N-30D 1 0001.txt S&P ANNUAL REPORT I SHARES iShares S&P Series SEMIANNUAL REPORT September 30, 2000 iShares The way you invest now ------ BARCLAYS GLOBAL INVESTORS Only better TABLE OF CONTENTS Shareholder Letter............................................... 1 Market Overview.................................................. 2 Managers' Discussion & Analysis.................................. 4 Schedules of Investments......................................... 14 iShares S&P 500 Index Fund.................................... 14 iShares S&P 500/BARRA Growth Index Fund....................... 20 iShares S&P 500/BARRA Value Index Fund........................ 22 iShares S&P MidCap 400 Index Fund............................. 27 iShares S&P MidCap 400/BARRA Growth Index Fund................ 32 iShares S&P MidCap 400/BARRA Value Index Fund................. 34 iShares S&P SmallCap 600 Index Fund........................... 37 iShares S&P SmallCap 600/BARRA Growth Index Fund.............. 44 iShares S&P SmallCap 600/BARRA Value Index Fund............... 46 iShares S&P Europe 350 Index Fund............................. 51 iShares S&P/TSE 60 Index Fund................................. 56 Financial Statements............................................. 57 Financial Highlights............................................. 66 Notes to Financial Statements.................................... 69
To Our Shareholders The iShares Funds' semiannual period ended September 30, 2000 was one of continued market volatility. Significant events during this period include: . The Federal Reserve Board raised rates 0.50% at its May 16 meeting. This increase was the sixth in 12 months and brought the Federal Funds rate to 6.5%. This is the rate's highest level since it was 6.75% in January of 1991. . The price of crude oil rose to $37.20 a barrel, the highest level since November of 1990. . The euro sank to a 21-month low since its introduction in January 1999. . More than 50 IPOs occurred in August, representing 25% of the IPOs launched so far in 2000. As you read through this report and review the performance of the funds 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 Funds 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 Funds as part of your long-term investment program. iShares Funds 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 November 2000 -------------------------------------------------------------------------------- iShares Shareholder Letter page 1 Market Overview Domestic Markets Despite a bumpy ride, US equity markets delivered positive returns during the six-months ended September 30, 2000. Mid-capitalization stocks were the performance leaders for the period: The S&P MidCap 400 Index returned 16.82% for the period. Small-capitalization stocks also fared well, advancing 11.20% and 11.02% in the S&P 600 Index and the Russell 2000 Index, respectively. Conversely, large-capitalization stocks were flatter: the S&P 500 Index and the Russell 1000 Index returned (0.68)% and 1.15%, respectively. Value stocks outperformed growth stocks across all indices in this period. The S&P 500/BARRA Value Index increased by 5.10%, and the S&P 600 Value/BARRA Index increased by 5.68%. Both the S&P 500/BARRA Growth Index and the S&P 600/BARRA Growth Index were relatively flat, returning 0.83% and 1.37%, respectively. Interest rate concerns dominated investors' attention at the beginning of the period. On May 16, the Federal reserve instituted its sixth interest rate hike in 12 months, amid continued signs of an overheated economy. However, by the end of May, economic figures began to reveal signs of a slowing economy. Lower durable goods orders and new home sales suggested that the economy might be approaching the Fed's desired "soft landing", and the Fed chose to leave rates unchanged at its June meeting. Less optimistic news arrived in July, however, in the form of higher-than- expected figures for both the Gross Domestic Product (GDP) and Consumer Price Index (CPI). Investors responded by selling off technology stocks and other high-valuation shares, and buying more defensive stocks. August brought more encouraging economic reports: US factory orders (excluding transportation equipment) had fallen 4.8% in July, compared with a 0.5% increase in June. Meanwhile, both the CPI and the core rate, which exclude food and energy, had risen 0.2% in July, reflecting no acceleration in inflation. Finally, a record drop in durable goods orders and an increase in jobless claims in July suggested that the demand for workers and goods was slowing enough to relieve inflationary pressures. The positive data led to another pause in Fed tightening, and markets welcomed the news with a strong rally. With concerns about inflation apparently behind them, investors began to focus on new areas for worry. The price of crude oil, which had been climbing during the year, reached a 10-year high in September. At the same time, the euro dipped to an all-time low since its introduction in January 1999. Investors' concerns about the impact that these factors would have on corporate earnings were realized when Intel announced that it would fail to meet its third quarter earnings expectations, citing the weakness of the euro. Investors began to shift from growth stocks, particularly technology companies, and buy shares of more value-oriented stocks. International Markets Many of the same concerns that affected the US markets also impacted the international ones. Volatility, too, was a common theme. As the reporting period began, the international markets were generally weak. Like in the US, investors abroad remained concerned about the possibility that central banks would raise interest rates substantially to ward off inflation. As a result, shares in "new economy" sectors such as telecommunications and technology generally declined. Stocks traditionally considered defensive, such as the value-oriented "old economy" companies in the utilities and financial sectors, took the lead. This trend would continue for much of the reporting period. Not surprisingly, countries whose markets are dominated by technology and telecommunications companies, such as Sweden and Finland with companies like Ericsson and Nokia, were the hardest hit by the decline. But they were not alone; U.K. and German markets were also dragged down by their respective telecommunications companies. Besides concerns about potentially higher interest rates, these markets were further impacted by the unexpectedly high prices paid at auction for third-generation wireless licenses. As a result of the near-term uncertainty, telecommunications stocks remained weak through the rest of the reporting period. -------------------------------------------------------------------------------- page 2 iShares The concurrent downturn in technology stocks affected almost every international market, though some were harder hit than others. The stock exchanges of export- oriented economies such as South Korea and Taiwan, for example, posted severe losses in July, August and September. The weakness of the euro relative to the US dollar was another strike against Asian exporters. Meanwhile, Latin American markets held up relatively well; for instance, oil exporter Mexico was buoyed by higher crude oil prices. During September, a new market consensus appeared to be emerging. Investors seemed less concerned about the possibility of higher interest rates but instead were focused on the potential for a significant slowdown in global economic growth. In this environment, stocks in utilities and financial-services industries continued to outperform. -------------------------------------------------------------------------------- iShares Market Overview page 3 Managers' Discussion & Analysis iShares S&P 500 Index Funds Performance As Of 9/30/00 -------------------------------------------------------------------------------- Total Returns -------------------------------------------------------------------------------- Inception to Fund Inception Date September 30, 2000 ---- -------------- ------------------ iShares S&P 500 Index Fund 05/15/00 (0.70)% iShares S&P 500/BARRA Growth Index Fund 05/22/00 0.76% iShares S&P 500/BARRA Value Index Fund 05/22/00 5.04% -------------------------------------------------------------------------------- Total returns represent the iShares Funds' change in value during the time periods noted above. These figures assume that dividends and capital gains distributions have been reinvested in the Funds at net asset value. The Funds' past performance is no guarantee of future results. The investment return and principal value of shares of the Funds will vary with changes in market conditions. Shares of the Funds may be worth more or less than their original cost when they are redeemed or sold in the market. [PIE CHART] Sector Breakout S&P 500 Index Basic Materials 1.75% Capital Goods 8.56% Communications Services 6.35% Consumer Cyclicals 6.91% Consumer Staples 10.22% Energy 5.85% Financials 15.68% Health Care 11.41% Technology 29.47% Transportation 0.53% Utilities 3.27% [PIE CHART] S&P 500/BARRA Growth Index Basic Materials 0.02% Capital Goods 9.02% Communications Services 2.28% Consumer Cyclicals 7.24% Consumer Staples 10.25% Financials 1.30% Health Care 18.94% Technology 50.92% Transportation 0.03% [PIE CHART] S&P 500/BARRA Value Index Basic Materials 3.58% Capital Goods 8.08% Communications Services 10.67% Consumer Cyclicals 6.56% Consumer Staples 10.19% Energy 12.04% Financials 30.93% Health Care 3.42% Technology 6.74% Transportation 1.06% Utilities 6.73% The Standard & Poor's (S&P) 500 Index showed moderate growth for the semiannual reporting period ended September 30, 2000. The iSHARES S&P 500 INDEX FUND, which commenced operations on May 15, seeks to track the S&P 500 Index. For the period May 15 -------------------------------------------------------------------------------- page 4 iShares through September 30, the Index returned (0.68)%. The iShares S&P 500/BARRA Growth Index Fund and the iShares S&P 500/BARRA Value Index Fund, which commenced operations on May 22, seek to track the growth and value components of the S&P 500 Index, respectively. From May 22 through September 30, the S&P 500/BARRA Growth Index returned 0.83%, and the S&P 500/BARRA Value Index returned 5.10%. The period began with the Federal Reserve's 0.5% interest rate hike on May 16. This increase marked the sixth in a year. In July, investor concerns were reinforced by the news that the Consumer Price Index had risen 0.6% in June and the Gross Domestic Product had jumped 5.2% in the second quarter, above the anticipated 3.8%. These increases, combined with profit warnings from major technology firms, sparked a sell-off in the technology sector. Stocks rallied in August in response to encouraging reports about the US economy. July saw a drop in orders for durable goods, an increase in jobless claims, and a decline in factory orders (excluding transportation equipment) of 4.8%. These factors, combined with growing optimism that interest rates had stabilized, relieved inflationary pressures. However, investors' concerns about inflation were soon replaced by pessimism about rising oil prices and the weak euro. Intel's profit warning, which the company reported was due to the weak euro's effect on its European sales, triggered a sharp drop in technology stocks. The sell-off spread to the broader market and even some blue chip stalwarts were dragged down. Companies such as DuPont and Eastman Kodak saw significant declines. Between May 15 and September 30, four stocks in the S&P 500 Index's top 10 holdings: Cisco, Microsoft, Intel, and Oracle realized losses that ranged from 6.5% to 32.0%. Since technology stocks made up 29.4% of the Index's weighting during the period, the losses this sector sustained had the most profound impact on overall returns. However, declines in the technology sector were offset by the strong performance of stocks in the financial and utilities sectors. Merger and acquisition activity, most notably Chase Manhattan Bank's $34 billion bid for J.P. Morgan, contributed to the 15.79% rise in the financial sector for the third quarter, July to September. For most of the period between the Funds' inception and September 30, growth and value stocks fell alternately in and out of favor. However, for the overall period, value stocks strongly outpaced growth, with the S&P 500/BARRA Value and Growth Indexes returning 5.10% and 0.83%, respectively. Value stocks' lead was largely due to the weakness of technology stocks and investors' retreat to more the defensive issues of "old economy" value stocks. -------------------------------------------------------------------------------- iShares Managers' Discussion & Analyses page 5 Managers' Discussion & Analysis iShares S&P MidCap 400 Index Funds Performance as Of 9/30/00 -------------------------------------------------------------------------------- Total Returns -------------------------------------------------------------------------------- Inception to Fund Inception Date September 30, 2000 ---- -------------- ------------------ iShares S&P MidCap 400 Index Fund 05/22/00 16.71% iShares S&P MidCap 400/BARRA Growth Index Fund 07/24/00 7.58% iShares S&P MidCap 400/BARRA Value Index Fund 07/24/00 8.83% -------------------------------------------------------------------------------- Total returns represent the iShares Funds' change in value during the time periods noted above. These figures assume that dividends and capital gains distributions have been reinvested in the Funds at net asset value. The Funds' past performance is no guarantee of future results. The investment return and principal value of shares of the Funds will vary with changes in market conditions. Shares of the Funds may be worth more or less than their original cost when they are redeemed or sold in the market. [PIE CHART] Sector Breakout S&P Midcap 400 Index Basic Materials 3.39% Capital Goods 7.15% Communications Services 1.49% Consumer Cyclicals 11.86% Consumer Staples 6.67% Energy 6.94% Financials 11.73% Health Care 13.18% Technology 24.59% Transportation 1.27% Utilities 11.73% [PIE CHART] S&P MidCap 400/BARRA Growth Index Basic Materials 0.99% Capital Goods 7.71% Communications Services 0.44% Consumer Cyclicals 9.27% Consumer Staples 5.13% Energy 8.34% Financials 3.37% Health Care 19.22% Technology 37.36% Transportation 0.75% Utilities 7.42% [PIE CHART] S&P MidCap 400/BARRA Value Index Basic Materials 6.27% Capital Goods 6.47% Communications Services 2.75% Consumer Cyclicals 14.98% Consumer Staples 8.52% Energy 5.25% Financials 21.80% Health Care 5.92% Technology 9.20% Transportation 1.90% Utilities 16.94% The Standard & Poor's (S&P) MidCap 400 Index showed strong growth for the semiannual reporting period ended September 30, 2000. The iShares S&P MidCap 400 Index Fund, which commenced operations on May 22, seeks to track the S&P MidCap 400 Index. -------------------------------------------------------------------------------- page 6 iShares For the period May 22 through September 30, the Index rose 16.82%. The iShares S&P MidCap 400/BARRA Growth Index Fund and the ishares S&P MidCap 400/BARRA Value Index Fund, which commenced operations on July 24, seek to track the growth and value components of the S&P MidCap 400 Index, respectively. From July 24 through September 30, the S&P MidCap 400/BARRA Growth Index returned 7.68%, and the S&P MidCap 400/BARRA Value Index returned 8.90%. The overall positive performance of the S&P MidCap 400 Index between May 22 and September 30 conceals the wide swings the market experienced in the first several months following the Funds' inceptions. As economic data released in June pointed to a rosy economy with no signs of inflation, investor optimism was high. The mood was reflected in market performance: technology and health care stocks, which represent the two largest sectors of the S&P MidCap 400 Index (approximately 25% and 13%) returned 9.0% and 11.9%, respectively. However, July brought discouraging news. Higher-than-expected figures for both the June Consumer Price Index and the second quarter Gross Domestic Product suggested a rapidly growing economy, and investor sentiment turned negative. Growth companies were sold off as investors sought safety in more defensive sectors. Technology stocks declined 1.8%, while basic materials, transportation, and financial stocks, gained 5.3%, 9.7%, and 7.2%, respectively. The energy sector was the worst performer for the month, returning (7.1)%. Almost every sector responded well to positive economic news in August. A rise in retail sales figures (0.2% instead of the 0.4% that had been expected) was announced, and popular sentiment held that interest rates would remain flat for the remainder of the year. The increase in jobless claims in July and a record drop in orders of durable goods also contributed to increased investor confidence. Unfortunately, the recovery in August was short-lived. Investor concern over corporate profit growth caused a profound downswing in the market in September. The concern stemmed from rising crude oil prices, which had reached a 10-year high by the end of third quarter 2000. In addition, a weakened euro, which reached an historic low of $0.85 to the US dollar in September, compounded concerns and helped to drive stock prices lower. In general, market performance reflected investor confidence in the US economy between May 22 and September 30: when economic reports were promising, equities performed well; when the reports looked less optimistic, the market dropped accordingly. For most of the time between the Funds' inceptions and September 30, growth and value stocks fell in and out of favor inversely. Only during the market rally in August did they experience positive returns in the same month: 14.9% for growth and 7.2% for value. -------------------------------------------------------------------------------- iShares Managers' Discussion & Analyses page 7 Managers' Discussion & Analysis iShares S&P SmallCap 600 Index Funds Performance As Of 9/30/00 -------------------------------------------------------------------------------- Total Returns -------------------------------------------------------------------------------- Inception to Fund Inception Date September 30, 2000 ---- -------------- ------------------ iShares S&P SmallCap 600 Index Fund 05/22/00 11.08% iShares S&P SmallCap 600/BARRA Growth Index Fund 07/24/00 1.24% iShares S&P SmallCap 600/BARRA Value Index Fund 07/24/00 5.66% -------------------------------------------------------------------------------- Total returns represent the iShares Funds' change in value during the time periods noted above. These figures assume that dividends and capital gains distributions have been reinvested in the Funds at net asset value. The Funds' past performance is no guarantee of future results. The investment return and principal value of shares of the Funds will vary with changes in market conditions. Shares of the Funds may be worth more or less than their original cost when they are redeemed or sold in the market. [PIE CHART] Sector Breakout S&P SmallCap 600 Index Basic Materials 3.49% Capital Goods 13.67% Communications Services 0.19% Consumer Cyclicals 17.25% Consumer Staples 7.83% Energy 5.49% Financials 12.20% Health Care 14.24% Technology 18.99% Transportation 3.16% Utilities 3.49% [PIE CHART] S&P SmallCap 600/BARRA Growth Index Basic Materials 1.84% Capital Goods 15.19% Communications Services 0.19% Consumer Cyclicals 11.34% Consumer Staples 7.16% Energy 5.76% Financials 5.11% Health Care 22.20% Technology 27.39% Transportation 3.82% [PIE CHART] S&P SmallCap 600/BARRA Value Index Basic Materials 4.95% Capital Goods 12.33% Communications Services 0.18% Consumer Cyclicals 22.47% Consumer Staples 8.42% Energy 5.26% Financials 18.45% Health Care 7.21% Technology 11.58% Transportation 2.58% Utilities 6.57% The Standard & Poor's (S&P) SmallCap 600 Index showed solid growth for the semiannual reporting period ended September 30, 2000. The iShares S&P SnallCap 600 Index Fund, which commenced operations on May 22, seeks to track the S&P SmallCap 600 Index. For the period May 22 through September 30, the Index rose 11.20%. The iShares S&P SmallCap 600/BARRA Growth Index Fund -------------------------------------------------------------------------------- page 8 iShares and the iShares S&P SmallCap 600/BARRA Value Index Fund, which commenced operations on July 24, seek to track the growth and value components of the S&P SmallCap 600 Index, respectively. From July 24 through September 30, the S&P SmallCap 600/BARRA Growth Index returned 1.37%, and the S&P SmallCap 600/BARRA Value Index returned 5.68%. Small-cap stocks performed well in the months following the Funds' inceptions. There was significant volatility in this segment of the market, however, and different sectors went dramatically in and out of favor between May 22 and September 30. In general, the volatility in sector performance was attributable to investor sentiment about the state of the economy. As economic news released during the period was alternately positive and negative, investors' enthusiasm rose and fell accordingly. Sector performance reflected these changes in sentiment, experiencing wide swings from month to month. In June the health care sector gained 25.9%, and the technology sector rose 10.5%. The only significant loss this month was the (8.4)% return in the communications services sector. Other sectors of the small-cap market remained relatively flat. The communications services sector rose slightly early in July, but closed the month with a (6.0)% return. The energy sector also fell, ending with a performance of (14.2)%. Technology lost its June gain, returning (10.2)% in July. Conversely, the transportation and financial sectors were solid performers, closing up 10.3% and 9.6%, respectively. In August, encouraging economic news and the Fed's corresponding decision not to raise interest rates sparked a rally across market sectors. By month-end, the communications services sector was up 45.8%; the energy sector rose 23.4%; and the health care, technology, and financial sectors made contributions of 16.0%, 9.8%, and 9.2%, respectively. The IPO market was also active in August: 53 companies were listed, representing 25% of the IPOs launched to date in 2000. In September, three issues that had been brewing for more than a year (rising interest rates, a weakening euro, and increasing oil prices) shook investors' confidence and ultimately drove down stock prices. Technology companies were among the hardest hit, as investors abandoned them in favor of more defensive stocks. September brought flat returns in the energy, health care, and utilities sectors but losses in other sectors. Communications services led the losing sectors with a return of (26.8)%, followed by (11.7)% in technology, and (10.7)% in basic materials. Although growth and value stocks fell in and out of favor alternately between May 22 and September 30, value stocks outperformed their growth counterparts for the period overall. -------------------------------------------------------------------------------- iShares Managers' Discussion & Analyses page 9 Managers' Discussion & Analysis iShares S&P Europe 350 Index Fund Performance As Of 9/30/00 -------------------------------------------------------------------------------- Total Return -------------------------------------------------------------------------------- Inception to Fund Inception Date September 30, 2000 ---- -------------- ------------------ iShares S&P Europe 350 Index Fund 07/25/00 (7.31)% -------------------------------------------------------------------------------- Total return represent the iShares Fund's change in value during the time periods noted above. These figures assume that dividends and capital gains distributions have been reinvested in the Fund at net asset value. The Fund's past performance is no guarantee of future results. 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. Edgar Representation Of Data Points Used In Printed Graphic [PIE CHART] Country Breakout S&P Europe 350 Index Austria 0.0810% Belgium 0.8833% Denmark 0.5216% Finland 3.6841% France 14.1441% Germany 9.7744% Italy 4.8014% Netherlands 8.2863% Norway 0.2160% Portugal 0.5562% Spain 4.4141% Sweden 3.7201% Switzerland 8.2863% United Kingdom 40.6311% The total return of the S&P Europe 350 Index was (7.11)% for the period from July 25, 2000, through September 30, 2000. The iShares S&P Europe 350 Index Fund returned (7.31)% for the same period. The S&P Europe 350 Index measures the performance of equities in the UK, and 14 countries in the Euro Zone, which include the EMU countries plus Denmark, Norway, Sweden and Switzerland. Due in part to the ongoing weakness of the euro, US dollar returns from many European markets fell into negative territory over the reporting period. July was particularly volatile. That month, telecom bellwethers Nokia and Ericsson (respectively 3.4% and 2.1% of the Index as of September 30, 2000) announced that they were expecting slower growth over at least the next quarter. This news created a domino effect, affecting other communications stocks such as Vodafone, which was the Index's largest stock as of September 30, 2000. Communications stocks were also depressed by persistent concerns about the auction of third-generation (3G) wireless licenses in several European markets. These licenses have commanded much higher prices than investors had been expecting, prompting credit agencies to review the ratings of firms that won the bidding and leaving investors concerned about the long-term costs of building 3G networks across Europe. -------------------------------------------------------------------------------- page 10 iShares As the outlook for communications stocks and other growth-oriented issues became less certain, investors retreated to sectors traditionally viewed as defensive, such as utilities and financials. HSBC Holdings was one of the standouts in the financials sector. Higher crude oil prices also benefited energy stocks in the Europe 350 Index, such as BP Amoco and Royal Dutch Petroleum. As of September 30, 2000, those stocks were respectively the Index's second- and fifth-largest holdings, at 3.7% and 2.3% of the portfolio. Although the euro's weakness has diminished returns for US dollar-based investors, the trend has been positive for European exporters. Yet the euro's weakness was one factor the European Central Bank cited for its decision to raise interest rates shortly after the reporting period ended. It was the sixth such rate increase this year. The Bank also pointed to signs that higher-than- expected second quarter labor costs were creating inflationary pressures. Indeed, consumer price inflation in the euro zone clocked in at an annualized rate of 2.3% in August, outpacing the Bank's target rate of 2%. The Bank of England, meanwhile, left interest rates unchanged for the eighth straight month. Bank officials said that inflation in Britain appeared to be under control, due in part to a weakening of the pound versus other currencies. As the period ended, higher crude oil prices were another concern, both in heightening inflationary pressures and lowering consumer confidence across Europe. -------------------------------------------------------------------------------- iShares Managers' Discussion & Analyses page 11 Managers' Discussion & Analysis iShares S&P/TSE 60 Index Fund Performance as of 9/30/00 -------------------------------------------------------------------------------- Total Return -------------------------------------------------------------------------------- Inception to Fund Inception Date September 30, 2000 ---- -------------- ------------------ iShares S&P/TSE 60 Index Fund 06/12/00 5.30% -------------------------------------------------------------------------------- Total return represent the iShares Fund's change in value during the time periods noted above. These figures assume that dividends and capital gains distributions have been reinvested in the Fund at net asset value. The Fund's past performance is no guarantee of future results. 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. [PIE CHART] Sector Breakout --------------- S&P/TSE 60 Index Consumer Discretionary 8.58% Consumer Staples 0.60% Energy 8.32% Financials 19.17% Health Care 0.47% Industrials 7.06% Information Technology 41.30% Materials 7.38% Telecommunications Services 4.46% Utilities 2.66% The total return of the Standard & Poor's/Toronto Stock Exchange 60 Index (S&P/TSE 60) was 3.33% for the period from June 12, 2000 through September 30, 2000. The S&P/TSE 60 tracks the sixty largest securities in the Canadian market. The iShares S&P/ TSE 60 Index Fund, which seeks to track the S&P/TSE 60, returned 5.30% over the period from the Fund's inception on June 12, 2000, through September 30, 2000. Regulatory restrictions can adversely affect the Investment Adviser's ability to optimize the portfolio of an iShares Fund. The Single-Issue Rule generally requires that no more than 25% of the value of a Fund's total assets may be invested in the securities of one single issuer. In the case of the S&P/TSE 60, the Fund was obligated to underweight Nortel Networks over the reporting period, while overweighting other securities to compensate. The performance of Nortel Networks, which accounted for 22.4% of the Fund and 37.9% of the Index as of September 30, 2000, heavily influenced the performance of the Toronto Stock Exchange (TSE) this period. After having declined over the spring along with other telecommunications stocks, Nortel's shares rebounded during the summer. It encountered renewed turbulence in September, driven down primarily by investors' sector-wide concerns. The Fund's underweighting in Nortel put it at a disadvantage over the summer months as shares of Nortel continued to advance. It was beneficial in September, however, when Nortel declined significantly along with other communications stocks. The underweighting of Nortel helped the Fund to outperform the Index by 1.97%. -------------------------------------------------------------------------------- page 12 iShares Technology stocks in the TSE also remained volatile. For example, Celestica, which was 2.4% of the Index as of September 30, 2000, rebounded from a drop in the spring to achieve positive returns over the summer. Toward the end of the reporting period, several earnings warnings released from technology companies including Intel led investors to sell off other technology stocks such as Celestica. With the outlook for technology and telecommunications stocks becoming less certain, investors turned to more defensive issues in the utilities and financial services areas. As a result, several banks in the TSE, including Canadian Imperial Bank and Toronto Dominion Bank, performed well over the reporting period. The apparent stabilization of US and Canadian interest rates created a more positive backdrop for financial services companies in general. As the reporting period ended, investors continued to be concerned about several issues. These include slowing economic growth in the United States and other countries, the impact of higher crude-oil prices, and the adverse effect of the euro's weakness on Canadian exporters. -------------------------------------------------------------------------------- iShares Managers' Discussion & Analyses page 13 iShares S&P 500 Index Fund Schedule of Investments September 30, 2000 (unaudited) Security Shares Value -------------------------------------------------------------------- COMMON STOCKS - 99.89% -------------------------------------------------------------------- General Electric Co. 1,307,397 $ 75,420,460 Cisco Systems Inc.+ 936,745 51,755,161 Microsoft Corp.+ 694,675 41,854,169 Exxon Mobil Corp. 459,899 40,988,498 Pfizer Inc. 833,469 37,454,013 Intel Corp. 886,296 36,892,071 Citigroup Inc. 593,896 32,107,502 Oracle Corp.+ 371,616 29,264,760 American International Group Inc. 305,471 29,229,756 EMC Corporation+ 287,588 28,507,161 Wal-Mart Stores Inc. 589,625 28,375,703 International Business Machines Corp. 232,444 26,149,950 Sun Microsystems Inc.+ 209,444 24,452,587 Nortel Networks Corp. 393,863 23,459,465 Merck & Co. Inc. 303,728 22,608,753 SBC Communications Inc. 447,518 22,375,900 Coca-Cola Co. 327,041 18,028,135 Verizon Communications 358,898 17,384,122 Johnson & Johnson 183,575 17,244,577 Royal Dutch Petroleum Co. 283,130 16,970,104 America Online Inc.+ 304,478 16,365,692 Home Depot Inc. 305,790 16,225,982 Bristol-Myers Squibb Co. 259,514 14,824,737 AT&T Corp. 495,986 14,569,589 Time Warner Inc. 174,404 13,647,113 Morgan Stanley Dean Witter & Co. 148,573 13,585,144 Lucent Technologies Inc. 439,376 13,428,429 Hewlett-Packard Co. 131,686 12,773,542 Lilly (Eli) and Company 149,163 12,100,848 Viacom Inc. "B"+ 200,292 11,717,082 JDS Uniphase Corp.+ 123,453 11,689,456 Procter & Gamble Co. 172,727 11,572,709 Tyco International Ltd. 222,522 $ 11,543,329 Corning Inc. 38,824 11,530,728 WorldCom Inc.+ 379,473 11,526,492 Bank of America Corp. 216,934 11,361,918 Texas Instruments Inc. 228,271 10,771,538 American Express Co. 175,904 10,686,168 Disney (Walt) Co. 275,318 10,530,913 Dell Computer Corp.+ 341,240 10,514,458 Qwest Communications International Inc.+ 217,910 10,473,299 Pharmacia & Upjohn Inc. 170,132 10,239,820 BellSouth Corp. 247,536 9,963,324 Wells Fargo & Company 215,890 9,917,447 American Home Products Corp. 172,183 9,739,101 Abbott Laboratories 204,717 9,736,852 Fannie Mae 133,063 9,514,004 Amgen Inc.+ 135,818 9,483,916 Schering-Plough Corp. 193,499 8,997,704 PepsiCo Inc. 190,621 8,768,566 Philip Morris Companies Inc. 297,491 8,757,391 Enron Corp. 97,033 8,502,517 Medtronic Inc. 158,259 8,199,794 Motorola Inc. 285,953 8,078,172 Chase Manhattan Corp. 172,697 7,976,443 Boeing Co. 118,537 7,467,831 Veritas Software Corp.+ 52,547 7,461,674 Chevron Corp. 86,225 7,350,681 Broadcom Corp.+ 29,084 7,089,225 QUALCOMM Inc.+ 98,228 6,998,745 Merrill Lynch & Co. Inc. 105,075 6,934,950 Yahoo! Inc.+ 72,034 6,555,094 Schwab (Charles) Corp. 180,408 6,404,484 Applied Materials Inc.+ 107,031 6,348,276 Ford Motor Company+ 248,308 6,285,296 Schlumberger Ltd. 75,322 6,199,942 Compaq Computer Corp. 224,614 6,194,854 Siebel Systems Inc.+ 54,242 6,037,813 Bank One Corp. 151,977 5,870,112 Du Pont (E.I.) de Nemours 137,785 5,709,466 Automatic Data Processing Inc. 82,893 5,543,469 Bank of New York Co. Inc. 97,571 5,470,074 McDonald's Corp. 174,554 5,269,349 Network Appliance Inc.+ 40,627 5,174,864 Walgreen Co. 133,471 5,063,556 Anheuser-Busch Companies Inc. 119,646 5,062,521 Freddie Mac 91,883 4,967,425 Comcast Corp. "A"+ 118,885 4,866,855 Minnesota Mining & Manufacturing Co. 52,252 4,761,464 Marsh & McLennan Companies Inc. 35,700 4,739,175 Nextel Communications Inc. "A"+ 100,427 4,694,962 FleetBoston Financial Corp. 119,281 4,651,959 General Motors Corp. "A" 70,852 4,605,380 Clear Channel Communications Inc.+ 77,415 4,373,947 MBNA Corp. 112,602 4,335,177 United Technologies Corp. 61,896 4,286,298 Gillette Co. 138,247 4,268,376 Sprint Corp. (PCS Group)+ 121,298 4,253,011 First Union Corp. 129,866 4,180,062 Duke Energy Corp. 48,667 4,173,195 -------------------------------------------------------------------------------- page 14 iShares iShares S&P 500 Index Fund Schedule of Investments (Continued) September 30, 2000 (Unaudited) Security Shares Value ---------------------------------------------------------------------- COMMON STOCKS (continued) ---------------------------------------------------------------------- AES Corp.+ 60,393 $ 4,136,920 Kimberly-Clark Corp. 71,158 3,971,506 Palm Inc.+ 74,696 3,954,220 Analog Devices Inc.+ 46,856 3,868,549 Texaco Inc. 72,897 3,827,093 Emerson Electric Co. 56,485 3,784,495 Honeywell International Inc. 105,705 3,765,741 Associates First Capital Corp. 96,324 3,660,312 Unilever NV 75,591 3,647,266 Xilinx Inc.+ 42,557 3,643,943 Solectron Corp.+ 78,969 3,642,445 Global Crossing Ltd.+ 116,447 3,609,857 Colgate-Palmolive Co. 75,965 3,585,548 Household International Inc. 62,479 3,537,873 Morgan (J.P.) & Co. Inc. 21,033 3,436,266 Sprint Corp. (FON Group) 116,102 3,403,240 Micron Technology Inc.+ 73,473 3,379,758 Allstate Corp. 97,118 3,374,850 Seagram Co. Ltd. 57,736 3,316,212 Fifth Third Bancorp 61,518 3,314,282 Cardinal Health Inc. 36,467 3,215,934 PE Corp. (Biosystems Group) 27,553 3,209,925 Target Corporation 120,372 3,084,533 Safeway Inc.+ 65,751 3,069,750 Baxter International Inc. 38,447 3,068,551 Maxim Integrated Products Inc.+ 37,400 3,008,362 Mellon Financial Corp. 64,582 2,994,990 Agilent Technologies Inc.+ 59,861 2,929,448 Alcoa Inc. 114,432 2,896,560 Halliburton Co. 58,801 2,877,574 Guidant Corp.+ 40,589 2,869,135 Washington Mutual Inc. 71,311 2,839,069 Firstar Corp. 126,785 2,836,814 Southern Co. 85,833 2,784,208 State Street Corp. 21,311 2,770,430 HCA - The Healthcare Company 73,844 2,741,459 Linear Technology Corp. 41,172 2,665,887 Bestfoods 36,366 2,645,626 Northern Trust Corp. 29,358 2,609,192 Tellabs Inc.+ 54,236 2,589,769 Paychex Inc. 49,191 2,582,528 American General Corp. 32,905 2,566,590 Electronic Data Systems Corp. 61,698 2,560,467 Altera Corp.+ 52,731 2,517,905 Kohls Corp.+ 43,215 $ 2,492,965 PNC Bank Corp. 38,258 2,486,770 Williams Companies Inc. 58,516 2,472,301 Kroger Co.+ 109,325 2,466,645 Adobe Systems Inc. 15,846 2,460,091 ADC Telecommunications Inc.+ 90,946 2,445,595 Providian Financial Corp. 18,882 2,398,014 CVS Corp. 51,696 2,394,171 Lehman Brothers Holdings Inc. 16,006 2,364,886 Sara Lee Corp. 115,118 2,338,334 Lowe's Companies Inc. 50,642 2,272,560 Gap Inc. 112,514 2,264,344 AFLAC Inc. 35,113 2,249,427 US Bancorp Inc. 98,763 2,246,858 Dow Chemical Co. 89,555 2,233,278 Illinois Tool Works Inc. 39,942 2,231,759 Conoco Inc. 82,478 2,221,751 Comverse Technology Inc.+ 20,231 2,184,948 Alltel Corp. 41,772 2,179,976 CIGNA Corp. 20,869 2,178,724 Anadarko Petroleum Corp. 32,165 2,137,686 MedImmune Inc.+ 27,643 2,135,422 Phillips Petroleum Co. 33,635 2,110,596 UnitedHealth Group Inc. 21,279 2,101,301 Coastal Corp. 28,335 2,100,332 First Data Corp. 53,679 2,096,836 Seagate Technology Inc.+ 30,109 2,077,521 Hartford Financial Services Group Inc. 28,469 2,076,458 Costco Wholesale Corp.+ 59,189 2,067,916 Sysco Corp. 44,143 2,044,373 Gateway Inc.+ 42,625 1,992,719 SunTrust Banks Inc. 39,487 1,966,946 Computer Associates International Inc. 77,944 1,963,215 Carnival Corp. "A" 78,069 1,922,449 Harley-Davidson Inc. 40,073 1,918,495 El Paso Energy Corp. 30,645 1,888,498 Lockheed Martin Corp. 56,574 1,864,679 Gannett Co. Inc. 34,941 1,851,873 Sanmina Corp.+ 19,642 1,838,982 International Paper Co. 63,994 1,835,828 Chubb Corp. 23,158 1,832,377 Dominion Resources Inc. 31,536 1,831,059 Capital One Financial Corp. 25,946 1,817,842 Reliant Energy Inc. 38,972 1,812,198 Tribune Co. 40,855 1,782,299 National City Corp. 80,325 1,777,191 -------------------------------------------------------------------------------- iShares Schedules of Investments Page 15 iShares S&P 500 Index Fund Schedule of Investments (Continued) September 30, 2000 (Unaudited) Security Shares Value ---------------------------------------------------------------------- COMMON STOCKS (Continued) ---------------------------------------------------------------------- Best Buy Co. Inc.+ 27,076 $ 1,722,711 Omnicom Group Inc. 23,536 1,716,657 Heinz (H.J.) Co. 46,050 1,706,728 FedEx Corp.+ 37,768 1,674,633 American Electric Power Inc. 42,635 1,668,094 Eastman Kodak Co. 40,760 1,666,065 General Dynamics Corp. 26,303 1,652,157 Mercury Interactive Corp.+ 10,512 1,647,756 Computer Sciences Corp.+ 22,171 1,646,197 McGraw-Hill Companies Inc. 25,765 1,637,688 Transocean Sedco Forex Inc. 27,878 1,634,348 Baker Hughes Inc. 43,749 1,624,182 Southwest Airlines Co. 65,761 1,594,704 RadioShack Corp. 24,619 1,591,003 BB&T Corp. 51,902 1,563,548 FPL Group Inc. 23,578 1,550,253 Caterpillar Inc. 45,830 1,546,762 Wachovia Corp. 26,826 1,520,699 Tenet Healthcare Corp. 41,447 1,507,635 Sears, Roebuck and Co. 45,465 1,473,975 Allergan Inc. 17,168 1,449,623 KeyCorp 57,108 1,445,546 Campbell Soup Co. 55,858 1,445,326 Waste Management Inc. 82,296 1,435,036 Franklin Resources Inc. 32,294 1,434,822 Nike Inc. "B" 35,773 1,433,156 ConAgra Inc. 70,619 1,416,794 Molex Inc. 25,991 1,414,885 St. Paul Companies Inc. 28,098 1,385,583 TXU Corporation 34,952 1,384,973 Quaker Oats Co. 17,346 1,372,502 PECO Energy Co. 22,499 1,362,596 Interpublic Group of Companies Inc. 39,985 1,361,989 General Mills Inc. 37,875 1,344,562 Scientific-Atlanta Inc. 21,098 1,342,360 Pitney Bowes Inc. 33,873 1,335,866 Xerox Corp. 88,294 1,329,928 AON Corp. 33,840 1,328,220 ALZA Corp.+ 15,302 1,323,623 Paine Webber Group Inc. 19,303 1,315,017 Unicom Corp. 23,342 1,311,529 Kellogg Co. 53,749 1,300,054 Avon Products Inc. 31,469 1,286,295 Stilwell Financial Inc.+ 29,535 1,284,773 Raytheon Co. "B" 45,043 1,280,910 Union Pacific Corp. 32,842 $ 1,276,733 Public Service Enterprise Group Inc. 28,463 1,271,940 Dover Corp. 26,901 1,262,666 Limited Inc. 56,951 1,256,481 PG&E Corp. 51,066 1,235,159 Nabisco Group Holdings Corp. "A" 43,269 1,233,167 Clorox Co. 31,130 1,231,581 Xcel Energy Inc. 44,762 1,230,955 Lincoln National Corp. 25,315 1,218,284 Comerica Inc. 20,723 1,211,000 Conexant Systems Inc.+ 28,811 1,206,461 Biogen Inc.+ 19,648 1,198,528 LSI Logic Corp.+ 40,682 1,189,948 Weyerhaeuser Co. 29,237 1,180,444 Albertson's Inc. 56,191 1,180,011 USX-Marathon Group Inc. 41,344 1,173,136 Burlington Northern Santa Fe Corp. 53,681 1,157,497 Marriott International Inc. 31,755 1,157,073 McKesson HBOC Inc. 37,388 1,142,671 Unocal Corp. 32,188 1,140,662 Wrigley (William Jr.) Co. 15,098 1,130,463 Delphi Automotive Systems Corp. 74,372 1,124,877 Golden West Financial Corp. 20,947 1,123,283 Apple Computer Inc.+ 43,024 1,107,868 Masco Corp. 59,475 1,107,722 Entergy Corp. 29,623 1,103,457 Air Products & Chemicals Inc. 30,396 1,094,256 Loews Corp. 13,049 1,087,960 Aetna Inc. 18,681 1,084,666 Occidental Petroleum Corp. 48,862 1,065,802 Burlington Resources Inc. 28,555 1,051,181 Cendant Corp.+ 95,568 1,039,302 Deere & Co. 31,028 1,031,681 PeopleSoft Inc.+ 36,584 1,022,066 KLA-Tencor Corp.+ 24,646 1,015,107 Devon Energy Corp. 16,790 1,009,918 USA Education Inc. 20,634 994,301 Constellation Energy Group Inc. 19,839 986,990 Hershey Foods Corp. 18,166 983,235 Starbucks Corp.+ 24,352 975,602 Ralston Purina Co. 40,670 963,371 Advanced Micro Devices Inc.+ 40,601 959,199 Consolidated Edison Inc. 28,105 959,083 Apache Corp. 16,164 955,697 National Semiconductor Corp.+ 23,422 942,736 -------------------------------------------------------------------------------- Page 16 iShares iShares S&P 500 Index Fund Schedule of Investments (continued) September 30, 2000 (Unaudited) Security Shares Value -------------------------------------------------------------------- COMMON STOCKS (continued) -------------------------------------------------------------------- Danaher Corp. 18,781 $ 934,355 Jefferson-Pilot Corp. 13,669 927,783 MBIA Inc. 13,029 926,688 PPG Industries Inc. 23,091 916,424 Bed Bath & Beyond Inc.+ 37,202 907,380 Bear Stearns Companies Inc. 14,322 902,286 Boston Scientific Corp.+ 54,050 888,447 Coca-Cola Enterprises Inc. 55,648 886,890 Becton Dickinson & Co. 33,465 884,731 CP&L Energy Inc. 21,155 881,899 Textron Inc. 19,100 880,988 TJX Companies Inc. 38,913 875,543 Watson Pharmaceutical Inc.+ 13,469 873,801 New York Times Co. "A" 22,216 873,367 UNUMProvident Corp. 31,901 869,302 May Department Stores Co. 42,293 867,007 MGIC Investment Corp. 14,037 858,012 Staples Inc.+ 60,409 857,053 Northrop Grumman Corp. 9,267 842,139 Alcan Aluminium Ltd. 29,018 839,708 Rohm & Haas Co. "A" 28,841 838,192 Edison International 43,304 836,309 Fort James Corp. 27,249 832,798 Kerr-McGee Corp. 12,481 826,866 Biomet Inc. 23,532 823,620 FirstEnergy Corp. 30,443 820,058 IMS Health Inc. 39,415 817,861 Novellus Systems Inc.+ 17,311 806,043 Newell Rubbermaid Inc. 35,333 806,034 Teradyne Inc.+ 22,946 803,110 Amerada Hess Corp. 11,997 803,049 Summit Bancorp 23,206 800,607 Barrick Gold Corp. 52,480 800,320 PP&L Resources Inc. 19,101 797,467 Synovus Financial Corp. 37,505 794,637 Progressive Corporation 9,687 793,123 Convergys Corp.+ 20,353 791,223 Wellpoint Health Networks Inc.+ 8,230 790,080 Praxair Inc. 20,906 781,362 Ameren Corp. 18,171 760,911 Cincinnati Financial Corp. 21,333 757,321 Price (T. Rowe) Associates 16,029 752,361 Columbia Energy Group 10,591 751,961 Rockwell International Corp. 24,672 746,328 Norfolk Southern Corp. 50,808 $ 743,067 Tiffany & Co. 19,228 741,480 Dun & Bradstreet Corp. 21,449 738,650 Dollar General Corp. 43,628 730,769 Ingersoll-Rand Co. 21,461 726,991 Federated Department Stores Inc.+ 27,703 723,741 DTE Energy Co. 18,919 723,652 Archer-Daniels-Midland Co. 83,881 723,471 Delta Air Lines Inc. 16,229 720,162 KeySpan Corp. 17,740 711,817 Cabletron Systems Inc.+ 24,173 710,082 Dow Jones & Co. Inc. 11,654 705,067 SouthTrust Corp. 22,291 700,773 Cinergy Corp. 21,111 697,982 Florida Progress Corp. 13,066 691,681 Avery Dennison Corp. 14,854 688,854 Charter One Financial Inc. 28,019 682,974 PerkinElmer Inc. 6,512 679,690 Union Carbide Corp. 17,846 673,687 TRW Inc. 16,357 664,503 Regions Financial Corp. 29,191 662,271 AMR Corp.+ 19,854 648,978 Lexmark International Group Inc. "A"+ 16,954 635,775 Sapient Corp.+ 15,605 634,928 CSX Corp. 28,990 632,344 Mattel Inc. 56,494 632,027 Amsouth Bancorp 50,276 628,450 Circuit City Stores Inc. 26,976 620,448 BMC Software Inc.+ 32,418 619,994 Ecolab Inc. 17,091 616,344 CIT Group Inc. (The) 34,914 610,995 Johnson Controls Inc. 11,384 605,487 Tosco Corp. 19,204 598,925 Tricon Global Restaurants Inc.+ 19,483 596,667 Thermo Electron Corp.+ 22,935 596,310 Union Planters Corp. 17,920 592,480 Eaton Corp. 9,589 590,922 Pinnacle West Capital Corp. 11,199 569,749 St. Jude Medical Inc.+ 11,154 568,854 Countrywide Credit Industries Inc. 15,034 567,533 Hilton Hotels Corp. 48,948 565,961 Sempra Energy 27,163 565,330 Harcourt General Inc. 9,524 561,916 Fortune Brands Inc. 21,008 556,712 Ceridian Corp.+ 19,231 539,670 Vulcan Materials Co. 13,364 537,066 -------------------------------------------------------------------------------- iShares Schedules of Investments page 17 iShares S&P 500 Index Fund Schedule of Investments (Continued) September 30, 2000 (Unaudited) Security Shares Value -------------------------------------------------------------------- COMMON STOCKS (Continued) -------------------------------------------------------------------- Georgia-Pacific Corp. 22,639 $ 532,016 Old Kent Financial Corp. 18,258 528,341 Goodrich (B.F.) Co. 13,471 527,895 GPU Inc. 16,087 521,822 Knight Ridder Inc. 10,120 514,222 CenturyTel Inc. 18,591 506,605 Equifax Inc. 18,749 505,051 Sealed Air Corp.+ 11,107 502,592 Parker Hannifin Corp. 14,839 500,816 Brown-Forman Corp. "B" 9,094 497,896 Sabre Holdings Corp. 17,149 496,249 American Power Conversion Corp.+ 25,732 493,733 Citrix Systems Inc.+ 24,593 493,397 UST Inc. 21,550 492,956 Tektronix Inc. 6,400 491,600 Block (H & R) Inc. 13,034 483,073 NCR Corp.+ 12,603 476,551 Huntington Bancshares Inc. 32,413 476,066 Torchmark Corp. 16,983 472,340 Young & Rubicam Inc. 9,537 472,082 Toys R Us Inc.+ 28,703 466,424 Unisys Corp.+ 41,380 465,525 Sherwin-Williams Co. 21,746 464,821 SAFECO Corp. 16,939 461,588 Genuine Parts Co. 23,494 447,854 Phelps Dodge Corp. 10,459 436,663 Cooper Industries Inc. 12,339 434,950 Novell Inc.+ 43,651 433,782 Dana Corp. 20,037 430,795 Harrah's Entertainment Inc.+ 15,648 430,320 Healthsouth Corp.+ 51,296 416,780 Leggett & Platt Inc. 26,086 412,485 Placer Dome Inc. 43,587 411,352 Willamette Industries Inc. 14,681 411,068 Penney (J.C.) Company Inc. 34,668 409,516 Mallinckrodt Group Inc. 8,889 405,561 Compuware Corp.+ 47,871 400,920 Parametric Technology Corp.+ 36,629 400,630 Donnelley (R.R.) & Sons Co. 16,193 397,741 CMS Energy Corp. 14,578 392,695 Inco Ltd.+ 24,168 389,709 AutoZone Inc.+ 17,133 388,705 Kmart Corp.+ 63,884 383,304 Black & Decker Corp. 11,202 382,968 Newmont Mining Corp. 22,332 $ 379,644 ITT Industries Inc. 11,666 378,416 PACCAR Inc. 10,184 377,445 Eastman Chemical Co. 10,184 376,172 Goodyear Tire & Rubber Co. 20,759 373,662 VF Corp. 15,133 373,596 Whirlpool Corp. 9,582 372,500 Rowan Companies Inc.+ 12,472 361,688 Sigma-Aldrich Corp. 10,868 358,644 Westvaco Corp. 13,301 354,970 Darden Restaurants Inc. 16,493 343,261 Niagara Mohawk Holdings Inc.+ 21,622 340,547 Nucor Corp. 10,942 329,628 Conseco Inc. 43,226 329,598 Pall Corp. 16,456 328,092 Grainger (W.W.) Inc. 12,457 327,775 Maytag Corp. 10,416 323,547 Office Depot Inc.+ 41,237 322,164 Mead Corp. 13,684 319,864 Sunoco Inc. 11,752 316,570 Ashland Inc. 9,349 314,944 Coors (Adolph) Company "B" 4,855 306,775 Fluor Corp. 10,162 304,860 Wendy's International Inc. 15,159 304,127 Millipore Corp. 6,091 295,033 Bard (C.R.) Inc. 6,685 282,441 Andrew Corp.+ 10,704 280,311 Liz Claiborne Inc. 7,204 277,354 Engelhard Corp. 16,989 276,071 Winn-Dixie Stores Inc. 19,096 274,505 Nordstrom Inc. 17,631 274,382 Bausch & Lomb Inc. 7,023 273,458 FMC Corp.+ 4,045 271,268 US Airways Group Inc.+ 8,873 270,072 Adaptec Inc.+ 13,431 268,620 Stanley Works (The) 11,639 268,424 Super Value Inc. 17,483 263,338 Temple-Inland Inc. 6,929 262,436 Hasbro Inc. 22,878 261,667 Visteon Corp. 17,285 261,436 Centex Corp. 7,915 254,269 Pactiv Corp.+ 22,568 252,480 International Flavors & Fragrances Inc. 13,522 246,776 Quintiles Transnational Corp.+ 15,309 243,987 Navistar International Corp.+ 8,040 240,698 Humana Inc.+ 22,376 240,542 -------------------------------------------------------------------------------- page 18 iShares iShares S&P 500 Index Fund Schedule of Investments (continued) September 30, 2000 (Unaudited) Security Shares Value -------------------------------------------------------------------- COMMON STOCKS (continued) -------------------------------------------------------------------- Allied Waste Industries Inc.+ 25,251 $ 231,994 Eastern Enterprises 3,620 231,001 Bemis Co. 7,100 228,088 NICOR Inc. 6,205 224,543 Manor Care Inc.+ 13,652 214,166 Alberto-Culver Co. "B" 7,424 213,904 Brunswick Corp. 11,687 213,288 Great Lakes Chemical Corp. 7,150 209,584 Hercules Inc. 14,304 202,044 Boise Cascade Corp. 7,590 201,609 Allegheny Technologies Inc. 11,065 200,553 Consolidated Stores Corp.+ 14,791 199,678 Meredith Corp. 6,707 197,857 Autodesk Inc. 7,767 197,088 Deluxe Corp. 9,635 195,711 Freeport-McMoRan Copper & Gold Inc.+ 20,961 184,719 Crane Co. 8,064 184,464 Snap-On Inc. 7,820 184,259 Crown Cork & Seal Co. Inc. 16,990 181,581 Pulte Corp. 5,495 181,335 Owens-Illinois Inc.+ 19,573 181,050 Homestake Mining Company 34,559 179,275 USX-U.S. Steel Group Inc. 11,737 178,256 Kaufman & Broad Home Corp. 6,440 173,477 Cummins Engine Company Inc. 5,520 165,255 Peoples Energy Corp. 4,714 157,330 ONEOK Inc. 3,935 156,416 American Greetings Corp. "A" 8,637 151,147 Ryder System Inc. 7,947 146,523 Reebok International Ltd.+ 7,540 141,846 Tupperware Corp. 7,725 139,050 Thomas & Betts Corp. 7,725 134,705 Dillards Inc. "A" 12,433 132,101 Louisiana-Pacific Corp. 13,913 127,826 Ball Corp. 3,935 124,690 Potlatch Corp. 3,830 121,124 Briggs & Stratton Corp. 2,990 113,059 Timken Co. 8,167 111,786 Worthington Industries Inc. 11,603 108,778 National Service Industries Inc. 5,425 106,127 Longs Drug Stores Inc. 5,290 101,171 Cooper Tire & Rubber Co. 9,773 98,341 McDermott International Inc. 8,077 88,847 --------------------------------------------------------------------- Shares or Security Principal Value --------------------------------------------------------------------- Polaroid Corp. 5,980 80,356 Russell Corp. 4,370 69,374 Springs Industries Inc. "A" 2,330 65,677 Armstrong Holdings Inc. 5,342 63,770 Grace (W.R.) & Company+ 9,096 62,535 Bethlehem Steel Corp.+ 17,837 53,511 Owens Corning 7,362 19,325 -------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $1,691,380,585) 1,666,566,562 -------------------------------------------------------------------- SHORT TERM INSTRUMENTS - 1.63% -------------------------------------------------------------------- Freddie Mac Discount Note 6.46%, 10/24/00++ $1,744,635 1,744,635 Goldman Sachs Financial Square Prime Obligation Fund++ 3,097,340 3,097,340 Providian Temp Cash Money Market Fund++ 4,599,762 4,599,762 Short Term Investment Company Liquid Assets Portfolio++ 17,769,020 17,769,020 -------------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $27,210,757) 27,210,757 -------------------------------------------------------------------- REPURCHASE AGREEMENT - 0.04% -------------------------------------------------------------------- Investors Bank & Trust Tri Party Repurchase Agreement, dated 09/29/00, due 10/02/00, with a maturity value of $596,920 and an effective yield of 6.25%. 596,609 596,609 -------------------------------------------------------------------- TOTAL REPURCHASE AGREEMENT (Cost: $596,609) 596,609 -------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 101.56% (Cost $1,719,187,951) 1,694,373,928 -------------------------------------------------------------------- Other Assets, Less Liabilities -- (1.56%) (25,950,704) -------------------------------------------------------------------- NET ASSETS -- 100.00% $1,668,423,224 ==================================================================== + Non-income earning securities. ++ Represents investment of collateral received from securities lending transactions. See Note 5. See notes to financial statements. -------------------------------------------------------------------------------- iShares Schedules of Investments page 19 iShares S&P 500/BARRA Growth Index Fund Schedule of Investments September 30, 2000 (Unaudited) Security Shares Value -------------------------------------------------------------------------------- COMMON STOCKS - 99.94% -------------------------------------------------------------------------------- General Electric Co. 119,605 $ 6,899,713 Cisco Systems Inc.+ 85,667 4,733,102 Microsoft Corp.+ 63,553 3,829,068 Pfizer Inc. 76,249 3,426,439 Intel Corp. 81,078 3,374,872 Oracle Corp.+ 33,999 2,677,421 EMC Corporation+ 26,324 2,609,366 Wal-Mart Stores Inc. 53,944 2,596,055 International Business Machines Corp. 21,265 2,392,312 Sun Microsystems Inc.+ 19,162 2,237,164 Nortel Networks Corp. 36,030 2,146,037 Merck & Co. Inc. 27,784 2,068,172 Coca-Cola Co. 29,923 1,649,505 Johnson & Johnson 16,795 1,577,680 America Online Inc.+ 27,869 1,497,959 Home Depot Inc. 27,981 1,484,742 Bristol-Myers Squibb Co. 23,745 1,356,433 Time Warner Inc. 15,965 1,249,261 Lucent Technologies Inc. 40,240 1,229,835 Lilly (Eli) and Company 13,643 1,106,788 Viacom Inc. "B"+ 18,323 1,071,896 JDS Uniphase Corp.+ 11,300 1,069,969 Corning Inc. 3,552 1,054,944 Texas Instruments Inc. 20,881 985,322 Dell Computer Corp.+ 31,233 962,367 Qwest Communications International Inc.+ 19,987 960,625 American Home Products Corp. 15,751 890,916 Abbott Laboratories 18,730 890,846 Amgen Inc.+ 12,429 867,894 Schering-Plough Corp. 17,711 823,562 PepsiCo Inc. 17,453 802,838 Medtronic Inc. 14,478 750,141 Veritas Software Corp.+ 4,822 684,724 Broadcom Corp.+ 2,673 651,544 QUALCOMM Inc.+ 8,994 640,823 Yahoo! Inc.+ 6,598 600,418 Schwab (Charles) Corp. 16,570 588,235 Applied Materials Inc.+ 9,806 581,618 Siebel Systems Inc.+ 4,996 556,117 Automatic Data Processing Inc. 7,589 507,514 Network Appliance Inc.+ 3,741 476,510 Anheuser-Busch Companies Inc. 10,948 463,237 Walgreen Co. 12,192 462,534 Nextel Communications Inc. "A"+ 9,200 430,100 Gillette Co. 12,674 $ 391,310 Sprint Corp. (PCS Group)+ 11,113 389,650 Palm Inc.+ 6,760 357,858 Analog Devices Inc.+ 4,298 354,854 Xilinx Inc.+ 3,921 335,736 Colgate-Palmolive Co. 6,967 328,842 Micron Technology Inc.+ 6,763 311,098 PE Corp. (Biosystems Group) 2,517 293,231 Maxim Integrated Products Inc.+ 3,427 275,659 Agilent Technologies Inc.+ 5,487 268,520 Guidant Corp.+ 3,715 262,604 Linear Technology Corp. 3,773 244,302 Bestfoods 3,326 241,966 Paychex Inc. 4,526 237,615 Tellabs Inc.+ 4,975 237,556 Altera Corp.+ 4,824 230,346 Kohls Corp.+ 3,962 228,558 ADC Telecommunications Inc.+ 8,416 226,312 Adobe Systems Inc. 1,449 224,957 Providian Financial Corp. 1,724 218,948 Sara Lee Corp. 10,592 215,150 Gap Inc. 10,328 207,851 Comverse Technology Inc.+ 1,861 200,988 MedImmune Inc.+ 2,531 195,520 Sysco Corp. 4,040 187,103 Computer Associates International Inc. 7,164 180,443 Harley-Davidson Inc. 3,689 176,611 Omnicom Group Inc. 2,163 157,764 Best Buy Co. Inc.+ 2,478 157,663 Heinz (H.J.) Co. 4,218 156,330 Mercury Interactive Corp.+ 965 151,264 RadioShack Corp. 2,256 145,794 Allergan Inc. 1,581 133,496 Campbell Soup Co. 5,118 132,428 Quaker Oats Co. 1,599 126,521 Interpublic Group of Companies Inc. 3,685 125,520 General Mills Inc. 3,488 123,824 Scientific-Atlanta Inc. 1,943 123,623 ALZA Corp.+ 1,405 121,532 Kellogg Co. 4,905 118,640 Avon Products Inc. 2,902 118,619 Stilwell Financial Inc.+ 2,670 116,145 Conexant Systems Inc.+ 2,680 112,225 Biogen Inc.+ 1,809 110,349 LSI Logic Corp.+ 3,741 109,424 Wrigley (William Jr.) Co. 1,389 104,001 -------------------------------------------------------------------------------- page 20 iShares iShares S&P 500/BARRA Growth Index Fund Schedule of Investments (continued) September 30, 2000 (Unaudited) Shares or Security Principal Value ----------------------------------------------------------------- COMMON STOCKS (continued) ----------------------------------------------------------------- USA Education Inc. 1,910 $ 92,038 Bed Bath & Beyond Inc.+ 3,434 83,757 IMS Health Inc. 3,598 74,658 Teradyne Inc.+ 2,097 73,395 Convergys Corp.+ 1,869 72,657 Dun & Bradstreet Corp. 1,974 67,980 Dow Jones & Co. Inc. 1,080 65,340 Avery Dennison Corp. 1,373 63,673 Sapient Corp.+ 1,434 58,346 Lexmark International Group Inc. "A"+ 1,537 57,637 Tricon Global Restaurants Inc.+ 1,791 54,849 Equifax Inc. 1,726 46,494 Sealed Air Corp.+ 1,017 46,019 UST Inc. 1,986 45,430 American Power Conversion Corp.+ 2,366 45,398 Citrix Systems Inc.+ 2,216 44,458 Young & Rubicam Inc. 883 43,709 Millipore Corp. 564 27,319 US Airways Group Inc.+ 813 24,746 Freeport-McMoRan Copper & Gold Inc.+ 1,933 17,035 Tupperware Corp. 673 12,114 Owens Corning 584 1,533 ----------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $77,185,060) 78,503,953 ----------------------------------------------------------------- SHORT TERM INSTRUMENTS - 3.09% ----------------------------------------------------------------- Freddie Mac Discount Note 6.46%, 10/24/00++ $ 334,343 334,343 Goldman Sachs Financial Square Prime Obligation Fund++ 564,432 564,432 Providian Temp Cash Money Market Fund++ 410,695 410,695 Short Term Investment Company Liquid Assets Portfolio++ 1,120,081 1,120,081 ----------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $2,429,551) 2,429,551 ----------------------------------------------------------------- Security Principal Value ----------------------------------------------------------------- REPURCHASE AGREEMENT - 0.04% ----------------------------------------------------------------- Investors Bank & Trust Tri Party Repurchase Agreement, dated 09/29/00, due 10/02/00, with a maturity value of $30,253 and an effective yield of 6.25%. $ 30,237 $ 30,237 ----------------------------------------------------------------- TOTAL REPURCHASE AGREEMENT (Cost: $30,237) 30,237 ----------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 103.07% (Cost $79,644,848) 80,963,741 ----------------------------------------------------------------- Other Assets, Less Liabilities -- (3.07%) (2,409,860) ----------------------------------------------------------------- NET ASSETS -- 100.00% $78,553,881 ================================================================= + Non-income earning securities. ++ Represents investment of collateral received from securities lending transactions. See Note 5. See notes to financial statements. -------------------------------------------------------------------------------- iShares Schedules of Investments Page 21 iShares S&P 500/BARRA Value Index Fund Schedule of Investments September 30, 2000 (Unaudited) Security Shares Value -------------------------------------------------------------- COMMON STOCKS - 99.93% -------------------------------------------------------------- Exxon Mobil Corp. 33,997 $ 3,029,982 Citigroup Inc. 43,913 2,374,047 American International Group Inc. 22,584 2,161,007 SBC Communications Inc. 33,052 1,652,600 Verizon Communications 26,545 1,285,773 Royal Dutch Petroleum Co. 20,933 1,254,672 AT&T Corp. 36,674 1,077,299 Morgan Stanley Dean Witter & Co. 10,972 1,003,252 Hewlett-Packard Co. 9,742 944,974 Procter & Gamble Co. 12,754 854,518 Tyco International Ltd. 16,447 853,188 WorldCom Inc.+ 28,054 852,140 Bank of America Corp. 16,023 839,205 American Express Co. 13,005 790,054 Disney (Walt) Co. 20,357 778,655 Pharmacia & Upjohn Inc. 12,668 762,455 Wells Fargo & Company 16,078 738,583 BellSouth Corp. 18,281 735,810 Fannie Mae 9,825 702,487 Philip Morris Companies Inc. 21,965 646,595 Enron Corp. 7,217 632,390 Motorola Inc. 21,297 601,640 Chase Manhattan Corp. 12,770 589,814 Boeing Co. 8,748 551,124 Chevron Corp. 6,378 543,724 Merrill Lynch & Co. Inc. 7,835 517,110 Ford Motor Company+ 18,455 467,142 Compaq Computer Corp. 16,612 458,159 Schlumberger Ltd. 5,564 457,987 Bank One Corp. 11,267 435,188 Du Pont (E.I.) de Nemours 10,167 421,295 Bank of New York Co. Inc. 7,202 403,762 McDonald's Corp. 12,879 388,785 Freddie Mac 6,779 366,490 Comcast Corp. "A"+ 8,813 360,782 Minnesota Mining & Manufacturing Co. 3,857 351,469 Marsh & McLennan Companies Inc. 2,642 350,725 FleetBoston Financial Corp. 8,811 343,629 General Motors Corp. "A" 5,230 339,950 Clear Channel Communications Inc.+ 5,720 323,180 MBNA Corp. 8,329 320,666 United Technologies Corp. 4,564 316,057 First Union Corp. 9,610 309,322 Duke Energy Corp. 3,584 307,328 AES Corp.+ 4,451 $ 304,893 Kimberly-Clark Corp. 5,250 293,016 Texaco Inc. 5,383 282,608 Emerson Electric Co. 4,159 278,653 Honeywell International Inc. 7,807 278,124 Associates First Capital Corp. 7,119 270,522 Solectron Corp.+ 5,851 269,877 Unilever NV 5,565 268,511 Global Crossing Ltd.+ 8,589 266,259 Household International Inc. 4,608 260,928 Morgan (J.P.) & Co. Inc. 1,549 253,068 Sprint Corp. (FON Group) 8,629 252,938 Allstate Corp. 7,160 248,810 Fifth Third Bancorp 4,541 244,646 Seagram Co. Ltd. 4,254 244,339 Cardinal Health Inc. 2,709 238,900 Target Corporation 8,883 227,627 Baxter International Inc. 2,846 227,146 Safeway Inc.+ 4,850 226,434 Mellon Financial Corp. 4,782 221,765 Alcoa Inc. 8,461 214,169 Halliburton Co. 4,333 212,046 Firstar Corp. 9,351 209,229 Washington Mutual Inc. 5,253 209,135 Southern Co. 6,312 204,746 State Street Corp. 1,574 204,620 HCA - The Healthcare Company 5,439 201,923 Northern Trust Corp. 2,164 192,326 American General Corp. 2,456 191,568 Electronic Data Systems Corp. 4,545 188,617 PNC Bank Corp. 2,818 183,170 Williams Companies Inc. 4,308 182,013 Kroger Co.+ 8,059 181,831 CVS Corp. 3,813 176,590 Lehman Brothers Holdings Inc. 1,186 175,231 Lowe's Companies Inc. 3,737 167,698 US Bancorp Inc. 7,278 165,575 AFLAC Inc. 2,584 165,537 Dow Chemical Co. 6,618 165,036 Illinois Tool Works Inc. 2,952 164,943 Conoco Inc. 6,103 164,400 CIGNA Corp. 1,538 160,567 Alltel Corp. 3,075 160,477 Hartford Financial Services Group Inc. 2,192 159,879 Anadarko Petroleum Corp. 2,382 158,308 Phillips Petroleum Co. 2,486 155,997 -------------------------------------------------------------------------------- Page 22 iShares iShares S&P 500/BARRA Value Index Fund Schedule of Investments (continued) September 30, 2000 (Unaudited) Security Shares Value -------------------------------------------------------------- COMMON STOCKS (continued) -------------------------------------------------------------- Coastal Corp. 2,084 $ 154,477 First Data Corp. 3,951 154,336 UnitedHealth Group Inc. 1,559 153,951 Seagate Technology Inc.+ 2,230 153,870 Costco Wholesale Corp.+ 4,364 152,467 Gateway Inc.+ 3,154 147,449 SunTrust Banks Inc. 2,909 144,905 Carnival Corp. "A" 5,753 141,668 El Paso Energy Corp. 2,274 140,135 Lockheed Martin Corp. 4,197 138,333 Gannett Co. Inc. 2,596 137,588 Sanmina Corp.+ 1,468 137,442 International Paper Co. 4,705 134,975 Chubb Corp. 1,705 134,908 Dominion Resources Inc. 2,318 134,589 Reliant Energy Inc. 2,882 134,013 Capital One Financial Corp. 1,905 133,469 Tribune Co. 3,017 131,617 National City Corp. 5,915 130,869 FedEx Corp.+ 2,775 123,043 Eastman Kodak Co. 3,006 122,870 American Electric Power Inc. 3,134 122,618 Computer Sciences Corp.+ 1,650 122,512 General Dynamics Corp. 1,935 121,542 McGraw-Hill Companies Inc. 1,895 120,451 Transocean Sedco Forex Inc. 2,050 120,181 Baker Hughes Inc. 3,215 119,357 Southwest Airlines Co. 4,892 118,631 BB&T Corp. 3,902 117,548 FPL Group Inc. 1,733 113,945 Caterpillar Inc. 3,376 113,940 Wachovia Corp. 1,992 112,922 Tenet Healthcare Corp. 3,085 112,217 Sears, Roebuck and Co. 3,345 108,445 St. Paul Companies Inc. 2,197 108,340 KeyCorp 4,202 106,363 Waste Management Inc. 6,062 105,706 Nike Inc. "B" 2,632 105,445 Franklin Resources Inc. 2,373 105,432 ConAgra Inc. 5,198 104,285 Molex Inc. 1,913 104,139 TXU Corporation 2,568 101,757 PECO Energy Co. 1,653 100,110 Pitney Bowes Inc. 2,514 99,146 Paine Webber Group Inc. 1,441 $ 98,168 Xerox Corp. 6,500 97,906 AON Corp. 2,491 97,772 Unicom Corp. 1,711 96,137 Public Service Enterprise Group Inc. 2,108 94,201 Raytheon Co. "B" 3,310 94,128 Union Pacific Corp. 2,413 93,805 Dover Corp. 1,977 92,795 Limited Inc. 4,184 92,310 Xcel Energy Inc. 3,331 91,603 PG&E Corp. 3,756 90,848 Nabisco Group Holdings Corp. "A" 3,179 90,601 Clorox Co. 2,284 90,361 Lincoln National Corp. 1,866 89,801 Comerica Inc. 1,523 89,000 Weyerhaeuser Co. 2,147 86,685 Albertson's Inc. 4,108 86,268 USX-Marathon Group Inc. 3,038 86,203 McKesson HBOC Inc. 2,789 85,239 Marriott International Inc. 2,335 85,082 Burlington Northern Santa Fe Corp. 3,944 85,043 Unocal Corp. 2,368 83,916 Delphi Automotive Systems Corp. 5,497 83,142 Masco Corp. 4,446 82,807 Golden West Financial Corp. 1,540 82,583 Apple Computer Inc.+ 3,169 81,602 Entergy Corp. 2,172 80,907 Air Products & Chemicals Inc. 2,236 80,496 Loews Corp. 963 80,290 Aetna Inc. 1,371 79,604 Occidental Petroleum Corp. 3,591 78,329 Cendant Corp.+ 7,134 77,582 Burlington Resources Inc. 2,095 77,122 Deere & Co. 2,280 75,810 PeopleSoft Inc.+ 2,711 75,739 KLA-Tencor Corp.+ 1,809 74,508 Devon Energy Corp. 1,235 74,285 Starbucks Corp.+ 1,821 72,954 Constellation Energy Group Inc. 1,460 72,635 Hershey Foods Corp. 1,335 72,257 Apache Corp. 1,201 71,009 Advanced Micro Devices Inc.+ 2,996 70,780 Ralston Purina Co. 2,980 70,589 Consolidated Edison Inc. 2,067 70,536 National Semiconductor Corp.+ 1,716 69,069 Danaher Corp. 1,382 68,754 -------------------------------------------------------------------------------- iShares Schedules of Investments page 23 iShares S&P 500/BARRA Value Index Fund Schedule of Investments (continued) September 30, 2000 (unaudited) Security Shares Value -------------------------------------------------------------- COMMON STOCKS (continued) -------------------------------------------------------------- MBIA Inc. 962 $ 68,422 Jefferson-Pilot Corp. 1,005 68,214 PPG Industries Inc. 1,695 67,270 Bear Stearns Companies Inc. 1,050 66,150 Coca-Cola Enterprises Inc. 4,110 65,503 Boston Scientific Corp.+ 3,971 65,273 New York Times Co. "A" 1,655 65,062 Becton Dickinson & Co. 2,457 64,957 Textron Inc. 1,405 64,806 CP&L Energy Inc. 1,554 64,782 Watson Pharmaceutical Inc.+ 994 64,486 TJX Companies Inc. 2,856 64,260 UNUMProvident Corp. 2,349 64,010 Northrop Grumman Corp. 702 63,794 May Department Stores Co. 3,102 63,591 Staples Inc.+ 4,443 63,035 MGIC Investment Corp. 1,030 62,959 Rohm & Haas Co. "A" 2,122 61,671 Alcan Aluminium Ltd. 2,131 61,666 Edison International 3,186 61,530 Fort James Corp. 2,009 61,400 FirstEnergy Corp. 2,254 60,717 Kerr-McGee Corp. 916 60,685 Biomet Inc. 1,730 60,550 Newell Rubbermaid Inc. 2,599 59,290 Novellus Systems Inc.+ 1,273 59,274 Summit Bancorp 1,714 59,133 PP&L Resources Inc. 1,414 59,035 Barrick Gold Corp. 3,871 59,033 Amerada Hess Corp. 880 58,905 Synovus Financial Corp. 2,755 58,372 Wellpoint Health Networks Inc.+ 606 58,176 Progressive Corporation 709 58,049 Praxair Inc. 1,537 57,445 Ameren Corp. 1,336 55,945 Cincinnati Financial Corp. 1,570 55,735 Columbia Energy Group 784 55,664 Price (T. Rowe) Associates 1,172 55,011 Norfolk Southern Corp. 3,747 54,800 Tiffany & Co. 1,410 54,373 Rockwell International Corp. 1,790 54,148 Dollar General Corp. 3,209 53,751 Ingersoll-Rand Co. 1,577 53,421 Archer-Daniels-Midland Co. 6,178 53,284 DTE Energy Co. 1,391 $ 53,206 Federated Department Stores Inc.+ 2,036 53,191 Delta Air Lines Inc. 1,195 53,028 KeySpan Corp. 1,305 52,363 Cabletron Systems Inc.+ 1,780 52,287 SouthTrust Corp. 1,634 51,369 Cinergy Corp. 1,542 50,982 Florida Progress Corp. 956 50,608 Charter One Financial Inc. 2,049 49,938 TRW Inc. 1,228 49,888 PerkinElmer Inc. 475 49,578 Union Carbide Corp. 1,312 49,528 Regions Financial Corp. 2,140 48,551 AMR Corp.+ 1,469 48,018 Mattel Inc. 4,164 46,585 CSX Corp. 2,130 46,461 Amsouth Bancorp 3,682 46,025 BMC Software Inc.+ 2,402 45,938 Ecolab Inc. 1,267 45,691 Circuit City Stores Inc. 1,980 45,540 CIT Group Inc. (The) 2,565 44,887 Tosco Corp. 1,429 44,567 Johnson Controls Inc. 830 44,146 Union Planters Corp. 1,323 43,742 Eaton Corp. 707 43,569 Thermo Electron Corp.+ 1,672 43,472 Harcourt General Inc. 718 42,362 Pinnacle West Capital Corp. 815 41,463 Countrywide Credit Industries Inc. 1,098 41,449 St. Jude Medical Inc.+ 811 41,361 Hilton Hotels Corp. 3,559 41,151 Sempra Energy 1,974 41,084 Fortune Brands Inc. 1,544 40,916 Ceridian Corp.+ 1,418 39,793 Goodrich (B.F.) Co. 1,007 39,462 Georgia-Pacific Corp. 1,666 39,151 Vulcan Materials Co. 973 39,102 Old Kent Financial Corp. 1,342 38,834 GPU Inc. 1,183 38,374 Knight Ridder Inc. 735 37,347 CenturyTel Inc. 1,362 37,114 Parker Hannifin Corp. 1,083 36,551 Tektronix Inc. 475 36,486 Sabre Holdings Corp. 1,259 36,432 Brown-Forman Corp. "B" 664 36,354 Huntington Bancshares Inc. 2,457 36,087 -------------------------------------------------------------------------------- page 24 iShares iShares S&P 500/BARRA Value Index Fund Schedule of Investments (continued) September 30, 2000 (Unaudited) Security Shares Value -------------------------------------------------------------- COMMON STOCKS (continued) -------------------------------------------------------------- Block (H & R) Inc. 948 $ 35,135 NCR Corp.+ 929 35,128 Torchmark Corp. 1,252 34,821 Toys R Us Inc.+ 2,127 34,564 Unisys Corp.+ 3,057 34,391 Sherwin-Williams Co. 1,598 34,157 SAFECO Corp. 1,247 33,981 Genuine Parts Co. 1,722 32,826 Cooper Industries Inc. 909 32,042 Phelps Dodge Corp. 766 31,981 Dana Corp. 1,486 31,949 Novell Inc.+ 3,182 31,621 Harrah's Entertainment Inc.+ 1,136 31,240 Placer Dome Inc. 3,283 30,983 Leggett & Platt Inc. 1,919 30,344 Healthsouth Corp.+ 3,701 30,071 Willamette Industries Inc. 1,070 29,960 Compuware Corp.+ 3,572 29,916 Penney (J.C.) Company Inc. 2,531 29,897 Mallinckrodt Group Inc. 651 29,702 Donnelley (R.R.) & Sons Co. 1,193 29,303 Parametric Technology Corp.+ 2,661 29,105 CMS Energy Corp. 1,076 28,985 Inco Ltd.+ 1,790 28,864 ITT Industries Inc. 874 28,350 AutoZone Inc.+ 1,248 28,314 Kmart Corp.+ 4,687 28,122 Newmont Mining Corp. 1,628 27,676 Eastman Chemical Co. 747 27,592 VF Corp. 1,117 27,576 PACCAR Inc. 744 27,575 Black & Decker Corp. 802 27,418 Goodyear Tire & Rubber Co. 1,514 27,252 Rowan Companies Inc.+ 931 26,999 Whirlpool Corp. 685 26,629 Sigma-Aldrich Corp. 794 26,202 Westvaco Corp. 967 25,807 Darden Restaurants Inc. 1,200 24,975 Niagara Mohawk Holdings Inc.+ 1,569 24,712 Grainger (W.W.) Inc. 931 24,497 Conseco Inc. 3,182 24,263 Office Depot Inc.+ 3,082 24,078 Nucor Corp. 792 23,859 Pall Corp. 1,184 23,606 Maytag Corp. 757 $ 23,514 Sunoco Inc. 868 23,382 Mead Corp. 987 23,071 Ashland Inc. 683 23,009 Coors (Adolph) Company "B" 361 22,811 Fluor Corp. 760 22,800 Wendy's International Inc. 1,106 22,189 Bausch & Lomb Inc. 532 20,715 Engelhard Corp. 1,273 20,686 Bard (C.R.) Inc. 488 20,618 FMC Corp.+ 304 20,387 Andrew Corp.+ 777 20,348 Stanley Works (The) 878 20,249 Liz Claiborne Inc. 522 20,097 Super Value Inc. 1,326 19,973 Nordstrom Inc. 1,279 19,904 Winn-Dixie Stores Inc. 1,383 19,881 Adaptec Inc.+ 978 19,560 Visteon Corp. 1,290 19,511 Temple-Inland Inc. 513 19,430 Hasbro Inc. 1,688 19,307 Pactiv Corp.+ 1,704 19,064 Centex Corp. 589 18,922 Quintiles Transnational Corp.+ 1,144 18,233 Allied Waste Industries Inc.+ 1,900 17,456 International Flavors & Fragrances Inc. 955 17,429 Navistar International Corp.+ 576 17,244 Bemis Co. 532 17,090 Humana Inc.+ 1,581 16,996 Eastern Enterprises 266 16,974 NICOR Inc. 445 16,103 Manor Care Inc.+ 1,026 16,095 Alberto-Culver Co. "B" 551 15,876 Brunswick Corp. 853 15,567 Great Lakes Chemical Corp. 528 15,477 Allegheny Technologies Inc. 851 15,424 Meredith Corp. 515 15,192 Boise Cascade Corp. 570 15,141 Consolidated Stores Corp.+ 1,121 15,133 Hercules Inc. 1,014 14,323 Deluxe Corp. 691 14,036 Autodesk Inc. 547 13,880 Snap-On Inc. 589 13,878 Homestake Mining Company 2,662 13,809 Pulte Corp. 416 13,728 Crane Co. 593 13,565 -------------------------------------------------------------------------------- iShares Schedules of Investments page 25 iShares S&P 500/BARRA Value Index Fund Schedule Of Investments (continued) September 30, 2000 (Unaudited) Shares Or Security Principal Value ---------------------------------------------------------------- COMMON STOCKS (continued) ---------------------------------------------------------------- USX-U.S. Steel Group Inc. 893 $ 13,562 Crown Cork & Seal Co. Inc. 1,237 13,220 Owens-Illinois Inc.+ 1,388 12,839 Kaufman & Broad Home Corp. 475 12,795 Cummins Engine Company Inc. 418 12,514 Peoples Energy Corp. 361 12,048 American Greetings Corp. "A" 646 11,305 ONEOK Inc. 274 10,892 Ryder System Inc. 589 10,860 Reebok International Ltd.+ 555 10,441 Thomas & Betts Corp. 589 10,271 Dillards Inc. "A" 935 9,934 Louisiana-Pacific Corp. 1,064 9,776 Ball Corp. 304 9,633 Potlatch Corp. 285 9,013 Briggs & Stratton Corp. 228 8,621 Worthington Industries Inc. 893 8,372 National Service Industries Inc. 418 8,177 Timken Co. 572 7,829 Cooper Tire & Rubber Co. 760 7,648 Longs Drug Stores Inc. 399 7,631 McDermott International Inc. 589 6,479 Polaroid Corp. 456 6,128 Russell Corp. 323 5,128 Springs Industries Inc. "A" 171 4,820 Armstrong Holdings Inc. 399 4,763 Grace (W.R.) & Company+ 642 4,414 Bethlehem Steel Corp.+ 1,311 3,932 ---------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $57,785,503) 59,772,234 ---------------------------------------------------------------- REPURCHASE AGREEMENT - 0.05% ---------------------------------------------------------------- Investors Bank & Trust Tri Party Repurchase Agreement, dated 09/29/00, due 10/02/00, with a maturity value of $29,678 and an effective yield of 6.25%. $29,663 29,663 ---------------------------------------------------------------- TOTAL REPURCHASE AGREEMENT (Cost: $29,663) 29,663 ---------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 99.98% (Cost $57,815,166) $59,801,897 ---------------------------------------------------------------- Other Assets, Less Liabilities -- 0.02% 12,995 ---------------------------------------------------------------- NET ASSETS -- 100.00% $59,814,892 ================================================================ + Non-income earning securities. See notes to financial statements. -------------------------------------------------------------------------------- page 26 iShares iShares S&P MidCap 400 Index Fund Schedule of Investments September 30, 2000 (Unaudited) Security Shares Value ------------------------------------------------------------------ COMMON STOCKS - 99.92% ------------------------------------------------------------------ Dynegy Inc. 80,966 $ 4,615,062 Vitesse Semiconductor Corp.+ 46,909 4,171,969 Calpine Corp.+ 36,014 3,758,961 Millennium Pharmaceuticals Inc.+ 24,503 3,578,969 Rational Software Corp.+ 48,745 3,381,684 Intuit Inc.+ 53,135 3,028,695 Waters Corp.+ 33,394 2,972,066 Jabil Circuit Inc.+ 49,618 2,815,821 Forest Laboratories Inc. "A"+ 22,786 2,613,269 Integrated Device Technology Inc.+ 27,187 2,460,423 Sepracor Inc.+ 19,116 2,345,294 Stryker Corp. 51,035 2,191,315 Chiron Corp.+ 47,731 2,147,895 QLogic Corp.+ 23,437 2,062,456 IDEC Pharmaceuticals Corp.+ 11,714 2,054,160 Univision Communications Inc.+ 53,820 2,011,523 Nabors Industries Inc.+ 38,143 1,998,693 Concord EFS Inc.+ 55,554 1,973,035 Fiserv Inc.+ 32,183 1,926,957 DST Systems Inc.+ 16,385 1,925,237 IVAX Corporation+ 41,426 1,905,596 Cintas Corp. 43,734 1,905,162 Atmel Corp.+ 120,423 1,828,924 3Com Corp.+ 92,323 1,771,448 Noble Drilling Corp.+ 34,834 1,750,409 Telephone & Data Systems Inc. 15,668 1,734,448 Electronic Arts Inc.+ 33,933 1,675,442 Cadence Design Systems Inc.+ 64,321 1,652,246 Robert Half International Inc.+ 46,688 1,619,490 CDW Computer Centers Inc.+ 22,832 1,575,408 SCI Systems Inc.+ 37,831 1,551,071 Genzyme General Division+ 22,543 1,537,151 Minimed Inc.+ 16,726 1,494,886 SunGard Data Systems Inc.+ 34,458 1,475,233 Micrel Inc.+ 21,980 1,472,660 Broadwing Inc.+ 56,336 1,440,089 Global Marine Inc.+ 45,824 1,414,816 ENSCO International Inc. 36,091 1,380,481 NVIDIA Corp.+ 16,823 1,377,383 Quest Diagnostics Inc.+ 11,929 1,368,853 Marshall & Ilsley Corp. 27,154 1,361,094 Transwitch Corp.+ 21,343 1,360,616 Gilead Sciences Inc.+ 12,203 1,338,517 Ambac Financial Group Inc. 18,242 1,336,226 BJ Services Co.+ 21,694 $ 1,326,046 Health Management Associates Inc. "A"+ 63,413 1,319,783 Cypress Semiconductor Corp.+ 31,499 1,309,177 Washington Post Company (The) "B" 2,463 1,300,156 Symbol Technologies Inc. 35,844 1,288,144 E*trade Group Inc.+ 78,342 1,287,747 Polycom Inc.+ 18,524 1,240,529 Kinder Morgan Inc. 29,856 1,222,230 Weatherford International Inc.+ 28,352 1,219,136 Park Place Entertainment Corp.+ 78,425 1,186,178 SPX Corp.+ 8,264 1,172,972 Zions Bancorp 22,689 1,160,330 Dollar Tree Stores Inc.+ 28,049 1,137,738 Edwards (A.G.) Inc. 21,502 1,124,823 Vishay Intertechnology Inc.+ 36,058 1,108,784 Macromedia Inc.+ 13,643 1,102,525 Allegheny Energy Inc. 28,844 1,101,480 Smith International Inc.+ 13,157 1,073,118 National Commerce Bancorp 53,061 1,057,904 DPL Inc. 34,547 1,027,773 Microchip Technology Inc.+ 31,014 1,025,400 Cooper Cameron Corp.+ 13,848 1,020,425 North Fork Bancorp 45,440 982,640 SEI Investment Co. 13,886 982,435 Readers Digest Association Inc. (The) "A" 27,485 970,564 TECO Energy Inc. 32,789 942,684 Legg Mason Inc. 15,924 925,583 Montana Power Co. 27,616 921,684 Wind River Systems Inc.+ 18,902 906,115 Allmerica Financial Corp. 13,854 885,790 Mylan Laboratories Inc. 32,571 877,381 Arrow Electronics Inc.+ 25,587 871,557 Family Dollar Stores Inc. 44,757 861,572 R.J. Reynolds Tobacco Holdings Inc. 26,657 859,688 SCANA Corp. 27,380 845,358 First Security Corp. 51,645 842,459 Northeast Utilities 38,825 842,017 LG&E Energy Corp. 33,912 828,725 Jones Apparel Group Inc.+ 31,003 821,579 CheckFree Corp.+ 19,541 818,585 Network Associates Inc.+ 36,020 814,953 American Standard Companies Inc.+ 18,267 811,740 International Rectifier Corp.+ 16,037 810,871 Hispanic Broadcasting Corp.+ 28,400 791,650 TCF Financial Corp. 20,994 789,899 Greenpoint Financial Corp. 26,652 789,566 -------------------------------------------------------------------------------- iShares Schedules of Investments page 27 iShares S&P MidCap 400 Index Fund Schedule of Investments (continued) September 30, 2000 (Unaudited) Security Shares Value ------------------------------------------------------------------ COMMON STOCKS (Continued) ------------------------------------------------------------------ Apollo Group Inc.+ 19,628 $ 782,667 PMI Group Inc. (The) 11,545 782,174 NiSource Inc. 31,694 772,541 Energy East Corp. 34,139 772,395 Murphy Oil Corp. 11,770 762,843 Comdisco Inc. 39,794 758,573 Chris-Craft Industries Inc.+ 9,125 751,672 Potomac Electric Power Co. 29,656 746,961 TriQuint Semiconductor Inc.+ 20,429 744,382 Old Republic International Corp. 30,632 737,083 Semtech Corp.+ 17,042 734,936 Acxiom Corp.+ 23,070 732,472 Hillenbrand Industries Inc. 16,342 731,304 Express Scripts Inc. "A"+ 9,919 716,648 Synopsys Inc.+ 18,663 706,861 American Water Works Inc. 25,641 706,730 Symantec Corp.+ 15,952 701,888 Cirrus Logic Inc.+ 17,233 694,705 Lattice Semiconductor Corp.+ 12,906 693,698 First Tennessee National Corp. 33,913 693,097 ICN Pharmaceuticals Inc. 20,728 689,206 Incyte Pharmaceuticals Inc.+ 16,720 687,610 DeVry Inc.+ 18,159 683,232 Avnet Inc. 23,870 677,311 Banknorth Group Inc. 37,801 675,693 Ocean Energy Inc.+ 43,635 673,615 Oxford Health Plans Inc.+ 21,895 672,929 Southdown Inc. 9,370 667,613 Mercantile Bankshares Corp. 18,356 666,265 Waddell & Reed Financial Inc. "A" 21,474 665,694 Tidewater Inc. 14,538 661,479 Miller (Herman) Inc. 20,572 659,590 Sybron International Corp.+ 27,449 658,776 BJ's Wholesale Club Inc.+ 19,103 651,890 Viad Corp. 24,503 650,861 Affiliated Computer Services Inc.+ 12,923 644,535 International Game Technology Inc.+ 18,946 637,059 Wisconsin Energy Corp. 31,870 635,408 Manpower Inc. 19,817 632,906 Utilicorp United Inc. 24,226 626,848 Westwood One Inc.+ 29,217 626,339 CH Robinson Worldwide Inc. 11,048 622,658 Grant Prideco Inc.+ 28,308 621,007 DQE Inc. 15,453 620,052 Avocent Corporation+ 11,231 $ 619,109 Compass Bancshares Inc. 31,614 616,473 Dime Bancorp Inc. 28,547 615,545 MarchFirst Inc.+ 39,200 614,950 Shaw Industries Inc. 33,114 612,609 Energizer Holdings Inc.+ 24,978 611,961 Powerwave Technologies Inc.+ 16,092 610,993 Hormel Foods Corp. 36,602 610,796 Bowater Inc. 13,108 608,703 Alliant Energy Corp. 20,615 605,566 MCN Energy Group Inc. 23,589 604,468 Beckman Coulter Inc. 7,725 595,791 Tech Data Corp.+ 13,872 593,028 Everest Re Group Ltd. 11,978 592,905 Tyson Foods Inc. "A" 58,871 588,710 Quantum DLT & Storage Group+ 38,953 586,730 Questar Corp. 20,905 581,420 Ultramar Diamond Shamrock Corp. 22,730 576,774 National Fuel Gas Co. 10,264 575,426 Fastenal Co. 9,900 570,488 NSTAR 14,095 567,324 Belo (A.H.) Corp. 30,725 566,492 Puget Sound Energy Inc. 22,300 565,863 Valero Energy Corp. 16,065 565,287 Unitrin Inc. 17,832 565,052 Georgia-Pacific (Timber Group) 20,858 560,559 Outback Steakhouse Inc.+ 20,344 551,831 Cabot Corp. 17,335 549,303 Sovereign Bancorp Inc. 59,081 546,499 International Speedway Corp. "A" 13,883 541,437 Noble Affiliates Inc. 14,575 541,097 Sybase Inc.+ 23,228 534,244 McCormick & Co. Inc. 17,883 532,019 Foundation Health Systems Inc.+ 31,941 531,019 FirstMerit Corp. 23,098 529,810 Litton Industries Inc.+ 11,814 527,938 Mandalay Resort Group Inc.+ 20,384 522,340 Infocus Corp.+ 9,855 522,315 GATX Corporation 12,417 519,962 Trigon Healthcare Inc.+ 9,836 517,005 First Virginia Banks Inc. 12,067 514,356 Harris Corp. 18,079 514,122 Brinker International Inc.+ 17,051 513,661 Astoria Financial Corp. 13,280 512,940 IPALCO Enterprises Inc. 22,394 512,263 Hibernia Corp. "A" 41,567 509,196 -------------------------------------------------------------------------------- page 28 iShares iShares S&P MidCap 400 Index Fund Schedule of Investments (continued) September 30, 2000 (Unaudited) Security Shares Value ------------------------------------------------------------------ COMMON STOCKS (continued) ------------------------------------------------------------------ Flowers Industries Inc. 26,089 $ 508,735 Varco International Inc.+ 24,275 505,223 IBP Inc. 27,579 505,040 Protective Life Corp. 16,873 504,081 Williams-Sonoma Inc.+ 14,501 503,910 Hanover Compressor Co.+ 15,294 503,746 Abercrombie & Fitch Co.+ 26,341 502,125 Precision Castparts Corp. 12,928 496,112 Diebold Inc. 18,608 494,275 L-3 Communications Holdings Inc.+ 8,696 491,324 Harte-Hanks Inc. 17,707 482,516 City National Corp. 12,459 481,229 MONY Group Inc. 12,062 480,972 Lennar Corp. 16,095 477,820 Dentsply International Inc. 13,520 472,355 Helmerich & Payne Inc. 13,034 470,853 Associated Bancorp 17,914 470,243 Sonoco Products Co. 26,006 469,733 Martin Marietta Materials Inc. 12,224 467,935 Quanta Services Inc.+ 16,797 461,918 IDACorp Inc. 9,827 454,499 Wilmington Trust Corp. 8,435 452,327 United Rentals Inc.+ 18,360 442,935 IMC Global Inc. 29,987 434,811 OGE Energy Corp. 20,336 433,411 Kansas City Power & Light Co. 16,153 431,083 ADTRAN Inc.+ 10,110 430,149 ALLETE 19,393 429,070 Sawtek Inc.+ 11,112 427,986 VISX Inc.+ 15,807 425,801 Atlas Air Inc.+ 9,958 420,725 Conectiv Inc. 23,217 415,004 Whitman Corp. 35,618 411,833 Bergen Brunswig Corp. "A" 35,196 411,353 First Health Group Corp.+ 12,660 408,285 Neiman-Marcus Group Inc. "A"+ 12,401 402,257 Credence Systems Corp.+ 13,339 400,170 Lincare Holdings Inc.+ 13,923 399,416 Reynolds & Reynolds Co. "A" 20,025 397,997 Hubbell Inc. "B" 15,842 397,040 CSG Systems International Inc.+ 13,680 396,720 Mentor Graphics Corp.+ 16,761 394,931 Western Resources Inc. 18,117 391,780 Omnicare Inc. 24,072 388,161 HON Industries Inc. 15,713 $ 386,933 American Eagle Outfitters Inc.+ 12,193 384,079 Sotheby's Holdings Inc. 15,385 382,702 Roslyn Bancorp Inc. 16,918 378,540 Provident Financial Group Inc. 12,734 374,061 Webster Financial Corp. 13,881 373,919 Sierra Pacific Resources Corp. 20,488 368,784 Suiza Foods Corp.+ 7,272 368,600 Pioneer Natural Resources Co.+ 25,927 367,839 Saks Inc.+ 36,911 364,496 Lyondell Chemical Co. 30,707 362,726 Galileo International Inc. 23,392 362,576 Clayton Homes Inc. 36,036 360,360 Greater Bay Bancorp 5,188 360,242 Storage Technology Corp.+ 26,531 359,827 ACNielsen Corp.+ 15,102 359,616 Lear Corp.+ 17,274 355,197 Pacific Century Financial Corp. 20,741 355,190 American Financial Group Inc. 15,290 354,537 Cytec Industries Inc.+ 10,591 354,137 Scholastic Corp.+ 4,429 352,382 Newport News Shipbuilding Inc. 7,974 345,872 Teleflex Inc. 9,984 343,200 Pentair Inc. 12,673 339,003 Edwards Lifesciences Corp.+ 15,260 332,859 Lee Enterprises Inc. 11,456 330,792 Barnes & Noble Inc.+ 16,763 330,022 Commscope Inc.+ 13,421 328,814 Carlisle Companies Inc. 7,921 328,721 Payless Shoesource Inc.+ 5,822 326,032 Washington Gas Light Co. 12,127 325,913 Investment Technology Group Inc.+ 8,129 324,652 Vectren Corporation 15,970 324,391 Six Flags Inc.+ 20,545 318,448 PacifiCare Health Systems Inc. "A"+ 9,119 317,455 Solutia Inc. 27,814 316,384 Keane Inc.+ 18,169 316,141 Valassis Communications Inc.+ 14,160 315,060 Westamerica Bancorp 9,409 314,613 Houghton Mifflin Co. 8,009 314,353 NOVA Corporation+ 18,301 313,405 Ross Stores Inc. 21,653 311,262 Dean Foods Co. 9,261 307,928 Informix Corp.+ 74,145 305,848 Legato Systems Inc.+ 22,698 305,004 HSB Group Inc. 7,601 304,990 -------------------------------------------------------------------------------- iShares Schedules of Investments page 29 iShares S&P MidCap 400 Index Fund Schedule of Investments (continued) September 30, 2000 (Unaudited) Security Shares Value ------------------------------------------------------------------ COMMON STOCKS (continued) ------------------------------------------------------------------ Mohawk Industries Inc.+ 13,893 $ 303,041 Callaway Golf Co. 19,704 302,949 Sensormatic Electronics Corp.+ 20,108 301,620 Hawaiian Electric Industries Inc. 8,536 297,693 Blyth Industries Inc. 12,508 293,156 ANTEC Corp.+ 9,900 292,050 USG Corp. 11,606 290,875 Carter-Wallace Inc. 11,808 288,558 Dial Corp. 24,760 287,835 Borders Group Inc.+ 20,531 286,151 AGL Resources Inc. 14,137 283,624 CNF Transportation Inc. 12,674 281,996 Jacobs Engineering Group Inc.+ 6,844 275,899 Alexander & Baldwin Inc. 10,596 275,496 Keystone Financial Inc. 12,614 274,355 Cleco Corp. 5,856 273,768 Lubrizol Corp. 13,899 273,637 ArvinMeritor Inc. 18,509 271,851 AK Steel Holding Corp. 28,619 268,303 Public Service Company of New Mexico 10,321 267,056 DSP Group Inc.+ 7,000 261,625 Donaldson Co. Inc. 11,831 260,282 Universal Foods Corp. 12,752 259,822 Media General Inc. "A" 6,028 259,204 Valspar Corp. 11,130 255,879 Rayonier Inc. 7,093 254,905 Interstate Bakeries Corp. 17,261 252,442 Lancaster Colony Corp. 10,226 251,176 RPM Inc. 27,445 248,720 York International Corp. 9,920 246,760 Minerals Technologies Inc. 5,345 245,870 Gartner Group Inc. "B"+ 22,479 244,459 Quorum Health Group Inc.+ 18,656 242,528 Overseas Shipholding Group Inc. 8,856 242,433 Albemarle Corp. 12,003 242,311 Claire's Stores Inc. 13,428 241,704 Nordson Corp. 8,409 239,131 Federal Signal Corp. 11,867 235,857 Crompton Corp. 29,725 234,084 Trinity Industries Inc. 9,912 231,693 Titan Corp. (The)+ 14,020 231,330 Harsco Corp. 10,425 230,002 Borg-Warner Automotive Inc. 6,854 227,039 Kelly Services Inc. "A" 9,364 221,225 Dole Food Co. 14,631 $ 219,465 Universal Corporation 7,392 217,140 Swift Transportation Co. Inc.+ 16,567 216,406 Furniture Brands International Inc.+ 13,005 216,208 Pennzoil-Quaker State Co. 20,464 214,872 Modine Manufacturing Co. 7,625 214,811 CBRL Group Inc. 14,941 214,777 Steris Corp.+ 17,672 212,064 Pittston Brink's Group 13,566 210,273 Tecumseh Products Co. "A" 4,995 209,166 Kennametal Inc. 7,926 204,095 Superior Industries International Inc. 6,778 203,340 Bandag Inc. 5,428 195,069 Apria Healthcare Group Inc.+ 13,710 191,083 Olin Corp. 11,757 190,316 AGCO Corp. 15,512 184,205 Church & Dwight Co. Inc. 9,969 183,180 Kaydon Corp. 7,841 180,343 AMETEK Inc. 8,340 176,704 Ogden Corp.+ 12,922 175,255 Granite Construction Inc. 7,145 173,266 Horace Mann Educators Corp. 10,578 173,215 Imation Corp.+ 9,252 172,319 Ferro Corp. 9,025 172,039 Bob Evans Farms Inc. 9,233 170,810 Black Hills Corp. 6,004 168,487 Carpenter Technology Corp. 5,752 167,527 Ruddick Corp. 12,030 166,916 Lands' End Inc.+ 7,932 166,572 Alaska Air Group Inc.+ 6,924 166,176 Acuson Corp.+ 7,225 164,369 Longview Fibre Co. 13,450 161,400 Wallace Computer Services Inc. 10,505 160,201 Flowserve Corp. 9,746 160,200 Banta Corp. 6,534 159,266 Dreyer's Grand Ice Cream Inc. 7,371 158,937 Papa John's International Inc.+ 6,337 158,821 Westpoint Stevens Inc. 12,925 158,331 Structural Dynamics Research Corp.+ 9,433 154,465 Smucker (J.M) Company (The)+ 6,304 153,266 Unifi Inc.+ 14,903 151,824 GTECH Holdings Corp.+ 9,113 150,934 UCAR International Inc.+ 11,828 150,068 Sylvan Learning Systems Inc.+ 9,597 142,156 Transaction Systems Architects Inc. "A"+ 8,667 140,839 Wisconsin Central Transportation Corp.+ 12,879 136,034 -------------------------------------------------------------------------------- page 30 iShares iShares S&P MidCap 400 Index Fund Schedule of Investments (continued) September 30, 2000 (Unaudited) Security Shares Value ------------------------------------------------------------------ COMMON STOCKS (continued) ------------------------------------------------------------------ Glatfelter (P.H.) Co. 11,100 $ 134,588 Perrigo Co.+ 19,219 131,530 Modis Professional Services Inc.+ 25,262 131,047 Airborne Freight Corp. 12,753 129,921 Stewart & Stevenson Services Inc. 7,334 127,887 Mynd Corp.+ 9,208 124,308 Covance Inc.+ 15,013 122,919 Wellman Inc. 8,311 119,990 Airgas Inc.+ 17,361 118,272 Hunt (J.B.) Transport Services Inc. 9,204 117,351 Rollins Inc. 7,864 116,486 Finova Group Inc. 16,060 116,435 Sequa Corp. "A"+ 2,717 115,473 Standard Register Co. 7,168 114,688 Arnold Industries Inc. 6,437 108,624 Fuller (H. B.) Co. 3,695 106,231 OfficeMax Inc.+ 29,588 105,407 Wausau-Mosinee Paper Corp. 13,456 104,284 Federal-Mogul Corp. 18,471 100,436 Ohio Casualty Corp. 15,738 99,838 Albany International Corp.+ 8,024 96,288 Georgia Gulf Corp. 8,247 94,325 International Multifoods Corp. 4,905 85,224 Schulman (A.) Inc. 7,726 84,986 NCO Group Inc.+ 6,705 79,622 Chesapeake Corp. 4,012 77,231 Lance Inc. 7,581 73,678 Cambridge Technology Partners Inc.+ 16,520 72,275 PSS World Medical Inc.+ 18,619 67,494 Magnetek Inc.+ 6,095 64,759 Cleveland-Cliffs Inc. 2,761 63,158 Ryerson Tull Inc. 6,487 61,221 Sykes Enterprises Inc.+ 10,840 58,265 Warnaco Group Inc. "A" 13,754 55,016 Stewart Enterprises Inc. "A" 27,953 54,159 NCH Corp. 1,386 48,943 Lone Star Steakhouse & Saloon Inc. 6,630 48,896 Navigant Consulting Co.+ 10,598 36,431 MAXXAM Inc.+ 1,766 35,099 Ethyl Corp. 22,111 31,785 ------------------------------------------------------------------ TOTAL COMMON STOCKS (Cost: $242,967,816) 253,175,179 ------------------------------------------------------------------ Security Principal Value ------------------------------------------------------------------ SHORT TERM INSTRUMENTS - 5.49% ------------------------------------------------------------------ Freddie Mac Discount Note 6.46%, 10/24/00++ $1,914,200 $ 1,914,200 Goldman Sachs Financial Square Prime Obligation Fund++ 3,650,785 3,650,785 Providian Temp Cash Money Market Fund++ 2,351,328 2,351,328 Short Term Investment Company Liquid Assets Portfolio++ 5,993,412 5,993,412 ------------------------------------------------------------------ TOTAL SHORT TERM INSTRUMENTS (Cost: $13,909,725) 13,909,725 ------------------------------------------------------------------ REPURCHASE AGREEMENT - 0.04% ------------------------------------------------------------------ Investors Bank & Trust Tri Party Repurchase Agreement, dated 09/29/00, due 10/02/00, with a maturity value of $103,563 and an effective yield of 6.25%. 103,509 103,509 ------------------------------------------------------------------ TOTAL REPURCHASE AGREEMENT (Cost: $103,509) 103,509 ------------------------------------------------------------------ TOTAL INVESTMENTS IN SECURITIES -- 105.45% (Cost $256,981,050) 267,188,413 ------------------------------------------------------------------ Other Assets, Less Liabilities -- (5.45%) (13,799,405) ------------------------------------------------------------------ NET ASSETS -- 100.00% $253,389,008 ================================================================== + Non-income earning securities. ++ Represents investment of collateral received from securities lending transactions. See Note 5. See notes to financial statements. -------------------------------------------------------------------------------- iShares Schedules of Investments page 31 iShares S&P MidCap 400/BARRA Growth Index Fund Schedule of Investments September 30, 2000 (Unaudited) Security Shares Value -------------------------------------------------------------- COMMON STOCKS - 100.00% -------------------------------------------------------------- Dynegy Inc. 21,480 $ 1,224,359 Vitesse Semiconductor Corp.+ 12,424 1,104,960 Calpine Corp.+ 9,536 995,320 Millennium Pharmaceuticals Inc.+ 6,484 947,069 Rational Software Corp.+ 12,918 896,186 Intuit Inc.+ 14,091 803,187 Waters Corp.+ 8,840 786,760 Jabil Circuit Inc.+ 13,149 746,206 Forest Laboratories Inc. "A"+ 6,040 692,713 Integrated Device Technology Inc.+ 7,206 652,143 Sepracor Inc.+ 5,060 620,799 Stryker Corp. 13,521 580,558 Chiron Corp.+ 12,659 569,655 QLogic Corp.+ 6,216 547,008 IDEC Pharmaceuticals Corp.+ 3,101 543,789 Univision Communications Inc.+ 14,258 532,893 Nabors Industries Inc.+ 10,110 529,764 Concord EFS Inc.+ 14,716 522,648 Fiserv Inc.+ 8,526 510,494 IVAX Corporation+ 10,974 504,804 Cintas Corp. 11,584 504,628 Atmel Corp.+ 31,932 484,967 3Com Corp.+ 24,460 469,326 Noble Drilling Corp.+ 9,235 464,059 Electronic Arts Inc.+ 8,982 443,486 Cadence Design Systems Inc.+ 17,044 437,818 Robert Half International Inc.+ 12,374 429,223 CDW Computer Centers Inc.+ 6,044 417,036 SCI Systems Inc.+ 10,025 411,025 Genzyme General Division+ 5,969 407,011 Minimed Inc.+ 4,438 396,646 Micrel Inc.+ 5,826 390,342 Global Marine Inc.+ 12,139 374,792 ENSCO International Inc. 9,564 365,823 NVIDIA Corp.+ 4,456 364,835 Quest Diagnostics Inc.+ 3,161 362,725 Transwitch Corp.+ 5,632 359,040 Gilead Sciences Inc.+ 3,231 354,400 BJ Services Co.+ 5,744 351,102 Cypress Semiconductor Corp.+ 8,350 347,047 Symbol Technologies Inc. 9,500 341,406 Polycom Inc.+ 4,908 328,683 SPX Corp.+ 2,184 309,992 Dollar Tree Stores Inc.+ 7,421 301,014 Vishay Intertechnology Inc.+ 9,554 293,786 Macromedia Inc.+ 3,616 292,218 Smith International Inc.+ 3,499 $ 285,387 National Commerce Bancorp 14,059 280,301 DPL Inc. 9,145 272,064 Microchip Technology Inc.+ 8,192 270,831 Cooper Cameron Corp.+ 3,670 270,433 SEI Investment Co. 3,680 260,360 Readers Digest Association Inc. (The) "A" 7,285 257,252 Legg Mason Inc. 4,221 245,346 Montana Power Co. 7,305 243,804 Wind River Systems Inc.+ 5,010 240,167 Family Dollar Stores Inc. 11,894 228,959 CheckFree Corp.+ 5,176 216,826 Network Associates Inc.+ 9,540 215,842 American Standard Companies Inc.+ 4,840 215,077 International Rectifier Corp.+ 4,250 214,891 Hispanic Broadcasting Corp.+ 7,531 209,927 Apollo Group Inc.+ 5,200 207,350 TriQuint Semiconductor Inc.+ 5,386 196,252 Semtech Corp.+ 4,508 194,408 Acxiom Corp.+ 6,075 192,881 Synopsys Inc.+ 4,920 186,345 Cirrus Logic Inc.+ 4,585 184,833 Symantec Corp.+ 4,200 184,800 ICN Pharmaceuticals Inc. 5,530 183,872 Lattice Semiconductor Corp.+ 3,420 183,825 DeVry Inc.+ 4,831 181,766 Oxford Health Plans Inc.+ 5,766 177,214 Waddell & Reed Financial Inc. "A" 5,681 176,111 Sybron International Corp.+ 7,280 174,720 Miller (Herman) Inc. 5,445 174,580 BJ's Wholesale Club Inc.+ 5,065 172,843 International Game Technology Inc.+ 5,020 168,797 Manpower Inc. 5,246 167,544 Westwood One Inc.+ 7,790 166,998 CH Robinson Worldwide Inc. 2,926 164,908 Grant Prideco Inc. + 7,511 164,773 Avocent Corporation+ 2,974 163,942 Powerwave Technologies Inc.+ 4,270 162,127 Beckman Coulter Inc. 2,039 157,258 Fastenal Co. 2,624 151,208 Georgia-Pacific (Timber Group) 5,535 148,753 McCormick & Co. Inc. 4,735 140,866 Infocus Corp.+ 2,610 138,330 Williams-Sonoma Inc.+ 3,870 134,483 Varco International Inc.+ 6,416 133,533 Hanover Compressor Co.+ 4,030 132,738 Dentsply International Inc. 3,580 125,076 Quanta Services Inc.+ 4,480 123,200 -------------------------------------------------------------------------------- page 32 iShares iShares S&P MidCap 400/BARRA Growth Index Fund Schedule of Investments (continued) September 30, 2000 (Unaudited) Security Shares Value -------------------------------------------------------------- COMMON STOCKS (continued) -------------------------------------------------------------- United Rentals Inc.+ 4,790 $ 115,559 ADTRAN Inc.+ 2,686 114,281 VISX Inc.+ 4,216 113,569 Sawtek Inc.+ 2,945 113,429 Atlas Air Inc.+ 2,616 110,526 Credence Systems Corp.+ 3,590 107,700 First Health Group Corp.+ 3,334 107,521 CSG Systems International Inc.+ 3,615 104,835 Mentor Graphics Corp.+ 4,435 104,500 Galileo International Inc. 6,265 97,107 Newport News Shipbuilding Inc. 2,095 90,871 Commscope Inc.+ 3,559 87,195 Investment Technology Group Inc.+ 2,155 86,065 Payless Shoesource Inc.+ 1,536 86,016 Solutia Inc. 7,456 84,812 Valassis Communications Inc.+ 3,790 84,328 Keane Inc.+ 4,841 84,233 Westamerica Bancorp 2,515 84,095 Ross Stores Inc. 5,796 83,318 NOVA Corporation+ 4,844 82,954 Informix Corp.+ 19,656 81,081 ANTEC Corp.+ 2,664 78,588 Blyth Industries Inc. 3,349 78,492 Dial Corp. 6,656 77,376 DSP Group Inc.+ 1,880 70,265 Donaldson Co. Inc. 3,135 68,970 Valspar Corp. 2,980 68,510 Gartner Group Inc. "B"+ 5,990 65,141 Nordson Corp. 2,262 64,326 Titan Corp. (The)+ 3,734 61,611 Apria Healthcare Group Inc.+ 3,640 50,732 Papa John's International Inc.+ 1,710 42,857 Dreyer's Grand Ice Cream Inc. 1,975 42,586 Westpoint Stevens Inc. 3,455 42,324 UCAR International Inc.+ 3,160 40,093 Rollins Inc. 2,145 31,773 Georgia Gulf Corp. 2,150 24,591 Sykes Enterprises Inc.+ 3,000 16,125 -------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $33,282,312) 36,505,901 -------------------------------------------------------------- Security Principal Value ---------------------------------------------------------------- REPURCHASE AGREEMENT - 0.04% ---------------------------------------------------------------- Investors Bank & Trust Tri Party Repurchase Agreement, dated 09/29/00, due 10/02/00, with a maturity value of $12,807 and an effective yield of 6.25%. $12,800 $ 12,800 ---------------------------------------------------------------- TOTAL REPURCHASE AGREEMENT (Cost: $12,800) 12,800 ---------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 100.04% (Cost $33,295,112) 36,518,701 ---------------------------------------------------------------- Other Assets, Less Liabilities -- (0.04%) (14,250) ---------------------------------------------------------------- NET ASSETS -- 100.00% $36,504,451 ================================================================ + Non-income earning securities. See notes to financial statements. -------------------------------------------------------------------------------- iShares Schedules of Investments page 33 iShares S&P MidCap 400/BARRA Value Index Fund Schedule of Investments September 30, 2000 (Unaudited) Security Shares Value --------------------------------------------------------------- COMMON STOCKS - 99.86% --------------------------------------------------------------- DST Systems Inc.+ 2,785 $ 327,236 Telephone & Data Systems Inc. 2,665 295,016 SunGard Data Systems Inc.+ 5,840 250,025 Broadwing Inc.+ 9,565 244,505 Marshall & Ilsley Corp. 4,620 231,577 Ambac Financial Group Inc. 3,105 227,441 Health Management Associates Inc. "A"+ 10,760 223,943 Washington Post Company (The) "B" 420 221,708 E*trade Group Inc.+ 13,290 218,454 Kinder Morgan Inc. 5,085 208,167 Weatherford International Inc.+ 4,830 207,690 Park Place Entertainment Corp.+ 13,310 201,314 Zions Bancorp 3,850 196,891 Edwards (A.G.) Inc. 3,655 191,202 Allegheny Energy Inc. 4,890 186,737 North Fork Bancorp 7,740 167,377 TECO Energy Inc. 5,575 160,281 Allmerica Financial Corp. 2,345 149,933 Mylan Laboratories Inc. 5,525 148,830 Arrow Electronics Inc.+ 4,335 147,661 R.J. Reynolds Tobacco Holdings Inc. 4,515 145,609 Northeast Utilities 6,620 143,571 SCANA Corp. 4,630 142,951 First Security Corp. 8,760 142,898 LG&E Energy Corp. 5,730 140,027 Jones Apparel Group Inc.+ 5,281 139,946 TCF Financial Corp. 3,580 134,698 Greenpoint Financial Corp. 4,515 133,757 PMI Group Inc. (The) 1,950 132,113 Energy East Corp. 5,815 131,564 NiSource Inc. 5,360 130,650 Murphy Oil Corp. 1,990 128,977 Comdisco Inc. 6,730 128,291 Potomac Electric Power Co. 5,070 127,701 Chris-Craft Industries Inc.+ 1,545 127,269 Old Republic International Corp. 5,200 125,125 Hillenbrand Industries Inc. 2,775 124,181 Express Scripts Inc. "A"+ 1,680 121,380 American Water Works Inc. 4,360 120,173 First Tennessee National Corp. 5,745 117,413 Incyte Pharmaceuticals Inc.+ 2,830 116,384 Avnet Inc. 4,050 114,919 Banknorth Group Inc. 6,410 114,579 Ocean Energy Inc.+ 7,410 114,392 Southdown Inc. 1,590 113,288 Mercantile Bankshares Corp. 3,110 112,883 Tidewater Inc. 2,465 112,158 Viad Corp. 4,150 110,234 Affiliated Computer Services Inc.+ 2,190 $ 109,226 Wisconsin Energy Corp. 5,390 107,463 Utilicorp United Inc. 4,105 106,217 Dime Bancorp Inc. 4,895 105,548 DQE Inc. 2,625 105,328 Hormel Foods Corp. 6,275 104,714 Compass Bancshares Inc. 5,350 104,325 Bowater Inc. 2,245 104,252 MarchFirst Inc.+ 6,640 104,165 Shaw Industries Inc. 5,620 103,970 Energizer Holdings Inc.+ 4,240 103,880 Alliant Energy Corp. 3,490 102,519 MCN Energy Group Inc. 3,990 102,244 Tech Data Corp.+ 2,350 100,463 Everest Re Group Ltd. 2,025 100,237 Tyson Foods Inc. "A" 9,985 99,850 Quantum DLT & Storage Group+ 6,610 99,563 Questar Corp. 3,540 98,456 Ultramar Diamond Shamrock Corp. 3,875 98,328 National Fuel Gas Co. 1,735 97,268 NSTAR 2,410 97,002 Puget Sound Energy Inc. 3,790 96,171 Belo (A.H.) Corp. 5,215 96,152 Unitrin Inc. 3,020 95,696 Valero Energy Corp. 2,715 95,534 Cabot Corp. 2,970 94,112 Outback Steakhouse Inc.+ 3,445 93,446 Sovereign Bancorp Inc. 10,010 92,593 International Speedway Corp. "A" 2,370 92,430 Noble Affiliates Inc. 2,470 91,699 Sybase Inc.+ 3,970 91,310 Foundation Health Systems Inc.+ 5,420 90,107 Litton Industries Inc.+ 2,015 90,045 FirstMerit Corp. 3,905 89,571 Mandalay Resort Group Inc.+ 3,470 88,919 GATX Corporation 2,105 88,147 Trigon Healthcare Inc.+ 1,665 87,517 Brinker International Inc.+ 2,890 87,061 Harris Corp. 3,055 86,877 First Virginia Banks Inc. 2,035 86,742 IPALCO Enterprises Inc. 3,790 86,696 Hibernia Corp. "A" 7,075 86,669 Astoria Financial Corp. 2,240 86,520 Flowers Industries Inc. 4,420 86,190 IBP Inc. 4,680 85,703 Protective Life Corp. 2,850 85,144 Abercrombie & Fitch Co.+ 4,465 85,114 Precision Castparts Corp. 2,190 84,041 L-3 Communications Holdings Inc.+ 1,485 83,902 Diebold Inc. 3,150 83,672 -------------------------------------------------------------------------------- page 34 iShares iShares S&P MidCap 400/BARRA Value Index Fund Schedule of Investments (continued) September 30, 2000 (Unaudited) Security Shares Value --------------------------------------------------------------- COMMON STOCKS (continued) --------------------------------------------------------------- Harte-Hanks Inc. 3,016 $ 82,186 City National Corp. 2,125 82,078 MONY Group Inc. 2,040 81,345 Lennar Corp. 2,720 80,750 Associated Bancorp 3,055 80,194 Martin Marietta Materials Inc. 2,085 79,814 Helmerich & Payne Inc. 2,200 79,475 Sonoco Products Co. 4,400 79,475 IDACorp Inc. 1,680 77,700 Wilmington Trust Corp. 1,425 76,416 IMC Global Inc. 5,100 73,950 OGE Energy Corp. 3,440 73,315 Kansas City Power & Light Co. 2,730 72,857 ALLETE 3,270 72,349 Conectiv Inc. 3,940 70,427 Whitman Corp. 6,070 70,184 Bergen Brunswig Corp. "A" 5,990 70,008 Neiman-Marcus Group Inc. "A"+ 2,125 68,930 Lincare Holdings Inc.+ 2,380 68,276 Reynolds & Reynolds Co. "A" 3,400 67,575 Hubbell Inc. "B" 2,690 67,418 Omnicare Inc. 4,120 66,435 Western Resources Inc. 3,070 66,389 HON Industries Inc. 2,660 65,502 American Eagle Outfitters Inc.+ 2,060 64,890 Sotheby's Holdings Inc. 2,605 64,799 Roslyn Bancorp Inc. 2,870 64,216 Provident Financial Group Inc. 2,170 63,744 Webster Financial Corp. 2,355 63,438 Pioneer Natural Resources Co.+ 4,435 62,922 Sierra Pacific Resources Corp. 3,475 62,550 Saks Inc.+ 6,320 62,410 Suiza Foods Corp.+ 1,230 62,346 Storage Technology Corp.+ 4,545 61,642 Clayton Homes Inc. 6,150 61,500 ACNielsen Corp.+ 2,576 61,341 Lyondell Chemical Co. 5,190 61,307 Greater Bay Bancorp 880 61,105 Cytec Industries Inc.+ 1,825 61,023 American Financial Group Inc. 2,610 60,519 Pacific Century Financial Corp. 3,525 60,366 Lear Corp.+ 2,930 60,248 Scholastic Corp.+ 755 60,070 Teleflex Inc. 1,690 58,094 Pentair Inc. 2,160 57,780 Lee Enterprises Inc. 1,975 57,028 Edwards Lifesciences Corp.+ 2,590 56,494 Barnes & Noble Inc.+ 2,845 56,011 Washington Gas Light Co. 2,075 $ 55,766 Carlisle Companies Inc. 1,340 55,610 Vectren Corporation 2,715 55,148 Six Flags Inc.+ 3,515 54,483 PacifiCare Health Systems Inc. "A"+ 1,550 53,959 Houghton Mifflin Co. 1,345 52,791 Dean Foods Co. 1,580 52,535 Legato Systems Inc.+ 3,845 51,667 HSB Group Inc. 1,285 51,561 Sensormatic Electronics Corp.+ 3,425 51,375 Mohawk Industries Inc.+ 2,355 51,368 Callaway Golf Co. 3,340 51,352 Hawaiian Electric Industries Inc. 1,460 50,917 USG Corp. 2,000 50,125 Carter-Wallace Inc. 1,990 48,631 AGL Resources Inc. 2,410 48,351 CNF Transportation Inc. 2,170 48,282 Borders Group Inc.+ 3,445 48,015 Lubrizol Corp. 2,405 47,348 Keystone Financial Inc. 2,175 47,306 Jacobs Engineering Group Inc.+ 1,170 47,166 Alexander & Baldwin Inc. 1,790 46,540 ArvinMeritor Inc. 3,160 46,413 Public Service Company of New Mexico 1,770 45,799 Cleco Corp. 975 45,581 AK Steel Holding Corp. 4,850 45,469 Media General Inc. "A" 1,040 44,720 Universal Foods Corp. 2,185 44,519 Rayonier Inc. 1,220 43,844 Interstate Bakeries Corp. 2,955 43,217 Lancaster Colony Corp. 1,740 42,739 RPM Inc. 4,670 42,322 Minerals Technologies Inc. 915 42,090 Quorum Health Group Inc.+ 3,165 41,145 Overseas Shipholding Group Inc. 1,500 41,062 York International Corp. 1,650 41,044 Claire's Stores Inc. 2,270 40,860 Albemarle Corp. 2,015 40,678 Trinity Industries Inc. 1,720 40,205 Federal Signal Corp. 2,015 40,048 Crompton Corp. 5,055 39,808 Harsco Corp. 1,770 39,051 Borg-Warner Automotive Inc. 1,145 37,928 Kelly Services Inc. "A" 1,600 37,800 Dole Food Co. 2,505 37,575 Universal Corporation 1,265 37,159 Modine Manufacturing Co. 1,315 37,046 Furniture Brands International Inc.+ 2,215 36,824 Pennzoil-Quaker State Co. 3,475 36,488 CBRL Group Inc. 2,535 36,441 -------------------------------------------------------------------------------- iShares Schedules of Investments page 35 iShares S&P MidCap 400/BARRA Value Index Fund Schedule of Investments (continued) September 30, 2000 (Unaudited) Security Shares Value --------------------------------------------------------------- COMMON STOCKS (continued) --------------------------------------------------------------- Swift Transportation Co. Inc.+ 2,770 $ 36,183 Pittston Brink's Group 2,305 35,728 Steris Corp.+ 2,955 35,460 Superior Industries International Inc. 1,180 35,400 Tecumseh Products Co. "A" 845 35,384 Kennametal Inc. 1,360 35,020 Olin Corp. 2,035 32,942 Bandag Inc. 915 32,883 Church & Dwight Co. Inc. 1,720 31,605 AGCO Corp. 2,605 30,934 AMETEK Inc. 1,445 30,616 Kaydon Corp. 1,315 30,245 Ogden Corp.+ 2,225 30,177 Bob Evans Farms Inc. 1,615 29,877 Ferro Corp. 1,555 29,642 Horace Mann Educators Corp. 1,790 29,311 Granite Construction Inc. 1,195 28,979 Imation Corp.+ 1,550 28,869 Alaska Air Group Inc.+ 1,190 28,560 Lands' End Inc.+ 1,355 28,455 Carpenter Technology Corp. 965 28,106 Black Hills Corp. 1,000 28,062 Ruddick Corp. 2,020 28,028 Acuson Corp.+ 1,230 27,982 Wallace Computer Services Inc. 1,805 27,526 Longview Fibre Co. 2,260 27,120 Banta Corp. 1,110 27,056 Flowserve Corp. 1,635 26,875 Structural Dynamics Research Corp.+ 1,585 25,954 Smucker (J.M) Company (The)+ 1,050 25,528 Unifi Inc.+ 2,490 25,367 GTECH Holdings Corp.+ 1,515 25,092 Sylvan Learning Systems Inc.+ 1,660 24,589 Transaction Systems Architects Inc. "A"+ 1,445 23,481 Wisconsin Central Transportation Corp.+ 2,160 22,815 Glatfelter (P.H.) Co. 1,880 22,795 Airborne Freight Corp. 2,200 22,413 Perrigo Co.+ 3,225 22,071 Modis Professional Services Inc.+ 4,205 21,813 Stewart & Stevenson Services Inc. 1,245 21,710 Mynd Corp.+ 1,575 21,262 Wellman Inc. 1,415 20,429 Covance Inc.+ 2,495 20,428 Hunt (J.B.) Transport Services Inc. 1,570 20,017 Airgas Inc.+ 2,925 19,927 Sequa Corp. "A"+ 465 19,763 Shares or Security Principal Value ---------------------------------------------------------------- Finova Group Inc. 2,715 $ 19,684 Standard Register Co. 1,230 19,680 Arnold Industries Inc. 1,105 18,647 Fuller (H. B.) Co. 620 17,825 Wausau-Mosinee Paper Corp. 2,280 17,670 OfficeMax Inc.+ 4,950 17,634 Federal-Mogul Corp. 3,165 17,210 Ohio Casualty Corp. 2,675 16,970 Albany International Corp.+ 1,355 16,260 Schulman (A.) Inc. 1,340 14,740 International Multifoods Corp. 845 14,682 NCO Group Inc.+ 1,135 13,478 Chesapeake Corp. 675 12,994 Lance Inc. 1,325 12,877 Cambridge Technology Partners Inc.+ 2,760 12,075 Magnetek Inc.+ 1,080 11,475 PSS World Medical Inc.+ 3,145 11,401 Cleveland-Cliffs Inc. 490 11,209 Ryerson Tull Inc. 1,150 10,853 Warnaco Group Inc. "A" 2,445 9,780 Stewart Enterprises Inc. "A" 4,815 9,329 Lone Star Steakhouse & Saloon Inc. 1,085 8,002 NCH Corp. 225 7,945 Navigant Consulting Co.+ 1,735 5,964 MAXXAM Inc.+ 290 5,764 Ethyl Corp. 3,510 5,046 ---------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $18,145,147) 19,604,652 ---------------------------------------------------------------- REPURCHASE AGREEMENT - 0.03% ---------------------------------------------------------------- Investors Bank & Trust Tri Party Repurchase Agreement, dated 09/29/00, due 10/02/00, with a maturity value of $7,016 and an effective yield of 6.25%. $ 7,012 7,012 ---------------------------------------------------------------- TOTAL REPURCHASE AGREEMENT (Cost: $7,012) 7,012 ---------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 99.89% (Cost $18,152,159) 19,611,664 ---------------------------------------------------------------- Other Assets, Less Liabilities -- 0.11% 20,802 ---------------------------------------------------------------- NET ASSETS -- 100.00% $19,632,466 ================================================================ + Non-income earning securities. See notes to financial statements. -------------------------------------------------------------------------------- page 36 iShares iShares S&P SmallCap 600 Index Fund Schedule of Investments September 30, 2000 (Unaudited) Security Shares Value --------------------------------------------------------------- COMMON STOCKS - 99.96% --------------------------------------------------------------- Protein Design Labs Inc.+ 7,860 $ 947,130 Vertex Pharmaceuticals Inc.+ 9,855 832,748 COR Therapeutics Inc.+ 9,823 612,096 Silicon Valley Bancshares+ 8,862 516,073 HNC Software Inc.+ 5,865 479,830 Plexus Corp.+ 6,757 476,368 Universal Health Services Inc. "B"+ 5,484 469,568 Radian Group Inc. 6,931 467,843 Alpharma Inc. 7,311 446,885 KEMET Corp.+ 16,062 443,713 Expeditors International Washington Inc. 9,409 423,993 Techne Corp.+ 3,773 422,576 Vicor Corp.+ 7,781 422,119 Barr Laboratories Inc.+ 6,346 420,819 Gallagher (Arthur J.) & Co. 6,963 411,687 National Instruments Corp.+ 9,266 408,862 AmeriCredit Corp.+ 13,938 401,589 Bisys Group Inc.+ 5,098 394,139 Catalina Marketing Corp.+ 10,141 381,555 Dallas Semiconductor Corp. 11,124 365,701 Newfield Exploration Co.+ 7,826 365,376 APW Ltd.+ 7,204 351,195 Investors Financial Services Corp. 5,469 345,231 Gentex Corp.+ 13,652 341,300 Plantronics Inc.+ 8,959 340,442 ChoicePoint Inc.+ 7,412 340,026 Coherent Inc.+ 4,919 334,492 Medicis Pharmaceutical Corp. "A"+ 5,404 332,346 Eaton Vance Corp. 6,488 330,888 Commerce Bancorp Inc. 5,666 329,690 True North Communications Inc. 9,141 326,791 Jack Henry & Associates Inc. 7,503 325,443 Pride International Inc.+ 12,047 319,246 Dycom Industries Inc.+ 7,646 318,265 RSA Security Inc.+ 7,298 314,726 Priority Healthcare Corp. "B"+ 4,124 314,455 Cognex Corp.+ 7,945 313,331 Louis Dreyfus Natural Gas Corp.+ 7,857 311,334 Cullen/Frost Bankers Inc. 9,572 311,090 99 Cents Only Stores+ 6,190 310,661 Cephalon Inc.+ 6,371 308,993 Fidelity National Financial Inc. 12,383 306,479 Technitrol Inc. 3,008 303,808 Timberland Co.+ 7,405 303,605 Orthodontic Centers of America+ 8,943 297,914 Dura Pharmaceuticals Inc.+ 8,204 $ 290,217 Methode Electronics Inc. "A" 6,548 290,158 Cerner Corp.+ 6,229 289,259 Centura Banks Inc. 7,334 280,984 Raymond James Financial Corp. 8,476 279,178 Patterson Dental Co.+ 12,394 278,865 Smithfield Foods Inc.+ 10,390 272,738 C&D Technologies Inc. 4,802 272,513 Zebra Technologies Corp. "A"+ 5,601 269,198 Alpha Industries Inc.+ 7,881 268,447 Vintage Petroleum Inc. 11,553 262,831 Varian Medical Systems Inc.+ 5,778 261,093 Aeroflex Inc.+ 5,360 260,630 Whole Foods Market Inc.+ 4,827 259,150 CTS Corp. 5,100 258,188 SkyWest Inc. 5,018 257,173 Hudson United Bancorp 8,944 247,078 Harman International Industries Inc. 6,284 245,704 Michaels Stores Inc.+ 6,121 244,840 Cross Timbers Oil Co. 12,728 244,209 Cheesecake Factory (The)+ 5,638 243,843 First American Financial Corp. 11,670 243,611 Pier 1 Imports Inc. 17,575 238,361 Toll Brothers Inc.+ 6,706 230,519 Shaw Group Inc.+ 3,267 230,324 Barrett Resources Corp.+ 6,047 228,652 Enzo Biochem Inc.+ 4,686 227,271 FactSet Research Systems Inc. 5,973 224,585 Dain Rauscher Corp. 2,355 219,015 Washington Federal Inc. 9,620 218,855 Pioneer Group Inc. (The)+ 4,968 218,437 Aspen Technology Inc.+ 4,808 216,961 Regeneron Pharmaceuticals Inc.+ 6,639 216,597 Men's Wearhouse Inc. (The)+ 7,616 215,628 DMC Stratex Networks Inc.+ 13,350 214,434 D.R. Horton Inc. 12,411 213,310 Zale Corp.+ 6,489 210,487 Proxim Inc.+ 4,665 207,593 Tetra Tech Inc.+ 7,255 207,221 Ethan Allen Interiors Inc. 7,281 206,143 Verity Inc.+ 5,757 205,453 Downey Financial Corp. 5,187 204,886 AnnTaylor Stores Corp.+ 5,300 203,719 Beringer Wine Estates Holdings Inc. "B"+ 3,649 202,748 Insight Enterprises Inc.+ 7,439 202,699 Bindley Western Industries Inc. 6,305 201,760 First Midwest Bancorp Inc. 7,558 201,232 -------------------------------------------------------------------------------- iShares Schedules of Investments page 37 iShares S&P SmallCap 600 Index Fund Schedule of Investments (continued) September 30, 2000 (Unaudited) Security Shares Value --------------------------------------------------------------- COMMON STOCKS (continued) --------------------------------------------------------------- Artesyn Technologies Inc.+ 6,894 $ 200,788 NYFIX Inc.+ 4,470 200,032 Commercial Federal Corp. 10,398 198,862 National Data Corp. 6,032 197,925 Anixter International Inc.+ 6,734 196,128 Avista Corp. 8,690 195,525 Advance Paradigm Inc.+ 4,626 195,155 Aspect Communications Corp.+ 9,449 194,886 Dendrite International Inc.+ 7,242 194,176 Stillwater Mining Co.+ 7,096 192,089 OM Group Inc. 4,392 191,601 Cable Design Technologies Corp.+ 7,875 191,461 Administaff Inc.+ 2,492 188,644 Pogo Producing Co. 7,434 188,638 Hain Celestial Group Inc.+ 5,354 188,059 Stone Energy Corp.+ 3,395 186,725 Linens 'N Things Inc.+ 7,319 186,634 Roper Industries Inc. 5,599 185,817 Heidrick & Struggles International Inc.+ 3,565 183,152 Benchmark Electronics Inc.+ 3,508 182,416 C-Cube Microsystems Inc.+ 8,884 182,122 Delta & Pine Land Co. 7,084 181,970 Constellation Brands Inc.+ 3,348 181,838 Southern Union Co.+ 9,163 181,542 Invacare Corp. 5,547 178,197 Piedmont Natural Gas Co. 5,811 177,962 Resmed Inc.+ 5,625 175,781 Philadelphia Suburban Corp. 7,562 175,344 S3 Inc.+ 16,899 174,271 Electro Scientific Industries Inc.+ 4,910 172,464 Scotts Co. (The) "A"+ 5,148 172,458 Southwest Bancorp of Texas Inc.+ 5,251 171,642 Noven Pharmaceuticals Inc.+ 4,004 171,171 IDEXX Laboratories Inc.+ 6,397 171,120 Cambrex Corp. 4,585 169,645 Swift Energy Co.+ 4,070 169,159 Anchor Gaming+ 2,117 168,434 United Stationers Inc.+ 6,264 168,345 Mutual Risk Management Ltd. 7,588 166,462 Teledyne Technologies Inc.+ 5,694 165,838 Cal Dive International Inc.+ 2,888 165,158 Silicon Valley Group Inc.+ 6,250 164,453 Energen Corp. 5,523 164,309 Coventry Health Care Inc.+ 10,856 164,197 La-Z-Boy Chair Co. 11,236 163,624 Syncor International Corp.+ 4,411 $ 162,380 Penton Media Inc. 5,859 161,122 Black Box Corp.+ 3,451 160,903 Aware Inc.+ 4,145 159,582 EGL Inc.+ 5,264 159,236 AXT Inc.+ 3,800 158,888 RadiSys Corp.+ 3,129 158,210 CEC Entertainment Inc.+ 4,938 158,016 BARRA Inc.+ 2,543 157,825 AptarGroup Inc. 6,576 157,413 Imperial Bancorp+ 8,165 156,156 Polaris Industries Partners LP "A" 4,409 155,417 Actel Corp.+ 4,317 155,142 Hyperion Solutions Corp.+ 5,991 155,017 Renal Care Group Inc.+ 8,307 154,718 Insituform Technologies Inc. "A"+ 4,574 153,801 Idex Corp. 5,462 152,595 Jack in the Box Inc.+ 7,096 152,121 United Bancshares Inc. 7,724 151,584 Whitney Holding Corp. 4,169 151,387 Alliance Semiconductor Corp.+ 7,575 150,553 Delphi Financial Group Inc.+ 3,701 149,890 Corn Products International Inc. 6,474 147,283 Seacor Smit Inc.+ 3,133 146,076 Community First Bankshares Inc. 8,278 145,382 Earthgrains Company (The) 7,789 143,610 Mueller Industries Inc.+ 6,346 142,388 Spherion Corporation+ 11,748 140,242 Xircom Inc.+ 5,495 138,749 O'Reilly Automotive Inc.+ 9,458 138,323 Copart Inc.+ 9,906 137,446 Alliant Techsystems Inc.+ 1,669 137,067 MascoTech Inc. 8,269 136,955 UIL Holdings Corporation 2,650 136,309 Forward Air Corp.+ 3,850 135,472 Diagnostic Products Corp. 2,518 135,028 Florida Rock Industries Inc. 3,421 134,916 Adaptive Broadband Corp.+ 6,893 134,413 Central Parking Corp. 6,781 134,349 Pre-Paid Legal Services Inc.+ 4,156 134,291 Staten Island Bancorp Inc. 6,695 133,900 Buckeye Technologies Inc.+ 6,431 133,443 NVR Inc.+ 1,640 132,840 Alliance Pharmaceutical Corp.+ 8,693 132,568 New Jersey Resources Corp. 3,261 132,478 Veritas DGC Inc.+ 4,566 132,129 Avant! Corp.+ 7,235 132,039 -------------------------------------------------------------------------------- page 38 iShares iShares S&P SmallCap 600 Index Fund Schedule of Investments (continued) September 30, 2000 (Unaudited) Security Shares Value --------------------------------------------------------------- COMMON STOCKS (continued) --------------------------------------------------------------- Mid Atlantic Medical Services Inc.+ 8,715 $ 131,814 American Management Systems Inc.+ 7,666 131,759 PolyOne Corp.+ 17,843 130,477 On Assignment Inc.+ 4,098 128,575 Ruby Tuesday Inc. 11,338 127,553 Dril-Quip Inc.+ 3,185 127,002 Brady Corp. "A" 4,182 126,505 Baldor Electric Co. 6,225 126,445 Lilly Industries Inc. "B" 4,286 126,437 Chittenden Corp. 4,908 126,074 Atlantic Coast Airlines Holdings+ 3,889 125,177 Texas Industries Inc. 3,916 124,823 Kent Electronics Corp.+ 5,227 124,795 Read-Rite Corp.+ 11,033 124,121 Helix Technology Corp. 4,150 123,981 CH Energy Group Inc. 3,105 123,812 ADVO Inc.+ 3,720 122,760 TrustCo Bank Corp. 9,940 122,386 Wesley Jessen VisionCare Inc.+ 3,182 122,308 Pharmaceutical Product Development Inc.+ 4,578 121,603 MacDermid Inc. 5,785 121,485 Tredegar Corporation 6,994 121,084 Southwest Gas Co. 5,768 120,768 Graco Inc. 3,744 120,744 UGI Corp. 4,976 120,668 Firstbank Corp. 4,927 120,404 Atmos Energy Corp. 5,820 120,037 National Discounts Brokers Group Inc.+ 3,876 119,914 Jeffries Group Inc. 4,458 119,809 Kulicke & Soffa Industries Inc.+ 8,958 119,253 Oshkosh Truck Corp. 3,066 118,807 Casey's General Store Inc. 9,112 118,456 Valence Technology Inc.+ 6,782 116,990 Footstar Inc.+ 3,612 116,713 Hooper Holmes Inc. 12,256 116,555 eLoyalty Corp.+ 9,050 115,387 Aztar Corp.+ 7,498 115,282 Bio-Technology General Corp.+ 10,023 114,638 FileNET Corp.+ 6,301 114,599 Cost Plus Inc.+ 3,802 114,535 Three-Five Systems Inc.+ 3,896 113,958 HS Resources Inc.+ 3,383 113,753 Burlington Coat Factory Warehouse Corp. 7,940 113,641 SPS Technologies Inc.+ 2,336 113,296 Photronics Inc.+ 5,186 113,120 Fair Isaac and Co. Inc. 2,648 $ 113,037 Applebee's International Inc. 4,903 112,769 Dionex Corp.+ 4,078 112,655 Regis Corp. 7,510 112,650 ABM Industries Inc. 4,143 112,638 ESS Technology Inc.+ 7,750 110,922 Susquehanna Bancshares Inc. 7,237 110,364 Washington Group International Inc.+ 9,642 110,280 Pacific Sunwear of California Inc.+ 5,876 110,175 US Freightways Corp. 4,853 110,102 Queens County Bancorp Inc. 3,797 109,638 Remedy Corp.+ 5,783 109,154 Mercury Computer Systems Inc.+ 3,924 109,136 Chico's FAS Inc.+ 3,200 108,800 Trenwick Group Ltd. 5,684 107,996 Reliance Steel & Aluminum Co. 5,122 107,882 Park Electrochemical Corp. 1,924 107,023 Cabot Oil & Gas Corp. "A" 5,249 106,948 MAF Bancorp Inc. 4,279 106,440 Pinnacle Entertainment Inc.+ 4,888 106,314 G&K Services Inc. "A" 3,785 106,217 Atwood Oceanics Inc.+ 2,546 106,136 Belden Inc. 4,481 105,864 Northwest Natural Gas Co. 4,641 105,583 Tucker Anthony Sutro Corporation 4,145 105,179 Systems & Computer Technology Corp.+ 5,982 105,059 Pinnacle Systems Inc.+ 9,228 103,815 FYI Inc.+ 2,769 103,491 Great Plains Software Inc.+ 3,666 103,106 Sonic Corp.+ 3,262 102,753 Polymedica Industries Inc.+ 2,390 102,471 M.D.C. Holdings Inc. 3,927 102,102 Werner Enterprises Inc. 8,669 101,861 Hilb Rogal & Hamilton Co. 2,427 101,176 South Financial Group Inc. (The) 7,928 100,091 Triarc Companies Inc.+ 4,059 99,953 Simpson Manufacturing Co. Inc.+ 2,232 99,743 Circle International Group Inc. 3,278 99,159 Memberworks Inc.+ 2,999 98,592 JLG Industries Inc. 8,005 97,561 UniSource Energy Corp. 5,947 97,382 Lennox International Inc. 10,360 97,125 St. Mary Land & Exploration Co. 4,182 96,447 Hutchinson Technology Inc.+ 4,574 96,340 C-COR Electronics Inc.+ 6,236 95,489 Trimble Navigation Ltd.+ 4,264 95,407 Standard-Pacific Corp. 5,291 95,238 -------------------------------------------------------------------------------- iShares Schedules of Investments page 39 iShares S&P SmallCap 600 Index Fund Schedule of Investments (continued) September 30, 2000 (Unaudited) Security Shares Value --------------------------------------------------------------- COMMON STOCKS (continued) --------------------------------------------------------------- Performance Food Group Co.+ 2,531 $ 95,229 Owens & Minor Inc. 6,043 95,177 Fleming Companies Inc. 7,237 94,533 American Freightways Corp.+ 5,939 94,282 P-Com Inc.+ 14,196 94,048 Morgan Keegan Inc. 5,308 92,890 SCP Pool Corp.+ 3,133 92,815 ZixIt Corp.+ 3,042 92,781 Cooper Companies Inc. 2,613 92,435 Organogenesis Inc.+ 6,275 92,242 Enhance Financial Services Group Inc. 7,092 92,196 Datascope Corp. 2,730 91,455 Analogic Corp. 2,375 91,289 Ciber Inc.+ 10,961 90,428 Respironics Inc.+ 5,417 90,396 Profit Recovery Group International Inc. (The)+ 9,137 90,228 Input/Output Inc.+ 9,358 90,071 Progress Software Corp.+ 6,578 89,625 Kirby Corp.+ 4,520 88,705 Pegasus Systems Inc.+ 4,494 87,914 Libbey Inc. 2,819 87,741 Manitowoc Co. Inc. 4,552 87,626 Specialty Equipment Co.+ 3,536 87,295 Allen Telecom Inc.+ 5,146 87,160 CLARCOR Inc. 4,451 86,794 Viasat Inc.+ 3,875 86,703 Stein Mart Inc.+ 7,941 85,862 MAXIMUS Inc.+ 3,876 85,757 Milacron Inc. 6,440 85,733 Southwest Securities Group Inc. 2,925 85,556 Provident Bankshares Corp. 5,095 85,341 Hughes Supply Inc. 4,338 85,112 Valmont Industries Inc. 4,275 84,966 Selective Insurance Group Inc. 4,750 84,906 General Semiconductor Inc.+ 6,951 84,715 Prime Hospitality Corp.+ 8,268 83,714 NorthWestern Corp. 4,260 83,070 THQ Inc.+ 3,551 82,561 Advanced Tissue Sciences Inc.+ 11,061 82,266 Fleetwood Enterprises Inc. 6,058 82,162 Tower Automotive Inc.+ 8,667 81,253 Heartland Express Inc.+ 4,667 81,089 Fritz Companies Inc.+ 6,745 80,940 NBTY Inc.+ 12,376 80,831 Kellwood Co. 4,405 80,391 Harland (John H.) Co. 5,241 $ 80,253 Concord Communications Inc.+ 3,018 79,977 Quiksilver Inc.+ 4,135 79,599 ADAC Laboratories Inc.+ 3,818 79,462 Steel Dynamics Inc.+ 8,622 79,215 Agribrands International Inc.+ 1,812 79,049 Michael Foods Inc. 3,376 78,914 Fossil Inc.+ 5,911 78,690 Great Atlantic & Pacific Tea Co. 7,070 78,212 Ralcorp Holdings Inc.+ 5,501 77,702 Phoenix Technologies Ltd.+ 4,795 76,420 US Oncology Inc.+ 16,753 75,912 Biomatrix Inc.+ 4,327 75,722 Interface Inc. 9,479 75,536 Laclede Gas Co. 3,486 75,385 Nautica Enterprises Inc.+ 5,796 74,986 Startek Inc.+ 2,583 74,907 Arch Chemicals Inc. 4,091 74,661 Brooktrout Technology Inc.+ 2,260 74,439 BE Aerospace Inc.+ 4,602 74,207 Toro Co. 2,349 73,994 Ryland Group Inc. 2,372 73,532 Landstar System Inc.+ 1,630 72,739 Paxar Corp.+ 8,126 72,626 Russ Berrie & Co. Inc. 3,670 72,483 NUI Corp. 2,390 72,148 GBC Bancorp 2,100 71,531 Wolverine World Wide Inc. 7,624 70,999 Offshore Logistics Inc.+ 3,939 70,410 Oceaneering International Inc.+ 4,225 70,241 Dress Barn Inc.+ 3,339 70,119 Factory 2-U Stores Inc.+ 2,290 69,988 IHOP Corp.+ 3,642 69,653 RLI Corp. 1,805 69,605 Yellow Corporation+ 4,592 69,454 Zenith National Insurance Corp. 3,170 69,344 Kronos Inc.+ 2,288 68,640 School Specialty Inc.+ 3,205 68,307 Mentor Corp. 4,323 68,087 Salton/Maxim Corp.+ 2,104 67,986 Pioneer-Standard Electronics Inc. 5,003 67,853 Rollins Truck Leasing Corp. 10,749 67,853 Coca-Cola Bottling Co. 1,612 67,603 Auspex Systems Inc.+ 5,460 67,568 General Communication Inc. "A"+ 9,440 67,555 Anchor Bancorp Wisconsin Inc. 4,284 67,205 Intermagnetics General Corp.+ 2,522 67,148 -------------------------------------------------------------------------------- page 40 iShares iShares S&P Smallcap 600 Index Fund Schedule of Investments (continued) September 30, 2000 (Unaudited) Security Shares Value --------------------------------------------------------------- COMMON STOCKS (continued) --------------------------------------------------------------- Cuno Inc.+ 3,016 $ 67,106 Commercial Metals Co. 2,628 67,014 Applied Industrial Technologies Inc. 3,779 65,424 Regal-Beloit Corp. 3,853 65,347 Electroglas Inc.+ 3,821 65,196 Brush Wellman Inc. 3,014 65,178 Morrison Management Specialist Inc. 2,200 65,010 Symmetricom Inc.+ 4,155 64,922 American Italian Pasta Co.+ 3,380 64,854 Avid Technology Inc.+ 4,585 64,190 Roadway Express Inc. 3,575 64,127 Talk.com Inc.+ 14,521 63,983 Riggs National Corp. 5,213 63,859 Ionics Inc.+ 2,995 63,831 Friede Goldman Halter Inc.+ 8,972 63,365 GenCorp. Inc. 7,770 63,131 Esterline Corp.+ 3,196 62,921 Audiovox Corp. "A"+ 4,169 62,796 Seitel Inc.+ 4,368 62,790 Standard Microsystems Corp.+ 2,871 62,624 Ultratech Stepper Inc.+ 3,896 62,580 SpeedFam-IPEC Inc.+ 5,471 62,575 Barnes Group Inc. 3,402 62,512 Project Software & Development Inc.+ 4,017 62,452 Plains Resource Inc.+ 3,307 62,420 Patina Oil & Gas Corp. 3,120 62,400 InterVoice Inc.+ 5,876 61,698 Meade Instruments Corp.+ 3,025 61,067 Bowne & Co. Inc. 6,229 60,733 Nuevo Energy Co.+ 3,300 60,637 Vital Sign Inc. 2,284 60,526 WD-40 Company 2,843 60,414 Volt Information Sciences Inc.+ 2,780 59,770 ChemFirst Inc. 2,832 58,941 Chemed Corp. 1,831 58,249 Orbital Sciences Corp.+ 6,940 58,122 Monaco Coach Corp.+ 3,521 58,096 Thomas Industries Inc. 2,848 57,672 Cato Corp. "A" 4,613 57,662 Marcus Corp. 5,456 57,288 AAR Corp. 4,988 57,050 Cohu Inc. 3,720 56,963 Arctic Cat Inc. 4,498 56,787 Shopko Stores Inc.+ 5,462 56,668 Saga Systems Inc.+ 5,380 56,490 CDI Corp.+ 3,500 $ 56,000 Arkansas Best Corp.+ 3,642 55,996 Inter-Tel Inc. 4,884 55,556 RTI International Metals Inc.+ 3,837 55,397 Scott Technologies Inc.+ 3,107 55,052 Foster Wheeler Corp. 7,590 55,027 AO Smith Corp. "B" 4,342 54,546 Kaman Corp. "A" 4,251 53,669 Caraustar Industries Inc. 4,771 52,779 Phillips-Van Heusen Corporation 5,111 52,707 Telxon Corp.+ 3,001 52,518 Cygnus Inc.+ 4,754 52,294 Elcor Corp. 3,596 52,142 Midwest Express Holdings Inc.+ 2,589 52,104 Thor Industries Inc. 2,238 51,754 Brightpoint Inc.+ 10,259 51,616 Watsco Inc. 4,981 51,254 Myers Industries Inc. 4,032 51,156 E.W. Blanch Holdings Inc. 2,417 50,153 Telcom Semiconductor Inc.+ 3,365 50,054 American States Water Co. 1,651 49,943 Pep Boys-Manny Moe & Jack Inc. 9,960 49,800 Quanex Corp. 2,575 49,086 Midway Games Inc.+ 6,994 48,958 Winnebago Industries Inc. 3,901 48,763 Watts Industries Inc. "A" 4,853 48,530 MICROS Systems Inc.+ 3,213 48,396 Exabyte Corp.+ 4,300 48,375 Robbins & Myers Inc. 2,017 47,652 Ha-Lo Industries Inc.+ 11,832 47,328 Aaron Rents Inc. "B" 3,653 47,032 Panera Bread Co. "A"+ 2,238 46,718 Ryan's Family Steak Houses Inc.+ 5,954 45,771 SLI Inc. 6,249 45,696 New England Business Service Inc. 2,520 45,675 Gardner Denver Inc.+ 2,805 45,581 CACI International Inc. "A"+ 2,110 45,233 SPSS Inc.+ 1,670 44,777 Fremont General Corp. 13,015 44,739 Standex International Corp. 2,302 44,457 Consolidated Products Inc.+ 5,495 43,960 Group 1 Automotive Inc.+ 4,025 43,772 Lawson Products Inc. 1,798 43,489 Network Equipment Technologies Inc.+ 4,041 43,188 QRS Corp.+ 2,847 42,883 Universal Forest Products Inc. 3,746 42,786 K Swiss Inc. "A" 1,898 42,705 -------------------------------------------------------------------------------- iShares Schedules of Investments page 41 iShares S&P Smallcap 600 Index Fund Schedule of Investments (continued) September 30, 2000 (Unaudited) Security Shares Value --------------------------------------------------------------- COMMON STOCKS (continued) --------------------------------------------------------------- Checkpoint Systems Inc.+ 5,573 $ 42,146 Griffon Corporation+ 5,551 41,979 Sturm Ruger & Co. Inc. 5,081 41,601 Remington Oil & Gas Corp.+ 3,980 41,541 United Natural Foods Inc.+ 3,352 41,481 Lindsay Manufacturing Co. 2,217 41,292 Omnova Solutions Inc. 7,315 40,690 Southwestern Energy Company 4,625 40,469 Simpson Industries Inc. 3,298 40,401 Stride Rite Corp. 7,952 40,257 Parexel International Corp.+ 4,702 39,967 Republic Group Inc. 2,173 39,929 Wet Seal Inc. "A"+ 2,544 39,909 Midas Inc. 2,831 39,634 URS Corp.+ 2,953 39,127 Astec Industries Inc.+ 3,573 39,080 National Presto Industries Inc. 1,300 38,919 Deltic Timber Corp. 2,277 38,567 Chiquita Brands International Inc. 12,259 38,309 Tetra Technologies Inc.+ 2,522 38,303 Wabash National Corp. 4,184 38,179 Schweitzer-Mauduit International Inc. 2,852 38,146 Conmed Corp.+ 2,782 38,079 Pediatrix Medical Group Inc.+ 2,936 37,985 Innovex Inc. 2,786 37,959 Robotic Vision Systems Inc.+ 6,340 37,842 Pope & Talbot Inc. 2,642 37,814 Visual Networks Inc.+ 5,705 37,439 4Kids Entertainment Inc.+ 2,210 37,294 Champion Enterprises Inc.+ 8,745 37,166 Information Resources Inc.+ 5,352 36,461 Cascade Natural Gas Corp. 2,043 35,752 Department 56 Inc.+ 2,706 35,685 BMC Industries Inc. 5,189 35,674 Gerber Scientific Inc. 4,099 35,354 Immune Response Corp.+ 5,137 35,317 Theragenics Corp.+ 5,416 35,204 Cash American Investments Inc. 4,808 35,159 SCPIE Holdings Inc. 1,740 35,018 X-Rite Inc. 3,980 34,825 Skyline Corp. 1,627 34,675 Oshkosh B'gosh Inc. "A" 2,275 34,623 Insurance Auto Auctions Inc.+ 2,134 34,544 Intermet Corp. 4,708 34,133 Wolverine Tube Inc.+ 2,247 33,424 Mesa Air Group Inc.+ 6,006 $ 32,845 Jakks Pacific Inc.+ 3,486 32,790 Lydall Inc.+ 2,862 32,734 AVT Corp.+ 5,848 32,530 Tenneco Automotive Inc. 6,227 32,303 Bangor Hydro-Electric Co. 1,330 32,169 Labor Ready Inc.+ 7,659 32,072 M.S. Carriers Inc.+ 2,049 32,016 Material Sciences Corp.+ 2,797 31,816 Brown Shoe Company Inc. 3,402 31,256 Ames Department Stores Inc.+ 5,406 31,253 Bassett Furniture Industries Inc. 2,171 30,801 CPI Corp. 1,439 30,579 Analysts International Corp. 4,234 30,564 Apogee Enterprises Inc. 5,319 30,252 Coachmen Industries Inc. 2,847 29,716 ePresence Inc.+ 4,374 29,524 Flow International Corp.+ 2,693 29,286 Consolidated Graphics Inc.+ 2,492 29,281 Sola International Inc.+ 4,520 29,098 K2 Inc.+ 3,252 29,065 CKE Restaurant Inc. 9,427 28,870 Edgewater Technology Inc.+ 5,448 28,602 Landry's Seafood Restaurants Inc. 4,174 28,435 Franklin Covey Co.+ 3,788 27,700 Butler Manufacturing Co. 1,198 27,479 Epicor Software Corp.+ 7,776 27,216 Quaker Chemical Corp. 1,586 26,962 Dimon Inc. 8,266 26,864 Applica Inc.+ 4,229 26,167 Kroll-O'Gara Co. (The)+ 4,314 25,884 Billing Concepts Corp.+ 8,032 25,602 Davox Corp.+ 2,535 25,508 Gymboree Co.+ 4,676 25,426 Fedders Corp. 6,495 25,168 Castle (A.M.) & Co. 2,576 24,794 Osteotech Inc.+ 2,589 24,757 Oxford Industries Inc. 1,382 24,703 Sierra Health Services Inc.+ 5,263 24,670 Sunrise Medical Inc.+ 4,079 24,474 Goody's Family Clothing Inc.+ 6,121 24,101 Jo-Ann Stores Inc.+ 3,259 23,628 Discount Auto Parts Inc.+ 3,044 23,401 Natures Sunshine Products Inc. 3,142 23,369 Digi International Inc.+ 2,925 23,034 Titan International Inc. 3,911 22,488 Cone Mills Corp.+ 4,949 22,270 -------------------------------------------------------------------------------- page 42 iShares iShares S&P Smallcap 600 Index Fund Schedule of Investments (continued) September 30, 2000 (Unaudited) Security Shares Value -------------------------------------------------------------------- COMMON STOCKS (continued) -------------------------------------------------------------------- Nash Finch Co. 2,095 $ 21,867 Luby's Inc. 4,078 21,664 Penford Corp. 1,393 21,591 Central Vermont Public Service Corporation 2,118 21,577 Nelson (Thomas) Inc. 2,602 21,304 Hologic Inc.+ 2,820 20,974 J & J Snack Foods Corp.+ 1,599 20,687 Building Materials Holdings Corp.+ 2,329 20,670 Laser Vision Centers Inc.+ 4,682 20,337 Ashworth Inc.+ 2,511 19,774 Huffy Corp. 1,872 19,656 Mississippi Chemical Corp. 4,798 19,192 TBC Corp.+ 3,882 18,925 Standard Motor Products Inc. 2,336 18,688 Spacelabs Medical Inc.+ 1,872 18,486 Cross (A.T.) Company+ 3,251 17,474 Royal Appliance Manufacturing Co.+ 2,895 17,189 IMCO Recycling Inc. 2,858 17,148 Hancock Fabrics Inc. 3,417 17,085 Itron Inc.+ 2,787 17,070 Commonwealth Industries 3,031 16,860 Hartmarx Corp.+ 5,568 16,704 Bombay Co. Inc. (The)+ 6,615 16,124 Lillian Vernon Corporation 1,651 16,097 Birmingham Steel Corp. 5,917 15,902 Angelica Corp. 1,614 15,636 Haggar Corp. 1,222 15,275 Enesco Group Inc. 2,572 15,110 Gottschalks Inc.+ 2,418 14,810 Amcast Industrial Corp. 1,541 14,543 Hanger Orthopedic Group Inc.+ 3,655 13,706 Mayor's Jewelers Inc.+ 3,616 13,560 Damark International Inc. "A"+ 1,055 12,924 Steel Technologies Inc. 1,937 12,227 Computer Task Group Inc. 3,770 11,781 Baker (J.) Inc. 2,511 11,299 Cyrk Inc.+ 3,050 10,484 Action Performance Companies Inc.+ 2,992 10,285 Taco Cabana Inc. "A"+ 2,247 9,690 Nashua Corp. 1,120 9,450 Curative Health Services Inc.+ 1,734 9,429 Dixie Group Inc.+ 2,264 8,773 Books-A-Million Inc.+ 3,213 8,434 Green Mountain Power Corp. 1,029 7,782 Frozen Food Express Industries Inc.+ 2,901 7,434 Shares or Security Principal Value ------------------------------------------------------------------- Spartan Motors Inc. 2,238 $ 6,994 Guilford Mills Inc. 3,696 6,930 Insteel Industries Inc. 1,495 6,073 ------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $67,292,408) 70,602,912 ------------------------------------------------------------------- SHORT TERM INSTRUMENTS - 3.03% ------------------------------------------------------------------- Freddie Mac Discount Note 6.46%, 10/24/00++ $294,909 294,909 Goldman Sachs Financial Square Prime Obligation Fund ++ 497,855 497,855 Providian Temp Cash Money Market Fund ++ 362,255 362,255 Short Term Investment Company Liquid Assets Portfolio++ 987,967 987,967 ------------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $2,142,986) 2,142,986 ------------------------------------------------------------------- REPURCHASE AGREEMENT - 0.00% ------------------------------------------------------------------- Investors Bank & Trust Tri Party Repurchase Agreement, dated 09/29/00, due 10/02/00, with a maturity value of $1,356 and an effective yield of 6.25%. 1,355 1,355 ------------------------------------------------------------------- TOTAL REPURCHASE AGREEMENT (Cost: $1,355) 1,355 ------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 102.99% (Cost $69,436,749) 72,747,253 ------------------------------------------------------------------- Other Assets, Less Liabilities -- (2.99%) (2,113,625) ------------------------------------------------------------------- NET ASSETS -- 100.00% $70,633,628 =================================================================== + Non-income earning securities. ++ Represents investment of collateral received from securities lending transactions. See Note 5. See notes to financial statements. -------------------------------------------------------------------------------- iShares Schedules of Investments page 43 iShares S&P SmallCap 600/BARRA Growth Index Fund Schedule of Investments September 30, 2000 (Unaudited) Security Shares Value ----------------------------------------------------------------- COMMON STOCKS - 99.99% ----------------------------------------------------------------- Protein Design Labs Inc.+ 3,926 $ 473,082 Vertex Pharmaceuticals Inc.+ 4,916 415,402 COR Therapeutics Inc.+ 4,906 305,705 Silicon Valley Bancshares+ 4,425 257,687 Plexus Corp.+ 3,376 238,008 Alpharma Inc. 3,647 222,923 KEMET Corp.+ 7,998 220,945 Expeditors International Washington Inc. 4,710 212,244 Techne Corp.+ 1,877 210,224 Barr Laboratories Inc.+ 3,167 210,012 Vicor Corp.+ 3,868 209,839 Gallagher (Arthur J.) & Co. 3,490 206,346 National Instruments Corp.+ 4,624 204,034 Bisys Group Inc.+ 2,542 196,528 Catalina Marketing Corp.+ 5,071 190,796 Dallas Semiconductor Corp. 5,537 182,029 Newfield Exploration Co.+ 3,890 181,614 APW Ltd.+ 3,590 175,012 Investors Financial Services Corp. 2,729 172,268 Plantronics Inc.+ 4,493 170,734 ChoicePoint Inc.+ 3,710 170,196 Gentex Corp.+ 6,786 169,650 Coherent Inc.+ 2,482 168,776 Commerce Bancorp Inc. 2,856 166,184 Eaton Vance Corp. 3,246 165,546 Medicis Pharmaceutical Corp. "A"+ 2,691 165,497 True North Communications Inc. 4,572 163,449 Jack Henry & Associates Inc. 3,736 162,049 Dycom Industries Inc.+ 3,827 159,299 Priority Healthcare Corp. "B"+ 2,086 159,058 RSA Security Inc.+ 3,654 157,579 Cognex Corp.+ 3,976 156,804 99 Cents Only Stores+ 3,102 155,682 Cephalon Inc.+ 3,192 154,812 Technitrol Inc. 1,502 151,702 Timberland Co.+ 3,692 151,372 Orthodontic Centers of America+ 4,446 148,107 Methode Electronics Inc. "A" 3,270 144,902 Patterson Dental Co.+ 6,180 139,050 C&D Technologies Inc. 2,407 136,597 Zebra Technologies Corp. "A"+ 2,790 134,094 Alpha Industries Inc.+ 3,919 133,491 Aeroflex Inc.+ 2,689 130,753 Varian Medical Systems Inc.+ 2,889 130,547 SkyWest Inc. 2,528 129,560 CTS Corp. 2,545 128,841 Cross Timbers Oil Co. 6,398 122,752 Cheesecake Factory (The)+ 2,833 122,527 Barrett Resources Corp.+ 3,030 $ 114,572 Enzo Biochem Inc.+ 2,348 113,878 FactSet Research Systems Inc. 2,980 112,048 Aspen Technology Inc.+ 2,419 109,157 Pioneer Group Inc. (The)+ 2,480 109,043 Regeneron Pharmaceuticals Inc.+ 3,335 108,804 DMC Stratex Networks Inc.+ 6,687 107,410 Proxim Inc.+ 2,326 103,507 Tetra Tech Inc.+ 3,622 103,453 Verity Inc.+ 2,893 103,244 Insight Enterprises Inc.+ 3,735 101,779 NYFIX Inc.+ 2,260 101,135 Artesyn Technologies Inc.+ 3,458 100,714 Beringer Wine Estates Holdings Inc. "B"+ 1,805 100,290 Aspect Communications Corp.+ 4,749 97,948 Advance Paradigm Inc.+ 2,301 97,073 Dendrite International Inc.+ 3,618 97,008 Pogo Producing Co. 3,694 93,735 Administaff Inc.+ 1,236 93,565 Hain Celestial Group Inc.+ 2,656 93,292 Stone Energy Corp.+ 1,689 92,895 Roper Industries Inc. 2,787 92,494 Heidrick & Struggles International Inc.+ 1,781 91,499 Delta & Pine Land Co. 3,515 90,292 Resmed Inc.+ 2,799 87,469 Noven Pharmaceuticals Inc.+ 2,019 86,312 Electro Scientific Industries Inc.+ 2,446 85,916 Cambrex Corp. 2,304 85,248 Cal Dive International Inc.+ 1,453 83,093 Teledyne Technologies Inc.+ 2,843 82,802 Syncor International Corp.+ 2,186 80,472 AXT Inc.+ 1,913 79,987 Black Box Corp.+ 1,713 79,869 BARRA Inc.+ 1,281 79,502 EGL Inc.+ 2,617 79,164 Aware Inc.+ 2,052 79,002 Renal Care Group Inc.+ 4,205 78,318 Actel Corp.+ 2,177 78,236 RadiSys Corp.+ 1,546 78,170 Polaris Industries Partners LP "A" 2,191 77,233 Hyperion Solutions Corp.+ 2,974 76,952 Insituform Technologies Inc. "A"+ 2,274 76,463 Jack in the Box Inc.+ 3,503 75,096 Alliant Techsystems Inc.+ 836 68,656 Forward Air Corp.+ 1,947 68,510 Copart Inc.+ 4,932 68,432 Adaptive Broadband Corp.+ 3,420 66,690 Buckeye Technologies Inc.+ 3,203 66,462 On Assignment Inc.+ 2,113 66,295 Pre-Paid Legal Services Inc.+ 2,050 66,241 -------------------------------------------------------------------------------- page 44 iShares iShares S&P SmallCap 600/BARRA Growth Index Fund Schedule of Investments (Continued) September 30, 2000 (Unaudited) Security Shares Value ------------------------------------------------------------- COMMON STOCKS (Continued) ------------------------------------------------------------- Alliance Pharmaceutical Corp.+ 4,325 $ 65,956 Mid Atlantic Medical Services Inc.+ 4,360 65,945 American Management Systems Inc.+ 3,812 65,519 Dril-Quip Inc.+ 1,585 63,202 Atlantic Coast Airlines Holdings+ 1,933 62,218 Helix Technology Corp. 2,074 61,961 Wesley Jessen VisionCare Inc.+ 1,608 61,808 ADVO Inc.+ 1,845 60,885 TrustCo Bank Corp. 4,905 60,393 MacDermid Inc. 2,854 59,934 Graco Inc. 1,857 59,888 Valence Technology Inc.+ 3,429 59,150 Kulicke & Soffa Industries Inc.+ 4,420 58,841 Three-Five Systems Inc.+ 1,983 58,003 eLoyalty Corp.+ 4,524 57,681 Hooper Holmes Inc. 6,058 57,612 Cost Plus Inc.+ 1,903 57,328 FileNET Corp.+ 3,150 57,291 Bio-Technology General Corp.+ 4,988 57,050 HS Resources Inc.+ 1,686 56,692 Fair Isaac and Co. Inc. 1,317 56,219 Dionex Corp.+ 2,030 56,079 Applebee's International Inc. 2,437 56,051 Remedy Corp.+ 2,914 55,002 Chico's FAS Inc.+ 1,610 54,740 Mercury Computer Systems Inc.+ 1,955 54,373 Cabot Oil & Gas Corp. "A" 2,653 54,055 Atwood Oceanics Inc.+ 1,264 52,693 Systems & Computer Technology Corp.+ 2,980 52,336 Sonic Corp.+ 1,642 51,723 Pinnacle Systems Inc.+ 4,583 51,559 Great Plains Software Inc.+ 1,811 50,934 Triarc Companies Inc.+ 2,034 50,087 Hilb Rogal & Hamilton Co. 1,201 50,067 Memberworks Inc.+ 1,500 49,313 Trimble Navigation Ltd.+ 2,130 47,659 C-COR Electronics Inc.+ 3,104 47,530 P-Com Inc.+ 7,087 46,951 ZixIt Corp.+ 1,518 46,299 SCP Pool Corp.+ 1,554 46,037 Organogenesis Inc.+ 3,123 45,908 Progress Software Corp.+ 3,275 44,622 Specialty Equipment Co.+ 1,797 44,363 Viasat Inc.+ 1,966 43,989 Libbey Inc. 1,399 43,544 Manitowoc Co. Inc. 2,262 43,544 General Semiconductor Inc.+ 3,538 43,119 Advanced Tissue Sciences Inc.+ 5,495 $ 40,869 Heartland Express Inc.+ 2,352 40,866 NBTY Inc.+ 6,158 40,219 ADAC Laboratories Inc.+ 1,909 39,731 Concord Communications Inc.+ 1,494 39,591 Fossil Inc.+ 2,949 39,259 Biomatrix Inc.+ 2,146 37,555 Startek Inc.+ 1,281 37,149 Landstar System Inc.+ 790 35,254 Factory 2-U Stores Inc.+ 1,127 34,444 Mentor Corp. 2,166 34,115 Kronos Inc.+ 1,137 34,110 Coca-Cola Bottling Co. 806 33,802 Morrison Management Specialist Inc. 1,133 33,480 Cuno Inc.+ 1,498 33,331 Talk.com Inc.+ 7,254 31,963 Plains Resource Inc.+ 1,669 31,502 InterVoice Inc.+ 2,968 31,164 Project Software & Development Inc.+ 2,003 31,140 Meade Instruments Corp.+ 1,500 30,281 WD-40 Company 1,418 30,133 Cohu Inc. 1,855 28,405 Saga Systems Inc.+ 2,687 28,214 Scott Technologies Inc.+ 1,574 27,889 Cygnus Inc.+ 2,387 26,257 Brightpoint Inc.+ 5,143 25,876 SPSS Inc.+ 890 23,863 Midas Inc. 1,388 19,432 Robotic Vision Systems Inc.+ 3,146 18,778 Visual Networks Inc.+ 2,845 18,670 4Kids Entertainment Inc.+ 1,100 18,562 Immune Response Corp.+ 2,562 17,614 X-Rite Inc. 2,005 17,544 Oshkosh B'gosh Inc. "A" 1,117 16,999 Labor Ready Inc.+ 3,809 15,950 Davox Corp.+ 1,201 12,085 Damark International Inc. "A"+ 519 6,358 ------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $16,464,289) 16,872,340 ------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 99.99% (Cost $16,464,289) 16,872,340 ------------------------------------------------------------- Other Assets, Less Liabilities -- 0.01% 2,232 ------------------------------------------------------------- NET ASSETS -- 100.00% $16,874,572 ============================================================= + Non-income earning securities. See notes to financial statements. -------------------------------------------------------------------------------- iShares Schedules of Investments page 45 iShares S&P SmallCap 600/BARRA Value Index Fund Schedule of Investments September 30, 2000 (Unaudited) Security Shares Value ------------------------------------------------------------- COMMON STOCKS - 99.93% ------------------------------------------------------------- HNC Software Inc.+ 2,314 $ 189,314 Universal Health Services Inc. "B"+ 2,148 183,923 Radian Group Inc. 2,715 183,263 AmeriCredit Corp.+ 5,473 157,691 Pride International Inc.+ 4,710 124,815 Louis Dreyfus Natural Gas Corp.+ 3,107 123,115 Cullen/Frost Bankers Inc. 3,747 121,777 Fidelity National Financial Inc. 4,839 119,765 Dura Pharmaceuticals Inc.+ 3,219 113,872 Cerner Corp.+ 2,436 113,122 Centura Banks Inc. 2,873 110,072 Raymond James Financial Corp. 3,339 109,978 Smithfield Foods Inc.+ 4,086 107,258 Vintage Petroleum Inc. 4,518 102,785 Whole Foods Market Inc.+ 1,887 101,308 Harman International Industries Inc. 2,474 96,733 Hudson United Bancorp 3,491 96,439 First American Financial Corp. 4,582 95,649 Michaels Stores Inc.+ 2,382 95,280 Pier 1 Imports Inc. 6,949 94,246 Toll Brothers Inc.+ 2,641 90,784 Shaw Group Inc.+ 1,286 90,663 Dain Rauscher Corp. 933 86,769 Washington Federal Inc. 3,733 84,926 Men's Wearhouse Inc. (The)+ 2,995 84,796 D.R. Horton Inc. 4,872 83,743 Zale Corp.+ 2,538 82,326 Downey Financial Corp. 2,052 81,054 Ethan Allen Interiors Inc. 2,855 80,832 Bindley Western Industries Inc. 2,508 80,256 First Midwest Bancorp Inc. 2,987 79,529 AnnTaylor Stores Corp.+ 2,066 79,412 Commercial Federal Corp. 4,090 78,221 National Data Corp. 2,374 77,897 Anixter International Inc.+ 2,670 77,764 Avista Corp. 3,381 76,072 OM Group Inc. 1,728 75,384 Cable Design Technologies Corp.+ 3,085 75,004 Stillwater Mining Co.+ 2,762 74,767 Linens 'N Things Inc.+ 2,847 72,598 C-Cube Microsystems Inc.+ 3,525 72,262 Benchmark Electronics Inc.+ 1,381 71,812 Southern Union Co.+ 3,583 70,988 Constellation Brands Inc.+ 1,305 70,878 Piedmont Natural Gas Co. 2,292 $ 70,193 Invacare Corp. 2,152 69,133 Philadelphia Suburban Corp. 2,934 68,032 S3 Inc.+ 6,592 67,980 Southwest Bancorp of Texas Inc.+ 2,054 67,140 Scotts Co. (The) "A"+ 2,000 67,000 IDEXX Laboratories Inc.+ 2,503 66,955 Swift Energy Co.+ 1,600 66,500 United Stationers Inc.+ 2,443 65,656 Mutual Risk Management Ltd. 2,985 65,483 Anchor Gaming+ 820 65,241 Energen Corp. 2,180 64,855 Coventry Health Care Inc.+ 4,238 64,100 La-Z-Boy Chair Co. 4,379 63,769 Silicon Valley Group Inc.+ 2,419 63,650 Penton Media Inc. 2,283 62,783 CEC Entertainment Inc.+ 1,946 62,272 AptarGroup Inc. 2,569 61,495 Imperial Bancorp+ 3,211 61,410 Idex Corp. 2,164 60,457 United Bancshares Inc. 3,033 59,523 Whitney Holding Corp. 1,639 59,516 Delphi Financial Group Inc.+ 1,459 59,089 Alliance Semiconductor Corp.+ 2,947 58,572 Corn Products International Inc. 2,543 57,853 Seacor Smit Inc.+ 1,231 57,395 Earthgrains Company (The) 3,089 56,953 Community First Bankshares Inc. 3,216 56,481 Mueller Industries Inc.+ 2,494 55,959 Spherion Corporation+ 4,614 55,080 Xircom Inc.+ 2,172 54,843 O'Reilly Automotive Inc.+ 3,691 53,981 MascoTech Inc. 3,231 53,513 Florida Rock Industries Inc. 1,348 53,162 UIL Holdings Corporation 1,031 53,032 Diagnostic Products Corp. 983 52,713 Staten Island Bancorp Inc. 2,619 52,380 New Jersey Resources Corp. 1,287 52,284 Central Parking Corp. 2,609 51,691 Avant! Corp.+ 2,831 51,666 NVR Inc.+ 636 51,516 Veritas DGC Inc.+ 1,768 51,162 PolyOne Corp.+ 6,974 50,997 Brady Corp. "A" 1,654 50,033 Ruby Tuesday Inc. 4,441 49,961 Read-Rite Corp.+ 4,415 49,669 -------------------------------------------------------------------------------- page 46 iShares iShares S&P SmallCap 600/BARRA Value Index Fund schedule of Investments (continued) September 30, 2000 (Unaudited) Security Shares Value ----------------------------------------------------------------- COMMON STOCKS (continued) ----------------------------------------------------------------- Baldor Electric Co. 2,423 $ 49,217 Chittenden Corp. 1,906 48,960 Kent Electronics Corp.+ 2,045 48,824 Lilly Industries Inc. "B" 1,653 48,763 Pharmaceutical Product Development Inc.+ 1,819 48,317 CH Energy Group Inc. 1,201 47,890 Southwest Gas Co. 2,286 47,863 Texas Industries Inc. 1,501 47,844 Jeffries Group Inc. 1,778 47,784 Atmos Energy Corp. 2,310 47,644 National Discounts Brokers Group Inc.+ 1,524 47,149 Firstbank Corp. 1,926 47,067 Tredegar Corporation 2,712 46,952 UGI Corp. 1,934 46,900 Casey's General Store Inc. 3,557 46,241 Oshkosh Truck Corp. 1,185 45,919 Aztar Corp.+ 2,953 45,402 Footstar Inc.+ 1,397 45,141 Burlington Coat Factory Warehouse Corp. 3,150 45,084 ESS Technology Inc.+ 3,125 44,727 ABM Industries Inc. 1,637 44,506 Regis Corp. 2,949 44,235 Photronics Inc.+ 2,006 43,756 SPS Technologies Inc.+ 901 43,699 Susquehanna Bancshares Inc. 2,855 43,539 Washington Group International Inc.+ 3,787 43,314 Trenwick Group Ltd. 2,262 42,978 US Freightways Corp. 1,894 42,970 Queens County Bancorp Inc. 1,478 42,677 Pacific Sunwear of California Inc.+ 2,264 42,450 Reliance Steel & Aluminum Co. 1,988 41,872 Pinnacle Entertainment Inc.+ 1,923 41,825 Belden Inc. 1,770 41,816 Park Electrochemical Corp. 745 41,441 MAF Bancorp Inc. 1,653 41,118 FYI Inc.+ 1,099 41,075 G&K Services Inc. "A" 1,461 40,999 Tucker Anthony Sutro Corporation 1,610 40,854 Northwest Natural Gas Co. 1,790 40,723 Werner Enterprises Inc. 3,411 40,079 Polymedica Industries Inc.+ 925 39,659 M.D.C. Holdings Inc. 1,520 39,520 South Financial Group Inc. (The) 3,123 39,428 Circle International Group Inc. 1,287 38,932 UniSource Energy Corp. 2,366 $ 38,743 Simpson Manufacturing Co. Inc.+ 857 38,297 JLG Industries Inc. 3,139 38,257 Performance Food Group Co.+ 1,007 37,888 Lennox International Inc. 4,038 37,856 Owens & Minor Inc. 2,398 37,769 Standard-Pacific Corp. 2,096 37,728 American Freightways Corp.+ 2,358 37,433 Hutchinson Technology Inc.+ 1,776 37,407 St. Mary Land & Exploration Co. 1,620 37,361 Fleming Companies Inc. 2,855 37,293 Datascope Corp. 1,087 36,414 Morgan Keegan Inc. 2,080 36,400 Enhance Financial Services Group Inc. 2,775 36,075 Cooper Companies Inc. 1,005 35,552 Profit Recovery Group International Inc. (The)+ 3,591 35,461 Ciber Inc.+ 4,296 35,442 Input/Output Inc.+ 3,675 35,372 Analogic Corp. 913 35,093 Respironics Inc.+ 2,090 34,877 Pegasus Systems Inc.+ 1,776 34,743 CLARCOR Inc. 1,776 34,632 Kirby Corp.+ 1,736 34,069 Stein Mart Inc.+ 3,137 33,919 Southwest Securities Group Inc. 1,159 33,901 Hughes Supply Inc. 1,724 33,825 Milacron Inc. 2,537 33,774 Allen Telecom Inc.+ 1,986 33,638 Provident Bankshares Corp. 1,998 33,467 MAXIMUS Inc.+ 1,501 33,210 Selective Insurance Group Inc. 1,857 33,194 Prime Hospitality Corp.+ 3,255 32,957 Valmont Industries Inc. 1,653 32,853 Fleetwood Enterprises Inc. 2,386 32,360 NorthWestern Corp. 1,645 32,078 Fritz Companies Inc.+ 2,667 32,004 Tower Automotive Inc.+ 3,407 31,941 THQ Inc.+ 1,362 31,667 Harland (John H.) Co. 2,068 31,666 Agribrands International Inc.+ 720 31,410 Kellwood Co. 1,701 31,043 Ralcorp Holdings Inc.+ 2,186 30,877 Steel Dynamics Inc.+ 3,359 30,861 Quiksilver Inc.+ 1,597 30,742 Great Atlantic & Pacific Tea Co. 2,740 30,311 -------------------------------------------------------------------------------- iShares Schedules of Investments page 47 iShares S&P SmallCap 600/BARRA Value Index Fund Schedule of Investments (continued) September 30, 2000 (Unaudited) Security Shares Value ------------------------------------------------------------- COMMON STOCKS (continued) ------------------------------------------------------------- Michael Foods Inc. 1,295 $ 30,271 US Oncology Inc.+ 6,599 29,902 Interface Inc. 3,748 29,867 BE Aerospace Inc.+ 1,830 29,509 Nautica Enterprises Inc.+ 2,276 29,446 Phoenix Technologies Ltd.+ 1,846 29,421 Laclede Gas Co. 1,345 29,086 Ryland Group Inc. 929 28,799 Arch Chemicals Inc. 1,577 28,780 Russ Berrie & Co. Inc. 1,454 28,717 Brooktrout Technology Inc.+ 869 28,623 GBC Bancorp 840 28,613 Paxar Corp.+ 3,197 28,573 Toro Co. 905 28,508 Wolverine World Wide Inc. 3,019 28,114 NUI Corp. 930 28,074 Dress Barn Inc.+ 1,297 27,237 Yellow Corporation+ 1,797 27,180 IHOP Corp.+ 1,417 27,100 Pioneer-Standard Electronics Inc. 1,998 27,098 Oceaneering International Inc.+ 1,621 26,949 Auspex Systems Inc.+ 2,174 26,903 RLI Corp. 697 26,878 Offshore Logistics Inc.+ 1,502 26,848 Zenith National Insurance Corp. 1,221 26,709 School Specialty Inc.+ 1,251 26,662 Rollins Truck Leasing Corp. 4,216 26,614 Anchor Bancorp Wisconsin Inc. 1,696 26,606 General Communication Inc. "A"+ 3,712 26,564 Salton/Maxim Corp.+ 808 26,109 Intermagnetics General Corp.+ 973 25,906 Commercial Metals Co. 1,013 25,831 Riggs National Corp. 2,084 25,529 Regal-Beloit Corp. 1,494 25,338 Symmetricom Inc.+ 1,615 25,234 Brush Wellman Inc. 1,165 25,193 Electroglas Inc.+ 1,470 25,082 Seitel Inc.+ 1,742 25,041 Applied Industrial Technologies Inc. 1,445 25,017 American Italian Pasta Co.+ 1,302 24,982 Friede Goldman Halter Inc.+ 3,527 24,909 GenCorp. Inc. 3,047 24,757 Roadway Express Inc. 1,378 24,718 Avid Technology Inc.+ 1,761 24,654 Ionics Inc.+ 1,153 $ 24,573 Esterline Corp.+ 1,234 24,294 Patina Oil & Gas Corp. 1,210 24,200 Standard Microsystems Corp.+ 1,109 24,190 SpeedFam-IPEC Inc.+ 2,114 24,179 Audiovox Corp. "A"+ 1,602 24,130 Barnes Group Inc. 1,313 24,126 Ultratech Stepper Inc.+ 1,502 24,126 Volt Information Sciences Inc.+ 1,103 23,715 Bowne & Co. Inc. 2,397 23,371 Vital Sign Inc. 881 23,347 Nuevo Energy Co.+ 1,253 23,024 Orbital Sciences Corp.+ 2,723 22,805 AAR Corp. 1,978 22,622 Shopko Stores Inc.+ 2,176 22,576 ChemFirst Inc. 1,083 22,540 Chemed Corp. 708 22,523 Thomas Industries Inc. 1,105 22,376 Monaco Coach Corp.+ 1,345 22,193 Arctic Cat Inc. 1,751 22,106 Cato Corp. "A" 1,762 22,025 Marcus Corp. 2,086 21,903 Inter-Tel Inc. 1,924 21,885 CDI Corp.+ 1,357 21,712 Arkansas Best Corp.+ 1,409 21,663 Telxon Corp.+ 1,228 21,490 Foster Wheeler Corp. 2,959 21,453 RTI International Metals Inc.+ 1,485 21,440 Caraustar Industries Inc. 1,894 20,952 AO Smith Corp. "B" 1,666 20,929 Kaman Corp. "A" 1,649 20,819 Phillips-Van Heusen Corporation 2,002 20,646 Watsco Inc. 1,982 20,395 Elcor Corp. 1,397 20,256 Midwest Express Holdings Inc.+ 997 20,065 Thor Industries Inc. 861 19,911 E.W. Blanch Holdings Inc. 949 19,692 Telcom Semiconductor Inc.+ 1,320 19,635 Myers Industries Inc. 1,546 19,615 Watts Industries Inc. "A" 1,948 19,480 American States Water Co. 637 19,269 Pep Boys-Manny Moe & Jack Inc. 3,844 19,220 Midway Games Inc.+ 2,743 19,201 Winnebago Industries Inc. 1,534 19,175 Quanex Corp. 1,001 19,082 Exabyte Corp.+ 1,693 19,046 -------------------------------------------------------------------------------- page 48 iShares ishares S&P SmallCap 600/BARRA Value Index Fund Schedule of Investments (continued) September 30, 2000 (Unaudited) Security Shares Value ---------------------------------------------------------------- COMMON STOCKS (continued) ---------------------------------------------------------------- MICROS Systems Inc.+ 1,229 $ 18,512 Robbins & Myers Inc. 780 18,428 Ha-Lo Industries Inc.+ 4,596 18,384 Ryan's Family Steak Houses Inc.+ 2,370 18,219 Panera Bread Co. "A"+ 872 18,203 Aaron Rents Inc. "B" 1,410 18,154 SLI Inc. 2,470 18,062 CACI International Inc. "A"+ 830 17,793 Gardner Denver Inc.+ 1,089 17,696 New England Business Service Inc. 961 17,418 Group 1 Automotive Inc.+ 1,597 17,367 Fremont General Corp. 5,045 17,342 Lawson Products Inc. 713 17,246 Standex International Corp. 893 17,246 Consolidated Products Inc.+ 2,142 17,136 Checkpoint Systems Inc.+ 2,210 16,713 K Swiss Inc. "A" 740 16,650 Remington Oil & Gas Corp.+ 1,589 16,585 Griffon Corporation+ 2,186 16,532 Universal Forest Products Inc. 1,433 16,368 Network Equipment Technologies Inc.+ 1,526 16,309 QRS Corp.+ 1,081 16,283 Sturm Ruger & Co. Inc. 1,974 16,162 Southwestern Energy Company 1,842 16,118 United Natural Foods Inc.+ 1,301 16,100 Omnova Solutions Inc. 2,883 16,037 Parexel International Corp.+ 1,875 15,938 Stride Rite Corp. 3,139 15,891 Simpson Industries Inc. 1,273 15,594 Republic Group Inc. 841 15,453 Wet Seal Inc. "A"+ 981 15,389 Wabash National Corp. 1,677 15,303 Lindsay Manufacturing Co. 817 15,217 URS Corp.+ 1,137 15,065 National Presto Industries Inc. 501 14,999 Chiquita Brands International Inc. 4,793 14,978 Astec Industries Inc.+ 1,366 14,941 Conmed Corp.+ 1,089 14,906 Deltic Timber Corp. 877 14,854 Pope & Talbot Inc. 1,037 14,842 Schweitzer-Mauduit International Inc. 1,101 14,726 Tetra Technologies Inc.+ 965 14,656 Pediatrix Medical Group Inc.+ 1,125 14,555 Champion Enterprises Inc.+ 3,423 14,548 Information Resources Inc.+ 2,130 $ 14,511 Innovex Inc. 1,057 14,402 Gerber Scientific Inc. 1,641 14,154 Theragenics Corp.+ 2,162 14,053 Cash American Investments Inc. 1,898 13,879 BMC Industries Inc. 2,010 13,819 Cascade Natural Gas Corp. 785 13,737 Department 56 Inc.+ 1,029 13,570 Intermet Corp. 1,866 13,528 SCPIE Holdings Inc. 669 13,464 Insurance Auto Auctions Inc.+ 825 13,355 Skyline Corp. 617 13,150 M.S. Carriers Inc.+ 833 13,016 Mesa Air Group Inc.+ 2,370 12,961 Lydall Inc.+ 1,125 12,867 Wolverine Tube Inc.+ 865 12,867 Tenneco Automotive Inc. 2,478 12,855 Bangor Hydro-Electric Co. 524 12,674 Jakks Pacific Inc.+ 1,345 12,651 Material Sciences Corp.+ 1,093 12,433 Ames Department Stores Inc.+ 2,134 12,337 CPI Corp. 574 12,197 Analysts International Corp. 1,669 12,048 Bassett Furniture Industries Inc. 844 11,974 Brown Shoe Company Inc. 1,301 11,953 AVT Corp.+ 2,114 11,759 ePresence Inc.+ 1,722 11,623 Coachmen Industries Inc. 1,109 11,575 Apogee Enterprises Inc. 2,034 11,568 Landry's Seafood Restaurants Inc. 1,676 11,418 K2 Inc.+ 1,277 11,413 Flow International Corp.+ 1,049 11,408 Edgewater Technology Inc.+ 2,162 11,350 CKE Restaurant Inc. 3,655 11,193 Franklin Covey Co.+ 1,525 11,152 Consolidated Graphics Inc.+ 923 10,845 Butler Manufacturing Co. 472 10,827 Sola International Inc.+ 1,674 10,776 Quaker Chemical Corp. 628 10,676 Epicor Software Corp.+ 3,014 10,549 Dimon Inc. 3,231 10,501 Fedders Corp. 2,587 10,025 Kroll-O'Gara Co. (The)+ 1,645 9,870 Applica Inc.+ 1,594 9,863 Sunrise Medical Inc.+ 1,642 9,852 Billing Concepts Corp.+ 3,075 9,802 -------------------------------------------------------------------------------- iShares Schedules of Investments page 49 iShares S&P SmallCap 600/BARRA Value Index Fund Schedule of Investments (continued) September 30, 2000 (Unaudited) Security Shares Value --------------------------------------------------------------------- COMMON STOCKS (continued) --------------------------------------------------------------------- Gymboree Co.+ 1,798 $ 9,777 Oxford Industries Inc. 545 9,742 Jo-Ann Stores Inc.+ 1,341 9,722 Osteotech Inc.+ 1,013 9,687 Castle (A.M.) & Co. 1,001 9,635 Goody's Family Clothing Inc.+ 2,418 9,521 Sierra Health Services Inc.+ 1,986 9,309 Discount Auto Parts Inc.+ 1,189 9,140 Natures Sunshine Products Inc. 1,209 8,992 Digi International Inc.+ 1,123 8,844 Titan International Inc. 1,534 8,821 Luby's Inc. 1,657 8,803 Nash Finch Co. 813 8,486 Cone Mills Corp.+ 1,874 8,433 Central Vermont Public Service Corporation 817 8,323 Nelson (Thomas) Inc. 1,013 8,294 Penford Corp. 529 8,200 Hologic Inc.+ 1,093 8,129 J & J Snack Foods Corp.+ 628 8,125 Laser Vision Centers Inc.+ 1,866 8,105 Ashworth Inc.+ 1,025 8,072 Building Materials Holdings Corp.+ 905 8,032 Mississippi Chemical Corp. 1,921 7,684 TBC Corp.+ 1,569 7,649 Huffy Corp. 724 7,602 Royal Appliance Manufacturing Co.+ 1,177 6,988 IMCO Recycling Inc. 1,158 6,948 Hancock Fabrics Inc. 1,389 6,945 Commonwealth Industries 1,245 6,925 Standard Motor Products Inc. 865 6,920 Itron Inc.+ 1,123 6,878 Cross (A.T.) Company+ 1,274 6,848 Spacelabs Medical Inc.+ 677 6,685 Bombay Co. Inc. (The)+ 2,643 6,442 Hartmarx Corp.+ 2,142 6,426 Lillian Vernon Corporation 640 6,240 Birmingham Steel Corp. 2,270 6,101 Angelica Corp. 617 5,977 Amcast Industrial Corp. 633 5,974 Enesco Group Inc. 1,015 5,963 Haggar Corp. 469 5,862 Gottschalks Inc.+ 947 5,800 Hanger Orthopedic Group Inc.+ 1,422 5,332 Mayor's Jewelers Inc.+ 1,302 4,882 Shares or Security Principal Value --------------------------------------------------------------------- Computer Task Group Inc. 1,546 $ 4,831 Steel Technologies Inc. 765 4,829 Baker (J.) Inc. 1,061 4,774 Cyrk Inc.+ 1,175 4,039 Action Performance Companies Inc.+ 1,165 4,005 Taco Cabana Inc. "A"+ 875 3,773 Nashua Corp. 424 3,578 Books-A-Million Inc.+ 1,346 3,533 Curative Health Services Inc.+ 632 3,437 Dixie Group Inc.+ 871 3,375 Frozen Food Express Industries Inc.+ 1,221 3,129 Green Mountain Power Corp. 389 2,942 Spartan Motors Inc. 900 2,813 Guilford Mills Inc. 1,426 2,674 Insteel Industries Inc. 601 2,442 --------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $13,581,874) 14,408,064 --------------------------------------------------------------------- REPURCHASE AGREEMENT - 0.04% --------------------------------------------------------------------- Investors Bank & Trust Tri Party Repurchase Agreement, dated 09/29/00, due 10/02/00, with a maturity value of $5,545 and an effective yield of 6.25%. $5,542 5,542 --------------------------------------------------------------------- TOTAL REPURCHASE AGREEMENT (Cost: $5,542) 5,542 --------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 99.97% (Cost $13,587,416) 14,413,606 --------------------------------------------------------------------- Other Assets, Less Liabilities -- 0.03% 4,625 --------------------------------------------------------------------- NET ASSETS -- 100.00% $14,418,231 ===================================================================== + Non-income earning securities. See notes to financial statements. -------------------------------------------------------------------------------- page 50 iShares iShares S&P Europe 350 Index Fund Schedule of Investments September 30, 2000 (Unaudited) Security Shares Value ----------------------------------------------------------------------------- COMMON STOCKS - 98.89% ----------------------------------------------------------------------------- AUSTRIA - 0.08% ----------------------------------------------------------------------------- Bank Austria AG 156 $ 8,476 OMV AG 32 2,313 VA Technologie AG 24 1,208 ----------------------------------------------------------------------------- 11,997 ----------------------------------------------------------------------------- BELGIUM - 0.90% ----------------------------------------------------------------------------- Algemene Maatschappij voor Nijverheidskredit NV 248 10,026 Credit Communal de Belgique SA 188 28,028 Electrabel SA 92 19,319 Fortis "B" 1,488 45,774 Groupe Bruxelles Lambert SA 40 9,713 KBC Bancassurance Holding NV 264 11,069 UCB SA 256 8,901 ----------------------------------------------------------------------------- 132,830 ----------------------------------------------------------------------------- DENMARK - 0.15% ----------------------------------------------------------------------------- Tele Danmark A/S 400 21,995 ----------------------------------------------------------------------------- 21,995 ----------------------------------------------------------------------------- FINLAND - 3.66% ----------------------------------------------------------------------------- Nokia OYJ 12,000 486,402 Sonera Group OYJ 800 20,337 Stora Enso OYJ 1,200 10,052 UPM-Kymmene OYJ 800 20,457 ----------------------------------------------------------------------------- 537,248 ----------------------------------------------------------------------------- FRANCE - 14.14% ----------------------------------------------------------------------------- Accor SA 548 20,345 Air Liquide 252 29,562 Alcatel SA 3,168 202,738 Alstom 308 7,109 Assurances Generales de France 252 13,569 Aventis SA 1,864 139,855 AXA UAP 864 112,872 Banque National de Paris 1,052 92,767 Bouygues SA 440 22,177 Canal Plus 180 26,963 Cap Gemini SA 240 45,124 Carrefour Supermarche SA 1,588 117,324 Castorama Dubois Investissement SA 44 9,710 Christian Dior SA 236 $ 12,718 Compagnie de Saint Gobain 232 29,182 Compagnie Generale des Etablissements Michelin "B" 376 10,455 Credit Lyonnais SA 600 21,873 Dassault Systemes SA 100 8,134 Essilor International SA 16 3,940 Etablissements Economiques du Casino Guichard-Perrachon SA 96 9,059 France Telecom SA 1,016 108,874 Groupe Danone 364 49,995 Lafarge SA 292 20,104 Lagardere S.C.A. 380 23,027 Legrand SA 36 5,911 L'Oreal SA 864 67,075 LVMH 804 60,714 Pechiney SA "A" 180 7,198 Pinault-Printemps-Redoute SA 180 31,698 PSA Peugeot Citroen 96 17,058 Renault SA 372 15,958 Sagem SA 40 8,541 Sanofi-Synthelabo SA 916 49,241 Schneider SA 376 23,697 Societe Generale "A" 1,080 60,392 Societe Television Francaise 1 352 20,196 Sodexho Alliance SA 56 8,903 STMicroelectronics NV 1,084 53,153 Suez Lyonnaise des Eaux SA 476 73,823 Thomson CSF 160 6,742 Total SA "B" 1,976 289,190 Usinor SA 676 6,140 Valeo SA 164 7,111 Vivendi 1,660 123,377 ----------------------------------------------------------------------------- 2,073,594 ----------------------------------------------------------------------------- GERMANY - 9.27% ----------------------------------------------------------------------------- Adidas AG 200 10,945 Allianz AG 400 131,169 BASF AG 1,600 56,846 Bayer AG 2,000 73,970 Bayerische Hypo-und Vereinsbank AG 800 43,782 Bayerische Motoren Werke AG 800 27,328 Commerzbank AG 1,200 35,590 Continental AG 400 7,026 -------------------------------------------------------------------------------- iShares Schedules of Investments page 51 iShares S&P Europe 350 Index Fund Schedule of Investments (continued) September 30, 2000 (Unaudited) Security Shares Value -------------------------------------------------------------- COMMON STOCKS (continued) -------------------------------------------------------------- GERMANY (continued) -------------------------------------------------------------- DaimlerChrysler AG 2,200 $ 98,126 Degussa-Huels AG 200 5,455 Deutsche Bank AG 1,600 132,758 Deutsche Lufthansa AG 1,000 20,434 Deutsche Telekom AG 3,400 116,746 Dresdner Bank AG 800 34,849 EM TV & Merchandising AG 200 10,451 Epcos AG+ 200 16,242 Infineon Technologies AG+ 400 19,931 Linde AG 200 8,086 MAN AG 200 5,243 Metro AG 400 16,383 Muenchener Rueckversicherungs-Gesellschaft AG 200 59,494 Preussag AG 200 6,126 RWE AG 1,000 35,131 SAP AG 200 38,486 Schering AG 400 25,987 Siemens AG 1,400 180,115 Thyssen Krupp AG 1,000 13,443 Veba AG 1,800 92,789 Volkswagen AG 800 36,720 -------------------------------------------------------------- 1,359,651 -------------------------------------------------------------- IRELAND - 0.42% -------------------------------------------------------------- Allied Irish Bank PLC 2,280 24,593 Bank of Ireland 2,536 20,281 CRH PLC 1,024 16,306 -------------------------------------------------------------- 61,180 -------------------------------------------------------------- ITALY - 4.57% -------------------------------------------------------------- Alitalia SpA+ 4,000 7,079 Assicurazioni Generali SpA 3,200 102,958 Banca di Roma SpA 10,000 10,637 Banca Intesa SpA 12,000 46,289 Bipop Carire SpA 4,000 35,202 Enel SpA 10,780 41,773 ENI SpA 14,000 74,147 Mediaset SpA 2,000 29,800 Mediobanca Banca SpA 1,000 10,619 Olivetti SpA 10,000 27,540 Pirelli SpA 4,000 $ 11,758 Riunione Adriatica di Sicurta SpA 1,000 13,152 Rolo Banca SpA 400 7,097 San Paolo - IMI SpA 3,000 48,778 Telecom Italia Mobile SpA 8,000 64,684 Telecom Italia SpA 6,000 32,731 Telecom Italia SpA "A" 6,000 63,766 Unicredito Italiano SpA 8,000 41,734 -------------------------------------------------------------- 669,744 -------------------------------------------------------------- NETHERLANDS - 8.52% -------------------------------------------------------------- ABN AMRO Holding NV 3,400 79,231 Aegon NV 2,376 89,659 Akzo Nobel NV 796 33,586 ASM Lithography Holding NV+ 880 29,207 Burhmann NV 160 4,025 DSM NV 188 5,436 Elsevier NV 1,708 19,147 Equant NV+ 392 14,273 Fortis Amev NV 1,368 41,901 Getronics NV 940 9,442 Gucci Group NV 76 7,688 Hagemeyer NV 252 6,695 Heineken NV 376 20,909 ING Groep NV 2,272 151,374 Koninklijke Ahold NV 1,488 42,201 Numico NV 376 19,300 Philips Electronics NV 3,655 157,345 Randstad Holding NV 192 4,813 Royal Dutch Petroleum Co. 5,540 334,926 Royal KPN NV 1,531 33,345 TNT Post Group NV 744 17,305 Unilever NV 1,588 77,095 United Pan-Europe Communications NV+ 460 9,006 VNU NV 528 26,566 Wolters Kluwer NV 772 15,673 -------------------------------------------------------------- 1,250,148 -------------------------------------------------------------- NORWAY - 0.21% -------------------------------------------------------------- Norsk Hydro ASA 400 16,740 Orkla ASA 400 7,753 Petroleum Geo-Services+ 400 6,784 -------------------------------------------------------------- 31,277 -------------------------------------------------------------- -------------------------------------------------------------------------------- page 52 iShares iShares S&P Europe 350 Index Fund Schedule of Investments (continued) September 30, 2000 (Unaudited) Security Shares Value -------------------------------------------------------------- COMMON STOCKS (continued) -------------------------------------------------------------- PORTUGAL - 0.57% -------------------------------------------------------------- Banco Comercial Portugues SA "R" 4,540 $ 23,845 Banco Espirito Santo e Comercial de Lisboa SA 240 3,813 Brisa-Auto Estradas de Portugal SA 792 6,585 Cimentos De Portugal SA 248 5,681 EDP - Electricidade de Portugal SA 4,084 12,906 Portugal Telecom 2,592 26,655 Telecel-Comunicacoes Pessoais SA+ 292 3,663 -------------------------------------------------------------- 83,148 -------------------------------------------------------------- SPAIN - 4.36% -------------------------------------------------------------- Acerinox SA 128 3,390 Autopistas Concesionaria Espanola SA 372 2,922 Banco Bilbao Vizcaya SA 8,760 132,379 Banco Popular Espanol SA 572 17,545 Banco Santander Central Hispano SA 12,224 134,229 Bankinter SA 180 7,198 Endesa SA 2,940 55,276 Gas Natural SDG SA 360 6,003 Iberdrola SA 2,180 27,710 Repsol SA 2,312 42,551 Tabacalera SA "A" 820 11,834 Telefonica SA+ 9,060 179,538 Terra Networks SA+ 180 7,309 Union Electrica Fenosa SA 676 12,179 -------------------------------------------------------------- 640,063 -------------------------------------------------------------- SWEDEN - 3.73% -------------------------------------------------------------- Atlas Copco AB "B" 400 6,869 Electrolux AB "B" 800 10,044 Hennes & Mauritz AB 1,200 24,030 Nordic Baltic Holding AB 6,000 42,956 Sandvik AB 800 16,062 Securitas AB "B" 800 17,473 Skandia Forsakrings AB 2,400 47,563 Skandinaviska Enskilda Banken (SEB) 1,200 14,505 Skanska AB "B" 400 13,717 Svenska Cellulosa AB "B" 400 7,056 Svenska Handelsbanken AB "B" 1,600 25,732 Telefonakfiebolaget Ericsson AB 19,200 291,852 Telia AB+ 2,400 15,813 Volvo AB "B" 800 12,908 -------------------------------------------------------------- 546,580 -------------------------------------------------------------- SWITZERLAND - 8.20% -------------------------------------------------------------- ABB Ltd. 800 $ 77,800 Adecco SA 40 25,933 Ciba Specialty Chemicals AG 400 21,997 Cie de Financement Foncier 20 60,145 Clariant AG 40 11,531 Credit Suisse Group 680 127,143 Nestle SA 100 208,394 Novartis AG 200 306,802 Roche Holding AG 8 70,391 SAirGroup 40 5,719 Schweizerische Rueckversicherungs- Gesellschaft 40 76,411 Union Bank of Switzerbank 1,160 154,443 Zurich Allied AG 120 55,502 -------------------------------------------------------------- 1,202,211 -------------------------------------------------------------- UNITED KINGDOM - 40.11% -------------------------------------------------------------- Abbey National PLC 3,952 52,273 Aegis Group PLC 3,000 6,628 Airtours PLC 988 3,121 Alliance & Leicester PLC 1,484 12,622 Allied Domecq PLC 2,968 14,782 Allied Zurich PLC 4,380 49,552 AMVESCAP PLC 1,652 35,646 Anglian Water PLC 756 6,491 Anglo American PLC 648 34,447 Arm Holdings PLC+ 2,316 25,876 Associated British Foods PLC 1,080 5,427 BAA PLC 2,968 23,314 Bank of Scotland 3,476 30,669 Barclays PLC 4,116 114,178 Bass PLC 2,440 23,854 BBA Group PLC 1,224 6,765 BG Group PLC 9,736 61,656 Billiton PLC 4,516 16,101 Blue Circle Industries PLC 1,992 12,077 BOC Group PLC 1,368 18,014 Bodycote International PLC 720 1,782 Boots Co. PLC 2,500 18,862 BP Amoco PLC 61,060 542,793 BPB Industries PLC 1,272 4,549 British Aerospace PLC 8,316 44,951 British Airways PLC 3,004 12,720 British American Tobacco PLC 6,048 39,038 -------------------------------------------------------------------------------- iShares Schedules of Investments page 53 iShares S&P Europe 350 Index Fund Schedule of Investments (continued) September 30, 2000 (Unaudited) Security Shares Value -------------------------------------------------------------- COMMON STOCKS (continued) -------------------------------------------------------------- UNITED KINGDOM (continued) -------------------------------------------------------------- British Land Co. PLC 1,440 $ 9,497 British Sky Broadcasting Group PLC+ 1,828 28,123 British Telecommunications PLC 17,596 184,895 Bunzl PLC 1,272 7,125 Cable & Wireless PLC 7,708 109,815 Cadbury Schweppes PLC 5,644 33,323 Capita Group PLC 1,812 16,001 Carlton Communications PLC 1,780 13,877 Centrica PLC 11,108 35,541 CGU PLC 6,240 88,347 CMG PLC 1,660 32,114 Cobham PLC 256 4,001 Colt Telecom PLC+ 1,408 40,244 Computacenter PLC 264 1,307 Cookson Group PLC 2,016 5,646 Corus Group PLC 8,664 6,594 Daily Mail and General Trust "A" 772 11,113 Diageo PLC 8,840 78,845 Dixons Group PLC 5,308 16,533 Electrocomponents PLC 1,204 12,927 EMAP PLC 704 9,364 EMI Group PLC 2,188 17,510 Energis PLC 2,332 16,439 Enterprise Oil PLC 1,384 11,137 Exel PLC 824 13,030 FirstGroup PLC 1,204 3,888 FKI PLC 1,596 4,187 Gallaher Group PLC 1,748 10,488 GKN PLC "B" 2,004 19,932 Glaxo Wellcome PLC 10,128 305,499 Granada Compass PLC+ 2,800 26,111 Great Universal Stores PLC 2,796 17,779 Halifax PLC 6,244 53,291 Hammerson PLC 792 4,875 Hanson PLC 2,040 11,351 Hays PLC 4,796 27,838 HSBC Holdings PLC 22,760 323,586 IMI PLC 976 3,033 Imperial Chemical Industries PLC 2,024 11,531 Imperial Tobacco Group PLC 1,448 13,803 Invensys PLC 9,720 21,368 J Sainsbury PLC 3,260 18,007 Johnson Matthey PLC 616 $ 8,576 Kingfisher PLC 3,824 24,994 Ladbroke Group PLC 4,164 11,908 Land Securities PLC 1,452 16,513 Laporte PLC 544 4,076 Laporte PLC "B"+ 4,896 44 LASMO PLC 3,472 6,709 Legal & General Group PLC 14,280 34,506 Lloyds TSB Group PLC 14,684 136,936 Logica PLC 1,116 36,516 Lonrho PLC 492 6,544 Marconi PLC 7,576 103,680 Marks & Spencer PLC 7,988 23,965 Misys PLC 1,596 15,025 National Grid Group PLC 4,124 35,746 National Power PLC 3,116 21,690 Next PLC 952 10,172 Northern Rock PLC 1,172 6,855 Nycomed Amersham PLC "A" 1,760 17,284 Old Mutual PLC 9,572 23,059 Pearson PLC 1,648 45,643 Pearson PLC Rights (Expires 10/02/00)+ 449 12,435 Peninsular & Oriental Steam Navigation Co. PLC 1,860 16,287 Pilkington PLC 3,056 3,715 Powergen PLC 1,808 13,814 Provident Financial PLC 688 8,566 Prudential Corp. PLC 5,448 74,155 Psion PLC 888 9,685 Railtrack Group PLC 1,428 23,405 Rank Group PLC 1,948 4,765 Reckitt Benckiser PLC 1,460 17,887 Reed International PLC 3,184 25,151 Rentokil Initial PLC 6,340 14,172 Reuters Group PLC 3,956 74,894 Rio Tinto PLC 3,092 45,011 RMC Group PLC 728 6,332 Rolls Royce PLC 3,984 10,054 Royal Bank of Scotland Group PLC 6,576 138,587 Royal Sun Alliance Industries Group PLC 3,972 26,636 Safeway PLC 2,912 12,384 Sage Group PLC 3,520 26,271 Schroders PLC 376 7,624 Scottish & Southern Energy PLC 2,380 19,416 -------------------------------------------------------------------------------- page 54 iShares iShares S&P Europe 350 Index Fund Schedule of Investments (continued) September 30, 2000 (Unaudited) Security Shares Value -------------------------------------------------------------- COMMON STOCKS (continued) -------------------------------------------------------------- UNITED KINGDOM (continued) -------------------------------------------------------------- Scottish Newcastle Breweries PLC 1,732 $ 10,584 Scottish Power PLC 5,136 39,850 Sema Group PLC 864 14,812 Severn Trent PLC 952 10,327 Shell Transport & Trading Co. PLC 27,620 225,324 Slough Estates PLC 1,044 5,454 Smith W.H. Group PLC 696 3,250 SmithKline Beecham PLC 15,628 213,527 Smiths Industries PLC 880 9,162 South African Breweries PLC 1,568 10,637 Spirent PLC 1,728 17,034 Stagecoach Holdings PLC 3,092 3,210 Standard Chartered PLC 2,536 36,711 Tate & Lyle PLC 1,196 4,163 Telewest Communications PLC+ 3,932 7,583 Tesco PLC 19,004 69,302 Thames Water PLC 976 17,504 3i Group PLC 1,680 41,786 TI Group PLC 1,404 7,470 Tomkins PLC 2,640 6,477 Trinity Mirror PLC 804 5,846 Unilever PLC 8,088 52,385 United News & Media PLC 1,400 15,073 United Utilities PLC 1,528 15,548 Vodafone Group PLC ADR 165,468 616,865 Whitbread PLC 1,380 8,882 Williams PLC 2,032 9,760 WM Morrison Supermarkets PLC 4,024 10,095 Wolseley PLC 1,596 7,784 Woolwich PLC 4,228 23,760 WPP Group PLC 2,152 25,698 Zeneca Group PLC 4,908 257,209 -------------------------------------------------------------- 5,882,862 -------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $15,590,738) 14,504,528 -------------------------------------------------------------- Shares or Security Principal Value ---------------------------------------------------------------- PREFERRED STOCKS - 0.67% ---------------------------------------------------------------- GERMANY - 0.67% ---------------------------------------------------------------- SAP AG - Vorzug 400 $ 98,156 ---------------------------------------------------------------- 98,156 ---------------------------------------------------------------- TOTAL PREFERRED STOCKS (Cost: $90,522) 98,156 ---------------------------------------------------------------- REPURCHASE AGREEMENT - 0.21% ---------------------------------------------------------------- Investors Bank & Trust Tri Party Repurchase Agreement, dated 09/29/00, due 10/02/00, with a maturity value of $30,822 and an effective yield of 6.25%. $30,806 30,806 ---------------------------------------------------------------- TOTAL REPURCHASE AGREEMENT (Cost: $30,806) 30,806 ---------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 99.77% (Cost $15,712,066) 14,633,490 ---------------------------------------------------------------- Other Assets, Less Liabilities -- 0.23% 34,259 ---------------------------------------------------------------- NET ASSETS -- 100.00% $14,667,749 ================================================================ + Non-income earning securities. See notes to financial statements. -------------------------------------------------------------------------------- iShares Schedules of Investments page 55 iShares S&P/TSE 60 Index Fund Schedule of Investments September 30, 2000 (Unaudited) Security Shares Value ------------------------------------------------------------- COMMON STOCKS - 99.52% ------------------------------------------------------------- Nortel Networks Corp. 34,500 $2,073,074 Canadian Imperial Bank of Commerce 23,700 780,228 Celestica Inc.+ 9,900 682,452 Toronto Dominion Bank 18,300 537,949 Seagrams Co. Ltd. 7,800 449,760 BCE Inc. 15,900 370,640 Bank of Nova Scotia 12,000 349,162 Bombardier Inc. "B" 19,800 342,378 Shaw Communications Inc. "B" 13,500 309,756 Canadian National Railway Company 9,600 282,203 Thomson Corp. 6,300 249,302 Rogers Communications "B"+ 9,600 227,614 Canadian Pacific Ltd. 8,700 226,237 Precision Drilling Corp.+ 6,000 214,884 Inco Ltd.+ 13,200 212,450 Mitel Corp.+ 9,900 197,526 Magna International Inc. "A" 4,500 196,029 Placer Dome Inc. 19,200 179,409 Teleglobe Inc. 7,800 164,186 United Dominion Industries Ltd. 6,900 163,598 Brascan Corp. 11,700 151,346 Quebecor World Inc. 4,500 102,055 Dofasco Inc. 6,300 96,369 Domtar Inc. 11,100 95,231 ATI Technologies Inc.+ 11,100 90,433 Potash Corp. of Saskatchewan Inc. 1,500 78,312 Suncor Energy Inc. 3,300 72,865 Alcan Aluminum Ltd. 2,100 61,033 BioChem Pharma Inc.+ 2,700 59,527 Noranda Corp. 6,000 56,864 Hudson Bay Company 5,100 52,235 Nova Chemicals Corp. 2,400 45,571 Abitibi-Consolidated Inc. 2,400 22,426 Geac Computer Corp. Ltd.+ 3,900 21,788 National Bank of Canada 1,200 18,994 Canadian Tire Corp. Ltd. "A" 1,200 15,243 Manulife Financial Corp. 300 6,305 ------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $8,862,755) 9,255,434 ------------------------------------------------------------- REPURCHASE AGREEMENT - 0.11% --------------------------------------------------------------- Investors Bank & Trust Tri Party Repurchase Agreement, dated 09/29/00, due 10/02/00 with a maturity value of $9,782 and an effective yield of 6.25%. $ 9,776 $ 9,776 --------------------------------------------------------------- TOTAL REPURCHASE AGREEMENT (Cost: $9,776) 9,776 --------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 99.63% (Cost $8,872,531) 9,265,210 --------------------------------------------------------------- Other Assets, Less Liabilities -- 0.37% 34,618 --------------------------------------------------------------- NET ASSETS -- 100.00% $9,299,828 =============================================================== + Non-income earning securities. See notes to financial statements. -------------------------------------------------------------------------------- page 56 iShares Statements of Assets and Liabilities September 30, 2000 (Unaudited)
iShares S&P ------------------------------------------------------- 500/BARRA 500/BARRA MidCap 500 Growth Value 400 Index Fund Index Fund Index Fund Index Fund ---------------------------------------------------------------------------------------------------------------- ASSETS Investments at cost $1,719,187,951 $79,644,848 $57,815,166 $256,981,050 ------------------------------------------------------ Investments in securities, at market value (Note 1) $1,694,373,928 $80,963,741 $59,801,897 $267,188,413 Receivables: Investment securities sold - - - 429,149 Dividends and interest 1,518,450 44,512 68,942 205,302 ------------------------------------------------------ Total Assets 1,695,892,378 81,008,253 59,870,839 267,822,864 ------------------------------------------------------ LIABILITIES Payables: Investment securities purchased - - 41,317 443,858 Collateral for securities on loan (Note 5) 27,210,757 2,429,551 - 13,909,725 Advisory fees (Note 2) 258,397 24,821 14,630 80,273 ------------------------------------------------------ Total Liabilities 27,469,154 2,454,372 55,947 14,433,856 ------------------------------------------------------ NET ASSETS $1,668,423,224 $78,553,881 $59,814,892 $253,389,008 ====================================================== Net assets consist of: Paid-in capital $1,689,263,902 $77,091,045 $57,453,854 $223,569,555 Undistributed net investment income 472,767 15,780 19,055 26,373 Undistributed net realized gain 3,500,578 128,163 355,252 19,585,717 Net unrealized appreciation (depreciation) (24,814,023) 1,318,893 1,986,731 10,207,363 ------------------------------------------------------ NET ASSETS $1,668,423,224 $78,553,881 $59,814,892 $253,389,008 ====================================================== iShares outstanding 11,600,000 950,000 950,000 2,350,000 ====================================================== Net asset value per iShare $ 143.83 $ 82.69 $ 62.96 $ 107.83 ======================================================
-------------------------------------------------------------------------------- See notes to financial statements. -------------------------------------------------------------------------------- iShares Financial Statements page 57 Statements of Assets and Liabilities (continued) September 30, 2000 (Unaudited)
iShares S&P -------------------------------------------------- MidCap MidCap SmallCap 400/BARRA 400/BARRA SmallCap 600/BARRA Growth Value 600 Growth Index Fund Index Fund Index Fund Index Fund ---------------------------------------------------------------------------------------------------------- ASSETS Investments at cost $33,295,112 $18,152,159 $69,436,749 $16,464,289 -------------------------------------------------- Investments in securities, at market value (Note 1) $36,518,701 $19,611,664 $72,747,253 $16,872,340 Receivables: Investment securities sold 112,220 24,924 105,407 11,423 Dividends and interest 5,458 29,281 35,179 2,908 -------------------------------------------------- Total Assets 36,636,379 19,665,869 72,887,839 16,886,671 -------------------------------------------------- LIABILITIES Payables: Investment securities purchased 117,313 25,467 93,693 - Collateral for securities on loan (Note 5) - - 2,142,986 - Due to bank - - - 5,128 Advisory fees (Note 2) 14,615 7,936 17,532 6,971 -------------------------------------------------- Total Liabilities 131,928 33,403 2,254,211 12,099 -------------------------------------------------- NET ASSETS $36,504,451 $19,632,466 $70,633,628 $16,874,572 ================================================== Net assets consist of: Paid-in capital $33,171,721 $18,051,201 $66,410,758 $16,395,276 Undistributed net investment income (loss) (2,042) 4,089 10,817 (2,408) Undistributed net realized gain 111,183 117,671 901,549 73,653 Net unrealized appreciation 3,223,589 1,459,505 3,310,504 408,051 -------------------------------------------------- NET ASSETS $36,504,451 $19,632,466 $70,633,628 $16,874,572 ================================================== iShares outstanding 250,000 250,000 650,000 200,000 ================================================== Net asset value per iShare $ 146.02 $ 78.53 $ 108.67 $ 84.37 ==================================================
-------------------------------------------------------------------------------- See notes to financial statements. -------------------------------------------------------------------------------- page 58 iShares Statements of Assets and Liabilities (continued) September 30, 2000 (Unaudited) iShares S&P ------------------------------------ SmallCap 600/BARRA Value Europe 350 /TSE 60 Index Fund Index Fund Index Fund ------------------------------------------------------------------------------ ASSETS Investments at cost $13,587,416 $15,712,066 $8,872,531 ------------------------------------ Foreign currency, at cost $ - $ 19,689 $ 28,661 ------------------------------------ Investments in securities, at market value (Note 1) $14,413,606 $14,633,490 $9,265,210 Foreign currency, at value - 20,335 28,169 Cash - - 512 Receivables: Investment securities sold 35,203 - 327,620 Dividends and interest 11,926 28,943 13,740 ------------------------------------ Total Assets 14,460,735 14,682,768 9,635,251 ------------------------------------ LIABILITIES Payables: Investment securities purchased 36,657 - 327,463 Advisory fees (Note 2) 5,847 15,019 7,960 ------------------------------------ Total Liabilities 42,504 15,019 335,423 ------------------------------------ NET ASSETS $14,418,231 $14,667,749 $9,299,828 ==================================== Net Assets Consist of: Paid-in capital $13,588,572 $15,747,904 $8,847,179 Undistributed (distributions in excess of) net investment income 3,728 (241) 3,890 Undistributed net realized gain (loss) (259) (1,624) 56,714 Net unrealized appreciation (depreciation) 826,190 (1,078,290) 392,045 ------------------------------------ NET ASSETS $14,418,231 $14,667,749 $9,299,828 ==================================== iShares outstanding 200,000 200,000 150,000 ==================================== Net asset value per iShare $ 72.09 $ 73.34 $ 62.00 ==================================== ------------------------------------------------------------------------------ See notes to financial statements. ------------------------------------------------------------------------------ iShares Financial Statements page 59 Statements of Operations For the period ended September 30, 2000 (Unaudited)
iShares S&P ------------------------------------------------------- 500/BARRA 500/BARRA Midcap 500 Growth Value 400 Index Fund* Index Fund** Index Fund** Index Fund** ------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME Dividends+ $ 4,644,284 $ 149,323 $ 280,666 $ 772,151 Interest++ 19,166 1,105 576 8,527 ------------------------------------------------------ Total investment income 4,663,450 150,428 281,242 780,678 ------------------------------------------------------ EXPENSES (NOTE 2) Advisory fees 381,695 51,265 27,872 138,960 ------------------------------------------------------ Total expenses 381,695 51,265 27,872 138,960 ------------------------------------------------------ Net investment income 4,281,755 99,163 253,370 641,718 ------------------------------------------------------ NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain from investments 3,500,578 128,163 355,252 19,585,717 Net change in unrealized appreciation (depreciation) on investments (24,814,023) 1,318,893 1,986,731 10,207,363 ------------------------------------------------------ Net realized and unrealized gain (loss) (21,313,445) 1,447,056 2,341,983 29,793,080 ------------------------------------------------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (17,031,690) $1,546,219 $2,595,353 $30,434,798 ====================================================== ------------------------------------------------------------------------------------------------ +Net of foreign withholding tax of: $ 21,347 $ 201 $ 1,539 $ - ++Includes securities lending income of: $ 4,532 $ 95 $ - $ 3,421 ------------------------------------------------------------------------------------------------
* For the period from May 15, 2000 (commencement of operations) to September 30, 2000. ** For the period from May 22, 2000 (commencement of operations) to September 30, 2000. See notes to financial statements. -------------------------------------------------------------------------------- page 60 iShares Statements of Operations (continued) For the period ended September 30, 2000 (Unaudited)
iShares S&P ----------------------------------------------------- MidCap MidCap SmallCap 400/BARRA 400/BARRA SmallCap 600/BARRA Growth Value 600 Growth Index Fund** Index Fund** Index Fund* Index Fund** ----------------------------------------------------------------------------------------------- NET INVESTMENT INCOME Dividends $ 13,333 $ 76,446 $ 112,776 $ 5,103 Interest+ 186 120 2,961 39 --------------------------------------------------- Total investment income 13,519 76,566 115,737 5,142 --------------------------------------------------- EXPENSES (NOTE 2) Advisory fees 15,561 8,457 32,470 7,550 --------------------------------------------------- Total expenses 15,561 8,457 32,470 7,550 --------------------------------------------------- Net investment income (loss) (2,042) 68,109 83,267 (2,408) --------------------------------------------------- NET REALIZED AND UNREALIZED GAIN Net realized gain from investments 111,183 117,671 901,549 73,653 Net change in unrealized appreciation on investments 3,223,589 1,459,505 3,310,504 408,051 --------------------------------------------------- Net realized and unrealized gain 3,334,772 1,577,176 4,212,053 481,704 --------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $3,332,730 $1,645,285 $4,295,320 $479,296 =================================================== ----------------------------------------------------------------------------------------------- +Includes securities lending income of: $ - $ - $ 2,323 $ - -----------------------------------------------------------------------------------------------
* For the period from May 22, 2000 (commencement of operations) to September 30, 2000. ** For the period from July 24, 2000 (commencement of operations) to September 30, 2000. See notes to financial statements. -------------------------------------------------------------------------------- iShares Financial Statements page 61 Statements of Operations (continued) For the period ended September 30, 2000 (Unaudited)
iShares S&P ---------------------------------------- SmallCap 600/BARRA Value Europe 350 /TSE 60 Index Fund** Index Fund*** Index Fund* ------------------------------------------------------------------------------------------------------------------ NET INVESTMENT INCOME Dividends+ $ 33,219 $ 50,635 $ 37,027 Interest 107 416 838 ------------------------------------ Total investment income 33,326 51,051 37,865 ------------------------------------ EXPENSES (NOTE 2) Advisory fees 6,334 16,172 14,175 ------------------------------------ Total expenses 6,334 16,172 14,175 ------------------------------------ Net investment income 26,992 34,879 23,690 ------------------------------------ NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from: Investments (259) (303) 57,680 Foreign currency transactions - (1,321) (966) ------------------------------------ Net realized gain (loss) (259) (1,624) 56,714 ------------------------------------ Net change in unrealized appreciation (depreciation) on: Investments 826,190 (1,078,576) 392,679 Translation of assets and liabilities in foreign currencies - 286 (634) ------------------------------------ Net change in unrealized appreciation (depreciation) 826,190 (1,078,290) 392,045 ------------------------------------ Net realized and unrealized gain (loss) 825,931 (1,079,914) 448,759 ------------------------------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $852,923 $ (1,045,035) $472,449 ==================================== ---------------------------------------------------------------------------------------------------------------- +Net of foreign withholding tax of: $ - $ 5,654 $ 6,536 ----------------------------------------------------------------------------------------------------------------
* For the period from June 12, 2000 (commencement of operations) to September 30, 2000. ** For the period from July 24, 2000 (commencement of operations) to September 30, 2000. *** For the period from July 25, 2000 (commencement of operations) to September 30, 2000. See notes to financial statements. -------------------------------------------------------------------------------- page 62 iShares Statements of Changes in Net Assets For the period ended September 30, 2000 (Unaudited)
iShares S&P --------------------------------------------------------------------------- 500/BARRA 500/BARRA MIDCAP 500 Growth Value 400 Index Fund* Index Fund** Index Fund** Index Fund** -------------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income $ 4,281,755 $ 99,163 $ 253,370 $ 641,718 Net realized gain 3,500,578 128,163 355,252 19,585,717 Net change in unrealized appreciation (depreciation) (24,814,023) 1,318,893 1,986,731 10,207,363 --------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (17,031,690) 1,546,219 2,595,353 30,434,798 --------------------------------------------------------------------------- Distributions To iShareholders: From net investment income (3,808,988) (83,383) (234,315) (615,345) --------------------------------------------------------------------------- Total distributions to iShareholders (3,808,988) (83,383) (234,315) (615,345) --------------------------------------------------------------------------- iShares Transactions: iShares sold 1,853,792,513 77,091,045 57,453,854 314,895,395 iShares redeemed (164,528,611) - - (91,325,840) --------------------------------------------------------------------------- Net increase in net assets from iShares transactions 1,689,263,902 77,091,045 57,453,854 223,569,555 --------------------------------------------------------------------------- Increase in net assets 1,668,423,224 78,553,881 59,814,892 253,389,008 NET ASSETS: Beginning of period - - - - --------------------------------------------------------------------------- End of period $1,668,423,224 $78,553,881 $59,814,892 $253,389,008 =========================================================================== Undistributed net investment income included in net assets at end of period $ 472,767 $ 15,780 $ 19,055 $ 26,373 =========================================================================== iSHARES ISSUED AND REDEEMED: iShares sold 12,750,000 950,000 950,000 3,200,000 iShares redeemed (1,150,000) - - (850,000) --------------------------------------------------------------------------- Net increase in iShares outstanding 11,600,000 950,000 950,000 2,350,000 ===========================================================================
-------------------------------------------------------------------------------- * For the period from May 15, 2000 (commencement of operations) to September 30, 2000. ** For the period from May 22, 2000 (commencement of operations) to September 30, 2000. See notes to financial statements. -------------------------------------------------------------------------------- iShares Financial Statements page 63 Statements of Changes in Net Assets (continued) For the period ended September 30, 2000 (unaudited)
iShares S&P --------------------------------------------------------------------------------- MidCap MidCap SmallCap 400/BARRA 400/BARRA SmallCap 600/BARRA Growth Value 600 Growth Index Fund** Index Fund** Index Fund* Index Fund** --------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income (loss) $ (2,042) $ 68,109 $ 83,267 $ (2,408) Net realized gain 111,183 117,671 901,549 73,653 Net change in unrealized appreciation 3,223,589 1,459,505 3,310,504 408,051 --------------------------------------------------------------------------------- Net increase in net assets resulting from operations 3,332,730 1,645,285 4,295,320 479,296 --------------------------------------------------------------------------------- Distributions To iShareholders: From net investment income - (64,020) (72,450) - --------------------------------------------------------------------------------- Total distributions to iShareholders - (64,020) (72,450) - --------------------------------------------------------------------------------- iShares Transactions: iShares sold 33,171,721 18,051,201 66,410,758 16,395,276 --------------------------------------------------------------------------------- Net increase in net assets from iShares transactions 33,171,721 18,051,201 66,410,758 16,395,276 --------------------------------------------------------------------------------- Increase in net assets 36,504,451 19,632,466 70,633,628 16,874,572 NET ASSETS: Beginning of period - - - - --------------------------------------------------------------------------------- End of period $36,504,451 $19,632,466 $70,633,628 $16,874,572 ================================================================================= Undistributed net investment income (loss) included in net assets at end of period $ (2,042) $ 4,089 $ 10,817 $ (2,408) ================================================================================= iSHARES ISSUED AND REDEEMED: iShares sold 250,000 250,000 650,000 200,000 --------------------------------------------------------------------------------- Net increase in iShares outstanding 250,000 250,000 650,000 200,000 =================================================================================
-------------------------------------------------------------------------------- * For the period from May 22, 2000 (commencement of operations) to September 30, 2000. ** For the period from July 24, 2000 (commencement of operations) to September 30, 2000. See notes to financial statements. -------------------------------------------------------------------------------- page 64 iShares Statements of Changes in Net Assets (continued) For the period ended September 30, 2000 (Unaudited)
iShares S&P ---------------------------------------------------------------- SmallCap 600/BARRA Value Europe 350 /TSE 60 Index Fund** Index Fund*** Index Fund* ---------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income $ 26,992 $ 34,879 $ 23,690 Net realized gain (loss) (259) (1,624) 56,714 Net change in unrealized appreciation (depreciation) 826,190 (1,078,290) 392,045 ---------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 852,923 (1,045,035) 472,449 ---------------------------------------------------------------- Distributions to iShareholders: From net investment income (23,264) (35,120) (19,800) ---------------------------------------------------------------- Total distributions to iShareholders (23,264) (35,120) (19,800) ---------------------------------------------------------------- ishares Transactions: iShares sold 13,588,572 15,747,904 8,847,179 ---------------------------------------------------------------- Net increase in net assets from iShares transactions 13,588,572 15,747,904 8,847,179 ---------------------------------------------------------------- Increase in net assets 14,418,231 14,667,749 9,299,828 NET ASSETS: Beginning of period - - - ---------------------------------------------------------------- End of period $14,418,231 $14,667,749 $9,299,828 ================================================================ Undistributed (distributions in excess of) net investment income included in net assets at end of period $ 3,728 $ (241) $ 3,890 ================================================================ iSHARES ISSUED AND REDEEMED: iShares sold 200,000 200,000 150,000 ---------------------------------------------------------------- Net increase in iShares outstanding 200,000 200,000 150,000 ================================================================
-------------------------------------------------------------------------------- * For the period from June 12, 2000 (commencement of operations) to September 30, 2000. ** For the period from July 24, 2000 (commencement of operations) to September 30, 2000. *** For the period from July 25, 2000 (commencement of operations) to September 30, 2000. See Notes to Financial Statements. -------------------------------------------------------------------------------- iShares Financial Statements page 65 Financial Highlights (For a share outstanding throughout each period) For the period ended september 30, 2000 (unaudited)
iShares S&P --------------------------------------------------------------------------------------- 500/BARRA 500/BARRA Midcap 500 Growth Value 400 Index Fund* Index Fund** Index Fund** Index Fund** --------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 145.24 $ 82.15 $ 60.20 $ 92.63 --------------------------------------------------------------------------------------- Income from investment operations: Net investment income 0.44 0.10 0.29 0.28 Net realized and unrealized gain (loss) (1.45) 0.53 2.74 15.19 --------------------------------------------------------------------------------------- Total from investment operations (1.01) 0.63 3.03 15.47 --------------------------------------------------------------------------------------- Less distributions from: Net investment income (0.40) (0.09) (0.27) (0.27) --------------------------------------------------------------------------------------- Total distributions (0.40) (0.09) (0.27) (0.27) --------------------------------------------------------------------------------------- Net asset value, end of period $ 143.83 $ 82.69 $ 62.96 $ 107.83 ======================================================================================= Total return (not annualized) (0.70)% 0.76% 5.04% 16.71% ======================================================================================= Ratios/supplemental Data: Net assets, end of period (000s) $1,668,423 $78,554 $59,815 $253,389 Ratio of expenses to average net assets+ 0.09% 0.18% 0.18% 0.20% Ratio of net investment income to average net assets+ 1.05% 0.35% 1.62% 0.91% Portfolio turnover rate++ 2% 13% 12% 12% ---------------------------------------------------------------------------------------------------------------------------------
* For the period from May 15, 2000 (commencement of operations) to September 30, 2000. ** For the period from May 22, 2000 (commencement of operations) to September 30, 2000. + Annualized for periods of less than one year. ++ Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. See Notes to Financial Statements. -------------------------------------------------------------------------------- page 66 iShares Financial Highlights (continued) (For a Share outstanding throughout each period) For the period ended September 30, 2000 (Unaudited)
iShares S&P --------------------------------------------------------------------------------------- Midcap Midcap SmallCap 400/Barra 400/Barra SmallCap 600/Barra Growth Value 600 Growth Index Fund** Index Fund** Index Fund* Index Fund** --------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $135.73 $ 72.40 $ 97.95 $ 83.34 --------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) (0.01) 0.28 0.14 (0.01) Net realized and unrealized gain 10.30 6.11 10.71 1.04 --------------------------------------------------------------------------------------- Total from investment operations 10.29 6.39 10.85 1.03 --------------------------------------------------------------------------------------- less distributions from: Net investment income - (0.26) (0.13) - --------------------------------------------------------------------------------------- Total distributions - (0.26) (0.13) - --------------------------------------------------------------------------------------- Net asset value, end of period $146.02 $ 78.53 $108.67 $ 84.37 ======================================================================================= Total return (not annualized) 7.58% 8.83% 11.08% 1.24% ======================================================================================= Ratios/Supplemental data: Net assets, end of period (000s) $36,504 $19,632 $70,634 $16,875 Ratio of expenses to average net assets+ 0.25% 0.25% 0.20% 0.25% Ratio of net investment income (loss) to average net assets+ (0.03)% 1.98% 0.51% (0.08)% Portfolio turnover rate++ 8% 7% 15% 11%
-------------------------------------------------------------------------------- * For the period from May 22, 2000 (commencement of operations) to September 30, 2000. ** For the period from July 24, 2000 (commencement of operations) to September 30, 2000. + Annualized for periods of less than one year. ++ 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 67 Financial Highlights (continued) (For a share outstanding throughout each period) For the period ended September 30, 2000 (Unaudited) iShares S&P ---------------------------------------- SmallCap 600/BARRA Value Europe 350 /TSE 60 Index Fund** Index Fund*** Index Fund* ------------------------------------------------------------------------ Net asset value, beginning of period $ 68.34 $ 79.32 $ 59.00 ---------------------------------------- Income from investment operations: Net investment income 0.13 0.18 0.16 Net realized and unrealized gain (loss) 3.74 (5.98) 2.97 ---------------------------------------- Total from investment operations 3.87 (5.80) 3.13 ---------------------------------------- less distributions from: Net investment income (0.12) (0.18) (0.13) ---------------------------------------- Total distributions (0.12) (0.18) (0.13) ---------------------------------------- Net asset value, end of period $ 72.09 $ 73.34 $ 62.00 ======================================== Total return (not annualized) 5.66% (7.31)% 5.30% ======================================== Ratios/Supplemental data: Net assets, end of period (000s) $ 14,418 $ 14,668 $ 9,300 Ratio of expenses to average net assets+ 0.25% 0.60% 0.50% Ratio of net investment income to average net assets+ 1.05% 1.28% 0.83% Portfolio turnover rate++ 7% 0%+++ 24% -------------------------------------------------------------------------------- * For the period from June 12, 2000 (commencement of operations) to September 30, 2000. ** For the period from July 24, 2000 (commencement of operations) to September 30, 2000. *** For the period from July 25, 2000 (commencement of operations) to September 30, 2000. + Annualized for periods of less than one year. ++ Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. +++ Portfolio turnover rate rounds to less than 1%. See notes to financial statements. -------------------------------------------------------------------------------- page 68 iShares iShares Trust Notes to the Financial Statements (Unaudited) 1. SIGNIFICANT ACCOUNTING POLICIES The iShares Trust (the "Trust") currently consists of 37 investment portfolios or funds. Each fund in 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 a Declaration of Trust dated December 16, 1999. The Trust currently offers the following funds:
iShares S&P Series iShares Dow Jones Series iShares Russell Series ------------------ ------------------------ ---------------------- . iShares S&P 500 Index Fund . iShares Dow Jones U.S. Total Market . iShares Russell 3000 Index Fund . ishares S&P 500/BARRA Growth Index Index Fund . iShares Russell 3000 Growth Index Fund . iShares Dow Jones U.S. Basic Fund . iShares S&P 500/BARRA Value Index Materials Sector Index Fund . iShares Russell 3000 Value Index Fund Fund . iShares Dow Jones U.S. Consumer . iShares Russell 2000 Index Fund . iShares S&P Midcap 400 Index Fund Cyclical Sector Index Fund . iShares Russell 2000 Growth Index . iShares S&P Midcap 400/BARRA . iShares Dow Jones U.S. Consumer Fund Growth Index Fund Non-Cyclical Sector Index Fund . iShares Russell 2000 Value Index Fund . iShares S&P Midcap 400/BARRA Value . iShares Dow Jones U.S. Energy Sector . iShares Russell 1000 Index Fund Index Fund Index Fund . iShares Russell 1000 Growth Index . iShares S&P SmallCap 600 Index Fund . iShares Dow Jones U.S. Financial Fund . iShares S&P SmallCap 600/BARRA Sector Index Fund . iShares Russell 1000 Value Index Fund Growth Index Fund . iShares Dow Jones U.S. Healthcare . iShares S&P Smallcap 600/barra Healthcare Sector Index Fund Value Index Fund . iShares Dow Jones U.S. . iShares S&P 100 Index Fund* Industrial Sector Index Fund . iShares S&P Global 100 Index . iShares Dow Jones U.S. Fund** Technology Sector Index Fund . iShares S&P Europe 350 Index . iShares Dow Jones U.S. Fund Telecommunications Sector Index . iShares S&P/TSE 60 Index Fund Fund . iShares Dow Jones U.S. Utilities Sector Index Fund . iShares Dow Jones U.S. Chemicals Index Fund . iShares Dow Jones U.S. Financial Services Index Fund . iShares Dow Jones U.S. Internet Index Fund . iShares Dow Jones U.S. Real Estate Index Fund
* Public offering date on or about October 27, 2000. ** Public offering date on or about December 1, 2000. These financial statements relate to the iShares S&P Series of investment portfolios (each a "Fund", collectively the "Funds"). The iShares S&P Europe 350 and TSE 60 Index Funds invest in the securities of foreign issuers, which may subject them to investment risks not normally associated with investing in the securities of United States corporations. -------------------------------------------------------------------------------- iShares Notes to Financials page 69 iSHARES TRUST Notes to the Financial Statements (Unaudited) (Continued) The following significant accounting policies are consistently followed by the Trust in the preparation of its financial statements in conformity with generally accepted accounting principles for investment companies. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions. Actual results could differ from those estimates. SECURITY VALUATION Equity securities for which quotations are readily available are valued at the last sale price, or if no sale price, at the closing bid price in the principal market in which such securities are primarily traded. U.S. Government obligations are valued at the last reported bid price. Debt securities maturing in 60 days or less are valued at amortized cost, which approximates market 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. 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 recognized on a daily accrual basis. Realized gains and losses on investment transactions are determined using the specific identification method. FOREIGN CURRENCY TRANSLATION The accounting records of the Funds are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the prevailing rates of exchange on the valuation date. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars at the prevailing exchange rate on the respective dates of such transactions. Each Fund does not isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of securities. Such fluctuations are reflected as a component of realized and unrealized gains and losses from investments for financial reporting purposes. DISTRIBUTIONS TO SHAREHOLDERS Distributions to shareholders from net investment income are declared and distributed quarterly 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 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 distribute annually substantially all of its income and any 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 taxes was required at September 30, 2000. FORWARD CURRENCY CONTRACTS A forward currency contract is an obligation to purchase or sell a currency against another currency at a future date and price as agreed upon by the parties. A forward currency contract is traded over-the-counter and not on organized commodities or securities -------------------------------------------------------------------------------- page 70 iShares iSHARES TRUST Notes to the Financial Statements (Unaudited) (Continued) exchanges. Certain of the Funds may enter into foreign currency forward contracts to facilitate local securities settlement or to protect against currency exposure in connection with its distributions to shareholders. Contracts are recorded at market value and marked to market daily. Risks of entering into forward currency contracts include the possibility that a Fund could not close out its positions because of an illiquid market and that the Fund could experience losses if the value of its currency forwards were poorly correlated with its other investments. As of September 30, 2000, there were no open forward currency contracts. FUTURES CONTRACTS The Funds may purchase stock index futures contracts to simulate full investment in the respective underlying index, to facilitate trading or to reduce transaction costs. A futures contract is an agreement between two parties to buy and sell a specified amount of a specific instrument or index at a specified future time and at a specific price. Each Fund will only enter into futures contracts that are traded on a U.S. or foreign exchange. Upon entering into a futures contract, the Funds are required to pledge to the broker an amount of cash or cash equivalents equal to the minimum "initial margin" requirements of the exchange on which the contract is traded. Pursuant to the contract, the Funds agree to receive from or pay to the broker an amount of cash equal to the daily fluctuation in the value of the index underlying the futures contract. Such receipts or payments are known as "variation margin" and are recorded by the Funds as unrealized gains or losses. When the contract is closed, the Funds record a gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Pursuant to regulations and/or published positions of the Securities and Exchange Commission, the Funds are required to segregate cash, U.S. Government securities or high quality, liquid debt instruments in connection with long futures transactions in an amount generally equal to the entire futures contract amount. The primary risks associated with the use of futures contracts are that the changes in the value of the contracts may not correlate perfectly with changes in the market value of stocks held in the Fund, and the possibility of an illiquid market. As of September 30, 2000, there were no open long futures contracts outstanding. 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. The repurchase agreements entered into on September 30, 2000 by the Funds were fully collateralized by U.S. Government obligations with a rate of 8.13%, a maturity date of 08/15/21 and an aggregate market value of $906,542. 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. -------------------------------------------------------------------------------- iShares Notes to Financials page 71 iShares Trust Notes to the Financial Statements (Unaudited) (Continued) For its investment management services to each Fund, BGFA is entitled to a management fee based on the average daily net assets of each Fund as follows: ---------------------------------- Management iShares S&P Index Fund Fee ---------------------------------- 500 0.09% 500/BARRA Growth 0.18 500/BARRA Value 0.18 MidCap 400 0.20 MidCap 400/BARRA Growth 0.25 MidCap 400/BARRA Value 0.25 SmallCap 600 0.20 SmallCap 600/BARRA Growth 0.25 SmallCap 600/BARRA Value 0.25 Europe 350 0.60 /TSE 60 0.50 ---------------------------------- Investors Bank & Trust Company ("IBT") serves as Administrator, Custodian, Transfer Agent and Securities Lending Agent for the Funds. As compensation for its services, IBT 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 the 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 Unit Aggregations and will maintain records of both orders placed with it and confirmations of acceptance furnished by it. Certain of the officers of the Trust are also employees of IBT, the Administrator, Custodian, Transfer Agent and Securities Lending Agent for the Funds. 3. INVESTMENT PORTFOLIO TRANSACTIONS Purchases and sales of investments (excluding in-kind transactions and short-term securities) for the period ended September 30, 2000, were as follows: ------------------------------------------------ iShares S&P Index Fund Purchases Sales ------------------------------------------------ 500 $25,617,534 $21,569,248 500/BARRA Growth 10,975,047 10,998,246 500/BARRA Value 5,308,358 5,279,158 MidCap 400 24,615,582 24,264,212 MidCap 400/BARRA Growth 2,932,222 2,790,387 MidCap 400/BARRA Value 1,329,088 1,311,284 SmallCap 600 7,024,325 7,030,402 SmallCap 600/BARRA Growth 1,824,435 1,826,685 SmallCap 600/BARRA Value 1,010,346 1,009,843 Europe 350 40,675 46,922 /TSE 60 2,592,360 2,236,492 ------------------------------------------------ -------------------------------------------------------------------------------- page 72 iShares iShares Trust Notes To The Financial Statements (Unaudited) (Continued) In-kind transactions for the period ended September 30, 2000, were as follows: ---------------------------------------------------- In-kind In-kind iShares S&P Index Fund Purchases Sales ---------------------------------------------------- 500 $1,848,357,812 $164,526,091 500/BARRA Growth 77,080,096 - 500/BARRA Value 57,401,051 - MidCap 400 314,615,613 91,584,884 MidCap 400/BARRA Growth 33,029,294 - MidCap 400/BARRA Value 18,009,672 - SmallCap 600 66,396,936 - SmallCap 600/BARRA Growth 16,392,886 - SmallCap 600/BARRA Value 13,581,630 - Europe 350 15,687,810 - /TSE 60 8,449,207 - ---------------------------------------------------- At September 30, 2000, the aggregate unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:
----------------------------------------------------------------------------------- Net Unrealized Tax Unrealized Unrealized Appreciation iShares S&P Index Fund Cost Appreciation Depreciation (Depreciation) ----------------------------------------------------------------------------------- 500 $1,719,187,951 $108,135,018 $(132,949,041) $ (24,814,023) 500/BARRA Growth 79,644,848 7,752,637 (6,433,744) 1,318,893 500/BARRA Value 57,815,166 5,039,179 (3,052,448) 1,986,731 MidCap 400 256,981,050 23,517,398 (13,310,035) 10,207,363 MidCap 400/BARRA Growth 33,295,112 5,278,006 (2,054,417) 3,223,589 MidCap 400/BARRA Value 18,152,159 2,098,404 (638,899) 1,459,505 SmallCap 600 69,436,749 7,946,847 (4,636,343) 3,310,504 SmallCap 600/BARRA Growth 16,464,289 1,813,362 (1,405,311) 408,051 SmallCap 600/BARRA Value 13,587,416 1,629,737 (803,547) 826,190 Europe 350 15,712,066 340,510 (1,419,086) (1,078,576) /TSE 60 8,872,531 677,834 (285,155) 392,679 -----------------------------------------------------------------------------------
4. iSHARES TRANSACTIONS At September 30, 2000, 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 large blocks of 50,000 iShares ("Creation Unit") or multiples thereof. Except when aggregated in Creation Units, iShares are not redeemable. The consideration for purchase of Creation Units of a Fund generally consists of the in-kind deposit 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. ------------------------------------------------------------------------------- iShares Notes to Financials page 73 iShares Trust Notes To The Financial Statements (Unaudited) (Continued) 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 collateral is maintained at a value equal to at least 100% of the current market value of the loaned securities. 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. The market value of the securities on loan at September 30, 2000 and the value of the related collateral were as follows: ------------------------------------------------ Value of Value Of iShares S&P Index Fund Securities Collateral ------------------------------------------------ 500 $26,383,199 $27,210,757 500/BARRA Growth 2,364,424 2,429,551 MidCap 400 13,513,691 13,909,725 SmallCap 600 2,059,332 2,142,986 ------------------------------------------------ -------------------------------------------------------------------------------- page 74 iShares iShares 45 Fremont Street www.ishares.com 1-800-ISHARES ------ BARCLAYS GLOBAL INVESTMENT 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 F-007-01 of which is affiliated with SEI. (C)2000 Barclays Global Investors. All iShares are not sponsored, rights reserved. iShares is a servicemark Not FDIC insured IBT serves as administrator, endorsed, sold or promoted of Barclays Global Investors, N.A. All Have no bank guarantee custodian, securities lending by Standard & Poor's. Nor other trademarks, servicemarks or May lose value agent and transfer agent for does this company make any registered trademarks are the property the iShares S&P Series. representation regarding the of their respective owners. advisability of investing in iShares.