-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RgouTuqoS0oMpsS7Qti3bRh5J0QyrsWLx2ImdU1ottaMcMf5um08F5o7eW3GuIvr 02JkEBCCMAkmKw4dYvNJYA== 0000927016-02-000006.txt : 20020413 0000927016-02-000006.hdr.sgml : 20020413 ACCESSION NUMBER: 0000927016-02-000006 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20011031 FILED AS OF DATE: 20020102 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ISHARES TRUST CENTRAL INDEX KEY: 0001100663 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 943351276 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 001-15897 FILM NUMBER: 2500183 BUSINESS ADDRESS: STREET 1: 45 FREMONT STREET CITY: SAN FRANCISCO STATE: CA ZIP: 94105 N-30D 1 dn30d.txt DXOW JONES - I SHARES SEMI ANNUAL REPORT iShares Dow Jones Series iShares Cohen & Steers Series SEMI-ANNUAL REPORT October 31, 2001 [LOGO] iShares The way you invest now. Only better. TABLE OF CONTENTS Shareholder Letter.......................................... 1 Market Overview............................................. 3 Managers' Discussion & Analysis............................. 4 Schedules of Investments.................................... 36 iShares Dow Jones U.S. Total Market Index Fund............ 36 iShares Dow Jones U.S. Basic Materials Sector Index Fund.................................................... 56 iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund.................................................... 57 iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund.................................................... 61 iShares Dow Jones U.S. Energy Sector Index Fund........... 63 iShares Dow Jones U.S. Financial Sector Index Fund........ 64 iShares Dow Jones U.S. Healthcare Sector Index Fund....... 68 iShares Dow Jones U.S. Industrial Sector Index Fund....... 71 iShares Dow Jones U.S. Technology Sector Index Fund....... 74 iShares Dow Jones U.S. Telecommunications Sector Index Fund.................................................... 78 iShares Dow Jones U.S. Utilities Sector Index Fund........ 79 iShares Dow Jones U.S. Chemicals Index Fund............... 81 iShares Dow Jones U.S. Financial Services Index Fund...... 82 iShares Dow Jones U.S. Internet Index Fund................ 84 iShares Dow Jones U.S. Real Estate Index Fund............. 85 iShares Cohen & Steers Realty Majors Index Fund........... 86 Financial Statements........................................ 87 Financial Highlights........................................ 101 Notes to the Financial Statements........................... 107
To Our Shareholders The iShares(R) Funds' semi-annual period ended October 31, 2001 was one of continued market volatility. Significant events during this period included: . The S&P 500 experienced its worst quarter since the third quarter of 1987. . The federal government passed a 10-year, $1.35 trillion tax-cut package. . The Federal Reserve Board lowered short-term interest rates five times during the reporting period, bringing the federal funds rate to 3.00% and the discount rate to 2.50% by September 30. . The terrorist attacks on September 11 that tragically took the lives of more than 3,000 people and affected lives around the world also resulted in the equity markets remaining closed for four days, the longest period since world War I. As you read through this report and review the performance of the iShares in your portfolio, we encourage you to keep long-term goals in mind when making investment decisions. While one fund's recent performance may be better than another's, it is important to remember that past performance is no guarantee of future results. Even as market conditions change, you should maintain your investment strategy as long as it remains appropriate for your short- or long-term objectives. One trait many successful investors share is the ability to stay focused on their personal financial goals and fundamental long-term market opinions, while ignoring temporary market swings. We trust that the iShares are fulfilling your expectations as a simple, cost-effective way for you to invest in your future, and will continue to do so. We also encourage you to consider the appropriateness of other iShares as part of your long-term investment program. iShares offer investors a wide range of indexed investment choices based on market capitalization, investment style, and sector exposure. We appreciate your confidence and look forward to helping you meet your investment goals. iShares Funds December 2001 - -------------------------------------------------------------------------------- iShares Shareholder Letter page 1 THIS PAGE INTENTIONALLY LEFT BLANK. Market Overview U.S. equity markets struggled during the semi-annual period ending October 31, 2001 (the "reporting period"). During the period, the earnings warnings and revisions that had begun in late 2000 became commonplace, as did layoffs. Poor economic indicators contributed to the bleak outlook. In response to the signs of a faltering economy, the Federal Reserve Board (the "Fed") continued the campaign that it had begun in January to avoid a recession. By the end of October, the Fed had lowered rates five times during the reporting period (following four cuts earlier in the year). The cuts represented a cumulative 2.50%, reducing the federal funds rate to 2.50% and the discount rate to 2.00%. Despite these actions, discouraging economic signs and poor earnings growth continued to weigh on the markets. Industrial output figures fell throughout the period. GDP growth dropped while the unemployment rate climbed. The terrorist attacks on U.S. soil on September 11 accelerated the broad market sell off. After remaining closed for four days following the attacks, equity markets reopened on September 17. Despite the combined effects of monetary stimulus from the Fed and fiscal stimulus from the federal government, equity markets continued to decline through the remainder of the month. The losses resulted in the largest quarterly declines for both the S&P 500 and the Dow Industrials since the quarter that included the stock market crash of 1987. In October, economic reports confirmed the economic blow that the September 11 events had caused. The October jobless rate reached 5.4%, its highest level in 15 years. Leading the jobless claims were employees of airline and travel-related businesses. Retail sales fell 2.2% in September from August, as individuals stayed home in the days following the attack. Finally, GDP fell at an annualized rate of 0.4% in the third quarter. - -------------------------------------------------------------------------------- iShares Market Overview page 3 Managers' Discussion & Analysis iShares Dow Jones U.S. Total Market Index Fund Performance as of 10/31/01 - -------------------------------------------------------------------------------- Average Annual Total Returns - --------------------------------------------------------------------------------
Year Ended 10/31/01 Inception to 10/31/01 ------------------- --------------------- Fund Inception Date NAV Market Index NAV Market Index ---- -------------- --- ------ ----- --- ------ ----- iShares Dow Jones U.S. Total Market Index Fund 06/12/00 (26.12)% (26.50)% (25.99)% (19.62)% (20.57)% (19.45)%
- -------------------------------------------------------------------------------- Total returns represent the iShares Fund's change in value during the periods noted above. A Fund's "net asset value" 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" returns is the price of the last reported trade for shares of each Fund on any national securities exchange or other major U.S. market. Market price and NAV may be calculated at different times, and this timing difference is one of the reasons that NAV and market returns may differ. Also, market price returns do not include brokers' commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. Market and NAV returns assume that dividends and capital gains distributions have been reinvested in the Fund at market price and net asset value, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the management, administration, distribution, transaction or other expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. The Fund's past performance is no guarantee of future results. Sector Breakout --------------- Basic Materials 2.22% Consumer Cyclical 12.72% Consumer Non-Cyclical 8.11% Energy 6.38% Financial 19.07% Healthcare 15.21% Industrial 12.00% Technology 15.67% Telecommunications 5.29% Utilities 3.33% The iShares Dow Jones U.S. Total Market Index Fund seeks to track the performance of the Dow Jones U.S. Total Market Index. For the semi-annual period ended October 31, 2001, the iShares Dow Jones U.S. Total Market Index Fund declined 14.95%. During the same period, the Index dropped 14.85%. Many of the themes of previous months carried over into the reporting period, which opened amid earnings disappointments, weak economic indicators and job cuts. Working to prevent the sluggish economy from falling into recession, the Federal Reserve Board ("the Fed") continued its policy of lowering interest rates. Following four rate cuts earlier in the year, the Fed chopped rates an additional five times during the six-month reporting period. By the end of October, the fed funds rate stood at 2.50%, its lowest level in almost forty years. However, the Fed's actions were not sufficient to prop up the sagging economy. Second quarter earnings announcements included reports of missed targets and downward revisions for annual revenue estimates. In August, weak economic indicators, including poor - -------------------------------------------------------------------------------- page 4 i|Shares GDP figures and high unemployment claims, made economic recovery appear more distant. The September 11 terrorist attacks on U.S. soil compounded the markets' troubles. Equity markets closed for four days following the attacks, reopening on September 17. Despite preemptive action by both the Fed and the federal government, markets suffered further declines through the end of the month. In October, newly-released economic figures revealed the economic impact of the attack: retail sales dropped 2.2% in September, and GDP fell at a 0.4% rate in the third quarter. Not surprisingly, the technology sector (15.67% of the Index as of October 31, 2001) bore the brunt of the declines, falling 27.15%. Utilities stocks, which, at 3.33% of the Index are among the smallest sector weighting in the Index, fell 23.83%. As would be expected, consumer cyclicals (12.72% of the Index) were negatively impacted by the slowing economy, declining 20.20%. The only sectors to log positive returns were consumer non-cyclicals (8.11% of the Index as of October 31), which gained 4.41% and real estate (1.06% of the Index), which returned 0.612%. Individual stock performance reflected the volatile market conditions. The largest holding in the Index, General Electric (3.43% of the Index as of October 31, 2001), dropped 24.39% during the period. Technology giants Microsoft (2.54% of the Index as of October 31, 2001) and Intel (1.56% of the Index) also suffered, falling 14.17% and 20.89%, respectively. Pharmaceutical company Merck & Co. (1.40% of the Index as of October 31) declined 15.17%. Of the Index's ten largest names, the sole positive performer over the reporting period was Johnson & Johnson (1.66% of the Index), which gained 20.88%. - -------------------------------------------------------------------------------- iShares Managers' Discussion & Analysis page 5 Managers' Discussion & Analysis iShares Dow Jones U.S. Basic Materials Sector Index Fund Performance as of 10/31/01 - -------------------------------------------------------------------------------- Average Annual Total Returns - --------------------------------------------------------------------------------
Year Ended 10/31/01 Inception to 10/31/01 ------------------- --------------------- Fund Inception Date NAV Market Index NAV Market Index ---- -------------- --- ------ ----- --- ------ ----- iShares Dow Jones U.S. Basic Materials Sector Index Fund 06/12/00 3.73% 3.88% 4.13% (0.20)% 1.84% (0.20)%
- -------------------------------------------------------------------------------- Total returns represent the iShares Fund's change in value during the periods noted above. A Fund's "net asset value" 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" returns is the price of the last reported trade for shares of each Fund on any national securities exchange or other major U.S. market. Market price and NAV may be calculated at different times, and this timing difference is one of the reasons that NAV and market returns may differ. Also, market price returns do not include brokers' commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. Market and NAV returns assume that dividends and capital gains distributions have been reinvested in the Fund at market price and net asset value, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the management, administration, distribution, transaction or other expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. The Fund's past performance is no guarantee of future results. Top 10 Index Holdings --------------------- Du Pont (E.I.) de Nemours 17.84% Dow Chemical Co. 12.78% Alcoa Inc. 11.96% International Paper Co. 7.37% Weyerhaeuser Co. 4.58% Air Products & Chemicals Inc. 3.93% Praxair Inc. 3.24% Georgia-Pacific Corp. 2.67% Rohm & Haas Co. "A" 2.35% Avery Dennison Corp. 2.18% The iShares Dow Jones U.S. Basic Materials Sector Index Fund seeks to track the performance of the Dow Jones U.S. Basic Materials Sector Index. For the semi-annual period ended October 31, 2001 (the "reporting period"), the iShares Dow Jones U.S. Basic Materials Sector Index Fund declined 9.99%. During the same period, the Index declined 9.73%. Volatile markets and signs of a weakening economy continued during the reporting period. Although the Federal Reserve Board (the "Fed") lowered rates an additional five times during the six-month period (following four cuts earlier in the year), the monetary stimulus did little to revive the slowing economy. Markets slumped in May, when the first quarter GDP number was revised downward. The summer months brought weak corporate earnings reports, high unemployment claims, and warnings of lower future revenues. When second quarter GDP growth was reported to be a mere 0.2%, many investors' hopes for economic recovery in the second half of the year were dashed. The terrorist attacks on September 11 dealt the frail economy another blow. Despite a 0.50% rate cut before markets reopened and fiscal stimulus provided by the Federal government, markets slumped through the end of September. Poor economic figures released in October reflected the - -------------------------------------------------------------------------------- page 6 i|Shares economic effects of the September 11 attacks: job losses for the month of September, largely coming from airlines and travel-related businesses, were the largest since February of 1991. Retail sales levels, one of the last positive holdouts in the face of the slowing economy, dropped 2.2% in September. GDP levels fell at a 0.4% annual rate, its first contraction in more than eight years. The slower growth in the U.S. economy was echoed around the world, despite moves by central banks to stimulate their respective economies. The global slowdown translated into reduced demand for basic materials such as oil, lumber, and metals. For oil, the picture was particularly bleak, as the price of crude oil fell 15% to $22.01 on September 24 alone, the biggest one-day decline since the Gulf War in 1991. As would be expected, many basic materials shares suffered losses during the reporting period. Hardest hit was aluminum company Alcoa (11.96% of the Index as of October 31, 2001), which fell 21.10%. Forest products companies also reflected the economic slowdown: International Paper Company (7.37% of the Index as of October 31, 2001), Weyerhaeuser (4.58% of the Index as of October 31, 2001), and Georgia-Pacific (2.67% of the Index) fell 7.49%, 9.77%, and 13.97%, respectively. E.I. Du Pont De Nemours and Co., the largest holding over the period in the Index at 17.84% as of October 31, 2001, fell 10.08%. The only positive contributors to performance were Dow Chemical Company (12.78% of the Index as of October 31, 2001) and Praxair (3.24% of the Index), which barley finished the period in positive territory, returning 1.46% and 0.37%, respectively. - -------------------------------------------------------------------------------- iShares Managers' Discussion & Analysis page 7 Managers' Discussion & Analysis iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund Performance as of 10/31/01 - -------------------------------------------------------------------------------- Average Annual Total Returns - --------------------------------------------------------------------------------
Year Ended 10/31/01 Inception to 10/31/01 ------------------- --------------------- Fund Inception Date NAV Market Index NAV Market Index ---- -------------- --- ------ ----- --- ------ ----- iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund 06/12/00 (17.27)% (16.50)% (16.85)% (14.57)% (14.64)% (14.16)%
- -------------------------------------------------------------------------------- Total returns represent the iShares Fund's change in value during the periods noted above. A Fund's "net asset value" 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" returns is the price of the last reported trade for shares of each Fund on any national securities exchange or other major U.S. market. Market price and NAV may be calculated at different times, and this timing difference is one of the reasons that NAV and market returns may differ. Also, market price returns do not include brokers' commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. Market and NAV returns assume that dividends and capital gains distributions have been reinvested in the Fund at market price and net asset value, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the management, administration, distribution, transaction or other expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. The Fund's past performance is no guarantee of future results. Top 10 Index Holdings --------------------- Wal-Mart Stores Inc. 10.58% AOL Time Warner Inc. 9.92% Home Depot Inc. 6.62% Viacom Inc. "B" 4.19% Walt Disney Co. (The) 2.89% McDonald's Corp. 2.52% Walgreen Co. 2.45% Comcast Corp. 2.43% Cardinal Health Inc. 2.22% Ford Motor Co. 2.11% The iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund seeks to track the performance of the Dow Jones U.S. Consumer Cyclical Sector Index. The iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund declined 20.42% during the semi-annual period ended October 31, 2001 (the "reporting period"). For the same period, the Index declined 20.20%. Stock markets suffered through a difficult six months, driven by many of the same themes from previous reporting periods: corporations announced layoffs and missed earnings targets, economic signs weakened, and the Federal Reserve Board (the "Fed") continued its easing of monetary policy in an attempt to help the economy sidestep a recession. The seemingly endless stream of negative news began in May, when the first quarter GDP number was revised downward. By July, second quarter earnings brought another wave of lower earnings reports from Corporate America. Compounding the bleak outlook, second quarter GDP growth was reported at 0.2%, and by August, unemployment claims had risen to 4.9%. A flailing economy was dealt another blow on September 11, when the terrorist attacks on the U.S. that took the lives of so many Americans also robbed many investors of their confidence in the markets. Markets slumped through the end of September. By October, economic figures revealed the ripple economic effects of the attack: GDP levels fell 0.4% while unemployment levels again surged. - -------------------------------------------------------------------------------- page 8 i|Shares The slowdown in the economy was finally reflected in consumer spending levels. Overall, consumer spending dropped 1.8% in September, its biggest drop since 1987. On the retail level, sales dropped 2.2% in September, its biggest drop in a decade, as customers curtailed purchases on all but the most essential items in the wake of the attack. Discount stores fared better than department stores, and some retailers were able to lure customers in with offers of zero percent financing and deep discounts. On an individual stock basis, all of the ten largest holdings in the Index posted negative returns for the reporting period. Ford Motor Company (2.11% of the Index as of October 31, 2001) suffered the largest declines, falling 44.39%. AOL Time Warner (9.92% of the Index as of October 31, 2001), Viacom (4.19% of the Index as of October 31, 2001) and The Walt Disney Company (2.89% of the Index) fell 38.42%, 29.87%, and 38.55%, respectively. Reflecting the relative strength of discount stores during the period, Wal-Mart Stores, the Index's largest holding at 10.58% of the Index as of October 31, fell only 0.36%. - -------------------------------------------------------------------------------- iShares Managers' Discussion & Analysis page 9 Managers' Discussion & Analysis iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund Performance as of 10/31/01 - -------------------------------------------------------------------------------- Average Annual Total Returns - --------------------------------------------------------------------------------
Year Ended 10/31/01 Inception to 10/31/01 ------------------- --------------------- Fund Inception Date NAV Market Index NAV Market Index ---- -------------- --- ------ ----- --- ------ ----- iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund 06/12/00 (0.39)% 0.13% (0.52)% 2.94% 2.15% 3.80%
- -------------------------------------------------------------------------------- Total returns represent the iShares Fund's change in value during the periods noted above. A Fund's "net asset value" 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" returns is the price of the last reported trade for shares of each Fund on any national securities exchange or other major U.S. market. Market price and NAV may be calculated at different times, and this timing difference is one of the reasons that NAV and market returns may differ. Also, market price returns do not include brokers' commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. Market and NAV returns assume that dividends and capital gains distributions have been reinvested in the Fund at market price and net asset value, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the management, administration, distribution, transaction or other expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. The Fund's past performance is no guarantee of future results. Top 10 Index Holdings --------------------- Coca-Cola Co. 12.83% Philip Morris Companies Inc. 12.10% Procter & Gamble Co. 11.27% PepsiCo Inc. 10.09% Anheuser-Busch Companies Inc. 4.42% Colgate-Palmolive Co. 3.78% Gillette Co. 3.49% Kimberly-Clark Corp. 3.46% Safeway Inc. 2.45% Kroger Co. 2.35% The iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund seeks to track the performance of the Dow Jones U.S. Consumer Non-Cyclical Sector Index. For the semi-annual period ended October 31, 2001 (the "reporting period"), the iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund returned 4.04%. During the same period, the Index returned 4.41%. Many of the themes of previous months carried over into the reporting period, which opened amid earnings disappointments, weak economic indicators and job cuts. Working to prevent the sluggish economy from falling into recession, the Federal Reserve ("the Fed") continued its stance on lowering interest rates. Following four rate cuts earlier in the year, the Fed chopped rates an additional five times during the reporting period. By the end of October, the Fed funds rate stood at 2.50%, its lowest level in nearly forty years. - -------------------------------------------------------------------------------- page 10 i|Shares Despite these moves, most signs pointed toward the possibility of recession, and stock prices generally drifted lower over the next few months. Economic figures released during the period only fueled the decline: second quarter GDP growth was a paltry 0.2%, and, in August, unemployment figures reached 4.9%. On September 11, the terrorist attack that impacted the emotions of all Americans also rattled an already shaky market. After remaining closed for four days following the attack, equity markets reopened on September 17, falling sharply through the end of the month. Numbers released in October confirmed the economic damage that many investors had suspected: GDP and retail sales levels dropped in September, while unemployment levels rose. The general economic slowdown permeated into most sectors, as consumer and capital spending shrank during the period. Consumer non-cyclicals, however, were one of the least affected sectors and the only sector to post gains for the six-month reporting period. Because the stocks that comprise the Index produce basic goods and services that are purchased even during an economic slowdown, their share prices tend to be less sensitive to a downturn in the economy. The best performing holding of the Index's top ten, Procter & Gamble (11.27% of the Index as of October 31, 2001), logged a healthy 24.21% gain during the reporting period. PepsiCo (10.09% of the Index as of October 31, 2001) and Coca-Cola Company (12.83% of the Index as of October 31, 2001) also performed well, returning 11.88% and 4.44%, respectively. Gillette Company (3.49% of the Index as of October 31) gained 10.85%, and supermarket chain Kroger (2.35% of the Index) returned 8.28%. The biggest detractor from Index performance was Safeway Inc. (formerly Safeway Stores) (2.45% of the Index as of October 31), which fell 23.30% due to lower than expected sales growth which led some analysts to downgrade the stock. - -------------------------------------------------------------------------------- iShares Managers' Discussion & Analysis page 11 Managers' Discussion & Analysis iShares Dow Jones U.S. Energy Sector Index Fund Performance as of 10/31/01 - -------------------------------------------------------------------------------- Average Annual Total Returns - --------------------------------------------------------------------------------
Year Ended 10/31/01 Inception to 10/31/01 ------------------- --------------------- Fund Inception Date NAV Market Index NAV Market Index ---- -------------- --- ------ ----- --- ------ ----- iShares Dow Jones U.S. Energy Sector Index Fund 06/12/00 (7.95)% (7.76)% (9.28)% (5.09)% (6.24)% (4.54)%
- -------------------------------------------------------------------------------- Total returns represent the iShares Fund's change in value during the periods noted above. A Fund's "net asset value" 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" returns is the price of the last reported trade for shares of each Fund on any national securities exchange or other major U.S. market. Market price and NAV may be calculated at different times, and this timing difference is one of the reasons that NAV and market returns may differ. Also, market price returns do not include brokers' commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. Market and NAV returns assume that dividends and capital gains distributions have been reinvested in the Fund at market price and net asset value, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the management, administration, distribution, transaction or other expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. The Fund's past performance is no guarantee of future results. Top 10 Index Holdings --------------------- Exxon Mobil Corp. 40.83% ChevronTexaco Corp. 14.05% Schlumberger Ltd. 4.13% El Paso Corp. 3.72% Phillips Petroleum Co. 2.78% Conoco Inc. 2.39% Williams Companies Inc. 2.34% Anadarko Petroleum Corp. 2.11% Baker Hughes Inc. 1.79% Halliburton Co. 1.58% The iShares Dow Jones U.S. Energy Sector Index Fund seeks to track the performance of the Dow Jones U.S. Energy Sector Index. For the semi-annual period ended October 31, 2001, 2001 (the "reporting period"), the iShares Dow Jones U.S. Energy Sector Index Fund declined 17.79%. During the same period, the Index fell 17.24%. The reporting period opened amid familiar themes of earnings warnings, layoffs, and weak economic reports. In its effort to stimulate the slowing economy, the Federal Reserve Board ("the Fed"), continued a campaign of lowering short-term interest rates throughout the period. After four rate cuts earlier in the year, the Fed lowered rates five times during the six-month period. By the end of October, the federal funds rate stood at 2.50%. Despite the Fed's attempts, however, most signs pointed toward the possibility of a recession, and stock prices generally drifted lower over the next few months. Economic figures released during the period only fueled the decline: second quarter GDP growth was a paltry 0.2%, and, in August, unemployment figures reached 4.9%. On September 11, the terrorist attacks that impacted the emotions of - -------------------------------------------------------------------------------- page 12 i|Shares all Americans also rattled an already shaky market. After remaining closed for four days following the attack, equity markets reopened on September 17, falling sharply through the end of the month. Numbers released in October confirmed the economic damage that many investors had suspected: GDP and retail sales levels dropped in September, while unemployment levels soared. The weakening U.S. economy was part of a broader global slowdown that had begun in previous quarters and was exacerbated by the events of September 11. Oil and energy prices slumped during the period in the face of shrinking demand. Despite the U.S. war on terrorism, Saudi Arabia assured the world that it would not cut oil supply, quelling any fears that the price of oil might rise. Therefore, fears of a global recession outweighed concerns of limited supply, causing the price of oil to fall. On September 24 alone, the price of crude oil fell 15% to $22.01 per barrel, representing its largest one-day drop since the Gulf War in 1991. In terms of individual holdings, the ten largest holdings of the Index all posted declines during the reporting period. The smaller oil services and exploration companies, which tend to be more sensitive to changes in the price of oil than the larger, diversified oil companies, suffered the most. Oil services companies Schlumberger Ltd (4.13% of the Index as of October 31, 2001) and Halliburton Company (1.58% of the Index) fell 26.48% and 42.46%, respectively. Diversified oil companies Exxon Mobil (40.83% of the Index as of October 31, 2001) and Chevron Texaco (14.05% of the Index as of October 31, 2001), on the other hand, suffered less severe declines, dropping 9.98% and 7.02%. Natural gas companies also languished as demand dropped: El Paso Corporation (3.72% of the Index) and Williams Companies Inc. (2.34% of the Index as of October 31) declined 28.13% and 30.87%, respectively. - -------------------------------------------------------------------------------- iShares Managers' Discussion & Analysis page 13 Managers' Discussion & Analysis iShares Dow Jones U.S. Financial Sector Index Fund Performance as of 10/31/01 - -------------------------------------------------------------------------------- Average Annual Total Returns - --------------------------------------------------------------------------------
Year Ended 10/31/01 Inception to 10/31/01 ------------------- --------------------- Fund Inception Date NAV Market Index NAV Market Index ---- -------------- --- ------ ----- --- ------ ----- iShares Dow Jones U.S. Financial Sector Index Fund 05/22/00 (11.56)% (11.91)% (10.93)% 3.53% 1.65% 4.23%
- -------------------------------------------------------------------------------- Total returns represent the iShares Fund's change in value during the periods noted above. A Fund's "net asset value" 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" returns is the price of the last reported trade for shares of each Fund on any national securities exchange or other major U.S. market. Market price and NAV may be calculated at different times, and this timing difference is one of the reasons that NAV and market returns may differ. Also, market price returns do not include brokers' commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. Market and NAV returns assume that dividends and capital gains distributions have been reinvested in the Fund at market price and net asset value, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the management, administration, distribution, transaction or other expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. The Fund's past performance is no guarantee of future results. Top 10 Index Holdings --------------------- Citigroup Inc. 11.70% American International Group Inc. 10.20% Bank of America Corp. 4.72% Fannie Mae 4.11% JP Morgan Chase & Co. 3.49% Wells Fargo & Company 3.36% Morgan Stanley Dean Witter & Co. 2.48% Freddie Mac 2.35% Wachovia Corp. 1.99% Bank One Corp. 1.91% The iShares Dow Jones U.S. Financial Sector Index Fund seeks to track the performance of the Dow Jones U.S. Financial Sector Index. During the semi-annual period ended October 31, 2001 (the "reporting period"), the iShares Dow Jones U.S. Financial Sector Index Fund declined 9.89%. During the same period, the Index fell 9.58%. The reporting period opened amid earnings disappointments, weak economic indicators and job cuts. Working to prevent the sluggish economy from falling into recession, the Federal Reserve ("the Fed") continued its campaign to lower interest rates. Following four rate cuts earlier in the year, the Fed chopped rates an additional five times during the next six months. By the end of October, the fed funds rate stood at 2.50%, its lowest level in nearly forty years. However, the Fed's actions were not enough to revive the economy. As the period progressed, many signs pointed toward possible recession, and stock prices generally drifted lower. Second quarter earnings announcements included reports of missed targets and - -------------------------------------------------------------------------------- page 14 i|Shares downward revisions for annual revenue estimates. In August, weak economic indicators, including poor GDP figures and high unemployment claims, made economic recovery appear more distant. Then, on September 11, the terrorist attacks on the U.S. compounded the markets' troubles. Equity markets closed for four days following the attack, reopening on September 17. Despite preemptive action by both the Fed and the federal government, markets suffered further declines through the end of the month. The economic impact of the attacks was apparent with the economic figures released in October: retail sales dropped 2.2% in September alone, while unemployment levels rose, particularly in the airline and travel-related industries. Most sectors were unable to escape the market downturn, and financial stocks were no exception. In general, banks performed relatively well, benefiting from lower short-term interest rates, while investment banks experienced the largest declines. In terms of individual holdings of the Index, investment banks J.P. Morgan Chase & Co. (3.49% of the Index as of October 31, 2001) and Morgan Stanley Dean Witter & Co. (2.48% of the Index as of October 31, 2001) suffered the biggest losses over the reporting period, falling 25.03% and 21.45%, respectively. Bank One Corporation (1.91% of the Index as of October 31, 2001) declined 11.04%. The largest holding in the Index at 11.70% of the Index, Citigroup lost 6.84%. Bank of America (4.72% of the Index), however, gained 7.31%. Benefiting from increased mortgage refinance activity, Fannie Mae (4.11% of the Index as of October 31) and Freddie Mac (2.35% of the Index) also logged positive returns, returning 1.62% and 3.71%, respectively. - -------------------------------------------------------------------------------- iShares Managers' Discussion & Analysis page 15 Managers' Discussion & Analysis iShares Dow Jones U.S. Healthcare Sector Index Fund Performance as of 10/31/01 - -------------------------------------------------------------------------------- Average Annual Total Returns - --------------------------------------------------------------------------------
Year Ended 10/31/01 Inception to 10/31/01 ------------------- --------------------- Fund Inception Date NAV Market Index NAV Market Index ---- -------------- --- ------ ----- --- ------ ------ iShares Dow Jones U.S. Healthcare Sector Index Fund 06/12/00 (10.67)% (10.19)% (10.26)% 1.83% (2.27)% 2.57%
- -------------------------------------------------------------------------------- Total returns represent the iShares Fund's change in value during the periods noted above. A Fund's "net asset value" 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" returns is the price of the last reported trade for shares of each Fund on any national securities exchange or other major U.S. market. Market price and NAV may be calculated at different times, and this timing difference is one of the reasons that NAV and market returns may differ. Also, market price returns do not include brokers' commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. Market and NAV returns assume that dividends and capital gains distributions have been reinvested in the Fund at market price and net asset value, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the management, administration, distribution, transaction or other expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. The Fund's past performance is no guarantee of future results. Top 10 Index Holdings --------------------- Pfizer Inc. 16.54% Johnson & Johnson 10.90% Merck & Co. Inc. 9.19% Bristol-Myers Squibb Co. 6.53% Abbott Laboratories 4.80% Lilly (Eli) and Company 4.61% American Home Products Corp. 4.57% Amgen Inc. 3.69% Schering-Plough Corp. 3.39% Pharmacia Corporation 3.26% The iShares Dow Jones U.S. Healthcare Sector Index Fund seeks to track the performance of the Dow Jones U.S. Healthcare Sector Index. For the semi-annual period ended October 31, 2001 (the "reporting period"), the iShares Dow Jones U.S. Healthcare Sector Index Fund declined 1.67%. During the same period, the Index dropped 1.37%. Stock markets suffered through a difficult six months, driven by many of the familiar themes from previous reporting periods: corporations announced layoffs and missed earnings targets, economic signs weakened, and the Federal Reserve Board (the "Fed") continued its easing of monetary policy in an attempt to help the economy sidestep a recession. Markets slumped in May, when the first quarter GDP number was revised downward. The summer months brought weak corporate earnings reports, high unemployment claims, and warnings of lower future revenues. When second quarter GDP growth was reported to be a mere 0.2%, many investors' hopes for economic recovery in the second half of the year were dashed. The terrorist attacks on September 11 dealt the frail economy another blow. Despite a 0.50% rate cut before markets reopened and fiscal stimulus provided by - -------------------------------------------------------------------------------- page 16 i|Shares the Federal government, markets slumped through the end of September. Poor economic figures released in October reflected the economic effects of the September 11 attacks: job losses for the month of September, largely coming from airlines and travel-related businesses, were the largest since February of 1991. Retail sales levels, one of the last positive holdouts in the face of the slowing economy, dropped 2.2% in September. GDP levels fell at a 0.4% annual rate, its first contraction in more than eight years. Most sectors experienced declines during the reporting period, and the healthcare sector was not immune to the downward trend. However, within, the group, some of the more traditional healthcare names fared better than the more growth-oriented biotechnology companies. The best performing individual holding of the Index's top ten positions over the reporting period was Johnson & Johnson (10.90% of the Index as of October 31, 2001), which gained a healthy 20.88%. Abbott Labs (4.80% of the Index as of October 31, 2001) delivered a 15.18% gain, and pharmaceutical giant Bristol Myers Squibb (6.53% of the Index as of October 31, 2001) saw its share price rise 1.27% during the reporting period. On the other side of the performance spectrum, Pharmacia Corporation (3.26% of the Index as of October 31, 2001) declined 21.98%, while Merck & Company (9.19% of the Index) fell 15.17%. - -------------------------------------------------------------------------------- iShares Managers' Discussion & Analysis page 17 Managers' Discussion & Analysis iShares Dow Jones U.S. Industrial Sector Index Fund Performance as of 10/31/01 - -------------------------------------------------------------------------------- Average Annual Total Returns - --------------------------------------------------------------------------------
Year Ended 10/31/01 Inception to 10/31/01 ------------------- --------------------- Fund Inception Date NAV Market Index NAV Market Index ---- -------------- --- ------ ----- --- ------ ----- iShares Dow Jones Industrial Sector Index Fund 06/12/00 (26.34)% (26.20)% (27.17)% (17.66)% (17.86)% (18.67)%
- -------------------------------------------------------------------------------- Total returns represent the iShares Fund's change in value during the periods noted above. A Fund's "net asset value" 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" returns is the price of the last reported trade for shares of each Fund on any national securities exchange or other major U.S. market. Market price and NAV may be calculated at different times, and this timing difference is one of the reasons that NAV and market returns may differ. Also, market price returns do not include brokers' commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. Market and NAV returns assume that dividends and capital gains distributions have been reinvested in the Fund at market price and net asset value, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the management, administration, distribution, transaction or other expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. The Fund's past performance is no guarantee of future results. Top 10 Index Holdings --------------------- General Electric Co. 28.61% Tyco International Ltd. 7.69% Minnesota Mining & Manufacturing Co. 3.27% Automatic Data Processing Inc. 2.55% Electronic Data Systems Corp. 2.19% First Data Corp. 2.11% Boeing Co. 2.08% United Technologies Corp. 2.01% Honeywell International Inc. 1.88% Emerson Electric Co. 1.66% The iShares Dow Jones U.S. Industrial Sector Index Fund seeks to track the performance of the Dow Jones U.S. Industrial Sector Index. For the semi-annual period ended October 31, 2001 (the "reporting period"), the iShares Dow Jones U.S. Industrial Sector Index Fund declined 18.39%. During the same period, the Index declined 18.54%. The familiar themes of previous months were replayed during the reporting period, including earnings disappointments, weak economic indicators and job cuts. In its effort to avoid a recession, the Federal Reserve Board ("the Fed") continued its stance on lowering interest rates. Following four rate cuts earlier in the year, the Fed chopped rates an additional five times during the six-month reporting period. By the end of October, the fed funds rate stood at 2.50%. Despite the interest rate cuts, markets declined during the six-month reporting period. Second quarter earnings announcements included reports of missed targets and downward revisions for annual revenue estimates. In August, weak economic indicators, including poor GDP figures and high unemployment claims, made economic recovery appear more distant. The September 11 terrorist attacks on U.S. - -------------------------------------------------------------------------------- page 18 i|Shares soil that affected the lives of all Americans also compounded the markets' troubles. Equity markets closed for four days following the attacks, reopening on September 17. Despite preemptive action by both the Fed and the federal government, markets suffered further declines through the end of the month. In October, newly-released economic figures revealed the economic impact of the attack: retail sales dropped 2.2% in September, the jobless rate rose to 5.4% the first week in October, and GDP fell at a 0.4% rate in the third quarter. The sluggish economic conditions in the U.S. were echoed around the world. Despite actions by central banks worldwide to stimulate economic growth, the global slowdown that had already begun was exacerbated by the terrorist attacks. As slower growth led to a cutback in industrial production, the industrial sector languished. Not surprisingly, the hardest hit holding in the Index's top ten positions over the reporting period was Boeing (2.08% of the Index as of October 31, 2001). The decline in airline travel in the wake of the terrorist attack hurt the aerospace company, whose stock fell 46.95%. Honeywell International (1.88% of the Index as of October 31, 2001) and United Technologies (2.01% of the Index as of October 31, 2001) fell 38.93% and 30.58%, respectively. The largest holding in the Index, General Electric (28.61% of the Index) declined 24.39%. Electronic Data Services (2.19% of the Index as of October 31) and First Data Corporation (2.11% of the Index), managed to finish the period in positive territory, returning 0.28% and 0.26%, respectively. - -------------------------------------------------------------------------------- iShares Managers' Discussion & Analysis page 19 Managers' Discussion & Analysis iShares Dow Jones U.S. Technology Sector Index Fund Performance as of 10/31/01 - -------------------------------------------------------------------------------- Average Annual Total Returns - --------------------------------------------------------------------------------
Year Ended 10/31/01 Inception to 10/31/01 ------------------- --------------------- Fund Inception Date NAV Market Index NAV Market Index ---- -------------- --- ------ ----- --- ------ ----- iShares Dow Jones U.S. Technology Sector Index Fund 05/15/00 (56.81)% (55.95)% (56.54)% (46.91)% (44.17)% (46.68)%
- -------------------------------------------------------------------------------- Total returns represent the iShares Fund's change in value during the periods noted above. A Fund's "net asset value" 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" returns is the price of the last reported trade for shares of each Fund on any national securities exchange or other major U.S. market. Market price and NAV may be calculated at different times, and this timing difference is one of the reasons that NAV and market returns may differ. Also, market price returns do not include brokers' commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. Market and NAV returns assume that dividends and capital gains distributions have been reinvested in the Fund at market price and net asset value, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the management, administration, distribution, transaction or other expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. The Fund's past performance is no guarantee of future results. Top 10 Index Holdings --------------------- Microsoft Corp. 16.22% International Business Machines Corp. 11.42% Intel Corp. 9.96% Cisco Systems Inc. 7.46% Oracle Corp. 3.51% Dell Computer Corp. 3.35% Texas Instruments Inc. 2.94% QUALCOMM Inc. 2.24% Motorola Inc. 2.17% Sun Microsystems Inc. 2.00% The iShares Dow Jones U.S. Technology Index Fund seeks to track the performance of the Dow Jones U.S. Technology Sector Index. For the six months through October 31, 2001 (the "reporting period"), the iShares Dow Jones U.S. Technology Index Fund declined 27.34%. Over the same period, the Index fell 27.15%. The economy continued to worsen throughout the reporting period, as rising unemployment and falling corporate revenues helped to push stock prices downward. Unemployment was a critical issue during the period. By the end of October, the jobless rate stood at 5.4%, leaping from 4.9% in September, the worst one-month increase in 15 years. This increasing unemployment led to declines in consumer confidence, as well as consumer spending, which fell 1.8% in September. Investors watched these developments with concern, as consumer spending is an important component of the economy. Elsewhere, industrial production was also weak, falling for the 12th straight month in September, its longest decline in more than 50 years. In this already weakened economic environment, the tragic events of September 11, 2001 dampened chances for recovery even further. The Commerce Department, adjusting GDP figures to account for the effects of the tragedy, said that the economy contracted 0.4% in the third quarter. - -------------------------------------------------------------------------------- page 20 i|Shares During the reporting period, the Federal Reserve Board (the "Fed") reduced interest rates consistently, seeking to restore economic expansion. On May 15, 2001, the Fed cut rates to 4.00%, a seven-year low. Other rate cuts followed, including a half percentage point reduction on October 2 -- the ninth cut of the year -- bringing the fed funds rate to 2.50%. However, despite interest rates being at their lowest level since 1962, there remained few signs of economic recovery during the period. Amid this economic weakness, technology stocks were among the worst-performing. Corporate spending on information technology had been an important support for technology companies. With the decline in corporate spending, revenues and in turn stock prices, were negatively affected. Over the period, the stocks of global software and computing leaders Microsoft (16.22% of the Index as of October 31, 2001) and IBM (11.42% of the Index as of October 31, 2001) fell 14.17% and 5.9%, respectively. Intel (9.96% of the Index) shares declined 20.89% on continued weakness in revenues. Oracle (3.51% of the Index as of October 31) stock lost 16.09%, and Texas Instruments (2.94% of the Index) also had a difficult semiannual period, with its shares falling 27.58%. Qualcomm Incorporated (2.24% of the Index) stock dropped 14.37% over the period. Sun Microsystems (2.00% of the Index as of October 31) was the worst-performing stock among the top ten holdings, as its shares lost 40.71% amid a major fall in revenues. Of the top ten holdings, only Motorola (2.17% of the Index) shares managed to rise, gaining 5.84%. - -------------------------------------------------------------------------------- iShares Managers' Discussion & Analysis page 21 Managers' Discussion & Analysis iShares Dow Jones U.S. Telecommunications Sector Index Fund Performance as of 10/31/01 - -------------------------------------------------------------------------------- Average Annual Total Returns - --------------------------------------------------------------------------------
Year Ended 10/31/01 Inception to 10/31/01 ------------------- --------------------- Fund Inception Date NAV Market Index NAV Market Index ---- -------------- --- ------ ----- --- ------ ----- iShares Dow Jones U.S. Telecommunications Sector Index Fund 05/22/00 (41.11)% (40.77)% (33.83)% (34.70)% (34.15)% (27.57)%
- -------------------------------------------------------------------------------- Total returns represent the iShares Fund's change in value during the periods noted above. A Fund's "net asset value" 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" returns is the price of the last reported trade for shares of each Fund on any national securities exchange or other major U.S. market. Market price and NAV may be calculated at different times, and this timing difference is one of the reasons that NAV and market returns may differ. Also, market price returns do not include brokers' commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. Market and NAV returns assume that dividends and capital gains distributions have been reinvested in the Fund at market price and net asset value, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the management, administration, distribution, transaction or other expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. The Fund's past performance is no guarantee of future results. Top 10 Index Holdings --------------------- Verizon Communications Inc. 24.12% SBC Communications Inc. 23.09% BellSouth Corp. 12.43% AT&T Corp. 9.66% WorldCom Inc. 7.08% AT&T Wireless Services Inc. 6.55% Qwest Communications International Inc. 3.15% Alltel Corp. 3.04% Sprint Corp. (FON Group) 2.84% Sprint Corp. (PCS Group) 2.39% The iShares Dow Jones U.S. Telecommunications Sector Index Fund seeks to track the performance of the Dow Jones U.S. Telecommunications Sector Index. For the six months through October 31, 2001 (the "reporting period"), the iShares Dow Jones U.S. Telecommunications Sector Index Fund declined 21.69%. Over the same period, the Index fell 17.92%. Economic conditions weakened throughout the reporting period, hampering corporate performance and, in turn, negatively affecting stock prices. A key indicator of economic difficulties was the rising unemployment rate. By the end of October, the jobless rate stood at 5.4%, leaping from 4.9% in September, the worst one-month increase in 15 years. Increasing unemployment led to declines in consumer confidence, as well as consumer spending, which fell 1.8% in September. Industrial production was another weak spot in the economy, falling for the 12th straight month in September, the longest decline in more than 50 years. In this already fragile economic environment, the tragic events of September 11, 2001 dampened chances for recovery even further. The Commerce Department, adjusting GDP figures to account for the effects of the tragedy, said that the economy contracted 1% in the third quarter. - -------------------------------------------------------------------------------- page 22 i|Shares During the reporting period, the Federal Reserve Board (the "Fed") reduced interest rates, seeking to reinvigorate economic growth. On May 15, 2001, the Fed cut rates to 4.00%, a seven-year low. Other cuts followed, including a half percentage point reduction on October 2 -- the ninth cut of the year -- bringing the fed funds rate to 2.50%. However, even with interest rates at their lowest level since 1962, there were few signs of economic recovery during the reporting period. In this difficult economic environment, stocks of many telecommunications companies in the Index lost ground. A number of these companies had invested heavily during stronger economic times, and found it difficult to cope with falling consumer and corporate demand for telecommunications services and equipment. Verizon (24.12% of the Index as of October 31, 2001) stock declined 8.25% over the semiannual period. SBC Communications (23.09% of the Index as of October 31, 2001) fell 6.49%. Bellsouth (12.43% of the Index) shares dropped 10.99%. AT&T Corporation (9.66% of the Index as of October 31) stock lost 11.12% over the reporting period, as revenues declined in the long-distance market. Worldcom (7.08% of the Index) stock performed poorly during the semiannual period, losing 23.35%. Qwest Communications (3.15% of the Index as of October 31) stock had the worst performance among the Index's top ten holdings, losing 68.29%. Qwest had been among the biggest spenders on infrastructure, and reported massive losses as a result. Sprint Corporation (2.39% of the Index) shares lost 12.99%. Among the top ten Index holdings, only Alltel Corporation (3.04% of the Index as of October 31) shares managed to rise, gaining 5.83% for the reporting period, as its revenues increased. - -------------------------------------------------------------------------------- iShares Managers' Discussion & Analysis page 23 Managers' Discussion & Analysis iShares Dow Jones U.S. Utilities Sector Index Fund Performance as of 10/31/01 - -------------------------------------------------------------------------------- Average Annual Total Returns - --------------------------------------------------------------------------------
YEAR ENDED 10/31/01 INCEPTION TO 10/31/01 ------------------- --------------------- Fund Inception Date NAV Market Index NAV Market Index ---- -------------- --- ------ ----- --- ------ ----- iShares Dow Jones U.S. Utilities Sector Index Fund 06/12/00 (19.75)% (20.31)% (19.55)% (3.07)% (2.51)% (2.70)%
- -------------------------------------------------------------------------------- Total returns represent the iShares Fund's change in value during the periods noted above. A Fund's "net asset value" 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" returns is the price of the last reported trade for shares of each Fund on any national securities exchange or other major U.S. market. Market price and NAV may be calculated at different times, and this timing difference is one of the reasons that NAV and market returns may differ. Also, market price returns do not include brokers' commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. Market and NAV returns assume that dividends and capital gains distributions have been reinvested in the Fund at market price and net asset value, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the management, administration, distribution, transaction or other expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. The Fund's past performance is no guarantee of future results. Top 10 Index Holdings --------------------- Duke Energy Corp. 8.37% Southern Co. 4.67% Dominion Resources Inc. 4.31% American Electric Power Inc. 3.85% Exelon Corp. 3.82% TXU Corporation 3.38% Enron Corp. 2.93% Xcel Energy Inc. 2.77% FPL Group Inc. 2.66% Progress Energy Inc. 2.61% The iShares Dow Jones U.S. Utilities Sector Index Fund seeks to track the performance of the Dow Jones U.S. Utilities Sector Index. For the period from May 1, 2001, through October 31, 2001 (the "reporting period"), the iShares Dow Jones U.S. Utilities Sector Index Fund declined 23.94%. During the same period, the Index fell 23.83%. The reporting period presented a challenging environment for the stock market. The U.S. economy continued to slow throughout the summer despite several interest rate cuts by the Federal Reserve (the "Fed"). The main culprits behind the economic slowdown -- business spending cuts and increased layoffs -- also caused corporate profits to deteriorate. As a result, stock prices had already been sliding before the horrific events of September 11, which only made the situation worse. The stock market closed for four days and then plummeted upon reopening. The Fed cut rates in the wake of the tragedy and again in early October, but the economy nonetheless teetered on the brink of recession. Although stocks bounced back in October, the major stock indices finished the reporting period with losses of 10-15%. - -------------------------------------------------------------------------------- page 24 i|Shares Historically, this kind of environment has been favorable for utilities stocks because of their defensive nature and value orientation. However, the utilities sector had its own set of unique problems that weighed on performance. First, demand for power declined significantly-the economic slowdown, the continuing energy crisis in California, and milder-than-expected summer weather all contributed to a drop-off in demand. As a result, energy reserves increased and prices declined-natural gas prices fell by more than 50%, and the price of oil slumped nearly 20%. Legal issues also plagued the utilities sector. Allegations of price gouging and manipulation in California led to consumer outrage, price ceilings, and lawsuits. In addition, several utilities companies were under federal investigation for questionable business arrangements. All of these elements hurt the defensive credibility of the sector and resulted in earnings disappointments. Power generation firms, which had enjoyed record profits by selling power to California in late 2000 and early 2001, struggled the most. Among the Index's top ten holdings, Exelon (3.82% of the Index as of October 31, 2001) dropped 38.22% during the reporting period; the company overestimated demand and reported an earnings shortfall. Enron (2.93% of the Index as of October 31) plunged 77.71% and became a takeover target after a series of poor investments, the resignation of two senior executives, and an SEC probe into the company's accounting practices. Other stragglers in the Index's top ten included Duke Energy (8.37% of the Index), which fell 16.76%; American Electric Power (3.85% of the Index as of October 31), which slid 12.84%; and FPL Group (2.66% of the Index), which declined by 9.58%. Only two of the top ten Index holdings posted positive returns -- Southern Company (4.67% of the Index as of October 31), which gained 5.18%, and TXU Corporation (3.38% of the Index), which rose 6.93%. Both of these companies reported surprisingly strong earnings. - -------------------------------------------------------------------------------- iShares Managers' Discussion & Analysis page 25 Managers' Discussion & Analysis iShares Dow Jones U.S. Chemicals Index Fund Performance as of 10/31/01 - -------------------------------------------------------------------------------- Average Annual Total Returns - --------------------------------------------------------------------------------
Year Ended 10/31/01 Inception to 10/31/01 ------------------- --------------------- Fund Inception Date NAV Market Index NAV Market Index ---- -------------- --- ------ ----- --- ------ ----- iShares Dow Jones U.S. Chemicals Index Fund 06/12/00 2.21% 4.23% 1.72% (1.25)% 2.25% (2.81)%
- -------------------------------------------------------------------------------- Total returns represent the iShares Fund's change in value during the periods noted above. A Fund's "net asset value" 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" returns is the price of the last reported trade for shares of each Fund on any national securities exchange or other major U.S. market. Market price and NAV may be calculated at different times, and this timing difference is one of the reasons that NAV and market returns may differ. Also, market price returns do not include brokers' commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. Market and NAV returns assume that dividends and capital gains distributions have been reinvested in the Fund at market price and net asset value, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the management, administration, distribution, transaction or other expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. The Fund's past performance is no guarantee of future results. Top 10 Index Holdings --------------------- Du Pont (E.I.) de Nemours 31.02% Dow Chemical Co. 22.21% Air Products & Chemicals Inc. 6.82% Praxair Inc. 5.64% Rohm & Haas Co. "A" 4.08% Avery Dennison Corp. 3.80% Ecolab Inc. 2.87% Engelhard Corp. 2.55% Sigma-Aldrich Corp. 1.96% Eastman Chemical Co. 1.96% The iShares Dow Jones U.S. Chemicals Index Fund seeks to track the performance of the Dow Jones U.S. Chemicals Index. For the period from May 1, 2001, through October 31, 2001 (the "reporting period"), the iShares Dow Jones U.S. Chemicals Index Fund declined 7.76%. During the same period, the Index dropped 7.08%. The stock market suffered a series of setbacks during the reporting period. First, the economic environment worsened despite several interest rate cuts by the Federal Reserve Board (the "Fed"), the U.S. economy slumped during the summer amid capital spending cutbacks and increased layoffs. Then came a litany of disappointing earnings reports and warnings of further profit deterioration going forward. Finally, there were the horrific events of September 11, which led to a four-day shutdown of the stock market and a sharp decline after the market reopened. Although the Fed cut rates in the wake of the tragedy and again in early October, the economy nonetheless teetered on the brink of recession. Stocks recovered modestly in October, but the market's summer swoon and September plunge left the major stock indices down 10-15% for the reporting period. - -------------------------------------------------------------------------------- page 26 i|Shares Chemicals stocks also declined but fared a little better than the broader market. This may seem somewhat surprising because these cyclical stocks tend to track the ups and downs of the economy. In addition, the main customers for chemicals companies are manufacturers, a sector that has been in a recession for most of the past year. However, many chemicals companies have been cutting costs aggressively, and industry consolidation provided greater economies of scale. On top of that, the costs of raw materials (primarily oil and natural gas) fell substantially during the reporting period -- oil prices tumbled by nearly 20%, while natural gas prices fell by more than 50%. Among the Index's top ten holdings, the best performers included Dow Chemical (22.21% of the Index at October 31, 2001), which gained 1.46%; Praxair (5.64% of the Index at October 31), which edged higher by 0.37%; and Engelhard (2.55% of the Index), which rose 2.66%. Dow Chemical's revenues got a boost from its recent merger with Union Carbide, while Praxair and Engelhard were able to maintain their earnings through successful cost reductions. On the negative side, the Index's largest holding, E.I. Du Pont De Nemours and Co. (31.02% of the Index as of October 31), declined by 10.08% because of a significant drop-off in revenues. Sigma-Aldrich (1.96% of the Index), a biochemical company, slid 18.21% after reporting disappointing earnings in the third quarter. Avery Dennison (3.80% of the Index as of October 31) and Eastman Chemical (1.96% of the Index), producers of adhesives and plastics, fell 16.51% and 34.15%, respectively. Both companies were downgraded due to growing debt levels. - -------------------------------------------------------------------------------- iShares Managers' Discussion & Analysis page 27 Managers' Discussion & Analysis iShares Dow Jones U.S. Financial Services Index Fund Performance as of 10/31/01 - -------------------------------------------------------------------------------- Average Annual Total Return - --------------------------------------------------------------------------------
Year Ended 10/31/01 Inception to 10/31/01 ------------------- --------------------- Fund Inception Date NAV Market Index NAV Market Index ---- -------------- --- ------ ----- --- ------ ----- iShares Dow Jones U.S. Financial Services Index Fund 06/12/00 (12.41)% (12.30)% (11.88)% (1.28)% 1.09% (0.67)%
- -------------------------------------------------------------------------------- Total returns represent the iShares Fund's change in value during the periods noted above. A Fund's "net asset value" 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" returns is the price of the last reported trade for shares of each Fund on any national securities exchange or other major U.S. market. Market price and NAV may be calculated at different times, and this timing difference is one of the reasons that NAV and market returns may differ. Also, market price returns do not include brokers' commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. Market and NAV returns assume that dividends and capital gains distributions have been reinvested in the Fund at market price and net asset value, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the management, administration, distribution, transaction or other expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. The Fund's past performance is no guarantee of future results. Top 10 Index Holdings --------------------- Citigroup Inc. 16.15% Bank of America Corp. 6.52% Fannie Mae 5.67% JP Morgan Chase & Co. 4.83% Wells Fargo & Company 4.64% Morgan Stanley Dean Witter & Co. 3.43% Freddie Mac 3.25% Wachovia Corp. 2.75% Bank One Corp. 2.64% FleetBoston Financial Corp. 2.44% The iShares Dow Jones U.S. Financial Services Index Fund seeks to track the performance of the Dow Jones U.S. Financial Services Index. For the period from May 1, 2001, through October 31, 2001 (the "reporting period"), the iShares Dow Jones U.S. Financial Services Index Fund declined 11.52%. During the same period, the Index fell 11.23%. The reporting period was a trying one for the stock market. The U.S. economy, already reeling from capital spending cutbacks and overcapacity, slowed further during the summer months despite several interest rate cuts by the Federal Reserve (the "Fed"). The sharp slowdown triggered increased layoffs and caused corporate profits to deteriorate, pushing stock prices lower. Then came the horrific events of September 11, which brought the economy to an abrupt halt and forced the stock market to close for four days. The Fed cut rates in the wake of the tragedy and again in early October, but the economy nonetheless teetered on the brink of recession. And although stocks rebounded in October after plunging in September, the major stock indices were still down 10-15% for the reporting period. - -------------------------------------------------------------------------------- page 28 i|Shares The performance of financial services stocks was in line with the broader stock market, but there were pockets of strength and weakness. Mortgage lenders fared the best as mortgage rates fell to their lowest levels since the 1960s, sparking a wave of home buying and mortgage refinancing. Banks also benefited from historically low interest rates, but they were hurt by increased loan losses and growing credit concerns. Investment banks and brokerage stocks suffered the most -- underwriting revenues slumped as the initial public offering market dried up and merger-and-acquisition activity slowed. Lower trading volumes in the financial markets also had a negative impact on the profits of brokerage companies. Among the Index's top ten holdings, mortgage lenders Fannie Mae (5.67% of the Index at October 31, 2001) and Freddie Mac (3.25% of the Index at October 31, 2001) gained 1.62% and 3.71%, respectively, over the reporting period. The two government-sponsored lenders were among the biggest beneficiaries of the drop in mortgage rates. Bank of America (6.52% of the Index as of October 31), the Index's second-largest holding, rose 7.31% during the reporting period. The diversified banking company maintained its earnings by exiting unprofitable businesses and reducing costs. Other banking stocks struggled, including Wells Fargo (4.64% of the Index), which slid 15.00%; Bank One (2.64% of the Index as of October 31), which lost 11.04%; and FleetBoston Financial (2.44% of the Index), which declined 12.90%. The worst performers among the top ten Index holdings were investment bank JP Morgan Chase (4.83% of the Index) and brokerage firm Morgan Stanley Dean Witter & Co. (3.43% of the Index as of October 31), which dropped 25.03% and 21.45%, respectively. The Index's largest holding, Citigroup (16.15% of the Index), fell by 6.84% over the reporting period. - -------------------------------------------------------------------------------- iShares Managers' Discussion & Analysis page 29 Managers' Discussion & Analysis iShares Dow Jones U.S. Internet Index Fund Performance as of 10/31/01 - -------------------------------------------------------------------------------- Average Annual Total Returns - --------------------------------------------------------------------------------
Year Ended 10/31/01 Inception to 10/31/01 ------------------- --------------------- Fund Inception Date NAV Market Index NAV Market Index ---- -------------- --- ------ ----- --- ------ ----- iShares Dow Jones U.S. Internet Index Fund 05/15/00 (80.09)% (79.77)% (79.80)% (70.48)% (69.37)% (70.24)%
- -------------------------------------------------------------------------------- Total returns represent the iShares Fund's change in value during the periods noted above. A Fund's "net asset value" 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" returns is the price of the last reported trade for shares of each Fund on any national securities exchange or other major U.S. market. Market price and NAV may be calculated at different times, and this timing difference is one of the reasons that NAV and market returns may differ. Also, market price returns do not include brokers' commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. Market and NAV returns assume that dividends and capital gains distributions have been reinvested in the Fund at market price and net asset value, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the management, administration, distribution, transaction or other expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. The Fund's past performance is no guarantee of future results. Top 10 Index Holdings --------------------- Check Point Software Technologies Ltd. 10.04% eBay Inc. 9.95% BEA Systems Inc. 9.51% VeriSign Inc. 8.27% Yahoo! Inc. 7.75% TMP Worldwide Inc. 5.00% EarthLink Inc. 3.58% E*trade Group Inc. 3.52% Amazon.com Inc. 3.32% WebMD Corp. 2.69% The iShares Dow Jones U.S. Internet Index Fund seeks to track the performance of the Dow Jones U.S. Internet Index. For the six months through October 31, 2001 (the "reporting period"), the iShares Dow Jones U.S. Internet Index Fund declined 46.99%. Over the same period, the Index fell 47.11%. The U.S. economy continued to weaken throughout the past six months, as rising unemployment and falling corporate revenues served to drive stock prices downward. Unemployment was a critical issue during the period. By the end of October, the jobless rate stood at 5.4%, leaping from 4.9% in September, the worst one-month increase in 15 years. This increase in unemployment led to declines in consumer confidence, as well as consumer spending, which fell 1.8% in September. Many investors followed these developments with concern, as consumer spending represents two thirds of the U.S. economy. Elsewhere, industrial production was also weak, falling for the 12th straight month in September, its longest decline in more than 50 years. In this already fragile economic environment, the tragic events of September 11, 2001 dampened chances for a quick recovery. The Commerce Department, adjusting GDP figures to account for the effects of the tragedy, said that the economy contracted 0.4% in the third quarter. - -------------------------------------------------------------------------------- page 30 i|Shares During the reporting period, the Federal Reserve Board (the "Fed") reduced interest rates consistently, seeking to restore economic expansion. On May 15, 2001, the Fed cut rates to 4.00%, a seven-year low. Other rate cuts followed, including a half percentage point reduction on October 2 -- the ninth cut of the year -- bringing the fed funds rate to 2.50%. However, despite interest rates being at their lowest level since 1962, there remained few signs of economic recovery during the reporting period. Amid this economic weakness, Internet stocks were very hard hit. Investor sentiment toward Internet companies remained negative, as revenue growth failed to meet expectations. Even well known names in online shopping and infrastructure endured difficulties over the reporting period. Check Point Software Technologies (10.04% of the Index as of October 31, 2001) shares lost 52.94%, while BEA Systems (9.51% of the Index as of October 31, 2001) also endured a very difficult period, with its shares falling 70.28%. Online security firm VeriSign (8.27% of the Index) stock declined 24.51%, and Yahoo! (7.75% of the Index as of October 31) shares dropped 46.09%. TMP Worldwide Incorporated (5.00% of the Index) stock lost 38.12%. Two established, consumer-focused sites, E*Trade (3.52% of the Index as of October 31) and Amazon.com (3.32% of the Index) stocks lost 30.53% and 55.77%, respectively. WebMD Incorporated (2.69% of the Index as of October 31) shares dropped 47.30%. Among the top ten holdings, only EBay (9.95% of the Index) and EarthLink (3.58% of the Index as of October 31) shares managed to rise, gaining 3.96% and 33.91%, respectively, over the reporting period. - -------------------------------------------------------------------------------- iShares Managers' Discussion & Analysis page 31 Managers' Discussion & Analysis iShares Dow Jones U.S. Real Estate Index Fund Performance as of 10/31/01 - -------------------------------------------------------------------------------- Average Annual Total Returns - --------------------------------------------------------------------------------
Year Ended 10/31/01 Inception to 10/31/01 ------------------- --------------------- Fund Inception Date NAV Market Index NAV Market Index ---- -------------- --- ------ ----- --- ------ ----- iShares Dow Jones U.S. Real Estate Index Fund 06/12/00 10.77% 10.82% 11.83% 11.61% 10.07% 12.02%
- -------------------------------------------------------------------------------- Total returns represent the iShares Fund's change in value during the periods noted above. A Fund's "net asset value" 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" returns is the price of the last reported trade for shares of each Fund on any national securities exchange or other major U.S. market. Market price and NAV may be calculated at different times, and this timing difference is one of the reasons that NAV and market returns may differ. Also, market price returns do not include brokers' commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. Market and NAV returns assume that dividends and capital gains distributions have been reinvested in the Fund at market price and net asset value, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the management, administration, distribution, transaction or other expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. The Fund's past performance is no guarantee of future results. Top 10 Index Holdings --------------------- Equity Office Properties Trust 10.45% Equity Residential Properties Trust 6.20% Plum Creek Timber Co. Inc. 4.40% Archstone-Smith Trust 3.58% Simon Property Group Inc. 3.45% Prologis Trust 3.10% Apartment Investment & Management Co. "A" 2.75% Boston Properties Inc. 2.68% AvalonBay Communities Inc. 2.60% Kimco Realty Corp. 2.56% The iShares Dow Jones U.S. Real Estate Index Fund seeks to track the performance of the Dow Jones U.S. Real Estate Index. For the six-month period ending October 31, 2001 (the "reporting period"), the Dow Jones U.S. Real Estate Index returned 0.61%. The iShares Dow Jones U.S. Real Estate Index Fund returned 0.15% for the same period. As the nation's economy, particularly the manufacturing sector, continued a downward spiral during the second and third quarters. The Federal Reserve Board (the "Fed") made a 0.5% cut on May 15, its fifth time in 2001, followed by a quarter-point cut June 27, and another quarter-point cut on August 21. In early September, however, August job data was released showing 4.9% unemployment. The stock markets slumped on concerns that consumer confidence would fall and spending would dry up. The September 11 terrorist attacks halted an already decelerating economy. The Fed acted quickly, with a half point rate cut September 17 and again October 2. The federal funds rate was now at 2.5%, the lowest since October of 1962. Retailers were stung by the attacks, as shoppers stayed - -------------------------------------------------------------------------------- page 32 i|Shares home in the aftermath, and retail sales had the biggest drop in a decade as sales fell 2.2% for the month of September. New jobless claims skyrocketed with airline companies announcing big cuts; and the October jobless rate had the worse one-month increase in 15 years, climbing to 5.4%. While many sectors of the market performed poorly, the real estate market remained stronger. Real Estate was one of two Dow Jones sectors with positive returns over the reporting period. The housing industry was buoyed by steadily declining interest rates and new and existing home sales and housing starts all increased until late summer. Low interest also rates spurred a 22.6% increase in refinancing though housing activity fell and non-residential building declined 12.1% in the third quarter. Among the Index's top ten holdings, the best performer was Plum Creek Timber Co. Inc. (4.40% of the Index as of October 31, 2001), up 14.49% for the reporting period. Plum Creek owns private timberland in both the Pacific Northwest and the South. It acquired the Timber Company from Georgia-Pacific Corp. in October 2001, which more than doubled its acreage. Two other strong performers specialize in retail properties: Kimco Realty Corp. (2.56% of the Index as of October 31), which owns and operates neighborhood shopping centers, rose 14.52% and Simon Property Group Inc. (3.45% of the Index), which also owns and operates regional shopping malls, rose 7.84% over the period. Only two of the Index's top ten holdings had negative returns for the period. Boston Properties Inc. (2.68% of the Index as of October 31), which owns Class A office space concentrated in four large cities, declined 7.82%. Apartment community developer Archstone-Smith Trust (3.58% of the Index) which had returned 26.86% in the annual period through April 30, 2001, was down 3.03%. - -------------------------------------------------------------------------------- iShares Managers' Discussion & Analysis page 33 Managers' Discussion & Analysis iShares Cohen & Steers Realty Majors Index Fund Performance as of 10/31/01 - -------------------------------------------------------------------------------- Average Annual Total Returns - --------------------------------------------------------------------------------
Inception to 10/31/01 --------------------- Fund Inception Date Nav Market Index -------------- --- ------ ----- iShares Cohen & Steers Realty Majors Index Fund 01/29/01 3.09% 3.15% 3.24%
- -------------------------------------------------------------------------------- Total returns represent the iShares Fund's change in value during the periods noted above. A Fund's "net asset value" 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" returns is the price of the last reported trade for shares of each Fund on any national securities exchange or other major U.S. market. Market price and NAV may be calculated at different times, and this timing difference is one of the reasons that NAV and market returns may differ. Also, market price returns do not include brokers' commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. Market and NAV returns assume that dividends and capital gains distributions have been reinvested in the Fund at market price and net asset value, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the management, administration, distribution, transaction or other expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. The Fund's past performance is no guarantee of future results. Top 10 Index Holdings --------------------- Equity Office Properties Trust 7.95% Equity Residential Properties Trust 7.72% Simon Property Group Inc. 6.78% Public Storage Inc. 5.63% Vornado Realty Trust 4.83% Prologis Trust 4.68% Boston Properties Inc. 4.52% Kimco Realty Corp. 4.41% Avalonbay Communities Inc. 4.32% Apartment Investment & Management Co. "A" 4.25% The iShares Cohen & Steers Realty Majors Index Fund seeks to track the performance of the Cohen & Steers Realty Majors Index. For the six-month period ending October 31, 2001, the Cohen & Steers Real Estate Index returned 2.19%. The iShares Cohen & Steers Realty Majors Index Fund returned 2.17% for the same period. In the second and third quarters of 2001, the U.S. economy, particularly the manufacturing sector, continued a downward spiral. Durable goods orders, industrial output, and capacity utilization fell month after month. The Federal Reserve Board (the "Fed") cut interest rates 0.5% on May 15 to a seven-year low of 4.0%. This was the fifth cut in 2001. It was followed by a quarter-point cut June 27, and another quarter-point cut on August 21. In early September, however, August job data was released showing 4.9% unemployment. The stock markets slumped on concerns that consumer confidence would fall and spending would dry up. The September 11 terrorist attacks halted an already decelerating economy. The Fed acted quickly, with a half point rate cut September 17, temporary reserves to increase liquidity, and a ninth rate cut of a half - -------------------------------------------------------------------------------- page 34 i|Shares point on October 2. The federal funds rate was now at 2.5%, the lowest since May of 1962. Retailers were stung by the attacks, as shoppers stayed home in the aftermath, and retail sales fell 2.4% in September, the biggest drop in a decade. Adding to consumer concerns, new jobless claims skyrocketed, with airline companies announcing big cuts, and mass layoffs soared 41% in September. The October jobless rate of 5.4% was the worse one-month increase in 15 years. In contrast, the real estate industry, buoyed by steadily declining interest rates, remained healthy throughout the summer. Low interest rates offset the weak labor market, and new and existing home sales and housing starts thrived. Low interest rates also spurred refinancing activity, up 22.6% in October and the highest level since January 1990, but housing starts, new and existing home sales, and building permits all fell. Non-residential building also declined 12.1% in the third quarter. The real estate sector was one of the positive performers for the reporting period from May 1 to October 31, 2001. Likewise, most of the Cohen & Steers Realty Majors Index's top ten holdings had positive returns. The leader by far was Public Storage Inc., (5.63% of the Index as of October 31, 2001), a REIT with over 1,360 storage facilities, which returned 24.77% for the period. The other two strong performers were Kimco Realty Corp (4.41% of the Index as of October 31), which owns neighborhood shopping centers and malls, and was up 14.52% for the period. Vornado Realty Trust (4.83% of the Index) invests in office, retail, merchandise mart, and warehouse space, and returned 9.96%. The only holding that experienced a significant negative return was Boston Properties Inc. (4.52% of the Index), which holds Class A office space in four large metropolitan areas, and was off 7.82%. - -------------------------------------------------------------------------------- iShares Managers' Discussion & Analysis page 35 iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments October 31, 2001 (Unaudited)
Security Shares Value - ------------------------------------------------------------ COMMON STOCKS - 99.88% - ------------------------------------------------------------ General Electric Co. 71,595 $2,606,774 Exxon Mobil Corp. 50,020 1,973,289 Microsoft Corp./(1)/ 33,188 1,929,882 Pfizer Inc. 45,582 1,909,886 Citigroup Inc. 37,209 1,693,754 American International Group Inc. 18,796 1,477,366 International Business Machines Corp. 12,569 1,358,332 Johnson & Johnson 21,641 1,253,230 Intel Corp. 48,524 1,184,956 Merck & Co. Inc. 16,629 1,061,096 Wal-Mart Stores Inc. 19,893 1,022,500 Verizon Communications Inc. 19,363 964,471 AOL Time Warner Inc./(1)/ 30,707 958,365 SBC Communications Inc. 24,354 928,131 Cisco Systems Inc./(1)/ 52,470 887,792 Coca-Cola Co. 16,486 789,350 Bristol-Myers Squibb Co. 14,098 753,538 Philip Morris Companies Inc. 15,905 744,354 Tyco International Ltd. 14,270 701,228 Procter & Gamble Co. 9,307 686,670 Bank of America Corp. 11,581 683,163 ChevronTexaco Corp. 7,692 681,127 Home Depot Inc. 16,735 639,779 PepsiCo Inc. 12,644 615,889 Fannie Mae 7,255 587,365 Abbott Laboratories 10,372 549,509 Lilly (Eli) and Company 6,960 532,440 American Home Products Corp. 9,450 527,593 JP Morgan Chase & Co. 14,314 506,143 BellSouth Corp. 13,401 495,837 Wells Fargo & Company 12,324 486,798 Amgen Inc./(1)/ 7,513 426,889 Oracle Corp./(1)/ 30,818 417,892 Viacom Inc. "B"/(1)/ 11,100 405,261 Dell Computer Corp./(1)/ 16,633 398,859 Schering-Plough Corp. 10,544 392,026 AT&T Corp. 25,483 388,616 Pharmacia Corporation 9,301 376,877 Morgan Stanley Dean Witter & Co. 7,344 359,268 Medtronic Inc. 8,721 351,456 Texas Instruments Inc. 12,520 350,435 Freddie Mac 5,031 341,202 Du Pont (E.I.) de Nemours 7,524 300,885 Minnesota Mining & Manufacturing Co. 2,853 $ 297,796 Wachovia Corp. 10,097 288,774 WorldCom Inc./(1)/ 21,180 284,871 Walt Disney Co. (The) 15,015 279,129 Bank One Corp. 8,338 276,738 Anheuser-Busch Companies Inc. 6,535 272,248 QUALCOMM Inc./(1)/ 5,438 267,115 AT&T Wireless Services Inc./(1)/ 18,245 263,458 Motorola Inc. 15,765 258,073 FleetBoston Financial Corp. 7,807 256,538 U.S. Bancorp 14,128 251,196 American Express Co. 8,510 250,449 Merrill Lynch & Co. Inc. 5,712 249,672 McDonald's Corp. 9,332 243,285 Sun Microsystems Inc./(1)/ 23,630 239,845 Walgreen Co. 7,332 237,410 Comcast Corp. "A"/(1)/ 6,555 234,931 Automatic Data Processing Inc. 4,505 232,728 Colgate-Palmolive Co. 3,946 226,974 Dow Chemical Co. 6,477 215,360 Gillette Co. 6,908 214,770 Cardinal Health Inc. 3,200 214,752 Kimberly-Clark Corp. 3,835 212,881 Duke Energy Corp. 5,512 211,716 Baxter International Inc. 4,258 205,959 Ford Motor Company 12,690 203,674 Alcoa Inc. 6,251 201,720 Target Corp. 6,465 201,385 Schlumberger Ltd. 4,135 200,217 Liberty Media Corp. "A"/(1)/ 17,103 199,934 Electronic Data Systems Corp. 3,103 199,740 Applied Materials Inc./(1)/ 5,845 199,373 Hewlett-Packard Co. 11,803 198,644 Fifth Third Bancorp 3,508 197,921 EMC Corp./(1)/ 16,013 197,280 First Data Corp. 2,853 192,777 Marsh & McLennan Companies Inc. 1,988 192,339 Washington Mutual Inc. 6,336 191,284 Boeing Co. 5,816 189,602 United Technologies Corp. 3,393 182,849 Bank of New York Co. Inc. 5,344 181,749 El Paso Corp. 3,672 180,148 Household International Inc. 3,351 175,257 Honeywell International Inc. 5,810 171,685 Lowe's Companies Inc. 5,005 170,670
- -------------------------------------------------------------------------------- page 36 i|Shares iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments (continued) October 31, 2001 (Unaudited)
Security Shares Value - ------------------------------------------------------------ COMMON STOCKS (continued) - ------------------------------------------------------------ Lucent Technologies Inc./(2)/ 24,578 $164,673 Allstate Corp. 4,945 155,174 Emerson Electric Co. 3,099 151,913 Safeway Inc./(1)/ 3,623 150,898 UnitedHealth Group Inc. 2,292 150,699 MBNA Corp. 5,432 149,978 Clear Channel Communications Inc./(1)/ 3,860 147,143 Kroger Co./(1)/ 5,907 144,485 MetLife Inc./(2)/ 5,185 139,476 Phillips Petroleum Co. 2,473 134,556 Tenet Healthcare Corp./(1)/ 2,329 133,964 HCA - The Healthcare Company 3,314 131,433 General Motors Corp. "A" 3,167 130,860 Qwest Communications International Inc. 9,797 126,871 Sara Lee Corp. 5,648 125,894 Illinois Tool Works Inc. 2,181 124,753 International Paper Co. 3,477 124,477 Goldman Sachs Group Inc. (The) 1,570 122,711 Costco Wholesale Corp./(1)/ 3,234 122,342 Alltel Corp. 2,140 122,280 Lockheed Martin Corp. 2,487 121,291 Gannett Co. Inc. 1,901 120,143 General Dynamics Corp. 1,453 118,565 Southern Co. 4,943 118,138 Sysco Corp. 4,878 117,609 Conoco Inc./(1)/ 4,509 115,881 Mellon Financial Corp. 3,446 115,786 PNC Financial Services Group 2,086 114,521 United Parcel Service Inc. 2,240 114,240 Sprint Corp. (FON Group) 5,687 113,740 Williams Companies Inc. 3,911 112,911 Caterpillar Inc. 2,481 110,950 Waste Management Inc. 4,493 110,079 Dominion Resources Inc. 1,790 109,405 SunTrust Banks Inc. 1,822 109,065 Lehman Brothers Holdings Inc. 1,740 108,680 Maxim Integrated Products Inc./(1)/ 2,362 108,061 Compaq Computer Corp. 12,283 107,476 State Street Corp. 2,356 107,292 Heinz (H.J.) Co. 2,512 106,609 Omnicom Group Inc. 1,337 102,655 Anadarko Petroleum Corp. 1,798 102,576 Computer Associates International Inc. 3,295 101,881 Kohls Corp./(1)/ 1,802 $100,209 Concord EFS Inc./(1)/(2)/ 3,644 99,736 Harley-Davidson Inc. 2,192 99,210 Analog Devices Inc./(1)/ 2,601 98,838 National City Corp. 3,724 98,314 BB&T Corp. 3,059 98,194 Schwab (Charles) Corp. 7,613 98,055 American Electric Power Inc. 2,325 97,417 Exelon Corp. 2,299 96,719 Sprint Corp. (PCS Group)/(1)/(2)/ 4,313 96,180 Forest Laboratories Inc. "A"/(1)/ 1,270 94,463 USA Education Inc./(2)/ 1,152 93,957 General Mills Inc. 2,045 93,906 AFLAC Inc. 3,836 93,829 Hartford Financial Services Group Inc. 1,710 92,340 Guidant Corp./(1)/ 2,221 92,194 Sears, Roebuck and Co. 2,377 92,156 Linear Technology Corp. 2,290 88,852 ConAgra Foods Inc. 3,878 88,806 Micron Technology Inc./(1)/ 3,876 88,218 Union Pacific Corp. 1,696 88,209 Albertson's Inc. 2,746 87,625 Baker Hughes Inc. 2,411 86,386 Chubb Corp. 1,262 86,195 Cendant Corp./(1)/(2)/ 6,584 85,329 TXU Corporation 1,860 85,262 Equity Office Properties Trust 2,956 84,246 Raytheon Co. 2,573 82,979 Genentech Inc./(1)/ 1,580 82,555 FedEx Corp./(1)/ 2,005 82,365 Veritas Software Corp./(1)/ 2,875 81,593 Genzyme Corp. - General Division/(1)/ 1,493 80,547 Avon Products Inc. 1,711 80,126 Southwest Airlines Co. 5,024 79,882 CIGNA Corp. 1,083 78,951 XL Capital Ltd. "A" 903 78,435 Weyerhaeuser Co. 1,550 77,361 Paychex Inc. 2,390 76,623 Halliburton Co. 3,100 76,539 Northern Trust Corp. 1,510 76,240 JDS Uniphase Corp./(1)/ 9,526 76,113 Burlington Northern Santa Fe Corp. 2,832 76,096 Enron Corp. 5,338 74,198 McGraw-Hill Companies Inc. 1,402 73,717 Ralston Purina Group 2,228 73,056
- -------------------------------------------------------------------------------- iShares Schedules of Investments page 37 iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments (continued) October 31, 2001 (Unaudited)
Security Shares Value - ---------------------------------------------------------- COMMON STOCKS (continued) - ---------------------------------------------------------- Hancock (John) Financial Services Inc. 2,127 $72,488 Xilinx Inc./(1)/ 2,381 72,430 McKesson HBOC Inc. 1,919 70,984 Xcel Energy Inc. 2,477 70,050 Transocean Sedco Forex Inc. 2,297 69,255 St. Paul Companies Inc. 1,504 69,034 Allergan Inc. 953 68,416 TJX Companies Inc. 2,019 68,242 May Department Stores Co. 2,147 67,523 Occidental Petroleum Corp. 2,666 67,503 CVS Corp. 2,822 67,446 FPL Group Inc. 1,268 67,331 Agilent Technologies Inc./(1)/ 3,014 67,122 Archer-Daniels-Midland Co. 4,810 67,003 Best Buy Co. Inc./(1)/ 1,216 66,758 Air Products & Chemicals Inc. 1,650 66,066 Becton Dickinson & Co. 1,840 65,872 Progress Energy Inc. 1,559 65,743 Pitney Bowes Inc. 1,787 65,511 KeyCorp 3,076 65,396 Masco Corp. 3,288 65,201 Progressive Corporation 467 64,778 IDEC Pharmaceuticals Corp./(1)/(2)/ 1,080 64,757 General Motors Corp. "H"/(1)/ 4,681 64,364 Mirant Corp./(1)/ 2,442 63,492 AON Corp. 1,655 62,956 Deere & Co. 1,696 62,735 Capital One Financial Corp. 1,509 62,337 Entergy Corp. 1,585 61,577 eBay Inc./(1)/(2)/ 1,171 61,454 USX-Marathon Group Inc. 2,222 61,305 Nike Inc. "B" 1,241 61,256 Stryker Corp. 1,083 60,908 Interpublic Group of Companies Inc. 2,674 60,031 Biomet Inc. 1,941 59,200 ACE Ltd./(2)/ 1,674 59,008 King Pharmaceuticals Inc./(1)/ 1,513 58,992 PPG Industries Inc. 1,208 58,987 Comerica Inc. 1,277 58,857 Public Service Enterprise Group Inc. 1,494 58,804 Gap Inc. (The) 4,484 58,606 Mattel Inc./(1)/ 3,095 58,588 Biogen Inc./(1)/ 1,062 58,410 Solectron Corp./(1)/(2)/ 4,709 $57,921 Lincoln National Corp. 1,359 57,554 MedImmune Inc./(1)/ 1,455 57,094 Altera Corp./(1)/ 2,819 56,944 Unocal Corp. 1,758 56,608 Burlington Resources Inc. 1,517 56,508 Consolidated Edison Inc. 1,425 56,273 Carnival Corp. "A" 2,583 56,258 SouthTrust Corp. 2,468 55,925 Corning Inc. 6,823 54,993 Praxair Inc. 1,163 54,870 Intuit Inc./(1)/ 1,362 54,780 PeopleSoft Inc./(1)/ 1,838 54,717 Immunex Corp./(1)/(2)/ 2,285 54,589 KLA-Tencor Corp./(1)/(2)/ 1,335 54,548 Calpine Corp./(1)/ 2,184 54,054 Eastman Kodak Co. 2,099 53,671 Cox Communications Inc. "A"/(1)/ 1,396 53,467 Tricon Global Restaurants Inc./(1)/ 1,053 53,271 Newell Rubbermaid Inc./(2)/ 1,925 53,207 Reliant Energy Inc. 1,895 52,965 Loews Corp. 1,040 52,832 Northrop Grumman Corp. 526 52,574 FirstEnergy Corp./(2)/ 1,517 52,276 Wrigley (William Jr.) Co. 1,042 52,152 CSX Corp. 1,547 52,134 Bed Bath & Beyond Inc./(1)/ 2,074 51,974 Kellogg Co. 1,699 51,819 Campbell Soup Co. 1,829 51,651 VeriSign Inc./(1)/(2)/ 1,325 51,291 Wellpoint Health Networks Inc./(1)/ 456 50,885 PG&E Corp. 2,802 50,604 SunGard Data Systems Inc./(1)/ 1,997 50,324 Fiserv Inc./(1)/ 1,350 50,207 Equity Residential Properties Trust 1,930 50,083 MBIA Inc. 1,065 49,054 Marriott International Inc. "A" 1,552 48,624 Dover Corp. 1,460 48,107 Siebel Systems Inc./(1)/ 2,937 47,961 Staples Inc./(1)/ 3,287 47,924 Tribune Co. 1,573 47,505 Electronic Arts Inc./(1)/(2)/ 923 47,498 AutoZone Inc./(1)/ 806 47,175 Golden West Financial Corp. 969 47,093 Delphi Automotive Systems Corp. 4,055 47,079
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Security Shares Value - ------------------------------------------------------------ COMMON STOCKS (continued) - ------------------------------------------------------------ AmerisourceBergen Corp./(1)/ 738 $46,907 Boston Scientific Corp./(1)/ 2,057 46,776 Starbucks Corp./(1)/ 2,723 46,618 Norfolk Southern Corp. 2,781 46,582 Apache Corp. 898 46,337 DTE Energy Co. 1,110 46,276 AmSouth Bancorp 2,673 46,216 Jefferson-Pilot Corp. 1,117 46,188 AES Corp./(1)/ 3,325 46,051 Adobe Systems Inc. 1,738 45,883 Federated Department Stores Inc./(1)/ 1,427 45,650 IMS Health Inc. 2,122 45,347 Georgia-Pacific Corp. 1,631 45,277 Broadcom Corp. "A"/(1)/ 1,307 44,974 Johnson Controls Inc. 621 44,911 Ingersoll-Rand Co. 1,203 44,872 Block (H & R) Inc. 1,310 44,645 LSI Logic Corp./(1)/ 2,632 44,612 Applera Corp. - Applied Biosystems Group 1,523 44,441 Clorox Co. 1,244 44,411 Apple Computer Inc./(1)/ 2,511 44,093 St. Jude Medical Inc./(1)/ 620 44,020 Regions Financial Corp. 1,633 43,944 Zimmer Holdings Inc./(1)/ 1,415 43,738 Hershey Foods Corp. 679 43,273 M&T Bank Corp. 660 43,230 Cincinnati Financial Corp. 1,158 43,078 Charter One Financial Inc. 1,579 43,028 Gilead Sciences Inc./(1)/ 682 42,898 Chiron Corp./(1)/ 786 42,303 Marshall & Ilsley Corp. 719 42,162 Dynegy Inc. "A" 1,171 42,039 Danaher Corp./(2)/ 754 42,028 Lexmark International Group Inc. "A"/(1)/ 931 41,662 Computer Sciences Corp./(1)/ 1,152 41,368 Penney (J.C.) Company Inc. 1,891 41,073 Fortune Brands Inc. 1,112 40,977 Genuine Parts Co. 1,240 40,300 Brocade Communications System Inc./(1)/(2)/ 1,639 40,237 Union Planters Corp. 991 40,136 UST Inc. 1,179 39,626 R.J. Reynolds Tobacco Holdings Inc. 707 39,620 Ameren Corp. 986 39,539 New York Times Co. "A" 956 $39,435 Kerr-McGee Corp. 683 39,341 Bear Stearns Companies Inc. 726 39,204 Rohm & Haas Co. "A" 1,203 39,061 Nextel Communications Inc. "A"/(1)/(2)/ 4,843 38,502 Check Point Software Technologies Ltd./(1)/(2)/ 1,301 38,406 Ciena Corp./(1)/ 2,358 38,341 Cadence Design Systems Inc./(1)/ 1,800 38,052 Gemstar-TV Guide International Inc./(1)/ 1,832 37,135 Avery Dennison Corp. 797 36,901 Tellabs Inc./(1)/(2)/ 2,702 36,882 Synovus Financial Corp. 1,595 36,717 MGIC Investment Corp. 707 36,580 Millennium Pharmaceuticals Inc./(1)/ 1,432 36,459 Healthsouth Corp./(1)/ 2,798 36,430 Xerox Corp. 5,201 36,407 Watson Pharmaceuticals Inc./(1)/ 762 36,332 Cintas Corp. 897 36,257 Ambac Financial Group Inc. 751 36,048 Plum Creek Timber Co. Inc. 1,304 36,030 PPL Corp. 1,054 35,994 NiSource Inc. 1,489 35,364 Sanmina Corp./(1)/ 2,305 34,898 UNUMProvident Corp. 1,554 34,856 Sempra Energy 1,486 34,772 Cinergy Corp. 1,151 34,737 BEA Systems Inc./(1)/ 2,857 34,684 EchoStar Communications Corp./(1)/(2)/ 1,488 34,507 Franklin Resources Inc. 1,075 34,507 Health Management Associates Inc. "A"/(1)/ 1,762 34,341 Human Genome Sciences Inc./(1)/ 805 34,317 Amerada Hess Corp. 580 34,075 Novellus Systems Inc./(1)/ 1,027 33,922 GPU Inc. 854 33,861 Family Dollar Stores Inc. 1,173 33,853 National Commerce Financial Corp. 1,488 33,852 RadioShack Corp. 1,353 33,811 Countrywide Credit Industries Inc. 846 33,781 Willamette Industries Inc. 719 33,685 Edison International/(1)/ 2,369 33,663 Moody's Corp. 966 33,540 Torchmark Corp. 904 33,475 Telephone & Data Systems Inc. 380 33,402 Waters Corp./(1)/ 935 33,183 Mylan Laboratories Inc. 896 33,036
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Security Shares Value - ------------------------------------------------------------ COMMON STOCKS (continued) - ------------------------------------------------------------ Devon Energy Corp./(2)/ 859 $32,900 Allegheny Energy Inc. 900 32,895 Newmont Mining Corp. 1,416 32,851 KeySpan Corp. 990 32,848 North Fork Bancorp 1,174 32,755 Eaton Corp. 500 32,720 Network Appliance Inc./(1)/ 2,453 32,625 Nabors Industries Inc./(1)/ 1,058 32,523 NVIDIA Corp./(1)/(2)/ 758 32,488 National Semiconductor Corp./(1)/ 1,248 32,423 Kinder Morgan Inc. 652 32,359 Textron Inc. 1,020 32,283 Convergys Corp./(1)/ 1,139 32,006 Stilwell Financial Inc. 1,583 31,834 First Tennessee National Corp. 921 31,821 Imclone Systems Inc./(1)/(2)/ 519 31,758 Zions Bancorp 659 31,579 Quest Diagnostics Inc./(1)/ 482 31,513 Starwood Hotels & Resorts Worldwide Inc. 1,425 31,407 Citrix Systems Inc./(1)/ 1,338 31,309 Leggett & Platt Inc. 1,429 30,966 Coca-Cola Enterprises Inc./(2)/ 1,670 30,644 Amdocs Ltd./(1)/(2)/ 1,161 30,314 BJ Services Co./(1)/ 1,184 30,299 CenturyTel Inc. 956 30,210 ITT Industries Inc. 625 30,056 Pepsi Bottling Group Inc. 645 29,980 Parker Hannifin Corp. 834 29,941 Noble Drilling Corp./(1)/ 980 29,939 Charter Communications Inc./(1)/(2)/ 2,104 29,751 Knight Ridder Inc. 528 29,700 Microchip Technology Inc./(1)/ 948 29,597 Laboratory Corp. of America Holdings/(1)/ 342 29,480 Office Depot Inc./(1)/ 2,162 29,403 Symantec Corp./(1)/ 534 29,365 Teradyne Inc./(1)/ 1,263 29,112 Whirlpool Corp. 489 28,861 SPX Corp./(1)/(2)/ 289 28,784 SAFECO Corp. 926 28,558 Limited Inc. 2,555 28,488 Aetna Inc./(1)/ 1,024 28,303 Archstone-Smith Trust 1,166 28,217 Yahoo! Inc./(1)/(2)/ 2,593 28,212 Huntington Bancshares Inc. 1,827 $28,191 Dime Bancorp Inc. 831 28,154 Ecolab Inc. 798 28,074 Simon Property Group Inc. 1,013 27,858 Affiliated Computer Services Inc. "A"/(1)/(2)/ 315 27,736 Weatherford International Inc./(1)/ 808 27,658 Dollar General Corp. 1,931 27,594 International Game Technology Inc./(1)/ 536 27,363 PACCAR Inc. 518 27,361 Darden Restaurants Inc. 854 27,345 Toys R Us Inc./(1)/ 1,438 27,322 Thermo Electron Corp./(1)/ 1,290 27,271 Vulcan Materials Co. 656 27,270 EOG Resources Inc. 767 27,129 ADC Telecommunications Inc./(1)/ 5,947 27,059 Compuware Corp./(1)/ 2,630 27,036 BJ's Wholesale Club Inc./(1)/ 530 26,908 Sepracor Inc./(1)/(2)/ 566 26,851 QLogic Corp./(1)/(2)/ 681 26,797 BMC Software Inc./(1)/ 1,771 26,689 Scripps (E.W.) Company 432 26,641 American Water Works Inc. 654 26,552 Constellation Energy Group Inc. 1,182 26,441 Cooper Industries Inc. 677 26,200 Robert Half International Inc./(1)/ 1,268 26,159 Pinnacle West Capital Corp. 620 26,133 Ultramar Diamond Shamrock Corp. 519 25,976 TECO Energy Inc. 991 25,518 Andrx Group/(1)/(2)/ 391 25,388 IVAX Corporation/(1)/(2)/ 1,232 25,318 Sabre Holdings Corp./(1)/ 962 25,301 Prologis Trust 1,264 25,192 Estee Lauder Companies Inc. "A"/(2)/ 779 25,123 Engelhard Corp. 959 25,107 TRW Inc. 742 25,072 T Rowe Price Group Inc. 897 24,901 American Standard Companies Inc./(1)/ 430 24,897 Atmel Corp./(1)/ 3,128 24,868 Univision Communications Inc./(1)/(2)/ 994 24,850 Harrah's Entertainment Inc./(1)/ 852 24,819 Tiffany & Co. 1,055 24,676 Popular Inc. 840 24,671 NCR Corp./(1)/ 694 24,602 Sealed Air Corp./(1)/(2)/ 609 24,384 Grainger (W.W.) Inc. 562 24,335
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Security Shares Value - ---------------------------------------------------------------- COMMON STOCKS (continued) - ---------------------------------------------------------------- Applied Micro Circuits Corp./(1)/ 2,195 $24,211 Utilicorp United Inc. 817 24,208 Agere Systems Inc./(1)/ 5,250 24,150 Advanced Micro Devices Inc./(1)/ 2,439 24,000 Scientific-Atlanta Inc. 1,142 23,834 Stanley Works (The) 621 23,797 Servicemaster Co. 2,179 23,642 Jabil Circuit Inc./(1)/(2)/ 1,114 23,617 Equifax Inc. 1,043 23,321 Nucor Corp. 560 23,128 Comverse Technology Inc./(1)/ 1,224 23,023 Hilton Hotels Corp. 2,687 23,001 Edwards (A.G.) Inc. 580 22,933 Compass Bancshares Inc. 911 22,802 Sherwin-Williams Co. 935 22,777 Cephalon Inc./(1)/ 361 22,761 TCF Financial Corp. 539 22,638 Ocean Energy Inc. 1,239 22,612 L-3 Communications Holdings Inc./(1)/(2)/ 259 22,499 Murphy Oil Corp. 283 22,499 Caremark Rx Inc./(1)/ 1,669 22,365 Gallagher (Arthur J.) & Co. 610 22,289 Radian Group Inc. 656 22,219 Everest Re Group Ltd. 330 22,060 USA Networks Inc./(1)/ 1,195 22,036 Sunoco Inc. 588 22,009 Cytyc Corp./(1)/ 838 21,972 Apartment Investment & Management Co. "A" 523 21,950 Bisys Group Inc./(1)/(2)/ 420 21,848 Kmart Corp./(1)/(2)/ 3,559 21,817 Banknorth Group Inc. 994 21,798 Symbol Technologies Inc. 1,696 21,794 Integrated Device Technology Inc./(1)/ 781 21,751 Boston Properties Inc. 615 21,740 Donnelley (R.R.) & Sons Co. 845 21,547 Goodyear Tire & Rubber Co. 1,154 21,499 DPL Inc. 933 21,459 SCI Systems Inc./(1)/ 1,054 21,407 AutoNation Inc./(1)/ 2,079 21,393 DST Systems Inc./(1)/ 522 21,376 Invitrogen Corp./(1)/ 348 21,346 Apollo Group Inc. "A"/(1)/ 521 21,179 VF Corp. 637 21,161 AvalonBay Communities Inc. 465 $21,111 Niagara Mohawk Holdings Inc./(1)/ 1,170 20,966 Kimco Realty Corp. 425 20,778 Synopsys Inc./(1)/ 442 20,774 Fluor Corp. 558 20,769 Rational Software Corp./(1)/ 1,582 20,756 PMC - Sierra Inc./(1)/ 1,276 20,709 SUPERVALU Inc. 970 20,700 RF Micro Devices Inc./(1)/(2)/ 1,012 20,685 Protein Design Labs Inc./(1)/(2)/ 626 20,664 CMS Energy Corp. 958 20,607 Delta Air Lines Inc. 899 20,551 Unisys Corp./(1)/ 2,300 20,539 Old Republic International Corp. 808 20,499 Global Marine Inc./(1)/ 1,272 20,479 Bard (C.R.) Inc. 373 20,478 Golden State Bancorp Inc. 807 20,466 Vornado Realty Trust 522 20,462 Republic Services Inc. "A"/(1)/ 1,247 20,426 Duke-Weeks Realty Corp. 876 20,192 Cablevision Systems Corp./(1)/ 587 20,105 Jones Apparel Group Inc./(1)/ 727 20,065 AMR Corp./(1)/ 1,096 19,947 Hasbro Inc./(2)/ 1,198 19,851 ICOS Corp./(1)/(2)/ 343 19,808 Fox Entertainment Group Inc. "A"/(1)/ 897 19,743 Greenpoint Financial Corp. 616 19,743 PerkinElmer Inc. 732 19,698 Black & Decker Corp. 594 19,655 Lincare Holdings Inc./(1)/ 764 19,635 Health Net Inc./(1)/ 891 19,557 Peregrine Systems Inc./(1)/ 1,354 19,552 Legg Mason Inc. 462 19,455 Circuit City Stores Inc. 1,417 19,441 ENSCO International Inc. 981 19,424 Hillenbrand Industries Inc. 365 19,352 McCormick & Co. Inc. 442 19,342 SCANA Corp. 746 19,210 ChoicePoint Inc./(1)/ 449 19,208 Rite Aid Corp./(1)/(2)/ 3,475 19,182 Eastman Chemical Co. 559 19,179 Mead Corp. 710 19,056 Mercantile Bankshares Corp. 498 19,034 Ashland Inc. 468 18,842 Sigma-Aldrich Corp. 502 18,835
- -------------------------------------------------------------------------------- iShares Schedules of Investments page 41 iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments (continued) October 31, 2001 (Unaudited)
Security Shares Value - ---------------------------------------------------------------- COMMON STOCKS (continued) - ---------------------------------------------------------------- Pactiv Corp./(1)/ 1,156 $18,727 Semtech Corp./(1)/(2)/ 494 18,649 Smurfit-Stone Container Corp./(1)/ 1,259 18,646 Enzon Inc./(1)/ 301 18,617 Wisconsin Energy Corp. 837 18,590 Network Associates Inc./(1)/(2)/ 967 18,566 Brinker International Inc./(1)/ 729 18,517 Conexant Systems Inc./(1)/ 1,823 18,503 Public Storage Inc. 559 18,386 Federated Investors Inc. "B" 703 18,348 Rockwell International Corp. 1,323 18,231 Citizen Communications Co./(1)/(2)/ 2,050 18,224 Wendy's International Inc. 692 18,200 Dollar Tree Stores Inc./(1)/ 809 18,178 Diebold Inc. 500 18,150 Pall Corp./(2)/ 894 18,148 Beckman Coulter Inc. 425 18,050 Express Scripts Inc. "A"/(1)/ 440 18,014 Celgene Corp./(1)/ 547 18,007 Westvaco Corp. 733 17,995 Astoria Financial Corp. 345 17,971 Rockwell Collins 1,331 17,969 Apogent Technologies Inc./(1)/(2)/ 766 17,940 Cypress Semiconductor Corp./(1)/ 907 17,913 Temple-Inland Inc. 358 17,896 Bowater Inc. 400 17,888 Avnet Inc. 858 17,701 Sovereign Bancorp Inc. 1,787 17,691 Millipore Corp. 338 17,677 Arrow Electronics Inc./(1)/(2)/ 722 17,653 Ross Stores Inc. 564 17,653 Smith International Inc./(1)/ 372 17,596 Hibernia Corp. "A" 1,152 17,510 First Health Group Corp./(1)/ 648 17,496 TMP Worldwide Inc./(1)/(2)/ 585 17,462 Newport News Shipbuilding Inc. 252 17,438 PMI Group Inc. (The) 314 17,411 Ceridian Corp./(1)/ 1,055 17,397 Polycom Inc./(1)/(2)/ 577 17,298 Manor Care Inc./(1)/ 740 17,286 Patterson Dental Co./(1)/ 454 17,252 CDW Computer Centers Inc./(1)/ 374 17,223 SEI Investment Co. 558 17,159 Lam Research Corp./(1)/ 903 $17,121 Liz Claiborne Inc. 376 17,108 Northeast Utilities 966 17,050 Valley National Bancorp 569 17,007 Vishay Intertechnology Inc./(1)/ 899 16,964 Expeditors International Washington Inc. 375 16,950 Commerce Bancorp Inc. 232 16,936 Deluxe Corp. 481 16,835 Oxford Health Plans Inc./(1)/ 712 16,775 American Power Conversion Corp./(1)/ 1,303 16,770 Potomac Electric Power Co. 783 16,764 Valero Energy Corp./(2)/ 443 16,657 Centex Corp. 435 16,643 Avaya Inc./(1)/ 1,862 16,628 International Flavors & Fragrances Inc. 578 16,479 Alliant Energy Corp./(2)/ 560 16,464 Varian Medical Systems Inc./(1)/ 244 16,372 Sonoco Products Co. 695 16,312 Phelps Dodge Corp. 562 16,298 Harris Corp. 475 16,283 Trigon Healthcare Inc./(1)/ 265 16,268 New York Community Bancorp 648 16,245 Bemis Co. 374 16,183 Tech Data Corp./(1)/ 379 16,180 Erie Indemnity Co. "A" 413 16,024 Intersil Holding Corp./(1)/ 488 15,982 International Rectifier Corp./(1)/(2)/ 455 15,975 Manpower Inc. 554 15,822 Equitable Resources Inc. 480 15,797 Energy East Corp. 839 15,790 Iron Mountain Inc./(1)/ 402 15,698 Abgenix Inc./(1)/ 526 15,670 Tyson Foods Inc. "A" 1,591 15,576 Community Health Systems Inc./(1)/(2)/ 621 15,525 American National Insurance Co. 189 15,496 Dun & Bradstreet Corp./(1)/ 494 15,442 First Virginia Banks Inc. 341 15,406 NSTAR 373 15,338 Cabot Corp. 457 15,309 Associated Bancorp 444 15,282 TriQuint Semiconductor Inc./(1)/ 863 15,258 Fairchild Semiconductor Corp. "A"/(1)/ 717 15,236 Crown Castle International Corp./(1)/ 1,302 15,233 Molex Inc. "A" 613 15,233 Adelphia Communications Corp. "A"/(1)/(2)/ 686 15,181
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Security Shares Value - --------------------------------------------------------- COMMON STOCKS (continued) - --------------------------------------------------------- Universal Health Services Inc. "B"/(1)/ 372 $15,025 CH Robinson Worldwide Inc. 560 14,991 Cooper Cameron Corp./(1)/ 383 14,937 Dentsply International Inc. 332 14,937 Health Care Property Investors Inc. 399 14,851 Waddell & Reed Financial Inc. "A" 579 14,759 XTO Energy Inc. 815 14,670 Allmerica Financial Corp./(1)/ 375 14,625 Goodrich (B.F.) Co. 684 14,603 Investment Technology Group Inc./(1)/ 226 14,557 Neuberger Berman Inc. 416 14,510 Venator Group Inc./(1)/ 996 14,442 Allied Capital Corp. 640 14,413 Fastenal Co./(2)/ 244 14,408 Commerce Bancshares Inc. 396 14,363 Western Wireless Corp. "A"/(1)/ 492 14,352 Conectiv Inc. 607 14,325 AMB Property Corp. 589 14,319 Certegy Inc./(1)/ 501 14,278 Allied Waste Industries Inc./(1)/ 1,436 14,245 Maytag Corp. 509 14,191 ICN Pharmaceuticals Inc./(2)/ 585 14,163 Mercury Interactive Corp./(1)/ 588 14,006 Outback Steakhouse Inc./(1)/ 485 13,992 Storage Technology Corp./(1)/ 745 13,984 Emulex Corp./(1)/(2)/ 590 13,971 Liberty Property Trust 521 13,963 Lear Corp./(1)/ 454 13,938 FirstMerit Corp. 603 13,917 Lamar Advertising Co./(1)/ 442 13,879 Broadwing Inc./(1)/ 1,497 13,862 Vitesse Semiconductor Corp./(1)/(2)/ 1,462 13,801 Noble Affiliates Inc. 373 13,790 Washington Post Company (The) "B"/(2)/ 27 13,784 Homestake Mining Company 1,678 13,760 Westwood One Inc./(1)/ 577 13,727 BancWest Corporation 392 13,700 Parametric Technology Corp./(1)/ 1,953 13,691 Barnes & Noble Inc./(1)/ 372 13,671 Lennar Corp./(2)/ 377 13,670 Martin Marietta Materials Inc. 342 13,653 American Tower Corp./(1)/(2)/ 1,237 13,632 Pacific Century Financial Corp. 585 13,631 Lattice Semiconductor Corp./(1)/ 777 $13,597 Humana Inc./(1)/ 1,176 13,583 Park Place Entertainment Corp./(1)/ 1,897 13,583 TeleCorp PCS Inc./(1)/ 1,003 13,460 Omnicare Inc. 675 13,419 Tektronix Inc./(1)/ 681 13,416 Fidelity National Financial Inc. 581 13,369 Alliant Techsystems Inc./(1)/ 153 13,351 Abercrombie & Fitch Co. "A"/(1)/(2)/ 709 13,343 Wilmington Trust Corp. 234 13,291 99 Cents Only Stores/(1)/ 373 13,260 Service Corp. International/(1)/ 2,079 13,243 AdvancePCS/(1)/ 217 13,187 Crescent Real Estate Equities Co. 746 13,137 Whole Foods Market Inc./(1)/(2)/ 378 13,136 National Fuel Gas Co. 560 13,110 EarthLink Inc./(1)/ 894 13,097 Navistar International Corp. 435 13,050 Autodesk Inc. 392 13,022 Unitrin Inc. 337 13,008 Mohawk Industries Inc./(1)/ 301 13,003 Vertex Pharmaceuticals Inc./(1)/ 529 12,961 Bausch & Lomb Inc. 398 12,959 Hormel Foods Corp. 538 12,912 NICOR Inc. 330 12,834 Santa Fe International Corp. 527 12,827 Questar Corp. 582 12,804 Quintiles Transnational Corp./(1)/ 806 12,783 Fulton Financial Corp. 578 12,670 UnionBanCal Corporation 379 12,655 Amazon.com Inc./(1)/(2)/ 1,811 12,641 Diamond Offshore Drilling Inc./(2)/ 458 12,641 Mack-Cali Realty Corp. 407 12,617 E*trade Group Inc./(1)/(2)/ 1,931 12,609 Medicis Pharmaceutical Corp. "A"/(1)/ 218 12,576 Gentex Corp./(1)/ 528 12,566 Triad Hospitals Inc./(1)/ 466 12,535 Reynolds & Reynolds Co. "A" 527 12,516 General Growth Properties Inc. 340 12,451 Viad Corp. 638 12,441 Jack Henry & Associates Inc. 504 12,429 Rouse Co./(2)/ 473 12,426 OGE Energy Corp./(2)/ 573 12,411 Pride International Inc./(1)/(2)/ 960 12,346 Valassis Communications Inc./(1)/ 394 12,293
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Security Shares Value - ---------------------------------------------------------------- COMMON STOCKS (continued) - ---------------------------------------------------------------- Dow Jones & Co. Inc./(2)/ 270 $12,150 Transatlantic Holdings Inc. 145 12,144 Orion Power Holdings Inc./(1)/(2)/ 470 12,131 Protective Life Corp. 438 12,067 Smithfield Foods Inc./(1)/ 573 12,062 Boise Cascade Corp. 420 11,995 Investors Financial Services Corp. 226 11,955 Puget Energy Inc. 624 11,900 City National Corp. 290 11,890 RenaissanceRe Holdings Ltd. 123 11,867 Herman Miller Inc. 560 11,844 Ball Corp. 191 11,754 DeVry Inc./(1)/ 434 11,696 Security Capital Group "B"/(1)/ 624 11,669 Michaels Stores Inc./(1)/ 227 11,661 Dana Corp./(2)/ 1,082 11,631 Brunswick Corp. 650 11,628 Eaton Vance Corp. 413 11,605 Rowan Companies Inc./(1)/ 686 11,587 Markel Corp./(1)/ 59 11,561 Lyondell Chemical Co. 868 11,553 Pioneer Natural Resources Co./(1)/ 679 11,550 Micrel Inc./(1)/ 459 11,544 Krispy Kreme Doughnuts Inc./(1)/(2)/ 330 11,540 Molex Inc. 398 11,514 Pulte Corp. 354 11,505 Arden Realty Inc. 466 11,478 New Plan Excel Realty Trust 645 11,468 MDU Resources Group Inc. 470 11,426 Viacom Inc. "A"/(1)/ 311 11,407 ALLETE 518 11,396 Gateway Inc./(1)/ 2,012 11,368 Marvell Technology Group Ltd./(1)/ 467 11,367 Pentair Inc. 357 11,335 Snap-On Inc. 423 11,319 Helmerich & Payne Inc. 373 11,313 IndyMac Bancorp Inc./(1)/ 439 11,274 3Com Corp./(1)/ 2,715 11,240 KEMET Corp./(1)/ 628 11,229 CSG Systems International Inc./(1)/ 359 11,222 Barr Laboratories Inc./(1)/ 154 11,211 Coors (Adolf) Company "B" 225 11,194 Visteon Corp. 939 11,174 Tidewater Inc. 369 $11,151 Titan Corp. (The)/(1)/(2)/ 426 11,131 White Mountains Insurance Group Inc. 32 11,104 KPMG Consulting Inc./(1)/ 897 11,051 National-Oilwell Inc./(1)/ 596 11,038 Dial Corp. 659 10,992 Advanced Fibre Communications Inc./(1)/ 589 10,973 HCC Insurance Holdings Inc. 399 10,969 Suiza Foods Corp./(1)/ 186 10,968 D.R. Horton Inc. 490 10,951 Belo (A.H.) Corp. 640 10,944 Roslyn Bancorp Inc. 603 10,944 Alkermes Inc./(1)/ 426 10,927 Andrew Corp./(1)/ 600 10,902 OSI Pharmaceuticals Inc./(1)/(2)/ 238 10,872 DaVita Inc./(1)/ 597 10,865 Massey Energy Co. 530 10,865 Newfield Exploration Co./(1)/ 312 10,861 Dean Foods Co. 242 10,854 Edwards Lifesciences Corp./(1)/ 427 10,846 Weingarten Realty Investors 216 10,809 Renal Care Group Inc./(1)/ 344 10,802 Great Plains Energy Inc. 452 10,785 Cabot Microelectronics Corp./(1)/(2)/ 162 10,737 Catalina Marketing Corp./(1)/ 387 10,701 Energizer Holdings Inc./(1)/ 648 10,686 Jacobs Engineering Group Inc./(1)/ 163 10,683 Sky Financial Group Inc. 536 10,682 Extreme Networks Inc./(1)/ 908 10,615 Host Marriott Corp./(2)/ 1,572 10,611 MGM Grand Inc./(1)/(2)/ 475 10,592 MONY Group Inc. 351 10,590 Readers Digest Association Inc. (The) "A" 596 10,549 Constellation Brands Inc./(1)/ 256 10,506 United Dominion Realty Trust 735 10,503 Pogo Producing Co. 383 10,464 Catellus Development Corp./(1)/ 608 10,458 IDACorp Inc. 275 10,450 Enterasys Networks Inc./(1)/ 1,309 10,420 OM Group Inc. 172 10,415 Webster Financial Corp. 343 10,410 Valspar Corp. 309 10,373 CBRL Group Inc. 412 10,345 Camden Property Trust 295 10,266 WorldCom Inc.- MCI Group 866 10,262
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Security Shares Value - ------------------------------------------------------------------------------- COMMON STOCKS (continued) - ------------------------------------------------------------------------------- Lubrizol Corp. 364 10,243 ResMed Inc./(1)/(2)/ 183 10,211 Applera Corp. - Celera Genomics Group/(1)/(2)/ 434 10,199 Openwave Systems Inc./(1)/(2)/ 1,318 10,188 Labranche & Co. Inc./(1)/(2)/ 352 10,169 NetIQ Corp./(1)/ 361 10,162 Brown & Brown Inc. 177 10,160 Quantum DLT & Storage Group/(1)/ 1,205 10,158 Cullen/Frost Bankers Inc. 376 10,137 Clayton Homes Inc. 724 10,136 Riverstone Networks Inc./(1)/ 795 10,112 Old National Bancorp 407 10,069 Nordstrom Inc. 714 10,067 Sierra Pacific Resources Corp. 692 10,041 Sybase Inc./(1)/ 738 10,037 Medarex Inc./(1)/ 487 10,032 PartnerRe Ltd. 215 9,998 Cerner Corp./(1)/(2)/ 186 9,997 WebMD Corp./(1)/ 2,174 9,979 Hospitality Properties Trust 402 9,974 Cablevision Systems Corporation-Rainbow Media Group/(1)/ 467 9,970 Teleflex Inc. 249 9,960 Henry Schein Inc./(1)/ 294 9,922 Patterson-UTI Energy Inc./(1)/ 550 9,911 Trustmark Corp. 413 9,895 Colonial BancGroup Inc. 784 9,878 Scholastic Corp./(1)/ 220 9,834 Vectren Corporation 465 9,825 BRE Properties Inc. "A" 338 9,802 Hanover Compressor Co./(1)/(2)/ 352 9,708 Affymetrix Inc./(1)/ 323 9,706 Steris Corp./(1)/ 433 9,699 Doral Financial Corp. 277 9,659 Post Properties Inc. 284 9,645 Berkley (W.R.) Corp. 181 9,631 StanCorp Financial Group Inc. 216 9,590 Hubbell Inc. "B" 351 9,589 O'Reilly Automotive Inc./(1)/(2)/ 339 9,580 Peoples Energy Corp. 249 9,534 Independence Community Bank Corp. 392 9,533 Cree Inc./(1)/(2)/ 529 9,496 Novell Inc./(1)/ 2,656 9,402 USX-U.S. Steel Group Inc. 652 $ 9,382 Axcelis Technologies Inc./(1)/ 715 9,374 Washington Federal Inc. 413 9,354 Westamerica Bancorp 256 9,354 Affiliated Managers Group Inc./(1)/ 151 9,317 Varco International Inc./(1)/ 621 9,315 AmeriCredit Corp./(1)/(2)/ 599 9,284 Commercial Federal Corp. 371 9,260 Finisar Corp./(1)/(2)/ 1,182 9,243 Internet Security Systems Inc./(1)/ 348 9,205 Solutia Inc. 764 9,168 Extended Stay America Inc./(1)/ 679 9,166 First Midwest Bancorp Inc. 273 9,124 Hudson United Bancorp 351 9,122 WGL Holdings Inc. 337 9,119 Harsco Corp. 285 9,106 COR Therapeutics Inc./(1)/(2)/ 404 9,102 Techne Corp./(1)/ 302 9,102 Ethan Allen Interiors Inc. 284 9,091 Mentor Graphics Corp./(1)/ 478 9,063 Borders Group Inc./(1)/ 580 9,042 Roper Industries Inc. 213 9,031 Furniture Brands International Inc./(1)/ 374 8,980 IKON Office Solutions Inc. 925 8,963 Citizens Banking Corp. 295 8,944 Adaptec Inc./(1)/ 742 8,941 FMC Corp./(1)/ 188 8,922 Highwoods Properties Inc. 378 8,921 Vignette Corp./(1)/ 1,904 8,911 Global Crossing Ltd./(1)/(2)/ 7,864 8,886 GTECH Holdings Corp./(1)/ 221 8,818 SICOR Inc./(1)/ 469 8,794 RPM Inc. 719 8,736 Williams-Sonoma Inc./(1)/(2)/ 337 8,728 McDATA Corp. "A"/(1)/ 592 8,708 NVR Inc./(1)/ 55 8,707 Silicon Valley Bancshares/(1)/ 370 8,673 UTStarcom Inc./(1)/ 368 8,641 American Eagle Outfitters Inc./(1)/ 315 8,631 Bancorp South Inc. 564 8,629 Cheesecake Factory (The)/(1)/ 306 8,629 TyCom Ltd./(1)/(2)/ 563 8,625 Monsanto Company 275 8,607 Zebra Technologies Corp. "A"/(1)/ 186 8,569 Triton PCS Holdings Inc. "A"/(1)/ 265 8,528
- -------------------------------------------------------------------------------- iShares Schedules of Investments page 45 iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments (continued) October 31, 2001 (Unaudited)
Security Shares Value - ---------------------------------------------------------- COMMON STOCKS (continued) - ---------------------------------------------------------- Scotts Co. (The) "A"/(1)/ 211 $8,505 Donaldson Co. Inc. 269 8,487 Payless Shoesource Inc./(1)/(2)/ 160 8,456 Copart Inc./(1)/ 288 8,453 Hawaiian Electric Industries Inc. 227 8,449 Pharmaceutical Product Development Inc./(1)/ 316 8,428 Coach Inc./(1)/ 301 8,398 Brown-Forman Corp. "B" 141 8,381 National Data Corp. 238 8,378 Apria Healthcare Group Inc./(1)/ 364 8,372 Mitchell Energy & Development Corp. "A" 157 8,360 Raymond James Financial Inc. 286 8,360 Lee Enterprises Inc. 242 8,337 Advent Software Inc./(1)/(2)/ 215 8,293 York International Corp. 270 8,273 Perot Systems Corp. "A"/(1)/ 487 8,255 Rayonier Inc. 191 8,171 Mercury General Corp. 188 8,169 BorgWarner Inc. 191 8,160 Ascential Software Corp./(1)/ 2,155 8,146 Global Payments Inc. 272 8,146 Career Education Corp./(1)/ 312 8,134 Sycamore Networks Inc./(1)/ 1,838 8,106 Healthcare Realty Trust 300 8,100 NPS Pharmaceuticals Inc./(1)/ 224 8,093 IMC Global Inc. 752 8,084 Six Flags Inc./(1)/(2)/ 684 8,071 Providian Financial Corp. 2,068 8,045 Callaway Golf Co. 562 8,031 Worthington Industries Inc. 617 8,021 Commerce Group Inc. 220 8,019 Polaris Industries Partners LP "A" 178 8,003 Chesapeake Energy Corp./(1)/ 1,101 7,982 Ruby Tuesday Inc. 463 7,982 Williams Communications Group Inc./(1)/ 4,733 7,904 LifePoint Hospitals Inc./(1)/ 253 7,889 Reebok International Ltd./(1)/ 380 7,889 Foundry Networks Inc./(1)/ 807 7,876 Precision Castparts Corp. 346 7,868 Knight Trading Group Inc./(1)/ 798 7,844 Hispanic Broadcasting Corp./(1)/ 467 7,827 First Industrial Realty Trust 284 7,810 Cummins Engine Company Inc. 249 7,796 Royal Caribbean Cruises Ltd./(2)/ 707 $7,777 Pier 1 Imports Inc. 706 7,773 Lafarge Corp. 219 7,764 HRPT Properties Trust 951 7,751 Tupperware Corp. 380 7,748 Plexus Corp./(1)/(2)/ 309 7,725 CheckFree Corp./(1)/ 548 7,716 Activision Inc./(1)/ 213 7,700 Cubist Pharmaceuticals Inc./(1)/ 191 7,697 Maxtor Corp./(1)/ 1,570 7,693 AGL Resources Inc. 372 7,682 Acxiom Corp./(1)/ 651 7,675 AptarGroup Inc. 255 7,675 CNF Transportation Inc./(2)/ 346 7,643 Ticketmaster Online-CitySearch Inc. "B"/(1)/ 560 7,638 Ryder System Inc. 408 7,630 CEC Entertainment Inc./(1)/ 196 7,593 Corporate Executive Board Co. (The)/(1)/ 248 7,581 Macrovision Corp./(1)/ 308 7,580 Crane Co. 369 7,557 HON Industries Inc. 313 7,534 GlobeSpan Inc./(1)/(2)/ 629 7,523 DQE Inc. 402 7,517 Harman International Industries Inc. 227 7,502 Silicon Graphics Inc./(1)/ 4,306 7,492 Insight Communications Co. Inc./(1)/ 364 7,462 Swift Transportation Co. Inc./(1)/ 437 7,425 Kennametal Inc. 211 7,423 THQ Inc./(1)/ 149 7,420 Pittston Brink's Group 384 7,392 Zale Corp./(1)/ 258 7,384 Piedmont Natural Gas Co. 232 7,378 DoubleClick Inc./(1)/ 999 7,373 Hudson City Bancorp Inc. 313 7,368 KB HOME 249 7,358 Tetra Tech Inc./(1)/ 284 7,350 Entercom Communications Corp./(1)/ 218 7,347 Respironics Inc./(1)/ 218 7,342 Wind River Systems Inc./(1)/ 512 7,342 Electronics For Imaging Inc./(1)/ 373 7,341 Thomas & Betts Corp. 404 7,337 Allegheny Technologies Inc. 495 7,326 Grant Prideco Inc./(1)/ 804 7,308 Meredith Corp. 221 7,293 ArvinMeritor Inc. 485 7,285
- -------------------------------------------------------------------------------- page 46 i|Shares iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments (continued) October 31, 2001 (Unaudited)
Security Shares Value - -------------------------------------------------------- COMMON STOCKS (continued) - -------------------------------------------------------- Church & Dwight Co. Inc. 280 $7,280 AVX Corp. 393 7,274 CommScope Inc./(1)/ 372 7,273 Alpha Industries Inc./(1)/(2)/ 312 7,263 Mandalay Resort Group Inc./(1)/ 440 7,260 Saks Inc./(1)/ 1,065 7,242 Orthodontic Centers of America Inc./(1)/(2)/ 287 7,241 CarrAmerica Realty Corp. 255 7,219 Arch Coal Inc. 327 7,210 Community First Bankshares Inc. 300 7,206 Cytec Industries Inc./(1)/ 301 7,203 Performance Food Group Co./(1)/(2)/ 245 7,201 Conseco Inc./(1)/(2)/ 2,407 7,197 Fleming Companies Inc./(2)/ 297 7,158 Mueller Industries Inc./(1)/ 247 7,151 Shaw Group Inc./(1)/(2)/ 260 7,150 Metris Companies Inc./(2)/ 441 7,149 AK Steel Holding Corp. 784 7,134 Whitney Holding Corp. 181 7,106 First American Corp. 426 7,093 Retek Inc./(1)/ 349 7,092 Ingram Micro Inc. "A"/(1)/ 554 7,091 Varian Semiconductor Equipment Associates Inc./(1)/ 236 7,089 Myriad Genetics Inc./(1)/ 154 7,084 Advanced Digital Information Corp./(1)/ 474 7,082 Cooper Tire & Rubber Co. 536 7,081 Applebee's International Inc. 235 7,073 United Stationers Inc./(1)/ 252 7,069 Reckson Associates Realty Corp. 307 7,061 Powerwave Technologies Inc./(1)/ 461 7,053 Leucadia National Corp. 243 7,042 Greater Bay Bancorp/(2)/ 308 7,019 Dillards Inc. "A" 541 7,006 Mercury Computer Systems Inc./(1)/ 148 6,980 Centerpoint Properties Corp. 150 6,975 Western Resources Inc. 425 6,962 Amkor Technology Inc./(1)/ 558 6,947 Jack in the Box Inc./(1)/ 282 6,937 Incyte Genomics Inc./(1)/ 465 6,928 Pennzoil-Quaker State Co. 590 6,921 Continental Airlines Inc. "B"/(1)/ 395 6,909 Park National Corp. 75 6,881 Cousins Properties Inc. 283 $6,851 Wiley (John) & Sons Inc. "A" 339 6,848 Covance Inc./(1)/ 373 6,845 Overture Services Inc./(1)/(2)/ 259 6,825 Corn Products International Inc. 226 6,803 United Bancshares Inc. 250 6,800 Aviron/(1)/ 204 6,793 Allegiance Telecom Inc./(1)/ 945 6,785 Integrated Circuit Systems Inc./(1)/ 398 6,770 Trinity Industries Inc. 272 6,767 Alberto-Culver Co. "B"/(2)/ 160 6,760 Coventry Health Care Inc./(1)/ 314 6,732 Lancaster Colony Corp. 216 6,731 Amphenol Corp. "A"/(1)/ 151 6,727 Aeroflex Inc./(1)/ 458 6,719 Public Service Company of New Mexico 274 6,713 MedQuist Inc./(1)/ 276 6,707 Scios Inc./(1)/(2)/ 290 6,699 Southern Union Co./(1)/ 351 6,697 Nationwide Health Properties Inc. 338 6,659 Cox Radio Inc. "A"/(1)/ 306 6,640 Forest Oil Corp./(1)/ 242 6,631 Interwoven Inc./(1)/ 906 6,623 Cleco Corp. 329 6,616 Intimate Brands Inc. 582 6,606 Invacare Corp. 197 6,599 GATX Corporation 249 6,586 Stone Energy Corp./(1)/ 166 6,565 Key Energy Services Inc./(1)/ 754 6,560 Cambrex Corp. 177 6,549 Winn-Dixie Stores Inc. 589 6,514 Inhale Therapeutic Systems Inc./(1)/ 372 6,510 NRG Energy Inc./(1)/(2)/ 368 6,503 Harte-Hanks Inc. 279 6,501 Mid Atlantic Medical Services Inc./(1)/ 350 6,492 AMETEK Inc. 240 6,480 Flowserve Corp./(1)/ 277 6,476 Priority Healthcare Corp. "B"/(1)/ 224 6,471 Tekelec/(1)/ 337 6,470 CuraGen Corp./(1)/(2)/ 277 6,390 Prentiss Properties Trust 251 6,375 Macromedia Inc./(1)/ 425 6,358 Exar Corp./(1)/ 282 6,356 Sl Green Realty Corp. 213 6,352 Shurgard Storage Centers Inc. "A" 211 6,343
- -------------------------------------------------------------------------------- iShares Schedules of Investments page 47 iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments (continued) October 31, 2001 (Unaudited)
Security Shares Value - ----------------------------------------------------------- COMMON STOCKS (continued) - ----------------------------------------------------------- Sonic Corp./(1)/ 189 $6,333 Taro Pharmaceutical Industries Ltd./(1)/(2)/ 150 6,315 SkyWest Inc. 345 6,314 Philadelphia Suburban Corp. 221 6,299 Dole Food Co. 309 6,291 Perrigo Co./(1)/ 425 6,286 Vintage Petroleum Inc. 359 6,279 Universal Corporation 194 6,274 Federal Realty Investment Trust 287 6,262 Nationwide Financial Services Inc. 184 6,260 Louis Dreyfus Natural Gas Corp./(1)/ 158 6,257 Sonus Networks Inc./(1)/ 1,485 6,252 Carlisle Companies Inc. 209 6,245 Flowers Foods Inc./(1)/ 150 6,225 National Instruments Corp./(1)/(2)/ 216 6,223 Southwest Bancorp of Texas Inc./(1)/ 216 6,197 Developers Diversified Realty Corp. 339 6,170 Kopin Corp./(1)/ 489 6,157 American Greetings Corp. "A"/(2)/ 439 6,155 Ohio Casualty Corp. 403 6,146 Media General Inc. "A" 147 6,115 American Financial Group Inc. 276 6,108 Meridian Gold Inc./(1)/ 557 6,099 IDEXX Laboratories Inc./(1)/ 242 6,098 Macerich Co. (The) 252 6,098 Alpharma Inc. "A"/(2)/ 220 6,094 Province Healthcare Co./(1)/ 221 6,089 Crompton Corp. 838 6,075 St. Joe Company (The) 236 6,075 Big Lots Inc. 831 6,066 US Freightways Corp. 195 6,066 Owens-Illinois Inc./(1)/ 992 6,051 Hercules Inc./(1)/(2)/ 800 6,048 Tommy Hilfiger Corp./(1)/ 525 6,032 Chittenden Corp. 243 6,012 Staten Island Bancorp Inc. 206 5,962 Nextel Partners Inc. "A"/(1)/ 1,113 5,955 Fair Isaac and Co. Inc. 125 5,944 American Capital Strategies Ltd. 239 5,920 Transkaryotic Therapies Inc./(1)/ 155 5,899 Regis Corp. 276 5,868 La Quinta Properties Inc./(1)/ 1,090 5,831 Haemonetics Corp./(1)/ 153 5,829 Black Box Corp./(1)/(2)/ 129 $5,809 Sybron Dental Specialties Inc./(1)/ 283 5,801 Toll Brothers Inc./(1)/ 186 5,796 Western Digital Corp./(1)/ 1,729 5,792 Credence Systems Corp./(1)/ 423 5,753 Briggs & Stratton Corp. 153 5,747 Anchor Gaming/(1)/ 113 5,744 Micromuse Inc./(1)/(2)/ 621 5,744 Donnelley (R.H.) Corp./(1)/ 217 5,729 Great Lakes Chemical Corp. 270 5,727 Arbitron Inc./(1)/ 212 5,724 ITT Educational Services Inc./(1)/ 150 5,707 Legato Systems Inc./(1)/ 679 5,697 Sylvan Learning Systems Inc./(1)/ 254 5,690 Tularik Inc./(1)/(2)/ 247 5,681 Atlantic Coast Airlines Holdings Inc./(1)/ 302 5,672 RSA Security Inc./(1)/(2)/ 470 5,659 Health Care REIT Inc. 218 5,646 Tootsie Roll Industries Inc. 154 5,646 iStar Financial Inc. 242 5,639 Avocent Corporation/(1)/ 302 5,635 Cirrus Logic Inc./(1)/ 506 5,632 Louisiana-Pacific Corp. 779 5,609 Granite Construction Inc. 225 5,602 Coherent Inc./(1)/ 211 5,591 TD Waterhouse Group Inc./(1)/ 590 5,587 Cell Therapeutics Inc./(1)/ 186 5,586 International Speedway Corp. "A" 150 5,568 Silicon Storage Technology Inc./(1)/ 621 5,558 Informatica Corp./(1)/ 597 5,534 Varian Inc./(1)/ 218 5,524 Rambus Inc./(1)/ 679 5,520 Linens 'N Things Inc./(1)/ 302 5,496 Alexander & Baldwin Inc. 246 5,478 CACI International Inc. "A"/(1)/ 88 5,474 Total System Services Inc. 271 5,474 Direct Focus Inc./(1)/ 225 5,472 Comcast Corp./(1)/ 153 5,458 RGS Energy Group Inc. 142 5,446 SonicWALL Inc./(1)/ 383 5,439 Garmin Ltd./(1)/ 320 5,379 Downey Financial Corp. 153 5,376 Technitrol Inc. 216 5,374 ONEOK Inc. 312 5,373 Men's Wearhouse Inc. (The)/(1)/(2)/ 270 5,365
- -------------------------------------------------------------------------------- page 48 i|Shares iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments (continued) October 31, 2001 (Unaudited)
Security Shares Value - ---------------------------------------------------------- COMMON STOCKS (continued) - ---------------------------------------------------------- Infocus Corp./(1)/(2)/ 277 $5,363 AGCO Corp. 463 5,362 Talbots Inc. (The) 188 5,358 American Italian Pasta Co. "A"/(1)/ 131 5,336 Elantec Semiconductor Inc./(1)/ 163 5,328 Cabot Oil & Gas Corp. "A" 220 5,302 Tom Brown Inc./(1)/ 227 5,300 Werner Enterprises Inc. 244 5,283 Cognex Corp./(1)/ 278 5,276 Seacor Smit Inc./(1)/ 133 5,272 Horace Mann Educators Corp. 278 5,268 Keane Inc./(1)/ 372 5,268 Terayon Communications Systems Inc./(1)/ 464 5,266 Waste Connections Inc./(1)/ 179 5,230 LTX Corp./(1)/(2)/ 317 5,218 eFunds Corp./(1)/(2)/ 336 5,208 Fuller (H. B.) Co. 101 5,194 Potlatch Corp. 207 5,185 Plantronics Inc./(1)/ 249 5,174 Virata Corp./(1)/ 431 5,163 Petsmart Inc./(1)/ 660 5,155 RealNetworks Inc./(1)/ 907 5,143 Beverly Enterprises Inc./(1)/ 685 5,131 Alaska Air Group Inc./(1)/ 209 5,100 SanDisk Corp./(1)/ 464 5,076 El Paso Electric Co./(1)/ 373 5,073 Ameritrade Holding Corp. "A"/(1)/(2)/ 920 5,060 Superior Industries International Inc. 153 5,055 Jeffries Group Inc. 152 5,042 South Financial Group Inc. (The) 316 5,040 Kansas City Southern Industries Inc./(1)/ 403 5,037 Republic Bancorp Inc. 341 5,030 Western Gas Resources Inc. 156 5,026 Read-Rite Corp./(1)/ 1,008 5,020 United Rentals Inc./(1)/ 275 5,019 Kulicke & Soffa Industries Inc./(1)/(2)/ 330 5,006 Bob Evans Farms Inc. 266 5,003 Delta & Pine Land Co. 277 5,000 Concurrent Computer Corp./(1)/ 425 4,989 Olin Corp. 332 4,973 National Service Industries Inc. 280 4,967 FreeMarkets Inc./(1)/(2)/ 371 4,960 Footstar Inc./(1)/ 148 4,943 AirGate PCS Inc./(1)/ 96 $4,940 Black Hills Corp. 179 4,915 Wallace Computer Services Inc. 316 4,898 Manitowoc Co. Inc. 178 4,895 Kilroy Realty Corp. 209 4,893 Trimeris Inc./(1)/ 123 4,883 Timberland Co. "A"/(1)/ 150 4,872 Photronics Inc./(1)/ 196 4,865 Reinsurance Group of America Inc. 154 4,862 Power Integrations Inc./(1)/ 211 4,855 CV Therapeutics Inc./(1)/ 123 4,851 Blyth Inc. 249 4,848 Stericycle Inc./(1)/ 101 4,848 Borland Software Corp./(1)/ 432 4,834 CNET Networks Inc./(1)/ 972 4,802 Energen Corp. 196 4,802 ADVO Inc./(1)/ 133 4,797 Orbotech Ltd./(1)/ 222 4,786 Ferro Corp. 217 4,774 UAL Corp. 375 4,770 Northwest Airlines Corp. "A"/(1)/ 370 4,751 Veeco Instruments Inc./(1)/ 186 4,736 Banta Corp. 163 4,735 MAF Bancorp Inc. 169 4,732 Montana Power Co./(1)/ 794 4,732 Provident Financial Group Inc. 221 4,732 M.D.C. Holdings Inc. 177 4,721 Covanta Energy Corporation/(1)/ 362 4,713 Time Warner Telecom Inc. "A"/(1)/ 430 4,713 VISX Inc./(1)/ 401 4,712 Regeneron Pharmaceuticals Inc./(1)/(2)/ 213 4,707 Immunomedics Inc./(1)/ 257 4,703 Timken Co. 349 4,701 Power-One Inc./(1)/ 594 4,699 Duane Reade Inc./(1)/ 156 4,668 AnnTaylor Stores Corp./(1)/ 212 4,664 McDermott International Inc./(1)/ 440 4,664 United States Cellular Corp./(1)/ 104 4,644 CNA Financial Corp./(1)/ 184 4,633 Electro Scientific Industries Inc./(1)/ 196 4,620 Pediatrix Medical Group Inc./(1)/ 159 4,617 Northwest Natural Gas Co. 193 4,613 AmerUs Group Co. 152 4,601 FelCor Lodging Trust Inc./(2)/ 331 4,598 Liberate Technologies Inc./(1)/ 465 4,594
- -------------------------------------------------------------------------------- iShares Schedules of Investments page 49 iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments (continued) October 31, 2001 (Unaudited)
Security Shares Value - -------------------------------------------------------- COMMON STOCKS (continued) - -------------------------------------------------------- Ligand Pharmaceuticals Inc. "B"/(1)/ 340 $4,580 Metro-Goldwyn-Mayer Inc./(1)/ 285 4,577 NTL Inc./(1)/ 1,345 4,573 Chelsea Property Group Inc. 102 4,570 Wolverine World Wide Inc. 310 4,566 Storage USA Inc. 113 4,537 Insight Enterprises Inc./(1)/ 279 4,534 MSC Industrial Direct Co. Inc. "A"/(1)/ 276 4,526 Cymer Inc./(1)/ 216 4,514 Cell Genesys Inc./(1)/ 251 4,493 LNR Property Corp. 163 4,491 Dreyer's Grand Ice Cream Inc. 137 4,480 Red Hat Inc./(1)/ 948 4,475 CBL & Associates Properties Inc. 153 4,455 PSS World Medical Inc./(1)/ 491 4,434 Impath Inc./(1)/ 120 4,424 Stillwater Mining Co./(1)/ 283 4,412 Georgia Gulf Corp. 247 4,389 Hollinger International Inc. 424 4,380 Pixar Inc./(1)/(2)/ 118 4,354 Cable Design Technologies Corp./(1)/ 340 4,345 Interstate Bakeries Corp. 184 4,337 Quanta Services Inc./(1)/(2)/ 285 4,332 Pep Boys-Manny Moe & Jack Inc. 368 4,324 webMethods Inc./(1)/(2)/ 470 4,319 Owens & Minor Inc. 245 4,314 Loral Space & Communications Ltd./(1)/ 3,340 4,309 EMCOR Group Inc./(1)/ 110 4,303 Landstar System Inc./(1)/ 60 4,300 Casey's General Store Inc. 345 4,295 Getty Images Inc./(1)/ 274 4,272 Mentor Corp. 153 4,272 C&D Technologies Inc. 206 4,268 Albany Molecular Research Inc./(1)/ 154 4,266 Brandywine Realty Trust 216 4,264 TIBCO Software Inc./(1)/ 502 4,237 Syncor International Corp./(1)/ 146 4,234 ATMI Inc./(1)/ 222 4,231 Avista Corp. 350 4,196 Ralcorp Holdings Inc./(1)/ 215 4,193 Kos Pharmaceuticals Inc./(1)/ 149 4,179 Ryan's Family Steak Houses Inc./(1)/ 232 4,176 Nordson Corp. 186 4,172 Documentum Inc./(1)/ 282 $4,165 E.piphany Inc./(1)/(2)/ 706 4,165 Hain Celestial Group Inc./(1)/ 211 4,161 W.P. Stewart & Co. Ltd. 196 4,141 Home Properties of NY Inc. 135 4,132 Sotheby's Holdings Inc. "A"/(1)/ 309 4,128 Iomega Corp./(1)/ 590 4,124 Longs Drug Stores Corp. 181 4,121 AMCORE Financial Inc. 188 4,119 Millennium Chemicals Inc. 432 4,117 Kaydon Corp. 217 4,101 FileNET Corp./(1)/ 281 4,094 Hughes Supply Inc. 173 4,086 People's Bank 187 4,073 Grey Wolf Inc./(1)/ 1,403 4,055 Modis Professional Services Inc./(1)/ 771 4,040 Evergreen Resources Inc./(1)/ 101 4,034 Primedia Inc./(1)/ 1,888 4,021 HNC Software Inc./(1)/ 232 4,014 Monaco Coach Corp./(1)/ 223 3,992 S1 Corp./(1)/ 383 3,983 Stewart Enterprises Inc. "A"/(1)/ 656 3,975 Dionex Corp./(1)/ 165 3,960 Overseas Shipholding Group Inc. 159 3,958 American Management Systems Inc./(1)/ 300 3,954 Homestore.com Inc./(1)/(2)/ 763 3,922 Provident Bankshares Corp. 178 3,920 Brooks Automation Inc./(1)/(2)/ 121 3,906 Oak Technology Inc./(1)/ 391 3,906 Edwards (J.D.) & Co./(1)/ 547 3,878 Avant! Corp./(1)/ 382 3,862 Newport Corp. 246 3,835 Valuevision International Inc. "A"/(1)/ 279 3,806 Colonial Properties Trust 127 3,791 Manugistics Group Inc./(1)/ 492 3,788 UniSource Energy Corp. 240 3,782 Xoma Ltd./(1)/ 505 3,772 Manufactured Home Communities Inc. 123 3,758 Modine Manufacturing Co. 181 3,756 Dycom Industries Inc./(1)/ 312 3,728 Charming Shoppes Inc./(1)/ 781 3,725 Airborne Inc. 371 3,706 Texas Industries Inc. 123 3,702 InfoSpace Inc./(1)/ 2,336 3,691 Priceline.com Inc./(1)/ 766 3,684
- -------------------------------------------------------------------------------- page 50 i|Shares iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments (continued) October 31, 2001 (Unaudited)
Security Shares Value - ----------------------------------------------------------- COMMON STOCKS (continued) - ----------------------------------------------------------- Sunrise Assisted Living Inc./(1)/(2)/ 123 $3,676 McDATA Corp. "B"/(1)/ 233 3,651 Leap Wireless International Inc./(1)/ 245 3,643 Noven Pharmaceuticals Inc./(1)/ 169 3,623 Agile Software Corp./(1)/ 378 3,599 Arris Group Inc./(1)/ 611 3,599 ADTRAN Inc./(1)/ 155 3,596 East West Bancorp Inc. 158 3,569 Mills Corp. 163 3,560 Freeport-McMoRan Copper & Gold Inc./(1)/(2)/ 320 3,552 Terex Corp./(1)/ 219 3,550 Insituform Technologies Inc. "A"/(1)/ 185 3,545 Aztar Corp./(1)/ 246 3,530 Bally Total Fitness Holding Corp./(1)/(2)/ 191 3,526 Sapient Corp./(1)/ 818 3,526 Sterling Bancshares Inc. 294 3,502 Selective Insurance Group Inc. 163 3,501 Arthocare Corp./(1)/(2)/ 177 3,496 Harmonic Inc./(1)/ 433 3,494 Silicon Laboratories Inc./(1)/(2)/ 143 3,489 UCBH Holdings Inc. 120 3,480 Pacific Sunwear of California Inc./(1)/ 253 3,479 Sangstat Medical Corp./(1)/ 153 3,464 US Oncology Inc./(1)/ 658 3,455 Akamai Technologies Inc./(1)/ 1,092 3,451 Texas Regional Bancshares "A" 103 3,451 Emmis Communications Corp./(1)/ 254 3,442 Intergraph Corp./(1)/ 321 3,435 NBTY Inc./(1)/ 402 3,429 Echelon Corp./(1)/(2)/ 252 3,427 CTS Corp. 212 3,424 Actel Corp./(1)/ 184 3,413 PRI Automation Inc./(1)/ 207 3,403 Trimble Navigation Ltd./(1)/ 193 3,397 G&K Services Inc. "A" 123 3,396 Veritas DGC Inc./(1)/ 221 3,395 Koger Equity Inc. 203 3,388 Pegasus Communications Corp./(1)/ 342 3,386 Datascope Corp. 101 3,382 Viasystems Group Inc./(1)/ 2,614 3,372 Yellow Corporation/(1)/ 153 3,366 MRV Communications Inc./(1)/ 775 3,363 Littelfuse Inc./(1)/ 149 3,358 Interactive Data Corp. 250 $3,355 Rent-A-Center Inc./(1)/ 123 3,352 Capital Automotive REIT 173 3,348 Quest Software Inc./(1)/ 226 3,345 International Multifoods Corp. 153 3,331 Hyperion Solutions Corp./(1)/ 222 3,330 Take-Two Interactive Software Inc./(1)/(2)/ 237 3,301 Vitria Technology Inc./(1)/ 1,082 3,289 Global Industries Ltd./(1)/ 465 3,288 Tesoro Petroleum Corp./(1)/ 247 3,265 Zoran Corp./(1)/ 129 3,262 ANADIGICS Inc./(1)/ 219 3,254 Aspen Technology Inc./(1)/ 245 3,246 Enzo Biochem Inc./(1)/(2)/ 158 3,242 Helix Technology Corp. 166 3,217 DSP Group Inc./(1)/ 153 3,213 Tredegar Corporation 181 3,213 Safeguard Scientifics Inc./(1)/ 1,449 3,188 Superior Energy Services Inc./(1)/ 403 3,184 PepsiAmericas Inc. 244 3,182 Wellman Inc. 252 3,178 Stratos Lightwave Inc./(1)/ 768 3,149 PacifiCare Health Systems Inc. "A"/(1)/ 190 3,146 IHOP Corp./(1)/ 123 3,144 Unifi Inc./(1)/ 414 3,126 EGL Inc./(1)/ 258 3,119 Maxygen Inc./(1)/ 216 3,119 Lone Star Technologies Inc./(1)/ 186 3,058 Harbor Florida Bancshares Inc. 182 3,048 Claire's Stores Inc. 252 3,047 Lands' End Inc./(1)/ 95 3,044 Albany International Corp. "A"/(1)/ 156 3,042 Wausau-Mosinee Paper Corp. 293 3,033 Prime Hospitality Corp./(1)/ 330 3,029 DMC Stratex Networks Inc./(1)/ 554 3,019 InterDigital Communications Corp./(1)/ 375 3,007 Meristar Hospitality Corp. 315 2,992 Kellwood Co. 153 2,982 Viropharma Inc./(1)/ 119 2,979 FuelCell Energy Inc./(1)/(2)/ 190 2,970 Core Laboratories NV/(1)/ 182 2,967 Emisphere Technologies Inc./(1)/ 122 2,934 StorageNetworks Inc./(1)/ 582 2,916 Milacron Inc. 245 2,906 Spherion Corporation/(1)/ 403 2,902
- -------------------------------------------------------------------------------- iShares Schedules of investments page 51 iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments (continued) October 31, 2001 (Unaudited)
Security Shares Value - ----------------------------------------------------------- COMMON STOCKS (continued) - ----------------------------------------------------------- Regal-Beloit Corp. 163 $2,901 Input/Output Inc./(1)/ 360 2,898 Arkansas Best Corp./(1)/ 123 2,893 Newpark Resources Inc./(1)/ 471 2,878 IDT Corp. "B"/(1)/ 289 2,876 JDA Software Group Inc./(1)/ 183 2,873 Micros Systems Inc./(1)/ 133 2,871 Parexel International Corp./(1)/ 192 2,867 Capstone Turbine Corp./(1)/ 562 2,849 Stewart & Stevenson Services Inc. 191 2,823 Schulman (A.) Inc. 237 2,820 Champion Enterprises Inc./(1)/ 320 2,819 Computer Network Technology Corp./(1)/ 193 2,818 Bio-Technology General Corp./(1)/ 393 2,810 WMS Industries Inc./(1)/ 156 2,800 Park Electrochemical Corp. 125 2,794 Bowne & Co. Inc. 267 2,790 Papa John's International Inc./(1)/ 100 2,786 Hutchinson Technology Inc./(1)/ 153 2,782 Pharmacopeia Inc./(1)/ 176 2,781 InterVoice-Brite Inc./(1)/ 223 2,779 Systems & Computer Technology Corp./(1)/ 226 2,769 Pharmacyclics Inc./(1)/(2)/ 127 2,760 DuPont Photomasks Inc./(1)/ 76 2,739 IGEN International Inc./(1)/ 93 2,735 Presidential Life Corp. 156 2,716 Glenborough Realty Trust Inc. 156 2,713 Mutual Risk Management Ltd./(2)/ 296 2,708 DDi Corp./(1)/ 299 2,700 REMEC Inc./(1)/ 300 2,685 Spectrasite Holdings Inc./(1)/ 1,167 2,684 SERENA Software Inc./(1)/ 166 2,683 Carpenter Technology Corp. 123 2,675 Maverick Tube Corp./(1)/ 221 2,674 Anaren Microwave Inc./(1)/ 174 2,660 First Sentinel Bancorp Inc. 220 2,651 Dendrite International Inc./(1)/ 266 2,639 Chesapeake Corp. 93 2,634 Infonet Services Corp. "B" ADR/(1)/ 1,249 2,623 U.S. Airways Group Inc./(1)/ 568 2,618 ESS Technology Inc./(1)/ 204 2,617 Transwitch Corp./(1)/ 790 2,615 Genesco Inc./(1)/ 143 2,610 Transaction Systems Architects Inc. "A"/(1)/ 268 $2,605 Digital River Inc./(1)/(2)/ 196 2,597 Oceaneering International Inc./(1)/ 133 2,594 Cost Plus Inc./(1)/ 133 2,587 Checkpoint Systems Inc./(1)/ 247 2,584 PanAmSat Corp./(1)/ 122 2,584 JDN Realty Corp. 242 2,570 UCAR International Inc./(1)/ 350 2,545 Netegrity Inc./(1)/(2)/ 216 2,536 Roadway Express Inc. 93 2,534 General Cable Corp. 224 2,531 Stellent Inc./(1)/(2)/ 123 2,522 Winnebago Industries Inc. 103 2,506 NCO Group Inc./(1)/(2)/ 153 2,502 Triarc Companies Inc./(1)/ 108 2,495 Great Atlantic & Pacific Tea Co./(1)/ 134 2,490 Pre-Paid Legal Services Inc./(1)/ 163 2,486 SBA Communications Corp./(1)/ 302 2,476 Fleetwood Enterprises Inc./(2)/ 247 2,475 Ciber Inc./(1)/ 369 2,472 Multex.com Inc./(1)/ 353 2,467 Aether Systems Inc./(1)/(2)/ 353 2,460 Praecis Pharmaceuticals Inc./(1)/ 568 2,459 Offshore Logistics Inc./(1)/ 123 2,454 Ocwen Financial Corp./(1)/ 285 2,451 Fremont General Corp. 489 2,450 PFF Bancorp Inc. 98 2,450 Asyst Technologies Inc./(1)/ 268 2,439 Parker Drilling Co./(1)/ 748 2,431 Ionics Inc./(1)/ 103 2,420 Elcor Corp. 103 2,415 Anchor BanCorp Wisconsin Inc. 153 2,410 Station Casinos Inc./(1)/(2)/ 293 2,406 Tollgrade Communications Inc./(1)/ 94 2,396 Kaman Corp. "A" 177 2,395 Fossil Inc./(1)/(2)/ 131 2,376 Inter-Tel Inc. 156 2,368 Verity Inc./(1)/ 222 2,358 Quiksilver Inc./(1)/ 179 2,357 Key3Media Group Inc./(1)/ 490 2,313 Vicor Corp./(1)/ 150 2,312 Profit Recovery Group International Inc. (The)/(1)/ 334 2,305 FirstFed Financial Corp./(1)/ 103 2,291 Hunt (J.B.) Transport Services Inc./(1)/ 166 2,281
- -------------------------------------------------------------------------------- page 52 i|Shares iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments (continued) October 31, 2001 (Unaudited)
Security Shares Value - --------------------------------------------------------- COMMON STOCKS (continued) - --------------------------------------------------------- Lone Star Steakhouse & Saloon Inc. 176 $2,281 Dime Community Bancshares 94 2,280 Integrated Silicon Solution Inc./(1)/ 218 2,265 Nautica Enterprises Inc./(1)/ 186 2,254 Cyberonics Inc./(1)/ 143 2,248 Oplink Communications Inc./(1)/ 1,659 2,240 Atwood Oceanics Inc./(1)/ 73 2,227 Southwest Securities Group Inc./(2)/ 127 2,223 Russell Corp. 180 2,218 Ryerson Tull Inc. 192 2,208 Bay View Capital Corp./(1)/ 311 2,186 Gene Logic Inc./(1)/ 163 2,184 Supergen Inc./(1)/ 213 2,179 Casella Waste Systems Inc. "A"/(1)/ 186 2,174 Photon Dynamics Inc./(1)/ 82 2,173 Equity Inns Inc. 273 2,168 Theragenics Corp./(1)/ 243 2,163 Entrust Technologies Inc./(1)/ 479 2,155 ProBusiness Services Inc./(1)/ 123 2,150 Cohu Inc. 123 2,146 NABI Inc./(1)/ 275 2,145 Sinclair Broadcast Group "A"/(1)/ 290 2,140 Benchmark Electronics Inc./(1)/ 125 2,131 SCM Microsystems Inc./(1)/ 263 2,130 MacDermid Inc. 156 2,125 Esterline Technologies Corp./(1)/ 157 2,123 Netro Corp./(1)/ 549 2,114 Dress Barn Inc./(1)/ 93 2,106 Handspring Inc./(1)/ 1,070 2,097 WD-40 Company 93 2,094 Cato Corp. "A" 123 2,085 Stride Rite Corp. 337 2,083 Seitel Inc./(1)/ 153 2,081 Tower Automotive Inc./(1)/(2)/ 340 2,081 Pioneer-Standard Electronics Inc. 233 2,071 Children's Place Retail Stores Inc./(1)/ 87 2,067 M-Systems Flash Disk Pioneers Ltd./(1)/ 286 2,059 Molecular Devices Corp./(1)/ 127 2,056 Crown Cork & Seal Co. Inc. 1,127 2,051 Artesyn Technologies Inc./(1)/ 284 2,048 Trans World Entertainment Corp./(1)/ 245 2,043 Guitar Center Inc./(1)/ 148 2,041 Emcore Corp./(1)/ 182 2,031 GBC Bancorp 73 $2,031 Airtran Holdings Inc./(1)/ 535 2,022 UAXS Global Holdings Inc./(1)/ 936 2,003 Learning Tree International Inc./(1)/ 95 1,999 Steelcase Inc. 153 1,997 Three-Five Systems Inc./(1)/ 128 1,985 Trico Marine Services Inc./(1)/ 303 1,945 Jakks Pacific Inc./(1)/ 103 1,942 Oakley Inc./(1)/ 180 1,922 Trenwick Group Ltd. 247 1,917 RFS Hotel Investors Inc. 207 1,915 Geron Corp./(1)/(2)/ 163 1,894 USG Corp. 349 1,881 Pacific Northwest Bancorp 93 1,879 IDT Corp./(1)/ 170 1,878 SpeechWorks International Inc./(1)/ 250 1,875 Forrester Research Inc./(1)/ 115 1,857 F5 Networks Inc./(1)/(2)/ 123 1,856 Caliper Technologies Corp./(1)/ 153 1,847 Robert Mondavi Corp. (The) "A"/(1)/ 60 1,843 Actuate Corp./(1)/ 441 1,830 Alliance Semiconductor Corp./(1)/ 221 1,823 Covansys Corporation/(1)/ 235 1,809 RCN Corp./(1)/ 572 1,802 Lexicon Genetics Inc./(1)/ 183 1,801 OfficeMax Inc./(1)/ 625 1,781 UnitedGlobalCom Inc. "A"/(1)/(2)/ 1,347 1,751 Atlas Air Inc./(1)/ 135 1,743 Aspect Communications Corp./(1)/ 776 1,738 Brightpoint Inc./(1)/ 472 1,737 U.S. Industries Inc. 847 1,736 BE Aerospace Inc./(1)/ 213 1,730 Visible Genetics Inc./(1)/ 119 1,727 Actuant Corp. "A"/(1)/ 65 1,725 EntreMed Inc./(1)/(2)/ 147 1,713 Hearst-Argyle Television Inc./(1)/ 92 1,711 Chemed Corp. 60 1,701 Matrixone Inc./(1)/ 309 1,699 Net.B@nk Inc./(1)/ 206 1,695 Caraustar Industries Inc. 217 1,693 Polymedica Industries Corp./(1)/(2)/ 101 1,667 Meridian Resource Corp. (The)/(1)/ 391 1,666 Presstek Inc./(1)/ 256 1,664 Guilford Pharmaceuticals Inc./(1)/ 153 1,662 Ultratech Stepper Inc./(1)/ 123 1,654
- -------------------------------------------------------------------------------- iShares Schedules of Investments page 53 iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments (continued) October 31, 2001 (Unaudited)
Security Shares Value - ----------------------------------------------------------- COMMON STOCKS (continued) - ----------------------------------------------------------- Phillips-Van Heusen Corporation 192 $1,640 Shopko Stores Inc./(1)/ 189 1,635 MRO Software Inc./(1)/ 123 1,624 Roxio Inc./(1)/ 126 1,617 AXT Inc./(1)/ 147 1,605 Alexion Pharmaceuticals Inc./(1)/ 93 1,601 OpenTV Corp./(1)/ 217 1,597 Centillium Communications Inc./(1)/ 281 1,585 Young Broadcasting Corp. "A"/(1)/ 103 1,577 C-COR.net Corp./(1)/ 226 1,548 Electroglas Inc./(1)/ 123 1,541 OceanFirst Financial Corp. 63 1,539 Stein Mart Inc./(1)/ 193 1,538 PLX Technology Inc./(1)/ 198 1,535 Teletech Holdings Inc./(1)/ 188 1,519 Biosite Diagnostics Inc./(1)/ 97 1,514 NUI Corp. 73 1,486 Interface Inc. "A" 370 1,484 WatchGuard Technologies Inc./(1)/ 163 1,475 Imatron Inc./(1)/ 801 1,450 Sirius Satellite Radio Inc./(1)/ 580 1,444 Proxim Inc./(1)/ 212 1,435 Zygo Corp./(1)/ 101 1,429 IDX Systems Corp./(1)/ 143 1,409 Wabash National Corp. 187 1,374 Viewpoint Corp./(1)/ 343 1,372 Rural Cellular Corp. "A"/(1)/ 60 1,363 United Therapeutics Inc./(1)/(2)/ 144 1,361 Keynote Systems Inc./(1)/ 178 1,356 Methode Electronics Inc. "A" 186 1,348 American Superconductor Corp./(1)/ 126 1,343 Kadant Inc./(1)/ 103 1,339 BSB Bancorp Inc. 60 1,337 Mastec Inc./(1)/ 290 1,334 Cytogen Corp./(1)/ 640 1,331 Stamps.com Inc./(1)/ 437 1,324 Genome Therapeutics Corp./(1)/ 187 1,313 Transmeta Corp./(1)/ 737 1,304 SONICblue Inc./(1)/ 1,223 1,296 Metasolv Inc./(1)/ 185 1,295 RadiSys Corp./(1)/ 93 1,281 Zomax Inc./(1)/ 253 1,280 DiamondCluster International Inc. "A"/(1)/ 123 1,267 Maxim Pharmaceuticals Inc./(1)/ 256 $1,267 Navigant Consulting Co./(1)/ 351 1,267 FSI International Inc./(1)/ 153 1,258 Advanced Tissue Sciences Inc./(1)/ 277 1,244 RTI International Metals Inc./(1)/ 123 1,212 Sanchez Computer Associates Inc./(1)/ 133 1,197 Astec Industries Inc./(1)/ 93 1,190 Novoste Corp./(1)/ 101 1,167 AAR Corp. 153 1,163 Allen Telecom Inc./(1)/ 153 1,147 Ditech Communications Corp./(1)/ 274 1,140 Cell Pathways Inc./(1)/ 278 1,123 Clarent Corp./(1)/ 206 1,106 Avid Technology Inc./(1)/ 123 1,105 ON Semiconductor Corp./(1)/ 741 1,067 AnswerThink Consulting Group Inc./(1)/ 282 1,063 Pinnacle Entertainment Inc./(1)/ 153 1,056 Symmetricom Inc./(1)/ 188 1,053 Vans Inc./(1)/ 73 1,048 Digex Inc./(1)/ 623 1,047 Valence Technology Inc./(1)/ 286 1,044 Aware Inc./(1)/ 223 1,030 Cleveland-Cliffs Inc. 63 1,027 Columbia Laboratories Inc./(1)/ 222 1,021 Cygnus Inc./(1)/ 197 985 Auspex Systems Inc./(1)/ 543 977 CPI Corp. 60 960 Audiovox Corp. "A"/(1)/ 123 941 Silicon Image Inc./(1)/ 735 933 Standard Microsystems Corp./(1)/ 93 930 Wild Oats Markets Inc./(1)/ 128 896 Siliconix Inc./(1)/ 35 883 Organogenesis Inc./(1)/ 226 877 Packeteer Inc./(1)/ 256 870 Northfield Laboratories Inc./(1)/(2)/ 63 866 HI/FN Inc./(1)/ 60 862 Computer Horizons Corp./(1)/ 329 855 Wave Systems Corp. "A"/(1)/ 374 853 Plug Power Inc./(1)/(2)/ 101 838 Pope & Talbot Inc. 63 819 SilverStream Software Inc./(1)/ 193 791 Wolverine Tube Inc./(1)/ 63 791 CompuCredit Corp./(1)/(2)/ 128 787 Kenneth Cole Productions "A"/(1)/ 67 784 PC-Tel Inc./(1)/ 95 724
- -------------------------------------------------------------------------------- page 54 i|Shares iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments (continued) October 31, 2001 (Unaudited)
Security Shares Value - ------------------------------------------------------------------ COMMON STOCKS (continued) - ------------------------------------------------------------------ ITC DeltaCom Inc./(1)/ 1,108 $ 720 Digital Lightwave Inc./(1)/ 97 585 I-Stat Corp./(1)/ 93 581 Hyseq Inc./(1)/ 63 576 SLI Inc. 220 550 Network Plus Corp./(1)/ 546 546 Clarus Corp./(1)/ 164 543 ZixIt Corp./(1)/ 63 527 Medallion Financial Corp. 63 513 Concord Camera Corp./(1)/ 123 488 Allscripts Healthcare Solutions Inc./(1)/ 127 410 Catalytica Energy Systems Inc./(1)/ 57 359 Genzyme Transgenics Corp./(1)/ 96 337 NextCard Inc./(1)/ 318 277 Uniroyal Technology Corp./(1)/ 86 262 - ------------------------------------------------------------------ TOTAL COMMON STOCKS (Cost: $93,236,528) 75,820,437 - ------------------------------------------------------------------ SHORT TERM INSTRUMENTS - 3.92% - ------------------------------------------------------------------ Barclays Global Investors Funds, Inc. Institutional Money Market Fund, Institutional Shares/(3)/ 1,268,729 1,268,729 Dreyfus Money Market Fund/(3)/ 624,866 624,866 Goldman Sachs Financial Square Prime Obligation Fund/(3)/ 429,981 429,981 Providian Temp Cash Money Market Fund/(3)/ 652,034 652,034 - ------------------------------------------------------------------ TOTAL SHORT TERM INSTRUMENTS (Cost: $2,975,610) 2,975,610 - ------------------------------------------------------------------ TOTAL INVESTMENTS IN SECURITIES -- 103.80% (Cost $96,212,138) 78,796,047 - ------------------------------------------------------------------ Other Assets, Less Liabilities -- (3.80%) (2,882,744) - ------------------------------------------------------------------ NET ASSETS -- 100.00% $75,913,303 ==================================================================
/(1)/ Non-income earning securities. /(2)/ Denotes all or part of security on loan. See Note 5. /(3)/ Security or portion of security represents investment of collateral received from securities lending transactions. See Note 5. See notes to financial statements. - -------------------------------------------------------------------------------- iShares Schedules of Investments page 55 iShares Dow Jones U.S. Basic Materials Sector Index Fund Schedule of Investments October 31, 2001 (Unaudited)
Security Shares Value - ------------------------------------------------------------- COMMON STOCKS - 99.91% - ------------------------------------------------------------- Du Pont (E.I.) de Nemours 37,238 $1,489,148 Dow Chemical Co. 33,577 1,116,435 Alcoa Inc. 32,395 1,045,387 International Paper Co. 17,999 644,364 Weyerhaeuser Co. 8,024 400,478 Air Products & Chemicals Inc. 8,707 348,628 Praxair Inc. 6,106 288,081 Georgia-Pacific Corp. 8,542 237,126 Rohm & Haas Co. "A" 6,425 208,620 Avery Dennison Corp. 4,193 194,136 Willamette Industries Inc. 3,840 179,904 Newmont Mining Corp. 7,427 172,306 Ecolab Inc. 4,174 146,841 Engelhard Corp. 4,971 130,141 Nucor Corp. 2,952 121,918 Mead Corp. 3,769 101,160 Eastman Chemical Co. 2,927 100,425 Sigma-Aldrich Corp. 2,673 100,291 Westvaco Corp. 3,831 94,051 Bowater Inc. 2,092 93,554 International Flavors & Fragrances Inc. 3,115 88,809 Phelps Dodge Corp. 2,995 86,855 Cabot Corp. 2,386 79,931 Homestake Mining Company 8,765 71,873 Boise Cascade Corp. 2,185 62,404 Cabot Microelectronics Corp./(1)/ 900 59,652 Lyondell Chemical Co. 4,468 59,469 Lubrizol Corp. 1,941 54,620 OM Group Inc. 899 54,434 USX-U.S. Steel Group Inc. 3,385 48,710 Solutia Inc. 3,931 47,172 RPM Inc. 3,879 47,130 Rayonier Inc. 1,032 44,149 IMC Global Inc. 3,952 42,484 Worthington Industries Inc. 3,247 42,211 Allegheny Technologies Inc. 2,545 37,666 AK Steel Holding Corp. 4,098 37,292 Cytec Industries Inc./(1)/ 1,530 36,613 Cambrex Corp. 924 34,188 Meridian Gold Inc./(1)/ 2,842 31,120 Hercules Inc./(1)/ 4,116 31,117 Crompton Corp. 4,286 $ 31,073 Great Lakes Chemical Corp. 1,452 30,797 Louisiana-Pacific Corp. 3,969 28,577 Fuller (H. B.) Co. 537 27,618 Potlatch Corp. 1,076 26,954 Olin Corp. 1,666 24,957 Ferro Corp. 1,079 23,738 Millennium Chemicals Inc. 2,418 23,043 Stillwater Mining Co./(1)/ 1,468 22,886 Georgia Gulf Corp. 1,204 21,395 Freeport-McMoRan Copper & Gold Inc./(1)/ 1,919 21,301 Carpenter Technology Corp. 745 16,204 Tredegar Corporation 909 16,135 Wellman Inc. 1,205 15,195 Wausau-Mosinee Paper Corp. 1,466 15,173 Schulman (A.) Inc. 1,109 13,197 WD-40 Company 586 13,197 MacDermid Inc. 914 12,449 Ryerson Tull Inc. 935 10,752 Caraustar Industries Inc. 1,070 8,346 RTI International Metals Inc./(1)/ 750 7,387 Pope & Talbot Inc. 553 7,189 Cleveland-Cliffs Inc. 388 6,324 - ------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $10,051,500) 8,734,780 - ------------------------------------------------------------- SHORT TERM INSTRUMENTS - 0.06% - ------------------------------------------------------------- Barclays Global Investors Funds, Inc. Institutional Money Market Fund, Institutional Shares 5,337 5,337 - ------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $5,337) 5,337 - ------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 99.97% (Cost $10,056,837) 8,740,117 - ------------------------------------------------------------- Other Assets, Less Liabilities -- 0.03% 2,515 - ------------------------------------------------------------- NET ASSETS -- 100.00% $8,742,632 =============================================================
/(1)/ Non-income earning securities. See notes to financial statements. - -------------------------------------------------------------------------------- page 56 i|Shares iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund Schedule of Investments October 31, 2001 (Unaudited)
Security Shares Value - ------------------------------------------------------------------------------- COMMON STOCKS - 100.01% - ------------------------------------------------------------------------------- Wal-Mart Stores Inc. 63,743 $3,276,390 AOL Time Warner Inc./(1)/ 98,418 3,071,626 Home Depot Inc. 53,637 2,050,543 Viacom Inc. "B"/(1)/ 35,569 1,298,624 Walt Disney Co. (The) 48,065 893,528 McDonald's Corp. 29,875 778,841 Walgreen Co. 23,479 760,250 Comcast Corp. "A"/(1)/ 20,983 752,031 Cardinal Health Inc. 10,244 687,475 Ford Motor Company 40,643 652,320 Target Corp. 20,699 644,774 Liberty Media Corp. "A"/(1)/ 54,771 640,273 Lowe's Companies Inc. 16,037 546,862 Clear Channel Communications Inc./(1)/ 12,371 471,583 General Motors Corp. "A" 10,169 420,183 Costco Wholesale Corp./(1)/ 10,357 391,805 Gannett Co. Inc. 6,094 385,141 Omnicom Group Inc. 4,281 328,695 Kohls Corp./(1)/ 5,819 323,595 Harley-Davidson Inc. 7,004 317,001 Sears, Roebuck and Co. 7,593 294,381 Southwest Airlines Co. 16,076 255,608 McGraw-Hill Companies Inc. 4,506 236,925 McKesson HBOC Inc. 6,136 226,971 TJX Companies Inc. 6,456 218,213 May Department Stores Co. 6,874 216,187 CVS Corp. 9,030 215,817 Best Buy Co. Inc./(1)/ 3,908 214,549 Nike Inc. "B" 3,947 194,824 Interpublic Group of Companies Inc. 8,648 194,148 Gap Inc. (The) 14,322 187,189 Mattel Inc./(1)/ 9,875 186,934 Carnival Corp. "A" 8,257 179,837 Eastman Kodak Co. 6,702 171,370 Cox Communications Inc. "A"/(1)/ 4,460 170,818 Tricon Global Restaurants Inc./(1)/ 3,376 170,792 Bed Bath & Beyond Inc./(1)/ 6,664 167,000 Marriott International Inc. "A" 4,961 155,428 Staples Inc./(1)/ 10,480 152,798 Electronic Arts Inc./(1)/(2)/ 2,959 152,270 Tribune Co. 5,013 151,393 AutoZone Inc./(1)/ 2,582 151,124 Delphi Automotive Systems Corp. 12,945 150,291 Starbucks Corp./(1)/ 8,770 $ 150,142 AmerisourceBergen Corp./(1)/ 2,357 149,811 Federated Department Stores Inc./(1)/ 4,562 145,938 Johnson Controls Inc. 1,987 143,700 Penney (J.C.) Company Inc. 6,040 131,189 Genuine Parts Co. 3,973 129,123 New York Times Co. "A" 3,051 125,854 EchoStar Communications Corp./(1)/(2)/ 4,771 110,639 Family Dollar Stores Inc. 3,729 107,619 RadioShack Corp. 4,290 107,207 Starwood Hotels & Resorts Worldwide Inc. 4,587 101,097 Leggett & Platt Inc. 4,527 98,100 Charter Communications Inc./(1)/(2)/ 6,815 96,364 Knight Ridder Inc./(2)/ 1,691 95,119 Office Depot Inc./(1)/ 6,893 93,745 Whirlpool Corp. 1,537 90,714 Limited Inc. 8,111 90,438 International Game Technology Inc./(1)/ 1,729 88,265 Dollar General Corp. 6,123 87,498 Darden Restaurants Inc. 2,725 87,255 Toys R Us Inc./(1)/ 4,558 86,602 BJ's Wholesale Club Inc./(1)/ 1,672 84,887 Scripps (E.W.) Company 1,374 84,735 TRW Inc. 2,374 80,217 Univision Communications Inc./(1)/(2)/ 3,185 79,625 Harrah's Entertainment Inc./(1)/ 2,694 78,476 Tiffany & Co. 3,353 78,427 Hilton Hotels Corp. 8,536 73,068 Caremark Rx Inc./(1)/ 5,351 71,703 AutoNation Inc./(1)/ 6,885 70,847 USA Networks Inc./(1)/ 3,786 69,814 Kmart Corp./(1)/(2)/ 11,333 69,471 VF Corp. 2,058 68,367 Goodyear Tire & Rubber Co. 3,664 68,260 Cablevision Systems Corp./(1)/(2)/ 1,909 65,383 Delta Air Lines Inc. 2,842 64,968 Jones Apparel Group Inc./(1)/ 2,348 64,805 AMR Corp./(1)/ 3,547 64,555 Fox Entertainment Group Inc. "A"/(1)/ 2,881 63,411 Rite Aid Corp./(1)/(2)/ 11,412 62,994 Hasbro Inc./(2)/ 3,772 62,502 Circuit City Stores Inc. 4,520 62,014 Wendy's International Inc. 2,261 59,464 Brinker International Inc./(1)/ 2,303 58,496 Ross Stores Inc. 1,859 58,187
- -------------------------------------------------------------------------------- iShares Schedules of Investments page 57 iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund Schedule of Investments (continued) October 31, 2001 (Unaudited)
Security Shares Value - ---------------------------------------------------------------- COMMON STOCKS (continued) - ---------------------------------------------------------------- Dollar Tree Stores Inc./(1)/ 2,589 $58,175 TMP Worldwide Inc./(1)/(2)/ 1,928 57,551 CDW Computer Centers Inc./(1)/ 1,199 55,214 Liz Claiborne Inc. 1,211 55,101 Centex Corp. 1,401 53,602 Adelphia Communications Corp. "A"/(1)/(2)/ 2,185 48,354 Venator Group Inc./(1)/ 3,186 46,197 Lamar Advertising Co./(1)/ 1,457 45,750 Maytag Corp. 1,635 45,584 Outback Steakhouse Inc./(1)/ 1,577 45,496 Lennar Corp./(2)/ 1,247 45,216 Lear Corp./(1)/ 1,470 45,129 Fastenal Co./(1)/(2)/ 762 44,996 Barnes & Noble Inc./(1)/ 1,186 43,585 Westwood One Inc./(1)/ 1,820 43,298 Abercrombie & Fitch Co. "A"/(1)/ 2,283 42,966 Park Place Entertainment Corp./(1)/ 5,979 42,810 Mohawk Industries Inc./(1)/ 976 42,163 99 Cents Only Stores/(1)/ 1,185 42,127 Washington Post Company (The) "B" 82 41,861 Gentex Corp./(1)/ 1,712 40,746 Valassis Communications Inc./(1)/ 1,236 38,563 Dow Jones & Co. Inc. 855 38,475 Amazon.com Inc./(1)/(2)/ 5,499 38,383 Michaels Stores Inc./(1)/ 736 37,808 Herman Miller Inc. 1,754 37,097 Viacom Inc. "A"/(1)/ 1,011 37,083 Dana Corp./(2)/ 3,415 36,711 Brunswick Corp. 2,023 36,191 Pulte Corp. 1,113 36,173 Visteon Corp. 3,025 35,998 Belo (A.H.) Corp. 2,093 35,790 MGM Grand Inc./(1)/(2)/ 1,568 34,966 D.R. Horton Inc. 1,534 34,285 Readers Digest Association Inc. (The) "A" 1,936 34,267 Nordstrom Inc. 2,322 32,740 Cablevision Systems Corporation-Rainbow Media Group/(1)/ 1,530 32,666 CBRL Group Inc. 1,296 32,543 Clayton Homes Inc. 2,297 32,158 O'Reilly Automotive Inc./(1)/(2)/ 1,113 31,453 Scholastic Corp./(1)/ 698 31,201 American Eagle Outfitters Inc./(1)/ 1,109 30,387 Cheesecake Factory (The)/(1)/ 1,027 $28,961 Extended Stay America Inc./(1)/ 2,141 28,904 Borders Group Inc./(1)/ 1,845 28,764 Coach Inc./(1)/ 1,004 28,012 Furniture Brands International Inc./(1)/ 1,160 27,852 Activision Inc./(1)/ 767 27,727 Ethan Allen Interiors Inc. 866 27,721 GTECH Holdings Corp./(1)/ 691 27,571 Payless Shoesource Inc./(1)/ 515 27,218 Callaway Golf Co. 1,902 27,180 Williams-Sonoma Inc./(1)/(2)/ 1,042 26,988 Lee Enterprises Inc. 768 26,458 NVR Inc./(1)/ 165 26,120 Hispanic Broadcasting Corp./(1)/ 1,546 25,911 BorgWarner Inc. 606 25,888 Reebok International Ltd./(1)/ 1,235 25,639 Ruby Tuesday Inc. 1,481 25,532 THQ Inc./(1)/ 504 25,099 Six Flags Inc./(1)/(2)/ 2,122 25,040 CEC Entertainment Inc./(1)/ 645 24,987 Royal Caribbean Cruises Ltd./(2)/ 2,254 24,794 Pier 1 Imports Inc. 2,238 24,640 Entercom Communications Corp./(1)/ 730 24,601 Harman International Industries Inc. 739 24,424 Polaris Industries Partners LP "A" 541 24,323 KB HOME 814 24,054 Applebee's International Inc. 791 23,809 HON Industries Inc. 983 23,661 Insight Communications Co. Inc./(1)/ 1,154 23,657 Mandalay Resort Group Inc./(1)/ 1,433 23,645 Zale Corp./(1)/ 801 22,925 Wiley (John) & Sons Inc. "A" 1,131 22,846 ArvinMeritor Inc. 1,513 22,725 Meredith Corp. 687 22,671 Saks Inc./(1)/ 3,293 22,392 Cooper Tire & Rubber Co. 1,674 22,114 Continental Airlines Inc. "B"/(1)/(2)/ 1,262 22,072 Jack in the Box Inc./(1)/ 892 21,943 Priority Healthcare Corp. "B"/(1)/ 752 21,725 DoubleClick Inc./(1)/(2)/ 2,927 21,601 Dillards Inc. "A" 1,660 21,497 Pennzoil-Quaker State Co. 1,816 21,302 Tommy Hilfiger Corp./(1)/ 1,844 21,188 SkyWest Inc. 1,140 20,862 Intimate Brands Inc. 1,824 20,702
- -------------------------------------------------------------------------------- page 58 i|Shares iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund Schedule of Investments (continued) October 31, 2001 (Unaudited)
Security Shares Value - ------------------------------------------------------------ COMMON STOCKS (continued) - ------------------------------------------------------------ Sonic Corp./(1)/ 609 $20,408 Cox Radio Inc. "A"/(1)/ 939 20,376 Harte-Hanks Inc. 861 20,061 Media General Inc. "A" 463 19,261 American Greetings Corp. "A"/(2)/ 1,361 19,081 Big Lots Inc. 2,603 19,002 Donnelley (R.H.) Corp./(1)/ 710 18,744 Direct Focus Inc./(1)/(2)/ 768 18,678 Comcast Corp./(1)/ 506 18,049 Toll Brothers Inc./(1)/ 574 17,886 Petsmart Inc./(1)/ 2,271 17,737 Anchor Gaming/(1)/ 342 17,384 Linens 'N Things Inc./(1)/ 935 17,017 Men's Wearhouse Inc. (The)/(1)/ 856 17,009 ADVO Inc./(1)/ 468 16,881 Atlantic Coast Airlines Holdings Inc./(1)/ 895 16,808 International Speedway Corp. "A" 450 16,704 Talbots Inc. (The) 582 16,587 Timberland Co. "A"/(1)/ 502 16,305 Metro-Goldwyn-Mayer Inc./(1)/ 985 15,819 Duane Reade Inc./(1)/(2)/ 528 15,798 UAL Corp. 1,226 15,595 Bob Evans Farms Inc. 815 15,330 Footstar Inc./(1)/ 457 15,264 Northwest Airlines Corp. "A"/(1)/ 1,183 15,190 Superior Industries International Inc. 454 15,000 Pixar Inc./(1)/(2)/ 405 14,945 Alaska Air Group Inc./(1)/ 611 14,908 M.D.C. Holdings Inc. 558 14,882 Insight Enterprises Inc./(1)/ 908 14,755 AnnTaylor Stores Corp./(1)/ 664 14,608 Wolverine World Wide Inc. 960 14,141 Hollinger International Inc. 1,285 13,274 Modine Manufacturing Co. 639 13,259 Pep Boys-Manny Moe & Jack Inc. 1,116 13,113 Longs Drug Stores Corp. 571 13,002 Ryan's Family Steak Houses Inc./(1)/ 704 12,672 Aztar Corp./(1)/ 869 12,470 Bally Total Fitness Holding Corp./(1)/(2)/ 666 12,294 Valuevision International Inc. "A"/(1)/ 893 12,181 Rent-A-Center Inc./(1)/ 444 12,099 Emmis Communications Corp./(1)/ 840 11,382 Claire's Stores Inc. 936 11,316 Charming Shoppes Inc./(1)/ 2,361 $11,262 IHOP Corp./(1)/ 438 11,195 NTL Inc./(1)/ 3,275 11,135 Primedia Inc./(1)/ 4,964 10,573 Papa John's International Inc./(1)/ 372 10,364 Pacific Sunwear of California Inc./(1)/ 750 10,313 Kellwood Co. 523 10,193 Take-Two Interactive Software Inc./(1)/(2)/ 726 10,113 WMS Industries Inc./(1)/ 544 9,765 Cost Plus Inc./(1)/ 495 9,628 Station Casinos Inc./(1)/ 1,153 9,466 Unifi Inc./(1)/ 1,244 9,392 Champion Enterprises Inc./(1)/ 1,049 9,242 Genesco Inc./(1)/ 506 9,235 Lands' End Inc./(1)/ 287 9,195 Prime Hospitality Corp./(1)/ 971 8,914 Nautica Enterprises Inc./(1)/ 687 8,326 Children's Place Retail Stores Inc./(1)/ 340 8,078 Jakks Pacific Inc./(1)/ 417 7,860 Pegasus Communications Corp./(1)/ 770 7,623 Fleetwood Enterprises Inc. 756 7,575 Dress Barn Inc./(1)/ 334 7,562 U.S. Airways Group Inc./(1)/(2)/ 1,572 7,247 Lone Star Steakhouse & Saloon Inc. 555 7,193 Winnebago Industries Inc. 290 7,056 Guitar Center Inc./(1)/ 509 7,019 Fossil Inc./(1)/ 385 6,984 Quiksilver Inc./(1)/ 524 6,901 Hearst-Argyle Television Inc./(1)/ 359 6,677 Oakley Inc./(1)/ 612 6,536 Russell Corp. 523 6,443 Sinclair Broadcast Group "A"/(1)/ 866 6,391 Steelcase Inc. 484 6,316 Tower Automotive Inc./(1)/ 1,018 6,230 Young Broadcasting Corp. "A"/(1)/ 400 6,124 Cato Corp. "A" 360 6,102 Airtran Holdings Inc./(1)/ 1,598 6,040 Stride Rite Corp. 962 5,945 Vans Inc./(1)/ 411 5,902 OfficeMax Inc./(1)/ 2,027 5,777 Shopko Stores Inc./(1)/ 662 5,726 Trans World Entertainment Corp./(1)/(2)/ 677 5,646 Stein Mart Inc./(1)/ 595 4,742 Avid Technology Inc./(1)/ 528 4,741 Phillips-Van Heusen Corporation 518 4,424
- -------------------------------------------------------------------------------- iShares Schedules of Investments page 59 iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund Schedule of Investments (continued) October 31, 2001 (Unaudited)
Security Shares Value - ---------------------------------------------------------------- COMMON STOCKS (continued) - ---------------------------------------------------------------- Interface Inc. "A" 1,016 $ 4,074 Pinnacle Entertainment Inc./(1)/ 472 3,257 Kenneth Cole Productions "A"/(1)/ 229 2,679 Concord Camera Corp./(1)/ 628 2,493 Sirius Satellite Radio Inc./(1)/ 1,000 2,490 UnitedGlobalCom Inc. "A"/(1)/ 1,482 1,926 - ---------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $38,216,570) 30,959,471 - ---------------------------------------------------------------- SHORT TERM INSTRUMENTS - 3.45% - ---------------------------------------------------------------- Barclays Global Investors Funds, Inc. Institutional Money Market Fund, Institutional Shares/(3)/ 449,074 449,074 Dreyfus Money Market Fund/(3)/ 226,752 226,752 Goldman Sachs Financial Square Prime Obligation Fund/(3)/ 156,033 156,033 Providian Temp Cash Money Market Fund/(3)/ 236,611 236,611 - ---------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $1,068,470) 1,068,470 - ---------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 103.46% (Cost $39,285,040) 32,027,941 - ---------------------------------------------------------------- Other Assets, Less Liabilities -- (3.46%) (1,070,544) - ---------------------------------------------------------------- NET ASSETS -- 100.00% $30,957,397 ================================================================
/(1)/ Non-income earning securities. /(2)/ Denotes all or part of security on loan. See Note 5. /(3)/ Security or portion of security represents investment of collateral received from securities lending transactions. See Note 5. See notes to financial statements. - -------------------------------------------------------------------------------- page 60 i|Shares iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund Schedule of Investments October 31, 2001 (Unaudited)
Security Shares Value - ---------------------------------------------------------- COMMON STOCKS - 99.91% - ---------------------------------------------------------- Coca-Cola Co. 78,385 $3,753,074 Philip Morris Companies Inc. 75,611 3,538,595 Procter & Gamble Co. 44,687 3,297,007 PepsiCo Inc. 60,580 2,950,852 Anheuser-Busch Companies Inc. 31,046 1,293,376 Colgate-Palmolive Co. 19,227 1,105,937 Gillette Co. 32,822 1,020,436 Kimberly-Clark Corp. 18,243 1,012,669 Safeway Inc./(1)/ 17,176 715,380 Kroger Co./(1)/ 28,052 686,152 Sara Lee Corp. 26,801 597,394 Sysco Corp. 23,162 558,436 Heinz (H.J.) Co. 11,921 505,927 General Mills Inc. 9,735 447,031 ConAgra Foods Inc. 18,401 421,383 Albertson's Inc. 13,033 415,883 Cendant Corp./(1)/ 31,587 409,368 Avon Products Inc. 8,157 381,992 Ralston Purina Group 10,613 348,000 Archer-Daniels-Midland Co. 22,808 317,708 eBay Inc./(1)/ 5,549 291,212 Newell Rubbermaid Inc. 9,141 252,657 Wrigley (William Jr.) Co. 4,930 246,747 Campbell Soup Co. 8,678 245,067 Kellogg Co. 8,022 244,671 Block (H & R) Inc. 6,259 213,307 Clorox Co. 5,926 211,558 Hershey Foods Corp. 3,237 206,294 Fortune Brands Inc. 5,266 194,052 R.J. Reynolds Tobacco Holdings Inc. 3,352 187,846 UST Inc. 5,589 187,846 Coca-Cola Enterprises Inc. 8,051 147,736 Pepsi Bottling Group Inc. 3,048 141,671 Yahoo! Inc./(1)/ 12,169 132,399 Estee Lauder Companies Inc. "A" 3,749 120,905 Stanley Works (The) 2,923 112,009 Servicemaster Co. 10,277 111,505 Apollo Group Inc. "A"/(1)/ 2,546 103,495 SUPERVALU Inc. 4,528 96,628 Black & Decker Corp. 2,787 92,222 McCormick & Co. Inc. 2,075 90,802 Tyson Foods Inc. "A" 7,880 77,145 Whole Foods Market Inc./(1)/ 1,823 63,349 Service Corp. International/(1)/ 9,929 63,248 Hormel Foods Corp. 2,553 $ 61,272 EarthLink Inc./(1)/ 4,176 61,178 Smithfield Foods Inc./(1)/ 2,719 57,235 DeVry Inc./(1)/ 2,072 55,840 Suiza Foods Corp./(1)/ 938 55,314 Krispy Kreme Doughnuts Inc./(2)/ 1,551 54,238 Dial Corp. 3,239 54,027 Coors (Adolf) Company "B" 1,050 52,238 Energizer Holdings Inc./(1)/ 3,128 51,581 Dean Foods Co. 1,147 51,443 Constellation Brands Inc./(1)/ 1,233 50,602 Scotts Co. (The) "A"/(1)/ 983 39,625 Performance Food Group Co./(1)/ 1,339 39,353 Career Education Corp./(1)/ 1,499 39,079 Brown-Forman Corp. "B" 654 38,874 Ticketmaster Online-CitySearch Inc. "B"/(1)/ 2,768 37,756 Fleming Companies Inc. 1,509 36,367 Tupperware Corp. 1,767 36,029 Overture Services Inc./(1)/ 1,347 35,493 Church & Dwight Co. Inc. 1,334 34,684 Corn Products International Inc. 1,147 34,525 Lancaster Colony Corp. 1,081 33,684 Alberto-Culver Co. "B" 773 32,659 ITT Educational Services Inc./(1)/ 816 31,049 Winn-Dixie Stores Inc. 2,779 30,736 Universal Corporation 936 30,270 Dole Food Co. 1,470 29,929 Flowers Foods Inc./(1)/ 684 28,386 Regis Corp. 1,275 27,107 Sylvan Learning Systems Inc./(1)/ 1,201 26,902 Tootsie Roll Industries Inc. 728 26,688 United Rentals Inc./(1)/ 1,387 25,313 American Italian Pasta Co. "A"/(1)/ 600 24,438 Blyth Inc. 1,190 23,169 Interstate Bakeries Corp. 970 22,863 Dreyer's Grand Ice Cream Inc. 698 22,825 Sotheby's Holdings Inc. "A"/(1)/ 1,515 20,240 Stewart Enterprises Inc. "A"/(1)/ 3,303 20,016 Ralcorp Holdings Inc./(1)/ 1,025 19,988 Casey's General Store Inc. 1,567 19,509 Hain Celestial Group Inc./(1)/ 941 18,557 FreeMarkets Inc./(1)/ 1,238 16,552 NBTY Inc./(1)/ 1,806 15,405 International Multifoods Corp. 644 14,020 PepsiAmericas Inc. 1,051 13,705 Priceline.com Inc./(1)/ 2,750 13,228
- -------------------------------------------------------------------------------- iShares Schedules of Investments page 61 iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund Schedule of Investments (continued) October 31, 2001 (Unaudited)
Security Shares Value - --------------------------------------------------------------- COMMON STOCKS (continued) - --------------------------------------------------------------- InfoSpace Inc./(1)/ 8,075 $ 12,759 Pre-Paid Legal Services Inc./(1)/ 732 11,163 Great Atlantic & Pacific Tea Co./(1)/ 573 10,646 Triarc Companies Inc./(1)/ 459 10,603 Robert Mondavi Corp. (The) "A"/(1)/ 307 9,428 Learning Tree International Inc./(1)/ 425 8,942 Wild Oats Markets Inc./(1)/ 756 5,292 Stamps.com Inc./(1)/ 1,574 4,769 CPI Corp. 265 4,240 Valence Technology Inc./(1)/ 996 3,635 - --------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $30,137,667) 29,256,439 - --------------------------------------------------------------- SHORT TERM INSTRUMENTS - 0.03% - --------------------------------------------------------------- Barclays Global Investors Funds, Inc. Institutional Money Market Fund, Institutional Shares/(3)/ 5,999 5,999 Dreyfus Money Market Fund/(3)/ 1,167 1,167 Goldman Sachs Financial Square Prime Obligation Fund/(3)/ 803 803 Providian Temp Cash Money Market Fund/(3)/ 1,218 1,218 - --------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $9,187) 9,187 - --------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 99.94% (Cost $30,146,854) 29,265,626 - --------------------------------------------------------------- Other Assets, Less Liabilities -- 0.06% 16,837 - --------------------------------------------------------------- NET ASSETS -- 100.00% $29,282,463 ===============================================================
/(1)/ Non-income earning securities. /(2)/ Denotes all or part of security on loan. See Note 5. /(3)/ Security or portion of security represents investment of collateral received from securities lending transactions. See Note 5. See notes to financial statements. - -------------------------------------------------------------------------------- page 62 i|Shares iShares Dow Jones U.S. Energy Sector Index Fund Schedule of Investments October 31, 2001 (Unaudited)
Security Shares Value - ------------------------------------------------------------------ COMMON STOCKS - 99.98% - ------------------------------------------------------------------ Exxon Mobil Corp. 387,933 $15,303,957 ChevronTexaco Corp. 140,979 12,483,690 Schlumberger Ltd. 65,081 3,151,222 Phillips Petroleum Co. 49,130 2,673,163 Conoco Inc./(1)/ 101,217 2,601,277 El Paso Corp./(2)/ 51,258 2,514,717 Williams Companies Inc. 61,413 1,772,993 Occidental Petroleum Corp. 67,590 1,711,379 Anadarko Petroleum Corp./(2)/ 29,723 1,695,697 Baker Hughes Inc. 46,005 1,648,359 Halliburton Co. 54,817 1,353,432 Unocal Corp. 40,731 1,311,538 Burlington Resources Inc. 29,742 1,107,890 Transocean Sedco Forex Inc. 32,767 987,925 USX-Marathon Group Inc. 35,094 968,243 Kerr-McGee Corp. 16,426 946,138 Murphy Oil Corp./(2)/ 10,946 870,207 Apache Corp. 16,707 862,081 Kinder Morgan Inc. 14,033 696,458 Devon Energy Corp./(2)/ 17,805 681,932 Amerada Hess Corp. 11,324 665,285 EOG Resources Inc./(2)/ 16,082 568,820 Nabors Industries Inc./(1)/ 16,458 505,919 BJ Services Co./(1)/ 16,085 411,615 Noble Drilling Corp./(1)/ 12,841 392,293 Ashland Inc. 9,190 369,989 Ocean Energy Inc. 18,885 344,651 Weatherford International Inc./(1)/ 9,325 319,195 Noble Affiliates Inc. 7,928 293,098 Diamond Offshore Drilling Inc./(2)/ 9,306 256,846 Smith International Inc./(1)/ 4,498 212,755 Global Marine Inc./(1)/ 12,844 206,788 Massey Energy Co. 9,860 202,130 Newfield Exploration Co./(1)/ 5,777 201,097 Pioneer Natural Resources Co./(1)/ 11,790 200,548 ENSCO International Inc. 10,089 199,762 Helmerich & Payne Inc. 6,532 198,116 Louis Dreyfus Natural Gas Corp./(1)/ 4,870 192,852 Santa Fe International Corp. 7,178 174,713 Cooper Cameron Corp./(1)/ 4,320 168,480 Hanover Compressor Co./(1)/(2)/ 5,830 160,791 XTO Energy Inc./(2)/ 8,409 151,362 Tidewater Inc. 4,088 $ 123,539 National-Oilwell Inc./(1)/ 6,076 112,528 Tom Brown Inc./(1)/ 4,722 110,259 Stone Energy Corp./(1)/ 2,637 104,293 Cabot Oil & Gas Corp. "A" 4,190 100,979 Evergreen Resources Inc./(1)/ 2,323 92,781 Vintage Petroleum Inc. 4,553 79,632 Grant Prideco Inc./(1)/ 8,550 77,720 Varco International Inc./(1)/ 4,485 67,275 Forest Oil Corp./(1)/ 2,171 59,485 Lone Star Technologies Inc./(1)/ 2,638 43,369 Chesapeake Energy Corp./(1)/ 5,694 41,282 Veritas DGC Inc./(1)/ 2,397 36,818 Seacor Smit Inc./(1)/ 802 31,791 Rowan Companies Inc./(1)/ 683 11,536 Patterson-UTI Energy Inc./(1)/ 328 5,911 Pennzoil-Quaker State Co. 25 293 - ------------------------------------------------------------------ TOTAL COMMON STOCKS (Cost: $72,744,418) 62,838,894 - ------------------------------------------------------------------ SHORT TERM INSTRUMENTS - 5.33% - ------------------------------------------------------------------ Barclays Global Investors Funds, Inc. Institutional Money Market Fund, Institutional Shares/(3)/ 1,426,134 1,426,134 Dreyfus Money Market Fund/(3)/ 704,465 704,465 Goldman Sachs Financial Square Prime Obligation Fund/(3)/ 484,755 484,755 Providian Temp Cash Money Market Fund/(3)/ 735,094 735,094 - ------------------------------------------------------------------ TOTAL SHORT TERM INSTRUMENTS (Cost: $3,350,448) 3,350,448 - ------------------------------------------------------------------ TOTAL INVESTMENTS IN SECURITIES -- 105.31% (Cost $76,094,866) 66,189,342 - ------------------------------------------------------------------ Other Assets, Less Liabilities -- (5.31%) (3,337,643) - ------------------------------------------------------------------ NET ASSETS -- 100.00% $62,851,699 ==================================================================
/(1)/ Non-income earning securities. /(2)/ Denotes all or part of security on loan. See Note 5. /(3)/ Security or portion of security represents investment of collateral received from securities lending transactions. See Note 5. See notes to financial statements. - -------------------------------------------------------------------------------- iShares Schedules of Investments page 63 iShares Dow Jones U.S. Financial Sector Index Fund Schedule of Investments October 31, 2001 (Unaudited)
Security Shares Value - ------------------------------------------------------------------- COMMON STOCKS - 99.94% - ------------------------------------------------------------------- Citigroup Inc. 187,819 $8,549,521 American International Group Inc. 94,856 7,455,682 Bank of America Corp. 58,464 3,448,791 Fannie Mae 37,087 3,002,564 JP Morgan Chase & Co. 72,250 2,554,760 Wells Fargo & Company 62,215 2,457,493 Morgan Stanley Dean Witter & Co. 37,058 1,812,877 Freddie Mac 25,353 1,719,440 Wachovia Corp. 50,939 1,456,855 Bank One Corp. 42,065 1,396,137 FleetBoston Financial Corp. 39,383 1,294,125 U.S. Bancorp 71,261 1,267,021 American Express Co. 42,905 1,262,694 Merrill Lynch & Co. Inc. 28,778 1,257,886 Fifth Third Bancorp 17,684 997,731 Marsh & McLennan Companies Inc. 10,026 970,016 Washington Mutual Inc. 31,957 964,782 Bank of New York Co. Inc. 26,945 916,399 Household International Inc. 16,888 883,242 Allstate Corp. 24,943 782,711 MBNA Corp. 27,403 756,597 MetLife Inc. 26,646 716,777 Goldman Sachs Group Inc. (The) 7,879 615,823 Mellon Financial Corp. 17,374 583,766 PNC Financial Services Group 10,529 578,042 SunTrust Banks Inc. 9,157 548,138 Lehman Brothers Holdings Inc. 8,760 547,150 State Street Corp. 11,878 540,924 BB&T Corp. 15,445 495,784 National City Corp. 18,771 495,554 Schwab (Charles) Corp. 38,330 493,690 USA Education Inc./(2)/ 5,836 475,984 AFLAC Inc. 19,311 472,347 Hartford Financial Services Group Inc. 8,617 465,318 Chubb Corp. 6,356 434,115 Equity Office Properties Trust 14,950 426,075 XL Capital Ltd. "A" 4,551 395,300 Northern Trust Corp. 7,584 382,916 Hancock (John) Financial Services Inc. 11,225 382,548 St. Paul Companies Inc. 7,597 348,702 KeyCorp 15,482 329,147 Progressive Corporation 2,342 324,859 AON Corp. 8,384 318,927 Capital One Financial Corp. 7,576 $ 312,965 ACE Ltd./(2)/ 8,461 298,250 Comerica Inc. 6,441 296,866 Lincoln National Corp. 6,828 289,166 SouthTrust Corp. 12,426 281,573 Loews Corp. 5,220 265,176 Equity Residential Properties Trust 9,739 252,727 MBIA Inc. 5,365 247,112 Golden West Financial Corp. 4,918 239,015 AmSouth Bancorp 13,490 233,242 Jefferson-Pilot Corp. 5,621 232,428 Regions Financial Corp. 8,296 223,245 M&T Bank Corp. 3,337 218,574 Cincinnati Financial Corp. 5,875 218,550 Charter One Financial Inc. 7,986 217,619 Marshall & Ilsley Corp. 3,625 212,570 Union Planters Corp. 4,984 201,852 Bear Stearns Companies Inc. 3,679 198,666 Synovus Financial Corp. 8,123 186,991 Ambac Financial Group Inc. 3,828 183,744 MGIC Investment Corp. 3,550 183,677 Plum Creek Timber Co. Inc. 6,499 179,567 UNUMProvident Corp. 7,900 177,197 Franklin Resources Inc. 5,421 174,014 Countrywide Credit Industries Inc. 4,305 171,899 National Commerce Financial Corp. 7,487 170,329 Torchmark Corp. 4,561 168,894 North Fork Bancorp 5,908 164,833 First Tennessee National Corp. 4,667 161,245 Stilwell Financial Inc. 7,998 160,840 Zions Bancorp 3,350 160,532 Archstone-Smith Trust 6,044 146,265 Dime Bancorp Inc. 4,266 144,532 SAFECO Corp. 4,640 143,098 Huntington Bancshares Inc. 9,150 141,185 Simon Property Group Inc. 5,122 140,855 Prologis Trust 6,350 126,556 Popular Inc. 4,233 124,323 T Rowe Price Group Inc. 4,464 123,921 Banknorth Group Inc. 5,590 122,589 Compass Bancshares Inc. 4,655 116,515 Edwards (A.G.) Inc. 2,904 114,824 Radian Group Inc. 3,369 114,108 TCF Financial Corp. 2,702 113,484 Apartment Investment & Management Co. "A" 2,667 111,934
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Security Shares Value - ----------------------------------------------------------- COMMON STOCKS (continued) - ----------------------------------------------------------- Gallagher (Arthur J.) & Co. 3,059 $111,776 Everest Re Group Ltd. 1,667 111,439 Bisys Group Inc./(1)/(2)/ 2,112 109,866 Boston Properties Inc. 3,089 109,196 Golden State Bancorp Inc. 4,182 106,056 AvalonBay Communities Inc. 2,328 105,691 Kimco Realty Corp. 2,130 104,136 Vornado Realty Trust 2,621 102,743 Old Republic International Corp. 4,022 102,038 Duke-Weeks Realty Corp. 4,392 101,236 Greenpoint Financial Corp. 3,119 99,964 Legg Mason Inc. 2,317 97,569 Mercantile Bankshares Corp. 2,536 96,926 Public Storage Inc. 2,820 92,750 Astoria Financial Corp. 1,779 92,668 Federated Investors Inc. "B" 3,539 92,368 Sovereign Bancorp Inc. 8,998 89,080 PMI Group Inc. (The) 1,606 89,053 SEI Investment Co. 2,880 88,560 Hibernia Corp. "A" 5,805 88,236 Commerce Bancorp Inc. 1,171 85,483 Valley National Bancorp 2,838 84,828 New York Community Bancorp 3,258 81,678 Erie Indemnity Co. "A" 2,085 80,898 First Virginia Banks Inc. 1,755 79,291 American National Insurance Co. 963 78,956 Associated Bancorp 2,242 77,170 Allmerica Financial Corp./(1)/ 1,932 75,348 Allied Capital Corp. 3,323 74,834 Health Care Property Investors Inc./(2)/ 2,010 74,812 AMB Property Corp. 3,059 74,364 Waddell & Reed Financial Inc. "A" 2,897 73,845 Investment Technology Group Inc./(1)/ 1,146 73,814 Neuberger Berman Inc. 2,086 72,760 FirstMerit Corp. 3,111 71,802 Commerce Bancshares Inc. 1,975 71,633 Liberty Property Trust 2,649 70,993 Unitrin Inc. 1,784 68,862 Fidelity National Financial Inc. 2,938 67,603 Pacific Century Financial Corp. 2,900 67,570 BancWest Corporation 1,932 67,523 Wilmington Trust Corp. 1,175 66,740 Fulton Financial Corp. 3,002 65,804 Rouse Co./(2)/ 2,499 $ 65,649 Crescent Real Estate Equities Co. 3,716 65,439 UnionBanCal Corporation 1,930 64,443 Mack-Cali Realty Corp. 2,070 64,170 E*trade Group Inc./(1)/(2)/ 9,814 64,085 General Growth Properties Inc./(2)/ 1,748 64,012 Transatlantic Holdings Inc. 758 63,483 Protective Life Corp. 2,298 63,310 City National Corp. 1,489 61,049 Investors Financial Services Corp. 1,154 61,047 RenaissanceRe Holdings Ltd. 618 59,625 Eaton Vance Corp. 2,115 59,431 White Mountains Insurance Group Inc. 171 59,337 Security Capital Group "B"/(1)/ 3,097 57,914 Markel Corp./(1)/ 292 57,217 Arden Realty Inc. 2,314 56,994 IndyMac Bancorp Inc./(1)/ 2,219 56,984 Host Marriott Corp./(2)/ 8,433 56,923 New Plan Excel Realty Trust 3,187 56,665 Roslyn Bancorp Inc. 3,116 56,555 HCC Insurance Holdings Inc. 2,004 55,090 Weingarten Realty Investors 1,091 54,594 Sky Financial Group Inc. 2,715 54,110 Webster Financial Corp. 1,778 53,962 MONY Group Inc. 1,778 53,642 United Dominion Realty Trust 3,683 52,630 Hospitality Properties Trust 2,112 52,399 Doral Financial Corp. 1,498 52,235 PartnerRe Ltd. 1,121 52,127 Brown & Brown Inc. 908 52,119 Labranche & Co. Inc./(1)/(2)/ 1,791 51,742 Catellus Development Corp./(1)/ 3,002 51,634 Camden Property Trust 1,476 51,365 Cullen/Frost Bankers Inc. 1,883 50,766 Old National Bancorp 2,035 50,346 StanCorp Financial Group Inc. 1,133 50,305 Affiliated Managers Group Inc./(1)/ 808 49,854 Trustmark Corp. 2,070 49,597 Colonial BancGroup Inc. 3,889 49,001 BRE Properties Inc. "A" 1,684 48,836 Berkley (W.R.) Corp. 907 48,261 Post Properties Inc. 1,410 47,884 Independence Community Bank Corp. 1,955 47,546 Westamerica Bancorp 1,295 47,319 Washington Federal Inc. 2,087 47,271
- -------------------------------------------------------------------------------- iShares Schedules of Investments page 65 iShares Dow Jones U.S. Financial Sector Index Fund Schedule of Investments (continued) October 31, 2001 (Unaudited)
Security Shares Value - ------------------------------------------------------- COMMON STOCKS (continued) - ------------------------------------------------------- AmeriCredit Corp./(1)/(2)/ 3,009 $46,639 Highwoods Properties Inc. 1,972 46,539 First Midwest Bancorp Inc. 1,366 45,652 Commercial Federal Corp. 1,818 45,377 Hudson United Bancorp 1,707 44,365 Citizens Banking Corp. 1,446 43,843 Bancorp South Inc. 2,850 43,605 Raymond James Financial Inc. 1,474 43,085 Silicon Valley Bancshares/(1)/ 1,794 42,051 Mercury General Corp. 950 41,278 Greater Bay Bancorp/(2)/ 1,799 40,999 Commerce Group Inc. 1,114 40,605 Providian Financial Corp. 10,413 40,507 Healthcare Realty Trust 1,465 39,555 First Industrial Realty Trust 1,429 39,298 HRPT Properties Trust 4,797 39,096 Knight Trading Group Inc./(1)/ 3,968 39,005 Park National Corp. 412 37,801 Reckson Associates Realty Corp./(2)/ 1,640 37,720 United Bancshares Inc. 1,381 37,563 Metris Companies Inc./(2)/ 2,291 37,137 Conseco Inc./(1)/(2)/ 12,306 36,795 Community First Bankshares Inc. 1,496 35,934 CarrAmerica Realty Corp. 1,267 35,869 Hudson City Bancorp Inc. 1,518 35,734 First American Corp. 2,142 35,664 Whitney Holding Corp. 902 35,413 Leucadia National Corp. 1,204 34,892 Centerpoint Properties Corp. 747 34,735 Cousins Properties Inc. 1,424 34,475 Nationwide Health Properties Inc. 1,718 33,845 American Financial Group Inc. 1,492 33,018 Southwest Bancorp of Texas Inc./(1)/ 1,131 32,448 Sl Green Realty Corp. 1,086 32,385 Developers Diversified Realty Corp. 1,778 32,360 Prentiss Properties Trust 1,252 31,801 Federal Realty Investment Trust 1,435 31,312 Ohio Casualty Corp. 2,029 30,942 Shurgard Storage Centers Inc. "A" 1,016 30,541 Health Care REIT Inc. 1,178 30,510 American Capital Strategies Ltd. 1,225 30,343 St. Joe Company (The) 1,158 29,807 Macerich Co. (The) 1,227 29,693 Nationwide Financial Services Inc. 872 $29,665 Chittenden Corp. 1,168 28,896 Staten Island Bancorp Inc. 991 28,680 TD Waterhouse Group Inc./(1)/ 2,996 28,372 La Quinta Properties Inc./(1)/ 5,240 28,034 Horace Mann Educators Corp. 1,473 27,913 iStar Financial Inc. 1,198 27,913 Total System Services Inc. 1,352 27,310 Downey Financial Corp. 763 26,812 FelCor Lodging Trust Inc. 1,926 26,752 Republic Bancorp Inc. 1,803 26,594 Ameritrade Holding Corp. "A"/(1)/(2)/ 4,689 25,789 Chelsea Property Group Inc. 568 25,446 Jeffries Group Inc. 762 25,276 South Financial Group Inc. (The) 1,547 24,675 LNR Property Corp. 880 24,244 AmerUs Group Co. 788 23,853 Provident Financial Group Inc. 1,113 23,829 Brandywine Realty Trust 1,187 23,431 Reinsurance Group of America Inc. 740 23,362 Kilroy Realty Corp. 989 23,152 MAF Bancorp Inc. 820 22,960 CBL & Associates Properties Inc. 767 22,335 Storage USA Inc. 555 22,283 CNA Financial Corp./(1)/ 866 21,806 Manufactured Home Communities Inc. 708 21,629 Colonial Properties Trust 699 20,865 AMCORE Financial Inc. 945 20,705 Provident Bankshares Corp. 936 20,611 UCBH Holdings Inc. 699 20,271 W.P. Stewart & Co. Ltd. 958 20,243 Home Properties of NY Inc. 650 19,897 People's Bank 902 19,646 Selective Insurance Group Inc. 913 19,611 Capital Automotive REIT 939 18,170 Texas Regional Bancshares "A" 538 18,023 Mills Corp. 820 17,909 East West Bancorp Inc. 791 17,869 Sterling Bancshares Inc. 1,429 17,019 Koger Equity Inc. 974 16,256 Homestore.com Inc./(1)/(2)/ 3,158 16,232 Glenborough Realty Trust Inc. 912 15,860 Meristar Hospitality Corp. 1,618 15,371 CMGI Inc./(1)/ 9,768 14,750 Bay View Capital Corp./(1)/ 1,994 14,018
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Security Shares Value - ---------------------------------------------------------------- COMMON STOCKS (continued) - ---------------------------------------------------------------- FirstFed Financial Corp./(1)/ 626 $ 13,922 Harbor Florida Bancshares Inc. 831 13,919 Mutual Risk Management Ltd./(2)/ 1,499 13,716 Presidential Life Corp. 781 13,597 Dime Community Bancshares 531 12,877 First Sentinel Bancorp Inc. 1,064 12,821 Ocwen Financial Corp./(1)/ 1,445 12,427 Anchor BanCorp Wisconsin Inc. 786 12,379 PFF Bancorp Inc. 481 12,025 GBC Bancorp 426 11,851 JDN Realty Corp. 1,093 11,608 Pacific Northwest Bancorp 563 11,375 Fremont General Corp. 2,206 11,052 Equity Inns Inc. 1,336 10,608 Trenwick Group Ltd. 1,336 10,367 Southwest Securities Group Inc./(2)/ 591 10,343 Net.B@nk Inc./(1)/ 1,100 9,053 Safeguard Scientifics Inc./(1)/ 3,916 8,615 RFS Hotel Investors Inc. 906 8,381 BSB Bancorp Inc. 363 8,088 Internet Capital Group Inc./(1)/ 8,145 7,331 OceanFirst Financial Corp. 280 6,840 Medallion Financial Corp. 661 5,387 CompuCredit Corp./(1)/ 615 3,782 NextCard Inc./(1)/ 1,439 1,252 - ---------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $78,121,713) 73,091,875 - ---------------------------------------------------------------- SHORT TERM INSTRUMENTS - 1.74% - ---------------------------------------------------------------- Barclays Global Investors Funds, Inc. Institutional Money Market Fund, Institutional Shares/(3)/ 575,587 $ 575,587 Dreyfus Money Market Fund/(3)/ 253,549 253,549 Goldman Sachs Financial Square Prime Obligation Fund/(3)/ 174,471 174,471 Providian Temp Cash Money Market Fund/(3)/ 264,573 264,573 - ---------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $1,268,180) 1,268,180 - ---------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 101.68% (Cost $79,389,893) 74,360,055 - ---------------------------------------------------------------- Other Assets, Less Liabilities -- (1.68%) (1,226,366) - ---------------------------------------------------------------- NET ASSETS -- 100.00% $73,133,689 ================================================================
/(1)/ Non-income earning securities. /(2)/ Denotes all or part of security on loan. See Note 5. /(3)/ Security or portion of security represents investment of collateral received from securities lending transactions. See Note 5. See notes to financial statements. - -------------------------------------------------------------------------------- iShares Schedules of Investments page 67 iShares Dow Jones U.S. Healthcare Sector Index Fund Schedule of Investments October 31, 2001 (Unaudited)
Security Shares Value - ----------------------------------------------------------------- COMMON STOCKS - 99.97% - ----------------------------------------------------------------- Pfizer Inc. 718,869 $30,120,611 Johnson & Johnson 342,801 19,851,606 Merck & Co. Inc. 262,189 16,730,280 Bristol-Myers Squibb Co. 222,307 11,882,309 Abbott Laboratories 165,027 8,743,130 Lilly (Eli) and Company 109,742 8,395,263 American Home Products Corp. 149,011 8,319,284 Amgen Inc./(1)/ 118,409 6,727,999 Schering-Plough Corp. 166,256 6,181,398 Pharmacia Corporation 146,564 5,938,773 Medtronic Inc. 137,417 5,537,905 Baxter International Inc. 67,102 3,245,724 UnitedHealth Group Inc. 36,064 2,371,208 Tenet Healthcare Corp./(1)/ 36,863 2,120,360 HCA - The Healthcare Company/(2)/ 52,160 2,068,666 Forest Laboratories Inc. "A"/(1)/ 19,916 1,481,352 Guidant Corp./(1)/ 34,893 1,448,408 Genentech Inc./(1)/ 24,856 1,298,726 Genzyme Corp. - General Division/(1)/ 23,597 1,273,058 CIGNA Corp. 17,015 1,240,393 Allergan Inc. 14,952 1,073,404 Becton Dickinson & Co. 29,156 1,043,785 IDEC Pharmaceuticals Corp./(1)/(2)/ 16,956 1,016,682 Stryker Corp. 17,006 956,417 Biomet Inc. 30,470 929,335 Biogen Inc./(1)/ 16,888 928,840 King Pharmaceuticals Inc./(1)/ 23,797 927,845 MedImmune Inc./(1)/ 22,796 894,515 Immunex Corp./(1)/(2)/ 35,901 857,675 Wellpoint Health Networks Inc./(1)/ 7,140 796,753 Boston Scientific Corp./(1)/ 32,686 743,280 Applera Corp. - Applied Biosystems Group 23,971 699,474 Zimmer Holdings Inc./(1)/ 22,226 687,006 St. Jude Medical Inc./(1)/ 9,670 686,570 Chiron Corp./(1)/ 12,528 674,257 Gilead Sciences Inc./(1)/ 10,694 672,653 Healthsouth Corp./(1)/ 43,929 571,956 Millennium Pharmaceuticals Inc./(1)/ 22,464 571,933 Watson Pharmaceuticals Inc./(1)/ 11,960 570,253 Human Genome Sciences Inc./(1)/ 12,680 540,548 Health Management Associates Inc. "A"/(1)/ 27,686 539,600 Mylan Laboratories Inc. 14,216 524,144 Imclone Systems Inc./(1)/(2)/ 8,211 502,431 Quest Diagnostics Inc./(1)/ 7,609 $ 497,476 Laboratory Corp. of America Holdings/(1)/ 5,355 461,601 Aetna Inc./(1)/ 16,096 444,893 Sepracor Inc./(1)/(2)/ 8,859 420,271 Andrx Group/(1)/(2)/ 6,177 401,073 IVAX Corporation/(1)/(2)/ 19,336 397,355 Cephalon Inc./(1)/(2)/ 5,639 355,539 Cytyc Corp./(1)/ 13,035 341,778 Invitrogen Corp./(1)/ 5,521 338,658 Protein Design Labs Inc./(1)/(2)/ 9,854 325,281 Bard (C.R.) Inc. 5,781 317,377 Lincare Holdings Inc./(1)/(2)/ 12,196 313,437 ICOS Corp./(1)/(2)/ 5,425 313,294 Health Net Inc./(1)/ 13,927 305,698 Hillenbrand Industries Inc. 5,710 302,744 Enzon Inc./(1)/ 4,747 293,602 Beckman Coulter Inc. 6,803 288,923 Express Scripts Inc. "A"/(1)/(2)/ 6,995 286,375 Celgene Corp./(1)/ 8,543 281,236 Apogent Technologies Inc./(1)/(2)/ 11,990 280,806 First Health Group Corp./(1)/ 10,197 275,319 Manor Care Inc./(1)/ 11,636 271,817 Patterson Dental Co./(1)/ 7,088 269,344 Oxford Health Plans Inc./(1)/ 11,221 264,367 Abgenix Inc./(1)/ 8,595 256,045 Trigon Healthcare Inc./(1)/ 4,140 254,155 Varian Medical Systems Inc./(1)/ 3,779 253,571 Community Health Systems Inc./(1)/(2)/ 9,798 244,950 Dentsply International Inc. 5,196 233,768 Universal Health Services Inc. "B"/(1)/ 5,742 231,919 ICN Pharmaceuticals Inc./(2)/ 9,201 222,756 AdvancePCS/(1)/ 3,578 217,435 Humana Inc./(1)/ 18,270 211,019 Omnicare Inc. 10,597 210,668 Vertex Pharmaceuticals Inc./(1)/ 8,456 207,172 Barr Laboratories Inc./(1)/(2)/ 2,840 206,752 Quintiles Transnational Corp./(1)/ 12,910 204,753 Bausch & Lomb Inc. 6,104 198,746 Triad Hospitals Inc./(1)/ 7,342 197,500 Medicis Pharmaceutical Corp. "A"/(1)/ 3,416 197,069 Alkermes Inc./(1)/ 7,205 184,808 OSI Pharmaceuticals Inc./(1)/(2)/ 3,937 179,842 Renal Care Group Inc./(1)/ 5,511 173,045 ResMed Inc./(1)/(2)/ 3,101 173,036 DaVita Inc./(1)/ 9,445 171,899
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Security Shares Value - ------------------------------------------------------------- COMMON STOCKS (continued) - ------------------------------------------------------------- Edwards Lifesciences Corp./(1)/ 6,698 $170,129 Applera Corp. - Celera Genomics Group/(1)/(2)/ 6,995 164,382 Affymetrix Inc./(1)/ 5,414 162,691 Henry Schein Inc./(1)/ 4,817 162,574 Medarex Inc./(1)/ 7,622 157,013 Steris Corp./(1)/ 6,962 155,949 SICOR Inc./(1)/ 7,695 144,281 COR Therapeutics Inc./(1)/(2)/ 6,313 142,232 Techne Corp./(1)/ 4,719 142,231 Apria Healthcare Group Inc./(1)/ 6,098 140,254 Pharmaceutical Product Development Inc./(1)/ 5,180 138,151 Monsanto Company 4,324 135,341 Cubist Pharmaceuticals Inc./(1)/ 3,184 128,315 LifePoint Hospitals Inc./(1)/ 4,025 125,500 NPS Pharmaceuticals Inc./(1)/ 3,397 122,734 Scios Inc./(1)/(2)/ 5,162 119,242 Orthodontic Centers of America Inc./(1)/(2)/ 4,701 118,606 Covance Inc./(1)/ 6,339 116,321 Respironics Inc./(1)/ 3,443 115,960 Aviron/(1)/ 3,482 115,951 Myriad Genetics Inc./(1)/ 2,503 115,138 Invacare Corp. 3,353 112,326 Incyte Genomics Inc./(1)/ 7,494 111,661 Inhale Therapeutic Systems Inc./(1)/(2)/ 6,242 109,235 Perrigo Co./(1)/ 7,258 107,346 Coventry Health Care Inc./(1)/ 4,904 105,142 Transkaryotic Therapies Inc./(1)/ 2,710 103,143 Taro Pharmaceutical Industries Ltd./(1)/(2)/ 2,441 102,766 CuraGen Corp./(1)/(2)/ 4,363 100,654 Mid Atlantic Medical Services Inc./(1)/ 5,418 100,504 Cell Therapeutics Inc./(1)/ 3,236 97,177 Alpharma Inc. "A"/(2)/ 3,496 96,839 Tularik Inc./(1)/(2)/ 4,154 95,542 IDEXX Laboratories Inc./(1)/ 3,736 94,147 Province Healthcare Co./(1)/(2)/ 3,338 91,962 Beverly Enterprises Inc./(1)/ 11,864 88,861 Haemonetics Corp./(1)/ 2,327 88,659 Sybron Dental Specialties Inc./(1)/ 4,312 88,396 CV Therapeutics Inc./(1)/(2)/ 2,107 83,100 Immunomedics Inc./(1)/ 4,377 80,099 Ligand Pharmaceuticals Inc. "B"/(1)/ 5,940 80,012 Delta & Pine Land Co. 4,371 78,897 Trimeris Inc./(1)/ 1,975 78,409 VISX Inc./(1)/ 6,434 $ 75,600 Regeneron Pharmaceuticals Inc./(1)/(2)/ 3,341 73,836 Pediatrix Medical Group Inc./(1)/ 2,522 73,239 Mentor Corp. 2,541 70,945 Cell Genesys Inc./(1)/(2)/ 3,881 69,470 Albany Molecular Research Inc./(1)/ 2,448 67,810 Impath Inc./(1)/ 1,814 66,882 Owens & Minor Inc. 3,784 66,636 Syncor International Corp./(1)/(2)/ 2,261 65,569 Sunrise Assisted Living Inc./(1)/(2)/ 2,145 64,114 Kos Pharmaceuticals Inc./(1)/ 2,168 60,812 Xoma Ltd./(1)/ 7,964 59,491 PacifiCare Health Systems Inc. "A"/(1)/(2)/ 3,410 56,470 Datascope Corp. 1,686 56,464 US Oncology Inc./(1)/ 10,743 56,401 Noven Pharmaceuticals Inc./(1)/ 2,517 53,964 Sangstat Medical Corp./(1)/ 2,377 53,815 Viropharma Inc./(1)/(2)/ 2,116 52,963 Enzo Biochem Inc./(1)/(2)/ 2,483 50,951 Arthocare Corp./(1)/(2)/ 2,567 50,698 Bio-Technology General Corp./(1)/ 6,519 46,611 Maxygen Inc./(1)/ 3,117 45,009 Emisphere Technologies Inc./(1)/ 1,836 44,156 IGEN International Inc./(1)/ 1,436 42,233 Parexel International Corp./(1)/ 2,803 41,849 Gene Logic Inc./(1)/ 3,004 40,254 Pharmacyclics Inc./(1)/(2)/ 1,822 39,592 Pharmacopeia Inc./(1)/ 2,413 38,125 Guilford Pharmaceuticals Inc./(1)/ 3,215 34,915 Supergen Inc./(1)/ 3,287 33,626 NABI Inc./(1)/ 4,308 33,602 Caliper Technologies Corp./(1)/(2)/ 2,719 32,818 Cyberonics Inc./(1)/ 2,015 31,676 Molecular Devices Corp./(1)/ 1,928 31,214 Lexicon Genetics Inc./(1)/ 3,057 30,081 Theragenics Corp./(1)/ 3,360 29,904 Alexion Pharmaceuticals Inc./(1)/ 1,725 29,687 Geron Corp./(1)/(2)/ 2,344 27,237 Visible Genetics Inc./(1)/ 1,737 25,204 Praecis Pharmaceuticals Inc./(1)/ 5,776 25,010 Biosite Diagnostics Inc./(1)/ 1,545 24,117 Advanced Tissue Sciences Inc./(1)/ 5,349 24,017 EntreMed Inc./(1)/(2)/ 2,057 23,964 Polymedica Industries Corp./(1)/ 1,375 22,688 Novoste Corp./(1)/ 1,841 21,264
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Security Shares Value - ------------------------------------------------------------------- COMMON STOCKS (continued) - ------------------------------------------------------------------- Northfield Laboratories Inc./(1)/(2)/ 1,378 $ 18,948 Imatron Inc./(1)/ 10,400 18,824 United Therapeutics Inc./(1)/(2)/ 1,916 18,106 Cytogen Corp./(1)/ 8,579 17,844 Genome Therapeutics Corp./(1)/ 2,534 17,789 Cygnus Inc./(1)/ 3,491 17,455 Columbia Laboratories Inc./(1)/ 3,538 16,275 Organogenesis Inc./(1)/ 3,921 15,213 Cell Pathways Inc./(1)/(2)/ 3,309 13,368 Maxim Pharmaceuticals Inc./(1)/ 2,642 13,078 Hyseq Inc./(1)/ 1,332 12,174 I-Stat Corp./(1)/ 1,750 10,938 Genzyme Transgenics Corp./(1)/ 1,775 6,230 - ------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $189,630,166) 182,114,078 - ------------------------------------------------------------------- SHORT TERM INSTRUMENTS - 4.25% - ------------------------------------------------------------------- Barclays Global Investors Funds, Inc. Institutional Money Market Fund, Institutional Shares/(3)/ 3,240,783 3,240,783 Dreyfus Money Market Fund/(3)/ 1,647,837 1,647,837 Goldman Sachs Financial Square Prime Obligation Fund/(3)/ 1,133,905 1,133,905 Providian Temp Cash Money Market Fund/(3)/ 1,719,482 1,719,482 - ------------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $7,742,007) 7,742,007 - ------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 104.22% (Cost $197,372,173) 189,856,085 - ------------------------------------------------------------------- Other Assets, Less Liabilities -- (4.22%) (7,679,883) - ------------------------------------------------------------------- NET ASSETS -- 100.00% $182,176,202 ===================================================================
/(1)/ Non-income earning securities. /(2)/ Denotes all or part of security on loan. See Note 5. /(3)/ Security or portion of security represents investment of collateral received from securities lending transactions. See Note 5. See notes to financial statements. - -------------------------------------------------------------------------------- page 70 i|Shares iShares Dow Jones U.S. Industrial Sector Index Fund Schedule of Investments October 31, 2001 (Unaudited)
Security Shares Value - ---------------------------------------------------------------- COMMON STOCKS - 100.00% - ---------------------------------------------------------------- General Electric Co. 236,549 $8,612,749 Tyco International Ltd. 57,365 2,818,925 Minnesota Mining & Manufacturing Co. 13,988 1,460,067 Automatic Data Processing Inc. 20,268 1,047,045 Boeing Co. 27,819 906,899 Electronic Data Systems Corp. 13,326 857,795 First Data Corp. 12,415 838,882 United Technologies Corp. 15,375 828,559 Emerson Electric Co. 15,503 759,957 Honeywell International Inc. 24,179 714,489 Illinois Tool Works Inc. 10,975 627,770 Lockheed Martin Corp. 11,787 574,852 Concord EFS Inc./(1)/(2)/ 20,603 563,904 Caterpillar Inc. 12,135 542,677 General Dynamics Corp. 6,196 505,594 Waste Management Inc. 20,418 500,241 United Parcel Service Inc./(2)/ 8,835 450,585 Union Pacific Corp. 7,822 406,822 FedEx Corp./(1)/ 9,901 406,733 Raytheon Co. 10,377 334,658 Paychex Inc./(2)/ 10,343 331,597 Masco Corp. 16,590 328,980 Deere & Co. 8,851 327,398 Burlington Northern Santa Fe Corp. 12,156 326,632 PPG Industries Inc. 5,853 285,802 Agilent Technologies Inc./(1)/ 12,553 279,555 Solectron Corp./(1)/(2)/ 19,652 241,720 ChoicePoint Inc./(1)/ 5,603 239,696 Dover Corp. 6,931 228,376 Dun & Bradstreet Corp./(1)/ 6,943 217,038 PACCAR Inc. 3,936 207,900 CSX Corp. 6,165 207,760 Danaher Corp./(2)/ 3,552 197,988 Fiserv Inc./(1)/ 5,275 196,177 IMS Health Inc. 8,828 188,654 Ingersoll-Rand Co. 4,892 182,472 Norfolk Southern Corp. 10,878 182,207 Gemstar-TV Guide International Inc./(1)/ 8,879 179,977 Temple-Inland Inc. 3,508 175,365 Cintas Corp. 4,233 171,098 Northrop Grumman Corp. 1,658 165,717 Textron Inc. 5,125 162,206 Computer Sciences Corp./(1)/ 4,341 155,885 Certegy Inc./(1)/ 5,173 $ 147,430 Cooper Industries Inc. 3,775 146,092 Waters Corp./(1)/ 4,106 145,722 Equifax Inc. 6,327 141,472 Sanmina Corp./(1)/ 9,300 140,802 Moody's Corp. 3,922 136,172 Vulcan Materials Co. 3,145 130,738 Eaton Corp. 1,881 123,093 Convergys Corp./(1)/ 4,182 117,514 Rockwell International Corp. 8,068 111,177 Robert Half International Inc./(1)/ 5,183 106,925 Parker Hannifin Corp. 2,892 103,823 Donnelley (R.R.) & Sons Co. 4,065 103,657 SPX Corp./(1)/(2)/ 1,039 103,484 Sabre Holdings Corp./(1)/ 3,898 102,517 American Standard Companies Inc./(1)/ 1,690 97,851 Jabil Circuit Inc./(1)/ 4,475 94,870 DST Systems Inc./(1)/ 2,037 83,415 Grainger (W.W.) Inc. 1,926 83,396 Ceridian Corp./(1)/ 5,050 83,274 SCI Systems Inc./(1)/ 4,093 83,129 Affiliated Computer Services Inc. "A"/(1)/(2)/ 901 79,333 American Power Conversion Corp./(1)/ 6,162 79,305 Hubbell Inc. "B" 2,889 78,927 Sealed Air Corp./(1)/(2)/ 1,913 76,597 Symbol Technologies Inc. 5,910 75,944 Molex Inc. 2,597 75,131 Sherwin-Williams Co. 3,049 74,274 Fluor Corp. 1,984 73,844 PerkinElmer Inc. 2,714 73,034 Smurfit-Stone Container Corp./(1)/ 4,917 72,821 Avnet Inc. 3,513 72,473 Arrow Electronics Inc./(1)/(2)/ 2,930 71,638 Diebold Inc. 1,904 69,115 Molex Inc. "A" 2,688 66,797 Republic Services Inc. "A"/(1)/ 4,042 66,208 L-3 Communications Holdings Inc./(1)/(2)/ 741 64,371 Millipore Corp. 1,226 64,120 Vishay Intertechnology Inc./(1)/ 3,370 63,592 Teleflex Inc. 1,550 62,000 ITT Industries Inc. 1,282 61,651 Pall Corp. 3,035 61,611 Expeditors International Washington Inc. 1,337 60,432 Iron Mountain Inc./(1)/ 1,483 57,911 Manpower Inc. 1,987 56,749
- -------------------------------------------------------------------------------- iShares Schedules of Investments page 71 iShares Dow Jones U.S. Industrial Sector Index Fund Schedule of Investments (continued) October 31, 2001 (Unaudited)
Security Shares Value - --------------------------------------------------------- COMMON STOCKS (continued) - --------------------------------------------------------- CH Robinson Worldwide Inc. 2,074 $55,521 Sonoco Products Co. 2,282 53,559 Allied Waste Industries Inc./(1)/ 5,350 53,072 NCO Group Inc./(1)/(2)/ 3,130 51,175 PSS World Medical Inc./(1)/ 5,341 48,229 Tektronix Inc./(1)/ 2,374 46,768 Deluxe Corp. 1,321 46,235 Tech Data Corp./(1)/ 1,049 44,782 Pactiv Corp./(1)/ 2,612 42,314 Navistar International Corp. 1,338 40,140 Martin Marietta Materials Inc. 1,004 40,080 AVX Corp. 2,141 39,630 Reynolds & Reynolds Co. "A" 1,626 38,618 Digital River Inc./(1)/(2)/ 2,869 38,012 Thomas & Betts Corp. 2,091 37,973 Actuant Corp. "A"/(1)/ 1,429 37,926 Kadant Inc./(1)/ 2,784 36,192 WebMD Corp./(1)/ 7,583 34,806 KPMG Consulting Inc./(1)/ 2,766 34,077 CSG Systems International Inc./(1)/ 1,041 32,542 Roper Industries Inc. 678 28,747 Titan Corp. (The)/(1)/(2)/ 1,090 28,482 Bemis Co. 650 28,125 Viad Corp. 1,423 27,749 Macrovision Corp./(1)/ 1,113 27,391 Integrated Circuit Systems Inc./(1)/ 1,600 27,216 CheckFree Corp./(1)/ 1,853 26,090 Owens-Illinois Inc./(1)/ 4,262 25,998 Plexus Corp./(1)/(2)/ 910 22,750 Coherent Inc./(1)/ 841 22,286 Technitrol Inc. 876 21,795 National Instruments Corp./(1)/(2)/ 725 20,887 Tekelec/(1)/ 1,039 19,949 SCM Microsystems Inc./(1)/ 2,453 19,869 Catalina Marketing Corp./(1)/ 714 19,742 Lafarge Corp. 539 19,108 Acxiom Corp./(1)/ 1,609 18,970 Harsco Corp. 589 18,819 Swift Transportation Co. Inc./(1)/ 1,103 18,740 Brightpoint Inc./(1)/ 5,050 18,584 Copart Inc./(1)/ 633 18,579 Jacobs Engineering Group Inc./(1)/ 281 18,417 Wolverine Tube Inc./(1)/ 1,466 18,398 UCAR International Inc./(1)/ 2,399 $17,441 Cognex Corp./(1)/ 896 17,006 Garmin Ltd./(1)/(2)/ 1,011 16,995 CommScope Inc./(1)/ 826 16,148 Dionex Corp./(1)/ 665 15,960 Varian Inc./(1)/ 628 15,914 Cummins Engine Company Inc. 506 15,843 Electro Scientific Industries Inc./(1)/ 665 15,674 Global Payments Inc. 502 15,035 Goodrich (B.F.) Co. 693 14,796 Pentair Inc. 447 14,192 Zomax Inc./(1)/ 2,745 13,890 Newport Corp. 886 13,813 Crane Co. 674 13,804 Aeroflex Inc./(1)/ 923 13,540 Veeco Instruments Inc./(1)/ 523 13,316 USG Corp. 2,451 13,211 Ingram Micro Inc. "A"/(1)/ 1,011 12,941 Littelfuse Inc./(1)/ 558 12,577 C&D Technologies Inc. 598 12,391 Multex.com Inc./(1)/ 1,685 11,778 Pioneer-Standard Electronics Inc. 1,315 11,690 Audiovox Corp. "A"/(1)/ 1,414 10,817 Computer Horizons Corp./(1)/ 4,075 10,595 CTS Corp. 655 10,578 REMEC Inc./(1)/ 1,168 10,454 Tetra Tech Inc./(1)/ 402 10,404 Ball Corp. 165 10,154 Snap-On Inc. 379 10,142 Power-One Inc./(1)/ 1,275 10,085 Mueller Industries Inc./(1)/ 337 9,756 Chemed Corp. 337 9,554 Pittston Brink's Group 493 9,490 CNET Networks Inc./(1)/ 1,914 9,455 Alexander & Baldwin Inc. 422 9,398 Vicor Corp./(1)/ 605 9,323 Orbotech Ltd./(1)/ 405 8,732 Shaw Group Inc./(1)/ 291 8,003 Dendrite International Inc./(1)/ 804 7,976 Cymer Inc./(1)/ 378 7,900 Regal-Beloit Corp. 441 7,850 Capstone Turbine Corp./(1)/ 1,509 7,651 Getty Images Inc./(1)/ 484 7,546 CNF Transportation Inc./(2)/ 337 7,444 Werner Enterprises Inc. 342 7,404
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Security Shares Value - ---------------------------------------------------------------- COMMON STOCKS (continued) - ---------------------------------------------------------------- Covansys Corporation/(1)/ 944 $ 7,269 American Superconductor Corp./(1)/ 681 7,259 Perot Systems Corp. "A"/(1)/ 422 7,153 Three-Five Systems Inc./(1)/ 459 7,119 Artesyn Technologies Inc./(1)/ 982 7,080 Helix Technology Corp. 358 6,938 Anaren Microwave Inc./(1)/ 451 6,896 SLI Inc. 2,734 6,835 Zygo Corp./(1)/ 479 6,778 Methode Electronics Inc. "A" 933 6,764 Tollgrade Communications Inc./(1)/ 261 6,653 Quanta Services Inc./(1)/ 434 6,597 DDi Corp./(1)/ 710 6,411 Spherion Corporation/(1)/ 841 6,055 Uniroyal Technology Corp./(1)/ 1,957 5,969 Modis Professional Services Inc./(1)/ 1,098 5,754 Crown Cork & Seal Co. Inc. 3,106 5,653 Donaldson Co. Inc. 165 5,206 Corporate Executive Board Co. (The)/(1)/ 165 5,044 Dycom Industries Inc./(1)/ 411 4,911 StorageNetworks Inc./(1)/ 926 4,639 eFunds Corp./(1)/(2)/ 297 4,603 Photon Dynamics Inc./(1)/ 170 4,505 U.S. Industries Inc. 2,189 4,487 National Service Industries Inc. 252 4,470 Casella Waste Systems Inc. "A"/(1)/ 382 4,466 Checkpoint Systems Inc./(1)/ 422 4,414 Atlas Air Inc./(1)/ 337 4,351 Plug Power Inc./(1)/(2)/ 518 4,299 General Cable Corp. 377 4,260 Overseas Shipholding Group Inc. 165 4,107 EGL Inc./(1)/ 337 4,074 Akamai Technologies Inc./(1)/ 1,260 3,982 Keynote Systems Inc./(1)/ 509 3,879 Flowserve Corp./(1)/ 165 3,858 Presstek Inc./(1)/ 589 3,829 DiamondCluster International Inc. "A"/(1)/ 337 3,471 MedQuist Inc./(1)/ 134 3,256 Albany International Corp. "A"/(1)/ 165 3,217 Arbitron Inc./(1)/ 106 2,862 Valspar Corp. 85 2,853 MSC Industrial Direct Co. Inc. "A"/(1)/ 165 2,706 Airborne Inc. 255 2,547 Key3Media Group Inc./(1)/ 524 2,473 G&K Services Inc. "A" 85 $ 2,347 Bowne & Co. Inc. 223 2,330 Timken Co. 165 2,223 American Management Systems Inc./(1)/ 165 2,175 VerticalNet Inc./(1)/ 1,530 2,127 AnswerThink Consulting Group Inc./(1)/ 502 1,893 Digex Inc./(1)/ 1,052 1,767 APW Ltd./(1)/ 654 1,759 Wallace Computer Services Inc. 107 1,659 Ryder System Inc. 85 1,590 FuelCell Energy Inc./(1)/(2)/ 100 1,563 Interactive Data Corp. 107 1,436 Hunt (J.B.) Transport Services Inc./(1)/ 85 1,168 IDX Systems Corp./(1)/ 85 837 Mastec Inc./(1)/ 165 759 Profit Recovery Group International Inc. (The)/(1)/ 85 587 Ciber Inc./(1)/ 85 569 Elcor Corp. 16 375 - ---------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $42,444,285) 35,127,958 - ---------------------------------------------------------------- SHORT TERM INSTRUMENTS - 4.71% - ---------------------------------------------------------------- Barclays Global Investors Funds, Inc. Institutional Money Market Fund, Institutional Shares/(3)/ 696,738 696,738 Dreyfus Money Market Fund/(3)/ 350,948 350,948 Goldman Sachs Financial Square Prime Obligation Fund/(3)/ 241,493 241,493 Providian Temp Cash Money Market Fund/(3)/ 366,206 366,206 - ---------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $1,655,385) 1,655,385 - ---------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 104.71% (Cost $44,099,670) 36,783,343 - ---------------------------------------------------------------- Other Assets, Less Liabilities -- (4.71%) (1,655,976) - ---------------------------------------------------------------- NET ASSETS -- 100.00% $35,127,367 ================================================================
/(1)/ Non-income earning securities. /(2)/ Denotes all or part of security on loan. See Note 5. /(3)/ Security or portion of security represents investment of collateral received from securities lending transactions. See Note 5. See notes to financial statements. - -------------------------------------------------------------------------------- iShares Schedules of Investments page 73 iShares Dow Jones U.S. Technology Sector Index Fund Schedule of Investments October 31, 2001 (Unaudited)
Security Shares Value - ----------------------------------------------------------------- COMMON STOCKS - 100.04% - ----------------------------------------------------------------- Microsoft Corp./(1)/ 282,893 $16,450,228 International Business Machines Corp. 107,128 11,577,323 Intel Corp. 413,587 10,099,795 Cisco Systems Inc./(1)/ 447,188 7,566,421 Oracle Corp./(1)/ 262,588 3,560,693 Dell Computer Corp./(1)/ 141,722 3,398,494 Texas Instruments Inc. 106,620 2,984,294 QUALCOMM Inc./(1)/ 46,295 2,274,010 Motorola Inc. 134,260 2,197,836 Sun Microsystems Inc./(1)/ 200,382 2,033,877 Applied Materials Inc./(1)/ 49,780 1,697,996 Hewlett-Packard Co. 100,470 1,690,910 EMC Corp./(1)/ 135,507 1,669,446 Lucent Technologies Inc./(2)/ 209,224 1,401,801 Maxim Integrated Products Inc./(1)/ 20,114 920,216 Compaq Computer Corp. 104,505 914,419 Computer Associates International Inc. 28,054 867,430 Analog Devices Inc./(1)/ 22,125 840,750 Linear Technology Corp. 19,475 755,630 Micron Technology Inc./(1)/ 32,982 750,670 Veritas Software Corp./(1)/ 24,423 693,125 JDS Uniphase Corp./(1)/ 80,212 640,894 Xilinx Inc./(1)/ 20,289 617,191 Pitney Bowes Inc. 15,182 556,572 General Motors Corp. "H"/(1)/ 39,732 546,315 Altera Corp./(1)/ 23,905 482,881 PeopleSoft Inc./(1)/ 15,897 473,254 Intuit Inc./(1)/ 11,660 468,965 KLA-Tencor Corp./(1)/(2)/ 11,341 463,393 Corning Inc. 57,201 461,040 VeriSign Inc./(1)/(2)/ 11,265 436,068 SunGard Data Systems Inc./(1)/ 17,130 431,676 Siebel Systems Inc./(1)/ 24,978 407,891 Adobe Systems Inc. 14,792 390,509 Broadcom Corp. "A"/(1)/ 11,148 383,603 Juniper Networks Inc./(1)/(2)/ 16,991 378,729 LSI Logic Corp./(1)/ 22,234 376,866 Apple Computer Inc./(1)/ 21,286 373,782 Lexmark International Group Inc. "A"/(1)/ 7,935 355,091 Brocade Communications System Inc./(1)/(2)/ 13,885 340,877 Check Point Software Technologies Ltd./(1)/(2)/ 11,098 327,613 Ciena Corp./(1)/ 20,073 326,387 Cadence Design Systems Inc./(1)/ 15,287 323,167 Tellabs Inc./(1)/(2)/ 22,877 $ 312,271 Xerox Corp. 44,001 308,007 BEA Systems Inc./(1)/ 24,229 294,140 Novellus Systems Inc./(1)/ 8,771 289,706 National Semiconductor Corp./(1)/ 10,717 278,428 NVIDIA Corp./(1)/(2)/ 6,457 276,747 Citrix Systems Inc./(1)/ 11,436 267,602 Network Appliance Inc./(1)/ 20,026 266,346 Amdocs Ltd./(1)/(2)/ 9,974 260,421 Microchip Technology Inc./(1)/ 8,151 254,474 Symantec Corp./(1)/(2)/ 4,521 248,610 Teradyne Inc./(1)/ 10,740 247,557 Compuware Corp./(1)/ 22,629 232,626 BMC Software Inc./(1)/ 15,000 226,050 QLogic Corp./(1)/(2)/ 5,679 223,469 ADC Telecommunications Inc./(1)/ 48,087 218,796 Atmel Corp./(1)/ 26,620 211,629 NCR Corp./(1)/ 5,885 208,623 Advanced Micro Devices Inc./(1)/ 21,157 208,185 Agere Systems Inc./(1)/ 44,746 205,832 Applied Micro Circuits Corp./(1)/ 18,354 202,445 Scientific-Atlanta Inc. 9,631 200,999 Comverse Technology Inc./(1)/ 10,527 198,013 Integrated Device Technology Inc./(1)/ 6,566 182,863 Synopsys Inc./(1)/ 3,749 176,203 RF Micro Devices Inc./(1)/(2)/ 8,584 175,457 Unisys Corp./(1)/ 19,420 173,421 Peregrine Systems Inc./(1)/ 11,702 168,977 PMC - Sierra Inc./(1)/ 10,090 163,761 Rational Software Corp./(1)/ 12,417 162,911 Network Associates Inc./(1)/(2)/ 8,475 162,720 Semtech Corp./(1)/(2)/ 4,241 160,098 Conexant Systems Inc./(1)/ 15,430 156,614 Cypress Semiconductor Corp./(1)/ 7,836 154,761 Polycom Inc./(1)/ 5,121 153,528 Rockwell Collins 11,234 151,659 Lam Research Corp./(1)/ 7,656 145,158 Avaya Inc./(1)/ 15,662 139,862 Harris Corp. 4,063 139,280 Intersil Holding Corp./(1)/ 4,236 138,729 International Rectifier Corp./(1)/(2)/ 3,844 134,963 Crown Castle International Corp./(1)/(2)/ 11,163 130,607 Fairchild Semiconductor Corp. "A"/(1)/ 6,132 130,305 TriQuint Semiconductor Inc./(1)/ 7,294 128,958 Mercury Interactive Corp./(1)/ 5,093 121,315
- -------------------------------------------------------------------------------- page 74 i|Shares iShares Dow Jones U.S. Technology Sector Index Fund Schedule of Investments (Continued) October 31, 2001 (Unaudited) Security Shares Value - ---------------------------------------------------------------------------- COMMON STOCKS (Continued) - ---------------------------------------------------------------------------- Storage Technology Corp./(1)/ 6,381 $119,771 Emulex Corp./(1)(2)/ 5,024 118,968 American Tower Corp./(1)(2)/ 10,524 115,974 Lattice Semiconductor Corp./(1)/ 6,600 115,500 Parametric Technology Corp./(1)/ 16,281 114,130 Autodesk Inc. 3,307 109,859 Jack Henry & Associates Inc. 4,451 109,762 Vitesse Semiconductor Corp./(1)(2)/ 11,623 109,721 Micrel Inc./(1)(2)/ 4,131 103,895 Marvell Technology Group Ltd./(1)/ 4,006 97,506 KEMET Corp./(1)/ 5,268 94,192 Advanced Fibre Communications Inc./(1)/ 4,980 92,777 Cerner Corp./(1)(2)/ 1,704 91,590 NetIQ Corp./(1)/ 3,245 91,347 Andrew Corp./(1)/ 5,019 91,195 3Com Corp./(1)/ 20,992 86,907 Palm Inc./(1)/ 34,922 85,908 Sybase Inc./(1)/ 6,300 85,680 Enterasys Networks Inc./(1)/ 10,523 83,763 IKON Office Solutions Inc. 8,605 83,382 Quantum DLT & Storage Group/(1)/ 9,872 83,221 Riverstone Networks Inc./(1)/ 6,524 82,985 Extreme Networks Inc./(1)/ 6,987 81,678 i2 Technologies Inc./(1)/ 17,737 80,881 Cree Inc./(1)(2)/ 4,490 80,595 Openwave Systems Inc./(1)(2)/ 10,399 80,384 UTStarcom Inc./(1)(2)/ 3,361 78,916 Axcelis Technologies Inc./(1)/ 5,989 78,516 Novell Inc./(1)/ 21,912 77,568 Gateway Inc./(1)/ 13,684 77,315 Mentor Graphics Corp./(1)/ 3,950 74,892 Advent Software Inc./(1)(2)/ 1,939 74,787 McDATA Corp. "A"/(1)/ 5,006 73,638 Zebra Technologies Corp. "A"/(1)/ 1,593 73,390 Adaptec Inc./(1)/ 6,074 73,192 Level 3 Communications Inc./(1)(2)/ 20,627 70,957 Vignette Corp./(1)/ 15,118 70,752 Ascential Software Corp./(1)/ 17,693 66,880 Finisar Corp./(1)(2)/ 8,535 66,744 Electronics For Imaging Inc./(1)/ 3,295 64,846 TyCom Ltd./(1)(2)/ 4,229 64,788 Amkor Technology Inc./(1)/ 5,098 63,470 Global Crossing Ltd./(1)(2)/ 55,662 62,898 Alpha Industries Inc./(1)(2)/ 2,683 $ 62,460 Retek Inc./(1)/ 3,064 62,260 Internet Security Systems Inc./(1)/ 2,348 62,105 Wind River Systems Inc./(1)/ 4,235 60,730 Powerwave Technologies Inc./(1)/ 3,955 60,512 Varian Semiconductor Equipment Associates Inc./(1)/ 1,982 59,539 Maxtor Corp./(1)/ 12,112 59,349 Mercury Computer Systems Inc./(1)(2)/ 1,231 58,054 Foundry Networks Inc./(1)/ 5,889 57,477 Advanced Digital Information Corp./(1)/ 3,843 57,414 Amphenol Corp. "A"/(1)/ 1,282 57,113 Fair Isaac and Co. Inc. 1,155 54,920 Macromedia Inc./(1)/ 3,637 54,410 GlobeSpan Inc./(1)(2)/ 4,535 54,239 Exar Corp./(1)/ 2,405 54,209 Black Box Corp./(1)(2)/ 1,203 54,171 Kopin Corp./(1)/ 4,017 50,574 Sycamore Networks Inc./(1)/ 11,455 50,517 Williams Communications Group Inc./(1)/ 30,198 50,431 Credence Systems Corp./(1)/ 3,664 49,830 Sonus Networks Inc./(1)/ 11,794 49,653 Plantronics Inc./(1)/ 2,366 49,165 LTX Corp./(1)(2)/ 2,918 48,030 Avocent Corporation/(1)/ 2,564 47,844 Ariba Inc./(1)/ 14,415 47,569 Rambus Inc./(1)/ 5,818 47,300 Cirrus Logic Inc./(1)/ 4,186 46,590 Interwoven Inc./(1)/ 6,335 46,309 Legato Systems Inc./(1)/ 5,494 46,095 Infocus Corp./(1)(2)/ 2,376 45,999 SonicWALL Inc./(1)/ 3,185 45,227 Kulicke & Soffa Industries Inc./(1)(2)/ 2,957 44,858 Elantec Semiconductor Inc./(1)/ 1,365 44,622 Virata Corp./(1)/ 3,691 44,218 Silicon Storage Technology Inc./(1)/ 4,900 43,855 Terayon Communications Systems Inc./(1)(2)/ 3,817 43,323 SanDisk Corp./(1)/ 3,948 43,191 Commerce One Inc./(1)/ 17,216 43,040 Keane Inc./(1)/ 3,002 42,508 Photronics Inc./(1)/ 1,705 42,318 Micromuse Inc./(1)(2)/ 4,504 41,662 Concurrent Computer Corp./(1)/ 3,383 39,716 RSA Security Inc./(1)(2)/ 3,269 39,359 Borland Software Corp./(1)/ 3,482 38,964 - -------------------------------------------------------------------------------- iShares Schedules of Investments page 75 iShares Dow Jones U.S. Technology Sector Index Fund Schedule of Investments (Continued) October 31, 2001 (Unaudited) Security Shares Value - ------------------------------------------------------------------------------ Common Stocks (Continued) - ------------------------------------------------------------------------------ Informatica Corp./(1)/ 4,174 $38,693 Redback Networks Inc./(1)/ 9,551 38,300 Power Integrations Inc./(1)/ 1,640 37,736 Corvis Corp./(1)/ 16,679 37,528 ONI Systems Inc./(1)/ 7,672 37,516 HNC Software Inc./(1)/ 2,143 37,074 Liberate Technologies Inc./(1)/ 3,742 36,971 RealNetworks Inc./(1)/ 6,515 36,940 Western Digital Corp./(1)/ 10,959 36,713 Read-Rite Corp./(1)/ 7,009 34,905 Documentum Inc./(1)/ 2,335 34,488 Cable Design Technologies Corp./(1)/ 2,691 34,391 Silicon Laboratories Inc./(1)(2)/ 1,397 34,087 TIBCO Software Inc./(1)/ 4,032 34,030 S1 Corp./(1)/ 3,247 33,769 ATMI Inc./(1)/ 1,760 33,546 Inktomi Corp./(1)/ 7,879 33,486 Red Hat Inc./(1)/ 7,031 33,186 Edwards (J.D.) & Co./(1)/ 4,651 32,976 Brooks Automation Inc./(1)(2)/ 1,004 32,409 FileNET Corp./(1)/ 2,169 31,602 Quest Software Inc./(1)/ 2,095 31,006 ADTRAN Inc./(1)/ 1,328 30,810 Oak Technology Inc./(1)/ 3,081 30,779 DSP Group Inc./(1)/ 1,464 30,744 Intergraph Corp./(1)/ 2,780 29,746 Hyperion Solutions Corp./(1)/ 1,948 29,220 Echelon Corp./(1)(2)/ 2,074 28,206 Harmonic Inc./(1)/ 3,488 28,148 BroadVision Inc./(1)(2)/ 13,523 27,587 ANADIGICS Inc./(1)/ 1,834 27,253 Manugistics Group Inc./(1)/ 3,505 26,988 DMC Stratex Networks Inc./(1)/ 4,938 26,912 Computer Network Technology Corp./(1)/ 1,843 26,908 Actel Corp./(1)/ 1,448 26,860 Zoran Corp./(1)/ 1,055 26,681 Loral Space & Communications Ltd./(1)/ 20,503 26,449 Trimble Navigation Ltd./(1)/ 1,497 26,347 InterDigital Communications Corp./(1)/ 3,270 26,225 DuPont Photomasks Inc./(1)/ 714 25,733 E.piphany Inc./(1)(2)/ 4,359 25,718 webMethods Inc./(1)(2)/ 2,778 25,530 Aspen Technology Inc./(1)(2)/ 1,889 25,029 PRI Automation Inc./(1)/ 1,507 $24,775 Agile Software Corp./(1)/ 2,554 24,314 Stellent Inc./(1)(2)/ 1,183 24,252 InterVoice-Brite Inc./(1)/ 1,920 23,923 Hutchinson Technology Inc./(1)/ 1,312 23,852 PanAmSat Corp./(1)/ 1,107 23,446 Avant! Corp./(1)/ 2,317 23,425 Systems & Computer Technology Corp./(1)/ 1,885 23,091 Micros Systems Inc./(1)/ 1,068 23,058 Verity Inc./(1)/ 2,113 22,440 Netegrity Inc./(1)(2)/ 1,878 22,048 JDA Software Group Inc./(1)/ 1,381 21,682 Iomega Corp./(1)/ 3,066 21,431 Sapient Corp./(1)/ 4,963 21,391 Transaction Systems Architects Inc. "A"/(1)/ 2,196 21,345 SBA Communications Corp./(1)/ 2,563 21,017 ESS Technology Inc./(1)/ 1,625 20,849 Arris Group Inc./(1)/ 3,538 20,839 MRV Communications Inc./(1)/ 4,727 20,515 SERENA Software Inc./(1)/ 1,252 20,232 Benchmark Electronics Inc./(1)/ 1,179 20,102 Cohu Inc. 1,138 19,858 Asyst Technologies Inc./(1)/ 2,158 19,638 Spectrasite Holdings Inc./(1)/ 8,320 19,136 McDATA Corp. "B"/(1)/ 1,177 18,444 Silicon Graphics Inc./(1)/ 10,544 18,347 Inter-Tel Inc. 1,158 17,578 Transwitch Corp./(1)/ 5,202 17,219 Vitria Technology Inc./(1)/ 5,539 16,839 Emcore Corp./(1)/ 1,507 16,818 Integrated Silicon Solution Inc./(1)/ 1,557 16,177 Stratos Lightwave Inc./(1)/ 3,919 16,068 F5 Networks Inc./(1)(2)/ 1,060 15,995 Ultratech Stepper Inc./(1)/ 1,146 15,414 Portal Software Inc./(1)/ 7,730 14,687 Electroglas Inc./(1)/ 1,172 14,685 Nuance Communications Inc./(1)(2)/ 1,749 14,114 Matrixone Inc./(1)/ 2,543 13,986 AXT Inc./(1)/ 1,269 13,857 Actuate Corp./(1)/ 3,308 13,728 C-COR.net Corp./(1)/ 1,965 13,460 Roxio Inc./(1)/ 1,020 13,087 Alliance Semiconductor Corp./(1)/ 1,581 13,043 Entrust Technologies Inc./(1)/ 2,857 12,856 WatchGuard Technologies Inc./(1)/ 1,414 12,797 - -------------------------------------------------------------------------------- page 76 i|Shares iShares Dow Jones U.S. Technology Sector Index Fund Schedule of Investments (continued) October 31, 2001 (unaudited)
Security Shares Value - ------------------------------------------------------------------- COMMON STOCKS (continued) - ------------------------------------------------------------------- MRO Software Inc./(1)/ 960 $ 12,672 RadiSys Corp./(1)/ 913 12,572 OpenTV Corp./(1)/ 1,647 12,122 SpeechWorks International Inc./(1)/ 1,576 11,820 M-Systems Flash Disk Pioneers Ltd./(1)/ 1,639 11,801 Metasolv Inc./(1)/ 1,656 11,592 Proxim Inc./(1)/ 1,679 11,367 SeeBeyond Technology Corp./(1)/ 2,326 11,351 FSI International Inc./(1)/ 1,370 11,261 New Focus Inc./(1)/ 3,832 11,113 Allen Telecom Inc./(1)/ 1,448 10,860 Transmeta Corp./(1)/ 6,073 10,749 Centillium Communications Inc./(1)/ 1,841 10,383 Oplink Communications Inc./(1)/ 7,377 9,959 Infonet Services Corp. "B" ADR/(1)/ 4,670 9,807 Clarent Corp./(1)/ 1,810 9,720 Viewpoint Corp./(1)/ 2,359 9,436 PLX Technology Inc./(1)/ 1,179 9,137 Avanex Corp./(1)/ 1,842 9,136 Siliconix Inc./(1)/ 355 8,957 HI/FN Inc./(1)/ 623 8,953 Standard Microsystems Corp./(1)/ 879 8,790 Netro Corp./(1)/ 2,161 8,320 Kana Communications Inc./(1)/ 9,363 8,239 PC-Tel Inc./(1)/ 1,067 8,131 Symmetricom Inc./(1)/ 1,448 8,109 Handspring Inc./(1)/ 4,038 7,914 Sanchez Computer Associates Inc./(1)/ 863 7,767 Ditech Communications Corp./(1)/ 1,804 7,505 ZixIt Corp./(1)(2)/ 884 7,399 Wave Systems Corp. "A"/(1)/ 3,081 7,025 Aspect Communications Corp./(1)/ 3,048 6,828 UAXS Global Holdings Inc./(1)/ 3,112 6,660 AudioCodes Ltd./(1)/ 2,408 6,429 Internap Network Services Corp./(1)/ 7,692 6,307 Aware Inc./(1)/ 1,231 5,687 Viasystems Group Inc./(1)/ 4,365 5,631 Art Technology Group Inc./(1)/ 3,424 5,581 Microstrategy Inc./(1)/ 1,973 5,426 Allscripts Healthcare Solutions Inc./(1)/ 1,673 5,404 NMS Communications Corp./(1)(2)/ 2,288 5,285 Avici Systems Inc./(1)/ 1,893 5,092 Packeteer Inc./(1)/ 1,458 4,957 SONICblue Inc./(1)/ 4,622 $ 4,899 Digital Lightwave Inc./(1)(2)/ 778 4,691 ON Semiconductor Corp./(1)/ 2,913 4,195 Silicon Image Inc./(1)/ 3,300 4,191 SilverStream Software Inc./(1)/ 962 3,944 Auspex Systems Inc./(1)/ 2,109 3,796 CacheFlow Inc./(1)/ 1,843 3,704 Copper Mountain Networks Inc./(1)/ 3,205 3,686 Clarus Corp./(1)/ 885 2,929 - ------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $184,422,565) 101,412,475 - ------------------------------------------------------------------- SHORT TERM INSTRUMENTS - 6.68% - ------------------------------------------------------------------- Barclays Global Investors Funds, Inc. Institutional Money Market Fund, Institutional Shares/(3)/ 2,847,027 2,847,027 Dreyfus Money Market Fund/(3)/ 1,437,702 1,437,702 Goldman Sachs Financial Square Prime Obligation Fund/(3)/ 989,308 989,308 Providian Temp Cash Money Market Fund/(3)/ 1,500,211 1,500,211 - ------------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $6,774,248) 6,774,248 - ------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 106.72% (Cost $191,196,813) 108,186,723 - ------------------------------------------------------------------- Other Assets, Less Liabilities -- (6.72%) (6,809,904) - ------------------------------------------------------------------- NET ASSETS -- 100.00% $101,376,819 ===================================================================
/(1)/ Non-income earning securities. /(2)/ Denotes all or part of security on loan. See Note 5. /(3)/ Security or portion of security represents investment of collateral received from securities lending transactions. See Note 5. See notes to financial statements. - -------------------------------------------------------------------------------- iShares Schedules of Investments page 77 iShares Dow Jones U.S. Telecommunications Sector Index Fund Schedule of Investments October 31, 2001 (unaudited)
Security Shares Value - ---------------------------------------------------------------------- COMMON STOCKS - 99.65% - ---------------------------------------------------------------------- Verizon Communications Inc. 153,838 $ 7,662,671 SBC Communications Inc. 144,067 5,490,393 AT&T Corp. 160,805 2,452,276 BellSouth Corp. 53,967 1,996,779 Alltel Corp. 34,623 1,978,358 WorldCom Inc./(1)/ 138,842 1,867,425 CenturyTel Inc. 58,285 1,841,806 Telephone & Data Systems Inc. 20,859 1,833,506 Sprint Corp. (FON Group) 82,147 1,642,940 Sprint Corp. (PCS Group)/(1)(2)/ 71,523 1,594,963 United States Cellular Corp./(1)/ 32,865 1,467,422 Citizen Communications Co./(1)(2)/ 152,322 1,354,143 AT&T Wireless Services Inc./(1)/ 64,869 936,708 Qwest Communications International Inc. 69,427 899,080 Western Wireless Corp. "A"/(1)/ 24,776 722,716 Nextel Communications Inc. "A"/(1)(2)/ 72,570 576,932 Rural Cellular Corp. "A"/(1)/ 21,555 489,514 Broadwing Inc./(1)/ 52,784 488,780 AirGate PCS Inc./(1)/ 4,661 239,855 IDT Corp./(1)/ 20,770 229,509 IDT Corp. "B"/(1)/ 20,770 206,662 TeleCorp PCS Inc./(1)/ 15,163 203,487 Triton PCS Holdings Inc. "A"/(1)/ 5,526 177,827 Time Warner Telecom Inc. "A"/(1)/ 13,838 151,664 Allegiance Telecom Inc./(1)/ 18,775 134,804 RCN Corp./(1)/ 33,562 105,720 Wireless Facilities Inc./(1)/ 13,170 86,790 WorldCom Inc.- MCI Group 7,012 83,092 Nextel Partners Inc. "A"/(1)/ 14,302 76,516 Leap Wireless International Inc./(1)/ 4,793 71,272 ITC DeltaCom Inc./(1)/ 86,174 56,013 McLeodUSA Inc. "A"/(1)/ 53,112 39,834 Network Plus Corp./(1)/ 39,044 39,044 XO Communications Inc. "A"/(1)/ 28,289 26,026 Aether Systems Inc./(1)/ 3,104 21,635 Metromedia Fiber Network Inc. "A"/(1)/ 18,205 13,108 - ---------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $51,425,774) 37,259,270 - ---------------------------------------------------------------------- SHORT TERM INSTRUMENTS - 7.43% - ---------------------------------------------------------------------- Barclays Global Investors Funds, Inc. Institutional Money Market Fund, Institutional Shares(3) 1,169,067 $ 1,169,067 Dreyfus Money Market Fund(3) 589,300 589,300 Goldman Sachs Financial Square Prime Obligation Fund(3) 405,508 405,508 Providian Temp Cash Money Market Fund(3) 614,922 614,922 - ---------------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $2,778,797) 2,778,797 - ---------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 107.08% (Cost $54,204,571) 40,038,067 - ---------------------------------------------------------------------- Other Assets, Less Liabilities -- (7.08%) (2,648,470) - ---------------------------------------------------------------------- NET ASSETS -- 100.00% $ 37,389,597 ======================================================================
/(1)/ Non-income earning securities. /(2)/ Denotes all or part of security on loan. See Note 5. /(3)/ Security or portion of security represents investment of collateral received from securities lending transactions. See Note 5. See notes to financial statements. - -------------------------------------------------------------------------------- page 78 i|Shares iShares Dow Jones U.s. Utilities Sector Index Fund Schedule of Investments October 31, 2001 (unaudited) Security Shares Value - ------------------------------------------------------------------- COMMON STOCKS - 99.87% - ------------------------------------------------------------------- Duke Energy Corp. 70,179 $2,695,575 Southern Co. 62,880 1,502,832 Dominion Resources Inc. 22,715 1,388,341 American Electric Power Inc. 29,539 1,237,684 Exelon Corp. 29,238 1,230,043 TXU Corporation 23,700 1,086,408 Enron Corp. 67,843 943,018 Xcel Energy Inc. 31,504 890,933 FPL Group Inc. 16,143 857,193 Progress Energy Inc. 19,932 840,532 Mirant Corp./(1)/ 31,088 808,288 Entergy Corp. 20,163 783,333 Consolidated Edison Inc. 19,467 768,752 Public Service Enterprise Group Inc. 19,095 751,579 FirstEnergy Corp./(2)/ 20,566 708,704 Calpine Corp./(1)/ 27,990 692,752 Reliant Energy Inc. 24,109 673,847 PG&E Corp. 35,542 641,889 DTE Energy Co. 15,340 639,525 AES Corp./(1)/ 42,260 585,301 Dynegy Inc. "A" 14,885 534,371 Ameren Corp. 12,603 505,380 PPL Corp. 13,335 455,390 NiSource Inc. 18,950 450,063 Cinergy Corp. 14,595 440,477 Sempra Energy 18,775 439,335 GPU Inc. 11,044 437,895 Edison International/(1)/ 29,905 424,950 Allegheny Energy Inc. 11,454 418,644 KeySpan Corp. 12,614 418,533 Constellation Energy Group Inc. 15,035 336,333 American Water Works Inc. 8,219 333,691 Pinnacle West Capital Corp. 7,784 328,096 TECO Energy Inc. 12,451 320,613 Utilicorp United Inc. 10,421 308,774 DPL Inc. 11,720 269,560 Niagara Mohawk Holdings Inc./(1)/ 14,711 263,621 CMS Energy Corp. 12,007 258,271 SCANA Corp. 9,609 247,432 Wisconsin Energy Corp. 10,807 240,023 Northeast Utilities 12,286 216,848 Potomac Electric Power Co. 9,984 213,757 Alliant Energy Corp./(2)/ 7,265 $ 213,591 Energy East Corp. 10,673 200,866 NSTAR 4,874 200,419 Equitable Resources Inc. 5,994 197,263 Conectiv Inc. 7,597 179,289 National Fuel Gas Co. 7,238 169,442 Orion Power Holdings Inc./(1)/ 6,352 163,945 Questar Corp. 7,380 162,360 NICOR Inc. 4,167 162,055 OGE Energy Corp./(2)/ 7,134 154,522 MDU Resources Group Inc. 6,241 151,719 ALLETE 6,815 149,930 Puget Energy Inc. 7,844 149,585 Great Plains Energy Inc./(2)/ 5,688 135,716 Sierra Pacific Resources Corp. 9,079 131,736 Vectren Corporation 6,222 131,471 IDACorp Inc. 3,439 130,682 Peoples Energy Corp. 3,253 124,557 RGS Energy Group Inc. 3,177 121,838 WGL Holdings Inc. 4,468 120,904 Philadelphia Suburban Corp. 4,137 117,905 Hawaiian Electric Industries Inc. 2,981 110,953 DQE Inc. 5,141 96,137 AGL Resources Inc. 4,573 94,432 Piedmont Natural Gas Co. 2,920 92,856 Public Service Company of New Mexico 3,594 88,053 Western Resources Inc. 5,142 84,226 Southern Union Co./(1)/ 4,393 83,818 Cleco Corp. 4,115 82,753 NRG Energy Inc./(1)(2)/ 4,676 82,625 ONEOK Inc. 4,420 76,112 Black Hills Corp. 2,428 66,673 El Paso Electric Co./(1)/ 4,723 64,233 Covanta Energy Corporation/(1)/ 4,571 59,514 Montana Power Co./(1)/ 9,500 56,620 Northwest Natural Gas Co. 2,317 55,376 Avista Corp. 4,337 52,001 UniSource Energy Corp. 3,074 48,446 NUI Corp. 1,200 24,420 Catalytica Energy Systems Inc./(1)/ 1,425 8,977 - ------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $42,159,617) 32,186,606 - ------------------------------------------------------------------- - -------------------------------------------------------------------------------- iShares Schedules of Investments page 79 iShares Dow Jones U.S. Utilities Sector Index Fund Schedule of Investments (continued) October 31, 2001 (Unaudited) Security Shares Value - --------------------------------------------------------------------- SHORT TERM INSTRUMENTS - 4.09% - --------------------------------------------------------------------- Barclays Global Investors Funds, Inc. Institutional Money Market Fund, Institutional Shares/(3)/ 553,149 $ 553,149 Dreyfus Money Market Fund/(3)/ 280,170 280,170 Goldman Sachs Financial Square Prime Obligation Fund/(3)/ 192,789 192,789 Providian Temp Cash Money Market Fund/(3)/ 292,351 292,351 - --------------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $1,318,459) 1,318,459 - --------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 103.96% (Cost $43,478,076) 33,505,065 - --------------------------------------------------------------------- Other Assets, Less Liabilities -- (3.96%) (1,277,306) - --------------------------------------------------------------------- NET ASSETS -- 100.00% $ 32,227,759 ===================================================================== /(1)/ Non-income earning securities. /(2)/ Denotes all or part of security on loan. See Note 5. /(3)/ Security or portion of security represents investment of collateral received from securities lending transactions. See Note 5. See notes to financial statements. - -------------------------------------------------------------------------------- page 80 i|Shares iShares Dow Jones U.S. Chemicals Index Fund Schedule of Investments October 31, 2001 (Unaudited) Security Shares Value - ----------------------------------------------------------------- COMMON STOCKS - 99.94% - ----------------------------------------------------------------- Du Pont (E.I.) de Nemours 34,476 $1,378,695 Dow Chemical Co. 30,881 1,026,793 Air Products & Chemicals Inc. 8,462 338,819 Praxair Inc. 5,950 280,721 Avery Dennison Corp. 4,910 227,333 Ecolab Inc. 5,351 188,248 Engelhard Corp. 7,183 188,051 Rohm & Haas Co. "A" 5,492 178,325 International Flavors & Fragrances Inc. 5,492 156,577 Sigma-Aldrich Corp. 4,048 151,881 Eastman Chemical Co. 4,135 141,872 Cabot Corp. 3,859 129,277 Lubrizol Corp. 4,342 122,184 OM Group Inc. 1,853 112,199 RPM Inc. 8,522 103,542 Cytec Industries Inc./(1)/ 3,448 82,511 Great Lakes Chemical Corp. 3,775 80,068 Lyondell Chemical Co. 5,791 77,078 Cambrex Corp. 2,069 76,553 Ferro Corp. 3,418 75,196 Cabot Microelectronics Corp./(1)/ 1,132 75,029 Fuller (H. B.) Co. 1,450 74,574 Solutia Inc. 5,799 69,588 IMC Global Inc. 5,655 60,791 Olin Corp. 3,880 58,122 Millennium Chemicals Inc. 6,091 58,047 Crompton Corp. 7,546 54,709 Hercules Inc./(1)/ 5,120 38,707 WD-40 Company 1,664 37,473 Wellman Inc. 2,469 31,134 MacDermid Inc. 1,351 18,401 Schulman (A.) Inc. 1,192 14,185 Georgia Gulf Corp. 642 11,408 - ----------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $6,138,595) 5,718,091 - ----------------------------------------------------------------- SHORT TERM INSTRUMENTS - 0.05% - ----------------------------------------------------------------- Barclays Global Investors Funds, Inc. Institutional Money Market Fund, Institutional Shares 2,881 $ 2,881 - ----------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $2,881) 2,881 - ----------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 99.99% (Cost $6,141,476) 5,720,972 - ----------------------------------------------------------------- Other Assets, Less Liabilities -- 0.01% 650 - ----------------------------------------------------------------- NET ASSETS -- 100.00% $5,721,622 ================================================================= /(1)/ Non-income earning securities. See notes to financial statements. - -------------------------------------------------------------------------------- iShares Schedules of Investments page 81 iShares Dow Jones U.S. Financial Services Index Fund Schedule of Investments October 31, 2001 (Unaudited)
Security Shares Value - -------------------------------------------------------------- COMMON STOCKS-99.87% - -------------------------------------------------------------- Citigroup Inc. 116,628 $5,308,907 Bank of America Corp. 36,306 2,141,691 Fannie Mae 23,035 1,864,914 JP Morgan Chase & Co. 44,859 1,586,214 Wells Fargo & Company 38,622 1,525,569 Morgan Stanley Dean Witter & Co. 23,017 1,125,992 Freddie Mac 15,742 1,067,622 Wachovia Corp. 31,630 904,618 Bank One Corp. 26,114 866,724 FleetBoston Financial Corp. 24,447 803,328 U.S. Bancorp 44,245 786,676 American Express Co. 26,636 783,897 Merrill Lynch & Co. Inc. 17,871 781,141 Fifth Third Bancorp 10,976 619,266 Marsh & McLennan Companies Inc. 6,226 602,365 Washington Mutual Inc. 19,832 598,728 Bank of New York Co. Inc. 16,732 569,055 Household International Inc. 10,481 548,156 MBNA Corp. 17,017 469,839 Goldman Sachs Group Inc. (The) 4,897 382,750 Mellon Financial Corp. 10,783 362,309 PNC Financial Services Group 6,544 359,266 SunTrust Banks Inc. 5,691 340,663 Lehman Brothers Holdings Inc. 5,444 340,032 State Street Corp. 7,367 335,493 BB&T Corp. 9,584 307,646 National City Corp. 11,651 307,586 Schwab (Charles) Corp. 23,792 306,441 USA Education Inc. 3,627 295,818 Northern Trust Corp. 4,714 238,010 Hancock (John) Financial Services Inc. 6,961 237,231 KeyCorp 9,622 204,564 Capital One Financial Corp. 4,709 194,529 Comerica Inc. 4,003 184,498 SouthTrust Corp. 7,708 174,663 Golden West Financial Corp. 3,057 148,570 AmSouth Bancorp 8,369 144,700 Regions Financial Corp. 5,141 138,344 M&T Bank Corp. 2,074 135,847 Charter One Financial Inc. 4,948 134,833 Marshall & Ilsley Corp. 2,253 132,116 Union Planters Corp. 3,098 125,469 Bear Stearns Companies Inc. 2,287 123,498 Synovus Financial Corp. 5,033 115,860 Franklin Resources Inc. 3,354 107,663 Countrywide Credit Industries Inc. 2,676 106,853 National Commerce Financial Corp. 4,638 105,514 North Fork Bancorp 3,656 102,002 First Tennessee National Corp. 2,901 100,230 Zions Bancorp 2,082 99,769 Stilwell Financial Inc. 4,956 99,665 Dime Bancorp Inc. 2,652 89,850 Huntington Bancshares Inc. 5,672 87,519 Popular Inc. 2,631 77,272 T Rowe Price Group Inc. 2,775 77,034 Banknorth Group Inc. 3,459 75,856 Compass Bancshares Inc. 2,893 72,412 Edwards (A.G.) Inc. 1,805 71,370 TCF Financial Corp. 1,679 70,518 Bisys Group Inc./(1)(2)/ 1,313 68,302 Golden State Bancorp Inc. 2,599 65,911 Greenpoint Financial Corp. 1,939 62,145 Legg Mason Inc. 1,440 60,638 Mercantile Bankshares Corp. 1,576 60,235 Astoria Financial Corp. 1,106 57,612 Federated Investors Inc. "B" 2,200 57,420 Sovereign Bancorp Inc. 5,577 55,212 SEI Investment Co. 1,790 55,043 Hibernia Corp. "A" 3,592 54,598 Commerce Bancorp Inc. 728 53,144 Valley National Bancorp 1,764 52,726 New York Community Bancorp 2,025 50,767 First Virginia Banks Inc. 1,091 49,291 Associated Bancorp 1,393 47,947 Allied Capital Corp. 2,065 46,504 Waddell & Reed Financial Inc. "A" 1,801 45,907 Investment Technology Group Inc./(1)/ 712 45,860 Neuberger Berman Inc. 1,296 45,204 FirstMerit Corp. 1,933 44,614 Commerce Bancshares Inc. 1,227 44,503 Pacific Century Financial Corp. 1,802 41,987 BancWest Corporation 1,201 41,975 Wilmington Trust Corp. 731 41,521 Fulton Financial Corp. 1,866 40,903 UnionBanCal Corporation 1,200 40,068 E*trade Group Inc./(1)(2)/ 6,084 39,729 City National Corp. 926 37,966 Investors Financial Services Corp. 717 37,929 Eaton Vance Corp. 1,314 36,923 IndyMac Bancorp Inc./(1)/ 1,379 35,413 Roslyn Bancorp Inc. 1,937 35,157 Sky Financial Group Inc. 1,687 33,622 Webster Financial Corp. 1,105 33,537 Doral Financial Corp. 931 32,464
- -------------------------------------------------------------------------------- page 82 i|Shares iShares Dow Jones U.S. Financial Services Index Fund Schedule of Investments (continued) October 31, 2001 (Unaudited) Security Shares Value - ---------------------------------------------------------------- COMMON STOCKS (continued) - ---------------------------------------------------------------- Labranche & Co. Inc./(1)(2)/ 1,113 $ 32,155 Cullen/Frost Bankers Inc. 1,170 31,543 Old National Bancorp 1,265 31,296 Affiliated Managers Group Inc./(1)/ 502 30,973 Trustmark Corp. 1,286 30,813 Colonial BancGroup Inc. 2,417 30,454 Independence Community Bank Corp. 1,215 29,549 Westamerica Bancorp 805 29,415 Washington Federal Inc. 1,297 29,377 AmeriCredit Corp./(1)(2)/ 1,870 28,985 First Midwest Bancorp Inc. 849 28,374 Commercial Federal Corp. 1,130 28,205 Hudson United Bancorp 1,061 27,575 Citizens Banking Corp. 899 27,258 Bancorp South Inc. 1,771 27,096 Raymond James Financial Inc. 916 26,775 Silicon Valley Bancshares/(1)/ 1,115 26,136 Greater Bay Bancorp/(2)/ 1,118 25,479 Providian Financial Corp. 6,456 25,114 Knight Trading Group Inc./(1)/ 2,451 24,093 Park National Corp. 256 23,488 United Bancshares Inc. 858 23,338 Metris Companies Inc./(2)/ 1,424 23,083 Community First Bankshares Inc. 930 22,339 Hudson City Bancorp Inc. 943 22,198 Whitney Holding Corp. 561 22,025 Southwest Bancorp of Texas Inc./(1)/ 703 20,169 American Capital Strategies Ltd. 762 18,875 Chittenden Corp. 726 17,961 Staten Island Bancorp Inc. 616 17,827 TD Waterhouse Group Inc./(1)/ 1,862 17,633 Total System Services Inc. 841 16,988 Downey Financial Corp. 474 16,656 Republic Bancorp Inc. 1,121 16,535 Ameritrade Holding Corp. "A"/(1)(2)/ 2,915 16,032 Jeffries Group Inc. 473 15,689 South Financial Group Inc. (The) 962 15,344 Provident Financial Group Inc. 692 14,816 MAF Bancorp Inc. 510 14,280 AMCORE Financial Inc. 587 12,861 Provident Bankshares Corp. 582 12,816 W.P. Stewart & Co. Ltd. 596 12,593 UCBH Holdings Inc. 434 12,586 People's Bank 561 12,219 Texas Regional Bancshares "A" 335 11,223 East West Bancorp Inc. 492 11,114 Sterling Bancshares Inc. 888 10,576 CMGI Inc./(1)/ 6,056 9,145 Bay View Capital Corp./(1)/ 1,239 8,710 Harbor Florida Bancshares Inc. 517 8,660 FirstFed Financial Corp./(1)/ 389 8,651 Dime Community Bancshares 330 8,003 First Sentinel Bancorp Inc. 662 7,977 Ocwen Financial Corp./(1)/ 898 7,723 Anchor BanCorp Wisconsin Inc. 488 7,686 PFF Bancorp Inc. 299 7,475 GBC Bancorp 265 7,372 Pacific Northwest Bancorp 350 7,072 Southwest Securities Group Inc./(2)/ 367 6,423 Net.B@nk Inc./(1)/ 684 5,629 Safeguard Scientifics Inc./(1)/ 2,434 5,355 BSB Bancorp Inc. 226 5,035 Internet Capital Group Inc./(1)/ 5,047 4,542 OceanFirst Financial Corp. 174 4,251 Medallion Financial Corp. 411 3,350 CompuCredit Corp./(1)/ 382 2,349 NextCard Inc./(1)/ 894 778 - ---------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $39,111,983) 32,869,857 - ---------------------------------------------------------------- SHORT TERM INSTRUMENTS - 0.70% - ---------------------------------------------------------------- Barclays Global Investors Funds, Inc. Institutional Money Market Fund, Institutional Shares/(3)/ 111,861 111,861 Dreyfus Money Market Fund/(3)/ 43,793 43,793 Goldman Sachs Financial Square Prime Obligation Fund/(3)/ 30,136 30,136 Providian Temp Cash Money Market Fund/(3)/ 45,697 45,697 - ---------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $231,487) 231,487 - ---------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 100.57% (Cost $39,343,470) 33,101,344 - ---------------------------------------------------------------- Other Assets, Less Liabilities -- (0.57%) (186,661) - ---------------------------------------------------------------- NET ASSETS -- 100.00% $32,914,683 ================================================================ /(1)/ Non-income earning securities. /(2)/ Denotes all or part of security on loan. See Note 5. /(3)/ Security or portion of security represents investment of collateral received from securities lending transactions. See Note 5. See notes to financial statements. - -------------------------------------------------------------------------------- iShares Schedules of Investments page 83 iShares Dow Jones U.S. Internet Index Fund Schedule of Investments October 31, 2001 (unaudited) Security Shares Value - ------------------------------------------------------------------ COMMON STOCKS-100.03% - ------------------------------------------------------------------ Check Point Software Technologies Ltd./(1)/ 44,369 $ 1,309,773 eBay Inc./(1)/ 24,497 1,285,603 BEA Systems Inc./(1)/ 102,870 1,248,842 VeriSign Inc./(1)/ 27,582 1,067,699 Yahoo! Inc./(1)/ 93,021 1,012,068 TMP Worldwide Inc./(1)/ 17,483 521,868 EarthLink Inc./(1)/ 31,941 467,936 E*trade Group Inc./(1)/ 70,533 460,580 Amazon.com Inc./(1)(2)/ 62,045 433,074 WebMD Corp./(1)/ 76,468 350,988 i2 Technologies Inc./(1)/ 75,209 342,953 Vignette Corp./(1)/ 64,142 300,185 CheckFree Corp./(1)/ 21,015 295,891 Ticketmaster Online-CitySearch Inc. "B"/(1)/ 21,135 288,281 Internet Security Systems Inc./(1)/ 10,274 271,747 Overture Services Inc./(1)/ 10,272 270,667 DoubleClick Inc./(1)/ 32,912 242,891 Macromedia Inc./(1)/ 15,386 230,175 Ariba Inc./(1)/ 62,550 206,415 Interwoven Inc./(1)/ 26,826 196,098 Commerce One Inc./(1)/ 75,175 187,937 Ameritrade Holding Corp. "A"/(1)(2)/ 33,834 186,087 RealNetworks Inc./(1)/ 27,665 156,860 CNET Networks Inc./(1)/ 30,504 150,690 TIBCO Software Inc./(1)/ 17,046 143,868 Inktomi Corp./(1)/ 33,353 141,750 FreeMarkets Inc./(1)/ 9,595 128,285 BroadVision Inc./(1)/ 57,969 118,257 Homestore.com Inc./(1)/ 22,864 117,521 webMethods Inc./(1)/ 12,165 111,796 Agile Software Corp./(1)/ 11,205 106,672 CMGI Inc./(1)/ 70,113 105,871 Priceline.com Inc./(1)/ 21,441 103,131 InfoSpace Inc./(1)/ 62,614 98,930 Akamai Technologies Inc./(1)/ 22,760 71,922 Portal Software Inc./(1)/ 32,713 62,155 Internet Capital Group Inc./(1)/ 58,437 52,593 VerticalNet Inc./(1)/ 18,594 25,846 Art Technology Group Inc./(1)/ 14,355 23,399 NextCard Inc./(1)/ 10,360 9,013 - ------------------------------------------------------------------ TOTAL COMMON STOCKS (Cost: $28,993,573) 12,906,317 - ------------------------------------------------------------------ SHORT TERM INSTRUMENTS - 3.17% - ------------------------------------------------------------------ Barclays Global Investors Funds, Inc. Institutional Money Market Fund, Institutional Shares/(3)/ 173,206 $ 173,206 Dreyfus Money Market Fund/(3)/ 86,503 86,503 Goldman Sachs Financial Square Prime Obligation Fund/(3)/ 59,523 59,523 Providian Temp Cash Money Market Fund/(3)/ 90,264 90,264 - ------------------------------------------------------------------ TOTAL SHORT TERM INSTRUMENTS (Cost: $409,496) 409,496 - ------------------------------------------------------------------ TOTAL INVESTMENTS IN SECURITIES -- 103.20% (Cost $29,403,069) 13,315,813 - ------------------------------------------------------------------ Other Assets, Less Liabilities -- (3.20%) (412,655) - ------------------------------------------------------------------ NET ASSETS -- 100.00% $ 12,903,158 ================================================================== /(1)/ Non-income earning securities. /(2)/ Denotes all or part of security on loan. See Note 5. /(3)/ Security or portion of security represents investment of collateral received from securities lending transactions. See Note 5. See notes to financial statements. - -------------------------------------------------------------------------------- page 84 i|Shares iShares Dow Jones U.S. Real Estate Index Fund Schedule of Investments October 31, 2001 (unaudited) Security Shares Value - -------------------------------------------------------------------- COMMON STOCKS - 99.79% - -------------------------------------------------------------------- Equity Office Properties Trust 205,405 $ 5,854,043 Equity Residential Properties Trust 133,682 3,469,048 Plum Creek Timber Co. Inc./(2)/ 89,100 2,461,833 Archstone-Smith Trust 82,831 2,004,510 Simon Property Group Inc. 70,148 1,929,070 Prologis Trust 87,049 1,734,887 Apartment Investment & Management Co. "A" 36,713 1,540,845 Boston Properties Inc. 42,507 1,502,622 AvalonBay Communities Inc. 32,032 1,454,253 Kimco Realty Corp. 29,307 1,432,819 Vornado Realty Trust 36,063 1,413,670 Duke-Weeks Realty Corp. 60,440 1,393,142 Public Storage Inc. 38,804 1,276,264 Health Care Property Investors Inc./(2)/ 27,662 1,029,580 AMB Property Corp. 42,103 1,023,524 Liberty Property Trust 36,454 976,967 Rouse Co./(2)/ 34,393 903,504 Crescent Real Estate Equities Co. 51,141 900,593 Mack-Cali Realty Corp. 28,476 882,756 General Growth Properties Inc./(2)/ 24,060 881,077 Security Capital Group "B"/(1)/ 42,619 796,975 Arden Realty Inc. 31,846 784,367 Host Marriott Corp./(2)/ 115,707 781,022 New Plan Excel Realty Trust 43,854 779,724 Weingarten Realty Investors 15,020 751,601 United Dominion Realty Trust 50,687 724,317 Hospitality Properties Trust 29,066 721,127 Catellus Development Corp./(1)/ 41,307 710,480 Camden Property Trust 20,310 706,788 BRE Properties Inc. "A" 23,179 672,191 Post Properties Inc. 19,410 659,164 Highwoods Properties Inc. 27,138 640,457 Healthcare Realty Trust 20,172 544,644 First Industrial Realty Trust 19,668 540,870 HRPT Properties Trust 66,012 537,998 Reckson Associates Realty Corp./(2)/ 22,572 519,156 CarrAmerica Realty Corp. 17,442 493,783 Centerpoint Properties Corp. 10,283 478,160 Cousins Properties Inc. 19,590 474,274 Nationwide Health Properties Inc. 23,635 465,610 Sl Green Realty Corp. 14,942 445,570 Developers Diversified Realty Corp. 24,477 445,481 Prentiss Properties Trust 17,232 437,693 Federal Realty Investment Trust 19,756 431,076 Shurgard Storage Centers Inc. "A" 13,985 420,389 Health Care REIT Inc. 16,202 419,632 St. Joe Company (The) 15,939 410,270 Macerich Co. (The) 16,887 $ 408,665 iStar Financial Inc. 16,491 384,240 La Quinta Properties Inc./(1)/ 71,780 384,023 FelCor Lodging Trust Inc./(2)/ 26,510 368,224 Chelsea Property Group Inc. 7,824 350,515 LNR Property Corp. 12,114 333,741 Brandywine Realty Trust 16,337 322,492 Kilroy Realty Corp. 13,608 318,563 CBL & Associates Properties Inc. 10,558 307,449 Storage USA Inc. 7,637 306,626 Manufactured Home Communities Inc. 9,742 297,618 Colonial Properties Trust 9,617 287,067 Home Properties of NY Inc. 8,936 273,531 Capital Automotive REIT 12,927 250,137 Mills Corp. 11,296 246,705 Koger Equity Inc. 13,405 223,729 Homestore.com Inc./(1)(2)/ 43,458 223,374 Glenborough Realty Trust Inc. 12,553 218,297 Meristar Hospitality Corp. 22,266 211,527 JDN Realty Corp. 15,039 159,714 Equity Inns Inc. 18,389 146,009 RFS Hotel Investors Inc. 12,465 115,301 - -------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $61,839,134) 55,995,373 - -------------------------------------------------------------------- SHORT TERM INSTRUMENTS - 10.01% - -------------------------------------------------------------------- Barclays Global Investors Funds, Inc. Institutional Money Market Fund, Institutional Shares/(3)/ 2,343,812 2,343,812 Dreyfus Money Market Fund/(3)/ 1,197,948 1,197,948 Goldman Sachs Financial Square Prime Obligation Fund/(3)/ 824,329 824,329 Providian Temp Cash Money Market Fund/(3)/ 1,250,033 1,250,033 - -------------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $5,616,122) 5,616,122 - -------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 109.80% (Cost $67,455,256) 61,611,495 - -------------------------------------------------------------------- Other Assets, Less Liabilities -- (9.80%) (5,498,737) - -------------------------------------------------------------------- NET ASSETS -- 100.00% $ 56,112,758 ==================================================================== /(1)/ Non-income earning securities. /(2)/ Denotes all or part of security on loan. See Note 5. /(3)/ Security or portion of security represents investment of collateral received from securities lending transactions. See Note 5. See notes to financial statements. - -------------------------------------------------------------------------------- iShares Schedules of InvestmentS page 85 iShares Cohen & Steers Realty Majors Index Fund Schedule of Investments October 31, 2001 (unaudited) Security Shares Value - ------------------------------------------------------------------- COMMON STOCKS - 99.86% - ------------------------------------------------------------------- Equity Office Properties Trust 55,215 $ 1,573,627 Equity Residential Properties Trust 58,832 1,526,690 Simon Property Group Inc. 48,788 1,341,670 Public Storage Inc. 33,871 1,114,017 Vornado Realty Trust 24,398 956,402 Prologis Trust 46,433 925,410 Boston Properties Inc. 25,300 894,355 Kimco Realty Corp. 17,849 872,638 AvalonBay Communities Inc. 18,831 854,927 Apartment Investment & Management Co. "A" 20,038 840,995 Archstone-Smith Trust 34,503 834,973 Duke-Weeks Realty Corp. 35,814 825,513 AMB Property Corp. 23,869 580,255 Health Care Property Investors Inc./(1)/ 15,327 570,471 General Growth Properties Inc./(1)/ 14,725 539,230 Liberty Property Trust 19,296 517,133 Rouse Co./(1)/ 19,332 507,852 CarrAmerica Realty Corp. 17,435 493,585 Weingarten Realty Investors 9,086 454,663 Host Marriott Corp./(1)/ 65,656 443,178 Arden Realty Inc. 17,878 440,335 Post Properties Inc. 10,888 369,756 Reckson Associates Realty Corp./(1)/ 15,857 364,711 Highwoods Properties Inc. 15,134 357,162 Cousins Properties Inc. 13,907 336,688 Smith (Charles E) Residential Realty Inc. 6,382 302,826 Centerpoint Properties Corp. 5,774 268,491 Nationwide Health Properties Inc. 12,984 255,785 Macerich Co. (The) 9,480 229,416 Taubman Centers Inc. 14,058 189,221 - ------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $20,533,012) 19,781,975 - ------------------------------------------------------------------- SHORT TERM INSTRUMENTS - 9.45% - ------------------------------------------------------------------- Barclays Global Investors Funds, Inc. Institutional Money Market Fund, Institutional Shares/(2)/ 785,651 $ 785,651 Dreyfus Money Market Fund/(2)/ 398,069 398,069 Goldman Sachs Financial Square Prime Obligation Fund/(2)/ 273,918 273,918 Providian Temp Cash Money Market Fund/(2)/ 415,376 415,376 - ------------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $1,873,014) 1,873,014 - ----------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 109.31% (Cost $22,406,026) 21,654,989 - ----------------------------------------------------------------- Other Assets, Less Liabilities -- (9.31%) (1,844,219) - ----------------------------------------------------------------- NET ASSETS -- 100.00% $19,810,770 ================================================================= /(1)/ Denotes all or part of security on loan. See Note 5. /(2)/ Security or portion of security represents investment of collateral received from securities lending transactions. See Note 5. See notes to financial statements. - -------------------------------------------------------------------------------- page 86 i|Shares iShares Trust Statements of Assets and Liabilities October 31, 2001 (Unaudited)
iShares Dow Jones U.S. ------------------------------------------------------- Basic Consumer Consumer Total Materials Cyclical Non-cyclical Market Sector Sector Sector Index Fund Index Fund Index Fund Index Fund - ---------------------------------------------------------------------------------------------------- ASSETS Investments at cost $96,212,138 $10,056,837 $39,285,040 $30,146,854 ----------------------------------------------------- Investments in securities, at market value (Note 1)/(1)/ $78,796,047 $ 8,740,117 $32,027,941 $29,265,626 Receivables: Investment securities sold - 67,534 12,712 6,031 Dividends and interest 72,339 12,799 9,136 38,887 ----------- ----------- ----------- ----------- Total Assets 78,868,386 8,820,450 32,049,789 29,310,544 ----------------------------------------------------- LIABILITIES Payables: Investment securities purchased - 66,392 - - Collateral for securities on loan (Note 5) 2,929,444 - 1,063,042 5,472 Advisory fees (Note 2) 25,639 11,426 29,350 22,609 ----------------------------------------------------- Total Liabilities 2,955,083 77,818 1,092,392 28,081 ----------------------------------------------------- NET ASSETS $75,913,303 $ 8,742,632 $30,957,397 $29,282,463 =========== =========== =========== =========== Net assets consist of: Paid-in capital $95,842,742 $ 9,621,208 $39,726,356 $30,296,723 Undistributed (distributions in excess of) net investment income 62,742 3,707 (5,597) 26,090 Undistributed net realized gain (loss) (2,576,090) 434,437 (1,506,263) (159,122) Net unrealized depreciation (17,416,091) (1,316,720) (7,257,099) (881,228) ----------------------------------------------------- NET ASSETS $75,913,303 $ 8,742,632 $30,957,397 $29,282,463 ===================================================== iShares outstanding 1,550,000 250,000 650,000 700,000 ===================================================== Net asset value per iShare $ 48.98 $ 34.97 $ 47.63 $ 41.83 =====================================================
- -------------------------------------------------------------------------------- /(1)/ Includes securities on loan with market values of $2,770,372, $ --, $1,017,372 and $5,325, respectively. See Note 5. See notes to financial statements. - -------------------------------------------------------------------------------- iShares Financial Statements page 87 iShares Trust Statements of Assets and Liabilities (continued) OCTOBER 31, 2001 (Unaudited)
iShares Dow Jones U.S. ------------------------------------------------------ Energy Financial Healthcare Industrial Sector Sector Sector Sector Index Fund Index Fund Index Fund Index Fund - ------------------------------------------------------------------------------------------------------------------------ ASSETS Investments at cost $76,094,866 $79,389,893 $197,372,173 $44,099,670 ----------- ----------- ------------ ----------- Investments in securities, at market value (Note 1)/(1)/ $66,189,342 $74,360,055 $189,856,085 $36,783,343 Receivables: Investment securities sold - - 69,325 12,042 Dividends and interest 30,885 101,146 141,208 15,791 ----------- ----------- ------------ ----------- Total Assets 66,220,227 74,461,201 190,066,618 36,811,176 ----------- ----------- ------------ ----------- LIABILITIES Payables: Investment securities purchased - 69,648 - - Collateral for securities on loan (Note 5) 3,302,616 1,188,666 7,725,253 1,645,284 Advisory fees (Note 2) 65,912 69,198 165,163 38,525 ----------- ----------- ------------ ----------- Total Liabilities 3,368,528 1,327,512 7,890,416 1,683,809 ----------- ----------- ------------ ----------- NET ASSETS $62,851,699 $73,133,689 $182,176,202 $35,127,367 =========== =========== ============ =========== Net assets consist of: Paid-in capital $73,922,142 $78,617,091 $189,462,574 $47,560,268 Undistributed (distributions in excess of) net investment income (1,908) 84,437 47,408 (4,911) Undistributed net realized gain (loss) (1,163,011) (538,001) 182,308 (5,111,663) Net unrealized depreciation (9,905,524) (5,029,838) (7,516,088) (7,316,327) ----------- ----------- ------------ ----------- NET ASSETS $62,851,699 $73,133,689 $182,176,202 $35,127,367 =========== =========== ============ =========== iShares outstanding 1,350,000 1,000,000 3,000,000 800,000 =========== =========== ============ =========== Net asset value per iShare $ 46.56 $ 73.13 $ 60.73 $ 43.91 =========== =========== ============ ===========
- -------------------------------------------------------------------------------- /(1)/ Includes securities on loan with market values of $3,191,703, $1,133,803, $7,481,711 and $1,578,096, respectively. See Note 5. See notes to financial statements. - -------------------------------------------------------------------------------- page 88 i|Shares iShares Trust Statements of Assets and Liabilities (continued) October 31, 2001 (Unaudited)
iShares Dow Jones U.S. -------------------------------------------------------------- Technology Telecommunications Utilities Sector Sector Sector Chemicals Index Fund Index Fund Index Fund Index Fund - ------------------------------------------------------------------------------------------------------------------------------- ASSETS Investments at cost $191,196,813 $ 54,204,571 $43,478,076 $ 6,141,476 ------------ ------------ ----------- ----------- Investments in securities, at market value (Note 1)/(1)/ $108,186,723 $ 40,038,067 $33,505,065 $ 5,720,972 Receivables: Investment securities sold 13,236 22,742 14,834 3,411 Dividends and interest 6,769 141,232 57,965 5,047 ------------ ------------ ----------- ----------- Total Assets 108,206,728 40,202,041 33,577,864 5,729,430 ------------ ------------ ----------- ----------- LIABILITIES Payables: Collateral for securities on loan (Note 5) 6,740,116 2,762,708 1,313,468 - Advisory fees (Note 2) 89,793 49,736 36,637 7,808 ------------ ------------ ----------- ----------- Total Liabilities 6,829,909 2,812,444 1,350,105 7,808 ------------ ------------ ----------- ----------- NET ASSETS $101,376,819 $ 37,389,597 $32,227,759 $ 5,721,622 ============ ============ =========== =========== Net assets consist of: Paid-in capital $191,550,269 $ 61,064,202 $43,097,197 $ 7,224,437 Undistributed (distributions in excess of) net investment income (accumulated net investment loss) (212,578) 106,232 50,632 (1,770) Undistributed net realized loss (6,950,782) (9,614,333) (947,059) (1,080,541) Net unrealized depreciation (83,010,090) (14,166,504) (9,973,011) (420,504) ------------ ------------ ----------- ----------- NET ASSETS $101,376,819 $ 37,389,597 $32,227,759 $ 5,721,622 ============ ============ =========== =========== iShares outstanding 2,200,000 1,250,000 500,000 150,000 ============ ============ =========== =========== Net asset value per iShare $ 46.08 $ 29.91 $ 64.46 $ 38.14 ============ ============ =========== ===========
- -------------------------------------------------------------------------------- /(1)/ Includes securities on loan with market values of $6,143,680, $2,625,349, $1,264,694 and $ --, respectively. See Note 5. See notes to financial statements. - -------------------------------------------------------------------------------- iShares Financial Statements page 89 iShares Trust Statements of Assets and Liabilities (continued) October 31, 2001 (Unaudited)
iShares Dow Jones U.S. iShares Cohen & Steers --------------------------------------- ----------------------- Financial Real Realty Services Internet Estate Majors Index Fund Index Fund Index Fund Index Fund - ------------------------------------------------------------------------------------------------------------------------------ ASSETS Investments at cost $39,343,470 $ 29,403,069 $67,455,256 $22,406,026 ----------- ------------ ----------- ----------- Investments in securities, at market value (Note 1)/(1)/ $33,101,344 $ 13,315,813 $61,611,495 $21,654,989 Receivables: Investment securities sold - 3,788 - - Dividends and interest 51,355 1,188 175,277 41,356 ----------- ------------ ----------- ----------- Total Assets 33,152,699 13,320,789 61,786,772 21,696,345 ----------- ------------ ----------- ----------- LIABILITIES Payables: Collateral for securities on loan (Note 5) 205,308 405,534 5,616,122 1,866,193 Advisory fees (Note 2) 32,708 12,097 57,892 19,382 ----------- ------------ ----------- ----------- Total Liabilities 238,016 417,631 5,674,014 1,885,575 ----------- ------------ ----------- ----------- NET ASSETS $32,914,683 $ 12,903,158 $56,112,758 $19,810,770 =========== ============ =========== =========== Net assets consist of: Paid-in capital $37,022,819 $ 53,244,211 $56,271,945 $19,914,811 Undistributed net investment income (accumulated net investment loss) 42,955 (43,056) 386,283 209,537 Undistributed net realized gain (loss) 2,091,035 (24,210,741) 5,298,291 437,459 Net unrealized depreciation (6,242,126) (16,087,256) (5,843,761) (751,037) NET ASSETS $32,914,683 $ 12,903,158 $56,112,758 $19,810,770 =========== ============ =========== =========== iShares outstanding 400,000 1,200,000 750,000 250,000 =========== ============ =========== =========== Net asset value per iShare $ 82.29 $ 10.75 $ 74.82 $ 79.24 =========== ============ =========== ===========
- -------------------------------------------------------------------------------- /(1)/ Includes securities on loan with market values of $195,366, $367,040, $5,384,475 and $1,802,562, respectively. See Note 5. See notes to financial statements. - -------------------------------------------------------------------------------- page 90 i|Shares iShares Trust Statements Of Operations For the six months ended October 31, 2001 (Unaudited)
iShares Dow Jones U.S. ------------------------------------------------------- Basic Consumer Consumer Total Materials Cyclical Non-cyclical Market Sector Sector Sector Index Fund Index Fund Index Fund Index Fund - -------------------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME Dividends $ 486,482 $ 163,324 $ 103,675 $196,794 Interest 1,072 252 224 261 Securities lending income 4,092 - 2,665 - -------------- ----------- ----------- -------- Total investment income 491,646 163,576 106,564 197,055 -------------- ----------- ----------- -------- EXPENSES (NOTE 2) Advisory fees 73,440 38,518 100,046 57,562 -------------- ----------- ----------- -------- Total expenses 73,440 38,518 100,046 57,562 -------------- ----------- ----------- -------- Net investment income 418,206 125,058 6,518 139,493 -------------- ----------- ----------- -------- NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from investments (2,121,307) 516,031 (1,003,796) 206,099 Net change in unrealized appreciation (depreciation) on investments (10,909,130) (1,984,644) (7,434,937) 369,303 -------------- ----------- ----------- -------- Net realized and unrealized gain (loss) (13,030,437) (1,468,613) (8,438,733) 575,402 -------------- ----------- ----------- -------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (12,612,231) $(1,343,555) $(8,432,215) $714,895 ============== =========== =========== ========
- -------------------------------------------------------------------------------- See notes to financial statements. - -------------------------------------------------------------------------------- iShares Financial Statements page 91 iShares Trust Statements of Operations (continued) For the six months ended October 31, 2001 (Unaudited)
iShares Dow Jones U.S. -------------------------------------------------------- Energy Financial Healthcare Industrial Sector Sector Sector Sector Index Fund Index Fund Index Fund Index Fund - ------------------------------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME Dividends $ 546,887 $ 685,240 $ 723,714 $ 272,418 Interest 924 1,080 2,627 925 Securities lending income 2,657 2,247 8,595 1,565 ------------------------------------------------------- Total investment income 550,468 688,567 734,936 274,908 ------------------------------------------------------- EXPENSES (NOTE 2) Advisory fees 179,642 199,507 431,929 136,246 ------------------------------------------------------- Total expenses 179,642 199,507 431,929 136,246 ------------------------------------------------------- Net investment income 370,826 489,060 303,007 138,662 ------------------------------------------------------- NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from investments (558,252) (286,031) 512,665 (4,026,808) Net change in unrealized appreciation (depreciation) on investments (13,244,895) (7,893,579) (4,784,950) (5,821,598) ------------------------------------------------------- Net realized and unrealized loss (13,803,147) (8,179,610) (4,272,285) (9,848,406) ------------------------------------------------------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(13,432,321) $(7,690,550) $(3,969,278) $(9,709,744) =======================================================
- -------------------------------------------------------------------------------- See notes to financial statements. - -------------------------------------------------------------------------------- page 92 i|Shares iShares Trust Statements of Operations (continued) For the six months ended October 31, 2001 (Unaudited)
iShares Dow Jones U.S. ---------------------------------------------------------------- Technology Telecommunications Utilities Sector Sector Sector Chemicals Index Fund Index Fund Index Fund Index Fund - --------------------------------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME Dividends $ 85,819 $ 357,665 $ 681,622 $ 200,356 Interest 1,217 646 531 243 Securities lending income 6,598 10,391 2,753 - ----------------------------------------------------------- Total investment income 93,634 368,702 684,906 200,599 ----------------------------------------------------------- EXPENSES (NOTE 2) Advisory fees 306,212 158,874 122,298 41,938 ----------------------------------------------------------- Total expenses 306,212 158,874 122,298 41,938 ----------------------------------------------------------- Net investment income (loss) (212,578) 209,828 562,608 158,661 ----------------------------------------------------------- NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized loss from investments (2,971,078) (5,108,567) (780,619) (869,063) Net change in unrealized appreciation (depreciation) on investments (28,712,224) (7,387,548) (10,658,528) (647,518) ----------------------------------------------------------- Net realized and unrealized loss (31,683,302) (12,496,115) (11,439,147) (1,516,581) ----------------------------------------------------------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(31,895,880) $(12,286,287) $(10,876,539) $(1,357,920) ===========================================================
- -------------------------------------------------------------------------------- See notes to financial statements. - -------------------------------------------------------------------------------- iShares Financial Statements page 93 iShares Trust Statements of Operations (continued) For the six months ended October 31, 2001 (Unaudited)
iShares Dow Jones U.S. iShares Cohen & Steers ---------------------------------------- ----------------------- Financial Real Realty Services Internet Estate Majors Index Fund Index Fund Index Fund Index Fund - -------------------------------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME Dividends $ 379,274 $ - $ 2,044,702 $1,370,801 Interest 495 188 2,412 1,397 Securities lending income 680 6,097 14,281 2,796 --------------------------------------------------------- Total investment income 380,449 6,285 2,061,395 1,374,994 --------------------------------------------------------- EXPENSES (NOTE 2) Advisory fees 112,076 49,341 186,211 69,594 --------------------------------------------------------- Total expenses 112,076 49,341 186,211 69,594 --------------------------------------------------------- Net investment income (loss) 268,373 (43,056) 1,875,184 1,305,400 --------------------------------------------------------- NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from investments 2,246,169 (13,637,890) 5,588,707 452,203 Net change in unrealized appreciation (depreciation) on investments (6,696,309) 3,409,667 (7,272,507) (653,720) --------------------------------------------------------- Net realized and unrealized loss (4,450,140) (10,228,223) (1,683,800) (201,517) --------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $(4,181,767) $(10,271,279) $ 191,384 $1,103,883 =========================================================
- -------------------------------------------------------------------------------- See notes to financial statements. - -------------------------------------------------------------------------------- page 94 i|Shares iShares Trust StatementS of Changes in Net Assets
iShares Dow Jones U.S. iShares Dow Jones U.S. iShares Dow Jones u.s. Basic Materials Sector Consumer Cyclical Sector Total Market Index Fund Index Fund Index Fund --------------------------------- --------------------------------- --------------------------------- For the period For the period For the period For the six June 12, 2000 For the six June 12, 2000 For the six June 12, 2000 months ended (Commencement months ended (Commencement months ended (Commencement Oct. 31, 2001 of operations) to Oct. 31, 2001 of operations) to Oct. 31, 2001 of operations) to (Unaudited) April 30, 2001 (Unaudited) April 30, 2001 (Unaudited) April 30, 2001 - ----------------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income $ 418,206 $ 313,830 $ 125,058 $ 138,261 $ 6,518 $ 25,842 Net realized gain (loss) (2,121,307) (445,124) 516,031 (25,222) (1,003,796) 31,598 Net change in unrealized appreciation (depreciation) (10,909,130) (6,506,961) (1,984,644) 667,924 (7,434,937) 177,838 --------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (12,612,231) (6,638,255) (1,343,555) 780,963 (8,432,215) 235,278 --------------------------------------------------------------------------------------------------- Distributions to iShareholders: From net investment income (424,915) (243,544) (126,011) (133,601) (12,123) (29,891) From net realized gain - (6,982) - (17,539) - (47,006) --------------------------------------------------------------------------------------------------- Total distributions to iShareholders (424,915) (250,526) (126,011) (151,140) (12,123) (76,897) --------------------------------------------------------------------------------------------------- iShares Transactions: iShares sold 22,325,855 73,513,375 15,047,717 15,892,905 18,643,565 38,392,976 iShares redeemed - - (14,646,322) (6,711,925) (9,181,366) (8,611,821) --------------------------------------------------------------------------------------------------- Net increase in net assets from iShares transactions 22,325,855 73,513,375 401,395 9,180,980 9,462,199 29,781,155 ------------ ----------- ------------ ----------- ----------- ----------- Increase (decrease) in net assets 9,288,709 66,624,594 (1,068,171) 9,810,803 1,017,861 29,939,536 NET ASSETS: Beginning of period 66,624,594 - 9,810,803 - 29,939,536 - --------------------------------------------------------------------------------------------------- End of period $ 75,913,303 $66,624,594 $ 8,742,632 $ 9,810,803 $30,957,397 $29,939,536 =================================================================================================== Undistributed (distributions in excess of) net investment income included in net assets at end of period $ 62,742 $ 69,451 $ 3,707 $ 4,660 $ (5,597) $ 8 =================================================================================================== iSHARES ISSUED AND REDEEMED: iShares sold 400,000 1,150,000 400,000 450,000 350,000 650,000 iShares redeemed - - (400,000) (200,000) (200,000) (150,000) --------------------------------------------------------------------------------------------------- Net increase in iShares outstanding 400,000 1,150,000 - 250,000 150,000 500,000 ===================================================================================================
- -------------------------------------------------------------------------------- See notes to financial statements. - -------------------------------------------------------------------------------- iShares Financial Statements page 95 iShares Trust Statements of Changes in Net Assets (continued)
iShares Dow Jones U.S. Consumer Non-cyclical iShares Dow Jones U.S. iShares Dow Jones U.S. Sector Index Fund Energy Sector Index Fund Financial Sector Index Fund -------------------------------- --------------------------------- --------------------------------- For the period For the period For the period For the six June 12, 2000 For the six June 12, 2000 For the six May 22, 2000 months ended (Commencement months ended (Commencement months ended (Commencement Oct. 31, 2001 of operations) to Oct. 31, 2001 of operations) to Oct. 31, 2001 of operations) to (Unaudited) April 30, 2001 (Unaudited) April 30, 2001 (Unaudited) April 30, 2001 - ----------------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income $ 139,493 $ 146,054 $ 370,826 $ 298,024 $ 489,060 $ 1,082,856 Net realized gain (loss) 206,099 1,070,519 (558,252) 1,007,929 (286,031) 10,111,817 Net change in unrealized appreciation (depreciation) 369,303 (1,250,531) (13,244,895) 3,339,371 (7,893,579) 2,863,741 --------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 714,895 (33,958) (13,432,321) 4,645,324 (7,690,550) 14,058,414 --------------------------------------------------------------------------------------------------- Distributions to Ishareholders: From net investment income (152,756) (106,701) (372,734) (314,652) (513,685) (940,451) From net realized gain -- -- -- -- -- (98,422) --------------------------------------------------------------------------------------------------- Total distributions to iShareholders (152,756) (106,701) (372,734) (314,652) (513,685) (1,038,873) --------------------------------------------------------------------------------------------------- iShares Transactions: iShares sold 20,773,295 28,572,900 58,845,085 73,508,220 40,193,327 168,937,183 iShares redeemed (6,245,188) (14,240,024) (36,344,362) (23,682,861) (16,104,168) (124,707,959) ----------- ------------ ------------ ------------ ------------ ------------- Net increase in net assets from iShares transactions 14,528,107 14,332,876 22,500,723 49,825,359 24,089,159 44,229,224 --------------------------------------------------------------------------------------------------- Increase in net assets 15,090,246 14,192,217 8,695,668 54,156,031 15,884,924 57,248,765 NET ASSETS: Beginning of period 14,192,217 -- 54,156,031 -- 57,248,765 -- --------------------------------------------------------------------------------------------------- End of period $29,282,463 $ 14,192,217 $ 62,851,699 $ 54,156,031 $ 73,133,689 $ 57,248,765 =================================================================================================== Undistributed (distributions in excess of) net investment income included in net assets at end of period $ 26,090 $ 39,353 $ (1,908) $ -- $ 84,437 $ 109,062 =================================================================================================== iSHARES ISSUED AND REDEEMED: iShares sold 500,000 700,000 1,150,000 1,400,000 500,000 2,200,000 iShares redeemed (150,000) (350,000) (750,000) (450,000) (200,000) (1,500,000) --------------------------------------------------------------------------------------------------- Net increase in iShares outstanding 350,000 350,000 400,000 950,000 300,000 700,000 ===================================================================================================
- -------------------------------------------------------------------------------- See notes to financial statements. - -------------------------------------------------------------------------------- page 96 i|Shares iShares Trust Statements of Changes in Net Assets (continued)
iShares Dow Jones U.S. iShares Dow Jones U.S. iShares Dow Jones U.S. Healthcare Sector Index Fund Industrial Sector Index Fund Technology Sector Index Fund --------------------------------- --------------------------------- -------------------------------- For the period For the period For the period For the Six June 12, 2000 For the six June 12, 2000 For the six May 15, 2000 months ended (Commencement months ended (Commencement months ended (Commencement Oct. 31, 2001 of operations) to Oct. 31, 2001 of operations) to Oct. 31, 2001 of Operations) to (Unaudited) April 30, 2001 (Unaudited) April 30, 2001 (Unaudited) April 30, 2001 - ----------------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income (loss) $ 303,007 $ 120,460 $ 138,662 $ 98,215 $ (212,578) $ (510,486) Net realized gain (loss) 512,665 844,329 (4,026,808) (607,911) (2,971,078) 868,638 Net change in unrealized appreciation (depreciation) (4,784,950) (2,731,138) (5,821,598) (1,494,729) (28,712,224) (54,297,866) --------------------------------------------------------------------------------------------------- Net decrease in net assets resulting from operations (3,969,278) (1,766,349) (9,709,744) (2,004,425) (31,895,880) (53,939,714) --------------------------------------------------------------------------------------------------- Distributions to iShareholders: From net investment income (255,599) (129,486) (143,573) (105,375) -- -- From net realized gain -- (64,628) -- (52,511) -- -- --------------------------------------------------------------------------------------------------- Total distributions to iShareholders (255,599) (194,114) (143,573) (157,886) -- -- --------------------------------------------------------------------------------------------------- iShares Transactions: iShares sold 84,157,471 120,097,866 10,019,593 56,492,920 28,085,596 201,179,722 iShares redeemed (6,025,821) (9,867,974) (10,929,414) (8,440,104) (5,803,186) (36,249,719) --------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from iShares transactions 78,131,650 110,229,892 (909,821) 48,052,816 22,282,410 164,930,003 --------------------------------------------------------------------------------------------------- Increase (decrease) in net assets 73,906,773 108,269,429 (10,763,138) 45,890,505 (9,613,470) 110,990,289 NET ASSETS: Beginning of period 108,269,429 -- 45,890,505 -- 110,990,289 -- --------------------------------------------------------------------------------------------------- End of period $182,176,202 $108,269,429 $ 35,127,367 $45,890,505 $101,376,819 $110,990,289 =================================================================================================== Undistributed (distributions in excess of) net investment income (accumulated net investment loss) included in net assets at end of period $ 47,408 $ -- $ (4,911) $ -- $ (212,578) $ -- =================================================================================================== iSHARES ISSUED AND REDEEMED: iShares sold 1,350,000 1,900,000 200,000 1,000,000 550,000 2,200,000 iShares redeemed (100,000) (150,000) (250,000) (150,000) (100,000) (450,000) --------------------------------------------------------------------------------------------------- Net increase (decrease) in iShares outstanding 1,250,000 1,750,000 (50,000) 850,000 450,000 1,750,000 ===================================================================================================
- -------------------------------------------------------------------------------- See notes to financial statements. - -------------------------------------------------------------------------------- iShares Financial Statements page 97 iShares Trust Statements of Changes in Net Assets (continued)
iShares Dow Jones U.S. Ishares Dow Jones U.S. Telecommunications Sector Utilities Sector Ishares Dow Jones U.S. Index Fund Index Fund Chemicals Index Fund --------------------------------- -------------------------------- -------------------------------- For the period For the period For the period For the six May 22, 2000 For the six June 12, 2000 For the six June 12, 2000 months ended (Commencement months ended (Commencement months ended (Commencement Oct. 31, 2001 of operations) to Oct. 31, 2001 of operations) to Oct. 31, 2001 of Operations) to (Unaudited) April 30, 2001 (Unaudited) April 30, 2001 (Unaudited) April 30, 2001 - ----------------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income $ 209,828 $ 363,262 $ 562,608 $ 742,044 $ 158,661 $ 280,575 Net realized gain (loss) (5,108,567) (7,525,427) (780,619) 5,010,474 (869,063) 50,257 Net change in unrealized appreciation (depreciation) (7,387,548) (6,778,956) (10,658,528) 685,517 (647,518) 227,014 ------------ ------------ ------------ ------------ ------------ ----------- Net increase (decrease) in net assets resulting from operations (12,286,287) (13,941,121) (10,876,539) 6,438,035 (1,357,920) 557,846 ------------ ------------ ------------ ------------ ------------ ----------- Distributions to iShareholders: From net investment income (213,486) (253,372) (556,451) (697,569) (186,314) (254,692) From net realized gain -- (675,599) -- (55,156) -- (101,848) ------------ ------------ ------------ ------------ ------------ ----------- Total distributions to iShareholders (213,486) (928,971) (556,451) (752,725) (186,314) (356,540) ------------ ------------ ------------ ------------ ------------ ----------- iShares Transactions: iShares sold 5,304,126 110,589,888 7,556,799 80,926,328 3,912,358 24,295,870 iShares redeemed (11,017,662) (40,116,890) (6,871,731) (43,635,957) (15,524,722) (5,618,956) ------------ ------------ ------------ ------------ ------------ ----------- Net increase (decrease) in net assets from iShares transactions (5,713,536) 70,472,998 685,068 37,290,371 (11,612,364) 18,676,914 ------------ ------------ ------------ ------------ ------------ ----------- Increase (decrease) in net assets (18,213,309) 55,602,906 (10,747,922) 42,975,681 (13,156,598) 18,878,220 NET ASSETS: Beginning of period 55,602,906 -- 42,975,681 -- 18,878,220 -- ------------ ------------ ------------ ------------ ------------ ----------- End of period $ 37,389,597 $ 55,602,906 $ 32,227,759 $ 42,975,681 $ 5,721,622 $18,878,220 ============ ============ ============ ============ ============ =========== Undistributed (distributions in excess of) net investment income included in net assets at end of period $ 106,232 $ 109,890 $ 50,632 $ 44,475 $ (1,770) $ 25,883 ============ ============ ============ ============ ============ =========== iSHARES ISSUED AND REDEEMED: iShares sold 150,000 2,200,000 100,000 1,050,000 100,000 600,000 iShares redeemed (350,000) (750,000) (100,000) (550,000) (400,000) (150,000) ------------ ------------ ------------ ------------ ------------ ----------- Net increase (decrease) in iShares outstanding (200,000) 1,450,000 -- 500,000 (300,000) 450,000 ============ ============ ============ ============ ============ ===========
- -------------------------------------------------------------------------------- See notes to financial statements. - -------------------------------------------------------------------------------- page 98 i|Shares iShares Trust Statements of Changes in Net Assets (continued)
iShares Dow Jones U.S. iShares Dow Jones U.S. iShares Dow Jones U.S. Financial Services Internet Real Estate Index Fund Index Fund Index Fund --------------------------------- --------------------------------- -------------------------------- For the period For the period For the period For the six June 12, 2000 For the six May 15, 2000 For the six June 12, 2000 months ended (Commencement months ended (Commencement months ended (Commencement Oct. 31, 2001 of operations) to Oct. 31, 2001 of operations) to Oct. 31, 2001 of Operations) to (Unaudited) April 30, 2001 (Unaudited) April 30, 2001 (Unaudited) April 30, 2001 - ----------------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income (loss) $ 268,373 $ 525,418 $ (43,056) $ (251,690) $ 1,875,184 $ 1,740,899 Net realized gain (loss) 2,246,169 7,596,460 (13,637,890) (2,082,701) 5,588,707 819,823 Net change in unrealized appreciation (depreciation) (6,696,309) 454,183 3,409,667 (19,496,923) (7,272,507) 1,428,746 ------------ ------------ -------------- --------------- ------------- ------------ Net increase (decrease) in net assets resulting from operations (4,181,767) 8,576,061 (10,271,279) (21,831,314) 191,384 3,989,468 ------------ ------------ -------------- --------------- ------------- ------------ Distributions to iShareholders: From net investment income (274,680) (476,156) -- -- (1,934,799) (1,129,858) From net realized gain -- (32,617) -- (982,729) -- (69,748) ------------ ------------ -------------- --------------- ------------- ------------ Total distributions to iShareholders (274,680) (508,773) -- (982,729) (1,934,799) (1,199,606) ------------ ------------ -------------- --------------- ------------- ------------ iShares Transactions: iShares sold 26,904,678 81,665,512 7,304,556 151,589,668 108,086,182 66,197,350 iShares redeemed (27,000,210) (52,266,138) (2,381,096) (110,524,648) (104,278,575) (14,938,646) ------------ ------------ -------------- --------------- ------------- ------------ Net increase (decrease) in net assets from iShares transactions (95,532) 29,399,374 4,923,460 41,065,020 3,807,607 51,258,704 ------------ ------------ -------------- --------------- ------------- ------------ Increase (decrease) in net assets (4,551,979) 37,466,662 (5,347,819) 18,250,977 2,064,192 54,048,566 NET ASSETS: Beginning of period 37,466,662 -- 18,250,977 -- 54,048,566 -- ------------ ------------ -------------- --------------- ------------- ------------ End of period $ 32,914,683 $ 37,466,662 $ 12,903,158 $ 18,250,977 $ 56,112,758 $ 54,048,566 ============ ============ ============== =============== ============= ============ Undistributed net investment income (accumulated net investment loss) included in net assets at end of period $ 42,955 $ 49,262 $ (43,056) $ -- $ 386,283 $ 445,898 ============ ============ ============== =============== ============= ============ iSHARES ISSUED AND REDEEMED: iShares sold 300,000 950,000 500,000 2,700,000 1,350,000 900,000 iShares redeemed (300,000) (550,000) (200,000) (1,800,000) (1,300,000) (200,000) ------------ ------------ -------------- --------------- ------------- ------------ Net increase in iShares outstanding -- 400,000 300,000 900,000 50,000 700,000 ============ ============ ============== =============== ============ ============
- -------------------------------------------------------------------------------- See notes to financial statements. - -------------------------------------------------------------------------------- iShares Financial Statements page 99 iShares Trust Statements of Changes in Net Assets (continued)
iShares Cohen & Steers Realty Majors Index Fund -------------------------------- For the period For The Six January 29, 2001 months ended (Commencement Oct. 31, 2001 of operations) to (Unaudited) April 30, 2001 - -------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income $ 1,305,400 $ 527,692 Net realized gain (loss) 452,203 (12,962) Net change in unrealized appreciation (depreciation) (653,720) (97,317) ------------ ----------- Net increase in net assets resulting from operations 1,103,883 417,413 ------------ ----------- Distributions to iShareholders: From net investment income (1,406,537) (218,800) ------------ ----------- Total distributions to iShareholders (1,406,537) (218,800) ------------ ----------- iShares Transactions: iShares sold 12,488,188 39,848,642 iShares redeemed (32,422,019) -- ------------ ----------- Net increase (decrease) in net assets from iShares transactions (19,933,831) 39,848,642 ------------ ----------- Increase (decrease) in net assets (20,236,485) 40,047,255 NET ASSETS: Beginning of period 40,047,255 -- ------------ ----------- End of period $ 19,810,770 $40,047,255 ============ =========== Undistributed net investment income included in net assets at end of period $ 209,537 $ 310,674 ============ =========== iSHARES ISSUED AND REDEEMED: iShares sold 150,000 500,000 iShares redeemed (400,000) -- ------------ ----------- Net increase (decrease) in iShares outstanding (250,000) 500,000 ============ ===========
- -------------------------------------------------------------------------------- See notes to financial statements. - -------------------------------------------------------------------------------- page 100 i|Shares iShares Trust Financial Highlights (For a share outstanding throughout each period)
iShares Dow Jones U.S. iShares Dow Jones U.S. Total Market Basic Materials Index Fund Sector Index Fund --------------------------------- ---------------------------------- Period from Period from Six months June 12, 2000 Six months June 12, 2000 ended (Commencement ended (Commencement Oct. 31, 2001 of operations) To Oct. 31, 2001 of operations) to (Unaudited) April 30, 2001 (Unaudited) April 30, 2001 - -------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 57.93 $ 67.15 $ 39.24 $36.04 -------- -------- ------- ------ Income from investment operations: Net investment income 0.29 0.42 0.36 0.55 Net realized and unrealized gain (loss) (8.93) (9.27) (4.27) 3.25 -------- -------- ------- ------ Total from investment operations (8.64) (8.85) (3.91) 3.80 -------- -------- ------- ------ Less distributions from: Net investment income (0.31) (0.36) (0.36) (0.53) Net realized gain - (0.01) - (0.07) -------- -------- ------- ------ Total distributions (0.31) (0.37) (0.36) (0.60) -------- -------- ------- ------ Net asset value, end of period $ 48.98 $ 57.93 $ 34.97 $39.24 ======== ======== ======= ====== Total return (not annualized) (14.95)% (13.20)% (9.99)% 10.80% ======== ======== ======= ====== Ratios/Supplemental data: Net assets, end of period (000s) $ 75,913 $ 66,625 $ 8,743 $9,811 Ratio of expenses to average net assets/(1)/ 0.20% 0.20% 0.60% 0.60% Ratio of net investment income to average net assets/(1)/ 1.14% 0.98% 1.95% 1.77% Portfolio turnover rate/(2)/ 3% 5% 3% 16% - -------------------------------------------------------------------------------------------------------------------------- iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund ------------------------------------ Period from Six months June 12, 2000 ended (Commencement Oct. 31, 2001 of operations) to (Unaudited) April 30, 2001 - -------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 59.88 $ 59.63 -------- ------- Income from investment operations: Net investment income 0.01 0.09 Net realized and unrealized gain (loss) (12.24) 0.45 -------- ------- Total from investment operations (12.23) 0.54 -------- ------- Less distributions from: Net investment income (0.02) (0.10) Net realized gain - (0.19) -------- ------- Total distributions (0.02) (0.29) -------- ------- Net asset value, end of period $ 47.63 $ 59.88 ======== ======= Total return (not annualized) (20.42)% 0.98% ======== ======= Ratios/Supplemental data: Net assets, end of period (000s) $ 30,957 $29,940 Ratio of expenses to average net assets/(1)/ 0.60% 0.60% Ratio of net investment income to average net assets/(1)/ 0.04% 0.16% Portfolio turnover rate/(2)/ 3% 25% - --------------------------------------------------------------------------------------
/(1)/ Annualized for periods of less than one year. /(2)/ Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. See notes to financial statements. - -------------------------------------------------------------------------------- iShares Financial Highlights page 101 iShares Trust Financial Highlights (continued) (For a share outstanding throughout each period)
iShares Dow Jones U.S. iShares Dow Jones U.S. Consumer Non-Cyclical Energy Sector Sector Index Fund Index Fund ------------------------------------- ---------------------------------- Period from Period from Six months June 12, 2000 Six months June 12, 2000 ended (Commencement ended (Commencement Oct. 31, 2001 of operations) to Oct. 31, 2001 of operations) to (Unaudited) April 30, 2001 (Unaudited) April 30, 2001 - ------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 40.55 $ 40.83 $ 57.01 $ 50.79 ------- ------- -------- ------- Income from investment operations: Net investment income 0.28 0.42 0.31 0.40 Net realized and unrealized gain (loss) 1.35 (0.39) (10.45) 6.24 ------- ------- -------- ------- Total from investment operations 1.63 0.03 (10.14) 6.64 ------- ------- -------- ------- Less distributions from: Net investment income (0.35) (0.31) (0.31) (0.42) Net realized gain - - - - ------- ------- -------- ------- Total distributions (0.35) (0.31) (0.31) (0.42) ------- ------- -------- ------- Net asset value, end of period $ 41.83 $ 40.55 $ 46.56 $ 57.01 ======= ======= ======== ======= Total return (not annualized) 4.04% 0.06% (17.79)% 13.13% ======= ======= ======== ======= Ratios/Supplemental data: Net assets, end of period (000s) $29,282 $14,192 $ 62,852 $54,156 Ratio of expenses to average net assets/(1)/ 0.60% 0.60% 0.60% 0.60% Ratio of net investment income to average net assets/(1)/ 1.45% 1.21% 1.24% 0.94% Portfolio turnover rate/(2)/ 4% 38% 16% 20% - ------------------------------------------------------------------------------------------------------------------------------ iShares Dow Jones U.S. Financial Sector Index Fund ------------------------------------ Period from Six months May 22, 2000 ended (Commencement Oct. 31, 2001 of Operations) to (Unaudited) April 30, 2001 - -------------------------------------------------------------------------------------- Net asset value, beginning of period $ 81.78 $ 71.80 ------- ------- Income from investment operations: Net investment income 0.53 1.77 Net realized and unrealized gain (loss) (8.58) 10.17 ------- ------- Total from investment operations (8.05) 11.94 ------- ------- Less distributions from: Net investment income (0.60) (1.57) Net realized gain - (0.39) ------- ------- Total distributions (0.60) (1.96) ------- ------- Net asset value, end of period $ 73.13 $ 81.78 ======= ======= Total return (not annualized) (9.89)% 16.69% ======= ======= Ratios/supplemental data: Net assets, end of period (000s) $73,134 $57,249 Ratio of expenses to average net assets/(1)/ 0.60% 0.60% Ratio of net investment income to average net assets/(1)/ 1.47% 1.46% Portfolio turnover rate/(2)/ 2% 11% - --------------------------------------------------------------------------------------
/(1)/ Annualized for periods less than one year. /(2)/ Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. See notes to financial statements. - -------------------------------------------------------------------------------- page 102 i|Shares iShares Trust Financial Highlights (continued) (For a share outstanding throughout each period)
iShares Dow Jones U.S. iShares Dow Jones U.S. Healthcare Sector Industrial Sector Index Fund Index Fund --------------------------------------- ---------------------------------- Period from Period from Six months June 12, 2000 Six months June 12, 2000 ended (Commencement ended (Commencement Oct. 31, 2001 of operations) to Oct. 31, 2001 of operations) to (Unaudited) April 30, 2001 (Unaudited) April 30, 2001 - ------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 61.87 $ 59.53 $ 53.99 $ 58.11 -------- -------- -------- ------- Income from investment operations: Net investment income (loss) 0.13 0.13 0.14 0.22 Net realized and unrealized gain (loss) (1.16) 2.44 (10.07) (3.98) -------- -------- -------- ------- Total from investment operations (1.03) 2.57 (9.93) (3.76) -------- -------- -------- ------- Less distributions from: Net investment income (0.11) (0.14) (0.15) (0.23) Net realized gain - (0.09) - (0.13) -------- -------- -------- ------- Total distributions (0.11) (0.23) (0.15) (0.36) -------- -------- -------- ------- Net asset value, end of period $ 60.73 $ 61.87 $ 43.91 $ 53.99 ======== ======== ======== ======= Total return (not annualized) (1.67)% 4.29% (18.39)% (6.46)% ======== ======== ======== ======= Ratios/Supplemental Data: Net assets, end of period (000s) $182,176 $108,269 $ 35,127 $45,891 Ratio of expenses to average net assets/(1)/ 0.60% 0.60% 0.60% 0.60% Ratio of net investment income (loss) to average net assets/(1)/ 0.42% 0.29% 0.61% 0.44% Portfolio turnover rate/(2)/ 0%/(3)/ 5% 14% 23% - ------------------------------------------------------------------------------------------------------------------------------ iShares Dow Jones U.S. Technology Sector Index Fund ----------------------------------- Period from Six months May 15, 2000 ended (Commencement Oct. 31, 2001 of Operations) to (Unaudited) April 30, 2001 - ----------------------------------------------------------------------------------- Net asset value, beginning of period $ 63.42 $ 116.57 -------- -------- Income from investment operations: Net investment income (loss) (0.10) (0.29) Net realized and unrealized gain (loss) (17.24) (52.86) -------- -------- Total from investment operations (17.34) (53.15) -------- -------- Less distributions from: Net investment income - - Net realized gain - - -------- -------- Total distributions - - -------- -------- Net asset value, end of period $ 46.08 $ 63.42 ======== ======== Total Return (not annualized) (27.34)% (45.60)% ======== ======== Ratios/Supplemental data: Net assets, end of period (000s) $101,377 $110,990 Ratio of expenses to average net assets/(1)/ 0.60% 0.60% Ratio of net investment income (loss) to average net assets/(1)/ (0.42)% (0.47)% Portfolio turnover rate/(2)/ 3% 11% - -----------------------------------------------------------------------------------
/(1)/ Annualized for periods of less than one year. /(2)/ Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. /(3)/ Rounds to less than 1%. See notes to financial statements. - -------------------------------------------------------------------------------- iShares Financial Highlights page 103 iShares Trust Financial Highlights (continued) (For a share outstanding throughout each period)
iShares Dow Jones U.S. iShares Dow Jones U.S. Telecommunications Sector Utilities Sector Index Fund Index Fund -------------------------------- ----------------------------------- Period from Period from Six Months May 22, 2000 Six Months June 12, 2000 ended (Commencement ended (Commencement Oct. 31, 2001 of Operations) to Oct. 31, 2001 of Operations) to (Unaudited) April 30, 2001 (Unaudited) April 30, 2001 - -------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 38.35 $ 56.81 $ 85.95 $ 69.81 -------- -------- -------- ------- Income from investment operations: Net investment income 0.15 0.35 1.02 1.82 Net realized and unrealized gain (loss) (8.45) (17.95) (21.50) 16.19 -------- -------- -------- ------- Total from investment operations (8.30) (17.60) (20.48) 18.01 -------- -------- -------- ------- Less distributions from: Net investment income (0.14) (0.27) (1.01) (1.73) Net realized gain - (0.59) - (0.14) -------- -------- -------- ------- Total distributions (0.14) (0.86) (1.01) (1.87) -------- -------- -------- ------- Net asset value, end of period $ 29.91 $ 38.35 $ 64.46 $ 85.95 ======== ======== ======== ======= Total return (not annualized) (21.69)% (31.06)% (23.94)% 25.90% ======== ======== ======== ======= Ratios/Supplemental data: Net assets, end of period (000s) $ 37,390 $ 55,603 $ 32,228 $42,976 Ratio of expenses to average net assets/(1)/ 0.60% 0.60% 0.60% 0.60% Ratio of net investment income to average net assets/(1)/ 0.79% 0.80% 2.76% 2.59% Portfolio turnover rate/(2)/ 19% 43% 6% 11% - -------------------------------------------------------------------------------------------------------------------------- iShares Dow Jones U.S. Chemicals Index Fund ----------------------------------- Period from Six Months June 12, 2000 ended (Commencement Oct. 31, 2001 of Operations) to (Unaudited) April 30, 2001 - -------------------------------------------------------------------------------------- Net asset value, beginning of period $ 41.95 $ 40.26 ------- ------- Income from investment operations: Net investment income 0.49 0.65 Net realized and unrealized gain (loss) (3.74) 1.88 ------- ------- Total from investment operations (3.25) 2.53 ------- ------- Less distributions from: Net investment income (0.56) (0.59) Net realized gain - (0.25) ------- ------- Total distributions (0.56) (0.84) ------- ------- Net asset value, end of period $ 38.14 $ 41.95 ======= ======= Total return (not annualized) (7.76)% 6.53% ======= ======= Ratios/Supplemental Data: Net assets, end of period (000s) $ 5,722 $18,878 Ratio of expenses to average net assets/(1)/ 0.60% 0.60% Ratio of net investment income to average net assets/(1)/ 2.28% 1.90% Portfolio turnover rate/(2)/ 12% 16% - --------------------------------------------------------------------------------------
/(1)/ Annualized for periods of less than one year. /(2)/ Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. See notes to financial statements. - -------------------------------------------------------------------------------- page 104 i|Shares iShares Trust Financial Highlights (continued) (For a Share outstanding throughout each period)
iShares Dow Jones U.S. iShares Dow Jones U.S. Financial Services Index Fund Internet Index Fund ---------------------------------- ---------------------------------- Period from Period from Six Months June 12, 2000 Six Months May 15, 2000 ended (Commencement ended (Commencement Oct. 31, 2001 of Operations) to Oct. 31, 2001 of Operations) to (Unaudited) April 30, 2001 (Unaudited) April 30, 2001 - ------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 93.67 $ 85.58 $ 20.28 $ 67.97 -------- ------- -------- -------- Income from investment operations: Net investment income (loss) 0.61 1.29 (0.04) (0.28) Net realized and unrealized gain (loss) (11.36) 8.10 (9.49) (45.77) -------- ------- -------- -------- Total from investment operations (10.75) 9.39 (9.53) (46.05) -------- ------- -------- -------- Less distributions from: Net investment income (0.63) (1.17) - - Net realized gain - (0.13) - (1.64) -------- ------- -------- -------- Total distributions (0.63) (1.30) - (1.64) -------- ------- -------- -------- Net asset value, end of period $ 82.29 $ 93.67 $ 10.75 $ 20.28 ======== ======= ======== ======== Total return (not annualized) (11.52)% 11.03% (46.99)% (68.45)% ======== ======= ======== ======== Ratios/Supplemental Data: Net assets, end of period (000s) $ 32,915 $37,467 $ 12,903 $ 18,251 Ratio of expenses to average net assets/(1)/ 0.60% 0.60% 0.60% 0.60% Ratio of net investment income (loss) to average net assets/(1)/ 1.44% 1.33% (0.52)% (0.53)% Portfolio turnover rate/(2)/ 1% 5% 29% 74% - ------------------------------------------------------------------------------------------------------------------ iShares Dow Jones U.S. Real Estate Index Fund ---------------------------------- Period from Six Months June 12, 2000 ended (Commencement Oct. 31, 2001 of Operations) to (Unaudited) April 30, 2001 - ------------------------------------------------------------------------------ Net asset value, beginning of period $ 77.21 $ 68.97 ------- ------- Income from investment operations: Net investment income (loss) 2.47 3.51 Net realized and unrealized gain (loss) (2.26) 7.51 ------- ------- Total from investment operations 0.21 11.02 ------- ------- Less distributions from: Net investment income (2.60) (2.64) Net realized gain - (0.14) ------- ------- Total distributions (2.60) (2.78) ------- ------- Net asset value, end of period $ 74.82 $ 77.21 ======= ======= Total Return (Not Annualized) 0.15% 16.32% ======= ======= Ratios/Supplemental Data: Net assets, end of period (000s) $56,113 $54,049 Ratio of expenses to average net assets/(1)/ 0.60% 0.60% Ratio of net investment income (loss) to average net assets/(1)/ 6.05% 6.37% Portfolio turnover rate/(2)/ 7% 30% - ------------------------------------------------------------------------------
/(1)/ Annualized for periods of less than one year. /(2)/ Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. See notes to financial statements. - -------------------------------------------------------------------------------- iShares Financial Highlights page 105 iShares Trust Financial Highlights (continued) (For a share outstanding throughout each period)
iShares Cohen & Steers Realty Majors Index Fund ----------------------------------- Period from Six months Jan. 29, 2001 ended (Commencement Oct. 31, 2001 of operations) to (Unaudited) April 30, 2001 - -------------------------------------------------------------------------- Net asset value, beginning of period $ 80.09 $ 79.86 ------- ------- Income from investment operations: Net investment income 2.87 1.11 Net realized and unrealized loss (1.07) (0.39) ------- ------- Total from investment operations 1.80 0.72 ------- ------- Less distributions from: Net investment income (2.65) (0.49) ------- ------- Total distributions (2.65) (0.49) ------- ------- Net asset value, end of period $ 79.24 $ 80.09 ======= ======= Total return (not annualized) 2.17% 0.91% ======= ======= Ratios/supplemental data: Net assets, end of period (000s) $19,811 $40,047 Ratio of expenses to average net assets(1) 0.35% 0.35% Ratio of net investment income to average net assets(1) 6.58% 6.01% Portfolio turnover rate(2) 9% 2% - --------------------------------------------------------------------------
/(1)/ Annualized for periods of less than one year. /(2)/ Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. See notes to financial statements. - -------------------------------------------------------------------------------- page 106 i|Shares iShares Trust Notes to the Financial Statements (Unaudited) 1. SIGNIFICANT ACCOUNTING POLICIES iShares Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company. The Trust was established as a Delaware business trust pursuant to an Agreement and Declaration of Trust dated December 16, 1999. As of October 31, 2001, the Trust offered 50 investment portfolios or funds. The funds offered by the Trust, along with their respective exchange trading symbols are:
iShares S&P Series iShares Dow Jones Series iShares Russell Series - ------------------ ------------------------ ---------------------- - - IShares S&P 100 Index Fund - iShares Dow Jones U.S. Total - iShares Russell 3000 Index (OEF) Market Index Fund (IYY) Fund (IWV) - - Ishares S&P 500 Index Fund - iShares Dow Jones U.S. Basic - iShares Russell 3000 Growth (IVV) Materials Sector Index Fund Index Fund (IWZ) - - Ishares S&P 500/BARRA Growth (IYM) - iShares Russell 3000 Value Index Fund (IVW) - iShares Dow Jones U.S. Index Fund (IWW) - - Ishares S&P 500/BARRA Value Consumer Cyclical Sector Index - iShares Russell 2000 Index Index Fund (IVE) Fund (IYC) Fund (IWM) - - Ishares S&P Midcap 400 Index - iShares Dow Jones U.S. - iShares Russell 2000 Growth Fund (IJH) Consumer Non-Cyclical Sector Index Fund (IWO) - - Ishares S&P Midcap 400/BARRA Index Fund (IYK) - iShares Russell 2000 Value Growth Index Fund (IJK) - iShares Dow Jones U.S. Energy Index Fund (IWN) - - Ishares S&P Midcap 400/BARRA Sector Index Fund (IYE) - iShares Russell 1000 Index Value Index Fund (IJJ) - iShares Dow Jones U.S. Fund (IWB) - - Ishares S&P Smallcap 600 Index Financial Sector Index Fund - iShares Russell 1000 Growth Fund (IJR) (IYF) Index Fund (IWF) - - Ishares S&P Smallcap 600/BARRA - iShares Dow Jones U.S. - iShares Russell 1000 Value Growth Index Fund (IJT) Healthcare Sector Index Fund Index Fund (IWD) - - Ishares S&P Smallcap 600/BARRA (IYH) - iShares Russell Midcap Index Value Index Fund (IJS) - iShares Dow Jones U.S. Fund (IWR) - - Ishares S&P Global 100 Index Industrial Sector Index Fund - iShares Russell Midcap Growth Fund (IOO) (IYJ) Index Fund (IWP) - - Ishares S&P Europe 350 Index - iShares Dow Jones U.S. - iShares Russell Midcap Value Fund (Iev) Technology Sector Index Fund Index Fund (IWS) - - Ishares S&p/tse 60 Index Fund (IYW) (Ikc) iShares Goldman Sachs Series ----------------------------- - - iShares S&P Latin America 40 - iShares Dow Jones U.S. - iShares Goldman Sachs Index Fund (ILF) Telecommunications Sector Index Technology Index Fund (IGM) - - iShares S&P/TOPIX 150 Index Fund (IYZ) - iShares Goldman Sachs Fund (ITF) - iShares Dow Jones U.S. Networking Index Fund (IGN) Utilities Sector Index Fund - iShares Goldman Sachs iShares Cohen & Steers Series (IDU) Semiconductor Index Fund (IGW) - ----------------------------- - - iShares Cohen & Steers Realty - iShares Dow Jones U.S. - iShares Goldman Sachs Software Majors Index Fund (ICF) Chemicals Index Fund (Iyd) Index Fund (IGV) - iShares Dow Jones U.S. - Ishares Goldman Sachs Natural Financial Services Index Fund Resources Index Fund (IGE) iShares Nasdaq Series (IYG) - --------------------- - - iShares Nasdaq Biotechnology - iShares Dow Jones U.S. Internet Index Fund (IBB) Index (IYV) iShares Msci Series - ------------------- - - iShares Msci Eafe Index Fund - iShares Dow Jones U.S. Real Ishares Dow Jones U.S. Real (EFA) Estate Index Fund (IYR)
- -------------------------------------------------------------------------------- iShares Notes to the Financial Statements page 107 iShares Trust Notes to the Financial Statements (Unaudited) (continued) 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, as indicated in the name of each fund. The investment advisor uses a "passive" or index approach to try to achieve each fund's investment objective. These financial statements relate only to the iShares Dow Jones Index Funds and the iShares Cohen & Steers Realty Majors Index Fund (each a "Fund", collectively the "Funds"). Each of the Funds is classified as a non-diversified fund under the 1940 Act, except for the iShares Dow Jones U.S. Total Market Index Fund, which is classified as a diversified fund. Non-diversified funds generally hold stocks of fewer companies than diversified funds and may be more susceptible to the risks associated with these particular companies, or to a single economic, political or regulatory occurrence. The following significant accounting policies are consistently followed by the Trust in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") for investment companies. The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions. Actual results could differ from those estimates. SECURITY VALUATION Equity securities are valued at the last sales price on the primary securities exchange or national securities market on which such securities are traded. Securities not listed on an exchange or national securities market, or securities for which there was no sale price, are valued at the latest quoted bid prices. U.S. Government obligations are valued at the latest quoted bid price. Debt securities maturing in 60 days or less are valued at amortized cost, which approximates market value. Mutual fund shares are valued at net asset value. Any securities, including restricted securities or other assets for which market quotations are not readily available, are valued at fair value as determined in good faith in accordance with policies approved by the Board of Trustees of the Trust. SECURITY TRANSACTIONS AND INCOME RECOGNITION Security transactions are accounted for on trade date. Dividend income is recognized on the ex-dividend date, and interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method. DISTRIBUTIONS TO SHAREHOLDERS Distributions to shareholders from net investment income, if any, are declared and distributed at least annually by each Fund. Distributions of net realized capital gains, if any, generally are declared and distributed once a year. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. FEDERAL INCOME TAXES Each Fund is treated as a separate entity for federal income tax purposes. It is the policy of each Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its net income and any net gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes was required for the six months ended October 31, 2001. At April 30, 2001, the Funds' tax year end, the iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund and iShares Dow Jones U.S. Energy Sector Index Fund had tax basis net capital loss carryforwards of $12,169 and $369, respectively. Such losses may be applied against any net realized taxable gains in each succeeding year or until their respective expiration date (April 30, 2009), whichever occurs first. - -------------------------------------------------------------------------------- page 108 i|Shares iShares Trust Notes To The Financial Statements (Unaudited) (continued) For the six months ended October 31, 2001, certain Funds realized net capital gains or losses resulting from in-kind redemptions of large blocks of 50,000 iShares ("Creation Units"). Because such gains or losses are not taxable to the Funds, and are not distributed to existing Fund shareholders, the gains or losses are reclassed from accumulated net realized gains or losses to paid-in-capital at the end of the Funds' tax year end. The in-kind gains or losses for the six months ended October 31, 2001 were as follows:
------------------------------------------------------------------ iShares Index Fund Amount ------------------------------------------------------------------ Dow Jones U.S. Basic Materials Sector $ 612,310 Dow Jones U.S. Consumer Cyclical Sector (755,810) Dow Jones U.S. Consumer Non-Cyclical Sector 430,260 Dow Jones U.S. Energy Sector (253,467) Dow Jones U.S. Financial Sector (151,649) Dow Jones U.S. Healthcare Sector 730,236 Dow Jones U.S. Industrial Sector (418,982) Dow Jones U.S. Technology Sector 993,404 Dow Jones U.S. Telecommunications Sector (137,480) Dow Jones U.S. Utilities Sector (219,152) Dow Jones U.S. Chemicals (785,606) Dow Jones U.S. Financial Services 2,361,344 Dow Jones U.S. Internet (300,263) Dow Jones U.S. Real Estate 5,929,467 Cohen & Steers Realty Majors 896,207 ------------------------------------------------------------------
REPURCHASE AGREEMENTS Each Fund may enter into repurchase agreements with banks and securities dealers. These transactions involve the purchase of securities with a simultaneous commitment to resell the securities to the bank or the dealer at an agreed-upon date and price. A repurchase agreement is accounted for as a loan by the Fund to the seller, collateralized by securities, which are delivered to the Funds' custodian or to an agent bank under a tri-party agreement. The securities are marked-to-market daily and additional securities are acquired as needed, to ensure that their value equals or exceeds the repurchase price plus accrued interest. None of the Funds held repurchase agreements at October 31, 2001. 2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES Pursuant to an Investment Advisory Agreement with the Trust, Barclays Global Fund Advisors ("BGFA") manages the investment of each Fund's assets. BGFA is a California corporation indirectly owned by Barclays Bank PLC. Under this agreement, BGFA is responsible for all expenses ("Covered Expenses") of the Trust, including the cost of transfer agency, custody, fund administration, legal, audit and other services, except interest, taxes, brokerage commissions and other expenses connected with the executions of portfolio transactions, distribution fees and extraordinary expenses. Expenses related to the organization and initial registration of the Trust were borne by BGFA. - -------------------------------------------------------------------------------- iShares Notes to the Financial Statements page 109 iShares Trust Notes to the Financial Statements (Unaudited) (continued) For its investment management services to each Fund, BGFA is entitled to an annual advisory fee based on the average daily net assets of each Fund as follows:
------------------------------------------------------------- Advisory iShares Index Fund Fee ------------------------------------------------------------- Dow Jones U.S. Total Market 0.20% Dow Jones U.S. Basic Materials Sector 0.60 Dow Jones U.S. Consumer Cyclical Sector 0.60 Dow Jones U.S. Consumer Non-Cyclical Sector 0.60 Dow Jones U.S. Energy Sector 0.60 Dow Jones U.S. Financial Sector 0.60 Dow Jones U.S. Healthcare Sector 0.60 Dow Jones U.S. Industrial Sector 0.60 Dow Jones U.S. Technology Sector 0.60 Dow Jones U.S. Telecommunications Sector 0.60 Dow Jones U.S. Utilities Sector 0.60 Dow Jones U.S. Chemicals 0.60 Dow Jones U.S. Financial Services 0.60 Dow Jones U.S. Internet 0.60 Dow Jones U.S. Real Estate 0.60 Cohen & Steers Realty Majors 0.35 -------------------------------------------------------------
Investors Bank & Trust Company ("Investors Bank") serves as administrator, custodian, transfer agent and securities lending agent for the Funds. As compensation for its services, Investors Bank receives certain out-of-pocket costs, transaction fees, and asset-based fees, which are accrued daily and paid monthly. These fees are Covered Expenses as defined above. SEI Investments Distribution Company serves as each Fund's underwriter and distributor of the shares of each Fund, pursuant to a Distribution Agreement with the Trust. The distributor will deliver the Prospectus and Statement of Additional Information, if so requested, to persons purchasing Creation Units and will maintain records of both orders placed with it and confirmations of acceptance furnished by it. Barclays Global Investors Services ("BGIS"), a subsidiary of Barclays Global Investors, N.A., served as a broker-dealer for certain of the Funds. For the six months ended October 31, 2001, BGIS received the following amounts in brokerage commissions from these Funds, related to the purchases and sales of portfolio investments:
-------------------------------------------------------------- Commissions Paid to iShares Index Fund BGIS -------------------------------------------------------------- Dow Jones U.S. Total Market $ 153 Dow Jones U.S. Financial Sector 14 Dow Jones U.S. Technology Sector 6 Dow Jones U.S. Telecommunications Sector 240 Dow Jones U.S. Financial Services 21 --------------------------------------------------------------
Pursuant to an exemptive order issued by the Securities and Exchange Commission, each Fund may invest in the Institutional Shares of the Barclays Global Investors Funds, Inc. Institutional Money Market Fund ("IMMF"). The IMMF is a feeder fund in a master/feeder fund structure that invests substantially all of its assets in the Money Market Master Portfolio, which is managed by BGFA, the - -------------------------------------------------------------------------------- page 110 i|Shares iShares Trust Notes to the Financial Statements (Unaudited) (continued) Funds' investment advisor. The IMMF is an open-end money market fund available only to institutional investors and other investment companies managed by BGFA. The IMMF seeks a high level of income consistent with liquidity and the preservation of capital. While the IMMF does not directly charge a management fee, the master portfolio in which it invests in, does charge an advisory fee. Income distributions from the IMMF are declared daily and paid monthly from net investment income. Income distributions earned by the Funds are recorded as either interest income or securities lending income in the accompanying Statements of Operations. Pursuant to Rule 17a-7 of the 1940 Act, certain funds executed cross trades for the six months ended October 31, 2001. Cross trading is the buying or selling of portfolio securities between funds to which BGFA serves as investment advisor. All transactions were in compliance with the requirements and restrictions set forth by Rule 17a-7. Certain of the officers of the Trust are also employees of Investors Bank. 3. INVESTMENT PORTFOLIO TRANSACTIONS Purchases and sales of investments (excluding in-kind transactions and short-term securities) for the six months ended October 31, 2001, were as follows:
----------------------------------------------------------------------------- iShares Index Fund Purchases Sales ----------------------------------------------------------------------------- Dow Jones U.S. Total Market $2,583,833 $ 2,620,618 Dow Jones U.S. Basic Materials Sector 393,597 398,490 Dow Jones U.S. Consumer Cyclical Sector 860,866 840,408 Dow Jones U.S. Consumer Non-Cyclical Sector 749,088 771,084 Dow Jones U.S. Energy Sector 9,385,244 9,305,625 Dow Jones U.S. Financial Sector 1,429,542 1,401,612 Dow Jones U.S. Healthcare Sector 589,235 534,989 Dow Jones U.S. Industrial Sector 6,413,565 6,380,818 Dow Jones U.S. Technology Sector 3,122,698 3,314,293 Dow Jones U.S. Telecommunications Sector 9,922,117 10,129,220 Dow Jones U.S. Utilities Sector 2,469,628 2,441,335 Dow Jones U.S. Chemicals 1,760,641 1,781,832 Dow Jones U.S. Financial Services 591,671 544,038 Dow Jones U.S. Internet 4,765,253 4,797,923 Dow Jones U.S. Real Estate 4,425,076 3,937,096 Cohen & Steers Realty Majors 4,069,922 3,618,178 -----------------------------------------------------------------------------
- -------------------------------------------------------------------------------- iShares Notes to the Financial Statements page 111 iShares Trust Notes to the Financial Statements (Unaudited) (continued) In-kind transactions for the six months ended October 31, 2001, were as follows:
----------------------------------------------------------------------------- In-kind In-kind iShares Index Fund Purchases Sales ----------------------------------------------------------------------------- Dow Jones U.S. Total Market $ 22,292,329 $ - Dow Jones U.S. Basic Materials Sector 13,535,194 13,132,721 Dow Jones U.S. Consumer Cyclical Sector 16,687,639 7,238,576 Dow Jones U.S. Consumer Non-Cyclical Sector 18,838,298 4,314,117 Dow Jones U.S. Energy Sector 58,739,475 36,328,051 Dow Jones U.S. Financial Sector 40,457,628 16,441,974 Dow Jones U.S. Healthcare Sector 82,278,382 4,164,013 Dow Jones U.S. Industrial Sector 10,010,782 10,915,426 Dow Jones U.S. Technology Sector 28,098,271 5,804,787 Dow Jones U.S. Telecommunications Sector 5,300,128 10,985,864 Dow Jones U.S. Utilities Sector 4,298,216 3,625,235 Dow Jones U.S. Chemicals 3,874,027 15,494,582 Dow Jones U.S. Financial Services 24,137,091 24,313,293 Dow Jones U.S. Internet 7,295,221 2,379,099 Dow Jones U.S. Real Estate 107,242,721 104,026,084 Cohen & Steers Realty Majors 13,129,374 33,635,892 -----------------------------------------------------------------------------
At October 31, 2001, the aggregate unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:
------------------------------------------------------------------------------------------------------------------ Tax Unrealized Unrealized Net Unrealized iShares Index Fund Cost Appreciation Depreciation Depreciation ------------------------------------------------------------------------------------------------------------------ Dow Jones U.S. Total Market $ 96,212,138 $2,328,819 $(19,744,910) $(17,416,091) Dow Jones U.S. Basic Materials Sector 10,056,837 17,887 (1,334,607) (1,316,720) Dow Jones U.S. Consumer Cyclical Sector 39,285,040 454,062 (7,711,161) (7,257,099) Dow Jones U.S. Consumer Non-Cyclical Sector 30,146,854 554,596 (1,435,824) (881,228) Dow Jones U.S. Energy Sector 76,094,866 78,227 (9,983,751) (9,905,524) Dow Jones U.S. Financial Sector 79,389,893 2,310,200 (7,340,038) (5,029,838) Dow Jones U.S. Healthcare Sector 197,372,173 7,113,669 (14,629,757) (7,516,088) Dow Jones U.S. Industrial Sector 44,099,670 746,146 (8,062,473) (7,316,327) Dow Jones U.S. Technology Sector 191,196,813 1,057,683 (84,067,773) (83,010,090) Dow Jones U.S. Telecommunications Sector 54,204,571 13,873 (14,180,377) (14,166,504) Dow Jones U.S. Utilities Sector 43,478,076 754,000 (10,727,011) (9,973,011 Dow Jones U.S. Chemicals 6,141,476 31,840 (452,344) (420,504) Dow Jones U.S. Financial Services 39,343,470 208,263 (6,450,389) (6,242,126) Dow Jones U.S. Internet 29,403,069 304,645 (16,391,901) (16,087,256) Dow Jones U.S. Real Estate 67,455,256 218,189 (6,061,950) (5,843,761) Cohen & Steers Realty Majors 22,406,026 367,760 (1,118,797) (751,037) ------------------------------------------------------------------------------------------------------------------
4. iSHARES TRANSACTIONS At October 31, 2001, there were an unlimited number of no par value shares of beneficial interest ("iShares") authorized. iShares are issued and redeemed by each Fund only in Creation Units or multiples thereof. Except when aggregated in Creation Units, iShares are not redeemable. Transactions in iShares for each Fund are disclosed in detail in the Statement of Changes in Net Assets. - -------------------------------------------------------------------------------- page 112 i|Shares iShares Trust Notes to the Financial Statements (Unaudited) (continued) The consideration for purchase of Creation Units of a Fund generally consists of the in-kind contribution of a designated portfolio of equity securities constituting a substantial replication, or a portfolio sampling representation, of the stocks involved in the relevant Fund's underlying index and an amount of cash. A purchase transaction fee and a redemption transaction fee are charged to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units of iShares. 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 is required to have a value of at least 102% of the market value of the loaned securities for securities denominated in U.S. Dollars and a value of at least 105% for all other securities. The collateral is maintained thereafter, at a value equal to at least 100% of the current market value of the securities on loan. The risks to the Funds of securities lending are that the borrower may not provide additional collateral when required or return the securities when due. As of October 31, 2001, certain of the Funds had loaned securities which were collateralized by cash. The cash collateral received was invested in money market mutual funds. The market value of the securities on loan at October 31, 2001 and the value of the related collateral were as follows:
--------------------------------------------------------------------------------- Value of Value of iShares Index Fund Securities Collateral --------------------------------------------------------------------------------- Dow Jones U.S. Total Market $2,770,372 $2,929,444 Dow Jones U.S. Consumer Cyclical Sector 1,017,372 1,063,042 Dow Jones U.S. Consumer Non-Cyclical Sector 5,325 5,472 Dow Jones U.S. Energy Sector 3,191,703 3,302,616 Dow Jones U.S. Financial Sector 1,133,803 1,188,666 Dow Jones U.S. Healthcare Sector 7,481,711 7,725,253 Dow Jones U.S. Industrial Sector 1,578,096 1,645,284 Dow Jones U.S. Technology Sector 6,143,680 6,740,116 Dow Jones U.S. Telecommunications Sector 2,625,349 2,762,708 Dow Jones U.S. Utilities Sector 1,264,694 1,313,468 Dow Jones U.S. Financial Services 195,366 205,308 Dow Jones U.S. Internet 367,040 405,534 Dow Jones U.S. Real Estate 5,384,475 5,616,122 Cohen & Steers Realty Majors 1,802,562 1,866,193 ---------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- iShares Notes to the Financial Statements page 113 [LOGO] iShares 45 Fremont Street www.ishares.com 1-800-iSHARES San Francisco, CA 1-800-474-2737 94105 iShares are distributed by SEI Investments Distribution Co. Barclays Global Fund Advisors serves as an adviser to iShares and is a subsidiary of Barclays Global Investors, N.A., neither of which is affiliated with SEI. Investors Bank & Trust Co. serves as administrator, custodian, securities lending agent and transfer agent for the iShares Dow Jones Series and the iShares Cohen & Steers Series. iShares are not sponsored, endorsed, issued, sold or promoted by Dow Jones & Company Inc. or Cohen & Steers Capital Management, Inc. Nor do these companies make any representation regarding the advisability of investing in iShares. (c)2001 Barclays Global Investors. All rights reserved. iShares is a registered trademark of Barclays Global Investors, N.A. All other trademarks, servicemarks or registered trademarks are the property of their respective owners. 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. Not FDIC insured Have no bank guarantee May lose value -----END PRIVACY-ENHANCED MESSAGE-----