 12,513,867 | ||||||
Koito Manufacturing Co. Ltd. | 100,000 | 1,772,410 | ||||||
NGK Insulators Ltd. | 1,590,000 | 22,169,087 | ||||||
NGK Spark Plug Co. Ltd. | 351,000 | 6,807,858 | ||||||
NHK Spring Co. Ltd. | 636,000 | 6,773,888 | ||||||
NOK Corp. | 477,000 | 6,995,903 | ||||||
Stanley Electric Co. Ltd. | 541,800 | 10,442,275 | ||||||
Sumitomo Electric Industries Ltd. | 3,180,000 | 42,944,504 | ||||||
Sumitomo Rubber Industries Inc. | 795,000 | 11,222,290 | ||||||
Toyoda Gosei Co. Ltd. | 318,000 | 7,717,046 |
Security | Shares | Value | ||||||
Toyota Boshoku Corp. | 318,000 | $ | 4,187,494 | |||||
Toyota Industries Corp. | 636,000 | 25,863,935 | ||||||
|
| |||||||
373,873,402 | ||||||||
BANKS — 10.39% | ||||||||
Aozora Bank Ltd. | 4,770,000 | 13,758,447 | ||||||
Bank of Kyoto Ltd. (The) | 1,590,000 | 13,094,022 | ||||||
Bank of Yokohama Ltd. (The) | 4,770,000 | 25,134,689 | ||||||
Chiba Bank Ltd. (The) | 3,180,000 | 21,812,567 | ||||||
Chugoku Bank Ltd. (The) | 30,000 | 403,302 | ||||||
Fukuoka Financial Group Inc. | 3,186,000 | 13,638,282 | ||||||
Gunma Bank Ltd. (The) | 1,590,000 | 8,588,901 | ||||||
Hachijuni Bank Ltd. (The) | 1,590,000 | 8,977,832 | ||||||
Hiroshima Bank Ltd. (The) | 1,590,000 | 6,384,956 | ||||||
Hokuhoku Financial Group Inc. | 4,770,000 | 8,896,805 | ||||||
Iyo Bank Ltd. (The) | 1,590,000 | 15,946,186 | ||||||
Joyo Bank Ltd. (The) | 3,180,000 | 16,464,761 | ||||||
Mitsubishi UFJ Financial Group Inc. | 53,106,080 | 311,767,845 | ||||||
Mizuho Financial Group Inc. | 95,718,080 | 195,114,060 | ||||||
Nishi-Nippon City Bank Ltd. (The) | 3,180,000 | 8,135,147 | ||||||
Resona Holdings Inc. | 7,950,000 | 38,001,834 | ||||||
Seven Bank Ltd. | 2,544,000 | 8,349,060 | ||||||
Shinsei Bank Ltd. | 6,360,000 | 12,575,447 | ||||||
Shizuoka Bank Ltd. (The) | 2,980,000 | 31,648,168 | ||||||
Sumitomo Mitsui Financial Group Inc. | 5,406,000 | 239,678,948 | ||||||
Sumitomo Mitsui Trust Holdings Inc. | 14,310,320 | 62,424,878 | ||||||
Suruga Bank Ltd. | 1,590,000 | 25,069,867 | ||||||
Yamaguchi Financial Group Inc. | 73,000 | 681,527 | ||||||
|
| |||||||
1,086,547,531 | ||||||||
BEVERAGES — 0.96% | ||||||||
Asahi Group Holdings Ltd. | 1,431,000 | 35,645,559 | ||||||
Coca-Cola West Co. Ltd. | 159,000 | 3,163,308 | ||||||
Kirin Holdings Co. Ltd. | 3,270,000 | 44,993,120 | ||||||
Suntory Beverage & Food Ltd.b | 477,000 | 17,088,672 | ||||||
|
| |||||||
100,890,659 | ||||||||
BUILDING MATERIALS — 1.39% |
| |||||||
Asahi Glass Co. Ltd. | 4,770,000 | 28,003,057 | ||||||
Daikin Industries Ltd. | 954,000 | 46,088,366 | ||||||
LIXIL Group Corp. | 1,113,000 | 22,562,880 | ||||||
Rinnai Corp. | 159,000 | 11,133,160 | ||||||
Taiheiyo Cement Corp. | 4,770,000 | 17,939,459 | ||||||
TOTO Ltd. | 1,590,000 | 19,754,472 | ||||||
|
| |||||||
145,481,394 |
SCHEDULEOF INVESTMENTS | 9 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN ETF
August 31, 2013
Security | Shares | Value | ||||||
CHEMICALS — 3.22% |
| |||||||
Air Water Inc. | 78,000 | $ | 1,050,176 | |||||
Asahi Kasei Corp. | 4,770,000 | 35,198,288 | ||||||
Daicel Corp. | 1,590,000 | 13,807,063 | ||||||
Hitachi Chemical Co. Ltd. | 477,000 | 7,895,307 | ||||||
JSR Corp. | 795,000 | 13,936,707 | ||||||
Kaneka Corp. | 1,590,000 | 10,209,448 | ||||||
Kansai Paint Co. Ltd. | 113,000 | 1,315,252 | ||||||
Kuraray Co. Ltd. | 1,431,000 | 15,912,154 | ||||||
Mitsubishi Chemical Holdings Corp. | 5,565,000 | 26,317,688 | ||||||
Mitsubishi Gas Chemical Co. Inc. | 1,590,000 | 12,850,940 | ||||||
Mitsui Chemicals Inc. | 3,180,000 | 8,491,668 | ||||||
Nitto Denko Corp. | 636,000 | 33,966,672 | ||||||
Shin-Etsu Chemical Co. Ltd. | 1,749,000 | 105,708,301 | ||||||
Showa Denko K.K. | 6,360,000 | 8,037,915 | ||||||
Sumitomo Chemical Co. Ltd. | 6,360,000 | 23,206,238 | ||||||
Taiyo Nippon Sanso Corp. | 1,590,000 | 10,452,530 | ||||||
Ube Industries Ltd. | 4,770,000 | 8,459,257 | ||||||
|
| |||||||
336,815,604 | ||||||||
COMMERCIAL SERVICES — 1.00% |
| |||||||
Benesse Holdings Inc. | 318,000 | 11,538,297 | ||||||
Dai Nippon Printing Co. Ltd. | 1,590,000 | 15,460,021 | ||||||
PARK24 Co. Ltd. | 477,000 | 8,284,238 | ||||||
Secom Co. Ltd. | 795,000 | 45,618,407 | ||||||
Toppan Printing Co. Ltd. | 3,180,000 | 23,433,114 | ||||||
|
| |||||||
104,334,077 | ||||||||
COMPUTERS — 0.76% |
| |||||||
Fujitsu Ltd. | 7,950,000 | 29,412,934 | ||||||
Itochu Techno-Solutions Corp. | 159,000 | 5,404,525 | ||||||
Nomura Research Institute Ltd. | 318,000 | 9,933,955 | ||||||
NTT Data Corp. | 4,770 | 17,112,980 | ||||||
TDK Corp. | 477,000 | 17,307,445 | ||||||
|
| |||||||
79,171,839 | ||||||||
COSMETICS & PERSONAL CARE — 1.10% |
| |||||||
Kao Corp. | 2,226,000 | 65,113,591 | ||||||
Shiseido Co. Ltd. | 1,590,000 | 25,280,538 | ||||||
Unicharm Corp. | 477,000 | 24,794,374 | ||||||
|
| |||||||
115,188,503 | ||||||||
DISTRIBUTION & WHOLESALE — 4.05% |
| |||||||
Hitachi High-Technologies Corp. | 318,000 | 6,436,814 | ||||||
ITOCHU Corp. | 6,360,000 | 72,211,588 | ||||||
Marubeni Corp. | 6,360,000 | 46,412,475 | ||||||
Mitsubishi Corp. | 5,883,000 | 110,446,782 |
Security | Shares | Value | ||||||
Mitsui & Co. Ltd. | 7,155,000 | $ | 99,833,818 | |||||
Sojitz Corp. | 5,406,000 | 9,697,355 | ||||||
Sumitomo Corp. | 4,770,000 | 60,576,059 | ||||||
Toyota Tsusho Corp. | 795,000 | 18,336,493 | ||||||
|
| |||||||
423,951,384 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 2.68% |
| |||||||
Acom Co. Ltd.b | 174,900 | 4,388,766 | ||||||
AEON Financial Service Co. Ltd.a | 318,070 | 8,555,131 | ||||||
Credit Saison Co. Ltd. | 636,000 | 14,649,748 | ||||||
Daiwa Securities Group Inc. | 6,360,000 | 51,598,227 | ||||||
Japan Exchange Group Inc. | 159,000 | 12,591,653 | ||||||
Mitsubishi UFJ Lease & Finance Co. Ltd. | 2,544,000 | 11,564,226 | ||||||
Nomura Holdings Inc. | 15,264,000 | 106,722,764 | ||||||
ORIX Corp. | 5,088,000 | 70,215,074 | ||||||
|
| |||||||
280,285,589 | ||||||||
ELECTRIC — 1.93% |
| |||||||
Chubu Electric Power Co. Inc. | 2,703,000 | 33,830,546 | ||||||
Chugoku Electric Power Co. Inc. (The) | 1,272,000 | 17,618,591 | ||||||
Electric Power Development Co. Ltd. | 477,000 | 14,730,775 | ||||||
Hokkaido Electric Power Co. Inc.b | 795,000 | 9,350,558 | ||||||
Hokuriku Electric Power Co. | 636,000 | 8,433,328 | ||||||
Kansai Electric Power Co. Inc. (The)b | 3,021,000 | 33,961,810 | ||||||
Kyushu Electric Power Co. Inc.b | 1,749,000 | 22,763,828 | ||||||
Shikoku Electric Power Co. Inc.b | 636,000 | 9,943,678 | ||||||
Tohoku Electric Power Co. Inc.b | 1,908,000 | 20,982,847 | ||||||
Tokyo Electric Power Co. Inc.a,b | 6,042,000 | 30,790,399 | ||||||
|
| |||||||
202,406,360 | ||||||||
ELECTRICAL COMPONENTS & EQUIPMENT — 1.84% |
| |||||||
Brother Industries Ltd. | 954,000 | 9,752,454 | ||||||
Casio Computer Co. Ltd. | 954,000 | 8,206,452 | ||||||
Furukawa Electric Co. Ltd. | 3,180,000 | 6,417,367 | ||||||
Hitachi Ltd. | 20,670,000 | 124,927,993 | ||||||
Mabuchi Motor Co. Ltd. | 159,000 | 7,892,065 | ||||||
Nidec Corp. | 477,000 | 35,733,068 | ||||||
|
| |||||||
192,929,399 | ||||||||
ELECTRONICS — 3.91% |
| |||||||
Advantest Corp. | 636,000 | 7,843,449 | ||||||
Hamamatsu Photonics K.K. | 318,000 | 10,306,681 | ||||||
Hirose Electric Co. Ltd. | 159,000 | 21,002,293 |
10 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN ETF
August 31, 2013
Security | Shares | Value | ||||||
Hoya Corp. | 1,749,000 | $ | 37,345,513 | |||||
IBIDEN Co. Ltd. | 477,000 | 6,893,808 | ||||||
Keyence Corp. | 168,426 | 55,790,093 | ||||||
Kyocera Corp. | 636,000 | 65,340,468 | ||||||
Murata Manufacturing Co. Ltd. | 795,000 | 54,693,472 | ||||||
NEC Corp. | 11,340,000 | 24,155,939 | ||||||
Nippon Electric Glass Co. Ltd. | 1,590,500 | 8,234,969 | ||||||
Omron Corp. | 795,000 | 24,956,429 | ||||||
Toshiba Corp. | 15,900,000 | 63,363,400 | ||||||
Yaskawa Electric Corp. | 1,590,000 | 18,927,993 | ||||||
Yokogawa Electric Corp. | 795,000 | 10,039,291 | ||||||
|
| |||||||
408,893,798 | ||||||||
ENGINEERING & CONSTRUCTION — 0.91% |
| |||||||
Chiyoda Corp. | 235,000 | 2,689,752 | ||||||
JGC Corp. | 860,000 | 29,494,980 | ||||||
Kajima Corp. | 3,180,000 | 11,376,242 | ||||||
Obayashi Corp. | 3,180,000 | 18,150,130 | ||||||
Shimizu Corp. | 3,180,000 | 14,001,529 | ||||||
Taisei Corp. | 4,770,000 | 19,592,417 | ||||||
|
| |||||||
95,305,050 | ||||||||
ENTERTAINMENT — 0.42% |
| |||||||
Oriental Land Co. Ltd. | 167,000 | 26,978,036 | ||||||
Sankyo Co. Ltd. | 159,000 | 7,414,004 | ||||||
Toho Co. Ltd. | 477,000 | 9,480,202 | ||||||
|
| |||||||
43,872,242 | ||||||||
ENVIRONMENTAL CONTROL — 0.09% |
| |||||||
Kurita Water Industries Ltd. | 477,000 | 9,626,051 | ||||||
|
| |||||||
9,626,051 | ||||||||
FOOD — 2.23% | ||||||||
Ajinomoto Co. Inc. | 3,180,000 | 40,870,203 | ||||||
Kikkoman Corp. | 1,590,000 | 27,176,579 | ||||||
Meiji Holdings Co. Ltd. | 318,028 | 16,498,624 | ||||||
Nippon Meat Packers Inc. | 94,000 | 1,323,080 | ||||||
Nisshin Seifun Group Inc. | 795,000 | 8,969,730 | ||||||
Nissin Foods Holdings Co. Ltd. | 318,000 | 12,575,447 | ||||||
Seven & I Holdings Co. Ltd. | 3,180,080 | 109,713,813 | ||||||
Toyo Suisan Kaisha Ltd. | 103,000 | 3,105,275 | ||||||
Yakult Honsha Co. Ltd. | 318,000 | 13,499,159 | ||||||
|
| |||||||
233,731,910 | ||||||||
FOREST PRODUCTS & PAPER — 0.12% |
| |||||||
Oji Holdings Corp. | 3,180,000 | 12,769,913 | ||||||
|
| |||||||
12,769,913 | ||||||||
GAS — 0.86% |
| |||||||
Osaka Gas Co. Ltd. | 7,950,000 | 32,167,864 |
Security | Shares | Value | ||||||
Toho Gas Co. Ltd. | 1,590,000 | $ | 7,940,682 | |||||
Tokyo Gas Co. Ltd. | 9,540,000 | 49,588,748 | ||||||
|
| |||||||
89,697,294 | ||||||||
HAND & MACHINE TOOLS — 0.75% |
| |||||||
Fuji Electric Co. Ltd. | 1,590,000 | 5,882,587 | ||||||
Makita Corp. | 477,000 | 25,329,154 | ||||||
SMC Corp. | 181,000 | 38,039,240 | ||||||
THK Co. Ltd. | 477,600 | 9,312,020 | ||||||
|
| |||||||
78,563,001 | ||||||||
HEALTH CARE — PRODUCTS — 0.75% |
| |||||||
Olympus Corp.b | 954,300 | 27,603,357 | ||||||
Shimadzu Corp. | 236,000 | 2,070,998 | ||||||
Sysmex Corp. | 318,000 | 18,506,651 | ||||||
Terumo Corp. | 636,000 | 30,595,933 | ||||||
|
| |||||||
78,776,939 | ||||||||
HEALTH CARE — SERVICES — 0.14% |
| |||||||
Miraca Holdings Inc. | 318,000 | 14,228,405 | ||||||
|
| |||||||
14,228,405 | ||||||||
HOME BUILDERS — 0.76% |
| |||||||
Daiwa House Industry Co. Ltd. | 2,440,000 | 44,017,734 | ||||||
Sekisui Chemical Co. Ltd. | 1,597,000 | 14,714,244 | ||||||
Sekisui House Ltd. | 1,690,000 | 20,514,600 | ||||||
|
| |||||||
79,246,578 | ||||||||
HOME FURNISHINGS — 1.81% |
| |||||||
Panasonic Corp.b | 9,222,015 | 84,028,756 | ||||||
Sharp Corp.b | 4,770,000 | 18,668,705 | ||||||
Sony Corp. | 4,293,000 | 86,284,422 | ||||||
|
| |||||||
188,981,883 | ||||||||
INSURANCE — 2.53% | ||||||||
Dai-ichi Life Insurance Co. Ltd. (The) | 34,980 | 46,989,390 | ||||||
MS&AD Insurance Group Holdings Inc. | 2,067,040 | 52,352,794 | ||||||
NKSJ Holdings Inc. | 1,431,050 | 35,092,557 | ||||||
Sony Financial Holdings Inc. | 795,000 | 12,988,687 | ||||||
T&D Holdings Inc. | 2,385,000 | 29,072,619 | ||||||
Tokio Marine Holdings Inc. | 2,862,000 | 88,530,500 | ||||||
|
| |||||||
265,026,547 | ||||||||
INTERNET — 1.14% | ||||||||
Dena Co. Ltd.a | 410,200 | 8,064,779 | ||||||
Gree Inc.a | 410,200 | 3,256,850 | ||||||
M3 Inc. | 3,180 | 8,332,854 | ||||||
Nexon Co. Ltd. | 477,000 | 5,221,404 | ||||||
Rakuten Inc. | 3,021,000 | 37,287,173 |
SCHEDULEOF INVESTMENTS | 11 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN ETF
August 31, 2013
Security | Shares | Value | ||||||
SBI Holdings Inc. | 954,010 | $ | 9,995,641 | |||||
Trend Micro Inc. | 477,000 | 16,724,048 | ||||||
Yahoo! Japan Corp. | 62,010 | 30,779,055 | ||||||
|
| |||||||
119,661,804 | ||||||||
IRON & STEEL — 1.71% | ||||||||
Daido Steel Co. Ltd. | 1,590,000 | 8,507,873 | ||||||
Hitachi Metals Ltd. | 242,000 | 2,912,929 | ||||||
Japan Steel Works Ltd. (The) | 1,590,000 | 8,167,558 | ||||||
JFE Holdings Inc. | 2,067,050 | 45,885,287 | ||||||
Kobe Steel Ltd.b | 11,130,000 | 17,809,815 | ||||||
Nippon Steel & Sumitomo Metal Corp. | 31,800,705 | 90,752,662 | ||||||
Yamato Kogyo Co. Ltd. | 159,000 | 5,210,060 | ||||||
|
| |||||||
179,246,184 | ||||||||
LEISURE TIME — 0.65% | ||||||||
Sega Sammy Holdings Inc. | 795,000 | 19,009,020 | ||||||
Shimano Inc. | 318,000 | 26,414,921 | ||||||
Yamaha Corp. | 636,000 | 8,050,879 | ||||||
Yamaha Motor Co. Ltd. | 1,113,000 | 14,486,073 | ||||||
|
| |||||||
67,960,893 | ||||||||
MACHINERY — 4.60% | ||||||||
Amada Co. Ltd. | 1,590,000 | 11,797,584 | ||||||
FANUC Corp. | 795,000 | 121,622,076 | ||||||
Hitachi Construction Machinery Co. Ltd. | 477,000 | 9,397,554 | ||||||
Kawasaki Heavy Industries Ltd. | 6,360,000 | 22,298,731 | ||||||
Komatsu Ltd. | 3,975,000 | 87,306,987 | ||||||
Kubota Corp. | 4,770,000 | 64,951,536 | ||||||
Mitsubishi Electric Corp. | 7,950,000 | 79,487,846 | ||||||
Mitsubishi Heavy Industries Ltd. | 12,720,000 | 69,878,000 | ||||||
Nabtesco Corp. | 318,000 | 6,838,710 | ||||||
Sumitomo Heavy Industries Ltd. | 1,590,000 | 7,211,436 | ||||||
|
| |||||||
480,790,460 | ||||||||
MANUFACTURING — 0.82% |
| |||||||
FUJIFILM Holdings Corp. | 1,908,000 | 41,810,121 | ||||||
Konica Minolta Holdings Inc. | 2,385,000 | 19,665,341 | ||||||
Nikon Corp. | 1,431,000 | 24,210,977 | ||||||
|
| |||||||
85,686,439 | ||||||||
METAL FABRICATE & HARDWARE — 0.18% |
| |||||||
Maruichi Steel Tube Ltd. | 159,000 | 3,685,124 | ||||||
NSK Ltd. | 1,590,000 | 14,925,241 | ||||||
|
| |||||||
18,610,365 | ||||||||
MINING — 0.42% | ||||||||
Mitsubishi Materials Corp. | 4,770,000 | 18,717,322 |
Security | Shares | Value | ||||||
Sumitomo Metal Mining Co. Ltd. | 1,878,000 | $ | 25,380,706 | |||||
|
| |||||||
44,098,028 | ||||||||
OFFICE & BUSINESS EQUIPMENT — 1.70% |
| |||||||
Canon Inc. | 4,770,050 | 143,322,707 | ||||||
Ricoh Co. Ltd. | 3,180,000 | 34,582,480 | ||||||
|
| |||||||
177,905,187 | ||||||||
OIL & GAS —1.33% | ||||||||
Cosmo Oil Co. Ltd.b | 1,590,000 | 3,289,711 | ||||||
Idemitsu Kosan Co. Ltd. | 159,000 | 13,272,282 | ||||||
INPEX Corp. | 9,540 | 43,317,230 | ||||||
Japan Petroleum Exploration Co. Ltd. | 159,000 | 7,114,203 | ||||||
JX Holdings Inc. | 9,381,095 | 49,718,895 | ||||||
Showa Shell Sekiyu K.K. | 795,000 | 7,916,374 | ||||||
TonenGeneral Sekiyu K.K. | 1,590,000 | 14,471,487 | ||||||
|
| |||||||
139,100,182 | ||||||||
PACKAGING & CONTAINERS — 0.08% |
| |||||||
Toyo Seikan Group Holdings Ltd. | 477,000 | 8,094,634 | ||||||
|
| |||||||
8,094,634 | ||||||||
PHARMACEUTICALS — 5.31% |
| |||||||
Alfresa Holdings Corp. | 159,000 | 7,551,750 | ||||||
Astellas Pharma Inc. | 1,908,030 | 97,817,774 | ||||||
Chugai Pharmaceutical Co. Ltd. | 954,000 | 19,621,587 | ||||||
Daiichi Sankyo Co. Ltd. | 2,862,069 | 49,327,408 | ||||||
Dainippon Sumitomo Pharma Co. Ltd. | 636,000 | 8,174,041 | ||||||
Eisai Co. Ltd. | 1,113,000 | 45,432,044 | ||||||
Hisamitsu Pharmaceutical Co. Inc. | 159,000 | 8,556,490 | ||||||
Kyowa Hakko Kirin Co. Ltd. | 1,590,000 | 16,092,035 | ||||||
Medipal Holdings Corp. | 636,000 | 7,110,962 | ||||||
Mitsubishi Tanabe Pharma Corp. | 795,000 | 10,849,564 | ||||||
Ono Pharmaceutical Co. Ltd. | 318,000 | 19,219,691 | ||||||
Otsuka Holdings Co. Ltd. | 1,590,000 | 49,345,666 | ||||||
Santen Pharmaceutical Co. Ltd. | 318,000 | 14,779,391 | ||||||
Shionogi & Co. Ltd. | 1,272,000 | 24,891,607 | ||||||
Suzuken Co. Ltd. | 318,000 | 9,820,517 | ||||||
Taisho Pharmaceutical Holdings Co. Ltd. | 159,000 | 10,630,790 | ||||||
Takeda Pharmaceutical Co. Ltd. | 3,339,000 | 152,120,777 | ||||||
Tsumura & Co. | 159,000 | 4,275,004 | ||||||
|
| |||||||
555,617,098 | ||||||||
REAL ESTATE — 3.89% | ||||||||
AEON Mall Co. Ltd. | 477,000 | 12,479,835 |
12 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN ETF
August 31, 2013
Security | Shares | Value | ||||||
Daito Trust Construction Co. Ltd. | 318,000 | $ | 29,169,852 | |||||
Hulic Co. Ltd. | 1,113,000 | 13,760,067 | ||||||
Mitsubishi Estate Co. Ltd. | 5,076,000 | 132,442,134 | ||||||
Mitsui Fudosan Co. Ltd. | 3,286,000 | 103,990,521 | ||||||
Nomura Real Estate Holdings Inc. | 477,000 | 10,938,694 | ||||||
NTT Urban Development Corp. | 4,770 | 5,658,951 | ||||||
Sumitomo Realty & Development Co. Ltd. | 1,590,000 | 70,169,699 | ||||||
Tokyo Tatemono Co. Ltd. | 1,590,000 | 13,596,392 | ||||||
Tokyu Land Corp. | 1,590,000 | 14,811,803 | ||||||
|
| |||||||
407,017,948 | ||||||||
REAL ESTATE INVESTMENT TRUSTS — 1.01% |
| |||||||
Japan Prime Realty Investment Corp. | 3,180 | 9,143,128 | ||||||
Japan Real Estate Investment Corp. | 1,680 | 17,910,411 | ||||||
Japan Retail Fund Investment Corp. | 7,950 | 14,633,542 | ||||||
Nippon Building Fund Inc. | 3,180 | 34,679,713 | ||||||
Nippon Prologis REIT Inc. | 1,100 | 9,686,592 | ||||||
Nomura Real Estate Office Fund Inc. | 1,591 | 6,826,795 | ||||||
United Urban Investment Corp. | 9,540 | 12,329,124 | ||||||
|
| |||||||
105,209,305 | ||||||||
RETAIL — 2.69% | ||||||||
ABC-MART Inc. | 159,000 | 6,668,552 | ||||||
AEON Co. Ltd. | 2,544,000 | 34,848,250 | ||||||
Citizen Holdings Co. Ltd. | 1,113,000 | 7,214,677 | ||||||
Don Quijote Co. Ltd. | 159,000 | 8,280,997 | ||||||
FamilyMart Co. Ltd. | 318,000 | 13,401,926 | ||||||
Fast Retailing Co. Ltd. | 208,700 | 67,854,355 | ||||||
Isetan Mitsukoshi Holdings Ltd. | 1,590,060 | 20,711,376 | ||||||
J. Front Retailing Co. Ltd. | 1,590,000 | 12,737,502 | ||||||
Lawson Inc. | 318,000 | 23,984,100 | ||||||
Marui Group Co. Ltd. | 954,000 | 8,945,421 | ||||||
McDonald’s Holdings Co. (Japan) Ltd. | 318,000 | 8,352,301 | ||||||
Nitori Holdings Co. Ltd. | 159,000 | 14,244,611 | ||||||
Shimamura Co. Ltd. | 159,000 | 16,270,295 | ||||||
Takashimaya Co. Ltd. | 1,590,000 | 14,017,734 | ||||||
USS Co. Ltd. | 95,400 | 11,949,916 | ||||||
Yamada Denki Co. Ltd. | 365,700 | 11,591,775 | ||||||
|
| |||||||
281,073,788 | ||||||||
SEMICONDUCTORS — 0.45% | ||||||||
Rohm Co. Ltd. | 477,000 | 16,869,898 |
Security | Shares | Value | ||||||
Sumco Corp. | 477,000 | $ | 3,986,546 | |||||
Tokyo Electron Ltd. | 636,052 | 26,546,735 | ||||||
|
| |||||||
47,403,179 | ||||||||
SOFTWARE — 0.27% | ||||||||
GungHo Online Entertainment Inc.a,b | 15,900 | 10,841,462 | ||||||
Konami Corp. | 477,000 | 10,559,486 | ||||||
Oracle Corp. Japan | 159,000 | 6,506,497 | ||||||
|
| |||||||
27,907,445 | ||||||||
STORAGE & WAREHOUSING — 0.03% |
| |||||||
Mitsubishi Logistics Corp. | 242,000 | 3,122,581 | ||||||
|
| |||||||
3,122,581 | ||||||||
TELECOMMUNICATIONS — 5.30% |
| |||||||
KDDI Corp. | 2,226,000 | 106,518,575 | ||||||
Nippon Telegraph and Telephone Corp. | 1,908,000 | 97,135,606 | ||||||
NTT DOCOMO Inc. | 63,600 | 102,094,481 | ||||||
SoftBank Corp. | 3,949,100 | 249,145,686 | ||||||
|
| |||||||
554,894,348 | ||||||||
TEXTILES — 0.44% | ||||||||
Teijin Ltd. | 3,180,000 | 7,000,765 | ||||||
Toray Industries Inc. | 6,360,000 | 39,152,423 | ||||||
|
| |||||||
46,153,188 | ||||||||
TOYS, GAMES & HOBBIES — 0.72% |
| |||||||
Namco Bandai Holdings Inc. | 795,098 | 12,706,657 | ||||||
Nintendo Co. Ltd. | 477,000 | 54,061,459 | ||||||
Sanrio Co. Ltd. | 159,000 | 8,216,175 | ||||||
|
| |||||||
74,984,291 | ||||||||
TRANSPORTATION — 4.46% | ||||||||
Central Japan Railway Co. | 636,000 | 72,989,451 | ||||||
East Japan Railway Co. | 1,431,000 | 109,970,341 | ||||||
Hankyu Hanshin Holdings Inc. | 4,770,000 | 25,815,319 | ||||||
Kamigumi Co. Ltd. | 1,590,000 | 12,737,502 | ||||||
Keikyu Corp. | 1,594,000 | 13,663,089 | ||||||
Keio Corp. | 3,180,000 | 21,553,279 | ||||||
Keisei Electric Railway Co. Ltd. | 160,000 | 1,523,111 | ||||||
Kintetsu Corp.a | 6,627,000 | 24,653,264 | ||||||
Mitsui O.S.K. Lines Ltd.b | 4,770,000 | 18,911,787 | ||||||
Nippon Express Co. Ltd. | 3,180,000 | 14,909,035 | ||||||
Nippon Yusen K.K. | 6,360,000 | 18,150,130 | ||||||
Odakyu Electric Railway Co. Ltd. | 1,755,000 | 16,044,794 | ||||||
Tobu Railway Co. Ltd. | 4,770,000 | 24,065,128 | ||||||
Tokyu Corp. | 4,770,000 | 30,676,961 | ||||||
West Japan Railway Co. | 636,000 | 26,317,689 |
SCHEDULEOF INVESTMENTS | 13 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN ETF
August 31, 2013
Security | Shares | Value | ||||||
Yamato Holdings Co. Ltd. | 1,590,000 | $ | 34,258,370 | |||||
|
| |||||||
466,239,250 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $11,703,599,925) | 10,437,380,221 | |||||||
SHORT-TERM INVESTMENTS — 0.60% |
| |||||||
MONEY MARKET FUNDS — 0.60% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.15%c,d,e | 57,410,881 | 57,410,881 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.13%c,d,e | 3,645,549 | 3,645,549 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.00%c,d | 1,938,075 | 1,938,075 | ||||||
|
| |||||||
62,994,505 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $62,994,505) |
| 62,994,505 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $11,766,594,430) |
| 10,500,374,726 | ||||||
Other Assets, Less Liabilities — (0.37)% |
| (38,432,733 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 10,461,941,993 | |||||
|
|
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, 2013 were as follows:
Number of Contracts | Issue (Expiration) | Exchange | Notional Value | Net Unrealized Appreciation (Depreciation) | ||||||||||
182 | TOPIX Index (Sept. 2013) | Tokyo Stock | $ | 20,451,001 | $ | (101,096) | ||||||||
See notes to financial statements.
14 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statement of Assets and Liabilities
iSHARES® MSCI JAPAN ETF
August 31, 2013
ASSETS | ||||
Investments, at cost: | ||||
Unaffiliated | $ | 11,703,599,925 | ||
Affiliated (Note 2) | 62,994,505 | |||
|
| |||
Total cost of investments | $ | 11,766,594,430 | ||
|
| |||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||
Unaffiliated | $ | 10,437,380,221 | ||
Affiliated (Note 2) | 62,994,505 | |||
|
| |||
Total fair value of investments | 10,500,374,726 | |||
Foreign currency, at valueb | 17,642,074 | |||
Foreign currency pledged to broker, at valueb | 7,295,126 | |||
Receivables: | ||||
Investment securities sold | 1,004,010 | |||
Dividends and interest | 8,102,879 | |||
|
| |||
Total Assets | 10,534,418,815 | |||
|
| |||
LIABILITIES | ||||
Payables: | ||||
Investment securities purchased | 6,579,240 | |||
Collateral for securities on loan (Note 5) | 61,056,430 | |||
Futures variation margin | 101,096 | |||
Investment advisory fees (Note 2) | 4,740,056 | |||
|
| |||
Total Liabilities | 72,476,822 | |||
|
| |||
NET ASSETS | $ | 10,461,941,993 | ||
|
| |||
Net assets consist of: | ||||
Paid-in capital | $ | 12,706,801,714 | ||
Distributions in excess of net investment income | (6,610,516 | ) | ||
Accumulated net realized loss | (971,663,686 | ) | ||
Net unrealized depreciation | (1,266,585,519 | ) | ||
|
| |||
NET ASSETS | $ | 10,461,941,993 | ||
|
| |||
Shares outstandingc | 954,000,000 | |||
|
| |||
Net asset value per share | $ | 10.97 | ||
|
|
a | Securities on loan with a value of $57,894,211. See Note 5. |
b | Cost of foreign currency including currency pledged to broker: $25,148,599. |
c | $0.001 par value, number of shares authorized: 2,124,600,000. |
See notes to financial statements.
FINANCIAL STATEMENTS | 15 |
Table of Contents
Statement of Operations
iSHARES® MSCI JAPAN ETF
Year ended August 31, 2013
NET INVESTMENT INCOME | ||||
Dividends — unaffiliateda | $ | 123,896,614 | ||
Interest — affiliated (Note 2) | 2,425 | |||
Securities lending income — affiliated (Note 2) | 2,050,844 | |||
|
| |||
Total investment income | 125,949,883 | |||
|
| |||
EXPENSES | ||||
Investment advisory fees (Note 2) | 37,718,795 | |||
|
| |||
Total expenses | 37,718,795 | |||
|
| |||
Net investment income | 88,231,088 | |||
|
| |||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||
Net realized gain (loss) from: | ||||
Investments — unaffiliated | (159,250,447 | ) | ||
In-kind redemptions — unaffiliated | 481,362,436 | |||
Futures contracts | 12,343,147 | |||
Foreign currency transactions | (7,887,289 | ) | ||
|
| |||
Net realized gain | 326,567,847 | |||
|
| |||
Net change in unrealized appreciation/depreciation on: | ||||
Investments | 632,917,048 | |||
Futures contracts | 66,976 | |||
Translation of assets and liabilities in foreign currencies | (402,072 | ) | ||
|
| |||
Net change in unrealized appreciation/depreciation | 632,581,952 | |||
|
| |||
Net realized and unrealized gain | 959,149,799 | |||
|
| |||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 1,047,380,887 | ||
|
|
a | Net of foreign withholding tax of $9,407,897. |
See notes to financial statements.
16 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets
iSHARES® MSCI JAPAN ETF
Year ended August 31, 2013 | Year ended August 31, 2012 | |||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||
OPERATIONS: | ||||||||
Net investment income | $ | 88,231,088 | $ | 106,977,074 | ||||
Net realized gain (loss) | 326,567,847 | (263,209,688 | ) | |||||
Net change in unrealized appreciation/depreciation | 632,581,952 | (266,966,709 | ) | |||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | 1,047,380,887 | (423,199,323 | ) | |||||
|
|
|
| |||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||
From net investment income | (94,344,922 | ) | (109,422,889 | ) | ||||
|
|
|
| |||||
Total distributions to shareholders | (94,344,922 | ) | (109,422,889 | ) | ||||
|
|
|
| |||||
CAPITAL SHARE TRANSACTIONS: | ||||||||
Proceeds from shares sold | 9,039,143,715 | 758,956,904 | ||||||
Cost of shares redeemed | (4,159,272,055 | ) | (2,791,809,212 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in net assets from capital share transactions | 4,879,871,660 | (2,032,852,308 | ) | |||||
|
|
|
| |||||
INCREASE (DECREASE) IN NET ASSETS | 5,832,907,625 | (2,565,474,520 | ) | |||||
NET ASSETS | ||||||||
Beginning of year | 4,629,034,368 | 7,194,508,888 | ||||||
|
|
|
| |||||
End of year | $ | 10,461,941,993 | $ | 4,629,034,368 | ||||
|
|
|
| |||||
Undistributed (distributions in excess of) net investment income included in net assets at end of year | $ | (6,610,516 | ) | $ | 3,443,177 | |||
|
|
|
| |||||
SHARES ISSUED AND REDEEMED | ||||||||
Shares sold | 831,000,000 | 76,800,000 | ||||||
Shares redeemed | (390,000,000 | ) | (298,200,000 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 441,000,000 | (221,400,000 | ) | |||||
|
|
|
|
See notes to financial statements.
FINANCIAL STATEMENTS | 17 |
Table of Contents
iSHARES® MSCI JAPAN ETF
(For a share outstanding throughout each period)
Year ended Aug. 31, 2013 | Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | ||||||||||||||||
Net asset value, beginning of year | $ | 9.02 | $ | 9.80 | $ | 9.43 | $ | 10.24 | $ | 11.62 | ||||||||||
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Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.13 | 0.18 | 0.16 | 0.12 | 0.13 | |||||||||||||||
Net realized and unrealized gain (loss)b | 1.97 | (0.77 | ) | 0.37 | (0.77 | ) | (1.39 | ) | ||||||||||||
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Total from investment operations | 2.10 | (0.59 | ) | 0.53 | (0.65 | ) | (1.26 | ) | ||||||||||||
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Less distributions from: | ||||||||||||||||||||
Net investment income | (0.15 | ) | (0.19 | ) | (0.16 | ) | (0.16 | ) | (0.12 | ) | ||||||||||
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Total distributions | (0.15 | ) | (0.19 | ) | (0.16 | ) | (0.16 | ) | (0.12 | ) | ||||||||||
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Net asset value, end of year | $ | 10.97 | $ | 9.02 | $ | 9.80 | $ | 9.43 | $ | 10.24 | ||||||||||
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Total return | 23.46 | % | (5.96 | )% | 5.54 | % | (6.41 | )% | (10.68 | )% | ||||||||||
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Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 10,461,942 | $ | 4,629,034 | $ | 7,194,509 | $ | 3,942,769 | $ | 6,164,170 | ||||||||||
Ratio of expenses to average net assets | 0.50 | % | 0.53 | % | 0.51 | % | 0.54 | % | 0.56 | % | ||||||||||
Ratio of net investment income to average net assets | 1.18 | % | 1.95 | % | 1.53 | % | 1.20 | % | 1.46 | % | ||||||||||
Portfolio turnover ratec | 4 | % | 3 | % | 4 | % | 5 | % | 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.
18 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI JAPAN ETF
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 ETF | Diversification Classification | |
MSCI Japana | Diversified |
a | Formerly the iShares MSCI Japan Index Fund. The Fund changed its name effective July 1, 2013. |
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.
Non-diversified funds generally hold securities of fewer issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers.
The Fund invests in securities of non-U.S. issuers that trade in non-U.S. markets. This involves 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. These risks are heightened for investments in emerging market and frontier market countries.
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 and, for financial reporting purposes, as of the report date should the reporting period end on a day that the Fund’s listing exchange is not 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
NOTESTO FINANCIAL STATEMENTS | 19 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES® MSCI JAPAN ETF
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. |
• | 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 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, reviews of 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 is not necessarily an indication of the risk associated with investing in the 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 |
20 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES® MSCI JAPAN ETF
• | Level 3 — Unobservable inputs for the asset or liability, including the Global Valuation Committee’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.
As of August 31, 2013, 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, 2013 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, stock dividends, capital gains on investments, or certain foreign currency transactions. 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 stock dividends are presented as “other foreign taxes,” and foreign taxes on capital gains from sales of investments and foreign taxes on foreign currency transactions are included in their respective net realized gain (loss) categories. Foreign taxes payable as of August 31, 2013, 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.
NOTESTO FINANCIAL STATEMENTS | 21 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES® MSCI JAPAN ETF
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.
RECENT ACCOUNTING STANDARD
In December 2011, the Financial Accounting Standards Board issued guidance to enhance current disclosure requirements on offsetting of certain assets and liabilities and enable financial statement users to compare financial statements prepared under U.S. GAAP and International Financial Reporting Standards (IFRS). The new disclosures are required for investments and derivative financial instruments subject to master netting agreements or similar agreements and require an entity to disclose both gross and net information about such investments and transactions eligible for offset in the statement of assets and liabilities. The scope of the disclosure requirements for offsetting will be limited to certain derivative instruments and securities lending transactions. In addition, the standard requires disclosure of collateral received and posted in connection with master netting agreements or similar agreements. The guidance is effective for financial statements for fiscal years beginning after January 1, 2013, and interim periods within those fiscal years. Management is evaluating the impact of this guidance on the Fund’s financial statements and disclosures.
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”), an affiliate of BFA, to serve as securities lending agent for the Fund, subject to applicable conditions. 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 a portion of securities lending income and remits a remaining portion to BTC as compensation for its services as securities lending agent. The Fund benefits from a borrower default indemnity provided by BlackRock. As securities lending agent, BTC bears all operational costs directly related to securities lending as well
22 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Notes to Financial Statements (Continued)
iSHARES® MSCI JAPAN ETF
as the cost of borrower default indemnification. 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, 2013, the Fund retained 65% of securities lending income and paid a fee to BTC equal to 35% of such income in the amount of $1,104,300.
BlackRock Investments, LLC, an affiliate of BFA, is the distributor for the Fund. Pursuant to the 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.
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, 2013, were $357,618,410 and $267,693,298, respectively.
In-kind purchases and sales (see Note 4) for the year ended August 31, 2013, were $8,850,285,182 and $4,077,633,209, 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 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 may also 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 market value of the loaned securities is determined at the close of each business day of the Fund and any
NOTESTO FINANCIAL STATEMENTS | 23 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES® MSCI JAPAN ETF
additional required collateral is delivered to the Fund on the next business day. 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.
As of August 31, 2013, any securities on loan were collateralized by cash. The cash collateral received was invested in money market funds managed by BFA. The value of any securities on loan as of August 31, 2013 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.
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. To mitigate these risks, the Fund benefits from a borrower default indemnity provided by BlackRock. BlackRock’s indemnity allows for full replacement of securities lent. The Fund could suffer a loss if the value of the investments purchased with cash collateral falls below the value of the cash collateral received.
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, 2013, 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 | ||||||
$428,429,221 | $ | (3,939,859 | ) | $ | (424,489,362 | ) |
The tax character of distributions paid during the years ended August 31, 2013 and August 31, 2012 was as follows:
2013 | 2012 | |||||||
Ordinary income | $ | 94,344,922 | $ | 109,422,889 | ||||
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As of August 31, 2013, 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 | ||||||||||||
$165,045 | $ | (813,462,861 | ) | $ | (1,384,595,931 | ) | $ | (46,965,974 | ) | $ | (2,244,859,721 | ) |
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, 2014. |
24 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES® MSCI JAPAN ETF
As of August 31, 2013, the Fund had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:
Non- Expiring a | Expiring 2014 | Expiring 2015 | Expiring 2016 | Expiring 2017 | Expiring 2018 | Expiring 2019 | Total | |||||||||||||||||||||||
$243,977,849 | $ | 68,122,871 | $ | 27,817,841 | $ | 44,443,527 | $ | 116,295,478 | $ | 173,577,101 | $ | 139,228,194 | $ | 813,462,861 |
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, 2013, the cost of investments for federal income tax purposes was $11,884,339,651. Net unrealized depreciation was $1,383,964,925, of which $339,017,810 represented gross unrealized appreciation on securities and $1,722,982,735 represented gross unrealized depreciation on securities.
Management has reviewed the tax positions as of August 31, 2013, 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 by the Fund as of August 31, 2013 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 | $ | (101,096 | ) | |
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a | Represents cumulative depreciation of futures contracts as reported in the schedule of investments. |
NOTESTO FINANCIAL STATEMENTS | 25 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES® MSCI JAPAN ETF
The following table shows the realized and unrealized gains (losses) on futures contracts held by the Fund during the year ended August 31, 2013 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 | $ | 12,343,147 | $ | 66,976 | ||||
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For the year ended August 31, 2013, the average quarter-end number of contracts and notional value of open futures contracts for the Fund were 303 and $31,890,738, 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.
26 | 2013 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 ETF (the “Fund”) at August 31, 2013, the results of its operations, the changes in its net assets and its financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2013 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
October 23, 2013
REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTINGFIRM | 27 |
Table of Contents
iSHARES® MSCI JAPAN ETF
For the fiscal year ended August 31, 2013, the Fund earned foreign source income of $133,304,511 and paid foreign taxes of $9,407,562 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 $103,752,484 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, 2013.
In February 2014, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2013. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.
28 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Board Review and Approval of Investment Advisory
Contract
iSHARES® MSCI JAPAN ETF
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 and approve 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 March 7, 2013, April 23, 2013, and May 3, 2013, 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 16, 2013, management presented preliminary 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 5, 2013, to discuss the additional requests. At a meeting held on June 10-11, 2013, the Board, including the Independent Directors, reviewed the 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 the supplemental information management provided at the request of the Independent Directors. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information 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 reached 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 (the “Lipper Group”). Because there are few, if any, exchange traded funds or index funds that track an index similar to that tracked by the Fund, the Lipper Group included in part mutual funds, closed-end funds, exchange traded funds, and/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 further noted that due to the limitations in providing comparable funds in the various Lipper Groups, the statistical information provided in the Lipper Report may or may not provide meaningful direct comparisons to the Fund.
The Board also noted that the investment advisory fee rate and overall expenses for the Fund compared favorably to the investment advisory fee rates and overall expenses of the funds in its respective 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, 2012, 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 may include funds that are not exchange traded funds or index funds, and that may have different investment objectives and/or benchmarks from the Fund. In addition, the Board noted that the Fund seeks to track its own benchmark index and that, during the prior year, the Board received periodic reports on the Fund’s performance in
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 29 |
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Board Review and Approval of Investment Advisory
Contract (Continued)
iSHARES® MSCI JAPAN ETF
comparison with its relevant benchmark index. Such periodic comparative performance information, including detailed information on certain specific iShares funds requested by the Board, was also considered.
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 fee rate and expense level 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, including information about recent and proposed enhancements to the iShares business, including with respect to shareholder servicing and support, 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 during 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 acknowledged that resources to support the iShares funds and their shareholders have been added or enhanced since BlackRock’s acquisition of BFA in December 2009, 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 detailed presentations regarding BFA’s investment and risk management processes and strategies provided at the June 10-11, 2013 meeting and throughout the previous year, 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 the Fund and Profits Realized by BFA and its Affiliates — The Board reviewed information about the profitability to BlackRock 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 relatively low fee rates established at inception, 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
30 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Board Review and Approval of Investment Advisory
Contract (Continued)
iSHARES® MSCI JAPAN ETF
15(c) Committee received information regarding BlackRock’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 rate 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 fee rate 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 to the Fund, as well as other significant differences in the approach of BFA and its affiliates to the Fund, on one hand, and to the 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 and challenges 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 rate under the Advisory Contract for the Fund was 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 the “fallout” benefits or 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 rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that 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 | 31 |
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Supplemental Information (Unaudited)
iSHARES® MSCI JAPAN ETF
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 | |||||||||||||||||||||||
$ | 0.147878 | $ | — | $ | 0.000372 | $ | 0.148250 | 100 | % | — | % | 0 | %a | 100 | % |
a | Rounds to less than 1%. |
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 each full calendar quarter completed after the inception date of the Fund through the date of the most recent calendar quarter-end.
32 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Supplemental Information (Unaudited) (Continued)
iSHARES® MSCI JAPAN ETF
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, 2008 through June 30, 2013
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% | 5 | 0.36 | ||||||
Greater than 3.5% and Less than 4.0% | 10 | 0.72 | ||||||
Greater than 3.0% and Less than 3.5% | 5 | 0.36 | ||||||
Greater than 2.5% and Less than 3.0% | 17 | 1.23 | ||||||
Greater than 2.0% and Less than 2.5% | 19 | 1.37 | ||||||
Greater than 1.5% and Less than 2.0% | 61 | 4.41 | ||||||
Greater than 1.0% and Less than 1.5% | 110 | 7.96 | ||||||
Greater than 0.5% and Less than 1.0% | 229 | 16.57 | ||||||
Between 0.5% and –0.5% | 535 | 38.72 | ||||||
Less than –0.5% and Greater than –1.0% | 146 | 10.56 | ||||||
Less than –1.0% and Greater than –1.5% | 89 | 6.44 | ||||||
Less than –1.5% and Greater than –2.0% | 59 | 4.27 | ||||||
Less than –2.0% and Greater than –2.5% | 32 | 2.32 | ||||||
Less than –2.5% and Greater than –3.0% | 19 | 1.37 | ||||||
Less than –3.0% and Greater than –3.5% | 11 | 0.80 | ||||||
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 | ||||||
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1,382 | 100.00 | % | ||||||
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SUPPLEMENTAL INFORMATION | 33 |
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Director and Officer Information
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 of the Company (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 ETF, Inc. and a Trustee of iShares U.S. ETF Trust and, as a result, oversees a total of 298 funds (as of August 31, 2013) 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 (56) | Director (since 2009). | President and Director, BlackRock, Inc. (since 2006); 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 2006); Trustee of iShares Trust (since 2009); Director of iShares MSCI Russia Capped ETF, 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 ETF, 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 Company due to his affiliations with BlackRock, Inc. |
b | Michael Latham is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BlackRock, Inc. and its affiliates. |
34 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Director and Officer Information (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 (58) | 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 Paine Webber Inc.) (2003-2005) 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Independent Chairman of iShares, Trust, iShares MSCI Russia Capped ETF, Inc. and iShares U.S. ETF Trust (since 2012). | |||
Cecilia H. Herbert (64) | Director (since 2005); Nominating and Governance Committee Chair and Equity Plus Committee Chair (since 2012). | Trustee and Member (since 2011) of the Investment Committee, WNET, the New York public broadcasting company; Director (since 1998) and President (2007-2011) of the Board of Directors, Catholic Charities CYO; Trustee (2002-2011) and Chair of the Finance and Investment Committee (2006-2010), the Thacher School; 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of Forward Funds (34 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 ETF, 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 (2 portfolios) (since 2002). | |||
John E. Kerrigan (58) | 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). |
DIRECTORAND OFFICER INFORMATION | 35 |
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Director and Officer Information (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 (52) | 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). | |||
George G.C. Parker (74) | 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 2000); Director of iShares MSCI Russia Capped ETF, 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 (49) | 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 (2007-2008). | Trustee of iShares Trust (since 2011); Director of iShares MSCI Russia Capped ETF, Inc. (since 2011); Trustee of iShares U.S. ETF Trust (since 2011). |
36 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Director and Officer Information (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 of Legal & Compliance, BlackRock (since 2006); Director of Legal & Compliance, BlackRock (2004-2006). | ||
Eilleen M. Clavere (61) | Secretary (since 2007). | Director of Global Fund Administration, BlackRock (since 2009); Director of Legal Administration of Intermediary Investor Business, BGI (2006-2009); Legal Counsel and Vice President of Atlas Funds, Atlas Advisers, Inc. and Atlas Securities, Inc. (2005-2006); Counsel of Kirkpatrick & Lockhart LLP (2001-2005). | ||
Jack Gee (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). | ||
Scott Radell (44) | Executive Vice President (since 2012). | Managing Director, BlackRock (since 2009); Head of Portfolio Solutions, BlackRock (since 2009); Head of Portfolio Solutions, BGI (2007-2009); Credit Portfolio Manager, BGI (2005-2007); Credit Research Analyst, BGI (2003-2005). | ||
Amy Schioldager (50) | Executive Vice President (since 2007). | Senior Managing Director, BlackRock (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008); Head of Domestic Equity Portfolio Management, BGI (2001-2006). | ||
Ira P. Shapiro (50) | Vice President (since 2007). | Managing Director, BlackRock (since 2009); Head of Strategic Product Initiatives for iShares (since 2012); Chief Legal Officer, Exchange-Traded Fund Complex (2007-2012); Associate General Counsel, BGI (2004-2009). |
DIRECTORAND OFFICER INFORMATION | 37 |
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Notes:
38 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
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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.
©2013 BlackRock. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc. or its subsidiaries. All other marks are their respective owners.
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iS-AR-81-0813
Table of Contents
AUGUST 31, 2013
2013 ANNUAL REPORT
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iShares, Inc.
Ø | iShares MSCI Austria Capped ETF | EWO | NYSE Arca |
Ø | iShares MSCI Belgium Capped ETF | EWK | NYSE Arca |
Ø | iShares MSCI Emerging Markets Eastern Europe ETF | ESR | NYSE Arca |
Ø | iShares MSCI EMU ETF | EZU | NYSE Arca |
Ø | iShares MSCI France ETF | EWQ | NYSE Arca |
Ø | iShares MSCI Germany ETF | EWG | NYSE Arca |
Ø | iShares MSCI Italy Capped ETF | EWI | NYSE Arca |
Ø | iShares MSCI Netherlands ETF | EWN | NYSE Arca |
Ø | iShares MSCI Spain Capped ETF | EWP | NYSE Arca |
Ø | iShares MSCI Sweden ETF | EWD | NYSE Arca |
Ø | iShares MSCI Switzerland Capped ETF | EWL | NYSE Arca |
Ø | iShares MSCI United Kingdom ETF | EWU | NYSE Arca |
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Table of Contents
Management’s Discussion of Fund Performance
iSHARES®, INC.
EUROPE MARKET OVERVIEW
There has been much media attention on the global financial crisis, which began five years ago in September 2008. Like much of the world, Europe went into a severe recession. While other developed countries such as the U.S. resumed modest economic growth within a year or two, most of Europe stayed in negative territory for another three years. However, Europe has now begun to show modest signs of economic recovery and European stock markets have also tentatively begun to recover.
During the summer of 2013, economic data in Europe appeared to be more positive. Gross domestic product (“GDP”) rose 0.3% in the euro zone during the second quarter of 2013 versus the first quarter of 2013, thus ending six consecutive quarters of contraction. Most European countries posted slight gains in GDP with Germany and France, Europe’s largest economies, leading the way. Business confidence indices in those countries have been on an upward path for nearly a year. Portugal, one of the most distressed countries, returned to growth after two years of deep recession. Even Greece showed progress during the 12-month period ended August 31, 2013 (the “reporting period”). In the second quarter of 2013, its economy declined at the smallest rate in three years.
However, the data on Europe was not uniformly positive. Europe’s growth continued to lag the U.S., Japan and the rest of the developed world. Unemployment in the euro zone was around 12% for most of the reporting period and the number of people with jobs in the 17 euro countries fell about 1% in the second quarter of 2013 compared to the second quarter of 2012. The Netherlands was in the midst of its third recession since 2008, burdened by billions of euros worth of home mortgage debt. Italy posted its eighth consecutive quarter of negative growth; its industrial production was down 25% from its 2007 peak. Germany had positive growth, but it continued to depend on exports to other European countries, many of which were still in recession. Meanwhile, German banks were not lending in sufficient quantity to stimulate the economy, both because credit demand was weak and because lending requirements have become more stringent to meet regulator demands.
In July 2013, output from European factories fell to the lowest level in recent years, raising questions about the strength and durability of the recovery. Industrial production in the euro zone fell 1.5% in July 2013 from June 2013 while the euro zone’s public debt rose to over 90% of GDP, up from 70% in 2008. Declines in output were most pronounced by German, French and Italian factories, whose economies make up about two-thirds of the euro zone’s total output. The anemic nature of the recovery was reflected in inflation data for August 2013. In Ireland, annual inflation hit a three-year low of 0.2%, while in France it was 0.9% and in Spain it was 1.5%.
Even though the evidence of a rebounding Europe was mixed, there were many European companies posting excellent results, particularly those that generate a large portion of their sales in other parts of the world where economic growth is stronger.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 5 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI AUSTRIA CAPPED ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | 25.49% | 26.44% | 25.89% | 25.49% | 26.44% | 25.89% | ||||||||||||||||||||
5 Years | (6.63)% | (6.45)% | (7.30)% | (29.04)% | (28.37)% | (31.56)% | ||||||||||||||||||||
10 Years | 7.97% | 8.00% | 7.86% | 115.26% | 115.96% | 113.01% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
Index performance through January 31, 2008 reflects the performance of the MSCI Austria IndexSM. Index performance beginning on February 1, 2008 through February 11, 2013 reflects the performance of the MSCI Austria Investable Market IndexSM. Index performance beginning on February 12, 2013 reflects the performance of the MSCI Austria IMI 25/50 IndexSM.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 30 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,002.90 | $ | 2.52 | $ | 1,000.00 | $ | 1,022.70 | $ | 2.55 | 0.50% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 30 for more information. |
6 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI AUSTRIA CAPPED ETF
The iShares MSCI Austria Capped ETF (the “Fund”), formerly the iShares MSCI Austria Capped Investable Market Index Fund, seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Austria IMI 25/50 IndexSM (the “Index”). The Index is a free-float adjusted market capitalization-weighted index and 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 reporting period ended August 31, 2013, the total return for the Fund was 25.49%, net of fees, while the total return for the Index was 25.89%.
The Index’s strong performance for the reporting period, particularly during the summer of 2013, generally mirrored the rally in European stocks. However, Austria’s economy was virtually flat during the reporting period. Growth in GDP was just 0.1% in the second quarter of 2013 compared to the first quarter of 2013, which in turn was just 0.1% ahead of the fourth quarter of 2012.
According to the National Bank of Austria, Austrian GDP growth has been stagnating since the second quarter of 2012. While corporate bond issuance remained buoyant, the growth of bank lending to corporations weakened steadily during the reporting period due to declining demand and tightening credit standards. However, mortgage loans to households continued to register positive growth rates, as housing prices continued to rise.
Unemployment in Austria is among the lowest in the European Union, with the jobless rate at 6.7% as of July 2013. One reason for the country’s low unemployment rate is its apprenticeship system, in which the government pays companies to train non-college bound 15-year olds in such fields as carpentry, electrical wiring and other basic skills. Youth unemployment in Austria is only about 8%, compared to 24% for the average country in the European Union.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector | Percentage of Net Assets |
Financial | 35.36 | % | ||
Industrial | 27.48 | |||
Energy | 15.22 | |||
Basic Materials | 10.18 | |||
Utilities | 5.35 | |||
Communications | 4.22 | |||
Consumer Non-Cyclical | 1.20 | |||
Short-Term and Other Net Assets | 0.99 | |||
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| |||
TOTAL | 100.00 | % | ||
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TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Erste Group Bank AG | 14.55 | % | ||
OMV AG | 11.87 | |||
Voestalpine AG | 7.02 | |||
Andritz AG | 5.85 | |||
IMMOFINANZ AG | 5.39 | |||
Vienna Insurance Group AG | 4.41 | |||
Raiffeisen International Bank Holding AG | 4.40 | |||
Wienerberger AG | 4.33 | |||
Telekom Austria AG | 4.22 | |||
Oesterreichische Post AG | 3.83 | |||
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| |||
TOTAL | 65.87 | % | ||
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MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 7 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI BELGIUM CAPPED ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | 23.43% | 23.60% | 20.34% | 23.43% | 23.60% | 20.34% | ||||||||||||||||||||
5 Years | (0.75)% | (0.59)% | 0.65% | (3.68)% | (2.93)% | 3.27% | ||||||||||||||||||||
10 Years | 6.73% | 6.75% | 7.08% | 91.72% | 92.15% | 98.13% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
Index performance through November 30, 2007 reflects the performance of the MSCI Belgium IndexSM. Index performance beginning on December 1, 2007 through November 8, 2012 reflects the performance of the MSCI Belgium Investable Market IndexSM. Index performance beginning on November 9, 2012 reflects the performance of the MSCI Belgium IMI 25/50 IndexSM.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 30 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,032.30 | $ | 2.56 | $ | 1,000.00 | $ | 1,022.70 | $ | 2.55 | 0.50% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 30 for more information. |
8 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI BELGIUM CAPPED ETF
The iShares MSCI Belgium Capped ETF (the “Fund”), formerly the iShares MSCI Belgium Capped Investable Market Index Fund, seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Belgium IMI 25/50 IndexSM (the “Index”). The Index is designed to measure broad-based equity market performance in Belgium. 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 reporting period ended August 31, 2013, the total return for the Fund was 23.43%, net of fees, while the total return for the Index was 20.34%.
The Index’s strong performance for the reporting period, particularly during the summer of 2013, generally mirrored the rally in European stocks. Even though the stock market made gains, Belgium’s economy was virtually flat. Growth in GDP was just 0.2% in the second quarter of 2013, flat in the first quarter of 2013 and -0.1% in the fourth quarter of 2012.
Although the impact on GDP has yet to be felt, Belgium stands to benefit as the European Union countries improve economically. Exports account for about two-thirds of GDP, and the majority of its foreign trade is with other EU countries. According to the National Bank of Belgium, business confidence continued to improve in the summer of 2013 and is at its highest level since July 2011. Additionally, consumer confidence rose in August 2013 for the sixth straight month, placing the indicator at its highest level in two years.
The Fund notably outperformed the Index for the reporting period primarily as a result of being underweighted in its holding of Anheuser-Busch InBev NV relative to its underlying index for the period from September 1, 2012 to November 8, 2012. 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. This can affect a fund’s ability to track its index and cause the investment adviser to optimize around this regulatory constraint. For the period from September 1, 2012 to November 8, 2012, the Fund was obligated to underweight Anheuser-Busch InBev NV by more than 20% on average, and to overweight other securities in the portfolio relative to the underlying index. On November 9, 2012, the Fund changed its underlying index to the current Index, which utilizes a capping methodology that limits the weight of any single constituent to a maximum of 25% of the Index, potentially allowing the Fund to more closely track the Index.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector | Percentage of Net Assets | |||
Consumer Non-Cyclical | 39.98 | % | ||
Financial | 21.43 | |||
Basic Materials | 12.12 | |||
Industrial | 8.28 | |||
Diversified | 6.66 | |||
Communications | 5.87 | |||
Consumer Cyclical | 2.21 | |||
Technology | 1.97 | |||
Utilities | 1.33 | |||
Short-Term and Other Net Assets | 0.15 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets | |||
Anheuser-Busch InBev NV | 22.67 | % | ||
KBC Groep NV | 6.84 | |||
Ageas | 6.21 | |||
Solvay SA | 5.62 | |||
Groupe Bruxelles Lambert SA | 4.62 | |||
Delhaize Brothers and Co. “The Lion” (Delhaize Group) | 4.51 | |||
UCB SA | 4.39 | |||
Umicore SA | 3.93 | |||
Colruyt SA | 3.31 | |||
Belgacom SA | 2.95 | |||
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| |||
TOTAL | 65.05 | % | ||
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MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 9 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI EMERGING MARKETS EASTERN EUROPE ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | (0.20)% | (0.33)% | 0.68% | (0.20)% | (0.33)% | 0.68% | ||||||||||||||||||||
Since Inception | 1.29% | 1.19% | 1.81% | 5.14% | 4.75% | 7.28% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was 9/30/09. The first day of secondary market trading was 10/2/09.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 30 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 923.70 | $ | 3.30 | $ | 1,000.00 | $ | 1,021.80 | $ | 3.47 | 0.68% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 30 for more information. |
10 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS EASTERN EUROPE ETF
The iShares MSCI Emerging Markets Eastern Europe ETF (the “Fund”), formerly the iShares MSCI Emerging Markets Eastern Europe Index 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 reporting period ended August 31, 2013, the total return for the Fund was -0.20%, net of fees, while the total return for the Index was 0.68%.
Despite political turmoil in nearby Egypt and Syria, the Index’s performance was essentially flat during the reporting period. Russia, the largest country weighting in the Index on average, exerted a slightly negative impact, Poland’s performance was modestly positive while the other two markets represented in the Index — Hungary and the Czech Republic — were about even for the reporting period. Emerging markets in Eastern Europe lagged their counterparts in Asia but outperformed Latin America and the Middle East/Africa.
The economies of Eastern Europe were modestly positive during the reporting period. GDP in Russia expanded 1.2% during the second quarter of 2013 compared to the second quarter of 2012. Russia, a major exporter of oil and natural gas, saw unemployment decline slightly during the last few months of the reporting period to 5.2% in August 2013. Poland’s GDP expanded by 0.80% during the second quarter of 2013 compared to the second quarter of 2012 while Hungary posted marginally positive growth.
Emerging markets in Eastern Europe were also adversely impacted by the fear that global interest rates would rise, causing investors in riskier asset classes to become more cautious.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector | Percentage of Net Assets |
Energy | 45.88 | % | ||
Financial | 26.46 | |||
Communications | 8.67 | |||
Basic Materials | 7.60 | |||
Consumer Non-Cyclical | 5.78 | |||
Utilities | 4.60 | |||
Industrial | 0.27 | |||
Short-Term and Other Net Assets | 0.74 | |||
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| |||
TOTAL | 100.00 | % | ||
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|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Gazprom OAO (Russia) | 16.40 | % | ||
LUKOIL OAO (Russia) | 10.32 | |||
Sberbank of Russia (Russia) | 10.00 | |||
Magnit OJSC SP GDR (Russia) | 5.05 | |||
Mobile TeleSystems OJSC SP ADR (Russia) | 3.83 | |||
NovaTek OAO SP GDR (Russia) | 3.81 | |||
Powszechna Kasa Oszczednosci Bank Polski SA (Poland) | 3.62 | |||
Tatneft OAO Class S (Russia) | 3.11 | |||
Rosneft Oil Co. OJSC (Russia) | 3.02 | |||
Powszechny Zaklad Ubezpieczen SA (Poland) | 2.65 | |||
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| |||
TOTAL | 61.81 | % | ||
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MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 11 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI EMU ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | 22.43% | 22.97% | 22.50% | 22.43% | 22.97% | 22.50% | ||||||||||||||||||||
5 Years | (2.22)% | (2.05)% | (2.18)% | (10.63)% | (9.83)% | (10.44)% | ||||||||||||||||||||
10 Years | 6.41% | 6.38% | 6.57% | 86.10% | 85.55% | 89.01% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 30 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,067.80 | $ | 2.61 | $ | 1,000.00 | $ | 1,022.70 | $ | 2.55 | 0.50% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 30 for more information. |
12 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMU ETF
The iShares MSCI EMU ETF (the “Fund”), formerly the iShares MSCI EMU Index 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 reporting period ended August 31, 2013, the total return for the Fund was 22.43%, net of fees, while the total return for the Index was 22.50%.
Five years after the beginning of the global financial crisis in 2008, Europe’s economy is seeing some signs of improvement. The Index’s performance, particularly in the last two months of the reporting period, reflected that sentiment. Top country contributors to Index returns included France and Germany, while Italy and Spain lagged.
France’s economy showed strong signs of life in the second quarter of 2013, with GDP up 0.5% from the first quarter of 2013. Prior to April 2013, the economy had been flat for almost two years. France’s economy, which is heavily dependent on exports, faces a significant challenge because its cost of labor is significantly higher than other countries.
Germany, the largest economy in Europe, posted GDP growth of 0.7% in the second quarter of 2013 compared to the first quarter of 2013. In addition, manufacturing output in Germany was at a 25-month high. The unemployment rate in Germany was a constant 5.4% from late summer of 2012 through summer of 2013, declining slightly to 5.3% in August 2013.
However, in Italy and Spain, the recession continued. In Italy, GDP remained negative while unemployment reached 12%. In Spain, GDP was also negative while unemployment remained above 25%.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector | Percentage of Net Assets |
Consumer Non-Cyclical | 21.66 | % | ||
Financial | 21.02 | |||
Industrial | 13.10 | |||
Consumer Cyclical | 10.81 | |||
Communications | 7.94 | |||
Basic Materials | 7.63 | |||
Energy | 7.16 | |||
Utilities | 5.31 | |||
Technology | 4.57 | |||
Diversified | 0.62 | |||
Short-Term and Other Net Assets | 0.18 | |||
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| |||
TOTAL | 100.00 | % | ||
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TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Total SA (France) | 3.46 | % | ||
Sanofi (France) | 3.36 | |||
Bayer AG Registered (Germany) | 2.69 | |||
Siemens AG Registered (Germany) | 2.46 | |||
BASF SE (Germany) | 2.35 | |||
Banco Santander SA (Spain) | 2.31 | |||
Anheuser-Busch InBev NV (Belgium) | 2.19 | |||
SAP AG (Germany) | 2.00 | |||
Daimler AG Registered (Germany) | 1.93 | |||
Allianz SE Registered (Germany) | 1.91 | |||
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| |||
TOTAL | 24.66 | % | ||
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MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 13 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI FRANCE ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | 23.56% | 24.38% | 23.52% | 23.56% | 24.38% | 23.52% | ||||||||||||||||||||
5 Years | (0.93)% | (0.77)% | (0.90)% | (4.57)% | (3.81)% | (4.43)% | ||||||||||||||||||||
10 Years | 6.71% | 6.72% | 6.86% | 91.40% | 91.61% | 94.17% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 30 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,080.80 | $ | 2.62 | $ | 1,000.00 | $ | 1,022.70 | $ | 2.55 | 0.50% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 30 for more information. |
14 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI FRANCE ETF
The iShares MSCI France ETF (the “Fund”), formerly the iShares MSCI France Index 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 reporting period ended August 31, 2013, the total return for the Fund was 23.56%, net of fees, while the total return for the Index was 23.52%.
The Index’s strong performance for the reporting period, particularly during the summer of 2013, generally mirrored the rally in European stocks. Top contributors to Index returns included the financials, industrials and consumer discretionary sectors —areas that tend to do better when the economy improves. The bottom contributing sectors were telecommunications, utilities and information technology.
France’s economy showed strong signs of life in the second quarter of 2013, with GDP up 0.5% from the first quarter of 2013. Prior to April 2013, the economy had been flat for almost two years.
France is the fifth largest economy in the world and the second largest in the euro zone after Germany. The service sector contributes the largest share of the country’s GDP, driven in part by the tourist industry, which hosts 80 million foreign visitors each year. However, exports have declined in importance because products including cars, steel, clothing and electronics cost much more to produce than competing goods in Asia and France’s European neighbors. Labor costs in France are significantly higher than other countries, and French employees work the fewest hours in the developed world.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector* | Percentage of Net Assets |
Consumer Non-Cyclical | 25.88 | % | ||
Industrial | 17.41 | |||
Financial | 16.62 | |||
Energy | 11.74 | |||
Consumer Cyclical | 9.48 | |||
Communications | 7.07 | |||
Basic Materials | 5.27 | |||
Utilities | 3.93 | |||
Technology | 2.20 | |||
Diversified | 0.34 | |||
Short-Term and Other Net Assets | 0.06 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Total SA | 10.37 | % | ||
Sanofi | 10.03 | |||
BNP Paribas SA | 5.46 | |||
LVMH Moet Hennessy Louis Vuitton SA | 3.90 | |||
Danone SA | 3.73 | |||
L’Air Liquide SA | 3.59 | |||
Schneider Electric SA | 3.54 | |||
L’Oreal SA | 3.54 | |||
AXA SA | 3.42 | |||
European Aeronautic Defence and Space Co. NV | 2.94 | |||
|
| |||
TOTAL | 50.52 | % | ||
|
|
* | 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. |
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 15 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI GERMANY ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | 22.11% | 22.98% | 22.33% | 22.11% | 22.98% | 22.33% | ||||||||||||||||||||
5 Years | 0.98% | 1.13% | 0.99% | 4.99% | 5.76% | 5.07% | ||||||||||||||||||||
10 Years | 9.78% | 9.79% | 9.91% | 154.26% | 154.57% | 157.23% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 30 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,055.00 | $ | 2.59 | $ | 1,000.00 | $ | 1,022.70 | $ | 2.55 | 0.50% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 30 for more information. |
16 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI GERMANY ETF
The iShares MSCI Germany ETF (the “Fund”), formerly the iShares MSCI Germany Index 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 reporting period ended August 31, 2013, the total return for the Fund was 22.11%, net of fees, while the total return for the Index was 22.33%.
The Index’s strong performance for the reporting period, particularly during the summer of 2013, generally mirrored the trajectory of European stocks as a whole. Top sector contributors to Index returns included the consumer discretionary, financials and health care sectors. The bottom contributing sectors were utilities, telecommunication services and consumer staples.
Germany’s economic performance was among the strongest in Europe during the reporting period. As the largest economy in Europe, the country’s GDP rose 0.7% in the second quarter of 2013 compared to the first quarter of 2013. By the summer of 2013, manufacturing output in Germany was at a 25-month high. Other economic data were also favorable. The inflation rate in Germany declined from about 2% in the beginning of the reporting period to about 1.5% by August 2013. At the same time, the unemployment rate in Germany was a constant 5.4% from late summer of 2012 through summer of 2013, declining slightly to 5.3% in August 2013.
However, as the reporting period came to a close, industrial output contracted, surprising economists. This reinforced the view expressed by the European Central Bank that while signs of recovery are apparent, they are weak and inconsistent.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector* | Percentage of Net Assets |
Consumer Cyclical | 19.62 | % | ||
Consumer Non-Cyclical | 17.72 | |||
Financial | 16.76 | |||
Basic Materials | 13.83 | |||
Industrial | 12.92 | |||
Technology | 7.63 | |||
Communications | 5.70 | |||
Utilities | 4.21 | |||
Diversified | 0.72 | |||
Energy | 0.28 | |||
Short-Term and Other Net Assets | 0.61 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Bayer AG Registered | 8.99 | % | ||
Siemens AG Registered | 8.22 | |||
BASF SE | 7.86 | |||
SAP AG | 6.67 | |||
Daimler AG Registered | 6.46 | |||
Allianz SE Registered | 6.39 | |||
Deutsche Bank AG Registered | 4.32 | |||
Deutsche Telekom AG Registered | 3.52 | |||
Linde AG | 3.49 | |||
Volkswagen AG (Preferred) | 3.22 | |||
|
| |||
TOTAL | 59.14 | % | ||
|
|
* | 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. |
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 17 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI ITALY CAPPED ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | 13.58% | 13.96% | 13.59% | 13.58% | 13.96% | 13.59% | ||||||||||||||||||||
5 Years | (9.39)% | (9.11)% | (9.17)% | (38.93)% | (37.96)% | (38.19)% | ||||||||||||||||||||
10 Years | 0.95% | 0.95% | 0.98% | 9.88% | 9.95% | 10.20% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
Index performance through February 11, 2013 reflects the performance of the MSCI Italy IndexSM. Index performance beginning on February 12, 2013 reflects the performance of the MSCI Italy 25/50 IndexSM.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 30 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,065.40 | $ | 2.60 | $ | 1,000.00 | $ | 1,022.70 | $ | 2.55 | 0.50% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 30 for more information. |
18 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI ITALY CAPPED ETF
The iShares MSCI Italy Capped ETF (the “Fund”), formerly the iShares MSCI Italy Capped Index Fund, seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Italy 25/50 IndexSM (the “Index”). The Index is a free-float adjusted market capitalization-weighted index and 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 reporting period ended August 31, 2013, the total return for the Fund was 13.58%, net of fees, while the total return for the Index was 13.59%.
The Index’s strong performance for the reporting period, particularly during the summer of 2013, generally mirrored the trajectory of European stocks as a whole. However, Italy’s economy remained in a recession during the reporting period.
GDP was negative in every quarter of the reporting period while the unemployment rate rose from 10.6% in August 2012 to 12.0% in August 2013. Italy, the third largest economy in Europe, saw its credit rating lowered in July 2013, as Standard & Poor’s Ratings Services took note of the country’s worsening economic prospects, which includes a ballooning government debt load. The 10-year Italian government bond yield recently rose above Spain’s government bond, suggesting that investors require an even higher return on Italian bonds to compensate for risk.
On the plus side, the economy contracted less than economists expected during the second quarter of 2013. Government officials saw positive signals in industrial orders and consumer confidence levels. Meanwhile, inflation has been tame. The inflation rate in Italy has declined from about 3% in the beginning of the reporting period to about 1.2% by August 2013.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector | Percentage of Net Assets |
Financial | 26.66 | % | ||
Energy | 21.58 | |||
Utilities | 14.17 | |||
Consumer Cyclical | 11.35 | |||
Industrial | 10.23 | |||
Consumer Non-Cyclical | 8.47 | |||
Communications | 5.00 | |||
Diversified | 2.70 | |||
Short-Term and Other Net Assets | (0.16 | ) | ||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Eni SpA | 20.05 | % | ||
UniCredit SpA | 6.71 | |||
Assicurazioni Generali SpA | 5.88 | |||
Enel SpA | 5.57 | |||
Intesa Sanpaolo SpA | 5.30 | |||
Snam SpA | 4.54 | |||
Luxottica Group SpA | 4.44 | |||
Tenaris SA | 4.42 | |||
Fiat Industrial SpA | 4.35 | |||
Fiat SpA | 4.26 | |||
|
| |||
TOTAL | 65.52 | % | ||
|
|
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 19 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI NETHERLANDS ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | 25.57% | 25.90% | 26.16% | 25.57% | 25.90% | 26.16% | ||||||||||||||||||||
5 Years | 1.11% | 1.25% | 1.66% | 5.66% | 6.40% | 8.60% | ||||||||||||||||||||
10 Years | 7.57% | 7.58% | 8.04% | 107.38% | 107.65% | 116.78% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
Index performance through January 31, 2008 reflects the performance of the MSCI Netherlands IndexSM. Index performance beginning on February 1, 2008 reflects the performance of the MSCI Netherlands Investable Market IndexSM.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 30 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,125.10 | $ | 2.68 | $ | 1,000.00 | $ | 1,022.70 | $ | 2.55 | 0.50% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 30 for more information. |
20 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI NETHERLANDS ETF
The iShares MSCI Netherlands ETF (the “Fund”), formerly the iShares MSCI Netherlands Investable Market Index 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 reporting period ended August 31, 2013, the total return for the Fund was 25.57%, net of fees, while the total return for the Index was 26.16%.
The Index’s strong performance for the reporting period, particularly during the summer of 2013, generally mirrored the trajectory of European stocks as a whole. However, the Netherlands economy remained in a recession. GDP was negative in every quarter of the reporting period while unemployment rose steadily from 6.5% in August 2012 to 8.7% in August 2013. Inflation remained in the 2-3% range during the reporting period.
Unlike many other markets throughout the world, the housing market in the Netherlands has not begun to recover and Dutch housing prices continued to fall. Prior to the housing collapse in 2009, the Dutch government encouraged homeowners to borrow by allowing mortgages that were more than the then-current value of the property. As a result, Dutch mortgage debt as a percentage of the country’s GDP is significantly higher than it is in the U.S.
Despite the gloomy environment, the Netherlands had its top credit rating affirmed by Fitch Ratings, which nevertheless warned that the country’s worsening debt position could threaten its AAA rating.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector | Percentage of Net Assets | |||
Consumer Non-Cyclical | 33.70 | % | ||
Financial | 18.73 | |||
Industrial | 13.94 | |||
Technology | 12.44 | |||
Communications | 10.00 | |||
Basic Materials | 8.47 | |||
Energy | 2.27 | |||
Consumer Cyclical | 0.10 | |||
Short-Term and Other Net Assets | 0.35 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets | |||
Unilever NV CVA | 17.38 | % | ||
ING Groep NV CVA | 11.78 | |||
ASML Holding NV | 8.89 | |||
Koninklijke Philips Electronics NV | 8.39 | |||
Koninklijke Ahold NV | 4.58 | |||
Heineken NV | 4.49 | |||
Akzo Nobel NV | 3.99 | |||
AEGON NV | 3.59 | |||
Reed Elsevier NV | 3.58 | |||
Koninklijke DSM NV | 3.26 | |||
|
| |||
TOTAL | 69.93 | % | ||
|
|
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 21 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI SPAIN CAPPED ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | 20.88% | 21.53% | 20.68% | 20.88% | 21.53% | 20.68% | ||||||||||||||||||||
5 Years | (3.90)% | (3.76)% | (4.65)% | (18.03)% | (17.44)% | (21.21)% | ||||||||||||||||||||
10 Years | 7.31% | 7.29% | 6.99% | 102.56% | 102.17% | 96.57% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
Index performance through February 11, 2013 reflects the performance of the MSCI Spain IndexSM. Index performance beginning on February 12, 2013 reflects the performance of the MSCI Spain 25/50 IndexSM.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 30 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,030.60 | $ | 2.56 | $ | 1,000.00 | $ | 1,022.70 | $ | 2.55 | 0.50% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 30 for more information. |
22 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI SPAIN CAPPED ETF
The iShares MSCI Spain Capped ETF (the “Fund”), formerly the iShares MSCI Spain Capped Index Fund, seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Spain 25/50 IndexSM (the “Index”). The Index is a free-float adjusted market capitalization-weighted index and 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 reporting period ended August 31, 2013, the total return for the Fund was 20.88%, net of fees, while the total return for the Index was 20.68%.
The Index’s strong performance for the reporting period, particularly during the summer of 2013, generally mirrored the trajectory of European stocks as a whole. However, the Spanish economy remained in a recession. GDP was negative in every quarter while unemployment remained above 25%. Inflation was very modest — in the 1-2% range — during the reporting period.
The Spanish government has tried to address high unemployment by allowing companies to modify workers’ wages, hours and contracts to avoid layoffs. The Spanish Employment Ministry estimates that without reforms, an additional 225,000 Spanish workers would have lost their jobs. In the second quarter of 2013, Spanish unemployment fell slightly to 26.3% from 27.2%, the first decline since 2011. Spain’s unemployment rate was 8% in early 2008 before the financial crisis.
The housing market in Spain continues to decline, with prices falling 6.6% in the first quarter of 2013 compared to the fourth quarter of 2012. Declining home values are putting additional pressure on Spanish banks, which hold soured loans to developers and foreclosed properties.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector | Percentage of Net Assets |
Financial | 42.63 | % | ||
Communications | 13.15 | |||
Utilities | 11.02 | |||
Industrial | 8.46 | |||
Consumer Non-Cyclical | 8.37 | |||
Consumer Cyclical | 6.86 | |||
Energy | 4.69 | |||
Technology | 4.38 | |||
Short-Term and Other Net Assets | 0.44 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Banco Santander SA | 19.61 | % | ||
Telefonica SA | 13.15 | |||
Banco Bilbao Vizcaya Argentaria SA | 12.18 | |||
Repsol SA | 4.69 | |||
Industria de Diseno Textil SA | 4.64 | |||
Iberdrola SA | 4.57 | |||
Amadeus IT Holding SA Class A | 4.38 | |||
Ferrovial SA | 3.09 | |||
Gas Natural SDG SA | 3.07 | |||
Abertis Infraestructuras SA | 2.99 | |||
|
| |||
TOTAL | 72.37 | % | ||
|
|
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 23 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI SWEDEN ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | 21.02% | 21.40% | 20.85% | 21.02% | 21.40% | 20.85% | ||||||||||||||||||||
5 Years | 8.80% | 8.94% | 8.75% | 52.49% | 53.42% | 52.08% | ||||||||||||||||||||
10 Years | 12.99% | 12.98% | 13.03% | 239.12% | 238.88% | 240.28% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 30 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,016.00 | $ | 2.54 | $ | 1,000.00 | $ | 1,022.70 | $ | 2.55 | 0.50% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 30 for more information. |
24 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI SWEDEN ETF
The iShares MSCI Sweden ETF (the “Fund”), formerly the iShares MSCI Sweden Index 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 reporting period ended August 31, 2013, the total return for the Fund was 21.02%, net of fees, while the total return for the Index was 20.85%.
The Index’s strong performance for the reporting period, particularly during the summer of 2013, generally mirrored the rally in European stocks. Top contributors to Index returns included financials, industrials and information technology — areas that tend to do better when the economy improves. The bottom contributing sectors were energy, materials and telecommunication services.
Sweden’s GDP fell 0.2% in the second quarter of 2013 versus the first quarter of 2013, as rising household consumption could not offset weak exports to euro zone countries. However, declining exports, which account for roughly half of GDP, have recently weakened the country’s overall growth. Unemployment in Sweden reached 9.1% late in the reporting period, a historically high level.
In August 2013, Sweden’s finance minister announced a series of government spending measures to combat high unemployment and slow economic growth. Meanwhile, domestic consumption in Sweden continues to benefit from rising global stock markets, strong home prices, low interest rates and increasing salaries.
Sweden has one of the lowest national debts in all of Europe, with public debt at about 40% of GDP, which is about half that of Germany.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector* | Percentage of Net Assets | |||
Financial | 29.19 | % | ||
Industrial | 22.90 | |||
Consumer Cyclical | 18.26 | |||
Communications | 16.27 | |||
Consumer Non-Cyclical | 6.70 | |||
Basic Materials | 4.80 | |||
Energy | 1.25 | |||
Diversified | 0.60 | |||
Short-Term and Other Net Assets | 0.03 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets | |||
Telefonaktiebolaget LM Ericsson Class B | 9.36 | % | ||
Hennes & Mauritz AB Class B | 9.14 | |||
Nordea Bank AB | 8.73 | |||
Volvo AB Class B | 5.74 | |||
Svenska Handelsbanken AB Class A | 5.69 | |||
Swedbank AB Class A | 4.82 | |||
Atlas Copco AB Class A | 4.73 | |||
TeliaSonera AB | 4.46 | |||
Skandinaviska Enskilda Banken AB Class A | 4.17 | |||
Sandvik AB | 3.76 | |||
|
| |||
TOTAL | 60.60 | % | ||
|
|
* | 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. |
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 25 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI SWITZERLAND CAPPED ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | 25.71% | 26.23% | 26.36% | 25.71% | 26.23% | 26.36% | ||||||||||||||||||||
5 Years | 7.16% | 7.27% | 6.78% | 41.32% | 42.04% | 38.85% | ||||||||||||||||||||
10 Years | 10.86% | 10.82% | 10.42% | 180.27% | 179.41% | 169.55% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
Index performance through February 11, 2013 reflects the performance of the MSCI Switzerland IndexSM. Index performance beginning on February 12, 2013 reflects the performance of the MSCI Switzerland 25/50 IndexSM.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 30 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,035.30 | $ | 2.57 | $ | 1,000.00 | $ | 1,022.70 | $ | 2.55 | 0.50% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 30 for more information. |
26 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI SWITZERLAND CAPPED ETF
The iShares MSCI Switzerland Capped ETF (the “Fund”), formerly the iShares MSCI Switzerland Capped Index Fund, seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Switzerland 25/50 IndexSM (the “Index”). The Index is a free-float adjusted market capitalization-weighted index and 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 reporting period ended August 31, 2013, the total return for the Fund was 25.71%, net of fees, while the total return for the Index was 26.36%.
The Index’s strong performance for the reporting period, particularly during the summer of 2013, generally mirrored the trajectory of European stocks as a whole.
The Swiss economy was among the strongest in all of Europe, with GDP growth solidly positive for the past four quarters. Corporate earnings increased by nearly 50% in the first half of 2013 compared to the first half of 2012. Switzerland’s economy has a highly skilled work force, low unemployment — just 3% — and among the world’s highest worker productivity.
Because Switzerland is considered a safe haven in Europe, its companies can borrow money at lower interest rates than their counterparts in the euro zone. Investors are currently accepting a full percentage point less in average yield to own franc-denominated corporate bonds rather than bonds issued by corporations in other parts of Europe. This helps Swiss companies compete with neighbors who pay lower wages.
However, Switzerland depends heavily on exports, which have been curtailed somewhat by the high value of the Swiss franc. In response, the Swiss central bank has capped the franc’s appreciation relative to the euro, partly by keeping short-term interest rates at 0% to 0.25% for the past two years.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector | Percentage of Net Assets |
Consumer Non-Cyclical | 51.93 | % | ||
Financial | 20.20 | |||
Industrial | 11.04 | |||
Consumer Cyclical | 7.03 | |||
Basic Materials | 6.21 | |||
Energy | 1.74 | |||
Communications | 1.27 | |||
Short-Term and Other Net Assets | 0.58 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Nestle SA Registered | 17.46 | % | ||
Roche Holding AG Genusschein | 14.10 | |||
Novartis AG Registered | 13.37 | |||
UBS AG Registered | 4.45 | |||
Compagnie Financiere Richemont SA Class A Bearer | 4.39 | |||
ABB Ltd. Registered | 4.36 | |||
Credit Suisse Group AG Registered | 4.27 | |||
Syngenta AG Registered | 3.71 | |||
Zurich Insurance Group AG | 3.68 | |||
Swiss Re AG | 2.80 | |||
|
| |||
TOTAL | 72.59 | % | ||
|
|
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 27 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI UNITED KINGDOM ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | 12.91% | 12.96% | 13.47% | 12.91% | 12.96% | 13.47% | ||||||||||||||||||||
5 Years | 2.59% | 2.79% | 3.15% | 13.63% | 14.73% | 16.80% | ||||||||||||||||||||
10 Years | 7.23% | 7.29% | 7.90% | 101.04% | 102.05% | 113.93% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 30 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,048.20 | $ | 2.58 | $ | 1,000.00 | $ | 1,022.70 | $ | 2.55 | 0.50% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 30 for more information. |
28 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI UNITED KINGDOM ETF
The iShares MSCI United Kingdom ETF (the “Fund”), formerly the iShares MSCI United Kingdom Index 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 reporting period ended August 31, 2013, the total return for the Fund was 12.91%, net of fees, while the total return for the Index was 13.47%.
The Index’s strong performance for the reporting period, particularly during the summer of 2013, generally mirrored the trajectory of European stocks as a whole. Top contributors to Index returns included financials, consumer discretionary and consumer staples, while the energy, materials and information technology sectors lagged.
During the reporting period, the United Kingdom economy performed in line with some of the stronger European countries. GDP advanced 0.7% in the second quarter of 2013 compared to the first quarter of 2013, placing it alongside Germany as among the fastest growing of the world’s largest industrialized economies. The upturn was fueled by consumer spending as well as business investment and exports. Meanwhile, unemployment was 7.8% for most of the reporting period, easing to 7.7% in July 2013.
Given this set of circumstances, the Bank of England maintained short-term interest rates at 0.5%, indicating that it would raise interest rates when the unemployment rate dipped below 7%. That caused the British pound to rise against the U.S. dollar in July and August 2013 as investors anticipated higher returns on their money in U.K. financial institutions.
As it has since 2010, the British government continued to implement an austerity program of spending cuts and tax increases designed to close the country’s large federal budget deficit.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector* | Percentage of Net Assets | |||
Consumer Non-Cyclical | 27.33 | % | ||
Financial | 21.03 | |||
Energy | 16.48 | |||
Communications | 10.67 | |||
Basic Materials | 8.94 | |||
Consumer Cyclical | 5.38 | |||
Utilities | 4.21 | |||
Industrial | 3.99 | |||
Technology | 0.96 | |||
Short-Term and Other Net Assets | 1.01 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets | |||
HSBC Holdings PLC | 7.47 | % | ||
Vodafone Group PLC | 5.97 | |||
BP PLC | 5.04 | |||
GlaxoSmithKline PLC | 4.81 | |||
Royal Dutch Shell PLC Class A | 4.71 | |||
British American Tobacco PLC | 3.71 | |||
Royal Dutch Shell PLC Class B | 3.31 | |||
Diageo PLC | 2.95 | |||
BG Group PLC | 2.48 | |||
AstraZeneca PLC | 2.36 | |||
|
| |||
TOTAL | 42.81 | % | ||
|
|
* | 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. |
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 29 |
Table of Contents
Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.iShares.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are redeemed or sold in the market. Performance for certain funds may reflect a waiver of a portion of investment management fees. Without such waiver, performance would have been lower.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The 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 a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of a fund may not have traded in the secondary market until after the fund’s inception, for the period from inception to the first day of secondary trading, 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 at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. 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.
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 expense example, which is based on an investment of $1,000 invested on March 1, 2013 and held through August 31, 2013, 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.
Actual Expenses — The table provides information about actual account values and actual expenses. To estimate the expenses that you paid on your account 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 for your Fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Example for Comparison Purposes — The table also 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. 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 hypothetical examples are 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.
30 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI AUSTRIA CAPPED ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 99.01% |
| |||||||
BANKS — 18.95% |
| |||||||
Erste Group Bank AG | 374,072 | $ | 11,963,812 | |||||
Raiffeisen International Bank Holding AGa | 105,570 | 3,613,752 | ||||||
|
| |||||||
15,577,564 | ||||||||
BUILDING MATERIALS — 4.33% |
| |||||||
Wienerberger AG | 246,790 | 3,563,320 | ||||||
|
| |||||||
3,563,320 | ||||||||
CHEMICALS — 1.98% |
| |||||||
Lenzing AG | 22,816 | 1,627,608 | ||||||
|
| |||||||
1,627,608 | ||||||||
COMMERCIAL SERVICES — 1.20% |
| |||||||
Kapsch TrafficCom AGa | 24,380 | 988,535 | ||||||
|
| |||||||
988,535 | ||||||||
ELECTRIC — 5.35% |
| |||||||
EVN AG | 113,988 | 1,436,912 | ||||||
Verbund AG | 153,916 | 2,958,049 | ||||||
|
| |||||||
4,394,961 | ||||||||
ELECTRICAL COMPONENTS & EQUIPMENT — 1.54% |
| |||||||
Zumtobel AG | 101,844 | 1,263,952 | ||||||
|
| |||||||
1,263,952 | ||||||||
ELECTRONICS — 1.15% |
| |||||||
Austria Technologie & Systemtechnik AG | 92,552 | 945,803 | ||||||
|
| |||||||
945,803 | ||||||||
ENGINEERING & CONSTRUCTION — 2.24% |
| |||||||
Flughafen Wien AG | 28,842 | 1,841,654 | ||||||
|
| |||||||
1,841,654 | ||||||||
INSURANCE — 4.41% |
| |||||||
Vienna Insurance Group AG | 71,438 | 3,624,745 | ||||||
|
| |||||||
3,624,745 | ||||||||
IRON & STEEL — 8.20% |
| |||||||
AMAG Austria Metall AGb | 33,902 | 976,094 | ||||||
Voestalpine AG | 135,148 | 5,769,425 | ||||||
|
| |||||||
6,745,519 | ||||||||
MACHINERY — 7.50% |
| |||||||
Andritz AG | 87,538 | 4,813,332 | ||||||
Palfinger AG | 41,446 | 1,349,872 | ||||||
|
| |||||||
6,163,204 | ||||||||
MANUFACTURING — 4.03% |
| |||||||
RHI AG | 58,604 | 1,843,787 |
Security | Shares | Value | ||||||
Semperit AG Holding | 34,500 | $ | 1,473,477 | |||||
|
| |||||||
3,317,264 | ||||||||
OIL & GAS — 11.87% |
| |||||||
OMV AG | 211,922 | 9,760,853 | ||||||
|
| |||||||
9,760,853 | ||||||||
OIL & GAS SERVICES — 3.35% |
| |||||||
Schoeller-Bleckmann Oilfield Equipment AG | 26,128 | 2,756,191 | ||||||
|
| |||||||
2,756,191 | ||||||||
PACKAGING & CONTAINERS — 2.86% |
| |||||||
Mayr-Melnhof Karton AG | 21,988 | 2,355,712 | ||||||
|
| |||||||
2,355,712 | ||||||||
REAL ESTATE — 12.00% |
| |||||||
CA Immobilien Anlagen AGc | 183,724 | 2,354,995 | ||||||
conwert Immobilien Invest SE | 172,454 | 1,853,293 | ||||||
IMMOEAST AG Escrowc,d | 998,769 | 13 | ||||||
IMMOFINANZ AGc | 1,126,310 | 4,431,695 | ||||||
IMMOFINANZ AG Escrowc,d | 897,599 | 12 | ||||||
S IMMO AGa | 200,422 | 1,226,243 | ||||||
|
| |||||||
9,866,251 | ||||||||
TELECOMMUNICATIONS — 4.22% |
| |||||||
Telekom Austria AG | 483,690 | 3,469,598 | ||||||
|
| |||||||
3,469,598 | ||||||||
TRANSPORTATION — 3.83% |
| |||||||
Oesterreichische Post AG | 75,808 | 3,148,754 | ||||||
|
| |||||||
3,148,754 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $110,514,293) |
| 81,411,488 | ||||||
SHORT-TERM INVESTMENTS — 3.25% |
| |||||||
MONEY MARKET FUNDS — 3.25% |
| |||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.15%e,f,g | 2,447,496 | 2,447,496 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.13%e,f,g | 155,414 | 155,414 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.00%e,f | 69,848 | 69,848 | ||||||
|
| |||||||
2,672,758 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $2,672,758) |
| 2,672,758 | ||||||
|
|
SCHEDULESOF INVESTMENTS | 31 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI AUSTRIA CAPPED ETF
August 31, 2013
Value | ||||||
TOTAL INVESTMENTS | ||||||
(Cost: $113,187,051) | $ | 84,084,246 | ||||
Other Assets, Less Liabilities — (2.26)% | (1,861,019 | ) | ||||
|
| |||||
NET ASSETS — 100.00% | $ | 82,223,227 | ||||
|
|
a | All or a portion of this security represents a security on loan. See Note 5. |
b | This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933. |
c | Non-income earning security. |
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. |
See notes to financial statements.
32 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
iSHARES® MSCI BELGIUM CAPPED ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 99.85% |
| |||||||
BANKS — 6.84% |
| |||||||
KBC Groep NV | 110,980 | $ | 4,870,137 | |||||
|
| |||||||
4,870,137 | ||||||||
BEVERAGES — 22.67% |
| |||||||
Anheuser-Busch InBev NV | 173,972 | 16,145,137 | ||||||
|
| |||||||
16,145,137 | ||||||||
BIOTECHNOLOGY — 1.10% |
| |||||||
Ablynx NVa | 85,064 | 780,671 | ||||||
|
| |||||||
780,671 | ||||||||
CHEMICALS — 7.17% |
| |||||||
Recticel SA | 71,548 | 457,565 | ||||||
Solvay SA | 28,768 | 3,998,190 | ||||||
Tessenderlo Chemie NV | 27,032 | 650,510 | ||||||
|
| |||||||
5,106,265 | ||||||||
COMPUTERS — 0.89% |
| |||||||
Econocom Group SAb | 82,832 | 633,489 | ||||||
|
| |||||||
633,489 | ||||||||
DISTRIBUTION & WHOLESALE — 1.21% |
| |||||||
SA D’Ieteren NV | 18,724 | 864,378 | ||||||
|
| |||||||
864,378 | ||||||||
ELECTRIC — 1.33% |
| |||||||
Elia System Operator SA | 22,692 | 945,226 | ||||||
|
| |||||||
945,226 | ||||||||
ELECTRICAL COMPONENTS & EQUIPMENT — 1.66% |
| |||||||
Bekaert NV | 33,356 | 1,184,468 | ||||||
|
| |||||||
1,184,468 | ||||||||
ELECTRONICS — 2.19% |
| |||||||
Barco NV | 10,292 | 734,464 | ||||||
EVS Broadcast Equipment SA | 12,152 | 822,814 | ||||||
|
| |||||||
1,557,278 | ||||||||
ENGINEERING & CONSTRUCTION — 0.85% |
| |||||||
Compagnie d’Entreprises CFE SA | 11,160 | 605,105 | ||||||
|
| |||||||
605,105 | ||||||||
ENTERTAINMENT — 1.00% |
| |||||||
Kinepolis Group NV | 5,580 | 712,308 | ||||||
|
| |||||||
712,308 | ||||||||
FOOD — 7.82% |
| |||||||
Colruyt SA | 42,656 | 2,355,591 | ||||||
Delhaize Brothers and Co. “The Lion” (Delhaize Group) | 50,468 | 3,212,562 | ||||||
|
| |||||||
5,568,153 |
Security | Shares | Value | ||||||
HEALTH CARE — PRODUCTS — 0.79% |
| |||||||
Ion Beam Applications SAa | 72,292 | $ | 564,319 | |||||
|
| |||||||
564,319 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 8.23% |
| |||||||
Ackermans & van Haaren NV | 16,244 | 1,453,302 | ||||||
Groupe Bruxelles Lambert SA | 41,416 | 3,293,052 | ||||||
KBC Ancora SCAa,b | 44,640 | 1,015,964 | ||||||
RHJ International SAa,b | 19,580 | 96,302 | ||||||
|
| |||||||
5,858,620 | ||||||||
INSURANCE — 6.21% |
| |||||||
Ageas | 112,592 | 4,421,253 | ||||||
|
| |||||||
4,421,253 | ||||||||
MANUFACTURING — 0.90% |
| |||||||
Agfa-Gevaert NVa | 323,764 | 640,373 | ||||||
|
| |||||||
640,373 | ||||||||
MINING — 4.95% |
| |||||||
Nyrstar NVa,b | 156,488 | 728,398 | ||||||
Umicore SA | 60,636 | 2,799,212 | ||||||
|
| |||||||
3,527,610 | ||||||||
PHARMACEUTICALS — 7.60% |
| |||||||
Arseus NV | 28,644 | 812,055 | ||||||
Galapagos NVa,b | 35,340 | 689,204 | ||||||
ThromboGenics NVa,b | 25,916 | 783,412 | ||||||
UCB SA | 53,940 | 3,129,513 | ||||||
|
| |||||||
5,414,184 | ||||||||
REAL ESTATE INVESTMENT TRUSTS — 5.64% |
| |||||||
Befimmo | 13,640 | 888,494 | ||||||
Cofinimmo SA | 11,284 | 1,249,099 | ||||||
Intervest Offices & Warehouses | 21,576 | 516,369 | ||||||
Warehouses De Pauw SCA | 12,152 | 801,342 | ||||||
Wereldhave Belgium NV | 5,208 | 563,185 | ||||||
|
| |||||||
4,018,489 | ||||||||
SEMICONDUCTORS — 1.08% |
| |||||||
Melexis NV | 31,620 | 769,674 | ||||||
|
| |||||||
769,674 | ||||||||
TELECOMMUNICATIONS — 5.87% |
| |||||||
Belgacom SA | 88,164 | 2,104,180 | ||||||
Mobistar SA | 34,844 | 518,263 | ||||||
Telenet Group Holding NV | 32,364 | 1,557,004 | ||||||
|
| |||||||
4,179,447 | ||||||||
TRANSPORTATION — 2.68% |
| |||||||
Compagnie Maritime Belge SA | 28,768 | 679,009 | ||||||
Euronav SAa | 93,992 | 516,821 |
SCHEDULESOF INVESTMENTS | 33 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI BELGIUM CAPPED ETF
August 31, 2013
Security | Shares | Value | ||||||
Exmar NV | 60,140 | $ | 715,292 | |||||
|
| |||||||
1,911,122 | ||||||||
VENTURE CAPITAL — 1.17% |
| |||||||
GIMV NV | 17,484 | 834,339 | ||||||
|
| |||||||
834,339 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $71,555,420) |
| 71,112,045 | ||||||
SHORT-TERM INVESTMENTS — 4.02% |
| |||||||
MONEY MARKET FUNDS — 4.02% |
| |||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.15%c,d,e | 2,659,725 | 2,659,725 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.13%c,d,e | 168,891 | 168,891 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.00%c,d | 34,583 | 34,583 | ||||||
|
| |||||||
2,863,199 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $2,863,199) |
| 2,863,199 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $74,418,619) |
| 73,975,244 | ||||||
Other Assets, Less Liabilities — (3.87)% |
| (2,759,493 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 71,215,751 | |||||
|
|
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.
34 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
iSHARES® MSCI EMERGING MARKETS EASTERN EUROPE ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 95.62% |
| |||||||
CZECH REPUBLIC — 3.02% |
| |||||||
CEZ AS | 68,652 | $ | 1,582,401 | |||||
Komercni Banka AS | 6,428 | 1,381,011 | ||||||
Telefonica O2 Czech Republic AS | 47,948 | 714,469 | ||||||
|
| |||||||
3,677,881 | ||||||||
HUNGARY — 2.62% |
| |||||||
Magyar Telekom Telecommunications PLC | 199,818 | 275,164 | ||||||
MOL Hungarian Oil and Gas PLC | 17,850 | 1,263,371 | ||||||
OTP Bank PLC | 89,454 | 1,657,711 | ||||||
|
| |||||||
3,196,246 | ||||||||
POLAND — 20.90% |
| |||||||
Alior Bank SAa | 16,221 | 458,411 | ||||||
Bank Handlowy w Warszawie SA | 13,974 | 441,523 | ||||||
Bank Millennium SAa | 181,458 | 372,696 | ||||||
Bank Pekao SA | 55,896 | 3,003,908 | ||||||
Bank Zachodni WBK SA | 11,934 | 1,149,630 | ||||||
BRE Bank SA | 6,324 | 863,318 | ||||||
Cyfrowy Polsat SAa | 74,562 | 463,343 | ||||||
ENEA SA | 55,906 | 248,644 | ||||||
Eurocash SA | 35,193 | 564,131 | ||||||
Grupa Azoty SA | 16,838 | 379,638 | ||||||
Grupa Lotos SAa | 27,540 | 323,990 | ||||||
Jastrzebska Spolka Weglowa SA | 17,444 | 365,986 | ||||||
Kernel Holding SAa | 22,134 | 324,037 | ||||||
KGHM Polska Miedz SA | 59,772 | 2,263,315 | ||||||
Polska Grupa Energetyczna SA | 318,546 | 1,671,561 | ||||||
Polski Koncern Naftowy Orlen SA | 136,884 | 1,902,065 | ||||||
Polskie Gornictwo Naftowe i Gazownictwo SA | 754,097 | 1,439,370 | ||||||
Powszechna Kasa Oszczednosci Bank Polski SAa | 373,116 | 4,414,817 | ||||||
Powszechny Zaklad Ubezpieczen SA | 23,868 | 3,228,474 | ||||||
Synthos SA | 223,791 | 306,198 | ||||||
Tauron Polska Energia SA | 447,780 | 591,923 | ||||||
Telekomunikacja Polska SA | 285,192 | 673,838 | ||||||
|
| |||||||
25,450,816 | ||||||||
RUSSIA — 69.08% |
| |||||||
Federal Grid Co. of Unified Energy System OJSCa | 133,678,000 | 425,363 | ||||||
Gazprom OAO | 5,044,982 | 19,981,177 | ||||||
INTER RAO UES OJSCa | 898,800,000 | 319,275 |
Security | Shares | Value | ||||||
LSR Group OJSC SP GDRb | 76,806 | $ | 322,585 | |||||
LUKOIL OAO | 217,464 | 12,566,720 | ||||||
Magnit OJSC SP GDRb | 110,772 | 6,147,846 | ||||||
MegaFon OAO SP GDRb | 36,924 | 1,248,031 | ||||||
MMC Norilsk Nickel OJSC | 22,032 | 2,891,026 | ||||||
Mobile TeleSystems OJSC SP ADR | 220,218 | 4,659,813 | ||||||
NovaTek OAO SP GDRb | 38,760 | 4,643,448 | ||||||
Rosneft Oil Co. OJSC | 496,754 | 3,674,306 | ||||||
Rostelecom OJSC | 465,003 | 1,403,401 | ||||||
RusHydro OJSC | 47,328,000 | 768,122 | ||||||
Sberbank of Russia | 4,599,235 | 12,184,803 | ||||||
Severstal OAO | 89,849 | 744,357 | ||||||
Sistema JSFC SP GDRb | 51,408 | 1,138,173 | ||||||
Surgutneftegas OJSC | 3,049,960 | 2,387,730 | ||||||
Tatneft OAO Class S | 603,859 | 3,784,930 | ||||||
TMK OAO SP GDRb | 25,092 | 322,934 | ||||||
Uralkali OJSC | 564,075 | 2,684,620 | ||||||
VTB Bank OJSC | 1,381,080,999 | 1,845,422 | ||||||
|
| |||||||
84,144,082 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $130,922,067) |
| 116,469,025 | ||||||
PREFERRED STOCKS — 3.64% |
| |||||||
RUSSIA — 3.64% |
| |||||||
AK Transneft OAO | 665 | 1,527,585 | ||||||
Sberbank of Russia | 429,100 | 901,931 | ||||||
Surgutneftegas OJSC | 2,958,100 | 1,998,536 | ||||||
|
| |||||||
4,428,052 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $4,438,514) |
| 4,428,052 | ||||||
SHORT-TERM INVESTMENTS — 0.18% |
| |||||||
MONEY MARKET FUNDS — 0.18% |
| |||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.00%c,d | 219,611 | 219,611 | ||||||
|
| |||||||
219,611 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $219,611) |
| 219,611 | ||||||
|
|
SCHEDULESOF INVESTMENTS | 35 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS EASTERN EUROPE ETF
August 31, 2013
Value | ||||||
TOTAL INVESTMENTS | ||||||
(Cost: $135,580,192) | $ | 121,116,688 | ||||
Other Assets, Less Liabilities — 0.56% | 680,758 | |||||
|
| |||||
NET ASSETS — 100.00% | $ | 121,797,446 | ||||
|
|
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.
36 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 97.74% |
| |||||||
AUSTRIA — 1.00% |
| |||||||
Andritz AG | 75,628 | $ | 4,158,452 | |||||
Erste Group Bank AG | 268,242 | 8,579,089 | ||||||
IMMOEAST AG Escrowa,b | 105,078 | 2 | ||||||
IMMOFINANZ AGa | 997,472 | 3,924,756 | ||||||
IMMOFINANZ AG Escrowa,b | 68,575 | 1 | ||||||
OMV AG | 153,300 | 7,060,799 | ||||||
Raiffeisen International Bank Holding AGc | 51,100 | 1,749,197 | ||||||
Telekom Austria AG | 230,972 | 1,656,805 | ||||||
Verbund AG | 70,518 | 1,355,257 | ||||||
Vienna Insurance Group AG | 39,858 | 2,022,385 | ||||||
Voestalpine AG | 116,508 | 4,973,689 | ||||||
|
| |||||||
35,480,432 | ||||||||
BELGIUM — 4.02% |
| |||||||
Ageas | 240,170 | 9,430,975 | ||||||
Anheuser-Busch InBev NV | 837,018 | 77,677,848 | ||||||
Belgacom SA | 158,410 | 3,780,718 | ||||||
Colruyt SA | 78,694 | 4,345,717 | ||||||
Delhaize Brothers and Co. “The Lion” (Delhaize Group) | 106,288 | 6,765,808 | ||||||
Groupe Bruxelles Lambert SA | 84,826 | 6,744,650 | ||||||
KBC Groep NV | 236,082 | 10,359,990 | ||||||
Solvay SA | 61,320 | 8,522,282 | ||||||
Telenet Group Holding NV | 53,144 | 2,556,711 | ||||||
UCB SA | 114,464 | 6,641,019 | ||||||
Umicore SA | 118,552 | 5,472,857 | ||||||
|
| |||||||
142,298,575 | ||||||||
FINLAND — 2.77% |
| |||||||
Elisa OYJ | 148,190 | 3,108,867 | ||||||
Fortum OYJ | 463,988 | 9,213,929 | ||||||
Kesko OYJ Class B | 66,430 | 1,998,909 | ||||||
Kone OYJ Class B | 162,498 | 13,263,306 | ||||||
Metso OYJ | 129,794 | 4,982,071 | ||||||
Neste Oil OYJ | 133,882 | 2,453,862 | ||||||
Nokia OYJa,c | 3,898,930 | 15,042,946 | ||||||
Nokian Renkaat OYJ | 117,530 | 5,478,369 | ||||||
Orion OYJ Class B | 102,200 | 2,362,359 | ||||||
Pohjola Bank PLC Class A | 144,102 | 2,335,259 | ||||||
Sampo OYJ Class A | 436,394 | 18,131,774 | ||||||
Stora Enso OYJ Class R | 573,342 | 4,418,872 | ||||||
UPM-Kymmene OYJ | 547,792 | 6,598,381 | ||||||
Wartsila OYJ Abp | 184,982 | 8,617,598 | ||||||
|
| |||||||
98,006,502 |
Security | Shares | Value | ||||||
FRANCE — 33.68% |
| |||||||
Accor SA | 165,564 | $ | 6,244,835 | |||||
Aeroports de Paris | 30,660 | 2,985,629 | ||||||
ALSTOM | 224,840 | 7,893,622 | ||||||
ArcelorMittal | 1,029,154 | 13,180,955 | ||||||
Arkema SA | 65,408 | 6,595,308 | ||||||
Atos SA | 58,254 | 4,316,932 | ||||||
AXA SA | 1,865,150 | 40,542,997 | ||||||
BNP Paribas SA | 1,031,198 | 64,471,971 | ||||||
Bouygues SA | 202,356 | 6,314,453 | ||||||
Bureau Veritas SA | 229,950 | 6,931,429 | ||||||
Cap Gemini SA | 150,234 | 8,209,205 | ||||||
Carrefour SA | 627,508 | 19,597,731 | ||||||
Casino Guichard-Perrachon SA | 58,254 | 5,500,632 | ||||||
Christian Dior SA | �� | 56,210 | 9,609,466 | |||||
CNP Assurances SA | 167,608 | 2,957,086 | ||||||
Compagnie de Saint-Gobain | 414,932 | 19,335,553 | ||||||
Compagnie Generale de Geophysique-Veritasa | 165,564 | 3,920,896 | ||||||
Compagnie Generale des Etablissements Michelin Class B | 190,092 | 18,144,940 | ||||||
Credit Agricole SAa | 1,040,396 | 10,487,918 | ||||||
Danone SA | 594,804 | 44,187,950 | ||||||
Dassault Systemes SA | 65,408 | 8,335,773 | ||||||
Edenred SA | 211,554 | 6,321,123 | ||||||
Electricite de France SA | 250,390 | 6,999,483 | ||||||
Essilor International SA | 212,576 | 22,897,932 | ||||||
Eurazeo | 32,031 | 1,981,928 | ||||||
European Aeronautic Defence and Space Co. NV | 604,002 | 34,728,642 | ||||||
Eutelsat Communications SA | 149,212 | 4,454,442 | ||||||
Fonciere des Regions | 29,638 | 2,286,610 | ||||||
GDF Suez | 1,381,744 | 29,880,273 | ||||||
Gecina SA | 22,484 | 2,668,563 | ||||||
Gemalto NVc | 82,782 | 9,504,244 | ||||||
Groupe Eurotunnel SA Registered | 564,513 | 4,184,831 | ||||||
Icade | 36,792 | 3,198,524 | ||||||
Iliad SA | 24,528 | 5,870,186 | ||||||
Imerys SA | 35,770 | 2,324,121 | ||||||
JCDecaux SA | 69,496 | 2,323,009 | ||||||
Kering SA | 79,716 | 17,963,902 | ||||||
Klepierre | 104,244 | 4,125,059 | ||||||
L’Air Liquide SA | 324,996 | 42,643,994 | ||||||
L’Oreal SA | 252,434 | 42,023,514 |
SCHEDULESOF INVESTMENTS | 37 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMU ETF
August 31, 2013
Security | Shares | Value | ||||||
Lafarge SA | 194,180 | $ | 11,829,315 | |||||
Lagardere SCA | 116,508 | 3,538,809 | ||||||
Legrand SA | 269,808 | 13,652,631 | ||||||
LVMH Moet Hennessy Louis Vuitton SA | 263,676 | 46,085,411 | ||||||
Natixis | 962,724 | 4,138,401 | ||||||
Orange | 1,930,558 | 19,540,287 | ||||||
Pernod Ricard SA | 220,752 | 25,568,786 | ||||||
Publicis Groupe SA | 186,004 | 13,813,320 | ||||||
Remy Cointreau SA | 26,572 | 2,789,012 | ||||||
Renault SA | 198,268 | 14,138,471 | ||||||
Rexel SA | 207,466 | 4,760,026 | ||||||
Safran SA | 260,610 | 14,438,051 | ||||||
Sanofi | 1,240,708 | 118,920,679 | ||||||
Schneider Electric SA | 547,792 | 41,822,248 | ||||||
SCOR SE | 159,432 | 4,977,126 | ||||||
SES SA Class A FDR | 317,842 | 9,316,738 | ||||||
Societe BIC SA | 30,660 | 3,516,452 | ||||||
Societe Generale | 728,686 | 31,818,398 | ||||||
Sodexo | 98,112 | 8,638,068 | ||||||
STMicroelectronics NV | 664,300 | 5,292,466 | ||||||
Suez Environnement SA | 292,292 | 4,345,569 | ||||||
Technip SA | 106,288 | 12,333,321 | ||||||
Thales SA | 95,046 | 4,672,216 | ||||||
Total SA | 2,217,740 | 122,572,552 | ||||||
Unibail-Rodamco SE | 99,134 | 22,235,150 | ||||||
Vallourec SA | 109,354 | 6,544,975 | ||||||
Veolia Environnementc | 354,634 | 5,450,116 | ||||||
Vinci SA | 482,384 | 24,851,318 | ||||||
Vivendi SA | 1,240,708 | 25,104,386 | ||||||
Wendel | 33,726 | 4,097,123 | ||||||
Zodiac Aerospace | 35,770 | 5,167,071 | ||||||
|
| |||||||
1,192,114,153 | ||||||||
GERMANY — 27.66% |
| |||||||
Adidas AG | 217,686 | 22,963,264 | ||||||
Allianz SE Registered | 473,186 | 67,635,437 | ||||||
Axel Springer AG | 40,880 | 2,037,585 | ||||||
BASF SE | 953,526 | 83,146,542 | ||||||
Bayer AG Registered | 859,502 | 95,245,850 | ||||||
Bayerische Motoren Werke AG | 342,370 | 32,183,809 | ||||||
Beiersdorf AG | 105,266 | 9,050,005 | ||||||
Brenntag AG | 53,144 | 8,058,704 | ||||||
Celesio AG | 88,914 | 1,848,907 | ||||||
Commerzbank AGa | 998,494 | 11,580,940 | ||||||
Continental AG | 115,486 | 17,390,360 |
Security | Shares | Value | ||||||
Daimler AG Registered | 998,494 | $ | 68,358,618 | |||||
Deutsche Bank AG Registered | 1,057,770 | 45,692,852 | ||||||
Deutsche Boerse AG | 201,334 | 14,083,663 | ||||||
Deutsche Lufthansa AG Registereda | 240,170 | 4,276,874 | ||||||
Deutsche Post AG Registered | 944,328 | 27,219,877 | ||||||
Deutsche Telekom AG Registered | 2,924,964 | 37,380,668 | ||||||
E.ON SE | 1,875,370 | 29,624,901 | ||||||
Fraport AG | 38,836 | 2,501,055 | ||||||
Fresenius Medical Care AG & Co. KGaA | 223,818 | 14,515,795 | ||||||
Fresenius SE & Co. KGaA | 129,794 | 15,581,167 | ||||||
GEA Group AG | 190,092 | 7,667,547 | ||||||
Hannover Rueck SE Registered | 62,342 | 4,339,558 | ||||||
HeidelbergCement AG | 146,146 | 10,126,813 | ||||||
Henkel AG & Co. KGaA | 134,904 | 10,941,672 | ||||||
Hochtief AG | 31,682 | 2,242,530 | ||||||
Hugo Boss AG | 32,704 | 3,974,693 | ||||||
Infineon Technologies AG | 1,125,222 | 10,178,305 | ||||||
K+S AG Registeredc | 174,762 | 4,232,053 | ||||||
Kabel Deutschland Holding AG | 93,002 | 10,534,128 | ||||||
Lanxess AG | 86,870 | 5,585,875 | ||||||
Linde AG | 193,158 | 37,058,584 | ||||||
MAN SE | 36,792 | 4,199,366 | ||||||
Merck KGaA | 67,452 | 10,223,908 | ||||||
METRO AG | 134,904 | 4,941,630 | ||||||
Muenchener Rueckversicherungs-Gesellschaft AG Registered | 187,026 | 34,007,866 | ||||||
Osram Licht AGa | 86,870 | 3,469,622 | ||||||
ProSiebenSat.1 Media AG Registered | 112,420 | 4,754,703 | ||||||
QIAGEN NVa | 246,302 | 4,936,563 | ||||||
RWE AG | 509,978 | 13,983,745 | ||||||
SAP AG | 957,614 | 70,623,370 | ||||||
Siemens AG Registered | 823,732 | 86,991,608 | ||||||
Suedzucker AG | 84,826 | 2,730,856 | ||||||
Telefonica Deutschland Holding AGd | 292,292 | 2,037,696 | ||||||
ThyssenKrupp AGa | 401,646 | 8,423,455 | ||||||
United Internet AG Registered | 111,398 | 3,839,689 | ||||||
Volkswagen AG | 30,660 | 6,800,037 | ||||||
|
| |||||||
979,222,745 | ||||||||
GREECE — 0.13% |
| |||||||
Hellenic Telecommunications Organization SAa | 252,434 | 2,276,759 |
38 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMU ETF
August 31, 2013
Security | Shares | Value | ||||||
OPAP SA | 229,950 | $ | 2,274,091 | |||||
|
| |||||||
4,550,850 | ||||||||
IRELAND — 1.16% |
| |||||||
Bank of Irelanda | 21,929,054 | 6,390,360 | ||||||
CRH PLC | 756,280 | 15,965,667 | ||||||
Elan Corp. PLCa | 504,868 | 7,619,154 | ||||||
Irish Bank Resolution Corp. Ltd.a,b | 446,666 | 6 | ||||||
Kerry Group PLC Class A | 155,344 | 9,776,852 | ||||||
Ryanair Holdings PLC | 43,520 | 379,089 | ||||||
Ryanair Holdings PLC SP ADR | 18,917 | 897,801 | ||||||
|
| |||||||
41,028,929 | ||||||||
ITALY — 7.32% |
| |||||||
Assicurazioni Generali SpA | 1,216,180 | 23,253,000 | ||||||
Atlantia SpA | 342,511 | 6,169,335 | ||||||
Banca Monte dei Paschi di Siena SpAa,c | 6,687,968 | 1,927,780 | ||||||
Enel Green Power SpA | 1,875,370 | 3,949,163 | ||||||
Enel SpA | 6,856,598 | 22,620,860 | ||||||
Eni SpA | 2,649,024 | 60,359,101 | ||||||
Exor SpA | 96,068 | 3,273,289 | ||||||
Fiat Industrial SpA | 891,184 | 10,652,421 | ||||||
Fiat SpAa | 911,624 | 6,863,806 | ||||||
Finmeccanica SpAa | 421,064 | 2,148,682 | ||||||
Intesa Sanpaolo SpA | 12,105,590 | 23,704,213 | ||||||
Luxottica Group SpA | 172,718 | 8,984,579 | ||||||
Mediobanca SpA | 537,572 | 3,335,813 | ||||||
Pirelli & C. SpA | 247,324 | 2,912,265 | ||||||
Prysmian SpA | 212,576 | 4,709,086 | ||||||
Saipem SpA | 275,940 | 6,127,310 | ||||||
Snam SpA | 2,139,046 | 9,984,734 | ||||||
Telecom Italia SpA | 10,479,588 | 7,316,836 | ||||||
Telecom Italia SpA RNC | 6,265,882 | 3,473,426 | ||||||
Tenaris SA | 491,582 | 10,831,424 | ||||||
Terna SpA | 1,601,474 | 6,825,027 | ||||||
UniCredit SpA | 4,501,910 | 25,395,146 | ||||||
Unione di Banche Italiane SpA | 891,184 | 4,289,171 | ||||||
|
| |||||||
259,106,467 | ||||||||
NETHERLANDS — 9.16% |
| |||||||
AEGON NV | 1,848,798 | 13,154,506 | ||||||
Akzo Nobel NV | 248,346 | 14,570,737 | ||||||
ASML Holding NV | 372,008 | 32,527,032 | ||||||
Corio NV | 70,518 | 2,762,586 | ||||||
D.E Master Blenders 1753 NVa | 407,124 | 6,635,266 | ||||||
Delta Lloyd NV | 196,224 | 3,738,807 |
Security | Shares | Value | ||||||
Fugro NV CVA | 73,584 | $ | 4,511,311 | |||||
Heineken Holding NV | 105,266 | 6,337,780 | ||||||
Heineken NV | 240,170 | 16,451,952 | ||||||
ING Groep NV CVAa | 3,977,624 | 43,086,818 | ||||||
Koninklijke Ahold NV | 1,049,594 | 16,684,058 | ||||||
Koninklijke DSM NV | 161,532 | 11,887,314 | ||||||
Koninklijke KPN NVa | 3,320,478 | 9,676,226 | ||||||
Koninklijke Philips Electronics NV | 996,450 | 30,732,569 | ||||||
OCI NVa | 94,024 | 4,463,282 | ||||||
Randstad Holding NV | 128,772 | 5,967,578 | ||||||
Reed Elsevier NV | 724,598 | 13,056,293 | ||||||
Royal Boskalis Westminster NV CVA | 78,694 | 3,107,789 | ||||||
Royal Vopak NV | 73,584 | 4,118,348 | ||||||
TNT Express NV | 369,865 | 3,252,986 | ||||||
Unilever NV CVA | 1,700,608 | 63,740,846 | ||||||
Wolters Kluwer NV | 314,776 | 7,417,188 | ||||||
Ziggo NV | 160,454 | 6,348,298 | ||||||
|
| |||||||
324,229,570 | ||||||||
PORTUGAL — 0.65% |
| |||||||
Banco Espirito Santo SA Registereda | 1,882,524 | 1,970,943 | ||||||
Energias de Portugal SA | 2,137,002 | 7,534,934 | ||||||
Galp Energia SGPS SA Class B | 359,744 | 6,040,956 | ||||||
Jeronimo Martins SGPS SA | 262,654 | 5,087,670 | ||||||
Portugal Telecom SGPS SA Registeredc | 653,058 | 2,460,227 | ||||||
|
| |||||||
23,094,730 | ||||||||
SPAIN — 10.19% |
| |||||||
Abertis Infraestructuras SA | 398,580 | 7,021,584 | ||||||
Acciona SAc | 28,616 | 1,460,835 | ||||||
Actividades de Construcciones y Servicios SA | 159,432 | 4,478,888 | ||||||
Amadeus IT Holding SA Class A | 400,624 | 12,910,745 | ||||||
Banco Bilbao Vizcaya Argentaria SA | 5,762,036 | 54,856,272 | ||||||
Banco de Sabadell SAc | 2,769,620 | 6,369,125 | ||||||
Banco Popular Espanol SAa | 1,333,710 | 6,248,413 | ||||||
Banco Santander SA | 11,589,480 | 81,605,294 | ||||||
Bankia SAa | 4,192,244 | 3,897,165 | ||||||
CaixaBank SA | 1,257,060 | 4,657,742 | ||||||
Distribuidora Internacional de Alimentacion SA | 655,102 | 5,165,629 | ||||||
Enagas SA | 112,520 | 2,548,978 | ||||||
Ferrovial SA | 439,460 | 7,272,374 |
SCHEDULESOF INVESTMENTS | 39 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMU ETF
August 31, 2013
Security | Shares | Value | ||||||
Gas Natural SDG SA | 378,140 | $ | 7,389,481 | |||||
Grifols SA | 158,410 | 6,347,847 | ||||||
Iberdrola SA | 5,035,394 | 26,638,362 | ||||||
Industria de Diseno Textil SA | 227,906 | 30,096,767 | ||||||
International Consolidated Airlines Group SAa | 992,362 | 4,395,348 | ||||||
Mapfre SA | 831,908 | 2,796,136 | ||||||
Red Electrica Corporacion SA | 63,800 | 3,301,552 | ||||||
Repsol SA | 902,426 | 20,889,381 | ||||||
Telefonica SAa | 4,266,850 | 57,809,916 | ||||||
Zardoya Otis SA | 173,001 | 2,543,528 | ||||||
Zardoya Otis SA New | 3,805 | 55,943 | ||||||
|
| |||||||
360,757,305 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $3,705,553,293) |
| 3,459,890,258 | ||||||
PREFERRED STOCKS — 2.08% |
| |||||||
GERMANY — 2.08% |
| |||||||
Bayerische Motoren Werke AG | 56,210 | 4,112,095 | ||||||
Fuchs Petrolub SE | 36,792 | 2,970,023 | ||||||
Henkel AG & Co. KGaA | 186,004 | 17,977,918 | ||||||
Porsche Automobil Holding SE | 157,388 | 13,199,025 | ||||||
RWE AG NVSc | 40,880 | 1,108,005 | ||||||
Volkswagen AG | 150,234 | 34,092,765 | ||||||
|
| |||||||
73,459,831 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $72,425,577) |
| 73,459,831 | ||||||
RIGHTS — 0.00% |
| |||||||
ITALY — 0.00% |
| |||||||
Fiat Industrial SpAa | 712,424 | 348 | ||||||
|
| |||||||
348 | ||||||||
|
| |||||||
TOTAL RIGHTS |
| |||||||
(Cost: $0) |
| 348 | ||||||
SHORT-TERM INVESTMENTS — 1.30% |
| |||||||
MONEY MARKET FUNDS — 1.30% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.15%e,f,g | 37,267,284 | 37,267,284 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.13%e,f,g | 2,366,445 | 2,366,445 |
Security | Shares | Value | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.00%e,f | 6,515,935 | $ | 6,515,935 | |||||
|
| |||||||
46,149,664 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $46,149,664) |
| 46,149,664 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $3,824,128,534) |
| 3,579,500,101 | ||||||
Other Assets, Less Liabilities — (1.12)% |
| (39,520,382 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 3,539,979,719 | |||||
|
|
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 | 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. |
See notes to financial statements.
40 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 99.94% |
| |||||||
ADVERTISING — 1.36% |
| |||||||
JCDecaux SA | 30,846 | $ | 1,031,074 | |||||
Publicis Groupe SA | 82,680 | 6,140,112 | ||||||
|
| |||||||
7,171,186 | ||||||||
AEROSPACE & DEFENSE — 4.98% |
| |||||||
European Aeronautic Defence and Space Co. NV | 269,240 | 15,480,643 | ||||||
Safran SA | 115,858 | 6,418,647 | ||||||
Thales SA | 42,294 | 2,079,064 | ||||||
Zodiac Aerospace | 15,794 | 2,281,485 | ||||||
|
| |||||||
26,259,839 | ||||||||
APPAREL — 4.72% |
| |||||||
Christian Dior SA | 25,228 | 4,312,891 | ||||||
LVMH Moet Hennessy Louis Vuitton SA | 117,448 | 20,527,615 | ||||||
|
| |||||||
24,840,506 | ||||||||
AUTO MANUFACTURERS — 1.20% |
| |||||||
Renault SA | 88,934 | 6,341,874 | ||||||
|
| |||||||
6,341,874 | ||||||||
AUTO PARTS & EQUIPMENT — 1.53% |
| |||||||
Compagnie Generale des Etablissements Michelin Class B | 84,482 | 8,064,100 | ||||||
|
| |||||||
8,064,100 | ||||||||
BANKS — 9.39% |
| |||||||
BNP Paribas SA | 459,722 | 28,742,475 | ||||||
Credit Agricole SAa | 462,584 | 4,663,170 | ||||||
Natixis | 429,618 | 1,846,772 | ||||||
Societe Generale | 324,996 | 14,191,095 | ||||||
|
| |||||||
49,443,512 | ||||||||
BEVERAGES — 2.39% |
| |||||||
Pernod Ricard SA | 98,262 | 11,381,279 | ||||||
Remy Cointreau SA | 11,766 | 1,234,966 | ||||||
|
| |||||||
12,616,245 | ||||||||
BUILDING MATERIALS — 2.83% |
| |||||||
Compagnie de Saint-Gobain | 184,440 | 8,594,780 | ||||||
Imerys SA | 15,794 | 1,026,200 | ||||||
Lafarge SA | 86,496 | 5,269,278 | ||||||
|
| |||||||
14,890,258 | ||||||||
CHEMICALS — 4.15% |
| |||||||
Arkema SA | 29,150 | 2,939,293 | ||||||
L’Air Liquide SA | 144,160 | 18,915,796 | ||||||
|
| |||||||
21,855,089 |
Security | Shares | Value | ||||||
COMMERCIAL SERVICES — 1.85% |
| |||||||
Bureau Veritas SA | 102,396 | $ | 3,086,543 | |||||
Edenred SA | 94,234 | 2,815,663 | ||||||
Sodexo | 43,672 | 3,845,011 | ||||||
|
| |||||||
9,747,217 | ||||||||
COMPUTERS — 1.05% |
| |||||||
Atos SA | 25,758 | 1,908,805 | ||||||
Cap Gemini SA | 66,674 | 3,643,254 | ||||||
|
| |||||||
5,552,059 | ||||||||
COSMETICS & PERSONAL CARE — 3.54% |
| |||||||
L’Oreal SA | 111,936 | 18,634,352 | ||||||
|
| |||||||
18,634,352 | ||||||||
ELECTRIC — 3.11% |
| |||||||
Electricite de France SA | 111,300 | 3,111,316 | ||||||
GDF Suez | 614,164 | 13,281,323 | ||||||
|
| |||||||
16,392,639 | ||||||||
ELECTRICAL COMPONENTS & EQUIPMENT — 4.71% |
| |||||||
Legrand SA | 121,794 | 6,162,932 | ||||||
Schneider Electric SA | 244,118 | 18,637,665 | ||||||
|
| |||||||
24,800,597 | ||||||||
ELECTRONICS — 0.42% |
| |||||||
Rexel SA | 96,672 | 2,218,008 | ||||||
|
| |||||||
2,218,008 | ||||||||
ENGINEERING & CONSTRUCTION — 2.88% |
| |||||||
Aeroports de Paris | 13,780 | 1,341,878 | ||||||
Bouygues SA | 88,616 | 2,765,233 | ||||||
Vinci SA | 214,756 | 11,063,737 | ||||||
|
| |||||||
15,170,848 | ||||||||
FOOD — 5.85% |
| |||||||
Carrefour SA | 278,992 | 8,713,212 | ||||||
Casino Guichard-Perrachon SA | 26,076 | 2,462,225 | ||||||
Danone SA | 264,576 | 19,655,333 | ||||||
|
| |||||||
30,830,770 | ||||||||
HEALTH CARE — PRODUCTS — 1.93% |
| |||||||
Essilor International SA | 94,446 | 10,173,388 | ||||||
|
| |||||||
10,173,388 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 0.51% |
| |||||||
Eurazeo | 14,416 | 891,995 | ||||||
Wendel | 14,946 | 1,815,679 | ||||||
|
| |||||||
2,707,674 | ||||||||
HOUSEHOLD PRODUCTS & WARES — 0.29% |
| |||||||
Societe BIC SA | 13,462 | 1,543,982 | ||||||
|
| |||||||
1,543,982 |
SCHEDULESOF INVESTMENTS | 41 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI FRANCE ETF
August 31, 2013
Security | Shares | Value | ||||||
INSURANCE — 4.11% |
| |||||||
AXA SA | 830,192 | $ | 18,045,986 | |||||
CNP Assurances SA | 77,910 | 1,374,556 | ||||||
SCOR SE | 71,232 | 2,223,711 | ||||||
|
| |||||||
21,644,253 | ||||||||
INTERNET — 0.49% |
| |||||||
Iliad SA | 10,706 | 2,562,223 | ||||||
|
| |||||||
2,562,223 | ||||||||
IRON & STEEL — 1.12% |
| |||||||
ArcelorMittal | 462,266 | 5,920,501 | ||||||
|
| |||||||
5,920,501 | ||||||||
LODGING — 0.53% |
| |||||||
Accor SA | 73,776 | 2,782,724 | ||||||
|
| |||||||
2,782,724 | ||||||||
MACHINERY — 0.67% |
| |||||||
ALSTOM | 99,958 | 3,509,298 | ||||||
|
| |||||||
3,509,298 | ||||||||
MEDIA — 0.30% |
| |||||||
Lagardere SCA | 51,728 | 1,571,184 | ||||||
|
| |||||||
1,571,184 | ||||||||
METAL FABRICATE & HARDWARE — 0.56% |
| |||||||
Vallourec SA | 49,184 | 2,943,724 | ||||||
|
| |||||||
2,943,724 | ||||||||
OIL & GAS — 10.37% |
| |||||||
Total SA | 988,874 | 54,654,202 | ||||||
|
| |||||||
54,654,202 | ||||||||
OIL & GAS SERVICES — 1.37% |
| |||||||
Compagnie Generale de Geophysique-Veritasa | 73,564 | 1,742,147 | ||||||
Technip SA | 47,170 | 5,473,457 | ||||||
|
| |||||||
7,215,604 | ||||||||
PHARMACEUTICALS — 10.03% |
| |||||||
Sanofi | 551,306 | 52,842,154 | ||||||
|
| |||||||
52,842,154 | ||||||||
REAL ESTATE INVESTMENT TRUSTS — 2.95% |
| |||||||
Fonciere des Regions | 13,462 | 1,038,611 | ||||||
Gecina SA | 10,176 | 1,207,761 | ||||||
Icade | 16,536 | 1,437,562 | ||||||
Klepierre | 46,110 | 1,824,628 | ||||||
Unibail-Rodamco SE | 44,626 | 10,009,339 | ||||||
|
| |||||||
15,517,901 |
Security | Shares | Value | ||||||
RETAIL — 1.50% |
| |||||||
Kering SA | 34,980 | $ | 7,882,700 | |||||
|
| |||||||
7,882,700 | ||||||||
SEMICONDUCTORS — 0.45% |
| |||||||
STMicroelectronics NV | 294,786 | 2,348,555 | ||||||
|
| |||||||
2,348,555 | ||||||||
SOFTWARE — 0.70% |
| |||||||
Dassault Systemes SA | 28,938 | 3,687,937 | ||||||
|
| |||||||
3,687,937 | ||||||||
TELECOMMUNICATIONS — 4.92% |
| |||||||
Eutelsat Communications SA | 66,356 | 1,980,933 | ||||||
Orange | 858,176 | 8,686,093 | ||||||
SES SA Class A FDR | 140,238 | 4,110,724 | ||||||
Vivendi SA | 551,836 | 11,165,805 | ||||||
|
| |||||||
25,943,555 | ||||||||
TRANSPORTATION — 0.36% |
| |||||||
Groupe Eurotunnel SA Registered | 254,400 | 1,885,910 | ||||||
|
| |||||||
1,885,910 | ||||||||
WATER — 0.82% |
| |||||||
Suez Environnement SA | 129,850 | 1,930,508 | ||||||
Veolia Environnementb | 157,092 | 2,414,235 | ||||||
|
| |||||||
4,344,743 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $577,719,146) |
| 526,511,311 | ||||||
SHORT-TERM INVESTMENTS — 0.26% |
| |||||||
MONEY MARKET FUNDS — 0.26% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.15%c,d,e | 1,277,579 | 1,277,579 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.13%c,d,e | 81,125 | 81,125 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.00%c,d | 31,161 | 31,161 | ||||||
|
| |||||||
1,389,865 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $1,389,865) |
| 1,389,865 | ||||||
|
|
42 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI FRANCE ETF
August 31, 2013
Value | ||||||
TOTAL INVESTMENTS | ||||||
(Cost: $579,109,011) | $ | 527,901,176 | ||||
Other Assets, Less Liabilities — (0.20)% | (1,061,809 | ) | ||||
|
| |||||
NET ASSETS — 100.00% | $ | 526,839,367 | ||||
|
|
FDR — Fiduciary Depositary Receipts
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 5. |
c | Affiliated issuer. See Note 2. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 43 |
Table of Contents
Schedule of Investments
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 92.45% |
| |||||||
AIRLINES — 0.40% |
| |||||||
Deutsche Lufthansa AG Registereda | 1,050,804 | $ | 18,712,397 | |||||
|
| |||||||
18,712,397 | ||||||||
APPAREL — 2.54% |
| |||||||
Adidas AG | 955,662 | 100,810,886 | ||||||
Hugo Boss AG | 144,834 | 17,602,455 | ||||||
|
| |||||||
118,413,341 | ||||||||
AUTO MANUFACTURERS — 10.16% |
| |||||||
Bayerische Motoren Werke AG | 1,512,576 | 142,186,692 | ||||||
Daimler AG Registered | 4,394,106 | 300,828,059 | ||||||
Volkswagen AG | 134,532 | 29,837,657 | ||||||
|
| |||||||
472,852,408 | ||||||||
AUTO PARTS & EQUIPMENT — 1.65% |
| |||||||
Continental AG | 510,252 | 76,835,859 | ||||||
|
| |||||||
76,835,859 | ||||||||
BANKS — 5.42% |
| |||||||
Commerzbank AGa | 4,420,164 | 51,266,862 | ||||||
Deutsche Bank AG Registered | 4,657,110 | 201,174,772 | ||||||
|
| |||||||
252,441,634 | ||||||||
BUILDING MATERIALS — 0.96% |
| |||||||
HeidelbergCement AG | 642,360 | 44,510,691 | ||||||
|
| |||||||
44,510,691 | ||||||||
CHEMICALS — 13.04% |
| |||||||
BASF SE | 4,195,338 | 365,829,402 | ||||||
Brenntag AG | 235,128 | 35,654,579 | ||||||
K+S AG Registeredb | 787,194 | 19,062,762 | ||||||
Lanxess AG | 379,962 | 24,432,141 | ||||||
Linde AG | 845,976 | 162,305,847 | ||||||
|
| |||||||
607,284,731 | ||||||||
COSMETICS & PERSONAL CARE — 0.85% |
| |||||||
Beiersdorf AG | 460,560 | 39,595,601 | ||||||
|
| |||||||
39,595,601 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 1.33% |
| |||||||
Deutsche Boerse AG | 881,730 | 61,678,547 | ||||||
|
| |||||||
61,678,547 | ||||||||
ELECTRIC — 4.11% |
| |||||||
E.ON SE | 8,225,844 | 129,942,260 | ||||||
RWE AG | 2,235,534 | 61,298,992 | ||||||
|
| |||||||
191,241,252 |
Security | Shares | Value | ||||||
ELECTRICAL COMPONENTS & EQUIPMENT — 0.33% |
| |||||||
Osram Licht AGa | 381,780 | $ | 15,248,446 | |||||
|
| |||||||
15,248,446 | ||||||||
ENGINEERING & CONSTRUCTION — 0.45% |
| |||||||
Fraport AG | 168,468 | 10,849,412 | ||||||
Hochtief AG | 140,592 | 9,951,447 | ||||||
|
| |||||||
20,800,859 | ||||||||
FOOD — 0.72% |
| |||||||
METRO AG | 591,456 | 21,665,455 | ||||||
Suedzucker AG | 373,296 | 12,017,751 | ||||||
|
| |||||||
33,683,206 | ||||||||
HEALTH CARE — PRODUCTS — 1.94% |
| |||||||
Fresenius SE & Co. KGaA | 570,246 | 68,455,386 | ||||||
QIAGEN NVa | 1,081,104 | 21,668,268 | ||||||
|
| |||||||
90,123,654 | ||||||||
HEALTH CARE — SERVICES — 1.37% |
| |||||||
Fresenius Medical Care AG & Co. KGaA | 983,538 | 63,787,701 | ||||||
|
| |||||||
63,787,701 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 0.72% |
| |||||||
GEA Group AG | 835,674 | 33,707,729 | ||||||
|
| |||||||
33,707,729 | ||||||||
HOUSEHOLD PRODUCTS & WARES — 1.03% |
| |||||||
Henkel AG & Co. KGaA | 593,274 | 48,118,732 | ||||||
|
| |||||||
48,118,732 | ||||||||
INSURANCE — 10.01% |
| |||||||
Allianz SE Registered | 2,082,822 | 297,710,784 | ||||||
Hannover Rueck SE Registered | 275,124 | 19,151,080 | ||||||
Muenchener Rueckversicherungs-Gesellschaft AG Registered | 819,312 | 148,979,568 | ||||||
|
| |||||||
465,841,432 | ||||||||
INTERNET — 0.36% |
| |||||||
United Internet AG Registered | 487,830 | 16,814,626 | ||||||
|
| |||||||
16,814,626 | ||||||||
IRON & STEEL — 0.79% |
| |||||||
ThyssenKrupp AGa | 1,762,248 | 36,958,457 | ||||||
|
| |||||||
36,958,457 | ||||||||
MACHINERY — 0.40% |
| |||||||
MAN SE | 161,196 | 18,398,594 | ||||||
|
| |||||||
18,398,594 | ||||||||
MANUFACTURING — 8.22% |
| |||||||
Siemens AG Registered | 3,621,456 | 382,449,974 | ||||||
|
| |||||||
382,449,974 |
44 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI GERMANY ETF
August 31, 2013
Security | Shares | Value | ||||||
MEDIA — 1.63% |
| |||||||
Axel Springer AG | 180,588 | $ | 9,001,063 | |||||
Kabel Deutschland Holding AG | 404,202 | 45,783,053 | ||||||
ProSiebenSat.1 Media AG Registered | 499,344 | 21,119,306 | ||||||
|
| |||||||
75,903,422 | ||||||||
PHARMACEUTICALS — 10.12% |
| |||||||
Bayer AG Registered | 3,777,198 | 418,570,796 | ||||||
Celesio AG | 387,840 | 8,064,871 | ||||||
Merck KGaA | 295,122 | 44,732,553 | ||||||
|
| |||||||
471,368,220 | ||||||||
SEMICONDUCTORS — 0.96% |
| |||||||
Infineon Technologies AG | 4,936,476 | 44,653,373 | ||||||
|
| |||||||
44,653,373 | ||||||||
SOFTWARE — 6.67% |
| |||||||
SAP AG | 4,208,670 | 310,386,499 | ||||||
|
| |||||||
310,386,499 | ||||||||
TELECOMMUNICATIONS — 3.71% |
| |||||||
Deutsche Telekom AG Registered | 12,830,232 | 163,968,734 | ||||||
Telefonica Deutschland Holding AGc | 1,273,206 | 8,876,078 | ||||||
|
| |||||||
172,844,812 | ||||||||
TRANSPORTATION — 2.56% |
| |||||||
Deutsche Post AG Registered | 4,142,010 | 119,391,781 | ||||||
|
| |||||||
119,391,781 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $4,483,535,779) |
| 4,304,047,978 | ||||||
PREFERRED STOCKS — 6.94% |
| |||||||
AUTO MANUFACTURERS — 4.87% |
| |||||||
Bayerische Motoren Werke AG | 246,036 | 17,998,994 | ||||||
Porsche Automobil Holding SE | 699,324 | 58,647,388 | ||||||
Volkswagen AG | 661,146 | 150,034,583 | ||||||
|
| |||||||
226,680,965 | ||||||||
ELECTRIC — 0.10% |
| |||||||
RWE AG NVSb | 177,558 | 4,812,501 | ||||||
|
| |||||||
4,812,501 | ||||||||
HOUSEHOLD PRODUCTS & WARES — 1.69% |
| |||||||
Henkel AG & Co. KGaA | 813,858 | 78,662,137 | ||||||
|
| |||||||
78,662,137 |
Security | Shares | Value | ||||||
OIL & GAS — 0.28% |
| |||||||
Fuchs Petrolub SE | 161,802 | $ | 13,061,418 | |||||
|
| |||||||
13,061,418 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $289,076,865) |
| 323,217,021 | ||||||
SHORT-TERM INVESTMENTS — 0.57% |
| |||||||
MONEY MARKET FUNDS — 0.57% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.15%d,e,f | 23,168,443 | 23,168,443 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
0.13%d,e,f | 1,471,179 | 1,471,179 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.00%d,e | 1,959,179 | 1,959,179 | ||||||
|
| |||||||
26,598,801 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $26,598,801) |
| 26,598,801 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $4,799,211,445) |
| 4,653,863,800 | ||||||
Other Assets, Less Liabilities — 0.04% |
| 2,010,812 | ||||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 4,655,874,612 | |||||
|
|
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 | This security may be resold to qualified institutional buyers under Rule 144A 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. |
Financial futures contracts purchased as of August 31, 2013 were as follows:
Number of Contracts | Issue (Expiration) | Exchange | Notional Value | Net Unrealized Appreciation (Depreciation) | ||||||
103 | DAX Index (Sept. 2013) | Eurex | $27,562,123 | $(383,449) | ||||||
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 45 |
Table of Contents
Schedule of Investments
iSHARES® MSCI ITALY CAPPED ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 100.16% |
| |||||||
AEROSPACE & DEFENSE — 2.36% |
| |||||||
Finmeccanica SpAa,b | 3,321,084 | $ | 16,947,435 | |||||
|
| |||||||
16,947,435 | ||||||||
AUTO MANUFACTURERS — 8.61% |
| |||||||
Fiat Industrial SpA | 2,611,562 | 31,216,289 | ||||||
Fiat SpAa | 4,053,816 | 30,522,020 | ||||||
|
| |||||||
61,738,309 | ||||||||
AUTO PARTS & EQUIPMENT — 2.74% |
| |||||||
Pirelli & C. SpA | 1,667,496 | 19,634,931 | ||||||
|
| |||||||
19,634,931 | ||||||||
BANKS — 20.78% |
| |||||||
Banca Monte dei Paschi di Siena SpAa,b | 59,577,114 | 17,172,865 | ||||||
Intesa Sanpaolo SpA | 19,416,300 | 38,019,470 | ||||||
Mediobanca SpA | 3,393,918 | 21,060,389 | ||||||
UniCredit SpA | 8,526,336 | 48,096,819 | ||||||
Unione di Banche Italiane SpA | 5,130,588 | 24,692,959 | ||||||
|
| |||||||
149,042,502 | ||||||||
COMMERCIAL SERVICES — 4.03% |
| |||||||
Atlantia SpA | 1,605,642 | 28,920,949 | ||||||
|
| |||||||
28,920,949 | ||||||||
ELECTRIC — 9.63% |
| |||||||
Enel SpA | 12,106,914 | 39,942,376 | ||||||
Terna SpA | 6,836,880 | 29,136,839 | ||||||
|
| |||||||
69,079,215 | ||||||||
ELECTRICAL COMPONENTS & EQUIPMENT — 3.45% |
| |||||||
Prysmian SpA | 1,118,130 | 24,769,356 | ||||||
|
| |||||||
24,769,356 | ||||||||
ENERGY — ALTERNATE SOURCES — 0.74% |
| |||||||
Enel Green Power SpA | 2,501,976 | 5,268,672 | ||||||
|
| |||||||
5,268,672 | ||||||||
GAS — 4.54% |
| |||||||
Snam SpA | 6,970,470 | 32,537,071 | ||||||
|
| |||||||
32,537,071 | ||||||||
HEALTH CARE — PRODUCTS — 4.44% |
| |||||||
Luxottica Group SpA | 612,684 | 31,871,072 | ||||||
|
| |||||||
31,871,072 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 2.70% |
| |||||||
Exor SpA | 568,398 | 19,366,814 | ||||||
|
| |||||||
19,366,814 |
Security | Shares | Value | ||||||
INSURANCE — 5.88% |
| |||||||
Assicurazioni Generali SpA | 2,204,418 | $ | 42,147,816 | |||||
|
| |||||||
42,147,816 | ||||||||
METAL FABRICATE & HARDWARE — 4.42% |
| |||||||
Tenaris SA | 1,438,380 | 31,692,990 | ||||||
|
| |||||||
31,692,990 | ||||||||
OIL & GAS — 20.06% |
| |||||||
Eni SpA | 6,312,036 | 143,822,335 | ||||||
|
| |||||||
143,822,335 | ||||||||
OIL & GAS SERVICES — 0.78% |
| |||||||
Saipem SpA | 251,442 | 5,583,327 | ||||||
|
| |||||||
5,583,327 | ||||||||
TELECOMMUNICATIONS — 5.00% |
| |||||||
Telecom Italia SpA | 33,278,916 | 23,235,299 | ||||||
Telecom Italia SpA RNC | 22,734,822 | 12,602,810 | ||||||
|
| |||||||
35,838,109 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $713,429,648) |
| 718,260,903 | ||||||
RIGHTS — 0.00% |
| |||||||
AUTO MANUFACTURERS — 0.00% |
| |||||||
Fiat Industrial SpAa | 2,759,106 | 1,346 | ||||||
|
| |||||||
1,346 | ||||||||
|
| |||||||
TOTAL RIGHTS |
| |||||||
(Cost: $0) |
| 1,346 | ||||||
SHORT-TERM INVESTMENTS — 4.04% |
| |||||||
MONEY MARKET FUNDS — 4.04% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.15%c,d,e | 27,168,531 | 27,168,531 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.13%c,d,e | 1,725,182 | 1,725,182 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.00%c,d | 113,300 | 113,300 | ||||||
|
| |||||||
29,007,013 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $29,007,013) |
| 29,007,013 | ||||||
|
|
46 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI ITALY CAPPED ETF
August 31, 2013
Value | ||||||
TOTAL INVESTMENTS | ||||||
(Cost: $742,436,661) | $ | 747,269,262 | ||||
Other Assets, Less Liabilities — (4.20)% | (30,147,523 | ) | ||||
|
| |||||
NET ASSETS — 100.00% | $ | 717,121,739 | ||||
|
|
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 | 47 |
Table of Contents
Schedule of Investments
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 99.65% |
| |||||||
BANKS — 0.00% |
| |||||||
SNS REAAL NVa,b,c | 68,952 | $ | 1 | |||||
|
| |||||||
1 | ||||||||
BEVERAGES — 8.21% |
| |||||||
D.E Master Blenders 1753 NVa | 307,944 | 5,018,840 | ||||||
Heineken Holding NV | 73,350 | 4,416,204 | ||||||
Heineken NV | 166,050 | 11,374,638 | ||||||
|
| |||||||
20,809,682 | ||||||||
CHEMICALS — 8.47% |
| |||||||
Akzo Nobel NV | 172,350 | 10,111,967 | ||||||
Koninklijke DSM NV | 112,139 | 8,252,429 | ||||||
OCI NVa | 65,250 | 3,097,392 | ||||||
|
| |||||||
21,461,788 | ||||||||
COMMERCIAL SERVICES — 1.90% |
| |||||||
Brunel International NV | 6,975 | 353,680 | ||||||
Randstad Holding NV | 89,100 | 4,129,090 | ||||||
USG People NV | 46,125 | 334,512 | ||||||
|
| |||||||
4,817,282 | ||||||||
COMPUTERS — 2.60% |
| |||||||
Gemalto NVb | 57,375 | 6,587,253 | ||||||
|
| |||||||
6,587,253 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 0.13% |
| |||||||
BinckBank NV | 37,575 | 327,006 | ||||||
|
| |||||||
327,006 | ||||||||
ELECTRICAL COMPONENTS & EQUIPMENT — 0.26% |
| |||||||
TKH Group NV | 23,625 | 667,119 | ||||||
|
| |||||||
667,119 | ||||||||
ELECTRONICS — 8.39% |
| |||||||
Koninklijke Philips Electronics NV | 688,950 | 21,248,636 | ||||||
|
| |||||||
21,248,636 | ||||||||
ENGINEERING & CONSTRUCTION — 1.85% |
| |||||||
Arcadis NV | 43,200 | 1,068,066 | ||||||
Grontmij NVa | 43,425 | 184,607 | ||||||
Koninklijke BAM Groep NVb | 162,000 | 659,851 | ||||||
Royal Boskalis Westminster NV CVA | 54,675 | 2,159,229 | ||||||
Royal Imtech NVa,b | 249,525 | 605,404 | ||||||
|
| |||||||
4,677,157 | ||||||||
FOOD — 23.58% |
| |||||||
Amsterdam Commodities NV | 11,700 | 240,362 | ||||||
CSM NV CVA | 50,850 | 1,200,880 | ||||||
Koninklijke Ahold NV | 730,575 | 11,613,019 |
Security | Shares | Value | ||||||
Koninklijke Wessanen NV | 57,825 | $ | 212,275 | |||||
Nutreco NV | 51,975 | 2,439,819 | ||||||
Unilever NV CVA | 1,175,175 | 44,046,981 | ||||||
|
| |||||||
59,753,336 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 0.37% |
| |||||||
Tetragon Financial Group Ltd. | 93,150 | 950,130 | ||||||
|
| |||||||
950,130 | ||||||||
INSURANCE — 16.39% |
| |||||||
AEGON NV | 1,277,775 | 9,091,582 | ||||||
Delta Lloyd NV | 135,225 | 2,576,547 | ||||||
ING Groep NV CVAa | 2,756,475 | 29,858,965 | ||||||
|
| |||||||
41,527,094 | ||||||||
LEISURE TIME — 0.10% |
| |||||||
Accell Group NV | 14,175 | 265,228 | ||||||
|
| |||||||
265,228 | ||||||||
MACHINERY — 0.08% |
| |||||||
Kendrion NV | 7,425 | 209,519 | ||||||
|
| |||||||
209,519 | ||||||||
MANUFACTURING — 0.84% |
| |||||||
Aalberts Industries NV | 67,500 | 1,677,754 | ||||||
Koninklijke Ten Cate NV | 18,225 | 441,579 | ||||||
|
| |||||||
2,119,333 | ||||||||
MEDIA — 5.61% |
| |||||||
Reed Elsevier NV | 503,100 | 9,065,194 | ||||||
Wolters Kluwer NV | 218,700 | 5,153,312 | ||||||
|
| |||||||
14,218,506 | ||||||||
METAL FABRICATE & HARDWARE — 0.07% |
| |||||||
AMG Advanced Metallurgical Group NVa | 19,800 | 173,463 | ||||||
|
| |||||||
173,463 | ||||||||
OIL & GAS SERVICES — 2.27% |
| |||||||
Fugro NV CVA | 50,625 | 3,103,733 | ||||||
SBM Offshore NVa | 134,775 | 2,641,724 | ||||||
|
| |||||||
5,745,457 | ||||||||
REAL ESTATE INVESTMENT TRUSTS — 1.84% |
| |||||||
Corio NV | 48,600 | 1,903,935 | ||||||
Eurocommercial Properties NV | 25,200 | 938,711 | ||||||
Nieuwe Steen Investments NV | 39,375 | 265,726 | ||||||
VastNed Retail NV | 13,050 | 541,958 | ||||||
Wereldhave NV | 15,300 | 1,016,395 | ||||||
|
| |||||||
4,666,725 | ||||||||
SEMICONDUCTORS — 9.41% |
| |||||||
ASM International NV | 36,450 | 1,137,170 |
48 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI NETHERLANDS ETF
August 31, 2013
Security | Shares | Value | ||||||
ASML Holding NV | 257,625 | $ | 22,525,797 | |||||
BE Semiconductor Industries NV | 17,100 | 182,617 | ||||||
|
| |||||||
23,845,584 | ||||||||
SOFTWARE — 0.43% |
| |||||||
TomTom NVa,b | 72,000 | 439,663 | ||||||
Unit4 NV | 18,450 | 644,697 | ||||||
|
| |||||||
1,084,360 | ||||||||
TELECOMMUNICATIONS — 4.39% |
| |||||||
Koninklijke KPN NVa | 2,310,300 | 6,732,460 | ||||||
Ziggo NV | 110,700 | 4,379,801 | ||||||
|
| |||||||
11,112,261 | ||||||||
TRANSPORTATION — 2.46% |
| |||||||
PostNL NVa | 316,125 | 1,112,969 | ||||||
Royal Vopak NV | 51,075 | 2,858,565 | ||||||
TNT Express NV | 257,154 | 2,261,686 | ||||||
|
| |||||||
6,233,220 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $261,467,665) |
| 252,500,140 | ||||||
SHORT-TERM INVESTMENTS — 3.02% |
| |||||||
MONEY MARKET FUNDS — 3.02% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.15%d,e,f | 6,754,643 | 6,754,643 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.13%d,e,f | 428,915 | 428,915 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.00%d,e | 481,006 | 481,006 | ||||||
|
| |||||||
7,664,564 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $7,664,564) |
| 7,664,564 | ||||||
|
|
Value | ||||||
TOTAL INVESTMENTS | ||||||
(Cost: $269,132,229) | $ | 260,164,704 | ||||
Other Assets, Less Liabilities — (2.67)% | (6,774,802 | ) | ||||
|
| |||||
NET ASSETS — 100.00% | $ | 253,389,902 | ||||
|
|
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 | 49 |
Table of Contents
Schedule of Investments
iSHARES® MSCI SPAIN CAPPED ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 99.56% |
| |||||||
AIRLINES — 2.22% |
| |||||||
International Consolidated Airlines Group SAa | 2,092,605 | $ | 9,268,520 | |||||
|
| |||||||
9,268,520 | ||||||||
BANKS — 40.84% |
| |||||||
Banco Bilbao Vizcaya Argentaria SA | 5,344,149 | 50,877,866 | ||||||
Banco de Sabadell SAb | 5,055,558 | 11,625,957 | ||||||
Banco Popular Espanol SAa | 2,413,953 | 11,309,337 | ||||||
Banco Santander SA | 11,633,676 | 81,916,493 | ||||||
Bankia SAa,b | 7,042,755 | 6,547,037 | ||||||
CaixaBank SA | 2,247,606 | 8,327,979 | ||||||
|
| |||||||
170,604,669 | ||||||||
COMMERCIAL SERVICES — 2.99% |
| |||||||
Abertis Infraestructuras SA | 708,027 | 12,472,957 | ||||||
|
| |||||||
12,472,957 | ||||||||
ELECTRIC — 6.41% |
| |||||||
Iberdrola SA | 3,608,211 | 19,088,244 | ||||||
Red Electrica Corporacion SA | 148,992 | 7,710,107 | ||||||
|
| |||||||
26,798,351 | ||||||||
ENGINEERING & CONSTRUCTION — 6.61% |
| |||||||
Acciona SAb | 101,565 | 5,184,853 | ||||||
Actividades de Construcciones y Servicios SA | 337,818 | 9,490,246 | ||||||
Ferrovial SA | 781,227 | 12,928,082 | ||||||
|
| |||||||
27,603,181 | ||||||||
FOOD — 2.51% |
| |||||||
Distribuidora Internacional de Alimentacion SA | 1,330,227 | 10,489,145 | ||||||
|
| |||||||
10,489,145 | ||||||||
GAS — 4.61% |
| |||||||
Enagas SA | 284,288 | 6,440,133 | ||||||
Gas Natural SDG SA | 655,872 | 12,816,824 | ||||||
|
| |||||||
19,256,957 | ||||||||
INSURANCE — 1.79% |
| |||||||
Mapfre SA | 2,221,803 | 7,467,728 | ||||||
|
| |||||||
7,467,728 | ||||||||
MACHINERY — 1.85% |
| |||||||
Zardoya Otis SAb | 512,034 | 7,528,125 | ||||||
Zardoya Otis SA New | 15,109 | 222,138 | ||||||
|
| |||||||
7,750,263 |
Security | Shares | Value | ||||||
OIL & GAS — 4.69% |
| |||||||
Repsol SA | 847,107 | $ | 19,608,855 | |||||
|
| |||||||
19,608,855 | ||||||||
PHARMACEUTICALS — 2.87% |
| |||||||
Grifols SA | 299,754 | 12,011,820 | ||||||
|
| |||||||
12,011,820 | ||||||||
RETAIL — 4.64% |
| |||||||
Industria de Diseno Textil SA | 146,766 | 19,381,596 | ||||||
|
| |||||||
19,381,596 | ||||||||
SOFTWARE — 4.38% |
| |||||||
Amadeus IT Holding SA Class A | 568,398 | 18,317,528 | ||||||
|
| |||||||
18,317,528 | ||||||||
TELECOMMUNICATIONS — 13.15% |
| |||||||
Telefonica SAa | 4,053,633 | 54,921,120 | ||||||
|
| |||||||
54,921,120 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $448,694,406) |
| 415,952,690 | ||||||
SHORT-TERM INVESTMENTS — 2.49% |
| |||||||
MONEY MARKET FUNDS — 2.49% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.15%c,d,e | 9,312,495 | 9,312,495 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.13%c,d,e | 591,337 | 591,337 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.00%c,d | 500,719 | 500,719 | ||||||
|
| |||||||
10,404,551 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $10,404,551) |
| 10,404,551 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $459,098,957) |
| 426,357,241 | ||||||
Other Assets, Less Liabilities — (2.05)% |
| (8,579,360 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 417,777,881 | |||||
|
|
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.
50 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 99.97% |
| |||||||
AGRICULTURE — 1.84% |
| |||||||
Swedish Match AB | 229,327 | $ | 7,994,135 | |||||
|
| |||||||
7,994,135 | ||||||||
AUTO MANUFACTURERS — 7.44% |
| |||||||
Scania AB Class B | 368,878 | 7,362,945 | ||||||
Volvo AB Class B | 1,731,808 | 24,914,723 | ||||||
|
| |||||||
32,277,668 | ||||||||
BANKS — 23.41% |
| |||||||
Nordea Bank AB | 3,261,439 | 37,905,142 | ||||||
Skandinaviska Enskilda Banken AB Class A | 1,764,750 | 18,091,070 | ||||||
Svenska Handelsbanken AB Class A | 576,304 | 24,690,744 | ||||||
Swedbank AB Class A | 925,996 | 20,924,414 | ||||||
|
| |||||||
101,611,370 | ||||||||
COMMERCIAL SERVICES — 0.87% |
| |||||||
Securitas AB Class B | 360,552 | 3,793,912 | ||||||
|
| |||||||
3,793,912 | ||||||||
ENGINEERING & CONSTRUCTION — 1.79% |
| |||||||
Skanska AB Class B | 434,762 | 7,774,192 | ||||||
| �� | |||||||
7,774,192 | ||||||||
FOREST PRODUCTS & PAPER — 3.74% |
| |||||||
Svenska Cellulosa AB Class B | 665,537 | 16,231,998 | ||||||
|
| |||||||
16,231,998 | ||||||||
HAND & MACHINE TOOLS — 3.76% |
| |||||||
Sandvik AB | 1,222,474 | 16,325,681 | ||||||
|
| |||||||
16,325,681 | ||||||||
HEALTH CARE — PRODUCTS — 3.32% |
| |||||||
Elekta AB Class B | 418,291 | 6,572,276 | ||||||
Getinge AB Class B | 227,698 | 7,827,585 | ||||||
|
| |||||||
14,399,861 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 6.38% |
| |||||||
Industrivarden AB Class C | 151,678 | 2,609,406 | ||||||
Investment AB Kinnevik Class B | 256,658 | 8,003,466 | ||||||
Investor AB Class B | 524,719 | 15,097,780 | ||||||
Ratos AB Class B | 226,069 | 1,968,438 | ||||||
|
| |||||||
27,679,090 | ||||||||
HOME FURNISHINGS — 1.68% |
| |||||||
Electrolux AB Class B | 275,663 | 7,279,698 | ||||||
|
| |||||||
7,279,698 |
Security | Shares | Value | ||||||
HOUSEHOLD PRODUCTS & WARES — 0.67% |
| |||||||
Husqvarna AB Class B | 466,075 | $ | 2,930,631 | |||||
|
| |||||||
2,930,631 | ||||||||
MACHINERY — 9.08% |
| |||||||
Atlas Copco AB Class A | 760,019 | 20,505,623 | ||||||
Atlas Copco AB Class B | 453,224 | 11,108,448 | ||||||
Hexagon AB Class B | 271,500 | 7,783,261 | ||||||
|
| |||||||
39,397,332 | ||||||||
MANUFACTURING — 1.79% |
| |||||||
Alfa Laval AB | 359,647 | 7,758,404 | ||||||
|
| |||||||
7,758,404 | ||||||||
METAL FABRICATE & HARDWARE — 6.48% |
| |||||||
Assa Abloy AB Class B | 381,367 | 16,212,614 | ||||||
SKF AB Class B | 449,785 | 11,891,456 | ||||||
|
| |||||||
28,104,070 | ||||||||
MINING — 1.06% |
| |||||||
Boliden AB | 315,483 | 4,598,115 | ||||||
|
| |||||||
4,598,115 | ||||||||
OIL & GAS — 1.25% |
| |||||||
Lundin Petroleum ABa | 252,857 | 5,412,800 | ||||||
|
| |||||||
5,412,800 | ||||||||
RETAIL — 9.14% |
| |||||||
Hennes & Mauritz AB Class B | 1,080,932 | 39,650,647 | ||||||
|
| |||||||
39,650,647 | ||||||||
TELECOMMUNICATIONS — 16.27% |
| |||||||
Millicom International Cellular SA SDR | 75,296 | 6,102,491 | ||||||
Tele2 AB Class B | 359,828 | 4,515,365 | ||||||
Telefonaktiebolaget LM Ericsson Class B | 3,463,435 | 40,644,093 | ||||||
TeliaSonera AB | 2,708,665 | 19,365,823 | ||||||
|
| |||||||
70,627,772 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $428,248,534) |
| 433,847,376 | ||||||
SHORT-TERM INVESTMENTS — 0.00% |
| |||||||
MONEY MARKET FUNDS — 0.00% |
| |||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.00%b,c | 14,515 | 14,515 | ||||||
|
| |||||||
14,515 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $14,515) |
| 14,515 | ||||||
|
|
SCHEDULESOF INVESTMENTS | 51 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SWEDEN ETF
August 31, 2013
Value | ||||||
TOTAL INVESTMENTS | ||||||
(Cost: $428,263,049) | $ | 433,861,891 | ||||
Other Assets, Less Liabilities — 0.03% | 144,004 | |||||
|
| |||||
NET ASSETS — 100.00% | $ | 434,005,895 | ||||
|
|
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.
52 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI SWITZERLAND CAPPED ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 99.42% |
| |||||||
BANKS — 9.14% |
| |||||||
Banque Cantonale Vaudoise Registered | 7,134 | $ | 3,814,134 | |||||
Credit Suisse Group AG Registered | 1,341,438 | 38,585,765 | ||||||
UBS AG Registereda | 2,077,962 | 40,159,669 | ||||||
|
| |||||||
82,559,568 | ||||||||
BUILDING MATERIALS — 3.75% |
| |||||||
Geberit AG Registered | 43,542 | 10,572,618 | ||||||
Holcim Ltd. Registereda | 231,732 | 15,694,847 | ||||||
Sika AG Bearer | 2,762 | 7,547,808 | ||||||
|
| |||||||
33,815,273 | ||||||||
CHEMICALS — 6.21% |
| |||||||
EMS-Chemie Holding AG Registered | 14,760 | 4,713,417 | ||||||
Givaudan SA Registereda | 9,002 | 12,097,282 | ||||||
Lonza Group AG Registereda | 81,180 | 5,737,626 | ||||||
Syngenta AG Registered | 85,608 | 33,493,992 | ||||||
|
| |||||||
56,042,317 | ||||||||
COMMERCIAL SERVICES — 2.53% |
| |||||||
Adecco SA Registereda | 153,258 | 9,632,045 | ||||||
SGS SA Registered | 5,804 | 13,190,343 | ||||||
|
| |||||||
22,822,388 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 1.90% |
| |||||||
Julius Baer Group Ltd.a | 249,690 | 10,979,504 | ||||||
Partners Group Holding AG | 24,108 | 6,166,622 | ||||||
|
| |||||||
17,146,126 | ||||||||
ENGINEERING & CONSTRUCTION — 4.36% |
| |||||||
ABB Ltd. Registereda | 1,843,032 | 39,335,411 | ||||||
|
| |||||||
39,335,411 | ||||||||
FOOD — 20.17% |
| |||||||
Aryzta AGa | 117,588 | 7,491,127 | ||||||
Barry Callebaut AG Registereda | 4,920 | 4,619,756 | ||||||
Lindt & Spruengli AG Participation Certificates | 1,406 | 5,609,524 | ||||||
Lindt & Spruengli AG Registered | 146 | 6,733,162 | ||||||
Nestle SA Registered | 2,407,602 | 157,640,607 | ||||||
|
| |||||||
182,094,176 | ||||||||
HAND & MACHINE TOOLS — 1.44% |
| |||||||
Schindler Holding AG Participation Certificates | 59,040 | 8,124,016 | ||||||
Schindler Holding AG Registered | 36,162 | 4,882,878 | ||||||
|
| |||||||
13,006,894 |
Security | Shares | Value | ||||||
HEALTH CARE — PRODUCTS — 0.78% |
| |||||||
Sonova Holding AG Registereda | 63,714 | $ | 7,038,333 | |||||
|
| |||||||
7,038,333 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 0.44% |
| |||||||
Pargesa Holding SA Bearer | 56,580 | 4,014,122 | ||||||
|
| |||||||
4,014,122 | ||||||||
INSURANCE — 8.10% |
| |||||||
Baloise Holding AG Registered | 65,436 | 6,912,748 | ||||||
Swiss Life Holding AG Registereda | 41,082 | 7,679,743 | ||||||
Swiss Re AGa | 330,624 | 25,318,054 | ||||||
Zurich Insurance Group AGa | 133,824 | 33,240,711 | ||||||
|
| |||||||
73,151,256 | ||||||||
MANUFACTURING — 0.58% |
| |||||||
Sulzer AG Registered | 36,162 | 5,262,959 | ||||||
|
| |||||||
5,262,959 | ||||||||
OIL & GAS — 1.74% |
| |||||||
Transocean Ltd. | 347,106 | 15,735,919 | ||||||
|
| |||||||
15,735,919 | ||||||||
PHARMACEUTICALS — 28.45% |
| |||||||
Actelion Ltd. Registereda | 130,380 | 8,844,417 | ||||||
Novartis AG Registered | 1,658,532 | 120,690,043 | ||||||
Roche Holding AG Genusschein | 511,680 | 127,371,223 | ||||||
|
| |||||||
256,905,683 | ||||||||
REAL ESTATE — 0.61% |
| |||||||
Swiss Prime Site AG Registereda | 75,768 | 5,550,144 | ||||||
|
| |||||||
5,550,144 | ||||||||
RETAIL — 7.03% |
| |||||||
Compagnie Financiere Richemont SA Class A Bearer | 418,200 | 39,649,164 | ||||||
Swatch Group AG (The) Bearer | 30,504 | 17,535,547 | ||||||
Swatch Group AG (The) Registered | 62,484 | 6,245,719 | ||||||
|
| |||||||
63,430,430 | ||||||||
TELECOMMUNICATIONS — 1.27% |
| |||||||
Swisscom AG Registered | 25,338 | 11,456,994 | ||||||
|
| |||||||
11,456,994 | ||||||||
TRANSPORTATION — 0.92% |
| |||||||
Kuehne & Nagel International AG Registered | 66,666 | 8,286,775 | ||||||
|
| |||||||
8,286,775 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $794,335,180) |
| 897,654,768 |
SCHEDULESOF INVESTMENTS | 53 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SWITZERLAND CAPPED ETF
August 31, 2013
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS — 0.01% |
| |||||||
MONEY MARKET FUNDS — 0.01% |
| |||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.00%b,c | 49,816 | $ | 49,816 | |||||
|
| |||||||
49,816 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $49,816) | 49,816 | |||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $794,384,996) | 897,704,584 | |||||||
Other Assets, Less Liabilities — 0.57% |
| 5,155,855 | ||||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 902,860,439 | |||||
|
|
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.
54 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI UNITED KINGDOM ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 98.99% |
| |||||||
ADVERTISING — 0.93% |
| |||||||
WPP PLC | 1,344,240 | $ | 24,848,896 | |||||
|
| |||||||
24,848,896 | ||||||||
AEROSPACE & DEFENSE — 2.51% |
| |||||||
BAE Systems PLC | 3,334,320 | 22,441,854 | ||||||
Cobham PLC | 1,108,080 | 4,880,013 | ||||||
Meggitt PLC | 805,680 | 6,561,805 | ||||||
Rolls-Royce Holdings PLCa | 1,931,760 | 33,229,234 | ||||||
|
| |||||||
67,112,906 | ||||||||
AGRICULTURE — 4.95% |
| |||||||
British American Tobacco PLC | 1,969,920 | 99,188,645 | ||||||
Imperial Tobacco Group PLC | 1,000,800 | 33,006,302 | ||||||
|
| |||||||
132,194,947 | ||||||||
AIRLINES — 0.12% |
| |||||||
easyJet PLCb | 163,440 | 3,117,337 | ||||||
|
| |||||||
3,117,337 | ||||||||
APPAREL — 0.40% |
| |||||||
Burberry Group PLC | 454,320 | 10,780,765 | ||||||
|
| |||||||
10,780,765 | ||||||||
AUTO PARTS & EQUIPMENT — 0.32% |
| |||||||
GKN PLC | 1,678,320 | 8,515,516 | ||||||
|
| |||||||
8,515,516 | ||||||||
BANKS — 14.01% |
| |||||||
Barclays PLC | 12,550,320 | 55,009,841 | ||||||
HSBC Holdings PLC | 19,087,200 | 199,595,752 | ||||||
Lloyds Banking Group PLCa | 47,339,280 | 53,127,751 | ||||||
Royal Bank of Scotland Group PLCa | 2,187,360 | 11,291,167 | ||||||
Standard Chartered PLC | 2,478,960 | 55,258,090 | ||||||
|
| |||||||
374,282,601 | ||||||||
BEVERAGES — 4.91% |
| |||||||
Coca-Cola HBC AGa | 200,880 | 5,537,411 | ||||||
Diageo PLC | 2,577,600 | 78,709,118 | ||||||
SABMiller PLC | 984,240 | 46,802,305 | ||||||
|
| |||||||
131,048,834 | ||||||||
CHEMICALS — 0.56% |
| |||||||
Croda International PLC | 138,960 | 5,586,740 | ||||||
Johnson Matthey PLC | 210,960 | 9,271,152 | ||||||
|
| |||||||
14,857,892 | ||||||||
COMMERCIAL SERVICES — 2.51% |
| |||||||
Aggreko PLC | 275,760 | 6,940,347 |
Security | Shares | Value | ||||||
Babcock International Group PLC | 370,080 | $ | 6,514,787 | |||||
Bunzl PLC | 341,280 | 7,185,076 | ||||||
Capita PLC | 673,200 | 9,929,495 | ||||||
Experian PLC | 1,037,520 | 18,135,824 | ||||||
G4S PLC | 1,447,920 | 5,823,449 | ||||||
Intertek Group PLC | 164,880 | 8,166,796 | ||||||
Serco Group PLC | 511,920 | 4,335,594 | ||||||
|
| |||||||
67,031,368 | ||||||||
DISTRIBUTION & WHOLESALE — 0.53% |
| |||||||
Wolseley PLC | 281,520 | 14,196,760 | ||||||
|
| |||||||
14,196,760 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 1.42% |
| |||||||
Aberdeen Asset Management PLC | 985,680 | 5,370,166 | ||||||
Hargreaves Lansdown PLC | 218,880 | 3,380,777 | ||||||
ICAP PLC | 564,480 | 3,208,116 | ||||||
Investec PLC | 588,960 | 3,744,467 | ||||||
London Stock Exchange Group PLC | 180,720 | 4,361,071 | ||||||
Old Mutual PLC | 5,026,320 | 14,073,142 | ||||||
Schroders PLC | 104,400 | 3,735,412 | ||||||
|
| |||||||
37,873,151 | ||||||||
ELECTRIC — 0.89% |
| |||||||
SSE PLC | 984,960 | 23,814,416 | ||||||
|
| |||||||
23,814,416 | ||||||||
ENTERTAINMENT — 0.21% |
| |||||||
William Hill PLC | 884,880 | 5,683,346 | ||||||
|
| |||||||
5,683,346 | ||||||||
FOOD — 4.91% |
| |||||||
Associated British Foods PLC | 365,760 | 10,438,905 | ||||||
J Sainsbury PLC | 1,262,160 | 7,509,068 | ||||||
Tate & Lyle PLC | 479,520 | 5,971,246 | ||||||
Tesco PLC | 8,274,240 | 46,916,295 | ||||||
Unilever PLC | 1,318,320 | 50,146,629 | ||||||
Wm Morrison Supermarkets PLC | 2,268,000 | 10,181,291 | ||||||
|
| |||||||
131,163,434 | ||||||||
FOOD SERVICE — 0.93% |
| |||||||
Compass Group PLC | 1,874,160 | 24,816,630 | ||||||
|
| |||||||
24,816,630 | ||||||||
GAS — 2.81% |
| |||||||
Centrica PLC | 5,321,520 | 31,766,755 | ||||||
National Grid PLC | 3,764,880 | 43,242,418 | ||||||
|
| |||||||
75,009,173 |
SCHEDULESOF INVESTMENTS | 55 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI UNITED KINGDOM ETF
August 31, 2013
Security | Shares | Value | ||||||
HEALTH CARE — PRODUCTS — 0.40% |
| |||||||
Smith & Nephew PLC | 930,240 | $ | 10,792,415 | |||||
|
| |||||||
10,792,415 | ||||||||
HOME BUILDERS — 0.20% |
| |||||||
Persimmon PLC | 311,040 | 5,287,816 | ||||||
|
| |||||||
5,287,816 | ||||||||
HOUSEHOLD PRODUCTS & WARES — 1.69% |
| |||||||
Reckitt Benckiser Group PLC | 663,840 | 45,029,320 | ||||||
|
| |||||||
45,029,320 | ||||||||
INSURANCE — 4.21% |
| |||||||
Admiral Group PLC | 197,280 | 3,848,226 | ||||||
Aviva PLC | 3,026,880 | 18,111,067 | ||||||
Direct Line Insurance Group PLC | 843,840 | 2,829,969 | ||||||
Legal & General Group PLC | 6,074,640 | 17,553,341 | ||||||
Prudential PLC | 2,626,560 | 43,799,430 | ||||||
Resolution Ltd. | 1,455,840 | 7,177,250 | ||||||
RSA Insurance Group PLC | 3,698,640 | 6,785,614 | ||||||
Standard Life PLC | 2,422,080 | 12,409,126 | ||||||
|
| |||||||
112,514,023 | ||||||||
LEISURE TIME — 0.36% |
| |||||||
Carnival PLC | 188,640 | 7,038,392 | ||||||
TUI Travel PLC | 460,080 | 2,451,088 | ||||||
|
| |||||||
9,489,480 | ||||||||
LODGING — 0.62% |
| |||||||
InterContinental Hotels Group PLC | 275,760 | 7,691,116 | ||||||
Whitbread PLC | 183,600 | 8,747,537 | ||||||
|
| |||||||
16,438,653 | ||||||||
MACHINERY — 0.27% |
| |||||||
Weir Group PLC (The) | 218,160 | 7,340,012 | ||||||
|
| |||||||
7,340,012 | ||||||||
MANUFACTURING — 0.98% |
| |||||||
IMI PLC | 329,760 | 7,320,020 | ||||||
Invensys PLC | 670,320 | 5,069,494 | ||||||
Melrose Industries PLC | 1,298,880 | 5,915,197 | ||||||
Smiths Group PLC | 403,920 | 8,010,244 | ||||||
|
| |||||||
26,314,955 | ||||||||
MEDIA — 2.06% |
| |||||||
British Sky Broadcasting Group PLC | 1,069,200 | 13,884,877 | ||||||
ITV PLC | 3,818,880 | 9,723,625 | ||||||
Pearson PLC | 839,520 | 16,505,891 | ||||||
Reed Elsevier PLC | 1,225,440 | 15,003,941 | ||||||
|
| |||||||
55,118,334 |
Security | Shares | Value | ||||||
MINING — 8.38% |
| |||||||
Anglo American PLC | 1,431,360 | $ | 32,736,525 | |||||
Antofagasta PLC | 406,080 | 5,370,814 | ||||||
BHP Billiton PLC | 2,168,640 | 63,000,707 | ||||||
Fresnillo PLC | 185,760 | 3,744,200 | ||||||
Glencore Xstrata PLC | 10,849,680 | 51,222,861 | ||||||
Randgold Resources Ltd. | 90,000 | 7,079,390 | ||||||
Rio Tinto PLC | 1,305,360 | 58,821,102 | ||||||
Vedanta Resources PLC | 95,760 | 1,721,284 | ||||||
|
| |||||||
223,696,883 | ||||||||
OIL & GAS — 16.08% |
| |||||||
BG Group PLC | 3,494,160 | 66,320,795 | ||||||
BP PLC | 19,499,760 | 134,592,607 | ||||||
Royal Dutch Shell PLC Class A | 3,896,640 | 125,828,535 | ||||||
Royal Dutch Shell PLC Class B | 2,626,560 | 88,289,575 | ||||||
Tullow Oil PLC | 932,400 | 14,538,687 | ||||||
|
| |||||||
429,570,199 | ||||||||
OIL & GAS SERVICES — 0.40% |
| |||||||
AMEC PLC | 305,280 | 4,906,550 | ||||||
Petrofac Ltd. | 267,120 | 5,722,932 | ||||||
|
| |||||||
10,629,482 | ||||||||
PACKAGING & CONTAINERS — 0.23% |
| |||||||
Rexam PLC | 812,160 | 6,129,637 | ||||||
|
| |||||||
6,129,637 | ||||||||
PHARMACEUTICALS — 7.96% |
| |||||||
AstraZeneca PLC | 1,282,320 | 63,039,489 | ||||||
GlaxoSmithKline PLC | 5,048,640 | 128,509,331 | ||||||
Shire PLC | 570,240 | 20,967,624 | ||||||
|
| |||||||
212,516,444 | ||||||||
REAL ESTATE INVESTMENT TRUSTS — 1.18% |
| |||||||
British Land Co. PLC | 962,640 | 8,309,224 | ||||||
Hammerson PLC | 731,520 | 5,471,231 | ||||||
Intu Properties PLC | 687,600 | 3,253,702 | ||||||
Land Securities Group PLC | 802,800 | 10,965,550 | ||||||
SEGRO PLC | 763,200 | 3,447,336 | ||||||
|
| |||||||
31,447,043 | ||||||||
RETAIL — 1.69% |
| |||||||
Kingfisher PLC | 2,437,200 | 14,514,908 | ||||||
Marks & Spencer Group PLC | 1,657,440 | 12,093,891 | ||||||
Next PLC | 164,160 | 12,427,784 | ||||||
Travis Perkins PLC | 251,280 | 6,122,106 | ||||||
|
| |||||||
45,158,689 |
56 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI UNITED KINGDOM ETF
August 31, 2013
Security | Shares | Value | ||||||
SEMICONDUCTORS — 0.73% |
| |||||||
ARM Holdings PLC | 1,434,240 | $ | 19,412,982 | |||||
|
| |||||||
19,412,982 | ||||||||
SOFTWARE — 0.23% |
| |||||||
Sage Group PLC (The) | 1,151,280 | 6,128,131 | ||||||
|
| |||||||
6,128,131 | ||||||||
TELECOMMUNICATIONS — 7.68% |
| |||||||
BT Group PLC | 8,095,680 | 40,738,006 | ||||||
Inmarsat PLC | 460,080 | 4,946,301 | ||||||
Vodafone Group PLC | 49,965,840 | 159,415,125 | ||||||
|
| |||||||
205,099,432 | ||||||||
VENTURE CAPITAL — 0.21% |
| |||||||
3i Group PLC | 997,920 | 5,534,103 | ||||||
|
| |||||||
5,534,103 | ||||||||
WATER — 0.51% |
| |||||||
Severn Trent PLC | 244,800 | 6,392,139 | ||||||
United Utilities Group PLC | 699,840 | 7,345,325 | ||||||
|
| |||||||
13,737,464 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $2,595,184,368) | 2,643,733,469 | |||||||
SHORT-TERM INVESTMENTS — 0.20% |
| |||||||
MONEY MARKET FUNDS — 0.20% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.15%c,d,e | 2,743,532 | 2,743,532 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
0.13%c,d,e | 174,213 | 174,213 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.00%c,d | 2,465,672 | 2,465,672 | ||||||
|
| |||||||
5,383,417 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $5,383,417) | 5,383,417 | |||||||
|
|
Value | ||||||
TOTAL INVESTMENTS | ||||||
(Cost: $2,600,567,785) | $ | 2,649,116,886 | ||||
Other Assets, Less Liabilities — 0.81% | 21,679,264 | |||||
|
| |||||
NET ASSETS — 100.00% | $ | 2,670,796,150 | ||||
|
|
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, 2013 were as follows:
Number of Contracts | Issue (Expiration) | Exchange | Notional Value | Net Unrealized Appreciation (Depreciation) | ||||||||||
260 | FTSE 100 Index (Sept. 2013) | NYSE Liffe London | $ | 25,772,599 | $ | 107,092 | ||||||||
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 57 |
Table of Contents
Statements of Assets and Liabilities
iSHARES®, INC.
August 31, 2013
iShares MSCI Austria Capped ETF | iShares MSCI Belgium Capped ETF | iShares MSCI Emerging Markets Eastern Europe ETF | ||||||||||
ASSETS | ||||||||||||
Investments, at cost: | ||||||||||||
Unaffiliated | $ | 110,514,293 | $ | 71,555,420 | $ | 135,360,581 | ||||||
Affiliated (Note 2) | 2,672,758 | 2,863,199 | 219,611 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments | $ | 113,187,051 | $ | 74,418,619 | $ | 135,580,192 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 81,411,488 | $ | 71,112,045 | $ | 120,897,077 | ||||||
Affiliated (Note 2) | 2,672,758 | 2,863,199 | 219,611 | |||||||||
|
|
|
|
|
| |||||||
Total fair value of investments | 84,084,246 | 73,975,244 | 121,116,688 | |||||||||
Foreign currency, at valueb | 14,191 | 122,297 | 176,715 | |||||||||
Receivables: | ||||||||||||
Investment securities sold | 1,019,841 | 579,781 | 108,192 | |||||||||
Due from custodian (Note 4) | 154,559 | — | — | |||||||||
Dividends and interest | 773,778 | 23,309 | 664,266 | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 86,046,615 | 74,700,631 | 122,065,861 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 1,188,366 | 625,246 | 194,935 | |||||||||
Collateral for securities on loan (Note 5) | 2,602,910 | 2,828,616 | — | |||||||||
Investment advisory fees (Note 2) | 32,112 | 31,018 | 73,480 | |||||||||
|
| �� |
|
|
| |||||||
Total Liabilities | 3,823,388 | 3,484,880 | 268,415 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 82,223,227 | $ | 71,215,751 | $ | 121,797,446 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 191,377,604 | $ | 124,488,317 | $ | 138,645,709 | ||||||
Undistributed (distributions in excess of) net investment income | (273 | ) | 70,140 | 667,494 | ||||||||
Accumulated net realized loss | (80,026,890 | ) | (52,899,359 | ) | (3,043,527 | ) | ||||||
Net unrealized depreciation | (29,127,214 | ) | (443,347 | ) | (14,472,230 | ) | ||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 82,223,227 | $ | 71,215,751 | $ | 121,797,446 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingc | 4,600,000 | 4,960,000 | 5,100,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 17.87 | $ | 14.36 | $ | 23.88 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $2,439,210, $2,493,514 and $ –, respectively. See Note 5. |
b | Cost of foreign currency: $14,397, $122,831 and $179,781, respectively. |
c | $0.001 par value, number of shares authorized: 100 million, 136.2 million and 200 million, respectively. |
See notes to financial statements.
58 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Assets and Liabilities (Continued)
iSHARES®, INC.
August 31, 2013
iShares MSCI EMU ETF | iShares MSCI France ETF | iShares MSCI Germany ETF | ||||||||||
ASSETS | ||||||||||||
Investments, at cost: | ||||||||||||
Unaffiliated | $ | 3,777,978,870 | $ | 577,719,146 | $ | 4,772,612,644 | ||||||
Affiliated (Note 2) | 46,149,664 | 1,389,865 | 26,598,801 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments | $ | 3,824,128,534 | $ | 579,109,011 | $ | 4,799,211,445 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 3,533,350,437 | $ | 526,511,311 | $ | 4,627,264,999 | ||||||
Affiliated (Note 2) | 46,149,664 | 1,389,865 | 26,598,801 | |||||||||
|
|
|
|
|
| |||||||
Total fair value of investments | 3,579,500,101 | 527,901,176 | 4,653,863,800 | |||||||||
Foreign currency, at valueb | 88,899 | 512,048 | 9,536,803 | |||||||||
Foreign currency pledged to broker, at valueb | — | — | 3,904,244 | |||||||||
Receivables: | ||||||||||||
Investment securities sold | 5,835,095 | 1,183,103 | 3,214,939 | |||||||||
Due from custodian (Note 4) | 6,063,003 | — | — | |||||||||
Dividends and interest | 3,379,595 | 204 | 15,604,185 | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 3,594,866,693 | 529,596,531 | 4,686,123,971 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 13,920,201 | 1,178,697 | 3,250,224 | |||||||||
Collateral for securities on loan (Note 5) | 39,633,729 | 1,358,704 | 24,639,622 | |||||||||
Futures variation margin | — | — | 383,449 | |||||||||
Investment advisory fees (Note 2) | 1,333,044 | 219,763 | 1,976,064 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 54,886,974 | 2,757,164 | 30,249,359 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 3,539,979,719 | $ | 526,839,367 | $ | 4,655,874,612 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 4,024,017,998 | $ | 623,539,058 | $ | 5,004,490,121 | ||||||
Undistributed net investment income | 3,542,748 | 117,337 | — | |||||||||
Accumulated net realized loss | (242,959,050 | ) | (45,604,228 | ) | (202,810,502 | ) | ||||||
Net unrealized depreciation | (244,621,977 | ) | (51,212,800 | ) | (145,805,007 | ) | ||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 3,539,979,719 | $ | 526,839,367 | $ | 4,655,874,612 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingc | 102,200,000 | 21,200,000 | 181,800,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 34.64 | $ | 24.85 | $ | 25.61 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $37,002,693, $1,269,359 and $23,044,396, respectively. See Note 5. |
b | Cost of foreign currency including currency pledged to broker: $88,920, $517,013 and $13,205,604, respectively. |
c | $0.001 par value, number of shares authorized: 1 billion, 340.2 million and 382.2 million, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 59 |
Table of Contents
Statements of Assets and Liabilities (Continued)
iSHARES®, INC.
August 31, 2013
iShares MSCI Italy Capped ETF | iShares MSCI Netherlands ETF | iShares MSCI Spain Capped ETF | ||||||||||
ASSETS | ||||||||||||
Investments, at cost: | ||||||||||||
Unaffiliated | $ | 713,429,648 | $ | 261,467,665 | $ | 448,694,406 | ||||||
Affiliated (Note 2) | 29,007,013 | 7,664,564 | 10,404,551 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments | $ | 742,436,661 | $ | 269,132,229 | $ | 459,098,957 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 718,262,249 | $ | 252,500,140 | $ | 415,952,690 | ||||||
Affiliated (Note 2) | 29,007,013 | 7,664,564 | 10,404,551 | |||||||||
|
|
|
|
|
| |||||||
Total fair value of investments | 747,269,262 | 260,164,704 | 426,357,241 | |||||||||
Foreign currency, at valueb | 480,228 | 131,712 | 1,087,597 | |||||||||
Receivables: | ||||||||||||
Investment securities sold | 36,927,719 | 493,591 | 1,493,366 | |||||||||
Dividends and interest | 60,815 | 571,299 | 44,280 | |||||||||
Capital shares sold | — | — | 1,239,439 | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 784,738,024 | 261,361,306 | 430,221,923 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 38,416,981 | 693,266 | 2,387,824 | |||||||||
Collateral for securities on loan (Note 5) | 28,893,713 | 7,183,558 | 9,903,832 | |||||||||
Investment advisory fees (Note 2) | 305,591 | 94,580 | 152,386 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 67,616,285 | 7,971,404 | 12,444,042 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 717,121,739 | $ | 253,389,902 | $ | 417,777,881 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 818,699,532 | $ | 306,881,786 | $ | 543,658,071 | ||||||
Undistributed net investment income | — | 769,772 | 4,164,108 | |||||||||
Accumulated net realized loss | (106,415,925 | ) | (45,288,164 | ) | (97,300,936 | ) | ||||||
Net unrealized appreciation (depreciation) | 4,838,132 | (8,973,492 | ) | (32,743,362 | ) | |||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 717,121,739 | $ | 253,389,902 | $ | 417,777,881 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingc | 54,900,000 | 11,250,000 | 13,725,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 13.06 | $ | 22.52 | $ | 30.44 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $26,175,307, $6,995,149 and $9,233,162, respectively. See Note 5. |
b | Cost of foreign currency: $474,697, $131,965 and $1,094,270, 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.
60 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Assets and Liabilities (Continued)
iSHARES®, INC.
August 31, 2013
iShares MSCI Sweden ETF | iShares MSCI Switzerland Capped ETF | iShares MSCI United Kingdom ETF | ||||||||||
ASSETS | ||||||||||||
Investments, at cost: | ||||||||||||
Unaffiliated | $ | 428,248,534 | $ | 794,335,180 | $ | 2,595,184,368 | ||||||
Affiliated (Note 2) | 14,515 | 49,816 | 5,383,417 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments | $ | 428,263,049 | $ | 794,384,996 | $ | 2,600,567,785 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 433,847,376 | $ | 897,654,768 | $ | 2,643,733,469 | ||||||
Affiliated (Note 2) | 14,515 | 49,816 | 5,383,417 | |||||||||
|
|
|
|
|
| |||||||
Total fair value of investments | 433,861,891 | 897,704,584 | 2,649,116,886 | |||||||||
Foreign currency, at valueb | 332,858 | 270,371 | 6,044,894 | |||||||||
Foreign currency pledged to broker, at valueb | — | — | 1,295,715 | |||||||||
Receivables: | ||||||||||||
Investment securities sold | 3,119,794 | 11,024,382 | 5,845,065 | |||||||||
Due from custodian (Note 4) | 510,505 | — | — | |||||||||
Dividends and interest | 17 | 4,765,865 | 18,395,306 | |||||||||
Futures variation margin | — | — | 107,092 | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 437,825,065 | 913,765,202 | 2,680,804,958 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 3,629,849 | 10,506,450 | 6,010,829 | |||||||||
Collateral for securities on loan (Note 5) | — | — | 2,917,745 | |||||||||
Investment advisory fees (Note 2) | 189,321 | 398,313 | 1,080,234 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 3,819,170 | 10,904,763 | 10,008,808 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 434,005,895 | $ | 902,860,439 | $ | 2,670,796,150 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 475,073,853 | $ | 856,533,438 | $ | 2,793,628,637 | ||||||
Undistributed (distributions in excess of) net investment income | (449,084 | ) | (137,987 | ) | 18,644,893 | |||||||
Accumulated net realized loss | (46,219,359 | ) | (56,820,601 | ) | (190,093,968 | ) | ||||||
Net unrealized appreciation | 5,600,485 | 103,285,589 | 48,616,588 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 434,005,895 | $ | 902,860,439 | $ | 2,670,796,150 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingc | 13,575,000 | 30,750,000 | 144,000,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 31.97 | $ | 29.36 | $ | 18.55 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $ –, $ – and $2,714,681, respectively. See Note 5. |
b | Cost of foreign currency including currency pledged to broker: $331,211, $269,638 and $7,334,245, respectively. |
c | $0.001 par value, number of shares authorized: 63.6 million, 318.625 million and 934.2 million, respectively. |
FINANCIAL STATEMENTS | 61 |
Table of Contents
Statements of Operations
iSHARES®, INC.
Year ended August 31, 2013
iShares MSCI Austria Capped ETF | iShares MSCI Belgium Capped ETF | iShares MSCI Emerging Markets Eastern Europe ETF | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliateda | $ | 1,945,515 | $ | 1,847,710 | $ | 1,827,848 | ||||||
Interest — affiliated (Note 2) | 27 | 11 | 12 | |||||||||
Securities lending income — affiliated (Note 2) | 9,044 | 18,666 | 122 | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 1,954,586 | 1,866,387 | 1,827,982 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 425,691 | 267,980 | 339,167 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 425,691 | 267,980 | 339,167 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 1,528,895 | 1,598,407 | 1,488,815 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | (19,364,208 | ) | (9,663,237 | ) | (2,515,494 | ) | ||||||
In-kind redemptions — unaffiliated | 7,682,003 | 1,527,926 | (988,664 | ) | ||||||||
Foreign currency transactions | 12,462 | 9,592 | (11,983 | ) | ||||||||
|
|
|
|
|
| |||||||
Net realized loss | (11,669,743 | ) | (8,125,719 | ) | (3,516,141 | ) | ||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments | 26,227,675 | 16,319,925 | (6,582,706 | ) | ||||||||
Translation of assets and liabilities in foreign currencies | 28,236 | 1,892 | (8,981 | ) | ||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | 26,255,911 | 16,321,817 | (6,591,687 | ) | ||||||||
|
|
|
|
|
| |||||||
Net realized and unrealized gain (loss) | 14,586,168 | 8,196,098 | (10,107,828 | ) | ||||||||
|
|
|
|
|
| |||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | 16,115,063 | $ | 9,794,505 | $ | (8,619,013 | ) | |||||
|
|
|
|
|
|
a | Net of foreign withholding tax of $270,703, $320,286 and $303,779, respectively. |
See notes to financial statements.
62 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Operations (Continued)
iSHARES®, INC.
Year ended August 31, 2013
iShares MSCI EMU ETF | iShares MSCI France ETF | iShares MSCI Germany ETF | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliateda | $ | 66,443,060 | $ | 16,135,591 | $ | 88,060,459 | ||||||
Interest — affiliated (Note 2) | 546 | 76 | 465 | |||||||||
Securities lending income — affiliated (Note 2) | 467,463 | 58,245 | 361,883 | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 66,911,069 | 16,193,912 | 88,422,807 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 10,426,456 | 2,375,854 | 18,741,662 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 10,426,456 | 2,375,854 | 18,741,662 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 56,484,613 | 13,818,058 | 69,681,145 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | (87,144,298 | ) | (21,398,559 | ) | (47,716,162 | ) | ||||||
In-kind redemptions — unaffiliated | 146,902,001 | 38,833,785 | 224,609,945 | |||||||||
Futures contracts | — | — | 4,784,524 | |||||||||
Foreign currency transactions | 38,235 | 4,412 | 274,590 | |||||||||
|
|
|
|
|
| |||||||
Net realized gain | 59,795,938 | 17,439,638 | 181,952,897 | |||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments | 153,666,134 | 64,388,658 | 398,959,759 | |||||||||
Futures contracts | — | — | (2,015,907 | ) | ||||||||
Translation of assets and liabilities in foreign currencies | 20,832 | (17,007 | ) | 785,431 | ||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | 153,686,966 | 64,371,651 | 397,729,283 | |||||||||
|
|
|
|
|
| |||||||
Net realized and unrealized gain | 213,482,904 | 81,811,289 | 579,682,180 | |||||||||
|
|
|
|
|
| |||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 269,967,517 | $ | 95,629,347 | $ | 649,363,325 | ||||||
|
|
|
|
|
|
a | Net of foreign withholding tax of $9,418,239, $2,666,085 and $13,281,679, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 63 |
Table of Contents
Statements of Operations (Continued)
iSHARES®, INC.
Year ended August 31, 2013
iShares MSCI Italy Capped ETF | iShares MSCI Netherlands ETF | iShares MSCI Spain Capped ETF | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliateda | $ | 15,948,449 | $ | 3,793,420 | $ | 12,905,910 | ||||||
Interest — affiliated (Note 2) | 94 | 26 | 148 | |||||||||
Securities lending income — affiliated (Note 2) | 342,723 | 25,537 | 364,186 | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 16,291,266 | 3,818,983 | 13,270,244 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 2,496,180 | 744,108 | 1,353,645 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 2,496,180 | 744,108 | 1,353,645 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 13,795,086 | 3,074,875 | 11,916,599 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | (67,726,876 | ) | (6,990,188 | ) | (68,922,141 | ) | ||||||
In-kind redemptions — unaffiliated | 25,152,810 | 8,711,098 | 35,479,698 | |||||||||
Foreign currency transactions | 44,195 | 20,823 | 94,583 | |||||||||
|
|
|
|
|
| |||||||
Net realized gain (loss) | (42,529,871 | ) | 1,741,733 | (33,347,860 | ) | |||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments | 57,295,153 | 22,050,701 | 54,585,895 | |||||||||
Translation of assets and liabilities in foreign currencies | 3,720 | (9,388 | ) | (4,359 | ) | |||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | 57,298,873 | 22,041,313 | 54,581,536 | |||||||||
|
|
|
|
|
| |||||||
Net realized and unrealized gain | 14,769,002 | 23,783,046 | 21,233,676 | |||||||||
|
|
|
|
|
| |||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 28,564,088 | $ | 26,857,921 | $ | 33,150,275 | ||||||
|
|
|
|
|
|
a | Net of foreign withholding tax of $2,696,365, $602,587 and $721,321, respectively. |
See notes to financial statements.
64 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Operations (Continued)
iSHARES®, INC.
Year ended August 31, 2013
iShares MSCI Sweden ETF | iShares MSCI Switzerland Capped ETF | iShares MSCI United Kingdom ETF | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliateda | $ | 14,129,212 | $ | 22,597,662 | $ | 68,667,962 | ||||||
Interest — unaffiliated | — | — | 4,387 | |||||||||
Interest — affiliated (Note 2) | 40 | 131 | 499 | |||||||||
Securities lending income — affiliated (Note 2) | 1,026 | — | 84,365 | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 14,130,278 | 22,597,793 | 68,757,213 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 1,967,658 | 3,964,723 | 8,452,794 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 1,967,658 | 3,964,723 | 8,452,794 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 12,162,620 | 18,633,070 | 60,304,419 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | (8,693,942 | ) | (5,539,044 | ) | (40,334,558 | ) | ||||||
In-kind redemptions — unaffiliated | 11,687,909 | 42,022,619 | 4,889,599 | |||||||||
Futures contracts | — | — | 1,219,817 | |||||||||
Foreign currency transactions | (62,887 | ) | 107,829 | 99,041 | ||||||||
|
|
|
|
|
| |||||||
Net realized gain (loss) | 2,931,080 | 36,591,404 | (34,126,101 | ) | ||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments | 56,696,666 | 102,939,569 | 153,983,393 | |||||||||
Futures contracts | — | — | 74,070 | |||||||||
Translation of assets and liabilities in foreign currencies | (2,572 | ) | (47,526 | ) | (183,781 | ) | ||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | 56,694,094 | 102,892,043 | 153,873,682 | |||||||||
|
|
|
|
|
| |||||||
Net realized and unrealized gain | 59,625,174 | 139,483,447 | 119,747,581 | |||||||||
|
|
|
|
|
| |||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 71,787,794 | $ | 158,116,517 | $ | 180,052,000 | ||||||
|
|
|
|
|
|
a | Net of foreign withholding tax of $2,241,454, $2,913,653 and $801,316, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 65 |
Table of Contents
Statements of Changes in Net Assets
iSHARES®, INC.
iShares MSCI Austria Capped ETF | iShares MSCI Belgium Capped ETF | |||||||||||||||
Year ended August 31, 2013 | Year ended August 31, 2012 | Year ended August 31, 2013 | Year ended August 31, 2012 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 1,528,895 | $ | 1,549,161 | $ | 1,598,407 | $ | 841,677 | ||||||||
Net realized loss | (11,669,743 | ) | (40,973,628 | ) | (8,125,719 | ) | (3,945,237 | ) | ||||||||
Net change in unrealized appreciation/depreciation | 26,255,911 | 13,231,220 | 16,321,817 | 3,067,475 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 16,115,063 | (26,193,247 | ) | 9,794,505 | (36,085 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (1,541,991 | ) | (1,874,586 | ) | (1,577,907 | ) | (1,434,412 | ) | ||||||||
Return of capital | — | — | — | (27,668 | ) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (1,541,991 | ) | (1,874,586 | ) | (1,577,907 | ) | (1,462,080 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 81,897,298 | 30,854,845 | 43,904,093 | 3,661,417 | ||||||||||||
Cost of shares redeemed | (68,004,259 | ) | (86,004,103 | ) | (6,290,893 | ) | (8,033,134 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital | 13,893,039 | (55,149,258 | ) | 37,613,200 | (4,371,717 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | 28,466,111 | (83,217,091 | ) | 45,829,798 | (5,869,882 | ) | ||||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 53,757,116 | 136,974,207 | 25,385,953 | 31,255,835 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year | $ | 82,223,227 | $ | 53,757,116 | $ | 71,215,751 | $ | 25,385,953 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of year | $ | (273 | ) | $ | (273 | ) | $ | 70,140 | $ | (4,077 | ) | |||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 4,700,000 | 1,900,000 | 3,280,000 | 320,000 | ||||||||||||
Shares redeemed | (3,800,000 | ) | (5,500,000 | ) | (440,000 | ) | (680,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | 900,000 | (3,600,000 | ) | 2,840,000 | (360,000 | ) | ||||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
66 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Emerging Markets Eastern Europe ETF | iShares MSCI EMU ETF | |||||||||||||||
Year ended August 31, 2013 | Year ended August 31, 2012 | Year ended August 31, 2013 | Year ended August 31, 2012 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 1,488,815 | $ | 988,863 | $ | 56,484,613 | $ | 24,981,379 | ||||||||
Net realized gain (loss) | (3,516,141 | ) | (3,942,137 | ) | 59,795,938 | (64,241,482 | ) | |||||||||
Net change in unrealized appreciation/depreciation | (6,591,687 | ) | (1,763,369 | ) | 153,686,966 | 3,598,710 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | (8,619,013 | ) | (4,716,643 | ) | 269,967,517 | (35,661,393 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (885,320 | ) | (999,697 | ) | (54,004,208 | ) | (26,115,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (885,320 | ) | (999,697 | ) | (54,004,208 | ) | (26,115,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 124,132,179 | 3,811,852 | 3,656,727,115 | 423,843,438 | ||||||||||||
Cost of shares redeemed | (13,432,406 | ) | (9,705,031 | ) | (1,126,936,712 | ) | (306,073,712 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital | 110,699,773 | (5,893,179 | ) | 2,529,790,403 | 117,769,726 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | 101,195,440 | (11,609,519 | ) | 2,745,753,712 | 55,993,333 | |||||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 20,602,006 | 32,211,525 | 794,226,007 | 738,232,674 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year | $ | 121,797,446 | $ | 20,602,006 | $ | 3,539,979,719 | $ | 794,226,007 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed net investment income included in net assets at end of year | $ | 667,494 | $ | 75,982 | $ | 3,542,748 | $ | 941,872 | ||||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 4,800,000 | 150,000 | 108,500,000 | 14,700,000 | ||||||||||||
Shares redeemed | (550,000 | ) | (400,000 | ) | (33,600,000 | ) | (10,800,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | 4,250,000 | (250,000 | ) | 74,900,000 | 3,900,000 | |||||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
FINANCIAL STATEMENTS | 67 |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI France ETF | iShares MSCI Germany ETF | |||||||||||||||
Year ended August 31, 2013 | Year ended August 31, 2012 | Year ended August 31, 2013 | Year ended August 31, 2012 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 13,818,058 | $ | 8,469,659 | $ | 69,681,145 | $ | 72,991,703 | ||||||||
Net realized gain (loss) | 17,439,638 | (46,840,141 | ) | 181,952,897 | (23,203,349 | ) | ||||||||||
Net change in unrealized appreciation/depreciation | 64,371,651 | 21,070,720 | 397,729,283 | 56,076,160 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 95,629,347 | (17,299,762 | ) | 649,363,325 | 105,864,514 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (13,699,998 | ) | (8,849,764 | ) | (70,323,492 | ) | (74,836,476 | ) | ||||||||
Return of capital | — | (2,754 | ) | — | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (13,699,998 | ) | (8,852,518 | ) | (70,323,492 | ) | (74,836,476 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 198,782,962 | 407,882,087 | 2,897,813,848 | 1,528,900,109 | ||||||||||||
Cost of shares redeemed | (155,498,446 | ) | (337,241,789 | ) | (1,618,008,137 | ) | (1,531,070,466 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | 43,284,516 | 70,640,298 | 1,279,805,711 | (2,170,357 | ) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE IN NET ASSETS | 125,213,865 | 44,488,018 | 1,858,845,544 | 28,857,681 | ||||||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 401,625,502 | 357,137,484 | 2,797,029,068 | 2,768,171,387 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year | $ | 526,839,367 | $ | 401,625,502 | $ | 4,655,874,612 | $ | 2,797,029,068 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of year | $ | 117,337 | $ | (48,128 | ) | $ | — | $ | — | |||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 8,000,000 | 21,000,000 | 116,100,000 | 72,900,000 | ||||||||||||
Shares redeemed | (6,200,000 | ) | (17,400,000 | ) | (65,400,000 | ) | (73,500,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | 1,800,000 | 3,600,000 | 50,700,000 | (600,000 | ) | |||||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
68 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Italy Capped ETF | iShares MSCI Netherlands ETF | |||||||||||||||
Year ended August 31, 2013 | Year ended August 31, 2012 | Year ended August 31, 2013 | Year ended August 31, 2012 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 13,795,086 | $ | 4,465,523 | $ | 3,074,875 | $ | 1,568,827 | ||||||||
Net realized gain (loss) | (42,529,871 | ) | (29,842,080 | ) | 1,741,733 | (20,489,624 | ) | |||||||||
Net change in unrealized appreciation/depreciation | 57,298,873 | 14,197,991 | 22,041,313 | 16,001,368 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 28,564,088 | (11,178,566 | ) | 26,857,921 | (2,919,429 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (13,839,281 | ) | (4,578,996 | ) | (2,491,248 | ) | (1,910,545 | ) | ||||||||
Return of capital | (452,885 | ) | (1,125 | ) | — | — | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (14,292,166 | ) | (4,580,121 | ) | (2,491,248 | ) | (1,910,545 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 687,838,080 | 186,146,005 | 192,481,969 | 38,973,623 | ||||||||||||
Cost of shares redeemed | (181,200,015 | ) | (118,787,548 | ) | (41,855,281 | ) | (77,487,514 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital | 506,638,065 | 67,358,457 | 150,626,688 | (38,513,891 | ) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | 520,909,987 | 51,599,770 | 174,993,361 | (43,343,865 | ) | |||||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 196,211,752 | 144,611,982 | 78,396,541 | 121,740,406 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year | $ | 717,121,739 | $ | 196,211,752 | $ | 253,389,902 | $ | 78,396,541 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of year | $ | — | $ | (61,840 | ) | $ | 769,772 | $ | 159,212 | |||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 52,350,000 | 15,750,000 | 8,900,000 | 2,200,000 | ||||||||||||
Shares redeemed | (14,100,000 | ) | (9,750,000 | ) | (1,950,000 | ) | (4,500,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | 38,250,000 | 6,000,000 | 6,950,000 | (2,300,000 | ) | |||||||||||
|
|
|
|
|
|
|
|
FINANCIAL STATEMENTS | 69 |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Spain Capped ETF | iShares MSCI Sweden ETF | |||||||||||||||
Year ended August 31, 2013 | Year ended August 31, 2012 | Year ended August 31, 2013 | Year ended August 31, 2012 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 11,916,599 | $ | 10,200,322 | $ | 12,162,620 | $ | 9,806,343 | ||||||||
Net realized gain (loss) | (33,347,860 | ) | (55,320,695 | ) | 2,931,080 | (18,580,006 | ) | |||||||||
Net change in unrealized appreciation/depreciation | 54,581,536 | 23,658,799 | 56,694,094 | 18,534,408 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 33,150,275 | (21,461,574 | ) | 71,787,794 | 9,760,745 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (10,629,551 | ) | (11,503,970 | ) | (12,548,817 | ) | (9,531,005 | ) | ||||||||
Return of capital | — | — | — | (613,518 | ) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (10,629,551 | ) | (11,503,970 | ) | (12,548,817 | ) | (10,144,523 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 465,959,787 | 226,627,780 | 90,137,660 | 141,186,783 | ||||||||||||
Cost of shares redeemed | (265,795,649 | ) | (178,928,842 | ) | (86,203,125 | ) | (99,857,806 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets from capital share transactions | 200,164,138 | 47,698,938 | 3,934,535 | 41,328,977 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE IN NET ASSETS | 222,684,862 | 14,733,394 | 63,173,512 | 40,945,199 | ||||||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 195,093,019 | 180,359,625 | 370,832,383 | 329,887,184 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year | $ | 417,777,881 | $ | 195,093,019 | $ | 434,005,895 | $ | 370,832,383 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of year | $ | 4,164,108 | $ | 2,782,477 | $ | (449,084 | ) | $ | (43,823 | ) | ||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 15,225,000 | 8,550,000 | 2,850,000 | 5,250,000 | ||||||||||||
Shares redeemed | (8,925,000 | ) | (6,150,000 | ) | (2,850,000 | ) | (3,975,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in shares outstanding | 6,300,000 | 2,400,000 | — | 1,275,000 | ||||||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
70 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Switzerland Capped ETF | iShares MSCI United Kingdom ETF | |||||||||||||||
Year ended August 31, 2013 | Year ended August 31, 2012 | Year ended August 31, 2013 | Year ended August 31, 2012 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 18,633,070 | $ | 14,072,490 | $ | 60,304,419 | $ | 51,696,487 | ||||||||
Net realized gain (loss) | 36,591,404 | (923,487 | ) | (34,126,101 | ) | (13,950,054 | ) | |||||||||
Net change in unrealized appreciation/depreciation | 102,892,043 | (15,616,566 | ) | 153,873,682 | 52,432,507 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 158,116,517 | (2,467,563 | ) | 180,052,000 | 90,178,940 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (19,030,631 | ) | (14,947,529 | ) | (51,302,175 | ) | (49,722,633 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (19,030,631 | ) | (14,947,529 | ) | (51,302,175 | ) | (49,722,633 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 352,868,105 | 90,416,035 | 1,203,907,210 | 243,232,911 | ||||||||||||
Cost of shares redeemed | (143,663,266 | ) | (42,590,064 | ) | (18,354,984 | ) | (126,527,912 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets from capital share transactions | 209,204,839 | 47,825,971 | 1,185,552,226 | 116,704,999 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE IN NET ASSETS | 348,290,725 | 30,410,879 | 1,314,302,051 | 157,161,306 | ||||||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 554,569,714 | 524,158,835 | 1,356,494,099 | 1,199,332,793 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year | $ | 902,860,439 | $ | 554,569,714 | $ | 2,670,796,150 | $ | 1,356,494,099 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of year | $ | (137,987 | ) | $ | (89,854 | ) | $ | 18,644,893 | $ | 9,541,575 | ||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 12,500,000 | 3,875,000 | 64,800,000 | 14,800,000 | ||||||||||||
Shares redeemed | (5,000,000 | ) | (1,875,000 | ) | (1,000,000 | ) | (7,600,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in shares outstanding | 7,500,000 | 2,000,000 | 63,800,000 | 7,200,000 | ||||||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
FINANCIAL STATEMENTS | 71 |
Table of Contents
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Austria Capped ETF | ||||||||||||||||||||
Year ended Aug. 31, 2013 | Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | ||||||||||||||||
Net asset value, beginning of year | $ | 14.53 | $ | 18.76 | $ | 17.27 | $ | 20.21 | $ | 29.78 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.32 | 0.35 | 0.42 | 0.43 | 0.51 | |||||||||||||||
Net realized and unrealized gain (loss)b | 3.36 | (4.09 | ) | 1.53 | (2.62 | ) | (9.36 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 3.68 | (3.74 | ) | 1.95 | (2.19 | ) | (8.85 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.34 | ) | (0.49 | ) | (0.46 | ) | (0.75 | ) | (0.72 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.34 | ) | (0.49 | ) | (0.46 | ) | (0.75 | ) | (0.72 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 17.87 | $ | 14.53 | $ | 18.76 | $ | 17.27 | $ | 20.21 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 25.49 | % | (19.81 | )% | 10.92 | % | (11.07 | )% | (28.52 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 82,223 | $ | 53,757 | $ | 136,974 | $ | 110,520 | $ | 159,666 | ||||||||||
Ratio of expenses to average net assets | 0.51 | % | 0.52 | % | 0.52 | % | 0.54 | % | 0.55 | % | ||||||||||
Ratio of net investment income to average net assets | 1.82 | % | 2.32 | % | 1.95 | % | 2.20 | % | 3.25 | % | ||||||||||
Portfolio turnover ratec | 26 | % | 13 | % | 12 | % | 11 | % | 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.
72 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Belgium Capped ETF | ||||||||||||||||||||
Year ended Aug. 31, 2013 | Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | ||||||||||||||||
Net asset value, beginning of year | $ | 11.97 | $ | 12.60 | $ | 11.78 | $ | 12.06 | $ | 17.64 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.42 | 0.38 | 0.35 | 0.19 | 0.22 | |||||||||||||||
Net realized and unrealized gain (loss)b | 2.36 | (0.33 | ) | 0.80 | (0.27 | ) | (5.46 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 2.78 | 0.05 | 1.15 | (0.08 | ) | (5.24 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.39 | ) | (0.67 | ) | (0.33 | ) | (0.20 | ) | (0.34 | ) | ||||||||||
Return of capital | — | (0.01 | ) | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.39 | ) | (0.68 | ) | (0.33 | ) | (0.20 | ) | (0.34 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 14.36 | $ | 11.97 | $ | 12.60 | $ | 11.78 | $ | 12.06 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 23.43 | % | 1.11 | % | 9.59 | % | (0.60 | )% | (29.15 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 71,216 | $ | 25,386 | $ | 31,256 | $ | 58,896 | $ | 53,042 | ||||||||||
Ratio of expenses to average net assets | 0.50 | % | 0.53 | % | 0.52 | % | 0.54 | % | 0.56 | % | ||||||||||
Ratio of net investment income to average net assets | 3.01 | % | 3.35 | % | 2.56 | % | 1.55 | % | 2.23 | % | ||||||||||
Portfolio turnover ratec | 24 | % | 19 | % | 12 | % | 17 | % | 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 | 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 Emerging Markets Eastern Europe ETF |
Year ended Aug. 31, 2013 | Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Period from to Aug. 31, 2010 | |||||||||||||
Net asset value, beginning of period | $ | 24.24 | $ | 29.28 | $ | 25.66 | $ | 24.65 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Income from investment operations: | ||||||||||||||||
Net investment incomeb | 0.73 | 1.01 | 0.67 | 0.26 | ||||||||||||
Net realized and unrealized gain (loss)c | (0.77 | ) | (4.92 | ) | 3.45 | 0.89 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total from investment operations | (0.04 | ) | (3.91 | ) | 4.12 | 1.15 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Less distributions from: | ||||||||||||||||
Net investment income | (0.32 | ) | (1.13 | ) | (0.50 | ) | (0.13 | ) | ||||||||
Net realized gain | — | — | — | (0.01 | ) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions | (0.32 | ) | (1.13 | ) | (0.50 | ) | (0.14 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net asset value, end of period | $ | 23.88 | $ | 24.24 | $ | 29.28 | $ | 25.66 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total return | (0.20 | )% | (13.14 | )% | 15.86 | % | 4.68 | %d | ||||||||
|
|
|
|
|
|
|
| |||||||||
Ratios/Supplemental data: | ||||||||||||||||
Net assets, end of period (000s) | $ | 121,797 | $ | 20,602 | $ | 32,212 | $ | 12,832 | ||||||||
Ratio of expenses to average net assetse | 0.67 | % | 0.69 | % | 0.68 | % | 0.69 | % | ||||||||
Ratio of expenses to average net assets prior to waived fees | n/a | n/a | 0.68 | % | n/a | |||||||||||
Ratio of net investment income to average net assetse | 2.96 | % | 3.97 | % | 2.06 | % | 1.05 | % | ||||||||
Portfolio turnover ratef | 9 | % | 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.
74 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI EMU ETF | ||||||||||||||||||||
Year ended Aug. 31, 2013 | Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | ||||||||||||||||
Net asset value, beginning of year | $ | 29.09 | $ | 31.55 | $ | 30.75 | $ | 35.64 | $ | 45.97 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.92 | 1.02 | 1.23 | 0.80 | 0.93 | |||||||||||||||
Net realized and unrealized gain (loss)b | 5.55 | (2.38 | ) | 0.71 | (4.76 | ) | (9.97 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 6.47 | (1.36 | ) | 1.94 | (3.96 | ) | (9.04 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.92 | ) | (1.10 | ) | (1.14 | ) | (0.93 | ) | (1.29 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.92 | ) | (1.10 | ) | (1.14 | ) | (0.93 | ) | (1.29 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 34.64 | $ | 29.09 | $ | 31.55 | $ | 30.75 | $ | 35.64 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 22.43 | % | (3.99 | )% | 5.78 | % | (11.19 | )% | (19.05 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 3,539,980 | $ | 794,226 | $ | 738,233 | $ | 823,972 | $ | 741,270 | ||||||||||
Ratio of expenses to average net assetsc | 0.50 | % | 0.53 | % | 0.52 | % | 0.54 | % | 0.56 | % | ||||||||||
Ratio of net investment income to average net assets | 2.74 | % | 3.55 | % | 3.38 | % | 2.29 | % | 3.07 | % | ||||||||||
Portfolio turnover rated | 5 | % | 7 | % | 8 | % | 5 | % | 8 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | 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.
FINANCIAL HIGHLIGHTS | 75 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI France ETF | ||||||||||||||||||||
Year ended Aug. 31, 2013 | Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | ||||||||||||||||
Net asset value, beginning of year | $ | 20.70 | $ | 22.60 | $ | 21.03 | $ | 24.28 | $ | 30.70 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.69 | 0.59 | 0.86 | 0.65 | 0.66 | |||||||||||||||
Net realized and unrealized gain (loss)b | 4.14 | (1.80 | ) | 1.38 | (3.30 | ) | (6.13 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 4.83 | (1.21 | ) | 2.24 | (2.65 | ) | (5.47 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.68 | ) | (0.69 | ) | (0.67 | ) | (0.60 | ) | (0.95 | ) | ||||||||||
Return of capital | — | (0.00 | )c | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.68 | ) | (0.69 | ) | (0.67 | ) | (0.60 | ) | (0.95 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 24.85 | $ | 20.70 | $ | 22.60 | $ | 21.03 | $ | 24.28 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 23.56 | % | (5.05 | )% | 10.24 | % | (10.98 | )% | (17.11 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 526,839 | $ | 401,626 | $ | 357,137 | $ | 239,706 | $ | 184,511 | ||||||||||
Ratio of expenses to average net assetsd | 0.51 | % | 0.53 | % | 0.52 | % | 0.53 | % | 0.55 | % | ||||||||||
Ratio of net investment income to average net assets | 2.94 | % | 2.91 | % | 3.38 | % | 2.71 | % | 3.18 | % | ||||||||||
Portfolio turnover ratee | 5 | % | 6 | % | 6 | % | 6 | % | 6 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | 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.
76 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Germany ETF | ||||||||||||||||||||
Year ended Aug. 31, 2013 | Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | ||||||||||||||||
Net asset value, beginning of year | $ | 21.34 | $ | 21.02 | $ | 19.45 | $ | 20.86 | $ | 27.55 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.46 | 0.56 | 0.86 | 0.38 | 0.58 | |||||||||||||||
Net realized and unrealized gain (loss)b | 4.24 | 0.34 | 1.38 | (1.49 | ) | (6.65 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 4.70 | 0.90 | 2.24 | (1.11 | ) | (6.07 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.43 | ) | (0.58 | ) | (0.67 | ) | (0.30 | ) | (0.62 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.43 | ) | (0.58 | ) | (0.67 | ) | (0.30 | ) | (0.62 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 25.61 | $ | 21.34 | $ | 21.02 | $ | 19.45 | $ | 20.86 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 22.11 | % | 4.55 | % | 10.84 | % | (5.35 | )% | (21.62 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 4,655,875 | $ | 2,797,029 | $ | 2,768,171 | $ | 1,487,881 | $ | 619,638 | ||||||||||
Ratio of expenses to average net assets | 0.51 | % | 0.53 | % | 0.51 | % | 0.53 | % | 0.55 | % | ||||||||||
Ratio of net investment income to average net assets | 1.88 | % | 2.72 | % | 3.45 | % | 1.80 | % | 3.18 | % | ||||||||||
Portfolio turnover ratec | 4 | % | 4 | % | 13 | % | 5 | % | 15 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 77 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Italy Capped ETF | ||||||||||||||||||||
Year ended Aug. 31, 2013 | Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | ||||||||||||||||
Net asset value, beginning of year | $ | 11.78 | $ | 13.58 | $ | 15.00 | $ | 19.05 | $ | 25.04 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.36 | 0.41 | 0.54 | 0.39 | 0.47 | |||||||||||||||
Net realized and unrealized gain (loss)b | 1.23 | (1.79 | ) | (1.47 | ) | (3.99 | ) | (5.82 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 1.59 | (1.38 | ) | (0.93 | ) | (3.60 | ) | (5.35 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.30 | ) | (0.42 | ) | (0.49 | ) | (0.44 | ) | (0.64 | ) | ||||||||||
Return of capital | (0.01 | ) | (0.00 | )c | — | (0.01 | ) | — | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.31 | ) | (0.42 | ) | (0.49 | ) | (0.45 | ) | (0.64 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 13.06 | $ | 11.78 | $ | 13.58 | $ | 15.00 | $ | 19.05 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 13.58 | % | (9.98 | )% | (6.80 | )% | (19.11 | )% | (20.78 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 717,122 | $ | 196,212 | $ | 144,612 | $ | 76,500 | $ | 125,716 | ||||||||||
Ratio of expenses to average net assetsd | 0.50 | % | 0.53 | % | 0.51 | % | 0.54 | % | 0.55 | % | ||||||||||
Ratio of net investment income to average net assets | 2.78 | % | 3.41 | % | 3.15 | % | 2.17 | % | 2.85 | % | ||||||||||
Portfolio turnover ratee | 45 | % | 14 | % | 16 | % | 12 | % | 18 | % |
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.
78 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Netherlands ETF | ||||||||||||||||||||
Year ended Aug. 31, 2013 | Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | ||||||||||||||||
Net asset value, beginning of year | $ | 18.23 | $ | 18.45 | $ | 17.89 | $ | 18.52 | $ | 24.38 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.44 | 0.39 | 0.48 | 0.45 | 0.35 | |||||||||||||||
Net realized and unrealized gain (loss)b | 4.19 | (0.08 | ) | 0.55 | (0.70 | ) | (5.55 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 4.63 | 0.31 | 1.03 | (0.25 | ) | (5.20 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.34 | ) | (0.53 | ) | (0.47 | ) | (0.38 | ) | (0.66 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.34 | ) | (0.53 | ) | (0.47 | ) | (0.38 | ) | (0.66 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 22.52 | $ | 18.23 | $ | 18.45 | $ | 17.89 | $ | 18.52 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 25.57 | % | 1.96 | % | 5.44 | % | (1.44 | )% | (20.59 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 253,390 | $ | 78,397 | $ | 121,740 | $ | 147,611 | $ | 83,351 | ||||||||||
Ratio of expenses to average net assets | 0.50 | % | 0.53 | % | 0.52 | % | 0.53 | % | 0.55 | % | ||||||||||
Ratio of net investment income to average net assets | 2.09 | % | 2.21 | % | 2.26 | % | 2.31 | % | 2.24 | % | ||||||||||
Portfolio turnover ratec | 11 | % | 10 | % | 6 | % | 9 | % | 15 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 79 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Spain Capped ETF | ||||||||||||||||||||
Year ended Aug. 31, 2013 | Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | ||||||||||||||||
Net asset value, beginning of year | $ | 26.28 | $ | 35.89 | $ | 37.02 | $ | 47.65 | $ | 50.41 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 1.33 | 2.12 | 2.14 | 1.64 | 1.75 | |||||||||||||||
Net realized and unrealized gain (loss)b | 4.07 | (8.93 | ) | (1.36 | ) | (10.01 | ) | (2.14 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 5.40 | (6.81 | ) | 0.78 | (8.37 | ) | (0.39 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (1.24 | ) | (2.80 | ) | (1.91 | ) | (2.26 | ) | (2.37 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (1.24 | ) | (2.80 | ) | (1.91 | ) | (2.26 | ) | (2.37 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 30.44 | $ | 26.28 | $ | 35.89 | $ | 37.02 | $ | 47.65 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 20.88 | % | (19.36 | )% | 1.78 | % | (17.91 | )% | 0.64 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 417,778 | $ | 195,093 | $ | 180,360 | $ | 194,362 | $ | 278,734 | ||||||||||
Ratio of expenses to average net assets | 0.51 | % | 0.53 | % | 0.52 | % | 0.54 | % | 0.56 | % | ||||||||||
Ratio of net investment income to average net assets | 4.45 | % | 7.60 | % | 5.31 | % | 3.72 | % | 4.70 | % | ||||||||||
Portfolio turnover ratec | 24 | % | 17 | % | 14 | % | 9 | % | 19 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
80 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Sweden ETF | ||||||||||||||||||||
Year ended Aug. 31, 2013 | Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | ||||||||||||||||
Net asset value, beginning of year | $ | 27.32 | $ | 26.82 | $ | 24.46 | $ | 22.86 | $ | 24.48 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.97 | 0.83 | 1.18 | 0.48 | 0.40 | |||||||||||||||
Net realized and unrealized gain (loss)b | 4.70 | 0.58 | 2.22 | 1.73 | (1.56 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 5.67 | 1.41 | 3.40 | 2.21 | (1.16 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (1.02 | ) | (0.86 | ) | (1.04 | ) | (0.61 | ) | (0.46 | ) | ||||||||||
Return of capital | — | (0.05 | ) | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (1.02 | ) | (0.91 | ) | (1.04 | ) | (0.61 | ) | (0.46 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 31.97 | $ | 27.32 | $ | 26.82 | $ | 24.46 | $ | 22.86 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 21.02 | % | 5.57 | % | 13.40 | % | 9.70 | % | (4.04 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 434,006 | $ | 370,832 | $ | 329,887 | $ | 249,491 | $ | 190,333 | ||||||||||
Ratio of expenses to average net assets | 0.51 | % | 0.53 | % | 0.51 | % | 0.53 | % | 0.55 | % | ||||||||||
Ratio of net investment income to average net assets | 3.13 | % | 3.17 | % | 3.80 | % | 1.97 | % | 2.34 | % | ||||||||||
Portfolio turnover ratec | 7 | % | 7 | % | 9 | % | 10 | % | 9 | % |
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 | 81 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Switzerland Capped ETF | ||||||||||||||||||||
Year ended Aug. 31, 2013 | Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | ||||||||||||||||
Net asset value, beginning of year | $ | 23.85 | $ | 24.67 | $ | 21.64 | $ | 20.71 | $ | 23.09 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.67 | 0.63 | 0.59 | 0.39 | 0.25 | |||||||||||||||
Net realized and unrealized gain (loss)b | 5.44 | (0.80 | ) | 2.97 | 0.90 | (2.30 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 6.11 | (0.17 | ) | 3.56 | 1.29 | (2.05 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.60 | ) | (0.65 | ) | (0.53 | ) | (0.36 | ) | (0.33 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.60 | ) | (0.65 | ) | (0.53 | ) | (0.36 | ) | (0.33 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 29.36 | $ | 23.85 | $ | 24.67 | $ | 21.64 | $ | 20.71 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 25.71 | % | (0.53 | )% | 16.30 | % | 6.35 | % | (8.63 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 902,860 | $ | 554,570 | $ | 524,159 | $ | 405,755 | $ | 271,855 | ||||||||||
Ratio of expenses to average net assets | 0.51 | % | 0.53 | % | 0.52 | % | 0.53 | % | 0.56 | % | ||||||||||
Ratio of net investment income to average net assets | 2.38 | % | 2.73 | % | 2.35 | % | 1.80 | % | 1.42 | % | ||||||||||
Portfolio turnover ratec | 13 | % | 8 | % | 7 | % | 7 | % | 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.
82 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI United Kingdom ETF | ||||||||||||||||||||
Year ended Aug. 31, 2013 | Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | ||||||||||||||||
Net asset value, beginning of year | $ | 16.91 | $ | 16.43 | $ | 15.01 | $ | 15.02 | $ | 19.35 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.66 | 0.64 | 0.54 | 0.46 | 0.50 | |||||||||||||||
Net realized and unrealized gain (loss)b | 1.49 | 0.46 | 1.35 | (0.03 | ) | (4.26 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 2.15 | 1.10 | 1.89 | 0.43 | (3.76 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.51 | ) | (0.62 | ) | (0.47 | ) | (0.44 | ) | (0.57 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.51 | ) | (0.62 | ) | (0.47 | ) | (0.44 | ) | (0.57 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 18.55 | $ | 16.91 | $ | 16.43 | $ | 15.01 | $ | 15.02 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 12.91 | % | 6.94 | % | 12.50 | % | 2.87 | % | (18.68 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 2,670,796 | $ | 1,356,494 | $ | 1,199,333 | $ | 930,412 | $ | 739,124 | ||||||||||
Ratio of expenses to average net assets | 0.51 | % | 0.53 | % | 0.52 | % | 0.53 | % | 0.55 | % | ||||||||||
Ratio of net investment income to average net assets | 3.61 | % | 3.88 | % | 3.07 | % | 2.98 | % | 3.90 | % | ||||||||||
Portfolio turnover ratec | 4 | % | 7 | % | 4 | % | 7 | % | 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 | 83 |
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 ETF | Former Namea | Diversification Classification | ||||
MSCI Austria Capped | iShares MSCI Austria Capped Investable Market Index Fund | Non-diversified | ||||
MSCI Belgium Capped | iShares MSCI Belgium Capped Investable Market Index Fund | Non-diversified | ||||
MSCI Emerging Markets Eastern Europe | iShares MSCI Emerging Markets Eastern Europe Index Fund | Non-diversified | ||||
MSCI EMU | iShares MSCI EMU Index Fund | Diversified | ||||
MSCI France | iShares MSCI France Index Fund | Non-diversified | ||||
MSCI Germany | iShares MSCI Germany Index Fund | Non-diversified | ||||
MSCI Italy Capped | iShares MSCI Italy Capped Index Fund | Non-diversified | ||||
MSCI Netherlands | iShares MSCI Netherlands Investable Market Index Fund | Non-diversified | ||||
MSCI Spain Capped | iShares MSCI Spain Capped Index Fund | Non-diversified | ||||
MSCI Sweden | iShares MSCI Sweden Index Fund | Non-diversified | ||||
MSCI Switzerland Capped | iShares MSCI Switzerland Capped Index Fund | Non-diversified | ||||
MSCI United Kingdom | iShares MSCI United Kingdom Index Fund | Non-diversified |
a | The Funds changed their names effective July 1, 2013. |
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.
Non-diversified funds generally hold securities of fewer issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers.
Each Fund invests in securities of non-U.S. issuers that trade in non-U.S. markets. This involves 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. These risks are heightened for investments in emerging market and frontier market countries.
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.
84 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to 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 and, for financial reporting purposes, as of the report date should the reporting period end on a day that the Fund’s listing exchange is not 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 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, reviews of 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
NOTESTO FINANCIAL STATEMENTS | 85 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
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 is not necessarily an indication of the risk associated with investing in the 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 Global Valuation Committee’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 Funds’ investments according to the fair value hierarchy as of August 31, 2013. The breakdown of each Fund’s investments into major categories is disclosed in its respective schedule of investments.
iShares ETF and
| Investments | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
MSCI Austria Capped | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 81,411,463 | $ | — | $ | 25 | $ | 81,411,488 | ||||||||
Money Market Funds | 2,672,758 | — | — | 2,672,758 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 84,084,221 | $ | — | $ | 25 | $ | 84,084,246 | |||||||||
|
|
|
|
|
|
|
| |||||||||
MSCI Belgium Capped | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 71,112,045 | $ | — | $ | — | $ | 71,112,045 | ||||||||
Money Market Funds | 2,863,199 | — | — | 2,863,199 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 73,975,244 | $ | — | $ | — | $ | 73,975,244 | |||||||||
|
|
|
|
|
|
|
| |||||||||
MSCI Emerging Markets Eastern Europe | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 116,469,025 | $ | — | $ | — | $ | 116,469,025 | ||||||||
Preferred Stocks | 4,428,052 | — | — | 4,428,052 | ||||||||||||
Money Market Funds | 219,611 | — | — | 219,611 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 121,116,688 | $ | — | $ | — | $ | 121,116,688 | |||||||||
|
|
|
|
|
|
|
| |||||||||
86 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
iShares ETF and
| Investments | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
MSCI EMU | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 3,459,834,306 | $ | 55,943 | $ | 9 | $ | 3,459,890,258 | ||||||||
Preferred Stocks | — | 348 | — | 348 | ||||||||||||
Rights | 73,459,831 | — | — | 73,459,831 | ||||||||||||
Money Market Funds | 46,149,664 | — | — | 46,149,664 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 3,579,443,801 | $ | 56,291 | $ | 9 | $ | 3,579,500,101 | |||||||||
|
|
|
|
|
|
|
| |||||||||
MSCI France | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 526,511,311 | $ | — | $ | — | $ | 526,511,311 | ||||||||
Money Market Funds | 1,389,865 | — | — | 1,389,865 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 527,901,176 | $ | — | $ | — | $ | 527,901,176 | |||||||||
|
|
|
|
|
|
|
| |||||||||
MSCI Germany | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 4,304,047,978 | $ | — | $ | — | $ | 4,304,047,978 | ||||||||
Preferred Stocks | 323,217,021 | — | — | 323,217,021 | ||||||||||||
Money Market Funds | 26,598,801 | — | — | 26,598,801 | ||||||||||||
Liabilities: | ||||||||||||||||
Futures Contractsa | (383,449 | ) | — | — | (383,449 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 4,653,480,351 | $ | — | $ | — | $ | 4,653,480,351 | |||||||||
|
|
|
|
|
|
|
| |||||||||
MSCI Italy Capped | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 718,260,903 | $ | — | $ | — | $ | 718,260,903 | ||||||||
Rights | — | 1,346 | 1,346 | |||||||||||||
Money Market Funds | 29,007,013 | — | — | 29,007,013 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 747,267,916 | $ | 1,346 | $ | — | $ | 747,269,262 | |||||||||
|
|
|
|
|
|
|
| |||||||||
MSCI Netherlands | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 252,500,139 | $ | — | $ | 1 | $ | 252,500,140 | ||||||||
Money Market Funds | 7,664,564 | — | — | 7,664,564 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 260,164,703 | $ | — | $ | 1 | $ | 260,164,704 | |||||||||
|
|
|
|
|
|
|
| |||||||||
MSCI Spain Capped | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 415,730,552 | $ | 222,138 | $ | — | $ | 415,952,690 | ||||||||
Money Market Funds | 10,404,551 | — | — | 10,404,551 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 426,135,103 | $ | 222,138 | $ | — | $ | 426,357,241 | |||||||||
|
|
|
|
|
|
|
| |||||||||
NOTESTO FINANCIAL STATEMENTS | 87 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
iShares ETF and
| Investments | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
MSCI Sweden | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 433,847,376 | $ | — | $ | — | $ | 433,847,376 | ||||||||
Money Market Funds | 14,515 | — | — | 14,515 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 433,861,891 | $ | — | $ | — | $ | 433,861,891 | |||||||||
|
|
|
|
|
|
|
| |||||||||
MSCI Switzerland Capped | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 897,654,768 | $ | — | $ | — | $ | 897,654,768 | ||||||||
Money Market Funds | 49,816 | — | — | 49,816 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 897,704,584 | $ | — | $ | — | $ | 897,704,584 | |||||||||
|
|
|
|
|
|
|
| |||||||||
MSCI United Kingdom | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 2,643,733,469 | $ | — | $ | — | $ | 2,643,733,469 | ||||||||
Money Market Funds | 5,383,417 | — | — | 5,383,417 | ||||||||||||
Futures Contractsa | 107,092 | — | — | 107,092 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 2,649,223,978 | $ | — | $ | — | $ | 2,649,223,978 | |||||||||
|
|
|
|
|
|
|
| |||||||||
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, 2013 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.
88 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
FOREIGN TAXES
The Funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, capital gains on investments, or certain foreign currency transactions. 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 stock dividends are presented as “other foreign taxes,” and foreign taxes on capital gains from sales of investments and foreign taxes on foreign currency transactions are included in their respective net realized gain (loss) categories. Foreign taxes payable as of August 31, 2013, 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.
RECENT ACCOUNTING STANDARD
In December 2011, the Financial Accounting Standards Board issued guidance to enhance current disclosure requirements on offsetting of certain assets and liabilities and enable financial statement users to compare financial statements prepared under U.S. GAAP and International Financial Reporting Standards (IFRS). The new disclosures are required for investments and derivative financial instruments subject to master netting agreements or similar agreements and require an entity to disclose both gross and net information about such investments and transactions eligible for offset in the statement of assets and liabilities. The scope of the disclosure requirements for offsetting will be limited to certain derivative instruments and securities lending transactions. In addition, the standard requires disclosure of collateral received and posted in connection with master netting agreements or similar agreements. The guidance is effective for financial statements for fiscal years beginning after January 1, 2013, and interim periods within those fiscal years. Management is evaluating the impact of this guidance on the Funds’ financial statements and disclosures.
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.
NOTESTO FINANCIAL STATEMENTS | 89 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
For its investment advisory services to each Fund except for the iShares MSCI Emerging Markets Eastern Europe ETF, 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 the iShares MSCI Emerging Markets Eastern Europe ETF, 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”), an affiliate of BFA, to serve as securities lending agent for the Funds, subject to applicable conditions. 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 Funds retain a portion of securities lending income and remit a remaining portion to BTC as compensation for its services as securities lending agent. The Funds benefit from a borrower default indemnity provided by BlackRock. As securities lending agent, BTC bears all operational costs directly related to securities lending as well as the cost of borrower default indemnification. 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, 2013, each Fund retained 65% of securities lending income and paid a fee to BTC equal to 35% of such income in the amounts as follow:
iShares ETF | Securities Lending Agent Fees | |||
MSCI Austria Capped | $ | 4,870 | ||
MSCI Belgium Capped | 10,051 | |||
MSCI Emerging Markets Eastern Europe | 65 | |||
MSCI EMU | 251,710 | |||
MSCI France | 31,363 |
iShares ETF | Securities Lending Agent Fees | |||
MSCI Germany | $ | 194,860 | ||
MSCI Italy Capped | 184,543 | |||
MSCI Netherlands | 13,750 | |||
MSCI Spain Capped | 196,100 | |||
MSCI Sweden | 553 | |||
MSCI United Kingdom | 45,427 |
90 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
BlackRock Investments, LLC, an affiliate of BFA, is the distributor for each Fund. Pursuant to the 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.
3. | INVESTMENT PORTFOLIO TRANSACTIONS |
Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended August 31, 2013 were as follows:
iShares ETF | Purchases | Sales | ||||||
MSCI Austria Capped | $ | 20,797,293 | $ | 20,817,576 | ||||
MSCI Belgium Capped | 12,747,713 | 12,286,921 | ||||||
MSCI Emerging Markets Eastern Europe | 7,191,463 | 4,733,794 | ||||||
MSCI EMU | 130,046,186 | 113,266,566 | ||||||
MSCI France | 24,998,225 | 24,995,310 | ||||||
MSCI Germany | 136,830,213 | 134,817,627 | ||||||
MSCI Italy Capped | 224,576,832 | 222,243,072 | ||||||
MSCI Netherlands | 19,462,354 | 16,108,572 | ||||||
MSCI Spain Capped | 71,234,831 | 63,606,133 | ||||||
MSCI Sweden | 28,307,989 | 28,991,226 | ||||||
MSCI Switzerland Capped | 104,692,791 | 101,116,728 | ||||||
MSCI United Kingdom | 79,667,880 | 74,762,108 |
In-kind transactions (see Note 4) for the year ended August 31, 2013 were as follows:
iShares ETF | In-kind Purchases | In-kind Sales | ||||||
MSCI Austria Capped | $ | 81,206,016 | $ | 67,473,375 | ||||
MSCI Belgium Capped | 43,505,683 | 6,270,277 | ||||||
MSCI Emerging Markets Eastern Europe | 121,667,559 | 13,350,607 | ||||||
MSCI EMU | 3,630,770,339 | 1,119,837,513 | ||||||
MSCI France | 198,384,653 | 155,026,673 | ||||||
MSCI Germany | 2,872,653,578 | 1,609,740,093 | ||||||
MSCI Italy Capped | 685,344,701 | 180,423,198 | ||||||
MSCI Netherlands | 190,623,960 | 41,430,853 | ||||||
MSCI Spain Capped | 455,949,846 | 263,621,545 | ||||||
MSCI Sweden | 90,069,674 | 85,985,183 | ||||||
MSCI Switzerland Capped | 346,955,694 | 141,851,224 | ||||||
MSCI United Kingdom | 1,194,077,683 | 18,163,270 |
NOTESTO FINANCIAL STATEMENTS | 91 |
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 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 may also 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 market value of the loaned securities is determined at the close of each business day of the Funds and any additional required collateral is delivered to the Funds on the next business day. 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.
As of August 31, 2013, any securities on loan were collateralized by cash. The cash collateral received was invested in money market funds managed by BFA. The value of any securities on loan as of August 31, 2013 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.
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. To mitigate these risks, the Funds benefit from a borrower default indemnity provided by BlackRock. BlackRock’s indemnity allows for full replacement of securities lent. Each Fund could suffer a loss if the value of the investments purchased with cash collateral falls below the value of the cash collateral received.
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, 2013, attributable to passive foreign investment companies, the expiration of capital loss carryforwards,
92 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
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 ETF | Paid-in Capital | Undistributed Net Investment Income/Distributions in Excess of Net Investment Income | Undistributed Net Realized Gain/Accumulated Net Realized Loss | |||||||||
MSCI Austria Capped | $ | 3,176,511 | $ | 13,096 | $ | (3,189,607 | ) | |||||
MSCI Belgium Capped | 1,085,281 | 53,717 | (1,138,998 | ) | ||||||||
MSCI Emerging Markets Eastern Europe | (1,767,260 | ) | (11,983 | ) | 1,779,243 | |||||||
MSCI EMU | 113,112,662 | 120,471 | (113,233,133 | ) | ||||||||
MSCI France | 35,752,593 | 47,405 | (35,799,998 | ) | ||||||||
MSCI Germany | 191,977,211 | 642,347 | (192,619,558 | ) | ||||||||
MSCI Italy Capped | (4,096,181 | ) | 106,035 | 3,990,146 | ||||||||
MSCI Netherlands | 6,614,274 | 26,933 | (6,641,207 | ) | ||||||||
MSCI Spain Capped | 3,776,171 | 94,583 | (3,870,754 | ) | ||||||||
MSCI Sweden | 7,817,736 | (19,064 | ) | (7,798,672 | ) | |||||||
MSCI Switzerland Capped | 40,693,650 | 349,428 | (41,043,078 | ) | ||||||||
MSCI United Kingdom | (26,313 | ) | 101,074 | (74,761 | ) |
The tax character of distributions paid during the years ended August 31, 2013 and August 31, 2012 was as follows:
iShares ETF | 2013 | 2012 | ||||||
MSCI Austria Capped | ||||||||
Ordinary income | $ | 1,541,991 | $ | 1,874,586 | ||||
|
|
|
| |||||
MSCI Belgium Capped | ||||||||
Ordinary income | $ | 1,577,907 | $ | 1,434,412 | ||||
Return of capital | — | 27,668 | ||||||
|
|
|
| |||||
$ | 1,577,907 | $ | 1,462,080 | |||||
|
|
|
| |||||
MSCI Emerging Markets Eastern Europe | ||||||||
Ordinary income | $ | 885,320 | $ | 999,697 | ||||
|
|
|
| |||||
MSCI EMU | ||||||||
Ordinary income | $ | 54,004,208 | $ | 26,115,000 | ||||
|
|
|
| |||||
MSCI France | ||||||||
Ordinary income | $ | 13,699,998 | $ | 8,849,764 | ||||
Return of capital | — | 2,754 | ||||||
|
|
|
| |||||
$ | 13,699,998 | $ | 8,852,518 | |||||
|
|
|
| |||||
MSCI Germany | ||||||||
Ordinary income | $ | 70,323,492 | $ | 74,836,476 | ||||
|
|
|
| |||||
NOTESTO FINANCIAL STATEMENTS | 93 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
iShares ETF | 2013 | 2012 | ||||||
MSCI Italy Capped | ||||||||
Ordinary income | $ | 13,839,281 | $ | 4,578,996 | ||||
Return of capital | 452,885 | 1,125 | ||||||
|
|
|
| |||||
$ | 14,292,166 | $ | 4,580,121 | |||||
|
|
|
| |||||
MSCI Netherlands | ||||||||
Ordinary income | $ | 2,491,248 | $ | 1,910,545 | ||||
|
|
|
| |||||
MSCI Spain Capped | ||||||||
Ordinary income | $ | 10,629,551 | $ | 11,503,970 | ||||
|
|
|
| |||||
MSCI Sweden | ||||||||
Ordinary income | $ | 12,548,817 | $ | 9,531,005 | ||||
Return of capital | — | 613,518 | ||||||
|
|
|
| |||||
$ | 12,548,817 | $ | 10,144,523 | |||||
|
|
|
| |||||
MSCI Switzerland Capped | ||||||||
Ordinary income | $ | 19,030,631 | $ | 14,947,529 | ||||
|
|
|
| |||||
MSCI United Kingdom | ||||||||
Ordinary income | $ | 51,302,175 | $ | 49,722,633 | ||||
|
|
|
| |||||
As of August 31, 2013, the tax components of accumulated net earnings (losses) were as follows:
iShares ETF | Undistributed Ordinary Income | Capital Loss | Net Unrealized Gains (Losses) a | Qualified Late-Year Losses b | Total | |||||||||||||||
MSCI Austria Capped | $ | — | $ | (63,182,096 | ) | $ | (34,546,307 | ) | $ | (11,425,974 | ) | $ | (109,154,377 | ) | ||||||
MSCI Belgium Capped | 617,898 | (43,420,799 | ) | (4,832,208 | ) | (5,637,457 | ) | (53,272,566 | ) | |||||||||||
MSCI Emerging Markets Eastern Europe | 667,494 | (1,155,155 | ) | (15,218,378 | ) | (1,142,224 | ) | (16,848,263 | ) | |||||||||||
MSCI EMU | 3,579,263 | (165,597,384 | ) | (306,790,955 | ) | (15,229,203 | ) | (484,038,279 | ) | |||||||||||
MSCI France | 126,723 | (20,910,676 | ) | (68,516,945 | ) | (7,398,793 | ) | (96,699,691 | ) | |||||||||||
MSCI Germany | — | (109,508,670 | ) | (217,062,811 | ) | (22,044,028 | ) | (348,615,509 | ) | |||||||||||
MSCI Italy Capped | — | (39,798,845 | ) | (34,304,008 | ) | (27,474,940 | ) | (101,577,793 | ) | |||||||||||
MSCI Netherlands | 819,092 | (38,497,909 | ) | (13,806,567 | ) | (2,006,500 | ) | (53,491,884 | ) | |||||||||||
MSCI Spain Capped | 4,164,108 | (50,037,548 | ) | (76,576,288 | ) | (3,430,462 | ) | (125,880,190 | ) | |||||||||||
MSCI Sweden | 1,948,854 | (35,601,581 | ) | (3,647,553 | ) | (3,767,678 | ) | (41,067,958 | ) | |||||||||||
MSCI Switzerland Capped | — | (39,164,271 | ) | 90,662,452 | (5,171,180 | ) | 46,327,001 | |||||||||||||
MSCI United Kingdom | 19,086,760 | (102,255,038 | ) | (20,298,893 | ) | (19,365,316 | ) | (122,832,487 | ) |
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, 2014. |
94 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
As of August 31, 2013, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:
iShares ETF | Non- Expiring a | Expiring 2014 | Expiring 2015 | Expiring 2016 | Expiring 2017 | Expiring 2018 | Expiring 2019 | Total | ||||||||||||||||||||||||
MSCI Austria Capped | $ | 13,211,949 | $ | — | $ | 9,795,917 | $ | 2,587,916 | $ | 7,102,366 | $ | 16,657,011 | $ | 13,826,937 | $ | 63,182,096 | ||||||||||||||||
MSCI Belgium Capped | 5,919,544 | — | — | 1,698,444 | 5,953,120 | 10,826,174 | 19,023,517 | 43,420,799 | ||||||||||||||||||||||||
MSCI Emerging Markets Eastern Europe | 950,241 | — | — | — | — | — | 204,914 | 1,155,155 | ||||||||||||||||||||||||
MSCI EMU | 40,686,903 | — | — | — | 26,644,200 | 68,035,542 | 30,230,739 | 165,597,384 | ||||||||||||||||||||||||
MSCI France | 7,140,691 | — | 158,472 | 335,795 | 3,408,374 | 7,008,530 | 2,858,814 | 20,910,676 | ||||||||||||||||||||||||
MSCI Germany | 13,389,269 | — | 4,227,713 | 3,394,735 | 27,790,050 | 28,490,949 | 32,215,954 | 109,508,670 | ||||||||||||||||||||||||
MSCI Italy Capped | 8,953,638 | — | — | 472,268 | 2,743,650 | 18,169,627 | 9,459,662 | 39,798,845 | ||||||||||||||||||||||||
MSCI Netherlands | 6,234,179 | 403,525 | 260,715 | 1,195,162 | 5,819,153 | 22,256,170 | 2,329,005 | 38,497,909 | ||||||||||||||||||||||||
MSCI Spain Capped | 20,350,046 | — | — | — | 5,946,927 | 15,120,672 | 8,619,903 | 50,037,548 | ||||||||||||||||||||||||
MSCI Sweden | 7,978,720 | 107,613 | — | 100,015 | 13,686,746 | 8,483,510 | 5,244,977 | 35,601,581 | ||||||||||||||||||||||||
MSCI Switzerland Capped | 6,801,347 | — | — | — | 2,837,786 | 22,569,380 | 6,955,758 | 39,164,271 | ||||||||||||||||||||||||
MSCI United Kingdom | 32,715,559 | 7,063,063 | — | 261,754 | 16,140,312 | 23,559,917 | 22,514,433 | 102,255,038 |
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, 2013, gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes were as follows:
iShares ETF | Tax Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation (Depreciation) | ||||||||||||
MSCI Austria Capped | $ | 118,606,144 | $ | 17,079 | $ | (34,538,977 | ) | $ | (34,521,898 | ) | ||||||
MSCI Belgium Capped | 78,807,480 | 6,208,615 | (11,040,851 | ) | (4,832,236 | ) | ||||||||||
MSCI Emerging Markets Eastern Europe | 136,326,340 | 1,817,536 | (17,027,188 | ) | (15,209,652 | ) | ||||||||||
MSCI EMU | 3,886,297,512 | 61,011,719 | (367,809,130 | ) | (306,797,411 | ) | ||||||||||
MSCI France | 596,413,156 | 20,586,631 | (89,098,611 | ) | (68,511,980 | ) | ||||||||||
MSCI Germany | 4,870,852,698 | 261,265,682 | (478,254,580 | ) | (216,988,898 | ) | ||||||||||
MSCI Italy Capped | 781,578,801 | 31,280,844 | (65,590,383 | ) | (34,309,539 | ) | ||||||||||
MSCI Netherlands | 273,965,304 | 10,262,006 | (24,062,606 | ) | (13,800,600 | ) | ||||||||||
MSCI Spain Capped | 502,931,883 | 4,017,103 | (80,591,745 | ) | (76,574,642 | ) | ||||||||||
MSCI Sweden | 437,511,087 | 34,255,883 | (37,905,079 | ) | (3,649,196 | ) | ||||||||||
MSCI Switzerland Capped | 807,008,133 | 127,148,424 | (36,451,973 | ) | 90,696,451 | |||||||||||
MSCI United Kingdom | 2,669,376,174 | 185,817,133 | (206,076,421 | ) | (20,259,288 | ) |
Management has reviewed the tax positions as of August 31, 2013, inclusive of the open tax return years, and has determined that no provision for income tax is required in the Funds’ financial statements.
NOTESTO FINANCIAL STATEMENTS | 95 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
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 the Funds as of August 31, 2013 and the related locations in the statements of assets and liabilities, presented by risk exposure category:
Assets | ||||
iShares MSCI United Kingdom ETF | ||||
Equity contracts: | ||||
Variation margin/Net assets consist of – net unrealized appreciation (depreciation)a | $ | 107,092 | ||
|
| |||
a | Represents cumulative appreciation of futures contracts as reported in the schedules of investments. |
Liabilities | ||||
iShares MSCI Germany ETF | ||||
Equity contracts: | ||||
Variation margin/Net assets consist of – net unrealized appreciation (depreciation)b | $ | (383,449 | ) | |
|
| |||
b | Represents cumulative depreciation of futures contracts as reported in the schedules of investments. |
The following table shows the realized and unrealized gains (losses) on futures contracts held by the Funds during the year ended August 31, 2013 and the related locations in the statements of operations, presented by risk exposure category:
Net Realized Gain (Loss) | ||||||||
iShares MSCI Germany ETF | iShares MSCI United Kingdom ETF | |||||||
Equity contracts: | ||||||||
Futures contracts | $ | 4,784,524 | $ | 1,219,817 | ||||
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Notes to Financial Statements (Continued)
iSHARES®, INC.
Net Change in Unrealized Appreciation/Depreciation | ||||||||
iShares MSCI Germany ETF | iShares MSCI United Kingdom ETF | |||||||
Equity contracts: | ||||||||
Futures contracts | $ | (2,015,907 | ) | $ | 74,070 | |||
|
|
|
| |||||
The following table shows the average quarter-end balances of open futures contracts for the year ended August 31, 2013:
iShares MSCI Germany ETF | iShares MSCI United Kingdom ETF | |||||||
Average number of contracts purchased | 83 | 140 | ||||||
Average value of contracts purchased | $ | 20,886,231 | $ | 13,468,808 |
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.
NOTESTO FINANCIAL STATEMENTS | 97 |
Table of Contents
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of
iShares, Inc:
In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the iShares MSCI Austria Capped ETF, iShares MSCI Belgium Capped ETF, iShares MSCI Emerging Markets Eastern Europe ETF, iShares MSCI EMU ETF, iShares MSCI France ETF, iShares MSCI Germany ETF, iShares MSCI Italy Capped ETF, iShares MSCI Netherlands ETF, iShares MSCI Spain Capped ETF, iShares MSCI Sweden ETF, iShares MSCI Switzerland Capped ETF and iShares MSCI United Kingdom ETF (the “Funds”) at August 31, 2013, 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, 2013 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
October 23, 2013
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iSHARES®, INC.
For the fiscal year ended August 31, 2013, 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 ETF | Foreign Source Income Earned | Foreign Taxes Paid | ||||||
MSCI Austria Capped | $ | 2,216,218 | $ | 270,589 | ||||
MSCI Belgium Capped | 2,167,996 | 320,232 | ||||||
MSCI Emerging Markets Eastern Europe | 2,131,627 | 303,691 | ||||||
MSCI EMU | 75,861,299 | 9,415,895 | ||||||
MSCI France | 18,801,676 | 2,666,038 | ||||||
MSCI Germany | 101,342,138 | 13,276,027 | ||||||
MSCI Italy Capped | 18,644,814 | 2,696,365 | ||||||
MSCI Netherlands | 4,396,007 | 602,587 | ||||||
MSCI Spain Capped | 13,627,231 | 721,321 | ||||||
MSCI Sweden | 16,370,666 | 2,240,728 | ||||||
MSCI Switzerland Capped | 25,511,315 | 2,913,653 | ||||||
MSCI United Kingdom | 69,469,278 | 801,316 |
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, 2013:
iShares ETF | Qualified Dividend Income | |||
MSCI Austria Capped | $ | 1,812,580 | ||
MSCI Belgium Capped | 1,898,139 | |||
MSCI Emerging Markets Eastern Europe | 1,189,011 | |||
MSCI EMU | 63,420,103 | |||
MSCI France | 16,366,036 | |||
MSCI Germany | 83,599,519 |
iShares ETF | Qualified Dividend Income | |||
MSCI Italy Capped | $ | 16,535,646 | ||
MSCI Netherlands | 3,093,835 | |||
MSCI Spain Capped | 11,350,872 | |||
MSCI Sweden | 14,789,545 | |||
MSCI Switzerland Capped | 21,944,284 | |||
MSCI United Kingdom | 52,103,491 |
In February 2014, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2013. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.
TAX INFORMATION | 99 |
Table of Contents
Board Review and Approval of Investment Advisory
Contract
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 and approve 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 March 7, 2013, April 23, 2013, and May 3, 2013, 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 16, 2013, management presented preliminary 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 5, 2013, to discuss the additional requests. At a meeting held on June 10-11, 2013, the Board, including the Independent Directors, reviewed the 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 the supplemental information management provided at the request of the Independent Directors. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information 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 reached 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 the size, sponsor, inception date, or other differentiating factors included in Lipper’s proprietary selection methodology, 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, and/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 provided in the Lipper Report may or may not provide meaningful direct comparisons to the Funds.
The Board also noted that the investment advisory fee rates 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, 2012, 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
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Board Review and Approval of Investment Advisory
Contract (Continued)
iSHARES®, INC.
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 may include funds that are not exchange traded funds or index funds, and that may have different investment objectives and/or benchmarks from the Funds. In addition, the Board noted that each Fund seeks to track its own 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, including detailed information on certain specific iShares funds requested by the Board, was also considered.
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 fee rate and expense level 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, including information about recent and proposed enhancements to the iShares business, including with respect to shareholder servicing and support, 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 during 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 acknowledged that resources to support the iShares funds and their shareholders have been added or enhanced since BlackRock’s acquisition of BFA in December 2009, 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 detailed presentations regarding BFA’s investment and risk management processes and strategies provided at the June 10-11, 2013 meeting and throughout the previous year, 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 the Funds and Profits Realized by BFA and its Affiliates — The Board reviewed information about the profitability to BlackRock 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 analyses 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)
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 101 |
Table of Contents
Board Review and Approval of Investment Advisory
Contract (Continued)
iSHARES®, INC.
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 relatively low fee rates established at inception, 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 BlackRock’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 fee rates 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 Austria Capped Investable Market Index Fund, iShares MSCI Belgium Capped Investable Market Index Fund, iShares MSCI Emerging Markets Eastern Europe Index Fund, and iShares MSCI Spain Capped 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 to the Funds, as well as other significant differences in the approach of BFA and its affiliates to the Funds, on one hand, and to the 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 and challenges 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 the “fallout” benefits or 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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Table of Contents
Board Review and Approval of Investment Advisory
Contract (Continued)
iSHARES®, INC.
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 rate under each Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that it is in the best interest of each Fund and its shareholders to approve the continuance of the Advisory Contract for the coming year.
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 103 |
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 ETF | 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 | ||||||||||||||||||||||||
MSCI Austria Capped | $ | 0.288384 | $ | — | $ | 0.050000 | $ | 0.338384 | 85 | % | — | % | 15 | % | 100 | % | ||||||||||||||||
MSCI Belgium Capped | 0.393853 | — | — | 0.393853 | 100 | — | — | 100 | ||||||||||||||||||||||||
MSCI Emerging Markets Eastern Europe | 0.318148 | — | — | 0.318148 | 100 | — | — | 100 | ||||||||||||||||||||||||
MSCI EMU | 0.917460 | — | — | 0.917460 | 100 | — | — | 100 | ||||||||||||||||||||||||
MSCI France | 0.682710 | — | — | 0.682710 | 100 | — | — | 100 | ||||||||||||||||||||||||
MSCI Italy Capped | 0.307103 | — | — | 0.307103 | 100 | — | — | 100 | ||||||||||||||||||||||||
MSCI Netherlands | 0.341021 | — | — | 0.341021 | 100 | — | — | 100 | ||||||||||||||||||||||||
MSCI Spain Capped | 1.243981 | — | — | 1.243981 | 100 | — | — | 100 | ||||||||||||||||||||||||
MSCI United Kingdom | 0.514975 | — | — | 0.514975 | 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.
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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 Austria Capped ETF
Period Covered: January 1, 2008 through June 30, 2013
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% | 5 | 0.36 | ||||||
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% | 26 | 1.88 | ||||||
Greater than 1.0% and Less than 1.5% | 70 | 5.07 | ||||||
Greater than 0.5% and Less than 1.0% | 205 | 14.83 | ||||||
Between 0.5% and –0.5% | 711 | 51.46 | ||||||
Less than –0.5% and Greater than –1.0% | 164 | 11.87 | ||||||
Less than –1.0% and Greater than –1.5% | 82 | 5.93 | ||||||
Less than –1.5% and Greater than –2.0% | 41 | 2.97 | ||||||
Less than –2.0% and Greater than –2.5% | 24 | 1.74 | ||||||
Less than –2.5% and Greater than –3.0% | 8 | 0.58 | ||||||
Less than –3.0% and Greater than –3.5% | 5 | 0.36 | ||||||
Less than –3.5% and Greater than –4.0% | 3 | 0.22 | ||||||
Less than –4.0% and Greater than –4.5% | 3 | 0.22 | ||||||
Less than –4.5% | 6 | 0.43 | ||||||
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1,382 | 100.00 | % | ||||||
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SUPPLEMENTAL INFORMATION | 105 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Belgium Capped ETF
Period Covered: January 1, 2008 through June 30, 2013
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 5.0% | 4 | 0.29 | % | |||||
Greater than 4.5% and Less than 5.0% | 1 | 0.07 | ||||||
Greater than 4.0% and Less than 4.5% | 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% | 9 | 0.65 | ||||||
Greater than 1.5% and Less than 2.0% | 30 | 2.17 | ||||||
Greater than 1.0% and Less than 1.5% | 62 | 4.49 | ||||||
Greater than 0.5% and Less than 1.0% | 182 | 13.17 | ||||||
Between 0.5% and –0.5% | 793 | 57.38 | ||||||
Less than –0.5% and Greater than –1.0% | 156 | 11.30 | ||||||
Less than –1.0% and Greater than –1.5% | 76 | 5.49 | ||||||
Less than –1.5% and Greater than –2.0% | 28 | 2.03 | ||||||
Less than –2.0% and Greater than –2.5% | 9 | 0.65 | ||||||
Less than –2.5% and Greater than –3.0% | 5 | 0.36 | ||||||
Less than –3.0% and Greater than –3.5% | 5 | 0.36 | ||||||
Less than –3.5% and Greater than –4.0% | 3 | 0.22 | ||||||
Less than –4.0% | 5 | 0.36 | ||||||
|
|
|
| |||||
1,382 | 100.00 | % | ||||||
|
|
|
|
iShares MSCI Emerging Market Eastern Europe ETF
Period Covered: October 1, 2009 through June 30, 2013
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 3.5% | 3 | 0.32 | % | |||||
Greater than 3.0% and Less than 3.5% | 2 | 0.21 | ||||||
Greater than 2.5% and Less than 3.0% | 5 | 0.53 | ||||||
Greater than 2.0% and Less than 2.5% | 6 | 0.64 | ||||||
Greater than 1.5% and Less than 2.0% | 23 | 2.44 | ||||||
Greater than 1.0% and Less than 1.5% | 51 | 5.41 | ||||||
Greater than 0.5% and Less than 1.0% | 187 | 19.85 | ||||||
Between 0.5% and –0.5% | 468 | 49.69 | ||||||
Less than –0.5% and Greater than –1.0% | 93 | 9.87 | ||||||
Less than –1.0% and Greater than –1.5% | 54 | 5.73 | ||||||
Less than –1.5% and Greater than –2.0% | 29 | 3.08 | ||||||
Less than –2.0% and Greater than –2.5% | 11 | 1.17 | ||||||
Less than –2.5% and Greater than –3.0% | 3 | 0.32 | ||||||
Less than –3.0% and Greater than –3.5% | 5 | 0.53 | ||||||
Less than –3.5% and Greater than –4.0% | 2 | 0.21 | ||||||
|
|
|
| |||||
942 | 100.00 | % | ||||||
|
|
|
|
106 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI EMU ETF
Period Covered: January 1, 2008 through June 30, 2013
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% | 11 | 0.80 | ||||||
Greater than 1.5% and Less than 2.0% | 30 | 2.17 | ||||||
Greater than 1.0% and Less than 1.5% | 64 | 4.63 | ||||||
Greater than 0.5% and Less than 1.0% | 204 | 14.76 | ||||||
Between 0.5% and –0.5% | 776 | 56.16 | ||||||
Less than –0.5% and Greater than –1.0% | 151 | 10.93 | ||||||
Less than –1.0% and Greater than –1.5% | 65 | 4.70 | ||||||
Less than –1.5% and Greater than –2.0% | 31 | 2.24 | ||||||
Less than –2.0% and Greater than –2.5% | 10 | 0.72 | ||||||
Less than –2.5% and Greater than –3.0% | 7 | 0.51 | ||||||
Less than –3.0% and Greater than –3.5% | 4 | 0.29 | ||||||
Less than –3.5% and Greater than –4.0% | 2 | 0.14 | ||||||
Less than –4.0% and Greater than –4.5% | 3 | 0.22 | ||||||
Less than –4.5% and Greater than –5.0% | 1 | 0.07 | ||||||
Less than –5.0% | 1 | 0.07 | ||||||
|
|
|
| |||||
1,382 | 100.00 | % | ||||||
|
|
|
|
SUPPLEMENTAL INFORMATION | 107 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI France ETF
Period Covered: January 1, 2008 through June 30, 2013
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% | 5 | 0.36 | ||||||
Greater than 2.0% and Less than 2.5% | 11 | 0.80 | ||||||
Greater than 1.5% and Less than 2.0% | 31 | 2.24 | ||||||
Greater than 1.0% and Less than 1.5% | 74 | 5.35 | ||||||
Greater than 0.5% and Less than 1.0% | 230 | 16.64 | ||||||
Between 0.5% and –0.5% | 755 | 54.64 | ||||||
Less than –0.5% and Greater than –1.0% | 139 | 10.06 | ||||||
Less than –1.0% and Greater than –1.5% | 63 | 4.56 | ||||||
Less than –1.5% and Greater than –2.0% | 32 | 2.32 | ||||||
Less than –2.0% and Greater than –2.5% | 11 | 0.80 | ||||||
Less than –2.5% and Greater than –3.0% | 8 | 0.58 | ||||||
Less than –3.0% and Greater than –3.5% | 1 | 0.07 | ||||||
Less than –3.5% and Greater than –4.0% | 3 | 0.22 | ||||||
Less than –4.0% and Greater than –4.5% | 3 | 0.22 | ||||||
Less than –4.5% and Greater than –5.0% | 2 | 0.14 | ||||||
Less than –5.0% and Greater than –5.5% | 1 | 0.07 | ||||||
|
|
|
| |||||
1,382 | 100.00 | % | ||||||
|
|
|
|
108 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Germany ETF
Period Covered: January 1, 2008 through June 30, 2013
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% | 3 | 0.22 | ||||||
Greater than 2.0% and Less than 2.5% | 14 | 1.01 | ||||||
Greater than 1.5% and Less than 2.0% | 21 | 1.52 | ||||||
Greater than 1.0% and Less than 1.5% | 65 | 4.70 | ||||||
Greater than 0.5% and Less than 1.0% | 196 | 14.19 | ||||||
Between 0.5% and –0.5% | 832 | 60.21 | ||||||
Less than –0.5% and Greater than –1.0% | 134 | 9.71 | ||||||
Less than –1.0% and Greater than –1.5% | 59 | 4.27 | ||||||
Less than –1.5% and Greater than –2.0% | 21 | 1.52 | ||||||
Less than –2.0% and Greater than –2.5% | 9 | 0.65 | ||||||
Less than –2.5% and Greater than –3.0% | 5 | 0.36 | ||||||
Less than –3.0% and Greater than –3.5% | 4 | 0.29 | ||||||
Less than –3.5% and Greater than –4.0% | 2 | 0.14 | ||||||
Less than –4.0% and Greater than –4.5% | 2 | 0.14 | ||||||
Less than –4.5% and Greater than –5.0% | 2 | 0.14 | ||||||
|
|
|
| |||||
1,382 | 100.00 | % | ||||||
|
|
|
|
SUPPLEMENTAL INFORMATION | 109 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Italy Capped ETF
Period Covered: January 1, 2008 through June 30, 2013
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% | 6 | 0.43 | ||||||
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% | 32 | 2.32 | ||||||
Greater than 1.0% and Less than 1.5% | 100 | 7.24 | ||||||
Greater than 0.5% and Less than 1.0% | 224 | 16.22 | ||||||
Between 0.5% and –0.5% | 691 | 50.00 | ||||||
Less than –0.5% and Greater than –1.0% | 150 | 10.85 | ||||||
Less than –1.0% and Greater than –1.5% | 79 | 5.72 | ||||||
Less than –1.5% and Greater than –2.0% | 31 | 2.24 | ||||||
Less than –2.0% and Greater than –2.5% | 15 | 1.09 | ||||||
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% | 2 | 0.14 | ||||||
|
|
|
| |||||
1,382 | 100.00 | % | ||||||
|
|
|
|
110 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Netherlands ETF
Period Covered: January 1, 2008 through June 30, 2013
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% | 1 | 0.07 | ||||||
Greater than 4.5% and Less than 5.0% | 2 | 0.14 | ||||||
Greater than 4.0% and Less than 4.5% | 1 | 0.07 | ||||||
Greater than 3.5% and Less than 4.0% | 2 | 0.14 | ||||||
Greater than 3.0% and Less than 3.5% | 2 | 0.14 | ||||||
Greater than 2.5% and Less than 3.0% | 6 | 0.43 | ||||||
Greater than 2.0% and Less than 2.5% | 11 | 0.80 | ||||||
Greater than 1.5% and Less than 2.0% | 24 | 1.74 | ||||||
Greater than 1.0% and Less than 1.5% | 66 | 4.78 | ||||||
Greater than 0.5% and Less than 1.0% | 201 | 14.55 | ||||||
Between 0.5% and –0.5% | 788 | 57.03 | ||||||
Less than –0.5% and Greater than –1.0% | 150 | 10.85 | ||||||
Less than –1.0% and Greater than –1.5% | 73 | 5.29 | ||||||
Less than –1.5% and Greater than –2.0% | 22 | 1.59 | ||||||
Less than –2.0% and Greater than –2.5% | 10 | 0.72 | ||||||
Less than –2.5% and Greater than –3.0% | 7 | 0.51 | ||||||
Less than –3.0% and Greater than –3.5% | 6 | 0.43 | ||||||
Less than –3.5% and Greater than –4.0% | 1 | 0.07 | ||||||
Less than –4.0% and Greater than –4.5% | 2 | 0.14 | ||||||
Less than –4.5% | 3 | 0.22 | ||||||
|
|
|
| |||||
1,382 | 100.00 | % | ||||||
|
|
|
|
SUPPLEMENTAL INFORMATION | 111 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Spain Capped ETF
Period Covered: January 1, 2008 through June 30, 2013
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 3.5% | 11 | 0.80 | % | |||||
Greater than 3.0% and Less than 3.5% | 4 | 0.29 | ||||||
Greater than 2.5% and Less than 3.0% | 5 | 0.36 | ||||||
Greater than 2.0% and Less than 2.5% | 19 | 1.37 | ||||||
Greater than 1.5% and Less than 2.0% | 33 | 2.39 | ||||||
Greater than 1.0% and Less than 1.5% | 79 | 5.72 | ||||||
Greater than 0.5% and Less than 1.0% | 216 | 15.63 | ||||||
Between 0.5% and –0.5% | 691 | 50.00 | ||||||
Less than –0.5% and Greater than –1.0% | 171 | 12.37 | ||||||
Less than –1.0% and Greater than –1.5% | 83 | 6.01 | ||||||
Less than –1.5% and Greater than –2.0% | 34 | 2.46 | ||||||
Less than –2.0% and Greater than –2.5% | 15 | 1.09 | ||||||
Less than –2.5% and Greater than –3.0% | 11 | 0.80 | ||||||
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 | ||||||
Less than –5.5% and Greater than –6.0% | 1 | 0.07 | ||||||
|
|
|
| |||||
1,382 | 100.00 | % | ||||||
|
|
|
|
112 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Sweden ETF
Period Covered: January 1, 2008 through June 30, 2013
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 6.0% | 3 | 0.22 | % | |||||
Greater than 5.5% and Less than 6.0% | 2 | 0.14 | ||||||
Greater than 5.0% and Less than 5.5% | 3 | 0.22 | ||||||
Greater than 4.5% and Less than 5.0% | 1 | 0.07 | ||||||
Greater than 4.0% and Less than 4.5% | 2 | 0.14 | ||||||
Greater than 3.5% and Less than 4.0% | 3 | 0.22 | ||||||
Greater than 3.0% and Less than 3.5% | 5 | 0.36 | ||||||
Greater than 2.5% and Less than 3.0% | 8 | 0.58 | ||||||
Greater than 2.0% and Less than 2.5% | 13 | 0.94 | ||||||
Greater than 1.5% and Less than 2.0% | 42 | 3.04 | ||||||
Greater than 1.0% and Less than 1.5% | 87 | 6.30 | ||||||
Greater than 0.5% and Less than 1.0% | 208 | 15.05 | ||||||
Between 0.5% and –0.5% | 671 | 48.55 | ||||||
Less than –0.5% and Greater than –1.0% | 169 | 12.23 | ||||||
Less than –1.0% and Greater than –1.5% | 75 | 5.43 | ||||||
Less than –1.5% and Greater than –2.0% | 42 | 3.04 | ||||||
Less than –2.0% and Greater than –2.5% | 17 | 1.23 | ||||||
Less than –2.5% and Greater than –3.0% | 11 | 0.80 | ||||||
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 | ||||||
|
|
|
| |||||
1,382 | 100.00 | % | ||||||
|
|
|
|
SUPPLEMENTAL INFORMATION | 113 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Switzerland Capped ETF
Period Covered: January 1, 2008 through June 30, 2013
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% | 2 | 0.14 | ||||||
Greater than 2.0% and Less than 2.5% | 4 | 0.29 | ||||||
Greater than 1.5% and Less than 2.0% | 22 | 1.59 | ||||||
Greater than 1.0% and Less than 1.5% | 55 | 3.98 | ||||||
Greater than 0.5% and Less than 1.0% | 205 | 14.83 | ||||||
Between 0.5% and –0.5% | 864 | 62.53 | ||||||
Less than –0.5% and Greater than –1.0% | 114 | 8.25 | ||||||
Less than –1.0% and Greater than –1.5% | 60 | 4.34 | ||||||
Less than –1.5% and Greater than –2.0% | 17 | 1.23 | ||||||
Less than –2.0% and Greater than –2.5% | 14 | 1.01 | ||||||
Less than –2.5% and Greater than –3.0% | 4 | 0.29 | ||||||
Less than –3.0% | 6 | 0.43 | ||||||
|
|
|
| |||||
1,382 | 100.00 | % | ||||||
|
|
|
|
114 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI United Kingdom ETF
Period Covered: January 1, 2008 through June 30, 2013
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% | 6 | 0.43 | ||||||
Greater than 2.0% and Less than 2.5% | 13 | 0.94 | ||||||
Greater than 1.5% and Less than 2.0% | 39 | 2.82 | ||||||
Greater than 1.0% and Less than 1.5% | 135 | 9.78 | ||||||
Greater than 0.5% and Less than 1.0% | 366 | 26.49 | ||||||
Between 0.5% and –0.5% | 637 | 46.10 | ||||||
Less than –0.5% and Greater than –1.0% | 93 | 6.73 | ||||||
Less than –1.0% and Greater than –1.5% | 38 | 2.75 | ||||||
Less than –1.5% and Greater than –2.0% | 16 | 1.16 | ||||||
Less than –2.0% and Greater than –2.5% | 7 | 0.51 | ||||||
Less than –2.5% and Greater than –3.0% | 6 | 0.43 | ||||||
Less than –3.0% and Greater than –3.5% | 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 | ||||||
|
|
|
| |||||
1,382 | 100.00 | % | ||||||
|
|
|
|
SUPPLEMENTAL INFORMATION | 115 |
Table of Contents
Director and Officer Information
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 of the Company (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 ETF, Inc. and a Trustee of iShares U.S. ETF Trust and, as a result, oversees a total of 298 funds (as of August 31, 2013) 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 (56) | Director (since 2009). | President and Director, BlackRock, Inc. (since 2006); 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 2006); Trustee of iShares Trust (since 2009); Director of iShares MSCI Russia Capped ETF, 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 ETF, 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 Company due to his affiliations with BlackRock, Inc. |
b | Michael Latham is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BlackRock, Inc. and its affiliates. |
116 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Director and Officer Information (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 (58) | 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 Paine Webber Inc.) (2003-2005) 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Independent Chairman of iShares, Trust, iShares MSCI Russia Capped ETF, Inc. and iShares U.S. ETF Trust (since 2012). | |||
Cecilia H. Herbert (64) | Director (since 2005); Nominating and Governance Committee Chair and Equity Plus Committee Chair (since 2012). | Trustee and Member (since 2011) of the Investment Committee, WNET, the New York public broadcasting company; Director (since 1998) and President (2007-2011) of the Board of Directors, Catholic Charities CYO; Trustee (2002-2011) and Chair of the Finance and Investment Committee (2006-2010), the Thacher School; 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of Forward Funds (34 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 ETF, 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 (2 portfolios) (since 2002). | |||
John E. Kerrigan (58) | 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). |
DIRECTORAND OFFICER INFORMATION | 117 |
Table of Contents
Director and Officer Information (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 (52) | 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). | |||
George G.C. Parker (74) | 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 2000); Director of iShares MSCI Russia Capped ETF, 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 (49) | 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 (2007-2008). | Trustee of iShares Trust (since 2011); Director of iShares MSCI Russia Capped ETF, Inc. (since 2011); Trustee of iShares U.S. ETF Trust (since 2011). |
118 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Director and Officer Information (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 of Legal & Compliance, BlackRock (since 2006); Director of Legal & Compliance, BlackRock (2004-2006). | ||
Eilleen M. Clavere (61) | Secretary (since 2007). | Director of Global Fund Administration, BlackRock (since 2009); Director of Legal Administration of Intermediary Investor Business, BGI (2006-2009); Legal Counsel and Vice President of Atlas Funds, Atlas Advisers, Inc. and Atlas Securities, Inc. (2005-2006); Counsel of Kirkpatrick & Lockhart LLP (2001-2005). | ||
Jack Gee (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). | ||
Scott Radell (44) | Executive Vice President (since 2012). | Managing Director, BlackRock (since 2009); Head of Portfolio Solutions, BlackRock (since 2009); Head of Portfolio Solutions, BGI (2007-2009); Credit Portfolio Manager, BGI (2005-2007); Credit Research Analyst, BGI (2003-2005). | ||
Amy Schioldager (50) | Executive Vice President (since 2007). | Senior Managing Director, BlackRock (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008); Head of Domestic Equity Portfolio Management, BGI (2001-2006). | ||
Ira P. Shapiro (50) | Vice President (since 2007). | Managing Director, BlackRock (since 2009); Head of Strategic Product Initiatives for iShares (since 2012); Chief Legal Officer, Exchange-Traded Fund Complex (2007-2012); Associate General Counsel, BGI (2004-2009). |
DIRECTORAND OFFICER INFORMATION | 119 |
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Notes:
120 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Notes:
NOTES | 121 |
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Notes:
122 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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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.
©2013 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc. or its subsidiaries. All other marks are the property of their respective owners.
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iS-AR-82-0813
Table of Contents
AUGUST 31, 2013
2013 ANNUAL REPORT
| ![]() |
iShares, Inc.
Ø | iShares MSCI Australia ETF | EWA | NYSE Arca |
Ø | iShares MSCI Hong Kong ETF | EWH | NYSE Arca |
Ø | iShares MSCI Japan Small-Cap ETF | SCJ | NYSE Arca |
Ø | iShares MSCI Malaysia ETF | EWM | NYSE Arca |
Ø | iShares MSCI Pacific ex Japan ETF | EPP | NYSE Arca |
Ø | iShares MSCI Singapore ETF | EWS | NYSE Arca |
Ø | iShares MSCI South Korea Capped ETF | EWY | NYSE Arca |
Ø | iShares MSCI Taiwan ETF | EWT | NYSE Arca |
Ø | iShares MSCI Thailand Capped ETF | THD | NYSE Arca |
Table of Contents
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Table of Contents
Management’s Discussion of Fund Performance
iSHARES®, INC.
ASIA MARKET OVERVIEW
Asian stock markets experienced mixed performance during the 12-month period ended August 31, 2013 (the “reporting period”). Slow global growth and shifting policy winds in the Western world were among the biggest challenges for Asian equities during the reporting period.
Asian equities began the reporting period with weak performance, partially due to the European debt crisis. Global stock markets rallied in the fall of 2012 when the European Central Bank (the “ECB”) pledged to backstop the euro by buying bonds of the weaker Southern European countries. The ECB’s move relieved tension related to Europe’s debt crisis, which calmed markets throughout the world. Asian equities benefited from the rally on expectations of improving growth in Europe and the United States.
During the first quarter of 2013, Asian equities broadly declined. Stocks in Europe and the United States posted solid returns on better-than-expected economic data, while emerging markets declined on expectations that growth would remain uneven until the developed world established a solid growth trend.
Most Asian stock markets tumbled from May 2013 through the end of the reporting period. The U.S. Federal Reserve Bank (the “Fed”) announced that it may reduce bond purchases, which was helping stimulate global growth. The announcement unnerved investors, prompting a global selloff in equities and other risky assets. Emerging markets proved to be particularly vulnerable to the policy change, as most emerging countries rely heavily on foreign capital for economic growth and balance between imports and exports. Most emerging markets experienced an exodus of foreign capital, which lowered the value of their stocks and currencies.
China’s economy grew at roughly 8.0% annualized pace during the reporting period, which was down from the torrid 10.0% growth rate of prior decades. The Chinese economy continued to transition from investment and export-driven growth to a focus on domestic consumption. This shift toward more sustainable growth sources has generated slower growth rates for the Chinese economy in recent years, extending into the reporting period. Fears of bad loans and excessive debt levels hindered economic development somewhat, prompting the International Monetary Fund to sound a warning about the Chinese banking system. In June 2013, interbank lending rates hit an all-time high on fears of bad debt.
The economic slowdown in China, the largest economy in Asia, reverberated throughout Asia. Countries that rely heavily on exports to China — Indonesia, Thailand, Malaysia and South Korea — experienced economic difficulty, as exports to China and foreign investment declined. Australia’s economy also downshifted, reflecting weaker exports of natural resources to China. Meanwhile, Hong Kong’s economy continued to benefit from Chinese tourism and shopping, as visitors were attracted to the lack of sales tax and a reputation for authentic consumer items. The Philippines was also a bright spot, as services and investment grew at a relatively fast pace.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 5 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI AUSTRALIA ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | 7.06% | 6.03% | 7.45% | 7.06% | 6.03% | 7.45% | ||||||||||||||||||||
5 Years | 5.05% | 5.04% | 5.38% | 27.93% | 27.89% | 29.97% | ||||||||||||||||||||
10 Years | 12.75% | 12.55% | 12.61% | 231.90% | 226.07% | 228.06% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 24 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 892.40 | $ | 2.38 | $ | 1,000.00 | $ | 1,022.70 | $ | 2.55 | 0.50% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 24 for more information. |
6 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI AUSTRALIA ETF
The iShares MSCI Australia ETF (the “Fund”), formerly the iShares MSCI Australia Index 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 reporting period ended August 31, 2013, the total return for the Fund was 7.06%, net of fees, while the total return for the Index was 7.45%.
The Index posted a positive return during the reporting period. The Australian stock market rallied until April 2013, when concerns over Australia’s economic growth drove the stocks and the Australian dollar lower. Slowing growth in China led to a contraction in Australian mineral exports, while the residential real estate market cooled.
The financials sector, which comprised nearly half of the Index on average, delivered a positive return and contributed more to the Index’s performance than any other sector. Australian bank stocks hit an all-time high in April 2013, as record profits, increasing dividends and low levels of bad debt generated solid performance. In April, investors began to rotate away from bank stocks to less economically sensitive sectors, reacting to weaker mortgage lending and slower economic growth. Investors favored the steady growth of the Australian health care sector, which posted the Index’s highest sector return during the reporting period.
On the other end of the spectrum, energy stocks finished the reporting period relatively unchanged, as oil and gas prices experienced significant volatility. Moderate demand due to the slowing global economy and additional energy supply from North America restrained energy prices. Consumer staples stocks posted a positive return, but lagged many of the other sectors in the Index. The materials sector, which comprised nearly 20% of the Index, declined slightly during the reporting period. Many of the companies in the sector are tied to the metals and mining business, which slumped due to lower metals prices.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector* | Percentage of Net Assets |
Financial | 50.24 | % | ||
Basic Materials | 16.45 | |||
Consumer Non-Cyclical | 12.03 | |||
Consumer Cyclical | 5.77 | |||
Industrial | 4.72 | |||
Energy | 4.52 | |||
Utilities | 2.37 | |||
Communications | 2.32 | |||
Technology | 0.43 | |||
Short-Term and Other Net Assets | 1.15 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Commonwealth Bank of Australia | 11.02 | % | ||
BHP Billiton Ltd. | 10.77 | |||
Westpac Banking Corp. | 9.14 | |||
Australia and New Zealand Banking Group Ltd. | 7.65 | |||
National Australia Bank Ltd. | 7.13 | |||
Woolworths Ltd. | 4.17 | |||
Wesfarmers Ltd. | 3.84 | |||
CSL Ltd. | 3.14 | |||
Rio Tinto Ltd. | 2.38 | |||
Woodside Petroleum Ltd. | 2.36 | |||
|
| |||
TOTAL | 61.60 | % | ||
|
|
* | 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. |
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 7 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI HONG KONG ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | 15.04% | 14.20% | 15.73% | 15.04% | 14.20% | 15.73% | ||||||||||||||||||||
5 Years | 7.08% | 6.99% | 7.70% | 40.79% | 40.17% | 44.88% | ||||||||||||||||||||
10 Years | 10.76% | 10.67% | 11.36% | 177.92% | 175.54% | 193.39% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 24 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 961.90 | $ | 2.47 | $ | 1,000.00 | $ | 1,022.70 | $ | 2.55 | 0.50% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 24 for more information. |
8 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI HONG KONG ETF
The iShares MSCI Hong Kong ETF (the “Fund”), formerly the iShares MSCI Hong Kong Index 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 reporting period ended August 31, 2013, the total return for the Fund was 15.04%, net of fees, while the total return for the Index was 15.73%.
Hong Kong experienced slow economic growth during the reporting period. Nevertheless, the Hong Kong stock market rallied, boosted by solid corporate profits. The Index’s strong performance during the first half of the reporting period was limited somewhat by a sharp selloff during the early summer, as concerns about China’s banking system and the prospect of declining global liquidity concerned foreign investors. The Hong Kong stock market stabilized toward the end of the reporting period, as policy makers in the U.S. and China provided additional clarity.
The Index held more than half of its weight on average in financials stocks during the reporting period, reflecting the country’s highly developed banking system. Financials stocks delivered strong performance, contributing approximately half of the Index’s total return. Low interest rates and solid banking profits offset fears of credit problems in China, slow exports and slack global demand.
Consumer discretionary stocks were the second largest contributor to Index performance during the reporting period. Hong Kong consumer spending received a boost from Chinese tourism and shopping, as visitors continued to be attracted by the lack of sales tax and a reputation for authentic consumer items. The Index’s industrials stocks also performed well. At the other end of the spectrum, the information technology sector declined during the reporting period, detracting modestly from Index performance. The utilities sector posted a positive return, but lagged other sectors in the Index.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector* | Percentage of Net Assets |
Financial | 53.42 | % | ||
Consumer Cyclical | 14.82 | |||
Diversified | 13.89 | |||
Utilities | 11.04 | |||
Industrial | 3.90 | |||
Communications | 1.10 | |||
Consumer Non-Cyclical | 0.73 | |||
Technology | 0.65 | |||
Short-Term and Other Net Assets | 0.45 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
AIA Group Ltd. | 14.98 | % | ||
Hutchison Whampoa Ltd. | 7.36 | |||
Sun Hung Kai Properties Ltd. | 6.04 | |||
Cheung Kong (Holdings) Ltd. | 6.04 | |||
Hong Kong Exchanges and Clearing Ltd. | 4.78 | |||
CLP Holdings Ltd. | 3.95 | |||
Sands China Ltd. | 3.89 | |||
Hong Kong and China Gas Co. Ltd. (The) | 3.75 | |||
Wharf (Holdings) Ltd. (The) | 3.48 | |||
Galaxy Entertainment Group Ltd. | 3.43 | |||
|
| |||
TOTAL | 57.70 | % | ||
|
|
* | 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. |
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 9 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI JAPAN SMALL-CAP ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | 18.07% | 16.76% | 18.72% | 18.07% | 16.76% | 18.72% | ||||||||||||||||||||
5 Years | 5.03% | 5.03% | 5.35% | 27.80% | 27.83% | 29.77% | ||||||||||||||||||||
Since Inception | 2.25% | 2.11% | 2.58% | 13.51% | 12.61% | 15.60% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was 12/20/07. The first day of secondary market trading was 12/21/07.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 24 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,057.20 | $ | 2.59 | $ | 1,000.00 | $ | 1,022.70 | $ | 2.55 | 0.50% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 24 for more information. |
10 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI JAPAN SMALL-CAP ETF
The iShares MSCI Japan Small-Cap ETF (the “Fund”), formerly the iShares MSCI Japan Small Cap Index 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 reporting period ended August 31, 2013, the total return for the Fund was 18.07%, net of fees, while the total return for the Index was 18.72%.
The Index rallied sharply during the reporting period. The Japanese stock market posted its biggest gains from November 2012 to May 2013, buoyed by optimism about new leadership in Japan and changes to Japanese monetary policy.
The Japanese economy has been mired in slow growth and declining prices for more than a decade. During the reporting period, the new leadership of Japan made strong commitments to quantitative easing, or asset purchases by the Bank of Japan, to support growth and risk taking sentiment. These relatively drastic monetary policy moves ignited a sharp rally in stocks and a decline in the Japanese yen, as investors hoped that Japan’s export-driven economy would benefit from the stimulus and other economic reforms. The Japanese stock market declined with global markets during the summer of 2013, as investors reacted to the Fed’s announcement that it may slow the pace of bond purchasing.
Turning to sector performance, all of the economic sectors in the Index posted positive returns during the reporting period. The financials sector had the largest positive impact on Index performance, as investors anticipated improving credit conditions and rising profits. The industrials sector also delivered a solid contribution to return in expectation of increasing exports and higher infrastructure spending. The consumer discretionary sector performed well on the hope that Japanese consumers would increase spending following many years of heavy saving. The information technology and materials sectors rounded out the top contributors to Index performance during the reporting period, reflecting expectations of a broad-based economic recovery.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector* | Percentage of Net Assets |
Industrial | 24.91 | % | ||
Consumer Cyclical | 22.04 | |||
Financial | 18.13 | |||
Consumer Non-Cyclical | 14.29 | |||
Basic Materials | 10.88 | |||
Communications | 4.71 | |||
Technology | 4.20 | |||
Energy | 0.29 | |||
Utilities | 0.21 | |||
Diversified | 0.08 | |||
Short-Term and Other Net Assets | 0.26 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Kakaku.com Inc. | 0.60 | % | ||
Nippon Paint Co. Ltd. | 0.58 | |||
Advance Residence Investment Corp. | 0.58 | |||
Dowa Holdings Co. Ltd. | 0.54 | |||
Ebara Corp. | 0.54 | |||
Sawai Pharmaceutical Co. Ltd. | 0.53 | |||
Nippon Kayaku Co. Ltd. | 0.51 | |||
OBIC Co. Ltd. | 0.48 | |||
Zeon Corp. | 0.47 | |||
Misumi Group Inc. | 0.45 | |||
|
| |||
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. |
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 11 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI MALAYSIA ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | 3.02% | 1.73% | 3.53% | 3.02% | 1.73% | 3.53% | ||||||||||||||||||||
5 Years | 12.57% | 12.53% | 13.17% | 80.78% | 80.47% | 85.60% | ||||||||||||||||||||
10 Years | 12.69% | 12.44% | 13.35% | 230.39% | 223.11% | 250.14% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 24 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,013.80 | $ | 2.54 | $ | 1,000.00 | $ | 1,022.70 | $ | 2.55 | 0.50% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 24 for more information. |
12 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI MALAYSIA ETF
The iShares MSCI Malaysia ETF (the “Fund”), formerly the iShares MSCI Malaysia Index 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 reporting period ended August 31, 2013, the total return for the Fund was 3.02%, net of fees, while the total return for the Index was 3.53%.
The Index posted a modest positive return during the reporting period. The Malaysian stock market advanced in the first half of the reporting period, as investors anticipated improving economic prospects. In the second half of the reporting period, the Index declined sharply, as investors became concerned with slow economic growth and potential changes to the Fed’s economic stimulus. Foreign capital flowed out of the Malaysian economy, driving the Malaysian ringgit lower. Later in the summer, concerns about government debt levels and lack of substantive reform measures darkened the country’s credit outlook. As a result, Malaysian stocks finished the reporting period with a modest gain.
The financials sector, representing approximately 30% of the Index on average, was the largest contributor to performance during the reporting period. Financials stocks posted a slight gain despite credit and growth concerns in the final months of the reporting period. The energy sector posted solid gains, as the country’s largest petroleum companies logged gains amid volatile commodity prices. The utilities sector also advanced, contributing to Index performance. On the other end of the spectrum, the industrials and consumer staples sectors posted negative returns for the reporting period, detracting from Index performance.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector* | Percentage of Net Assets |
Financial | 30.03 | % | ||
Communications | 13.53 | |||
Consumer Non-Cyclical | 13.13 | |||
Consumer Cyclical | 10.48 | |||
Diversified | 9.30 | |||
Utilities | 9.09 | |||
Industrial | 5.50 | |||
Energy | 4.50 | |||
Basic Materials | 4.21 | |||
Short-Term and Other Net Assets | 0.23 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Malayan Banking Bhd | 9.87 | % | ||
CIMB Group Holdings Bhd | 7.55 | |||
Sime Darby Bhd | 5.77 | |||
Tenaga Nasional Bhd | 5.57 | |||
Genting Bhd | 4.34 | |||
Petronas Chemicals Group Bhd | 4.21 | |||
Public Bank Bhd Foreign | 4.13 | |||
Axiata Group Bhd | 3.92 | |||
DiGi.Com Bhd | 3.74 | |||
IOI Corp. Bhd | 3.55 | |||
|
| |||
TOTAL | 52.65 | % | ||
|
|
* | 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. |
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 13 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI PACIFIC EX JAPAN ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | 7.87% | 6.84% | 8.36% | 7.87% | 6.84% | 8.36% | ||||||||||||||||||||
5 Years | 5.73% | 5.75% | 6.06% | 32.15% | 32.25% | 34.21% | ||||||||||||||||||||
10 Years | 12.27% | 12.02% | 12.33% | 218.12% | 211.25% | 219.96% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 24 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 913.40 | $ | 2.36 | $ | 1,000.00 | $ | 1,022.70 | $ | 2.50 | 0.49% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 24 for more information. |
14 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI PACIFIC EX JAPAN ETF
The iShares MSCI Pacific ex Japan ETF (the “Fund”), formerly the iShares MSCI Pacific ex-Japan Index 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 reporting period ended August 31, 2013, the total return for the Fund was 7.87%, net of fees, while the total return for the Index was 8.36%.
The Index posted a single-digit return during the reporting period, buoyed by gains in Australia, Hong Kong and Singapore.
During the reporting period, the Index held nearly two-thirds of its weight on average in Australian stocks, reflecting the large size of the country’s economy and stock market capitalization relative to other Pacific region countries. As such, Australian stocks were the largest contributor to the Index’s performance during the reporting period. The Australian stock market rallied until April 2013, when concerns about economic growth sent stocks and the Australian dollar lower. Slowing growth in China led to a contraction in Australian mineral exports, while the residential real estate market cooled. The financials and health care sectors were the top performers in Australia, while energy, consumer staples and materials stocks lagged other sectors in Australia.
Hong Kong was the second largest country weighting on average and the second largest contributor to performance during the reporting period. Despite slow economic growth, the Hong Kong stock market rallied, boosted by solid corporate profits. The financials and consumer discretionary sectors were the largest positive contributors to performance in Hong Kong. Hong Kong’s information technology sector declined during the reporting period, which weighed on the Index’s return somewhat.
The Index’s allocation to Singapore stocks posted relatively flat performance for the reporting period. Singapore’s service-based economy grew at a relatively slow pace, as the economic slowdown in China continued to weigh on the Asian region. Financials stocks helped performance, while industrials stocks detracted during the reporting period, reflecting weak global trade.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector* | Percentage of Net Assets |
Financial | 50.56 | % | ||
Basic Materials | 10.44 | |||
Consumer Cyclical | 8.52 | |||
Consumer Non-Cyclical | 8.41 | |||
Industrial | 5.74 | |||
Utilities | 4.26 | |||
Diversified | 4.06 | |||
Communications | 3.90 | |||
Energy | 2.87 | |||
Technology | 0.44 | |||
Short-Term and Other Net Assets | 0.80 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Commonwealth Bank of Australia (Australia) | 6.96 | % | ||
BHP Billiton Ltd. (Australia) | 6.82 | |||
Westpac Banking Corp. (Australia) | 5.78 | |||
Australia and New Zealand Banking Group Ltd. (Australia) | 4.71 | |||
National Australia Bank Ltd. (Australia) | 4.61 | |||
AIA Group Ltd. (Hong Kong) | 3.53 | |||
Woolworths Ltd. (Australia) | 2.64 | |||
Wesfarmers Ltd. (Australia) | 2.43 | |||
CSL Ltd. (Australia) | 2.01 | |||
Hutchison Whampoa Ltd. (Hong Kong) | 1.65 | |||
|
| |||
TOTAL | 41.14 | % | ||
|
|
* | 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. |
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 15 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI SINGAPORE ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | (0.38)% | (1.28)% | 0.52% | (0.38)% | (1.28)% | 0.52% | ||||||||||||||||||||
5 Years | 6.03% | 6.19% | 6.27% | 33.99% | 35.02% | 35.52% | ||||||||||||||||||||
10 Years | 12.97% | 12.80% | 13.03% | 238.41% | 233.60% | 240.30% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 24 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 925.40 | $ | 2.43 | $ | 1,000.00 | $ | 1,022.70 | $ | 2.55 | 0.50% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 24 for more information. |
16 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI SINGAPORE ETF
The iShares MSCI Singapore ETF (the “Fund”), formerly the iShares MSCI Singapore Index 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 reporting period ended August 31, 2013, the total return for the Fund was -0.38%, net of fees, while the total return for the Index was 0.52%.
The Index posted a relatively flat return for the reporting period. Singapore’s service-based economy grew at a relatively slow pace, as the economic slowdown in China continued to weigh on the Asian region. The Index posted a solid gain until May 2013, when concerns over the Fed’s monetary policy and foreign capital outflows began driving stock prices lower.
The financials sector was the largest contributor to Index performance during the reporting period. Approximately half of the Index’s weight on average was invested in financials stocks, reflecting Singapore’s relatively large banking sector. Low interest rates and solid credit conditions led to higher profits, driving the performance of Singapore’s banks. The financials sector declined during the second half of the reporting period, as fears about China’s banking system weighed on the sector. The telecommunication services sector advanced during the reporting period, helping performance on the margin.
On the other end of the spectrum, the industrials sector fell, detracting from performance during the reporting period. Singapore’s industrials sector is narrowly focused on global shipping and trade, as the country is a center for global trade. The slow pace of global growth meant slow trade and few exports during the reporting period. Consumer-based stocks also declined, detracting from Index performance despite rising consumer spending. Toward the end of the reporting period, fear of inflation and the Fed’s potential shift to reducing monetary stimulus weighed on the consumer-based sectors.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector* | Percentage of Net Assets |
Financial | 51.11 | % | ||
Communications | 15.89 | |||
Industrial | 10.72 | |||
Consumer Cyclical | 9.80 | |||
Diversified | 6.64 | |||
Consumer Non-Cyclical | 5.16 | |||
Short-Term and Other Net Assets | 0.68 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Singapore Telecommunications Ltd. | 11.88 | % | ||
United Overseas Bank Ltd. | 11.22 | |||
Oversea-Chinese Banking Corp. Ltd. | 11.16 | |||
DBS Group Holdings Ltd. | 10.90 | |||
Keppel Corp. Ltd. | 5.17 | |||
Global Logistic Properties Ltd. | 3.56 | |||
Genting Singapore PLC | 3.46 | |||
CapitaLand Ltd. | 3.25 | |||
Singapore Press Holdings Ltd. | 2.95 | |||
Singapore Exchange Ltd. | 2.74 | |||
|
| |||
TOTAL | 66.29 | % | ||
|
|
* | 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. |
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 17 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI SOUTH KOREA CAPPED ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | 3.65% | 2.21% | 5.01% | 3.65% | 2.21% | 5.01% | ||||||||||||||||||||
5 Years | 6.68% | 6.65% | 7.34% | 38.15% | 38.01% | 42.53% | ||||||||||||||||||||
10 Years | 10.54% | 10.38% | 11.44% | 172.32% | 168.37% | 195.29% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
Index performance through February 11, 2013 reflects the performance of the MSCI Korea IndexSM. Index performance beginning on February 12, 2013 reflects the performance of the MSCI Korea 25/50 IndexSM.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 24 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 925.50 | $ | 2.96 | $ | 1,000.00 | $ | 1,022.10 | $ | 3.11 | 0.61% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 24 for more information. |
18 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI SOUTH KOREA CAPPED ETF
The iShares MSCI South Korea Capped ETF (the “Fund”), formerly the iShares MSCI South Korea Capped Index Fund, seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Korea 25/50 IndexSM (the “Index”). The Index is a free-float adjusted market capitalization-weighted index and 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 reporting period ended August 31, 2013, the total return for the Fund was 3.65%, net of fees, while the total return for the Index was 5.01%.
The Index delivered a modest gain during the reporting period. South Korean stocks began the reporting period with solid performance, but 2013 brought difficult economic conditions and declining stock prices. A sharp rally late in the reporting period helped the Index finish in positive territory.
South Korea’s economic difficulties stemmed from the global economic slowdown, as exports account for approximately half of the country’s economic growth. Slow exports meant the South Korean economic growth was stagnant throughout most of the reporting period, as choppy industrial production and slow consumer spending resulted from weak export demand. Similarly, stock prices were negatively influenced by the Fed’s announcement that its economic stimulus program could slow in the months ahead. However, late in the reporting period, the government provided economic stimulus and tax cuts, while the Bank of Korea cut interest rates. Consumer spending and construction rose, spurring faster economic growth. Stocks responded to the brighter economic outlook, staging a sharp rally during the final month of the reporting period.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector | Percentage of Net Assets |
Technology | 25.96 | % | ||
Consumer Cyclical | 21.31 | |||
Financial | 14.10 | |||
Industrial | 13.55 | |||
Basic Materials | 8.83 | |||
Communications | 5.38 | |||
Consumer Non-Cyclical | 5.31 | |||
Energy | 3.40 | |||
Utilities | 1.60 | |||
Diversified | 0.56 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Samsung Electronics Co. Ltd. | 22.36 | % | ||
Hyundai Motor Co. | 6.34 | |||
POSCO | 3.50 | |||
Hyundai Mobis Co. Ltd. | 3.16 | |||
Kia Motors Corp. | 2.95 | |||
Shinhan Financial Group Co. Ltd. | 2.91 | |||
SK Hynix Inc. | 2.46 | |||
LG Chem Ltd. | 2.23 | |||
KB Financial Group Inc. | 2.14 | |||
NHN Corp. | 2.13 | |||
|
| |||
TOTAL | 50.18 | % | ||
|
|
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 19 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI TAIWAN ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | 10.30% | 8.71% | 10.76% | 10.30% | 8.71% | 10.76% | ||||||||||||||||||||
5 Years | 4.37% | 4.33% | 4.83% | 23.85% | 23.61% | 26.59% | ||||||||||||||||||||
10 Years | 4.88% | 4.46% | 5.55% | 61.04% | 54.69% | 71.64% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 24 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,008.90 | $ | 3.09 | $ | 1,000.00 | $ | 1,022.10 | $ | 3.11 | 0.61% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 24 for more information. |
20 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI TAIWAN ETF
The iShares MSCI Taiwan ETF (the “Fund”), formerly the iShares MSCI Taiwan Index 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 reporting period ended August 31, 2013, the total return for the Fund was 10.30%, net of fees, while the total return for the Index was 10.76%.
The Index posted a solid return during the reporting period. The performance of Taiwan’s stock market fluctuated with the global economic outlook, as the Taiwanese economy relies heavily on exports. The sharpest downturn in performance occurred from May to June 2013. The Fed announced a potential reduction in its economic stimulus program, which resulted in capital flows away from emerging markets, including Taiwan. Similarly, fears related to the Chinese banking system drove markets lower during the summer of 2013. Improving exports during the last months of the reporting period spurred renewed interest in Taiwanese stocks, leading to a volatile rally.
The information technology sector, which comprised more than half of the Index on average, advanced despite modest economic growth and slow business spending. The gains in information technology stocks were responsible for approximately half of the Index’s total return during the reporting period. Financials stocks also rose, delivering the second largest contribution to Index returns. The Index held relatively small allocations to consumer-based stocks throughout the reporting period, but solid profits and steady consumer spending led to rising stock prices.
On the other end of the spectrum, energy stocks declined during the reporting period due to volatile oil and gas prices and slow global growth. The energy sector was the only sector with a negative return during the reporting period, but the Index held less than 1% in the sector on average, limiting the negative impact. Industrials and materials stocks posted modest gains, lagging other sectors in the Index during the reporting period.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector* | Percentage of Net Assets |
Technology | 36.41 | % | ||
Industrial | 18.98 | |||
Financial | 17.48 | |||
Basic Materials | 10.25 | |||
Consumer Cyclical | 6.84 | |||
Communications | 6.20 | |||
Consumer Non-Cyclical | 2.27 | |||
Energy | 0.65 | |||
Short-Term and Other Net Assets | 0.92 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Taiwan Semiconductor Manufacturing Co. Ltd. | 19.87 | % | ||
Hon Hai Precision Industry Co. Ltd. | 6.58 | |||
MediaTek Inc. | 3.61 | |||
Chunghwa Telecom Co. Ltd. | 2.90 | |||
Cathay Financial Holding Co. Ltd. | 2.50 | |||
Formosa Plastics Corp. | 2.48 | |||
China Steel Corp. | 2.33 | |||
Nan Ya Plastics Corp. | 2.25 | |||
Fubon Financial Holding Co. Ltd. | 2.22 | |||
CTBC Financial Holding Co. Ltd. | 2.03 | |||
|
| |||
TOTAL | 46.77 | % | ||
|
|
* | 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. |
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 21 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI THAILAND CAPPED ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | (1.65)% | (3.16)% | (1.38)% | (1.65)% | (3.16)% | (1.38)% | ||||||||||||||||||||
5 Years | 15.20% | 15.08% | 15.75% | 102.92% | 101.80% | 107.77% | ||||||||||||||||||||
Since Inception | 8.71% | 8.46% | 9.19% | 57.49% | 55.49% | 61.17% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
Index performance through February 11, 2013 reflects the performance of the MSCI Thailand Investable Market IndexSM. Index performance beginning on February 12, 2013 reflects the performance of the MSCI Thailand IMI 25/50 IndexSM.
The inception date of the Fund was 3/26/08. The first day of secondary market trading was 3/28/08.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 24 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 764.60 | $ | 2.71 | $ | 1,000.00 | $ | 1,022.10 | $ | 3.11 | 0.61% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 24 for more information. |
22 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI THAILAND CAPPED ETF
The iShares MSCI Thailand Capped ETF (the “Fund”), formerly the iShares MSCI Thailand Capped Investable Market Index Fund, seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Thailand IMI 25/50 IndexSM (the “Index”). The Index is a free-float adjusted market capitalization-weighted index and consists of stocks traded primarily on the Stock Exchange of 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 reporting period ended August 31, 2013, the total return for the Fund was -1.65%, net of fees, while the total return for the Index was -1.38%.
The Index declined during the reporting period. The Thai stock market posted steady gains during the first half of the reporting period. The economy of Thailand exceeded expectations, partially due to the government’s economic stimulus and infrastructure programs. In May 2013, the Fed indicated that its economic stimulus program may be reduced going forward, which weighed on emerging markets, particularly Thailand. Foreign capital flowed out of the country, sparking a sharp selloff in the Thai equity market. Meanwhile, economic growth contracted during the second half of the reporting period, as exports slid due to slow global growth and domestic consumption declined.
During late 2012 and early 2013, the economy of Thailand experienced solid growth, which depended heavily on household borrowing and large scale infrastructure projects funded by the government. Slow global growth hurt the Thai economy, as the nation’s exports declined. The Bank of Thailand cut interest rates in May 2013 to counter the economic slowdown. However, high household debt levels and rising prices limited the central bank’s ability to stimulate real economic growth. The weak economic environment led to the Index’s negative return during the reporting period.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector | Percentage of Net Assets |
Financial | 33.94 | % | ||
Energy | 18.13 | |||
Communications | 11.88 | |||
Consumer Cyclical | 9.27 | |||
Industrial | 7.16 | |||
Consumer Non-Cyclical | 6.40 | |||
Basic Materials | 5.94 | |||
Diversified | 4.33 | |||
Utilities | 1.97 | |||
Technology | 0.31 | |||
Short-Term and Other Net Assets | 0.67 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
PTT PCL NVDR | 7.98 | % | ||
Advanced Information Service PCL NVDR | 7.07 | |||
Siam Commercial Bank PCL NVDR | 6.70 | |||
PTT Exploration & Production PCL NVDR | 6.47 | |||
Kasikornbank PCL Foreign | 5.13 | |||
CP All PCL NVDR | 4.28 | |||
Bangkok Bank PCL Foreign | 4.05 | |||
Siam Cement PCL Foreign | 3.20 | |||
PTT Global Chemical PCL NVDR | 2.90 | |||
Kasikornbank PCL NVDR | 2.78 | |||
|
| |||
TOTAL | 50.56 | % | ||
|
|
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 23 |
Table of Contents
Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.iShares.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are redeemed or sold in the market. Performance for certain funds may reflect a waiver of a portion of investment management fees. Without such waiver, performance would have been lower.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The 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 a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of a fund may not have traded in the secondary market until after the fund’s inception, for the period from inception to the first day of secondary trading, the NAV of the fund is used as a proxy for the Market Price to calculate market returns. Certain funds may have a NAV which is determined prior to the opening of regular trading on its listed exchange and their market returns are 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 at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. 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.
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 expense example, which is based on an investment of $1,000 invested on March 1, 2013 and held through August 31, 2013, 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.
Actual Expenses — The table provides information about actual account values and actual expenses. To estimate the expenses that you paid on your account 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 for your Fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Example for Comparison Purposes — The table also 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. 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 hypothetical examples are 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.
24 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 98.85% |
| |||||||
AIRLINES — 0.14% |
| |||||||
Qantas Airways Ltd.a | 2,220,820 | $ | 2,709,822 | |||||
|
| |||||||
2,709,822 | ||||||||
BANKS — 35.32% |
| |||||||
Australia and New Zealand Banking | 5,540,682 | 146,514,397 | ||||||
Bendigo and Adelaide Bank Ltd. | 822,150 | 7,403,023 | ||||||
Commonwealth Bank of Australia | 3,254,902 | 211,161,498 | ||||||
National Australia Bank Ltd. | 4,731,118 | 136,736,784 | ||||||
Westpac Banking Corp. | 6,267,422 | 175,221,394 | ||||||
|
| |||||||
677,037,096 | ||||||||
BEVERAGES — 0.95% |
| |||||||
Coca-Cola Amatil Ltd. | 1,154,664 | 12,628,765 | ||||||
Treasury Wine Estates Ltd. | 1,309,350 | 5,550,979 | ||||||
|
| |||||||
18,179,744 | ||||||||
BIOTECHNOLOGY — 3.14% |
| |||||||
CSL Ltd. | 993,076 | 60,135,982 | ||||||
|
| |||||||
60,135,982 | ||||||||
BUILDING MATERIALS — 0.71% |
| |||||||
Boral Ltd. | 1,563,100 | 5,847,132 | ||||||
James Hardie Industries SE | 891,576 | 7,789,943 | ||||||
|
| |||||||
13,637,075 | ||||||||
CHEMICALS — 0.40% |
| |||||||
Incitec Pivot Ltd. | 3,290,630 | 7,590,768 | ||||||
|
| |||||||
7,590,768 | ||||||||
COAL — 0.10% | ||||||||
Whitehaven Coal Ltd.b | 1,139,236 | 2,014,100 | ||||||
|
| |||||||
2,014,100 | ||||||||
COMMERCIAL SERVICES — 2.18% |
| |||||||
Brambles Ltd. | 3,146,094 | 24,658,193 | ||||||
Transurban Group | 2,843,624 | 17,095,540 | ||||||
|
| |||||||
41,753,733 | ||||||||
COMPUTERS — 0.43% | ||||||||
Computershare Ltd. | 954,506 | 8,203,758 | ||||||
|
| |||||||
8,203,758 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 1.90% |
| |||||||
ASX Ltd. | 390,978 | 12,344,555 | ||||||
Macquarie Group Ltd. | 617,526 | 24,122,969 | ||||||
|
| |||||||
36,467,524 | ||||||||
ELECTRIC — 2.37% | ||||||||
AGL Energy Ltd. | 1,118,936 | 15,696,133 |
Security | Shares | Value | ||||||
Origin Energy Ltd. | 2,217,166 | $ | 26,165,014 | |||||
SP AusNet | 3,394,566 | 3,491,991 | ||||||
|
| |||||||
45,353,138 | ||||||||
ENGINEERING & CONSTRUCTION — 0.78% |
| |||||||
Leighton Holdings Ltd. | 340,634 | 5,278,908 | ||||||
Sydney Airport | 428,736 | 1,443,407 | ||||||
WorleyParsons Ltd. | 417,774 | 8,189,706 | ||||||
|
| |||||||
14,912,021 | ||||||||
ENTERTAINMENT — 0.65% |
| |||||||
Tabcorp Holdings Ltd. | 1,503,824 | 4,312,805 | ||||||
Tatts Group Ltd. | 2,831,850 | 8,096,217 | ||||||
|
| |||||||
12,409,022 | ||||||||
FOOD — 4.44% |
| |||||||
Metcash Ltd. | 1,781,528 | 5,156,831 | ||||||
Woolworths Ltd. | 2,515,170 | 79,905,621 | ||||||
|
| |||||||
85,062,452 | ||||||||
HEALTH CARE — PRODUCTS — 0.31% |
| |||||||
Cochlear Ltd. | 115,304 | 5,889,585 | ||||||
|
| |||||||
5,889,585 | ||||||||
HEALTH CARE — SERVICES — 1.01% |
| |||||||
Ramsay Health Care Ltd. | 265,524 | 8,832,858 | ||||||
Sonic Healthcare Ltd. | 760,438 | 10,464,035 | ||||||
|
| |||||||
19,296,893 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 0.00% |
| |||||||
BGP Holdings PLCa,c | 18,888,372 | 249 | ||||||
|
| |||||||
249 | ||||||||
INSURANCE — 5.64% |
| |||||||
AMP Ltd. | 5,945,464 | 25,099,841 | ||||||
Insurance Australia Group Ltd. | 4,201,288 | 21,777,715 | ||||||
QBE Insurance Group Ltd. | 2,423,008 | 32,802,377 | ||||||
Suncorp Group Ltd. | 2,597,994 | 28,530,416 | ||||||
|
| |||||||
108,210,349 | ||||||||
INTERNET — 0.32% |
| |||||||
Seek Ltd. | 649,600 | 6,190,656 | ||||||
|
| |||||||
6,190,656 | ||||||||
IRON & STEEL — 0.63% |
| |||||||
Fortescue Metals Group Ltd. | 3,147,312 | 12,137,649 | ||||||
|
| |||||||
12,137,649 | ||||||||
LEISURE TIME — 0.24% |
| |||||||
Flight Centre Ltd.b | 111,650 | 4,673,728 | ||||||
|
| |||||||
4,673,728 | ||||||||
LODGING — 0.75% | ||||||||
Crown Ltd. | 809,564 | 10,534,363 |
SCHEDULESOF INVESTMENTS | 25 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI AUSTRALIA ETF
August 31, 2013
Security | Shares | Value | ||||||
Echo Entertainment Group Ltd. | 1,581,370 | $ | 3,802,806 | |||||
|
| |||||||
14,337,169 | ||||||||
MANUFACTURING — 0.32% |
| |||||||
ALS Ltd. | 757,579 | 6,207,585 | ||||||
|
| |||||||
6,207,585 | ||||||||
MINING — 15.42% |
| |||||||
Alumina Ltd.a | 5,101,390 | 4,588,986 | ||||||
BHP Billiton Ltd. | 6,485,444 | 206,501,228 | ||||||
Iluka Resources Ltd. | 846,104 | 8,101,009 | ||||||
Newcrest Mining Ltd. | 1,547,672 | 18,278,028 | ||||||
Orica Ltd. | 740,950 | 12,373,628 | ||||||
Rio Tinto Ltd. | 879,802 | 45,683,606 | ||||||
|
| |||||||
295,526,485 | ||||||||
OIL & GAS — 3.95% |
| |||||||
Caltex Australia Ltd. | 273,238 | 4,601,925 | ||||||
Santos Ltd. | 1,952,048 | 25,939,774 | ||||||
Woodside Petroleum Ltd. | 1,331,274 | 45,269,975 | ||||||
|
| |||||||
75,811,674 | ||||||||
PACKAGING & CONTAINERS — 1.18% |
| |||||||
Amcor Ltd. | 2,438,436 | 22,651,791 | ||||||
|
| |||||||
22,651,791 | ||||||||
PIPELINES — 0.47% |
| |||||||
APA Group | 1,687,742 | 9,004,089 | ||||||
|
| |||||||
9,004,089 | ||||||||
REAL ESTATE — 0.49% |
| |||||||
Lend Lease Group | 1,102,696 | 9,408,669 | ||||||
|
| |||||||
9,408,669 | ||||||||
REAL ESTATE INVESTMENT TRUSTS — 6.89% |
| |||||||
CFS Retail Property Trust Group | 4,288,578 | 7,715,633 | ||||||
Dexus Property Group | 9,776,074 | 8,968,268 | ||||||
Federation Centres | 2,888,284 | 5,865,184 | ||||||
Goodman Group | 3,461,962 | 14,276,119 | ||||||
GPT Group | 3,572,800 | 11,296,501 | ||||||
Mirvac Group | 7,399,350 | 10,840,925 | ||||||
Stockland Corp. Ltd. | 4,653,572 | 15,459,739 | ||||||
Westfield Group | 4,209,814 | 41,544,119 | ||||||
Westfield Retail Trust | 6,171,200 | 16,049,420 | ||||||
|
| |||||||
132,015,908 | ||||||||
RETAIL — 3.99% |
| |||||||
Harvey Norman Holdings Ltd.b | 1,071,028 | 2,871,271 | ||||||
Wesfarmers Ltd. | 2,032,842 | 73,616,960 | ||||||
|
| |||||||
76,488,231 |
Security | Shares | Value | ||||||
TELECOMMUNICATIONS — 2.00% |
| |||||||
Telstra Corp. Ltd. | 8,796,802 | $ | 38,390,854 | |||||
|
| |||||||
38,390,854 | ||||||||
TRANSPORTATION — 1.73% |
| |||||||
Asciano Ltd. | 1,971,130 | 9,778,615 | ||||||
Aurizon Holdings Ltd. | 4,102,224 | 16,624,081 | ||||||
Toll Holdings Ltd. | 1,377,558 | 6,698,991 | ||||||
|
| |||||||
33,101,687 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $1,950,570,242) | 1,894,809,486 | |||||||
SHORT-TERM INVESTMENTS — 0.21% |
| |||||||
MONEY MARKET FUNDS — 0.21% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.15%d,e,f | 2,933,479 | 2,933,479 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
0.13%d,e,f | 186,274 | 186,274 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.00%d,e | 988,269 | 988,269 | ||||||
|
| |||||||
4,108,022 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $4,108,022) |
| 4,108,022 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $1,954,678,264) |
| 1,898,917,508 | ||||||
Other Assets, Less Liabilities — 0.94% |
| 17,931,412 | ||||||
|
| |||||||
NET ASSETS — 100.00% | $ | 1,916,848,920 | ||||||
|
|
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. |
26 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI AUSTRALIA ETF
August 31, 2013
Financial futures contracts purchased as of August 31, 2013 were as follows:
Number of Contracts | Issue (Expiration) | Exchange | Notional Value | Net Unrealized Appreciation (Depreciation) | ||||||||||
187 | ASX SPI 200 Index (Sept. 2013) | Sydney Futures | $ | 21,310,261 | $ | 706,374 | ||||||||
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 27 |
Table of Contents
Schedule of Investments
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 99.55% |
| |||||||
AIRLINES — 0.61% |
| |||||||
Cathay Pacific Airways Ltd. | 7,490,000 | $ | 12,846,513 | |||||
|
| |||||||
12,846,513 | ||||||||
APPAREL — 0.65% | ||||||||
Yue Yuen Industrial (Holdings) Ltd.a | 4,494,000 | 13,851,052 | ||||||
|
| |||||||
13,851,052 | ||||||||
BANKS — 7.87% | ||||||||
Bank of East Asia Ltd. (The) | 7,490,010 | 28,977,136 | ||||||
BOC Hong Kong (Holdings) Ltd.a | 21,721,000 | 68,487,368 | ||||||
Hang Seng Bank Ltd.a | 4,494,000 | 69,834,803 | ||||||
|
| |||||||
167,299,307 | ||||||||
DISTRIBUTION & WHOLESALE — 2.28% |
| |||||||
Li & Fung Ltd.a | 32,956,000 | 48,449,706 | ||||||
|
| |||||||
48,449,706 | �� | |||||||
DIVERSIFIED FINANCIAL SERVICES — 4.78% |
| |||||||
Hong Kong Exchanges and Clearing Ltd. | 6,617,000 | 101,545,316 | ||||||
|
| |||||||
101,545,316 | ||||||||
ELECTRIC — 7.29% | ||||||||
CLP Holdings Ltd. | 10,486,200 | 83,841,999 | ||||||
Power Assets Holdings Ltd. | 8,239,000 | 71,027,694 | ||||||
|
| |||||||
154,869,693 | ||||||||
ELECTRONICS — 0.97% | ||||||||
AAC Technologies Holdings Inc.a | 4,494,000 | 20,515,785 | ||||||
|
| |||||||
20,515,785 | ||||||||
ENGINEERING & CONSTRUCTION — 0.95% |
| |||||||
Cheung Kong Infrastructure Holdings Ltd. | 2,996,000 | 20,245,332 | ||||||
|
| |||||||
20,245,332 | ||||||||
FOOD — 0.73% | ||||||||
First Pacific Co. Ltd. | 14,980,999 | 15,513,440 | ||||||
|
| |||||||
15,513,440 | ||||||||
GAS — 3.75% | ||||||||
Hong Kong and China Gas Co. Ltd. (The)a | 34,454,353 | 79,622,151 | ||||||
|
| |||||||
79,622,151 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 13.89% |
| |||||||
Hutchison Whampoa Ltd. | 13,482,800 | 156,311,736 | ||||||
NWS Holdings Ltd. | 8,988,000 | 13,422,191 | ||||||
Swire Pacific Ltd. Class A | 4,494,000 | 51,521,278 | ||||||
Wharf (Holdings) Ltd. (The) | 8,988,150 | 73,892,830 | ||||||
|
| |||||||
295,148,035 |
Security | Shares | Value | ||||||
INSURANCE — 14.98% | ||||||||
AIA Group Ltd.a | 72,503,200 | $ | 318,365,568 | |||||
|
| |||||||
318,365,568 | ||||||||
LODGING — 11.28% | ||||||||
Galaxy Entertainment Group Ltd.b | 11,984,000 | 72,945,012 | ||||||
MGM China Holdings Ltd. | 5,392,800 | 16,099,675 | ||||||
Sands China Ltd. | 14,380,800 | 82,712,225 | ||||||
Shangri-La Asia Ltd. | 8,988,000 | 13,839,461 | ||||||
SJM Holdings Ltd. | 10,486,000 | 26,883,019 | ||||||
Wynn Macau Ltd.a | 8,988,000 | 27,180,517 | ||||||
|
| |||||||
239,659,909 | ||||||||
REAL ESTATE — 22.88% | ||||||||
Cheung Kong (Holdings) Ltd. | 8,988,000 | 128,310,585 | ||||||
Hang Lung Properties Ltd. | 13,482,000 | 42,161,676 | ||||||
Henderson Land Development Co. Ltd.a | 5,992,365 | 35,161,019 | ||||||
Hopewell Holdings Ltd.a | 3,745,242 | 11,881,378 | ||||||
Hysan Development Co. Ltd. | 4,494,000 | 19,530,563 | ||||||
Kerry Properties Ltd. | 3,745,000 | 15,164,681 | ||||||
New World Development Co. Ltd. | 22,470,800 | 31,528,204 | ||||||
Sino Land Co. Ltd. | 17,976,000 | 24,155,308 | ||||||
Sun Hung Kai Properties Ltd. | 9,899,000 | 128,422,496 | ||||||
Swire Properties Ltd. | 6,890,800 | 19,283,292 | ||||||
Wheelock and Co. Ltd. | 5,992,357 | 30,601,637 | ||||||
|
| |||||||
486,200,839 | ||||||||
REAL ESTATE INVESTMENT TRUSTS — 2.91% |
| |||||||
Link REIT (The)a | 13,482,000 | 61,808,148 | ||||||
|
| |||||||
61,808,148 | ||||||||
SEMICONDUCTORS — 0.65% | ||||||||
ASM Pacific Technology Ltd. | 1,348,200 | 13,891,620 | ||||||
|
| |||||||
13,891,620 | ||||||||
TELECOMMUNICATIONS — 1.10% |
| |||||||
HKT Trust and HKT Ltd. | 13,482,000 | 12,570,265 | ||||||
PCCW Ltd. | 23,968,000 | 10,787,207 | ||||||
|
| |||||||
23,357,472 | ||||||||
TRANSPORTATION — 1.98% | ||||||||
MTR Corp. Ltd. | 8,988,083 | 33,903,516 | ||||||
Orient Overseas International Ltd.a | 1,498,200 | 8,249,915 | ||||||
|
| |||||||
42,153,431 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $2,137,789,797) | 2,115,343,317 |
28 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI HONG KONG ETF
August 31, 2013
Security | Shares | Value | ||||||
RIGHTS — 0.00% | ||||||||
REAL ESTATE — 0.00% | ||||||||
New Hotelb | 312,572 | $ | 1 | |||||
|
| |||||||
1 | ||||||||
|
| |||||||
TOTAL RIGHTS | ||||||||
(Cost: $0) | 1 | |||||||
SHORT-TERM INVESTMENTS — 4.10% |
| |||||||
MONEY MARKET FUNDS — 4.10% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.15%c,d,e | 81,494,317 | 81,494,317 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
0.13%c,d,e | 5,174,829 | 5,174,829 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.00%c,d | 343,342 | 343,342 | ||||||
|
| |||||||
87,012,488 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $87,012,488) |
| 87,012,488 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $2,224,802,285) |
| 2,202,355,806 | ||||||
Other Assets, Less Liabilities — (3.65)% |
| (77,499,387 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% | $ | 2,124,856,419 | ||||||
|
|
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, 2013 were as follows:
Number of Contracts | Issue (Expiration) | Exchange | Notional Value | Net Unrealized Appreciation (Depreciation) | ||||||||||
53 | Hang Seng Index (Sept. 2013) | Hong Kong Futures | $ | 7,370,680 | $ | (106,978) | ||||||||
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 29 |
Table of Contents
Schedule of Investments
iSHARES® MSCI JAPAN SMALL-CAP ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 99.74% |
| |||||||
ADVERTISING — 0.26% |
| |||||||
Asatsu-DK Inc. | 5,400 | $ | 128,512 | |||||
Moshi Moshi Hotline Inc. | 9,000 | 98,701 | ||||||
|
| |||||||
227,213 | ||||||||
AGRICULTURE — 0.21% |
| |||||||
Hokuto Corp. | 5,400 | 94,719 | ||||||
Sakata Seed Corp. | 7,200 | 95,472 | ||||||
|
| |||||||
190,191 | ||||||||
AIRLINES — 0.02% |
| |||||||
Skymark Airlines Inc.a | 5,400 | 18,438 | ||||||
|
| |||||||
18,438 | ||||||||
APPAREL — 1.00% |
| |||||||
Atsugi Co. Ltd. | 36,000 | 37,792 | ||||||
Daidoh Ltd. | 5,400 | 37,811 | ||||||
Descente Ltd. | 18,000 | 126,219 | ||||||
Gunze Ltd. | 36,000 | 89,895 | ||||||
Japan Wool Textile Co. Ltd. (The) | 18,000 | 130,806 | ||||||
Nagaileben Co. Ltd. | 5,400 | 81,456 | ||||||
Onward Holdings Co. Ltd. | 18,000 | 157,040 | ||||||
Sanyo Shokai Ltd. | 18,000 | 45,314 | ||||||
Wacoal Holdings Corp. | 18,000 | 181,073 | ||||||
|
| |||||||
887,406 | ||||||||
AUTO MANUFACTURERS — 0.50% |
| |||||||
Kyokuto Kaihatsu Kogyo Co. Ltd. | 5,400 | 56,193 | ||||||
Nissan Shatai Co. Ltd. | 18,000 | 256,475 | ||||||
ShinMaywa Industries Ltd. | 18,000 | 132,824 | ||||||
|
| |||||||
445,492 | ||||||||
AUTO PARTS & EQUIPMENT — 3.94% |
| |||||||
Aisan Industry Co. Ltd. | 5,400 | 52,231 | ||||||
Akebono Brake Industry Co. Ltd. | 16,200 | 69,843 | ||||||
Calsonic Kansei Corp. | 36,000 | 176,120 | ||||||
Exedy Corp. | 5,400 | 126,476 | ||||||
FCC Co. Ltd. | 7,200 | 159,168 | ||||||
Futaba Industrial Co. Ltd.b | 12,600 | 50,598 | ||||||
G-Tekt Corp. | 1,800 | 45,571 | ||||||
Kayaba Industry Co. Ltd. | 36,000 | 217,215 | ||||||
Keihin Corp. | 9,000 | 130,806 | ||||||
Mitsuba Corp. | 6,000 | 96,621 | ||||||
Musashi Seimitsu Industry Co. Ltd. | 3,600 | 88,243 | ||||||
Nifco Inc. | 9,000 | 214,463 | ||||||
Nippon Seiki Co. Ltd. | 4,000 | 55,812 | ||||||
Nissin Kogyo Co. Ltd. | 7,200 | 127,907 | ||||||
Pacific Industrial Co. Ltd. | 9,000 | 58,156 |
Security | Shares | Value | ||||||
Press Kogyo Co. Ltd. | 18,000 | $ | 70,815 | |||||
Riken Corp. | 18,000 | 69,164 | ||||||
Sanden Corp. | 18,000 | 70,448 | ||||||
Sanoh Industrial Co. Ltd. | 5,400 | 37,756 | ||||||
Showa Corp. | 9,000 | 112,919 | ||||||
T.RAD Co. Ltd. | 18,000 | 57,789 | ||||||
Tachi-S Co. Ltd. | 5,400 | 74,521 | ||||||
Taiho Kogyo Co. Ltd. | 3,600 | 45,754 | ||||||
Takata Corp. | 7,200 | 171,350 | ||||||
Tokai Rika Co. Ltd. | 10,800 | 215,086 | ||||||
Topre Corp. | 9,000 | 97,141 | ||||||
Toyo Tire & Rubber Co. Ltd. | 36,000 | 195,566 | ||||||
TPR Co. Ltd. | 5,400 | 92,463 | ||||||
TS Tech Co. Ltd. | 9,000 | 303,623 | ||||||
Unipres Corp. | 7,200 | 156,893 | ||||||
Yorozu Corp. | 3,600 | 69,714 | ||||||
|
| |||||||
3,510,232 | ||||||||
BANKS — 6.58% |
| |||||||
77 Bank Ltd. (The) | 72,000 | 325,822 | ||||||
Aichi Bank Ltd. (The) | 1,800 | 78,245 | ||||||
Awa Bank Ltd. (The) | 36,000 | 180,890 | ||||||
Bank of Nagoya Ltd. (The) | 36,000 | 123,651 | ||||||
Bank of Saga Ltd. (The) | 36,000 | 72,283 | ||||||
Bank of the Ryukyus Ltd. | 7,200 | 90,188 | ||||||
Chiba Kogyo Bank Ltd. (The)b | 7,200 | 48,653 | ||||||
Daishi Bank Ltd. (The) | 72,000 | 233,359 | ||||||
Eighteenth Bank Ltd. (The) | 36,000 | 81,455 | ||||||
Higashi-Nippon Bank Ltd. (The) | 36,000 | 76,685 | ||||||
Higo Bank Ltd. (The) | 36,000 | 193,365 | ||||||
Hokkoku Bank Ltd. (The) | 54,000 | 182,174 | ||||||
Hokuetsu Bank Ltd. (The) | 36,000 | 71,916 | ||||||
Hyakugo Bank Ltd. (The) | 54,000 | 208,042 | ||||||
Hyakujushi Bank Ltd. (The) | 54,000 | 203,639 | ||||||
Jimoto Holdings Inc. | 34,200 | 64,834 | ||||||
Juroku Bank Ltd. (The) | 54,000 | 196,484 | ||||||
Kagoshima Bank Ltd. (The) | 36,000 | 223,819 | ||||||
Kansai Urban Banking Corp. | 54,000 | 56,138 | ||||||
Keiyo Bank Ltd. (The) | 54,000 | 277,939 | ||||||
Kiyo Holdings Inc. | 126,000 | 165,663 | ||||||
Mie Bank Ltd. (The) | 18,000 | 35,591 | ||||||
Minato Bank Ltd. (The) | 36,000 | 58,707 | ||||||
Miyazaki Bank Ltd. (The) | 36,000 | 104,571 | ||||||
Musashino Bank Ltd. (The) | 5,400 | 178,872 | ||||||
Nanto Bank Ltd. (The) | 54,000 | 201,437 | ||||||
North Pacific Bank Ltd. | 66,600 | 260,657 |
30 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN SMALL-CAP ETF
August 31, 2013
Security | Shares | Value | ||||||
Ogaki Kyoritsu Bank Ltd. (The) | 54,000 | $ | 147,500 | |||||
Oita Bank Ltd. (The) | 36,000 | 110,075 | ||||||
San-in Godo Bank Ltd. (The) | 36,000 | 274,086 | ||||||
Senshu Ikeda Holdings Inc. | 41,400 | 200,850 | ||||||
Shiga Bank Ltd. (The) | 54,000 | 287,295 | ||||||
Tochigi Bank Ltd. (The) | 18,000 | 63,477 | ||||||
Toho Bank Ltd. (The) | 36,000 | 105,305 | ||||||
Tokyo Tomin Bank Ltd. (The) | 7,200 | 79,401 | ||||||
TOMONY Holdings Inc. | 27,000 | 95,215 | ||||||
Towa Bank Ltd. (The) | 54,000 | 47,332 | ||||||
Tsukuba Bank Ltd. (The) | 16,200 | 53,661 | ||||||
Yachiyo Bank Ltd. (The) | 3,600 | 105,635 | ||||||
Yamagata Bank Ltd. (The) | 36,000 | 144,565 | ||||||
Yamanashi Chuo Bank Ltd. (The) | 36,000 | 142,730 | ||||||
|
| |||||||
5,852,206 | ||||||||
BEVERAGES — 1.48% |
| |||||||
Coca-Cola East Japan Co. Ltd. | 9,666 | 138,121 | ||||||
Dydo Drinco Inc. | 1,800 | 67,696 | ||||||
ITO EN Ltd. | 10,800 | 243,706 | ||||||
Kagome Co. Ltd. | 14,400 | 247,302 | ||||||
KEY Coffee Inc. | 5,400 | 85,033 | ||||||
Sapporo Holdings Ltd. | 72,000 | 259,043 | ||||||
Takara Holdings Inc. | 36,000 | 274,820 | ||||||
|
| |||||||
1,315,721 | ||||||||
BIOTECHNOLOGY — 0.49% |
| |||||||
AnGes MG Inc.b | 54 | 29,005 | ||||||
GNI Group Ltd.b | 18,000 | 69,347 | ||||||
Japan Tissue Engineering Co. Ltd.b | 18 | 70,998 | ||||||
JCR Pharmaceuticals Co. Ltd. | 1,800 | 33,555 | ||||||
OncoTherapy Science Inc.a,b | 36 | 54,560 | ||||||
Takara Bio Inc.a | 9,000 | 177,129 | ||||||
|
| |||||||
434,594 | ||||||||
BUILDING MATERIALS — 2.06% |
| |||||||
Central Glass Co. Ltd. | 36,000 | 110,442 | ||||||
Chofu Seisakusho Co. Ltd. | 3,600 | 77,053 | ||||||
Cleanup Corp. | 3,600 | 28,546 | ||||||
Endo Lighting Corp. | 1,800 | 38,636 | ||||||
Fujitec Co. Ltd. | 18,000 | 189,145 | ||||||
Nice Holdings Inc. | 18,000 | 42,929 | ||||||
Nichias Corp. | 18,000 | 114,661 | ||||||
Nichiha Corp. | 5,400 | 69,678 | ||||||
Nippon Sheet Glass Co. Ltd.b | 180,000 | 196,300 | ||||||
Noritz Corp. | 5,400 | 108,534 | ||||||
Okabe Co. Ltd. | 7,200 | 75,218 | ||||||
Sankyo Tateyama Inc. | 3,900 | 79,459 |
Security | Shares | Value | ||||||
Sanwa Holdings Corp. | 54,000 | $ | 302,156 | |||||
Sumitomo Osaka Cement Co. Ltd. | 72,000 | 266,381 | ||||||
Takara Standard Co. Ltd. | 18,000 | 129,888 | ||||||
|
| |||||||
1,829,026 | ||||||||
CHEMICALS — 7.33% |
| |||||||
Adeka Corp. | 18,000 | 197,034 | ||||||
Aica Kogyo Co. Ltd. | 10,800 | 196,374 | ||||||
C. Uyemura & Co. Ltd. | 1,800 | 73,383 | ||||||
Chugoku Marine Paints Ltd. | 18,000 | 90,262 | ||||||
Dai Nippon Toryo Co. Ltd. | 36,000 | 48,800 | ||||||
Dainichiseika Color & Chemicals Manufacturing Co. Ltd. | 18,000 | 73,750 | ||||||
Daiso Co. Ltd. | 18,000 | 52,102 | ||||||
Denki Kagaku Kogyo K.K. | 90,000 | 330,225 | ||||||
DIC Corp. | 144,000 | 369,852 | ||||||
Earth Chemical Co. Ltd. | 3,600 | 132,640 | ||||||
Fujimi Inc. | 3,600 | 45,938 | ||||||
Ishihara Sangyo Kaisha Ltd.b | 72,000 | 55,038 | ||||||
Kinugawa Rubber Industrial Co. Ltd. | 2,000 | 11,191 | ||||||
Kureha Corp. | 18,000 | 60,908 | ||||||
Lintec Corp. | 9,000 | 169,515 | ||||||
Nihon Nohyaku Co. Ltd. | 18,000 | 200,336 | ||||||
Nihon Parkerizing Co. Ltd. | 9,000 | 173,918 | ||||||
Nippon Carbide Industries Co. Inc. | 18,000 | 53,019 | ||||||
Nippon Carbon Co. Ltd. | 18,000 | 29,720 | ||||||
Nippon Kayaku Co. Ltd. | 36,000 | 456,444 | ||||||
Nippon Paint Co. Ltd. | 36,000 | 520,287 | ||||||
Nippon Shokubai Co. Ltd. | 21,000 | 213,821 | ||||||
Nippon Soda Co. Ltd. | 36,000 | 209,142 | ||||||
Nippon Synthetic Chemical Industry Co. Ltd. (The) | 13,000 | 115,405 | ||||||
Nissan Chemical Industries Ltd. | 23,400 | 321,969 | ||||||
NOF Corp. | 36,000 | 215,380 | ||||||
S.T. Corp. | 3,600 | 36,582 | ||||||
Sakai Chemical Industry Co. Ltd. | 18,000 | 53,203 | ||||||
Sanyo Chemical Industries Ltd. | 6,000 | 37,548 | ||||||
Stella Chemifa Corp. | 1,800 | 26,216 | ||||||
Sumitomo Bakelite Co. Ltd. | 36,000 | 125,852 | ||||||
Taiyo Holdings Co. Ltd. | 3,600 | 104,681 | ||||||
Takasago International Corp. | 18,000 | 88,794 | ||||||
Toagosei Co. Ltd. | 36,000 | 145,666 | ||||||
Tokai Carbon Co. Ltd. | 36,000 | 106,773 | ||||||
Tokuyama Corp. | 72,000 | 255,374 | ||||||
Tokyo Ohka Kogyo Co. Ltd. | 7,200 | 151,683 | ||||||
Tosoh Corp. | 108,000 | 387,464 |
SCHEDULESOF INVESTMENTS | 31 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN SMALL-CAP ETF
August 31, 2013
Security | Shares | Value | ||||||
Toyo Ink SC Holdings Co. Ltd. | 36,000 | $ | 166,947 | |||||
Zeon Corp. | 36,000 | 420,853 | ||||||
|
| |||||||
6,524,089 | ||||||||
COAL — 0.06% |
| |||||||
Mitsui Matsushima Co. Ltd. | 36,000 | 53,937 | ||||||
|
| |||||||
53,937 | ||||||||
COMMERCIAL SERVICES — 1.79% |
| |||||||
AEON Delight Co. Ltd. | 3,600 | 63,623 | ||||||
Duskin Co. Ltd. | 9,000 | 170,249 | ||||||
Euglena Co. Ltd.a,b | 1,800 | 93,013 | ||||||
Future Architect Inc. | 7,200 | 38,820 | ||||||
GMO Payment Gateway Inc. | 737 | 18,141 | ||||||
JP-Holdings Inc. | 9,000 | 42,562 | ||||||
Kanamoto Co. Ltd. | 4,000 | 92,830 | ||||||
Kyodo Printing Co. Ltd. | 18,000 | 46,231 | ||||||
Kyoritsu Maintenance Co. Ltd. | 1,800 | 70,081 | ||||||
Meitec Corp. | 5,400 | 134,236 | ||||||
Nichii Gakkan Co. | 9,000 | 88,702 | ||||||
Nihon M&A Center Inc. | 1,800 | 112,827 | ||||||
Nishio Rent All Co. Ltd. | 3,600 | 78,814 | ||||||
Pasona Group Inc. | 54 | 37,591 | ||||||
Pronexus Inc. | 5,400 | 31,426 | ||||||
Shin Nippon Biomedical Laboratories Ltd.b | 1,800 | 19,300 | ||||||
Sohgo Security Services Co. Ltd. | 10,800 | 195,383 | ||||||
Temp Holdings Co. Ltd.a | 5,400 | 117,670 | ||||||
Toppan Forms Co. Ltd. | 10,800 | 98,077 | ||||||
Weathernews Inc. | 1,800 | 41,975 | ||||||
|
| |||||||
1,591,551 | ||||||||
COMPUTERS — 1.59% |
| |||||||
DTS Corp. | 3,600 | 50,524 | ||||||
Ines Corp. | 5,400 | 31,371 | ||||||
Information Services International-Dentsu Ltd. | 3,600 | 39,554 | ||||||
Japan Digital Laboratory Co. Ltd. | 3,600 | 34,747 | ||||||
Melco Holdings Inc. | 3,600 | 46,415 | ||||||
NEC Networks & System Integration Corp. | 3,600 | 79,584 | ||||||
Net One Systems Co. Ltd. | 18,000 | 134,842 | ||||||
NS Solutions Corp. | 3,600 | 69,200 | ||||||
OBIC Co. Ltd. | 1,440 | 423,715 | ||||||
Roland DG Corp. | 1,800 | 44,525 | ||||||
SCSK Corp. | 9,256 | 216,412 | ||||||
Wacom Co. Ltd. | 28,800 | 248,036 | ||||||
|
| |||||||
1,418,925 |
Security | Shares | Value | ||||||
COSMETICS & PERSONAL CARE — 1.36% |
| |||||||
Aderans Co. Ltd. | 3,600 | $ | 51,625 | |||||
Dr. Ci:Labo Co. Ltd.a | 18 | 46,727 | ||||||
Fancl Corp. | 9,000 | 113,194 | ||||||
Kose Corp. | 5,400 | 151,628 | ||||||
Lion Corp. | 36,000 | 217,948 | ||||||
Mandom Corp. | 3,600 | 116,312 | ||||||
Milbon Co. Ltd. | 1,800 | 69,806 | ||||||
Pigeon Corp. | 7,200 | 332,426 | ||||||
Pola Orbis Holdings Inc. | 3,600 | 113,561 | ||||||
|
| |||||||
1,213,227 | ||||||||
DISTRIBUTION & WHOLESALE — 1.73% |
| |||||||
Ai Holdings Corp. | 7,200 | 73,603 | ||||||
Canon Marketing Japan Inc. | 10,800 | 137,153 | ||||||
Chori Co. Ltd. | 3,600 | 38,856 | ||||||
Daiwabo Holdings Co. Ltd. | 54,000 | 89,711 | ||||||
Doshisha Co. Ltd. | 5,400 | 74,025 | ||||||
Hakuto Co. Ltd. | 3,600 | 32,546 | ||||||
Inabata & Co. Ltd. | 9,000 | 77,603 | ||||||
Itochu Enex Co. Ltd. | 12,600 | 62,926 | ||||||
Iwatani Corp. | 36,000 | 129,522 | ||||||
Japan Pulp & Paper Co. Ltd. | 18,000 | 55,221 | ||||||
Kamei Corp. | 5,400 | 39,242 | ||||||
Kanematsu Corp.b | 72,000 | 77,786 | ||||||
Matsuda Sangyo Co. Ltd. | 3,660 | 47,748 | ||||||
Nagase & Co. Ltd. | 21,600 | 258,676 | ||||||
Paltac Corp. | 7,200 | 93,270 | ||||||
Ryoyo Electro Corp. | 5,400 | 43,975 | ||||||
Trusco Nakayama Corp. | 3,600 | 65,972 | ||||||
Yamazen Corp. | 12,600 | 78,208 | ||||||
Yuasa Trading Co. Ltd. | 36,000 | 61,642 | ||||||
|
| |||||||
1,537,685 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 3.20% |
| |||||||
AIFUL Corp.b | 31,500 | 261,015 | ||||||
Century Tokyo Leasing Corp. | 9,080 | 246,538 | ||||||
Financial Products Group Co. Ltd. | 3,600 | 36,141 | ||||||
Fuyo General Lease Co. Ltd. | 3,600 | 116,312 | ||||||
GCA Savvian Group Corp. | 3,600 | 27,225 | ||||||
Hitachi Capital Corp. | 9,000 | 184,559 | ||||||
IBJ Leasing Co. Ltd. | 3,600 | 81,749 | ||||||
Ichiyoshi Securities Co. Ltd. | 7,200 | 88,060 | ||||||
J Trust Co. Ltd. | 10,800 | 160,930 | ||||||
Jaccs Co. Ltd. | 18,000 | 78,153 | ||||||
Japan Securities Finance Co. Ltd. | 16,200 | 99,728 | ||||||
Kenedix Inc.b | 43,200 | 188,008 |
32 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN SMALL-CAP ETF
August 31, 2013
Security | Shares | Value | ||||||
Kyokuto Securities Co. Ltd. | 5,400 | $ | 84,813 | |||||
Marusan Securities Co. Ltd. | 12,600 | 76,282 | ||||||
Mito Securities Co. Ltd. | 18,000 | 78,153 | ||||||
NEC Capital Solutions Ltd. | 1,800 | 40,361 | ||||||
Okasan Securities Group Inc. | 36,000 | 271,151 | ||||||
Orient Corp.b | 54,000 | 128,237 | ||||||
Pocket Card Co. Ltd.a | 3,600 | 26,675 | ||||||
Ricoh Leasing Co. Ltd. | 3,600 | 88,904 | ||||||
SPARX Group Co. Ltd.b | 180 | 29,537 | ||||||
Tokai Tokyo Financial Holdings Inc. | 37,800 | 261,208 | ||||||
Zenkoku Hosho Co. Ltd. | 5,400 | 192,081 | ||||||
|
| |||||||
2,845,820 | ||||||||
ELECTRIC — 0.14% |
| |||||||
Okinawa Electric Power Co. Inc. (The) | 3,600 | 123,834 | ||||||
|
| |||||||
123,834 | ||||||||
ELECTRICAL COMPONENTS & EQUIPMENT — 1.44% |
| |||||||
Fujikura Ltd. | 72,000 | 245,100 | ||||||
Funai Electric Co. Ltd. | 3,600 | 36,178 | ||||||
GS Yuasa Corp. | 72,000 | 355,909 | ||||||
Icom Inc. | 1,800 | 37,976 | ||||||
Nippon Signal Co. Ltd. (The) | 9,000 | 60,449 | ||||||
Nissin Electric Co. Ltd. | 1,000 | 5,820 | ||||||
Sinfonia Technology Co. Ltd. | 36,000 | 55,037 | ||||||
SWCC Showa Holdings Co. Ltd.b | 54,000 | 41,278 | ||||||
Takaoka Toko Holdings Co. Ltd. | 3,600 | 60,945 | ||||||
Tatsuta Electric Wire and Cable Co. Ltd. | 10,800 | 89,931 | ||||||
Tokyo Rope Manufacturing Co. Ltd.a,b | 36,000 | 53,570 | ||||||
Ushio Inc. | 21,600 | 242,605 | ||||||
|
| |||||||
1,284,798 | ||||||||
ELECTRONICS — 4.95% |
| |||||||
Alps Electric Co. Ltd. | 32,400 | 233,469 | ||||||
Anritsu Corp. | 27,000 | 330,225 | ||||||
Azbil Corp. | 12,600 | 270,711 | ||||||
Chiyoda Integre Co. Ltd. | 1,800 | 22,345 | ||||||
CMK Corp. | 7,200 | 20,034 | ||||||
Cosel Co. Ltd. | 5,400 | 61,972 | ||||||
Dai-ichi Seiko Co. Ltd. | 1,800 | 20,034 | ||||||
Dainippon Screen Manufacturing Co. Ltd.b | 36,000 | 170,616 | ||||||
Eizo Nanao Corp. | 3,600 | 77,163 | ||||||
Enplas Corp. | 1,800 | 132,824 | ||||||
Fujitsu General Ltd. | 18,000 | 194,099 | ||||||
Futaba Corp. | 7,200 | 83,437 |
Security | Shares | Value | ||||||
Hioki E.E. Corp. | 3,600 | $ | 50,268 | |||||
HORIBA Ltd. | 7,200 | 234,093 | ||||||
Hosiden Corp. | 12,600 | 67,164 | ||||||
IDEC Corp. | 5,400 | 45,791 | ||||||
Inaba Denki Sangyo Co. Ltd. | 3,600 | 100,168 | ||||||
Japan Aviation Electronics Industry Ltd. | 18,000 | 178,872 | ||||||
JEOL Ltd. | 18,000 | 79,070 | ||||||
Kaga Electronics Co. Ltd. | 5,400 | 43,259 | ||||||
Koa Corp. | 7,200 | 62,743 | ||||||
Kuroda Electric Co. Ltd. | 7,200 | 96,426 | ||||||
Macnica Inc. | 1,800 | 44,158 | ||||||
MARUWA Co. Ltd. | 1,800 | 57,881 | ||||||
Minebea Co. Ltd. | 72,000 | 311,145 | ||||||
Mitsumi Electric Co. Ltd.b | 16,200 | 118,881 | ||||||
Nichicon Corp. | 10,800 | 110,956 | ||||||
Nidec Copal Electronics Corp. | 3,600 | 17,318 | ||||||
Nihon Dempa Kogyo Co. Ltd. | 3,600 | 30,234 | ||||||
Nippon Ceramic Co. Ltd.a | 3,600 | 44,250 | ||||||
Nissha Printing Co. Ltd.b | 5,400 | 90,206 | ||||||
Nitto Kogyo Corp. | 5,400 | 84,427 | ||||||
Ryosan Co. Ltd. | 5,400 | 91,252 | ||||||
Sanshin Electronics Co. Ltd. | 7,200 | 42,929 | ||||||
Shinko Shoji Co. Ltd. | 5,400 | 46,121 | ||||||
SIIX Corp. | 3,600 | 43,736 | ||||||
Sodick Co. Ltd. | 9,000 | 39,535 | ||||||
Star Micronics Co. Ltd. | 7,200 | 69,494 | ||||||
Taiyo Yuden Co. Ltd. | 21,600 | 273,646 | ||||||
TOKO Inc.b | 18,000 | 58,707 | ||||||
Tokyo Seimitsu Co. Ltd. | 7,200 | 135,686 | ||||||
Toyo Corp. | 5,400 | 56,358 | ||||||
UKC Holdings Corp. | 3,600 | 60,101 | ||||||
|
| |||||||
4,401,804 | ||||||||
ENGINEERING & CONSTRUCTION — 3.96% |
| |||||||
Chudenko Corp. | 5,400 | 65,329 | ||||||
COMSYS Holdings Corp. | 19,800 | 246,201 | ||||||
Fudo Tetra Corp.b | 27,000 | 40,453 | ||||||
Hazama Ando Corp. | 25,200 | 52,909 | ||||||
Hibiya Engineering Ltd. | 5,400 | 54,487 | ||||||
Japan Airport Terminal Co. Ltd. | 9,000 | 165,571 | ||||||
Japan Bridge Corp.b | 23,400 | 40,783 | ||||||
Kandenko Co. Ltd. | 18,000 | 93,564 | ||||||
Kyowa Exeo Corp. | 16,200 | 175,019 | ||||||
Maeda Corp. | 18,000 | 96,316 | ||||||
Maeda Road Construction Co. Ltd. | 18,000 | 280,324 |
SCHEDULESOF INVESTMENTS | 33 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN SMALL-CAP ETF
August 31, 2013
Security | Shares | Value | ||||||
MIRAIT Holdings Corp. | 12,600 | $ | 99,654 | |||||
Nippo Corp. | 18,000 | 289,680 | ||||||
Nippon Koei Co. Ltd. | 18,000 | 61,092 | ||||||
Nippon Road Co. Ltd. (The) | 18,000 | 91,913 | ||||||
Nishimatsu Construction Co. Ltd. | 54,000 | 124,385 | ||||||
Okumura Corp. | 36,000 | 133,924 | ||||||
Penta-Ocean Construction Co. Ltd. | 54,000 | 127,687 | ||||||
Shinko Plantech Co. Ltd. | 9,000 | 72,374 | ||||||
SHO-BOND Holdings Co. Ltd. | 3,600 | 142,364 | ||||||
Sumitomo Mitsui Construction Co. Ltd.b | 129,600 | 100,388 | ||||||
Taihei Dengyo Kaisha Ltd. | 1,000 | 7,134 | ||||||
Taihei Kogyo Co. Ltd. | 8,000 | 26,989 | ||||||
Taikisha Ltd. | 5,400 | 119,982 | ||||||
Takasago Thermal Engineering Co. Ltd. | 12,600 | 100,168 | ||||||
Takuma Co. Ltd. | 18,000 | 156,857 | ||||||
Toa Corp.b | 36,000 | 49,901 | ||||||
Toda Corp. | 36,000 | 108,240 | ||||||
Tokyu Construction Co. Ltd.b | 14,940 | 35,327 | ||||||
Toshiba Plant Systems & Services Corp. | 8,000 | 128,992 | ||||||
Totetsu Kogyo Co. Ltd. | 5,400 | 104,076 | ||||||
Toyo Construction Co. Ltd. | 14,400 | 33,756 | ||||||
Toyo Engineering Corp. | 18,000 | 70,998 | ||||||
Yahagi Construction Co. Ltd. | 7,200 | 30,527 | ||||||
|
| |||||||
3,527,364 | ||||||||
ENTERTAINMENT — 1.17% |
| |||||||
Avex Group Holdings Inc. | 7,200 | 203,051 | ||||||
Heiwa Corp. | 9,000 | 151,995 | ||||||
Mars Engineering Corp. | 1,800 | 32,582 | ||||||
Shochiku Co. Ltd. | 18,000 | 169,882 | ||||||
Toei Co. Ltd. | 18,000 | 110,442 | ||||||
Tokyotokeiba Co. Ltd. | 36,000 | 153,371 | ||||||
Universal Entertainment Corp. | 3,600 | 68,687 | ||||||
Yomiuri Land Co. Ltd. | 18,000 | 150,803 | ||||||
|
| |||||||
1,040,813 | ||||||||
ENVIRONMENTAL CONTROL — 0.56% |
| |||||||
Asahi Holdings Inc. | 5,400 | 90,812 | ||||||
Daiseki Co. Ltd. | 7,260 | 126,013 | ||||||
Hitachi Zosen Corp. | 153,000 | 224,553 | ||||||
Oyo Corp. | 3,600 | 52,542 | ||||||
|
| |||||||
493,920 | ||||||||
FOOD — 3.53% |
| |||||||
Ariake Japan Co. Ltd. | 3,600 | 81,015 |
Security | Shares | Value | ||||||
Ezaki Glico Co. Ltd. | 18,000 | $ | 160,159 | |||||
Fuji Oil Co. Ltd. | 12,600 | 221,783 | ||||||
Fujiya Co. Ltd. | 18,000 | 34,123 | ||||||
House Foods Corp. | 12,600 | 196,484 | ||||||
Itoham Foods Inc. | 36,000 | 146,767 | ||||||
Izumiya Co. Ltd. | 18,000 | 79,621 | ||||||
J-Oil Mills Inc. | 18,000 | 55,771 | ||||||
Kameda Seika Co. Ltd. | 1,800 | 55,955 | ||||||
Kasumi Co. Ltd. | 7,200 | 44,837 | ||||||
Kato Sangyo Co. Ltd. | 3,600 | 71,806 | ||||||
Kewpie Corp. | 19,800 | 299,477 | ||||||
Marudai Food Co. Ltd. | 18,000 | 56,138 | ||||||
Maruha Nichiro Holdings Inc. | 72,000 | 135,025 | ||||||
MEGMILK SNOW BRAND Co. Ltd. | 9,000 | 129,888 | ||||||
Mitsubishi Shokuhin Co. Ltd. | 1,800 | 47,754 | ||||||
Mitsui Sugar Co. Ltd. | 18,000 | 57,423 | ||||||
Morinaga & Co. Ltd. | 36,000 | 73,750 | ||||||
Morinaga Milk Industry Co. Ltd. | 36,000 | 107,140 | ||||||
Nichirei Corp. | 54,000 | 260,327 | ||||||
Nippon Beet Sugar Manufacturing Co. Ltd. | 18,000 | 31,555 | ||||||
Nippon Flour Mills Co. Ltd. | 18,000 | 88,060 | ||||||
Nippon Suisan Kaisha Ltd.b | 50,400 | 103,250 | ||||||
Nisshin OilliO Group Ltd. (The) | 18,000 | 62,192 | ||||||
Prima Meat Packers Ltd. | 36,000 | 73,383 | ||||||
San-A & Co. Ltd. | 3,600 | 88,390 | ||||||
UNY Co. Ltd. | 43,200 | 276,508 | ||||||
Warabeya Nichiyo Co. Ltd. | 1,800 | 28,803 | ||||||
Yokohama Reito Co. Ltd. | 9,000 | 72,925 | ||||||
|
| |||||||
3,140,309 | ||||||||
FOREST PRODUCTS & PAPER — 0.95% |
| |||||||
Chuetsu Pulp & Paper Co. Ltd. | 18,000 | 26,235 | ||||||
Daio Paper Corp. | 18,000 | 98,701 | ||||||
Hokuetsu Kishu Paper Co. Ltd. | 18,000 | 75,401 | ||||||
Mitsubishi Paper Mills Ltd.b | 72,000 | 60,908 | ||||||
Nippon Paper Industries Co. Ltd. | 19,800 | 270,417 | ||||||
Pack Corp. (The) | 3,600 | 55,588 | ||||||
Sumitomo Forestry Co. Ltd. | 27,000 | 257,575 | ||||||
|
| |||||||
844,825 | ||||||||
GAS — 0.07% |
| |||||||
Shizuoka Gas Co. Ltd. | 9,000 | 59,716 | ||||||
|
| |||||||
59,716 | ||||||||
HAND & MACHINE TOOLS — 1.30% |
| |||||||
Asahi Diamond Industrial Co. Ltd. | 10,800 | 101,709 | ||||||
DISCO Corp. | 5,400 | 318,667 |
34 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN SMALL-CAP ETF
August 31, 2013
Security | Shares | Value | ||||||
Hitachi Koki Co. Ltd. | 10,800 | $ | 81,125 | |||||
Meidensha Corp. | 36,000 | 118,514 | ||||||
Mori Seiki Co. Ltd. | 19,800 | 273,041 | ||||||
OSG Corp. | 14,400 | 230,424 | ||||||
Union Tool Co. | 1,800 | 35,022 | ||||||
|
| |||||||
1,158,502 | ||||||||
HEALTH CARE — PRODUCTS — 1.07% |
| |||||||
Asahi Intecc Co. Ltd. | 1,800 | 106,406 | ||||||
Hogy Medical Co. Ltd. | 1,800 | 98,150 | ||||||
Nihon Kohden Corp. | 7,200 | 266,381 | ||||||
Nipro Corp. | 21,600 | 187,348 | ||||||
Paramount Bed Holdings Co. Ltd. | 3,600 | 100,755 | ||||||
Topcon Corp. | 14,400 | 192,264 | ||||||
|
| |||||||
951,304 | ||||||||
HEALTH CARE — SERVICES — 0.44% |
| |||||||
Ain Pharmaciez Inc. | 1,800 | 75,034 | ||||||
BML Inc. | 1,800 | 52,928 | ||||||
CMIC Holdings Co. Ltd. | 1,800 | 23,593 | ||||||
EPS Co. Ltd. | 54 | 48,983 | ||||||
Medinet Co. Ltd.b | 126 | 46,103 | ||||||
Message Co. Ltd. | 18 | 48,249 | ||||||
tella Inc. | 1,800 | 35,444 | ||||||
Tsukui Corp. | 5,400 | 61,092 | ||||||
|
| |||||||
391,426 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 0.08% |
| |||||||
Seiko Holdings Corp. | 18,000 | 71,732 | ||||||
|
| |||||||
71,732 | ||||||||
HOME BUILDERS — 0.91% |
| |||||||
HAJIME CONSTRUCTION Co. Ltd.a | 1,800 | 103,287 | ||||||
Haseko Corp.b | 270,000 | 316,465 | ||||||
Misawa Homes Co. Ltd. | 5,400 | 77,163 | ||||||
PanaHome Corp. | 18,000 | 109,341 | ||||||
Takamatsu Construction Group Co. Ltd. | 3,600 | 57,019 | ||||||
Token Corp. | 1,440 | 73,677 | ||||||
West Holdings Corp. | 3,600 | 49,937 | ||||||
Yamada SxL Home Co. Ltd.b | 18,000 | 24,216 | ||||||
|
| |||||||
811,105 | ||||||||
HOME FURNISHINGS — 0.84% |
| |||||||
Alpine Electronics Inc. | 9,000 | 88,152 | ||||||
Canon Electronics Inc. | 3,600 | 63,366 | ||||||
Clarion Co. Ltd.a,b | 36,000 | 41,095 | ||||||
Corona Corp. | 3,600 | 39,517 | ||||||
Foster Electric Co. Ltd. | 5,400 | 104,406 |
Security | Shares | Value | ||||||
France Bed Holdings Co. Ltd. | 18,000 | $ | 33,940 | |||||
Hoshizaki Electric Co. Ltd. | 7,200 | 239,963 | ||||||
JVC Kenwood Corp. | 27,040 | 55,395 | ||||||
Pioneer Corp.a,b | 52,200 | 82,464 | ||||||
|
| |||||||
748,298 | ||||||||
HOUSEHOLD PRODUCTS & WARES — 0.37% |
| |||||||
Kokuyo Co. Ltd. | 18,000 | 130,806 | ||||||
Mitsubishi Pencil Co. Ltd. | 3,600 | 80,905 | ||||||
Pilot Corp. | 3,600 | 121,449 | ||||||
|
| |||||||
333,160 | ||||||||
HOUSEWARES — 0.20% |
| |||||||
Noritake Co. Ltd. | 18,000 | 44,213 | ||||||
Sangetsu Co. Ltd. | 5,400 | 137,814 | ||||||
|
| |||||||
182,027 | ||||||||
INTERNET — 2.81% |
| |||||||
Bit-Isle Inc. | 3,600 | 33,610 | ||||||
Colopl Inc.b | 1,800 | 63,843 | ||||||
COOKPAD Inc. | 1,800 | 45,681 | ||||||
CyberAgent Inc. | 108 | 277,829 | ||||||
Digital Garage Inc. | 36 | 184,192 | ||||||
Dwango Co. Ltd. | 18 | 62,834 | ||||||
En-Japan Inc. | 36 | 58,597 | ||||||
F@N Communications Inc. | 1,800 | 52,652 | ||||||
GMO Internet Inc. | 12,600 | 139,722 | ||||||
Gurunavi Inc. | 3,600 | 46,855 | ||||||
Ikyu Corp. | 36 | 47,516 | ||||||
Internet Initiative Japan Inc. | 5,400 | 156,306 | ||||||
kabu.com Securities Co. Ltd. | 14,400 | 64,724 | ||||||
Kakaku.com Inc. | 28,800 | 529,534 | ||||||
Macromill Inc. | 7,200 | 45,204 | ||||||
Matsui Securities Co. Ltd. | 21,600 | 184,045 | ||||||
Monex Group Inc. | 342 | 126,183 | ||||||
MonotaRO Co. Ltd. | 5,400 | 134,512 | ||||||
Start Today Co. Ltd. | 10,800 | 242,165 | ||||||
|
| |||||||
2,496,004 | ||||||||
IRON & STEEL — 0.98% |
| |||||||
Aichi Steel Corp. | 18,000 | 89,895 | ||||||
Godo Steel Ltd. | 36,000 | 59,440 | ||||||
Kurimoto Ltd. | 18,000 | 49,534 | ||||||
Kyoei Steel Ltd. | 3,600 | 59,000 | ||||||
Mitsubishi Steel Manufacturing Co. Ltd. | 18,000 | 48,800 | ||||||
Nisshin Steel Holdings Co. Ltd. | 16,200 | 182,284 | ||||||
Osaka Steel Co. Ltd. | 3,600 | 61,238 | ||||||
Sanyo Special Steel Co. Ltd. | 18,000 | 79,804 |
SCHEDULESOF INVESTMENTS | 35 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN SMALL-CAP ETF
August 31, 2013
Security | Shares | Value | ||||||
Tokyo Steel Manufacturing Co. Ltd. | 19,800 | $ | 97,068 | |||||
TOPY Industries Ltd. | 36,000 | 70,448 | ||||||
Yodogawa Steel Works Ltd. | 18,000 | 73,016 | ||||||
|
| |||||||
870,527 | ||||||||
LEISURE TIME — 1.35% |
| |||||||
Accordia Golf Co. Ltd. | 198 | 215,123 | ||||||
Daiichikosho Co. Ltd. | 7,200 | 193,952 | ||||||
Dunlop Sports Co. Ltd. | 3,600 | 41,829 | ||||||
Fields Corp. | 3,600 | 55,038 | ||||||
H.I.S. Co. Ltd. | 3,600 | 182,724 | ||||||
Mizuno Corp. | 18,000 | 110,258 | ||||||
PGM Holdings K.K. | 5,400 | 49,148 | ||||||
Roland Corp. | 3,600 | 32,546 | ||||||
Round One Corp. | 14,400 | 81,162 | ||||||
Tokyo Dome Corp. | 36,000 | 241,431 | ||||||
|
| |||||||
1,203,211 | ||||||||
LODGING — 0.34% |
| |||||||
Fujita Kanko Inc. | 18,000 | 70,448 | ||||||
Resorttrust Inc. | 7,200 | 231,524 | ||||||
|
| |||||||
301,972 | ||||||||
MACHINERY — 3.91% |
| |||||||
Aichi Corp. | 7,200 | 33,243 | ||||||
Aida Engineering Ltd. | 10,800 | 86,519 | ||||||
Chugai Ro Co. Ltd. | 18,000 | 41,462 | ||||||
CKD Corp. | 10,800 | 81,896 | ||||||
Daifuku Co. Ltd. | 18,000 | 169,515 | ||||||
Daihen Corp. | 18,000 | 64,944 | ||||||
Daiwa Industries Ltd. | 13,000 | 75,789 | ||||||
Denyo Co. Ltd. | 3,600 | 40,397 | ||||||
Ebara Corp. | 90,000 | 480,660 | ||||||
Fuji Machine Manufacturing Co. Ltd. | 14,400 | 130,916 | ||||||
Iseki & Co. Ltd. | 36,000 | 116,312 | ||||||
Juki Corp.b | 36,000 | 54,671 | ||||||
Komori Corp. | 10,800 | 125,045 | ||||||
Makino Milling Machine Co. Ltd. | 18,000 | 102,737 | ||||||
Max Co. Ltd. | 4,000 | 45,294 | ||||||
Miura Co. Ltd. | 5,400 | 139,135 | ||||||
Modec Inc. | 3,600 | 102,663 | ||||||
Nippon Sharyo Ltd. | 18,000 | 90,995 | ||||||
Nippon Thompson Co. Ltd. | 18,000 | 83,473 | ||||||
Nitto Kohki Co. Ltd. | 3,600 | 64,907 | ||||||
Obara Group Inc. | 3,600 | 96,866 | ||||||
Okuma Corp. | 36,000 | 272,986 | ||||||
Shima Seiki Manufacturing Ltd. | 5,400 | 104,351 | ||||||
Sintokogio Ltd. | 9,000 | 64,210 |
Security | Shares | Value | ||||||
Tadano Ltd. | 20,000 | $ | 280,691 | |||||
Takeuchi Manufacturing Co. Ltd. | 1,800 | 35,829 | ||||||
Torishima Pump Manufacturing Co. Ltd. | 3,600 | 33,793 | ||||||
Toshiba Machine Co. Ltd. | 18,000 | 75,218 | ||||||
Toyo Kanetsu K.K. | 18,000 | 48,249 | ||||||
Tsubakimoto Chain Co. | 36,000 | 242,165 | ||||||
Tsugami Corp. | 6,000 | 26,663 | ||||||
Yushin Precision Equipment Co. Ltd. | 3,600 | 63,697 | ||||||
|
| |||||||
3,475,291 | ||||||||
MANUFACTURING — 1.26% |
| |||||||
Amano Corp. | 12,600 | 126,623 | ||||||
Bando Chemical Industries Ltd. | 18,000 | 68,430 | ||||||
Glory Ltd. | 12,600 | 264,290 | ||||||
Japan Cash Machine Co. Ltd. | 3,600 | 51,148 | ||||||
JSP Corp. | 3,600 | 58,450 | ||||||
Nikkiso Co. Ltd. | 18,000 | 196,850 | ||||||
Nippon Valqua Industries Ltd. | 18,000 | 46,782 | ||||||
Nitta Corp. | 3,600 | 68,723 | ||||||
Shin-Etsu Polymer Co. Ltd. | 9,000 | 30,454 | ||||||
Tamron Co. Ltd. | 3,600 | 69,861 | ||||||
Tenma Corp. | 3,600 | 46,195 | ||||||
Tokai Rubber Industries Ltd. | 7,200 | 61,275 | ||||||
Toyo Tanso Co. Ltd. | 1,800 | 30,289 | ||||||
|
| |||||||
1,119,370 | ||||||||
MEDIA — 0.72% |
| |||||||
Gakken Holdings Co. Ltd. | 18,000 | 54,304 | ||||||
Kadokawa Corp.a | 3,600 | 121,449 | ||||||
SKY Perfect JSAT Holdings Inc. | 360 | 181,440 | ||||||
Tohokushinsha Film Corp. | 3,600 | 34,123 | ||||||
Tokyo Broadcasting System Holdings Inc. | 7,200 | 89,234 | ||||||
TV Asahi Corp. | 5,400 | 114,588 | ||||||
USEN Corp.b | 23,760 | 43,832 | ||||||
|
| |||||||
638,970 | ||||||||
METAL FABRICATE & HARDWARE — 1.88% |
| |||||||
Furukawa-Sky Aluminum Corp.a | 18,000 | 54,671 | ||||||
Hanwa Co. Ltd. | 36,000 | 155,940 | ||||||
Kitz Corp. | 18,000 | 77,052 | ||||||
Misumi Group Inc. | 16,200 | 398,746 | ||||||
Mitsui High-Tech Inc. | 5,400 | 29,610 | ||||||
Nachi-Fujikoshi Corp. | 36,000 | 179,055 | ||||||
Neturen Co. Ltd. | 7,200 | 60,908 | ||||||
NTN Corp.b | 90,000 | 333,894 | ||||||
Oiles Corp. | 5,480 | 118,743 |
36 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN SMALL-CAP ETF
August 31, 2013
Security | Shares | Value | ||||||
Onoken Co. Ltd. | 3,600 | $ | 34,564 | |||||
Ryobi Ltd. | 18,000 | 69,531 | ||||||
Sumikin Bussan Corp. | 18,000 | 58,523 | ||||||
Tocalo Co. Ltd. | 3,600 | 52,432 | ||||||
Toho Zinc Co. Ltd. | 18,000 | 52,653 | ||||||
|
| |||||||
1,676,322 | ||||||||
MINING — 1.62% |
| |||||||
Dowa Holdings Co. Ltd. | 54,000 | 484,330 | ||||||
Furukawa Co. Ltd. | 54,000 | 110,625 | ||||||
Mitsui Mining & Smelting Co. Ltd. | 108,000 | 253,172 | ||||||
Nippon Coke & Engineering Co. Ltd. | 45,000 | 51,368 | ||||||
Nippon Denko Co. Ltd. | 18,000 | 48,983 | ||||||
Nippon Light Metal Holdings Co. Ltd. | 108,000 | 137,594 | ||||||
Nittetsu Mining Co. Ltd. | 18,000 | 81,272 | ||||||
OSAKA Titanium technologies Co. Ltd.a | 3,600 | 73,457 | ||||||
Pacific Metals Co. Ltd. | 18,000 | 62,926 | ||||||
Sumitomo Light Metal Industries Ltd. | 90,000 | 88,977 | ||||||
Toho Titanium Co. Ltd.a | 7,200 | 53,203 | ||||||
|
| |||||||
1,445,907 | ||||||||
OFFICE & BUSINESS EQUIPMENT — 0.70% |
| |||||||
Riso Kagaku Corp. | 3,600 | 87,656 | ||||||
Sato Holdings Corp. | 5,400 | 88,335 | ||||||
Seiko Epson Corp. | 25,200 | 356,753 | ||||||
Toshiba Tec Corp. | 18,000 | 93,931 | ||||||
|
| |||||||
626,675 | ||||||||
OFFICE FURNISHINGS — 0.18% |
| |||||||
Itoki Corp. | 9,000 | 41,462 | ||||||
Okamura Corp. | 18,000 | 118,147 | ||||||
|
| |||||||
159,609 | ||||||||
OIL & GAS — 0.23% |
| |||||||
AOC Holdings Inc. | 9,000 | 28,711 | ||||||
Japan Drilling Co. Ltd. | 1,800 | 115,579 | ||||||
TOKAI Holdings Corp. | 16,200 | 56,633 | ||||||
|
| |||||||
200,923 | ||||||||
PACKAGING & CONTAINERS — 0.81% |
| |||||||
Achilles Corp. | 36,000 | 45,865 | ||||||
FP Corp. | 3,600 | 253,172 | ||||||
Fuji Seal International Inc. | 5,400 | 154,380 | ||||||
Fujimori Kogyo Co. Ltd. | 1,800 | 55,038 | ||||||
Nihon Yamamura Glass Co. Ltd. | 18,000 | 31,004 | ||||||
Rengo Co. Ltd. | 36,000 | 177,954 | ||||||
|
| |||||||
717,413 |
Security | Shares | Value | ||||||
PHARMACEUTICALS — 3.55% |
| |||||||
3-D Matrix Ltd.b | 2,300 | $ | 63,129 | |||||
Fuso Pharmaceutical Industries Ltd. | 18,000 | 55,037 | ||||||
Kaken Pharmaceutical Co. Ltd. | 18,000 | 275,371 | ||||||
Katakura Industries Co. Ltd. | 5,400 | 62,908 | ||||||
Kissei Pharmaceutical Co. Ltd. | 3,600 | 73,347 | ||||||
Kobayashi Pharmaceutical Co. Ltd. | 5,400 | 299,954 | ||||||
KYORIN Holdings Inc. | 9,000 | 193,273 | ||||||
Mochida Pharmaceutical Co. Ltd. | 18,000 | 225,103 | ||||||
NanoCarrier Co. Ltd.b | 36 | 55,331 | ||||||
Nichi-Iko Pharmaceutical Co. Ltd. | 5,400 | 113,322 | ||||||
Nippon Shinyaku Co. Ltd. | 18,000 | 298,487 | ||||||
Rohto Pharmaceutical Co. Ltd. | 18,000 | 252,805 | ||||||
Sawai Pharmaceutical Co. Ltd. | 3,600 | 470,754 | ||||||
Seikagaku Corp. | 7,200 | 96,719 | ||||||
Ship Healthcare Holdings Inc. | 5,400 | 195,933 | ||||||
Sosei Group Corp.b | 1,800 | 74,301 | ||||||
Toho Holdings Co. Ltd. | 9,000 | 148,326 | ||||||
Torii Pharmaceutical Co. Ltd. | 1,800 | 46,231 | ||||||
Towa Pharmaceutical Co. Ltd. | 1,800 | 82,831 | ||||||
UMN Pharma Inc.b | 1,800 | 42,434 | ||||||
Vital KSK Holdings Inc. | 5,400 | 36,105 | ||||||
|
| |||||||
3,161,701 | ||||||||
REAL ESTATE — 1.80% |
| |||||||
Airport Facilities Co. Ltd. | 5,400 | 38,691 | ||||||
Arnest One Corp. | 9,000 | 187,861 | ||||||
Daibiru Corp. | 9,000 | 95,215 | ||||||
Daikyo Inc. | 54,000 | 157,407 | ||||||
Goldcrest Co. Ltd. | 3,600 | 80,612 | ||||||
Heiwa Real Estate Co. Ltd. | 7,200 | 114,331 | ||||||
Hoosiers Holdings Co. Ltd.b | 5,400 | 39,462 | ||||||
Iida Home Max Co. Ltd. | 3,600 | 64,504 | ||||||
Leopalace21 Corp.b | 32,400 | 200,447 | ||||||
Raysum Co. Ltd.b | 36 | 45,644 | ||||||
Relo Holdings Inc. | 1,800 | 87,601 | ||||||
Sumitomo Real Estate Sales Co. Ltd. | 1,800 | 104,938 | ||||||
Sun Frontier Fudousan Co. Ltd. | 36 | 28,986 | ||||||
Takara Leben Co. Ltd. | 18,000 | 62,192 | ||||||
TOC Co. Ltd. | 14,400 | 114,625 | ||||||
Tokyu Livable Inc. | 3,600 | 70,631 | ||||||
Tosei Corp. | 5,400 | 36,380 | ||||||
Touei Housing Corp. | 3,600 | 74,411 | ||||||
|
| |||||||
1,603,938 | ||||||||
REAL ESTATE INVESTMENT TRUSTS — 6.31% |
| |||||||
Activia Properties Inc. | 36 | 248,402 |
SCHEDULESOF INVESTMENTS | 37 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN SMALL-CAP ETF
August 31, 2013
Security | Shares | Value | ||||||
Advance Residence Investment Corp. | 252 | $ | 512,399 | |||||
Daiwa House REIT Investment Corp. | 18 | 117,413 | ||||||
Daiwa Office Investment Corp. | 36 | 131,173 | ||||||
Daiwahouse Residential Investment Corp. | 72 | 266,014 | ||||||
Frontier Real Estate Investment Corp. | 39 | 331,112 | ||||||
Fukuoka REIT Corp. | 18 | 133,007 | ||||||
Global One Real Estate Investment Corp. Ltd. | 18 | 97,233 | ||||||
GLP J-REIT | 306 | 299,404 | ||||||
Hankyu REIT Inc. | 18 | 89,895 | ||||||
Heiwa Real Estate REIT Inc. | 126 | 82,189 | ||||||
Ichigo Real Estate Investment Corp. | 90 | 52,744 | ||||||
Industrial & Infrastructure Fund Investment Corp. | 18 | 159,058 | ||||||
Japan Excellent Inc. | 36 | 191,897 | ||||||
Japan Hotel REIT Investment Corp. | 468 | 181,257 | ||||||
Japan Logistics Fund Inc. | 36 | 327,289 | ||||||
Japan Rental Housing Investments Inc. | 162 | 107,323 | ||||||
Kenedix Realty Investment Corp. | 54 | 203,914 | ||||||
MID REIT Inc. | 36 | 79,254 | ||||||
Mori Hills REIT Investment Corp. | 36 | 201,070 | ||||||
MORI TRUST Sogo REIT Inc. | 36 | 300,505 | ||||||
Nippon Accommodations Fund Inc. | 54 | 353,891 | ||||||
Nomura Real Estate Residential Fund Inc. | 36 | 168,965 | ||||||
ORIX JREIT Inc. | 324 | 343,764 | ||||||
Premier Investment Corp. | 36 | 135,759 | ||||||
Sekisui House SI Investment Corp. | 36 | 165,479 | ||||||
TOKYU REIT Inc. | 36 | 183,825 | ||||||
Top REIT Inc. | 36 | 152,087 | ||||||
|
| |||||||
5,616,322 | ||||||||
RETAIL — 8.72% |
| |||||||
Alpen Co. Ltd. | 3,600 | 68,980 | ||||||
Aoki Holdings Inc. | 3,600 | 103,801 | ||||||
Aoyama Trading Co. Ltd. | 10,800 | 267,812 | ||||||
Arc Land Sakamoto Co. Ltd. | 3,600 | 51,478 | ||||||
Arcs Co. Ltd. | 5,400 | 98,572 | ||||||
Asahi Co. Ltd. | 3,600 | 56,615 | ||||||
Askul Corp. | 3,600 | 70,485 | ||||||
Atom Corp.a | 9,000 | 47,791 | ||||||
Autobacs Seven Co. Ltd. | 12,600 | 179,917 | ||||||
Belluna Co. Ltd. | 5,400 | 51,020 |
Security | Shares | Value | ||||||
BIC Camera Inc.a | 144 | $ | 62,596 | |||||
Cawachi Ltd. | 3,600 | 66,669 | ||||||
Chiyoda Co. Ltd. | 5,400 | 118,606 | ||||||
cocokara fine Inc. | 3,600 | 106,075 | ||||||
Colowide Co. Ltd. | 9,000 | 94,756 | ||||||
Cosmos Pharmaceutical Corp. | 1,800 | 224,369 | ||||||
CREATE HOLDINGS Co. Ltd. | 1,800 | 60,358 | ||||||
Daiei Inc. (The)b | 21,600 | 74,190 | ||||||
DCM Holdings Co. Ltd. | 16,200 | 111,121 | ||||||
Doutor Nichires Holdings Co. Ltd. | 7,200 | 112,203 | ||||||
EDION Corp. | 14,400 | 78,227 | ||||||
Fuji Co. Ltd. | 3,600 | 61,348 | ||||||
Geo Holdings Corp. | 72 | 64,210 | ||||||
Gulliver International Co. Ltd. | 10,800 | 58,120 | ||||||
H2O Retailing Corp. | 18,000 | 151,353 | ||||||
Heiwado Co. Ltd. | 5,400 | 81,400 | ||||||
Hiramatsu Inc. | 5,400 | 35,004 | ||||||
Honeys Co. Ltd. | 3,420 | 35,554 | ||||||
Izumi Co. Ltd. | 9,000 | 250,053 | ||||||
Jin Co. Ltd.a | 1,800 | 63,293 | ||||||
Joshin Denki Co. Ltd. | 7,000 | 54,436 | ||||||
K’s Holdings Corp. | 9,000 | 275,187 | ||||||
Kappa Create Co. Ltd. | 3,600 | 66,045 | ||||||
Keiyo Co. Ltd.a | 9,000 | 43,113 | ||||||
Kisoji Co. Ltd. | 3,600 | 66,449 | ||||||
Kohnan Shoji Co. Ltd. | 5,400 | 58,064 | ||||||
Komeri Co. Ltd. | 5,400 | 134,401 | ||||||
Konaka Co. Ltd. | 3,600 | 31,812 | ||||||
Kura Corp. | 3,600 | 58,597 | ||||||
Maruetsu Inc. (The) | 18,000 | 55,955 | ||||||
Matsumotokiyoshi Co. Ltd. | 5,400 | 182,724 | ||||||
Matsuya Co. Ltd.b | 7,200 | 83,217 | ||||||
Ministop Co. Ltd. | 3,600 | 54,487 | ||||||
MOS Food Services Inc. | 5,400 | 105,397 | ||||||
Nishimatsuya Chain Co. Ltd. | 10,800 | 85,638 | ||||||
Nissen Holdings Co. Ltd. | 10,800 | 35,444 | ||||||
Ohsho Food Service Corp. | 1,800 | 58,340 | ||||||
Otsuka Kagu Ltd. | 1,800 | 18,126 | ||||||
Pal Co. Ltd. | 1,800 | 41,517 | ||||||
Paris Miki Holdings Inc. | 7,200 | 34,857 | ||||||
Plenus Co. Ltd. | 3,600 | 65,054 | ||||||
Point Inc. | 3,060 | 144,400 | ||||||
Ringer Hut Co. Ltd. | 3,600 | 51,001 | ||||||
Royal Holdings Co. Ltd. | 5,400 | 80,190 | ||||||
Ryohin Keikaku Co. Ltd. | 3,600 | 317,016 |
38 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN SMALL-CAP ETF
August 31, 2013
Security | Shares | Value | ||||||
Saint Marc Holdings Co. Ltd. | 1,800 | $ | 86,225 | |||||
Saizeriya Co. Ltd. | 7,200 | 94,591 | ||||||
Senshukai Co. Ltd. | 7,200 | 62,009 | ||||||
Seria Co. Ltd. | 3,600 | 111,543 | ||||||
Shimachu Co. Ltd. | 9,000 | 219,691 | ||||||
Starbucks Coffee Japan Ltd. | 90 | 87,876 | ||||||
Sugi Holdings Co. Ltd. | 7,200 | 279,223 | ||||||
Sundrug Co. Ltd. | 7,200 | 335,362 | ||||||
Toridoll Corp. | 3,600 | 32,032 | ||||||
TSI Holdings Co. Ltd. | 18,000 | 118,147 | ||||||
Tsuruha Holdings Inc. | 3,600 | 326,189 | ||||||
United Arrows Ltd. | 3,600 | 145,115 | ||||||
Valor Co. Ltd. | 7,200 | 104,351 | ||||||
Watami Co. Ltd. | 5,400 | 91,362 | ||||||
Welcia Holdings Co. Ltd. | 1,800 | 89,436 | ||||||
Xebio Co. Ltd. | 5,400 | 121,963 | ||||||
Yellow Hat Ltd. | 3,600 | 63,220 | ||||||
Yoshinoya Holdings Co. Ltd.a | 10,800 | 124,385 | ||||||
Zensho Holdings Co. Ltd.a | 14,400 | 162,764 | ||||||
|
| |||||||
7,762,927 | ||||||||
SEMICONDUCTORS — 0.68% |
| |||||||
Axell Corp. | 1,800 | 34,655 | ||||||
Megachips Corp. | 3,600 | 52,029 | ||||||
Mimasu Semiconductor Industry Co. Ltd. | 5,400 | 45,186 | ||||||
Nippon Chemi-Con Corp.b | 36,000 | 141,997 | ||||||
Sanken Electric Co. Ltd. | 18,000 | 95,398 | ||||||
Shindengen Electric Manufacturing Co. Ltd. | 18,000 | 101,452 | ||||||
Shinko Electric Industries Co. Ltd. | 14,400 | 137,227 | ||||||
|
| |||||||
607,944 | ||||||||
SHIPBUILDING — 0.39% |
| |||||||
Mitsui Engineering & Shipbuilding Co. Ltd. | 144,000 | 261,245 | ||||||
Namura Shipbuilding Co. Ltd. | 9,000 | 86,684 | ||||||
|
| |||||||
347,929 | ||||||||
SOFTWARE — 1.23% |
| |||||||
Access Co. Ltd.b | 5,400 | 37,590 | ||||||
Capcom Co. Ltd. | 9,000 | 155,389 | ||||||
Fuji Soft Inc. | 3,600 | 61,275 | ||||||
IT Holdings Corp. | 14,448 | 172,878 | ||||||
Justsystems Corp.b | 5,400 | 30,436 | ||||||
Nihon Unisys Ltd. | 10,800 | 88,170 | ||||||
NSD Co. Ltd. | 7,200 | 79,474 | ||||||
Obic Business Consultants Co. Ltd. | 900 | 53,937 |
Security | Shares | Value | ||||||
Square Enix Holdings Co. Ltd. | 12,600 | $ | 184,541 | |||||
Systena Corp. | 3,600 | 27,115 | ||||||
Tecmo Koei Holdings Co. Ltd. | 7,200 | 70,815 | ||||||
Trans Cosmos Inc. | 5,400 | 81,896 | ||||||
Zenrin Co. Ltd. | 5,400 | 52,616 | ||||||
|
| |||||||
1,096,132 | ||||||||
STORAGE & WAREHOUSING — 0.31% |
| |||||||
Mitsui-Soko Co. Ltd. | 18,000 | 84,024 | ||||||
Sumitomo Warehouse Co. Ltd. (The) | 36,000 | 190,429 | ||||||
|
| |||||||
274,453 | ||||||||
TELECOMMUNICATIONS — 0.92% |
| |||||||
Denki Kogyo Co. Ltd. | 18,000 | 105,305 | ||||||
Hitachi Kokusai Electric Inc. | 18,000 | 184,742 | ||||||
Japan Radio Co. Ltd.b | 18,000 | 59,257 | ||||||
Nisshinbo Holdings Inc. | 24,000 | 177,588 | ||||||
Oki Electric Industry Co. Ltd.b | 144,000 | 242,165 | ||||||
T-Gaia Corp. | 5,400 | 53,166 | ||||||
|
| |||||||
822,223 | ||||||||
TEXTILES — 0.75% |
| |||||||
Fujibo Holdings Inc. | 18,000 | 35,040 | ||||||
Kurabo Industries Ltd. | 36,000 | 56,872 | ||||||
Nitto Boseki Co. Ltd. | 36,000 | 132,824 | ||||||
Seiren Co. Ltd. | 10,800 | 67,366 | ||||||
Tokai Corp. (GIFU) | 1,800 | 49,460 | ||||||
Toyobo Co. Ltd. | 162,000 | 267,482 | ||||||
Unitika Ltd.b | 108,000 | 58,340 | ||||||
|
| |||||||
667,384 | ||||||||
TOYS, GAMES & HOBBIES — 0.08% |
| |||||||
Tomy Co. Ltd. | 14,400 | 67,219 | ||||||
|
| |||||||
67,219 | ||||||||
TRANSPORTATION — 2.39% |
| |||||||
Daiichi Chuo Kisen Kaishab | 36,000 | 33,023 | ||||||
Fukuyama Transporting Co. Ltd. | 36,000 | 216,848 | ||||||
Hitachi Transport System Ltd. | 9,000 | 119,982 | ||||||
Iino Kaiun Kaisha Ltd. | 14,400 | 74,998 | ||||||
Kawasaki Kisen Kaisha Ltd. | 162,000 | 366,549 | ||||||
Kintetsu World Express Inc. | 3,600 | 129,522 | ||||||
Nippon Konpo Unyu Soko Co. Ltd. | 12,600 | 196,098 | ||||||
NS United Kaiwn Kaisha Ltd.b | 18,000 | 31,371 | ||||||
Sankyu Inc. | 54,000 | 172,267 | ||||||
Seino Holdings Co. Ltd. | 36,000 | 322,153 | ||||||
Senko Co. Ltd. | 18,000 | 86,225 | ||||||
Shibusawa Warehouse Co. Ltd. (The) | 18,000 | 66,228 | ||||||
Sotetsu Holdings Inc. | 72,000 | 271,518 |
SCHEDULESOF INVESTMENTS | 39 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN SMALL-CAP ETF
August 31, 2013
Security | Shares | Value | ||||||
Yusen Logistics Co. Ltd. | 3,600 | $ | 35,371 | |||||
|
| |||||||
2,122,153 | ||||||||
VENTURE CAPITAL — 0.24% |
| |||||||
JAFCO Co. Ltd. | 5,400 | 209,142 | ||||||
|
| |||||||
209,142 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $88,195,622) | 88,752,351 | |||||||
SHORT-TERM INVESTMENTS — 1.46% |
| |||||||
MONEY MARKET FUNDS — 1.46% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.15%c,d,e | 1,217,466 | 1,217,466 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
0.13%c,d,e | 77,308 | 77,308 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.00%c,d | 6,860 | 6,860 | ||||||
|
| |||||||
1,301,634 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $1,301,634) | 1,301,634 | |||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $89,497,256) | 90,053,985 | |||||||
Other Assets, Less Liabilities — (1.20)% |
| (1,066,298 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 88,987,687 | |||||
|
|
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.
40 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 99.77% |
| |||||||
AGRICULTURE — 8.21% |
| |||||||
British American Tobacco (Malaysia) Bhd | 777,200 | $ | 14,702,856 | |||||
Genting Plantations Bhd | 1,366,700 | 3,948,545 | ||||||
IOI Corp. Bhd | 17,485,030 | 28,744,703 | ||||||
Kuala Lumpur Kepong Bhd | 2,902,700 | 19,017,004 | ||||||
|
| |||||||
66,413,108 | ||||||||
AIRLINES — 0.73% |
| |||||||
AirAsia Bhd | 7,569,700 | 5,945,605 | ||||||
|
| |||||||
5,945,605 | ||||||||
AUTO MANUFACTURERS — 1.50% |
| |||||||
UMW Holdings Bhd | 3,179,000 | 12,174,997 | ||||||
|
| |||||||
12,174,997 | ||||||||
BANKS — 28.46% |
| |||||||
Alliance Financial Group Bhd | 6,551,600 | 10,072,480 | ||||||
AMMB Holdings Bhd | 10,015,737 | 22,655,278 | ||||||
CIMB Group Holdings Bhd | 27,581,164 | 61,128,206 | ||||||
Hong Leong Bank Bhd | 3,408,140 | 14,629,660 | ||||||
Malayan Banking Bhd | 26,218,920 | 79,820,139 | ||||||
Public Bank Bhd Foreign | 6,401,000 | 33,439,732 | ||||||
RHB Capital Bhd | 3,750,800 | 8,541,284 | ||||||
|
| |||||||
230,286,779 | ||||||||
BUILDING MATERIALS — 0.82% |
| |||||||
Lafarge Malaysia Bhd | 2,313,160 | 6,661,844 | ||||||
|
| |||||||
6,661,844 | ||||||||
CHEMICALS — 4.21% |
| |||||||
Petronas Chemicals Group Bhd | 16,913,800 | 34,087,634 | ||||||
|
| |||||||
34,087,634 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 0.70% |
| |||||||
Hong Leong Financial Group Bhd | 1,274,200 | 5,624,751 | ||||||
|
| |||||||
5,624,751 | ||||||||
ELECTRIC — 6.37% |
| |||||||
Tenaga Nasional Bhd | 16,963,512 | 45,084,545 | ||||||
YTL Power International Bhd | 13,243,375 | 6,450,841 | ||||||
|
| |||||||
51,535,386 | ||||||||
ENGINEERING & CONSTRUCTION — 2.57% |
| |||||||
Gamuda Bhd | 10,097,100 | 13,740,479 | ||||||
Malaysia Airports Holdings Bhd | 3,338,900 | 7,095,067 | ||||||
|
| |||||||
20,835,546 | ||||||||
ENTERTAINMENT — 0.61% |
| |||||||
Berjaya Sports Toto Bhd | 4,061,013 | 4,932,930 | ||||||
|
| |||||||
4,932,930 |
Security | Shares | Value | ||||||
FOOD — 2.70% |
| |||||||
Felda Global Ventures Holdings Bhd | 7,691,900 | $ | 10,233,230 | |||||
PPB Group Bhd | 2,867,166 | 11,644,112 | ||||||
|
| |||||||
21,877,342 | ||||||||
GAS — 2.72% |
| |||||||
Petronas Gas Bhd | 3,587,100 | 21,993,818 | ||||||
|
| |||||||
21,993,818 | ||||||||
HEALTH CARE — SERVICES — 2.22% |
| |||||||
IHH Healthcare Bhda | 14,710,300 | 17,958,232 | ||||||
|
| |||||||
17,958,232 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 9.30% |
| |||||||
IJM Corp. Bhd | 6,712,140 | 11,300,140 | ||||||
MMC Corp. Bhd | 4,566,700 | 3,475,683 | ||||||
Sime Darby Bhd | 16,332,525 | 46,689,218 | ||||||
YTL Corp. Bhd | 29,202,612 | 13,780,059 | ||||||
|
| |||||||
75,245,100 | ||||||||
LODGING — 7.18% |
| |||||||
Genting Bhd | 12,356,600 | 35,097,672 | ||||||
Genting Malaysia Bhd | 17,937,300 | 22,989,888 | ||||||
|
| |||||||
58,087,560 | ||||||||
MEDIA — 1.05% |
| |||||||
Astro Malaysia Holdings Bhd | 9,429,500 | 8,497,243 | ||||||
|
| |||||||
8,497,243 | ||||||||
OIL & GAS — 1.57% |
| |||||||
Petronas Dagangan Bhd | 1,501,500 | 12,707,725 | ||||||
|
| |||||||
12,707,725 | ||||||||
OIL & GAS SERVICES — 2.93% |
| |||||||
Sapurakencana Petroleum Bhda | 21,720,500 | 23,738,974 | ||||||
|
| |||||||
23,738,974 | ||||||||
REAL ESTATE — 0.87% |
| |||||||
UEM Sunrise Bhd | 9,134,600 | 7,007,898 | ||||||
|
| |||||||
7,007,898 | ||||||||
RETAIL — 0.46% |
| |||||||
Parkson Holdings Bhd | 3,610,571 | 3,682,293 | ||||||
|
| |||||||
3,682,293 | ||||||||
TELECOMMUNICATIONS — 12.48% |
| |||||||
Axiata Group Bhd | 15,454,700 | 31,711,600 | ||||||
DiGi.Com Bhd | 21,135,200 | 30,241,400 | ||||||
Maxis Bhd | 13,593,900 | 28,307,261 | ||||||
Telekom Malaysia Bhd | 6,488,200 | 10,686,099 | ||||||
|
| |||||||
100,946,360 |
SCHEDULESOF INVESTMENTS | 41 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI MALAYSIA ETF
August 31, 2013
Security | Shares | Value | ||||||
TRANSPORTATION — 2.11% |
| |||||||
Bumi Armada Bhda | 6,202,400 | $ | 7,364,140 | |||||
MISC Bhda | 6,746,120 | 9,693,793 | ||||||
|
| |||||||
17,057,933 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $386,427,264) |
| 807,299,058 | ||||||
SHORT-TERM INVESTMENTS — 0.01% |
| |||||||
MONEY MARKET FUNDS — 0.01% |
| |||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.00%b,c | 70,542 | 70,542 | ||||||
|
| |||||||
70,542 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $70,542) |
| 70,542 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $386,497,806) |
| 807,369,600 | ||||||
Other Assets, Less Liabilities — 0.22% |
| 1,768,837 | ||||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 809,138,437 | |||||
|
|
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.
42 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
iSHARES® MSCI PACIFIC EX JAPAN ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 99.20% |
| |||||||
AUSTRALIA — 62.64% |
| |||||||
AGL Energy Ltd. | 1,113,075 | $ | 15,613,917 | |||||
ALS Ltd.a | 751,601 | 6,158,601 | ||||||
Alumina Ltd.b | 5,162,175 | 4,643,666 | ||||||
Amcor Ltd. | 2,423,925 | 22,516,992 | ||||||
AMP Ltd. | 5,913,225 | 24,963,739 | ||||||
APA Group | 1,678,725 | 8,955,983 | ||||||
Asciano Ltd. | 1,958,625 | 9,716,579 | ||||||
ASX Ltd. | 415,126 | 13,106,993 | ||||||
Aurizon Holdings Ltd. | 4,075,425 | 16,515,479 | ||||||
Australia and New Zealand Banking | 5,359,050 | 141,711,432 | ||||||
Bendigo and Adelaide Bank Ltd. | 822,600 | 7,407,075 | ||||||
BGP Holdings PLCb,c | 27,004,595 | 356 | ||||||
BHP Billiton Ltd. | 6,438,600 | 205,009,681 | ||||||
Boral Ltd. | 1,548,675 | 5,793,172 | ||||||
Brambles Ltd. | 3,126,150 | 24,501,878 | ||||||
Caltex Australia Ltd. | 271,575 | 4,573,916 | ||||||
CFS Retail Property Trust Group | 4,285,125 | 7,709,421 | ||||||
Coca-Cola Amatil Ltd. | 1,145,025 | 12,523,341 | ||||||
Cochlear Ltd. | 113,625 | 5,803,824 | ||||||
Commonwealth Bank of Australia | 3,226,050 | 209,289,727 | ||||||
Computershare Ltd. | 939,375 | 8,073,711 | ||||||
Crown Ltd. | 801,675 | 10,431,708 | ||||||
CSL Ltd. | 997,875 | 60,426,587 | ||||||
Dexus Property Group | 9,749,250 | 8,943,661 | ||||||
Echo Entertainment Group Ltd. | 1,565,325 | 3,764,221 | ||||||
Federation Centres | 2,880,675 | 5,849,732 | ||||||
Flight Centre Ltd.a | 112,500 | 4,709,310 | ||||||
Fortescue Metals Group Ltd. | 3,159,000 | 12,182,724 | ||||||
Goodman Group | 3,455,325 | 14,248,750 | ||||||
GPT Group | 3,563,325 | 11,266,543 | ||||||
Harvey Norman Holdings Ltd. | 1,056,375 | 2,831,989 | ||||||
Iluka Resources Ltd. | 848,700 | 8,125,864 | ||||||
Incitec Pivot Ltd. | 3,262,950 | 7,526,916 | ||||||
Insurance Australia Group Ltd. | 4,176,225 | 21,647,799 | ||||||
James Hardie Industries SE | 884,925 | 7,731,831 | ||||||
Leighton Holdings Ltd. | 342,675 | 5,310,538 | ||||||
Lend Lease Group | 1,103,850 | 9,418,515 | ||||||
Macquarie Group Ltd. | 616,050 | 24,065,310 | ||||||
Metcash Ltd. | 1,751,625 | 5,070,273 | ||||||
Mirvac Group | 7,380,000 | 10,812,575 | ||||||
National Australia Bank Ltd. | 4,796,325 | 138,621,369 | ||||||
Newcrest Mining Ltd. | 1,542,375 | 18,215,470 |
Security | Shares | Value | ||||||
Orica Ltd. | 737,775 | $ | 12,320,606 | |||||
Origin Energy Ltd. | 2,198,025 | 25,939,129 | ||||||
Qantas Airways Ltd.b | 2,216,025 | 2,703,971 | ||||||
QBE Insurance Group Ltd. | 2,410,650 | 32,635,076 | ||||||
Ramsay Health Care Ltd. | 267,300 | 8,891,938 | ||||||
Rio Tinto Ltd. | 879,075 | 45,645,857 | ||||||
Santos Ltd. | 1,933,650 | 25,695,293 | ||||||
Seek Ltd. | 639,675 | 6,096,071 | ||||||
Sonic Healthcare Ltd. | 749,700 | 10,316,274 | ||||||
SP AusNet | 3,354,075 | 3,450,338 | ||||||
Stockland Corp. Ltd. | 4,632,975 | 15,391,313 | ||||||
Suncorp Group Ltd. | 2,587,275 | 28,412,703 | ||||||
Sydney Airport | 427,950 | 1,440,760 | ||||||
Tabcorp Holdings Ltd. | 1,496,475 | 4,291,728 | ||||||
Tatts Group Ltd. | 2,817,675 | 8,055,691 | ||||||
Telstra Corp. Ltd. | 8,727,525 | 38,088,517 | ||||||
Toll Holdings Ltd. | 1,369,125 | 6,657,982 | ||||||
Transurban Group | 2,818,125 | 16,942,243 | ||||||
Treasury Wine Estates Ltd. | 1,291,050 | 5,473,396 | ||||||
Wesfarmers Ltd. | 2,022,075 | 73,227,046 | ||||||
Westfield Group | 4,261,500 | 42,054,176 | ||||||
Westfield Retail Trust | 6,144,300 | 15,979,462 | ||||||
Westpac Banking Corp. | 6,222,150 | 173,955,703 | ||||||
Whitehaven Coal Ltd.a | 1,131,975 | 2,001,263 | ||||||
Woodside Petroleum Ltd. | 1,325,925 | 45,088,082 | ||||||
Woolworths Ltd. | 2,502,900 | 79,515,810 | ||||||
WorleyParsons Ltd. | 414,675 | 8,128,956 | ||||||
|
| |||||||
1,884,190,552 | ||||||||
HONG KONG — 23.41% |
| |||||||
AAC Technologies Holdings Inc. | 1,575,000 | 7,190,111 | ||||||
AIA Group Ltd. | 24,210,014 | 106,307,513 | ||||||
ASM Pacific Technology Ltd. | 495,000 | 5,100,395 | ||||||
Bank of East Asia Ltd. (The) | 2,475,120 | 9,575,673 | ||||||
BOC Hong Kong (Holdings) Ltd. | 7,425,000 | 23,411,386 | ||||||
Cathay Pacific Airways Ltd.a | 2,250,000 | 3,859,099 | ||||||
Cheung Kong (Holdings) Ltd. | 2,700,000 | 38,544,568 | ||||||
Cheung Kong Infrastructure Holdings Ltd. | 1,350,000 | 9,122,563 | ||||||
CLP Holdings Ltd.a | 3,600,000 | 28,783,658 | ||||||
First Pacific Co. Ltd. | 4,682,500 | 4,848,921 | ||||||
Galaxy Entertainment Group Ltd.b | 4,275,000 | 26,021,356 | ||||||
Hang Lung Properties Ltd. | 4,500,736 | 14,074,957 | ||||||
Hang Seng Bank Ltd. | 1,530,000 | 23,775,534 | ||||||
Henderson Land Development Co. Ltd. | 2,250,261 | 13,203,713 |
SCHEDULESOF INVESTMENTS | 43 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI PACIFIC EX JAPAN ETF
August 31, 2013
Security | Shares | Value | ||||||
HKT Trust and HKT Ltd. | 4,500,000 | $ | 4,195,682 | |||||
Hong Kong and China Gas Co. Ltd. (The)a | 11,663,406 | 26,953,502 | ||||||
Hong Kong Exchanges and Clearing Ltd. | 2,250,000 | 34,528,784 | ||||||
Hopewell Holdings Ltd.a | 1,125,000 | 3,568,942 | ||||||
Hutchison Whampoa Ltd. | 4,275,000 | 49,561,862 | ||||||
Hysan Development Co. Ltd. | 1,350,000 | 5,866,992 | ||||||
Kerry Properties Ltd. | 1,350,000 | 5,466,574 | ||||||
Li & Fung Ltd.a | 11,701,200 | 17,202,321 | ||||||
Link REIT (The)a | 4,612,500 | 21,145,978 | ||||||
MGM China Holdings Ltd. | 1,890,000 | 5,642,409 | ||||||
MTR Corp. Ltd. | 2,925,000 | 11,033,252 | ||||||
New World Development Co. Ltd. | 7,425,941 | 10,419,148 | ||||||
NWS Holdings Ltd. | 2,925,000 | 4,368,036 | ||||||
Orient Overseas International Ltd. | 450,000 | 2,477,948 | ||||||
PCCW Ltd. | 7,875,000 | 3,544,278 | ||||||
Power Assets Holdings Ltd. | 2,812,500 | 24,246,315 | ||||||
Sands China Ltd. | 4,860,000 | 27,952,646 | ||||||
Shangri-La Asia Ltd. | 3,151,000 | 4,851,818 | ||||||
Sino Land Co. Ltd. | 5,850,800 | 7,862,031 | ||||||
SJM Holdings Ltd.a | 3,825,000 | 9,806,175 | ||||||
Sun Hung Kai Properties Ltd. | 3,150,000 | 40,865,831 | ||||||
Swire Pacific Ltd. Class A | 1,350,000 | 15,477,020 | ||||||
Swire Properties Ltd. | 2,295,000 | 6,422,354 | ||||||
Wharf (Holdings) Ltd. (The) | 2,925,600 | 24,051,764 | ||||||
Wheelock and Co. Ltd. | 1,800,000 | 9,192,201 | ||||||
Wynn Macau Ltd.a | 3,060,000 | 9,253,714 | ||||||
Yue Yuen Industrial (Holdings) Ltd.a | 1,462,500 | 4,507,602 | ||||||
|
| |||||||
704,284,626 | ||||||||
NEW ZEALAND — 0.90% |
| |||||||
Auckland International Airport Ltd. | 2,125,800 | 5,064,792 | ||||||
Contact Energy Ltd. | 739,125 | 3,030,277 | ||||||
Fletcher Building Ltd. | 1,367,100 | 9,263,879 | ||||||
SKYCITY Entertainment Group Ltd. | 1,149,525 | 3,459,047 | ||||||
Telecom Corp. of New Zealand Ltd. | 3,620,700 | 6,371,804 | ||||||
|
| |||||||
27,189,799 | ||||||||
SINGAPORE — 12.25% |
| |||||||
Ascendas REIT | 4,050,813 | 6,916,603 |
Security | Shares | Value | ||||||
CapitaCommercial Trusta | 4,050,000 | $ | 4,298,218 | |||||
CapitaLand Ltd. | 5,175,000 | 12,362,444 | ||||||
CapitaMall Trust Management Ltd. | 4,725,000 | 6,883,493 | ||||||
CapitaMalls Asia Ltd. | 2,700,000 | 3,795,966 | ||||||
City Developments Ltd. | 900,000 | 7,028,001 | ||||||
ComfortDelGro Corp. Ltd. | 4,050,000 | 5,852,555 | ||||||
DBS Group Holdings Ltd. | 3,513,000 | 43,473,977 | ||||||
Genting Singapore PLC | 12,150,400 | 12,514,412 | ||||||
Global Logistic Properties Ltd. | 6,075,000 | 12,847,073 | ||||||
Golden Agri-Resources Ltd. | 14,400,987 | 6,316,470 | ||||||
Hutchison Port Holdings Trusta | 10,350,000 | 7,659,000 | ||||||
Jardine Cycle & Carriage Ltd.a | 225,000 | 5,845,506 | ||||||
Keppel Corp. Ltd. | 2,951,200 | 23,346,090 | ||||||
Keppel Land Ltd. | 1,350,000 | 3,563,344 | ||||||
Keppel REIT Management Ltd. | 236,096 | 221,903 | ||||||
Noble Group Ltd.a | 8,325,708 | 5,282,024 | ||||||
Olam International Ltd.a | 2,925,600 | 3,288,221 | ||||||
Oversea-Chinese Banking Corp. Ltd. | 5,175,600 | 40,091,391 | ||||||
SembCorp Industries Ltd. | 2,025,240 | 7,756,745 | ||||||
SembCorp Marine Ltd.a | 1,575,200 | 5,157,107 | ||||||
Singapore Airlines Ltd. | 1,125,800 | 8,350,363 | ||||||
Singapore Exchange Ltd. | 1,800,000 | 10,249,462 | ||||||
Singapore Press Holdings Ltd.a | 3,375,517 | 10,390,274 | ||||||
Singapore Technologies | 3,150,000 | 9,770,119 | ||||||
Singapore Telecommunications Ltd. | 15,975,328 | 43,918,857 | ||||||
StarHub Ltd. | 1,350,000 | 4,440,963 | ||||||
United Overseas Bank Ltd.a | 2,565,000 | 39,959,154 | ||||||
UOL Group Ltd. | 900,000 | 4,511,455 | ||||||
Wilmar International Ltd. | 3,825,000 | 9,437,047 | ||||||
Yangzijiang Shipbuildinga | 3,825,000 | 2,831,114 | ||||||
|
| |||||||
368,359,351 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $2,802,242,015) |
| 2,984,024,328 | ||||||
RIGHTS — 0.00% | ||||||||
HONG KONG — 0.00% | ||||||||
New Hotelb | 111,786 | — | ||||||
|
| |||||||
— | ||||||||
|
| |||||||
TOTAL RIGHTS |
| |||||||
(Cost: $0) |
| — |
44 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI PACIFIC EX JAPAN ETF
August 31, 2013
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS — 2.53% |
| |||||||
MONEY MARKET FUNDS — 2.53% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.15%d,e,f | 71,341,985 | $ | 71,341,985 | |||||
BlackRock Cash Funds: Prime, |
| |||||||
0.13%d,e,f | 4,530,164 | 4,530,164 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.00%d,e | 206,439 | 206,439 | ||||||
|
| |||||||
76,078,588 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $76,078,588) |
| 76,078,588 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $2,878,320,603) | 3,060,102,916 | |||||||
Other Assets, Less Liabilities — (1.73)% |
| (52,035,430 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% | $ | 3,008,067,486 | ||||||
|
|
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.
SCHEDULESOF INVESTMENTS | 45 |
Table of Contents
Schedule of Investments
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 99.32% |
| |||||||
AGRICULTURE — 1.69% |
| |||||||
Golden Agri-Resources Ltd. | 43,632,628 | $ | 19,137,867 | |||||
|
| |||||||
19,137,867 | ||||||||
AIRLINES — 2.38% |
| |||||||
Singapore Airlines Ltd.a | 3,636,467 | 26,972,659 | ||||||
|
| |||||||
26,972,659 | ||||||||
BANKS — 33.28% |
| |||||||
DBS Group Holdings Ltd. | 9,999,500 | 123,745,526 | ||||||
Oversea-Chinese Banking Corp. Ltd. | 16,362,000 | 126,743,826 | ||||||
United Overseas Bank Ltd. | 8,181,000 | 127,448,670 | ||||||
|
| |||||||
377,938,022 | ||||||||
DISTRIBUTION & WHOLESALE — 2.08% |
| |||||||
Jardine Cycle & Carriage Ltd. | 909,000 | 23,615,845 | ||||||
|
| |||||||
23,615,845 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 2.73% |
| |||||||
Singapore Exchange Ltd. | 5,454,000 | 31,055,869 | ||||||
|
| |||||||
31,055,869 | ||||||||
ENGINEERING & CONSTRUCTION — 4.63% |
| |||||||
SembCorp Industries Ltd. | 6,363,000 | 24,370,527 | ||||||
Singapore Technologies Engineering Ltd. | 9,090,000 | 28,193,773 | ||||||
|
| |||||||
52,564,300 | ||||||||
ENTERTAINMENT — 3.46% |
| |||||||
Genting Singapore PLC | 38,178,400 | 39,322,182 | ||||||
|
| |||||||
39,322,182 | ||||||||
FOOD — 3.47% |
| |||||||
Olam International Ltd.a | 9,090,000 | 10,216,683 | ||||||
Wilmar International Ltd. | 11,817,000 | 29,154,925 | ||||||
|
| |||||||
39,371,608 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 6.64% |
| |||||||
Keppel Corp. Ltd. | 7,424,100 | 58,729,908 | ||||||
Noble Group Ltd. | 26,361,999 | 16,724,668 | ||||||
|
| |||||||
75,454,576 | ||||||||
LODGING — 1.88% |
| |||||||
City Developments Ltd.a | 2,727,000 | 21,294,842 | ||||||
|
| |||||||
21,294,842 | ||||||||
MEDIA — 2.95% |
| |||||||
Singapore Press Holdings Ltd.a | 10,869,000 | 33,456,174 | ||||||
|
| |||||||
33,456,174 |
Security | Shares | Value | ||||||
REAL ESTATE — 10.08% | ||||||||
CapitaLand Ltd. | 15,453,000 | $ | 36,915,332 | |||||
CapitaMalls Asia Ltd.a | 8,181,000 | 11,501,778 | ||||||
Global Logistic Properties Ltd. | 19,089,000 | 40,368,357 | ||||||
Keppel Land Ltd.a | 4,545,000 | 11,996,593 | ||||||
UOL Group Ltd. | 2,727,000 | 13,669,708 | ||||||
|
| |||||||
114,451,768 | ||||||||
REAL ESTATE INVESTMENT TRUSTS — 5.02% |
| |||||||
Ascendas REIT | 12,726,335 | 21,729,712 | ||||||
CapitaCommercial Trusta | 12,726,000 | 13,505,957 | ||||||
CapitaMall Trust Management Ltd. | 14,544,800 | 21,189,213 | ||||||
Keppel REIT Management Ltd. | 602,248 | 566,045 | ||||||
|
| |||||||
56,990,927 | ||||||||
SHIPBUILDING — 2.34% |
| |||||||
SembCorp Marine Ltd.a | 5,454,000 | 17,856,057 | ||||||
Yangzijiang Shipbuildinga | 11,817,000 | 8,746,477 | ||||||
|
| |||||||
26,602,534 | ||||||||
TELECOMMUNICATIONS — 12.94% |
| |||||||
Singapore Telecommunications Ltd. | 49,086,568 | 134,947,212 | ||||||
StarHub Ltd. | 3,636,000 | 11,960,995 | ||||||
|
| |||||||
146,908,207 | ||||||||
TRANSPORTATION — 3.75% |
| |||||||
ComfortDelGro Corp. Ltd.a | 12,726,000 | 18,390,029 | ||||||
Hutchison Port Holdings Trust | 32,724,000 | 24,215,760 | ||||||
|
| |||||||
42,605,789 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $1,147,850,119) |
| 1,127,743,169 | ||||||
SHORT-TERM INVESTMENTS — 8.08% |
| |||||||
MONEY MARKET FUNDS — 8.08% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.15%b,c,d | 85,947,692 | 85,947,692 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
0.13%b,c,d | 5,457,615 | 5,457,615 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.00%b,c | 367,289 | 367,289 | ||||||
|
| |||||||
91,772,596 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $91,772,596) |
| 91,772,596 | ||||||
|
|
46 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SINGAPORE ETF
August 31, 2013
Value | ||||||
TOTAL INVESTMENTS | ||||||
(Cost: $1,239,622,715) | $ | 1,219,515,765 | ||||
Other Assets, Less Liabilities — (7.40)% | (84,038,373 | ) | ||||
|
| |||||
NET ASSETS — 100.00% | $ | 1,135,477,392 | ||||
|
|
a | All or a portion of this security represents a security on loan. See Note 5. |
b | Affiliated issuer. See Note 2. |
c | The rate quoted is the annualized seven-day yield of the fund at period end. |
d | 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, 2013 were as follows:
Number of Contracts | Issue (Expiration) | Exchange | Notional Value | Net Unrealized Appreciation (Depreciation) | ||||||||||
148 | SGX MSCI Singapore Index (Sept. 2013) | Singapore | $ | 7,977,568 | $ | (85,780) | ||||||||
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 47 |
Table of Contents
Schedule of Investments
iSHARES® MSCI SOUTH KOREA CAPPED ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 97.90% |
| |||||||
ADVERTISING — 0.41% |
| |||||||
Cheil Worldwide Inc.a,b | 640,180 | $ | 13,725,764 | |||||
|
| |||||||
13,725,764 | ||||||||
AEROSPACE & DEFENSE — 0.67% |
| |||||||
Korea Aerospace Industries Ltd.b | 302,580 | 7,359,722 | ||||||
Samsung Techwin Co. Ltd.b | 255,062 | 15,257,076 | ||||||
|
| |||||||
22,616,798 | ||||||||
AGRICULTURE — 1.35% | ||||||||
KT&G Corp. | 698,849 | 45,706,443 | ||||||
|
| |||||||
45,706,443 | ||||||||
AIRLINES — 0.21% | ||||||||
Korean Air Lines Co. Ltd.a | 280,570 | 7,127,673 | ||||||
|
| |||||||
7,127,673 | ||||||||
AUTO MANUFACTURERS — 9.29% |
| |||||||
Hyundai Motor Co. | 954,420 | 214,089,978 | ||||||
Kia Motors Corp. | 1,645,931 | 99,641,064 | ||||||
|
| |||||||
313,731,042 | ||||||||
AUTO PARTS & EQUIPMENT — 4.68% |
| |||||||
Halla Visteon Climate Control Corp.b | 277,320 | 9,518,393 | ||||||
Hankook Tire Co. Ltd. | 487,014 | 25,270,939 | ||||||
Hyundai Mobis Co. Ltd. | 425,016 | 106,823,534 | ||||||
Hyundai Wia Corp.b | 106,054 | 16,385,083 | ||||||
|
| |||||||
157,997,949 | ||||||||
BANKS — 0.35% |
| |||||||
Industrial Bank of Korea | 1,172,780 | 11,938,574 | ||||||
|
| |||||||
11,938,574 | ||||||||
BEVERAGES — 0.15% |
| |||||||
Hite Jinro Co. Ltd.b | 225,730 | 5,114,283 | ||||||
|
| |||||||
5,114,283 | ||||||||
CHEMICALS — 3.90% |
| |||||||
Hanwha Chemical Corp.b | 616,182 | 9,825,162 | ||||||
KCC Corp. | 33,390 | 12,588,365 | ||||||
LG Chem Ltd. | 291,145 | 75,405,781 | ||||||
Lotte Chemical Corp. | 115,239 | 17,804,143 | ||||||
OCI Co. Ltd.b | 113,735 | 16,137,348 | ||||||
|
| |||||||
131,760,799 | ||||||||
COMMERCIAL SERVICES — 0.23% |
| |||||||
S1 Corp. | 133,647 | 7,645,227 | ||||||
|
| |||||||
7,645,227 |
Security | Shares | Value | ||||||
COMPUTERS — 0.45% | ||||||||
SK C&C Co. Ltd. | 154,898 | $ | 15,279,790 | |||||
|
| |||||||
15,279,790 | ||||||||
COSMETICS & PERSONAL CARE — 1.54% |
| |||||||
AmorePacific Corp. | 21,740 | 17,626,233 | ||||||
AmorePacific Group | 21,851 | 7,224,284 | ||||||
LG Household & Health Care Ltd. | 61,115 | 27,032,535 | ||||||
|
| |||||||
51,883,052 | ||||||||
DISTRIBUTION & WHOLESALE — 2.00% |
| |||||||
Daewoo International Corp.b | 330,763 | 10,428,994 | ||||||
Hanwha Corp. | 332,780 | 9,773,098 | ||||||
Samsung C&T Corp. | 800,508 | 41,321,660 | ||||||
SK Networks Co. Ltd. | 1,037,080 | 6,166,144 | ||||||
|
| |||||||
67,689,896 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 10.15% |
| |||||||
BS Financial Group Inc. | 1,133,592 | 14,552,215 | ||||||
Daewoo Securities Co. Ltd. | 1,195,837 | 10,072,588 | ||||||
DGB Financial Group Inc. | 936,560 | 13,119,686 | ||||||
Hana Financial Group Inc. | 1,743,458 | 54,971,425 | ||||||
Hyundai Securities Co. Ltd. | 985,207 | 5,058,943 | ||||||
KB Financial Group Inc. | 2,251,792 | 72,419,237 | ||||||
Korea Investment Holdings Co. Ltd. | 286,134 | 10,130,234 | ||||||
Mirae Asset Securities Co. Ltd. | 209,002 | 6,015,597 | ||||||
Samsung Card Co. Ltd. | 262,620 | 8,564,339 | ||||||
Samsung Securities Co. Ltd. | 415,471 | 16,805,232 | ||||||
Shinhan Financial Group Co. Ltd. | 2,665,727 | 98,219,210 | ||||||
Woori Finance Holdings Co. Ltd. | 2,391,770 | 23,916,623 | ||||||
Woori Investment & Securities Co. Ltd. | 895,568 | 8,793,920 | ||||||
|
| |||||||
342,639,249 | ||||||||
ELECTRIC — 1.34% | ||||||||
Korea Electric Power Corp.a | 1,638,070 | 45,303,139 | ||||||
|
| |||||||
45,303,139 | ||||||||
ELECTRICAL COMPONENTS & EQUIPMENT — 1.70% |
| |||||||
LG Electronics Inc.b | 677,938 | 44,216,667 | ||||||
LG Innotek Co. Ltd.a,b | 87,409 | 6,638,060 | ||||||
LS Industrial Systems Co. Ltd. | 120,259 | 6,706,033 | ||||||
|
| |||||||
57,560,760 |
48 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SOUTH KOREA CAPPED ETF
August 31, 2013
Security | Shares | Value | ||||||
ELECTRONICS — 2.01% | ||||||||
LG Display Co. Ltd.a | 1,488,392 | $ | 39,286,416 | |||||
Samsung Electro-Mechanics Co. Ltd. | 389,105 | 28,603,187 | ||||||
|
| |||||||
67,889,603 | ||||||||
ENGINEERING & CONSTRUCTION — 2.05% |
| |||||||
Daelim Industrial Co. Ltd.b | 191,866 | 15,123,891 | ||||||
Daewoo Engineering & Construction Co. Ltd.a,b | 889,154 | 5,911,406 | ||||||
GS Engineering & Construction Corp.b | 269,618 | 8,598,241 | ||||||
Hyundai Engineering & Construction Co. Ltd.b | 469,883 | 24,297,360 | ||||||
Samsung Engineering Co. Ltd.b | 200,974 | 15,244,368 | ||||||
|
| |||||||
69,175,266 | ||||||||
ENVIRONMENTAL CONTROL — 0.57% |
| |||||||
Coway Co. Ltd. | 362,751 | 19,215,133 | ||||||
|
| |||||||
19,215,133 | ||||||||
FOOD — 1.23% | ||||||||
CJ CheilJedang Corp. | 55,320 | 12,683,158 | ||||||
Lotte Confectionery Co. Ltd. | 5,559 | 7,571,918 | ||||||
ORION Corp.b | 23,944 | 21,268,217 | ||||||
|
| |||||||
41,523,293 | ||||||||
GAS — 0.26% | ||||||||
Korea Gas Corp. | 174,485 | 8,723,857 | ||||||
|
| |||||||
8,723,857 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 0.56% |
| |||||||
CJ Corp. | 106,298 | 10,198,403 | ||||||
LS Corp. | 135,110 | 8,605,267 | ||||||
|
| |||||||
18,803,670 | ||||||||
HOME BUILDERS — 0.25% | ||||||||
Hyundai Development Co. | 433,729 | 8,400,679 | ||||||
|
| |||||||
8,400,679 | ||||||||
HOME FURNISHINGS — 1.09% |
| |||||||
LG Corp. | 609,504 | 36,788,224 | ||||||
|
| |||||||
36,788,224 | ||||||||
INSURANCE — 3.60% |
| |||||||
Dongbu Insurance Co. Ltd. | 299,384 | 12,703,019 | ||||||
Hanwha Life Insurance Co. Ltd. | 1,571,630 | 9,202,824 | ||||||
Hyundai Marine & Fire Insurance Co. Ltd. | 444,450 | 11,851,466 | ||||||
Samsung Fire & Marine Insurance Co. Ltd. | 225,749 | 50,842,079 |
Security | Shares | Value | ||||||
Samsung Life Insurance Co. Ltd. | 385,840 | $ | 36,844,323 | |||||
|
| |||||||
121,443,711 | ||||||||
INTERNET — 2.82% |
| |||||||
NCsoft Corp. | 104,826 | 15,298,241 | ||||||
NHN Corp. | 178,619 | 71,846,659 | ||||||
NHN Entertainment Corp.a | 82,177 | 8,032,260 | ||||||
|
| |||||||
95,177,160 | ||||||||
IRON & STEEL — 4.22% |
| |||||||
Hyundai Steel Co. | 365,011 | 24,135,676 | ||||||
POSCO | 407,081 | 118,268,207 | ||||||
|
| |||||||
142,403,883 | ||||||||
LODGING — 0.49% |
| |||||||
Kangwon Land Inc. | 657,462 | 16,406,196 | ||||||
|
| |||||||
16,406,196 | ||||||||
MACHINERY — 0.65% | ||||||||
Doosan Heavy Industries & Construction | 334,526 | 12,853,055 | ||||||
Doosan Infracore Co. Ltd.a,b | 747,520 | 9,124,721 | ||||||
|
| |||||||
21,977,776 | ||||||||
MANUFACTURING — 1.11% |
| |||||||
Cheil Industries Inc. | 260,679 | 20,735,963 | ||||||
Doosan Corp. | 64,196 | 8,009,681 | ||||||
Kumho Petro Chemical Co. Ltd.b | 103,149 | 8,567,486 | ||||||
|
| |||||||
37,313,130 | ||||||||
METAL FABRICATE & HARDWARE — 0.61% |
| |||||||
Hyosung Corp. | 174,457 | 11,158,458 | ||||||
Hyundai Hysco Co. Ltd. | 240,376 | 9,398,062 | ||||||
|
| |||||||
20,556,520 | ||||||||
MINING — 0.49% |
| |||||||
Korea Zinc Co. Ltd.b | 57,709 | 16,610,086 | ||||||
|
| |||||||
16,610,086 | ||||||||
OIL & GAS — 3.40% |
| |||||||
GS Holdings Corp. | 345,865 | 17,666,362 | ||||||
S-Oil Corp. | 300,071 | 20,760,734 | ||||||
SK Holdings Co. Ltd. | 168,603 | 28,403,010 | ||||||
SK Innovation Co. Ltd. | 381,688 | 48,138,660 | ||||||
|
| |||||||
114,968,766 | ||||||||
PHARMACEUTICALS — 0.81% |
| |||||||
Celltrion Inc.b | 421,756 | 17,135,440 | ||||||
Yuhan Corp. | 57,268 | 10,111,732 | ||||||
|
| |||||||
27,247,172 |
SCHEDULESOF INVESTMENTS | 49 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SOUTH KOREA CAPPED ETF
August 31, 2013
Security | Shares | Value | ||||||
RETAIL — 2.11% | ||||||||
E-Mart Co. Ltd. | 137,254 | $ | 25,471,217 | |||||
Hyundai Department Store Co. Ltd. | 105,172 | 14,069,674 | ||||||
Lotte Shopping Co. Ltd. | 72,917 | 22,366,775 | ||||||
Shinsegae Co. Ltd. | 51,046 | 9,220,056 | ||||||
|
| |||||||
71,127,722 | ||||||||
SEMICONDUCTORS — 24.82% |
| |||||||
Samsung Electronics Co. Ltd. | 612,780 | 755,175,929 | ||||||
SK Hynix Inc.a,b | 3,260,140 | 82,968,294 | ||||||
|
| |||||||
838,144,223 | ||||||||
SHIPBUILDING — 3.50% |
| |||||||
Daewoo Shipbuilding & Marine Engineering Co. Ltd.b | 646,862 | 17,278,013 | ||||||
Hyundai Heavy Industries Co. Ltd. | 264,736 | 54,256,511 | ||||||
Hyundai Mipo Dockyard Co. Ltd.b | 80,789 | 9,825,247 | ||||||
Samsung Heavy Industries Co. Ltd. | 1,037,980 | 36,935,462 | ||||||
|
| |||||||
118,295,233 | ||||||||
TELECOMMUNICATIONS — 2.15% |
| |||||||
KT Corp. | 243,592 | 7,921,869 | ||||||
LG Uplus Corp.a | 1,512,635 | 17,782,881 | ||||||
Samsung SDI Co. Ltd. | 219,951 | 33,486,527 | ||||||
SK Telecom Co. Ltd. | 67,953 | 13,559,380 | ||||||
|
| |||||||
72,750,657 | ||||||||
TRANSPORTATION — 0.68% |
| |||||||
Hyundai Glovis Co. Ltd. | 90,181 | 15,191,971 | ||||||
Hyundai Merchant Marine Co. Ltd.a,b | 472,424 | 7,894,658 | ||||||
|
| |||||||
23,086,629 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $1,827,962,083) |
| 3,305,749,027 | ||||||
PREFERRED STOCKS — 2.10% |
| |||||||
AUTO MANUFACTURERS — 1.19% |
| |||||||
Hyundai Motor Co. Ltd. | 163,949 | 15,360,295 | ||||||
Hyundai Motor Co. Ltd. Series 2 | 246,779 | 24,899,102 | ||||||
|
| |||||||
40,259,397 | ||||||||
CHEMICALS — 0.22% |
| |||||||
LG Chem Ltd. | 61,413 | 7,302,839 | ||||||
|
| |||||||
7,302,839 |
Security | Shares | Value | ||||||
SEMICONDUCTORS — 0.69% |
| |||||||
Samsung Electronics Co. Ltd. | 28,102 | $ | 23,265,383 | |||||
|
| |||||||
23,265,383 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $40,686,779) |
| 70,827,619 | ||||||
SHORT-TERM INVESTMENTS — 3.73% |
| |||||||
MONEY MARKET FUNDS — 3.73% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.15%c,d,e | 116,011,107 | 116,011,107 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
0.13%c,d,e | 7,366,620 | 7,366,620 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.00%c,d | 2,393,204 | 2,393,204 | ||||||
|
| |||||||
125,770,931 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $125,770,931) |
| 125,770,931 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $1,994,419,793) | 3,502,347,577 | |||||||
Other Assets, Less Liabilities — (3.73)% |
| (125,831,132 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 3,376,516,445 | |||||
|
|
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.
50 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 99.08% |
| |||||||
AIRLINES — 0.41% |
| |||||||
China Airlines Ltd.a | 16,515,761 | $ | 5,795,100 | |||||
EVA Airways Corp.a | 9,710,212 | 5,159,397 | ||||||
|
| |||||||
10,954,497 | ||||||||
APPAREL — 1.66% |
| |||||||
Eclat Textile Co. Ltd. | 971,000 | 8,679,928 | ||||||
Far Eastern New Century Corp. | 19,808,431 | 21,281,594 | ||||||
Pou Chen Corp. | 12,623,103 | 13,793,897 | ||||||
|
| |||||||
43,755,419 | ||||||||
AUTO MANUFACTURERS — 0.43% |
| |||||||
China Motor Co. Ltd.b | 3,884,000 | 3,348,668 | ||||||
Yulon Motor Co. Ltd.b | 4,855,362 | 7,999,109 | ||||||
|
| |||||||
11,347,777 | ||||||||
AUTO PARTS & EQUIPMENT — 1.15% |
| |||||||
Cheng Shin Rubber Industry Co. Ltd.b | 10,049,670 | 25,859,232 | ||||||
Nan Kang Rubber Tire Co. Ltd.b | 3,884,404 | 4,543,239 | ||||||
|
| |||||||
30,402,471 | ||||||||
BANKS — 0.83% |
| |||||||
Chang Hwa Commercial Bank Ltd. | 29,091,325 | 15,748,950 | ||||||
Taiwan Business Bank Ltd.a | 21,285,818 | 6,152,896 | ||||||
|
| |||||||
21,901,846 | ||||||||
BUILDING MATERIALS — 1.88% |
| |||||||
Asia Cement Corp.b | 12,875,644 | 16,092,135 | ||||||
Taiwan Cement Corp. | 21,362,504 | 28,198,263 | ||||||
Taiwan Glass Industry Corp.b | 5,826,693 | 5,344,875 | ||||||
|
| |||||||
49,635,273 | ||||||||
CHEMICALS — 7.72% |
| |||||||
China Petrochemical Development Corp.b | 10,681,540 | 4,943,753 | ||||||
Formosa Chemicals & Fibre Corp. | 20,391,610 | 52,947,521 | ||||||
Formosa Plastics Corp.b | 26,256,518 | 65,455,939 | ||||||
LCY Chemical Corp.b | 2,913,048 | 3,460,671 | ||||||
Nan Ya Plastics Corp. | 30,400,938 | 59,532,990 | ||||||
Taiwan Fertilizer Co. Ltd. | 4,855,000 | 11,146,001 | ||||||
TSRC Corp.b | 3,884,720 | 6,594,723 | ||||||
|
| |||||||
204,081,598 | ||||||||
COMPUTERS — 7.59% |
| |||||||
Acer Inc.a,b | 16,507,841 | 11,005,411 | ||||||
Advantech Co. Ltd. | 1,942,771 | 9,868,208 |
Security | Shares | Value | ||||||
ASUSTeK Computer Inc.b | 4,269,857 | $ | 34,031,008 | |||||
Chicony Electronics Co. Ltd. | 2,941,636 | 6,802,493 | ||||||
Clevo Co. | 2,913,991 | 5,686,881 | ||||||
Compal Electronics Inc. | 27,188,554 | 18,307,720 | ||||||
Foxconn Technology Co. Ltd.b | 5,098,214 | 12,999,172 | ||||||
Innolux Corp.a,b | 43,695,869 | 21,903,057 | ||||||
Inventec Corp. | 15,536,868 | 12,642,575 | ||||||
Lite-On Technology Corp. | 12,744,599 | 21,592,714 | ||||||
Quanta Computer Inc.b | 15,536,240 | 32,760,339 | ||||||
Wistron Corp.b | 14,272,024 | 12,805,689 | ||||||
|
| |||||||
200,405,267 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 12.28% |
| |||||||
China Development Financial Holding Corp.b | 87,390,508 | 23,976,209 | ||||||
CTBC Financial Holding Co. Ltd.b | 85,127,193 | 53,623,205 | ||||||
E.Sun Financial Holding Co. Ltd. | 30,876,008 | 19,552,552 | ||||||
First Financial Holding Co. Ltd.b | 43,431,210 | 25,108,521 | ||||||
Fubon Financial Holding Co. Ltd. | 42,724,515 | 58,537,490 | ||||||
Hua Nan Financial Holdings Co. Ltd. | 33,985,630 | 18,512,115 | ||||||
Mega Financial Holding Co. Ltd. | 55,347,972 | 42,263,067 | ||||||
SinoPac Financial Holdings Co. Ltd. | 42,027,293 | 18,749,331 | ||||||
Taishin Financial Holdings Co. Ltd. | 42,307,681 | 18,238,202 | ||||||
Taiwan Cooperative Financial Holding | 34,995,353 | 18,711,278 | ||||||
Yuanta Financial Holding Co. Ltd. | 54,376,453 | 27,256,823 | ||||||
|
| |||||||
324,528,793 | ||||||||
ELECTRICAL COMPONENTS & EQUIPMENT — 2.43% |
| |||||||
Delta Electronics Inc. | 11,652,180 | 52,761,797 | ||||||
Hermes Microvision Inc.b | 189,000 | 5,090,611 | ||||||
Pacific Electric Wire & Cable Co. Ltd.a,c | 197 | — | ||||||
Walsin Lihwa Corp.a | 21,362,069 | 6,317,710 | ||||||
|
| |||||||
64,170,118 | ||||||||
ELECTRONICS — 11.46% |
| |||||||
AU Optronics Corp.a,b | 55,347,830 | 21,825,073 | ||||||
Cheng Uei Precision Industry Co. Ltd. | 2,913,761 | 5,813,014 |
SCHEDULESOF INVESTMENTS | 51 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI TAIWAN ETF
August 31, 2013
Security | Shares | Value | ||||||
Hon Hai Precision Industry Co. Ltd. | 64,086,899 | $ | 173,899,520 | |||||
Kinsus Interconnect Technology Corp. | 1,942,043 | 7,106,341 | ||||||
Pegatron Corp.a,b | 9,710,037 | 15,023,633 | ||||||
Phison Electronics Corp. | 971,698 | 6,819,047 | ||||||
Radiant Opto-Electronics Corp.b | 3,000,583 | 9,525,820 | ||||||
Simplo Technology Co. Ltd. | 1,942,835 | 9,284,212 | ||||||
Synnex Technology International Corp.b | 7,768,538 | 12,240,357 | ||||||
TPK Holding Co. Ltd.b | 1,459,466 | 15,509,372 | ||||||
Tripod Technology Corp. | 2,913,061 | 5,772,679 | ||||||
Unimicron Technology Corp.b | 8,739,794 | 7,097,094 | ||||||
WPG Holdings Co. Ltd. | 8,739,744 | 10,046,858 | ||||||
Ya Hsin Industrial Co. Ltd.a,c | 6,845,461 | 2 | ||||||
Zhen Ding Technology Holding Ltd. | 1,087,072 | 2,884,376 | ||||||
|
| |||||||
302,847,398 | ||||||||
ENGINEERING & CONSTRUCTION — 0.25% |
| |||||||
CTCI Corp. | 3,884,000 | 6,502,645 | ||||||
|
| |||||||
6,502,645 | ||||||||
FOOD — 2.17% |
| |||||||
Standard Foods Corp. | 2,233,458 | 6,582,933 | ||||||
Uni-President Enterprises Co.b | 27,796,159 | 50,623,759 | ||||||
|
| |||||||
57,206,692 | ||||||||
INSURANCE — 3.46% |
| |||||||
Cathay Financial Holding Co. Ltd. | 46,603,987 | 66,033,152 | ||||||
China Life Insurance Co. Ltd. | 11,652,921 | 11,507,087 | ||||||
Shin Kong Financial Holding Co. Ltd.a | 40,782,411 | 13,764,719 | ||||||
|
| |||||||
91,304,958 | ||||||||
IRON & STEEL — 2.52% |
| |||||||
China Steel Corp.b | 72,825,958 | 61,571,513 | ||||||
Feng Hsin Iron & Steel Co. Ltd. | 2,913,050 | 5,139,903 | ||||||
|
| |||||||
66,711,416 | ||||||||
LEISURE TIME — 0.81% |
| |||||||
Giant Manufacturing Co. Ltd.b | 1,942,590 | 13,080,649 | ||||||
Merida Industry Co. Ltd.b | 1,277,000 | 8,364,116 | ||||||
|
| |||||||
21,444,765 | ||||||||
LODGING — 0.09% |
| |||||||
Formosa International Hotels Corp. | 215,622 | 2,381,429 | ||||||
|
| |||||||
2,381,429 |
Security | Shares | Value | ||||||
MACHINERY — 0.42% |
| |||||||
Teco Electric and Machinery Co. Ltd.b | 10,681,092 | $ | 11,189,902 | |||||
|
| |||||||
11,189,902 | ||||||||
MANUFACTURING — 1.08% |
| |||||||
Hiwin Technologies Corp.b | 1,000,919 | 6,555,836 | ||||||
Largan Precision Co. Ltd.b | 632,794 | 22,097,938 | ||||||
|
| |||||||
28,653,774 | ||||||||
METAL FABRICATE & HARDWARE — 0.77% |
| |||||||
Catcher Technology Co. Ltd.b | 4,274,743 | 20,356,259 | ||||||
|
| |||||||
20,356,259 | ||||||||
OIL & GAS — 0.65% |
| |||||||
Formosa Petrochemical Corp.b | 6,797,950 | 17,264,923 | ||||||
|
| |||||||
17,264,923 | ||||||||
PHARMACEUTICALS — 0.11% |
| |||||||
ScinoPharm Taiwan Ltd. | 1,009,720 | 2,827,601 | ||||||
|
| |||||||
2,827,601 | ||||||||
REAL ESTATE — 0.92% |
| |||||||
Chailease Holding Co. Ltd.b | 4,272,400 | 8,694,854 | ||||||
Farglory Land Development Co. Ltd.b | 1,942,000 | 3,510,909 | ||||||
Highwealth Construction Corp. | 1,942,200 | 4,316,072 | ||||||
Ruentex Development Co. Ltd.b | 3,884,487 | 7,671,747 | ||||||
|
| |||||||
24,193,582 | ||||||||
RETAIL — 2.11% |
| |||||||
Far Eastern Department Stores Co. Ltd.b | 5,826,090 | 5,986,809 | ||||||
Hotai Motor Co. Ltd. | 1,568,000 | 15,509,967 | ||||||
President Chain Store Corp. | 3,884,215 | 27,128,304 | ||||||
Ruentex Industries Ltd. | 2,913,550 | 7,234,098 | ||||||
|
| |||||||
55,859,178 | ||||||||
SEMICONDUCTORS — 28.82% |
| |||||||
Advanced Semiconductor Engineering Inc.b | 37,869,448 | 33,472,469 | ||||||
Epistar Corp.b | 4,855,047 | 7,949,917 | ||||||
MediaTek Inc.b | 7,768,632 | 95,276,043 | ||||||
MStar Semiconductor Inc.b | 1,183,634 | 10,798,245 | ||||||
Novatek Microelectronics Corp. Ltd.b | 3,461,544 | 14,401,652 | ||||||
Powertech Technology Inc. | 3,884,036 | 7,099,760 | ||||||
Realtek Semiconductor Corp.b | 2,970,063 | 6,590,325 | ||||||
Siliconware Precision Industries Co. Ltd.b | 18,449,214 | 20,715,253 | ||||||
Taiwan Semiconductor Manufacturing | 156,331,882 | 525,033,138 |
52 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI TAIWAN ETF
August 31, 2013
Security | Shares | Value | ||||||
Transcend Information Inc. | 971,905 | $ | 2,867,858 | |||||
United Microelectronics Corp.b | 77,680,501 | 31,929,361 | ||||||
Vanguard International | 4,870,000 | 5,264,733 | ||||||
|
| |||||||
761,398,754 | ||||||||
TELECOMMUNICATIONS — 6.20% |
| |||||||
Chunghwa Telecom Co. Ltd. | 24,275,648 | 76,742,345 | ||||||
Far EasTone Telecommunications Co. Ltd. | 9,710,259 | 24,564,040 | ||||||
HTC Corp.b | 4,569,884 | 23,899,709 | ||||||
Taiwan Mobile Co. Ltd. | 10,681,609 | 38,550,812 | ||||||
|
| |||||||
163,756,906 | ||||||||
TEXTILES — 0.17% |
| |||||||
Formosa Taffeta Co. Ltd. | 4,855,515 | 4,445,893 | ||||||
|
| |||||||
4,445,893 | ||||||||
TRANSPORTATION — 0.69% |
| |||||||
Evergreen Marine Corp. Ltd.a | 10,681,766 | 6,032,577 | ||||||
U-Ming Marine Transport Corp. | 2,913,800 | 4,488,836 | ||||||
Wan Hai Lines Ltd. | 6,797,854 | 3,680,103 | ||||||
Yang Ming Marine Transport Corp.a | 9,052,635 | 3,962,957 | ||||||
|
| |||||||
18,164,473 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $1,669,074,591) |
| 2,617,693,607 | ||||||
SHORT-TERM INVESTMENTS — 11.86% |
| |||||||
MONEY MARKET FUNDS — 11.86% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.15%d,e,f | 288,485,727 | 288,485,727 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.13%d,e,f | 18,318,633 | 18,318,633 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.00%d,e | 6,456,957 | 6,456,957 | ||||||
|
| |||||||
313,261,317 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $313,261,317) | 313,261,317 | |||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $1,982,335,908) |
| 2,930,954,924 | ||||||
Other Assets, Less Liabilities — (10.94)% |
| (288,958,006 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% | $ | 2,641,996,918 | ||||||
|
|
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, 2013 were as follows:
Number of Contracts | Issue (Expiration) | Exchange | Notional Value | Net Unrealized Appreciation (Depreciation) | ||||||||||
721 | MSCI Taiwan Index (Sept. 2013) | Singapore | $ | 20,346,620 | $ | 488,081 | ||||||||
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 53 |
Table of Contents
Schedule of Investments
iSHARES® MSCI THAILAND CAPPED ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 99.27% |
| |||||||
ADVERTISING — 0.10% |
| |||||||
VGI Global Media PCL NVDR | 183,900 | $ | 559,870 | |||||
|
| |||||||
559,870 | ||||||||
AIRLINES — 0.46% |
| |||||||
Thai Airways International PCL NVDR | 4,981,566 | 2,507,032 | ||||||
|
| |||||||
2,507,032 | ||||||||
AUTO PARTS & EQUIPMENT — 0.19% |
| |||||||
Somboon Advance Technology PCL NVDR | 2,128,025 | 1,004,846 | ||||||
|
| |||||||
1,004,846 | ||||||||
BANKS — 27.62% |
| |||||||
Bangkok Bank PCL Foreign | 3,904,400 | 21,953,911 | ||||||
Bangkok Bank PCL NVDR | 2,536,600 | 14,105,356 | ||||||
Bank of Ayudhya PCL NVDR | 12,418,300 | 14,659,689 | ||||||
Kasikornbank PCL Foreign | 5,625,600 | 27,787,214 | ||||||
Kasikornbank PCL NVDR | 3,046,400 | 15,047,456 | ||||||
Kiatnakin Bank PCL NVDR | 2,685,373 | 3,295,192 | ||||||
Krung Thai Bank PCL NVDR | 20,832,200 | 10,678,201 | ||||||
LH Financial Group PCL NVDR | 36,566,747 | 1,499,475 | ||||||
Siam Commercial Bank PCL NVDR | 8,693,900 | 36,325,864 | ||||||
Thanachart Capital PCL NVDR | 4,327,400 | 4,335,466 | ||||||
|
| |||||||
149,687,824 | ||||||||
BUILDING MATERIALS — 0.75% |
| |||||||
Dynasty Ceramic PCL NVDR | 1,287,700 | 2,140,166 | ||||||
TPI Polene PCL NVDR | 4,962,700 | 1,680,442 | ||||||
Union Mosaic Industry PCL NVDR | 707,300 | 263,672 | ||||||
|
| |||||||
4,084,280 | ||||||||
CHEMICALS — 5.53% |
| |||||||
Indorama Ventures PCL NVDR | 9,410,710 | 5,057,636 | ||||||
IRPC PCL NVDR | 65,468,500 | 6,060,768 | ||||||
PTT Global Chemical PCL NVDR | 7,321,107 | 15,692,960 | ||||||
Siam Gas and Petrochemicals PCL NVDR | 3,379,100 | 950,011 | ||||||
Sri Trang Agro-Industry PCL NVDR | 5,317,771 | 2,197,153 | ||||||
|
| |||||||
29,958,528 | ||||||||
COAL — 1.14% |
| |||||||
Banpu PCL NVDR | 716,850 | 6,146,337 | ||||||
|
| |||||||
6,146,337 |
Security | Shares | Value | ||||||
COMMERCIAL SERVICES — 0.71% |
| |||||||
Bangkok Aviation Fuel PCL NVDR | 807,000 | $ | 576,607 | |||||
Bangkok Expressway PCL NVDR | 3,076,400 | 3,249,382 | ||||||
|
| |||||||
3,825,989 | ||||||||
COMPUTERS — 0.31% |
| |||||||
Cal-Comp Electronics (Thailand) PCL NVDR | 21,632,100 | 1,693,473 | ||||||
|
| |||||||
1,693,473 | ||||||||
DISTRIBUTION & WHOLESALE — 0.27% |
| |||||||
Energy Earth PCL NVDR | 8,593,300 | 1,211,978 | ||||||
Jaymart PCL NVDR | 519,300 | 258,118 | ||||||
|
| |||||||
1,470,096 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 0.71% |
| |||||||
Krungthai Card PCL NVDR | 317,900 | 335,775 | ||||||
Thitikorn PCL NVDR | 839,800 | 237,409 | ||||||
TISCO Financial Group PCL NVDR | 2,980,410 | 3,286,876 | ||||||
|
| |||||||
3,860,060 | ||||||||
ELECTRIC — 1.25% |
| |||||||
Glow Energy PCL NVDR | 3,370,800 | 6,570,913 | ||||||
Gunkul Engineering PCL NVDR | 519,300 | 209,721 | ||||||
|
| |||||||
6,780,634 | ||||||||
ELECTRONICS — 1.59% |
| |||||||
Delta Electronics (Thailand) PCL NVDR | 3,819,144 | 5,190,667 | ||||||
Hana Microelectronics PCL NVDR | 4,612,900 | 3,038,008 | ||||||
SVI PCL NVDRa | 4,234,115 | 394,605 | ||||||
|
| |||||||
8,623,280 | ||||||||
ENERGY — ALTERNATE SOURCES — 0.11% |
| |||||||
Energy Absolute PCL NVDR | 1,701,700 | 317,185 | ||||||
SPCG PCL NVDRa | 408,600 | 258,945 | ||||||
|
| |||||||
576,130 | ||||||||
ENGINEERING & CONSTRUCTION — 3.42% |
| |||||||
Airports of Thailand PCL NVDR | 2,156,200 | 10,951,808 | ||||||
CH. Karnchang PCL NVDR | 3,857,100 | 2,252,671 | ||||||
Italian-Thai Development PCL NVDRa | 14,302,248 | 1,857,204 | ||||||
Sino-Thai Engineering & Construction | 5,497,428 | 3,142,364 | ||||||
Sriracha Construction PCL NVDR | 351,700 | 344,161 | ||||||
|
| |||||||
18,548,208 |
54 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI THAILAND CAPPED ETF
August 31, 2013
Security | Shares | Value | ||||||
ENTERTAINMENT — 0.41% |
| |||||||
GMM Grammy PCL NVDRa | 597,400 | $ | 304,361 | |||||
Major Cineplex Group PCL NVDR | 3,877,600 | 1,915,310 | ||||||
|
| |||||||
2,219,671 | ||||||||
FOOD — 3.12% |
| |||||||
Charoen Pokphand Foods PCL NVDR | 16,091,000 | 11,597,117 | ||||||
GFPT PCL NVDRa | 5,240,300 | 1,408,158 | ||||||
Khon Kaen Sugar Industry PCL NVDR | 4,752,000 | 1,860,056 | ||||||
Malee Sampran Factory PCL NVDR | 242,100 | 221,868 | ||||||
Thai Vegetable Oil PCL NVDR | 3,456,253 | 1,836,034 | ||||||
|
| |||||||
16,923,233 | ||||||||
HEALTH CARE — SERVICES — 2.57% |
| |||||||
Bangkok Chain Hospital PCL NVDR | 7,728,025 | 1,488,467 | ||||||
Bangkok Dusit Medical Services PCL NVDR | 1,470,000 | 5,890,960 | ||||||
Bumrungrad Hospital PCL NVDR | 2,431,076 | 5,890,771 | ||||||
Vibhavadi Medical Center PCL NVDR | 2,338,760 | 668,425 | ||||||
|
| |||||||
13,938,623 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 4.33% |
| |||||||
Siam Cement PCL Foreign | 1,410,100 | 17,346,989 | ||||||
Siam Cement PCL NVDR | 500,400 | 6,109,264 | ||||||
|
| |||||||
23,456,253 | ||||||||
HOME BUILDERS — 0.82% |
| |||||||
AP (Thailand) PCL NVDR | 8,604,060 | 1,288,337 | ||||||
Quality Houses PCL NVDR | 30,789,041 | 2,525,103 | ||||||
WHA Corp. PCL NVDR | 362,300 | 616,214 | ||||||
|
| |||||||
4,429,654 | ||||||||
HOUSEWARES — 0.06% |
| |||||||
Srithai Superware PCL NVDR | 556,300 | 300,703 | ||||||
|
| |||||||
300,703 | ||||||||
INSURANCE — 0.05% |
| |||||||
Thai Reinsurance PCL NVDRa | 2,000,200 | 260,977 | ||||||
|
| |||||||
260,977 | ||||||||
IRON & STEEL — 0.37% |
| |||||||
G J Steel PCL NVDRa | 637,221,600 | 1,385,694 | ||||||
G Steel PCL NVDRa | 134,896,000 | 628,593 | ||||||
|
| |||||||
2,014,287 |
Security | Shares | Value | ||||||
LODGING — 0.65% |
| |||||||
Central Plaza Hotel PCL NVDR | 4,144,000 | $ | 3,540,230 | |||||
|
| |||||||
3,540,230 | ||||||||
MEDIA — 2.12% |
| |||||||
BEC World PCL NVDR | 5,965,000 | 10,099,177 | ||||||
MCOT PCL NVDR | 1,422,700 | 1,359,056 | ||||||
|
| |||||||
11,458,233 | ||||||||
METAL FABRICATE & HARDWARE — 0.45% |
| |||||||
STP & I PCL NVDR | 4,327,500 | 2,446,738 | ||||||
|
| |||||||
2,446,738 | ||||||||
MINING — 0.04% |
| |||||||
Univentures PCL NVDR | 1,162,100 | 229,243 | ||||||
|
| |||||||
229,243 | ||||||||
OIL & GAS — 16.88% |
| |||||||
Bangchak Petroleum PCL NVDR | 2,944,700 | 2,904,449 | ||||||
Esso (Thailand) PCL NVDR | 8,752,100 | 1,685,710 | ||||||
PTT Exploration & Production PCL NVDR | 6,776,984 | 35,053,366 | ||||||
PTT PCL NVDR | 4,257,500 | 43,249,534 | ||||||
Thai Oil PCL NVDR | 5,072,900 | 8,588,787 | ||||||
|
| |||||||
91,481,846 | ||||||||
PACKAGING & CONTAINERS — 0.21% |
| |||||||
Polyplex PCL NVDR | 4,120,150 | 1,132,753 | ||||||
|
| |||||||
1,132,753 | ||||||||
REAL ESTATE — 5.51% |
| |||||||
Amata Corp. PCL NVDR | 4,525,100 | 2,389,770 | ||||||
Ananda Development PCL NVDRa | 3,472,300 | 181,220 | ||||||
Asset Corp. PCL NVDR | 14,176,037 | 1,550,160 | ||||||
Bangkok Land PCL NVDR | 59,643,400 | 2,408,711 | ||||||
Central Pattana PCL NVDR | 6,644,100 | 7,636,897 | ||||||
Golden Land Property Development | 1,812,400 | 346,265 | ||||||
Hemaraj Land and Development PCL NVDR | 34,577,800 | 2,986,216 | ||||||
LPN Development PCL NVDR | 4,080,147 | 2,420,963 | ||||||
Natural Park PCL NVDRa | 128,144,000 | 278,661 | ||||||
Pruksa Real Estate PCL NVDR | 4,913,980 | 2,396,691 | ||||||
Rojana Industrial Park PCL NVDR | 1,424,200 | 345,100 | ||||||
Sansiri PCL NVDR | 25,191,728 | 1,612,145 | ||||||
Siam Future Development PCL NVDR | 6,459,087 | 1,183,865 | ||||||
Supalai PCL NVDR | 4,656,000 | 1,836,943 |
SCHEDULESOF INVESTMENTS | 55 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI THAILAND CAPPED ETF
August 31, 2013
Security | Shares | Value | ||||||
Thai Factory Development PCL NVDR | 930,800 | $ | 238,555 | |||||
Ticon Industrial Connection PCL NVDR | 4,238,293 | 2,027,639 | ||||||
|
| |||||||
29,839,801 | ||||||||
RETAIL — 6.40% |
| |||||||
CP All PCL NVDR | 22,818,000 | 23,214,958 | ||||||
Home Product Center PCL NVDR | 11,112,800 | 3,866,523 | ||||||
Minor International PCL NVDR | 7,258,100 | 4,825,205 | ||||||
OfficeMate PCL NVDR | 186,500 | 185,399 | ||||||
Oishi Group PCL NVDR | 96,100 | 322,423 | ||||||
Siam Global House PCL NVDR | 4,910,818 | 2,273,103 | ||||||
|
| |||||||
34,687,611 | ||||||||
TELECOMMUNICATIONS — 9.66% |
| |||||||
Advanced Information Service PCL NVDR | 5,138,819 | 38,313,655 | ||||||
Jasmine International PCL NVDR | 23,480,968 | 5,288,506 | ||||||
Loxley PCL NVDR | 2,843,605 | 369,254 | ||||||
Samart Corp. PCL NVDR | 3,949,237 | 1,815,741 | ||||||
Samart Telcoms PCL NVDR | 509,400 | 221,547 | ||||||
Thaicom PCL NVDR | 1,592,400 | 1,484,063 | ||||||
True Corp. PCL NVDRa | 24,046,300 | 4,855,575 | ||||||
|
| |||||||
52,348,341 | ||||||||
TRANSPORTATION — 0.74% |
| |||||||
Bangkok Metro PCL NVDRa | 9,771,000 | 349,073 | ||||||
Precious Shipping PCL NVDR | 3,148,900 | 1,447,770 | ||||||
Thoresen Thai Agencies PCL NVDRa | 4,864,382 | 2,206,274 | ||||||
|
| |||||||
4,003,117 | ||||||||
WATER — 0.72% |
| |||||||
Eastern Water Resources and Management PCL NVDR | 977,300 | 391,649 | ||||||
Thai Tap Water Supply PCL NVDR | 11,555,266 | 3,517,912 | ||||||
|
| |||||||
3,909,561 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $658,287,063) |
| 537,947,462 | ||||||
RIGHTS — 0.01% |
| |||||||
ENTERTAINMENT — 0.01% |
| |||||||
GMM Grammy PCL NVDRa | 142,420 | 28,316 | ||||||
|
| |||||||
28,316 | ||||||||
|
| |||||||
TOTAL RIGHTS |
| |||||||
(Cost: $0) |
| 28,316 |
Security | Shares | Value | ||||||
WARRANTS — 0.05% |
| |||||||
IRON & STEEL — 0.00% |
| |||||||
G J Steel PCL NVDR | ||||||||
(Expires 02/07/20)a | 30 | $ | — | |||||
|
| |||||||
— | ||||||||
REAL ESTATE — 0.05% |
| |||||||
Bangkok Land PCL NVDR | ||||||||
(Expires 07/02/18)a | 28,671,212 | 258,300 | ||||||
|
| |||||||
258,300 | ||||||||
TELECOMMUNICATIONS — 0.00% |
| |||||||
Loxley PCL NVDR | ||||||||
(Expires 04/21/16)a | 50,876 | — | ||||||
|
| |||||||
— | ||||||||
|
| |||||||
TOTAL WARRANTS |
| |||||||
(Cost: $0) |
| 258,300 | ||||||
SHORT-TERM INVESTMENTS — 0.27% |
| |||||||
MONEY MARKET FUNDS — 0.27% |
| |||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.00%b,c | 1,460,588 | 1,460,588 | ||||||
|
| |||||||
1,460,588 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $1,460,588) |
| 1,460,588 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $659,747,651) | 539,694,666 | |||||||
Other Assets, Less Liabilities — 0.40% |
| 2,178,128 | ||||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 541,872,794 | |||||
|
|
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.
56 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Assets and Liabilities
iSHARES®, INC.
August 31, 2013
iShares MSCI Australia ETF | iShares MSCI Hong Kong ETF | iShares MSCI Japan Small-Cap ETF | ||||||||||
ASSETS | ||||||||||||
Investments, at cost: | ||||||||||||
Unaffiliated | $ | 1,950,570,242 | $ | 2,137,789,797 | $ | 88,195,622 | ||||||
Affiliated (Note 2) | 4,108,022 | 87,012,488 | 1,301,634 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments | $ | 1,954,678,264 | $ | 2,224,802,285 | $ | 89,497,256 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 1,894,809,486 | $ | 2,115,343,318 | $ | 88,752,351 | ||||||
Affiliated (Note 2) | 4,108,022 | 87,012,488 | 1,301,634 | |||||||||
|
|
|
|
|
| |||||||
Total fair value of investments | 1,898,917,508 | 2,202,355,806 | 90,053,985 | |||||||||
Foreign currency, at valueb | 5,705,737 | 3,801,410 | 150,411 | |||||||||
Foreign currency pledged to broker, at valueb | 360,972 | 1,574,429 | — | |||||||||
Receivables: | ||||||||||||
Investment securities sold | 1,841,586 | 13,930,420 | 48,106 | |||||||||
Dividends and interest | 15,047,703 | 5,765,766 | 140,359 | |||||||||
Capital shares sold | 269,682 | — | — | |||||||||
Futures variation margin | 706,374 | — | — | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 1,922,849,562 | 2,227,427,831 | 90,392,861 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 2,065,184 | 13,584,368 | 71,511 | |||||||||
Collateral for securities on loan (Note 5) | 3,119,753 | 86,669,146 | 1,294,774 | |||||||||
Capital shares redeemed | — | 1,264,427 | — | |||||||||
Futures variation margin | — | 106,978 | — | |||||||||
Investment advisory fees (Note 2) | 815,705 | 946,493 | 38,889 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 6,000,642 | 102,571,412 | 1,405,174 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 1,916,848,920 | $ | 2,124,856,419 | $ | 88,987,687 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 2,195,211,185 | $ | 2,547,462,077 | $ | 91,292,746 | ||||||
Undistributed (distributions in excess of) net investment income | (5,060,683 | ) | 4,875,501 | (123,338 | ) | |||||||
Accumulated net realized loss | (217,814,260 | ) | (404,929,521 | ) | (2,737,044 | ) | ||||||
Net unrealized appreciation (depreciation) | (55,487,322 | ) | (22,551,638 | ) | 555,323 | |||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 1,916,848,920 | $ | 2,124,856,419 | $ | 88,987,687 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingc | 81,200,000 | 112,350,000 | 1,800,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 23.61 | $ | 18.91 | $ | 49.44 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $2,923,238, $82,969,840, and $1,231,306, respectively. See Note 5. |
b | Cost of foreign currency including currency pledged to broker, if any: $6,177,834, $5,374,683, and $151,140, respectively. |
c | $0.001 par value, number of shares authorized: 627.8 million, 375 million and 500 million, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 57 |
Table of Contents
Statements of Assets and Liabilities (Continued)
iSHARES®, INC.
August 31, 2013
iShares MSCI Malaysia ETF | iShares MSCI Pacific ex Japan ETF | iShares MSCI Singapore ETF | ||||||||||
ASSETS | ||||||||||||
Investments, at cost: | ||||||||||||
Unaffiliated | $ | 386,427,264 | $ | 2,802,242,015 | $ | 1,147,850,119 | ||||||
Affiliated (Note 2) | 70,542 | 76,078,588 | 91,772,596 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments | $ | 386,497,806 | $ | 2,878,320,603 | $ | 1,239,622,715 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 807,299,058 | $ | 2,984,024,328 | $ | 1,127,743,169 | ||||||
Affiliated (Note 2) | 70,542 | 76,078,588 | 91,772,596 | |||||||||
|
|
|
|
|
| |||||||
Total fair value of investments | 807,369,600 | 3,060,102,916 | 1,219,515,765 | |||||||||
Foreign currency, at valueb | 1,394,273 | 6,634,739 | 8,734,878 | |||||||||
Foreign currency pledged to broker, at valueb | — | — | 638,881 | |||||||||
Receivables: | ||||||||||||
Investment securities sold | 60,796,244 | 5,022,433 | 2,194,543 | |||||||||
Dividends and interest | 843,317 | 19,611,479 | 7,045,070 | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 870,403,434 | 3,091,371,567 | 1,238,129,137 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 7,346,706 | 5,228,798 | 7,404,717 | |||||||||
Collateral for securities on loan (Note 5) | — | 75,872,149 | 91,405,307 | |||||||||
Capital shares redeemed | 53,529,220 | 886,217 | 3,220,686 | |||||||||
Futures variation margin | — | — | 85,780 | |||||||||
Investment advisory fees (Note 2) | 389,071 | 1,316,917 | 535,255 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 61,264,997 | 83,304,081 | 102,651,745 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 809,138,437 | $ | 3,008,067,486 | $ | 1,135,477,392 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 449,701,125 | $ | 3,317,036,417 | $ | 1,375,991,316 | ||||||
Undistributed (distributions in excess of) net investment income | 2,319,942 | 1,949,874 | (1,582,316 | ) | ||||||||
Accumulated net realized loss | (63,825,117 | ) | (492,358,206 | ) | (218,761,331 | ) | ||||||
Net unrealized appreciation (depreciation) | 420,942,487 | 181,439,401 | (20,170,277 | ) | ||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 809,138,437 | $ | 3,008,067,486 | $ | 1,135,477,392 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingc | 55,425,000 | 67,500,000 | 90,900,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 14.60 | $ | 44.56 | $ | 12.49 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $ —, $71,538,672 and $86,275,918, respectively. See Note 5. |
b | Cost of foreign currency including currency pledged to broker, if any: $1,394,273, $6,647,159 and $9,343,992, respectively. |
c | $0.001 par value, number of shares authorized: 300 million, 1 billion and 300 million, respectively. |
See notes to financial statements.
58 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Assets and Liabilities (Continued)
iSHARES®, INC.
August 31, 2013
iShares MSCI South Korea Capped ETF | iShares MSCI Taiwan ETF | iShares MSCI Thailand Capped ETF | ||||||||||
ASSETS | ||||||||||||
Investments, at cost: | ||||||||||||
Unaffiliated | $ | 1,868,648,862 | $ | 1,669,074,591 | $ | 658,287,063 | ||||||
Affiliated (Note 2) | 125,770,931 | 313,261,317 | 1,460,588 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments | $ | 1,994,419,793 | $ | 1,982,335,908 | $ | 659,747,651 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 3,376,576,646 | $ | 2,617,693,607 | $ | 538,234,078 | ||||||
Affiliated (Note 2) | 125,770,931 | 313,261,317 | 1,460,588 | |||||||||
|
|
|
|
|
| |||||||
Total fair value of investments | 3,502,347,577 | 2,930,954,924 | 539,694,666 | |||||||||
Foreign currency, at valueb | 7,261 | 2,157,495 | 139,476 | |||||||||
Cash | — | 11,880,657 | — | |||||||||
Cash pledged to broker | — | 1,659,000 | — | |||||||||
Receivables: | ||||||||||||
Investment securities sold | 72,086,673 | 3,723,453 | 13,378,177 | |||||||||
Dividends and interest | 177,765 | 16,576,289 | 2,417,107 | |||||||||
Futures variation margin | — | 313,925 | — | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 3,574,619,276 | 2,967,265,743 | 555,629,426 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 72,980,884 | 15,095,496 | 13,121,102 | |||||||||
Collateral for securities on loan (Note 5) | 123,377,727 | 306,804,360 | — | |||||||||
Capital shares redeemed | — | — | 264,960 | |||||||||
Foreign taxes (Note 1) | 8,701 | 1,998,750 | — | |||||||||
Investment advisory fees (Note 2) | 1,735,519 | 1,370,219 | 370,570 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 198,102,831 | 325,268,825 | 13,756,632 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 3,376,516,445 | $ | 2,641,996,918 | $ | 541,872,794 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 2,753,438,081 | $ | 2,734,862,185 | $ | 681,215,689 | ||||||
Undistributed (distributions in excess of) net investment income | (16,666,480 | ) | 43,522,689 | 2,739,321 | ||||||||
Accumulated net realized loss | (868,181,906 | ) | (1,085,505,727 | ) | (21,984,785 | ) | ||||||
Net unrealized appreciation (depreciation) | 1,507,926,750 | 949,117,771 | (120,097,431 | ) | ||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 3,376,516,445 | $ | 2,641,996,918 | $ | 541,872,794 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingc | 58,550,000 | 194,200,000 | 8,000,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 57.67 | $ | 13.60 | $ | 67.73 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $116,912,746, $294,601,074 and $ —, respectively. See Note 5. |
b | Cost of foreign currency: $7,220, $2,157,495 and $139,476, respectively. |
c | $0.001 par value, number of shares authorized: 200 million, 900 million and 200 million, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 59 |
Table of Contents
Statements of Operations
iSHARES®, INC.
Year ended August 31, 2013
iShares MSCI Australia ETF | iShares MSCI Hong Kong ETF | iShares MSCI Japan Small-Cap ETF | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliateda | $ | 106,848,492 | $ | 85,270,291 | $ | 1,125,361 | ||||||
Interest — unaffiliated | 52,809 | — | �� | — | ||||||||
Interest — affiliated (Note 2) | 1,746 | 1,763 | 18 | |||||||||
Securities lending income — affiliated (Note 2) | 131,996 | 572,222 | 22,320 | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 107,035,043 | 85,844,276 | 1,147,699 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 11,916,310 | 14,579,558 | 311,214 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 11,916,310 | 14,579,558 | 311,214 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 95,118,733 | 71,264,718 | 836,485 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | (58,889,768 | ) | (62,875,125 | ) | (771,525 | ) | ||||||
In-kind redemptions — unaffiliated | 128,136,220 | 239,635,245 | 603,169 | |||||||||
Futures contracts | 825,222 | (388,934 | ) | — | ||||||||
Foreign currency transactions | (2,135,580 | ) | (1,779 | ) | (59,380 | ) | ||||||
|
|
|
|
|
| |||||||
Net realized gain (loss) | 67,936,094 | 176,369,407 | (227,736 | ) | ||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments | 12,652,002 | 55,943,763 | 6,087,681 | |||||||||
Futures contracts | 756,393 | (83,603 | ) | — | ||||||||
Translation of assets and liabilities in foreign currencies | (210,114 | ) | 1,548 | (2,476 | ) | |||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | 13,198,281 | 55,861,708 | 6,085,205 | |||||||||
|
|
|
|
|
| |||||||
Net realized and unrealized gain | 81,134,375 | 232,231,115 | 5,857,469 | |||||||||
|
|
|
|
|
| |||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 176,253,108 | $ | 303,495,833 | $ | 6,693,954 | ||||||
|
|
|
|
|
|
a | Net of foreign withholding tax of $1,184,702, $ — and $84,853, respectively. |
See notes to financial statements.
60 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Operations (Continued)
iSHARES®, INC.
Year ended August 31, 2013
iShares MSCI Malaysia ETF | iShares MSCI Pacific ex Japan ETF | iShares MSCI Singapore ETF | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliateda | $ | 30,872,782 | $ | 154,020,114 | $ | 54,733,307 | ||||||
Interest — affiliated (Note 2) | 247 | 2,228 | 1,143 | |||||||||
Securities lending income — affiliated (Note 2) | — | 901,307 | 1,719,897 | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 30,873,029 | 154,923,649 | 56,454,347 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 4,872,823 | 18,800,902 | 7,659,064 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 4,872,823 | 18,800,902 | 7,659,064 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 26,000,206 | 136,122,747 | 48,795,283 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | 17,786,128 | (72,005,760 | ) | (5,000,766 | ) | |||||||
In-kind redemptions — unaffiliated | — | 384,327,207 | 97,022,438 | |||||||||
Futures contracts | — | — | (665,749 | ) | ||||||||
Foreign currency transactions | (236,248 | ) | (1,908,314 | ) | (435,953 | ) | ||||||
|
|
|
|
|
| |||||||
Net realized gain | 17,549,880 | 310,413,133 | 90,919,970 | |||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments | (15,935,166 | ) | (214,430,678 | ) | (131,928,743 | ) | ||||||
Futures contracts | — | — | (41,881 | ) | ||||||||
Translation of assets and liabilities in foreign currencies | 83,688 | (175,629 | ) | (4,424 | ) | |||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | (15,851,478 | ) | (214,606,307 | ) | (131,975,048 | ) | ||||||
|
|
|
|
|
| |||||||
Net realized and unrealized gain (loss) | 1,698,402 | 95,806,826 | (41,055,078 | ) | ||||||||
|
|
|
|
|
| |||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 27,698,608 | $ | 231,929,573 | $ | 7,740,205 | ||||||
|
|
|
|
|
|
a | Net of foreign withholding tax of $1,645,688, $1,615,306 and $347,296, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 61 |
Table of Contents
Statements of Operations (Continued)
iSHARES®, INC.
Year ended August 31, 2013
iShares MSCI South Korea Capped ETF | iShares MSCI Taiwan ETF | iShares MSCI Thailand Capped ETF | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliateda | $ | 28,740,087 | $ | 56,113,226 | $ | 23,645,785 | ||||||
Interest — unaffiliated | 1,604 | 639 | — | |||||||||
Interest — affiliated (Note 2) | 2,465 | 2,990 | 745 | |||||||||
Securities lending income — affiliated (Note 2) | 2,955,023 | 6,780,406 | b | — | ||||||||
|
|
|
|
|
| |||||||
Total investment income | 31,699,179 | 62,897,261 | 23,646,530 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 19,187,742 | 15,871,664 | 5,084,063 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 19,187,742 | 15,871,664 | 5,084,063 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 12,511,437 | 47,025,597 | 18,562,467 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | 2,440,522 | (46,826,059 | ) | (16,621,806 | ) | |||||||
In-kind redemptions — unaffiliated | — | — | 110,138,246 | |||||||||
Futures contracts | — | 247,654 | — | |||||||||
Foreign currency transactions | (1,747,174 | ) | (221,891 | ) | (224,837 | ) | ||||||
|
|
|
|
|
| |||||||
Net realized gain (loss) | 693,348 | (46,800,296 | ) | 93,291,603 | ||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments | 69,985,419 | 229,810,746 | (137,646,807 | ) | ||||||||
Futures contracts | — | 654,075 | — | |||||||||
Translation of assets and liabilities in foreign currencies | 13,334 | 3,556 | (46,950 | ) | ||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | 69,998,753 | 230,468,377 | (137,693,757 | ) | ||||||||
|
|
|
|
|
| |||||||
Net realized and unrealized gain (loss) | 70,692,101 | 183,668,081 | (44,402,154 | ) | ||||||||
|
|
|
|
|
| |||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | 83,203,538 | $ | 230,693,678 | $ | (25,839,687 | ) | |||||
|
|
|
|
|
|
a | Net of foreign withholding tax of $6,246,411, $14,795,442 and $2,642,925, respectively. |
b | Net of foreign tax paid of $1,558,714. |
See notes to financial statements.
62 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets
iSHARES®, INC.
iShares MSCI Australia ETF | iShares MSCI Hong Kong ETF | |||||||||||||||
Year ended August 31, 2013 | Year ended August 31, 2012 | Year ended August 31, 2013 | Year ended August 31, 2012 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 95,118,733 | $ | 121,314,624 | $ | 71,264,718 | $ | 57,045,268 | ||||||||
Net realized gain (loss) | 67,936,094 | (146,353 | ) | 176,369,407 | (96,172,080 | ) | ||||||||||
Net change in unrealized appreciation/depreciation | 13,198,281 | (124,678,562 | ) | 55,861,708 | 77,291,953 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 176,253,108 | (3,510,291 | ) | 303,495,833 | 38,165,141 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (130,032,525 | ) | (127,985,295 | ) | (71,372,977 | ) | (55,827,349 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (130,032,525 | ) | (127,985,295 | ) | (71,372,977 | ) | (55,827,349 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 352,326,670 | 379,920,871 | 1,549,740,139 | 1,187,272,846 | ||||||||||||
Cost of shares redeemed | (975,397,089 | ) | (845,151,157 | ) | (1,522,980,733 | ) | (911,618,933 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | (623,070,419 | ) | (465,230,286 | ) | 26,759,406 | 275,653,913 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | (576,849,836 | ) | (596,725,872 | ) | 258,882,262 | 257,991,705 | ||||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 2,493,698,756 | 3,090,424,628 | 1,865,974,157 | 1,607,982,452 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year | $ | 1,916,848,920 | $ | 2,493,698,756 | $ | 2,124,856,419 | $ | 1,865,974,157 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of year | $ | (5,060,683 | ) | $ | 15,190,680 | $ | 4,875,501 | $ | 4,985,539 | |||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 14,000,000 | 16,400,000 | 81,300,000 | 73,350,000 | ||||||||||||
Shares redeemed | (39,400,000 | ) | (37,600,000 | ) | (79,125,000 | ) | (54,600,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | (25,400,000 | ) | (21,200,000 | ) | 2,175,000 | 18,750,000 | ||||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
FINANCIAL STATEMENTS | 63 |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Japan Small-Cap ETF | iShares MSCI Malaysia ETF | |||||||||||||||
Year ended August 31, 2013 | Year ended August 31, 2012 | Year ended August 31, 2013 | Year ended August 31, 2012 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 836,485 | $ | 1,024,054 | $ | 26,000,206 | $ | 24,520,962 | ||||||||
Net realized gain (loss) | (227,736 | ) | 2,654,100 | 17,549,880 | (3,123,398 | ) | ||||||||||
Net change in unrealized appreciation/depreciation | 6,085,205 | (8,078,528 | ) | (15,851,478 | ) | 42,688,241 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 6,693,954 | (4,400,374 | ) | 27,698,608 | 64,085,805 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (1,107,270 | ) | (1,368,220 | ) | (23,444,016 | ) | (32,637,576 | ) | ||||||||
Return of capital | — | — | — | (1,278,099 | ) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (1,107,270 | ) | (1,368,220 | ) | (23,444,016 | ) | (33,915,675 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 49,278,602 | 4,249,057 | 93,307,043 | 102,342,503 | ||||||||||||
Cost of shares redeemed | (8,694,664 | ) | (3,050,195 | ) | (225,115,455 | ) | (174,222,658 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | 40,583,938 | (25,801,138 | ) | (131,808,412 | ) | (71,880,155 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | 46,170,622 | (31,569,732 | ) | (127,553,820 | ) | (41,710,025 | ) | |||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 42,817,065 | 74,386,797 | 936,692,257 | 978,402,282 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year | $ | 88,987,687 | $ | 42,817,065 | $ | 809,138,437 | $ | 936,692,257 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of year | $ | (123,338 | ) | $ | 41,015 | $ | 2,319,942 | $ | — | |||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 1,000,000 | 100,000 | 6,150,000 | 7,275,000 | ||||||||||||
Shares redeemed | (200,000 | ) | (700,000 | ) | (15,225,000 | ) | (13,050,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | 800,000 | (600,000 | ) | (9,075,000 | ) | (5,775,000 | ) | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
64 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Pacific ex Japan ETF | iShares MSCI Singapore ETF | |||||||||||||||
Year ended August 31, 2013 | Year ended August 31, 2012 | Year ended August 31, 2013 | Year ended August 31, 2012 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 136,122,747 | $ | 134,564,204 | $ | 48,795,283 | $ | 48,620,016 | ||||||||
Net realized gain | 310,413,133 | 19,498,306 | 90,919,970 | 5,615,906 | ||||||||||||
Net change in unrealized appreciation/depreciation | (214,606,307 | ) | (127,950,024 | ) | (131,975,048 | ) | (25,799,426 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 231,929,573 | 26,112,486 | 7,740,205 | 28,436,496 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (156,573,693 | ) | (141,521,654 | ) | (63,036,613 | ) | (55,248,494 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (156,573,693 | ) | (141,521,654 | ) | (63,036,613 | ) | (55,248,494 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 971,290,034 | 77,411,532 | 206,627,419 | 109,538,489 | ||||||||||||
Cost of shares redeemed | (1,227,160,297 | ) | (322,287,900 | ) | (528,540,126 | ) | (283,239,248 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease in net assets from capital share transactions | (255,870,263 | ) | (244,876,368 | ) | (321,912,707 | ) | (173,700,759 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
DECREASE IN NET ASSETS | (180,514,383 | ) | (360,285,536 | ) | (377,209,115 | ) | (200,512,757 | ) | ||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 3,188,581,869 | 3,548,867,405 | 1,512,686,507 | 1,713,199,264 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year | $ | 3,008,067,486 | $ | 3,188,581,869 | $ | 1,135,477,392 | $ | 1,512,686,507 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of year | $ | 1,949,874 | $ | 8,784,423 | $ | (1,582,316 | ) | $ | 4,917,504 | |||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 20,400,000 | 1,800,000 | 15,200,000 | 8,600,000 | ||||||||||||
Shares redeemed | (26,700,000 | ) | (7,800,000 | ) | (39,800,000 | ) | (24,400,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease in shares outstanding | (6,300,000 | ) | (6,000,000 | ) | (24,600,000 | ) | (15,800,000 | ) | ||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
FINANCIAL STATEMENTS | 65 |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI South Korea Capped ETF | iShares MSCI Taiwan ETF | |||||||||||||||
Year ended August 31, 2013 | Year ended August 31, 2012 | Year ended August 31, 2013 | Year ended August 31, 2012 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 12,511,437 | $ | 13,344,165 | $ | 47,025,597 | $ | 52,569,798 | ||||||||
Net realized gain (loss) | 693,348 | 293,479,714 | (46,800,296 | ) | 9,808,034 | |||||||||||
Net change in unrealized appreciation/depreciation | 69,998,753 | (395,833,750 | ) | 230,468,377 | (245,000,348 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 83,203,538 | (89,009,871 | ) | 230,693,678 | (182,622,516 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (18,847,855 | ) | (21,597,221 | ) | (53,961,288 | ) | (88,700,282 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (18,847,855 | ) | (21,597,221 | ) | (53,961,288 | ) | (88,700,282 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 699,217,627 | 128,924,534 | 608,307,506 | 381,912,612 | ||||||||||||
Cost of shares redeemed | (56,608,080 | ) | (1,419,990,818 | ) | (390,170,968 | ) | (720,973,706 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | 642,609,547 | (1,291,066,284 | ) | 218,136,538 | (339,061,094 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | 706,965,230 | (1,401,673,376 | ) | 394,868,928 | (610,383,892 | ) | ||||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 2,669,551,215 | 4,071,224,591 | 2,247,127,990 | 2,857,511,882 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year | $ | 3,376,516,445 | $ | 2,669,551,215 | $ | 2,641,996,918 | $ | 2,247,127,990 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of year | $ | (16,666,480 | ) | $ | (8,724,136 | ) | $ | 43,522,689 | $ | 49,800,550 | ||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 11,900,000 | 2,350,000 | 45,000,000 | 30,600,000 | ||||||||||||
Shares redeemed | (1,050,000 | ) | (26,400,000 | ) | (29,400,000 | ) | (59,400,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | 10,850,000 | (24,050,000 | ) | 15,600,000 | (28,800,000 | ) | ||||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
66 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Thailand Capped ETF | ||||||||
Year ended August 31, 2013 | Year ended August 31, 2012 | |||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||
OPERATIONS: | ||||||||
Net investment income | $ | 18,562,467 | $ | 15,574,422 | ||||
Net realized gain | 93,291,603 | 58,835,767 | ||||||
Net change in unrealized appreciation/depreciation | (137,693,757 | ) | (54,329,252 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | (25,839,687 | ) | 20,080,937 | |||||
|
|
|
| |||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||
From net investment income | (18,144,635 | ) | (15,932,327 | ) | ||||
|
|
|
| |||||
Total distributions to shareholders | (18,144,635 | ) | (15,932,327 | ) | ||||
|
|
|
| |||||
CAPITAL SHARE TRANSACTIONS: | ||||||||
Proceeds from shares sold | 476,258,075 | 364,124,479 | ||||||
Cost of shares redeemed | (486,368,459 | ) | (405,145,323 | ) | ||||
|
|
|
| |||||
Net decrease in net assets from capital share transactions | (10,110,384 | ) | (41,020,844 | ) | ||||
|
|
|
| |||||
DECREASE IN NET ASSETS | (54,094,706 | ) | (36,872,234 | ) | ||||
NET ASSETS | ||||||||
Beginning of year | 595,967,500 | 632,839,734 | ||||||
|
|
|
| |||||
End of year | $ | 541,872,794 | $ | 595,967,500 | ||||
|
|
|
| |||||
Undistributed net investment income included in net assets at end of year | $ | 2,739,321 | $ | 2,546,326 | ||||
|
|
|
| |||||
SHARES ISSUED AND REDEEMED | ||||||||
Shares sold | 5,700,000 | 5,250,000 | ||||||
Shares redeemed | (6,150,000 | ) | (6,350,000 | ) | ||||
|
|
|
| |||||
Net decrease in shares outstanding | (450,000 | ) | (1,100,000 | ) | ||||
|
|
|
|
See notes to financial statements.
FINANCIAL STATEMENTS | 67 |
Table of Contents
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Australia ETF | ||||||||||||||||||||
Year ended Aug. 31, 2013 | Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | ||||||||||||||||
Net asset value, beginning of year | $ | 23.39 | $ | 24.18 | $ | 20.92 | $ | 20.33 | $ | 23.96 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 1.02 | 1.04 | 0.99 | 0.72 | 0.78 | |||||||||||||||
Net realized and unrealized gain (loss)b | 0.64 | (0.72 | ) | 3.33 | 0.69 | (3.47 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 1.66 | 0.32 | 4.32 | 1.41 | (2.69 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (1.44 | ) | (1.11 | ) | (1.06 | ) | (0.82 | ) | (0.94 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (1.44 | ) | (1.11 | ) | (1.06 | ) | (0.82 | ) | (0.94 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 23.61 | $ | 23.39 | $ | 24.18 | $ | 20.92 | $ | 20.33 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 7.06 | % | 1.84 | % | 20.54 | % | 6.86 | % | (8.91 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 1,916,849 | $ | 2,493,699 | $ | 3,090,425 | $ | 2,196,817 | $ | 1,593,676 | ||||||||||
Ratio of expenses to average net assets | 0.51 | % | 0.53 | % | 0.52 | % | 0.53 | % | 0.55 | % | ||||||||||
Ratio of net investment income to average net assets | 4.05 | % | 4.61 | % | 3.95 | % | 3.24 | % | 4.92 | % | ||||||||||
Portfolio turnover ratec | 6 | % | 9 | % | 9 | % | 8 | % | 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.
68 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Hong Kong ETF | ||||||||||||||||||||
Year ended Aug. 31, 2013 | Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | ||||||||||||||||
Net asset value, beginning of year | $ | 16.94 | $ | 17.59 | $ | 16.02 | $ | 14.39 | $ | 15.87 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.48 | 0.54 | 0.42 | 0.42 | 0.52 | |||||||||||||||
Net realized and unrealized gain (loss)b | 2.05 | (0.65 | ) | 1.56 | 1.69 | (1.46 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 2.53 | (0.11 | ) | 1.98 | 2.11 | (0.94 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.56 | ) | (0.54 | ) | (0.41 | ) | (0.48 | ) | (0.54 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.56 | ) | (0.54 | ) | (0.41 | ) | (0.48 | ) | (0.54 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 18.91 | $ | 16.94 | $ | 17.59 | $ | 16.02 | $ | 14.39 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 15.04 | % | (0.33 | )% | 12.27 | % | 14.85 | % | (4.77 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 2,124,856 | $ | 1,865,974 | $ | 1,607,982 | $ | 1,976,317 | $ | 1,951,777 | ||||||||||
Ratio of expenses to average net assets | 0.51 | % | 0.53 | % | 0.52 | % | 0.53 | % | 0.55 | % | ||||||||||
Ratio of net investment income to average net assets | 2.47 | % | 3.26 | % | 2.25 | % | 2.67 | % | 4.29 | % | ||||||||||
Portfolio turnover ratec | 12 | % | 11 | % | 15 | % | 5 | % | 9 | % |
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 | 69 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Japan Small-Cap ETF | ||||||||||||||||||||
Year ended Aug. 31, 2013 | Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | ||||||||||||||||
Net asset value, beginning of year | $ | 42.82 | $ | 46.49 | $ | 40.74 | $ | 44.45 | $ | 43.24 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.65 | 0.82 | 0.78 | 0.61 | 0.60 | |||||||||||||||
Net realized and unrealized gain (loss)b | 6.97 | (3.25 | ) | 5.87 | (3.39 | ) | 1.29 | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 7.62 | (2.43 | ) | 6.65 | (2.78 | ) | 1.89 | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (1.00 | ) | (1.24 | ) | (0.90 | ) | (0.93 | ) | (0.68 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (1.00 | ) | (1.24 | ) | (0.90 | ) | (0.93 | ) | (0.68 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 49.44 | $ | 42.82 | $ | 46.49 | $ | 40.74 | $ | 44.45 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 18.07 | % | (5.18 | )% | 16.38 | % | (6.25 | )% | 4.62 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 88,988 | $ | 42,817 | $ | 74,387 | $ | 36,664 | $ | 35,556 | ||||||||||
Ratio of expenses to average net assets | 0.50 | % | 0.53 | % | 0.51 | % | 0.53 | % | 0.56 | % | ||||||||||
Ratio of net investment income to average net assets | 1.36 | % | 1.84 | % | 1.72 | % | 1.46 | % | 1.59 | % | ||||||||||
Portfolio turnover ratec | 17 | % | 7 | % | 10 | % | 7 | % | 7 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
70 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Malaysia ETF | ||||||||||||||||||||
Year ended Aug. 31, 2013 | Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | ||||||||||||||||
Net asset value, beginning of year | $ | 14.52 | $ | 13.92 | $ | 12.98 | $ | 9.79 | $ | 9.39 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.41 | 0.38 | 0.41 | 0.24 | 0.28 | |||||||||||||||
Net realized and unrealized gainb | 0.04 | 0.76 | 0.92 | 3.20 | 0.40 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 0.45 | 1.14 | 1.33 | 3.44 | 0.68 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.37 | ) | (0.52 | ) | (0.39 | ) | (0.25 | ) | (0.28 | ) | ||||||||||
Return of capital | — | (0.02 | ) | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.37 | ) | (0.54 | ) | (0.39 | ) | (0.25 | ) | (0.28 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 14.60 | $ | 14.52 | $ | 13.92 | $ | 12.98 | $ | 9.79 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 3.02 | % | 8.61 | % | 10.19 | % | 35.76 | % | 8.00 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 809,138 | $ | 936,692 | $ | 978,402 | $ | 794,142 | $ | 513,000 | ||||||||||
Ratio of expenses to average net assets | 0.51 | % | 0.53 | % | 0.52 | % | 0.53 | % | 0.56 | % | ||||||||||
Ratio of net investment income to average net assets | 2.71 | % | 2.73 | % | 2.84 | % | 2.17 | % | 3.45 | % | ||||||||||
Portfolio turnover ratec | 17 | % | 24 | % | 49 | % | 29 | % | 52 | % |
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 rates for the years ended August 31, 2013, August 31, 2012, August 31, 2011, August 31, 2010, and August 31, 2009 were 8%, 14%, 14%, 10%, and 12%, respectively. See Note 4. |
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 Pacific ex Japan ETF | ||||||||||||||||||||
Year ended Aug. 31, 2013 | Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | ||||||||||||||||
Net asset value, beginning of year | $ | 43.21 | $ | 44.47 | $ | 39.25 | $ | 36.85 | $ | 41.37 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 1.69 | 1.73 | 1.64 | 1.25 | 1.38 | |||||||||||||||
Net realized and unrealized gain (loss)b | 1.71 | (1.14 | ) | 5.31 | 2.52 | (4.79 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 3.40 | 0.59 | 6.95 | 3.77 | (3.41 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (2.05 | ) | (1.85 | ) | (1.73 | ) | (1.37 | ) | (1.11 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (2.05 | ) | (1.85 | ) | (1.73 | ) | (1.37 | ) | (1.11 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 44.56 | $ | 43.21 | $ | 44.47 | $ | 39.25 | $ | 36.85 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 7.87 | % | 1.82 | % | 17.61 | % | 10.27 | % | (7.23 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 3,008,067 | $ | 3,188,582 | $ | 3,548,867 | $ | 3,438,149 | $ | 3,382,554 | ||||||||||
Ratio of expenses to average net assets | 0.50 | % | 0.50 | % | 0.50 | % | 0.50 | % | 0.50 | % | ||||||||||
Ratio of net investment income to average net assets | 3.59 | % | 4.16 | % | 3.53 | % | 3.09 | % | 4.83 | % | ||||||||||
Portfolio turnover ratec | 8 | % | 7 | % | 10 | % | 7 | % | 10 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
72 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Singapore ETF | ||||||||||||||||||||
Year ended Aug. 31, 2013 | Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | ||||||||||||||||
Net asset value, beginning of year | $ | 13.10 | $ | 13.05 | $ | 12.17 | $ | 10.25 | $ | 11.44 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.44 | 0.41 | 0.45 | 0.32 | 0.32 | |||||||||||||||
Net realized and unrealized gain (loss)b | (0.47 | ) | 0.11 | 0.92 | 1.97 | (1.16 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (0.03 | ) | 0.52 | 1.37 | 2.29 | (0.84 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.58 | ) | (0.47 | ) | (0.49 | ) | (0.37 | ) | (0.35 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.58 | ) | (0.47 | ) | (0.49 | ) | (0.37 | ) | (0.35 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 12.49 | $ | 13.10 | $ | 13.05 | $ | 12.17 | $ | 10.25 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | (0.38 | )% | 4.67 | % | 11.27 | % | 22.68 | % | (5.87 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 1,135,477 | $ | 1,512,687 | $ | 1,713,199 | $ | 1,730,001 | $ | 1,294,039 | ||||||||||
Ratio of expenses to average net assets | 0.51 | % | 0.53 | % | 0.52 | % | 0.53 | % | 0.55 | % | ||||||||||
Ratio of net investment income to average net assets | 3.23 | % | 3.32 | % | 3.34 | % | 2.80 | % | 3.97 | % | ||||||||||
Portfolio turnover ratec | 10 | % | 3 | % | 10 | % | 9 | % | 15 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 73 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI South Korea Capped ETF | ||||||||||||||||||||
Year ended Aug. 31, 2013 | Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | ||||||||||||||||
Net asset value, beginning of year | $ | 55.97 | $ | 56.74 | $ | 47.76 | $ | 42.01 | $ | 43.55 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.23 | 0.23 | 0.29 | 0.32 | 0.30 | |||||||||||||||
Net realized and unrealized gain (loss)b | 1.83 | (0.63 | ) | 9.19 | 5.82 | (1.45 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 2.06 | (0.40 | ) | 9.48 | 6.14 | (1.15 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.36 | ) | (0.37 | ) | (0.43 | ) | (0.39 | ) | (0.39 | ) | ||||||||||
Return of capital | — | — | (0.07 | ) | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.36 | ) | (0.37 | ) | (0.50 | ) | (0.39 | ) | (0.39 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 57.67 | $ | 55.97 | $ | 56.74 | $ | 47.76 | $ | 42.01 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 3.65 | % | (0.62 | )% | 19.76 | % | 14.65 | % | (2.31 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 3,376,516 | $ | 2,669,551 | $ | 4,071,225 | $ | 3,255,168 | $ | 2,398,550 | ||||||||||
Ratio of expenses to average net assetsc | 0.61 | % | 0.61 | % | 0.59 | % | 0.61 | % | 0.65 | % | ||||||||||
Ratio of net investment income to average net assets | 0.40 | % | 0.42 | % | 0.49 | % | 0.67 | % | 0.91 | % | ||||||||||
Portfolio turnover rated | 13 | % | 12 | % | 18 | % | 14 | % | 62 | % |
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 rates for the years ended August 31, 2013, August 31, 2012, August 31, 2011, August 31, 2010, and August 31, 2009 were 11%, 8%, 6%, 6%, and 8%, respectively. See Note 4. |
See notes to financial statements.
74 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Taiwan ETF | ||||||||||||||||||||
Year ended Aug. 31, 2013 | Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | ||||||||||||||||
Net asset value, beginning of year | $ | 12.58 | $ | 13.78 | $ | 12.19 | $ | 10.94 | $ | 13.13 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.24 | 0.28 | 0.39 | 0.23 | 0.30 | |||||||||||||||
Net realized and unrealized gain (loss)b | 1.05 | (1.01 | ) | 1.49 | 1.23 | (1.89 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 1.29 | (0.73 | ) | 1.88 | 1.46 | (1.59 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.27 | ) | (0.47 | ) | (0.29 | ) | (0.21 | ) | (0.60 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.27 | ) | (0.47 | ) | (0.29 | ) | (0.21 | ) | (0.60 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 13.60 | $ | 12.58 | $ | 13.78 | $ | 12.19 | $ | 10.94 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 10.30 | % | (4.80 | )% | 15.24 | % | 13.30 | % | (9.67 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 2,641,997 | $ | 2,247,128 | $ | 2,857,512 | $ | 2,721,439 | $ | 3,035,331 | ||||||||||
Ratio of expenses to average net assetsc | 0.61 | % | 0.61 | % | 0.59 | % | 0.61 | % | 0.65 | % | ||||||||||
Ratio of net investment income to average net assets | 1.80 | % | 2.25 | % | 2.64 | % | 1.90 | % | 3.18 | % | ||||||||||
Portfolio turnover rated | 21 | % | 22 | % | 23 | % | 9 | % | 52 | % |
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 rates for years ended August 31, 2013, August 31, 2012, August 31, 2011, August 31, 2010, and August 31, 2009 were 6%, 7%, 8%, 4% and 14%, respectively. See Note 4. |
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 Thailand Capped ETF | ||||||||||||||||||||
Year ended Aug. 31, 2013 | Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | ||||||||||||||||
Net asset value, beginning of year | $ | 70.53 | $ | 66.27 | $ | 55.06 | $ | 36.87 | $ | 38.83 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 1.84 | 1.76 | 1.65 | 1.44 | 1.17 | |||||||||||||||
Net realized and unrealized gain (loss)b | (2.75 | ) | 4.37 | 11.10 | 17.95 | (1.88 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (0.91 | ) | 6.13 | 12.75 | 19.39 | (0.71 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (1.89 | ) | (1.87 | ) | (1.54 | ) | (1.20 | ) | (1.25 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (1.89 | ) | (1.87 | ) | (1.54 | ) | (1.20 | ) | (1.25 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 67.73 | $ | 70.53 | $ | 66.27 | $ | 55.06 | $ | 36.87 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | (1.65 | )% | 9.57 | % | 23.33 | % | 53.19 | % | (0.33 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 541,873 | $ | 595,968 | $ | 632,840 | $ | 520,304 | $ | 94,021 | ||||||||||
Ratio of expenses to average net assetsc | 0.61 | % | 0.61 | % | 0.59 | % | 0.61 | % | 0.65 | % | ||||||||||
Ratio of net investment income to average net assets | 2.22 | % | 2.66 | % | 2.56 | % | 3.22 | % | 4.00 | % | ||||||||||
Portfolio turnover rated | 24 | % | 12 | % | 22 | % | 14 | % | 15 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | 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.
76 | 2013 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 ETF | Former Namea | Diversification Classification | ||||
MSCI Australia | iShares MSCI Australia Index Fund | Non-diversified | ||||
MSCI Hong Kong | iShares MSCI Hong Kong Index Fund | Non-diversified | ||||
MSCI Japan Small-Cap | iShares MSCI Japan Small Cap Index Fund | Diversified | ||||
MSCI Malaysia | iShares MSCI Malaysia Index Fund | Non-diversified | ||||
MSCI Pacific ex Japan | iShares MSCI Pacific ex-Japan Index Fund | Diversified | ||||
MSCI Singapore | iShares MSCI Singapore Index Fund | Non-diversified | ||||
MSCI South Korea Capped | iShares MSCI South Korea Capped Index Fund | Non-diversified | ||||
MSCI Taiwan | iShares MSCI Taiwan Index Fund | Non-diversified | ||||
MSCI Thailand Capped | iShares MSCI Thailand Capped Investable Market Index Fund | Non-diversified |
a | The Funds changed their names effective July 1, 2013. |
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.
Non-diversified funds generally hold securities of fewer issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers.
Each Fund invests in securities of non-U.S. issuers that trade in non-U.S. markets. This involves 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. These risks are heightened for investments in emerging market and frontier market countries.
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
NOTESTO FINANCIAL STATEMENTS | 77 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
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 and, for financial reporting purposes, as of the report date should the reporting period end on a day that the Fund’s listing exchange is not 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 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, reviews of 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 is not necessarily an indication of the risk associated with investing in the 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; |
78 | 2013 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 Global Valuation Committee’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 Funds’ investments according to the fair value hierarchy as of August 31, 2013. The breakdown of each Fund’s investments into major categories is disclosed in its respective schedule of investments.
iShares ETF and
| Investments | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
MSCI Australia | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 1,894,809,237 | $ | — | $ | 249 | $ | 1,894,809,486 | ||||||||
Money Market Funds | 4,108,022 | — | — | 4,108,022 | ||||||||||||
Futures Contractsa | 706,374 | — | — | 706,374 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 1,899,623,633 | $ | — | $ | 249 | $ | 1,899,623,882 | |||||||||
|
|
|
|
|
|
|
| |||||||||
MSCI Hong Kong | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 2,115,343,317 | $ | — | $ | — | $ | 2,115,343,317 | ||||||||
Rights | — | 1 | — | 1 | ||||||||||||
Money Market Funds | 87,012,488 | — | — | 87,012,488 | ||||||||||||
Liabilities: | ||||||||||||||||
Futures Contractsa | (106,978 | ) | — | — | (106,978 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 2,202,248,827 | $ | 1 | $ | — | $ | 2,202,248,828 | |||||||||
|
|
|
|
|
|
|
| |||||||||
MSCI Japan Small-Cap | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 88,752,351 | $ | — | $ | — | $ | 88,752,351 | ||||||||
Money Market Funds | 1,301,634 | — | — | 1,301,634 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 90,053,985 | $ | — | $ | — | $ | 90,053,985 | |||||||||
|
|
|
|
|
|
|
| |||||||||
MSCI Malaysia | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 807,299,058 | $ | — | $ | — | $ | 807,299,058 | ||||||||
Money Market Funds | 70,542 | — | — | 70,542 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 807,369,600 | $ | — | $ | — | $ | 807,369,600 | |||||||||
|
|
|
|
|
|
|
| |||||||||
NOTESTO FINANCIAL STATEMENTS | 79 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
iShares ETF and
| Investments | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
MSCI Pacific ex Japan | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 2,984,023,972 | $ | — | $ | 356 | $ | 2,984,024,328 | ||||||||
Rights | — | 0 | b | — | 0 | b | ||||||||||
Money Market Funds | 76,078,588 | — | — | 76,078,588 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 3,060,102,560 | $ | 0 | b | $ | 356 | $ | 3,060,102,916 | ||||||||
|
|
|
|
|
|
|
| |||||||||
MSCI Singapore | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 1,127,743,169 | $ | — | $ | — | $ | 1,127,743,169 | ||||||||
Money Market Funds | 91,772,596 | — | — | 91,772,596 | ||||||||||||
Liabilities: | ||||||||||||||||
Futures Contractsa | (85,780 | ) | — | — | (85,780 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 1,219,429,985 | $ | — | $ | — | $ | 1,219,429,985 | |||||||||
|
|
|
|
|
|
|
| |||||||||
MSCI South Korea Capped | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 3,298,621,354 | $ | 7,127,673 | $ | — | $ | 3,305,749,027 | ||||||||
Preferred Stocks | 70,827,619 | — | — | 70,827,619 | ||||||||||||
Money Market Funds | 125,770,931 | — | — | 125,770,931 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 3,495,219,904 | $ | 7,127,673 | $ | — | $ | 3,502,347,577 | |||||||||
|
|
|
|
|
|
|
| |||||||||
MSCI Taiwan | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 2,617,693,605 | $ | — | $ | 2 | $ | 2,617,693,607 | ||||||||
Money Market Funds | 313,261,317 | — | — | 313,261,317 | ||||||||||||
Futures Contractsa | 488,081 | — | — | 488,081 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 2,931,443,003 | $ | — | $ | 2 | $ | 2,931,443,005 | |||||||||
|
|
|
|
|
|
|
| |||||||||
MSCI Thailand Capped | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 537,947,462 | $ | — | $ | — | $ | 537,947,462 | ||||||||
Rights | — | 28,316 | — | 28,316 | ||||||||||||
Warrants | 258,300 | 0 | b | — | 258,300 | |||||||||||
Money Market Funds | 1,460,588 | — | — | 1,460,588 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 539,666,350 | $ | 28,316 | $ | — | $ | 539,694,666 | |||||||||
|
|
|
|
|
|
|
| |||||||||
a | Futures contracts are shown at the net unrealized appreciation (depreciation) on the contracts. |
b | 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, 2013 are reflected in dividends receivable. Non-cash dividends received in the form of stock in an elective dividend, if any, are recorded as dividend
80 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
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, stock dividends, capital gains on investments, or certain foreign currency transactions. 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 stock dividends are presented as “other foreign taxes,” and foreign taxes on capital gains from sales of investments and foreign taxes on foreign currency transactions are included in their respective net realized gain (loss) categories. Foreign taxes payable as of August 31, 2013, 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.
RECENT ACCOUNTING STANDARD
In December 2011, the Financial Accounting Standards Board issued guidance to enhance current disclosure requirements on offsetting of certain assets and liabilities and enable financial statement users to compare financial statements prepared under U.S. GAAP and International Financial Reporting Standards (IFRS). The new disclosures are required for investments and derivative financial instruments subject to master netting agreements or similar agreements and require an entity to disclose both
NOTESTO FINANCIAL STATEMENTS | 81 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
gross and net information about such investments and transactions eligible for offset in the statement of assets and liabilities. The scope of the disclosure requirements for offsetting will be limited to certain derivative instruments and securities lending transactions. In addition, the standard requires disclosure of collateral received and posted in connection with master netting agreements or similar agreements. The guidance is effective for financial statements for fiscal years beginning after January 1, 2013, and interim periods within those fiscal years. Management is evaluating the impact of this guidance on the Funds’ financial statements and disclosures.
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 ETFs, 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 Capped, iShares MSCI Taiwan and iShares MSCI Thailand Capped ETFs, 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 |
82 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
For its investment advisory services to the iShares MSCI Pacific ex Japan ETF, 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 | ||||
0.5000 | % | First $46 billion | |||
0.4750 | a | Over $46 billion, up to and including $81 billion | |||
0.4513 | a | Over $81 billion, up to and including $141 billionb | |||
0.4287 | a | Over $141 billionb |
a | Investment advisory fee level reflects a 5% reduction (rounded to the fourth decimal place) from the investment advisory fee at the prior aggregate average daily net asset level. |
b | Breakpoint level was added effective July 1, 2013. |
The U.S. Securities and Exchange Commission has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (“BTC”), an affiliate of BFA, to serve as securities lending agent for the Funds, subject to applicable conditions. 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 Funds retain a portion of securities lending income and remit a remaining portion to BTC as compensation for its services as securities lending agent. The Funds benefit from a borrower default indemnity provided by BlackRock. As securities lending agent, BTC bears all operational costs directly related to securities lending as well as the cost of borrower default indemnification. 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, 2013, each Fund retained 65% of securities lending income and paid a fee to BTC equal to 35% of such income in the amounts as follows:
iShares ETF | Securities Lending Agent Fees | |||
MSCI Australia | $ | 71,075 | ||
MSCI Hong Kong | 308,120 | |||
MSCI Japan Small-Cap | 12,018 | |||
MSCI Pacific ex Japan | 485,319 | |||
MSCI Singapore | 926,099 | |||
MSCI South Korea Capped | 1,591,166 | |||
MSCI Taiwan | 4,196,537 |
For the year ended August 31, 2013, BTC, the Funds’ securities lending agent, has agreed to voluntarily reimburse the iShares MSCI Taiwan ETF in the amount of $545,550, 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.
BlackRock Investments, LLC, an affiliate of BFA, is the distributor for each Fund. Pursuant to the 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.
NOTESTO FINANCIAL STATEMENTS | 83 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
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, 2013 were as follows:
iShares ETF | Purchases | Sales | ||||||
MSCI Australia | $ | 147,180,197 | $ | 182,803,797 | ||||
MSCI Hong Kong | 367,659,114 | 323,040,976 | ||||||
MSCI Japan Small-Cap | 10,505,202 | 10,343,135 | ||||||
MSCI Malaysia | 164,511,722 | 293,674,285 | ||||||
MSCI Pacific ex Japan | 299,451,351 | 330,081,127 | ||||||
MSCI Singapore | 145,747,998 | 174,589,948 | ||||||
MSCI South Korea Capped | 1,051,430,648 | 413,306,588 | ||||||
MSCI Taiwan | 751,258,713 | 539,120,599 | ||||||
MSCI Thailand Capped | 289,964,468 | 193,089,578 |
In-kind transactions (see Note 4) for the year ended August 31, 2013 were as follows:
iShares ETF | In-kind Purchases | In-kind Sales | ||||||
MSCI Australia | $ | 350,082,509 | $ | 966,101,044 | ||||
MSCI Hong Kong | 1,400,941,027 | 1,421,820,386 | ||||||
MSCI Japan Small-Cap | 48,577,371 | 8,540,636 | ||||||
MSCI Pacific ex Japan | 954,856,977 | 1,198,687,385 | ||||||
MSCI Singapore | 198,047,655 | 504,643,022 | ||||||
MSCI Thailand Capped | 374,478,159 | 480,457,180 |
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 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 may also 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.
84 | 2013 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 market value of the loaned securities is determined at the close of each business day of the Funds and any additional required collateral is delivered to the Funds on the next business day. 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.
As of August 31, 2013, any securities on loan were collateralized by cash. The cash collateral received was invested in money market funds managed by BFA. The value of any securities on loan as of August 31, 2013 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.
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. To mitigate these risks, the Funds benefit from a borrower default indemnity provided by BlackRock. BlackRock’s indemnity allows for full replacement of securities lent. Each Fund could suffer a loss if the value of the investments purchased with cash collateral falls below the value of the cash collateral received.
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, 2013, 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 ETF | Paid-in Capital | Undistributed Net Investment Income/Distributions in Excess of Net Investment Income | Undistributed Net Realized Gain/Accumulated Net Realized Loss | |||||||||
MSCI Australia | $ | 54,594,834 | $ | 14,662,429 | $ | (69,257,263 | ) | |||||
MSCI Hong Kong | 194,221,753 | (1,779 | ) | (194,219,974 | ) | |||||||
MSCI Japan Small-Cap | 528,488 | 106,432 | (634,920 | ) | ||||||||
MSCI Malaysia | — | (236,248 | ) | 236,248 | ||||||||
MSCI Pacific ex Japan | 312,539,331 | 13,616,397 | (326,155,728 | ) | ||||||||
MSCI Singapore | 65,428,168 | 7,741,510 | (73,169,678 | ) | ||||||||
MSCI South Korea Capped | — | (1,605,926 | ) | 1,605,926 | ||||||||
MSCI Taiwan | (12,022,719 | ) | 657,830 | 11,364,889 | ||||||||
MSCI Thailand Capped | 98,298,062 | (224,837 | ) | (98,073,225 | ) |
NOTESTO FINANCIAL STATEMENTS | 85 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
The tax character of distributions paid during the years ended August 31, 2013 and August 31, 2012 was as follows:
iShares ETF | 2013 | 2012 | ||||||
MSCI Australia | ||||||||
Ordinary income | $ | 130,032,525 | $ | 127,985,295 | ||||
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| |||||
MSCI Hong Kong | ||||||||
Ordinary income | $ | 71,372,977 | $ | 55,827,349 | ||||
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| |||||
MSCI Japan Small-Cap | ||||||||
Ordinary income | $ | 1,107,270 | $ | 1,368,220 | ||||
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| |||||
MSCI Malaysia | ||||||||
Ordinary income | $ | 23,444,016 | $ | 32,637,576 | ||||
Return of capital | — | 1,278,099 | ||||||
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|
| |||||
$ | 23,444,016 | $ | 33,915,675 | |||||
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| |||||
MSCI Pacific ex Japan | ||||||||
Ordinary income | $ | 156,573,693 | $ | 141,521,654 | ||||
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| |||||
MSCI Singapore | ||||||||
Ordinary income | $ | 63,036,613 | $ | 55,248,494 | ||||
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| |||||
MSCI South Korea Capped | ||||||||
Ordinary income | $ | 18,847,855 | $ | 21,597,221 | ||||
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| |||||
MSCI Taiwan | ||||||||
Ordinary income | $ | 53,961,288 | $ | 88,700,282 | ||||
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| |||||
MSCI Thailand Capped | ||||||||
Ordinary income | $ | 18,144,635 | $ | 15,932,327 | ||||
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| |||||
As of August 31, 2013, the tax components of accumulated net earnings (losses) were as follows:
iShares ETF | Undistributed Ordinary Income | Capital Loss Carryforwards | Net Gains (Losses) a | Qualified Late-Year Losses b | Total | |||||||||||||||
MSCI Australia | $ | — | $ | (121,583,350 | ) | $ | (128,330,531 | ) | $ | (28,448,384 | ) | $ | (278,362,265 | ) | ||||||
MSCI Hong Kong | 4,875,501 | (317,514,398 | ) | (62,733,842 | ) | (47,232,919 | ) | (422,605,658 | ) | |||||||||||
MSCI Japan Small-Cap | 543,853 | (1,467,031 | ) | (852,132 | ) | (529,749 | ) | (2,305,059 | ) | |||||||||||
MSCI Malaysia | 2,319,942 | (29,674,200 | ) | 388,070,769 | (1,279,199 | ) | 359,437,312 | |||||||||||||
MSCI Pacific ex Japan | 13,109,896 | (344,153,594 | ) | 74,401,277 | (52,326,510 | ) | (308,968,931 | ) | ||||||||||||
MSCI Singapore | 3,669,410 | (191,544,515 | ) | (47,761,111 | ) | (4,877,708 | ) | (240,513,924 | ) | |||||||||||
MSCI South Korea Capped | 23,496,587 | (379,395,075 | ) | 978,976,852 | — | 623,078,364 | ||||||||||||||
MSCI Taiwan | 48,924,376 | (848,853,794 | ) | 733,650,867 | (26,586,716 | ) | (92,865,267 | ) | ||||||||||||
MSCI Thailand Capped | 2,739,321 | (5,082,117 | ) | (135,569,529 | ) | (1,430,570 | ) | (139,342,895 | ) |
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, 2014. |
86 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
As of August 31, 2013, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:
iShares ETF | Non- Expiring a | Expiring 2014 | Expiring 2015 | Expiring 2016 | Expiring 2017 | Expiring 2018 | Expiring 2019 | Total | ||||||||||||||||||||||||
MSCI Australia | $ | 61,564,683 | $ | — | $ | 7,066 | $ | 529,868 | $ | 24,006,125 | $ | 23,348,244 | $ | 12,127,364 | $ | 121,583,350 | ||||||||||||||||
MSCI Hong Kong | 132,365,884 | 425,440 | 2,899,247 | 3,185,408 | 29,235,556 | 114,836,904 | 34,565,959 | 317,514,398 | ||||||||||||||||||||||||
MSCI Japan Small-Cap | 590,294 | — | — | — | 131,718 | 541,322 | 203,697 | 1,467,031 | ||||||||||||||||||||||||
MSCI Malaysia | — | — | — | — | 29,674,200 | — | — | 29,674,200 | ||||||||||||||||||||||||
MSCI Pacific ex Japan | 136,545,276 | — | — | — | 66,207,828 | 104,799,503 | 36,600,987 | 344,153,594 | ||||||||||||||||||||||||
MSCI Singapore | 31,047,538 | — | — | 807,115 | 15,680,510 | 132,420,824 | 11,588,528 | 191,544,515 | ||||||||||||||||||||||||
MSCI South Korea Capped | 13,308,753 | — | — | — | 60,990,953 | 226,591,665 | 78,503,704 | 379,395,075 | ||||||||||||||||||||||||
MSCI Taiwan | 26,586,528 | 14,435,986 | 64,999,586 | 16,734,578 | 343,375,145 | 363,052,013 | 19,669,958 | 848,853,794 | ||||||||||||||||||||||||
MSCI Thailand Capped | 900,335 | — | — | — | 555,444 | 2,321,428 | 1,304,910 | 5,082,117 |
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, 2013, the Funds utilized their capital loss carryforwards as follows:
iShares ETF | Utilized | |||
MSCI Malaysia | $ | 9,497,445 | ||
MSCI Thailand Capped | 1,472,846 |
As of August 31, 2013, gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes were as follows:
iShares ETF | Tax Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation (Depreciation) | ||||||||||||
MSCI Australia | $ | 2,027,491,824 | $ | 155,260,581 | $ | (283,834,897 | ) | $ | (128,574,316 | ) | ||||||
MSCI Hong Kong | 2,264,984,489 | 139,852,493 | (202,481,176 | ) | (62,628,683 | ) | ||||||||||
MSCI Japan Small-Cap | 90,904,711 | 7,915,323 | (8,766,049 | ) | (850,726 | ) | ||||||||||
MSCI Malaysia | 419,369,524 | 427,026,982 | (39,026,906 | ) | 388,000,076 | |||||||||||
MSCI Pacific ex Japan | 2,985,358,727 | 364,099,754 | (289,355,565 | ) | 74,744,189 | |||||||||||
MSCI Singapore | 1,267,151,817 | 77,333,903 | (124,969,955 | ) | (47,636,052 | ) | ||||||||||
MSCI South Korea Capped | 2,523,369,691 | 1,533,774,983 | (554,797,097 | ) | 978,977,886 | |||||||||||
MSCI Taiwan | 2,197,802,812 | 1,007,193,775 | (274,041,663 | ) | 733,152,112 | |||||||||||
MSCI Thailand Capped | 675,219,749 | 10,280,248 | (145,805,331 | ) | (135,525,083 | ) |
Management has reviewed the tax positions as of August 31, 2013, inclusive of the open tax return years, and has determined that no provision for income tax is required in the Funds’ financial statements.
NOTESTO FINANCIAL STATEMENTS | 87 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
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 the Funds as of August 31, 2013 and the related locations in the statements of assets and liabilities, presented by risk exposure category:
Assets | ||||||||
iShares MSCI Australia ETF | iShares MSCI Taiwan ETF | |||||||
Equity contracts: | ||||||||
Variation margin/Net assets consist of – net unrealized appreciation (depreciation)a | $ | 706,374 | $ | 488,081 | b | |||
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| |||||
a | Represents cumulative appreciation of futures contracts as reported in the schedules of investments. |
b | Only current day’s variation margin is reported in the statements of assets and liabilities. |
Liabilities | ||||||||
iShares MSCI Hong Kong ETF | iShares MSCI Singapore ETF | |||||||
Equity contracts: | ||||||||
Variation margin/Net assets consist of – net unrealized appreciation (depreciation)a | $ | (106,978 | ) | $ | (85,780 | ) | ||
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a | Represents cumulative depreciation of futures contracts as reported in the schedules of investments. |
88 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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 the Funds during the year ended August 31, 2013 and the related locations in the statements of operations, presented by risk exposure category:
Net Realized Gain (Loss) | ||||||||||||||||
iShares MSCI Australia ETF | iShares MSCI Hong Kong ETF | iShares MSCI Singapore ETF | iShares MSCI Taiwan ETF | |||||||||||||
Equity contracts: | ||||||||||||||||
Futures contracts | $ | 825,222 | $ | (388,934 | ) | $ | (665,749 | ) | $ | 247,654 | ||||||
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Net Change in Unrealized Appreciation/Depreciation | ||||||||||||||||
iShares MSCI Australia ETF | iShares MSCI Hong Kong ETF | iShares MSCI Singapore ETF | iShares MSCI Taiwan ETF | |||||||||||||
Equity contracts: | ||||||||||||||||
Futures contracts | $ | 756,393 | $ | (83,603 | ) | $ | (41,881 | ) | $ | 654,075 | ||||||
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The following table shows the average quarter-end balances of open futures contracts for the year ended August 31, 2013:
iShares MSCI Australia ETF | iShares MSCI Hong Kong ETF | iShares MSCI Singapore ETF | iShares MSCI Taiwan ETF | |||||||||||||
Average number of contracts purchased | 153 | 87 | 111 | 343 | ||||||||||||
Average value of contracts purchased | $ | 18,148,792 | $ | 12,291,401 | $ | 6,264,929 | $ | 9,353,484 |
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.
NOTESTO FINANCIAL STATEMENTS | 89 |
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 ETF, iShares MSCI Hong Kong ETF, iShares MSCI Japan Small-Cap ETF, iShares MSCI Malaysia ETF, iShares MSCI Pacific ex Japan ETF, iShares MSCI Singapore ETF, iShares MSCI South Korea Capped ETF, iShares MSCI Taiwan ETF, and iShares MSCI Thailand Capped ETF (the “Funds”) at August 31, 2013, 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, 2013 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
October 23, 2013
90 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES®, INC.
For the fiscal year ended August 31, 2013, 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 ETF | Foreign Source Income Earned | Foreign Taxes Paid | ||||||
MSCI Australia | $ | 108,033,194 | $ | 1,184,702 | ||||
MSCI Hong Kong | 85,270,291 | — | ||||||
MSCI Japan Small-Cap | 1,210,214 | 84,655 | ||||||
MSCI Malaysia | 32,518,470 | — | ||||||
MSCI Pacific ex Japan | 155,635,420 | 1,615,306 | ||||||
MSCI Singapore | 55,080,603 | 347,296 | ||||||
MSCI South Korea Capped | 34,986,498 | 6,245,163 | ||||||
MSCI Taiwan | 70,908,668 | 16,310,952 | ||||||
MSCI Thailand Capped | 26,288,710 | 2,642,301 |
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, 2013:
iShares ETF | Qualified Dividend Income | |||
MSCI Australia | $ | 99,048,540 | ||
MSCI Japan Small-Cap | 950,346 | |||
MSCI Pacific ex Japan | 99,980,429 | |||
MSCI South Korea Capped | 25,093,018 | |||
MSCI Thailand Capped | 20,786,936 |
In February 2014, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2013. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.
TAX INFORMATION | 91 |
Table of Contents
Board Review and Approval of Investment Advisory
Contract
iSHARES®, INC.
I. iShares MSCI Australia ETF, iShares MSCI Hong Kong ETF, iShares MSCI Japan Small-Cap ETF, iShares MSCI Malaysia ETF, iShares MSCI Singapore ETF, iShares MSCI South Korea Capped ETF, iShares MSCI Taiwan ETF and iShares MSCI Thailand Capped ETF.
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 and approve 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 March 7, 2013, April 23, 2013, and May 3, 2013, 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 16, 2013, management presented preliminary 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 5, 2013, to discuss the additional requests. At a meeting held on June 10-11, 2013, the Board, including the Independent Directors, reviewed the 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 the supplemental information management provided at the request of the Independent Directors. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information 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 reached 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 the size, sponsor, inception date, or other differentiating factors included in Lipper’s proprietary selection methodology, 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, and/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 provided in the Lipper Report may or may not provide meaningful direct comparisons to the Funds.
The Board also noted that the investment advisory fee rates 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.
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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, 2012, 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 Lipper Group may include funds that are not exchange traded funds or index funds, and that may have different investment objectives and/or benchmarks from the Funds. In addition, the Board noted that each Fund seeks to track its own 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, including detailed information on certain specific iShares funds requested by the Board, was also considered.
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 fee rate and expense level 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, including information about recent and proposed enhancements to the iShares business, including with respect to shareholder servicing and support, 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 during 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 acknowledged that resources to support the iShares funds and their shareholders have been added or enhanced since BlackRock’s acquisition of BFA in December 2009, 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 detailed presentations regarding BFA’s investment and risk management processes and strategies provided at the June 10-11, 2013 meeting and throughout the previous year, 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 the Funds and Profits Realized by BFA and its Affiliates — The Board reviewed information about the profitability to BlackRock 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 analyses 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
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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 relatively low fee rates established at inception, 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 BlackRock’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 fee rates 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 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 to the Funds, as well as other significant differences in the approach of BFA and its affiliates to the Funds, on one hand, and to the 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 and challenges 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 the “fallout” benefits or 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
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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.
Based on the considerations described above, the Board determined that the investment advisory fee rate under each Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that it is in the best interest of each Fund and its shareholders to approve the continuance of the Advisory Contract for the coming year.
II. iShares MSCI Pacific ex Japan ETF.
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 and approve 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 March 7, 2013, April 23, 2013, and May 3, 2013, 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 16, 2013, management presented preliminary 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 5, 2013, to discuss the additional requests. At a meeting held on June 10-11, 2013, the Board, including the Independent Directors, reviewed the 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 the of supplemental information management provided at the request of the Independent Directors. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information 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 reached 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 the size, sponsor, inception date, or other differentiating factors included in Lipper’s proprietary selection methodology, including adding “at cost” funds, 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 an index similar to that tracked by the Fund, the Lipper Group included in part mutual funds, closed-end funds, exchange traded funds, and/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.
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The Board further noted that due to the limitations in providing comparable funds in the various Lipper Groups, the statistical information provided in the Lipper Report may or may not provide meaningful direct comparisons to the Fund.
The Board also noted that the investment advisory fee rate and overall expenses for the Fund compared favorably to the investment advisory fee rates and overall expenses of the funds in its respective 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, 2012, 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 may include funds that are not exchange traded funds or index funds, and that may have different investment objectives and/or benchmarks from the Fund. In addition, the Board noted that the Fund seeks to track its own benchmark index and that, during the prior year, the Board received periodic reports on the Fund’s performance in comparison with its relevant benchmark index. Such periodic comparative performance information, including detailed information on certain specific iShares funds requested by the Board, was also considered.
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 fee rate and expense level 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, including information about recent and proposed enhancements to the iShares business, including with respect to shareholder servicing and support, 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 during 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 acknowledged that resources to support the iShares funds and their shareholders have been added or enhanced since BlackRock’s acquisition of BFA in December 2009, 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 detailed presentations regarding BFA’s investment and risk management processes and strategies provided at the June 10-11, 2013 meeting and throughout the previous year, 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 the Fund and Profits Realized by BFA and its Affiliates — The Board reviewed information about the profitability to BlackRock of the Fund based on the fees payable to BFA and its affiliates (including fees under the
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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 relatively low fee rates established at inception, 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 BlackRock’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 rate, and that, following negotiations, BFA and the Board had agreed to revise the Advisory Contract for the Fund to provide for additional breakpoints, as the assets of the Fund, on an aggregated basis with the assets of certain other iShares funds, increase. The Board noted that the revisions of the Advisory Contract to provide additional breakpoints had been subject to further negotiation after receipt of management’s proposal, and that at the request of the Board, management had modified its initial proposal regarding adding additional breakpoints to the Fund. 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 fee rate 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 to the Fund, as well as other significant differences in the approach of BFA and its affiliates to the Fund, on one hand, and to the 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 and challenges 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 rate under the Advisory Contract for the Fund was generally higher than the investment advisory/
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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 the “fallout” benefits or 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 rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that 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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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 ETF | 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 | ||||||||||||||||||||||||
MSCI Australia | $ | 1.256473 | $ | — | $ | 0.180722 | $ | 1.437195 | 87 | % | — | % | 13 | % | 100 | % | ||||||||||||||||
MSCI Hong Kong | 0.559292 | — | — | 0.559292 | 100 | — | — | 100 | ||||||||||||||||||||||||
MSCI Japan Small-Cap | 0.986225 | — | 0.011111 | 0.997336 | 99 | — | 1 | 100 | ||||||||||||||||||||||||
MSCI Malaysia | 0.369217 | — | — | 0.369217 | 100 | — | — | 100 | ||||||||||||||||||||||||
MSCI Pacific ex Japan | 1.984502 | — | 0.063333 | 2.047835 | 97 | — | 3 | 100 | ||||||||||||||||||||||||
MSCI Singapore | 0.467043 | — | 0.116618 | 0.583661 | 80 | — | 20 | 100 | ||||||||||||||||||||||||
MSCI South Korea Capped | 0.364562 | — | — | 0.364562 | 100 | — | — | 100 | ||||||||||||||||||||||||
MSCI Taiwan | 0.270890 | — | — | 0.270890 | 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 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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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 ETF
Period Covered: January 1, 2008 through June 30, 2013
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 5.5% | 5 | 0.36 | % | |||||
Greater than 5.0% and Less than 5.5% | 1 | 0.07 | ||||||
Greater than 4.5% and Less than 5.0% | 2 | 0.14 | ||||||
Greater than 4.0% and Less than 4.5% | 4 | 0.29 | ||||||
Greater than 3.5% and Less than 4.0% | 8 | 0.58 | ||||||
Greater than 3.0% and Less than 3.5% | 12 | 0.87 | ||||||
Greater than 2.5% and Less than 3.0% | 16 | 1.16 | ||||||
Greater than 2.0% and Less than 2.5% | 26 | 1.88 | ||||||
Greater than 1.5% and Less than 2.0% | 69 | 4.99 | ||||||
Greater than 1.0% and Less than 1.5% | 105 | 7.60 | ||||||
Greater than 0.5% and Less than 1.0% | 235 | 17.00 | ||||||
Between 0.5% and –0.5% | 533 | 38.58 | ||||||
Less than –0.5% and Greater than –1.0% | 134 | 9.71 | ||||||
Less than –1.0% and Greater than –1.5% | 97 | 7.01 | ||||||
Less than –1.5% and Greater than –2.0% | 42 | 3.04 | ||||||
Less than –2.0% and Greater than –2.5% | 40 | 2.89 | ||||||
Less than –2.5% and Greater than –3.0% | 19 | 1.37 | ||||||
Less than –3.0% and Greater than –3.5% | 8 | 0.58 | ||||||
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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1,382 | 100.00 | % | ||||||
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100 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Hong Kong ETF
Period Covered: January 1, 2008 through June 30, 2013
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 4.5% | 8 | 0.58 | % | |||||
Greater than 4.0% and Less than 4.5% | 5 | 0.36 | ||||||
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% | 14 | 1.01 | ||||||
Greater than 2.0% and Less than 2.5% | 34 | 2.46 | ||||||
Greater than 1.5% and Less than 2.0% | 44 | 3.18 | ||||||
Greater than 1.0% and Less than 1.5% | 86 | 6.22 | ||||||
Greater than 0.5% and Less than 1.0% | 215 | 15.56 | ||||||
Between 0.5% and –0.5% | 602 | 43.57 | ||||||
Less than –0.5% and Greater than –1.0% | 149 | 10.78 | ||||||
Less than –1.0% and Greater than –1.5% | 87 | 6.30 | ||||||
Less than –1.5% and Greater than –2.0% | 45 | 3.26 | ||||||
Less than –2.0% and Greater than –2.5% | 29 | 2.10 | ||||||
Less than –2.5% and Greater than –3.0% | 17 | 1.23 | ||||||
Less than –3.0% and Greater than –3.5% | 10 | 0.72 | ||||||
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% and Greater than –5.0% | 6 | 0.43 | ||||||
Less than –5.0% and Greater than –5.5% | 3 | 0.22 | ||||||
Less than –5.5% | 5 | 0.36 | ||||||
|
|
|
| |||||
1,382 | 100.00 | % | ||||||
|
|
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|
SUPPLEMENTAL INFORMATION | 101 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Japan Small-Cap ETF
Period Covered: January 1, 2008 through June 30, 2013
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 5.0% | 12 | 0.87 | % | |||||
Greater than 4.5% and Less than 5.0% | 4 | 0.29 | ||||||
Greater than 4.0% and Less than 4.5% | 4 | 0.29 | ||||||
Greater than 3.5% and Less than 4.0% | 8 | 0.58 | ||||||
Greater than 3.0% and Less than 3.5% | 10 | 0.72 | ||||||
Greater than 2.5% and Less than 3.0% | 14 | 1.01 | ||||||
Greater than 2.0% and Less than 2.5% | 28 | 2.03 | ||||||
Greater than 1.5% and Less than 2.0% | 70 | 5.07 | ||||||
Greater than 1.0% and Less than 1.5% | 127 | 9.18 | ||||||
Greater than 0.5% and Less than 1.0% | 204 | 14.76 | ||||||
Between 0.5% and –0.5% | 546 | 39.50 | ||||||
Less than –0.5% and Greater than –1.0% | 143 | 10.35 | ||||||
Less than –1.0% and Greater than –1.5% | 83 | 6.01 | ||||||
Less than –1.5% and Greater than –2.0% | 48 | 3.47 | ||||||
Less than –2.0% and Greater than –2.5% | 32 | 2.32 | ||||||
Less than –2.5% and Greater than –3.0% | 16 | 1.16 | ||||||
Less than –3.0% and Greater than –3.5% | 13 | 0.94 | ||||||
Less than –3.5% and Greater than –4.0% | 6 | 0.43 | ||||||
Less than –4.0% and Greater than –4.5% | 3 | 0.22 | ||||||
Less than –4.5% and Greater than –5.0% | 2 | 0.14 | ||||||
Less than –5.0% and Greater than –5.5% | 3 | 0.22 | ||||||
Less than –5.5% and Greater than –6.0% | 3 | 0.22 | ||||||
Less than –6.0% | 3 | 0.22 | ||||||
|
|
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| |||||
1,382 | 100.00 | % | ||||||
|
|
|
|
102 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Malaysia ETF
Period Covered: January 1, 2008 through June 30, 2013
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 6.0% | 2 | 0.14 | % | |||||
Greater than 5.5% and Less than 6.0% | 1 | 0.07 | ||||||
Greater than 5.0% and Less than 5.5% | 1 | 0.07 | ||||||
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% | 4 | 0.29 | ||||||
Greater than 2.5% and Less than 3.0% | 4 | 0.29 | ||||||
Greater than 2.0% and Less than 2.5% | 17 | 1.23 | ||||||
Greater than 1.5% and Less than 2.0% | 35 | 2.53 | ||||||
Greater than 1.0% and Less than 1.5% | 90 | 6.51 | ||||||
Greater than 0.5% and Less than 1.0% | 212 | 15.35 | ||||||
Between 0.5% and –0.5% | 641 | 46.39 | ||||||
Less than –0.5% and Greater than –1.0% | 203 | 14.70 | ||||||
Less than –1.0% and Greater than –1.5% | 77 | 5.57 | ||||||
Less than –1.5% and Greater than –2.0% | 38 | 2.75 | ||||||
Less than –2.0% and Greater than –2.5% | 24 | 1.74 | ||||||
Less than –2.5% and Greater than –3.0% | 11 | 0.80 | ||||||
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% | 6 | 0.43 | ||||||
Less than –4.5% and Greater than –5.0% | 2 | 0.14 | ||||||
|
|
|
| |||||
1,382 | 100.00 | % | ||||||
|
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|
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SUPPLEMENTAL INFORMATION | 103 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Pacific ex Japan ETF
Period Covered: January 1, 2008 through June 30, 2013
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% | 1 | 0.07 | ||||||
Greater than 3.5% and Less than 4.0% | 10 | 0.72 | ||||||
Greater than 3.0% and Less than 3.5% | 9 | 0.65 | ||||||
Greater than 2.5% and Less than 3.0% | 11 | 0.80 | ||||||
Greater than 2.0% and Less than 2.5% | 28 | 2.03 | ||||||
Greater than 1.5% and Less than 2.0% | 53 | 3.84 | ||||||
Greater than 1.0% and Less than 1.5% | 118 | 8.54 | ||||||
Greater than 0.5% and Less than 1.0% | 217 | 15.70 | ||||||
Between 0.5% and –0.5% | 569 | 41.16 | ||||||
Less than –0.5% and Greater than –1.0% | 138 | 9.99 | ||||||
Less than –1.0% and Greater than –1.5% | 90 | 6.51 | ||||||
Less than –1.5% and Greater than –2.0% | 49 | 3.55 | ||||||
Less than –2.0% and Greater than –2.5% | 26 | 1.88 | ||||||
Less than –2.5% and Greater than –3.0% | 21 | 1.52 | ||||||
Less than –3.0% and Greater than –3.5% | 8 | 0.58 | ||||||
Less than –3.5% and Greater than –4.0% | 7 | 0.51 | ||||||
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% | 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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1,382 | 100.00 | % | ||||||
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104 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Singapore ETF
Period Covered: January 1, 2008 through June 30, 2013
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 4.5% | 6 | 0.43 | % | |||||
Greater than 4.0% and Less than 4.5% | 1 | 0.07 | ||||||
Greater than 3.5% and Less than 4.0% | 4 | 0.29 | ||||||
Greater than 3.0% and Less than 3.5% | 3 | 0.22 | ||||||
Greater than 2.5% and Less than 3.0% | 8 | 0.58 | ||||||
Greater than 2.0% and Less than 2.5% | 30 | 2.17 | ||||||
Greater than 1.5% and Less than 2.0% | 32 | 2.32 | ||||||
Greater than 1.0% and Less than 1.5% | 87 | 6.30 | ||||||
Greater than 0.5% and Less than 1.0% | 200 | 14.47 | ||||||
Between 0.5% and –0.5% | 677 | 48.99 | ||||||
Less than –0.5% and Greater than –1.0% | 157 | 11.36 | ||||||
Less than –1.0% and Greater than –1.5% | 77 | 5.57 | ||||||
Less than –1.5% and Greater than –2.0% | 40 | 2.89 | ||||||
Less than –2.0% and Greater than –2.5% | 28 | 2.03 | ||||||
Less than –2.5% and Greater than –3.0% | 8 | 0.58 | ||||||
Less than –3.0% and Greater than –3.5% | 7 | 0.51 | ||||||
Less than –3.5% and Greater than –4.0% | 5 | 0.36 | ||||||
Less than –4.0% and Greater than –4.5% | 5 | 0.36 | ||||||
Less than –4.5% and Greater than –5.0% | 3 | 0.22 | ||||||
Less than –5.0% and Greater than –5.5% | 2 | 0.14 | ||||||
Less than –5.5% | 2 | 0.14 | ||||||
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|
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| |||||
1,382 | 100.00 | % | ||||||
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SUPPLEMENTAL INFORMATION | 105 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI South Korea Capped ETF
Period Covered: January 1, 2008 through June 30, 2013
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 5.5% | 8 | 0.58 | % | |||||
Greater than 5.0% and Less than 5.5% | 2 | 0.14 | ||||||
Greater than 4.5% and Less than 5.0% | 3 | 0.22 | ||||||
Greater than 4.0% and Less than 4.5% | 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% | 31 | 2.24 | ||||||
Greater than 1.5% and Less than 2.0% | 57 | 4.12 | ||||||
Greater than 1.0% and Less than 1.5% | 83 | 6.01 | ||||||
Greater than 0.5% and Less than 1.0% | 216 | 15.63 | ||||||
Between 0.5% and –0.5% | 454 | 32.86 | ||||||
Less than –0.5% and Greater than –1.0% | 191 | 13.83 | ||||||
Less than –1.0% and Greater than –1.5% | 93 | 6.73 | ||||||
Less than –1.5% and Greater than –2.0% | 65 | 4.70 | ||||||
Less than –2.0% and Greater than –2.5% | 37 | 2.68 | ||||||
Less than –2.5% and Greater than –3.0% | 31 | 2.24 | ||||||
Less than –3.0% and Greater than –3.5% | 14 | 1.01 | ||||||
Less than –3.5% and Greater than –4.0% | 10 | 0.72 | ||||||
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% | 3 | 0.22 | ||||||
Less than –5.5% and Greater than –6.0% | 5 | 0.36 | ||||||
Less than –6.0% | 13 | 0.94 | ||||||
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1,382 | 100.00 | % | ||||||
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106 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Taiwan ETF
Period Covered: January 1, 2008 through June 30, 2013
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% | 5 | 0.36 | ||||||
Greater than 4.0% and Less than 4.5% | 5 | 0.36 | ||||||
Greater than 3.5% and Less than 4.0% | 13 | 0.94 | ||||||
Greater than 3.0% and Less than 3.5% | 11 | 0.80 | ||||||
Greater than 2.5% and Less than 3.0% | 11 | 0.80 | ||||||
Greater than 2.0% and Less than 2.5% | 29 | 2.10 | ||||||
Greater than 1.5% and Less than 2.0% | 45 | 3.26 | ||||||
Greater than 1.0% and Less than 1.5% | 89 | 6.44 | ||||||
Greater than 0.5% and Less than 1.0% | 208 | 15.05 | ||||||
Between 0.5% and –0.5% | 527 | 38.14 | ||||||
Less than –0.5% and Greater than –1.0% | 204 | 14.76 | ||||||
Less than –1.0% and Greater than –1.5% | 94 | 6.80 | ||||||
Less than –1.5% and Greater than –2.0% | 50 | 3.63 | ||||||
Less than –2.0% and Greater than –2.5% | 26 | 1.88 | ||||||
Less than –2.5% and Greater than –3.0% | 17 | 1.23 | ||||||
Less than –3.0% and Greater than –3.5% | 18 | 1.29 | ||||||
Less than –3.5% and Greater than –4.0% | 6 | 0.43 | ||||||
Less than –4.0% and Greater than –4.5% | 4 | 0.29 | ||||||
Less than –4.5% and Greater than –5.0% | 3 | 0.22 | ||||||
Less than –5.0% and Greater than –5.5% | 2 | 0.14 | ||||||
Less than –5.5% and Greater than –6.0% | 2 | 0.14 | ||||||
Less than –6.0% | 8 | 0.58 | ||||||
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1,382 | 100.00 | % | ||||||
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SUPPLEMENTAL INFORMATION | 107 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Thailand Capped ETF
Period Covered: April 1, 2008 through June 30, 2013
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 5.0% | 1 | 0.08 | % | |||||
Greater than 4.5% and Less than 5.0% | 3 | 0.23 | ||||||
Greater than 4.0% and Less than 4.5% | 4 | 0.30 | ||||||
Greater than 3.5% and Less than 4.0% | 5 | 0.38 | ||||||
Greater than 3.0% and Less than 3.5% | 5 | 0.38 | ||||||
Greater than 2.5% and Less than 3.0% | 19 | 1.44 | ||||||
Greater than 2.0% and Less than 2.5% | 25 | 1.89 | ||||||
Greater than 1.5% and Less than 2.0% | 55 | 4.16 | ||||||
Greater than 1.0% and Less than 1.5% | 148 | 11.20 | ||||||
Greater than 0.5% and Less than 1.0% | 231 | 17.49 | ||||||
Between 0.5% and –0.5% | 495 | 37.48 | ||||||
Less than –0.5% and Greater than –1.0% | 133 | 10.07 | ||||||
Less than –1.0% and Greater than –1.5% | 84 | 6.36 | ||||||
Less than –1.5% and Greater than –2.0% | 41 | 3.10 | ||||||
Less than –2.0% and Greater than –2.5% | 30 | 2.27 | ||||||
Less than –2.5% and Greater than –3.0% | 14 | 1.06 | ||||||
Less than –3.0% and Greater than –3.5% | 11 | 0.83 | ||||||
Less than –3.5% and Greater than –4.0% | 2 | 0.15 | ||||||
Less than –4.0% and Greater than –4.5% | 2 | 0.15 | ||||||
Less than –4.5% and Greater than –5.0% | 4 | 0.30 | ||||||
Less than –5.0% and Greater than –5.5% | 3 | 0.23 | ||||||
Less than –5.5% and Greater than –6.0% | 2 | 0.15 | ||||||
Less than –6.0% | 4 | 0.30 | ||||||
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1,321 | 100.00 | % | ||||||
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108 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Director and Officer Information
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 of the Company (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 ETF, Inc. and a Trustee of iShares U.S. ETF Trust and, as a result, oversees a total of 298 funds (as of August 31, 2013) 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 (56) | Director (since 2009). | President and Director, BlackRock, Inc. (since 2006); 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 2006); Trustee of iShares Trust (since 2009); Director of iShares MSCI Russia Capped ETF, 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 ETF, 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 Company due to his affiliations with BlackRock, Inc. |
b | Michael Latham is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BlackRock, Inc. and its affiliates. |
DIRECTORAND OFFICER INFORMATION | 109 |
Table of Contents
Director and Officer Information (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 (58) | 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 Paine Webber Inc.) (2003-2005) 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Independent Chairman of iShares, Trust, iShares MSCI Russia Capped ETF, Inc. and iShares U.S. ETF Trust (since 2012). | |||
Cecilia H. Herbert (64) | Director (since 2005); Nominating and Governance Committee Chair and Equity Plus Committee Chair (since 2012). | Trustee and Member (since 2011) of the Investment Committee, WNET, the New York public broadcasting company; Director (since 1998) and President (2007-2011) of the Board of Directors, Catholic Charities CYO; Trustee (2002-2011) and Chair of the Finance and Investment Committee (2006-2010), the Thacher School; 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of Forward Funds (34 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 ETF, 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 (2 portfolios) (since 2002). | |||
John E. Kerrigan (58) | 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). |
110 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Director and Officer Information (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 (52) | 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). | |||
George G.C. Parker (74) | 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 2000); Director of iShares MSCI Russia Capped ETF, 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 (49) | 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 (2007-2008). | Trustee of iShares Trust (since 2011); Director of iShares MSCI Russia Capped ETF, Inc. (since 2011); Trustee of iShares U.S. ETF Trust (since 2011). |
DIRECTORAND OFFICER INFORMATION | 111 |
Table of Contents
Director and Officer Information (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 of Legal & Compliance, BlackRock (since 2006); Director of Legal & Compliance, BlackRock (2004-2006). | ||
Eilleen M. Clavere (61) | Secretary (since 2007). | Director of Global Fund Administration, BlackRock (since 2009); Director of Legal Administration of Intermediary Investor Business, BGI (2006-2009); Legal Counsel and Vice President of Atlas Funds, Atlas Advisers, Inc. and Atlas Securities, Inc. (2005-2006); Counsel of Kirkpatrick & Lockhart LLP (2001-2005). | ||
Jack Gee (53) | Treasurer and Chief Financial Officer | 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). | ||
Scott Radell (44) | Executive Vice President (since 2012). | Managing Director, BlackRock (since 2009); Head of Portfolio Solutions, BlackRock (since 2009); Head of Portfolio Solutions, BGI (2007-2009); Credit Portfolio Manager, BGI (2005-2007); Credit Research Analyst, BGI (2003-2005). | ||
Amy Schioldager (50) | Executive Vice President (since 2007). | Senior Managing Director, BlackRock (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008); Head of Domestic Equity Portfolio Management, BGI (2001-2006). | ||
Ira P. Shapiro (50) | Vice President (since 2007). | Managing Director, BlackRock (since 2009); Head of Strategic Product Initiatives for iShares (since 2012); Chief Legal Officer, Exchange-Traded Fund Complex (2007-2012); Associate General Counsel, BGI (2004-2009). |
112 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Notes:
NOTES | 113 |
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Notes:
114 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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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.
©2013 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc. or its subsidiaries. All other marks are the property of their respective owners.
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iS-AR-83-0813
Table of Contents
AUGUST 31, 2013
2013 ANNUAL REPORT
| ![]() |
iShares, Inc.
Ø | iShares MSCI Brazil Capped ETF | EWZ | NYSE Arca |
Ø | iShares MSCI Canada ETF | EWC | NYSE Arca |
Ø | iShares MSCI Chile Capped ETF | ECH | NYSE Arca |
Ø | iShares MSCI Colombia Capped ETF | ICOL | NYSE Arca |
Ø | iShares MSCI Israel Capped ETF | EIS | NYSE Arca |
Ø | iShares MSCI Mexico Capped ETF | EWW | NYSE Arca |
Ø | iShares MSCI South Africa ETF | EZA | NYSE Arca |
Ø | iShares MSCI Turkey ETF | TUR | NYSE Arca |
Ø | iShares MSCI USA ETF | EUSA | NYSE Arca |
Table of Contents
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Table of Contents
Management’s Discussion of Fund Performance
iSHARES®, INC.
GLOBAL MARKET OVERVIEW
Global equities delivered mixed performance for the 12-month period ended August 31, 2013 (the “reporting period”), as ongoing concerns about sovereign debt issues in Europe and slowing economic growth in China kept volatility levels elevated. Investors largely dismissed the negative news for much of the reporting period, choosing to focus on the potential effect of unprecedented intervention levels from central banks around the world.
Early in the reporting period, the U.S. Federal Reserve Bank (the “Fed”) responded to tepid U.S. economic data by launching its third quantitative easing program (“QE3”). This program, in addition to relatively solid corporate earnings and a rebound in the housing market, helped support stocks in the U.S. Later in the reporting period, the Fed’s comments about “tapering” QE3 upset markets. After the Fed toned down the discussion in July 2013, U.S. stock markets rallied and finished the reporting period with solid gains.
Issues surrounding economic conditions in Europe resurfaced throughout the reporting period. At the beginning of the reporting period, the European Central Bank’s pledge to protect the euro and support bond markets in the euro zone helped European markets rebound in late 2012 and into early 2013. In the first quarter of 2013, an economic crisis on the island of Cyprus drove concerns about the health of the European financial system, until the announcement of a bailout plan alleviated worries. European stocks struggled again as the prospect of slow global economic growth materialized. Austerity programs intended to reduce national debts were blamed for impeding growth in the region. In May 2013, the European Union announced it would ease its austerity measures, giving some countries additional time to reach their respective deficit reduction targets. Also in May 2013, the European Central Bank cut its benchmark interest rate. Despite these actions, many countries in the euro zone remained in or near recession. For the second quarter of 2013, though, the euro zone as a whole experienced gross domestic product (“GDP”) growth of 0.30% — its first positive quarter since 2011.
The Bank of Japan took decisive action to improve economic conditions through quantitative easing, instituting a plan in early 2013 to purchase 7.5 trillion yen in bonds per month in order to double the country’s monetary base in two years. Although the country’s GDP growth for the first quarter of 2013 was stronger than expected, industrial production continued to decline. A declining yen helped export levels, although export growth fell short of expectations. In Japan, personal spending improved throughout the course of the reporting period, although consumer confidence weakened in the final months of the reporting period.
Emerging market countries generally lagged developed markets. During the reporting period, economic growth slowed in China and Latin America. Commodities prices declined around the world during the reporting period, hurting many commodities-driven emerging market countries. Late in the reporting period, concern that the Fed would begin to taper its bond-buying program led investors to abandon emerging market holdings, including both bonds and stocks. In the past several years, emerging markets have benefited from investors seeking higher yielding alternatives in a low-interest rate environment. Similarly, frontier markets delivered mixed results as some struggled with a decline in commodities prices and slowing economic growth, as well as investors’ retreat from frontier market holdings.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 5 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI BRAZIL CAPPED ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | (16.85)% | (17.20)% | (16.24)% | (16.85)% | (17.20)% | (16.24)% | ||||||||||||||||||||
5 Years | (6.72)% | (6.84)% | (6.31)% | (29.39)% | (29.84)% | (27.82)% | ||||||||||||||||||||
10 Years | 16.68% | 16.60% | 17.70% | 367.73% | 364.53% | 410.20% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
Index performance through February 11, 2013 reflects the performance of the MSCI Brazil IndexSM. Index performance beginning on February 12, 2013 reflects the performance of the MSCI Brazil 25/50 Index.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 24 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 782.30 | $ | 2.74 | $ | 1,000.00 | $ | 1,022.10 | $ | 3.11 | 0.61% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 24 for more information. |
6 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI BRAZIL CAPPED ETF
The iShares MSCI Brazil Capped ETF (the “Fund”), formerly the iShares MSCI Brazil Capped Index Fund, seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Brazil 25/50 IndexSM (the “Index”). The Index is a free-float adjusted market capitalization-weighted index and 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 reporting period ended August 31, 2013, the total return for the Fund was -16.85%, net of fees, while the total return for the Index was -16.24%.
The Brazilian equity market, as represented by the Index, declined for the reporting period and trailed the performance of broader international equity markets.
Economic activity slowed in Brazil early in the reporting period, as measured by an annual GDP growth rate of just 0.5% in the second half of 2012, but improved as the reporting period progressed. For the second quarter of 2013, economic activity, as measured by annual GDP growth, expanded at a 3.3% pace. The growth rate, which exceeded expectations, was Brazil’s strongest in two years.
As a key exporter, Brazil’s economy is sensitive to that of its main export partners, which include China and the U.S. Slowing economic growth in China and uneven conditions in the U.S. curbed demand for Brazil’s exports for the first half of the reporting period, although export levels increased throughout the second half of the reporting period. The country’s Consumer Price Index continued its upward trajectory throughout the reporting period, reaching an all-time high in August 2013. Consumer spending levels climbed during the reporting period, reaching an all-time high in May 2013.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector | Percentage of Net Assets |
Financial | 25.81 | % | ||
Consumer Non-Cyclical | 24.12 | |||
Basic Materials | 18.61 | |||
Energy | 11.49 | |||
Utilities | 6.33 | |||
Consumer Cyclical | 3.95 | |||
Industrial | 3.24 | |||
Communications | 3.22 | |||
Diversified | 1.86 | |||
Technology | 0.62 | |||
Short-Term and Other Net Assets | 0.75 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Itau Unibanco Holding SA (Preferred) | 7.22 | % | ||
Petroleo Brasileiro SA (Preferred) | 7.01 | |||
Vale SA Class A (Preferred) | 5.95 | |||
Companhia de Bebidas das Americas (Preferred) | 5.76 | |||
Banco Bradesco SA (Preferred) | 5.69 | |||
Petroleo Brasileiro SA | 4.47 | |||
BRF–Brasil Foods SA | 4.24 | |||
Vale SA | 4.00 | |||
Cielo SA | 2.52 | |||
BM&F Bovespa SA | 2.48 | |||
|
| |||
TOTAL | 49.34 | % | ||
|
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MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 7 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI CANADA ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | 1.84% | 2.06% | 2.02% | 1.84% | 2.06% | 2.02% | ||||||||||||||||||||
5 Years | (0.13)% | (0.07)% | 0.09% | (0.65)% | (0.37)% | 0.43% | ||||||||||||||||||||
10 Years | 10.16% | 10.13% | 10.40% | 163.10% | 162.55% | 169.04% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 24 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 973.60 | $ | 2.49 | $ | 1,000.00 | $ | 1,022.70 | $ | 2.55 | 0.50% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 24 for more information. |
8 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI CANADA ETF
The iShares MSCI Canada ETF (the “Fund”), formerly the iShares MSCI Canada Index 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 reporting period ended August 31, 2013, the total return for the Fund was 1.84%, net of fees, while the total return for the Index was 2.02%.
The Canadian equity market, as represented by the Index, delivered modestly positive results for the reporting period and outpaced the performance of broader international markets.
As a key exporter, Canada relies on exports for approximately 45% of its GDP. Export activity was weak throughout the reporting period amid tepid global demand for metals and mineral products. Although the country’s trade deficit improved modestly late in the reporting period, the reduction was due to lower import levels, rather than an increase in export levels, reflecting a decline in domestic demand.
Canada’s economy expanded at an annual rate of 1.4% in the second quarter of 2013, roughly in line with the 1.36% annual growth rate in the first quarter of 2013. During June 2013, Canada’s economy shrank as flooding in Alberta shut down the oil industry capital of Calgary for several days. Also in June 2013, a construction worker strike in Quebec resulted in a 1.9% decline in construction activity and a 7.3% drop in non-residential construction. Partially offsetting these losses, consumer spending rose 0.9% in the second quarter of 2013, to its highest level in more than two years.
Sector performance was mixed during the reporting period. The financials sector, the largest sector at an average of 35% of the Index, achieved positive results and contributed significantly to Index returns. Although the health care sector accounted for only 3% of the Index on average, it delivered robust absolute returns, resulting in a meaningful contribution to Index performance. The materials sector, which represented an average of 16% of the Index during the reporting period, declined and detracted substantially from Index results. The energy sector accounted for 26% of the Index on average during the reporting period, and detracted moderately.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector* | Percentage of Net Assets |
Financial | 36.90 | % | ||
Energy | 25.11 | |||
Basic Materials | 13.20 | |||
Industrial | 6.48 | |||
Consumer Non-Cyclical | 5.34 | |||
Consumer Cyclical | 5.12 | |||
Communications | 4.52 | |||
Utilities | 1.69 | |||
Technology | 1.29 | |||
Short-Term and Other Net Assets | 0.35 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Royal Bank of Canada | 7.32 | % | ||
Toronto-Dominion Bank (The) | 6.47 | |||
Bank of Nova Scotia | 5.48 | |||
Suncor Energy Inc. | 4.18 | |||
Bank of Montreal | 3.35 | |||
Canadian National Railway Co. | 3.27 | |||
Canadian Natural Resources Ltd. | 2.74 | |||
Enbridge Inc. | 2.64 | |||
Canadian Imperial Bank of Commerce | 2.57 | |||
TransCanada Corp. | 2.54 | |||
|
| |||
TOTAL | 40.56 | % | ||
|
|
* | 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. |
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 9 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI CHILE CAPPED ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | (19.87)% | (20.26)% | (19.45)% | (19.87)% | (20.26)% | (19.45)% | ||||||||||||||||||||
5 Years | 2.64% | 2.70% | 3.50% | 13.92% | 14.27% | 18.78% | ||||||||||||||||||||
Since Inception | 0.97% | 0.83% | 1.73% | 5.77% | 4.93% | 10.44% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
Index performance through February 11, 2013 reflects the performance of the MSCI Chile Investable Market IndexSM. Index performance beginning on February 12, 2013 reflects the performance of the MSCI Chile IMI 25/50 Index.
The inception date of the Fund was 11/12/07. The first day of secondary market trading was 11/16/07.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 24 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 726.00 | $ | 2.65 | $ | 1,000.00 | $ | 1,022.10 | $ | 3.11 | 0.61% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 24 for more information. |
10 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI CHILE CAPPED ETF
The iShares MSCI Chile Capped ETF (the “Fund”), formerly the iShares MSCI Chile Capped Investable Market Index Fund, seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Chile IMI 25/50 IndexSM (the “Index”). The Index is a free-float adjusted market capitalization-weighted index 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 reporting period ended August 31, 2013, the total return for the Fund was -19.87%, net of fees, while the total return for the Index was -19.45%.
The Chilean equity market, as represented by the Index, declined for the reporting period and lagged the performance of broader international equity markets.
One of the stronger economies in Latin America, Chile’s economy expanded during the reporting period. For the second quarter of 2013, however, the expansion cooled to an annual growth rate of 4.1%, its slowest pace in seven quarters. Key sectors of the economy, notably manufacturing and agriculture, improved, while fishing, restaurants and hotels activities contracted.
Chile is the world’s largest producer of copper, with copper representing about 15% of GDP. The country’s economy relies heavily on copper exports, with China, the U.S. and Japan as its key trading partners. Weak economic conditions in China and Japan, as well as uneven economic growth in the U.S., tempered demand for copper during much of the reporting period. As the reporting period progressed, though, copper export levels improved, increasing to $3.35 billion in July 2013 versus $3.15 billion in July 2012. Even as overall export levels increased, however, so did imports, resulting in a $254 million trade deficit in July 2013.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector | Percentage of Net Assets |
Utilities | 25.78 | % | ||
Financial | 16.32 | |||
Consumer Cyclical | 16.00 | |||
Consumer Non-Cyclical | 13.49 | |||
Basic Materials | 10.87 | |||
Diversified | 9.09 | |||
Communications | 3.13 | |||
Industrial | 3.09 | |||
Technology | 2.15 | |||
Short-Term and Other Net Assets | 0.08 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
S.A.C.I. Falabella SA | 10.09 | % | ||
Enersis SA | 8.67 | |||
Empresas Copec SA | 8.43 | |||
Cencosud SA | 6.38 | |||
Empresa Nacional de Electricidad SA | 6.12 | |||
Banco Santander (Chile) SA | 5.00 | |||
Empresas CMPC SA | 4.49 | |||
LATAM Airlines Group SA | 4.44 | |||
Banco de Chile | 4.34 | |||
Colbun SA | 3.42 | |||
|
| |||
TOTAL | 61.38 | % | ||
|
|
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 11 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI COLOMBIA CAPPED ETF
Performance as of August 31, 2013
Cumulative Total Returns | ||||||||||||
NAV | MARKET | INDEX | ||||||||||
Since Inception | 2.77% | 2.57% | 2.53% |
The inception date of the Fund was 6/18/13. The first day of secondary market trading was 6/20/13.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 24 for more information.
For the fiscal period ended 8/31/13, the Fund did not have six months of performance and therefore line graphs are not presented.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (6/18/13)a | Ending Account Value (8/31/13) | Expenses Paid During Period b | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period b | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,027.70 | $ | 1.25 | $ | 1,000.00 | $ | 1,022.10 | $ | 3.11 | 0.61% |
a | The beginning of the period (commencement of operations) is June 18, 2013. |
b | 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 (74 days for actual and 184 days for hypothetical expenses) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 24 for more information. |
12 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI COLOMBIA CAPPED ETF
The iShares MSCI Colombia Capped ETF (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI All Colombia Capped IndexSM (the “Index”). The Index is a free-float adjusted market capitalization-weighted index designed to measure broad-based equity market performance in Colombia. 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 June 18, 2013 (inception date of the Fund) through August 31, 2013 (the “reporting period”), the total return for the Fund was 2.77%, net of fees, while the total return for the Index was 2.53%.
The Colombian equity market delivered slight gains for the short reporting period.
Prior to the beginning of the reporting period, Colombia reported first quarter 2013 annual GDP growth of 2.8% amid soft international demand for exports. In response to the poor GDP figures, the country lowered its target for economic growth for 2013, from 4.8% to 4.5%.
During the reporting period, Colombia’s economy, which is driven by oil and mining, was hurt by a decline in overseas demand as the global economic slowdown pushed down commodities prices. A series of labor disputes in the country’s mining industry added to the problem of tepid external demand. The country’s export levels and factory output were also hindered by a strong peso, which made its goods and services more expensive to foreigners. A stimulus package that was announced in April 2013 and that included accelerated spending and assistance to Colombia’s construction sector appeared not to have provided the desired boost to the economy.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector | Percentage of Net Assets |
Financial | 32.87 | % | ||
Energy | 30.59 | |||
Utilities | 17.26 | |||
Industrial | 9.80 | |||
Consumer Non-Cyclical | 4.74 | |||
Consumer Cyclical | 4.40 | |||
Short-Term and Other Net Assets | 0.34 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Ecopetrol SA | 17.76 | % | ||
Bancolombia SA (Preferred) | 6.58 | |||
Pacific Rubiales Energy Corp. | 6.55 | |||
Grupo de Inversiones Suramericana SA | 6.21 | |||
Corporacion Financiera Colombiana SA | 4.89 | |||
Interconexion Electrica SA ESP | 4.89 | |||
Isagen SA ESP | 4.80 | |||
Grupo Nutresa SA | 4.74 | |||
Cemex Latam Holdings SA | 4.73 | |||
Almacenes Exito SA | 4.40 | |||
|
| |||
TOTAL | 65.55 | % | ||
|
|
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 13 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI ISRAEL CAPPED ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | 17.82% | 16.88% | 17.28% | 17.82% | 16.88% | 17.28% | ||||||||||||||||||||
5 Years | 0.32% | 0.48% | 0.38% | 1.59% | 2.43% | 1.90% | ||||||||||||||||||||
Since Inception | (0.35)% | (0.56)% | 0.08% | (1.87)% | (3.00)% | 0.43% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was 3/26/08. The first day of secondary market trading was 3/28/08.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 24 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 995.50 | $ | 3.07 | $ | 1,000.00 | $ | 1,022.10 | $ | 3.11 | 0.61% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 24 for more information. |
14 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI ISRAEL CAPPED ETF
The iShares MSCI Israel Capped ETF (the “Fund”), formerly the iShares MSCI Israel Capped Investable Market Index 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-weighted 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 reporting period ended August 31, 2013, the total return for the Fund was 17.82%, net of fees, while the total return for the Index was 17.28%.
The Israeli equity market delivered positive results for the reporting period, outpacing the performance of broader international markets.
Israel enjoyed a relatively healthy economic environment, as measured by annual GDP growth, although growth cooled modestly from the previous reporting period. Annual GDP was reported at 3.3% for 2012, its slowest pace in three years. For the second quarter of 2013, annual GDP growth soared unexpectedly to 5.1%. Key drivers were strong private consumption, which grew 6.7% for the second quarter of 2013 and government spending, which increased 8.3%. The underlying cause of the sudden jump in GDP was likely the Value Added Tax, which was set to be raised by 1% in June 2013. In anticipation of the tax increase, consumers rushed to buy larger ticket items before June. As a result, spending on durable goods grew 10.2% in the first half of 2013, compared to a decline of 6.6% in the second half of 2012.
Export levels in Israel grew through much of the reporting period, although they were lower in the final two months of the reporting period. The unemployment rate fell from 6.8% at the beginning of the reporting period to 6.3% in July 2013. A net lender of debt, Israel recorded a government debt to GDP ratio of 79.5% for 2012, a modest increase over 2011 but below that of many countries.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector | Percentage of Net Assets |
Financial | 37.91 | % | ||
Consumer Non-Cyclical | 29.46 | |||
Communications | 13.58 | |||
Basic Materials | 7.61 | |||
Industrial | 4.23 | |||
Energy | 3.70 | |||
Consumer Cyclical | 1.34 | |||
Diversified | 0.87 | |||
Technology | 0.81 | |||
Short-Term and Other Net Assets | 0.49 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Teva Pharmaceutical Industries Ltd. | 24.12 | % | ||
Bank Hapoalim BM | 9.67 | |||
Bank Leumi le-Israel BM | 8.13 | |||
Israel Chemicals Ltd. | 6.12 | |||
Bezeq The Israel Telecommunication Corp. Ltd. | 5.09 | |||
NICE Systems Ltd. | 4.33 | |||
Mizrahi Tefahot Bank Ltd. | 2.70 | |||
Israel Discount Bank Ltd. Class A | 2.48 | |||
Israel Corp. Ltd. (The) | 2.24 | |||
Delek Group Ltd. (The) | 2.23 | |||
|
| |||
TOTAL | 67.11 | % | ||
|
|
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 15 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI MEXICO CAPPED ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | 2.53% | 1.35% | 2.41% | 2.53% | 1.35% | 2.41% | ||||||||||||||||||||
5 Years | 5.06% | 4.92% | 4.68% | 27.97% | 27.15% | 25.72% | ||||||||||||||||||||
10 Years | 16.89% | 16.84% | 16.36% | 376.03% | 374.07% | 355.16% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
Index performance through November 30, 2007 reflects the performance of the MSCI Mexico IndexSM. Index performance beginning on December 1, 2007 through February 11, 2013 reflects the performance of the MSCI Mexico Investable Market IndexSM. Index performance beginning on February 12, 2013 reflects the performance of the MSCI Mexico IMI 25/50 Index.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 24 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 873.60 | $ | 2.36 | $ | 1,000.00 | $ | 1,022.70 | $ | 2.55 | 0.50% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 24 for more information. |
16 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI MEXICO CAPPED ETF
The iShares MSCI Mexico Capped ETF (the “Fund”), formerly the iShares MSCI Mexico Capped Investable Market Index Fund, seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Mexico IMI 25/50 IndexSM (the “Index”). The Index is a free-float adjusted market capitalization-weighted index and 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 reporting period ended August 31, 2013, the total return for the Fund was 2.53%, net of fees, while the total return for the Index was 2.41%.
The Mexican equity market delivered modestly positive results for the reporting period as its economy gave indications of cooling.
After growing at a strong pace since 2010, the Mexican economy appeared to have slowed during the course of the reporting period. Mexico’s economy achieved economic growth, as evidenced by annual GDP growth, of 3.1% in the third quarter of 2012 and 3.3% in the fourth quarter of 2012. The Mexican economy grew at annual rate of only 0.6% and 1.5% in the first and second quarters of 2013, respectively. The central bank cut its growth forecast for 2013 from a range of 3% to 4% to a new range of 2% to 3%.
The largest exporter in Latin America, Mexico exports more than 80% of its goods to the U.S. and Canada. For the first six months of 2013, exports increased a modest 0.6%, the slowest first half of a year since 2009 and a significant drop from the 7% increase in exports during the first six months of 2012. Industrial production declined 0.6% in the second quarter of 2013, and construction contracted 4%.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector | Percentage of Net Assets |
Communications | 22.46 | % | ||
Financial | 20.05 | |||
Consumer Non-Cyclical | 18.45 | |||
Basic Materials | 11.67 | |||
Industrial | 10.76 | |||
Consumer Cyclical | 10.74 | |||
Diversified | 5.93 | |||
Short-Term and Other Net Assets | (0.06 | ) | ||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
America Movil SAB de CV Series L | 16.36 | % | ||
Fomento Economico Mexicano SAB de CV BD Units | 7.59 | |||
Grupo Financiero Banorte SAB de CV Series O | 5.96 | |||
Grupo Televisa SAB de CV CPO | 4.86 | |||
Cemex SAB de CV CPO | 4.74 | |||
Wal-Mart de Mexico SAB de CV Series V | 4.73 | |||
Grupo Mexico SAB de CV Series B | 4.27 | |||
Alfa SAB de CV Series A | 4.09 | |||
Grupo Financiero Inbursa SAB de CV Series O | 2.99 | |||
Grupo Financiero Santander Mexico SAB de CV Series B | 2.92 | |||
|
| |||
TOTAL | 58.51 | % | ||
|
|
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 17 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI SOUTH AFRICA ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | (6.35)% | (7.51)% | (5.74)% | (6.35)% | (7.51)% | (5.74)% | ||||||||||||||||||||
5 Years | 4.53% | 4.60% | 5.50% | 24.82% | 25.21% | 30.67% | ||||||||||||||||||||
10 Years | 12.96% | 12.90% | 13.91% | 238.16% | 236.57% | 267.95% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 24 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 918.20 | $ | 2.95 | $ | 1,000.00 | $ | 1,022.10 | $ | 3.11 | 0.61% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 24 for more information. |
18 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI SOUTH AFRICA ETF
The iShares MSCI South Africa ETF (the “Fund”), formerly the iShares MSCI South Africa Index 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 reporting period ended August 31, 2013, the total return for the Fund was -6.35%, net of fees, while the total return for the Index was -5.74%.
The South African equity market declined for the reporting period, lagging broader international markets.
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 GDP growth, grew at a tepid pace. For the second quarter of 2013, annual GDP expanded by 2.0%, down from 2.3% in the third quarter of 2012.
Underlying the mediocre growth, the country’s mining industry experienced turbulence as it continued to struggle with strikes and global economic weakness. In the second quarter of 2013, the mining sector contracted an annualized rate of 5.7%. Although manufacturing levels increased 11.5% during the second quarter of 2013, the strong numbers were due in part to a rebound from the first quarter, when plant maintenance and fire-related stoppages crimped output.
Sector performance was mixed during the reporting period. The consumer discretionary sector, lifted by rising consumer spending levels through much of the reporting period, delivered gains and made the most significant sector contribution to Index returns. The energy sector also contributed meaningfully. The materials sector, struggling with difficulties in the mining industry and a decline in commodity prices, detracted significantly from Index results. The financials sector, which comprised an average of 27% of the Index during the reporting period, detracted meaningfully from Index results, as did the consumer staples sector.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector* | Percentage of Net Assets |
Communications | 26.37 | % | ||
Financial | 22.88 | |||
Basic Materials | 21.18 | |||
Consumer Non-Cyclical | 13.72 | |||
Consumer Cyclical | 7.59 | |||
Diversified | 5.62 | |||
Industrial | 1.25 | |||
Energy | 0.88 | |||
Technology | 0.47 | |||
Short-Term and Other Net Assets | 0.04 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Naspers Ltd. Class N | 12.68 | % | ||
MTN Group Ltd. | 12.05 | |||
Sasol Ltd. | 10.06 | |||
Standard Bank Group Ltd. | 5.26 | |||
FirstRand Ltd. | 3.53 | |||
Remgro Ltd. | 3.41 | |||
Sanlam Ltd. | 3.11 | |||
Bidvest Group Ltd. | 2.82 | |||
Aspen Pharmacare Holdings Ltd. | 2.65 | |||
Shoprite Holdings Ltd. | 2.61 | |||
|
| |||
TOTAL | 58.18 | % | ||
|
|
* | 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. |
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 19 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI TURKEY ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | (11.05)% | (11.56)% | (10.58)% | (11.05)% | (11.56)% | (10.58)% | ||||||||||||||||||||
5 Years | 1.01% | 0.76% | 1.34% | 5.13% | 3.84% | 6.89% | ||||||||||||||||||||
Since Inception | 1.69% | 1.47% | 2.06% | 9.56% | 8.28% | 11.72% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was 3/26/08. The first day of secondary market trading was 3/28/08.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 24 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 752.70 | $ | 2.69 | $ | 1,000.00 | $ | 1,022.10 | $ | 3.11 | 0.61% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 24 for more information. |
20 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI TURKEY ETF
The iShares MSCI Turkey ETF (the “Fund”), formerly the iShares MSCI Turkey Investable Market Index 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-weighted 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 reporting period ended August 31, 2013, the total return for the Fund was -11.05%, net of fees, while the total return for the Index was -10.58%.
The Turkish equity market delivered negative results for the reporting period, lagging the performance of broader international markets.
Turkey’s economy continued to slow through the fourth quarter of 2012, when the annual GDP growth rate of 1.4% represented the country’s seventh consecutive quarterly decline. In the first half of 2013, however, economic activity accelerated, evidenced by annual GDP growth rates of 2.9% and 4.4% for the first and second quarters of 2013, respectively.
In recent reporting periods, Turkey’s export levels to Europe were crimped by the sovereign debt crisis and recession throughout the euro zone, and its exports to the Middle East, its second-largest trading partner, were threatened when conflict arose in Syria. Turkey overcame those hurdles by focusing on the markets of Northern Africa, so that overall export levels did not experience the sharp decline that they might otherwise have. During the reporting period, however, turmoil in Egypt disrupted Turkey’s trade route, resulting in a nearly 30% decline in exports shipped through Egypt’s ports. Export of gold to Iran represented a critical component of Turkey’s export market in 2012 as Iran began acquiring large amounts of gold. U.S. sanctions curtailed the gold trade temporarily; but exports of gold to Iran resumed in the first quarter of 2013.
Sector performance was negative during the reporting period. The financials sector, which represented 50% of the Index on average, was the most significant detractor from Index gains by far. The materials, consumer staples and industrials sectors also detracted meaningfully from Index performance.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector* | Percentage of Net Assets |
Financial | 42.70 | % | ||
Consumer Non-Cyclical | 12.71 | |||
Diversified | 10.94 | |||
Consumer Cyclical | 9.90 | |||
Communications | 8.23 | |||
Basic Materials | 5.95 | |||
Industrial | 5.30 | |||
Energy | 3.59 | |||
Utilities | 0.58 | |||
Short-Term and Other Net Assets | 0.10 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Turkiye Garanti Bankasi AS | 11.85 | % | ||
Akbank TAS | 8.90 | |||
Turkiye Halk Bankasi AS | 5.92 | |||
BIM Birlesik Magazalar AS | 5.82 | |||
Turkcell Iletisim Hizmetleri AS | 5.72 | |||
Turkiye Is Bankasi AS Class C | 5.49 | |||
Haci Omer Sabanci Holding AS | 5.17 | |||
KOC Holding AS | 3.81 | |||
Turkiye Petrol Rafinerileri AS | 3.59 | |||
Anadolu Efes Biracilik ve Malt Sanayii AS | 3.57 | |||
|
| |||
TOTAL | 59.84 | % | ||
|
|
* | 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. |
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 21 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI USA ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | 18.85% | 18.74% | 19.06% | 18.85% | 18.74% | 19.06% | ||||||||||||||||||||
Since Inception | 13.06% | 13.05% | 13.28% | 50.41% | 50.37% | 51.29% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was 5/5/10. The first day of secondary market trading was 5/7/10.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 24 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,090.10 | $ | 0.79 | $ | 1,000.00 | $ | 1,024.40 | $ | 0.77 | 0.15% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 24 for more information. |
22 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI USA ETF
The iShares MSCI USA ETF (the “Fund”), formerly the iShares MSCI USA Index 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 reporting period ended August 31, 2013, the total return for the Fund was 18.85%, net of fees, while the total return for the Index was 19.06%.
The U.S. equity market delivered positive results for the reporting period and outpaced the performance of broader international markets.
Fed activities and announcements on monetary policy had a strong impact on U.S. market behavior. Early in the reporting period, the Fed launched its QE3 program, which it later expanded. Both actions helped lift stock prices. Markets sank when the Fed suggested it would reduce its QE3 measures if the economy continued to improve. The Fed then toned down its tapering talk in July, when stocks rebounded. The improved housing market and decline in unemployment levels also contributed to stock market behavior. Economic activity, as measured by annual GDP, grew 2.5% in the second quarter of 2013, over the previous quarter.
Within the Index, every sector contributed positively for the reporting period. The financials sector, which represented 16% of the Index on average, contributed significantly to Index results. The consumer discretionary and health care sectors also added meaningfully, as did the industrials sector. The information technology sector, which was the largest sector, representing an average of 19% of the Index during the reporting period, achieved modest gains and contributed moderately to Index performance.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector* | Percentage of Net Assets |
Consumer Non-Cyclical | 21.96 | % | ||
Financial | 16.37 | |||
Technology | 12.61 | |||
Communications | 11.67 | |||
Energy | 10.65 | |||
Industrial | 10.37 | |||
Consumer Cyclical | 9.92 | |||
Utilities | 3.12 | |||
Basic Materials | 3.03 | |||
Diversified | 0.05 | |||
Short-Term and Other Net Assets | 0.25 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Apple Inc. | 2.97 | % | ||
Exxon Mobil Corp. | 2.52 | |||
Microsoft Corp. | 1.72 | |||
Johnson & Johnson | 1.58 | |||
General Electric Co. | 1.56 | |||
Chevron Corp. | 1.52 | |||
Google Inc. Class A | 1.49 | |||
Procter & Gamble Co. (The) | 1.39 | |||
Wells Fargo & Co. | 1.34 | |||
International Business Machines Corp. | 1.25 | |||
|
| |||
TOTAL | 17.34 | % | ||
|
|
* | 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. |
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 23 |
Table of Contents
Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.iShares.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are redeemed or sold in the market. Performance for certain funds may reflect a waiver of a portion of investment management fees. Without such waiver, performance would have been lower.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The 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 a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of a fund may not have traded in the secondary market until after the fund’s inception, for the period from inception to the first day of secondary trading, 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 at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. 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.
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 expense example, which is based on an investment of $1,000 invested on March 1, 2013 (or commencement of operations, as applicable) and held through August 31, 2013, 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.
Actual Expenses — The table provides information about actual account values and actual expenses. To estimate the expenses that you paid on your account 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 for your Fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Example for Comparison Purposes — The table also 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. 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 hypothetical examples are 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.
24 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI BRAZIL CAPPED ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 52.20% |
| |||||||
AEROSPACE & DEFENSE — 1.43% |
| |||||||
Embraer SA | 8,628,132 | $ | 71,066,307 | |||||
|
| |||||||
71,066,307 | ||||||||
AGRICULTURE — 1.21% |
| |||||||
Souza Cruz SA | 5,732,700 | 60,288,364 | ||||||
|
| |||||||
60,288,364 | ||||||||
BANKS — 4.35% |
| |||||||
Banco Bradesco SA | 5,251,720 | 69,810,850 | ||||||
Banco do Brasil SA | 8,388,197 | 81,334,318 | ||||||
Banco Santander (Brasil) SA Units | 11,460,241 | 65,757,062 | ||||||
|
| |||||||
216,902,230 | ||||||||
BEVERAGES — 0.43% |
| |||||||
Companhia de Bebidas das Americas | 612,500 | 21,560,660 | ||||||
|
| |||||||
21,560,660 | ||||||||
BUILDING MATERIALS — 0.11% |
| |||||||
Duratex SA | 1,093,310 | 5,555,773 | ||||||
|
| |||||||
5,555,773 | ||||||||
CHEMICALS — 2.07% |
| |||||||
Ultrapar Participacoes SA | 4,712,400 | 102,883,039 | ||||||
|
| |||||||
102,883,039 | ||||||||
COMMERCIAL SERVICES — 7.90% |
| |||||||
Anhanguera Educacional Participacoes SA | 6,526,400 | 38,023,995 | ||||||
Arteris SA | 2,525,600 | 22,863,416 | ||||||
CCR SA | 12,715,000 | 92,800,459 | ||||||
Cielo SA | 5,105,832 | 125,455,009 | ||||||
EcoRodovias Infraestrutura e Logistica SA | 3,320,500 | 21,371,214 | ||||||
Estacio Participacoes SA | 2,042,100 | 15,084,669 | ||||||
Kroton Educacional SA | 1,784,800 | 24,025,576 | ||||||
Localiza Rent A Car SA | 2,368,340 | 31,033,902 | ||||||
Multiplus SA | 1,030,900 | 11,301,217 | ||||||
Qualicorp SAa | 1,464,500 | 11,489,536 | ||||||
|
| |||||||
393,448,993 | ||||||||
COSMETICS & PERSONAL CARE — 1.02% |
| |||||||
Natura Cosmeticos SA | 2,685,800 | 50,581,889 | ||||||
|
| |||||||
50,581,889 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 3.15% |
| |||||||
BM&F Bovespa SA | 25,103,100 | 123,445,751 | ||||||
CETIP SA-Mercados Organizados | 3,426,626 | 33,730,039 | ||||||
|
| |||||||
157,175,790 |
Security | Shares | Value | ||||||
ELECTRIC — 2.40% |
| |||||||
Centrais Eletricas Brasileiras SA | 4,840,299 | $ | 10,078,866 | |||||
CPFL Energia SA | 4,043,100 | 33,165,258 | ||||||
EDP Energias do Brasil SA | 4,493,300 | 20,224,765 | ||||||
MPX Energia SAa | 3,269,600 | 6,739,458 | ||||||
MPX Energia SA Newa | 848,199 | 1,837,550 | ||||||
Tractebel Energia SA | 2,703,600 | 38,895,810 | ||||||
Transmissora Alianca de Energia Eletrica SA | 921,700 | 8,529,951 | ||||||
|
| |||||||
119,471,658 | ||||||||
ENGINEERING & CONSTRUCTION — 0.59% |
| |||||||
Multiplan Empreendimentos Imobiliarios SA | 1,447,000 | 29,181,045 | ||||||
|
| |||||||
29,181,045 | ||||||||
FOOD — 5.70% |
| |||||||
BRF–Brasil Foods SA | 9,107,150 | 211,473,448 | ||||||
Cosan SA Industria e Comercio | 2,085,290 | 36,474,153 | ||||||
JBS SA | 8,719,222 | 26,995,404 | ||||||
M Dias Branco SA | 233,800 | 8,964,694 | ||||||
|
| |||||||
283,907,699 | ||||||||
FOREST PRODUCTS & PAPER — 0.99% |
| |||||||
Fibria Celulose SAa | 4,260,226 | 49,426,650 | ||||||
|
| |||||||
49,426,650 | ||||||||
HOME BUILDERS — 0.40% |
| |||||||
MRV Engenharia e Participacoes SA | 5,748,847 | 20,144,664 | ||||||
|
| |||||||
20,144,664 | ||||||||
INSURANCE — 2.08% |
| |||||||
BB Seguridade Participacoes SA | 6,709,100 | 54,300,473 | ||||||
Odontoprev SA | 1,419,200 | 5,259,613 | ||||||
Porto Seguro SA | 2,375,400 | 25,690,532 | ||||||
Sul America SA Units | 3,127,150 | 18,416,667 | ||||||
|
| |||||||
103,667,285 | ||||||||
IRON & STEEL — 4.82% |
| |||||||
Companhia Siderurgica Nacional SA | 11,574,354 | 40,996,155 | ||||||
Vale SA | 13,754,700 | 199,157,317 | ||||||
|
| |||||||
240,153,472 | ||||||||
MACHINERY — 0.50% |
| |||||||
WEG SA | 2,110,700 | 24,861,013 | ||||||
|
| |||||||
24,861,013 | ||||||||
OIL & GAS — 4.47% |
| |||||||
Petroleo Brasileiro SA | 33,178,344 | 222,891,702 | ||||||
|
| |||||||
222,891,702 |
SCHEDULESOF INVESTMENTS | 25 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI BRAZIL CAPPED ETF
August 31, 2013
Security | Shares | Value | ||||||
PHARMACEUTICALS — 0.80% |
| |||||||
Hypermarcas SA | 5,849,000 | $ | 39,957,833 | |||||
|
| |||||||
39,957,833 | ||||||||
REAL ESTATE — 2.12% |
| |||||||
BR Malls Participacoes SA | 6,244,700 | 47,547,144 | ||||||
BR Properties SA | 3,264,800 | 24,926,855 | ||||||
Cyrela Brazil Realty SA Empreendimentos e Participacoes | 5,018,300 | 33,185,123 | ||||||
|
| |||||||
105,659,122 | ||||||||
RETAIL — 1.59% |
| |||||||
Lojas Americanas SA | 1,318,400 | 7,537,042 | ||||||
Lojas Renner SA | 1,928,400 | 46,555,139 | ||||||
Raia Drogasil SA | 3,541,300 | 25,146,030 | ||||||
|
| |||||||
79,238,211 | ||||||||
SOFTWARE — 0.62% |
| |||||||
Totvs SA | 1,966,700 | 30,941,688 | ||||||
|
| |||||||
30,941,688 | ||||||||
TELECOMMUNICATIONS — 1.09% |
| |||||||
TIM Participacoes SA | 13,770,590 | 54,336,250 | ||||||
|
| |||||||
54,336,250 | ||||||||
TEXTILES — 0.62% |
| |||||||
Companhia Hering SA | 2,303,700 | 30,923,383 | ||||||
|
| |||||||
30,923,383 | ||||||||
TRANSPORTATION — 0.61% |
| |||||||
ALL-America Latina Logistica SA | 7,875,600 | 30,578,743 | ||||||
|
| |||||||
30,578,743 | ||||||||
WATER — 1.13% |
| |||||||
Companhia de Saneamento Basico do Estado de Sao Paulo | 5,211,200 | 42,944,392 | ||||||
Companhia de Saneamento de Minas Gerais SA | 1,117,300 | 13,512,693 | ||||||
|
| |||||||
56,457,085 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $2,194,738,898) |
| 2,601,260,548 | ||||||
PREFERRED STOCKS — 47.05% |
| |||||||
AUTO PARTS & EQUIPMENT — 0.49% |
| |||||||
Marcopolo SA | 8,752,300 | 24,446,943 | ||||||
|
| |||||||
24,446,943 | ||||||||
BANKS — 13.33% |
| |||||||
Banco Bradesco SA | 24,336,836 | 283,684,051 |
Security | Shares | Value | ||||||
Banco do Estado do Rio Grande do Sul SA Class B | 3,481,910 | $ | 20,916,067 | |||||
Itau Unibanco Holding SA | 29,490,310 | 359,758,956 | ||||||
|
| |||||||
664,359,074 | ||||||||
BEVERAGES — 5.76% |
| |||||||
Companhia de Bebidas das Americas | 8,196,732 | 286,878,724 | ||||||
|
| |||||||
286,878,724 | ||||||||
CHEMICALS — 0.50% |
| |||||||
Braskem SA Class A | 3,342,036 | 24,673,032 | ||||||
|
| |||||||
24,673,032 | ||||||||
ELECTRIC — 2.80% |
| |||||||
AES Tiete SA | 1,944,100 | 16,437,998 | ||||||
Centrais Eletricas Brasileiras SA Class B | 3,906,951 | 15,070,983 | ||||||
Companhia Energetica de Minas Gerais | 7,991,521 | 62,528,307 | ||||||
Companhia Energetica de Sao Paulo Class B | 2,611,870 | 23,347,736 | ||||||
Companhia Paranaense de Energia Class B | 1,835,200 | 22,040,619 | ||||||
|
| |||||||
139,425,643 | ||||||||
FOOD — 1.32% |
| |||||||
Companhia Brasileira de Distribuicao Grupo Pao de Acucar Class A | 1,594,264 | 65,535,705 | ||||||
|
| |||||||
65,535,705 | ||||||||
FOREST PRODUCTS & PAPER — 1.01% |
| |||||||
Klabin SA | 7,583,200 | 39,268,548 | ||||||
Suzano Papel e Celulose SA Class A | 2,781,700 | 10,999,487 | ||||||
|
| |||||||
50,268,035 | ||||||||
HOLDING COMPANIES-DIVERSIFIED — 2.64% |
| |||||||
Bradespar SA | 3,729,000 | 38,698,650 | ||||||
Itausa-Investimentos Itau SA | 26,414,041 | 92,891,377 | ||||||
|
| |||||||
131,590,027 | ||||||||
IRON & STEEL — 9.22% |
| |||||||
Gerdau SA | 12,655,546 | 91,301,789 | ||||||
Metalurgica Gerdau SA | 4,490,890 | 39,993,329 | ||||||
Usinas Siderurgicas de Minas Gerais SA Class A | 7,389,100 | 32,046,787 | ||||||
Vale SA Class A | 22,645,800 | 296,266,355 | ||||||
|
| |||||||
459,608,260 |
26 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI BRAZIL CAPPED ETF
August 31, 2013
Security | Shares | Value | ||||||
OIL & GAS — 7.01% |
| |||||||
Petroleo Brasileiro SA | 49,464,678 | $ | 349,573,696 | |||||
|
| |||||||
349,573,696 | ||||||||
RETAIL — 0.84% |
| |||||||
Lojas Americanas SA | 6,613,905 | 42,067,240 | ||||||
|
| |||||||
42,067,240 | ||||||||
TELECOMMUNICATIONS — 2.13% |
| |||||||
Oi SA | 14,003,093 | 20,852,662 | ||||||
Telefonica Brasil SA | 4,365,074 | 85,347,737 | ||||||
|
| |||||||
106,200,399 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $1,652,858,604) | 2,344,626,778 | |||||||
SHORT-TERM INVESTMENTS — 0.17% |
| |||||||
MONEY MARKET FUNDS — 0.17% |
| |||||||
BlackRock Cash Funds: Treasury, |
| |||||||
SL Agency Shares | ||||||||
0.00%b,c | 8,754,616 | 8,754,616 | ||||||
|
| |||||||
8,754,616 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $8,754,616) | 8,754,616 | |||||||
|
| |||||||
TOTAL INVESTMENTS |
| 4,954,641,942 | ||||||
Other Assets, Less Liabilities — 0.58% |
| 28,988,392 | ||||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 4,983,630,334 | |||||
|
|
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 | 27 |
Table of Contents
Schedule of Investments
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 99.65% |
| |||||||
AEROSPACE & DEFENSE — 0.23% |
| |||||||
CAE Inc. | 733,594 | $ | 7,830,381 | |||||
|
| |||||||
7,830,381 | ||||||||
APPAREL — 0.42% |
| |||||||
Gildan Activewear Inc. | 326,040 | 14,303,850 | ||||||
|
| |||||||
14,303,850 | ||||||||
AUTO PARTS & EQUIPMENT — 1.48% |
| |||||||
Magna International Inc. Class A | 662,112 | 50,814,852 | ||||||
|
| |||||||
50,814,852 | ||||||||
BANKS — 26.22% |
| |||||||
Bank of Montreal | 1,830,840 | 114,737,731 | ||||||
Bank of Nova Scotia | 3,385,800 | 187,761,209 | ||||||
Canadian Imperial Bank of Commerce | 1,129,854 | 88,104,835 | ||||||
National Bank of Canada | 458,964 | 35,498,031 | ||||||
Royal Bank of Canada | 4,080,516 | 251,043,216 | ||||||
Toronto-Dominion Bank (The) | 2,609,574 | 221,698,760 | ||||||
|
| |||||||
898,843,782 | ||||||||
CHEMICALS — 3.16% |
| |||||||
Agrium Inc. | 422,602 | 36,094,834 | ||||||
Potash Corp. of Saskatchewan Inc. | 2,444,054 | 72,170,141 | ||||||
|
| |||||||
108,264,975 | ||||||||
COMPUTERS — 0.96% |
| |||||||
Blackberry Ltd.a,b | 1,333,006 | 13,445,050 | ||||||
CGI Group Inc. Class Aa | 584,364 | 19,360,624 | ||||||
|
| |||||||
32,805,674 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 0.76% |
| |||||||
CI Financial Corp. | 440,158 | 13,372,892 | ||||||
IGM Financial Inc. | 284,658 | 12,752,808 | ||||||
|
| |||||||
26,125,700 | ||||||||
ELECTRIC — 1.03% |
| |||||||
ATCO Ltd. Class I NVS | 214,434 | 8,803,808 | ||||||
Fortis Inc. | 598,158 | 17,209,304 | ||||||
TransAlta Corp. | 739,860 | 9,496,355 | ||||||
|
| |||||||
35,509,467 | ||||||||
ENGINEERING & CONSTRUCTION — 0.47% |
| |||||||
SNC-Lavalin Group Inc. | 427,614 | 16,040,085 | ||||||
|
| |||||||
16,040,085 | ||||||||
FOOD — 1.89% |
| |||||||
Empire Co. Ltd. Class A | 85,272 | 6,553,229 | ||||||
George Weston Ltd. | 144,210 | 11,379,316 | ||||||
Loblaw Companies Ltd.b | 318,520 | 13,578,391 |
Security | Shares | Value | ||||||
Metro Inc. Class A | 268,356 | $ | 17,156,061 | |||||
Saputo Inc. | 361,152 | 16,008,595 | ||||||
|
| |||||||
64,675,592 | ||||||||
GAS — 0.66% |
| |||||||
Canadian Utilities Ltd. Class A | 326,040 | 10,560,988 | ||||||
Keyera Corp. | 220,704 | 12,057,230 | ||||||
|
| |||||||
22,618,218 | ||||||||
HAND & MACHINE TOOLS — 0.28% |
| |||||||
Finning International Inc. | 485,302 | 9,624,152 | ||||||
|
| |||||||
9,624,152 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 0.35% |
| |||||||
Onex Corp. | 257,070 | 12,206,499 | ||||||
|
| |||||||
12,206,499 | ||||||||
INSURANCE — 7.04% |
| |||||||
Great-West Lifeco Inc. | 847,704 | 23,906,715 | ||||||
Industrial Alliance Insurance and Financial Services Inc. | 275,880 | 10,808,722 | ||||||
Intact Financial Corp. | 376,200 | 21,743,212 | ||||||
Manulife Financial Corp.b | 5,177,766 | 84,766,346 | ||||||
Power Corp. of Canada | 986,902 | 27,027,774 | ||||||
Power Financial Corp. | 703,494 | 21,140,165 | ||||||
Sun Life Financial Inc. | 1,702,932 | 51,835,384 | ||||||
|
| |||||||
241,228,318 | ||||||||
MANUFACTURING — 0.54% |
| |||||||
Bombardier Inc. Class B | 4,069,246 | 18,477,285 | ||||||
|
| |||||||
18,477,285 | ||||||||
MEDIA — 1.77% |
| |||||||
Shaw Communications Inc. Class B | 1,085,964 | 26,127,374 | ||||||
Thomson Reuters Corp. | 1,054,614 | 34,510,641 | ||||||
|
| |||||||
60,638,015 | ||||||||
MINING — 10.04% |
| |||||||
Agnico-Eagle Mines Ltd. | 486,552 | 14,644,067 | ||||||
Barrick Gold Corp. | 2,827,770 | 53,906,962 | ||||||
Cameco Corp. | 1,117,318 | 21,236,350 | ||||||
Eldorado Gold Corp. | 2,018,948 | 17,167,470 | ||||||
First Quantum Minerals Ltd. | 1,585,060 | 26,279,931 | ||||||
Franco-Nevada Corp. | 415,074 | 18,867,000 | ||||||
Goldcorp Inc. | 2,293,574 | 67,617,927 | ||||||
Kinross Gold Corp. | 3,221,542 | 17,743,065 | ||||||
New Gold Inc.a,b | 1,418,275 | 9,545,694 | ||||||
Silver Wheaton Corp. | 1,001,946 | 26,442,484 | ||||||
Teck Resources Ltd. Class B | 1,612,644 | 40,541,586 | ||||||
Turquoise Hill Resources Ltd.a,b | 1,134,870 | 5,895,429 |
28 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI CANADA ETF
August 31, 2013
Security | Shares | Value | ||||||
Yamana Gold Inc. | 2,125,538 | $ | 24,259,624 | |||||
|
| |||||||
344,147,589 | ||||||||
OIL & GAS — 18.82% |
| |||||||
ARC Resources Ltd. | 877,800 | 20,985,985 | ||||||
Athabasca Oil Corp.a | 905,389 | 6,471,356 | ||||||
Baytex Energy Corp. | 347,358 | 13,714,533 | ||||||
Bonavista Energy Corp. | 510,378 | 6,294,452 | ||||||
Canadian Natural Resources Ltd. | 3,079,824 | 93,834,054 | ||||||
Canadian Oil Sands Ltd. | 1,369,372 | 26,234,722 | ||||||
Cenovus Energy Inc. | 2,135,570 | 61,097,263 | ||||||
Crescent Point Energy Corp. | 1,080,948 | 39,368,681 | ||||||
Encana Corp. | 2,077,878 | 35,435,610 | ||||||
Enerplus Corp. | 564,300 | 9,323,869 | ||||||
Husky Energy Inc. | 971,854 | 27,435,598 | ||||||
Imperial Oil Ltd. | 837,676 | 34,923,680 | ||||||
MEG Energy Corp.a | 406,300 | 13,129,934 | ||||||
Pacific Rubiales Energy Corp. | 866,514 | 16,370,863 | ||||||
Pengrowth Energy Corp. | 1,459,656 | 8,053,084 | ||||||
Penn West Petroleum Ltd. | 1,370,622 | 15,435,576 | ||||||
Peyto Exploration & Development Corp. | 398,772 | 10,868,040 | ||||||
Suncor Energy Inc. | 4,263,600 | 143,480,709 | ||||||
Talisman Energy Inc. | 2,910,534 | 31,039,442 | ||||||
Tourmaline Oil Corp.a | 441,408 | 17,030,340 | ||||||
Vermilion Energy Inc. | 272,118 | 14,597,742 | ||||||
|
| |||||||
645,125,533 | ||||||||
PHARMACEUTICALS — 3.45% |
| |||||||
Catamaran Corp.a | 581,856 | 31,814,821 | ||||||
Valeant Pharmaceuticals International Inc.a | 879,058 | 86,330,845 | ||||||
|
| |||||||
118,145,666 | ||||||||
PIPELINES — 6.29% |
| |||||||
AltaGas Ltd. | 333,564 | 11,361,223 | ||||||
Enbridge Inc. | 2,208,294 | 90,412,568 | ||||||
Pembina Pipeline Corp. | 869,022 | 26,921,641 | ||||||
TransCanada Corp. | 1,997,622 | 86,937,934 | ||||||
|
| |||||||
215,633,366 | ||||||||
REAL ESTATE — 2.06% |
| |||||||
Brookfield Asset Management Inc. Class A | 1,566,246 | 54,088,863 | ||||||
Brookfield Office Properties Inc. | 783,754 | 12,518,964 | ||||||
First Capital Realty Inc. | 262,086 | 4,176,382 | ||||||
|
| |||||||
70,784,209 |
Security | Shares | Value | ||||||
REAL ESTATE INVESTMENT TRUSTS — 0.47% |
| |||||||
H&R Real Estate Investment Trust | 357,394 | $ | 6,948,669 | |||||
RioCan Real Estate Investment Trust | 415,074 | 9,266,274 | ||||||
|
| |||||||
16,214,943 | ||||||||
RETAIL — 3.22% |
| |||||||
Alimentation Couche-Tard Inc. Class B | 389,998 | 22,455,663 | ||||||
Canadian Tire Corp. Ltd. | 219,450 | 18,533,321 | ||||||
Dollarama Inc. | 196,878 | 13,876,082 | ||||||
Shoppers Drug Mart Corp. | 570,570 | 31,879,226 | ||||||
Tim Hortons Inc. | 432,630 | 23,622,607 | ||||||
|
| |||||||
110,366,899 | ||||||||
SOFTWARE — 0.33% |
| |||||||
Open Text Corp. | 165,528 | 11,360,534 | ||||||
|
| |||||||
11,360,534 | ||||||||
TELECOMMUNICATIONS — 2.75% |
| |||||||
BCE Inc. | 723,562 | 29,624,270 | ||||||
Bell Aliant Inc. | 211,926 | 5,333,809 | ||||||
Rogers Communications Inc. Class B | 1,024,522 | 40,392,331 | ||||||
TELUS Corp. NVS | 620,655 | 19,015,613 | ||||||
|
| |||||||
94,366,023 | ||||||||
TRANSPORTATION — 4.96% |
| |||||||
Canadian National Railway Co. | 1,197,570 | 112,139,506 | ||||||
Canadian Pacific Railway Ltd. | 494,076 | 58,016,109 | ||||||
|
| |||||||
170,155,615 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| 3,416,307,222 | ||||||
SHORT-TERM INVESTMENTS — 1.07% |
| |||||||
MONEY MARKET FUNDS — 1.07% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.15%c,d,e | 33,438,543 | 33,438,543 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
0.13%c,d,e | 2,123,323 | 2,123,323 |
SCHEDULESOF INVESTMENTS | 29 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI CANADA ETF
August 31, 2013
Security | Shares | Value | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.00%c,d | 942,417 | $ | 942,417 | |||||
|
| |||||||
36,504,283 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $36,504,283) |
| 36,504,283 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $3,965,275,161) |
| 3,452,811,505 | ||||||
Other Assets, Less Liabilities — (0.72)% |
| (24,588,251 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 3,428,223,254 | |||||
|
|
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, 2013 were as follows:
Number of Contracts | Issue (Expiration) | Exchange | Notional Value | Net Unrealized Appreciation (Depreciation) | ||||||||||
76 | S&P/TSX 60 Index (Sept. 2013) | Montreal | $ | 10,466,660 | $ | 419,608 | ||||||||
See notes to financial statements.
30 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
iSHARES® MSCI CHILE CAPPED ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 94.92% |
| |||||||
AIRLINES — 4.44% |
| |||||||
LATAM Airlines Group SA | 1,288,414 | $ | 16,201,962 | |||||
|
| |||||||
16,201,962 | ||||||||
APPAREL — 0.36% |
| |||||||
Forus SA | 229,684 | 1,308,168 | ||||||
|
| |||||||
1,308,168 | ||||||||
BANKS — 14.28% |
| |||||||
Banco de Chile | 110,831,263 | 15,845,149 | ||||||
Banco de Credito e Inversiones | 203,129 | 9,712,215 | ||||||
Banco Santander (Chile) SA | 326,023,627 | 18,237,474 | ||||||
CorpBanca SA | 875,226,931 | 8,320,699 | ||||||
|
| |||||||
52,115,537 | ||||||||
BEVERAGES — 4.05% |
| |||||||
Compania Cervecerias Unidas SA | 696,703 | 9,327,408 | ||||||
Vina Concha y Toro SA | 2,992,042 | 5,455,500 | ||||||
|
| |||||||
14,782,908 | ||||||||
BUILDING MATERIALS — 0.64% |
| |||||||
SalfaCorp SA | 2,454,072 | 2,347,599 | ||||||
|
| |||||||
2,347,599 | ||||||||
COMPUTERS — 2.15% |
| |||||||
Sonda SA | 3,088,772 | 7,841,885 | ||||||
|
| |||||||
7,841,885 | ||||||||
ELECTRIC — 22.04% |
| |||||||
AES Gener SA | 15,236,557 | 9,847,698 | ||||||
Colbun SA | 48,418,851 | 12,472,242 | ||||||
E.CL SA | 3,157,391 | 4,124,289 | ||||||
Empresa Nacional de Electricidad SA | 16,364,383 | 22,330,591 | ||||||
Enersis SA | 99,904,513 | 31,638,519 | ||||||
|
| |||||||
80,413,339 | ||||||||
ENGINEERING & CONSTRUCTION — 0.91% |
| |||||||
Besalco SA | 2,184,993 | 2,228,235 | ||||||
Socovesa SA | 4,294,383 | 1,078,144 | ||||||
|
| |||||||
3,306,379 | ||||||||
FOOD — 7.38% |
| |||||||
AquaChile SAa | 3,070,405 | 1,476,786 | ||||||
Cencosud SA | 5,764,094 | 23,287,464 | ||||||
Empresas Iansa SA | 26,077,071 | 874,112 | ||||||
Multiexport Foods SAa | 6,876,961 | 1,281,405 | ||||||
|
| |||||||
26,919,767 | ||||||||
FOREST PRODUCTS & PAPER — 4.99% |
| |||||||
Empresas CMPC SA | 5,547,561 | 16,383,498 |
Security | Shares | Value | ||||||
Masisa SA | 24,764,585 | $ | 1,821,983 | |||||
|
| |||||||
18,205,481 | ||||||||
HEALTH CARE — SERVICES — 0.37% |
| |||||||
Cruz Blanca Salud SA | 2,527,950 | 1,357,340 | ||||||
|
| |||||||
1,357,340 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 9.09% |
| |||||||
Empresas Copec SA | 2,314,598 | 30,777,925 | ||||||
Inversiones La Construccion SA | 196,642 | 2,396,082 | ||||||
|
| |||||||
33,174,007 | ||||||||
IRON & STEEL — 2.58% |
| |||||||
CAP SA | 441,665 | 9,427,742 | ||||||
|
| |||||||
9,427,742 | ||||||||
LODGING — 0.25% |
| |||||||
Enjoy SA | 6,806,183 | 921,125 | ||||||
|
| |||||||
921,125 | ||||||||
REAL ESTATE — 2.04% |
| |||||||
Parque Arauco SA | 3,056,388 | 6,310,724 | ||||||
PAZ Corp. SA | 2,518,462 | 1,141,864 | ||||||
|
| |||||||
7,452,588 | ||||||||
RETAIL — 10.95% |
| |||||||
Empresas Hites SA | 1,873,690 | 1,576,819 | ||||||
Empresas La Polar SAa | 8,456,666 | 1,566,633 | ||||||
S.A.C.I. Falabella SA | 3,717,941 | 36,827,189 | ||||||
|
| |||||||
39,970,641 | ||||||||
TELECOMMUNICATIONS — 3.13% |
| |||||||
Empresa Nacional de Telecomunicaciones SA | 719,555 | 11,406,409 | ||||||
|
| |||||||
11,406,409 | ||||||||
TRANSPORTATION — 1.53% |
| |||||||
Compania SudAmericana de Vapores SAa | 39,822,893 | 1,841,020 | ||||||
Sociedad Matriz SAAM SA | 42,659,974 | 3,726,807 | ||||||
|
| |||||||
5,567,827 | ||||||||
WATER — 3.74% |
| |||||||
Aguas Andinas SA Series A | 12,851,657 | 8,869,670 | ||||||
Inversiones Aguas Metropolitanas SA | 2,587,797 | 4,767,609 | ||||||
|
| |||||||
13,637,279 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $298,234,795) |
| 346,357,983 |
SCHEDULESOF INVESTMENTS | 31 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI CHILE CAPPED ETF
August 31, 2013
Security | Shares | Value | ||||||
PREFERRED STOCKS — 4.99% |
| |||||||
BEVERAGES — 1.69% |
| |||||||
Embotelladora Andina SA Class B | 1,211,126 | $ | 6,173,930 | |||||
|
| |||||||
6,173,930 | ||||||||
CHEMICALS — 3.30% | ||||||||
Sociedad Quimica y Minera de Chile SA Series B | 463,749 | 12,025,784 | ||||||
|
| |||||||
12,025,784 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $19,131,047) |
| 18,199,714 | ||||||
RIGHTS — 0.01% |
| |||||||
TRANSPORTATION — 0.01% |
| |||||||
Compania Sud Americana de Vapores SAa | 33,344,999 | 19,621 | ||||||
|
| |||||||
19,621 | ||||||||
|
| |||||||
TOTAL RIGHTS |
| |||||||
(Cost: $0) |
| 19,621 | ||||||
SHORT-TERM INVESTMENTS — 0.12% |
| |||||||
MONEY MARKET FUNDS — 0.12% |
| |||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.00%b,c | 461,635 | 461,635 | ||||||
|
| |||||||
461,635 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $461,635) |
| 461,635 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $317,827,477) |
| 365,038,953 | ||||||
Other Assets, Less Liabilities — (0.04)% |
| (149,337 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 364,889,616 | |||||
|
|
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.
32 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
iSHARES® MSCI COLOMBIA CAPPED ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 84.83% |
| |||||||
BANKS — 10.55% |
| |||||||
Banco de Bogota SA | 10,766 | $ | 389,034 | |||||
Bancolombia SA | 46,956 | 639,626 | ||||||
Corporacion Financiera Colombiana SA | 44,702 | 890,531 | ||||||
|
| |||||||
1,919,191 | ||||||||
BUILDING MATERIALS — 9.33% | ||||||||
Cementos Argos SA | 39,900 | 188,725 | ||||||
Cemex Latam Holdings SAa | 111,118 | 860,668 | ||||||
Grupo Argos SA | 57,526 | 648,749 | ||||||
|
| |||||||
1,698,142 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 1.20% |
| |||||||
Bolsa de Valores de Colombia | 16,834,720 | 218,192 | ||||||
|
| |||||||
218,192 | ||||||||
ELECTRIC — 17.26% |
| |||||||
Celsia SA ESP | 252,168 | 742,207 | ||||||
Empresa de Energia de Bogota SA | 787,010 | 633,965 | ||||||
Interconexion Electrica SA ESP | 186,424 | 889,475 | ||||||
Isagen SA ESPa | 552,034 | 873,688 | ||||||
|
| |||||||
3,139,335 | ||||||||
FOOD — 4.74% |
| |||||||
Grupo Nutresa SA | 60,690 | 861,807 | ||||||
|
| |||||||
861,807 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 6.76% |
| |||||||
Grupo Aval Acciones y Valores SA | 140,462 | 99,004 | ||||||
Grupo de Inversiones Suramericana SA | 57,162 | 1,129,898 | ||||||
|
| |||||||
1,228,902 | ||||||||
OIL & GAS — 30.59% |
| |||||||
Canacol Energy Ltd.a | 153,804 | 571,534 | ||||||
Ecopetrol SA | 1,443,372 | 3,230,929 | ||||||
Pacific Rubiales Energy Corp. | 63,004 | 1,190,321 | ||||||
Petrominerales Ltd. | 93,380 | 570,956 | ||||||
|
| |||||||
5,563,740 | ||||||||
RETAIL — 4.40% |
| |||||||
Almacenes Exito SA | 48,440 | 799,913 | ||||||
|
| |||||||
799,913 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $15,005,619) |
| 15,429,222 |
Security | Shares | Value | ||||||
PREFERRED STOCKS — 14.83% |
| |||||||
BANKS — 10.76% |
| |||||||
Banco Davivienda SA | 59,696 | $ | 760,765 | |||||
Bancolombia SA | 86,184 | 1,196,234 | ||||||
|
| |||||||
1,956,999 | ||||||||
BUILDING MATERIALS — 0.47% | ||||||||
Grupo Argos SA | 7,518 | 84,784 | ||||||
|
| |||||||
84,784 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 3.60% |
| |||||||
Grupo Aval Acciones y Valores SA | 547,288 | 389,992 | ||||||
Grupo de Inversiones Suramericana SA | 13,160 | 264,885 | ||||||
|
| |||||||
654,877 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $2,745,322) |
| 2,696,660 | ||||||
SHORT-TERM INVESTMENTS — 0.09% |
| |||||||
MONEY MARKET FUNDS — 0.09% |
| |||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.00%b,c | 16,889 | 16,889 | ||||||
|
| |||||||
16,889 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $16,889) |
| 16,889 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $17,767,830) |
| 18,142,771 | ||||||
Other Assets, Less Liabilities — 0.25% |
| 45,190 | ||||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 18,187,961 | |||||
|
|
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 | 33 |
Table of Contents
Schedule of Investments
iSHARES® MSCI ISRAEL CAPPED ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 99.51% |
| |||||||
AEROSPACE & DEFENSE — 2.09% |
| |||||||
Elbit Systems Ltd. | 32,769 | $ | 1,476,612 | |||||
|
| |||||||
1,476,612 | ||||||||
BANKS — 23.59% |
| |||||||
Bank Hapoalim BM | 1,469,127 | 6,835,321 | ||||||
Bank Leumi le-Israel BMa | 1,745,469 | 5,746,976 | ||||||
First International Bank of Israel Ltd.b | 29,568 | 434,696 | ||||||
Israel Discount Bank Ltd. Class Aa | 1,111,936 | 1,753,682 | ||||||
Mizrahi Tefahot Bank Ltd. | 177,177 | 1,906,319 | ||||||
Union Bank of Israela | 0 | 1 | ||||||
|
| |||||||
16,676,995 | ||||||||
BIOTECHNOLOGY — 0.00% |
| |||||||
Clal Biotechnology Industries Ltd.a | 3 | 6 | ||||||
|
| |||||||
6 | ||||||||
CHEMICALS — 7.36% |
| |||||||
Frutarom | 53,625 | 881,174 | ||||||
Israel Chemicals Ltd. | 620,829 | 4,325,019 | ||||||
|
| |||||||
5,206,193 | ||||||||
COMMERCIAL SERVICES — 0.65% |
| |||||||
Nitsba Holdings (1995) Ltd.a | 37,257 | 462,455 | ||||||
|
| |||||||
462,455 | ||||||||
COMPUTERS — 0.36% |
| |||||||
MATRIX IT Ltd. | 48,081 | 251,218 | ||||||
|
| |||||||
251,218 | ||||||||
ELECTRONICS — 0.60% |
| |||||||
Ituran Location and Control Ltd. | 23,067 | 427,504 | ||||||
|
| |||||||
427,504 | ||||||||
ENERGY — ALTERNATE SOURCES — 0.63% |
| |||||||
Ormat Industries Ltd.a | 73,986 | 446,906 | ||||||
|
| |||||||
446,906 | ||||||||
ENGINEERING & CONSTRUCTION — 1.33% |
| |||||||
Electra (Israel) Ltd. | 2,277 | 283,138 | ||||||
Shikun & Binui Ltd. | 283,932 | 655,415 | ||||||
|
| |||||||
938,553 | ||||||||
FOOD — 4.06% |
| |||||||
Osem Investment Ltd. | 55,209 | 1,137,971 | ||||||
Rami Levi Chain Stores Hashikma Marketing 2006 Ltd. | 8,910 | 450,513 | ||||||
Shufersal Ltd. | 108,372 | 431,714 | ||||||
Strauss Group Ltd. | 53,658 | 853,235 | ||||||
|
| |||||||
2,873,433 |
Security | Shares | Value | ||||||
FOREST PRODUCTS & PAPER — 0.25% |
| |||||||
Hadera Paper Ltd.a | 2,937 | $ | 178,219 | |||||
|
| |||||||
178,219 | ||||||||
HEALTH CARE — PRODUCTS — 0.63% |
| |||||||
Given Imaging Ltd.a | 24,123 | 442,607 | ||||||
|
| |||||||
442,607 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 5.60% |
| |||||||
Clal Industries Ltd. | 87,549 | 372,482 | ||||||
Delek Group Ltd. (The) | 5,643 | 1,575,603 | ||||||
Discount Investment Corp. Ltd. Registereda | 34,749 | 186,843 | ||||||
Israel Corp. Ltd. (The)a | 3,729 | 1,586,524 | ||||||
Koor Industries Ltd.a | 13,200 | 239,894 | ||||||
|
| |||||||
3,961,346 | ||||||||
HOME BUILDERS — 0.50% |
| |||||||
Bayside Land Corp. Ltd. | 891 | 222,916 | ||||||
Property & Building Corp. Ltd. | 2,211 | 129,825 | ||||||
|
| |||||||
352,741 | ||||||||
INSURANCE — 3.54% |
| |||||||
Clal Insurance Enterprises Holdings Ltd. | 27,555 | 479,373 | ||||||
Harel Insurance Investments & Financial Services Ltd. | 14,850 | 791,086 | ||||||
Menorah Mivtachim Holdings Ltd.a | 35,706 | 394,342 | ||||||
Migdal Insurance & Financial Holdings Ltd. | 382,569 | 566,879 | ||||||
Phoenix Holdings Ltd. | 78,508 | 268,254 | ||||||
|
| |||||||
2,499,934 | ||||||||
MANUFACTURING — 0.21% |
| |||||||
Plasson Industries Ltd. | 4,884 | 150,680 | ||||||
|
| |||||||
150,680 | ||||||||
OIL & GAS — 3.07% |
| |||||||
Jerusalem Oil Exploration Ltd.a | 12,243 | 401,085 | ||||||
Naphtha Israel Petroleum Corp. Ltd.a | 49,072 | 285,967 | ||||||
Oil Refineries Ltd.a | 1,201,662 | 471,722 | ||||||
Paz Oil Co. Ltd.a | 6,567 | 1,015,014 | ||||||
|
| |||||||
2,173,788 | ||||||||
PHARMACEUTICALS — 24.12% |
| |||||||
Teva Pharmaceutical Industries Ltd. | 441,342 | 17,056,814 | ||||||
|
| |||||||
17,056,814 | ||||||||
REAL ESTATE — 6.05% |
| |||||||
Africa Israel Investments Ltd.a | 132,462 | 234,363 | ||||||
Africa Israel Properties Ltd.a | 17,755 | 237,559 |
34 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI ISRAEL CAPPED ETF
August 31, 2013
Security | Shares | Value | ||||||
Airport City Ltd.a | 47,388 | $ | 361,963 | |||||
AL-ROV (Israel) Ltd.a | 5,676 | 156,913 | ||||||
Alony Hetz Properties & Investments Ltd. | 94,050 | 598,001 | ||||||
Alrov Properties and Lodgings Ltd.a | 6,600 | 163,116 | ||||||
Amot Investments Ltd. | 87,846 | 246,735 | ||||||
Gazit Globe Ltd. | 105,765 | 1,283,870 | ||||||
Jerusalem Economy Ltd. | 28,842 | 236,729 | ||||||
Melisron Ltd. | 17,227 | 434,845 | ||||||
Norstar Holdings Inc. | 11,715 | 321,399 | ||||||
|
| |||||||
4,275,493 | ||||||||
RETAIL — 0.66% |
| |||||||
Delek Automotive Systems Ltd. | 46,233 | 463,953 | ||||||
|
| |||||||
463,953 | ||||||||
SOFTWARE — 0.45% |
| |||||||
Babylon Ltd. | 41,679 | 315,130 | ||||||
|
| |||||||
315,130 | ||||||||
TELECOMMUNICATIONS — 13.58% |
| |||||||
Bezeq The Israel Telecommunication Corp. Ltd. | 2,198,097 | 3,597,361 | ||||||
Cellcom Israel Ltd. | 77,979 | 856,038 | ||||||
EZchip Semiconductor Ltd.a | 39,666 | 1,176,613 | ||||||
NICE Systems Ltd. | 80,982 | 3,062,599 | ||||||
Partner Communications Co. Ltd.b | 122,100 | 907,657 | ||||||
|
| |||||||
9,600,268 | ||||||||
TEXTILES — 0.18% |
| |||||||
Avgol Industries 1953 Ltd. | 152,559 | 130,236 | ||||||
|
| |||||||
130,236 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $91,489,926) |
| 70,361,084 | ||||||
WARRANTS — 0.00% |
| |||||||
BIOTECHNOLOGY — 0.00% |
| |||||||
Clal Biotechnology Industries Ltd. (Expires 05/08/14)a | 1 | — | ||||||
|
| |||||||
— | ||||||||
REAL ESTATE — 0.00% |
| |||||||
Africa Israel Investments Ltd. (Expires 10/31/13)a | 19,787 | 810 | ||||||
|
| |||||||
810 | ||||||||
|
| |||||||
TOTAL WARRANTS |
| |||||||
(Cost: $0) |
| 810 |
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS — 1.53% |
| |||||||
MONEY MARKET FUNDS — 1.53% |
| |||||||
BlackRock Cash Funds: Institutional, | ||||||||
SL Agency Shares | ||||||||
0.15%c,d,e | 1,017,680 | $ | 1,017,680 | |||||
BlackRock Cash Funds: Prime, | ||||||||
SL Agency Shares | ||||||||
0.13%c,d,e | 64,622 | 64,622 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
SL Agency Shares | ||||||||
0.00%c,d | 3,818 | 3,818 | ||||||
|
| |||||||
1,086,120 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $1,086,120) |
| 1,086,120 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $92,576,046) |
| 71,448,014 | ||||||
Other Assets, Less Liabilities — (1.04)% |
| (738,229 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% | $ | 70,709,785 | ||||||
|
|
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 | 35 |
Table of Contents
Schedule of Investments
iSHARES® MSCI MEXICO CAPPED ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 100.06% |
| |||||||
AIRLINES — 0.48% |
| |||||||
Grupo Aeromexico SAB de CVa,b | 7,880,436 | $ | 10,688,638 | |||||
|
| |||||||
10,688,638 | ||||||||
BANKS — 14.15% |
| |||||||
Banregio Grupo Financiero SAB de CVb | 3,431,400 | 20,410,559 | ||||||
Compartamos SAB de CV | 17,188,406 | 30,162,100 | ||||||
Grupo Financiero Banorte SAB de CV Series O | 21,134,478 | 132,153,802 | ||||||
Grupo Financiero Inbursa SAB de CV Series O | 31,002,392 | 66,128,529 | ||||||
Grupo Financiero Santander Mexico SAB de CV Series Bb | 23,764,750 | 64,769,267 | ||||||
|
| |||||||
313,624,257 | ||||||||
BEVERAGES — 9.85% |
| |||||||
Arca Continental SAB de CV | 4,940,029 | 31,296,963 | ||||||
Coca-Cola FEMSA SAB de CV Series L | 1,574,858 | 18,773,977 | ||||||
Fomento Economico Mexicano SAB de CV BD Units | 17,760,010 | 168,235,925 | ||||||
|
| |||||||
218,306,865 | ||||||||
BUILDING MATERIALS — 5.33% |
| |||||||
Cemex SAB de CV CPOa,b | 92,476,508 | 105,068,052 | ||||||
Corporacion Geo SAB de CV Series Ba,b | 15,588,128 | 779,406 | ||||||
Desarrolladora Homex SAB de CVa,b,c | 28,207,210 | 10,415,035 | ||||||
Urbi Desarrollos Urbanos SAB de CVa,b | 29,674,089 | 2,021,838 | ||||||
|
| |||||||
118,284,331 | ||||||||
CHEMICALS — 2.50% |
| |||||||
Mexichem SAB de CV | 13,908,074 | 55,415,633 | ||||||
|
| |||||||
55,415,633 | ||||||||
COMMERCIAL SERVICES — 1.28% |
| |||||||
OHL Mexico SAB de CVa,b | 10,927,900 | 28,441,022 | ||||||
|
| |||||||
28,441,022 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 0.85% |
| |||||||
Bolsa Mexicana de Valores SAB de CVb | 7,956,087 | 18,764,019 | ||||||
|
| |||||||
18,764,019 | ||||||||
ENGINEERING & CONSTRUCTION — 4.53% |
| |||||||
Empresas ICA SAB de CVa,b | 10,263,488 | 21,100,416 |
Security | Shares | Value | ||||||
Grupo Aeroportuario del Centro Norte SAB de CVb | 5,351,492 | $ | 18,176,315 | |||||
Grupo Aeroportuario del Pacifico SAB de CV Series B | 5,217,849 | 26,038,442 | ||||||
Grupo Aeroportuario del Sureste SAB de CV Series B | 3,136,865 | 35,228,648 | ||||||
|
| |||||||
100,543,821 | ||||||||
FOOD — 3.43% |
| |||||||
Grupo Bimbo SAB de CV Series A | 21,734,104 | 63,239,210 | ||||||
Grupo Herdez SAB de CVb | 4,010,144 | 12,824,532 | ||||||
|
| |||||||
76,063,742 | ||||||||
FOREST PRODUCTS & PAPER — 0.52% |
| |||||||
Bio Pappel SAB de CVa | 5,398,900 | 11,443,145 | ||||||
|
| |||||||
11,443,145 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 5.93% |
| |||||||
Alfa SAB de CV Series A | 35,929,851 | 90,820,287 | ||||||
Grupo Carso SAB de CV Series A1 | 8,241,033 | 40,723,739 | ||||||
|
| |||||||
131,544,026 | ||||||||
HOME BUILDERS — 0.59% |
| |||||||
Consorcio ARA SAB de CVa | 32,807,019 | 13,145,413 | ||||||
|
| |||||||
13,145,413 | ||||||||
HOUSEHOLD PRODUCTS & WARES — 2.65% |
| |||||||
Kimberly-Clark de Mexico SAB de CV Series A | 20,702,354 | 58,702,151 | ||||||
|
| |||||||
58,702,151 | ||||||||
IRON & STEEL — 0.59% |
| |||||||
Compania Minera Autlan SAB de CV Series Bb | 596,305 | 317,535 | ||||||
Grupo Simec SAB de CV Series Ba | 3,472,154 | 12,744,927 | ||||||
|
| |||||||
13,062,462 | ||||||||
MACHINERY — 0.90% |
| |||||||
Industrias CH SAB de CV Series Ba,b | 3,460,983 | 19,902,208 | ||||||
|
| |||||||
19,902,208 | ||||||||
MEDIA — 5.57% |
| |||||||
Grupo Televisa SAB de CV CPO | 21,468,097 | 107,790,685 | ||||||
TV Azteca SAB de CV CPOb | 31,693,439 | 15,761,267 | ||||||
|
| |||||||
123,551,952 | ||||||||
MINING — 8.06% |
| |||||||
Grupo Mexico SAB de CV Series B | 33,062,586 | 94,591,880 |
36 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI MEXICO CAPPED ETF
August 31, 2013
Security | Shares | Value | ||||||
Industrias Penoles SAB de CV | 1,853,313 | $ | 56,604,332 | |||||
Minera Frisco SAB de CV Series A1a | 10,114,794 | 27,491,453 | ||||||
|
| |||||||
178,687,665 | ||||||||
PHARMACEUTICALS — 1.24% |
| |||||||
Genomma Lab Internacional SAB de CV Series Ba,b | 12,801,293 | 27,458,735 | ||||||
|
| |||||||
27,458,735 | ||||||||
REAL ESTATE — 0.89% |
| |||||||
Corporacion Inmobiliaria Vesta SAB de CV | 10,077,949 | 19,707,553 | ||||||
|
| |||||||
19,707,553 | ||||||||
REAL ESTATE INVESTMENT TRUSTS — 4.16% |
| |||||||
Concentradora Fibra Hotelera Mexicana SA de CV | 10,027,100 | 18,023,547 | ||||||
Fibra Uno Administracion SA de CV | 18,349,100 | 53,857,192 | ||||||
Macquarie Mexico Real Estate Management SA de CVb | 11,184,400 | 20,380,202 | ||||||
|
| |||||||
92,260,941 | ||||||||
RETAIL — 9.67% |
| |||||||
Alsea SAB de CVb | 8,183,066 | 20,708,942 | ||||||
Controladora Comercial Mexicana SAB de CV BC Units | 6,741,155 | 25,546,918 | ||||||
El Puerto de Liverpool SA de CV Series C1 | 2,946,695 | 30,927,939 | ||||||
Grupo Comercial Chedraui SA de CV | 6,611,400 | 18,905,276 | ||||||
Grupo Famsa SAB de CV Series Aa,b | 6,703,040 | 13,444,234 | ||||||
Wal-Mart de Mexico SAB de CV Series V | 43,693,233 | 104,848,052 | ||||||
|
| |||||||
214,381,361 | ||||||||
TELECOMMUNICATIONS — 16.89% |
| |||||||
America Movil SAB de CV Series L | 376,506,718 | 362,633,043 | ||||||
Axtel SAB de CV CPOa,b | 36,574,477 | 11,888,349 | ||||||
|
| |||||||
374,521,392 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $2,585,133,105) | 2,218,501,332 |
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS — 4.27% |
| |||||||
MONEY MARKET FUNDS — 4.27% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.15%c,d,e | 87,745,571 | $ | 87,745,571 | |||||
BlackRock Cash Funds: Prime, | ||||||||
0.13%c,d,e | 5,571,780 | 5,571,780 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.00%c,d | 1,269,748 | 1,269,748 | ||||||
|
| |||||||
94,587,099 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $94,587,099) | 94,587,099 | |||||||
|
| |||||||
TOTAL INVESTMENTS | ||||||||
(Cost: $2,679,720,204) | 2,313,088,431 | |||||||
Other Assets, Less Liabilities — (4.33)% |
| (96,036,235 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% | $ | 2,217,052,196 | ||||||
|
|
CPO — Certificates of Participation (Ordinary)
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 ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 99.96% |
| |||||||
BANKS — 12.46% |
| |||||||
African Bank Investments Ltd.a | 1,549,088 | $ | 2,470,131 | |||||
Barclays Africa Group Ltd. | 720,628 | 9,640,273 | ||||||
FirstRand Ltd. | 6,586,455 | 19,339,391 | ||||||
Nedbank Group Ltd. | 433,510 | 7,980,207 | ||||||
Standard Bank Group Ltd. | 2,577,640 | 28,819,430 | ||||||
|
| |||||||
68,249,432 | ||||||||
BUILDING MATERIALS — 0.58% |
| |||||||
PPC Ltd. | 1,093,108 | 3,162,659 | ||||||
|
| |||||||
3,162,659 | ||||||||
CHEMICALS — 10.06% |
| |||||||
Sasol Ltd. | 1,170,269 | 55,060,122 | ||||||
|
| |||||||
55,060,122 | ||||||||
COAL — 0.88% |
| |||||||
Exxaro Resources Ltd. | 304,056 | 4,821,370 | ||||||
|
| |||||||
4,821,370 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 1.71% |
| |||||||
Investec Ltd. | 534,598 | 3,468,284 | ||||||
RMB Holdings Ltd. | 1,499,326 | 5,919,124 | ||||||
|
| |||||||
9,387,408 | ||||||||
FOOD — 7.93% |
| |||||||
Bidvest Group Ltd. | 626,513 | 15,464,306 | ||||||
Shoprite Holdings Ltd. | 908,959 | 14,304,055 | ||||||
SPAR Group Ltd. (The) | 367,059 | 4,130,803 | ||||||
Tiger Brands Ltd. | 345,858 | 9,549,679 | ||||||
|
| |||||||
43,448,843 | ||||||||
FOREST PRODUCTS & PAPER — 0.50% |
| |||||||
Sappi Ltd.b | 1,150,157 | 2,748,202 | ||||||
|
| |||||||
2,748,202 | ||||||||
HEALTH CARE — PRODUCTS — 2.65% |
| |||||||
Aspen Pharmacare Holdings Ltd.b | 629,178 | 14,498,556 | ||||||
|
| |||||||
14,498,556 | ||||||||
HEALTH CARE — SERVICES — 3.14% |
| |||||||
Life Healthcare Group Holdings Ltd. | 1,992,444 | 6,887,269 | ||||||
Mediclinic International Ltd. | 790,124 | 5,686,949 | ||||||
Netcare Ltd. | 2,025,876 | 4,593,383 | ||||||
|
| |||||||
17,167,601 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 6.28% |
| |||||||
Barloworld Ltd. | 466,351 | 3,996,384 | ||||||
Imperial Holdings Ltd. | 399,220 | 8,117,330 | ||||||
Remgro Ltd. | 1,021,875 | 18,659,372 |
Security | Shares | Value | ||||||
RMI Holdings Ltd. | 1,420,158 | $ | 3,587,490 | |||||
|
| |||||||
34,360,576 | ||||||||
HOME FURNISHINGS — 1.43% |
| |||||||
Steinhoff International Holdings Ltd.b | 2,730,128 | 7,827,025 | ||||||
|
| |||||||
7,827,025 | ||||||||
INSURANCE — 5.42% |
| |||||||
Discovery Ltd. | 628,573 | 5,194,428 | ||||||
Liberty Holdings Ltd. | 243,225 | 2,731,264 | ||||||
MMI Holdings Ltd. | 2,334,165 | 4,688,387 | ||||||
Sanlam Ltd. | 3,791,475 | 17,041,460 | ||||||
|
| |||||||
29,655,539 | ||||||||
IRON & STEEL — 1.37% |
| |||||||
Kumba Iron Ore Ltd. | 171,081 | 7,517,474 | ||||||
|
| |||||||
7,517,474 | ||||||||
MEDIA — 12.68% |
| |||||||
Naspers Ltd. Class N | 838,478 | 69,459,973 | ||||||
|
| |||||||
69,459,973 | ||||||||
MINING — 9.25% |
| |||||||
African Rainbow Minerals Ltd. | 228,994 | 4,210,932 | ||||||
Anglo American Platinum Ltd.b | 143,184 | 5,728,898 | ||||||
AngloGold Ashanti Ltd. | 815,081 | 11,142,598 | ||||||
Assore Ltd. | 74,112 | 2,836,823 | ||||||
Gold Fields Ltd. | 1,571,179 | 8,270,897 | ||||||
Harmony Gold Mining Co. Ltd. | 832,194 | 3,140,738 | ||||||
Impala Platinum Holdings Ltd. | 1,141,471 | 12,650,811 | ||||||
Northam Platinum Ltd.b | 650,194 | 2,647,504 | ||||||
|
| |||||||
50,629,201 | ||||||||
OFFICE & BUSINESS EQUIPMENT — 0.47% |
| |||||||
Reunert Ltd. | 384,393 | 2,567,374 | ||||||
|
| |||||||
2,567,374 | ||||||||
PACKAGING & CONTAINERS — 0.67% |
| |||||||
Nampak Ltd. | 1,259,367 | 3,689,191 | ||||||
|
| |||||||
3,689,191 | ||||||||
REAL ESTATE — 2.63% |
| |||||||
Growthpoint Properties Ltd. | 3,816,973 | 8,851,978 | ||||||
Redefine Properties Ltd. | 6,232,967 | 5,575,039 | ||||||
|
| |||||||
14,427,017 | ||||||||
RETAIL — 6.16% |
| |||||||
Foschini Group Ltd. (The)a | 412,330 | 3,874,477 | ||||||
Massmart Holdings Ltd. | 230,561 | 3,546,105 | ||||||
Mr. Price Group Ltd. | 506,844 | 6,197,345 | ||||||
Pick n Pay Stores Ltd.a | 510,232 | 1,907,703 | ||||||
Truworths International Ltd. | 934,033 | 7,480,655 |
38 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SOUTH AFRICA ETF
August 31, 2013
Security | Shares | Value | ||||||
Woolworths Holdings Ltd. | 1,610,872 | $ | 10,729,184 | |||||
|
| |||||||
33,735,469 | ||||||||
TELECOMMUNICATIONS — 13.69% |
| |||||||
MTN Group Ltd. | 3,597,495 | 65,988,619 | ||||||
Vodacom Group Ltd. | 790,164 | 8,954,832 | ||||||
|
| |||||||
74,943,451 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $631,716,937) | 547,356,483 | |||||||
SHORT-TERM INVESTMENTS — 1.17% |
| |||||||
MONEY MARKET FUNDS — 1.17% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.15%c,d,e | 5,946,428 | 5,946,428 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
0.13%c,d,e | 377,594 | 377,594 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.00%c,d | 76,235 | 76,235 | ||||||
|
| |||||||
6,400,257 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $6,400,257) | 6,400,257 | |||||||
|
| |||||||
TOTAL INVESTMENTS | ||||||||
(Cost: $638,117,194) | 553,756,740 | |||||||
Other Assets, Less Liabilities — (1.13)% |
| (6,187,415 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% | $ | 547,569,325 | ||||||
|
|
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 | 39 |
Table of Contents
Schedule of Investments
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 99.90% |
| |||||||
AIRLINES — 2.55% |
| |||||||
Turk Hava Yollari AO | 3,583,140 | $ | 11,110,239 | |||||
|
| |||||||
11,110,239 | ||||||||
AUTO MANUFACTURERS — 2.67% |
| |||||||
Anadolu Isuzu Otomotiv Sanayi ve Ticaret ASa,b | 32,574 | 265,290 | ||||||
Ford Otomotiv Sanayi AS | 456,748 | 5,714,252 | ||||||
Otokar Otomotiv Ve Savunma Sanayi ASb | 54,112 | 1,460,154 | ||||||
Tofas Turk Otomobil Fabrikasi AS | 808,832 | 4,186,522 | ||||||
|
| |||||||
11,626,218 | ||||||||
AUTO PARTS & EQUIPMENT — 0.12% |
| |||||||
Goodyear Lastikleri Turk AS | 23,140 | 497,256 | ||||||
|
| |||||||
497,256 | ||||||||
BANKS — 38.51% |
| |||||||
Akbank TAS | 11,662,204 | 38,792,957 | ||||||
Albaraka Turk Katilim Bankasi ASa | 2,083,846 | 1,543,779 | ||||||
Asya Katilim Bankasi ASa | 3,213,968 | 2,806,752 | ||||||
Sekerbank TASa,b | 2,278,578 | 2,045,773 | ||||||
Tekstil Bankasi ASa,b | 684,588 | 480,295 | ||||||
Turkiye Garanti Bankasi AS | 14,961,256 | 51,675,330 | ||||||
Turkiye Halk Bankasi AS | 4,048,966 | 25,824,388 | ||||||
Turkiye Is Bankasi AS Class C | 10,208,656 | 23,940,820 | ||||||
Turkiye Vakiflar Bankasi TAO Class D | 4,882,362 | 9,581,478 | ||||||
Yapi ve Kredi Bankasi AS | 5,652,035 | 11,258,316 | ||||||
|
| |||||||
167,949,888 | ||||||||
BEVERAGES — 5.79% |
| |||||||
Anadolu Efes Biracilik ve Malt Sanayii AS | 1,347,816 | 15,572,705 | ||||||
Coca-Cola Icecek AS | 413,316 | 9,692,876 | ||||||
|
| |||||||
25,265,581 | ||||||||
BUILDING MATERIALS — 1.56% |
| |||||||
Adana Cimento Sanayii TAS Class A | 386,082 | 689,483 | ||||||
Akcansa Cimento Sanayi ve TAS | 314,526 | 1,521,514 | ||||||
Baticim Bati Anodolu Cimento Sanayii ASa | 374,097 | 1,075,535 | ||||||
Cimsa Cimento Sanayi ve TAS | 308,652 | 1,521,871 | ||||||
Goltas Goller Bolgesi Cimento Sanayi ve TAS | 28,302 | 602,628 | ||||||
Konya Cimento Sanayii AS | 6,764 | 746,670 |
Security | Shares | Value | ||||||
Mardin Cimento Sanayii ve TAS | 330,368 | $ | 633,749 | |||||
|
| |||||||
6,791,450 | ||||||||
CHEMICALS — 0.71% |
| |||||||
Aksa Akrilik Kimya Sanayii AS | 539,874 | 1,673,987 | ||||||
Bagfas Bandirma Gubre Fabrikalari ASb | 35,956 | 608,601 | ||||||
Gubre Fabrikalari TASa | 135,458 | 820,758 | ||||||
|
| |||||||
3,103,346 | ||||||||
COMMERCIAL SERVICES — 0.31% |
| |||||||
Ihlas Holding ASa,b | 3,565,874 | 1,364,593 | ||||||
|
| |||||||
1,364,593 | ||||||||
DISTRIBUTION & WHOLESALE — 0.33% |
| |||||||
Aygaz AS | 1 | 3 | ||||||
Bizim Toptan Satis Magazalari AS | 119,260 | 1,453,998 | ||||||
|
| |||||||
1,454,001 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 0.95% |
| |||||||
Is Finansal Fabrikasi ASa,b | 1,259,884 | 494,497 | ||||||
Is Yatirim Menkul Degerler AS | 646,536 | 428,222 | ||||||
Turkiye Sinai Kalkinma Bankasi ASb | 3,815,253 | 3,200,825 | ||||||
|
| |||||||
4,123,544 | ||||||||
ELECTRIC — 0.58% |
| |||||||
Akenerji Elektrik Uretim ASa,b | 1,453,726 | 820,206 | ||||||
Alarko Holding AS | 437,702 | 1,024,329 | ||||||
Zorlu Enerji Elektrik Uretim ASa,b | 1,169,282 | 688,403 | ||||||
|
| |||||||
2,532,938 | ||||||||
ENGINEERING & CONSTRUCTION — 3.14% |
| |||||||
Enka Insaat ve Sanayi AS | 2,712,009 | 6,506,427 | ||||||
TAV Havalimanlari Holding AS | 1,064,440 | 5,770,667 | ||||||
Torunlar Gayrimenkul Yatirim Ortakligi AS | 978,644 | 1,406,808 | ||||||
|
| |||||||
13,683,902 | ||||||||
ENTERTAINMENT — 0.21% |
| |||||||
Fenerbahce Sportif Hizmetler Sanayi ve Ticaret ASb | 33,464 | 399,778 | ||||||
Galatasaray Sportif Sinai ve Ticari Yatirimlar ASa,b | 40,762 | 515,962 | ||||||
|
| |||||||
915,740 | ||||||||
FOOD — 6.13% |
| |||||||
BIM Birlesik Magazalar AS | 1,379,500 | 25,380,228 | ||||||
Pinar Sut Mamulleri Sanayii AS | 120,862 | 892,419 | ||||||
Tat Konserve Sanayii ASa | 402,102 | 463,604 | ||||||
|
| |||||||
26,736,251 |
40 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI TURKEY ETF
August 31, 2013
Security | Shares | Value | ||||||
FOREST PRODUCTS & PAPER — 0.44% |
| |||||||
Ipek Dogal Enerji Kaynaklari Ve Uretim ASa,b | 673,908 | $ | 1,332,442 | |||||
Kartonsan Karton Sanayi ve TASb | 5,696 | 595,240 | ||||||
|
| |||||||
1,927,682 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 11.06% |
| |||||||
Akfen Holding ASa,b | 561,590 | 1,008,424 | ||||||
Dogan Sirketler Grubu Holding ASa | 3,976,877 | 1,677,966 | ||||||
Eczacibasi Yatirim Holding Ortakligi ASb | 180,492 | 511,833 | ||||||
Haci Omer Sabanci Holding AS | 5,286,066 | 22,562,872 | ||||||
KOC Holding AS | 4,113,046 | 16,627,745 | ||||||
Kombassan Holdings ASa,b | 1,043,080 | 1,381,733 | ||||||
Tekfen Holding ASb | 970,278 | 2,037,429 | ||||||
Yazicilar Holding ASb | 259,346 | 2,436,637 | ||||||
|
| |||||||
48,244,639 | ||||||||
HOME FURNISHINGS — 2.00% |
| |||||||
Arcelik AS | 1,536,318 | 7,763,560 | ||||||
Vestel Beyaz Esya Sanayi ve TASa,b | 321,646 | 446,588 | ||||||
Vestel Elektronik Sanayi ve TASa,b | 642,046 | 507,148 | ||||||
|
| |||||||
8,717,296 | ||||||||
HOUSEWARES — 1.14% |
| |||||||
Anadolu Cam Sanayii AS | 952,108 | 1,027,665 | ||||||
Turkiye Sise ve Cam Fabrikalari AS | 3,069,294 | 3,960,379 | ||||||
|
| |||||||
4,988,044 | ||||||||
INSURANCE — 1.03% |
| |||||||
Aksigorta AS | 609,828 | 652,238 | ||||||
Anadolu Anonim Turk Sigorta Sirketia,b | 1,490,395 | 870,144 | ||||||
Anadolu Hayat Emeklilik ASb | 464,872 | 839,313 | ||||||
Yapi Kredi Sigorta ASa | 237,630 | 2,133,511 | ||||||
|
| |||||||
4,495,206 | ||||||||
IRON & STEEL — 3.15% |
| |||||||
Eregli Demir ve Celik Fabrikalari TAS | 9,081,560 | 9,846,804 | ||||||
Izmir Demir Celik Sanayi ASa,b | 606,802 | 523,965 | ||||||
Kardemir Karabuk Demir Celik Sanayi ve TAS Class Aa,b | 923,826 | 643,607 | ||||||
Kardemir Karabuk Demir Celik Sanayi ve TAS Class Ba,b | 463,116 | 777,067 | ||||||
Kardemir Karabuk Demir Celik Sanayi ve TAS Class Da | 3,964,775 | 1,945,186 | ||||||
|
| |||||||
13,736,629 |
Security | Shares | Value | ||||||
LODGING — 0.20% |
| |||||||
Net Holding ASb | 736,742 | $ | 881,958 | |||||
|
| |||||||
881,958 | ||||||||
MANUFACTURING — 0.39% |
| |||||||
Trakya Cam Sanayii AS | 1,615,857 | 1,704,449 | ||||||
|
| |||||||
1,704,449 | ||||||||
MEDIA — 0.30% |
| |||||||
Dogan Yayin Holding ASa,b | 3,238,710 | 1,001,049 | ||||||
Hurriyet Gazetecilik ve Matbaacilik ASa,b | 895,162 | 285,468 | ||||||
|
| |||||||
1,286,517 | ||||||||
METAL FABRICATE & HARDWARE — 0.16% |
| |||||||
Borusan Mannesmann Boru Sanayi ve TASb | 55,002 | 707,005 | ||||||
|
| |||||||
707,005 | ||||||||
MINING — 1.65% |
| |||||||
Koza Altin Isletmeleri AS | 296,726 | 4,673,080 | ||||||
Koza Anadolu Metal Madencilik Isletmeleri ASa | 1,127,808 | 1,781,696 | ||||||
Park Elektrik Uretim Madencilik Sanayi ve TASa,b | 330,546 | 733,015 | ||||||
|
| |||||||
7,187,791 | ||||||||
OIL & GAS — 3.59% |
| |||||||
Turkiye Petrol Rafinerileri AS | 813,638 | 15,648,036 | ||||||
|
| |||||||
15,648,036 | ||||||||
PHARMACEUTICALS — 0.48% |
| |||||||
EIS Eczacibasi Ilac Sanayi ve TASb | 1,114,458 | 1,224,769 | ||||||
Selcuk Ecza Deposu Ticaret ve Sanayi AS | 1,028,655 | 873,089 | ||||||
|
| |||||||
2,097,858 | ||||||||
REAL ESTATE — 1.09% |
| |||||||
Emlak Konut Gayrimenkul Yatirim Ortakligi AS | 4,073,708 | 4,756,740 | ||||||
|
| |||||||
4,756,740 | ||||||||
REAL ESTATE INVESTMENT TRUSTS — 1.00% |
| |||||||
Akmerkez Gayrimenkul Yatirim Ortakligi AS | 135,904 | 956,812 | ||||||
Halk Gayrimenkul Yatrm Ortakligi ASa | 1,328,592 | 717,013 | ||||||
Is Gayrimenkul Yatirim Ortakligi AS | 1,878,434 | 1,087,478 | ||||||
Saf Gayrimenkul Yatirim Ortakligi ASa,b | 1,169,595 | 476,273 |
SCHEDULESOF INVESTMENTS | 41 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI TURKEY ETF
August 31, 2013
Security | Shares | Value | ||||||
Sinpas Gayrimenkul Yatirim Ortakligi AS | 1,565,688 | $ | 691,338 | |||||
Vakif Gayrimenkul Yatirim Ortakligi ASa,b | 147,827 | 442,411 | ||||||
|
| |||||||
4,371,325 | ||||||||
RETAIL — 0.62% |
| |||||||
Boyner Buyuk Magazacilik ASa,b | 240,300 | 787,540 | ||||||
Dogus Otomotiv Servis ve TAS | 356,712 | 1,340,569 | ||||||
Turcas Petrolculuk ASb | 434,853 | 573,902 | ||||||
|
| |||||||
2,702,011 | ||||||||
TELECOMMUNICATIONS — 7.93% |
| |||||||
Nortel Networks Netas Telekomunikasyon ASb | 169,100 | 499,439 | ||||||
Turk Telekomunikasyon ASb | 2,984,882 | 9,138,067 | ||||||
Turkcell Iletisim Hizmetleri ASa | 4,751,805 | 24,945,082 | ||||||
|
| |||||||
34,582,588 | ||||||||
TEXTILES — 0.06% |
| |||||||
Polyester Sanayi ASa,b | 688,326 | 263,409 | ||||||
|
| |||||||
263,409 | ||||||||
TRANSPORTATION — 0.05% |
| |||||||
Celebi Hava Servisi AS | 38,804 | 197,042 | ||||||
|
| |||||||
197,042 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $612,628,101) |
| 435,651,172 | ||||||
SHORT-TERM INVESTMENTS — 5.20% |
| |||||||
MONEY MARKET FUNDS — 5.20% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.15%c,d,e | 21,256,153 | 21,256,153 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.13%c,d,e | 1,349,750 | 1,349,750 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.00%c,d | 73,078 | 73,078 | ||||||
|
| |||||||
22,678,981 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $22,678,981) |
| 22,678,981 | ||||||
|
|
Value | ||||||
TOTAL INVESTMENTS | ||||||
(Cost: $635,307,082) | $ | 458,330,153 | ||||
Other Assets, Less Liabilities — (5.10)% | (22,254,107 | ) | ||||
|
| |||||
NET ASSETS — 100.00% | $ | 436,076,046 | ||||
|
|
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 5. |
c | Affiliated issuer. See Note 2. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
See notes to financial statements.
42 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 99.76% |
| |||||||
ADVERTISING — 0.15% |
| |||||||
Interpublic Group of Companies Inc. (The) | 5,031 | $ | 79,088 | |||||
Omnicom Group Inc. | 3,022 | 183,284 | ||||||
|
| |||||||
262,372 | ||||||||
AEROSPACE & DEFENSE — 1.89% | ||||||||
Boeing Co. (The) | 8,431 | 876,150 | ||||||
General Dynamics Corp. | 3,533 | 294,122 | ||||||
L-3 Communications Holdings Inc. | 1,042 | 94,124 | ||||||
Lockheed Martin Corp. | 3,202 | 391,989 | ||||||
Northrop Grumman Corp. | 2,624 | 242,116 | ||||||
Raytheon Co. | 3,793 | 286,030 | ||||||
Rockwell Collins Inc. | 1,505 | 106,509 | ||||||
TransDigm Group Inc. | 586 | 80,282 | ||||||
United Technologies Corp. | 10,215 | 1,022,521 | ||||||
|
| |||||||
3,393,843 | ||||||||
AGRICULTURE — 1.76% |
| |||||||
Altria Group Inc. | 23,467 | 795,062 | ||||||
Archer-Daniels-Midland Co. | 7,675 | 270,237 | ||||||
Bunge Ltd.a | 1,706 | 129,281 | ||||||
Lorillard Inc. | 4,411 | 186,585 | ||||||
Philip Morris International Inc. | 19,122 | 1,595,539 | ||||||
Reynolds American Inc. | 3,836 | 182,709 | ||||||
|
| |||||||
3,159,413 | ||||||||
AIRLINES — 0.06% |
| |||||||
Delta Air Lines Inc. | 2,476 | 48,851 | ||||||
Southwest Airlines Co. | 2,150 | 27,542 | ||||||
United Continental Holdings Inc.b | 963 | 27,407 | ||||||
|
| |||||||
103,800 | ||||||||
APPAREL — 0.69% |
| |||||||
Coach Inc. | 3,307 | 174,643 | ||||||
Michael Kors Holdings Ltd.b | 2,253 | 166,925 | ||||||
Nike Inc. Class B | 8,380 | 526,431 | ||||||
Ralph Lauren Corp. | 708 | 117,110 | ||||||
Under Armour Inc. Class Aa,b | 921 | 66,901 | ||||||
VF Corp. | 1,027 | 192,265 | ||||||
|
| |||||||
1,244,275 | ||||||||
AUTO MANUFACTURERS — 0.77% |
| |||||||
Ford Motor Co. | 42,879 | 694,211 | ||||||
General Motors Co.b | 8,850 | 301,608 | ||||||
PACCAR Inc. | 4,118 | 220,766 | ||||||
Tesla Motors Inc.b | 972 | 164,268 | ||||||
|
| |||||||
1,380,853 |
Security | Shares | Value | ||||||
AUTO PARTS & EQUIPMENT — 0.46% |
| |||||||
Autoliv Inc. | 1,113 | $ | 90,130 | |||||
BorgWarner Inc. | 1,360 | 131,349 | ||||||
Delphi Automotive PLC | 3,452 | 189,929 | ||||||
Johnson Controls Inc. | 8,045 | 326,064 | ||||||
TRW Automotive Holdings Corp.b | 1,368 | 94,488 | ||||||
|
| |||||||
831,960 | ||||||||
BANKS — 7.39% |
| |||||||
Bank of America Corp. | 126,046 | 1,779,770 | ||||||
Bank of New York Mellon Corp. (The) | 13,517 | 401,996 | ||||||
BB&T Corp. | 8,244 | 279,966 | ||||||
Capital One Financial Corp. | 6,819 | 440,166 | ||||||
CIT Group Inc.b | 2,226 | 106,559 | ||||||
Citigroup Inc. | 35,587 | 1,719,920 | ||||||
Comerica Inc. | 2,147 | 87,683 | ||||||
Fifth Third Bancorp | 10,185 | 186,284 | ||||||
First Republic Bank | 1,065 | 47,158 | ||||||
Goldman Sachs Group Inc. (The) | 5,092 | 774,646 | ||||||
J.P. Morgan Chase & Co. | 44,193 | 2,233,072 | ||||||
KeyCorp | 10,629 | 124,040 | ||||||
M&T Bank Corp.a | 1,369 | 155,162 | ||||||
Morgan Stanley | 17,227 | 443,768 | ||||||
Northern Trust Corp. | 2,651 | 145,460 | ||||||
PNC Financial Services Group Inc. (The)c | 6,204 | 448,363 | ||||||
Regions Financial Corp. | 16,478 | 154,893 | ||||||
State Street Corp. | 5,316 | 354,684 | ||||||
SunTrust Banks Inc. | 6,285 | 201,246 | ||||||
U.S. Bancorp | 21,624 | 781,275 | ||||||
Wells Fargo & Co. | 58,842 | 2,417,229 | ||||||
|
| |||||||
13,283,340 | ||||||||
BEVERAGES — 2.26% |
| |||||||
Beam Inc. | 1,716 | 107,507 | ||||||
Brown-Forman Corp. Class B NVS | 1,427 | 95,595 | ||||||
Coca-Cola Co. (The) | 46,910 | 1,791,024 | ||||||
Coca-Cola Enterprises Inc. | 3,056 | 114,294 | ||||||
Constellation Brands Inc. Class Ab | 1,906 | 103,401 | ||||||
Dr Pepper Snapple Group Inc. | 2,421 | 108,364 | ||||||
Green Mountain Coffee Roasters Inc.a,b | 1,503 | 129,724 | ||||||
Molson Coors Brewing Co. Class B NVS | 1,741 | 84,943 | ||||||
Monster Beverage Corp.b | 1,635 | 93,833 | ||||||
PepsiCo Inc. | 18,086 | 1,441,997 | ||||||
|
| |||||||
4,070,682 |
SCHEDULESOF INVESTMENTS | 43 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI USA ETF
August 31, 2013
Security | Shares | Value | ||||||
BIOTECHNOLOGY — 2.35% |
| |||||||
Alexion Pharmaceuticals Inc.b | 2,291 | $ | 246,878 | |||||
Amgen Inc. | 8,773 | 955,731 | ||||||
Biogen Idec Inc.b | 2,777 | 591,557 | ||||||
Celgene Corp.a,b | 4,875 | 682,402 | ||||||
Gilead Sciences Inc.b | 17,841 | 1,075,277 | ||||||
Illumina Inc.b | 1,476 | 114,892 | ||||||
Life Technologies Corp.b | 2,039 | 151,722 | ||||||
Regeneron Pharmaceuticals Inc.b | 897 | 217,352 | ||||||
Vertex Pharmaceuticals Inc.b | 2,608 | 195,991 | ||||||
|
| |||||||
4,231,802 | ||||||||
BUILDING MATERIALS — 0.11% |
| |||||||
Martin Marietta Materials Inc. | 533 | 51,195 | ||||||
Masco Corp. | 4,194 | 79,350 | ||||||
Vulcan Materials Co. | 1,512 | 72,274 | ||||||
|
| |||||||
202,819 | ||||||||
CHEMICALS — 2.51% |
| |||||||
Air Products and Chemicals Inc. | 2,449 | 250,141 | ||||||
Airgas Inc. | 769 | 78,169 | ||||||
Albemarle Corp. | 1,039 | 64,802 | ||||||
Ashland Inc. | 881 | 76,832 | ||||||
Celanese Corp. Series A | 1,858 | 91,488 | ||||||
CF Industries Holdings Inc. | 693 | 131,906 | ||||||
Dow Chemical Co. (The) | 14,153 | 529,322 | ||||||
E.I. du Pont de Nemours and Co. | 10,761 | 609,288 | ||||||
Eastman Chemical Co. | 1,832 | 139,232 | ||||||
Ecolab Inc. | 3,120 | 285,012 | ||||||
FMC Corp. | 1,604 | 106,842 | ||||||
International Flavors & Fragrances Inc. | 948 | 74,901 | ||||||
LyondellBasell Industries NV Class A | 5,071 | 355,731 | ||||||
Monsanto Co. | 6,231 | 609,953 | ||||||
Mosaic Co. (The) | 3,461 | 144,151 | ||||||
PPG Industries Inc. | 1,681 | 262,589 | ||||||
Praxair Inc. | 3,465 | 406,791 | ||||||
Sherwin-Williams Co. (The) | 1,022 | 176,193 | ||||||
Sigma-Aldrich Corp. | 1,405 | 115,870 | ||||||
|
| |||||||
4,509,213 | ||||||||
COAL — 0.08% | ||||||||
CONSOL Energy Inc. | 2,655 | 82,916 | ||||||
Peabody Energy Corp. | 3,131 | 53,853 | ||||||
|
| |||||||
136,769 | ||||||||
COMMERCIAL SERVICES — 1.54% | ||||||||
ADT Corp. (The) | 2,427 | 96,667 | ||||||
Alliance Data Systems Corp.a,b | 568 | 111,158 |
Security | Shares | Value | ||||||
Automatic Data Processing Inc. | 5,697 | $ | 405,398 | |||||
Cintas Corp. | 1,217 | 58,124 | ||||||
Equifax Inc. | 1,397 | 82,549 | ||||||
H&R Block Inc. | 3,160 | 88,196 | ||||||
Hertz Global Holdings Inc.b | 4,661 | 112,004 | ||||||
Iron Mountain Inc. | 1,655 | 42,699 | ||||||
Manpowergroup Inc. | 915 | 59,338 | ||||||
MasterCard Inc. Class A | 1,229 | 744,872 | ||||||
McGraw Hill Financial Inc. | 3,043 | 177,620 | ||||||
Moody’s Corp. | 2,339 | 148,667 | ||||||
Paychex Inc. | 3,810 | 147,371 | ||||||
Quanta Services Inc.b | 2,434 | 63,625 | ||||||
Robert Half International Inc. | 1,653 | 58,301 | ||||||
SAIC Inc. | 3,405 | 51,313 | ||||||
SEI Investments Co. | 1,721 | 51,217 | ||||||
Total System Services Inc. | 1,997 | 55,257 | ||||||
Verisk Analytics Inc. Class Ab | 1,764 | 109,686 | ||||||
Western Union Co. | 6,446 | 112,998 | ||||||
|
| |||||||
2,777,060 | ||||||||
COMPUTERS — 5.98% | ||||||||
Accenture PLC Class A | 7,606 | 549,534 | ||||||
Apple Inc. | 10,976 | 5,345,861 | ||||||
Cognizant Technology Solutions Corp. Class Ab | 3,542 | 259,629 | ||||||
Computer Sciences Corp. | 1,753 | 87,913 | ||||||
Dell Inc. | 17,477 | 240,658 | ||||||
EMC Corp. | 24,566 | 633,311 | ||||||
Hewlett-Packard Co. | 22,703 | 507,185 | ||||||
IHS Inc. Class Aa,b | 694 | 74,362 | ||||||
International Business Machines Corp. | 12,316 | 2,244,837 | ||||||
NetApp Inc. | 4,175 | 173,430 | ||||||
SanDisk Corp. | 2,877 | 158,753 | ||||||
Seagate Technology PLC | 3,759 | 144,045 | ||||||
Synopsys Inc.a,b | 1,832 | 66,428 | ||||||
Teradata Corp.b | 1,909 | 111,791 | ||||||
Western Digital Corp. | 2,486 | 154,132 | ||||||
|
| |||||||
10,751,869 | ||||||||
COSMETICS & PERSONAL CARE — 1.90% |
| |||||||
Avon Products Inc. | 5,035 | 99,542 | ||||||
Colgate-Palmolive Co. | 10,937 | 631,830 | ||||||
Estee Lauder Companies Inc. (The) Class A | 2,813 | 183,858 | ||||||
Procter & Gamble Co. (The) | 32,052 | 2,496,530 | ||||||
|
| |||||||
3,411,760 |
44 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI USA ETF
August 31, 2013
Security | Shares | Value | ||||||
DISTRIBUTION & WHOLESALE — 0.38% |
| |||||||
Arrow Electronics Inc.a,b | 1,234 | $ | 57,282 | |||||
Fastenal Co. | 3,280 | 144,287 | ||||||
Fossil Group Inc.a,b | 625 | 72,588 | ||||||
Genuine Parts Co. | 1,811 | 139,465 | ||||||
LKQ Corp.b | 3,465 | 101,317 | ||||||
W.W. Grainger Inc. | 691 | 170,919 | ||||||
|
| |||||||
685,858 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 2.60% |
| |||||||
Affiliated Managers Group Inc.a,b | 622 | 108,427 | ||||||
American Express Co. | 11,560 | 831,280 | ||||||
Ameriprise Financial Inc. | 2,355 | 202,883 | ||||||
BlackRock Inc.c | 1,575 | 410,004 | ||||||
Charles Schwab Corp. (The) | 13,548 | 282,882 | ||||||
CME Group Inc. | 3,733 | 265,454 | ||||||
Discover Financial Services | 5,706 | 269,608 | ||||||
Eaton Vance Corp. NVS | 1,418 | 54,664 | ||||||
Franklin Resources Inc. | 4,830 | 222,953 | ||||||
IntercontinentalExchange Inc.a,b | 845 | 151,889 | ||||||
Invesco Ltd. | 5,178 | 157,204 | ||||||
Legg Mason Inc. | 1,292 | 42,016 | ||||||
NASDAQ OMX Group Inc. (The) | 1,336 | 39,893 | ||||||
NYSE Euronext Inc. | 2,835 | 118,503 | ||||||
Raymond James Financial Inc. | 1,465 | 61,281 | ||||||
SLM Corp. | 5,189 | 124,484 | ||||||
T. Rowe Price Group Inc. | 3,019 | 211,753 | ||||||
TD Ameritrade Holding Corp. | 2,543 | 65,279 | ||||||
Visa Inc. Class A | 6,056 | 1,056,287 | ||||||
|
| |||||||
4,676,744 | ||||||||
ELECTRIC — 2.82% | ||||||||
AES Corp. (The) | 7,369 | 93,660 | ||||||
Alliant Energy Corp. | 1,296 | 64,295 | ||||||
Ameren Corp. | 2,831 | 95,716 | ||||||
American Electric Power Co. Inc. | 5,723 | 244,944 | ||||||
Calpine Corp.b | 4,268 | 82,500 | ||||||
CMS Energy Corp. | 3,089 | 81,951 | ||||||
Consolidated Edison Inc. | 3,410 | 191,744 | ||||||
Dominion Resources Inc. | 6,749 | 393,804 | ||||||
DTE Energy Co. | 2,054 | 137,351 | ||||||
Duke Energy Corp. | 8,262 | 541,987 | ||||||
Edison International | 3,605 | 165,433 | ||||||
Entergy Corp. | 2,069 | 130,823 | ||||||
Exelon Corp. | 10,051 | 306,455 | ||||||
FirstEnergy Corp. | 4,877 | 182,741 | ||||||
Integrys Energy Group Inc. | 913 | 51,055 |
Security | Shares | Value | ||||||
MDU Resources Group Inc. | 2,085 | $ | 55,670 | |||||
NextEra Energy Inc. | 4,973 | 399,630 | ||||||
Northeast Utilities | 3,661 | 149,991 | ||||||
NRG Energy Inc. | 3,758 | 98,648 | ||||||
OGE Energy Corp. | 2,300 | 80,983 | ||||||
Pepco Holdings Inc. | 2,924 | 55,381 | ||||||
PG&E Corp. | 5,186 | 214,493 | ||||||
Pinnacle West Capital Corp. | 1,282 | 69,574 | ||||||
PPL Corp. | 6,937 | 212,966 | ||||||
Public Service Enterprise Group Inc. | 5,899 | 191,246 | ||||||
SCANA Corp. | 1,557 | 74,923 | ||||||
Southern Co. (The) | 10,176 | 423,525 | ||||||
Wisconsin Energy Corp. | 2,680 | 109,987 | ||||||
Xcel Energy Inc. | 5,826 | 162,662 | ||||||
|
| |||||||
5,064,138 | ||||||||
ELECTRICAL COMPONENTS & EQUIPMENT — 0.39% |
| |||||||
AMETEK Inc. | 2,834 | 121,635 | ||||||
Emerson Electric Co. | 8,382 | 506,021 | ||||||
Energizer Holdings Inc. | 721 | 71,257 | ||||||
|
| |||||||
698,913 | ||||||||
ELECTRONICS — 1.27% |
| |||||||
Agilent Technologies Inc. | 3,998 | 186,467 | ||||||
Amphenol Corp. Class A | 1,867 | 141,463 | ||||||
Avnet Inc.b | 1,602 | 61,773 | ||||||
Flextronics International Ltd.b | 7,302 | 65,572 | ||||||
FLIR Systems Inc. | 1,633 | 51,080 | ||||||
Garmin Ltd. | 1,361 | 55,488 | ||||||
Honeywell International Inc. | 8,744 | 695,760 | ||||||
Sensata Technologies Holding NVb | 1,530 | 57,038 | ||||||
TE Connectivity Ltd. | 4,855 | 237,895 | ||||||
Thermo Fisher Scientific Inc. | 4,201 | 373,175 | ||||||
Trimble Navigation Ltd.a,b | 3,063 | 77,341 | ||||||
Tyco International Ltd. | 5,427 | 179,308 | ||||||
Waters Corp.a,b | 1,014 | 100,234 | ||||||
|
| |||||||
2,282,594 | ||||||||
ENGINEERING & CONSTRUCTION — 0.14% |
| |||||||
Fluor Corp. | 1,893 | 120,073 | ||||||
Jacobs Engineering Group Inc.b | 1,517 | 88,411 | ||||||
KBR Inc. | 1,721 | 51,389 | ||||||
|
| |||||||
259,873 | ||||||||
ENTERTAINMENT — 0.03% |
| |||||||
International Game Technology | 3,099 | 58,540 | ||||||
|
| |||||||
58,540 |
SCHEDULESOF INVESTMENTS | 45 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI USA ETF
August 31, 2013
Security | Shares | Value | ||||||
ENVIRONMENTAL CONTROL — 0.24% |
| |||||||
Republic Services Inc. | 3,372 | $ | 109,624 | |||||
Stericycle Inc.b | 1,003 | 112,897 | ||||||
Waste Management Inc. | 5,207 | 210,571 | ||||||
|
| |||||||
433,092 | ||||||||
FOOD — 1.71% |
| |||||||
Campbell Soup Co. | 2,383 | 102,898 | ||||||
ConAgra Foods Inc. | 4,852 | 164,095 | ||||||
General Mills Inc. | 7,517 | 370,739 | ||||||
Hershey Co. (The) | 1,803 | 165,786 | ||||||
Hormel Foods Corp. | 1,689 | 69,975 | ||||||
J.M. Smucker Co. (The) | 1,238 | 131,401 | ||||||
Kellogg Co. | 3,023 | 183,526 | ||||||
Kraft Foods Group Inc. | 6,966 | 360,630 | ||||||
Kroger Co. (The) | 5,774 | 211,328 | ||||||
McCormick & Co. Inc. NVS | 1,402 | 94,845 | ||||||
Mondelez International Inc. Class A | 19,854 | 608,922 | ||||||
Safeway Inc. | 2,790 | 72,261 | ||||||
Sysco Corp. | 6,950 | 222,539 | ||||||
Tyson Foods Inc. Class A | 3,366 | 97,446 | ||||||
Whole Foods Market Inc. | 4,106 | 216,592 | ||||||
|
| |||||||
3,072,983 | ||||||||
FOREST PRODUCTS & PAPER — 0.17% |
| |||||||
International Paper Co. | 4,929 | 232,698 | ||||||
MeadWestvaco Corp. | 2,038 | 73,062 | ||||||
|
| |||||||
305,760 | ||||||||
GAS — 0.25% | ||||||||
CenterPoint Energy Inc. | 4,730 | 108,459 | ||||||
NiSource Inc. | 3,711 | 108,584 | ||||||
Sempra Energy | 2,715 | 229,200 | ||||||
|
| |||||||
446,243 | ||||||||
HAND & MACHINE TOOLS — 0.08% | ||||||||
Stanley Black & Decker Inc. | 1,803 | 153,724 | ||||||
|
| |||||||
153,724 | ||||||||
HEALTH CARE — PRODUCTS — 1.79% |
| |||||||
Baxter International Inc. | 6,349 | 441,637 | ||||||
Becton, Dickinson and Co. | 2,287 | 222,708 | ||||||
Boston Scientific Corp.b | 15,686 | 165,958 | ||||||
C.R. Bard Inc. | 885 | 101,660 | ||||||
CareFusion Corp.b | 2,584 | 92,636 | ||||||
Covidien PLC | 5,520 | 327,888 | ||||||
Edwards Lifesciences Corp.a,b | 1,301 | 91,564 | ||||||
Henry Schein Inc.a,b | 1,025 | 103,576 | ||||||
Hologic Inc.a,b | 3,116 | 66,495 |
Security | Shares | Value | ||||||
Hospira Inc.a,b | 1,927 | $ | 75,211 | |||||
Intuitive Surgical Inc.b | 468 | 180,891 | ||||||
Medtronic Inc. | 11,887 | 615,152 | ||||||
ResMed Inc.a | 1,665 | 78,655 | ||||||
St. Jude Medical Inc. | 3,348 | 168,773 | ||||||
Stryker Corp. | 3,548 | 237,326 | ||||||
Varian Medical Systems Inc.a,b | 1,269 | 89,401 | ||||||
Zimmer Holdings Inc. | 1,967 | 155,570 | ||||||
|
| |||||||
3,215,101 | ||||||||
HEALTH CARE — SERVICES — 1.29% |
| |||||||
Aetna Inc. | 4,448 | 281,959 | ||||||
Cigna Corp. | 3,335 | 262,431 | ||||||
DaVita HealthCare Partners Inc.b | 1,041 | 111,918 | ||||||
HCA Holdings Inc. | 3,177 | 121,330 | ||||||
Humana Inc. | 1,844 | 169,795 | ||||||
Laboratory Corp. of America Holdingsb | 1,096 | 104,909 | ||||||
Quest Diagnostics Inc. | 1,852 | 108,564 | ||||||
UnitedHealth Group Inc. | 11,908 | 854,280 | ||||||
WellPoint Inc. | 3,506 | 298,501 | ||||||
|
| |||||||
2,313,687 | ||||||||
HOLDING COMPANIES — DIVERSIFIED — 0.05% |
| |||||||
Leucadia National Corp. | 3,614 | 90,097 | ||||||
|
| |||||||
90,097 | ||||||||
HOME BUILDERS — 0.13% |
| |||||||
D.R. Horton Inc. | 3,433 | 61,279 | ||||||
Lennar Corp. Class Aa | 1,858 | 59,103 | ||||||
PulteGroup Inc. | 4,022 | 61,898 | ||||||
Toll Brothers Inc.b | 1,875 | 57,394 | ||||||
|
| |||||||
239,674 | ||||||||
HOME FURNISHINGS — 0.07% | ||||||||
Whirlpool Corp. | 931 | 119,773 | ||||||
|
| |||||||
119,773 | ||||||||
HOUSEHOLD PRODUCTS & WARES — 0.38% |
| |||||||
Avery Dennison Corp. | 1,158 | 49,516 | ||||||
Church & Dwight Co. Inc. | 1,629 | 96,681 | ||||||
Clorox Co. (The) | 1,529 | 126,449 | ||||||
Kimberly-Clark Corp. | 4,496 | 420,286 | ||||||
|
| |||||||
692,932 | ||||||||
HOUSEWARES — 0.05% |
| |||||||
Newell Rubbermaid Inc. | 3,354 | 84,856 | ||||||
|
| |||||||
84,856 | ||||||||
INSURANCE — 3.80% |
| |||||||
ACE Ltd. | 3,997 | 350,617 | ||||||
Aflac Inc. | 5,469 | 316,054 |
46 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI USA ETF
August 31, 2013
Security | Shares | Value | ||||||
Alleghany Corp.b | 198 | $ | 76,644 | |||||
Allstate Corp. (The) | 5,477 | 262,458 | ||||||
American International Group Inc.b | 16,383 | 761,154 | ||||||
Aon PLC | 3,446 | 228,745 | ||||||
Arch Capital Group Ltd.b | 1,526 | 81,351 | ||||||
Assurant Inc. | 918 | 48,691 | ||||||
Axis Capital Holdings Ltd. | 1,215 | 52,233 | ||||||
Berkshire Hathaway Inc. Class Bb | 12,538 | 1,394,476 | ||||||
Chubb Corp. (The) | 3,018 | 251,007 | ||||||
Cincinnati Financial Corp. | 1,804 | 82,407 | ||||||
Everest Re Group Ltd. | 582 | 79,705 | ||||||
Fidelity National Financial Inc. Class A | 2,542 | 60,271 | ||||||
Hartford Financial Services Group Inc. (The) | 5,076 | 150,250 | ||||||
Lincoln National Corp. | 3,126 | 131,417 | ||||||
Loews Corp. | 3,885 | 172,727 | ||||||
Marsh & McLennan Companies Inc. | 6,416 | 264,532 | ||||||
MetLife Inc. | 10,895 | 503,240 | ||||||
PartnerRe Ltd. | 610 | 53,161 | ||||||
Principal Financial Group Inc. | 3,426 | 140,192 | ||||||
Progressive Corp. (The) | 6,700 | 167,969 | ||||||
Prudential Financial Inc. | 5,425 | 406,224 | ||||||
RenaissanceRe Holdings Ltd. | 513 | 44,836 | ||||||
Torchmark Corp. | 1,064 | 73,299 | ||||||
Travelers Companies Inc. (The) | 4,397 | 351,320 | ||||||
Unum Group | 3,086 | 91,130 | ||||||
W.R. Berkley Corp. | 1,344 | 55,265 | ||||||
Willis Group Holdings PLC | 1,919 | 79,216 | ||||||
XL Group PLC | 3,383 | 100,001 | ||||||
|
| |||||||
6,830,592 | ||||||||
INTERNET — 4.17% |
| |||||||
Amazon.com Inc.b | 4,260 | 1,196,975 | ||||||
eBay Inc.b | 13,692 | 684,463 | ||||||
Equinix Inc.b | 588 | 102,159 | ||||||
Expedia Inc. | 1,294 | 60,507 | ||||||
F5 Networks Inc.b | 921 | 76,793 | ||||||
Facebook Inc. Class Ab | 19,444 | 802,648 | ||||||
Google Inc. Class Ab | 3,170 | 2,684,673 | ||||||
Liberty Interactive Corp. Series Ab | 5,850 | 132,093 | ||||||
LinkedIn Corp. Class Ab | 1,073 | 257,563 | ||||||
Netflix Inc.a,b | 589 | 167,223 | ||||||
Priceline.com Inc.b | 605 | 567,811 | ||||||
Rackspace Hosting Inc.a,b | 1,369 | 61,358 | ||||||
Symantec Corp. | 8,203 | 210,079 | ||||||
TripAdvisor Inc.a,b | 1,364 | 100,895 |
Security | Shares | Value | ||||||
VeriSign Inc.b | 1,740 | $ | 83,503 | |||||
Yahoo! Inc.b | 11,389 | 308,870 | ||||||
|
| |||||||
7,497,613 | ||||||||
IRON & STEEL — 0.09% | ||||||||
Nucor Corp. | 3,700 | 168,313 | ||||||
|
| |||||||
168,313 | ||||||||
LEISURE TIME — 0.26% | ||||||||
Carnival Corp. | 4,479 | 161,647 | ||||||
Harley-Davidson Inc. | 2,639 | 158,287 | ||||||
Polaris Industries Inc. | 770 | 84,092 | ||||||
Royal Caribbean Cruises Ltd. | 1,800 | 66,042 | ||||||
|
| |||||||
470,068 | ||||||||
LODGING — 0.47% | ||||||||
Las Vegas Sands Corp. | 4,853 | 273,467 | ||||||
Marriott International Inc. Class A | 2,869 | 114,731 | ||||||
MGM Resorts Internationalb | 4,580 | 81,020 | ||||||
Starwood Hotels & Resorts Worldwide Inc. | 2,281 | 145,847 | ||||||
Wyndham Worldwide Corp. | 1,572 | 93,314 | ||||||
Wynn Resorts Ltd. | 958 | 135,116 | ||||||
|
| |||||||
843,495 | ||||||||
MACHINERY — 1.02% | ||||||||
AGCO Corp. | 1,130 | 63,913 | ||||||
Caterpillar Inc. | 7,697 | 635,310 | ||||||
Cummins Inc. | 2,108 | 259,705 | ||||||
Deere & Co. | 4,295 | 359,234 | ||||||
Flowserve Corp. | 1,675 | 93,448 | ||||||
Joy Global Inc. | 1,233 | 60,565 | ||||||
Rockwell Automation Inc. | 1,625 | 157,999 | ||||||
Roper Industries Inc. | 1,170 | 144,729 | ||||||
Xylem Inc. | 2,164 | 53,624 | ||||||
|
| |||||||
1,828,527 | ||||||||
MANUFACTURING — 3.22% | ||||||||
3M Co. | 7,683 | 872,635 | ||||||
Danaher Corp. | 6,906 | 452,481 | ||||||
Dover Corp. | 1,997 | 169,845 | ||||||
Eaton Corp. PLC | 5,540 | 350,793 | ||||||
General Electric Co. | 120,901 | 2,797,649 | ||||||
Illinois Tool Works Inc. | 4,998 | 357,207 | ||||||
Ingersoll-Rand PLC | 3,501 | 207,049 | ||||||
Leggett & Platt Inc. | 1,646 | 47,602 | ||||||
Pall Corp. | 1,325 | 91,610 | ||||||
Parker Hannifin Corp. | 1,739 | 173,813 | ||||||
Pentair Ltd. Registered | 2,379 | 143,002 |
SCHEDULESOF INVESTMENTS | 47 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI USA ETF
August 31, 2013
Security | Shares | Value | ||||||
SPX Corp. | 492 | $ | 36,428 | |||||
Textron Inc. | 3,269 | 88,067 | ||||||
|
| |||||||
5,788,181 | ||||||||
MEDIA — 3.68% | ||||||||
Cablevision NY Group Class A | 2,187 | 38,776 | ||||||
CBS Corp. Class B NVS | 6,687 | 341,706 | ||||||
Charter Communications Inc. Class Aa,b | 708 | 85,965 | ||||||
Comcast Corp. Class A | 24,908 | 1,048,378 | ||||||
Comcast Corp. Class A Special NVS | 5,779 | 235,436 | ||||||
DIRECTVa,b | 6,202 | 360,832 | ||||||
Discovery Communications Inc. Series Aa,b | 1,693 | 131,224 | ||||||
Discovery Communications Inc. Series C NVSb | 1,093 | 77,789 | ||||||
DISH Network Corp. Class A | 2,548 | 114,558 | ||||||
Liberty Global PLC Series Ab | 2,357 | 183,092 | ||||||
Liberty Global PLC Series C NVSb | 1,822 | 133,972 | ||||||
Liberty Media Corp.b | 1,102 | 150,401 | ||||||
News Corp. Class A NVSb | 4,445 | 69,787 | ||||||
Nielsen Holdings NV | 2,627 | 90,631 | ||||||
Scripps Networks Interactive Inc. Class A | 969 | 71,251 | ||||||
Sirius XM Radio Inc. | 37,280 | 133,462 | ||||||
Time Warner Cable Inc. | 3,401 | 365,097 | ||||||
Time Warner Inc. | 10,879 | 658,506 | ||||||
Twenty-First Century Fox Inc. Class A | 17,723 | 555,262 | ||||||
Twenty-First Century Fox Inc. Class B | 5,118 | 160,654 | ||||||
Viacom Inc. Class B NVS | 5,070 | 403,369 | ||||||
Walt Disney Co. (The) | 20,010 | 1,217,208 | ||||||
|
| |||||||
6,627,356 | ||||||||
METAL FABRICATE & HARDWARE — 0.20% |
| |||||||
Precision Castparts Corp. | 1,712 | 361,643 | ||||||
|
| |||||||
361,643 | ||||||||
MINING — 0.26% |
| |||||||
Alcoa Inc. | 12,441 | 95,796 | ||||||
Freeport-McMoRan Copper & Gold Inc. | 12,180 | 368,079 | ||||||
|
| |||||||
463,875 | ||||||||
OFFICE & BUSINESS EQUIPMENT — 0.07% |
| |||||||
Xerox Corp. | 13,525 | 134,980 | ||||||
|
| |||||||
134,980 | ||||||||
OIL & GAS — 8.31% |
| |||||||
Anadarko Petroleum Corp. | 5,855 | 535,264 | ||||||
Apache Corp. | 4,605 | 394,556 |
Security | Shares | Value | ||||||
Cabot Oil & Gas Corp. | 4,902 | $ | 191,815 | |||||
Cheniere Energy Inc.b | 2,406 | 67,344 | ||||||
Chesapeake Energy Corp. | 6,212 | 160,332 | ||||||
Chevron Corp. | 22,676 | 2,730,871 | ||||||
Cimarex Energy Co. | 1,010 | 84,648 | ||||||
Cobalt International Energy Inc.a,b | 3,351 | 81,764 | ||||||
Concho Resources Inc.a,b | 1,223 | 118,032 | ||||||
ConocoPhillips | 13,588 | 900,884 | ||||||
Continental Resources Inc.b | 537 | 49,544 | ||||||
Denbury Resources Inc.b | 4,340 | 75,039 | ||||||
Devon Energy Corp. | 4,538 | 259,075 | ||||||
Diamond Offshore Drilling Inc. | 811 | 51,928 | ||||||
Energen Corp. | 839 | 55,634 | ||||||
Ensco PLC Class A | 2,711 | 150,623 | ||||||
EOG Resources Inc. | 3,179 | 499,262 | ||||||
EQT Corp. | 1,778 | 152,410 | ||||||
Exxon Mobil Corp. | 51,990 | 4,531,448 | ||||||
Helmerich & Payne Inc. | 1,232 | 77,665 | ||||||
Hess Corp. | 3,622 | 271,107 | ||||||
HollyFrontier Corp. | 2,249 | 100,036 | ||||||
Marathon Oil Corp. | 8,324 | 286,595 | ||||||
Marathon Petroleum Corp. | 3,796 | 275,248 | ||||||
Murphy Oil Corp. | 2,103 | 141,784 | ||||||
Nabors Industries Ltd. | 3,384 | 52,114 | ||||||
Noble Corp. | 2,947 | 109,628 | ||||||
Noble Energy Inc. | 4,200 | 258,006 | ||||||
Occidental Petroleum Corp. | 9,409 | 829,968 | ||||||
Phillips 66 | 6,869 | 392,220 | ||||||
Pioneer Natural Resources Co. | 1,599 | 279,777 | ||||||
QEP Resources Inc. | 2,073 | 56,634 | ||||||
Range Resources Corp. | 1,899 | 142,387 | ||||||
Rowan Companies PLC Class Ab | 1,446 | 51,217 | ||||||
Southwestern Energy Co.a,b | 4,084 | 156,009 | ||||||
Tesoro Corp. | 1,605 | 73,975 | ||||||
Valero Energy Corp. | 6,367 | 226,220 | ||||||
Whiting Petroleum Corp.b | 1,426 | 71,970 | ||||||
|
| |||||||
14,943,033 | ||||||||
OIL & GAS SERVICES — 1.68% | ||||||||
Baker Hughes Inc. | 5,187 | 241,144 | ||||||
Cameron International Corp.b | 2,926 | 166,168 | ||||||
Core Laboratories NV | 541 | 81,967 | ||||||
FMC Technologies Inc.b | 2,770 | 148,555 | ||||||
Halliburton Co. | 9,872 | 473,856 | ||||||
National Oilwell Varco Inc. | 5,021 | 373,060 | ||||||
Oceaneering International Inc. | 1,255 | 97,363 |
48 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI USA ETF
August 31, 2013
Security | Shares | Value | ||||||
Schlumberger Ltd. | 15,568 | $ | 1,260,074 | |||||
Superior Energy Services Inc.b | 1,838 | 45,141 | ||||||
Weatherford International Ltd.b | 8,844 | 131,864 | ||||||
|
| |||||||
3,019,192 | ||||||||
PACKAGING & CONTAINERS — 0.19% |
| |||||||
Ball Corp. | 1,626 | 72,227 | ||||||
Crown Holdings Inc.b | 1,676 | 72,839 | ||||||
Owens-Illinois Inc.b | 1,823 | 51,755 | ||||||
Rock-Tenn Co. Class A | 827 | 91,888 | ||||||
Sealed Air Corp. | 2,153 | 61,145 | ||||||
|
| |||||||
349,854 | ||||||||
PHARMACEUTICALS — 6.98% |
| |||||||
Abbott Laboratories | 18,224 | 607,406 | ||||||
AbbVie Inc. | 18,531 | 789,606 | ||||||
Actavis Inc.a,b | 1,561 | 211,016 | ||||||
Allergan Inc. | 3,465 | 306,237 | ||||||
AmerisourceBergen Corp. | 2,728 | 155,278 | ||||||
BioMarin Pharmaceutical Inc.a,b | 1,631 | 106,782 | ||||||
Bristol-Myers Squibb Co. | 19,214 | 801,032 | ||||||
Cardinal Health Inc. | 4,022 | 202,226 | ||||||
DENTSPLY International Inc. | 1,653 | 69,409 | ||||||
Eli Lilly and Co. | 11,873 | 610,272 | ||||||
Express Scripts Holding Co.b | �� | 9,606 | 613,631 | |||||
Forest Laboratories Inc.b | 2,783 | 118,361 | ||||||
Herbalife Ltd. | 1,017 | 62,047 | ||||||
Johnson & Johnson | 32,848 | 2,838,396 | ||||||
McKesson Corp. | 2,649 | 321,615 | ||||||
Mead Johnson Nutrition Co. Class A | 2,365 | 177,446 | ||||||
Merck & Co. Inc. | 35,298 | 1,669,242 | ||||||
Mylan Inc.b | 4,453 | 157,369 | ||||||
Omnicare Inc. | 1,216 | 66,114 | ||||||
Onyx Pharmaceuticals Inc.b | 864 | 106,773 | ||||||
Patterson Companies Inc. | 1,016 | 40,518 | ||||||
Perrigo Co. | 1,038 | 126,169 | ||||||
Pfizer Inc. | 76,758 | 2,165,343 | ||||||
Warner Chilcott PLC Class A | 2,479 | 53,175 | ||||||
Zoetis Inc. | 5,854 | 170,644 | ||||||
|
| |||||||
12,546,107 | ||||||||
PIPELINES — 0.59% |
| |||||||
Kinder Morgan Inc. | 7,847 | 297,637 | ||||||
Kinder Morgan Management LLCa,b | 1,243 | 99,241 | ||||||
ONEOK Inc. | 2,389 | 122,890 | ||||||
Spectra Energy Corp. | 7,876 | 260,775 | ||||||
Williams Companies Inc. (The) | 7,951 | 288,144 | ||||||
|
| |||||||
1,068,687 |
Security | Shares | Value | ||||||
REAL ESTATE — 0.08% |
| |||||||
CBRE Group Inc. Class Aa,b | 3,266 | $ | 71,427 | |||||
Realogy Holdings Corp.a,b | 1,699 | 71,919 | ||||||
|
| |||||||
143,346 | ||||||||
REAL ESTATE INVESTMENT TRUSTS — 2.40% |
| |||||||
American Capital Agency Corp. | 4,663 | 106,130 | ||||||
American Tower Corp. | 4,649 | 323,059 | ||||||
Annaly Capital Management Inc. | 11,018 | 128,580 | ||||||
AvalonBay Communities Inc. | 1,432 | 177,425 | ||||||
Boston Properties Inc. | 1,786 | 183,065 | ||||||
Camden Property Trust | 984 | 60,801 | ||||||
Digital Realty Trust Inc.a | 1,484 | 82,510 | ||||||
Duke Realty Corp. | 3,842 | 56,055 | ||||||
Equity Residentiala | 3,987 | 206,885 | ||||||
Federal Realty Investment Trust | 781 | 75,999 | ||||||
General Growth Properties Inc. | 5,670 | 108,751 | ||||||
HCP Inc. | 5,345 | 217,702 | ||||||
Health Care REIT Inc.a | 3,275 | 201,216 | ||||||
Host Hotels & Resorts Inc.a | 8,735 | 148,757 | ||||||
Kimco Realty Corp. | 4,755 | 95,243 | ||||||
Liberty Property Trust | 1,665 | 57,609 | ||||||
Macerich Co. (The) | 1,596 | 89,823 | ||||||
Plum Creek Timber Co. Inc.a | 1,880 | 83,303 | ||||||
Prologis Inc. | 5,835 | 205,625 | ||||||
Public Storage | 1,703 | 259,997 | ||||||
Rayonier Inc. | 1,490 | 82,308 | ||||||
Realty Income Corp. | 2,039 | 80,541 | ||||||
Regency Centers Corp. | 1,051 | 49,975 | ||||||
Simon Property Group Inc. | 3,633 | 529,074 | ||||||
SL Green Realty Corp. | 962 | 83,877 | ||||||
UDR Inc. | 2,916 | 65,872 | ||||||
Ventas Inc. | 3,394 | 211,310 | ||||||
Vornado Realty Trust | 1,989 | 161,706 | ||||||
Weyerhaeuser Co. | 6,730 | 184,267 | ||||||
|
| |||||||
4,317,465 | ||||||||
RETAIL — 6.37% |
| |||||||
Advance Auto Parts Inc. | 852 | 68,220 | ||||||
AutoZone Inc.b | 420 | 176,375 | ||||||
Bed Bath & Beyond Inc.b | 2,571 | 189,586 | ||||||
Best Buy Co. Inc. | 3,217 | 115,812 | ||||||
CarMax Inc.b | 2,603 | 123,799 | ||||||
Chipotle Mexican Grill Inc.b | 361 | 147,349 | ||||||
Costco Wholesale Corp. | 5,106 | 571,208 | ||||||
CVS Caremark Corp. | 14,315 | 830,986 | ||||||
Darden Restaurants Inc. | 1,502 | 69,407 |
SCHEDULESOF INVESTMENTS | 49 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI USA ETF
August 31, 2013
Security | Shares | Value | ||||||
Dick’s Sporting Goods Inc. | 1,202 | $ | 55,785 | |||||
Dollar General Corp.b | 3,665 | 197,800 | ||||||
Dollar Tree Inc.b | 2,592 | 136,598 | ||||||
Family Dollar Stores Inc. | 1,219 | 86,781 | ||||||
GameStop Corp. Class A | 1,411 | 70,846 | ||||||
Gap Inc. (The) | 3,534 | 142,915 | ||||||
Home Depot Inc. (The) | 17,079 | 1,272,215 | ||||||
J.C. Penney Co. Inc.a,b | 2,346 | 29,278 | ||||||
Kohl’s Corp. | 2,464 | 126,428 | ||||||
L Brands Inc. | 2,857 | 163,878 | ||||||
Lowe’s Companies Inc. | 12,725 | 583,059 | ||||||
Lululemon Athletica Inc.a,b | 1,180 | 83,591 | ||||||
Macy’s Inc. | 4,484 | 199,224 | ||||||
McDonald’s Corp. | 11,729 | 1,106,748 | ||||||
Nordstrom Inc. | 1,820 | 101,429 | ||||||
O’Reilly Automotive Inc.b | 1,298 | 159,278 | ||||||
PetSmart Inc. | 1,146 | 80,713 | ||||||
PVH Corp. | 962 | 123,857 | ||||||
Ross Stores Inc. | 2,568 | 172,724 | ||||||
Sears Holdings Corp.a,b | 432 | 19,112 | ||||||
Staples Inc. | 7,855 | 109,263 | ||||||
Starbucks Corp. | 8,777 | 618,954 | ||||||
Target Corp. | 7,126 | 451,147 | ||||||
Tiffany & Co. | 1,484 | 114,431 | ||||||
TJX Companies Inc. (The) | 8,414 | 443,586 | ||||||
Tractor Supply Co. | 820 | 100,343 | ||||||
Ulta Salon, Cosmetics & Fragrance Inc.b | 707 | 70,163 | ||||||
Urban Outfitters Inc.b | 1,358 | 56,941 | ||||||
Wal-Mart Stores Inc. | 19,232 | 1,403,551 | ||||||
Walgreen Co. | 10,535 | 506,417 | ||||||
Yum! Brands Inc. | 5,261 | 368,375 | ||||||
|
| |||||||
11,448,172 | ||||||||
SAVINGS & LOANS — 0.10% | ||||||||
Hudson City Bancorp Inc. | 5,539 | 50,904 | ||||||
New York Community Bancorp Inc. | 5,117 | 74,964 | ||||||
People’s United Financial Inc. | 3,820 | 54,320 | ||||||
|
| |||||||
180,188 | ||||||||
SEMICONDUCTORS — 2.75% |
| |||||||
Altera Corp. | 3,740 | 131,536 | ||||||
Analog Devices Inc. | 3,586 | 165,960 | ||||||
Applied Materials Inc. | 14,164 | 212,602 | ||||||
Avago Technologies Ltd. | 2,861 | 110,177 | ||||||
Broadcom Corp. Class A | 6,056 | 152,974 | ||||||
Cree Inc.b | 1,360 | 75,466 |
Security | Shares | Value | ||||||
Intel Corp. | 58,141 | $ | 1,277,939 | |||||
KLA-Tencor Corp. | 1,941 | 107,046 | ||||||
Lam Research Corp.b | 1,892 | 88,300 | ||||||
Linear Technology Corp. | 2,772 | 106,251 | ||||||
LSI Corp.b | 6,449 | 47,787 | ||||||
Marvell Technology Group Ltd. | 4,638 | 56,166 | ||||||
Maxim Integrated Products Inc. | 3,396 | 94,562 | ||||||
Microchip Technology Inc. | 2,344 | 90,971 | ||||||
Micron Technology Inc.b | 12,087 | 164,020 | ||||||
NVIDIA Corp. | 6,749 | 99,548 | ||||||
QUALCOMM Inc. | 20,209 | 1,339,452 | ||||||
Texas Instruments Inc. | 13,013 | 497,097 | ||||||
Xilinx Inc. | 3,112 | 135,123 | ||||||
|
| |||||||
4,952,977 | ||||||||
SOFTWARE — 3.81% |
| |||||||
Activision Blizzard Inc. | 5,189 | 84,684 | ||||||
Adobe Systems Inc.b | 5,607 | 256,520 | ||||||
Akamai Technologies Inc.b | 2,067 | 95,041 | ||||||
ANSYS Inc.b | 1,083 | 90,950 | ||||||
Autodesk Inc.b | 2,646 | 97,241 | ||||||
BMC Software Inc.b | 1,498 | 68,908 | ||||||
CA Inc. | 3,750 | 109,688 | ||||||
Cerner Corp.b | 3,613 | 166,415 | ||||||
Citrix Systems Inc.b | 2,174 | 153,854 | ||||||
Dun & Bradstreet Corp. (The) | 478 | 47,551 | ||||||
Electronic Arts Inc.b | 3,498 | 93,187 | ||||||
Fidelity National Information Services Inc. | 3,439 | 152,898 | ||||||
Fiserv Inc.b | 1,554 | 149,604 | ||||||
Intuit Inc. | 3,325 | 211,237 | ||||||
Microsoft Corp. | 92,763 | 3,098,284 | ||||||
Nuance Communications Inc.b | 2,917 | 55,686 | ||||||
Oracle Corp. | 44,061 | 1,403,783 | ||||||
Red Hat Inc.b | 2,193 | 110,790 | ||||||
Salesforce.com Inc.a,b | 6,561 | 322,342 | ||||||
VMware Inc. Class Ab | 974 | 81,962 | ||||||
|
| |||||||
6,850,625 | ||||||||
TELECOMMUNICATIONS — 3.67% |
| |||||||
AT&T Inc. | 62,904 | 2,128,042 | ||||||
CenturyLink Inc. | 7,118 | 235,748 | ||||||
Cisco Systems Inc. | 62,505 | 1,456,992 | ||||||
Corning Inc. | 17,228 | 241,881 | ||||||
Crown Castle International Corp.b | 3,454 | 239,777 | ||||||
Frontier Communications Corp.a | 11,638 | 50,393 | ||||||
Harris Corp. | 1,270 | 71,920 |
50 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI USA ETF
August 31, 2013
Security | Shares | Value | ||||||
Juniper Networks Inc.b | 5,853 | $ | 110,622 | |||||
Level 3 Communications Inc.a,b | 1,775 | 39,689 | ||||||
Motorola Solutions Inc. | 2,882 | 161,421 | ||||||
SBA Communications Corp. Class Ab | 1,511 | 113,325 | ||||||
Sprint Corp.b | 11,109 | 74,541 | ||||||
T-Mobile US Inc.b | 1,644 | 38,387 | ||||||
Verizon Communications Inc. | 33,461 | 1,585,382 | ||||||
Windstream Corp. | 6,854 | 55,312 | ||||||
|
| |||||||
6,603,432 | ||||||||
TEXTILES — 0.05% |
| |||||||
Mohawk Industries Inc.a,b | 723 | 84,945 | ||||||
|
| |||||||
84,945 | ||||||||
TOYS, GAMES & HOBBIES — 0.13% |
| |||||||
Hasbro Inc. | 1,360 | 61,989 | ||||||
Mattel Inc. | 4,072 | 164,916 | ||||||
|
| |||||||
226,905 | ||||||||
TRANSPORTATION — 1.62% |
| |||||||
C.H. Robinson Worldwide Inc. | 1,876 | 106,688 | ||||||
CSX Corp. | 11,997 | 295,246 | ||||||
Expeditors International of Washington Inc. | 2,437 | 98,845 | ||||||
FedEx Corp. | 3,523 | 378,229 | ||||||
J.B. Hunt Transport Services Inc. | 1,104 | 79,488 | ||||||
Kansas City Southern Industries Inc. | 1,286 | 135,570 | ||||||
Norfolk Southern Corp. | 3,682 | 265,693 | ||||||
Union Pacific Corp. | 5,457 | 837,868 | ||||||
United Parcel Service Inc. Class B | 8,472 | 725,034 | ||||||
|
| |||||||
2,922,661 | ||||||||
WATER — 0.05% |
| |||||||
American Water Works Co. Inc. | 2,059 | 83,884 | ||||||
|
| |||||||
83,884 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $145,889,785) |
| 179,402,528 | ||||||
SHORT-TERM INVESTMENTS — 1.53% |
| |||||||
MONEY MARKET FUNDS — 1.53% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.15%c,d,e | 2,401,494 | 2,401,494 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
0.13%c,d,e | 152,493 | 152,493 |
Security | Shares | Value | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.00%c,d | 185,431 | $ | 185,431 | |||||
|
| |||||||
2,739,418 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $2,739,418) |
| 2,739,418 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $148,629,203) | 182,141,946 | |||||||
SHORT POSITIONSf — (0.01)% |
| |||||||
COMMON STOCKS — (0.01)% |
| |||||||
Murphy USA Inc.b | (525 | ) | (19,399 | ) | ||||
|
| |||||||
(19,399 | ) | |||||||
|
| |||||||
TOTAL SHORT POSITIONS |
| |||||||
(Proceeds: $19,406) |
| (19,399 | ) | |||||
Other Assets, Less Liabilities — (1.28)% |
| (2,292,377 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 179,830,170 | |||||
|
|
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 | 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. |
f | See Note 1. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 51 |
Table of Contents
Statements of Assets and Liabilities
iSHARES®, INC.
August 31, 2013
iShares MSCI Brazil Capped ETF | iShares MSCI | iShares MSCI Chile | ||||||||||
ASSETS | ||||||||||||
Investments, at cost: | ||||||||||||
Unaffiliated | $ | 3,847,597,502 | $ | 3,928,770,878 | $ | 317,365,842 | ||||||
Affiliated (Note 2) | 8,754,616 | 36,504,283 | 461,635 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments | $ | 3,856,352,118 | $ | 3,965,275,161 | $ | 317,827,477 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 4,945,887,326 | $ | 3,416,307,222 | $ | 364,577,318 | ||||||
Affiliated (Note 2) | 8,754,616 | 36,504,283 | 461,635 | |||||||||
|
|
|
|
|
| |||||||
Total fair value of investments | 4,954,641,942 | 3,452,811,505 | 365,038,953 | |||||||||
Foreign currency, at valueb | 38,496,664 | 10,411,704 | — | |||||||||
Foreign currency pledged to broker, at valueb | — | 1,298,344 | — | |||||||||
Receivables: | ||||||||||||
Investment securities sold | 16,452,995 | 5,881,165 | 13,100,694 | |||||||||
Dividends and interest | 20,170,164 | �� | 5,597,725 | 100,002 | ||||||||
Capital shares sold | 46,755,279 | 56,811 | — | |||||||||
Futures variation margin | — | 419,608 | — | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 5,076,517,044 | 3,476,476,862 | 378,239,649 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 69,814,941 | 11,227,320 | 8,366,985 | |||||||||
Collateral for securities on loan (Note 5) | — | 35,561,866 | — | |||||||||
Capital shares redeemed | — | — | 4,774,254 | |||||||||
Deposit for capital contribution | 20,364,647 | — | — | |||||||||
Investment advisory fees (Note 2) | 2,707,122 | 1,464,422 | 208,794 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 92,886,710 | 48,253,608 | 13,350,033 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 4,983,630,334 | $ | 3,428,223,254 | $ | 364,889,616 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 5,678,919,320 | $ | 4,260,003,375 | $ | 428,263,237 | ||||||
Undistributed (distributions in excess of) net investment income | (11,312,557 | ) | 5,407,684 | — | ||||||||
Accumulated net realized loss | (1,779,520,646 | ) | (324,896,765 | ) | (110,582,504 | ) | ||||||
Net unrealized appreciation (depreciation) | 1,095,544,217 | (512,291,040 | ) | 47,208,883 | ||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 4,983,630,334 | $ | 3,428,223,254 | $ | 364,889,616 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingc | 117,200,000 | 125,400,000 | 7,650,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 42.52 | $ | 27.34 | $ | 47.70 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $ —, $33,466,014 and $ —, respectively. See Note 5. |
b | Cost of foreign currency including currency pledged to broker, if any: $38,496,664, $11,910,345 and $ —, respectively. |
c | $0.001 par value, number of shares authorized: 500 million, 340.2 million and 200 million, respectively. |
See notes to financial statements.
52 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Assets and Liabilities (Continued)
iSHARES®, INC.
August 31, 2013
iShares MSCI Colombia Capped ETF | iShares Capped ETF | iShares Capped ETF | ||||||||||
ASSETS | ||||||||||||
Investments, at cost: | ||||||||||||
Unaffiliated | $ | 17,750,941 | $ | 91,489,926 | $ | 2,560,441,817 | ||||||
Affiliated (Note 2) | 16,889 | 1,086,120 | 119,278,387 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments | $ | 17,767,830 | $ | 92,576,046 | $ | 2,679,720,204 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 18,125,882 | $ | 70,361,894 | $ | 2,208,086,297 | ||||||
Affiliated (Note 2) | 16,889 | 1,086,120 | 105,002,134 | |||||||||
|
|
|
|
|
| |||||||
Total fair value of investments | 18,142,771 | 71,448,014 | 2,313,088,431 | |||||||||
Foreign currency, at valueb | 7,290 | 74,962 | 4,882,800 | |||||||||
Receivables: | ||||||||||||
Investment securities sold | 364,909 | 2,495,863 | 143,733,053 | |||||||||
Dividends and interest | 3,565 | 227,537 | 693,380 | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 18,518,535 | 74,246,376 | 2,462,397,664 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 321,016 | 2,408,446 | 150,994,989 | |||||||||
Collateral for securities on loan (Note 5) | — | 1,082,302 | 93,317,351 | |||||||||
Capital shares redeemed | — | 5,572 | 35,405 | |||||||||
Investment advisory fees (Note 2) | 9,558 | 40,271 | 997,723 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 330,574 | 3,536,591 | 245,345,468 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 18,187,961 | $ | 70,709,785 | $ | 2,217,052,196 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 17,835,537 | $ | 125,211,746 | $ | 2,758,264,847 | ||||||
Undistributed (distributions in excess of) net investment income | 15,989 | (114,132 | ) | 4,231,855 | ||||||||
Accumulated net realized loss | (36,917 | ) | (33,258,474 | ) | (178,603,132 | ) | ||||||
Net unrealized appreciation (depreciation) | 373,352 | (21,129,355 | ) | (366,841,374 | ) | |||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 18,187,961 | $ | 70,709,785 | $ | 2,217,052,196 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingc | 700,000 | 1,650,000 | 35,800,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 25.98 | $ | 42.85 | $ | 61.93 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $ —, $1,032,737 and $88,161,186, respectively. See Note 5. |
b | Cost of foreign currency: $7,480, $74,984 and $5,070,367, respectively. |
c | $0.001 par value, number of shares authorized: 25 million, 500 million and 255 million, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 53 |
Table of Contents
Statements of Assets and Liabilities (Continued)
iSHARES®, INC.
August 31, 2013
iShares MSCI South Africa ETF | iShares MSCI Turkey ETF | iShares MSCI USA ETF | ||||||||||
ASSETS | ||||||||||||
Investments, at cost: | ||||||||||||
Unaffiliated | $ | 631,716,937 | $ | 612,628,101 | $ | 145,231,700 | ||||||
Affiliated (Note 2) | 6,400,257 | 22,678,981 | 3,397,503 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments | $ | 638,117,194 | $ | 635,307,082 | $ | 148,629,203 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 547,356,483 | $ | 435,651,172 | $ | 178,544,161 | ||||||
Affiliated (Note 2) | 6,400,257 | 22,678,981 | 3,597,785 | |||||||||
|
|
|
|
|
| |||||||
Total fair value of investments | 553,756,740 | 458,330,153 | 182,141,946 | |||||||||
Foreign currency, at valueb | 508,407 | 624,009 | — | |||||||||
Receivables: | ||||||||||||
Investment securities sold | 6,198,773 | — | 872,591 | |||||||||
Dividends and interest | 51,385 | 54,809 | 391,784 | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 560,515,305 | 459,008,971 | 183,406,321 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Short positions, at valuec | — | — | 19,399 | |||||||||
Payables: | ||||||||||||
Investment securities purchased | 6,297,215 | — | 979,340 | |||||||||
Collateral for securities on loan (Note 5) | 6,324,022 | 22,605,903 | 2,553,987 | |||||||||
Capital shares redeemed | 15,491 | 7,402 | — | |||||||||
Investment advisory fees (Note 2) | 309,252 | 319,620 | 23,425 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 12,945,980 | 22,932,925 | 3,576,151 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 547,569,325 | $ | 436,076,046 | $ | 179,830,170 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 709,503,045 | $ | 655,098,779 | $ | 146,194,352 | ||||||
Undistributed (distributions in excess of) net investment income | (999,286 | ) | (53 | ) | 618,856 | |||||||
Accumulated net realized loss | (76,560,220 | ) | (42,020,298 | ) | (495,788 | ) | ||||||
Net unrealized appreciation (depreciation) | (84,374,214 | ) | (177,002,382 | ) | 33,512,750 | |||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 547,569,325 | $ | 436,076,046 | $ | 179,830,170 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingd | 9,300,000 | 8,900,000 | 5,100,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 58.88 | $ | 49.00 | $ | 35.26 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $6,074,482, $20,803,583 and $2,496,179, respectively. See Note 5. |
b | Cost of foreign currency: $522,239, $649,422 and $ —, respectively. |
c | Proceeds: $ —, $ — and $19,406, respectively. See Note 1. |
d | $0.001 par value, number of shares authorized: 400 million, 200 million and 500 million, respectively. |
See notes to financial statements.
54 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Operations
iSHARES®, INC.
Year ended August 31, 2013
iShares MSCI Brazil Capped ETF | iShares MSCI | iShares MSCI Chile Capped ETF | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliateda | $ | 281,025,241 | $ | 111,465,619 | $ | 9,208,407 | ||||||
Interest — unaffiliated | — | 9,861 | — | |||||||||
Interest — affiliated (Note 2) | 3,139 | 2,350 | 1,091 | |||||||||
Securities lending income — affiliated (Note 2) | 42 | 844,993 | — | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 281,028,422 | 112,322,823 | 9,209,498 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 47,012,111 | 21,658,463 | 3,237,806 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 47,012,111 | 21,658,463 | 3,237,806 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 234,016,311 | 90,664,360 | 5,971,692 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | (544,885,449 | ) | (107,934,072 | ) | (18,003,661 | ) | ||||||
In-kind redemptions — unaffiliated | 47,225,661 | 108,300,719 | — | |||||||||
Futures contracts | — | 225,366 | — | |||||||||
Foreign currency transactions | (7,245,398 | ) | (809,810 | ) | (302,045 | ) | ||||||
|
|
|
|
|
| |||||||
Net realized loss | (504,905,186 | ) | (217,797 | ) | (18,305,706 | ) | ||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments | (729,963,903 | ) | (22,097,415 | ) | (89,352,936 | ) | ||||||
Futures contracts | — | 464,579 | — | |||||||||
Translation of assets and liabilities in foreign currencies | (1,667,653 | ) | (296,248 | ) | 1,634 | |||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | (731,631,556 | ) | (21,929,084 | ) | (89,351,302 | ) | ||||||
|
|
|
|
|
| |||||||
Net realized and unrealized loss | (1,236,536,742 | ) | (22,146,881 | ) | (107,657,008 | ) | ||||||
|
|
|
|
|
| |||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | (1,002,520,431 | ) | $ | 68,517,479 | $ | (101,685,316 | ) | ||||
|
|
|
|
|
|
a | Net of foreign withholding tax of $23,279,359, $19,588,934 and $2,466,650, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 55 |
Table of Contents
Statements of Operations (Continued)
iSHARES®, INC.
Period ended August 31, 2013
iShares MSCI Colombia | iShares Capped ETF | iShares MSCI Mexico Capped ETF | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliatedb | $ | 37,950 | $ | 2,127,786 | $ | 33,505,915 | ||||||
Interest — affiliated (Note 2) | — | 37 | 426 | |||||||||
Securities lending income — affiliated (Note 2) | — | 101,065 | 704,850 | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 37,950 | 2,228,888 | 34,211,191 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 19,007 | 482,473 | 10,823,841 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 19,007 | 482,473 | 10,823,841 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 18,943 | 1,746,415 | 23,387,350 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | (36,917 | ) | (4,587,246 | ) | (132,436,738 | ) | ||||||
Investments — affiliated (Note 2) | — | — | (2,957,795 | ) | ||||||||
In-kind redemptions — unaffiliated | — | 2,113,907 | 195,130,266 | |||||||||
In-kind redemptions — affiliated (Note 2) | — | — | (1,479,234 | ) | ||||||||
Foreign currency transactions | (2,954 | ) | 22,024 | (145,644 | ) | |||||||
|
|
|
|
|
| |||||||
Net realized gain (loss) | (39,871 | ) | (2,451,315 | ) | 58,110,855 | |||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments | 373,135 | 13,326,411 | (250,977,871 | ) | ||||||||
Translation of assets and liabilities in foreign currencies | 217 | (1,774 | ) | (202,567 | ) | |||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | 373,352 | 13,324,637 | (251,180,438 | ) | ||||||||
|
|
|
|
|
| |||||||
Net realized and unrealized gain (loss) | 333,481 | 10,873,322 | (193,069,583 | ) | ||||||||
|
|
|
|
|
| |||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | 352,424 | $ | 12,619,737 | $ | (169,682,233 | ) | |||||
|
|
|
|
|
|
a | For the period from June 18, 2013 (commencement of operations) to August 31, 2013. |
b | Net of foreign withholding tax of $1,106, $516,145 and $88,923, respectively. |
See notes to financial statements.
56 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Operations (Continued)
iSHARES®, INC.
Year ended August 31, 2013
iShares MSCI South Africa ETF | iShares MSCI Turkey ETF | iShares MSCI USA ETF | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliateda | $ | 13,581,353 | $ | 16,026,974 | $ | 3,548,785 | ||||||
Dividends — affiliated (Note 2) | — | — | 19,567 | |||||||||
Interest — affiliated (Note 2) | 200 | 92 | 96 | |||||||||
Securities lending income — affiliated (Note 2) | 68,917 | 752,701 | 9,216 | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 13,650,470 | 16,779,767 | 3,577,664 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 3,087,433 | 4,475,653 | 238,033 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 3,087,433 | 4,475,653 | 238,033 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 10,563,037 | 12,304,114 | 3,339,631 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | (18,288,728 | ) | (13,834,943 | ) | (116,525 | ) | ||||||
Investments — affiliated (Note 2) | — | — | (599 | ) | ||||||||
In-kind redemptions — unaffiliated | 28,196,922 | 37,250,677 | 4,762,730 | |||||||||
In-kind redemptions — affiliated (Note 2) | — | — | 20,444 | |||||||||
Foreign currency transactions | (9,670 | ) | (74,486 | ) | — | |||||||
|
|
|
|
|
| |||||||
Net realized gain | 9,898,524 | 23,341,248 | 4,666,050 | |||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments | (55,226,184 | ) | (125,822,451 | ) | 18,945,592 | |||||||
Short positions (Note 1) | — | — | 7 | |||||||||
Translation of assets and liabilities in foreign currencies | 1,501 | (24,948 | ) | — | ||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | (55,224,683 | ) | (125,847,399 | ) | 18,945,599 | |||||||
|
|
|
|
|
| |||||||
Net realized and unrealized gain (loss) | (45,326,159 | ) | (102,506,151 | ) | 23,611,649 | |||||||
|
|
|
|
|
| |||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | (34,763,122 | ) | $ | (90,202,037 | ) | $ | 26,951,280 | ||||
|
|
|
|
|
|
a | Net of foreign withholding tax of $1,961,428, $2,640,047 and $2,355, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 57 |
Table of Contents
Statements of Changes in Net Assets
iSHARES®, INC.
iShares MSCI Brazil Capped ETF | iShares MSCI Canada ETF | |||||||||||||||
Year ended August 31, 2013 | Year ended August 31, 2012 | Year ended August 31, 2013 | Year ended August 31, 2012 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 234,016,311 | $ | 265,582,641 | $ | 90,664,360 | $ | 87,661,937 | ||||||||
Net realized gain (loss) | (504,905,186 | ) | (543,223,728 | ) | (217,797 | ) | 21,344,695 | |||||||||
Net change in unrealized appreciation/depreciation | (731,631,556 | ) | (1,354,671,920 | ) | (21,929,084 | ) | (434,518,038 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | (1,002,520,431 | ) | (1,632,313,007 | ) | 68,517,479 | (325,511,406 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (201,420,612 | ) | (82,370,233 | ) | (101,089,405 | ) | (94,130,044 | ) | ||||||||
Return of capital | — | (133,826,010 | ) | — | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (201,420,612 | ) | (216,196,243 | ) | (101,089,405 | ) | (94,130,044 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 2,841,464,893 | 139,197,302 | 644,392,669 | 652,923,013 | ||||||||||||
Cost of shares redeemed | (4,024,510,606 | ) | (2,252,192,423 | ) | (1,438,141,791 | ) | (1,071,283,795 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease in net assets from capital share transactions | (1,183,045,713 | ) | (2,112,995,121 | ) | (793,749,122 | ) | (418,360,782 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
DECREASE IN NET ASSETS | (2,386,986,756 | ) | (3,961,504,371 | ) | (826,321,048 | ) | (838,002,232 | ) | ||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 7,370,617,090 | 11,332,121,461 | 4,254,544,302 | 5,092,546,534 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year | $ | 4,983,630,334 | $ | 7,370,617,090 | $ | 3,428,223,254 | $ | 4,254,544,302 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of year | $ | (11,312,557 | ) | $ | (53,385,526 | ) | $ | 5,407,684 | $ | 12,529,913 | ||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 56,450,000 | 2,600,000 | 22,700,000 | 23,900,000 | ||||||||||||
Shares redeemed | (79,350,000 | ) | (36,850,000 | ) | (51,900,000 | ) | (39,700,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease in shares outstanding | (22,900,000 | ) | (34,250,000 | ) | (29,200,000 | ) | (15,800,000 | ) | ||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
58 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Chile Capped ETF | iShares MSCI Colombia Capped ETF | |||||||||||
Year ended August 31, 2013 | Year ended August 31, 2012 | Period from to | ||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||
OPERATIONS: | ||||||||||||
Net investment income | $ | 5,971,692 | $ | 9,312,365 | $ | 18,943 | ||||||
Net realized loss | (18,305,706 | ) | (53,947,353 | ) | (39,871 | ) | ||||||
Net change in unrealized appreciation/depreciation | (89,351,302 | ) | (39,629,429 | ) | 373,352 | |||||||
|
|
|
|
|
| |||||||
Net increase (decrease) in net assets resulting from operations | (101,685,316 | ) | (84,264,417 | ) | 352,424 | |||||||
|
|
|
|
|
| |||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||
From net investment income | (5,669,647 | ) | (8,674,940 | ) | — | |||||||
Return of capital | (235,875 | ) | (430,786 | ) | — | |||||||
|
|
|
|
|
| |||||||
Total distributions to shareholders | (5,905,522 | ) | (9,105,726 | ) | — | |||||||
|
|
|
|
|
| |||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||
Proceeds from shares sold | 96,241,277 | 168,360,287 | 17,835,537 | |||||||||
Cost of shares redeemed | (172,557,468 | ) | (234,211,464 | ) | — | |||||||
|
|
|
|
|
| |||||||
Net increase (decrease) in net assets from capital share transactions | (76,316,191 | ) | (65,851,177 | ) | 17,835,537 | |||||||
|
|
|
|
|
| |||||||
INCREASE (DECREASE) IN NET ASSETS | (183,907,029 | ) | (159,221,320 | ) | 18,187,961 | |||||||
NET ASSETS | ||||||||||||
Beginning of period | 548,796,645 | 708,017,965 | — | |||||||||
|
|
|
|
|
| |||||||
End of period | $ | 364,889,616 | $ | 548,796,645 | $ | 18,187,961 | ||||||
|
|
|
|
|
| |||||||
Undistributed net investment income included in net assets at end of period | $ | — | $ | — | $ | 15,989 | ||||||
|
|
|
|
|
| |||||||
SHARES ISSUED AND REDEEMED | ||||||||||||
Shares sold | 1,600,000 | 2,600,000 | 700,000 | |||||||||
Shares redeemed | (3,050,000 | ) | (4,050,000 | ) | — | |||||||
|
|
|
|
|
| |||||||
Net increase (decrease) in shares outstanding | (1,450,000 | ) | (1,450,000 | ) | 700,000 | |||||||
|
|
|
|
|
|
a | Commencement of operations. |
See notes to financial statements.
FINANCIAL STATEMENTS | 59 |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Israel Capped ETF | iShares MSCI Mexico Capped ETF | |||||||||||||||
Year ended August 31, 2013 | Year ended August 31, 2012 | Year ended August 31, 2013 | Year ended August 31, 2012 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 1,746,415 | $ | 2,116,888 | $ | 23,387,350 | $ | 14,544,267 | ||||||||
Net realized gain (loss) | (2,451,315 | ) | (8,782,793 | ) | 58,110,855 | 51,713,777 | ||||||||||
Net change in unrealized appreciation/depreciation | 13,324,637 | (7,354,630 | ) | (251,180,438 | ) | (17,415,752 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 12,619,737 | (14,020,535 | ) | (169,682,233 | ) | 48,842,292 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (1,885,659 | ) | (1,986,153 | ) | (20,571,276 | ) | (16,941,924 | ) | ||||||||
Return of capital | — | (63,813 | ) | — | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (1,885,659 | ) | (2,049,966 | ) | (20,571,276 | ) | (16,941,924 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 4,057,008 | 54,151,938 | 2,551,091,943 | 1,078,823,186 | ||||||||||||
Cost of shares redeemed | (12,993,789 | ) | (47,186,462 | ) | (1,326,485,790 | ) | (1,171,754,823 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | (8,936,781 | ) | 6,965,476 | 1,224,606,153 | (92,931,637 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | 1,797,297 | (9,105,025 | ) | 1,034,352,644 | (61,031,269 | ) | ||||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 68,912,488 | 78,017,513 | 1,182,699,552 | 1,243,730,821 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year | $ | 70,709,785 | $ | 68,912,488 | $ | 2,217,052,196 | $ | 1,182,699,552 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of year | $ | (114,132 | ) | $ | (3,903 | ) | $ | 4,231,855 | $ | 1,561,425 | ||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 100,000 | 1,300,000 | 36,200,000 | 18,600,000 | ||||||||||||
Shares redeemed | (300,000 | ) | (1,150,000 | ) | (19,800,000 | ) | (20,500,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | (200,000 | ) | 150,000 | 16,400,000 | (1,900,000 | ) | ||||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
60 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI South Africa ETF | iShares MSCI Turkey ETF | |||||||||||||||
Year ended August 31, 2013 | Year ended August 31, 2012 | Year ended August 31, 2013 | Year ended August 31, 2012 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 10,563,037 | $ | 16,812,091 | $ | 12,304,114 | $ | 7,409,333 | ||||||||
Net realized gain (loss) | 9,898,524 | 9,214,776 | 23,341,248 | (43,049,648 | ) | |||||||||||
Net change in unrealized appreciation/depreciation | (55,224,683 | ) | (38,029,481 | ) | (125,847,399 | ) | 111,616,412 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | (34,763,122 | ) | (12,002,614 | ) | (90,202,037 | ) | 75,976,097 | |||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (13,575,195 | ) | (16,263,704 | ) | (12,901,893 | ) | (8,952,333 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (13,575,195 | ) | (16,263,704 | ) | (12,901,893 | ) | (8,952,333 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 295,390,025 | 164,594,240 | 506,879,433 | 169,170,485 | ||||||||||||
Cost of shares redeemed | (171,404,561 | ) | (168,507,993 | ) | (528,983,742 | ) | (123,586,926 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | 123,985,464 | (3,913,753 | ) | (22,104,309 | ) | 45,583,559 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | 75,647,147 | (32,180,071 | ) | (125,208,239 | ) | 112,607,323 | ||||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 471,922,178 | 504,102,249 | 561,284,285 | 448,676,962 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year | $ | 547,569,325 | $ | 471,922,178 | $ | 436,076,046 | $ | 561,284,285 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of year | $ | (999,286 | ) | $ | (948,355 | ) | $ | (53 | ) | $ | (529,751 | ) | ||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 4,800,000 | 2,600,000 | 7,950,000 | 3,250,000 | ||||||||||||
Shares redeemed | (2,800,000 | ) | (2,600,000 | ) | (9,050,000 | ) | (2,650,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | 2,000,000 | — | (1,100,000 | ) | 600,000 | |||||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
FINANCIAL STATEMENTS | 61 |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI USA ETF | ||||||||
Year ended August 31, 2013 | Year ended August 31, 2012 | |||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||
OPERATIONS: | ||||||||
Net investment income | $ | 3,339,631 | $ | 2,008,350 | ||||
Net realized gain | 4,666,050 | 1,787,070 | ||||||
Net change in unrealized appreciation/depreciation | 18,945,599 | 14,419,985 | ||||||
|
|
|
| |||||
Net increase in net assets resulting from operations | 26,951,280 | 18,215,405 | ||||||
|
|
|
| |||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||
From net investment income | (3,310,642 | ) | (1,429,449 | ) | ||||
|
|
|
| |||||
Total distributions to shareholders | (3,310,642 | ) | (1,429,449 | ) | ||||
|
|
|
| |||||
CAPITAL SHARE TRANSACTIONS: | ||||||||
Proceeds from shares sold | 36,217,071 | 150,498,448 | ||||||
Cost of shares redeemed | (25,497,372 | ) | (27,048,052 | ) | ||||
|
|
|
| |||||
Net increase in net assets from capital share transactions | 10,719,699 | 123,450,396 | ||||||
|
|
|
| |||||
INCREASE IN NET ASSETS | 34,360,337 | 140,236,352 | ||||||
NET ASSETS | ||||||||
Beginning of year | 145,469,833 | 5,233,481 | ||||||
|
|
|
| |||||
End of year | $ | 179,830,170 | $ | 145,469,833 | ||||
|
|
|
| |||||
Undistributed net investment income included in net assets at end of year | $ | 618,856 | $ | 589,867 | ||||
|
|
|
| |||||
SHARES ISSUED AND REDEEMED | ||||||||
Shares sold | 1,100,000 | 5,550,000 | ||||||
Shares redeemed | (800,000 | ) | (950,000 | ) | ||||
|
|
|
| |||||
Net increase in shares outstanding | 300,000 | 4,600,000 | ||||||
|
|
|
|
See notes to financial statements.
62 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Brazil Capped ETF | ||||||||||||||||||||
Year ended Aug. 31, 2013 | Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | ||||||||||||||||
Net asset value, beginning of year | $ | 52.61 | $ | 65.00 | $ | 68.07 | $ | 58.26 | $ | 73.27 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 1.59 | 1.73 | 2.24 | 1.56 | 1.56 | |||||||||||||||
Net realized and unrealized gain (loss)b | (10.32 | ) | (12.64 | ) | (1.69 | ) | 10.83 | (14.63 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (8.73 | ) | (10.91 | ) | 0.55 | 12.39 | (13.07 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (1.36 | ) | (0.56 | ) | (3.62 | ) | (2.58 | ) | (1.94 | ) | ||||||||||
Return of capital | — | (0.92 | ) | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (1.36 | ) | (1.48 | ) | (3.62 | ) | (2.58 | ) | (1.94 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 42.52 | $ | 52.61 | $ | 65.00 | $ | 68.07 | $ | 58.26 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | (16.85 | )% | (16.79 | )% | 0.36 | % | 21.12 | % | (16.05 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 4,983,630 | $ | 7,370,617 | $ | 11,332,121 | $ | 9,240,453 | $ | 8,777,366 | ||||||||||
Ratio of expenses to average net assetsc | 0.61 | % | 0.61 | % | 0.59 | % | 0.61 | % | 0.65 | % | ||||||||||
Ratio of net investment income to average net assets | 3.02 | % | 2.92 | % | 3.08 | % | 2.24 | % | 3.38 | % | ||||||||||
Portfolio turnover rated | 56 | % | 7 | % | 11 | % | 13 | % | 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 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 solely or partially for cash in U.S. dollars. Excluding such cash transactions, the portfolio turnover rate for the years ended August 31, 2013, August 31, 2012, August 31, 2011, August 31, 2010 and August 31, 2009 would have been 20%, 6%, 11%, 13% and 14%, 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 ETF | ||||||||||||||||||||
Year ended Aug. 31, 2013 | Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | ||||||||||||||||
Net asset value, beginning of year | $ | 27.52 | $ | 29.89 | $ | 26.10 | $ | 23.70 | $ | 30.55 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.60 | 0.53 | 0.53 | 0.43 | 0.41 | |||||||||||||||
Net realized and unrealized gain (loss)b | (0.10 | ) | (2.33 | ) | 3.78 | 2.39 | (6.84 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 0.50 | (1.80 | ) | 4.31 | 2.82 | (6.43 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.68 | ) | (0.57 | ) | (0.52 | ) | (0.42 | ) | (0.42 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.68 | ) | (0.57 | ) | (0.52 | ) | (0.42 | ) | (0.42 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 27.34 | $ | 27.52 | $ | 29.89 | $ | 26.10 | $ | 23.70 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 1.84 | % | (5.87 | )% | 16.50 | % | 11.91 | % | (20.51 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 3,428,223 | $ | 4,254,544 | $ | 5,092,547 | $ | 3,447,242 | $ | 2,393,638 | ||||||||||
Ratio of expenses to average net assetsc | 0.51 | % | 0.53 | % | 0.52 | % | 0.53 | % | 0.55 | % | ||||||||||
Ratio of net investment income to average net assets | 2.12 | % | 1.94 | % | 1.70 | % | 1.63 | % | 2.00 | % | ||||||||||
Portfolio turnover rated | 7 | % | 5 | % | 8 | % | 6 | % | 6 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | 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 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Chile Capped ETF | ||||||||||||||||||||
Year ended Aug. 31, 2013 | Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | ||||||||||||||||
Net asset value, beginning of year | $ | 60.31 | $ | 67.11 | $ | 67.37 | $ | 44.61 | $ | 44.80 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.68 | 0.97 | 0.95 | 0.59 | 0.76 | |||||||||||||||
Net realized and unrealized gain (loss)b | (12.58 | ) | (6.80 | ) | (0.23 | ) | 22.86 | (0.42 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (11.90 | ) | (5.83 | ) | 0.72 | 23.45 | 0.34 | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.68 | ) | (0.92 | ) | (0.98 | ) | (0.66 | ) | (0.53 | ) | ||||||||||
Return of capital | (0.03 | ) | (0.05 | ) | (0.00 | )c | (0.03 | ) | — | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.71 | ) | (0.97 | ) | (0.98 | ) | (0.69 | ) | (0.53 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 47.70 | $ | 60.31 | $ | 67.11 | $ | 67.37 | $ | 44.61 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | (19.87 | )% | (8.68 | )% | 0.93 | % | 52.88 | % | 0.89 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 364,890 | $ | 548,797 | $ | 708,018 | $ | 670,350 | $ | 263,205 | ||||||||||
Ratio of expenses to average net assets | 0.61 | % | 0.61 | % | 0.59 | % | 0.61 | % | 0.65 | % | ||||||||||
Ratio of net investment income to average net assets | 1.12 | % | 1.55 | % | 1.30 | % | 1.05 | % | 1.98 | % | ||||||||||
Portfolio turnover rated | 34 | % | 48 | % | 38 | % | 42 | % | 53 | % |
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 | 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 rates for the years ended August 31, 2013, August 31, 2012, August 31, 2011, August 31, 2010 and August 31, 2009 were 16%, 20%, 12%, 9% and 14% 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 the period)
iShares MSCI Colombia Capped ETF
Period from to Aug. 31, 2013 | ||||
Net asset value, beginning of period | $ | 25.28 | ||
|
| |||
Income from investment operations: | ||||
Net investment incomeb | 0.03 | |||
Net realized and unrealized gainc | 0.67 | |||
|
| |||
Total from investment operations | 0.70 | |||
|
| |||
Net asset value, end of period | $ | 25.98 | ||
|
| |||
Total return | 2.77 | %d | ||
|
| |||
Ratios/Supplemental data: | ||||
Net assets, end of period (000s) | $ | 18,188 | ||
Ratio of expenses to average net assetse | 0.61 | % | ||
Ratio of net investment income to average net assetse | 0.61 | % | ||
Portfolio turnover ratef | 2 | % |
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 solely or partially for cash in U.S. dollars. Excluding such cash transactions, the portfolio turnover rate for the period ended August 31, 2013 was 2%, respectively. See Note 4. |
See notes to financial statements.
66 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Israel Capped ETF | ||||||||||||||||||||
Year ended Aug. 31, 2013 | Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | ||||||||||||||||
Net asset value, beginning of year | $ | 37.25 | $ | 45.89 | $ | 49.41 | $ | 46.87 | $ | 48.62 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.95 | 1.12 | 1.39 | 1.40 | 0.98 | |||||||||||||||
Net realized and unrealized gain (loss)b | 5.68 | (8.66 | ) | (3.18 | ) | 2.63 | (1.75 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 6.63 | (7.54 | ) | (1.79 | ) | 4.03 | (0.77 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (1.03 | ) | (1.07 | ) | (1.73 | ) | (1.49 | ) | (0.98 | ) | ||||||||||
Return of capital | — | (0.03 | ) | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (1.03 | ) | (1.10 | ) | (1.73 | ) | (1.49 | ) | (0.98 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 42.85 | $ | 37.25 | $ | 45.89 | $ | 49.41 | $ | 46.87 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 17.82 | % | (16.52 | )% | (4.26 | )% | 8.57 | % | (0.63 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 70,710 | $ | 68,912 | $ | 78,018 | $ | 128,473 | $ | 107,792 | ||||||||||
Ratio of expenses to average net assets | 0.61 | % | 0.61 | % | 0.59 | % | 0.61 | % | 0.66 | % | ||||||||||
Ratio of net investment income to average net assets | 2.20 | % | 2.75 | % | 2.49 | % | 2.64 | % | 2.66 | % | ||||||||||
Portfolio turnover ratec | 14 | % | 20 | % | 17 | % | 21 | % | 27 | % |
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 Mexico Capped ETF | ||||||||||||||||||||
Year ended Aug. 31, 2013 | Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | ||||||||||||||||
Net asset value, beginning of year | $ | 60.96 | $ | 58.39 | $ | 48.17 | $ | 42.59 | $ | 51.94 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.75 | 0.73 | 0.80 | 0.72 | 0.43 | |||||||||||||||
Net realized and unrealized gain (loss)b | 0.85 | 2.76 | 10.15 | 5.61 | (9.17 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 1.60 | 3.49 | 10.95 | 6.33 | (8.74 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.63 | ) | (0.92 | ) | (0.73 | ) | (0.75 | ) | (0.61 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.63 | ) | (0.92 | ) | (0.73 | ) | (0.75 | ) | (0.61 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 61.93 | $ | 60.96 | $ | 58.39 | $ | 48.17 | $ | 42.59 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 2.53 | % | 6.13 | % | 22.67 | % | 14.83 | % | (16.50 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 2,217,052 | $ | 1,182,700 | $ | 1,243,731 | $ | 1,450,039 | $ | 694,278 | ||||||||||
Ratio of expenses to average net assets | 0.50 | % | 0.53 | % | 0.52 | % | 0.53 | % | 0.55 | % | ||||||||||
Ratio of net investment income to average net assets | 1.09 | % | 1.26 | % | 1.35 | % | 1.46 | % | 1.25 | % | ||||||||||
Portfolio turnover ratec | 32 | % | 10 | % | 5 | % | 11 | % | 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.
68 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI South Africa ETF | ||||||||||||||||||||
Year ended Aug. 31, 2013 | Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | ||||||||||||||||
Net asset value, beginning of year | $ | 64.65 | $ | 69.06 | $ | 58.74 | $ | 51.99 | $ | 55.80 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 1.32 | 2.10 | 1.65 | 1.18 | 1.94 | |||||||||||||||
Net realized and unrealized gain (loss)b | (5.31 | ) | (4.41 | ) | 11.08 | 6.92 | (3.84 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (3.99 | ) | (2.31 | ) | 12.73 | 8.10 | (1.90 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (1.78 | ) | (2.10 | ) | (2.41 | ) | (1.35 | ) | (1.91 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (1.78 | ) | (2.10 | ) | (2.41 | ) | (1.35 | ) | (1.91 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 58.88 | $ | 64.65 | $ | 69.06 | $ | 58.74 | $ | 51.99 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | (6.35 | )% | (3.17 | )% | 21.58 | % | 15.80 | % | (2.23 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 547,569 | $ | 471,922 | $ | 504,102 | $ | 505,191 | $ | 488,728 | ||||||||||
Ratio of expenses to average net assets | 0.61 | % | 0.61 | % | 0.59 | % | 0.61 | % | 0.66 | % | ||||||||||
Ratio of net investment income to average net assets | 2.08 | % | 3.26 | % | 2.38 | % | 2.09 | % | 4.81 | % | ||||||||||
Portfolio turnover ratec | 5 | % | 4 | % | 4 | % | 5 | % | 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.
FINANCIAL HIGHLIGHTS | 69 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Turkey ETF | ||||||||||||||||||||
Year ended Aug. 31, 2013 | Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | ||||||||||||||||
Net asset value, beginning of year | $ | 56.13 | $ | 47.73 | $ | 60.81 | $ | 48.01 | $ | 52.42 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 1.07 | 0.86 | 0.84 | 1.00 | 0.78 | |||||||||||||||
Net realized and unrealized gain (loss)b | (7.08 | ) | 8.70 | (12.59 | ) | 13.02 | (4.22 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (6.01 | ) | 9.56 | (11.75 | ) | 14.02 | (3.44 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (1.12 | ) | (1.16 | ) | (1.33 | ) | (1.22 | ) | (0.97 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (1.12 | ) | (1.16 | ) | (1.33 | ) | (1.22 | ) | (0.97 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 49.00 | $ | 56.13 | $ | 47.73 | $ | 60.81 | $ | 48.01 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | (11.05 | )% | 20.37 | % | (19.74 | )% | 29.55 | % | (5.56 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 436,076 | $ | 561,284 | $ | 448,677 | $ | 601,988 | $ | 242,435 | ||||||||||
Ratio of expenses to average net assets | 0.61 | % | 0.61 | % | 0.59 | % | 0.61 | % | 0.65 | % | ||||||||||
Ratio of net investment income to average net assets | 1.67 | % | 1.75 | % | 1.30 | % | 1.81 | % | 2.39 | % | ||||||||||
Portfolio turnover ratec | 9 | % | 9 | % | 12 | % | 13 | % | 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.
70 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI USA ETF | ||||||||||||||||
Year ended Aug. 31, 2013 | Year ended Aug. 31, 2012 | Year ended Aug. 31, 2011 | Period from to | |||||||||||||
Net asset value, beginning of period | $ | 30.31 | $ | 26.17 | $ | 22.44 | $ | 24.83 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Income from investment operations: | ||||||||||||||||
Net investment incomeb | 0.69 | 0.59 | 0.51 | 0.17 | ||||||||||||
Net realized and unrealized gain (loss)c | 4.96 | 3.94 | 3.73 | (2.49 | ) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total from investment operations | 5.65 | 4.53 | 4.24 | (2.32 | ) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Less distributions from: | ||||||||||||||||
Net investment income | (0.70 | ) | (0.39 | ) | (0.51 | ) | (0.07 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions | (0.70 | ) | (0.39 | ) | (0.51 | ) | (0.07 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net asset value, end of period | $ | 35.26 | $ | 30.31 | $ | 26.17 | $ | 22.44 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total return | 18.85 | % | 17.44 | % | 18.89 | % | (9.37 | )%d | ||||||||
|
|
|
|
|
|
|
| |||||||||
Ratios/Supplemental data: | ||||||||||||||||
Net assets, end of period (000s) | $ | 179,830 | $ | 145,470 | $ | 5,233 | $ | 2,244 | ||||||||
Ratio of expenses to average net assetse | 0.15 | % | 0.15 | % | 0.15 | % | 0.15 | % | ||||||||
Ratio of net investment income to average net assetse | 2.10 | % | 2.04 | % | 1.90 | % | 2.21 | % | ||||||||
Portfolio turnover ratef | 5 | % | 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.
FINANCIAL HIGHLIGHTS | 71 |
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 ETF | Former Namea | Diversification Classification | ||
MSCI Brazil Capped | iShares MSCI Brazil Capped Index Fund | Non-diversified | ||
MSCI Canada | iShares MSCI Canada Index Fund | Diversified | ||
MSCI Chile Capped | iShares MSCI Chile Capped Investable Market Index Fund | Non-diversified | ||
MSCI Colombia Cappedb | Non-diversified | |||
MSCI Israel Capped | iShares MSCI Israel Capped Investable Market Index Fund | Non-diversified | ||
MSCI Mexico Capped | iShares MSCI Mexico Capped Investable Market Index Fund | Non-diversified | ||
MSCI South Africa | iShares MSCI South Africa Index Fund | Non-diversified | ||
MSCI Turkey | iShares MSCI Turkey Investable Market Index Fund | Non-diversified | ||
MSCI USA | iShares MSCI USA Index Fund | Non-diversified |
a | The Funds changed their names effective July 1, 2013. |
b | The Fund commenced operations on June 18, 2013. |
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.
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.
Certain Funds invest in securities of non-U.S. issuers that trade in non-U.S. markets. This involves 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. These risks are heightened for investments in emerging market and frontier market countries.
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
72 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Notes to Financial Statements (Continued)
iSHARES®, INC.
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 and, for financial reporting purposes, as of the report date should the reporting period end on a day that the Fund’s listing exchange is not 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 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, reviews of 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
NOTESTO FINANCIAL STATEMENTS | 73 |
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Notes to Financial Statements (Continued)
iSHARES®, INC.
transparency of the instrument and is not necessarily an indication of the risk associated with investing in the 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 Global Valuation Committee’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 Funds’ investments according to the fair value hierarchy as of August 31, 2013. The breakdown of each Fund’s investments into major categories is disclosed in its respective schedule of investments.
iShares ETF and | Investments | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
MSCI Brazil Capped | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 2,601,260,548 | $ | — | $ | — | $ | 2,601,260,548 | ||||||||
Preferred Stocks | 2,344,626,778 | — | — | 2,344,626,778 | ||||||||||||
Money Market Funds | 8,754,616 | — | — | 8,754,616 | ||||||||||||
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| |||||||||
$ | 4,954,641,942 | $ | — | $ | — | $ | 4,954,641,942 | |||||||||
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| |||||||||
MSCI Canada | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 3,416,307,222 | $ | — | $ | — | $ | 3,416,307,222 | ||||||||
Money Market Funds | 36,504,283 | — | — | 36,504,283 | ||||||||||||
Futures Contractsa | 419,608 | — | — | 419,608 | ||||||||||||
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| |||||||||
$ | 3,453,231,113 | $ | — | $ | — | $ | 3,453,231,113 | |||||||||
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MSCI Chile Capped | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 346,357,983 | $ | — | $ | — | $ | 346,357,983 | ||||||||
Preferred Stocks | 18,199,714 | — | — | 18,199,714 | ||||||||||||
Rights | 19,621 | — | — | 19,621 | ||||||||||||
Money Market Funds | 461,635 | — | — | 461,635 | ||||||||||||
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| |||||||||
$ | 365,038,953 | $ | — | $ | — | $ | 365,038,953 | |||||||||
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| |||||||||
74 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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iSHARES®, INC.
iShares ETF and | Investments | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
MSCI Colombia Capped | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 15,429,222 | $ | — | $ | — | $ | 15,429,222 | ||||||||
Preferred Stocks | 2,696,660 | — | — | 2,696,660 | ||||||||||||
Money Market Funds | 16,889 | — | — | 16,889 | ||||||||||||
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| |||||||||
$ | 18,142,771 | $ | — | $ | — | $ | 18,142,771 | |||||||||
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MSCI Israel Capped | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 70,361,084 | $ | — | $ | — | $ | 70,361,084 | ||||||||
Warrants | 810 | — | — | 810 | ||||||||||||
Money Market Funds | 1,086,120 | — | — | 1,086,120 | ||||||||||||
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| |||||||||
$ | 71,448,014 | $ | — | $ | — | $ | 71,448,014 | |||||||||
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| |||||||||
MSCI Mexico Capped | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 2,215,700,088 | $ | 2,801,244 | $ | — | $ | 2,218,501,332 | ||||||||
Money Market Funds | 94,587,099 | — | — | 94,587,099 | ||||||||||||
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| |||||||||
$ | 2,310,287,187 | $ | 2,801,244 | $ | — | $ | 2,313,088,431 | |||||||||
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| |||||||||
MSCI South Africa | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 547,356,483 | $ | — | $ | — | $ | 547,356,483 | ||||||||
Money Market Funds | 6,400,257 | — | — | 6,400,257 | ||||||||||||
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| |||||||||
$ | 553,756,740 | $ | — | $ | — | $ | 553,756,740 | |||||||||
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| |||||||||
MSCI Turkey | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 435,651,172 | $ | — | $ | — | $ | 435,651,172 | ||||||||
Money Market Funds | 22,678,981 | — | — | 22,678,981 | ||||||||||||
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| |||||||||
$ | 458,330,153 | $ | — | $ | — | $ | 458,330,153 | |||||||||
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MSCI USA | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 179,402,528 | $ | — | $ | — | $ | 179,402,528 | ||||||||
Money Market Funds | 2,739,418 | — | — | 2,739,418 | ||||||||||||
Liabilities: | ||||||||||||||||
Short Positions | (19,399 | ) | — | — | (19,399 | ) | ||||||||||
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| |||||||||
$ | 182,122,547 | $ | — | $ | — | $ | 182,122,547 | |||||||||
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| |||||||||
a | Futures contracts are shown at the net unrealized appreciation (depreciation) on the contracts. |
NOTESTO FINANCIAL STATEMENTS | 75 |
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, 2013 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.
SHORT POSITIONS
From time to time, in order to track the performance of their respective benchmark index, the Funds may sell non-index securities that will be received through corporate actions occurring on the opening of market trading on the following business day. Such short positions are valued consistent with how securities are valued as described under “Security Valuation.” The obligation to deliver the securities is recorded as a liability in the Funds’ statements of assets and liabilities and is equal to the current fair value of the securities to be delivered. Any market fluctuations between the value of the obligation to sell these securities and the current fair value are reflected as unrealized appreciation (depreciation) in the Funds’ statements of operations. Upon receipt of the securities related to the corporate actions, the Funds record a realized gain (loss). Dividends on securities sold short, if any, are reflected as an expense in the statement of operations. Details of the short position resulting from the non-index securities sold by the Funds, if any, are included in their respective schedule of investments.
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, stock dividends, capital gains on investments, or certain foreign currency transactions. 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 stock dividends are presented as “other foreign taxes,” and foreign taxes on capital gains from sales of investments and foreign taxes on foreign currency transactions are included in their respective net realized gain (loss) categories. Foreign taxes payable as of August 31, 2013, if any, are disclosed in the Funds’ statements of assets and liabilities.
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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.
RECENT ACCOUNTING STANDARD
In December 2011, the Financial Accounting Standards Board issued guidance to enhance current disclosure requirements on offsetting of certain assets and liabilities and enable financial statement users to compare financial statements prepared under U.S. GAAP and International Financial Reporting Standards (IFRS). The new disclosures are required for investments and derivative financial instruments subject to master netting agreements or similar agreements and require an entity to disclose both gross and net information about such investments and transactions eligible for offset in the statement of assets and liabilities. The scope of the disclosure requirements for offsetting will be limited to certain derivative instruments and securities lending transactions. In addition, the standard requires disclosure of collateral received and posted in connection with master netting agreements or similar agreements. The guidance is effective for financial statements for fiscal years beginning after January 1, 2013, and interim periods within those fiscal years. Management is evaluating the impact of this guidance on the Funds’ financial statements and disclosures, with the exception of iShares MSCI Colombia Capped ETF, which commenced operations on June 18, 2013 and for which this standard is effective. For the iShares MSCI Colombia Capped ETF, management notes that based on a review of the Fund’s holdings and activities during the period from June 18, 2013 (commencement of operations) to August 31, 2013, the Fund is not impacted by this standard.
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.
NOTESTO FINANCIAL STATEMENTS | 77 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
For its investment advisory services to each of the iShares MSCI Canada and iShares MSCI Mexico Capped ETFs, 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 Brazil Capped, iShares MSCI Chile Capped, iShares MSCI Israel Capped, iShares MSCI South Africa and iShares MSCI Turkey ETFs, 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 each Fund, BFA is entitled to an annual investment advisory fee based on the average daily net assets of each Fund as follows:
iShares ETF | Investment Advisory Fee | |||
MSCI Colombia Capped | 0.61 | % | ||
MSCI USA | 0.15 |
The U.S. Securities and Exchange Commission has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (“BTC”), an affiliate of BFA, to serve as securities lending agent for the Funds, subject to applicable conditions. 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 Funds retain a portion of securities lending income and remit a remaining portion to BTC as compensation for its services as securities lending agent. The Funds benefit from a borrower default indemnity provided by BlackRock. As securities lending agent, BTC bears all operational costs directly related to securities lending as well as the cost of borrower default indemnification. BTC is also responsible for fees and expenses incurred by each Fund as a result the investment of cash collateral received for securities on loan in a money market fund managed by BFA or an affiliate.
78 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
For the period ended August 31, 2013, each Fund retained 65% of securities lending income and paid a fee to BTC equal to 35% of such income in the amounts as follows:
iShares ETF | Securities Lending Agent Fees | |||
MSCI Brazil Capped | $ | 23 | ||
MSCI Canada | 454,996 | |||
MSCI Israel Capped | 54,419 | |||
MSCI Mexico Capped | 379,534 |
iShares ETF | Securities Lending Agent Fees | |||
MSCI South Africa | $ | 37,109 | ||
MSCI Turkey | 405,301 | |||
MSCI USA | 4,963 |
BlackRock Investments, LLC, an affiliate of BFA, is the distributor for each Fund. Pursuant to the 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.
Investments in issuers considered to be affiliates of the Funds (excluding short-term investments) during the period ended August 31, 2013, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:
iShares ETF 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) | |||||||||||||||||||||
MSCI Mexico Capped | ||||||||||||||||||||||||||||
Desarrolladora Homes SAB de CV | 1,784,930 | 30,549,080 | (4,126,800 | ) | 28,207,210 | $ | 10,415,035 | $ | — | $ | (4,437,029 | ) | ||||||||||||||||
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MSCI USA | ||||||||||||||||||||||||||||
BlackRock Inc. | 1,445 | 437 | (307 | ) | 1,575 | $ | 410,004 | $ | 9,677 | $ | 11,556 | |||||||||||||||||
PNC Financial Services Group Inc. (The) | 5,825 | 1,549 | (1,170 | ) | 6,204 | 448,363 | 9,890 | 8,289 | ||||||||||||||||||||
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$ | 858,367 | $ | 19,567 | $ | 19,845 | |||||||||||||||||||||||
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Certain directors and officers of the Company are also officers of BTC and/or BFA.
NOTESTO FINANCIAL STATEMENTS | 79 |
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, 2013 were as follows:
iShares ETF | Purchases | Sales | ||||||
MSCI Brazil Capped | $ | 4,236,069,611 | $ | 5,349,157,390 | ||||
MSCI Canada | 314,373,043 | 341,905,909 | ||||||
MSCI Chile Capped | 178,581,734 | 254,778,640 | ||||||
MSCI Colombia Capped | 15,445,972 | 366,041 | ||||||
MSCI Israel Capped | 11,111,712 | 11,342,607 | ||||||
MSCI Mexico Capped | 713,770,092 | 679,685,425 | ||||||
MSCI South Africa | 30,887,200 | 25,688,166 | ||||||
MSCI Turkey | 62,670,694 | 65,374,598 | ||||||
MSCI USA | 7,991,663 | 7,906,409 |
In-kind transactions (see Note 4) for the period ended August 31, 2013 were as follows:
iShares ETF | In-kind Purchases | In-kind Sales | ||||||
MSCI Brazil Capped | $ | — | $ | 59,296,000 | ||||
MSCI Canada | 641,005,176 | 1,420,174,329 | ||||||
MSCI Colombia Capped | 2,707,927 | — | ||||||
MSCI Israel Capped | 4,044,766 | 12,959,633 | ||||||
MSCI Mexico Capped | 2,514,582,140 | 1,318,868,717 | ||||||
MSCI South Africa | 287,999,957 | 171,169,571 | ||||||
MSCI Turkey | 505,126,012 | 525,658,653 | ||||||
MSCI USA | 36,059,205 | 25,399,937 |
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 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 may also 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.
80 | 2013 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 market value of the loaned securities is determined at the close of each business day of the Funds and any additional required collateral is delivered to the Funds on the next business day. 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.
As of August 31, 2013, any securities on loan were collateralized by cash. The cash collateral received was invested in money market funds managed by BFA. The value of any securities on loan as of August 31, 2013 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.
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. To mitigate these risks, the Funds benefit from a borrower default indemnity provided by BlackRock. BlackRock’s indemnity allows for full replacement of securities lent. Each Fund could suffer a loss if the value of the investments purchased with cash collateral falls below the value of the cash collateral received.
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, 2013, 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 ETF | Paid-in Capital | Undistributed Net Investment Income/Distributions in Excess of Net Investment Income | Undistributed Net Realized Gain/Accumulated Net Realized Loss | |||||||||
MSCI Brazil Capped | $ | 30,413,325 | $ | 9,477,270 | $ | (39,890,595 | ) | |||||
MSCI Canada | 51,310,863 | 3,302,816 | (54,613,679 | ) | ||||||||
MSCI Chile Capped | — | (302,045 | ) | 302,045 | ||||||||
MSCI Colombia Capped | — | (2,954 | ) | 2,954 | ||||||||
MSCI Israel Capped | 914,793 | 29,015 | (943,808 | ) | ||||||||
MSCI Mexico Capped | 149,319,374 | (145,644 | ) | (149,173,730 | ) | |||||||
MSCI South Africa | 20,353,774 | 2,961,227 | (23,315,001 | ) | ||||||||
MSCI Turkey | 23,456,551 | 1,127,477 | (24,584,028 | ) | ||||||||
MSCI USA | 4,653,990 | — | (4,653,990 | ) |
NOTESTO FINANCIAL STATEMENTS | 81 |
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iSHARES®, INC.
The tax character of distributions paid during the periods ended August 31, 2013 and August 31, 2012 was as follows:
iShares ETF | 2013 | 2012 | ||||||
MSCI Brazil Capped | ||||||||
Ordinary income | $ | 201,420,612 | $ | 82,370,233 | ||||
Return of Capital | — | $ | 133,826,010 | |||||
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$ | 201,420,612 | $ | 216,196,243 | |||||
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MSCI Canada | ||||||||
Ordinary income | $ | 101,089,405 | $ | 94,130,044 | ||||
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MSCI Chile Capped | ||||||||
Ordinary income | $ | 5,669,647 | $ | 8,674,940 | ||||
Return of Capital | 235,875 | $ | 430,786 | |||||
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$ | 5,905,522 | $ | 9,105,726 | |||||
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MSCI Israel Capped | ||||||||
Ordinary income | $ | 1,885,659 | $ | 1,986,153 | ||||
Return of Capital | — | $ | 63,813 | |||||
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$ | 1,885,659 | $ | 2,049,966 | |||||
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MSCI Mexico Capped | ||||||||
Ordinary income | $ | 20,571,276 | $ | 16,941,924 | ||||
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MSCI South Africa | ||||||||
Ordinary income | $ | 13,575,195 | $ | 16,263,704 | ||||
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MSCI Turkey | ||||||||
Ordinary income | $ | 12,901,893 | $ | 8,952,333 | ||||
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MSCI USA | ||||||||
Ordinary income | $ | 3,310,642 | $ | 1,429,449 | ||||
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As of August 31, 2013, the tax components of accumulated net earnings (losses) were as follows:
iShares ETF | Undistributed Ordinary Income | Capital Loss Carryforwards | Net Unrealized Gains (Losses) a | Qualified Late-Year Losses b | Total | |||||||||||||||
MSCI Brazil Capped | $ | — | $ | (740,711,726 | ) | $ | 416,891,220 | $ | (371,468,480 | ) | $ | (695,288,986 | ) | |||||||
MSCI Canada | 10,987,664 | (182,934,228 | ) | (574,625,926 | ) | (85,207,631 | ) | (831,780,121 | ) | |||||||||||
MSCI Chile Capped | — | (71,913,107 | ) | 14,155,561 | (5,616,075 | ) | (63,373,621 | ) | ||||||||||||
MSCI Colombia Capped | 15,989 | (36,917 | ) | 373,352 | — | 352,424 | ||||||||||||||
MSCI Israel Capped | 74,490 | (27,690,625 | ) | (22,379,191 | ) | (4,506,635 | ) | (54,501,961 | ) | |||||||||||
MSCI Mexico Capped | 4,818,023 | (73,617,623 | ) | (467,654,483 | ) | (4,758,568 | ) | (541,212,651 | ) | |||||||||||
MSCI South Africa | — | (55,793,270 | ) | (95,448,976 | ) | (10,691,474 | ) | (161,933,720 | ) | |||||||||||
MSCI Turkey | — | (31,631,300 | ) | (186,624,812 | ) | (766,621 | ) | (219,022,733 | ) | |||||||||||
MSCI USA | 618,856 | (175,480 | ) | 33,192,442 | — | 33,635,818 |
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, 2014. |
82 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Notes to Financial Statements (Continued)
iSHARES®, INC.
As of August 31, 2013, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:
iShares ETF | Non- Expiring a | Expiring 2014 | Expiring 2015 | Expiring 2016 | Expiring 2017 | Expiring 2018 | Expiring 2019 | Total | ||||||||||||||||||||||||
MSCI Brazil Capped | $ | 542,485,416 | $ | — | $ | — | $ | — | $ | — | $ | 198,226,310 | $ | — | $ | 740,711,726 | ||||||||||||||||
MSCI Canada | 60,743,987 | — | 5,363,291 | 5,107,471 | 27,886,883 | 68,928,677 | 14,903,919 | 182,934,228 | ||||||||||||||||||||||||
MSCI Chile Capped | 57,337,145 | — | — | — | 1,886,881 | 11,712,090 | 976,991 | 71,913,107 | ||||||||||||||||||||||||
MSCI Colombia Capped | 36,917 | — | — | — | — | — | — | 36,917 | ||||||||||||||||||||||||
MSCI Israel Capped | 8,974,706 | — | — | — | 784,479 | 10,801,191 | 7,130,249 | 27,690,625 | ||||||||||||||||||||||||
MSCI Mexico Capped | 37,504,583 | 632,766 | — | 853,150 | 8,973,988 | 2,789,471 | 22,863,665 | 73,617,623 | ||||||||||||||||||||||||
MSCI South Africa | 16,619,692 | 260,738 | 1,607,845 | 972,024 | 15,339,464 | 14,856,365 | 6,137,142 | 55,793,270 | ||||||||||||||||||||||||
MSCI Turkey | 21,068,743 | — | — | — | 720,636 | 5,982,737 | 3,859,184 | 31,631,300 | ||||||||||||||||||||||||
MSCI USA | 175,480 | — | — | — | — | — | — | 175,480 |
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, 2013, gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes were as follows:
iShares ETF | Tax Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation (Depreciation) | ||||||||||||
MSCI Brazil Capped | $ | 4,535,005,115 | $ | 1,337,264,115 | $ | (917,627,288 | ) | $ | 419,636,827 | |||||||
MSCI Canada | 4,027,601,966 | 263,325,570 | (838,116,031 | ) | (574,790,461 | ) | ||||||||||
MSCI Chile Capped | 350,880,799 | 69,937,329 | (55,779,175 | ) | 14,158,154 | |||||||||||
MSCI Colombia Capped | 17,767,830 | 660,378 | (285,437 | ) | 374,941 | |||||||||||
MSCI Israel Capped | 93,825,882 | 3,613,562 | (25,991,430 | ) | (22,377,868 | ) | ||||||||||
MSCI Mexico Capped | 2,780,533,313 | 11,678,646 | (479,123,528 | ) | (467,444,882 | ) | ||||||||||
MSCI South Africa | 649,191,956 | 31,017,785 | (126,453,001 | ) | (95,435,216 | ) | ||||||||||
MSCI Turkey | 644,929,512 | 757,165 | (187,356,524 | ) | (186,599,359 | ) | ||||||||||
MSCI USA | 148,949,511 | 35,247,126 | (2,054,691 | ) | 33,192,435 |
Management has reviewed the tax positions as of August 31, 2013, 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
NOTESTO FINANCIAL STATEMENTS | 83 |
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Notes to Financial Statements (Continued)
iSHARES®, INC.
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 the iShares MSCI Canada ETF as of August 31, 2013 and the related locations in the statements of assets and liabilities, presented by risk exposure category:
Assets | ||||
Equity contracts: | ||||
Variation margin / Net assets consist of – | $ | 419,608 | ||
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a | Represents cumulative appreciation of futures contracts as reported in the schedule of investments. |
The following table shows the realized and unrealized gains (losses) on futures contracts held by the iShares MSCI Canada ETF during the period ended August 31, 2013 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 | $ | 225,366 | $ | 464,579 | ||||
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For the period ended August 31, 2013, the average quarter-end number of contracts and notional value of open futures contracts for the iShares MSCI Canada ETF were 92 and $12,981,578, respectively.
8. | LINE OF CREDIT |
The iShares MSCI Colombia Capped ETF, 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 30, 2013. The line of credit may be used for temporary or emergency purposes, including redemptions, settlement of trades and rebalancing of portfolio holdings. 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 securities of certain foreign markets. The Fund did not borrow under the credit agreement during the period ended August 31, 2013.
9. | 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.
84 | 2013 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 Brazil Capped ETF, iShares MSCI Canada ETF, iShares MSCI Chile Capped ETF, iShares MSCI Colombia Capped ETF, iShares MSCI Israel Capped ETF, iShares MSCI Mexico Capped ETF, iShares MSCI South Africa ETF, iShares MSCI Turkey ETF and iShares MSCI USA ETF (the “Funds”) at August 31, 2013, 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, 2013 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
October 23, 2013
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iSHARES®, INC.
For corporate shareholders, 99.61% of the income dividends paid by the iShares MSCI USA ETF during the fiscal period ended August 31, 2013 qualified for the dividends-received deduction.
For the fiscal period ended August 31, 2013, 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 ETF | Foreign Source Income Earned | Foreign Taxes Paid | ||||||
MSCI Brazil Capped | $ | 304,304,600 | $ | 23,272,578 | ||||
MSCI Canada | 131,054,553 | 19,588,243 | ||||||
MSCI Chile Capped | 11,675,057 | 2,464,436 | ||||||
MSCI Colombia Capped | 39,056 | 1,106 | ||||||
MSCI Israel Capped | 2,643,931 | 515,850 | ||||||
MSCI Mexico Capped | 33,594,838 | 87,922 | ||||||
MSCI South Africa | 15,542,781 | 1,960,876 | ||||||
MSCI Turkey | 18,867,021 | 2,639,835 |
Under Section 854(b)(2) of the Code, certain Funds hereby designate the following maximum amounts as qualified dividend income for purposes of the maximum rate under Section 1(h)(11) of the Code for the fiscal period ended August 31, 2013:
iShares ETF | Qualified Dividend Income | |||
MSCI Brazil Capped | $ | 18,581,654 | ||
MSCI Canada | 120,677,648 | |||
MSCI Colombia Capped | 1,106 | |||
MSCI Israel Capped | 2,401,509 |
iShares ETF | Qualified Dividend Income | |||
MSCI Mexico Capped | $ | 20,659,198 | ||
MSCI South Africa | 14,462,857 | |||
MSCI Turkey | 15,541,728 | |||
MSCI USA | 3,310,642 |
In February 2014, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2013. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.
86 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Board Review and Approval of Investment Advisory
Contract
iSHARES®, INC.
I. iShares MSCI Brazil Capped ETF, iShares MSCI Canada ETF, iShares MSCI Chile Capped ETF, iShares MSCI Israel Capped ETF, iShares MSCI Mexico Capped ETF, iShares MSCI South Africa ETF and iShares MSCI Turkey ETF.
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 and approve 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 March 7, 2013, April 23, 2013, and May 3, 2013, 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 16, 2013, management presented preliminary 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 5, 2013, to discuss the additional requests. At a meeting held on June 10-11, 2013, the Board, including the Independent Directors, reviewed the 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 the supplemental information management provided at the request of the Independent Directors. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information 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 reached 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 the size, sponsor, inception date, or other differentiating factors included in Lipper’s proprietary selection methodology, 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, and/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 provided in the Lipper Report may or may not provide meaningful direct comparisons to the Funds.
The Board also noted that the investment advisory fee rates 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, 2012, and a
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 87 |
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Board Review and Approval of Investment Advisory
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iSHARES®, INC.
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 Lipper Group may include funds that are not exchange traded funds or index funds, and that may have different investment objectives and/or benchmarks from the Funds. In addition, the Board noted that each Fund seeks to track its own 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, including detailed information on certain specific iShares funds requested by the Board, was also considered.
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 fee rate and expense level 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, including information about recent and proposed enhancements to the iShares business, including with respect to shareholder servicing and support, 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 during 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 acknowledged that resources to support the iShares funds and their shareholders have been added or enhanced since BlackRock’s acquisition of BFA in December 2009, 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 detailed presentations regarding BFA’s investment and risk management processes and strategies provided at the June 10-11, 2013 meeting and throughout the previous year, 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 the Funds and Profits Realized by BFA and its Affiliates — The Board reviewed information about the profitability to BlackRock 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 analyses 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.
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Board Review and Approval of Investment Advisory
Contract (Continued)
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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 relatively low fee rates established at inception, 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 BlackRock’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 fee rates 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 Capped Investable Market Index Fund and iShares MSCI Israel Capped 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 to the Funds, as well as other significant differences in the approach of BFA and its affiliates to the Funds, on one hand, and to the 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 and challenges 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 the “fallout” benefits or 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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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 rate under each Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that it is in the best interest of each Fund and its shareholders to approve the continuance of the Advisory Contract for the coming year.
II. iShares MSCI USA ETF.
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 and approve 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 March 7, 2013, April 23, 2013, and May 3, 2013, 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 16, 2013, management presented preliminary 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 5, 2013, to discuss the additional requests. At a meeting held on June 10-11, 2013, the Board, including the Independent Directors, reviewed the 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 the supplemental information management provided at the request of the Independent Directors. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information 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 reached 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 the size, sponsor, inception date, or other differentiating factors included in Lipper’s proprietary selection methodology, including adding “at cost” funds, 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 an index similar to that tracked by the Fund, the Lipper Group included in part mutual funds, closed-end funds, exchange traded funds, and/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 further noted that due to the limitations in providing comparable funds in the various Lipper Groups, the statistical information provided in the Lipper Report may or may not provide meaningful direct comparisons to the Fund.
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The Board also noted that the investment advisory fee rate and overall expenses for the Fund compared favorably to the investment advisory fee rates and overall expenses of the funds in its respective 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, 2012, 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 may include funds that are not exchange traded funds or index funds, and that may have different investment objectives and/or benchmarks from the Fund. In addition, the Board noted that the Fund seeks to track its own benchmark index and that, during the prior year, the Board received periodic reports on the Fund’s performance in comparison with its relevant benchmark index. Such periodic comparative performance information, including detailed information on certain specific iShares funds requested by the Board, was also considered.
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 fee rate and expense level 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, including information about recent and proposed enhancements to the iShares business, including with respect to shareholder servicing and support, 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 during 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 acknowledged that resources to support the iShares funds and their shareholders have been added or enhanced since BlackRock’s acquisition of BFA in December 2009, 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 detailed presentations regarding BFA’s investment and risk management processes and strategies provided at the June 10-11, 2013 meeting and throughout the previous year, 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 the Fund and Profits Realized by BFA and its Affiliates — The Board reviewed information about the profitability to BlackRock 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
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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 relatively low fee rates established at inception, 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 BlackRock’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 rate 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 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 to the Fund, as well as other significant differences in the approach of BFA and its affiliates to the Fund, on one hand, and to the 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 and challenges 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 rate under the Advisory Contract for the Fund was 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 the “fallout” benefits or 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
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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 rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that it is in the best interest of the Fund and its shareholders to approve the continuance of the Advisory Contract for the coming year.
III. iShares MSCI Colombia Capped ETF.
Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Company’s Board of Directors (the “Board”), including a majority of Directors who are not “interested persons” of the Company (as that term is defined in the 1940 Act) (the “Independent Directors”), is required to consider and approve the proposed 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 terms of the proposed Advisory Contract.
At a meeting held on March 21-22, 2013, the Board, including all of the Independent Directors, approved the selection of BFA as investment adviser and approved the proposed Advisory Contract for the Fund, based on its review of qualitative and quantitative information provided by BFA. The Board also considered information previously provided by BFA, BlackRock Institutional Trust Company, N.A. (“BTC”), and BlackRock, Inc. (“BlackRock”), as applicable, at prior Board meetings. The Independent Directors were advised by their independent counsel throughout the process.
In selecting BFA and 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 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 any proposed 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 an index similar to that 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 general description of the methodology used by Lipper to determine the applicable Lipper Group and to prepare this information. The Board further noted that due to the limitations in providing comparable funds in the Lipper Group, the statistical information may or may not provide meaningful direct comparisons to the Fund.
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The Board also noted that the proposed investment advisory fee rate and overall expenses for the Fund compared favorably to the investment advisory fee rate and overall expenses of the funds in the Lipper Group.
Based on this review, the other factors considered at the meeting, and their general knowledge of mutual fund pricing, the Board concluded that the proposed investment advisory fees and expense levels of the Fund supported the Board’s approval of the Advisory Contract.
Nature, Extent and Quality of Services to be Provided by BFA — The Board reviewed the scope of services to be provided by BFA under the Advisory Contract. In reviewing the scope of 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 iShares funds and their shareholders. The Board noted that BFA is an indirect wholly-owned subsidiary of BlackRock. The Board acknowledged that additional resources to support iShares funds and their shareholders have been added or enhanced since BlackRock’s acquisition of BFA in December 2009, including, in such areas as investor education, product management, customized portfolio consulting support, and capital markets support. The Board considered representations by BFA, BTC, and BlackRock that the scope and quality of services to be provided to the Fund would be similar to the scope and quality of services provided to other iShares funds. The Board also considered BFA’s compliance program and its compliance record with respect to other iShares 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 who will be responsible for the day-to-day management of the Fund. In addition to the above considerations, the Board reviewed and considered BFA’s investment and risk management processes and strategies, and matters related to BFA’s portfolio compliance policies and procedures.
Based on review of this information, the Board concluded that the nature, extent and quality of services to be provided by BFA to the Fund under the Advisory Contract supported the Board’s approval of the Advisory Contract.
Costs of Services to be Provided to the Fund and Profits to be Realized by BFA and its Affiliates — The Board did not consider the profitability of the Fund to BFA based on the fees payable under the Advisory Contract or revenue to be received by BFA or its affiliates in connection with services to be provided to the Fund since the proposed relationships had not yet commenced. The Board noted that it expects to receive profitability information from BFA on at least an annual basis following the Fund’s launch and will thus be in a position to evaluate whether, following the expiration of the Advisory Contract’s initial two-year term, any adjustments in Fund fees would be appropriate.
Economies of Scale — The Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Fund’s assets. The Board noted that the Advisory Contract for the Fund did not provide for any breakpoints in the Fund’s investment advisory fee rate as the assets of the Fund increase. However, while the Board noted that the investment advisory fee rate may reflect certain potential economies of scale, the Board further noted that should material economies of scale exist in the future, a breakpoint structure for the Fund may be appropriate.
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 following an initial two-year period, concluded that the investment advisory fee rate incorporates potential economies of scale and supported the Board’s approval of the Advisory Contract.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board considered certain information received at previous meetings regarding the investment advisory/management fee rates for other
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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 that track the same underlying index as the Fund. The Board further noted that BFA previously provided the Board with detailed information regarding how Other Accounts (particularly institutional clients) generally differ from the iShares funds, including in terms of the different, generally more extensive, services provided to the iShares funds, as well as other significant differences in the approach of BFA and its affiliates to the iShares 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 Fund, as a publicly traded exchange traded fund, as compared to 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 to be borne by BFA under this arrangement. The Board noted that the investment advisory fee rate under the Advisory Contract for the Fund was generally higher than the investment advisory/management fee rates for the Other Accounts 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 — Except as noted below, the Board did not consider ancillary revenue to be received by BFA and/or its affiliates in connection with the services to be provided to the Fund by BFA since the proposed relationship had not yet commenced. However, the Board noted that BFA generally would not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Fund. The Board considered the potential 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 also considered the potential for revenue to BTC, the Fund’s securities lending agent, and its affiliates, in the event of any lending of the Fund’s securities. 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, will be reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that the existence of any such ancillary benefits would not alter the Board’s conclusion with respect to the appropriateness of approving the Advisory Contract.
Based on the considerations described above, the Board determined that the investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services to be 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 Advisory Contract.
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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 ETF | 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 | ||||||||||||||||||||||||
MSCI Brazil Capped | $ | 1.364279 | $ | — | $ | — | $ | 1.364279 | 100 | % | — | % | — | % | 100 | % | ||||||||||||||||
MSCI Canada | 0.656918 | — | 0.023346 | 0.680264 | 97 | — | 3 | 100 | ||||||||||||||||||||||||
MSCI Chile Capped | 0.713758 | — | — | 0.713758 | 100 | — | — | 100 | ||||||||||||||||||||||||
MSCI Israel Capped | 0.854565 | — | 0.177142 | 1.031707 | 83 | — | 17 | 100 | ||||||||||||||||||||||||
MSCI South Africa | 1.595803 | — | 0.181818 | 1.777621 | 90 | — | 10 | 100 | ||||||||||||||||||||||||
MSCI USA | 0.688968 | — | 0.006967 | 0.695935 | 99 | — | 1 | 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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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 Capped ETF
Period Covered: January 1, 2008 through June 30, 2013
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% | 4 | 0.29 | ||||||
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% | 102 | 7.38 | ||||||
Greater than 0.5% and Less than 1.0% | 147 | 10.64 | ||||||
Between 0.5% and –0.5% | 891 | 64.48 | ||||||
Less than –0.5% and Greater than –1.0% | 80 | 5.79 | ||||||
Less than –1.0% and Greater than –1.5% | 16 | 1.16 | ||||||
Less than –1.5% and Greater than –2.0% | 8 | 0.58 | ||||||
Less than –2.0% and Greater than –2.5% | 6 | 0.43 | ||||||
Less than –2.5% and Greater than –3.0% | 2 | 0.14 | ||||||
Less than –3.0% | 7 | 0.51 | ||||||
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1,382 | 100.00 | % | ||||||
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iShares MSCI Canada ETF
Period Covered: January 1, 2008 through June 30, 2013
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% | 1 | 0.07 | ||||||
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% | 20 | 1.45 | ||||||
Greater than 0.5% and Less than 1.0% | 105 | 7.60 | ||||||
Between 0.5% and –0.5% | 1,117 | 80.83 | ||||||
Less than –0.5% and Greater than –1.0% | 100 | 7.24 | ||||||
Less than –1.0% and Greater than –1.5% | 22 | 1.59 | ||||||
Less than –1.5% and Greater than –2.0% | 3 | 0.22 | ||||||
Less than –2.0% and Greater than –2.5% | 1 | 0.07 | ||||||
Less than –2.5% | 2 | 0.14 | ||||||
|
|
|
| |||||
1,382 | 100.00 | % | ||||||
|
|
|
|
SUPPLEMENTAL INFORMATION | 97 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Chile Capped ETF
Period Covered: January 1, 2008 through June 30, 2013
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% | 2 | 0.14 | ||||||
Greater than 3.0% and Less than 3.5% | 1 | 0.07 | ||||||
Greater than 2.5% and Less than 3.0% | 5 | 0.36 | ||||||
Greater than 2.0% and Less than 2.5% | 8 | 0.58 | ||||||
Greater than 1.5% and Less than 2.0% | 14 | 1.01 | ||||||
Greater than 1.0% and Less than 1.5% | 47 | 3.40 | ||||||
Greater than 0.5% and Less than 1.0% | 232 | 16.80 | ||||||
Between 0.5% and –0.5% | 793 | 57.38 | ||||||
Less than –0.5% and Greater than –1.0% | 204 | 14.76 | ||||||
Less than –1.0% and Greater than –1.5% | 34 | 2.46 | ||||||
Less than –1.5% and Greater than –2.0% | 19 | 1.37 | ||||||
Less than –2.0% and Greater than –2.5% | 7 | 0.51 | ||||||
Less than –2.5% and Greater than –3.0% | 4 | 0.29 | ||||||
Less than –3.0% | 8 | 0.58 | ||||||
|
|
|
| |||||
1,382 | 100.00 | % | ||||||
|
|
|
|
98 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Israel Capped ETF
Period Covered: April 1, 2008 through June 30, 2013
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 5.0% | 3 | 0.23 | % | |||||
Greater than 4.5% and Less than 5.0% | 1 | 0.08 | ||||||
Greater than 4.0% and Less than 4.5% | 3 | 0.23 | ||||||
Greater than 3.5% and Less than 4.0% | 1 | 0.08 | ||||||
Greater than 3.0% and Less than 3.5% | 5 | 0.38 | ||||||
Greater than 2.5% and Less than 3.0% | 6 | 0.45 | ||||||
Greater than 2.0% and Less than 2.5% | 14 | 1.06 | ||||||
Greater than 1.5% and Less than 2.0% | 33 | 2.50 | ||||||
Greater than 1.0% and Less than 1.5% | 80 | 6.06 | ||||||
Greater than 0.5% and Less than 1.0% | 198 | 14.98 | ||||||
Between 0.5% and –0.5% | 641 | 48.51 | ||||||
Less than –0.5% and Greater than –1.0% | 160 | 12.11 | ||||||
Less than –1.0% and Greater than –1.5% | 80 | 6.06 | ||||||
Less than –1.5% and Greater than –2.0% | 51 | 3.86 | ||||||
Less than –2.0% and Greater than –2.5% | 14 | 1.06 | ||||||
Less than –2.5% and Greater than –3.0% | 12 | 0.91 | ||||||
Less than –3.0% and Greater than –3.5% | 5 | 0.38 | ||||||
Less than –3.5% and Greater than –4.0% | 3 | 0.23 | ||||||
Less than –4.0% and Greater than –4.5% | 1 | 0.08 | ||||||
Less than –4.5% and Greater than –5.0% | 4 | 0.30 | ||||||
Less than –5.0% and Greater than –5.5% | 2 | 0.15 | ||||||
Less than –5.5% and Greater than –6.0% | 2 | 0.15 | ||||||
Less than –6.0% | 2 | 0.15 | ||||||
|
|
|
| |||||
1,321 | 100.00 | % | ||||||
|
|
|
|
SUPPLEMENTAL INFORMATION | 99 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Mexico Capped ETF
Period Covered: January 1, 2008 through June 30, 2013
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% | 2 | 0.14 | ||||||
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% | 10 | 0.72 | ||||||
Greater than 1.0% and Less than 1.5% | 31 | 2.24 | ||||||
Greater than 0.5% and Less than 1.0% | 103 | 7.46 | ||||||
Between 0.5% and –0.5% | 994 | 71.93 | ||||||
Less than –0.5% and Greater than –1.0% | 156 | 11.30 | ||||||
Less than –1.0% and Greater than –1.5% | 50 | 3.63 | ||||||
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% | 1 | 0.07 | ||||||
Less than –3.5% | 1 | 0.07 | ||||||
|
|
|
| |||||
1,382 | 100.00 | % | ||||||
|
|
|
|
iShares MSCI South Africa ETF
Period Covered: January 1, 2008 through June 30, 2013
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 4.5% | 10 | 0.72 | % | |||||
Greater than 4.0% and Less than 4.5% | 4 | 0.29 | ||||||
Greater than 3.5% and Less than 4.0% | 4 | 0.29 | ||||||
Greater than 3.0% and Less than 3.5% | 12 | 0.87 | ||||||
Greater than 2.5% and Less than 3.0% | 9 | 0.65 | ||||||
Greater than 2.0% and Less than 2.5% | 38 | 2.75 | ||||||
Greater than 1.5% and Less than 2.0% | 55 | 3.98 | ||||||
Greater than 1.0% and Less than 1.5% | 117 | 8.47 | ||||||
Greater than 0.5% and Less than 1.0% | 230 | 16.64 | ||||||
Between 0.5% and –0.5% | 539 | 39.00 | ||||||
Less than –0.5% and Greater than –1.0% | 155 | 11.22 | ||||||
Less than –1.0% and Greater than –1.5% | 75 | 5.43 | ||||||
Less than –1.5% and Greater than –2.0% | 60 | 4.34 | ||||||
Less than –2.0% and Greater than –2.5% | 27 | 1.95 | ||||||
Less than –2.5% and Greater than –3.0% | 9 | 0.65 | ||||||
Less than –3.0% and Greater than –3.5% | 17 | 1.23 | ||||||
Less than –3.5% and Greater than –4.0% | 6 | 0.43 | ||||||
Less than –4.0% | 15 | 1.09 | ||||||
|
|
|
| |||||
1,382 | 100.00 | % | ||||||
|
|
|
|
100 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Turkey ETF
Period Covered: April 1, 2008 through June 30, 2013
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 6.0% | 7 | 0.53 | % | |||||
Greater than 5.5% and Less than 6.0% | 3 | 0.23 | ||||||
Greater than 5.0% and Less than 5.5% | 1 | 0.08 | ||||||
Greater than 4.5% and Less than 5.0% | 2 | 0.15 | ||||||
Greater than 4.0% and Less than 4.5% | 3 | 0.23 | ||||||
Greater than 3.5% and Less than 4.0% | 2 | 0.15 | ||||||
Greater than 3.0% and Less than 3.5% | 11 | 0.83 | ||||||
Greater than 2.5% and Less than 3.0% | 22 | 1.67 | ||||||
Greater than 2.0% and Less than 2.5% | 21 | 1.59 | ||||||
Greater than 1.5% and Less than 2.0% | 43 | 3.26 | ||||||
Greater than 1.0% and Less than 1.5% | 118 | 8.93 | ||||||
Greater than 0.5% and Less than 1.0% | 234 | 17.70 | ||||||
Between 0.5% and –0.5% | 529 | 40.04 | ||||||
Less than –0.5% and Greater than –1.0% | 128 | 9.69 | ||||||
Less than –1.0% and Greater than –1.5% | 81 | 6.13 | ||||||
Less than –1.5% and Greater than –2.0% | 43 | 3.26 | ||||||
Less than –2.0% and Greater than –2.5% | 24 | 1.82 | ||||||
Less than –2.5% and Greater than –3.0% | 15 | 1.14 | ||||||
Less than –3.0% and Greater than –3.5% | 9 | 0.68 | ||||||
Less than –3.5% and Greater than –4.0% | 7 | 0.53 | ||||||
Less than –4.0% and Greater than –4.5% | 4 | 0.30 | ||||||
Less than –4.5% and Greater than –5.0% | 2 | 0.15 | ||||||
Less than –5.0% and Greater than –5.5% | 1 | 0.08 | ||||||
Less than –5.5% and Greater than –6.0% | 4 | 0.30 | ||||||
Less than –6.0% | 7 | 0.53 | ||||||
|
|
|
| |||||
1,321 | 100.00 | % | ||||||
|
|
|
|
iShares MSCI USA ETF
Period Covered: July 1, 2010 through June 30, 2013
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 1.5% | 1 | 0.13 | % | |||||
Greater than 1.0% and Less than 1.5% | 3 | 0.40 | ||||||
Greater than 0.5% and Less than 1.0% | 7 | 0.93 | ||||||
Between 0.5% and –0.5% | 731 | 96.95 | ||||||
Less than –0.5% and Greater than –1.0% | 12 | 1.59 | ||||||
|
|
|
| |||||
754 | 100.00 | % | ||||||
|
|
|
|
SUPPLEMENTAL INFORMATION | 101 |
Table of Contents
Director and Officer Information
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 of the Company (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 ETF, Inc. and a Trustee of iShares U.S. ETF Trust and, as a result, oversees a total of 298 funds (as of August 31, 2013) 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 (56) | Director (since 2009). | President and Director, BlackRock, Inc. (since 2006); 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 2006); Trustee of iShares Trust (since 2009); Director of iShares MSCI Russia Capped ETF, 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 ETF, 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 Company due to his affiliations with BlackRock, Inc. |
b | Michael Latham is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BlackRock, Inc. and its affiliates. |
102 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Director and Officer Information (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 (58) | 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 Paine Webber Inc.) (2003-2005) 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Independent Chairman of iShares, Trust, iShares MSCI Russia Capped ETF, Inc. and iShares U.S. ETF Trust (since 2012). | |||
Cecilia H. Herbert (64) | Director (since 2005); Nominating and Governance Committee Chair and Equity Plus Committee Chair (since 2012). | Trustee and Member (since 2011) of the Investment Committee, WNET, the New York public broadcasting company; Director (since 1998) and President (2007-2011) of the Board of Directors, Catholic Charities CYO; Trustee (2002-2011) and Chair of the Finance and Investment Committee (2006-2010), the Thacher School; 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of Forward Funds (34 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 ETF, 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 (2 portfolios) (since 2002). | |||
John E. Kerrigan (58) | 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). |
DIRECTORAND OFFICER INFORMATION | 103 |
Table of Contents
Director and Officer Information (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 (52) | 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). | |||
George G.C. Parker (74) | 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 2000); Director of iShares MSCI Russia Capped ETF, 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 (49) | 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 (2007-2008). | Trustee of iShares Trust (since 2011); Director of iShares MSCI Russia Capped ETF, Inc. (since 2011); Trustee of iShares U.S. ETF Trust (since 2011). |
104 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Director and Officer Information (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 of Legal & Compliance, BlackRock (since 2006); Director of Legal & Compliance, BlackRock (2004-2006). | ||
Eilleen M. Clavere (61) | Secretary (since 2007). | Director of Global Fund Administration, BlackRock (since 2009); Director of Legal Administration of Intermediary Investor Business, BGI (2006-2009); Legal Counsel and Vice President of Atlas Funds, Atlas Advisers, Inc. and Atlas Securities, Inc. (2005-2006); Counsel of Kirkpatrick & Lockhart LLP (2001-2005). | ||
Jack Gee (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). | ||
Scott Radell (44) | Executive Vice President (since 2012). | Managing Director, BlackRock (since 2009); Head of Portfolio Solutions, BlackRock (since 2009); Head of Portfolio Solutions, BGI (2007-2009); Credit Portfolio Manager, BGI (2005-2007); Credit Research Analyst, BGI (2003-2005). | ||
Amy Schioldager (50) | Executive Vice President (since 2007). | Senior Managing Director, BlackRock (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008); Head of Domestic Equity Portfolio Management, BGI (2001-2006). | ||
Ira P. Shapiro (50) | Vice President (since 2007). | Managing Director, BlackRock (since 2009); Head of Strategic Product Initiatives for iShares (since 2012); Chief Legal Officer, Exchange-Traded Fund Complex (2007-2012); Associate General Counsel, BGI (2004-2009). |
DIRECTORAND OFFICER INFORMATION | 105 |
Table of Contents
Notes:
106 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
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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.
©2013 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc. or its subsidiaries. All other marks are the property of their respective owners.
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Table of Contents
AUGUST 31, 2013
2013 ANNUAL REPORT
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iShares, Inc.
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Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI EMERGING MARKETS ETF
EMERGING MARKETS OVERVIEW
Stocks in emerging markets posted mixed results for the 12-month period ended August 31, 2013 (the “reporting period”), but produced relatively flat returns overall. Emerging markets stocks experienced significant volatility during the reporting period, including a substantial rally during the first four months of the reporting period, followed by a sharp decline over the subsequent six months before recovering somewhat during the final two months of the reporting period.
Emerging markets stocks posted strong gains during the last four months of 2012 amid improving global economic conditions. In the fall of 2012, central banks around the world took aggressive actions to stimulate economic growth. Most notably, central banks in the U.S. and U.K. increased their quantitative easing activity, while the Bank of Japan introduced quantitative easing measures for the first time. In addition, a temporary resolution to the “fiscal cliff” in the U.S. (the expiration of certain federal tax cuts and the implementation of automatic U.S. government spending reductions set to take place in early 2013) and positive signs in Europe regarding its sovereign debt crisis helped lift investor confidence. As a result, emerging markets stocks advanced by approximately 15% as a group for the last four months of 2012.
Market conditions changed in early 2013 as evidence of a slowdown in several major emerging economies appeared, driven in part by lower exports to developed countries. In particular, the four largest emerging markets — China, India, Russia and Brazil — all experienced weaker economic growth during the reporting period. The slowdown in emerging economies led to a sharp reversal in emerging markets stocks; from their peak in early January 2013 through their trough in late June 2013, emerging markets stocks fell by more than 17%.
Although they remained volatile, emerging markets stocks rebounded over the final two months of the reporting period. Promising economic news in Europe and Japan led to optimism regarding a recovery in exports from emerging markets to developed economies. For the reporting period, emerging markets stocks advanced by less than 1%.
Emerging markets in Asia held up the best, posting gains of more than 6% as a group for the reporting period. Despite a continued slowdown in the Chinese economy, China’s stock market generated double-digit gains thanks to a robust property market and better economic data late in the reporting period. Other strong performers in this region included the Philippines and Taiwan. On the downside, stock markets in India and Indonesia produced the most significant declines as both economies slowed markedly during the reporting period.
Emerging markets in Latin America faced the largest declines, falling by more than 11% for the reporting period. Brazil, the largest market in the region, declined by approximately 16% for the reporting period. The Brazilian economy nearly slipped into recession in late 2012, and although it recovered somewhat in the first half of 2013, its growth rate for the 12 months ended June 30, 2013 was just a third of its peak growth rate three years earlier. Chile, whose economy slowed as global demand for commodities eased, and Peru posted the largest declines among Latin American stock markets, while Mexico was the only market in the region to deliver a positive return for the reporting period.
Eastern European stock markets generated modestly negative returns for the reporting period. Stock markets in Hungary, where the economy emerged from recession during the reporting period, and Poland posted the best returns, while Turkey and the Czech Republic declined the most. Russia, the largest market in the region, declined slightly for the reporting period.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 5 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI EMERGING MARKETS ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | (0.08)% | (1.26)% | 0.54% | (0.08)% | (1.26)% | 0.54% | ||||||||||||||||||||
5 Years | 1.10% | 0.91% | 1.88% | 5.60% | 4.62% | 9.78% | ||||||||||||||||||||
10 Years | 11.64% | 11.39% | 12.17% | 200.62% | 193.96% | 215.39% |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 8 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 895.20 | $ | 3.20 | $ | 1,000.00 | $ | 1,021.80 | $ | 3.41 | 0.67% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 8 for more information. |
6 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS ETF
The iShares MSCI Emerging Markets ETF (the “Fund”), formerly the iShares MSCI Emerging Markets Index 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 reporting period ended August 31, 2013, the total return for the Fund was -0.08%, net of fees, while the total return for the Index was 0.54%.
As represented by the Index, emerging markets stocks advanced by less than 1% for the reporting period. Although just 8 of the 21 countries represented in the Index generated positive returns for the reporting period, they included the three largest components of the Index — China, South Korea and Taiwan — which together comprised about 44% of the Index as of the end of the reporting period. Other noteworthy positive performers included the Philippines and Poland, both of which produced double-digit gains for the reporting period.
Among the declining components of the Index, Peru and the Czech Republic each fell by more than 20% for the reporting period. The Czech Republic remained mired in recession throughout the reporting period, while Peru’s market was weighed down by mining stocks, which fell along with global demand for commodities. Other notable decliners in the Index included Brazil, the third-largest component within the Index, and South Africa, the fifth-largest country weighting in the Index.
From a sector perspective, financials stocks (the Index’s largest sector weighting as of August 31, 2013) and consumer discretionary stocks posted positive returns for the reporting period. The energy and materials sectors, which together comprised approximately 20% of the Index as of August 31, 2013, declined as weaker global demand for commodities led to lower commodity prices.
A stronger U.S. dollar lowered international equity returns for U.S. investors and had a negative impact on Index performance for the reporting period. In local currency terms, the Index returned 5.88% for the reporting period. Although the U.S. dollar fell by 3.5% against the Chinese yuan, it appreciated by 17% versus the Brazilian real and 18% against the Indian rupee.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector* | Percentage of Net Assets |
Financial | 25.94 | % | ||
Communications | 11.49 | |||
Energy | 10.85 | |||
Technology | 10.61 | |||
Consumer Non-Cyclical | 10.22 | |||
Consumer Cyclical | 8.82 | |||
Basic Materials | 8.79 | |||
Industrial | 7.05 | |||
Utilities | 3.27 | |||
Diversified | 2.24 | |||
Short-Term and Other Net Assets | 0.72 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Samsung Electronics Co. Ltd. (South Korea) | 3.90 | % | ||
Taiwan Semiconductor Manufacturing Co. Ltd. (Taiwan) | 2.37 | |||
China Mobile Ltd. (China) | 1.86 | |||
China Construction Bank Corp. Class H (China) | 1.52 | |||
Tencent Holdings Ltd. (China) | 1.39 | |||
Industrial and Commercial Bank of China Ltd. Class H (China) | 1.38 | |||
Gazprom OAO (Russia) | 1.31 | |||
America Movil SAB de CV Series L (Mexico) | 1.05 | |||
Hyundai Motor Co. (South Korea) | 1.02 | |||
CNOOC Ltd. (China) | 1.02 | |||
|
| |||
TOTAL | 16.82 | % | ||
|
|
* | 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. |
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 7 |
Table of Contents
Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.iShares.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are redeemed or sold in the market. Performance for certain funds may reflect a waiver of a portion of investment management fees. Without such waiver, performance would have been lower.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The 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 a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of a fund may not have traded in the secondary market until after the fund’s inception, for the period from inception to the first day of secondary trading, 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 at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. 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.
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 expense example, which is based on an investment of $1,000 invested on March 1, 2013 and held through August 31, 2013, 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.
Actual Expenses — The table provides information about actual account values and actual expenses. To estimate the expenses that you paid on your account 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 for your Fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Example for Comparison Purposes — The table also 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. 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 hypothetical examples are 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.
8 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments
iSHARES® MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 92.55% |
| |||||||
BRAZIL — 5.53% |
| |||||||
ALL–America Latina Logistica SA | 4,567,600 | $ | 17,734,708 | |||||
Anhanguera Educacional Participacoes SA | 3,555,000 | 20,712,077 | ||||||
Arteris SA | 1,225,300 | 11,092,233 | ||||||
Banco Bradesco SA | 6,296,040 | 83,692,943 | ||||||
Banco do Brasil SA | 5,844,874 | 56,673,543 | ||||||
Banco Santander (Brasil) SA Units | 9,312,480 | 53,433,547 | ||||||
BB Seguridade Participacoes SA | 6,309,200 | 51,063,860 | ||||||
BM&F Bovespa SA | 18,485,900 | 90,905,339 | ||||||
BR Malls Participacoes SA | 4,172,300 | 31,767,891 | ||||||
BR Properties SA | 1,652,200 | 12,614,601 | ||||||
BRF–Brasil Foods SA | 6,595,185 | 153,144,124 | ||||||
CCR SA | 9,161,500 | 66,865,230 | ||||||
Centrais Eletricas Brasileiras SA | 2,668,837 | 5,557,270 | ||||||
CETIP SA–Mercados Organizados | 1,994,423 | 19,632,129 | ||||||
Cielo SA | 3,652,062 | 89,734,537 | ||||||
Companhia de Bebidas das Americas | 1,349,900 | 47,517,934 | ||||||
Companhia de Saneamento Basico do Estado de Sao Paulo | 3,925,724 | 32,351,057 | ||||||
Companhia de Saneamento de Minas Gerais SA | 382,400 | 4,624,769 | ||||||
Companhia Hering SA | 1,378,100 | 18,498,726 | ||||||
Companhia Siderurgica Nacional SA | 7,359,428 | 26,066,963 | ||||||
Cosan SA Industria e Comercio | 1,253,300 | 21,921,678 | ||||||
CPFL Energia SA | 2,194,136 | 17,998,339 | ||||||
Cyrela Brazil Realty SA Empreendimentos | 3,064,600 | 20,265,654 | ||||||
Duratex SA | 3,305,178 | 16,795,621 | ||||||
EcoRodovias Infraestrutura e Logistica SA | 1,913,400 | 12,314,917 | ||||||
EDP Energias do Brasil SA | 2,735,800 | 12,314,092 | ||||||
Embraer SA | 5,688,500 | 46,853,790 |
Security | Shares | Value | ||||||
Estacio Participacoes SA | 1,574,900 | $ | 11,633,537 | |||||
Fibria Celulose SAa | 2,584,561 | 29,985,778 | ||||||
Hypermarcas SA | 3,193,600 | 21,817,291 | ||||||
JBS SA | 5,842,965 | 18,090,284 | ||||||
Kroton Educacional SA | 1,645,000 | 22,143,698 | ||||||
Localiza Rent A Car SA | 1,259,687 | 16,506,500 | ||||||
Lojas Americanas SA | 966,300 | 5,524,153 | ||||||
Lojas Renner SA | 1,245,200 | 30,061,429 | ||||||
M Dias Branco SA | 103,700 | 3,976,214 | ||||||
MPX Energia SAa | 986,700 | 2,033,834 | ||||||
MPX Energia SA Newa | 210,098 | 455,159 | ||||||
MRV Engenharia e Participacoes SA | 2,936,800 | 10,290,907 | ||||||
Multiplan Empreendimentos Imobiliarios SA | 681,700 | 13,747,559 | ||||||
Multiplus SA | 390,300 | 4,278,655 | ||||||
Natura Cosmeticos SA | 1,789,200 | 33,696,148 | ||||||
Odontoprev SA | 3,275,200 | 12,138,025 | ||||||
Petroleo Brasileiro SA | 29,543,974 | 198,476,049 | ||||||
Porto Seguro SA | 1,105,500 | 11,956,253 | ||||||
Qualicorp SAa | 1,535,400 | 12,045,772 | ||||||
Raia Drogasil SA | 1,780,000 | 12,639,408 | ||||||
Souza Cruz SA | 3,849,800 | 40,486,707 | ||||||
Sul America SA Units | 1,443,165 | 8,499,205 | ||||||
TIM Participacoes SA | 8,813,376 | 34,775,983 | ||||||
Totvs SA | 1,157,300 | 18,207,563 | ||||||
Tractebel Energia SA | 1,519,300 | 21,857,673 | ||||||
Transmissora Alianca de Energia Eletrica SA | 333,400 | 3,085,479 | ||||||
Ultrapar Participacoes SA | 3,275,400 | 71,509,869 | ||||||
Vale SA | 13,062,248 | 189,131,153 | ||||||
WEG SA | 1,950,500 | 22,974,087 | ||||||
|
| |||||||
1,924,171,944 | ||||||||
CHILE — 1.60% |
| |||||||
AES Gener SA | 21,943,821 | 14,182,739 | ||||||
Aguas Andinas SA Series A | 23,810,897 | 16,433,274 | ||||||
Banco de Chile | 230,322,438 | 32,928,375 | ||||||
Banco de Credito e Inversiones | 328,491 | 15,706,153 | ||||||
Banco Santander (Chile) SA | 675,072,717 | 37,762,972 | ||||||
CAP SA | 756,216 | 16,142,120 | ||||||
Cencosud SA | 11,608,989 | 46,901,372 | ||||||
Colbun SA | 64,526,958 | 16,621,539 |
CONSOLIDATED SCHEDULEOF INVESTMENTS | 9 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
Compania Cervecerias Unidas SA | 1,112,946 | $ | 14,900,038 | |||||
CorpBanca SA | 1,470,799,362 | 13,982,749 | ||||||
E.CL SA | 6,006,319 | 7,845,654 | ||||||
Empresa Nacional de Electricidad SA | 33,693,636 | 45,977,829 | ||||||
Empresa Nacional de Telecomunicaciones SA | 1,180,393 | 18,711,628 | ||||||
Empresas CMPC SA | 11,602,148 | 34,264,385 | ||||||
Empresas Copec SA | 4,310,032 | 57,311,827 | ||||||
Enersis SA | 202,425,368 | 64,105,602 | ||||||
LATAM Airlines Group SA | 2,658,933 | 33,436,406 | ||||||
S.A.C.I. Falabella SA | 6,324,595 | 62,646,786 | ||||||
Vina Concha y Toro SA | 2,907,978 | 5,302,223 | ||||||
|
| |||||||
555,163,671 | ||||||||
CHINA — 19.49% |
| |||||||
Agile Property Holdings Ltd. | 15,924,000 | 16,962,272 | ||||||
Agricultural Bank of China Ltd. Class H | 212,457,000 | 91,236,177 | ||||||
Air China Ltd. Class H | 18,320,000 | 11,694,522 | ||||||
Aluminum Corp. of China Ltd. Class Ha,b | 34,126,000 | 11,442,226 | ||||||
Anhui Conch Cement Co. Ltd. Class H | 12,905,500 | 41,690,237 | ||||||
Anta Sports Products Ltd.b | 8,923,402 | 11,530,549 | ||||||
AviChina Industry & Technology Co. Ltd. Class H | 18,580,000 | 9,464,433 | ||||||
Bank of China Ltd. Class H | 756,967,000 | 318,233,831 | ||||||
Bank of Communications Co. Ltd. Class H | 81,720,600 | 53,957,685 | ||||||
BBMG Corp. Class H | 10,579,500 | 7,244,551 | ||||||
Beijing Capital International Airport Co. Ltd. Class H | 27,178,000 | 17,804,632 | ||||||
Beijing Enterprises Holdings Ltd. | 6,049,000 | 42,904,029 | ||||||
Belle International Holdings Ltd.b | 44,182,000 | 61,079,005 | ||||||
Bosideng International Holdings Ltd.b | 20,594,000 | 4,196,136 | ||||||
Brilliance China Automotive Holdings Ltd.a | 25,486,000 | 37,467,812 | ||||||
BYD Co. Ltd. Class Ha,b | 4,316,000 | 15,500,954 |
Security | Shares | Value | ||||||
China Agri-Industries Holdings Ltd. | 28,509,600 | $ | 13,382,717 | |||||
China BlueChemical Ltd. Class H | 9,496,000 | 4,984,102 | ||||||
China CITIC Bank Corp. Ltd. Class H | 74,492,800 | 35,544,125 | ||||||
China Coal Energy Co. Class H | 40,006,000 | 23,577,249 | ||||||
China Communications Construction Co. Ltd. Class H | 44,842,000 | 34,349,721 | ||||||
China Communications Services Corp. Ltd. Class H | 13,694,000 | 9,200,678 | ||||||
China Construction Bank Corp. Class H | 722,359,760 | 529,119,395 | ||||||
China COSCO Holdings Co. Ltd. Class Ha,b | 25,832,000 | 11,859,321 | ||||||
China Everbright International Ltd. | 13,799,000 | 13,025,983 | ||||||
China Everbright Ltd. | 16,244,000 | 21,869,824 | ||||||
China Gas Holdings Ltd. | 33,526,000 | 34,976,960 | ||||||
China International Marine Containers (Group) Co. Ltd. Class H | 1,069,100 | 1,764,737 | ||||||
China Life Insurance Co. Ltd. Class H | 76,547,000 | 187,951,986 | ||||||
China Longyuan Power Group Corp. Ltd. Class H | 21,891,000 | 23,120,717 | ||||||
China Mengniu Dairy Co. Ltd. | 13,936,000 | 58,947,282 | ||||||
China Merchants Bank Co. Ltd. Class H | 39,784,042 | 68,954,081 | ||||||
China Merchants Holdings (International) Co. Ltd. | 11,576,000 | 39,112,143 | ||||||
China Minsheng Banking Corp. Ltd. Class Hb | 52,893,200 | 56,887,611 | ||||||
China Mobile Ltd. | 60,237,500 | 647,476,997 | ||||||
China National Building Material Co. Ltd. Class Hb | 29,000,000 | 26,664,861 | ||||||
China Oilfield Services Ltd. Class H | 14,320,000 | 36,896,936 | ||||||
China Overseas Grand Oceans Group Ltd.b | 2,219,000 | 2,901,664 |
10 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
China Overseas Land & Investment Ltd. | 43,674,960 | $ | 130,105,692 | |||||
China Pacific Insurance (Group) Co. Ltd. Class H | 25,642,000 | 85,645,285 | ||||||
China Petroleum & Chemical Corp. Class H | 248,762,800 | 179,328,388 | ||||||
China Railway Construction Corp. Ltd. Class Hb | 19,085,500 | 18,164,009 | ||||||
China Railway Group Ltd. Class H | 36,251,000 | 18,606,079 | ||||||
China Resources Cement Holdings Ltd.b | 21,896,000 | 13,892,541 | ||||||
China Resources Enterprise Ltd.b | 14,178,000 | 40,407,227 | ||||||
China Resources Gas Group Ltd.b | 8,294,000 | 19,573,429 | ||||||
China Resources Land Ltd.b | 23,396,000 | 63,963,066 | ||||||
China Resources Power Holdings Co. Ltd. | 19,858,999 | 45,585,755 | ||||||
China Shanshui Cement Group Ltd. | 19,083,000 | 7,579,650 | ||||||
China Shenhua Energy Co. Ltd. Class H | 34,249,500 | 106,444,464 | ||||||
China Shipping Container Lines Co. Ltd. Class Ha,b | 39,371,000 | 10,052,948 | ||||||
China Southern Airlines Co. Ltd. Class H | 12,006,000 | 4,087,465 | ||||||
China State Construction International Holdings Ltd. | 15,054,000 | 24,305,695 | ||||||
China Taiping Insurance Holdings Co. Ltd.a | 7,131,000 | 9,766,226 | ||||||
China Telecom Corp. Ltd. Class H | 131,686,000 | 66,400,013 | ||||||
China Unicom (Hong Kong) Ltd. | 50,818,000 | 77,068,462 | ||||||
China Vanke Co. Ltd. Class B | 9,993,804 | 20,130,922 | ||||||
Chongqing Rural Commercial Bank Co. Ltd. Class H | 23,632,000 | 10,635,985 | ||||||
CITIC Pacific Ltd.b | 14,055,000 | 16,258,299 | ||||||
CITIC Securities Co. Ltd. Class H | 10,733,500 | 20,901,146 |
Security | Shares | Value | ||||||
CNOOC Ltd. | 179,195,000 | $ | 355,875,761 | |||||
COSCO Pacific Ltd. | 15,038,000 | 22,107,861 | ||||||
Country Garden Holdings Co. Ltd. | 42,325,381 | 26,472,467 | ||||||
CSR Corp Ltd. Class H | 18,117,000 | 13,177,019 | ||||||
Dah Chong Hong Holdings Ltd.b | 8,419,000 | 6,470,809 | ||||||
Daphne International Holdings Ltd.b | 9,230,000 | 5,915,751 | ||||||
Datang International Power Generation Co. Ltd. Class H | 27,174,000 | 11,704,472 | ||||||
Dongfeng Motor Group Co. Ltd. Class H | 26,550,000 | 36,772,284 | ||||||
ENN Energy Holdings Ltd. | 8,302,000 | 41,218,792 | ||||||
Evergrande Real Estate Group Ltd.a,b | 63,665,388 | 27,093,751 | ||||||
Far East Horizon Ltd.b | 12,239,000 | 7,402,366 | ||||||
Fosun International Ltd. | 12,470,000 | 9,085,874 | ||||||
Franshion Properties (China) Ltd.b | 23,800,000 | 8,256,216 | ||||||
GCL-Poly Energy Holdings Ltd.a,b | 79,473,000 | 21,009,962 | ||||||
Geely Automobile Holdings Ltd.b | 39,905,000 | 20,996,131 | ||||||
Golden Eagle Retail Group Ltd.b | 6,295,000 | 8,734,938 | ||||||
GOME Electrical Appliances Holdings Ltd.a,b | 95,646,200 | 9,867,554 | ||||||
Great Wall Motor Co. Ltd. Class H | 10,136,000 | 51,631,590 | ||||||
Greentown China Holdings Ltd.b | 3,837,500 | 7,165,867 | ||||||
Guangdong Investment Ltd.b | 29,458,110 | 24,388,872 | ||||||
Guangzhou Automobile Group Co. Ltd. Class H | 23,796,742 | 24,274,248 | ||||||
Guangzhou R&F Properties Co. Ltd. Class H | 11,804,000 | 19,271,464 | ||||||
Haier Electronics Group Co. Ltd. | 8,408,000 | 14,702,940 | ||||||
Haitong Securities Co. Ltd. Class H | 9,184,400 | 13,312,784 | ||||||
Hengan International Group Co. Ltd.b | 7,290,500 | 79,867,943 |
CONSOLIDATED SCHEDULEOF INVESTMENTS | 11 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
Huaneng Power International Inc. Class H | 39,164,000 | $ | 39,040,767 | |||||
Industrial and Commercial Bank of China Ltd. Class H | 731,803,085 | 480,356,662 | ||||||
Inner Mongolia Yitai Coal Co. Ltd. Class B | 10,453,904 | 21,639,581 | ||||||
Intime Retail Group Co. Ltd.b | 9,843,500 | 11,526,228 | ||||||
Jiangsu Expressway Co. Ltd. Class H | 10,124,000 | 11,476,060 | ||||||
Jiangxi Copper Co. Ltd. Class H | 15,266,000 | 29,412,210 | ||||||
Kingboard Chemical Holdings Co. Ltd. | 5,838,100 | 12,693,486 | ||||||
Kunlun Energy Co. Ltd.b | 31,414,000 | 45,777,649 | ||||||
Lee & Man Paper Manufacturing Ltd.b | 13,425,000 | 7,946,553 | ||||||
Lenovo Group Ltd. | 63,700,000 | 61,610,183 | ||||||
Longfor Properties Co. Ltd. | 16,395,500 | 27,401,950 | ||||||
New China Life Insurance Co. Ltd. Class Ha | 3,682,600 | 10,044,232 | ||||||
Nine Dragons Paper (Holdings) Ltd.b | 16,490,000 | 11,206,837 | ||||||
Parkson Retail Group Ltd.b | 8,849,500 | 3,480,730 | ||||||
People’s Insurance Co. Group of China Ltd. Class Hb | 30,789,000 | 14,929,155 | ||||||
PetroChina Co. Ltd. Class H | 215,624,000 | 234,688,249 | ||||||
PICC Property and Casualty Co. Ltd. Class H | 30,545,200 | 42,542,061 | ||||||
Ping An Insurance (Group) Co. of China Ltd. Class H | 18,830,000 | 131,978,038 | ||||||
Poly Property Group Co. Ltd. | 22,229,458 | 13,444,774 | ||||||
Shandong Weigao Group Medical Polymer Co. Ltd. Class H | 13,532,000 | 12,756,489 | ||||||
Shanghai Electric Group Co. Ltd. Class H | 19,856,000 | 7,348,953 | ||||||
Shanghai Industrial Holdings Ltd. | 6,817,000 | 22,329,490 |
Security | Shares | Value | ||||||
Shanghai Pharmaceuticals Holding Co. Ltd. Class H | 5,192,500 | $ | 9,856,804 | |||||
Shenzhou International Group Holdings Ltd. | 1,573,000 | 5,111,885 | ||||||
Shimao Property Holdings Ltd. | 16,156,000 | 41,169,215 | ||||||
Shougang Fushan Resources Group Ltd.b | 23,214,000 | 7,783,504 | ||||||
Shui On Land Ltd. | 67,363,600 | 20,849,149 | ||||||
Sihuan Pharmaceutical Holdings Group Ltd.b | 16,790,000 | 12,536,637 | ||||||
Sino Biopharmaceutical Ltd. | 18,156,000 | 12,971,247 | ||||||
Sino-Ocean Land Holdings Ltd.b | 48,670,500 | 28,809,140 | ||||||
Sinopec Shanghai Petrochemical Co. Ltd. Class Ha | 32,418,000 | 11,622,052 | ||||||
Sinopharm Group Co. Ltd. Class H | 9,230,400 | 23,140,279 | ||||||
SOHO China Ltd.b | 29,218,500 | 24,831,053 | ||||||
Sun Art Retail Group Ltd.b | 20,221,000 | 27,537,109 | ||||||
Tencent Holdings Ltd. | 10,319,500 | 483,876,277 | ||||||
Tingyi (Cayman Islands) Holding Corp.b | 19,492,000 | 48,262,457 | ||||||
Tsingtao Brewery Co. Ltd. Class Hb | 4,046,000 | 29,975,588 | ||||||
Uni-President China Holdings Ltd.b | 5,964,000 | 5,099,211 | ||||||
Want Want China Holdings Ltd.b | 62,556,000 | 92,772,361 | ||||||
Weichai Power Co. Ltd. Class H | 3,984,200 | 14,437,741 | ||||||
Wumart Stores Inc. Class H | 2,319,750 | 4,391,562 | ||||||
Yantai Changyu Pioneer Wine Co. Ltd. Class B | 390,700 | 1,289,838 | ||||||
Yanzhou Coal Mining Co. Ltd. Class Hb | 19,854,800 | 17,667,146 | ||||||
Yingde Gases Group Co. Ltd.b | 9,293,500 | 8,329,442 | ||||||
Yuexiu Property Co. Ltd. | 52,446,000 | 14,811,815 | ||||||
Zhaojin Mining Industry Co. Ltd. Class H | 10,079,000 | 9,553,370 | ||||||
Zhejiang Expressway Co. Ltd. Class H | 28,004,000 | 23,437,785 |
12 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
Zhongsheng Group Holdings Ltd.b | 5,886,000 | $ | 7,803,064 | |||||
Zhuzhou CSR Times Electric Co. Ltd. Class H | 4,858,000 | 15,317,510 | ||||||
Zijin Mining Group Co. Ltd. Class Hb | 65,564,000 | 16,487,388 | ||||||
Zoomlion Heavy Industry Science and Technology Co. Ltd. Class Hb | 10,952,440 | 8,530,994 | ||||||
ZTE Corp. Class Ha,b | 6,357,000 | 12,296,890 | ||||||
|
| |||||||
6,784,847,453 | ||||||||
COLOMBIA — 0.92% |
| |||||||
Almacenes Exito SA | 1,904,396 | 31,448,200 | ||||||
Bancolombia SA | 348,439 | 4,746,370 | ||||||
Bancolombia SA SP ADR | 459,941 | 25,328,951 | ||||||
Cementos Argos SA | 3,758,143 | 17,775,787 | ||||||
Cemex Latam Holdings SAa | 650,545 | 5,038,818 | ||||||
Corporacion Financiera Colombiana SA | 844,582 | 16,825,350 | ||||||
Corporacion Financiera Colombiana SA NVSa | 26,530 | 506,873 | ||||||
Ecopetrol SA | 52,679,465 | 117,920,831 | ||||||
Grupo Argos SA | 2,541,834 | 28,665,524 | ||||||
Grupo de Inversiones Suramericana SA | 2,323,042 | 45,918,645 | ||||||
Interconexion Electrica SA ESP | 3,125,084 | 14,910,553 | ||||||
Isagen SA ESPa | 7,388,528 | 11,693,607 | ||||||
|
| |||||||
320,779,509 | ||||||||
CZECH REPUBLIC — 0.27% |
| |||||||
CEZ AS | 1,957,581 | 45,121,450 | ||||||
Komercni Banka AS | 194,481 | 41,782,901 | ||||||
Telefonica O2 Czech Republic AS | 369,522 | 5,506,212 | ||||||
|
| |||||||
92,410,563 | ||||||||
EGYPT — 0.16% |
| |||||||
Orascom Telecom Holding SAE SP GDRa,c | 18,272,482 | 54,525,086 | ||||||
|
| |||||||
54,525,086 | ||||||||
HUNGARY — 0.23% |
| |||||||
Magyar Telekom Telecommunications PLC | 3,514,855 | 4,840,204 |
Security | Shares | Value | ||||||
MOL Hungarian Oil and Gas PLC | 498,943 | $ | 35,313,724 | |||||
OTP Bank PLC | 2,196,556 | 40,705,344 | ||||||
|
| |||||||
80,859,272 | ||||||||
INDIA — 5.61% |
| |||||||
ACC Ltd. | 508,379 | 7,418,317 | ||||||
Adani Enterprises Ltd. | 1,946,949 | 4,169,718 | ||||||
Adani Ports and Special Economic Zone Ltd. | 3,688,242 | 7,030,938 | ||||||
Aditya Birla Nuvo Ltd. | 272,174 | 4,679,934 | ||||||
Ambuja Cements Ltd. | 6,542,657 | 16,992,885 | ||||||
Apollo Hospitals Enterprise Ltd. | 663,834 | 8,686,510 | ||||||
Asian Paints Ltd. | 2,810,494 | 17,906,424 | ||||||
Axis Bank Ltd. | 55,852 | 704,131 | ||||||
Bajaj Auto Ltd. | 783,979 | 21,797,630 | ||||||
Bank of Baroda | 755,555 | 5,269,559 | ||||||
Bank of India | 1,116,180 | 2,404,002 | ||||||
Bharat Heavy Electricals Ltd. | 5,257,886 | 9,470,084 | ||||||
Bharat Petroleum Corp. Ltd. | 1,696,952 | 7,011,774 | ||||||
Bharti Airtel Ltd. | 5,868,587 | 26,567,192 | ||||||
Cairn India Ltd. | 4,684,616 | 22,738,858 | ||||||
Canara Bank Ltd. | 864,291 | 2,652,917 | ||||||
Cipla Ltd. | 3,386,864 | 21,373,588 | ||||||
Coal India Ltd. | 5,344,884 | 20,337,579 | ||||||
Dabur India Ltd. | 3,417,213 | 8,435,711 | ||||||
Divi’s Laboratories Ltd. | 360,079 | 5,418,625 | ||||||
DLF Ltd. | 4,011,953 | 7,881,815 | ||||||
Dr. Reddy’s Laboratories Ltd. | 1,023,419 | 35,516,837 | ||||||
GAIL (India) Ltd. | 3,431,013 | 15,342,709 | ||||||
GlaxoSmithKline Consumer Healthcare Ltd. | 42,983 | 2,645,305 | ||||||
Godrej Consumer Products Ltd. | 1,060,862 | 13,005,876 | ||||||
HCL Technologies Ltd. | 2,091,678 | 32,939,101 | ||||||
HDFC Bank Ltd. | 15,526,299 | 139,588,642 | ||||||
Hero Motocorp Ltd. | 639,811 | 19,817,969 | ||||||
Hindalco Industries Ltd. | 10,174,169 | 16,176,728 | ||||||
Hindustan Unilever Ltd. | 3,932,083 | 37,580,049 | ||||||
Housing Development Finance Corp. Ltd. | 14,627,001 | 159,099,353 | ||||||
ICICI Bank Ltd. | 3,452,300 | 41,997,671 |
CONSOLIDATED SCHEDULEOF INVESTMENTS | 13 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
Idea Cellular Ltd.a | 6,807,443 | $ | 16,475,104 | |||||
Infosys Ltd. | 4,556,820 | 214,209,163 | ||||||
Infrastructure Development Finance Co. Ltd. | 1,056,369 | 1,287,085 | ||||||
ITC Ltd. | 21,741,282 | 101,582,167 | ||||||
Jaiprakash Associates Ltd. | 9,063,104 | 4,540,468 | ||||||
Jindal Steel & Power Ltd. | 3,493,042 | 11,728,945 | ||||||
JSW Steel Ltd. | 839,233 | 6,877,595 | ||||||
Kotak Mahindra Bank Ltd. | 2,903,240 | 28,984,064 | ||||||
Larsen & Toubro Ltd. | 3,134,169 | 34,370,549 | ||||||
LIC Housing Finance Ltd. | 3,140,952 | 7,886,846 | ||||||
Lupin Ltd. | 758,306 | 9,138,236 | ||||||
Mahindra & Mahindra Financial Services Ltd. | 1,023,440 | 3,914,383 | ||||||
Mahindra & Mahindra Ltd. | 2,989,387 | 35,438,737 | ||||||
NTPC Ltd. | 10,043,844 | 19,899,185 | ||||||
Oil & Natural Gas Corp. Ltd. | 7,614,247 | 28,713,329 | ||||||
Oil India Ltd. | 416,702 | 2,741,328 | ||||||
Piramal Enterprises Ltd. | 376,876 | 3,585,370 | ||||||
Power Finance Corp. Ltd. | 2,719,489 | 4,490,635 | ||||||
Power Grid Corp. of India Ltd. | 10,019,412 | 14,808,470 | ||||||
Ranbaxy Laboratories Ltd.a | 1,262,783 | 7,795,157 | ||||||
Reliance Capital Ltd. | 962,607 | 4,549,327 | ||||||
Reliance Communications Ltd. | 4,327,016 | 8,068,539 | ||||||
Reliance Industries Ltd. | 13,005,426 | 168,074,512 | ||||||
Reliance Infrastructure Ltd. | 851,330 | 4,410,629 | ||||||
Reliance Power Ltd.a | 4,943,622 | 5,065,585 | ||||||
Rural Electrification Corp. Ltd. | 2,683,954 | 6,859,174 | ||||||
Sesa Goa Ltd. | 3,434,078 | 9,810,538 | ||||||
Sesa Goa Ltd. New | 7,860,923 | 22,457,230 | ||||||
Shriram Transport Finance Co. Ltd. | 1,311,927 | 10,294,666 | ||||||
Siemens Ltd. | 535,787 | 3,508,930 | ||||||
State Bank of India | 1,345,970 | 30,943,865 | ||||||
Sun Pharmaceuticals Industries Ltd. | 6,182,725 | 48,773,063 | ||||||
Tata Communications Ltd. | 402,656 | 1,004,659 | ||||||
Tata Communications Ltd. SP ADRb | 1,392,503 | 6,948,816 | ||||||
Tata Consultancy Services Ltd. | 4,752,908 | 146,263,244 |
Security | Shares | Value | ||||||
Tata Motors Ltd. | 7,733,495 | $ | 35,027,219 | |||||
Tata Power Co. Ltd. | 9,012,404 | 10,346,463 | ||||||
Tata Steel Ltd. | 2,949,942 | 12,233,754 | ||||||
Titan Industries Ltd. | 2,142,635 | 7,285,348 | ||||||
Ultratech Cement Ltd. | 563,492 | 12,578,571 | ||||||
Unitech Ltd.a | 12,944,235 | 3,242,426 | ||||||
United Breweries Ltd. | 639,551 | 6,926,452 | ||||||
United Spirits Ltd. | 850,198 | 28,320,846 | ||||||
Wipro Ltd. | 5,742,043 | 42,028,939 | ||||||
Wockhardt Ltd. | 272,157 | 1,933,769 | ||||||
Zee Entertainment Enterprises Ltd. | 4,561,432 | 15,982,617 | ||||||
|
| |||||||
1,954,064,428 | ||||||||
INDONESIA — 2.59% |
| |||||||
PT Adaro Energy Tbk | 111,676,000 | 9,510,868 | ||||||
PT Astra Agro Lestari Tbk | 4,140,000 | 7,487,637 | ||||||
PT Astra International Tbk | 212,699,500 | 117,841,756 | ||||||
PT Bank Central Asia Tbk | 137,460,500 | 113,921,019 | ||||||
PT Bank Danamon Indonesia Tbk | 37,743,216 | 13,998,171 | ||||||
PT Bank Mandiri (Persero) Tbk | 97,079,400 | 63,119,390 | ||||||
PT Bank Negara Indonesia (Persero) Tbk | 74,351,276 | 26,213,591 | ||||||
PT Bank Rakyat Indonesia (Persero) Tbk | 120,197,122 | 72,646,612 | ||||||
PT Bukit Asam (Persero) Tbk | 5,407,500 | 5,991,827 | ||||||
PT Bumi Resources Tbka | 162,877,000 | 6,115,345 | ||||||
PT Bumi Serpong Damai Tbk | 61,601,500 | 7,389,924 | ||||||
PT Charoen Pokphand Indonesia Tbk | 82,475,945 | 25,490,505 | ||||||
PT Global Mediacom Tbk | 46,000,500 | 7,371,875 | ||||||
PT Gudang Garam Tbk | 5,952,500 | 20,686,573 | ||||||
PT Indo Tambangraya Megah Tbk | 3,702,500 | 10,866,770 | ||||||
PT Indocement Tunggal Prakarsa Tbk | 11,040,500 | �� | 19,917,386 | |||||
PT Indofood CBP Sukses Makmur Tbk | 2,495,500 | 2,285,256 | ||||||
PT Indofood Sukses Makmur Tbk | 48,078,500 | 28,618,155 | ||||||
PT Indosat Tbk | 3,846,560 | 1,453,027 |
14 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
PT Jasa Marga (Persero) Tbk | 16,539,000 | $ | 8,254,354 | |||||
PT Kalbe Farma Tbk | 196,830,515 | 24,333,443 | ||||||
PT Lippo Karawaci Tbk | 155,049,000 | 16,328,420 | ||||||
PT Matahari Department Store Tbka | 9,357,000 | 10,668,008 | ||||||
PT Media Nusantara Citra Tbka | 28,046,500 | 7,576,664 | ||||||
PT Perusahaan Gas Negara (Persero) Tbk | 131,225,500 | 64,891,731 | ||||||
PT Semen Gresik (Persero) Tbk | 27,144,000 | 31,320,000 | ||||||
PT Telekomunikasi Indonesia (Persero) Tbk | 495,278,500 | 99,781,383 | ||||||
PT Unilever Indonesia Tbk | 12,639,000 | 36,111,429 | ||||||
PT United Tractors Tbk | 22,690,153 | 32,830,075 | ||||||
PT XL Axiata Tbk | 18,805,000 | 7,706,261 | ||||||
|
| |||||||
900,727,455 | ||||||||
MALAYSIA — 3.83% |
| |||||||
AirAsia Bhd | 13,361,800 | 10,494,998 | ||||||
Alliance Financial Group Bhd | 7,808,300 | 12,004,541 | ||||||
AMMB Holdings Bhd | 23,344,975 | 52,805,591 | ||||||
Astro Malaysia Holdings Bhd | 1,161,000 | 1,046,217 | ||||||
Axiata Group Bhd | 25,139,700 | 51,584,315 | ||||||
Berjaya Sports Toto Bhd | 13,814,948 | 16,781,077 | ||||||
British American Tobacco (Malaysia) Bhd | 1,460,500 | 27,629,338 | ||||||
Bumi Armada Bhda | 9,188,700 | 10,909,789 | ||||||
CIMB Group Holdings Bhd | 45,099,000 | 99,953,031 | ||||||
DiGi.Com Bhd | 26,853,700 | 38,423,743 | ||||||
Felda Global Ventures Holdings Bhd | 11,011,500 | 14,649,594 | ||||||
Gamuda Bhd | 25,686,700 | 34,955,339 | ||||||
Genting Bhd | 22,640,800 | 64,308,901 | ||||||
Genting Malaysia Bhd | 42,485,100 | 54,452,324 | ||||||
Genting Plantations Bhd | 3,950,800 | 11,414,291 | ||||||
Hong Leong Bank Bhd | 3,585,200 | 15,389,701 | ||||||
Hong Leong Financial Group Bhd | 726,700 | 3,207,900 | ||||||
IHH Healthcare Bhda | 20,448,600 | 24,963,509 | ||||||
IJM Corp. Bhd | 20,686,820 | 34,827,038 | ||||||
IOI Corp. Bhd | 36,921,220 | 60,697,036 | ||||||
Kuala Lumpur Kepong Bhd | 5,602,100 | 36,702,090 |
Security | Shares | Value | ||||||
Lafarge Malaysia Bhd | 3,645,500 | $ | 10,498,951 | |||||
Malayan Banking Bhd | 39,533,600 | 120,354,974 | ||||||
Malaysia Airports Holdings Bhd | 4,568,600 | 9,708,145 | ||||||
Maxis Bhd | 17,284,900 | 35,993,216 | ||||||
MISC Bhda | 8,666,700 | 12,453,558 | ||||||
MMC Corp. Bhd | 12,477,400 | 9,496,461 | ||||||
Parkson Holdings Bhd | 7,101,210 | 7,242,272 | ||||||
Petronas Chemicals Group Bhd | 21,014,100 | 42,351,272 | ||||||
Petronas Dagangan Bhd | 1,332,600 | 11,278,265 | ||||||
Petronas Gas Bhd | 4,424,800 | 27,130,062 | ||||||
PPB Group Bhd | 5,072,500 | 20,600,396 | ||||||
Public Bank Bhd Foreign | 8,846,900 | 46,217,461 | ||||||
RHB Capital Bhd | 3,803,000 | 8,660,154 | ||||||
Sapurakencana Petroleum Bhda | 31,945,700 | 34,914,396 | ||||||
Sime Darby Bhd | 28,849,673 | 82,471,552 | ||||||
Telekom Malaysia Bhd | 10,535,300 | 17,351,693 | ||||||
Tenaga Nasional Bhd | 32,454,750 | 86,256,174 | ||||||
UEM Sunrise Bhd | 10,318,600 | 7,916,241 | ||||||
UMW Holdings Bhd | 7,350,500 | 28,151,089 | ||||||
YTL Corp. Bhd | 43,199,262 | 20,384,765 | ||||||
YTL Power International Bhd | 34,492,060 | 16,801,064 | ||||||
|
| |||||||
1,333,432,524 | ||||||||
MEXICO — 5.27% |
| |||||||
Alfa SAB de CV Series A | 33,776,900 | 85,378,249 | ||||||
America Movil SAB de CV Series L | 381,041,700 | 367,000,918 | ||||||
Arca Continental SAB de CV | 4,911,036 | 31,113,282 | ||||||
Cemex SAB de CV CPOa | 112,927,754 | 128,303,927 | ||||||
Coca-Cola FEMSA SAB de CV Series L | 4,062,893 | 48,433,993 | ||||||
Compartamos SAB de CV | 10,634,100 | 18,660,647 | ||||||
Controladora Comercial Mexicana SAB de CV BC Unitsb | 3,518,100 | 13,332,524 | ||||||
El Puerto de Liverpool SA de CV Series C1 | 2,057,700 | 21,597,220 | ||||||
Fibra Uno Administracion SA de CV | 13,122,800 | 38,517,266 | ||||||
Fomento Economico Mexicano SAB de CV BD Units | 20,246,100 | 191,786,004 |
CONSOLIDATED SCHEDULEOF INVESTMENTS | 15 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
Genomma Lab Internacional SAB de CV Series Ba,b | 3,486,400 | $ | 7,478,318 | |||||
Grupo Aeroportuario del Pacifico SAB de CV Series B | 1,022,000 | 5,100,049 | ||||||
Grupo Aeroportuario del Sureste SAB de CV Series Bb | 2,054,000 | 23,067,503 | ||||||
Grupo Bimbo SAB de CV Series Ab | 11,984,600 | 34,871,308 | ||||||
Grupo Carso SAB de CV Series A1 | 3,087,941 | 15,259,313 | ||||||
Grupo Comercial Chedraui SA de CV | 357,500 | 1,022,270 | ||||||
Grupo Financiero Banorte SAB de CV Series O | 24,391,256 | 152,518,421 | ||||||
Grupo Financiero Inbursa SAB de CV Series O | 20,524,700 | 43,779,468 | ||||||
Grupo Financiero Santander Mexico SAB de CV Series Bb | 18,179,800 | 49,547,852 | ||||||
Grupo Mexico SAB de CV Series B | 39,709,988 | 113,610,062 | ||||||
Grupo Televisa SAB de CV CPO | 27,496,000 | 138,056,609 | ||||||
Industrias CH SAB de CV Series Ba,b | 1,510,900 | 8,688,354 | ||||||
Industrias Penoles SAB de CV | 1,443,953 | 44,101,560 | ||||||
Kimberly-Clark de Mexico SAB de CV Series A | 20,467,100 | 58,035,081 | ||||||
Mexichem SAB de CV | 9,939,592 | 39,603,527 | ||||||
Minera Frisco SAB de CV Series A1a,b | 3,366,241 | 9,149,258 | ||||||
OHL Mexico SAB de CVa | 3,859,400 | 10,044,499 | ||||||
Wal-Mart de Mexico SAB de CV Series V | 56,003,600 | 134,388,507 | ||||||
|
| |||||||
1,832,445,989 | ||||||||
MOROCCO — 0.01% |
| |||||||
Attijariwafa Bank | 50,453 | 1,870,563 | ||||||
Douja Promotion Groupe Addoha SA | 148,710 | 724,463 | ||||||
Maroc Telecom SA | 114,980 | 1,212,734 | ||||||
|
| |||||||
3,807,760 |
Security | Shares | Value | ||||||
PERU — 0.45% |
| |||||||
Compania de Minas Buenaventura SA SP ADR | 2,109,605 | $ | 26,644,311 | |||||
Credicorp Ltd. | 690,168 | 83,675,969 | ||||||
Southern Copper Corp. | 1,695,594 | 46,628,835 | ||||||
|
| |||||||
156,949,115 | ||||||||
PHILIPPINES — 0.91% |
| |||||||
Aboitiz Equity Ventures Inc. | 19,223,650 | 19,827,083 | ||||||
Aboitiz Power Corp. | 4,759,564 | 3,468,292 | ||||||
Alliance Global Group Inc.a | 5,837,580 | 3,403,074 | ||||||
Ayala Corp. | 2,615,556 | 31,961,391 | ||||||
Ayala Land Inc. | 50,088,200 | 29,760,926 | ||||||
Bank of the Philippine Islands | 12,793,734 | 26,390,662 | ||||||
BDO Unibank Inc. | 8,291,306 | 13,756,875 | ||||||
DMCI Holdings Inc. | 1,198,000 | 1,296,043 | ||||||
Energy Development Corp. | 4,171,200 | 538,702 | ||||||
Globe Telecom Inc. | 586,540 | 20,002,855 | ||||||
International Container Terminal Services Inc. | 7,594,910 | 16,177,499 | ||||||
Jollibee Foods Corp. | 9,134,589 | 32,974,637 | ||||||
Metro Pacific Investments Corp. | 22,022,600 | 2,592,346 | ||||||
Metropolitan Bank & Trust Co. | 742,388 | 1,356,606 | ||||||
Philippine Long Distance Telephone Co. | 429,665 | 27,725,916 | ||||||
SM Investments Corp. | 1,996,275 | 29,988,885 | ||||||
SM Prime Holdings Inc. | 87,992,025 | 31,961,229 | ||||||
Universal Robina Corp. | 8,065,450 | 21,682,678 | ||||||
|
| |||||||
314,865,699 | ||||||||
POLAND — 1.70% |
| |||||||
Alior Bank SAa | 228,912 | 6,469,137 | ||||||
Bank Handlowy w Warszawie SA | 342,679 | 10,827,291 | ||||||
Bank Millennium SAa | 4,374,718 | 8,985,213 | ||||||
Bank Pekao SA | 1,307,241 | 70,252,470 | ||||||
Bank Zachodni WBK SA | 273,502 | 26,347,085 | ||||||
BRE Bank SA | 152,949 | 20,879,765 | ||||||
Cyfrowy Polsat SAa | 2,349,298 | 14,598,989 | ||||||
ENEA SA | 1,188,262 | 5,284,834 | ||||||
Eurocash SA | 630,888 | 10,112,914 | ||||||
Grupa Azoty SA | 137,063 | 3,090,294 | ||||||
Grupa Lotos SAa | 661,902 | 7,786,842 |
16 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
Jastrzebska Spolka Weglowa SA | 431,334 | $ | 9,049,654 | |||||
Kernel Holding SAa | 460,078 | 6,735,448 | ||||||
KGHM Polska Miedz SA | 1,433,355 | 54,275,136 | ||||||
Polska Grupa Energetyczna SA | 6,669,103 | 34,995,926 | ||||||
Polski Koncern Naftowy Orlen SA | 3,383,031 | 47,008,745 | ||||||
Polskie Gornictwo Naftowe i Gazownictwo SA | 18,237,761 | 34,811,015 | ||||||
Powszechna Kasa Oszczednosci Bank Polski SAa | 8,691,119 | 102,835,849 | ||||||
Powszechny Zaklad Ubezpieczen SA | 561,660 | 75,972,202 | ||||||
Synthos SA | 6,153,859 | 8,419,920 | ||||||
Tauron Polska Energia SA | 11,235,174 | 14,851,840 | ||||||
Telekomunikacja Polska SA | 7,619,949 | 18,004,049 | ||||||
|
| |||||||
591,594,618 | ||||||||
RUSSIA — 5.65% |
| |||||||
Federal Grid Co. of Unified Energy System OJSCa | 2,519,838,500 | 8,018,115 | ||||||
Gazprom OAO | 114,999,947 | 455,469,267 | ||||||
INTER RAO UES OJSCa | 10,932,141,700 | 3,883,351 | ||||||
LSR Group OJSC SP GDRc | 1,863,536 | 7,826,851 | ||||||
LUKOIL OAO | 5,072,922 | 293,151,920 | ||||||
Magnit OJSC SP GDRc | 2,564,990 | 142,356,945 | ||||||
MegaFon OAO SP GDR | 853,938 | 28,863,104 | ||||||
MMC Norilsk Nickel OJSC | 513,923 | 67,436,673 | ||||||
Mobile TeleSystems OJSC SP ADR | 5,100,345 | 107,923,300 | ||||||
NovaTek OAO SP GDRc | 941,432 | 112,783,554 | ||||||
Rosneft Oil Co. OJSC | 12,147,247 | 89,848,703 | ||||||
Rostelecom OJSC | 12,354,260 | 37,285,730 | ||||||
RusHydro OJSC | 1,300,923,100 | 21,113,681 | ||||||
Sberbank of Russia | 108,406,891 | 287,203,555 | ||||||
Severstal OAO | 2,039,643 | 16,897,502 | ||||||
Sistema JSFC SP GDRc | 1,036,554 | 22,949,306 | ||||||
Surgutneftegas OJSC | 72,711,710 | 56,923,992 | ||||||
Tatneft OAO Class S | 15,356,770 | 96,254,757 | ||||||
TMK OAO SP GDRc | 665,572 | 8,565,912 | ||||||
Uralkali OJSC | 12,606,845 | 60,000,148 | ||||||
VTB Bank OJSC | 32,250,632,000 | 43,093,809 | ||||||
|
| |||||||
1,967,850,175 |
Security | Shares | Value | ||||||
SOUTH AFRICA — 7.37% |
| |||||||
African Bank Investments Ltd.b | 10,480,162 | $ | 16,711,361 | |||||
African Rainbow Minerals Ltd. | 650,008 | 11,952,886 | ||||||
Anglo American Platinum Ltd.a | 617,050 | 24,688,628 | ||||||
AngloGold Ashanti Ltd. | 3,825,350 | 52,294,600 | ||||||
Aspen Pharmacare Holdings Ltd.a | 2,756,514 | 63,520,139 | ||||||
Assore Ltd. | 153,353 | 5,869,971 | ||||||
Barclays Africa Group Ltd. | 2,725,231 | 36,457,050 | ||||||
Barloworld Ltd. | 2,143,627 | 18,369,759 | ||||||
Bidvest Group Ltd. | 3,321,486 | 81,984,692 | ||||||
Discovery Ltd. | 2,157,767 | 17,831,444 | ||||||
Exxaro Resources Ltd. | 1,737,589 | 27,552,688 | ||||||
FirstRand Ltd. | 35,444,482 | 104,073,389 | ||||||
Foschini Group Ltd. (The)b | 2,862,803 | 26,900,452 | ||||||
Gold Fields Ltd. | 7,385,238 | 38,876,885 | ||||||
Growthpoint Properties Ltd. | 13,689,822 | 31,748,196 | ||||||
Harmony Gold Mining Co. Ltd. | 3,996,268 | 15,082,097 | ||||||
Impala Platinum Holdings Ltd. | 5,118,942 | 56,732,733 | ||||||
Imperial Holdings Ltd. | 2,264,581 | 46,045,669 | ||||||
Investec Ltd. | 4,868,868 | 31,587,500 | ||||||
Kumba Iron Ore Ltd. | 679,239 | 29,846,455 | ||||||
Liberty Holdings Ltd. | 1,256,165 | 14,105,944 | ||||||
Life Healthcare Group Holdings Ltd. | 8,052,460 | 27,834,888 | ||||||
Massmart Holdings Ltd. | 583,686 | 8,977,286 | ||||||
Mediclinic International Ltd. | 2,428,225 | 17,477,245 | ||||||
MMI Holdings Ltd. | 8,333,165 | 16,737,936 | ||||||
Mr. Price Group Ltd. | 1,957,912 | 23,940,020 | ||||||
MTN Group Ltd. | 16,899,791 | 309,991,772 | ||||||
Nampak Ltd. | 2,345,660 | 6,871,380 | ||||||
Naspers Ltd. Class N | 3,909,106 | 323,832,463 | ||||||
Nedbank Group Ltd. | 2,837,016 | 52,224,808 | ||||||
Netcare Ltd. | 16,354,277 | 37,080,980 | ||||||
Northam Platinum Ltd.a | 1,583,084 | 6,446,109 | ||||||
Pick n Pay Stores Ltd.b | 5,627,049 | 21,038,932 | ||||||
PPC Ltd. | 6,038,031 | 17,469,667 | ||||||
Redefine Properties Ltd. | 16,231,326 | 14,518,011 | ||||||
Remgro Ltd. | 4,371,234 | 79,818,451 | ||||||
Reunert Ltd. | 2,316,018 | 15,468,766 |
CONSOLIDATED SCHEDULEOF INVESTMENTS | 17 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
RMB Holdings Ltd. | 3,988,556 | $ | 15,746,247 | |||||
RMI Holdings Ltd. | 3,817,874 | 9,644,410 | ||||||
Sanlam Ltd. | 20,689,227 | 92,991,419 | ||||||
Sappi Ltd.a | 2,751,505 | 6,574,488 | ||||||
Sasol Ltd. | 5,535,209 | 260,426,692 | ||||||
Shoprite Holdings Ltd. | 4,957,839 | 78,020,245 | ||||||
SPAR Group Ltd. (The) | 1,830,207 | 20,596,754 | ||||||
Standard Bank Group Ltd. | 12,607,502 | 140,958,791 | ||||||
Steinhoff International Holdings Ltd.a | 8,099,053 | 23,219,236 | ||||||
Tiger Brands Ltd. | 1,890,727 | 52,205,925 | ||||||
Truworths International Ltd. | 5,408,640 | 43,317,708 | ||||||
Vodacom Group Ltd.b | 2,948,014 | 33,409,482 | ||||||
Woolworths Holdings Ltd. | 8,587,958 | 57,199,943 | ||||||
|
| |||||||
2,566,272,592 | ||||||||
SOUTH KOREA — 15.14% |
| |||||||
AmorePacific Corp.b | 36,885 | 29,905,410 | ||||||
AmorePacific Group | 23,841 | 7,882,210 | ||||||
BS Financial Group Inc. | 1,637,570 | 21,021,911 | ||||||
Celltrion Inc.b | 735,743 | 29,892,356 | ||||||
Cheil Industries Inc. | 519,839 | 41,351,096 | ||||||
Cheil Worldwide Inc.a,b | 933,740 | 20,019,830 | ||||||
CJ CheilJedang Corp.b | 90,126 | 20,663,094 | ||||||
CJ Corp. | 149,138 | 14,308,542 | ||||||
Coway Co. Ltd. | 608,547 | 32,235,092 | ||||||
Daelim Industrial Co. Ltd.b | 301,227 | 23,744,302 | ||||||
Daewoo Engineering & Construction Co. Ltd.a,b | 699,910 | 4,653,246 | ||||||
Daewoo International Corp. | 329,586 | 10,391,883 | ||||||
Daewoo Securities Co. Ltd. | 1,569,600 | 13,220,810 | ||||||
Daewoo Shipbuilding & Marine Engineering Co. Ltd.b | 989,410 | 26,427,644 | ||||||
DGB Financial Group Inc. | 1,290,010 | 18,070,948 | ||||||
Dongbu Insurance Co. Ltd. | 386,226 | 16,387,770 | ||||||
Doosan Corp. | 118,770 | 14,818,832 | ||||||
Doosan Heavy Industries & Construction Co. Ltd.b | 427,305 | 16,417,781 | ||||||
Doosan Infracore Co. Ltd.a,b | 892,520 | 10,894,686 | ||||||
E-Mart Co. Ltd. | 215,451 | 39,982,799 | ||||||
GS Engineering & Construction Corp.b | 331,025 | 10,556,538 | ||||||
GS Holdings Corp. | 488,686 | 24,961,485 |
Security | Shares | Value | ||||||
Halla Visteon Climate Control Corp.b | 191,287 | $ | 6,565,501 | |||||
Hana Financial Group Inc. | 2,715,908 | 85,632,881 | ||||||
Hankook Tire Co. Ltd. | 732,001 | 37,983,206 | ||||||
Hanwha Chemical Corp.b | 814,960 | 12,994,723 | ||||||
Hanwha Corp. | 376,660 | 11,061,768 | ||||||
Hanwha Life Insurance Co. Ltd. | 2,134,240 | 12,497,239 | ||||||
Hite Jinro Co. Ltd. | 37,690 | 853,929 | ||||||
Hyosung Corp. | 237,081 | 15,163,957 | ||||||
Hyundai Department Store Co. Ltd. | 137,097 | 18,340,529 | ||||||
Hyundai Development Co. | 463,490 | 8,977,105 | ||||||
Hyundai Engineering & Construction Co. Ltd.b | 714,333 | 36,937,718 | ||||||
Hyundai Glovis Co. Ltd. | 129,157 | 21,757,902 | ||||||
Hyundai Heavy Industries Co. Ltd. | 413,128 | 84,668,817 | ||||||
Hyundai Hysco Co. Ltd. | 327,483 | 12,803,714 | ||||||
Hyundai Marine & Fire Insurance Co. Ltd. | 641,420 | 17,103,763 | ||||||
Hyundai Merchant Marine Co. Ltd.a,b | 427,388 | 7,142,063 | ||||||
Hyundai Mipo Dockyard Co. Ltd.b | 124,615 | 15,155,196 | ||||||
Hyundai Mobis Co. Ltd. | 681,700 | 171,338,498 | ||||||
Hyundai Motor Co. | 1,589,544 | 356,557,323 | ||||||
Hyundai Securities Co. Ltd. | 615,940 | 3,162,793 | ||||||
Hyundai Steel Co. | 570,891 | 37,749,110 | ||||||
Hyundai Wia Corp. | 149,904 | 23,159,800 | ||||||
Industrial Bank of Korea | 1,410,520 | 14,358,701 | ||||||
Kangwon Land Inc. | 786,010 | 19,613,961 | ||||||
KB Financial Group Inc. | 4,293,955 | 138,096,656 | ||||||
KCC Corp. | 33,282 | 12,547,648 | ||||||
Kia Motors Corp.b | 2,593,585 | 157,009,965 | ||||||
Korea Aerospace Industries Ltd.b | 447,470 | 10,883,915 | ||||||
Korea Electric Power Corp.a | 2,555,305 | 70,670,568 | ||||||
Korea Gas Corp. | 278,623 | 13,930,523 | ||||||
Korea Investment Holdings Co. Ltd. | 290,990 | 10,302,155 | ||||||
Korea Zinc Co. Ltd.b | 84,306 | 24,265,364 | ||||||
Korean Air Lines Co. Ltd.a | 352,815 | 8,963,004 | ||||||
KT Corp. | 38,200 | 1,242,304 |
18 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
KT Corp. SP ADR | 548,585 | $ | 8,815,761 | |||||
KT&G Corp. | 1,139,660 | 74,536,567 | ||||||
Kumho Petro Chemical Co. Ltd.b | 120,113 | 9,976,504 | ||||||
LG Chem Ltd. | 462,288 | 119,731,363 | ||||||
LG Corp. | 984,831 | 59,442,076 | ||||||
LG Display Co. Ltd.a | 2,307,712 | 60,912,537 | ||||||
LG Electronics Inc.b | 1,050,973 | 68,546,863 | ||||||
LG Household & Health Care Ltd. | 98,773 | 43,689,512 | ||||||
LG Innotek Co. Ltd.a,b | 126,104 | 9,576,656 | ||||||
LG Uplus Corp.a | 2,263,740 | 26,613,042 | ||||||
Lotte Chemical Corp.b | 168,882 | 26,091,854 | ||||||
Lotte Confectionery Co. Ltd. | 4,448 | 6,058,624 | ||||||
Lotte Shopping Co. Ltd. | 98,857 | 30,323,687 | ||||||
LS Corp. | 137,079 | 8,730,675 | ||||||
LS Industrial Systems Co. Ltd. | 168,846 | 9,415,402 | ||||||
Mirae Asset Securities Co. Ltd. | 150,099 | 4,320,223 | ||||||
NCsoft Corp.b | 164,554 | 24,014,907 | ||||||
NHN Corp. | 288,799 | 116,164,816 | ||||||
NHN Entertainment Corp.a,b | 132,867 | 12,986,848 | ||||||
OCI Co. Ltd.b | 153,053 | 21,716,002 | ||||||
ORION Corp. | 36,698 | 32,596,935 | ||||||
POSCO | 647,967 | 188,252,203 | ||||||
S-Oil Corp. | 445,015 | 30,788,840 | ||||||
S1 Corp. | 247,803 | 14,175,479 | ||||||
Samsung C&T Corp. | 1,307,369 | 67,485,468 | ||||||
Samsung Card Co. Ltd. | 337,718 | 11,013,370 | ||||||
Samsung Electro-Mechanics Co. Ltd. | 624,663 | 45,919,103 | ||||||
Samsung Electronics Co. Ltd. | 1,100,566 | 1,356,312,137 | ||||||
Samsung Engineering Co. Ltd.b | 296,826 | 22,514,976 | ||||||
Samsung Fire & Marine Insurance Co. Ltd. | 368,271 | 82,940,183 | ||||||
Samsung Heavy Industries Co. Ltd. | 1,663,670 | 59,200,004 | ||||||
Samsung Life Insurance Co. Ltd. | 590,950 | 56,430,521 | ||||||
Samsung SDI Co. Ltd. | 365,237 | 55,605,651 |
Security | Shares | Value | ||||||
Samsung Securities Co. Ltd. | 556,316 | $ | 22,502,219 | |||||
Samsung Techwin Co. Ltd.b | 426,940 | 25,538,324 | ||||||
Shinhan Financial Group Co. Ltd. | 4,370,198 | 161,020,763 | ||||||
Shinsegae Co. Ltd. | 75,073 | 13,559,873 | ||||||
SK C&C Co. Ltd. | 206,619 | 20,381,767 | ||||||
SK Holdings Co. Ltd. | 250,325 | 42,169,970 | ||||||
SK Hynix Inc.a,b | 5,132,460 | 130,617,535 | ||||||
SK Innovation Co. Ltd. | 610,880 | 77,044,457 | ||||||
SK Networks Co. Ltd. | 740,030 | 4,399,980 | ||||||
SK Telecom Co. Ltd. | 62,294 | 12,430,180 | ||||||
SK Telecom Co. Ltd. SP ADR | 152,489 | 3,344,084 | ||||||
Woori Finance Holdings Co. Ltd. | 3,421,280 | 34,211,259 | ||||||
Woori Investment & Securities Co. Ltd. | 1,074,711 | 10,552,993 | ||||||
Yuhan Corp. | 108,841 | 19,217,906 | ||||||
|
| |||||||
5,269,190,663 | ||||||||
TAIWAN — 11.82% |
| |||||||
Acer Inc.a,b | 27,002,053 | 18,001,669 | ||||||
Advanced Semiconductor Engineering Inc. | 53,890,701 | 47,633,512 | ||||||
Advantech Co. Ltd. | 2,242,800 | 11,392,190 | ||||||
Asia Cement Corp. | 22,940,292 | 28,671,053 | ||||||
ASUSTeK Computer Inc.b | 6,424,968 | 51,207,367 | ||||||
AU Optronics Corp.a,b | 80,657,000 | 31,805,130 | ||||||
Catcher Technology Co. Ltd.b | 5,802,210 | 27,630,033 | ||||||
Cathay Financial Holding Co. Ltd. | 70,430,023 | 99,792,243 | ||||||
Chailease Holding Co. Ltd.b | 7,370,200 | 14,999,254 | ||||||
Chang Hwa Commercial Bank Ltd. | 33,672,761 | 18,229,168 | ||||||
Cheng Shin Rubber Industry Co. Ltd. | 21,579,128 | 55,526,169 | ||||||
Cheng Uei Precision Industry Co. Ltd. | 3,218,503 | 6,420,980 | ||||||
Chicony Electronics Co. Ltd. | 7,163,675 | 16,565,901 | ||||||
China Airlines Ltd.a | 21,205,347 | 7,440,597 | ||||||
China Development Financial Holding Corp. | 147,678,848 | 40,516,745 |
CONSOLIDATED SCHEDULEOF INVESTMENTS | 19 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
China Life Insurance Co. Ltd. | 16,054,992 | $ | 15,854,067 | |||||
China Motor Co. Ltd. | 4,642,000 | 4,002,192 | ||||||
China Petrochemical Development Corp. | 20,477,725 | 9,477,735 | ||||||
China Steel Corp.b | 127,490,288 | 107,788,076 | ||||||
Chunghwa Telecom Co. Ltd. | 40,016,410 | 126,503,447 | ||||||
Clevo Co.b | 8,527,553 | 16,642,186 | ||||||
Compal Electronics Inc.b | 42,704,908 | 28,755,832 | ||||||
CTBC Financial Holding Co. Ltd. | 125,448,755 | 79,022,508 | ||||||
CTCI Corp. | 1,338,000 | 2,240,098 | ||||||
Delta Electronics Inc. | 19,133,000 | 86,635,416 | ||||||
E.Sun Financial Holding Co. Ltd. | 35,704,076 | 22,609,976 | ||||||
Eclat Textile Co. Ltd. | 1,000,000 | 8,939,164 | ||||||
Epistar Corp. | 6,667,345 | 10,917,472 | ||||||
EVA Airways Corp.a | 12,640,800 | 6,716,527 | ||||||
Evergreen Marine Corp. Ltd.a | 17,926,325 | 10,123,975 | ||||||
Far Eastern Department Stores Co. Ltd. | 11,837,812 | 12,164,371 | ||||||
Far Eastern New Century Corp. | 29,514,356 | 31,709,353 | ||||||
Far EasTone Telecommunications Co. Ltd. | 13,893,000 | 35,145,119 | ||||||
Farglory Land Development Co. Ltd. | 11,337,000 | 20,495,972 | ||||||
Feng Hsin Iron & Steel Co. Ltd. | 5,941,000 | 10,482,541 | ||||||
First Financial Holding Co. Ltd.b | 56,387,791 | 32,599,000 | ||||||
Formosa Chemicals & Fibre Corp. | 30,714,090 | 79,750,198 | ||||||
Formosa International Hotels Corp.b | 271,923 | 3,003,243 | ||||||
Formosa Petrochemical Corp.b | 8,586,000 | 21,806,079 | ||||||
Formosa Plastics Corp. | 44,555,280 | 111,073,665 | ||||||
Formosa Taffeta Co. Ltd. | 9,947,000 | 9,107,848 | ||||||
Foxconn Technology Co. Ltd.b | 8,098,819 | 20,649,965 |
Security | Shares | Value | ||||||
Fubon Financial Holding Co. Ltd. | 65,760,969 | $ | 90,100,076 | |||||
Giant Manufacturing Co. Ltd. | 4,723,203 | 31,804,221 | ||||||
Hermes Microvision Inc.b | 372,000 | 10,019,616 | ||||||
Highwealth Construction Corp. | 3,306,600 | 7,348,123 | ||||||
Hiwin Technologies Corp.b | 1,747,300 | 11,444,495 | ||||||
Hon Hai Precision Industry Co. Ltd. | 99,776,231 | 270,742,367 | ||||||
Hotai Motor Co. Ltd. | 2,508,000 | 24,808,034 | ||||||
HTC Corp.b | 7,357,708 | 38,479,550 | ||||||
Hua Nan Financial Holdings Co. Ltd. | 31,733,162 | 17,285,186 | ||||||
Innolux Corp.a,b | 57,289,958 | 28,717,251 | ||||||
Inventec Corp. | 19,669,281 | 16,005,179 | ||||||
Kinsus Interconnect Technology Corp. | 2,058,000 | 7,530,652 | ||||||
Largan Precision Co. Ltd.b | 1,155,000 | 40,334,007 | ||||||
LCY Chemical Corp. | 4,846,076 | 5,757,089 | ||||||
Lite-On Technology Corp. | 18,152,734 | 30,755,522 | ||||||
MediaTek Inc.b | 11,860,176 | 145,455,550 | ||||||
Mega Financial Holding Co. Ltd. | 77,168,229 | 58,924,762 | ||||||
Merida Industry Co. Ltd. | 1,662,000 | 10,885,796 | ||||||
MStar Semiconductor Inc. | 3,007,331 | 27,435,759 | ||||||
Nan Kang Rubber Tire Co. Ltd.b | 5,962,248 | 6,973,506 | ||||||
Nan Ya Plastics Corp. | 52,086,160 | 101,998,328 | ||||||
Novatek Microelectronics Corp. Ltd. | 5,135,000 | 21,364,016 | ||||||
Pegatron Corp.a | 13,439,414 | 20,793,827 | ||||||
Phison Electronics Corp. | 1,527,535 | 10,719,723 | ||||||
Pou Chen Corp. | 29,319,220 | 32,038,580 | ||||||
Powertech Technology Inc.b | 4,666,300 | 8,529,687 | ||||||
President Chain Store Corp. | 6,570,000 | 45,886,481 | ||||||
Quanta Computer Inc.b | 22,980,000 | 48,456,549 | ||||||
Radiant Opto-Electronics Corp.b | 4,460,240 | 14,159,729 | ||||||
Realtek Semiconductor Corp.b | 3,724,637 | 8,264,663 | ||||||
Ruentex Development Co. Ltd.b | 11,029,339 | 21,782,617 |
20 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
Ruentex Industries Ltd. | 6,468,009 | $ | 16,059,519 | |||||
ScinoPharm Taiwan Ltd. | 2,832,640 | 7,932,471 | ||||||
Shin Kong Financial Holding Co. Ltd.a | 36,773,002 | 12,411,480 | ||||||
Siliconware Precision Industries Co. Ltd. | 30,086,190 | 33,781,550 | ||||||
Simplo Technology Co. Ltd. | 3,515,202 | 16,798,071 | ||||||
SinoPac Financial Holdings Co. Ltd. | 52,226,209 | 23,299,300 | ||||||
Standard Foods Corp. | 3,041,914 | 8,965,791 | ||||||
Synnex Technology International Corp.b | 14,051,985 | 22,140,757 | ||||||
Taishin Financial Holdings Co. Ltd. | 45,937,121 | 19,802,799 | ||||||
Taiwan Business Bank Ltd.a | 20,400,811 | 5,897,075 | ||||||
Taiwan Cement Corp. | 38,404,296 | 50,693,234 | ||||||
Taiwan Cooperative Financial Holding Co. Ltd. | 34,025,245 | 18,192,582 | ||||||
Taiwan Fertilizer Co. Ltd. | 6,609,000 | 15,172,795 | ||||||
Taiwan Glass Industry Corp.b | 4,664,176 | 4,278,489 | ||||||
Taiwan Mobile Co. Ltd. | 19,965,600 | 72,057,505 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 245,607,000 | 824,859,346 | ||||||
Teco Electric and Machinery Co. Ltd.b | 30,885,000 | 32,356,255 | ||||||
TPK Holding Co. Ltd.b | 2,113,827 | 22,463,098 | ||||||
Transcend Information Inc. | 489,000 | 1,442,921 | ||||||
Tripod Technology Corp. | 2,822,920 | 5,594,050 | ||||||
TSRC Corp. | 9,715,850 | 16,493,682 | ||||||
U-Ming Marine Transport Corp. | 4,098,000 | 6,313,148 | ||||||
Uni-President Enterprises Co. | 48,063,733 | 87,536,081 | ||||||
Unimicron Technology Corp. | 9,627,000 | 7,817,544 | ||||||
United Microelectronics Corp.b | 121,222,000 | 49,826,416 | ||||||
Vanguard International Semiconductor Corp. | 6,435,000 | 6,956,582 | ||||||
Walsin Lihwa Corp.a | 19,853,000 | 5,871,411 | ||||||
Wan Hai Lines Ltd. | 2,650,300 | 1,434,773 | ||||||
Wistron Corp.b | 19,471,212 | 17,470,703 |
Security | Shares | Value | ||||||
WPG Holdings Co. Ltd. | 11,017,532 | $ | 12,665,311 | |||||
Yang Ming Marine Transport Corp.a | 28,845,075 | 12,627,462 | ||||||
Yuanta Financial Holding Co. Ltd. | 73,519,140 | 36,852,315 | ||||||
Yulon Motor Co. Ltd.b | 11,835,000 | 19,497,920 | ||||||
Zhen Ding Technology Holding Ltd. | 1,461,075 | 3,876,735 | ||||||
|
| |||||||
4,114,288,148 | ||||||||
THAILAND — 2.39% |
| |||||||
Advanced Information Service PCL NVDR | 11,069,200 | 82,528,984 | ||||||
Airports of Thailand PCL NVDR | 4,235,900 | 21,515,056 | ||||||
Bangkok Bank PCL Foreign | 8,521,200 | 47,913,551 | ||||||
Bangkok Bank PCL NVDR | 6,568,800 | 36,527,344 | ||||||
Bangkok Dusit Medical Services PCL NVDR | 3,109,000 | 12,459,180 | ||||||
Bank of Ayudhya PCL NVDR | 21,437,600 | 25,306,890 | ||||||
Banpu PCL NVDR | 1,827,150 | 15,666,151 | ||||||
BEC World PCL NVDR | 9,724,800 | 16,464,790 | ||||||
Central Pattana PCL NVDR | 12,924,300 | 14,855,517 | ||||||
Charoen Pokphand Foods PCL NVDR | 33,110,400 | 23,863,351 | ||||||
CP All PCL NVDR | 45,914,900 | 46,713,668 | ||||||
Glow Energy PCL NVDR | 5,392,400 | 10,511,746 | ||||||
Home Product Center PCL NVDR | 9,003,500 | 3,132,625 | ||||||
Indorama Ventures PCL NVDR | 18,871,680 | 10,142,282 | ||||||
IRPC PCL NVDR | 94,765,700 | 8,772,966 | ||||||
Kasikornbank PCL Foreign | 12,643,800 | 62,453,066 | ||||||
Kasikornbank PCL NVDR | 6,628,700 | 32,741,948 | ||||||
Krung Thai Bank PCL NVDR | 42,667,900 | 21,870,778 | ||||||
Minor International PCL NVDR | 3,657,700 | 2,431,649 | ||||||
PTT Exploration & Production PCL NVDR | 13,322,139 | 68,907,616 | ||||||
PTT Global Chemical PCL NVDR | 15,299,530 | 32,794,892 | ||||||
PTT PCL NVDR | 8,462,200 | 85,962,703 | ||||||
Siam Cement PCL Foreign | 3,185,900 | 39,192,805 | ||||||
Siam Cement PCL NVDR | 1,186,400 | 14,484,473 |
CONSOLIDATED SCHEDULEOF INVESTMENTS | 21 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
Siam Commercial Bank PCL NVDR | 17,117,400 | $ | 71,521,911 | |||||
Thai Oil PCL NVDR | 8,578,300 | 14,523,683 | ||||||
True Corp. PCL NVDRa | 36,634,700 | 7,397,501 | ||||||
|
| |||||||
830,657,126 | ||||||||
TURKEY — 1.61% |
| |||||||
Akbank TAS | 18,135,503 | 60,325,628 | ||||||
Anadolu Efes Biracilik ve Malt Sanayii AS | 1,613,384 | 18,641,086 | ||||||
Arcelik ASb | 1,511,913 | 7,640,232 | ||||||
BIM Birlesik Magazalar AS | 1,948,036 | 35,840,231 | ||||||
Coca-Cola Icecek AS | 408,394 | 9,577,448 | ||||||
Emlak Konut Gayrimenkul Yatirim Ortakligi ASb | 7,275,126 | 8,494,934 | ||||||
Enka Insaat ve Sanayi AS | 1,984,891 | 4,761,984 | ||||||
Eregli Demir ve Celik Fabrikalari TASb | 15,570,377 | 16,882,390 | ||||||
Ford Otomotiv Sanayi ASb | 724,039 | 9,058,258 | ||||||
Haci Omer Sabanci Holding AS | 8,106,686 | 34,602,315 | ||||||
KOC Holding AS | 5,872,668 | 23,741,339 | ||||||
Koza Altin Isletmeleri AS | 515,066 | 8,111,674 | ||||||
Migros Ticaret ASa | 1 | 5 | ||||||
TAV Havalimanlari Holding AS | 1,689,480 | 9,159,207 | ||||||
Tofas Turk Otomobil Fabrikasi AS | 977,183 | 5,057,908 | ||||||
Turk Hava Yollari AO | 5,348,823 | 16,585,091 | ||||||
Turk Telekomunikasyon ASb | 3,989,103 | 12,212,438 | ||||||
Turkcell Iletisim Hizmetleri ASa | 7,308,622 | 38,367,352 | ||||||
Turkiye Garanti Bankasi AS | 23,757,119 | 82,055,743 | ||||||
Turkiye Halk Bankasi AS | 6,360,962 | 40,570,345 | ||||||
Turkiye Is Bankasi AS Class C | 15,730,795 | 36,891,059 | ||||||
Turkiye Petrol Rafinerileri AS | 1,349,371 | 25,951,352 | ||||||
Turkiye Sise ve Cam Fabrikalari AS | 4,679,548 | 6,038,126 | ||||||
Turkiye Vakiflar Bankasi TAO Class D | 11,957,939 | 23,467,070 | ||||||
Yapi ve Kredi Bankasi ASb | 13,535,155 | 26,960,741 | ||||||
|
| |||||||
560,993,956 | ||||||||
|
| |||||||
Total COMMON STOCKS |
| |||||||
(Cost: $34,067,728,853) |
| 32,209,897,746 |
Security | Shares | Value | ||||||
PREFERRED STOCKS — 6.73% |
| |||||||
BRAZIL — 5.43% |
| |||||||
AES Tiete SA | 1,094,400 | $ | 9,253,508 | |||||
Banco Bradesco SA | 21,128,158 | 246,281,869 | ||||||
Banco do Estado do Rio Grande do Sul SA Class B | 1,951,400 | 11,722,191 | ||||||
Bradespar SA | 2,335,500 | 24,237,248 | ||||||
Braskem SA Class A | 1,612,300 | 11,903,022 | ||||||
Centrais Eletricas Brasileiras SA Class B | 2,344,337 | 9,043,232 | ||||||
Companhia Brasileira de Distribuicao Grupo Pao de Acucar Class A | 1,070,586 | 44,008,777 | ||||||
Companhia de Bebidas das Americas | 7,204,823 | 252,162,743 | ||||||
Companhia Energetica de Minas Gerais | 5,582,381 | 43,678,397 | ||||||
Companhia Energetica de Sao Paulo Class B | 1,733,800 | 15,498,591 | ||||||
Companhia Paranaense de Energia Class B | 1,079,275 | 12,962,015 | ||||||
Gerdau SA | 8,829,685 | 63,700,613 | ||||||
Itau Unibanco Holding SA | 25,077,802 | 305,929,774 | ||||||
Itausa–Investimentos Itau SA | 29,166,344 | 102,570,518 | ||||||
Klabin SA | 4,764,700 | 24,673,337 | ||||||
Lojas Americanas SA | 3,829,416 | 24,356,710 | ||||||
Marcopolo SA | 4,009,800 | 11,200,182 | ||||||
Metalurgica Gerdau SA | 2,839,000 | 25,282,530 | ||||||
Oi SA | 8,543,368 | 12,722,330 | ||||||
Petroleo Brasileiro SA | 41,789,527 | 295,332,346 | ||||||
Suzano Papel e Celulose SA Class A | 1,731,100 | 6,845,171 | ||||||
Telefonica Brasil SA | 3,160,767 | 61,800,627 | ||||||
Usinas Siderurgicas de Minas Gerais SA Class A | 3,972,900 | 17,230,607 | ||||||
Vale SA Class A | 19,576,151 | 256,107,309 | ||||||
|
| |||||||
1,888,503,647 | ||||||||
CHILE — 0.10% |
| |||||||
Embotelladora Andina SA Class B | 2,115,233 | 10,782,776 | ||||||
Sociedad Quimica y Minera de Chile SA Series B | 958,279 | 24,849,770 | ||||||
|
| |||||||
35,632,546 |
22 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
COLOMBIA — 0.29% |
| |||||||
Banco Davivienda SA | 937,388 | $ | 11,946,058 | |||||
Bancolombia SA | 3,593,770 | 49,881,513 | ||||||
Grupo Argos SA | 1,039,700 | 11,725,213 | ||||||
Grupo Aval Acciones y Valores SA | 16,852,028 | 12,008,571 | ||||||
Grupo de Inversiones Suramericana SA | 770,096 | 15,500,538 | ||||||
|
| |||||||
101,061,893 | ||||||||
RUSSIA — 0.31% |
| |||||||
AK Transneft OAO | 16,430 | 37,741,688 | ||||||
Sberbank of Russia | 9,974,638 | 20,965,819 | ||||||
Surgutneftegas OJSC | 70,412,800 | 47,571,930 | ||||||
|
| |||||||
106,279,437 | ||||||||
SOUTH KOREA — 0.60% |
| |||||||
Hyundai Motor Co. Ltd. | 87,677 | 8,214,412 | ||||||
Hyundai Motor Co. Ltd. Series 2 | 297,581 | 30,024,838 | ||||||
LG Chem Ltd. | 73,511 | 8,741,455 | ||||||
Samsung Electronics Co. Ltd.b | 197,195 | 163,255,894 | ||||||
|
| |||||||
210,236,599 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $2,824,723,607) |
| 2,341,714,122 | ||||||
RIGHTS — 0.00% |
| |||||||
CHINA — 0.00% |
| |||||||
China Merchants Bank Co. Ltd. Class Ha | 6,969,925 | 1,581,949 | ||||||
|
| |||||||
1,581,949 | ||||||||
|
| |||||||
TOTAL RIGHTS |
| |||||||
(Cost: $0) |
| 1,581,949 | ||||||
SHORT-TERM INVESTMENTS — 3.72% |
| |||||||
MONEY MARKET FUNDS — 3.72% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.15%d,e,f | 1,109,220,508 | 1,109,220,508 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
0.13%d,e,f | 70,434,691 | 70,434,691 |
Security | Shares | Value | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.00%d,e | 116,420,937 | $ | 116,420,937 | |||||
|
| |||||||
1,296,076,136 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $1,296,076,136) |
| 1,296,076,136 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $38,188,528,596) |
| 35,849,269,953 | ||||||
Other Assets, Less Liabilities — (3.00)% |
| (1,045,077,621 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 34,804,192,332 | |||||
|
|
CPO — Certificates of Participation (Ordinary)
NVDR — Non-Voting Depositary Receipts
NVS — Non-Voting Shares
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. |
Financial futures contracts purchased as of August 31, 2013 were as follows:
Number of Contracts | Issue (Expiration) | Exchange | Notional Value | Net Unrealized Appreciation (Depreciation) | ||||||||||
4,700 | MSCI EMG MKT-Mini (Sept. 2013) | NYSE LIFFE | $ | 215,565,500 | $ | (4,681,034) | ||||||||
See notes to consolidated financial statements.
CONSOLIDATED SCHEDULEOF INVESTMENTS | 23 |
Table of Contents
Consolidated Statement of Assets and Liabilities
iSHARES® MSCI EMERGING MARKETS ETF
August 31, 2013
ASSETS | ||||
Investments, at cost: | ||||
Unaffiliated | $ | 36,892,452,460 | ||
Affiliated (Note 2) | 1,296,076,136 | |||
|
| |||
Total cost of investments | $ | 38,188,528,596 | ||
|
| |||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||
Unaffiliated | $ | 34,553,193,817 | ||
Affiliated (Note 2) | 1,296,076,136 | |||
|
| |||
Total fair value of investments | 35,849,269,953 | |||
Foreign currency, at valueb | 67,287,922 | |||
Cash | 37,267,000 | |||
Cash pledged to broker | 25,255,000 | |||
Receivables: | ||||
Investment securities sold | 223,022,338 | |||
Dividends and interest | 72,473,218 | |||
Futures variation margin | 2,017,253 | |||
|
| |||
Total Assets | 36,276,592,684 | |||
|
| |||
LIABILITIES | ||||
Payables: | ||||
Investment securities purchased | 126,634,211 | |||
Collateral for securities on loan (Note 5) | 1,179,655,199 | |||
Capital shares redeemed | 142,778,424 | |||
Foreign taxes (Note 1) | 2,741,724 | |||
Investment advisory fees (Note 2) | 20,590,794 | |||
|
| |||
Total Liabilities | 1,472,400,352 | |||
|
| |||
NET ASSETS | $ | 34,804,192,332 | ||
|
| |||
Net assets consist of: | ||||
Paid-in capital | $ | 43,536,315,507 | ||
Undistributed net investment income | 99,170,750 | |||
Accumulated net realized loss | (6,484,099,441 | ) | ||
Net unrealized depreciation | (2,347,194,484 | ) | ||
|
| |||
NET ASSETS | $ | 34,804,192,332 | ||
|
| |||
Shares outstandingc | 905,400,000 | |||
|
| |||
Net asset value per share | $ | 38.44 | ||
|
|
a | Securities on loan with a value of $1,113,204,654. See Note 5. |
b | Cost of foreign currency: $67,640,119. |
c | $0.001 par value, number of shares authorized: 2 billion. |
See notes to consolidated financial statements.
24 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Statement of Operations
iSHARES® MSCI EMERGING MARKETS ETF
Year ended August 31, 2013
NET INVESTMENT INCOME | ||||
Dividends — unaffiliateda | $ | 1,001,665,636 | ||
Interest — unaffiliated | 2,635 | |||
Interest — affiliated (Note 2) | 35,000 | |||
Securities lending income — affiliated (Note 2)b | 32,222,931 | |||
|
| |||
Total investment income | 1,033,926,202 | |||
|
| |||
EXPENSES | ||||
Investment advisory fees (Note 2) | 281,065,191 | |||
Mauritius income taxes (Note 1) | 1,205,252 | |||
Commitment fees (Note 8) | 87,025 | |||
Interest expense (Note 8) | 8,446 | |||
|
| |||
Total expenses | 282,365,914 | |||
Less investment advisory fees waived (Note 2) | (427,889 | ) | ||
|
| |||
Net expenses | 281,938,025 | |||
|
| |||
Net investment income | 751,988,177 | |||
|
| |||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||
Net realized gain (loss) from: | ||||
Investments — unaffiliated | (2,092,400,797 | ) | ||
In-kind redemptions — unaffiliated | 1,239,721,852 | |||
Futures contracts | (4,704,445 | ) | ||
Foreign currency transactions | (22,428,093 | ) | ||
|
| |||
Net realized loss | (879,811,483 | ) | ||
|
| |||
Net change in unrealized appreciation/depreciation on: | ||||
Investments | (291,562,789 | ) | ||
Futures contracts | (12,414,346 | ) | ||
Translation of assets and liabilities in foreign currencies | (2,460,003 | ) | ||
|
| |||
Net change in unrealized appreciation/depreciation | (306,437,138 | ) | ||
|
| |||
Net realized and unrealized loss | (1,186,248,621 | ) | ||
|
| |||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (434,260,444 | ) | |
|
|
a | Net of foreign withholding tax of $124,596,362. |
b | Net of securities lending income tax paid $3,061,068. |
See notes to consolidated financial statements.
CONSOLIDATED FINANCIAL STATEMENTS | 25 |
Table of Contents
Consolidated Statements of Changes in Net Assets
iSHARES® MSCI EMERGING MARKETS ETF
Year ended August 31, 2013 | Year ended August 31, 2012 | |||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||
OPERATIONS: | ||||||||
Net investment income | $ | 751,988,177 | $ | 739,830,263 | ||||
Net realized loss | (879,811,483 | ) | (1,068,409,206 | ) | ||||
Net change in unrealized appreciation/depreciation | (306,437,138 | ) | (1,942,224,140 | ) | ||||
|
|
|
| |||||
Net decrease in net assets resulting from operations | (434,260,444 | ) | (2,270,803,083 | ) | ||||
|
|
|
| |||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||
From net investment income | (729,020,568 | ) | (703,374,541 | ) | ||||
|
|
|
| |||||
Total distributions to shareholders | (729,020,568 | ) | (703,374,541 | ) | ||||
|
|
|
| |||||
CAPITAL SHARE TRANSACTIONS: | ||||||||
Proceeds from shares sold | 15,077,037,675 | 7,880,602,043 | ||||||
Cost of shares redeemed | (13,366,192,611 | ) | (4,146,345,050 | ) | ||||
|
|
|
| |||||
Net increase in net assets from capital share transactions | 1,710,845,064 | 3,734,256,993 | ||||||
|
|
|
| |||||
INCREASE IN NET ASSETS | 547,564,052 | 760,079,369 | ||||||
NET ASSETS | ||||||||
Beginning of year | 34,256,628,280 | 33,496,548,911 | ||||||
|
|
|
| |||||
End of year | $ | 34,804,192,332 | $ | 34,256,628,280 | ||||
|
|
|
| |||||
Undistributed net investment income included in net assets at end of year | $ | 99,170,750 | $ | 90,247,601 | ||||
|
|
|
| |||||
SHARES ISSUED AND REDEEMED | ||||||||
Shares sold | 355,500,000 | 193,950,000 | ||||||
Shares redeemed | (323,550,000 | ) | (104,850,000 | ) | ||||
|
|
|
| |||||
Net increase in shares outstanding | 31,950,000 | 89,100,000 | ||||||
|
|
|
|
See notes to consolidated financial statements.
26 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI EMERGING MARKETS ETF
(For a share outstanding throughout each period)
Year ended Aug. 31, 2013 (Consolidated) | Year ended Aug. 31, 2012 (Consolidated) | Year ended Aug. 31, 2011 (Consolidated) | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | ||||||||||||||||
Net asset value, beginning of year | $ | 39.22 | $ | 42.71 | $ | 40.19 | $ | 35.48 | $ | 40.07 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.75 | 0.86 | 0.81 | 0.58 | 0.66 | |||||||||||||||
Net realized and unrealized gain (loss)b | (0.76 | ) | (3.53 | ) | 2.56 | 4.73 | (4.66 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (0.01 | ) | (2.67 | ) | 3.37 | 5.31 | (4.00 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.77 | ) | (0.82 | ) | (0.85 | ) | (0.60 | ) | (0.59 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.77 | ) | (0.82 | ) | (0.85 | ) | (0.60 | ) | (0.59 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 38.44 | $ | 39.22 | $ | 42.71 | $ | 40.19 | $ | 35.48 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | (0.08 | )% | (6.18 | )% | 8.23 | % | 14.97 | % | (9.47 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 34,804,192 | $ | 34,256,628 | $ | 33,496,549 | $ | 39,766,955 | $ | 30,268,121 | ||||||||||
Ratio of expenses to average net assetsc | 0.67 | % | 0.68 | % | 0.67 | % | 0.68 | % | 0.72 | % | ||||||||||
Ratio of expenses to average net assets prior to waived feesc | 0.67 | % | 0.69 | % | 0.67 | % | 0.68 | % | 0.72 | % | ||||||||||
Ratio of net investment income to average net assets | 1.78 | % | 2.13 | % | 1.76 | % | 1.45 | % | 2.32 | % | ||||||||||
Portfolio turnover rated | 24 | % | 15 | % | 17 | % | 14 | % | 5 | % |
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 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, 2013, August 31, 2012 and August 31, 2011 were 9%, 10% and 15%, respectively. See Note 4. |
See notes to consolidated financial statements.
FINANCIAL HIGHLIGHTS | 27 |
Table of Contents
Notes to Consolidated Financial Statements
iSHARES® MSCI EMERGING MARKETS ETF
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 ETF | Diversification Classification | |
MSCI Emerging Marketsa | Diversified |
a | Formerly the iShares MSCI Emerging Markets Index Fund. The Fund changed its name effective July 1, 2013. |
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.
Non-diversified funds generally hold securities of fewer issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers.
The Fund invests in securities of non-U.S. issuers that trade in non-U.S. markets. This involves 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. These risks are heightened for investments in emerging market and frontier market countries.
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.
28 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Consolidated Financial Statements (Continued)
iSHARES® MSCI EMERGING MARKETS ETF
SECURITY VALUATION
The Fund’s investments are valued at fair value each day that the Fund’s listing exchange is open and, for financial reporting purposes, as of the report date should the reporting period end on a day that the Fund’s listing exchange is not 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. |
• | 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 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, reviews of 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 is not necessarily an indication of the risk associated with investing in the 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 |
NOTESTO CONSOLIDATED FINANCIAL STATEMENTS | 29 |
Table of Contents
Notes to Consolidated Financial Statements (Continued)
iSHARES® MSCI EMERGING MARKETS ETF
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 Global Valuation Committee’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, 2013. The breakdown of the Fund’s investments into major categories is disclosed in its consolidated schedule of investments.
Investment Type | Investments | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 32,164,284,145 | $ | 45,613,601 | $ | — | $ | 32,209,897,746 | ||||||||
Preferred Stocks | 2,341,714,122 | — | — | 2,341,714,122 | ||||||||||||
Rights | — | 1,581,949 | — | 1,581,949 | ||||||||||||
Money Market Funds | 1,296,076,136 | — | — | 1,296,076,136 | ||||||||||||
Liabilities: | ||||||||||||||||
Futures Contractsa | (4,681,034 | ) | — | — | (4,681,034 | ) | ||||||||||
|
|
|
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$ | 35,797,393,369 | $ | 47,195,550 | $ | — | $ | 35,844,588,919 | |||||||||
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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, 2013 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.
30 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Notes to Consolidated Financial Statements (Continued)
iSHARES® MSCI EMERGING MARKETS ETF
FOREIGN TAXES
The Fund may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, capital gains on investments, or certain foreign currency transactions. 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 stock dividends are presented as “other foreign taxes,” and foreign taxes on capital gains from sales of investments and foreign taxes on foreign currency transactions are included in their respective net realized gain (loss) categories. Foreign taxes payable as of August 31, 2013, 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 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 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 legislative changes enacted by the 2012 India Finance Act (“the Act”) and its general anti-avoidance rules (“GAAR”), which are effective April 1, 2013 but have been proposed to be deferred until April 1, 2016, 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.
RECENT ACCOUNTING STANDARD
In December 2011, the Financial Accounting Standards Board issued guidance to enhance current disclosure requirements on offsetting of certain assets and liabilities and enable financial statement users to compare financial statements prepared under U.S. GAAP and International Financial Reporting Standards (IFRS). The new disclosures are required for investments and
NOTESTO CONSOLIDATED FINANCIAL STATEMENTS | 31 |
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Notes to Consolidated Financial Statements (Continued)
iSHARES® MSCI EMERGING MARKETS ETF
derivative financial instruments subject to master netting agreements or similar agreements and require an entity to disclose both gross and net information about such investments and transactions eligible for offset in the statement of assets and liabilities. The scope of the disclosure requirements for offsetting will be limited to certain derivative instruments and securities lending transactions. In addition, the standard requires disclosure of collateral received and posted in connection with master netting agreements or similar agreements. The guidance is effective for financial statements for fiscal years beginning after January 1, 2013, and interim periods within those fiscal years. Management is evaluating the impact of this guidance on the Fund’s financial statements and disclosures.
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 $427,889.
BFA has contractually agreed to waive a portion of its investment advisory fees for the Fund through June 30, 2014 in an amount equal to the investment advisory fees payable on the amount of the Fund’s investment in other iShares funds. The Fund did not hold any iShares Funds during the year ended August 31, 2013.
The U.S. Securities and Exchange Commission has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (“BTC”), an affiliate of BFA, to serve as securities lending agent for the Fund, subject to applicable conditions. 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 a portion of securities lending income and remits a remaining portion to BTC as compensation for its services as securities lending agent. The Fund benefits from a borrower default indemnity provided by BlackRock. As securities lending agent, BTC bears all operational costs directly related to securities lending as well
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Notes to Consolidated Financial Statements (Continued)
iSHARES® MSCI EMERGING MARKETS ETF
as the cost of borrower default indemnification. 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, 2013, the Fund retained 65% of securities lending income and paid a fee to BTC equal to 35% of such income in the amount of $18,422,182.
For the year ended August 31, 2013, BTC, the Fund’s securities lending agent, has agreed to voluntarily reimburse the Fund in the amount of $1,071,374, 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.
BlackRock Investments, LLC, an affiliate of BFA, is the distributor for the Fund. Pursuant to the 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.
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, 2013, were $10,847,573,239 and $9,938,311,655, respectively.
In-kind purchases and sales (see Note 4) for the year ended August 31, 2013, were $7,019,504,549 and $6,313,920,135, 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 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 may also 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 CONSOLIDATED FINANCIAL STATEMENTS | 33 |
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Notes to Consolidated Financial Statements (Continued)
iSHARES® MSCI EMERGING MARKETS ETF
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 market value of the loaned securities is determined at the close of each business day of the Fund and any additional required collateral is delivered to the Fund on the next business day. 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.
As of August 31, 2013, any securities on loan were collateralized by cash. The cash collateral received was invested in money market funds managed by BFA. The value of any securities on loan as of August 31, 2013 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.
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. To mitigate these risks, the Fund benefits from a borrower default indemnity provided by BlackRock. BlackRock’s indemnity allows for full replacement of securities lent. The Fund could suffer a loss if the value of the investments purchased with cash collateral falls below the value of the cash collateral received.
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, 2013, 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 | ||||||
$1,073,655,729 | $ | (14,044,460) | $ | (1,059,611,269) |
The tax character of distributions paid during the years ended August 31, 2013 and August 31, 2012 was as follows:
2013 | 2012 | |||||||
Ordinary income | $ | 729,020,568 | $ | 703,374,541 | ||||
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34 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Notes to Consolidated Financial Statements (Continued)
iSHARES® MSCI EMERGING MARKETS ETF
As of August 31, 2013, 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 | ||||||||||||
$124,410,007 | $ | (3,912,367,874 | ) | $ | (3,056,905,229 | ) | $ | (1,887,260,079 | ) | $ | (8,732,123,175 | ) |
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 purpose 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, 2014. |
As of August 31, 2013, the Fund had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:
Non- Expiring a | Expiring 2014 | Expiring 2015 | Expiring 2016 | Expiring 2017 | Expiring 2018 | Expiring 2019 | Total | |||||||||||||||||||||
$1,554,579,736 | $ | 11,239,258 | $ | 29,973,301 | $ | 13,844,901 | $ | 228,196,854 | $ | 1,201,366,175 | $ | 873,167,649 | $ | 3,912,367,874 |
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, 2013, the cost of investments for federal income tax purposes was $38,902,920,376. Net unrealized depreciation was $3,053,650,423, of which $4,166,764,179 represented gross unrealized appreciation on securities and $7,220,414,602 represented gross unrealized depreciation on securities.
Management has reviewed the tax positions as of August 31, 2013, 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.
NOTESTO CONSOLIDATED FINANCIAL STATEMENTS | 35 |
Table of Contents
Notes to Consolidated Financial Statements (Continued)
iSHARES® MSCI EMERGING MARKETS ETF
The following table shows the value of futures contracts held by the Fund as of August 31, 2013 and the related locations in the consolidated statement of assets and liabilities, presented by risk exposure category:
Liabilities | ||||
Equity contracts: | ||||
Variation margin / Net assets consist of – net unrealized appreciation (depreciation)a | $ | (4,681,034 | ) | |
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a | Represents cumulative depreciation of futures contracts as reported in the Consolidated Schedule of Investments. Only current day’s variation margin is reported separately within the Statements of Assets and Liabilities. |
The following table shows the realized and unrealized gains (losses) on futures contracts held by the Fund during the year ended August 31, 2013 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 | $ | (4,704,445 | ) | $ | (12,414,346 | ) | ||
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For the year ended August 31, 2013, the average quarter-end number of contracts and notional value of open futures contracts for the Fund were 3,139 and $151,877,308, 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 30, 2013. The line of credit may be used for temporary or emergency purposes, including redemptions, settlement of trades and rebalancing of portfolio holdings. 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 securities of certain foreign markets.
For the year ended August 31, 2013, the Fund’s maximum amount borrowed, the average borrowings and the average interest rate under the credit agreement were $26,000,000, $701,923 and 1.19%, respectively.
9. | LEGAL PROCEEDINGS |
On January 18, 2013, a lawsuit was filed in the United States District Court for the Middle District of Tennessee by Laborers’ Local 265 Pension Fund and Plumbers and Pipefitters Local No. 572 Pension Fund against BFA, BTC, and the current members of the iShares Trust Board of Trustees and the Board of Directors of iShares, Inc. (collectively, “Defendants”) for alleged violations of, among other things, Sections 36(a) and 36(b) of the 1940 Act. The complaint purports to be brought derivatively on behalf of iShares Trust and iShares, Inc., as well as the following eight funds: iShares Russell Mid-Cap ETF; iShares MSCI EAFE ETF; iShares MSCI Emerging Markets ETF; iShares Russell 2000 Growth ETF; iShares Russell 2000 Value ETF; iShares Core S&P Mid-Cap ETF; iShares Core S&P Small-Cap ETF; and iShares U.S. Real Estate ETF. The complaint alleges, among other things, that BFA and BTC breached their fiduciary duties under the 1940 Act by charging allegedly excessive fees in connection with the provision of securities lending services to the above eight funds, that the individual defendants breached their fiduciary duties under the 1940 Act by approving those fee arrangements, and that the securities lending contracts are unenforceable under
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Notes to Consolidated Financial Statements (Continued)
iSHARES® MSCI EMERGING MARKETS ETF
Section 47(b) of the 1940 Act. Plaintiffs seek injunctive relief, rescission of the securities lending contracts, and monetary damages of an unspecified amount. Defendants believe the claims are without merit and intend to vigorously defend themselves against the allegations in the lawsuit. On March 11, 2013, the Defendants filed a motion to dismiss the lawsuit. On August 28, 2013, the court dismissed the claims without prejudice. The deadline for the plaintiffs’ request to amend the complaint was September 17, 2013. The plaintiffs submitted a motion to extend the time to file and the court granted the 30-day extension until October 17, 2013. The plaintiffs did not amend their complaint prior to this deadline. The Defendants expect that the court will enter an order dismissing the complaint with prejudice. The plaintiffs will have 30 days from the date of dismissal to file a notice of appeal.
10. | 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 | 37 |
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 ETF and its subsidiary (the “Fund”) at August 31, 2013, the results of its operations, the changes in its net assets and its financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These consolidated financial statements and consolidated 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, 2013 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
October 23, 2013
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iSHARES® MSCI EMERGING MARKETS ETF
For the fiscal year ended August 31, 2013, the Fund earned foreign source income of $1,126,261,998 and paid foreign taxes of $126,497,907 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 $680,934,020 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, 2013.
In February 2014, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2013. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.
TAX INFORMATION | 39 |
Table of Contents
Board Review and Approval of Investment Advisory
Contract
iSHARES® MSCI EMERGING MARKETS ETF
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 and approve 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 March 7, 2013, April 23, 2013, and May 3, 2013, 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 16, 2013, management presented preliminary 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 5, 2013, to discuss the additional requests. At a meeting held on June 10-11, 2013, the Board, including the Independent Directors, reviewed the 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 the supplemental information management provided at the request of the Independent Directors. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information 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 reached 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 the size, sponsor, inception date, or other differentiating factors included in Lipper’s proprietary selection methodology, 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 an index similar to that tracked by the Fund, the Lipper Group included in part mutual funds, closed-end funds, exchange traded funds, and/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 provided in the Lipper Report may or may not provide meaningful direct comparisons to the Fund.
The Board also noted that the investment advisory fee rate and overall expenses for the Fund compared favorably to the investment advisory fee rates and overall expenses of the funds in its respective 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, 2012, 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
40 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Board Review and Approval of Investment Advisory
Contract (Continued)
iSHARES® MSCI EMERGING MARKETS ETF
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 may include funds that are not exchange traded funds or index funds, and that may have different investment objectives and/or benchmarks from the Fund. In addition, the Board noted that the Fund seeks to track its own benchmark index and that, during the prior year, the Board received periodic reports on the Fund’s performance in comparison with its relevant benchmark index. Such periodic comparative performance information, including detailed information on certain specific iShares funds requested by the Board, was also considered.
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 fee rate and expense level 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, including information about recent and proposed enhancements to the iShares business, including with respect to shareholder servicing and support, 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 during 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 acknowledged that resources to support the iShares funds and their shareholders have been added or enhanced since BlackRock’s acquisition of BFA in December 2009, 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 detailed presentations regarding BFA’s investment and risk management processes and strategies provided at the June 10-11, 2013 meeting and throughout the previous year, 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 the Fund and Profits Realized by BFA and its Affiliates — The Board reviewed information about the profitability to BlackRock 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)
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 41 |
Table of Contents
Board Review and Approval of Investment Advisory
Contract (Continued)
iSHARES® MSCI EMERGING MARKETS ETF
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 relatively low fee rates established at inception, 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 BlackRock’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 rate 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 fee rate 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 to the Fund, as well as other significant differences in the approach of BFA and its affiliates to the Fund, on one hand, and to the 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 and challenges 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 rate under the Advisory Contract for the Fund was 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 the “fallout” benefits or 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.
42 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Board Review and Approval of Investment Advisory
Contract (Continued)
iSHARES® MSCI EMERGING MARKETS ETF
Based on the considerations described above, the Board determined that the investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that 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 | 43 |
Table of Contents
Supplemental Information (Unaudited)
iSHARES® MSCI EMERGING MARKETS ETF
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 | |||||||||||||||||||||||
$ | 0.751665 | $ | — | $ | 0.017495 | $ | 0.769160 | 98 | % | — | % | 2 | % | 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 each full calendar quarter completed after the inception date of the Fund through the date of the most recent calendar quarter-end.
44 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES® MSCI EMERGING MARKETS ETF
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, 2008 through June 30, 2013
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% | 14 | 1.01 | ||||||
Greater than 1.5% and Less than 2.0% | 31 | 2.24 | ||||||
Greater than 1.0% and Less than 1.5% | 62 | 4.49 | ||||||
Greater than 0.5% and Less than 1.0% | 246 | 17.80 | ||||||
Between 0.5% and –0.5% | 689 | 49.87 | ||||||
Less than –0.5% and Greater than –1.0% | 182 | 13.17 | ||||||
Less than –1.0% and Greater than –1.5% | 75 | 5.43 | ||||||
Less than –1.5% and Greater than –2.0% | 30 | 2.17 | ||||||
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% | 4 | 0.29 | ||||||
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 | ||||||
|
|
|
| |||||
1,382 | 100.00 | % | ||||||
|
|
|
|
SUPPLEMENTAL INFORMATION | 45 |
Table of Contents
Director and Officer Information
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 of the Company (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 ETF, Inc. and a Trustee of iShares U.S. ETF Trust and, as a result, oversees a total of 298 funds (as of August 31, 2013) 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 (56) | Director (since 2009). | President and Director, BlackRock, Inc. (since 2006); 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 2006); Trustee of iShares Trust (since 2009); Director of iShares MSCI Russia Capped ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). | |||
Michael Lathamb (47) | Director President | 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 ETF, 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 Company due to his affiliations with BlackRock, Inc. |
b | Michael Latham is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BlackRock, Inc. and its affiliates. |
46 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Director and Officer Information (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 (58) | 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 Paine Webber Inc.) (2003-2005) 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Independent Chairman of iShares, Trust, iShares MSCI Russia Capped ETF, Inc. and iShares U.S. ETF Trust (since 2012). | |||
Cecilia H. Herbert (64) | Director (since 2005); Nominating and Governance Committee Chair and Equity Plus Committee Chair (since 2012). | Trustee and Member (since 2011) of the Investment Committee, WNET, the New York public broadcasting company; Director (since 1998) and President (2007-2011) of the Board of Directors, Catholic Charities CYO; Trustee (2002-2011) and Chair of the Finance and Investment Committee (2006-2010), the Thacher School; 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of Forward Funds (34 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 ETF, 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 (2 portfolios) (since 2002). |
DIRECTORAND OFFICER INFORMATION | 47 |
Table of Contents
Director and Officer Information (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. Kerrigan (58) | 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). | |||
John E. Martinez (52) | 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). | |||
George G.C. Parker (74) | 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 2000); Director of iShares MSCI Russia Capped ETF, 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 (49) | 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 (2007-2008). | Trustee of iShares Trust (since 2011); Director of iShares MSCI Russia Capped ETF, Inc. (since 2011); Trustee of iShares U.S. ETF Trust (since 2011). |
48 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Director and Officer Information (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 of Legal & Compliance, BlackRock (since 2006); Director of Legal & Compliance, BlackRock (2004-2006). | ||
Eilleen M. Clavere (61) | Secretary (since 2007). | Director of Global Fund Administration, BlackRock (since 2009); Director of Legal Administration of Intermediary Investor Business, BGI (2006-2009); Legal Counsel and Vice President of Atlas Funds, Atlas Advisers, Inc. and Atlas Securities, Inc. (2005-2006); Counsel of Kirkpatrick & Lockhart LLP (2001-2005). | ||
Jack Gee (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). | ||
Scott Radell (44) | Executive Vice President (since 2012). | Managing Director, BlackRock (since 2009); Head of Portfolio Solutions, BlackRock (since 2009); Head of Portfolio Solutions, BGI (2007-2009); Credit Portfolio Manager, BGI (2005-2007); Credit Research Analyst, BGI (2003-2005). | ||
Amy Schioldager (50) | Executive Vice President (since 2007). | Senior Managing Director, BlackRock (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008); Head of Domestic Equity Portfolio Management, BGI (2001-2006). | ||
Ira P. Shapiro (50) | Vice President (since 2007). | Managing Director, BlackRock (since 2009); Head of Strategic Product Initiatives for iShares (since 2012); Chief Legal Officer, Exchange-Traded Fund Complex (2007-2012); Associate General Counsel, BGI (2004-2009). |
DIRECTORAND OFFICER INFORMATION | 49 |
Table of Contents
Notes:
50 | 2013 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.
©2013 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc. or its subsidiaries. All other marks are the property of their respective owners.
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iS-AR-85-0813
Table of Contents
AUGUST 31, 2013
2013 ANNUAL REPORT
| ![]() |
iShares, Inc.
Ø | iShares MSCI BRIC ETF | BKF | NYSE Arca |
Ø | iShares MSCI Emerging Markets Asia ETF | EEMA | NASDAQ |
Ø | iShares MSCI Emerging Markets Consumer Discretionary ETF | EMDI | NASDAQ |
Ø | iShares MSCI Emerging Markets Energy Capped ETF | EMEY | NASDAQ |
Ø | iShares MSCI Emerging Markets Growth ETF | EGRW | NASDAQ |
Ø | iShares MSCI Emerging Markets Minimum Volatility ETF | EEMV | NYSE Arca |
Ø | iShares MSCI Emerging Markets Small-Cap ETF | EEMS | NYSE Arca |
Ø | iShares MSCI Emerging Markets Value ETF | EVAL | NASDAQ |
Table of Contents
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Table of Contents
Management’s Discussion of Fund Performance
iSHARES®, INC.
EMERGING MARKETS OVERVIEW
Stocks in emerging markets posted mixed results for the 12-month period ended August 31, 2013 (the “reporting period”), but produced relatively flat returns overall. Emerging markets stocks experienced significant volatility during the reporting period, including a substantial rally during the first four months of the reporting period, followed by a sharp decline over the subsequent six months before recovering somewhat during the final two months of the reporting period.
Emerging markets stocks posted strong gains during the last four months of 2012 amid improving global economic conditions. In the fall of 2012, central banks around the world took aggressive actions to stimulate economic growth. Most notably, central banks in the U.S. and U.K. increased their quantitative easing activity, while the Bank of Japan introduced quantitative easing measures for the first time. In addition, a temporary resolution to the “fiscal cliff” in the U.S. (the expiration of certain federal tax cuts and the implementation of automatic U.S. government spending reductions set to take place in early 2013) and positive signs in Europe regarding its sovereign debt crisis helped lift investor confidence. As a result, emerging markets stocks advanced by approximately 15% as a group for the last four months of 2012.
Market conditions changed in early 2013 as evidence of a slowdown in several major emerging economies appeared, driven in part by lower exports to developed countries. In particular, the four largest emerging markets — China, India, Russia and Brazil — all experienced weaker economic growth during the reporting period. The slowdown in emerging economies led to a sharp reversal in emerging markets stocks; from their peak in early January 2013 through their trough in late June 2013, emerging markets stocks fell by more than 17%.
Although they remained volatile, emerging markets stocks rebounded over the final two months of the reporting period. Promising economic news in Europe and Japan led to optimism regarding a recovery in exports from emerging markets to developed economies. For the reporting period, emerging markets stocks advanced by less than 1%.
Emerging markets in Asia held up the best, posting gains of more than 6% as a group for the reporting period. Despite a continued slowdown in the Chinese economy, China’s stock market generated double-digit gains thanks to a robust property market and better economic data late in the reporting period. Other strong performers in this region included the Philippines and Taiwan. On the downside, stock markets in India and Indonesia produced the most significant declines as both economies slowed markedly during the reporting period.
Emerging markets in Latin America faced the largest declines, falling by more than 11% for the reporting period. Brazil, the largest market in the region, declined by approximately 16% for the reporting period. The Brazilian economy nearly slipped into recession in late 2012, and although it recovered somewhat in the first half of 2013, its growth rate for the 12 months ended June 30, 2013 was just a third of its peak growth rate three years earlier. Chile, whose economy slowed as global demand for commodities eased, and Peru posted the largest declines among Latin American stock markets, while Mexico was the only market in the region to deliver a positive return for the reporting period.
Eastern European stock markets generated modestly negative returns for the reporting period. Stock markets in Hungary, where the economy emerged from recession during the reporting period, and Poland posted the best returns, while Turkey and the Czech Republic declined the most. Russia, the largest market in the region, declined slightly for the reporting period.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 5 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI BRIC ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | (1.17)% | (1.84)% | (0.55)% | (1.17)% | (1.84)% | (0.55)% | ||||||||||||||||||||
5 Years | (2.80)% | (2.93)% | (2.19)% | (13.24)% | (13.83)% | (10.48)% | ||||||||||||||||||||
Since Inception | (6.44)% | (6.56)% | (6.08)% | (32.02)% | (32.56)% | (30.50)% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was 11/12/07. The first day of secondary market trading was 11/16/07.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 22 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 875.50 | $ | 3.21 | $ | 1,000.00 | $ | 1,021.80 | $ | 3.47 | 0.68% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 22 for more information. |
6 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI BRIC ETF
The iShares MSCI BRIC ETF (the “Fund”), formerly the iShares MSCI BRIC Index 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 reporting period ended August 31, 2013, the total return for the Fund was -1.17%, net of fees, while the total return for the Index was -0.55%.
As represented by the Index, the stock markets in the BRIC countries declined slightly for the reporting period, narrowly trailing the fractional gain of the broad emerging markets index. China, the largest component of the Index (comprising more than 40% of the Index as of the end of the reporting period), was the only country to generate a positive return, gaining 14% for the reporting period. Although the Chinese economy slowed overall, better economic data late in the reporting period helped lift the Chinese equity market.
Brazil, the second-largest country weighting in the Index, posted the largest decline in the Index, falling by approximately 16%. Economic growth in Brazil improved somewhat during the reporting period, but weak domestic consumption and reduced global demand for commodities prevented the economy from staging a full recovery. The export-driven economies in India and Russia slowed notably during the reporting period, leading to an 8% decline for the Indian stock market and an approximately 2% decline in Russian stocks.
A stronger U.S. dollar lowered international equity returns for U.S. investors and had a negative impact on Index performance for the reporting period. In local currency terms, the Index gained 6.77% for the reporting period. Although the U.S. dollar fell by 3.5% against the Chinese yuan, it appreciated by 3% against the Russian ruble, 17% versus the Brazilian real and 18% against the Indian rupee.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector | Percentage of Net Assets |
Financial | 30.59 | % | ||
Energy | 20.37 | |||
Consumer Non-Cyclical | 12.62 | |||
Communications | 11.24 | |||
Basic Materials | 7.41 | |||
Consumer Cyclical | 5.51 | |||
Industrial | 3.80 | |||
Technology | 3.47 | |||
Utilities | 3.33 | |||
Diversified | 1.01 | |||
Short-Term and Other Net Assets | 0.65 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
China Mobile Ltd. (China) | 4.37 | % | ||
China Construction Bank Corp. | 3.58 | |||
Industrial and Commercial Bank of China Ltd. Class H (China) | 3.24 | |||
Gazprom OAO (Russia) | 3.13 | |||
Tencent Holdings Ltd. (China) | 3.13 | |||
CNOOC Ltd. (China) | 2.31 | |||
Bank of China Ltd. Class H (China) | 2.13 | |||
Itau Unibanco Holding SA | 2.06 | |||
Petroleo Brasileiro SA | 2.05 | |||
LUKOIL OAO (Russia) | 1.98 | |||
|
| |||
TOTAL | 27.98 | % | ||
|
|
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 7 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI EMERGING MARKETS ASIA ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | 5.88% | 4.20% | 6.25% | 5.88% | 4.20% | 6.25% | ||||||||||||||||||||
Since Inception | (1.34)% | (2.01)% | (0.91)% | (2.09)% | (3.13)% | (1.41)% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was 2/8/12. The first day of secondary market trading was 2/9/12.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 22 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 925.10 | $ | 2.38 | $ | 1,000.00 | $ | 1,022.70 | $ | 2.50 | 0.49% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 22 for more information. |
8 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS ASIA ETF
The iShares MSCI Emerging Markets Asia ETF (the “Fund”), formerly the iShares MSCI Emerging Markets Asia Index 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 12-month reporting period ended August 31, 2013, the total return for the Fund was 5.88%, net of fees, while the total return for the Index was 6.25%.
As represented by the Index, emerging markets in Asia gained more than 6% for the reporting period, outperforming the fractional gain of the broad emerging markets index. Five of the eight countries represented in the Index generated positive returns for the reporting period, including the three largest components in the Index — China, South Korea and Taiwan — which together comprised nearly 75% of the Index as of the end of the reporting period. The top-performing country in the Index was the Philippines, which produced gains of more than 14% for the reporting period.
The three declining components of the Index were Indonesia, India and Thailand. The export-driven economies in these three countries slowed during the reporting period, leading to the declines in their respective stock markets. Thailand held up the best, declining by approximately 1%, while the Indonesian stock market fell by more than 11% for the reporting period.
A stronger U.S. dollar lowered international equity returns for U.S. investors and had a slight negative impact on Index performance for the reporting period. In local currency terms, the Index returned 8.66% for the reporting period. The U.S. dollar fell by 3.5% against the Chinese yuan and 2% versus the South Korean won, and it was also largely unchanged against the Taiwan dollar. However, the U.S. dollar appreciated by 2.5% against the Thai baht, 5% versus the Malaysian ringgit and 18% against the Indian rupee.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector | Percentage of Net Assets |
Financial | 25.91 | % | ||
Technology | 16.87 | |||
Consumer Cyclical | 10.96 | |||
Communications | 10.82 | |||
Industrial | 9.57 | |||
Energy | 8.27 | |||
Consumer Non-Cyclical | 7.26 | |||
Basic Materials | 5.79 | |||
Utilities | 2.66 | |||
Diversified | 1.38 | |||
Short-Term and Other Net Assets | 0.51 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Samsung Electronics Co. Ltd. (South Korea) | 6.19 | % | ||
Taiwan Semiconductor Manufacturing Co. Ltd. (Taiwan) | 3.73 | |||
China Mobile Ltd. (China) | 2.93 | |||
China Construction Bank Corp. Class H (China) | 2.41 | |||
Industrial and Commercial Bank of China Ltd. Class H (China) | 2.21 | |||
Tencent Holdings Ltd. (China) | 2.18 | |||
CNOOC Ltd. (China) | 1.59 | |||
Hyundai Motor Co. (South Korea) | 1.55 | |||
Bank of China Ltd. Class H (China) | 1.44 | |||
Hon Hai Precision Industry Co. Ltd. (Taiwan) | 1.25 | |||
|
| |||
TOTAL | 25.48 | % | ||
|
|
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 9 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI EMERGING MARKETS CONSUMER DISCRETIONARY ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | 4.73% | 2.86% | 5.45% | 4.73% | 2.86% | 5.45% | ||||||||||||||||||||
Since Inception | (0.78)% | (1.10)% | 0.01% | (1.21)% | (1.71)% | 0.01% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was 2/8/12. The first day of secondary market trading was 2/9/12.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 22 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 962.40 | $ | 3.31 | $ | 1,000.00 | $ | 1,021.80 | $ | 3.41 | 0.67% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 22 for more information. |
10 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS CONSUMER DISCRETIONARY ETF
The iShares MSCI Emerging Markets Consumer Discretionary ETF (the “Fund”), formerly the iShares MSCI Emerging Markets Consumer Discretionary Sector Index 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 12-month reporting period ended August 31, 2013, the total return for the Fund was 4.73%, net of fees, while the total return for the Index was 5.45%.
As represented by the Index, consumer discretionary stocks in emerging markets gained nearly 6% for the reporting period, outperforming the fractional gain of the broad emerging markets index. Despite a general slowdown in emerging economies during the reporting period, the rapid growth rates in many emerging markets over the past 5–10 years led to a significant increase in domestic consumption. This development continued to sustain consumer discretionary stocks during the reporting period.
10 of the 14 countries represented in the Index generated positive returns for the reporting period, including the three largest components in the Index — South Korea, South Africa and China — which together comprised nearly 60% of the Index as of the end of the reporting period.
The four declining components of the Index were Brazil, Indonesia, India and Thailand. Brazil struggled with weak domestic consumption and reduced global demand for commodities, while the export-driven economies of the other three countries slowed during the reporting period.
A stronger U.S. dollar lowered international equity returns for U.S. investors and had a negative impact on Index performance for the reporting period. Although the U.S. dollar fell by 3.5% against the Chinese yuan and 2% versus the South Korean won, it appreciated by 17% versus the Brazilian real, 18% against the Indian rupee and 22% against the South African rand.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector | Percentage of Net Assets |
Auto Manufacturers | 29.38 | % | ||
Retail | 23.39 | |||
Media | 17.35 | |||
Auto Parts & Equipment | 9.71 | |||
Lodging | 3.97 | |||
Leisure Time | 2.56 | |||
Commercial Services | 2.26 | |||
Electrical Components & Equipment | 2.26 | |||
Home Furnishings | 2.06 | |||
Apparel | 1.79 | |||
Holding Companies–Diversified | 1.23 | |||
Other* | 3.77 | |||
Short-Term and Other Net Assets | 0.27 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Hyundai Motor Co. (South Korea) | 11.33 | % | ||
Naspers Ltd. Class N (South Africa) | 10.70 | |||
Hyundai Mobis Co. Ltd. (South Korea) | 5.60 | |||
Kia Motors Corp. (South Korea) | 5.22 | |||
Grupo Televisa SAB de CV CPO (Mexico) | 4.22 | |||
PT Astra International Tbk (Indonesia) | 3.66 | |||
S.A.C.I. Falabella SA (Chile) | 2.34 | |||
LG Electronics Inc. (South Korea) | 2.26 | |||
Belle International Holdings Ltd. (China) | 2.09 | |||
Genting Bhd (Malaysia) | 1.89 | |||
|
| |||
TOTAL | 49.31 | % | ||
|
|
* | Other includes sectors which individually represent less than 1% of net assets. |
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 11 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI EMERGING MARKETS ENERGY CAPPED ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | (7.73)% | (9.16)% | (7.62)% | (7.73)% | (9.16)% | (7.62)% | ||||||||||||||||||||
Since Inception | (17.48)% | (17.98)% | (16.94)% | (25.92)% | (26.63)% | (25.15)% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was 2/8/12. The first day of secondary market trading was 2/9/12.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 22 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 890.70 | $ | 3.19 | $ | 1,000.00 | $ | 1,021.80 | $ | 3.41 | 0.67% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 22 for more information. |
12 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS ENERGY CAPPED ETF
The iShares MSCI Emerging Markets Energy Capped ETF (the “Fund”), formerly the iShares MSCI Emerging Markets Energy Sector Capped Index 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. 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 reporting period ended August 31, 2013, the total return for the Fund was -7.73%, net of fees, while the total return for the Index was -7.62%.
As represented by the Index, energy stocks in emerging markets declined by approximately 7% for the reporting period, trailing the fractional gain of the broad emerging markets index. Although energy prices rose broadly during the reporting period —including a 12% increase in the price of oil in U.S. dollar terms — energy stocks in emerging markets diverged from these price trends.
One factor contributing to the decline in emerging markets energy stocks was a slowdown in the growth rates of the largest emerging economies, which are significant energy consumers and a major source of growth for the energy sector. The four largest emerging markets — China, India, Russia, and Brazil — are among the ten largest consumers of energy in the world. Each of these countries experienced weaker economic growth during the reporting period, leading to concerns about declining demand for energy.
Energy stocks in emerging markets also faced weaker export demand during the reporting period. Many countries in Europe faced recessions during the reporting period, while increased domestic production in the U.S. led to reduced demand for energy exports. Russia, the largest country weighting in the Index at approximately 30%, is one of the world’s largest exporters of oil and gas, and lower demand weighed on the country’s energy sector.
A stronger U.S. dollar lowered international equity returns for U.S. investors and had a negative impact on Index performance for the reporting period. Although the U.S. dollar fell by 3.5% against the Chinese yuan, it appreciated by 3% against the Russian ruble, 17% versus the Brazilian real, 18% against the Indian rupee, and 22% against the South African rand.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector | Percentage of Net Assets |
Oil & Gas | 79.42 | % | ||
Chemicals | 8.06 | |||
Coal | 6.44 | |||
Oil & Gas Services | 2.18 | |||
Holding Companies–Diversified | 1.06 | |||
Pipelines | 1.02 | |||
Transportation | 0.45 | |||
Metal Fabricate & Hardware | 0.29 | |||
Food | 0.19 | |||
Short-Term and Other Net Assets | 0.89 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Gazprom OAO (Russia) | 11.00 | % | ||
CNOOC Ltd. (China) | 8.36 | |||
LUKOIL OAO (Russia) | 6.89 | |||
Petroleo Brasileiro SA (Preferred) (Brazil) | 6.85 | |||
Sasol Ltd. (South Africa) | 5.82 | |||
Petroleo Brasileiro SA (Brazil) | 4.51 | |||
PetroChina Co. Ltd. Class H (China) | 4.46 | |||
China Petroleum & Chemical Corp. Class H (China) | 4.41 | |||
Reliance Industries Ltd. (India) | 4.17 | |||
China Shenhua Energy Co. Ltd. Class H (China) | 2.84 | |||
|
| |||
TOTAL | 59.31 | % | ||
|
|
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 13 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI EMERGING MARKETS GROWTH ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | 1.76% | 3.66% | 2.44% | 1.76% | 3.66% | 2.44% | ||||||||||||||||||||
Since Inception | (2.74)% | (1.87)% | (2.02)% | (4.25)% | (2.91)% | (3.14)% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was 2/8/12. The first day of secondary market trading was 2/9/12.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 22 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 902.00 | $ | 2.35 | $ | 1,000.00 | $ | 1,022.70 | $ | 2.50 | 0.49% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 22 for more information. |
14 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS GROWTH ETF
The iShares MSCI Emerging Markets Growth ETF (the “Fund”), formerly the iShares MSCI Emerging Markets Growth Index 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 IndexSM 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 12-month reporting period ended August 31, 2013, the total return for the Fund was 1.76%, net of fees, while the total return for the Index was 2.44%.
As represented by the Index, growth stocks in emerging markets advanced by about 2% for the reporting period, outperforming the fractional gain of the broad emerging markets index. Although just 8 of the 21 countries represented in the Index generated positive returns for the reporting period, they included three of the four largest components in the Index — China, South Korea and Taiwan, which together comprised approximately 45% of the Index as of the end of the reporting period. The top two performers were the Philippines and Poland, both of which produced gains of more than 15% for the reporting period.
Among the declining components of the Index, Chile and Egypt each fell by approximately 25% for the reporting period. Egypt faced significant political turmoil, while growth stocks in Chile were weighed down by a slower economy as global demand for commodities eased. Other notable decliners in the Index included Brazil, the third-largest component within the Index and South Africa, the fifth-largest country weighting in the Index.
A stronger U.S. dollar lowered international equity returns for U.S. investors and had a negative impact on Index performance for the reporting period. In local currency terms, the Index returned 7.99% for the reporting period. Although the U.S. dollar fell by 3.5% against the Chinese yuan, it appreciated by 17% versus the Brazilian real and 18% against the Indian rupee.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector | Percentage of Net Assets |
Financial | 23.02 | % | ||
Consumer Non-Cyclical | 17.33 | |||
Technology | 16.66 | |||
Communications | 13.02 | |||
Consumer Cyclical | 9.87 | |||
Industrial | 6.13 | |||
Energy | 6.02 | |||
Basic Materials | 3.95 | |||
Utilities | 2.62 | |||
Diversified | 0.99 | |||
Short-Term and Other Net Assets | 0.39 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Samsung Electronics Co. Ltd. (South Korea) | 7.80 | % | ||
Taiwan Semiconductor Manufacturing Co. Ltd. (Taiwan) | 4.81 | |||
Tencent Holdings Ltd. (China) | 2.80 | |||
CNOOC Ltd. (China) | 2.05 | |||
Naspers Ltd. Class N (South Africa) | 1.90 | |||
MTN Group Ltd. (South Africa) | 1.77 | |||
Itau Unibanco Holding SA (Preferred) (Brazil) | 1.75 | |||
Sberbank of Russia (Russia) | 1.64 | |||
Companhia de Bebidas das Americas (Preferred) (Brazil) | 1.39 | |||
China Life Insurance Co. Ltd. Class H (China) | 1.07 | |||
|
| |||
TOTAL | 26.98 | % | ||
|
|
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 15 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI EMERGING MARKETS MINIMUM VOLATILITY ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | 2.22% | 0.90% | 2.34% | 2.22% | 0.90% | 2.34% | ||||||||||||||||||||
Since Inception | 9.11% | 8.57% | 9.41% | 17.72% | 16.63% | 18.30% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was 10/18/11. The first day of secondary market trading was 10/20/11.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 22 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 920.00 | $ | 1.21 | $ | 1,000.00 | $ | 1,023.90 | $ | 1.28 | 0.25% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 22 for more information. |
16 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS MINIMUM VOLATILITY ETF
The iShares MSCI Emerging Markets Minimum Volatility ETF (the “Fund”), formerly the iShares MSCI Emerging Markets Minimum Volatility Index Fund, seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Emerging Markets Minimum Volatility IndexSM (the “Index”). The Index measures the performance of equity securities in global emerging markets that in aggregate have lower 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 12-month reporting period ended August 31, 2013, the total return for the Fund was 2.22%, net of fees, while the total return for the Index was 2.34%.
As represented by the Index, lower-volatility stocks in emerging markets advanced by approximately 2% for the reporting period, outperforming the fractional gain of the broad emerging markets index. Although just 9 of the 19 countries represented in the Index generated positive returns for the reporting period, they included the two largest components in the Index — Taiwan and China — which together comprised more than 30% of the Index as of the end of the reporting period. Other noteworthy positive performers included lower-volatility stocks in Poland, which gained more than 40% for the reporting period and South Korea, the third-largest country weighting in the Index.
Among the declining components of the Index, three countries — Peru, Brazil and the Czech Republic — fell by 20% or more for the reporting period. The Czech Republic remained mired in recession throughout the reporting period, while the Brazilian and Peruvian economies slowed as global demand for commodities weakened. Other notable decliners in the Index included Chile, which also faced reduced demand for commodities, and South Africa, the fifth-largest component within the Index.
A stronger U.S. dollar lowered international equity returns for U.S. investors and had a negative impact on Index performance for the reporting period. In local currency terms, the Index returned 7.53% for the reporting period. Although the U.S. dollar fell by 3.5% against the Chinese yuan, it appreciated by 17% versus the Brazilian real and 18% against the Indian rupee.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector | Percentage of Net Assets |
Financial | 25.92 | % | ||
Consumer Non-Cyclical | 21.61 | |||
Communications | 14.72 | |||
Utilities | 8.00 | |||
Consumer Cyclical | 7.70 | |||
Technology | 7.62 | |||
Energy | 6.65 | |||
Industrial | 3.64 | |||
Basic Materials | 2.49 | |||
Diversified | 1.32 | |||
Short-Term and Other Net Assets | 0.33 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
IHH Healthcare Bhd (Malaysia) | 1.61 | % | ||
Chunghwa Telecom Co. Ltd. (Taiwan) | 1.60 | |||
Public Bank Bhd Foreign (Malaysia) | 1.59 | |||
Malayan Banking Bhd (Malaysia) | 1.54 | |||
Taiwan Mobile Co. Ltd. (Taiwan) | 1.50 | |||
KT&G Corp. (South Korea) | 1.48 | |||
PT Unilever Indonesia Tbk (Indonesia) | 1.47 | |||
China Mobile Ltd. (China) | 1.46 | |||
Taiwan Semiconductor Manufacturing Co. Ltd. (Taiwan) | 1.40 | |||
Far EasTone Telecommunications Co. Ltd. (Taiwan) | 1.33 | |||
|
| |||
TOTAL | 14.98 | % | ||
|
|
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 17 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI EMERGING MARKETS SMALL-CAP ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | 4.85% | 3.91% | 4.60% | 4.85% | 3.91% | 4.60% | ||||||||||||||||||||
Since Inception | (3.67)% | (4.12)% | (3.00)% | (7.37)% | (8.25)% | (6.03)% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was 8/16/11. The first day of secondary market trading was 8/18/11.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 22 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 902.50 | $ | 3.21 | $ | 1,000.00 | $ | 1,021.80 | $ | 3.41 | 0.67% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 22 for more information. |
18 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS SMALL-CAP ETF
The iShares MSCI Emerging Markets Small-Cap ETF (the “Fund”), formerly the iShares MSCI Emerging Markets Small Cap Index 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 reporting period ended August 31, 2013, the total return for the Fund was 4.85%, net of fees, while the total return for the Index was 4.60%.
As represented by the Index, small-capitalization stocks in emerging markets advanced by approximately 4.5% for the reporting period, outperforming the fractional gain of the broad emerging markets index. Although just 10 of the 21 countries represented in the Index generated positive returns for the reporting period, they included the three largest components in the Index — Taiwan, South Korea and China — which together comprised more than half of the Index as of the end of the reporting period. In particular, small-capitalization stocks in China gained more than 30% for the reporting period. Other noteworthy positive performers included small-capitalization stocks in Hungary and Poland, both of which gained more than 20% for the reporting period.
Among the declining components of the Index, Colombia and Peru fell the most for the reporting period. Small-capitalization stocks in Colombia declined by more than 60% as weaker exports led to a slowdown in the Colombian economy, while small-capitalization stocks in Peru declined by more than 30% as slowing global demand for commodities weighed on the Peruvian economy. Other notable decliners in the Index included South Africa, the fourth-largest component within the Index, and Brazil, the sixth-largest country weighting in the Index.
A stronger U.S. dollar lowered international equity returns for U.S. investors and had a negative impact on Index performance for the reporting period. In local currency terms, the Index returned 9.39% for the reporting period. Although the U.S. dollar fell by 3.5% against the Chinese yuan, it appreciated by 17% versus the Brazilian real and 18% against the Indian rupee.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector | Percentage of Net Assets |
Financial | 18.60 | % | ||
Industrial | 18.24 | |||
Consumer Cyclical | 16.15 | |||
Consumer Non-Cyclical | 15.19 | |||
Technology | 9.05 | |||
Basic Materials | 8.91 | |||
Communications | 4.91 | |||
Utilities | 3.83 | |||
Energy | 3.03 | |||
Diversified | 1.71 | |||
Short-Term and Other Net Assets | 0.38 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Hotel Shilla Co. Ltd. (South Korea) | 0.56 | % | ||
Mondi Ltd. (South Africa) | 0.52 | |||
Kingsoft Corp. Ltd. (China) | 0.50 | |||
Coronation Fund Managers Ltd. (South Africa) | 0.43 | |||
Orascom Telecom Media And Technology Holding SAE SP GDR (Egypt) | 0.42 | |||
Semiconductor Manufacturing International Corp. (China) | 0.41 | |||
Anxin-China Holdings Ltd. (China) | 0.40 | |||
Sonda SA (Chile) | 0.39 | |||
Dialog Group Bhd (Malaysia) | 0.36 | |||
Dong-A Socio Holdings Co. Ltd. (South Korea) | 0.36 | |||
|
| |||
TOTAL | 4.35 | % | ||
|
|
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 19 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI EMERGING MARKETS VALUE ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | (1.83)% | (1.50)% | (1.51)% | (1.83)% | (1.50)% | �� | (1.51)% | |||||||||||||||||||
Since Inception | (9.22)% | (8.28)% | (8.85)% | (14.02)% | (12.63)% | (13.47)% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was 2/8/12. The first day of secondary market trading was 2/9/12.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 22 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 887.80 | $ | 2.33 | $ | 1,000.00 | $ | 1,022.70 | $ | 2.50 | 0.49% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 22 for more information. |
20 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS VALUE ETF
The iShares MSCI Emerging Markets Value ETF (the “Fund”), formerly the iShares MSCI Emerging Markets Value Index 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 IndexSM 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 12-month reporting period ended August 31, 2013, the total return for the Fund was -1.83%, net of fees, while the total return for the Index was -1.51%.
As represented by the Index, value stocks in emerging markets declined by 1.5% for the reporting period, trailing the fractional gain of the broad emerging markets index. Although just 8 of the 21 countries represented in the Index generated positive returns for the reporting period, they included the three largest components in the Index — China, South Korea and Taiwan — which together comprised about 45% of the Index as of the end of the reporting period. Other noteworthy positive performers included value stocks in the Philippines, which produced double-digit gains for the reporting period, and Hungary.
Among the declining components of the Index, Peru and the Czech Republic fell the most for the reporting period. Value stocks in Peru declined by more than 40% as weaker global demand for commodities weighed on the Peruvian economy. The Czech Republic, where value stocks fell by approximately 25%, remained mired in recession throughout the reporting period. Other notable decliners in the Index included Brazil, the third-largest component within the Index and South Africa, the fifth-largest country weighting in the Index.
A stronger U.S. dollar lowered international equity returns for U.S. investors and had a negative impact on Index performance for the reporting period. In local currency terms, the Index returned 3.62% for the reporting period. Although the U.S. dollar fell by 3.5% against the Chinese yuan, it appreciated by 17% versus the Brazilian real and 18% against the Indian rupee.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector | Percentage of Net Assets |
Financial | 28.80 | % | ||
Energy | 15.78 | |||
Basic Materials | 13.83 | |||
Communications | 10.08 | |||
Industrial | 7.76 | |||
Consumer Cyclical | 7.66 | |||
Technology | 4.91 | |||
Utilities | 4.24 | |||
Diversified | 3.56 | |||
Consumer Non-Cyclical | 2.76 | |||
Short-Term and Other Net Assets | 0.62 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
China Mobile Ltd. (China) | 3.74 | % | ||
China Construction Bank Corp. Class H (China) | 3.02 | |||
Industrial and Commercial Bank of China Ltd. Class H (China) | 2.71 | |||
Gazprom OAO (Russia) | 2.62 | |||
Hyundai Motor Co. (South Korea) | 1.98 | |||
Bank of China Ltd. Class H (China) | 1.79 | |||
LUKOIL OAO (Russia) | 1.69 | |||
Petroleo Brasileiro SA (Preferred) (Brazil) | 1.64 | |||
Sasol Ltd. (South Africa) | 1.46 | |||
Vale SA Class A (Preferred) (Brazil) | 1.39 | |||
|
| |||
TOTAL | 22.04 | % | ||
|
|
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 21 |
Table of Contents
Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.iShares.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are redeemed or sold in the market. Performance for certain funds may reflect a waiver of a portion of investment management fees. Without such waiver, performance would have been lower.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The 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 a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of a fund may not have traded in the secondary market until after the fund’s inception, for the period from inception to the first day of secondary trading, 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 at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. 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.
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 expense example, which is based on an investment of $1,000 invested on March 1, 2013 and held through August 31, 2013, 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.
Actual Expenses — The table provides information about actual account values and actual expenses. To estimate the expenses that you paid on your account 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 for your Fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Example for Comparison Purposes — The table also 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. 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 hypothetical examples are 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.
22 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 86.03% |
| |||||||
BRAZIL — 13.30% | ||||||||
ALL — America Latina Logistica SA | 138,000 | $ | 535,815 | |||||
Anhanguera Educacional Participacoes SA | 110,400 | 643,210 | ||||||
Arteris SA | 55,200 | 499,707 | ||||||
Banco Bradesco SA | 220,890 | 2,936,280 | ||||||
Banco do Brasil SA | 193,289 | 1,874,185 | ||||||
Banco Santander (Brasil) SA Units | 303,637 | 1,742,221 | ||||||
BB Seguridade Participacoes SA | 193,200 | 1,563,675 | ||||||
BM&F Bovespa SA | 607,269 | 2,986,276 | ||||||
BR Malls Participacoes SA | 138,000 | 1,050,732 | ||||||
BR Properties SA | 55,200 | 421,454 | ||||||
BRF — Brasil Foods SA | 220,800 | 5,127,107 | ||||||
CCR SA | 276,000 | 2,014,387 | ||||||
Centrais Eletricas Brasileiras SA | 110,800 | 230,717 | ||||||
CETIP SA — Mercados Organizados | 55,717 | 548,451 | ||||||
Cielo SA | 110,484 | 2,714,694 | ||||||
Companhia de Bebidas das Americas | 55,200 | 1,943,099 | ||||||
Companhia de Saneamento Basico do Estado de Sao Paulo | 110,400 | 909,783 | ||||||
Companhia de Saneamento de Minas Gerais SA | 27,600 | 333,796 | ||||||
Companhia Hering SA | 55,200 | 740,969 | ||||||
Companhia Siderurgica Nacional SA | 220,800 | 782,070 | ||||||
Cosan SA Industria e Comercio | 55,200 | 965,512 | ||||||
CPFL Energia SA | 82,800 | 679,202 | ||||||
Cyrela Brazil Realty SA Empreendimentos e Participacoes | 82,800 | 547,542 | ||||||
Duratex SA | 82,880 | 421,164 | ||||||
EcoRodovias Infraestrutura e Logistica SA | 55,200 | 355,275 | ||||||
EDP Energias do Brasil SA | 82,800 | 372,691 | ||||||
Embraer SA | 193,200 | 1,591,307 | ||||||
Estacio Participacoes SA | 73,600 | 543,672 | ||||||
Fibria Celulose SAa | 82,841 | 961,112 | ||||||
Hypermarcas SA | 110,400 | 754,205 | ||||||
JBS SA | 248,452 | 769,227 | ||||||
Kroton Educacional SA | 55,200 | 743,059 |
Security | Shares | Value | ||||||
Localiza Rent A Car SA | 55,260 | $ | 724,108 | |||||
Lojas Americanas SA | 27,600 | 157,784 | ||||||
Lojas Renner SA | 27,600 | 666,315 | ||||||
MPX Energia SAa | 55,200 | 113,781 | ||||||
MPX Energia SA Newa | 12,006 | 26,010 | ||||||
MRV Engenharia e Participacoes SA | 110,400 | 386,855 | ||||||
Multiplan Empreendimentos Imobiliarios SA | 27,600 | 556,598 | ||||||
Multiplus SA | 27,600 | 302,564 | ||||||
Natura Cosmeticos SA | 55,200 | 1,039,586 | ||||||
Odontoprev SA | 82,800 | 306,860 | ||||||
Petroleo Brasileiro SA | 938,400 | 6,304,159 | ||||||
Porto Seguro SA | 27,600 | 298,501 | ||||||
Qualicorp SAa | 55,200 | 433,064 | ||||||
Raia Drogasil SA | 82,850 | 588,301 | ||||||
Souza Cruz SA | 110,400 | 1,161,030 | ||||||
Sul America SA Units | 27,672 | 162,968 | ||||||
TIM Participacoes SA | 276,069 | 1,089,318 | ||||||
Totvs SA | 27,600 | 434,225 | ||||||
Tractebel Energia SA | 55,200 | 794,144 | ||||||
Transmissora Alianca de Energia Eletrica SA | 28,200 | 260,979 | ||||||
Ultrapar Participacoes SA | 110,400 | 2,410,298 | ||||||
Vale SA | 414,000 | 5,994,397 | ||||||
WEG SA | 55,200 | 650,177 | ||||||
|
| |||||||
63,164,618 | ||||||||
CHINA — 46.12% | ||||||||
Agile Property Holdings Ltd. | 552,000 | 587,991 | ||||||
Agricultural Bank of China Ltd. Class H | 6,900,000 | 2,963,092 | ||||||
Air China Ltd. Class H | 560,000 | 357,474 | ||||||
Aluminum Corp. of China Ltd. Class Ha,b | 1,104,000 | 370,164 | ||||||
Anhui Conch Cement Co. Ltd. Class H | 414,000 | 1,337,396 | ||||||
Anta Sports Products Ltd. | 276,040 | 356,691 | ||||||
AviChina Industry & Technology Co. Ltd. Class H | 1,104,000 | 562,365 | ||||||
Bank of China Ltd. Class H | 24,012,000 | 10,094,800 | ||||||
Bank of Communications Co. Ltd. Class H | 2,764,200 | 1,825,119 | ||||||
BBMG Corp. Class H | 414,000 | 283,496 | ||||||
Beijing Capital International Airport Co. Ltd. Class H | 552,000 | 361,622 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 23 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI BRIC ETF
August 31, 2013
Security | Shares | Value | ||||||
Beijing Enterprises Holdings Ltd. | 138,000 | $ | 978,799 | |||||
Belle International Holdings Ltd. | 1,380,000 | 1,907,769 | ||||||
Bosideng International Holdings Ltd. | 1,104,000 | 224,946 | ||||||
Brilliance China Automotive Holdings Ltd.a | 1,104,000 | 1,623,027 | ||||||
BYD Co. Ltd. Class Ha,b | 138,000 | 495,628 | ||||||
China Agri-Industries Holdings Ltd. | 784,800 | 368,394 | ||||||
China BlueChemical Ltd. Class H | 552,000 | 289,725 | ||||||
China CITIC Bank Corp. Ltd. Class H | 2,484,000 | 1,185,237 | ||||||
China Coal Energy Co. Class H | 1,380,000 | 813,293 | ||||||
China Communications Construction Co. Ltd. Class H | 1,380,000 | 1,057,103 | ||||||
China Communications Services Corp. Ltd. Class H | 552,800 | 371,413 | ||||||
China Construction Bank Corp. Class H | 23,184,370 | 16,982,258 | ||||||
China COSCO Holdings Co. Ltd. Class Ha,b | 828,000 | 380,130 | ||||||
China Everbright International Ltd.b | 828,000 | 781,616 | ||||||
China Everbright Ltd. | 404,000 | 543,918 | ||||||
China Gas Holdings Ltd. | 552,000 | 575,890 | ||||||
China International Marine Containers (Group) Co. Ltd. Class H | 138,000 | 227,793 | ||||||
China Life Insurance Co. Ltd. Class H | 2,484,000 | 6,099,164 | ||||||
China Longyuan Power Group Corp. Ltd. Class H | 828,000 | 874,513 | ||||||
China Mengniu Dairy Co. Ltd. | 276,000 | 1,167,440 | ||||||
China Merchants Bank Co. Ltd. Class H | 1,242,297 | 2,153,161 | ||||||
China Merchants Holdings (International) Co. Ltd.b | 424,000 | 1,432,580 | ||||||
China Minsheng Banking Corp. Ltd. Class H | 1,656,000 | 1,781,059 | ||||||
China Mobile Ltd. | 1,932,000 | 20,766,558 | ||||||
China National Building Material Co. Ltd. Class Hb | 1,104,000 | 1,015,104 | ||||||
China Oilfield Services Ltd. Class H | 552,000 | 1,422,284 |
Security | Shares | Value | ||||||
China Overseas Grand Oceans Group Ltd.b | 276,000 | $ | 360,910 | |||||
China Overseas Land & Investment Ltd. | 1,104,800 | 3,291,148 | ||||||
China Pacific Insurance (Group) Co. Ltd. Class H | 828,000 | 2,765,552 | ||||||
China Petroleum & Chemical Corp. Class H | 8,280,600 | 5,969,328 | ||||||
China Railway Construction Corp. Ltd. Class H | 552,000 | 525,348 | ||||||
China Railway Group Ltd. Class H | 1,104,000 | 566,636 | ||||||
China Resources Cement Holdings Ltd.b | 552,000 | 350,232 | ||||||
China Resources Enterprise Ltd. | 552,000 | 1,573,197 | ||||||
China Resources Land Ltd. | 552,000 | 1,509,130 | ||||||
China Resources Power Holdings Co. Ltd. | 552,200 | 1,267,559 | ||||||
China Shanshui Cement Group Ltd. | 552,000 | 219,251 | ||||||
China Shenhua Energy Co. Ltd. Class H | 1,104,000 | 3,431,136 | ||||||
China Shipping Container Lines Co. Ltd. Class Ha | 1,104,000 | 281,894 | ||||||
China Southern Airlines Co. Ltd. Class H | 552,000 | 187,929 | ||||||
China State Construction International Holdings Ltd. | 552,000 | 891,241 | ||||||
China Taiping Insurance Holdings Co. Ltd.a,b | 276,000 | 377,994 | ||||||
China Telecom Corp. Ltd. Class H | 4,416,000 | 2,226,679 | ||||||
China Unicom (Hong Kong) Ltd. | 1,657,900 | 2,514,302 | ||||||
China Vanke Co. Ltd. Class B | 441,601 | 889,535 | ||||||
Chongqing Rural Commercial Bank Co. Ltd. Class H | 828,000 | 372,656 | ||||||
CITIC Pacific Ltd.b | 276,000 | 319,267 | ||||||
CITIC Securities Co. Ltd. Class H | 276,000 | 537,450 | ||||||
CNOOC Ltd. | 5,520,000 | 10,962,550 | ||||||
COSCO Pacific Ltd. | 552,000 | 811,513 | ||||||
Country Garden Holdings Co. Ltd. | 1,380,356 | 863,346 | ||||||
CSR Corp Ltd. Class H | 555,000 | 403,668 | ||||||
Dah Chong Hong Holdings Ltd.b | 276,000 | 212,132 | ||||||
Daphne International Holdings Ltd.b | 344,000 | 220,479 | ||||||
Datang International Power Generation Co. Ltd. Class H | 1,104,000 | 475,518 |
24 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI BRIC ETF
August 31, 2013
Security | Shares | Value | ||||||
Dongfeng Motor Group Co. Ltd. Class H | 1,104,000 | $ | 1,529,062 | |||||
ENN Energy Holdings Ltd. | 124,000 | 615,650 | ||||||
Evergrande Real Estate Group Ltd.a,b | 1,932,000 | 822,191 | ||||||
Far East Horizon Ltd. | 552,000 | 333,860 | ||||||
Fosun International Ltd. | 552,000 | 402,197 | ||||||
Franshion Properties (China) Ltd.b | 1,104,000 | 382,977 | ||||||
GCL-Poly Energy Holdings Ltd.a | 3,036,000 | 802,615 | ||||||
Geely Automobile Holdings Ltd. | 1,380,000 | 726,091 | ||||||
Golden Eagle Retail Group Ltd.b | 276,000 | 382,977 | ||||||
GOME Electrical Appliances Holdings Ltd.a | 3,312,400 | 341,731 | ||||||
Great Wall Motor Co. Ltd. Class H | 414,000 | 2,108,867 | ||||||
Greentown China Holdings Ltd. | 276,000 | 515,382 | ||||||
Guangdong Investment Ltd.b | 1,104,000 | 914,020 | ||||||
Guangzhou Automobile Group Co. Ltd. Class H | 878,454 | 896,081 | ||||||
Guangzhou R&F Properties Co. Ltd. Class H | 331,200 | 540,724 | ||||||
Haier Electronics Group Co. Ltd.b | 276,000 | 482,637 | ||||||
Haitong Securities Co. Ltd. Class H | 441,600 | 640,099 | ||||||
Hengan International Group Co. Ltd. | 276,000 | 3,023,600 | ||||||
Huaneng Power International Inc. Class H | 1,104,000 | 1,100,526 | ||||||
Industrial and Commercial Bank of China Ltd. Class H | 23,460,050 | 15,399,213 | ||||||
Inner Mongolia Yitai Coal Co. Ltd. Class B | 332,170 | 687,592 | ||||||
Intime Retail Group Co. Ltd.b | 276,000 | 323,182 | ||||||
Jiangsu Expressway Co. Ltd. Class H | 552,000 | 625,720 | ||||||
Jiangxi Copper Co. Ltd. Class H | 552,000 | 1,063,510 | ||||||
Kingboard Chemical Holdings Co. Ltd. | 138,100 | 300,264 | ||||||
Kunlun Energy Co. Ltd. | 1,104,000 | 1,608,790 | ||||||
Lee & Man Paper Manufacturing Ltd.b | 552,000 | 326,741 | ||||||
Lenovo Group Ltd. | 2,208,000 | 2,135,562 | ||||||
Longfor Properties Co. Ltd.b | 414,000 | 691,922 | ||||||
New China Life Insurance Co. Ltd. Class Ha | 165,600 | 451,671 |
Security | Shares | Value | ||||||
Nine Dragons Paper (Holdings) Ltd.b | 552,000 | $ | 375,147 | |||||
Parkson Retail Group Ltd.b | 276,000 | 108,558 | ||||||
People’s Insurance Co. Group of China Ltd. Class H | 1,104,000 | 535,314 | ||||||
PetroChina Co. Ltd. Class H | 6,624,000 | 7,209,656 | ||||||
PICC Property and Casualty Co. Ltd. Class H | 1,105,200 | 1,539,276 | ||||||
Ping An Insurance (Group) Co. of China Ltd. Class H | 632,500 | 4,433,144 | ||||||
Poly Property Group Co. Ltd. | 560,984 | 339,293 | ||||||
Shandong Weigao Group Medical Polymer Co. Ltd. Class H | 608,000 | 573,156 | ||||||
Shanghai Electric Group Co. Ltd. Class H | 1,104,000 | 408,604 | ||||||
Shanghai Industrial Holdings Ltd. | 276,000 | 904,055 | ||||||
Shanghai Pharmaceuticals Holding Co. Ltd. Class H | 220,800 | 419,140 | ||||||
Shenzhou International Group Holdings Ltd. | 276,000 | 896,936 | ||||||
Shimao Property Holdings Ltd. | 414,000 | 1,054,968 | ||||||
Shougang Fushan Resources Group Ltd.b | 1,104,000 | 370,164 | ||||||
Shui On Land Ltd. | 1,242,333 | 384,504 | ||||||
Sihuan Pharmaceutical Holdings Group Ltd. | 832,000 | 621,232 | ||||||
Sino Biopharmaceutical Ltd. | 1,104,000 | 788,734 | ||||||
Sino-Ocean Land Holdings Ltd.b | 966,000 | 571,797 | ||||||
Sinopec Shanghai Petrochemical Co. Ltd. Class Ha | 552,000 | 197,895 | ||||||
Sinopharm Group Co. Ltd. Class H | 331,200 | 830,306 | ||||||
SOHO China Ltd.b | 690,000 | 586,390 | ||||||
Sun Art Retail Group Ltd. | 828,000 | 1,127,577 | ||||||
Tencent Holdings Ltd. | 316,500 | 14,840,529 | ||||||
Tingyi (Cayman Islands) Holding Corp. | 552,000 | 1,366,760 | ||||||
Uni-President China Holdings Ltd.b | 276,000 | 235,980 | ||||||
Want Want China Holdings Ltd.b | 1,932,000 | 2,865,212 | ||||||
Weichai Power Co. Ltd. Class H | 239,775 | 868,884 | ||||||
Wumart Stores Inc. Class H | 276,000 | 522,501 | ||||||
Yantai Changyu Pioneer Wine Co. Ltd. Class B | 83,400 | 275,333 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 25 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI BRIC ETF
August 31, 2013
Security | Shares | Value | ||||||
Yanzhou Coal Mining Co. Ltd. Class H | 552,000 | $ | 491,179 | |||||
Yingde Gases Group Co. Ltd.b | 359,500 | 322,207 | ||||||
Yuexiu Property Co. Ltd. | 1,680,000 | 474,466 | ||||||
Zhaojin Mining Industry Co. Ltd. Class H | 276,000 | 261,606 | ||||||
Zhejiang Expressway Co. Ltd. Class H | 552,000 | 461,993 | ||||||
Zhongsheng Group Holdings Ltd.b | 276,000 | 365,893 | ||||||
Zhuzhou CSR Times Electric Co. Ltd. Class H | 276,000 | 870,241 | ||||||
Zijin Mining Group Co. Ltd. Class Hb | 2,209,000 | 555,498 | ||||||
Zoomlion Heavy Industry Science and Technology Co. Ltd. Class Hb | 441,600 | 343,968 | ||||||
ZTE Corp. Class Ha,b | 220,840 | 427,190 | ||||||
|
| |||||||
218,997,332 | ||||||||
INDIA — 13.31% | ||||||||
ACC Ltd. | 14,904 | 217,481 | ||||||
Adani Enterprises Ltd. | 65,412 | 140,091 | ||||||
Adani Ports and Special Economic Zone Ltd. | 127,054 | 242,205 | ||||||
Aditya Birla Nuvo Ltd. | 10,764 | 185,083 | ||||||
Ambuja Cements Ltd. | 209,484 | 544,081 | ||||||
Apollo Hospitals Enterprise Ltd. | 24,840 | 325,040 | ||||||
Asian Paints Ltd. | 96,600 | 615,465 | ||||||
Axis Bank Ltd. | 1,720 | 21,684 | ||||||
Bajaj Auto Ltd. | 26,220 | 729,017 | ||||||
Bank of Baroda | 10,764 | 75,073 | ||||||
Bank of India | 31,182 | 67,159 | ||||||
Bharat Heavy Electricals Ltd. | 178,572 | 321,630 | ||||||
Bharat Petroleum Corp. Ltd. | 59,616 | 246,332 | ||||||
Bharti Airtel Ltd. | 189,336 | 857,127 | ||||||
Cairn India Ltd. | 142,968 | 693,959 | ||||||
Canara Bank Ltd. | 26,772 | 82,176 | ||||||
Cipla Ltd. | 115,644 | 729,798 | ||||||
Coal India Ltd. | 160,080 | 609,113 | ||||||
Dabur India Ltd. | 146,406 | 361,417 | ||||||
Divi’s Laboratories Ltd. | 14,904 | 224,282 | ||||||
DLF Ltd. | 136,344 | 267,859 | ||||||
Dr. Reddy’s Laboratories Ltd. | 33,396 | 1,158,978 | ||||||
GAIL (India) Ltd. | 111,780 | 499,855 | ||||||
GlaxoSmithKline Consumer Healthcare Ltd. | 3,312 | 203,831 |
Security | Shares | Value | ||||||
Godrej Consumer Products Ltd. | 41,400 | $ | 507,553 | |||||
HCL Technologies Ltd. | 67,896 | 1,069,205 | ||||||
HDFC Bank Ltd. | 491,556 | 4,419,317 | ||||||
Hero Motocorp Ltd. | 24,957 | 773,036 | ||||||
Hindalco Industries Ltd. | 321,264 | 510,803 | ||||||
Hindustan Unilever Ltd. | 157,310 | 1,503,457 | ||||||
Housing Development Finance Corp. Ltd. | 465,888 | 5,067,510 | ||||||
ICICI Bank Ltd. | 75,485 | 918,285 | ||||||
Idea Cellular Ltd.a | 228,528 | 553,074 | ||||||
Infosys Ltd. | 146,832 | 6,902,349 | ||||||
Infrastructure Development Finance Co. Ltd. | 32,152 | 39,174 | ||||||
ITC Ltd. | 714,564 | 3,338,670 | ||||||
Jaiprakash Associates Ltd. | 314,640 | 157,630 | ||||||
Jindal Steel & Power Ltd. | 111,504 | 374,408 | ||||||
JSW Steel Ltd. | 24,840 | 203,566 | ||||||
Kotak Mahindra Bank Ltd. | 94,392 | 942,348 | ||||||
Larsen & Toubro Ltd. | 99,840 | 1,094,885 | ||||||
LIC Housing Finance Ltd. | 91,356 | 229,392 | ||||||
Lupin Ltd. | 28,980 | 349,234 | ||||||
Mahindra & Mahindra Financial Services Ltd. | 57,448 | 219,723 | ||||||
Mahindra & Mahindra Ltd. | 96,600 | 1,145,179 | ||||||
NTPC Ltd. | 349,416 | 692,274 | ||||||
Oil & Natural Gas Corp. Ltd. | 248,676 | 937,757 | ||||||
Oil India Ltd. | 39,468 | 259,645 | ||||||
Piramal Enterprises Ltd. | 25,392 | 241,564 | ||||||
Power Finance Corp. Ltd. | 82,524 | 136,270 | ||||||
Power Grid Corp. of India Ltd. | 372,600 | 550,695 | ||||||
Ranbaxy Laboratories Ltd.a | 41,676 | 257,266 | ||||||
Reliance Capital Ltd. | 29,546 | 139,636 | ||||||
Reliance Communications Ltd. | 161,184 | 300,558 | ||||||
Reliance Industries Ltd. | 412,068 | 5,325,326 | ||||||
Reliance Infrastructure Ltd. | 35,052 | 181,600 | ||||||
Reliance Power Ltd.a | 194,224 | 199,016 | ||||||
Rural Electrification Corp. Ltd. | 93,297 | 238,432 | ||||||
Sesa Goa Ltd. | 112,332 | 320,912 | ||||||
Sesa Goa Ltd. New | 253,368 | 723,826 | ||||||
Shriram Transport Finance Co. Ltd. | 40,060 | 314,350 | ||||||
Siemens Ltd. | 20,703 | 135,586 | ||||||
State Bank of India | 41,952 | 964,477 | ||||||
Sun Pharmaceuticals Industries Ltd. | 205,344 | 1,619,877 |
26 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI BRIC ETF
August 31, 2013
Security | Shares | Value | ||||||
Tata Consultancy Services Ltd. | 150,428 | $ | 4,629,184 | |||||
Tata Motors Ltd. | 229,332 | 1,038,710 | ||||||
Tata Power Co. Ltd. | 343,068 | 393,851 | ||||||
Tata Steel Ltd. | 89,148 | 369,707 | ||||||
Titan Industries Ltd. | 70,932 | 241,182 | ||||||
Ultratech Cement Ltd. | 12,406 | 276,933 | ||||||
Unitech Ltd.a | 398,435 | 99,805 | ||||||
United Breweries Ltd. | 20,424 | 221,196 | ||||||
United Spirits Ltd. | 28,428 | 946,962 | ||||||
Wipro Ltd. | 184,668 | 1,351,679 | ||||||
Wockhardt Ltd. | 8,004 | 56,871 | ||||||
Zee Entertainment Enterprises Ltd. | 86,940 | 304,626 | ||||||
|
| |||||||
63,207,307 | ||||||||
RUSSIA — 13.30% |
| |||||||
Federal Grid Co. of Unified Energy System OJSCa | 102,128,500 | 324,972 | ||||||
Gazprom OAO | 3,756,368 | 14,877,487 | ||||||
INTER RAO UES OJSCa | 414,000,000 | 147,062 | ||||||
LSR Group OJSC SP GDRc | 63,480 | 266,616 | ||||||
LUKOIL OAO | 162,840 | 9,410,131 | ||||||
Magnit OJSC SP GDRc | 86,392 | 4,794,756 | ||||||
MegaFon OAO SP GDRc | 29,256 | 988,853 | ||||||
MMC Norilsk Nickel OJSC | 16,012 | 2,101,085 | ||||||
Mobile TeleSystems OJSC SP ADR | 171,948 | 3,638,420 | ||||||
NovaTek OAO SP GDRc | 29,532 | 3,537,934 | ||||||
Rosneft Oil Co. OJSC | 369,882 | 2,735,881 | ||||||
Rostelecom OJSC | 375,360 | 1,132,854 | ||||||
RusHydro OJSC | 34,500,200 | 559,930 | ||||||
Sberbank of Russia | 3,447,320 | 9,133,022 | ||||||
Severstal OAO | 63,480 | 525,902 | ||||||
Sistema JSFC SP GDRc | 38,640 | 855,490 | ||||||
Surgutneftegas OJSC | 2,235,620 | 1,750,205 | ||||||
Tatneft OAO Class S | 452,643 | 2,837,123 | ||||||
TMK OAO SP GDRc | 19,596 | 252,200 | ||||||
Uralkali OJSC | 416,760 | 1,983,499 | ||||||
VTB Bank OJSC | 974,286,001 | 1,301,856 | ||||||
|
| |||||||
63,155,278 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS (Cost: $458,775,059) | 408,524,535 |
Security | Shares | Value | ||||||
PREFERRED STOCKS — 13.31% |
| |||||||
BRAZIL — 12.59% | ||||||||
AES Tiete SA | 27,600 | $ | 233,367 | |||||
Banco Bradesco SA | 662,408 | 7,721,406 | ||||||
Banco do Estado do Rio Grande do Sul SA Class B | 55,200 | 331,590 | ||||||
Bradespar SA | 82,800 | 859,278 | ||||||
Braskem SA Class A | 55,200 | 407,521 | ||||||
Centrais Eletricas Brasileiras SA Class B | 55,282 | 213,249 | ||||||
Companhia Brasileira de Distribuicao Grupo Pao de Acucar Class A | 27,656 | 1,136,860 | ||||||
Companhia de Bebidas das Americas | 220,873 | 7,730,369 | ||||||
Companhia Energetica de Minas Gerais | 165,689 | 1,296,406 | ||||||
Companhia Energetica de Sao Paulo Class B | 55,200 | 493,438 | ||||||
Companhia Paranaense de Energia Class B | 27,600 | 331,474 | ||||||
Gerdau SA | 276,000 | 1,991,166 | ||||||
Itau Unibanco Holding SA | 800,470 | 9,765,114 | ||||||
Itausa — Investimentos Itau SA | 909,033 | 3,196,835 | ||||||
Klabin SA | 165,600 | 857,537 | ||||||
Lojas Americanas SA | 138,070 | 878,184 | ||||||
Marcopolo SA | 165,600 | 462,554 | ||||||
Metalurgica Gerdau SA | 82,800 | 737,370 | ||||||
Oi SA | 220,899 | 328,951 | ||||||
Petroleo Brasileiro SA | 1,380,014 | 9,752,749 | ||||||
Suzano Papel e Celulose SA Class A | 82,800 | 327,410 | ||||||
Telefonica Brasil SA | 110,464 | 2,159,838 | ||||||
Usinas Siderurgicas de Minas Gerais SA Class A | 138,000 | 598,511 | ||||||
Vale SA Class A | 607,200 | 7,943,766 | ||||||
|
| |||||||
59,754,943 | ||||||||
RUSSIA — 0.72% | ||||||||
AK Transneft OAO | 552 | 1,268,011 | ||||||
Sberbank of Russia | 303,630 | 638,204 | ||||||
Surgutneftegas OJSC | 2,263,200 | 1,529,051 | ||||||
|
| |||||||
3,435,266 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS (Cost: $70,862,914) | 63,190,209 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 27 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI BRIC ETF
August 31, 2013
Security | Shares | Value | ||||||
RIGHTS — 0.01% | ||||||||
CHINA — 0.01% | ||||||||
China Merchants Bank Co. Ltd. Class Ha | 216,159 | $ | 49,061 | |||||
|
| |||||||
49,061 | ||||||||
|
| |||||||
TOTAL RIGHTS | 49,061 | |||||||
SHORT-TERM INVESTMENTS — 2.61% |
| |||||||
MONEY MARKET FUNDS — 2.61% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
SL Agency Shares | ||||||||
0.15%d,e,f | 10,724,080 | 10,724,080 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.13%d,e,f | 680,971 | 680,971 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.00%d,e | 996,059 | 996,059 | ||||||
|
| |||||||
12,401,110 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| 12,401,110 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| 484,164,915 | ||||||
Other Assets, Less Liabilities — (1.96)% |
| (9,303,974 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% | $ | 474,860,941 | ||||||
|
|
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.
28 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments
iSHARES® MSCI EMERGING MARKETS ASIA ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 98.35% |
| |||||||
CHINA — 31.11% |
| |||||||
Agile Property Holdings Ltd. | 14,000 | $ | 14,913 | |||||
Agricultural Bank of China Ltd. Class H | 300,000 | 128,830 | ||||||
Air China Ltd. Class H | 30,000 | 19,150 | ||||||
Aluminum Corp. of China Ltd. Class Ha | 34,000 | 11,400 | ||||||
Anhui Conch Cement Co. Ltd. Class H | 19,000 | 61,378 | ||||||
Anta Sports Products Ltd. | 18,000 | 23,259 | ||||||
AviChina Industry & Technology | 44,000 | 22,413 | ||||||
Bank of China Ltd. Class H | 1,074,000 | 451,517 | ||||||
Bank of Communications Co. | 128,000 | 84,515 | ||||||
BBMG Corp. Class H | 18,000 | 12,326 | ||||||
Beijing Capital International Airport Co. Ltd. Class H | 36,000 | 23,584 | ||||||
Beijing Enterprises Holdings Ltd. | 7,500 | 53,196 | ||||||
Belle International Holdings Ltd. | 64,000 | 88,476 | ||||||
Bosideng International Holdings Ltd. | 60,000 | 12,225 | ||||||
Brilliance China Automotive Holdings Ltd.a | 44,000 | 64,686 | ||||||
BYD Co. Ltd. Class Ha,b | 6,500 | 23,345 | ||||||
China Agri-Industries Holdings Ltd. | 33,800 | 15,866 | ||||||
China BlueChemical Ltd. Class H | 38,000 | 19,945 | ||||||
China CITIC Bank Corp. Ltd. Class H | 115,000 | 54,872 | ||||||
China Coal Energy Co. Class H | 64,000 | 37,718 | ||||||
China Communications Construction Co. Ltd. Class H | 58,000 | 44,429 | ||||||
China Communications Services Corp. Ltd. Class H | 36,000 | 24,188 | ||||||
China Construction Bank Corp. Class H | 1,033,000 | 756,659 | ||||||
China COSCO Holdings Co. Ltd. Class Ha | 44,000 | 20,200 | ||||||
China Everbright | 38,000 | 35,871 | ||||||
China Everbright Ltd. | 18,000 | 24,234 | ||||||
China Gas Holdings Ltd. | 26,000 | 27,125 | ||||||
China International Marine Containers (Group) Co. Ltd. Class H | 6,200 | 10,234 | ||||||
China Life Insurance Co. Ltd. Class H | 105,000 | 257,815 |
Security | Shares | Value | ||||||
China Longyuan Power Group Corp. Ltd. Class H | 44,000 | $ | 46,472 | |||||
China Mengniu Dairy Co. Ltd. | 22,000 | 93,057 | ||||||
China Merchants Bank Co. Ltd. Class H | 56,500 | 97,926 | ||||||
China Merchants Holdings (International) Co. Ltd. | 14,000 | 47,302 | ||||||
China Minsheng Banking Corp. Ltd. Class H | 67,500 | 72,598 | ||||||
China Mobile Ltd. | 85,500 | 919,017 | ||||||
China National Building Material Co. Ltd. Class H | 50,000 | 45,974 | ||||||
China Oilfield Services Ltd. Class H | 24,000 | 61,838 | ||||||
China Overseas Grand Oceans Group Ltd. | 6,000 | 7,846 | ||||||
China Overseas Land & Investment Ltd. | 58,000 | 172,779 | ||||||
China Pacific Insurance (Group) Co.Ltd. Class H | 39,000 | 130,262 | ||||||
China Petroleum & Chemical Corp. Class H | 352,600 | 254,183 | ||||||
China Railway Construction Corp. Ltd. Class H | 31,000 | 29,503 | ||||||
China Railway Group Ltd. Class H | 50,000 | 25,663 | ||||||
China Resources Cement Holdings Ltd. | 40,000 | 25,379 | ||||||
China Resources Enterprise Ltd. | 18,000 | 51,300 | ||||||
China Resources Gas Group Ltd. | 12,000 | 28,319 | ||||||
China Resources Land Ltd. | 28,000 | 76,550 | ||||||
China Resources Power Holdings Co. Ltd. | 26,000 | 59,682 | ||||||
China Shanshui Cement Group Ltd.b | 19,000 | 7,547 | ||||||
China Shenhua Energy Co. Ltd. Class H | 46,500 | 144,518 | ||||||
China Shipping Container Lines Co. Ltd. Class Ha | 51,000 | 13,022 | ||||||
China Southern Airlines Co. Ltd. Class H | 32,000 | 10,894 | ||||||
China State Construction International Holdings Ltd. | 28,000 | 45,208 | ||||||
China Taiping Insurance Holdings Co. Ltd.a | 14,000 | 19,174 | ||||||
China Telecom Corp. Ltd. Class H | 188,000 | 94,795 | ||||||
China Unicom (Hong Kong) Ltd. | 72,000 | 109,192 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 29 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS ASIA ETF
August 31, 2013
Security | Shares | Value | ||||||
Chongqing Rural Commercial Bank Co. Ltd. Class H | 41,000 | $ | 18,453 | |||||
CITIC Pacific Ltd.b | 23,000 | 26,606 | ||||||
CITIC Securities Co. Ltd. Class H | 15,000 | 29,209 | ||||||
CNOOC Ltd. | 251,000 | 498,478 | ||||||
COSCO Pacific Ltd. | 22,000 | 32,343 | ||||||
Country Garden Holdings Co. Ltd. | 67,964 | 42,508 | ||||||
CSR Corp Ltd. Class H | 18,000 | 13,092 | ||||||
Dah Chong Hong Holdings Ltd. | 18,000 | 13,835 | ||||||
Daphne International Holdings Ltd.b | 20,000 | 12,819 | ||||||
Datang International Power Generation Co. Ltd. Class H | 46,000 | 19,813 | ||||||
Dongfeng Motor Group Co. Ltd. Class H | 42,000 | 58,171 | ||||||
ENN Energy Holdings Ltd. | 12,000 | 59,579 | ||||||
Evergrande Real Estate Group Ltd.a,b | 112,000 | 47,663 | ||||||
Far East Horizon Ltd. | 22,000 | 13,306 | ||||||
Fosun International Ltd. | 25,500 | 18,580 | ||||||
Franshion Properties (China) Ltd. | 58,000 | 20,120 | ||||||
GCL-Poly Energy Holdings Ltd.a | 121,000 | 31,988 | ||||||
Geely Automobile Holdings Ltd. | 75,000 | 39,461 | ||||||
Golden Eagle Retail Group Ltd.b | 14,000 | 19,426 | ||||||
GOME Electrical Appliances Holdings Ltd.a | 139,000 | 14,340 | ||||||
Great Wall Motor Co. Ltd. Class H | 15,000 | 76,408 | ||||||
Greentown China Holdings Ltd. | 9,500 | 17,740 | ||||||
Guangdong Investment Ltd. | 40,000 | 33,117 | ||||||
Guangzhou Automobile Group Co. Ltd. Class H | 32,000 | 32,642 | ||||||
Guangzhou R&F Properties Co. Ltd. Class H | 12,400 | 20,245 | ||||||
Haier Electronics Group Co. Ltd. | 12,000 | 20,984 | ||||||
Haitong Securities Co. Ltd. Class H | 21,200 | 30,729 | ||||||
Hengan International Group Co. Ltd. | 10,500 | 115,028 | ||||||
Huaneng Power International Inc. Class H | 38,000 | 37,880 | ||||||
Industrial and Commercial Bank of China Ltd. Class H | 1,057,000 | 693,816 | ||||||
Intime Retail Group Co. Ltd.b | 13,500 | 15,808 | ||||||
Jiangsu Expressway Co. Ltd. Class H | 26,000 | 29,472 | ||||||
Jiangxi Copper Co. Ltd. Class H | 15,000 | 28,900 | ||||||
Kingboard Chemical Holdings Co. Ltd. | 9,700 | 21,090 | ||||||
Kunlun Energy Co. Ltd.b | 44,000 | 64,118 | ||||||
Lee & Man Paper Manufacturing Ltd. | 29,000 | 17,166 |
Security | Shares | Value | ||||||
Lenovo Group Ltd. | 96,000 | $ | 92,851 | |||||
Longfor Properties Co. Ltd. | 15,500 | 25,905 | ||||||
New China Life Insurance Co. Ltd. Class Ha | 8,500 | 23,184 | ||||||
Nine Dragons Paper (Holdings) Ltd. | 28,000 | 19,029 | ||||||
Parkson Retail Group Ltd. | 14,500 | 5,703 | ||||||
People’s Insurance Co. Group of China Ltd. Class H | 64,000 | 31,033 | ||||||
PetroChina Co. Ltd. Class H | 296,000 | 322,171 | ||||||
PICC Property and Casualty Co. Ltd. Class H | 40,000 | 55,710 | ||||||
Ping An Insurance (Group) Co. of China Ltd. Class H | 26,500 | 185,737 | ||||||
Poly Property Group Co. Ltd. | 41,000 | 24,798 | ||||||
Shandong Weigao Group Medical Polymer Co. Ltd. Class H | 20,000 | 18,854 | ||||||
Shanghai Electric Group Co. Ltd. Class H | 32,000 | 11,844 | ||||||
Shanghai Industrial Holdings Ltd. | 5,000 | 16,378 | ||||||
Shanghai Pharmaceuticals Holding Co. Ltd. Class H | 11,200 | 21,261 | ||||||
Shenzhou International Group Holdings Ltd. | 6,000 | 19,499 | ||||||
Shimao Property Holdings Ltd. | 19,000 | 48,416 | ||||||
Shougang Fushan Resources Group Ltd. | 54,000 | 18,106 | ||||||
Shui On Land Ltd. | 57,000 | 17,642 | ||||||
Sihuan Pharmaceutical Holdings Group Ltd. | 41,000 | 30,614 | ||||||
Sino Biopharmaceutical Ltd. | 36,000 | 25,720 | ||||||
Sino-Ocean Land Holdings Ltd.b | 42,500 | 25,157 | ||||||
Sinopec Shanghai Petrochemical Co. Ltd. Class Ha | 46,000 | 16,491 | ||||||
Sinopharm Group Co. Ltd. Class H | 16,000 | 40,111 | ||||||
SOHO China Ltd.b | 36,000 | 30,594 | ||||||
Sun Art Retail Group Ltd.b | 36,500 | 49,706 | ||||||
Tencent Holdings Ltd.b | 14,600 | 684,587 | ||||||
Tingyi (Cayman Islands) Holding Corp. | 28,000 | 69,328 | ||||||
Tsingtao Brewery Co. Ltd. Class H | 6,000 | 44,452 | ||||||
Uni-President China Holdings Ltd.b | 13,000 | 11,115 | ||||||
Want Want China Holdings Ltd.b | 89,000 | 131,990 | ||||||
Weichai Power Co. Ltd. Class H | 4,800 | 17,394 | ||||||
Wumart Stores Inc. Class H | 11,000 | 20,824 |
30 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS ASIA ETF
August 31, 2013
Security | Shares | Value | ||||||
Yanzhou Coal Mining Co. Ltd. Class Hb | 22,000 | $ | 19,576 | |||||
Yingde Gases Group Co. Ltd.b | 17,500 | 15,685 | ||||||
Yuexiu Property Co. Ltd. | 94,000 | 26,548 | ||||||
Zhaojin Mining Industry Co. Ltd. Class H | 19,500 | 18,483 | ||||||
Zhejiang Expressway Co. Ltd. Class H | 18,000 | 15,065 | ||||||
Zhongsheng Group Holdings Ltd.b | 12,000 | 15,908 | ||||||
Zhuzhou CSR Times Electric Co. Ltd. Class H | 9,000 | 28,377 | ||||||
Zijin Mining Group Co. Ltd. Class Hb | 84,000 | 21,123 | ||||||
Zoomlion Heavy Industry Science and Technology Co. Ltd. Class Hb | 19,000 | 14,799 | ||||||
ZTE Corp. Class Ha | 10,000 | 19,344 | ||||||
|
| |||||||
9,750,414 | ||||||||
INDIA — 8.92% |
| |||||||
ACC Ltd. | 651 | 9,499 | ||||||
Adani Enterprises Ltd. | 2,949 | 6,316 | ||||||
Adani Ports and Special Economic Zone Ltd. | 5,069 | 9,663 | ||||||
Aditya Birla Nuvo Ltd. | 531 | 9,130 | ||||||
Ambuja Cements Ltd. | 9,163 | 23,799 | ||||||
Apollo Hospitals Enterprise Ltd. | 1,043 | 13,648 | ||||||
Asian Paints Ltd. | 4,170 | 26,568 | ||||||
Axis Bank Ltd. | 36 | 454 | ||||||
Bajaj Auto Ltd. | 1,120 | 31,140 | ||||||
Bank of Baroda | 637 | 4,443 | ||||||
Bank of India | 2,030 | 4,372 | ||||||
Bharat Heavy Electricals Ltd. | 7,814 | 14,074 | ||||||
Bharat Petroleum Corp. Ltd. | 2,408 | 9,950 | ||||||
Bharti Airtel Ltd. | 6,900 | 31,236 | ||||||
Cairn India Ltd. | 6,504 | 31,570 | ||||||
Canara Bank Ltd. | 1,524 | 4,678 | ||||||
Cipla Ltd. | 4,649 | 29,339 | ||||||
Coal India Ltd. | 6,948 | 26,438 | ||||||
Dabur India Ltd. | 5,553 | 13,708 | ||||||
Divi’s Laboratories Ltd. | 527 | 7,931 | ||||||
DLF Ltd. | 5,506 | 10,817 | ||||||
Dr. Reddy’s Laboratories Ltd. | 1,395 | 48,412 | ||||||
GAIL (India) Ltd. | 4,276 | 19,121 | ||||||
GlaxoSmithKline Consumer Healthcare Ltd. | 144 | 8,862 | ||||||
Godrej Consumer Products Ltd. | 1,598 | 19,591 | ||||||
HCL Technologies Ltd. | 2,780 | 43,779 |
Security | Shares | Value | ||||||
HDFC Bank Ltd. | 22,614 | $ | 203,310 | |||||
Hero Motocorp Ltd. | 912 | 28,249 | ||||||
Hindalco Industries Ltd. | 13,708 | 21,795 | ||||||
Hindustan Unilever Ltd. | 6,887 | 65,821 | ||||||
Housing Development Finance Corp. Ltd. | 21,294 | 231,617 | ||||||
ICICI Bank Ltd. | 4,028 | 49,001 | ||||||
Idea Cellular Ltd.a | 9,219 | 22,311 | ||||||
Infosys Ltd. | 6,591 | 309,833 | ||||||
Infrastructure Development Finance Co. Ltd. | 1,754 | 2,137 | ||||||
ITC Ltd. | 32,411 | 151,434 | ||||||
Jaiprakash Associates Ltd. | 13,030 | 6,528 | ||||||
Jindal Steel & Power Ltd. | 4,894 | 16,433 | ||||||
JSW Steel Ltd. | 1,066 | 8,736 | ||||||
Kotak Mahindra Bank Ltd. | 5,076 | 50,675 | ||||||
Larsen & Toubro Ltd. | 5,137 | 56,334 | ||||||
LIC Housing Finance Ltd. | 4,303 | 10,805 | ||||||
Lupin Ltd. | 1,036 | 12,485 | ||||||
Mahindra & Mahindra Financial Services Ltd. | 2,553 | 9,765 | ||||||
Mahindra & Mahindra Ltd. | 4,145 | 49,138 | ||||||
NTPC Ltd. | 14,604 | 28,934 | ||||||
Oil & Natural Gas Corp. Ltd. | 10,646 | 40,146 | ||||||
Oil India Ltd. | 1,757 | 11,559 | ||||||
Piramal Enterprises Ltd. | 948 | 9,019 | ||||||
Power Finance Corp. Ltd. | 3,768 | 6,222 | ||||||
Power Grid Corp. of India Ltd. | 15,279 | 22,582 | ||||||
Ranbaxy Laboratories Ltd.a | 1,645 | 10,155 | ||||||
Reliance Capital Ltd. | 1,357 | 6,413 | ||||||
Reliance Communications Ltd. | 7,732 | 14,418 | ||||||
Reliance Industries Ltd. | 18,654 | 241,073 | ||||||
Reliance Infrastructure Ltd. | 1,636 | 8,476 | ||||||
Reliance Power Ltd.a | 8,059 | 8,258 | ||||||
Rural Electrification Corp. Ltd. | 4,226 | 10,800 | ||||||
Sesa Goa Ltd. | 10,716 | 30,614 | ||||||
Sesa Goa Ltd. New | 3,121 | 8,917 | ||||||
Shriram Transport Finance Co. Ltd. | 1,731 | 13,583 | ||||||
Siemens Ltd. | 1,020 | 6,680 | ||||||
State Bank of India | 1,863 | 42,830 | ||||||
Sun Pharmaceuticals Industries Ltd. | 9,438 | 74,453 | ||||||
Tata Consultancy Services Ltd. | 6,858 | 211,044 | ||||||
Tata Motors Ltd. | 10,144 | 45,945 | ||||||
Tata Power Co. Ltd. | 13,302 | 15,271 | ||||||
Tata Steel Ltd. | 3,889 | 16,128 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 31 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS ASIA ETF
August 31, 2013
Security | Shares | Value | ||||||
Titan Industries Ltd. | 2,537 | $ | 8,626 | |||||
Ultratech Cement Ltd. | 539 | 12,032 | ||||||
Unitech Ltd.a | 19,332 | 4,843 | ||||||
United Breweries Ltd. | 799 | 8,653 | ||||||
United Spirits Ltd. | 1,371 | 45,669 | ||||||
Wipro Ltd. | 7,188 | 52,613 | ||||||
Wockhardt Ltd. | 256 | 1,819 | ||||||
Zee Entertainment Enterprises Ltd. | 3,346 | 11,724 | ||||||
|
| |||||||
2,794,444 | ||||||||
INDONESIA — 4.14% |
| |||||||
PT Adaro Energy Tbk | 205,500 | 17,501 | ||||||
PT Astra Agro Lestari Tbk | 6,000 | 10,852 | ||||||
PT Astra International Tbk | 296,000 | 163,993 | ||||||
PT Bank Central Asia Tbk | 183,000 | 151,662 | ||||||
PT Bank Danamon Indonesia Tbk | 51,000 | 18,915 | ||||||
PT Bank Mandiri (Persero) Tbk | 138,500 | 90,050 | ||||||
PT Bank Negara Indonesia (Persero) Tbk | 106,500 | 37,548 | ||||||
PT Bank Rakyat Indonesia (Persero) Tbk | 140,000 | 84,615 | ||||||
PT Bukit Asam (Persero) Tbk | 9,000 | 9,973 | ||||||
PT Bumi Resources Tbka | 203,000 | 7,622 | ||||||
PT Bumi Serpong Damai Tbk | 86,000 | 10,317 | ||||||
PT Charoen Pokphand Indonesia Tbk | 105,500 | 32,606 | ||||||
PT Global Mediacom Tbk | 93,500 | 14,984 | ||||||
PT Gudang Garam Tbk | 8,500 | 29,540 | ||||||
PT Indo Tambangraya Megah Tbk | 8,000 | 23,480 | ||||||
PT Indocement Tunggal Prakarsa Tbk | 20,000 | 36,081 | ||||||
PT Indofood CBP Sukses Makmur Tbk | 20,000 | 18,315 | ||||||
PT Indofood Sukses Makmur Tbk | 66,000 | 39,286 | ||||||
PT Indosat Tbk | 23,000 | 8,688 | ||||||
PT Jasa Marga (Persero) Tbk | 33,000 | 16,470 | ||||||
PT Kalbe Farma Tbk | 379,000 | 46,854 | ||||||
PT Lippo Karawaci Tbk | 269,000 | 28,329 | ||||||
PT Matahari Department Store Tbka | 18,000 | 20,522 | ||||||
PT Media Nusantara Citra Tbka | 65,500 | 17,695 | ||||||
PT Perusahaan Gas Negara (Persero) Tbk | 152,500 | 75,412 | ||||||
PT Semen Gresik (Persero) Tbk | 32,000 | 36,923 | ||||||
PT Telekomunikasi Indonesia (Persero) Tbk | 662,500 | 133,471 | ||||||
PT Unilever Indonesia Tbk | 23,000 | 65,714 | ||||||
PT United Tractors Tbk | 25,000 | 36,172 |
Security | Shares | Value | ||||||
PT XL Axiata Tbk | 37,500 | $ | 15,367 | |||||
|
| |||||||
1,298,957 | ||||||||
MALAYSIA — 6.07% |
| |||||||
AirAsia Bhd | 16,000 | 12,567 | ||||||
Alliance Financial Group Bhd | 17,700 | 27,212 | ||||||
AMMB Holdings Bhd | 23,400 | 52,930 | ||||||
Astro Malaysia Holdings Bhd | 20,500 | 18,473 | ||||||
Axiata Group Bhd | 39,400 | 80,845 | ||||||
Berjaya Sports Toto Bhd | 7,268 | 8,828 | ||||||
British American Tobacco (Malaysia) Bhd | 1,800 | 34,052 | ||||||
Bumi Armada Bhda | 13,900 | 16,504 | ||||||
CIMB Group Holdings Bhd | 63,700 | 141,178 | ||||||
DiGi.Com Bhd | 45,700 | 65,390 | ||||||
Felda Global Ventures Holdings Bhd | 15,800 | 21,020 | ||||||
Gamuda Bhd | 25,900 | 35,246 | ||||||
Genting Bhd | 28,200 | 80,099 | ||||||
Genting Malaysia Bhd | 40,200 | 51,524 | ||||||
Genting Plantations Bhd | 3,900 | 11,268 | ||||||
Hong Leong Bank Bhd | 7,300 | 31,336 | ||||||
Hong Leong Financial Group Bhd | 4,000 | 17,657 | ||||||
IHH Healthcare Bhda | 28,800 | 35,159 | ||||||
IJM Corp. Bhd | 13,600 | 22,896 | ||||||
IOI Corp. Bhd | 38,800 | 63,786 | ||||||
Kuala Lumpur Kepong Bhd | 6,000 | 39,309 | ||||||
Lafarge Malaysia Bhd | 6,300 | 18,144 | ||||||
Malayan Banking Bhd | 60,400 | 183,880 | ||||||
Malaysia Airports Holdings Bhd | 7,700 | 16,362 | ||||||
Maxis Bhd | 34,200 | 71,216 | ||||||
MISC Bhda | 15,000 | 21,554 | ||||||
MMC Corp. Bhd | 14,000 | 10,655 | ||||||
Parkson Holdings Bhd | 8,800 | 8,975 | ||||||
Petronas Chemicals Group Bhd | 42,800 | 86,258 | ||||||
Petronas Dagangan Bhd | 4,200 | 35,546 | ||||||
Petronas Gas Bhd | 8,400 | 51,503 | ||||||
PPB Group Bhd | 7,700 | 31,271 | ||||||
Public Bank Bhd Foreign | 15,500 | 80,974 | ||||||
RHB Capital Bhd | 10,800 | 24,594 | ||||||
Sapurakencana Petroleum Bhda | 48,100 | 52,570 | ||||||
Sime Darby Bhd | 41,300 | 118,063 | ||||||
Telekom Malaysia Bhd | 15,700 | 25,858 | ||||||
Tenaga Nasional Bhd | 39,300 | 104,449 | ||||||
UEM Sunrise Bhd | 20,800 | 15,957 | ||||||
UMW Holdings Bhd | 7,600 | 29,107 | ||||||
YTL Corp. Bhd | 67,553 | 31,877 |
32 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS ASIA ETF
August 31, 2013
Security | Shares | Value | ||||||
YTL Power International Bhd | 34,300 | $ | 16,708 | |||||
|
| |||||||
1,902,800 | ||||||||
PHILIPPINES — 1.42% |
| |||||||
Aboitiz Equity Ventures Inc. | 26,440 | 27,270 | ||||||
Aboitiz Power Corp. | 28,100 | 20,476 | ||||||
Alliance Global Group Inc.a | 27,900 | 16,265 | ||||||
Ayala Corp. | 2,560 | 31,283 | ||||||
Ayala Land Inc. | 76,900 | 45,692 | ||||||
Bank of the Philippine Islands | 10,090 | 20,813 | ||||||
BDO Unibank Inc. | 19,840 | 32,918 | ||||||
DMCI Holdings Inc. | 12,000 | 12,982 | ||||||
Energy Development Corp. | 103,600 | 13,380 | ||||||
Globe Telecom Inc. | 490 | 16,711 | ||||||
International Container Terminal Services Inc. | 10,500 | 22,365 | ||||||
Jollibee Foods Corp. | 5,490 | 19,818 | ||||||
Metro Pacific Investments Corp. | 114,200 | 13,443 | ||||||
Metropolitan Bank & Trust Co. | 4,784 | 8,742 | ||||||
Philippine Long Distance Telephone Co. | 575 | 37,104 | ||||||
SM Investments Corp. | 2,973 | 44,662 | ||||||
SM Prime Holdings Inc. | 82,050 | 29,803 | ||||||
Universal Robina Corp. | 11,810 | 31,749 | ||||||
|
| |||||||
445,476 | ||||||||
SOUTH KOREA — 24.09% |
| |||||||
AmorePacific Corp. | 50 | 40,539 | ||||||
AmorePacific Group | 36 | 11,902 | ||||||
BS Financial Group Inc. | 1,950 | 25,033 | ||||||
Celltrion Inc. | 787 | 31,975 | ||||||
Cheil Industries Inc. | 569 | 45,262 | ||||||
Cheil Worldwide Inc.a | 710 | 15,223 | ||||||
CJ CheilJedang Corp. | 110 | 25,220 | ||||||
CJ Corp. | 230 | 22,067 | ||||||
Coway Co. Ltd. | 787 | 41,688 | ||||||
Daelim Industrial Co. Ltd. | 366 | 28,850 | ||||||
Daewoo Engineering & Construction Co. Ltd.a | 1,880 | 12,499 | ||||||
Daewoo International Corp. | 770 | 24,278 | ||||||
Daewoo Securities Co. Ltd. | 2,650 | 22,321 | ||||||
Daewoo Shipbuilding & Marine Engineering Co. Ltd. | 1,440 | 38,463 | ||||||
DGB Financial Group Inc. | 1,830 | 25,635 | ||||||
Dongbu Insurance Co. Ltd. | 520 | 22,064 | ||||||
Doosan Corp. | 148 | 18,466 |
Security | Shares | Value | ||||||
Doosan Heavy Industries & Construction Co. Ltd. | 802 | $ | 30,814 | |||||
Doosan Infracore Co. Ltd.a | 1,740 | 21,240 | ||||||
E-Mart Co. Ltd. | 310 | 57,529 | ||||||
GS Engineering & Construction Corp. | 576 | 18,369 | ||||||
GS Holdings Corp. | 773 | 39,484 | ||||||
Halla Visteon Climate Control Corp. | 510 | 17,505 | ||||||
Hana Financial Group Inc. | 3,658 | 115,337 | ||||||
Hankook Tire Co. Ltd. | 783 | 40,629 | ||||||
Hanwha Chemical Corp. | 1,430 | 22,802 | ||||||
Hanwha Corp. | 620 | 18,208 | ||||||
Hanwha Life Insurance Co. Ltd. | 3,140 | 18,386 | ||||||
Hite Jinro Co. Ltd. | 290 | 6,570 | ||||||
Hyosung Corp. | 376 | 24,049 | ||||||
Hyundai Department Store Co. Ltd. | 212 | 28,361 | ||||||
Hyundai Development Co. | 920 | 17,819 | ||||||
Hyundai Engineering & Construction Co. Ltd. | 977 | 50,520 | ||||||
Hyundai Glovis Co. Ltd. | 175 | 29,481 | ||||||
Hyundai Heavy Industries Co. Ltd. | 603 | 123,582 | ||||||
Hyundai Hysco Co. Ltd. | 390 | 15,248 | ||||||
Hyundai Marine & Fire Insurance Co. Ltd. | 840 | 22,399 | ||||||
Hyundai Merchant Marine Co. Ltd.a | 737 | 12,316 | ||||||
Hyundai Mipo Dockyard Co. Ltd. | 181 | 22,012 | ||||||
Hyundai Mobis Co. Ltd. | 976 | 245,308 | ||||||
Hyundai Motor Co. | 2,160 | 484,519 | ||||||
Hyundai Securities Co. Ltd. | 1,500 | 7,702 | ||||||
Hyundai Steel Co. | 809 | 53,494 | ||||||
Hyundai Wia Corp. | 196 | 30,281 | ||||||
Industrial Bank of Korea | 2,160 | 21,988 | ||||||
Kangwon Land Inc. | 1,470 | 36,682 | ||||||
KB Financial Group Inc. | 5,280 | 169,809 | ||||||
KCC Corp. | 65 | 24,506 | ||||||
Kia Motors Corp. | 3,810 | 230,649 | ||||||
Korea Aerospace Industries Ltd. | 770 | 18,729 | ||||||
Korea Electric Power Corp.a | 3,100 | 85,735 | ||||||
Korea Gas Corp. | 373 | 18,649 | ||||||
Korea Investment Holdings Co. Ltd. | 750 | 26,553 | ||||||
Korea Zinc Co. Ltd. | 137 | 39,432 | ||||||
Korean Air Lines Co. Ltd.a | 520 | 13,210 | ||||||
KT Corp. | 500 | 16,260 | ||||||
KT Corp. SP ADR | 197 | 3,166 | ||||||
KT&G Corp. | 1,568 | 102,551 | ||||||
Kumho Petro Chemical Co. Ltd. | 230 | 19,104 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 33 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS ASIA ETF
August 31, 2013
Security | Shares | Value | ||||||
LG Chem Ltd. | 665 | $ | 172,233 | |||||
LG Corp. | 1,408 | 84,983 | ||||||
LG Display Co. Ltd.a | 3,140 | 82,881 | ||||||
LG Electronics Inc. | 1,488 | 97,051 | ||||||
LG Household & Health Care Ltd. | 121 | 53,521 | ||||||
LG Innotek Co. Ltd.a | 173 | 13,138 | ||||||
LG Uplus Corp.a | 3,150 | 37,032 | ||||||
Lotte Chemical Corp. | 254 | 39,242 | ||||||
Lotte Confectionery Co. Ltd. | 5 | 6,810 | ||||||
Lotte Shopping Co. Ltd. | 161 | 49,386 | ||||||
LS Corp. | 363 | 23,120 | ||||||
LS Industrial Systems Co. Ltd. | 276 | 15,391 | ||||||
Mirae Asset Securities Co. Ltd. | 460 | 13,240 | ||||||
NCsoft Corp. | 234 | 34,150 | ||||||
NHN Corp. | 576 | 231,687 | ||||||
NHN Entertainment Corp.a | 265 | 25,933 | ||||||
OCI Co. Ltd. | 241 | 34,194 | ||||||
ORION Corp. | 54 | 47,965 | ||||||
POSCO | 938 | 272,515 | ||||||
S-Oil Corp. | 552 | 38,191 | ||||||
S1 Corp. | 313 | 17,905 | ||||||
Samsung C&T Corp. | 1,825 | 94,205 | ||||||
Samsung Card Co. Ltd. | 510 | 16,632 | ||||||
Samsung Electro-Mechanics Co. Ltd. | 741 | 54,471 | ||||||
Samsung Electronics Co. Ltd. | 1,573 | 1,938,529 | ||||||
Samsung Engineering Co. Ltd. | 431 | 32,692 | ||||||
Samsung Fire & Marine Insurance Co. Ltd. | 542 | 122,067 | ||||||
Samsung Heavy Industries Co. Ltd. | 2,490 | 88,604 | ||||||
Samsung Life Insurance Co. Ltd. | 809 | 77,252 | ||||||
Samsung SDI Co. Ltd. | 496 | 75,514 | ||||||
Samsung Securities Co. Ltd. | 681 | 27,545 | ||||||
Samsung Techwin Co. Ltd. | 309 | 18,483 | ||||||
Shinhan Financial Group Co. Ltd. | 5,660 | 208,544 | ||||||
Shinsegae Co. Ltd. | 112 | 20,230 | ||||||
SK C&C Co. Ltd. | 339 | 33,440 | ||||||
SK Holdings Co. Ltd. | 404 | 68,058 | ||||||
SK Hynix Inc.a | 7,580 | 192,906 | ||||||
SK Innovation Co. Ltd. | 871 | 109,851 | ||||||
SK Networks Co. Ltd. | 920 | 5,470 | ||||||
SK Telecom Co. Ltd. | 153 | 30,530 | ||||||
Woori Finance Holdings Co. Ltd. | 4,940 | 49,398 | ||||||
Woori Investment & Securities Co. Ltd. | 2,460 | 24,156 | ||||||
Yuhan Corp. | 95 | 16,774 | ||||||
�� |
|
| ||||||
7,548,391 |
Security | Shares | Value | ||||||
TAIWAN — 18.79% |
| |||||||
Acer Inc.a | 36,000 | $ | 24,000 | |||||
Advanced Semiconductor Engineering Inc. | 87,434 | 77,282 | ||||||
Advantech Co. Ltd. | 6,000 | 30,477 | ||||||
Asia Cement Corp. | 22,990 | 28,733 | ||||||
ASUSTeK Computer Inc. | 9,000 | 71,731 | ||||||
AU Optronics Corp.a | 124,000 | 48,896 | ||||||
Catcher Technology Co. Ltd. | 10,000 | 47,620 | ||||||
Cathay Financial Holding Co. Ltd. | 112,300 | 159,118 | ||||||
Chailease Holding Co. Ltd. | 7,700 | 15,670 | ||||||
Chang Hwa Commercial Bank Ltd. | 90,956 | 49,240 | ||||||
Cheng Shin Rubber Industry Co. Ltd. | 27,776 | 71,472 | ||||||
Cheng Uei Precision Industry Co. Ltd. | 7,059 | 14,083 | ||||||
Chicony Electronics Co. Ltd. | 3,522 | 8,145 | ||||||
China Airlines Ltd.a | 8,000 | 2,807 | ||||||
China Development Financial Holding Corp. | 176,200 | 48,342 | ||||||
China Life Insurance Co. Ltd. | 22,479 | 22,198 | ||||||
China Motor Co. Ltd. | 4,000 | 3,449 | ||||||
China Petrochemical Development Corp. | 25,800 | 11,941 | ||||||
China Steel Corp. | 177,046 | 149,686 | ||||||
Chunghwa Telecom Co. Ltd. | 50,000 | 158,064 | ||||||
Clevo Co. | 12,322 | 24,047 | ||||||
Compal Electronics Inc. | 57,000 | 38,382 | ||||||
CTBC Financial Holding Co. Ltd. | 184,218 | 116,042 | ||||||
CTCI Corp. | 10,000 | 16,742 | ||||||
Delta Electronics Inc. | 26,000 | 117,730 | ||||||
E.Sun Financial Holding Co. Ltd. | 62,680 | 39,693 | ||||||
Eclat Textile Co. Ltd. | 1,000 | 8,939 | ||||||
Epistar Corp. | 8,000 | 13,100 | ||||||
EVA Airways Corp.a | 30,000 | 15,940 | ||||||
Evergreen Marine Corp. Ltd.a | 24,000 | 13,554 | ||||||
Far Eastern Department Stores Co. Ltd. | 18,320 | 18,825 | ||||||
Far Eastern New Century Corp. | 41,656 | 44,754 | ||||||
Far EasTone Telecommunications Co. Ltd. | 19,000 | 48,064 | ||||||
Farglory Land Development Co. Ltd. | 8,000 | 14,463 | ||||||
Feng Hsin Iron & Steel Co. Ltd. | 3,000 | 5,293 | ||||||
First Financial Holding Co. Ltd. | 97,743 | 56,507 | ||||||
Formosa Chemicals & Fibre Corp. | 53,950 | 140,083 | ||||||
Formosa International Hotels Corp. | 1,100 | 12,149 | ||||||
Formosa Petrochemical Corp. | 16,000 | 40,636 |
34 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS ASIA ETF
August 31, 2013
Security | Shares | Value | ||||||
Formosa Plastics Corp. | 64,400 | $ | 160,545 | |||||
Formosa Taffeta Co. Ltd. | 15,000 | 13,735 | ||||||
Foxconn Technology Co. Ltd. | 11,115 | 28,341 | ||||||
Fubon Financial Holding Co. Ltd. | 100,396 | 137,554 | ||||||
Giant Manufacturing Co. Ltd. | 4,000 | 26,934 | ||||||
Highwealth Construction Corp. | 7,200 | 16,000 | ||||||
Hiwin Technologies Corp. | 3,193 | 20,914 | ||||||
Hon Hai Precision Industry Co. Ltd. | 144,000 | 390,743 | ||||||
Hotai Motor Co. Ltd. | 3,000 | 29,675 | ||||||
HTC Corp. | 10,000 | 52,298 | ||||||
Hua Nan Financial Holdings Co. Ltd. | 90,615 | 49,358 | ||||||
Innolux Corp.a | 99,019 | 49,634 | ||||||
Inventec Corp. | 40,980 | 33,346 | ||||||
Kinsus Interconnect Technology Corp. | 6,000 | 21,955 | ||||||
Largan Precision Co. Ltd. | 2,000 | 69,842 | ||||||
LCY Chemical Corp. | 9,199 | 10,928 | ||||||
Lite-On Technology Corp. | 31,324 | 53,071 | ||||||
MediaTek Inc. | 18,000 | 220,756 | ||||||
Mega Financial Holding Co. Ltd. | 105,170 | 80,307 | ||||||
Merida Industry Co. Ltd. | 5,000 | 32,749 | ||||||
MStar Semiconductor Inc. | 4,000 | 36,492 | ||||||
Nan Kang Rubber Tire Co. Ltd. | 2,879 | 3,367 | ||||||
Nan Ya Plastics Corp. | 75,090 | 147,046 | ||||||
Novatek Microelectronics Corp. Ltd. | 6,000 | 24,963 | ||||||
Pegatron Corp.a | 28,000 | 43,322 | ||||||
Pou Chen Corp. | 21,000 | 22,948 | ||||||
Powertech Technology Inc. | 4,000 | 7,312 | ||||||
President Chain Store Corp. | 9,000 | 62,858 | ||||||
Quanta Computer Inc. | 32,000 | 67,477 | ||||||
Radiant Opto-Electronics Corp. | 8,363 | 26,550 | ||||||
Realtek Semiconductor Corp. | 10,140 | 22,500 | ||||||
Ruentex Development Co. Ltd. | 12,633 | 24,950 | ||||||
Ruentex Industries Ltd. | 9,000 | 22,346 | ||||||
ScinoPharm Taiwan Ltd. | 4,160 | 11,650 | ||||||
Shin Kong Financial Holding Co. Ltd.a | 87,000 | 29,364 | ||||||
Siliconware Precision Industries Co. Ltd. | 41,000 | 46,036 | ||||||
Simplo Technology Co. Ltd. | 5,200 | 24,849 | ||||||
SinoPac Financial Holdings Co. Ltd. | 87,797 | 39,168 | ||||||
Standard Foods Corp. | 8,352 | 24,617 | ||||||
Synnex Technology International Corp. | 19,000 | 29,937 | ||||||
Taishin Financial Holdings Co. Ltd. | 88,549 | 38,172 | ||||||
Taiwan Business Bank Ltd.a | 54,254 | 15,683 |
Security | Shares | Value | ||||||
Taiwan Cement Corp. | 47,000 | $ | 62,040 | |||||
Taiwan Cooperative Financial Holding Co. Ltd. | 84,840 | 45,362 | ||||||
Taiwan Fertilizer Co. Ltd. | 6,000 | 13,775 | ||||||
Taiwan Glass Industry Corp. | 450 | 413 | ||||||
Taiwan Mobile Co. Ltd. | 22,000 | 79,400 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 348,000 | 1,168,741 | ||||||
Teco Electric and Machinery Co. Ltd. | 29,000 | 30,381 | ||||||
TPK Holding Co. Ltd. | 2,591 | 27,534 | ||||||
Transcend Information Inc. | 3,000 | 8,852 | ||||||
Tripod Technology Corp. | 8,000 | 15,853 | ||||||
TSRC Corp. | 600 | 1,019 | ||||||
U-Ming Marine Transport Corp. | 8,000 | 12,324 | ||||||
Uni-President Enterprises Co. | 60,039 | 109,346 | ||||||
Unimicron Technology Corp. | 17,000 | 13,805 | ||||||
United Microelectronics Corp. | 156,000 | 64,121 | ||||||
Vanguard International Semiconductor Corp. | 2,000 | 2,162 | ||||||
Walsin Lihwa Corp.a | 4,000 | 1,183 | ||||||
Wan Hai Lines Ltd. | 15,000 | 8,120 | ||||||
Wistron Corp. | 28,945 | 25,971 | ||||||
WPG Holdings Co. Ltd. | 20,000 | 22,991 | ||||||
Yang Ming Marine Transport Corp.a | 18,000 | 7,880 | ||||||
Yuanta Financial Holding Co. Ltd. | 89,000 | 44,612 | ||||||
Yulon Motor Co. Ltd. | 3,000 | 4,942 | ||||||
Zhen Ding Technology Holding Ltd. | 7,455 | 19,781 | ||||||
|
| |||||||
5,888,797 | ||||||||
THAILAND — 3.81% |
| |||||||
Advanced Information Service PCL NVDR | 14,100 | 105,126 | ||||||
Airports of Thailand PCL NVDR | 6,200 | 31,491 | ||||||
Bangkok Bank PCL Foreign | 12,000 | 67,474 | ||||||
Bangkok Bank PCL NVDR | 9,700 | 53,939 | ||||||
Bangkok Dusit Medical Services PCL NVDR | 4,900 | 19,637 | ||||||
Bank of Ayudhya PCL NVDR | 34,600 | 40,845 | ||||||
Banpu PCL NVDR | 2,600 | 22,293 | ||||||
BEC World PCL NVDR | 14,600 | 24,719 | ||||||
Central Pattana PCL NVDR | 19,200 | 22,069 | ||||||
Charoen Pokphand Foods PCL NVDR | 38,900 | 28,036 | ||||||
CP All PCL NVDR | 60,300 | 61,349 | ||||||
Glow Energy PCL NVDR | 7,400 | 14,425 | ||||||
Home Product Center PCL NVDR | 32,200 | 11,204 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 35 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS ASIA ETF
August 31, 2013
Security | Shares | Value | ||||||
Indorama Ventures PCL NVDR | 19,800 | $ | 10,641 | |||||
IRPC PCL NVDR | 135,600 | 12,553 | ||||||
Kasikornbank PCL Foreign | 17,300 | 85,452 | ||||||
Kasikornbank PCL NVDR | 7,300 | 36,058 | ||||||
Krung Thai Bank PCL NVDR | 48,950 | 25,091 | ||||||
Minor International PCL NVDR | 17,600 | 11,701 | ||||||
PTT Exploration & Production PCL NVDR | 21,010 | 108,672 | ||||||
PTT Global Chemical PCL NVDR | 21,900 | 46,943 | ||||||
PTT PCL NVDR | 13,300 | 135,107 | ||||||
Siam Cement PCL Foreign | 4,100 | 50,438 | ||||||
Siam Cement PCL NVDR | 2,100 | 25,638 | ||||||
Siam Commercial Bank PCL NVDR | 26,500 | 110,725 | ||||||
Thai Oil PCL NVDR | 12,300 | 20,825 | ||||||
True Corp. PCL NVDRa | 64,800 | 13,085 | ||||||
|
| |||||||
1,195,536 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $32,419,754) |
| 30,824,815 | ||||||
PREFERRED STOCKS — 1.13% |
| |||||||
SOUTH KOREA — 1.13% |
| |||||||
Hyundai Motor Co. Ltd. | 344 | 32,229 | ||||||
Hyundai Motor Co. Ltd. Series 2 | 567 | 57,208 | ||||||
LG Chem Ltd. | 100 | 11,892 | ||||||
Samsung Electronics Co. Ltd. | 304 | 251,679 | ||||||
|
| |||||||
353,008 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $270,593) |
| 353,008 | ||||||
RIGHTS — 0.01% |
| |||||||
CHINA — 0.01% |
| |||||||
China Merchants Bank Co. Ltd. Class Ha | 9,831 | 2,231 | ||||||
|
| |||||||
2,231 | ||||||||
|
| |||||||
TOTAL RIGHTS |
| |||||||
(Cost: $0) |
| 2,231 | ||||||
SHORT-TERM INVESTMENTS — 2.67% |
| |||||||
MONEY MARKET FUNDS — 2.67% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.15%c,d,e | 773,618 | 773,618 |
Security | Shares | Value | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
0.13%c,d,e | 49,124 | $ | 49,124 | |||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.00%c,d | 13,884 | 13,884 | ||||||
|
| |||||||
836,626 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $836,626) |
| 836,626 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $33,526,973) |
| 32,016,680 | ||||||
Other Assets, Less Liabilities — (2.16)% |
| (675,886 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 31,340,794 | |||||
|
|
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.
36 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments
iSHARES® MSCI EMERGING MARKETS CONSUMER DISCRETIONARY ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 96.87% |
| |||||||
BRAZIL — 5.13% |
| |||||||
Anhanguera Educacional Participacoes SA | 3,306 | $ | 19,261 | |||||
Companhia Hering SA | 1,200 | 16,108 | ||||||
Cyrela Brazil Realty SA Empreendimentos e Participacoes | 2,400 | 15,871 | ||||||
Estacio Participacoes SA | 1,700 | 12,558 | ||||||
Kroton Educacional SA | 1,600 | 21,538 | ||||||
Lojas Americanas SA | 1,100 | 6,288 | ||||||
Lojas Renner SA | 1,002 | 24,190 | ||||||
MRV Engenharia e Participacoes SA | 2,702 | 9,468 | ||||||
Multiplus SA | 300 | 3,289 | ||||||
|
| |||||||
128,571 | ||||||||
CHILE — 2.33% |
| |||||||
S.A.C.I. Falabella SA | 5,912 | 58,560 | ||||||
|
| |||||||
58,560 | ||||||||
CHINA — 12.16% |
| |||||||
Anta Sports Products Ltd. | 8,002 | 10,340 | ||||||
Belle International Holdings Ltd. | 38,001 | 52,534 | ||||||
Bosideng International Holdings Ltd. | 24,000 | 4,890 | ||||||
Brilliance China Automotive Holdings Ltd.a | 24,000 | 35,283 | ||||||
BYD Co. Ltd. Class Ha,b | 4,500 | 16,162 | ||||||
Dah Chong Hong Holdings Ltd. | 7,001 | 5,381 | ||||||
Daphne International Holdings Ltd.b | 8,001 | 5,128 | ||||||
Dongfeng Motor Group Co. Ltd. Class H | 22,001 | 30,472 | ||||||
Geely Automobile Holdings Ltd. | 35,001 | 18,416 | ||||||
Golden Eagle Retail Group Ltd. | 6,000 | 8,326 | ||||||
GOME Electrical Appliances Holdings Ltd.a | 88,000 | 9,079 | ||||||
Great Wall Motor Co. Ltd. Class H | 8,502 | 43,308 | ||||||
Guangzhou Automobile Group Co. Ltd. Class H | 18,001 | 18,362 | ||||||
Haier Electronics Group Co. Ltd. | 6,001 | 10,494 | ||||||
Intime Retail Group Co. Ltd. | 8,501 | 9,954 | ||||||
Parkson Retail Group Ltd. | 10,001 | 3,934 | ||||||
Shenzhou International Group Holdings Ltd. | 5,000 | 16,249 | ||||||
Zhongsheng Group Holdings Ltd. | 5,000 | 6,628 | ||||||
|
| |||||||
304,940 | ||||||||
INDIA — 4.39% |
| |||||||
Bajaj Auto Ltd. | 728 | 20,241 | ||||||
Hero Motocorp Ltd. | 563 | 17,439 |
Security | Shares | Value | ||||||
Mahindra & Mahindra Ltd. | 2,575 | $ | 30,526 | |||||
Tata Motors Ltd. | 6,364 | 28,824 | ||||||
Titan Industries Ltd. | 1,851 | 6,294 | ||||||
Zee Entertainment Enterprises Ltd. | 1,945 | 6,815 | ||||||
|
| |||||||
110,139 | ||||||||
INDONESIA — 4.95% |
| |||||||
PT Astra International Tbk | 165,500 | 91,692 | ||||||
PT Global Mediacom Tbk | 58,500 | 9,375 | ||||||
PT Matahari Department Store Tbka | 11,500 | 13,111 | ||||||
PT Media Nusantara Citra Tbka | 36,500 | 9,861 | ||||||
|
| |||||||
124,039 | ||||||||
MALAYSIA — 4.75% |
| |||||||
Astro Malaysia Holdings Bhd | 12,900 | 11,625 | ||||||
Berjaya Sports Toto Bhd | 4,932 | 5,991 | ||||||
Genting Bhd | 16,700 | 47,435 | ||||||
Genting Malaysia Bhd | 25,001 | 32,043 | ||||||
Parkson Holdings Bhd | 4,601 | 4,692 | ||||||
UMW Holdings Bhd | 4,501 | 17,238 | ||||||
|
| |||||||
119,024 | ||||||||
MEXICO — 4.89% |
| |||||||
El Puerto de Liverpool SA de CV Series C1 | 1,601 | 16,804 | ||||||
Grupo Televisa SAB de CV CPO | 21,102 | 105,952 | ||||||
|
| |||||||
122,756 | ||||||||
PHILIPPINES — 0.52% |
| |||||||
Jollibee Foods Corp. | 3,611 | 13,035 | ||||||
|
| |||||||
13,035 | ||||||||
POLAND — 0.36% |
| |||||||
Cyfrowy Polsat SAa | 1,472 | 9,147 | ||||||
|
| |||||||
9,147 | ||||||||
SOUTH AFRICA — 17.58% |
| |||||||
Foschini Group Ltd. (The) | 1,539 | 14,461 | ||||||
Imperial Holdings Ltd. | 1,515 | 30,804 | ||||||
Mr. Price Group Ltd. | 1,985 | 24,271 | ||||||
Naspers Ltd. Class N | 3,239 | 268,321 | ||||||
Steinhoff International Holdings Ltd.a | 10,801 | 30,966 | ||||||
Truworths International Ltd. | 3,699 | 29,625 | ||||||
Woolworths Holdings Ltd. | 6,381 | 42,501 | ||||||
|
| |||||||
440,949 | ||||||||
SOUTH KOREA — 31.44% |
| |||||||
Cheil Worldwide Inc.a | 780 | 16,724 | ||||||
Coway Co. Ltd. | 450 | 23,837 | ||||||
Halla Visteon Climate Control Corp. | 310 | 10,640 | ||||||
Hankook Tire Co. Ltd. | 622 | 32,275 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 37 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS CONSUMER DISCRETIONARY ETF
August 31, 2013
Security | Shares | Value | ||||||
Hyundai Department Store Co. Ltd. | 120 | $ | 16,053 | |||||
Hyundai Mobis Co. Ltd. | 559 | 140,499 | ||||||
Hyundai Motor Co. | 1,267 | 284,206 | ||||||
Hyundai Wia Corp. | 124 | 19,158 | ||||||
Kangwon Land Inc. | 802 | 20,013 | ||||||
Kia Motors Corp. | 2,161 | 130,822 | ||||||
LG Electronics Inc. | 869 | 56,678 | ||||||
Lotte Shopping Co. Ltd. | 90 | 27,607 | ||||||
Shinsegae Co. Ltd. | 56 | 10,115 | ||||||
|
| |||||||
788,627 | ||||||||
TAIWAN — 6.26% |
| |||||||
Cheng Shin Rubber Industry Co. Ltd. | 13,754 | 35,391 | ||||||
China Motor Co. Ltd. | 5,002 | 4,313 | ||||||
Eclat Textile Co. Ltd. | 1,000 | 8,939 | ||||||
Far Eastern Department Stores Co. Ltd. | 8,320 | 8,549 | ||||||
Formosa International Hotels Corp. | 1 | 11 | ||||||
Formosa Taffeta Co. Ltd. | 7,002 | 6,411 | ||||||
Giant Manufacturing Co. Ltd. | 2,001 | 13,474 | ||||||
Hotai Motor Co. Ltd. | 2,001 | 19,793 | ||||||
Merida Industry Co. Ltd. | 2,000 | 13,100 | ||||||
Nan Kang Rubber Tire Co. Ltd. | 4,939 | 5,777 | ||||||
Pou Chen Corp. | 18,000 | 19,669 | ||||||
Ruentex Industries Ltd. | 4,000 | 9,932 | ||||||
Yulon Motor Co. Ltd. | 7,001 | 11,534 | ||||||
|
| |||||||
156,893 | ||||||||
THAILAND — 1.20% |
| |||||||
BEC World PCL NVDR | 8,501 | 14,393 | ||||||
Home Product Center PCL NVDR | 20,500 | 7,133 | ||||||
Minor International PCL NVDR | 12,900 | 8,576 | ||||||
|
| |||||||
30,102 | ||||||||
TURKEY — 0.91% |
| |||||||
Arcelik AS | 2,053 | 10,375 | ||||||
Ford Otomotiv Sanayi AS | 600 | 7,506 | ||||||
Tofas Turk Otomobil Fabrikasi AS | 945 | 4,891 | ||||||
|
| |||||||
22,772 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $2,393,606) |
| 2,429,554 | ||||||
PREFERRED STOCKS — 2.86% |
| |||||||
BRAZIL — 0.89% |
| |||||||
Lojas Americanas SA | 3,501 | 22,268 | ||||||
|
| |||||||
22,268 |
Security | Shares | Value | ||||||
SOUTH KOREA — 1.97% |
| |||||||
Hyundai Motor Co. Ltd. | 190 | $ | 17,801 | |||||
Hyundai Motor Co. Ltd. Series 2 | 315 | 31,782 | ||||||
|
| |||||||
49,583 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $57,415) |
| 71,851 | ||||||
SHORT-TERM INVESTMENTS — 0.90% |
| |||||||
MONEY MARKET FUNDS — 0.90% |
| |||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.15%c,d,e | 21,233 | 21,233 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.13%c,d,e | 1,348 | 1,348 | ||||||
|
| |||||||
22,581 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $22,581) |
| 22,581 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $2,473,602) |
| 2,523,986 | ||||||
Other Assets, Less Liabilities — (0.63)% |
| (15,873 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 2,508,113 | |||||
|
|
CPO — Certificates of Participation (Ordinary)
NVDR — Non-Voting 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.
38 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments
iSHARES® MSCI EMERGING MARKETS ENERGY CAPPED ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 89.91% |
| |||||||
BRAZIL — 6.63% |
| |||||||
Cosan SA Industria e Comercio | 200 | $ | 3,498 | |||||
Petroleo Brasileiro SA | 12,102 | 81,301 | ||||||
Ultrapar Participacoes SA | 1,601 | 34,954 | ||||||
|
| |||||||
119,753 | ||||||||
CHILE — 1.06% |
| |||||||
Empresas Copec SA | 1,442 | 19,175 | ||||||
|
| |||||||
19,175 | ||||||||
CHINA — 22.56% |
| |||||||
China Coal Energy Co. Class H | 21,000 | 12,376 | ||||||
China Oilfield Services Ltd. Class H | 8,001 | 20,615 | ||||||
China Petroleum & Chemical Corp. Class H | 110,402 | 79,587 | ||||||
China Shenhua Energy Co. Ltd. Class H | 16,500 | 51,281 | ||||||
CNOOC Ltd. | 76,001 | 150,936 | ||||||
Kunlun Energy Co. Ltd. | 2,000 | 2,914 | ||||||
PetroChina Co. Ltd. Class H | 74,000 | 80,543 | ||||||
Yanzhou Coal Mining Co. Ltd. Class Ha | 10,002 | 8,900 | ||||||
|
| |||||||
407,152 | ||||||||
COLOMBIA — 2.75% |
| |||||||
Ecopetrol SA SP ADR | 1,110 | 49,573 | ||||||
|
| |||||||
49,573 | ||||||||
HUNGARY — 0.84% |
| |||||||
MOL Hungarian Oil and Gas PLC | 213 | 15,076 | ||||||
|
| |||||||
15,076 | ||||||||
INDIA — 6.33% |
| |||||||
Bharat Petroleum Corp. Ltd. | 1,313 | 5,425 | ||||||
Cairn India Ltd. | 1,141 | 5,538 | ||||||
Coal India Ltd. | 2,708 | 10,304 | ||||||
Oil & Natural Gas Corp. Ltd. | 3,898 | 14,700 | ||||||
Oil India Ltd. | 456 | 3,000 | ||||||
Reliance Industries Ltd. | 5,823 | 75,253 | ||||||
|
| |||||||
114,220 | ||||||||
INDONESIA — 1.23% |
| |||||||
PT Adaro Energy Tbk | 75,502 | 6,430 | ||||||
PT Bukit Asam (Persero) Tbk | 5,000 | 5,540 | ||||||
PT Bumi Resources Tbkb | 77,500 | 2,910 | ||||||
PT Indo Tambangraya Megah Tbk | 2,500 | 7,338 | ||||||
|
| |||||||
22,218 | ||||||||
MALAYSIA — 2.29% |
| |||||||
Bumi Armada Bhdb | 6,801 | 8,075 | ||||||
Petronas Dagangan Bhd | 1,701 | 14,396 |
Security | Shares | Value | ||||||
Sapurakencana Petroleum Bhdb | 17,201 | $ | 18,799 | |||||
|
| |||||||
41,270 | ||||||||
POLAND — 2.56% |
| |||||||
Grupa Lotos SAb | 519 | 6,106 | ||||||
Polski Koncern Naftowy Orlen SA | 1,544 | 21,455 | ||||||
Polskie Gornictwo Naftowe i Gazownictwo SA | 9,757 | 18,623 | ||||||
|
| |||||||
46,184 | ||||||||
RUSSIA — 27.01% |
| |||||||
Gazprom OAO | 50,150 | 198,624 | ||||||
LUKOIL OAO | 2,152 | 124,359 | ||||||
NovaTek OAO SP GDRc | 422 | 50,556 | ||||||
Rosneft Oil Co. OJSC | 5,572 | 41,214 | ||||||
Surgutneftegas OJSC | 34,002 | 26,619 | ||||||
Tatneft OAO Class S | 6,551 | 41,061 | ||||||
TMK OAO SP GDRc | 401 | 5,161 | ||||||
|
| |||||||
487,594 | ||||||||
SOUTH AFRICA — 6.06% |
| |||||||
Exxaro Resources Ltd. | 281 | 4,456 | ||||||
Sasol Ltd. | 2,231 | 104,966 | ||||||
|
| |||||||
109,422 | ||||||||
SOUTH KOREA — 3.68% |
| |||||||
GS Holdings Corp. | 272 | 13,893 | ||||||
S-Oil Corp. | 238 | 16,466 | ||||||
SK Innovation Co. Ltd. | 286 | 36,071 | ||||||
|
| |||||||
66,430 | ||||||||
TAIWAN — 0.84% |
| |||||||
Formosa Petrochemical Corp. | 6,000 | 15,238 | ||||||
|
| |||||||
15,238 | ||||||||
THAILAND — 5.33% |
| |||||||
Banpu PCL NVDR | 750 | 6,430 | ||||||
IRPC PCL NVDR | 61,600 | 5,703 | ||||||
PTT Exploration & Production PCL NVDR | 6,633 | 34,309 | ||||||
PTT PCL NVDR | 4,102 | 41,670 | ||||||
Thai Oil PCL NVDR | 4,801 | 8,128 | ||||||
|
| |||||||
96,240 | ||||||||
TURKEY — 0.74% |
| |||||||
Turkiye Petrol Rafinerileri AS | 695 | 13,366 | ||||||
|
| |||||||
13,366 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $2,114,679) |
| 1,622,911 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 39 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS ENERGY CAPPED ETF
August 31, 2013
Security | Shares | Value | ||||||
PREFERRED STOCKS — 9.20% |
| |||||||
BRAZIL — 6.85% |
| |||||||
Petroleo Brasileiro SA | 17,500 | $ | 123,675 | |||||
|
| |||||||
123,675 | ||||||||
RUSSIA — 2.35% |
| |||||||
AK Transneft OAO | 8 | 18,377 | ||||||
Surgutneftegas OJSC | 35,502 | 23,985 | ||||||
|
| |||||||
42,362 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $290,387) |
| 166,037 | ||||||
SHORT-TERM INVESTMENTS — 0.69% |
| |||||||
MONEY MARKET FUNDS — 0.69% |
| |||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.15%d,e,f | 983 | 983 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.13%d,e,f | 62 | 62 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.00%d,e | 11,428 | 11,428 | ||||||
|
| |||||||
12,473 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $12,473) |
| 12,473 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $2,417,539) |
| 1,801,421 | ||||||
Other Assets, Less Liabilities — 0.20% |
| 3,695 | ||||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 1,805,116 | |||||
|
|
NVDR — Non-Voting Depositary Receipts
SP ADR — Sponsored American Depositary Receipts
SP GDR — Sponsored Global Depositary Receipts
a | All or a portion of this security represents a security on loan. See Note 5. |
b | Non-income earning security. |
c | 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.
40 | 2013 iSHARES ANNAUL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments
iSHARES® MSCI EMERGING MARKETS GROWTH ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 94.27% |
| |||||||
BRAZIL — 6.84% |
| |||||||
ALL — America Latina Logistica SA | 1,400 | $ | 5,436 | |||||
Anhanguera Educacional Participacoes SA | 1,200 | 6,991 | ||||||
Arteris SA | 400 | 3,621 | ||||||
Banco Bradesco SA | 1,680 | 22,332 | ||||||
BB Seguridade Participacoes SA | 1,800 | 14,568 | ||||||
BR Malls Participacoes SA | 1,200 | 9,137 | ||||||
BR Properties SA | 600 | 4,581 | ||||||
BRF — Brasil Foods SA | 1,800 | 41,797 | ||||||
CCR SA | 2,600 | 18,976 | ||||||
CETIP SA — Mercados Organizados | 600 | 5,906 | ||||||
Cielo SA | 1,080 | 26,537 | ||||||
Companhia de Bebidas das Americas | 400 | 14,080 | ||||||
Companhia de Saneamento Basico do Estado de Sao Paulo | 1,000 | 8,241 | ||||||
Companhia Hering SA | 400 | 5,369 | ||||||
Companhia Siderurgica Nacional SA | 600 | 2,125 | ||||||
Cosan SA Industria e Comercio | 400 | 6,997 | ||||||
Cyrela Brazil Realty SA Empreendimentos e Participacoes | 800 | 5,290 | ||||||
Duratex SA | 840 | 4,269 | ||||||
EcoRodovias Infraestrutura e Logistica SA | 400 | 2,574 | ||||||
Embraer SA | 1,200 | 9,884 | ||||||
Estacio Participacoes SA | 500 | 3,693 | ||||||
Fibria Celulose SAa | 800 | 9,282 | ||||||
Hypermarcas SA | 1,000 | 6,832 | ||||||
JBS SA | 800 | 2,477 | ||||||
Kroton Educacional SA | 600 | 8,077 | ||||||
Localiza Rent A Car SA | 410 | 5,373 | ||||||
Lojas Americanas SA | 400 | 2,287 | ||||||
Lojas Renner SA | 400 | 9,657 | ||||||
MPX Energia SAa | 200 | 412 | ||||||
MPX Energia SA Newa | 42 | 91 | ||||||
Multiplan Empreendimentos Imobiliarios SA | 200 | 4,033 | ||||||
Multiplus SA | 200 | 2,193 | ||||||
Natura Cosmeticos SA | 400 | 7,533 | ||||||
Odontoprev SA | 800 | 2,965 | ||||||
Qualicorp SAa | 400 | 3,138 | ||||||
Raia Drogasil SA | 600 | 4,260 | ||||||
Souza Cruz SA | 1,000 | 10,517 |
Security | Shares | Value | ||||||
TIM Participacoes SA | 1,200 | $ | 4,735 | |||||
Totvs SA | 400 | 6,293 | ||||||
Ultrapar Participacoes SA | 1,000 | 21,832 | ||||||
WEG SA | 800 | 9,423 | ||||||
|
| |||||||
343,814 | ||||||||
CHILE — 1.45% | ||||||||
Banco de Credito e Inversiones | 57 | 2,725 | ||||||
CAP SA | 222 | 4,739 | ||||||
Cencosud SA | 3,256 | 13,154 | ||||||
Colbun SA | 22,990 | 5,922 | ||||||
Compania Cervecerias Unidas SA | 342 | 4,579 | ||||||
Empresas Copec SA | 716 | 9,521 | ||||||
LATAM Airlines Group SA | 762 | 9,582 | ||||||
S.A.C.I. Falabella SA | 2,274 | 22,525 | ||||||
|
| |||||||
72,747 | ||||||||
CHINA — 19.89% | ||||||||
Air China Ltd. Class H | 4,000 | 2,553 | ||||||
Aluminum Corp. of China Ltd. Class Ha | 16,000 | 5,365 | ||||||
Anhui Conch Cement Co. Ltd. Class Hb | 4,000 | 12,922 | ||||||
AviChina Industry & Technology Co. Ltd. Class H | 8,000 | 4,075 | ||||||
BBMG Corp. Class H | 4,000 | 2,739 | ||||||
Beijing Capital International Airport Co. Ltd. Class H | 8,000 | 5,241 | ||||||
Beijing Enterprises Holdings Ltd. | 2,000 | 14,186 | ||||||
Belle International Holdings Ltd. | 14,000 | 19,354 | ||||||
Bosideng International Holdings Ltd. | 12,000 | 2,445 | ||||||
Brilliance China Automotive Holdings Ltd.a | 8,000 | 11,761 | ||||||
BYD Co. Ltd. Class Ha,b | 2,000 | 7,183 | ||||||
China Everbright International Ltd. | 8,000 | 7,552 | ||||||
China Gas Holdings Ltd. | 8,000 | 8,346 | ||||||
China Life Insurance Co. Ltd. Class H | 22,000 | 54,018 | ||||||
China Longyuan Power Group Corp. Ltd. Class H | 8,000 | 8,449 | ||||||
China Mengniu Dairy Co. Ltd.b | 4,000 | 16,919 | ||||||
China Merchants Bank Co. Ltd. Class H | 12,000 | 20,799 | ||||||
China Minsheng Banking Corp. Ltd. Class H | 7,000 | 7,529 | ||||||
China National Building Material Co. Ltd. Class H | 4,000 | 3,678 | ||||||
China Oilfield Services Ltd. Class H | 4,000 | 10,306 | ||||||
China Overseas Grand Oceans Group Ltd. | 2,000 | 2,615 | ||||||
China Overseas Land & Investment Ltd. | 12,000 | 35,747 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 41 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS GROWTH ETF
August 31, 2013
Security | Shares | Value | ||||||
China Pacific Insurance (Group) Co. Ltd. Class Hb | 8,000 | $ | 26,720 | |||||
China Railway Construction Corp. Ltd. Class Hb | 6,000 | 5,710 | ||||||
China Railway Group Ltd. Class H | 12,000 | 6,159 | ||||||
China Resources Gas Group Ltd. | 4,000 | 9,440 | ||||||
China Resources Land Ltd. | 4,000 | 10,936 | ||||||
China Resources Power Holdings Co. Ltd. | 4,000 | 9,182 | ||||||
China Shenhua Energy Co. Ltd. Class H | 10,000 | 31,079 | ||||||
China State Construction International Holdings Ltd. | 4,000 | 6,458 | ||||||
China Taiping Insurance Holdings Co. Ltd.a | 4,000 | 5,478 | ||||||
China Unicom (Hong Kong) Ltd. | 12,000 | 18,199 | ||||||
CNOOC Ltd. | 52,000 | 103,270 | ||||||
Country Garden Holdings Co. Ltd. | 14,000 | 8,756 | ||||||
CSR Corp Ltd. Class H | 6,000 | 4,364 | ||||||
Dah Chong Hong Holdings Ltd.b | 4,000 | 3,074 | ||||||
Daphne International Holdings Ltd. | 4,000 | 2,564 | ||||||
Dongfeng Motor Group Co. Ltd. Class H | 8,000 | 11,080 | ||||||
ENN Energy Holdings Ltd. | 4,000 | 19,860 | ||||||
Evergrande Real Estate Group Ltd.a,b | 8,000 | 3,405 | ||||||
Far East Horizon Ltd. | 4,000 | 2,419 | ||||||
Geely Automobile Holdings Ltd. | 10,000 | 5,262 | ||||||
Golden Eagle Retail Group Ltd. | 2,000 | 2,775 | ||||||
Great Wall Motor Co. Ltd. Class H | 3,000 | 15,282 | ||||||
Greentown China Holdings Ltd. | 2,000 | 3,735 | ||||||
Guangdong Investment Ltd. | 8,000 | 6,623 | ||||||
Guangzhou R&F Properties Co. Ltd. Class H | 3,200 | 5,224 | ||||||
Haier Electronics Group Co. Ltd. | 2,000 | 3,497 | ||||||
Haitong Securities Co. Ltd. Class H | 2,400 | 3,479 | ||||||
Hengan International Group Co. Ltd. | 2,000 | 21,910 | ||||||
Huaneng Power International Inc. Class H | 8,000 | 7,975 | ||||||
Intime Retail Group Co. Ltd. | 3,000 | 3,513 | ||||||
Kunlun Energy Co. Ltd. | 8,000 | 11,658 | ||||||
Lee & Man Paper Manufacturing Ltd. | 4,000 | 2,368 | ||||||
Lenovo Group Ltd. | 20,000 | 19,344 | ||||||
Longfor Properties Co. Ltd. | 4,000 | 6,685 | ||||||
New China Life Insurance Co. Ltd. Class Ha | 1,800 | 4,910 | ||||||
Nine Dragons Paper (Holdings) Ltd. | 6,000 | 4,078 | ||||||
People’s Insurance Co. Group of China Ltd. Class H | 14,000 | 6,788 |
Security | Shares | Value | ||||||
PICC Property and Casualty Co. Ltd. Class H | 8,000 | $ | 11,142 | |||||
Ping An Insurance (Group) Co. of China Ltd. Class Hb | 5,000 | 35,045 | ||||||
Poly Property Group Co. Ltd. | 4,000 | 2,419 | ||||||
Shandong Weigao Group Medical Polymer Co. Ltd. Class H | 8,000 | 7,542 | ||||||
Shanghai Pharmaceuticals Holding Co. Ltd. Class H | 1,600 | 3,037 | ||||||
Shenzhou International Group Holdings Ltd. | 2,000 | 6,500 | ||||||
Shimao Property Holdings Ltd. | 4,000 | 10,193 | ||||||
Sihuan Pharmaceutical Holdings Group Ltd. | 6,000 | 4,480 | ||||||
Sino Biopharmaceutical Ltd. | 8,000 | 5,715 | ||||||
Sino-Ocean Land Holdings Ltd.b | 7,000 | 4,143 | ||||||
Sinopec Shanghai Petrochemical Co. Ltd. Class Ha | 8,000 | 2,868 | ||||||
Sinopharm Group Co. Ltd. Class H | 3,200 | 8,022 | ||||||
Sun Art Retail Group Ltd. | 7,000 | 9,533 | ||||||
Tencent Holdings Ltd. | 3,000 | 140,669 | ||||||
Tingyi (Cayman Islands) Holding Corp. | 4,000 | 9,904 | ||||||
Uni-President China Holdings Ltd. | 4,000 | 3,420 | ||||||
Want Want China Holdings Ltd. | 18,000 | 26,695 | ||||||
Wumart Stores Inc. Class H | 2,000 | 3,786 | ||||||
Yingde Gases Group Co. Ltd. | 3,000 | 2,689 | ||||||
Zhaojin Mining Industry Co. Ltd. Class H | 3,000 | 2,844 | ||||||
Zhongsheng Group Holdings Ltd. | 2,000 | 2,651 | ||||||
Zhuzhou CSR Times Electric Co. Ltd. Class H | 2,000 | 6,306 | ||||||
ZTE Corp. Class Ha,b | 1,600 | 3,095 | ||||||
|
| |||||||
999,739 | ||||||||
COLOMBIA — 1.06% | ||||||||
Almacenes Exito SA | 404 | 6,671 | ||||||
Bancolombia SA SP ADR | 470 | 25,883 | ||||||
Ecopetrol SA SP ADR | 328 | 14,649 | ||||||
Isagen SA ESPa | 3,778 | 5,979 | ||||||
|
| |||||||
53,182 | ||||||||
CZECH REPUBLIC — 0.35% | ||||||||
CEZ AS | 232 | 5,348 | ||||||
Komercni Banka AS | 56 | 12,031 | ||||||
|
| |||||||
17,379 | ||||||||
HUNGARY — 0.22% | ||||||||
MOL Hungarian Oil and Gas PLC | 116 | 8,210 |
42 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS GROWTH ETF
August 31, 2013
Security | Shares | Value | ||||||
OTP Bank PLC | 156 | $ | 2,891 | |||||
|
| |||||||
11,101 | ||||||||
INDIA — 5.92% | ||||||||
Adani Enterprises Ltd. | 172 | 368 | ||||||
Adani Ports and Special Economic Zone Ltd. | 1,216 | 2,318 | ||||||
Apollo Hospitals Enterprise Ltd. | 113 | 1,479 | ||||||
Asian Paints Ltd. | 800 | 5,097 | ||||||
Bharti Airtel Ltd. | 1,708 | 7,732 | ||||||
Cipla Ltd. | 972 | 6,134 | ||||||
Dabur India Ltd. | 1,222 | 3,017 | ||||||
Divi’s Laboratories Ltd. | 190 | 2,859 | ||||||
Dr. Reddy’s Laboratories Ltd. | 290 | 10,064 | ||||||
GlaxoSmithKline Consumer Healthcare Ltd. | 32 | 1,969 | ||||||
Godrej Consumer Products Ltd. | 338 | 4,144 | ||||||
HCL Technologies Ltd. | 624 | 9,827 | ||||||
HDFC Bank Ltd. | 4,364 | 39,234 | ||||||
Hindustan Unilever Ltd. | 1,402 | 13,399 | ||||||
Housing Development Finance Corp. Ltd. | 4,254 | 46,271 | ||||||
ICICI Bank Ltd. | 778 | 9,465 | ||||||
Idea Cellular Ltd.a | 2,042 | 4,942 | ||||||
ITC Ltd. | 6,298 | 29,426 | ||||||
Kotak Mahindra Bank Ltd. | 814 | 8,127 | ||||||
Larsen & Toubro Ltd. | 445 | 4,880 | ||||||
Lupin Ltd. | 344 | 4,146 | ||||||
Ranbaxy Laboratories Ltd.a | 198 | 1,222 | ||||||
Reliance Power Ltd.a | 1,648 | 1,689 | ||||||
Sun Pharmaceuticals Industries Ltd. | 1,748 | 13,789 | ||||||
Tata Consultancy Services Ltd. | 1,350 | 41,544 | ||||||
Tata Motors Ltd. | 1,098 | 4,973 | ||||||
Titan Industries Ltd. | 656 | 2,231 | ||||||
Ultratech Cement Ltd. | 96 | 2,143 | ||||||
United Breweries Ltd. | 263 | 2,848 | ||||||
United Spirits Ltd. | 270 | 8,994 | ||||||
Wockhardt Ltd. | 80 | 568 | ||||||
Zee Entertainment Enterprises Ltd. | 698 | 2,446 | ||||||
|
| |||||||
297,345 | ||||||||
INDONESIA — 2.58% | ||||||||
PT Astra International Tbk | 19,000 | 10,527 | ||||||
PT Bank Central Asia Tbk | 36,000 | 29,835 | ||||||
PT Bank Mandiri (Persero) Tbk | 18,000 | 11,703 | ||||||
PT Bumi Resources Tbka | 43,000 | 1,614 | ||||||
PT Bumi Serpong Damai Tbk | 24,000 | 2,879 | ||||||
PT Charoen Pokphand Indonesia Tbk | 21,000 | 6,490 |
Security | Shares | Value | ||||||
PT Global Mediacom Tbk | 18,000 | $ | 2,885 | |||||
PT Indocement Tunggal Prakarsa Tbk | 4,000 | 7,216 | ||||||
PT Indofood CBP Sukses Makmur Tbk | 4,000 | 3,663 | ||||||
PT Indosat Tbk | 6,000 | 2,266 | ||||||
PT Jasa Marga (Persero) Tbk | 6,000 | 2,995 | ||||||
PT Kalbe Farma Tbk | 70,000 | 8,654 | ||||||
PT Lippo Karawaci Tbk | 61,000 | 6,424 | ||||||
PT Media Nusantara Citra Tbka | 16,000 | 4,322 | ||||||
PT Perusahaan Gas Negara (Persero) Tbk | 15,000 | 7,418 | ||||||
PT Semen Gresik (Persero) Tbk | 8,000 | 9,231 | ||||||
PT Unilever Indonesia Tbk | 4,000 | 11,429 | ||||||
|
| |||||||
129,551 | ||||||||
MALAYSIA — 3.78% | ||||||||
AirAsia Bhd | 2,800 | 2,199 | ||||||
Astro Malaysia Holdings Bhd | 5,000 | 4,506 | ||||||
Axiata Group Bhd | 7,200 | 14,774 | ||||||
British American Tobacco (Malaysia) Bhd | 200 | 3,784 | ||||||
Bumi Armada Bhda | 3,600 | 4,274 | ||||||
CIMB Group Holdings Bhd | 12,800 | 28,369 | ||||||
DiGi.Com Bhd | 9,200 | 13,164 | ||||||
Felda Global Ventures Holdings Bhd | 3,400 | 4,523 | ||||||
Gamuda Bhd | 4,500 | 6,124 | ||||||
Genting Bhd | 5,800 | 16,474 | ||||||
Genting Plantations Bhd | 800 | 2,311 | ||||||
Hong Leong Bank Bhd | 1,600 | 6,868 | ||||||
IJM Corp. Bhd | 2,000 | 3,367 | ||||||
Kuala Lumpur Kepong Bhd | 1,600 | 10,482 | ||||||
Maxis Bhd | 3,000 | 6,247 | ||||||
MMC Corp. Bhd | 2,200 | 1,674 | ||||||
Petronas Dagangan Bhd | 600 | 5,078 | ||||||
Petronas Gas Bhd | 1,800 | 11,036 | ||||||
Public Bank Bhd Foreign | 3,000 | 15,672 | ||||||
Sapurakencana Petroleum Bhda | 10,400 | 11,367 | ||||||
Telekom Malaysia Bhd | 2,200 | 3,623 | ||||||
UEM Sunrise Bhd | 4,800 | 3,683 | ||||||
UMW Holdings Bhd | 1,800 | 6,894 | ||||||
YTL Corp. Bhd | 7,800 | 3,681 | ||||||
|
| |||||||
190,174 | ||||||||
MEXICO — 5.33% | ||||||||
America Movil SAB de CV Series L | 55,800 | 53,744 | ||||||
Arca Continental SAB de CV | 1,000 | 6,335 | ||||||
Coca-Cola FEMSA SAB de CV Series L | 800 | 9,537 | ||||||
El Puerto de Liverpool SA de CV Series C1 | 600 | 6,297 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 43 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS GROWTH ETF
August 31, 2013
Security | Shares | Value | ||||||
Fomento Economico Mexicano SAB de CV BD Units | 2,800 | $ | 26,524 | |||||
Genomma Lab Internacional SAB de CV Series Ba,b | 2,200 | 4,719 | ||||||
Grupo Bimbo SAB de CV Series A | 4,800 | 13,966 | ||||||
Grupo Carso SAB de CV Series A1 | 1,000 | 4,942 | ||||||
Grupo Financiero Banorte SAB de CV Series O | 7,000 | 43,771 | ||||||
Grupo Financiero Inbursa SAB de CV Series O | 4,200 | 8,959 | ||||||
Grupo Mexico SAB de CV Series B | 5,400 | 15,449 | ||||||
Grupo Televisa SAB de CV CPO | 2,600 | 13,055 | ||||||
Kimberly-Clark de Mexico SAB de CV Series A | 1,600 | 4,537 | ||||||
Mexichem SAB de CV | 3,200 | 12,750 | ||||||
Minera Frisco SAB de CV Series A1a | 1,800 | 4,892 | ||||||
OHL Mexico SAB de CVa | 800 | 2,082 | ||||||
Wal-Mart de Mexico SAB de CV Series V | 15,200 | 36,475 | ||||||
|
| |||||||
268,034 | ||||||||
PERU — 0.48% | ||||||||
Credicorp Ltd. | 200 | 24,248 | ||||||
|
| |||||||
24,248 | ||||||||
PHILIPPINES — 0.94% | ||||||||
Aboitiz Equity Ventures Inc. | 2,600 | 2,682 | ||||||
Ayala Corp. | 220 | 2,688 | ||||||
Ayala Land Inc. | 16,000 | 9,507 | ||||||
DMCI Holdings Inc. | 2,000 | 2,164 | ||||||
Energy Development Corp. | 21,000 | 2,712 | ||||||
International Container Terminal Services Inc. | 2,400 | 5,112 | ||||||
Jollibee Foods Corp. | 460 | 1,661 | ||||||
SM Investments Corp. | 508 | 7,631 | ||||||
SM Prime Holdings Inc. | 20,400 | 7,410 | ||||||
Universal Robina Corp. | 2,200 | 5,914 | ||||||
|
| |||||||
47,481 | ||||||||
POLAND — 1.90% | ||||||||
Alior Bank SAa | 118 | 3,335 | ||||||
Bank Handlowy w Warszawie SA | 136 | 4,297 | ||||||
Bank Millennium SAa | 1,094 | 2,247 | ||||||
Bank Pekao SA | 350 | 18,809 | ||||||
Bank Zachodni WBK SA | 78 | 7,514 | ||||||
BRE Bank SA | 40 | 5,460 | ||||||
Cyfrowy Polsat SAa | 644 | 4,002 | ||||||
Eurocash SA | 200 | 3,206 | ||||||
Grupa Azoty SA | 124 | 2,796 |
Security | Shares | Value | ||||||
Kernel Holding SAa | 102 | $ | 1,493 | |||||
Polskie Gornictwo Naftowe i Gazownictwo SA | 5,246 | 10,013 | ||||||
Powszechna Kasa Oszczednosci Bank Polski SAa | 954 | 11,288 | ||||||
Powszechny Zaklad Ubezpieczen SA | 154 | 20,831 | ||||||
|
| |||||||
95,291 | ||||||||
RUSSIA — 6.03% | ||||||||
LSR Group OJSC SP GDRc | 648 | 2,722 | ||||||
Magnit OJSC SP GDRc | 748 | 41,514 | ||||||
MegaFon OAO SP GDRc | 264 | 8,923 | ||||||
MMC Norilsk Nickel OJSC | 162 | 21,258 | ||||||
Mobile TeleSystems OJSC SP ADR | 1,474 | 31,190 | ||||||
NovaTek OAO SP GDRc | 260 | 31,148 | ||||||
Rosneft Oil Co. OJSC | 1,940 | 14,349 | ||||||
Rostelecom OJSC | 3,420 | 10,322 | ||||||
RusHydro OJSC | 242,000 | 3,928 | ||||||
Sberbank of Russia | 31,040 | 82,235 | ||||||
Sistema JSFC SP GDRc | 166 | 3,675 | ||||||
Surgutneftegas OJSC | 7,000 | 5,480 | ||||||
Tatneft OAO Class S | 4,100 | 25,698 | ||||||
TMK OAO SP GDRc | 182 | 2,342 | ||||||
Uralkali OJSC | 3,800 | 18,085 | ||||||
|
| |||||||
302,869 | ||||||||
SOUTH AFRICA — 7.43% | ||||||||
Anglo American Platinum Ltd.a | 52 | 2,081 | ||||||
AngloGold Ashanti Ltd. | 764 | 10,444 | ||||||
Aspen Pharmacare Holdings Ltd.a | 810 | 18,665 | ||||||
Bidvest Group Ltd. | 840 | 20,734 | ||||||
Discovery Ltd. | 1,046 | 8,644 | ||||||
Foschini Group Ltd. (The) | 602 | 5,657 | ||||||
Life Healthcare Group Holdings Ltd. | 2,630 | 9,091 | ||||||
Massmart Holdings Ltd. | 318 | 4,891 | ||||||
Mediclinic International Ltd. | 500 | 3,599 | ||||||
Mr. Price Group Ltd. | 692 | 8,461 | ||||||
MTN Group Ltd. | 4,848 | 88,927 | ||||||
Naspers Ltd. Class N | 1,150 | 95,267 | ||||||
Netcare Ltd. | 2,136 | 4,843 | ||||||
Northam Platinum Ltd.a | 698 | 2,842 | ||||||
Pick n Pay Stores Ltd. | 754 | 2,819 | ||||||
PPC Ltd. | 1,210 | 3,501 | ||||||
Sanlam Ltd. | 5,518 | 24,802 | ||||||
Shoprite Holdings Ltd. | 1,234 | 19,419 | ||||||
SPAR Group Ltd. (The) | 516 | 5,807 | ||||||
Tiger Brands Ltd. | 298 | 8,228 |
44 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS GROWTH ETF
August 31, 2013
Security | Shares | Value | ||||||
Truworths International Ltd. | 1,282 | $ | 10,267 | |||||
Woolworths Holdings Ltd. | 2,182 | 14,533 | ||||||
|
| |||||||
373,522 | ||||||||
SOUTH KOREA — 14.42% | ||||||||
AmorePacific Corp. | 8 | 6,486 | ||||||
AmorePacific Group | 6 | 1,984 | ||||||
Celltrion Inc. | 174 | 7,069 | ||||||
Cheil Industries Inc. | 34 | 2,705 | ||||||
Cheil Worldwide Inc.a | 300 | 6,432 | ||||||
CJ CheilJedang Corp. | 24 | 5,502 | ||||||
CJ Corp. | 44 | 4,221 | ||||||
Coway Co. Ltd. | 114 | 6,039 | ||||||
Daewoo International Corp. | 100 | 3,153 | ||||||
Doosan Infracore Co. Ltd.a | 260 | 3,174 | ||||||
E-Mart Co. Ltd. | 60 | 11,135 | ||||||
Halla Visteon Climate Control Corp. | 80 | 2,746 | ||||||
Hankook Tire Co. Ltd. | 231 | 11,987 | ||||||
Hyundai Department Store Co. Ltd. | 20 | 2,676 | ||||||
Hyundai Glovis Co. Ltd. | 36 | 6,065 | ||||||
Hyundai Hysco Co. Ltd. | 100 | 3,910 | ||||||
Hyundai Merchant Marine Co. Ltd.a | 103 | 1,721 | ||||||
Hyundai Wia Corp. | 44 | 6,798 | ||||||
Kangwon Land Inc. | 120 | 2,994 | ||||||
Kia Motors Corp. | 280 | 16,951 | ||||||
Korea Aerospace Industries Ltd. | 100 | 2,432 | ||||||
Korean Air Lines Co. Ltd.a | 100 | 2,540 | ||||||
LG Display Co. Ltd.a | 700 | 18,477 | ||||||
LG Electronics Inc. | 110 | 7,174 | ||||||
LG Household & Health Care Ltd. | 26 | 11,500 | ||||||
LG Innotek Co. Ltd.a | 30 | 2,278 | ||||||
LG Uplus Corp.a | 720 | 8,464 | ||||||
Lotte Chemical Corp. | 46 | 7,107 | ||||||
Lotte Confectionery Co. Ltd. | 2 | 2,724 | ||||||
Lotte Shopping Co. Ltd. | 18 | 5,521 | ||||||
LS Corp. | 50 | 3,185 | ||||||
LS Industrial Systems Co. Ltd. | 46 | 2,565 | ||||||
NCsoft Corp. | 44 | 6,421 | ||||||
NHN Corp. | 80 | 32,179 | ||||||
NHN Entertainment Corp.a | 37 | 3,634 | ||||||
OCI Co. Ltd. | 50 | 7,094 | ||||||
ORION Corp. | 10 | 8,883 | ||||||
S1 Corp. | 65 | 3,718 | ||||||
Samsung C&T Corp. | 172 | 8,879 | ||||||
Samsung Electro-Mechanics Co. Ltd. | 170 | 12,497 | ||||||
Samsung Electronics Co. Ltd. | 318 | 391,896 |
Security | Shares | Value | ||||||
Samsung SDI Co. Ltd. | 98 | $ | 14,920 | |||||
Samsung Techwin Co. Ltd. | 110 | 6,580 | ||||||
SK Hynix Inc.a | 1,520 | 38,683 | ||||||
Yuhan Corp. | 9 | 1,589 | ||||||
|
| |||||||
724,688 | ||||||||
TAIWAN — 11.75% | ||||||||
Acer Inc.a | 4,000 | 2,667 | ||||||
AU Optronics Corp.a | 12,000 | 4,732 | ||||||
Cathay Financial Holding Co. Ltd. | 26,000 | 36,839 | ||||||
Chailease Holding Co. Ltd. | 2,200 | 4,477 | ||||||
Cheng Shin Rubber Industry Co. Ltd. | 6,900 | 17,755 | ||||||
China Airlines Ltd.a | 12,000 | 4,211 | ||||||
China Development Financial Holding Corp. | 24,000 | 6,585 | ||||||
China Life Insurance Co. Ltd. | 6,089 | 6,013 | ||||||
Clevo Co. | 2,080 | 4,059 | ||||||
Delta Electronics Inc. | 6,000 | 27,168 | ||||||
E.Sun Financial Holding Co. Ltd. | 13,200 | 8,359 | ||||||
Epistar Corp. | 2,000 | 3,275 | ||||||
EVA Airways Corp.a | 6,000 | 3,188 | ||||||
Far Eastern Department Stores Co. Ltd. | 4,000 | 4,110 | ||||||
Far EasTone Telecommunications Co. Ltd. | 4,000 | 10,119 | ||||||
Formosa Petrochemical Corp. | 4,000 | 10,159 | ||||||
Foxconn Technology Co. Ltd. | 2,100 | 5,354 | ||||||
Giant Manufacturing Co. Ltd. | 2,000 | 13,467 | ||||||
Hiwin Technologies Corp. | 51 | 334 | ||||||
Hon Hai Precision Industry Co. Ltd. | 12,000 | 32,562 | ||||||
MediaTek Inc. | 4,000 | 49,057 | ||||||
Nan Kang Rubber Tire Co. Ltd. | 2,234 | 2,613 | ||||||
Pegatron Corp.a | 6,000 | 9,283 | ||||||
President Chain Store Corp. | 2,000 | 13,968 | ||||||
Radiant Opto-Electronics Corp. | 2,060 | 6,540 | ||||||
Ruentex Industries Ltd. | 2,000 | 4,966 | ||||||
Standard Foods Corp. | 2,300 | 6,779 | ||||||
Taiwan Fertilizer Co. Ltd. | 2,000 | 4,592 | ||||||
Taiwan Mobile Co. Ltd. | 4,000 | 14,436 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 72,000 | 241,809 | ||||||
Uni-President Enterprises Co. | 12,720 | 23,166 | ||||||
Vanguard International Semiconductor Corp. | 2,000 | 2,162 | ||||||
Yang Ming Marine Transport Corp.a | 6,000 | 2,627 | ||||||
Yulon Motor Co. Ltd. | 2,000 | 3,295 | ||||||
|
| |||||||
590,726 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 45 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS GROWTH ETF
August 31, 2013
Security | Shares | Value | ||||||
THAILAND — 2.36% | ||||||||
Advanced Information Service PCL NVDR | 1,200 | $ | 8,947 | |||||
Airports of Thailand PCL NVDR | 1,400 | 7,111 | ||||||
Bangkok Dusit Medical Services PCL NVDR | 1,000 | 4,007 | ||||||
Bank of Ayudhya PCL NVDR | 3,600 | 4,250 | ||||||
BEC World PCL NVDR | 3,200 | 5,418 | ||||||
Central Pattana PCL NVDR | 4,400 | 5,057 | ||||||
Charoen Pokphand Foods PCL NVDR | 5,600 | 4,036 | ||||||
CP All PCL NVDR | 12,800 | 13,023 | ||||||
Glow Energy PCL NVDR | 1,400 | 2,729 | ||||||
Home Product Center PCL NVDR | 9,200 | 3,201 | ||||||
Indorama Ventures PCL NVDR | 4,200 | 2,257 | ||||||
IRPC PCL NVDR | 30,000 | 2,777 | ||||||
Kasikornbank PCL Foreign | 3,400 | 16,794 | ||||||
Kasikornbank PCL NVDR | 2,000 | 9,879 | ||||||
Minor International PCL NVDR | 4,800 | 3,191 | ||||||
Siam Cement PCL Foreign | 1,200 | 14,762 | ||||||
Siam Commercial Bank PCL NVDR | 2,400 | 10,028 | ||||||
True Corp. PCL NVDRa | 5,600 | 1,131 | ||||||
|
| |||||||
118,598 | ||||||||
TURKEY — 1.54% | ||||||||
Akbank TAS | 3,174 | 10,558 | ||||||
Anadolu Efes Biracilik ve Malt Sanayii AS | 602 | 6,956 | ||||||
Arcelik AS | 666 | 3,366 | ||||||
BIM Birlesik Magazalar AS | 620 | 11,407 | ||||||
Coca-Cola Icecek AS | 196 | 4,596 | ||||||
Emlak Konut Gayrimenkul Yatirim Ortakligi AS | 2,072 | 2,419 | ||||||
Koza Altin Isletmeleri AS | 106 | 1,669 | ||||||
TAV Havalimanlari Holding AS | 512 | 2,776 | ||||||
Turk Hava Yollari AO | 586 | 1,817 | ||||||
Turkiye Garanti Bankasi AS | 6,594 | 22,775 | ||||||
Turkiye Halk Bankasi AS | 1,089 | 6,946 | ||||||
Yapi ve Kredi Bankasi AS | 1,192 | 2,374 | ||||||
|
| |||||||
77,659 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $4,948,224) | 4,738,148 | |||||||
PREFERRED STOCKS — 5.33% | ||||||||
BRAZIL — 4.45% | ||||||||
Banco Bradesco SA | 2,270 | 26,460 | ||||||
Braskem SA Class A | 600 | 4,430 |
Security | Shares | Value | ||||||
Companhia Brasileira de Distribuicao Grupo Pao de Acucar Class A | 400 | $ | 16,443 | |||||
Companhia de Bebidas das Americas | 2,000 | 69,998 | ||||||
Itau Unibanco Holding SA | 7,220 | 88,078 | ||||||
Klabin SA | 1,400 | 7,250 | ||||||
Lojas Americanas SA | 1,200 | 7,633 | ||||||
Marcopolo SA | 1,200 | 3,352 | ||||||
|
| |||||||
223,644 | ||||||||
CHILE — 0.20% | ||||||||
Embotelladora Andina SA Class B | 632 | 3,222 | ||||||
Sociedad Quimica y Minera de Chile SA Series B | 262 | 6,794 | ||||||
|
| |||||||
10,016 | ||||||||
COLOMBIA — 0.14% | ||||||||
Grupo Aval Acciones y Valores SA | 10,148 | 7,231 | ||||||
|
| |||||||
7,231 | ||||||||
RUSSIA — 0.14% | ||||||||
Sberbank of Russia | 3,400 | 7,147 | ||||||
|
| |||||||
7,147 | ||||||||
SOUTH KOREA — 0.40% | ||||||||
Samsung Electronics Co. Ltd. | 24 | 19,869 | ||||||
|
| |||||||
19,869 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS | ||||||||
(Cost: $338,054) | 267,907 | |||||||
RIGHTS — 0.01% | ||||||||
CHINA — 0.01% | ||||||||
China Merchants Bank Co. Ltd. Class Ha | 2,088 | 474 | ||||||
|
| |||||||
474 | ||||||||
|
| |||||||
TOTAL RIGHTS | ||||||||
(Cost: $0) | 474 | |||||||
SHORT-TERM INVESTMENTS — 1.66% |
| |||||||
MONEY MARKET FUNDS — 1.66% | ||||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.15%d,e,f | 78,627 | 78,627 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.13%d,e,f | 4,993 | 4,993 | ||||||
|
| |||||||
83,620 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $83,620) | 83,620 | |||||||
|
|
46 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS GROWTH ETF
August 31, 2013
Value | ||||||
TOTAL INVESTMENTS | $ | 5,090,149 | ||||
Other Assets, Less Liabilities — (1.27)% | (63,871 | ) | ||||
|
| |||||
NET ASSETS — 100.00% | $ | 5,026,278 | ||||
|
|
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 | 47 |
Table of Contents
Consolidated Schedule of Investments
iSHARES® MSCI EMERGING MARKETS MINIMUM VOLATILITY ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 95.48% |
| |||||||
BRAZIL — 5.42% |
| |||||||
CCR SA | 1,465,300 | $ | 10,694,496 | |||||
Cielo SA | 399,620 | 9,819,032 | ||||||
Companhia de Bebidas das Americas | 133,200 | 4,688,783 | ||||||
CPFL Energia SA | 1,281,800 | 10,514,513 | ||||||
EcoRodovias Infraestrutura e Logistica SA | 2,308,800 | 14,859,768 | ||||||
EDP Energias do Brasil SA | 2,930,700 | 13,191,355 | ||||||
Natura Cosmeticos SA | 399,600 | 7,525,699 | ||||||
Souza Cruz SA | 1,642,800 | 17,276,628 | ||||||
Totvs SA | 799,200 | 12,573,650 | ||||||
Tractebel Energia SA | 1,598,400 | 22,995,659 | ||||||
Transmissora Alianca de Energia Eletrica SA | 754,800 | 6,985,361 | ||||||
Ultrapar Participacoes SA | 88,800 | 1,938,718 | ||||||
|
| |||||||
133,063,662 | ||||||||
CHILE — 5.13% |
| |||||||
AES Gener SA | 7,028,578 | 4,542,713 | ||||||
Aguas Andinas SA Series A | 17,369,397 | 11,987,623 | ||||||
Banco de Chile | 105,463,410 | 15,077,726 | ||||||
Banco de Credito e Inversiones | 181,805 | 8,692,650 | ||||||
Colbun SA | 62,229,495 | 16,029,734 | ||||||
CorpBanca SA | 1,898,900,510 | 18,052,665 | ||||||
E.CL SA | 801,017 | 1,046,315 | ||||||
Empresa Nacional de Electricidad SA | 10,660,357 | 14,546,963 | ||||||
Empresa Nacional de Telecomunicaciones SA | 655,543 | 10,391,689 | ||||||
Empresas CMPC SA | 526,330 | 1,554,399 | ||||||
LATAM Airlines Group SA | 1,121,796 | 14,106,721 | ||||||
S.A.C.I. Falabella SA | 339,602 | 3,363,848 | ||||||
Vina Concha y Toro SA | 3,562,104 | 6,494,915 | ||||||
|
| |||||||
125,887,961 | ||||||||
CHINA — 14.94% |
| |||||||
Agricultural Bank of China Ltd. Class H | 19,536,000 | 8,389,415 | ||||||
Bank of China Ltd. Class H | 53,307,000 | 22,410,608 | ||||||
Bank of Communications Co. Ltd. Class H | 3,108,000 | 2,052,120 | ||||||
Beijing Enterprises Holdings Ltd. | 444,000 | 3,149,180 |
Security | Shares | Value | ||||||
China CITIC Bank Corp. Ltd. Class H | 5,328,000 | $ | 2,542,247 | |||||
China Construction Bank Corp. Class H | 24,310,000 | 17,806,768 | ||||||
China Life Insurance Co. Ltd. Class H | 1,776,000 | 4,360,755 | ||||||
China Mengniu Dairy Co. Ltd. | 3,108,000 | 13,146,394 | ||||||
China Minsheng Banking Corp. Ltd. Class H | 1,555,500 | 1,672,969 | ||||||
China Mobile Ltd. | 3,330,000 | 35,793,292 | ||||||
China Pacific Insurance (Group) Co. Ltd. Class H | 972,400 | 3,247,854 | ||||||
China Petroleum & Chemical Corp. Class H | 18,142,000 | 13,078,224 | ||||||
China Resources Enterprise Ltd. | 888,000 | 2,530,795 | ||||||
China Resources Gas Group Ltd. | 10,608,000 | 25,034,355 | ||||||
China Resources Power Holdings Co. Ltd. | 4,440,000 | 10,191,891 | ||||||
China Telecom Corp. Ltd. Class H | 9,768,000 | 4,925,317 | ||||||
China Vanke Co. Ltd. Class B | 1,465,222 | 2,951,456 | ||||||
ENN Energy Holdings Ltd. | 166,000 | 824,177 | ||||||
Guangdong Investment Ltd.a | 15,096,000 | 12,498,236 | ||||||
Hengan International Group Co. Ltd.a | 2,442,000 | 26,752,283 | ||||||
Industrial and Commercial Bank of China Ltd. Class H | 24,420,000 | 16,029,325 | ||||||
Inner Mongolia Yitai Coal Co. Ltd. Class B | 15,027,966 | 31,107,890 | ||||||
Jiangsu Expressway Co. Ltd. Class H | 15,096,000 | 17,112,071 | ||||||
Kunlun Energy Co. Ltd.a | 5,328,000 | 7,764,160 | ||||||
PetroChina Co. Ltd. Class H | 5,180,000 | 5,637,986 | ||||||
Shandong Weigao Group Medical Polymer Co. Ltd. Class H | 1,776,000 | 1,674,218 | ||||||
Shanghai Pharmaceuticals Holding Co. Ltd. Class H | 7,844,300 | 14,890,655 | ||||||
Sihuan Pharmaceutical Holdings Group Ltd. | 3,536,000 | 2,640,235 | ||||||
Tencent Holdings Ltd. | 310,800 | 14,573,259 | ||||||
Tingyi (Cayman Islands) Holding Corp.a | 7,104,000 | 17,589,601 | ||||||
Tsingtao Brewery Co. Ltd. Class H | 1,058,000 | 7,838,401 |
48 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS MINIMUM VOLATILITY ETF
August 31, 2013
Security | Shares | Value | ||||||
Wumart Stores Inc. Class H | 888,000 | $ | 1,681,089 | |||||
Zhejiang Expressway Co. Ltd. Class H | 17,760,000 | 14,864,129 | ||||||
|
| |||||||
366,761,355 | ||||||||
COLOMBIA — 1.50% |
| |||||||
Almacenes Exito SA | 262,283 | 4,331,204 | ||||||
Corporacion Financiera Colombiana SA | 252,096 | 5,022,134 | ||||||
Corporacion Financiera Colombiana SA NVSb | 4,347 | 83,052 | ||||||
Ecopetrol SA | 9,083,340 | 20,332,686 | ||||||
Grupo Argos SA | 616,735 | 6,955,227 | ||||||
|
| |||||||
36,724,303 | ||||||||
CZECH REPUBLIC — 0.76% |
| |||||||
Telefonica O2 Czech Republic AS | 1,256,843 | 18,728,096 | ||||||
|
| |||||||
18,728,096 | ||||||||
EGYPT — 0.84% |
| |||||||
Commercial International Bank (Egypt) SAE | 3,430,617 | 17,340,560 | ||||||
National Societe Generale Bank SAE | 285,244 | 1,044,504 | ||||||
Telecom Egypt Co. SAE | 1,212,398 | 2,162,502 | ||||||
|
| |||||||
20,547,566 | ||||||||
INDIA — 1.97% |
| |||||||
Bharat Petroleum Corp. Ltd. | 1,015,287 | 4,195,147 | ||||||
Cipla Ltd. | 2,164,040 | 13,656,674 | ||||||
Coal India Ltd. | 1,686,265 | 6,416,332 | ||||||
Dr. Reddy’s Laboratories Ltd. | 164,917 | 5,723,296 | ||||||
Lupin Ltd. | 233,724 | 2,816,574 | ||||||
Piramal Enterprises Ltd. | 470,304 | 4,474,188 | ||||||
Sun Pharmaceuticals Industries Ltd. | 1,411,024 | 11,131,008 | ||||||
|
| |||||||
48,413,219 | ||||||||
INDONESIA — 6.56% |
| |||||||
PT Astra Agro Lestari Tbk | 3,108,000 | 5,621,154 | ||||||
PT Bank Central Asia Tbk | 36,907,000 | 30,586,845 | ||||||
PT Bank Danamon Indonesia Tbk | 20,424,000 | 7,574,835 | ||||||
PT Bank Mandiri (Persero) Tbk | 11,322,000 | 7,361,374 | ||||||
PT Bank Negara Indonesia (Persero) Tbk | 19,314,000 | 6,809,423 | ||||||
PT Bank Rakyat Indonesia (Persero) Tbk | 16,651,500 | 10,064,093 |
Security | Shares | Value | ||||||
PT Indo Tambangraya Megah Tbk | 444,000 | $ | 1,303,132 | |||||
PT Indocement Tunggal Prakarsa Tbk | 666,000 | 1,201,484 | ||||||
PT Indofood Sukses Makmur Tbk | 4,823,000 | 2,870,833 | ||||||
PT Jasa Marga (Persero) Tbk | 28,951,000 | 14,448,988 | ||||||
PT Semen Gresik (Persero) Tbk | 5,994,000 | 6,916,154 | ||||||
PT Telekomunikasi Indonesia (Persero) Tbk | 149,175,000 | 30,053,571 | ||||||
PT Unilever Indonesia Tbk | 12,654,000 | 36,154,286 | ||||||
|
| |||||||
160,966,172 | ||||||||
MALAYSIA — 9.39% |
| |||||||
Astro Malaysia Holdings Bhd | 1,287,600 | 1,160,300 | ||||||
Berjaya Sports Toto Bhd | 8,133,513 | 9,879,813 | ||||||
Hong Leong Bank Bhd | 4,795,200 | 20,583,703 | ||||||
IHH Healthcare Bhdb | 32,398,600 | 39,551,986 | ||||||
Malayan Banking Bhd | 12,420,200 | 37,811,706 | ||||||
Maxis Bhd | 13,746,200 | 28,624,403 | ||||||
Petronas Chemicals Group Bhd | 3,996,000 | 8,053,435 | ||||||
Petronas Dagangan Bhd | 2,131,200 | 18,037,099 | ||||||
Petronas Gas Bhd | 2,342,600 | 14,363,335 | ||||||
Public Bank Bhd Foreign | 7,469,800 | 39,023,295 | ||||||
Sime Darby Bhd | 3,330,000 | 9,519,355 | ||||||
Tenaga Nasional Bhd | 1,465,200 | 3,894,115 | ||||||
|
| |||||||
230,502,545 | ||||||||
MEXICO — 2.06% | ||||||||
Arca Continental SAB de CV | 355,200 | 2,250,327 | ||||||
Coca-Cola FEMSA SAB de CV Series L | 399,600 | 4,763,656 | ||||||
El Puerto de Liverpool SA de CV Series C1 | 2,220,000 | 23,300,689 | ||||||
Fibra Uno Administracion SA de CV | 574,600 | 1,686,532 | ||||||
Grupo Aeroportuario del Pacifico SAB de CV Series B | 799,200 | 3,988,219 | ||||||
Grupo Financiero Santander Mexico SAB de CV Series B | 3,978,000 | 10,841,778 | ||||||
Wal-Mart de Mexico SAB de CV Series V | 1,554,000 | 3,729,041 | ||||||
|
| |||||||
50,560,242 | ||||||||
MOROCCO — 0.27% |
| |||||||
Attijariwafa Bank | 181,139 | 6,715,793 | ||||||
|
| |||||||
6,715,793 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 49 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS MINIMUM VOLATILITY ETF
August 31, 2013
Security | Shares | Value | ||||||
PERU — 1.31% |
| |||||||
Compania de Minas Buenaventura SA SP ADR | 388,960 | $ | 4,912,565 | |||||
Credicorp Ltd. | 224,978 | 27,276,333 | ||||||
|
| |||||||
32,188,898 | ||||||||
PHILIPPINES — 3.11% | ||||||||
Aboitiz Power Corp. | 5,480,800 | 3,993,857 | ||||||
Ayala Corp. | 110,500 | 1,350,280 | ||||||
Bank of the Philippine Islands | 9,330,620 | 19,247,019 | ||||||
Energy Development Corp. | 8,860,800 | 1,144,354 | ||||||
International Container Terminal Services Inc. | 3,359,200 | 7,155,247 | ||||||
Jollibee Foods Corp. | 2,257,660 | 8,149,849 | ||||||
Metropolitan Bank & Trust Co. | 3,763,630 | 6,877,485 | ||||||
Philippine Long Distance Telephone Co. | 442,000 | 28,521,883 | ||||||
|
| |||||||
76,439,974 | ||||||||
POLAND — 0.38% | ||||||||
Polskie Gornictwo Naftowe i Gazownictwo SA | 4,940,234 | 9,429,587 | ||||||
|
| |||||||
9,429,587 | ||||||||
RUSSIA — 0.70% |
| |||||||
LUKOIL OAO | 297,798 | 17,209,028 | ||||||
|
| |||||||
17,209,028 | ||||||||
SOUTH AFRICA — 8.32% |
| |||||||
Aspen Pharmacare Holdings Ltd.b | 1,116,050 | 25,717,863 | ||||||
Bidvest Group Ltd. | 255,132 | 6,297,458 | ||||||
Discovery Ltd. | 681,564 | 5,632,337 | ||||||
Foschini Group Ltd. (The) | 261,842 | 2,460,410 | ||||||
Growthpoint Properties Ltd. | 7,036,640 | 16,318,738 | ||||||
Liberty Holdings Ltd. | 468,962 | 5,266,149 | ||||||
Life Healthcare Group Holdings Ltd. | 5,749,978 | 19,875,913 | ||||||
Massmart Holdings Ltd. | 93,767 | 1,442,168 | ||||||
Nedbank Group Ltd. | 361,998 | 6,663,789 | ||||||
Pick n Pay Stores Ltd.a | 1,207,338 | 4,514,107 | ||||||
PPC Ltd. | 2,478,334 | 7,170,495 | ||||||
Redefine Properties Ltd. | 14,458,704 | 12,932,500 | ||||||
Remgro Ltd. | 1,173,952 | 21,436,288 | ||||||
Shoprite Holdings Ltd. | 859,744 | 13,529,572 | ||||||
SPAR Group Ltd. (The) | 548,380 | 6,171,350 | ||||||
Standard Bank Group Ltd. | 2,300,610 | 25,722,082 | ||||||
Tiger Brands Ltd. | 244,920 | 6,762,623 |
Security | Shares | Value | ||||||
Truworths International Ltd. | 790,814 | $ | 6,333,616 | |||||
Vodacom Group Ltd. | 894,608 | 10,138,483 | ||||||
|
| |||||||
204,385,941 | ||||||||
SOUTH KOREA — 9.46% |
| |||||||
AmorePacific Corp. | 18,466 | 14,971,758 | ||||||
Cheil Industries Inc. | 20,253 | 1,611,044 | ||||||
CJ CheilJedang Corp.a | 17,585 | 4,031,695 | ||||||
Dongbu Insurance Co. Ltd. | 112,959 | 4,792,909 | ||||||
E-Mart Co. Ltd. | 21,490 | 3,988,055 | ||||||
Hyundai Marine & Fire Insurance Co. Ltd. | 199,800 | 5,327,760 | ||||||
Kangwon Land Inc. | 512,720 | 12,794,328 | ||||||
Korea Electric Power Corp.b | 88,800 | 2,455,889 | ||||||
KT Corp. | 88,400 | 2,874,862 | ||||||
KT Corp. SP ADR | 18,606 | 298,998 | ||||||
KT&G Corp. | 553,233 | 36,182,799 | ||||||
LG Household & Health Care Ltd.a | 22,100 | 9,775,325 | ||||||
Lotte Shopping Co. Ltd. | 12,818 | 3,931,831 | ||||||
NCsoft Corp. | 10,087 | 1,472,090 | ||||||
NHN Corp.a | 47,577 | 19,137,093 | ||||||
NHN Entertainment Corp.a,b | 21,889 | 2,139,507 | ||||||
ORION Corp.a | 9,282 | 8,244,721 | ||||||
S1 Corp. | 216,419 | 12,380,169 | ||||||
Samsung Electro-Mechanics Co. Ltd. | 17,680 | 1,299,660 | ||||||
Samsung Electronics Co. Ltd. | 14,208 | 17,509,611 | ||||||
Samsung Fire & Marine Insurance Co. Ltd. | 53,040 | 11,945,408 | ||||||
Samsung Life Insurance Co. Ltd. | 149,838 | 14,308,210 | ||||||
Samsung SDI Co. Ltd. | 46,690 | 7,108,338 | ||||||
SK C&C Co. Ltd. | 96,523 | 9,521,435 | ||||||
SK Telecom Co. Ltd. | 95,987 | 19,153,300 | ||||||
Yuhan Corp. | 28,730 | 5,072,817 | ||||||
|
| |||||||
232,329,612 | ||||||||
TAIWAN — 18.15% |
| |||||||
Advanced Semiconductor Engineering Inc. | 1,335,000 | 1,179,995 | ||||||
Advantech Co. Ltd. | 3,552,000 | 18,042,206 | ||||||
Asia Cement Corp. | 12,681,201 | 15,849,117 | ||||||
ASUSTeK Computer Inc. | 444,000 | 3,538,706 | ||||||
China Airlines Ltd.b | 25,636,828 | 8,995,529 | ||||||
China Steel Corp. | 23,113,468 | 19,541,538 | ||||||
Chunghwa Telecom Co. Ltd. | 12,432,000 | 39,301,148 | ||||||
Compal Electronics Inc. | 6,559,000 | 4,416,577 |
50 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS MINIMUM VOLATILITY ETF
August 31, 2013
Security | Shares | Value | ||||||
Delta Electronics Inc. | 888,000 | $ | 4,020,919 | |||||
EVA Airways Corp.b | 4,420,000 | 2,348,510 | ||||||
Far EasTone Telecommunications Co. Ltd. | 12,911,000 | 32,660,953 | ||||||
Feng Hsin Iron & Steel Co. Ltd. | 4,440,000 | 7,834,116 | ||||||
First Financial Holding Co. Ltd. | 15,131,093 | 8,747,612 | ||||||
Formosa Chemicals & Fibre Corp. | 456,300 | 1,184,799 | ||||||
Formosa Petrochemical Corp. | 4,440,000 | 11,276,379 | ||||||
Formosa Plastics Corp. | 4,137,840 | 10,315,389 | ||||||
Formosa Taffeta Co. Ltd. | 6,660,000 | 6,098,147 | ||||||
Giant Manufacturing Co. Ltd. | 1,332,000 | 8,969,172 | ||||||
Hua Nan Financial Holdings Co. Ltd. | 29,701,800 | 16,178,694 | ||||||
Inventec Corp. | 32,412,800 | 26,374,766 | ||||||
Lite-On Technology Corp. | 15,170,301 | 25,702,493 | ||||||
MediaTek Inc. | 444,000 | 5,445,304 | ||||||
President Chain Store Corp. | 1,776,000 | 12,404,017 | ||||||
Realtek Semiconductor Corp. | 1,793,943 | 3,980,612 | ||||||
ScinoPharm Taiwan Ltd. | 2,769,360 | 7,755,263 | ||||||
Synnex Technology International Corp. | 7,548,000 | 11,892,870 | ||||||
Taiwan Cement Corp. | 7,000,000 | 9,239,920 | ||||||
Taiwan Cooperative Financial Holding Co. Ltd. | 50,571,875 | 27,039,717 | ||||||
Taiwan Mobile Co. Ltd. | 10,212,000 | 36,855,954 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 10,247,000 | 34,414,059 | ||||||
Transcend Information Inc. | 2,664,000 | 7,860,823 | ||||||
TSRC Corp. | 2,701,100 | 4,585,403 | ||||||
U-Ming Marine Transport Corp. | 6,216,000 | 9,576,020 | ||||||
United Microelectronics Corp. | 5,328,000 | 2,189,991 | ||||||
|
| |||||||
445,816,718 | ||||||||
THAILAND — 5.21% |
| |||||||
Advanced Information Service PCL NVDR | 2,079,100 | 15,501,212 | ||||||
Bangkok Bank PCL NVDR | 4,007,500 | 22,284,638 | ||||||
Bangkok Dusit Medical Services PCL NVDR | 3,298,500 | 13,218,593 | ||||||
Charoen Pokphand Foods PCL NVDR | 9,214,100 | 6,640,793 | ||||||
CP All PCL NVDR | 28,186,700 | 28,677,056 | ||||||
Kasikornbank PCL NVDR | 2,981,100 | 14,724,911 | ||||||
PTT Exploration & Production PCL NVDR | 347,200 | 1,795,862 |
Security | Shares | Value | ||||||
PTT PCL NVDR | 982,100 | $ | 9,976,598 | |||||
Siam Commercial Bank PCL NVDR | 3,635,200 | 15,189,015 | ||||||
|
| |||||||
128,008,678 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $2,482,732,444) |
| 2,344,679,350 | ||||||
PREFERRED STOCKS — 4.19% |
| |||||||
BRAZIL — 1.08% |
| |||||||
AES Tiete SA | 1,202,600 | 10,168,374 | ||||||
Companhia de Bebidas das Americas | 269,900 | 9,446,273 | ||||||
Companhia Energetica de Minas Gerais | 145,211 | 1,136,179 | ||||||
Companhia Paranaense de Energia Class B | 488,400 | 5,865,649 | ||||||
|
| |||||||
26,616,475 | ||||||||
CHILE — 0.04% |
| |||||||
Sociedad Quimica y Minera de Chile SA Series B | 34,342 | 890,545 | ||||||
|
| |||||||
890,545 | ||||||||
COLOMBIA — 2.22% |
| |||||||
Banco Davivienda SA | 1,112,353 | 14,175,809 | ||||||
Bancolombia SA | 253,356 | 3,516,580 | ||||||
Grupo Argos SA | 893,488 | 10,076,308 | ||||||
Grupo de Inversiones Suramericana SA | 1,327,768 | 26,725,394 | ||||||
|
| |||||||
54,494,091 | ||||||||
RUSSIA — 0.25% |
| |||||||
Surgutneftegas OJSC | 8,990,800 | 6,074,318 | ||||||
|
| |||||||
6,074,318 | ||||||||
SOUTH KOREA — 0.60% |
| |||||||
Samsung Electronics Co. Ltd. | 17,795 | 14,732,314 | ||||||
|
| |||||||
14,732,314 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $110,140,811) |
| 102,807,743 | ||||||
SHORT-TERM INVESTMENTS — 1.13% |
| |||||||
MONEY MARKET FUNDS — 1.13% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
SL Agency Shares | ||||||||
0.15%c,d,e | 22,113,556 | 22,113,556 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 51 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS MINIMUM VOLATILITY ETF
August 31, 2013
Security | Shares | Value | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.13%c,d,e | 1,404,195 | $ | 1,404,195 | |||||
BlackRock Cash Funds: Treasury, | ||||||||
0.00%c,d | 4,374,675 | 4,374,675 | ||||||
|
| |||||||
27,892,426 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $27,892,426) |
| 27,892,426 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $2,620,765,681) |
| 2,475,379,519 | ||||||
Other Assets, Less Liabilities — (0.80)% |
| (19,652,047 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 2,455,727,472 | |||||
|
|
NVS — Non-Voting Shares
NVDR — Non-Voting Depositary Receipts
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 consolidated financial statements.
52 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments
iSHARES® MSCI EMERGING MARKETS SMALL-CAP ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 98.72% |
| |||||||
BRAZIL — 4.99% |
| |||||||
Aliansce Shopping Centers SA | 7,500 | $ | 58,619 | |||||
Arezzo Industria e Comercio SA | 3,000 | 41,898 | ||||||
Autometal SA | 4,200 | 34,788 | ||||||
B2W Companhia Global do Varejoa | 4,200 | 24,028 | ||||||
Banco ABC Brasil SAa | 146 | 734 | ||||||
Brasil Brokers Participacoes SA | 10,800 | 23,852 | ||||||
Brasil Insurance Participacoes e Administracao SA | 6,400 | 51,422 | ||||||
Brazil Pharma SAa | 8,400 | 30,035 | ||||||
Brookfield Incorporacoes SAa | 14,700 | 10,512 | ||||||
Companhia de Locacao das Americas | 11,000 | 38,638 | ||||||
Diagnosticos da America SA | 14,000 | 65,312 | ||||||
Equatorial Energia SA | 11,242 | 94,818 | ||||||
Eternit SA | 12,600 | 45,053 | ||||||
Even Construtora e Incorporadora SA | 12,600 | 42,456 | ||||||
EZ TEC Empreendimentos e Participacoes SA | 3,600 | 40,434 | ||||||
Fleury SA | 5,600 | 43,463 | ||||||
Gafisa SAa | 33,000 | 38,869 | ||||||
Helbor Empreendimentos SA | 14,040 | 49,611 | ||||||
HRT Participacoes em Petroleo SAa | 15,900 | 10,033 | ||||||
Iguatemi Empresa de Shopping Centers SA | 5,900 | 54,602 | ||||||
International Meal Co. Holdings SAa | 4,200 | 28,799 | ||||||
Iochpe-Maxion SA | 7,000 | 82,450 | ||||||
Julio Simoes Logistica SA | 5,400 | 32,029 | ||||||
LLX Logistica SAa | 18,300 | 11,008 | ||||||
LPS Brasil — Consultoria de Imoveis SA | 5,400 | 34,551 | ||||||
Marfrig Alimentos SAa | 15,400 | 39,647 | ||||||
Mills Estruturas e Servicos de Engenharia SA | 6,600 | 82,181 | ||||||
PDG Realty SA Empreendimentos e Participacoesa | 79,800 | 77,209 | ||||||
Restoque Comercio e Confeccoes de Roupas SA | 8,100 | 20,649 | ||||||
Rossi Residencial SAa | 13,200 | 15,270 | ||||||
Santos Brasil Participacoes SA Units | 4,400 | 42,571 | ||||||
Sao Martinho SA | 4,200 | 47,880 | ||||||
SLC Agricola SA | 4,200 | 34,452 | ||||||
Tecnisa SAa | 7,200 | 27,501 | ||||||
Tegma Gestao Logistica SA | 2,700 | 23,852 | ||||||
TPI — Triunfo Participacoes e Investimentos SA | 5,400 | 23,738 |
Security | Shares | Value | ||||||
UNICASA Industria de Moveis SA | 11,200 | $ | 26,997 | |||||
Valid Solucoes e Servicos de Seguranca em Meios de Pagamento e Identificacao SA | 4,200 | 51,837 | ||||||
Vanguarda Agro SAa | 17,410 | 27,830 | ||||||
|
| |||||||
1,529,628 | ||||||||
CHILE — 1.71% |
| |||||||
Administradora de Fondos de Pensiones Provida SA | 13,877 | 84,905 | ||||||
Besalco SA | 32,595 | 33,240 | ||||||
Compania SudAmericana de Vapores SAa | 361,206 | 16,699 | ||||||
Inversiones Aguas Metropolitanas SA | 40,236 | 74,128 | ||||||
Parque Arauco SA | 46,322 | 95,644 | ||||||
SalfaCorp SA | 30,432 | 29,112 | ||||||
Sociedad Matriz SAAM SA | 786,147 | 68,678 | ||||||
Sonda SA | 47,708 | 121,123 | ||||||
|
| |||||||
523,529 | ||||||||
CHINA — 19.00% |
| |||||||
361 Degrees International Ltd.b | 129,000 | 30,776 | ||||||
Ajisen (China) Holdings Ltd. | 33,000 | 35,492 | ||||||
AMVIG Holdings Ltd. | 78,000 | 34,301 | ||||||
Anhui Expressway Co. Ltd. Class H | 54,000 | 28,203 | ||||||
Anton Oilfield Services Groupb | 106,000 | 67,665 | ||||||
Anxin-China Holdings Ltd. | 316,000 | 121,438 | ||||||
Asia Cement China Holdings Corp. | 72,000 | 34,355 | ||||||
Asian Citrus Holdings Ltd. | 60,000 | 22,671 | ||||||
Beijing Capital Land Ltd. Class H | 126,000 | 44,847 | ||||||
Beijing Enterprises Water Group Ltd. | 252,000 | 107,892 | ||||||
Boshiwa International Holding Ltd.a,c | 32,000 | 1,733 | ||||||
C C Land Holdings Ltd. | 159,000 | 42,034 | ||||||
China Automation Group Ltd. | 129,000 | 24,122 | ||||||
China Datang Corp. Renewable Power Co. Ltd. Class H | 252,000 | 54,271 | ||||||
China Dongxiang (Group) Co. Ltd.b | 238,000 | 38,672 | ||||||
China High Speed Transmission Equipment Group Co. Ltd.a | 96,000 | 40,854 | ||||||
China Huiyuan Juice Group Ltd.a | 94,500 | 51,184 | ||||||
China Lilang Ltd. | 30,000 | 16,790 | ||||||
China Lumena New Materials Corp.a,b | 210,000 | 41,705 | ||||||
China Medical System Holdings Ltd.b | 83,000 | 69,466 | ||||||
China Metal Recycling Holdings Ltd.a,c | 12,000 | — | ||||||
China Modern Dairy Holdings Ltd.a | 123,000 | 41,082 | ||||||
China Oil and Gas Group Ltd. | 420,000 | 55,788 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 53 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS SMALL-CAP ETF
August 31, 2013
Security | Shares | Value | ||||||
China Power International Development Ltd. | 150,000 | $ | 55,130 | |||||
China Power New Energy Development Co. Ltd.a | 840,000 | 42,247 | ||||||
China Precious Metal Resources Holdings Co. Ltd.a | 252,000 | 37,697 | ||||||
China Rare Earth Holdings Ltd.a | 156,000 | 23,739 | ||||||
China Rongsheng Heavy Industries Group Holdings Ltd.a | 320,000 | 37,553 | ||||||
China Shineway Pharmaceutical Group Ltd. | 36,000 | 55,803 | ||||||
China Singyes Solar Technologies Holdings Ltd. | 54,000 | 55,084 | ||||||
China South City Holdings Ltd. | 294,000 | 75,828 | ||||||
China Suntien Green Energy Corp. Ltd. Class H | 195,000 | 58,090 | ||||||
China Travel International Investment Hong Kong Ltd. | 234,000 | 44,058 | ||||||
China Vanadium Titano-Magnetite Mining Co. Ltd.a | 195,000 | 31,182 | ||||||
China Water Affairs Group Ltd. | 150,000 | 56,097 | ||||||
China Wireless Technologies Ltd. | 112,000 | 45,497 | ||||||
China Yongda Automobiles Services Holdings Ltd. | 51,000 | 48,866 | ||||||
China Yurun Food Group Ltd.a | 112,000 | 70,773 | ||||||
China ZhengTong Auto Services Holdings Ltd.a | 52,500 | 32,498 | ||||||
Chinasoft International Ltd.a | 120,000 | 37,759 | ||||||
Chongqing Machinery & Electric Co. Ltd. Class H | 186,000 | 22,547 | ||||||
CITIC Dameng Holdings Ltd.a | 264,000 | 21,789 | ||||||
CITIC Resources Holdings Ltd.a | 336,000 | 45,930 | ||||||
Comba Telecom Systems Holdings Ltd.a | 69,000 | 21,890 | ||||||
Cosco International Holdings Ltd. | 218,000 | 81,528 | ||||||
CSPC Pharmaceutical Group Ltd. | 108,000 | 56,407 | ||||||
Dazhong Transportation Group Co. Ltd. Class B | 64,800 | 44,388 | ||||||
Digital China Holdings Ltd. | 54,000 | 59,471 | ||||||
Dongyue Group Ltd. | 72,000 | 28,969 | ||||||
Extrawell Pharmaceutical Holdings Ltd.a | 300,000 | 20,891 | ||||||
Fantasia Holdings Group Co. Ltd. | 238,500 | 37,523 | ||||||
First Tractor Co. Ltd. Class H | 36,000 | 22,145 | ||||||
Fufeng Group Ltd.a | 88,400 | 36,936 |
Security | Shares | Value | ||||||
Global Bio-Chem Technology Group Co. Ltd.a | 174,000 | $ | 14,136 | |||||
Haitian International Holdings Ltd. | 53,000 | 97,601 | ||||||
Hanergy Solar Group Ltd.a | 980,000 | 94,785 | ||||||
Hangzhou Steam Turbine Co. Ltd. Class B | 39,080 | 50,901 | ||||||
Harbin Electric Co. Ltd. Class H | 56,000 | 34,664 | ||||||
Hengdeli Holdings Ltd. | 169,600 | 38,931 | ||||||
Hopson Development Holdings Ltd.a | 48,000 | 58,743 | ||||||
Huabao International Holdings Ltd. | 126,000 | 56,059 | ||||||
Hunan Nonferrous Metal Corp. Ltd. Class Ha | 212,000 | 65,614 | ||||||
Inspur International Ltd. | 1,005,000 | 41,473 | ||||||
Interchina Holdings Co. Ltd.a | 510,000 | 43,408 | ||||||
Jiangsu Future Land Co. Ltd. Class B | 74,700 | 46,688 | ||||||
Ju Teng International Holdings Ltd. | 72,000 | 40,297 | ||||||
Kaisa Group Holdings Ltd.a | 126,000 | 37,047 | ||||||
Kingdee International Software Group Co. Ltd.a | 198,000 | 60,515 | ||||||
Kingsoft Corp. Ltd. | 72,000 | 152,461 | ||||||
KWG Property Holdings Ltd.b | 124,500 | 84,130 | ||||||
Labixiaoxin Snacks Group Ltd. | 87,000 | 46,448 | ||||||
Li Ning Co. Ltd.a | 67,500 | 50,836 | ||||||
Lijun International Pharmaceutical (Holding) Co. Ltd. | 108,000 | 37,187 | ||||||
Lonking Holdings Ltd.a | 114,000 | 23,963 | ||||||
Luthai Textile Co. Ltd. Class B | 55,800 | 65,627 | ||||||
MIE Holdings Corp. | 84,000 | 18,524 | ||||||
Minth Group Ltd.b | 56,000 | 100,815 | ||||||
New World Department Store China Ltd. | 51,000 | 26,900 | ||||||
North Mining Shares Co. Ltd.a | 990,000 | 43,408 | ||||||
NVC Lighting Holdings Ltd. | 108,000 | 27,994 | ||||||
Peak Sport Products Co. Ltd. | 186,000 | 44,375 | ||||||
Ports Design Ltd. | 30,000 | 19,576 | ||||||
Renhe Commercial Holdings Co. Ltd.a | 702,000 | 40,738 | ||||||
REXLot Holdings Ltd. | 700,000 | 48,747 | ||||||
Semiconductor Manufacturing International Corp.a | 1,761,000 | 124,903 | ||||||
Shenzhen Expressway Co. Ltd. Class H | 66,000 | 24,342 | ||||||
Shenzhen International Holdings Ltd. | 795,000 | 99,447 | ||||||
Shenzhen Investment Ltd. | 204,000 | 84,711 | ||||||
Shougang Concord International Enterprises Co. Ltd.a | 870,000 | 43,756 |
54 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS SMALL-CAP ETF
August 31, 2013
Security | Shares | Value | ||||||
Sino Oil And Gas Holdings Ltd.a | 1,020,000 | $ | 25,782 | |||||
Sinopec Kantons Holdings Ltd.b | 84,000 | 80,161 | ||||||
Sinotrans Ltd. Class H | 297,000 | 73,538 | ||||||
Sinotrans Shipping Ltd. | 249,000 | 66,148 | ||||||
Skyworth Digital Holdings Ltd. | 164,000 | 89,038 | ||||||
Sparkle Roll Group Ltd. | 432,000 | 31,198 | ||||||
Sunac China Holdings Ltd. | 134,000 | 94,179 | ||||||
Sunny Optical Technology Group Co Ltd.b | 42,000 | 45,497 | ||||||
TCL Communication Technology Holdings Ltd. | 69,000 | 38,262 | ||||||
Tech Pro Technology Development Ltd.a | 126,000 | 57,358 | ||||||
Tianjin Development Holdings Ltd.a | 108,000 | 64,206 | ||||||
Tianjin Port Development Holdings Ltd. | 306,000 | 46,170 | ||||||
Tianneng Power International Ltd. | 66,000 | 27,236 | ||||||
Tibet 5100 Water Resources Holdings Ltd. | 141,000 | 54,004 | ||||||
Towngas China Co. Ltd. | 82,000 | 77,195 | ||||||
Travelsky Technology Ltd. Class H | 126,000 | 101,393 | ||||||
Vinda International Holdings Ltd. | 53,000 | 54,337 | ||||||
VODone Ltd.a | 288,000 | 22,284 | ||||||
West China Cement Ltd. | 162,000 | 23,398 | ||||||
Winsway Coking Coal Holding Ltd.a | 595,000 | 43,736 | ||||||
Wison Engineering Services Co. Ltd. | 112,000 | 34,231 | ||||||
Xingda International Holdings Ltd. | 72,000 | 34,540 | ||||||
Xinjiang Xinxin Mining Industry Co. Ltd. Class Ha | 266,000 | 40,478 | ||||||
XTEP International Holdings Ltd. | 76,500 | 37,390 | ||||||
Yanchang Petroleum International Ltd.a | 570,000 | 28,668 | ||||||
Yip’s Chemical Holdings Ltd. | 42,000 | 33,473 | ||||||
Yuexiu Real Estate Investment Trust | 178,000 | 89,294 | ||||||
Yuexiu Transport Infrastructure Ltd. | 102,000 | 54,325 | ||||||
Zhejiang Southeast Electric Power Co. Ltd. Class Ba | 62,800 | 52,375 | ||||||
|
| |||||||
5,823,300 | ||||||||
CZECH REPUBLIC — 0.39% |
| |||||||
Central European Media Enterprises Ltd. AS Class Aa | 4,956 | 22,677 | ||||||
Pegas Nonwovens SA | 2,548 | 74,683 | ||||||
Philip Morris CR AS | 42 | 23,257 | ||||||
|
| |||||||
120,617 |
Security | Shares | Value | ||||||
EGYPT — 0.42% |
| |||||||
Orascom Telecom Media And Technology Holding SAE SP GDR | 379,722 | $ | 129,106 | |||||
|
| |||||||
129,106 | ||||||||
INDIA — 4.33% |
| |||||||
Amtek Auto Ltd. | 21,871 | 21,368 | ||||||
Andhra Bank | 42,882 | 32,387 | ||||||
Ashok Leyland Ltd. | 199,824 | 36,293 | ||||||
Aurobindo Pharma Ltd. | 14,016 | 38,514 | ||||||
Bharat Forge Ltd. | 12,795 | 46,662 | ||||||
Biocon Ltd. | 9,207 | 49,003 | ||||||
CESC Ltd. | 7,521 | 35,055 | ||||||
Cox & Kings Ltd. | 22,366 | 30,501 | ||||||
EID Parry India Ltd. | 18,472 | 31,998 | ||||||
Emami Ltd. | 9,480 | 58,850 | ||||||
Federal Bank Ltd. | 9,456 | 36,660 | ||||||
Financial Technologies (India) Ltd. | 8,933 | 15,400 | ||||||
Great Eastern Shipping Co. Ltd. (The) | 10,875 | 41,610 | ||||||
Gujarat Fluorochemicals Ltd. | 5,135 | 19,527 | ||||||
Gujarat Gas Co. Ltd. | 6,386 | 18,790 | ||||||
Gujarat Mineral Development Corp. Ltd. | 24,146 | 30,278 | ||||||
Gujarat State Petronet Ltd. | 35,795 | 26,953 | ||||||
GVK Power & Infrastructure Ltd.a | 192,577 | 19,966 | ||||||
Hexaware Technologies Ltd. | 26,508 | 51,395 | ||||||
Hindustan Construction Co. Ltd.a | 180,818 | 26,820 | ||||||
Housing Development & Infrastructure Ltd.a | 23,655 | 11,958 | ||||||
India Infoline Ltd. | 31,083 | 24,887 | ||||||
Indiabulls Housing Finance Ltd. | 11,068 | 33,010 | ||||||
Indian Hotels Co. Ltd. | 52,728 | 35,913 | ||||||
Indraprastha Gas Ltd. | 5,616 | 21,867 | ||||||
Jammu & Kashmir Bank Ltd. | 3,864 | 65,241 | ||||||
Jindal Saw Ltd. | 22,125 | 16,543 | ||||||
Jubilant Foodworks Ltd.a | 3,545 | �� | 53,937 | |||||
Mahindra & Mahindra Financial Services Ltd. | 708 | 2,708 | ||||||
Manappuram Finance Ltd. | 58,164 | 16,374 | ||||||
MAX India Ltd. | 23,974 | 58,602 | ||||||
PTC India Ltd. | 38,406 | 24,472 | ||||||
Redington India Ltd. | 31,850 | 28,731 | ||||||
REI Agro Ltd. | 123,246 | 15,296 | ||||||
Syndicate Bank | 35,722 | 34,684 | ||||||
Tata Global Beverages Ltd. | 26,943 | 56,684 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 55 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS SMALL-CAP ETF
August 31, 2013
Security | Shares | Value | ||||||
Thermax Ltd. | 8,094 | $ | 66,203 | |||||
Torrent Pharmaceuticals Ltd. | 9,502 | 58,620 | ||||||
Voltas Ltd. | 20,883 | 21,177 | ||||||
Welspun Corp. Ltd. | 19,809 | 10,254 | ||||||
|
| |||||||
1,325,191 | ||||||||
INDONESIA — 4.13% |
| |||||||
PT ACE Hardware Indonesia Tbk | 560,000 | 36,410 | ||||||
PT Agis Tbka | 728,000 | 28,000 | ||||||
PT Agung Podomoro Land Tbk | 844,500 | 20,494 | ||||||
PT AKR Corporindo Tbk | 175,500 | 63,884 | ||||||
PT Alam Sutera Realty Tbk | 916,500 | 46,161 | ||||||
PT Arwana Citramulia Tbk | 504,000 | 37,385 | ||||||
PT Bakrie and Brothers Tbka | 1,678,999 | 7,688 | ||||||
PT Bakrieland Development Tbka | 5,460,000 | 25,000 | ||||||
PT Bank Bukopin Tbk | 333,000 | 17,077 | ||||||
PT Bank Pembangunan Daerah Jawa Barat dan Banten Tbk | 228,000 | 16,286 | ||||||
PT Bank Tabungan Negara (Persero) Tbk | 190,823 | 16,601 | ||||||
PT Benakat Petroleum Energy Tbka | 1,392,000 | 15,297 | ||||||
PT Bumi Resources Minerals Tbka | 840,000 | 10,385 | ||||||
PT Ciputra Development Tbk | 774,000 | 57,412 | ||||||
PT Citra Marga Nusaphala Persada Tbk | 224,000 | 67,692 | ||||||
PT Energi Mega Persada Tbka | 1,804,500 | 12,724 | ||||||
PT Erajaya Swasembada Tbka | 109,500 | 13,236 | ||||||
PT Gajah Tunggal Tbk | 99,000 | 16,953 | ||||||
PT Garuda Indonesia (Persero) Tbka | 564,000 | 24,791 | ||||||
PT Hanson International Tbka | 546,000 | 29,000 | ||||||
PT Holcim Indonesia Tbk | 126,000 | 24,231 | ||||||
PT Japfa Comfeed Indonesia Tbk | 429,000 | 46,357 | ||||||
PT Kawasan Industri Jababeka Tbk | 1,498,678 | 34,310 | ||||||
PT Krakatau Steel (Persero) Tbk | 259,500 | 11,169 | ||||||
PT Lippo Cikarang Tbka | 28,000 | 12,308 | ||||||
PT Medco Energi Internasional Tbk | 145,500 | 31,312 | ||||||
PT Mitra Adiperkasa Tbk | 55,500 | 24,141 | ||||||
PT MNC Investama Tbk | 1,542,000 | 48,717 | ||||||
PT MNC Sky Vision Tbka | 112,985 | 19,245 | ||||||
PT Pakuwon Jati Tbk | 1,638,000 | 43,500 | ||||||
PT Perusahaan Perkebunan London Sumatra Indonesia Tbk | 182,000 | 24,833 | ||||||
PT Ramayana Lestari Sentosa Tbk | 369,000 | 34,129 | ||||||
PT Sampoerna Agro Tbk | 154,000 | 25,385 | ||||||
PT Sentul City Tbka | 1,563,000 | 27,911 | ||||||
PT Sugih Energy Tbka | 910,000 | 37,083 |
Security | Shares | Value | ||||||
PT Summarecon Agung Tbk | 672,000 | $ | 48,000 | |||||
PT Surya Semesta Internusa Tbk | 432,450 | 27,721 | ||||||
PT Tempo Scan Pacific Tbk | 83,997 | 28,076 | ||||||
PT Timah (Persero) Tbk | 220,500 | 26,048 | ||||||
PT Tower Bersama Infrastructure Tbka | 62,595 | 29,807 | ||||||
PT Trada Maritime Tbka | 531,500 | 68,141 | ||||||
PT Wijaya Karya (Persero) Tbk | 189,000 | 30,115 | ||||||
|
| |||||||
1,265,015 | ||||||||
MALAYSIA — 5.57% |
| |||||||
Affin Holdings Bhd | 28,800 | 35,510 | ||||||
Carlsberg Brewery Malaysia Bhd | 11,400 | 44,909 | ||||||
Dialog Group Bhd | 141,580 | 111,204 | ||||||
DRB-Hicom Bhd | 63,300 | 49,912 | ||||||
Eastern & Oriental Bhd | 72,300 | 43,361 | ||||||
Hai-O Enterprise Bhd | 92,400 | 71,731 | ||||||
Hibiscus Petroleum Bhda | 63,000 | 26,468 | ||||||
IGB Corp. Bhd | 93,000 | 70,782 | ||||||
IJM Land Bhd | 46,500 | 34,258 | ||||||
KNM Group Bhda | 129,600 | 15,979 | ||||||
KPJ Healthcare Bhd | 47,300 | 92,591 | ||||||
Magnum Bhd | 84,800 | 83,645 | ||||||
Mah Sing Group Bhd | 73,920 | 50,634 | ||||||
Malaysian Airline System Bhda | 519,800 | 49,848 | ||||||
Malaysian Pacific Industries Bhd | 56,000 | 42,110 | ||||||
Malaysian Resources Corp. Bhd | 116,700 | 51,160 | ||||||
Media Prima Bhd | 79,500 | 65,105 | ||||||
OSK Holdings Bhd | 108,387 | 51,475 | ||||||
POS Malaysia Bhd | 52,200 | 78,822 | ||||||
QL Resources Bhd | 65,800 | 68,109 | ||||||
Sarawak Oil Palms Bhd | 33,600 | 56,260 | ||||||
Scomi Group Bhda | 451,800 | 49,516 | ||||||
Sunway Real Estate Investment Trust Bhd | 191,700 | 75,869 | ||||||
TAN Chong Motor Holdings Bhd | 35,700 | 75,861 | ||||||
TIME dotCom Bhda | 30,400 | 33,873 | ||||||
Top Glove Corp. Bhd | 39,200 | 73,274 | ||||||
Uchi Technologies Bhd | 198,800 | 81,705 | ||||||
Wah Seong Corp. Bhd | 109,218 | 55,860 | ||||||
WCT Holdings Bhd | 91,590 | 68,036 | ||||||
|
| |||||||
1,707,867 | ||||||||
MEXICO — 2.28% |
| |||||||
Alsea SAB de CV | 31,859 | 80,626 | ||||||
Axtel SAB de CV CPOa | 122,700 | 39,883 | ||||||
Banregio Grupo Financiero SAB de CV | 11,200 | 66,619 | ||||||
Bolsa Mexicana de Valores SAB de CV | 29,400 | 69,338 |
56 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS SMALL-CAP ETF
August 31, 2013
Security | Shares | Value | ||||||
Consorcio ARA SAB de CVa | 139,200 | $ | 55,776 | |||||
Corporacion Geo SAB de CV Series Ba | 38,700 | 1,935 | ||||||
Corporacion Inmobiliaria Vesta SAB de CV | 23,800 | 46,541 | ||||||
Desarrolladora Homex SAB de CVa | 18,600 | 6,868 | ||||||
Empresas ICA SAB de CVa | 47,700 | 98,065 | ||||||
Grupo Aeroportuario del Centro Norte SAB de CV | 11,200 | 38,041 | ||||||
Grupo Herdez SAB de CV | 17,900 | 57,245 | ||||||
Macquarie Mexico Real Estate Management SA de CV | 36,400 | 66,328 | ||||||
TV Azteca SAB de CV CPO | 125,900 | 62,610 | ||||||
Urbi Desarrollos Urbanos SAB de CVa | 124,600 | 8,490 | ||||||
|
| |||||||
698,365 | ||||||||
PHILIPPINES — 1.06% |
| |||||||
Belle Corp.a | 359,433 | 37,072 | ||||||
Cebu Air Inc. | 15,840 | 19,374 | ||||||
EEI Corp. | 216,972 | 49,621 | ||||||
Filinvest Land Inc. | 1,572,000 | 51,812 | ||||||
First Gen Corp. | 91,800 | 33,962 | ||||||
First Philippine Holdings Corp. | 24,370 | 43,713 | ||||||
Manila Water Co. Inc. | 66,900 | 49,350 | ||||||
Philex Petroleum Corp.a | 27,000 | 7,265 | ||||||
Philippine National Banka | 18,525 | 31,152 | ||||||
|
| |||||||
323,321 | ||||||||
POLAND — 1.62% |
| |||||||
Asseco Poland SA | 6,510 | 92,027 | ||||||
Budimex SA | 2,187 | 61,035 | ||||||
Getin Noble Bank SAa | 98,467 | 62,953 | ||||||
Globe Trade Centre SAa | 21,742 | 51,707 | ||||||
Lubelski Wegiel Bogdanka SAa | 2,388 | 83,749 | ||||||
Netia SAa | 26,949 | 43,448 | ||||||
TVN SA | 13,874 | 51,421 | ||||||
Warsaw Stock Exchange SA | 4,521 | 51,176 | ||||||
|
| |||||||
497,516 | ||||||||
RUSSIA — 0.67% |
| |||||||
Aeroflot — Russian Airlines OJSC | 27,656 | 40,542 | ||||||
IDGC Holding JSCa | 1,568,000 | 47,789 | ||||||
OGK-2 OJSCa | 1,854,461 | 16,199 | ||||||
PIK Groupa | 28,140 | 55,759 | ||||||
Sollers OJSC | 2,313 | 43,068 | ||||||
|
| |||||||
203,357 |
Security | Shares | Value | ||||||
SOUTH AFRICA — 8.35% |
| |||||||
Acucap Properties Ltd. | 14,130 | $ | 57,950 | |||||
Adcock Ingram Holdings Ltd. | 9,408 | 60,724 | ||||||
Aeci Ltd. | 9,453 | 107,997 | ||||||
African Oxygen Ltd. | 17,463 | 34,445 | ||||||
ArcelorMittal South Africa Ltd.a | 10,066 | 32,240 | ||||||
Astral Foods Ltd. | 3,417 | 31,331 | ||||||
Aveng Ltd. | 22,848 | 60,773 | ||||||
AVI Ltd. | 15,168 | 81,461 | ||||||
Brait SEa | 27,957 | 109,879 | ||||||
Capital Property Fund | 77,196 | 73,947 | ||||||
City Lodge Hotels Ltd. | 3,654 | 43,173 | ||||||
Clicks Group Ltd. | 17,268 | 92,452 | ||||||
Clover Industries Ltd. | 23,106 | 37,476 | ||||||
Coronation Fund Managers Ltd. | 20,007 | 130,892 | ||||||
DataTec Ltd. | 13,530 | 75,319 | ||||||
DRDGOLD Ltd. | 59,655 | 35,475 | ||||||
Emira Property Fund | 32,457 | 45,258 | ||||||
Famous Brands Ltd. | 5,043 | 46,781 | ||||||
Fountainhead Property Trust | 87,279 | 64,089 | ||||||
Grindrod Ltd. | 29,634 | 67,393 | ||||||
Group Five Ltd. | 15,912 | 64,885 | ||||||
Hyprop Investments Ltd. Units | 11,746 | 81,434 | ||||||
Illovo Sugar Ltd. | 15,810 | 50,945 | ||||||
JD Group Ltd. | 8,385 | 22,516 | ||||||
JSE Ltd. | 7,065 | 54,224 | ||||||
Lewis Group Ltd. | 4,653 | 26,230 | ||||||
Mondi Ltd. | 10,363 | 158,901 | ||||||
Murray & Roberts Holdings Ltd.a | 36,657 | 92,707 | ||||||
Omnia Holdings Ltd. | 4,281 | 81,097 | ||||||
Palabora Mining Co. Ltd.a | 1,476 | 16,488 | ||||||
Pick n Pay Holdings Ltd. | 15,210 | 25,813 | ||||||
Pinnacle Technology Holdings Ltd. | 23,019 | 53,136 | ||||||
Resilient Property Income Fund Ltd. | 16,224 | 77,627 | ||||||
Royal Bafokeng Platinum Ltd.a | 3,261 | 18,150 | ||||||
SA Corporate Real Estate Fund Nominees Pty Ltd. | 141,096 | 52,906 | ||||||
Sibanye Gold Ltd.a | 80,537 | 82,888 | ||||||
Sun International Ltd. | 6,543 | 60,261 | ||||||
Super Group Ltd.a | 24,300 | 52,202 | ||||||
Sycom Property Fund | 11,076 | 25,178 | ||||||
Tongaat Hulett Ltd. | 6,762 | 77,914 | ||||||
Vukile Property Fund Ltd. | 28,071 | 41,828 | ||||||
Wilson Bayly Holmes-Ovcon Ltd. | 3,846 | 53,107 | ||||||
|
| |||||||
2,559,492 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 57 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS SMALL-CAP ETF
August 31, 2013
Security | Shares | Value | ||||||
SOUTH KOREA — 17.22% |
| |||||||
3S Korea Co. Ltd.a | 2,709 | $ | 13,569 | |||||
Able C&C Co. Ltd. | 660 | 20,780 | ||||||
Ahnlab Inc. | 644 | 33,649 | ||||||
Asiana Airlines Inc.a | 17,410 | 75,205 | ||||||
Binggrae Co. Ltd. | 561 | 45,585 | ||||||
Capro Corp. | 1,560 | 10,442 | ||||||
Chabio & Diostech Co. Ltd.a | 4,122 | 36,502 | ||||||
Chong Kun Dang Pharm Corp. | 574 | 29,371 | ||||||
CJ CGV Co. Ltd. | 1,800 | 78,645 | ||||||
CJ E&M Corp.a | 1,560 | 53,614 | ||||||
CJ O Shopping Co. Ltd. | 306 | 91,989 | ||||||
CNK International Co. Ltd.a | 3,450 | 15,695 | ||||||
Cosmax Inc. | 960 | 40,604 | ||||||
CrucialTec Co. Ltd.a | 3,201 | 33,450 | ||||||
CTCBIO Inc.a | 714 | 13,861 | ||||||
Daesang Corp. | 1,680 | 46,690 | ||||||
Daishin Securities Co. Ltd. | 5,760 | 43,899 | ||||||
Daum Communications Corp. | 1,204 | 92,194 | ||||||
Dong-A Socio Holdings Co. Ltd. | 873 | 110,890 | ||||||
Dong-A ST Co. Ltd.a | 463 | 50,886 | ||||||
Dongsuh Companies Inc. | 2,436 | 63,640 | ||||||
Dongyang Mechatronics Corp. | 3,390 | 30,997 | ||||||
Doosan Engine Co. Ltd.a | 2,280 | 16,432 | ||||||
Duksan Hi-Metal Co. Ltd.a | 1,515 | 32,960 | ||||||
Fila Korea Ltd. | 681 | 40,183 | ||||||
Foosung Co. Ltd.a | 4,830 | 18,471 | ||||||
Gamevil Inc.a | 339 | 17,041 | ||||||
GemVax & Kael Co. Ltd.a | 2,588 | 48,494 | ||||||
Grand Korea Leisure Co. Ltd. | 2,250 | 65,267 | ||||||
Green Cross Corp. | 654 | 73,940 | ||||||
GS Home Shopping Inc. | 273 | 51,991 | ||||||
Hana Tour Service Inc. | 882 | 49,422 | ||||||
Handsome Co. Ltd. | 1,590 | 37,886 | ||||||
Hanjin Heavy Industries & Construction Co. Ltd.a | 5,048 | 55,480 | ||||||
Hanjin Shipping Co. Ltd.a | 5,610 | 43,412 | ||||||
Hanmi Pharm Co. Ltd.a | 513 | 61,465 | ||||||
Hansol Paper Co. | 5,430 | 55,031 | ||||||
Hanwha Investment & Securities Co. Ltd.a | 11,370 | 33,033 | ||||||
Hotel Shilla Co. Ltd. | 2,836 | 171,941 | ||||||
Huchems Fine Chemical Corp. | 4,930 | 95,265 | ||||||
Hwa Shin Co. Ltd. | 3,060 | 38,317 | ||||||
Hyundai Corp. | 3,300 | 74,321 |
Security | Shares | Value | ||||||
Hyundai Greenfood Co. Ltd. | 4,610 | $ | 72,469 | |||||
Hyundai Home Shopping Network Corp. | 490 | 72,393 | ||||||
Ilyang Pharmaceutical Co. Ltd. | 1,200 | 29,836 | ||||||
Infraware Inc.a | 3,060 | 41,074 | ||||||
Interflex Co. Ltd.a | 555 | 20,149 | ||||||
INTOPS Co. Ltd. | 1,830 | 36,681 | ||||||
Jusung Engineering Co. Ltd.a | 5,133 | 28,392 | ||||||
KEPCO Plant Service & Engineering Co. Ltd. | 1,032 | 49,087 | ||||||
KIWOOM Securities Co. Ltd. | 1,047 | 48,858 | ||||||
Kolao Holdings | 2,380 | 64,750 | ||||||
Kolon Industries Inc. | 1,044 | 50,411 | ||||||
Komipharm International Co. Ltd.a | 3,465 | 23,317 | ||||||
Korea Petrochemical Industrial Co. Ltd.a | 390 | 18,340 | ||||||
Korean Reinsurance Co. | 5,406 | 56,980 | ||||||
KT Skylife Co. Ltd. | 1,710 | 50,836 | ||||||
Kumho Industrial Co. Ltd.a | 810 | 11,748 | ||||||
Kumho Tire Co. Inc.a | 4,260 | 41,063 | ||||||
LG Fashion Corp. | 1,320 | 30,739 | ||||||
LG Hausys Ltd. | 897 | 99,393 | ||||||
LG International Corp. | 2,012 | 57,276 | ||||||
LG Life Sciences Ltd.a | 1,260 | 58,570 | ||||||
LIG Insurance Co. Ltd. | 2,490 | 55,181 | ||||||
Lock & Lock Co. Ltd. | 1,775 | 36,858 | ||||||
Lotte Chilsung Beverage Co. Ltd. | 66 | 82,764 | ||||||
Lotte Food Co. Ltd. | 84 | 46,160 | ||||||
Mando Corp. | 952 | 106,774 | ||||||
Medipost Co. Ltd.a | 591 | 28,697 | ||||||
Medy-Tox Inc. | 476 | 46,311 | ||||||
MegaStudy Co. Ltd. | 336 | 22,066 | ||||||
Melfas Inc. | 1,500 | 16,215 | ||||||
Meritz Finance Group Inc. | 9,600 | 42,809 | ||||||
Meritz Fire & Marine Insurance Co. Ltd. | 3,570 | 41,166 | ||||||
Namhae Chemical Corp. | 3,750 | 25,168 | ||||||
Namyang Dairy Products Co. Ltd. | 57 | 41,336 | ||||||
Neowiz Games Corp.a | 930 | 12,860 | ||||||
Nexen Tire Corp. | 2,520 | 35,755 | ||||||
NongShim Co. Ltd. | 246 | 52,965 | ||||||
OCI Materials Co. Ltd. | 465 | 14,871 | ||||||
Paradise Co. Ltd. | 3,845 | 76,896 | ||||||
Partron Co. Ltd. | 3,864 | 63,353 | ||||||
Poongsan Corp. | 4,230 | 97,743 | ||||||
POSCO Chemtech Co. Ltd. | 537 | 66,324 | ||||||
POSCO ICT Co. Ltd. | 5,874 | 48,524 | ||||||
S&T Dynamics Co. Ltd. | 3,180 | 35,809 |
58 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS SMALL-CAP ETF
August 31, 2013
Security | Shares | Value | ||||||
Samsung Fine Chemicals Co. Ltd. | 1,413 | $ | 57,472 | |||||
Samyang Holdings Corp. | 384 | 29,439 | ||||||
SeAH Besteel Corp. | 1,170 | 31,304 | ||||||
Seegene Inc.a | 630 | 30,193 | ||||||
Seoul Semiconductor Co. Ltd. | 2,976 | 100,402 | ||||||
SFA Engineering Corp. | 912 | 41,079 | ||||||
SK Broadband Co. Ltd.a | 13,998 | 63,303 | ||||||
SK Chemicals Co. Ltd. | 1,053 | 44,158 | ||||||
SK Communications Co. Ltd.a | 2,895 | 15,544 | ||||||
SK Securities Co. Ltd.a | 42,630 | 30,377 | ||||||
SKC Co. Ltd. | 1,961 | 52,821 | ||||||
SM Entertainment Co.a | 1,080 | 32,496 | ||||||
Soulbrain Co. Ltd. | 843 | 35,617 | ||||||
STX Corp. Co. Ltd. | 3,330 | 12,119 | ||||||
STX Offshore & Shipbuilding Co. Ltd.a | 3,690 | 14,211 | ||||||
Sung Kwang Bend Co. Ltd. | 2,007 | 51,710 | ||||||
Sungwoo Hitech Co. Ltd. | 2,427 | 33,124 | ||||||
Suprema Inc.a | 2,358 | 47,264 | ||||||
Taekwang Industrial Co. Ltd. | 27 | 28,118 | ||||||
Taewoong Co. Ltd.a | 1,083 | 23,659 | ||||||
Taihan Electric Wire Co. Ltd.a | 6,901 | 14,827 | ||||||
TK Corp.a | 1,941 | 41,179 | ||||||
TONGYANG Life Insurance Co. | 2,760 | 26,728 | ||||||
TONGYANG Securities Inc. | 10,440 | 28,121 | ||||||
ViroMed Co. Ltd.a | 1,200 | 36,052 | ||||||
Wonik IPS Co. Ltd.a | 4,977 | 29,592 | ||||||
Woongjin Thinkbig Co. Ltd.a | 5,880 | 33,318 | ||||||
YESCO Co. Ltd. | 1,830 | 61,822 | ||||||
Youngone Corp. | 2,180 | 59,898 | ||||||
|
| |||||||
5,277,423 | ||||||||
TAIWAN — 20.98% |
| |||||||
Ability Enterprise Co. Ltd. | 54,000 | 39,700 | ||||||
ALI Corp. | 39,000 | 42,031 | ||||||
Altek Corp. | 51,133 | 28,365 | ||||||
Ambassador Hotel Ltd. (The) | 27,000 | 25,985 | ||||||
AmTRAN Technology Co. Ltd. | 78,312 | 50,377 | ||||||
Asia Optical Co. Inc.a | 30,000 | 28,973 | ||||||
Asia Polymer Corp. | 42,400 | 32,234 | ||||||
BES Engineering Corp. | 140,000 | 37,708 | ||||||
Career Technology (MFG.) Co. Ltd. | 21,000 | 22,457 | ||||||
Cathay Real Estate Development Co. Ltd. | 102,000 | 73,966 | ||||||
Cheng Loong Corp. | 132,000 | 56,903 | ||||||
China Bills Finance Corp. | 153,000 | 58,798 | ||||||
China Manmade Fibers Corp.a | 93,000 | 37,605 |
Security | Shares | Value | ||||||
China Steel Chemical Corp. | 12,000 | $ | 68,172 | |||||
China Synthetic Rubber Corp. | 51,000 | 49,339 | ||||||
Chipbond Technology Corp. | 39,000 | 87,189 | ||||||
Chong Hong Construction Co. | 12,040 | 40,637 | ||||||
Chroma ATE Inc. | 27,000 | 62,527 | ||||||
Chung Hung Steel Corp.a | 140,000 | 40,141 | ||||||
Compal Communications Inc. | 30,000 | 37,845 | ||||||
Compeq Manufacturing Co. Ltd. | 114,000 | 52,382 | ||||||
Coretronic Corp. | 54,000 | 47,099 | ||||||
CSBC Corp. Taiwan | 69,420 | 42,337 | ||||||
Cyberlink Corp. | 16,125 | 44,833 | ||||||
CyberTAN Technology Inc. | 42,000 | 48,562 | ||||||
D-Link Corp. | 66,000 | 35,950 | ||||||
Dynapack International Technology Corp. | 9,000 | 24,000 | ||||||
Eclat Textile Co. Ltd. | 280 | 2,503 | ||||||
Elan Microelectronics Corp. | 36,000 | 60,873 | ||||||
Faraday Technology Corp. | 42,000 | 49,966 | ||||||
FLEXium Interconnect Inc. | 15,101 | 59,547 | ||||||
Formosan Rubber Group Inc. | 94,000 | 75,704 | ||||||
G Tech Optoelectronics Corp. | 12,000 | 22,737 | ||||||
Gallop No. 1 REIT | 28,000 | 15,486 | ||||||
Gemtek Technology Corp. | 36,000 | 36,452 | ||||||
Genesis Photonics Inc.a | 36,715 | 20,858 | ||||||
Genius Electronic Optical Co. Ltd. | 6,357 | 36,857 | ||||||
Gigabyte Technology Co. Ltd. | 63,000 | 56,843 | ||||||
Gigastorage Corp. | 30,400 | 18,692 | ||||||
Gintech Energy Corp.a | 63,000 | 52,317 | ||||||
Global Unichip Corp. | 12,000 | 35,930 | ||||||
Gloria Material Technology Corp. | 44,818 | 27,857 | ||||||
Goldsun Development & Construction Co. Ltd. | 210,000 | 78,949 | ||||||
Grand Pacific Petrochemical Corp. | 114,000 | 78,287 | ||||||
Great Wall Enterprise Co. Ltd. | 98,253 | 83,726 | ||||||
Greatek Electronics Inc. | 63,000 | 52,422 | ||||||
Green Energy Technology Inc.a | 36,125 | 22,997 | ||||||
HannStar Display Corp.a | 195,000 | 79,500 | ||||||
HannsTouch Solution Inc.a | 84,000 | 29,053 | ||||||
Hey Song Corp. | 30,000 | 30,577 | ||||||
Ho Tung Chemical Corp.a | 84,716 | 37,794 | ||||||
Holy Stone Enterprise Co. Ltd. | 75,000 | 71,179 | ||||||
Huaku Development Co. Ltd. | 22,080 | 64,784 | ||||||
Huang Hsiang Construction Co. | 12,000 | 26,868 | ||||||
Hung Sheng Construction Co. Ltd. | 28,000 | 22,363 | ||||||
Infortrend Technology Inc. | 112,000 | 55,580 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 59 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS SMALL-CAP ETF
August 31, 2013
Security | Shares | Value | ||||||
ITEQ Corp. | 51,600 | $ | 51,040 | |||||
Jih Sun Financial Holdings Co. Ltd. | 91,761 | 25,390 | ||||||
Kenda Rubber Industrial Co. Ltd. | 53,783 | 104,423 | ||||||
Kerry TJ Logistics Co. Ltd. | 51,000 | 62,973 | ||||||
Kindom Construction Co. | 39,000 | 51,871 | ||||||
King Yuan Electronics Co. Ltd. | 120,000 | 88,824 | ||||||
King’s Town Bank | 73,000 | 62,085 | ||||||
Kinpo Electronics Inc. | 231,000 | 82,984 | ||||||
L&K Engineering Co. Ltd. | 28,000 | 23,486 | ||||||
Lealea Enterprise Co. Ltd. | 157,690 | 54,013 | ||||||
Lien Hwa Industrial Corp. | 59,000 | 36,081 | ||||||
Makalot Industrial Co. Ltd. | 14,000 | 75,557 | ||||||
Masterlink Securities Corp. | 78,000 | 24,163 | ||||||
Medigen Biotechnology Corp.a | 8,000 | 49,725 | ||||||
Mercuries & Associates Ltd. | 29,548 | 19,847 | ||||||
Micro-Star International Co. Ltd. | 93,000 | 54,542 | ||||||
Microbio Co. Ltd. | 35,727 | 37,489 | ||||||
MIN AIK Technology Co. Ltd. | 14,000 | 66,200 | ||||||
MiTAC International Corp. | 138,000 | 44,410 | ||||||
Motech Industries Inc.a | 53,000 | 67,214 | ||||||
Neo Solar Power Corp.a | 72,000 | 53,775 | ||||||
Newmax Technology Co. Ltd.a | 14,000 | 50,527 | ||||||
Pan-International Industrial Corp. | 48,480 | 39,611 | ||||||
PChome Online Inc. | 6,312 | 35,858 | ||||||
Phihong Technology Co. Ltd. | 70,000 | 40,352 | ||||||
Pixart Imaging Inc. | 21,635 | 42,584 | ||||||
President Securities Corp. | 127,510 | 72,012 | ||||||
Prince Housing & Development Corp. | 48,709 | 31,334 | ||||||
Radium Life Tech Co. Ltd. | 70,557 | 57,413 | ||||||
Ritek Corp.a | 348,000 | 61,751 | ||||||
Sanyang Industry Co. Ltd. | 69,820 | 96,828 | ||||||
Senao International Co. Ltd. | 9,000 | 28,452 | ||||||
Shihlin Electric & Engineering Corp. | 45,000 | 54,136 | ||||||
Shining Building Business Co. Ltd.a | 39,600 | 30,569 | ||||||
Shinkong Synthetic Fibers Corp. | 126,135 | 41,308 | ||||||
Shinkong Textile Co. Ltd. | 27,000 | 34,376 | ||||||
Silitech Technology Corp. | 14,200 | 19,337 | ||||||
Sino-American Silicon Products Inc.a | 58,000 | 66,868 | ||||||
Sinyi Realty Co. | 15,508 | 25,627 | ||||||
Soft-World International Corp. | 21,140 | 44,223 | ||||||
Solar Applied Materials Technology Corp. | 56,799 | 48,401 | ||||||
Solartech Energy Corp.a | 36,000 | 21,414 | ||||||
Sunonwealth Electric Machine Industry Co. Ltd. | 14,000 | 8,211 |
Security | Shares | Value | ||||||
Ta Chen Stainless Pipe Co. Ltd. | 138,600 | $ | 62,759 | |||||
Ta Chong Bank Ltd.a | 96,808 | 30,669 | ||||||
Taichung Commercial Bank Co. Ltd. | 84,285 | 30,701 | ||||||
Taiflex Scientific Co. Ltd. | 21,000 | 34,843 | ||||||
Taiwan Hon Chuan Enterprise Co. Ltd. | 27,000 | 59,369 | ||||||
Taiwan Life Insurance Co. Ltd.a | 48,599 | 33,293 | ||||||
Taiwan Paiho Ltd. | 66,050 | 67,541 | ||||||
Taiwan Secom Co. Ltd. | 30,000 | 71,179 | ||||||
Taiwan Surface Mounting Technology Co. Ltd. | 15,141 | 22,187 | ||||||
Taiwan TEA Corp.a | 57,000 | 35,620 | ||||||
Taiwan-Sogo Shinkong Security Corp. | 63,000 | 76,001 | ||||||
Ton Yi Industrial Corp. | 93,000 | 85,154 | ||||||
Tong Hsing Electronic Industries Ltd. | 12,000 | 62,156 | ||||||
Tong Yang Industry Co. Ltd. | 47,133 | 61,270 | ||||||
Topco Technologies Corp. | 14,000 | 31,299 | ||||||
Tsann Kuen Enterprise Co. Ltd. | 15,000 | 20,852 | ||||||
TTY Biopharm Co. Ltd. | 13,852 | 46,151 | ||||||
TXC Corp. | 36,000 | 48,482 | ||||||
Union Bank of Taiwana | 108,383 | 38,211 | ||||||
Unity Opto Technology Co. Ltd.a | 51,679 | 41,361 | ||||||
UPC Technology Corp. | 46,661 | 21,284 | ||||||
USI Corp. | 48,950 | 32,797 | ||||||
Ve Wong Corp. | 86,000 | 64,663 | ||||||
Visual Photonics Epitaxy Co. Ltd. | 27,900 | 29,229 | ||||||
Wafer Works Corp.a | 84,270 | 33,230 | ||||||
Wah Lee Industrial Corp. | 42,000 | 58,176 | ||||||
Wan Hwa Enterprise Co. | 50,000 | 23,977 | ||||||
Waterland Financial Holdings Co. Ltd. | 168,941 | 54,198 | ||||||
Win Semiconductors Corp. | 36,000 | 32,843 | ||||||
Winbond Electronics Corp.a | 295,000 | 67,923 | ||||||
Wintek Corp.a | 112,000 | 45,849 | ||||||
WT Microelectronics Co. Ltd. | 30,299 | 33,970 | ||||||
Yageo Corp.a | 183,000 | 60,909 | ||||||
YFY Inc. | 157,000 | 76,599 | ||||||
Yieh Phui Enterprise Co. Ltd. | 201,014 | 63,143 | ||||||
YungShin Global Holding Corp. | 35,000 | 57,896 | ||||||
Yungtay Engineering Co. Ltd. | 28,000 | 64,937 | ||||||
Zinwell Corp. | 39,000 | 39,294 | ||||||
|
| |||||||
6,430,115 | ||||||||
THAILAND — 3.81% |
| |||||||
Amata Corp. PCL NVDR | 93,600 | 49,432 | ||||||
Bumrungrad Hospital PCL NVDR | 36,900 | 89,413 | ||||||
Central Plaza Hotel PCL NVDR | 61,200 | 52,283 | ||||||
Delta Electronics (Thailand) PCL NVDR | 64,500 | 87,663 |
60 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS SMALL-CAP ETF
August 31, 2013
Security | Shares | Value | ||||||
Esso (Thailand) PCL NVDR | 212,300 | $ | 40,890 | |||||
G J Steel PCL NVDRa | 10,545,900 | 22,933 | ||||||
Hana Microelectronics PCL NVDR | 106,800 | 70,337 | ||||||
Hemaraj Land and Development PCL NVDR | 658,900 | 56,904 | ||||||
Jasmine International PCL NVDR | 322,800 | 72,703 | ||||||
Khon Kaen Sugar Industry PCL NVDR | 135,500 | 53,038 | ||||||
Kiatnakin Bank PCL NVDR | 50,432 | 61,885 | ||||||
Pruksa Real Estate PCL NVDR | 69,300 | 33,800 | ||||||
Sino-Thai Engineering & Construction PCL NVDR | 114,128 | 65,236 | ||||||
Sri Trang Agro-Industry PCL NVDR | 164,700 | 68,049 | ||||||
Supalai PCL NVDR | 110,300 | 43,517 | ||||||
Thai Airways International PCL NVDR | 66,300 | 33,366 | ||||||
Thai Tap Water Supply PCL NVDR | 261,200 | 79,520 | ||||||
Thai Vegetable Oil PCL NVDR | 101,200 | 53,760 | ||||||
Thanachart Capital PCL NVDR | 77,000 | 77,144 | ||||||
TISCO Financial Group PCL NVDR | 50,740 | 55,957 | ||||||
|
| |||||||
1,167,830 | ||||||||
TURKEY — 2.19% |
| |||||||
Bagfas Bandirma Gubre Fabrikalari AS | 2,234 | 37,813 | ||||||
Bizim Toptan Satis Magazalari AS | 4,242 | 51,718 | ||||||
Eczacibasi Yatirim Holding Ortakligi AS | 22,468 | 63,714 | ||||||
Ihlas Holding ASa,b | 106,428 | 40,728 | ||||||
Kardemir Karabuk Demir Celik Sanayi ve TAS Class Da | 161,629 | 79,298 | ||||||
Koza Anadolu Metal Madencilik Isletmeleri ASa | 30,674 | 48,459 | ||||||
Net Holding ASb | 45,555 | 54,534 | ||||||
Nortel Networks Netas Telekomunikasyon AS | 4,230 | 12,493 | ||||||
Polyester Sanayi ASa,b | 101,304 | 38,767 | ||||||
Saf Gayrimenkul Yatirim Ortakligi ASa | 65,922 | 26,844 | ||||||
Tat Konserve Sanayii ASa | 44,214 | 50,977 | ||||||
Tekfen Holding AS | 9,352 | 19,638 | ||||||
Turkiye Sinai Kalkinma Bankasi AS | 92,935 | 77,968 | ||||||
Yazicilar Holding AS | 7,126 | 66,951 | ||||||
|
| |||||||
669,902 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $33,471,699) |
| 30,251,574 |
Security | Shares | Value | ||||||
PREFERRED STOCKS — 0.90% |
| |||||||
BRAZIL — 0.90% |
| |||||||
Banco ABC Brasil SA | 6,126 | $ | 30,795 | |||||
Banco Daycoval SA | 6,000 | 20,015 | ||||||
Banco Industrial e Comercial SA | 6,300 | 10,654 | ||||||
Banco Panamericano SA | 17,711 | 39,189 | ||||||
Companhia de Ferro Ligas da | 7,500 | 42,340 | ||||||
Contax Participacoes SA | 22,500 | 33,979 | ||||||
GOL Linhas Aereas Inteligentes SA | 8,100 | 28,826 | ||||||
Randon SA Implementos e Participacoes | 8,100 | 39,526 | ||||||
Saraiva Livreiros Editores SA | 2,800 | 30,565 | ||||||
|
| |||||||
275,889 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $393,440) |
| 275,889 | ||||||
RIGHTS — 0.00% |
| |||||||
CHILE — 0.00% |
| |||||||
Compania SudAmericana de Vapores SAa | 279,668 | 165 | ||||||
|
| |||||||
165 | ||||||||
POLAND — 0.00% |
| |||||||
Polimex-Mostostal SAa | 65,920 | 753 | ||||||
|
| |||||||
753 | ||||||||
|
| |||||||
TOTAL RIGHTS |
| |||||||
(Cost: $0) |
| 918 | ||||||
SHORT-TERM INVESTMENTS — 1.99% |
| |||||||
MONEY MARKET FUNDS — 1.99% |
| |||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.15%d,e,f | 573,701 | 573,701 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.13%d,e,f | 36,430 | 36,430 | ||||||
|
| |||||||
610,131 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $610,131) |
| 610,131 | ||||||
|
|
CONSOLIDATED SCHEDULESOF INVESTMENTS | 61 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS SMALL-CAP ETF
August 31, 2013
Value | ||||||
TOTAL INVESTMENTS | ||||||
(Cost: $34,475,270) | $ | 31,138,512 | ||||
Other Assets, Less Liabilities — (1.61)% | (494,759 | ) | ||||
|
| |||||
NET ASSETS — 100.00% | $ | 30,643,753 | ||||
|
|
CPO — Certificates of Participation (Ordinary)
NVDR — Non-Voting Depositary Receipts
SP GDR — Sponsored Global Depositary Receipts
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 5. |
c | Security valued using Level 3 inputs in accordance with management’s fair valuation policy. See Note 1. |
d | 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.
62 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments
iSHARES® MSCI EMERGING MARKETS VALUE ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 91.56% |
| |||||||
BRAZIL — 4.28% |
| |||||||
Banco do Brasil SA | 3,500 | $ | 33,937 | |||||
Banco Santander (Brasil) SA Units | 6,000 | 34,427 | ||||||
BM&F Bovespa SA | 12,000 | 59,011 | ||||||
Centrais Eletricas Brasileiras SA | 500 | 1,041 | ||||||
Companhia Siderurgica Nacional SA | 3,000 | 10,626 | ||||||
CPFL Energia SA | 1,000 | 8,203 | ||||||
EDP Energias do Brasil SA | 2,000 | 9,002 | ||||||
Embraer SA | 1,500 | 12,355 | ||||||
JBS SA | 2,500 | 7,740 | ||||||
MRV Engenharia e Participacoes SA | 1,500 | 5,256 | ||||||
Petroleo Brasileiro SA | 18,500 | 124,283 | ||||||
Porto Seguro SA | 500 | 5,408 | ||||||
Sul America SA Units | 1,000 | 5,889 | ||||||
TIM Participacoes SA | 2,500 | 9,864 | ||||||
Tractebel Energia SA | 1,000 | 14,387 | ||||||
Transmissora Alianca de Energia Eletrica SA | 500 | 4,627 | ||||||
Vale SA | 8,000 | 115,834 | ||||||
|
| |||||||
461,890 | ||||||||
CHILE — 1.87% |
| |||||||
AES Gener SA | 12,020 | 7,769 | ||||||
Aguas Andinas SA Series A | 16,620 | 11,470 | ||||||
Banco de Chile | 116,133 | 16,603 | ||||||
Banco Santander (Chile) SA | 429,925 | 24,050 | ||||||
CorpBanca SA | 920,930 | 8,755 | ||||||
E.CL SA | 2,940 | 3,840 | ||||||
Empresa Nacional de Electricidad SA | 20,295 | 27,694 | ||||||
Empresa Nacional de Telecomunicaciones SA | 725 | 11,493 | ||||||
Empresas CMPC SA | 8,191 | 24,190 | ||||||
Empresas Copec SA | 1,425 | 18,949 | ||||||
Enersis SA | 124,730 | 39,501 | ||||||
Vina Concha y Toro SA | 4,165 | 7,594 | ||||||
|
| |||||||
201,908 | ||||||||
CHINA — 19.25% |
| |||||||
Agile Property Holdings Ltd. | 10,000 | 10,652 | ||||||
Agricultural Bank of China Ltd. Class H | 132,000 | 56,685 | ||||||
Anta Sports Products Ltd. | 5,000 | 6,461 | ||||||
Bank of China Ltd. Class H | 460,000 | 193,387 | ||||||
Bank of Communications Co. Ltd. Class H | 50,000 | 33,014 | ||||||
China Agri-Industries Holdings Ltd. | 11,800 | 5,539 |
Security | Shares | Value | ||||||
China BlueChemical Ltd. Class H | 10,000 | $ | 5,249 | |||||
China CITIC Bank Corp. Ltd. Class H | 50,000 | 23,857 | ||||||
China Coal Energy Co. Class H | 20,000 | 11,787 | ||||||
China Communications Construction Co. Ltd. Class H | 25,000 | 19,150 | ||||||
China Communications Services Corp. Ltd. Class H | 10,000 | 6,719 | ||||||
China Construction Bank Corp. Class H | 445,000 | 325,957 | ||||||
China COSCO Holdings Co. Ltd. Class Ha | 7,500 | 3,443 | ||||||
China Everbright Ltd. | 10,000 | 13,463 | ||||||
China International Marine Containers (Group) Co. Ltd. Class H | 2,000 | 3,301 | ||||||
China Merchants Holdings (International) Co. Ltd.b | 10,000 | 33,787 | ||||||
China Minsheng Banking Corp. Ltd. Class H | 20,000 | 21,510 | ||||||
China Mobile Ltd. | 37,500 | 403,078 | ||||||
China National Building Material Co. Ltd. Class H | 10,000 | 9,195 | ||||||
China Petroleum & Chemical | 156,000 | 112,457 | ||||||
China Resources Cement Holdings Ltd. | 10,000 | 6,345 | ||||||
China Shanshui Cement Group Ltd. | 15,000 | 5,958 | ||||||
China Shipping Container Lines Co. Ltd. Class Ha | 30,000 | 7,660 | ||||||
China Southern Airlines Co. Ltd. Class H | 10,000 | 3,405 | ||||||
China Telecom Corp. Ltd. Class H | 80,000 | 40,338 | ||||||
Chongqing Rural Commercial Bank Co. Ltd. Class H | 15,000 | 6,751 | ||||||
CITIC Pacific Ltd.b | 10,000 | 11,568 | ||||||
CITIC Securities Co. Ltd. Class H | 7,500 | 14,605 | ||||||
COSCO Pacific Ltd. | 10,000 | 14,701 | ||||||
Datang International Power Generation Co. Ltd. Class H | 20,000 | 8,614 | ||||||
Evergrande Real Estate Group Ltd.a,b | 30,000 | 12,767 | ||||||
Fosun International Ltd. | 12,500 | 9,108 | ||||||
Franshion Properties (China) Ltd. | 20,000 | 6,938 | ||||||
GCL-Poly Energy Holdings Ltd.a | 55,000 | 14,540 | ||||||
GOME Electrical Appliances Holdings Ltd.a | 90,000 | 9,285 | ||||||
Guangdong Investment Ltd. | 10,000 | 8,279 | ||||||
Guangzhou Automobile Group Co. | 10,000 | 10,201 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 63 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS VALUE ETF
August 31, 2013
Security | Shares | Value | ||||||
Haitong Securities Co. Ltd. Class H | 4,000 | $ | 5,798 | |||||
Industrial and Commercial Bank of China Ltd. Class H | 445,000 | 292,099 | ||||||
Jiangsu Expressway Co. Ltd. Class H | 10,000 | 11,335 | ||||||
Jiangxi Copper Co. Ltd. Class H | 10,000 | 19,266 | ||||||
Kingboard Chemical Holdings Co. Ltd. | 3,500 | 7,610 | ||||||
Lee & Man Paper Manufacturing Ltd. | 5,000 | 2,960 | ||||||
Parkson Retail Group Ltd. | 7,500 | 2,950 | ||||||
PetroChina Co. Ltd. Class H | 130,000 | 141,494 | ||||||
Poly Property Group Co. Ltd. | 5,000 | 3,024 | ||||||
Shanghai Electric Group Co. Ltd. Class H | 20,000 | 7,402 | ||||||
Shanghai Industrial Holdings Ltd. | 5,000 | 16,378 | ||||||
Shougang Fushan Resources Group Ltd.b | 20,000 | 6,706 | ||||||
Shui On Land Ltd. | 23,333 | 7,222 | ||||||
Sino-Ocean Land Holdings Ltd.b | 10,000 | 5,919 | ||||||
SOHO China Ltd. | 15,000 | 12,748 | ||||||
Yanzhou Coal Mining Co. Ltd. Class H | 10,000 | 8,898 | ||||||
Yuexiu Property Co. Ltd. | 40,000 | 11,297 | ||||||
Zhejiang Expressway Co. Ltd. Class H | 10,000 | 8,369 | ||||||
Zijin Mining Group Co. Ltd. Class Hb | 30,000 | 7,544 | ||||||
Zoomlion Heavy Industry Science and Technology Co. Ltd. Class Hb | 9,000 | 7,010 | ||||||
|
| |||||||
2,075,783 | ||||||||
COLOMBIA — 0.81% |
| |||||||
Ecopetrol SA SP ADR | 1,965 | 87,757 | ||||||
|
| |||||||
87,757 | ||||||||
CZECH REPUBLIC — 0.31% |
| |||||||
CEZ AS | 905 | 20,860 | ||||||
Telefonica O2 Czech Republic AS | 825 | 12,293 | ||||||
|
| |||||||
33,153 | ||||||||
EGYPT — 0.23% |
| |||||||
Orascom Telecom Holding SAE SP GDRa,c | 8,318 | 24,821 | ||||||
|
| |||||||
24,821 | ||||||||
HUNGARY — 0.19% |
| |||||||
Magyar Telekom Telecommunications PLC | 3,390 | 4,668 | ||||||
OTP Bank PLC | 850 | 15,752 | ||||||
|
| |||||||
20,420 | ||||||||
INDIA — 5.42% |
| |||||||
ACC Ltd. | 370 | 5,399 | ||||||
Aditya Birla Nuvo Ltd. | 375 | 6,448 |
Security | Shares | Value | ||||||
Ambuja Cements Ltd. | 4,265 | $ | 11,077 | |||||
Axis Bank Ltd. | 42 | 530 | ||||||
Bajaj Auto Ltd. | 525 | 14,597 | ||||||
Bank of Baroda | 495 | 3,452 | ||||||
Bank of India | 1,090 | 2,348 | ||||||
Bharat Heavy Electricals Ltd. | 3,945 | 7,105 | ||||||
Bharat Petroleum Corp. Ltd. | 1,180 | 4,876 | ||||||
Cairn India Ltd. | 3,045 | 14,780 | ||||||
Canara Bank Ltd. | 870 | 2,670 | ||||||
Coal India Ltd. | 2,190 | 8,333 | ||||||
DLF Ltd. | 2,785 | 5,471 | ||||||
GAIL (India) Ltd. | 2,650 | 11,850 | ||||||
Hero Motocorp Ltd. | 270 | 8,363 | ||||||
Hindalco Industries Ltd. | 6,675 | 10,613 | ||||||
ICICI Bank Ltd. | 1,065 | 12,956 | ||||||
Infosys Ltd. | 2,810 | 132,094 | ||||||
Infrastructure Development Finance | 948 | 1,155 | ||||||
Jaiprakash Associates Ltd. | 5,065 | 2,537 | ||||||
Jindal Steel & Power Ltd. | 2,100 | 7,051 | ||||||
JSW Steel Ltd. | 510 | 4,180 | ||||||
Larsen & Toubro Ltd. | 992 | 10,879 | ||||||
LIC Housing Finance Ltd. | 1,441 | 3,618 | ||||||
Mahindra & Mahindra Ltd. | 2,035 | 24,125 | ||||||
NTPC Ltd. | 5,580 | 11,055 | ||||||
Oil & Natural Gas Corp. Ltd. | 4,470 | 16,856 | ||||||
Oil India Ltd. | 370 | 2,434 | ||||||
Piramal Enterprises Ltd. | 610 | 5,803 | ||||||
Power Finance Corp. Ltd. | 1,780 | 2,939 | ||||||
Power Grid Corp. of India Ltd. | 7,665 | 11,329 | ||||||
Reliance Capital Ltd. | 870 | 4,112 | ||||||
Reliance Communications Ltd. | 2,565 | 4,783 | ||||||
Reliance Industries Ltd. | 7,930 | 102,483 | ||||||
Reliance Infrastructure Ltd. | 710 | 3,678 | ||||||
Rural Electrification Corp. Ltd. | 1,855 | 4,741 | ||||||
Sesa Goa Ltd. | 2,320 | 6,628 | ||||||
Sesa Goa Ltd. New | 5,409 | 15,453 | ||||||
Shriram Transport Finance Co. Ltd. | 725 | 5,689 | ||||||
State Bank of India | 870 | 20,001 | ||||||
Tata Motors Ltd. | 2,340 | 10,599 | ||||||
Tata Power Co. Ltd. | 6,720 | 7,715 | ||||||
Tata Steel Ltd. | 1,955 | 8,108 | ||||||
Unitech Ltd.a | 7,155 | 1,792 | ||||||
Wipro Ltd. | 3,016 | 22,076 | ||||||
|
| |||||||
584,781 |
64 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS VALUE ETF
August 31, 2013
Security | Shares | Value | ||||||
INDONESIA — 2.59% |
| |||||||
PT Adaro Energy Tbk | 95,000 | $ | 8,091 | |||||
PT Astra Agro Lestari Tbk | 2,500 | 4,522 | ||||||
PT Astra International Tbk | 85,000 | 47,092 | ||||||
PT Bank Danamon Indonesia Tbk | 22,500 | 8,345 | ||||||
PT Bank Mandiri (Persero) Tbk | 20,000 | 13,004 | ||||||
PT Bank Negara Indonesia | 50,000 | 17,628 | ||||||
PT Bank Rakyat Indonesia | 70,000 | 42,308 | ||||||
PT Bukit Asam (Persero) Tbk | 5,000 | 5,540 | ||||||
PT Gudang Garam Tbk | 2,500 | 8,688 | ||||||
PT Indo Tambangraya Megah Tbk | 2,500 | 7,337 | ||||||
PT Indofood Sukses Makmur Tbk | 27,500 | 16,369 | ||||||
PT Matahari Department Store Tbka | 5,000 | 5,701 | ||||||
PT Perusahaan Gas Negara | 37,500 | 18,544 | ||||||
PT Telekomunikasi Indonesia | 287,500 | 57,921 | ||||||
PT United Tractors Tbk | 10,000 | 14,469 | ||||||
PT XL Axiata Tbk | 10,000 | 4,098 | ||||||
|
| |||||||
279,657 | ||||||||
MALAYSIA — 3.92% |
| |||||||
Alliance Financial Group Bhd | 7,000 | 10,762 | ||||||
AMMB Holdings Bhd | 11,500 | 26,013 | ||||||
Berjaya Sports Toto Bhd | 4,071 | 4,945 | ||||||
British American Tobacco | 500 | 9,459 | ||||||
Genting Malaysia Bhd | 18,000 | 23,070 | ||||||
IHH Healthcare Bhda | 9,500 | 11,598 | ||||||
IOI Corp. Bhd | 18,000 | 29,591 | ||||||
Lafarge Malaysia Bhd | 3,000 | 8,640 | ||||||
Malayan Banking Bhd | 26,500 | 80,676 | ||||||
Malaysia Airports Holdings Bhd | 4,000 | 8,500 | ||||||
Maxis Bhd | 9,000 | 18,741 | ||||||
MISC Bhda | 7,500 | 10,777 | ||||||
Parkson Holdings Bhd | 6,000 | 6,119 | ||||||
Petronas Chemicals Group Bhd | 16,000 | 32,246 | ||||||
PPB Group Bhd | 3,500 | 14,214 | ||||||
RHB Capital Bhd | 3,500 | 7,970 | ||||||
Sime Darby Bhd | 17,500 | 50,027 | ||||||
Telekom Malaysia Bhd | 4,000 | 6,588 | ||||||
Tenaga Nasional Bhd | 18,500 | 49,168 | ||||||
YTL Corp. Bhd | 14,000 | 6,606 |
Security | Shares | Value | ||||||
YTL Power International Bhd | 15,500 | $ | 7,550 | |||||
|
| |||||||
423,260 | ||||||||
MEXICO — 5.25% |
| |||||||
Alfa SAB de CV Series A | 17,500 | 44,235 | ||||||
America Movil SAB de CV Series L | 115,000 | 110,762 | ||||||
Cemex SAB de CV CPOa | 69,840 | 79,349 | ||||||
Coca-Cola FEMSA SAB de | 500 | 5,961 | ||||||
Compartamos SAB de CV | 6,000 | 10,529 | ||||||
Controladora Comercial Mexicana SAB de CV BC Units | 3,000 | 11,369 | ||||||
Fibra Uno Administracion SA de CV | 8,300 | 24,362 | ||||||
Fomento Economico Mexicano SAB de CV BD Units | 6,500 | 61,573 | ||||||
Grupo Aeroportuario del Pacifico SAB de CV Series B | 2,000 | 9,980 | ||||||
Grupo Aeroportuario del Sureste SAB de CV Series B | 1,500 | 16,846 | ||||||
Grupo Carso SAB de CV Series A1 | 2,000 | 9,883 | ||||||
Grupo Comercial Chedraui SA de CV | 3,000 | 8,578 | ||||||
Grupo Financiero Inbursa SAB de | 3,500 | 7,466 | ||||||
Grupo Financiero Santander Mexico SAB de CV Series B | 10,500 | 28,617 | ||||||
Grupo Mexico SAB de CV Series B | 12,500 | 35,762 | ||||||
Grupo Televisa SAB de CV CPO | 9,500 | 47,699 | ||||||
Industrias CH SAB de CV Series Ba | 1,500 | 8,626 | ||||||
Industrias Penoles SAB de CV | 875 | 26,724 | ||||||
Kimberly-Clark de Mexico SAB de | 5,000 | 14,178 | ||||||
OHL Mexico SAB de CVa | 1,500 | 3,904 | ||||||
|
| |||||||
566,403 | ||||||||
PERU — 0.43% |
| |||||||
Compania de Minas Buenaventura SA SP ADR | 1,479 | 18,680 | ||||||
Southern Copper Corp. | 995 | 27,362 | ||||||
|
| |||||||
46,042 | ||||||||
PHILIPPINES — 0.93% |
| |||||||
Aboitiz Equity Ventures Inc. | 5,600 | 5,776 | ||||||
Aboitiz Power Corp. | 13,000 | 9,473 | ||||||
Alliance Global Group Inc.a | 10,500 | 6,121 | ||||||
Ayala Corp. | 800 | 9,776 | ||||||
Bank of the Philippine Islands | 4,900 | 10,108 | ||||||
BDO Unibank Inc. | 9,500 | 15,762 | ||||||
Globe Telecom Inc. | 225 | 7,673 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 65 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS VALUE ETF
August 31, 2013
Security | Shares | Value | ||||||
Metro Pacific Investments Corp. | 47,000 | $ | 5,532 | |||||
Metropolitan Bank & Trust Co. | 2,990 | 5,464 | ||||||
Philippine Long Distance | 250 | 16,132 | ||||||
SM Investments Corp. | 563 | 8,458 | ||||||
|
| |||||||
100,275 | ||||||||
POLAND — 1.47% |
| |||||||
Jastrzebska Spolka Weglowa SA | 340 | 7,133 | ||||||
Kernel Holding SAa | 220 | 3,221 | ||||||
KGHM Polska Miedz SA | 825 | 31,239 | ||||||
Polska Grupa Energetyczna SA | 4,250 | 22,302 | ||||||
Polski Koncern Naftowy Orlen SA | 2,000 | 27,791 | ||||||
Powszechna Kasa Oszczednosci Bank Polski SAa | 3,621 | 42,845 | ||||||
Synthos SA | 3,305 | 4,522 | ||||||
Tauron Polska Energia SA | 7,365 | 9,736 | ||||||
Telekomunikacja Polska SA | 4,155 | 9,817 | ||||||
|
| |||||||
158,606 | ||||||||
RUSSIA — 5.35% |
| |||||||
Federal Grid Co. of Unified Energy System OJSCa | 1,950,000 | 6,205 | ||||||
Gazprom OAO | 71,350 | 282,589 | ||||||
INTER RAO UES OJSCa | 8,000,000 | 2,842 | ||||||
LUKOIL OAO | 3,155 | 182,320 | ||||||
Rosneft Oil Co. OJSC | 3,850 | 28,477 | ||||||
RusHydro OJSC | 225,000 | 3,652 | ||||||
Severstal OAO | 1,600 | 13,255 | ||||||
Sistema JSFC SP GDRc | 365 | 8,081 | ||||||
Surgutneftegas OJSC | 25,500 | 19,963 | ||||||
VTB Bank OJSC | 22,500,000 | 30,065 | ||||||
|
| |||||||
577,449 | ||||||||
SOUTH AFRICA — 7.24% |
| |||||||
African Bank Investments Ltd. | 4,675 | 7,455 | ||||||
African Rainbow Minerals Ltd. | 350 | 6,436 | ||||||
Anglo American Platinum Ltd.a | 170 | 6,802 | ||||||
AngloGold Ashanti Ltd. | 685 | 9,364 | ||||||
Assore Ltd. | 215 | 8,230 | ||||||
Barclays Africa Group Ltd. | 1,825 | 24,414 | ||||||
Barloworld Ltd. | 1,370 | 11,740 | ||||||
Exxaro Resources Ltd. | 725 | 11,496 | ||||||
FirstRand Ltd. | 19,360 | 56,845 | ||||||
Gold Fields Ltd. | 4,745 | 24,978 | ||||||
Growthpoint Properties Ltd. | 11,710 | 27,157 | ||||||
Harmony Gold Mining Co. Ltd. | 2,080 | 7,850 | ||||||
Impala Platinum Holdings Ltd. | 3,170 | 35,133 |
Security | Shares | Value | ||||||
Imperial Holdings Ltd. | 1,220 | $ | 24,806 | |||||
Investec Ltd. | 1,615 | 10,478 | ||||||
Kumba Iron Ore Ltd. | 430 | 18,895 | ||||||
Liberty Holdings Ltd. | 920 | 10,331 | ||||||
MMI Holdings Ltd. | 7,205 | 14,472 | ||||||
Nampak Ltd. | 2,749 | 8,053 | ||||||
Nedbank Group Ltd. | 1,310 | 24,115 | ||||||
PPC Ltd. | 1,560 | 4,513 | ||||||
Redefine Properties Ltd. | 19,470 | 17,415 | ||||||
Remgro Ltd. | 2,930 | 53,502 | ||||||
Reunert Ltd. | 1,380 | 9,217 | ||||||
RMB Holdings Ltd. | 4,755 | 18,772 | ||||||
RMI Holdings Ltd. | 4,175 | 10,547 | ||||||
Sappi Ltd.a | 3,785 | 9,044 | ||||||
Sasol Ltd. | 3,345 | 157,379 | ||||||
Standard Bank Group Ltd. | 7,965 | 89,053 | ||||||
Steinhoff International Holdings Ltd.a | 7,305 | 20,943 | ||||||
Tiger Brands Ltd. | 455 | 12,563 | ||||||
Vodacom Group Ltd. | 2,515 | 28,502 | ||||||
|
| |||||||
780,500 | ||||||||
SOUTH KOREA — 15.81% |
| |||||||
BS Financial Group Inc. | 990 | 12,709 | ||||||
Coway Co. Ltd. | 120 | 6,356 | ||||||
Daelim Industrial Co. Ltd. | 148 | 11,666 | ||||||
Daewoo Engineering & Construction | 600 | 3,989 | ||||||
Daewoo Securities Co. Ltd. | 1,100 | 9,265 | ||||||
Daewoo Shipbuilding & Marine Engineering Co. Ltd. | 650 | 17,362 | ||||||
DGB Financial Group Inc. | 810 | 11,347 | ||||||
Dongbu Insurance Co. Ltd. | 300 | 12,729 | ||||||
Doosan Corp. | 50 | 6,238 | ||||||
Doosan Heavy Industries & | 356 | 13,678 | ||||||
Doosan Infracore Co. Ltd.a | 300 | 3,662 | ||||||
GS Engineering & Construction Corp. | 240 | 7,654 | ||||||
GS Holdings Corp. | 350 | 17,878 | ||||||
Hana Financial Group Inc. | 1,615 | 50,921 | ||||||
Hanwha Chemical Corp. | 600 | 9,567 | ||||||
Hanwha Corp. | 300 | 8,810 | ||||||
Hanwha Life Insurance Co. Ltd. | 1,200 | 7,027 | ||||||
Hite Jinro Co. Ltd. | 150 | 3,399 | ||||||
Hyosung Corp. | 150 | 9,594 | ||||||
Hyundai Department Store Co. Ltd. | 60 | 8,027 | ||||||
Hyundai Development Co. | 400 | 7,747 |
66 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS VALUE ETF
August 31, 2013
Security | Shares | Value | ||||||
Hyundai Engineering & Construction Co. Ltd. | 460 | $ | 23,786 | |||||
Hyundai Heavy Industries Co. Ltd. | 255 | 52,261 | ||||||
Hyundai Marine & Fire Insurance Co. Ltd. | 350 | 9,333 | ||||||
Hyundai Merchant Marine Co. Ltd.a | 250 | 4,178 | ||||||
Hyundai Mipo Dockyard Co. Ltd. | 80 | 9,729 | ||||||
Hyundai Mobis Co. Ltd. | 420 | 105,563 | ||||||
Hyundai Motor Co. | 950 | 213,099 | ||||||
Hyundai Securities Co. Ltd. | 750 | 3,851 | ||||||
Hyundai Steel Co. | 370 | 24,466 | ||||||
Industrial Bank of Korea | 1,070 | 10,892 | ||||||
Kangwon Land Inc. | 500 | 12,477 | ||||||
KB Financial Group Inc. | 2,510 | 80,723 | ||||||
KCC Corp. | 30 | 11,310 | ||||||
Kia Motors Corp. | 1,045 | 63,262 | ||||||
Korea Electric Power Corp.a | 1,550 | 42,867 | ||||||
Korea Gas Corp. | 150 | 7,500 | ||||||
Korea Investment Holdings Co. Ltd. | 250 | 8,851 | ||||||
Korea Zinc Co. Ltd. | 48 | 13,816 | ||||||
KT Corp. SP ADR | 365 | 5,866 | ||||||
KT&G Corp. | 635 | 41,531 | ||||||
Kumho Petro Chemical Co. Ltd. | 90 | 7,475 | ||||||
LG Chem Ltd. | 285 | 73,814 | ||||||
LG Corp. | 575 | 34,706 | ||||||
LG Electronics Inc. | 420 | 27,393 | ||||||
Lotte Confectionery Co. Ltd. | 5 | 6,811 | ||||||
Lotte Shopping Co. Ltd. | 35 | 10,736 | ||||||
Mirae Asset Securities Co. Ltd. | 200 | 5,757 | ||||||
POSCO | 395 | 114,758 | ||||||
S-Oil Corp. | 255 | 17,642 | ||||||
Samsung C&T Corp. | 375 | 19,357 | ||||||
Samsung Card Co. Ltd. | 300 | 9,783 | ||||||
Samsung Engineering Co. Ltd. | 180 | 13,653 | ||||||
Samsung Fire & Marine Insurance | 240 | 54,052 | ||||||
Samsung Heavy Industries Co. Ltd. | 950 | 33,805 | ||||||
Samsung Life Insurance Co. Ltd. | 395 | 37,719 | ||||||
Samsung Securities Co. Ltd. | 350 | 14,157 | ||||||
Shinhan Financial Group Co. Ltd. | 2,610 | 96,166 | ||||||
Shinsegae Co. Ltd. | 35 | 6,322 | ||||||
SK C&C Co. Ltd. | 135 | 13,317 | ||||||
SK Holdings Co. Ltd. | 170 | 28,638 | ||||||
SK Innovation Co. Ltd. | 355 | 44,773 | ||||||
SK Networks Co. Ltd. | 850 | 5,054 |
Security | Shares | Value | ||||||
SK Telecom Co. Ltd. | 65 | $ | 12,970 | |||||
Woori Finance Holdings Co. Ltd. | 2,350 | 23,499 | ||||||
Woori Investment & Securities Co. Ltd. | 850 | 8,347 | ||||||
|
| |||||||
1,705,690 | ||||||||
TAIWAN — 12.02% |
| |||||||
Acer Inc.a | 10,000 | 6,667 | ||||||
Advanced Semiconductor | 35,000 | 30,936 | ||||||
Asia Cement Corp. | 15,300 | 19,122 | ||||||
ASUSTeK Computer Inc. | 5,000 | 39,850 | ||||||
AU Optronics Corp.a | 35,000 | 13,801 | ||||||
Catcher Technology Co. Ltd. | 5,000 | 23,810 | ||||||
Chang Hwa Commercial Bank Ltd. | 16,260 | 8,803 | ||||||
Cheng Uei Precision Industry Co. Ltd. | 5,000 | 9,975 | ||||||
Chicony Electronics Co. Ltd. | 5,050 | 11,678 | ||||||
China Development Financial | 55,000 | 15,090 | ||||||
China Motor Co. Ltd. | 5,000 | 4,311 | ||||||
China Petrochemical Development Corp. | 11,050 | 5,114 | ||||||
China Steel Corp. | 70,840 | 59,892 | ||||||
Chunghwa Telecom Co. Ltd. | 25,000 | 79,032 | ||||||
Compal Electronics Inc. | 30,000 | 20,201 | ||||||
CTBC Financial Holding Co. Ltd. | 75,529 | 47,577 | ||||||
Evergreen Marine Corp. Ltd.a | 10,000 | 5,648 | ||||||
Far Eastern New Century Corp. | 20,400 | 21,917 | ||||||
Feng Hsin Iron & Steel Co. Ltd. | 5,000 | 8,822 | ||||||
First Financial Holding Co. Ltd. | 48,510 | 28,045 | ||||||
Formosa Chemicals & Fibre Corp. | 20,720 | 53,800 | ||||||
Formosa Plastics Corp. | 26,200 | 65,315 | ||||||
Formosa Taffeta Co. Ltd. | 5,000 | 4,578 | ||||||
Fubon Financial Holding Co. Ltd. | 40,000 | 54,805 | ||||||
Hon Hai Precision Industry Co. Ltd. | 40,000 | 108,540 | ||||||
HTC Corp. | 5,000 | 26,149 | ||||||
Hua Nan Financial Holdings Co. Ltd. | 37,100 | 20,208 | ||||||
Innolux Corp.a | 41,640 | 20,873 | ||||||
Inventec Corp. | 15,000 | 12,206 | ||||||
LCY Chemical Corp. | 5,149 | 6,117 | ||||||
Lite-On Technology Corp. | 15,089 | 25,565 | ||||||
Mega Financial Holding Co. Ltd. | 55,000 | 41,997 | ||||||
Nan Ya Plastics Corp. | 30,360 | 59,453 | ||||||
Pou Chen Corp. | 15,000 | 16,391 | ||||||
Powertech Technology Inc. | 5,000 | 9,140 | ||||||
Quanta Computer Inc. | 15,000 | 31,630 | ||||||
Realtek Semiconductor Corp. | 5,060 | 11,228 | ||||||
Ruentex Development Co. Ltd. | 5,586 | 11,032 |
CONSOLIDATED SCHEDULESOF INVESTMENTS | 67 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS VALUE ETF
August 31, 2013
Security | Shares | Value | ||||||
Shin Kong Financial Holding Co. Ltd.a | 40,000 | $ | 13,501 | |||||
Siliconware Precision Industries Co. Ltd. | 20,000 | 22,456 | ||||||
SinoPac Financial Holdings Co. Ltd. | 10,955 | 4,887 | ||||||
Synnex Technology International Corp. | 10,000 | 15,756 | ||||||
Taishin Financial Holdings Co. Ltd. | 33,207 | 14,315 | ||||||
Taiwan Cement Corp. | 20,000 | 26,400 | ||||||
Taiwan Cooperative Financial Holding Co. Ltd. | 35,153 | 18,796 | ||||||
Taiwan Mobile Co. Ltd. | 5,000 | 18,045 | ||||||
Teco Electric and Machinery Co. Ltd. | 10,000 | 10,476 | ||||||
Tripod Technology Corp. | 5,000 | 9,908 | ||||||
U-Ming Marine Transport Corp. | 5,000 | 7,703 | ||||||
Unimicron Technology Corp. | 10,000 | 8,120 | ||||||
United Microelectronics Corp. | 75,000 | 30,828 | ||||||
Walsin Lihwa Corp.a | 25,000 | 7,394 | ||||||
Wistron Corp. | 15,900 | 14,266 | ||||||
WPG Holdings Co. Ltd. | 10,000 | 11,496 | ||||||
Yuanta Financial Holding Co. Ltd. | 45,000 | 22,557 | ||||||
|
| |||||||
1,296,222 | ||||||||
THAILAND — 2.47% | ||||||||
Advanced Information Service PCL NVDR | 4,000 | 29,823 | ||||||
Bangkok Bank PCL Foreign | 5,500 | 30,926 | ||||||
Bangkok Bank PCL NVDR | 3,500 | 19,463 | ||||||
Bank of Ayudhya PCL NVDR | 8,500 | 10,034 | ||||||
Banpu PCL NVDR | 650 | 5,573 | ||||||
Charoen Pokphand Foods PCL NVDR | 7,000 | 5,045 | ||||||
Krung Thai Bank PCL NVDR | 25,500 | 13,071 | ||||||
PTT Exploration & Production PCL NVDR | 8,000 | 41,379 | ||||||
PTT Global Chemical PCL NVDR | 10,000 | 21,435 | ||||||
PTT PCL NVDR | 5,500 | 55,871 | ||||||
Siam Commercial Bank PCL NVDR | 6,000 | 25,070 | ||||||
Thai Oil PCL NVDR | 3,500 | 5,926 | ||||||
True Corp. PCL NVDRa | 14,500 | 2,928 | ||||||
|
| |||||||
266,544 | ||||||||
TURKEY — 1.72% | ||||||||
Akbank TAS | 4,530 | 15,069 | ||||||
Enka Insaat ve Sanayi AS | 3,045 | 7,305 | ||||||
Eregli Demir ve Celik Fabrikalari TAS | 7,458 | 8,086 | ||||||
Ford Otomotiv Sanayi AS | 530 | 6,631 | ||||||
Haci Omer Sabanci Holding AS | 5,480 | 23,391 | ||||||
KOC Holding AS | 4,315 | 17,444 | ||||||
Turk Hava Yollari AO | 1,582 | 4,905 | ||||||
Turk Telekomunikasyon AS | 2,810 | 8,603 |
Security | Shares | Value | ||||||
Turkcell Iletisim Hizmetleri ASa | 4,600 | $ | 24,148 | |||||
Turkiye Halk Bankasi AS | 1,730 | 11,034 | ||||||
Turkiye Is Bankasi AS Class C | 10,410 | 24,413 | ||||||
Turkiye Petrol Rafinerileri AS | 855 | 16,444 | ||||||
Turkiye Sise ve Cam Fabrikalari AS | 2,435 | 3,142 | ||||||
Turkiye Vakiflar Bankasi TAO Class D | 4,760 | 9,341 | ||||||
Yapi ve Kredi Bankasi AS | 2,810 | 5,597 | ||||||
|
| |||||||
185,553 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $11,115,927) | 9,876,714 | |||||||
PREFERRED STOCKS — 7.82% |
| |||||||
BRAZIL — 6.33% | ||||||||
AES Tiete SA | 1,000 | 8,455 | ||||||
Banco Bradesco SA | 8,000 | 93,253 | ||||||
Banco do Estado do Rio Grande do Sul SA Class B | 1,000 | 6,007 | ||||||
Bradespar SA | 1,500 | 15,567 | ||||||
Centrais Eletricas Brasileiras SA Class B | 2,500 | 9,644 | ||||||
Companhia Energetica de Minas Gerais | 3,385 | 26,485 | ||||||
Companhia Energetica de Sao | 1,000 | 8,939 | ||||||
Companhia Paranaense de | 500 | 6,005 | ||||||
Gerdau SA | 5,000 | 36,072 | ||||||
Itausa — Investimentos Itau SA | 17,521 | 61,617 | ||||||
Metalurgica Gerdau SA | 2,000 | 17,811 | ||||||
Oi SA | 5,500 | 8,190 | ||||||
Petroleo Brasileiro SA | 25,000 | 176,678 | ||||||
Suzano Papel e Celulose SA Class A | 2,000 | 7,908 | ||||||
Telefonica Brasil SA | 2,000 | 39,105 | ||||||
Usinas Siderurgicas de Minas Gerais | 2,500 | 10,843 | ||||||
Vale SA Class A | 11,500 | 150,450 | ||||||
|
| |||||||
683,029 | ||||||||
RUSSIA — 0.50% | ||||||||
AK Transneft OAO | 10 | 22,971 | ||||||
Surgutneftegas OJSC | 46,000 | 31,079 | ||||||
|
| |||||||
�� | 54,050 | |||||||
SOUTH KOREA — 0.99% | ||||||||
Hyundai Motor Co. Ltd. | 140 | 13,117 | ||||||
Hyundai Motor Co. Ltd. Series 2 | 235 | 23,711 | ||||||
LG Chem Ltd. | 30 | 3,567 |
68 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS VALUE ETF
August 31, 2013
Security | Shares | Value | ||||||
Samsung Electronics Co. Ltd. | 80 | $ | 66,231 | |||||
|
| |||||||
106,626 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS | ||||||||
(Cost: $1,094,679) | 843,705 | |||||||
SHORT-TERM INVESTMENTS — 0.80% |
| |||||||
MONEY MARKET FUNDS — 0.80% | ||||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.15%d,e,f | 61,490 | 61,490 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.13%d,e,f | 3,904 | 3,904 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.00%d,e | 20,512 | 20,512 | ||||||
|
| |||||||
85,906 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $85,906) | 85,906 | |||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $12,296,512) |
| 10,806,325 | ||||||
Other Assets, Less Liabilities — (0.18)% |
| (19,715 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 10,786,610 | |||||
|
|
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 | 69 |
Table of Contents
Consolidated Statements of Assets and Liabilities
iSHARES®, INC.
August 31, 2013
iShares MSCI BRIC ETF | iShares MSCI Emerging Markets Asia ETF | iShares MSCI Emerging Markets Consumer Discretionary ETF | ||||||||||
ASSETS | ||||||||||||
Investments, at cost: | ||||||||||||
Unaffiliated | $ | 529,637,973 | $ | 32,690,347 | $ | 2,451,021 | ||||||
Affiliated (Note 2) | 12,401,110 | 836,626 | 22,581 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments | $ | 542,039,083 | $ | 33,526,973 | $ | 2,473,602 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 471,763,805 | $ | 31,180,054 | $ | 2,501,405 | ||||||
Affiliated (Note 2) | 12,401,110 | 836,626 | 22,581 | |||||||||
|
|
|
|
|
| |||||||
Total fair value of investments | 484,164,915 | 32,016,680 | 2,523,986 | |||||||||
Foreign currency, at valueb | 1,389,773 | 108,399 | 3,602 | |||||||||
Cash | 1,425,899 | 134,414 | 2,365 | |||||||||
Receivables: | ||||||||||||
Investment securities sold | 2,081,107 | 44,608 | 45,151 | |||||||||
Dividends and interest | 800,636 | 59,633 | 1,950 | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 489,862,330 | 32,363,734 | 2,577,054 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 3,017,300 | 108,028 | 44,784 | |||||||||
Collateral for securities on loan (Note 5) | 11,405,051 | 822,742 | 22,581 | |||||||||
Line of credit (Note 7) | 300,020 | 66,004 | — | |||||||||
Foreign taxes (Note 1) | — | 6,719 | 120 | |||||||||
Investment advisory fees (Note 2) | 279,018 | 19,447 | 1,456 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 15,001,389 | 1,022,940 | 68,941 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 474,860,941 | $ | 31,340,794 | $ | 2,508,113 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 705,025,795 | $ | 42,371,700 | $ | 3,272,295 | ||||||
Undistributed net investment income | 275,301 | 336,245 | 2,847 | |||||||||
Accumulated net realized loss | (172,498,793 | ) | (9,856,153 | ) | (817,297 | ) | ||||||
Net unrealized appreciation (depreciation) | (57,941,362 | ) | (1,510,998 | ) | 50,268 | |||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 474,860,941 | $ | 31,340,794 | $ | 2,508,113 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingc | 13,800,000 | 600,000 | 50,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 34.41 | $ | 52.23 | $ | 50.16 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $10,665,008, $771,650 and $21,290, respectively. See Note 5. |
b | Cost of foreign currency: $1,390,651, $108,774 and $3,711, respectively. |
c | $0.001 par value, number of shares authorized: 500 million, 500 million and 500 million, respectively. |
See notes to consolidated financial statements.
70 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Statements of Assets and Liabilities (Continued)
iSHARES®, INC.
August 31, 2013
iShares MSCI Emerging Markets Energy Capped ETF | iShares MSCI Emerging Markets Growth ETF | iShares MSCI Emerging Markets Minimum Volatility ETF | ||||||||||
ASSETS | ||||||||||||
Investments, at cost: | ||||||||||||
Unaffiliated | $ | 2,405,066 | $ | 5,286,278 | $ | 2,592,873,255 | ||||||
Affiliated (Note 2) | 12,473 | 83,620 | 27,892,426 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments | $ | 2,417,539 | $ | 5,369,898 | $ | 2,620,765,681 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 1,788,948 | $ | 5,006,529 | $ | 2,447,487,093 | ||||||
Affiliated (Note 2) | 12,473 | 83,620 | 27,892,426 | |||||||||
|
|
|
|
|
| |||||||
Total fair value of investments | 1,801,421 | 5,090,149 | 2,475,379,519 | |||||||||
Foreign currency, at valueb | 4,991 | 9,528 | 1,045,794 | |||||||||
Cash | — | 8,139 | — | |||||||||
Receivables: | ||||||||||||
Investment securities sold | 27,619 | 7,382 | 2,515,212 | |||||||||
Dividends and interest | 3,041 | 5,556 | 6,661,374 | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 1,837,072 | 5,120,754 | 2,485,601,899 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 29,854 | 8,525 | 5,503,679 | |||||||||
Collateral for securities on loan (Note 5) | 1,045 | 83,620 | 23,517,751 | |||||||||
Foreign taxes (Note 1) | — | 207 | 325,008 | |||||||||
Investment advisory fees (Note 2) | 1,057 | 2,124 | 527,989 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 31,956 | 94,476 | 29,874,427 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 1,805,116 | $ | 5,026,278 | $ | 2,455,727,472 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 3,421,694 | $ | 5,931,623 | $ | 2,616,321,608 | ||||||
Undistributed net investment income | 3,193 | 20,197 | 15,887,809 | |||||||||
Accumulated net realized loss | (1,003,550 | ) | (645,443 | ) | (30,971,606 | ) | ||||||
Net unrealized depreciation | (616,221 | ) | (280,099 | ) | (145,510,339 | ) | ||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 1,805,116 | $ | 5,026,278 | $ | 2,455,727,472 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingc | 50,000 | 100,000 | 44,200,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 36.10 | $ | 50.26 | $ | 55.56 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $979, $78,740 and $20,878,523, respectively. See Note 5. |
b | Cost of foreign currency: $5,057, $9,764 and $1,048,980, 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 | 71 |
Table of Contents
Consolidated Statements of Assets and Liabilities (Continued)
iSHARES®, INC.
August 31, 2013
iShares MSCI Emerging Markets Small-Cap ETF | iShares MSCI Emerging Markets Value ETF | |||||||
ASSETS | ||||||||
Investments, at cost: | ||||||||
Unaffiliated | $ | 33,865,139 | $ | 12,210,606 | ||||
Affiliated (Note 2) | 610,131 | 85,906 | ||||||
|
|
|
| |||||
Total cost of investments | $ | 34,475,270 | $ | 12,296,512 | ||||
|
|
|
| |||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||
Unaffiliated | $ | 30,528,381 | $ | 10,720,419 | ||||
Affiliated (Note 2) | 610,131 | 85,906 | ||||||
|
|
|
| |||||
Total fair value of investments | 31,138,512 | 10,806,325 | ||||||
Foreign currency, at valueb | 75,580 | 12,628 | ||||||
Cash | 139,605 | 13,624 | ||||||
Receivables: | ||||||||
Investment securities sold | 445,226 | 31,550 | ||||||
Dividends and interest | 71,932 | 27,714 | ||||||
|
|
|
| |||||
Total Assets | 31,870,855 | 10,891,841 | ||||||
|
|
|
| |||||
LIABILITIES | ||||||||
Payables: | ||||||||
Investment securities purchased | 521,831 | 33,216 | ||||||
Collateral for securities on loan (Note 5) | 610,131 | 65,394 | ||||||
Line of credit (Note 7) | 75,005 | — | ||||||
Foreign taxes (Note 1) | 1,889 | 1,417 | ||||||
Investment advisory fees (Note 2) | 18,246 | 5,204 | ||||||
|
|
|
| |||||
Total Liabilities | 1,227,102 | 105,231 | ||||||
|
|
|
| |||||
NET ASSETS | $ | 30,643,753 | $ | 10,786,610 | ||||
|
|
|
| |||||
Net assets consist of: | ||||||||
Paid-in capital | $ | 42,204,841 | $ | 13,193,893 | ||||
Undistributed net investment income | 171,259 | 48,204 | ||||||
Accumulated net realized loss | (8,394,348 | ) | (964,183 | ) | ||||
Net unrealized depreciation | (3,337,999 | ) | (1,491,304 | ) | ||||
|
|
|
| |||||
NET ASSETS | $ | 30,643,753 | $ | 10,786,610 | ||||
|
|
|
| |||||
Shares outstandingc | 700,000 | 250,000 | ||||||
|
|
|
| |||||
Net asset value per share | $ | 43.78 | $ | 43.15 | ||||
|
|
|
|
a | Securities on loan with values of $552,007 and $61,501, respectively. See Note 5. |
b | Cost of foreign currency: $76,470 and $12,764, respectively. |
c | $0.001 par value, number of shares authorized: 500 million and 500 million, respectively. |
See notes to consolidated financial statements.
72 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Statements of Operations
iSHARES®, INC.
Year ended August 31, 2013
iShares MSCI BRIC ETF | iShares MSCI Emerging | iShares MSCI Emerging | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliateda | $ | 18,622,697 | $ | 1,828,143 | $ | 35,316 | ||||||
Interest — unaffiliated | — | 197 | — | |||||||||
Interest — affiliated (Note 2) | 251 | 26 | 1 | |||||||||
Securities lending income — affiliated (Note 2) | 416,439 | 463 | 923 | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 19,039,387 | 1,828,829 | 36,240 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 4,460,564 | 481,059 | 16,966 | |||||||||
Mauritius income taxes (Note 1) | 41,919 | — | — | |||||||||
Commitment fees (Note 7) | 4,004 | 220 | 7 | |||||||||
Interest expense (Note 7) | 1,183 | 58 | — | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 4,507,670 | 481,337 | 16,973 | |||||||||
Less investment advisory fees waived (Note 2) | — | (134,414 | ) | — | ||||||||
|
|
|
|
|
| |||||||
Net expenses | 4,507,670 | 346,923 | 16,973 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 14,531,717 | 1,481,906 | 19,267 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | (35,987,444 | ) | (9,990,369 | ) | (41,972 | ) | ||||||
In-kind redemptions — unaffiliated | 8,167,432 | (2,878,663 | ) | — | ||||||||
Foreign currency transactions | (462,708 | ) | (133,284 | ) | (839 | ) | ||||||
|
|
|
|
|
| |||||||
Net realized loss | (28,282,720 | ) | (13,002,316 | ) | (42,811 | ) | ||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments | 18,978,431 | 188,403 | 138,235 | |||||||||
Translation of assets and liabilities in foreign currencies | (24,878 | ) | (690 | ) | (115 | ) | ||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | 18,953,553 | 187,713 | 138,120 | |||||||||
|
|
|
|
|
| |||||||
Net realized and unrealized gain (loss) | (9,329,167 | ) | (12,814,603 | ) | 95,309 | |||||||
|
|
|
|
|
| |||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | 5,202,550 | $ | (11,332,697 | ) | $ | 114,576 | |||||
|
|
|
|
|
|
a | Net of foreign withholding tax of $1,766,927, $236,633 and $5,555, respectively. |
See notes to consolidated financial statements.
CONSOLIDATED FINANCIAL STATEMENTS | 73 |
Table of Contents
Consolidated Statements of Operations (Continued)
iSHARES®, INC.
Year ended August 31, 2013
iShares MSCI Emerging Markets Energy Capped ETF | iShares MSCI Emerging Markets Growth ETF | iShares MSCI Emerging Markets Minimum Volatility ETF | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliateda | $ | 65,522 | $ | 73,234 | $ | 47,764,125 | ||||||
Interest — unaffiliated | — | — | 900 | |||||||||
Interest — affiliated (Note 2) | 2 | 2 | 433 | |||||||||
Securities lending income — affiliated (Note 2) | 20 | 673 | 96,734 | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 65,544 | 73,909 | 47,862,192 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 13,558 | 24,208 | 9,484,500 | |||||||||
Commitment fees (Note 7) | 6 | 12 | 954 | |||||||||
Interest expense (Note 7) | — | — | 1,157 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 13,564 | 24,220 | 9,486,611 | |||||||||
Less investment advisory fees waived (Note 2) | — | (6,764 | ) | (5,941,097 | ) | |||||||
|
|
|
|
|
| |||||||
Net expenses | 13,564 | 17,456 | 3,545,514 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 51,980 | 56,453 | 44,316,678 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | (87,056 | ) | (340,074 | ) | (26,319,296 | ) | ||||||
In-kind redemptions — unaffiliated | — | (149,503 | ) | 5,516,977 | ||||||||
Foreign currency transactions | (1,965 | ) | 964 | (694,927 | ) | |||||||
|
|
|
|
|
| |||||||
Net realized loss | (89,021 | ) | (488,613 | ) | (21,497,246 | ) | ||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments | (118,744 | ) | 188,523 | (153,485,365 | ) | |||||||
Translation of assets and liabilities in foreign currencies | (104 | ) | (195 | ) | (121,374 | ) | ||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | (118,848 | ) | 188,328 | (153,606,739 | ) | |||||||
|
|
|
|
|
| |||||||
Net realized and unrealized loss | (207,869 | ) | (300,285 | ) | (175,103,985 | ) | ||||||
|
|
|
|
|
| |||||||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (155,889 | ) | $ | (243,832 | ) | $ | (130,787,307 | ) | |||
|
|
|
|
|
|
a | Net of foreign withholding tax of $9,100, $9,059 and $7,058,023, respectively. |
See notes to consolidated financial statements.
74 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Statements of Operations (Continued)
iSHARES®, INC.
Year ended August 31, 2013
iShares MSCI Emerging Markets Small-Cap ETF | iShares MSCI Emerging Markets Value ETF | |||||||
NET INVESTMENT INCOME | ||||||||
Dividends — unaffiliateda | $ | 585,683 | $ | 337,346 | ||||
Interest — affiliated (Note 2) | 12 | 5 | ||||||
Securities lending income — affiliated (Note 2) | 359 | 217 | ||||||
|
|
|
| |||||
Total investment income | 586,054 | 337,568 | ||||||
|
|
|
| |||||
EXPENSES | ||||||||
Investment advisory fees (Note 2) | 133,724 | 68,841 | ||||||
Commitment fees (Note 7) | 38 | 23 | ||||||
Interest expense (Note 7) | 14 | 10 | ||||||
|
|
|
| |||||
Total expenses | 133,776 | 68,874 | ||||||
Less investment advisory fees waived (Note 2) | — | (19,235 | ) | |||||
|
|
|
| |||||
Net expenses | 133,776 | 49,639 | ||||||
|
|
|
| |||||
Net investment income | 452,278 | 287,929 | ||||||
|
|
|
| |||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||
Net realized gain (loss) from: | ||||||||
Investments — unaffiliated | 207,324 | (783,473 | ) | |||||
In-kind redemptions — unaffiliated | — | (17,398 | ) | |||||
Foreign currency transactions | (14,754 | ) | (8,072 | ) | ||||
|
|
|
| |||||
Net realized gain (loss) | 192,570 | (808,943 | ) | |||||
|
|
|
| |||||
Net change in unrealized appreciation/depreciation on: | ||||||||
Investments | (2,593,089 | ) | (185,992 | ) | ||||
Translation of assets and liabilities in foreign currencies | (1,015 | ) | (1,053 | ) | ||||
|
|
|
| |||||
Net change in unrealized appreciation/depreciation | (2,594,104 | ) | (187,045 | ) | ||||
|
|
|
| |||||
Net realized and unrealized loss | (2,401,534 | ) | (995,988 | ) | ||||
|
|
|
| |||||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (1,949,256 | ) | $ | (708,059 | ) | ||
|
|
|
|
a | Net of foreign withholding tax of $74,286 and $46,396, respectively. |
See notes to consolidated financial statements.
CONSOLIDATED FINANCIAL STATEMENTS | 75 |
Table of Contents
Consolidated Statements of Changes in Net Assets
iSHARES®, INC.
iShares MSCI BRIC ETF | iShares MSCI Emerging Markets Asia ETF | |||||||||||||||
Year ended August 31, 2013 | Year ended August 31, 2012 | Year ended August 31, 2013 | Period from to | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 14,531,717 | $ | 20,024,020 | $ | 1,481,906 | $ | 287,805 | ||||||||
Net realized loss | (28,282,720 | ) | (66,583,732 | ) | (13,002,316 | ) | (102,757 | ) | ||||||||
Net change in unrealized appreciation/depreciation | 18,953,553 | (88,532,330 | ) | 187,713 | (1,698,711 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 5,202,550 | (135,092,042 | ) | (11,332,697 | ) | (1,513,663 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (13,252,516 | ) | (18,504,865 | ) | (1,144,738 | ) | (162,964 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (13,252,516 | ) | (18,504,865 | ) | (1,144,738 | ) | (162,964 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 21,679,666 | 247,215,549 | 208,872,206 | 21,747,292 | ||||||||||||
Cost of shares redeemed | (223,917,437 | ) | (274,663,908 | ) | (185,124,642 | ) | — | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | (202,237,771 | ) | (27,448,359 | ) | 23,747,564 | 21,747,292 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | (210,287,737 | ) | (181,045,266 | ) | 11,270,129 | 20,070,665 | ||||||||||
NET ASSETS | ||||||||||||||||
Beginning of period | 685,148,678 | 866,193,944 | 20,070,665 | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 474,860,941 | $ | 685,148,678 | $ | 31,340,794 | $ | 20,070,665 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of period | $ | 275,301 | $ | (631,851 | ) | $ | 336,245 | $ | 120,446 | |||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 550,000 | 6,050,000 | 3,650,000 | 400,000 | ||||||||||||
Shares redeemed | (5,950,000 | ) | (7,350,000 | ) | (3,450,000 | ) | — | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | (5,400,000 | ) | (1,300,000 | ) | 200,000 | 400,000 | ||||||||||
|
|
|
|
|
|
|
|
a | Commencement of operations. |
See notes to consolidated financial statements.
76 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Emerging Markets Consumer Discretionary ETF | iShares MSCI Emerging Markets Energy Capped ETF | |||||||||||||||
Year ended August 31, 2013 | Period from to | Year ended August 31, 2013 | Period from to | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 19,267 | $ | 43,745 | $ | 51,980 | $ | 176,464 | ||||||||
Net realized loss | (42,811 | ) | (958,390 | ) | (89,021 | ) | (1,795,340 | ) | ||||||||
Net change in unrealized appreciation/depreciation | 138,120 | (87,852 | ) | (118,848 | ) | (497,373 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 114,576 | (1,002,497 | ) | (155,889 | ) | (2,116,249 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (30,681 | ) | (26,130 | ) | (46,822 | ) | (168,198 | ) | ||||||||
Return of capital | — | — | — | (6,779 | ) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (30,681 | ) | (26,130 | ) | (46,822 | ) | (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 (DECREASE) IN NET ASSETS | 83,895 | 2,424,218 | (202,711 | ) | 2,007,827 | |||||||||||
NET ASSETS | ||||||||||||||||
Beginning of period | 2,424,218 | — | 2,007,827 | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 2,508,113 | $ | 2,424,218 | $ | 1,805,116 | $ | 2,007,827 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed net investment income included in net assets at end of period | $ | 2,847 | $ | 15,100 | $ | 3,193 | $ | — | ||||||||
|
|
|
|
|
|
|
| |||||||||
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 | 77 |
Table of Contents
Consolidated Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Emerging Markets Growth ETF | iShares MSCI Emerging Markets Minimum Volatility ETF | |||||||||||||||
Year ended August 31, 2013 | Period from to August 31, 2012 | Year ended August 31, 2013 | Period from to August 31, 2012 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 56,453 | $ | 131,338 | $ | 44,316,678 | $ | 4,314,839 | ||||||||
Net realized loss | (488,613 | ) | (311,230 | ) | (21,497,246 | ) | (3,849,500 | ) | ||||||||
Net change in unrealized appreciation/depreciation | 188,328 | (468,427 | ) | (153,606,739 | ) | 8,096,400 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting | (243,832 | ) | (648,319 | ) | (130,787,307 | ) | 8,561,739 | |||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (78,638 | ) | (85,048 | ) | (29,485,424 | ) | (2,260,368 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (78,638 | ) | (85,048 | ) | (29,485,424 | ) | (2,260,368 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 2,836,973 | 10,854,325 | 2,246,859,727 | 411,979,067 | ||||||||||||
Cost of shares redeemed | (7,609,183 | ) | — | (18,086,598 | ) | (31,053,364 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | (4,772,210 | ) | 10,854,325 | 2,228,773,129 | 380,925,703 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | (5,094,680 | ) | 10,120,958 | 2,068,500,398 | 387,227,074 | |||||||||||
NET ASSETS | ||||||||||||||||
Beginning of period | 10,120,958 | — | 387,227,074 | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 5,026,278 | $ | 10,120,958 | $ | 2,455,727,472 | $ | 387,227,074 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed net investment income included in net assets at end of period | $ | 20,197 | $ | 40,694 | $ | 15,887,809 | $ | 1,751,482 | ||||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 50,000 | 200,000 | 37,500,000 | 7,600,000 | ||||||||||||
Shares redeemed | (150,000 | ) | — | (300,000 | ) | (600,000 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | (100,000 | ) | 200,000 | 37,200,000 | 7,000,000 | |||||||||||
|
|
|
|
|
|
|
|
a | Commencement of operations. |
See notes to consolidated financial statements.
78 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Emerging Markets Small-Cap ETF | iShares MSCI Emerging Markets Value ETF | |||||||||||||||
Year ended August 31, 2013 | Year ended August 31, 2012 | Year ended August 31, 2013 | Period from to August 31, 2012 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 452,278 | $ | 404,898 | $ | 287,929 | $ | 199,208 | ||||||||
Net realized gain (loss) | 192,570 | (10,768,599 | ) | (808,943 | ) | (206,720 | ) | |||||||||
Net change in unrealized appreciation/depreciation | (2,594,104 | ) | 643,945 | (187,045 | ) | (1,304,259 | ) | |||||||||
|
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|
|
|
|
| |||||||||
Net decrease in net assets resulting from operations | (1,949,256 | ) | (9,719,756 | ) | (708,059 | ) | (1,311,771 | ) | ||||||||
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| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (514,561 | ) | (500,104 | ) | (279,968 | ) | (148,491 | ) | ||||||||
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| |||||||||
Total distributions to shareholders | (514,561 | ) | (500,104 | ) | (279,968 | ) | (148,491 | ) | ||||||||
|
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| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 24,419,011 | 9,491,705 | 7,122,017 | 10,520,963 | ||||||||||||
Cost of shares redeemed | — | (60,026,674 | ) | (4,408,081 | ) | — | ||||||||||
|
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|
|
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|
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| |||||||||
Net increase (decrease) in net assets from capital share transactions | 24,419,011 | (50,534,969 | ) | 2,713,936 | 10,520,963 | |||||||||||
|
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| |||||||||
INCREASE (DECREASE) IN NET ASSETS | 21,955,194 | (60,754,829 | ) | 1,725,909 | 9,060,701 | |||||||||||
NET ASSETS | ||||||||||||||||
Beginning of period | 8,688,559 | 69,443,388 | 9,060,701 | — | ||||||||||||
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| |||||||||
End of period | $ | 30,643,753 | $ | 8,688,559 | $ | 10,786,610 | $ | 9,060,701 | ||||||||
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| |||||||||
Undistributed net investment income included in net assets at end of period | $ | 171,259 | $ | 237,427 | $ | 48,204 | $ | 43,741 | ||||||||
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| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 500,000 | 200,000 | 150,000 | 200,000 | ||||||||||||
Shares redeemed | — | (1,400,000 | ) | (100,000 | ) | — | ||||||||||
|
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|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | 500,000 | (1,200,000 | ) | 50,000 | 200,000 | |||||||||||
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|
a | Commencement of operations. |
See notes to consolidated financial statements.
CONSOLIDATED FINANCIAL STATEMENTS | 79 |
Table of Contents
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI BRIC ETF | ||||||||||||||||||||
Year ended Aug. 31, 2013 (Consolidated) | Year ended Aug. 31, 2012 (Consolidated) | Year ended Aug. 31, 2011 (Consolidated) | Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | ||||||||||||||||
Net asset value, beginning of year | $ | 35.68 | $ | 42.25 | $ | 42.94 | $ | 37.57 | $ | 44.13 | ||||||||||
|
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|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.84 | 0.98 | 0.89 | 0.66 | 0.58 | |||||||||||||||
Net realized and unrealized gain (loss)b | (1.25 | ) | (6.62 | ) | (0.58 | ) | 5.35 | (6.60 | ) | |||||||||||
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|
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|
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| |||||||||||
Total from investment operations | (0.41 | ) | (5.64 | ) | 0.31 | 6.01 | (6.02 | ) | ||||||||||||
|
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|
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| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.86 | ) | (0.93 | ) | (1.00 | ) | (0.64 | ) | (0.54 | ) | ||||||||||
|
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|
|
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|
|
|
| |||||||||||
Total distributions | (0.86 | ) | (0.93 | ) | (1.00 | ) | (0.64 | ) | (0.54 | ) | ||||||||||
|
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|
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| |||||||||||
Net asset value, end of year | $ | 34.41 | $ | 35.68 | $ | 42.25 | $ | 42.94 | $ | 37.57 | ||||||||||
|
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|
|
|
|
|
|
| |||||||||||
Total return | (1.17 | )% | (13.33 | )% | 0.49 | % | 15.95 | % | (13.08 | )% | ||||||||||
|
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|
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| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 474,861 | $ | 685,149 | $ | 866,194 | $ | 946,814 | $ | 497,839 | ||||||||||
Ratio of expenses to average net assets | 0.67 | % | 0.69 | % | 0.67 | % | 0.69 | % | 0.72 | % | ||||||||||
Ratio of expenses to average net assets prior to waived feesc | n/a | n/a | 0.67 | % | n/a | n/a | ||||||||||||||
Ratio of net investment income to average net assets | 2.18 | % | 2.55 | % | 1.86 | % | 1.52 | % | 1.87 | % | ||||||||||
Portfolio turnover rated | 10 | % | 32 | % | 13 | % | 9 | % | 7 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | 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 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, 2013, August 31, 2012, August 31, 2011, August 31, 2010 and August 31, 2009 were 9%, 20%, 10%, 8% and 6%, respectively. See Note 4. |
See notes to consolidated financial statements.
80 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Emerging Markets Asia ETF |
Year ended Aug. 31, 2013 | Period from to | |||||||
Net asset value, beginning of period | $ | 50.18 | $ | 54.71 | ||||
|
|
|
| |||||
Income from investment operations: | ||||||||
Net investment incomeb | 1.15 | 0.87 | ||||||
Net realized and unrealized gain (loss)c | 1.82 | (4.99 | ) | |||||
|
|
|
| |||||
Total from investment operations | 2.97 | (4.12 | ) | |||||
|
|
|
| |||||
Less distributions from: | ||||||||
Net investment income | (0.92 | ) | (0.41 | ) | ||||
|
|
|
| |||||
Total distributions | (0.92 | ) | (0.41 | ) | ||||
|
|
|
| |||||
Net asset value, end of period | $ | 52.23 | $ | 50.18 | ||||
|
|
|
| |||||
Total return | 5.88 | % | (7.52 | )%d | ||||
|
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|
| |||||
Ratios/Supplemental data: | ||||||||
Net assets, end of period (000s) | $ | 31,341 | $ | 20,071 | ||||
Ratio of expenses to average net assetse | 0.49 | % | 0.49 | % | ||||
Ratio of expenses to average net assets prior to waived feese | 0.68 | % | 0.68 | % | ||||
Ratio of net investment income to average net assetse | 2.09 | % | 3.05 | % | ||||
Portfolio turnover ratef | 174 | % | 3 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout each period. |
c | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
d | Not annualized. |
e | Annualized for periods of less than one year. |
f | Portfolio turnover rates exclude portfolio securities received or delivered in Creation Units but include portfolio transactions that are executed as a result of the Fund processing capital share transactions in Creation Units partially for cash in U.S. dollars. Excluding such cash transactions, the portfolio turnover rates for the year ended August 31, 2013 and the period ended August 31, 2012 were 21% and 3%, respectively. See Note 4. |
See notes to consolidated financial statements.
CONSOLIDATED FINANCIAL HIGHLIGHTS | 81 |
Table of Contents
Consolidated Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Emerging Markets Consumer Discretionary ETF |
Year ended Aug. 31, 2013 | Period from to | |||||||
Net asset value, beginning of period | $ | 48.48 | $ | 51.54 | ||||
|
|
|
| |||||
Income from investment operations: | ||||||||
Net investment incomeb | 0.39 | 0.26 | ||||||
Net realized and unrealized gain (loss)c | 1.90 | (3.19 | ) | |||||
|
|
|
| |||||
Total from investment operations | 2.29 | (2.93 | ) | |||||
|
|
|
| |||||
Less distributions from: | ||||||||
Net investment income | (0.61 | ) | (0.13 | ) | ||||
|
|
|
| |||||
Total distributions | (0.61 | ) | (0.13 | ) | ||||
|
|
|
| |||||
Net asset value, end of period | $ | 50.16 | $ | 48.48 | ||||
|
|
|
| |||||
Total return | 4.73 | % | (5.68 | )%d | ||||
|
|
|
| |||||
Ratios/Supplemental data: | ||||||||
Net assets, end of period (000s) | $ | 2,508 | $ | 2,424 | ||||
Ratio of expenses to average net assetse | 0.67 | % | 0.68 | % | ||||
Ratio of net investment income to average net assetse | 0.76 | % | 0.94 | % | ||||
Portfolio turnover ratef | 10 | % | 54 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout each period. |
c | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
d | Not annualized. |
e | Annualized for periods of less than one year. |
f | Portfolio turnover rates exclude portfolio securities received or delivered in Creation Units but include portfolio transactions that are executed as a result of the Fund processing capital share transactions in Creation Units partially for cash in U.S. dollars. Excluding such cash transactions, the portfolio turnover rates for the year ended August 31, 2013 and the period ended August 31, 2012 were 10% and 5%, respectively. See Note 4. |
See notes to consolidated financial statements.
82 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Emerging Markets Energy Capped ETF
Year ended Aug. 31, 2013 | Period from to Aug. 31, 2012 | |||||||
Net asset value, beginning of period | $ | 40.16 | $ | 51.12 | ||||
|
|
|
| |||||
Income from investment operations: | ||||||||
Net investment incomeb | 1.04 | 1.05 | ||||||
Net realized and unrealized lossc | (4.16 | ) | (11.14 | ) | ||||
|
|
|
| |||||
Total from investment operations | (3.12 | ) | (10.09 | ) | ||||
|
|
|
| |||||
Less distributions from: | ||||||||
Net investment income | (0.94 | ) | (0.84 | ) | ||||
Return of capital | — | (0.03 | ) | |||||
|
|
|
| |||||
Total distributions | (0.94 | ) | (0.87 | ) | ||||
|
|
|
| |||||
Net asset value, end of period | $ | 36.10 | $ | 40.16 | ||||
|
|
|
| |||||
Total return | (7.73 | )% | (19.71 | )%d | ||||
|
|
|
| |||||
Ratios/Supplemental data: | ||||||||
Net assets, end of period (000s) | $ | 1,805 | $ | 2,008 | ||||
Ratio of expenses to average net assetse | 0.67 | % | 0.68 | % | ||||
Ratio of net investment income to average net assetse | 2.56 | % | 4.23 | % | ||||
Portfolio turnover ratef | 7 | % | 29 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout each period. |
c | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
d | Not annualized. |
e | Annualized for periods of less than one year. |
f | Portfolio turnover rates exclude portfolio securities received or delivered in Creation Units but include portfolio transactions that are executed as a result of the Fund processing capital share transactions in Creation Units partially for cash in U.S. dollars. Excluding such cash transactions, the portfolio turnover rates for the year ended August 31, 2013 and the period ended August 31, 2012 were 7% and 3%, respectively. See Note 4. |
See notes to consolidated financial statements.
CONSOLIDATED FINANCIAL HIGHLIGHTS | 83 |
Table of Contents
Consolidated Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Emerging Markets Growth ETF |
Year ended Aug. 31, 2013 | Period from to Aug. 31, 2012 | |||||||
Net asset value, beginning of period | $ | 50.60 | $ | 54.24 | ||||
|
|
|
| |||||
Income from investment operations: | ||||||||
Net investment incomeb | 0.85 | 0.66 | ||||||
Net realized and unrealized gain (loss)c | 0.13 | (3.87 | ) | |||||
|
|
|
| |||||
Total from investment operations | 0.98 | (3.21 | ) | |||||
|
|
|
| |||||
Less distributions from: | ||||||||
Net investment income | (1.32 | ) | (0.43 | ) | ||||
|
|
|
| |||||
Total distributions | (1.32 | ) | (0.43 | ) | ||||
|
|
|
| |||||
Net asset value, end of period | $ | 50.26 | $ | 50.60 | ||||
|
|
|
| |||||
Total return | 1.76 | % | (5.90 | )%d | ||||
|
|
|
| |||||
Ratios/Supplemental data: | ||||||||
Net assets, end of period (000s) | $ | 5,026 | $ | 10,121 | ||||
Ratio of expenses to average net assetse | 0.49 | % | 0.49 | % | ||||
Ratio of expenses to average net assets prior to waived feese | 0.68 | % | 0.68 | % | ||||
Ratio of net investment income to average net assetse | 1.59 | % | 2.27 | % | ||||
Portfolio turnover ratef | 64 | % | 12 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout each period. |
c | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
d | Not annualized. |
e | Annualized for periods of less than one year. |
f | Portfolio turnover rates exclude portfolio securities received or delivered in Creation Units but include portfolio transactions that are executed as a result of the Fund processing capital share transactions in Creation Units partially for cash in U.S. dollars. Excluding such cash transactions, the portfolio turnover rates for the year ended August 31, 2013 and the period ended August 31, 2012 were 28% and 12%, respectively. See Note 4. |
See notes to consolidated financial statements.
84 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Emerging Markets Minimum Volatility ETF |
Year ended Aug. 31, 2013 | Period from to Aug. 31, 2012 | |||||||
Net asset value, beginning of period | $ | 55.32 | $ | 49.30 | ||||
|
|
|
| |||||
Income from investment operations: | ||||||||
Net investment incomeb | 1.85 | 1.93 | ||||||
Net realized and unrealized gain (loss)c | (0.60 | ) | 5.41 | |||||
|
|
|
| |||||
Total from investment operations | 1.25 | 7.34 | ||||||
|
|
|
| |||||
Less distributions from: | ||||||||
Net investment income | (1.01 | ) | (1.32 | ) | ||||
|
|
|
| |||||
Total distributions | (1.01 | ) | (1.32 | ) | ||||
|
|
|
| |||||
Net asset value, end of period | $ | 55.56 | $ | 55.32 | ||||
|
|
|
| |||||
Total return | 2.22 | % | 15.16 | %d | ||||
|
|
|
| |||||
Ratios/Supplemental data: | ||||||||
Net assets, end of period (000s) | $ | 2,455,727 | $ | 387,227 | ||||
Ratio of expenses to average net assetse | 0.25 | % | 0.25 | % | ||||
Ratio of expenses to average net assets prior to waived feese | 0.67 | % | 0.69 | % | ||||
Ratio of net investment income to average net assetse | 3.13 | % | 4.08 | % | ||||
Portfolio turnover ratef | 23 | % | 31 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout each period. |
c | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
d | Not annualized. |
e | Annualized for periods of less than one year. |
f | Portfolio turnover rates exclude portfolio securities received or delivered in Creation Units but include portfolio transactions that are executed as a result of the Fund processing capital share transactions in Creation Units partially for cash in U.S. dollars. Excluding such cash transactions, the portfolio turnover rates for the year ended August 31, 2013 and the period ended August 31, 2012 were 23% and 16%, respectively. 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 each period)
iShares MSCI Emerging Markets Small-Cap ETF |
Year ended Aug. 31, 2013 | Year ended Aug. 31, 2012 | Period from to Aug. 31, 2011 | ||||||||||
Net asset value, beginning of period | $ | 43.44 | $ | 49.60 | $ | 50.54 | ||||||
|
|
|
|
|
| |||||||
Income from investment operations: | ||||||||||||
Net investment incomeb | 1.07 | 0.50 | 0.07 | |||||||||
Net realized and unrealized gain (loss)c | 1.13 | (5.52 | ) | (1.01 | ) | |||||||
|
|
|
|
|
| |||||||
Total from investment operations | 2.20 | (5.02 | ) | (0.94 | ) | |||||||
|
|
|
|
|
| |||||||
Less distributions from: | ||||||||||||
Net investment income | (1.86 | ) | (1.14 | ) | — | |||||||
|
|
|
|
|
| |||||||
Total distributions | (1.86 | ) | (1.14 | ) | — | |||||||
|
|
|
|
|
| |||||||
Net asset value, end of period | $ | 43.78 | $ | 43.44 | $ | 49.60 | ||||||
|
|
|
|
|
| |||||||
Total return | 4.85 | % | (9.98 | )% | (1.86 | )%d | ||||||
|
|
|
|
|
| |||||||
Ratios/Supplemental data: | ||||||||||||
Net assets, end of period (000s) | $ | 30,644 | $ | 8,689 | $ | 69,443 | ||||||
Ratio of expenses to average net assetse | 0.67 | % | 0.69 | % | 0.69 | % | ||||||
Ratio of net investment income to average net assetse | 2.26 | % | 1.13 | % | 3.33 | % | ||||||
Portfolio turnover ratef | 21 | % | 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 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 31,2013, August 31, 2012 and the period ended August 31, 2011 were 21%, 17% and 2%, respectively. See Note 4. |
See notes to consolidated financial statements.
86 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Emerging Markets Value ETF |
Year ended Aug. 31, 2013 | Period from to Aug. 31, 2012 | |||||||
Net asset value, beginning of period | $ | 45.30 | $ | 52.58 | ||||
|
|
|
| |||||
Income from investment operations: | ||||||||
Net investment incomeb | 1.34 | 1.00 | ||||||
Net realized and unrealized lossc | (2.11 | ) | (7.54 | ) | ||||
|
|
|
| |||||
Total from investment operations | (0.77 | ) | (6.54 | ) | ||||
|
|
|
| |||||
Less distributions from: | ||||||||
Net investment income | (1.38 | ) | (0.74 | ) | ||||
|
|
|
| |||||
Total distributions | (1.38 | ) | (0.74 | ) | ||||
|
|
|
| |||||
Net asset value, end of period | $ | 43.15 | $ | 45.30 | ||||
|
|
|
| |||||
Total return | (1.83 | )% | (12.41 | )%d | ||||
|
|
|
| |||||
Ratios/Supplemental data: | ||||||||
Net assets, end of period (000s) | $ | 10,787 | $ | 9,061 | ||||
Ratio of expenses to average net assetse | 0.49 | % | 0.49 | % | ||||
Ratio of expenses to average net assets prior to waived feese | 0.68 | % | 0.68 | % | ||||
Ratio of net investment income to average net assetse | 2.84 | % | 3.73 | % | ||||
Portfolio turnover ratef | 47 | % | 12 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout each period. |
c | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
d | Not annualized. |
e | Annualized for periods of less than one year. |
f | Portfolio turnover rates exclude portfolio securities received or delivered in Creation Units but include portfolio transactions that are executed as a result of the Fund processing capital share transactions in Creation Units partially for cash in U.S. dollars. Excluding such cash transactions, the portfolio turnover rates for the year ended August 31, 2013 and the period ended August 31, 2012 were 26% and 12%, respectively. See Note 4. |
See notes to consolidated financial statements.
CONSOLIDATED FINANCIAL HIGHLIGHTS | 87 |
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 ETF | Former Namea | Diversification Classification | ||
MSCI BRIC | iShares MSCI BRIC Index Fund | Diversified | ||
MSCI Emerging Markets Asia | iShares MSCI Emerging Markets Asia Index Fund | Diversified | ||
MSCI Emerging Markets Consumer Discretionary | iShares MSCI Emerging Markets Consumer Discretionary Sector Index Fund | Non-diversified | ||
MSCI Emerging Markets Energy Capped | iShares MSCI Emerging Markets Energy Sector Capped Index Fund | Non-diversified | ||
MSCI Emerging Markets Growth | iShares MSCI Emerging Markets Growth Index Fund | Non-diversified | ||
MSCI Emerging Markets Minimum Volatility | iShares MSCI Emerging Markets Minimum Volatility Index Fund | Non-diversified | ||
MSCI Emerging Markets Small-Cap | Emerging Markets Small Cap Index Fund | Non-diversified | ||
MSCI Emerging Markets Value | iShares MSCI Emerging Markets Value Index Fund | Non-diversified |
a | The Funds changed their names effective July 1, 2013. |
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”), 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.
Non-diversified funds generally hold securities of fewer issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers.
Each Fund invests in securities of non-U.S. issuers that trade in non-U.S. markets. This involves 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. These risks are heightened for investments in emerging market and frontier market countries.
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
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iSHARES®, INC.
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 and, for financial reporting purposes, as of the report date should the reporting period end on a day that the Fund’s listing exchange is not 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 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, reviews of 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
NOTESTO CONSOLIDATED FINANCIAL STATEMENTS | 89 |
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iSHARES®, INC.
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 is not necessarily an indication of the risk associated with investing in the 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 Global Valuation Committee’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 Funds’ investments according to the fair value hierarchy as of August 31, 2013. The breakdown of each Fund’s investments into major categories is disclosed in its respective consolidated schedule of investments.
iShares ETF and | Investments | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
MSCI BRIC | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 407,517,213 | $ | 1,007,322 | $ | — | $ | 408,524,535 | ||||||||
Preferred Stocks | 63,190,209 | — | — | 63,190,209 | ||||||||||||
Rights | — | 49,061 | — | 49,061 | ||||||||||||
Money Market Funds | 12,401,110 | — | — | 12,401,110 | ||||||||||||
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| |||||||||
$ | 483,108,532 | $ | 1,056,383 | $ | — | $ | 484,164,915 | |||||||||
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|
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|
| |||||||||
MSCI Emerging Markets Asia | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 30,790,362 | $ | 34,453 | $ | — | $ | 30,824,815 | ||||||||
Preferred Stocks | 353,008 | — | — | 353,008 | ||||||||||||
Rights | — | 2,231 | — | 2,231 | ||||||||||||
Money Market Funds | 836,626 | — | — | 836,626 | ||||||||||||
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|
|
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| |||||||||
$ | 31,979,996 | $ | 36,684 | $ | — | $ | 32,016,680 | |||||||||
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iShares ETF and | Investments | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
MSCI Emerging Markets Consumer Discretionary | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 2,429,554 | $ | — | $ | — | $ | 2,429,554 | ||||||||
Preferred Stocks | 71,851 | — | — | 71,851 | ||||||||||||
Money Market Funds | 22,581 | — | — | 22,581 | ||||||||||||
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|
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| |||||||||
$ | 2,523,986 | $ | — | $ | — | $ | 2,523,986 | |||||||||
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MSCI Emerging Markets Energy Capped | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 1,622,911 | $ | — | $ | — | $ | 1,622,911 | ||||||||
Preferred Stocks | 166,037 | — | — | 166,037 | ||||||||||||
Money Market Funds | 12,473 | — | — | 12,473 | ||||||||||||
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|
|
| |||||||||
$ | 1,801,421 | $ | — | $ | — | $ | 1,801,421 | |||||||||
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| |||||||||
MSCI Emerging Markets Growth | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 4,732,869 | $ | 5,279 | $ | — | $ | 4,738,148 | ||||||||
Preferred Stocks | 267,907 | — | — | 267,907 | ||||||||||||
Rights | — | 474 | — | 474 | ||||||||||||
Money Market Funds | 83,620 | — | — | 83,620 | ||||||||||||
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| |||||||||
$ | 5,084,396 | $ | 5,753 | $ | — | $ | 5,090,149 | |||||||||
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| |||||||||
MSCI Emerging Markets Minimum Volatility | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 2,344,679,350 | $ | — | $ | — | $ | 2,344,679,350 | ||||||||
Preferred Stocks | 102,807,743 | — | — | 102,807,743 | ||||||||||||
Money Market Funds | 27,892,426 | — | — | 27,892,426 | ||||||||||||
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| |||||||||
$ | 2,475,379,519 | $ | — | $ | — | $ | 2,475,379,519 | |||||||||
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MSCI Emerging Markets Small-Cap | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 30,197,895 | $ | 51,946 | $ | 1,733 | $ | 30,251,574 | ||||||||
Preferred Stocks | 275,889 | — | — | 275,889 | ||||||||||||
Rights | 165 | 753 | — | 918 | ||||||||||||
Money Market Funds | 610,131 | — | — | 610,131 | ||||||||||||
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$ | 31,084,080 | $ | 52,699 | $ | 1,733 | $ | 31,138,512 | |||||||||
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MSCI Emerging Markets Value | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 9,861,261 | $ | 15,453 | $ | — | $ | 9,876,714 | ||||||||
Preferred Stocks | 843,705 | — | — | 843,705 | ||||||||||||
Money Market Funds | 85,906 | — | — | 85,906 | ||||||||||||
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$ | 10,790,872 | $ | 15,453 | $ | — | $ | 10,806,325 | |||||||||
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NOTESTO CONSOLIDATED FINANCIAL STATEMENTS | 91 |
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iSHARES®, INC.
The iShares MSCI Emerging Markets Consumer Discretionary ETF had transfers from Level 2 to Level 1 during the year ended August 31, 2013 in the amount of $29,038, measured as of the beginning of the period, resulting from the resumption of trading after a temporary suspension.
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, 2013 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, stock dividends, capital gains on investments, or certain foreign currency transactions. 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 stock dividends are presented as “other foreign taxes,” and foreign taxes on capital gains from sales of investments and foreign taxes on foreign currency transactions are included in their respective net realized gain (loss) categories. Foreign taxes payable as of August 31, 2013, 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 legislative changes enacted by the 2012 India Finance Act (“the Act”) and its general anti-avoidance rules (“GAAR”), which are effective April 1, 2013 but have been proposed to be deferred until April 1, 2016, 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
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iSHARES®, INC.
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.
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.
RECENT ACCOUNTING STANDARD
In December 2011, the Financial Accounting Standards Board issued guidance to enhance current disclosure requirements on offsetting of certain assets and liabilities and enable financial statement users to compare financial statements prepared under U.S. GAAP and International Financial Reporting Standards (IFRS). The new disclosures are required for investments and derivative financial instruments subject to master netting agreements or similar agreements and require an entity to disclose both gross and net information about such investments and transactions eligible for offset in the statement of assets and liabilities. The scope of the disclosure requirements for offsetting will be limited to certain derivative instruments and securities lending transactions. In addition, the standard requires disclosure of collateral received and posted in connection with master netting agreements or similar agreements. The guidance is effective for financial statements for fiscal years beginning after January 1, 2013, and interim periods within those fiscal years. Management is evaluating the impact of this guidance on the Funds’ financial statements and disclosures.
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.
NOTESTO CONSOLIDATED FINANCIAL STATEMENTS | 93 |
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Notes to Consolidated Financial Statements (Continued)
iSHARES®, INC.
For its investment advisory services to each of the iShares MSCI BRIC, iShares MSCI Emerging Markets Consumer Discretionary, iShares MSCI Emerging Markets Energy Capped, iShares MSCI Emerging Markets Minimum Volatility and iShares MSCI Emerging Markets Small-Cap ETFs, 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 ETF through December 31, 2014 in order to limit total annual operating expenses to 0.25% of average daily net assets.
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 ETF | Investment Advisory Fee | |||
MSCI Emerging Markets Asia | 0.68 | % | ||
MSCI Emerging Markets Growth | 0.68 | |||
MSCI 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 ETFs 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”), an affiliate of BFA, to serve as securities lending agent for the Funds, subject to applicable conditions. 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 Funds retain a portion of securities lending income and remit a remaining portion to BTC as compensation for its services as securities lending agent. The Funds benefit from a borrower default indemnity provided by BlackRock. As securities lending agent, BTC bears all operational costs directly related to securities lending as well as the cost of borrower default indemnification. 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.
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iSHARES®, INC.
For the year ended August 31, 2013, each Fund retained 65% of securities lending income and paid a fee to BTC equal to 35% of such income in the amounts as follows:
iShares ETF | Securities Lending Agent Fees | |||
MSCI BRIC | $ | 224,236 | ||
MSCI Emerging Markets Asia | 249 | |||
MSCI Emerging Markets Consumer Discretionary | 497 | |||
MSCI Emerging Markets Energy Capped | 11 |
iShares ETF | Securities Lending Agent Fees | |||
MSCI Emerging Markets Growth | $ | 362 | ||
MSCI Emerging Markets Minimum Volatility | 52,087 | |||
MSCI Emerging Markets Small-Cap | 193 | |||
MSCI Emerging Markets Value | 117 |
BlackRock Investments, LLC, an affiliate of BFA, is the distributor for each Fund. Pursuant to the 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.
3. | INVESTMENT PORTFOLIO TRANSACTIONS |
Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended August 31, 2013 were as follows:
iShares ETF | Purchases | Sales | ||||||
MSCI BRIC | $ | 66,335,283 | $ | 158,972,835 | ||||
MSCI Emerging Markets Asia | 157,622,794 | 116,893,551 | ||||||
MSCI Emerging Markets Consumer Discretionary | 243,308 | 254,447 | ||||||
MSCI Emerging Markets Energy Capped | 177,976 | 131,002 | ||||||
MSCI Emerging Markets Growth | 2,588,428 | 5,061,088 | ||||||
MSCI Emerging Markets Minimum Volatility | 1,605,097,639 | 320,356,917 | ||||||
MSCI Emerging Markets Small-Cap | 19,867,978 | 4,107,744 | ||||||
MSCI Emerging Markets Value | 6,128,133 | 4,755,379 |
In-kind transactions (see Note 4) for the year ended August 31, 2013 were as follows:
iShares ETF | In-kind Purchases | In-kind Sales | ||||||
MSCI BRIC | $ | 11,678,555 | $ | 120,374,338 | ||||
MSCI Emerging Markets Asia | 54,956,704 | 71,833,276 | ||||||
MSCI Emerging Markets Growth | 1,343,475 | 3,654,055 | ||||||
MSCI Emerging Markets Minimum Volatility | 969,375,894 | 17,302,588 | ||||||
MSCI Emerging Markets Small-Cap | 8,512,195 | — | ||||||
MSCI Emerging Markets Value | 3,521,573 | 2,193,316 |
NOTESTO CONSOLIDATED FINANCIAL STATEMENTS | 95 |
Table of Contents
Notes to Consolidated 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 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 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 may also 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 market value of the loaned securities is determined at the close of each business day of the Funds and any additional required collateral is delivered to the Funds on the next business day. 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.
As of August 31, 2013, any securities on loan were collateralized by cash. The cash collateral received was invested in money market funds managed by BFA. The value of any securities on loan as of August 31, 2013 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.
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. To mitigate these risks, the Funds benefit from a borrower default indemnity provided by BlackRock. BlackRock’s indemnity allows for full replacement of securities lent. Each Fund could suffer a loss if the value of the investments purchased with cash collateral falls below the value of the cash collateral received.
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
96 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Consolidated Financial Statements (Continued)
iSHARES®, INC.
as of August 31, 2013, attributable to passive foreign investment companies, foreign currency transactions and realized gains (losses) from in-kind redemptions, were reclassified to the following accounts:
iShares ETF | Paid-in Capital | Undistributed Net Investment Income/Distributions in Excess of Net Investment Income | Undistributed Net Realized Gain/Accumulated Net Realized Loss | |||||||||
MSCI BRIC | $ | 6,334,490 | $ | (372,049 | ) | $ | (5,962,441 | ) | ||||
MSCI Emerging Markets Asia | (3,123,156 | ) | (121,369 | ) | 3,244,525 | |||||||
MSCI Emerging Markets Consumer Discretionary | — | (839 | ) | 839 | ||||||||
MSCI Emerging Markets Energy Capped | — | (1,965 | ) | 1,965 | ||||||||
MSCI Emerging Markets Growth | (150,492 | ) | 1,688 | 148,804 | ||||||||
MSCI Emerging Markets Minimum Volatility | 5,469,156 | (694,927 | ) | (4,774,229 | ) | |||||||
MSCI Emerging Markets Small-Cap | — | (3,885 | ) | 3,885 | ||||||||
MSCI Emerging Markets Value | (41,006 | ) | (3,498 | ) | 44,504 |
The tax character of distributions paid during the years ended August 31, 2013 and August 31, 2012 was as follows:
iShares ETF | 2013 | 2012 | ||||||
MSCI BRIC | ||||||||
Ordinary income | $ | 13,252,516 | $ | 18,504,865 | ||||
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MSCI Emerging Markets Asia | ||||||||
Ordinary income | $ | 1,144,738 | $ | 162,964 | ||||
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MSCI Emerging Markets Consumer Discretionary | ||||||||
Ordinary income | $ | 30,681 | $ | 26,130 | ||||
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MSCI Emerging Markets Energy Capped | ||||||||
Ordinary income | $ | 46,822 | $ | 168,198 | ||||
Return of capital | — | 6,779 | ||||||
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$ | 46,822 | $ | 174,977 | |||||
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MSCI Emerging Markets Growth | ||||||||
Ordinary income | $ | 78,638 | $ | 85,048 | ||||
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MSCI Emerging Markets Minimum Volatility | ||||||||
Ordinary income | $ | 29,485,424 | $ | 2,260,368 | ||||
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MSCI Emerging Markets Small-Cap | ||||||||
Ordinary income | $ | 514,561 | $ | 500,104 | ||||
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MSCI Emerging Markets Value | ||||||||
Ordinary income | $ | 279,968 | $ | 148,491 | ||||
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NOTESTO CONSOLIDATED FINANCIAL STATEMENTS | 97 |
Table of Contents
Notes to Consolidated Financial Statements (Continued)
iSHARES®, INC.
As of August 31, 2013, the tax components of accumulated net earnings (losses) were as follows:
iShares ETF | Undistributed Ordinary Income | Capital Loss Carryforwards | Net Unrealized Gains (Losses) a | Qualified Late-Year Losses b | Total | |||||||||||||||
MSCI BRIC | $ | 584,402 | $ | (124,774,176 | ) | $ | (69,615,087 | ) | $ | (36,359,993 | ) | $ | (230,164,854 | ) | ||||||
MSCI Emerging Markets Asia | 351,878 | (97,875 | ) | (2,045,288 | ) | (9,239,621 | ) | (11,030,906 | ) | |||||||||||
MSCI Emerging Markets Consumer Discretionary | 2,887 | (769,815 | ) | 44,667 | (41,921 | ) | (764,182 | ) | ||||||||||||
MSCI Emerging Markets Energy Capped | 3,193 | (913,361 | ) | (623,201 | ) | (83,209 | ) | (1,616,578 | ) | |||||||||||
MSCI Emerging Markets Growth | 20,387 | (498,606 | ) | (298,865 | ) | (128,261 | ) | (905,345 | ) | |||||||||||
MSCI Emerging Markets Minimum Volatility | 16,207,006 | (1,230,114 | ) | (161,693,295 | ) | (13,877,733 | ) | (160,594,136 | ) | |||||||||||
MSCI Emerging Markets Small-Cap | 244,568 | (8,288,581 | ) | (3,517,075 | ) | — | (11,561,088 | ) | ||||||||||||
MSCI Emerging Markets Value | 53,146 | (433,576 | ) | (1,915,668 | ) | (111,185 | ) | (2,407,283 | ) |
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, 2014. |
As of August 31, 2013, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:
iShares ETF | Non- Expiring a | Expiring 2017 | Expiring 2018 | Expiring 2019 | Total | |||||||||||||||
MSCI BRIC | $ | 104,204,792 | $ | 1,540,740 | $ | 11,268,086 | $ | 7,760,558 | $ | 124,774,176 | ||||||||||
MSCI Emerging Markets Asia | 97,875 | — | — | — | 97,875 | |||||||||||||||
MSCI Emerging Markets Consumer Discretionary | 769,815 | — | — | — | 769,815 | |||||||||||||||
MSCI Emerging Markets Energy Capped | 913,361 | — | — | — | 913,361 | |||||||||||||||
MSCI Emerging Markets Growth | 498,606 | — | — | — | 498,606 | |||||||||||||||
MSCI Emerging Markets Minimum Volatility | 1,230,114 | — | — | — | 1,230,114 | |||||||||||||||
MSCI Emerging Markets Small-Cap | 8,288,581 | — | — | — | 8,288,581 | |||||||||||||||
MSCI Emerging Markets Value | 433,576 | — | — | — | 433,576 |
a | Must be utilized prior to losses subject to expiration. |
For the year ended August 31, 2013, the iShares MSCI Emerging Markets Minimum Volatility ETF utilized $18,639 of its capital loss carryforwards.
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.
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Notes to Consolidated Financial Statements (Continued)
iSHARES®, INC.
As of August 31, 2013, gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes were as follows:
iShares ETF | Tax Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation (Depreciation) | ||||||||||||
MSCI BRIC | $ | 553,712,808 | $ | 46,591,195 | $ | (116,139,088 | ) | $ | (69,547,893 | ) | ||||||
MSCI Emerging Markets Asia | 34,061,263 | 1,959,073 | (4,003,656 | ) | (2,044,583 | ) | ||||||||||
MSCI Emerging Markets Consumer Discretionary | 2,479,203 | 319,979 | (275,196 | ) | 44,783 | |||||||||||
MSCI Emerging Markets Energy Capped | 2,424,519 | 35,142 | (658,240 | ) | (623,098 | ) | ||||||||||
MSCI Emerging Markets Growth | 5,388,664 | 256,306 | (554,821 | ) | (298,515 | ) | ||||||||||
MSCI Emerging Markets Minimum Volatility | 2,636,948,637 | 79,656,318 | (241,225,436 | ) | (161,569,118 | ) | ||||||||||
MSCI Emerging Markets Small-Cap | 34,654,346 | 1,897,352 | (5,413,186 | ) | (3,515,834 | ) | ||||||||||
MSCI Emerging Markets Value | 12,720,876 | 258,128 | (2,172,679 | ) | (1,914,551 | ) |
Management has reviewed the tax positions as of August 31, 2013, 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 parties to a $125 million credit agreement with State Street Bank and Trust Company, which expires October 30, 2013. The line of credit may be used for temporary or emergency purposes, including redemptions, settlement of trades and rebalancing of portfolio holdings. 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 securities of certain foreign markets.
For the year ended August 31, 2013, the maximum amounts borrowed, the average borrowings and the average interest rates under the credit agreement were as follows:
iShares ETF | Maximum Amount Borrowed | Average Borrowings | Average Interest Rates | |||||||||
MSCI BRIC | $ | 2,700,000 | $ | 107,967 | 1.21 | % | ||||||
MSCI Emerging Markets Asia | 240,000 | 4,802 | 1.19 | |||||||||
MSCI Emerging Markets Minimum Volatility | 5,000,000 | 96,154 | 1.19 | |||||||||
MSCI Emerging Markets Small-Cap | 75,000 | 1,181 | 1.20 | |||||||||
MSCI Emerging Markets Value | 60,000 | 824 | 1.21 |
The iShares MSCI Emerging Markets Consumer Discretionary ETF, The iShares MSCI Emerging Markets Energy Capped ETF and The iShares MSCI Emerging Markets Growth ETF did not borrow under the credit agreement during the year ended August 31, 2013.
NOTESTO CONSOLIDATED FINANCIAL STATEMENTS | 99 |
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Notes to Consolidated Financial Statements (Continued)
iSHARES®, INC.
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 statements.
100 | 2013 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 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 ETF, iShares MSCI Emerging Markets Asia ETF, iShares MSCI Emerging Markets Consumer Discretionary ETF, iShares MSCI Emerging Markets Energy Capped ETF, iShares MSCI Emerging Markets Growth ETF, iShares MSCI Emerging Markets Minimum Volatility ETF, iShares MSCI Emerging Markets Small-Cap ETF and iShares MSCI Emerging Markets Value ETF and their subsidiaries (the “Funds”) at August 31, 2013, 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 consolidated financial statements and consolidated 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, 2013 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
October 23, 2013
REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 101 |
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iSHARES®, INC.
For the fiscal year ended August 31, 2013, 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 ETF | Foreign Source Income Earned | Foreign Taxes Paid | ||||||
MSCI BRIC | $ | 20,389,624 | $ | 1,808,705 | ||||
MSCI Emerging Markets Asia | 2,064,776 | 231,187 | ||||||
MSCI Emerging Markets Consumer Discretionary | 40,871 | 5,266 | ||||||
MSCI Emerging Markets Energy Capped | 74,622 | 8,937 | ||||||
MSCI Emerging Markets Growth | 82,293 | 8,875 | ||||||
MSCI Emerging Markets Minimum Volatility | 54,822,148 | 6,730,833 | ||||||
MSCI Emerging Markets Small-Cap | 659,969 | 71,858 | ||||||
MSCI Emerging Markets Value | 383,742 | 45,531 |
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, 2013:
iShares ETF | Qualified Dividend Income | |||
MSCI BRIC | $ | 12,050,730 | ||
MSCI Emerging Markets Asia | 1,111,656 | |||
MSCI Emerging Markets Consumer Discretionary | 26,903 | |||
MSCI Emerging Markets Energy | 55,759 |
iShares ETF | Qualified Dividend Income | |||
MSCI Emerging Markets Growth | $ | 43,438 | ||
MSCI Emerging Markets Minimum Volatility | 23,761,465 | |||
MSCI Emerging Markets Small-Cap | 223,457 | |||
MSCI Emerging Markets Value | 246,426 | |||
In February 2014, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2013. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.
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Table of Contents
Board Review and Approval of Investment Advisory
Contract
iSHARES®, INC.
I. iShares MSCI BRIC ETF, iShares MSCI Emerging Markets Consumer Discretionary ETF, iShares MSCI Emerging Markets Energy Capped ETF, iShares MSCI Emerging Markets Minimum Volatility ETF and iShares MSCI Emerging Markets Small-Cap ETF.
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 and approve 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 March 7, 2013, April 23, 2013, and May 3, 2013, 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 16, 2013, management presented preliminary 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 5, 2013, to discuss the additional requests. At a meeting held on June 10-11, 2013, the Board, including the Independent Directors, reviewed the 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 the supplemental information management provided at the request of the Independent Directors. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information 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 reached 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 the size, sponsor, inception date, or other differentiating factors included in Lipper’s proprietary selection methodology, 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, and/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 provided in the Lipper Report may or may not provide meaningful direct comparisons to the Funds.
The Board also noted that the investment advisory fee rates 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.
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Board Review and Approval of Investment Advisory
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iSHARES®, INC.
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, 2012, 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 Lipper Group may include funds that are not exchange traded funds or index funds, and that may have different investment objectives and/or benchmarks from the Funds. In addition, the Board noted that each Fund seeks to track its own 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, including detailed information on certain specific iShares funds requested by the Board, was also considered.
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 fee rate and expense level 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, including information about recent and proposed enhancements to the iShares business, including with respect to shareholder servicing and support, 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 during 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 acknowledged that resources to support the iShares funds and their shareholders have been added or enhanced since BlackRock’s acquisition of BFA in December 2009, 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 detailed presentations regarding BFA’s investment and risk management processes and strategies provided at the June 10-11, 2013 meeting and throughout the previous year, 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 the Funds and Profits Realized by BFA and its Affiliates — The Board reviewed information about the profitability to BlackRock 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 analyses 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
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Board Review and Approval of Investment Advisory
Contract (Continued)
iSHARES®, INC.
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 relatively low fee rates established at inception, 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 BlackRock’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 fee rates 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 any of 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 to the Funds, as well as other significant differences in the approach of BFA and its affiliates to the Funds, on one hand, and to the 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 and challenges 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 the “fallout” benefits or 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
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 105 |
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Board Review and Approval of Investment Advisory
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iSHARES®, INC.
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.
Based on the considerations described above, the Board determined that the investment advisory fee rate under each Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that it is in the best interest of each Fund and its shareholders to approve the continuance of the Advisory Contract for the coming year.
II. iShares MSCI Emerging Markets Asia ETF, iShares MSCI Emerging Markets Growth ETF and iShares MSCI Emerging Markets Value ETF.
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 and approve 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 March 7, 2013, April 23, 2013, and May 3, 2013, 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 16, 2013, management presented preliminary 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 5, 2013, to discuss the additional requests. At a meeting held on June 10-11, 2013, the Board, including the Independent Directors, reviewed the 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 the supplemental information management provided at the request of the Independent Directors. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information 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 reached 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 the size, sponsor, inception date, or other differentiating factors included in Lipper’s proprietary selection methodology, 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, and/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
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Board Review and Approval of Investment Advisory
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iSHARES®, INC.
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 provided in the Lipper Report may or may not provide meaningful direct comparisons to the Funds.
The Board also noted that the investment advisory fee rates 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, 2012, 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 Lipper Group may include funds that are not exchange traded funds or index funds, and that may have different investment objectives and/or benchmarks from the Funds. In addition, the Board noted that each Fund seeks to track its own 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, including detailed information on certain specific iShares funds requested by the Board, was also considered.
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 fee rate and expense level 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, including information about recent and proposed enhancements to the iShares business, including with respect to shareholder servicing and support, 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 during 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 acknowledged that resources to support the iShares funds and their shareholders have been added or enhanced since BlackRock’s acquisition of BFA in December 2009, 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 detailed presentations regarding BFA’s investment and risk management processes and strategies provided at the June 10-11, 2013 meeting and throughout the previous year, 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.
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 107 |
Table of Contents
Board Review and Approval of Investment Advisory
Contract (Continued)
iSHARES®, INC.
Costs of Services Provided to the Funds and Profits Realized by BFA and its Affiliates — The Board reviewed information about the profitability to BlackRock 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 analyses 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 relatively low fee rates established at inception, 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 BlackRock’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 did not provide for any breakpoints in the Funds’ investment advisory fee rates as the assets of the Funds increase. However, the Board noted that should material economies of scale exist in the future, a breakpoint structure for the Funds may be appropriate, and 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 rates incorporate potential economies of scale 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 any of the Funds. 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 to the Funds, as well as other significant differences in the approach of BFA and its affiliates to the Funds, on one hand, and to the 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 and challenges 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.
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Board Review and Approval of Investment Advisory
Contract (Continued)
iSHARES®, INC.
Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or 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.
Based on the considerations described above, the Board determined that the investment advisory fee rate under each Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that it is in the best interest of each Fund and its 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 ETF | 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 | ||||||||||||||||||||||||
MSCI BRIC | $ | 0.863159 | $ | — | $ | — | $ | 0.863159 | 100 | % | — | % | — | % | 100 | % | ||||||||||||||||
MSCI Emerging Markets Asia | 0.915546 | — | — | 0.915546 | 100 | — | — | 100 | ||||||||||||||||||||||||
MSCI Emerging Markets Consumer Discretionary | 0.613610 | — | — | 0.613610 | 100 | — | — | 100 | ||||||||||||||||||||||||
MSCI Emerging Markets Energy Capped | 0.936437 | — | — | 0.936437 | 100 | — | — | 100 | ||||||||||||||||||||||||
MSCI Emerging Markets Growth | 1.322831 | — | — | 1.322831 | 100 | — | — | 100 | ||||||||||||||||||||||||
MSCI Emerging Markets Minimum Volatility | 1.012519 | — | — | 1.012519 | 100 | — | — | 100 | ||||||||||||||||||||||||
MSCI Emerging Markets Small-Cap | 1.855833 | — | — | 1.855833 | 100 | — | — | 100 | ||||||||||||||||||||||||
MSCI Emerging Markets Value | 1.383449 | — | — | 1.383449 | 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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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 BRIC ETF
Period Covered: January 1, 2008 through June 30, 2013
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% | 2 | 0.14 | ||||||
Greater than 3.0% and Less than 3.5% | 5 | 0.36 | ||||||
Greater than 2.5% and Less than 3.0% | 12 | 0.87 | ||||||
Greater than 2.0% and Less than 2.5% | 27 | 1.95 | ||||||
Greater than 1.5% and Less than 2.0% | 56 | 4.05 | ||||||
Greater than 1.0% and Less than 1.5% | 168 | 12.16 | ||||||
Greater than 0.5% and Less than 1.0% | 234 | 16.94 | ||||||
Between 0.5% and –0.5% | 575 | 41.62 | ||||||
Less than –0.5% and Greater than –1.0% | 174 | 12.59 | ||||||
Less than –1.0% and Greater than –1.5% | 62 | 4.49 | ||||||
Less than –1.5% and Greater than –2.0% | 28 | 2.03 | ||||||
Less than –2.0% and Greater than –2.5% | 14 | 1.01 | ||||||
Less than –2.5% and Greater than –3.0% | 5 | 0.36 | ||||||
Less than –3.0% and Greater than –3.5% | 1 | 0.07 | ||||||
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 | ||||||
Less than –5.0% and Greater than –5.5% | 1 | 0.07 | ||||||
Less than –5.5% | 3 | 0.22 | ||||||
|
|
|
| |||||
1,382 | 100.00 | % | ||||||
|
|
|
|
SUPPLEMENTAL INFORMATION | 111 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Emerging Markets Asia ETF
Period Covered: April 1, 2012 through June 30, 2013
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 2.5% and Less than 3.0% | 2 | 0.64 | % | |||||
Greater than 2.0% and Less than 2.5% | 3 | 0.96 | ||||||
Greater than 1.5% and Less than 2.0% | 15 | 4.81 | ||||||
Greater than 1.0% and Less than 1.5% | 35 | 11.22 | ||||||
Greater than 0.5% and Less than 1.0% | 55 | 17.63 | ||||||
Between 0.5% and –0.5% | 135 | 43.27 | ||||||
Less than –0.5% and Greater than –1.0% | 40 | 12.82 | ||||||
Less than –1.0% and Greater than –1.5% | 18 | 5.77 | ||||||
Less than –1.5% and Greater than –2.0% | 8 | 2.56 | ||||||
Less than –2.0% | 1 | 0.32 | ||||||
|
|
|
| |||||
312 | 100.00 | % | ||||||
|
|
|
|
iShares MSCI Emerging Markets Consumer Discretionary ETF
Period Covered: April 1, 2012 through June 30, 2013
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 2.5% | 1 | 0.32 | % | |||||
Greater than 2.0% and Less than 2.5% | 4 | 1.28 | ||||||
Greater than 1.5% and Less than 2.0% | 4 | 1.28 | ||||||
Greater than 1.0% and Less than 1.5% | 35 | 11.22 | ||||||
Greater than 0.5% and Less than 1.0% | 86 | 27.56 | ||||||
Between 0.5% and –0.5% | 146 | 46.80 | ||||||
Less than –0.5% and Greater than –1.0% | 20 | 6.41 | ||||||
Less than –1.0% and Greater than –1.5% | 12 | 3.85 | ||||||
Less than –1.5% and Greater than –2.0% | 1 | 0.32 | ||||||
Less than –2.0% and Greater than –2.5% | 3 | 0.96 | ||||||
|
|
|
| |||||
312 | 100.00 | % | ||||||
|
|
|
|
112 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Emerging Markets Energy Capped ETF
Period Covered: April 1, 2012 through June 30, 2013
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 2.5% and Less than 3.0% | 1 | 0.32 | % | |||||
Greater than 2.0% and Less than 2.5% | 2 | 0.64 | ||||||
Greater than 1.5% and Less than 2.0% | 11 | 3.53 | ||||||
Greater than 1.0% and Less than 1.5% | 39 | 12.49 | ||||||
Greater than 0.5% and Less than 1.0% | 78 | 25.00 | ||||||
Between 0.5% and –0.5% | 153 | 49.05 | ||||||
Less than –0.5% and Greater than –1.0% | 17 | 5.45 | ||||||
Less than –1.0% and Greater than –1.5% | 9 | 2.88 | ||||||
Less than –1.5% and Greater than –2.0% | 2 | 0.64 | ||||||
|
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|
| |||||
312 | 100.00 | % | ||||||
|
|
|
|
iShares MSCI Emerging Markets Growth ETF
Period Covered: April 1, 2012 through June 30, 2013
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 3.5% | 2 | 0.64 | % | |||||
Greater than 3.0% and Less than 3.5% | 3 | 0.96 | ||||||
Greater than 2.5% and Less than 3.0% | 10 | 3.21 | ||||||
Greater than 2.0% and Less than 2.5% | 27 | �� | 8.65 | |||||
Greater than 1.5% and Less than 2.0% | 31 | 9.94 | ||||||
Greater than 1.0% and Less than 1.5% | 55 | 17.63 | ||||||
Greater than 0.5% and Less than 1.0% | 59 | 18.91 | ||||||
Between 0.5% and –0.5% | 92 | 29.49 | ||||||
Less than –0.5% and Greater than –1.0% | 23 | 7.37 | ||||||
Less than –1.0% and Greater than –1.5% | 7 | 2.24 | ||||||
Less than –1.5% and Greater than –2.0% | 3 | 0.96 | ||||||
|
|
|
| |||||
312 | 100.00 | % | ||||||
|
|
|
|
SUPPLEMENTAL INFORMATION | 113 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Emerging Markets Minimum Volatility ETF
Period Covered: January 1, 2012 through June 30, 2013
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 2.0% | 1 | 0.27 | % | |||||
Greater than 1.5% and Less than 2.0% | 12 | 3.21 | ||||||
Greater than 1.0% and Less than 1.5% | 30 | 8.02 | ||||||
Greater than 0.5% and Less than 1.0% | 100 | 26.74 | ||||||
Between 0.5% and –0.5% | 200 | 53.48 | ||||||
Less than –0.5% and Greater than –1.0% | 22 | 5.88 | ||||||
Less than –1.0% and Greater than –1.5% | 6 | 1.60 | ||||||
Less than –1.5% and Greater than –2.0% | 2 | 0.53 | ||||||
Less than –2.0% and Greater than –2.5% | 1 | 0.27 | ||||||
|
|
|
| |||||
374 | 100.00 | % | ||||||
|
|
|
|
iShares MSCI Emerging Markets Small-Cap ETF
Period Covered: October 1, 2011 through June 30, 2013
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 5.0% and Less than 5.5% | 1 | 0.23 | % | |||||
Greater than 4.5% and Less than 5.0% | 2 | 0.46 | ||||||
Greater than 4.0% and Less than 4.5% | 3 | 0.69 | ||||||
Greater than 3.5% and Less than 4.0% | 2 | 0.46 | ||||||
Greater than 3.0% and Less than 3.5% | 3 | 0.69 | ||||||
Greater than 2.5% and Less than 3.0% | 5 | 1.14 | ||||||
Greater than 2.0% and Less than 2.5% | 15 | 3.43 | ||||||
Greater than 1.5% and Less than 2.0% | 38 | 8.70 | ||||||
Greater than 1.0% and Less than 1.5% | 45 | 10.30 | ||||||
Greater than 0.5% and Less than 1.0% | 58 | 13.27 | ||||||
Between 0.5% and –0.5% | 140 | 32.03 | ||||||
Less than –0.5% and Greater than –1.0% | 73 | 16.70 | ||||||
Less than –1.0% and Greater than –1.5% | 29 | 6.64 | ||||||
Less than –1.5% and Greater than –2.0% | 14 | 3.20 | ||||||
Less than –2.0% and Greater than –2.5% | 7 | 1.60 | ||||||
Less than –2.5% and Greater than –3.0% | 1 | 0.23 | ||||||
Less than –3.0% | 1 | 0.23 | ||||||
|
|
|
| |||||
437 | 100.00 | % | ||||||
|
|
|
|
114 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Emerging Markets Value ETF
Period Covered: April 1, 2012 through June 30, 2013
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 4.5% | 1 | 0.32 | % | |||||
Greater than 4.0% and Less than 4.5% | 1 | 0.32 | ||||||
Greater than 3.5% and Less than 4.0% | 3 | 0.96 | ||||||
Greater than 3.0% and Less than 3.5% | 4 | 1.28 | ||||||
Greater than 2.5% and Less than 3.0% | 5 | 1.60 | ||||||
Greater than 2.0% and Less than 2.5% | 19 | 6.09 | ||||||
Greater than 1.5% and Less than 2.0% | 56 | 17.95 | ||||||
Greater than 1.0% and Less than 1.5% | 81 | 25.97 | ||||||
Greater than 0.5% and Less than 1.0% | 64 | 20.51 | ||||||
Between 0.5% and –0.5% | 68 | 21.80 | ||||||
Less than –0.5% and Greater than –1.0% | 9 | 2.88 | ||||||
Less than –1.0% and Greater than –1.5% | 1 | 0.32 | ||||||
|
|
|
| |||||
312 | 100.00 | % | ||||||
|
|
|
|
SUPPLEMENTAL INFORMATION | 115 |
Table of Contents
Director and Officer Information
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 of the Company (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 ETF, Inc. and a Trustee of iShares U.S. ETF Trust and, as a result, oversees a total of 298 funds (as of August 31, 2013) 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 (56) | Director (since 2009). | President and Director, BlackRock, Inc. (since 2006); 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 2006); Trustee of iShares Trust (since 2009); Director of iShares MSCI Russia Capped ETF, 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 ETF, 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 Company due to his affiliations with BlackRock, Inc. |
b | Michael Latham is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BlackRock, Inc. and its affiliates. |
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Director and Officer Information (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 (58) | 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 Paine Webber Inc.) (2003-2005) 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Independent Chairman of iShares, Trust, iShares MSCI Russia Capped ETF, Inc. and iShares U.S. ETF Trust (since 2012). | |||
Cecilia H. Herbert (64) | Director (since 2005); Nominating and Governance Committee Chair and Equity Plus Committee Chair (since 2012). | Trustee and Member (since 2011) of the Investment Committee, WNET, the New York public broadcasting company; Director (since 1998) and President (2007-2011) of the Board of Directors, Catholic Charities CYO; Trustee (2002-2011) and Chair of the Finance and Investment Committee (2006-2010), the Thacher School; 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of Forward Funds (34 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 ETF, 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 (2 portfolios) (since 2002). |
DIRECTORAND OFFICER INFORMATION | 117 |
Table of Contents
Director and Officer Information (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. Kerrigan (58) | 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). | |||
John E. Martinez (52) | 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). | |||
George G.C. Parker (74) | 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 2000); Director of iShares MSCI Russia Capped ETF, 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 (49) | 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 (2007-2008). | Trustee of iShares Trust (since 2011); Director of iShares MSCI Russia Capped ETF, Inc. (since 2011); Trustee of iShares U.S. ETF Trust (since 2011). |
118 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Director and Officer Information (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 of Legal & Compliance, BlackRock (since 2006); Director of Legal & Compliance, BlackRock (2004-2006). | ||
Eilleen M. Clavere (61) | Secretary (since 2007). | Director of Global Fund Administration, BlackRock (since 2009); Director of Legal Administration of Intermediary Investor Business, BGI (2006-2009); Legal Counsel and Vice President of Atlas Funds, Atlas Advisers, Inc. and Atlas Securities, Inc. (2005-2006); Counsel of Kirkpatrick & Lockhart LLP (2001-2005). | ||
Jack Gee (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). | ||
Scott Radell (44) | Executive Vice President (since 2012). | Managing Director, BlackRock (since 2009); Head of Portfolio Solutions, BlackRock (since 2009); Head of Portfolio Solutions, BGI (2007-2009); Credit Portfolio Manager, BGI (2005-2007); Credit Research Analyst, BGI (2003-2005). | ||
Amy Schioldager (50) | Executive Vice President (since 2007). | Senior Managing Director, BlackRock (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008); Head of Domestic Equity Portfolio Management, BGI (2001-2006). | ||
Ira P. Shapiro (50) | Vice President (since 2007). | Managing Director, BlackRock (since 2009); Head of Strategic Product Initiatives for iShares (since 2012); Chief Legal Officer, Exchange-Traded Fund Complex (2007-2012); Associate General Counsel, BGI (2004-2009). |
DIRECTORAND OFFICER INFORMATION | 119 |
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Notes:
120 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Notes:
NOTES | 121 |
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Notes:
122 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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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.
©2013 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc. or its subsidiaries. All other marks are the property of their respective owners.
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iS-AR-810-0813
Table of Contents
AUGUST 31, 2013
2013 ANNUAL REPORT
| ![]() |
iShares, Inc.
Ø | iShares MSCI All Country World Minimum Volatility ETF | ACWV | NYSE Arca |
Ø | iShares MSCI Emerging Markets EMEA ETF | EEME | NASDAQ |
Ø | iShares MSCI Frontier 100 ETF | FM | NYSE Arca |
Ø | iShares MSCI World ETF | URTH | NYSE Arca |
Table of Contents
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Table of Contents
Management’s Discussion of Fund Performance
iSHARES®, INC.
GLOBAL MARKET OVERVIEW
Global equities delivered mixed performance for the 12-month period ended August 31, 2013 (the “reporting period”), as ongoing concerns about sovereign debt issues in Europe and slowing economic growth in China kept volatility levels elevated. Investors largely dismissed the negative news for much of the reporting period, choosing to focus on the potential effect of unprecedented intervention levels from central banks around the world.
Early in the reporting period, the U.S. Federal Reserve Bank (the “Fed”) responded to tepid U.S. economic data by launching its third quantitative easing program (“QE3”). This program, in addition to relatively solid corporate earnings and a rebound in the housing market, helped support stocks in the U.S. Later in the reporting period, the Fed’s comments about “tapering” QE3 upset markets. After the Fed toned down the discussion in July 2013, U.S. stock markets rallied and finished the reporting period with solid gains.
Issues surrounding economic conditions in Europe resurfaced throughout the reporting period. At the beginning of the reporting period, the European Central Bank’s pledge to protect the euro and support bond markets in the euro zone helped European markets rebound in late 2012 and into early 2013. In the first quarter of 2013, an economic crisis on the island of Cyprus drove concerns about the health of the European financial system, until the announcement of a bailout plan alleviated worries. European stocks struggled again as the prospect of slow global economic growth materialized. Austerity programs intended to reduce national debts were blamed for impeding growth in the region. In May 2013, the European Union announced it would ease its austerity measures, giving some countries additional time to reach their respective deficit reduction targets. Also in May 2013, the European Central Bank cut its benchmark interest rate. Despite these actions, many countries in the euro zone remained in or near recession. For the second quarter of 2013, though, the euro zone as a whole experienced gross domestic product (“GDP”) growth of 0.30% — its first positive quarter since 2011.
The Bank of Japan took decisive action to improve economic conditions through quantitative easing, instituting a plan in early 2013 to purchase 7.5 trillion yen in bonds per month in order to double the country’s monetary base in two years. Although the country’s GDP growth for the first quarter of 2013 was stronger than expected, industrial production continued to decline. A declining yen helped export levels, although export growth fell short of expectations. In Japan, personal spending improved throughout the course of the reporting period, although consumer confidence weakened in the final months of the reporting period.
Emerging market countries generally lagged developed markets. During the reporting period, economic growth slowed in China and Latin America. Commodities prices declined around the world during the reporting period, hurting many commodities-driven emerging market countries. Late in the reporting period, concern that the Fed would begin to taper its bond-buying program led investors to abandon emerging market holdings, including both bonds and stocks. In the past several years, emerging markets have benefited from investors seeking higher yielding alternatives in a low-interest rate environment. Similarly, frontier markets delivered mixed results as some struggled with a decline in commodities prices and slowing economic growth, as well as investors’ retreat from frontier market holdings.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 5 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI ALL COUNTRY WORLD MINIMUM VOLATILITY ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | 10.69% | 9.76% | 10.21% | 10.69% | 9.76% | 10.21% | ||||||||||||||||||||
Since Inception | 12.39% | 12.21% | 12.03% | 24.43% | 24.05% | 23.65% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was 10/18/11. The first day of secondary market trading was 10/20/11.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 14 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,025.10 | $ | 1.02 | $ | 1,000.00 | $ | 1,024.70 | $ | 1.02 | 0.20% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 14 for more information. |
6 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI ALL COUNTRY WORLD MINIMUM VOLATILITY ETF
The iShares MSCI All Country World Minimum Volatility ETF (the “Fund”), formerly the iShares MSCI All Country World Minimum Volatility Index 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 IndexSM (the “Index”). The Index is designed to measure the combined performance of equity securities in both emerging and developed markets that in aggregate have lower 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 12-month reporting period ended August 31, 2013, the total return for the Fund was 10.69%, net of fees, while the total return for the Index was 10.21%.
As represented by the Index, lower-volatility stocks worldwide gained approximately 10% for the reporting period, but trailed the 15% gain of the broad global equity indexes. Lower-volatility stocks in Europe, which comprised approximately 10% of the Index as of the end of the reporting period, posted the best returns. In particular, Ireland gained more than 40%, while Finland returned about 25% for the reporting period. The largest European components of the Index, Switzerland and the U.K., also generated double-digit gains.
Lower-volatility stocks in the U.S., which made up more than half of the Index as of August, 31, 2013, advanced by nearly 14% for the reporting period. Other noteworthy positive performers included several emerging markets, including China, Colombia and Taiwan.
Just eight of the 27 countries represented in the Index declined for the reporting period. Three of these countries — Peru, Chile and the Czech Republic — fell by 20% or more for the reporting period. The Czech Republic remained mired in recession throughout the reporting period, while the Chilean and Peruvian economies slowed as global demand for commodities weakened. Other notable decliners in the Index included Belgium, Spain and India.
A stronger U.S. dollar had a negative impact on Index performance for the reporting period. In local currency terms, the Index returned 14.27% for the reporting period. The U.S. dollar appreciated by 2.5% against the British pound, 7% versus the Canadian dollar, and 25% against the Japanese yen. A stronger U.S. dollar lowers international equity returns for U.S. investors.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector/Investment Type | Percentage of Net Assets |
Consumer Non-Cyclical | 34.34 | % | ||
Financial | 16.27 | |||
Consumer Cyclical | 12.33 | |||
Communications | 11.79 | |||
Utilities | 8.13 | |||
Industrial | 5.37 | |||
Energy | 4.99 | |||
Technology | 3.78 | |||
Basic Materials | 2.34 | |||
Investment Companies | 0.25 | |||
Diversified | 0.10 | |||
Short-Term and Other Net Assets | 0.31 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Automatic Data Processing Inc. | 1.58 | % | ||
Johnson & Johnson | 1.55 | |||
McDonald’s Corp. | 1.45 | |||
General Mills Inc. | 1.44 | |||
Southern Co. (The) | 1.41 | |||
China Mobile Ltd. (China) | 1.32 | |||
Novartis AG Registered (Switzerland) | 1.27 | |||
Nestle SA Registered (Switzerland) | 1.12 | |||
Eli Lilly and Co. | 1.11 | |||
Bristol-Myers Squibb Co. | 1.10 | |||
|
| |||
TOTAL | 13.35 | % | ||
|
|
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 7 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI EMERGING MARKETS EMEA ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | (3.95)% | (3.27)% | (3.62)% | (3.95)% | (3.27)% | (3.62)% | ||||||||||||||||||||
Since Inception | (0.71)% | 0.00% | (0.24)% | (1.15)% | 0.00% | (0.38)% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was 1/18/12. The first day of secondary market trading was 1/19/12.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 14 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 905.30 | $ | 2.35 | $ | 1,000.00 | $ | 1,022.70 | $ | 2.50 | 0.49% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 14 for more information. |
8 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS EMEA ETF
The iShares MSCI Emerging Markets EMEA ETF (the “Fund”), formerly the iShares MSCI Emerging Markets EMEA Index Fund, seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Emerging Markets EMEA IndexSM (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 12-month reporting period ended August 31, 2013, the total return for the Fund was -3.95%, net of fees, while the total return for the Index was -3.62%.
Emerging markets in Europe, the Middle East and Africa, as represented by the Index, declined during the reporting period, and underperformed emerging markets as a whole.
South African stocks declined. During the reporting period, South Africa’s economy, as measured by annual GDP growth, grew at a tepid pace. For the second quarter of 2013, annual GDP expanded by 2.0%, down from 2.3% in the second quarter of 2012. Underlying the mediocre growth, the country’s mining industry experienced turbulence as it continued to struggle with strikes and global economic weakness. In the second quarter of 2013, the mining sector contracted an annualized 5.7% from the previous quarter.
The Russian equity market declined modestly during the reporting period. Economic growth, as measured by annual GDP, slowed to 1.2% in the second quarter of 2013, its slowest pace since 2009. As export trade weakened, Russia’s trade surplus shrank 11% in the first half of 2013. Already struggling with weaker global demand for its commodities, Russia began to experience declines in investment and household spending.
The Turkish equity market delivered negative results for the reporting period. Turkey’s economy continued to slow through the fourth quarter of 2012, when the annual GDP growth rate of 1.4% represented the country’s seventh consecutive quarterly decline. In the first half of 2013, however, economic activity accelerated, evidenced by annual GDP growth rates of 2.9% and 4.4% for the first and second quarters of 2013, respectively.
Poland’s equity market was positive. After slowing throughout most of the reporting period, economic conditions appeared to improve as some euro zone countries emerged from recession. As a result, Poland’s export activity increased. Industrial production, which had contracted in the first half of the reporting period, appeared to gain momentum late in the reporting period. After climbing to a high of 14.4% in February 2013, the unemployment rate fell steadily, dropping to 13.1% in July 2013.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector | Percentage of Net Assets |
Financial | 26.76 | % | ||
Energy | 22.24 | |||
Communications | 16.71 | |||
Basic Materials | 12.77 | |||
Consumer Non-Cyclical | 9.85 | |||
Consumer Cyclical | 4.32 | |||
Diversified | 3.32 | |||
Utilities | 2.13 | |||
Other* | 1.17 | |||
Short-Term and Other Net Assets | 0.73 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Gazprom OAO (Russia) | 7.67 | % | ||
Naspers Ltd. Class N (South Africa) | 5.30 | |||
MTN Group Ltd. (South Africa) | 5.06 | |||
LUKOIL OAO (Russia) | 4.89 | |||
Sberbank of Russia (Russia) | 4.64 | |||
Sasol Ltd. (South Africa) | 4.16 | |||
Magnit OJSC SP GDR (Russia) | 2.35 | |||
Standard Bank Group Ltd. (South Africa) | 2.20 | |||
NovaTek OAO SP GDR (Russia) | 1.82 | |||
Mobile TeleSystems OJSC SP ADR (Russia) | 1.81 | |||
|
| |||
TOTAL | 39.90 | % | ||
|
|
* | Other includes sectors which individually represent less than 1% of net assets. |
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 9 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI FRONTIER 100 ETF
Performance as of August 31, 2013
Cumulative Total Returns | ||||||||||||
NAV | MARKET | INDEX | ||||||||||
Since Inception | 20.54% | 22.50% | 20.79% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was 9/12/12. The first day of secondary market trading was 9/13/12.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 14 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,064.60 | $ | 4.11 | $ | 1,000.00 | $ | 1,021.20 | $ | 4.02 | 0.79% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 14 for more information. |
10 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI FRONTIER 100 ETF
The iShares MSCI Frontier 100 ETF (the “Fund”), formerly the iShares MSCI Frontier 100 Index Fund, seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Frontier Markets 100 IndexSM (the “Index”). The Index is designed to measure equity performance of a subset of frontier market countries that meet minimum liquidity standards. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the period from September 12, 2012 (inception date of the Fund) through August 31, 2013 (the “reporting period”), the total return for the Fund was 20.54%, net of fees, while the total return for the Index was 20.79%.
Frontier markets, as represented by the Index, gained for the reporting period and outpaced the performance of broader international markets.
Kuwait’s equity market contributed meaningfully to Index results for the reporting period. As the world’s eighth largest exporter and tenth largest producer of oil, Kuwait relies heavily on its oil exports. Key export markets are South Korea, India and Japan. During the reporting period, export levels remained steady. Combined with low unemployment levels and solid consumer spending, Kuwait’s economic growth, as measured by annual GDP, expanded 6.1% for 2012.
Qatar’s equities contributed to Index gains during the reporting period. With vast oil and natural gas reserves, Qatar relies on its mining sector for its economic livelihood. The country exports mainly liquefied natural gas and oil, with Japan, South Korea and India being its key export partners. Oil exports increased during the reporting period. The unemployment rate fell to 0.50% in 2012. Economic activity, as measured by annual GDP growth, expanded 6.2% in the first quarter of 2013.
United Arab Emirates contributed significantly to Index returns during the reporting period. The economy depends on the export of oil and natural gas, as well as precious metals and stones. Key export partners are Japan, India and Iran. Export levels climbed in 2012 and unemployment levels declined. Economic activity, as measured by annual GDP growth, expanded 4.4% for 2012.
Nigeria’s equity market contributed substantially to Index performance for the reporting period. Nigeria is one of the most developed markets in Africa, and relies on agriculture for 42% of its GDP. Oil and natural gas represent a sizable portion of GDP, but has declined in recent years. In the second quarter of 2013, Nigeria’s economy, as measured by annual GDP, expanded 6.18%. Agriculture led the growth, while the oil sector’s contribution declined.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector | Percentage of Net Assets |
Financial | 54.76 | % | ||
Communications | 14.33 | |||
Consumer Non-Cyclical | 9.30 | |||
Energy | 6.97 | |||
Basic Materials | 4.78 | |||
Industrial | 4.71 | |||
Utilities | 1.96 | |||
Consumer Cyclical | 1.70 | |||
Diversified | 1.26 | |||
Short-Term and Other Net Assets | 0.23 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
National Bank of Kuwait (Kuwait) | 6.62 | % | ||
Mobile Telecommunications Co. KSC (Kuwait) | 5.54 | |||
Emaar Properties PJSC (United Arab Emirates) | 4.44 | |||
Kuwait Finance House (Kuwait) | 4.39 | |||
Qatar National Bank SAQ (Qatar) | 3.60 | |||
Nigerian Breweries PLC (Nigeria) | 3.38 | |||
Ooredoo QSC (Qatar) | 2.89 | |||
Industries Qatar QSC (Qatar) | 2.85 | |||
Masraf Al Rayan QSC (Qatar) | 2.72 | |||
DP World Ltd. (United Arab Emirates) | 2.41 | |||
|
| |||
TOTAL | 38.84 | % | ||
|
|
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 11 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI WORLD ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | 17.84% | 19.90% | 17.63% | 17.84% | 19.90% | 17.63% | ||||||||||||||||||||
Since Inception | 15.67% | 17.28% | 15.51% | 26.98% | 29.90% | 26.67% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was 1/10/12. The first day of secondary market trading was 1/12/12.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 14 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,060.40 | $ | 1.25 | $ | 1,000.00 | $ | 1,024.00 | $ | 1.22 | 0.24% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 14 for more information. |
12 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI WORLD ETF
The iShares MSCI World ETF (the “Fund”), formerly the iShares MSCI World Index Fund, seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI World IndexSM (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 12-month reporting period ended August 31, 2013, the total return for the Fund was 17.84%, net of fees, while the total return for the Index was 17.63%.
Global developed equity markets, as measured by the Index, delivered positive results for the reporting period.
U.S. equities contributed significantly to Index returns. Fed activities and announcements on monetary policy had a strong impact on U.S. market behavior. Early in the reporting period, the Fed launched its QE3 program, which it later expanded. Both actions helped lift stock prices. Markets sank when the Fed suggested it would reduce its QE3 measures if the economy continued to improve. The Fed then toned down its tapering talk in July 2013, when stocks rebounded. The improved housing market and decline in unemployment levels also contributed to stock market behavior. Economic activity, as measured by annual GDP, grew 2.5% in the second quarter of 2013 over the previous quarter.
The United Kingdom delivered gains for the reporting period. The country’s GDP growth turned positive in the first two quarters of 2013, as the service sector, along with manufacturing and construction levels, improved and housing prices rebounded.
Japan achieved positive results for the reporting period and contributed meaningfully to Index performance. Since the Bank of Japan initiated a massive stimulus program, GDP growth and unemployment levels have improved. A declining yen helped export levels, although export growth fell short of expectations.
Canada achieved modest gains for the reporting period. Canada’s economy expanded at an annual rate of 1.4% in the second quarter of 2013, roughly in line with the 1.36% annual growth rate in the first quarter of 2013. As a key exporter, Canada relies on exports for approximately 45% of its GDP. Export activity was weak throughout the reporting period amid tepid global demand for metals and mineral products.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector | Percentage of Net Assets |
Consumer Non-Cyclical | 21.72 | % | ||
Financial | 20.70 | |||
Consumer Cyclical | 10.69 | |||
Industrial | 10.32 | |||
Communications | 9.68 | |||
Energy | 9.70 | |||
Technology | 7.86 | |||
Basic Materials | 5.51 | |||
Utilities | 3.29 | |||
Diversified | 0.12 | |||
Short-Term and Other Net Assets | 0.41 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Apple Inc. | 1.59 | % | ||
Exxon Mobil Corp. | 1.37 | |||
Microsoft Corp. | 0.93 | |||
General Electric Co. | 0.84 | |||
Johnson & Johnson | 0.82 | |||
Chevron Corp. | 0.81 | |||
Google Inc. Class A | 0.81 | |||
Nestle SA Registered (Switzerland) | 0.74 | |||
Procter & Gamble Co. (The) | 0.73 | |||
Wells Fargo & Co. | 0.71 | |||
|
| |||
TOTAL | 9.35 | % | ||
|
|
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 13 |
Table of Contents
Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.iShares.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are redeemed or sold in the market. Performance for certain funds may reflect a waiver of a portion of investment management fees. Without such waiver, performance would have been lower.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The 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 a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of a fund may not have traded in the secondary market until after the fund’s inception, for the period from inception to the first day of secondary trading, 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 at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. 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.
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 expense example, which is based on an investment of $1,000 invested on March 1, 2013 and held through August 31, 2013, 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.
Actual Expenses — The table provides information about actual account values and actual expenses. To estimate the expenses that you paid on your account 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 for your Fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Example for Comparison Purposes — The table also 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. 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 hypothetical examples are 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.
14 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI ALL COUNTRY WORLD MINIMUM VOLATILITY ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 99.07% |
| |||||||
CANADA — 8.73% |
| |||||||
Bank of Montreal | 58,464 | $ | 3,663,907 | |||||
Bank of Nova Scotia | 14,280 | 791,904 | ||||||
BCE Inc. | 164,808 | 6,747,613 | ||||||
Bell Aliant Inc. | 49,392 | 1,243,111 | ||||||
Canadian Imperial Bank of Commerce | 42,504 | 3,314,417 | ||||||
Canadian Tire Corp. Ltd. Class A NVS | 23,016 | 1,943,782 | ||||||
Dollarama Inc. | 45,192 | 3,185,160 | ||||||
Enbridge Inc. | 246,792 | 10,104,224 | ||||||
First Capital Realty Inc. | 61,488 | 979,821 | ||||||
Franco-Nevada Corp. | 34,944 | 1,588,364 | ||||||
Goldcorp Inc. | 38,472 | 1,134,211 | ||||||
H&R Real Estate Investment Trust | 37,968 | 738,197 | ||||||
Intact Financial Corp. | 89,208 | 5,155,950 | ||||||
National Bank of Canada | 96,432 | 7,458,420 | ||||||
Pembina Pipeline Corp. | 123,480 | 3,825,316 | ||||||
RioCan Real Estate Investment Trust | 65,688 | 1,466,445 | ||||||
Shaw Communications Inc. Class B | 257,208 | 6,188,206 | ||||||
Shoppers Drug Mart Corp. | 40,275 | 2,250,269 | ||||||
TELUS Corp. NVS | 69,000 | 2,114,020 | ||||||
Thomson Reuters Corp. | 242,256 | 7,927,460 | ||||||
Tim Hortons Inc. | 99,792 | 5,448,876 | ||||||
TransCanada Corp. | 245,448 | 10,682,072 | ||||||
|
| |||||||
87,951,745 | ||||||||
CHILE — 0.27% | ||||||||
Banco de Credito e Inversiones | 19,745 | 944,069 | ||||||
Empresa Nacional de Electricidad SA | 376,824 | 514,208 | ||||||
Empresa Nacional de Telecomunicaciones SA | 79,800 | 1,264,992 | ||||||
|
| |||||||
2,723,269 | ||||||||
CHINA — 3.60% | ||||||||
Beijing Enterprises Holdings Ltd. | 336,000 | 2,383,163 | ||||||
China Construction Bank Corp. Class H | 5,040,000 | 3,691,736 | ||||||
China Mengniu Dairy Co. Ltd. | 333,000 | 1,408,542 | ||||||
China Mobile Ltd. | 1,239,000 | 13,317,684 |
Security | Shares | Value | ||||||
China Petroleum & Chemical Corp. Class H | 1,748,400 | $ | 1,260,388 | |||||
China Resources Gas Group Ltd.a | 650,000 | 1,533,968 | ||||||
China Telecom Corp. Ltd. Class H | 2,352,000 | 1,185,949 | ||||||
Hengan International Group Co. Ltd.a | 331,500 | 3,631,606 | ||||||
Inner Mongolia Yitai Coal Co. Ltd. Class B | 672,000 | 1,391,040 | ||||||
Jiangsu Expressway Co. Ltd. Class H | 776,000 | 879,635 | ||||||
Kunlun Energy Co. Ltd. | 336,000 | 489,632 | ||||||
Shanghai Pharmaceuticals Holding Co. Ltd. Class H | 445,800 | 846,252 | ||||||
Shenzhou International Group Holdings Ltd.a | 168,000 | 545,961 | ||||||
SOHO China Ltd.a | 504,000 | 428,319 | ||||||
Tencent Holdings Ltd. | 16,800 | 787,744 | ||||||
Tingyi (Cayman Islands) Holding Corp. | 672,000 | 1,663,881 | ||||||
Zhejiang Expressway Co. Ltd. Class H | 1,008,000 | 843,640 | ||||||
|
| |||||||
36,289,140 | ||||||||
COLOMBIA — 0.07% |
| |||||||
Corporacion Financiera Colombiana SA | 32,928 | 655,976 | ||||||
|
| |||||||
655,976 | ||||||||
CZECH REPUBLIC — 0.08% | ||||||||
Telefonica O2 Czech Republic AS | 55,104 | 821,099 | ||||||
|
| |||||||
821,099 | ||||||||
DENMARK — 0.08% | ||||||||
TrygVesta A/S | 10,080 | 855,954 | ||||||
|
| |||||||
855,954 | ||||||||
EGYPT — 0.10% | ||||||||
Commercial International Bank (Egypt) SAE | 191,815 | 969,557 | ||||||
|
| |||||||
969,557 | ||||||||
FRANCE — 0.07% | ||||||||
Eutelsat Communications SA | 22,680 | 677,069 | ||||||
|
| |||||||
677,069 |
SCHEDULESOF INVESTMENTS | 15 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI ALL COUNTRY WORLD MINIMUM VOLATILITY ETF
August 31, 2013
Security | Shares | Value | ||||||
HONG KONG — 3.27% | ||||||||
Cheung Kong Infrastructure Holdings Ltd. | 333,000 | $ | 2,250,232 | |||||
CLP Holdings Ltd.a | 1,034,000 | 8,267,306 | ||||||
Hang Seng Bank Ltd. | 504,000 | 7,831,941 | ||||||
Link REIT (The) | 1,512,000 | 6,931,755 | ||||||
MTR Corp. Ltd. | 950,000 | 3,583,449 | ||||||
Power Assets Holdings Ltd. | 362,000 | 3,120,770 | ||||||
Swire Pacific Ltd. Class A | 84,000 | 963,015 | ||||||
|
| |||||||
32,948,468 | ||||||||
INDONESIA — 0.94% | ||||||||
PT Bank Central Asia Tbk | 3,444,000 | 2,854,231 | ||||||
PT Bank Danamon Indonesia Tbk | 2,100,000 | 778,846 | ||||||
PT Jasa Marga (Persero) Tbk | 1,260,000 | 628,846 | ||||||
PT Telekomunikasi Indonesia (Persero) Tbk | 18,480,000 | 3,723,077 | ||||||
PT Unilever Indonesia Tbk | 507,000 | 1,448,571 | ||||||
|
| |||||||
9,433,571 | ||||||||
IRELAND — 0.12% | ||||||||
Ryanair Holdings PLC SP ADR | 26,304 | 1,248,388 | ||||||
|
| |||||||
1,248,388 | ||||||||
ISRAEL — 0.57% | ||||||||
Bezeq The Israel Telecommunication Corp. Ltd. | 420,885 | 688,812 | ||||||
NICE Systems Ltd. | 37,632 | 1,423,177 | ||||||
Teva Pharmaceutical Industries Ltd. | 94,578 | 3,655,213 | ||||||
|
| |||||||
5,767,202 | ||||||||
JAPAN — 13.21% | ||||||||
ABC-MART Inc. | 16,800 | 704,602 | ||||||
Alfresa Holdings Corp. | 16,800 | 797,921 | ||||||
ANA Holdings Inc.a | 840,000 | 1,712,276 | ||||||
Astellas Pharma Inc. | 16,800 | 861,275 | ||||||
Bank of Kyoto Ltd. (The) | 168,000 | 1,383,519 | ||||||
Benesse Holdings Inc. | 38,800 | 1,407,817 | ||||||
Chiba Bank Ltd. (The) | 333,000 | 2,284,146 | ||||||
Chugai Pharmaceutical Co. Ltd. | 67,200 | 1,382,150 | ||||||
Chugoku Bank Ltd. (The) | 168,000 | 2,258,493 | ||||||
Eisai Co. Ltd. | 132,300 | 5,400,413 | ||||||
FamilyMart Co. Ltd. | 33,600 | 1,416,053 | ||||||
Gunma Bank Ltd. (The) | 220,000 | 1,188,401 | ||||||
Hachijuni Bank Ltd. (The) | 220,000 | 1,242,216 |
Security | Shares | Value | ||||||
Hisamitsu Pharmaceutical Co. Inc. | 16,800 | $ | 904,082 | |||||
Hoya Corp. | 16,800 | 358,722 | ||||||
Itochu Techno-Solutions Corp. | 16,800 | 571,044 | ||||||
Iyo Bank Ltd. (The) | 168,000 | 1,684,880 | ||||||
Japan Airlines Co. Ltd. | 33,300 | 1,768,262 | ||||||
Japan Real Estate Investment Corp. | 168 | 1,791,041 | ||||||
Kamigumi Co. Ltd. | 168,000 | 1,345,849 | ||||||
Keikyu Corp. | 220,000 | 1,885,746 | ||||||
Keio Corp. | 168,000 | 1,138,664 | ||||||
Kintetsu Corp. | 336,000 | 1,249,962 | ||||||
Kurita Water Industries Ltd. | 33,600 | 678,061 | ||||||
Kyowa Hakko Kirin Co. Ltd. | 168,000 | 1,700,290 | ||||||
Lawson Inc. | 33,600 | 2,534,169 | ||||||
McDonald’s Holdings Co. (Japan) Ltd. | 33,900 | 890,387 | ||||||
Miraca Holdings Inc. | 38,800 | 1,736,044 | ||||||
Mitsubishi Tanabe Pharma Corp. | 168,000 | 2,292,738 | ||||||
Nissin Foods Holdings Co. Ltd. | 33,600 | 1,328,726 | ||||||
Nitori Holdings Co. Ltd. | 19,400 | 1,738,022 | ||||||
NTT DOCOMO Inc. | 6,384 | 10,247,974 | ||||||
Odakyu Electric Railway Co. Ltd. | 336,000 | 3,071,824 | ||||||
Ono Pharmaceutical Co. Ltd. | 50,400 | 3,046,140 | ||||||
Oracle Corp. Japan | 22,000 | 900,270 | ||||||
Oriental Land Co. Ltd. | 33,600 | 5,427,916 | ||||||
Osaka Gas Co. Ltd. | 672,000 | 2,719,095 | ||||||
Otsuka Holdings Co. Ltd. | 231,300 | 7,178,398 | ||||||
PARK24 Co. Ltd. | 67,200 | 1,167,088 | ||||||
Rakuten Inc. | 151,200 | 1,866,210 | ||||||
Rinnai Corp. | 16,800 | 1,176,334 | ||||||
Sankyo Co. Ltd. | 33,600 | 1,566,733 | ||||||
Sanrio Co. Ltd. | 16,800 | 868,124 | ||||||
Santen Pharmaceutical Co. Ltd. | 17,400 | 808,684 | ||||||
Secom Co. Ltd. | 100,800 | 5,784,070 | ||||||
Seven Bank Ltd. | 268,800 | 882,165 | ||||||
Shimamura Co. Ltd. | 16,800 | 1,719,125 | ||||||
Shizuoka Bank Ltd. (The) | 336,000 | 3,568,384 | ||||||
Suzuken Co. Ltd. | 38,800 | 1,198,227 | ||||||
Taisho Pharmaceutical Holdings Co. Ltd. | 16,800 | 1,123,253 | ||||||
Takeda Pharmaceutical Co. Ltd. | 218,400 | 9,950,038 | ||||||
Tobu Railway Co. Ltd. | 663,000 | 3,344,901 | ||||||
Toho Co. Ltd. | 33,600 | 667,788 |
16 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI ALL COUNTRY WORLD MINIMUM VOLATILITY ETF
August 31, 2013
Security | Shares | Value | ||||||
Tokyo Gas Co. Ltd. | 168,000 | $ | 873,261 | |||||
TonenGeneral Sekiyu K.K. | 168,000 | 1,529,063 | ||||||
Tsumura & Co. | 16,800 | 451,699 | ||||||
Unicharm Corp. | 38,800 | 2,016,817 | ||||||
USS Co. Ltd. | 15,120 | 1,893,949 | ||||||
West Japan Railway Co. | 117,600 | 4,866,290 | ||||||
Yamato Holdings Co. Ltd. | 235,200 | 5,067,653 | ||||||
Yamazaki Baking Co. Ltd. | 44,000 | 472,670 | ||||||
|
| |||||||
133,090,114 | ||||||||
MALAYSIA — 1.32% | ||||||||
Berjaya Sports Toto Bhd | 470,433 | 571,437 | ||||||
Hong Leong Bank Bhd | 122,800 | 527,127 | ||||||
IHH Healthcare Bhdb | 1,344,000 | 1,640,746 | ||||||
Malayan Banking Bhd | 693,300 | 2,110,663 | ||||||
Maxis Bhd | 1,512,000 | 3,148,513 | ||||||
Petronas Dagangan Bhd | 84,000 | 710,922 | ||||||
Public Bank Bhd Foreign | 672,000 | 3,510,623 | ||||||
Telekom Malaysia Bhd | 655,200 | 1,079,118 | ||||||
|
| |||||||
13,299,149 | ||||||||
NEW ZEALAND — 0.15% | ||||||||
Auckland International Airport Ltd. | 637,728 | 1,519,409 | ||||||
|
| |||||||
1,519,409 | ||||||||
PERU — 0.12% | ||||||||
Compania de Minas Buenaventura SA SP ADR | 95,424 | 1,205,205 | ||||||
|
| |||||||
1,205,205 | ||||||||
PHILIPPINES — 0.37% | ||||||||
Bank of the Philippine Islands | 441,840 | 911,419 | ||||||
International Container Terminal Services Inc. | 411,600 | 876,727 | ||||||
Philippine Long Distance Telephone Co. | 30,240 | 1,951,361 | ||||||
|
| |||||||
3,739,507 | ||||||||
SINGAPORE — 1.31% | ||||||||
ComfortDelGro Corp. Ltd. | 1,680,000 | 2,427,727 | ||||||
Oversea-Chinese Banking Corp. Ltd. | 336,000 | 2,602,733 | ||||||
Singapore Airlines Ltd.a | 336,000 | 2,492,203 | ||||||
Singapore Press Holdings Ltd.a | 99,000 | 304,735 | ||||||
Singapore Telecommunications Ltd. | 1,368,000 | 3,760,861 |
Security | Shares | Value | ||||||
StarHub Ltd. | 504,000 | $ | 1,657,960 | |||||
|
| |||||||
13,246,219 | ||||||||
SWITZERLAND — 5.13% | ||||||||
Banque Cantonale Vaudoise Registered | 840 | 449,099 | ||||||
Barry Callebaut AG Registered | 1,008 | 946,486 | ||||||
Givaudan SA Registeredb | 4,536 | 6,095,676 | ||||||
Lindt & Spruengli AG Registered | 67 | 3,089,876 | ||||||
Nestle SA Registered | 173,208 | 11,341,000 | ||||||
Novartis AG Registered | 175,896 | 12,799,811 | ||||||
Roche Holding AG Genusschein | 17,304 | 4,307,441 | ||||||
Schindler Holding AG Participation Certificates | 5,208 | 716,631 | ||||||
Schindler Holding AG Registered | 7,224 | 975,441 | ||||||
SGS SA Registered | 717 | 1,629,476 | ||||||
Swiss Prime Site AG Registeredb | 36,396 | 2,666,073 | ||||||
Swisscom AG Registered | 14,784 | 6,684,829 | ||||||
|
| |||||||
51,701,839 | ||||||||
TAIWAN — 4.04% | ||||||||
Advantech Co. Ltd. | 168,000 | 853,348 | ||||||
Chang Hwa Commercial Bank Ltd. | 1,079,408 | 584,351 | ||||||
China Airlines Ltd.b | 2,016,000 | 707,380 | ||||||
China Steel Corp. | 6,108,890 | 5,164,829 | ||||||
Chunghwa Telecom Co. Ltd. | 2,520,000 | 7,966,449 | ||||||
Far EasTone Telecommunications Co. Ltd. | 1,060,000 | 2,681,482 | ||||||
First Financial Holding Co. Ltd. | 3,937,096 | 2,276,120 | ||||||
Hua Nan Financial Holdings Co. Ltd. | 3,528,000 | 1,921,716 | ||||||
Inventec Corp. | 1,344,830 | 1,094,308 | ||||||
Lite-On Technology Corp. | 1,350,733 | 2,288,498 | ||||||
MStar Semiconductor Inc. | 40,000 | 364,918 | ||||||
Synnex Technology International Corp. | 840,000 | 1,323,531 | ||||||
Taiwan Cooperative Financial Holding Co. Ltd. | 3,383,678 | 1,809,181 | ||||||
Taiwan Mobile Co. Ltd. | 1,060,000 | 3,825,628 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 2,352,000 | 7,899,079 | ||||||
|
| |||||||
40,760,818 | ||||||||
THAILAND — 0.57% | ||||||||
Advanced Information Service PCL NVDR | 305,400 | 2,276,980 |
SCHEDULESOF INVESTMENTS | 17 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI ALL COUNTRY WORLD MINIMUM VOLATILITY ETF
August 31, 2013
Security | Shares | Value | ||||||
Bangkok Bank PCL Foreign | 100,800 | $ | 566,785 | |||||
Bangkok Bank PCL NVDR | 100,800 | 560,522 | ||||||
Bangkok Dusit Medical Services PCL NVDR | 212,100 | 849,981 | ||||||
CP All PCL NVDR | 1,472,800 | 1,498,422 | ||||||
|
| |||||||
5,752,690 | ||||||||
UNITED KINGDOM — 3.87% | ||||||||
AstraZeneca PLC | 66,864 | 3,287,067 | ||||||
Babcock International Group PLC | 134,232 | 2,362,984 | ||||||
British Sky Broadcasting Group PLC | 254,520 | 3,305,255 | ||||||
Capita PLC | 115,470 | 1,703,147 | ||||||
Compass Group PLC | 362,880 | 4,805,064 | ||||||
GlaxoSmithKline PLC | 157,416 | 4,006,906 | ||||||
Pearson PLC | 206,304 | 4,056,165 | ||||||
Randgold Resources Ltd. | 7,224 | 568,239 | ||||||
Reckitt Benckiser Group PLC | 42,168 | 2,860,322 | ||||||
Serco Group PLC | 326,163 | 2,762,366 | ||||||
Shire PLC | 62,380 | 2,293,702 | ||||||
SSE PLC | 93,796 | 2,267,805 | ||||||
Unilever PLC | 13,776 | 524,015 | ||||||
Vodafone Group PLC | 856,128 | 2,731,461 | ||||||
Wm Morrison Supermarkets PLC | 317,520 | 1,425,381 | ||||||
|
| |||||||
38,959,879 | ||||||||
UNITED STATES — 51.08% | ||||||||
3M Co. | 4,032 | 457,955 | ||||||
Abbott Laboratories | 209,160 | 6,971,303 | ||||||
Actavis Inc.b | 4,788 | 647,242 | ||||||
Activision Blizzard Inc. | 213,696 | 3,487,519 | ||||||
Advance Auto Parts Inc. | 28,728 | 2,300,251 | ||||||
Airgas Inc. | 6,216 | 631,856 | ||||||
Alleghany Corp.b | 8,064 | 3,121,494 | ||||||
Allergan Inc. | 5,778 | 510,660 | ||||||
Altria Group Inc. | 159,768 | 5,412,940 | ||||||
American Capital Agency Corp. | 255,360 | 5,811,994 | ||||||
AmerisourceBergen Corp. | 117,096 | 6,665,104 | ||||||
Amgen Inc. | 33,096 | 3,605,478 | ||||||
Annaly Capital Management Inc.a | 609,504 | 7,112,912 | ||||||
Aon PLC | 50,904 | 3,379,007 | ||||||
Arch Capital Group Ltd.a,b | 84,168 | 4,486,996 | ||||||
AT&T Inc. | 127,848 | 4,325,098 | ||||||
Automatic Data Processing Inc. | 224,377 | 15,966,667 | ||||||
AutoZone Inc.a,b | 16,632 | 6,984,442 | ||||||
Becton, Dickinson and Co. | 62,160 | 6,053,141 |
Security | Shares | Value | ||||||
BMC Software Inc.b | 15,960 | $ | 734,160 | |||||
Bristol-Myers Squibb Co. | 266,112 | 11,094,209 | ||||||
C.H. Robinson Worldwide Inc. | 12,264 | 697,454 | ||||||
C.R. Bard Inc. | 50,232 | 5,770,150 | ||||||
Campbell Soup Co. | 122,640 | 5,295,595 | ||||||
Chevron Corp. | 5,506 | 663,088 | ||||||
Chubb Corp. (The) | 79,464 | 6,609,021 | ||||||
Church & Dwight Co. Inc. | 81,834 | 4,856,848 | ||||||
Clorox Co. (The) | 65,636 | 5,428,097 | ||||||
Coca-Cola Co. (The) | 98,784 | 3,771,573 | ||||||
Colgate-Palmolive Co. | 166,656 | 9,627,717 | ||||||
Consolidated Edison Inc. | 186,312 | 10,476,324 | ||||||
Costco Wholesale Corp. | 8,409 | 940,715 | ||||||
Dollar General Corp.b | 82,320 | 4,442,810 | ||||||
Dollar Tree Inc.b | 55,104 | 2,903,981 | ||||||
Dominion Resources Inc. | 115,920 | 6,763,932 | ||||||
Duke Energy Corp. | 120,792 | 7,923,955 | ||||||
Ecolab Inc. | 63,504 | 5,801,090 | ||||||
Eli Lilly and Co. | 216,888 | 11,148,043 | ||||||
Everest Re Group Ltd. | 32,760 | 4,486,482 | ||||||
Exxon Mobil Corp. | 110,766 | 9,654,364 | ||||||
Family Dollar Stores Inc. | 56,280 | 4,006,573 | ||||||
Federal Realty Investment Trust | 38,808 | 3,776,406 | ||||||
First Republic Bank | 57,960 | 2,566,469 | ||||||
Forest Laboratories Inc.b | 109,596 | 4,661,118 | ||||||
General Mills Inc. | 294,840 | 14,541,509 | ||||||
Genuine Parts Co. | 13,104 | 1,009,139 | ||||||
Health Care REIT Inc. | 91,896 | 5,646,090 | ||||||
Hershey Co. (The) | 51,576 | 4,742,413 | ||||||
Hormel Foods Corp. | 91,896 | 3,807,251 | ||||||
International Business Machines Corp. | 31,248 | 5,695,573 | ||||||
Intuit Inc. | 68,376 | 4,343,927 | ||||||
J.M. Smucker Co. (The) | 53,424 | 5,670,423 | ||||||
Johnson & Johnson | 180,699 | 15,614,201 | ||||||
Kellogg Co. | 145,366 | 8,825,170 | ||||||
Kimberly-Clark Corp. | 101,808 | 9,517,012 | ||||||
Kinder Morgan Inc. | 118,944 | 4,511,546 | ||||||
Kinder Morgan Management LLCa,b | 67,173 | 5,363,092 | ||||||
Laboratory Corp. of America Holdingsa,b | 47,880 | 4,583,074 | ||||||
Marsh & McLennan Companies Inc. | 166,824 | 6,878,153 |
18 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI ALL COUNTRY WORLD MINIMUM VOLATILITY ETF
August 31, 2013
Security | Shares | Value | ||||||
McCormick & Co. Inc. NVS | 70,224 | $ | 4,750,654 | |||||
McDonald’s Corp. | 154,392 | 14,568,429 | ||||||
McKesson Corp. | 13,866 | 1,683,471 | ||||||
Microsoft Corp. | 194,208 | 6,486,547 | ||||||
Motorola Solutions Inc. | 7,728 | 432,845 | ||||||
Newmont Mining Corp. | 15,456 | 491,037 | ||||||
NextEra Energy Inc. | 12,148 | 976,213 | ||||||
O’Reilly Automotive Inc.b | 59,808 | 7,339,040 | ||||||
PartnerRe Ltd. | 34,440 | 3,001,446 | ||||||
Patterson Companies Inc. | 22,449 | 895,266 | ||||||
Paychex Inc. | 206,976 | 8,005,832 | ||||||
People’s United Financial Inc. | 210,672 | 2,995,756 | ||||||
PepsiCo Inc. | 102,816 | 8,197,520 | ||||||
Perrigo Co. | 12,432 | 1,511,110 | ||||||
PetSmart Inc. | 21,000 | 1,479,030 | ||||||
PG&E Corp. | 204,171 | 8,444,512 | ||||||
Procter & Gamble Co. (The) | 124,471 | 9,695,046 | ||||||
Raytheon Co. | 12,108 | 913,064 | ||||||
Realty Income Corp.a | 126,243 | 4,986,598 | ||||||
RenaissanceRe Holdings Ltd.a | 28,392 | 2,481,461 | ||||||
Republic Services Inc. | 81,696 | 2,655,937 | ||||||
Reynolds American Inc. | 45,720 | 2,177,644 | ||||||
Ross Stores Inc. | 71,400 | 4,802,364 | ||||||
SAIC Inc. | 177,240 | 2,671,007 | ||||||
SCANA Corp. | 12,381 | 595,774 | ||||||
Sherwin-Williams Co. (The) | 4,536 | 782,006 | ||||||
Southern Co. (The) | 341,040 | 14,194,085 | ||||||
Stericycle Inc.b | 47,880 | 5,389,373 | ||||||
Synopsys Inc.b | 95,256 | 3,453,983 | ||||||
Target Corp. | 107,352 | 6,796,455 | ||||||
TJX Companies Inc. (The) | 179,424 | 9,459,233 | ||||||
Total System Services Inc. | 101,976 | 2,821,676 | ||||||
Travelers Companies Inc. (The) | 54,264 | 4,335,694 | ||||||
Verisk Analytics Inc. Class Ab | 84,336 | 5,244,012 | ||||||
Verizon Communications Inc. | 177,447 | 8,407,439 | ||||||
W.R. Berkley Corp. | 73,416 | 3,018,866 | ||||||
Wal-Mart Stores Inc. | 110,376 | 8,055,240 | ||||||
Waste Management Inc. | 157,479 | 6,368,451 | ||||||
Wisconsin Energy Corp. | 147,840 | 6,067,354 | ||||||
Xcel Energy Inc. | 167,199 | 4,668,196 | ||||||
Yum! Brands Inc. | 10,080 | 705,802 | ||||||
|
| |||||||
514,786,274 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | 998,402,541 |
Security | Shares | Value | ||||||
INVESTMENT COMPANIES — 0.25% |
| |||||||
INDIA — 0.25% | ||||||||
iShares India 50 ETFc | 135,154 | $ | 2,555,762 | |||||
|
| |||||||
2,555,762 | ||||||||
|
| |||||||
TOTAL INVESTMENT COMPANIES |
| 2,555,762 | ||||||
PREFERRED STOCKS — 0.37% |
| |||||||
COLOMBIA — 0.37% | ||||||||
Banco Davivienda SA | 60,480 | 770,756 | ||||||
Grupo Argos SA | 78,120 | 880,998 | ||||||
Grupo Aval Acciones y Valores SA | 1,025,808 | 730,980 | ||||||
Grupo de Inversiones Suramericana SA | 64,680 | 1,301,883 | ||||||
|
| |||||||
3,684,617 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS | 3,684,617 | |||||||
SHORT-TERM INVESTMENTS — 2.75% |
| |||||||
MONEY MARKET FUNDS — 2.75% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.15%c,d,e | 24,569,694 | 24,569,694 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
0.13%c,d,e | 1,560,157 | 1,560,157 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.00%c,d | 1,565,484 | 1,565,484 | ||||||
|
| |||||||
27,695,335 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| 27,695,335 | ||||||
|
|
SCHEDULESOF INVESTMENTS | 19 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI ALL COUNTRY WORLD MINIMUM VOLATILITY ETF
August 31, 2013
Value | ||||||
TOTAL INVESTMENTS | $ | 1,032,338,255 | ||||
Other Assets, Less Liabilities — (2.44)% | (24,578,655 | ) | ||||
|
| |||||
NET ASSETS — 100.00% | $ | 1,007,759,600 | ||||
|
|
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.
20 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
iSHARES® MSCI EMERGING MARKETS EMEA ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 97.67% |
| |||||||
CZECH REPUBLIC — 1.52% |
| |||||||
CEZ AS | 1,410 | $ | 32,500 | |||||
Komercni Banka AS | 125 | 26,855 | ||||||
Telefonica O2 Czech Republic AS | 902 | 13,441 | ||||||
|
| |||||||
72,796 | ||||||||
EGYPT — 1.26% | ||||||||
Commercial International Bank (Egypt) SAE SP GDR | 6,100 | 28,975 | ||||||
Orascom Telecom Holding SAE SP GDRa,b | 10,502 | 31,338 | ||||||
|
| |||||||
60,313 | ||||||||
HUNGARY — 1.27% | ||||||||
Magyar Telekom Telecommunications PLC | 4,496 | 6,191 | ||||||
MOL Hungarian Oil and Gas PLC | 337 | 23,852 | ||||||
OTP Bank PLC | 1,670 | 30,948 | ||||||
|
| |||||||
60,991 | ||||||||
POLAND — 9.73% | ||||||||
Alior Bank SAa | 287 | 8,111 | ||||||
Bank Handlowy w Warszawie SA | 270 | 8,531 | ||||||
Bank Millennium SAa | 3,123 | 6,414 | ||||||
Bank Pekao SA | 992 | 53,311 | ||||||
Bank Zachodni WBK SA | 262 | 25,239 | ||||||
BRE Bank SA | 117 | 15,972 | ||||||
Cyfrowy Polsat SAa | 1,577 | 9,800 | ||||||
ENEA SA | 937 | 4,167 | ||||||
Eurocash SA | 623 | 9,986 | ||||||
Grupa Azoty SA | 250 | 5,637 | ||||||
Grupa Lotos SAa | 385 | 4,529 | ||||||
Jastrzebska Spolka Weglowa SA | 306 | 6,420 | ||||||
Kernel Holding SAa | 431 | 6,310 | ||||||
KGHM Polska Miedz SA | 1,116 | 42,258 | ||||||
Polska Grupa Energetyczna SA | 5,577 | 29,265 | ||||||
Polski Koncern Naftowy Orlen SA | 2,366 | 32,877 | ||||||
Polskie Gornictwo Naftowe i Gazownictwo SA | 14,214 | 27,131 | ||||||
Powszechna Kasa Oszczednosci Bank Polski SAa | 7,140 | 84,483 | ||||||
Powszechny Zaklad Ubezpieczen SA | 444 | 60,057 | ||||||
Synthos SA | 4,053 | 5,545 | ||||||
Tauron Polska Energia SA | 7,375 | 9,749 |
Security | Shares | Value | ||||||
Telekomunikacja Polska SA | 4,793 | $ | 11,325 | |||||
|
| |||||||
467,117 | ||||||||
RUSSIA — 32.45% | ||||||||
Federal Grid Co. of Unified Energy System OJSCa | 2,680,000 | 8,528 | ||||||
Gazprom OAO | 92,940 | 368,099 | ||||||
INTER RAO UES OJSCa | 10,700,000 | 3,801 | ||||||
LSR Group OJSC SP GDRb | 1,874 | 7,871 | ||||||
LUKOIL OAO | 4,060 | 234,618 | ||||||
Magnit OJSC SP GDRb | 2,031 | 112,720 | ||||||
MegaFon OAO SP GDR | 666 | 22,511 | ||||||
MMC Norilsk Nickel OJSC | 392 | 51,438 | ||||||
Mobile TeleSystems OJSC SP ADR | 4,108 | 86,925 | ||||||
NovaTek OAO SP GDRb | 729 | 87,334 | ||||||
Rosneft Oil Co. OJSC | 9,310 | 68,863 | ||||||
Rostelecom OJSC | 9,190 | 27,736 | ||||||
RusHydro OJSC | 864,000 | 14,022 | ||||||
Sberbank of Russia | 84,030 | 222,622 | ||||||
Severstal OAO | 1,660 | 13,752 | ||||||
Sistema JSFC SP GDRb | 975 | 21,586 | ||||||
Surgutneftegas OJSC | 57,800 | 45,250 | ||||||
Tatneft OAO Class S | 11,240 | 70,451 | ||||||
TMK OAO SP GDRb | 445 | 5,727 | ||||||
Uralkali OJSC | 10,150 | 48,307 | ||||||
VTB Bank OJSC | 25,900,000 | 34,608 | ||||||
|
| |||||||
1,556,769 | ||||||||
SOUTH AFRICA — 42.11% | ||||||||
African Bank Investments Ltd. | 5,542 | 8,837 | ||||||
African Rainbow Minerals Ltd. | 906 | 16,660 | ||||||
Anglo American Platinum Ltd.a | 549 | 21,966 | ||||||
AngloGold Ashanti Ltd. | 3,016 | 41,230 | ||||||
Aspen Pharmacare Holdings Ltd.a | 2,297 | 52,931 | ||||||
Assore Ltd. | 278 | 10,641 | ||||||
Barclays Africa Group Ltd. | 2,531 | 33,859 | ||||||
Barloworld Ltd. | 1,619 | 13,874 | ||||||
Bidvest Group Ltd. | 2,355 | 58,129 | ||||||
Discovery Ltd. | 2,328 | 19,238 | ||||||
Exxaro Resources Ltd. | 1,020 | 16,174 | ||||||
FirstRand Ltd. | 24,367 | 71,547 | ||||||
Foschini Group Ltd. (The) | 1,732 | 16,275 | ||||||
Gold Fields Ltd. | 5,924 | 31,185 | ||||||
Growthpoint Properties Ltd. | 13,794 | 31,990 | ||||||
Harmony Gold Mining Co. Ltd. | 3,239 | 12,224 | ||||||
Impala Platinum Holdings Ltd. | 4,355 | 48,266 |
SCHEDULESOF INVESTMENTS | 21 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS EMEA ETF
August 31, 2013
Security | Shares | Value | ||||||
Imperial Holdings Ltd. | 1,457 | $ | 29,625 | |||||
Investec Ltd. | 1,914 | 12,417 | ||||||
Kumba Iron Ore Ltd. | 644 | 28,298 | ||||||
Liberty Holdings Ltd. | 941 | 10,567 | ||||||
Life Healthcare Group Holdings Ltd. | 7,634 | 26,388 | ||||||
Massmart Holdings Ltd. | 959 | 14,750 | ||||||
Mediclinic International Ltd. | 2,913 | 20,967 | ||||||
MMI Holdings Ltd. | 8,126 | 16,322 | ||||||
Mr. Price Group Ltd. | 1,940 | 23,721 | ||||||
MTN Group Ltd. | 13,246 | 242,971 | ||||||
Nampak Ltd. | 4,629 | 13,560 | ||||||
Naspers Ltd. Class N | 3,071 | 254,403 | ||||||
Nedbank Group Ltd. | 1,504 | 27,686 | ||||||
Netcare Ltd. | 7,036 | 15,953 | ||||||
Northam Platinum Ltd.a | 2,185 | 8,897 | ||||||
Pick n Pay Stores Ltd. | 2,739 | 10,241 | ||||||
PPC Ltd. | 3,811 | 11,026 | ||||||
Redefine Properties Ltd. | 23,438 | 20,964 | ||||||
Remgro Ltd. | 3,687 | 67,324 | ||||||
Reunert Ltd. | 1,514 | 10,112 | ||||||
RMB Holdings Ltd. | 5,811 | 22,941 | ||||||
RMI Holdings Ltd. | 5,263 | 13,295 | ||||||
Sanlam Ltd. | 13,590 | 61,083 | ||||||
Sappi Ltd.a | 4,068 | 9,720 | ||||||
Sasol Ltd. | 4,246 | 199,771 | ||||||
Shoprite Holdings Ltd. | 3,358 | 52,844 | ||||||
SPAR Group Ltd. (The) | 1,465 | 16,487 | ||||||
Standard Bank Group Ltd. | 9,451 | 105,667 | ||||||
Steinhoff International Holdings Ltd.a | 10,941 | 31,367 | ||||||
Tiger Brands Ltd. | 1,325 | 36,585 | ||||||
Truworths International Ltd. | 3,659 | 29,305 | ||||||
Vodacom Group Ltd. | 2,777 | 31,472 | ||||||
Woolworths Holdings Ltd. | 5,792 | 38,578 | ||||||
|
| |||||||
2,020,333 | ||||||||
TURKEY — 9.33% | ||||||||
Akbank TAS | 14,335 | 47,684 | ||||||
Anadolu Efes Biracilik ve Malt Sanayii AS | 1,746 | 20,173 | ||||||
Arcelik AS | 2,046 | 10,339 | ||||||
BIM Birlesik Magazalar AS | 1,718 | 31,608 | ||||||
Coca-Cola Icecek AS | 492 | 11,538 | ||||||
Emlak Konut Gayrimenkul Yatirim Ortakligi AS | 5,202 | 6,074 | ||||||
Enka Insaat ve Sanayi AS | 3,539 | 8,491 |
Security | Shares | Value | ||||||
Eregli Demir ve Celik Fabrikalari TAS | 10,638 | $ | 11,534 | |||||
Ford Otomotiv Sanayi AS | 648 | 8,107 | ||||||
Haci Omer Sabanci Holding AS | 6,527 | 27,860 | ||||||
KOC Holding AS | 5,065 | 20,476 | ||||||
Koza Altin Isletmeleri AS | 331 | 5,213 | ||||||
TAV Havalimanlari Holding AS | 1,293 | 7,010 | ||||||
Tofas Turk Otomobil Fabrikasi AS | 1,119 | 5,792 | ||||||
Turk Hava Yollari AO | 4,508 | 13,978 | ||||||
Turk Telekomunikasyon AS | 3,678 | 11,260 | ||||||
Turkcell Iletisim Hizmetleri ASa | 5,938 | 31,172 | ||||||
Turkiye Garanti Bankasi AS | 17,981 | 62,105 | ||||||
Turkiye Halk Bankasi AS | 4,957 | 31,616 | ||||||
Turkiye Is Bankasi AS Class C | 11,334 | 26,580 | ||||||
Turkiye Petrol Rafinerileri AS | 1,004 | 19,309 | ||||||
Turkiye Sise ve Cam Fabrikalari AS | 3,787 | 4,887 | ||||||
Turkiye Vakiflar Bankasi TAO Class D | 6,024 | 11,822 | ||||||
Yapi ve Kredi Bankasi AS | 6,662 | 13,270 | ||||||
|
| |||||||
447,898 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $5,442,294) |
| 4,686,217 | ||||||
PREFERRED STOCKS — 1.60% |
| |||||||
RUSSIA — 1.60% |
| |||||||
AK Transneft OAO | 12 | 27,565 | ||||||
Sberbank of Russia | 6,900 | 14,503 | ||||||
Surgutneftegas OJSC | 51,400 | 34,727 | ||||||
|
| |||||||
76,795 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $75,457) |
| 76,795 | ||||||
SHORT-TERM INVESTMENTS — 0.63% |
| |||||||
MONEY MARKET FUNDS — 0.63% |
| |||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.00%c,d | 30,176 | 30,176 | ||||||
|
| |||||||
30,176 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $30,176) |
| 30,176 | ||||||
|
|
22 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS EMEA ETF
August 31, 2013
Value | ||||||
TOTAL INVESTMENTS | ||||||
(Cost: $5,547,927) | $ | 4,793,188 | ||||
Other Assets, Less Liabilities — 0.10% | 4,869 | |||||
|
| |||||
NET ASSETS — 100.00% | $ | 4,798,057 | ||||
|
|
SP ADR — Sponsored American Depositary Receipts
SP GDR — Sponsored Global Depositary Receipts
a | Non-income earning security. |
b | This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933. |
c | Affiliated issuer. See Note 2. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 23 |
Table of Contents
Schedule of Investments
iSHARES® MSCI FRONTIER 100 ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 99.76% |
| |||||||
ARGENTINA — 4.18% |
| |||||||
Banco Macro SA SP ADRa | 102,114 | $ | 1,886,046 | |||||
BBVA Banco Frances SA SP ADRa | 119,784 | 583,348 | ||||||
IRSA Inversiones y Representaciones SA SP ADR | 55,800 | 469,836 | ||||||
Petrobras Argentina SA Class B SP ADR | 192,324 | 873,151 | ||||||
Telecom Argentina SA SP ADRa | 230,268 | 4,335,946 | ||||||
YPF SA SP ADR | 210,924 | 3,560,397 | ||||||
|
| |||||||
11,708,724 | ||||||||
BANGLADESH — 1.70% |
| |||||||
GrameenPhone Ltd. | 409,200 | 1,123,108 | ||||||
Islami Bank Bangladesh Ltd. | 2,083,292 | 997,214 | ||||||
Prime Bank Ltd. | 1,348,575 | 369,615 | ||||||
Square Pharmaceuticals Ltd. | 713,205 | 1,559,204 | ||||||
Titas Gas Transmission & Distribution Co. Ltd. | 651,400 | 714,977 | ||||||
|
| |||||||
4,764,118 | ||||||||
ESTONIA — 0.34% |
| |||||||
Tallink Group AS | 764,274 | 947,306 | ||||||
|
| |||||||
947,306 | ||||||||
JORDAN — 0.72% |
| |||||||
Arab Bank PLC | 159,030 | 1,539,508 | ||||||
Jordan Phosphate Mines Co. | 27,900 | 304,392 | ||||||
Jordan Telecommunications Co. PSC | 42,594 | 178,779 | ||||||
|
| |||||||
2,022,679 | ||||||||
KAZAKHSTAN — 3.48% |
| |||||||
Halyk Savings Bank of Kazakhstan JSC SP GDR | 190,092 | 1,463,708 | ||||||
KazMunaiGaz Exploration Production JSC SP GDR | 438,960 | 6,070,817 | ||||||
KCell JSC SP GDR | 138,198 | 2,211,168 | ||||||
|
| |||||||
9,745,693 | ||||||||
KENYA — 3.95% |
| |||||||
Co-operative Bank of Kenya Ltd. (The) | 3,556,506 | 651,992 | ||||||
East African Breweries Ltd. | 985,842 | 3,197,934 | ||||||
Equity Bank Ltd. | 5,170,800 | 1,934,252 | ||||||
Kenya Commercial Bank Ltd. | 5,821,860 | 2,792,897 |
Security | Shares | Value | ||||||
Safaricom Ltd. | 28,253,400 | $ | 2,484,879 | |||||
|
| |||||||
11,061,954 | ||||||||
KUWAIT — 26.13% |
| |||||||
Agility Public Warehousing Co. KSC | 1,941,000 | 4,758,186 | ||||||
Boubyan Bank KSCa | 931,250 | 2,054,588 | ||||||
Boubyan Petrochemicals Co. | 930,000 | 2,084,398 | ||||||
Burgan Bank SAK | 1,282,500 | 2,470,233 | ||||||
Gulf Bank KSCa | 3,721,500 | 5,082,770 | ||||||
Kuwait Finance House | 4,942,000 | 12,287,936 | ||||||
Kuwait International Bank | 1,870,000 | 2,030,117 | ||||||
Kuwait Projects Co. Holding KSC | 1,872,500 | 3,541,061 | ||||||
Mabanee Co. SAKC | 600,500 | 2,355,314 | ||||||
Mobile Telecommunications Co. KSC | 6,510,000 | 15,502,714 | ||||||
National Bank of Kuwait | 5,815,500 | 18,533,024 | ||||||
National Industries Group Holdinga | 2,840,000 | 2,486,430 | ||||||
|
| |||||||
73,186,771 | ||||||||
MAURITIUS — 0.96% |
| |||||||
Mauritius Commercial Bank | 267,468 | 1,672,756 | ||||||
State Bank of Mauritius Ltd. | 29,707,362 | 1,008,168 | ||||||
|
| |||||||
2,680,924 | ||||||||
NIGERIA — 12.09% |
| |||||||
Access Bank PLC | 32,170,746 | 2,126,991 | ||||||
Afriland Properties PLCa | 7,291 | 98 | ||||||
FBN Holdings PLC | 45,460,260 | 4,452,796 | ||||||
Guaranty Trust Bank PLC | 40,371,300 | 6,062,491 | ||||||
Guinness Nigeria PLC | 1,655,958 | 2,585,058 | ||||||
Lafarge Cement WAPCO Nigeria PLC | 2,631,714 | 1,498,313 | ||||||
Nigerian Breweries PLC | 9,381,199 | 9,475,959 | ||||||
Union Bank of Nigeria PLCa | 5,813,988 | 366,600 | ||||||
United Bank for Africa PLC | 45,184,794 | 2,027,576 | ||||||
Zenith Bank PLC | 43,662,198 | 5,268,331 | ||||||
|
| |||||||
33,864,213 | ||||||||
OMAN — 3.96% |
| |||||||
Ahli Bank SAOG | 1,077,684 | 587,828 | ||||||
BankMuscat SAOG | 2,185,872 | 3,457,652 | ||||||
HSBC Bank Oman SAOG | 2,438,274 | 1,171,638 | ||||||
National Bank of Oman SAOG | 617,706 | 486,143 | ||||||
Oman Cement Co. SAOG | 423,150 | 862,786 | ||||||
Oman Telecommunications Co. SAOG | 610,824 | 2,652,721 |
24 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI FRONTIER 100 ETF
August 31, 2013
Security | Shares | Value | ||||||
Omani Qatari Telecommunications Co. SAOG | 710,706 | $ | 958,069 | |||||
Raysut Cement Co. | 181,164 | 920,407 | ||||||
|
| |||||||
11,097,244 | ||||||||
PAKISTAN — 4.83% |
| |||||||
Engro Corp. Ltd.a | 465,000 | 629,673 | ||||||
Fauji Fertilizer Co. Ltd. | 1,599,650 | 1,651,247 | ||||||
Hub Power Co. Ltd. (The) | 1,209,030 | 821,719 | ||||||
MCB Bank Ltd. | 1,171,879 | 2,905,807 | ||||||
National Bank of Pakistan | 1,581,126 | 715,653 | ||||||
Oil & Gas Development Co. Ltd. | 1,729,800 | 4,173,672 | ||||||
Pakistan Oilfields Ltd. | 186,000 | 854,767 | ||||||
Pakistan Petroleum Ltd. | 372,375 | 844,615 | ||||||
United Bank Ltd. | 744,067 | 943,757 | ||||||
|
| |||||||
13,540,910 | ||||||||
QATAR — 18.86% |
| |||||||
Al Khalij Commercial Bank | 235,290 | 1,194,687 | ||||||
Barwa Real Estate Co. | 257,610 | 1,733,175 | ||||||
Commercial Bank of Qatar QSC (The) | 131,316 | 2,466,536 | ||||||
Doha Bank QSC | 171,864 | 2,534,387 | ||||||
Industries Qatar QSC | 189,534 | 7,989,309 | ||||||
Masraf Al Rayan QSC | 959,760 | 7,616,829 | ||||||
Ooredoo QSC | 212,040 | 8,093,685 | ||||||
Qatar Electricity & Water Co. QSC | 65,286 | 2,832,637 | ||||||
Qatar Gas Transport Co. Ltd. | 350,982 | 1,859,220 | ||||||
Qatar Islamic Bank SAQ | 134,292 | 2,574,064 | ||||||
Qatar National Bank SAQ | 219,294 | 10,086,844 | ||||||
Qatar Navigation QSC | 73,842 | 1,581,655 | ||||||
Vodafone Qatar QSCa | 910,284 | 2,254,744 | ||||||
|
| |||||||
52,817,772 | ||||||||
ROMANIA — 1.15% |
| |||||||
Banca Transilvaniaa | 3,570,456 | 1,529,672 | ||||||
BRD-Groupe Societe Generale SAa | 232,872 | 588,909 | ||||||
OMV Petrom SA | 8,556,000 | 1,107,318 | ||||||
|
| |||||||
3,225,899 | ||||||||
SLOVENIA — 0.11% |
| |||||||
Telekom Slovenije DD | 2,046 | 299,462 | ||||||
|
| |||||||
299,462 | ||||||||
SRI LANKA — 1.31% |
| |||||||
Commercial Bank of Ceylon PLC | 1,339,944 | 1,163,503 |
Security | Shares | Value | ||||||
John Keells Holdings PLC | 1,542,684 | $ | 2,493,367 | |||||
|
| |||||||
3,656,870 | ||||||||
UNITED ARAB EMIRATES — 14.24% |
| |||||||
Abu Dhabi Commercial Bank PJSC | 2,907,366 | 3,878,546 | ||||||
Arabtec Holding Co.a | 4,067,262 | 2,524,702 | ||||||
Dana Gas PJSCa | 8,778,828 | 1,362,337 | ||||||
DP World Ltd. | 435,240 | 6,746,220 | ||||||
Dubai Financial Market PJSCa | 5,290,584 | 2,592,682 | ||||||
Dubai Islamic Bank PJSC | 1,518,132 | 1,380,477 | ||||||
Emaar Properties PJSC | 7,949,268 | 12,444,233 | ||||||
First Gulf Bank PJSC | 864,342 | 3,776,886 | ||||||
National Bank of Abu Dhabi PJSC | 1,463,820 | 5,180,888 | ||||||
|
| |||||||
39,886,971 | ||||||||
VIETNAM — 1.75% |
| |||||||
Bank for Foreign Trade of Vietnam JSC | 487,320 | 568,981 | ||||||
HAGL JSCa | 768,180 | 737,133 | ||||||
Masan Group Corp.a | 221,340 | 857,948 | ||||||
Petrovietnam Fertilizer & Chemicals JSC | 394,320 | 747,447 | ||||||
Saigon Thuong Tin Commercial JSB | 504,066 | 402,681 | ||||||
Vingroup JSCa | 539,408 | 1,593,618 | ||||||
|
| |||||||
4,907,808 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $280,839,035) |
| 279,415,318 | ||||||
CONVERTIBLE BONDS — 0.01% |
| |||||||
OMAN — 0.01% |
| |||||||
BankMuscat SAOG | ||||||||
4.50%, 03/20/16 | 78,360 | 21,574 | ||||||
|
| |||||||
21,574 | ||||||||
|
| |||||||
TOTAL CONVERTIBLE BONDS |
| |||||||
(Cost: $20,557) |
| 21,574 | ||||||
SHORT-TERM INVESTMENTS — 0.92% |
| |||||||
MONEY MARKET FUNDS — 0.92% |
| |||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.00%b,c | 2,574,884 | 2,574,884 | ||||||
|
| |||||||
2,574,884 | ||||||||
|
|
SCHEDULESOF INVESTMENTS | 25 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI FRONTIER 100 ETF
August 31, 2013
Security | Shares | Value | ||||
TOTAL SHORT-TERM INVESTMENTS | ||||||
(Cost: $2,574,884) | $ | 2,574,884 | ||||
|
| |||||
TOTAL INVESTMENTS | ||||||
(Cost: $283,434,476) | 282,011,776 | |||||
Other Assets, Less Liabilities — (0.69)% | (1,928,217 | ) | ||||
|
| |||||
NET ASSETS — 100.00% | $ | 280,083,559 | ||||
|
|
SP ADR — Sponsored American Depositary Receipts
SP GDR — Sponsored Global 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.
26 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 99.37% |
| |||||||
AUSTRALIA — 3.37% |
| |||||||
AGL Energy Ltd. | 560 | $ | 7,856 | |||||
ALS Ltd. | 436 | 3,573 | ||||||
Amcor Ltd. | 1,264 | 11,742 | ||||||
AMP Ltd. | 2,404 | 10,149 | ||||||
APA Group | 980 | 5,228 | ||||||
Asciano Ltd. | 1,192 | 5,913 | ||||||
ASX Ltd. | 243 | 7,672 | ||||||
Aurizon Holdings Ltd. | 1,948 | 7,894 | ||||||
Australia and New Zealand Banking Group Ltd. | 2,188 | 57,858 | ||||||
Bendigo and Adelaide Bank Ltd. | 488 | 4,394 | ||||||
BHP Billiton Ltd. | 2,784 | 88,645 | ||||||
Brambles Ltd. | 1,492 | 11,694 | ||||||
CFS Retail Property Trust Group | 3,288 | 5,915 | ||||||
Coca-Cola Amatil Ltd. | 616 | 6,737 | ||||||
Cochlear Ltd. | 60 | 3,065 | ||||||
Commonwealth Bank of Australia | 1,300 | 84,337 | ||||||
Computershare Ltd. | 496 | 4,263 | ||||||
Crown Ltd. | 572 | 7,443 | ||||||
CSL Ltd. | 448 | 27,129 | ||||||
Dexus Property Group | 7,524 | 6,902 | ||||||
Echo Entertainment Group Ltd. | 1,020 | 2,453 | ||||||
Fortescue Metals Group Ltd. | 1,308 | 5,044 | ||||||
Goodman Group | 2,040 | 8,412 | ||||||
GPT Group | 2,392 | 7,563 | ||||||
Iluka Resources Ltd. | 464 | 4,443 | ||||||
Incitec Pivot Ltd. | 1,768 | 4,078 | ||||||
Insurance Australia Group Ltd. | 1,948 | 10,098 | ||||||
James Hardie Industries SE | 616 | 5,382 | ||||||
Lend Lease Group | 844 | 7,201 | ||||||
Macquarie Group Ltd. | 304 | 11,875 | ||||||
Mirvac Group | 5,424 | 7,947 | ||||||
National Australia Bank Ltd. | 1,940 | 56,069 | ||||||
Newcrest Mining Ltd. | 860 | 10,157 | ||||||
Orica Ltd. | 380 | 6,346 | ||||||
Origin Energy Ltd. | 1,000 | 11,801 | ||||||
QBE Insurance Group Ltd. | 1,032 | 13,971 | ||||||
Ramsay Health Care Ltd. | 164 | 5,456 | ||||||
Rio Tinto Ltd. | 392 | 20,355 | ||||||
Santos Ltd. | 876 | 11,641 | ||||||
Sonic Healthcare Ltd. | 424 | 5,834 | ||||||
SP AusNet | 936 | 963 |
Security | Shares | Value | ||||||
Stockland Corp. Ltd. | 2,568 | $ | 8,531 | |||||
Suncorp Group Ltd. | 1,084 | 11,904 | ||||||
Tatts Group Ltd. | 1,976 | 5,649 | ||||||
Telstra Corp. Ltd. | 3,476 | 15,170 | ||||||
Toll Holdings Ltd. | 604 | 2,937 | ||||||
Transurban Group | 1,392 | 8,369 | ||||||
Wesfarmers Ltd. | 912 | 33,027 | ||||||
Westfield Group | 2,116 | 20,882 | ||||||
Westfield Retail Trust | 3,684 | 9,581 | ||||||
Westpac Banking Corp. | 2,568 | 71,795 | ||||||
Woodside Petroleum Ltd. | 572 | 19,451 | ||||||
Woolworths Ltd. | 1,108 | 35,201 | ||||||
WorleyParsons Ltd. | 208 | 4,077 | ||||||
|
| |||||||
832,072 | ||||||||
AUSTRIA — 0.15% | ||||||||
Andritz AG | 116 | 6,379 | ||||||
Erste Group Bank AG | 328 | 10,490 | ||||||
IMMOFINANZ AGa | 2,032 | 7,995 | ||||||
OMV AG | 188 | 8,659 | ||||||
Telekom Austria AG | 404 | 2,898 | ||||||
|
| |||||||
36,421 | ||||||||
BELGIUM — 0.46% | ||||||||
Ageas | 240 | 9,424 | ||||||
Anheuser-Busch InBev NV | 688 | 63,848 | ||||||
Belgacom SA | 96 | 2,291 | ||||||
Colruyt SA | 84 | 4,639 | ||||||
Groupe Bruxelles Lambert SA | 52 | 4,135 | ||||||
KBC Groep NV | 256 | 11,234 | ||||||
Solvay SA | 56 | 7,783 | ||||||
UCB SA | 84 | 4,874 | ||||||
Umicore SA | 108 | 4,986 | ||||||
|
| |||||||
113,214 | ||||||||
CANADA — 4.26% | ||||||||
Agnico-Eagle Mines Ltd. | 192 | 5,779 | ||||||
Agrium Inc. | 140 | 11,958 | ||||||
Alimentation Couche-Tard Inc. Class B | 140 | 8,061 | ||||||
ARC Resources Ltd. | 284 | 6,790 | ||||||
Athabasca Oil Corp.a | 400 | 2,859 | ||||||
Bank of Montreal | 512 | 32,087 | ||||||
Bank of Nova Scotia | 928 | 51,463 | ||||||
Barrick Gold Corp. | 896 | 17,081 | ||||||
Baytex Energy Corp. | 132 | 5,212 | ||||||
BCE Inc. | 172 | 7,042 | ||||||
Blackberry Ltd.a,b | 428 | 4,317 |
SCHEDULESOF INVESTMENTS | 27 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI WORLD ETF
August 31, 2013
Security | Shares | Value | ||||||
Bombardier Inc. Class B | 1,592 | $ | 7,229 | |||||
Brookfield Asset Management Inc. Class A | 748 | 25,832 | ||||||
Brookfield Office Properties Inc. | 404 | 6,453 | ||||||
Cameco Corp. | 384 | 7,299 | ||||||
Canadian Imperial Bank of Commerce | 316 | 24,641 | ||||||
Canadian National Railway Co. | 376 | 35,208 | ||||||
Canadian Natural Resources Ltd. | 960 | 29,249 | ||||||
Canadian Oil Sands Ltd. | 456 | 8,736 | ||||||
Canadian Pacific Railway Ltd. | 184 | 21,606 | ||||||
Canadian Tire Corp. Ltd. Class A NVS | 76 | 6,418 | ||||||
Canadian Utilities Ltd. Class A | 128 | 4,146 | ||||||
Catamaran Corp.a | 196 | 10,717 | ||||||
Cenovus Energy Inc. | 672 | 19,226 | ||||||
CGI Group Inc. Class Aa | 240 | 7,951 | ||||||
CI Financial Corp. | 216 | 6,563 | ||||||
Crescent Point Energy Corp. | 316 | 11,509 | ||||||
Eldorado Gold Corp. | 640 | 5,442 | ||||||
Enbridge Inc. | 652 | 26,694 | ||||||
Encana Corp. | 684 | 11,665 | ||||||
Finning International Inc. | 212 | 4,204 | ||||||
First Quantum Minerals Ltd. | 460 | 7,627 | ||||||
Fortis Inc. | 212 | 6,099 | ||||||
Franco-Nevada Corp. | 180 | 8,182 | ||||||
George Weston Ltd. | 68 | 5,366 | ||||||
Gildan Activewear Inc. | 116 | 5,089 | ||||||
Goldcorp Inc. | 776 | 22,878 | ||||||
Great-West Lifeco Inc. | 188 | 5,302 | ||||||
Husky Energy Inc. | 312 | 8,808 | ||||||
IGM Financial Inc. | 116 | 5,197 | ||||||
Imperial Oil Ltd. | 264 | 11,006 | ||||||
Intact Financial Corp. | 112 | 6,473 | ||||||
Kinross Gold Corp. | 1,024 | 5,640 | ||||||
Loblaw Companies Ltd.b | 136 | 5,798 | ||||||
Magna International Inc. Class A | 172 | 13,200 | ||||||
Manulife Financial Corp. | 1,540 | 25,212 | ||||||
MEG Energy Corp.a | 144 | 4,653 | ||||||
Metro Inc. Class A | 128 | 8,183 | ||||||
National Bank of Canada | 128 | 9,900 | ||||||
New Gold Inc.a | 492 | 3,311 | ||||||
Onex Corp. | 112 | 5,318 | ||||||
Open Text Corp. | 60 | 4,118 | ||||||
Pacific Rubiales Energy Corp. | 292 | 5,517 | ||||||
Pembina Pipeline Corp. | 284 | 8,798 |
Security | Shares | Value | ||||||
Pengrowth Energy Corp. | 748 | $ | 4,127 | |||||
Penn West Petroleum Ltd. | 464 | 5,225 | ||||||
Potash Corp. of Saskatchewan Inc. | 748 | 22,088 | ||||||
Power Corp. of Canada | 272 | 7,449 | ||||||
Power Financial Corp. | 144 | 4,327 | ||||||
RioCan Real Estate Investment Trust | 268 | 5,983 | ||||||
Rogers Communications Inc. Class B | 320 | 12,616 | ||||||
Royal Bank of Canada | 1,180 | 72,596 | ||||||
Saputo Inc. | 144 | 6,383 | ||||||
Shaw Communications Inc. Class B | 364 | 8,758 | ||||||
Shoppers Drug Mart Corp. | 232 | 12,962 | ||||||
Silver Wheaton Corp. | 412 | 10,873 | ||||||
SNC-Lavalin Group Inc. | 164 | 6,152 | ||||||
Sun Life Financial Inc. | 500 | 15,219 | ||||||
Suncor Energy Inc. | 1,340 | 45,094 | ||||||
Talisman Energy Inc. | 916 | 9,769 | ||||||
Teck Resources Ltd. Class B | 524 | 13,173 | ||||||
TELUS Corp. NVS | 64 | 1,961 | ||||||
Thomson Reuters Corp. | 304 | 9,948 | ||||||
Tim Hortons Inc. | 176 | 9,610 | ||||||
Toronto-Dominion Bank (The) | 740 | 62,867 | ||||||
Tourmaline Oil Corp.a | 148 | 5,710 | ||||||
TransAlta Corp. | 300 | 3,851 | ||||||
TransCanada Corp. | 592 | 25,764 | ||||||
Turquoise Hill Resources Ltd.a | 556 | 2,888 | ||||||
Valeant Pharmaceuticals International Inc.a | 280 | 27,498 | ||||||
Vermilion Energy Inc. | 120 | 6,437 | ||||||
Yamana Gold Inc. | 716 | 8,172 | ||||||
|
| |||||||
1,052,612 | ||||||||
DENMARK — 0.51% |
| |||||||
Carlsberg A/S Class B | 120 | 11,613 | ||||||
Coloplast A/S Class B | 220 | 11,919 | ||||||
Danske Bank A/Sa | 692 | 13,822 | ||||||
DSV A/S | 336 | 8,796 | ||||||
Novo Nordisk A/S Class B | 368 | 61,340 | ||||||
Novozymes A/S Class B | 360 | 13,090 | ||||||
William Demant Holding A/Sa | 76 | 6,502 | ||||||
|
| |||||||
127,082 | ||||||||
FINLAND — 0.32% |
| |||||||
Elisa OYJ | 156 | 3,273 | ||||||
Fortum OYJ | 388 | 7,705 | ||||||
Kone OYJ Class B | 156 | 12,733 | ||||||
Metso OYJ | 144 | 5,527 |
28 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI WORLD ETF
August 31, 2013
Security | Shares | Value | ||||||
Nokia OYJa,b | 3,260 | $ | 12,578 | |||||
Nokian Renkaat OYJ | 92 | 4,288 | ||||||
Sampo OYJ Class A | 336 | 13,961 | ||||||
Stora Enso OYJ Class R | 648 | 4,994 | ||||||
UPM-Kymmene OYJ | 532 | 6,408 | ||||||
Wartsila OYJ Abp | 176 | 8,199 | ||||||
|
| |||||||
79,666 | ||||||||
FRANCE — 4.01% |
| |||||||
Accor SA | 160 | 6,035 | ||||||
ALSTOM | 208 | 7,302 | ||||||
ArcelorMittal | 988 | 12,654 | ||||||
Arkema SA | 64 | 6,453 | ||||||
Atos SA | 68 | 5,039 | ||||||
AXA SA | 1,484 | 32,258 | ||||||
BNP Paribas SA | 880 | 55,019 | ||||||
Bouygues SA | 184 | 5,742 | ||||||
Bureau Veritas SA | 256 | 7,717 | ||||||
Cap Gemini SA | 148 | 8,087 | ||||||
Carrefour SA | 548 | 17,115 | ||||||
Casino Guichard-Perrachon SA | 64 | 6,043 | ||||||
Christian Dior SA | 44 | 7,522 | ||||||
Compagnie de Saint-Gobain | 360 | 16,776 | ||||||
Compagnie Generale de Geophysique-Veritasa | 144 | 3,410 | ||||||
Compagnie Generale des Etablissements Michelin Class B | 140 | 13,364 | ||||||
Credit Agricole SAa | 904 | 9,113 | ||||||
Danone SA | 504 | 37,442 | ||||||
Dassault Systemes SA | 64 | 8,156 | ||||||
Edenred SA | 176 | 5,259 | ||||||
Electricite de France SA | 196 | 5,479 | ||||||
Essilor International SA | 180 | 19,389 | ||||||
European Aeronautic Defence and Space Co. NV | 492 | 28,289 | ||||||
Eutelsat Communications SA | 152 | 4,538 | ||||||
GDF Suez | 1,204 | 26,037 | ||||||
Gemalto NVb | 76 | 8,726 | ||||||
Groupe Eurotunnel SA Registered | 636 | 4,715 | ||||||
Iliad SA | 24 | 5,744 | ||||||
Kering SA | 64 | 14,422 | ||||||
Klepierre | 156 | 6,173 | ||||||
L’Air Liquide SA | 268 | 35,165 | ||||||
L’Oreal SA | 208 | 34,626 | ||||||
Lafarge SA | 188 | 11,453 |
Security | Shares | Value | ||||||
Lagardere SCA | 120 | $ | 3,645 | |||||
Legrand SA | 252 | 12,752 | ||||||
LVMH Moet Hennessy Louis Vuitton SA | 212 | 37,054 | ||||||
Orange | 1,672 | 16,923 | ||||||
Pernod Ricard SA | 192 | 22,239 | ||||||
Publicis Groupe SA | 168 | 12,476 | ||||||
Renault SA | 144 | 10,269 | ||||||
Safran SA | 228 | 12,631 | ||||||
Sanofi | 1,036 | 99,300 | ||||||
Schneider Electric SA | 464 | 35,425 | ||||||
SCOR SE | 176 | 5,494 | ||||||
SES SA Class A FDR | 236 | 6,918 | ||||||
Societe BIC SA | 40 | 4,588 | ||||||
Societe Generale | 604 | 26,374 | ||||||
Sodexo | 100 | 8,804 | ||||||
STMicroelectronics NV | 628 | 5,003 | ||||||
Suez Environnement SA | 284 | 4,222 | ||||||
Technip SA | 92 | 10,675 | ||||||
Thales SA | 124 | 6,096 | ||||||
Total SA | 1,796 | 99,263 | ||||||
Unibail-Rodamco SE | 96 | 21,532 | ||||||
Vallourec SA | 100 | 5,985 | ||||||
Veolia Environnement | 316 | 4,856 | ||||||
Vinci SA | 412 | 21,225 | ||||||
Vivendi SA | 1,092 | 22,095 | ||||||
|
| |||||||
991,106 | ||||||||
GERMANY — 3.38% |
| |||||||
Adidas AG | 196 | 20,676 | ||||||
Allianz SE Registered | 396 | 56,603 | ||||||
BASF SE | 808 | 70,457 | ||||||
Bayer AG Registered | 716 | 79,344 | ||||||
Bayerische Motoren Werke AG | 280 | 26,321 | ||||||
Beiersdorf AG | 108 | 9,285 | ||||||
Brenntag AG | 72 | 10,918 | ||||||
Commerzbank AGa | 1,004 | 11,645 | ||||||
Continental AG | 92 | 13,854 | ||||||
Daimler AG Registered | 820 | 56,139 | ||||||
Deutsche Bank AG Registered | 888 | 38,359 | ||||||
Deutsche Boerse AG | 188 | 13,151 | ||||||
Deutsche Post AG Registered | 916 | 26,403 | ||||||
Deutsche Telekom AG Registered | 2,420 | 30,927 | ||||||
E.ON SE | 1,596 | 25,212 | ||||||
Fresenius Medical Care AG & Co. KgaA | 200 | 12,971 |
SCHEDULESOF INVESTMENTS | 29 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI WORLD ETF
August 31, 2013
Security | Shares | Value | ||||||
Fresenius SE & Co. KgaA | 120 | $ | 14,405 | |||||
GEA Group AG | 244 | 9,842 | ||||||
Hannover Rueck SE Registered | 80 | 5,569 | ||||||
HeidelbergCement AG | 160 | 11,087 | ||||||
Henkel AG & Co. KgaA | 128 | 10,382 | ||||||
Infineon Technologies AG | 1,080 | 9,769 | ||||||
Kabel Deutschland Holding AG | 104 | 11,780 | ||||||
Lanxess AG | 96 | 6,173 | ||||||
Linde AG | 176 | 33,767 | ||||||
MAN SE | 52 | 5,935 | ||||||
Merck KgaA | 60 | 9,094 | ||||||
METRO AG | 148 | 5,421 | ||||||
Muenchener Rueckversicherungs-Gesellschaft AG Registered | 168 | 30,548 | ||||||
Osram Licht AGa | 72 | 2,876 | ||||||
QIAGEN NVa | 292 | 5,852 | ||||||
RWE AG | 472 | 12,942 | ||||||
SAP AG | 812 | 59,884 | ||||||
Siemens AG Registered | 728 | 76,882 | ||||||
ThyssenKrupp AGa | 388 | 8,137 | ||||||
Volkswagen AG | 16 | 3,549 | ||||||
|
| |||||||
836,159 | ||||||||
GREECE — 0.01% |
| |||||||
OPAP SA | 258 | 2,551 | ||||||
|
| |||||||
2,551 | ||||||||
HONG KONG — 1.26% |
| |||||||
AIA Group Ltd. | 14,400 | 63,231 | ||||||
Bank of East Asia Ltd. (The) | 4,000 | 15,475 | ||||||
BOC Hong Kong (Holdings) Ltd. | 6,000 | 18,918 | ||||||
CLP Holdings Ltd. | 4,000 | 31,982 | ||||||
Hang Seng Bank Ltd. | 2,000 | 31,079 | ||||||
Hong Kong and China Gas Co. Ltd. (The) | 13,240 | 30,597 | ||||||
Hong Kong Exchanges and Clearing Ltd. | 1,000 | 15,346 | ||||||
Li & Fung Ltd.b | 8,000 | 11,761 | ||||||
Link REIT (The) | 4,000 | 18,338 | ||||||
Michael Kors Holdings Ltd.a | 172 | 12,744 | ||||||
MTR Corp. Ltd. | 6,000 | 22,632 | ||||||
New World Development Co. Ltd. | 8,000 | 11,225 | ||||||
Sands China Ltd. | 3,200 | 18,405 | ||||||
Wynn Macau Ltd. | 3,200 | 9,677 | ||||||
|
| |||||||
311,410 |
Security | Shares | Value | ||||||
IRELAND — 0.13% |
| |||||||
CRH PLC | 680 | $ | 14,355 | |||||
Elan Corp. PLCa | 480 | 7,244 | ||||||
Kerry Group PLC Class A | 176 | 11,077 | ||||||
|
| |||||||
32,676 | ||||||||
ISRAEL — 0.17% |
| |||||||
Bank Hapoalim BM | 2,000 | 9,305 | ||||||
Teva Pharmaceutical Industries Ltd. | 816 | 31,537 | ||||||
|
| |||||||
40,842 | ||||||||
ITALY — 0.84% |
| |||||||
Assicurazioni Generali SpA | 1,024 | 19,579 | ||||||
Atlantia SpA | 328 | 5,908 | ||||||
Banca Monte dei Paschi di Siena SpAa,b | 12,344 | 3,558 | ||||||
Enel Green Power SpA | 1,936 | 4,077 | ||||||
Enel SpA | 5,720 | 18,871 | ||||||
Eni SpA | 2,176 | 49,581 | ||||||
Fiat Industrial SpA | 828 | 9,897 | ||||||
Fiat SpAa | 700 | 5,270 | ||||||
Intesa Sanpaolo SpA | 10,616 | 20,787 | ||||||
Luxottica Group SpA | 196 | 10,196 | ||||||
Saipem SpA | 232 | 5,152 | ||||||
Snam SpA | 1,620 | 7,562 | ||||||
Telecom Italia SpA | 8,316 | 5,806 | ||||||
Telecom Italia SpA RNC | 4,604 | 2,552 | ||||||
Tenaris SA | 412 | 9,078 | ||||||
Terna SpA | 1,464 | 6,239 | ||||||
UniCredit SpA | 3,952 | 22,293 | ||||||
|
| |||||||
206,406 | ||||||||
JAPAN — 8.72% |
| |||||||
AEON Co. Ltd. | 1,200 | 16,438 | ||||||
Asahi Group Holdings Ltd. | 800 | 19,928 | ||||||
Astellas Pharma Inc. | 800 | 41,013 | ||||||
Bridgestone Corp. | 800 | 26,336 | ||||||
Canon Inc. | 1,200 | 36,056 | ||||||
Chubu Electric Power Co. Inc. | 800 | 10,013 | ||||||
Chugai Pharmaceutical Co. Ltd. | 800 | 16,454 | ||||||
Chugoku Electric Power Co. Inc. (The) | 800 | 11,081 | ||||||
Dai-ichi Life Insurance Co. Ltd. (The) | 12 | 16,120 | ||||||
Daiichi Sankyo Co. Ltd. | 1,200 | 20,682 | ||||||
Daiwa Securities Group Inc. | 2,000 | 16,226 | ||||||
Denso Corp. | 800 | 36,692 | ||||||
East Japan Railway Co. | 400 | 30,739 |
30 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI WORLD ETF
August 31, 2013
Security | Shares | Value | ||||||
FANUC Corp. | 200 | $ | 30,597 | |||||
FUJIFILM Holdings Corp. | 800 | 17,530 | ||||||
Hakuhodo DY Holdings Inc. | 160 | 10,926 | ||||||
Hitachi Ltd. | 4,000 | 24,176 | ||||||
Honda Motor Co. Ltd. | 2,000 | 72,262 | ||||||
Hoya Corp. | 800 | 17,082 | ||||||
Isetan Mitsukoshi Holdings Ltd. | 800 | 10,420 | ||||||
ITOCHU Corp. | 2,400 | 27,250 | ||||||
Japan Retail Fund Investment Corp. | 8 | 14,726 | ||||||
Japan Tobacco Inc. | 1,200 | 40,789 | ||||||
JFE Holdings Inc. | 800 | 17,759 | ||||||
JTEKT Corp. | 800 | 10,494 | ||||||
JX Holdings Inc. | 4,000 | 21,200 | ||||||
Kansai Electric Power Co. Inc. (The)a | 800 | 8,993 | ||||||
Kao Corp. | 800 | 23,401 | ||||||
KDDI Corp. | 800 | 38,282 | ||||||
Kobe Steel Ltd.a | 8,000 | 12,801 | ||||||
Komatsu Ltd. | 1,200 | 26,357 | ||||||
Kuraray Co. Ltd. | 800 | 8,896 | ||||||
Kyushu Electric Power Co. Inc.a | 400 | 5,206 | ||||||
Marui Group Co. Ltd. | 800 | 7,501 | ||||||
Mazda Motor Corp.a | 4,000 | 16,104 | ||||||
Mitsubishi Chemical Holdings Corp. | 2,000 | 9,458 | ||||||
Mitsubishi Corp. | 2,000 | 37,548 | ||||||
Mitsubishi Electric Corp. | 2,000 | 19,997 | ||||||
Mitsubishi Estate Co. Ltd. | 1,000 | 26,092 | ||||||
Mitsubishi Heavy Industries Ltd. | 4,000 | 21,974 | ||||||
Mitsubishi Motors Corp.a | 800 | 8,439 | ||||||
Mitsubishi UFJ Financial Group Inc. | 14,400 | 84,537 | ||||||
Mitsubishi UFJ Lease & Finance Co. Ltd. | 2,800 | 12,728 | ||||||
Mitsui & Co. Ltd. | 2,800 | 39,068 | ||||||
Mizuho Financial Group Inc. | 32,000 | 65,230 | ||||||
MS&AD Insurance Group Holdings Inc. | 800 | 20,262 | ||||||
Murata Manufacturing Co. Ltd. | 200 | 13,759 | ||||||
NEC Corp. | 4,000 | 8,521 | ||||||
Nikon Corp. | 400 | 6,768 | ||||||
Nippon Steel & Sumitomo Metal Corp. | 8,470 | 24,172 | ||||||
Nippon Telegraph and Telephone Corp. | 800 | 40,728 | ||||||
Nissan Motor Co. Ltd. | 3,600 | 35,848 | ||||||
NKSJ Holdings Inc. | 800 | 19,618 | ||||||
Nomura Holdings Inc. | 4,400 | 30,764 | ||||||
NTT DOCOMO Inc. | 24 | 38,526 | ||||||
Olympus Corp.a | 400 | 11,570 |
Security | Shares | Value | ||||||
Omron Corp. | 400 | $ | 12,557 | |||||
ORIX Corp. | 1,600 | 22,080 | ||||||
Otsuka Holdings Co. Ltd. | 800 | 24,828 | ||||||
Panasonic Corp.a | 2,800 | 25,513 | ||||||
Rakuten Inc. | 1,200 | 14,811 | ||||||
Resona Holdings Inc. | 4,000 | 19,120 | ||||||
Seven & I Holdings Co. Ltd. | 800 | 27,600 | ||||||
Seven Bank Ltd. | 4,400 | 14,440 | ||||||
Shin-Etsu Chemical Co. Ltd. | 800 | 48,351 | ||||||
Shionogi & Co. Ltd. | 800 | 15,655 | ||||||
Shiseido Co. Ltd. | 800 | 12,720 | ||||||
SoftBank Corp. | 800 | 50,471 | ||||||
Sojitz Corp. | 4,400 | 7,893 | ||||||
Sony Corp. | 1,200 | 24,119 | ||||||
Sumitomo Corp. | 1,600 | 20,319 | ||||||
Sumitomo Electric Industries Ltd. | 1,600 | 21,607 | ||||||
Sumitomo Mitsui Financial Group Inc. | 1,600 | 70,937 | ||||||
Sumitomo Mitsui Trust Holdings Inc. | 4,000 | 17,449 | ||||||
Suzuki Motor Corp. | 800 | 17,221 | ||||||
T&D Holdings Inc. | 800 | 9,752 | ||||||
Takeda Pharmaceutical Co. Ltd. | 1,200 | 54,670 | ||||||
Tohoku Electric Power Co. Inc.a | 800 | 8,798 | ||||||
Tokio Marine Holdings Inc. | 800 | 24,746 | ||||||
Tokyo Electric Power Co. Inc.a | 1,600 | 8,154 | ||||||
Toshiba Corp. | 4,000 | 15,940 | ||||||
Toyota Motor Corp. | 2,800 | 169,515 | ||||||
USS Co. Ltd. | 80 | 10,021 | ||||||
Yahoo! Japan Corp. | 32 | 15,883 | ||||||
Yamada Denki Co. Ltd. | 200 | 6,339 | ||||||
Yamato Holdings Co. Ltd. | 800 | 17,237 | ||||||
Yokogawa Electric Corp. | 800 | 10,102 | ||||||
|
| |||||||
2,154,985 | ||||||||
NETHERLANDS — 1.05% |
| |||||||
AEGON NV | 1,408 | 10,018 | ||||||
Akzo Nobel NV | 216 | 12,673 | ||||||
ASML Holding NV | 296 | 25,881 | ||||||
Corio NV | 100 | 3,917 | ||||||
D.E Master Blenders 1753 NVa | 552 | 8,996 | ||||||
Fugro NV CVA | 64 | 3,924 | ||||||
Heineken Holding NV | 96 | 5,780 | ||||||
Heineken NV | 196 | 13,426 | ||||||
ING Groep NV CVAa | 3,260 | 35,313 | ||||||
Koninklijke Ahold NV | 904 | 14,370 | ||||||
Koninklijke DSM NV | 133 | 9,788 |
SCHEDULESOF INVESTMENTS | 31 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI WORLD ETF
August 31, 2013
Security | Shares | Value | ||||||
Koninklijke KPN NVa | 2,406 | $ | 7,011 | |||||
Koninklijke Philips Electronics NV | 924 | 28,498 | ||||||
Randstad Holding NV | 120 | 5,561 | ||||||
Reed Elsevier NV | 568 | 10,235 | ||||||
Royal Vopak NV | 72 | 4,030 | ||||||
TNT Express NV | 329 | 2,894 | ||||||
Unilever NV CVA | 1,360 | 50,974 | ||||||
Wolters Kluwer NV | 264 | 6,221 | ||||||
|
| |||||||
259,510 | ||||||||
NEW ZEALAND — 0.04% |
| |||||||
Fletcher Building Ltd. | 976 | 6,614 | ||||||
Telecom Corp. of New Zealand Ltd. | 2,444 | 4,301 | ||||||
|
| |||||||
10,915 | ||||||||
NORWAY — 0.34% |
| |||||||
DNB ASA | 780 | 12,091 | ||||||
Norsk Hydro ASA | 1,132 | 4,551 | ||||||
Orkla ASA | 1,012 | 7,292 | ||||||
Seadrill Ltd. | 312 | 14,377 | ||||||
Statoil ASA | 924 | 20,264 | ||||||
Subsea 7 SA | 280 | 5,734 | ||||||
Telenor ASA | 612 | 12,702 | ||||||
Yara International ASA | 180 | 7,108 | ||||||
|
| |||||||
84,119 | ||||||||
PORTUGAL — 0.08% |
| |||||||
Energias de Portugal SA | 2,032 | 7,165 | ||||||
Galp Energia SGPS SA Class B | 308 | 5,172 | ||||||
Jeronimo Martins SGPS SA | 272 | 5,269 | ||||||
Portugal Telecom SGPS SA Registeredb | 668 | 2,516 | ||||||
|
| |||||||
20,122 | ||||||||
SINGAPORE — 0.55% |
| |||||||
Ascendas REIT | 8,000 | 13,660 | ||||||
CapitaLand Ltd. | 4,000 | 9,556 | ||||||
CapitaMall Trust Management Ltd. | 12,000 | 17,482 | ||||||
Genting Singapore PLC | 16,000 | 16,479 | ||||||
Global Logistic Properties Ltd. | 8,000 | 16,918 | ||||||
Golden Agri-Resources Ltd. | 20,000 | 8,772 | ||||||
Hutchison Port Holdings Trust | 16,000 | 11,840 | ||||||
Noble Group Ltd. | 12,000 | 7,613 | ||||||
Singapore Telecommunications Ltd. | 12,000 | 32,990 | ||||||
|
| |||||||
135,310 | ||||||||
SPAIN — 1.24% |
| |||||||
Abertis Infraestructuras SA | 320 | 5,637 |
Security | Shares | Value | ||||||
Acciona SA | 32 | $ | 1,634 | |||||
Actividades de Construcciones y Servicios SA | 126 | 3,540 | ||||||
Amadeus IT Holding SA Class A | 316 | 10,184 | ||||||
Banco Bilbao Vizcaya Argentaria SA | 4,796 | 45,659 | ||||||
Banco de Sabadell SA | 3,320 | 7,635 | ||||||
Banco Santander SA | 9,548 | 67,231 | ||||||
CaixaBank SA | 1,308 | 4,846 | ||||||
Distribuidora Internacional de Alimentacion SA | 764 | 6,024 | ||||||
Enagas SA | 236 | 5,346 | ||||||
Ferrovial SA | 440 | 7,281 | ||||||
Gas Natural SDG SA | 324 | 6,332 | ||||||
Grifols SA | 200 | 8,014 | ||||||
Iberdrola SA | 4,092 | 21,648 | ||||||
Industria de Diseno Textil SA | 184 | 24,299 | ||||||
International Consolidated Airlines Group SAa | 2,160 | 9,567 | ||||||
Red Electrica Corporacion SA | 112 | 5,796 | ||||||
Repsol SA | 751 | 17,384 | ||||||
Telefonica SAa | 3,416 | 46,282 | ||||||
Zardoya Otis SA | 168 | 2,470 | ||||||
Zardoya Otis SA New | 6 | 88 | ||||||
|
| |||||||
306,897 | ||||||||
SWEDEN — 1.33% |
| |||||||
Alfa Laval AB | 372 | 8,025 | ||||||
Assa Abloy AB Class B | 368 | 15,644 | ||||||
Atlas Copco AB Class A | 524 | 14,138 | ||||||
Atlas Copco AB Class B | 448 | 10,980 | ||||||
Boliden AB | 412 | 6,005 | ||||||
Electrolux AB Class B | 228 | 6,021 | ||||||
Elekta AB Class B | 392 | 6,159 | ||||||
Getinge AB Class B | 204 | 7,013 | ||||||
Hennes & Mauritz AB Class B | 800 | 29,346 | ||||||
Hexagon AB Class B | 232 | 6,651 | ||||||
Investment AB Kinnevik Class B | 256 | 7,983 | ||||||
Investor AB Class B | 492 | 14,156 | ||||||
Lundin Petroleum ABa | 208 | 4,453 | ||||||
Millicom International Cellular SA SDR | 56 | 4,539 | ||||||
Nordea Bank AB | 1,972 | 22,919 | ||||||
Sandvik AB | 944 | 12,607 | ||||||
Scania AB Class B | 332 | 6,627 | ||||||
Skandinaviska Enskilda Banken AB Class A | 1,136 | 11,646 |
32 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI WORLD ETF
August 31, 2013
Security | Shares | Value | ||||||
Skanska AB Class B | 448 | $ | 8,011 | |||||
SKF AB Class B | 400 | 10,575 | ||||||
Svenska Cellulosa AB Class B | 488 | 11,902 | ||||||
Svenska Handelsbanken AB Class A | 380 | 16,280 | ||||||
Swedbank AB Class A | 676 | 15,275 | ||||||
Swedish Match AB | 212 | 7,390 | ||||||
Tele2 AB Class B | 272 | 3,413 | ||||||
Telefonaktiebolaget LM Ericsson Class B | 2,628 | 30,840 | ||||||
TeliaSonera AB | 1,580 | 11,296 | ||||||
Volvo AB Class B | 1,276 | 18,357 | ||||||
|
| |||||||
328,251 | ||||||||
SWITZERLAND — 3.85% | ||||||||
ABB Ltd. Registereda | 1,996 | 42,600 | ||||||
Actelion Ltd. Registereda | 116 | 7,869 | ||||||
Adecco SA Registereda | 144 | 9,050 | ||||||
Aryzta AGa | 140 | 8,919 | ||||||
Baloise Holding AG Registered | 76 | 8,029 | ||||||
Compagnie Financiere Richemont SA Class A Bearer | 456 | 43,233 | ||||||
Credit Suisse Group AG Registered | 1,360 | 39,120 | ||||||
Geberit AG Registered | 48 | 11,655 | ||||||
Givaudan SA Registereda | 16 | 21,501 | ||||||
Holcim Ltd. Registereda | 236 | 15,984 | ||||||
Julius Baer Group Ltd.a | 236 | 10,378 | ||||||
Kuehne & Nagel International AG Registered | 60 | 7,458 | ||||||
Nestle SA Registered | 2,780 | 182,024 | ||||||
Novartis AG Registered | 1,932 | 140,590 | ||||||
Partners Group Holding AG | 32 | 8,185 | ||||||
Roche Holding AG Genusschein | 592 | 147,365 | ||||||
Schindler Holding AG Participation Certificates | 48 | 6,605 | ||||||
Schindler Holding AG Registered | 36 | 4,861 | ||||||
SGS SA Registered | 8 | 18,181 | ||||||
Sonova Holding AG Registereda | 52 | 5,744 | ||||||
Sulzer AG Registered | 36 | 5,239 | ||||||
Swatch Group AG (The) Bearer | 32 | 18,396 | ||||||
Swiss Life Holding AG Registereda | 36 | 6,730 | ||||||
Swiss Prime Site AG Registereda | 124 | 9,083 | ||||||
Swiss Re AGa | 288 | 22,054 | ||||||
Swisscom AG Registered | 20 | 9,043 | ||||||
Syngenta AG Registered | 88 | 34,430 | ||||||
Transocean Ltd. | 304 | 13,782 |
Security | Shares | Value | ||||||
UBS AG Registereda | 3,164 | $ | 61,149 | |||||
Zurich Insurance Group AGa | 124 | 30,801 | ||||||
|
| |||||||
950,058 | ||||||||
UNITED KINGDOM — 9.05% | ||||||||
3i Group PLC | 1,196 | 6,633 | ||||||
Aberdeen Asset Management PLC | 1,068 | 5,819 | ||||||
Admiral Group PLC | 188 | 3,667 | ||||||
Aggreko PLC | 272 | 6,846 | ||||||
AMEC PLC | 316 | 5,079 | ||||||
Anglo American PLC | 1,200 | 27,445 | ||||||
Antofagasta PLC | 396 | 5,238 | ||||||
ARM Holdings PLC | 1,272 | 17,217 | ||||||
Associated British Foods PLC | 372 | 10,617 | ||||||
AstraZeneca PLC | 976 | 47,981 | ||||||
Aviva PLC | 2,336 | 13,977 | ||||||
Babcock International Group PLC | 440 | 7,746 | ||||||
BAE Systems PLC | 2,980 | 20,057 | ||||||
Barclays PLC | 9,928 | 43,516 | ||||||
BG Group PLC | 2,924 | 55,499 | ||||||
BHP Billiton PLC | 1,832 | 53,221 | ||||||
BP PLC | 16,052 | 110,795 | ||||||
British American Tobacco PLC | 1,656 | 83,382 | ||||||
British Land Co. PLC | 1,076 | 9,288 | ||||||
British Sky Broadcasting Group PLC | 876 | 11,376 | ||||||
BT Group PLC | 6,500 | 32,708 | ||||||
Bunzl PLC | 436 | 9,179 | ||||||
Burberry Group PLC | 396 | 9,397 | ||||||
Capita PLC | 612 | 9,027 | ||||||
Carnival PLC | 184 | 6,865 | ||||||
Centrica PLC | 4,400 | 26,266 | ||||||
Cobham PLC | 1,404 | 6,183 | ||||||
Coca-Cola HBC AGa | 104 | 2,867 | ||||||
Coca-Cola HBC AG SP ADR | 52 | 1,428 | ||||||
Compass Group PLC | 1,724 | 22,828 | ||||||
Croda International PLC | 156 | 6,272 | ||||||
Diageo PLC | 2,152 | 65,713 | ||||||
Experian PLC | 944 | 16,501 | ||||||
Fresnillo PLC | 172 | 3,467 | ||||||
G4S PLC | 1,380 | 5,550 | ||||||
GKN PLC | 1,140 | 5,784 | ||||||
GlaxoSmithKline PLC | 4,080 | 103,853 | ||||||
Glencore Xstrata PLC | 8,924 | 42,132 | ||||||
Hammerson PLC | 1,100 | 8,227 | ||||||
HSBC Holdings PLC | 16,076 | 168,108 |
SCHEDULESOF INVESTMENTS | 33 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI WORLD ETF
August 31, 2013
Security | Shares | Value | ||||||
ICAP PLC | 640 | $ | 3,637 | |||||
IMI PLC | 384 | 8,524 | ||||||
Imperial Tobacco Group PLC | 852 | 28,099 | ||||||
Inmarsat PLC | 452 | 4,859 | ||||||
InterContinental Hotels Group PLC | 304 | 8,479 | ||||||
Intertek Group PLC | 172 | 8,520 | ||||||
Intu Properties PLC | 932 | 4,410 | ||||||
Invensys PLC | 678 | 5,128 | ||||||
Investec PLC | 644 | 4,094 | ||||||
ITV PLC | 3,660 | 9,319 | ||||||
J Sainsbury PLC | 1,348 | 8,020 | ||||||
Johnson Matthey PLC | 220 | 9,668 | ||||||
Kingfisher PLC | 2,064 | 12,292 | ||||||
Land Securities Group PLC | 904 | 12,348 | ||||||
Legal & General Group PLC | 5,012 | 14,483 | ||||||
Lloyds Banking Group PLCa | 39,028 | 43,800 | ||||||
London Stock Exchange Group PLC | 208 | 5,019 | ||||||
Marks & Spencer Group PLC | 1,364 | 9,953 | ||||||
Meggitt PLC | 1,040 | 8,470 | ||||||
National Grid PLC | 2,928 | 33,630 | ||||||
Next PLC | 148 | 11,204 | ||||||
Old Mutual PLC | 3,956 | 11,076 | ||||||
Pearson PLC | 688 | 13,527 | ||||||
Petrofac Ltd. | 244 | 5,228 | ||||||
Prudential PLC | 2,108 | 35,152 | ||||||
Randgold Resources Ltd. | 80 | 6,293 | ||||||
Reckitt Benckiser Group PLC | 524 | 35,544 | ||||||
Reed Elsevier PLC | 1,088 | 13,321 | ||||||
Resolution Ltd. | 976 | 4,812 | ||||||
Rexam PLC | 904 | 6,823 | ||||||
Rio Tinto PLC | 1,156 | 52,091 | ||||||
Rolls-Royce Holdings PLCa | 1,704 | 29,311 | ||||||
Royal Bank of Scotland Group PLCa | 1,840 | 9,498 | ||||||
Royal Dutch Shell PLC Class A | 3,284 | 106,046 | ||||||
Royal Dutch Shell PLC Class B | 2,304 | 77,447 | ||||||
RSA Insurance Group PLC | 2,616 | 4,799 | ||||||
SABMiller PLC | 824 | 39,183 | ||||||
Sage Group PLC (The) | 1,266 | 6,739 | ||||||
SEGRO PLC | 1,300 | 5,872 | ||||||
Serco Group PLC | 608 | 5,149 | ||||||
Severn Trent PLC | 224 | 5,849 | ||||||
Shire PLC | 468 | 17,208 | ||||||
Smith & Nephew PLC | 836 | 9,699 | ||||||
Smiths Group PLC | 432 | 8,567 |
Security | Shares | Value | ||||||
SSE PLC | 808 | $ | 19,536 | |||||
Standard Chartered PLC | 1,992 | 44,403 | ||||||
Standard Life PLC | 1,984 | 10,165 | ||||||
Tate & Lyle PLC | 548 | 6,824 | ||||||
Tesco PLC | 6,912 | 39,192 | ||||||
Tullow Oil PLC | 792 | 12,350 | ||||||
Unilever PLC | 1,096 | 41,690 | ||||||
United Utilities Group PLC | 616 | 6,465 | ||||||
Vodafone Group PLC | 41,200 | 131,448 | ||||||
Weir Group PLC (The) | 228 | 7,671 | ||||||
Whitbread PLC | 208 | 9,910 | ||||||
Wm Morrison Supermarkets PLC | 2,296 | 10,307 | ||||||
Wolseley PLC | 272 | 13,717 | ||||||
WPP PLC | 1,092 | 20,186 | ||||||
|
| |||||||
2,234,808 | ||||||||
UNITED STATES — 54.25% | ||||||||
3M Co. | 556 | 63,151 | ||||||
Abbott Laboratories | 1,340 | 44,662 | ||||||
AbbVie Inc. | 1,348 | 57,438 | ||||||
Accenture PLC Class A | 576 | 41,616 | ||||||
ACE Ltd. | 268 | 23,509 | ||||||
Actavis Inc.a | 108 | 14,599 | ||||||
Activision Blizzard Inc. | 412 | 6,724 | ||||||
Adobe Systems Inc.a | 436 | 19,947 | ||||||
ADT Corp. (The) | 208 | 8,285 | ||||||
Advance Auto Parts Inc. | 68 | 5,445 | ||||||
AES Corp. (The) | 588 | 7,473 | ||||||
Aetna Inc. | 340 | 21,553 | ||||||
Affiliated Managers Group Inc.a | 60 | 10,459 | ||||||
Aflac Inc. | 384 | 22,191 | ||||||
AGCO Corp. | 112 | 6,335 | ||||||
Agilent Technologies Inc. | 300 | 13,992 | ||||||
Air Products and Chemicals Inc. | 184 | 18,794 | ||||||
Airgas Inc. | 72 | 7,319 | ||||||
Akamai Technologies Inc.a | 172 | 7,909 | ||||||
Albemarle Corp. | 96 | 5,988 | ||||||
Alcoa Inc. | 1,096 | 8,439 | ||||||
Alexion Pharmaceuticals Inc.a | 176 | 18,966 | ||||||
Alleghany Corp.a | 8 | 3,097 | ||||||
Allergan Inc. | 248 | 21,918 | ||||||
Alliance Data Systems Corp.a,b | 52 | 10,176 | ||||||
Alliant Energy Corp. | 132 | 6,549 | ||||||
Allstate Corp. (The) | 364 | 17,443 | ||||||
Altera Corp. | 304 | 10,692 |
34 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI WORLD ETF
August 31, 2013
Security | Shares | Value | ||||||
Altria Group Inc. | 1,708 | $ | 57,867 | |||||
Amazon.com Inc.a | 320 | 89,914 | ||||||
Ameren Corp. | 200 | 6,762 | ||||||
American Capital Agency Corp. | 304 | 6,919 | ||||||
American Electric Power Co. Inc. | 392 | 16,778 | ||||||
American Express Co. | 840 | 60,404 | ||||||
American International Group Inc.a | 1,216 | 56,495 | ||||||
American Tower Corp. | 388 | 26,962 | ||||||
American Water Works Co. Inc. | 188 | 7,659 | ||||||
Ameriprise Financial Inc. | 192 | 16,541 | ||||||
AmerisourceBergen Corp. | 228 | 12,978 | ||||||
AMETEK Inc. | 268 | 11,503 | ||||||
Amgen Inc. | 648 | 70,593 | ||||||
Amphenol Corp. Class A | 148 | 11,214 | ||||||
Anadarko Petroleum Corp. | 444 | 40,591 | ||||||
Analog Devices Inc. | 288 | 13,329 | ||||||
Annaly Capital Management Inc.b | 724 | 8,449 | ||||||
ANSYS Inc.a | 100 | 8,398 | ||||||
Aon PLC | 256 | 16,993 | ||||||
Apache Corp. | 328 | 28,103 | ||||||
Apple Inc. | 808 | 393,536 | ||||||
Applied Materials Inc. | 1,152 | 17,292 | ||||||
Arch Capital Group Ltd.a,b | 112 | 5,971 | ||||||
Archer-Daniels-Midland Co. | 588 | 20,703 | ||||||
Arrow Electronics Inc.a,b | 108 | 5,013 | ||||||
Assurant Inc. | 80 | 4,243 | ||||||
AT&T Inc. | 4,776 | 161,572 | ||||||
Autodesk Inc.a | 216 | 7,938 | ||||||
Autoliv Inc. | 88 | 7,126 | ||||||
Automatic Data Processing Inc. | 408 | 29,033 | ||||||
AutoZone Inc.a | 28 | 11,758 | ||||||
Avago Technologies Ltd.b | 244 | 9,396 | ||||||
AvalonBay Communities Inc. | 116 | 14,372 | ||||||
Avery Dennison Corp. | 128 | 5,473 | ||||||
Avnet Inc.a | 140 | 5,398 | ||||||
Avon Products Inc. | 420 | 8,303 | ||||||
Axis Capital Holdings Ltd. | 96 | 4,127 | ||||||
Baker Hughes Inc. | 372 | 17,294 | ||||||
Ball Corp. | 168 | 7,463 | ||||||
Bank of America Corp. | 9,384 | 132,502 | ||||||
Bank of New York Mellon Corp. (The) | 1,012 | 30,097 | ||||||
Baxter International Inc. | 460 | 31,998 | ||||||
BB&T Corp. | 548 | 18,610 | ||||||
Beam Inc. | 144 | 9,022 |
Security | Shares | Value | ||||||
Becton, Dickinson and Co. | 160 | $ | 15,581 | |||||
Bed Bath & Beyond Inc.a,b | 200 | 14,748 | ||||||
Berkshire Hathaway Inc. Class Ba | 912 | 101,433 | ||||||
Best Buy Co. Inc. | 248 | 8,928 | ||||||
Biogen Idec Inc.a | 208 | 44,308 | ||||||
BlackRock Inc.c | 124 | 32,280 | ||||||
BMC Software Inc.a | 156 | 7,176 | ||||||
Boeing Co. (The) | 612 | 63,599 | ||||||
BorgWarner Inc. | 84 | 8,113 | ||||||
Boston Properties Inc. | 152 | 15,580 | ||||||
Boston Scientific Corp.a | 1,304 | 13,796 | ||||||
Bristol-Myers Squibb Co. | 1,340 | 55,865 | ||||||
Broadcom Corp. Class A | 460 | 11,620 | ||||||
Brown-Forman Corp. Class B NVS | 132 | 8,843 | ||||||
Bunge Ltd. | 140 | 10,609 | ||||||
C.H. Robinson Worldwide Inc. | 152 | 8,644 | ||||||
C.R. Bard Inc. | 44 | 5,054 | ||||||
CA Inc. | 308 | 9,009 | ||||||
Cabot Oil & Gas Corp. | 456 | 17,843 | ||||||
Calpine Corp.a | 284 | 5,490 | ||||||
Cameron International Corp.a | 216 | 12,267 | ||||||
Campbell Soup Co. | 180 | 7,772 | ||||||
Capital One Financial Corp. | 492 | 31,759 | ||||||
Cardinal Health Inc. | 288 | 14,481 | ||||||
CareFusion Corp.a | 220 | 7,887 | ||||||
CarMax Inc.a,b | 204 | 9,702 | ||||||
Carnival Corp. | 316 | 11,404 | ||||||
Caterpillar Inc. | 564 | 46,553 | ||||||
CBRE Group Inc. Class Aa | 356 | 7,786 | ||||||
CBS Corp. Class B NVS | 520 | 26,572 | ||||||
Celanese Corp. Series A | 156 | 7,681 | ||||||
Celgene Corp.a | 376 | 52,633 | ||||||
CenterPoint Energy Inc. | 376 | 8,622 | ||||||
CenturyLink Inc. | 524 | 17,355 | ||||||
Cerner Corp.a | 272 | 12,528 | ||||||
CF Industries Holdings Inc. | 56 | 10,659 | ||||||
Charles Schwab Corp. (The) | 956 | 19,961 | ||||||
Charter Communications Inc. Class Aa | 88 | 10,685 | ||||||
Chesapeake Energy Corp. | 580 | 14,970 | ||||||
Chevron Corp. | 1,668 | 200,877 | ||||||
Chipotle Mexican Grill Inc.a,b | 28 | 11,429 | ||||||
Chubb Corp. (The) | 192 | 15,969 | ||||||
Church & Dwight Co. Inc. | 124 | 7,359 | ||||||
Cigna Corp. | 252 | 19,830 |
SCHEDULESOF INVESTMENTS | 35 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI WORLD ETF
August 31, 2013
Security | Shares | Value | ||||||
Cimarex Energy Co. | 80 | $ | 6,705 | |||||
Cincinnati Financial Corp. | 112 | 5,116 | ||||||
Cintas Corp. | 140 | 6,686 | ||||||
Cisco Systems Inc. | 4,596 | 107,133 | ||||||
CIT Group Inc.a | 156 | 7,468 | ||||||
Citigroup Inc. | 2,608 | 126,045 | ||||||
Citrix Systems Inc.a | 172 | 12,172 | ||||||
Clorox Co. (The) | 92 | 7,608 | ||||||
CME Group Inc. | 276 | 19,626 | ||||||
CMS Energy Corp. | 276 | 7,322 | ||||||
Coach Inc. | 248 | 13,097 | ||||||
Cobalt International Energy Inc.a | 280 | 6,832 | ||||||
Coca-Cola Co. (The) | 3,376 | 128,896 | ||||||
Coca-Cola Enterprises Inc. | 292 | 10,921 | ||||||
Cognizant Technology Solutions Corp. Class Aa | 268 | 19,644 | ||||||
Colgate-Palmolive Co. | 752 | 43,443 | ||||||
Comcast Corp. Class A | 1,892 | 79,634 | ||||||
Comcast Corp. Class A Special NVS | 396 | 16,133 | ||||||
Comerica Inc. | 164 | 6,698 | ||||||
Computer Sciences Corp. | 144 | 7,222 | ||||||
ConAgra Foods Inc. | 392 | 13,257 | ||||||
Concho Resources Inc.a | 96 | 9,265 | ||||||
ConocoPhillips | 952 | 63,118 | ||||||
CONSOL Energy Inc. | 212 | 6,621 | ||||||
Consolidated Edison Inc. | 232 | 13,045 | ||||||
Constellation Brands Inc. Class Aa | 152 | 8,246 | ||||||
Continental Resources Inc.a | 52 | 4,798 | ||||||
Core Laboratories NV | 44 | 6,666 | ||||||
Corning Inc. | 1,252 | 17,578 | ||||||
Costco Wholesale Corp. | 380 | 42,511 | ||||||
Covidien PLC | 404 | 23,998 | ||||||
Cree Inc.a | 116 | 6,437 | ||||||
Crown Castle International Corp.a | 256 | 17,772 | ||||||
Crown Holdings Inc.a | 168 | 7,301 | ||||||
CSX Corp. | 912 | 22,444 | ||||||
Cummins Inc. | 164 | 20,205 | ||||||
CVS Caremark Corp. | 1,056 | 61,301 | ||||||
D.R. Horton Inc. | 272 | 4,855 | ||||||
Danaher Corp. | 524 | 34,333 | ||||||
Darden Restaurants Inc. | 140 | 6,469 | ||||||
DaVita HealthCare Partners Inc.a | 88 | 9,461 | ||||||
Deere & Co. | 324 | 27,099 | ||||||
Dell Inc. | 1,252 | 17,240 |
Security | Shares | Value | ||||||
Delphi Automotive PLC | 228 | $ | 12,545 | |||||
Denbury Resources Inc.a | 376 | 6,501 | ||||||
DENTSPLY International Inc. | 148 | 6,215 | ||||||
Devon Energy Corp. | 320 | 18,269 | ||||||
Diamond Offshore Drilling Inc. | 64 | 4,098 | ||||||
Dick’s Sporting Goods Inc. | 100 | 4,641 | ||||||
Digital Realty Trust Inc.b | 140 | 7,784 | ||||||
DIRECTVa | 532 | 30,952 | ||||||
Discover Financial Services | 448 | 21,168 | ||||||
Discovery Communications Inc. Series Aa | 136 | 10,541 | ||||||
Discovery Communications Inc. Series C NVSa | 84 | 5,978 | ||||||
DISH Network Corp. Class A | 180 | 8,093 | ||||||
Dollar General Corp.a | 276 | 14,896 | ||||||
Dollar Tree Inc.a | 208 | 10,962 | ||||||
Dominion Resources Inc. | 460 | 26,841 | ||||||
Dover Corp. | 180 | 15,309 | ||||||
Dow Chemical Co. (The) | 1,024 | 38,298 | ||||||
Dr Pepper Snapple Group Inc. | 208 | 9,310 | ||||||
DTE Energy Co. | 156 | 10,432 | ||||||
Duke Energy Corp. | 568 | 37,261 | ||||||
Duke Realty Corp. | 496 | 7,237 | ||||||
Dun & Bradstreet Corp. (The) | 56 | 5,571 | ||||||
E.I. du Pont de Nemours and Co. | 780 | 44,164 | ||||||
Eastman Chemical Co. | 152 | 11,552 | ||||||
Eaton Corp. PLC | 420 | 26,594 | ||||||
Eaton Vance Corp. NVS | 160 | 6,168 | ||||||
eBay Inc.a | 1,012 | 50,590 | ||||||
Ecolab Inc. | 264 | 24,116 | ||||||
Edison International | 252 | 11,564 | ||||||
Edwards Lifesciences Corp.a | 108 | 7,601 | ||||||
Electronic Arts Inc.a | 320 | 8,525 | ||||||
Eli Lilly and Co. | 840 | 43,176 | ||||||
EMC Corp. | 1,804 | 46,507 | ||||||
Emerson Electric Co. | 632 | 38,154 | ||||||
Energen Corp. | 84 | 5,570 | ||||||
Energizer Holdings Inc. | 56 | 5,534 | ||||||
Ensco PLC Class A | 208 | 11,556 | ||||||
Entergy Corp. | 144 | 9,105 | ||||||
EOG Resources Inc. | 236 | 37,064 | ||||||
EQT Corp. | 140 | 12,001 | ||||||
Equifax Inc. | 136 | 8,036 | ||||||
Equinix Inc.a | 48 | 8,340 |
36 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI WORLD ETF
August 31, 2013
Security | Shares | Value | ||||||
Equity Residential | 300 | $ | 15,567 | |||||
Estee Lauder Companies Inc. (The) Class A | 200 | 13,072 | ||||||
Everest Re Group Ltd. | 44 | 6,026 | ||||||
Exelon Corp. | 672 | 20,489 | ||||||
Expedia Inc. | 92 | 4,302 | ||||||
Expeditors International of Washington Inc. | 208 | 8,436 | ||||||
Express Scripts Holding Co.a | 700 | 44,716 | ||||||
Exxon Mobil Corp. | 3,872 | 337,484 | ||||||
F5 Networks Inc.a | 76 | 6,337 | ||||||
Facebook Inc. Class Aa | 1,420 | 58,618 | ||||||
Family Dollar Stores Inc. | 92 | 6,549 | ||||||
Fastenal Co. | 276 | 12,141 | ||||||
Federal Realty Investment Trust | 100 | 9,731 | ||||||
FedEx Corp. | 256 | 27,484 | ||||||
Fidelity National Financial Inc. Class A | 164 | 3,888 | ||||||
Fidelity National Information Services Inc. | 220 | 9,781 | ||||||
Fifth Third Bancorp | 712 | 13,022 | ||||||
First Republic Bank | 92 | 4,074 | ||||||
FirstEnergy Corp. | 340 | 12,740 | ||||||
Fiserv Inc.a | 128 | 12,323 | ||||||
Flextronics International Ltd.a | 692 | 6,214 | ||||||
FLIR Systems Inc. | 176 | 5,505 | ||||||
Flowserve Corp. | 180 | 10,042 | ||||||
Fluor Corp. | 172 | 10,910 | ||||||
FMC Corp. | 148 | 9,858 | ||||||
FMC Technologies Inc.a | 212 | 11,370 | ||||||
Ford Motor Co. | 2,920 | 47,275 | ||||||
Forest Laboratories Inc.a | 244 | 10,377 | ||||||
Fossil Group Inc.a | 48 | 5,575 | ||||||
Franklin Resources Inc. | 420 | 19,387 | ||||||
Freeport-McMoRan Copper & Gold Inc. | 938 | 28,346 | ||||||
Frontier Communications Corp. | 884 | 3,828 | ||||||
Gap Inc. (The) | 276 | 11,161 | ||||||
Garmin Ltd. | 92 | 3,751 | ||||||
General Dynamics Corp. | 264 | 21,978 | ||||||
General Electric Co. | 9,028 | 208,908 | ||||||
General Growth Properties Inc. | 468 | 8,976 | ||||||
General Mills Inc. | 548 | 27,027 | ||||||
General Motors Co.a | 628 | 21,402 | ||||||
Genuine Parts Co. | 132 | 10,165 | ||||||
Gilead Sciences Inc.a | 1,360 | 81,967 |
Security | Shares | Value | ||||||
Goldman Sachs Group Inc. (The) | 388 | $ | 59,026 | |||||
Google Inc. Class Aa | 236 | 199,868 | ||||||
Green Mountain Coffee Roasters Inc.a,b | 124 | 10,702 | ||||||
H&R Block Inc. | 316 | 8,820 | ||||||
Halliburton Co. | 836 | 40,128 | ||||||
Harley-Davidson Inc. | 164 | 9,837 | ||||||
Harris Corp. | 120 | 6,796 | ||||||
Hartford Financial Services Group Inc. (The) | 356 | 10,538 | ||||||
Hasbro Inc. | 100 | 4,558 | ||||||
HCA Holdings Inc. | 236 | 9,013 | ||||||
HCP Inc.b | 452 | 18,410 | ||||||
Health Care REIT Inc. | 272 | 16,712 | ||||||
Helmerich & Payne Inc. | 100 | 6,304 | ||||||
Henry Schein Inc.a | 92 | 9,297 | ||||||
Herbalife Ltd.b | 104 | 6,345 | ||||||
Hershey Co. (The) | 148 | 13,609 | ||||||
Hertz Global Holdings Inc.a | 424 | 10,189 | ||||||
Hess Corp. | 268 | 20,060 | ||||||
Hewlett-Packard Co. | 1,672 | 37,353 | ||||||
HollyFrontier Corp. | 176 | 7,828 | ||||||
Hologic Inc.a | 276 | 5,890 | ||||||
Home Depot Inc. (The) | 1,284 | 95,645 | ||||||
Honeywell International Inc. | 644 | 51,243 | ||||||
Hormel Foods Corp. | 168 | 6,960 | ||||||
Hospira Inc.a | 136 | 5,308 | ||||||
Host Hotels & Resorts Inc. | 744 | 12,670 | ||||||
Humana Inc. | 144 | 13,260 | ||||||
IHS Inc. Class Aa | 60 | 6,429 | ||||||
Illinois Tool Works Inc. | 384 | 27,444 | ||||||
Illumina Inc.a,b | 112 | 8,718 | ||||||
Ingersoll-Rand PLC | 292 | 17,269 | ||||||
Integrys Energy Group Inc. | 96 | 5,368 | ||||||
Intel Corp. | 4,284 | 94,162 | ||||||
IntercontinentalExchange Inc.a,b | 68 | 12,223 | ||||||
International Business Machines Corp. | 908 | 165,501 | ||||||
International Flavors & Fragrances Inc. | 92 | 7,269 | ||||||
International Game Technology | 280 | 5,289 | ||||||
International Paper Co. | 376 | 17,751 | ||||||
Interpublic Group of Companies Inc. (The) | 444 | 6,980 | ||||||
Intuit Inc. | 252 | 16,010 | ||||||
Intuitive Surgical Inc.a | 36 | 13,915 | ||||||
Invesco Ltd. | 420 | 12,751 |
SCHEDULESOF INVESTMENTS | 37 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI WORLD ETF
August 31, 2013
Security | Shares | Value | ||||||
Iron Mountain Inc. | 152 | $ | 3,922 | |||||
J.B. Hunt Transport Services Inc. | 104 | 7,488 | ||||||
J.C. Penney Co. Inc.a,b | 160 | 1,997 | ||||||
J.M. Smucker Co. (The) | 108 | 11,463 | ||||||
J.P. Morgan Chase & Co. | 3,276 | 165,536 | ||||||
Jacobs Engineering Group Inc.a | 160 | 9,325 | ||||||
Johnson & Johnson | 2,348 | 202,891 | ||||||
Johnson Controls Inc. | 568 | 23,021 | ||||||
Joy Global Inc. | 112 | 5,501 | ||||||
Juniper Networks Inc.a | 480 | 9,072 | ||||||
Kansas City Southern Industries Inc. | 108 | 11,385 | ||||||
KBR Inc. | 172 | 5,136 | ||||||
Kellogg Co. | 212 | 12,871 | ||||||
KeyCorp | 772 | 9,009 | ||||||
Kimberly-Clark Corp. | 320 | 29,914 | ||||||
Kimco Realty Corp. | 496 | 9,935 | ||||||
Kinder Morgan Inc. | 564 | 21,393 | ||||||
Kinder Morgan Management LLCa | 121 | 9,661 | ||||||
KLA-Tencor Corp. | 168 | 9,265 | ||||||
Kohl’s Corp. | 192 | 9,852 | ||||||
Kraft Foods Group Inc. | 496 | 25,678 | ||||||
Kroger Co. (The) | 488 | 17,861 | ||||||
L Brands Inc. | 212 | 12,160 | ||||||
L-3 Communications Holdings Inc. | 100 | 9,033 | ||||||
Laboratory Corp. of America Holdingsa | 88 | 8,423 | ||||||
Lam Research Corp.a | 160 | 7,467 | ||||||
Las Vegas Sands Corp. | 364 | 20,511 | ||||||
Legg Mason Inc. | 152 | 4,943 | ||||||
Leggett & Platt Inc. | 152 | 4,396 | ||||||
Leucadia National Corp. | 312 | 7,778 | ||||||
Level 3 Communications Inc.a,b | 136 | 3,041 | ||||||
Liberty Global PLC Series Aa | 180 | 13,982 | ||||||
Liberty Global PLC Series C NVSa | 141 | 10,368 | ||||||
Liberty Interactive Corp. Series Aa | 480 | 10,838 | ||||||
Liberty Media Corp.a | 104 | 14,194 | ||||||
Liberty Property Trust | 232 | 8,027 | ||||||
Life Technologies Corp.a | 152 | 11,310 | ||||||
Lincoln National Corp. | 248 | 10,426 | ||||||
Linear Technology Corp. | 232 | 8,893 | ||||||
LinkedIn Corp. Class Aa | 76 | 18,243 | ||||||
Lockheed Martin Corp. | 204 | 24,974 | ||||||
Loews Corp. | 240 | 10,670 | ||||||
Lorillard Inc. | 348 | 14,720 | ||||||
Lowe’s Companies Inc. | 1,004 | 46,003 |
Security | Shares | Value | ||||||
LSI Corp.a | 664 | $ | 4,920 | |||||
Lululemon Athletica Inc.a,b | 92 | 6,517 | ||||||
LyondellBasell Industries NV Class A | 356 | 24,973 | ||||||
M&T Bank Corp. | 88 | 9,974 | ||||||
Macerich Co. (The) | 172 | 9,680 | ||||||
Macy’s Inc. | 348 | 15,462 | ||||||
Manpowergroup Inc. | 108 | 7,004 | ||||||
Marathon Oil Corp. | 596 | 20,520 | ||||||
Marathon Petroleum Corp. | 300 | 21,753 | ||||||
Marriott International Inc. Class A | 260 | 10,397 | ||||||
Marsh & McLennan Companies Inc. | 400 | 16,492 | ||||||
Martin Marietta Materials Inc. | 56 | 5,379 | ||||||
Marvell Technology Group Ltd. | 480 | 5,813 | ||||||
Masco Corp. | 368 | 6,963 | ||||||
MasterCard Inc. Class A | 96 | 58,184 | ||||||
Mattel Inc. | 280 | 11,340 | ||||||
Maxim Integrated Products Inc. | 300 | 8,354 | ||||||
McCormick & Co. Inc. NVS | 136 | 9,200 | ||||||
McDonald’s Corp. | 820 | 77,375 | ||||||
McGraw Hill Financial Inc. | 224 | 13,075 | ||||||
McKesson Corp. | 200 | 24,282 | ||||||
MDU Resources Group Inc. | 252 | 6,728 | ||||||
Mead Johnson Nutrition Co. Class A | 180 | 13,505 | ||||||
MeadWestvaco Corp. | 232 | 8,317 | ||||||
Medtronic Inc. | 844 | 43,677 | ||||||
Merck & Co. Inc. | 2,512 | 118,793 | ||||||
MetLife Inc. | 736 | 33,996 | ||||||
MGM Resorts Internationala,b | 372 | 6,581 | ||||||
Microchip Technology Inc. | 208 | 8,072 | ||||||
Micron Technology Inc.a | 972 | 13,190 | ||||||
Microsoft Corp. | 6,876 | 229,658 | ||||||
Mohawk Industries Inc.a | 60 | 7,049 | ||||||
Molson Coors Brewing Co. Class B NVS | 152 | 7,416 | ||||||
Mondelez International Inc. Class A | 1,436 | 44,042 | ||||||
Monsanto Co. | 460 | 45,029 | ||||||
Monster Beverage Corp.a | 144 | 8,264 | ||||||
Moody’s Corp. | 188 | 11,949 | ||||||
Morgan Stanley | 1,284 | 33,076 | ||||||
Mosaic Co. (The) | 268 | 11,162 | ||||||
Motorola Solutions Inc. | 240 | 13,442 | ||||||
Murphy Oil Corp. | 172 | 11,596 | ||||||
Mylan Inc.a | 348 | 12,298 | ||||||
Nabors Industries Ltd.b | 280 | 4,312 |
38 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI WORLD ETF
August 31, 2013
Security | Shares | Value | ||||||
NASDAQ OMX Group Inc. (The) | 140 | $ | 4,180 | |||||
National Oilwell Varco Inc. | 360 | 26,748 | ||||||
NetApp Inc. | 320 | 13,293 | ||||||
Netflix Inc.a,b | 48 | 13,628 | ||||||
New York Community Bancorp Inc. | 328 | 4,805 | ||||||
Newell Rubbermaid Inc. | 260 | 6,578 | ||||||
News Corp. Class A NVSa | 343 | 5,385 | ||||||
NextEra Energy Inc. | 324 | 26,037 | ||||||
Nielsen Holdings NV | 132 | 4,554 | ||||||
Nike Inc. Class B | 640 | 40,205 | ||||||
NiSource Inc. | 292 | 8,544 | ||||||
Noble Corp. | 220 | 8,184 | ||||||
Noble Energy Inc. | 312 | 19,166 | ||||||
Nordstrom Inc. | 140 | 7,802 | ||||||
Norfolk Southern Corp. | 280 | 20,205 | ||||||
Northeast Utilities | 276 | 11,308 | ||||||
Northern Trust Corp. | 200 | 10,974 | ||||||
Northrop Grumman Corp. | 176 | 16,240 | ||||||
NRG Energy Inc. | 252 | 6,615 | ||||||
Nuance Communications Inc.a,b | 252 | 4,811 | ||||||
Nucor Corp. | 280 | 12,737 | ||||||
NVIDIA Corp. | 584 | 8,614 | ||||||
NYSE Euronext Inc. | 244 | 10,199 | ||||||
O’Reilly Automotive Inc.a | 104 | 12,762 | ||||||
Occidental Petroleum Corp. | 716 | 63,158 | ||||||
Omnicare Inc. | 124 | 6,742 | ||||||
Omnicom Group Inc. | 228 | 13,828 | ||||||
ONEOK Inc. | 196 | 10,082 | ||||||
Oracle Corp. | 3,328 | 106,030 | ||||||
Owens-Illinois Inc.a | 180 | 5,110 | ||||||
PACCAR Inc. | 316 | 16,941 | ||||||
Pall Corp. | 128 | 8,850 | ||||||
Parker Hannifin Corp. | 144 | 14,393 | ||||||
PartnerRe Ltd. | 48 | 4,183 | ||||||
Patterson Companies Inc. | 112 | 4,467 | ||||||
Paychex Inc. | 304 | 11,759 | ||||||
Pentair Ltd. Registered | 204 | 12,262 | ||||||
People’s United Financial Inc. | 344 | 4,892 | ||||||
Pepco Holdings Inc. | 272 | 5,152 | ||||||
PepsiCo Inc. | 1,292 | 103,011 | ||||||
Perrigo Co. | 76 | 9,238 | ||||||
PetSmart Inc. | 104 | 7,325 | ||||||
Pfizer Inc. | 5,910 | 166,721 | ||||||
PG&E Corp. | 316 | 13,070 |
Security | Shares | Value | ||||||
Philip Morris International Inc. | 1,408 | $ | 117,484 | |||||
Phillips 66 | 520 | 29,692 | ||||||
Pinnacle West Capital Corp. | 124 | 6,729 | ||||||
Pioneer Natural Resources Co. | 124 | 21,696 | ||||||
Plum Creek Timber Co. Inc. | 220 | 9,748 | ||||||
PNC Financial Services Group Inc. (The)c | 436 | 31,510 | ||||||
PPG Industries Inc. | 140 | 21,869 | ||||||
PPL Corp. | 416 | 12,771 | ||||||
Praxair Inc. | 228 | 26,767 | ||||||
Precision Castparts Corp. | 132 | 27,884 | ||||||
Priceline.com Inc.a | 44 | 41,295 | ||||||
Principal Financial Group Inc. | 252 | 10,312 | ||||||
Procter & Gamble Co. (The) | 2,308 | 179,770 | ||||||
Progressive Corp. (The) | 436 | 10,931 | ||||||
Prologis Inc. | 512 | 18,043 | ||||||
Prudential Financial Inc. | 380 | 28,454 | ||||||
Public Service Enterprise Group Inc. | 420 | 13,616 | ||||||
Public Storage | 144 | 21,984 | ||||||
PulteGroup Inc. | 360 | 5,540 | ||||||
PVH Corp. | 80 | 10,300 | ||||||
QEP Resources Inc. | 176 | 4,808 | ||||||
QUALCOMM Inc. | 1,464 | 97,034 | ||||||
Quanta Services Inc.a | 252 | 6,587 | ||||||
Quest Diagnostics Inc. | 144 | 8,441 | ||||||
Rackspace Hosting Inc.a,b | 112 | 5,020 | ||||||
Ralph Lauren Corp. | 52 | 8,601 | ||||||
Range Resources Corp. | 144 | 10,797 | ||||||
Rayonier Inc.b | 200 | 11,048 | ||||||
Raytheon Co. | 260 | 19,607 | ||||||
Realty Income Corp. | 169 | 6,676 | ||||||
Red Hat Inc.a | 180 | 9,094 | ||||||
Regency Centers Corp. | 132 | 6,277 | ||||||
Regeneron Pharmaceuticals Inc.a | 68 | 16,477 | ||||||
Regions Financial Corp. | 1,224 | 11,506 | ||||||
RenaissanceRe Holdings Ltd. | 40 | 3,496 | ||||||
Republic Services Inc. | 272 | 8,843 | ||||||
Reynolds American Inc. | 296 | 14,098 | ||||||
Robert Half International Inc. | 168 | 5,925 | ||||||
Rock-Tenn Co. Class A | 80 | 8,889 | ||||||
Rockwell Automation Inc. | 136 | 13,223 | ||||||
Rockwell Collins Inc. | 144 | 10,191 | ||||||
Roper Industries Inc. | 108 | 13,360 | ||||||
Ross Stores Inc. | 200 | 13,452 |
SCHEDULESOF INVESTMENTS | 39 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI WORLD ETF
August 31, 2013
Security | Shares | Value | ||||||
Rowan Companies PLC Class Aa | 156 | $ | 5,526 | |||||
Royal Caribbean Cruises Ltd. | 148 | 5,430 | ||||||
Safeway Inc. | 264 | 6,838 | ||||||
Salesforce.com Inc.a | 480 | 23,582 | ||||||
SanDisk Corp. | 216 | 11,919 | ||||||
SBA Communications Corp. Class Aa | 108 | 8,100 | ||||||
SCANA Corp. | 132 | 6,352 | ||||||
Schlumberger Ltd. | 1,164 | 94,214 | ||||||
Scripps Networks Interactive Inc. Class A | 88 | 6,471 | ||||||
Seagate Technology PLC | 316 | 12,109 | ||||||
SEI Investments Co. | 216 | 6,428 | ||||||
Sempra Energy | 196 | 16,546 | ||||||
Sherwin-Williams Co. (The) | 84 | 14,482 | ||||||
Sigma-Aldrich Corp. | 124 | 10,226 | ||||||
Simon Property Group Inc. | 271 | 39,466 | ||||||
Sirius XM Radio Inc. | 3,632 | 13,003 | ||||||
SL Green Realty Corp. | 79 | 6,888 | ||||||
SLM Corp. | 448 | 10,748 | ||||||
Southern Co. (The) | 704 | 29,300 | ||||||
Southwestern Energy Co.a | 312 | 11,918 | ||||||
Spectra Energy Corp. | 536 | 17,747 | ||||||
Sprint Corp.a | 681 | 4,570 | ||||||
SPX Corp. | 24 | 1,777 | ||||||
St. Jude Medical Inc. | 276 | 13,913 | ||||||
Stanley Black & Decker Inc. | 152 | 12,960 | ||||||
Staples Inc. | 592 | 8,235 | ||||||
Starbucks Corp. | 664 | 46,825 | ||||||
Starwood Hotels & Resorts Worldwide Inc. | 192 | 12,276 | ||||||
State Street Corp. | 404 | 26,955 | ||||||
Stericycle Inc.a | 88 | 9,905 | ||||||
Stryker Corp. | 256 | 17,124 | ||||||
SunTrust Banks Inc. | 468 | 14,985 | ||||||
Superior Energy Services Inc.a | 164 | 4,028 | ||||||
Symantec Corp. | 628 | 16,083 | ||||||
Synopsys Inc.a | 180 | 6,527 | ||||||
Sysco Corp. | 464 | 14,857 | ||||||
T. Rowe Price Group Inc. | 232 | 16,272 | ||||||
Target Corp. | 512 | 32,415 | ||||||
TD Ameritrade Holding Corp. | 244 | 6,263 | ||||||
TE Connectivity Ltd. | 372 | 18,228 | ||||||
Teradata Corp.a | 156 | 9,135 | ||||||
Tesla Motors Inc.a | 64 | 10,816 |
Security | Shares | Value | ||||||
Texas Instruments Inc. | 976 | $ | 37,283 | |||||
Textron Inc. | 292 | 7,866 | ||||||
Thermo Fisher Scientific Inc. | 300 | 26,649 | ||||||
Tiffany & Co. | 112 | 8,636 | ||||||
Time Warner Cable Inc. | 256 | 27,482 | ||||||
Time Warner Inc. | 796 | 48,182 | ||||||
TJX Companies Inc. (The) | 620 | 32,686 | ||||||
Toll Brothers Inc.a,b | 140 | 4,285 | ||||||
Torchmark Corp. | 84 | 5,787 | ||||||
Total System Services Inc. | 212 | 5,866 | ||||||
Tractor Supply Co. | 68 | 8,321 | ||||||
TransDigm Group Inc. | 60 | 8,220 | ||||||
Travelers Companies Inc. (The) | 288 | 23,011 | ||||||
Trimble Navigation Ltd.a | 240 | 6,060 | ||||||
TRW Automotive Holdings Corp.a | 104 | 7,183 | ||||||
Twenty-First Century Fox Inc. Class A | 1,372 | 42,985 | ||||||
Twenty-First Century Fox Inc. Class B | 340 | 10,673 | ||||||
Tyco International Ltd. | 448 | 14,802 | ||||||
Tyson Foods Inc. Class A | 304 | 8,801 | ||||||
U.S. Bancorp | 1,500 | 54,195 | ||||||
UDR Inc. | 352 | 7,952 | ||||||
Ulta Salon, Cosmetics & Fragrance Inc.a | 60 | 5,954 | ||||||
Union Pacific Corp. | 404 | 62,030 | ||||||
United Parcel Service Inc. Class B | 588 | 50,321 | ||||||
United Technologies Corp. | 740 | 74,074 | ||||||
UnitedHealth Group Inc. | 872 | 62,557 | ||||||
Unum Group | 220 | 6,497 | ||||||
Urban Outfitters Inc.a | 116 | 4,864 | ||||||
Valero Energy Corp. | 488 | 17,339 | ||||||
Varian Medical Systems Inc.a | 104 | 7,327 | ||||||
Ventas Inc. | 308 | 19,176 | ||||||
VeriSign Inc.a,b | 160 | 7,678 | ||||||
Verisk Analytics Inc. Class Aa | 148 | 9,203 | ||||||
Verizon Communications Inc. | 2,424 | 114,849 | ||||||
Vertex Pharmaceuticals Inc.a | 196 | 14,729 | ||||||
VF Corp. | 84 | 15,726 | ||||||
Viacom Inc. Class B NVS | 396 | 31,506 | ||||||
Visa Inc. Class A | 468 | 81,629 | ||||||
Vmware Inc. Class Aa | 76 | 6,395 | ||||||
Vornado Realty Trust | 168 | 13,658 | ||||||
Vulcan Materials Co. | 124 | 5,927 | ||||||
W.R. Berkley Corp. | 88 | 3,619 | ||||||
W.W. Grainger Inc. | 60 | 14,841 |
40 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI WORLD ETF
August 31, 2013
Security | Shares | Value | ||||||
Wal-Mart Stores Inc. | 1,456 | $ | 106,259 | |||||
Walgreen Co. | 784 | 37,687 | ||||||
Walt Disney Co. (The) | 1,436 | 87,352 | ||||||
Warner Chilcott PLC Class A | 176 | 3,775 | ||||||
Waste Management Inc. | 364 | 14,720 | ||||||
Waters Corp.a | 76 | 7,513 | ||||||
Weatherford International Ltd.a | 688 | 10,258 | ||||||
WellPoint Inc. | 280 | 23,839 | ||||||
Wells Fargo & Co. | 4,256 | 174,837 | ||||||
Western Digital Corp. | 196 | 12,152 | ||||||
Western Union Co. | 540 | 9,466 | ||||||
Weyerhaeuser Co. | 560 | 15,333 | ||||||
Whirlpool Corp. | 68 | 8,748 | ||||||
Whiting Petroleum Corp.a | 116 | 5,855 | ||||||
Whole Foods Market Inc. | 328 | 17,302 | ||||||
Williams Companies Inc. (The) | 600 | 21,744 | ||||||
Willis Group Holdings PLC | 136 | 5,614 | ||||||
Windstream Corp. | 484 | 3,906 | ||||||
Wisconsin Energy Corp. | 216 | 8,865 | ||||||
Wyndham Worldwide Corp. | 156 | 9,260 | ||||||
Wynn Resorts Ltd. | 76 | 10,719 | ||||||
Xcel Energy Inc. | 408 | 11,391 | ||||||
Xerox Corp. | 1,132 | 11,297 | ||||||
Xilinx Inc. | 260 | 11,289 | ||||||
XL Group PLC | 252 | 7,449 | ||||||
Xylem Inc. | 208 | 5,154 | ||||||
Yahoo! Inc.a | 996 | 27,012 | ||||||
Yum! Brands Inc. | 400 | 28,008 | ||||||
Zimmer Holdings Inc. | 156 | 12,338 | ||||||
Zoetis Inc. | 298 | 8,687 | ||||||
|
| |||||||
13,401,224 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $24,904,933) |
| 24,548,416 | ||||||
PREFERRED STOCKS — 0.22% |
| |||||||
GERMANY — 0.22% |
| |||||||
Henkel AG & Co. KgaA | 156 | 15,078 | ||||||
Porsche Automobil Holding SE | 128 | 10,734 | ||||||
Volkswagen AG | 124 | 28,140 | ||||||
|
| |||||||
53,952 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $51,017) |
| 53,952 |
Security | Shares | Value | ||||||
RIGHTS — 0.00% |
| |||||||
HONG KONG — 0.00% |
| |||||||
New Hotela | 100 | $ | — | |||||
|
| |||||||
— | ||||||||
ITALY — 0.00% | ||||||||
Fiat Industrial SpAa | 828 | — | ||||||
|
| |||||||
— | ||||||||
|
| |||||||
TOTAL RIGHTS |
| |||||||
(Cost: $0) |
| — | ||||||
SHORT-TERM INVESTMENTS — 0.95% |
| |||||||
MONEY MARKET FUNDS — 0.95% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.15%c,d,e | 189,700 | 189,700 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
0.13%c,d,e | 12,046 | 12,046 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.00%c,d | 32,846 | 32,846 | ||||||
|
| |||||||
234,592 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $234,592) |
| 234,592 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $25,190,542) | 24,836,960 | |||||||
Other Assets, Less Liabilities — (0.54)% |
| (132,703 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 24,704,257 | |||||
|
|
FDR — Fiduciary Depositary Receipts
NVS — Non-Voting Shares
SDR — Swedish 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 financial statements.
SCHEDULESOF INVESTMENTS | 41 |
Table of Contents
Statements of Assets and Liabilities
iSHARES®, INC.
August 31, 2013
iShares MSCI All Country World Minimum Volatility ETF | iShares MSCI Emerging Markets EMEA ETF | iShares MSCI Frontier 100 ETF | ||||||||||
ASSETS | ||||||||||||
Investments, at cost: | ||||||||||||
Unaffiliated | $ | 953,301,327 | $ | 5,517,751 | $ | 280,859,592 | ||||||
Affiliated (Note 2) | 30,726,754 | 30,176 | 2,574,884 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments | $ | 984,028,081 | $ | 5,547,927 | $ | 283,434,476 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 1,002,087,158 | $ | 4,763,012 | $ | 279,436,892 | ||||||
Affiliated (Note 2) | 30,251,097 | 30,176 | 2,574,884 | |||||||||
|
|
|
|
|
| |||||||
Total fair value of investments | 1,032,338,255 | 4,793,188 | 282,011,776 | |||||||||
Foreign currency, at valueb | 950,047 | 5,632 | 229,901 | |||||||||
Cash | — | — | 2,500,000 | |||||||||
Receivables: | ||||||||||||
Investment securities sold | 1,421,574 | 8,554 | 219,622 | |||||||||
Dividends and interest | 2,634,847 | 13,712 | 69,721 | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 1,037,344,723 | 4,821,086 | 285,031,020 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 2,675,701 | 20,975 | 4,714,982 | |||||||||
Collateral for securities on loan (Note 5) | 26,129,851 | — | — | |||||||||
Capital shares redeemed | 558,154 | — | — | |||||||||
Deferred foreign capital gains taxes (Note 1) | 45,229 | — | 58,011 | |||||||||
Investment advisory fees (Note 2) | 176,188 | 2,054 | 174,468 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 29,585,123 | 23,029 | 4,947,461 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 1,007,759,600 | $ | 4,798,057 | $ | 280,083,559 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 960,946,228 | $ | 5,686,117 | $ | 283,618,446 | ||||||
Undistributed (distributions in excess of) net investment income | 4,621,411 | 12,385 | (241,782 | ) | ||||||||
Accumulated net realized loss | (6,107,011 | ) | (145,496 | ) | (1,813,392 | ) | ||||||
Net unrealized appreciation (depreciation) | 48,298,972 | (754,949 | ) | (1,479,713 | ) | |||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 1,007,759,600 | $ | 4,798,057 | $ | 280,083,559 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingc | 16,800,000 | 100,000 | 9,300,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 59.99 | $ | 47.98 | $ | 30.12 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $25,292,073, $ — and $ —, respectively. See Note 5. |
b | Cost of foreign currency: $957,484, $5,708 and $230,090, respectively. |
c | $0.001 par value, number of shares authorized: 500 million, 500 million and 500 million, respectively. |
See notes to financial statements.
42 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Assets and Liabilities (Continued)
iSHARES®, INC.
August 31, 2013
iShares MSCI World ETF | ||||
ASSETS | ||||
Investments, at cost: | ||||
Unaffiliated | $ | 24,892,245 | ||
Affiliated (Note 2) | 298,297 | |||
|
| |||
Total cost of investments | $ | 25,190,542 | ||
|
| |||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||
Unaffiliated | $ | 24,538,578 | ||
Affiliated (Note 2) | 298,382 | |||
|
| |||
Total fair value of investments | 24,836,960 | |||
Foreign currency, at valueb | 32,879 | |||
Receivables: | ||||
Investment securities sold | 3,066 | |||
Dividends and interest | 64,116 | |||
|
| |||
Total Assets | 24,937,021 | |||
|
| |||
LIABILITIES | ||||
Payables: | ||||
Investment securities purchased | 25,853 | |||
Collateral for securities on loan (Note 5) | 201,746 | |||
Investment advisory fees (Note 2) | 5,165 | |||
|
| |||
Total Liabilities | 232,764 | |||
|
| |||
NET ASSETS | $ | 24,704,257 | ||
|
| |||
Net assets consist of: | ||||
Paid-in capital | $ | 25,033,107 | ||
Undistributed net investment income | 85,201 | |||
Accumulated net realized loss | (60,269 | ) | ||
Net unrealized depreciation | (353,782 | ) | ||
|
| |||
NET ASSETS | $ | 24,704,257 | ||
|
| |||
Shares outstandingc | 400,000 | |||
|
| |||
Net asset value per share | $ | 61.76 | ||
|
|
a | Securities on loan with values of $194,914. See Note 5. |
b | Cost of foreign currency: $32,820. |
c | $0.001 par value, number of shares authorized: 500 million. |
See notes to financial statements.
FINANCIAL STATEMENTS | 43 |
Table of Contents
Statements of Operations
iSHARES®, INC.
Period ended August 31, 2013
iShares MSCI All Country World Minimum Volatility ETF | iShares MSCI Emerging Markets EMEA ETF | iShares MSCI 100 ETFa | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliatedb | $ | 24,888,869 | $ | 195,536 | $ | 2,717,982 | ||||||
Dividends — affiliated (Note 2) | 12,010 | — | — | |||||||||
Interest — unaffiliated | 10 | — | — | |||||||||
Interest — affiliated (Note 2) | 517 | 4 | 183 | |||||||||
Securities lending income — affiliated (Note 2) | 112,269 | 85 | — | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 25,013,675 | 195,625 | 2,718,165 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 2,816,648 | 46,239 | 690,651 | |||||||||
Commitment fees (Note 7) | — | — | 87 | |||||||||
Interest expense (Note 7) | — | — | 214 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 2,816,648 | 46,239 | 690,952 | |||||||||
Less investment advisory fees waived (Note 2) | (1,156,019 | ) | (12,920 | ) | — | |||||||
|
|
|
|
|
| |||||||
Net expenses | 1,660,629 | 33,319 | 690,952 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 23,353,046 | 162,306 | 2,027,213 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliatedc | (3,232,668 | ) | (88,522 | ) | (1,813,392 | ) | ||||||
Investments — affiliated (Note 2) | 14,078 | — | — | |||||||||
In-kind redemptions — unaffiliated | 18,376,543 | 527,309 | 48,054 | |||||||||
In-kind redemptions — affiliated (Note 2) | 839 | — | — | |||||||||
Foreign currency transactions | (56,648 | ) | (1,537 | ) | (309,259 | ) | ||||||
|
|
|
|
|
| |||||||
Net realized gain (loss) | 15,102,144 | 437,250 | (2,074,597 | ) | ||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investmentsd | 28,782,248 | (408,219 | ) | (1,475,448 | ) | |||||||
Translation of assets and liabilities in foreign currencies | (15,178 | ) | 247 | (4,265 | ) | |||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | 28,767,070 | (407,972 | ) | (1,479,713 | ) | |||||||
|
|
|
|
|
| |||||||
Net realized and unrealized gain (loss) | 43,869,214 | 29,278 | (3,554,310 | ) | ||||||||
|
|
|
|
|
| |||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | 67,222,260 | $ | 191,584 | $ | (1,527,097 | ) | |||||
|
|
|
|
|
|
a | For the period from September 12, 2012 (commencement of operations) to August 31, 2013. |
b | Net of foreign withholding tax of $1,393,122, $30,144 and $258,010, respectively. |
c | Net of foreign capital gains taxes of $ —, $ — and $12,855, respectively. |
d | Net of deferred foreign capital gains taxes of $ —, $ — and $52,748, respectively. |
See notes to financial statements.
44 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Operations (Continued)
iSHARES®, INC.
Year ended August 31, 2013
iShares MSCI World ETF | ||||
NET INVESTMENT INCOME | ||||
Dividends — unaffiliateda | $ | 344,022 | ||
Dividends — affiliated (Note 2) | 963 | |||
Interest — affiliated (Note 2) | 6 | |||
Securities lending income — affiliated (Note 2) | 563 | |||
|
| |||
Total investment income | 345,554 | |||
|
| |||
EXPENSES | ||||
Investment advisory fees (Note 2) | 32,169 | |||
|
| |||
Total expenses | 32,169 | |||
|
| |||
Net investment income | 313,385 | |||
|
| |||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||
Net realized gain (loss) from: | ||||
Investments — unaffiliated | (41,031 | ) | ||
In-kind redemptions — unaffiliated | 1,631,503 | |||
In-kind redemptions — affiliated (Note 2) | 2,514 | |||
Foreign currency transactions | (565 | ) | ||
|
| |||
Net realized gain | 1,592,421 | |||
|
| |||
Net change in unrealized appreciation/depreciation on: | ||||
Investments | (936,077 | ) | ||
Translation of assets and liabilities in foreign currencies | (80 | ) | ||
|
| |||
Net change in unrealized appreciation/depreciation | (936,157 | ) | ||
|
| |||
Net realized and unrealized gain | 656,264 | |||
|
| |||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 969,649 | ||
|
|
a | Net of foreign withholding tax of $14,466. |
See notes to financial statements.
FINANCIAL STATEMENTS | 45 |
Table of Contents
Statements of Changes in Net Assets
iSHARES®, INC.
iShares MSCI All Country World Minimum Volatility ETF | iShares MSCI Emerging Markets EMEA ETF | |||||||||||||||
Year ended August 31, 2013 | Period from to August 31, 2012 | Year ended August 31, 2013 | Period from to August 31, 2012 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 23,353,046 | $ | 4,968,807 | $ | 162,306 | $ | 208,486 | ||||||||
Net realized gain (loss) | 15,102,144 | (3,082,429 | ) | 437,250 | (225,573 | ) | ||||||||||
Net change in unrealized appreciation/depreciation | 28,767,070 | 19,531,902 | (407,972 | ) | (346,977 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 67,222,260 | 21,418,280 | 191,584 | (364,064 | ) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (21,734,941 | ) | (2,087,970 | ) | (177,671 | ) | (178,240 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (21,734,941 | ) | (2,087,970 | ) | (177,671 | ) | (178,240 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 492,714,983 | 559,445,278 | — | 15,732,186 | ||||||||||||
Cost of shares redeemed | (109,218,290 | ) | — | (5,559,099 | ) | (4,846,639 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | 383,496,693 | 559,445,278 | (5,559,099 | ) | 10,885,547 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | 428,984,012 | 578,775,588 | (5,545,186 | ) | 10,343,243 | |||||||||||
NET ASSETS | ||||||||||||||||
Beginning of period | 578,775,588 | — | 10,343,243 | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 1,007,759,600 | $ | 578,775,588 | $ | 4,798,057 | $ | 10,343,243 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed net investment income included in net assets at end of period | $ | 4,621,411 | $ | 2,864,392 | $ | 12,385 | $ | 23,724 | ||||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 8,200,000 | 10,400,000 | — | 300,000 | ||||||||||||
Shares redeemed | (1,800,000 | ) | — | (100,000 | ) | (100,000 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | 6,400,000 | 10,400,000 | (100,000 | ) | 200,000 | |||||||||||
|
|
|
|
|
|
|
|
a | Commencement of operations. |
See notes to financial statements.
46 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Frontier 100 ETF | iShares MSCI World ETF | |||||||||||
Period from to August 31, 2013 | Year ended August 31, 2013 | Period from to August 31, 2012 | ||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||
OPERATIONS: | ||||||||||||
Net investment income | $ | 2,027,213 | $ | 313,385 | $ | 354,495 | ||||||
Net realized gain (loss) | (2,074,597 | ) | 1,592,421 | 247,405 | ||||||||
Net change in unrealized appreciation/depreciation | (1,479,713 | ) | (936,157 | ) | 582,375 | |||||||
|
|
|
|
|
| |||||||
Net increase (decrease) in net assets resulting from operations | (1,527,097 | ) | 969,649 | 1,184,275 | ||||||||
|
|
|
|
|
| |||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||
From net investment income | (2,007,790 | ) | (292,821 | ) | (295,901 | ) | ||||||
Return of capital | (180,295 | ) | — | — | ||||||||
|
|
|
|
|
| |||||||
Total distributions to shareholders | (2,188,085 | ) | (292,821 | ) | (295,901 | ) | ||||||
|
|
|
|
|
| |||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||
Proceeds from shares sold | 294,121,892 | 24,918,447 | 20,127,850 | |||||||||
Cost of shares redeemed | (10,323,151 | ) | (11,580,026 | ) | (10,327,216 | ) | ||||||
|
|
|
|
|
| |||||||
Net increase in net assets from capital share transactions | 283,798,741 | 13,338,421 | 9,800,634 | |||||||||
|
|
|
|
|
| |||||||
INCREASE IN NET ASSETS | 280,083,559 | 14,015,249 | 10,689,008 | |||||||||
NET ASSETS | ||||||||||||
Beginning of period | — | 10,689,008 | — | |||||||||
|
|
|
|
|
| |||||||
End of period | $ | 280,083,559 | $ | 24,704,257 | $ | 10,689,008 | ||||||
|
|
|
|
|
| |||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of period | $ | (241,782 | ) | $ | 85,201 | $ | 57,276 | |||||
|
|
|
|
|
| |||||||
SHARES ISSUED AND REDEEMED | ||||||||||||
Shares sold | 9,650,000 | 400,000 | 400,000 | |||||||||
Shares redeemed | (350,000 | ) | (200,000 | ) | (200,000 | ) | ||||||
|
|
|
|
|
| |||||||
Net increase in shares outstanding | 9,300,000 | 200,000 | 200,000 | |||||||||
|
|
|
|
|
|
a | Commencement of operations. |
See notes to financial statements.
FINANCIAL STATEMENTS | 47 |
Table of Contents
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI All Country World Minimum Volatility ETF
Year ended Aug. 31, 2013 | Period from to Aug. 31, 2012 | |||||||
Net asset value, beginning of period | $ | 55.65 | $ | 50.02 | ||||
|
|
|
| |||||
Income from investment operations: | ||||||||
Net investment incomeb | 1.68 | 1.49 | ||||||
Net realized and unrealized gainc | 4.20 | 4.67 | ||||||
|
|
|
| |||||
Total from investment operations | 5.88 | 6.16 | ||||||
|
|
|
| |||||
Less distributions from: | ||||||||
Net investment income | (1.54 | ) | (0.53 | ) | ||||
|
|
|
| |||||
Total distributions | (1.54 | ) | (0.53 | ) | ||||
|
|
|
| |||||
Net asset value, end of period | $ | 59.99 | $ | 55.65 | ||||
|
|
|
| |||||
Total return | 10.69 | % | 12.41 | %d | ||||
|
|
|
| |||||
Ratios/Supplemental data: | ||||||||
Net assets, end of period (000s) | $ | 1,007,760 | $ | 578,776 | ||||
Ratio of expenses to average net assetse | 0.20 | % | 0.23 | % | ||||
Ratio of expenses to average net assets prior to waived feese | 0.34 | % | 0.34 | % | ||||
Ratio of net investment income to average net assetse | 2.83 | % | 3.17 | % | ||||
Portfolio turnover ratef | 13 | % | 22 | % |
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 procerssing capital share transactions in Creation Units partially for cash in U.S. dollars. Excluding such cash transactions, the portfolio turnover rates for the year ended August 31, 2013 and the period ended August 31, 2012 were 13% and 22%, respectively. See Note 4. |
See notes to financial statements.
48 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Emerging Markets EMEA ETF
Year ended Aug. 31, 2013 | Period from to Aug. 31, 2012 | |||||||
Net asset value, beginning of period | $ | 51.72 | $ | 51.16 | ||||
|
|
|
| |||||
Income from investment operations: | ||||||||
Net investment incomeb | 1.26 | 1.43 | ||||||
Net realized and unrealized gain (loss)c | (3.22 | ) | 0.02 | |||||
|
|
|
| |||||
Total from investment operations | (1.96 | ) | 1.45 | |||||
|
|
|
| |||||
Less distributions from: | ||||||||
Net investment income | (1.78 | ) | (0.89 | ) | ||||
|
|
|
| |||||
Total distributions | (1.78 | ) | (0.89 | ) | ||||
|
|
|
| |||||
Net asset value, end of period | $ | 47.98 | $ | 51.72 | ||||
|
|
|
| |||||
Total return | (3.95 | )% | 2.91 | %d | ||||
|
|
|
| |||||
Ratios/Supplemental data: | ||||||||
Net assets, end of period (000s) | $ | 4,798 | $ | 10,343 | ||||
Ratio of expenses to average net assetse | 0.49 | % | 0.49 | % | ||||
Ratio of expenses to average net assets prior to waived feese | 0.68 | % | 0.68 | % | ||||
Ratio of net investment income to average net assetse | 2.39 | % | 4.46 | % | ||||
Portfolio turnover ratef | 8 | % | 5 | % |
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 | 49 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout the period)
iShares MSCI Frontier 100 ETF
Period from to Aug. 31, 2013 | ||||
Net asset value, beginning of period | $ | 25.25 | ||
|
| |||
Income from investment operations: | ||||
Net investment incomeb | 0.67 | |||
Net realized and unrealized gainc | 4.51 | |||
|
| |||
Total from investment operations | 5.18 | |||
|
| |||
Less distributions from: | ||||
Net investment income | (0.28 | ) | ||
Return of capital | (0.03 | ) | ||
|
| |||
Total distributions | (0.31 | ) | ||
|
| |||
Net asset value, end of period | $ | 30.12 | ||
|
| |||
Total return | 20.54 | %d | ||
|
| |||
Ratios/Supplemental data: | ||||
Net assets, end of period (000s) | $ | 280,084 | ||
Ratio of expenses to average net assetse | 0.79 | % | ||
Ratio of net investment income to average net assetse | 2.32 | % | ||
Portfolio turnover ratef | 18 | % |
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, 2013 was 10%. See Note 4. |
See notes to financial statements.
50 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI World ETF
Year ended Aug. 31, 2013 | Period from to Aug. 31, 2012 | |||||||
Net asset value, beginning of period | $ | 53.45 | $ | 50.32 | ||||
|
|
|
| |||||
Income from investment operations: | ||||||||
Net investment incomeb | 1.40 | 0.98 | ||||||
Net realized and unrealized gainc | 8.03 | 2.89 | ||||||
|
|
|
| |||||
Total from investment operations | 9.43 | 3.87 | ||||||
|
|
|
| |||||
Less distributions from: | ||||||||
Net investment income | (1.12 | ) | (0.74 | ) | ||||
|
|
|
| |||||
Total distributions | (1.12 | ) | (0.74 | ) | ||||
|
|
|
| |||||
Net asset value, end of period | $ | 61.76 | $ | 53.45 | ||||
|
|
|
| |||||
Total return | 17.84 | % | 7.76 | %d | ||||
|
|
|
| |||||
Ratios/Supplemental data: | ||||||||
Net assets, end of period (000s) | $ | 24,704 | $ | 10,689 | ||||
Ratio of expenses to average net assetse | 0.24 | % | 0.24 | % | ||||
Ratio of net investment income to average net assetse | 2.34 | % | 2.91 | % | ||||
Portfolio turnover ratef | 5 | % | 3 | % |
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 | 51 |
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 ETF | Former Namea | Diversification Classification | ||||
MSCI All Country World Minimum Volatility | iShares MSCI All Country World Minimum Volatility Index Fund | Non-diversified | ||||
MSCI Emerging Markets EMEA | iShares MSCI Emerging Markets EMEA Index Fund | Non-diversified | ||||
MSCI Frontier 100b | iShares MSCI Frontier 100 Index Fund | Non-diversified | ||||
MSCI World | iShares MSCI World Index Fund | Diversified |
a | The Funds changed their names effective July 1, 2013, with the exception of the iShares MSCI Frontier 100 ETF which changed its name effective May 1, 2013. |
b | The Fund commenced operations on September 12, 2012. |
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.
Non-diversified funds generally hold securities of fewer issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers.
Each Fund invests in securities of non-U.S. issuers that trade in non-U.S. markets. This involves 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. These risks are heightened for investments in emerging market and frontier market countries.
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.
52 | 2013 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 and, for financial reporting purposes, as of the report date should the reporting period end on a day that the Fund’s listing exchange is not 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 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, reviews of 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 is not necessarily an indication of the risk associated with investing in the 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 | 53 |
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 Global Valuation Committee’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 Funds’ investments according to the fair value hierarchy as of August 31, 2013. The breakdown of each Fund’s investments into major categories is disclosed in its respective schedule of investments.
iShares ETF and | Investments | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
MSCI All Country World Minimum Volatility | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 998,402,541 | $ | — | $ | — | $ | 998,402,541 | ||||||||
Investment Companies | 2,555,762 | — | — | 2,555,762 | ||||||||||||
Preferred Stocks | 3,684,617 | — | — | 3,684,617 | ||||||||||||
Money Market Funds | 27,695,335 | — | — | 27,695,335 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 1,032,338,255 | $ | — | $ | — | $ | 1,032,338,255 | |||||||||
|
|
|
|
|
|
|
| |||||||||
MSCI Emerging Markets EMEA | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 4,686,217 | $ | — | $ | — | $ | 4,686,217 | ||||||||
Preferred Stocks | 76,795 | — | — | 76,795 | ||||||||||||
Money Market Funds | 30,176 | — | — | 30,176 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 4,793,188 | $ | — | $ | — | $ | 4,793,188 | |||||||||
|
|
|
|
|
|
|
| |||||||||
MSCI Frontier 100 | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 279,415,220 | $ | 98 | $ | — | $ | 279,415,318 | ||||||||
Convertible Bonds | — | 21,574 | — | 21,574 | ||||||||||||
Money Market Funds | 2,574,884 | — | — | 2,574,884 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 281,990,104 | $ | 21,672 | $ | — | $ | 282,011,776 | |||||||||
|
|
|
|
|
|
|
| |||||||||
MSCI World | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 24,548,328 | $ | 88 | $ | — | $ | 24,548,416 | ||||||||
Preferred Stocks | 53,952 | — | — | 53,952 | ||||||||||||
Rights | — | 0 | a | — | 0 | a | ||||||||||
Money Market Funds | 234,592 | — | — | 234,592 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 24,836,872 | $ | 88 | $ | — | $ | 24,836,960 | |||||||||
|
|
|
|
|
|
|
| |||||||||
a | Rounds to less than $1. |
54 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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, 2013 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, stock dividends, capital gains on investments, or certain foreign currency transactions. 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 stock dividends are presented as “other foreign taxes,” and foreign taxes on capital gains from sales of investments and foreign taxes on foreign currency transactions are included in their respective net realized gain (loss) categories. Foreign taxes payable as of August 31, 2013, 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.
NOTESTO FINANCIAL STATEMENTS | 55 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
RECENT ACCOUNTING STANDARD
In December 2011, the Financial Accounting Standards Board issued guidance to enhance current disclosure requirements on offsetting of certain assets and liabilities and enable financial statement users to compare financial statements prepared under U.S. GAAP and International Financial Reporting Standards (IFRS). The new disclosures are required for investments and derivative financial instruments subject to master netting agreements or similar agreements and require an entity to disclose both gross and net information about such investments and transactions eligible for offset in the statement of assets and liabilities. The scope of the disclosure requirements for offsetting will be limited to certain derivative instruments and securities lending transactions. In addition, the standard requires disclosure of collateral received and posted in connection with master netting agreements or similar agreements. The guidance is effective for financial statements for fiscal years beginning after January 1, 2013, and interim periods within those fiscal years. Management is evaluating the impact of this guidance on the Funds’ financial statements and disclosures.
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 ETF, 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 ETF in the amount of $1,136,018.
BFA has contractually agreed to waive a portion of its investment advisory fees for the iShares MSCI All Country World Minimum Volatility ETF through June 30, 2014 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, 2013, BFA waived its investment advisory fees for iShares MSCI All Country World Minimum Volatility ETF in the amount of $20,001.
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 ETF | Investment Advisory Fee | |||
MSCI Emerging Markets EMEA | 0.68 | % | ||
MSCI Frontier 100 | 0.79 | |||
MSCI World | 0.24 |
56 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
BFA has contractually agreed to waive a portion of its investment advisory fees for the iShares MSCI Emerging Markets EMEA ETF 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”), an affiliate of BFA, to serve as securities lending agent for the Funds, subject to applicable conditions. 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 Funds retain a portion of securities lending income and remit a remaining portion to BTC as compensation for its services as securities lending agent. The Funds benefit from a borrower default indemnity provided by BlackRock. As securities lending agent, BTC bears all operational costs directly related to securities lending as well as the cost of borrower default indemnification. 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, 2013, each Fund retained 65% of securities lending income and paid a fee to BTC equal to 35% of such income in the amounts as follows:
iShares ETF | Securities Lending Agent Fees | |||
MSCI All Country World Minimum Volatility | $ | 60,453 | ||
MSCI Emerging Markets EMEA | 46 | |||
MSCI World | 303 |
BlackRock Investments, LLC, an affiliate of BFA, is the distributor for each Fund. Pursuant to the 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 Funds, 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 year ended August 31, 2013, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:
iShares ETF and 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) | |||||||||||||||||||||
MSCI All Country World Minimum Volatility | ||||||||||||||||||||||||||||
iShares India 50 ETF | 73,268 | 73,908 | (12,022 | ) | 135,154 | $ | 2,555,762 | $ | 12,010 | $ | 14,917 | |||||||||||||||||
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BlackRock Inc. | 58 | 124 | (58 | ) | 124 | $ | 32,280 | $ | 551 | $ | 2,663 | |||||||||||||||||
PNC Financial Services Group Inc. (The) | 227 | 436 | (227 | ) | 436 | 31,510 | 412 | (149 | ) | |||||||||||||||||||
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$ | 63,790 | $ | 963 | $ | 2,514 | |||||||||||||||||||||||
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NOTESTO FINANCIAL STATEMENTS | 57 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
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 period ended August 31, 2013 were as follows:
iShares ETF | Purchases | Sales | ||||||
MSCI All Country World Minimum Volatility | $ | 224,615,962 | $ | 105,481,830 | ||||
MSCI Emerging Markets EMEA | 537,774 | 516,437 | ||||||
MSCI Frontier 100 | 298,194,079 | 15,860,661 | ||||||
MSCI World | 744,953 | 607,005 |
In-kind transactions (see Note 4) for the period ended August 31, 2013 were as follows:
iShares ETF | In-kind Purchases | In-kind Sales | ||||||
MSCI All Country World Minimum Volatility | $ | 368,704,025 | $ | 103,983,966 | ||||
MSCI Emerging Markets EMEA | — | 5,540,471 | ||||||
MSCI Frontier 100 | 1,015,128 | 729,692 | ||||||
MSCI World | 24,656,309 | 11,491,377 |
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 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 may also 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 market value of the loaned securities is determined at the close of each business day of the Funds and any additional required collateral is delivered to the Funds on the next business day. Any securities lending cash collateral may
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Notes to Financial Statements (Continued)
iSHARES®, INC.
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.
As of August 31, 2013, any securities on loan were collateralized by cash. The cash collateral received was invested in money market funds managed by BFA. The value of any securities on loan as of August 31, 2013 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.
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. To mitigate these risks, the Funds benefit from a borrower default indemnity provided by BlackRock. BlackRock’s indemnity allows for full replacement of securities lent. Each Fund could suffer a loss if the value of the investments purchased with cash collateral falls below the value of the cash collateral received.
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, 2013, 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 ETF | Paid-in Capital | Undistributed Net Investment Income/Distributions in Excess of Net Investment Income | Undistributed Net Realized Gain/Accumulated Net Realized Loss | |||||||||
MSCI All Country World Minimum Volatility | $ | 18,004,257 | $ | 138,914 | $ | (18,143,171 | ) | |||||
MSCI Emerging Markets EMEA | 519,960 | 4,026 | (523,986 | ) | ||||||||
MSCI Frontier 100 | — | (261,205 | ) | 261,205 | ||||||||
MSCI World | 1,623,895 | 7,361 | (1,631,256 | ) |
The tax character of distributions paid during the periods ended August 31, 2013 and August 31, 2012 was as follows:
iShares ETF | 2013 | 2012 | ||||||
MSCI All Country World Minimum Volatility | ||||||||
Ordinary income | $ | 21,734,941 | $ | 2,087,970 | ||||
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MSCI Emerging Markets EMEA | ||||||||
Ordinary income | $ | 177,671 | $ | 178,240 | ||||
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MSCI Frontier 100 | ||||||||
Ordinary income | $ | 2,007,790 | $ | — | ||||
Return of capital | $ | 180,295 | $ | — | ||||
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$ | 2,188,085 | $ | — | |||||
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MSCI World | ||||||||
Ordinary income | $ | 292,821 | $ | 295,901 | ||||
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NOTESTO FINANCIAL STATEMENTS | 59 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
As of August 31, 2013, the tax components of accumulated net earnings (losses) were as follows:
iShares ETF | Undistributed Income | Capital Loss Carryforwards | Net Unrealized Gains (Losses) a | Qualified Late-Year Losses b | Total | |||||||||||||||
MSCI All Country World Minimum Volatility | $ | 5,451,431 | $ | (1,844,397 | ) | $ | 45,905,200 | $ | (2,698,862 | ) | $ | 46,813,372 | ||||||||
MSCI Emerging Markets EMEA | 12,754 | (55,073 | ) | (761,964 | ) | (83,777 | ) | (888,060 | ) | |||||||||||
MSCI Frontier 100 | — | — | (3,341,166 | ) | (193,721 | ) | (3,534,887 | ) | ||||||||||||
MSCI World | 85,774 | (18,886 | ) | (364,373 | ) | (31,365 | ) | (328,850 | ) |
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 purpose 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, 2014. |
As of August 31, 2013, the Funds had non-expiring capital loss carryforwards available to offset future realized capital gains as follows:
iShares ETF | Non- Expiring | |||
MSCI All Country World Minimum Volatility | $ | 1,844,397 | ||
MSCI Emerging Markets EMEA | 55,073 | |||
MSCI World | 18,886 |
For the year ended August 31, 2013, the Funds utilized their capital loss carryforwards as follows:
iShares ETF | Utilized | |||
MSCI All Country World Minimum Volatility | $ | 32,403 | ||
MSCI World | 607 |
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, 2013, gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes were as follows:
iShares ETF | Tax Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation (Depreciation) | ||||||||||||
MSCI All Country World Minimum Volatility | $ | 986,421,853 | $ | 72,678,282 | $ | (26,761,880 | ) | $ | 45,916,402 | |||||||
MSCI Emerging Markets EMEA | 5,554,942 | 261,983 | (1,023,737 | ) | (761,754 | ) | ||||||||||
MSCI Frontier 100 | 285,295,929 | 9,087,518 | (12,371,671 | ) | (3,284,153 | ) | ||||||||||
MSCI World | 25,201,133 | 786,897 | (1,151,070 | ) | (364,173 | ) |
Management has reviewed the tax positions as of August 31, 2013, inclusive of the open tax return years, and has determined that no provision for income tax is required in the Funds’ financial statements.
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Notes to Financial Statements (Continued)
iSHARES®, INC.
7. | LINE OF CREDIT |
The iShares MSCI Frontier 100 ETF, along with certain other iShares funds, are parties to a $125 million credit agreement with State Street Bank and Trust Company, which expires October 30, 2013. The line of credit may be used for temporary or emergency purposes, including redemptions, settlement of trades and rebalancing of portfolio holdings. 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 securities of certain foreign markets.
For the period ended August 31, 2013, the iShares MSCI Frontier 100 ETF’s maximum amount borrowed, the average borrowings and the average interest rate under the credit agreement were $370,000, $16,599 and 1.20%, 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.
NOTESTO FINANCIAL STATEMENTS | 61 |
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 ETF, iShares MSCI Emerging Markets EMEA ETF, iShares MSCI Frontier 100 ETF and iShares MSCI World ETF (the “Funds”) at August 31, 2013, 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, 2013 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
October 23, 2013
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iSHARES®, INC.
For the fiscal year ended August 31, 2013, 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 ETF | Foreign Source Income Earned | Foreign Taxes Paid | ||||||
MSCI Emerging Markets EMEA | $ | 225,680 | $ | 30,144 | ||||
MSCI Frontier 100 | 2,975,992 | 270,865 |
For corporate shareholders, the following percentages of the income dividends paid by the Funds during the fiscal year ended August 31, 2013 qualified for the dividends-received deduction:
iShares ETF | Dividends- Received Deduction | |||
MSCI All Country World Minimum Volatility | 48.89 | % | ||
MSCI World | 46.69 |
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, 2013:
iShares ETF | Qualified Dividend Income | |||
MSCI All Country World Minimum Volatility | $ | 20,070,054 | ||
MSCI Emerging Markets EMEA | 207,815 | |||
MSCI Frontier 100 | 482,983 | |||
MSCI World | 292,821 |
In February 2014, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2013. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.
TAX INFORMATION | 63 |
Table of Contents
Board Review and Approval of Investment Advisory
Contract
iSHARES®, INC.
I. iShares MSCI All Country World Minimum Volatility ETF.
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 and approve 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 March 7, 2013, April 23, 2013, and May 3, 2013, 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 16, 2013, management presented preliminary 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 5, 2013, to discuss the additional requests. At a meeting held on June 10-11, 2013, the Board, including the Independent Directors, reviewed the 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 the supplemental information management provided at the request of the Independent Directors. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information 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 reached 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 the size, sponsor, inception date, or other differentiating factors included in Lipper’s proprietary selection methodology, 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 an index similar to that tracked by the Fund, the Lipper Group included in part mutual funds, closed-end funds, exchange traded funds, and/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 provided in the Lipper Report may or may not provide meaningful direct comparisons to the Fund.
The Board also noted that the investment advisory fee rate and overall expenses for the Fund compared favorably to the investment advisory fee rates and overall expenses of the funds in its respective 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, 2012, and a comparison of the Fund’s performance to its performance benchmark index for the same periods. To the extent that any of the
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Board Review and Approval of Investment Advisory
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iSHARES®, INC.
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 may include funds that are not exchange traded funds or index funds, and that may have different investment objectives and/or benchmarks from the Fund. In addition, the Board noted that the Fund seeks to track its own benchmark index and that, during the prior year, the Board received periodic reports on the Fund’s performance in comparison with its relevant benchmark index. Such periodic comparative performance information, including detailed information on certain specific iShares funds requested by the Board, was also considered.
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 fee rate and expense level 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, including information about recent and proposed enhancements to the iShares business, including with respect to shareholder servicing and support, 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 during 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 acknowledged that resources to support the iShares funds and their shareholders have been added or enhanced since BlackRock’s acquisition of BFA in December 2009, 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 detailed presentations regarding BFA’s investment and risk management processes and strategies provided at the June 10-11, 2013 meeting and throughout the previous year, 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 the Fund and Profits Realized by BFA and its Affiliates — The Board reviewed information about the profitability to BlackRock 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.
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 65 |
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Board Review and Approval of Investment Advisory
Contract (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 relatively low fee rates established at inception, 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 BlackRock’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 rate 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 fee rate 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 to the Fund, as well as other significant differences in the approach of BFA and its affiliates to the Fund, on one hand, and to the 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 and challenges 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 rate under the Advisory Contract for the Fund was 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 the “fallout” benefits or 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
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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 rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that it is in the best interest of the Fund and its shareholders to approve the continuance of the Advisory Contract for the coming year.
II. iShares MSCI Emerging Markets EMEA ETF, iShares MSCI Frontier 100 ETF and iShares MSCI World ETF.
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 and approve 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 March 7, 2013, April 23, 2013, and May 3, 2013, 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 16, 2013, management presented preliminary 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 5, 2013, to discuss the additional requests. At a meeting held on June 10-11, 2013, the Board, including the Independent Directors, reviewed the 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 the supplemental information management provided at the request of the Independent Directors. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information 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 reached 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 the size, sponsor, inception date, or other differentiating factors included in Lipper’s proprietary selection methodology, 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, and/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
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Board Review and Approval of Investment Advisory
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iSHARES®, INC.
analysis. The Board further noted that due to the limitations in providing comparable funds in the various Lipper Groups, the statistical information provided in the Lipper Report may or may not provide meaningful direct comparisons to the Funds.
The Board also noted that the investment advisory fee rates 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, 2012, 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 Lipper Group may include funds that are not exchange traded funds or index funds, and that may have different investment objectives and/or benchmarks from the Funds. In addition, the Board noted that each Fund seeks to track its own 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, including detailed information on certain specific iShares funds requested by the Board, was also considered.
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 fee rate and expense level 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, including information about recent and proposed enhancements to the iShares business, including with respect to shareholder servicing and support, 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 during 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 acknowledged that resources to support the iShares funds and their shareholders have been added or enhanced since BlackRock’s acquisition of BFA in December 2009, 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 detailed presentations regarding BFA’s investment and risk management processes and strategies provided at the June 10-11, 2013 meeting and throughout the previous year, 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 the Funds and Profits Realized by BFA and its Affiliates — The Board reviewed information about the profitability to BlackRock of the Funds based on the fees payable to BFA and its affiliates (including fees under the
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Board Review and Approval of Investment Advisory
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iSHARES®, INC.
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 analyses 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 relatively low fee rates established at inception, 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 BlackRock’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 did not provide for any breakpoints in the Funds’ investment advisory fee rates as the assets of the Funds increase. However, the Board noted that should material economies of scale exist in the future, a breakpoint structure for the Funds may be appropriate, and 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 rates incorporate potential economies of scale 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 any of the Funds, except for iShares MSCI World 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 to the Funds, as well as other significant differences in the approach of BFA and its affiliates to the Funds, on one hand, and to the 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 and challenges 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.
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Board Review and Approval of Investment Advisory
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iSHARES®, INC.
Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or 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.
Based on the considerations described above, the Board determined that the investment advisory fee rate under each Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that it is in the best interest of each 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 ETF | 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 | ||||||||||||||||||||||||
MSCI All Country World Minimum Volatility | $ | 1.536341 | $ | — | $ | — | $ | 1.536341 | 100 | % | — | % | — | % | 100 | % | ||||||||||||||||
MSCI World | 1.116340 | — | — | 1.116340 | 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.
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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 All Country World Minimum Volatility ETF
Period Covered: January 1, 2012 through June 30, 2013
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 3.0% | 2 | 0.53 | % | |||||
Greater than 2.5% and Less than 3.0% | 1 | 0.27 | ||||||
Greater than 2.0% and Less than 2.5% | 6 | 1.60 | ||||||
Greater than 1.5% and Less than 2.0% | 3 | 0.80 | ||||||
Greater than 1.0% and Less than 1.5% | 16 | 4.28 | ||||||
Greater than 0.5% and Less than 1.0% | 81 | 21.66 | ||||||
Between 0.5% and –0.5% | 259 | 69.25 | ||||||
Less than –0.5% and Greater than –1.0% | 5 | 1.34 | ||||||
Less than –1.0% and Greater than –1.5% | 1 | 0.27 | ||||||
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374 | 100.00 | % | ||||||
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iShares MSCI Emerging Markets EMEA ETF
Period Covered: April 1, 2012 through June 30, 2013
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 3.0% | 1 | 0.32 | % | |||||
Greater than 2.5% and Less than 3.0% | 3 | 0.96 | ||||||
Greater than 2.0% and Less than 2.5% | 2 | 0.64 | ||||||
Greater than 1.5% and Less than 2.0% | 4 | 1.28 | ||||||
Greater than 1.0% and Less than 1.5% | 17 | 5.45 | ||||||
Greater than 0.5% and Less than 1.0% | 62 | 19.87 | ||||||
Between 0.5% and –0.5% | 174 | 55.78 | ||||||
Less than –0.5% and Greater than –1.0% | 32 | 10.26 | ||||||
Less than –1.0% and Greater than –1.5% | 9 | 2.88 | ||||||
Less than –1.5% and Greater than –2.0% | 5 | 1.60 | ||||||
Less than –2.0% and Greater than –2.5% | 1 | 0.32 | ||||||
Less than –2.5% and Greater than –3.0% | 2 | 0.64 | ||||||
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312 | 100.00 | % | ||||||
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Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Frontier 100 ETF
Period Covered: October 1, 2012 through June 30, 2013
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 3.0% and Less than 3.5% | 17 | 9.14 | % | |||||
Greater than 2.5% and Less than 3.0% | 36 | 19.35 | ||||||
Greater than 2.0% and Less than 2.5% | 51 | 27.42 | ||||||
Greater than 1.5% and Less than 2.0% | 54 | 29.03 | ||||||
Greater than 1.0% and Less than 1.5% | 14 | 7.53 | ||||||
Greater than 0.5% and Less than 1.0% | 4 | 2.15 | ||||||
Between 0.5% and –0.5% | 7 | 3.76 | ||||||
Less than –0.5% | 3 | 1.62 | ||||||
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186 | 100.00 | % | ||||||
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iShares MSCI World ETF
Period Covered: April 1, 2012 through June 30, 2013
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 2.5% and Less than 3.0% | 1 | 0.32 | % | |||||
Greater than 2.0% and Less than 2.5% | 19 | 6.09 | ||||||
Greater than 1.5% and Less than 2.0% | 30 | 9.62 | ||||||
Greater than 1.0% and Less than 1.5% | 58 | 18.59 | ||||||
Greater than 0.5% and Less than 1.0% | 113 | 36.21 | ||||||
Between 0.5% and –0.5% | 91 | 29.17 | ||||||
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312 | 100.00 | % | ||||||
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Director and Officer Information
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 of the Company (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 ETF, Inc. and a Trustee of iShares U.S. ETF Trust and, as a result, oversees a total of 298 funds (as of August 31, 2013) 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 (56) | Director (since 2009). | President and Director, BlackRock, Inc. (since 2006); 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 2006); Trustee of iShares Trust (since 2009); Director of iShares MSCI Russia Capped ETF, 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 ETF, 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 Company due to his affiliations with BlackRock, Inc. |
b | Michael Latham is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BlackRock, Inc. and its affiliates. |
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Director and Officer Information (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 (58) | 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 Paine Webber Inc.) (2003-2005) 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Independent Chairman of iShares, Trust, iShares MSCI Russia Capped ETF, Inc. and iShares U.S. ETF Trust (since 2012). | |||
Cecilia H. Herbert (64) | Director (since 2005); Nominating and Governance Committee Chair and Equity Plus Committee Chair (since 2012). | Trustee and Member (since 2011) of the Investment Committee, WNET, the New York public broadcasting company; Director (since 1998) and President (2007-2011) of the Board of Directors, Catholic Charities CYO; Trustee (2002-2011) and Chair of the Finance and Investment Committee (2006-2010), the Thacher School; 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of Forward Funds (34 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 ETF, 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 (2 portfolios) (since 2002). | |||
John E. Kerrigan (58) | 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). |
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Director and Officer Information (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 (52) | 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). | |||
George G.C. Parker (74) | 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 2000); Director of iShares MSCI Russia Capped ETF, 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 (49) | 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 (2007-2008). | Trustee of iShares Trust (since 2011); Director of iShares MSCI Russia Capped ETF, Inc. (since 2011); Trustee of iShares U.S. ETF Trust (since 2011). |
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Director and Officer Information (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 of Legal & Compliance, BlackRock (since 2006); Director of Legal & Compliance, BlackRock (2004-2006). | ||
Eilleen M. Clavere (61) | Secretary (since 2007). | Director of Global Fund Administration, BlackRock (since 2009); Director of Legal Administration of Intermediary Investor Business, BGI (2006-2009); Legal Counsel and Vice President of Atlas Funds, Atlas Advisers, Inc. and Atlas Securities, Inc. (2005-2006); Counsel of Kirkpatrick & Lockhart LLP (2001-2005). | ||
Jack Gee (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). | ||
Scott Radell (44) | Executive Vice President (since 2012). | Managing Director, BlackRock (since 2009); Head of Portfolio Solutions, BlackRock (since 2009); Head of Portfolio Solutions, BGI (2007-2009); Credit Portfolio Manager, BGI (2005-2007); Credit Research Analyst, BGI (2003-2005). | ||
Amy Schioldager (50) | Executive Vice President (since 2007). | Senior Managing Director, BlackRock (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008); Head of Domestic Equity Portfolio Management, BGI (2001-2006). | ||
Ira P. Shapiro (50) | Vice President (since 2007). | Managing Director, BlackRock (since 2009); Head of Strategic Product Initiatives for iShares (since 2012); Chief Legal Officer, Exchange-Traded Fund Complex (2007-2012); Associate General Counsel, BGI (2004-2009). |
DIRECTORAND OFFICER INFORMATION | 77 |
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Notes
78 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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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.
©2013 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc. or its subsidiaries. All other marks are the property of their respective owners.
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iS-AR-811-0813
Table of Contents
AUGUST 31, 2013
2013 ANNUAL REPORT
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iShares, Inc.
Ø | iShares MSCI Global Agriculture Producers ETF | VEGI | NYSE Arca |
Ø | iShares MSCI Global Energy Producers ETF | FILL | NYSE Arca |
Ø | iShares MSCI Global Gold Miners ETF | RING | NYSE Arca |
Ø | iShares MSCI Global Metals & Mining Producers ETF | PICK | NYSE Arca |
Ø | iShares MSCI Global Silver Miners ETF | SLVP | NYSE Arca |
Table of Contents
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Table of Contents
Management’s Discussion of Fund Performance
iSHARES®, INC.
GLOBAL MARKET OVERVIEW
Global equities delivered mixed performance for the 12-month period ended August 31, 2013 (the “reporting period”), as ongoing concerns about sovereign debt issues in Europe and slowing economic growth in China kept volatility levels elevated. Investors largely dismissed the negative news for much of the reporting period, choosing to focus on the potential effect of unprecedented intervention levels from central banks around the world.
Early in the reporting period, the U.S. Federal Reserve Bank (the “Fed”) responded to tepid U.S. economic data by launching its third quantitative easing program (“QE3”). This program, in addition to relatively solid corporate earnings and a rebound in the housing market, helped support stocks in the U.S. Later in the reporting period, the Fed’s comments about “tapering” QE3 upset markets. After the Fed toned down the discussion in July 2013, U.S. stock markets rallied and finished the reporting period with solid gains.
Issues surrounding economic conditions in Europe resurfaced throughout the reporting period. At the beginning of the reporting period, the European Central Bank’s pledge to protect the euro and support bond markets in the euro zone helped European markets rebound in late 2012 and into early 2013. In the first quarter of 2013, an economic crisis on the island of Cyprus drove concerns about the health of the European financial system, until the announcement of a bailout plan alleviated worries. European stocks struggled again as the prospect of slow global economic growth materialized. Austerity programs intended to reduce national debts were blamed for impeding growth in the region. In May 2013, the European Union announced it would ease its austerity measures, giving some countries additional time to reach their respective deficit reduction targets. Also in May 2013, the European Central Bank cut its benchmark interest rate. Despite these actions, many countries in the euro zone remained in or near recession. For the second quarter of 2013, though, the euro zone as a whole experienced gross domestic product (“GDP”) growth of 0.30% — its first positive quarter since 2011.
The Bank of Japan took decisive action to improve economic conditions through quantitative easing, instituting a plan in early 2013 to purchase 7.5 trillion yen in bonds per month in order to double the country’s monetary base in two years. Although the country’s GDP growth for the first quarter of 2013 was stronger than expected, industrial production continued to decline. A declining yen helped export levels, although export growth fell short of expectations. In Japan, personal spending improved throughout the course of the reporting period, although consumer confidence weakened in the final months of the reporting period.
Emerging market countries generally lagged developed markets. During the reporting period, economic growth slowed in China and Latin America. Commodities prices declined around the world during the reporting period, hurting many commodities-driven emerging market countries. Late in the reporting period, concern that the Fed would begin to taper its bond-buying program led investors to abandon emerging market holdings, including both bonds and stocks. In the past several years, emerging markets have benefited from investors seeking higher yielding alternatives in a low-interest rate environment. Similarly, frontier markets delivered mixed results as some struggled with a decline in commodities prices and slowing economic growth, as well as investors’ retreat from frontier market holdings.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 5 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI GLOBAL AGRICULTURE PRODUCERS ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | 0.10% | (0.15)% | 0.29% | 0.10% | (0.15)% | 0.29% | ||||||||||||||||||||
Since Inception | 0.67% | 0.80% | 0.91% | 1.07% | 1.27% | 1.44% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was 1/31/12. The first day of secondary market trading was 2/2/12.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 16 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 898.90 | $ | 1.82 | $ | 1,000.00 | $ | 1,023.30 | $ | 1.94 | 0.38% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 16 for more information. |
6 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI GLOBAL AGRICULTURE PRODUCERS ETF
The iShares MSCI Global Agriculture Producers ETF (the “Fund”), formerly the iShares MSCI Global Agriculture Producers 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 IndexSM (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 12-month reporting period ended August 31, 2013, the total return for the Fund was 0.10%, net of fees, while the total return for the Index was 0.29%.
The Index’s performance was mixed throughout the reporting period, tracking the major global market indexes until about February 2013, after which it began to decline.
In an environment of lower agricultural commodity prices, the U.S. and European Union were selling wheat during the reporting period at the fastest rate since 2007, reducing inventories even as farmers produced a record crop. Sales during the summer of 2013 rose 38% from last year, as China and Brazil stepped up their buying activity. Between January 1, 2013 and August 31, 2013, the price of wheat declined 17% while the price of corn dropped 33%. In August 2013, cheaper grain depressed global food prices as tracked by the United Nations to a 14-month low.
The agricultural industry is directly impacted by the political process. As of August 31, 2013, the U.S. House of Representatives had not yet passed the Agriculture Reform, Food and Jobs Act of 2013. The so-called “Farm Bill,” which was first created during the 1930s Depression, is passed by Congress about every five years and contains subsidies to farmers, money for food stamps as well as nutritional programs. The 2013 version was passed by the U.S. Senate in June 2013.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector/Investment Type | Percentage of Net Assets |
Chemicals | 50.64 | % | ||
Agriculture | 17.37 | |||
Machinery | 14.57 | |||
Food | 11.17 | |||
Auto Manufacturers | 2.83 | |||
Investment Companies | 0.65 | |||
Other* | 2.44 | |||
Short-Term and Other Net Assets | 0.33 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Monsanto Co. | 14.50 | % | ||
Syngenta AG Registered (Switzerland) | 10.13 | |||
Deere & Co. | 8.56 | |||
Potash Corp. of Saskatchewan Inc. (Canada) | 7.10 | |||
Archer-Daniels-Midland Co. | 6.42 | |||
Kubota Corp. (Japan) | 3.89 | |||
Agrium Inc. (Canada) | 3.56 | |||
Mosaic Co. (The) | 3.44 | |||
CF Industries Holdings Inc. | 3.14 | |||
Bunge Ltd. | 3.07 | |||
|
| |||
TOTAL | 63.81 | % | ||
|
|
* | Other includes sectors which individually represent less than 1% of net assets. |
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 7 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI GLOBAL ENERGY PRODUCERS ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | 5.10% | 5.33% | 4.92% | 5.10% | 5.33% | 4.92% | ||||||||||||||||||||
Since Inception | 0.72% | 0.64% | 0.61% | 1.13% | 1.02% | 0.97% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was 1/31/12. The first day of secondary market trading was 2/2/12.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 16 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,013.20 | $ | 1.98 | $ | 1,000.00 | $ | 1,023.20 | $ | 1.99 | 0.39% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 16 for more information. |
8 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI GLOBAL ENERGY PRODUCERS ETF
The iShares MSCI Global Energy Producers ETF (the “Fund”), formerly the iShares MSCI Global Energy Producers 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 IndexSM (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 12-month reporting period ended August 31, 2013, the total return for the Fund was 5.10%, net of fees, while the total return for the Index was 4.92%.
The Index’s performance was mixed throughout the reporting period, significantly lagging the major global market indexes beginning in March 2013.
The price of crude oil rose slightly from about $96 per barrel in the first week of September 2012 to $108 per barrel on August 31, 2013, dipping to a low of $85 in early November 2012. The crises in the Middle East, tightening global supply and positive momentum in U.S. manufacturing, strengthened oil prices to 18-month highs. Offsetting these factors, U.S. oil production is at its highest level in more than 20 years.
Despite relatively high oil prices and record production, oil companies faced declining profits and thus downward pressure on stock prices. The world’s growth in demand for energy is in emerging market countries where they have a smaller market presence.
Meanwhile, natural gas production is booming in the U.S., with inventories hitting an all-time high of nearly 4 trillion cubic feet. In 2013, cold winter weather across the U.S. boosted natural gas demand, using up some of the excess inventory. Prices doubled from 2012 lows to about $4 per million Btu.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector | Percentage of Net Assets |
Oil & Gas | 97.23 | % | ||
Coal | 1.59 | |||
Mining | 0.39 | |||
Chemicals | 0.06 | |||
Energy-Alternate Sources | 0.04 | |||
Transportation | 0.01 | |||
Short-Term and Other Net Assets | 0.68 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Exxon Mobil Corp. | 15.00 | % | ||
Chevron Corp. | 9.05 | |||
BP PLC (United Kingdom) | 5.10 | |||
Royal Dutch Shell PLC Class A (United Kingdom) | 4.70 | |||
Total SA (France) | 4.55 | |||
Royal Dutch Shell PLC Class B (United Kingdom) | 3.39 | |||
ConocoPhillips | 2.95 | |||
Occidental Petroleum Corp. | 2.75 | |||
BG Group PLC (United Kingdom) | 2.51 | |||
Eni SpA (Italy) | 2.27 | |||
|
| |||
TOTAL | 52.27 | % | ||
|
|
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 9 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI GLOBAL GOLD MINERS ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | (41.28)% | (41.57)% | (41.26)% | (41.28)% | (41.57)% | (41.26)% | ||||||||||||||||||||
Since Inception | (37.68)% | (37.58)% | (37.61)% | (52.71)% | (52.58)% | (52.62)% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was 1/31/12. The first day of secondary market trading was 2/2/12.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 16 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 727.30 | $ | 1.70 | $ | 1,000.00 | $ | 1,023.20 | $ | 1.99 | 0.39% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 16 for more information. |
10 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI GLOBAL GOLD MINERS ETF
The iShares MSCI Global Gold Miners ETF (the “Fund”), formerly the iShares MSCI Global Gold Miners 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 IndexSM (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 12-month reporting period ended August 31, 2013, the total return for the Fund was -41.28%, net of fees, while the total return for the Index was -41.26%.
The Index’s performance was steadily negative throughout the reporting period, mirroring declines in the price of gold in a low inflation environment. On August 31, 2013, the price of gold was $1,395 an ounce, down from $1,649 an ounce on August 31, 2012.
When interest rates rise, gold prices often decline because investors are comparing an asset such as a bond that pays interest with gold, a metal which does not pay any income. In contrast, gold mining companies can and do pay dividends. However, declining gold prices put pressure on mining companies that still have high production costs.
Because gold prices are sensitive to interest rates, the actions of the Fed are closely watched by investors in the gold market. Any hint that the Fed was going to stop its monthly purchase of $85 billion in government bonds to keep interest rates low was interpreted as a negative by gold investors.
Another factor affecting gold prices is geopolitical uncertainty. Gold rallied in August 2013 when it appeared as though there would be a U.S. military strike against Syria, and then eased when the U.S. and Russia began to negotiate a resolution.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector | Percentage of Net Assets |
Mining | 99.86 | % | ||
Short-Term and Other Net Assets | 0.14 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Goldcorp Inc. (Canada) | 16.69 | % | ||
Barrick Gold Corp. (Canada) | 12.88 | |||
Newmont Mining Corp. | 10.34 | |||
Newcrest Mining Ltd. (Australia) | 4.97 | |||
Yamana Gold Inc. (Canada) | 4.76 | |||
Randgold Resources Ltd. (United Kingdom) | 4.64 | |||
Kinross Gold Corp. (Canada) | 4.37 | |||
Eldorado Gold Corp. (Canada) | 4.35 | |||
Agnico-Eagle Mines Ltd. (Canada) | 4.34 | |||
AngloGold Ashanti Ltd. (South Africa) | 3.97 | |||
|
| |||
TOTAL | 71.31 | % | ||
|
|
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 11 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI GLOBAL METALS & MINING PRODUCERS ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | (2.68)% | (4.88)% | (2.90)% | (2.68)% | (4.88)% | (2.90)% | ||||||||||||||||||||
Since Inception | (16.49)% | (17.09)% | (16.72)% | (24.83)% | (25.68)% | (25.16)% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was 1/31/12. The first day of secondary market trading was 2/2/12.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 16 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 859.40 | $ | 1.83 | $ | 1,000.00 | $ | 1,023.20 | $ | 1.99 | 0.39% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 16 for more information. |
12 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI GLOBAL METALS & MINING PRODUCERS ETF
The iShares MSCI Global Metals & Mining Producers ETF (the “Fund”), formerly the iShares MSCI Global Select Metals & Mining Producers 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 IndexSM (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 12-month reporting period ended August 31, 2013, the total return for the Fund was -2.68%, net of fees, while the total return for the Index was -2.90%.
The Index’s performance was steadily negative from about the beginning of 2013 through the middle of the calendar year, mirroring declining metals prices in a low inflation environment.
Since 2011, inflation has fallen steadily in both developed and emerging markets. For the reporting period, inflation in the U.S., the euro zone and Japan was only 1.5%, 1.3% and 0.7%, respectively. In the Czech Republic and South Korea, inflation was just 1.3%. Investors generally perceive precious metals as a hedge against inflation.
However, the Index rallied slightly during July and August 2013 due to improving economic data. Industrial demand plays a major role in the price of metals such as copper and platinum, which are used widely in consumer electronics and automobile manufacturing. In August 2013, euro zone service and manufacturing companies reported their highest business activity in more than two years.
Finally, geopolitical uncertainty often causes metals prices to rise. Metals rallied in August 2013 when it appeared as though there would be a U.S. military strike against Syria, and then eased when the U.S. and Russia began to negotiate a resolution.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector | Percentage of Net Assets |
Mining | 65.66 | % | ||
Iron & Steel | 30.15 | |||
Metal Fabricate & Hardware | 1.74 | |||
Other* | 1.91 | |||
Short-Term and Other Net Assets | 0.54 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
BHP Billiton Ltd. (Australia) | 12.89 | % | ||
BHP Billiton PLC (United Kingdom) | 7.72 | |||
Rio Tinto PLC (United Kingdom) | 7.22 | |||
Glencore International PLC (United Kingdom) | 6.30 | |||
Anglo American PLC (United Kingdom) | 4.02 | |||
Freeport-McMoRan Copper & Gold Inc. | 3.94 | |||
Vale SA Class A (Preferred) (Brazil) | 3.32 | |||
Rio Tinto Ltd. (Australia) | 2.85 | |||
Nippon Steel & Sumitomo Metal Corp. (Japan) | 2.80 | |||
POSCO (South Korea) | 2.41 | |||
|
| |||
TOTAL | 53.47 | % | ||
|
|
* | Other includes sectors which individually represent less than 1% of net assets. |
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 13 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI GLOBAL SILVER MINERS ETF
Performance as of August 31, 2013
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||
1 Year | (32.49)% | (30.68)% | (32.56)% | (32.49)% | (30.68)% | (32.56)% | ||||||||||||||||||||
Since Inception | (29.68)% | (29.29)% | (29.64)% | (42.74)% | (42.24)% | (42.68)% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was 1/31/12. The first day of secondary market trading was 2/2/12.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 16 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 775.70 | $ | 1.75 | $ | 1,000.00 | $ | 1,023.20 | $ | 1.99 | 0.39% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 16 for more information. |
14 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI GLOBAL SILVER MINERS ETF
The iShares MSCI Global Silver Miners ETF (the “Fund”), formerly the iShares MSCI Global Silver Miners 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 IndexSM (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 12-month reporting period ended August 31, 2013, the total return for the Fund was -32.49%, net of fees, while the total return for the Index was -32.56%.
The Index’s performance was steadily negative throughout the first 10 months of the reporting period, but rallied in July and August 2013.
On August 31, 2013, the price of silver was $23.64 an ounce, down from $30.52 an ounce on August 31, 2012, a 23% decline over the reporting period. However, silver was trading at under $20 per ounce earlier in 2013, so investors have seen a slight rebound in recent months.
There are at least three factors that affect the price of silver: industrial demand, interest rate trends and geopolitical tensions.
Unlike the market for gold, industrial demand plays a major role in the price of silver, which is used widely in consumer electronics. Positive data from some of the world’s biggest economies such as China and Europe helped boost the price of silver.
However, silver prices can be adversely affected by the prospect of rising interest rates, because unlike metals, competing investments such as bonds pay interest. Because silver prices are sensitive to interest rates, the actions of the Fed are often closely watched by investors in the silver market. Any hint that the Fed was going to stop its monthly purchase of $85 billion in government bonds to keep interest rates low was interpreted as a negative by silver investors.
Another factor affecting silver prices is geopolitical uncertainty. Silver and other metals rallied in August 2013 when it appeared as though there would be a U.S. military strike against Syria, and then eased when the U.S. and Russia began to negotiate a resolution.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector | Percentage of Net Assets |
Mining | 99.75 | % | ||
Short-Term and Other Net Assets | 0.25 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Silver Wheaton Corp. (Canada) | 22.79 | % | ||
Industrias Penoles SAB de CV (Mexico) | 9.81 | |||
Fresnillo PLC (United Kingdom) | 7.60 | |||
Tahoe Resources Inc. (Canada) | 4.81 | |||
Compania de Minas Buenaventura SA SP ADR (Peru) | 4.61 | |||
First Majestic Silver Corp. (Canada) | 4.40 | |||
Coeur Mining Inc. | 4.23 | |||
Pan American Silver Corp. (Canada) | 4.17 | |||
Hecla Mining Co. | 4.15 | |||
AuRico Gold Inc. (Canada) | 3.60 | |||
|
| |||
TOTAL | 70.17 | % | ||
|
|
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 15 |
Table of Contents
Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.iShares.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are redeemed or sold in the market. Performance for certain funds may reflect a waiver of a portion of investment management fees. Without such waiver, performance would have been lower.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The 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 a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of a fund may not have traded in the secondary market until after the fund’s inception, for the period from inception to the first day of secondary trading, 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 at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. 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.
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 expense example, which is based on an investment of $1,000 invested on March 1, 2013 and held through August 31, 2013, 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.
Actual Expenses — The table provides information about actual account values and actual expenses. To estimate the expenses that you paid on your account 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 for your Fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Example for Comparison Purposes — The table also 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. 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 hypothetical examples are 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.
16 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI GLOBAL AGRICULTURE PRODUCERS ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 98.31% |
| |||||||
AUSTRALIA — 0.93% | ||||||||
Australian Agricultural Co. Ltd.a | 21,982 | $ | 21,732 | |||||
GrainCorp Ltd. Class A | 18,241 | 202,104 | ||||||
Nufarm Ltd. | 17,777 | 74,416 | ||||||
Tassal Group Ltd. | 13,601 | 35,493 | ||||||
|
| |||||||
333,745 | ||||||||
BRAZIL — 0.40% | ||||||||
BrasilAgro — Companhia Brasileira Propriedades Agricolasa | 2,900 | 11,467 | ||||||
Fertilizantes Heringer SAa | 2,900 | 10,125 | ||||||
Sao Martinho SA | 4,000 | 45,600 | ||||||
SLC Agricola SA | 5,800 | 47,577 | ||||||
Tereos Internacional SA | 23,200 | 26,936 | ||||||
|
| |||||||
141,705 | ||||||||
CANADA — 10.75% | ||||||||
AG Growth International Inc. | 942 | 31,495 | ||||||
Agrium Inc. | 14,877 | 1,270,659 | ||||||
Potash Corp. of Saskatchewan Inc. | 85,927 | 2,537,327 | ||||||
|
| |||||||
3,839,481 | ||||||||
CHILE — 0.11% | ||||||||
AquaChile SAa | 34,017 | 16,361 | ||||||
Empresas Iansa SA | 260,594 | 8,735 | ||||||
Multiexport Foods SAa | 74,414 | 13,866 | ||||||
|
| |||||||
38,962 | ||||||||
CHINA — 1.09% | ||||||||
Asian Citrus Holdings Ltd. | 87,000 | 32,873 | ||||||
Century Sunshine Group Holdings Ltd. | 145,000 | 16,081 | ||||||
China Agri-Industries Holdings Ltd. | 204,200 | 95,854 | ||||||
China BlueChemical Ltd. Class H | 174,000 | 91,326 | ||||||
China Modern Dairy Holdings Ltd.a | 185,000 | 61,791 | ||||||
First Tractor Co. Ltd. Class H | 58,000 | 35,678 | ||||||
Global Bio-Chem Technology Group Co. Ltd.a | 232,000 | 18,849 | ||||||
Sinofert Holdings Ltd.b | 232,000 | 36,201 | ||||||
|
| |||||||
388,653 | ||||||||
DENMARK — 0.35% | ||||||||
Auriga Industries A/S Class Ba | 1,827 | 64,427 | ||||||
East Asiatic Co. Ltd. A/Sa | 1,258 | 20,347 | ||||||
United International Enterprises Ltd. | 232 | 40,147 | ||||||
|
| |||||||
124,921 | ||||||||
FINLAND — 0.04% | ||||||||
HKScan OYJ Class A | 2,987 | 14,809 | ||||||
|
| |||||||
14,809 |
Security | Shares | Value | ||||||
FRANCE — 0.24% | ||||||||
Naturex | 464 | $ | 35,853 | |||||
Vilmorin & Cie SA | 417 | 49,581 | ||||||
|
| |||||||
85,434 | ||||||||
GERMANY — 2.10% | ||||||||
K+S AG Registeredb | 17,342 | 419,955 | ||||||
KWS Saat AG | 232 | 74,399 | ||||||
Suedzucker AG | 7,975 | 256,744 | ||||||
|
| |||||||
751,098 | ||||||||
HONG KONG — 0.04% | ||||||||
Pacific Andes International Holdings Ltd. | 312,000 | 13,479 | ||||||
|
| |||||||
13,479 | ||||||||
INDONESIA — 1.25% | ||||||||
PT Astra Agro Lestari Tbk | 34,500 | 62,397 | ||||||
PT Bisi International Tbk | 145,000 | 7,967 | ||||||
PT BW Plantation Tbk | 165,000 | 13,750 | ||||||
PT Charoen Pokphand Indonesia Tbk | 739,500 | 228,554 | ||||||
PT Japfa Comfeed Indonesia Tbk | 507,500 | 54,840 | ||||||
PT Malindo Feedmill Tbk | 78,000 | 18,393 | ||||||
PT Perusahaan Perkebunan London Sumatra Indonesia Tbk | 304,500 | 41,548 | ||||||
PT Sampoerna Agro Tbk | 63,500 | 10,467 | ||||||
PT Tunas Baru Lampung Tbk | 223,000 | 9,700 | ||||||
|
| |||||||
447,616 | ||||||||
ISRAEL — 1.17% | ||||||||
Israel Chemicals Ltd. | 43,645 | 304,054 | ||||||
Israel Corp. Ltd. (The)a | 272 | 115,724 | ||||||
|
| |||||||
419,778 | ||||||||
ITALY — 2.85% | ||||||||
Fiat Industrial SpA | 84,668 | 1,012,046 | ||||||
Societa per la Bonifica dei Terreni Ferraresi e Imprese Agricole SpA | 145 | 6,837 | ||||||
|
| |||||||
1,018,883 | ||||||||
JAPAN — 5.35% | ||||||||
Hokuto Corp. | 4,000 | 70,163 | ||||||
Iseki & Co. Ltd. | 11,000 | 35,540 | ||||||
Kubota Corp. | 102,000 | 1,388,901 | ||||||
Maruha Nichiro Holdings Inc. | 69,000 | 129,399 | ||||||
Mitsui Sugar Co. Ltd. | 11,000 | 35,091 | ||||||
Nippon Beet Sugar Manufacturing Co. Ltd. | 11,000 | 19,283 | ||||||
Nippon Meat Packers Inc. | 11,000 | 154,829 | ||||||
Sakata Seed Corp. | 5,800 | 76,908 | ||||||
|
| |||||||
1,910,114 |
SCHEDULESOF INVESTMENTS | 17 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI GLOBAL AGRICULTURE PRODUCERS ETF
August 31, 2013
Security | Shares | Value | ||||||
MALAYSIA — 3.34% | ||||||||
Felda Global Ventures Holdings Bhd | 124,700 | $ | 165,900 | |||||
Genting Plantations Bhd | 21,400 | 61,827 | ||||||
Hap Seng Plantations Holdings Bhd | 24,300 | 18,568 | ||||||
IJM Plantations Bhd | 30,100 | 26,391 | ||||||
IOI Corp. Bhd | 284,200 | 467,214 | ||||||
Kim Loong Resources Bhd | 11,600 | 8,158 | ||||||
Kuala Lumpur Kepong Bhd | 46,400 | 303,989 | ||||||
QL Resources Bhd | 34,800 | 36,021 | ||||||
Rimbunan Sawit Bhd | 53,300 | 12,981 | ||||||
Sarawak Oil Palms Bhd | 14,500 | 24,279 | ||||||
TDM Bhd | 60,200 | 14,662 | ||||||
TH Plantations Bhd | 26,100 | 13,110 | ||||||
TSH Resources Bhd | 34,800 | 24,367 | ||||||
United Malacca Bhd | 6,900 | 15,124 | ||||||
|
| |||||||
1,192,591 | ||||||||
NETHERLANDS — 0.90% | ||||||||
Nutreco NV | 6,844 | 321,272 | ||||||
|
| |||||||
321,272 | ||||||||
NORWAY — 3.22% | ||||||||
Austevoll Seafood ASA | 9,860 | 53,576 | ||||||
Cermaq ASA | 4,234 | 69,778 | ||||||
Leroey Seafood Group ASA | 1,885 | 46,291 | ||||||
Marine Harvest ASA | 277,965 | 257,849 | ||||||
Yara International ASA | 18,270 | 721,439 | ||||||
|
| |||||||
1,148,933 | ||||||||
POLAND — 0.46% | ||||||||
Grupa Azoty SA | 4,031 | 90,885 | ||||||
Kernel Holding SAa | 4,988 | 73,023 | ||||||
|
| |||||||
163,908 | ||||||||
RUSSIA — 1.78% | ||||||||
Uralkali OJSC | 133,400 | 634,895 | ||||||
|
| |||||||
634,895 | ||||||||
SINGAPORE — 2.63% | ||||||||
Bumitama Agri Ltd.b | 40,000 | 30,076 | ||||||
First Resources Ltd.b | 58,000 | 83,133 | ||||||
GMG Global Ltd. | 330,000 | 26,622 | ||||||
Golden Agri-Resources Ltd. | 725,000 | 317,995 | ||||||
Indofood Agri Resources Ltd.b | 40,000 | 24,281 | ||||||
Wilmar International Ltd. | 185,000 | 456,432 | ||||||
|
| |||||||
938,539 | ||||||||
SOUTH AFRICA — 0.65% | ||||||||
Astral Foods Ltd. | 3,712 | 34,035 | ||||||
Illovo Sugar Ltd. | 23,432 | 75,506 |
Security | Shares | Value | ||||||
Tongaat Hulett Ltd. | 10,759 | $ | 123,969 | |||||
|
| |||||||
233,510 | ||||||||
SOUTH KOREA — 0.34% | ||||||||
Dongwon Industries Co. Ltd. | 145 | 37,751 | ||||||
Harim Co. Ltd.a,b | 3,984 | 13,602 | ||||||
Namhae Chemical Corp. | 3,300 | 22,148 | ||||||
Nong Woo Bio Co. Ltd. | 812 | 16,056 | ||||||
Sajo Industries Co. Ltd.a | 120 | 3,708 | ||||||
Silla Co. Ltd. | 690 | 15,726 | ||||||
TS Corp. | 400 | 11,171 | ||||||
|
| |||||||
120,162 | ||||||||
SPAIN — 0.00% | ||||||||
Pescanova SAa,c | 414 | — | ||||||
|
| |||||||
— | ||||||||
SWEDEN — 0.05% | ||||||||
Black Earth Farming Ltd. SDRa | 16,154 | 16,670 | ||||||
|
| |||||||
16,670 | ||||||||
SWITZERLAND — 10.13% | ||||||||
Syngenta AG Registered | 9,251 | 3,619,439 | ||||||
|
| |||||||
3,619,439 | ||||||||
TAIWAN — 0.62% | ||||||||
Sesoda Corp. | 11,550 | 12,042 | ||||||
Sinon Corp. | 58,000 | 28,686 | ||||||
Taiwan Fertilizer Co. Ltd. | 69,000 | 158,409 | ||||||
Taiyen Biotech Co. Ltd. | 29,000 | 24,179 | ||||||
|
| |||||||
223,316 | ||||||||
THAILAND — 0.65% | ||||||||
Charoen Pokphand Foods PCL NVDR | 267,900 | 193,081 | ||||||
GFPT PCL NVDRa | 56,200 | 15,102 | ||||||
Khon Kaen Sugar Industry PCL NVDR | 62,000 | 24,268 | ||||||
|
| |||||||
232,451 | ||||||||
TURKEY — 0.08% | ||||||||
Bagfas Bandirma Gubre Fabrikalari AS | 649 | 10,985 | ||||||
Gubre Fabrikalari TASa | 2,813 | 17,044 | ||||||
|
| |||||||
28,029 | ||||||||
UNITED STATES — 46.79% | ||||||||
AGCO Corp. | 9,715 | 549,480 | ||||||
Alico Inc. | 406 | 16,346 | ||||||
American Vanguard Corp. | 2,523 | 63,277 | ||||||
Archer-Daniels-Midland Co. | 65,076 | 2,291,326 | ||||||
Bunge Ltd. | 14,471 | 1,096,612 | ||||||
Cal-Maine Foods Inc. | 1,392 | 63,517 | ||||||
CF Industries Holdings Inc. | 5,887 | 1,120,532 |
18 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI GLOBAL AGRICULTURE PRODUCERS ETF
August 31, 2013
Security | Shares | Value | ||||||
Darling International Inc.a | 11,774 | $ | 238,188 | |||||
Deere & Co. | 36,540 | 3,056,206 | ||||||
Dole Food Co. Inc.a | 3,538 | 48,541 | ||||||
Fresh Del Monte Produce Inc. | 3,886 | 112,150 | ||||||
Ingredion Inc. | 7,627 | 480,043 | ||||||
Intrepid Potash Inc. | 5,974 | 74,317 | ||||||
Lindsay Corp. | 1,374 | 104,452 | ||||||
Monsanto Co. | 52,896 | 5,177,990 | ||||||
Mosaic Co. (The) | 29,522 | 1,229,591 | ||||||
Pilgrim’s Pride Corp.a | 6,583 | 100,917 | ||||||
Sanderson Farms Inc. | 2,088 | 136,722 | ||||||
Scotts Miracle-Gro Co. (The) Class A | 4,321 | 227,760 | ||||||
Smithfield Foods Inc.a | 13,108 | 439,511 | ||||||
Titan International Inc. | 5,075 | 82,418 | ||||||
|
| |||||||
16,709,896 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $38,181,106) |
| 35,112,289 | ||||||
INVESTMENT COMPANIES — 0.65% |
| |||||||
INDIA — 0.65% | ||||||||
iShares India 50 ETFd | 12,191 | 230,532 | ||||||
|
| |||||||
230,532 | ||||||||
|
| |||||||
TOTAL INVESTMENT COMPANIES |
| |||||||
(Cost: $291,403) |
| 230,532 | ||||||
PREFERRED STOCKS — 0.71% |
| |||||||
CHILE — 0.71% |
| |||||||
Sociedad Quimica y Minera de Chile SA Series B | 9,744 | 252,678 | ||||||
|
| |||||||
252,678 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $502,847) |
| 252,678 | ||||||
RIGHTS — 0.00% |
| |||||||
ITALY — 0.00% | ||||||||
Fiat Industrial SpAa | 84,564 | 41 | ||||||
|
| |||||||
41 | ||||||||
|
| |||||||
TOTAL RIGHTS |
| |||||||
(Cost: $0) |
| 41 |
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS — 1.63% |
| |||||||
MONEY MARKET FUNDS — 1.63% |
| |||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.15%d,e,f | 534,304 | $ | 534,304 | |||||
BlackRock Cash Funds: Prime, | ||||||||
0.13%d,e,f | 33,928 | 33,928 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.00%d,e | 15,459 | 15,459 | ||||||
|
| |||||||
583,691 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $583,691) |
| 583,691 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $39,559,047) |
| 36,179,231 | ||||||
Other Assets, Less Liabilities — (1.30)% |
| (463,267 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 35,715,964 | |||||
|
|
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 | 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 | 19 |
Table of Contents
Schedule of Investments
iSHARES® MSCI GLOBAL ENERGY PRODUCERS ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 97.94% |
| |||||||
AUSTRALIA — 1.81% |
| |||||||
Aurora Oil and Gas Ltd.a | 1,100 | $ | 3,233 | |||||
AWE Ltd.a | 938 | 1,090 | ||||||
Beach Energy Ltd. | 2,211 | 2,747 | ||||||
Buru Energy Ltd.a | 324 | 494 | ||||||
Caltex Australia Ltd. | 240 | 4,042 | ||||||
Drillsearch Energy Ltd.a | 812 | 1,038 | ||||||
Energy Resources of Australia Ltd.a | 308 | 376 | ||||||
Horizon Oil Ltd.a | 1,626 | 471 | ||||||
Karoon Gas Australia Ltd.a | 312 | 1,489 | ||||||
Linc Energy Ltd.a | 812 | 1,085 | ||||||
Paladin Energy Ltd.a | 1,324 | 660 | ||||||
Red Fork Energy Ltd.a | 1,350 | 535 | ||||||
Roc Oil Co. Ltd.a | 1,350 | 649 | ||||||
Santos Ltd. | 1,830 | 24,318 | ||||||
Senex Energy Ltd.a | 1,285 | 853 | ||||||
Whitehaven Coal Ltd. | 1,348 | 2,383 | ||||||
Woodside Petroleum Ltd. | 1,230 | 41,826 | ||||||
|
| |||||||
87,289 | ||||||||
AUSTRIA — 0.28% |
| |||||||
OMV AG | 296 | 13,633 | ||||||
|
| |||||||
13,633 | ||||||||
BRAZIL — 0.78% |
| |||||||
HRT Participacoes em Petroleo SAa | 400 | 253 | ||||||
Petroleo Brasileiro SA | 5,400 | 36,277 | ||||||
QGEP Participacoes SA | 200 | 981 | ||||||
|
| |||||||
37,511 | ||||||||
CANADA — 10.08% |
| |||||||
Advantage Oil & Gas Ltd.a | 272 | 988 | ||||||
Angle Energy Inc.a | 108 | 280 | ||||||
ARC Resources Ltd. | 586 | 14,010 | ||||||
Athabasca Oil Corp.a | 600 | 4,289 | ||||||
Bankers Petroleum Ltd.a | 422 | 1,420 | ||||||
Baytex Energy Corp. | 248 | 9,792 | ||||||
Bellatrix Exploration Ltd.a | 174 | 1,112 | ||||||
Birchcliff Energy Ltd.a | 158 | 1,063 | ||||||
BlackPearl Resources Inc.a | 470 | 918 | ||||||
Bonavista Energy Corp. | 312 | 3,848 | ||||||
Bonterra Energy Corp. | 56 | 2,736 | ||||||
Cameco Corp. | 718 | 13,647 | ||||||
Canacol Energy Ltd.a | 160 | 595 | ||||||
Canadian Natural Resources Ltd. | 2,026 | 61,727 | ||||||
Canadian Oil Sands Ltd. | 882 | 16,897 |
Security | Shares | Value | ||||||
Cenovus Energy Inc. | 1,420 | $ | 40,625 | |||||
Cequence Energy Ltd.a | 200 | 288 | ||||||
Crescent Point Energy Corp. | 722 | 26,296 | ||||||
Crew Energy Inc.a | 180 | 1,025 | ||||||
DeeThree Exploration Ltd.a | 168 | 1,433 | ||||||
Denison Mines Corp.a | 538 | 612 | ||||||
Encana Corp. | 1,348 | 22,988 | ||||||
Enerplus Corp. | 418 | 6,907 | ||||||
Freehold Royalties Ltd. | 90 | 2,018 | ||||||
Husky Energy Inc. | 660 | 18,632 | ||||||
Imperial Oil Ltd. | 552 | 23,013 | ||||||
Ithaca Energy Inc.a | 538 | 1,005 | ||||||
Legacy Oil & Gas Inc. Class Aa | 226 | 1,313 | ||||||
Lightstream Resources Ltd. | 399 | 2,735 | ||||||
Long Run Exploration Ltd.a | 228 | 962 | ||||||
MEG Energy Corp.a | 308 | 9,953 | ||||||
NuVista Energy Ltd.a | 156 | 1,097 | ||||||
Pacific Rubiales Energy Corp. | 610 | 11,525 | ||||||
Paramount Resources Ltd. Class Aa | 88 | 2,791 | ||||||
Parex Resources Inc.a | 200 | 1,096 | ||||||
Pengrowth Energy Corp. | 1,125 | 6,207 | ||||||
Penn West Petroleum Ltd. | 858 | 9,663 | ||||||
Peyto Exploration & Development Corp. | 284 | 7,740 | ||||||
Sprott Resource Corp. | 206 | 547 | ||||||
Suncor Energy Inc. | 2,876 | 96,784 | ||||||
Surge Energy Inc. | 200 | 1,124 | ||||||
Tag Oil Ltd.a | 200 | 849 | ||||||
Talisman Energy Inc. | 1,932 | 20,604 | ||||||
Tourmaline Oil Corp.a | 302 | 11,652 | ||||||
TransGlobe Energy Corp.a | 116 | 806 | ||||||
Trilogy Energy Corp. | 96 | 2,497 | ||||||
Twin Butte Energy Ltd. | 600 | 1,035 | ||||||
Uranium One Inc.a | 850 | 2,232 | ||||||
Vermilion Energy Inc. | 190 | 10,192 | ||||||
Whitecap Resources Inc. | 318 | 3,346 | ||||||
|
| |||||||
484,914 | ||||||||
CHINA — 3.24% |
| |||||||
China Coal Energy Co. Class H | 8,000 | 4,715 | ||||||
China Qinfa Group Ltd. | 4,000 | 320 | ||||||
China Shenhua Energy Co. Ltd. Class H | 7,000 | 21,755 | ||||||
CNOOC Ltd. | 34,000 | 67,523 | ||||||
Hidili Industry International Development Ltd.a,b | 4,000 | 681 | ||||||
Kunlun Energy Co. Ltd. | 8,000 | 11,658 | ||||||
MIE Holdings Corp. | 4,000 | 882 |
20 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI GLOBAL ENERGY PRODUCERS ETF
August 31, 2013
Security | Shares | Value | ||||||
PetroChina Co. Ltd. Class H | 40,000 | $ | 43,536 | |||||
Sino Oil And Gas Holdings Ltd.a,b | 50,000 | 1,264 | ||||||
Yanzhou Coal Mining Co. Ltd. Class H | 4,000 | 3,559 | ||||||
|
| |||||||
155,893 | ||||||||
COLOMBIA — 0.42% |
| |||||||
Ecopetrol SA SP ADR | 448 | 20,008 | ||||||
|
| |||||||
20,008 | ||||||||
FINLAND — 0.08% |
| |||||||
Neste Oil OYJ | 210 | 3,849 | ||||||
|
| |||||||
3,849 | ||||||||
FRANCE — 4.62% |
| |||||||
Esso SA Francaise | 8 | 517 | ||||||
Etablissements Maurel et Prom | 148 | 2,435 | ||||||
MPI | 96 | 443 | ||||||
Total SA | 3,958 | 218,755 | ||||||
|
| |||||||
222,150 | ||||||||
GREECE — 0.06% |
| |||||||
Hellenic Petroleum SA | 135 | 1,228 | ||||||
Motor Oil (Hellas) Corinth Refineries SA | 176 | 1,639 | ||||||
|
| |||||||
2,867 | ||||||||
HONG KONG — 0.01% |
| |||||||
Mongolia Energy Corp. Ltd.a | 8,000 | 263 | ||||||
|
| |||||||
263 | ||||||||
HUNGARY — 0.14% |
| |||||||
MOL Hungarian Oil and Gas PLC | 94 | 6,653 | ||||||
|
| |||||||
6,653 | ||||||||
INDIA — 0.54% |
| |||||||
Reliance Industries Ltd. SP GDRc | 1,034 | 26,015 | ||||||
|
| |||||||
26,015 | ||||||||
INDONESIA — 0.26% |
| |||||||
PT Adaro Energy Tbk | 39,000 | 3,321 | ||||||
PT Benakat Petroleum Energy Tbka | 29,000 | 319 | ||||||
PT Bukit Asam (Persero) Tbk | 2,000 | 2,216 | ||||||
PT Energi Mega Persada Tbka | 53,000 | 374 | ||||||
PT Indo Tambangraya Megah Tbk | 1,000 | 2,935 | ||||||
PT Medco Energi Internasional Tbk | 11,000 | 2,367 | ||||||
PT Sugih Energy Tbka | 23,000 | 937 | ||||||
|
| |||||||
12,469 | ||||||||
ISRAEL — 0.07% |
| |||||||
Naphtha Israel Petroleum Corp. Ltd.a | 123 | 714 | ||||||
Oil Refineries Ltd.a | 2,218 | 870 | ||||||
Paz Oil Co. Ltd.a | 12 | 1,855 | ||||||
|
| |||||||
3,439 |
Security | Shares | Value | ||||||
ITALY — 2.32% |
| |||||||
Eni SpA | 4,802 | $ | 109,416 | |||||
ERG SpA | 172 | 1,674 | ||||||
Saras SpAa | 582 | 702 | ||||||
|
| |||||||
111,792 | ||||||||
JAPAN — 1.16% |
| |||||||
Cosmo Oil Co. Ltd.a | 2,000 | 4,138 | ||||||
INPEX Corp. | 4 | 18,162 | ||||||
Japan Petroleum Exploration Co. Ltd. | 100 | 4,474 | ||||||
JX Holdings Inc. | 4,400 | 23,320 | ||||||
Showa Shell Sekiyu K.K. | 600 | 5,975 | ||||||
|
| |||||||
56,069 | ||||||||
MALAYSIA — 0.04% |
| |||||||
Petron Malaysia Refining & Marketing Bhd | 1,800 | 1,770 | ||||||
|
| |||||||
1,770 | ||||||||
NEW ZEALAND — 0.01% |
| |||||||
New Zealand Oil & Gas Ltd. | 968 | 640 | ||||||
|
| |||||||
640 | ||||||||
NORWAY — 1.06% |
| |||||||
Det norske oljeselskap ASAa | 94 | 1,242 | ||||||
DNO International ASAa | 1,152 | 2,496 | ||||||
Norwegian Energy Co. ASAa | 694 | 255 | ||||||
Statoil ASA | 2,146 | 47,062 | ||||||
|
| |||||||
51,055 | ||||||||
POLAND — 0.23% |
| |||||||
Grupa Lotos SAa | 84 | 988 | ||||||
Lubelski Wegiel Bogdanka SAa | 64 | 2,244 | ||||||
Polski Koncern Naftowy Orlen SA | 558 | 7,754 | ||||||
|
| |||||||
10,986 | ||||||||
PORTUGAL — 0.23% |
| |||||||
Galp Energia SGPS SA Class B | 650 | 10,915 | ||||||
|
| |||||||
10,915 | ||||||||
RUSSIA — 2.52% |
| |||||||
LUKOIL OAO | 974 | 56,285 | ||||||
NovaTek OAO SP GDRd | 178 | 21,325 | ||||||
Rosneft Oil Co. OJSC | 2,350 | 17,382 | ||||||
Surgutneftegas OJSC | 13,200 | 10,334 | ||||||
Tatneft OAO Class S | 2,580 | 16,171 | ||||||
|
| |||||||
121,497 | ||||||||
SOUTH AFRICA — 0.11% |
| |||||||
Exxaro Resources Ltd. | 348 | 5,518 | ||||||
|
| |||||||
5,518 |
SCHEDULESOF INVESTMENTS | 21 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI GLOBAL ENERGY PRODUCERS ETF
August 31, 2013
Security | Shares | Value | ||||||
SOUTH KOREA — 0.47% |
| |||||||
S-Oil Corp. | 102 | $ | 7,057 | |||||
SK Innovation Co. Ltd. | 124 | 15,639 | ||||||
|
| |||||||
22,696 | ||||||||
SPAIN — 0.77% |
| |||||||
Repsol SA | 1,594 | 36,898 | ||||||
|
| |||||||
36,898 | ||||||||
SWEDEN — 0.20% |
| |||||||
Alliance Oil Co. Ltd. SDRa | 142 | 1,017 | ||||||
Lundin Petroleum ABa | 394 | 8,434 | ||||||
|
| |||||||
9,451 | ||||||||
THAILAND — 0.50% |
| |||||||
Bangchak Petroleum PCL NVDR | 1,000 | 986 | ||||||
Banpu PCL NVDR | 300 | 2,572 | ||||||
Esso (Thailand) PCL NVDR | 6,400 | 1,233 | ||||||
IRPC PCL NVDR | 29,800 | 2,759 | ||||||
PTT Exploration & Production PCL NVDR | 2,631 | 13,609 | ||||||
Thai Oil PCL NVDR | 1,600 | 2,709 | ||||||
|
| |||||||
23,868 | ||||||||
TURKEY — 0.13% |
| |||||||
Turkiye Petrol Rafinerileri AS | 322 | 6,193 | ||||||
|
| |||||||
6,193 | ||||||||
UNITED KINGDOM — 17.05% |
| |||||||
Afren PLCa | 1,888 | 4,065 | ||||||
Amerisur Resources PLCa | 1,274 | 867 | ||||||
Anglo Pacific Group PLC | 212 | 643 | ||||||
BG Group PLC | 6,368 | 120,868 | ||||||
Bowleven PLCa | 676 | 612 | ||||||
BP PLC | 35,568 | 245,500 | ||||||
Cairn Energy PLCa | 1,010 | 4,258 | ||||||
EnQuest PLCa | 1,766 | 3,398 | ||||||
Essar Energy PLCa | 568 | 1,120 | ||||||
Faroe Petroleum PLCa | 328 | 641 | ||||||
Gulf Keystone Petroleum Ltd.a,b | 1,480 | 4,012 | ||||||
Hargreaves Services PLC | 54 | 678 | ||||||
Heritage Oil PLCa | 340 | 916 | ||||||
Ophir Energy PLCa | 964 | 4,809 | ||||||
Premier Oil PLC | 986 | 5,488 | ||||||
Rockhopper Exploration PLCa | 482 | 844 | ||||||
Royal Dutch Shell PLC Class A | 7,006 | 226,235 | ||||||
Royal Dutch Shell PLC Class B | 4,849 | 162,995 | ||||||
Salamander Energy PLCa | 485 | 960 | ||||||
SOCO International PLCa | 434 | 2,673 |
Security | Shares | Value | ||||||
Tullow Oil PLC | 1,724 | $ | 26,882 | |||||
Xcite Energy Ltd.a | 1,084 | 1,874 | ||||||
|
| |||||||
820,338 | ||||||||
UNITED STATES — 48.75% |
| |||||||
Abraxas Petroleum Corp.a | 126 | 317 | ||||||
Anadarko Petroleum Corp. | 926 | 84,655 | ||||||
Apache Corp. | 730 | 62,546 | ||||||
Approach Resources Inc.a | 92 | 2,144 | ||||||
Berry Petroleum Co. Class A | 82 | 3,374 | ||||||
Bill Barrett Corp.a | 94 | 2,024 | ||||||
Bonanza Creek Energy Inc.a | 46 | 1,826 | ||||||
BPZ Resources Inc.a | 158 | 360 | ||||||
Cabot Oil & Gas Corp. | 796 | 31,147 | ||||||
Carrizo Oil & Gas Inc.a | 64 | 2,193 | ||||||
Chesapeake Energy Corp. | 1,004 | 25,913 | ||||||
Chevron Corp. | 3,614 | 435,234 | ||||||
Cimarex Energy Co. | 154 | 12,907 | ||||||
Clayton Williams Energy Inc.a | 12 | 591 | ||||||
Cloud Peak Energy Inc.a | 176 | 2,770 | ||||||
Cobalt International Energy Inc.a | 540 | 13,176 | ||||||
Comstock Resources Inc. | 84 | 1,226 | ||||||
Concho Resources Inc.a | 198 | 19,109 | ||||||
ConocoPhillips | 2,138 | 141,749 | ||||||
CONSOL Energy Inc. | 456 | 14,241 | ||||||
Contango Oil & Gas Co. | 44 | 1,578 | ||||||
Continental Resources Inc.a | 82 | 7,565 | ||||||
CVR Energy Inc. | 32 | 1,370 | ||||||
Delek US Holdings Inc. | 64 | 1,591 | ||||||
Denbury Resources Inc.a | 728 | 12,587 | ||||||
Devon Energy Corp. | 732 | 41,790 | ||||||
Diamondback Energy Inc.a | 61 | 2,455 | ||||||
Energen Corp. | 134 | 8,886 | ||||||
Energy XXI (Bermuda) Ltd. | 122 | 3,242 | ||||||
EOG Resources Inc. | 504 | 79,153 | ||||||
EPL Oil & Gas Inc.a | 82 | 2,775 | ||||||
EQT Corp. | 282 | 24,173 | ||||||
EXCO Resources Inc. | 236 | 1,718 | ||||||
Exxon Mobil Corp. | 8,280 | 721,685 | ||||||
Forest Oil Corp.a | 198 | 1,101 | ||||||
Goodrich Petroleum Corp.a | 48 | 1,030 | ||||||
Gulfport Energy Corp.a | 144 | 8,496 | ||||||
Halcon Resources Corp.a | 377 | 1,791 | ||||||
Hess Corp. | 576 | 43,114 | ||||||
HollyFrontier Corp. | 348 | 15,479 | ||||||
Kodiak Oil & Gas Corp.a | 564 | 5,634 |
22 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI GLOBAL ENERGY PRODUCERS ETF
August 31, 2013
Security | Shares | Value | ||||||
Laredo Petroleum Holdings Inc.a | 128 | $ | 3,361 | |||||
Linn Co LLC | 62 | 1,716 | ||||||
Magnum Hunter Resources Corp.a | 500 | 2,325 | ||||||
Marathon Oil Corp. | 1,304 | 44,897 | ||||||
Marathon Petroleum Corp. | 616 | 44,666 | ||||||
Matador Resources Co.a | 114 | 1,931 | ||||||
Newfield Exploration Co.a | 244 | 5,812 | ||||||
Noble Energy Inc. | 664 | 40,789 | ||||||
Northern Oil and Gas Inc.a | 100 | 1,288 | ||||||
Oasis Petroleum Inc.a | 138 | 5,410 | ||||||
Occidental Petroleum Corp. | 1,500 | 132,315 | ||||||
PDC Energy Inc.a | 68 | 3,902 | ||||||
Peabody Energy Corp. | 490 | 8,428 | ||||||
Penn Virginia Corp.a | 82 | 394 | ||||||
PetroQuest Energy Inc.a | 98 | 412 | ||||||
Pioneer Natural Resources Co. | 250 | 43,742 | ||||||
QEP Resources Inc. | 324 | 8,852 | ||||||
Quicksilver Resources Inc.a | 160 | 267 | ||||||
Range Resources Corp. | 298 | 22,344 | ||||||
Resolute Energy Corp.a | 106 | 831 | ||||||
Rex Energy Corp.a | 66 | 1,373 | ||||||
Rosetta Resources Inc.a | 124 | 5,770 | ||||||
Sanchez Energy Corp.a | 56 | 1,353 | ||||||
SandRidge Energy Inc.a | 656 | 3,378 | ||||||
SM Energy Co. | 138 | 9,428 | ||||||
Solazyme Inc.a | 76 | 855 | ||||||
Southwestern Energy Co.a | 644 | 24,601 | ||||||
Stone Energy Corp.a | 108 | 2,959 | ||||||
Swift Energy Co.a | 74 | 835 | ||||||
Tesoro Corp. | 256 | 11,799 | ||||||
Ultra Petroleum Corp.a | 286 | 5,920 | ||||||
VAALCO Energy Inc.a | 96 | 534 | ||||||
Valero Energy Corp. | 1,024 | 36,383 | ||||||
W&T Offshore Inc. | 58 | 896 | ||||||
Warren Resources Inc.a | 102 | 292 | ||||||
Western Refining Inc. | 124 | 3,637 | ||||||
Whiting Petroleum Corp.a | 212 | 10,700 | ||||||
WPX Energy Inc.a | 356 | 6,643 | ||||||
|
| �� | ||||||
2,345,753 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $4,858,431) | 4,712,392 |
Security | Shares | Value | ||||||
PREFERRED STOCKS — 1.38% |
| |||||||
BRAZIL — 1.20% |
| |||||||
Petroleo Brasileiro SA | 8,200 | $ | 57,950 | |||||
|
| |||||||
57,950 | ||||||||
RUSSIA — 0.18% |
| |||||||
Surgutneftegas OJSC | 12,800 | 8,648 | ||||||
|
| |||||||
8,648 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $120,759) |
| 66,598 | ||||||
SHORT-TERM INVESTMENTS — 0.26% |
| |||||||
MONEY MARKET FUNDS — 0.26% |
| |||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.15%e,f,g | 6,544 | 6,544 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.13%e,f,g | 416 | 416 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.00%e,f | 5,287 | 5,287 | ||||||
|
| |||||||
12,247 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $12,247) |
| 12,247 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $4,991,437) |
| 4,791,237 | ||||||
Other Assets, Less Liabilities — 0.42% |
| 20,101 | ||||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 4,811,338 | |||||
|
|
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.
SCHEDULESOF INVESTMENTS | 23 |
Table of Contents
Schedule of Investments
iSHARES® MSCI GLOBAL GOLD MINERS ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 99.86% |
| |||||||
AUSTRALIA — 8.55% |
| |||||||
Kingsgate Consolidated Ltd. | 127,209 | $ | 252,656 | |||||
Medusa Mining Ltd. | 109,230 | 256,834 | ||||||
Newcrest Mining Ltd. | 161,172 | 1,903,444 | ||||||
Northern Star Resources Ltd. | 291,390 | 253,038 | ||||||
Resolute Mining Ltd. | 370,722 | 315,325 | ||||||
Silver Lake Resources Ltd.a | 335,280 | 292,645 | ||||||
|
| |||||||
3,273,942 | ||||||||
CANADA — 58.14% |
| |||||||
Agnico-Eagle Mines Ltd. | 55,242 | 1,662,654 | ||||||
Alacer Gold Corp. | 124,608 | 382,719 | ||||||
Argonaut Gold Inc.a | 65,076 | 449,098 | ||||||
AuRico Gold Inc. | 104,808 | 448,084 | ||||||
B2Gold Corp.a | 259,974 | 690,044 | ||||||
Barrick Gold Corp. | 258,720 | 4,932,088 | ||||||
Centerra Gold Inc. | 85,338 | 537,963 | ||||||
China Gold International Resources Corp. Ltd.a | 123,420 | 458,628 | ||||||
Eldorado Gold Corp. | 195,690 | 1,663,986 | ||||||
Goldcorp Inc. | 216,744 | 6,389,931 | ||||||
Kinross Gold Corp. | 304,062 | 1,674,661 | ||||||
Osisko Mining Corp.a | 161,238 | 799,388 | ||||||
SEMAFO Inc. | 166,056 | 347,885 | ||||||
Yamana Gold Inc. | 159,720 | 1,822,949 | ||||||
|
| |||||||
22,260,078 | ||||||||
CHINA — 1.28% |
| |||||||
China Precious Metal Resources Holdings Co. Ltd.a,b | 2,244,000 | 335,685 | ||||||
Lingbao Gold Co. Ltd. Class H | 660,000 | 154,906 | ||||||
|
| |||||||
490,591 | ||||||||
PERU — 2.10% |
| |||||||
Compania de Minas Buenaventura SA SP ADR | 63,618 | 803,495 | ||||||
|
| |||||||
803,495 | ||||||||
SOUTH AFRICA — 10.61% |
| |||||||
AngloGold Ashanti Ltd. | 111,276 | 1,521,203 | ||||||
DRDGOLD Ltd.b | 514,470 | 305,939 | ||||||
Gold Fields Ltd. | 237,006 | 1,247,632 | ||||||
Harmony Gold Mining Co. Ltd. | 151,272 | 570,907 | ||||||
Sibanye Gold Ltd.a | 404,052 | 415,849 | ||||||
|
| |||||||
4,061,530 | ||||||||
TURKEY — 0.91% |
| |||||||
Koza Altin Isletmeleri AS | 21,978 | 346,127 | ||||||
|
| |||||||
346,127 |
Security | Shares | Value | ||||||
UNITED KINGDOM — 6.82% |
| |||||||
African Barrick Gold PLC | 8,184 | $ | 24,054 | |||||
Centamin PLCa | 530,112 | 357,205 | ||||||
Highland Gold Mining Ltd. | 197,406 | 242,767 | ||||||
Pan African Resources PLCa | 1,024,980 | 210,085 | ||||||
Randgold Resources Ltd. | 22,572 | 1,775,511 | ||||||
|
| |||||||
2,609,622 | ||||||||
UNITED STATES — 11.45% |
| |||||||
Allied Nevada Gold Corp.a | 46,398 | 215,287 | ||||||
Gold Resource Corp. | 25,410 | 213,190 | ||||||
Newmont Mining Corp. | 124,542 | 3,956,699 | ||||||
|
| |||||||
4,385,176 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $53,903,661) | 38,230,561 | |||||||
SHORT-TERM INVESTMENTS — 1.62% |
| |||||||
MONEY MARKET FUNDS — 1.62% |
| |||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.15%c,d,e | 563,002 | 563,002 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.13%c,d,e | 35,750 | 35,750 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.00%c,d | 22,733 | 22,733 | ||||||
|
| |||||||
621,485 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $621,485) |
| 621,485 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $54,525,146) |
| 38,852,046 | ||||||
Other Assets, Less Liabilities — (1.48)% |
| (567,027 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 38,285,019 | |||||
|
|
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.
24 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
iSHARES® MSCI GLOBAL METALS & MINING PRODUCERS ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 94.45% |
| |||||||
AUSTRALIA — 18.95% |
| |||||||
Alumina Ltd.a | 701,346 | $ | 630,900 | |||||
Aquarius Platinum Ltd.a | 129,642 | 90,640 | ||||||
Arrium Ltd. | 384,006 | 384,767 | ||||||
Atlas Iron Ltd. | 248,583 | 178,227 | ||||||
BC Iron Ltd. | 23,370 | 90,751 | ||||||
BHP Billiton Ltd. | 901,836 | 28,715,111 | ||||||
BlueScope Steel Ltd.a | 158,300 | 704,949 | ||||||
Cudeco Ltd.a,b | 31,734 | 41,407 | ||||||
Discovery Metals Ltd.a | 66,174 | 9,135 | ||||||
Fortescue Metals Group Ltd. | 436,896 | 1,684,895 | ||||||
Grange Resources Ltd. | 201,842 | 37,752 | ||||||
Iluka Resources Ltd. | 117,834 | 1,128,200 | ||||||
Imdex Ltd. | 58,548 | 35,981 | ||||||
Independence Group NL | 64,328 | 213,705 | ||||||
Indophil Resources NLa | 246,614 | 50,519 | ||||||
Kagara Ltd.a,c | 1,161 | — | ||||||
Lynas Corp. Ltd.a,b | 568,752 | 197,558 | ||||||
Metals X Ltd.a | 223,614 | 20,912 | ||||||
Mount Gibson Iron Ltd. | 220,416 | 141,346 | ||||||
OM Holdings Ltd.a,b | 102,336 | 30,078 | ||||||
OZ Minerals Ltd. | 87,698 | 330,398 | ||||||
PanAust Ltd. | 139,236 | 270,343 | ||||||
Rio Tinto Ltd. | 122,508 | 6,361,212 | ||||||
Sandfire Resources NLa,b | 26,444 | 147,202 | ||||||
Sims Metal Management Ltd. | 51,290 | 430,319 | ||||||
Sundance Resources Ltd.a | 714,138 | 49,612 | ||||||
Syrah Resources Ltd.a | 20,910 | 39,109 | ||||||
Tiger Resources Ltd.a | 222,014 | 51,411 | ||||||
Western Areas NL | 41,204 | 107,893 | ||||||
Western Desert Resources Ltd.a | 73,308 | 43,745 | ||||||
|
| |||||||
42,218,077 | ||||||||
AUSTRIA — 0.62% | ||||||||
AMAG Austria Metall AGd | 1,476 | 42,496 | ||||||
Voestalpine AG | 31,364 | 1,338,919 | ||||||
|
| |||||||
1,381,415 | ||||||||
BELGIUM — 0.27% | ||||||||
Bekaert NV | 11,316 | 401,830 | ||||||
Nyrstar NVa,b | 43,418 | 202,096 | ||||||
|
| |||||||
603,926 | ||||||||
BRAZIL — 2.63% | ||||||||
Companhia Siderurgica Nacional SA | 209,000 | 740,274 |
Security | Shares | Value | ||||||
MMX Mineracao e Metalicos SAa | 49,200 | $ | 44,912 | |||||
Paranapanema SAa | 49,400 | 88,526 | ||||||
Vale SA | 344,400 | 4,986,643 | ||||||
|
| |||||||
5,860,355 | ||||||||
CANADA — 4.83% | ||||||||
Augusta Resource Corp.a | 28,536 | 59,783 | ||||||
Capstone Mining Corp.a | 89,298 | 186,232 | ||||||
Dominion Diamond Corp.a | 20,664 | 258,178 | ||||||
Dundee Precious Metals Inc.a,b | 26,690 | 167,240 | ||||||
First Quantum Minerals Ltd. | 158,546 | 2,628,656 | ||||||
HudBay Minerals Inc. | 47,846 | 313,863 | ||||||
Imperial Metals Corp.a | 13,038 | 151,403 | ||||||
Ivanplats Ltd. Class Aa | 82,164 | 152,660 | ||||||
Labrador Iron Ore Royalty Corp. | 18,450 | 525,219 | ||||||
Lundin Mining Corp.a | 146,246 | 601,676 | ||||||
Major Drilling Group International Inc. | 24,476 | 156,847 | ||||||
Nevsun Resources Ltd. | 55,842 | 176,806 | ||||||
North American Palladium Ltd.a,b | 46,740 | 48,738 | ||||||
Northern Dynasty Minerals Ltd.a | 21,770 | 43,131 | ||||||
Orbite Aluminae Inc.a,b | 56,334 | 24,031 | ||||||
Sabina Gold & Silver Corp.a | 33,948 | 39,261 | ||||||
Sherritt International Corp. | 82,328 | 287,200 | ||||||
Taseko Mines Ltd.a | 57,318 | 116,820 | ||||||
Teck Resources Ltd. Class B | 160,884 | 4,044,595 | ||||||
Thompson Creek Metals Co. Inc.a,b | 50,060 | 183,650 | ||||||
Turquoise Hill Resources Ltd.a | 116,358 | 604,457 | ||||||
|
| |||||||
10,770,446 | ||||||||
CHILE — 0.22% | ||||||||
CAP SA | 22,754 | 485,705 | ||||||
|
| |||||||
485,705 | ||||||||
CHINA — 1.30% | ||||||||
Aluminum Corp. of China Ltd. Class Ha,b | 1,228,000 | 411,741 | ||||||
Bengang Steel Plates Co. Ltd. Class B | 75,000 | 23,793 | ||||||
China Kingstone Mining Holdings Ltd.a,c | 309,000 | — | ||||||
China Metal Recycling Holdings Ltd.a,b,c | 132,000 | — | ||||||
China Rare Earth Holdings Ltd.a | 492,000 | 74,869 | ||||||
China Vanadium Titano-Magnetite Mining Co. Ltd.a | 246,000 | 39,338 | ||||||
Chongqing Iron & Steel Co. Ltd. Class Ha | 244,000 | 33,669 |
SCHEDULESOF INVESTMENTS | 25 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI GLOBAL METALS & MINING PRODUCERS ETF
August 31, 2013
Security | Shares | Value | ||||||
CITIC Dameng Holdings Ltd.a | 246,000 | $ | 20,303 | |||||
Fosun International Ltd. | 492,000 | 358,480 | ||||||
Honbridge Holdings Ltd.a | 492,000 | 53,296 | ||||||
Huili Resources Group Ltd.a,b | 492,000 | 121,820 | ||||||
Hunan Nonferrous Metal Corp. Ltd. Class Ha,b | 492,000 | 152,275 | ||||||
Inner Mongolia Eerduosi Resourses Co. Ltd. Class B | 100,774 | 81,022 | ||||||
Jiangxi Copper Co. Ltd. Class H | 368,000 | 709,007 | ||||||
MMG Ltd.a | 488,000 | 110,131 | ||||||
North Mining Shares Co. Ltd.a | 2,460,000 | 107,861 | ||||||
Shougang Concord International Enterprises Co. Ltd.a,b | 1,476,000 | 74,234 | ||||||
Shougang Fushan Resources Group Ltd. | 984,000 | 329,929 | ||||||
Tiangong International Co. Ltd. | 492,000 | 119,916 | ||||||
Winsway Coking Coal Holding Ltd.a,b | 492,000 | 36,165 | ||||||
Xinjiang Xinxin Mining Industry Co. Ltd. Class Ha,b | 246,000 | 37,434 | ||||||
|
| |||||||
2,895,283 | ||||||||
FINLAND — 0.18% | ||||||||
Outokumpu OYJa,b | 277,119 | 166,773 | ||||||
Rautaruukki OYJ | 26,690 | 187,933 | ||||||
Talvivaara Mining Co. PLCa,b | 262,236 | 36,411 | ||||||
|
| |||||||
391,117 | ||||||||
FRANCE — 1.73% | ||||||||
Aperam | 15,374 | 207,587 | ||||||
ArcelorMittal | 285,606 | 3,657,917 | ||||||
|
| |||||||
3,865,504 | ||||||||
GERMANY — 1.48% | ||||||||
Aurubis AG | 9,348 | 538,103 | ||||||
Salzgitter AG | 11,684 | 442,938 | ||||||
ThyssenKrupp AGa | 109,962 | 2,306,160 | ||||||
|
| |||||||
3,287,201 | ||||||||
GREECE — 0.13% | ||||||||
Mytilineos Holdings SAa | 25,900 | 136,607 | ||||||
Viohalco Hellenic Copper and Aluminum Industry SAa | 27,520 | 144,426 | ||||||
|
| |||||||
281,033 | ||||||||
HONG KONG — 0.05% | ||||||||
CST Mining Group Ltd.a | 5,904,000 | 59,387 | ||||||
IRC Ltd.a,b | 492,000 | 52,028 | ||||||
|
| |||||||
111,415 |
Security | Shares | Value | ||||||
INDIA — 0.70% | ||||||||
Sterlite Industries (India) Ltd. SP ADR | 175,245 | $ | 1,051,470 | |||||
Tata Steel Ltd. SP GDRe | 125,952 | 501,793 | ||||||
|
| |||||||
1,553,263 | ||||||||
INDONESIA — 0.15% | ||||||||
PT Aneka Tambang (Persero) Tbk | 861,000 | 104,865 | ||||||
PT Borneo Lumbung Energi & Metal Tbka | 1,722,000 | 31,539 | ||||||
PT Bumi Resources Minerals Tbka | 3,690,000 | 45,618 | ||||||
PT Central Omega Resources Tbk | 492,000 | 18,022 | ||||||
PT Krakatau Steel (Persero) Tbk | 1,414,000 | 60,859 | ||||||
PT Timah (Persero) Tbk | 676,000 | 79,857 | ||||||
|
| |||||||
340,760 | ||||||||
JAPAN — 8.03% | ||||||||
Asahi Holdings Inc. | 12,200 | 205,167 | ||||||
Dowa Holdings Co. Ltd. | 82,000 | 735,463 | ||||||
Hitachi Metals Ltd. | 31,000 | 373,144 | ||||||
JFE Holdings Inc. | 147,600 | 3,276,490 | ||||||
Kobe Steel Ltd.a | 738,000 | 1,180,920 | ||||||
Kyoei Steel Ltd. | 12,200 | 199,945 | ||||||
Maruichi Steel Tube Ltd. | 12,200 | 282,758 | ||||||
Mitsubishi Materials Corp. | 345,000 | 1,353,769 | ||||||
Mitsui Mining & Smelting Co. Ltd. | 122,000 | 285,991 | ||||||
Neturen Co. Ltd. | 12,200 | 103,205 | ||||||
Nippon Coke & Engineering Co. Ltd. | 123,000 | 140,407 | ||||||
Nippon Light Metal Holdings Co. Ltd. | 209,000 | 266,269 | ||||||
Nippon Steel & Sumitomo Metal Corp. | 2,182,400 | 6,228,120 | ||||||
Nisshin Steel Holdings Co. Ltd. | 24,600 | 276,802 | ||||||
OSAKA Titanium technologies Co. Ltd.b | 12,200 | 248,936 | ||||||
Sumitomo Light Metal Industries Ltd. | 246,000 | 243,204 | ||||||
Sumitomo Metal Mining Co. Ltd. | 127,000 | 1,716,374 | ||||||
Toho Titanium Co. Ltd.b | 12,200 | 90,149 | ||||||
Tokyo Steel Manufacturing Co. Ltd. | 36,800 | 180,409 | ||||||
TOPY Industries Ltd. | 52,000 | 101,758 | ||||||
Yamato Kogyo Co. Ltd. | 12,200 | 399,766 | ||||||
|
| |||||||
17,889,046 |
26 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI GLOBAL METALS & MINING PRODUCERS ETF
August 31, 2013
Security | Shares | Value | ||||||
MALAYSIA — 0.08% | ||||||||
Ann Joo Resources Bhda | 123,000 | $ | 44,935 | |||||
CSC Steel Holdings Bhd | 123,000 | 46,433 | ||||||
Lion Industries Corp. Bhd | 172,200 | 47,181 | ||||||
Press Metal Bhd | 61,400 | 39,441 | ||||||
|
| |||||||
177,990 | ||||||||
MEXICO — 1.74% | ||||||||
Grupo Mexico SAB de CV Series B | 1,057,800 | 3,026,360 | ||||||
Grupo Simec SAB de CV Series Ba | 24,600 | 90,297 | ||||||
Industrias CH SAB de CV Series Ba,b | 49,200 | 282,922 | ||||||
Minera Frisco SAB de CV Series A1a | 172,200 | 468,030 | ||||||
|
| |||||||
3,867,609 | ||||||||
NETHERLANDS — 0.04% | ||||||||
AMG Advanced Metallurgical Group NVa | 9,840 | 86,206 | ||||||
|
| |||||||
86,206 | ||||||||
NORWAY — 0.45% | ||||||||
Norsk Hydro ASA | 250,920 | 1,008,839 | ||||||
|
| |||||||
1,008,839 | ||||||||
PERU — 0.63% | ||||||||
Southern Copper Corp. | 50,922 | 1,400,355 | ||||||
|
| |||||||
1,400,355 | ||||||||
PHILIPPINES — 0.06% | ||||||||
Atlas Consolidated Mining & Development Corp. | 246,000 | 77,220 | ||||||
Nickel Asia Corp. | 172,200 | 60,849 | ||||||
|
| |||||||
138,069 | ||||||||
POLAND — 0.77% | ||||||||
Impexmetal SAa | 24,968 | 22,518 | ||||||
Jastrzebska Spolka Weglowa SA | 10,578 | 221,933 | ||||||
KGHM Polska Miedz SA | 38,744 | 1,467,072 | ||||||
|
| |||||||
1,711,523 | ||||||||
RUSSIA — 1.16% |
| |||||||
Mechel OAO SP ADRa | 47,354 | 136,853 | ||||||
MMC Norilsk Nickel OJSC | 14,514 | 1,904,519 | ||||||
Raspadskaya OAOa | 47,960 | 41,763 | ||||||
Severstal OAO | 61,500 | 509,499 | ||||||
|
| |||||||
2,592,634 | ||||||||
SINGAPORE — 0.06% |
| |||||||
Midas Holdings Ltd. | 368,000 | 132,587 | ||||||
|
| |||||||
132,587 |
Security | Shares | Value | ||||||
SOUTH AFRICA — 2.30% |
| |||||||
African Rainbow Minerals Ltd. | 30,996 | $ | 569,980 | |||||
Anglo American Platinum Ltd.a | 19,064 | 762,765 | ||||||
ArcelorMittal South Africa Ltd.a | 58,916 | 188,697 | ||||||
Assore Ltd. | 9,840 | 376,651 | ||||||
Impala Platinum Holdings Ltd. | 151,782 | 1,682,185 | ||||||
Kumba Iron Ore Ltd. | 22,878 | 1,005,283 | ||||||
Merafe Resources Ltd.a | 439,110 | 27,013 | ||||||
Northam Platinum Ltd.a | 87,822 | 357,600 | ||||||
Palabora Mining Co. Ltd.a | 4,920 | 54,960 | ||||||
Royal Bafokeng Platinum Ltd.a | 18,942 | 105,428 | ||||||
|
| |||||||
5,130,562 | ||||||||
SOUTH KOREA — 3.73% |
| |||||||
CNK International Co. Ltd.a | 14,144 | 64,346 | ||||||
Daehan Steel Co. Ltd. | 3,680 | 22,941 | ||||||
Dongbu Steel Co. Ltd.a | 7,380 | 19,480 | ||||||
Dongkuk Industries Co. Ltd. | 8,240 | 26,500 | ||||||
Dongkuk Steel Mill Co. Ltd.b | 12,300 | 145,156 | ||||||
EG Corp. | 1,476 | 27,923 | ||||||
Hyundai Hysco Co. Ltd. | 9,840 | 384,718 | ||||||
Hyundai Steel Co. | 15,620 | 1,032,844 | ||||||
KISCO Corp. | 1,220 | 28,905 | ||||||
KISWIRE Ltd. | 1,220 | 37,972 | ||||||
Korea Zinc Co. Ltd. | 2,336 | 672,359 | ||||||
Poongsan Corp. | 4,920 | 113,687 | ||||||
Poongsan Holdings Corp. | 1,220 | 29,674 | ||||||
POSCO | 18,450 | 5,360,232 | ||||||
POSCO Chemtech Co. Ltd. | 738 | 91,149 | ||||||
Posco M-Tech Co. Ltd. | 7,380 | 51,059 | ||||||
SeAH Besteel Corp. | 3,680 | 98,460 | ||||||
SeAH Holdings Corp. | 246 | 21,873 | ||||||
SeAH Steel Corp. | 614 | 54,483 | ||||||
Shine Co. Ltd.a,b | 3,198 | 27,311 | ||||||
|
| |||||||
8,311,072 | ||||||||
SPAIN — 0.23% | ||||||||
Acerinox SAb | 30,996 | 321,208 | ||||||
Tubacex SA | 30,258 | 105,531 | ||||||
Tubos Reunidos SA | 36,038 | 82,209 | ||||||
|
| |||||||
508,948 | ||||||||
SWEDEN — 0.84% | ||||||||
Boliden AB | 75,030 | 1,093,551 | ||||||
Hoganas AB Class B | 6,396 | 316,999 | ||||||
SSAB AB Class Ab | 53,996 | 376,125 | ||||||
SSAB AB Class B | 13,898 | 81,673 | ||||||
|
| |||||||
1,868,348 |
SCHEDULESOF INVESTMENTS | 27 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI GLOBAL METALS & MINING PRODUCERS ETF
August 31, 2013
Security | Shares | Value | ||||||
SWITZERLAND — 0.04% | ||||||||
Schmolz + Bickenbach AG Registereda | 23,370 | $ | 84,968 | |||||
|
| |||||||
84,968 | ||||||||
TAIWAN — 1.86% | ||||||||
China Metal Products Co. Ltd. | 124,521 | 182,676 | ||||||
China Steel Corp. | 3,231,287 | 2,731,927 | ||||||
Chun Yuan Steel Industrial Co. Ltd. | 246,040 | 90,442 | ||||||
Chung Hung Steel Corp.a | 246,000 | 70,534 | ||||||
Feng Hsin Iron & Steel Co. Ltd. | 122,000 | 215,262 | ||||||
Gloria Material Technology Corp. | 128,201 | 79,685 | ||||||
Hsin Kuang Steel Co. Ltd. | 122,000 | 77,462 | ||||||
Ta Chen Stainless Pipe Co. Ltd. | 271,300 | 122,846 | ||||||
Ton Yi Industrial Corp. | 246,000 | 225,247 | ||||||
Tung Ho Steel Enterprise Corp. | 247,000 | 189,844 | ||||||
YC INOX Co. Ltd. | 122,000 | 73,181 | ||||||
Yieh Phui Enterprise Co. Ltd. | 250,440 | 78,669 | ||||||
|
| |||||||
4,137,775 | ||||||||
THAILAND — 0.05% |
| |||||||
G J Steel PCL NVDRa | 15,006,000 | 32,632 | ||||||
G Steel PCL NVDRa | 6,248,400 | 29,116 | ||||||
STP & I PCL NVDR | 98,400 | 55,635 | ||||||
|
| |||||||
117,383 | ||||||||
TURKEY — 0.37% |
| |||||||
Borusan Mannesmann Boru Sanayi ve TAS | 4,182 | 53,756 | ||||||
Eregli Demir ve Celik Fabrikalari TAS | 403,686 | 437,702 | ||||||
Izmir Demir Celik Sanayi ASa | 39,360 | 33,987 | ||||||
Kardemir Karabuk Demir Celik Sanayi ve TAS Class Aa | 76,496 | 53,293 | ||||||
Kardemir Karabuk Demir Celik Sanayi ve TAS Class Ba | 41,347 | 69,376 | ||||||
Kardemir Karabuk Demir Celik Sanayi ve TAS Class Da | 101,177 | 49,639 | ||||||
Koza Anadolu Metal Madencilik Isletmeleri ASa | 49,446 | 78,114 | ||||||
Park Elektrik Uretim Madencilik Sanayi ve TASa | 24,476 | 54,278 | ||||||
|
| |||||||
830,145 | ||||||||
UNITED KINGDOM — 27.07% |
| |||||||
African Minerals Ltd.a,b | 72,938 | 214,373 | ||||||
Anglo American PLC | 391,386 | 8,951,359 |
Security | Shares | Value | ||||||
Antofagasta PLC | 110,454 | $ | 1,460,864 | |||||
BHP Billiton PLC | 592,368 | 17,208,759 | ||||||
Evraz PLC | 97,046 | 187,651 | ||||||
Ferrexpo PLC | 56,334 | 144,832 | ||||||
Gem Diamonds Ltd.a | 26,814 | 65,121 | ||||||
Glencore International PLC | 2,975,370 | 14,047,139 | ||||||
Hill & Smith Holdings PLC | 24,108 | 160,731 | ||||||
Kazakhmys PLC | 62,852 | 293,136 | ||||||
London Mining PLCa | 42,680 | 76,915 | ||||||
Lonmin PLCa,b | 126,936 | 668,400 | ||||||
New World Resources PLC Class Ab | 30,504 | 32,323 | ||||||
Petra Diamonds Ltd.a | 102,582 | 190,580 | ||||||
Rio Tinto PLC | 356,946 | 16,084,419 | ||||||
Sirius Minerals PLCa,b | 320,538 | 63,220 | ||||||
Vedanta Resources PLC | 26,322 | 473,138 | ||||||
|
| |||||||
60,322,960 | ||||||||
UNITED STATES — 11.70% |
| |||||||
A.M. Castle & Co.a | 4,796 | 75,825 | ||||||
AK Steel Holding Corp.a | 46,002 | 154,567 | ||||||
Alcoa Inc. | 299,750 | 2,308,075 | ||||||
Allegheny Technologies Inc. | 29,766 | 795,050 | ||||||
AMCOL International Corp. | 6,888 | 227,097 | ||||||
Carpenter Technology Corp. | 14,268 | 767,190 | ||||||
Century Aluminum Co.a | 16,358 | 127,756 | ||||||
Cliffs Natural Resources Inc. | 44,402 | 926,670 | ||||||
Commercial Metals Co. | 30,504 | 453,900 | ||||||
Compass Minerals International Inc. | 9,594 | 707,366 | ||||||
Freeport-McMoRan Copper & Gold Inc. | 290,772 | 8,787,130 | ||||||
Globe Specialty Metals Inc. | 18,450 | 237,082 | ||||||
Haynes International Inc. | 3,812 | 168,605 | ||||||
Horsehead Holding Corp.a | 13,284 | 157,681 | ||||||
Kaiser Aluminum Corp. | 5,412 | 374,077 | ||||||
Materion Corp. | 5,288 | 155,467 | ||||||
Molycorp Inc.a | 35,916 | 219,088 | ||||||
Noranda Aluminium Holding Corp. | 14,636 | 39,956 | ||||||
Nucor Corp. | 90,528 | 4,118,119 | ||||||
Olympic Steel Inc. | 3,198 | 83,084 | ||||||
Reliance Steel & Aluminum Co. | 21,402 | 1,427,299 | ||||||
RTI International Metals Inc.a | 8,610 | 266,652 | ||||||
Schnitzer Steel Industries Inc. Class A | 7,380 | 186,345 | ||||||
Steel Dynamics Inc. | 61,008 | 930,982 |
28 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI GLOBAL METALS & MINING PRODUCERS ETF
August 31, 2013
Security | Shares | Value | ||||||
Stillwater Mining Co.a | 32,102 | $ | 365,642 | |||||
SunCoke Energy Inc.a | 19,188 | 301,827 | ||||||
United States Steel Corp. | 41,820 | 748,578 | ||||||
Universal Stainless & Alloy Products Inc.a | 2,460 | 67,748 | ||||||
US Silica Holdings Inc. | 9,102 | 213,897 | ||||||
Walter Energy Inc. | 12,546 | 162,345 | ||||||
Worthington Industries Inc. | 15,498 | 516,548 | ||||||
|
| |||||||
26,071,648 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $222,963,969) |
| 210,434,167 | ||||||
PREFERRED STOCKS — 5.01% |
| |||||||
BRAZIL — 4.99% |
| |||||||
Bradespar SA | 61,400 | 637,194 | ||||||
Companhia de Ferro Ligas da Bahia — Ferbasa | 12,200 | 68,873 | ||||||
Gerdau SA | 246,000 | 1,774,735 | ||||||
Metalurgica Gerdau SA | 86,000 | 765,868 | ||||||
Usinas Siderurgicas de Minas Gerais SA Class A | 110,600 | 479,676 | ||||||
Vale SA Class A | 565,800 | 7,402,145 | ||||||
|
| |||||||
11,128,491 | ||||||||
RUSSIA — 0.02% |
| |||||||
Mechel OAO SP ADR | 24,600 | 39,430 | ||||||
|
| |||||||
39,430 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $13,411,530) |
| 11,167,921 | ||||||
SHORT-TERM INVESTMENTS — 1.88% |
| |||||||
MONEY MARKET FUNDS — 1.88% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.15%f,g,h | 3,747,294 | 3,747,294 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.13%f,g,h | 237,951 | 237,951 | ||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | ||||||||
0.00%f,g | 198,892 | 198,892 | ||||||
|
| |||||||
4,184,137 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $4,184,137) |
| 4,184,137 | ||||||
|
|
Value | ||||||
TOTAL INVESTMENTS | ||||||
(Cost: $240,559,636) | $ | 225,786,225 | ||||
Other Assets, Less Liabilities — (1.34)% | (2,978,165 | ) | ||||
|
| |||||
NET ASSETS — 100.00% | $ | 222,808,060 | ||||
|
|
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 | Security valued using Level 3 inputs in accordance with management’s fair valuation policy. See Note 1. |
d | This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933. |
e | This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933. |
f | Affiliated issuer. See Note 2. |
g | The rate quoted is the annualized seven-day yield of the fund at period end. |
h | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 29 |
Table of Contents
Schedule of Investments
iSHARES® MSCI GLOBAL SILVER MINERS ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 99.75% |
| |||||||
AUSTRALIA — 0.35% |
| |||||||
Alcyone Resources Ltd.a | 6,848,050 | $ | 24,397 | |||||
|
| |||||||
24,397 | ||||||||
CANADA — 57.67% |
| |||||||
Alexco Resource Corp.a,b | 34,960 | 75,229 | ||||||
AuRico Gold Inc. | 58,550 | 250,318 | ||||||
Endeavour Silver Corp.a | 29,135 | 144,170 | ||||||
Excellon Resources Inc.a | 38,560 | 70,548 | ||||||
First Majestic Silver Corp.a | 21,665 | 306,419 | ||||||
Fortuna Silver Mines Inc.a | 38,350 | 158,868 | ||||||
Great Panther Silver Ltd.a | 76,805 | 88,097 | ||||||
MAG Silver Corp.a | 17,215 | 124,841 | ||||||
Mandalay Resources Corp. | 96,195 | 82,070 | ||||||
Minco Silver Corp.a | 56,215 | 50,092 | ||||||
Pan American Silver Corp. | 23,845 | 290,462 | ||||||
Scorpio Mining Corp.a,b | 120,060 | 43,248 | ||||||
Silver Standard Resources Inc.a | 22,040 | 185,530 | ||||||
Silver Wheaton Corp. | 60,090 | 1,585,843 | ||||||
Silvercorp Metals Inc. | 48,645 | 178,920 | ||||||
Tahoe Resources Inc.a,b | 18,770 | 334,511 | ||||||
US Silver & Gold Inc.a | 64,450 | 43,989 | ||||||
|
| |||||||
4,013,155 | ||||||||
HONG KONG — 2.46% |
| |||||||
G-Resources Group Ltd.a,b | 4,740,000 | 171,154 | ||||||
|
| |||||||
171,154 | ||||||||
MEXICO — 9.81% |
| |||||||
Industrias Penoles SAB de CV | 22,350 | 682,619 | ||||||
|
| |||||||
682,619 | ||||||||
PERU — 4.61% |
| |||||||
Compania de Minas Buenaventura SA SP ADR | 25,415 | 320,992 | ||||||
|
| |||||||
320,992 | ||||||||
UNITED KINGDOM — 12.20% |
| |||||||
Arian Silver Corp.a,b | 500,020 | 58,011 | ||||||
Fresnillo PLC | 26,225 | 528,594 | ||||||
Hochschild Mining PLC | 46,795 | 189,220 | ||||||
Patagonia Gold PLCa,b | 351,065 | 73,314 | ||||||
|
| |||||||
849,139 | ||||||||
UNITED STATES — 12.65% |
| |||||||
Coeur Mining Inc.a | 20,400 | 294,576 | ||||||
Golden Minerals Co.a | 29,620 | 34,359 | ||||||
Hecla Mining Co. | 84,440 | 288,785 |
Security | Shares | Value | ||||||
McEwen Mining Inc.a | 66,890 | $ | 181,272 | |||||
Paramount Gold and Silver Corp.a | 53,260 | 80,955 | ||||||
|
| |||||||
879,947 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $8,003,879) |
| 6,941,403 | ||||||
SHORT-TERM INVESTMENTS — 7.85% |
| |||||||
MONEY MARKET FUNDS — 7.85% |
| |||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.15%c,d,e | 511,741 | 511,741 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.13%c,d,e | 32,495 | 32,495 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.00%c,d | 2,056 | 2,056 | ||||||
|
| |||||||
546,292 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $546,292) |
| 546,292 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $8,550,171) |
| 7,487,695 | ||||||
Other Assets, Less Liabilities — (7.60)% |
| (528,793 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 6,958,902 | |||||
|
|
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 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Assets and Liabilities
iSHARES®, INC.
August 31, 2013
iShares MSCI Global Agriculture Producers ETF | iShares MSCI Global Energy Producers ETF | iShares MSCI Global Gold Miners ETF | ||||||||||
ASSETS | ||||||||||||
Investments, at cost: | ||||||||||||
Unaffiliated | $ | 38,683,953 | $ | 4,979,190 | $ | 53,903,661 | ||||||
Affiliated (Note 2) | 875,094 | 12,247 | 621,485 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments | $ | 39,559,047 | $ | 4,991,437 | $ | 54,525,146 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 35,365,008 | $ | 4,778,990 | $ | 38,230,561 | ||||||
Affiliated (Note 2) | 814,223 | 12,247 | 621,485 | |||||||||
|
|
|
|
|
| |||||||
Total fair value of investments | 36,179,231 | 4,791,237 | 38,852,046 | |||||||||
Foreign currency, at valueb | 68,614 | 7,864 | 51,931 | |||||||||
Receivables: | ||||||||||||
Investment securities sold | 66,237 | 4,882 | 611,869 | |||||||||
Dividends and interest | 54,645 | 24,307 | 28,093 | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 36,368,727 | 4,828,290 | 39,543,939 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 72,646 | 8,392 | 647,917 | |||||||||
Collateral for securities on loan (Note 5) | 568,232 | 6,960 | 598,752 | |||||||||
Foreign taxes (Note 1) | 37 | — | — | |||||||||
Investment advisory fees (Note 2) | 11,848 | 1,600 | 12,251 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 652,763 | 16,952 | 1,258,920 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 35,715,964 | $ | 4,811,338 | $ | 38,285,019 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 39,142,946 | $ | 5,040,238 | $ | 58,043,082 | ||||||
Undistributed net investment income | 116,739 | 21,722 | 48,755 | |||||||||
Accumulated net realized loss | (163,395 | ) | (50,213 | ) | (4,133,037 | ) | ||||||
Net unrealized depreciation | (3,380,326 | ) | (200,409 | ) | (15,673,781 | ) | ||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 35,715,964 | $ | 4,811,338 | $ | 38,285,019 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingc | 1,450,000 | 200,000 | 3,300,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 24.63 | $ | 24.06 | $ | 11.60 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $524,561, $5,530 and $483,104, respectively. See Note 5. |
b | Cost of foreign currency: $69,328, $8,033 and $52,419, respectively. |
c | $0.001 par value, number of shares authorized: 500 million, 500 million and 500 million, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 31 |
Table of Contents
Statements of Assets and Liabilities (Continued)
iSHARES®, INC.
August 31, 2013
iShares MSCI Global Metals & Mining Producers ETF | iShares MSCI Global Silver Miners ETF | |||||||
ASSETS | ||||||||
Investments, at cost: | ||||||||
Unaffiliated | $ | 236,375,499 | $ | 8,003,879 | ||||
Affiliated (Note 2) | 4,184,137 | 546,292 | ||||||
|
|
|
| |||||
Total cost of investments | $ | 240,559,636 | $ | 8,550,171 | ||||
|
|
|
| |||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||
Unaffiliated | $ | 221,602,088 | $ | 6,941,403 | ||||
Affiliated (Note 2) | 4,184,137 | 546,292 | ||||||
|
|
|
| |||||
Total fair value of investments | 225,786,225 | 7,487,695 | ||||||
Foreign currency, at valueb | 311,293 | 955 | ||||||
Cash | 17,712 | — | ||||||
Receivables: | ||||||||
Investment securities sold | 798,460 | 178,793 | ||||||
Due from custodian (Note 4) | 1,900 | — | ||||||
Dividends and interest | 856,680 | 8,991 | ||||||
|
|
|
| |||||
Total Assets | 227,772,270 | 7,676,434 | ||||||
|
|
|
| |||||
LIABILITIES | ||||||||
Payables: | ||||||||
Investment securities purchased | 784,953 | 171,252 | ||||||
Collateral for securities on loan (Note 5) | 3,985,245 | 544,236 | ||||||
Capital shares redeemed | 112,262 | — | ||||||
Foreign taxes (Note 1) | 2,337 | — | ||||||
Securities related to in-kind transactions (Note 4) | 2,384 | — | ||||||
Investment advisory fees (Note 2) | 77,029 | 2,044 | ||||||
|
|
|
| |||||
Total Liabilities | 4,964,210 | 717,532 | ||||||
|
|
|
| |||||
NET ASSETS | $ | 222,808,060 | $ | 6,958,902 | ||||
|
|
|
| |||||
Net assets consist of: | ||||||||
Paid-in capital | $ | 239,712,258 | $ | 8,333,068 | ||||
Undistributed (distributions in excess of) net investment income | 1,097,994 | (6,916 | ) | |||||
Accumulated net realized loss | (3,222,527 | ) | (304,953 | ) | ||||
Net unrealized depreciation | (14,779,665 | ) | (1,062,297 | ) | ||||
|
|
|
| |||||
NET ASSETS | $ | 222,808,060 | $ | 6,958,902 | ||||
|
|
|
| |||||
Shares outstandingc | 12,300,000 | 500,000 | ||||||
|
|
|
| |||||
Net asset value per share | $ | 18.11 | $ | 13.92 | ||||
|
|
|
|
a | Securities on loan with values of $3,610,249 and $452,024, respectively. See Note 5. |
b | Cost of foreign currency: $313,970 and $959, respectively. |
c | $0.001 par value, number of shares authorized: 500 million and 500 million, respectively. |
See notes to financial statements.
32 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Operations
iSHARES®, INC.
Year ended August 31, 2013
iShares MSCI Global Agriculture Producers ETF | iShares MSCI Global Energy Producers ETF | iShares MSCI Global Gold Miners ETF | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliateda | $ | 467,457 | $ | 144,171 | $ | 563,248 | ||||||
Dividends — affiliated (Note 2) | 1,037 | — | — | |||||||||
Interest — affiliated (Note 2) | 5 | 2 | 17 | |||||||||
Securities lending income — affiliated (Note 2) | 2,523 | 158 | 6,194 | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 471,022 | 144,331 | 569,459 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 81,354 | 18,793 | 126,010 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 81,354 | 18,793 | 126,010 | |||||||||
Less investment advisory fees waived (Note 2) | (1,448 | ) | — | — | ||||||||
|
|
|
|
|
| |||||||
Net expenses | 79,906 | 18,793 | 126,010 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 391,116 | 125,538 | 443,449 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | (136,168 | ) | (24,900 | ) | (3,810,382 | ) | ||||||
Investments — affiliated (Note 2) | (2,031 | ) | — | — | ||||||||
In-kind redemptions — unaffiliated | — | — | 550,827 | |||||||||
Foreign currency transactions | (166 | ) | (726 | ) | (3,453 | ) | ||||||
|
|
|
|
|
| |||||||
Net realized loss | (138,365 | ) | (25,626 | ) | (3,263,008 | ) | ||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments | (3,296,186 | ) | 136,216 | (11,578,776 | ) | |||||||
Translation of assets and liabilities in foreign currencies | (509 | ) | (302 | ) | (943 | ) | ||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | (3,296,695 | ) | 135,914 | (11,579,719 | ) | |||||||
|
|
|
|
|
| |||||||
Net realized and unrealized gain (loss) | (3,435,060 | ) | 110,288 | (14,842,727 | ) | |||||||
|
|
|
|
|
| |||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | (3,043,944 | ) | $ | 235,826 | $ | (14,399,278 | ) | ||||
|
|
|
|
|
|
a | Net of foreign withholding tax of $51,144, $10,322 and $59,104, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 33 |
Table of Contents
Statements of Operations (Continued)
iSHARES®, INC.
Year ended August 31, 2013
iShares MSCI Global Metals & Mining Producers ETF | iShares MSCI Global Silver Miners ETF | |||||||
NET INVESTMENT INCOME | ||||||||
Dividends — unaffiliateda | $ | 6,490,154 | $ | 44,271 | ||||
Interest — unaffiliated | 6 | — | ||||||
Interest — affiliated (Note 2) | 109 | 1 | ||||||
Securities lending income — affiliated (Note 2) | 79,178 | 778 | ||||||
|
|
|
| |||||
Total investment income | 6,569,447 | 45,050 | ||||||
|
|
|
| |||||
EXPENSES | ||||||||
Investment advisory fees (Note 2) | 884,095 | 12,404 | ||||||
|
|
|
| |||||
Total expenses | 884,095 | 12,404 | ||||||
|
|
|
| |||||
Net investment income | 5,685,352 | 32,646 | ||||||
|
|
|
| |||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||
Net realized gain (loss) from: | ||||||||
Investments — unaffiliated | (3,471,439 | ) | (218,971 | ) | ||||
In-kind redemptions — unaffiliated | 5,740,886 | — | ||||||
Foreign currency transactions | (2,458 | ) | (181 | ) | ||||
|
|
|
| |||||
Net realized gain (loss) | 2,266,989 | (219,152 | ) | |||||
|
|
|
| |||||
Net change in unrealized appreciation/depreciation on: | ||||||||
Investments | (14,106,575 | ) | (721,002 | ) | ||||
Translation of assets and liabilities in foreign currencies | 4,043 | 170 | ||||||
|
|
|
| |||||
Net change in unrealized appreciation/depreciation | (14,102,532 | ) | (720,832 | ) | ||||
|
|
|
| |||||
Net realized and unrealized loss | (11,835,543 | ) | (939,984 | ) | ||||
|
|
|
| |||||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (6,150,191 | ) | $ | (907,338 | ) | ||
|
|
|
|
a | Net of foreign withholding tax of $308,494 and $3,933, respectively. |
See notes to financial statements.
34 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets
iSHARES®, INC.
iShares MSCI Global Agriculture Producers ETF | iShares MSCI Global Energy Producers ETF | |||||||||||||||
Year ended August 31, 2013 | Period from to August 31, 2012 | Year ended August 31, 2013 | Period from to August 31, 2012 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 391,116 | $ | 55,484 | $ | 125,538 | $ | 84,128 | ||||||||
Net realized loss | (138,365 | ) | (25,900 | ) | (25,626 | ) | (23,866 | ) | ||||||||
Net change in unrealized appreciation/depreciation | (3,296,695 | ) | (83,631 | ) | 135,914 | (336,323 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | (3,043,944 | ) | (54,047 | ) | 235,826 | (276,061 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (289,367 | ) | (39,624 | ) | (125,608 | ) | (63,057 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (289,367 | ) | (39,624 | ) | (125,608 | ) | (63,057 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 29,084,665 | 10,058,281 | — | 5,040,238 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets from capital share transactions | 29,084,665 | 10,058,281 | — | 5,040,238 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE IN NET ASSETS | 25,751,354 | 9,964,610 | 110,218 | 4,701,120 | ||||||||||||
NET ASSETS | ||||||||||||||||
Beginning of period | 9,964,610 | — | 4,701,120 | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 35,715,964 | $ | 9,964,610 | $ | 4,811,338 | $ | 4,701,120 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed net investment income included in net assets at end of period | $ | 116,739 | $ | 14,236 | $ | 21,722 | $ | 21,897 | ||||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED | ||||||||||||||||
Shares sold | 1,050,000 | 400,000 | — | 200,000 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in shares outstanding | 1,050,000 | 400,000 | — | 200,000 | ||||||||||||
|
|
|
|
|
|
|
|
a | Commencement of operations. |
See notes to financial statements.
FINANCIAL STATEMENTS | 35 |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Global Gold Miners ETF | iShares MSCI Global Metals & Mining Producers ETF | |||||||||||||||
Year ended August 31, 2013 | Period from to August 31, 2012 | Year ended August 31, 2013 | Period from to August 31, 2012 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 443,449 | $ | 170,562 | $ | 5,685,352 | $ | 49,211 | ||||||||
Net realized gain (loss) | (3,263,008 | ) | (806,071 | ) | 2,266,989 | (38,123 | ) | |||||||||
Net change in unrealized appreciation/depreciation | (11,579,719 | ) | (4,094,062 | ) | (14,102,532 | ) | (677,133 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease in net assets resulting from operations | (14,399,278 | ) | (4,729,571 | ) | (6,150,191 | ) | (666,045 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (426,169 | ) | (135,773 | ) | (4,641,648 | ) | (25,905 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (426,169 | ) | (135,773 | ) | (4,641,648 | ) | (25,905 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 33,445,251 | 39,170,494 | 172,833,069 | 124,215,632 | ||||||||||||
Cost of shares redeemed | (12,419,198 | ) | (2,220,737 | ) | (62,756,852 | ) | — | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets from capital share transactions | 21,026,053 | 36,949,757 | 110,076,217 | 124,215,632 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE IN NET ASSETS | 6,200,606 | 32,084,413 | 99,284,378 | 123,523,682 | ||||||||||||
NET ASSETS | ||||||||||||||||
Beginning of period | 32,084,413 | — | 123,523,682 | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 38,285,019 | $ | 32,084,413 | $ | 222,808,060 | $ | 123,523,682 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed net investment income included in net assets at end of period | $ | 48,755 | $ | 34,928 | $ | 1,097,994 | $ | 22,110 | ||||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 2,450,000 | 1,700,000 | 8,950,000 | 6,500,000 | ||||||||||||
Shares redeemed | (750,000 | ) | (100,000 | ) | (3,150,000 | ) | — | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in shares outstanding | 1,700,000 | 1,600,000 | 5,800,000 | 6,500,000 | ||||||||||||
|
|
|
|
|
|
|
|
a Commencement of operations.
See notes to financial statements.
36 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Global Silver Miners ETF | ||||||||
Year ended August 31, 2013 | Period from to August 31, 2012 | |||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||
OPERATIONS: | ||||||||
Net investment income | $ | 32,646 | $ | 15,055 | ||||
Net realized loss | (219,152 | ) | (560,995 | ) | ||||
Net change in unrealized appreciation/depreciation | (720,832 | ) | (341,465 | ) | ||||
|
|
|
| |||||
Net decrease in net assets resulting from operations | (907,338 | ) | (887,405 | ) | ||||
|
|
|
| |||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||
From net investment income | (44,671 | ) | (14,066 | ) | ||||
|
|
|
| |||||
Total distributions to shareholders | (44,671 | ) | (14,066 | ) | ||||
|
|
|
| |||||
CAPITAL SHARE TRANSACTIONS: | ||||||||
Proceeds from shares sold | 5,816,496 | 4,939,471 | ||||||
Cost of shares redeemed | — | (1,943,585 | ) | |||||
|
|
|
| |||||
Net increase in net assets from capital share transactions | 5,816,496 | 2,995,886 | ||||||
|
|
|
| |||||
INCREASE IN NET ASSETS | 4,864,487 | 2,094,415 | ||||||
NET ASSETS | ||||||||
Beginning of period | 2,094,415 | — | ||||||
|
|
|
| |||||
End of period | $ | 6,958,902 | $ | 2,094,415 | ||||
|
|
|
| |||||
Undistributed (distributions in excess of) net investment income included in net assets at end of period | $ | (6,916 | ) | $ | 5,092 | |||
|
|
|
| |||||
SHARES ISSUED AND REDEEMED | ||||||||
Shares sold | 400,000 | 200,000 | ||||||
Shares redeemed | — | (100,000 | ) | |||||
|
|
|
| |||||
Net increase in shares outstanding | 400,000 | 100,000 | ||||||
|
|
|
|
a | Commencement of operations. |
See notes to financial statements.
FINANCIAL STATEMENTS | 37 |
Table of Contents
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Global Agriculture Producers ETF |
Year ended Aug. 31, 2013 | Period from to Aug. 31, 2012 | |||||||
Net asset value, beginning of period | $ | 24.91 | $ | 24.88 | ||||
|
|
|
| |||||
Income from investment operations: | ||||||||
Net investment incomeb | 0.50 | 0.28 | ||||||
Net realized and unrealized lossc | (0.46 | ) | (0.05 | ) | ||||
|
|
|
| |||||
Total from investment operations | 0.04 | 0.23 | ||||||
|
|
|
| |||||
Less distributions from: | ||||||||
Net investment income | (0.32 | ) | (0.20 | ) | ||||
|
|
|
| |||||
Total distributions | (0.32 | ) | (0.20 | ) | ||||
|
|
|
| |||||
Net asset value, end of period | $ | 24.63 | $ | 24.91 | ||||
|
|
|
| |||||
Total return | 0.10 | % | 0.97 | %d | ||||
|
|
|
| |||||
Ratios/Supplemental data: | ||||||||
Net assets, end of period (000s) | $ | 35,716 | $ | 9,965 | ||||
Ratio of expenses to average net assetse | 0.38 | % | 0.38 | % | ||||
Ratio of expenses to average net assets prior to waived feese | 0.39 | % | 0.39 | % | ||||
Ratio of net investment income to average net assetse | 1.87 | % | 1.93 | % | ||||
Portfolio turnover ratef | 6 | % | 6 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout each period. |
c | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
d | Not annualized. |
e | Annualized for periods of less than one year. |
f | Portfolio turnover rates exclude portfolio securities received or delivered in Creation Units but include portfolio transactions that are executed as a result of the Fund processing capital share transactions in Creation Units partially for cash in U.S. dollars. Excluding such cash transactions, the portfolio turnover rates for the year ended August 31, 2013 and the period ended August 31, 2012 were 6% and 6%, respectively. See Note 4. |
See notes to financial statements.
38 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Global Energy Producers ETF |
Year ended Aug. 31, 2013 | Period from to Aug. 31, 2012 | |||||||
Net asset value, beginning of period | $ | 23.51 | $ | 24.79 | ||||
|
|
|
| |||||
Income from investment operations: | ||||||||
Net investment incomeb | 0.63 | 0.43 | ||||||
Net realized and unrealized gain (loss)c | 0.55 | (1.39 | ) | |||||
|
|
|
| |||||
Total from investment operations | 1.18 | (0.96 | ) | |||||
|
|
|
| |||||
Less distributions from: | ||||||||
Net investment income | (0.63 | ) | (0.32 | ) | ||||
|
|
|
| |||||
Total distributions | (0.63 | ) | (0.32 | ) | ||||
|
|
|
| |||||
Net asset value, end of period | $ | 24.06 | $ | 23.51 | ||||
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|
| |||||
Total return | 5.10 | % | (3.77 | )%d | ||||
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| |||||
Ratios/Supplemental data: | ||||||||
Net assets, end of period (000s) | $ | 4,811 | $ | 4,701 | ||||
Ratio of expenses to average net assetse | 0.39 | % | 0.39 | % | ||||
Ratio of net investment income to average net assetse | 2.61 | % | 3.16 | % | ||||
Portfolio turnover ratef | 6 | % | 5 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout each period. |
c | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
d | Not annualized. |
e | Annualized for periods of less than one year. |
f | Portfolio turnover rates exclude portfolio securities received or delivered in Creation Units but include portfolio transactions that are executed as a result of the Fund processing capital share transactions in Creation Units partially for cash in U.S. dollars. Excluding such cash transactions, the portfolio turnover rates for the year ended August 31, 2013 and the period ended August 31, 2012 were 6% and 5%, respectively. See Note 4. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 39 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Global Gold Miners ETF |
Year ended Aug. 31, 2013 | Period from to Aug. 31, 2012 | |||||||
Net asset value, beginning of period | $ | 20.05 | $ | 25.00 | ||||
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|
| |||||
Income from investment operations: | ||||||||
Net investment incomeb | 0.21 | 0.15 | ||||||
Net realized and unrealized lossc | (8.47 | ) | (5.02 | ) | ||||
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|
|
| |||||
Total from investment operations | (8.26 | ) | (4.87 | ) | ||||
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|
|
| |||||
Less distributions from: | ||||||||
Net investment income | (0.19 | ) | (0.08 | ) | ||||
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|
|
| |||||
Total distributions | (0.19 | ) | (0.08 | ) | ||||
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| |||||
Net asset value, end of period | $ | 11.60 | $ | 20.05 | ||||
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|
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| |||||
Total return | (41.28 | )% | (19.45 | )%d | ||||
|
|
|
| |||||
Ratios/Supplemental data: | ||||||||
Net assets, end of period (000s) | $ | 38,285 | $ | 32,084 | ||||
Ratio of expenses to average net assetse | 0.39 | % | 0.39 | % | ||||
Ratio of net investment income to average net assetse | 1.37 | % | 1.25 | % | ||||
Portfolio turnover ratef | 19 | % | 11 | % |
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.
40 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Global Metals & Mining Producers ETF |
Year ended Aug. 31, 2013 | Period from to Aug. 31, 2012 | |||||||
Net asset value, beginning of period | $ | 19.00 | $ | 24.76 | ||||
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|
| |||||
Income from investment operations: | ||||||||
Net investment incomeb | 0.50 | 0.37 | ||||||
Net realized and unrealized lossc | (1.00 | ) | (6.00 | ) | ||||
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|
|
| |||||
Total from investment operations | (0.50 | ) | (5.63 | ) | ||||
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|
| |||||
Less distributions from: | ||||||||
Net investment income | (0.39 | ) | (0.13 | ) | ||||
|
|
|
| |||||
Total distributions | (0.39 | ) | (0.13 | ) | ||||
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|
| |||||
Net asset value, end of period | $ | 18.11 | $ | 19.00 | ||||
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|
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| |||||
Total return | (2.68 | )% | (22.76 | )%d | ||||
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| |||||
Ratios/Supplemental data: | ||||||||
Net assets, end of period (000s) | $ | 222,808 | $ | 123,524 | ||||
Ratio of expenses to average net assetse | 0.39 | % | 0.39 | % | ||||
Ratio of net investment income to average net assetse | 2.51 | % | 2.98 | % | ||||
Portfolio turnover ratef | 11 | % | 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 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 year ended August 31, 2013 and the period ended August 31, 2012 were 7% and 1% respectively. See Note 4. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 41 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Global Silver Miners ETF |
Year ended Aug. 31, 2013 | Period from to Aug. 31, 2012 | |||||||
Net asset value, beginning of period | $ | 20.94 | $ | 24.87 | ||||
|
|
|
| |||||
Income from investment operations: | ||||||||
Net investment incomeb | 0.16 | 0.11 | ||||||
Net realized and unrealized lossc | (6.90 | ) | (3.90 | ) | ||||
|
|
|
| |||||
Total from investment operations | (6.74 | ) | (3.79 | ) | ||||
|
|
|
| |||||
Less distributions from: | ||||||||
Net investment income | (0.28 | ) | (0.14 | ) | ||||
|
|
|
| |||||
Total distributions | (0.28 | ) | (0.14 | ) | ||||
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|
|
| |||||
Net asset value, end of period | $ | 13.92 | $ | 20.94 | ||||
|
|
|
| |||||
Total return | (32.49 | )% | (15.18 | )%d | ||||
|
|
|
| |||||
Ratios/Supplemental data: | ||||||||
Net assets, end of period (000s) | $ | 6,959 | $ | 2,094 | ||||
Ratio of expenses to average net assetse | 0.39 | % | 0.39 | % | ||||
Ratio of net investment income to average net assetse | 1.03 | % | 0.86 | % | ||||
Portfolio turnover ratef | 13 | % | 9 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout each period. |
c | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
d | Not annualized. |
e | Annualized for periods of less than one year. |
f | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
42 | 2013 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 ETF | Former Name a | Diversification Classification | ||||
MSCI Global Agriculture Producers | iShares MSCI Global Agriculture Producers Fund | Non-diversified | ||||
MSCI Global Energy Producers | iShares MSCI Global Energy Producers Fund | Non-diversified | ||||
MSCI Global Gold Miners | iShares MSCI Global Gold Miners Fund | Non-diversified | ||||
MSCI Global Metals & Mining Producers | iShares MSCI Global Select Metals & Mining Producers Fund | Non-diversified | ||||
MSCI Global Silver Miners | iShares MSCI Global Silver Miners Fund | Non-diversified |
a | The Funds changed their names effective July 1, 2013. |
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.
Non-diversified funds generally hold securities of fewer issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers.
Each Fund invests in securities of non-U.S. issuers that trade in non-U.S. markets. This involves 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. These risks are heightened for investments in emerging market and frontier market countries.
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 | 43 |
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 and, for financial reporting purposes, as of the report date should the reporting period end on a day that the Fund’s listing exchange is not 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 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, reviews of 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 is not necessarily an indication of the risk associated with investing in the 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; |
44 | 2013 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 Global Valuation Committee’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 Funds’ investments according to the fair value hierarchy as of August 31, 2013. The breakdown of each Fund’s investments into major categories is disclosed in its respective schedule of investments.
iShares ETF and | Investments | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
MSCI Global Agriculture Producers | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 35,112,289 | $ | — | $ | 0 | a | $ | 35,112,289 | |||||||
Investment Companies | 230,532 | — | — | 230,532 | ||||||||||||
Preferred Stocks | 252,678 | — | — | 252,678 | ||||||||||||
Rights | — | 41 | — | 41 | ||||||||||||
Money Market Funds | 583,691 | — | — | 583,691 | ||||||||||||
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| |||||||||
$ | 36,179,190 | $ | 41 | $ | 0 | a | $ | 36,179,231 | ||||||||
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MSCI Global Energy Producers | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 4,712,392 | $ | — | $ | — | $ | 4,712,392 | ||||||||
Preferred Stocks | 66,598 | — | — | 66,598 | ||||||||||||
Money Market Funds | 12,247 | — | — | 12,247 | ||||||||||||
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| |||||||||
$ | 4,791,237 | $ | — | $ | — | $ | 4,791,237 | |||||||||
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MSCI Global Gold Miners | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 38,230,561 | $ | — | $ | — | $ | 38,230,561 | ||||||||
Money Market Funds | 621,485 | — | — | 621,485 | ||||||||||||
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| |||||||||
$ | 38,852,046 | $ | — | $ | — | $ | 38,852,046 | |||||||||
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MSCI Global Metals & Mining Producers | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 210,434,167 | $ | — | $ | 0 | a | $ | 210,434,167 | |||||||
Preferred Stocks | 11,167,921 | — | — | 11,167,921 | ||||||||||||
Money Market Funds | 4,184,137 | — | — | 4,184,137 | ||||||||||||
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| |||||||||
$ | 225,786,225 | $ | — | $ | 0 | a | $ | 225,786,225 | ||||||||
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| |||||||||
NOTESTO FINANCIAL STATEMENTS | 45 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
iShares ETF and | Investments | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
MSCI Global Silver Miners | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 6,941,403 | $ | — | $ | — | $ | 6,941,403 | ||||||||
Money Market Funds | 546,292 | — | — | 546,292 | ||||||||||||
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| |||||||||
$ | 7,487,695 | $ | — | $ | — | $ | 7,487,695 | |||||||||
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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, 2013 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, stock dividends, capital gains on investments, or certain foreign currency transactions. 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 stock dividends are presented as “other foreign taxes,” and foreign taxes on capital gains from sales of investments and foreign taxes on foreign currency transactions are included in their respective net realized gain (loss) categories. Foreign taxes payable as of August 31, 2013, 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.
46 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
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.
RECENT ACCOUNTING STANDARD
In December 2011, the Financial Accounting Standards Board issued guidance to enhance current disclosure requirements on offsetting of certain assets and liabilities and enable financial statement users to compare financial statements prepared under U.S. GAAP and International Financial Reporting Standards (IFRS). The new disclosures are required for investments and derivative financial instruments subject to master netting agreements or similar agreements and require an entity to disclose both gross and net information about such investments and transactions eligible for offset in the statement of assets and liabilities. The scope of the disclosure requirements for offsetting will be limited to certain derivative instruments and securities lending transactions. In addition, the standard requires disclosure of collateral received and posted in connection with master netting agreements or similar agreements. The guidance is effective for financial statements for fiscal years beginning after January 1, 2013, and interim periods within those fiscal years. Management is evaluating the impact of this guidance on the Funds’ financial statements and disclosures.
2. | INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES |
Pursuant to an Investment Advisory Agreement with the Trust, 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 Metals & Mining Producers ETFs 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 Metals & Mining Producers ETF did not hold any iShares funds during the year ended August 31, 2013.
The U.S. Securities and Exchange Commission has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (“BTC”), an affiliate of BFA, to serve as securities lending agent for the Funds, subject to applicable conditions. 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 Funds retain a portion of securities lending income and remit a remaining portion to BTC as compensation for its services as securities lending agent. The Funds benefit from a borrower default indemnity provided by BlackRock. As securities lending agent, BTC bears all operational costs directly related to securities lending as well as the cost of borrower default indemnification. 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 | 47 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
For the year ended August 31, 2013, each Fund retained 65% of securities lending income and paid a fee to BTC equal to 35% of such income in the amounts as follows:
iShares ETF | Securities Lending Agent Fees | |||
MSCI Global Agriculture Producers | $ | 1,359 | ||
MSCI Global Energy Producers | 85 | |||
MSCI Global Gold Miners | 3,336 | |||
MSCI Global Metals & Mining Producers | 42,635 | |||
MSCI Global Silver Miners | 418 |
BlackRock Investments, LLC, an affiliate of BFA, is the distributor for each Fund. Pursuant to the 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 Metals & Mining Producers ETFs, 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 year ended August 31, 2013, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:
iShares ETF Name of Affiliated Issuer | Shares Held at Beginning of Year | Shares Purchased | Shares Sold | Shares Held at End of Year | Value at of Year | Dividend Income | Net Realized Gain (Loss) | |||||||||||||||||||||
MSCI Global Agriculture Producers | ||||||||||||||||||||||||||||
iShares India 50 ETF | 3,572 | 9,692 | (1,073 | ) | 12,191 | $ | 230,532 | $ | 1,037 | $ | (2,031 | ) | ||||||||||||||||
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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, 2013 were as follows:
iShares ETF | Purchases | Sales | ||||||
MSCI Global Agriculture Producers | $ | 3,257,193 | $ | 1,316,399 | ||||
MSCI Global Energy Producers | 274,984 | 281,826 | ||||||
MSCI Global Gold Miners | 6,290,090 | 6,079,534 | ||||||
MSCI Global Metals & Mining Producers | 40,598,425 | 23,137,877 | ||||||
MSCI Global Silver Miners | 412,188 | 422,826 |
48 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
In-kind transactions (see Note 4) for the year ended August 31, 2013 were as follows:
iShares ETF | In-kind Purchases | In-kind Sales | ||||||
MSCI Global Agriculture Producers | $ | 27,150,588 | $ | — | ||||
MSCI Global Gold Miners | 33,221,985 | 12,389,776 | ||||||
MSCI Global Metals & Mining Producers | 145,954,750 | 52,895,722 | ||||||
MSCI Global Silver Miners | 5,801,357 | — |
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 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 may also 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 market value of the loaned securities is determined at the close of each business day of the Funds and any additional required collateral is delivered to the Funds on the next business day. 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.
As of August 31, 2013, any securities on loan were collateralized by cash. The cash collateral received was invested in money market funds managed by BFA. The value of any securities on loan as of August 31, 2013 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.
NOTESTO FINANCIAL STATEMENTS | 49 |
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Notes to Financial Statements (Continued)
iSHARES®, INC.
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. To mitigate these risks, the Funds benefit from a borrower default indemnity provided by BlackRock. BlackRock’s indemnity allows for full replacement of securities lent. Each Fund could suffer a loss if the value of the investments purchased with cash collateral falls below the value of the cash collateral received.
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, 2013, attributable to passive foreign investment companies, foreign currency transactions and realized gains (losses) from in-kind redemptions, were reclassified to the following accounts:
iShares ETF | Paid-in Capital | Undistributed Income/Distributions | Undistributed Net Realized Gain/Accumulated Net Realized Loss | |||||||||
MSCI Global Agriculture Producers | $ | — | $ | 754 | $ | (754 | ) | |||||
MSCI Global Energy Producers | — | (105 | ) | 105 | ||||||||
MSCI Global Gold Miners | 248,053 | (3,453 | ) | (244,600 | ) | |||||||
MSCI Global Metals & Mining Producers | 5,420,409 | 32,180 | (5,452,589 | ) | ||||||||
MSCI Global Silver Miners | — | 17 | (17 | ) |
The tax character of distributions paid during the periods ended August 31, 2013 and August 31, 2012 was as follows:
iShares ETF | 2013 | 2012 | ||||||
MSCI Global Agriculture Producers | ||||||||
Ordinary income | $ | 289,367 | $ | 39,624 | ||||
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MSCI Global Energy Producers | ||||||||
Ordinary income | $ | 125,608 | $ | 63,057 | ||||
|
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| |||||
MSCI Global Gold Miners | ||||||||
Ordinary income | $ | 426,169 | $ | 135,773 | ||||
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MSCI Global Metals & Mining Producers | ||||||||
Ordinary income | $ | 4,641,648 | $ | 25,905 | ||||
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MSCI Global Silver Miners | ||||||||
Ordinary income | $ | 44,671 | $ | 14,066 | ||||
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50 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
As of August 31, 2013, the tax components of accumulated net earnings (losses) were as follows:
iShares ETF | Undistributed Ordinary Income | Capital Loss | Net Unrealized Gains (Losses) a | Qualified Late-Year Losses b | Total | |||||||||||||||
MSCI Global Agriculture Producers | $ | 116,739 | $ | (18,538 | ) | $ | (3,455,297 | ) | $ | (69,886 | ) | $ | (3,426,982 | ) | ||||||
MSCI Global Energy Producers | 24,259 | — | (210,315 | ) | (42,844 | ) | (228,900 | ) | ||||||||||||
MSCI Global Gold Miners | 48,755 | (319,826 | ) | (17,956,945 | ) | (1,530,047 | ) | (19,758,063 | ) | |||||||||||
MSCI Global Metals & Mining Producers | 1,144,841 | (115,703 | ) | (16,586,621 | ) | (1,346,715 | ) | (16,904,198 | ) | |||||||||||
MSCI Global Silver Miners | 40,792 | (83,082 | ) | (1,313,509 | ) | (18,367 | ) | (1,374,166 | ) |
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, 2014. |
As of August 31, 2013, the Funds had non-expiring capital loss carryforwards available to offset future realized capital gains as follows:
iShares ETF | Non- Expiring | |||
MSCI Global Agriculture Producers | $ | 18,538 | ||
MSCI Global Gold Miners | 319,826 | |||
MSCI Global Metals & Mining Producers | 115,703 | |||
MSCI Global Silver Miners | 83,082 |
For the year ended August 31, 2013, the Funds utilized their capital loss carryforwards as follows:
iShares ETF | Utilized | |||
MSCI Global Agriculture Producers | $ | 1,803 | ||
MSCI Global Energy Producers | 20,639 |
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, 2013, gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes were as follows:
iShares ETF | Tax Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation (Depreciation) | ||||||||||||
MSCI Global Agriculture Producers | $ | 39,634,018 | $ | 812,335 | $ | (4,267,122 | ) | $ | (3,454,787 | ) | ||||||
MSCI Global Energy Producers | 5,001,343 | 314,314 | (524,420 | ) | (210,106 | ) | ||||||||||
MSCI Global Gold Miners | 56,808,310 | 155,724 | (18,111,988 | ) | (17,956,264 | ) | ||||||||||
MSCI Global Metals & Mining Producers | 242,366,592 | 7,988,059 | (24,568,426 | ) | (16,580,367 | ) | ||||||||||
MSCI Global Silver Miners | 8,801,383 | 71,001 | (1,384,689 | ) | (1,313,688 | ) |
NOTESTO FINANCIAL STATEMENTS | 51 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
Management has reviewed the tax positions as of August 31, 2013, inclusive of the open tax return years, 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.
52 | 2013 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 Global Agriculture Producers ETF, iShares MSCI Global Energy Producers ETF, iShares MSCI Global Gold Miners ETF, iShares MSCI Global Metals & Mining Producers ETF and iShares MSCI Global Silver Miners ETF (the “Funds”) at August 31, 2013, 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, 2013 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
October 23, 2013
REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 53 |
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iSHARES®, INC.
For the fiscal year ended August 31, 2013, 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 ETF | Foreign Source Income Earned | Foreign Taxes Paid | ||||||
MSCI Global Agriculture Producers | $ | 373,380 | $ | 50,965 | ||||
MSCI Global Energy Producers | 101,186 | 10,302 | ||||||
MSCI Global Gold Miners | 507,461 | 58,817 | ||||||
MSCI Global Metals & Mining Producers | 5,834,875 | 307,965 | ||||||
MSCI Global Silver Miners | 47,363 | 3,933 |
For corporate shareholders, the following percentages of the income dividends paid by the Funds during the fiscal year ended August 31, 2013 qualified for the dividends-received deduction:
iShares ETF | Dividends- Received Deduction | |||
MSCI Global Agriculture Producers | 33.24 | % | ||
MSCI Global Energy Producers | 41.40 | |||
MSCI Global Gold Miners | 23.12 | |||
MSCI Global Metals & Mining Producers | 18.94 | |||
MSCI Global Silver Miners | 1.94 |
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, 2013:
iShares ETF | Qualified Dividend Income | |||
MSCI Global Agriculture Producers | $ | 340,332 | ||
MSCI Global Energy Producers | 135,910 | |||
MSCI Global Gold Miners | 484,986 | |||
MSCI Global Metals & Mining Producers | 4,949,613 | |||
MSCI Global Silver Miners | 48,203 |
In February 2014, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2013. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.
54 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Board Review and Approval of Investment Advisory Contract
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 and approve 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 March 7, 2013, April 23, 2013, and May 3, 2013, 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 16, 2013, management presented preliminary 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 5, 2013, to discuss the additional requests. At a meeting held on June 10-11, 2013, the Board, including the Independent Directors, reviewed the 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 the supplemental information management provided at the request of the Independent Directors. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information 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 reached 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 the size, sponsor, inception date, or other differentiating factors included in Lipper’s proprietary selection methodology, 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, and/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 provided in the Lipper Report may or may not provide meaningful direct comparisons to the Funds.
The Board also noted that the investment advisory fee rates 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, 2012, 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
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 55 |
Table of Contents
Board Review and Approval of Investment Advisory Contract (Continued)
iSHARES®, INC.
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 may include funds that are not exchange traded funds or index funds, and that may have different investment objectives and/or benchmarks from the Funds. In addition, the Board noted that each Fund seeks to track its own 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, including detailed information on certain specific iShares funds requested by the Board, was also considered.
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 fee rate and expense level 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, including information about recent and proposed enhancements to the iShares business, including with respect to shareholder servicing and support, 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 during 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 acknowledged that resources to support the iShares funds and their shareholders have been added or enhanced since BlackRock’s acquisition of BFA in December 2009, 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 detailed presentations regarding BFA’s investment and risk management processes and strategies provided at the June 10-11, 2013 meeting and throughout the previous year, 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 the Funds and Profits Realized by BFA and its Affiliates — The Board reviewed information about the profitability to BlackRock 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 analyses 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)
56 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Board Review and Approval of Investment Advisory Contract (Continued)
iSHARES®, INC.
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 relatively low fee rates established at inception, 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 BlackRock’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 did not provide for any breakpoints in the Funds’ investment advisory fee rates as the assets of the Funds increase. However, the Board noted that should material economies of scale exist in the future, a breakpoint structure for the Funds may be appropriate, and 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 rates incorporate potential economies of scale 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 any of the Funds. 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 to the Funds, as well as other significant differences in the approach of BFA and its affiliates to the Funds, on one hand, and to the 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 and challenges 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 the “fallout” benefits or 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 | 57 |
Table of Contents
Board Review and Approval of Investment Advisory Contract (Continued)
iSHARES®, INC.
Based on the considerations described above, the Board determined that the investment advisory fee rate under each Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that it is in the best interest of each Fund and its shareholders to approve the continuance of the Advisory Contract for the coming year.
58 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited)
iSHARES®, INC.
Section 19(a) Notices
The amounts and sources of distributions reported are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon each Fund’s investment experience during the year and may be subject to changes based on the tax regulations. Shareholders will receive a Form 1099-DIV each calendar year that will inform them how to report distributions for federal income tax purposes.
Total Cumulative Distributions for the Fiscal Year | % Breakdown of the Total Cumulative Distributions for the Fiscal Year | |||||||||||||||||||||||||||||||
iShares ETF | 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 | ||||||||||||||||||||||||
MSCI Global Agriculture Producers | $ | 0.323683 | $ | — | $ | — | $ | 0.323683 | 100 | % | — | % | — | % | 100 | % | ||||||||||||||||
MSCI Global Energy Producers | 0.628042 | — | — | 0.628042 | 100 | — | — | 100 | ||||||||||||||||||||||||
MSCI Global Gold Miners | 0.190242 | — | — | 0.190242 | 100 | — | — | 100 | ||||||||||||||||||||||||
MSCI Global Metals & Mining Producers | 0.379103 | — | 0.006400 | 0.385503 | 98 | — | 2 | 100 | ||||||||||||||||||||||||
MSCI Global Silver Miners | 0.255603 | — | 0.022500 | 0.278103 | 92 | — | 8 | 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 market value of its portfolio holdings. The Market Price of each Fund will fluctuate in accordance with changes in its NAV, as well as market supply and demand.
Premiums or discounts are the differences (expressed as a percentage) between the NAV and Market Price of a Fund on a given day, generally at the time NAV is calculated. A premium is the amount that a Fund is trading above the reported NAV, expressed as a percentage of the NAV. A discount is the amount that a Fund is trading below the reported NAV, expressed as a percentage of the NAV.
The following information shows the frequency distributions of premiums and discounts for each of the 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.
SUPPLEMENTAL INFORMATION | 59 |
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 Global Agriculture Producers ETF
Period Covered: April 1, 2012 through June 30, 2013
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 1.0% and Less than 1.5% | 8 | 2.56 | % | |||||
Greater than 0.5% and Less than 1.0% | 131 | 41.99 | ||||||
Between 0.5% and –0.5% | 162 | 51.92 | ||||||
Less than –0.5% and Greater than –1.0% | 10 | 3.21 | ||||||
Less than –1.0% and Greater than –1.5% | 1 | 0.32 | ||||||
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312 | 100.00 | % | ||||||
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iShares MSCI Global Energy Producers ETF
Period Covered: April 1, 2012 through June 30, 2013
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 0.5% and Less than 1.0% | 7 | 2.24 | % | |||||
Between 0.5% and –0.5% | 238 | 76.29 | ||||||
Less than –0.5% and Greater than –1.0% | 57 | 18.27 | ||||||
Less than –1.0% and Greater than –1.5% | 9 | 2.88 | ||||||
Less than –1.5% and Greater than –2.0% | 1 | 0.32 | ||||||
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| |||||
312 | 100.00 | % | ||||||
|
|
|
|
iShares MSCI Global Gold Miners ETF
Period Covered: April 1, 2012 through June 30, 2013
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 2.5% | 1 | 0.32 | % | |||||
Greater than 2.0% and Less than 2.5% | 2 | 0.64 | ||||||
Greater than 1.5% and Less than 2.0% | 2 | 0.64 | ||||||
Greater than 1.0% and Less than 1.5% | 8 | 2.56 | ||||||
Greater than 0.5% and Less than 1.0% | 66 | 21.16 | ||||||
Between 0.5% and –0.5% | 223 | 71.48 | ||||||
Less than –0.5% and Greater than –1.0% | 6 | 1.92 | ||||||
Less than –1.0% and Greater than –1.5% | 3 | 0.96 | ||||||
Less than –1.5% | 1 | 0.32 | ||||||
|
|
|
| |||||
312 | 100.00 | % | ||||||
|
|
|
|
60 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Global Metals & Mining Producers ETF
Period Covered: April 1, 2012 through June 30, 2013
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 4.5% | 4 | 1.28 | % | |||||
Greater than 4.0% and Less than 4.5% | 1 | 0.32 | ||||||
Greater than 3.5% and Less than 4.0% | 1 | 0.32 | ||||||
Greater than 3.0% and Less than 3.5% | 1 | 0.32 | ||||||
Greater than 2.5% and Less than 3.0% | 5 | 1.60 | ||||||
Greater than 2.0% and Less than 2.5% | 6 | 1.92 | ||||||
Greater than 1.5% and Less than 2.0% | 15 | 4.81 | ||||||
Greater than 1.0% and Less than 1.5% | 60 | 19.23 | ||||||
Greater than 0.5% and Less than 1.0% | 71 | 22.76 | ||||||
Between 0.5% and –0.5% | 123 | 39.43 | ||||||
Less than –0.5% and Greater than –1.0% | 20 | 6.41 | ||||||
Less than –1.0% and Greater than –1.5% | 5 | 1.60 | ||||||
|
|
|
| |||||
312 | 100.00 | % | ||||||
|
|
|
|
iShares MSCI Global Silver Miners ETF
Period Covered: April 1, 2012 through June 30, 2013
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 2.0% | 1 | 0.32 | % | |||||
Greater than 1.5% and Less than 2.0% | 4 | 1.28 | ||||||
Greater than 1.0% and Less than 1.5% | 14 | 4.49 | ||||||
Greater than 0.5% and Less than 1.0% | 39 | 12.49 | ||||||
Between 0.5% and –0.5% | 114 | 36.55 | ||||||
Less than –0.5% and Greater than –1.0% | 66 | 21.16 | ||||||
Less than –1.0% and Greater than –1.5% | 36 | 11.54 | ||||||
Less than –1.5% and Greater than –2.0% | 27 | 8.65 | ||||||
Less than –2.0% and Greater than –2.5% | 8 | 2.56 | ||||||
Less than –2.5% and Greater than –3.0% | 3 | 0.96 | ||||||
|
|
|
| |||||
312 | 100.00 | % | ||||||
|
|
|
|
SUPPLEMENTAL INFORMATION | 61 |
Table of Contents
Director and Officer Information
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 of the Company (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 ETF, Inc. and a Trustee of iShares U.S. ETF Trust and, as a result, oversees a total of 298 funds (as of August 31, 2013) 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 (56) | Director (since 2009). | President and Director, BlackRock, Inc. (since 2006); 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 2006); Trustee of iShares Trust (since 2009); Director of iShares MSCI Russia Capped ETF, Inc. (since 2010); 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). | Trustee of iShares Trust (since 2010); Director of iShares MSCI Russia Capped ETF, 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 Company due to his affiliations with BlackRock, Inc. |
b | Michael Latham is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BlackRock, Inc. and its affiliates. |
62 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Director and Officer Information (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 (58) | 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 Paine Webber Inc.) (2003-2005) 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Independent Chairman of iShares, Trust, iShares MSCI Russia Capped ETF, Inc. and iShares U.S. ETF Trust (since 2012). | |||
Cecilia H. Herbert (64) | Director (since 2005); Nominating and Governance Committee Chair and Equity Plus Committee Chair (since 2012). | Trustee and Member (since 2011) of the Investment Committee, WNET, the New York public broadcasting company; Director (since 1998) and President (2007-2011) of the Board of Directors, Catholic Charities CYO; Trustee (2002-2011) and Chair of the Finance and Investment Committee (2006-2010), the Thacher School; 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of Forward Funds (34 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 ETF, 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 (2 portfolios) (since 2002). | |||
John E. Kerrigan (58) | 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). |
DIRECTORAND OFFICER INFORMATION | 63 |
Table of Contents
Director and Officer Information (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 (52) | 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). | |||
George G.C. Parker (74) | 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 2000); Director of iShares MSCI Russia Capped ETF, 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 (49) | 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 (2007-2008). | Trustee of iShares Trust (since 2011); Director of iShares MSCI Russia Capped ETF, Inc. (since 2011); Trustee of iShares U.S. ETF Trust (since 2011). |
64 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Director and Officer Information (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 of Legal & Compliance, BlackRock (since 2006); Director of Legal & Compliance, BlackRock (2004-2006). | ||
Eilleen M. Clavere (61) | Secretary (since 2007). | Director of Global Fund Administration, BlackRock (since 2009); Director of Legal Administration of Intermediary Investor Business, BGI (2006-2009); Legal Counsel and Vice President of Atlas Funds, Atlas Advisers, Inc. and Atlas Securities, Inc. (2005-2006); Counsel of Kirkpatrick & Lockhart LLP (2001-2005). | ||
Jack Gee (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). | ||
Scott Radell (44) | Executive Vice President (since 2012). | Managing Director, BlackRock (since 2009); Head of Portfolio Solutions, BlackRock (since 2009); Head of Portfolio Solutions, BGI (2007-2009); Credit Portfolio Manager, BGI (2005-2007); Credit Research Analyst, BGI (2003-2005). | ||
Amy Schioldager (50) | Executive Vice President (since 2007). | Senior Managing Director, BlackRock (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008); Head of Domestic Equity Portfolio Management, BGI (2001-2006). | ||
Ira P. Shapiro (50) | Vice President (since 2007). | Managing Director, BlackRock (since 2009); Head of Strategic Product Initiatives for iShares (since 2012); Chief Legal Officer, Exchange-Traded Fund Complex (2007-2012); Associate General Counsel, BGI (2004-2009). |
DIRECTORAND OFFICER INFORMATION | 65 |
Table of Contents
Notes:
66 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
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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.
©2013 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc. or its subsidiaries. All other marks are the property of their respective owners.
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iS-AR-812-0813
Table of Contents
AUGUST 31, 2013
2013 ANNUAL REPORT
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iShares, Inc.
Ø | iShares Core MSCI Emerging Markets ETF | IEMG | NYSE Arca |
Table of Contents
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Table of Contents
Management’s Discussion of Fund Performance
iSHARES® CORE MSCI EMERGING MARKETS ETF
EMERGING MARKETS OVERVIEW
Stocks in emerging markets posted negative returns for the period from October 18, 2012 to August 31, 2013 (the “reporting period”). Emerging markets stocks experienced significant volatility during the reporting period, including a rally early in the reporting period, a sharp decline over the subsequent six months, and a modest recovery during the final two months of the reporting period.
Emerging markets stocks advanced in late 2012 amid improving global economic conditions. In the fall of 2012, central banks around the world took aggressive actions to stimulate economic growth. Most notably, central banks in the U.S. and U.K. increased their quantitative easing activity, while the Bank of Japan introduced quantitative easing measures for the first time. In addition, a temporary resolution to the “fiscal cliff” in the U.S. (the expiration of certain federal tax cuts and the implementation of automatic U.S. government spending reductions set to take place in early 2013) and positive signs in Europe regarding its sovereign debt crisis helped lift investor confidence. As a result, emerging markets stocks advanced by approximately 7% from the beginning of the reporting period through the end of 2012.
Market conditions changed in early 2013 as evidence of a slowdown in several major emerging economies appeared, driven in part by lower exports to developed countries. In particular, the four largest emerging markets — China, India, Russia and Brazil — all experienced weaker economic growth during the reporting period. The slowdown in emerging economies led to a sharp reversal in emerging markets stocks; from their peak in early January 2013 through their trough in late June 2013, emerging markets stocks fell by more than 17%.
Although they remained volatile, emerging markets stocks rebounded over the final two months of the reporting period. Promising economic news in Europe and Japan led to optimism regarding a recovery in exports from emerging markets to developed economies. Nonetheless, emerging markets stocks declined by approximately 6% for the full reporting period.
Emerging markets in Asia posted the best returns during the reporting period. Despite a continued slowdown in the Chinese economy, China’s stock market generated a positive return thanks to a robust property market and better economic data late in the reporting period. Other positive performers in this region included the Philippines and Taiwan. On the downside, stock markets in India and Indonesia produced the most significant declines as both economies slowed markedly during the reporting period.
Emerging markets in Latin America faced the largest declines for the reporting period. Brazil, the largest market in the region, declined by approximately 20%. The Brazilian economy nearly slipped into recession in late 2012, and although it recovered somewhat in the first half of 2013, its growth rate for the 12 months ended June 30, 2013 was just a third of its peak growth rate three years earlier. Chile, whose economy slowed as global demand for commodities eased, and Peru posted the largest declines among Latin American stock markets. Mexico and Colombia held up the best, though both countries still posted losses for the reporting period.
Eastern European stock markets generally declined for the reporting period. Turkey and the Czech Republic declined the most, falling by more than 15%, while Poland was the only market in the region to produce a positive return. Russia, the largest market in the region, declined by about 9% for the reporting period.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 5 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® CORE MSCI EMERGING MARKETS ETF
Performance as of August 31, 2013
Cumulative Total Returns | ||||||||||||
NAV | MARKET | INDEX | ||||||||||
Since Inception | (5.75)% | (6.40)% | (5.82)% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was 10/18/12. The first day of secondary market trading was 10/22/12.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 8 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Beginning Account Value (3/1/13) | Ending Account Value (8/31/13) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 898.50 | $ | 0.24 | $ | 1,000.00 | $ | 1,025.00 | $ | 0.26 | 0.05% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 8 for more information. |
6 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
The iShares Core MSCI Emerging Markets ETF (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Emerging Markets Investable Market IndexSM (the “Index”). The Index is designed to measure large-, mid- and small-capitalization 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 period from October 18, 2012 (inception date of the Fund) through August 31, 2013, the total return for the Fund was -5.75%, net of fees, while the total return for the Index was -5.82%.
As represented by the Index, emerging markets stocks declined by approximately 6% for the reporting period. Although just 6 of the 21 countries represented in the Index generated positive returns for the reporting period, they included two of the three largest components of the Index — China and Taiwan — which together comprised approximately 30% of the Index as of the end of the reporting period. Other positive performers included the Philippines, Poland, Hong Kong and Malaysia.
Among the declining components of the Index, Peru and Chile fell the most for the reporting period. Both the Chilean and Peruvian economies slowed as global demand for commodities weakened. India, which experienced a meaningful slowdown in its economy, and the Czech Republic, which remained mired in recession throughout the reporting period, each declined by more than 20%. Other notable decliners in the Index included Brazil, the fourth-largest component within the Index, and South Africa, the fifth-largest country weighting in the Index. The second-largest country weighting in the Index, South Korea, declined slightly for the reporting period.
PORTFOLIO ALLOCATION
As of 8/31/13
Sector | Percentage of Net Assets |
Financial | 24.94 | % | ||
Consumer Non-Cyclical | 10.83 | |||
Communications | 10.64 | |||
Technology | 10.53 | |||
Energy | 9.89 | |||
Consumer Cyclical | 9.60 | |||
Basic Materials | 8.91 | |||
Industrial | 8.63 | |||
Utilities | 3.26 | |||
Diversified | 2.18 | |||
Short-Term and Other Net Assets | 0.59 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 8/31/13
Security | Percentage of Net Assets |
Samsung Electronics Co. Ltd. (South Korea) | 3.42 | % | ||
Taiwan Semiconductor Manufacturing Co. Ltd. (Taiwan) | 2.08 | |||
China Mobile Ltd. (China) | 1.65 | |||
China Construction Bank Corp. Class H (China) | 1.34 | |||
Industrial and Commercial Bank of China Ltd. Class H (China) | 1.22 | |||
Tencent Holdings Ltd. (China) | 1.20 | |||
Gazprom OAO (Russia) | 1.17 | |||
CNOOC Ltd. (China) | 0.89 | |||
America Movil SAB de CV Series L (Mexico) | 0.89 | |||
Hyundai Motor Co. (South Korea) | 0.87 | |||
|
| |||
TOTAL | 14.73 | % | ||
|
|
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 7 |
Table of Contents
Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.iShares.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are redeemed or sold in the market. Performance for certain funds may reflect a waiver of a portion of investment management fees. Without such waiver, performance would have been lower.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The 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 a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of a fund may not have traded in the secondary market until after the fund’s inception, for the period from inception to the first day of secondary trading, 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 at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. 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.
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 expense example, which is based on an investment of $1,000 invested on March 1, 2013 and held through August 31, 2013, 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.
Actual Expenses — The table provides information about actual account values and actual expenses. To estimate the expenses that you paid on your account 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 for your Fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Example for Comparison Purposes — The table also 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. 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 hypothetical examples are 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.
8 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments
iSHARES® CORE MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
COMMON STOCKS — 93.34% |
| |||||||
BRAZIL — 5.57% | ||||||||
Abril Educacao SA Units | 20,400 | $ | 283,190 | |||||
Aliansce Shopping Centers SA | 46,200 | 361,095 | ||||||
ALL – America Latina Logistica SA | 191,900 | 745,094 | ||||||
Anhanguera Educacional Participacoes SA | 185,200 | 1,079,009 | ||||||
Arezzo Industria e Comercio SA | 21,700 | 303,062 | ||||||
Arteris SA | 59,000 | 534,107 | ||||||
Autometal SA | 18,500 | 153,233 | ||||||
B2W Companhia Global do Varejoa | 30,600 | 175,063 | ||||||
Banco ABC Brasil SAa | 662 | 3,328 | ||||||
Banco Bradesco SA | 310,160 | 4,122,941 | ||||||
Banco do Brasil SA | 265,900 | 2,578,241 | ||||||
Banco Santander (Brasil) SA Units | 437,300 | 2,509,159 | ||||||
BB Seguridade Participacoes SA | 279,600 | 2,262,958 | ||||||
BM&F Bovespa SA | 877,200 | 4,313,675 | ||||||
BR Malls Participacoes SA | 190,100 | 1,447,421 | ||||||
BR Properties SA | 94,700 | 723,038 | ||||||
Brasil Brokers Participacoes SA | 67,900 | 149,956 | ||||||
Brasil Insurance Participacoes e Administracao SA | 32,900 | 264,340 | ||||||
Brazil Pharma SAa | 58,200 | 208,102 | ||||||
BRF – Brasil Foods SA | 306,400 | 7,114,791 | ||||||
Brookfield Incorporacoes SAa | 201,400 | 144,027 | ||||||
CCR SA | 410,800 | 2,998,225 | ||||||
Centrais Eletricas Brasileiras SA | 119,300 | 248,416 | ||||||
CETIP SA – Mercados Organizados | 89,838 | 884,322 | ||||||
Cielo SA | 165,780 | 4,073,368 | ||||||
Companhia de Bebidas das Americas | 67,800 | 2,386,633 | ||||||
Companhia de Locacao das Americas | 47,800 | 167,899 | ||||||
Companhia de Saneamento Basico do Estado de Sao Paulo | 163,200 | 1,344,897 |
Security | Shares | Value | ||||||
Companhia de Saneamento de Minas Gerais SA | 27,200 | $ | 328,958 | |||||
Companhia Hering SA | 64,600 | 867,149 | ||||||
Companhia Siderurgica Nacional SA | 336,100 | 1,190,460 | ||||||
Cosan SA Industria e Comercio | 61,200 | 1,070,459 | ||||||
CPFL Energia SA | 109,400 | 897,400 | ||||||
Cyrela Brazil Realty SA Empreendimentos e Participacoes | 142,800 | 944,311 | ||||||
Diagnosticos da America SA | 92,000 | 429,194 | ||||||
Duratex SA | 128,190 | 651,411 | ||||||
EcoRodovias Infraestrutura e Logistica SA | 74,200 | 477,562 | ||||||
EDP Energias do Brasil SA | 112,600 | 506,823 | ||||||
Embraer SA | 278,300 | 2,292,240 | ||||||
Equatorial Energia SA | 79,676 | 672,011 | ||||||
Estacio Participacoes SA | 127,200 | 939,606 | ||||||
Eternit SA | 55,200 | 197,375 | ||||||
Even Construtora e Incorporadora SA | 86,800 | 292,473 | ||||||
EZ TEC Empreendimentos e Participacoes SA | 26,500 | 297,640 | ||||||
Fibria Celulose SAa | 116,400 | 1,350,459 | ||||||
Fleury SA | 28,000 | 217,314 | ||||||
Gafisa SAa | 208,300 | 245,347 | ||||||
Helbor Empreendimentos SA | 66,970 | 236,643 | ||||||
Hypermarcas SA | 162,200 | 1,108,080 | ||||||
Iguatemi Empresa de Shopping Centers SA | 33,900 | 313,730 | ||||||
International Meal Co. Holdings SAa | 26,500 | 181,705 | ||||||
Iochpe-Maxion SA | 33,300 | 392,226 | ||||||
JBS SA | 344,200 | 1,065,671 | ||||||
JHSF Participacoes SA | 50,500 | 139,145 | ||||||
Julio Simoes Logistica SA | 39,400 | 233,695 | ||||||
Kroton Educacional SA | 89,600 | 1,206,125 | ||||||
Light SA | 33,000 | 249,874 | ||||||
LLX Logistica SAa | 204,900 | 123,257 | ||||||
Localiza Rent A Car SA | 64,935 | 850,886 | ||||||
Lojas Americanas SA | 61,200 | 349,869 | ||||||
Lojas Renner SA | 61,200 | 1,477,481 | ||||||
LPS Brasil – Consultoria de Imoveis SA | 32,500 | 207,944 | ||||||
M Dias Branco SA | 20,400 | 782,206 |
CONSOLIDATED SCHEDULEOF INVESTMENTS | 9 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
Magazine Luiza SAa | 30,800 | $ | 74,370 | |||||
Magnesita Refratarios SA | 87,500 | 235,203 | ||||||
Marfrig Alimentos SAa | 112,400 | 289,369 | ||||||
Mills Estruturas e Servicos de Engenharia SA | 42,300 | 526,704 | ||||||
Minerva SAa | 54,000 | 245,331 | ||||||
MMX Mineracao e Metalicos SAa | 120,400 | 109,906 | ||||||
MPX Energia SAa | 78,700 | 162,220 | ||||||
MPX Energia SA Newa | 15,887 | 34,418 | ||||||
MRV Engenharia e Participacoes SA | 157,600 | 552,250 | ||||||
Multiplan Empreendimentos Imobiliarios SA | 40,800 | 822,797 | ||||||
Multiplus SA | 22,600 | 247,752 | ||||||
Natura Cosmeticos SA | 81,600 | 1,536,779 | ||||||
Odontoprev SA | 125,300 | 464,367 | ||||||
OGX Petroleo e Gas Participacoes SAa | 633,200 | 79,909 | ||||||
PDG Realty SA Empreendimentos e Participacoesa | 547,400 | 529,623 | ||||||
Petroleo Brasileiro SA | 1,370,600 | 9,207,674 | ||||||
Porto Seguro SA | 53,500 | 578,616 | ||||||
Qualicorp SAa | 91,500 | 717,851 | ||||||
Raia Drogasil SA | 100,200 | 711,499 | ||||||
Restoque Comercio e Confeccoes de | 52,800 | 134,599 | ||||||
Rossi Residencial SAa | 140,387 | 162,403 | ||||||
Santos Brasil Participacoes SA Units | 22,200 | 214,791 | ||||||
Sao Martinho SA | 27,000 | 307,799 | ||||||
SLC Agricola SA | 26,500 | 217,378 | ||||||
Sonae Sierra Brasil SA | 15,800 | 132,464 | ||||||
Souza Cruz SA | 183,600 | 1,930,843 | ||||||
Sul America SA Units | 61,889 | 364,482 | ||||||
T4F Entretenimento SAa | 34,200 | 109,770 | ||||||
Technos SA | 21,300 | 146,140 | ||||||
Tecnisa SAa | 54,400 | 207,787 | ||||||
Tegma Gestao Logistica SA | 13,300 | 117,491 | ||||||
TIM Participacoes SA | 384,900 | 1,518,746 | ||||||
Totvs SA | 61,200 | 962,847 | ||||||
TPI – Triunfo Participacoes e Investimentos SA | 30,600 | 134,515 | ||||||
Tractebel Energia SA | 81,600 | 1,173,953 |
Security | Shares | Value | ||||||
Transmissora Alianca de Energia Eletrica SA | 49,300 | $ | 456,251 | |||||
Ultrapar Participacoes SA | 153,300 | 3,346,908 | ||||||
UNICASA Industria de Moveis SA | 46,500 | 112,084 | ||||||
Vale SA | 612,000 | 8,861,282 | ||||||
Valid Solucoes e Servicos de Seguranca em Meios de Pagamento e Identificacao SA | 28,300 | 349,286 | ||||||
Vanguarda Agro SAa | 105,829 | 169,170 | ||||||
WEG SA | 102,100 | 1,202,591 | ||||||
|
| |||||||
103,826,537 | ||||||||
CHILE — 1.62% |
| |||||||
Administradora de Fondos de Pensiones Provida SA | 80,341 | 491,558 | ||||||
AES Gener SA | 1,219,104 | 787,932 | ||||||
Aguas Andinas SA Series A | 1,146,007 | 790,926 | ||||||
Banco de Chile | 9,426,927 | 1,347,734 | ||||||
Banco de Credito e Inversiones | 15,174 | 725,515 | ||||||
Banco Santander (Chile) SA | 31,574,100 | 1,766,227 | ||||||
Besalco SA | 160,762 | 163,944 | ||||||
CAP SA | 34,641 | 739,444 | ||||||
Cencosud SA | 532,649 | 2,151,950 | ||||||
Colbun SA | 3,783,792 | 974,669 | ||||||
Compania Cervecerias Unidas SA | 54,397 | 728,263 | ||||||
Compania SudAmericana de Vapores SAa | 2,640,882 | 122,088 | ||||||
CorpBanca SA | 64,849,487 | 616,518 | ||||||
Cruz Blanca Salud SA | 250,920 | 134,727 | ||||||
E.CL SA | 259,371 | 338,799 | ||||||
Empresa Nacional de Electricidad SA | 1,575,288 | 2,149,614 | ||||||
Empresa Nacional de | 54,474 | 863,524 | ||||||
Empresas CMPC SA | 541,986 | 1,600,636 | ||||||
Empresas Copec SA | 217,777 | 2,895,848 | ||||||
Enersis SA | 9,262,416 | 2,933,292 | ||||||
Inversiones Aguas Metropolitanas SA | 223,935 | 412,565 | ||||||
Inversiones La Construccion SA | 16,756 | 204,172 | ||||||
LATAM Airlines Group SA | 121,259 | 1,524,847 |
10 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
Masisa SA | 1,476,516 | $ | 108,630 | |||||
Parque Arauco SA | 257,681 | 532,051 | ||||||
S.A.C.I. Falabella SA | 341,740 | 3,385,025 | ||||||
SalfaCorp SA | 192,856 | 184,489 | ||||||
Sociedad Matriz SAAM SA | 3,272,053 | 285,849 | ||||||
Socovesa SA | 369,101 | 92,666 | ||||||
Sonda SA | 259,003 | 657,566 | ||||||
Vina Concha y Toro SA | 251,940 | 459,371 | ||||||
|
| |||||||
30,170,439 | ||||||||
CHINA — 19.47% |
| |||||||
361 Degrees International Ltd.b | 765,000 | 182,509 | ||||||
Agile Property Holdings Ltd. | 658,000 | 700,903 | ||||||
Agricultural Bank of China Ltd. Class H | 10,030,000 | 4,307,219 | ||||||
Air China Ltd. Class H | 860,000 | 548,979 | ||||||
Ajisen (China) Holdings Ltd. | 284,000 | 305,447 | ||||||
Aluminum Corp. of China Ltd. Class Ha,b | 2,018,000 | 676,622 | ||||||
Anhui Conch Cement Co. Ltd. Class H | 612,000 | 1,977,019 | ||||||
Anhui Expressway Co. Ltd. Class H | 364,000 | 190,111 | ||||||
Anta Sports Products Ltd. | 428,000 | 553,049 | ||||||
Anton Oilfield Services Groupb | 604,000 | 385,562 | ||||||
Anxin-China Holdings Ltd. | 1,384,000 | 531,868 | ||||||
Asia Cement China Holdings Corp. | 360,000 | 171,773 | ||||||
Asian Citrus Holdings Ltd. | 491,000 | 185,524 | ||||||
AviChina Industry & Technology Co. Ltd. Class H | 1,032,000 | 525,689 | ||||||
Bank of China Ltd. Class H | 35,474,000 | 14,913,499 | ||||||
Bank of Communications Co. Ltd. Class H | 4,092,000 | 2,701,826 | ||||||
BBMG Corp. Class H | 514,500 | 352,315 | ||||||
Beijing Capital International Airport Co. Ltd. Class H | 906,000 | 593,531 | ||||||
Beijing Capital Land Ltd. Class H | 588,000 | 209,285 | ||||||
Beijing Enterprises Holdings Ltd. | 248,500 | 1,762,548 | ||||||
Beijing Enterprises Water Group Ltd. | 1,162,000 | 497,503 |
Security | Shares | Value | ||||||
Beijing North Star Co. Ltd. Class H | 350,000 | $ | 80,341 | |||||
Belle International Holdings Ltd. | 2,156,000 | 2,980,543 | ||||||
Billion Industrial Holdings Ltd.b | 290,500 | 166,709 | ||||||
Bosideng International Holdings Ltd.b | 1,404,000 | 286,072 | ||||||
Brilliance China Automotive Holdings Ltd.a | 1,416,000 | 2,081,708 | ||||||
BYD Co. Ltd. Class Ha,b | 245,500 | 881,716 | ||||||
BYD Electronic International Co. Ltd.a | 453,500 | 200,012 | ||||||
C C Land Holdings Ltd. | 657,000 | 173,688 | ||||||
Chaowei Power Holdings Ltd.b | 489,000 | 217,560 | ||||||
China Agri-Industries Holdings Ltd.b | 1,031,200 | 484,057 | ||||||
China Aoyuan Property Group Ltd. | 1,234,000 | 257,799 | ||||||
China BlueChemical Ltd. Class H | 880,000 | 461,880 | ||||||
China CITIC Bank Corp. Ltd. Class H | 3,796,000 | 1,811,256 | ||||||
China Coal Energy Co. Class H | 1,907,000 | 1,123,877 | ||||||
China Communications Construction Co. Ltd. Class H | 2,091,000 | 1,601,741 | ||||||
China Communications Services Corp. Ltd. Class H | 1,132,000 | 760,564 | ||||||
China Construction Bank Corp. Class H | 34,068,000 | 24,954,379 | ||||||
China COSCO Holdings Co. Ltd. Class Ha | 1,227,000 | 563,309 | ||||||
China Datang Corp. Renewable Power Co. Ltd. Class H | 1,260,000 | 271,356 | ||||||
China Dongxiang (Group) Co. Ltd.b | 1,543,000 | 250,720 | ||||||
China Everbright International Ltd. | 1,122,000 | 1,059,146 | ||||||
China Everbright Ltd. | 426,000 | 573,538 | ||||||
China Gas Holdings Ltd.b | 1,100,000 | 1,147,607 |
CONSOLIDATED SCHEDULEOF INVESTMENTS | 11 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
China High Speed Transmission Equipment Group Co. Ltd.a,b | 632,000 | $ | 268,957 | |||||
China Huiyuan Juice Group Ltd.a | 408,500 | 221,255 | ||||||
China International Marine Containers (Group) Co. Ltd. Class H | 248,300 | 409,863 | ||||||
China Life Insurance Co. Ltd. Class H | 3,476,000 | 8,534,901 | ||||||
China Lilang Ltd.b | 269,000 | 150,555 | ||||||
China Longyuan Power Group Corp. Ltd. Class H | 1,276,000 | 1,347,679 | ||||||
China Lumena New Materials Corp.a,b | 1,518,000 | 301,470 | ||||||
China Medical System Holdings Ltd.b | 534,000 | 446,928 | ||||||
China Mengniu Dairy Co. Ltd. | 633,000 | 2,677,499 | ||||||
China Merchants Bank Co. Ltd. Class H | 1,836,000 | 3,182,173 | ||||||
China Merchants Holdings (International) | 528,000 | 1,783,968 | ||||||
China Metal Recycling Holdings Ltd.a,b,c | 62,400 | — | ||||||
China Minsheng Banking Corp. Ltd. Class H | 2,440,000 | 2,624,265 | ||||||
China Mobile Ltd. | 2,856,000 | 30,698,391 | ||||||
China Modern Dairy Holdings Ltd.a,b | 922,000 | 307,952 | ||||||
China National Building Material Co. Ltd. | 1,344,000 | 1,235,778 | ||||||
China National Materials Co. Ltd. Class Hb | 829,000 | 172,120 | ||||||
China Oil and Gas Group Ltd. | 2,180,000 | 289,565 | ||||||
China Oilfield Services Ltd. Class H | 816,000 | 2,102,507 | ||||||
China Overseas Grand Oceans Group Ltd.b | 346,000 | 452,445 | ||||||
China Overseas Land & Investment Ltd. | 2,040,000 | 6,077,066 | ||||||
China Pacific Insurance (Group) Co. Ltd. | 1,237,000 | 4,131,628 | ||||||
China Petroleum & Chemical Corp. Class H | 11,938,200 | 8,606,022 | ||||||
China Power International Development Ltd.b | 1,153,000 | 423,766 |
Security | Shares | Value | ||||||
China Power New Energy Development Co. Ltd.a | 3,200,000 | $ | 160,941 | |||||
China Precious Metal Resources Holdings Co. Ltd.a,b | 2,448,000 | 366,202 | ||||||
China Railway Construction Corp. Ltd. Class H | 935,000 | 889,856 | ||||||
China Railway Group Ltd. Class H | 1,893,000 | 971,595 | ||||||
China Rare Earth Holdings Ltd.a | 1,416,000 | 215,475 | ||||||
China Resources and Transportation | 6,500,000 | 310,147 | ||||||
China Resources Cement Holdings Ltd. | 884,000 | 560,879 | ||||||
China Resources Enterprise Ltd.b | 556,000 | 1,584,597 | ||||||
China Resources Gas Group Ltd. | 436,000 | 1,028,938 | ||||||
China Resources Land Ltd.b | 964,000 | 2,635,510 | ||||||
China Resources Power Holdings Co. Ltd. | 900,000 | 2,065,924 | ||||||
China Rongsheng Heavy Industries Group Holdings Ltd.a,b | 1,719,000 | 201,729 | ||||||
China SCE Property Holdings Ltd.a | 738,000 | 190,344 | ||||||
China Shanshui Cement Group Ltd. | 905,000 | 359,460 | ||||||
China Shenhua Energy Co. Ltd. Class H | 1,580,500 | 4,912,056 | ||||||
China Shineway Pharmaceutical Group Ltd.b | 171,000 | 265,065 | ||||||
China Shipping Container Lines Co. Ltd. | 1,742,000 | 444,800 | ||||||
China Singyes Solar Technologies Holdings Ltd.b | 241,000 | 245,836 | ||||||
China South City Holdings Ltd. | 1,154,000 | 297,637 | ||||||
China Southern Airlines Co. Ltd. Class H | 826,000 | 281,213 | ||||||
China State Construction International | 854,000 | 1,378,840 | ||||||
China Suntien Green Energy Corp. Ltd. Class H | 759,000 | 226,103 |
12 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
China Taiping Insurance Holdings Co. Ltd.a | 432,600 | $ | 592,465 | |||||
China Telecom Corp. Ltd. Class H | 6,528,000 | 3,291,612 | ||||||
China Travel International Investment Hong Kong Ltd. | 1,616,000 | 304,261 | ||||||
China Unicom (Hong Kong) Ltd. | 2,194,000 | 3,327,329 | ||||||
China Vanke Co. Ltd. Class B | 617,000 | 1,242,848 | ||||||
China Water Affairs Group Ltd.b | 684,000 | 255,803 | ||||||
China Wireless Technologies Ltd. | 848,000 | 344,475 | ||||||
China Yongda Automobiles Services | 179,500 | 171,991 | ||||||
China Yurun Food Group Ltd.a,b | 670,000 | 423,373 | ||||||
China ZhengTong Auto Services | 420,000 | 259,981 | ||||||
Chinasoft International Ltd.a,b | 802,000 | 252,357 | ||||||
Chongqing Rural Commercial Bank Co. Ltd. Class H | 1,099,000 | 494,624 | ||||||
CIMC Enric Holdings Ltd. | 292,000 | 305,014 | ||||||
CITIC Pacific Ltd.b | 816,000 | 943,918 | ||||||
CITIC Resources Holdings Ltd.a | 1,578,000 | 215,707 | ||||||
CITIC Securities Co. Ltd. Class H | 496,500 | 966,825 | ||||||
CNOOC Ltd. | 8,374,000 | 16,630,507 | ||||||
Comba Telecom Systems Holdings Ltd.a,b | 521,000 | 165,282 | ||||||
Cosco International Holdings Ltd.b | 830,000 | 310,404 | ||||||
COSCO Pacific Ltd.b | 816,000 | 1,199,629 | ||||||
Country Garden Holdings Co. Ltd. | 2,177,000 | 1,361,608 | ||||||
CPMC Holdings Ltd.b | 359,000 | 269,907 | ||||||
CSPC Pharmaceutical Group Ltd.b | 654,000 | 341,574 | ||||||
CSR Corp Ltd. Class H | 901,000 | 655,323 | ||||||
Dah Chong Hong Holdings Ltd.b | 421,000 | 323,579 | ||||||
Daphne International Holdings Ltd.b | 494,000 | 316,618 |
Security | Shares | Value | ||||||
Datang International Power Generation Co. Ltd. Class H | 1,632,000 | $ | 702,940 | |||||
Dazhong Transportation Group Co. Ltd. Class B | 402,000 | 275,370 | ||||||
Digital China Holdings Ltd. | 390,000 | 429,511 | ||||||
Dongfeng Motor Group Co. Ltd. Class H | 1,264,000 | 1,750,665 | ||||||
Dongyue Group Ltd.b | 632,000 | 254,287 | ||||||
ENN Energy Holdings Ltd. | 408,000 | 2,025,689 | ||||||
Evergrande Real Estate Group Ltd.a,b | 2,999,000 | 1,276,269 | ||||||
Fantasia Holdings Group Co. Ltd. | 1,341,000 | 210,980 | ||||||
Far East Horizon Ltd. | 624,000 | 377,406 | ||||||
First Tractor Co. Ltd. Class Hb | 264,000 | 162,396 | ||||||
Fosun International Ltd.b | 807,500 | 588,360 | ||||||
Franshion Properties (China) Ltd.b | 1,840,000 | 638,296 | ||||||
Fufeng Group Ltd.a | 583,400 | 243,760 | ||||||
GCL-Poly Energy Holdings Ltd.a | 4,358,000 | 1,152,107 | ||||||
Geely Automobile Holdings Ltd.b | 2,210,000 | 1,162,798 | ||||||
Global Bio-Chem Technology Group Co. Ltd.a | 2,040,000 | 165,738 | ||||||
Glorious Property Holdings Ltd.a,b | 1,309,000 | 197,505 | ||||||
Golden Eagle Retail Group Ltd.b | 301,000 | 417,667 | ||||||
Golden Meditech Holdings Ltd.b | 1,348,000 | 156,453 | ||||||
GOME Electrical Appliances Holdings Ltd.a | 4,870,000 | 502,424 | ||||||
Great Wall Motor Co. Ltd. Class H | 510,000 | 2,597,880 | ||||||
Greatview Aseptic Packaging Co. Ltd. | 363,000 | 196,143 | ||||||
Greentown China Holdings Ltd. | 417,000 | 778,675 | ||||||
Guangdong Investment Ltd. | 1,224,000 | 1,013,370 | ||||||
Guangzhou Automobile Group Co. Ltd. Class H | 1,046,000 | 1,066,989 | ||||||
Guangzhou R&F Properties Co. Ltd. Class H | 408,000 | 666,110 |
CONSOLIDATED SCHEDULEOF INVESTMENTS | 13 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
Haier Electronics Group Co. Ltd. | 408,000 | $ | 713,463 | |||||
Haitian International Holdings Ltd.b | 302,000 | 556,144 | ||||||
Haitong Securities Co. Ltd. Class H | 598,800 | 867,960 | ||||||
Hanergy Solar Group Ltd.a | 5,378,000 | 520,156 | ||||||
Hangzhou Steam Turbine Co. Ltd. Class B | 199,900 | 260,367 | ||||||
Harbin Electric Co. Ltd. Class H | 366,000 | 226,555 | ||||||
Hengan International Group Co. Ltd.b | 347,500 | 3,806,887 | ||||||
Hengdeli Holdings Ltd.b | 982,800 | 225,599 | ||||||
Hidili Industry International | 791,000 | 134,649 | ||||||
Honghua Group Ltd.b | 816,000 | 239,926 | ||||||
Hopson Development Holdings Ltd.a | 292,000 | 357,356 | ||||||
Hua Han Bio-Pharmaceutical Holdings Ltd. Class Hb | 1,072,800 | 257,326 | ||||||
Huabao International Holdings Ltd.b | 984,000 | 437,790 | ||||||
Huaneng Power International Inc. Class H | 1,516,000 | 1,511,230 | ||||||
Hunan Nonferrous Metal Corp. Ltd. Class Ha,b | 982,000 | 303,931 | ||||||
Industrial and Commercial Bank of China Ltd. Class H | 34,669,000 | 22,756,785 | ||||||
Inner Mongolia Yitai Coal Co. Ltd. Class B | 510,000 | 1,055,700 | ||||||
Interchina Holdings Co. Ltd.a | 2,800,000 | 238,316 | ||||||
Intime Retail Group Co. Ltd.b | 486,500 | 569,666 | ||||||
Jiangsu Expressway Co. Ltd. Class H | 610,000 | 691,465 | ||||||
Jiangsu Future Land Co. Ltd. Class B | 367,900 | 229,938 | ||||||
Jiangxi Copper Co. Ltd. Class H | 674,000 | 1,298,561 | ||||||
Jinchuan Group International Resources | 593,000 | 108,591 | ||||||
Ju Teng International Holdings Ltd. | 448,000 | 250,738 | ||||||
Kai Yuan Holdings Ltd.a | 8,940,000 | 224,814 | ||||||
Kaisa Group Holdings Ltd.a,b | 970,000 | 285,206 |
Security | Shares | Value | ||||||
Kingboard Chemical Holdings Co. Ltd. | 330,700 | $ | 719,024 | |||||
Kingboard Laminates Holdings Ltd.b | 544,500 | 211,357 | ||||||
Kingdee International Software Group Co. Ltd.a,b | 1,142,000 | 349,033 | ||||||
Kingsoft Corp. Ltd. | 303,000 | 641,605 | ||||||
Kingway Brewery Holdings Ltd.a | 480,000 | 185,082 | ||||||
Kunlun Energy Co. Ltd. | 1,632,000 | 2,378,211 | ||||||
KWG Property Holdings Ltd.b | 597,000 | 403,420 | ||||||
Lao Feng Xiang Co. Ltd. Class B | 112,706 | 260,914 | ||||||
Lee & Man Paper Manufacturing Ltd. | 808,000 | 478,273 | ||||||
Lenovo Group Ltd. | 2,972,000 | 2,874,497 | ||||||
Li Ning Co. Ltd.a | 580,000 | 436,810 | ||||||
Lianhua Supermarket Holdings Co. Ltd. Class H | 197,000 | 104,160 | ||||||
Lijun International Pharmaceutical (Holding) Co. Ltd.b | 846,000 | 291,295 | ||||||
Longfor Properties Co. Ltd.b | 647,000 | 1,081,337 | ||||||
Lonking Holdings Ltd.a | 1,025,000 | 215,458 | ||||||
Luthai Textile Co. Ltd. Class B | 240,900 | 283,324 | ||||||
Magic Holdings International Ltd. | 355,000 | 278,803 | ||||||
Maoye International Holdings Ltd.b | 666,000 | 125,395 | ||||||
Microport Scientific Corp.b | 459,000 | 304,840 | ||||||
MIE Holdings Corp. | 782,000 | 172,447 | ||||||
Minth Group Ltd.b | 408,000 | 734,509 | ||||||
MMG Ltd.a | 872,000 | 196,792 | ||||||
New China Life Insurance Co. Ltd. Class Ha | 293,100 | 799,425 | ||||||
New World Department Store China Ltd.b | 240,000 | 126,586 | ||||||
Nine Dragons Paper (Holdings) Ltd.b | 759,000 | 515,827 | ||||||
North Mining Shares Co. Ltd.a | 5,750,000 | 252,115 | ||||||
NVC Lighting Holdings Ltd. | 704,000 | 182,482 | ||||||
Parkson Retail Group Ltd. | 606,000 | 238,355 | ||||||
People’s Insurance Co. Group of China Ltd. Class Hb | 2,069,000 | 1,003,229 |
14 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
PetroChina Co. Ltd. Class H | 9,866,000 | $ | 10,738,296 | |||||
Phoenix Satellite Television Holdings Ltd.b | 746,000 | 253,015 | ||||||
PICC Property and Casualty Co. Ltd. Class H | 1,632,000 | 2,272,980 | ||||||
Ping An Insurance (Group) Co. of China Ltd. Class H | 918,000 | 6,434,192 | ||||||
Poly Property Group Co. Ltd. | 959,000 | 580,020 | ||||||
Ports Design Ltd. | 363,500 | 237,196 | ||||||
Powerlong Real Estate Holdings Ltd. | 514,000 | 99,427 | ||||||
Real Nutriceutical Group Ltd.b | 486,000 | 130,989 | ||||||
Renhe Commercial Holdings Co. Ltd.a | 5,360,000 | 311,049 | ||||||
REXLot Holdings Ltd. | 4,350,000 | 302,925 | ||||||
Road King Infrastructure Ltd. | 286,000 | 273,298 | ||||||
Sany Heavy Equipment International Holdings Co. Ltd.b | 561,000 | 163,502 | ||||||
Semiconductor Manufacturing | 9,542,000 | 676,790 | ||||||
Shandong Weigao Group Medical Polymer Co. Ltd. Class H | 816,000 | 769,236 | ||||||
Shanghai Electric Group Co. Ltd. Class H | 1,326,000 | 490,769 | ||||||
Shanghai Industrial Holdings Ltd.b | 248,000 | 812,339 | ||||||
Shanghai Industrial Urban Development | 862,000 | 185,642 | ||||||
Shanghai Jin Jiang International Hotels Group Co. Ltd. Class H | 940,000 | 164,861 | ||||||
Shanghai Mechanical and Electrical Industry Co. Ltd. Class B | 152,800 | 178,776 | ||||||
Shanghai Pharmaceuticals Holding Co. Ltd. Class H | 346,800 | 658,323 | ||||||
Shenzhen Expressway Co. Ltd. Class H | 524,000 | 193,263 | ||||||
Shenzhen International Holdings Ltd. | 4,827,500 | 603,873 | ||||||
Shenzhen Investment Ltd. | 1,096,000 | 455,112 | ||||||
Shenzhou International Group Holdings Ltd. | 281,000 | 913,185 |
Security | Shares | Value | ||||||
Shimao Property Holdings Ltd.b | 663,500 | $ | 1,690,751 | |||||
Shougang Concord International Enterprises Co. Ltd.a,b | 4,866,000 | 244,731 | ||||||
Shougang Fushan Resources Group Ltd.b | 1,598,000 | 535,799 | ||||||
Shui On Land Ltd. | 1,782,166 | 551,583 | ||||||
Sihuan Pharmaceutical Holdings Group Ltd. | 1,063,000 | 793,713 | ||||||
Sino Biopharmaceutical Ltd. | 1,440,000 | 1,028,784 | ||||||
Sino Oil And Gas Holdings Ltd.a,b | 7,085,000 | 179,080 | ||||||
Sino-Ocean Land Holdings Ltd.b | 1,429,500 | 846,153 | ||||||
Sinofert Holdings Ltd.b | 1,202,000 | 187,561 | ||||||
Sinopec Kantons Holdings Ltd.b | 544,000 | 519,138 | ||||||
Sinopec Shanghai Petrochemical Co. Ltd. Class Ha | 1,110,000 | 397,942 | ||||||
Sinopharm Group Co. Ltd. Class H | 468,800 | 1,175,265 | ||||||
Sinotrans Ltd. Class H | 960,000 | 237,697 | ||||||
Sinotrans Shipping Ltd.b | 1,094,500 | 290,760 | ||||||
Skyworth Digital Holdings Ltd. | 900,000 | 488,626 | ||||||
SOHO China Ltd.b | 998,500 | 848,565 | ||||||
Sun Art Retail Group Ltd. | 1,116,500 | 1,520,458 | ||||||
Sunac China Holdings Ltd. | 816,000 | 573,507 | ||||||
Sunny Optical Technology Group Co Ltd.b | 299,000 | 323,894 | ||||||
TCL Multimedia Technology Holdings Ltd. | 276,000 | 123,507 | ||||||
Tech Pro Technology Development Ltd.a | 478,000 | 217,598 | ||||||
Tencent Holdings Ltd. | 476,800 | 22,356,917 | ||||||
Tiangong International Co. Ltd. | 894,000 | 217,897 | ||||||
Tianjin Development Holdings Ltd.a | 408,000 | 242,556 | ||||||
Tianjin Port Development Holdings Ltd.b | 1,468,000 | 221,495 | ||||||
Tianneng Power International Ltd.b | 448,000 | 184,876 | ||||||
Tibet 5100 Water Resources Holdings Ltd. | 695,000 | 266,191 |
CONSOLIDATED SCHEDULEOF INVESTMENTS | 15 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
Tingyi (Cayman Islands) Holding Corp. | 922,000 | $ | 2,282,885 | |||||
Tong Ren Tang Technologies Co. Ltd. Class H | 137,000 | 454,935 | ||||||
Towngas China Co. Ltd. | 612,000 | 576,137 | ||||||
Travelsky Technology Ltd. Class H | 562,000 | 452,244 | ||||||
Tsingtao Brewery Co. Ltd. Class H | 146,000 | 1,081,670 | ||||||
Uni-President China Holdings Ltd.b | 546,000 | 466,829 | ||||||
Vinda International Holdings Ltd.b | 333,000 | 341,400 | ||||||
VODone Ltd.a | 2,066,000 | 159,858 | ||||||
Want Want China Holdings Ltd. | 2,802,000 | 4,155,447 | ||||||
Wasion Group Holdings Ltd. | 326,000 | 201,375 | ||||||
Weichai Power Co. Ltd. Class H | 232,000 | 840,710 | ||||||
Weiqiao Textile Co. Ltd. Class H | 324,000 | 183,426 | ||||||
West China Cement Ltd. | 1,586,000 | 229,073 | ||||||
Winsway Coking Coal Holding Ltd.a,b | 2,053,000 | 150,909 | ||||||
Wumart Stores Inc. Class H | 247,000 | 467,600 | ||||||
Xingda International Holdings Ltd. | 457,000 | 219,236 | ||||||
Xinhua Winshare Publishing and Media Co. Ltd. Class H | 477,000 | 239,287 | ||||||
XTEP International Holdings Ltd.b | 397,000 | 194,036 | ||||||
Yanchang Petroleum International Ltd.a,b | 3,370,000 | 169,491 | ||||||
Yantai Changyu Pioneer Wine Co. Ltd. Class B | 106,100 | 350,273 | ||||||
Yanzhou Coal Mining Co. Ltd. Class Hb | 870,000 | 774,141 | ||||||
Yingde Gases Group Co. Ltd.b | 580,500 | 520,282 | ||||||
Yuanda China Holdings Ltd. | 1,558,000 | 100,459 | ||||||
Yuexiu Property Co. Ltd. | 2,660,000 | 751,238 | ||||||
Yuexiu Real Estate Investment Trust | 718,000 | 360,185 | ||||||
Yuexiu Transport Infrastructure Ltd.b | 524,000 | 279,083 |
Security | Shares | Value | ||||||
Yuzhou Properties Co. Ltd. | 718,400 | $ | 156,569 | |||||
Zhaojin Mining Industry Co. Ltd. Class H | 439,500 | 416,580 | ||||||
Zhejiang Expressway Co. Ltd. Class H | 704,000 | 589,209 | ||||||
Zhejiang Southeast Electric Power Co. Ltd. Class Ba | 408,000 | 340,272 | ||||||
Zhongsheng Group Holdings Ltd. | 277,000 | 367,219 | ||||||
Zhuzhou CSR Times Electric Co. Ltd. | 227,000 | 715,742 | ||||||
Zijin Mining Group Co. Ltd. Class Hb | 2,872,000 | 722,222 | ||||||
Zoomlion Heavy Industry Science and Technology Co. Ltd. Class Hb | 624,600 | 486,509 | ||||||
ZTE Corp. Class Ha,b | 286,000 | 553,234 | ||||||
|
| |||||||
363,166,652 | ||||||||
COLOMBIA — 0.85% |
| |||||||
Almacenes Exito SA | 93,660 | 1,546,652 | ||||||
Bancolombia SA | 92,417 | 1,258,887 | ||||||
Bolsa de Valores de Colombia | 24,759,106 | 320,899 | ||||||
Cementos Argos SA | 194,743 | 921,123 | ||||||
Cemex Latam Holdings SAa | 86,580 | 670,608 | ||||||
Corporacion Financiera Colombiana SA | 40,271 | 802,259 | ||||||
Corporacion Financiera Colombiana | 365 | 6,974 | ||||||
Ecopetrol SA | 2,276,844 | 5,096,622 | ||||||
Grupo Argos SA | 136,049 | 1,534,292 | ||||||
Grupo de Inversiones Suramericana SA | 107,108 | 2,117,161 | ||||||
Interconexion Electrica SA ESP | 186,864 | 891,575 | ||||||
Isagen SA ESPa | 426,148 | 674,452 | ||||||
|
| |||||||
15,841,504 | ||||||||
CZECH REPUBLIC — 0.25% |
| |||||||
Central European Media Enterprises Ltd. AS Class Aa | 38,820 | 177,627 | ||||||
CEZ AS | 73,132 | 1,685,663 | ||||||
Komercni Banka AS | 7,142 | 1,534,409 | ||||||
Pegas Nonwovens SA | 9,467 | 277,485 | ||||||
Philip Morris CR AS | 285 | 157,814 |
16 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
Telefonica O2 Czech Republic AS | 50,948 | $ | 759,171 | |||||
|
| |||||||
4,592,169 | ||||||||
EGYPT — 0.24% |
| |||||||
Citadel Capital SAEa | 362,000 | 157,016 | ||||||
Commercial International Bank (Egypt) SAE | 282,189 | 1,426,366 | ||||||
EFG-Hermes Holding Co. SAEa | 212,186 | 244,819 | ||||||
Egyptian Kuwaiti Holding Co. SAE | 307,020 | 214,914 | ||||||
ezzsteela | 140,546 | 224,531 | ||||||
National Societe Generale Bank SAE | 23,538 | 86,191 | ||||||
Orascom Telecom Holding SAEa | 1,284,058 | 781,208 | ||||||
Palm Hills Developments SAEa | 566,874 | 183,395 | ||||||
Pioneers Holding Co.a | 188,601 | 105,294 | ||||||
Six of October Development & Investment Co.a | 47,806 | 153,362 | ||||||
South Valley Cement Co.a | 189,294 | 118,145 | ||||||
Talaat Moustafa Group Holding Co. SAEa | 552,935 | 388,641 | ||||||
Telecom Egypt Co. SAE | 188,205 | 335,693 | ||||||
|
| |||||||
4,419,575 | ||||||||
HUNGARY — 0.20% |
| |||||||
EGIS Pharmaceuticals PLC | 2,287 | 212,707 | ||||||
Magyar Telekom Telecommunications PLC | 221,881 | 305,546 | ||||||
MOL Hungarian Oil and Gas PLC | 20,316 | 1,437,907 | ||||||
OTP Bank PLC | 98,895 | 1,832,666 | ||||||
|
| |||||||
3,788,826 | ||||||||
INDIA — 5.47% |
| |||||||
ACC Ltd. | 19,841 | 289,522 | ||||||
Adani Enterprises Ltd. | 98,956 | 211,931 | ||||||
Adani Ports and Special Economic Zone Ltd. | 188,971 | 360,238 | ||||||
Aditya Birla Nuvo Ltd. | 15,580 | 267,893 | ||||||
Amara Raja Batteries Ltd. | 26,073 | 101,439 | ||||||
Ambuja Cements Ltd. | 314,325 | 816,379 | ||||||
Andhra Bank | 8,232 | 6,217 | ||||||
Apollo Hospitals Enterprise Ltd. | 38,496 | 503,734 |
Security | Shares | Value | ||||||
Apollo Tyres Ltd. | 115,563 | $ | 110,106 | |||||
Arvind Ltd. | 86,550 | 103,029 | ||||||
Ashok Leyland Ltd. | 6,742 | 1,225 | ||||||
Asian Paints Ltd. | 138,654 | 883,402 | ||||||
Aurobindo Pharma Ltd. | 50,939 | 139,972 | ||||||
Axis Bank Ltd. | 2,593 | 32,690 | ||||||
Bajaj Auto Ltd. | 38,845 | 1,080,040 | ||||||
Bajaj Finance Ltd. | 8,221 | 127,763 | ||||||
Balrampur Chini Mills Ltd. | 157,659 | 85,785 | ||||||
Bank of Baroda | 18,726 | 130,603 | ||||||
Bank of India | 2,187 | 4,710 | ||||||
Bayer CropScience Ltd. | 6,863 | 159,458 | ||||||
Berger Paints India Ltd. | 45,839 | 140,771 | ||||||
Bharat Forge Ltd. | 42,072 | 153,432 | ||||||
Bharat Heavy Electricals Ltd. | 265,803 | 478,743 | ||||||
Bharat Petroleum Corp. Ltd. | 81,761 | 337,835 | ||||||
Bharti Airtel Ltd. | 277,872 | 1,257,931 | ||||||
Biocon Ltd. | 35,033 | 186,459 | ||||||
Britannia Industries Ltd. | 15,787 | 167,834 | ||||||
Cairn India Ltd. | 226,324 | 1,098,564 | ||||||
Canara Bank Ltd. | 2,042 | 6,268 | ||||||
Century Textiles & Industries Ltd. | 24,057 | 79,049 | ||||||
CESC Ltd. | 27,140 | 126,499 | ||||||
Cipla Ltd. | 160,883 | 1,015,289 | ||||||
Clariant Chemicals (India) Ltd. | 19,102 | 133,818 | ||||||
Coal India Ltd. | 234,554 | 892,491 | ||||||
Dabur India Ltd. | 201,295 | 496,916 | ||||||
Development Credit Bank Ltd.a | 213,646 | 132,256 | ||||||
Dewan Housing Finance Corp. Ltd. | 36,817 | 66,005 | ||||||
Divi’s Laboratories Ltd. | 18,072 | 271,955 | ||||||
DLF Ltd. | 191,433 | 376,086 | ||||||
Dr. Reddy’s Laboratories Ltd. | 47,858 | 1,660,869 | ||||||
Eicher Motors Ltd. | 3,724 | 179,791 | ||||||
Emami Ltd. | 26,652 | 165,451 | ||||||
FDC Ltd. | 61,259 | 77,188 | ||||||
Federal Bank Ltd. | 34,142 | 132,367 | ||||||
GAIL (India) Ltd. | 144,024 | 644,043 | ||||||
Gateway Distriparks Ltd. | 88,538 | 142,784 | ||||||
GlaxoSmithKline Consumer Healthcare Ltd. | 4,746 | 292,083 | ||||||
GMR Infrastructure Ltd.a | 507,821 | 105,300 |
CONSOLIDATED SCHEDULEOF INVESTMENTS | 17 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
Godrej Consumer Products Ltd. | 59,528 | $ | 729,797 | |||||
Godrej Industries Ltd. | 38,314 | 136,711 | ||||||
Great Eastern Shipping Co. Ltd. (The) | 35,376 | 135,357 | ||||||
Gruh Finance Ltd. | 35,598 | 108,594 | ||||||
Gujarat Gas Co. Ltd. | 18,714 | 55,063 | ||||||
Gujarat Mineral Development Corp. Ltd. | 49,300 | 61,821 | ||||||
Gujarat Pipavav Port Ltd.a | 160,802 | 104,289 | ||||||
Gujarat State Petronet Ltd. | 94,405 | 71,086 | ||||||
Havells India Ltd. | 23,688 | 215,978 | ||||||
HCL Technologies Ltd. | 98,689 | 1,554,124 | ||||||
HDFC Bank Ltd. | 725,131 | 6,519,265 | ||||||
Hero Motocorp Ltd. | 37,739 | 1,168,955 | ||||||
Hexaware Technologies Ltd. | 117,178 | 227,191 | ||||||
Hindalco Industries Ltd. | 481,602 | 765,738 | ||||||
Hindustan Construction Co. Ltd.a | 649,982 | 96,410 | ||||||
Hindustan Unilever Ltd. | 214,946 | 2,054,301 | ||||||
Housing Development & Infrastructure Ltd.a | 139,307 | 70,423 | ||||||
Housing Development Finance Corp. Ltd. | 688,463 | 7,488,481 | ||||||
ICICI Bank Ltd. | 119,367 | 1,452,115 | ||||||
Idea Cellular Ltd.a | 316,846 | 766,818 | ||||||
IFCI Ltd. | 275,924 | 78,722 | ||||||
India Cements Ltd. | 5,942 | 4,142 | ||||||
India Infoline Ltd. | 96,030 | 76,888 | ||||||
Indiabulls Real Estate Ltd. | 122,581 | 105,475 | ||||||
Indian Hotels Co. Ltd. | 153,532 | 104,570 | ||||||
Indraprastha Gas Ltd. | 19,468 | 75,801 | ||||||
Infosys Ltd. | 215,338 | 10,122,711 | ||||||
Infrastructure Development Finance Co. Ltd. | 46,701 | 56,901 | ||||||
Ipca Laboratories Ltd. | 12,707 | 119,233 | ||||||
ITC Ltd. | 1,037,544 | 4,847,735 | ||||||
Jain Irrigation Systems Ltd. | 150,766 | 114,780 | ||||||
Jaiprakash Associates Ltd. | 22,459 | 11,252 | ||||||
Jammu & Kashmir Bank Ltd. | 10,999 | 185,711 | ||||||
Jindal Steel & Power Ltd. | 172,309 | 578,580 | ||||||
JSW Steel Ltd. | 38,921 | 318,961 | ||||||
Jubilant Foodworks Ltd.a | 13,728 | 208,870 | ||||||
Jyothy Laboratories Ltd. | 26,446 | 62,042 | ||||||
Kajaria Ceramics Ltd. | 34,644 | 118,084 |
Security | Shares | Value | ||||||
Karur Vysya Bank Ltd. | 23,489 | $ | 109,517 | |||||
Kaveri Seed Co. Ltd. | 3,629 | 79,915 | ||||||
Kotak Mahindra Bank Ltd. | 136,401 | 1,361,739 | ||||||
KPIT Technologies Ltd. | 61,468 | 122,806 | ||||||
Larsen & Toubro Ltd. | 161,925 | 1,775,734 | ||||||
LIC Housing Finance Ltd. | 136,953 | 343,885 | ||||||
Lupin Ltd. | 29,549 | 356,091 | ||||||
Madras Cements Ltd. | 36,981 | 85,190 | ||||||
Mahindra & Mahindra Financial Services Ltd. | 126,494 | 483,806 | ||||||
Mahindra & Mahindra Ltd. | 143,373 | 1,699,666 | ||||||
MAX India Ltd. | 62,360 | 152,431 | ||||||
McLeod Russel India Ltd. | 22,962 | 87,719 | ||||||
MindTree Ltd. | 13,841 | 217,178 | ||||||
MRF Ltd. | 673 | 131,340 | ||||||
NIIT Technologies Ltd. | 30,860 | 131,717 | ||||||
NTPC Ltd. | 565,428 | 1,120,244 | ||||||
Oil & Natural Gas Corp. Ltd. | 366,318 | 1,381,385 | ||||||
Oil India Ltd. | 61,072 | 401,770 | ||||||
Page Industries Ltd. | 1,937 | 117,142 | ||||||
Persistent Systems Ltd. | 14,212 | 126,331 | ||||||
Piramal Enterprises Ltd. | 32,799 | 312,030 | ||||||
Power Finance Corp. Ltd. | 3,771 | 6,227 | ||||||
Power Grid Corp. of India Ltd. | 592,876 | 876,258 | ||||||
Prestige Estates Projects Ltd. | 43,698 | 76,192 | ||||||
PTC India Ltd. | 135,269 | 86,194 | ||||||
Punj Lloyd Ltd. | 16,028 | 5,058 | ||||||
Radico Khaitan Ltd. | 88,600 | 161,859 | ||||||
Rajesh Exports Ltd. | 36,504 | 55,913 | ||||||
Rallis India Ltd. | 49,256 | 107,428 | ||||||
Ranbaxy Laboratories Ltd.a | 56,933 | 351,447 | ||||||
Raymond Ltd. | 35,193 | 101,552 | ||||||
Redington India Ltd. | 120,915 | 109,074 | ||||||
Reliance Capital Ltd. | 47,285 | 223,471 | ||||||
Reliance Communications Ltd. | 242,488 | 452,165 | ||||||
Reliance Industries Ltd. | 606,568 | 7,838,930 | ||||||
Reliance Infrastructure Ltd. | 48,979 | 253,754 | ||||||
Reliance Power Ltd.a | 260,821 | 267,256 | ||||||
Rolta India Ltd. | 106,065 | 99,772 | ||||||
Rural Electrification Corp. Ltd. | 138,782 | 354,674 | ||||||
Sesa Goa Ltd. | 172,963 | 494,124 | ||||||
Sesa Goa Ltd. New | 380,192 | 1,086,141 | ||||||
Shree Renuka Sugars Ltd. | 302,037 | 69,943 | ||||||
Shriram Transport Finance Co. Ltd. | 65,045 | 510,407 |
18 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
Siemens Ltd. | 33,715 | $ | 220,803 | |||||
SKS Microfinance Ltd.a | 40,282 | 69,413 | ||||||
Sobha Developers Ltd. | 21,744 | 82,194 | ||||||
Solar Industries India Ltd. | 9,505 | 119,075 | ||||||
State Bank of Bikaner and Jaipur | 8,569 | 41,509 | ||||||
State Bank of India | 62,020 | 1,425,840 | ||||||
Sun Pharma Advanced Research Co. Ltd.a | 42,198 | 78,782 | ||||||
Sun Pharmaceuticals Industries Ltd. | 294,028 | 2,319,470 | ||||||
Sundaram Finance Ltd. | 14,108 | 103,306 | ||||||
Supreme Industries Ltd. | 19,884 | 97,012 | ||||||
Suzlon Energy Ltd.a | 155,346 | 13,990 | ||||||
Syndicate Bank | 5,541 | 5,380 | ||||||
Tata Consultancy Services Ltd. | 220,448 | 6,783,939 | ||||||
Tata Global Beverages Ltd. | 146,537 | 308,289 | ||||||
Tata Motors Ltd. | 384,217 | 1,740,229 | ||||||
Tata Power Co. Ltd. | 554,431 | 636,501 | ||||||
Tata Steel Ltd. | 135,140 | 560,441 | ||||||
Thermax Ltd. | 16,143 | 132,037 | ||||||
Titan Industries Ltd. | 100,106 | 340,379 | ||||||
Torrent Pharmaceuticals Ltd. | 20,798 | 128,307 | ||||||
Trent Ltd. | 3,959 | 56,626 | ||||||
TTK Prestige Ltd. | 1,479 | 74,576 | ||||||
TV18 Broadcast Ltd.a | 222,210 | 58,521 | ||||||
UCO Bank | 93,723 | 73,551 | ||||||
Ultratech Cement Ltd. | 16,040 | 358,053 | ||||||
Unitech Ltd.a | 630,158 | 157,849 | ||||||
United Breweries Ltd. | 31,513 | 341,291 | ||||||
United Phosphorus Ltd. | 127,036 | 256,495 | ||||||
United Spirits Ltd. | 41,082 | 1,368,478 | ||||||
Vijaya Bank | 129,277 | 68,092 | ||||||
Wipro Ltd. | 297,397 | 2,176,800 | ||||||
Zee Entertainment Enterprises Ltd. | 115,839 | 405,884 | ||||||
|
| |||||||
101,995,775 | ||||||||
INDONESIA — 2.72% |
| |||||||
PT ACE Hardware Indonesia Tbk | 4,560,500 | 296,516 | ||||||
PT Adaro Energy Tbk | 6,768,000 | 576,396 | ||||||
PT Agis Tbka | 4,182,000 | 160,846 | ||||||
PT Agung Podomoro Land Tbk | 5,304,000 | 128,714 |
Security | Shares | Value | ||||||
PT AKR Corporindo Tbk | 980,000 | $ | 356,731 | |||||
PT Alam Sutera Realty Tbk | 5,248,500 | 264,348 | ||||||
PT Aneka Tambang (Persero) Tbk | 2,373,500 | 289,080 | ||||||
PT Astra Agro Lestari Tbk | 189,000 | 341,827 | ||||||
PT Astra International Tbk | 9,509,000 | 5,268,265 | ||||||
PT Bakrieland Development Tbka | 30,547,500 | 139,869 | ||||||
PT Bank Bukopin Tbk | 3,056,500 | 156,744 | ||||||
PT Bank Central Asia Tbk | 5,958,000 | 4,937,720 | ||||||
PT Bank Danamon Indonesia Tbk | 1,626,000 | 603,049 | ||||||
PT Bank Mandiri (Persero) Tbk | 4,569,500 | 2,971,012 | ||||||
PT Bank Negara Indonesia (Persero) Tbk | 3,766,500 | 1,327,933 | ||||||
PT Bank Pembangunan Daerah Jawa Barat dan Banten Tbk | 2,118,500 | 151,321 | ||||||
PT Bank Rakyat Indonesia (Persero) Tbk | 5,406,000 | 3,267,363 | ||||||
PT Bank Tabungan Negara (Persero) Tbk | 2,448,376 | 213,000 | ||||||
PT Benakat Petroleum Energy Tbka | 12,445,000 | 136,758 | ||||||
PT Bukit Asam (Persero) Tbk | 402,000 | 445,440 | ||||||
PT Bumi Resources Tbka | 7,517,500 | 282,250 | ||||||
PT Bumi Serpong Damai Tbk | 3,658,500 | 438,886 | ||||||
PT BW Plantation Tbk | 1,938,000 | 161,500 | ||||||
PT Charoen Pokphand Indonesia Tbk | 3,575,500 | 1,105,065 | ||||||
PT Ciputra Development Tbk | 5,606,000 | 415,830 | ||||||
PT Ciputra Property Tbk | 1,989,000 | 129,321 | ||||||
PT Citra Marga Nusaphala Persada Tbk | 1,088,500 | 328,942 | ||||||
PT Energi Mega Persada Tbka | 20,400,000 | 143,846 | ||||||
PT Gajah Tunggal Tbk | 918,000 | 157,203 | ||||||
PT Garuda Indonesia (Persero) Tbka | 3,029,500 | 133,165 | ||||||
PT Global Mediacom Tbk | 3,512,500 | 562,901 | ||||||
PT Gudang Garam Tbk | 233,500 | 811,477 | ||||||
PT Holcim Indonesia Tbk | 799,000 | 153,654 | ||||||
PT Indo Tambangraya Megah Tbk | 204,000 | 598,736 |
CONSOLIDATED SCHEDULEOF INVESTMENTS | 19 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
PT Indocement Tunggal Prakarsa Tbk | 709,000 | $ | 1,279,057 | |||||
PT Indofood CBP Sukses Makmur Tbk | 602,000 | 551,282 | ||||||
PT Indofood Sukses Makmur Tbk | 2,144,500 | 1,276,488 | ||||||
PT Indosat Tbk | 689,000 | 260,268 | ||||||
PT Japfa Comfeed Indonesia Tbk | 2,698,000 | 291,542 | ||||||
PT Jasa Marga (Persero) Tbk | 1,087,500 | 542,754 | ||||||
PT Kalbe Farma Tbk | 11,313,000 | 1,398,585 | ||||||
PT Kawasan Industri Jababeka Tbk | 9,651,807 | 220,966 | ||||||
PT Krakatau Steel (Persero) Tbk | 2,433,500 | 104,739 | ||||||
PT Lippo Karawaci Tbk | 9,683,500 | 1,019,782 | ||||||
PT Matahari Department Store Tbka | 612,000 | 697,747 | ||||||
PT Medco Energi Internasional Tbk | 1,071,000 | 230,481 | ||||||
PT Media Nusantara Citra Tbka | 2,125,000 | 574,061 | ||||||
PT Mitra Adiperkasa Tbk | 390,500 | 169,860 | ||||||
PT MNC Investama Tbk | 12,750,000 | 402,816 | ||||||
PT MNC Sky Vision Tbka | 766,500 | 130,558 | ||||||
PT Pakuwon Jati Tbk | 9,625,000 | 255,609 | ||||||
PT Panin Financial Tbka | 8,207,500 | 131,530 | ||||||
PT Perusahaan Gas Negara (Persero) Tbk | 5,188,500 | 2,565,742 | ||||||
PT Ramayana Lestari Sentosa Tbk | 1,836,000 | 169,813 | ||||||
PT Semen Gresik (Persero) Tbk | 1,433,000 | 1,653,462 | ||||||
PT Sentul City Tbka | 12,187,000 | 217,625 | ||||||
PT Summarecon Agung Tbk | 5,070,000 | 362,143 | ||||||
PT Surya Semesta Internusa Tbk | 248,500 | 15,929 | ||||||
PT Telekomunikasi Indonesia (Persero) Tbk | 21,450,000 | 4,321,429 | ||||||
PT Timah (Persero) Tbk | 1,669,500 | 197,221 | ||||||
PT Tower Bersama Infrastructure Tbka | 463,036 | 220,493 | ||||||
PT Trada Maritime Tbka | 982,500 | 125,962 | ||||||
PT Unilever Indonesia Tbk | 729,000 | 2,082,857 | ||||||
PT United Tractors Tbk | 800,000 | 1,157,509 |
Security | Shares | Value | ||||||
PT Wijaya Karya (Persero) Tbk | 1,329,500 | $ | 211,843 | |||||
PT XL Axiata Tbk | 1,218,000 | 499,135 | ||||||
|
| |||||||
50,794,996 | ||||||||
MALAYSIA — 4.01% |
| |||||||
Aeon Credit Service M Bhd | 38,400 | 185,877 | ||||||
Affin Holdings Bhd | 196,500 | 242,279 | ||||||
AirAsia Bhd | 567,200 | 445,506 | ||||||
Alliance Financial Group Bhd | 567,900 | 873,094 | ||||||
AMMB Holdings Bhd | 769,400 | 1,740,358 | ||||||
Astro Malaysia Holdings Bhd | 795,600 | 716,942 | ||||||
Axiata Group Bhd | 1,200,700 | 2,463,724 | ||||||
Berjaya Corp. Bhd | 1,454,800 | 248,021 | ||||||
Berjaya Sports Toto Bhd | 307,308 | 373,288 | ||||||
BIMB Holdings Bhd | 207,300 | 272,634 | ||||||
British American Tobacco (Malaysia) Bhd | 61,800 | 1,169,115 | ||||||
Bumi Armada Bhda | 668,100 | 793,238 | ||||||
Bursa Malaysia Bhd | 187,900 | 411,295 | ||||||
CapitaMalls Malaysia Trust Bhd | 550,800 | 251,526 | ||||||
Carlsberg Brewery Malaysia Bhd | 79,800 | 314,365 | ||||||
CIMB Group Holdings Bhd | 2,144,000 | 4,751,753 | ||||||
Dialog Group Bhd | 872,700 | 685,460 | ||||||
DiGi.Com Bhd | 1,655,500 | 2,368,780 | ||||||
DRB-Hicom Bhd | 403,600 | 318,236 | ||||||
Eastern & Oriental Bhd | 355,800 | 213,388 | ||||||
Felda Global Ventures Holdings Bhd | 515,000 | 685,151 | ||||||
Gamuda Bhd | 781,200 | 1,063,084 | ||||||
Genting Bhd | 952,900 | 2,706,616 | ||||||
Genting Malaysia Bhd | 1,387,200 | 1,777,947 | ||||||
Genting Plantations Bhd | 117,600 | 339,759 | ||||||
HAP Seng Consolidated Bhd | 411,300 | 264,204 | ||||||
Hartalega Holdings Bhd | 148,500 | 316,010 | ||||||
Hong Leong Bank Bhd | 263,700 | 1,131,949 | ||||||
Hong Leong Financial Group Bhd | 109,500 | 483,370 | ||||||
IGB Corp. Bhd | 388,800 | 295,913 | ||||||
IHH Healthcare Bhda | 1,234,500 | 1,507,069 | ||||||
IJM Corp. Bhd | 517,800 | 871,736 | ||||||
IJM Land Bhd | 238,500 | 175,712 | ||||||
IJM Plantations Bhd | 169,900 | 148,965 | ||||||
IOI Corp. Bhd | 1,368,800 | 2,250,253 |
20 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
KPJ Healthcare Bhd | 242,400 | $ | 474,506 | |||||
Kuala Lumpur Kepong Bhd | 227,400 | 1,489,808 | ||||||
Lafarge Malaysia Bhd | 187,900 | 541,147 | ||||||
Magnum Bhd | 343,900 | 339,215 | ||||||
Mah Sing Group Bhd | 388,960 | 266,431 | ||||||
Malayan Banking Bhd | 2,040,000 | 6,210,518 | ||||||
Malaysia Airports Holdings Bhd | 273,900 | 582,030 | ||||||
Malaysia Building Society Bhd | 318,600 | 277,402 | ||||||
Malaysian Airline System Bhda | 2,412,300 | 231,334 | ||||||
Malaysian Resources Corp. Bhd | 781,200 | 342,470 | ||||||
Maxis Bhd | 1,064,000 | 2,215,621 | ||||||
Media Chinese International Ltd. | 591,600 | 189,110 | ||||||
Media Prima Bhd | 440,000 | 360,332 | ||||||
MISC Bhda | 515,700 | 741,032 | ||||||
MMC Corp. Bhd | 416,600 | 317,071 | ||||||
Oriental Holdings Bhd | 113,700 | 285,224 | ||||||
OSK Holdings Bhd | 376,900 | 178,998 | ||||||
Parkson Holdings Bhd | 266,800 | 272,100 | ||||||
Pavilion Real Estate Investment Trust Bhd | 489,600 | 196,749 | ||||||
Petronas Chemicals Group Bhd | 1,329,600 | 2,679,641 | ||||||
Petronas Dagangan Bhd | 127,000 | 1,074,846 | ||||||
Petronas Gas Bhd | 287,300 | 1,761,541 | ||||||
POS Malaysia Bhd | 193,100 | 291,583 | ||||||
PPB Group Bhd | 219,600 | 891,838 | ||||||
Public Bank Bhd Foreign | 499,900 | 2,611,549 | ||||||
QL Resources Bhd | 242,100 | 250,594 | ||||||
RHB Capital Bhd | 294,400 | 670,405 | ||||||
Sapurakencana Petroleum Bhda | 1,812,200 | 1,980,607 | ||||||
Sarawak Oil Palms Bhd | 87,000 | 145,673 | ||||||
Sime Darby Bhd | 1,285,200 | 3,673,956 | ||||||
Sunway Bhd | 405,400 | 349,275 | ||||||
Sunway Real Estate Investment Trust Bhd | 816,500 | 323,145 | ||||||
Supermax Corp. Bhd | 335,200 | 240,832 | ||||||
Ta Ann Holdings Bhd | 133,100 | 155,599 | ||||||
TA Enterprise Bhd | 1,288,800 | 231,492 | ||||||
TAN Chong Motor Holdings Bhd | 153,900 | 327,033 |
Security | Shares | Value | ||||||
Telekom Malaysia Bhd | 507,300 | $ | 835,526 | |||||
Tenaga Nasional Bhd | 1,332,200 | 3,540,637 | ||||||
TIME dotCom Bhda | 164,000 | 182,735 | ||||||
Top Glove Corp. Bhd | 216,400 | 404,504 | ||||||
TSH Resources Bhd | 265,200 | 185,695 | ||||||
UEM Sunrise Bhd | 744,500 | 571,167 | ||||||
UMW Holdings Bhd | 257,600 | 986,562 | ||||||
UOA Development Bhd | 248,800 | 170,424 | ||||||
WCT Holdings Bhd | 456,480 | 339,086 | ||||||
YTL Corp. Bhd | 2,267,500 | 1,069,983 | ||||||
YTL Power International Bhd | 1,018,700 | 496,208 | ||||||
|
| |||||||
74,809,851 | ||||||||
MEXICO — 4.88% |
| |||||||
Alfa SAB de CV Series A | 1,328,700 | 3,358,570 | ||||||
Alsea SAB de CVb | 215,100 | 544,355 | ||||||
America Movil SAB de CV Series L | 17,217,600 | 16,583,159 | ||||||
Arca Continental SAB de CV | 151,700 | 961,077 | ||||||
Axtel SAB de CV CPOa,b | 429,300 | 139,542 | ||||||
Banregio Grupo Financiero SAB de CVb | 94,300 | 560,913 | ||||||
Bolsa Mexicana de Valores SAB de CVb | 153,300 | 361,550 | ||||||
Cemex SAB de CV CPOa | 5,313,396 | 6,036,865 | ||||||
Coca-Cola FEMSA SAB de CV Series L | 195,500 | 2,330,567 | ||||||
Compartamos SAB de CV | 491,900 | 863,183 | ||||||
Concentradora Fibra Hotelera Mexicana SA | 215,900 | 388,077 | ||||||
Consorcio ARA SAB de CVa,b | 421,100 | 168,730 | ||||||
Controladora Comercial Mexicana SAB de CV BC Units | 188,100 | 712,841 | ||||||
Corporacion Inmobiliaria Vesta SAB de CVb | 202,800 | 396,578 | ||||||
El Puerto de Liverpool SA de CV Series C1 | 83,500 | 876,400 | ||||||
Empresas ICA SAB de CVa | 275,000 | 565,365 | ||||||
Fibra Uno Administracion SA de CV | 629,800 | 1,848,552 | ||||||
Fomento Economico Mexicano SAB de CV BD Units | 938,400 | 8,889,217 | ||||||
Genomma Lab Internacional SAB de CV Series Ba,b | 369,600 | 792,791 |
CONSOLIDATED SCHEDULEOF INVESTMENTS | 21 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
Grupo Aeromexico SAB de CVa,b | 84,400 | $ | 114,476 | |||||
Grupo Aeroportuario del Centro Norte SAB | 101,100 | 343,386 | ||||||
Grupo Aeroportuario del Pacifico SAB de CV Series B | 144,500 | 721,093 | ||||||
Grupo Aeroportuario del Sureste SAB de CV Series B | 98,000 | 1,100,592 | ||||||
Grupo Bimbo SAB de CV Series A | 770,000 | 2,240,451 | ||||||
Grupo Carso SAB de CV Series A1 | 268,800 | 1,328,297 | ||||||
Grupo Comercial Chedraui SA de CV | 155,700 | 445,224 | ||||||
Grupo Famsa SAB de CV Series Aa,b | 84,300 | 169,080 | ||||||
Grupo Financiero Banorte SAB de CV Series O | 1,142,400 | 7,143,422 | ||||||
Grupo Financiero Inbursa SAB de CV Series O | 1,076,100 | 2,295,336 | ||||||
Grupo Financiero Santander Mexico SAB de CV Series B | 845,800 | 2,305,172 | ||||||
Grupo Herdez SAB de CVb | 73,400 | 234,735 | ||||||
Grupo Mexico SAB de CV Series B | 1,790,300 | 5,122,039 | ||||||
Grupo Simec SAB de CV Series Ba,b | 53,300 | 195,643 | ||||||
Grupo Televisa SAB de CV CPO | 1,204,400 | 6,047,257 | ||||||
Industrias CH SAB de CV Series Ba | 87,400 | 502,589 | ||||||
Industrias Penoles SAB de CV | 64,685 | 1,975,625 | ||||||
Kimberly-Clark de Mexico SAB de CV Series A | 728,500 | 2,065,684 | ||||||
Macquarie Mexico Real Estate Management SA de CV | 252,000 | 459,194 | ||||||
Mexichem SAB de CV | 491,500 | 1,958,343 | ||||||
Minera Frisco SAB de CV Series A1a | 300,800 | 817,558 | ||||||
OHL Mexico SAB de CVa | 321,500 | 836,738 |
Security | Shares | Value | ||||||
TV Azteca SAB de CV CPOb | 466,600 | $ | 232,042 | |||||
Urbi Desarrollos Urbanos SAB de CVa,b | 558,900 | 38,080 | ||||||
Wal-Mart de Mexico SAB de CV Series V | 2,468,400 | 5,923,273 | ||||||
|
| |||||||
90,993,661 | ||||||||
MOROCCO — 0.06% |
| |||||||
Attijariwafa Bank | 10,474 | 388,327 | ||||||
Douja Promotion Groupe Addoha SA | 59,568 | 290,194 | ||||||
Managem | 903 | 138,807 | ||||||
Maroc Telecom SA | 32,928 | 347,303 | ||||||
|
| |||||||
1,164,631 | ||||||||
PERU — 0.41% |
| |||||||
Compania de Minas Buenaventura SA SP ADR | 93,999 | 1,187,207 | ||||||
Credicorp Ltd. | 33,634 | 4,077,786 | ||||||
Southern Copper Corp. | 86,013 | 2,365,358 | ||||||
|
| |||||||
7,630,351 | ||||||||
PHILIPPINES — 0.91% |
| |||||||
Aboitiz Equity Ventures Inc. | 899,560 | 927,797 | ||||||
Aboitiz Power Corp. | 817,900 | 596,003 | ||||||
Alliance Global Group Inc.a | 993,200 | 578,996 | ||||||
Atlas Consolidated Mining & Development Corp. | 487,000 | 152,870 | ||||||
Ayala Corp. | 84,250 | 1,029,512 | ||||||
Ayala Land Inc. | 2,604,300 | 1,547,398 | ||||||
Bank of the Philippine Islands | 339,650 | 700,623 | ||||||
BDO Unibank Inc. | 673,730 | 1,117,848 | ||||||
Belle Corp.a | 2,010,200 | 207,330 | ||||||
Cebu Air Inc. | 112,570 | 137,684 | ||||||
DMCI Holdings Inc. | 408,000 | 441,390 | ||||||
East West Banking Corp.a | 233,700 | 130,998 | ||||||
Energy Development Corp. | 3,227,500 | 416,825 | ||||||
Filinvest Land Inc. | 4,853,000 | 159,953 | ||||||
First Gen Corp. | 511,800 | 189,343 | ||||||
First Philippine Holdings Corp. | 98,750 | 177,130 | ||||||
Globe Telecom Inc. | 15,730 | 536,442 | ||||||
International Container Terminal Services Inc. | 369,710 | 787,499 | ||||||
Jollibee Foods Corp. | 195,370 | 705,260 | ||||||
Lopez Holdings Corp. | 1,197,300 | 135,569 | ||||||
Manila Water Co. Inc. | 345,100 | 254,569 |
22 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
Metro Pacific Investments Corp. | 4,909,800 | $ | 577,947 | |||||
Metropolitan Bank & Trust Co. | 125,060 | 228,529 | ||||||
Nickel Asia Corp. | 369,875 | 130,700 | ||||||
Philex Petroleum Corp.a | 245,200 | 65,973 | ||||||
Philippine Long Distance Telephone Co. | 19,945 | 1,287,034 | ||||||
Philippine National Banka | 97,174 | 163,409 | ||||||
Rizal Commercial Banking Corp. | 169,040 | 169,798 | ||||||
SM Investments Corp. | 65,315 | 981,190 | ||||||
SM Prime Holdings Inc. | 3,126,296 | 1,135,561 | ||||||
Universal Robina Corp. | 420,110 | 1,129,399 | ||||||
Vista Land & Lifescapes Inc. | 1,553,400 | 188,080 | ||||||
|
| |||||||
16,988,659 | ||||||||
POLAND — 1.69% |
| |||||||
Alior Bank SAa | 19,602 | 553,960 | ||||||
Asseco Poland SA | 36,837 | 520,741 | ||||||
Bank Handlowy w Warszawie SA | 15,743 | 497,416 | ||||||
Bank Millennium SAa | 213,090 | 437,665 | ||||||
Bank Pekao SA | 61,574 | 3,309,050 | ||||||
Bank Zachodni WBK SA | 13,943 | 1,343,162 | ||||||
BRE Bank SA | 7,366 | 1,005,566 | ||||||
Budimex SA | 7,296 | 203,619 | ||||||
Ciech SAa | 23,645 | 183,303 | ||||||
Cyfrowy Polsat SAa | 87,473 | 543,574 | ||||||
ENEA SA | 57,400 | 255,288 | ||||||
Eurocash SA | 40,223 | 644,761 | ||||||
Getin Holding SAb | 192,780 | 213,158 | ||||||
Getin Noble Bank SAa | 577,983 | 369,523 | ||||||
Globe Trade Centre SAa,b | 134,966 | 320,975 | ||||||
Grupa Azoty SA | 20,263 | 456,860 | ||||||
Grupa Lotos SAa | 31,897 | 375,247 | ||||||
Jastrzebska Spolka Weglowa SA | 20,479 | 429,662 | ||||||
Kernel Holding SAa | 24,187 | 354,093 | ||||||
KGHM Polska Miedz SA | 66,251 | 2,508,647 | ||||||
Lubelski Wegiel Bogdanka SAa | 17,139 | 601,076 | ||||||
Netia SAa,b | 137,714 | 222,027 | ||||||
Polska Grupa Energetyczna SA | 348,432 | 1,828,387 | ||||||
Polski Koncern Naftowy Orlen SA | 152,358 | 2,117,083 |
Security | Shares | Value | ||||||
Polskie Gornictwo Naftowe i | 852,461 | $ | 1,627,120 | |||||
Powszechna Kasa Oszczednosci Bank Polski SAa | 410,075 | 4,852,127 | ||||||
Powszechny Zaklad Ubezpieczen SA | 26,326 | 3,560,952 | ||||||
Synthos SA | 267,550 | 366,071 | ||||||
Tauron Polska Energia SA | 487,629 | 644,599 | ||||||
Telekomunikacja Polska SA | 314,407 | 742,866 | ||||||
TVN SA | 87,171 | 323,080 | ||||||
Warsaw Stock Exchange SA | 17,988 | 203,617 | ||||||
|
| |||||||
31,615,275 | ||||||||
RUSSIA — 5.07% |
| |||||||
Aeroflot — Russian Airlines OJSC | 198,256 | 290,630 | ||||||
Federal Grid Co. of Unified Energy | 140,530,000 | 447,166 | ||||||
Gazprom OAO | 5,530,440 | 21,903,884 | ||||||
IDGC Holding JSCa | 8,697,000 | 265,065 | ||||||
INTER RAO UES OJSCa | 969,300,000 | 344,318 | ||||||
LSR Group OJSC SP GDRd | 89,743 | 376,921 | ||||||
LUKOIL OAO | 240,157 | 13,878,093 | ||||||
Magnit OJSC SP GDRd | 123,403 | 6,848,867 | ||||||
Mechel OAO SP ADRa | 108,980 | 314,952 | ||||||
MegaFon OAO SP GDRd | 40,862 | 1,381,136 | ||||||
MMC Norilsk Nickel OJSC | 24,552 | 3,221,699 | ||||||
Mobile TeleSystems OJSC SP ADR | 244,280 | 5,168,965 | ||||||
NovaTek OAO SP GDRd | 42,962 | 5,146,848 | ||||||
OGK-2 OJSCa | 17,330,000 | 151,377 | ||||||
PIK Groupa | 148,920 | 295,085 | ||||||
Rosneft Oil Co. OJSC | 547,380 | 4,048,768 | ||||||
Rostelecom OJSC | 549,040 | 1,657,028 | ||||||
RusHydro OJSC | 50,859,000 | 825,430 | ||||||
Sberbank of Russia | 5,099,000 | 13,508,836 | ||||||
Severstal OAO | 98,080 | 812,548 | ||||||
Sistema JSFC SP GDRd | 54,643 | 1,209,796 | ||||||
Sollers OJSC | 7,774 | 144,751 | ||||||
Surgutneftegas OJSC | 3,351,900 | 2,624,110 | ||||||
Tatneft OAO Class S | 669,820 | 4,198,367 | ||||||
TMK OAO SP GDRd | 35,021 | 450,720 | ||||||
Uralkali OJSC | 626,020 | 2,979,436 | ||||||
VTB Bank OJSC | 1,506,310,000 | 2,012,755 | ||||||
|
| |||||||
94,507,551 |
CONSOLIDATED SCHEDULEOF INVESTMENTS | 23 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
SOUTH AFRICA — 7.46% |
| |||||||
Acucap Properties Ltd. | 87,312 | $ | 358,081 | |||||
Adcock Ingram Holdings Ltd. | 81,722 | 527,470 | ||||||
Adcorp Holdings Ltd. | 97,165 | 313,004 | ||||||
Advtech Ltd. | 308,268 | 196,261 | ||||||
Aeci Ltd. | 64,945 | 741,975 | ||||||
African Bank Investments Ltd. | 315,283 | 502,741 | ||||||
African Oxygen Ltd. | 79,133 | 156,087 | ||||||
African Rainbow Minerals Ltd. | 51,005 | 937,922 | ||||||
Anglo American Platinum Ltd.a | 31,117 | 1,245,014 | ||||||
AngloGold Ashanti Ltd. | 176,719 | 2,415,844 | ||||||
ArcelorMittal South Africa Ltd.a | 88,488 | 283,410 | ||||||
Aspen Pharmacare Holdings Ltd.a | 140,500 | 3,237,633 | ||||||
Assore Ltd. | 17,032 | 651,943 | ||||||
Astral Foods Ltd. | 25,673 | 235,396 | ||||||
Aveng Ltd. | 178,245 | 474,113 | ||||||
AVI Ltd. | 142,934 | 767,637 | ||||||
Barclays Africa Group Ltd. | 158,602 | 2,121,714 | ||||||
Barloworld Ltd. | 101,103 | 866,400 | ||||||
Bidvest Group Ltd. | 137,591 | 3,396,177 | ||||||
Blue Label Telecoms Ltd. | 251,170 | 214,602 | ||||||
Brait SEa | 162,125 | 637,197 | ||||||
Capital Property Fund | 653,820 | 626,304 | ||||||
Cashbuild Ltd. | 15,112 | 203,269 | ||||||
City Lodge Hotels Ltd. | 20,497 | 242,177 | ||||||
Clicks Group Ltd. | 115,122 | 616,360 | ||||||
Clover Industries Ltd. | 128,751 | 208,823 | ||||||
Coronation Fund Managers Ltd. | 113,775 | 744,354 | ||||||
DataTec Ltd. | 93,967 | 523,099 | ||||||
Discovery Ltd. | 139,684 | 1,154,326 | ||||||
DRDGOLD Ltd. | 307,508 | 182,865 | ||||||
Emira Property Fund | 210,220 | 293,130 | ||||||
EOH Holdings Ltd. | 50,442 | 325,083 | ||||||
Exxaro Resources Ltd. | 65,608 | 1,040,336 | ||||||
Famous Brands Ltd. | 26,039 | 241,549 | ||||||
FirstRand Ltd. | 1,435,752 | 4,215,708 | ||||||
Foschini Group Ltd. (The) | 92,081 | 865,243 | ||||||
Fountainhead Property Trust | 531,753 | 390,468 | ||||||
Gold Fields Ltd. | 336,421 | 1,770,965 | ||||||
Grindrod Ltd. | 175,248 | 398,548 | ||||||
Group Five Ltd. | 72,752 | 296,663 |
Security | Shares | Value | ||||||
Growthpoint Properties Ltd. | 839,987 | $ | 1,948,022 | |||||
Harmony Gold Mining Co. Ltd. | 182,988 | 690,605 | ||||||
Hosken Consolidated Investments Ltd. | 29,149 | 377,135 | ||||||
Hudaco Industries Ltd. | 24,301 | 218,237 | ||||||
Hyprop Investments Ltd. Units | 71,433 | 495,239 | ||||||
Illovo Sugar Ltd. | 114,036 | 367,463 | ||||||
Impala Platinum Holdings Ltd. | 249,091 | 2,760,651 | ||||||
Imperial Holdings Ltd. | 86,688 | 1,762,625 | ||||||
Investec Ltd. | 120,191 | 779,757 | ||||||
JD Group Ltd. | 47,509 | 127,575 | ||||||
JSE Ltd. | 43,130 | 331,024 | ||||||
Kumba Iron Ore Ltd. | 37,452 | 1,645,679 | ||||||
Lewis Group Ltd. | 38,265 | 215,705 | ||||||
Liberty Holdings Ltd. | 52,029 | 584,253 | ||||||
Life Healthcare Group Holdings Ltd. | 439,015 | 1,517,540 | ||||||
Massmart Holdings Ltd. | 49,204 | 756,774 | ||||||
Mediclinic International Ltd. | 150,000 | 1,079,631 | ||||||
Metair Investments Ltd. | 44,316 | 151,456 | ||||||
MMI Holdings Ltd. | 500,987 | 1,006,279 | ||||||
Mondi Ltd. | 56,152 | 861,005 | ||||||
Mpact Ltd. | 121,454 | 295,066 | ||||||
Mr. Price Group Ltd. | 111,919 | 1,368,470 | ||||||
MTN Group Ltd. | 792,472 | 14,536,263 | ||||||
Murray & Roberts Holdings Ltd.a | 209,613 | 530,122 | ||||||
Nampak Ltd. | 274,036 | 802,762 | ||||||
Naspers Ltd. Class N | 185,985 | 15,407,098 | ||||||
Nedbank Group Ltd. | 93,913 | 1,728,784 | ||||||
Netcare Ltd. | 455,745 | 1,033,337 | ||||||
Northam Platinum Ltd.a | 151,044 | 615,031 | ||||||
Omnia Holdings Ltd. | 28,403 | 538,051 | ||||||
Pick n Pay Holdings Ltd. | 107,740 | 182,846 | ||||||
Pick n Pay Stores Ltd. | 107,682 | 402,611 | ||||||
Pinnacle Technology Holdings Ltd. | 96,781 | 223,406 | ||||||
PPC Ltd. | 240,881 | 696,934 | ||||||
Redefine Properties Ltd. | 1,352,242 | 1,209,505 | ||||||
Remgro Ltd. | 222,835 | 4,068,953 | ||||||
Resilient Property Income Fund Ltd. | 117,029 | 559,947 | ||||||
Reunert Ltd. | 87,318 | 583,200 | ||||||
RMB Holdings Ltd. | 315,547 | 1,245,734 |
24 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
RMI Holdings Ltd. | 309,166 | $ | 780,991 | |||||
Royal Bafokeng Platinum Ltd.a | 29,516 | 164,282 | ||||||
SA Corporate Real Estate Fund Nominees | 579,985 | 217,473 | ||||||
Sanlam Ltd. | 854,726 | 3,841,718 | ||||||
Sappi Ltd.a | 241,250 | 576,446 | ||||||
Sasol Ltd. | 258,664 | 12,169,913 | ||||||
Shoprite Holdings Ltd. | 198,227 | 3,119,448 | ||||||
Sibanye Gold Ltd.a | 385,304 | 396,554 | ||||||
SPAR Group Ltd. (The) | 78,024 | 878,065 | ||||||
Standard Bank Group Ltd. | 565,855 | 6,326,569 | ||||||
Steinhoff International Holdings Ltd.a | 601,059 | 1,723,181 | ||||||
Sun International Ltd. | 54,121 | 498,457 | ||||||
Super Group Ltd.a | 151,877 | 326,266 | ||||||
Sycom Property Fund | 64,650 | 146,963 | ||||||
Telkom SA SOC Ltd.a | 120,614 | 269,706 | ||||||
Tiger Brands Ltd. | 75,569 | 2,086,578 | ||||||
Tongaat Hulett Ltd. | 49,944 | 575,470 | ||||||
Truworths International Ltd. | 200,164 | 1,603,110 | ||||||
Vodacom Group Ltd. | 172,742 | 1,957,664 | ||||||
Vukile Property Fund Ltd. | 186,336 | 277,657 | ||||||
Wilson Bayly Holmes-Ovcon Ltd. | 24,632 | 340,124 | ||||||
Woolworths Holdings Ltd. | 355,258 | 2,366,190 | ||||||
Zeder Investments Ltd. | 418,492 | 166,727 | ||||||
|
| |||||||
139,134,218 | ||||||||
SOUTH KOREA — 15.33% |
| |||||||
3S Korea Co. Ltd.a | 26,049 | 130,474 | ||||||
Able C&C Co. Ltd. | 4,510 | 141,998 | ||||||
Agabang & Co. | 15,758 | 85,884 | ||||||
Ahnlab Inc. | 3,816 | 199,386 | ||||||
AmorePacific Corp. | 1,466 | 1,188,595 | ||||||
AmorePacific Group | 1,366 | 451,621 | ||||||
Asia Cement Co. Ltd. | 2,555 | 199,557 | ||||||
Asiana Airlines Inc.a | 62,250 | 268,897 | ||||||
ATLASBX Co. Ltd. | 5,340 | 177,992 | ||||||
Binggrae Co. Ltd. | 2,981 | 242,229 | ||||||
Bioland Ltd. | 10,550 | 119,751 | ||||||
BS Financial Group Inc. | 76,940 | 987,699 | ||||||
Bukwang Pharmaceutical Co. Ltd. | 12,927 | 153,720 | ||||||
Busan City Gas Co. Ltd. | 9,360 | 238,206 | ||||||
Capro Corp. | 20,040 | 134,136 |
Security | Shares | Value | ||||||
Celltrion Inc. | 28,104 | $ | 1,141,832 | |||||
Chabio & Diostech Co. Ltd.a | 27,609 | 244,490 | ||||||
Cheil Industries Inc. | 5,913 | 470,355 | ||||||
Cheil Worldwide Inc.a | 44,110 | 945,739 | ||||||
Chong Kun Dang Pharm Corp. | 5,234 | 267,818 | ||||||
CJ CGV Co. Ltd. | 7,336 | 320,523 | ||||||
CJ CheilJedang Corp. | 3,646 | 835,915 | ||||||
CJ Corp. | 6,892 | 661,230 | ||||||
CJ E&M Corp.a | 10,216 | 351,102 | ||||||
CJ Freshway Corp. | 4,059 | 106,772 | ||||||
CJ O Shopping Co. Ltd. | 1,458 | 438,300 | ||||||
Com2uS Corp.a | 4,380 | 105,549 | ||||||
Cosmax Inc. | 5,646 | 238,800 | ||||||
Coway Co. Ltd. | 25,987 | 1,376,547 | ||||||
CUROCOM Co. Ltd.a | 63,840 | 93,455 | ||||||
Dae Won Kang Up Co. Ltd. | 17,910 | 107,617 | ||||||
Daeduck Electronics Co. | 23,080 | 188,582 | ||||||
Daeduck GDS Co. Ltd. | 12,030 | 206,993 | ||||||
Daekyo Co. Ltd. | 25,000 | 155,624 | ||||||
Daelim Industrial Co. Ltd. | 13,025 | 1,026,699 | ||||||
Daesang Corp. | 10,370 | 288,198 | ||||||
Daewoo Engineering & Construction Co. Ltd.a | 46,050 | 306,156 | ||||||
Daewoo International Corp. | 21,460 | 676,636 | ||||||
Daewoo Securities Co. Ltd. | 76,930 | 647,985 | ||||||
Daewoo Shipbuilding & Marine Engineering Co. Ltd. | 44,940 | 1,200,370 | ||||||
Daewoong Pharmaceutical Co. Ltd. | 3,217 | 203,155 | ||||||
Daishin Securities Co. Ltd. | 23,120 | 176,204 | ||||||
Daou Technology Inc. | 15,600 | 197,451 | ||||||
Daum Communications Corp. | 5,892 | 451,169 | ||||||
DGB Financial Group Inc. | 60,840 | 852,270 | ||||||
Dong-A Socio Holdings Co. Ltd. | 2,413 | 306,502 | ||||||
Dong-A ST Co. Ltd.a | 1,999 | 219,700 | ||||||
Dongbu Insurance Co. Ltd. | 19,862 | 842,755 | ||||||
Dongbu Steel Co. Ltd.a | 81,240 | 214,435 | ||||||
Dongkuk Steel Mill Co. Ltd. | 28,570 | 337,162 | ||||||
Dongsuh Companies Inc. | 11,136 | 290,927 | ||||||
Dongwon Industries Co. Ltd. | 784 | 204,113 | ||||||
Dongyang Mechatronics Corp. | 19,900 | 181,960 |
CONSOLIDATED SCHEDULEOF INVESTMENTS | 25 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
Doosan Corp. | 4,127 | $ | 514,922 | |||||
Doosan Engine Co. Ltd.a | 26,840 | 193,433 | ||||||
Doosan Heavy Industries & Construction Co. Ltd. | 22,149 | 851,002 | ||||||
Doosan Infracore Co. Ltd.a | 50,020 | 610,577 | ||||||
Duksan Hi-Metal Co. Ltd.a | 8,602 | 187,143 | ||||||
DuzonBIzon Co. Ltd. | 14,440 | 135,288 | ||||||
E-Mart Co. Ltd. | 10,200 | 1,892,888 | ||||||
E1 Corp. | 2,521 | 170,330 | ||||||
EG Corp. | 3,555 | 67,254 | ||||||
EO Technics Co. Ltd. | 5,760 | 217,936 | ||||||
Fila Korea Ltd. | 5,153 | 304,060 | ||||||
Foosung Co. Ltd.a | 48,500 | 185,471 | ||||||
Gamevil Inc.a | 3,299 | 165,834 | ||||||
GemVax & Kael Co. Ltd.a | 12,898 | 241,681 | ||||||
Global & Yuasa Battery Co. Ltd. | 4,384 | 196,481 | ||||||
Golfzon Co. Ltd. | 7,713 | 143,136 | ||||||
Grand Korea Leisure Co. Ltd. | 14,440 | 418,871 | ||||||
Green Cross Corp. | 3,379 | 382,023 | ||||||
Green Cross Holdings Corp. | 13,580 | 170,048 | ||||||
GS Engineering & Construction Corp. | 16,860 | 537,673 | ||||||
GS Global Corp. | 19,860 | 157,084 | ||||||
GS Holdings Corp. | 23,848 | 1,218,127 | ||||||
GS Home Shopping Inc. | 1,351 | 257,287 | ||||||
Gwangju Shinsegae Co. Ltd. | 600 | 132,697 | ||||||
Halla Engineering & Construction Corp. | 29,700 | 138,594 | ||||||
Halla Visteon Climate Control Corp. | 17,450 | 598,932 | ||||||
Hana Financial Group Inc. | 128,786 | 4,060,637 | ||||||
Hana Tour Service Inc. | 5,053 | 283,137 | ||||||
Hanall Biopharma Co. Ltd.a | 30,240 | 174,349 | ||||||
Hancom Inc. | 10,896 | 147,237 | ||||||
Handsome Co. Ltd. | 7,650 | 182,282 | ||||||
Hanil Cement Co. Ltd. | 3,184 | 170,953 | ||||||
Hanil E-Wha Co. Ltd. | 14,810 | 226,810 | ||||||
Hanjin Heavy Industries & Construction Co. Ltd.a | 25,800 | 283,555 | ||||||
Hanjin Shipping Co. Ltd.a | 36,550 | 282,838 | ||||||
Hanjin Transportation Co. Ltd. | 9,360 | 174,544 | ||||||
Hankook Shell Oil Co. Ltd. | 654 | 216,812 | ||||||
Hankook Tire Co. Ltd. | 34,872 | 1,809,493 | ||||||
Hankook Tire Worldwide Co. Ltd. | 11,840 | 257,055 |
Security | Shares | Value | ||||||
Hanmi Pharm Co. Ltd.a | 2,688 | $ | 322,061 | |||||
Hansae Co. Ltd. | 11,780 | 143,264 | ||||||
Hansol Chemical Co. Ltd. | 10,220 | 228,789 | ||||||
Hansol Paper Co. | 21,330 | 216,173 | ||||||
Hanssem Co. Ltd. | 5,630 | 188,165 | ||||||
Hanwha Chemical Corp. | 42,220 | 673,208 | ||||||
Hanwha Corp. | 23,690 | 695,729 | ||||||
Hanwha General Insurance Co. Ltd.a | 21,960 | 85,264 | ||||||
Hanwha Investment & Securities Co. Ltd.a | 59,490 | 172,835 | ||||||
Hanwha Life Insurance Co. Ltd. | 102,530 | 600,374 | ||||||
Hite Jinro Co. Ltd. | 13,630 | 308,810 | ||||||
HMC Investment Securities Co. Ltd. | 19,990 | 192,688 | ||||||
Hotel Shilla Co. Ltd. | 15,823 | 959,315 | ||||||
Huchems Fine Chemical Corp. | 16,730 | 323,281 | ||||||
Huvis Corp. | 14,320 | 138,678 | ||||||
Hwa Shin Co. Ltd. | 14,740 | 184,574 | ||||||
Hy-Lok Corp. | 10,111 | 212,230 | ||||||
Hyosung Corp. | 12,026 | 769,196 | ||||||
Hyundai Corp. | 9,320 | 209,900 | ||||||
Hyundai Department Store Co. Ltd. | 6,909 | 924,271 | ||||||
Hyundai Development Co. | 27,500 | 532,634 | ||||||
Hyundai Engineering & Construction Co. Ltd. | 33,457 | 1,730,041 | ||||||
Hyundai Glovis Co. Ltd. | 5,928 | 998,636 | ||||||
Hyundai Greenfood Co. Ltd. | 20,060 | 315,343 | ||||||
Hyundai Heavy Industries Co. Ltd. | 19,365 | 3,968,774 | ||||||
Hyundai Home Shopping Network Corp. | 2,636 | 389,446 | ||||||
Hyundai Hysco Co. Ltd. | 14,960 | 584,896 | ||||||
Hyundai Marine & Fire Insurance Co. Ltd. | 29,290 | 781,032 | ||||||
Hyundai Merchant Marine Co. Ltd.a | 28,760 | 480,607 | ||||||
Hyundai Mipo Dockyard Co. Ltd. | 5,403 | 657,092 | ||||||
Hyundai Mobis Co. Ltd. | 31,816 | 7,996,634 | ||||||
Hyundai Motor Co. | 72,322 | 16,222,853 | ||||||
Hyundai Securities Co. Ltd. | 59,790 | 307,016 |
26 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
Hyundai Steel Co. | 25,794 | $ | 1,705,580 | |||||
Hyundai Wia Corp. | 7,113 | 1,098,941 | ||||||
Iljin Display Co. Ltd. | 10,530 | 163,160 | ||||||
Ilyang Pharmaceutical Co. Ltd. | 7,050 | 175,289 | ||||||
iMarketKorea Inc. | 9,850 | 219,175 | ||||||
Industrial Bank of Korea | 74,830 | 761,749 | ||||||
Interflex Co. Ltd.a | 4,417 | 160,358 | ||||||
Interpark Corp. | 22,079 | 165,088 | ||||||
ISU Chemical Co. Ltd. | 15,340 | 211,434 | ||||||
JB Financial Group Co. Ltd.a | 53,570 | 297,276 | ||||||
JoyCity Corp. | 6,477 | 97,734 | ||||||
Jusung Engineering Co. Ltd.a | 29,960 | 165,717 | ||||||
Kangwon Land Inc. | 44,060 | 1,099,466 | ||||||
KB Financial Group Inc. | 80,780 | 2,597,942 | ||||||
KCC Corp. | 2,261 | 852,420 | ||||||
KEPCO Plant Service & Engineering Co. Ltd. | 7,113 | 338,333 | ||||||
Kia Motors Corp. | 122,648 | 7,424,842 | ||||||
KISWIRE Ltd. | 5,170 | 160,915 | ||||||
KIWOOM Securities Co. Ltd. | 6,350 | 296,320 | ||||||
Koh Young Technology Inc. | 7,535 | 214,161 | ||||||
Kolao Holdings | 10,324 | 280,875 | ||||||
Kolon Industries Inc. | 8,448 | 407,921 | ||||||
Komipharm International Co. Ltd.a | 21,035 | 141,554 | ||||||
Korea Aerospace Industries Ltd. | 19,130 | 465,303 | ||||||
Korea District Heating Corp. | 2,155 | 169,286 | ||||||
Korea Electric Power Corp.a | 120,040 | 3,319,876 | ||||||
Korea Gas Corp. | 10,732 | 536,576 | ||||||
Korea Investment Holdings Co. Ltd. | 18,050 | 639,039 | ||||||
Korea Kolmar Co. Ltd. | 8,760 | 160,987 | ||||||
Korea Zinc Co. Ltd. | 3,995 | 1,149,860 | ||||||
Korean Air Lines Co. Ltd.a | 15,420 | 391,734 | ||||||
Korean Reinsurance Co. | 42,510 | 448,058 | ||||||
KT Corp. | 14,190 | 461,474 | ||||||
KT Skylife Co. Ltd. | 9,700 | 288,365 | ||||||
KT&G Corp. | 51,361 | 3,359,136 | ||||||
Kukdo Chemical Co. Ltd. | 4,539 | 206,086 | ||||||
Kumho Petro Chemical Co. Ltd. | 6,360 | 528,257 | ||||||
Kumho Tire Co. Inc.a | 29,080 | 280,308 | ||||||
Kwang Dong Pharmaceutical Co. Ltd. | 29,020 | 196,072 |
Security | Shares | Value | ||||||
LG Chem Ltd. | 21,700 | $ | 5,620,242 | |||||
LG Corp. | 44,081 | 2,660,625 | ||||||
LG Display Co. Ltd.a | 109,150 | 2,881,037 | ||||||
LG Electronics Inc. | 50,115 | 3,268,615 | ||||||
LG Fashion Corp. | 9,300 | 216,571 | ||||||
LG Hausys Ltd. | 3,867 | 428,486 | ||||||
LG Household & Health Care Ltd. | 4,353 | 1,925,430 | ||||||
LG Innotek Co. Ltd.a | 5,587 | 424,291 | ||||||
LG International Corp. | 13,540 | 385,446 | ||||||
LG Life Sciences Ltd.a | 7,510 | 349,098 | ||||||
LG Uplus Corp.a | 101,050 | 1,187,967 | ||||||
LIG Insurance Co. Ltd. | 17,610 | 390,258 | ||||||
Lock & Lock Co. Ltd. | 10,450 | 216,992 | ||||||
Lotte Chemical Corp. | 7,851 | 1,212,960 | ||||||
Lotte Chilsung Beverage Co. Ltd. | 408 | 511,631 | ||||||
Lotte Confectionery Co. Ltd. | 380 | 517,598 | ||||||
Lotte Food Co. Ltd. | 429 | 235,746 | ||||||
Lotte Shopping Co. Ltd. | 5,032 | 1,543,530 | ||||||
LS Corp. | 8,061 | 513,412 | ||||||
LS Industrial Systems Co. Ltd. | 8,345 | 465,344 | ||||||
Lumens Co. Ltd.a | 23,338 | 180,388 | ||||||
Maeil Dairy Industry Co. Ltd. | 4,153 | 123,275 | ||||||
Mando Corp. | 5,799 | 650,399 | ||||||
Medipost Co. Ltd.a | 3,817 | 185,340 | ||||||
Medy-Tox Inc. | 2,520 | 245,178 | ||||||
MegaStudy Co. Ltd. | 2,867 | 188,284 | ||||||
Melfas Inc. | 10,727 | 115,962 | ||||||
Meritz Fire & Marine Insurance Co. Ltd. | 25,330 | 292,081 | ||||||
Meritz Securities Co. Ltd. | 165,490 | 204,244 | ||||||
Mirae Asset Securities Co. Ltd. | 12,140 | 349,419 | ||||||
Modetour Network Inc. | 8,176 | 176,402 | ||||||
Muhak Co. Ltd. | 10,842 | 176,785 | ||||||
Namhae Chemical Corp. | 30,160 | 202,416 | ||||||
Namyang Dairy Products Co. Ltd. | 306 | 221,909 | ||||||
NCsoft Corp. | 7,133 | 1,040,986 | ||||||
Neowiz Games Corp.a | 7,758 | 107,279 | ||||||
NEPES Corp. | 12,855 | 125,649 | ||||||
Nexen Corp. | 2,317 | 176,794 | ||||||
Nexen Tire Corp. | 17,690 | 250,995 |
CONSOLIDATED SCHEDULEOF INVESTMENTS | 27 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
NH Investment & Securities Co. Ltd. | 46,790 | $ | 203,591 | |||||
NHN Corp. | 12,717 | 5,115,211 | ||||||
NHN Entertainment Corp.a | 5,851 | 571,905 | ||||||
NICE Holdings Co. Ltd. | 29,780 | 280,349 | ||||||
Nong Shim Holdings Co. Ltd. | 3,142 | 206,910 | ||||||
NongShim Co. Ltd. | 1,606 | 345,781 | ||||||
OCI Co. Ltd. | 7,789 | 1,105,146 | ||||||
OCI Materials Co. Ltd. | 5,862 | 187,470 | ||||||
ORION Corp. | 1,681 | 1,493,145 | ||||||
Osstem Implant Co. Ltd.a | 7,024 | 171,479 | ||||||
Ottogi Corp. | 655 | 192,361 | ||||||
Paradise Co. Ltd. | 17,374 | 347,464 | ||||||
Partron Co. Ltd. | 22,377 | 366,886 | ||||||
Pharmicell Co. Ltd.a | 32,540 | 114,178 | ||||||
Poongsan Corp. | 12,580 | 290,687 | ||||||
POSCO | 30,413 | 8,835,811 | ||||||
POSCO Chemtech Co. Ltd. | 1,647 | 203,418 | ||||||
POSCO ICT Co. Ltd. | 28,993 | 239,508 | ||||||
Pyeong Hwa Automotive Co. Ltd. | 10,387 | 196,970 | ||||||
S&T Dynamics Co. Ltd. | 20,580 | 231,746 | ||||||
S-Oil Corp. | 20,947 | 1,449,241 | ||||||
S1 Corp. | 9,290 | 531,431 | ||||||
Samchully Co. Ltd. | 1,867 | 216,125 | ||||||
SamkwangGlass Co. Ltd. | 2,906 | 132,989 | ||||||
Samsung C&T Corp. | 58,054 | 2,996,707 | ||||||
Samsung Card Co. Ltd. | 17,210 | 561,238 | ||||||
Samsung Electro-Mechanics Co. Ltd. | 28,099 | 2,065,563 | ||||||
Samsung Electronics Co. Ltd. | 51,816 | 63,856,842 | ||||||
Samsung Engineering Co. Ltd. | 13,688 | 1,038,268 | ||||||
Samsung Fine Chemicals Co. Ltd. | 10,519 | 427,848 | ||||||
Samsung Fire & Marine Insurance Co. Ltd. | 16,884 | 3,802,531 | ||||||
Samsung Heavy Industries Co. Ltd. | 75,080 | 2,671,645 | ||||||
Samsung Life Insurance Co. Ltd. | 28,772 | 2,747,473 | ||||||
Samsung SDI Co. Ltd. | 15,977 | 2,432,425 | ||||||
Samsung Securities Co. Ltd. | 28,592 | 1,156,507 | ||||||
Samsung Techwin Co. Ltd. | 17,721 | 1,060,019 | ||||||
Sapphire Technology Co. Ltd.a | 4,287 | 155,252 |
Security | Shares | Value | ||||||
SBS Media Holdings Co. Ltd. | 27,610 | $ | 119,762 | |||||
SeAH Besteel Corp. | 6,840 | 183,008 | ||||||
SeAH Steel Corp. | 1,439 | 127,689 | ||||||
Sebang Co. Ltd. | 12,250 | 198,088 | ||||||
Seegene Inc.a | 4,224 | 202,438 | ||||||
Seobu T&Da | 7,477 | 123,937 | ||||||
Seoul Semiconductor Co. Ltd. | 15,736 | 530,889 | ||||||
SFA Engineering Corp. | 5,250 | 236,476 | ||||||
Shinhan Financial Group Co. Ltd. | 199,540 | 7,352,089 | ||||||
Shinsegae Co. Ltd. | 3,129 | 565,168 | ||||||
Shinsegae Food Co. Ltd. | 1,869 | 159,110 | ||||||
Shinsegae International Co. Ltd. | 1,101 | 82,522 | ||||||
Simm Tech Co. Ltd. | 20,864 | 158,446 | ||||||
Sindoh Co. Ltd. | 2,708 | 151,251 | ||||||
SK Broadband Co. Ltd.a | 74,787 | 338,211 | ||||||
SK C&C Co. Ltd. | 10,458 | 1,031,621 | ||||||
SK Chemicals Co. Ltd. | 7,470 | 313,255 | ||||||
SK Gas Co. Ltd. | 2,637 | 171,041 | ||||||
SK Holdings Co. Ltd. | 12,002 | 2,021,867 | ||||||
SK Hynix Inc.a,b | 245,510 | 6,248,059 | ||||||
SK Innovation Co. Ltd. | 28,016 | 3,533,390 | ||||||
SK Networks Co. Ltd. | 69,030 | 410,430 | ||||||
SK Securities Co. Ltd.a | 296,290 | 211,130 | ||||||
SK Telecom Co. Ltd. | 4,517 | 901,325 | ||||||
SKC Co. Ltd. | 11,020 | 296,832 | ||||||
SL Corp. | 9,180 | 132,318 | ||||||
SM Entertainment Co.a | 7,922 | 238,363 | ||||||
Soulbrain Co. Ltd. | 6,189 | 261,487 | ||||||
Ssangyong Motor Co.a | 24,880 | 188,945 | ||||||
STS Semiconductor & Telecommunications Co. Ltd.a | 31,902 | 131,051 | ||||||
STX Corp. Co. Ltd. | 37,810 | 137,609 | ||||||
STX Offshore & Shipbuilding Co. Ltd.a | 34,720 | 133,713 | ||||||
STX Pan Ocean Co. Ltd.a | 55,280 | 111,551 | ||||||
Sung Kwang Bend Co. Ltd. | 10,840 | 279,288 | ||||||
Sungwoo Hitech Co. Ltd. | 17,125 | 233,723 | ||||||
Suprema Inc.a | 8,325 | 166,867 | ||||||
Taekwang Industrial Co. Ltd. | 224 | 233,272 | ||||||
Taewoong Co. Ltd.a | 8,663 | 189,251 | ||||||
Taeyoung Engineering & Construction Co. Ltd. | 39,880 | 218,432 |
28 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
Taihan Electric Wire Co. Ltd.a | 53,500 | $ | 114,948 | |||||
Tera Resource Co. Ltd.a | 196,444 | 84,237 | ||||||
TK Corp.a | 9,148 | 194,077 | ||||||
TONGYANG Life Insurance Co. | 18,110 | 175,382 | ||||||
TONGYANG Securities Inc. | 68,100 | 183,432 | ||||||
ViroMed Co. Ltd.a | 6,775 | 203,546 | ||||||
WeMade Entertainment Co. Ltd.a | 4,089 | 187,865 | ||||||
Wonik IPS Co. Ltd.a | 32,098 | 190,844 | ||||||
Woori Finance Holdings Co. Ltd. | 167,880 | 1,678,724 | ||||||
Woori Financial Co. Ltd. | 9,080 | 175,866 | ||||||
Woori Investment & Securities Co. Ltd. | 57,810 | 567,658 | ||||||
YG Entertainment Inc. | 3,455 | 157,491 | ||||||
Youlchon Chemical Co. Ltd. | 24,270 | 262,367 | ||||||
Youngone Corp. | 10,930 | 300,315 | ||||||
Youngone Holdings Co. Ltd. | 2,938 | 162,509 | ||||||
Yuhan Corp. | 3,541 | 625,230 | ||||||
Yungjin Pharmaceutical Co. Ltd.a | 86,240 | 146,834 | ||||||
|
| |||||||
285,816,598 | ||||||||
TAIWAN — 12.92% |
| |||||||
A-DATA Technology Co. Ltd. | 110,000 | 245,551 | ||||||
Ability Enterprise Co. Ltd. | 211,000 | 155,124 | ||||||
AcBel Polytech Inc. | 279,000 | 308,607 | ||||||
Accton Technology Corp. | 431,000 | 236,928 | ||||||
Acer Inc.a | 1,195,000 | 796,680 | ||||||
Advanced Semiconductor Engineering Inc. | 2,856,000 | 2,524,393 | ||||||
Advantech Co. Ltd. | 136,000 | 690,805 | ||||||
Airtac International Group | 47,800 | 315,477 | ||||||
ALI Corp. | 204,000 | 219,853 | ||||||
Alpha Networks Inc. | 257,000 | 151,583 | ||||||
Altek Corp. | 322,000 | 178,623 | ||||||
Ambassador Hotel Ltd. (The) | 164,000 | 157,837 | ||||||
AmTRAN Technology Co. Ltd. | 408,000 | 262,461 | ||||||
Ardentec Corp. | 321,180 | 195,877 | ||||||
Asia Cement Corp. | 944,520 | 1,180,472 | ||||||
Asia Optical Co. Inc.a | 141,000 | 136,173 | ||||||
Asia Polymer Corp. | 258,000 | 196,144 | ||||||
ASUSTeK Computer Inc. | 314,000 | 2,502,598 | ||||||
AU Optronics Corp.a | 4,063,000 | 1,602,145 | ||||||
Bank of Kaohsiung Co. Ltd. | 948,776 | 302,789 |
Security | Shares | Value | ||||||
BES Engineering Corp. | 923,000 | $ | 248,605 | |||||
Capital Securities Corp. | 731,000 | 240,617 | ||||||
Career Technology (MFG.) Co. Ltd. | 206,000 | 220,288 | ||||||
Catcher Technology Co. Ltd. | 314,000 | 1,495,263 | ||||||
Cathay Financial Holding Co. Ltd. | 3,405,000 | 4,824,542 | ||||||
Cathay Real Estate Development Co. Ltd. | 379,000 | 274,835 | ||||||
Chailease Holding Co. Ltd. | 356,400 | 725,317 | ||||||
Chang Hwa Commercial Bank Ltd. | 2,033,000 | 1,100,590 | ||||||
Cheng Loong Corp. | 520,000 | 224,164 | ||||||
Cheng Shin Rubber Industry Co. Ltd. | 816,650 | 2,101,357 | ||||||
Cheng Uei Precision Industry Co. Ltd. | 204,000 | 406,984 | ||||||
Chia Hsin Cement Corp.a | 434,000 | 198,693 | ||||||
Chicony Electronics Co. Ltd. | 241,110 | 557,564 | ||||||
Chin-Poon Industrial Co. Ltd. | 209,000 | 368,070 | ||||||
China Airlines Ltd.a | 1,073,000 | 376,498 | ||||||
China Bills Finance Corp. | 544,000 | 209,059 | ||||||
China Development Financial Holding Corp. | 6,281,000 | 1,723,237 | ||||||
China Life Insurance Co. Ltd. | 854,000 | 843,312 | ||||||
China Manmade Fibers Corp.a | 617,000 | 249,485 | ||||||
China Metal Products Co. Ltd. | 169,320 | 248,397 | ||||||
China Motor Co. Ltd. | 230,000 | 198,299 | ||||||
China Petrochemical Development Corp. | 809,900 | 374,847 | ||||||
China Steel Chemical Corp. | 71,000 | 403,348 | ||||||
China Steel Corp. | 5,353,460 | 4,526,142 | ||||||
China Synthetic Rubber Corp. | 241,000 | 233,152 | ||||||
Chipbond Technology Corp. | 263,000 | 587,970 | ||||||
Chong Hong Construction Co. | 61,000 | 205,885 | ||||||
Chroma ATE Inc. | 204,000 | 472,429 | ||||||
Chung Hung Steel Corp.a | 847,000 | 242,853 | ||||||
Chunghwa Telecom Co. Ltd. | 1,836,000 | 5,804,127 | ||||||
Clevo Co. | 248,175 | 484,333 | ||||||
CMC Magnetics Corp.a | 1,439,000 | 234,668 | ||||||
Compal Communications Inc. | 158,000 | 199,318 | ||||||
Compal Electronics Inc. | 1,926,000 | 1,296,894 | ||||||
Compeq Manufacturing Co. Ltd. | 525,000 | 241,232 |
CONSOLIDATED SCHEDULEOF INVESTMENTS | 29 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
Continental Holdings Corp. | 727,000 | $ | 258,736 | |||||
Coretronic Corp. | 346,000 | 301,779 | ||||||
Coxon Precise Industrial Co. Ltd. | 78,000 | 150,399 | ||||||
CSBC Corp. Taiwan | 331,000 | 201,866 | ||||||
CTBC Financial Holding Co. Ltd. | 6,111,935 | 3,850,022 | ||||||
CTCI Corp. | 274,000 | 458,734 | ||||||
Cyberlink Corp. | 62,540 | 173,882 | ||||||
CyberTAN Technology Inc. | 258,000 | 298,311 | ||||||
D-Link Corp. | 445,000 | 242,393 | ||||||
Delta Electronics Inc. | 854,000 | 3,866,965 | ||||||
Depo Auto Parts Ind Co. Ltd. | 75,000 | 243,112 | ||||||
Dynapack International Technology Corp. | 62,000 | 165,336 | ||||||
E Ink Holdings Inc.a | 386,000 | 219,930 | ||||||
E.Sun Financial Holding Co. Ltd. | 2,158,200 | 1,366,703 | ||||||
Eclat Textile Co. Ltd. | 59,560 | 532,417 | ||||||
Elan Microelectronics Corp. | 204,000 | 344,948 | ||||||
Elite Material Co. Ltd. | 238,000 | 195,652 | ||||||
Elite Semiconductor Memory Technology Inc.a | 223,000 | 269,020 | ||||||
Entire Technology Co. Ltd.a | 152,000 | 169,654 | ||||||
Epistar Corp. | 408,000 | 668,081 | ||||||
Eternal Chemical Co. Ltd. | 336,000 | 273,969 | ||||||
EVA Airways Corp.a | 680,000 | 361,309 | ||||||
Evergreen International Storage & | 253,000 | 157,256 | ||||||
Evergreen Marine Corp. Ltd.a | 735,000 | 415,095 | ||||||
Everlight Chemical Industrial Corp. | 428,850 | 289,488 | ||||||
Everlight Electronics Co. Ltd. | 204,000 | 327,224 | ||||||
Far Eastern Department Stores Co. Ltd. | 412,000 | 423,365 | ||||||
Far Eastern International Bank Ltd. | 617,000 | 250,515 | ||||||
Far Eastern New Century Corp. | 1,456,560 | 1,564,885 | ||||||
Far EasTone Telecommunications Co. Ltd. | 816,000 | 2,064,235 | ||||||
Faraday Technology Corp. | 175,000 | 208,191 | ||||||
Farglory Land Development Co. Ltd. | 130,000 | 235,025 |
Security | Shares | Value | ||||||
Federal Corp. | 311,550 | $ | 230,608 | |||||
Feng Hsin Iron & Steel Co. Ltd. | 232,000 | 409,350 | ||||||
Feng Tay Enterprise Co. Ltd. | 192,640 | 404,921 | ||||||
Firich Enterprises Co. Ltd. | 105,000 | 271,233 | ||||||
First Financial Holding Co. Ltd. | 3,060,030 | 1,769,069 | ||||||
FLEXium Interconnect Inc. | 86,074 | 339,412 | ||||||
Forhouse Corp. | 470,000 | 184,548 | ||||||
Formosa Chemicals & Fibre Corp. | 1,491,210 | 3,871,978 | ||||||
Formosa Epitaxy Inc.a | 234,000 | 147,792 | ||||||
Formosa Petrochemical Corp. | 612,000 | 1,554,312 | ||||||
Formosa Plastics Corp. | 1,911,800 | 4,766,004 | ||||||
Formosa Taffeta Co. Ltd. | 261,000 | 238,981 | ||||||
Formosan Rubber Group Inc. | 384,000 | 309,258 | ||||||
Foxconn Technology Co. Ltd. | 428,400 | 1,092,313 | ||||||
Fubon Financial Holding Co. Ltd. | 3,060,000 | 4,192,551 | ||||||
G Tech Optoelectronics Corp. | 83,000 | 157,266 | ||||||
Gemtek Technology Corp. | 185,000 | 187,321 | ||||||
Genius Electronic Optical Co. Ltd. | 21,714 | 125,896 | ||||||
Getac Technology Corp. | 272,000 | 134,071 | ||||||
Giant Manufacturing Co. Ltd. | 119,000 | 801,300 | ||||||
Gigabyte Technology Co. Ltd. | 294,000 | 265,268 | ||||||
Gigastorage Corp. | 251,000 | 154,335 | ||||||
Gintech Energy Corp.a | 217,000 | 180,202 | ||||||
Global Mixed Mode Technology Inc. | 63,000 | 178,950 | ||||||
Global Unichip Corp. | 52,000 | 155,699 | ||||||
Gloria Material Technology Corp. | 340,200 | 211,456 | ||||||
Goldsun Development & Construction Co. Ltd. | 816,000 | 306,772 | ||||||
Grand Pacific Petrochemical Corp. | 494,000 | 339,244 | ||||||
Grape King Inc. | 61,000 | 262,962 | ||||||
Great Wall Enterprise Co. Ltd. | 253,000 | 215,593 | ||||||
Greatek Electronics Inc. | 185,000 | 153,937 | ||||||
HannStar Display Corp.a | 1,165,000 | 474,962 | ||||||
HannsTouch Solution Inc.a | 434,000 | 150,108 | ||||||
Hermes Microvision Inc. | 13,000 | 350,148 | ||||||
Hey Song Corp. | 163,000 | 166,135 | ||||||
Highwealth Construction Corp. | 204,400 | 454,230 |
30 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
Hiwin Technologies Corp. | 80,340 | $ | 526,212 | |||||
Ho Tung Chemical Corp.a | 597,000 | 266,335 | ||||||
Holy Stone Enterprise Co. Ltd. | 296,000 | 280,920 | ||||||
Hon Hai Precision Industry Co. Ltd. | 4,694,000 | 12,737,149 | ||||||
Hotai Motor Co. Ltd. | 98,000 | 969,373 | ||||||
HTC Corp. | 408,000 | 2,133,770 | ||||||
Hua Nan Financial Holdings Co. Ltd. | 2,356,200 | 1,283,432 | ||||||
Huaku Development Co. Ltd. | 106,000 | 311,009 | ||||||
Huang Hsiang Construction Co. | 37,000 | 82,842 | ||||||
Hung Poo Real Estate Development Corp. | 165,000 | 161,557 | ||||||
Hung Sheng Construction Co. Ltd. | 283,000 | 226,026 | ||||||
IEI Integration Corp. | 143,200 | 179,691 | ||||||
Innolux Corp.a | 3,214,000 | 1,611,055 | ||||||
International Games System Co. Ltd. | 66,000 | 136,524 | ||||||
Inventec Corp. | 1,139,000 | 926,821 | ||||||
ITEQ Corp. | 233,000 | 230,473 | ||||||
Jih Sun Financial Holdings Co. Ltd. | 468,251 | 129,563 | ||||||
Kee Tai Properties Co. Ltd. | 317,000 | 220,871 | ||||||
Kenda Rubber Industrial Co. Ltd. | 248,560 | 482,592 | ||||||
Kerry TJ Logistics Co. Ltd. | 124,000 | 153,112 | ||||||
Kindom Construction Co. | 176,000 | 234,082 | ||||||
King Slide Works Co. Ltd. | 27,000 | 229,177 | ||||||
King Yuan Electronics Co. Ltd. | 563,000 | 416,730 | ||||||
King’s Town Bank | 355,000 | 301,918 | ||||||
King’s Town Construction Co. Ltd.a | 106,000 | 100,069 | ||||||
Kinpo Electronics Inc. | 849,000 | 304,993 | ||||||
Kinsus Interconnect Technology Corp. | 120,000 | 439,105 | ||||||
Kuoyang Construction Co. Ltd. | 304,000 | 198,606 | ||||||
Largan Precision Co. Ltd. | 42,000 | 1,466,691 | ||||||
LCY Chemical Corp. | 249,000 | 295,809 | ||||||
Lealea Enterprise Co. Ltd. | 636,000 | 217,848 | ||||||
Lien Hwa Industrial Corp. | 282,000 | 172,454 |
Security | Shares | Value | ||||||
Lite-On Technology Corp. | 982,870 | $ | 1,665,241 | |||||
Long Bon International Co. Ltd. | 220,000 | 143,361 | ||||||
Macronix International Co. Ltd.a | 1,668,000 | 389,625 | ||||||
Makalot Industrial Co. Ltd. | 74,000 | 399,372 | ||||||
Masterlink Securities Corp. | 581,000 | 179,982 | ||||||
MediaTek Inc. | 612,000 | 7,505,689 | ||||||
Medigen Biotechnology Corp.a | 42,000 | 261,057 | ||||||
Mega Financial Holding Co. Ltd. | 3,908,000 | 2,984,103 | ||||||
Mercuries & Associates Ltd. | 169,560 | 113,892 | ||||||
Merida Industry Co. Ltd. | 74,000 | 484,686 | ||||||
Merry Electronics Co. Ltd. | 65,400 | 158,449 | ||||||
Micro-Star International Co. Ltd. | 456,000 | 267,433 | ||||||
Microbio Co. Ltd. | 209,141 | 219,453 | ||||||
MIN AIK Technology Co. Ltd. | 87,000 | 411,385 | ||||||
MiTAC International Corp. | 648,000 | 208,533 | ||||||
Motech Industries Inc.a | 151,000 | 191,497 | ||||||
MStar Semiconductor Inc. | 87,000 | 793,697 | ||||||
Nan Kang Rubber Tire Co. Ltd. | 277,000 | 323,982 | ||||||
Nan Ya Plastics Corp. | 2,266,440 | 4,438,282 | ||||||
Nan Ya Printed Circuit Board Corp.a | 123,000 | 134,408 | ||||||
National Petroleum Co. Ltd. | 188,000 | 162,716 | ||||||
Neo Solar Power Corp.a | 247,000 | 184,479 | ||||||
Novatek Microelectronics Corp. Ltd. | 234,000 | 973,550 | ||||||
OptoTech Corp. | 538,000 | 204,057 | ||||||
Oriental Union Chemical Corp. | 285,000 | 284,290 | ||||||
Pacific Hospital Supply Co. Ltd. | 75,000 | 268,175 | ||||||
Pan-International Industrial Corp. | 222,200 | 181,550 | ||||||
PChome Online Inc. | 43,000 | 244,281 | ||||||
Pegatron Corp.a | 762,000 | 1,178,987 | ||||||
Phihong Technology Co. Ltd. | 278,000 | 160,253 | ||||||
Phison Electronics Corp. | 64,000 | 449,130 | ||||||
Phytohealth Corp.a | 145,000 | 194,063 | ||||||
Pixart Imaging Inc. | 88,000 | 173,209 | ||||||
Pou Chen Corp. | 915,000 | 999,866 |
CONSOLIDATED SCHEDULEOF INVESTMENTS | 31 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
Powertech Technology Inc. | 306,000 | $ | 559,348 | |||||
President Chain Store Corp. | 260,000 | 1,815,903 | ||||||
President Securities Corp. | 303,000 | 171,121 | ||||||
Prince Housing & Development Corp. | 362,000 | 232,869 | ||||||
Qisda Corp.a | 939,000 | 219,339 | ||||||
Quanta Computer Inc. | 1,224,000 | 2,580,975 | ||||||
Radiant Opto-Electronics Corp. | 209,940 | 666,487 | ||||||
Radium Life Tech Co. Ltd. | 275,369 | 224,072 | ||||||
Realtek Semiconductor Corp. | 213,110 | 472,874 | ||||||
Rich Development Co. Ltd. | 506,770 | 221,001 | ||||||
Richtek Technology Corp. | 64,000 | 288,727 | ||||||
Ritek Corp.a | 1,451,000 | 257,475 | ||||||
Ruentex Development Co. Ltd. | 281,964 | 556,871 | ||||||
Ruentex Industries Ltd. | 216,000 | 536,310 | ||||||
Sampo Corp. | 802,000 | 253,803 | ||||||
Sanyang Industry Co. Ltd. | 329,000 | 456,265 | ||||||
ScinoPharm Taiwan Ltd. | 108,160 | 302,889 | ||||||
Senao International Co. Ltd. | 43,000 | 135,935 | ||||||
Sercomm Corp. | 156,000 | 211,392 | ||||||
Shih Wei Navigation Co. Ltd. | 235,675 | 155,938 | ||||||
Shihlin Electric & Engineering Corp. | 204,000 | 245,418 | ||||||
Shihlin Paper Corp.a | 98,000 | 143,114 | ||||||
Shin Kong Financial Holding Co. Ltd.a | 2,856,000 | 963,946 | ||||||
Shin Zu Shing Co. Ltd. | 70,000 | 147,839 | ||||||
Shining Building Business Co. Ltd.a | 183,700 | 141,806 | ||||||
Shinkong Synthetic Fibers Corp. | 852,000 | 279,022 | ||||||
Shinkong Textile Co. Ltd. | 114,000 | 145,145 | ||||||
Sigurd Microelectronics Corp. | 319,000 | 303,815 | ||||||
Silicon Integrated Systems Corp.a | 514,000 | 160,086 | ||||||
Siliconware Precision Industries Co. Ltd. | 1,428,000 | 1,603,395 | ||||||
Silitech Technology Corp. | 88,880 | 121,033 | ||||||
Simplo Technology Co. Ltd. | 141,000 | 673,796 | ||||||
Sincere Navigation Corp. | 157,000 | 132,475 | ||||||
Sino-American Silicon Products Inc.a | 239,000 | 275,543 | ||||||
SinoPac Financial Holdings Co. Ltd. | 2,997,086 | 1,337,068 |
Security | Shares | Value | ||||||
Sinyi Realty Co. | 91,760 | $ | 151,633 | |||||
Solar Applied Materials Technology Corp. | 269,000 | 229,227 | ||||||
Sonix Technology Co. Ltd. | 186,000 | 237,748 | ||||||
St.Shine Optical Co. Ltd. | 17,000 | 462,430 | ||||||
Standard Foods Corp. | 204,700 | 603,336 | ||||||
Synnex Technology International Corp. | 612,000 | 964,287 | ||||||
Ta Chen Stainless Pipe Co. Ltd. | 618,200 | 279,925 | ||||||
Ta Chong Bank Ltd.a | 633,675 | 200,747 | ||||||
Taichung Commercial Bank Co. Ltd. | 680,000 | 247,690 | ||||||
Taiflex Scientific Co. Ltd. | 120,000 | 199,101 | ||||||
Tainan Spinning Co. Ltd. | 462,840 | 225,817 | ||||||
Taishin Financial Holdings Co. Ltd. | 2,771,734 | 1,194,853 | ||||||
Taiwan Acceptance Corp. | 38,000 | 90,414 | ||||||
Taiwan Business Bank Ltd.a | 1,537,120 | 444,321 | ||||||
Taiwan Cement Corp. | 1,512,000 | 1,995,823 | ||||||
Taiwan Cogeneration Corp. | 325,000 | 205,267 | ||||||
Taiwan Cooperative Financial Holding Co. Ltd. | 2,431,640 | 1,300,147 | ||||||
Taiwan Fertilizer Co. Ltd. | 362,000 | 831,072 | ||||||
Taiwan Glass Industry Corp. | 423,000 | 388,022 | ||||||
Taiwan Hon Chuan Enterprise Co. Ltd. | 111,000 | 244,074 | ||||||
Taiwan Land Development Corp.a | 917,538 | 343,412 | ||||||
Taiwan Life Insurance Co. Ltd.a | 188,674 | 129,253 | ||||||
Taiwan Mobile Co. Ltd. | 816,000 | 2,945,012 | ||||||
Taiwan PCB Techvest Co. Ltd. | 144,042 | 170,398 | ||||||
Taiwan Prosperity Chemical Corp. | 115,000 | 128,356 | ||||||
Taiwan Secom Co. Ltd. | 133,000 | 315,561 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 11,542,000 | 38,763,254 | ||||||
Taiwan Surface Mounting Technology Co. Ltd. | 132,300 | 193,866 | ||||||
Taiwan TEA Corp.a | 357,000 | 223,091 | ||||||
Taiwan-Sogo Shinkong Security Corp. | 245,000 | 295,561 | ||||||
Tatung Co. Ltd.a | 919,000 | 222,652 |
32 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
Teco Electric and Machinery Co. Ltd. | 1,020,000 | $ | 1,068,589 | |||||
Test Research Inc. | 148,400 | 188,944 | ||||||
Test-Rite International Co. Ltd. | 222,000 | 168,775 | ||||||
Ton Yi Industrial Corp. | 370,000 | 338,786 | ||||||
Tong Hsing Electronic Industries Ltd. | 68,000 | 352,220 | ||||||
Tong Yang Industry Co. Ltd. | 180,400 | 234,509 | ||||||
Topco Scientific Co. Ltd. | 180,521 | 292,579 | ||||||
TPK Holding Co. Ltd. | 112,000 | 1,190,195 | ||||||
Transcend Information Inc. | 89,000 | 262,618 | ||||||
Tripod Technology Corp. | 204,000 | 404,257 | ||||||
Tsann Kuen Enterprise Co. Ltd. | 82,000 | 113,994 | ||||||
TSRC Corp. | 274,000 | 465,144 | ||||||
TTY Biopharm Co. Ltd. | 89,298 | 297,516 | ||||||
Tung Ho Steel Enterprise Corp. | 372,000 | 285,920 | ||||||
TXC Corp. | 164,000 | 220,863 | ||||||
U-Ming Marine Transport Corp. | 204,000 | 314,271 | ||||||
Uni-President Enterprises Co. | 2,046,860 | 3,727,844 | ||||||
Unimicron Technology Corp. | 612,000 | 496,971 | ||||||
Union Bank of Taiwana | 628,819 | 221,693 | ||||||
Unitech Printed Circuit Board Corp. | 638,000 | 253,712 | ||||||
United Microelectronics Corp. | 5,726,000 | 2,353,583 | ||||||
Unity Opto Technology Co. Ltd.a | 230,000 | 184,080 | ||||||
UPC Technology Corp. | 467,146 | 213,088 | ||||||
USI Corp. | 422,000 | 282,748 | ||||||
Vanguard International Semiconductor Corp. | 368,000 | 397,828 | ||||||
Visual Photonics Epitaxy Co. Ltd. | 173,000 | 181,241 | ||||||
Wah Lee Industrial Corp. | 204,000 | 282,571 | ||||||
Walsin Lihwa Corp.a | 1,585,000 | 468,755 | ||||||
Wan Hai Lines Ltd. | 471,000 | 254,982 | ||||||
Waterland Financial Holdings Co. Ltd. | 736,450 | 236,259 | ||||||
Wei Chuan Foods Corp. | 204,000 | 389,941 | ||||||
Win Semiconductors Corp. | 244,000 | 222,600 | ||||||
Winbond Electronics Corp.a | 1,373,000 | 316,128 | ||||||
Wintek Corp.a | 804,000 | 329,128 |
Security | Shares | Value | ||||||
Wisdom Marine Lines Co. Ltd. | 92,400 | $ | 110,851 | |||||
Wistron Corp. | 1,071,000 | 960,963 | ||||||
Wistron NeWeb Corp. | 116,384 | 219,354 | ||||||
Wowprime Corp. | 21,000 | 300,707 | ||||||
WPG Holdings Co. Ltd. | 667,000 | 766,756 | ||||||
WT Microelectronics Co. Ltd. | 204,000 | 228,716 | ||||||
Xxentria Technology Materials Corp. | 124,000 | 224,592 | ||||||
Yageo Corp.a | 1,005,000 | 334,502 | ||||||
Yang Ming Marine Transport Corp.a | 631,000 | 276,232 | ||||||
Yem Chio Co. Ltd. | 260,955 | 200,570 | ||||||
YFY Inc. | 529,000 | 258,096 | ||||||
Yieh Phui Enterprise Co. Ltd. | 741,000 | 232,766 | ||||||
Young Fast Optoelectronics Co. Ltd. | 93,000 | 128,353 | ||||||
Youngtek Electronics Corp. | 87,853 | 173,801 | ||||||
Yuanta Financial Holding Co. Ltd. | 3,877,000 | 1,943,391 | ||||||
Yulon Motor Co. Ltd. | 317,000 | 522,251 | ||||||
YungShin Global Holding Corp. | 144,000 | 238,199 | ||||||
Yungtay Engineering Co. Ltd. | 204,000 | 473,111 | ||||||
Zhen Ding Technology Holding Ltd. | 103,950 | 275,815 | ||||||
Zinwell Corp. | 303,000 | 305,283 | ||||||
|
| |||||||
241,024,804 | ||||||||
THAILAND — 2.52% |
| |||||||
Advanced Information Service PCL NVDR | 490,500 | 3,657,036 | ||||||
Airports of Thailand PCL NVDR | 211,900 | 1,076,286 | ||||||
Amata Corp. PCL NVDR | 357,200 | 188,642 | ||||||
AP (Thailand) PCL NVDR | 766,800 | 114,818 | ||||||
Bangchak Petroleum PCL NVDR | 237,100 | 233,859 | ||||||
Bangkok Bank PCL Foreign | 396,200 | 2,227,779 | ||||||
Bangkok Bank PCL NVDR | 282,000 | 1,568,127 | ||||||
Bangkok Chain Hospital PCL NVDR | 979,850 | 188,725 | ||||||
Bangkok Dusit Medical Services PCL NVDR | 182,700 | 732,162 | ||||||
Bangkok Expressway PCL NVDR | 217,300 | 229,519 | ||||||
Bangkok Land PCL NVDR | 4,806,800 | 194,124 |
CONSOLIDATED SCHEDULEOF INVESTMENTS | 33 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
Bank of Ayudhya PCL NVDR | 1,169,700 | $ | 1,380,820 | |||||
Banpu PCL NVDR | 49,950 | 428,276 | ||||||
BEC World PCL NVDR | 469,600 | 795,067 | ||||||
Bumrungrad Hospital PCL NVDR | 199,300 | 482,926 | ||||||
Central Pattana PCL NVDR | 653,800 | 751,494 | ||||||
Central Plaza Hotel PCL NVDR | 303,400 | 259,195 | ||||||
Charoen Pokphand Foods PCL NVDR | 1,282,500 | 924,324 | ||||||
CP All PCL NVDR | 2,084,300 | 2,120,560 | ||||||
Delta Electronics (Thailand) PCL NVDR | 268,800 | 365,331 | ||||||
Dynasty Ceramic PCL NVDR | 104,500 | 173,680 | ||||||
Esso (Thailand) PCL NVDR | 829,400 | 159,748 | ||||||
Glow Energy PCL NVDR | 247,000 | 481,493 | ||||||
Hana Microelectronics PCL NVDR | 338,800 | 223,130 | ||||||
Hemaraj Land and Development PCL NVDR | 2,490,500 | 215,085 | ||||||
Home Product Center PCL NVDR | 1,303,800 | 453,637 | ||||||
Indorama Ventures PCL NVDR | 715,400 | 384,480 | ||||||
IRPC PCL NVDR | 5,015,000 | 464,265 | ||||||
Jasmine International PCL NVDR | 1,824,200 | 410,856 | ||||||
Kasikornbank PCL Foreign | 548,400 | 2,708,779 | ||||||
Kasikornbank PCL NVDR | 334,700 | 1,653,225 | ||||||
Khon Kaen Sugar Industry PCL NVDR | 452,400 | 177,081 | ||||||
Kiatnakin Bank PCL NVDR | 208,300 | 255,603 | ||||||
Krung Thai Bank PCL NVDR | 1,693,600 | 868,108 | ||||||
LPN Development PCL NVDR | 278,800 | 165,427 | ||||||
Major Cineplex Group PCL NVDR | 351,000 | 173,374 | ||||||
Minor International PCL NVDR | 788,600 | 524,263 | ||||||
Polyplex PCL NVDR | 477,200 | 131,197 | ||||||
Pruksa Real Estate PCL NVDR | 351,000 | 171,193 | ||||||
PTT Exploration & Production PCL NVDR | 661,301 | 3,420,522 | ||||||
PTT Global Chemical PCL NVDR | 782,100 | 1,676,449 |
Security | Shares | Value | ||||||
PTT PCL NVDR | 403,600 | $ | 4,099,944 | |||||
Quality Houses PCL NVDR | 2,273,200 | 186,432 | ||||||
Siam Cement PCL Foreign | 142,800 | 1,756,720 | ||||||
Siam Cement PCL NVDR | 65,500 | 799,674 | ||||||
Siam Commercial Bank PCL NVDR | 836,600 | 3,495,579 | ||||||
Siam Global House PCL NVDR | 393,150 | 181,980 | ||||||
Sino-Thai Engineering & Construction | 427,728 | 244,492 | ||||||
Sri Trang Agro-Industry PCL NVDR | 426,400 | 176,176 | ||||||
Supalai PCL NVDR | 298,300 | 117,689 | ||||||
Thai Airways International PCL NVDR | 328,100 | 165,120 | ||||||
Thai Oil PCL NVDR | 398,200 | 674,181 | ||||||
Thai Tap Water Supply PCL NVDR | 895,000 | 272,476 | ||||||
Thai Vegetable Oil PCL NVDR | 310,600 | 164,997 | ||||||
Thaicom PCL NVDR | 235,900 | 219,851 | ||||||
Thanachart Capital PCL NVDR | 356,200 | 356,864 | ||||||
Thoresen Thai Agencies PCL NVDRa | 415,940 | 188,653 | ||||||
Ticon Industrial Connection PCL NVDR | 328,100 | 156,966 | ||||||
TISCO Financial Group PCL NVDR | 235,250 | 259,440 | ||||||
TPI Polene PCL NVDR | 377,500 | 127,827 | ||||||
True Corp. PCL NVDRa | 2,497,000 | 504,209 | ||||||
|
| |||||||
46,959,935 | ||||||||
TURKEY — 1.69% |
| |||||||
Akbank TAS | 863,022 | 2,870,742 | ||||||
Akfen Holding ASa | 75,525 | 135,617 | ||||||
Akmerkez Gayrimenkul Yatirim Ortakligi AS | 14,414 | 101,480 | ||||||
Aksa Akrilik Kimya Sanayii AS | 61,064 | 189,341 | ||||||
Albaraka Turk Katilim Bankasi ASa | 239,700 | 177,577 | ||||||
Anadolu Efes Biracilik ve Malt Sanayii ASb | 101,771 | 1,175,865 | ||||||
Arcelik AS | 122,744 | 620,269 | ||||||
Asya Katilim Bankasi ASa | 303,477 | 265,026 | ||||||
BIM Birlesik Magazalar AS | 102,779 | 1,890,942 |
34 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
Bizim Toptan Satis Magazalari AS | 13,860 | $ | 168,979 | |||||
Cimsa Cimento Sanayi ve TAS | 35,315 | 174,128 | ||||||
Coca-Cola Icecek AS | 31,804 | 745,851 | ||||||
Dogan Sirketler Grubu Holding ASa | 395,151 | 166,726 | ||||||
Dogan Yayin Holding ASa,b | 380,102 | 117,485 | ||||||
Dogus Otomotiv Servis ve TAS | 32,782 | 123,199 | ||||||
Emlak Konut Gayrimenkul Yatirim Ortakligi AS | 329,650 | 384,922 | ||||||
Enka Insaat ve Sanayi AS | 218,367 | 523,888 | ||||||
Eregli Demir ve Celik Fabrikalari TAS | 727,187 | 788,462 | ||||||
Ford Otomotiv Sanayi ASb | 38,039 | 475,896 | ||||||
Haci Omer Sabanci Holding AS | 396,584 | 1,692,766 | ||||||
Ipek Dogal Enerji Kaynaklari Ve Uretim ASa,b | 66,779 | 132,034 | ||||||
Is Gayrimenkul Yatirim Ortakligi AS | 287,306 | 166,329 | ||||||
Kardemir Karabuk Demir Celik Sanayi ve TAS Class Da | 509,518 | 249,978 | ||||||
KOC Holding AS | 319,153 | 1,290,235 | ||||||
Koza Altin Isletmeleri AS | 23,515 | 370,333 | ||||||
Koza Anadolu Metal Madencilik Isletmeleri ASa,b | 115,623 | 182,660 | ||||||
Sekerbank TASa,b | 214,692 | 192,757 | ||||||
Selcuk Ecza Deposu Ticaret ve Sanayi AS | 127,856 | 108,520 | ||||||
TAV Havalimanlari Holding AS | 86,471 | 468,787 | ||||||
Tofas Turk Otomobil Fabrikasi AS | 67,204 | 347,848 | ||||||
Trakya Cam Sanayii AS | 188,194 | 198,512 | ||||||
Turk Hava Yollari AO | 274,699 | 851,759 | ||||||
Turk Telekomunikasyon AS | 224,839 | 688,333 | ||||||
Turkcell Iletisim Hizmetleri ASa | 371,858 | 1,952,106 | ||||||
Turkiye Garanti Bankasi AS | 1,105,292 | 3,817,616 | ||||||
Turkiye Halk Bankasi AS | 303,046 | �� | 1,932,834 | |||||
Turkiye Is Bankasi AS Class C | 782,040 | 1,834,000 |
Security | Shares | Value | ||||||
Turkiye Petrol Rafinerileri AS | 62,463 | $ | 1,201,300 | |||||
Turkiye Sinai Kalkinma Bankasi AS | 350,444 | 294,007 | ||||||
Turkiye Sise ve Cam Fabrikalari AS | 270,504 | 349,037 | ||||||
Turkiye Vakiflar Bankasi TAO Class D | 388,706 | 762,823 | ||||||
Yapi Kredi Sigorta ASa | 20,770 | 186,479 | ||||||
Yapi ve Kredi Bankasi AS | 448,348 | 893,067 | ||||||
Yazicilar Holding ASb | 24,110 | 226,521 | ||||||
|
| |||||||
31,487,036 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $1,871,628,662) | 1,740,729,043 | |||||||
PREFERRED STOCKS — 6.07% |
| |||||||
BRAZIL — 4.83% |
| |||||||
AES Tiete SA | 44,000 | 372,034 | ||||||
Banco ABC Brasil SA | 32,821 | 164,989 | ||||||
Banco Bradesco SA | 999,670 | 11,652,724 | ||||||
Banco Daycoval SA | 37,800 | 126,095 | ||||||
Banco do Estado do Rio Grande do Sul SA Class B | 81,700 | 490,777 | ||||||
Banco Industrial e Comercial SA | 44,500 | 75,252 | ||||||
Banco Panamericano SA | 75,600 | 167,279 | ||||||
Banco Pine SA | 25,300 | 100,042 | ||||||
Bradespar SA | 104,400 | 1,083,438 | ||||||
Braskem SA Class A | 72,700 | 536,718 | ||||||
Centrais Eletricas Brasileiras SA Class B | 109,100 | 420,851 | ||||||
Centrais Eletricas Santa Catarina SA | 10,400 | 76,167 | ||||||
Companhia Brasileira de Distribuicao Grupo Pao de Acucar Class A | 61,200 | 2,515,760 | ||||||
Companhia de Bebidas das Americas | 326,400 | 11,423,725 | ||||||
Companhia de Ferro Ligas da | 32,200 | 181,779 | ||||||
Companhia Energetica de Minas Gerais | 250,145 | 1,957,217 | ||||||
Companhia Energetica de Sao Paulo Class B | 76,800 | 686,522 | ||||||
Companhia Energetica do Ceara Class A | 10,100 | 169,948 |
CONSOLIDATED SCHEDULEOF INVESTMENTS | 35 |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
Companhia Paranaense de Energia Class B | 44,400 | $ | 533,241 | |||||
Contax Participacoes SA | 94,300 | 142,410 | ||||||
Eletropaulo Metropolitana Eletricidade de Sao Paulo SA | 50,800 | 155,785 | ||||||
Eucatex SA Industria e Comercio | 44,000 | 111,980 | ||||||
Gerdau SA | 398,600 | 2,875,648 | ||||||
GOL Linhas Aereas Inteligentes SA | 49,000 | 174,382 | ||||||
Itau Unibanco Holding SA | 1,183,280 | 14,435,100 | ||||||
Itausa – Investimentos Itau SA | 1,329,589 | 4,675,822 | ||||||
Klabin SA | 225,500 | 1,167,720 | ||||||
Lojas Americanas SA | 191,300 | 1,216,749 | ||||||
Marcopolo SA | 221,800 | 619,532 | ||||||
Metalurgica Gerdau SA | 128,700 | 1,146,130 | ||||||
Oi SA | 329,400 | 490,525 | ||||||
Petroleo Brasileiro SA | 1,999,200 | 14,128,622 | ||||||
Randon SA Implementos e Participacoes | 56,500 | 275,703 | ||||||
Saraiva Livreiros Editores SA | 13,700 | 149,552 | ||||||
Suzano Papel e Celulose SA Class A | 134,900 | 533,426 | ||||||
Telefonica Brasil SA | 142,800 | 2,792,085 | ||||||
Usinas Siderurgicas de Minas Gerais SA Class A | 177,300 | 768,956 | ||||||
Vale SA Class A | 877,200 | 11,476,073 | ||||||
|
| |||||||
90,070,758 | ||||||||
CHILE — 0.10% |
| |||||||
Embotelladora Andina SA Class B | 128,186 | 653,451 | ||||||
Sociedad Quimica y Minera de Chile SA | 46,035 | 1,193,764 | ||||||
|
| |||||||
1,847,215 | ||||||||
COLOMBIA — 0.25% |
| |||||||
Banco Davivienda SA | 47,519 | 605,581 | ||||||
Bancolombia SA | 152,138 | 2,111,675 | ||||||
Grupo Argos SA | 53,136 | 599,241 | ||||||
Grupo Aval Acciones y Valores SA | 640,909 | 456,705 | ||||||
Grupo de Inversiones Suramericana SA | 40,202 | 809,188 | ||||||
|
| |||||||
4,582,390 |
Security | Shares | Value | ||||||
RUSSIA — 0.27% |
| |||||||
AK Transneft OAO | 816 | $ | 1,874,450 | |||||
Sberbank of Russia | 455,900 | 958,262 | ||||||
Surgutneftegas OJSC | 3,304,800 | 2,232,772 | ||||||
|
| |||||||
5,065,484 | ||||||||
SOUTH AFRICA — 0.01% |
| |||||||
Allied Electronics Corp. Ltd. | 124,608 | 263,671 | ||||||
|
| |||||||
263,671 | ||||||||
SOUTH KOREA — 0.61% |
| |||||||
Daishin Securities Co. Ltd. | 21,720 | 114,269 | ||||||
Hyundai Motor Co. Ltd. | 10,754 | 1,007,537 | ||||||
Hyundai Motor Co. Ltd. Series 2 | 17,136 | 1,728,960 | ||||||
LG Chem Ltd. | 3,298 | 392,177 | ||||||
Samsung Electronics Co. Ltd. | 9,792 | 8,106,705 | ||||||
|
| |||||||
11,349,648 | ||||||||
|
| |||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $132,913,824) |
| 113,179,166 | ||||||
RIGHTS — 0.00% |
| |||||||
CHILE — 0.00% |
| |||||||
Compania Sud Americana de Vapores SAa | 2,044,740 | 1,203 | ||||||
|
| |||||||
1,203 | ||||||||
CHINA — 0.00% | ||||||||
China Merchants Bank Co. Ltd. Class Ha | 319,464 | 72,508 | ||||||
|
| |||||||
72,508 | ||||||||
SOUTH KOREA — 0.00% | ||||||||
CUROCOM Co. Ltd.a | 7,972 | 2,622 | ||||||
|
| |||||||
2,622 | ||||||||
|
| |||||||
TOTAL RIGHTS |
| |||||||
(Cost: $0) |
| 76,333 | ||||||
WARRANTS — 0.00% |
| |||||||
THAILAND — 0.00% |
| |||||||
Bangkok Land PCL NVDR | 800,639 | 7,213 | ||||||
|
| |||||||
7,213 | ||||||||
|
| |||||||
TOTAL WARRANTS |
| |||||||
(Cost: $0) |
| 7,213 |
36 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Schedule of Investments (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
August 31, 2013
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS — 1.59% |
| |||||||
MONEY MARKET FUNDS — 1.59% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.15%e,f,g | 26,595,913 | $ | 26,595,913 | |||||
BlackRock Cash Funds: Prime, |
| |||||||
0.13%e,f,g | 1,688,821 | 1,688,821 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.00%e,f | 1,360,119 | 1,360,119 | ||||||
|
| |||||||
29,644,853 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $29,644,853) |
| 29,644,853 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $2,034,187,339) |
| 1,883,636,608 | ||||||
Other Assets, Less Liabilities — (1.00)% |
| (18,671,199 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% | $ | 1,864,965,409 | ||||||
|
|
CPO — Certificates of Participation (Ordinary)
NVDR — Non-Voting Depositary Receipts
NVS — Non-Voting Shares
SP ADR — Sponsored American Depositary Receipts
SP GDR — Sponsored Global Depositary Receipts
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 5. |
c | Security valued using Level 3 inputs in accordance with management’s fair valuation policy. See Note 1. |
d | This security may be resold to qualified 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. |
Financial futures contracts purchased as of August 31, 2013 were as follows:
Number of Contracts | Issue (Expiration) | Exchange | Notional Value | Net Unrealized Appreciation (Depreciation) | ||||||||||
213 | MSCI Emerging Markets E-Mini (Sept. 2013) | NYSE Liffe | $ | 9,769,245 | $ | (230,394) | ||||||||
See notes to consolidated financial statements.
CONSOLIDATED SCHEDULEOF INVESTMENTS | 37 |
Table of Contents
Consolidated Statement of Assets and Liabilities
iSHARES® CORE MSCI EMERGING MARKETS ETF
August 31, 2013
ASSETS | ||||
Investments, at cost: | ||||
Unaffiliated | $ | 2,004,542,486 | ||
Affiliated (Note 2) | 29,644,853 | |||
|
| |||
Total cost of investments | $ | 2,034,187,339 | ||
|
| |||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||
Unaffiliated | $ | 1,853,991,755 | ||
Affiliated (Note 2) | 29,644,853 | |||
|
| |||
Total fair value of investments | 1,883,636,608 | |||
Foreign currency, at valueb | 2,586,144 | |||
Cash | 5,474,712 | |||
Cash pledged to broker | 1,377,441 | �� | ||
Receivables: | ||||
Investment securities sold | 11,350,562 | |||
Dividends and interest | 3,062,900 | |||
|
| |||
Total Assets | 1,907,488,367 | |||
|
| |||
LIABILITIES | ||||
Payables: | ||||
Investment securities purchased | 11,773,156 | |||
Collateral for securities on loan (Note 5) | 28,284,734 | |||
Futures variation margin | 230,394 | |||
Line of credit (Note 8) | 2,000,131 | |||
Foreign taxes (Note 1) | 154,108 | |||
Investment advisory fees (Note 2) | 80,435 | |||
|
| |||
Total Liabilities | 42,522,958 | |||
|
| |||
NET ASSETS | $ | 1,864,965,409 | ||
|
| |||
Net assets consist of: | ||||
Paid-in capital | $ | 2,016,140,780 | ||
Undistributed net investment income | 9,146,582 | |||
Accumulated net realized loss | (9,468,471 | ) | ||
Net unrealized depreciation | (150,853,482 | ) | ||
|
| |||
NET ASSETS | $ | 1,864,965,409 | ||
|
| |||
Shares outstandingc | 40,800,000 | |||
|
| |||
Net asset value per share | $ | 45.71 | ||
|
|
a | Securities on loan with a value of $25,735,261. See Note 5. |
b | Cost of foreign currency: $2,600,407. |
c | $0.001 par value, number of shares authorized: 250 million. |
See notes to consolidated financial statements.
38 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Statement of Operations
iSHARES® CORE MSCI EMERGING MARKETS ETF
Period from October 18, 2012 (commencement of operations) through August 31, 2013
NET INVESTMENT INCOME | ||||
Dividends — unaffiliateda | $ | 24,409,000 | ||
Dividends — affiliated (Note 2) | 16,710 | |||
Interest — unaffiliated | 725 | |||
Interest — affiliated (Note 2) | 2,266 | |||
Securities lending income — affiliated (Note 2) | 182,325 | |||
|
| |||
Total investment income | 24,611,026 | |||
|
| |||
EXPENSES | ||||
Investment advisory fees (Note 2) | 1,376,356 | |||
Mauritius income taxes (Note 1) | 3,115 | |||
Commitment fees (Note 8) | 657 | |||
Interest expense (Note 8) | 8,152 | |||
|
| |||
Total expenses | 1,388,280 | |||
Less investment advisory fees waived (Note 2) | (991,766 | ) | ||
|
| |||
Net expenses | 396,514 | |||
|
| |||
Net investment income | 24,214,512 | |||
|
| |||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||
Net realized gain (loss) from: | ||||
Investments — unaffiliated | (11,198,572 | ) | ||
Investments — affiliated (Note 2) | 1,916,454 | |||
Futures contracts | (186,026 | ) | ||
Foreign currency transactions | (354,335 | ) | ||
|
| |||
Net realized loss | (9,822,479 | ) | ||
|
| |||
Net change in unrealized appreciation/depreciation on: | ||||
Investments | (150,550,731 | ) | ||
Futures contracts | (230,394 | ) | ||
Translation of assets and liabilities in foreign currencies | (72,357 | ) | ||
|
| |||
Net change in unrealized appreciation/depreciation | (150,853,482 | ) | ||
|
| |||
Net realized and unrealized loss | (160,675,961 | ) | ||
|
| |||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (136,461,449 | ) | |
|
|
a | Net of foreign withholding tax of $3,510,519. |
See notes to consolidated financial statements.
CONSOLIDATED FINANCIAL STATEMENTS | 39 |
Table of Contents
Consolidated Statement of Changes in Net Assets
iSHARES® CORE MSCI EMERGING MARKETS ETF
Period from to August 31, 2013 | ||||
INCREASE (DECREASE) IN NET ASSETS | ||||
OPERATIONS: | ||||
Net investment income | $ | 24,214,512 | ||
Net realized loss | (9,822,479 | ) | ||
Net change in unrealized appreciation/depreciation | (150,853,482 | ) | ||
|
| |||
Net decrease in net assets resulting from operations | (136,461,449 | ) | ||
|
| |||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||
From net investment income | (14,713,922 | ) | ||
|
| |||
Total distributions to shareholders | (14,713,922 | ) | ||
|
| |||
CAPITAL SHARE TRANSACTIONS: | ||||
Proceeds from shares sold | 2,016,140,780 | |||
|
| |||
Net increase in net assets from capital share transactions | 2,016,140,780 | |||
|
| |||
INCREASE IN NET ASSETS | 1,864,965,409 | |||
NET ASSETS | ||||
Beginning of period | — | |||
|
| |||
End of period | $ | 1,864,965,409 | ||
|
| |||
Undistributed net investment income included in net assets at end of period | $ | 9,146,582 | ||
|
| |||
SHARES ISSUED | ||||
Shares sold | 40,800,000 | |||
|
| |||
Net increase in shares outstanding | 40,800,000 | |||
|
|
a | Commencement of operations. |
See notes to consolidated financial statements.
40 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Consolidated Financial Highlights
iSHARES® CORE MSCI EMERGING MARKETS ETF
(For a share outstanding throughout the period)
Period from to Aug. 31, 2013 | ||||
Net asset value, beginning of period | $ | 49.06 | ||
|
| |||
Income from investment operations: | ||||
Net investment incomeb | 1.33 | |||
Net realized and unrealized lossc | (4.14 | ) | ||
|
| |||
Total from investment operations | (2.81 | ) | ||
|
| |||
Less distributions from: | ||||
Net investment income | (0.54 | ) | ||
|
| |||
Total distributions | (0.54 | ) | ||
|
| |||
Net asset value, end of period | $ | 45.71 | ||
|
| |||
Total return | (5.75 | )%d | ||
|
| |||
Ratios/Supplemental data: | ||||
Net assets, end of period (000s) | $ | 1,864,965 | ||
Ratio of expenses to average net assetse | 0.05 | % | ||
Ratio of expenses to average net assets prior to waived feese | 0.18 | % | ||
Ratio of net investment income to average net assetse | 3.17 | % | ||
Portfolio turnover ratef | 15 | % |
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, 2013 was 15%. See Note 4. |
See notes to consolidated financial statements.
CONSOLIDATED FINANCIAL HIGHLIGHTS | 41 |
Table of Contents
Notes to Consolidated Financial Statements
iSHARES® CORE MSCI EMERGING MARKETS ETF
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 Core ETF | Diversification Classification | |
MSCI Emerging Marketsa | Diversified |
a | The Fund commenced operations on October 18, 2012. |
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.
Non-diversified funds generally hold securities of fewer issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers.
The Fund 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 invests in securities of non-U.S. issuers that trade in non-U.S. markets. This involves 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. These risks are heightened for investments in emerging market and frontier market countries.
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.
42 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Consolidated Financial Statements (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
SECURITY VALUATION
The Fund’s investments are valued at fair value each day that the Fund’s listing exchange is open and, for financial reporting purposes, as of the report date should the reporting period end on a day that the Fund’s listing exchange is not 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 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, reviews of 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
NOTESTO CONSOLIDATED FINANCIAL STATEMENTS | 43 |
Table of Contents
Notes to Consolidated Financial Statements (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
transparency of the instrument and is not necessarily an indication of the risk associated with investing in the 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 Global Valuation Committee’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, 2013. The breakdown of the Fund’s investments into major categories is disclosed in its consolidated schedule of investments.
Investment Type | Investments | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: | ||||||||||||||||
Common Stocks | $ | 1,738,466,108 | $ | 2,262,935 | $ | 0 | a | $ | 1,740,729,043 | |||||||
Preferred Stocks | 113,179,166 | — | — | 113,179,166 | ||||||||||||
Rights | 1,203 | 75,130 | — | 76,333 | ||||||||||||
Warrants | 7,213 | — | — | 7,213 | ||||||||||||
Money Market Funds | 29,644,853 | — | — | 29,644,853 | ||||||||||||
Liabilities: | ||||||||||||||||
Futures Contractsb | (230,394 | ) | — | — | (230,394 | ) | ||||||||||
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$ | 1,881,068,149 | $ | 2,338,065 | $ | 0 | a | $ | 1,883,406,214 | ||||||||
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a | Rounds to less than $1. |
b | 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, 2013 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.
44 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Notes to Consolidated Financial Statements (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
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, stock dividends, capital gains on investments, or certain foreign currency transactions. 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 invest. 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 stock dividends are presented as “other foreign taxes,” and foreign taxes on capital gains from sales of investments and foreign taxes on foreign currency transactions are included in their respective net realized gain (loss) categories. Foreign taxes payable as of August 31, 2013, 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 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 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 legislative changes enacted by the 2012 India Finance Act (“the Act”) and its general anti-avoidance rules (“GAAR”), which are effective April 1, 2013 but have been proposed to be deferred until April 1, 2016, 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
NOTESTO CONSOLIDATED FINANCIAL STATEMENTS | 45 |
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Notes to Consolidated Financial Statements (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
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.
RECENT ACCOUNTING STANDARD
In December 2011, the Financial Accounting Standards Board issued guidance to enhance current disclosure requirements on offsetting of certain assets and liabilities and enable financial statement users to compare financial statements prepared under U.S. GAAP and International Financial Reporting Standards (IFRS). The new disclosures are required for investments and derivative financial instruments subject to master netting agreements or similar agreements and require an entity to disclose both gross and net information about such investments and transactions eligible for offset in the statement of assets and liabilities. The scope of the disclosure requirements for offsetting will be limited to certain derivative instruments and securities lending transactions. In addition, the standard requires disclosure of collateral received and posted in connection with master netting agreements or similar agreements. The guidance is effective for financial statements for fiscal years beginning after January 1, 2013, and interim periods within those fiscal years. Management is evaluating the impact of this guidance on the Fund’s financial statements and disclosures.
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 of 0.18% based on the average daily net assets of the Fund.
BFA has voluntarily waived a portion of its investment advisory fees for the Fund in the amount of $875,684.
BFA has contractually agreed to waive a portion of its investment advisory fees for the Fund through December 31, 2014 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, 2013, BFA waived its investment advisory fees for the Fund in the amount of $116,082.
The U.S. Securities and Exchange Commission has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (“BTC”), an affiliate of BFA, to serve as securities lending agent for the Fund, subject to applicable conditions. 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 a portion of securities lending income and remits a remaining portion to BTC as compensation for its services as securities lending agent. The Fund benefits from a borrower default indemnity provided by BlackRock. As securities lending agent, BTC bears all operational costs directly related to securities lending as well
46 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Notes to Consolidated Financial Statements (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
as the cost of borrower default indemnification. 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 period ended August 31, 2013, the Fund retained 65% of securities lending income and paid a fee to BTC equal to 35% of such income in the amount of $98,175.
BlackRock Investments, LLC, an affiliate of BFA, is the distributor for the Fund. Pursuant to the 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 period ended August 31, 2013, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:
Name of Affiliated Issuer | Shares Held at Beginning of Period | Shares Purchased | Shares Sold | Shares Held of Period | Value at of Period | Dividend Income | Net Realized | |||||||||||||||||||||
iShares India 50 ETF | — | 243,250 | (243,250 | ) | — | $ | — | $ | 612 | $ | 87,227 | |||||||||||||||||
iShares MSCI Chile Capped ETF | — | 24,667 | (24,667 | ) | — | — | — | (93,930 | ) | |||||||||||||||||||
iShares MSCI India ETF | — | 2,965,928 | (2,965,928 | ) | — | — | 4,928 | 2,019,750 | ||||||||||||||||||||
iShares MSCI India Small-Cap ETF | — | 51,223 | (51,223 | ) | — | — | 11,170 | (96,593 | ) | |||||||||||||||||||
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$ | — | $ | 16,710 | $ | 1,916,454 | |||||||||||||||||||||||
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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 period ended August 31, 2013, were $1,958,596,200 and $130,353,563, respectively.
In-kind purchases and sales (see Note 4) for the period ended August 31, 2013, were $185,688,644 and $ —, 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.
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Notes to Consolidated Financial Statements (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
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 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 may also 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 market value of the loaned securities is determined at the close of each business day of the Fund and any additional required collateral is delivered to the Fund on the next business day. 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.
As of August 31, 2013, any securities on loan were collateralized by cash. The cash collateral received was invested in money market funds managed by BFA. The value of any securities on loan as of August 31, 2013 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.
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. To mitigate these risks, the Fund benefits from a borrower default indemnity provided by BlackRock. BlackRock’s indemnity allows for full replacement of securities lent. The Fund could suffer a loss if the value of the investments purchased with cash collateral falls below the value of the cash collateral received.
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, 2013, attributable to passive foreign investment companies and foreign currency transactions, 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 | ||||||||
$ — | $ | (354,008) | $ | 354,008 |
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Notes to Consolidated Financial Statements (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
The tax character of distributions paid during the period ended August 31, 2013 was as follows:
2013 | ||||
Ordinary Income | $ | 14,713,922 | ||
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| |||
As of August 31, 2013, the tax components of accumulated net earnings (losses) were as follows:
Undistributed Ordinary | Net Unrealized Gains (Losses) a | Qualified Late-Year Losses b | Total | |||||||||||
$ | 9,716,521 | $(153,861,801 | ) | $ | (7,030,091 | ) | $ | (151,175,371 | ) |
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, 2014. |
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, 2013, the cost of investments for federal income tax purposes was $2,037,426,051. Net unrealized depreciation was $153,789,443, of which $50,093,570 represented gross unrealized appreciation on securities and $203,883,013 represented gross unrealized depreciation on securities.
Management has reviewed the tax positions as of August 31, 2013, 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.
NOTESTO CONSOLIDATED FINANCIAL STATEMENTS | 49 |
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Notes to Consolidated Financial Statements (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
The following table shows the value of futures contracts held by the Fund as of August 31, 2013 and the related locations in the consolidated statement of assets and liabilities, presented by risk exposure category:
Liabilities | ||||
Equity contracts: | ||||
Variation margin/Net assets consist of — | $ | (230,394 | ) | |
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| |||
a | Represents cumulative depreciation of futures contracts as reported in the consolidated schedule of investments. |
The following table shows the realized and unrealized gains (losses) on futures contracts held by the Fund during the period ended August 31, 2013 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 | $ | (186,026 | ) | $ | (230,394 | ) | ||
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For the period ended August 31, 2013, the average quarter-end number of contracts and notional value of open futures contracts for the Fund were 112 and $5,315,308, 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 30, 2013. The line of credit may be used for temporary or emergency purposes, including redemptions, settlement of trades and rebalancing of portfolio holdings. 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 securities of certain foreign markets.
For the period ended August 31, 2013, the Fund’s maximum amount borrowed, the average borrowings and the average interest rate under the credit agreement were $75,000,000, $672,390 and 1.20%, 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.
50 | 2013 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 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 Core MSCI Emerging Markets ETF and its subsidiary (the “Fund”) at August 31, 2013, the results of its operations, the changes in its net assets and its financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These consolidated financial statements and consolidated 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 audit. We conducted our audit 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 audit, which included confirmation of securities at August 31, 2013 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
October 23, 2013
REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 51 |
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iSHARES® CORE MSCI EMERGING MARKETS ETF
For the fiscal period ended August 31, 2013, the Fund earned foreign source income of $27,919,519 and paid foreign taxes of $3,471,723 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 $15,223,613 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, 2013.
In February 2014, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2013. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.
52 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Board Review and Approval of Investment Advisory
Contract
iSHARES® CORE MSCI EMERGING MARKETS ETF
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 and approve 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 March 7, 2013, April 23, 2013, and May 3, 2013, 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 16, 2013, management presented preliminary 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 5, 2013, to discuss the additional requests. At a meeting held on June 10-11, 2013, the Board, including the Independent Directors, reviewed the 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 the supplemental information management provided at the request of the Independent Directors. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information 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 reached 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 the size, sponsor, inception date, or other differentiating factors included in Lipper’s proprietary selection methodology, 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 an index similar to that tracked by the Fund, the Lipper Group included in part mutual funds, closed-end funds, exchange traded funds, and/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 provided in the Lipper Report may or may not provide meaningful direct comparisons to the Fund.
The Board also noted that the investment advisory fee rate and overall expenses for the Fund compared favorably to the investment advisory fee rates and overall expenses of the funds in its respective 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, 2012, 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
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 53 |
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Board Review and Approval of Investment Advisory
Contract (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
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 may include funds that are not exchange traded funds or index funds, and that may have different investment objectives and/or benchmarks from the Fund. In addition, the Board noted that the Fund seeks to track its own benchmark index and that, during the prior year, the Board received periodic reports on the Fund’s performance in comparison with its relevant benchmark index. Such periodic comparative performance information, including detailed information on certain specific iShares funds requested by the Board, was also considered.
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 fee rate and expense level 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, including information about recent and proposed enhancements to the iShares business, including with respect to shareholder servicing and support, 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 during 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 acknowledged that resources to support the iShares funds and their shareholders have been added or enhanced since BlackRock’s acquisition of BFA in December 2009, 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 detailed presentations regarding BFA’s investment and risk management processes and strategies provided at the June 10-11, 2013 meeting and throughout the previous year, 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 the Fund and Profits Realized by BFA and its Affiliates — The Board reviewed information about the profitability to BlackRock 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)
54 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Board Review and Approval of Investment Advisory
Contract (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
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 relatively low fee rates established at inception, 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 BlackRock’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 rate 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 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 to the Fund, as well as other significant differences in the approach of BFA and its affiliates to the Fund, on one hand, and to the 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 and challenges 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 rate under the Advisory Contract for the Fund was 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. The Board further noted that the advisory fee rate for the Fund is lower than those of certain iShares index funds that invest in the same asset class, and acknowledged management’s assertion that the Fund’s advisory fee rate is reflective of a discount to the full value of the services rendered by BFA to the Fund.
Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or 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
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 55 |
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Board Review and Approval of Investment Advisory
Contract (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
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 rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that it is in the best interest of the Fund and its shareholders to approve the continuance of the Advisory Contract for the coming year.
56 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited)
iSHARES® CORE MSCI EMERGING MARKETS ETF
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 | |||||||||||||||||||||||
$ | 0.536788 | $ | — | $ | — | $ | 0.536788 | 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 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. The information shown for the Fund is for each full calendar quarter completed after the inception date of the Fund through the date of the most recent calendar quarter-end.
SUPPLEMENTAL INFORMATION | 57 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES® CORE MSCI EMERGING MARKETS ETF
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, 2013 through June 30, 2013
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 1.5% and Less than 2.0% | 3 | 2.42 | % | |||||
Greater than 1.0% and Less than 1.5% | 7 | 5.65 | ||||||
Greater than 0.5% and Less than 1.0% | 35 | 28.22 | ||||||
Between 0.5% and –0.5% | 67 | 54.02 | ||||||
Less than –0.5% and Greater than –1.0% | 7 | 5.65 | ||||||
Less than –1.0% and Greater than –1.5% | 3 | 2.42 | ||||||
Less than –1.5% and Greater than –2.0% | 1 | 0.81 | ||||||
Less than –2.0% and Greater than –2.5% | 1 | 0.81 | ||||||
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124 | 100.00 | % | ||||||
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58 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Director and Officer Information
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 of the Company (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 ETF, Inc. and a Trustee of iShares U.S. ETF Trust and, as a result, oversees a total of 298 funds (as of August 31, 2013) 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 (56) | Director (since 2009). | President and Director, BlackRock, Inc. (since 2006); 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 2006); Trustee of iShares Trust (since 2009); Director of iShares MSCI Russia Capped ETF, 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 ETF, 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 Company due to his affiliations with BlackRock, Inc. |
b | Michael Latham is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BlackRock, Inc. and its affiliates. |
DIRECTORAND OFFICER INFORMATION | 59 |
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Director and Officer Information (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 (58) | 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 Paine Webber Inc.) (2003-2005) 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Independent Chairman of iShares, Trust, iShares MSCI Russia Capped ETF, Inc. and iShares U.S. ETF Trust (since 2012). | |||
Cecilia H. Herbert (64) | Director (since 2005); Nominating and Governance Committee Chair and Equity Plus Committee Chair (since 2012). | Trustee and Member (since 2011) of the Investment Committee, WNET, the New York public broadcasting company; Director (since 1998) and President (2007-2011) of the Board of Directors, Catholic Charities CYO; Trustee (2002-2011) and Chair of the Finance and Investment Committee (2006-2010), the Thacher School; 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of Forward Funds (34 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 ETF, 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 (2 portfolios) (since 2002). | |||
John E. Kerrigan (58) | 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). |
60 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Director and Officer Information (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 (52) | 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 ETF, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). | |||
George G.C. Parker (74) | 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 2000); Director of iShares MSCI Russia Capped ETF, 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 (49) | 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 (2007-2008). | Trustee of iShares Trust (since 2011); Director of iShares MSCI Russia Capped ETF, Inc. (since 2011); Trustee of iShares U.S. ETF Trust (since 2011). |
DIRECTORAND OFFICER INFORMATION | 61 |
Table of Contents
Director and Officer Information (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 of Legal & Compliance, BlackRock (since 2006); Director of Legal & Compliance, BlackRock (2004-2006). | ||
Eilleen M. Clavere (61) | Secretary (since 2007). | Director of Global Fund Administration, BlackRock (since 2009); Director of Legal Administration of Intermediary Investor Business, BGI (2006-2009); Legal Counsel and Vice President of Atlas Funds, Atlas Advisers, Inc. and Atlas Securities, Inc. (2005-2006); Counsel of Kirkpatrick & Lockhart LLP (2001-2005). | ||
Jack Gee (53) | Treasurer and Chief Financial Officer | 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). | ||
Scott Radell (44) | Executive Vice President (since 2012). | Managing Director, BlackRock (since 2009); Head of Portfolio Solutions, BlackRock (since 2009); Head of Portfolio Solutions, BGI (2007-2009); Credit Portfolio Manager, BGI (2005-2007); Credit Research Analyst, BGI (2003-2005). | ||
Amy Schioldager (50) | Executive Vice President (since 2007). | Senior Managing Director, BlackRock (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008); Head of Domestic Equity Portfolio Management, BGI (2001-2006). | ||
Ira P. Shapiro (50) | Vice President (since 2007). | Managing Director, BlackRock (since 2009); Head of Strategic Product Initiatives for iShares (since 2012); Chief Legal Officer, Exchange-Traded Fund Complex (2007-2012); Associate General Counsel, BGI (2004-2009). |
62 | 2013 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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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.
©2013 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc. or its subsidiaries. All other marks are the property of their respective owners.
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iS-AR-813-0813
Table of Contents
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, 2013, 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).
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 fifty series of the Registrant for which the fiscal year-end is August 31, 2013 (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 Funds’ annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years, were $706,950 for the fiscal year ended August 31, 2012 and $782,510 for the fiscal year ended August 31, 2013. |
(b) | Audit-Related Fees – There were no fees billed for the fiscal years ended and August 31, 2013 for assurance and related services by the principal accountant that were reasonably related to the performance of the audit of the Funds’ financial statements and are not reported under (a) of this Item. |
(c) | Tax Fees – The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for the review of the Funds’ tax returns and excise tax calculations, were $230,230 for the fiscal year ended August 31, 2012 and $193,500 for the fiscal year ended August 31, 2013. |
(d) | All Other Fees – There were no other fees billed for the fiscal years ended August 31, 2012 and August 31, 2013 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 Funds’ financial statements for the fiscal year ended August 31, 2013 were attributable to work performed by persons other than the principal accountant’s full-time, permanent employees. |
(g) | The aggregate non-audit fees billed by the Registrant’s principal accountant for services rendered to the Funds, and rendered to the Registrant’s investment adviser, and any Adviser Affiliate that provides ongoing services to the Registrant for the last two fiscal years were, $4,042,680 for the fiscal year ended August 31, 2012 and $4,054,391 for the fiscal year ended August 31, 2013. |
(h) | The Registrant’s audit committee has considered whether the provision of non-audit services rendered to the Registrant’s investment adviser and any Adviser Affiliate that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, if any, are compatible with maintaining the principal accountant’s independence, and has determined that the provision of these services do not compromise the principal accountant’s independence. |
Item 5. Audit Committee of Listed Registrants.
The Registrant is a listed issuer as defined in Rule 10A-3 under the Exchange Act and has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Registrant’s audit committee members are George G.C. Parker, Cecilia H. Herbert, Charles A. Hurty, John E. Kerrigan, Robert H. Silver, John E. Martinez and Madhav V. Rajan.
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Item 6. 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 29, 2013 |
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 29, 2013 | |
By: | /s/ Jack Gee | |
Jack Gee, Treasurer and Chief Financial Officer (Principal Financial Officer) | ||
Date: | October 29, 2013 |