-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CXd0BvAfq+P+Cg1nGf+8aiNrc28vHUHo/AemeL+DLyNrQsgUf6WkodsSwKizsqoY wAQKDfotOjbV1E1z+O1Yag== 0000950109-00-005080.txt : 20001228 0000950109-00-005080.hdr.sgml : 20001228 ACCESSION NUMBER: 0000950109-00-005080 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001031 FILED AS OF DATE: 20001227 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ISHARES TRUST CENTRAL INDEX KEY: 0001100663 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 943351276 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 001-15897 FILM NUMBER: 796292 BUSINESS ADDRESS: STREET 1: 45 FREMONT STREET CITY: SAN FRANCISCO STATE: CA ZIP: 94105 N-30D 1 0001.txt ISHARES DOW JONES SERIES SEMIANNUAL REPORT iShares Dow Jones Series SEMIANNUAL REPORT October 31, 2000 i|Shares The way you invest now. ------- BARCLAYS GLOBAL INVESTORS Only better. TABLE OF CONTENTS Shareholder Letter....................................................... 1 Market Overview.......................................................... 2 Managers' Discussion & Analysis.......................................... 3 Schedules of Investments................................................. 18 iShares Dow Jones U.S. Total Market Index Fund........................ 18 iShares Dow Jones U.S. Basic Materials Sector Index Fund.............. 38 iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund............ 39 iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund................................................................ 43 iShares Dow Jones U.S. Energy Sector Index Fund....................... 45 iShares Dow Jones U.S. Financial Sector Index Fund.................... 46 iShares Dow Jones U.S. Healthcare Sector Index Fund................... 50 iShares Dow Jones U.S. Industrial Sector Index Fund................... 53 iShares Dow Jones U.S. Technology Sector Index Fund................... 56 iShares Dow Jones U.S. Telecommunications Sector Index Fund........... 61 iShares Dow Jones U.S. Utilities Sector Index Fund.................... 62 iShares Dow Jones U.S. Chemicals Index Fund........................... 63 iShares Dow Jones U.S. Financial Services Index Fund.................. 64 iShares Dow Jones U.S. Internet Index Fund............................ 67 iShares Dow Jones U.S. Real Estate Index Fund......................... 68 Financial Statements..................................................... 70 Financial Highlights..................................................... 79 Notes to Financial Statements............................................ 82
THIS PAGE INTENTIONALLY LEFT BLANK. To Our Shareholders The iShares Funds' semiannual period ended October 31, 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 December 2000 - -------------------------------------------------------------------------------- iShares Shareholder Letter page 1 Market Overview After a bumpy ride, U.S. equity markets overall delivered relatively flat returns during the six-month period ended October 31, 2000. During the period, concerns about the economy and the potential for future earnings growth sparked extreme levels of volatility and eventually dragged markets to new lows for the year. Performance diverged widely among sectors. In general, "old economy" companies fared well, while "new economy" companies and those with exposure to European markets languished. Not surprisingly, the utilities sector posted the strongest returns, rising 19.66% for the period. The financial and healthcare sectors also logged healthy gains, returning 19.16% and 15.42%, respectively. At the other extreme, Internet stocks were the performance laggards, losing 15.63%, while the technology sector dropped 8.14%. 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 Federal Reserve Board's desired "soft landing," and the Fed chose to leave rates unchanged at its June meeting. In July, higher than expected Gross Domestic Product and Consumer Price Index (CPI) figures were announced. Investors responded by selling off technology stocks and other high-valuation shares, and buying more defensive stocks. August brought more encouraging news for interest rates: U.S. factory orders (excluding transportation equipment) had fallen 4.8% in July, compared with a 0.5% increase in June. The CPI rose 0.2% in July, which suggested that inflation was not accelerating. 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. These indications that inflation was not accelerating contributed to another pause in Fed tightening, and U.S. equity markets welcomed the news with a strong rally in August. By September, as concerns about inflation receded, investors began to focus on new areas of concern. 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. Some investors worried about the impact these factors would have on corporate earnings. These concerns 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. The trend continued into October, as reports of weak earnings figures worried investors and pushed stocks lower. Both the Nasdaq and the S&P 500 reached new year-to-date lows for the year: on October 12, the NASDAQ fell to 3074.68, plunging 39.10% from its March high, while the S&P Index also recorded its year low of 1329.78 during the month. - -------------------------------------------------------------------------------- page 2 iShares Managers' Discussion & Analysis iShares Dow Jones U.S. Total Market Index Fund Performance as of 10/31/00 - -------------------------------------------------------------------------------- Total Return - -------------------------------------------------------------------------------- Inception to Fund Inception Date October 31, 2000 ---- -------------- ---------------- iShares Dow Jones U.S. Total Market Index Fund 06/12/00 (0.07)% - -------------------------------------------------------------------------------- Total return represents the Fund's increase in value during the time period 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. Because indexes are statistical composites that do not actually hold a portfolio of securities, they do not incur expenses. The Fund, like other investment companies, pays management fees. These expenses negatively impact the performance of the Fund, and account for some of the difference between the performance of the Fund and the performance of the Index. EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Top 10 Index Holdings --------------------- General Electric Co. 3.9% Cisco Systems Inc. 2.7% Exxon Mobil Corp. 2.2% Microsoft Corp. 2.1% Intel Corp. 2.1% Pfizer Inc. 2.0% Citigroup Inc. 1.7% Merck & Co. Inc. 1.5% American International Group Inc. 1.4% SBC Communications Inc. 1.4% The iShares Dow Jones U.S. Total Market Index Fund seeks to track the Dow Jones U.S. Total Market Index. For the period since its inception on June 12 through October 31, 2000, the Fund declined 0.07%. During the same period, the Index declined 0.03%. Three primary factors drove markets during the period: escalating oil prices, decreased corporate earnings estimates, and the continued fear of higher interest rates. As oil prices reached their highest levels since November 1990, the Clinton administration intervened and authorized the use of strategic oil reserves in an effort to prevent further price increases. Similarly, a decline in the euro prompted intervention. When the euro sank to $0.85 against the U.S. dollar -- its lowest level since its introduction in January 1999, central banks bought euros in an effort to prop up the currency. After a series of interest rate increases by the Federal Reserve in an effort to slow the economy, investors began to worry about the prospects for future corporate growth in a higher interest rate environment. The uncertainty surrounding oil prices and the euro contributed to investor apprehension about corporate earnings potential. Technology companies and those companies with exposure to European markets fell out of favor as investors turned to more defensive "old economy" stocks. After a revenue warning in September, Intel (the Fund's number five holding as of October 31) lost more than 28% for the period. Cisco Systems, the Fund's second largest holding as of October 31, fell 13%. While technology and "new economy" issues were hit hard, some "old economy" stocks delivered strong positive returns. Financial companies Citigroup and AIG, both top ten Fund holdings as of October 31, returned 10% and 28%, respectively. Similarly, pharmaceutical company Merck benefited from the retreat to "old economy" stocks, gaining 29%. - -------------------------------------------------------------------------------- iShares Managers' Discussion & Analysis page 3 Managers' Discussion & Analysis iShares Dow Jones U.S. Basic Materials Sector Index Fund Performance as of 10/31/00 - -------------------------------------------------------------------------------- Total Return - -------------------------------------------------------------------------------- Inception to Fund Inception Date October 31, 2000 ---- -------------- ---------------- iShares Dow Jones U.S. Basic Materials Sector Index Fund 06/12/00 (3.86)% - -------------------------------------------------------------------------------- Total return represents the Fund's increase in value during the time period 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. Because indexes are statistical composites that do not actually hold a portfolio of securities, they do not incur expenses. The Fund, like other investment companies, pays management fees. These expenses negatively impact the performance of the Fund, and account for some of the difference between the performance of the Fund and the performance of the Index. EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Top 10 Index Holdings --------------------- Du Pont (E.I.) de Nemours 21.1% Alcoa Inc. 11.1% Dow Chemical Co. 9.3% International Paper Co. 7.9% Weyerhaeuser Co. 4.5% Air Products & Chemicals Co. 3.8% Praxair Inc. 2.6% Union Carbide Corp. 2.6% Avery Dennison Corp. 2.5% Georgia-Pacific Corp. 2.1% The iShares Dow Jones U.S. Basic Materials Sector Index Fund seeks to track the Dow Jones U.S. Basic Materials Sector Index. For the period since its inception on June 12 through October 31, 2000, the Fund returned (3.86)%. During the same period, the Index returned (3.70)%. Basic materials shares as a whole struggled during the period. Three primary factors: slowing economic conditions, rising oil prices, and decreased corporate earnings estimates weighed on global markets during the period as investors grew apprehensive about the potential for future growth. Those companies that are the most sensitive to the state of the economy, including basic materials companies, suffered. Within the sector, companies that depend on oil and natural gas were hit particularly hard, as the prices for these resources continued to rise. Within the Fund, performance was mixed. Chemical company Union Carbide, a top ten Fund holding as of October 31, saw its shares plummet 22% during the period. The company indicated profits were hurt by higher energy and raw materials costs, as well as lower European demand caused by the weakening euro. Dow Chemical Company, which is in the process of acquiring Union Carbide, also languished. The Fund's third largest holding as of October 31, Dow lost 12% during the period. However, natural gas and chemicals producer Air Products and Chemicals, another top ten holding as of October 31, rose 11%. Paper companies International Paper and Weyerhaeuser, which saw their share price plummet during the first half of the year, rebounded slightly. International Paper returned 8%. Weyerhaeuser also edged up 1% for the period. - -------------------------------------------------------------------------------- page 4 iShares Managers' Discussion & Analysis ishares Dow Jones U.S. Consumer Cyclical Sector Index Fund Performance as of 10/31/00 - -------------------------------------------------------------------------------- Total Return - -------------------------------------------------------------------------------- Inception to Fund Inception Date October 31, 2000 ---- -------------- ---------------- iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund 06/12/00 (2.87)% - -------------------------------------------------------------------------------- Total return represents the Fund's increase in value during the time period 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. Because indexes are statistical composites that do not actually hold a portfolio of securities, they do not incur expenses. The Fund, like other investment companies, pays management fees. These expenses negatively impact the performance of the Fund, and account for some of the difference between the performance of the Fund and the performance of the Index. EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Top 10 Index Holdings --------------------- Wal-Mart Stores Inc. 8.6% Home Depot Inc. 6.8% Time Warner Inc. 5.7% Walt Disney Co. (The) 5.1% Viacom Inc. "B" 5.0% Ford Motor Company 3.4% Walgreen Co. 3.2% AT&T - Liberty Media Group "A" 2.9% McDonald's Corp. 2.8% Comcast Corp. "A" 2.4% The iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund seeks to track the Dow Jones U.S. Consumer Cyclical Sector Index. The Fund posted a negative return of 2.87% for the period since its inception, June 12 through October 31, 2000. The Index returned a negative 2.72% during the same period. Consumer companies suffered this period as retail spending fell off sharply. A 0.50% interest rate hike in May, the sixth increase in 12 months, combined with a late Easter and unusual weather swings produced a disappointing summer for many retailers. In September, the euro sank to a 21-month low, and crude oil prices soared to $37.20 a barrel, the highest level since November 1990. The volatility of the stock market and October's economic slowdown led some consumers to shift their spending away from retail and leisure towards gas and electricity. The downward pull of broad economic factors was felt throughout the sector. Wal-Mart, the Fund's largest holding at 8.6% of assets as of October 31, fell 14%. Home Depot, the Fund's second largest position at 6.8%, dropped 7%. Time Warner, Walt Disney and Viacom, the Fund's numbers three, four and five largest positions, posted losses of 3%, 12% and 14%, respectively. McDonald's fell 5%, citing the weakness in the euro. Ford saw its stock price fall 48% largely due to the negative reaction of the recall of Firestone Tires. As of October 31, Ford was the sixth largest holding in the Index at 3.4% of assets. One bright spot was Walgreen Co., the Index's seventh largest holding as of October 31, which showed a 61% gain. Although the effects of a tough retail market caused some price fluctuation this period, the company's consistently strong earnings growth and solid business model contributed to its positive performance. - -------------------------------------------------------------------------------- iShares Managers' Discussion & Analysis page 5 Managers' Discussion & Analysis iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund Performance as of 10/31/00 - -------------------------------------------------------------------------------- Total Return - -------------------------------------------------------------------------------- Inception to Fund Inception Date October 31, 2000 ---- -------------- ---------------- iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund 06/12/00 4.51% - -------------------------------------------------------------------------------- Total return represents the Fund's increase in value during the time period 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. Because indexes are statistical composites that do not actually hold a portfolio of securities, they do not incur expenses. The Fund, like other investment companies, pays management fees. These expenses negatively impact the performance of the Fund, and account for some of the difference between the performance of the Fund and the performance of the Index. EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Top 10 Index Holdings --------------------- Coca-Cola Co. 13.1% America Online Inc. 11.9% Procter & Gamble Co. 9.0% Philip Morris Companies Inc. 8.4% PepsiCo Inc. 7.1% Anheuser-Busch Companies Inc. 4.2% Kimberly-Clark Corp. 3.6% Gillette Corp. 3.4% Colgate-Palmolive Co. 3.2% Safeway Inc. 2.8% The iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund posted a return of 4.51% for the period since its inception, June 12 through October 31, 2000. The Fund seeks to track the Dow Jones U.S. Consumer Non-Cyclical Sector Index, which returned 4.79% during the same period. "Old economy" consumer staple companies fell in and out of favor this period, as investor concerns over "new economy" growth stocks waxed and waned. Despite this month-to-month volatility, a strong overall economy and solid industry fundamentals lifted consumer staple stocks overall for the period. In September, the euro sank to a 21-month low at $.85 to a U.S. $1.00, hurting consumer companies with heavy European exposure. October's slowing economy and resulting shift away from technology companies benefited large cap value stocks. The Dow Jones U.S. Consumer Non-Cyclical Sector reflected these trends in the market, with more than half of the Fund's top ten securities as of October 31 showing double-digit gains for the period. Coca-Cola, the Index's largest holding at 13.1% as of October 31, and PepsiCo, the fifth largest holding at 7.1%, each returned 15%. Philip Morris, in the fourth position, showed a 32% gain. The strength of some of its brands helped its performance despite concerns over tobacco litigation. Procter and Gamble, the number three security in the Index as of October 31, plummeted earlier in the year after announcing a major restructuring, including a new CEO. However, the company rebounded and returned 26% by the end of the period. Gillette, the eighth largest holding, issued profit warnings in September resulting form the decline in the euro, but still managed a 7% gain. As with many other Internet companies, America Online, the Index's number two security at 11.9%, suffered from price volatility, falling 4% for the period. - -------------------------------------------------------------------------------- page 6 iShares Managers' Discussion & Analysis iShares Dow Jones U.S. Energy Sector Index Fund Performance as of 10/31/00 - -------------------------------------------------------------------------------- Total Return - -------------------------------------------------------------------------------- Inception to Fund Inception Date October 31, 2000 ---- -------------- ---------------- iShares Dow Jones U.S. Energy Sector Index Fund 06/12/00 1.03% - -------------------------------------------------------------------------------- Total return represents the Fund's increase in value during the time period 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. Because indexes are statistical composites that do not actually hold a portfolio of securities, they do not incur expenses. The Fund, like other investment companies, pays management fees. These expenses negatively impact the performance of the Fund, and account for some of the difference between the performance of the Fund and the performance of the Index. In addition, legal requirements applicable to all investment companies may limit the Fund's ability to invest fully in its underlying Index and may contribute to the difference between the performance of the Fund and the performance of the Index. EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Top 10 Index Holdings --------------------- Exxon Mobil Corp. 24.2% Chevron Corp. 10.3% Schlumberger Ltd. 6.4% Texaco Inc. 6.3% Phillips Petroleum Co. 3.0% Halliburton Co. 2.7% Williams Companies Inc. 2.7% Anadarko Petroleum Corp. 2.4% Conoco Inc. 2.3% Murphy Oil Corp. 2.2% The iShares Dow Jones U.S. Energy Sector Index Fund seeks to track the Dow Jones U.S. Energy Sector Index. For the period since its inception on June 12 through October 31, 2000, the Fund returned 1.03%. During the same period, the Index returned 3.34%. The inception of the Fund coincided with some of the highest crude oil prices in history. With prices above $30 per barrel in late June, OPEC announced that it would increase production in an effort to bring prices down to a more sustainable level. Although prices dropped initially, the increase in supply ultimately was too little to compensate for demand, and prices climbed to a ten- year high of $37.20 per barrel by the middle of September. In an effort to prevent prices from rising further, the Clinton administration authorized the release of strategic oil reserves. The intervention appeared to be effective, and prices settled at around $30 per barrel. Not surprisingly, those companies that benefit from high oil prices demonstrated strong performance during the period. Oil exploration company Anadarko Petroleum, one of the Fund's top ten holdings, gained 24%. Similarly, Exxon Mobil Corp. (the Fund's top holding, representing 24.2% of assets as of October 31, 2000) rose 10% due to higher oil and natural gas prices. However, for some companies the high oil prices were a detriment. Because the prices were widely considered to be at peak levels, most oil companies scaled back on new projects. For example, oilfield services company Halliburton (the Fund's sixth largest holding as of October 31) suffered, declining 23%. - -------------------------------------------------------------------------------- iShares Managers' Discussion & Analysis page 7 Managers' Discussion & Analysis iShares Dow Jones U.S. Financial Sector Index Fund Performance as of 10/31/00 - -------------------------------------------------------------------------------- Total Return - -------------------------------------------------------------------------------- Inception to Fund Inception Date October 31, 2000 ---- -------------- ---------------- iShares Dow Jones U.S. Financial Sector Index Fund 05/22/00 18.90% - -------------------------------------------------------------------------------- Total return represents the Fund's increase in value during the time period 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. Because indexes are statistical composites that do not actually hold a portfolio of securities, they do not incur expenses. The Fund, like other investment companies, pays management fees. These expenses negatively impact the performance of the Fund, and account for some of the difference between the performance of the Fund and the performance of the Index. EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Top 10 Index Holdings --------------------- Citigroup Inc. 10.6% American International Group Inc. 8.8% Morgan Stanley Dean Witter & Co. 4.1% Wells Fargo & Company 3.6% Bank of America Corp. 3.6% Fannie Mae 3.5% American Express Co. 3.2% Chase Manhatten Corp. 2.7% Merrill Lynch & Co. Inc. 2.3% Bank of New York Co. Inc. 1.9% The iShares Dow Jones U.S. Financial Sector Index Fund seeks to track the Dow Jones U.S. Financial Sector Index. For the period since its inception on May 22 through October 31, 2000, the Fund returned 18.90%. During the same period, the Index returned 19.17%. The Fund was launched on the heels of a 0.50% interest rate increase by the Federal Reserve Board. This rate hike, the sixth in a year, appeared to have the desired effect of bringing the U.S. economy to a soft landing and quelling fears of an overheated economy. However, with inflation fears behind them, investor concern shifted to the effects higher interest rates and a slower economy would have on future corporate earnings growth. Compounding these fears, oil climbed to ten-year highs as the euro sank to new lows, creating anxiety about global economic conditions and their impact on the U.S. economy. In response to the changing economic landscape, many investors sought shelter in more defensive investments. Although the shift in sentiment meant declines for most "new economy" stocks, it resulted in gains for most "old economy" stocks, including financial companies. Accordingly, many of the Fund's largest holdings logged strong returns for the period. Financial services companies Citigroup and American International Group, the Fund's largest and second largest holdings as of October 31, returned 14% and 23%, respectively. As a group, the large financial services companies performed well: Morgan Stanley Dean Witter, the Fund's third largest holding as of October 31, gained 19%, and Merrill Lynch, the number nine position as of October 31, soared 38%. Not surprisingly, Fannie Mae also benefited from the flight to quality, gaining 28%. The weakest performing group was the banks, which were disadvantaged somewhat by higher borrowing rates. Bank of America lost 4%, while Chase Manhattan declined 5%. - -------------------------------------------------------------------------------- page 8 iShares Managers' Discussion & Analysis iShares Dow Jones U.S. Healthcare Sector Index Fund Performance as of 10/31/00 - -------------------------------------------------------------------------------- Total Return - -------------------------------------------------------------------------------- Inception to Fund Inception Date October 31, 2000 ---- -------------- ---------------- iShares Dow Jones U.S. Healthcare Sector Index Fund 06/12/00 14.80% - -------------------------------------------------------------------------------- Total return represents the Fund's increase in value during the time period 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. Because indexes are statistical composites that do not actually hold a portfolio of securities, they do not incur expenses. The Fund, like other investment companies, pays management fees. These expenses negatively impact the performance of the Fund, and account for some of the difference between the performance of the Fund and the performance of the Index. EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Top 10 Index Holdings --------------------- Pfizer Inc. 15.8% Merck & Co. Inc. 12.0% Johnson & Johnson 7.0% Bristol-Myers Squibb Co. 7.0% Lilly (Eli) & Co. 5.0% American Home Products Corp. 4.8% Abbott Laboratories 4.4% Schering-Plough Corp. 4.4% Pharmacia & Upjohn Inc. 4.1% Medtronic Inc. 3.8% The iShares Dow Jones U.S. Healthcare Sector Index Fund seeks to track the Dow Jones U.S. Healthcare Sector Index. For the period since its inception on June 12 through October 31, 2000, the Fund returned 14.80%. During the same period, the Index returned 15.42%. The Fund was launched during a period of global economic uncertainty. The effects of three principal factors: rising interest rates, soaring oil prices, and decreased corporate earnings estimates led to investor concern about the sustainability of economic growth in the U.S. In response, many abandoned "new economy" technology companies and retreated to more defensive "old economy" issues. For the healthcare sector, this shift in sentiment translated into strong returns. Although those healthcare companies with significant exposure to European markets were dragged down by the weak euro, most companies in the sector posted healthy gains during the period. Many of the Fund's largest holdings as of October 31 enjoyed strong performance. Pharmaceutical company Merck, which was the Fund's second largest holding as of October 31 and represented 12.0% of Fund assets, returned an impressive 29%. The fourth largest holding, Bristol-Myers Squibb, also positively contributed to Fund performance, gaining 17%. Diversified healthcare companies were positive performers as well: The sixth largest holding American Home Products and number seven holding Abbott Labs logged gains of 20% and 31%, respectively. The only top ten holding to detract from performance was pharmaceutical giant Pfizer, which lost 4% during the period. Pfizer derives a substantial amount of revenues from European markets and was hurt by reduced European demand due to the weak euro. - -------------------------------------------------------------------------------- iShares Managers' Discussion & Analysis page 9 Managers' Discussion & Analysis ishares Dow Jones U.S. Industrial Sector Index Fund Performance as of 10/31/00 - -------------------------------------------------------------------------------- Total Return - -------------------------------------------------------------------------------- Inception to Fund Inception Date October 31, 2000 ---- -------------- ---------------- iShares Dow Jones U.S. Industrial Sector Index Fund 06/12/00 3.64% - -------------------------------------------------------------------------------- Total return represents the Fund's increase in value during the time period 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. Because indexes are statistical composites that do not actually hold a portfolio of securities, they do not incur expenses. The Fund, like other investment companies, pays management fees. These expenses negatively impact the performance of the Fund, and account for some of the difference between the performance of the Fund and the performance of the Index. In addition, legal requirements applicable to all investment companies may limit the Fund's ability to invest fully in its underlying Index and may contribute to the difference between the performance of the Fund and the performance of the Index. EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Top 10 Index Holdings --------------------- General Electric Co. 22.6% Tyco International Ltd. 5.0% JDS Uniphase Corp. 4.6% Corning Inc. 4.6% Minnesota Mining & Manufacturing Co. 2.6% Boeing Co. 2.4% Automatic Data Processing Inc. 2.3% Emerson Electric Co. 2.0% Agilent Technologies Inc. 1.9% Honeywell International Inc. 1.8% The iShares Dow Jones U.S. Industrial Sector Index Fund seeks to track the Dow Jones U.S. Industrial Sector Index. For the period since its inception on June 12 through October 31, 2000, the Fund returned 3.64%. During the same period, the Index returned 3.03%. The relatively flat performance of the industrials sector for the period masks widely diverging performance between the "new economy" technology and communications companies, and "old economy" brick and mortar companies. During the period, economic conditions contributed to investor concern for the future prospects of continued earnings growth. The effects of higher interest rates, combined with ever-increasing oil prices and a weakening European currency, created concern about U.S. stocks. In particular, technology companies and those companies with exposure to European markets came under fire. However, more traditional companies, such as basic industrial and manufacturing companies, fared better. Similarly, the performance of the Fund's holdings was divided into two groups: "old economy" stocks delivered robust gains, while "new economy" holdings languished. Diversified manufacturing companies Tyco International, the Fund's number two holding as of October 31, and Minnesota Mining & Manufacturing, the number five holding, returned 24% and 18%, respectively. Aerospace company Boeing soared 78%, citing strong earnings despite a drop in revenues. Many fiber optic companies fell after Nortel's disappointing earnings release in late October. JDS Uniphase, the Fund's third largest holding as of October 31, lost 30%. Agilent also was caught up in the technology rout, sinking 30% for the period. - -------------------------------------------------------------------------------- page 10 iShares Managers' Discussion & Analysis iShares Dow Jones U.S. Technology Sector Index Fund Performance as of 10/31/00
- -------------------------------------------------------------------------------------------- Total Return - -------------------------------------------------------------------------------------------- Inception to Fund Inception Date October 31, 2000 ---- -------------- ---------------- iShares Dow Jones U.S. Technology Sector Index Fund 05/15/00 (8.48)% - --------------------------------------------------------------------------------------------
Total return represents the Fund's increase in value during the time period 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. Because indexes are statistical composites that do not actually hold a portfolio of securities, they do not incur expenses. The Fund, like other investment companies, pays management fees. These expenses negatively impact the performance of the Fund, and account for some of the difference between the performance of the Fund and the performance of the Index. EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Top 10 Index Holdings --------------------- Cisco Systems Inc. 10.8% Microsoft Corp. 8.3% Intel Corp. 8.2% EMC Corp. 5.6% Sun Microsystems Inc. 5.0% International Business Machines Corp. 5.0% Oracle Corp. 4.1% Texas Instruments Inc. 2.4% Lucent Technologies Inc. 2.2% Hewlett-Packard Co. 2.2% The iShares Dow Jones U.S. Technology Sector Index Fund seeks to track the Dow Jones U.S. Technology Sector Index. For the period since its inception May 15 through October 31, 2000, the Fund returned (8.48)%. During the same period, the Index returned (8.14)%. The period from May to October was marked by high volatility in the market, as growth and technology stocks went in and out of favor with value and "old economy" stocks. Investors were sensitive to economic data released, which alternated from positive to negative. In May, the technology sector continued its slide from its March high. June economic reports indicated a slowing economy and the hope of a "soft landing," and the market reacted positively. Inflation concerns were renewed by strong economic data in July, and there was another sell-off of technology issues. August data for jobless claims and durable good orders relieved inflationary worries, and there was a broad rally in the equity markets. In September, investor worries turned to the high price of crude oil, decreased corporate earnings estimates, and the prospect of rising interest rates. Technology companies were among the hardest hit, as investors abandoned them in favor of more defensive stocks. In September, Intel Corp., the Fund's third largest position as of October 31, announced it would not meet third quarter revenues, citing the weakness of the euro. Its stock dropped 22% for the day and 44.5% for the month. Other technology stocks fell in response to general technology concerns, and the sell-off spread to the broader market due to concerns that profit expectations were too high. IBM, the sixth largest Fund holding as of October 31, also announced lower than expected sales and fell 15.5% in a day. EMC and Sun Microsystems, the Fund's fourth and fifth largest holdings as of October 31, posted gains of 35% and 32%, respectively. Most of the Fund's top holdings, however, declined over the period. Cisco Systems, Intel, Oracle, Texas Instruments, Lucent and Hewlett- Packard experienced losses ranging from 10% to 64%. - -------------------------------------------------------------------------------- iShares Managers' Discussion & Analysis page 11 Managers' Discussion & Analysis iShares Dow Jones U.S. Telecommunications Sector Index Fund Performance as of 10/31/00
- ---------------------------------------------------------------------------------------------------- Total Return - ---------------------------------------------------------------------------------------------------- Inception to Fund Inception Date October 31, 2000 ---- -------------- ---------------- iShares Dow Jones U.S. Telecommunications Sector Index Fund 05/22/00 (8.32)% - ----------------------------------------------------------------------------------------------------
Total return represents the Fund's increase in value during the time period 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. Because indexes are statistical composites that do not actually hold a portfolio of securities, they do not incur expenses. The Fund, like other investment companies, pays management fees. These expenses negatively impact the performance of the Fund, and account for some of the difference between the performance of the Fund and the performance of the Index. In addition, legal requirements applicable to all investment companies may limit the Fund's ability to invest fully in its underlying Index and may contribute to the difference between the performance of the Fund and the performance of the Index. EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Top 10 Index Holdings --------------------- SBC Communications Inc. 19.9% Verizon Communications 15.2% AT&T Corp. 8.9% BellSouth Corp. 8.6% WorldCom Inc. 7.5% Qwest Communications International Inc. 6.6% Alltel Corp. 3.3% CenturyTel Inc. 2.4% Telephone & Data Systems Inc. 2.4% United States Cellular Corp. 2.3% The iShares Dow Jones U.S. Telecommunications Sector Index Fund seeks to track the Dow Jones U.S. Telecommunications Sector Index. For the period from its inception May 22 through October 31, 2000, the Fund returned (8.32)%. During the same period, the Index returned (5.02)%. During the reporting period, investor enthusiasm for this sector weakened. The telecoms began their slide in April, as investors retreated from high valuation companies to defensive stocks and the "old economy." Initiating the flight from this sector were announcements from AT&T and Worldcom that profits from their long distance operations were down. Increasing investor concern over the state of inflation was the Federal Reserve Board's 0.5% increase to the Federal Fund rate on June 16. This move brought the rate to 6.5%, the highest level since January 1991. Competition in the wireless market has contributed to rate reductions and encouraged corporate alliances. Verizon, which was created through the merger of Bell Atlantic and GTE, is in a joint venture with Vodafone AirTouch, forming Verizon Wireless. BellSouth and SBC intend to form a partnership which would result in the second largest wireless service provider. Despite the fact that many of the Fund's top ten holdings as of October 31 had positive returns, the Fund's performance results was weighed down by the two large long distance carriers. The share price of AT&T and Worldcom dropped 36% and 38%, respectively. The Fund's largest holding as of October 31, SBC Communications, was up 36%. The eighth largest position as of the end of the period, CenturyTel Inc., returned 42% for the period. - -------------------------------------------------------------------------------- page 12 iShares Managers' Discussion & Analysis iShares Dow Jones U.S. Utilities Sector Index Fund Performance as of 10/31/00
- ---------------------------------------------------------------------------------------------------------------- Total Return - ---------------------------------------------------------------------------------------------------------------- Inception to Fund Inception Date October 31, 2000 ---- -------------- ---------------- iShares Dow Jones U.S. Utilities Sector Index Fund 06/12/00 19.32% - ----------------------------------------------------------------------------------------------------------------
Total return represents the Fund's increase in value during the time period 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. Because indexes are statistical composites that do not actually hold a portfolio of securities, they do not incur expenses. The Fund, like other investment companies, pays management fees. These expenses negatively impact the performance of the Fund, and account for some of the difference between the performance of the Fund and the performance of the Index. EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Top 10 Index Holdings --------------------- Enron Corp. 14.0% Duke Energy Corp. 7.3% AES Corp. 4.9% Exelon Corp. 4.5% Southern Co. 4.4% Dominion Resources Inc. 3.3% American Electric Power Inc. 3.1% Calpine Corp. 2.5% FPL Group Inc. 2.4% PG&E Corp. 2.4% The iShares Dow Jones U.S. Utilities Sector Index Fund seeks to track the Dow Jones U.S. Utilities Sector Index. For the period since its inception on June 12 through October 31, 2000, the Fund returned 19.32%. During the same period, the Index returned 19.66%. Utilities stocks represented the top performing sector for the period. During the summer, the combined effects of rising oil prices, decreased corporate earnings estimates, and a series of interest rate hikes by the Federal Reserve caused increased investor apprehension about the prospects for economic growth. In response, many investors retreated from growth-oriented companies. More defensive companies such as utilities, however, benefited from this shift to value companies. Compounding the strength of the utilities sector, the global demand for energy continued to rise as it has throughout the year, elevating prices for natural gas. Demand for electric power in the U.S. also continued to face limited supply, driving up prices for electric utility shares. Performance of Fund holdings reflected the effects of these factors. The Fund's top two holdings as of October 31, natural gas supplier Enron and energy producer Duke Energy, returned 12% and 45%, respectively. Both companies benefited from the high global demand for natural gas. Electric utility top ten holdings as of October 31 also posted strong gains. Southern Company rose 17%, Dominion Resources climbed 33%, and Calpine shot up an impressive 58%. - -------------------------------------------------------------------------------- iShares Managers' Discussion & Analysis page 13 Managers' Discussion & Analysis iShares Dow Jones U.S. Chemicals Index Fund Performance as of 10/31/00 - -------------------------------------------------------------------------------- Total Return - -------------------------------------------------------------------------------- Inception to Fund Inception Date October 31, 2000 ---- -------------- ---------------- iShares Dow Jones U.S. Chemicals Index Fund 06/12/00 (3.86)% - -------------------------------------------------------------------------------- Total return represents the Fund's increase in value during the time period 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. Because indexes are statistical composites that do not actually hold a portfolio of securities, they do not incur expenses. The Fund, like other investment companies, pays management fees. These expenses negatively impact the performance of the Fund, and account for some of the difference between the performance of the Fund and the performance of the Index. In addition, legal requirements applicable to all investment companies may limit the Fund's ability to invest fully in its underlying Index and may contribute to the difference between the performance of the Fund and the performance of the Index. EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Top 10 Index Holdings --------------------- Du Pont (E.I.) de Nemours 22.7% Dow Chemical Co. 14.7% Air Products & Chemicals Inc. 6.7% Avery Dennison Corp. 4.6% Praxair Inc. 4.5% Union Carbide Corp. 4.3% Ecoloab Inc. 3.9% Rohm & Haas Co. "A" 3.6% Eastman Chemical Co. 3.2% Engelhard Corp. 2.9% The iShares Dow Jones U.S. Chemicals Index Fund seeks to track the Dow Jones U.S. Chemicals Index. For the period since its inception on June 12 through October 31, 2000, the Fund declined 3.86%. During the same period, the Index declined 5.51%. The Fund's launch came at a time of historically high energy prices. In particular, September saw the price of crude oil reached its highest level since November 1990, and natural gas experienced unprecedented global demand, driving up prices. Because crude oil and natural gas are the main raw ingredients used in the products of most chemical companies, many companies in the sector were hit hard during the period. In addition, many chemical companies depend on European markets for a significant portion of their revenues. These companies' losses were exacerbated by the weak euro, which fell to a new low against the U.S. dollar during the period and led to decreased demand in European markets. The poor economic conditions for the chemicals sector was reflected in the performance of some of its major holdings. Top ten Fund holdings as of October 31 with substantial European exposure include number four holding Avery Dennison, which fell 20%; the largest holding Du Pont, which lost 8%; and number two holding Dow Chemical which declined 12%. Dow Chemical recently indicated its interest in acquiring Union Carbide, the Fund's number six holding, which declined 22%. Natural gas and chemicals producer Air Products and Chemicals, which was the Fund's third largest holding as of October 31, rose 11%. - -------------------------------------------------------------------------------- page 14 iShares Managers' Discussion & Analysis iShares Dow Jones U.S. Financial Services Index Fund Performance as of 10/31/00 - -------------------------------------------------------------------------------- Total Return - -------------------------------------------------------------------------------- Inception to Fund Inception Date October 31, 2000 ---- -------------- ---------------- iShares Dow Jones U.S. Financial Services Index Fund 06/12/00 12.15% - -------------------------------------------------------------------------------- Total return represents the Fund's increase in value during the time period 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. Because indexes are statistical composites that do not actually hold a portfolio of securities, they do not incur expenses. The Fund, like other investment companies, pays management fees. These expenses negatively impact the performance of the Fund, and account for some of the difference between the performance of the Fund and the performance of the Index. EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC TOP 10 INDEX HOLDINGS --------------------- Citigroup Inc. 13.9% Morgan Stanley Dean Witter & Co. 5.3% Wells Fargo & Company 4.7% Bank of America Corp. 4.6% Fannie Mae 4.6% American Express Co. 4.2% Chase Manhatten Corp. 3.5% Merrill Lynch & Co. Inc. 3.0% Bank of New York Co. Inc. 2.5% Banc One Corp. 2.5% The iShares Dow Jones U.S. Financial Services Index Fund seeks to track the Dow Jones U.S. Financial Services Index. For the period since its inception on June 12 through October 31, 2000, the Fund returned 12.15%. During the same period, the Index returned 12.42%. At the time the Fund was launched, the U.S. economy appeared to be reaching the Federal Reserve's desired "soft landing." However, with fears of an overheated economy receding, investors found new worries. The prospect of high interest rates and a slowing economy threatened future corporate earnings growth. Exacerbating these fears, soaring oil prices and a sinking euro created concern about global economic conditions and their impact on the U.S. economy. The changing economic environment led some investors to seek shelter in more defensive investments. Although the shift in sentiment meant declines for most "new economy" stocks, it resulted in gains for most "old economy" stocks, including financial services companies. The Fund's largest holdings as of October 31 reflected the strong returns for the financial services group. Financial services company Citigroup, the Fund's largest holding, returned 10%. Merrill Lynch, the eighth largest position, soared 29%. Not surprisingly, number five holding Fannie Mae also benefited from the flight to quality, gaining 28%. The weakest performing group was the banks, which were disadvantaged somewhat by higher borrowing rates. Number four holding Bank of America lost 15%, while Chase Manhattan, the Fund's sixth largest holding, declined 6%. - -------------------------------------------------------------------------------- iShares Managers' Discussion & Analysis page 15 Managers' Discussion & Analysis iShares Dow Jones U.S. Internet Index Fund Performance as of 10/31/00 - -------------------------------------------------------------------------------- Total Return - -------------------------------------------------------------------------------- Inception to Fund Inception Date October 31, 2000 ---- -------------- ---------------- iShares Dow Jones U.S. Internet Index Fund 05/15/00 (16.01)% - -------------------------------------------------------------------------------- Total return represents the Fund's increase in value during the time period 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. Because indexes are statistical composites that do not actually hold a portfolio of securities, they do not incur expenses. The Fund, like other investment companies, pays management fees. These expenses negatively impact the performance of the Fund, and account for some of the difference between the performance of the Fund and the performance of the Index. EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Top 10 Index Holdings --------------------- America Online Inc. 12.1% BEA Systems Inc. 9.8% Ariba Inc. 9.2% VeriSign Inc. 8.6% Yahoo! Inc. 7.1% Check Point Software Technologies Ltd. 6.8% i2 Technologies Inc. 6.2% Exodus Communications Inc. 5.1% Commerce One Inc. 4.3% Amazon.com Inc. 3.2% The iShares Dow Jones U.S. Internet Index Fund seeks to track the Dow Jones U.S. Internet Index. For the period since its inception May 15 through October 31, 2000, the Fund returned (16.01)%. During the same period, the Index returned (15.63)%. During the period from May to October, the U.S. equity markets saw a return to value and "old economy stocks." Although growth and technology stocks returned to favor during the summer, when economic data indicated that the economy might have achieved a "soft landing," these rallies were short-lived. By September, investor concerns turned to the price of crude oil, its highest in 10 years, decreased corporate earnings estimates, and the continuing prospect of inflation and higher interest rates. The stock market reflected a fear that the corporate earnings of highly valued stocks could not grow as expected in this environment. America Online (AOL), the Fund's largest holding as of October 31, has announced the planned acquisition of Time Warner for $165 billion. This merger would combine a traditional media giant with the largest Internet access provider and potentially allow AOL to provide Internet access over television cable. Despite the acquisition activity, AOL was down 14% during the reporting period. Yahoo!, representing 7.1% of the Fund's assets as of October 31, saw its share price drop 55% in the period despite the announcement of record profits. Amazon.com Inc., the tenth largest holding in the Fund, also fell 35%. The Fund's performance was enhanced by its business to business e-commerce positions. Bea Systems Inc, the second largest position in the Fund as of October 31, was up 63%. Ariba, the third largest position returned 89%. Check Point Software Technologies LTD, i2 Technologies Inc, and Commerce One Inc. returned 83%, 49%, and 38%, respectively. - -------------------------------------------------------------------------------- page 16 iShares Managers' Discussion & Analysis iShares Dow Jones U.S. Real Estate Index Fund Performance as of 10/31/00 - -------------------------------------------------------------------------------- Total Return - -------------------------------------------------------------------------------- Inception to Fund Inception Date October 31, 2000 ---- -------------- ---------------- iShares Dow Jones U.S. Real Estate Index Fund 06/12/00 5.16% - -------------------------------------------------------------------------------- Total return represents the Fund's increase in value during the time period 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. Because indexes are statistical composites that do not actually hold a portfolio of securities, they do not incur expenses. The Fund, like other investment companies, pays management fees. These expenses negatively impact the performance of the Fund, and account for some of the difference between the performance of the Fund and the performance of the Index. EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Top 10 Index Holdings --------------------- Equity Office Properties Trust 8.8% Equity Residential Properties Trust 6.0% Spieker Properties Inc. 3.7% Prologis Trust 3.6% AvalonBay Communities Inc. 3.2% Vornado Realty Trust 3.1% Simon Property Group Inc. 3.0% Apartment Investment & Management Co. "A" 3.0% Archstone Communities Trust 3.0% Duke-Weeks Realty Corp. 2.9% The iShares Dow Jones U.S. Real Estate Index Fund, launched on June 12, 2000, seeks to track the Dow Jones U.S. Real Estate Index. During the period from June 12 through October 31, 2000, the Fund returned 5.16%. The Index returned 4.71% during the same period. The Real Estate sector turned in a strong performance this period, driven by a strong economy, high occupancy rates and solid rental growth. The industry's steady stream of income from leases attracted investors seeking an alternative to the volatility of the overall markets. In September, crude oil prices hit their highest level since November 1990 at $37.20 a barrel, driving stock prices down in Real Estate and the broader market. Continued $30-plus oil prices and a slowing economy in October further dampened earlier industry gains. Office and apartment Real Estate Investment Trusts were among the top performers, benefiting from strong demand in major markets. Equity Office Properties Trust, the Fund's largest holding at 8.8% as of October 31, gained 9%. Spieker Properties, the Fund's third largest holding as of October 31, continued to expand in the West Coast with acquisitions in the lucrative Portland, Oregon and San Francisco markets in October. The stock returned 10% for the period. AvalonBay Communities, the Fund's fifth largest position as of October 31, increased 11%, also making several West Coast acquisitions. Concerns over oil prices dampened residential and retail REIT gains. Equity Residential Properties, the Fund's second largest holding, gained only 1%, and Simon Property Group, the seventh largest holding, lost 8%. - -------------------------------------------------------------------------------- iShares Managers' Discussion & Analysis page 17 iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments October 31, 2000 (Unaudited) Security Shares Value - --------------------------------------------------------------- COMMON STOCKS - 99.95% - --------------------------------------------------------------- General Electric Co. 21,404 $ 1,173,207 Cisco Systems Inc.+ 15,193 818,523 Exxon Mobil Corp. 7,525 671,136 Microsoft Corp.+ 9,058 623,870 Intel Corp. 13,708 616,860 Pfizer Inc. 13,617 588,084 Citigroup Inc. 9,729 511,989 Merck & Co. Inc. 4,980 447,889 SBC Communications Inc. 7,357 424,407 American International Group Inc. 4,314 422,772 EMC Corp.+ 4,707 419,217 Sun Microsystems Inc.+ 3,430 380,301 International Business Machines Corp. 3,805 374,792 Verizon Communications 5,877 339,764 Oracle Corp.+ 9,394 310,002 Coca-Cola Co. 4,589 277,061 Wal-Mart Stores Inc. 5,958 270,344 Johnson & Johnson 2,844 262,003 Bristol-Myers Squibb Co. 4,248 258,862 America Online Inc.+ 4,984 251,343 Home Depot Inc. 4,995 214,785 Tyco International Ltd. 3,778 214,165 Morgan Stanley Dean Witter & Co. 2,450 196,766 BellSouth Corp. 4,032 194,796 Procter & Gamble Co. 2,674 191,024 AT&T Corp. 8,107 187,981 Lilly (Eli) and Company 2,069 184,917 Texas Instruments Inc. 3,715 182,267 Time Warner Inc. 2,378 180,514 American Home Products Corp. 2,818 178,943 Philip Morris Companies Inc. 4,859 177,961 Wells Fargo & Company 3,691 170,939 Bank of America Corp. 3,538 170,045 Fannie Mae 2,194 168,938 Lucent Technologies Inc. 7,198 167,803 Hewlett-Packard Co. 3,596 166,989 Abbott Laboratories 3,123 164,933 Schering-Plough Corp. 3,160 163,333 Walt Disney Co. (The) 4,501 161,192 Viacom Inc. "B"+ 2,755 156,691 American Express Co. 2,556 153,360 Pharmacia & Upjohn Inc. 2,745 150,975 PepsiCo Inc. 3,115 150,883 WorldCom Inc.+ 6,182 146,823 Corning Inc. 1,914 146,421 Dell Computer Corp.+ 4,921 145,169 Qwest Communications International Inc.+ 2,977 $ 144,757 Medtronic Inc. 2,593 140,832 Boeing Co. 1,933 131,082 JDS Uniphase Corp.+ 1,610 131,014 Enron Corp. 1,594 130,808 Chase Manhattan Corp. 2,817 128,173 Amgen Inc.+ 2,212 128,158 Veritas Software Corp.+ 870 122,684 Motorola Inc. 4,707 117,381 Chevron Corp. 1,412 115,961 Compaq Computer Corp. 3,655 111,149 Merrill Lynch & Co. Inc. 1,557 108,990 Ford Motor Company 4,075 106,459 QUALCOMM Inc.+ 1,610 104,826 Du Pont (E.I.) de Nemours 2,240 101,640 Juniper Networks Inc.+ 509 99,255 Walgreen Co. 2,170 99,006 Schlumberger Ltd. 1,233 93,862 Applied Materials Inc.+ 1,744 92,650 Honeywell International Inc. 1,719 92,504 AT&T - Liberty Media Group "A"+ 5,119 92,142 Bank of New York Co. Inc. 1,592 91,639 Bank One Corp. 2,503 91,359 Anheuser-Busch Companies Inc. 1,978 90,493 Freddie Mac 1,503 90,180 Automatic Data Processing Inc. 1,358 88,694 McDonald's Corp. 2,853 88,443 Minnesota Mining & Manufacturing Co. 864 83,484 Schwab (Charles) Corp. 2,305 80,963 Siebel Systems Inc.+ 766 80,382 Marsh & McLennan Companies Inc. 591 77,273 Network Appliance Inc.+ 649 77,231 Kimberly-Clark Corp. 1,168 77,088 Comcast Corp. "A"+ 1,880 76,610 FleetBoston Financial Corp. 1,943 73,834 Gillette Co. 2,060 71,843 United Technologies Corp. 1,018 71,069 Texaco Inc. 1,196 70,639 Clear Channel Communications Inc.+ 1,168 70,153 Duke Energy Corp. 808 69,842 Emerson Electric Co. 934 68,591 General Motors Corp. "A" 1,099 68,275 Colgate-Palmolive Co. 1,152 67,692 Palm Inc.+ 1,224 65,561 First Union Corp. 2,116 64,141 Ciena Corp.+ 610 64,126 Allstate Corp. 1,584 63,756 Broadcom Corp.+ 279 62,043 - -------------------------------------------------------------------------------- page 18 iShares iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments (continued) October 31, 2000 (Unaudited) Security Shares Value - --------------------------------------------------------------- COMMON STOCKS (continued) - --------------------------------------------------------------- MBNA Corp. 1,611 $ 60,513 Sprint Corp. (PCS Group)+ 1,567 59,742 Safeway Inc.+ 1,079 59,008 BEA Systems Inc.+ 819 58,763 Associates First Capital Corp. 1,574 58,435 PMC - Sierra Inc.+ 340 57,630 Solectron Corp.+ 1,303 57,332 Morgan (J.P.) & Co. Inc. 341 56,436 Cardinal Health Inc. 586 55,523 Ariba Inc.+ 430 54,341 Target Corporation 1,960 54,145 Alcoa Inc. 1,863 53,445 Nextel Communications Inc. "A"+ 1,386 53,274 Brocade Communications System Inc.+ 233 52,978 PE Corp. (Biosystems Group) 448 52,416 Household International Inc. 1,027 51,671 Washington Mutual Inc. 1,169 51,436 Mellon Financial Corp. 1,062 51,242 Baxter International Inc. 621 51,038 AXA Financial Inc. 943 50,981 Xilinx Inc.+ 700 50,706 VeriSign Inc.+ 379 50,028 Analog Devices Inc.+ 756 49,140 Fifth Third Bancorp 952 48,909 Applied Micro Circuits Corp.+ 624 47,658 AES Corp.+ 818 46,217 MetLife Inc.+ 1,672 46,189 CVS Corp. 854 45,209 First Data Corp. 899 45,062 Dow Chemical Co. 1,466 44,896 HCA - The Healthcare Company 1,087 43,412 American General Corp. 539 43,389 Linear Technology Corp. 664 42,869 State Street Corp. 342 42,661 Yahoo! Inc.+ 727 42,620 Electronic Data Systems Corp. 890 41,774 Agilent Technologies Inc.+ 900 41,681 Exelon Corp. 690 41,486 PNC Bank Corp. 619 41,396 AFLAC Inc. 566 41,353 Southern Co. 1,403 41,213 Paychex Inc. 727 41,212 Alltel Corp. 637 41,047 CIGNA Corp. 334 40,731 Firstar Corp. 2,061 40,576 Tellabs Inc.+ 811 40,499 Sara Lee Corp. 1,872 $ 40,365 Williams Companies Inc. 963 40,265 Kroger Co.+ 1,781 40,184 Check Point Software Technologies Ltd.+ 252 39,910 SDL Inc.+ 153 39,665 Adobe Systems Inc. 518 39,400 Sprint Corp. (FON Group) 1,530 39,015 US Bancorp Inc. 1,610 38,942 International Paper Co. 1,052 38,530 Sysco Corp. 730 38,097 Maxim Integrated Products Inc.+ 574 38,063 Voicestream Wireless Corp.+ 289 38,004 Comverse Technology Inc.+ 340 37,995 Northern Trust Corp. 442 37,736 UnitedHealth Group Inc. 342 37,406 i2 Technologies Inc.+ 215 36,550 Sanmina Corp.+ 315 36,008 Halliburton Co. 971 35,988 Costco Wholesale Corp.+ 972 35,600 Illinois Tool Works Inc. 640 35,560 Lowe's Companies Inc. 774 35,362 Omnicom Group Inc. 378 34,871 Guidant Corp.+ 655 34,674 Hartford Financial Services Group Inc. 458 34,092 Seagate Technology Inc.+ 484 33,820 Lehman Brothers Holdings Inc. 520 33,540 Altera Corp.+ 817 33,446 Anadarko Petroleum Corp. 514 32,922 Computer Associates International Inc. 1,024 32,640 Gannett Co. Inc. 559 32,422 Heinz (H.J.) Co. 763 31,998 Providian Financial Corp. 305 31,720 Kohls Corp.+ 584 31,646 Redback Networks Inc.+ 296 31,506 Gap Inc. 1,214 31,336 Chubb Corp. 370 31,242 Micron Technology Inc.+ 899 31,240 Level 3 Communications Inc.+ 655 31,235 Harley-Davidson Inc. 647 31,177 Goldman Sachs Group Inc. (The) 307 30,642 Exodus Communications Inc.+ 909 30,508 Dominion Resources Inc. 505 30,079 ADC Telecommunications Inc.+ 1,405 30,032 Eastman Kodak Co. 656 29,438 American Electric Power Inc. 709 29,423 El Paso Energy Corp. 467 29,275 Coastal Corp. 385 29,043 Lockheed Martin Corp. 802 28,752 - -------------------------------------------------------------------------------- iShares Schedules of Investments page 19 iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments (continued) October 31, 2000 (Unaudited) Security Shares Value - --------------------------------------------------------------- COMMON STOCKS (continued) - --------------------------------------------------------------- Interpublic Group of Companies Inc. 665 $ 28,553 Gemstar-TV Guide International Inc.+ 414 28,385 Phillips Petroleum Co. 459 28,343 FedEx Corp.+ 604 28,303 BB&T Corp. 873 27,827 Southwest Airlines Co. 972 27,702 MedImmune Inc.+ 421 27,523 Tenet Healthcare Corp. 693 27,244 Vitesse Semiconductor Corp.+ 385 26,926 Waste Management Inc. 1,342 26,840 Caterpillar Inc. 764 26,788 SunTrust Banks Inc. 548 26,749 McGraw-Hill Companies Inc. 414 26,574 General Mills Inc. 630 26,302 Capital One Financial Corp. 415 26,197 Conoco Inc. 953 25,910 Baker Hughes Inc. 727 24,991 Millennium Pharmaceuticals Inc.+ 344 24,962 Commerce One Inc.+ 388 24,905 Forest Laboratories Inc. "A"+ 187 24,777 ConAgra Inc. 1,153 24,645 Avon Products Inc. 504 24,444 National City Corp. 1,141 24,389 Intuit Inc.+ 394 24,206 Carnival Corp. "A" 973 24,143 Transocean Sedco Forex Inc. 449 23,797 Rational Software Corp.+ 397 23,696 St. Paul Companies Inc. 460 23,575 RadioShack Corp. 395 23,552 Union Pacific Corp. 502 23,531 Burlington Northern Santa Fe Corp. 882 23,428 Scientific-Atlanta Inc. 341 23,337 Wachovia Corp. 432 23,328 Calpine Corp.+ 295 23,287 Allergan Inc. 277 23,285 KeyCorp 937 23,132 Sears, Roebuck and Co. 773 22,981 Quaker Oats Co. 280 22,838 PG&E Corp. 844 22,735 Gateway Inc.+ 440 22,708 FPL Group Inc. 342 22,572 LSI Logic Corp.+ 683 22,454 General Dynamics Corp. 313 22,399 PeopleSoft Inc.+ 511 22,300 Best Buy Co. Inc.+ 441 22,133 Reliant Energy Inc. 532 21,978 Hancock (John) Financial Services Inc.+ 693 $ 21,916 XO Communications Inc. "A"+ 647 21,826 Computer Sciences Corp.+ 341 21,483 Weyerhaeuser Co. 457 21,450 Stilwell Financial Inc. 477 21,376 ONI Systems Inc.+ 262 21,238 TXU Corporation 565 20,940 Albertson's Inc. 862 20,419 Comerica Inc. 332 20,024 Limited Inc. 791 19,973 ALZA Corp.+ 244 19,749 AON Corp. 476 19,724 AT&T Wireless Group+ 790 19,701 Immunex Corp.+ 460 19,579 Biogen Inc.+ 323 19,441 Handspring Inc.+ 268 19,380 Amazon.com Inc.+ 529 19,375 IDEC Pharmaceuticals Corp.+ 98 19,220 Delphi Automotive Systems Corp. 1,214 19,045 Public Service Enterprise Group Inc. 457 18,966 Xcel Energy Inc. 739 18,891 Mercury Interactive Corp.+ 170 18,870 Cendant Corp.+ 1,566 18,792 Nabisco Group Holdings Corp. "A" 649 18,740 Equity Office Properties Trust 622 18,738 Becton Dickinson & Co. 559 18,726 United Parcel Service Inc. 307 18,650 Lincoln National Corp. 385 18,624 USX-Marathon Group Inc. 684 18,596 Concord EFS Inc.+ 450 18,591 Entergy Corp. 485 18,582 USA Education Inc. 332 18,551 Cox Communications Inc. "A"+ 421 18,550 Masco Corp. 991 18,519 May Department Stores Co. 700 18,375 Waters Corp.+ 253 18,358 Deere & Co. 496 18,259 QLogic Corp.+ 188 18,189 Air Products & Chemicals Inc. 487 18,171 Raytheon Co. "B" 531 18,154 Marriott International Inc. 441 17,861 TJX Companies Inc. 649 17,685 Starbucks Corp.+ 395 17,652 Unocal Corp. 514 17,540 Jabil Circuit Inc.+ 306 17,461 Human Genome Sciences Inc.+ 196 17,325 Dover Corp. 406 17,230 Aetna Inc. 298 17,228 - -------------------------------------------------------------------------------- page 20 iShares iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments (continued) October 31, 2000 (Unaudited) Security Shares Value - ------------------------------------------------------------- COMMON STOCKS (continued) - ------------------------------------------------------------- Edison International 718 $ 17,142 Extreme Networks Inc.+ 206 17,085 eBay Inc.+ 322 16,583 Franklin Resources Inc. 386 16,536 Burlington Resources Inc. 459 16,524 PPG Industries Inc. 369 16,467 Sycamore Networks Inc.+ 260 16,445 Clorox Co. 367 16,377 Ralston Purina Co. 675 16,369 Pitney Bowes Inc. 541 16,061 Occidental Petroleum Corp. 808 16,059 Bed Bath & Beyond Inc.+ 622 16,055 Paine Webber Group Inc. 224 15,960 Nabors Industries Inc.+ 313 15,932 Consolidated Edison Inc. 450 15,834 Rockwell International Corp. 395 15,528 IMS Health Inc. 656 15,498 Textron Inc. 305 15,383 McKesson HBOC Inc. 548 15,378 MBIA Inc. 208 15,119 Jefferson-Pilot Corp. 217 14,919 Phone.com Inc.+ 161 14,903 King Pharmaceuticals Inc.+ 332 14,878 Wellpoint Health Networks Inc.+ 127 14,851 Advanced Micro Devices Inc.+ 656 14,842 Loews Corp. 162 14,732 Vignette Corp.+ 494 14,727 Inktomi Corp.+ 232 14,717 Nike Inc. "B" 361 14,417 Apache Corp. 260 14,381 Federated Department Stores Inc.+ 441 14,360 SunGard Data Systems Inc.+ 279 14,264 Fort James Corp. 433 14,262 Progressive Corporation 145 14,246 Staples Inc.+ 997 14,207 NTL Inc.+ 323 14,192 Summit Bancorp 376 14,100 Golden West Financial Corp. 251 14,072 Cadence Design Systems Inc.+ 547 14,051 Stryker Corp. 297 13,996 Archer-Daniels-Midland Co. 1,267 13,937 Campbell Soup Co. 475 13,894 UNUMProvident Corp. 487 13,758 CP&L Energy Inc. 341 13,747 Fiserv Inc.+ 262 13,739 Bear Stearns Companies Inc. 226 13,701 American Tower Corp.+ 334 13,673 McLeodUSA Inc. "A"+ 709 13,648 Danaher Corp. 216 13,635 3Com Corp.+ 765 13,579 MGIC Investment Corp. 199 13,557 Apple Computer Inc.+ 692 13,537 Metromedia Fiber Network Inc.+ 712 13,528 Watson Pharmaceutical Inc.+ 216 13,514 Atmel Corp.+ 898 13,414 KLA-Tencor Corp.+ 395 13,356 Convergys Corp.+ 304 13,243 Constellation Energy Group Inc. 316 13,173 SCI Systems Inc.+ 306 13,158 Tiffany & Co. 307 13,105 Devon Energy Corp. 259 13,054 Electronic Arts Inc.+ 260 13,000 Kerr-McGee Corp. 199 12,997 Broadwing Inc.+ 459 12,967 IVAX Corporation+ 298 12,963 BroadVision Inc.+ 433 12,882 Dynegy Inc. 278 12,875 Kellogg Co. 503 12,764 Conexant Systems Inc.+ 485 12,762 Biomet Inc. 351 12,702 PP&L Resources Inc. 306 12,603 FirstEnergy Corp. 486 12,575 Wrigley (William Jr.) Co. 158 12,512 Praxair Inc. 334 12,442 Micromuse Inc.+ 73 12,387 Telephone & Data Systems Inc. 117 12,344 Union Carbide Corp. 287 12,341 Delta Air Lines Inc. 261 12,332 CSX Corp. 486 12,302 Equity Residential Properties Trust 261 12,283 Symbol Technologies Inc. 270 12,268 Starwood Hotels & Resorts Worldwide Inc. 413 12,235 Columbia Energy Group 170 12,229 Ingersoll-Rand Co. 322 12,155 Xerox Corp. 1,440 12,150 Genzyme General+ 171 12,141 Price (T. Rowe) Associates 259 12,124 CDW Computer Centers Inc.+ 188 12,114 Ambac Financial Group Inc. 151 12,052 Cintas Corp. 259 12,011 Abgenix Inc.+ 152 11,989 Univision Communications Inc.+ 313 11,972 Mattel Inc. 925 11,967 AmSouth Bancorp 856 11,930 - ------------------------------------------------------------- iShares Schedules of Investments page 21 iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments (continued) October 31, 2000 (Unaudited) Security Shares Value - --------------------------------------------------------------- COMMON STOCKS (continued) - --------------------------------------------------------------- StorageNetworks Inc.+ 188 $ 11,926 New York Times Co. "A" 324 11,907 Noble Drilling Corp.+ 286 11,887 Avery Dennison Corp. 235 11,867 PerkinElmer Inc. 99 11,831 Norfolk Southern Corp. 837 11,823 Software.com Inc.+ 79 11,771 Hershey Foods Corp. 216 11,731 Ameren Corp. 295 11,726 Integrated Device Technology Inc.+ 208 11,713 SouthTrust Corp. 359 11,623 Cablevision Systems Corp.+ 154 11,473 Crown Castle International Corp.+ 378 11,458 Regions Financial Corp. 486 11,451 CenturyTel Inc. 297 11,434 Novellus Systems Inc.+ 279 11,422 Newell Rubbermaid Inc. 592 11,359 Lexmark International Group Inc. "A"+ 277 11,357 Cincinnati Financial Corp. 307 11,282 BMC Software Inc.+ 548 11,131 Amdocs Ltd.+ 171 11,083 Protein Design Labs Inc.+ 82 11,076 Florida Progress Corp. 208 11,063 Healthsouth Corp.+ 919 11,028 DTE Energy Co. 304 10,982 Teradyne Inc.+ 349 10,906 Vertex Pharmaceuticals Inc.+ 116 10,801 Johnson Controls Inc. 181 10,792 Zions Bancorp 187 10,741 DST Systems Inc.+ 174 10,723 Health Management Associates Inc. "A"+ 539 10,679 Thermo Electron Corp.+ 368 10,672 Equifax Inc. 305 10,522 Ecolab Inc. 268 10,502 Sepracor Inc.+ 154 10,491 Eaton Corp. 154 10,482 Parker Hannifin Corp. 253 10,468 Robert Half International Inc.+ 342 10,431 Cinergy Corp. 340 10,412 AMR Corp.+ 316 10,349 Charter One Financial Inc. 448 10,276 Rohm & Haas Co. "A" 340 10,221 Conoco Inc. "B" 395 10,196 Power-One Inc.+ 142 10,073 Fortune Brands Inc. 342 10,068 KeySpan Corp. 286 10,064 Transwitch Corp.+ 172 9,933 St. Jude Medical Inc.+ 180 9,900 TMP Worldwide Inc.+ 142 9,885 Synovus Financial Corp. 457 9,854 National Semiconductor Corp.+ 378 9,828 Finisar Corp.+ 341 9,825 Global Marine Inc.+ 370 9,805 InfoSpace.com Inc.+ 487 9,801 Dollar General Corp. 629 9,749 National Commerce Bancorp 457 9,711 Union Planters Corp. 287 9,704 Georgia-Pacific Corp. 361 9,702 Cypress Semiconductor Corp.+ 259 9,696 Medarex Inc.+ 158 9,658 Charter Communications Inc.+ 494 9,633 Foundry Networks Inc.+ 145 9,633 Allegheny Energy Inc. 234 9,579 Sabre Holdings Corp. 286 9,563 EOG Resources Inc. 242 9,529 Cabletron Systems Inc.+ 351 9,521 UST Inc. 376 9,494 R&B Falcon Corporation+ 379 9,475 Sempra Energy 458 9,475 Quest Diagnostics Inc.+ 98 9,433 Emulex Corp.+ 64 9,400 Tricon Global Restaurants Inc.+ 313 9,390 Marshall & Ilsley Corp. 207 9,380 Tribune Co. 252 9,340 BJ Services Co.+ 178 9,334 Torchmark Corp. 280 9,328 Chiron Corp.+ 215 9,312 Polycom Inc.+ 143 9,295 ENSCO International Inc. 279 9,277 Echostar Communications Corp.+ 205 9,276 Rambus Inc.+ 206 9,257 NCR Corp.+ 214 9,229 Interwoven Inc.+ 91 9,168 Willamette Industries Inc. 251 9,114 Coca-Cola Enterprises Inc. 494 9,077 Northrop Grumman Corp. 108 9,072 USA Networks Inc.+ 448 9,072 Countrywide Credit Industries Inc. 242 9,060 Edwards (A.G.) Inc. 178 9,033 TRW Inc. 214 8,988 Toys R Us Inc.+ 520 8,938 Amerada Hess Corp. 143 8,866 Unisys Corp.+ 691 8,810 Tosco Corp. 307 8,788 - --------------------------------------------------------------- page 22 iShares iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments (continued) October 31, 2000 (Unaudited) Security Shares Value - ----------------------------------------------------------- COMMON STOCKS (continued) - ----------------------------------------------------------- Citrix Systems Inc.+ 395 $ 8,739 Acxiom Corp.+ 215 8,654 GPU Inc. 261 8,629 R.J. Reynolds Tobacco Holdings Inc. 241 8,616 Sealed Air Corp.+ 179 8,614 Knight Ridder Inc. 171 8,593 Portal Software Inc.+ 243 8,551 M&T Bank Corp. 170 8,534 Gilead Sciences Inc.+ 99 8,514 PE Corp. (Celera Genomics Group)+ 126 8,505 Citizen Communications Co.+ 585 8,482 Macromedia Inc.+ 109 8,400 Moody's Corp. 316 8,315 Genuine Parts Co. 385 8,205 North Fork Bancorp 406 8,196 Dana Corp. 369 8,187 Goodrich (B.F.) Co. 200 8,187 Celgene Corp.+ 127 8,176 Pepsi Bottling Group Inc. 235 8,137 Micrel Inc.+ 179 8,100 Molex Inc. "A" 206 8,098 Mylan Laboratories Inc. 288 8,064 Avaya Inc.+ 599 8,049 TECO Energy Inc. 288 8,028 Old Kent Financial Corp. 290 8,024 Microchip Technology Inc.+ 253 8,001 Newport Corp. 70 7,994 Agile Software Corp.+ 106 7,990 Harrah's Entertainment Inc.+ 278 7,958 Readers Digest Association Inc. (The) "A" 216 7,925 Weatherford International Inc.+ 217 7,921 Spieker Properties Inc. 143 7,919 Phelps Dodge Corp. 169 7,901 NVIDIA Corp.+ 127 7,892 Cooper Industries Inc. 206 7,879 TIBCO Software Inc.+ 125 7,875 Whirlpool Corp. 181 7,874 Internet Security Systems Inc.+ 89 7,854 Family Dollar Stores Inc. 404 7,853 Vishay Intertechnology Inc.+ 261 7,830 Pinnacle West Capital Corp. 180 7,819 Knight Trading Group Inc.+ 261 7,814 Raytheon Co. "A" 244 7,808 Sherwin-Williams Co. 360 7,808 Smurfit-Stone Container Corp.+ 577 7,790 SPX Corp.+ 63 7,788 Leggett & Platt Inc. 475 7,778 Andrx Group+ 108 7,776 DPL Inc. 273 7,746 CIT Group Inc. (The) 444 7,742 CMGI Inc.+ 457 7,712 H & R Block, Inc. 216 7,709 TCF Financial Corp. 190 7,683 Ceridian Corp.+ 307 7,675 Parametric Technology Corp.+ 620 7,634 Eastman Chemical Co. 178 7,632 Tektronix Inc. 107 7,624 Smith International Inc.+ 108 7,614 Huntington Bancshares Inc. 529 7,604 Western Wireless Corp. "A"+ 160 7,600 Old Republic International Corp. 287 7,462 Black & Decker Corp. 198 7,450 Hilton Hotels Corp. 783 7,438 Art Technology Group Inc.+ 118 7,404 PMI Group Inc. (The) 100 7,388 Allmerica Financial Corp. 117 7,378 WebMD Corp.+ 648 7,371 United States Cellular Corp.+ 115 7,360 SEI Investment Co. 81 7,351 Prologis Trust 350 7,350 Boston Scientific Corp.+ 460 7,331 Keebler Foods Co. 181 7,330 Everest Re Group Ltd. 125 7,328 LG&E Energy Corp. 296 7,270 Powerwave Technologies Inc.+ 151 7,267 Scripps (E.W.) Company 124 7,246 Cree Inc.+ 73 7,245 Archstone Communities Trust 306 7,210 SanDisk Corp.+ 134 7,200 Laboratory Corp. of America Holdings+ 53 7,148 Akamai Technologies Inc.+ 140 7,140 AutoZone Inc.+ 266 7,132 NiSource Inc. 286 7,132 Peregrine Systems Inc.+ 296 7,104 Donaldson, Lufkin & Jenrette Inc. 79 7,095 Minimed Inc.+ 97 7,075 Estee Lauder Companies Inc. "A" 152 7,058 Dime Bancorp Inc. 288 7,038 First Tennessee National Corp. 306 7,038 Affiliated Computer Services Inc.+ 126 7,017 Brinker International Inc.+ 178 6,986 AvalonBay Communities Inc. 152 6,983 SAFECO Corp. 288 6,966 Apartment Investment & Management Co. "A" 152 6,945 - ----------------------------------------------------------- iShares Schedules of Investments page 23 iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments (continued) October 31, 2000 (Unaudited) Security Shares Value - --------------------------------------------------------------- COMMON STOCKS (continued) - --------------------------------------------------------------- Westvaco Corp. 243 $ 6,926 New Focus Inc.+ 109 6,922 Enzon Inc.+ 97 6,911 Nucor Corp. 199 6,903 Critical Path Inc.+ 142 6,896 Imclone Systems Inc.+ 126 6,891 Bowater Inc. 127 6,874 Kinder Morgan Inc. 178 6,864 Vornado Realty Trust 197 6,858 Sybron International Corp.+ 277 6,856 Arrow Electronics Inc.+ 214 6,848 CMS Energy Corp. 253 6,831 Allegiance Telecom Inc.+ 217 6,822 RF Micro Devices Inc.+ 342 6,819 E*trade Group Inc.+ 468 6,815 Novell Inc.+ 756 6,804 Sunoco Inc. 226 6,766 Office Depot Inc.+ 809 6,725 Lattice Semiconductor Corp.+ 230 6,713 CacheFlow Inc.+ 62 6,696 ITT Industries Inc. 205 6,675 COR Therapeutics Inc.+ 118 6,667 Winn-Dixie Stores Inc. 346 6,661 Apollo Group Inc.+ 170 6,651 Kmart Corp.+ 1,116 6,626 Servicemaster Co. 721 6,579 Montana Power Co. 232 6,554 TriQuint Semiconductor Inc.+ 171 6,551 Harcourt General Inc. 116 6,502 Cytyc Corp.+ 109 6,472 Vulcan Materials Co. 154 6,468 Temple-Inland Inc. 144 6,444 Pall Corp. 298 6,426 Northeast Utilities 315 6,418 Internet Capital Group LLC+ 484 6,413 Mercantile Bankshares Corp. 170 6,396 Goodyear Tire & Rubber Co. 343 6,345 Sapient Corp.+ 178 6,330 Wind River Systems Inc.+ 154 6,324 Darden Restaurants Inc. 281 6,322 CheckFree Corp.+ 127 6,318 GlobeSpan Inc.+ 82 6,309 Trigon Healthcare Inc.+ 88 6,309 Radian Group Inc. 89 6,308 Manpower Inc. 181 6,301 Compuware Corp.+ 800 6,300 Gallagher (Arthur J.) & Co. 99 6,249 Dow Jones & Co. Inc. 106 6,241 Niagara Mohawk Holdings Inc.+ 390 6,240 Park Place Entertainment Corp.+ 487 6,209 Potomac Electric Power Co. 271 6,199 Manugistics Group Inc.+ 54 6,153 RSA Security Inc.+ 106 6,148 Murphy Oil Corp. 106 6,141 Legg Mason Inc. 117 6,077 Informatica Corp.+ 64 6,048 Network Associates Inc.+ 314 6,045 Medicis Pharmaceutical Corp. "A"+ 82 6,037 Simon Property Group Inc. 270 6,024 Dallas Semiconductor Corp. 152 6,023 UnitedGlobalCom Inc. "A"+ 189 6,013 Sawtek Inc.+ 118 6,003 Donnelley (R.R.) & Sons Co. 279 5,998 CNET Networks Inc.+ 190 5,985 Utilicorp United Inc. 225 5,977 Cooper Cameron Corp.+ 109 5,940 Synopsys Inc.+ 170 5,929 Ultramar Diamond Shamrock Corp. 225 5,906 Mead Corp. 204 5,903 BJ's Wholesale Club Inc.+ 178 5,863 ICN Pharmaceuticals Inc. 154 5,862 Duke-Weeks Realty Corp. 247 5,851 Ashland Inc. 178 5,829 Circuit City Stores Inc. 439 5,817 Energy East Corp. 288 5,814 Engelhard Corp. 277 5,782 SCANA Corp. 218 5,777 Expeditors International Washington Inc. 111 5,758 Macrovision Corp.+ 79 5,757 Visteon Corp. 325 5,748 At Home Corp. "A"+ 557 5,744 Ocean Energy Inc.+ 414 5,744 KEMET Corp.+ 206 5,742 Amphenol Corp. "A"+ 89 5,718 American Water Works Inc. 234 5,704 Avnet Inc. 212 5,697 Continental Airlines Inc. "B"+ 108 5,670 Tekelec+ 154 5,669 Crescent Real Estate Equities Co. 280 5,635 Millipore Corp. 107 5,618 Plexus Corp.+ 89 5,613 Bard (C.R.) Inc. 134 5,611 Wisconsin Energy Corp. 298 5,606 ICOS Corp.+ 109 5,600 - ----------------------------------------------------------- page 24 iShares iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments (continued) October 31, 2000 (Unaudited) Security Shares Value - --------------------------------------------------------------- COMMON STOCKS (continued) - --------------------------------------------------------------- Dollar Tree Stores Inc.+ 143 $ 5,595 E.piphany Inc.+ 62 5,588 Advanced Fibre Communications Inc.+ 171 5,568 Invitrogen Corp.+ 73 5,553 Lincare Holdings Inc.+ 132 5,552 Homestore.com Inc.+ 163 5,542 MCN Energy Group Inc. 225 5,541 Federated Investors Inc. "B" 190 5,534 International Rectifier Corp.+ 124 5,533 Nuance Communications Inc.+ 64 5,520 Quantum DLT & Storage Group+ 368 5,520 Express Scripts Inc. "A"+ 82 5,509 Sigma-Aldrich Corp. 154 5,506 Newmont Mining Corp. 405 5,493 Bisys Group Inc.+ 116 5,466 Fluor Corp. 156 5,460 Commerce Bancorp Inc. 90 5,451 Sonoco Products Co. 280 5,408 Rowan Companies Inc.+ 214 5,390 IDACorp Inc. 109 5,375 Lam Research Corp.+ 277 5,367 Astoria Financial Corp. 143 5,362 Hibernia Corp. "A" 448 5,348 Puget Sound Energy Inc. 217 5,330 Navistar International Corp.+ 161 5,323 AMB Property Corp. 226 5,311 Conseco Inc. 764 5,300 Vitria Technology Inc.+ 197 5,294 Molex Inc. 98 5,292 Caremark Rx Inc.+ 423 5,287 Tech Data Corp.+ 127 5,286 Myriad Genetics Inc.+ 44 5,280 Equitable Resources Inc. 91 5,278 Catalina Marketing Corp.+ 134 5,259 Jones Apparel Group Inc.+ 189 5,257 Compass Bancshares Inc. 289 5,256 Cephalon Inc.+ 98 5,255 First Virginia Banks Inc. 127 5,255 IPALCO Enterprises Inc. 234 5,250 Southdown Inc. 74 5,245 PACCAR Inc. 124 5,216 US Airways Group Inc.+ 138 5,210 Viacom Inc. "A"+ 91 5,210 Fox Entertainment Group Inc.+ 242 5,203 Grant Prideco Inc.+ 280 5,198 Energizer Holdings Inc.+ 262 5,174 Viad Corp. 241 5,151 Martin Marietta Materials Inc. 134 5,146 Kimco Realty Corp. 127 5,112 Eastern Enterprises 79 5,086 Hispanic Broadcasting Corp.+ 162 5,062 Greenpoint Financial Corp. 170 5,057 True North Communications Inc. 134 5,050 Abercrombie & Fitch Co.+ 214 5,042 Cirrus Logic Inc.+ 116 5,003 Technitrol Inc. 45 4,989 Alliant Energy Corp. 164 4,971 Hercules Inc. 271 4,963 American Standard Companies Inc.+ 108 4,954 Amerisource Health Corp. "A"+ 114 4,952 Incyte Pharmaceuticals Inc.+ 135 4,944 Liberty Property Trust 187 4,944 VF Corp. 181 4,944 Penney (J.C.) Company Inc. 422 4,932 Diamond Offshore Drilling Inc. 142 4,908 Silicon Valley Bancshares+ 106 4,903 Silicon Storage Technology Inc.+ 215 4,891 Boise Cascade Corp. 170 4,877 Super Value Inc. 317 4,874 Gentex Corp.+ 196 4,851 RealNetworks Inc.+ 235 4,843 Netegrity Inc.+ 62 4,836 NICOR Inc. 136 4,803 Maytag Corp. 167 4,780 Centura Banks Inc. 124 4,766 Old National Bancorp 161 4,750 Questar Corp. 175 4,736 Wilmington Trust Corp. 90 4,736 Georgia-Pacific (Timber Group) 167 4,728 Coors (Adolf) Company "B" 74 4,713 Metris Companies Inc. 145 4,694 L-3 Communications Holdings Inc.+ 71 4,682 National-Oilwell Inc.+ 160 4,680 Litton Industries Inc.+ 90 4,674 MGM Grand Inc. 135 4,666 MRV Communications Inc.+ 118 4,661 Kana Communications Inc.+ 198 4,653 Symantec Corp.+ 119 4,648 Spectrasite Holdings Inc.+ 235 4,641 ALLETE 215 4,636 Alpha Industries Inc.+ 116 4,626 Beckman Coulter Inc. 66 4,624 American Power Conversion Corp.+ 357 4,619 Public Storage Inc. 205 4,613 - --------------------------------------------------------------- iShares Schedules of Investments page 25 iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments (continued) October 31, 2000 (Unaudited) Security Shares Value - --------------------------------------------------------------- COMMON STOCKS (continued) - --------------------------------------------------------------- OGE Energy Corp. 224 $ 4,606 Semtech Corp.+ 142 4,580 Grainger (W.W.) Inc. 143 4,567 Conectiv Inc. 252 4,520 SkyWest Inc. 89 4,495 Hillenbrand Industries Inc. 97 4,486 Affymetrix Inc.+ 81 4,485 CH Robinson Worldwide Inc. 82 4,484 Tidewater Inc. 97 4,480 Whitman Corp. 342 4,446 Hudson City Bancorp Inc. 243 4,420 Edwards (J.D.) & Co.+ 170 4,399 National Fuel Gas Co. 82 4,397 Hanover Compressor Co.+ 134 4,372 Bank United Corp. "A" 77 4,365 AutoNation Inc.+ 646 4,360 Viasystems Group Inc.+ 306 4,341 Arden Realty Inc. 180 4,320 Andrew Corp.+ 164 4,315 Oxford Health Plans Inc.+ 127 4,286 Cummins Engine Company Inc. 126 4,284 Herman Miller Inc. 164 4,284 Kansas City Power & Light Co. 178 4,283 Lear Corp.+ 157 4,278 Helmerich & Payne Inc. 136 4,275 Washington Post Company (The) "B" 8 4,273 USX-U.S. Steel Group Inc. 268 4,271 Delhaize America Inc. "A" 250 4,250 International Game Technology Inc.+ 116 4,249 DoubleClick Inc.+ 261 4,241 CarrAmerica Realty Corp. 143 4,227 FirstMerit Corp. 185 4,220 UAL Corp. 111 4,211 Tyson Foods Inc. "A" 376 4,207 Quintiles Transnational Corp.+ 301 4,195 AmeriCredit Corp.+ 156 4,193 Primedia Inc.+ 369 4,174 Snap-On Inc. 163 4,167 Red Hat Inc.+ 332 4,150 Loral Space & Communications Ltd.+ 728 4,141 Sovereign Bancorp Inc. 498 4,140 Flowers Industries Inc. 269 4,136 Adaptec Inc.+ 261 4,127 Insight Enterprises Inc.+ 127 4,127 Sirius Satellite Radio Inc.+ 82 4,121 Elantec Semiconductor Inc.+ 37 4,116 Protective Life Corp. 178 $ 4,116 Alkermes Inc.+ 111 4,114 Aeroflex Inc.+ 69 4,105 Hormel Foods Corp. 244 4,102 CuraGen Corp.+ 63 4,071 Highwoods Properties Inc. 188 4,066 Pentair Inc. 136 4,055 DQE Inc. 116 4,053 Boston Properties Inc. 100 4,050 Consolidated Stores Corp.+ 341 4,049 Internap Network Services Corp.+ 253 4,048 Post Properties Inc. 115 4,018 Amkor Technology Inc.+ 181 4,016 Waddell & Reed Financial Inc. "A" 126 4,016 Powertel Inc.+ 46 4,014 Noble Affiliates Inc. 109 3,999 Host Marriott Corp. 376 3,995 DeVry Inc.+ 108 3,989 Chris-Craft Industries Inc.+ 54 3,969 Getty Images Inc.+ 125 3,969 Republic Services Inc. "A"+ 295 3,964 OSI Pharmaceuticals Inc.+ 55 3,960 Ameritrade Holding Corp. "A"+ 270 3,949 Webster Financial Corp. 162 3,949 Techne Corp.+ 35 3,946 Wendy's International Inc. 181 3,937 Valero Energy Corp. 119 3,934 Bemis Co. 152 3,933 Deluxe Corp. 174 3,926 Iron Mountain Inc.+ 116 3,922 Retek Inc.+ 99 3,904 Aurora Biosciences Corp.+ 64 3,900 Cousins Properties Inc. 150 3,900 ON Semiconductor Corp.+ 387 3,894 Lamar Advertising Co.+ 81 3,888 Pegasus Communications Corp.+ 109 3,876 Shaw Industries Inc. 208 3,861 Safeguard Scientifics Inc.+ 251 3,859 Universal Health Services Inc. "B"+ 46 3,858 Diebold Inc. 148 3,848 Marine Drilling Co. Inc.+ 161 3,844 Golden State Bancorp Inc. 147 3,840 VISX Inc.+ 179 3,837 Rouse Co. 155 3,827 Omnicare Inc. 218 3,815 OM Group Inc. 82 3,793 Liz Claiborne Inc. 89 3,783 Brown-Forman Corp. "B" 62 3,774 - -------------------------------------------------------------------------------- page 26 iShares iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments (continued) October 31, 2000 (Unaudited) Security Shares Value - --------------------------------------------------------------- COMMON STOCKS (continued) - --------------------------------------------------------------- CSG Systems International Inc.+ 81 $ 3,761 REMEC Inc.+ 126 3,756 Exar Corp.+ 84 3,754 Sybase Inc.+ 177 3,706 Time Warner Telecom Inc. "A"+ 62 3,697 Inhale Therapeutic Systems Inc.+ 74 3,681 Infonet Services Corp. "B"+ 566 3,679 Mastec Inc.+ 127 3,675 C&D Technologies Inc. 62 3,666 Advent Software Inc.+ 61 3,648 Winstar Communications Inc.+ 187 3,647 Royal Caribbean Cruises Ltd. 162 3,645 Northwest Airlines Corp. "A"+ 127 3,620 Dura Pharmaceuticals Inc.+ 105 3,616 Cell Therapeutics Inc.+ 54 3,612 Stanley Works (The) 135 3,594 Informix Corp.+ 844 3,587 Health Care Property Investors Inc. 122 3,584 Intermedia Communications Inc.+ 161 3,562 Fastenal Co. 62 3,561 St. Joe Company (The) 175 3,533 Western Resources Inc. 165 3,527 FMC Corp.+ 46 3,496 Infocus Corp.+ 79 3,491 Commerce Bancshares Inc. 97 3,486 CTS Corp. 81 3,478 Belo (A.H.) Corp. 181 3,473 Newfield Exploration Co.+ 92 3,473 Pride International Inc.+ 137 3,468 Aether Systems Inc.+ 43 3,467 Dycom Industries Inc.+ 92 3,462 Hasbro Inc. 322 3,461 Alpharma Inc. 89 3,454 Reckson Associates Realty Corp. 152 3,439 Bausch & Lomb Inc. 89 3,432 Iomega Corp.+ 699 3,432 Harris Corp. 108 3,422 McCormick & Co. Inc. 108 3,422 Nordstrom Inc. 208 3,419 Dun & Bradstreet Corp.+ 158 3,417 Fairchild Semiconductor Corp. "A"+ 162 3,412 National Instruments Corp.+ 73 3,408 Humana Inc.+ 279 3,383 Patterson Dental Co.+ 108 3,382 Jack Henry & Associates Inc. 61 3,355 Vicor Corp.+ 62 3,348 Cerner Corp.+ 54 $ 3,345 IBP Inc. 162 3,331 Plantronics Inc.+ 73 3,331 Santa Fe International Corp. 91 3,322 Outback Steakhouse Inc.+ 116 3,306 Natural Microsystems Corp.+ 73 3,299 Venator Group Inc.+ 233 3,291 Allied Capital Corp. 157 3,238 Manor Care Inc.+ 187 3,121 Lennar Corp. 97 3,116 SBA Communications Corp.+ 62 3,108 Clarent Corp.+ 100 3,106 Investors Financial Services Corp. 43 3,083 Cabot Corp. 140 3,080 Quanta Services Inc.+ 99 3,075 Cox Radio Inc. "A"+ 135 3,071 GATX Corporation 73 3,071 Ditech Communications Corp.+ 89 3,065 Efficient Networks Inc.+ 73 3,063 Precision Castparts Corp. 81 3,058 American Superconductor Corp.+ 64 3,056 Cobalt Networks Inc.+ 55 3,032 Callaway Golf Co. 189 3,024 Shaw Group Inc.+ 37 3,016 VerticalNet Inc.+ 108 3,012 Terayon Communications Systems Inc.+ 134 2,998 Adelphia Communications Corp. "A"+ 90 2,987 Mandalay Resort Group Inc.+ 143 2,976 Quantum Hard Disk Drive Group+ 260 2,974 Great Lakes Chemical Corp. 89 2,970 Mercury General Corp. 81 2,967 AudioCodes Ltd.+ 74 2,928 Allegheny Technologies Inc. 143 2,896 Comdisco Inc. 235 2,893 Inet Technologies Inc.+ 70 2,870 TeleCorp PCS Inc.+ 153 2,869 APW Ltd.+ 62 2,864 First Health Group Corp.+ 73 2,847 Galileo International Inc. 143 2,824 Dentsply International Inc. 81 2,810 Silicon Laboratories Inc.+ 100 2,806 Aspect Communications Corp.+ 170 2,802 Alexion Pharmaceuticals Inc.+ 27 2,791 Actuate Software Corp.+ 99 2,790 Brunswick Corp. 143 2,780 Barr Laboratories Inc.+ 44 2,778 Universal Access Inc.+ 189 2,764 CV Therapeutics Inc.+ 35 2,756 - -------------------------------------------------------------------------------- iShares Schedules of Investments page 27 iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments (continued) October 31, 2000 (Unaudited) Security Shares Value - --------------------------------------------------------------- COMMON STOCKS (continued) - --------------------------------------------------------------- Entercom Communications Corp.+ 70 $ 2,743 Leap Wireless International Inc.+ 55 2,736 Reinsurance Group of America Inc. 73 2,728 Focal Communications Corp.+ 188 2,726 FreeMarkets Inc.+ 55 2,719 International Flavors & Fragrances Inc. 162 2,713 Quest Software Inc.+ 62 2,709 Anaren Microwave Inc.+ 26 2,704 Cullen/Frost Bankers Inc. 81 2,698 Centillium Communications Inc.+ 71 2,697 SERENA Software Inc.+ 53 2,696 Teletech Holdings Inc.+ 97 2,692 Eaton Vance Corp. 54 2,690 Tollgrade Communications Inc.+ 28 2,681 FuelCell Energy Inc.+ 35 2,680 Newport News Shipbuilding Inc. 54 2,656 Matrixone Inc.+ 89 2,642 EarthLink Inc.+ 404 2,639 Crane Co. 100 2,619 Owens-Illinois Inc.+ 439 2,607 Proxim Inc.+ 43 2,607 Michaels Stores Inc.+ 107 2,601 Transatlantic Holdings Inc. 28 2,601 WatchGuard Technologies Inc.+ 52 2,600 Associated Bancorp 108 2,599 Harman International Industries Inc. 54 2,592 IndyMac Mortgage Holdings Inc.+ 124 2,588 Rite Aid Corp.+ 1,006 2,578 Liberate Technologies Inc.+ 135 2,573 Meredith Corp. 81 2,572 Krispy Kreme Doughnuts Inc.+ 26 2,563 IMC Global Inc. 198 2,562 Cable Design Technologies Corp.+ 111 2,560 Kopin Corp.+ 181 2,557 Smithfield Foods Inc.+ 89 2,553 AVX Corp. 89 2,548 iStar Financial Inc. 127 2,540 RenaissanceRe Holdings Ltd. 35 2,540 Pacific Century Financial Corp. 200 2,538 Nationwide Financial Services Inc. 52 2,529 Proxicom Inc.+ 187 2,525 Roslyn Bancorp Inc. 116 2,516 American Eagle Outfitters Inc.+ 73 2,514 City National Corp. 73 2,509 Cross Timbers Oil Co. 133 2,502 DMC Stratex Networks Inc.+ 108 2,497 Maxygen Inc.+ 62 $ 2,496 Harmonic Inc.+ 172 2,494 Entrust Technologies Inc.+ 81 2,486 Saks Inc.+ 244 2,486 PurchasePro.com Inc.+ 92 2,484 UnionBanCal Corporation 118 2,478 Trimeris Inc.+ 35 2,476 Cymer Inc.+ 99 2,475 Valassis Communications Inc.+ 89 2,470 Varco International Inc.+ 143 2,467 Software Technologies Corp.+ 145 2,465 Fidelity National Financial Inc. 100 2,456 Storage Technology Corp.+ 251 2,447 Orthodontic Centers of America+ 73 2,436 Caliper Technologies Corp.+ 43 2,424 Cytec Industries Inc.+ 70 2,424 Solutia Inc. 190 2,423 Sotheby's Holdings Inc. 89 2,420 Mack-Cali Realty Corp. 89 2,414 Pixar Inc.+ 73 2,409 General Growth Properties Inc. 81 2,389 Harte-Hanks Inc. 108 2,389 Hollinger International Inc. 154 2,377 BancWest Corporation 116 2,371 Raymond James Financial Corp. 70 2,367 Credence Systems Corp.+ 126 2,362 ADTRAN Inc.+ 62 2,356 United Therapeutics Inc.+ 44 2,354 Verity Inc.+ 100 2,350 Mentor Graphics Corp.+ 100 2,344 Pulte Corp. 70 2,332 Markel Corp.+ 16 2,318 Veeco Instruments Inc.+ 35 2,317 NPS Pharmaceuticals Inc.+ 54 2,315 Documentum Inc.+ 27 2,295 Immunomedics Inc.+ 99 2,289 Oak Technology Inc.+ 81 2,273 Oakley Inc.+ 108 2,268 Pier 1 Imports Inc. 171 2,266 Tularik Inc.+ 71 2,254 Key Energy Group Inc.+ 250 2,250 Triton Energy Ltd.+ 73 2,245 Concurrent Computer Corp.+ 127 2,238 Sensormatic Electronics Corp.+ 124 2,232 Westamerica Bancorp 62 2,228 BRE Properties Inc. 70 2,214 Leucadia National Corp. 89 2,214 Talbots Inc. (The) 28 2,214 - -------------------------------------------------------------------------------- page 28 iShares iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments (continued) October 31, 2000 (Unaudited) Security Shares Value - --------------------------------------------------------------- COMMON STOCKS (continued) - --------------------------------------------------------------- StanCorp Financial Group Inc. 54 $ 2,201 Wireless Facilities Inc.+ 44 2,200 Artesyn Technologies Inc.+ 54 2,194 FelCor Lodging Trust Inc. 100 2,194 Lafarge Corp. 116 2,190 Digital Lightware Inc.+ 43 2,180 Kaufman & Broad Home Corp. 73 2,172 Scholastic Corp.+ 27 2,160 Ticketmaster Online-CitySearch Inc. "B"+ 135 2,160 Tetra Tech Inc.+ 62 2,155 Adaptive Broadband Corp.+ 134 2,152 Autodesk Inc. 97 2,140 Sierra Pacific Resources Corp. 124 2,131 Suiza Foods Corp.+ 46 2,130 Provident Financial Group Inc. 70 2,118 Mohawk Industries Inc.+ 97 2,116 PLX Technology Inc.+ 88 2,112 Unitrin Inc. 68 2,112 Affiliated Managers Group Inc.+ 35 2,104 First American Financial Corp. 100 2,094 Dial Corp. 187 2,092 Cognex Corp.+ 62 2,077 Reynolds & Reynolds Co. "A" 116 2,074 Virata Corp.+ 107 2,073 National Data Corp. 54 2,059 RCN Corp.+ 116 2,059 Crown Cork & Seal Co. Inc. 225 2,053 Downey Financial Corp. 43 2,053 Trustmark Corp. 108 2,052 Commscope Inc.+ 81 2,050 Emcore Corp.+ 50 2,050 SICOR Inc.+ 160 2,050 Vintage Petroleum Inc. 97 2,049 Maxim Pharmaceuticals Inc.+ 46 2,041 Barnes & Noble Inc.+ 108 2,038 Cheesecake Factory (The)+ 46 2,038 Methode Electronics Inc. "A" 54 2,032 Power Integrations Inc.+ 151 2,029 Lexicon Genetics Inc.+ 100 2,025 People's Bank 100 2,025 DuPont Photomasks Inc.+ 36 2,020 Zebra Technologies Corp. "A"+ 46 2,015 Transkaryotic Therapies Inc.+ 54 2,012 Microstrategy Inc.+ 84 2,011 Millennium Chemicals Inc. 124 2,000 Borders Group Inc.+ 144 1,998 Siliconix Inc.+ 46 $ 1,990 Whole Foods Market Inc.+ 43 1,989 Louis Dreyfus Natural Gas Corp.+ 62 1,988 Legato Systems Inc.+ 223 1,986 Wiley (John) & Sons Inc. "A" 97 1,982 Ryder System Inc. 100 1,975 Varian Inc.+ 64 1,972 New Plan Excel Realty Trust 160 1,970 Wave Systems Corp. "A"+ 170 1,966 Dillards Inc. "A" 187 1,963 Atlas Air Inc.+ 54 1,957 Independence Community Bank Corp. 133 1,953 Osicom Technologies Inc.+ 61 1,952 Covad Communications Group Inc.+ 369 1,949 CNF Transportation Inc. 73 1,948 Scient Corp.+ 108 1,944 Delhaize America Inc. "B" 116 1,943 Hubbell Inc. "B" 81 1,939 Six Flags Inc.+ 124 1,938 IDT Corp.+ 54 1,930 Selectica Inc.+ 73 1,925 Hospitality Properties Trust 89 1,919 Reebok International Ltd.+ 89 1,919 Carlisle Companies Inc. 46 1,915 First Industrial Realty Trust 62 1,914 Valspar Corp. 70 1,912 American Financial Group Inc. 89 1,908 Linens 'N Things Inc.+ 62 1,906 Blyth Industries Inc. 73 1,898 CNA Financial Corp.+ 52 1,898 Visible Genetics Inc.+ 62 1,876 Steris Corp.+ 125 1,875 Photon Dynamics Inc.+ 52 1,872 Chesapeake Energy Corp.+ 331 1,862 Peoples Energy Corp. 54 1,856 Williams-Sonoma Inc.+ 89 1,852 D.R. Horton Inc. 100 1,850 Molecular Devices Corp.+ 27 1,846 Zale Corp.+ 54 1,829 ArvinMeritor Inc. 109 1,826 Hain Celestial Group Inc.+ 46 1,826 ONEOK Inc. 46 1,823 HSB Group Inc. 46 1,820 NOVA Corporation+ 116 1,820 American Greetings Corp. "A" 100 1,819 AGL Resources Inc. 89 1,813 Ethan Allen Interiors Inc. 62 1,813 Alberto-Culver Co. "B" 54 1,812 - -------------------------------------------------------------------------------- iShares Schedules of Investments page 29 iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments (continued) October 31, 2000 (Unaudited) Security Shares Value - --------------------------------------------------------------- COMMON STOCKS (continued) - --------------------------------------------------------------- Hudson United Bancorp 81 $ 1,812 Washington Federal Inc. 81 1,807 PSINET Inc.+ 271 1,804 Stillwater Mining Co.+ 62 1,798 Global Telesystems Group Inc. 664 1,785 Ross Stores Inc. 135 1,780 Black Box Corp.+ 27 1,779 Jacobs Engineering Group Inc.+ 43 1,779 Quorum Health Group Inc.+ 133 1,779 Silicon Valley Group Inc.+ 54 1,779 Aspen Technology Inc.+ 43 1,776 Camden Property Trust 62 1,775 Coventry Health Care Inc.+ 97 1,770 Greater Bay Bancorp 54 1,758 AK Steel Holding Corp. 190 1,757 Lubrizol Corp. 81 1,757 Toll Brothers Inc.+ 54 1,755 Alexander & Baldwin Inc. 70 1,746 Colonial BancGroup Inc. 198 1,745 Citizens Banking Corp. 73 1,738 Dean Foods Co. 54 1,728 Comcast Corp.+ 43 1,725 NetIQ Corp.+ 20 1,723 SonicWALL Inc.+ 115 1,718 Echelon Corp.+ 54 1,714 Global Industries Ltd.+ 163 1,711 Advance Paradigm Inc.+ 35 1,710 Public Service Company of New Mexico 62 1,709 Homestake Mining Company+ 414 1,708 Imperial Bancorp+ 70 1,702 Security Capital Group "B"+ 89 1,697 Houghton Mifflin Co. 46 1,693 OpenTV Corp.+ 63 1,693 Pennzoil-Quaker State Co. 144 1,692 York International Corp. 62 1,686 Barrett Resources Corp.+ 46 1,673 RPM Inc. 187 1,671 Cleco Corp. 35 1,665 GoAmerica Inc.+ 159 1,660 Emmis Communications Corp.+ 62 1,658 Enzo Biochem Inc.+ 43 1,655 Donaldson Co. Inc. 73 1,652 Crompton Corp. 206 1,648 Williams Communications Group Inc.+ 90 1,648 Renal Care Group Inc.+ 70 1,645 Avista Corp. 73 1,638 International Speedway Corp. "A" 51 $ 1,638 Next Level Communications Inc.+ 35 1,638 Intranet Solutions Inc.+ 35 1,627 HNC Software Inc.+ 80 1,625 Borg-Warner Automotive Inc. 43 1,623 United Stationers Inc.+ 54 1,623 Apria Healthcare Group Inc.+ 81 1,620 Perot Systems Corp. "A"+ 163 1,620 Ball Corp. 46 1,616 Louisiana-Pacific Corp. 190 1,615 Anchor Gaming+ 19 1,614 Station Casinos Inc.+ 100 1,613 Roper Industries Inc. 46 1,610 Varian Semiconductor Equipment Associates Inc.+ 70 1,610 VA Linux Systems Inc.+ 55 1,609 RGS Energy Group Inc. 54 1,593 Netro Corp.+ 73 1,592 CBRL Group Inc. 89 1,591 Kenneth Cole Productions "A"+ 35 1,590 Learning Tree International Inc.+ 35 1,584 Prentiss Properties Trust 62 1,573 Southwest Bancorp of Texas Inc.+ 43 1,570 Diamond Technology Partners Inc.+ 35 1,562 Noven Pharmaceuticals Inc.+ 35 1,560 Corn Products International Inc. 62 1,558 Commercial Federal Corp. 89 1,557 First Midwest Bancorp Inc. 62 1,554 Nordson Corp. 54 1,549 Maxtor Corp.+ 198 1,547 Titan Corp. (The)+ 115 1,538 Scotts Co. (The) "A"+ 43 1,537 Pre-Paid Legal Services Inc.+ 35 1,536 MedQuist Inc.+ 136 1,530 Tut Systems Inc.+ 46 1,530 Tupperware Corp. 89 1,524 Forrester Research Inc.+ 37 1,519 Jack in the Box Inc.+ 62 1,519 Delta & Pine Land Co. 62 1,515 Hawaiian Electric Industries Inc. 46 1,515 Rayonier Inc. 43 1,513 Interstate Bakeries Corp. 108 1,512 Henry Schein Inc.+ 62 1,511 Intertrust Technologies Corp.+ 151 1,510 Electro Scientific Industries Inc.+ 43 1,502 Coherent Inc.+ 43 1,497 Polaris Industries Partners LP "A" 43 1,494 Trinity Industries Inc. 62 1,492 - -------------------------------------------------------------------------------- page 30 iShares iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments (continued) October 31, 2000 (Unaudited) Security Shares Value - --------------------------------------------------------------- COMMON STOCKS (continued) - --------------------------------------------------------------- Benchmark Electronics Inc.+ 37 $ 1,489 Johns Manville Corp. 162 1,488 Mercury Computer Systems Inc.+ 48 1,488 Cooper Tire & Rubber Co. 136 1,487 S3 Inc.+ 163 1,472 Claire's Stores Inc. 73 1,469 Berkley (W.R.) Corp. 43 1,465 Lancaster Colony Corp. 62 1,465 Superior Industries International Inc. 43 1,465 Ligand Pharmaceuticals Inc. "B"+ 98 1,458 O'Reilly Automotive Inc.+ 81 1,458 Priority Healthcare Corp. "B"+ 27 1,451 HRPT Properties Trust 225 1,448 NorthPoint Communications Group Inc.+ 214 1,445 Extended Systems Inc.+ 37 1,443 Alliant Techsystems Inc.+ 16 1,439 Swift Transportation Co. Inc.+ 100 1,425 Freeport-McMoRan Copper & Gold Inc.+ 179 1,421 U.S. Industries Inc. 160 1,420 Earthgrains Company (The) 70 1,417 Lone Star Technologies Inc.+ 35 1,405 Keane Inc.+ 108 1,404 Piedmont Natural Gas Co. 46 1,403 Alliance Semiconductor Corp.+ 70 1,400 Western Digital Corp.+ 233 1,398 Meristar Hospitality Corp. 73 1,396 Stein Mart Inc.+ 90 1,395 Allscripts Inc.+ 116 1,392 HCC Insurance Holdings Inc. 73 1,392 Spherion Corporation+ 117 1,389 Stone Energy Corp.+ 27 1,382 WebTrends Corp.+ 43 1,382 AnnTaylor Stores Corp.+ 46 1,380 PC-Tel Inc.+ 80 1,380 Three-Five Systems, Inc.+ 40 1,380 Electronics For Imaging Inc.+ 89 1,379 Silicon Graphics Inc.+ 306 1,377 IDX Systems Corp.+ 43 1,376 Avis Rent A Car Inc.+ 46 1,374 Digex Inc.+ 35 1,374 Werner Enterprises Inc. 98 1,372 CEC Entertainment Inc.+ 43 1,371 Timken Co. 97 1,364 Wisconsin Central Transportation Corp.+ 106 1,358 Longs Drug Stores Inc. 62 1,356 Micron Electronics Inc.+ 171 1,352 Kennametal Inc. 46 $ 1,351 Dendrite International Inc.+ 62 1,348 Pharmaceutical Product Development Inc.+ 43 1,346 Thomas & Betts Corp. 89 1,346 M-Systems Flash Disk Pioneers Ltd.+ 54 1,343 American Management Systems Inc.+ 62 1,341 AGCO Corp. 117 1,331 Xoma Ltd.+ 109 1,328 Casey's General Store Inc. 106 1,325 National Discounts Brokers Group Inc.+ 27 1,315 Invacare Corp. 46 1,311 El Paso Electric Co.+ 109 1,307 Applebee's International Inc. 43 1,299 IDEXX Laboratories Inc.+ 54 1,296 Patterson Energy Inc.+ 46 1,294 ADVO Inc.+ 35 1,288 Priceline.com Inc.+ 224 1,288 Universal Corporation 46 1,288 Azurix Corp.+ 206 1,287 Pittston Brink's Group 81 1,286 Actel Corp.+ 35 1,282 Mutual Risk Management Ltd. 70 1,269 Plug Power Inc.+ 53 1,269 National Service Industries Inc. 62 1,267 Mueller Industries Inc.+ 54 1,259 Footstar Inc.+ 35 1,256 Valuevision International Inc. "A"+ 62 1,256 Rent-A-Center Inc.+ 43 1,255 Sylvan Learning Systems Inc.+ 81 1,250 Briggs & Stratton Corp. 35 1,249 Flowserve Corp. 62 1,248 USG Corp. 73 1,246 Olin Corp. 70 1,243 Mid Atlantic Medical Services Inc.+ 73 1,241 Cabot Microelectronics Corp.+ 28 1,237 Healthcare Realty Trust 62 1,236 CompuCredit Corp.+ 40 1,235 Tom Brown Inc.+ 54 1,235 Furniture Brands International Inc.+ 73 1,232 Digital Island Inc.+ 97 1,225 Donnelley (R.H.) Co.+ 54 1,222 Robert Mondavi Corp. (The) "A"+ 27 1,222 Copart Inc.+ 81 1,220 DSP Group Inc.+ 43 1,220 FileNET Corp.+ 46 1,219 Modine Manufacturing Co. 46 1,213 C-Cube Microsystems Inc.+ 62 1,209 Storage USA Inc. 43 1,201 - -------------------------------------------------------------------------------- iShares Schedules of Investments page 31 iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments (continued) October 31, 2000 (Unaudited) Security Shares Value - --------------------------------------------------------------- COMMON STOCKS (continued) - --------------------------------------------------------------- Newpark Resources Inc.+ 133 $ 1,197 Staten Island Bancorp Inc. 62 1,197 Catalytica Inc.+ 89 1,196 Federal Realty Investment Trust 62 1,193 Motient Corp.+ 98 1,188 Brandywine Realty Trust 62 1,186 Wellman Inc. 79 1,185 Tredegar Corporation 62 1,182 Lands' End Inc.+ 46 1,180 Copper Mountain Networks Inc.+ 103 1,178 Excalibur Technologies Corp.+ 20 1,177 Scios Inc.+ 82 1,174 Seacor Smit Inc.+ 28 1,173 Broadbase Software Inc.+ 109 1,172 Manitowoc Co. Inc. 43 1,169 MascoTech Inc. 70 1,168 Bob Evans Farms Inc. 62 1,166 Developers Diversified Realty Corp. 97 1,158 Papa John's International Inc.+ 46 1,156 AXT Inc.+ 30 1,155 Sl Green Realty Corp. 43 1,153 Pinnacle Holdings Inc.+ 73 1,150 Regeneron Pharmaceuticals Inc.+ 43 1,150 AnswerThink Consulting Group Inc.+ 70 1,146 Packeteer Inc.+ 46 1,144 ProBusiness Services Inc.+ 35 1,144 Chittenden Corp. 43 1,142 Fairfield Communities Inc.+ 90 1,142 EGL Inc.+ 40 1,140 PanAmSat Corp.+ 34 1,139 Dionex Corp.+ 35 1,135 AmerUs Group Co. 43 1,134 Community First Bankshares Inc. 73 1,131 Kilroy Realty Corp. 43 1,121 Forest Oil Corp.+ 81 1,119 AptarGroup Inc. 54 1,117 Alaska Air Group Inc.+ 43 1,115 Children's Place Retail Stores Inc.+ 43 1,115 Bio-Technology General Corp.+ 106 1,113 Washington Group International Inc.+ 106 1,113 Doral Financial Corp. 62 1,108 Ferro Corp. 54 1,107 US Freightways Corp. 43 1,107 Syncor International Corp.+ 43 1,105 Charming Shoppes Inc.+ 179 1,096 Phoenix Investment Partners Ltd. 70 1,094 Polymedica Industries Inc.+ 19 $ 1,093 Nationwide Health Properties Inc. 73 1,090 Carpenter Technology Corp. 35 1,085 F5 Networks Inc.+ 35 1,085 Aware Inc.+ 35 1,083 Concord Camera Corp.+ 35 1,083 Richmond County Financial Corp. 46 1,081 Core Laboratories NV+ 50 1,078 E-Town Corp. 16 1,078 Tower Automotive Inc.+ 98 1,078 Dole Food Co. 89 1,074 Insituform Technologies Inc. "A"+ 30 1,071 Computer Network Technology Corp.+ 35 1,064 Cell Genesys Inc.+ 46 1,061 Macerich Co. (The) 54 1,060 Respironics Inc.+ 54 1,060 Aztar Corp.+ 70 1,059 Dreyer's Grand Ice Cream Inc. 43 1,059 Hall Kinion & Associates Inc.+ 40 1,057 Park Electrochemical Corp. 16 1,057 Advanced Digital Information Corp.+ 81 1,053 Superior Energy Services Inc.+ 117 1,053 Lilly Industries Inc. "B" 35 1,050 Veritas DGC Inc.+ 35 1,050 Silicon Image Inc.+ 89 1,046 Shurgard Storage Centers Inc. 46 1,044 Maverick Tube Corp.+ 67 1,043 Avant! Corp.+ 62 1,042 Horace Mann Educators Corp. 62 1,042 Coulter Pharmaceutical Inc.+ 27 1,034 Stewart & Stevenson Services Inc. 43 1,032 Alliance Pharmaceutical Corp.+ 73 1,031 Kulicke & Soffa Industries Inc.+ 70 1,028 WMS Industries Inc.+ 46 1,024 Pharmacyclics Inc.+ 19 1,022 Service Corp. International+ 441 1,020 Wallace Computer Services Inc. 70 1,015 Haemonetics Corp.+ 43 1,010 Kaydon Corp. 46 1,009 Western Gas Resources Inc. 46 1,009 Northwest Natural Gas Co. 43 1,008 Overseas Shipholding Group Inc. 42 1,008 Key3Media Group Inc.+ 106 1,007 UTStarcom, Inc.+ 50 1,000 CBL & Associates Properties Inc. 43 994 GoTo.com Inc.+ 70 993 Banta Corp. 43 992 MacDermid Inc. 46 989 - -------------------------------------------------------------------------------- page 32 iShares iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments (continued) October 31, 2000 (Unaudited) Security Shares Value - --------------------------------------------------------------- COMMON STOCKS (continued) - --------------------------------------------------------------- HI/FN Inc.+ 16 $ 988 Pharmacopeia Inc.+ 54 986 Sonic Corp.+ 27 986 Ohio Casualty Corp. 117 984 Acuson Corp.+ 43 981 Granite Construction Inc. 43 981 Pinnacle Entertainment Inc.+ 43 981 Cost Plus Inc.+ 35 980 LTX Corp.+ 70 980 Queens County Bancorp Inc. 35 980 Helix Technology Corp. 35 976 Wolverine World Wide Inc. 90 973 Photronics Inc.+ 43 970 G&K Services Inc. "A" 35 967 Interface Inc. 106 967 Atlantic Coast Airlines Holdings Inc.+ 27 965 Glenayre Technologies Inc.+ 117 965 ANADIGICS Inc.+ 43 962 ESS Technology Inc.+ 62 961 Jeffries Group Inc. 35 954 LookSmart Ltd.+ 135 953 Zoran Corp.+ 19 952 Georgia Gulf Corp. 71 950 Unifi Inc.+ 109 947 ATMI, Inc.+ 50 944 Hutchinson Technology Inc.+ 43 943 Michael Foods Inc. 35 943 Pacific Sunwear of California Inc.+ 46 943 NCO Group Inc.+ 43 941 Zygo Corp.+ 19 941 Covance Inc.+ 109 940 Gene Logic Inc.+ 43 938 Regis Corp. 62 938 Fleetwood Enterprises Inc. 71 936 Prime Hospitality Corp.+ 98 931 Kansas City Southern Industries Inc. 107 930 LNR Property Corp. 43 930 Wausau-Mosinee Paper Corp. 106 928 Constellation Brands Inc.+ 19 926 Ciber Inc.+ 117 914 Metro-Goldwyn-Mayer Inc.+ 46 906 Sinclair Broadcast Group "A"+ 98 903 Trans World Entertainment Corp.+ 106 901 internet.com LLC+ 43 895 Waste Connections Inc.+ 35 895 Input/Output Inc.+ 106 894 S1 Corp.+ 73 $ 881 Fleming Companies Inc. 62 880 Bally Total Fitness Holding Corp.+ 35 873 Triarc Companies Inc.+ 35 873 Chelsea GCA Realty Inc. 27 871 Manufactured Home Communities Inc. 35 871 eLoyalty Corp.+ 90 866 Guilford Pharmaceuticals Inc.+ 35 864 JDN Realty Corp. 79 864 Parker Drilling Co.+ 144 864 Russell Corp. 54 864 Milacron Inc. 54 861 Colonial Properties Trust 35 860 Rural Cellular Corp. "A"+ 16 860 US Oncology Inc.+ 160 860 Republic Bancorp Inc. 90 855 Complete Business Solutions Inc.+ 82 851 AMCORE Financial Inc. 43 844 Cabot Oil & Gas Corp. "A" 43 844 Petsmart Inc.+ 190 843 Puma Technology Inc.+ 62 841 MAF Bancorp Inc. 35 840 New Era of Networks Inc.+ 54 840 Kellwood Co. 43 836 Network Plus Corp.+ 106 835 Trimble Navigation Ltd.+ 35 831 AXENT Technologies Inc.+ 43 825 Ultratech Stepper Inc.+ 35 823 Great Atlantic & Pacific Tea Co. 82 820 Sunrise Assisted Living Inc.+ 35 818 Metricom Inc.+ 46 817 Texas Industries Inc. 35 816 Biosite Diagnostics Inc.+ 37 814 Health Care Inc. 46 814 Provident Bankshares Corp. 43 814 NBTY Inc.+ 125 813 RFS Hotel Investors Inc. 63 811 NextCard Inc.+ 106 808 Allen Telecom Inc.+ 43 803 MSC Industrial Direct Co. Inc. "A"+ 54 803 eToys Inc.+ 214 802 Kent Electronics Corp.+ 43 801 InterDigital Communications Corp.+ 73 798 Kaman Corp. "A" 55 797 PRI Automation Inc.+ 35 792 Duane Reade Inc.+ 27 788 Remedy Corp.+ 46 788 ITC DeltaCom Inc.+ 97 785 - -------------------------------------------------------------------------------- iShares Schedules of Investments page 33 iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments (continued) October 31, 2000 (Unaudited) Security Shares Value - --------------------------------------------------------------- COMMON STOCKS (continued) - --------------------------------------------------------------- Littelfuse Inc.+ 27 $ 783 Ocwen Financial Corp.+ 133 781 Advanced Tissue Sciences Inc.+ 109 777 Schulman (A.) Inc. 71 777 Yellow Corporation+ 43 774 Harbor Florida Bancshares Inc. 63 772 Tumbleweed Communications Corp.+ 45 771 Performance Food Group Co.+ 19 770 Cytogen Corp.+ 133 765 Zomax Optical Media Inc.+ 126 764 First Sentinel Bancorp Inc. 82 761 Mentor Corp. 43 758 Steelcase Inc. 43 758 Cato Corp. "A" 63 756 Landstar System Inc.+ 16 756 Valence Technology Inc.+ 54 753 P-Com Inc.+ 133 748 Phillips-Van Heusen Corporation 63 748 Selective Insurance Group Inc. 43 742 Airborne Freight Corp. 73 739 Glenborough Realty Trust Inc. 46 739 IHOP Corp.+ 35 739 Sterling Bancshares Inc. 43 739 Tesoro Petroleum Corp.+ 71 737 Home Properties of NY Inc. 27 734 PacifiCare Health Systems Inc. "A"+ 70 731 Read-Rite Corp.+ 98 729 Del Webb Corp.+ 27 726 Presstek Inc.+ 46 725 SCM Microsystems Inc.+ 19 722 Enhance Financial Services Group Inc. 62 721 C-COR Electronics Inc.+ 46 719 Republic Security Financial Corp. 106 719 RadiSys Corp.+ 27 716 Brooks Automation Inc.+ 27 715 Trico Marine Services Inc.+ 43 715 BE Aerospace Inc.+ 43 709 Sunrise Technologies International Inc.+ 98 707 Brightpoint Inc.+ 106 706 Hunt (J.B.) Transport Services Inc. 54 705 Modis Professional Services Inc.+ 171 705 Watts Industries Inc. "A" 63 705 Polaroid Corp. 70 704 Viatel Inc.+ 73 703 Sunglass Hut International Inc.+ 90 698 Owens & Minor Inc. 46 696 Inprise Corp.+ 109 $ 695 InterVoice Inc.+ 71 694 Sanchez Computer Associates Inc.+ 43 691 Asyst Technologies Inc.+ 46 690 ACTV Inc.+ 70 689 Mpower Communications Corp.+ 106 689 FirstFed Financial Corp.+ 27 688 UniSource Energy Corp. 46 687 Koger Equity Inc. 43 685 Nautica Enterprises Inc.+ 54 682 Meridian Gold Inc.+ 136 680 Meridian Resource Corp. (The)+ 98 680 Dress Barn Inc.+ 27 677 IMRglobal Corp.+ 82 676 Adelphia Business Solutions Inc.+ 108 675 NBC Internet Inc. "A"+ 109 674 IGEN International Inc.+ 27 672 Meditrust Corp.+ 244 671 Presidential Life Corp. 46 670 Biomatrix Inc.+ 35 669 Quiksilver Inc.+ 35 669 StarMedia Network Inc.+ 109 668 Lone Star Steakhouse & Saloon Inc. 79 667 Anchor Bancorp Wisconsin Inc. 43 664 Systems & Computer Technology Corp.+ 46 664 East West Bancorp Inc. 35 663 Bowne & Co. Inc. 79 662 Ryan's Family Steak Houses Inc.+ 79 662 Xcelera.com Inc.+ 55 660 Metasolv Software Inc.+ 53 659 ANTEC Corp.+ 54 658 Datascope Corp. 19 658 Hughes Supply Inc. 35 656 Citadel Communications Corp.+ 54 655 SLI Inc. 79 652 Orbital Sciences Corp.+ 82 651 WebLink Wireless Inc.+ 82 651 Xircom Inc.+ 46 650 About.com Inc.+ 27 648 Standard Microsystems Corp.+ 27 648 Bethlehem Steel Corp.+ 225 647 Ralcorp Holdings Inc.+ 46 647 Seitel Inc.+ 43 645 Hyperion Solutions Corp.+ 46 644 Genzyme Transgenics Corp.+ 30 643 Fuller (H.B.) Co. 19 642 South Financial Group Inc. (The) 63 642 Atwood Oceanics Inc.+ 19 638 - -------------------------------------------------------------------------------- page 34 iShares iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments (continued) October 31, 2000 (Unaudited) Security Shares Value - --------------------------------------------------------------- COMMON STOCKS (continued) - --------------------------------------------------------------- Auspex Systems Inc.+ 63 $ 638 Springs Industries Inc. "A" 27 636 Caraustar Industries Inc. 63 634 Geron Corp.+ 27 634 MetaCreations Corp.+ 63 630 Cyberonics Inc.+ 27 628 Cell Pathways Inc.+ 82 625 OfficeMax Inc.+ 217 624 Genesco Inc.+ 35 621 Scott Technologies Inc.+ 27 621 Transaction Systems Architects Inc. "A"+ 46 621 Internet Pictures Corp.+ 288 616 Stericycle Inc.+ 19 615 Arthocare Corp.+ 27 613 Intergraph Corp.+ 98 612 SilverStream Software Inc.+ 27 608 GBC Bancorp 19 606 Offshore Logistics Inc.+ 35 604 Esterline Corp.+ 27 602 Fossil Inc.+ 46 601 Mills Corp. 35 597 Pioneer-Standard Electronics Inc. 43 597 American Capital Strategies Ltd. 27 596 Activision Inc.+ 43 594 NUI Corp. 19 593 EntreMed Inc.+ 19 591 WD-40 Company 27 591 Regal-Beloit Corp. 35 586 Cheap Tickets Inc.+ 55 584 UCBH Holdings Inc. 16 582 Westpoint Stevens Inc. 81 582 UCAR International Inc.+ 70 578 Bay View Capital Corp. 71 577 Organogenesis Inc.+ 46 577 Razorfish Inc.+ 127 572 World Access Inc.+ 117 570 Texas Regional Bancshares "A" 19 568 Ionics Inc.+ 27 565 Checkpoint Systems Inc.+ 71 564 Cygnus Inc.+ 63 563 Arkansas Best Corp.+ 35 560 Ask Jeeves Inc.+ 43 559 Structural Dynamics Research Corp.+ 54 557 Multex.com Inc.+ 43 556 Airtran Holdings Inc.+ 125 555 Roadway Express Inc. 27 555 Supergen Inc.+ 43 $ 554 THQ Inc.+ 27 554 Cohu Inc. 35 553 Hyseq Inc.+ 19 552 Parexel International Corp.+ 63 551 NaviSite Inc.+ 54 550 Globix Corp.+ 54 547 Prodigy Communications Corp. "A"+ 125 547 Accrue Software Inc.+ 118 546 American Italian Pasta Co.+ 27 542 Southwest Securities Group Inc. 19 537 Basin Exploration Inc.+ 27 535 Kos Pharmaceuticals Inc.+ 27 535 Take-Two Interactive Software Inc.+ 43 535 Viant Corp.+ 90 534 Micros Systems Inc.+ 27 533 Inter-Tel Inc. 46 532 Chesapeake Corp. 27 530 I-Stat Corp.+ 27 530 Trenwick Group Ltd. 27 530 Terex Corp.+ 43 529 APAC Customer Services Inc.+ 98 527 JDA Software Group Inc.+ 35 527 Profit Recovery Group International Inc. (The)+ 98 527 Chemed Corp. 16 526 Network Equipment Technologies Inc.+ 55 523 Evergreen Resources Inc.+ 19 522 Picturetel Corp.+ 82 521 Battle Mountain Gold Co.+ 376 517 AAR Corp. 43 513 RTI International Metals Inc.+ 35 508 Equity Inns Inc. 82 507 Grace (W.R.) & Company+ 133 507 Albany International Corp.+ 46 494 Electroglas Inc.+ 35 492 Oceaneering International Inc.+ 35 492 Avid Technology Inc.+ 35 486 Mail-Well Inc.+ 98 484 Stride Rite Corp. 90 484 Sykes Enterprises Inc.+ 90 484 BackWeb Technologies Ltd.+ 54 483 NABI Inc.+ 79 483 Calgon Carbon Corp. 82 482 Fremont General Corp. 133 482 Emisphere Technologies Inc.+ 19 481 Data Broadcasting Corp.+ 109 480 Finish Line Inc. (The)+ 63 480 - -------------------------------------------------------------------------------- iShares Schedules of Investments page 35 iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments (Continued) October 31, 2000 (Unaudited) Security Shares Value - --------------------------------------------------------------- COMMON STOCKS (continued) - --------------------------------------------------------------- Novoste Corp.+ 19 $ 480 Audiovox Corp. "A"+ 35 479 Casella Waste Systems Inc. "A"+ 55 478 Pep Boys-Manny Moe & Jack Inc. 106 477 General Cable Corp. 79 474 Ryerson Tull Inc. 63 473 Friede Goldman Halter Inc.+ 82 471 Teligent Inc. "A"+ 62 471 Young Broadcasting Corp. "A"+ 19 471 MP3.com Inc.+ 133 470 Hearst-Argyle Television Inc.+ 26 466 Guitar Center Inc.+ 35 464 ZixIt Corp.+ 19 464 Intraware Inc.+ 63 461 Monaco Coach Corp.+ 27 461 Haven Bancorp Inc. 16 458 StarBase Corp.+ 90 458 International Multifoods Corp. 27 457 Project Software & Development Inc.+ 35 455 Cambridge Technology Partners Inc.+ 117 453 Shopko Stores Inc.+ 71 453 Capital Automotive 35 451 ePresence Inc.+ 63 445 Viropharma Inc.+ 19 444 Wabash National Corp. 55 440 Uniroyal Technology Corp.+ 43 438 Carrier Access Corp.+ 35 437 SpeedFam-IPEC Inc.+ 46 437 Columbia Laboratories Inc.+ 71 435 Pediatrix Medical Group Inc.+ 27 430 Dime Community Bancshares 19 422 Elcor Corp. 27 420 Rare Medium Group Inc.+ 90 416 EMCOR Group Inc.+ 16 415 Magic Software Enterprises Ltd.+ 71 413 Miravant Medical Technologies+ 27 408 Genome Therapeutics Corp.+ 27 403 Winnebago Industries Inc. 35 403 FSI International Inc.+ 43 400 Net.B@nk Inc.+ 46 400 Primus Telecommunications Group Inc.+ 79 400 PSS World Medical Inc.+ 133 399 kForce.com Inc.+ 98 398 OceanFirst Financial Corp. 19 398 USinternetworking Inc.+ 171 395 CACI International Inc. "A"+ 19 392 Cleveland-Cliffs Inc. 19 392 Talk.com Inc.+ 125 387 Burnham Pacific Properties Inc. 71 386 Stamps.com Inc.+ 98 386 Immune Response Corp.+ 63 382 Champion Enterprises Inc.+ 98 380 Ha-Lo Industries Inc.+ 98 380 Stewart Enterprises Inc. "A" 179 380 US LEC Corp. "A"+ 63 378 American Classic Voyages Co.+ 27 373 Dura Automotive Systems Inc.+ 44 371 Imatron Inc.+ 171 369 Jupiter Media Metrix Inc.+ 27 368 InfoCure Corp.+ 71 362 Pacific Northwest Bancorp 27 361 Digital River Inc.+ 55 359 E.W. Blanch Holdings Inc. 19 359 National Information Consortium Inc.+ 106 358 Symmetricom Inc.+ 28 357 Computer Horizons Corp.+ 71 355 PFF Bancorp Inc. 19 352 Wild Oats Markets Inc.+ 55 347 Navigant Consulting Co.+ 90 343 iXL Enterprises Inc.+ 133 341 Tenneco Automotive Inc. 79 341 NetSpeak Corp.+ 44 336 Vertel Corp.+ 63 335 Theragenics Corp.+ 71 333 General Magic Inc.+ 82 331 NEON Communications Inc.+ 27 326 CPI Corp. 16 323 Modem Media Inc.+ 55 323 Arch Wireless Inc.+ 106 318 Rhythms Netconnections Inc.+ 144 315 Allaire Corp.+ 43 314 High Speed Access Corp.+ 106 311 CyberSource Corp.+ 55 302 Finova Group Inc. 117 300 SportsLine USA Inc.+ 35 300 Open Market Inc.+ 90 298 Actuant Corp. "A" 82 297 Westell Technologies Inc.+ 54 297 Pope & Talbot Inc. 19 296 Student Advantage Inc.+ 79 296 Neotopia Inc.+ 27 294 Medallion Financial Corp. 19 292 e.spire Communications Inc.+ 106 291 Warnaco Group Inc. "A" 109 286 - -------------------------------------------------------------------------------- page 36 iShares iShares Dow Jones U.S. Total Market Index Fund Schedule of Investments (continued) October 31, 2000 (Unaudited) Security Shares Value - --------------------------------------------------------------- COMMON STOCKS (continued) - --------------------------------------------------------------- 24/7 Media Inc.+ 55 $ 285 Ames Department Stores Inc.+ 71 280 Applica Inc.+ 55 278 Astec Industries Inc.+ 27 278 Hollywood Entertainment Corp.+ 90 276 CellStar Corp.+ 117 271 Labor Ready Inc.+ 90 270 Sangstat Medical Corp.+ 27 270 3Dfx Interactive Inc.+ 63 268 Wolverine Tube Inc.+ 19 259 Laser Vision Centers Inc.+ 63 256 Geoworks Corp.+ 52 255 EMS Technologies Inc.+ 16 254 Advanced Radio Telecom Corp.+ 63 248 Vans Inc.+ 19 246 Be Inc.+ 79 242 Osteotech Inc.+ 44 242 Jakks Pacific Inc.+ 27 238 ePlus Inc.+ 16 234 BSB Bancorp Inc. 16 232 CAIS Internet Inc.+ 55 232 Gliatech Inc.+ 36 232 Brooktrout Technology Inc.+ 16 231 Ventro Corporation+ 46 221 Elcom International Inc.+ 63 220 Juno Online Services Inc.+ 82 218 LTV Corp. 179 213 Mercator Software Inc.+ 46 210 Northfield Laboratories Inc.+ 19 210 Concord Communications Inc.+ 27 209 Marimba Inc.+ 35 208 SYNAVANT Inc.+ 45 205 Per-Se Technologies Inc.+ 46 203 PTEK Holdings Inc.+ 98 199 Superconductor Technologies Inc.+ 19 192 Clarus Corp.+ 19 190 Trans World Airlines Inc.+ 117 183 Armstrong Holdings Inc. 62 178 Epicor Software Corp.+ 82 161 QRS Corp.+ 19 160 Net Perceptions Inc.+ 43 142 Exchange Applications Inc.+ 43 138 Robotic Vision Systems Inc.+ 25 137 InterWorld Corp.+ 43 94 Federal-Mogul Corp. 25 81 Allied Riser Communications Corp.+ 25 80 Shares or Security Principal Value - --------------------------------------------------------------- ICG Communications Inc.+ 98 $ 43 Xceed Inc.+ 52 41 - --------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $30,627,662) 30,123,353 - --------------------------------------------------------------- REPURCHASE AGREEMENT - 0.07% - --------------------------------------------------------------- Investors Bank & Trust Tri Party Repurchase Agreement, dated 10/31/00, due 11/01/00, with a maturity value of $20,374 and an effective yield of 5.65%. $ 20,370 20,370 - --------------------------------------------------------------- TOTAL REPURCHASE AGREEMENT (Cost: $20,370) 20,370 - --------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 100.02% (Cost: $30,648,032) 30,143,723 - --------------------------------------------------------------- Other Assets, Less Liabilities -- (0.02%) (6,375) - --------------------------------------------------------------- NET ASSETS -- 100.00% $30,137,348 =============================================================== + Non-income earning securities. See notes to financial statements. - -------------------------------------------------------------------------------- iShares Schedules of Investments page 37 iShares Dow Jones U.S. Basic Materials Sector Index Fund Schedule of Investments October 31, 2000 (Unaudited) Security Shares Value - ------------------------------------------------------------- COMMON STOCKS - 100.01% - ------------------------------------------------------------- Du Pont (E.I.) de Nemours 40,097 $1,819,401 Alcoa Inc. 33,264 954,261 Dow Chemical Co. 26,093 799,098 International Paper Co. 18,603 681,335 Weyerhaeuser Co. 8,205 385,122 Air Products & Chemicals Inc. 8,802 328,425 Praxair Inc. 6,068 226,033 Union Carbide Corp. 5,176 222,568 Avery Dennison Corp. 4,279 216,089 Georgia-Pacific Corp. 6,540 175,763 Rohm & Haas Co. "A" 5,816 174,844 Ecolab Inc. 4,249 166,508 Phelps Dodge Corp. 3,017 141,045 Willamette Industries Inc. 3,693 134,102 Eastman Chemical Co. 2,963 127,039 Westvaco Corp. 3,893 110,951 Mead Corp. 3,720 107,648 Bowater Inc. 1,880 101,755 Engelhard Corp. 4,874 101,745 Nucor Corp. 2,882 99,969 Georgia-Pacific (Timber Group) 3,061 86,665 Sigma-Aldrich Corp. 2,423 86,622 Newmont Mining Corp. 5,814 78,852 Hercules Inc. 4,079 74,697 Boise Cascade Corp. 2,228 63,916 Cabot Corp. 2,568 56,496 Great Lakes Chemical Corp. 1,662 55,469 USX-U.S. Steel Group Inc. 3,421 54,522 Solutia Inc. 4,123 52,568 IMC Global Inc. 3,979 51,478 Cytec Industries Inc.+ 1,408 48,752 Lubrizol Corp. 2,072 44,937 Allegheny Technologies Inc. 2,144 43,416 Stillwater Mining Co.+ 1,483 43,007 OM Group Inc. 920 42,550 Millennium Chemicals Inc. 2,467 39,780 Cabot Microelectronics Corp.+ 889 39,283 AK Steel Holding Corp. 4,016 37,147 Rayonier Inc. 1,047 36,841 RPM Inc. 3,945 35,258 Crompton Corp. 4,403 35,224 Louisiana-Pacific Corp. 4,035 34,297 Homestake Mining Company+ 7,909 32,625 Olin Corp. 1,742 $ 30,921 Ferro Corp. 1,337 27,408 Lilly Industries Inc. "B" 877 26,310 Carpenter Technology Corp. 757 23,467 MacDermid Inc. 1,059 22,768 Wellman Inc. 1,227 18,405 Fuller (H. B.) Co. 541 18,293 Freeport-McMoRan Copper & Gold Inc.+ 2,283 18,121 Tredegar Corporation 927 17,671 Georgia Gulf Corp. 1,117 14,940 Meridian Gold Inc.+ 2,868 14,340 Bethlehem Steel Corp.+ 4,840 13,915 WD-40 Company 592 12,950 Wausau-Mosinee Paper Corp. 1,469 12,854 Schulman (A.) Inc. 1,162 12,709 Caraustar Industries Inc. 992 9,982 Grace (W.R.) & Company+ 2,605 9,932 Battle Mountain Gold Co.+ 6,380 8,772 Pope & Talbot Inc. 541 8,419 Cleveland-Cliffs Inc. 406 8,374 RTI International Metals Inc.+ 551 7,990 Calgon Carbon Corp. 1,333 7,831 Ryerson Tull Inc. 954 7,155 LTV Corp. 3,876 4,603 - ------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $8,953,438) 8,606,233 - ------------------------------------------------------------- REPURCHASE AGREEMENT - 0.04% - ------------------------------------------------------------- Investors Bank & Trust Tri Party Repurchase Agreement, dated 10/31/00, due 11/01/00, with a maturity value of $3,270 and an effective yield of 5.65%. $ 3,269 3,269 - ------------------------------------------------------------- TOTAL REPURCHASE AGREEMENT (Cost: $3,269) 3,269 - ------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 100.05% (Cost: $8,956,707) 8,609,502 - ------------------------------------------------------------- Other Assets, Less Liabilities -- (0.05%) (4,180) - ------------------------------------------------------------- NET ASSETS -- 100.00% $8,605,322 ============================================================= + Non-income earning securities. See notes to financial statements. - -------------------------------------------------------------------------------- page 38 iShares iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund Schedule of Investments October 31, 2000 (Unaudited) Security Shares Value - -------------------------------------------------------------- COMMON STOCKS - 99.98% - -------------------------------------------------------------- Wal-Mart Stores Inc. 27,439 $ 1,245,045 Home Depot Inc. 22,954 987,022 Time Warner Inc. 10,885 826,280 Walt Disney Co. (The) 20,657 739,779 Viacom Inc. "B"+ 12,635 718,616 Ford Motor Company 18,762 490,157 Walgreen Co. 10,018 457,071 AT&T - Liberty Media Group "A"+ 23,514 423,252 McDonald's Corp. 13,090 405,790 Comcast Corp. "A"+ 8,667 353,180 Clear Channel Communications Inc.+ 5,328 320,013 General Motors Corp. "A" 5,028 312,365 Cardinal Health Inc. 2,716 257,341 Target Corporation 9,042 249,785 CVS Corp. 3,868 204,762 Omnicom Group Inc. 1,772 163,467 Costco Wholesale Corp.+ 4,448 162,908 Lowe's Companies Inc. 3,498 159,815 Gannett Co. Inc. 2,622 152,076 Kohls Corp.+ 2,700 146,306 Harley-Davidson Inc. 3,008 144,948 Gap Inc. 5,584 144,137 Eastman Kodak Co. 3,051 136,914 Interpublic Group of Companies Inc. 2,990 128,383 Southwest Airlines Co. 4,416 125,856 McGraw-Hill Companies Inc. 1,939 124,460 RadioShack Corp. 1,852 110,426 Carnival Corp. "A" 4,398 109,125 Sears, Roebuck and Co. 3,487 103,669 Best Buy Co. Inc.+ 2,037 102,232 Limited Inc. 3,580 90,395 Delphi Automotive Systems Corp. 5,539 86,893 Amazon.com Inc.+ 2,362 86,508 Cox Communications Inc. "A"+ 1,941 85,525 May Department Stores Co. 3,148 82,635 Starbucks Corp.+ 1,830 81,778 TJX Companies Inc. 2,932 79,897 Marriott International Inc. 1,861 75,370 Bed Bath & Beyond Inc.+ 2,803 72,352 McKesson HBOC Inc. 2,448 68,697 Nike Inc. "B" 1,682 67,175 Federated Department Stores Inc.+ 2,048 66,688 NTL Inc.+ 1,497 65,774 Staples Inc.+ 4,525 64,481 Tiffany & Co. 1,457 $ 62,196 Electronic Arts Inc.+ 1,198 59,900 Delta Air Lines Inc. 1,205 56,936 Starwood Hotels & Resorts Worldwide Inc. 1,910 56,584 CDW Computer Centers Inc.+ 861 55,481 Cablevision Systems Corp.+ 728 54,236 Mattel Inc. 4,191 54,221 New York Times Co. "A" 1,437 52,810 Univision Communications Inc.+ 1,348 51,561 Johnson Controls Inc. 846 50,443 AMR Corp.+ 1,482 48,535 TMP Worldwide Inc.+ 685 47,682 Tribune Co. 1,169 43,326 Dollar General Corp. 2,787 43,198 TRW Inc. 1,024 43,008 Tricon Global Restaurants Inc.+ 1,433 42,990 Charter Communications Inc.+ 2,203 42,958 Echostar Communications Corp.+ 943 42,671 Knight Ridder Inc. 747 37,537 Toys R Us Inc.+ 2,147 36,902 USA Networks Inc.+ 1,771 35,863 Genuine Parts Co. 1,631 34,761 Scripps (E.W.) Company 592 34,595 Harrah's Entertainment Inc.+ 1,202 34,407 AutoZone Inc.+ 1,254 33,623 Family Dollar Stores Inc. 1,689 32,830 Dana Corp. 1,475 32,727 Hilton Hotels Corp. 3,419 32,480 Leggett & Platt Inc. 1,954 31,997 Readers Digest Association Inc. (The) "A" 857 31,441 Whirlpool Corp. 705 30,668 Park Place Entertainment Corp.+ 2,371 30,230 Harcourt General Inc. 527 29,538 Dow Jones & Co. Inc. 498 29,320 Goodyear Tire & Rubber Co. 1,545 28,582 Kmart Corp.+ 4,757 28,245 Darden Restaurants Inc. 1,217 27,382 Continental Airlines Inc. "B"+ 513 26,932 Circuit City Stores Inc. 2,022 26,791 Caremark Rx Inc.+ 2,103 26,287 Brinker International Inc.+ 646 25,355 Office Depot Inc.+ 3,029 25,179 US Airways Group Inc.+ 663 25,028 VF Corp. 902 24,636 Viacom Inc. "A"+ 428 24,503 Jones Apparel Group Inc.+ 875 24,336 - -------------------------------------------------------------------------------- iShares Schedules of Investments page 39 iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund Schedule of Investments (continued) October 31, 2000 (Unaudited) Security Shares Value - -------------------------------------------------------------- COMMON STOCKS (continued) - -------------------------------------------------------------- Fox Entertainment Group Inc.+ 1,122 $ 24,123 UnitedGlobalCom Inc. "A"+ 757 24,082 BJ's Wholesale Club Inc.+ 723 23,814 International Game Technology Inc.+ 642 23,513 Abercrombie & Fitch Co.+ 992 23,374 Penney (J.C.) Company Inc. 1,958 22,884 Dollar Tree Stores Inc.+ 583 22,810 Visteon Corp. 1,287 22,764 Maytag Corp. 774 22,156 Amerisource Health Corp. "A"+ 508 22,066 MGM Grand Inc. 629 21,740 AutoNation Inc.+ 3,203 21,620 Liz Claiborne Inc. 482 20,485 Hispanic Broadcasting Corp.+ 654 20,437 Herman Miller Inc. 777 20,299 Wendy's International Inc. 912 19,836 DoubleClick Inc.+ 1,207 19,614 Northwest Airlines Corp. "A"+ 685 19,522 UAL Corp. 510 19,348 Washington Post Company (The) "B" 36 19,229 Outback Steakhouse Inc.+ 672 19,152 Lamar Advertising Co.+ 374 17,952 Lear Corp.+ 652 17,767 Fastenal Co. 307 17,633 Belo (A.H.) Corp. 916 17,576 Primedia Inc.+ 1,546 17,489 Shaw Industries Inc. 924 17,152 Gentex Corp.+ 692 17,127 Royal Caribbean Cruises Ltd. 753 16,943 Sirius Satellite Radio Inc.+ 331 16,633 Hasbro Inc. 1,547 16,630 True North Communications Inc. 441 16,620 Venator Group Inc.+ 1,167 16,484 Brunswick Corp. 796 15,472 Lennar Corp. 479 15,388 Harman International Industries Inc. 315 15,120 Valassis Communications Inc.+ 538 14,930 Nordstrom Inc. 887 14,580 Mandalay Resort Group Inc.+ 694 14,444 Pixar Inc.+ 431 14,223 Pegasus Communications Corp.+ 395 14,047 Adelphia Communications Corp. "A"+ 414 13,740 SkyWest Inc. 267 13,484 Saks Inc.+ 1,308 13,325 Consolidated Stores Corp.+ 1,097 $ 13,027 Pier 1 Imports Inc. 969 12,839 Entercom Communications Corp.+ 322 12,618 Insight Enterprises Inc.+ 388 12,610 Chris-Craft Industries Inc.+ 167 12,274 Callaway Golf Co. 759 12,144 Six Flags Inc.+ 777 12,141 Linens 'N Things Inc.+ 388 11,931 ArvinMeritor Inc. 701 11,742 Zale Corp.+ 325 11,009 Scholastic Corp.+ 137 10,960 Ross Stores Inc. 819 10,801 Cheesecake Factory (The)+ 243 10,768 American Greetings Corp. "A" 592 10,767 Houghton Mifflin Co. 292 10,749 Mohawk Industries Inc.+ 492 10,732 Borders Group Inc.+ 772 10,712 Reebok International Ltd.+ 493 10,630 Pulte Corp. 307 10,227 CBRL Group Inc. 565 10,099 Hollinger International Inc. 648 10,004 D.R. Horton Inc. 538 9,953 Wiley (John) & Sons Inc. "A" 487 9,953 Comcast Corp.+ 243 9,750 Barnes & Noble Inc.+ 505 9,532 Meredith Corp. 300 9,525 Harte-Hanks Inc. 430 9,514 Anchor Gaming+ 112 9,513 Ethan Allen Interiors Inc. 324 9,477 Dillards Inc. "A" 900 9,450 Williams-Sonoma Inc.+ 445 9,262 Talbots Inc. (The) 117 9,250 American Eagle Outfitters Inc.+ 268 9,229 Jack in the Box Inc.+ 374 9,163 Borg-Warner Automotive Inc. 241 9,098 Cox Radio Inc. "A"+ 395 8,986 Claire's Stores Inc. 440 8,855 Emmis Communications Corp.+ 327 8,747 AnnTaylor Stores Corp.+ 281 8,430 Rite Aid Corp.+ 3,272 8,385 CEC Entertainment Inc.+ 262 8,351 Furniture Brands International Inc.+ 493 8,319 Polaris Industries Partners LP "A" 233 8,097 Priority Healthcare Corp. "B"+ 148 7,955 Michaels Stores Inc.+ 324 7,877 O'Reilly Automotive Inc.+ 437 7,866 - -------------------------------------------------------------------------------- page 40 iShares iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund Schedule of Investments (continued) October 31, 2000 (Unaudited) Security Shares Value - -------------------------------------------------------------- COMMON STOCKS (continued) - -------------------------------------------------------------- Valuevision International Inc. "A"+ 377 $ 7,634 Toll Brothers Inc.+ 227 7,378 Applebee's International Inc. 242 7,309 ADVO Inc.+ 198 7,289 Cooper Tire & Rubber Co. 653 7,142 Footstar Inc.+ 190 6,816 Alaska Air Group Inc.+ 258 6,692 Donnelley (R.H.) Co.+ 294 6,652 Kaufman & Broad Home Corp. 222 6,604 Bob Evans Farms Inc. 345 6,490 Superior Industries International Inc. 189 6,438 Pacific Sunwear of California Inc.+ 309 6,334 Sonic Corp.+ 171 6,242 Charming Shoppes Inc.+ 1,012 6,199 Atlantic Coast Airlines Holdings Inc.+ 170 6,077 Aztar Corp.+ 397 6,005 Bally Total Fitness Holding Corp.+ 237 5,910 Cost Plus Inc.+ 202 5,656 Tower Automotive Inc.+ 488 5,368 MascoTech Inc. 318 5,307 Rent-A-Center Inc.+ 181 5,283 Concord Camera Corp.+ 168 5,197 Pinnacle Entertainment Inc.+ 227 5,178 Unifi Inc.+ 581 5,047 Duane Reade Inc.+ 172 5,020 Stein Mart Inc.+ 318 4,929 Del Webb Corp.+ 179 4,811 Oakley Inc.+ 225 4,725 Longs Drug Stores Inc. 212 4,637 Kellwood Co. 236 4,587 Kenneth Cole Productions "A"+ 100 4,544 Petsmart Inc.+ 1,007 4,469 Modine Manufacturing Co. 167 4,405 International Speedway Corp. "A" 137 4,401 Papa John's International Inc.+ 175 4,397 Metro-Goldwyn-Mayer Inc.+ 222 4,371 Citadel Communications Corp.+ 360 4,365 Polaroid Corp. 421 4,236 Quiksilver Inc.+ 220 4,208 Fleetwood Enterprises Inc. 319 4,207 Sinclair Broadcast Group "A"+ 450 4,148 ACTV Inc.+ 407 4,006 IHOP Corp.+ 187 3,950 eToys Inc.+ 1,044 3,915 Nautica Enterprises Inc.+ 305 3,851 THQ Inc.+ 187 3,834 Wolverine World Wide Inc. 349 3,774 Genesco Inc.+ 210 3,727 Interface Inc. 407 3,714 Prime Hospitality Corp.+ 382 3,629 Station Casinos Inc.+ 225 3,628 Take-Two Interactive Software Inc.+ 282 3,507 Dress Barn Inc.+ 137 3,434 WMS Industries Inc.+ 154 3,427 Lands' End Inc.+ 132 3,386 Steelcase Inc. 192 3,384 Trans World Entertainment Corp.+ 387 3,290 Young Broadcasting Corp. "A"+ 132 3,275 Activision Inc.+ 237 3,274 Airtran Holdings Inc.+ 698 3,097 Sunglass Hut International Inc.+ 357 2,767 Stride Rite Corp. 512 2,752 American Classic Voyages Co.+ 194 2,680 OfficeMax Inc.+ 927 2,665 Children's Place Retail Stores Inc.+ 100 2,594 Pep Boys-Manny Moe & Jack Inc. 569 2,561 Ha-Lo Industries Inc.+ 632 2,449 Wink Communications Inc.+ 236 2,419 Phillips-Van Heusen Corporation 202 2,399 Ryan's Family Steak Houses Inc.+ 282 2,362 Cato Corp. "A" 189 2,268 Fossil Inc.+ 169 2,208 Champion Enterprises Inc.+ 566 2,193 Hearst-Argyle Television Inc.+ 119 2,135 Lone Star Steakhouse & Saloon Inc. 246 2,076 Guitar Center Inc.+ 156 2,067 Russell Corp. 127 2,032 Federal-Mogul Corp. 602 1,956 Vans Inc.+ 147 1,902 Tenneco Automotive Inc. 431 1,859 Shopko Stores Inc.+ 290 1,849 Winnebago Industries Inc. 156 1,794 Zomax Optical Media Inc.+ 292 1,770 24/7 Media Inc.+ 327 1,696 Jakks Pacific Inc.+ 190 1,674 Dura Automotive Systems Inc.+ 197 1,662 Finish Line Inc. (The)+ 202 1,540 Trans World Airlines Inc.+ 879 1,371 Warnaco Group Inc. "A" 430 1,129 Hollywood Entertainment Corp.+ 360 1,103 - -------------------------------------------------------------- iShares Schedules of Investments page 41 iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund Schedule of Investments (continued) October 31, 2000 (Unaudited) Shares or Security Principal Value - ---------------------------------------------------------------- COMMON STOCKS (continued) - ---------------------------------------------------------------- Modem Media Inc.+ 179 $ 1,052 Student Advantage Inc.+ 277 1,039 MP3.com Inc.+ 287 1,013 Ames Department Stores Inc.+ 241 949 Applica Inc.+ 177 896 - ---------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $15,209,365) 14,472,897 - ---------------------------------------------------------------- REPURCHASE AGREEMENT - 0.07% - ---------------------------------------------------------------- Investors Bank & Trust Tri Party Repurchase Agreement, dated 10/31/00, due 11/01/00, with a maturity value of $10,240 and an effective yield of 5.65%. $10,239 10,239 - ---------------------------------------------------------------- TOTAL REPURCHASE AGREEMENT (Cost: $10,239) 10,239 - ---------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 100.05% (Cost: $15,219,604) 14,483,136 - ---------------------------------------------------------------- Other Assets, Less Liabilities -- (0.05%) (7,834) - ---------------------------------------------------------------- NET ASSETS -- 100.00% $14,475,302 ================================================================ + Non-income earning securities. See notes to financial statements. - -------------------------------------------------------------------------------- page 42 iShares iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund Schedule of Investments October 31, 2000 (Unaudited) Security Shares Value - ------------------------------------------------------------------------------ COMMON STOCKS - 99.95% - ------------------------------------------------------------------------------ Coca-Cola Co. 32,303 $ 1,950,295 America Online Inc.+ 35,088 1,769,488 Procter & Gamble Co. 18,777 1,341,382 Philip Morris Companies Inc. 34,227 1,253,564 PepsiCo Inc. 21,936 1,062,525 Anheuser-Busch Companies Inc. 13,766 629,794 Kimberly-Clark Corp. 8,183 540,078 Gillette Co. 14,553 507,536 Colgate-Palmolive Co. 8,075 474,487 Safeway Inc.+ 7,553 413,055 Yahoo! Inc.+ 5,105 299,281 Sara Lee Corp. 13,246 285,617 Kroger Co.+ 12,547 283,092 Sysco Corp. 5,078 265,008 Heinz (H.J.) Co. 5,302 222,353 General Mills Inc. 4,330 180,777 Avon Products Inc. 3,599 174,551 ConAgra Inc. 8,095 173,031 Quaker Oats Co. 2,007 163,696 Albertson's Inc. 5,987 141,817 Cendant Corp.+ 11,021 132,252 Nabisco Group Holdings Corp. "A" 4,472 129,129 eBay Inc.+ 2,286 117,729 Clorox Co. 2,637 117,676 Ralston Purina Co. 4,655 112,884 Fort James Corp. 3,101 102,139 Campbell Soup Co. 3,367 98,485 Archer-Daniels-Midland Co. 8,789 96,679 Kellogg Co. 3,424 86,884 Wrigley (William Jr.) Co. 1,094 86,631 Hershey Foods Corp. 1,431 77,721 Newell Rubbermaid Inc. 4,045 77,613 Fortune Brands Inc. 2,382 70,120 UST Inc. 2,462 62,166 Coca-Cola Enterprises Inc. 3,364 61,813 InfoSpace.com Inc.+ 3,031 60,999 T.J. Reynolds Tobacco Holdings Inc. 1,570 56,128 Keebler Foods Co. 1,283 51,962 Estee Lauder Companies Inc. "A" 1,080 50,153 Pepsi Bottling Group Inc. 1,410 48,821 H & R Block, Inc. 1,293 46,144 Apollo Group Inc.+ 1,131 44,250 At Home Corp. "A"+ 4,070 41,972 Winn-Dixie Stores Inc. 2,157 41,522 Coors (Adolf) Company "B" 551 35,092 DeVry Inc.+ 919 33,946 Super Value Inc. 2,023 31,104 IBP Inc. 1,437 29,548 Energizer Holdings Inc.+ 1,466 28,953 Brown-Forman Corp. "B" 474 28,855 Delhaize America Inc. "A" 1,622 27,574 Hormel Foods Corp. 1,622 27,270 McCormick & Co. Inc. 828 26,237 Whitman Corp. 2,012 26,156 Flowers Industries Inc. 1,551 23,847 Smithfield Foods Inc.+ 730 20,942 Tyson Foods Inc. "A" 1,849 20,686 International Flavors & Fragrances Inc. 1,192 19,966 Suiza Foods Corp.+ 416 19,266 Whole Foods Market Inc.+ 399 18,454 Sotheby's Holdings Inc. 630 17,128 Hain Celestial Group Inc.+ 418 16,589 Alberto-Culver Co. "B" 491 16,479 Dean Foods Co. 501 16,032 Pre-Paid Legal Services Inc.+ 359 15,751 Tupperware Corp. 913 15,635 Dial Corp. 1,327 14,846 Scotts Co. (The) "A"+ 411 14,693 Lancaster Colony Corp. 582 13,750 Krispy Kreme Doughnuts Inc.+ 139 13,700 Corn Products International Inc. 523 13,140 Interstate Bakeries Corp. 935 13,090 Blyth Industries Inc. 500 13,000 EarthLink Inc.+ 1,955 12,769 Earthgrains Company (The) 627 12,697 Universal Corporation 422 11,816 Avis Rent A Car Inc.+ 388 11,591 Constellation Brands Inc.+ 230 11,212 GoTo.com Inc.+ 726 10,300 Learning Tree International Inc.+ 210 9,503 Service Corp. International+ 4,065 9,400 Sylvan Learning Systems Inc.+ 589 9,093 Casey's General Store Inc. 685 8,562 Delhaize America Inc. "B" 501 8,392 Fleming Companies Inc. 588 8,342 Performance Food Group Co.+ 200 8,100 Ticketmaster Online-CitySearch Inc. "B"+ 505 8,080 Regis Corp. 531 8,031 Valence Technology Inc.+ 476 6,634 Dole Food Co. 523 6,309 - ------------------------------------------------------------------------------ iShares Schedules of Investments page 43 iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund Schedule of Investments (continued) October 31, 2000 (Unaudited) Shares or Security Principal Value - ---------------------------------------------------------------- COMMON STOCKS (continued) - ---------------------------------------------------------------- Ralcorp Holdings Inc.+ 446 $ 6,272 About.com Inc.+ 258 6,192 Michael Foods Inc. 228 6,142 Priceline.com Inc.+ 1,064 6,118 LookSmart Ltd.+ 839 5,925 StarMedia Network Inc.+ 933 5,715 Robert Mondavi Corp. (The) "A"+ 120 5,430 American Italian Pasta Co.+ 264 5,297 NBTY Inc.+ 814 5,291 Ask Jeeves Inc.+ 357 4,641 International Multifoods Corp. 272 4,607 Triarc Companies Inc.+ 173 4,314 Dreyer's Grand Ice Cream Inc. 167 4,112 Cheap Tickets Inc.+ 376 3,995 Springs Industries Inc. "A" 157 3,699 Stewart Enterprises Inc. "A" 1,596 3,392 Westpoint Stevens Inc. 469 3,371 NBC Internet Inc. "A"+ 412 2,549 Great Atlantic & Pacific Tea Co. 253 2,530 Stamps.com Inc.+ 610 2,402 SportsLine USA Inc.+ 274 2,346 Wild Oats Markets Inc.+ 337 2,127 CPI Corp. 102 2,059 High Speed Access Corp.+ 416 1,222 Juno Online Services Inc.+ 309 821 - ---------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $14,146,779) 14,876,428 - ---------------------------------------------------------------- REPURCHASE AGREEMENT - 0.03% - ---------------------------------------------------------------- Investors Bank & Trust Tri Party Repurchase Agreement, dated 10/31/00, due 11/01/00, with a maturity value of $5,187 and an effective yield of 5.65%. $ 5,186 5,186 - ---------------------------------------------------------------- TOTAL REPURCHASE AGREEMENT (Cost: $5,186) 5,186 - ---------------------------------------------------------------- Security Value - ---------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 99.98% (Cost: $14,151,965) $14,881,614 - ---------------------------------------------------------------- Other Assets, Less Liabilities -- 0.02% 2,743 - ---------------------------------------------------------------- NET ASSETS -- 100.00% $14,884,357 ================================================================ + Non-income earning securities. See notes to financial statements. - -------------------------------------------------------------------------------- Page 44 iShares iShares Dow Jones U.S. Energy Sector Index Fund Schedule of Investments October 31, 2000 (Unaudited) Security Shares Value - --------------------------------------------------------------- COMMON STOCKS - 100.02% - --------------------------------------------------------------- Exxon Mobil Corp. 103,698 $ 9,248,565 Chevron Corp. 47,967 3,939,290 Texaco Inc. 41,298 2,439,163 Schlumberger Ltd. 31,878 2,426,713 Phillips Petroleum Co. 18,642 1,151,143 Williams Companies Inc. 25,262 1,056,267 Halliburton Co. 27,206 1,008,322 Anadarko Petroleum Corp. 14,624 936,667 Conoco Inc. 34,038 925,408 Murphy Oil Corp. 14,634 847,857 El Paso Energy Corp. 12,544 786,352 Burlington Resources Inc. 19,560 704,160 Coastal Corp. 9,242 697,193 USX-Marathon Group Inc. 22,726 617,863 Baker Hughes Inc. 17,234 592,419 Unocal Corp. 17,126 584,425 Transocean Sedco Forex Inc. 11,006 583,318 Occidental Petroleum Corp. 28,689 570,194 Kerr-McGee Corp. 7,654 499,902 Nabors Industries Inc.+ 9,604 488,844 Apache Corp. 8,194 453,231 Tidewater Inc. 9,282 428,712 Helmerich & Payne Inc. 12,658 397,936 Devon Energy Corp. 7,616 383,846 Amerada Hess Corp. 5,674 351,788 Conoco Inc. "B" 12,776 329,781 EOG Resources Inc. 8,052 317,048 Tosco Corp. 10,834 310,123 Ashland Inc. 9,108 298,287 Noble Drilling Corp.+ 6,822 283,539 Sunoco Inc. 8,942 267,701 Grant Prideco Inc.+ 14,207 263,717 Diamond Offshore Drilling Inc. 7,482 258,597 Santa Fe International Corp. 6,642 242,433 ENSCO International Inc. 7,196 239,267 Cooper Cameron Corp.+ 4,380 238,710 Evergreen Resources Inc.+ 7,992 219,780 Noble Affiliates Inc. 5,764 211,467 Stone Energy Corp.+ 3,724 190,669 Newfield Exploration Co.+ 4,548 171,687 Smith International Inc.+ 2,326 163,983 BJ Services Co.+ 3,016 158,152 Kinder Morgan Inc. 3,886 149,854 Lone Star Technologies Inc.+ 3,424 137,474 Weatherford International Inc.+ 3,722 135,853 Tom Brown Inc.+ 5,928 135,603 National-Oilwell Inc.+ 4,500 131,625 Shares or Security Principal Value - ---------------------------------------------------------------- Global Marine Inc.+ 4,602 $ 121,953 Hanover Compressor Co.+ 3,582 116,863 Ultramar Diamond Shamrock Corp. 4,154 109,042 Ocean Energy Inc.+ 7,509 104,187 Louis Dreyfus Natural Gas Corp.+ 3,224 103,370 Barrett Resources Corp.+ 2,764 100,540 Veritas DGC Inc.+ 3,000 90,000 Basin Exploration Inc.+ 4,408 87,333 Cabot Oil & Gas Corp. "A" 3,422 67,157 Valero Energy Corp. 1,962 64,869 Varco International Inc.+ 3,372 58,167 Seacor Smit Inc.+ 1,154 48,324 Vintage Petroleum Inc. 2,208 46,644 Maverick Tube Corp.+ 2,862 44,540 Patterson Energy Inc.+ 1,384 38,925 Atwood Oceanics Inc.+ 1,066 35,778 Forest Oil Corp.+ 2,529 34,932 Global Industries Ltd.+ 2,663 27,961 Rowan Companies Inc.+ 986 24,835 Western Gas Resources Inc. 1,112 24,395 Marine Drilling Co. Inc.+ 1,020 24,352 Oceaneering International Inc.+ 1,359 19,111 R&B Falcon Corporation+ 692 17,300 Core Laboratories NV+ 692 14,921 Pennzoil-Quaker State Co. 667 7,837 Input/Output Inc.+ 893 7,535 - ---------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $39,608,862) 38,415,799 - ---------------------------------------------------------------- REPURCHASE AGREEMENT - 0.03% - ---------------------------------------------------------------- Investors Bank & Trust Tri Party Repurchase Agreement, dated 10/31/00, due 11/01/00, with a maturity value of $12,597 and an effective yield of 5.65%. $ 12,595 12,595 - ---------------------------------------------------------------- TOTAL REPURCHASE AGREEMENT (Cost: $12,595) 12,595 - ---------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 100.05% (Cost: $39,621,457) 38,428,394 - ---------------------------------------------------------------- Other Assets, Less Liabilities -- (0.05%) (18,986) - ---------------------------------------------------------------- NET ASSETS -- 100.00% $38,409,408 ================================================================ + Non-income earning securities. See notes to financial statements. - -------------------------------------------------------------------------------- iShares Schedules of Investments page 45 iShares Dow Jones U.S. Financial Sector Index Fund Schedule of Investments October 31, 2000 (Unaudited) Security Shares Value - ---------------------------------------------------------------- COMMON STOCKS - 99.91% - ---------------------------------------------------------------- Citigroup Inc. 257,066 $ 13,528,098 American International Group Inc. 114,169 11,188,562 Morgan Stanley Dean Witter & Co. 64,683 5,194,853 Wells Fargo & Company 97,790 4,528,899 Bank of America Corp. 93,891 4,512,636 Fannie Mae 58,262 4,486,174 American Express Co. 67,447 4,046,820 Chase Manhattan Corp. 74,456 3,387,748 Merrill Lynch & Co. Inc. 41,219 2,885,330 Bank of New York Co. Inc. 42,152 2,426,375 Bank One Corp. 66,044 2,410,606 Freddie Mac 39,819 2,389,140 Schwab (Charles) Corp. 61,329 2,154,181 Marsh & McLennan Companies Inc. 15,507 2,027,540 FleetBoston Financial Corp. 51,572 1,959,736 First Union Corp. 56,292 1,706,351 Allstate Corp. 41,963 1,689,011 MBNA Corp. 42,704 1,604,069 Associates First Capital Corp. 41,632 1,545,588 Morgan (J.P.) & Co. Inc. 9,084 1,503,402 Household International Inc. 27,036 1,360,249 Washington Mutual Inc. 30,798 1,355,112 Mellon Financial Corp. 27,902 1,346,271 AXA Financial Inc. 24,698 1,335,236 Fifth Third Bancorp 24,947 1,281,652 MetLife Inc.+ 44,289 1,223,484 American General Corp. 14,433 1,161,856 State Street Corp. 9,208 1,148,606 AFLAC Inc. 15,169 1,108,285 PNC Bank Corp. 16,562 1,107,584 Firstar Corp. 54,766 1,078,206 US Bancorp Inc. 42,628 1,031,065 Northern Trust Corp. 11,890 1,015,109 Hartford Financial Services Group Inc. 12,282 914,241 Lehman Brothers Holdings Inc. 13,868 894,486 Providian Financial Corp. 8,158 848,432 Chubb Corp. 9,981 842,771 Goldman Sachs Group Inc. (The) 8,301 828,544 BB&T Corp. 22,849 728,312 SunTrust Banks Inc. 14,688 716,958 Capital One Financial Corp. 11,184 705,990 National City Corp. 30,008 641,421 St. Paul Companies Inc. 12,358 633,348 Wachovia Corp. 11,618 627,372 KeyCorp 24,599 $ 607,288 Stilwell Financial Inc. 12,835 575,168 Hancock (John) Financial Services Inc.+ 18,009 569,535 Comerica Inc. 8,933 538,772 AON Corp. 12,778 529,488 Lincoln National Corp. 10,325 499,472 USA Education Inc. 8,865 495,332 Equity Office Properties Trust 16,168 487,061 Franklin Resources Inc. 10,353 443,523 Paine Webber Group Inc. 5,870 418,237 MBIA Inc. 5,628 409,085 Jefferson-Pilot Corp. 5,896 405,350 Golden West Financial Corp. 6,790 380,664 Summit Bancorp 10,048 376,800 Bear Stearns Companies Inc. 6,148 372,723 MGIC Investment Corp. 5,387 366,989 Loews Corp. 3,886 353,383 UNUMProvident Corp. 12,068 340,921 Progressive Corporation 3,403 334,345 Equity Residential Properties Trust 7,049 331,744 Price (T. Rowe) Associates 6,898 322,913 Ambac Financial Group Inc. 3,999 319,170 AmSouth Bancorp 22,452 312,923 SouthTrust Corp. 9,602 310,865 Regions Financial Corp. 12,538 295,427 Charter One Financial Inc. 12,033 276,007 Cincinnati Financial Corp. 7,498 275,551 Zions Bancorp 4,722 271,220 Synovus Financial Corp. 12,341 266,103 Union Planters Corp. 7,696 260,221 National Commerce Bancorp 11,582 246,118 Torchmark Corp. 7,287 242,748 Countrywide Credit Industries Inc. 6,481 242,632 Edwards (A.G.) Inc. 4,710 239,032 M&T Bank Corp. 4,682 235,036 Marshall & Ilsley Corp. 4,969 225,158 Old Kent Financial Corp. 7,821 216,544 Knight Trading Group Inc.+ 7,010 209,862 Spieker Properties Inc. 3,747 207,490 North Fork Bancorp 9,965 201,168 Prologis Trust 9,386 197,106 CIT Group Inc. (The) 10,986 191,568 Allmerica Financial Corp. 3,032 191,205 Huntington Bancshares Inc. 13,108 188,428 PMI Group Inc. (The) 2,524 186,461 TCF Financial Corp. 4,595 185,810 - -------------------------------------------------------------------------------- page 46 iShares iShares Dow Jones U.S. Financial Sector Index Fund Schedule of Investments (continued) October 31, 2000 (Unaudited) Security Shares Value - ---------------------------------------------------------------- COMMON STOCKS (continued) - ---------------------------------------------------------------- E*trade Group Inc.+ 12,627 $ 183,881 Donaldson, Lufkin & Jenrette Inc. 2,044 183,577 SAFECO Corp. 7,298 176,520 SEI Investment Co. 1,941 176,146 AvalonBay Communities Inc. 3,815 175,252 Old Republic International Corp. 6,708 174,408 Vornado Realty Trust 4,960 172,670 First Tennessee National Corp. 7,409 170,407 Dime Bancorp Inc. 6,937 169,523 Simon Property Group Inc. 7,471 166,697 Apartment Investment & Management Co. "A" 3,611 164,978 Legg Mason Inc. 3,168 164,538 Archstone Communities Trust 6,979 164,443 Duke-Weeks Realty Corp. 6,843 162,094 Everest Re Group Ltd. 2,616 153,363 Radian Group Inc. 2,153 152,594 Mercantile Bankshares Corp. 4,026 151,478 Homestore.com Inc.+ 4,438 150,892 Federated Investors Inc. "B" 5,157 150,198 Greenpoint Financial Corp. 5,022 149,404 Bisys Group Inc.+ 3,170 149,386 Kimco Realty Corp. 3,507 141,157 Gallagher (Arthur J.) & Co. 2,178 137,486 Conseco Inc. 18,625 129,211 Silicon Valley Bancshares+ 2,749 127,141 Crescent Real Estate Equities Co. 6,300 126,788 Compass Bancshares Inc. 6,934 126,112 Boston Properties Inc. 2,966 120,123 Hudson City Bancorp Inc. 6,529 118,746 AmeriCredit Corp.+ 4,337 116,557 FirstMerit Corp. 5,056 115,340 CarrAmerica Realty Corp. 3,826 113,106 Metris Companies Inc. 3,479 112,633 Public Storage Inc. 4,952 111,420 Astoria Financial Corp. 2,933 109,987 First Virginia Banks Inc. 2,636 109,065 Hibernia Corp. "A" 9,109 108,739 Sovereign Bancorp Inc. 12,942 107,580 AMB Property Corp. 4,555 107,042 Commerce Bancorp Inc. 1,748 105,863 Commerce Bancshares Inc. 2,932 105,369 Bank United Corp. "A" 1,852 104,985 Liberty Property Trust 3,852 101,837 Investors Financial Services Corp. 1,388 99,502 St. Joe Company (The) 4,863 $ 98,172 Wilmington Trust Corp. 1,846 97,146 Host Marriott Corp. 8,882 94,371 Rouse Co. 3,790 93,566 Cullen/Frost Bankers Inc. 2,752 91,676 Old National Bancorp 3,053 90,063 Allied Capital Corp. 4,337 89,451 Ameritrade Holding Corp. "A"+ 6,050 88,481 Centura Banks Inc. 2,277 87,522 Golden State Bancorp Inc. 3,338 87,205 Arden Realty Inc. 3,626 87,024 Associated Bancorp 3,563 85,735 Health Care Property Investors Inc. 2,918 85,716 Protective Life Corp. 3,696 85,470 Eaton Vance Corp. 1,685 83,934 General Growth Properties Inc. 2,796 82,482 Raymond James Financial Corp. 2,409 81,454 City National Corp. 2,320 79,750 IndyMac Mortgage Holdings Inc.+ 3,697 77,175 Roslyn Bancorp Inc. 3,515 76,232 Waddell & Reed Financial Inc. "A" 2,391 76,213 BRE Properties Inc. 2,402 75,963 Westamerica Bancorp 2,097 75,361 Fidelity National Financial Inc. 3,054 75,014 StanCorp Financial Group Inc. 1,826 74,410 Post Properties Inc. 2,125 74,242 Webster Financial Corp. 3,033 73,929 Highwoods Properties Inc. 3,411 73,763 Transatlantic Holdings Inc. 792 73,557 Mack-Cali Realty Corp. 2,703 73,319 Cousins Properties Inc. 2,788 72,488 Hospitality Properties Trust 3,234 69,733 First Industrial Realty Trust 2,212 68,296 UnionBanCal Corporation 3,235 67,935 RenaissanceRe Holdings Ltd. 935 67,846 Affiliated Managers Group Inc.+ 1,113 66,919 Nationwide Financial Services Inc. 1,369 66,568 Washington Federal Inc. 2,983 66,558 Greater Bay Bancorp 2,038 66,362 HSB Group Inc. 1,657 65,555 Camden Property Trust 2,183 62,488 New Plan Excel Realty Trust 5,036 62,006 Hudson United Bancorp 2,766 61,889 Downey Financial Corp. 1,282 61,215 Markel Corp.+ 420 60,848 Trustmark Corp. 3,106 59,014 - -------------------------------------------------------------------------------- iShares Schedules of Investments page 47 iShares Dow Jones U.S. Financial Sector Index Fund Schedule of Investments (continued) October 31, 2000 (Unaudited) Security Shares Value - ---------------------------------------------------------------- COMMON STOCKS (continued) - ---------------------------------------------------------------- First American Financial Corp. 2,799 $ 58,604 Citizens Banking Corp. 2,453 58,412 Reckson Associates Realty Corp. 2,576 58,282 Imperial Bancorp+ 2,387 58,034 Pacific Century Financial Corp. 4,564 57,906 Commercial Federal Corp. 3,234 56,595 Colonial BancGroup Inc. 6,347 55,933 Mercury General Corp. 1,491 54,608 Southwest Bancorp of Texas Inc.+ 1,488 54,312 Provident Financial Group Inc. 1,790 54,148 Prentiss Properties Trust 2,076 52,679 First Midwest Bancorp Inc. 2,053 51,453 FelCor Lodging Trust Inc. 2,310 50,676 Leucadia National Corp. 2,036 50,646 Independence Community Bank Corp. 3,431 50,393 Meristar Hospitality Corp. 2,626 50,222 Berkley (W.R.) Corp. 1,464 49,867 CNA Financial Corp.+ 1,362 49,713 HRPT Properties Trust 7,564 48,693 Unitrin Inc. 1,516 47,091 HCC Insurance Holdings Inc. 2,422 46,169 Healthcare Realty Trust 2,290 45,657 Community First Bankshares Inc. 2,889 44,779 Storage USA Inc. 1,580 44,141 Reinsurance Group of America Inc. 1,181 44,140 Doral Financial Corp. 2,439 43,597 Federal Realty Investment Trust 2,246 43,235 Mutual Risk Management Ltd. 2,348 42,558 Security Capital Group "B"+ 2,153 41,042 Phoenix Investment Partners Ltd. 2,548 39,813 Nationwide Health Properties Inc. 2,660 39,734 Chittenden Corp. 1,492 39,631 Horace Mann Educators Corp. 2,356 39,610 Kilroy Realty Corp. 1,510 39,354 Macerich Co. (The) 1,950 38,269 Sl Green Realty Corp. 1,392 37,323 Staten Island Bancorp Inc. 1,906 36,810 American Financial Group Inc. 1,712 36,701 iStar Financial Inc. 1,810 36,200 Shurgard Storage Centers Inc. 1,590 36,073 Trenwick Group Ltd. 1,816 35,639 Jeffries Group Inc. 1,302 35,479 Developers Diversified Realty Corp. 2,931 34,989 Richmond County Financial Corp. 1,481 34,804 BancWest Corporation 1,644 $ 33,599 National Discounts Brokers Group Inc.+ 659 32,085 American Capital Strategies Ltd. 1,409 31,086 MAF Bancorp Inc. 1,276 30,624 CBL & Associates Properties Inc. 1,291 29,854 Brandywine Realty Trust 1,550 29,644 People's Bank 1,463 29,626 Provident Bankshares Corp. 1,553 29,410 LNR Property Corp. 1,357 29,345 Chelsea GCA Realty Inc. 909 29,315 Health Care Inc. 1,631 28,848 Home Properties of NY Inc. 1,057 28,737 Queens County Bancorp Inc. 1,022 28,616 CompuCredit Corp.+ 917 28,312 Manufactured Home Communities Inc. 1,123 27,935 AMCORE Financial Inc. 1,419 27,848 Fairfield Communities Inc.+ 2,056 26,086 Sterling Bancshares Inc. 1,516 26,056 Selective Insurance Group Inc. 1,510 26,048 Southwest Securities Group Inc. 906 25,595 South Financial Group Inc. (The) 2,492 25,387 Presidential Life Corp. 1,735 25,266 Ohio Casualty Corp. 3,000 25,219 FirstFed Financial Corp.+ 956 24,378 Enhance Financial Services Group Inc. 2,019 23,471 Glenborough Realty Trust Inc. 1,459 23,435 Mills Corp. 1,370 23,376 Meditrust Corp.+ 8,231 22,635 Texas Regional Bancshares "A" 753 22,496 East West Bancorp Inc. 1,099 20,812 NextCard Inc.+ 2,696 20,557 Anchor Bancorp Wisconsin Inc. 1,303 20,115 Republic Bancorp Inc. 2,078 19,741 Republic Security Financial Corp. 2,904 19,693 UCBH Holdings Inc. 533 19,388 GBC Bancorp 599 19,093 AmerUs Group Co. 720 18,990 RFS Hotel Investors Inc. 1,418 18,257 First Sentinel Bancorp Inc. 1,888 17,523 Koger Equity Inc. 1,075 17,133 JDN Realty Corp. 1,549 16,942 Harbor Florida Bancshares Inc. 1,330 16,292 Capital Automotive 1,233 15,894 Colonial Properties Trust 575 14,123 E.W. Blanch Holdings Inc. 745 14,062 Bay View Capital Corp. 1,714 13,926 - -------------------------------------------------------------------------------- page 48 iShares iShares Dow Jones U.S. Financial Sector Index Fund Schedule of Investments (continued) October 31, 2000 (Unaudited) Shares or Security Principal Value - ----------------------------------------------------------------- COMMON STOCKS (continued) - ----------------------------------------------------------------- Fremont General Corp. 3,710 $ 13,449 Net.B@nk Inc.+ 1,546 13,431 Equity Inns Inc. 2,155 13,334 Haven Bancorp Inc. 460 13,167 PFF Bancorp Inc. 695 12,858 OceanFirst Financial Corp. 606 12,688 Pacific Northwest Bancorp 939 12,559 Ocwen Financial Corp.+ 2,126 12,490 Medallion Financial Corp. 802 12,331 Dime Community Bancshares 529 11,737 Burnham Pacific Properties Inc. 1,916 10,418 BSB Bancorp Inc. 594 8,613 Finova Group Inc. 3,154 8,082 - ----------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $109,803,496) 127,190,753 - ----------------------------------------------------------------- SHORT TERM INSTRUMENTS - 0.71% - ----------------------------------------------------------------- Freddie Mac Discount Note 6.40%, 11/21/00++ $136,122 136,122 Goldman Sachs Financial Square Prime Obligation Fund++ 151,878 151,878 Providian Temp Cash Money Market Fund++ 167,200 167,200 Short Term Investment Company Liquid Assets Portfolio++ 455,999 455,999 - ----------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $911,199) 911,199 - ----------------------------------------------------------------- REPURCHASE AGREEMENT - 0.05% - ----------------------------------------------------------------- Investors Bank & Trust Tri Party Repurchase Agreement, dated 10/31/00, due 11/01/00, with a maturity value of $58,471 and an effective yield of 5.65%. 58,462 58,462 - ----------------------------------------------------------------- TOTAL REPURCHASE AGREEMENT (Cost: $58,462) 58,462 - ----------------------------------------------------------------- Security Value - ----------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 100.67% (Cost: $110,773,157) $128,160,414 - ----------------------------------------------------------------- Other Assets, Less Liabilities -- (0.67%) (851,895) - ----------------------------------------------------------------- NET ASSETS -- 100.00% $127,308,519 ================================================================= + 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 49 iShares Dow Jones U.S. Healthcare Sector Index Fund Schedule of Investments October 31, 2000 (Unaudited) Security Shares Value - --------------------------------------------------------------- COMMON STOCKS - 99.99% - --------------------------------------------------------------- Pfizer Inc. 124,845 $ 5,391,742 Merck & Co. Inc. 45,630 4,103,848 Johnson & Johnson 26,092 2,403,726 Bristol-Myers Squibb Co. 38,996 2,376,319 Lilly (Eli) and Company 19,059 1,703,398 American Home Products Corp. 25,865 1,642,427 Abbott Laboratories 28,709 1,516,194 Schering-Plough Corp. 29,064 1,502,246 Pharmacia & Upjohn Inc. 25,194 1,385,670 Medtronic Inc. 23,786 1,291,877 Amgen Inc.+ 20,381 1,180,824 PE Corp. (Biosystems Group) 4,139 484,263 Baxter International Inc. 5,803 476,934 HCA - The Healthcare Company 9,916 396,020 CIGNA Corp. 3,121 380,606 UnitedHealth Group Inc. 3,183 348,141 Guidant Corp.+ 6,099 322,866 MedImmune Inc.+ 3,922 256,401 Tenet Healthcare Corp. 6,273 246,607 Millennium Pharmaceuticals Inc.+ 3,240 235,103 Forest Laboratories Inc. "A"+ 1,728 228,960 Allergan Inc. 2,570 216,041 ALZA Corp.+ 2,304 186,480 Immunex Corp.+ 4,299 182,976 Biogen Inc.+ 2,986 179,720 IDEC Pharmaceuticals Corp.+ 878 172,198 Becton Dickinson & Co. 5,014 167,969 Human Genome Sciences Inc.+ 1,898 167,765 Aetna Inc. 2,798 161,759 King Pharmaceuticals Inc.+ 3,092 138,560 Wellpoint Health Networks Inc.+ 1,157 135,297 Watson Pharmaceutical Inc.+ 2,034 127,252 Stryker Corp. 2,620 123,468 Biomet Inc. 3,274 118,478 IVAX Corporation+ 2,674 116,319 Genzyme General+ 1,588 112,748 Abgenix Inc.+ 1,414 111,529 Protein Design Labs Inc.+ 772 104,280 Vertex Pharmaceuticals Inc.+ 1,067 99,348 Sepracor Inc.+ 1,451 98,849 Health Management Associates Inc. "A"+ 4,828 95,655 Healthsouth Corp.+ 7,629 91,548 Medarex Inc.+ 1,440 88,020 Quest Diagnostics Inc.+ 899 86,529 St. Jude Medical Inc.+ 1,573 86,515 Chiron Corp.+ 1,990 $ 86,192 Gilead Sciences Inc.+ 929 79,894 Celgene Corp.+ 1,211 77,958 Mylan Laboratories Inc. 2,464 68,992 Minimed Inc.+ 934 68,124 Andrx Group+ 942 67,824 Boston Scientific Corp.+ 4,101 65,360 Imclone Systems Inc.+ 1,184 64,750 ICN Pharmaceuticals Inc. 1,574 59,910 Enzon Inc.+ 799 56,929 COR Therapeutics Inc.+ 993 56,104 Invitrogen Corp.+ 727 55,297 Trigon Healthcare Inc.+ 741 53,120 Sybron International Corp.+ 2,080 51,480 Express Scripts Inc. "A"+ 759 50,995 Myriad Genetics Inc.+ 407 48,840 Incyte Pharmaceuticals Inc.+ 1,269 46,477 Lincare Holdings Inc.+ 1,059 44,544 Oxford Health Plans Inc.+ 1,299 43,841 Cytyc Corp.+ 722 42,869 Bard (C.R.) Inc. 1,009 42,252 ICOS Corp.+ 821 42,179 Affymetrix Inc.+ 760 42,085 Medicis Pharmaceutical Corp. "A"+ 569 41,893 Universal Health Services Inc. "B"+ 490 41,099 Beckman Coulter Inc. 582 40,776 Techne Corp.+ 360 40,590 Alkermes Inc.+ 1,072 39,731 Cephalon Inc.+ 739 39,629 Patterson Dental Co.+ 1,264 39,579 Inhale Therapeutic Systems Inc.+ 777 38,656 Hillenbrand Industries Inc. 826 38,202 Bausch & Lomb Inc. 983 37,907 CuraGen Corp.+ 584 37,741 OSI Pharmaceuticals Inc.+ 520 37,440 Humana Inc.+ 2,768 33,562 Cell Therapeutics Inc.+ 491 32,843 Omnicare Inc. 1,843 32,252 Dentsply International Inc. 894 31,011 Dura Pharmaceuticals Inc.+ 887 30,546 Quintiles Transnational Corp.+ 2,181 30,398 Orthodontic Centers of America+ 826 27,568 Manor Care Inc.+ 1,607 26,817 VISX Inc.+ 1,201 25,746 Alexion Pharmaceuticals Inc.+ 244 25,223 Barr Laboratories Inc.+ 387 24,429 Advance Paradigm Inc.+ 494 24,144 - -------------------------------------------------------------------------------- page 50 iShares iShares Dow Jones U.S. Healthcare Sector Index Fund Schedule of Investments (continued) October 31, 2000 (Unaudited) Security Shares Value - --------------------------------------------------------------- COMMON STOCKS (continued) - --------------------------------------------------------------- CV Therapeutics Inc.+ 303 $ 23,861 Alpharma Inc. 599 23,249 Aurora Biosciences Corp.+ 374 22,791 Maxygen Inc.+ 559 22,500 Trimeris Inc.+ 310 21,933 Coventry Health Care Inc.+ 1,173 21,407 United Therapeutics Inc.+ 397 21,240 Renal Care Group Inc.+ 898 21,103 Tularik Inc.+ 661 20,987 Maxim Pharmaceuticals Inc.+ 447 19,836 Lexicon Genetics Inc.+ 948 19,197 Henry Schein Inc.+ 784 19,110 NPS Pharmaceuticals Inc.+ 433 18,565 Coherent Inc.+ 532 18,520 Steris Corp.+ 1,218 18,270 Noven Pharmaceuticals Inc.+ 406 18,092 Pharmacyclics Inc.+ 314 16,897 Mid Atlantic Medical Services Inc.+ 969 16,473 IDEXX Laboratories Inc.+ 682 16,368 SICOR Inc.+ 1,238 15,862 Xoma Ltd.+ 1,293 15,758 Immunomedics Inc.+ 669 15,471 Invacare Corp. 539 15,361 Polymedica Industries Inc.+ 260 14,950 Enzo Biochem Inc.+ 384 14,784 Apria Healthcare Group Inc.+ 733 14,660 Cell Genesys Inc.+ 630 14,529 Quorum Health Group Inc.+ 1,083 14,485 Alliance Pharmaceutical Corp.+ 1,001 14,139 Ligand Pharmaceuticals Inc. "B"+ 919 13,670 Molecular Devices Corp.+ 199 13,607 Transkaryotic Therapies Inc.+ 361 13,447 Coulter Pharmaceutical Inc.+ 337 12,911 Delta & Pine Land Co. 524 12,805 Respironics Inc.+ 652 12,796 Syncor International Corp.+ 473 12,150 Regeneron Pharmaceuticals Inc.+ 446 11,931 Acuson Corp.+ 507 11,566 Guilford Pharmaceuticals Inc.+ 460 11,356 Bio-Technology General Corp.+ 1,079 11,329 Scios Inc.+ 776 11,107 Haemonetics Corp.+ 450 10,575 Gene Logic Inc.+ 476 10,383 Geron Corp.+ 424 9,964 Owens & Minor Inc. 656 $ 9,922 Visible Genetics Inc.+ 326 9,862 US Oncology Inc.+ 1,834 9,858 Arthocare Corp.+ 429 9,733 EntreMed Inc.+ 310 9,649 Catalytica Inc.+ 680 9,138 Datascope Corp. 261 9,037 Genzyme Transgenics Corp.+ 417 8,939 Mentor Corp. 501 8,830 Emisphere Technologies Inc.+ 343 8,682 Cytogen Corp.+ 1,436 8,257 Organogenesis Inc.+ 630 7,900 Novoste Corp.+ 297 7,499 Pharmacopeia Inc.+ 403 7,355 Sunrise Assisted Living Inc.+ 314 7,340 Cyberonics Inc.+ 314 7,300 Supergen Inc.+ 557 7,171 Advanced Tissue Sciences Inc.+ 1,004 7,154 Viropharma Inc.+ 300 7,013 PacifiCare Health Systems Inc. "A"+ 662 6,910 Sunrise Technologies International Inc.+ 954 6,887 Hyseq Inc.+ 224 6,510 Kos Pharmaceuticals Inc.+ 324 6,419 Genome Therapeutics Corp.+ 404 6,035 Biosite Diagnostics Inc.+ 273 6,006 IGEN International Inc.+ 203 5,050 I-Stat Corp.+ 243 4,769 Miravant Medical Technologies+ 314 4,749 Cygnus Inc.+ 526 4,701 Pediatrix Medical Group Inc.+ 290 4,622 NABI Inc.+ 724 4,423 Cell Pathways Inc.+ 523 3,988 Biomatrix Inc.+ 200 3,825 Imatron Inc.+ 1,734 3,739 Sangstat Medical Corp.+ 341 3,410 Columbia Laboratories Inc.+ 518 3,173 Immune Response Corp.+ 464 2,813 Northfield Laboratories Inc.+ 247 2,732 Theragenics Corp.+ 527 2,470 Laser Vision Centers Inc.+ 446 1,812 Osteotech Inc.+ 247 1,359 Gliatech Inc.+ 176 1,133 - --------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $32,279,872) 34,145,442 - --------------------------------------------------------------- - -------------------------------------------------------------------------------- iShares Schedules of Investments page 51 iShares Dow Jones U.S. Healthcare Sector Index Fund Schedule of Investments (continued) October 31, 2000 (Unaudited) Security Principal Value - ------------------------------------------------------------------- REPURCHASE AGREEMENT - 0.03% - ------------------------------------------------------------------- Investors Bank & Trust Tri Party Repurchase Agreement, dated 10/31/00, due 11/01/00, with a maturity value of $10,300 and an effective yield of 5.65%. $ 10,299 $ 10,299 - ------------------------------------------------------------------- TOTAL REPURCHASE AGREEMENT (Cost: $10,299) 10,299 - ------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 100.02% (Cost $32,290,171) 34,155,741 - ------------------------------------------------------------------- Other Assets, Less Liabilities -- (0.02%) (8,488) - ------------------------------------------------------------------- NET ASSETS -- 100.00% $34,147,253 =================================================================== + Non-income earning securities. See notes to financial statements. - -------------------------------------------------------------------------------- page 52 iShares iShares Dow Jones U.S. Industrial Sector Index Fund Schedule of Investments October 31, 2000 (Unaudited) Security Shares Value - --------------------------------------------------------------- COMMON STOCKS - 100.00% - --------------------------------------------------------------- General Electric Co. 106,870 $ 5,857,812 Tyco International Ltd. 27,823 1,577,216 Corning Inc. 13,986 1,069,929 Boeing Co. 15,547 1,054,281 Minnesota Mining & Manufacturing Co. 10,081 974,077 JDS Uniphase Corp.+ 11,701 952,169 Automatic Data Processing Inc. 12,273 801,580 Honeywell International Inc. 13,023 700,800 Emerson Electric Co. 9,422 691,928 United Technologies Corp. 9,018 629,569 First Data Corp. 9,194 460,849 Solectron Corp.+ 9,503 418,132 Paychex Inc. 6,516 369,376 Electronic Data Systems Corp. 7,648 358,978 Illinois Tool Works Inc. 5,916 328,708 Agilent Technologies Inc.+ 6,540 302,884 SDL Inc.+ 1,112 288,286 Caterpillar Inc. 7,196 252,310 Union Pacific Corp. 5,060 237,188 FedEx Corp.+ 5,004 234,487 Gemstar-TV Guide International Inc.+ 3,283 225,091 Burlington Northern Santa Fe Corp. 8,451 224,480 Lockheed Martin Corp. 6,092 218,398 Concord EFS Inc.+ 5,270 217,717 Exodus Communications Inc.+ 6,449 216,445 Waste Management Inc. 10,759 215,180 General Dynamics Corp. 2,986 213,686 Computer Sciences Corp.+ 2,934 184,842 Waters Corp.+ 2,386 173,134 Masco Corp. 9,223 172,355 Deere & Co. 4,580 168,601 PPG Industries Inc. 3,686 164,488 Equifax Inc. 4,478 154,491 Dover Corp. 3,538 150,144 Textron Inc. 2,954 148,992 United Parcel Service Inc. 2,400 145,800 Rockwell International Corp. 3,325 130,714 DST Systems Inc.+ 2,064 127,194 Danaher Corp. 1,978 124,861 Fiserv Inc.+ 2,274 119,243 Cintas Corp. 2,554 118,442 Moody's Corp. 4,138 108,881 Convergys Corp.+ 2,458 107,077 IMS Health Inc. 4,473 105,675 Raytheon Co. "B" 3,062 104,682 Norfolk Southern Corp. 7,376 104,186 CSX Corp. 3,966 100,389 SCI Systems Inc.+ 2,278 $ 97,954 PerkinElmer Inc. 804 96,078 StorageNetworks Inc.+ 1,500 95,156 Robert Half International Inc.+ 3,090 94,245 Molex Inc. 1,722 92,988 Vulcan Materials Co. 2,202 92,484 Ingersoll-Rand Co. 2,430 91,732 Thermo Electron Corp.+ 2,978 86,362 Symbol Technologies Inc. 1,778 80,788 Northrop Grumman Corp. 936 78,624 PE Corp. (Celera Genomics Group)+ 1,108 74,790 PACCAR Inc. 1,726 72,600 Power-One Inc.+ 1,000 70,938 Eaton Corp. 1,008 68,607 Sealed Air Corp.+ 1,368 65,835 Temple-Inland Inc. 1,470 65,783 Parker Hannifin Corp. 1,578 65,290 Donnelley (R.R.) & Sons Co. 2,754 59,211 Newport Corp. 500 57,102 Goodrich (B.F.) Co. 1,394 57,067 Molex Inc. "A" 1,422 55,902 Ceridian Corp.+ 2,234 55,850 Sabre Holdings Corp. 1,650 55,172 CMGI Inc.+ 3,266 55,114 Laboratory Corp. of America Holdings+ 400 53,950 Sherwin-Williams Co. 2,478 53,742 SPX Corp.+ 432 53,406 Cooper Industries Inc. 1,394 53,320 Vishay Intertechnology Inc.+ 1,762 52,860 Southdown Inc. 708 50,180 WebMD Corp.+ 4,402 50,073 Fluor Corp. 1,394 48,790 Tektronix Inc. 680 48,450 Servicemaster Co. 5,192 47,377 Akamai Technologies Inc.+ 900 45,900 American Standard Companies Inc.+ 984 45,141 Dun & Bradstreet Corp.+ 2,069 44,742 Manpower Inc. 1,274 44,351 Macrovision Corp.+ 604 44,016 Deluxe Corp. 1,950 43,997 Pall Corp. 2,002 43,168 Acxiom Corp.+ 1,042 41,940 Internet Capital Group LLC+ 3,162 41,896 Grainger (W.W.) Inc. 1,298 41,455 Arrow Electronics Inc.+ 1,250 40,000 Plexus Corp.+ 612 38,594 Critical Path Inc.+ 793 38,510 CH Robinson Worldwide Inc. 700 38,281 Avnet Inc. 1,416 38,055 - -------------------------------------------------------------------------------- iShares Schedules of Investments Page 53 iShares Dow Jones U.S. Industrial Sector Index Fund Schedule of Investments (continued) October 31, 2000 (Unaudited) Security Shares Value - --------------------------------------------------------------- COMMON STOCKS (Continued) - --------------------------------------------------------------- CheckFree Corp.+ 745 $ 37,064 GATX Corporation 880 37,015 Comdisco Inc. 2,985 36,753 ITT Industries Inc. 1,122 36,535 Expeditors International Washington Inc. 704 36,520 Stanley Works (The) 1,370 36,476 Affiliated Computer Services Inc.+ 652 36,308 American Power Conversion Corp.+ 2,730 35,319 Viad Corp. 1,626 34,756 Catalina Marketing Corp.+ 840 32,970 Millipore Corp. 624 32,760 Alexander & Baldwin Inc. 1,298 32,369 Sonoco Products Co. 1,674 32,329 CSG Systems International Inc.+ 680 31,577 Smurfit-Stone Container Corp.+ 2,306 31,131 Martin Marietta Materials Inc. 808 31,027 Black & Decker Corp. 800 30,100 First Health Group Corp.+ 728 28,392 Sawtek Inc.+ 552 28,083 Republic Services Inc. "A"+ 2,081 27,963 Tekelec+ 728 26,800 Dycom Industries Inc.+ 708 26,638 VerticalNet Inc.+ 936 26,106 National Instruments Corp.+ 556 25,958 Safeguard Scientifics Inc.+ 1,687 25,938 Vicor Corp.+ 480 25,920 Banta Corp. 1,094 25,230 Quanta Services Inc.+ 800 24,850 Atlas Air Inc.+ 680 24,650 CNET Networks Inc.+ 776 24,444 National Service Industries Inc. 1,194 24,402 Iron Mountain Inc.+ 700 23,669 C&D Technologies Inc. 400 23,650 APW Ltd.+ 504 23,278 Reynolds & Reynolds Co. "A" 1,298 23,202 FuelCell Energy Inc.+ 300 22,969 Technitrol Inc. 200 22,175 Bemis Co. 856 22,149 Tech Data Corp.+ 528 21,978 AVX Corp. 754 21,583 Navistar International Corp.+ 652 21,557 Veeco Instruments Inc.+ 324 21,450 FMC Corp.+ 280 21,280 Anaren Microwave Inc.+ 200 20,800 Getty Images Inc.+ 652 20,701 PurchasePro.com Inc.+ 752 20,304 Raytheon Co. "A" 632 20,224 Mastec Inc.+ 684 $ 19,793 L-3 Communications Holdings Inc.+ 300 19,781 FreeMarkets Inc.+ 400 19,775 NOVA Corporation+ 1,246 19,547 Tollgrade Communications Inc.+ 200 19,150 Crane Co. 728 19,064 Jacobs Engineering Group Inc.+ 456 18,867 Litton Industries Inc.+ 352 18,282 ePlus Inc.+ 1,228 17,940 Teletech Holdings Inc.+ 636 17,649 Chemed Corp. 528 17,358 Methode Electronics Inc. "A" 456 17,157 Crown Cork & Seal Co. Inc. 1,878 17,137 Ryder System Inc. 856 16,906 Tetra Tech Inc.+ 480 16,680 Diebold Inc. 632 16,432 Shaw Group Inc.+ 200 16,300 PSINET Inc.+ 2,421 16,115 Valspar Corp. 584 15,949 Snap-On Inc. 608 15,542 Varian Inc.+ 500 15,406 Hubbell Inc. "B" 632 15,129 Aeroflex Inc.+ 250 14,875 Carlisle Companies Inc. 352 14,652 Granite Construction Inc. 632 14,418 Cognex Corp.+ 428 14,338 United Stationers Inc.+ 456 13,709 Pentair Inc. 456 13,594 Diamond Technology Partners Inc.+ 304 13,566 Johns Manville Corp. 1,426 13,101 Scient Corp.+ 722 12,996 Lafarge Corp. 684 12,911 Digital Island Inc.+ 1,008 12,726 REMEC Inc.+ 420 12,521 Donaldson Co. Inc. 552 12,489 Artesyn Technologies Inc.+ 304 12,350 Digex Inc.+ 304 11,932 NCO Group Inc.+ 528 11,550 Copart Inc.+ 760 11,447 Sensormatic Electronics Corp.+ 628 11,304 Newport News Shipbuilding Inc. 228 11,215 Mueller Industries Inc.+ 480 11,190 Commscope Inc.+ 428 10,834 CTS Corp. 252 10,820 American Superconductor Corp.+ 224 10,696 Proxicom Inc.+ 760 10,260 Owens-Illinois Inc.+ 1,711 10,159 Plug Power Inc.+ 400 9,575 AptarGroup Inc. 456 9,434 - -------------------------------------------------------------------------------- page 54 iShares iShares Dow Jones U.S. Industrial Sector Index Fund Schedule of Investments (continued) October 31, 2000 (Unaudited) Security Shares Value - ---------------------------------------------------------------- COMMON STOCKS (CONTINUED) - ---------------------------------------------------------------- Galileo International Inc. 470 $ 9,282 ProBusiness Services Inc.+ 280 9,153 Ball Corp. 256 8,992 Nordson Corp. 304 8,721 Zygo Corp.+ 176 8,712 Dendrite International Inc.+ 400 8,700 Cymer Inc.+ 304 7,600 Timken Co. 518 7,284 Overseas Shipholding Group Inc. 300 7,200 Xcelera.com Inc.+ 598 7,176 Roper Industries Inc. 204 7,140 Insituform Technologies Inc. "A"+ 200 7,137 Helix Technology Corp. 256 7,136 Electro Scientific Industries Inc.+ 204 7,127 Three-Five Systems, Inc.+ 200 6,900 Titan Corp. (The)+ 500 6,688 AnswerThink Consulting Group Inc.+ 400 6,550 Littelfuse Inc.+ 224 6,496 Stericycle Inc.+ 200 6,475 Scott Technologies Inc.+ 260 5,980 National Data Corp. 152 5,795 MSC Industrial Direct Co. Inc. "A"+ 376 5,593 Audiovox Corp. "A"+ 400 5,475 Key3Media Group Inc.+ 575 5,462 American Management Systems Inc.+ 252 5,449 eLoyalty Corp.+ 555 5,342 EMCOR Group Inc.+ 204 5,291 Hall Kinion & Associates Inc.+ 200 5,287 Uniroyal Technology Corp.+ 507 5,165 Wolverine Tube Inc.+ 369 5,028 GoAmerica Inc.+ 475 4,958 Pharmaceutical Product Development Inc.+ 152 4,760 Swift Transportation Co. Inc.+ 332 4,731 Ionics Inc.+ 224 4,690 Globix Corp.+ 456 4,617 Kent Electronics Corp.+ 224 4,172 Forrester Research Inc.+ 100 4,106 Texas Industries Inc. 176 4,103 Washington Group International Inc.+ 380 3,990 APAC Customer Services Inc.+ 718 3,859 Precision Castparts Corp. 96 3,624 Thomas & Betts Corp. 239 3,615 Photon Dynamics Inc.+ 100 3,600 Wisconsin Central Transportation Corp.+ 280 3,588 Kansas City Southern Industries Inc. 383 3,327 internet.com LLC+ 156 3,247 Presstek Inc.+ 204 3,213 Spherion Corporation+ 265 $ 3,147 Elcor Corp. 200 3,113 Superconductor Technologies Inc.+ 299 3,027 USinternetworking Inc.+ 1,261 2,916 Ventro Corporation+ 583 2,806 NaviSite Inc.+ 275 2,802 MedQuist Inc.+ 239 2,689 Cummins Engine Company Inc. 72 2,448 Avid Technology Inc.+ 176 2,442 Keynote Systems Inc.+ 100 2,400 Multex.com Inc.+ 176 2,277 Flowserve Corp. 104 2,093 U.S. Industries Inc. 231 2,050 Rare Medium Group Inc.+ 438 2,026 Pittston Brink's Group 124 1,969 Internet Pictures Corp.+ 775 1,659 Covance Inc.+ 172 1,483 SYNAVANT Inc.+ 316 1,442 G&K Services Inc. "A" 52 1,436 CellStar Corp.+ 588 1,360 CAIS Internet Inc.+ 314 1,325 Data Broadcasting Corp.+ 295 1,300 Per-Se Technologies Inc.+ 275 1,212 UCAR International Inc.+ 103 850 Parexel International Corp.+ 78 682 Razorfish Inc.+ 146 657 CNF Transportation Inc. 24 640 National Information Consortium Inc.+ 116 391 - ---------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $26,459,821) 27,070,764 - ---------------------------------------------------------------- REPURCHASE AGREEMENT - 0.03% - ---------------------------------------------------------------- Investors Bank & Trust Tri Party Repurchase Agreement, dated 10/31/00, due 11/01/00, with a maturity value of $7,542 and an effective yield of 5.65%. $7,541 7,541 - ---------------------------------------------------------------- TOTAL REPURCHASE AGREEMENT (Cost: $7,541) 7,541 - ---------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 100.03% (Cost: $26,467,362) 27,078,305 - ---------------------------------------------------------------- Other Assets, Less Liabilities -- (0.03%) (8,979) - ---------------------------------------------------------------- NET ASSETS -- 100.00% $27,069,326 ================================================================ + Non-income earning securities. See notes to financial statements. - -------------------------------------------------------------------------------- iShares Schedules of Investments page 55 iShares Dow Jones U.S. Technology Sector Index Fund Schedule of Investments October 31, 2000 (Unaudited)
Security Shares Value - ------------------------------------------------------------------ COMMON STOCKS - 100.01% - ------------------------------------------------------------------ Cisco Systems Inc.+ 235,759 $ 12,701,516 Microsoft Corp.+ 140,662 9,688,095 Intel Corp. 212,875 9,579,375 EMC Corp.+ 73,185 6,518,039 Sun Microsystems Inc.+ 53,259 5,905,092 International Business Machines Corp. 59,109 5,822,236 Oracle Corp.+ 146,052 4,819,716 Texas Instruments Inc. 57,862 2,838,854 Lucent Technologies Inc. 112,118 2,613,751 Hewlett-Packard Co. 55,922 2,596,878 Dell Computer Corp.+ 76,519 2,257,310 Veritas Software Corp.+ 13,499 1,903,570 Motorola Inc. 73,213 1,825,749 Compaq Computer Corp. 57,002 1,733,431 QUALCOMM Inc.+ 25,009 1,628,320 Juniper Networks Inc.+ 7,955 1,551,225 Applied Materials Inc.+ 27,088 1,439,050 Siebel Systems Inc.+ 11,927 1,251,590 Network Appliance Inc.+ 10,073 1,198,687 Palm Inc.+ 18,939 1,014,420 Ciena Corp.+ 9,536 1,002,472 Broadcom Corp.+ 4,404 979,339 BEA Systems Inc.+ 12,584 902,902 PMC - Sierra Inc.+ 5,302 898,689 Ariba Inc.+ 6,734 851,009 Brocade Communications System Inc.+ 3,669 834,239 Xilinx Inc.+ 11,015 797,899 VeriSign Inc.+ 6,000 792,000 Analog Devices Inc.+ 11,908 774,020 Applied Micro Circuits Corp.+ 9,802 748,628 Linear Technology Corp. 10,443 674,226 Check Point Software Technologies Ltd.+ 3,970 628,749 Tellabs Inc.+ 12,464 622,421 Adobe Systems Inc. 8,044 611,847 Maxim Integrated Products Inc.+ 9,005 597,144 Comverse Technology Inc.+ 5,330 595,627 i2 Technologies Inc.+ 3,375 573,750 Sanmina Corp.+ 4,979 569,162 Seagate Technology Inc.+ 7,633 533,356 Altera Corp.+ 12,504 511,883 Computer Associates International Inc. 15,742 501,776 Redback Networks Inc.+ 4,644 494,296 Level 3 Communications Inc.+ 10,294 490,895 Micron Technology Inc.+ 13,824 480,384 ADC Telecommunications Inc.+ 21,869 467,449 Vitesse Semiconductor Corp.+ 6,028 421,583 Commerce One Inc.+ 6,139 394,047 Intuit Inc.+ 6,189 380,237 Rational Software Corp.+ 6,248 372,928 Scientific-Atlanta Inc. 5,346 365,867 Gateway Inc.+ 6,915 356,883 PeopleSoft Inc.+ 8,039 350,827 LSI Logic Corp.+ 10,443 343,314 ONI Systems Inc.+ 4,161 337,301 Handspring Inc.+ 4,207 304,219 Mercury Interactive Corp.+ 2,665 295,815 QLogic Corp.+ 2,962 286,574 Extreme Networks Inc.+ 3,261 270,459 Jabil Circuit Inc.+ 4,542 259,178 Sycamore Networks Inc.+ 4,061 256,858 Pitney Bowes Inc. 8,573 254,511 Phone.com Inc.+ 2,527 233,905 Vignette Corp.+ 7,781 231,971 Inktomi Corp.+ 3,620 229,644 SunGard Data Systems Inc.+ 4,431 226,535 Advanced Micro Devices Inc.+ 9,960 225,345 American Tower Corp.+ 5,305 217,173 Apple Computer Inc.+ 10,948 214,170 Cadence Design Systems Inc.+ 8,260 212,179 KLA-Tencor Corp.+ 6,251 211,362 3Com Corp.+ 11,752 208,598 Atmel Corp.+ 13,828 206,556 Conexant Systems Inc.+ 7,653 201,370 Micromuse Inc.+ 1,152 195,480 BroadVision Inc.+ 6,534 194,386 Xerox Corp. 22,453 189,447 Integrated Device Technology Inc.+ 3,315 186,676 Crown Castle International Corp.+ 5,970 180,966 Novellus Systems Inc.+ 4,401 180,166 Lexmark International Group Inc. "A"+ 4,340 177,940 Amdocs Ltd.+ 2,730 176,938 Software.com Inc.+ 1,148 171,052 Teradyne Inc.+ 5,460 170,625 BMC Software Inc.+ 8,329 169,183 Emulex Corp.+ 1,083 159,066 Transwitch Corp.+ 2,740 158,235 National Semiconductor Corp.+ 5,990 155,740 Finisar Corp.+ 5,366 154,608 Foundry Networks Inc.+ 2,321 154,201 Cypress Semiconductor Corp.+ 4,051 151,659 Cabletron Systems Inc.+ 5,401 146,502 Polycom Inc.+ 2,252 146,380
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Security Shares Value - ------------------------------------------------------------------ COMMON STOCKS (CONTINUED) - ------------------------------------------------------------------ Interwoven Inc.+ 1,441 $ 145,181 Rambus Inc.+ 3,217 144,564 Citrix Systems Inc.+ 6,222 137,662 Unisys Corp.+ 10,497 133,837 NCR Corp.+ 3,058 131,876 Macromedia Inc.+ 1,654 127,461 Micrel Inc.+ 2,806 126,971 Microchip Technology Inc.+ 3,993 126,279 Avaya Inc.+ 9,337 125,466 TIBCO Software Inc.+ 1,954 123,102 Portal Software Inc.+ 3,262 114,782 Peregrine Systems Inc.+ 4,685 112,440 Parametric Technology Corp.+ 9,122 112,315 SanDisk Corp.+ 2,079 111,714 Art Technology Group Inc.+ 1,776 111,444 New Focus Inc.+ 1,735 110,173 Cree Inc.+ 1,106 109,770 RF Micro Devices Inc.+ 5,409 107,842 NVIDIA Corp.+ 1,707 106,074 Lattice Semiconductor Corp.+ 3,580 104,491 Agile Software Corp.+ 1,371 103,339 CacheFlow Inc.+ 953 102,924 GlobeSpan Inc.+ 1,315 101,173 Internet Security Systems Inc.+ 1,127 99,458 Novell Inc.+ 11,047 99,423 TriQuint Semiconductor Inc.+ 2,582 98,923 Powerwave Technologies Inc.+ 2,046 98,464 Informatica Corp.+ 1,029 97,240 Compuware Corp.+ 12,235 96,351 Sapient Corp.+ 2,565 91,218 Network Associates Inc.+ 4,657 89,647 Amphenol Corp. "A"+ 1,394 89,564 Manugistics Group Inc.+ 784 89,327 Nuance Communications Inc.+ 1,021 88,061 Advanced Fibre Communications Inc.+ 2,698 87,854 E.piphany Inc.+ 969 87,331 International Rectifier Corp.+ 1,911 85,278 Synopsys Inc.+ 2,405 83,874 Vitria Technology Inc.+ 3,066 82,399 Wind River Systems Inc.+ 2,002 82,207 KEMET Corp.+ 2,939 81,925 Lam Research Corp.+ 4,178 80,949 Cirrus Logic Inc.+ 1,815 78,272 Netegrity Inc.+ 971 75,738 Quantum DLT & Storage Group+ 5,044 75,660 Dallas Semiconductor Corp. 1,908 75,605 RSA Security Inc.+ 1,269 73,602 Spectrasite Holdings Inc.+ 3,713 73,332 Symantec Corp.+ 1,861 72,695 RealNetworks Inc.+ 3,444 70,979 Kana Communications Inc.+ 2,974 69,889 Elantec Semiconductor Inc.+ 625 69,531 Harris Corp. 2,114 66,987 Andrew Corp.+ 2,545 66,965 Semtech Corp.+ 2,070 66,758 MRV Communications Inc.+ 1,685 66,557 Red Hat Inc.+ 5,300 66,250 Viasystems Group Inc.+ 4,543 64,454 Retek Inc.+ 1,597 62,982 Silicon Storage Technology Inc.+ 2,629 59,810 Internap Network Services Corp.+ 3,715 59,440 Amkor Technology Inc.+ 2,645 58,686 Sybase Inc.+ 2,792 58,458 Fairchild Semiconductor Corp. "A"+ 2,763 58,196 ON Semiconductor Corp.+ 5,752 57,880 Loral Space & Communications Ltd.+ 9,945 56,562 Exar Corp.+ 1,258 56,217 Cerner Corp.+ 899 55,682 Infonet Services Corp. "B"+ 8,542 55,523 Advent Software Inc.+ 928 55,506 Alpha Industries Inc.+ 1,336 53,273 Plantronics Inc.+ 1,167 53,244 DMC Stratex Networks Inc.+ 2,285 52,841 Adaptec Inc.+ 3,332 52,687 Infocus Corp.+ 1,185 52,362 Natural Microsystems Corp.+ 1,154 52,146 Proxim Inc.+ 843 51,107 Jack Henry & Associates Inc. 922 50,710 Documentum Inc.+ 595 50,575 SBA Communications Corp.+ 991 49,674 Cobalt Networks Inc.+ 888 48,951 Edwards (J.D.) & Co.+ 1,827 47,274 Terayon Communications Systems Inc.+ 2,091 46,786 AudioCodes Ltd.+ 1,174 46,446 Inet Technologies Inc.+ 1,129 46,289 Oak Technology Inc.+ 1,638 45,966 Iomega Corp.+ 9,078 44,573 Silicon Laboratories Inc.+ 1,583 44,423 Actuate Software Corp.+ 1,569 44,226 Entrust Technologies Inc.+ 1,427 43,791 Universal Access Inc.+ 2,976 43,524 Quest Software Inc.+ 972 42,464
- -------------------------------------------------------------------------------- iShares Schedules of Investments Page 57 iShares Dow Jones U.S. Technology Sector Index Fund Schedule Of Investments (continued) October 31, 2000 (Unaudited)
Security Shares Value - ------------------------------------------------------------------ COMMON STOCKS (continued) - ------------------------------------------------------------------ Centillium Communications Inc.+ 1,101 $ 41,821 Matrixone Inc.+ 1,403 41,652 Black Box Corp.+ 627 41,304 Informix Corp.+ 9,524 40,477 Efficient Networks Inc.+ 964 40,443 Software Technologies Corp.+ 2,316 39,372 Autodesk Inc. 1,743 38,455 Emcore Corp.+ 916 37,556 Mentor Graphics Corp.+ 1,601 37,523 Silicon Valley Group Inc.+ 1,138 37,483 Zebra Technologies Corp. "A"+ 814 35,663 NetIQ Corp.+ 402 34,622 Clarent Corp.+ 1,096 34,045 Cable Design Technologies Corp.+ 1,453 33,510 Aspen Technology Inc.+ 811 33,504 Storage Technology Corp.+ 3,392 33,072 Virata Corp.+ 1,667 32,298 Quantum Hard Disk Drive Group+ 2,817 32,219 Selectica Inc.+ 1,204 31,756 Siliconix Inc.+ 733 31,702 SERENA Software Inc.+ 621 31,593 Echelon Corp.+ 984 31,242 Ditech Communications Corp.+ 902 31,063 FileNET Corp.+ 1,149 30,448 Kopin Corp.+ 2,116 29,888 Concurrent Computer Corp.+ 1,689 29,769 Caliper Technologies Corp.+ 526 29,653 Liberate Technologies Inc.+ 1,546 29,471 Actel Corp.+ 801 29,337 C-Cube Microsystems Inc.+ 1,495 29,152 Western Digital Corp.+ 4,811 28,866 Aspect Communications Corp.+ 1,729 28,501 Intranet Solutions Inc.+ 609 28,318 Netro Corp.+ 1,291 28,160 Credence Systems Corp.+ 1,500 28,125 Harmonic Inc.+ 1,922 27,869 OpenTV Corp.+ 1,004 26,983 Silicon Graphics Inc.+ 5,927 26,672 VA Linux Systems Inc.+ 911 26,647 Electronics For Imaging Inc.+ 1,688 26,164 SonicWALL Inc.+ 1,738 25,961 Legato Systems Inc.+ 2,903 25,855 Verity Inc.+ 1,094 25,709 Pinnacle Holdings Inc.+ 1,619 25,499 Next Level Communications Inc.+ 539 25,232 Varian Semiconductor Equipment Associates Inc.+ 1,073 24,679 Computer Network Technology Corp.+ 805 24,464 Benchmark Electronics Inc.+ 605 24,351 NorthPoint Communications Group Inc.+ 3,478 23,477 Intertrust Technologies Corp.+ 2,334 23,340 Zoran Corp.+ 462 23,158 S3 Inc.+ 2,507 22,641 WebTrends Corp.+ 699 22,466 Kulicke & Soffa Industries Inc.+ 1,527 22,428 ANADIGICS Inc.+ 1,000 22,375 Advanced Digital Information Corp.+ 1,718 22,334 ADTRAN Inc.+ 585 22,230 S1 Corp.+ 1,839 22,183 Keane Inc.+ 1,700 22,100 DSP Group Inc.+ 777 22,047 Avant! Corp.+ 1,305 21,940 AXT Inc.+ 569 21,906 LTX Corp.+ 1,519 21,266 Excalibur Technologies Corp.+ 359 21,136 Williams Communications Group Inc.+ 1,143 20,931 Aware Inc.+ 672 20,790 ESS Technology Inc.+ 1,328 20,584 WatchGuard Technologies Inc.+ 407 20,350 Photronics Inc.+ 897 20,239 F5 Networks Inc.+ 651 20,181 Adaptive Broadband Corp.+ 1,254 20,142 Microstrategy Inc.+ 823 19,701 UTStarcom, Inc.+ 985 19,700 Copper Mountain Networks Inc.+ 1,690 19,329 Maxtor Corp.+ 2,419 18,898 AXENT Technologies Inc.+ 969 18,593 HNC Software Inc.+ 915 18,586 Mercury Computer Systems Inc.+ 587 18,197 Digital Lightware Inc.+ 355 17,994 Puma Technology Inc.+ 1,321 17,916 Wave Systems Corp. "A"+ 1,548 17,899 HI/FN Inc.+ 287 17,722 PRI Automation Inc.+ 780 17,648 C-COR Electronics Inc.+ 1,123 17,547 Trimble Navigation Ltd.+ 729 17,314 PanAmSat Corp.+ 502 16,817 Silicon Image Inc.+ 1,412 16,591 Remedy Corp.+ 966 16,543 ATMI, Inc.+ 873 16,478 New Era of Networks Inc.+ 1,050 16,341 Asyst Technologies Inc.+ 1,080 16,200
- -------------------------------------------------------------------------------- Page 58 iShares iShares Dow Jones U.S. Technology Sector Index Fund Schedule Of Investments (continued) October 31, 2000 (Unaudited)
Security Shares Value - ------------------------------------------------------------------ COMMON STOCKS (continued) - ------------------------------------------------------------------ Tut Systems Inc.+ 486 $ 16,160 DuPont Photomasks Inc.+ 287 16,108 Systems & Computer Technology Corp.+ 1,102 15,910 M-Systems Flash Disk Pioneers Ltd.+ 636 15,820 Ultratech Stepper Inc.+ 672 15,792 Alliance Semiconductor Corp.+ 789 15,780 Glenayre Technologies Inc.+ 1,912 15,774 Hutchinson Technology Inc.+ 717 15,729 Read-Rite Corp.+ 2,065 15,358 Packeteer Inc.+ 617 15,348 Hyperion Solutions Corp.+ 1,088 15,232 PLX Technology Inc.+ 619 14,856 Transaction Systems Architects Inc. "A"+ 1,099 14,837 Allen Telecom Inc.+ 777 14,520 RadiSys Corp.+ 534 14,151 Brooks Automation Inc.+ 500 13,250 International Fibercom Inc.+ 1,025 13,197 Inprise Corp.+ 2,047 13,050 P-Com Inc.+ 2,316 13,028 ANTEC Corp.+ 1,040 12,675 Broadbase Software Inc.+ 1,163 12,502 ZixIt Corp.+ 508 12,414 Tumbleweed Communications Corp.+ 723 12,381 Power Integrations Inc.+ 905 12,161 SilverStream Software Inc.+ 522 11,745 Osicom Technologies Inc.+ 365 11,680 Standard Microsystems Corp.+ 483 11,592 Integrated Silicon Solution Inc.+ 862 11,529 Xircom Inc.+ 797 11,258 Micros Systems Inc.+ 570 11,257 JDA Software Group Inc.+ 715 10,770 Sanchez Computer Associates Inc.+ 662 10,633 Structural Dynamics Research Corp.+ 1,023 10,550 InterVoice Inc.+ 1,046 10,231 Micron Electronics Inc.+ 1,275 10,080 Intergraph Corp.+ 1,607 10,044 Extended Systems Inc.+ 249 9,711 Allscripts Inc.+ 806 9,672 Symmetricom Inc.+ 758 9,665 Metasolv Software Inc.+ 777 9,664 PC-Tel Inc.+ 552 9,522 Project Software & Development Inc.+ 731 9,503 Auspex Systems Inc.+ 932 9,436 Cohu Inc. 593 9,377 Electroglas Inc.+ 657 9,239 IMRglobal Corp.+ 1,067 8,803 Inter-Tel Inc. 693 8,013 StarBase Corp.+ 1,549 7,890 Westell Technologies Inc.+ 1,385 7,618 Picturetel Corp.+ 1,184 7,530 General Magic Inc.+ 1,851 7,462 SpeedFam-IPEC Inc.+ 773 7,344 World Access Inc.+ 1,466 7,147 FSI International Inc.+ 757 7,050 MetaCreations Corp.+ 701 7,010 BackWeb Technologies Ltd.+ 771 6,891 Network Equipment Technologies Inc.+ 706 6,707 Allaire Corp.+ 912 6,669 Neotopia Inc.+ 577 6,275 Brooktrout Technology Inc.+ 410 5,919 InfoCure Corp.+ 1,135 5,781 ePresence Inc.+ 812 5,735 3Dfx Interactive Inc.+ 1,280 5,440 Open Market Inc.+ 1,615 5,350 Clarus Corp.+ 514 5,140 EMS Technologies Inc.+ 323 5,128 Vertel Corp.+ 913 4,850 Mercator Software Inc.+ 1,022 4,663 Rhythms Netconnections Inc.+ 2,050 4,484 Carrier Access Corp.+ 352 4,400 Concord Communications Inc.+ 548 4,247 Accrue Software Inc.+ 856 3,959 CyberSource Corp.+ 637 3,503 Geoworks Corp.+ 634 3,111 NetSpeak Corp.+ 403 3,073 Be Inc.+ 995 3,047 Magic Software Enterprises Ltd.+ 517 3,005 NEON Communications Inc.+ 241 2,907 Epicor Software Corp.+ 1,416 2,788 Elcom International Inc.+ 785 2,747 Net Perceptions Inc.+ 676 2,239 Marimba Inc.+ 361 2,143 InterWorld Corp.+ 841 1,840 Exchange Applications Inc.+ 571 1,829 - ------------------------------------------------------------------ TOTAL COMMON STOCKS (Cost: $124,730,214) 117,368,980 - ------------------------------------------------------------------
- -------------------------------------------------------------------------------- iShares Schedules Of Investments Page 59 iShares Dow Jones U.S. Technology Sector Index Fund Schedule Of Investments (continued) October 31, 2000 (Unaudited)
Security Principal Value - ------------------------------------------------------------------ SHORT TERM INSTRUMENTS - 5.50% - ------------------------------------------------------------------ Freddie Mac Discount Note 6.40%, 11/21/00++ $ 964,065 $ 964,065 Goldman Sachs Financial Square Prime Obligation Fund++ 1,624,397 1,624,397 Providian Temp Cash Money Market Fund++ 1,184,058 1,184,058 Short Term Investment Company Liquid Assets Portfolio++ 2,680,313 2,680,313 - ------------------------------------------------------------------ TOTAL SHORT TERM INSTRUMENTS (Cost: $6,452,833) 6,452,833 - ------------------------------------------------------------------ REPURCHASE AGREEMENT - 0.03% - ------------------------------------------------------------------ Investors Bank & Trust Tri Party Repurchase Agreement, dated 10/31/00, due 11/01/00, with a maturity value of $38,363 and an effective yield of 5.65%. 38,357 38,357 - ------------------------------------------------------------------ TOTAL REPURCHASE AGREEMENT (Cost: $38,357) 38,357 - ------------------------------------------------------------------ TOTAL INVESTMENTS IN SECURITIES -- 105.54% (Cost: $131,221,404) 123,860,170 - ------------------------------------------------------------------ Other Assets, Less Liabilities -- (5.54%) (6,505,796) - ------------------------------------------------------------------ NET ASSETS -- 100.00% $117,354,374 ==================================================================
+ Non-income earning securities. ++ Represents investment of collateral received from securities lending transactions. See Note 5. See notes to financial statements. - -------------------------------------------------------------------------------- Page 60 iShares iShares Dow Jones U.S. Telecommunications Sector Index Fund Schedule of Investments October 31, 2000 (Unaudited) Security Shares Value - ----------------------------------------------------------------- COMMON STOCKS - 100.02% - ----------------------------------------------------------------- SBC Communications Inc. 130,094 $ 7,504,798 Verizon Communications 104,114 6,019,091 AT&T Corp. 148,829 3,450,972 BellSouth Corp. 68,220 3,295,879 WorldCom Inc.+ 115,083 2,733,221 Qwest Communications International Inc.+ 50,523 2,456,681 Alltel Corp. 20,611 1,328,121 CenturyTel Inc. 25,892 996,842 United States Cellular Corp.+ 14,293 914,752 Telephone & Data Systems Inc. 8,610 908,355 Sprint Corp. (FON Group) 32,122 819,111 Sprint Corp. (PCS Group)+ 20,264 772,565 Nextel Communications Inc. "A"+ 19,522 750,377 Citizen Communications Co.+ 50,362 730,249 Broadwing Inc.+ 17,725 500,731 Voicestream Wireless Corp.+ 3,622 476,293 Western Wireless Corp. "A"+ 9,694 460,465 XO Communications Inc. "A"+ 12,053 406,600 Rural Cellular Corp. "A"+ 6,042 324,758 McLeodUSA Inc. "A"+ 15,776 303,688 Time Warner Telecom Inc. "A"+ 4,500 268,313 AT&T Wireless Group+ 10,300 256,856 Powertel Inc.+ 2,758 240,636 Metromedia Fiber Network Inc.+ 10,755 204,345 Wireless Facilities Inc.+ 3,500 175,000 Allegiance Telecom Inc.+ 5,205 163,632 IDT Corp.+ 4,140 148,005 Focal Communications Corp.+ 9,543 138,373 US LEC Corp. "A"+ 22,670 136,020 Aether Systems Inc.+ 1,500 120,937 AirGate PCS Inc.+ 2,800 108,850 WebLink Wireless Inc.+ 13,612 108,045 RCN Corp.+ 6,015 106,766 PTEK Holdings Inc.+ 52,230 106,092 Talk.com Inc.+ 33,667 104,157 Intermedia Communications Inc.+ 4,643 102,726 ITC DeltaCom Inc.+ 12,482 101,026 Motient Corp.+ 8,027 97,327 Winstar Communications Inc.+ 4,922 95,979 ITXC Corp.+ 8,675 91,630 Arch Wireless Inc.+ 28,066 84,198 Network Plus Corp.+ 10,174 80,120 TeleCorp PCS Inc.+ 4,264 79,950 InterDigital Communications Corp.+ 5,868 64,181 Allied Riser Communications Corp.+ 18,575 59,208 Shares or Security Principal Value - ----------------------------------------------------------------- Advanced Radio Telecom Corp.+ 13,459 $ 52,995 Covad Communications Group Inc.+ 9,592 50,658 e.spire Communications Inc.+ 18,368 50,512 Teligent Inc. "A"+ 6,320 47,993 Global Telesystems Group Inc. 17,591 47,276 Metricom Inc.+ 2,617 46,452 Primus Telecommunications Group Inc.+ 9,083 45,983 Adelphia Business Solutions Inc.+ 6,929 43,306 Leap Wireless International Inc.+ 850 42,288 Viatel Inc.+ 4,228 40,695 Mpower Communications Corp.+ 5,493 35,705 ICG Communications Inc.+ 15,016 6,569 - ----------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $40,296,314) 38,906,353 - ----------------------------------------------------------------- SHORT TERM INSTRUMENTS - 8.28% - ----------------------------------------------------------------- Freddie Mac Discount Note 6.40%, 11/21/00++ $ 481,527 481,527 Goldman Sachs Financial Square Prime Obligation Fund++ 1,350,345 1,350,345 Providian Temp Cash Money Market Fund++ 591,464 591,464 Short Term Investment Company Liquid Assets Portfolio++ 800,000 800,000 - ----------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $3,223,336) 3,223,336 - ----------------------------------------------------------------- REPURCHASE AGREEMENT - 0.04% - ----------------------------------------------------------------- Investors Bank & Trust Tri Party Repurchase Agreement, dated 10/31/00, due 11/01/00, with a maturity value of $14,365 and an effective yield of 5.65%. 14,362 14,362 - ----------------------------------------------------------------- TOTAL REPURCHASE AGREEMENT (Cost: $14,362) 14,362 - ----------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 108.34% (Cost: $43,534,012) 42,144,051 - ----------------------------------------------------------------- Other Assets, Less Liabilities -- (8.34%) (3,244,351) - ----------------------------------------------------------------- NET ASSETS -- 100.00% $38,899,700 ================================================================= + 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 61 iShares Dow Jones U.S. Utilities Sector Index Fund Schedule of Investments October 31, 2000 (Unaudited) Security Shares Value - -------------------------------------------------------------- COMMON STOCKS - 99.86% - -------------------------------------------------------------- Enron Corp. 77,271 $ 6,341,051 Duke Energy Corp. 38,490 3,326,979 AES Corp.+ 39,049 2,206,268 Exelon Corp. 33,840 2,034,630 Southern Co. 67,815 1,992,066 Dominion Resources Inc. 24,866 1,481,081 American Electric Power Inc. 33,648 1,396,392 Calpine Corp.+ 14,405 1,137,095 FPL Group Inc. 16,825 1,110,450 PG&E Corp. 40,335 1,086,524 Reliant Energy Inc. 26,251 1,084,494 TXU Corporation 27,580 1,022,184 Public Service Enterprise Group Inc. 22,418 930,347 Entergy Corp. 23,820 912,604 Xcel Energy Inc. 35,310 902,612 Edison International 34,075 813,541 Consolidated Edison Inc. 22,189 780,775 CP&L Energy Inc. 16,721 674,065 Constellation Energy Group Inc. 15,651 652,451 Dynegy Inc. 13,677 633,416 PP&L Resources Inc. 15,132 623,249 FirstEnergy Corp. 23,872 617,688 Columbia Energy Group 8,352 600,822 Ameren Corp. 14,375 571,406 Florida Progress Corp. 10,301 547,884 DTE Energy Co. 14,901 538,299 Cinergy Corp. 16,647 509,814 KeySpan Corp. 14,067 494,983 Allegheny Energy Inc. 11,533 472,132 Sempra Energy 21,399 442,692 GPU Inc. 12,833 424,291 Pinnacle West Capital Corp. 8,845 384,205 DPL Inc. 13,516 383,517 TECO Energy Inc. 13,108 365,386 LG&E Energy Corp. 13,589 333,780 NiSource Inc. 12,705 316,831 Northeast Utilities 15,519 316,200 Montana Power Co. 11,033 311,682 CMS Energy Corp. 11,462 309,474 SCANA Corp. 10,939 289,883 Potomac Electric Power Co. 11,844 270,932 Niagara Mohawk Holdings Inc.+ 16,752 268,032 Energy East Corp. 12,886 260,136 Utilicorp United Inc. 9,670 256,859 American Water Works Inc. 10,282 250,624 Alliant Energy Corp. 8,247 249,987 Wisconsin Energy Corp. 12,725 239,389 MCN Energy Group Inc. 9,416 231,869 National Fuel Gas Co. 4,105 220,131 Shares or Security Principal Value - ---------------------------------------------------------------- Puget Sound Energy Inc. 8,910 $ 218,852 DQE Inc. 6,182 215,984 Questar Corp. 7,764 210,113 IPALCO Enterprises Inc. 9,009 202,139 Equitable Resources Inc. 3,406 197,548 IDACorp Inc. 3,941 194,341 Eastern Enterprises 2,830 182,181 NICOR Inc. 4,805 169,677 OGE Energy Corp. 8,127 167,111 ALLETE 7,750 167,109 Conectiv Inc. 8,892 159,500 Western Resources Inc. 7,239 154,734 Kansas City Power & Light Co. 6,134 147,599 Sierra Pacific Resources Corp. 7,683 132,052 Peoples Energy Corp. 3,699 127,153 AGL Resources Inc. 5,667 115,465 Cleco Corp. 2,353 111,915 Hawaiian Electric Industries Inc. 3,374 111,131 Avista Corp. 4,934 110,707 RGS Energy Group Inc. 3,675 108,412 Public Service Company of New Mexico 3,930 108,321 Piedmont Natural Gas Co. 3,309 100,924 ONEOK Inc. 2,460 97,478 El Paso Electric Co.+ 5,713 68,499 E-Town Corp. 922 62,120 Northwest Natural Gas Co. 2,636 61,781 UniSource Energy Corp. 3,386 50,578 NUI Corp. 1,353 42,197 Azurix Corp.+ 3,871 24,194 - ---------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $40,925,249) 45,441,017 - ---------------------------------------------------------------- REPURCHASE AGREEMENT - 0.05% - ---------------------------------------------------------------- Investors Bank & Trust Tri Party Repurchase Agreement, dated 10/31/00, due 11/01/00, with a maturity value of $19,710 and an effective yield of 5.65%. $19,707 19,707 - ---------------------------------------------------------------- TOTAL REPURCHASE AGREEMENT (Cost: $19,707) 19,707 - ---------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 99.91% (Cost: $40,944,956) 45,460,724 - ---------------------------------------------------------------- Other Assets, Less Liabilities -- 0.09% 43,063 - ---------------------------------------------------------------- NET ASSETS -- 100.00% $45,503,787 ================================================================ + Non-income earning securities. See notes to financial statements. - -------------------------------------------------------------------------------- page 62 iShares iShares Dow Jones U.S. Chemicals Index Fund Schedule of Investments October 31, 2000 (Unaudited) Security Shares Value - -------------------------------------------------------------- COMMON STOCKS - 99.99% - -------------------------------------------------------------- Du Pont (E.I.) de Nemours 85,791 $ 3,892,767 Dow Chemical Co. 87,448 2,678,095 Air Products & Chemicals Inc. 29,505 1,100,906 Union Carbide Corp. 18,970 815,710 Avery Dennison Corp. 15,512 783,356 Praxair Inc. 20,956 780,611 Ecolab Inc. 16,408 642,988 Rohm & Haas Co. "A" 20,757 624,007 Eastman Chemical Co. 12,859 551,330 Engelhard Corp. 24,098 503,046 Sigma-Aldrich Corp. 12,765 456,349 Hercules Inc. 19,002 347,974 Lubrizol Corp. 15,842 343,573 Great Lakes Chemical Corp. 9,945 331,914 RPM Inc. 32,709 292,337 IMC Global Inc. 21,767 281,611 Cytec Industries Inc.+ 7,830 271,114 Solutia Inc. 21,185 270,109 OM Group Inc. 5,715 264,319 Millennium Chemicals Inc. 16,309 262,983 Cabot Corp. 11,178 245,916 Olin Corp. 11,175 198,356 Ferro Corp. 9,566 196,103 Crompton Corp. 23,311 186,488 MacDermid Inc. 6,359 136,718 Cabot Microelectronics Corp.+ 3,029 133,844 Fuller (H. B.) Co. 3,592 121,454 Lilly Industries Inc. "B" 3,761 112,830 Wellman Inc. 6,975 104,625 WD-40 Company 4,475 97,891 Schulman (A.) Inc. 8,528 93,275 Georgia Gulf Corp. 6,096 81,534 Grace (W.R.) & Company+ 12,285 46,836 Calgon Carbon Corp. 6,318 37,118 - -------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $18,217,839) 17,288,087 - -------------------------------------------------------------- Security Principal Value - ------------------------------------------------------------------ REPURCHASE AGREEMENT - 0.03% - ------------------------------------------------------------------ Investors Bank & Trust Tri Party Repurchase Agreement, dated 10/31/00, due 11/01/00, with a maturity value of $6,002 and an effective yield of 5.65%. $ 6,001 $ 6,001 - ----------------------------------------------------------------- TOTAL REPURCHASE AGREEMENT (Cost: $6,001) 6,001 - ----------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 100.02% (Cost: $18,223,840) 17,294,088 - ----------------------------------------------------------------- Other Assets, Less Liabilities -- (0.02%) (3,513) - ----------------------------------------------------------------- NET ASSETS -- 100.00% $17,290,575 ================================================================= + Non-income earning securities. See notes to financial statements. - -------------------------------------------------------------------------------- iShares Schedules of Investments page 63 iShares Dow Jones U.S. Financial Services Index Fund Schedule of Investments October 31, 2000 (Unaudited) Security Shares Value - --------------------------------------------------------------- COMMON STOCKS - 99.94% - --------------------------------------------------------------- Citigroup Inc. 176,420 $ 9,284,102 Morgan Stanley Dean Witter & Co. 44,389 3,564,992 Wells Fargo & Company 67,107 3,107,893 Bank of America Corp. 64,429 3,096,619 Fannie Mae 39,986 3,078,922 American Express Co. 46,288 2,777,280 Chase Manhattan Corp. 51,095 2,324,822 Merrill Lynch & Co. Inc. 28,285 1,979,950 Bank of New York Co. Inc. 28,925 1,664,995 Bank One Corp. 45,322 1,654,253 Freddie Mac 27,325 1,639,500 Schwab (Charles) Corp. 42,088 1,478,341 Marsh & McLennan Companies Inc. 10,636 1,390,657 FleetBoston Financial Corp. 35,393 1,344,934 First Union Corp. 38,627 1,170,881 MBNA Corp. 29,304 1,100,732 Associates First Capital Corp. 28,569 1,060,624 Morgan (J.P.) & Co. Inc. 6,239 1,032,555 Household International Inc. 18,553 933,448 Washington Mutual Inc. 21,134 929,896 Mellon Financial Corp. 19,140 923,505 AXA Financial Inc. 16,949 916,305 Fifth Third Bancorp 17,120 879,540 American General Corp. 9,901 797,030 State Street Corp. 6,325 788,981 PNC Bank Corp. 11,360 759,700 Firstar Corp. 37,578 739,817 US Bancorp Inc. 29,248 707,436 Northern Trust Corp. 8,163 696,916 Lehman Brothers Holdings Inc. 9,520 614,040 Providian Financial Corp. 5,595 581,880 Goldman Sachs Group Inc. (The) 5,692 568,133 BB&T Corp. 15,713 500,852 SunTrust Banks Inc. 10,073 491,688 Capital One Financial Corp. 7,679 484,737 National City Corp. 20,596 440,240 Wachovia Corp. 7,970 430,380 KeyCorp 16,882 416,774 Stilwell Financial Inc. 8,805 394,574 Hancock (John) Financial Services Inc.+ 12,352 390,632 Comerica Inc. 6,127 369,535 USA Education Inc. 6,079 339,664 Franklin Resources Inc. 7,109 304,550 Paine Webber Group Inc. 4,025 286,781 Golden West Financial Corp. 4,658 261,139 Summit Bancorp 6,920 259,500 Bear Stearns Companies Inc. 4,215 255,534 Price (T. Rowe) Associates 4,730 221,423 AmSouth Bancorp 15,437 215,153 SouthTrust Corp. 6,594 213,481 Regions Financial Corp. 8,560 201,695 Charter One Financial Inc. 8,264 189,556 Zions Bancorp 3,241 186,155 Synovus Financial Corp. 8,517 183,648 Union Planters Corp. 5,277 178,429 National Commerce Bancorp 7,936 168,640 Countrywide Credit Industries Inc. 4,454 166,747 Edwards (A.G.) Inc. 3,234 164,125 M&T Bank Corp. 3,205 160,891 Marshall & Ilsley Corp. 3,410 154,516 Old Kent Financial Corp. 5,373 148,765 Knight Trading Group Inc.+ 4,817 144,209 North Fork Bancorp 6,843 138,143 CIT Group Inc. (The) 7,546 131,583 Huntington Bancshares Inc. 9,002 129,404 TCF Financial Corp. 3,155 127,580 E*trade Group Inc.+ 8,719 126,970 Donaldson, Lufkin & Jenrette Inc. 1,402 125,917 SEI Investment Co. 1,331 120,788 First Tennessee National Corp. 5,108 117,484 Dime Bancorp Inc. 4,762 116,371 Legg Mason Inc. 2,170 112,704 Mercantile Bankshares Corp. 2,765 104,033 Federated Investors Inc. "B" 3,540 103,103 Greenpoint Financial Corp. 3,448 102,578 Bisys Group Inc.+ 2,174 102,450 Silicon Valley Bancshares+ 1,905 88,106 Compass Bancshares Inc. 4,764 86,645 Hudson City Bancorp Inc. 4,527 82,335 AmeriCredit Corp.+ 2,977 80,007 FirstMerit Corp. 3,470 79,159 Metris Companies Inc. 2,388 77,312 First Virginia Banks Inc. 1,808 74,806 Hibernia Corp. "A" 6,256 74,681 Astoria Financial Corp. 1,990 74,625 Sovereign Bancorp Inc. 8,887 73,873 Commerce Bancorp Inc. 1,199 72,614 Commerce Bancshares Inc. 2,009 72,198 Bank United Corp. "A" 1,270 71,993 Investors Financial Services Corp. 953 68,318 - -------------------------------------------------------------------------------- page 64 iShares iShares Dow Jones U.S. Financial Services Index Fund Schedule of Investments (continued) October 31, 2000 (Unaudited) Security Shares Value - -------------------------------------------------------------------------------- COMMON STOCKS (continued) - -------------------------------------------------------------------------------- Wilmington Trust Corp. 21,267 $ 66,676 Cullen/Frost Bankers Inc. 1,889 62,927 Old National Bancorp 2,094 61,773 Allied Capital Corp. 2,977 61,401 Ameritrade Holding Corp. "A"+ 4,152 60,723 Centura Banks Inc. 1,562 60,039 Golden State Bancorp Inc. 2,292 59,879 Associated Bancorp 2,446 58,857 Eaton Vance Corp. 1,156 57,583 Raymond James Financial Corp. 1,659 56,095 City National Corp. 1,591 54,691 Roslyn Bancorp Inc. 2,414 52,354 Waddell & Reed Financial Inc. "A" 1,640 52,275 Westamerica Bancorp 1,438 51,678 Webster Financial Corp. 2,091 50,968 UnionBanCal Corporation 2,221 46,641 Affiliated Managers Group Inc.+ 763 45,875 Washington Federal Inc. 2,049 45,718 Greater Bay Bancorp 1,398 45,522 Hudson United Bancorp 1,897 42,445 Downey Financial Corp. 879 41,972 Citizens Banking Corp. 1,725 41,077 Trustmark Corp. 2,132 40,508 Pacific Century Financial Corp. 3,138 39,813 Imperial Bancorp+ 1,607 39,070 Commercial Federal Corp. 2,220 38,850 Colonial BancGroup Inc. 4,361 38,431 Southwest Bancorp of Texas Inc.+ 1,034 37,741 Provident Financial Group Inc. 1,227 37,117 First Midwest Bancorp Inc. 1,408 35,288 Independence Community Bank Corp. 2,382 34,986 Community First Bankshares Inc. 1,984 30,752 Doral Financial Corp. 1,659 29,655 Phoenix Investment Partners Ltd. 1,762 27,531 Chittenden Corp. 1,019 27,067 Staten Island Bancorp Inc. 1,307 25,241 Richmond County Financial Corp. 1,045 24,558 Jeffries Group Inc. 896 24,416 BancWest Corporation 1,127 23,033 National Discounts Brokers Group Inc.+ 452 22,007 American Capital Strategies Ltd. 966 21,312 MAF Bancorp Inc. 862 20,688 People's Bank 1,003 20,311 Shares or Security Principal Value - -------------------------------------------------------------------------------- AMCORE Financial Inc. 1,019 $ 19,998 Provident Bankshares Corp. 1,051 19,903 Queens County Bancorp Inc. 701 19,628 CompuCredit Corp.+ 629 19,420 Sterling Bancshares Inc. 1,025 17,617 Southwest Securities Group Inc. 622 17,572 South Financial Group Inc. (The) 1,716 17,482 FirstFed Financial Corp.+ 666 16,983 Texas Regional Bancshares "A" 523 15,625 East West Bancorp Inc. 753 14,260 NextCard Inc.+ 1,857 14,160 Anchor Bancorp Wisconsin Inc. 902 13,925 Republic Bancorp Inc. 1,432 13,604 UCBH Holdings Inc. 367 13,350 GBC Bancorp 418 13,324 Republic Security Financial Corp. 1,857 12,593 First Sentinel Bancorp Inc. 1,302 12,084 Harbor Florida Bancshares Inc. 986 12,079 Bay View Capital Corp. 1,204 9,782 Haven Bancorp Inc. 327 9,360 Net.B@nk Inc.+ 1,077 9,356 PFF Bancorp Inc. 483 8,936 OceanFirst Financial Corp. 415 8,689 Medallion Financial Corp. 564 8,672 Ocwen Financial Corp.+ 1,465 8,607 Dime Community Bancshares 362 8,032 Pacific Northwest Bancorp 594 7,945 BSB Bancorp Inc. 413 5,988 Finova Group Inc. 2,236 5,730 - -------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $58,903,190) 66,838,720 - -------------------------------------------------------------------------------- SHORT TERM INSTRUMENTS - 0.73% - -------------------------------------------------------------------------------- Freddie Mac Discount Note 6.40%, 11/21/00++ $ 72,974 72,974 Goldman Sachs Financial Square Prime Obligation Fund++ 81,422 81,422 Providian Temp Cash Money Market Fund++ 89,635 89,635 Short Term Investment Company Liquid Assets Portfolio++ 244,459 244,459 - -------------------------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $488,490) 488,490 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- iShares Schedules of Investments page 65 iShares Dow Jones U.S. Financial Services Index Fund Schedule of Investments (continued) October 31, 2000 (Unaudited) Security Principal Value - ---------------------------------------------------------------- REPURCHASE AGREEMENT - 0.05% - ---------------------------------------------------------------- Investors Bank & Trust Tri Party Repurchase Agreement, dated 10/31/00, due 11/01/00, with a maturity value of $33,951 and an effective yield of 5.65%. $ 33,945 $ 33,945 - ---------------------------------------------------------------- TOTAL REPURCHASE AGREEMENT (Cost: $33,945) 33,945 - ---------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 100.72% (Cost: $59,425,625) 67,361,155 - ---------------------------------------------------------------- Other Assets, Less Liabilities -- (0.72%) (478,980) - ---------------------------------------------------------------- NET ASSETS -- 100.00% $66,882,175 ================================================================ + Non-income earning securities. ++ Represents investment of collateral received from securities lending transactions. See Note 5. See notes to financial statements. - -------------------------------------------------------------------------------- page 66 iShares iShares Dow Jones U.S. Internet Index Fund Schedule of Investments October 31, 2000 (Unaudited) Security Shares Value - ----------------------------------------------------------------- COMMON STOCKS - 100.02% - ----------------------------------------------------------------- America Online Inc.+ 123,009 $ 6,203,344 BEA Systems Inc.+ 69,858 5,012,312 Ariba Inc.+ 37,410 4,727,689 VeriSign Inc.+ 33,331 4,399,692 Yahoo! Inc.+ 62,591 3,669,397 Check Point Software Technologies Ltd.+ 22,035 3,489,793 i2 Technologies Inc.+ 18,723 3,182,910 Exodus Communications Inc.+ 77,694 2,607,605 Commerce One Inc.+ 34,102 2,188,922 Amazon.com Inc.+ 44,183 1,618,202 eBay Inc.+ 27,890 1,436,335 Vignette Corp.+ 43,195 1,287,751 Inktomi Corp.+ 20,094 1,274,713 BroadVision Inc.+ 36,249 1,078,408 InfoSpace.com Inc.+ 37,166 747,966 TIBCO Software Inc.+ 10,820 681,660 CMGI Inc.+ 39,911 673,498 Portal Software Inc.+ 18,087 636,436 WebMD Corp.+ 55,491 631,210 E*trade Group Inc.+ 41,322 601,752 Akamai Technologies Inc.+ 11,008 561,408 Internet Capital Group LLC+ 38,481 509,873 At Home Corp. "A"+ 49,263 508,025 CheckFree Corp.+ 9,117 453,571 CNET Networks Inc.+ 13,287 418,541 RealNetworks Inc.+ 19,118 394,010 DoubleClick Inc.+ 22,879 371,784 VerticalNet Inc.+ 10,923 304,649 Ameritrade Holding Corp. "A"+ 19,725 288,477 FreeMarkets Inc.+ 5,090 251,637 PSINET Inc.+ 29,422 195,840 Homestore.com Inc.+ 5,479 186,286 Digital Island Inc.+ 12,474 157,484 Covad Communications Group Inc.+ 28,869 152,464 EarthLink Inc.+ 22,792 148,860 Ticketmaster Online-CitySearch Inc. "B"+ 6,337 101,392 Priceline.com Inc.+ 13,397 77,033 Webvan Group Inc.+ 70,862 69,755 eToys Inc.+ 18,299 68,621 MP3.com Inc.+ 4,998 17,649 - ----------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $61,008,471) 51,386,954 - ----------------------------------------------------------------- SHORT TERM INSTRUMENTS - 10.68% - ----------------------------------------------------------------- Freddie Mac Discount Note 6.40%, 11/21/00++ $2,000,000 $ 2,000,000 Goldman Sachs Financial Square Prime Obligation Fund++ 2,079,991 2,079,991 Providian Temp Cash Money Market Fund++ 1,006,794 1,006,794 Short Term Investment Company Liquid Assets Portfolio++ 400,000 400,000 - ----------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $5,486,785) 5,486,785 - ----------------------------------------------------------------- REPURCHASE AGREEMENT - 0.05% - ----------------------------------------------------------------- Investors Bank & Trust Tri Party Repurchase Agreement, dated 10/31/00, due 11/01/00, with a maturity value of $28,137 and an effective yield of 5.65%. 28,133 28,133 - ----------------------------------------------------------------- TOTAL REPURCHASE AGREEMENT (Cost: $28,133) 28,133 - ----------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 110.75% (Cost: $66,523,389) 56,901,872 - ----------------------------------------------------------------- Other Assets, Less Liabilities -- (10.75%) (5,523,318) - ----------------------------------------------------------------- NET ASSETS -- 100.00% $51,378,554 ================================================================= + 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 67 iShares Dow Jones U.S. Real Estate Index Fund Schedule of Investments October 31, 2000 (Unaudited) Security Shares Value - --------------------------------------------------------------- COMMON STOCKS - 99.04% - --------------------------------------------------------------- Equity Office Properties Trust 92,187 $ 2,777,133 Equity Residential Properties Trust 40,213 1,892,524 Spieker Properties Inc. 21,329 1,181,093 Prologis Trust 53,547 1,124,487 AvalonBay Communities Inc. 21,691 996,430 Vornado Realty Trust 28,248 983,384 Simon Property Group Inc. 42,620 950,959 Apartment Investment & Management Co. "A" 20,558 939,244 Archstone Communities Trust 39,778 937,269 Duke-Weeks Realty Corp. 39,004 923,907 Homestore.com Inc.+ 25,277 859,418 Kimco Realty Corp. 19,936 802,424 Crescent Real Estate Equities Co. 35,731 719,086 Boston Properties Inc. 16,934 685,827 CarrAmerica Realty Corp. 21,794 644,285 Public Storage Inc. 28,227 635,108 AMB Property Corp. 25,962 610,107 Liberty Property Trust 21,943 580,118 St. Joe Company (The) 27,664 558,467 Host Marriott Corp. 50,568 537,285 Rouse Co. 21,558 532,213 Arden Realty Inc. 20,617 494,808 Health Care Property Investors Inc. 16,673 489,770 General Growth Properties Inc. 15,946 470,407 IndyMac Mortgage Holdings Inc.+ 21,026 438,918 BRE Properties Inc. 13,700 433,261 Post Properties Inc. 12,122 423,512 Highwoods Properties Inc. 19,430 420,174 Mack-Cali Realty Corp. 15,453 419,163 Cousins Properties Inc. 15,904 413,504 Hospitality Properties Trust 18,385 396,427 First Industrial Realty Trust 12,610 389,334 Camden Property Trust 12,447 356,295 New Plan Excel Realty Trust 28,529 351,263 Reckson Associates Realty Corp. 14,694 332,452 Prentiss Properties Trust 11,831 300,212 FelCor Lodging Trust Inc. 13,166 288,829 Meristar Hospitality Corp. 14,968 286,263 HRPT Properties Trust 42,947 276,471 Healthcare Realty Trust 13,058 260,344 Storage USA Inc. 9,008 251,661 Federal Realty Investment Trust 12,808 $ 246,554 Security Capital Group "B"+ 12,278 234,049 Nationwide Health Properties Inc. 15,048 224,780 Kilroy Realty Corp. 8,613 224,476 Macerich Co. (The) 11,123 218,289 Sl Green Realty Corp. 7,942 212,945 iStar Financial Inc. 10,385 207,700 Shurgard Storage Centers Inc. 9,063 205,617 Developers Diversified Realty Corp. 16,531 197,339 Brandywine Realty Trust 8,841 169,084 Chelsea GCA Realty Inc. 5,190 167,378 CBL & Associates Properties Inc. 7,135 164,997 Health Care Inc. 9,300 164,494 Home Properties of NY Inc. 6,034 164,049 LNR Property Corp. 7,570 163,701 Manufactured Home Communities Inc. 6,407 159,374 Fairfield Communities Inc.+ 11,533 146,325 Glenborough Realty Trust Inc. 8,312 133,512 Mills Corp. 7,813 133,309 Meditrust Corp.+ 46,691 128,400 RFS Hotel Investors Inc. 7,972 102,640 Koger Equity Inc. 6,189 98,637 JDN Realty Corp. 8,713 95,299 Capital Automotive 6,827 88,004 Colonial Properties Trust 3,312 81,351 Equity Inns Inc. 12,084 74,770 Burnham Pacific Properties Inc. 10,683 58,089 - --------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $32,736,104) 31,628,998 - ---------------------------------------------------------------- SHORT TERM INSTRUMENTS - 5.39% - ---------------------------------------------------------------- Freddie Mac Discount Note 6.40%, 11/21/00++ $257,257 257,257 Goldman Sachs Financial Square Prime Obligation Fund++ 287,033 287,033 Providian Temp Cash Money Market Fund++ 315,991 315,991 Short Term Investment Company Liquid Assets Portfolio++ 861,793 861,793 - ---------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $1,722,074) 1,722,074 - ---------------------------------------------------------------- - -------------------------------------------------------------------------------- page 68 iShares iShares Dow Jones U.S. Real Estate Index Fund Schedule of Investments (continued) October 31, 2000 (Unaudited) Security Principal Value - ---------------------------------------------------------------- REPURCHASE AGREEMENT - 0.07% - ---------------------------------------------------------------- Investors Bank & Trust Tri Party Repurchase Agreement, dated 10/31/00, due 11/01/00, with a maturity value of $20,171 and an effective yield of 5.65%. $ 20,168 $ 20,168 - ---------------------------------------------------------------- TOTAL REPURCHASE AGREEMENT (Cost: $20,168) 20,168 - ---------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 104.50% (Cost $34,478,346) 33,371,240 - ---------------------------------------------------------------- Other Assets, Less Liabilities -- (4.50%) (1,435,817) - ---------------------------------------------------------------- NET ASSETS -- 100.00% $31,935,423 ================================================================ + 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 69 Statements of Assets and Liabilities October 31, 2000 (Unaudited)
iShares Dow Jones U.S. --------------------------------------------------------------- Basic Consumer Consumer Total Materials Cyclical Non-Cyclical Energy Market Sector Sector Sector Sector Index Fund Index Fund Index Fund Index Fund Index Fund - --------------------------------------------------------------------------------------------------------- ASSETS Investments at cost $30,648,032 $8,956,707 $15,219,604 $14,151,965 $39,621,457 --------------------------------------------------------------- Investments in securities, at market value (Note 1) $30,143,723 $8,609,502 $14,483,136 $14,881,614 $38,428,394 Receivables: Investment securities sold 9,707 - - 59,536 4,871 Dividends and interest 21,558 4,006 7,037 16,672 11,225 --------------------------------------------------------------- Total Assets 30,174,988 8,613,508 14,490,173 14,957,822 38,444,490 --------------------------------------------------------------- LIABILITIES Payables: Investment securities purchased 30,243 - - 59,841 - Advisory fees (Note 2) 7,397 8,186 14,871 13,624 35,082 --------------------------------------------------------------- Total Liabilities 37,640 8,186 14,871 73,465 35,082 --------------------------------------------------------------- NET ASSETS $30,137,348 $8,605,322 $14,475,302 $14,884,357 $38,409,408 =============================================================== Net assets consist of: Paid-in capital $30,629,112 $9,208,270 $15,129,024 $14,258,218 $38,739,621 Undistributed (distributions in excess of) net investment income 5,646 (403) 3,070 9,299 (2,099) Undistributed net realized gain (loss) 6,899 (255,340) 79,676 (112,809) 864,949 Net unrealized appreciation (depreciation) (504,309) (347,205) (736,468) 729,649 (1,193,063) --------------------------------------------------------------- NET ASSETS $30,137,348 $8,605,322 $14,475,302 $14,884,357 $38,409,408 =============================================================== iShares outstanding 450,000 250,000 250,000 350,000 750,000 =============================================================== Net asset value per iShare $ 66.97 $ 34.42 $ 57.90 $ 42.53 $ 51.21 ===============================================================
- -------------------------------------------------------------------------------- See notes to financial statements. - -------------------------------------------------------------------------------- page 70 iShares Statements of Assets and Liabilities (continued) October 31, 2000 (Unaudited)
iShares Dow Jones U.S. ----------------------------------------------------------------- Telecom- Financial Healthcare Industrial Technology munications Sector Sector Sector Sector Sector Index Fund Index Fund Index Fund Index Fund Index Fund - ----------------------------------------------------------------------------------------------------------- ASSETS Investments at cost $110,773,157 $32,290,171 $26,467,362 $131,221,404 $43,534,012 ----------------------------------------------------------------- Investments in securities, at market value (Note 1) $128,160,414 $34,155,741 $27,078,305 $123,860,170 $42,144,051 Receivables: Investment securities sold 46,032 4,944 8,040 67,180 18,600 Dividends and interest 130,043 17,447 9,293 5,862 122,737 ----------------------------------------------------------------- Total Assets 128,336,489 34,178,132 27,095,638 123,933,212 42,285,388 ----------------------------------------------------------------- LIABILITIES Payables: Investment securities purchased - - - - 125,395 Collateral for securities on loan (Note 5) 911,199 - - 6,452,833 3,223,336 Advisory fees (Note 2) 116,771 30,879 26,312 126,005 36,957 ----------------------------------------------------------------- Total Liabilities 1,027,970 30,879 26,312 6,578,838 3,385,688 ----------------------------------------------------------------- NET ASSETS $127,308,519 $34,147,253 $27,069,326 $117,354,374 $38,899,700 ================================================================= NET ASSETS CONSIST OF: Paid-in capital $109,574,111 $31,144,460 $26,264,668 $123,942,764 $39,350,488 Undistributed (distributions in excess of) net investment income (loss) 39,192 (7,058) (2,107) (280,887) (6,532) Undistributed net realized gain 307,959 1,144,281 195,822 1,053,731 945,705 Net unrealized appreciation (depreciation) 17,387,257 1,865,570 610,943 (7,361,234) (1,389,961) ----------------------------------------------------------------- NET ASSETS $127,308,519 $34,147,253 $27,069,326 $117,354,374 $38,899,700 ================================================================= iShares outstanding 1,500,000 500,000 450,000 1,100,000 750,000 ================================================================= Net asset value per iShare $ 84.87 $ 68.29 $ 60.15 $ 106.69 $ 51.87 ================================================================= - -----------------------------------------------------------------------------------------------------------
See notes to financial statements. - -------------------------------------------------------------------------------- iShares Financial Statements page 71 Statements of Assets and Liabilities (continued) October 31, 2000 (Unaudited)
iShares Dow Jones U.S. --------------------------------------------------------------- Utilities Financial Real Sector Chemicals Services Internet Estate Index Fund Index Fund Index Fund Index Fund Index Fund - --------------------------------------------------------------------------------------------------------- ASSETS Investments at cost $40,944,956 $18,223,840 $59,425,625 $66,523,389 $34,478,346 --------------------------------------------------------------- Investments in securities, at market value (Note 1) $45,460,724 $17,294,088 $67,361,155 $56,901,872 $33,371,240 Receivables: Investment securities sold - - - 726,579 262,464 Dividends and interest 85,546 12,707 76,170 2,565 76,185 --------------------------------------------------------------- Total Assets 45,546,270 17,306,795 67,437,325 57,631,016 33,709,889 --------------------------------------------------------------- LIABILITIES Payables: Investment securities purchased - - - 698,606 25,704 Collateral for securities on loan (Note 5) - - 488,490 5,486,785 1,722,074 Advisory fees (Note 2) 42,483 16,220 66,660 67,071 26,688 --------------------------------------------------------------- Total Liabilities 42,483 16,220 555,150 6,252,462 1,774,466 --------------------------------------------------------------- NET ASSETS $45,503,787 $17,290,575 $66,882,175 $51,378,554 $31,935,423 =============================================================== NET ASSETS CONSIST OF: Paid-in capital $40,693,693 $18,243,539 $57,758,237 $50,339,225 $32,372,724 Undistributed net investment income (loss) 34,602 1,199 21,430 (195,556) 40,333 Undistributed net realized gain (loss) 259,724 (24,411) 1,166,978 10,856,402 629,472 Net unrealized appreciation (depreciation) 4,515,768 (929,752) 7,935,530 (9,621,517) (1,107,106) --------------------------------------------------------------- NET ASSETS $45,503,787 $17,290,575 $66,882,175 $51,378,554 $31,935,423 =============================================================== iShares outstanding 550,000 450,000 700,000 900,000 450,000 =============================================================== Net asset value per iShare $ 82.73 $ 38.42 $ 95.55 $ 57.09 $ 70.97 =============================================================== - ---------------------------------------------------------------------------------------------------------
See notes to financial statements. - -------------------------------------------------------------------------------- page 72 iShares Statements of Operations For the period ended October 31, 2000 (Unaudited)
iShares Dow Jones U.S. -------------------------------------------------------------------------- Basic Consumer Consumer Total Materials Cyclical Non-Cyclical Energy Market Sector Sector Sector Sector Index Fund* Index Fund* Index Fund* Index Fund* Index Fund* - -------------------------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME Dividends $ 60,566 $ 69,889 $ 40,934 $ 83,633 $ 148,327 Interest 233 363 308 275 937 -------------------------------------------------------------------------- Total investment income 60,799 70,252 41,242 83,908 149,264 -------------------------------------------------------------------------- EXPENSES (NOTE 2) Advisory fees 11,915 19,436 34,250 29,168 71,542 -------------------------------------------------------------------------- Total expenses 11,915 19,436 34,250 29,168 71,542 -------------------------------------------------------------------------- Net investment income 48,884 50,816 6,992 54,740 77,722 -------------------------------------------------------------------------- NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from investments 6,899 (255,340) 79,676 (112,809) 864,949 Net change in unrealized appreciation (depreciation) on investments (504,309) (347,205) (736,468) 729,649 (1,193,063) -------------------------------------------------------------------------- Net realized and unrealized gain (loss) (497,410) (602,545) (656,792) 616,840 (328,114) -------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (448,526) $(551,729) $(649,800) $ 671,580 $ (250,392) ==========================================================================
- -------------------------------------------------------------------------------- * For the period from June 12, 2000 (commencement of operations) to October 31, 2000. See notes to financial statements. - -------------------------------------------------------------------------------- iShares Financial Statements page 73 Statements of Operations (continued) For the period ended October 31, 2000 (Unaudited)
iShares Dow Jones U.S. -------------------------------------------------------------------------------- Telecom- Financial Healthcare Industrial Technology munications Sector Sector Sector Sector Sector Index Fund** Index Fund*** Index Fund*** Index Fund* Index Fund** - -------------------------------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME Dividends $ 899,287 $ 74,353 $ 89,290 $ 48,453 $ 271,890 Interest+ 3,542 595 816 5,780 13,770 -------------------------------------------------------------------------------- Total investment income 902,829 74,948 90,106 54,233 285,660 -------------------------------------------------------------------------------- EXPENSES (NOTE 2) Advisory fees 268,348 58,399 59,199 335,120 117,106 -------------------------------------------------------------------------------- Total expenses 268,348 58,399 59,199 335,120 117,106 -------------------------------------------------------------------------------- Net investment income (loss) 634,481 16,549 30,907 (280,887) 168,554 -------------------------------------------------------------------------------- NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain from investments 307,959 1,144,281 195,822 1,053,731 945,705 Net change in unrealized appreciation (depreciation) on investments 17,387,257 1,865,570 610,943 (7,361,234) (1,389,961) -------------------------------------------------------------------------------- Net realized and unrealized gain (loss) 17,695,216 3,009,851 806,765 (6,307,503) (444,256) -------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $18,329,697 $ 3,026,400 $ 837,672 $(6,588,390) $ (275,702) ================================================================================ - -------------------------------------------------------------------------------------------------------------------------------- + Includes securities lending income of: $ 1,975 $ - $ - $ 3,076 $ 10,153 - --------------------------------------------------------------------------------------------------------------------------------
* For the period from May 15, 2000 (commencement of operations) to October 31, 2000. ** For the period from May 22, 2000 (commencement of operations) to October 31, 2000. *** For the period from June 12, 2000 (commencement of operations) to October 31, 2000. See notes to financial statements. - -------------------------------------------------------------------------------- page 74 iShares Statements of Operations (continued) For the period ended October 31, 2000 (Unaudited)
IShares Dow Jones U.S. ---------------------------------------------------------------------------------------------- Utilities Financial Real Sector Chemicals Services Internet Estate Index Fund** Index Fund** Index Fund** Index Fund* Index Fund** - --------------------------------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME Dividends $ 399,844 $ 154,933 $ 427,413 $ 170 $ 660,604 Interest+ 443 618 2,101 22,383 604 ----------------------------------------------------------------------------------------------- Total investment income 400,287 155,551 429,514 22,553 661,208 ----------------------------------------------------------------------------------------------- EXPENSES (NOTE 2) Advisory fees 78,347 37,658 139,674 218,109 50,243 ----------------------------------------------------------------------------------------------- Total expenses 78,347 37,658 139,674 218,109 50,243 ----------------------------------------------------------------------------------------------- Net investment income (loss) 321,940 117,893 289,840 (195,556) 610,965 ----------------------------------------------------------------------------------------------- NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from investments 259,724 (24,411) 1,166,978 10,856,402 629,472 Net change in unrealized appreciation (depreciation) on investments 4,515,768 (929,752) 7,935,530 (9,621,517) (1,107,106) ----------------------------------------------------------------------------------------------- Net realized and unrealized gain (loss) 4,775,492 (954,163) 9,102,508 1,234,885 (477,634) ----------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 5,097,432 $(836,270) $9,392,348 $ 1,039,329 $ 133,331 =============================================================================================== - --------------------------------------------------------------------------------------------------------------------------------- +Includes securities lending income of: $ - $ - $ 1,289 $ 18,362 $ 4 - ---------------------------------------------------------------------------------------------------------------------------------
* For the period from May 15, 2000 (commencement of operations) to October 31, 2000. ** For the period from June 12, 2000 (commencement of operations) to October 31, 2000. See notes to financial statements. - -------------------------------------------------------------------------------- iShares Financial Statements page 75 Statements of Changes in Net Assets For the period ended October 31, 2000 (Unaudited)
iShares Dow Jones U.S. -------------------------------------------------------------------------------- Basic Consumer Consumer Total Materials Cyclical Non-Cyclical Energy Market Sector Sector Sector Sector Index Fund* Index Fund* Index Fund* Index Fund* Index Fund* - ----------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income $ 48,884 $ 50,816 $ 6,992 $ 54,740 $ 77,722 Net realized gain (loss) 6,899 (255,340) 79,676 (112,809) 864,949 Net change in unrealized appreciation (depreciation) (504,309) (347,205) (736,468) 729,649 (1,193,063) ----------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (448,526) (551,729) (649,800) 671,580 (250,392) ----------------------------------------------------------------------------------- Distributions to iShareholders: From net investment income (43,238) (51,219) (3,922) (45,441) (79,821) ----------------------------------------------------------------------------------- Total distributions to iShareholders (43,238) (51,219) (3,922) (45,441) (79,821) ----------------------------------------------------------------------------------- iShares Transactions: iShares sold 30,629,112 12,403,712 18,015,428 14,258,218 52,105,219 iShares redeemed - (3,195,442) (2,886,404) - (13,365,598) ----------------------------------------------------------------------------------- Net increase in net assets from iShares transactions 30,629,112 9,208,270 15,129,024 14,258,218 38,739,621 ----------------------------------------------------------------------------------- Increase in net assets 30,137,348 8,605,322 14,475,302 14,884,357 38,409,408 NET ASSETS: Beginning of period - - - - - ----------------------------------------------------------------------------------- End of period $ 30,137,348 $ 8,605,322 $14,475,302 $14,884,357 $38,409,408 =================================================================================== Undistributed (distributions in excess of) net investment income included in net assets at end of period $ 5,646 $ (403) $ 3,070 $ 9,299 $ (2,099) =================================================================================== iSHARES ISSUED AND REDEEMED: iShares sold 450,000 350,000 300,000 350,000 1,000,000 iShares redeemed - (100,000) (50,000) - (250,000) ----------------------------------------------------------------------------------- Net increase in iShares outstanding 450,000 250,000 250,000 350,000 750,000 =================================================================================== - -----------------------------------------------------------------------------------------------------------------------------
* For the period from June 12, 2000 (commencement of operations) to October 31, 2000. See notes to financial statements. - -------------------------------------------------------------------------------- page 76 iShares Statements of Changes in Net Assets (continued) For the period ended October 31, 2000 (Unaudited)
iShares Dow Jones U.S. --------------------------------------------------------------------------------- Telecom- Financial Healthcare Industrial Technology munications Sector Sector Sector Sector Sector Index Fund** Index Fund*** Index Fund*** Index Fund* Index Fund** - --------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income (loss) $ 634,481 $ 16,549 $ 30,907 $ (280,887) $ 168,554 Net realized gain 307,959 1,144,281 195,822 1,053,731 945,705 Net change in unrealized appreciation (depreciation) 17,387,257 1,865,570 610,943 (7,361,234) (1,389,961) ------------------------------------------------------------------------------ Net increase (decrease) in net assets resulting from operations 18,329,697 3,026,400 837,672 (6,588,390) (275,702) ------------------------------------------------------------------------------ Distributions to iShareholders: From net investment income (595,289) (23,607) (33,014) - (175,086) ------------------------------------------------------------------------------ Total distributions to iShareholders (595,289) (23,607) (33,014) - (175,086) ------------------------------------------------------------------------------ iShares Transactions: iShares sold 113,763,345 41,012,434 29,391,488 123,942,764 72,412,050 iShares redeemed (4,189,234) (9,867,974) (3,126,820) - (33,061,562) ------------------------------------------------------------------------------ Net increase in net assets from iShares transactions 109,574,111 31,144,460 26,264,668 123,942,764 39,350,488 ------------------------------------------------------------------------------ Increase in net assets 127,308,519 34,147,253 27,069,326 117,354,374 38,899,700 NET ASSETS: Beginning of period - - - - - ------------------------------------------------------------------------------ End of period $127,308,519 $34,147,253 $27,069,326 $117,354,374 $ 38,899,700 ============================================================================== Undistributed (distributions in excess of) net investment income (loss) included in net assets at end of period $ 39,192 $ (7,058) $ (2,107) $ (280,887) $ (6,532) ============================================================================== iSHARES ISSUED AND REDEEMED: iShares sold 1,550,000 650,000 500,000 1,100,000 1,300,000 iShares redeemed (50,000) (150,000) (50,000) - (550,000) ------------------------------------------------------------------------------ Net increase in iShares outstanding 1,500,000 500,000 450,000 1,100,000 750,000 ============================================================================== - ---------------------------------------------------------------------------------------------------------------------------
* For the period from May 15, 2000 (commencement of operations) to October 31, 2000. ** For the period from May 22, 2000 (commencement of operations) to October 31, 2000. *** For the period from June 12, 2000 (commencement of operations) to October 31, 2000. See notes to financial statements. - -------------------------------------------------------------------------------- iShares Financial Statements page 77 Statements of Changes in Net Assets (continued) For the period ended October 31, 2000 (Unaudited)
iShares Dow Jones U.S. --------------------------------------------------------------------------------------- Utilities Financial Real Sector Chemicals Services Internet Estate Index Fund** Index Fund** Index Fund** Index Fund* Index Fund** - --------------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income (loss) $ 321,940 $ 117,893 $ 289,840 $ (195,556) $ 610,965 Net realized gain (loss) 259,724 (24,411) 1,166,978 10,856,402 629,472 Net change in unrealized appreciation (depreciation) 4,515,768 (929,752) 7,935,530 (9,621,517) (1,107,106) --------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 5,097,432 (836,270) 9,392,348 1,039,329 133,331 --------------------------------------------------------------------------------------- Distributions To iShareholders: From net investment income (287,338) (116,694) (268,410) - (570,632) --------------------------------------------------------------------------------------- Total distributions to iShareholders (287,338) (116,694) (268,410) - (570,632) --------------------------------------------------------------------------------------- iShares Transactions: iShares sold 40,693,693 19,905,022 62,520,385 141,226,573 39,826,180 iShares redeemed - (1,661,483) (4,762,148) (90,887,348) (7,453,456) --------------------------------------------------------------------------------------- Net increase in net assets from iShares transactions 40,693,693 18,243,539 57,758,237 50,339,225 32,372,724 --------------------------------------------------------------------------------------- Increase in net assets 45,503,787 17,290,575 66,882,175 51,378,554 31,935,423 NET ASSETS: Beginning of period - - - - - --------------------------------------------------------------------------------------- End of period $45,503,787 $17,290,575 $66,882,175 $ 51,378,554 $31,935,423 ======================================================================================= Undistributed net investment income (loss) included in net assets at end of period $ 34,602 $ 1,199 $ 21,430 $ (195,556) $ 40,333 ======================================================================================= iSHARES ISSUED AND REDEEMED iShares sold 550,000 500,000 750,000 2,200,000 550,000 iShares redeemed - (50,000) (50,000) (1,300,000) (100,000) --------------------------------------------------------------------------------------- Net increase in iShares outstanding 550,000 450,000 700,000 900,000 450,000 ======================================================================================= - ---------------------------------------------------------------------------------------------------------------------------------
* For the period from May 15, 2000 (commencement of operations) to October 31, 2000. ** For the period from June 12, 2000 (commencement of operations) to October 31, 2000. See notes to financial statements. - -------------------------------------------------------------------------------- page 78 iShares Financial Highlights (For a share outstanding throughout each period) For the period ended October 31, 2000 (Unaudited)
iShares Dow Jones U.S. ---------------------------------------------------------------------------------- Basic Consumer Consumer Total Materials Cyclical Non-cyclical Energy Market Sector Sector Sector Sector Index Fund* Index Fund* Index Fund* Index Fund* Index Fund* - ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 67.15 $ 36.04 $ 59.63 $ 40.83 $ 50.79 -------------------------------------------------------------------------------- Income from investment operations: Net investment income 0.14 0.20 0.03 0.16 0.11 Net realized and unrealized gain (loss) (0.19) (1.62) (1.74) 1.67 0.42 -------------------------------------------------------------------------------- Total from investment operations (0.05) (1.42) (1.71) 1.83 0.53 -------------------------------------------------------------------------------- Less distributions from: Net investment income (0.13) (0.20) (0.02) (0.13) (0.11) -------------------------------------------------------------------------------- Total distributions (0.13) (0.20) (0.02) (0.13) (0.11) -------------------------------------------------------------------------------- Net asset value, end of period $ 66.97 $ 34.42 $ 57.90 $ 42.53 $ 51.21 ================================================================================ Total return (not annualized) (0.07)% (3.86)% (2.87)% 4.51% 1.03% ================================================================================ Ratios/Supplemental data: Net assets, end of period (000s) $ 30,137 $ 8,605 $ 14,475 $ 14,884 $ 38,409 Ratio of expenses to average net assets+ 0.20% 0.60% 0.60% 0.60% 0.60% Ratio of net investment income to average net assets+ 0.81% 1.56% 0.12% 1.12% 0.65% Portfolio turnover rate++ 1% 10% 2% 7% 6%
- ------------------------------------------------------------------------------- * For the period from June 12, 2000 (commencement of operations) to October 31, 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 79 Financial Highlights (continued) (For a share outstanding throughout each period) For the period ended october 31, 2000 (Unaudited)
iShares Dow Jones U.S. --------------------------------------------------------------------------------- Telecom- Financial Heathcare Industrial Technology munications Sector Sector Sector Sector Sector Index Fund** Index Fund*** Index Fund*** Index Fund* Index Fund** - -------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 71.80 $ 59.53 $ 58.11 $ 116.57 $ 56.81 --------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) 0.47 0.04 0.07 (0.26) 0.21 Net realized and unrealized gain (loss) 13.04 8.77 2.04 (9.62) (4.93) --------------------------------------------------------------------------------- Total from investment operations 13.51 8.81 2.11 (9.88) (4.72) --------------------------------------------------------------------------------- Less distributions from: Net investment income (0.44) (0.05) (0.07) -- (0.22) --------------------------------------------------------------------------------- Total distributions (0.44) (0.05) (0.07) -- (0.22) --------------------------------------------------------------------------------- Net asset value, end of period $ 84.87 $ 68.29 $ 60.15 $ 106.69 $ 51.87 ================================================================================= Total return (not annualized) 18.90% 14.80% 3.64% $ 117,354 $ 38,900 ================================================================================= Ratios/Supplemental data: Net assets, end of period (000s) $ 127,309 $ 34,147 $ 27,069 0.60% 0.60% Ratio of expenses to average net assets+ 0.60% 0.60% 0.60% Ratio of net investment income (loss) to average net assets+ 1.41% 0.17% 0.31% (0.50)% 0.86% Portfolio turnover rate++ 3% 4% 5% 5% 42%
- ------------------------------------------------------------------------------- * For the period from May 15, 2000 (commencement of operations) to October 31, 2000. ** For the period from May 22, 2000 (commencement of operations) to October 31, 2000. *** For the period from June 12, 2000 (commencement of operations) to October 31, 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 80 iShares Financial Highlights (continued) (For a share outstanding throughout each period) For the period ended October 31, 2000 (Unaudited)
iShares Dow Jones U.S. --------------------------------------------------------------------------------------- Utilities Financial Real Sector Chemicals Services Internet Estate Index Fund** Index Fund** Index Fund** Index Fund* Index Fund** - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 69.81 $ 40.26 $ 85.58 $ 67.97 $ 68.97 ---------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) 0.61 0.26 0.41 (0.22) 1.64 Net realized and unrealized gain (loss) 12.86 (1.84) 9.94 (10.66) 1.91 --------------------------------------------------------------------------------------- Total from investment operations 13.47 (1.58) 10.35 (10.88) 3.55 --------------------------------------------------------------------------------------- Less distributions from: Net investment income (0.55) (0.26) (0.38) -- (1.55) --------------------------------------------------------------------------------------- Total distributions (0.55) (0.26) (0.38) -- (1.55) --------------------------------------------------------------------------------------- Net asset value, end of period $ 82.73 $ 38.42 $ 95.55 $ 57.09 $ 70.97 ======================================================================================= Total Return (Not Annualized) 19.32% (3.86)% 12.15% (16.01)% 5.16% ====================================================================================== Ratios/Supplemental data: Net assets, end of period (000s) $ 45,504 $ 17,291 $ 66,882 $ 51,379 $ 31,935 Ratio of expenses to average net assets+ 0.60% 0.60% 0.60% 0.60% 0.60% Ratio of net investment income (loss) to average net assets+ 2.44% 1.86% 1.24% (0.54)% 7.22% Portfolio turnover rate++ 1% 8% 2% 30% 8% - -----------------------------------------------------------------------------------------------------------------------------------
* For the period from May 15, 2000 (commencement of operations) to October 31, 2000. ** For the period from June 12, 2000 (commencement of operations) to October 31, 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 81 81 iShares Trust Notes to the Financial Statements (Unaudited) 1. SIGNIFICANT ACCOUNTING POLICIES As of October 31, 2000, the iShares Trust (the "Trust") offers 37 investment portfolios or funds. Each of these funds 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 - iShares Russell 3000 Index - - iShares S&P 500/BARRA Growth Market Index Fund Fund Index Fund - iShares Dow Jones U.s. Basic - iShares Russell 3000 Growth - - iShares S&P 500/BARRA Value Materials Sector Index Fund Index Fund Index Fund - iShares Dow Jones U.s. - iShares Russell 3000 Value - - iShares S&P Midcap 400 Index Consumer Cyclical Sector Index Index Fund Fund Fund - iShares Russell 2000 Index - - iShares S&P Midcap 400/BARRA - iShares Dow Jones U.s. Fund Growth Index Fund Consumer Non-cyclical Sector - iShares Russell 2000 Growth - - iShares S&P Midcap 400/BARRA Index Fund Index Fund Value Index Fund - iShares Dow Jones U.s. Energy - iShares Russell 2000 Value - - iShares S&P Smallcap 600 Index Sector Index Fund Index Fund Fund - iShares Dow Jones U.s. - iShares Russell 1000 Index - - iShares S&P Smallcap 600/BARRA Financial Sector Index Fund Fund Growth Index Fund - iShares Dow Jones U.s. - iShares Russell 1000 Growth - - iShares S&P Smallcap 600/BARRA Healthcare Sector Index Fund Index Fund Value Index Fund - iShares Dow Jones U.s. - iShares Russell 1000 Value - - iShares S&P 100 Index Fund* Industrial Sector Index Fund 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 October 27, 2000. ** Public Offering Date On December 8, 2000. These financial statements relate to the iShares Dow Jones Series of investment portfolios (each a "Fund", collectively the "Funds"). Because certain of the Funds concentrate their investments in a particular industry or group of industries, their portfolios may be subject to special risks and considerations not typically associated with investing in a broader range of domestic securities. - -------------------------------------------------------------------------------- page 82 iShares 82 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. 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 October 31, 2000. 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 - -------------------------------------------------------------------------------- iShares Notes To Financial Statements page 83 iShares Trust Notes To The Financial Statements (Unaudited) (continued) 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 October 31, 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 October 31, 2000 by the Funds were fully collateralized by U.S. Government obligations with a rate of 6.88%, a maturity date of 05/15/06 and an aggregate market value of $356,833. 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. 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 Dow Jones U.S. Index Fund Fee --------------------------------------------- Total Market 0.20% Basic Materials Sector 0.60 Consumer Cyclical Sector 0.60 Consumer Non-Cyclical Sector 0.60 Energy Sector 0.60 Financial Sector 0.60 Healthcare Sector 0.60 Industrial Sector 0.60 Technology Sector 0.60 Telecommunications Sector 0.60 Utilities Sector 0.60 Chemicals 0.60 Financial Services 0.60 Internet 0.60 Real Estate 0.60 --------------------------------------------- - -------------------------------------------------------------------------------- page 84 iShares iShares Trust Notes To The Financial Statements (Unaudited) (continued) 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 October 31, 2000, were as follows: ----------------------------------------------------------- iShares Dow Jones U.S. Index Fund Purchases Sales ----------------------------------------------------------- Total Market $ 416,050 $ 253,954 Basic Materials Sector 988,704 787,040 Consumer Cyclical Sector 526,356 320,939 Consumer Non-Cyclical Sector 1,172,874 962,077 Energy Sector 2,035,361 1,803,720 Financial Sector 3,008,449 2,812,634 Healthcare Sector 1,356,065 1,157,335 Industrial Sector 1,563,747 1,320,379 Technology Sector 6,181,684 6,078,437 Telecommunications Sector 19,616,772 19,184,712 Utilities Sector 743,395 498,651 Chemicals 1,590,363 1,332,047 Financial Services 1,174,806 960,848 Internet 24,025,535 23,899,206 Real Estate 1,697,642 1,747,075 ----------------------------------------------------------- - -------------------------------------------------------------------------------- iShares Notes To Financial Statements page 85 iShares Trust Notes to the Financial Statements (Unaudited) (continued) In-kind transactions for the period ended October 31, 2000, were as follows: ------------------------------------------------------------- In-kind In-kind iShares Dow Jones U.S. Index Fund Purchases Sales ------------------------------------------------------------- Total Market $ 30,665,129 $ 206,462 Basic Materials Sector 12,353,743 3,346,629 Consumer Cyclical Sector 18,903,344 3,979,072 Consumer Non-Cyclical Sector 14,564,687 515,896 Energy Sector 54,365,067 15,852,795 Financial Sector 118,468,845 9,169,123 Healthcare Sector 41,358,335 10,421,474 Industrial Sector 29,708,963 3,688,332 Technology Sector 130,787,830 7,214,594 Telecommunications Sector 75,027,059 36,108,510 Utilities Sector 41,329,482 908,701 Chemicals 20,636,507 2,652,573 Financial Services 64,453,338 6,931,084 Internet 151,329,626 101,303,886 Real Estate 40,886,719 8,730,654 ------------------------------------------------------------- At October 31, 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 Dow Jones U.S. index Fund Cost Appreciation Depreciation (Depreciation) ------------------------------------------------------------------------------------------- Total Market $ 30,648,032 $ 1,836,094 $ (2,340,403) $ (504,309) Basic Materials Sector 8,956,707 253,225 (600,430) (347,205) Consumer Cyclical Sector 15,219,604 760,168 (1,496,636) (736,468) Consumer Non-Cyclical Sector 14,151,965 1,668,571 (938,922) 729,649 Energy Sector 39,621,457 868,070 (2,061,133) (1,193,063) Financial Sector 110,773,157 19,426,644 (2,039,387) 17,387,257 Healthcare Sector 32,290,171 3,181,007 (1,315,437) 1,865,570 Industrial Sector 26,467,362 2,712,777 (2,101,834) 610,943 Technology Sector 131,221,404 12,771,896 (20,133,130) (7,361,234) Telecommunications Sector 43,534,012 4,294,235 (5,684,196) (1,389,961) Utilities Sector 40,944,956 4,864,640 (348,872) 4,515,768 Chemicals 18,223,840 593,645 (1,523,397) (929,752) Financial Services 59,425,625 8,828,595 (893,065) 7,935,530 Internet 66,523,389 6,735,235 (16,356,752) (9,621,517) Real Estate 34,478,346 285,693 (1,392,799) (1,107,106) -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- page 86 iShares iShares Trust Notes to the Financial Statements (Unaudited) (continued) 4. iSHARES TRANSACTIONS At October 31, 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. 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 October 31, 2000 and the value of the related collateral were as follows: --------------------------------------------------------- Value of Value of iShares Dow Jones U.S. index Fund Securities Collateral --------------------------------------------------------- Financial Sector $ 864,755 $ 911,199 Technology Sector 6,293,161 6,452,833 Telecommunications Sector 3,027,723 3,223,336 Financial Services 465,258 488,490 Internet 5,281,908 5,486,785 Real Estate 1,633,146 1,722,074 --------------------------------------------------------- - -------------------------------------------------------------------------------- iShares Notes to Financial Statements page 87 iShares 45 Fremont Street www.ishares.com 1-800-iSHARES - ------------------------- BARCLAYS GLOBAL INVESTORS San Francisco, CA 1-800-474-2737 94105 iShares are distributed by SEI Investments Distribution Co. Barclays Global Fund Advisors serves as an adviser to iShares and is a subsidiary of Barclays Global Investors, N.A., neither of which is affiliated with SEI. IBT serves as administrator, custodian, securities lending agent and transfer agent for the iShares Dow Jones Series. iShares are not sponsored, endorsed, sold of promoted by Dow Jones & Company, Inc. Nor does this company make any representation regarding the advisability of investing in iShares. (c)2000 Barclays Global Investors. All rights reserved. iShares is a servicemark of Barclays Global Investors, N.A. All other trademarks, servicemarks or registered trademarks are the property of their respective owners. BGI-F-008-01000 Not FDIC Insured Have no bank guarantee May lose value -----END PRIVACY-ENHANCED MESSAGE-----