N-30D 1 dn30d.txt I SHARES S&P & NASDAQ SERIES ANNUAL REPORT iShares(R) iShares(R) S&P SERIES iShares(R) NASDAQ SERIES [PICTURE] iShares MARCH 31, 2002 2002 ANNUAL REPORT TO SHAREHOLDERS Table of Contents Shareholder Letter............................................................. 1 Market Overview................................................................ 3 Managers' Discussion & Analysis................................................ 6 Schedules of Investments....................................................... 36 iShares S&P 100 Index Fund.................................................. 36 iShares S&P 500 Index Fund.................................................. 38 iShares S&P 500/BARRA Growth Index Fund..................................... 45 iShares S&P 500/BARRA Value Index Fund...................................... 47 iShares S&P MidCap 400 Index Fund........................................... 52 iShares S&P MidCap 400/BARRA Growth Index Fund.............................. 57 iShares S&P MidCap 400/BARRA Value Index Fund............................... 60 iShares S&P SmallCap 600 Index Fund......................................... 64 iShares S&P SmallCap 600/BARRA Growth Index Fund............................ 72 iShares S&P SmallCap 600/BARRA Value Index Fund............................. 75 iShares S&P Global 100 Index Fund........................................... 80 iShares S&P Global Energy Sector Index Fund................................. 83 iShares S&P Global Financials Sector Index Fund............................. 85 iShares S&P Global Healthcare Sector Index Fund............................. 89 iShares S&P Global Technology Sector Index Fund............................. 91 iShares S&P Global Telecommunications Sector Index Fund..................... 94 iShares S&P Europe 350 Index Fund........................................... 96 iShares S&P/TSE 60 Index Fund............................................... 102 iShares S&P Latin America 40 Index Fund..................................... 103 iShares S&P/TOPIX 150 Index Fund............................................ 104 iShares Nasdaq Biotechnology Index Fund..................................... 106 Financial Statements........................................................... 108 Financial Highlights........................................................... 122 Notes to the Financial Statements.............................................. 128 Report of Independent Accountants.............................................. 138 Tax Information (Unaudited).................................................... 139 Shareholder Meeting Results (Unaudited)........................................ 140 Supplemental Information (Unaudited)........................................... 141 Trustees Information (Unaudited)............................................... 153
THIS PAGE INTENTIONALLY LEFT BLANK. To Our Shareholders 2001 was a troubling year for us all: as investors, as business people and as human beings. The year was marked by scores of company closings and layoffs, the near-evaporation of IPOs, a plunging euro and rumblings of a recession. Then there was the emotional shock of September 11, which in turn set off deep financial aftershocks still being felt to this day. It was truly a "baptism by fire" for iShares. After all, iShares were launched only a short time before this complicated period began. By the close of our fiscal year, most traditional mutual funds had shrunk in size, hundreds had shut down entirely,/1/ and plans for dozens of new ones were quietly put on hold. But iShares followed a very different course this year. Instead of shrinking in size, iShares' assets under management grew to over $21 billion by the close of fiscal year 2001, up from $9.1 billion at the end of the previous fiscal year. In fact, iShares became the nation's third-fastest growing family of equity funds/2/, surpassing some of the most established and best-known mutual fund groups. And instead of holding back on new offerings in 2001, Barclays Global Investors opened 19 new iShares funds. With a total of 77 different funds, iShares now gives its investors nearly four times more ways to structure their portfolios than any other provider of exchange traded funds (ETFs). How do we explain such success? Typically, investments that achieve sudden popularity in troubling times are those few "hot funds" which managed to outperform the market benchmarks. That's not the case with iShares. Our funds are designed to neither over- nor underperform their benchmarks, but instead, to seek investment results that correspond to their benchmarks. The fundamental appeal of iShares transcends the market's daily ups and downs. We believe that in 2001, investors and their advisors began to recognize iShares as not merely an investment choice, but as a new type of investment tool. We call them "industrial strength" investment tools, and there are four simple reasons which are worth keeping in mind when you and your advisor next rebalance your portfolio. First, iShares embody a key goal of institutional investors: generating additional returns without taking on additional risk. iShares seek to do this by simply taking less of a bite out of a fund's returns through lower capital gains and management fees. These are not insignificant savings. It's estimated that between 1994 and 1999, investors in diversified U.S. stock funds lost, on average, 15% of their annual gains to taxes./3/ iShares, on the other hand, are managed in a way that keeps capital gains to a minimum. (During the calendar year 2001, for instance, none of our domestic iShares funds distributed any capital gains.) By the same token, we're also able to keep fund management fees low -- on average, about half that of traditional actively managed mutual funds/4/. Second, iShares embody a key tactic of institutional investors: uncomplicated diversification. The benefits of diversification (as compared to "stock picking") are well documented. It's possible, of course, to diversify by hand-selecting a wide variety of stocks within an asset class. But to do it accurately is complicated and time-consuming -- all to merely approximate what an index fund already does. This is a reason why $1.65 trillion institutional assets are invested in index funds such as iShares/5/. ------------------- /1/John Hechinger, Hey, Where Did My Mutual Fund Go?, The Wall Street Journal, April 17, 2002. /2/Financial Research Corporation (FRC) database, BGI analysis. /3/Jonathan Clements, Fund Distributions are a Taxing Problem; How the Tax Man Dines on Your Funds, The Wall Street Journal, August 1999. /4/Source: Morningstar Principia, BGI analysis 6/01. /5/Source: Pensions & Investments, 9/17/01. Shareholder Letter 1 Third, iShares embody a key strategy of institutional investors: MODULAR ASSET ALLOCATION. With so many different iShares to choose from, each focusing on a very specific slice of the equity market, investors have tremendous flexibility in structuring their portfolios to meet specific needs. The fourth reason we call iShares "industrial strength" is that they come to you from Barclays Global Investors. BGI is the world's largest institutional asset manager/6/, with over two thousand institutional clients around the world. You might also be interested to know that BGI has a longer track record in index-based investing than any other fund manager -- in fact, it was BGI that created the world's first index strategy, over thirty years ago. In 2002 we will be working closely with the financial advisor community to develop new strategies for structuring their clients' portfolios more effectively. And we will continue to improve the online tools and services available to iShares investors and advisors. (If you haven't visited www.iShares.com in a while, we invite you to do so. You'll discover a number of powerful tools and videos, which led Forbes Magazine to name it "Best of the Web" among all ETF sites/7/.) On behalf of iShares Trust and our colleagues at BGI, we thank you for making iShares a part of your portfolio, and look forward to meeting your needs in the year ahead. /s/ Garrett F. Bouton /s/ Lee T. Kranefuss Garrett F. Bouton Lee T. Kranefuss President and Chairman of the Vice President of iShares Trust Board of Trustees of iShares Trust --------------------- /6/Source: Pensions & Investments, 5/14/01. /7/Forbes, Winter 2001. 2 2002 iShares Annual Report to Shareholders Market Overview U.S. Equity Markets The U.S. stock market endured another volatile period during the twelve months ended March 31, 2002. For most of the period, earnings disappointments, job cuts, and weak economic indicators continued to plague equity markets. In response to the bleak economic signs and weak markets, the Federal Reserve Board (the "Fed") continued its campaign to stimulate the sagging economy. After eight rate cuts, the Fed had lowered short-term rates a total of 3.75%. By year-end, the federal funds rate stood at 1.75%, its lowest level in 40 years. The Federal government also acted to stimulate the economy. In the second quarter, a $1.35 trillion tax cut was passed, including a tax rebate intended to inject capital into the economy. Despite these actions, discouraging economic signs and poor earnings growth weighed on the markets for much of the year. The events of September 11 accelerated the broad market sell off. After remaining closed for four business days following September 11, equity markets reopened on September 17. Despite the combined effects of monetary stimulus from the Fed and fiscal stimulus from the federal government, equity markets declined sharply through the remainder of the month. The losses resulted in the largest quarterly declines for both the S&P 500 Index and the Dow Jones Industrial Average since the quarter that included the stock market crash of 1987. Finally, in the fourth quarter, markets rallied. Other economic indicators delivered positive news: inventories declined, factory orders surged, housing starts increased, and consumer confidence rose. Although job losses remained high and third quarter GDP shrank, many investors found cause to be optimistic about economic recovery. In January, additional positive news helped to boost consumer confidence. Newly released figures showed that fourth quarter 2001 GDP had grown 0.2%, ahead of the 1.1% decline predicted by many analysts. By the end of January, the jobless rate declined to 5.6%, ending eight straight months of increases. Citing these improvements in the economy, the Fed left short-term rates unchanged at its January meeting. Not all news was positive, however: most notably, accounting concerns resulting from Enron's and Arthur Andersen's problems dominated the news and drove many investors from stock markets. In March, the Fed left rates unchanged a second time, and also shifted its risk assessment to a neutral stance between weakness and recession. More encouraging data was released in late March: the previously reported 0.2% fourth quarter 2001 GDP growth rate was revised upward again, to a surprising 1.7%. In addition, the Conference Board's consumer-confidence index climbed to 110.2 in March from 95 in February; and statistics from the Department of Commerce indicated that orders for durable goods rose 1.5% from January to February. U.S. Fixed Income Markets Like U.S. equity markets, bond markets experienced a volatile period. However, because what is positive for stocks typically tends to be negative for bonds and vice versa, the bond markets' performance pattern was in opposition to the equities markets' performance. During the second quarter of 2001, the signs of possible economic recovery that had temporarily buoyed equity markets hurt bonds, particularly long-term Treasury bonds. Because the prospect of economic strength brought with it the potential for inflation, long-term rates crept up during the second quarter. The federal government's tax cut also lowered projections of future government budget surpluses. This led investors to conclude that the Treasury would not be able to buy back as many of its outstanding bonds. Meanwhile, additional Fed rate cuts helped short-term yields to drift lower through the second quarter. In the wake of the September 11 events, the Fed lowered short-term rates in an attempt to boost investor confidence. This move caused a further steepening of the yield curve. A flight to quality that led investors from equities and lower-quality bonds to the safe haven of government securities, particularly short-term issues, contributed to the phenomenon. For Treasury bonds, yields reached their lows in early November before spiking upward as investors began anticipating an economic recovery. The stock market rebounded strongly, and the campaign in Afghanistan progressed successfully. Long-term bonds rallied more than 8.5% in October, when the Treasury announced its suspension of the 30-year bond, but erased those gains in November and December as yields increased. Market Overview 3 During the first two months of 2002, fixed-income markets posted gains, benefiting from investors' apprehension about equity markets. However, the encouraging economic news released in March renewed the possibility of inflation, and bond yields spiked up during the month, giving up their gains of the previous two months. International Equity Markets The economic slowdown that the United States experienced during much of the reporting period also took its toll in Europe and Asia. In Europe, economies continued to slide through 2001, although authorities were reluctant to describe the condition as a recession. By year-end, Germany appeared to be approaching recession, with France and Italy close behind. In the United Kingdom, however, economic conditions were markedly better. Because the Bank of England had pursued a more proactive monetary policy, and fiscal policy was also loosened before the economic slowdown was fully appreciated, the United Kingdom ended the year with one of the strongest rates of growth of any of the major industrial countries. In Asia, Japan found itself in its fourth recession in a decade. By the first quarter of 2002, the hints of economic recovery seen in the U.S. were echoed around the world. Following waves of interest rate cuts by central banks throughout 2001, markets began to respond to the increased liquidity with renewed signs of life. In Europe, the relatively flat performance masked two widely divergent performance trends between cyclical stocks and beleaguered new-economy stocks. The sensitive automobile industry, as well as financials and health care sectors, rebounded during the quarter, while many telecommunications companies suffered. Both Germany and Italy showed renewed strength during the first quarter, largely as the beneficiaries of those cyclical industry sectors. Countries like Finland, however, whose markets have tended to be driven largely by telecommunications shares, struggled during the quarter. Japan also benefited from the U.S. led recovery, posting positive returns for the first quarter. 4 2002 iShares Annual Report to Shareholders THIS PAGE INTENTIONALLY LEFT BLANK. Managers' Discussion & Analysis iShares S&P 100 Index Fund Performance as of 3/31/02
---------------------------------------------------------------------------------------------------------------- Average Annual Total Returns Cumulative Total Returns ---------------------------------------------------------- ---------------------------- Year Ended 3/31/02 Inception to 3/31/02* Inception to 3/31/02* ---------------------------- ---------------------------- ---------------------------- IShares Index Fund Nav Market Index Nav Market Index Nav Market Index ------------------ -------- -------- -------- -------- -------- -------- -------- -------- -------- S&P 100 (1.23)% (0.25)% (1.03)% (14.42)% (13.51)% (14.25)% (20.06)% (18.71)% (19.86)% ----------------------------------------------------------------------------------------------------------------
* Since inception total return periods are calculated from inception date (10/23/00) for the NAV and Index returns and from the first day of trading (10/27/00) for the Market return. Average annual total return represents the average annual change in value of an investment over the periods indicated. Cumulative total return represents the change in value of an investment over the periods indicated. A Fund's per share net asset value or "NAV" is the value of one share of a Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV per share of the Fund, and the Market return is based on the market price per share of the Fund. The price used to calculate "market" returns ("Market Price") is the price of the last reported trade for shares of the Fund on any national securities exchange or other major U.S. market. Market Price and NAV may be calculated at different times, and this timing difference is one of the reasons that NAV and market price returns may differ. Further discussion of Market Price and NAV can be found in the Supplemental Information, located elsewhere in this report. Market and NAV returns assume that dividends and capital gains distributions have been reinvested in the Fund at market price and net asset value, respectively. An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund's past performance is no guarantee of future results. Sector Breakout S&P 100 INDEX [GRAPHIC] Consumer Discretionary 13.61% Consumer Staples 10.31% Energy 5.89% Financials 16.53% Health Care 15.26% Industrials 11.14% Information Technology 17.98% Materials 2.46% Telecomm Services 5.17% Utilities 1.65% Large capitalization stocks, as measured by the S&P 100 Index witnessed continued market volatility during the twelve-month period ended March 31, 2002 (the "reporting period"). The iSHARES S&P 100 INDEX FUND seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P 100 Index. For the reporting period, the Index declined 1.03%. For the same period, the Fund fell 1.23%. Stock markets struggled through the first half of the reporting period, driven by many of the same familiar themes from previous reporting periods: corporations announced layoffs and missed earnings targets, economic signs weakened, and the 6 2002 iShares Annual Report to Shareholders Federal Reserve Board (the "Fed") continued its aggressive easing of monetary policy in an attempt to help the economy sidestep a recession. By July, second quarter earnings brought another wave of lower earnings reports from Corporate America. Compounding the bleak outlook, second quarter GDP growth was reported at 0.2%, and by August, unemployment claims had risen to 4.9%. A flailing economy was dealt another blow on September 11, when the terrorist attacks on the U.S. that took the lives of so many Americans also robbed investors of their confidence in the markets. By the fourth quarter, however, hints of recovery emerged. Economic indicators delivered positive news: inventories declined, factory orders surged, housing starts increased, and consumer confidence rose. Although job losses remained high and GDP growth shrank, many investors found cause to be optimistic about economic recovery. In the first quarter of 2002, those signs strengthened: Thanks to consumer spending and inventory building in the fourth quarter of 2001, GDP growth sharply exceeded analysts' expectations. Faced with renewed economic strength, the Fed left rates unchanged during the first quarter of 2002 and changed its risk assessment to a neutral stance. Additional positive news came during the quarter, in the form of increased durable goods orders and a jump in consumer confidence levels. In terms of industry sectors, utilities stocks (1.65% of the Index as of March 31, 2002) suffered the largest declines, falling 44.04%. Telecommunications services (5.17% of the Index as of March 31, 2002) declined 10.25%, and industrials (11.14% of the Index as of March 31, 2002) lost 5.94%. Consumer staples (10.31% of the Index as of March 31, 2002) gained 20.12%, and materials (2.46% of the Index) returned 14.38%. Among individual stocks, Johnson & Johnson (3.32% of the Index as of March 31, 2002) was the strongest performer by far, gaining 50.46%. Wal-Mart Stores Inc. (4.55% of the Index as of March 31, 2002) climbed 22.04%, while Intel Corp. (3.40% of the Index as of March 31, 2002) returned 15.88%. Citigroup Inc. (4.24% of the Index as of March 31, 2002) and Exxon Mobil Corp. (4.99% of the Index as of March 31, 2002) returned 11.5% and 10.70%, respectively. The top holding General Electric Co. (6.20% of the Index as of March 31, 2002) and American International Group Inc. (3.14% of the Index as of March 31, 2002) declined 9.02% and 10.20% respectively. iShares S&P 100 Index Fund GROWTH OF $10,000 INVESTMENT [GRAPHIC] iShares S&P 100 Index Fund S&P 100 Index Oct-00 $10,000 $10,000 Dec-00 $ 9,369 $ 9,368 Mar-01 $ 8,093 $ 8,096 Jun-01 $ 8,663 $ 8,672 Sep-01 $ 7,330 $ 7,340 Dec-01 $ 8,059 $ 8,074 Mar-02 $ 7,994 $ 8,013 Past performance is no guarantee of future results. Managers' Discussion & Analysis 7 Managers' Discussion & Analysis iShares S&P 500 Index Funds Performance as of 3/31/02
------------------------------------------------------------------------------------------------------------------- Average Annual Total Returns Cumulative Total Returns ---------------------------------------------------------- ---------------------------- Year Ended 3/31/02 Inception to 3/31/02* Inception to 3/31/02* ---------------------------- ---------------------------- ---------------------------- iShares Index Fund NAV Market Index NAV Market Index NAV Market Index ------------------ -------- -------- -------- -------- -------- -------- -------- -------- -------- S&P 500 0.13% (0.73)% 0.24% (10.73)% (9.48)% (10.67)% (19.21)% (16.98)% (19.11)% S&P 500/BARRA Growth 4.64% 5.08% 4.83% (15.89)% (15.22)% (15.76)% (27.53)% (26.31)% (27.31)% S&P 500/BARRA Value (4.48)% (4.37)% (4.29)% (2.58)% (1.69)% (2.42)% (4.74)% (3.10)% (4.45)% -------------------------------------------------------------------------------------------------------------------
* Since inception total return periods are calculated from inception date (05/15/00, 05/22/00 and 05/22/00, respectively) for the NAV and Index returns and from the first day of trading (05/19/00, 05/26/00 and 05/26/00, respectively) for the Market return. Average annual total return represents the average annual change in value of an investment over the periods indicated. Cumulative total return represents the change in value of an investment over the periods indicated. A Fund's per share net asset value or "NAV" is the value of one share of a Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV per share of the Fund, and the Market return is based on the market price per share of the Fund. The price used to calculate "market" returns ("Market Price") is the price of the last reported trade for shares of the Fund on any national securities exchange or other major U.S. market. Market Price and NAV may be calculated at different times, and this timing difference is one of the reasons that NAV and market price returns may differ. Further discussion of Market Price and NAV can be found in the Supplemental Information, located elsewhere in this report. Market and NAV returns assume that dividends and capital gains distributions have been reinvested in the Fund at market price and net asset value, respectively. An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund's past performance is no guarantee of future results. Sector Breakout S&P 500 INDEX [GRAPHIC] Consumer Discretionary 13.37% Consumer Staples 8.91% Energy 6.88% Financials 18.54% Health Care 14.24% Industrials 11.07% Information Technology 16.32% Materials 2.86% Telecomm Services 4.63% Utilities 3.18% Sector Breakout Sector Breakout S&P 500/BARRA GROWTH INDEX S&P 500/BARRA VALUE INDEX [GRAPHIC] [GRAPHIC] Consumer Discretionary 12.94% Consumer Discretionary 13.79% Consumer Staples 16.16% Consumer Staples 1.94% Energy 0.01% Energy 13.51% Financials 5.35% Financials 31.24% Health Care 26.60% Health Care 2.32% Industrials 11.36% Industrials 10.78% Information Technology 26.94% Information Technology 6.08% Materials 0.25% Materials 5.38% Telecomm Services 0.28% Telecomm Services 8.82% Utilities 0.11% Utilities 6.14% 8 2002 iShares Annual Report to Shareholders The broad U.S. equity market, as measured by the S&P 500 Index, experienced a volatile twelve-month period before finishing the period with relatively flat performance. The iShares S&P 500 Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P 500 Index. During the twelve months ended March 31, 2002 (the "reporting period"), the Index returned 0.24%. The iShares S&P 500/BARRA Growth Index Fund and iShares S&P 500/BARRA Value Index Fund seek investment results that correspond generally to the price and yield performance, before fees and expenses, of the growth and value components of the S&P 500 Index, as measured by the S&P 500/BARRA Growth Index and the S&P 500/BARRA Value Index, respectively. For the reporting period, the S&P 500/BARRA Growth Index returned 4.83%, while the S&P 500/BARRA Value Index declined 4.29%. For the same period, the iShares S&P 500 Index Fund returned 0.13%; the Growth Fund rose 4.64% while the Value Fund fell 4.48%. The reporting period opened amid earnings disappointments, weak economic indicators and job cuts. Working to prevent the sluggish economy from falling into recession, the Federal Reserve Board (the "Fed") continued its aggressive stance on lowering interest rates, ultimately bringing the discount rate to 1.75%. However, market sentiment could not stand up to the waves of negative news. Second quarter earnings announcements included reports of missed targets and downward revisions for annual revenue estimates. In August, weak economic indicators, including poor GDP figures and high unemployment claims, made economic recovery appear more distant. Finally, on September 11, the terrorist attacks on the U.S. compounded the markets' troubles. Despite preemptive action by both the Fed and the federal government, markets suffered further declines. Although heavy job losses continued into the fourth quarter and the third quarter GDP figure was revised down to -1.1%, the combined effects of lower interest rates, rising stock prices, and falling oil prices appeared to boost consumer confidence. Leading indicators averaged an increase of 0.5% during the fourth quarter, with six of the ten components reflecting positive numbers. The first quarter of 2002 delivered more positive news. Fourth quarter 2001 GDP growth, originally estimated at -1.1%, was revised upward in February to 0.2%, and again in March to a robust 1.7%. The unexpected strength led the Fed to leave rates unchanged during the quarter. Also helping to boost markets, the unemployment rate declined during the period, durable goods orders rose, and, in March, consumer confidence jumped a surprising 15%. Within the S&P 500 Index, value stocks underperformed growth stocks over the reporting period. Telecommunications services stocks (4.63% of the Index as of March 31, 2002) were the hardest hit, falling 25.13%. Utilities stocks (3.18% of the Index as of March 31, 2002) declined 22.79%. Thanks to strong consumer spending levels, consumer staples (8.91% of the Index as of March 31, 2002) and consumer discretionary stocks (13.37% of the Index as of March 31, 2002), returned 13.02% and 5.02%, respectively. In terms of individual stocks, the strongest returns over the period came from Johnson & Johnson (1.90% of the Index as of March 31, 2002), which returned 50.46%. Reflecting the strong consumer spending levels, Wal-Mart Stores Inc. (2.60% of the Index as of March 31, 2002), returned 22.04%. Intel Corp. (1.94% of the Index as of March 31, 2002) weathered a volatile year to finish with a gain of 15.88%. On the negative side, American International Group Inc. (1.79% of the Index as of March 31, 2002) fell 10.20%, General Electric Co. (3.54% of the Index as of March 31, 2002) declined 9.02%, and Pfizer Inc. (2.38% of the Index as of March 31, 2002) dropped 1.89%. iShares S&P 500 Index Funds GROWTH OF $10,000 INVESTMENT [GRAPHIC]
iShares S&P 500 iShares S&P 500/BARRA iShares S&P 500/BARRA S&P 500 S&P 500/BARRA S&P 500/BARRA Index Fund Growth Index Fund Value Index Fund Index Growth Index Value Index May-00 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 Jun-00 $10,028 $11,052 $ 9,660 $10,030 $11,054 $ 9,659 Sep-00 $ 9,929 $10,077 $10,505 $ 9,933 $10,084 $10,510 Dec-00 $ 9,151 $ 8,388 $10,673 $ 9,156 $ 8,397 $10,682 Mar-01 $ 8,066 $ 6,926 $ 9,974 $ 8,070 $ 6,935 $ 9,984 Jun-01 $ 8,535 $ 7,457 $10,409 $ 8,543 $ 7,470 $10,424 Sep-01 $ 7,283 $ 6,469 $ 8,719 $ 7,289 $ 6,484 $ 8,735 Dec-01 $ 8,057 $ 7,308 $ 9,408 $ 8,068 $ 7,330 $ 9,430 Mar-02 $ 8,077 $ 7,247 $ 9,527 $ 8,090 $ 7,272 $ 9,556
Past performance is no guarantee of future results. Managers' Discussion & Analysis 9 Managers' Discussion & Analysis iShares S&P MidCap 400 Index Funds Performance as of 3/31/02
-------------------------------------------------------------------------------------------------------------------------- Average Annual Total Returns Cumulative Total Returns ---------------------------------------------------------- ---------------------------- Year Ended 3/31/02 Inception to 3/31/02* Inception to 3/31/02* ---------------------------- ---------------------------- ---------------------------- iShares Index Fund NAV Market Index NAV Market Index NAV Market Index ------------------ -------- -------- -------- -------- -------- -------- -------- -------- -------- S&P MidCap 400 18.75% 18.66% 18.89% 9.70% 10.47% 9.88% 18.79% 20.21% 19.14% S&P MidCap 400/BARRA Growth 16.03% 16.20% 16.32% (7.96)% (4.60)% (7.69)% (13.07)% (7.59)% (12.57)% S&P MidCap 400/BARRA Value 21.79% 21.62% 21.98% 21.92% 22.48% 22.28% 39.72% 40.50% 40.20% --------------------------------------------------------------------------------------------------------------------------
* Since inception total return periods are calculated from inception date (05/22/00, 07/24/00 and 07/24/00, respectively) for the NAV and Index returns and from the first day of trading (05/26/00, 07/28/00 and 07/28/00, respectively) for the Market return. Average annual total return represents the average annual change in value of an investment over the periods indicated. Cumulative total return represents the change in value of an investment over the periods indicated. A Fund's per share net asset value or "NAV" is the value of one share of a Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV per share of the Fund, and the Market return is based on the market price per share of the Fund. The price used to calculate "market" returns ("Market Price") is the price of the last reported trade for shares of the Fund on any national securities exchange or other major U.S. market. Market Price and NAV may be calculated at different times, and this timing difference is one of the reasons that NAV and market price returns may differ. Further discussion of Market Price and NAV can be found in the Supplemental Information, located elsewhere in this report. Market and NAV returns assume that dividends and capital gains distributions have been reinvested in the Fund at market price and net asset value, respectively. An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund's past performance is no guarantee of future results. Sector Breakout S&P MIDCAP 400 INDEX [GRAPHIC] Consumer Discretionary 14.33% Consumer Staples 4.52% Energy 6.88% Financials 18.71% Health Care 11.81% Industrials 13.94% Information Technology 17.73% Materials 4.61% Telecomm Services 0.85% Utilities 6.62% Sector Breakout Sector Breakout S&P MIDCAP 400/BARRA GROWTH INDEX S&P MIDCAP 400/BARRA VALUE INDEX [GRAPHIC] [GRAPHIC] Consumer Discretionary 15.98% Consumer Discretionary 12.81% Consumer Staples 4.38% Consumer Staples 4.64% Energy 2.06% Energy 11.35% Financials 11.28% Financials 25.61% Health Care 21.50% Health Care 2.83% Industrials 16.67% Industrials 11.41% Information Technology 25.37% Information Technology 10.63% Materials 1.79% Materials 7.23% Telecomm Services 0.22% Telecomm Services 1.43% Utilities 0.75% Utilities 12.06% 10 2002 iShares Annual Report to Shareholders The Standard & Poor's ("S&P") MidCap 400 Index posted relatively healthy gains during the twelve months ended March 31, 2002 (the "reporting period"). The iShares S&P Midcap 400 Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P MidCap 400 Index. During the reporting period, the Index returned 18.89%. The iShares S&P Midcap 400/BARRA Growth Index Fund and iShares S&P Midcap 400/BARRA Value Index Fund seek investment results that correspond generally to the price and yield performance, before fees and expenses, of the growth and value components of the S&P MidCap 400 Index, as measured by the S&P MidCap 400/BARRA Growth Index and the S&P MidCap 400/BARRA Value Index, respectively. For the reporting period, the S&P MidCap 400/BARRA Growth Index returned 16.32%, while the S&P MidCap 400/BARRA Value Index returned 21.98%. The iShares S&P MidCap 400 Index Fund returned 18.75% for the period; the Growth Fund rose 16.03% while the Value Fund returned 21.79%. Volatile markets and signs of a weakening economy dominated the first half of the reporting period with the Federal Reserve Board (the "Fed") continuing to lower rates in an effort to revive the slowing economy, ultimately bringing the discount rate to 1.75%. Despite the Fed's actions and the Federal government's proposed $1.35 trillion tax cut package, the economy was slow to respond. In May, the first quarter GDP number was revised downward. The summer months brought weak corporate earnings reports, high unemployment claims, and warnings of lower future revenues. When second quarter GDP growth was reported to be a mere 0.2%, many investors' hopes for economic recovery in the second half of the year were dashed. The terrorist attacks on September 11 dealt the frail economy another blow. Despite a 0.50% rate cut before markets reopened and fiscal stimulus provided by the Federal government, markets slumped through the end of September. Economic conditions began to appear more positive in the fourth quarter of 2001. Although heavy job losses continued into the fourth quarter and the third quarter GDP figure was revised down to -1.1%, the combined effects of lower interest rates, rising stock prices, and falling oil prices appeared to boost consumer confidence. Leading indicators averaged an increase of 0.5%, with six of the ten indicators reflecting positive numbers. Signs of an improving economy strengthened in the first quarter of 2002. Fourth quarter 2001 GDP growth, originally estimated at -1.1%, was revised upward in February to 0.2%, and again in March to a robust 1.7%. The unexpected strength led the Fed to leave rates unchanged during the quarter. During the reporting period, value stocks outpaced growth stocks, as investors once again favored relative safety over growth. That trend was apparent in the sector performance of the S&P MidCap 400 Index. Consumer staples (4.52% of the Index as of March 31, 2002) was the top-performing sector, gaining 27.49% during the reporting period, followed closely by consumer discretionary stocks (14.33% of the Index as of March 31, 2002), and industrials shares (13.94% of the Index as of March 31, 2002), which returned 25.55% and 25.11%, respectively. Not surprisingly, the poorest performing sector was telecommunications services (0.85% of the Index as of March 31, 2002), which declined 32.64%. Energy stocks (6.88% of the Index as of March 31, 2002) delivered a relatively flat 1.03% return. In terms of individual holdings, the biggest winner by far among the S&P MidCap 400 Index's ten largest holdings was Gilead Sciences Inc. (0.77% of the Index as of March 31, 2002), which gained 121.48%. Quest Diagnostics Inc. (0.89% of the Index as of March 31, 2002) gained 86.45%, while Affiliated Computer Services Inc. (0.82% of the Index as of March 31, 2002) climbed 72.97%. The only negative performance among the ten largest holdings came from Millennium Pharmaceuticals Inc. (0.69% of the Index as of March 31, 2002), which fell 26.76%. iShares S&P MidCap 400 Index Funds GROWTH OF $10,000 INVESTMENT [GRAPHIC]
iShares S&P iShares S&P Midcap iShares S&P Midcap S&P S&P Midcap S&P Midcap MidCap 400 400/BARRA 400/BARRA MidCap 400 400/BARRA 400/BARRA Index Fund Growth Index Fund Value Index Fund Index Growth Index Value Index May-00 $10,000 $10,000 Jun-00 $10,419 $10,416 Jul-00 $10,000 $10,000 $10,000 $10,000 Sep-00 $11,671 $10,758 $10,883 $11,682 $10,769 $10,889 Dec-00 $11,216 $ 9,161 $11,889 $11,232 $ 9,183 $11,903 Mar-01 $10,004 $ 7,492 $11,472 $10,023 $ 7,516 $11,493 Jun-01 $11,319 $ 8,650 $12,780 $11,342 $ 8,685 $12,802 Sep-01 $ 9,441 $ 6,901 $11,111 $ 9,463 $ 6,934 $11,136 Dec-01 $11,141 $ 8,407 $12,727 $11,165 $ 8,451 $12,755 Mar-02 $11,880 $ 8,691 $13,972 $11,916 $ 8,743 $14,020
Past performance is no guarantee of future results. Managers' Discussion & Analysis 11 Managers' Discussion & Analysis iShares S&P SmallCap 600 Index Funds Performance as of 3/31/02
--------------------------------------------------------------------------------------------------------------------------- Average Annual Total Returns Cumulative Total Returns ---------------------------------------------------------- --------------------------- Year Ended 3/31/02 Inception to 3/31/02* Inception to 3/31/02* ---------------------------- ---------------------------- ---------------------------- iShares Index Fund Nav Market Index Nav Market Index Nav Market Index ------------------ -------- -------- -------- -------- -------- -------- -------- -------- -------- S&P SmallCap 600 21.74% 21.32% 21.97% 14.16% 15.48% 14.35% 27.93% 30.50% 28.32% S&P SmallCap 600/BARRA Growth 17.60% 17.95% 17.86% (2.03)% 2.25% (1.76)% (3.39)% 3.79% (2.94)% S&P SmallCap 600/BARRA Value 25.29% 25.75% 25.86% 22.31% 23.78% 22.76% 40.48% 43.00% 41.13% ---------------------------------------------------------------------------------------------------------------------------
* Since inception total return periods are calculated from inception date (05/22/00, 07/24/00 and 07/24/00, respectively) for the NAV and Index returns and from the first day of trading (05/26/00, 07/28/00 and 07/28/00, respectively) for the Market return. Average annual total return represents the average annual change in value of an investment over the periods indicated. Cumulative total return represents the change in value of an investment over the periods indicated. A Fund's per share net asset value or "NAV" is the value of one share of a Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV per share of the Fund, and the Market return is based on the market price per share of the Fund. The price used to calculate "market" returns ("Market Price") is the price of the last reported trade for shares of the Fund on any national securities exchange or other major U.S. market. Market Price and NAV may be calculated at different times, and this timing difference is one of the reasons that NAV and market price returns may differ. Further discussion of Market Price and NAV can be found in the Supplemental Information, located elsewhere in this report. Market and NAV returns assume that dividends and capital gains distributions have been reinvested in the Fund at market price and net asset value, respectively. An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund's past performance is no guarantee of future results. Sector Breakout S&P SMALLCAP 600 INDEX [GRAPHIC] Consumer Discretionary 20.80% Consumer Staples 4.52% Energy 5.34% Financials 10.48% Health Care 12.20% Industrials 20.20% Information Technology 17.18% Materials 4.87% Telecomm Services 0.31% Utilities 4.10% Sector Breakout S&P SMALLCAP 600/BARRA GROWTH INDEX [GRAPHIC] Consumer Discretionary 22.95% Consumer Staples 4.47% Energy 2.43% Financials 5.61% Health Care 20.85% Industrials 17.21% Information Technology 21.23% Materials 3.40% Telecomm Services 0.57% Utilities 1.28% Sector Breakout S&P SMALLCAP 600/BARRA VALUE INDEX [GRAPHIC] Consumer Discretionary 18.84% Consumer Staples 4.55% Energy 7.99% Financials 14.91% Health Care 4.33% Industrials 22.92% Information Technology 13.51% Materials 6.22% Telecomm Services 0.07% Utilities 6.66% 12 2002 iShares Annual Report to Shareholders The iShares S&P SMallcap 600 Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P SmallCap 600 Index. For the twelve-month period ended March 31, 2002 (the "reporting period"), the Index returned 21.97%. The iSHares S&P SMallcap 600/BARRA GROWTH INDEX Fund and iShares S&P Smallcap 600/BARRA Value Index Fund seek investment results that correspond generally to the price and yield performance, before fees and expenses, of the growth and value components of the S&P SmallCap 600 Index as measured by the S&P SmallCap 600/BARRA Growth Index and the S&P SmallCap 600/BARRA Value Index, respectively. For the reporting period, the S&P SmallCap 600/BARRA Growth Index gained 17.86%, while the S&P SmallCap 600/BARRA Value Index gained 25.86%. For the same period, the iShares S&P SmallCap 600 Index Fund rose 21.74% while the Growth Fund gained 17.60% and the Value Fund returned 25.29%. The reporting period opened amid the familiar themes of earnings warnings, layoffs, and weak economic reports. On April 4, 2001, the Nasdaq Composite dipped to 1,638, having lost two-thirds of its value since its high on March 10, 2000. In an effort to stimulate the slowing economy, the Federal Reserve Board (the "Fed"), led an aggressive campaign of lowering short-term interest rates throughout most of the period. Initially, the Fed moves, combined with a proposed tax cut in April and some encouraging economic figures, helped drive the equity markets up. However, the optimism was short-lived, and stock prices generally drifted lower over the next few months. Finally, on September 11, the terrorist attacks that impacted the emotions of all Americans also rattled an already shaky market. After remaining closed for four days following the attacks, equity markets reopened on September 17, falling sharply through the end of the reporting period. By the fourth quarter of 2001, the economy began to show some hints of recovery. Newly-released economic indicators revealed encouraging news: factory orders grew as inventories diminished, housing starts climbed, and consumer spending rebounded. By the first quarter of 2002, the outlook continued to appear promising. Thanks to consumer spending and inventory building in the fourth quarter of 2001, GDP growth turned positive for the quarter and sharply exceeded analysts' expectations. Faced with renewed economic strength, the Fed left rates unchanged during the first quarter of 2002 and changed its risk assessment to a neutral stance. Additional positive news came during the quarter, in the form of increased durable goods orders and a jump in consumer confidence levels. Within the S&P SmallCap 600 Index, value stocks outperformed their growth counterparts over the reporting period. High consumer spending levels translated into positive returns for consumer staples (4.52% of the Index as of March 31, 2002) and consumer discretionary (20.80% of the Index as of March 31, 2002), which gained 47.43% and 39.26%, respectively. Industrials (20.20% of the Index as of March 31, 2002) and financials (10.48% of the Index as of March 31, 2002) also posted strong results, gaining 24.83% and 24.42%, respectively. On the negative side, energy stocks (5.34% of the Index as of March 31, 2002) fell 2.90%, and telecommunications services (0.31% of the Index as of March 31, 2002) lost 0.85%. In terms of individual stocks, some of the ten largest holdings in the S&P SmallCap 600 Index delivered surprisingly strong gains. Michaels Stores Inc. (0.62% of the Index as of March 31, 2002) climbed 152.53%, and Whole Foods Market Inc. (0.63% of the Index as of March 31, 2002) gained 116.93%. Other strong performers included NVR Inc. (0.59% of the Index as of March 31, 2002), which returned 93.56%, Alliant Techsystems Inc. (0.63% of the Index as of March 31, 2002), which returned 72.77%, and Constellation Brands Inc. (0.60% of the Index as of March 31, 2002), which rose 53.20%. iShares S&P Smallcap 600 Index Funds GROWTH OF $10,000 INVESTMENT [GRAPHIC]
iShares S&P iShares S&P Smallcap iShares S&P Smallcap S&P Smallcap S&P Smallcap S&P Smallcap SmallCap 600 600/BARRA 600/BARRA 600 600/BARRA 600/BARRA Index Fund Growth Index Fund Value Index Fund Index Growth Index Value Index May-00 $10,000 $10,000 Jun-00 $10,762 $10,765 Jul-00 $10,000 $10,000 $10,000 $10,000 Sep-00 $11,107 $10,124 $10,566 $11,120 $10,137 $10,568 Dec-00 $11,250 $ 9,462 $11,320 $11,261 $ 9,481 $11,318 Mar-01 $10,508 $ 8,215 $11,212 $10,521 $ 8,235 $11,214 Jun-01 $11,929 $ 9,379 $12,639 $11,962 $ 9,430 $12,657 Sep-01 $ 9,918 $ 7,758 $10,550 $ 9,940 $ 7,794 $10,571 Dec-01 $11,963 $ 9,331 $12,747 $11,997 $ 9,368 $12,801 Mar-02 $12,793 $ 9,660 $14,047 $12,832 $ 9,704 $14,112
Past performance is no guarantee of future results. Managers' Discussion & Analysis 13 Managers' Discussion & Analysis iShares S&P Global 100 Index Fund Performance as of 3/31/02
--------------------------------------------------------------------------------------------------------------------------------- Average Annual Total Returns Cumulative Total Returns ---------------------------------------------------------- ---------------------------- Year Ended 3/31/02 Inception to 3/31/02* Inception to 3/31/02* ---------------------------- ---------------------------- ---------------------------- iShares Index Fund NAV Market Index NAV Market Index NAV Market Index ------------------ -------- -------- -------- -------- -------- -------- -------- -------- -------- S&P Global 100 (5.32)% (5.38)% (4.29)% (15.87)% (15.82)% (14.77)% (20.41)% (20.23)% (19.02)% ---------------------------------------------------------------------------------------------------------------------------------
* Since inception total return periods are calculated from inception date (12/05/00) for the NAV and Index returns and from the first day of trading (12/08/00) for the Market return. Average annual total return represents the average annual change in value of an investment over the periods indicated. Cumulative total return represents the change in value of an investment over the periods indicated. A Fund's per share net asset value or "NAV" is the value of one share of a Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV per share of the Fund, and the Market return is based on the market price per share of the Fund. The price used to calculate "market" returns ("Market Price") is the price of the last reported trade for shares of the Fund on any national securities exchange or other major U.S. market. Market Price and NAV may be calculated at different times, and this timing difference is one of the reasons that NAV and market price returns may differ. Further discussion of Market Price and NAV can be found in the Supplemental Information, located elsewhere in this report. Market and NAV returns assume that dividends and capital gains distributions have been reinvested in the Fund at market price and net asset value, respectively. An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund's past performance is no guarantee of future results. TOP 10 INDEX HOLDINGS General Electric Co. 5.64% Exxon Mobil Corp. 4.54% Microsoft Corp. 4.30% Citigroup Inc. 3.86% Pfizer Inc. 3.78% BP PLC 3.05% Johnson & Johnson 3.02% Intel Corp. 2.94% American Int'l. Group Inc. 2.85% International Business Machines Corp. 2.71% The iShares S&P Global 100 Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P Global 100 Index, which measures the performance of 100 large-cap stocks of leading transnational companies. From April 1, 2001, through March 31, 2002 (the "reporting period"), the Index declined 4.29%. For the same period, the Fund fell 5.32%. Many of the stocks that make up the S&P Global 100 Index began the reporting period on a solid footing. A series of interest rate cuts helped to create optimism that economic growth in the United States, Europe and other parts of the world would continue. 14 2002 iShares Annual Report to Shareholders Beginning in late May 2001, however, the Index began to weaken. The prevailing market sentiment shifted from optimism to concern that the United States was headed for a recession that would drag down other countries as well. Fearing that scenario, many investors favored "defensive" stocks, such as those of pharmaceutical companies and food manufacturers. At the other end of the spectrum were cyclical stocks, which generally declined in value as investors anticipated tougher economic times ahead. The technology and telecommunications sectors also remained weak, reflecting a rapid decline in demand for their products worldwide. After having drifted lower over most of the summer, the Index fell even more sharply in the wake of September 11. The terrorist attacks on the United States shut the U.S. equity markets for a time, although trading in the European stock markets continued. Quite a few of the European stocks that make up the S&P Global 100 Index plummeted immediately after the attacks. Many of their U.S. counterparts followed suit when trading on the American equity markets resumed on September 17. The decline did not last long, however. The U.S. and European equity markets rebounded very quickly in late September and continued to rally into September, October and November. Despite the uncertainty caused by the events of September 11, many investors began to anticipate a strong economic recovery in 2002. These expectations helped to bolster shares of cyclical companies, while those of more defensive firms fell out of favor with some investors. As 2002 began, market sentiment once again changed direction. Renewed concerns about the global economy, coupled with more specific worries about the Enron bankruptcy, a financial crisis in Argentina and various other issues, all put pressure on many stocks in the S&P Global 100 Index. Although the Index enjoyed a modest rally at the very end of the reporting period, it still ended up posting a loss for the same period. iShares S&P Global 100 Index Fund GROWTH OF $10,000 INVESTMENT [GRAPHIC] iShares S&P Global S&P Global 100 Index Fund 100 Index Dec-00 $10,000 $10,000 Dec-00 $ 9,612 $ 9,670 Jan-01 $ 9,939 $10,028 Feb-01 $ 8,962 $ 9,049 Mar-01 $ 8,406 $ 8,462 Apr-01 $ 9,175 $ 9,249 May-01 $ 8,975 $ 9,044 Jun-01 $ 8,706 $ 8,811 Jul-01 $ 8,504 $ 8,604 Aug-01 $ 8,014 $ 8,116 Sep-01 $ 7,444 $ 7,537 Oct-01 $ 7,684 $ 7,789 Nov-01 $ 8,151 $ 8,264 Dec-01 $ 8,180 $ 8,313 Jan-02 $ 7,833 $ 7,937 Feb-02 $ 7,708 $ 7,850 Mar-02 $ 7,960 $ 8,100 Past performance is no guarantee of future results. Managers' Discussion & Analysis 15 Managers' Discussion & Analysis iShares S&P Global Energy Sector Index Fund Performance as of 3/31/02 -------------------------------------------------------------------------------- Total Returns ---------------------------- Inception to 3/31/02* ---------------------------- iShares Index Fund NAV Market Index ------------------ ------- ------- ------- S&P Global Energy Sector 10.10% 19.72% 10.09% -------------------------------------------------------------------------------- * Since inception total return periods are calculated from inception date (11/12/01) for the NAV and Index returns and from the first day of trading (11/16/01) for the Market return. Total return represents the change in value of an investment over the periods indicated. A Fund's per share net asset value or "NAV" is the value of one share of a Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV per share of the Fund, and the Market return is based on the market price per share of the Fund. The price used to calculate "market" returns ("Market Price") is the price of the last reported trade for shares of the Fund on any national securities exchange or other major U.S. market. Market Price and NAV may be calculated at different times, and this timing difference is one of the reasons that NAV and market price returns may differ. Further discussion of Market Price and NAV can be found in the Supplemental Information, located elsewhere in this report. Market and NAV returns assume that dividends and capital gains distributions have been reinvested in the Fund at market price and net asset value, respectively. An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund's past performance is no guarantee of future results. TOP 10 INDEX HOLDINGS Exxon Mobil Corp. 23.91% BP PLC 16.05% Royal Dutch Petroleum Co. 9.25% TotalFinaElf SA 8.66% ChevronTexaco Corp. 7.68% Shell Transport & Trading Co. PLC 5.85% ENI SpA 2.94% Schlumberger Ltd. 2.70% Phillips Petroleum Co. 1.91% Conoco Inc. 1.46% The iShares S&P Global Energy Sector Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P Global Energy Sector Index. For the period from the Fund's inception on November 12, 2001 through March 31, 2002 (the "reporting period"), the Index rose 10.09%. The Fund gained 10.10% for the same period. Economic conditions around the globe were mixed over the reporting period, with moderate improvement appearing to take hold by the end of the first quarter. When 2002 began, the news was mostly negative: the Japanese economy was struggling under prolonged recession, and in Western Europe, falling exports to the U.S. put negative pressure on many companies' revenues and earnings. Indeed, as a result of the slow economy, U.S. imports had fallen to their lowest level in two years 16 2002 iShares Annual Report to Shareholders during the first quarter. However, by the end of the first three months of 2002, there were some signs that economic growth was returning to the U.S. and other key markets. In particular, the domestic unemployment figure declined from 5.8% in December 2001 to 5.5% in February 2002. The better outlook for employment helped spark an increase in consumer confidence during February, as well as solid growth in retail sales during the month. The housing sector was robust during most of the period, as mortgage applications, housing starts, and new home sales all rose in the first quarter. The global energy industry experienced some volatility over the past four months, but overall conditions were conducive to stronger share prices. Crude oil prices rose on continued political instability in the Mideast, and on an OPEC quota freeze designed to boost prices a further 10%. Relatively optimistic forecasts for economic recovery in the US and Western Europe encouraged many investors who anticipated higher energy demand in the coming months, in turn helping to push some energy stocks higher. In this generally positive environment, all of the top ten companies in the Index rose over the reporting period. Exxon Mobil Corp. (23.91% of the Index as of March 31, 2002) shares gained 10.07%. BP PLC (16.05% of the Index as of March 31, 2002) rose 13.01%. Royal Dutch Petroleum Co. (9.25% of the Index as of March 31, 2002) and TotalFinaElf SA (8.66% of the Index as of March 31, 2002) shares increased 7.81% and 14.72%, respectively. ChevronTexaco Corp. (7.68% of the Index as of March 31, 2002) and Shell Transport & Trading Co. PLC (5.85% of the Index as of March 31, 2002) gained 2.85% and 2.56%, respectively. ENI SpA (2.94% of the Index as of March 31, 2002), Schlumberger Ltd. (2.70% of the Index as of March 31, 2002), and Phillips Petroleum Co. (1.91% of the Index as of March 31, 2002) each moved sharply higher, rising 19.71%, 19.85%, and 12.66%, respectively. Conoco Inc. (1.46% of the Index as of March 31, 2002) shares increased 10.29% over the period. iShares S&P Global Energy Sector Index Fund GROWTH OF $10,000 INVESTMENT [GRAPHIC] iShares S&P Global S&P Global Energy Sector Energy Sector Index Fund Index Nov-01 $10,000 $10,000 Nov-01 $ 9,472 $ 9,460 Dec-01 $ 9,994 $ 9,999 Jan-02 $ 9,814 $ 9,797 Feb-02 $10,307 $10,324 Mar-02 $11,009 $11,009 Past performance is no guarantee of future results. Managers' Discussion & Analysis 17 Managers' Discussion & Analysis iShares S&P Global Financials Sector Index Fund Performance as of 3/31/02 -------------------------------------------------------------------------------- Total Returns ---------------------------- Inception to 3/31/02* ---------------------------- iShares Index Fund NAV Market Index ------------------ -------- -------- -------- S&P Global Financials Sector 4.64% 3.26% 5.05% -------------------------------------------------------------------------------- * Since inception total return periods are calculated from inception date (11/12/01) for the NAV and Index returns and from the first day of trading (11/16/01) for the Market return. Total return represents the change in value of an investment over the periods indicated. A Fund's per share net asset value or "NAV" is the value of one share of a Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV per share of the Fund, and the Market return is based on the market price per share of the Fund. The price used to calculate "market" returns ("Market Price") is the price of the last reported trade for shares of the Fund on any national securities exchange or other major U.S. market. Market Price and NAV may be calculated at different times, and this timing difference is one of the reasons that NAV and market price returns may differ. Further discussion of Market Price and NAV can be found in the Supplemental Information, located elsewhere in this report. Market and NAV returns assume that dividends and capital gains distributions have been reinvested in the Fund at market price and net asset value, respectively. An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund's past performance is no guarantee of future results. TOP 10 INDEX HOLDINGS Citigroup Inc. 7.00% American Int'l. Group Inc. 5.18% HSBC Holdings PLC 2.97% Bank of America Corp. 2.94% Wells Fargo & Co. 2.30% Fannie Mae 2.19% JP Morgan Chase & Co. 1.93% Royal Bank of Scotland Group PLC 1.81% Morgan Stanley Dean Witter & Co. 1.73% UBS AG 1.73% The iShares S&P Global Financials Sector Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P Global Financials Sector Index. For the period since the Fund's inception on November 12, 2001 through March 31, 2002 (the "reporting period"), the Index rose 5.05%, while the Fund gained 4.64%. The global economic environment that prevailed over the reporting period was generally mixed, with initial weakness giving way to signs of recovery. Many economies around the world did begin the period with little reason for optimism: the Japanese economy showed few signs of regaining strength, and across Western Europe, declining exports to the U.S. put negative pressure on many companies' revenues and earnings. Indeed, U.S. imports had fallen to their lowest level in two 18 2002 iShares Annual Report to Shareholders years during the period. However, by the end of the first quarter of 2002, there were some indications that economic growth was returning to the U.S. and other key markets. The domestic unemployment figure declined from 5.8% in December 2001 to 5.5% in February 2002. The better outlook for employment helped spark an increase in consumer confidence during February, as well as solid growth in retail sales during the month. The housing sector was robust during most of the period, as mortgage applications, housing starts, and new home sales all rose in the first quarter. With clearer indications that the U.S. economy was stabilizing, the Federal Reserve Board (the "Fed") did not lower interest rates during the quarter, after making a record eleven rate cuts in 2001. Interest rates stood at a 40-year low of 1.75% by the end of March, leaving little room for further cuts. A fairly strong estimate for first quarter GDP growth together with a rise in other key economic indicators, also kept the Fed on the sidelines during the quarter. However, despite these encouraging signs, some investors in markets around the world remained concerned about issues with the potential to dampen recovery, including instability in the Middle East and rising oil prices. In the moderately improving environment that prevailed since the Fund's inception, many of the top ten stocks in the Index managed to rise. Citigroup Inc. (7.00% of the Index as of March 31, 2002) shares grew 3.09%. American International Group Inc. (5.18% of the Index as of March 31, 2002) stock fell 9.50%. HSBC Holdings PLC (2.97% of the Index as of March 31, 2002) rose 5.85%, while Bank of America Corp. (2.94% of the Index as of March 31, 2002) stock increased 10.01%. Wells Fargo & Co. (2.30% of the Index as of March 31, 2002) moved up 16.56%, while Fannie Mae (2.19% of the Index as of March 31, 2002) lost 3.14%. JP Morgan Chase & Co. (1.93% of the Index as of March 31, 2002) shares declined 7.26%, while Royal Bank of Scotland Group PLC (1.81% of the Index as of March 31, 2002) increased 12.02%. Morgan Stanley Dean Witter & Co. (1.73% of the Index as of March 31, 2002) and UBS AG (1.73% of the Index as of March 31, 2002) rose 7.87% and 2.29%, respectively. iShares S&P Global Financials Sector Index Fund GROWTH OF $10,000 INVESTMENT [GRAPHIC] iShares S&P Global S&P Global Financials Sector Financials Sector Index Fund Index Nov-01 $10,000 $10,000 Nov-01 $10,124 $10,135 Dec-01 $10,274 $10,291 Jan-02 $ 9,972 $ 9,989 Feb-02 $ 9,789 $ 9,849 Mar-02 $10,465 $10,505 Past performance is no guarantee of future results. Managers' Discussion & Analysis 19 Managers' Discussion & Analysis iShares S&P Global Healthcare Sector Index Fund Performance as of 3/31/02 ------------------------------------------------------------------------------ Total Returns ---------------------------- Inception to 3/31/02* ---------------------------- iShares Index Fund NAV Market Index ------------------ -------- -------- -------- S&P Global Healthcare Sector (0.92)% (3.22)% (0.76)% ------------------------------------------------------------------------------- * Since inception total return periods are calculated from inception date (11/13/01) for the NAV and Index returns and from the first day of trading (11/21/01) for the Market return. Total return represents the change in value of an investment over the periods indicated. A Fund's per share net asset value or "NAV" is the value of one share of a Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV per share of the Fund, and the Market return is based on the market price per share of the Fund. The price used to calculate "market" returns ("Market Price") is the price of the last reported trade for shares of the Fund on any national securities exchange or other major U.S. market. Market Price and NAV may be calculated at different times, and this timing difference is one of the reasons that NAV and market price returns may differ. Further discussion of Market Price and NAV can be found in the Supplemental Information, located elsewhere in this report. Market and NAV returns assume that dividends and capital gains distributions have been reinvested in the Fund at market price and net asset value, respectively. An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund's past performance is no guarantee of future results. TOP 10 INDEX HOLDINGS Pfizer Inc. 11.92% Johnson & Johnson 9.50% GlaxoSmithKline PLC 6.99% Merck & Co. Inc. 6.25% Novartis AG 5.40% AstraZeneca PLC 4.14% Wyeth 4.13% Lilly (Eli) and Co. 4.08% Abbott Laboratories 3.90% Bristol-Myers Squibb Co. 3.74% The iShares S&P Global Healthcare Sector Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P Global Healthcare Sector Index. For the period from the Fund's inception on November 13, 2001 through March 31, 2002 (the "reporting period"), the Index fell 0.76%. For the same period, the Fund declined 0.92%. Over the reporting period, economic conditions around the globe appeared to be heading towards recovery. When 2001 began, however, much of the economic news was negative: the Japanese economy was struggling under prolonged recession, and in Western Europe, falling exports to the U.S. put negative pressure on many companies' revenues and earnings. Indeed, as a result of the slow economy, U.S. imports had fallen to their lowest level in two years during the first quarter. By the end 20 2002 iShares Annual Report to Shareholders of the first three months of 2002, though, there were signs that economic growth was returning to the U.S. and other key markets. In particular, the domestic unemployment figure declined from 5.8% in December 2001 to 5.5% in February 2002. The better outlook for employment helped spark an increase in consumer confidence during February, as well as solid growth in retail sales during the month. The housing sector was robust during most of the period, as mortgage applications, housing starts, and new home sales all rose in the first quarter. As the economy weakened and corporate performance suffered, many investors turned to healthcare companies as "safe havens" that were thought to be relatively immune to the business cycle, lifting stock prices. In addition, a number of product introductions in recent years have boosted the fortunes of several pharmaceutical giants. Other companies, however, have incurred large development costs that have negatively impacted bottom line results. In the current environment, performance among the Index's top stocks were mixed. The largest holding, Pfizer Inc. (11.92% of the Index as of March 31, 2002) fell 6.13%. Johnson & Johnson (9.50% of the Index as of March 31, 2002) shares rose 9.56%. GlaxoSmithKline PLC (6.99% of the Index as of March 31, 2002) and Merck & Co. (6.25% of the Index as of March 31, 2002) both fell, declining 11.68% and 9.87%, respectively. Novartis AG (5.40% of the Index as of March 31, 2002) and AstraZeneca PLC (4.14% of the Index as of March 31, 2002) rose 5.68% and 8.55%, respectively. Wyeth (4.13% of the Index as of March 31, 2002) increased 15.42%, while Lilly (Eli) and Co. (4.08% of the Index as of March 31, 2002) lost 3.11%. Abbott Laboratories (3.90% of the Index as of March 31, 2002) dropped 0.61%, while Bristol-Myers Squibb Co. (3.74% of the Index as of March 31, 2002) declined 25.26%. iShares S&P Global Healthcare Sector Index Fund GROWTH OF $10,000 INVESTMENT [GRAPHIC] iShares S&P Global S&P Global Healthcare Sector Healthcare Sector Index Fund Index Oct-01 $10,000 $10,000 Nov-01 $10,176 $10,179 Dec-01 $ 9,964 $ 9,972 Jan-02 $ 9,736 $ 9,735 Feb-02 $ 9,894 $ 9,906 Mar-02 $ 9,908 $ 9,924 Past performance is no guarantee of future results. Managers' Discussion & Analysis 21 Managers' Discussion & Analysis iShares S&P Global Technology Sector Index Fund Performance as of 3/31/02 ------------------------------------------------------------------------------ Total Returns ---------------------------- Inception to 3/31/02* ---------------------------- iShares Index Fund NAV Market Index ------------------ -------- -------- -------- S&P Global Technology Sector (2.40)% (6.74)% (2.10)% ------------------------------------------------------------------------------ * Since inception total return periods are calculated from inception date (11/12/01) for the NAV and Index returns and from the first day of trading (11/16/01) for the Market return. Total return represents the change in value of an investment over the periods indicated. A Fund's per share net asset value or "NAV" is the value of one share of a Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV per share of the Fund, and the Market return is based on the market price per share of the Fund. The price used to calculate "market" returns ("Market Price") is the price of the last reported trade for shares of the Fund on any national securities exchange or other major U.S. market. Market Price and NAV may be calculated at different times, and this timing difference is one of the reasons that NAV and market price returns may differ. Further discussion of Market Price and NAV can be found in the Supplemental Information, located elsewhere in this report. Market and NAV returns assume that dividends and capital gains distributions have been reinvested in the Fund at market price and net asset value, respectively. An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund's past performance is no guarantee of future results. TOP 10 INDEX HOLDINGS Microsoft Corp. 15.10% Intel Corp. 9.44% International Business Machines 8.28% Cisco Systems Inc. 5.74% Oracle Corp. 3.25% Dell Computer Corp. 3.15% Texas Instruments Inc. 2.66% Applied Materials Inc. 2.06% Samsung Electronics Co. Ltd. 1.96% Hewlett-Packard Co. 1.61% The iShares S&P Global Technology Sector Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P Global Information Technology Sector Index. For the period from the Fund's inception on November 12, 2001 through March 31, 2002 (the "reporting period"), the Index declined 2.10%, while the Fund fell 2.40%. For the overall economy, the first three months of 2002 brought some relief after the weakness that persisted during 2001. As the new year began, however, indications of economic sluggishness remained: layoffs were an issue in January and early February as new jobless claims moved upward. As the quarter progressed the number of layoffs appeared to moderate, and 22 2002 iShares Annual Report to Shareholders the unemployment rate fell from 5.8% in December 2001 to 5.5% in February 2002. These relatively positive developments in the employment picture helped to spark a jump in consumer confidence, which in turn resulted in solid retail sales growth during February. Also helping underpin a recovery, the housing sector was robust, as mortgage applications, housing starts, and new home sales all rose during the first quarter. The stabilizing economy kept the Federal Reserve Board (the "Fed") from lowering interest rates during the quarter, after having made a record eleven rate cuts in 2001. Interest rates stood at a 40-year low of 1.75% at the end of the reporting period, leaving little room for additional cuts. In addition, a relatively upbeat forecast for first quarter GDP growth, and a rise in other key economic indicators kept the Fed on the sidelines. Going forward, some investors anticipated interest rate increases in the near term as the recovery gained strength. However, while the broader domestic economy appeared to be making moves towards renewed growth, a number of technology companies remained weak during the period, and struggled with poor revenues and earnings. The difficult environment was reflected in the weak performance of many of the Index's largest companies over the period. Top holding Microsoft Corp. (15.10% of the Index as of March 31, 2002) declined 8.33%. Intel Corp. (9.44% of the Index as of March 31, 2002) shares rose 7.22% during the period. International Business Machines Corp. (8.28% of the Index as of March 31, 2002) shares declined 9.34%. Cisco Systems Inc. (5.74% of the Index as of March 31, 2002) and Oracle Corp. (3.25% of the Index as of March 31, 2002) both moved lower, dropping 12.10% and 16.88%, respectively. Dell Computer Corp. (3.15% of the Index as of March 31, 2002) rose 1.24%, while Texas Instruments Inc. (2.66% of the Index as of March 31, 2002) rose 3.84%. Applied Materials Inc. (2.06% of the Index as of March 31, 2002) moved higher, gaining 39.30%, while South Korea's Samsung Electronics Co. Ltd. (1.96% of the Index as of March 31, 2002) gained 79.14%. Hewlett-Packard Co. (1.61% of the Index as of March 31, 2002) dropped 6.33%. iShares S&P Global Technology Sector Index Fund GROWTH OF $10,000 INVESTMENT [GRAPHIC] iShares S&P Global S&P Global Information Technology Sector Technology Sector Index Fund Index Nov-01 $10,000 $10,000 Nov-01 $10,485 $10,484 Dec-01 $10,369 $10,380 Jan-02 $10,313 $10,337 Feb-02 $ 9,148 $ 9,203 Mar-02 $ 9,759 $ 9,790 Past performance is no guarantee of future results. Managers' Discussion & Analysis 23 Managers' Discussion & Analysis iShares S&P Global Telecommunications Sector Index Fund Performance as of 3/31/02 -------------------------------------------------------------------------------- Total Returns ---------------------------- Inception to 3/31/02* ---------------------------- iShares Index Fund NAV Market Index ------------------ -------- -------- -------- S&P Global Telecommunications Sector (11.50)% (15.77)% (11.38)% -------------------------------------------------------------------------------- * Since inception total return periods are calculated from inception date (11/12/01) for the NAV and Index returns and from the first day of trading (11/16/01) for the Market return. Average annual total return represents the average annual change in value of an investment over the periods indicated. Cumulative total return represents the change in value of an investment over the periods indicated. A Fund's per share net asset value or "NAV" is the value of one share of a Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV per share of the Fund, and the Market return is based on the market price per share of the Fund. The price used to calculate "market" returns ("Market Price") is the price of the last reported trade for shares of the Fund on any national securities exchange or other major U.S. market. Market Price and NAV may be calculated at different times, and this timing difference is one of the reasons that NAV and market price returns may differ. Further discussion of Market Price and NAV can be found in the Supplemental Information, located elsewhere in this report. Market and NAV returns assume that dividends and capital gains distributions have been reinvested in the Fund at market price and net asset value, respectively. An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund's past performance is no guarantee of future results. TOP 10 INDEX HOLDINGS Vodafone Group PLC 12.00% SBC Communications Inc. 11.99% Verizon Communications Inc. 11.84% BellSouth Corp. 6.62% AT&T CORP. 5.31% Telefonica SA 4.86% NTT DoCoMo Inc. 4.59% Deutsche Telekom AG 3.44% BT Group PLC 3.31% Nippon Telegraph & Telephone Corp. 3.18% The iShares S&P Global Telecommunications Sector Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P Global Telecommunications Sector Index. For the period from the Fund's inception on November 12, 2001 through March 31, 2002 (the "reporting period"), the Index fell 11.38%. The Fund declined 11.50% for the same period. Economies across the globe experienced mixed economic results over the reporting period, as the year's initial weakness gave way to some signs of recovery. When 2002 began, however, there were few optimistic indicators: the Japanese economy continued to struggle with very low growth and across Western Europe, declining exports to the U.S. put negative pressure 24 2002 iShares Annual Report to Shareholders on many companies' revenues and earnings. Indeed, as a result of its own slow economy, U.S. imports had fallen to their lowest level in two years during the first quarter. However, by the end of the first three months of 2002, there were some signs that economic growth was returning to the U.S. and other key markets. In particular, the domestic unemployment figure declined from 5.8% in December 2001 to 5.5% in February 2002. The better outlook for employment helped spark an increase in consumer confidence during February, as well as solid growth in retail sales during the month. The housing sector was robust during most of the period, as mortgage applications, housing starts, and new home sales all rose in the first quarter. While some areas of the economy were experiencing relief, the telecom sector continued to struggle with difficulties. Many companies operated under high debt burdens, the result of major infrastructure investments during the boom years of the late 1990s. With economies slowing, projected revenue growth rates failed to materialize, and many investors pushed telecom stocks down as a result. Many companies responded with layoffs, reduced research and development budgets, and financial and operational restructuring. The difficult environment was reflected in the weak performance of many of the Index's largest companies over the period. Top holding Vodafone Group PLC (12.00% of the Index as of March 31, 2002) stock dropped 26.74%. SBC Communications Inc. (11.99% of the Index as of March 31, 2002) shares fell 0.68%, while Verizon Communications Inc. (11.84% of the Index as of March 31, 2002) stock declined 6.15%. BellSouth Corp. (6.62% of the Index as of March 31, 2002) lost 4.00%, and AT&T Corp. (5.31% of the Index as of March 31, 2002) fell 1.67%. Telefonica SA (4.86% of the Index as of March 31, 2002) lost 9.25%, while NTT DoCoMo Inc. (4.59% of the Index as of March 31, 2002) gained 7.12%. Deutsche Telekom AG (3.44% of the Index as of March 31, 2002) fell 9.36%, and BT Group PLC (3.31% of the Index as of March 31, 2002) rose 14.03%. Nippon Telegraph & Telephone Corp. (3.18% of the Index as of March 31, 2002) fell 2.90% over the period. iShares S&P Global Telecommunications Sector Index Fund GROWTH OF $10,000 INVESTMENT [GRAPHIC] iShares S&P Global S&P Global Telecommunications Telecommunications Sector Index Fund Sector Index Nov-01 $10,000 $10,000 Nov-01 $10,197 $10,207 Dec-01 $10,196 $10,217 Jan-02 $ 9,190 $ 9,204 Feb-02 $ 8,692 $ 8,731 Mar-02 $ 8,851 $ 8,862 Past performance is no guarantee of future results. Managers' Discussion & Analysis 25 Managers' Discussion & Analysis iShares S&P Europe 350 Index Fund Performance as of 3/31/02
------------------------------------------------------------------------------------------------------------ Average Annual Total Returns Cumulative Total Returns --------------------------------------------------------- ---------------------------- Year Ended 3/31/02 Inception to 3/31/02* Inception to 3/31/02* --------------------------- ---------------------------- ---------------------------- iShares Index Fund Nav Market Index Nav Market Index Nav Market Index ------------------ ------- -------- -------- -------- -------- -------- -------- -------- -------- S&P Europe 350 (5.16)% (7.22)% (4.73)% (15.18)% (13.53)% (14.76)% (24.23)% (21.64)% (23.53)% ------------------------------------------------------------------------------------------------------------
* Since inception total return periods are calculated from inception date (07/25/00) for the NAV and Index returns and from the first day of trading (07/28/00) for the Market return. Average annual total return represents the average annual change in value of an investment over the periods indicated. Cumulative total return represents the change in value of an investment over the periods indicated. A Fund's per share net asset value or "NAV" is the value of one share of a Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV per share of the Fund, and the Market return is based on the market price per share of the Fund. The price used to calculate "market" returns ("Market Price") is the price of the last reported trade for shares of the Fund on any national securities exchange or other major U.S. market. Market Price and NAV may be calculated at different times, and this timing difference is one of the reasons that NAV and market price returns may differ. Further discussion of Market Price and NAV can be found in the Supplemental Information, located elsewhere in this report. Market and NAV returns assume that dividends and capital gains distributions have been reinvested in the Fund at market price and net asset value, respectively. An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund's past performance is no guarantee of future results. TOP 10 INDEX HOLDINGS BP PLC 4.45% GlaxoSmithKline PLC 3.24% Vodafone Group PLC 2.78% Royal Dutch Petroleum Co. 2.57% Novartis AG 2.51% TotalFinaElf SA 2.41% HSBC Holdings PLC 2.39% Nestle SA 1.95% AstraZeneca PLC 1.92% Shell Transport & Trading Co. PLC 1.62% The iShares S&P Europe 350 Index FunD seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P Europe 350 Index. The S&P Europe 350 Index measures the performance of equities in the United Kingdom and 14 countries in the Euro Zone, which includes the European Monetary Union ("EMU") countries plus Denmark, Norway, Sweden and Switzerland. For the twelve-month period ended March 31, 2002 (the "reporting period"), the Index declined 4.73%. The Fund dropped 5.16% for the same period. The stocks that make up the S&P Europe 350 Index faced a challenging environment during the reporting period. Of primary concern to many investors was the significant slowdown in economies around the world. These worries led to declines in 26 2002 iShares Annual Report to Shareholders many segments of the European equity markets over the summer. Slackening demand for crude oil depressed the profits and stocks of numerous energy producers, for example. Slower growth also put pressure on many cyclical companies. At the same time, many so-called "defensive" stocks in the pharmaceutical and food industries performed well over the reporting period. European equity markets dropped still further after the terrorist attacks on the United States in September. Many of Europe's insurance companies faced particularly severe declines in the days immediately following the attacks. The events of September 11 had a less direct but still significant impact on many other industries represented in the S&P Europe 350 Index. Although the resulting decline in European markets was severe, it was fairly short-lived. By the end of September, the S&P Europe 350 Index was on an upswing. Many investors apparently began to anticipate a recovery in the United States and other economies around the world. This optimism helped to bolster cyclical stocks in particular, as well as some areas of the technology sector. By early 2002, however, European markets had begun to weaken. Many investors grew more pessimistic about the prospects for an economic recovery. In addition, the bankruptcy of Enron Corporation in the United States led investors to become more wary of companies that were perceived to have complicated accounting practices. The economic crisis in Argentina also undermined confidence in European firms with significant exposure to Latin America. iShares S&P Europe 350 Index Fund GROWTH OF $10,000 INVESTMENT [GRAPHIC] iShares S&P Europe 350 S&P Europe 350 Index Fund Index Jul-00 $10,000 $10,000 Sep-00 $ 9,269 $ 9,289 Dec-00 $ 9,491 $ 9,542 Mar-01 $ 7,990 $ 8,026 Jun-01 $ 7,917 $ 8,017 Sep-01 $ 6,937 $ 6,999 Dec-01 $ 7,589 $ 7,674 Mar-02 $ 7,579 $ 7,648 Past performance is no guarantee of future results. Managers' Discussion & Analysis 27 Managers' Discussion & Analysis iShares S&P/TSE 60 Index Fund Performance as of 3/31/02
------------------------------------------------------------------------------------------------------------- Average Annual Total Returns Cumulative Total Returns ---------------------------------------------------------- ----------------------------- Year Ended 3/31/02 Inception to 3/31/02* Inception to 3/31/02* ---------------------------- ---------------------------- ----------------------------- iShares Index Fund NAV Market Index NAV Market Index NAV Market Index ------------------ -------- -------- -------- -------- -------- -------- -------- -------- --------- S&P/TSE 60 2.43% 1.61% 1.47% (12.85)% (14.80)% (16.56)% (21.95)% (24.85)% (27.79)% -------------------------------------------------------------------------------------------------------------
* Since inception total return periods are calculated from inception date (06/12/00) for the NAV and Index returns and from the first day of trading (06/19/00) for the Market return. Average annual total return represents the average annual change in value of an investment over the periods indicated. Cumulative total return represents the change in value of an investment over the periods indicated. A Fund's per share net asset value or "NAV" is the value of one share of a Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV per share of the Fund, and the Market return is based on the market price per share of the Fund. The price used to calculate "market" returns ("Market Price") is the price of the last reported trade for shares of the Fund on any national securities exchange or other major U.S. market. Market Price and NAV may be calculated at different times, and this timing difference is one of the reasons that NAV and market price returns may differ. Further discussion of Market Price and NAV can be found in the Supplemental Information, located elsewhere in this report. Market and NAV returns assume that dividends and capital gains distributions have been reinvested in the Fund at market price and net asset value, respectively. An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund's past performance is no guarantee of future results. Sector Breakout S&P/TSE 60 Index [GRAPHIC] Consumer Discretionary 7.13% Consumer Staples 3.28% Energy 14.13% Financials 33.14% Health Care 2.92% Industrials 7.56% Information Technology 8.21% Materials 14.53% Telecommunication Services 5.11% Utilities 3.99% The iShares S&P/TSE 60 Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P/TSE 60 Index. From April 1, 2001, through March 31, 2002 (the "reporting period"), the Index had returned 1.47%. The Fund gained 2.43% for the same period. The S&P/TSE 60 Index was quite volatile over the reporting period, reflecting investors' changing outlook for the economy and corporate prospects both at home and abroad. 28 2002 iShares Annual Report to Shareholders The Index began the reporting period on a strong note, buoyed by investors' optimism about the Canadian and U.S. economies and by declining interest rates. Over the summer months, however, that optimism dissipated as many investors became concerned about the magnitude of the economic slowdown occurring in Canada, the United States and several other countries around the world. Slower growth led to lower demand for oil, natural gas, aluminum and the other natural resources that constitute a large segment of Canada's economy. These concerns put pressure on stocks in these sectors as well as on the stocks of other Canadian export-oriented companies. The S&P/TSE 60 Index was also weighed down by a sharp decline in the shares of Nortel Networks. Nortel announced disappointing results on several occasions over the reporting period, saying that drastically lower demand for telecom equipment was the chief cause of the shortfalls. The company's stock ultimately declined a total of 68.73% over the reporting period. As a result, Nortel's weighting in the S&P/TSE 60 Index declined to 4.21% as of March 31, 2002, from approximately 37.61% as of April 1, 2001. Stocks in the S&P/TSE 60 Index, like those in many markets around the world, also dropped sharply after the September 11 terrorist attacks on the United States. Within a few weeks, however, the Index had rebounded and continued on a generally upward course through the end of 2001. Investors were encouraged by the aggressive interest-rate cuts imposed by Canada's central bank after September 11. Many of them also believed the economic outlook for the U.S. and Canada would be better than previously thought. Toward the end of the reporting period, the S&P/TSE 60 Index again weakened as a variety of companies announced disappointing results. Several other issues, including the bankruptcy of Enron and the repercussions of continued weakness in the technology and telecommunications sectors, also put pressure on certain areas of the Canadian market over the period. iShares S&P/TSE 60 Index Fund GROWTH OF $10,000 INVESTMENT [GRAPHIC] iShares S&P/TSE 60 S&P/TSE 60 Index Fund Index Jun-00 $10,000 $10,000 Jun-00 $10,233 $10,454 Sep-00 $10,530 $10,333 Dec-00 $ 9,219 $ 8,890 Mar-01 $ 7,620 $ 7,117 Jun-01 $ 8,033 $ 7,468 Sep-01 $ 6,974 $ 6,439 Dec-01 $ 7,690 $ 7,127 Mar-02 $ 7,804 $ 7,220 Past performance is no guarantee of future results. Managers' Discussion & Analysis 29 Managers' Discussion & Analysis iShares S&P Latin America 40 Index Fund Performance as of 3/31/02 -------------------------------------------------------------------------------- Total Returns ---------------------------- Inception to 3/31/02* ---------------------------- iShares Index Fund NAV Market Index ------------------ -------- -------- -------- S&P Latin America 40 27.16% 27.42% 27.68% -------------------------------------------------------------------------------- * Since inception total return periods are calculated from inception date (10/25/01) for the NAV and Index returns and from the first day of trading (10/26/01) for the Market return. Total return represents the change in value of an investment over the periods indicated. A Fund's per share net asset value or "NAV" is the value of one share of a Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV per share of the Fund, and the Market return is based on the market price per share of the Fund. The price used to calculate "market" returns ("Market Price") is the price of the last reported trade for shares of the Fund on any national securities exchange or other major U.S. market. Market Price and NAV may be calculated at different times, and this timing difference is one of the reasons that NAV and market price returns may differ. Further discussion of Market Price and NAV can be found in the Supplemental Information, located elsewhere in this report. Market and NAV returns assume that dividends and capital gains distributions have been reinvested in the Fund at market price and net asset value, respectively. An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund's past performance is no guarantee of future results. TOP 10 INDEX HOLDINGS Telefonos de Mexico SA de CV "L" 15.68% Cemex SA de CV "CPO" 8.97% Petroleo Brasileiro SA 8.50% America Movil SA de CV "L" 7.77% Companhia de Bebidas das Americas 4.70% Banco Itau SA 4.17% Grupo Financiero BBVA Bancomer SA de CV "O" 4.12% Banco Bradesco SA 4.11% Grupo Televisa SA "CPO" 3.97% Walmart de Mexico SA de CV "V" 3.95% The iShares S&P Latin America 40 Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P Latin America 40 Index. For the period from the Fund's inception on October 25, 2001 through March 31, 2002 (the "reporting period"), the Index rose 27.68%. For the same period, the Fund gained 27.16%. Many key Latin American stock markets performed well over the reporting period, shrugging off instability in Argentina, and some remaining economic weakness in the region. In Mexico, a recession that hurt growth during 2001 appeared to be ending. An important source of support for the economy is exports; Mexico sends close to 85% of its exports to the U.S., so an American economic recovery could further strengthen Mexican corporations. Indeed, many anticipated more robust growth 30 2002 iShares Annual Report to Shareholders for the Mexican economy as the U.S. sends investments south and imports goods. Many investors have been heartened by key aspects of the economic policy of Vincente Fox's government. In Brazil, a relaxation in inflation spurred interest rate cuts by the central bank, which in turn helped to spur investor optimism during March. Brazilian GDP grew 1.2% in 2001, and was expected to perform better during 2002. March also generally brought power rationing to an end, which helped corporate performance there. Like their Mexican counterparts, Brazilian corporations were negatively impacted by the slowdown in exports to developed countries. Mexico accounted for the largest portion of the Index, at 57.40% as of March 31, 2002. Brazil was 39.36% of the Index as of March 31, 2002, while Chile and Argentina were 1.82% and 1.41%, respectively, of the Index as of March 31, 2002. Each of the top ten stocks in the Index rose in value over the period. Telefonos de Mexico SA de CV (15.68% of the Index as of March 31, 2002) shares gained 16.08%. Cemex SA de CV (8.97% of the Index as of March 31, 2002) stock moved up 23.38%, while Petroleo Brasileiro SA (8.50% of the Index as of March 31, 2002) rose 33.74%. America Movil SA de CV (7.77% of the Index as of March 31, 2002) increased 30.87%, while Companhia de Bebidas das Americas (4.70% of the Index as of March 31, 2002) gained 24.98%. Banco Itau SA (4.17% of the Index as of March 31, 2002) and Grupo Financiero BBVA Bancomer SA de CV (4.12% of the Index as of March 31, 2002) shares both rose, increasing 22.46% and 39.35%, respectively. Banco Bradesco SA (4.11% of the Index as of March 31, 2002) moved 56.21% higher, while Grupo Televisa SA (3.97% of the Index as of March 31, 2002) gained 49.97%. Walmart de Mexico SA de CV (3.95% of the Index as of March 31, 2002) shares increased 29.76%. iShares S&P Latin America 40 Index Fund GROWTH OF $10,000 INVESTMENT [GRAPHIC] iShares S&P S&P Latin Latin America 40 America 40 Index Fund Index Oct-01 $10,000 $10,000 Oct-01 $ 9,766 $ 9,748 Nov-01 $10,546 $10,575 Dec-01 $11,562 $11,668 Jan-02 $11,807 $11,833 Feb-02 $12,095 $12,140 Mar-02 $12,716 $12,770 Past performance is no guarantee of future results. Managers' Discussion & Analysis 31 Managers' Discussion & Analysis iShares S&P/TOPIX 150 Index Fund Performance as of 3/31/02 -------------------------------------------------------------------------------- Total Returns ---------------------------- Inception to 3/31/02* ---------------------------- iShares Index Fund NAV Market Index ------------------ -------- -------- -------- S&P/TOPIX 150 (4.91)% (4.84)% (4.77)% -------------------------------------------------------------------------------- * Since inception total return periods are calculated from inception date (10/23/01) for the NAV and Index returns and from the first day of trading (10/26/01) for the Market return. Total return represents the change in value of an investment over the periods indicated. A Fund's per share net asset value or "NAV" is the value of one share of a Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV per share of the Fund, and the Market return is based on the market price per share of the Fund. The price used to calculate "market" returns ("Market Price") is the price of the last reported trade for shares of the Fund on any national securities exchange or other major U.S. market. Market Price and NAV may be calculated at different times, and this timing difference is one of the reasons that NAV and market price returns may differ. Further discussion of Market Price and NAV can be found in the Supplemental Information, located elsewhere in this report. Market and NAV returns assume that dividends and capital gains distributions have been reinvested in the Fund at market price and net asset value, respectively. An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund's past performance is no guarantee of future results. TOP 10 INDEX HOLDINGS Toyota Motor Corp. 6.65% NTT DoCoMo Inc. 4.53% Sony Corp. 4.13% Nippon Telegraph & Telephone Corp. 3.14% Honda Motor Co. Ltd. 2.77% Takeda Chemical Industries Ltd. 2.71% Canon Inc. 2.51% Nomura Holdings Inc. 2.19% Tokyo Electric Power Co. Inc. 1.96% Matsushita Electric Industrial Co. Ltd. 1.89% The iShares S&P/TOPIX 150 Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P/TOPIX 150 Index. For the period from the Fund's inception on October 23, 2001 through March 31, 2002 (the "reporting period"), the Index fell 4.77%, compared to the Fund's decline of 4.91%. The Japanese economy remained generally weak over the reporting period, as it has for over a decade. The economic slowdown in much of Western Europe and the U.S. hurt the performance of many of Japan's large exporters during the period. The financial sector continued to struggle under the weight of non-performing loans that await governmental action to be disposed of. Japanese industrial output was very weak, after having fallen over 10% in 2001. Reflecting years of recession, domestic demand remained soft during the period. Indeed, Japanese consumers were in little mood to make major purchases 32 2002 iShares Annual Report to Shareholders as the unemployment rate crept steadily higher, reaching approximately 5.2% at the end of 2001. Falling prices, known as deflation, contributed to poor consumer sentiment, and helped put downward pressure on wages. The real estate market, also, reflected a lack of consumer confidence, as housing acquisitions declined. Japanese GDP registered a drop in 2001, and likely failed to grow during the first quarter of 2002. In March, corporate bankruptcies accelerated, increasing 5% from the previous year's figure; the fiscal year that ended March 31, 2001 was the worst year for bankruptcies in Japan since 1984. Nevertheless, the Bank of Japan (the "BOJ") anticipated some relief for the economy as global recovery was likely to increase Japanese exports to key markets, adding to output and helping to support corporate performance. The BOJ, which has kept short-term interest rates at zero for more than a year, slightly upgraded its outlook for the economy for the first time since 2000. Performance of the larger companies in the Index was decidedly mixed during the period. Toyota Motor Corp. (6.65% of the Index as of March 31, 2002) shares did manage to rise 9.26%. NTT DoCoMo Inc. (4.53% of the Index as of March 31, 2002) stock declined 4.21%. Sony Corp. (4.13% of the Index as of March 31, 2002) stock moved up 20.34%. Nippon Telegraph & Telephone Corp. (3.14% of the Index as of March 31, 2002) shares lost 11.58%. Honda Motor Co. Ltd. (2.77% of the Index as of March 31, 2002) shares increased 11.60%. Takeda Chemical Industries Ltd. (2.71% of the Index as of March 31, 2002) declined 17.55%, while Canon Inc. (2.51% of the Index as of March 31, 2002) shares rose 9.51%. Nomura Holdings (2.19% of the Index), Tokyo Electric Power Co. Inc. (1.96% of the Index as of March 31, 2002), and Matsushita Electric Industrial Co. Ltd. (1.89% of the Index as of March 31, 2002) all lost ground, falling 14.07%, 24.29%, and 7.53%, respectively. iShares S&P/TOPIX 150 Index Fund GROWTH OF $10,000 INVESTMENT [GRAPHIC] iShares S&P/TOPIX 150 S&P/TOPIX 150 Index Fund Index Oct-01 $10,000 $10,000 Oct-01 $9,585 $9,620 Nov-01 $9,727 $9,641 Dec-01 $9,098 $9,069 Jan-02 $8,405 $8,459 Feb-02 $8,767 $8,754 Mar-02 $9,508 $9,522 Past performance is no guarantee of future results. Managers' Discussion & Analysis 33 Managers' Discussion & Analysis iShares Nasdaq Biotechnology Index Fund Performance as of 3/31/02
--------------------------------------------------------------------------------------------------------------------- Average Annual Total Returns Cumulative Total Returns ---------------------------------------------------------- ---------------------------- Year Ended 3/31/02 Inception to 3/31/02* Inception to 3/31/02* ---------------------------- ---------------------------- ---------------------------- iShares Index Fund NAV Market Index NAV Market Index NAV Market Index -------------------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Nasdaq Biotechnology 0.61% 0.92% 0.82% (19.83)% (21.13)% (19.80)% (22.46)% (23.70)% (22.41)% ---------------------------------------------------------------------------------------------------------------------
* Since inception total return periods are calculated from inception date (02/05/01) for the NAV and Index returns and from the first day of trading (02/09/01) for the Market return. Average annual total return represents the average annual change in value of an investment over the periods indicated. Cumulative total return represents the change in value of an investment over the periods indicated. A Fund's per share net asset value or "NAV" is the value of one share of a Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV per share of the Fund, and the Market return is based on the market price per share of the Fund. The price used to calculate "market" returns ("Market Price") is the price of the last reported trade for shares of the Fund on any national securities exchange or other major U.S. market. Market Price and NAV may be calculated at different times, and this timing difference is one of the reasons that NAV and market price returns may differ. Further discussion of Market Price and NAV can be found in the Supplemental Information, located elsewhere in this report. Market and NAV returns assume that dividends and capital gains distributions have been reinvested in the Fund at market price and net asset value, respectively. An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund's past performance is no guarantee of future results. TOP 10 INDEX HOLDINGS Amgen Inc. 17.52% Immunex Corp. 5.25% MedImmune Inc. 3.48% IDEC Pharmaceuticals Corp. 3.48% Gilead Sciences Inc. 3.46% Genzyme Corp.-General Division 3.36% Chiron Corp. 3.08% Biogen Inc. 2.49% Millennium Pharmaceuticals Inc. 2.21% Neurocrine Biosciences Inc. 2.06% The iShares Nasdaq Biotechnology Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Nasdaq Biotechnology Index. The twelve-month period ended March 31, 2002 (the "reporting period"), was a turbulent one for U.S. equity markets. The Index returned 0.82% during this period, compared to the Fund's return of 0.61%. Many of the familiar themes from previous reporting periods, including earnings warnings, layoffs, and weak economic reports, were replayed during much of the reporting period ended March 31, 2002. On April 4, 2001, the Nasdaq Composite of which the Index is a subset, dipped to 1,638, having lost two-thirds of its value since its high on March 10, 2000. In an 34 2002 iShares Annual Report to Shareholders effort to prevent the slowing economy from slipping into recession, the Federal Reserve Board (the "Fed") continued its aggressive campaign of lowering short-term interest rates throughout year-end 2001. However, the economy was slow to respond, and stock prices generally drifted lower over the coming months. Second quarter earnings were released in July, including a new round of missed targets and warnings for future revenues. Economic figures released during the period only fueled the decline. On September 11, the terrorist attacks on the U.S. that impacted the emotions of all Americans also rattled an already shaky market, and stock prices fell sharply through the end of September. In the fourth quarter, however, newly-released economic indicators revealed encouraging news: factory orders grew as inventories diminished, housing starts climbed, and consumer spending rebounded. Further signs of an improving economy emerged in the first quarter of 2002. Fourth quarter 2001 GDP growth, originally estimated at -1.1%, was revised upward in February to 0.2%, and again in March to a robust 1.7%. The unexpected strength led the Fed to leave rates unchanged during the quarter. Also helping to boost markets, the unemployment rate declined during the period, durable goods orders rose, and, in March, consumer confidence jumped a surprising 15%. Against this drop, biotechnology stocks, in general, fared relatively well. After many biotechnology stocks were dragged down in the first quarter of 2001 amid a widespread market sell off, their valuations became attractive. Many investors fleeing Internet-related and other technology shares bought up shares of biotechnology companies, viewing them as "the next growth opportunity." Three biopharmaceutical companies: Immunex Corp. (5.25% of the Index as of March 31, 2002), Gilead Sciences Inc. (3.46% of the Index as of March 31, 2002) and Neurocrine Biosciences Inc. (2.06% of the Index as of March 31, 2002) soared during the period, returning 111.42%, 121.48%, and 96.80%, respectively. One notable exception to the biotech rally was Amgen Inc., the largest weighting in the Index at 17.52% of the Index as of March 31, 2002. This global biotechnology company has been successful in developing human therapeutics based on advanced cellular and molecular biology. After being caught up in the first quarter sell off, Amgen's share price failed to rebound during the period, losing 0.84%. Biogen Inc. (2.49% of the Index as of March 31, 2002) and Millennium Pharmaceuticals Inc. (2.21% of the Index as of March 31, 2002) struggled during the period, declining 22.51% and 26.76%, respectively. iShares Nasdaq Biotechnology Index Fund GROWTH OF $10,000 INVESTMENT [GRAPHIC] iShares Nasdaq Nasdaq Biotechnology Biotechnology Index Fund Index Feb-01 $10,000 $10,000 Mar-01 $7,707 $7,696 Jun-01 $10,181 $10,174 Sep-01 $7,458 $7,456 Dec-01 $9,125 $9,123 Mar-02 $7,755 $7,759 Past performance is no guarantee of future results. Managers' Discussion & Analysis 35 iShares S&P 100 Index Fund Schedule of Investments March 31, 2002 Security Shares Value ---------------------------------------------------------------- COMMON STOCKS - 99.86% ---------------------------------------------------------------- General Electric Co. 191,168 $ 7,159,242 Microsoft Corp./(1)/ 104,174 6,282,734 Exxon Mobil Corp. 131,607 5,768,335 Wal-Mart Stores Inc. 85,757 5,256,047 Citigroup Inc. 98,989 4,901,935 Pfizer Inc. 120,960 4,806,950 Intel Corp. 129,135 3,926,995 Johnson & Johnson 59,021 3,833,414 American International Group Inc. 50,267 3,626,261 International Business Machines Corp. 33,146 3,447,184 Merck & Co. Inc. 43,783 2,521,025 Coca-Cola Co. (The) 47,827 2,499,439 SBC Communications Inc. 64,477 2,414,019 Cisco Systems Inc./(1)/ 141,125 2,389,246 Verizon Communications Inc. 52,204 2,383,113 Procter & Gamble Co. 24,937 2,246,574 Philip Morris Companies Inc. 41,700 2,196,339 Home Depot Inc. 45,109 2,192,748 Bank of America Corp. 30,261 2,058,353 AOL Time Warner Inc./(1)/ 85,141 2,013,585 PepsiCo Inc. 33,658 1,733,387 Viacom Inc. "B"/(1)/ 34,141 1,651,400 Wells Fargo & Co. 32,638 1,612,317 Bristol-Myers Squibb Co. 37,205 1,506,430 Oracle Corp./(1)/ 105,788 1,354,086 JP Morgan Chase & Co. 37,938 1,352,490 Tyco International Ltd. 38,405 1,241,250 Morgan Stanley Dean Witter & Co. 21,172 1,213,367 Amgen Inc./(1)/ 20,142 1,202,075 Pharmacia Corp. 24,952 1,124,836 Texas Instruments Inc. 33,373 1,104,646 AT&T Corp. 68,059 1,068,526 Medtronic Inc. 23,297 1,053,257 American Express Co. 25,658 1,050,952 Bank One Corp. 22,453 938,086 Du Pont (E.I.) de Nemours & Co. 19,723 929,939 Walt Disney Co. (The) 39,250 905,890 Merrill Lynch & Co. Inc. 16,209 897,654 Anheuser-Busch Companies Inc. 17,013 888,079 3M Co. 7,549 868,210 U.S. Bancorp 36,699 828,296 Boeing Co. (The) 16,107 777,163 Gillette Co. (The) 20,303 690,505 McDonald's Corp. 24,707 685,619 United Technologies Corp. 9,100 675,220 Baxter International Inc. 11,341 675,016 Hewlett-Packard Co. 37,338 669,844 Schlumberger Ltd. 11,094 652,549 General Motors Corp. "A" 10,699 646,755 Alcoa Inc. 16,298 615,087 Colgate-Palmolive Co. 10,620 606,933 Honeywell International Inc. 15,654 599,079 Clear Channel Communications Inc./(1)/ 11,511 591,781 Ford Motor Company 34,826 574,281 Dow Chemical Co. (The) 17,366 568,216 EMC Corp./(1)/ 42,652 508,412 HCA Inc. 9,920 437,274 El Paso Corp. 9,831 432,859 International Paper Co. 9,290 399,563 General Dynamics Corp. 3,876 364,150 Southern Co. 13,377 354,357 FedEx Corp./(1)/ 5,746 333,843 Exelon Corp. 6,182 327,461 Hartford Financial Services Group Inc. 4,727 322,003 Sears, Roebuck and Co. 6,196 317,669 Sara Lee Corp. 15,080 313,061 Lucent Technologies Inc./(1)/ 65,739 310,945 Raytheon Co. 7,540 309,517 Lehman Brothers Holdings Inc. 4,703 304,002 American Electric Power Co. Inc. 6,217 286,542 CIGNA Corp. 2,786 282,473 Heinz (H.J.) Co. 6,732 279,378 Nortel Networks Corp. 61,619 276,669 Weyerhaeuser Co. 4,225 265,584 Baker Hughes Inc. 6,476 247,707 Avon Products Inc. 4,542 246,721 Williams Companies Inc. 9,928 233,904 Burlington Northern Santa Fe Corp. 7,387 222,940 Campbell Soup Co. 7,890 211,452 May Department Stores Co. (The) 5,639 196,519 MedImmune Inc./(1)/ 4,737 186,306 Entergy Corp. 4,245 184,275 Limited Inc. (The) 9,949 178,087 Norfolk Southern Corp. 7,430 177,874 Eastman Kodak Co. 5,590 174,240 Computer Sciences Corp./(1)/ 3,278 166,358 Xerox Corp./(1)/ 13,861 149,006 Halliburton Co. 8,265 141,084 36 2002 iShares Annual Report to Shareholders iShares S&P 100 Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value ---------------------------------------------------------------- COMMON STOCKS (continued) ---------------------------------------------------------------- National Semiconductor Corp./(1)/ 3,420 $ 115,220 RadioShack Corp. 3,464 104,059 Harrah's Entertainment Inc./(1)/ 2,171 96,088 AES Corp. (The)/(1)/ 10,258 92,321 Nextel Communications Inc. "A"/(1)/ 15,370 82,691 Unisys Corp./(1)/ 6,143 77,586 Delta Air Lines Inc. 2,363 77,317 Black & Decker Corp. 1,547 71,997 Rockwell International Corp. 3,536 70,932 Toys R Us Inc./(1)/ 3,777 67,835 Boise Cascade Corp. 1,115 40,408 Allegheny Technologies Inc. 1,535 25,389 ---------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $143,709,156) 115,540,837 ---------------------------------------------------------------- SHORT TERM INSTRUMENTS - 0.71% ---------------------------------------------------------------- Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 480,748 $ 480,748 Dreyfus Money Market Fund 145,936 145,936 Goldman Sachs Financial Square Prime Obligation Fund 45,502 45,502 Providian Temp Cash Money Market Fund 151,773 151,773 ---------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $823,959) 823,959 ---------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 100.57% (Cost $144,533,115) 116,364,796 ---------------------------------------------------------------- Other Assets, Less Liabilities -- (0.57%) (661,825) ---------------------------------------------------------------- NET ASSETS -- 100.00% $115,702,971 ================================================================ /(1)/ Non-income earning securities. See notes to financial statements. Schedules of Investments 37 iShares S&P 500 Index Fund Schedule of Investments March 31, 2002 Security Shares Value --------------------------------------------------------------------- COMMON STOCKS - 99.89% --------------------------------------------------------------------- General Electric Co. 3,977,593 $ 148,960,858 Microsoft Corp./(1)/ 2,167,394 130,715,532 Exxon Mobil Corp. 2,739,284 120,062,818 Wal-Mart Stores Inc. 1,784,839 109,392,782 Citigroup Inc. 2,060,297 102,025,907 Pfizer Inc. 2,517,610 100,049,821 Intel Corp. 2,688,066 81,744,087 Johnson & Johnson 1,228,450 79,787,828 American International Group Inc. 1,046,260 75,477,196 International Business Machines Corp. 689,924 71,752,096 Merck & Co. Inc. 911,060 52,458,835 Coca-Cola Co. (The) 995,251 52,011,817 SBC Communications Inc. 1,342,619 50,267,655 Cisco Systems Inc./(1)/ 2,938,172 49,743,252 Verizon Communications Inc. 1,087,292 49,634,880 Procter & Gamble Co. 519,173 46,772,296 Royal Dutch Petroleum Co. - NY Shares 850,792 46,215,021 Philip Morris Companies Inc. 867,908 45,712,714 Home Depot Inc. 938,687 45,629,575 Bank of America Corp. 630,206 42,866,612 AOL Time Warner Inc./(1)/ 1,773,235 41,937,008 ChevronTexaco Corp. 427,389 38,580,405 PepsiCo Inc. 700,920 36,097,380 Wyeth 528,528 34,697,863 Viacom Inc. "B"/(1)/ 710,512 34,367,465 Lilly (Eli) and Co. 450,360 34,317,432 Wells Fargo & Co. 679,200 33,552,480 Abbott Laboratories 622,435 32,740,081 Fannie Mae 400,254 31,972,290 Bristol-Myers Squibb Co. 775,105 31,384,001 Oracle Corp./(1)/ 2,202,717 28,194,778 JP Morgan Chase & Co. 790,636 28,186,173 BellSouth Corp. 752,172 27,725,060 Dell Computer Corp./(1)/ 1,044,804 27,279,832 Tyco International Ltd. 799,486 25,839,388 Morgan Stanley Dean Witter & Co. 440,323 25,234,911 Amgen Inc./(1)/ 418,961 25,003,592 Pharmacia Corp. 518,378 23,368,480 Texas Instruments Inc. 694,182 22,977,424 AT&T Corp. 1,417,918 22,261,313 Medtronic Inc. 485,190 21,935,440 American Express Co. 534,680 21,900,493 Wachovia Corp. 545,420 20,224,174 Bank One Corp. 467,295 19,523,585 Du Pont (E.I.) de Nemours & Co. 410,847 19,371,436 Walt Disney Co. (The) 817,030 18,857,052 Merrill Lynch & Co. Inc. 337,588 18,695,623 Anheuser-Busch Companies Inc. 354,404 18,499,889 Schering-Plough Corp. 586,757 18,365,494 3M Co. 157,179 18,077,157 Applied Materials Inc./(1)/ 327,457 17,771,091 Freddie Mac 278,570 17,652,981 U.S. Bancorp 765,244 17,271,557 Boeing Co. (The) 335,706 16,197,814 Walgreen Co. 408,855 16,023,027 Fifth Third Bancorp 232,906 15,716,497 Target Corp. 361,849 15,602,929 FleetBoston Financial Corp. 418,528 14,648,480 Automatic Data Processing Inc. 247,568 14,425,787 Gillette Co. (The) 422,994 14,386,026 McDonald's Corp. 515,225 14,297,494 Baxter International Inc. 236,614 14,083,265 United Technologies Corp. 188,738 14,004,360 Hewlett-Packard Co. 777,569 13,949,588 Kimberly-Clark Corp. 210,512 13,609,601 Schlumberger Ltd. 230,730 13,571,539 Lowe's Companies Inc. 310,389 13,498,818 General Motors Corp. "A" 222,663 13,459,978 First Data Corp. 152,907 13,341,136 MBNA Corp. 341,400 13,167,798 Unilever NV - NY Shares 229,096 13,012,653 Alcoa Inc. 340,035 12,832,921 Washington Mutual Inc. 386,055 12,790,002 Cardinal Health Inc. 180,326 12,783,310 Motorola Inc. 892,177 12,668,913 Colgate-Palmolive Co. 221,171 12,639,923 Honeywell International Inc. 325,923 12,473,073 Duke Energy Corp. 329,941 12,471,770 Marsh & McLennan Companies Inc. 110,084 12,410,870 Bank of New York Co. Inc. (The) 295,211 12,404,766 Clear Channel Communications Inc./(1)/ 239,537 12,314,597 Comcast Corp. "A"/(1)/ 378,729 12,043,582 Ford Motor Company 725,923 11,970,470 Dow Chemical Co. (The) 361,548 11,829,851 QUALCOMM Inc./(1)/ 306,440 11,534,402 38 2002 iShares Annual Report to Shareholders iShares S&P 500 Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value --------------------------------------------------------------------- COMMON STOCKS (continued) --------------------------------------------------------------------- Sun Microsystems Inc./(1)/ 1,299,452 $ 11,461,167 Electronic Data Systems Corp. 191,841 11,124,860 Allstate Corp. (The) 285,890 10,798,065 EMC Corp./(1)/ 888,185 10,587,165 Household International Inc. 183,518 10,423,822 Lockheed Martin Corp. 176,802 10,180,259 AT&T Wireless Services Inc./(1)/ 1,083,469 9,697,048 Emerson Electric Co. 168,827 9,688,982 Phillips Petroleum Co. 152,843 9,598,540 UnitedHealth Group Inc. 125,012 9,553,417 Kohls Corp./(1)/ 134,211 9,549,113 MetLife Inc. 290,554 9,152,451 HCA Inc. 206,491 9,102,123 Safeway Inc./(1)/ 201,228 9,059,285 El Paso Corp. 204,521 9,005,060 Illinois Tool Works Inc. 122,166 8,838,710 Tenet Healthcare Corp./(1)/ 130,367 8,737,196 International Paper Co. 193,232 8,310,908 Gannett Co. Inc. 106,164 8,079,080 WorldCom Corp./(1)/ 1,182,372 7,969,187 Sysco Corp. 267,156 7,966,592 Micron Technology Inc./(1)/ 239,985 7,895,507 Caterpillar Inc. 137,643 7,825,005 SunTrust Banks Inc. 115,788 7,726,533 Carnival Corp. "A" 234,978 7,672,032 General Dynamics Corp. 80,731 7,584,677 Cendant Corp./(1)/ 393,142 7,548,326 National City Corp. 242,573 7,461,545 Southern Co. 278,311 7,372,458 Conoco Inc. 250,843 7,319,599 Mellon Financial Corp. 187,561 7,237,979 Maxim Integrated Products Inc./(1)/ 129,685 7,224,751 State Street Corp. 130,434 7,223,435 Costco Wholesale Corp./(1)/ 181,104 7,211,561 Schwab (Charles) Corp. (The) 547,946 7,172,613 General Mills Inc. 145,920 7,128,192 Kroger Co./(1)/ 321,619 7,127,077 Compaq Computer Corp. 678,522 7,090,555 PNC Financial Services Group (The) 114,664 7,050,689 Veritas Software Corp./(1)/ 160,467 7,033,269 Omnicom Group Inc. 74,459 7,028,930 BB&T Corp. 183,490 6,992,804 FedEx Corp./(1)/ 119,529 6,944,635 Alltel Corp. 124,446 6,912,975 Dominion Resources Inc. 105,276 6,859,784 Waste Management Inc. 251,522 6,853,975 Exelon Corp. 128,702 6,817,345 Concord EFS Inc./(1)/ 202,197 6,723,050 Harley-Davidson Inc. 121,426 6,694,215 Hartford Financial Services Group Inc. 98,154 6,686,250 Best Buy Co. Inc./(1)/ 84,356 6,680,995 Sears, Roebuck and Co. 129,354 6,631,980 Immunex Corp./(1)/ 218,013 6,597,073 Analog Devices Inc./(1)/ 145,133 6,536,790 Sara Lee Corp. 314,124 6,521,214 Lucent Technologies Inc./(1)/ 1,368,033 6,470,796 Nike Inc. "B" 107,736 6,465,237 Agilent Technologies Inc./(1)/ 184,513 6,450,574 Raytheon Co. 156,355 6,418,373 Lehman Brothers Holdings Inc. 97,191 6,282,426 Union Pacific Corp. 99,598 6,189,020 AFLAC Inc. 209,420 6,177,890 USA Education Inc. 62,900 6,151,620 Siebel Systems Inc./(1)/ 184,916 6,030,111 American Electric Power Co. Inc. 129,247 5,956,994 Paychex Inc. 149,899 5,950,990 Southwest Airlines Co. 306,080 5,922,648 CIGNA Corp. 57,988 5,879,403 Forest Laboratories Inc. "A"/(1)/ 71,160 5,813,772 Heinz (H.J.) Co. 140,029 5,811,204 TXU Corp. 106,020 5,779,150 Nortel Networks Corp. 1,282,032 5,756,324 Anadarko Petroleum Corp. 99,739 5,629,269 Linear Technology Corp. 126,951 5,613,773 Weyerhaeuser Co. 87,524 5,501,759 Qwest Communications International Inc. 667,376 5,485,831 Capital One Financial Corp. 85,831 5,480,309 Kellogg Co. 163,035 5,473,085 Sprint Corp. (FON Group) 355,808 5,440,304 Tribune Co. 119,495 5,432,243 Albertson's Inc. 162,629 5,389,525 CVS Corp. 156,738 5,380,816 Northern Trust Corp. 89,124 5,357,244 Xilinx Inc./(1)/ 133,739 5,330,837 Guidant Corp./(1)/ 122,265 5,296,520 Schedules of Investments 39 iShares S&P 500 Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value --------------------------------------------------------------------- COMMON STOCKS (continued) --------------------------------------------------------------------- McGraw-Hill Companies Inc. (The) 77,547 $ 5,292,583 ConAgra Foods Inc. 215,507 5,226,045 Gap Inc. (The) 345,237 5,192,364 Interpublic Group of Companies Inc. 150,813 5,169,870 Baker Hughes Inc. 134,751 5,154,226 Avon Products Inc. 94,761 5,147,418 Alcan Inc. 128,320 5,085,322 Computer Associates International Inc. 231,125 5,059,326 Masco Corp. 184,063 5,052,529 Northrop Grumman Corp. 44,198 4,996,584 Chubb Corp. 68,107 4,978,622 XL Capital Ltd. "A" 53,226 4,968,647 Equity Office Properties Trust 165,622 4,967,004 KLA-Tencor Corp./(1)/ 74,363 4,945,140 Progressive Corp. (The) 29,378 4,894,962 Williams Companies Inc. 206,569 4,866,766 Wrigley (William Jr.) Co. 90,344 4,816,239 Stryker Corp./(1)/ 78,802 4,754,125 Air Products & Chemicals Inc. 91,208 4,710,893 Burlington Northern Santa Fe Corp. 154,631 4,666,764 Hancock (John) Financial Services Inc. 119,847 4,576,957 KeyCorp 169,882 4,527,355 Loews Corp. 76,831 4,500,760 Comerica Inc. 71,450 4,470,627 PeopleSoft Inc./(1)/ 121,210 4,427,801 Campbell Soup Co. 163,939 4,393,565 Franklin Resources Inc. 104,656 4,387,180 TJX Companies Inc. 109,378 4,376,214 Progress Energy Inc. 87,278 4,367,391 Newmont Mining Corp. 157,122 4,350,708 Occidental Petroleum Corp. 149,139 4,347,402 Marriott International Inc. "A" 96,699 4,346,620 ACE Ltd. 103,147 4,301,230 Deere & Co. 94,342 4,297,278 McKesson Corp. 114,406 4,282,217 Yahoo! Inc./(1)/ 230,742 4,261,805 Transocean Sedco Forex Inc. 127,858 4,248,721 FPL Group Inc. 70,543 4,200,836 Danaher Corp. 59,053 4,193,944 Pitney Bowes Inc. 97,859 4,188,365 Security Shares Value --------------------------------------------------------------------- FirstEnergy Corp. 119,383 $ 4,128,264 May Department Stores Co. (The) 117,947 4,110,453 Clorox Co. 93,361 4,073,340 Sprint Corp. (PCS Group)/(1)/ 395,265 4,067,277 Dynegy Inc. "A" 139,924 4,057,796 Boston Scientific Corp./(1)/ 161,183 4,044,081 Golden West Financial Corp. 63,204 4,013,454 Barrick Gold Corp. 215,050 3,991,328 Bed Bath & Beyond Inc./(1)/ 115,936 3,912,840 Becton Dickinson & Co. 103,434 3,901,530 MedImmune Inc./(1)/ 98,567 3,876,640 Praxair Inc. 64,430 3,852,914 Entergy Corp. 88,641 3,847,906 Adobe Systems Inc. 95,174 3,834,560 Lincoln National Corp. 75,547 3,832,499 St. Paul Companies Inc. 83,240 3,816,554 Unocal Corp. 97,845 3,811,063 Public Service Enterprise Group Inc. 82,951 3,799,156 AON Corp. 107,489 3,762,115 Broadcom Corp. "A"/(1)/ 104,706 3,758,945 Rohm & Haas Co. "A" 88,468 3,739,542 Hershey Foods Corp. 54,396 3,728,302 PPG Industries Inc. 67,550 3,709,171 Genzyme Corp. - General Division/(1)/ 84,889 3,707,103 Xcel Energy Inc. 145,968 3,700,289 Limited Inc. (The) 206,703 3,699,984 Norfolk Southern Corp. 154,463 3,697,844 WellPoint Health Networks Inc./(1)/ 57,988 3,692,096 Archer-Daniels-Midland Co. 263,864 3,675,626 Staples Inc./(1)/ 183,990 3,674,280 PG&E Corp./(1)/ 155,407 3,661,389 Eastman Kodak Co. 116,536 3,632,427 SouthTrust Corp. 137,194 3,621,922 Mattel Inc. 172,969 3,604,674 Delphi Automotive Systems Corp. 224,772 3,594,104 Marathon Oil Corp. 123,987 3,570,826 Consolidated Edison Inc. 85,155 3,568,846 Synovus Financial Corp. 116,532 3,551,895 Starbucks Corp./(1)/ 152,688 3,531,673 Univision Communications Inc./(1)/ 83,720 3,516,240 Chiron Corp./(1)/ 75,908 3,483,418 Fiserv Inc./(1)/ 75,360 3,465,806 Computer Sciences Corp./(1)/ 67,941 3,448,006 40 2002 iSHARES ANNUAL REPORT TO SHAREHOLDERS iShares S&P 500 Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value --------------------------------------------------------------------- COMMON STOCKS (continued) --------------------------------------------------------------------- TRICON Global Restaurants Inc./(1)/ 58,521 $ 3,439,864 King Pharmaceuticals Inc./(1)/ 98,208 3,438,262 Newell Rubbermaid Inc. 107,038 3,420,934 Allergan Inc. 52,677 3,405,568 Cintas Corp. 67,872 3,384,098 Altera Corp./(1)/ 154,582 3,380,708 Ingersoll-Rand Co. "A" 67,396 3,371,148 Coca-Cola Enterprises Inc. 178,529 3,352,775 Dover Corp. 81,241 3,330,881 Apple Computer Inc./(1)/ 140,043 3,314,818 Block (H & R) Inc. 73,350 3,260,407 CSX Corp. 85,546 3,260,158 MBIA Inc. 59,441 3,250,828 Intuit Inc./(1)/ 84,691 3,248,747 Burlington Resources Inc. 80,566 3,229,891 AmSouth Bancorp 146,279 3,215,212 Federated Department Stores Inc./(1)/ 77,345 3,159,543 JDS Uniphase Corp./(1)/ 536,400 3,159,396 Regions Financial Corp. 91,313 3,136,602 Apache Corp. 55,031 3,130,163 Equity Residential Properties Trust 107,866 3,100,069 Novellus Systems Inc./(1)/ 57,109 3,091,881 Johnson Controls Inc. 34,986 3,089,614 Reliant Energy Inc. 119,514 3,082,266 Xerox Corp./(1)/ 286,456 3,079,402 Jefferson-Pilot Corp. 60,433 3,026,485 Devon Energy Corp. 62,169 3,000,898 Starwood Hotels & Resorts Worldwide Inc. 79,351 2,984,391 DTE Energy Co. 65,305 2,971,378 AutoZone Inc./(1)/ 43,073 2,965,576 Lexmark International Inc. "A"/(1)/ 51,850 2,964,783 Pepsi Bottling Group Inc. 113,995 2,949,051 Fortune Brands Inc. 59,697 2,947,241 MGIC Investment Corp. 43,027 2,944,338 Halliburton Co. 172,292 2,941,024 Biomet Inc. 107,804 2,917,176 Biogen Inc./(1)/ 59,366 2,912,496 New York Times Co. "A" 60,836 2,911,611 Textron Inc. 56,520 2,888,172 Corning Inc. 376,972 2,872,527 Teradyne Inc./(1)/ 71,756 2,829,339 Amerada Hess Corp. 35,617 2,826,565 Security Shares Value --------------------------------------------------------------------- AmerisourceBergen Corp. 41,312 $ 2,821,610 Cincinnati Financial Corp. 64,462 2,814,411 Charter One Financial Inc. 89,343 2,789,288 Georgia-Pacific Corp. 91,378 2,736,771 Molex Inc. 78,450 2,719,862 UNUMProvident Corp. 97,055 2,710,746 Avery Dennison Corp. 44,127 2,693,071 Network Appliance Inc./(1)/ 131,854 2,687,185 St. Jude Medical Inc./(1)/ 34,626 2,671,396 IMS Health Inc. 118,431 2,658,776 Zimmer Holdings Inc./(1)/ 77,835 2,650,282 Marshall & Ilsley Corp. 42,355 2,636,175 MeadWestvaco Corp. 79,067 2,621,071 Union Planters Corp. 54,943 2,603,749 UST Inc. 66,280 2,580,280 Moody's Corp. 62,658 2,575,244 TRW Inc. 50,015 2,574,272 NVIDIA Corp./(1)/ 57,710 2,560,016 Solectron Corp./(1)/ 327,129 2,551,606 Genuine Parts Co. 69,007 2,537,387 Kerr-McGee Corp. 40,222 2,527,953 Ambac Financial Group Inc. 42,406 2,504,922 Sabre Holdings Corp./(1)/ 53,287 2,489,036 LSI Logic Corp./(1)/ 145,668 2,476,356 Bear Stearns Companies Inc. (The) 39,326 2,467,706 Sanmina-SCI Corp./(1)/ 208,789 2,453,271 Office Depot Inc./(1)/ 121,813 2,417,988 Nabors Industries Inc./(1)/ 56,566 2,389,914 Kinder Morgan Inc. 48,649 2,356,071 National Semiconductor Corp./(1)/ 69,887 2,354,493 Ameren Corp. 54,990 2,350,822 Ecolab Inc. 51,341 2,347,311 Parker Hannifin Corp. 47,003 2,345,450 Cinergy Corp. 65,387 2,337,585 PPL Corp. 58,530 2,318,373 Family Dollar Stores Inc. 68,900 2,308,839 Mirant Corp./(1)/ 159,537 2,305,310 Knight Ridder Inc. 33,499 2,301,046 PACCAR Inc. 30,831 2,257,138 Eaton Corp. 27,780 2,249,624 HEALTHSOUTH Corp./(1)/ 156,485 2,245,560 ITT Industries Inc. 35,181 2,217,810 Aetna Inc. 57,111 2,217,049 Noble Drilling Corp./(1)/ 53,159 2,200,251 International Game Technology/(1)/ 35,242 2,196,281 SCHEDULES OF INVESTMENTS 41 iShares S&P 500 Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value --------------------------------------------------------------------- COMMON STOCKS (continued) --------------------------------------------------------------------- Edison International/(1)/ 130,920 $ 2,192,910 Penney (J.C.) Co. Inc. (The) 105,629 2,187,577 Zions Bancorporation 36,873 2,185,463 Countrywide Credit Industries Inc. 48,477 2,169,346 Dollar General Corp. 132,903 2,163,661 RadioShack Corp. 72,022 2,163,541 Stilwell Financial Inc. 88,065 2,156,712 Plum Creek Timber Co. Inc. 71,936 2,137,219 Hilton Hotels Corp. 148,040 2,116,972 Grainger (W.W.) Inc. 37,587 2,113,517 Tiffany & Co. 58,525 2,080,564 Sempra Energy 82,711 2,080,182 Robert Half International Inc./(1)/ 70,370 2,077,322 Allegheny Energy Inc. 49,944 2,065,184 Health Management Associates Inc. "A"/(1)/ 98,133 2,034,297 Whirlpool Corp. 26,889 2,031,464 Convergys Corp./(1)/ 68,613 2,028,886 Constellation Energy Group Inc. 65,729 2,027,740 Torchmark Corp. 49,906 2,010,713 Advanced Micro Devices Inc./(1)/ 136,566 2,008,886 Nucor Corp. 31,263 2,008,335 KeySpan Corp. 55,089 2,004,689 Brown-Forman Corp. "B" 27,485 1,999,809 Harrah's Entertainment Inc./(1)/ 45,143 1,998,029 Dow Jones & Co. Inc. 34,147 1,988,038 Huntington Bancshares Inc. 100,897 1,987,671 Leggett & Platt Inc. 78,845 1,955,356 Vulcan Materials Co. 40,740 1,936,780 VF Corp. 44,618 1,929,729 AES Corp. (The)/(1)/ 213,803 1,924,227 CenturyTel Inc. 56,517 1,921,578 T. Rowe Price Group Inc. 49,257 1,917,575 Compuware Corp./(1)/ 147,689 1,906,665 BMC Software Inc./(1)/ 97,930 1,904,738 NiSource Inc. 82,917 1,902,945 Darden Restaurants Inc. 46,821 1,900,464 Applera Corp. - Applied Biosystems Group 84,819 1,895,705 EOG Resources Inc. 46,408 1,882,308 Rockwell Collins Inc. 73,383 1,850,719 QLogic Corp./(1)/ 37,127 1,838,529 Jabil Circuit Inc./(1)/ 78,044 1,836,375 Security Shares Value --------------------------------------------------------------------- Sherwin-Williams Co. (The) 62,094 $ 1,768,437 NCR Corp./(1)/ 38,821 1,737,240 Jones Apparel Group Inc./(1)/ 49,630 1,734,569 Tellabs Inc./(1)/ 164,403 1,721,299 Equifax Inc. 57,372 1,715,423 Nextel Communications Inc. "A"/(1)/ 318,396 1,712,970 Goodyear Tire & Rubber Co. (The) 64,459 1,648,217 SAFECO Corp. 51,345 1,645,094 AMR Corp./(1)/ 61,637 1,627,833 Engelhard Corp. 52,206 1,619,952 Placer Dome Inc. 131,700 1,613,325 Delta Air Lines Inc. 49,265 1,611,951 Unisys Corp./(1)/ 127,299 1,607,786 Stanley Works (The) 34,208 1,582,120 Cooper Industries Inc. 37,622 1,578,243 Sealed Air Corp./(1)/ 33,511 1,577,698 TECO Energy Inc. 55,043 1,575,881 Pinnacle West Capital Corp. 34,100 1,546,435 Calpine Corp./(1)/ 120,889 1,535,290 Eastman Chemical Co. 30,986 1,511,807 TMP Worldwide Inc./(1)/ 43,833 1,510,924 Circuit City Stores Inc. - Circuit City Group 83,530 1,506,881 Black & Decker Corp. 32,125 1,495,097 Thermo Electron Corp./(1)/ 71,561 1,483,460 Rockwell International Corp. 73,383 1,472,063 Wendy's International Inc. 42,063 1,471,364 Scientific-Atlanta Inc. 62,876 1,452,436 Waters Corp./(1)/ 51,709 1,446,301 Donnelley (R.R.) & Sons Co. 46,114 1,434,145 Inco Ltd./(1)/ 73,037 1,429,334 Toys R Us Inc./(1)/ 79,294 1,424,120 Sigma-Aldrich Corp. 29,514 1,385,977 SUPERVALU Inc. 53,131 1,370,780 Maytag Corp. 30,690 1,358,033 International Flavors & Fragrances Inc. 38,151 1,334,140 Phelps Dodge Corp. 31,677 1,333,602 Nordstrom Inc. 53,612 1,313,494 Fluor Corp. 31,946 1,303,077 Goodrich Co. 41,019 1,297,841 Citrix Systems Inc./(1)/ 74,395 1,285,546 ADC Telecommunications Inc./(1)/ 313,875 1,277,471 Pactiv Corp./(1)/ 63,673 1,274,733 Dana Corp. 59,316 1,273,515 42 2002 iSHARES ANNUAL REPORT TO SHAREHOLDERS iShares S&P 500 Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value --------------------------------------------------------------------- COMMON STOCKS (continued) --------------------------------------------------------------------- Ashland Inc. 27,771 $ 1,263,858 Mercury Interactive Corp./(1)/ 33,233 1,251,222 Centex Corp. 24,002 1,246,424 Sunoco Inc. 30,933 1,237,629 Deluxe Corp. 26,690 1,234,679 Rational Software Corp./(1)/ 77,857 1,232,476 Alberto-Culver Co. "B" 22,793 1,230,822 Citizens Communications Co./(1)/ 112,830 1,212,923 Conexant Systems Inc./(1)/ 100,357 1,209,302 Bard (C.R.) Inc. 20,440 1,206,982 Liz Claiborne Inc. 42,368 1,201,556 CMS Energy Corp. 52,882 1,196,720 CIENA Corp./(1)/ 131,556 1,184,004 American Power Conversion Corp./(1)/ 78,311 1,157,437 Bemis Co. 21,274 1,156,242 Watson Pharmaceuticals Inc./(1)/ 42,583 1,153,573 Pulte Homes Inc. 23,653 1,131,796 Temple-Inland Inc. 19,838 1,125,211 Hasbro Inc. 69,269 1,095,836 PMC-Sierra Inc./(1)/ 65,975 1,074,073 Navistar International Corp. 23,928 1,060,010 Ball Corp. 22,084 1,042,806 Allied Waste Industries Inc./(1)/ 79,203 1,029,639 Symbol Technologies Inc. 90,988 1,022,705 Freeport-McMoRan Copper & Gold Inc./(1)/ 57,730 1,017,203 Autodesk Inc. 21,769 1,016,395 Pall Corp. 49,183 1,007,760 Coors (Adolf) Company "B" 14,578 983,578 Bausch & Lomb Inc. 21,678 966,188 Manor Care Inc./(1)/ 41,319 962,733 Applied Micro Circuits Corp./(1)/ 120,106 960,848 Brunswick Corp. 35,074 958,222 Comverse Technology Inc./(1)/ 74,493 943,826 Humana Inc./(1)/ 68,098 921,366 PerkinElmer Inc. 49,197 910,145 Palm Inc./(1)/ 227,872 909,209 Winn-Dixie Stores Inc. 56,323 903,421 Tektronix Inc./(1)/ 37,129 878,472 Security Shares Value --------------------------------------------------------------------- Rowan Companies Inc./(1)/ 37,883 $ 872,824 Visteon Corp. 52,511 869,057 Providian Financial Corp. 114,790 866,665 KB HOME 19,654 852,984 Avaya Inc./(1)/ 115,477 852,220 Meredith Corp. 19,891 845,566 Boise Cascade Corp. 23,200 840,768 Millipore Corp. 18,993 840,250 Quintiles Transnational Corp./(1)/ 46,921 832,848 Nicor Inc. 18,100 824,455 Gateway Inc./(1)/ 129,797 820,317 Dillards Inc. "A" 33,796 806,373 Snap-On Inc. 23,321 794,080 Cummins Inc. 16,649 786,332 Vitesse Semiconductor Corp./(1)/ 75,419 739,106 Ryder System Inc. 24,290 717,527 Crane Co. 24,075 658,211 United States Steel Corp. 35,757 648,990 Parametric Technology Corp./(1)/ 105,970 640,059 Big Lots Inc. 45,409 637,996 Reebok International Ltd./(1)/ 23,568 637,043 Cooper Tire & Rubber Co. 29,248 633,219 Hercules Inc./(1)/ 43,272 575,950 Great Lakes Chemical Corp. 20,307 572,048 Novell Inc./(1)/ 144,467 561,977 Peoples Energy Corp. 14,199 559,157 Andrew Corp./(1)/ 32,510 543,892 Allegheny Technologies Inc. 32,305 534,325 Tupperware Corp. 23,356 531,349 Worthington Industries Inc. 34,211 525,481 Thomas & Betts Corp. 23,435 495,885 Conseco Inc./(1)/ 135,545 490,673 American Greetings Corp. "A" 25,576 464,204 Louisiana-Pacific Corp. 41,998 451,059 McDermott International Inc./(1)/ 24,708 384,209 Power-One Inc./(1)/ 31,657 258,954 Sapient Corp./(1)/ 49,241 233,895 U.S. Airways Group Inc./(1)/ 27,040 174,408 --------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $4,767,525,826) 4,204,475,242 --------------------------------------------------------------------- SCHEDULES OF INVESTMENTS 43 iShares S&P 500 Index Fund Schedule of Investments (continued) March 31, 2002 Shares or Security Principal Value --------------------------------------------------------------------- SHORT TERM INSTRUMENTS - 1.79% --------------------------------------------------------------------- Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 40,766,114 $ 40,766,114 Dreyfus Money Market Fund 10,418,978 10,418,978 General Electric Commercial Paper 1.86%, 05/10/02 $ 9,924,222 9,924,222 Goldman Sachs Financial Square Prime Obligation Fund 1,205,623 1,205,623 Providian Temp Cash Money Market Fund 12,992,133 12,992,133 --------------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $75,307,070) 75,307,070 --------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 101.68% (Cost $4,842,832,896) 4,279,782,312 --------------------------------------------------------------------- Other Assets, Less Liabilities -- (1.68%) (70,836,315) --------------------------------------------------------------------- NET ASSETS -- 100.00% $4,208,945,997 ===================================================================== /(1)/ Non-income earning securities. See notes to financial statements. 44 2002 iSHARES ANNUAL REPORT TO SHAREHOLDERS iShares S&P 500/BARRA Growth Index Fund Schedule of Investments March 31, 2002 Security Shares Value ------------------------------------------------------------------ COMMON STOCKS - 99.91% ------------------------------------------------------------------ General Electric Co. 895,116 $ 33,522,094 Microsoft Corp./(1)/ 487,831 29,421,088 Wal-Mart Stores Inc. 401,526 24,609,529 Pfizer Inc. 566,318 22,505,477 Intel Corp. 604,704 18,389,049 Johnson & Johnson 276,374 17,950,491 International Business Machines Corp. 155,199 16,140,696 Merck & Co. Inc. 204,874 11,796,645 Coca-Cola Co. (The) 223,889 11,700,439 Cisco Systems Inc./(1)/ 660,857 11,188,309 Procter & Gamble Co. 116,719 10,515,215 Philip Morris Companies Inc. 195,246 10,283,607 Home Depot Inc. 211,088 10,260,988 PepsiCo Inc. 157,595 8,116,143 Wyeth 118,829 7,801,124 Lilly (Eli) and Co. 101,225 7,713,345 Abbott Laboratories 140,184 7,373,678 Fannie Mae 89,958 7,185,845 Bristol-Myers Squibb Co. 174,362 7,059,917 Oracle Corp./(1)/ 495,357 6,340,570 Dell Computer Corp./(1)/ 234,905 6,133,370 Amgen Inc./(1)/ 94,375 5,632,300 Pharmacia Corp. 116,771 5,264,037 Texas Instruments Inc. 156,312 5,173,927 Medtronic Inc. 109,036 4,929,518 Anheuser-Busch Companies Inc. 79,701 4,160,392 Schering-Plough Corp. 131,923 4,129,190 3M Co. 35,340 4,064,453 Applied Materials Inc./(1)/ 73,784 4,004,258 Walgreen Co. 91,971 3,604,343 Fifth Third Bancorp 52,550 3,546,074 Target Corp. 81,384 3,509,278 Automatic Data Processing Inc. 55,863 3,255,137 Gillette Co. (The) 95,066 3,233,195 Baxter International Inc. 53,184 3,165,512 Kimberly-Clark Corp. 47,276 3,056,393 Lowe's Companies Inc. 69,781 3,034,776 First Data Corp. 34,398 3,001,225 Unilever NV - NY Shares 51,478 2,923,950 Cardinal Health Inc. 40,466 2,868,635 Colgate-Palmolive Co. 49,665 2,838,355 Marsh & McLennan Companies Inc. 24,764 2,791,893 Bank of New York Co. Inc. (The) 66,351 2,788,069 QUALCOMM Inc./(1)/ 69,086 2,600,397 Security Shares Value ------------------------------------------------------------------ Sun Microsystems Inc./(1)/ 292,270 $ 2,577,821 Electronic Data Systems Corp. 43,291 2,510,445 EMC Corp./(1)/ 199,759 2,381,127 Kohls Corp./(1)/ 30,188 2,147,876 UnitedHealth Group Inc. 28,106 2,147,861 Sysco Corp. 60,043 1,790,482 Maxim Integrated Products Inc./(1)/ 29,267 1,630,465 Mellon Financial Corp. 42,213 1,629,000 State Street Corp. 29,246 1,619,643 Schwab (Charles) Corp. (The) 123,245 1,613,277 General Mills Inc. 32,860 1,605,211 Kroger Co./(1)/ 72,177 1,599,442 Omnicom Group Inc. 16,780 1,584,032 Veritas Software Corp./(1)/ 36,085 1,581,606 Concord EFS Inc./(1)/ 45,662 1,518,261 Best Buy Co. Inc./(1)/ 19,110 1,513,512 Harley-Davidson Inc. 27,306 1,505,380 Immunex Corp./(1)/ 49,151 1,487,309 Analog Devices Inc./(1)/ 32,848 1,479,474 Sara Lee Corp. 70,587 1,465,386 USA Education Inc. 14,108 1,379,762 Siebel Systems Inc./(1)/ 41,717 1,360,391 Paychex Inc. 33,773 1,340,788 Forest Laboratories Inc. "A"/(1)/ 16,075 1,313,327 Heinz (H.J.) Co. 31,506 1,307,499 Linear Technology Corp. 28,538 1,261,950 Kellogg Co. 36,606 1,228,863 Northern Trust Corp. 20,026 1,203,763 Xilinx Inc./(1)/ 30,136 1,201,221 Guidant Corp./(1)/ 27,512 1,191,820 McGraw-Hill Companies Inc. (The) 17,419 1,188,847 Interpublic Group of Companies Inc. 34,078 1,168,194 Avon Products Inc. 21,297 1,156,853 KLA-Tencor Corp./(1)/ 16,847 1,120,325 Wrigley (William Jr.) Co. 20,312 1,082,833 Stryker Corp./(1)/ 17,752 1,070,978 PeopleSoft Inc./(1)/ 27,241 995,114 Campbell Soup Co. 36,883 988,464 TJX Companies Inc. 24,526 981,285 Yahoo! Inc./(1)/ 52,238 964,836 Pitney Bowes Inc. 21,926 938,433 Clorox Co. 20,970 914,921 Sprint Corp. (PCS Group)/(1)/ 88,828 914,040 Boston Scientific Corp./(1)/ 36,377 912,699 Bed Bath & Beyond Inc./(1)/ 26,091 880,571 MedImmune Inc./(1)/ 22,308 877,374 SCHEDULES OF INVESTMENTS 45 iShares S&P 500/BARRA Growth Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value ------------------------------------------------------------------ Adobe Systems Inc. 21,374 $ 861,158 Hershey Foods Corp. 12,259 840,232 Genzyme Corp. - General Division/(1)/ 19,072 832,874 Mattel Inc. 38,957 811,864 Univision Communications Inc./(1)/ 18,972 796,824 Starbucks Corp./(1)/ 34,324 793,914 Fiserv Inc./(1)/ 17,106 786,705 Chiron Corp./(1)/ 17,043 782,103 King Pharmaceuticals Inc./(1)/ 22,178 776,452 TRICON Global Restaurants Inc./(1)/ 13,173 774,309 Cintas Corp. 15,335 764,603 Altera Corp./(1)/ 34,738 759,720 Allergan Inc. 11,751 759,702 Intuit Inc./(1)/ 19,142 734,287 Block (H & R) Inc. 16,428 730,225 Lexmark International Inc. "A"/(1)/ 11,723 670,321 AutoZone Inc./(1)/ 9,629 662,957 Biomet Inc. 24,242 655,989 Biogen Inc./(1)/ 13,318 653,381 New York Times Co. "A" 13,593 650,561 Network Appliance Inc./(1)/ 29,905 609,464 St. Jude Medical Inc./(1)/ 7,879 607,865 Avery Dennison Corp. 9,925 605,723 IMS Health Inc. 26,591 596,968 Zimmer Holdings Inc./(1)/ 17,508 596,147 UST Inc. 15,054 586,052 Moody's Corp. 14,077 578,565 NVIDIA Corp./(1)/ 13,019 577,523 Ecolab Inc. 11,535 527,380 Family Dollar Stores Inc. 15,547 520,980 International Game Technology/(1)/ 8,036 500,804 Edison International/(1)/ 29,387 492,232 Plum Creek Timber Co. Inc. 16,364 486,174 RadioShack Corp. 16,175 485,897 Robert Half International Inc./(1)/ 15,826 467,184 Tiffany & Co. 13,075 464,816 Convergys Corp./(1)/ 15,545 459,666 Dow Jones & Co. Inc. 7,582 441,424 Applera Corp. - Applied Biosystems Group 19,134 427,645 QLogic Corp./(1)/ 8,378 414,879 Equifax Inc. 13,088 391,331 Security Shares Value ------------------------------------------------------------------ Nextel Communications Inc. "A"/(1)/ 71,977 $ 387,236 Stanley Works (The) 7,722 357,143 Sealed Air Corp./(1)/ 7,569 356,349 Waters Corp./(1)/ 11,701 327,277 Maytag Corp. 6,943 307,228 International Flavors & Fragrances Inc. 8,562 299,413 Citrix Systems Inc./(1)/ 16,954 292,965 Mercury Interactive Corp./(1)/ 7,472 281,321 Deluxe Corp. 5,993 277,236 Rational Software Corp./(1)/ 17,508 277,152 Bard (C.R.) Inc. 4,612 272,339 PMC-Sierra Inc./(1)/ 14,898 242,539 Avaya Inc./(1)/ 26,735 197,304 Millipore Corp. 4,286 189,613 Parametric Technology Corp./(1)/ 23,609 142,598 Tupperware Corp. 5,236 119,119 U.S. Airways Group Inc./(1)/ 6,132 39,551 ------------------------------------------------------------------ TOTAL COMMON STOCKS (Cost: $483,180,180) 464,218,970 ------------------------------------------------------------------ SHORT TERM INSTRUMENTS - 3.06% ------------------------------------------------------------------ Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 8,226,518 8,226,518 Dreyfus Money Market Fund 2,854,577 2,854,577 Goldman Sachs Financial Square Prime Obligation Fund 496,497 496,497 Providian Temp Cash Money Market Fund 2,656,760 2,656,760 ------------------------------------------------------------------ TOTAL SHORT TERM INSTRUMENTS (Cost: $14,234,352) 14,234,352 ------------------------------------------------------------------ TOTAL INVESTMENTS IN SECURITIES -- 102.97% (Cost $497,414,532) 478,453,322 ------------------------------------------------------------------ Other Assets, Less Liabilities -- (2.97%) (13,797,649) ------------------------------------------------------------------ NET ASSETS -- 100.00% $464,655,673 ================================================================== /(1)/ Non-income earning securities. See notes to financial statements. 46 2002 iSHARES ANNUAL REPORT TO SHAREHOLDERS iShares S&P 500/BARRA Value Index Fund Schedule of Investments March 31, 2002 Security Shares Value ------------------------------------------------------------------ COMMON STOCKS - 99.91% ------------------------------------------------------------------ Exxon Mobil Corp. 748,897 $ 32,824,156 Citigroup Inc. 563,264 27,892,833 American International Group Inc. 285,974 20,630,164 SBC Communications Inc. 367,022 13,741,304 Verizon Communications Inc. 297,231 13,568,595 Royal Dutch Petroleum Co. - NY Shares 232,568 12,633,094 Bank of America Corp. 172,240 11,715,765 AOL Time Warner Inc./(1)/ 484,666 11,462,351 ChevronTexaco Corp. 116,744 10,538,481 Viacom Inc. "B"/(1)/ 194,155 9,391,277 Wells Fargo & Co. 185,607 9,168,986 JP Morgan Chase & Co. 216,026 7,701,327 BellSouth Corp. 205,577 7,577,568 Tyco International Ltd. 218,523 7,062,663 Morgan Stanley Dean Witter & Co. 120,517 6,906,829 AT&T Corp. 387,530 6,084,221 American Express Co. 146,138 5,985,812 Wachovia Corp. 148,978 5,524,104 Bank One Corp. 127,714 5,335,891 Du Pont (E.I.) de Nemours & Co. 112,304 5,295,134 Walt Disney Co. (The) 223,309 5,153,972 Merrill Lynch & Co. Inc. 92,219 5,107,088 Freddie Mac 76,147 4,825,435 U.S. Bancorp 208,986 4,716,814 Boeing Co. (The) 91,756 4,427,227 FleetBoston Financial Corp. 114,286 4,000,010 McDonald's Corp. 140,791 3,906,950 United Technologies Corp. 51,717 3,837,401 Hewlett-Packard Co. 212,482 3,811,927 Schlumberger Ltd. 63,051 3,708,660 General Motors Corp. "A" 60,832 3,677,294 MBNA Corp. 93,285 3,598,002 Alcoa Inc. 92,830 3,503,404 Washington Mutual Inc. 105,490 3,494,884 Motorola Inc. 243,806 3,462,045 Duke Energy Corp. 90,450 3,419,010 Honeywell International Inc. 89,072 3,408,785 Clear Channel Communications Inc./(1)/ 65,446 3,364,579 Comcast Corp. "A"/(1)/ 103,489 3,290,950 Ford Motor Company 198,366 3,271,055 Dow Chemical Co. (The) 98,800 3,232,736 Allstate Corp. (The) 78,082 2,949,157 Security Shares Value ------------------------------------------------------------------ Household International Inc. 50,143 $ 2,848,122 Lockheed Martin Corp. 48,535 2,794,645 AT&T Wireless Services Inc./(1)/ 296,035 2,649,513 Emerson Electric Co. 46,087 2,644,933 Phillips Petroleum Co. 41,772 2,623,282 MetLife Inc. 79,396 2,500,974 HCA Inc. 56,409 2,486,509 Safeway Inc./(1)/ 54,963 2,474,434 El Paso Corp. 55,914 2,461,893 Illinois Tool Works Inc. 33,393 2,415,984 Tenet Healthcare Corp./(1)/ 35,639 2,388,526 International Paper Co. 52,792 2,270,584 Gannett Co. Inc. 28,992 2,206,291 WorldCom Corp./(1)/ 323,102 2,177,707 Micron Technology Inc./(1)/ 65,657 2,160,115 Caterpillar Inc. 37,578 2,136,309 SunTrust Banks Inc. 31,616 2,109,736 Carnival Corp. "A" 64,223 2,096,881 General Dynamics Corp. 22,121 2,078,268 Cendant Corp./(1)/ 107,529 2,064,557 National City Corp. 66,369 2,041,510 Southern Co. 76,164 2,017,584 Conoco Inc. 68,536 1,999,880 Costco Wholesale Corp./(1)/ 49,544 1,972,842 Compaq Computer Corp. 186,060 1,944,327 PNC Financial Services Group (The) 31,497 1,936,751 BB&T Corp. 50,405 1,920,935 FedEx Corp./(1)/ 32,673 1,898,301 Alltel Corp. 33,989 1,888,089 Dominion Resources Inc. 28,802 1,876,738 Waste Management Inc. 68,787 1,874,446 Exelon Corp. 35,149 1,861,843 Hartford Financial Services Group Inc. 26,849 1,828,954 Sears, Roebuck and Co. 35,315 1,810,600 Agilent Technologies Inc./(1)/ 50,657 1,770,969 Lucent Technologies Inc./(1)/ 373,981 1,768,930 Nike Inc. "B" 29,322 1,759,613 Raytheon Co. 42,823 1,757,884 Lehman Brothers Holdings Inc. 26,690 1,725,242 Union Pacific Corp. 27,207 1,690,643 AFLAC Inc. 57,195 1,687,253 American Electric Power Co. Inc. 35,299 1,626,931 Southwest Airlines Co. 83,810 1,621,724 CIGNA Corp. 15,835 1,605,511 SCHEDULES OF INVESTMENTS 47 iShares S&P 500/BARRA Value Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value ------------------------------------------------------------------ COMMON STOCKS (continued) ------------------------------------------------------------------ TXU Corp. 29,056 $ 1,583,843 Nortel Networks Corp. 350,587 1,574,136 Anadarko Petroleum Corp. 27,242 1,537,538 Weyerhaeuser Co. 24,111 1,515,617 Capital One Financial Corp. 23,540 1,503,029 Qwest Communications International Inc. 182,358 1,498,983 Sprint Corp. (FON Group) 97,196 1,486,127 Tribune Co. 32,628 1,483,269 Albertson's Inc. 44,494 1,474,531 CVS Corp. 42,805 1,469,496 ConAgra Foods Inc. 58,867 1,427,525 Gap Inc. (The) 94,487 1,421,084 Baker Hughes Inc. 36,776 1,406,682 Alcan Inc. 35,128 1,392,123 Computer Associates International Inc. 63,067 1,380,537 Masco Corp. 50,272 1,379,966 Northrop Grumman Corp. 12,088 1,366,548 Equity Office Properties Trust 45,408 1,361,786 Chubb Corp. 18,564 1,357,028 XL Capital Ltd. "A" 14,517 1,355,162 Progressive Corp. (The) 8,043 1,340,125 Williams Companies Inc. 56,458 1,330,150 Air Products & Chemicals Inc. 24,908 1,286,498 Burlington Northern Santa Fe Corp. 42,083 1,270,065 Hancock (John) Financial Services Inc. 32,701 1,248,851 KeyCorp 46,391 1,236,320 Loews Corp. 20,973 1,228,598 Comerica Inc. 19,494 1,219,740 Progress Energy Inc. 23,944 1,198,158 Franklin Resources Inc. 28,567 1,197,529 Occidental Petroleum Corp. 40,913 1,192,614 Marriott International Inc. "A" 26,423 1,187,714 Newmont Mining Corp. 42,888 1,187,569 ACE Ltd. 28,418 1,185,031 Deere & Co. 25,905 1,179,973 McKesson Corp. 31,312 1,172,008 Transocean Sedco Forex Inc. 34,906 1,159,926 Danaher Corp. 16,267 1,155,282 FPL Group Inc. 19,288 1,148,600 FirstEnergy Corp. 32,611 1,127,688 May Department Stores Co. (The) 32,070 1,117,640 Security Shares Value ------------------------------------------------------------------ Dynegy Inc. "A" 38,452 $ 1,115,108 Golden West Financial Corp. 17,279 1,097,217 Barrick Gold Corp. 58,725 1,089,936 Becton Dickinson & Co. 28,345 1,069,173 Lincoln National Corp. 20,766 1,053,459 Praxair Inc. 17,594 1,052,121 Entergy Corp. 24,196 1,050,348 Unocal Corp. 26,722 1,040,822 St. Paul Companies Inc. 22,693 1,040,474 Public Service Enterprise Group Inc. 22,604 1,035,263 AON Corp. 29,480 1,031,800 Broadcom Corp. "A"/(1)/ 28,717 1,030,940 Rohm & Haas Co. "A" 24,154 1,020,990 Xcel Energy Inc. 40,131 1,017,321 PPG Industries Inc. 18,457 1,013,474 Limited Inc. (The) 56,592 1,012,997 Norfolk Southern Corp. 42,247 1,011,393 Staples Inc./(1)/ 50,570 1,009,883 WellPoint Health Networks Inc./(1)/ 15,858 1,009,679 Archer-Daniels-Midland Co. 71,844 1,000,780 PG&E Corp./(1)/ 42,442 999,934 SouthTrust Corp. 37,760 996,864 Eastman Kodak Co. 31,877 993,606 Delphi Automotive Systems Corp. 61,388 981,594 Marathon Oil Corp. 33,902 976,378 Consolidated Edison Inc. 23,259 974,785 Synovus Financial Corp. 31,915 972,769 Computer Sciences Corp./(1)/ 18,648 946,386 Newell Rubbermaid Inc. 29,209 933,520 Ingersoll-Rand Co. "A" 18,405 920,618 Coca-Cola Enterprises Inc. 48,713 914,830 Apple Computer Inc./(1)/ 38,510 911,532 Dover Corp. 22,144 907,904 CSX Corp. 23,340 889,487 MBIA Inc. 16,247 888,548 Burlington Resources Inc. 22,012 882,461 AmSouth Bancorp 39,900 877,002 JDS Uniphase Corp./(1)/ 147,713 870,030 Federated Department Stores Inc./(1)/ 21,034 859,239 Regions Financial Corp. 24,892 855,040 Apache Corp. 15,006 853,541 Equity Residential Properties Trust 29,666 852,601 Novellus Systems Inc./(1)/ 15,711 850,594 Xerox Corp./(1)/ 78,876 847,917 Johnson Controls Inc. 9,574 845,480 48 2002 iSHARES ANNUAL REPORT TO SHAREHOLDERS iShares S&P 500/BARRA Value Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value ------------------------------------------------------------------ COMMON STOCKS (continued) ------------------------------------------------------------------ Reliant Energy Inc. 32,644 $ 841,889 Jefferson-Pilot Corp. 16,472 824,918 Devon Energy Corp. 17,022 821,652 Starwood Hotels & Resorts Worldwide Inc. 21,657 814,520 DTE Energy Co. 17,812 810,446 Pepsi Bottling Group Inc. 31,104 804,660 MGIC Investment Corp. 11,746 803,779 Halliburton Co. 47,059 803,297 Fortune Brands Inc. 16,265 803,003 Corning Inc. 103,603 789,455 Textron Inc. 15,448 789,393 Teradyne Inc./(1)/ 19,814 781,266 AmerisourceBergen Corp. 11,355 775,547 Cincinnati Financial Corp. 17,714 773,393 Amerada Hess Corp. 9,722 771,538 Charter One Financial Inc. 24,607 768,231 Georgia-Pacific Corp. 25,161 753,572 UNUMProvident Corp. 26,499 740,117 Molex Inc. 21,322 739,234 Marshall & Ilsley Corp. 11,639 724,411 MeadWestvaco Corp. 21,726 720,217 Union Planters Corp. 15,074 714,357 TRW Inc. 13,840 712,345 Solectron Corp./(1)/ 89,916 701,345 Genuine Parts Co. 18,949 696,755 Kerr-McGee Corp. 10,989 690,659 Sabre Holdings Corp./(1)/ 14,700 686,637 Bear Stearns Companies Inc. (The) 10,907 684,414 LSI Logic Corp./(1)/ 40,205 683,485 Ambac Financial Group Inc. 11,552 682,377 Sanmina-SCI Corp./(1)/ 57,049 670,326 Office Depot Inc./(1)/ 33,652 667,992 Nabors Industries Inc./(1)/ 15,426 651,749 Kinder Morgan Inc. 13,436 650,705 National Semiconductor Corp./(1)/ 19,291 649,914 Cinergy Corp. 18,047 645,180 Ameren Corp. 15,084 644,841 Parker Hannifin Corp. 12,850 641,215 Mirant Corp./(1)/ 43,905 634,427 PPL Corp. 16,013 634,275 Knight Ridder Inc. 9,222 633,459 HEALTHSOUTH Corp./(1)/ 42,957 616,433 Security Shares Value ------------------------------------------------------------------ Eaton Corp. 7,606 $ 615,934 PACCAR Inc. 8,405 615,330 ITT Industries Inc. 9,706 611,866 Aetna Inc. 15,711 609,901 Noble Drilling Corp./(1)/ 14,497 600,031 Countrywide Credit Industries Inc. 13,385 598,979 Penney (J.C.) Co. Inc. (The) 28,889 598,291 Zions Bancorporation 10,034 594,715 Stilwell Financial Inc. 24,237 593,564 Dollar General Corp. 36,235 589,906 Hilton Hotels Corp. 40,438 578,263 Grainger (W.W.) Inc. 10,231 575,289 Sempra Energy 22,685 570,528 Allegheny Energy Inc. 13,709 566,867 Whirlpool Corp. 7,353 555,519 Constellation Energy Group Inc. 17,943 553,542 KeySpan Corp. 15,198 553,055 Health Management Associates Inc. "A"/(1)/ 26,539 550,153 Nucor Corp. 8,537 548,417 Torchmark Corp. 13,590 547,541 Advanced Micro Devices Inc./(1)/ 37,212 547,389 Brown-Forman Corp. "B" 7,471 543,590 Harrah's Entertainment Inc./(1)/ 12,273 543,203 Huntington Bancshares Inc. 27,528 542,302 Leggett & Platt Inc. 21,495 533,076 Vulcan Materials Co. 11,094 527,409 Compuware Corp./(1)/ 40,741 525,966 CenturyTel Inc. 15,464 525,776 T. Rowe Price Group Inc. 13,505 525,750 AES Corp. (The)/(1)/ 58,403 525,627 VF Corp. 12,144 525,228 NiSource Inc. 22,677 520,437 BMC Software Inc./(1)/ 26,753 520,346 Darden Restaurants Inc. 12,771 518,375 EOG Resources Inc. 12,625 512,070 Jabil Circuit Inc./(1)/ 21,607 508,413 Rockwell Collins Inc. 20,127 507,603 Sherwin-Williams Co. (The) 16,883 480,828 Jones Apparel Group Inc./(1)/ 13,736 480,073 NCR Corp./(1)/ 10,643 476,274 Tellabs Inc./(1)/ 44,934 470,459 Goodyear Tire & Rubber Co. (The) 17,891 457,473 SAFECO Corp. 13,979 447,887 AMR Corp./(1)/ 16,948 447,597 SCHEDULES OF INVESTMENTS 49 iShares S&P 500/BARRA Value Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value ------------------------------------------------------------------ COMMON STOCKS (continued) ------------------------------------------------------------------ Delta Air Lines Inc. 13,513 $ 442,145 Engelhard Corp. 14,222 441,309 Unisys Corp./(1)/ 34,936 441,242 Placer Dome Inc. 35,992 440,902 TECO Energy Inc. 15,268 437,123 Cooper Industries Inc. 10,259 430,365 Calpine Corp./(1)/ 33,434 424,612 Pinnacle West Capital Corp. 9,277 420,712 TMP Worldwide Inc./(1)/ 12,135 418,293 Circuit City Stores Inc. - Circuit City Group 22,820 411,673 Eastman Chemical Co. 8,433 411,446 Black & Decker Corp. 8,687 404,293 Thermo Electron Corp./(1)/ 19,491 404,048 Rockwell International Corp. 20,127 403,748 Wendy's International Inc. 11,484 401,710 Scientific-Atlanta Inc. 17,140 395,934 Inco Ltd./(1)/ 19,947 390,363 Toys R Us Inc./(1)/ 21,624 388,367 Donnelley (R.R.) & Sons Co. 12,414 386,075 Sigma-Aldrich Corp. 8,040 377,558 SUPERVALU Inc. 14,585 376,293 Phelps Dodge Corp. 8,633 363,449 Nordstrom Inc. 14,728 360,836 Fluor Corp. 8,790 358,544 Goodrich Co. 11,181 353,767 ADC Telecommunications Inc./(1)/ 86,523 352,150 Dana Corp. 16,283 349,596 Pactiv Corp./(1)/ 17,443 349,209 Centex Corp. 6,680 346,892 Ashland Inc. 7,544 343,327 Conexant Systems Inc./(1)/ 27,929 336,544 Alberto-Culver Co. "B" 6,207 335,178 Sunoco Inc. 8,301 332,123 CMS Energy Corp. 14,570 329,719 Citizens Communications Co./(1)/ 30,666 329,660 Liz Claiborne Inc. 11,516 326,594 CIENA Corp./(1)/ 35,865 322,785 American Power Conversion Corp./(1)/ 21,441 316,898 Watson Pharmaceuticals Inc./(1)/ 11,679 316,384 Bemis Co. 5,758 312,947 Pulte Homes Inc. 6,532 312,556 Temple-Inland Inc. 5,392 305,834 Security Shares Value ------------------------------------------------------------------ Hasbro Inc. 18,920 $ 299,314 Navistar International Corp. 6,516 288,659 Ball Corp. 6,006 283,603 Symbol Technologies Inc. 25,020 281,225 Allied Waste Industries Inc./(1)/ 21,585 280,605 Autodesk Inc. 5,989 279,626 Freeport-McMoRan Copper & Gold Inc./(1)/ 15,778 278,008 Pall Corp. 13,375 274,054 Coors (Adolf) Company "B" 3,975 268,193 Bausch & Lomb Inc. 5,893 262,651 Brunswick Corp. 9,597 262,190 Applied Micro Circuits Corp./(1)/ 32,713 261,704 Manor Care Inc./(1)/ 11,198 260,913 Comverse Technology Inc./(1)/ 20,340 257,708 Humana Inc./(1)/ 18,473 249,940 PerkinElmer Inc. 13,506 249,861 Palm Inc./(1)/ 62,253 248,389 Winn-Dixie Stores Inc. 15,385 246,775 Tektronix Inc./(1)/ 10,102 239,013 KB HOME 5,496 238,526 Visteon Corp. 14,286 236,433 Rowan Companies Inc./(1)/ 10,234 235,791 Providian Financial Corp. 31,085 234,692 Quintiles Transnational Corp./(1)/ 13,112 232,738 Meredith Corp. 5,405 229,767 Boise Cascade Corp. 6,340 229,762 Gateway Inc./(1)/ 35,503 224,379 Nicor Inc. 4,887 222,603 Dillards Inc. "A" 9,151 218,343 Snap-On Inc. 6,352 216,286 Cummins Inc. 4,546 214,708 Vitesse Semiconductor Corp./(1)/ 21,336 209,093 Ryder System Inc. 6,647 196,352 Crane Co. 6,522 178,311 United States Steel Corp. 9,729 176,581 Big Lots Inc. 12,487 175,442 Reebok International Ltd./(1)/ 6,433 173,884 Cooper Tire & Rubber Co. 7,947 172,053 Hercules Inc./(1)/ 11,850 157,724 Great Lakes Chemical Corp. 5,511 155,245 Novell Inc./(1)/ 39,685 154,375 Peoples Energy Corp. 3,865 152,204 Andrew Corp./(1)/ 8,867 148,345 Allegheny Technologies Inc. 8,781 145,238 50 2002 iSHARES ANNUAL REPORT TO SHAREHOLDERS iShares S&P 500/BARRA Value Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value ------------------------------------------------------------------ COMMON STOCKS (continued) ------------------------------------------------------------------ Worthington Industries Inc. 9,335 $ 143,386 Conseco Inc./(1)/ 37,784 136,778 Thomas & Betts Corp. 6,380 135,001 American Greetings Corp. "A" 6,916 125,525 Louisiana-Pacific Corp. 11,420 122,651 McDermott International Inc./(1)/ 6,719 104,480 Power-One Inc./(1)/ 8,626 70,561 Sapient Corp./(1)/ 13,867 65,868 ------------------------------------------------------------------ TOTAL COMMON STOCKS (Cost: $621,526,375) 585,532,659 ------------------------------------------------------------------ Security Shares Value ------------------------------------------------------------------ SHORT TERM INSTRUMENTS - 2.51% ------------------------------------------------------------------ Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 8,137,040 $ 8,137,040 Dreyfus Money Market Fund 3,630,271 3,630,271 Goldman Sachs Financial Square Prime Obligation Fund 170,099 170,099 Providian Temp Cash Money Market Fund 2,735,482 2,735,482 ------------------------------------------------------------------ TOTAL SHORT TERM INSTRUMENTS (Cost: $14,672,892) 14,672,892 ------------------------------------------------------------------ TOTAL INVESTMENTS IN SECURITIES - 102.42% (Cost $636,199,267) 600,205,551 ------------------------------------------------------------------ Other Assets, Less Liabilities - (2.42%) (14,154,967) ------------------------------------------------------------------ NET ASSETS -- 100.00% $586,050,584 ================================================================== /(1)/ Non-income earning securities. See notes to financial statements. SCHEDULES OF INVESTMENTS 51 iShares S&P MidCap 400 Index Fund Schedule of Investments March 31, 2002 Security Shares Value -------------------------------------------------------------------- COMMON STOCKS - 99.94% -------------------------------------------------------------------- IDEC Pharmaceuticals Corp./(1)/ 102,555 $ 6,594,287 SunGard Data Systems Inc./(1)/ 187,826 6,192,623 Electronic Arts Inc./(1)/ 92,773 5,640,598 Quest Diagnostics Inc./(1)/ 64,700 5,360,395 M&T Bank Corp. 62,472 5,020,875 Affiliated Computer Services Inc. "A"/(1)/ 88,194 4,950,329 Gilead Sciences Inc./(1)/ 130,040 4,680,140 Millennium Pharmaceuticals Inc./(1)/ 188,211 4,198,987 Apollo Group Inc. "A"/(1)/ 77,386 4,144,020 R.J. Reynolds Tobacco Holdings Inc. 62,718 4,060,991 DST Systems Inc./(1)/ 80,937 4,030,663 Symantec Corp./(1)/ 95,615 3,940,294 North Fork Bancorp Inc. 109,099 3,879,560 Washington Post Company (The) "B" 6,384 3,875,280 SPX Corp./(1)/ 27,096 3,836,252 National Commerce Financial Corp. 136,852 3,804,486 Microchip Technology Inc./(1)/ 89,363 3,738,054 Cadence Design Systems Inc./(1)/ 164,394 3,716,948 Weatherford International Inc./(1)/ 77,144 3,674,369 BJ Services Co./(1)/ 105,153 3,624,624 Valero Energy Corp. 71,408 3,536,124 Telephone & Data Systems Inc. 39,342 3,471,932 American Standard Companies Inc./(1)/ 48,251 3,413,758 Atmel Corp./(1)/ 313,041 3,174,236 SEI Investment Co. 72,609 3,108,391 Radian Group Inc. 63,002 3,092,138 Express Scripts Inc. "A"/(1)/ 53,233 3,065,688 CDW Computer Centers Inc./(1)/ 59,298 2,985,061 First Tennessee National Corp. 85,140 2,984,157 Tyson Foods Inc. "A" 237,920 2,969,242 L-3 Communications Holdings Inc./(1)/ 26,311 2,946,832 American Water Works Co. Inc. 67,204 2,943,535 GreenPoint Financial Corp. 67,305 2,941,228 Murphy Oil Corp. 30,448 2,923,008 BISYS Group Inc. (The)/(1)/ 79,945 2,818,061 Westwood One Inc./(1)/ 72,098 2,764,958 ENSCO International Inc. 90,550 2,729,177 TCF Financial Corp. 51,518 2,710,362 Golden State Bancorp Inc. 91,273 2,709,895 Banknorth Group Inc. 102,028 2,688,438 Compass Bancshares Inc. 85,728 2,646,423 Mohawk Industries Inc./(1)/ 44,025 2,645,462 Security Shares Value -------------------------------------------------------------------- Hillenbrand Industries Inc. 42,103 $ 2,594,808 Old Republic International Corp. 79,957 2,556,225 Hormel Foods Corp. 93,221 2,549,594 Mylan Laboratories Inc. 84,617 2,492,817 Lam Research Corp./(1)/ 84,547 2,478,918 Dollar Tree Stores Inc./(1)/ 75,450 2,475,514 Oxford Health Plans Inc./(1)/ 58,810 2,457,670 D.R. Horton Inc. 65,140 2,455,778 ChoicePoint Inc./(1)/ 42,261 2,434,234 Sovereign Bancorp Inc. 172,219 2,419,677 Everest Re Group Ltd. 34,438 2,387,931 Legg Mason Inc. 44,918 2,384,247 McCormick & Co. Inc. 46,624 2,383,885 E*TRADE Group Inc./(1)/ 250,515 2,359,851 Edwards (A.G.) Inc. 53,583 2,356,580 Aquila Inc. 94,496 2,347,281 Integrated Device Technology Inc./(1)/ 70,116 2,330,656 Network Associates Inc./(1)/ 94,599 2,289,296 Ocean Energy Inc. 115,500 2,285,745 Health Net Inc./(1)/ 83,051 2,278,919 Lennar Corp. 43,187 2,278,546 PMI Group Inc. (The) 29,921 2,266,815 Smith International Inc./(1)/ 33,209 2,249,910 Synopsys Inc./(1)/ 40,657 2,242,640 Neuberger Berman Inc. 47,315 2,216,708 Dean Foods Co./(1)/ 29,234 2,213,598 Cytyc Corp./(1)/ 81,779 2,201,491 Vishay Intertechnology Inc./(1)/ 107,041 2,177,214 DPL Inc. 85,052 2,173,079 BJ's Wholesale Club Inc./(1)/ 48,533 2,169,425 Ceridian Corp./(1)/ 98,380 2,169,279 AmeriCredit Corp./(1)/ 57,033 2,166,684 Avnet Inc. 79,768 2,158,522 SCANA Corp. 70,373 2,153,414 Park Place Entertainment Corp./(1)/ 202,603 2,137,462 IVAX Corp./(1)/ 132,699 2,129,819 Hispanic Broadcasting Corp./(1)/ 72,916 2,123,314 Republic Services Inc. "A"/(1)/ 113,651 2,123,001 Brinker International Inc./(1)/ 65,387 2,119,193 Expeditors International Washington Inc. 34,667 2,114,687 Beckman Coulter Inc. 41,275 2,107,914 Lear Corp./(1)/ 43,161 2,054,464 Abercrombie & Fitch Co. "A"/(1)/ 66,451 2,046,691 Hibernia Corp. "A" 106,974 2,043,203 52 2002 iSHARES ANNUAL REPORT TO SHAREHOLDERS iShares S&P MidCap 400 Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value -------------------------------------------------------------------- COMMON STOCKS (continued) -------------------------------------------------------------------- Mercantile Bankshares Corp. 46,967 $ 2,031,792 Ross Stores Inc. 53,446 2,021,862 RF Micro Devices Inc./(1)/ 112,482 2,013,428 Commerce Bancorp Inc. 44,443 1,995,491 D&B/(1)/ 49,853 1,994,619 Patterson Dental Co./(1)/ 45,506 1,989,977 Manpower Inc. 51,153 1,988,829 Lincare Holdings Inc./(1)/ 72,397 1,963,407 Smithfield Foods Inc./(1)/ 75,009 1,957,735 Diebold Inc. 48,005 1,955,724 Wisconsin Energy Corp. 78,295 1,947,980 DENTSPLY International Inc. 52,384 1,941,351 International Rectifier Corp./(1)/ 42,656 1,937,009 Fastenal Co. 25,543 1,923,899 Fairchild Semiconductor International Corp. "A"/(1)/ 67,043 1,917,430 CH Robinson Worldwide Inc. 56,841 1,909,858 Barr Laboratories Inc./(1)/ 29,001 1,908,846 New York Community Bancorp Inc. 68,810 1,902,597 Arrow Electronics Inc./(1)/ 66,993 1,873,794 Northeast Utilities 94,259 1,872,926 Gallagher (Arthur J.) & Co. 56,987 1,867,464 Cypress Semiconductor Corp./(1)/ 80,868 1,859,964 Eaton Vance Corp. 46,535 1,859,073 Cooper Cameron Corp./(1)/ 36,267 1,853,606 Outback Steakhouse Inc./(1)/ 51,485 1,841,618 Sonoco Products Co. 64,298 1,839,566 Certegy Inc./(1)/ 46,263 1,836,641 Bowater Inc. 36,729 1,829,104 Unitrin Inc. 45,368 1,823,794 Astoria Financial Corp. 62,057 1,802,756 Entercom Communications Corp./(1)/ 32,831 1,801,437 Alliant Energy Corp. 58,819 1,777,510 Trigon Healthcare Inc./(1)/ 24,038 1,774,485 Apogent Technologies Inc./(1)/ 71,431 1,762,917 Williams-Sonoma Inc./(1)/ 38,294 1,761,141 ICN Pharmaceuticals Inc. 54,779 1,739,233 Semtech Corp./(1)/ 47,318 1,727,107 First Virginia Banks Inc. 32,146 1,723,990 Tidewater Inc. 40,689 1,723,179 Investment Technology Group Inc./(1)/ 32,651 1,722,014 Belo Corp. 73,996 1,720,407 Energy East Corp. 78,529 1,708,006 Security Shares Value -------------------------------------------------------------------- Tech Data Corp./(1)/ 37,053 $ 1,700,362 City National Corp. 32,311 1,699,882 Potomac Electric Power Co. 72,197 1,685,800 Associated Banc-Corp 44,171 1,679,823 Viad Corp. 59,709 1,671,852 Triad Hospitals Inc./(1)/ 48,447 1,665,608 Universal Health Services Inc. "B"/(1)/ 40,271 1,661,179 Polycom Inc./(1)/ 67,054 1,649,528 FirstMerit Corp. 57,062 1,642,815 ALLETE Inc. 56,454 1,642,247 Investors Financial Services Corp. 21,593 1,642,148 Waddell & Reed Financial Inc. "A" 53,853 1,641,439 International Speedway Corp. "A" 35,724 1,632,587 Omnicare Inc. 62,839 1,626,902 NSTAR 35,651 1,616,416 First Health Group Corp./(1)/ 66,949 1,615,479 Tootsie Roll Industries Inc. 34,940 1,606,901 Allmerica Financial Corp. 35,550 1,596,195 Harris Corp. 44,422 1,595,194 Micrel Inc./(1)/ 62,478 1,575,695 Valspar Corp. (The) 33,306 1,567,380 Pioneer Natural Resources Co./(1)/ 69,863 1,557,246 Clayton Homes Inc. 92,498 1,549,341 Cabot Corp. 41,844 1,541,951 Patterson-UTI Energy Inc./(1)/ 51,372 1,527,803 Fidelity National Financial Inc. 57,624 1,519,545 Storage Technology Corp./(1)/ 70,618 1,514,050 PepsiAmericas Inc. 104,836 1,511,735 Coach Inc./(1)/ 29,673 1,504,718 Readers Digest Association Inc. (The) "A" 66,917 1,499,610 Equitable Resources Inc. 43,007 1,497,074 Gentex Corp./(1)/ 50,486 1,495,900 Noble Affiliates Inc. 38,061 1,486,663 Conectiv 59,602 1,483,494 Pentair Inc. 32,979 1,483,066 Wilmington Trust Corp. 21,917 1,475,233 Mandalay Resort Group/(1)/ 47,584 1,460,829 Energizer Holdings Inc./(1)/ 61,397 1,458,179 MDU Resources Group Inc. 46,918 1,454,458 Hospitality Properties Trust 42,023 1,442,650 3Com Corp./(1)/ 236,044 1,442,229 National Instruments Corp./(1)/ 34,441 1,440,323 Protective Life Corp. 46,079 1,436,743 Teleflex Inc. 26,081 1,425,848 SCHEDULES OF INVESTMENTS 53 iShares S&P MidCap 400 Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value -------------------------------------------------------------------- COMMON STOCKS (continued) -------------------------------------------------------------------- Pride International Inc./(1)/ 89,320 $ 1,420,188 DeVry Inc./(1)/ 46,960 1,414,905 Reynolds & Reynolds Co. (The) "A" 47,073 1,412,190 Questar Corp. 54,774 1,408,240 Vertex Pharmaceuticals Inc./(1)/ 50,408 1,404,367 Packaging Corp. of America/(1)/ 70,946 1,404,021 Barnes & Noble Inc./(1)/ 45,214 1,401,182 Valassis Communications Inc./(1)/ 35,999 1,390,641 National-Oilwell Inc./(1)/ 54,434 1,378,813 Martin Marietta Materials Inc. 32,621 1,377,259 United Rentals Inc./(1)/ 49,291 1,354,517 Catalina Marketing Corp./(1)/ 37,064 1,352,836 Pacific Century Financial Corp. 51,676 1,346,677 Advent Software Inc./(1)/ 22,702 1,343,050 Helmerich & Payne Inc. 33,473 1,341,933 Harte-Hanks Inc. 42,371 1,340,618 99 Cents Only Stores/(1)/ 34,860 1,336,532 Furniture Brands International Inc./(1)/ 36,667 1,336,512 Henry (Jack) & Associates Inc. 59,944 1,329,558 Leucadia National Corp. 37,183 1,329,292 American Financial Group Inc. 45,949 1,319,655 Lyondell Chemical Co. 79,038 1,312,821 Borders Group Inc./(1)/ 54,780 1,309,790 National Fuel Gas Co. 53,442 1,301,313 Varco International Inc./(1)/ 64,581 1,298,078 Hubbell Inc. "B" 39,427 1,297,148 Scholastic Corp./(1)/ 23,899 1,295,087 Lattice Semiconductor Corp./(1)/ 73,515 1,288,718 MONY Group Inc. (The) 31,959 1,288,587 Jacobs Engineering Group Inc./(1)/ 18,050 1,286,785 ArvinMeritor Inc. 44,826 1,279,782 Henry Schein Inc./(1)/ 28,667 1,262,781 New Plan Excel Realty Trust 62,784 1,258,819 Swift Transportation Co. Inc./(1)/ 57,332 1,256,717 OGE Energy Corp. 52,425 1,256,627 Saks Inc./(1)/ 95,434 1,254,957 Webster Financial Corp. 33,086 1,238,409 Precision Castparts Corp. 34,811 1,232,658 LaBranche & Co. Inc./(1)/ 39,448 1,224,860 Roslyn Bancorp Inc. 59,164 1,224,695 Puget Energy Inc. 58,347 1,213,034 Herman Miller Inc. 50,884 1,210,022 American Eagle Outfitters Inc./(1)/ 48,335 1,197,258 Security Shares Value -------------------------------------------------------------------- Lubrizol Corp. 34,339 $ 1,194,654 Donaldson Co. Inc. 29,620 1,191,020 RPM Inc. 75,596 1,175,518 Vectren Corp. 45,528 1,169,614 Dole Food Co. 37,518 1,163,058 Sybase Inc./(1)/ 66,473 1,161,283 Colonial BancGroup Inc. (The) 77,518 1,156,569 Dial Corp. (The) 63,830 1,150,217 Pennzoil-Quaker State Co. 53,464 1,147,872 Greater Bay Bancorp 33,615 1,146,944 HCC Insurance Holdings Inc. 40,788 1,140,025 IMC Global Inc. 77,241 1,139,305 HON Industries Inc. 39,411 1,119,667 KEMET Corp./(1)/ 57,728 1,118,191 BorgWarner Inc. 17,740 1,116,201 Edwards Lifesciences Corp./(1)/ 39,787 1,112,047 Independence Community Bank Corp. 39,527 1,111,895 Six Flags Inc./(1)/ 62,156 1,110,106 StanCorp Financial Group Inc. 20,145 1,107,975 AGCO Corp./(1)/ 48,414 1,104,807 Neiman-Marcus Group Inc. "A"/(1)/ 32,063 1,104,570 Timberland Co. "A"/(1)/ 26,139 1,104,373 Cabot Microelectronics Corp./(1)/ 16,225 1,097,621 Lee Enterprises Inc. 29,692 1,095,635 Extended Stay America Inc./(1)/ 62,681 1,090,649 Copart Inc./(1)/ 60,743 1,089,729 Activision Inc./(1)/ 36,383 1,085,305 CNF Inc. 32,841 1,083,425 CBRL Group Inc. 37,321 1,062,529 Advanced Fibre Communications Inc./(1)/ 55,115 1,057,657 Titan Corp. (The)/(1)/ 51,021 1,053,584 Harsco Corp. 26,912 1,053,336 TriQuint Semiconductor Inc./(1)/ 87,606 1,052,148 Cirrus Logic Inc./(1)/ 55,390 1,045,209 GATX Corp. 32,726 1,040,687 Great Plains Energy Inc. 41,589 1,037,646 Sierra Pacific Resources 68,680 1,036,381 AK Steel Holding Corp. 72,406 1,035,406 Broadwing Inc./(1)/ 147,181 1,028,795 IDACORP Inc. 25,227 1,021,693 Sepracor Inc./(1)/ 52,419 1,016,929 CSG Systems International Inc./(1)/ 35,656 1,015,126 Protein Design Labs Inc./(1)/ 59,174 1,013,651 Callaway Golf Co. 52,397 1,008,642 54 2002 iSHARES ANNUAL REPORT TO SHAREHOLDERS iShares S&P MidCap 400 Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value -------------------------------------------------------------------- COMMON STOCKS (continued) -------------------------------------------------------------------- Grant Prideco Inc./(1)/ 73,529 $ 1,005,877 Acxiom Corp./(1)/ 58,592 1,004,267 Hawaiian Electric Industries Inc. 22,745 1,001,007 IndyMac Bancorp Inc./(1)/ 40,500 1,000,350 SanDisk Corp./(1)/ 45,940 996,898 Westamerica Bancorp 23,278 995,135 Education Management Corp./(1)/ 23,318 983,320 Media General Inc. "A" 15,482 983,107 LifePoint Hospitals Inc./(1)/ 26,447 977,481 Rayonier Inc. 18,296 974,811 Steris Corp./(1)/ 46,647 973,056 Flowserve Corp./(1)/ 29,804 954,026 Dreyer's Grand Ice Cream Inc. 23,147 953,425 Provident Financial Group Inc. 33,075 952,560 York International Corp. 26,192 940,293 Airgas Inc./(1)/ 46,742 939,514 Silicon Valley Bancshares/(1)/ 31,049 939,232 Crompton Corp. 76,047 939,180 GTECH Holdings Corp./(1)/ 19,246 938,242 Forest Oil Corp./(1)/ 31,402 930,127 Emmis Communications Corp./(1)/ 34,617 925,659 Lancaster Colony Corp. 24,755 916,925 Mentor Graphics Corp./(1)/ 43,363 916,694 Pittston Brink's Group 36,480 915,648 Payless ShoeSource Inc./(1)/ 14,908 910,133 Macrovision Corp./(1)/ 34,039 907,139 Lands' End Inc./(1)/ 20,037 899,060 Retek Inc./(1)/ 34,219 898,249 McDATA Corp. "A"/(1)/ 75,637 897,811 Apria Healthcare Group Inc./(1)/ 36,626 897,703 Carlisle Companies Inc. 20,377 890,882 Credence Systems Corp./(1)/ 40,516 889,731 LTX Corp./(1)/ 32,633 887,291 FMC Corp./(1)/ 21,031 881,620 WGL Holdings Inc. 32,632 876,496 AGL Resources Inc. 37,240 875,140 FMC Technologies Inc./(1)/ 43,710 871,140 Keane Inc./(1)/ 50,784 865,867 Metris Companies Inc. 42,880 857,600 Superior Industries International Inc. 17,429 850,187 Albemarle Corp. 30,558 842,178 Kennametal Inc. 20,807 841,227 Blyth Inc. 31,629 838,801 Security Shares Value -------------------------------------------------------------------- ONEOK Inc. 40,127 $ 836,648 Quantum Corp./(1)/ 104,650 833,014 Interstate Bakeries Corp. 34,076 824,980 AMETEK Inc. 22,013 819,104 Covance Inc./(1)/ 40,325 817,791 Western Gas Resources Inc. 21,922 815,937 WPS Resources Corp. 20,685 815,816 Cytec Industries Inc./(1)/ 26,748 813,674 Western Resources Inc. 47,117 808,057 PNM Resources Inc. 26,348 807,830 Macromedia Inc./(1)/ 39,386 804,262 Avocent Corp./(1)/ 29,959 802,602 DQE Inc. 37,585 800,936 CheckFree Corp./(1)/ 52,048 797,896 Church & Dwight Co. Inc. 26,337 775,888 Ohio Casualty Corp./(1)/ 40,474 766,578 Hanover Compressor Co./(1)/ 42,465 763,945 FEI Co./(1)/ 21,459 762,867 Alexander & Baldwin Inc. 27,269 752,897 Arch Coal Inc. 35,166 751,849 Gartner Inc. "B"/(1)/ 56,921 739,973 Sylvan Learning Systems Inc./(1)/ 26,091 737,071 Internet Security Systems Inc./(1)/ 32,180 735,313 Sensient Technologies Corp. 31,815 732,381 Cleco Corp. 30,225 722,377 Trinity Industries Inc. 29,561 718,628 Federal Signal Corp. 30,245 717,411 Wind River Systems Inc./(1)/ 52,366 711,654 Longs Drug Stores Corp. 25,533 711,605 Quanta Services Inc./(1)/ 40,832 705,985 Universal Corp. 17,740 698,246 Minerals Technologies Inc. 13,188 691,974 Hunt (J.B.) Transport Services Inc./(1)/ 24,166 687,039 Granite Construction Inc. 27,693 681,525 Kelly Services Inc. "A" 24,085 679,920 Ascential Software Corp./(1)/ 174,477 671,736 Nordson Corp. 22,271 671,471 Cree Inc./(1)/ 48,749 664,449 Ferro Corp. 23,018 662,918 Tecumseh Products Co. "A" 12,436 662,839 Plexus Corp./(1)/ 28,075 662,570 Sotheby's Holdings Inc. "A"/(1)/ 41,220 661,581 Bob Evans Farms Inc. 23,382 659,840 Plantronics Inc./(1)/ 31,216 653,039 VISX Inc./(1)/ 36,928 652,148 SCHEDULES OF INVESTMENTS 55 iShares S&P MidCap 400 Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value -------------------------------------------------------------------- COMMON STOCKS (continued) -------------------------------------------------------------------- Price Communications Corp./(1)/ 36,904 $ 650,987 ADTRAN Inc./(1)/ 26,580 641,641 Claire's Stores Inc. 32,856 640,035 Potlatch Corp. 18,981 639,470 Albany International Corp. "A" 21,034 637,330 Imation Corp./(1)/ 23,472 622,712 Horace Mann Educators Corp. 27,440 617,674 Solutia Inc. 70,234 611,036 Modine Manufacturing Co. 22,374 603,874 CommScope Inc./(1)/ 34,575 601,605 Black Hills Corp. 17,844 597,417 Alaska Air Group Inc./(1)/ 17,853 594,326 Banta Corp. 16,612 593,215 Perrigo Co./(1)/ 49,383 590,127 Newport Corp. 24,673 589,685 MPS Group Inc./(1)/ 66,077 578,174 Fuller (H.B.) Co. 18,983 568,541 Airborne Inc. 32,399 566,659 Powerwave Technologies Inc./(1)/ 43,476 559,536 Overseas Shipholding Group Inc. 23,010 559,143 Enterasys Networks Inc./(1)/ 131,841 557,687 Wallace Computer Services Inc. 27,605 557,621 Smucker (J.M.) Co. (The) 16,473 556,787 Olin Corp. 29,273 550,332 Kaydon Corp. 20,148 543,996 Legato Systems Inc./(1)/ 60,199 542,393 UCAR International Inc./(1)/ 37,497 532,457 Incyte Genomics Inc./(1)/ 44,667 531,537 Bandag Inc. 13,902 523,827 Ruddick Corp. 31,226 519,601 Glatfelter Co. 28,691 514,717 EGL Inc./(1)/ 32,178 510,021 NCO Group Inc./(1)/ 17,381 482,497 Dycom Industries Inc./(1)/ 32,174 481,001 InFocus Corp./(1)/ 26,284 478,632 Wausau-Mosinee Paper Corp. 34,697 442,734 Carpenter Technology Corp. 14,940 432,364 Rollins Inc. 20,247 427,212 Papa John's International Inc./(1)/ 15,311 426,871 PacifiCare Health Systems Inc. "A"/(1)/ 23,280 406,236 Stewart & Stevenson Services Inc. 19,189 371,307 DSP Group Inc./(1)/ 18,077 370,036 Security Shares Value -------------------------------------------------------------------- Sequa Corp. "A"/(1)/ 7,003 $ 365,557 Schulman (A.) Inc. 19,672 359,801 Longview Fibre Co. 34,419 354,516 Unifi Inc./(1)/ 36,272 340,957 RSA Security Inc./(1)/ 37,789 340,101 Atlas Air Worldwide Holdings Inc./(1)/ 25,753 339,167 Transaction Systems Architects Inc. "A"/(1)/ 23,741 270,647 Sykes Enterprises Inc./(1)/ 27,085 262,454 Korn/Ferry International/(1)/ 25,463 253,357 TranSwitch Corp./(1)/ 61,546 200,640 MIPS Technologies Inc. "B"/(1)/ 26,308 176,264 -------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $570,120,346) 605,203,759 -------------------------------------------------------------------- SHORT TERM INSTRUMENTS - 8.74% -------------------------------------------------------------------- Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 30,539,117 30,539,117 Security Shares Value -------------------------------------------------------------------- Dreyfus Money Market Fund 11,279,805 11,279,805 Goldman Sachs Financial Square Prime Obligation Fund 1,221,322 1,221,322 Providian Temp Cash Money Market Fund 9,910,997 9,910,997 -------------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $52,951,241) 52,951,241 -------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 108.68% (Cost $623,071,587) 658,155,000 -------------------------------------------------------------------- Other Assets, Less Liabilities -- (8.68%) (52,584,426) -------------------------------------------------------------------- NET ASSETS -- 100.00% $605,570,574 ==================================================================== /(1)/ Non-income earning securities. See notes to financial statements. 56 2002 iSHARES ANNUAL REPORT TO SHAREHOLDERS iShares S&P MidCap 400/BARRA Growth Index Fund Schedule of Investments March 31, 2002 Security Shares Value ------------------------------------------------------------------- COMMON STOCKS - 100.00% ------------------------------------------------------------------- IDEC Pharmaceuticals Corp./(1)/ 88,880 $ 5,714,984 SunGard Data Systems Inc./(1)/ 162,829 5,368,472 Electronic Arts Inc./(1)/ 80,390 4,887,712 Quest Diagnostics Inc./(1)/ 56,126 4,650,039 Affiliated Computer Services Inc. "A"/(1)/ 76,506 4,294,282 Gilead Sciences Inc./(1)/ 112,620 4,053,194 Millennium Pharmaceuticals Inc./(1)/ 163,117 3,639,147 Apollo Group Inc. "A"/(1)/ 67,027 3,589,296 DST Systems Inc./(1)/ 70,126 3,492,275 Symantec Corp./(1)/ 82,848 3,414,166 North Fork Bancorp Inc. 94,607 3,364,225 Washington Post Company (The) "B" 5,531 3,357,483 SPX Corp./(1)/ 23,477 3,323,874 Microchip Technology Inc./(1)/ 77,506 3,242,076 Cadence Design Systems Inc./(1)/ 142,430 3,220,342 BJ Services Co./(1)/ 91,119 3,140,872 American Standard Companies Inc./(1)/ 41,823 2,958,977 SEI Investment Co. 62,982 2,696,259 Express Scripts Inc. "A"/(1)/ 46,111 2,655,532 CDW Computer Centers Inc./(1)/ 51,427 2,588,835 First Tennessee National Corp. 73,810 2,587,040 L-3 Communications Holdings Inc./(1)/ 22,849 2,559,088 BISYS Group Inc. (The)/(1)/ 69,310 2,443,177 Westwood One Inc./(1)/ 62,514 2,397,412 TCF Financial Corp. 44,643 2,348,668 Mohawk Industries Inc./(1)/ 38,149 2,292,373 Hillenbrand Industries Inc. 36,544 2,252,207 Hormel Foods Corp. 80,836 2,210,865 Mylan Laboratories Inc. 73,362 2,161,245 Lam Research Corp./(1)/ 73,289 2,148,833 Dollar Tree Stores Inc./(1)/ 65,421 2,146,463 Oxford Health Plans Inc./(1)/ 50,975 2,130,245 ChoicePoint Inc./(1)/ 36,641 2,110,522 McCormick & Co. Inc. 40,358 2,063,505 Legg Mason Inc. 38,869 2,063,167 Integrated Device Technology Inc./(1)/ 60,839 2,022,288 Network Associates Inc./(1)/ 81,945 1,983,069 Synopsys Inc./(1)/ 35,270 1,945,493 Neuberger Berman Inc. 40,990 1,920,382 Cytyc Corp./(1)/ 70,885 1,908,224 DPL Inc. 73,703 1,883,112 BJ's Wholesale Club Inc./(1)/ 42,072 1,880,618 Security Shares Value ------------------------------------------------------------------- IVAX Corp./(1)/ 115,014 $ 1,845,975 Brinker International Inc./(1)/ 56,650 1,836,026 Expeditors International Washington Inc. 30,067 1,834,087 Beckman Coulter Inc. 35,767 1,826,621 Abercrombie & Fitch Co. "A"/(1)/ 57,610 1,774,388 Ross Stores Inc. 46,324 1,752,437 RF Micro Devices Inc./(1)/ 97,463 1,744,588 Commerce Bancorp Inc. 38,558 1,731,254 D&B/(1)/ 43,165 1,727,032 Patterson Dental Co./(1)/ 39,402 1,723,049 Manpower Inc. 44,314 1,722,928 Lincare Holdings Inc./(1)/ 62,742 1,701,563 Smithfield Foods Inc./(1)/ 65,000 1,696,500 Diebold Inc. 41,550 1,692,747 DENTSPLY International Inc. 45,352 1,680,745 Fastenal Co. 22,110 1,665,325 Fairchild Semiconductor International Corp. "A"/(1)/ 58,150 1,663,090 CH Robinson Worldwide Inc. 49,269 1,655,438 Barr Laboratories Inc./(1)/ 25,123 1,653,596 Gallagher (Arthur J.) & Co. 49,384 1,618,314 Cypress Semiconductor Corp./(1)/ 70,100 1,612,300 Eaton Vance Corp. 40,312 1,610,464 Outback Steakhouse Inc./(1)/ 44,550 1,593,554 Sonoco Products Co. 55,650 1,592,147 Certegy Inc./(1)/ 40,049 1,589,945 Entercom Communications Corp./(1)/ 28,450 1,561,051 Apogent Technologies Inc./(1)/ 62,031 1,530,925 Williams-Sonoma Inc./(1)/ 33,159 1,524,982 ICN Pharmaceuticals Inc. 47,459 1,506,823 Semtech Corp./(1)/ 41,076 1,499,274 Investment Technology Group Inc./(1)/ 28,331 1,494,177 Universal Health Services Inc. "B"/(1)/ 34,906 1,439,873 Polycom Inc./(1)/ 58,159 1,430,711 Waddell & Reed Financial Inc. "A" 46,664 1,422,319 Investors Financial Services Corp. 18,694 1,421,679 First Health Group Corp./(1)/ 58,056 1,400,891 Tootsie Roll Industries Inc. 30,347 1,395,671 Micrel Inc./(1)/ 54,124 1,365,007 Valspar Corp. (The) 28,850 1,357,681 Coach Inc./(1)/ 25,721 1,304,312 Readers Digest Association Inc. (The) "A" 58,025 1,300,340 Equitable Resources Inc. 37,255 1,296,847 SCHEDULES OF INVESTMENTS 57 iShares S&P MidCap 400/BARRA Growth Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value ------------------------------------------------------------------- Gentex Corp./(1)/ 43,723 $ 1,295,512 Wilmington Trust Corp. 19,035 1,281,246 National Instruments Corp./(1)/ 29,819 1,247,031 DeVry Inc./(1)/ 40,661 1,225,116 Reynolds & Reynolds Co. (The) "A" 40,809 1,224,270 Vertex Pharmaceuticals Inc./(1)/ 43,672 1,216,702 Valassis Communications Inc./(1)/ 31,163 1,203,827 Catalina Marketing Corp./(1)/ 32,066 1,170,409 Advent Software Inc./(1)/ 19,709 1,165,984 Harte-Hanks Inc. 36,705 1,161,346 99 Cents Only Stores/(1)/ 30,245 1,159,593 Henry (Jack) & Associates Inc. 52,092 1,155,401 Scholastic Corp./(1)/ 20,755 1,124,713 Jacobs Engineering Group Inc./(1)/ 15,687 1,118,326 Lattice Semiconductor Corp./(1)/ 63,700 1,116,661 Henry Schein Inc./(1)/ 24,900 1,096,845 Roslyn Bancorp Inc. 51,250 1,060,875 Herman Miller Inc. 44,074 1,048,080 American Eagle Outfitters Inc./(1)/ 41,865 1,036,996 Donaldson Co. Inc. 25,712 1,033,880 Dial Corp. (The) 55,244 995,497 Greater Bay Bancorp 29,100 992,892 HON Industries Inc. 34,150 970,201 Edwards Lifesciences Corp./(1)/ 34,450 962,877 Timberland Co. "A"/(1)/ 22,640 956,540 Cabot Microelectronics Corp./(1)/ 14,107 954,339 Copart Inc./(1)/ 52,767 946,640 Activision Inc./(1)/ 31,640 943,821 Titan Corp. (The)/(1)/ 44,205 912,833 TriQuint Semiconductor Inc./(1)/ 75,900 911,559 Cirrus Logic Inc./(1)/ 47,990 905,571 Sepracor Inc./(1)/ 45,400 880,760 CSG Systems International Inc./(1)/ 30,869 878,840 Protein Design Labs Inc./(1)/ 51,266 878,187 Westamerica Bancorp 20,093 858,976 Education Management Corp./(1)/ 20,277 855,081 LifePoint Hospitals Inc./(1)/ 22,878 845,571 Steris Corp./(1)/ 40,400 842,744 Flowserve Corp./(1)/ 25,852 827,523 Security Shares Value ------------------------------------------------------------------- Dreyer's Grand Ice Cream Inc. 20,027 $ 824,912 GTECH Holdings Corp./(1)/ 16,647 811,541 Mentor Graphics Corp./(1)/ 37,575 794,336 Lancaster Colony Corp. 21,400 792,656 Macrovision Corp./(1)/ 29,532 787,028 Retek Inc./(1)/ 29,709 779,861 McDATA Corp. "A"/(1)/ 65,517 777,687 Apria Healthcare Group Inc./(1)/ 31,722 777,506 Lands' End Inc./(1)/ 17,291 775,847 LTX Corp./(1)/ 28,250 768,118 FMC Technologies Inc./(1)/ 37,850 754,350 Keane Inc./(1)/ 43,988 749,995 Interstate Bakeries Corp. 29,500 714,195 Covance Inc./(1)/ 35,113 712,092 AMETEK Inc. 19,100 710,711 Macromedia Inc./(1)/ 34,300 700,406 Church & Dwight Co. Inc. 22,736 669,803 FEI Co./(1)/ 18,645 662,830 Gartner Inc. "B"/(1)/ 49,310 641,030 Internet Security Systems Inc./(1)/ 27,848 636,327 Federal Signal Corp. 26,250 622,650 Wind River Systems Inc./(1)/ 45,450 617,666 Nordson Corp. 19,330 582,800 Cree Inc./(1)/ 42,300 576,549 Plexus Corp./(1)/ 24,350 574,660 Ferro Corp. 19,950 574,560 Sotheby's Holdings Inc. "A"/(1)/ 35,729 573,450 Plantronics Inc./(1)/ 27,035 565,572 VISX Inc./(1)/ 31,961 564,431 Price Communications Corp./(1)/ 31,940 563,422 Solutia Inc. 60,993 530,639 Powerwave Technologies Inc./(1)/ 37,950 488,417 Smucker (J.M.) Co. (The) 14,250 481,650 Legato Systems Inc./(1)/ 52,132 469,709 UCAR International Inc./(1)/ 32,506 461,585 Rollins Inc. 17,539 370,073 Papa John's International Inc./(1)/ 13,219 368,546 MIPS Technologies Inc. "B"/(1)/ 22,758 152,479 ------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $237,554,495) 252,350,068 ------------------------------------------------------------------- 58 2002 iSHARES ANNUAL REPORT TO SHAREHOLDERS iShares S&P MidCap 400/BARRA Growth Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value ------------------------------------------------------------------- SHORT TERM INSTRUMENTS -- 7.86% ------------------------------------------------------------------- Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 11,448,808 $ 11,448,808 Dreyfus Money Market Fund 4,369,728 4,369,728 Goldman Sachs Financial Square Prime Obligation Fund 313,015 313,015 Providian Temp Cash Money Market Fund 3,712,517 3,712,517 ------------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $19,844,068) 19,844,068 ------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 107.86% (Cost $257,398,563) 272,194,136 ------------------------------------------------------------------- Other Assets, Less Liabilities -- (7.86%) (19,834,950) ------------------------------------------------------------------- NET ASSETS -- 100.00% $252,359,186 =================================================================== /(1)/ Non-income earning securities. See notes to financial statements. SCHEDULES OF INVESTMENTS 59 iShares S&P MidCap 400/BARRA Value Index Fund Schedule of Investments March 31, 2002 Security Shares Value -------------------------------------------------------------------- COMMON STOCKS - 99.91% ------------------------------------------------------------------- M&T Bank Corp. 90,330 $ 7,259,822 R.J. Reynolds Tobacco Holdings Inc. 90,621 5,867,710 National Commerce Financial Corp. 197,889 5,501,314 Weatherford International Inc./(1)/ 111,653 5,318,032 Valero Energy Corp. 103,318 5,116,307 Telephone & Data Systems Inc. 56,959 5,026,632 Atmel Corp./(1)/ 452,795 4,591,341 Radian Group Inc. 91,151 4,473,691 Tyson Foods Inc. "A" 343,874 4,291,548 American Water Works Co. Inc. 97,207 4,257,667 GreenPoint Financial Corp. 97,362 4,254,719 Murphy Oil Corp. 44,085 4,232,160 ENSCO International Inc. 130,976 3,947,617 Golden State Bancorp Inc. 131,982 3,918,546 Banknorth Group Inc. 147,606 3,889,418 Compass Bancshares Inc. 123,975 3,827,108 Old Republic International Corp. 115,627 3,696,595 D.R. Horton Inc. 94,299 3,555,072 Sovereign Bancorp Inc. 249,029 3,498,857 Everest Re Group Ltd. 49,855 3,456,946 E*TRADE Group Inc./(1)/ 362,468 3,414,449 Edwards (A.G.) Inc. 77,508 3,408,802 Aquila Inc. 136,609 3,393,368 Ocean Energy Inc. 167,090 3,306,711 Health Net Inc./(1)/ 120,149 3,296,889 Lennar Corp. 62,401 3,292,277 PMI Group Inc. (The) 43,337 3,283,211 Smith International Inc./(1)/ 47,987 3,251,119 Dean Foods Co./(1)/ 42,307 3,203,486 Vishay Intertechnology Inc./(1)/ 154,853 3,149,710 Ceridian Corp./(1)/ 142,262 3,136,877 AmeriCredit Corp./(1)/ 82,456 3,132,503 Avnet Inc. 115,229 3,118,097 SCANA Corp. 101,831 3,116,029 Park Place Entertainment Corp./(1)/ 293,038 3,091,551 Hispanic Broadcasting Corp./(1)/ 105,520 3,072,742 Republic Services Inc. "A"/(1)/ 164,456 3,072,038 Lear Corp./(1)/ 62,466 2,973,382 Hibernia Corp. "A" 154,639 2,953,605 Mercantile Bankshares Corp. 67,921 2,938,262 Wisconsin Energy Corp. 113,245 2,817,536 International Rectifier Corp./(1)/ 61,570 2,795,894 New York Community Bancorp Inc. 99,442 2,749,571 Security Shares Value -------------------------------------------------------------------- Arrow Electronics Inc./(1)/ 96,924 $ 2,710,964 Northeast Utilities 136,261 2,707,506 Cooper Cameron Corp./(1)/ 52,423 2,679,340 Bowater Inc. 53,087 2,643,733 Unitrin Inc. 65,592 2,636,798 Astoria Financial Corp. 89,769 2,607,789 Alliant Energy Corp. 85,179 2,574,109 Trigon Healthcare Inc./(1)/ 34,840 2,571,889 First Virginia Banks Inc. 46,535 2,495,672 Tidewater Inc. 58,894 2,494,161 Belo Corp. 107,083 2,489,680 Energy East Corp. 113,671 2,472,344 City National Corp. 46,836 2,464,042 Tech Data Corp./(1)/ 53,647 2,461,861 Potomac Electric Power Co. 104,505 2,440,192 Associated Banc-Corp 63,907 2,430,383 Viad Corp. 86,376 2,418,528 Triad Hospitals Inc./(1)/ 70,112 2,410,451 FirstMerit Corp. 82,523 2,375,837 ALLETE Inc. 81,633 2,374,704 International Speedway Corp. "A" 51,660 2,360,862 Omnicare Inc. 90,895 2,353,272 NSTAR 51,617 2,340,315 Harris Corp. 64,276 2,308,151 Allmerica Financial Corp. 51,386 2,307,231 Pioneer Natural Resources Co./(1)/ 101,034 2,252,048 Clayton Homes Inc. 133,557 2,237,080 Cabot Corp. 60,500 2,229,425 Patterson-UTI Energy Inc./(1)/ 74,271 2,208,820 Fidelity National Financial Inc. 83,338 2,197,623 Storage Technology Corp./(1)/ 102,158 2,190,268 PepsiAmericas Inc. 151,652 2,186,822 Noble Affiliates Inc. 54,998 2,148,222 Conectiv 86,296 2,147,907 Pentair Inc. 47,748 2,147,228 Mandalay Resort Group/(1)/ 68,878 2,114,555 Energizer Holdings Inc./(1)/ 88,835 2,109,831 MDU Resources Group Inc. 67,877 2,104,187 Hospitality Properties Trust 60,821 2,087,985 3Com Corp./(1)/ 341,678 2,087,653 Protective Life Corp. 66,707 2,079,924 Teleflex Inc. 37,797 2,066,362 Pride International Inc./(1)/ 129,194 2,054,185 Questar Corp. 79,229 2,036,978 Packaging Corp. of America/(1)/ 102,652 2,031,483 60 2002 iSHARES ANNUAL REPORT TO SHAREHOLDERS iShares S&P MidCap 400/BARRA Value Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value ------------------------------------------------------------------- COMMON STOCKS (continued) ------------------------------------------------------------------- Barnes & Noble Inc./(1)/ 65,249 $ 2,022,067 Martin Marietta Materials Inc. 47,228 1,993,966 National-Oilwell Inc./(1)/ 78,686 1,993,116 United Rentals Inc./(1)/ 71,251 1,957,977 Pacific Century Financial Corp. 74,734 1,947,568 Helmerich & Payne Inc. 48,518 1,945,087 Furniture Brands International Inc./(1)/ 53,093 1,935,240 Leucadia National Corp. 53,838 1,924,708 American Financial Group Inc. 66,463 1,908,817 Lyondell Chemical Co. 114,383 1,899,902 Borders Group Inc./(1)/ 79,100 1,891,281 National Fuel Gas Co. 77,269 1,881,500 Varco International Inc./(1)/ 93,384 1,877,018 Hubbell Inc. "B" 57,026 1,876,155 MONY Group Inc. (The) 46,336 1,868,268 ArvinMeritor Inc. 64,700 1,847,185 New Plan Excel Realty Trust 90,842 1,821,382 OGE Energy Corp. 75,838 1,817,837 Swift Transportation Co. Inc./(1)/ 82,894 1,817,036 Saks Inc./(1)/ 138,105 1,816,081 Webster Financial Corp. 47,943 1,794,506 Precision Castparts Corp. 50,356 1,783,106 LaBranche & Co. Inc./(1)/ 57,114 1,773,390 Puget Energy Inc. 84,352 1,753,678 Lubrizol Corp. 49,751 1,730,837 RPM Inc. 109,312 1,699,802 Vectren Corp. 65,873 1,692,277 Dole Food Co. 54,374 1,685,594 Sybase Inc./(1)/ 96,115 1,679,129 Colonial BancGroup Inc. (The) 112,081 1,672,249 Pennzoil-Quaker State Co. 77,346 1,660,619 HCC Insurance Holdings Inc. 59,046 1,650,336 IMC Global Inc. 111,794 1,648,961 KEMET Corp./(1)/ 83,337 1,614,238 BorgWarner Inc. 25,651 1,613,961 Independence Community Bank Corp. 57,212 1,609,374 Six Flags Inc./(1)/ 89,915 1,605,882 StanCorp Financial Group Inc. 29,131 1,602,205 Neiman-Marcus Group Inc. "A"/(1)/ 46,431 1,599,548 AGCO Corp./(1)/ 70,063 1,598,838 Lee Enterprises Inc. 42,863 1,581,645 Extended Stay America Inc./(1)/ 90,717 1,578,476 CNF Inc. 47,543 1,568,444 CBRL Group Inc. 54,045 1,538,661 Advanced Fibre Communications Inc./(1)/ 79,723 1,529,884 Harsco Corp. 38,877 1,521,646 GATX Corp. 47,371 1,506,398 Great Plains Energy Inc. 60,188 1,501,691 Sierra Pacific Resources 99,357 1,499,297 AK Steel Holding Corp. 104,798 1,498,611 Broadwing Inc./(1)/ 212,800 1,487,472 IDACORP Inc. 36,487 1,477,723 Callaway Golf Co. 75,747 1,458,130 Grant Prideco Inc./(1)/ 106,454 1,456,291 Hawaiian Electric Industries Inc. 33,002 1,452,418 Acxiom Corp./(1)/ 84,566 1,449,461 IndyMac Bancorp Inc./(1)/ 58,594 1,447,272 SanDisk Corp./(1)/ 66,443 1,441,813 Media General Inc. "A" 22,336 1,418,336 Rayonier Inc. 26,549 1,414,531 Provident Financial Group Inc. 47,879 1,378,915 Silicon Valley Bancshares/(1)/ 44,969 1,360,312 Airgas Inc./(1)/ 67,674 1,360,247 Crompton Corp. 109,949 1,357,870 York International Corp. 37,818 1,357,666 Forest Oil Corp./(1)/ 45,487 1,347,325 Emmis Communications Corp./(1)/ 50,066 1,338,765 Pittston Brink's Group 52,820 1,325,782 Payless ShoeSource Inc./(1)/ 21,653 1,321,916 Carlisle Companies Inc. 29,463 1,288,122 Credence Systems Corp./(1)/ 58,479 1,284,199 FMC Corp.(/1)/ 30,392 1,274,033 WGL Holdings Inc. 47,254 1,269,242 AGL Resources Inc. 53,850 1,265,475 Metris Companies Inc. 62,031 1,240,620 Superior Industries International Inc. 25,218 1,230,134 Albemarle Corp. 44,248 1,219,475 Kennametal Inc. 30,127 1,218,035 Blyth Inc. 45,806 1,214,775 ONEOK Inc. 58,084 1,211,051 Quantum Corp./(1)/ 151,244 1,203,902 Western Gas Resources Inc. 31,806 1,183,819 WPS Resources Corp. 29,882 1,178,546 Cytec Industries Inc./(1)/ 38,617 1,174,729 Western Resources Inc. 68,204 1,169,699 PNM Resources Inc. 38,052 1,166,674 Schedules of Investments 61 iShares S&P MidCap 400/BARRA Value Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value ------------------------------------------------------------------- COMMON STOCKS (continued) ------------------------------------------------------------------- Avocent Corp./(1)/ 43,409 $ 1,162,927 DQE Inc. 54,357 1,158,348 CheckFree Corp./(1)/ 75,161 1,152,218 Ohio Casualty Corp./(1)/ 58,444 1,106,929 Hanover Compressor Co./(1)/ 61,450 1,105,485 Arch Coal Inc. 50,952 1,089,354 Alexander & Baldwin Inc. 39,376 1,087,171 Sylvan Learning Systems Inc./(1)/ 37,667 1,064,093 Sensient Technologies Corp. 46,066 1,060,439 Cleco Corp. 43,772 1,046,151 Trinity Industries Inc. 42,814 1,040,808 Longs Drug Stores Corp. 36,867 1,027,483 Quanta Services Inc./(1)/ 59,104 1,021,908 Universal Corp. 25,620 1,008,403 Minerals Technologies Inc. 19,044 999,239 Hunt (J.B.) Transport Services Inc./(1)/ 35,027 995,818 Kelly Services Inc. "A" 34,927 985,989 Granite Construction Inc. 39,997 984,326 Ascential Software Corp./(1)/ 252,384 971,678 Tecumseh Products Co. "A" 17,970 957,801 Bob Evans Farms Inc. 33,913 957,025 Potlatch Corp. 27,531 927,519 ADTRAN Inc./(1)/ 38,378 926,445 Claire's Stores Inc. 47,475 924,813 Albany International Corp. "A" 30,396 920,999 Imation Corp./(1)/ 34,020 902,551 Horace Mann Educators Corp. 39,626 891,981 Modine Manufacturing Co. 32,372 873,720 CommScope Inc./(1)/ 50,102 871,775 Black Hills Corp. 25,801 863,817 Alaska Air Group Inc./(1)/ 25,821 859,581 Banta Corp. 24,031 858,147 Perrigo Co./(1) 71,415 853,409 Newport Corp. 35,639 851,772 MPS Group Inc./(1)/ 95,536 835,940 Fuller (H.B.) Co. 27,534 824,643 Airborne Inc. 46,816 818,812 Overseas Shipholding Group Inc. 33,360 810,648 Enterasys Networks Inc./(1)/ 191,287 809,144 Wallace Computer Services Inc. 39,872 805,414 Olin Corp. 42,266 794,601 Kaydon Corp. 29,135 786,645 Incyte Genomics Inc./(1)/ 64,607 768,823 Bandag Inc. 20,075 756,426 Ruddick Corp. 45,065 749,882 Glatfelter Co. 41,564 745,658 EGL Inc./(1)/ 46,513 737,231 NCO Group Inc./(1)/ 25,131 697,637 Dycom Industries Inc./(1)/ 46,464 694,637 InFocus Corp./(1)/ 37,954 691,142 Wausau-Mosinee Paper Corp. 50,138 639,761 Carpenter Technology Corp. 21,567 624,149 PacifiCare Health Systems Inc. "A"/(1)/ 33,621 586,686 Stewart & Stevenson Services Inc. 27,694 535,879 DSP Group Inc./(1)/ 26,095 534,165 Sequa Corp. "A"/(1)/ 10,131 528,838 Schulman (A.) Inc. 28,443 520,222 Longview Fibre Co. 49,718 512,095 Unifi Inc./(1)/ 52,404 492,598 RSA Security Inc./(1)/ 54,689 492,201 Atlas Air Worldwide Holdings Inc./(1)/ 37,228 490,293 Transaction Systems Architects Inc. "A"/(1)/ 34,370 391,818 Sykes Enterprises Inc./(1)/ 39,108 378,957 Korn/Ferry International/(1)/ 36,774 365,901 TranSwitch Corp./(1)/ 88,959 290,006 ------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $413,895,411) 454,298,834 ------------------------------------------------------------------- 62 2002 iShares Annual Report to Shareholders iShares S&P MidCap 400/BARRA Value Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value ------------------------------------------------------------------- SHORT TERM INSTRUMENTS - 7.01% ------------------------------------------------------------------- Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 18,478,637 $ 18,478,637 Dreyfus Money Market Fund 6,790,851 6,790,851 Goldman Sachs Financial Square Prime Obligation Fund 674,375 674,375 Providian Temp Cash Money Market Fund 5,918,493 5,918,493 ------------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $31,862,356) 31,862,356 ------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 106.92% (Cost $445,757,767) 486,161,190 ------------------------------------------------------------------- Other Assets, Less Liabilities -- (6.92%) (31,478,151) ------------------------------------------------------------------- NET ASSETS -- 100.00% $454,683,039 =================================================================== /(1)/ Non-income earning securities. See notes to financial statements. Schedules of Investments 63 iShares S&P SmallCap 600 Index Fund Schedule of Investments March 31, 2002 Security Shares Value --------------------------------------------------------------------- COMMON STOCKS - 99.96% --------------------------------------------------------------------- Cephalon Inc./(1)/ 141,001 $ 8,883,063 AdvancePCS/(1)/ 257,677 7,753,501 Varian Medical Systems Inc./(1)/ 187,831 7,682,288 Whole Foods Market Inc./(1)/ 155,434 7,101,779 Alliant Techsystems Inc./(1)/ 69,312 7,069,131 Michaels Stores Inc./(1)/ 182,997 6,917,287 XTO Energy Inc. 344,599 6,909,210 Constellation Brands Inc./(1)/ 122,034 6,706,989 NVR Inc./(1)/ 21,095 6,655,472 OM Group Inc. 77,134 5,576,788 Pier 1 Imports Inc. 260,460 5,362,871 Cullen/Frost Bankers Inc. 143,262 5,138,808 Pharmaceutical Product Development Inc./(1)/ 145,163 5,058,931 Cheesecake Factory (The)/(1)/ 135,130 4,986,297 Toll Brothers Inc./(1)/ 97,884 4,879,517 Zebra Technologies Corp. "A"/(1)/ 88,010 4,760,461 Coventry Health Care Inc./(1)/ 182,859 4,754,334 Pogo Producing Co. 149,579 4,741,654 Medicis Pharmaceutical Corp. "A"/(1)/ 85,306 4,734,483 La-Z-Boy Inc. 169,754 4,659,747 Cerner Corp./(1)/ 97,463 4,649,960 Raymond James Financial Inc. 135,363 4,633,475 O'Reilly Automotive Inc./(1)/ 146,529 4,625,921 Cymer Inc./(1)/ 92,080 4,572,693 Newfield Exploration Co./(1)/ 122,645 4,536,639 Renal Care Group Inc./(1)/ 137,140 4,498,192 Philadelphia Suburban Corp. 190,199 4,469,677 Harman International Industries Inc. 90,066 4,444,757 Roper Industries Inc. 86,609 4,307,932 Washington Federal Inc. 176,882 4,234,555 Ruby Tuesday Inc. 179,683 4,177,630 Accredo Health Inc./(1)/ 72,785 4,168,397 Varian Semiconductor Equipment Associates Inc./(1)/ 91,365 4,111,425 Ethan Allen Interiors Inc. 107,965 4,109,148 Hudson United Bancorp 128,785 4,096,651 Fair Isaac and Co. Inc. 64,525 4,090,240 Polaris Industries Inc. 64,052 4,080,112 First American Corp. 191,343 4,071,779 Performance Food Group Co./(1)/ 122,004 3,984,651 First Midwest Bancorp Inc. 136,053 3,950,979 Adaptec Inc./(1)/ 295,479 3,950,554 SkyWest Inc. 158,309 3,946,643 Zale Corp./(1)/ 97,172 3,945,183 Axcelis Technologies Inc./(1)/ 271,619 3,884,152 Timken Co. (The) 166,862 3,852,844 Mid Atlantic Medical Services Inc./(1)/ 135,151 3,851,803 Orthodontic Centers of America Inc./(1)/ 139,339 3,847,150 Chico's FAS Inc./(1)/ 113,236 3,816,053 RGS Energy Group Inc. 96,616 3,792,178 FactSet Research Systems Inc. 93,353 3,766,794 Applebee's International Inc. 103,297 3,749,681 Global Payments Inc. 101,937 3,735,991 Scotts Co. (The) "A"/(1)/ 81,511 3,731,574 Werner Enterprises Inc. 176,753 3,702,975 BARRA Inc./(1)/ 60,809 3,683,201 Whitney Holding Corp. 73,632 3,671,292 United Stationers Inc./(1)/ 94,434 3,597,935 ResMed Inc./(1)/ 89,641 3,597,293 CEC Entertainment Inc./(1)/ 77,706 3,590,017 Downey Financial Corp. 78,630 3,585,528 United Bancshares Inc. 120,215 3,549,949 Cognex Corp./(1)/ 122,113 3,548,604 Graco Inc. 86,703 3,541,818 Jeffries Group Inc. 73,172 3,526,890 Massey Energy Co. 208,492 3,523,515 AnnTaylor Stores Corp./(1)/ 81,371 3,516,855 AptarGroup Inc. 99,940 3,502,897 Commercial Federal Corp. 129,312 3,478,493 NDCHealth Corp. 95,244 3,465,929 Staten Island Bancorp Inc. 176,049 3,464,644 Linens 'N Things Inc./(1)/ 113,281 3,458,469 Diagnostic Products Corp. 78,848 3,406,234 THQ Inc./(1)/ 68,759 3,376,067 Ryland Group Inc. 36,976 3,335,235 Regis Corp. 117,732 3,305,915 Priority Healthcare Corp. "B"/(1)/ 126,566 3,291,982 Mueller Industries Inc./(1)/ 93,278 3,263,797 Jack in the Box Inc./(1)/ 109,791 3,255,303 Piedmont Natural Gas Co. 90,659 3,227,460 Invacare Corp. 85,708 3,222,621 M.D.C. Holdings Inc. 74,429 3,215,333 Techne Corp./(1)/ 115,792 3,192,385 64 2002 iShares Annual Report to Shareholders iShares S&P SmallCap 600 Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value --------------------------------------------------------------------- COMMON STOCKS (continued) --------------------------------------------------------------------- Advanced Energy Industries Inc./(1)/ 88,730 $ 3,190,731 PolyOne Corp. 261,307 3,187,945 Corn Products International Inc. 98,589 3,174,566 Idex Corp. 85,574 3,166,238 Florida Rock Industries Inc. 78,882 3,142,659 NBTY Inc./(1)/ 183,248 3,126,211 Shurgard Storage Centers Inc. "A" 90,684 3,074,188 Shaw Group Inc. (The)/(1)/ 111,726 3,072,465 Southwest Bancorp of Texas Inc./(1)/ 91,795 3,060,445 Regeneron Pharmaceuticals Inc./(1)/ 121,954 3,047,630 Anixter International Inc./(1)/ 102,739 3,044,157 Cambrex Corp. 71,853 3,025,011 Corinthian Colleges Inc./(1)/ 59,521 3,008,787 Great Atlantic & Pacific Tea Co./(1)/ 106,919 2,980,902 Tom Brown Inc./(1)/ 109,025 2,976,383 Argosy Gaming Co./(1)/ 80,293 2,945,950 Atlantic Coast Airlines Holdings Inc./(1)/ 122,417 2,935,560 Manhattan Associates Inc./(1)/ 76,861 2,928,404 ITT Educational Services Inc./(1)/ 64,526 2,903,670 Community First Bankshares Inc. 112,122 2,899,475 Sonic Corp./(1)/ 111,312 2,861,832 Kulicke & Soffa Industries Inc./(1)/ 137,069 2,852,406 Photronics Inc./(1)/ 84,431 2,847,858 Stone Energy Corp./(1)/ 73,052 2,830,765 Veeco Instruments Inc./(1)/ 80,119 2,804,165 Province Healthcare Co./(1)/ 88,246 2,803,575 Electro Scientific Industries Inc./(1)/ 76,100 2,789,065 Heartland Express Inc./(1)/ 139,691 2,788,232 Pediatrix Medical Group Inc./(1)/ 68,205 2,780,036 Briggs & Stratton Corp. 60,315 2,774,490 Fleming Companies Inc. 123,690 2,770,656 Respironics Inc./(1)/ 85,314 2,764,174 Elantec Semiconductor Inc./(1)/ 64,402 2,754,474 Men's Wearhouse Inc. (The)/(1)/ 117,937 2,753,829 Arbitron Inc./(1)/ 81,313 2,748,379 Seacor Smit Inc./(1)/ 56,040 2,745,960 Black Box Corp./(1)/ 56,179 2,720,187 CACI International Inc. "A"/(1)/ 77,229 2,711,510 Coherent Inc./(1)/ 79,714 2,702,305 Atmos Energy Corp. 114,442 2,700,831 Susquehanna Bancshares Inc. 109,676 2,684,868 Manitowoc Co. Inc. (The) 67,736 2,675,572 Southern Union Co./(1)/ 145,626 2,667,868 ATMI Inc./(1)/ 84,641 2,661,959 Oshkosh Truck Corp. 46,681 2,656,149 Insight Enterprises Inc./(1)/ 116,213 2,631,062 Kansas City Southern Industries Inc. 164,420 2,620,855 USFreightways Corp. 73,643 2,609,908 Chittenden Corp. 89,367 2,605,048 Kronos Inc./(1)/ 55,294 2,597,712 DuPont Photomasks Inc./(1)/ 49,828 2,591,056 Vintage Petroleum Inc. 175,950 2,586,465 Too Inc./(1)/ 87,274 2,573,710 TrustCo Bank Corp. NY 198,653 2,564,610 Waste Connections Inc./(1)/ 76,417 2,560,734 Hughes Supply Inc. 65,714 2,560,217 ESS Technology Inc./(1)/ 123,063 2,552,327 Fred's Inc. 70,737 2,546,532 Brooks Automation Inc./(1)/ 55,569 2,525,055 UICI/(1)/ 132,846 2,517,432 IDEXX Laboratories Inc./(1)/ 93,723 2,515,525 Panera Bread Co. "A"/(1)/ 39,417 2,511,257 ABM Industries Inc. 68,097 2,499,160 PRG-Schultz International Inc./(1)/ 177,290 2,490,924 Group 1 Automotive Inc./(1)/ 63,420 2,476,551 Hyperion Solutions Corp./(1)/ 91,556 2,472,928 Hilb Rogal & Hamilton Co. 78,790 2,458,248 Reliance Steel & Aluminum Co. 88,046 2,429,189 Winnebago Industries Inc. 57,797 2,426,896 Texas Industries Inc. 58,313 2,402,496 UGI Corp. 76,469 2,396,538 Photon Dynamics Inc./(1)/ 47,077 2,395,749 EMCOR Group Inc./(1)/ 41,292 2,394,936 Action Performance Companies Inc./(1)/ 48,517 2,389,462 Pep Boys-Manny, Moe & Jack Inc. 143,372 2,385,710 Burlington Coat Factory Warehouse Corp. 123,789 2,382,938 Georgia Gulf Corp. 88,451 2,374,909 Mentor Corp. 65,270 2,354,942 ADVO Inc./(1)/ 55,737 2,354,331 Harland (John H.) Co. 80,959 2,353,478 South Financial Group Inc. (The) 115,245 2,345,236 Haemonetics Corp./(1)/ 73,865 2,344,475 US Oncology Inc./(1)/ 264,354 2,328,959 Brady Corp. "A" 64,062 2,325,451 Schedules of Investments 65 iShares S&P SmallCap 600 Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value --------------------------------------------------------------------- COMMON STOCKS (continued) --------------------------------------------------------------------- UIL Holdings Corp. 39,953 $ 2,321,269 Philadelphia Consolidated Holding Corp./(1)/ 58,146 2,314,211 Energen Corp. 87,086 2,303,425 Standard-Pacific Corp. 81,836 2,299,592 Armor Holdings Inc./(1)/ 84,814 2,298,459 Central Parking Corp. 99,684 2,291,735 Christopher & Banks Corp./(1)/ 69,280 2,275,848 Ralcorp Holdings Inc./(1)/ 83,436 2,269,459 CAL Dive International Inc./(1)/ 90,864 2,262,514 New Jersey Resources Corp. 74,792 2,261,710 Southwest Gas Corp. 90,407 2,260,175 Pacific Sunwear of California Inc./(1)/ 91,359 2,247,431 American Italian Pasta Co. "A"/(1)/ 49,460 2,245,484 Technitrol Inc. 93,973 2,240,316 Exar Corp./(1)/ 108,915 2,237,114 Fossil Inc./(1)/ 84,110 2,236,485 Aztar Corp./(1)/ 101,937 2,232,420 Delphi Financial Group Inc. "A" 56,910 2,231,441 P.F. Chang's China Bistro Inc./(1)/ 33,454 2,229,040 MAF Bancorp Inc. 62,684 2,209,611 CLARCOR Inc. 68,776 2,200,832 El Paso Electric Co./(1)/ 140,571 2,199,936 Cabot Oil & Gas Corp. "A" 88,745 2,197,326 SCP Pool Corp./(1)/ 69,627 2,186,288 Woodward Governor Co. 31,626 2,175,869 American Management Systems Inc./(1)/ 116,310 2,172,787 CH Energy Group Inc. 45,653 2,166,235 Standard Register Co. (The) 77,035 2,166,224 Evergreen Resources Inc./(1)/ 51,853 2,162,270 Kilroy Realty Corp. 76,525 2,158,770 Aeroflex Inc./(1)/ 167,225 2,150,513 G&K Services Inc. "A" 57,632 2,147,368 First Bancorp. 74,074 2,140,739 Baldor Electric Co. 94,532 2,136,423 Administaff Inc./(1)/ 76,999 2,127,482 Sybron Dental Specialties Inc./(1)/ 105,721 2,124,992 Avant! Corp./(1)/ 105,444 2,112,043 Hain Celestial Group Inc./(1)/ 94,215 2,096,284 Landstar System Inc./(1)/ 22,572 2,094,682 Steel Dynamics Inc./(1)/ 127,543 2,092,981 Lennox International Inc. 157,779 2,085,838 Tetra Tech Inc./(1)/ 145,822 2,083,796 Wolverine World Wide Inc. 115,861 2,079,705 eFunds Corp./(1)/ 129,328 2,075,714 Simpson Manufacturing Co. Inc./(1)/ 33,912 2,073,719 Take-Two Interactive Software Inc./(1)/ 102,553 2,061,315 Avista Corp. 132,663 2,060,256 SurModics Inc./(1)/ 47,027 2,050,377 Ryan's Family Steak Houses Inc./(1)/ 85,063 2,041,512 Toro Co. 34,176 2,036,890 Stillwater Mining Co./(1)/ 108,051 2,036,761 Delta & Pine Land Co. 107,265 2,034,817 Aspen Technology Inc./(1)/ 88,385 2,024,016 Cooper Companies Inc. 42,407 2,010,092 Colonial Properties Trust 58,124 2,002,372 Kirby Corp./(1)/ 66,920 2,000,908 Vicor Corp./(1)/ 118,227 1,998,036 Roadway Corp. 53,980 1,997,260 Tredegar Corp. 106,431 1,990,260 MAXIMUS Inc./(1)/ 64,557 1,983,837 Paxar Corp./(1)/ 116,819 1,968,400 Northwest Natural Gas Co. 70,251 1,967,731 Mercury Computer Systems Inc./(1)/ 61,551 1,967,170 UCBH Holdings Inc. 54,247 1,951,807 IHOP Corp./(1)/ 57,758 1,947,022 Rudolph Technologies Inc./(1)/ 44,970 1,940,905 MacDermid Inc. 89,577 1,940,238 Monaco Coach Corp./(1)/ 79,776 1,938,557 Wet Seal Inc. "A"/(1)/ 55,488 1,935,976 Oceaneering International Inc./(1)/ 65,920 1,911,680 East West Bancorp Inc. 65,236 1,910,762 UniSource Energy Corp. 93,365 1,910,248 Harmonic Inc./(1)/ 164,601 1,909,372 Forward Air Corp./(1)/ 60,175 1,904,539 Acuity Brands Inc. 115,194 1,904,157 DRS Technologies Inc./(1)/ 45,887 1,903,852 Patina Oil & Gas Corp. 60,214 1,897,945 Selective Insurance Group Inc. 71,063 1,897,382 Arkansas Best Corp./(1)/ 68,115 1,892,916 Hooper Holmes Inc. 180,218 1,890,487 GenCorp. Inc. 119,998 1,886,369 Syncor International Corp./(1)/ 69,092 1,882,757 Alpha Industries Inc./(1)/ 123,329 1,880,767 Tower Automotive Inc./(1)/ 134,129 1,876,465 Curtiss Wright Corp. 28,126 1,870,379 66 2002 iShares Annual Report to Shareholders iShares S&P SmallCap 600 Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value --------------------------------------------------------------------- COMMON STOCKS (continued) --------------------------------------------------------------------- Insituform Technologies Inc. "A"/(1)/ 73,907 $ 1,867,630 Casey's General Store Inc. 138,136 1,864,836 Thor Industries Inc. 39,393 1,863,289 Presidential Life Corp. 81,762 1,860,085 Owens & Minor Inc. 94,413 1,854,271 INAMED Corp./(1)/ 56,009 1,842,696 Impath Inc./(1)/ 44,836 1,840,069 Unit Corp./(1)/ 100,336 1,835,145 Yellow Corp./(1)/ 69,143 1,824,684 Hot Topic Inc./(1)/ 87,042 1,819,178 Russ Berrie & Co. Inc. 56,161 1,808,384 Progress Software Corp./(1) 99,563 1,806,073 Helix Technology Corp. 71,128 1,800,961 Spherion Corp./(1)/ 162,736 1,798,233 LandAmerica Financial Group Inc. 51,861 1,795,946 American Financial Holdings Inc. 66,954 1,781,646 Bally Total Fitness Holding Corp./(1)/ 81,031 1,778,630 C-COR.net Corp./(1)/ 98,422 1,771,596 Atwood Oceanics Inc./(1)/ 38,539 1,768,940 CONMED Corp./(1)/ 70,340 1,758,500 Information Holdings Inc./(1)/ 60,662 1,747,066 JLG Industries Inc. 117,527 1,739,400 Regal-Beloit Corp. 67,956 1,736,276 Triumph Group Inc./(1)/ 44,068 1,727,466 Verity Inc./(1)/ 97,567 1,724,985 Metro One Telecommunications Inc./(1)/ 67,950 1,722,533 Provident Bankshares Corp. 71,328 1,711,872 CARBO Ceramics Inc. 41,660 1,706,394 Alpharma Inc. "A" 119,171 1,704,145 WMS Industries Inc./(1)/ 89,676 1,703,844 CUNO Inc./(1)/ 45,840 1,701,581 Pre-Paid Legal Services Inc./(1)/ 59,518 1,699,834 Footstar Inc./(1)/ 55,532 1,693,171 Smith (A.O.) Corp. "B" 66,425 1,690,516 NorthWestern Corp. 76,368 1,680,096 FileNET Corp./(1)/ 98,292 1,679,810 St. Mary Land & Exploration Co. 77,320 1,678,617 Genesco Inc./(1)/ 60,852 1,677,690 Sunrise Assisted Living Inc./(1)/ 61,507 1,676,681 AstroPower Inc./(1)/ 40,086 1,673,991 Kopin Corp./(1)/ 182,486 1,662,447 HNC Software Inc./(1)/ 98,581 1,656,161 Boston Private Financial Holdings Inc. 61,831 1,653,979 Libbey Inc. 42,699 1,644,765 Cable Design Technologies Corp./(1)/ 123,097 1,643,345 Prime Hospitality Corp./(1)/ 124,834 1,641,567 Cost Plus Inc./(1)/ 59,976 1,641,087 Cohu Inc. 57,378 1,634,699 Belden Inc. 68,568 1,633,975 Viasys Healthcare Inc./(1)/ 72,555 1,631,762 Plains Resource Inc./(1)/ 65,032 1,617,996 URS Corp./(1)/ 50,740 1,608,458 Enzo Biochem Inc./(1)/ 79,277 1,606,152 Lone Star Technologies Inc./(1)/ 70,292 1,603,361 Midway Games Inc./(1)/ 118,697 1,597,662 Triarc Companies Inc./(1)/ 56,819 1,579,568 Sterling Bancshares Inc. 117,989 1,575,153 Park Electrochemical Corp. 54,272 1,573,888 Ionics Inc./(1)/ 48,743 1,562,701 Cato Corp. "A" 69,627 1,551,290 SPS Technologies Inc./(1)/ 36,529 1,547,734 CIBER Inc./(1)/ 168,726 1,543,843 Kellwood Co. 63,439 1,540,933 Griffon Corp./(1)/ 91,677 1,535,590 Benchmark Electronics Inc./(1)/ 54,842 1,535,576 Analogic Corp. 36,852 1,532,675 Commercial Metals Co. 36,475 1,531,950 C&D Technologies Inc. 72,832 1,530,929 Financial Federal Corp./(1)/ 46,397 1,522,286 Hutchinson Technology Inc./(1)/ 70,494 1,520,556 Rare Hospitality International Inc./(1)/ 59,808 1,520,319 Dress Barn Inc./(1)/ 51,033 1,511,087 Frontier Airlines Inc./(1)/ 81,127 1,486,247 Power Integrations Inc./(1)/ 77,869 1,483,404 EDO Corp. 54,632 1,475,610 Teledyne Technologies Inc./(1)/ 88,795 1,472,221 Dime Community Bancshares 47,794 1,472,055 Veritas DGC Inc./(1)/ 86,378 1,460,652 Wellman Inc. 88,789 1,460,579 Dionex Corp./(1)/ 59,762 1,454,009 Rogers Corp./(1)/ 43,776 1,453,801 ShopKo Stores Inc./(1)/ 80,140 1,450,534 OshKosh B'Gosh Inc. "A" 33,358 1,429,724 SOURCECORP Inc./(1)/ 48,477 1,429,587 Zenith National Insurance Corp. 48,914 1,428,289 RLI Corp. 27,414 1,417,304 Schedules of Investments 67 iShares S&P SmallCap 600 Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value --------------------------------------------------------------------- COMMON STOCKS (continued) --------------------------------------------------------------------- Quiksilver Inc./(1)/ 64,719 $ 1,416,052 Landry's Restaurants Inc. 61,523 1,412,568 Checkpoint Systems Inc./(1)/ 88,296 1,408,321 Nautica Enterprises Inc./(1)/ 92,563 1,403,255 Lone Star Steakhouse & Saloon Inc. 67,107 1,401,865 Netegrity Inc./(1)/ 94,391 1,396,043 Actel Corp./(1)/ 66,909 1,385,685 Anchor BanCorp Wisconsin Inc. 69,125 1,384,574 RehabCare Group Inc./(1)/ 48,359 1,378,231 Arch Chemicals Inc. 61,897 1,364,829 Swift Energy Co./(1)/ 69,137 1,361,999 Milacron Inc. 93,349 1,361,962 Itron Inc./(1)/ 45,021 1,339,375 School Specialty Inc./(1)/ 49,965 1,335,065 Quanex Corp. 37,526 1,332,173 Vital Sign Inc. 36,089 1,330,962 Russell Corp. 89,263 1,330,019 Offshore Logistics Inc./(1)/ 61,713 1,329,915 Watsco Inc. 74,406 1,328,147 General Communication Inc. "A"/(1)/ 152,461 1,326,411 WD-40 Co. 43,860 1,321,063 Universal Forest Products Inc. 55,164 1,317,868 Marcus Corp. 81,573 1,314,957 Arctic Cat Inc. 65,252 1,314,828 Alliance Semiconductor Corp./(1)/ 113,758 1,310,492 CTS Corp. 80,514 1,308,352 Input/Output Inc./(1)/ 143,194 1,303,065 Ultratech Stepper Inc./(1)/ 62,591 1,301,893 Bowne & Co. Inc. 92,397 1,300,026 Noven Pharmaceuticals Inc./(1)/ 62,626 1,298,863 United Natural Foods Inc./(1)/ 52,089 1,297,537 Microsemi Corp./(1)/ 79,099 1,290,896 Advanced Marketing Services Inc. 53,509 1,284,216 Aaron Rents Inc. "B" 55,776 1,274,482 Pegasus Solutions Inc./(1)/ 68,608 1,269,248 Mobile Mini Inc./(1)/ 39,307 1,264,899 Pinnacle Systems Inc./(1)/ 158,468 1,262,990 FirstFed Financial Corp./(1)/ 48,263 1,262,077 Remington Oil & Gas Corp./(1)/ 62,583 1,261,673 Barnes Group Inc. 51,404 1,259,398 Pioneer-Standard Electronics Inc. 88,623 1,254,015 International Multifoods Corp./(1)/ 52,778 1,254,005 DMC Stratex Networks Inc./(1)/ 229,543 1,248,714 Methode Electronics Inc. "A" 100,217 1,247,702 Watts Industries Inc. "A" 73,997 1,243,150 MICROS Systems Inc./(1)/ 48,830 1,242,723 Inter-Tel Inc. 67,125 1,239,799 Intermagnetics General Corp./(1)/ 45,490 1,239,603 Thomas Industries Inc. 42,374 1,239,440 Dril-Quip Inc./(1)/ 48,241 1,237,382 Laclede Group Inc. (The) 52,669 1,227,188 CDI Corp./(1)/ 53,306 1,223,373 Valmont Industries Inc. 68,263 1,221,908 Riggs National Corp. 79,529 1,220,770 Systems & Computer Technology Corp./(1)/ 92,315 1,217,635 Roxio Inc./(1)/ 53,286 1,209,059 Datascope Corp. 41,192 1,208,985 Fremont General Corp. 197,323 1,203,670 Jakks Pacific Inc./(1)/ 52,895 1,203,361 Coca-Cola Bottling Co. Consolidated 24,436 1,197,364 Elcor Corp. 53,930 1,197,246 Esterline Technologies Corp./(1)/ 57,793 1,178,977 Dendrite International Inc./(1)/ 110,103 1,178,102 Gymboree Corp./(1)/ 79,182 1,167,934 Therma-Wave Inc./(1)/ 80,403 1,161,019 Lance Inc. 81,026 1,158,672 Trimble Navigation Ltd./(1)/ 69,625 1,157,864 Stein Mart Inc./(1)/ 114,932 1,150,469 Chesapeake Corp. 42,319 1,148,961 NYFIX Inc./(1)/ 76,701 1,147,447 ArthroCare Corp./(1)/ 63,544 1,144,427 Tetra Technologies Inc./(1)/ 39,331 1,142,566 O'Charley's Inc./(1)/ 51,895 1,118,337 On Assignment Inc./(1)/ 62,425 1,117,407 PAREXEL International Corp./(1)/ 69,510 1,114,940 CryoLife Inc./(1)/ 52,665 1,100,698 Steak n Shake Company (The)/(1)/ 77,794 1,093,006 ANSYS Inc./(1)/ 40,235 1,090,368 Phillips-Van Heusen Corp. 77,179 1,088,996 K-Swiss Inc. "A" 25,815 1,083,714 GBC Bancorp 32,253 1,078,863 First Republic Bank/(1)/ 37,979 1,078,604 Champion Enterprises Inc./(1)/ 134,499 1,075,992 NUI Corp. 43,203 1,074,891 Gardner Denver Inc./(1)/ 43,576 1,067,612 Kaman Corp. "A" 62,379 1,057,324 Fleetwood Enterprises Inc. 97,574 1,053,799 68 2002 iShares Annual Report to Shareholders iShares S&P SmallCap 600 Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value --------------------------------------------------------------------- COMMON STOCKS (continued) --------------------------------------------------------------------- Heidrick & Struggles International Inc./(1)/ 50,298 $ 1,046,198 ChemFirst Inc. 39,106 1,046,085 Kroll Inc./(1)/ 62,795 1,045,537 Standard Microsystems Corp./(1)/ 44,815 1,030,745 Applied Industrial Technologies Inc. 53,544 1,030,722 Schweitzer-Mauduit International Inc. 41,391 1,028,566 Read-Rite Corp./(1)/ 334,572 1,027,136 Mesa Air Group Inc./(1)/ 91,510 1,024,912 Chemed Corp. 27,425 1,024,324 Sierra Health Services Inc./(1)/ 77,822 1,017,912 Avid Technology Inc./(1)/ 72,667 1,010,798 Biosite Inc./(1)/ 40,658 1,006,285 Deltic Timber Corp. 33,215 1,004,754 Viasat Inc./(1)/ 71,619 1,004,098 Pericom Semiconductor Corp./(1)/ 70,659 999,118 Buckeye Technologies Inc./(1)/ 96,962 998,709 Electroglas Inc./(1)/ 58,856 994,666 Sola International Inc./(1)/ 67,537 994,145 Artesyn Technologies Inc./(1)/ 106,690 993,284 Stewart Information Services Corp./(1)/ 49,621 992,420 American States Water Co. 28,130 991,582 Concord Communications Inc./(1)/ 46,660 986,859 BE Aerospace Inc./(1)/ 98,341 976,526 SWS Group Inc. 48,102 974,066 Sturm Ruger & Co. Inc. 75,111 968,932 Keithley Instruments Inc. 43,926 965,054 Stride Rite Corp. 116,963 964,945 Myers Industries Inc. 66,545 964,902 Apogee Enterprises Inc. 79,003 963,837 Phoenix Technologies Ltd./(1)/ 70,443 961,547 Astec Industries Inc./(1)/ 54,673 960,605 Brown Shoe Co. Inc. 48,734 948,364 Century Aluminum Co. 57,195 929,419 MGI Pharma Inc./(1)/ 67,090 923,158 Trenwick Group Ltd. 102,888 922,905 Planar Systems Inc./(1)/ 35,146 922,582 Catapult Communications Corp./(1)/ 36,432 919,544 Tollgrade Communications Inc./(1)/ 37,511 919,395 OMNOVA Solutions Inc. 110,436 916,619 New England Business Service Inc. 35,436 909,642 StarTek Inc./(1)/ 39,250 908,638 Hancock Fabrics Inc. 49,935 901,327 Robbins & Myers Inc. 32,943 900,991 J&J Snack Foods Corp./(1)/ 24,099 900,821 Interface Inc. "A" 141,822 900,570 Nash Finch Co. 32,792 893,582 Southwestern Energy Co./(1)/ 70,285 884,185 Three-Five Systems Inc./(1)/ 59,615 883,494 Prima Energy Corp./(1)/ 35,443 882,531 Labor Ready Inc./(1)/ 113,014 881,509 RadiSys Corp./(1)/ 48,428 872,188 Ultimate Electronics Inc./(1)/ 31,007 869,746 Imagistics International Inc./(1)/ 54,450 865,755 DIMON Inc. 124,595 859,705 PolyMedica Corp./(1)/ 33,689 857,385 TBC Corp./(1)/ 58,497 848,207 Jo-Ann Stores Inc./(1)/ 51,655 833,712 Stratos Lightwave Inc./(1)/ 187,756 829,882 Standex International Corp. 33,800 825,396 Theragenics Corp./(1)/ 82,717 818,898 SPSS Inc./(1)/ 46,611 817,557 Caraustar Industries Inc. 77,763 812,623 AAR Corp. 74,908 806,759 Hologic Inc./(1)/ 52,127 805,362 Bio-Technology General Corp./(1)/ 162,600 798,366 Lindsay Manufacturing Co. 32,531 792,130 Volt Information Sciences Inc./(1)/ 42,425 791,226 MRO Software Inc./(1)/ 63,130 785,337 Lawson Products Inc. 26,878 774,624 Bei Technologies Inc. 40,274 759,165 Ryerson Tull Inc. 69,166 757,368 MemberWorks Inc./(1)/ 39,800 753,414 Information Resources Inc./(1)/ 81,773 751,494 Supertex Inc./(1)/ 34,806 739,976 Key Productions Co. Inc./(1)/ 38,984 738,747 Bel Fuse Inc. "B" 29,990 733,555 Magnetek Inc./(1)/ 62,635 732,829 Rainbow Technologies Inc./(1)/ 72,780 732,167 Consolidated Graphics Inc./(1)/ 36,786 732,041 Skyline Corp. 23,394 726,384 Coachmen Industries Inc. 44,414 723,948 Arqule Inc./(1)/ 56,757 716,841 Goody's Family Clothing Inc./(1)/ 90,568 710,959 Nuevo Energy Co./(1)/ 47,435 706,781 Schedules of Investments 69 iShares S&P SmallCap 600 Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value --------------------------------------------------------------------- COMMON STOCKS (continued) --------------------------------------------------------------------- Midwest Express Holdings Inc./(1)/ 38,640 $ 706,726 Radiant Systems Inc./(1)/ 76,485 692,189 Concord Camera Corp./(1)/ 76,620 690,346 4Kids Entertainment Inc./(1)/ 34,091 679,092 Penton Media Inc. 89,108 672,765 Bassett Furniture Industries Inc. 32,765 671,682 RTI International Metals Inc./(1)/ 57,889 668,618 AXT Inc./(1)/ 62,366 667,316 Cascade Natural Gas Corp. 30,832 654,255 Advanced Tissue Sciences Inc./(1)/ 204,191 642,181 Seitel Inc./(1)/ 69,914 639,713 Pope & Talbot Inc. 43,539 638,282 Wabash National Corp. 64,258 636,154 Lydall Inc./(1)/ 44,428 629,989 Cleveland-Cliffs Inc. 28,307 622,754 Salton Inc./(1)/ 30,664 608,680 Cash America International Inc. 68,811 605,537 InterVoice-Brite Inc./(1)/ 93,709 599,738 Quaker Chemical Corp. 25,472 594,771 Midas Inc./(1)/ 41,587 593,031 Brush Engineered Materials Inc. 46,330 588,391 Central Vermont Public Service Corp. 32,311 577,074 Pinnacle Entertainment Inc./(1)/ 71,023 572,445 Insurance Auto Auctions Inc./(1)/ 33,919 567,804 Aspect Communications Corp./(1)/ 144,814 566,223 Allen Telecom Inc./(1)/ 83,478 557,633 Applica Inc./(1)/ 64,827 557,512 Oxford Industries Inc. 20,957 553,265 National Presto Industries Inc. 19,051 547,907 Carreker Corp./(1)/ 61,122 532,984 Building Materials Holdings Corp./(1)/ 36,169 520,834 SBS Technologies Inc./(1)/ 40,633 519,290 QRS Corp./(1)/ 43,520 513,536 Nature's Sunshine Products Inc. 45,391 508,833 Standard Motor Products Inc. 34,826 508,460 Department 56 Inc./(1)/ 36,015 504,210 SCM Microsystems Inc./(1)/ 42,753 499,783 Intermet Corp. 71,127 499,312 Bell Microproducts Inc./(1)/ 47,204 490,922 Nelson (Thomas) Inc. 40,081 486,984 X-Rite Inc. 59,470 475,760 Butler Manufacturing Co. 17,608 472,775 PC-Tel Inc./(1)/ 54,375 470,344 Factory 2-U Stores Inc./(1)/ 35,833 462,246 Audiovox Corp. "A"/(1)/ 63,906 458,845 Gerber Scientific Inc./(1)/ 61,613 452,856 SCPIE Holdings Inc. 26,024 441,888 Material Sciences Corp./(1)/ 41,131 429,819 Castle (A.M.) & Co. 39,358 426,641 Luby's Inc./(1)/ 62,638 425,938 Flow International Corp./(1)/ 42,598 416,608 MapInfo Corp./(1)/ 41,345 413,450 Boston Communications Group Inc./(1)/ 47,937 412,738 Cygnus Inc./(1)/ 103,277 403,813 Aware Inc./(1)/ 63,271 401,771 Valence Technology Inc./(1)/ 127,279 388,201 Symmetricom Inc./(1)/ 62,310 385,699 Spacelabs Medical Inc./(1)/ 27,167 381,968 Angelica Corp. 24,009 371,899 IMCO Recycling Inc./(1)/ 41,222 366,876 CPI Corp. 22,135 364,121 Commonwealth Industries Inc. 46,029 340,615 Penford Corp. 21,094 339,613 Computer Task Group Inc./(1)/ 58,303 336,991 Digi International Inc./(1)/ 60,897 331,889 K2 Inc./(1)/ 50,088 326,574 Cross (A.T.) Co./(1)/ 46,957 324,003 Network Equipment Technologies Inc./(1)/ 61,788 318,208 ZixIt Corp./(1)/ 47,968 312,751 Captaris Inc./(1)/ 88,678 306,826 Hall Kinion & Associates Inc./(1)/ 36,137 299,576 Titan International Inc. 57,870 295,137 Wolverine Tube Inc./(1)/ 33,805 294,104 Green Mountain Power Corp. 15,922 290,576 Ashworth Inc./(1)/ 36,706 288,142 Fedders Corp./(1)/ 95,802 287,407 Davox Corp./(1)/ 34,439 275,512 ePresence Inc./(1)/ 64,541 273,654 Analysts International Corp. 67,627 270,508 Curative Health Services Inc./(1)/ 25,066 267,454 Enesco Group Inc./(1)/ 38,447 265,284 Osteotech Inc./(1)/ 39,328 262,711 Visual Networks Inc./(1)/ 89,117 262,004 SLI Inc. 93,264 237,823 Steel Technologies Inc. 26,698 227,734 70 2002 iShares Annual Report to Shareholders iShares S&P SmallCap 600 Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value --------------------------------------------------------------------- COMMON STOCKS (continued) --------------------------------------------------------------------- Haggar Corp. 17,789 $ 218,805 Brooktrout Inc.(1) 34,726 213,912 Royal Appliance Manufacturing Co.(1) 38,544 206,210 Mississippi Chemical Corp.(1) 73,142 201,140 Huffy Corp.(1) 29,103 197,900 Meade Instruments Corp.(1) 46,132 165,153 Franklin Covey Co.(1) 55,741 142,697 --------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $1,046,920,460) 1,124,365,427 --------------------------------------------------------------------- Security Shares Value --------------------------------------------------------------------- SHORT TERM INSTRUMENTS - 9.42% --------------------------------------------------------------------- Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 60,638,022 $ 60,638,022 Dreyfus Money Market Fund 22,875,934 22,875,934 Goldman Sachs Financial Square Prime Obligation Fund 1,147,734 1,147,734 Providian Temp Cash Money Market Fund 21,338,972 21,338,972 --------------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $106,000,662) 106,000,662 --------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 109.38% (Cost $1,152,921,122) 1,230,366,089 --------------------------------------------------------------------- Other Assets, Less Liabilities -- (9.38%) (105,554,174) --------------------------------------------------------------------- NET ASSETS -- 100.00% $1,124,811,915 ===================================================================== (1) Non-income earning securities. See notes to financial statements. SCHEDULES OF INVESTMENTS 71 iShares S&P SmallCap 600/BARRA Growth Index Fund Schedule of Investments March 31, 2002 Security Shares Value ------------------------------------------------------------------ COMMON STOCKS - 99.98% ------------------------------------------------------------------ Cephalon Inc.(1) 50,374 $ 3,173,562 AdvancePCS(1) 92,053 2,769,875 Varian Medical Systems Inc.(1) 67,090 2,743,981 Whole Foods Market Inc.(1) 55,537 2,537,486 Alliant Techsystems Inc.(1) 24,769 2,526,190 Michaels Stores Inc.(1) 65,431 2,473,292 XTO Energy Inc. 123,123 2,468,616 NVR Inc.(1) 7,538 2,378,239 OM Group Inc. 27,553 1,992,082 Pier 1 Imports Inc. 93,039 1,915,673 Pharmaceutical Product Development Inc.(1) 51,878 1,807,948 Cheesecake Factory (The)(1) 48,294 1,782,049 Zebra Technologies Corp. "A"(1) 31,421 1,699,562 Medicis Pharmaceutical Corp. "A"(1) 30,477 1,691,474 Cerner Corp.(1) 34,839 1,662,169 O'Reilly Automotive Inc.(1) 52,318 1,651,679 Cymer Inc.(1) 32,893 1,633,466 Renal Care Group Inc.(1) 48,991 1,606,905 Philadelphia Suburban Corp. 67,892 1,595,462 Harman International Industries Inc. 32,207 1,589,415 Roper Industries Inc. 30,932 1,538,558 Ruby Tuesday Inc. 64,217 1,493,045 Accredo Health Inc.(1) 26,025 1,490,452 Varian Semiconductor Equipment Associates Inc.(1) 32,660 1,469,700 Ethan Allen Interiors Inc. 38,560 1,467,594 Hudson United Bancorp 45,977 1,462,528 Fair Isaac and Co. Inc. 23,059 1,461,710 Polaris Industries Inc. 22,882 1,457,583 Performance Food Group Co.(1) 43,537 1,421,918 First Midwest Bancorp Inc. 48,528 1,409,253 SkyWest Inc. 56,503 1,408,620 Axcelis Technologies Inc.(1) 97,051 1,387,829 Mid Atlantic Medical Services Inc.(1) 48,229 1,374,527 Orthodontic Centers of America Inc.(1) 49,734 1,373,156 Chico's FAS Inc.(1) 40,466 1,363,704 FactSet Research Systems Inc. 33,321 1,344,502 Applebee's International Inc. 36,916 1,340,051 Global Payments Inc. 36,396 1,333,913 Scotts Co. (The) "A"(1) 29,104 1,332,381 BARRA Inc.(1) 21,711 1,315,035 ResMed Inc.(1) 32,023 1,285,083 Security Shares Value ------------------------------------------------------------------ CEC Entertainment Inc.(1) 27,755 $ 1,282,281 United Bancshares Inc. 42,917 1,267,339 Cognex Corp.(1) 43,592 1,266,784 Graco Inc. 31,000 1,266,350 AptarGroup Inc. 35,724 1,252,126 NDCHealth Corp. 34,031 1,238,388 Diagnostic Products Corp. 28,164 1,216,685 THQInc.(1) 24,589 1,207,320 Regis Corp. 42,065 1,181,185 Priority Healthcare Corp. "B"(1) 45,189 1,175,366 Jack in the Box Inc.(1) 39,158 1,161,035 Invacare Corp. 30,611 1,150,974 Advanced Energy Industries Inc.(1) 31,678 1,139,141 Techne Corp.(1) 41,288 1,138,310 NBTY Inc.(1) 65,559 1,118,437 Southwest Bancorp of Texas Inc.(1) 32,771 1,092,585 Regeneron Pharmaceuticals Inc.(1) 43,519 1,087,540 Cambrex Corp. 25,648 1,079,781 Corinthian Colleges Inc.(1) 21,261 1,074,744 Argosy Gaming Co.(1) 28,695 1,052,820 Atlantic Coast Airlines Holdings Inc.(1) 43,704 1,048,022 Manhattan Associates Inc.(1) 27,472 1,046,683 Community First Bankshares Inc. 40,078 1,036,417 ITT Educational Services Inc.(1) 23,027 1,036,215 Sonic Corp.(1) 39,781 1,022,770 Photronics Inc.(1) 30,204 1,018,781 Veeco Instruments Inc.(1) 28,637 1,002,295 Province Healthcare Co.(1) 31,518 1,001,327 Heartland Express Inc.(1) 49,878 995,565 Respironics Inc.(1) 30,491 987,908 Elantec Semiconductor Inc.(1) 23,036 985,250 Arbitron Inc.(1) 29,076 982,769 CACI International Inc. "A"(1) 27,634 970,230 Manitowoc Co. Inc. (The) 24,173 954,833 ATMI Inc.(1) 30,208 950,042 Insight Enterprises Inc.(1) 41,535 940,352 Kronos Inc.(1) 19,740 927,385 Too Inc.(1) 31,200 920,088 TrustCo Bank Corp. NY 70,912 915,474 ESS Technology Inc.(1) 43,921 910,922 Fred's Inc. 25,274 909,864 IDEXX Laboratories Inc.(1) 33,463 898,147 Panera Bread Co. "A"(1) 14,086 897,419 Group 1 Automotive Inc.(1) 22,636 883,936 Hilb Rogal & Hamilton Co. 28,142 878,030 72 2002 iSHARES ANNUAL REPORT TO SHAREHOLDERS iShares S&P SmallCap 600/BARRA Growth Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value ------------------------------------------------------------------ COMMON STOCKS (continued) ------------------------------------------------------------------ Winnebago Industries Inc. 20,622 $ 865,918 UGI Corp. 27,315 856,052 Photon Dynamics Inc.(1) 16,813 855,614 Action Performance Companies Inc.(1) 17,355 854,734 Georgia Gulf Corp. 31,572 847,708 Mentor Corp. 23,341 842,143 ADVO Inc.(1) 19,918 841,336 Harland (John H.) Co. 28,899 840,094 Haemonetics Corp.(1) 26,397 837,841 Brady Corp. "A" 22,841 829,128 Philadelphia Consolidated Holding Corp.(1) 20,792 827,522 Armor Holdings Inc.(1) 30,384 823,406 Christopher & Banks Corp.(1) 24,734 812,512 CAL Dive International Inc.(1) 32,449 807,980 American Italian Pasta Co. "A"(1) 17,736 805,214 Pacific Sunwear of California Inc.(1) 32,602 802,009 Technitrol Inc. 33,559 800,047 Fossil Inc.(1) 30,031 798,524 P.F. Chang's China Bistro Inc.(1) 11,958 796,762 CLARCOR Inc. 24,514 784,448 SCP Pool Corp.(1) 24,856 780,478 Aeroflex Inc.(1) 59,679 767,472 Baldor Electric Co. 33,738 762,479 Administaff Inc.(1) 27,455 758,582 Sybron Dental Specialties Inc.(1) 37,740 758,574 Avant! Corp.(1) 37,674 754,610 Landstar System Inc.(1) 8,061 748,061 Tetra Tech Inc.(1) 52,195 745,867 SurModics Inc.(1) 16,834 733,962 Delta & Pine Land Co. 38,312 726,779 Cooper Companies Inc. 15,158 718,489 Vicor Corp.(1) 42,179 712,825 MAXIMUS Inc.(1) 23,104 709,986 Mercury Computer Systems Inc.(1) 21,949 701,490 UCBH Holdings Inc. 19,336 695,709 Rudolph Technologies Inc.(1) 16,058 693,063 Wet Seal Inc. "A"(1) 19,860 692,915 Monaco Coach Corp.(1) 28,442 691,141 DRS Technologies Inc.(1) 16,479 683,714 Harmonic Inc.(1) 58,753 681,535 Forward Air Corp.(1) 21,472 679,589 Hooper Holmes Inc. 64,389 675,441 Security Shares Value ------------------------------------------------------------------ Alpha Industries Inc.(1) 44,002 $ 671,030 Syncor International Corp.(1) 24,613 670,704 Insituform Technologies Inc. "A"(1) 26,339 665,587 Thor Industries Inc. 14,055 664,802 Owens & Minor Inc. 33,719 662,241 INAMED Corp.(1) 20,045 659,480 Impath Inc.(1) 16,048 658,610 Hot Topic Inc.(1) 31,075 649,457 Helix Technology Corp. 25,540 646,673 Progress Software Corp.(1) 35,604 645,857 Metro One Telecommunications Inc.(1) 24,237 614,408 CARBO Ceramics Inc. 14,920 611,123 WMS Industries Inc.(1) 32,040 608,760 CUNO Inc.(1) 16,382 608,100 Pre-Paid Legal Services Inc.(1) 21,231 606,357 Genesco Inc.(1) 21,756 599,813 FileNET Corp.(1) 35,092 599,722 AstroPower Inc.(1) 14,358 599,590 Kopin Corp.(1) 65,186 593,844 Boston Private Financial Holdings Inc. 22,062 590,158 Libbey Inc. 15,296 589,202 Cost Plus Inc.(1) 21,417 586,021 Enzo Biochem Inc.(1) 28,286 573,066 Midway Games Inc.(1) 42,424 571,027 Sterling Bancshares Inc. 42,105 562,102 Frontier Airlines Inc.(1) 29,060 532,379 Power Integrations Inc.(1) 27,768 528,980 EDO Corp. 19,534 527,613 Teledyne Technologies Inc.(1) 31,683 525,304 Dionex Corp.(1) 21,283 517,815 Rogers Corp.(1) 15,580 517,412 OshKosh B'Gosh Inc. "A" 11,963 512,734 Netegrity Inc.(1) 33,682 498,157 Itron Inc.(1) 16,203 482,039 Vital Sign Inc. 12,899 475,715 General Communication Inc. "A"(1) 54,426 473,506 WD-40 Co. 15,649 471,348 Noven Pharmaceuticals Inc.(1) 22,406 464,700 Microsemi Corp.(1) 28,364 462,900 United Natural Foods Inc.(1) 18,539 461,806 Advanced Marketing Services Inc. 19,084 458,016 Mobile Mini Inc.(1) 14,070 452,773 Remington Oil & Gas Corp.(1) 22,368 450,939 Intermagnetics General Corp.(1) 16,326 444,884 MICROS Systems Inc.(1) 17,474 444,713 SCHEDULES OF INVESTMENTS 73 iShares S&P SmallCap 600/BARRA Growth Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value ------------------------------------------------------------------ COMMON STOCKS (continued) ------------------------------------------------------------------ Inter-Tel Inc. 24,010 $ 443,465 Roxio Inc.(1) 19,131 434,082 Coca-Cola Bottling Co. Consolidated 8,733 427,917 Elcor Corp. 19,272 427,838 Dendrite International Inc.(1) 39,365 421,205 Gymboree Corp.(1) 28,506 420,463 Lance Inc. 28,943 413,885 Trimble Navigation Ltd.(1) 24,810 412,590 ArthroCare Corp.(1) 22,712 409,043 NYFIX Inc.(1) 27,318 408,677 On Assignment Inc.(1) 22,315 399,439 CryoLife Inc.(1) 18,815 393,233 ANSYS Inc.(1) 14,371 389,454 K-Swiss Inc. "A" 9,213 386,762 Kroll Inc.(1) 22,461 373,976 Read-Rite Corp.(1) 119,984 368,351 Sierra Health Services Inc.(1) 27,720 362,578 Avid Technology Inc.(1) 25,978 361,354 Biosite Inc.(1) 14,528 359,568 Concord Communications Inc.(1) 16,653 352,211 Keithley Instruments Inc. 15,708 345,105 Apogee Enterprises Inc. 28,206 344,113 MGI Pharma Inc.(1) 23,995 330,171 Planar Systems Inc.(1) 12,561 329,726 Catapult Communications Corp.(1) 13,017 328,549 Tollgrade Communications Inc.(1) 13,388 328,140 StarTek Inc.(1) 14,013 324,401 Hancock Fabrics Inc. 17,949 323,979 Prima Energy Corp.(1) 12,637 314,661 Ultimate Electronics Inc.(1) 11,046 309,840 SPSS Inc.(1) 16,627 291,638 Bio-Technology General Corp.(1) 58,071 285,129 MRO Software Inc.(1) 22,668 281,990 Lindsay Manufacturing Co. 11,558 281,437 Bei Technologies Inc. 14,359 270,667 MemberWorks Inc.(1) 14,213 269,052 Supertex Inc.(1) 12,449 264,666 Radiant Systems Inc.(1) 27,252 246,631 Advanced Tissue Sciences Inc.(1) 72,951 229,431 InterVoice-Brite Inc.(1) 33,607 215,085 Nature's Sunshine Products Inc. 16,211 181,725 X-Rite Inc. 21,226 169,808 Security Shares Value ------------------------------------------------------------------ Factory 2-U Stores Inc.(1) 12,744 $ 164,398 MapInfo Corp.(1) 14,897 148,970 Cygnus Inc.(1) 37,017 144,736 Valence Technology Inc.(1) 45,355 138,333 ZixIt Corp.(1) 17,465 113,872 Visual Networks Inc.(1) 31,756 93,363 ------------------------------------------------------------------ TOTAL COMMON STOCKS (Cost: $178,057,132) 191,449,109 ------------------------------------------------------------------ SHORT TERM INSTRUMENTS - 8.67% ------------------------------------------------------------------ Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 9,571,224 9,571,224 Dreyfus Money Market Fund 3,087,022 3,087,022 Goldman Sachs Financial Square Prime Obligation Fund 831,327 831,327 Providian Temp Cash Money Market Fund 3,106,500 3,106,500 ------------------------------------------------------------------ TOTAL SHORT TERM INSTRUMENTS (Cost: $16,596,073) 16,596,073 ------------------------------------------------------------------ TOTAL INVESTMENTS IN SECURITIES -- 108.65% (Cost $194,653,205) 208,045,182 ------------------------------------------------------------------ Other Assets, Less Liabilities -- (8.65%) (16,569,684) ------------------------------------------------------------------ NET ASSETS -- 100.00% $191,475,498 ================================================================== (1) Non-income earning securities. See notes to financial statements. 74 SCHEDULES OF INVESTMENTS iShares S&P SmallCap 600/BARRA Value Index Fund Schedule of Investments March 31, 2002 Security Shares Value ------------------------------------------------------------------- COMMON STOCKS - 99.95% ------------------------------------------------------------------- Constellation Brands Inc.(1) 94,885 $ 5,214,880 Cullen/Frost Bankers Inc. 111,358 3,994,411 Toll Brothers Inc.(1) 76,080 3,792,588 Coventry Health Care Inc.(1) 142,048 3,693,248 Pogo Producing Co. 116,257 3,685,347 La-Z-Boy Inc. 131,944 3,621,863 Raymond James Financial Inc. 105,274 3,603,529 Newfield Exploration Co.(1) 95,328 3,526,183 Washington Federal Inc. 137,441 3,290,338 First American Corp. 148,659 3,163,464 Adaptec Inc.(1) 229,617 3,069,979 Zale Corp.(1) 75,597 3,069,238 Timken Co. (The) 129,686 2,994,450 RGS Energy Group Inc. 75,080 2,946,890 Werner Enterprises Inc. 137,317 2,876,791 Whitney Holding Corp. 57,215 2,852,740 United Stationers Inc.(1) 73,345 2,794,445 Downey Financial Corp. 61,126 2,787,346 Jeffries Group Inc. 56,875 2,741,375 Massey Energy Co. 162,049 2,738,628 AnnTaylor Stores Corp.(1) 63,251 2,733,708 Commercial Federal Corp. 100,492 2,703,235 Staten Island Bancorp Inc. 136,833 2,692,873 Linens 'N Things Inc.(1) 87,993 2,686,426 Ryland Group Inc. 28,702 2,588,920 Mueller Industries Inc.(1) 72,520 2,537,475 Piedmont Natural Gas Co. 70,508 2,510,085 M.D.C. Holdings Inc. 57,841 2,498,731 PolyOne Corp. 203,051 2,477,222 Corn Products International Inc. 76,550 2,464,910 Idex Corp. 66,514 2,461,018 Florida Rock Industries Inc. 61,305 2,442,391 Shurgard Storage Centers Inc. "A" 70,496 2,389,814 Shaw Group Inc. (The)(1) 86,803 2,387,083 Anixter International Inc.(1) 79,834 2,365,481 Great Atlantic & Pacific Tea Co.(1) 83,112 2,317,163 Tom Brown Inc.(1) 84,746 2,313,566 Kulicke & Soffa Industries Inc.(1) 106,528 2,216,848 Stone Energy Corp.(1) 56,799 2,200,961 Electro Scientific Industries Inc.(1) 59,187 2,169,204 Pediatrix Medical Group Inc.(1) 52,993 2,159,995 Briggs & Stratton Corp. 46,813 2,153,398 Fleming Companies Inc. 96,119 2,153,066 Security Shares Value ------------------------------------------------------------------- Men's Wearhouse Inc. (The)(1) 91,769 $ 2,142,806 Seacor Smit Inc.(1) 43,486 2,130,814 Black Box Corp.(1) 43,768 2,119,247 Coherent Inc.(1) 62,109 2,105,495 Atmos Energy Corp. 89,007 2,100,565 Susquehanna Bancshares Inc. 85,167 2,084,888 Southern Union Co.(1) 113,159 2,073,073 Oshkosh Truck Corp. 36,289 2,064,844 Kansas City Southern Industries Inc. 127,732 2,036,048 USFreightways Corp. 57,234 2,028,373 Chittenden Corp. 69,468 2,024,992 DuPont Photomasks Inc.(1) 38,721 2,013,492 Vintage Petroleum Inc. 136,655 2,008,829 Waste Connections Inc.(1) 59,361 1,989,187 Hughes Supply Inc. 51,010 1,987,350 Brooks Automation Inc.(1) 43,226 1,964,189 UICI(1) 103,219 1,956,000 ABM Industries Inc. 52,994 1,944,880 PRG-Schultz International Inc.(1) 137,713 1,934,868 Hyperion Solutions Corp.(1) 71,164 1,922,140 Reliance Steel & Aluminum Co. 68,455 1,888,673 Texas Industries Inc. 45,299 1,866,319 EMCOR Group Inc.(1) 32,088 1,861,104 Pep Boys-Manny, Moe & Jack Inc. 111,444 1,854,428 Burlington Coat Factory Warehouse Corp. 96,200 1,851,850 South Financial Group Inc. (The) 89,490 1,821,122 US Oncology Inc.(1) 205,392 1,809,504 UIL Holdings Corp. 31,023 1,802,436 Energen Corp. 67,728 1,791,406 Standard-Pacific Corp. 63,642 1,788,340 Central Parking Corp. 77,478 1,781,219 Ralcorp Holdings Inc.(1) 64,861 1,764,219 New Jersey Resources Corp. 58,206 1,760,149 Southwest Gas Corp. 70,186 1,754,650 Exar Corp.(1) 84,560 1,736,862 Aztar Corp.(1) 79,212 1,734,743 Delphi Financial Group Inc. "A" 44,168 1,731,827 MAF Bancorp Inc. 48,701 1,716,710 Cabot Oil & Gas Corp. "A" 69,180 1,712,897 El Paso Electric Co.(1) 109,186 1,708,761 American Management Systems Inc.(1) 90,294 1,686,782 Woodward Governor Co. 24,514 1,686,563 CH Energy Group Inc. 35,465 1,682,814 SCHEDULES OF INVESTMENTS 75 iShares S&P SmallCap 600/BARRA Value Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value ------------------------------------------------------------------- COMMON STOCKS (continued) ------------------------------------------------------------------- Standard Register Co. (The) 59,843 $ 1,682,785 Evergreen Resources Inc.(1) 40,323 1,681,469 Kilroy Realty Corp. 59,484 1,678,044 G&K Services Inc. "A" 44,803 1,669,360 First Bancorp. 57,552 1,663,253 Hain Celestial Group Inc.(1) 73,393 1,632,994 Steel Dynamics Inc.(1) 99,182 1,627,577 Lennox International Inc. 122,632 1,621,195 Wolverine World Wide Inc. 89,977 1,615,087 eFunds Corp.(1) 100,458 1,612,351 Simpson Manufacturing Co. Inc.(1) 26,281 1,607,083 Take-Two Interactive Software Inc.(1) 79,729 1,602,553 Avista Corp. 103,086 1,600,926 Ryan's Family Steak Houses Inc.(1) 66,088 1,586,112 Stillwater Mining Co.(1) 83,998 1,583,362 Toro Co. 26,564 1,583,214 Aspen Technology Inc.(1) 68,940 1,578,726 Colonial Properties Trust 45,208 1,557,416 Kirby Corp.(1) 51,950 1,553,305 Roadway Corp. 41,970 1,552,890 Tredegar Corp. 82,637 1,545,312 Northwest Natural Gas Co. 54,602 1,529,402 Paxar Corp.(1) 90,709 1,528,447 IHOP Corp.(1) 44,844 1,511,691 MacDermid Inc. 69,646 1,508,532 Oceaneering International Inc.(1) 51,248 1,486,192 East West Bancorp Inc. 50,732 1,485,940 UniSource Energy Corp. 72,546 1,484,291 Acuity Brands Inc. 89,524 1,479,832 Patina Oil & Gas Corp. 46,938 1,479,486 Selective Insurance Group Inc. 55,152 1,472,558 Arkansas Best Corp.(1) 52,927 1,470,841 GenCorp. Inc. 93,172 1,464,664 Tower Automotive Inc.(1) 104,145 1,456,989 Curtiss Wright Corp. 21,864 1,453,956 Casey's General Store Inc. 107,387 1,449,724 Presidential Life Corp. 63,523 1,445,148 Unit Corp.(1) 77,996 1,426,547 Yellow Corp.(1) 53,741 1,418,225 Russ Berrie & Co. Inc. 43,579 1,403,244 Spherion Corp.(1) 126,401 1,396,731 LandAmerica Financial Group Inc. 40,317 1,396,178 American Financial Holdings Inc. 52,044 1,384,891 Security Shares Value ------------------------------------------------------------------- Bally Total Fitness Holding Corp.(1) 63,008 $ 1,383,026 C-COR.net Corp.(1) 76,722 1,380,996 Atwood Oceanics Inc.(1) 29,969 1,375,577 CONMED Corp.(1) 54,597 1,364,925 Information Holdings Inc.(1) 47,145 1,357,776 Regal-Beloit Corp. 52,979 1,353,613 JLG Industries Inc. 91,391 1,352,587 Triumph Group Inc.(1) 34,268 1,343,306 Verity Inc.(1) 75,786 1,339,896 Provident Bankshares Corp. 55,347 1,328,328 Alpharma Inc. "A" 92,631 1,324,623 Footstar Inc.(1) 43,149 1,315,613 Smith (A.O.) Corp. "B" 51,574 1,312,558 NorthWestern Corp. 59,373 1,306,206 St. Mary Land & Exploration Co. 60,061 1,303,924 Sunrise Assisted Living Inc.(1) 47,814 1,303,410 HNC Software Inc.(1) 76,543 1,285,922 Cable Design Technologies Corp.(1) 95,638 1,276,767 Prime Hospitality Corp.(1) 97,009 1,275,668 Cohu Inc. 44,602 1,270,711 Belden Inc. 53,260 1,269,186 Viasys Healthcare Inc.(1) 56,326 1,266,772 Plains Resource Inc.(1) 50,549 1,257,659 URS Corp.(1) 39,555 1,253,894 Lone Star Technologies Inc.(1) 54,642 1,246,384 Triarc Companies Inc.(1) 44,146 1,227,259 Park Electrochemical Corp. 42,121 1,221,509 Ionics Inc.(1) 37,856 1,213,663 Cato Corp. "A" 54,114 1,205,660 SPS Technologies Inc.(1) 28,396 1,203,139 CIBER Inc.(1) 131,159 1,200,105 Kellwood Co. 49,310 1,197,740 Commercial Metals Co. 28,454 1,195,068 Griffon Corp.(1) 71,271 1,193,789 Benchmark Electronics Inc.(1) 42,549 1,191,372 Analogic Corp. 28,625 1,190,514 C&D Technologies Inc. 56,568 1,189,059 Financial Federal Corp.(1) 36,068 1,183,391 Hutchinson Technology Inc.(1) 54,796 1,181,950 Rare Hospitality International Inc.(1) 46,471 1,181,293 Dress Barn Inc.(1) 39,650 1,174,036 Dime Community Bancshares 37,335 1,149,918 Wellman Inc. 69,018 1,135,346 Veritas DGC Inc.(1) 67,098 1,134,627 ShopKo Stores Inc.(1) 62,291 1,127,467 76 2002 iSHARES ANNUAL REPORT TO SHAREHOLDERS iShares S&P SmallCap 600/BARRA Value Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value ------------------------------------------------------------------- COMMON STOCKS (continued) ------------------------------------------------------------------- Zenith National Insurance Corp. 38,037 $ 1,110,680 SOURCECORP Inc.(1) 37,620 1,109,414 RLI Corp. 21,323 1,102,399 Landry's Restaurants Inc. 47,991 1,101,873 Quiksilver Inc.(1) 50,338 1,101,395 Checkpoint Systems Inc.(1) 68,654 1,095,031 Nautica Enterprises Inc.(1) 71,866 1,089,489 Lone Star Steakhouse & Saloon Inc. 52,146 1,089,330 Anchor BanCorp Wisconsin Inc. 54,012 1,081,860 Actel Corp.(1) 52,019 1,077,313 RehabCare Group Inc.(1) 37,544 1,070,004 Arch Chemicals Inc. 48,107 1,060,759 Swift Energy Co.(1) 53,718 1,058,245 Milacron Inc. 72,517 1,058,023 School Specialty Inc.(1) 39,012 1,042,401 Offshore Logistics Inc.(1) 48,296 1,040,779 Quanex Corp. 29,317 1,040,754 Russell Corp. 69,372 1,033,643 Watsco Inc. 57,746 1,030,766 Universal Forest Products Inc. 42,850 1,023,687 Marcus Corp. 63,411 1,022,185 Arctic Cat Inc. 50,699 1,021,585 Alliance Semiconductor Corp.(1) 88,382 1,018,161 CTS Corp. 62,594 1,017,152 Input/Output Inc.(1) 111,224 1,012,138 Ultratech Stepper Inc.(1) 48,652 1,011,962 Bowne & Co. Inc. 71,741 1,009,396 Aaron Rents Inc. "B" 43,269 988,697 Pegasus Solutions Inc.(1) 53,327 986,550 Pinnacle Systems Inc.(1) 123,703 985,913 FirstFed Financial Corp.(1) 37,523 981,226 Barnes Group Inc. 39,936 978,432 International Multifoods Corp.(1) 41,017 974,564 Pioneer-Standard Electronics Inc. 68,791 973,393 DMC Stratex Networks Inc.(1) 178,394 970,463 Methode Electronics Inc. "A" 77,871 969,494 Watts Industries Inc. "A" 57,433 964,874 Thomas Industries Inc. 32,937 963,407 Dril-Quip Inc.(1) 37,524 962,491 Laclede Group Inc. (The) 40,869 952,248 CDI Corp.(1) 41,419 950,566 Valmont Industries Inc. 53,046 949,523 Riggs National Corp. 61,763 948,062 Security Shares Value ------------------------------------------------------------------- Systems & Computer Technology Corp.(1) 71,795 $ 946,976 Jakks Pacific Inc.(1) 41,380 941,395 Datascope Corp. 32,007 939,405 Fremont General Corp. 153,304 935,154 Esterline Technologies Corp.(1) 44,900 915,960 Therma-Wave Inc.(1) 62,475 902,139 Stein Mart Inc.(1) 89,250 893,393 Chesapeake Corp. 32,875 892,556 Tetra Technologies Inc.(1) 30,473 885,241 O'Charley's Inc.(1) 40,316 868,810 PAREXEL International Corp.(1) 54,129 868,229 Steak n Shake Company (The)(1) 60,483 849,786 Phillips-Van Heusen Corp. 59,933 845,655 GBC Bancorp 25,049 837,889 First Republic Bank(1) 29,500 837,800 Champion Enterprises Inc.(1) 104,439 835,512 NUI Corp. 33,550 834,724 Gardner Denver Inc.(1) 33,861 829,594 Kaman Corp. "A" 48,496 822,007 Fleetwood Enterprises Inc. 75,751 818,111 Heidrick & Struggles International Inc.(1) 39,082 812,906 ChemFirst Inc. 30,345 811,729 Mesa Air Group Inc.(1) 71,603 801,954 Standard Microsystems Corp.(1) 34,856 801,688 Applied Industrial Technologies Inc. 41,600 800,800 Schweitzer-Mauduit International Inc. 32,159 799,151 Chemed Corp. 21,353 797,535 Viasat Inc.(1) 56,089 786,368 Deltic Timber Corp. 25,720 778,030 Sola International Inc.(1) 52,844 777,864 Buckeye Technologies Inc.(1) 75,332 775,920 Pericom Semiconductor Corp.(1) 54,821 775,169 Electroglas Inc.(1) 45,698 772,296 Artesyn Technologies Inc.(1) 82,918 771,967 Stewart Information Services Corp.(1) 38,565 771,300 American States Water Co. 21,804 768,591 BE Aerospace Inc.(1) 76,317 757,828 SWS Group Inc. 37,347 756,277 Sturm Ruger & Co. Inc. 58,298 752,044 Myers Industries Inc. 51,726 750,027 Stride Rite Corp. 90,909 749,999 Astec Industries Inc.(1) 42,500 746,725 Phoenix Technologies Ltd.(1) 54,671 746,259 SCHEDULES OF INVESTMENTS 77 iShares S&P SmallCap 600/BARRA Value Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value ------------------------------------------------------------------- COMMON STOCKS (continued) ------------------------------------------------------------------- Brown Shoe Co. Inc. 37,857 $ 736,697 Century Aluminum Co. 44,450 722,312 Trenwick Group Ltd. 79,908 716,775 OMNOVA Solutions Inc. 85,838 712,455 New England Business Service Inc. 27,711 711,341 Robbins & Myers Inc. 25,637 701,172 J&J Snack Foods Corp.(1) 18,740 700,501 Interface Inc. "A" 110,179 699,637 Nash Finch Co. 25,413 692,504 Southwestern Energy Co.(1) 54,634 687,296 Three-Five Systems Inc.(1) 46,321 686,477 Labor Ready Inc.(1) 87,798 684,824 RadiSys Corp.(1) 37,636 677,824 Imagistics International Inc.(1) 42,349 673,349 DIMON Inc. 96,758 667,630 PolyMedica Corp.(1) 26,171 666,052 TBC Corp.(1) 45,449 659,011 Jo-Ann Stores Inc.(1) 40,229 649,296 Stratos Lightwave Inc.(1) 145,875 644,768 Standex International Corp. 26,261 641,294 Theragenics Corp.(1) 64,295 636,521 Hologic Inc.(1) 40,957 632,786 Caraustar Industries Inc. 60,341 630,563 AAR Corp. 58,168 626,469 Volt Information Sciences Inc.(1) 32,978 615,040 Lawson Products Inc. 20,929 603,174 Ryerson Tull Inc. 53,740 588,453 Information Resources Inc.(1) 63,508 583,639 Key Productions Co. Inc.(1) 30,250 573,237 Bel Fuse Inc. "B" 23,301 569,942 Magnetek Inc.(1) 48,655 569,264 Rainbow Technologies Inc.(1) 56,560 568,994 Consolidated Graphics Inc.(1) 28,590 568,941 Skyline Corp. 18,208 565,358 Coachmen Industries Inc. 34,525 562,757 Arqule Inc.(1) 44,034 556,149 Goody's Family Clothing Inc.(1) 70,355 552,287 Nuevo Energy Co.(1) 36,873 549,408 Midwest Express Holdings Inc.(1) 29,968 548,115 Concord Camera Corp.(1) 59,428 535,446 4Kids Entertainment Inc.(1) 26,411 526,107 Penton Media Inc. 69,242 522,777 Bassett Furniture Industries Inc. 25,448 521,684 Security Shares Value ------------------------------------------------------------------- AXT Inc.(1) 48,489 $ 518,832 RTI International Metals Inc.(1) 44,919 518,814 Cascade Natural Gas Corp. 23,893 507,009 Seitel Inc.(1) 54,324 497,065 Pope & Talbot Inc. 33,862 496,417 Wabash National Corp. 49,872 493,733 Lydall Inc.(1) 34,525 489,565 Cleveland-Cliffs Inc. 22,041 484,902 Salton Inc.(1) 23,781 472,053 Cash America International Inc. 53,471 470,545 Quaker Chemical Corp. 19,810 462,564 Midas Inc.(1) 32,305 460,669 Brush Engineered Materials Inc. 36,048 457,810 Central Vermont Public Service Corp. 25,018 446,821 Pinnacle Entertainment Inc.(1) 55,116 444,235 Aspect Communications Corp.(1) 112,500 439,875 Insurance Auto Auctions Inc.(1) 26,260 439,592 Allen Telecom Inc.(1) 65,674 438,702 Applica Inc.(1) 50,400 433,440 Oxford Industries Inc. 16,309 430,558 National Presto Industries Inc. 14,826 426,396 Carreker Corp.(1) 47,447 413,738 Building Materials Holdings Corp.(1) 28,100 404,640 SBS Technologies Inc.(1) 31,624 404,155 QRS Corp.(1) 33,846 399,383 Standard Motor Products Inc. 26,980 393,908 Department 56 Inc.(1) 27,916 390,824 SCM Microsystems Inc.(1) 33,225 388,400 Intermet Corp. 55,210 387,574 Bell Microproducts Inc.(1) 36,692 381,597 Nelson (Thomas) Inc. 31,148 378,448 Butler Manufacturing Co. 13,611 365,455 PC-Tel Inc.(1) 42,177 364,831 Audiovox Corp. "A"(1) 49,617 356,250 Gerber Scientific Inc.(1) 47,823 351,499 SCPIE Holdings Inc. 20,234 343,573 Material Sciences Corp.(1) 31,931 333,679 Castle (A.M.) & Co. 30,544 331,097 Luby's Inc.(1) 48,576 330,317 Flow International Corp.(1) 33,039 323,121 Boston Communications Group Inc.(1) 37,200 320,292 Aware Inc.(1) 49,099 311,779 Symmetricom Inc.(1) 48,336 299,200 Spacelabs Medical Inc.(1) 21,149 297,355 Angelica Corp. 18,690 289,508 78 2002 iSHARES ANNUAL REPORT TO SHAREHOLDERS iShares S&P SmallCap 600/BARRA Value Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value ------------------------------------------------------------------- COMMON STOCKS (continued) ------------------------------------------------------------------- IMCO Recycling Inc.(1) 32,003 $ 284,827 CPI Corp. 17,198 282,907 Commonwealth Industries Inc. 35,691 264,113 Penford Corp. 16,309 262,575 Computer Task Group Inc.(1) 45,236 261,464 Digi International Inc.(1) 47,324 257,916 K2 Inc.(1) 38,912 253,706 Cross (A.T.) Co.(1) 36,442 251,450 Network Equipment Technologies Inc.(1) 47,967 247,030 Captaris Inc.(1) 68,836 238,173 Hall Kinion & Associates Inc.(1) 28,005 232,161 Titan International Inc. 44,873 228,852 Fedders Corp.(1) 75,967 227,901 Wolverine Tube Inc.(1) 26,172 227,696 Green Mountain Power Corp. 12,354 225,460 Ashworth Inc.(1) 28,474 223,521 Davox Corp.(1) 26,778 214,224 ePresence Inc.(1) 50,075 212,318 Analysts International Corp. 52,463 209,852 Curative Health Services Inc.(1) 19,654 209,708 Enesco Group Inc.(1) 29,797 205,599 Osteotech Inc.(1) 30,532 203,954 SLI Inc. 72,263 184,271 Steel Technologies Inc. 20,674 176,349 Haggar Corp. 13,739 168,990 Brooktrout Inc.(1) 26,883 165,599 Royal Appliance Manufacturing Co.(1) 29,875 159,831 Mississippi Chemical Corp.(1) 56,609 155,675 Huffy Corp.(1) 22,504 153,027 Meade Instruments Corp.(1) 35,675 127,717 Franklin Covey Co.(1) 43,093 110,318 ------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $416,980,833) 457,370,339 ------------------------------------------------------------------- Security Shares Value ------------------------------------------------------------------- SHORT TERM INSTRUMENTS - 8.81% ------------------------------------------------------------------- Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 23,695,782 $ 23,695,782 Dreyfus Money Market Fund 8,149,358 8,149,358 Goldman Sachs Financial Square Prime Obligation Fund 960,296 960,296 Providian Temp Cash Money Market Fund 7,539,333 7,539,333 ------------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $40,344,769) 40,344,769 ------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 108.76% (Cost $457,325,602) 497,715,108 ------------------------------------------------------------------- Other Assets, Less Liabilities -- (8.76%) (40,104,816) ------------------------------------------------------------------- NET ASSETS -- 100.00% $457,610,292 =================================================================== (1) Non-income earning securities. See notes to financial statements. SCHEDULES OF INVESTMENTS 79 iShares S&P Global 100 Index Fund Schedule of Investments March 31, 2002 Security Shares Value ----------------------------------------------------------------- COMMON STOCKS AND RIGHTS - 99.63% ----------------------------------------------------------------- AUSTRALIA - 0.46% ----------------------------------------------------------------- Broken Hill Proprietary Co. Ltd. 24,523 $ 149,202 News Corp. Ltd. 8,720 61,059 ----------------------------------------------------------------- 210,261 ----------------------------------------------------------------- BELGIUM - 0.29% ----------------------------------------------------------------- Fortis Group 6,016 133,834 ----------------------------------------------------------------- 133,834 ----------------------------------------------------------------- CANADA - 0.46% ----------------------------------------------------------------- Alcan Inc. 2,700 107,001 Nortel Networks Corp. 22,400 100,576 ----------------------------------------------------------------- 207,577 ----------------------------------------------------------------- FINLAND - 1.46% ----------------------------------------------------------------- Nokia OYJ ADR 32,240 668,658 ----------------------------------------------------------------- 668,658 ----------------------------------------------------------------- FRANCE - 5.05% ----------------------------------------------------------------- Alcatel SA "A" 8,816 125,826 Aventis SA 4,672 322,809 AXA AG 8,960 202,219 Carrefour Supermarche SA 4,272 201,253 France Telecom SA 3,136 96,083 L'Oreal SA 2,240 165,617 Suez SA 5,024 142,095 TotalFinaElf SA 4,976 768,370 Vivendi Universal SA 7,264 282,509 ----------------------------------------------------------------- 2,306,781 ----------------------------------------------------------------- GERMANY - 3.98% ----------------------------------------------------------------- Allianz AG 1,264 301,042 BASF AG 4,800 195,097 Bayer AG 4,800 162,685 DaimlerChrysler AG 4,800 219,008 Deutsche Bank AG 4,704 303,433 Deutsche Telekom AG 14,912 224,670 ----------------------------------------------------------------- Security Shares Value ----------------------------------------------------------------- GERMANY (continued) ----------------------------------------------------------------- Siemens AG 4,928 $ 326,739 Volkswagen AG 1,600 84,393 ----------------------------------------------------------------- 1,817,067 ----------------------------------------------------------------- ITALY - 0.48% ----------------------------------------------------------------- Assicurazioni Generali SpA 8,000 197,442 Fiat SpA 1,600 22,264 ----------------------------------------------------------------- 219,706 ----------------------------------------------------------------- JAPAN - 4.29% ----------------------------------------------------------------- Canon Inc. 6,400 237,583 Fuji Photo Film Co. Ltd. 3,200 100,683 Hitachi Ltd. 22,400 163,773 Honda Motor Co. Ltd. 4,800 201,728 Matsushita Electric Industrial Co. Ltd. 11,200 136,562 Mitsubishi Tokyo Financial Group Inc. 16 97,785 NEC Corp. 11,200 93,295 Sony Corp. 6,400 332,712 Toshiba Corp. 20,800 87,102 Toyota Motor Corp. 17,600 507,278 ----------------------------------------------------------------- 1,958,501 ----------------------------------------------------------------- MEXICO - 0.14% ----------------------------------------------------------------- America Movil SA de CV ADR 3,200 63,552 ----------------------------------------------------------------- 63,552 ----------------------------------------------------------------- NETHERLANDS - 3.32% ----------------------------------------------------------------- ING Groep NV 10,368 282,207 Koninklijke (Royal) Philips Electronics NV - NY Shares 9,600 290,112 Royal Dutch Petroleum Co. - NY Shares 14,000 760,480 Unilever NV - NY Shares 3,200 181,760 ----------------------------------------------------------------- 1,514,559 ----------------------------------------------------------------- SPAIN - 2.01% ----------------------------------------------------------------- Banco Bilbao Vizcaya SA 22,208 264,460 Banco Santander Central Hispano SA 31,520 263,983 80 2002 iSHARES ANNUAL REPORT TO SHAREHOLDERS iShares S&P Global 100 Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value ----------------------------------------------------------------- COMMON STOCKS AND RIGHTS (continued) ----------------------------------------------------------------- SPAIN (continued) ----------------------------------------------------------------- Repsol YPF SA 6,288 $ 79,268 Telefonica SA(1) 27,009 302,782 Telefonica SA - Bonus Rights(1) 27,009 6,126 ----------------------------------------------------------------- 916,619 ----------------------------------------------------------------- SWEDEN - 0.48% ----------------------------------------------------------------- Telefonaktiebolaget LM Ericsson AB ADR 52,800 220,704 ----------------------------------------------------------------- 220,704 ----------------------------------------------------------------- SWITZERLAND - 4.39% ----------------------------------------------------------------- ABB Ltd.(1) 8,000 63,503 Nestle S.A. 2,592 576,411 Novartis AG 20,160 792,951 Swiss Re 1,600 147,223 UBS AG - Registered(1) 8,640 425,373 ----------------------------------------------------------------- 2,005,461 ----------------------------------------------------------------- UNITED KINGDOM - 11.74% ----------------------------------------------------------------- AstraZeneca PLC 12,432 617,307 Barclays PLC 11,856 366,359 BP PLC 156,800 1,395,520 Diageo PLC 22,544 294,702 GlaxoSmithKline PLC 43,006 1,012,916 HSBC Holdings PLC 64,320 743,719 Reuters Group PLC 10,192 78,589 Vodafone Group PLC 461,504 852,675 ----------------------------------------------------------------- 5,361,787 ----------------------------------------------------------------- UNITED STATES - 61.08% ----------------------------------------------------------------- American International Group Inc. 17,376 1,253,505 AOL Time Warner Inc.(1) 30,384 718,582 AT&T Corp. 24,272 381,070 Bristol - Myers Squibb Co. 13,792 558,438 ChevronTexaco Corp. 6,752 609,503 ----------------------------------------------------------------- Security Shares Value ----------------------------------------------------------------- UNITED STATES (continued) ----------------------------------------------------------------- Citigroup Inc. 34,672 $ 1,716,957 Coca - Cola Co. (The) 16,000 836,160 Colgate - Palmolive Co. 4,048 231,343 Compaq Computer Corp. 12,800 133,760 Dell Computer Corp.(1) 16,000 417,760 Dow Chemical Co. (The) 6,400 209,408 Du Pont (E.I.) de Nemours & Co. 7,008 330,427 EMC Corp.(1) 15,424 183,854 Exxon Mobil Corp. 46,992 2,059,659 Ford Motor Company 12,800 211,072 General Electric Co. 68,496 2,565,175 General Motors Corp. "A" 3,200 193,440 Gillette Co. (The) 6,400 217,664 Hewlett - Packard Co. 11,376 204,085 Intel Corp. 44,208 1,344,365 International Business Machines Corp. 11,952 1,243,008 Johnson & Johnson 20,112 1,306,274 JP Morgan Chase & Co. 13,312 474,573 Kimberly - Clark Corp. 3,808 246,187 Lucent Technologies Inc.(1) 23,616 111,704 McDonald's Corp. 9,600 266,400 Merck & Co. Inc. 15,792 909,303 Microsoft Corp.(1) 32,112 1,936,675 Morgan Stanley Dean Witter & Co. 7,792 446,560 PepsiCo Inc. 11,072 570,208 Pfizer Inc. 43,200 1,716,768 Philip Morris Companies Inc. 15,056 793,000 Procter & Gamble Co. 8,928 804,324 Texas Instruments Inc. 12,176 403,026 3M Co. 2,784 320,188 Tyco International Ltd. 12,784 413,179 United Technologies Corp. 3,200 237,440 Wal - Mart Stores Inc. 19,200 1,176,768 WorldCom Corp.(1) 20,800 140,192 ----------------------------------------------------------------- 27,892,004 ----------------------------------------------------------------- TOTAL COMMON STOCKS AND RIGHTS (Cost: $57,398,841) 45,497,071 ----------------------------------------------------------------- SCHEDULES OF INVESTMENTS 81 iShares S&P Global 100 Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value ----------------------------------------------------------------- SHORT TERM INSTRUMENTS - 4.99% ----------------------------------------------------------------- Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 1,349,765 $ 1,349,765 Dreyfus Money Market Fund 394,990 394,990 Goldman Sachs Financial Square Prime Obligation Fund 123,155 123,155 Providian Temp Cash Money Market Fund 410,790 410,790 ----------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $2,278,700) 2,278,700 ----------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 104.62% (Cost $59,677,541) 47,775,771 ----------------------------------------------------------------- Other Assets, Less Liabilities -- (4.62%) (2,109,428) ----------------------------------------------------------------- NET ASSETS -- 100.00% $45,666,343 ================================================================= (1) Non-income earning securities. See notes to financial statements. 82 2002 iSHARES ANNUAL REPORT TO SHAREHOLDERS iShares S&P Global Energy Sector Index Fund Schedule of Investments March 31, 2002 Security Shares Value --------------------------------------------------------------- COMMON STOCKS - 98.86% --------------------------------------------------------------- AUSTRALIA - 0.63% --------------------------------------------------------------- Woodside Petroleum Ltd. 13,116 $ 102,831 --------------------------------------------------------------- 102,831 --------------------------------------------------------------- CANADA - 6.92% --------------------------------------------------------------- Alberta Energy Co. Ltd. 3,660 159,463 Canadian Natural Resources Ltd. 2,310 74,712 Husky Energy Inc. 2,964 31,769 Imperial Oil Ltd. 5,850 173,990 Nexen Inc. 2,112 50,967 Pancanadian Energy Corp. 6,504 193,400 Petro - Canada 5,298 136,352 Suncor Energy Inc. 6,042 217,760 Talisman Energy Inc. 2,268 94,464 --------------------------------------------------------------- 1,132,877 --------------------------------------------------------------- CHINA - 0.44% --------------------------------------------------------------- PetroChina Co. Ltd. ADR 3,468 72,551 --------------------------------------------------------------- 72,551 --------------------------------------------------------------- FRANCE - 7.21% --------------------------------------------------------------- TotalFinaElf SA 7,650 1,181,276 --------------------------------------------------------------- 1,181,276 --------------------------------------------------------------- ITALY - 4.45% --------------------------------------------------------------- ENI SpA 49,776 729,537 --------------------------------------------------------------- 729,537 --------------------------------------------------------------- JAPAN - 1.71% --------------------------------------------------------------- Nippon Mitsubishi Oil Corp. 30,000 142,830 TonenGeneral Sekiyu K.K. 18,000 136,492 --------------------------------------------------------------- 279,322 --------------------------------------------------------------- NETHERLANDS - 6.78% --------------------------------------------------------------- Royal Dutch Petroleum Co. 20,274 1,109,866 --------------------------------------------------------------- 1,109,866 --------------------------------------------------------------- Security Shares Value --------------------------------------------------------------- SPAIN - 1.61% --------------------------------------------------------------- Repsol SA ADR 20,712 $ 263,042 --------------------------------------------------------------- 263,042 --------------------------------------------------------------- UNITED KINGDOM - 21.56% --------------------------------------------------------------- BG Group PLC 84,684 367,198 BP PLC 259,134 2,306,293 Enterprise Oil PLC 13,986 125,271 Shell Transport & Trading Co. PLC 98,112 730,689 --------------------------------------------------------------- 3,529,451 --------------------------------------------------------------- UNITED STATES - 47.55% --------------------------------------------------------------- Amerada Hess Corp. 2,454 194,749 Anadarko Petroleum Corp. 4,320 243,821 Apache Corp. 2,349 133,611 Ashland Inc. 3,342 152,094 Baker Hughes Inc. 4,962 189,797 Burlington Resources Inc. 3,990 159,959 ChevronTexaco Corp. 7,596 685,691 Conoco Inc. 10,788 314,794 Devon Energy Corp. 2,274 109,766 EOG Resources Inc. 2,826 114,623 Exxon Mobil Corp. 73,392 3,216,771 Halliburton Co. 6,786 115,837 Kerr - McGee Corp. 2,202 138,396 Marathon Oil Corp. 6,114 176,083 Nabors Industries Inc.(1) 1,950 82,388 Noble Drilling Corp.(1) 1,752 72,515 Occidental Petroleum Corp. 7,002 204,108 Phillips Petroleum Co. 7,248 455,174 Rowan Companies Inc.(1) 4,002 92,206 Schlumberger Ltd. 8,034 472,560 Sunoco Inc. 2,340 93,623 Transocean Sedco Forex Inc. 4,668 155,118 Unocal Corp. 5,412 210,797 --------------------------------------------------------------- 7,784,481 --------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $14,761,717) 16,185,234 --------------------------------------------------------------- SCHEDULES OF INVESTMENTS 83 iShares S&P Global Energy Sector Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value --------------------------------------------------------------- PREFERRED STOCKS - 0.72% --------------------------------------------------------------- BRAZIL - 0.72% --------------------------------------------------------------- Petroleo Brasileiro SA ADR 4,764 $ 118,767 --------------------------------------------------------------- 118,767 --------------------------------------------------------------- TOTAL PREFERRED STOCKS (Cost: $97,419) 118,767 --------------------------------------------------------------- SHORT TERM INSTRUMENTS - 0.26% --------------------------------------------------------------- Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 41,951 41,951 --------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $41,951) 41,951 --------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 99.84% (Cost $14,901,087) 16,345,952 --------------------------------------------------------------- Other Assets, Less Liabilities -- 0.16% 26,059 --------------------------------------------------------------- NET ASSETS -- 100.00% $16,372,011 =============================================================== (1) Non-income earning securities. See notes to financial statements. 84 2002 iSHARES ANNUAL REPORT TO SHAREHOLDERS iShares S&P Global Financials Sector Index Fund Schedule of Investments March 31, 2002 Security Shares Value -------------------------------------------------------------- COMMON STOCKS - 99.31% -------------------------------------------------------------- ARGENTINA - 0.02% -------------------------------------------------------------- BBVA Banco Frances SA ADR 500 $ 1,225 Grupo Financiero Galicia SA ADR(1) 824 1,096 -------------------------------------------------------------- 2,321 -------------------------------------------------------------- AUSTRALIA - 2.61% -------------------------------------------------------------- AMP Ltd. 3,340 33,869 Australia and New Zealand Banking Group Ltd. 4,512 42,791 Commonwealth Bank of Australia 3,744 64,022 Lend Lease Corp. Ltd. 1,352 8,449 National Australia Bank Ltd. 4,640 84,617 Westpac Banking Corp. Ltd. 5,324 44,355 -------------------------------------------------------------- 278,103 -------------------------------------------------------------- BELGIUM - 1.13% -------------------------------------------------------------- Algemene Maatschappij voor Nijverheidskredit NV 224 7,758 Dexia Group 1,824 27,545 Fortis Group 3,100 68,964 Groupe Bruxelles Lambert SA 112 6,229 KBC Bankverzekerings Holding NV 308 10,076 -------------------------------------------------------------- 120,572 -------------------------------------------------------------- BRAZIL - 0.14% -------------------------------------------------------------- Unibanco - Uniao de Bancos Brasileiros SA GDR 616 15,061 -------------------------------------------------------------- 15,061 -------------------------------------------------------------- CANADA - 3.13% -------------------------------------------------------------- Bank of Montreal 1,516 36,698 Bank of Nova Scotia 1,496 49,332 Brascan Corp. "A" 396 8,442 Canadian Imperial Bank of Commerce 1,112 39,346 Manulife Financial Corp. 1,468 40,229 National Bank of Canada 588 11,960 Royal Bank of Canada 2,028 67,626 Sun Life Financial Services of Canada 1,308 28,244 Toronto Dominion Bank 1,904 52,093 -------------------------------------------------------------- 333,970 -------------------------------------------------------------- Security Shares Value -------------------------------------------------------------- DENMARK - 0.22% -------------------------------------------------------------- Danske Bank A/S 1,536 $ 23,974 -------------------------------------------------------------- 23,974 -------------------------------------------------------------- FRANCE - 3.00% -------------------------------------------------------------- Assurances Generales de France 232 11,415 AXA AG 4,024 90,818 BNP Paribas SA 2,280 115,168 Credit Lyonnais SA 688 26,205 Societe Generale "A" 1,204 76,152 -------------------------------------------------------------- 319,758 -------------------------------------------------------------- GERMANY - 3.85% -------------------------------------------------------------- Allianz AG 628 149,568 Bayerische Hypo-Und Vereinsbank AG 1,100 40,305 Commerzbank AG 1,156 20,846 Deutsche Bank AG 1,852 119,464 Marschollek, Lautenschlaeger and Partner AG 168 11,559 Muenchener Rueckversicherungs- Gesellschaft AG 276 68,760 -------------------------------------------------------------- 410,502 -------------------------------------------------------------- GREECE - 0.15% -------------------------------------------------------------- National Bank of Greece SA ADR(1) 3,812 16,315 -------------------------------------------------------------- 16,315 -------------------------------------------------------------- HONG KONG - 1.35% -------------------------------------------------------------- Bank of East Asia Ltd. 4,800 9,570 Cheung Kong (Holdings) Ltd. 4,000 35,770 Hang Seng Bank Ltd. 2,400 26,847 Hysan Development Co. Ltd. 8,000 8,154 New World Development Co. Ltd. 8,000 6,564 Sino Land Co. Ltd. 16,000 6,051 Sun Hung Kai Properties Ltd. 4,000 30,386 Swire Pacific Ltd. "A" 2,000 10,821 Wharf Holdings Ltd. 4,000 9,513 -------------------------------------------------------------- 143,676 -------------------------------------------------------------- SCHEDULES OF INVESTMENTS 85 iShares S&P Global Financials Sector Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value -------------------------------------------------------------- COMMON STOCKS (continued) -------------------------------------------------------------- IRELAND - 0.63% -------------------------------------------------------------- Allied Irish Banks PLC 2,584 $ 31,402 Bank of Ireland 3,292 35,641 -------------------------------------------------------------- 67,043 -------------------------------------------------------------- ITALY - 2.87% -------------------------------------------------------------- Alleanza Assicurazioni SpA 1,092 10,498 Assicurazioni Generali SpA 3,368 83,123 Banca di Roma SpA 2,884 6,944 Banca Fideuram SpA 804 6,460 Banca Monte dei Paschi di Siena SpA 3,060 8,970 Banca Nazionale del Lavoro SpA 5,752 12,871 Bipop Carire SpA 4,428 6,857 IntesaBci SpA 13,164 39,506 Mediobanca Banca SpA 1,676 17,590 Mediolanum SpA 928 8,371 Riunione Adriatica di Sicurta SpA 1,080 14,133 Rolo Banca SpA 596 9,422 Sanpaolo - IMI SpA 3,192 37,538 Unicredito Italiano SpA 10,144 44,072 -------------------------------------------------------------- 306,355 -------------------------------------------------------------- JAPAN - 3.40% -------------------------------------------------------------- Acom Co. Ltd. 400 24,205 Credit Saison Co. Ltd. 400 8,345 Daiwa Bank Holdings Inc.(1) 8,000 5,070 Daiwa Securities Group Inc. 4,000 23,662 Mitsubishi Estate Co. Ltd. 4,000 28,551 Mitsubishi Tokyo Financial Group Inc. 8 48,893 Mitsui Sumitomo Insurance Co. Ltd. 4,000 18,802 Mizuho Holdings Inc. 12 28,611 Nikko Cordial Corp. 4,000 17,656 Nomura Holdings Inc. 4,000 51,881 ORIX Corp. 400 30,000 Sumitomo Mitsui Banking Corp. 8,000 33,319 Takefuji Corp. 240 14,704 Tokio Marine & Fire Insurance Co. Ltd. 4,000 28,400 -------------------------------------------------------------- 362,099 -------------------------------------------------------------- NETHERLANDS - 2.36% -------------------------------------------------------------- ABN AMRO Holding NV 3,584 68,068 Security Shares Value -------------------------------------------------------------- NETHERLANDS (continued) -------------------------------------------------------------- Aegon NV 2,612 $ 63,758 ING Groep NV 4,420 120,308 -------------------------------------------------------------- 252,134 -------------------------------------------------------------- SINGAPORE - 0.77% -------------------------------------------------------------- Capitaland Ltd.(1) 8,000 7,593 DBS Group Holdings Ltd. 4,000 32,107 Keppel Corp. Ltd. 4,000 8,894 United Overseas Bank Ltd. 4,000 32,974 -------------------------------------------------------------- 81,568 -------------------------------------------------------------- SPAIN - 2.47% -------------------------------------------------------------- Banco Bilbao Vizcaya SA 9,608 114,415 Banco Popular Espanol SA 688 25,929 Banco Santander Central Hispano SA 13,720 114,906 Bankinter SA 256 7,794 -------------------------------------------------------------- 263,044 -------------------------------------------------------------- SWEDEN - 0.90% -------------------------------------------------------------- Nordea AB 7,004 39,895 Skandia Forsakrings AB 3,188 16,158 Skandinaviska Enskilda Banken (SEB) "A" 1,580 15,711 Svenska Handelsbanken AB "A"(1) 1,696 24,315 -------------------------------------------------------------- 96,079 -------------------------------------------------------------- SWITZERLAND - 4.45% -------------------------------------------------------------- Baloise Holding - Registered 132 10,282 Credit Suisse Group(1) 3,340 126,605 Schweizerische Lebensversicherungs-und Rentenanstalt 28 9,190 Swiss Re 876 80,605 UBS AG - Registered(1) 3,844 189,252 Zurich Financial Services AG 252 58,437 -------------------------------------------------------------- 474,371 -------------------------------------------------------------- UNITED KINGDOM - 12.80% -------------------------------------------------------------- Abbey National PLC 4,252 60,306 Alliance & Leicester PLC 1,512 19,270 AMVESCAP PLC 2,188 30,191 Barclays PLC 4,884 150,919 86 2002 iSHARES ANNUAL REPORT TO SHAREHOLDERS iShares S&P Global Financials Sector Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value -------------------------------------------------------------- COMMON STOCKS (continued) -------------------------------------------------------------- UNITED KINGDOM (continued) -------------------------------------------------------------- British Land Co. PLC 1,552 $ 11,437 CGNU PLC 6,560 69,220 Hammerson PLC 836 6,720 HBOS PLC 10,484 113,238 HSBC Holdings PLC 27,476 317,699 Land Securities PLC 1,524 19,380 Legal & General Group PLC 14,788 34,009 Lloyds TSB Group PLC 16,164 165,956 Northern Rock PLC 1,252 12,480 Old Mutual PLC 9,760 14,176 Provident Financial PLC 676 6,912 Prudential Corp. PLC 5,788 58,354 Royal Bank of Scotland Group PLC 7,560 194,638 Royal Sun Alliance Industries Group PLC 4,156 17,459 Schroders PLC 396 5,075 Slough Estates PLC 1,208 6,677 Standard Chartered PLC 2,876 31,391 3i Group PLC 1,748 19,589 -------------------------------------------------------------- 1,365,096 -------------------------------------------------------------- UNITED STATES - 53.06% -------------------------------------------------------------- AFLAC Inc. 1,552 45,784 Allstate Corp. (The) 2,132 80,526 Ambac Financial Group Inc. 308 18,194 American Express Co. 3,888 159,252 American International Group Inc. 7,716 556,632 AmSouth Bancorp 1,108 24,354 AON Corp. 772 27,020 Bank of America Corp. 4,728 321,599 Bank of New York Co. Inc. (The) 2,184 91,772 Bank One Corp. 3,444 143,890 BB&T Corp. 1,304 49,695 Bear Stearns Companies Inc. (The) 276 17,319 Capital One Financial Corp. 616 39,332 Charter One Financial Inc. 640 19,981 Chubb Corp. 516 37,720 Cincinnati Financial Corp. 472 20,608 Citigroup Inc. 14,812 733,490 Comerica Inc. 532 33,287 Conseco Inc.(1) 1,332 4,822 Countrywide Credit Industries Inc. 348 15,573 Security Shares Value -------------------------------------------------------------- UNITED STATES (continued) -------------------------------------------------------------- Equity Office Properties Trust 1,208 $ 36,228 Fannie Mae 2,944 235,167 Fifth Third Bancorp 1,704 114,986 FleetBoston Financial Corp. 3,200 112,000 Franklin Resources Inc. 780 32,698 Freddie Mac 2,036 129,021 Golden West Financial Corp. 476 30,226 Hancock (John) Financial Services Inc. 900 34,371 Hartford Financial Services Group Inc. 700 47,684 Household International Inc. 1,364 77,475 Huntington Bancshares Inc. 760 14,972 Jefferson-Pilot Corp. 440 22,035 JP Morgan Chase & Co. 5,844 208,339 KeyCorp 1,264 33,686 Lehman Brothers Holdings Inc. 728 47,058 Lincoln National Corp. 552 28,003 Loews Corp. 576 33,742 Marsh & McLennan Companies Inc. 812 91,545 MBIA Inc. 436 23,845 MBNA Corp. 2,504 96,579 Mellon Financial Corp. 1,420 54,798 Merrill Lynch & Co. Inc. 2,472 136,899 MetLife Inc. 2,200 69,300 MGIC Investment Corp. 316 21,624 Moody's Corp. 464 19,070 Morgan Stanley Dean Witter & Co. 3,280 187,977 National City Corp. 1,780 54,753 Northern Trust Corp. 668 40,153 PNC Financial Services Group (The) 860 52,881 Progressive Corp. (The) 220 36,656 Providian Financial Corp. 1,544 11,657 Regions Financial Corp. 680 23,358 SAFECO Corp. 376 12,047 Schwab (Charles) Corp. (The) 4,096 53,617 SouthTrust Corp. 1,016 26,822 St. Paul Companies Inc. 632 28,977 State Street Corp. 956 52,943 Stilwell Financial Inc. 648 15,870 SunTrust Banks Inc. 864 57,655 Synovus Financial Corp. 872 26,579 T. Rowe Price Group Inc. 360 14,015 Torchmark Corp. 368 14,827 U.S. Bancorp 5,616 126,753 SCHEDULES OF INVESTMENTS 87 iShares S&P Global Financials Sector Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value -------------------------------------------------------------- COMMON STOCKS (continued) -------------------------------------------------------------- UNITED STATES (continued) -------------------------------------------------------------- Union Planters Corp. 412 $ 19,525 UNUMProvident Corp. 716 19,998 USA Education Inc. 480 46,944 Wachovia Corp. 4,144 153,660 Washington Mutual Inc. 2,596 86,005 Wells Fargo & Co. 5,068 250,359 XL Capital Ltd. "A" 372 34,726 Zions Bancorporation 280 16,596 -------------------------------------------------------------- 5,657,554 -------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $10,169,684) 10,589,595 -------------------------------------------------------------- Security Shares Value -------------------------------------------------------------- SHORT TERM INSTRUMENTS - 0.20% -------------------------------------------------------------- Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 21,849 $ 21,849 -------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $21,849) 21,849 -------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES - 99.51% (Cost $10,191,533) 10,611,444 -------------------------------------------------------------- Other Assets, Less Liabilities -- 0.49% 51,909 -------------------------------------------------------------- NET ASSETS -- 100.00% $10,663,353 ============================================================== (1) Non-income earning securities. See notes to financial statements. 88 2002 iSHARES ANNUAL REPORT TO SHAREHOLDERS iShares S&P Global Healthcare Sector Index Fund Schedule of Investments March 31, 2002 Security Shares Value -------------------------------------------------------------- COMMON STOCKS - 99.64% -------------------------------------------------------------- CANADA - 0.43% -------------------------------------------------------------- Biovail Corp.(1) 1,162 $ 57,721 MDS Inc. 1,218 16,933 -------------------------------------------------------------- 74,654 -------------------------------------------------------------- DENMARK - 0.46% -------------------------------------------------------------- Novo Nordisk A/S "B" 1,981 78,928 -------------------------------------------------------------- 78,928 -------------------------------------------------------------- FRANCE - 3.57% -------------------------------------------------------------- Aventis SA 5,635 389,346 Essilor International SA 980 35,096 Sanofi-Synthelabo SA 2,926 187,875 -------------------------------------------------------------- 612,317 -------------------------------------------------------------- GERMANY - 0.84% -------------------------------------------------------------- Altana AG 637 34,316 Fresenius Medical Care AG 322 19,619 Schering AG 1,554 90,968 -------------------------------------------------------------- 144,903 -------------------------------------------------------------- IRELAND - 0.22% -------------------------------------------------------------- Elan Corp. PLC ADR(1) 2,674 37,195 -------------------------------------------------------------- 37,195 -------------------------------------------------------------- JAPAN - 2.72% -------------------------------------------------------------- Takeda Chemical Industries Ltd. 7,000 283,623 Terumo Corp. 700 9,100 Yamanouchi Pharmaceutical Co. Ltd. 7,000 174,822 -------------------------------------------------------------- 467,545 -------------------------------------------------------------- SWITZERLAND - 8.50% -------------------------------------------------------------- Novartis AG 23,919 940,804 Roche Holding AG - Bearer 679 65,506 Roche Holding AG - Genusschein 5,831 453,326 -------------------------------------------------------------- 1,459,636 -------------------------------------------------------------- Security Shares Value -------------------------------------------------------------- UNITED KINGDOM - 11.70% -------------------------------------------------------------- AstraZeneca PLC 14,413 $ 715,673 GlaxoSmithKline PLC 51,093 1,203,388 Nycomed Amersham PLC "A" 5,460 59,751 Shire Pharmaceuticals Group PLC(1) 4,004 30,960 -------------------------------------------------------------- 2,009,772 -------------------------------------------------------------- UNITED STATES - 71.20% -------------------------------------------------------------- Abbott Laboratories 12,803 673,437 Aetna Inc. 1,183 45,924 Allergan Inc. 1,092 70,598 AmerisourceBergen Corp. 847 57,850 Amgen Inc.(1) 8,470 505,490 Applera Corp. - Applied Biosystems Group 1,750 39,112 Bard (C.R.) Inc. 434 25,628 Bausch & Lomb Inc. 448 19,967 Baxter International Inc. 4,914 292,481 Becton Dickinson & Co. 2,149 81,060 Biogen Inc.(1) 1,232 60,442 Biomet Inc. 2,240 60,614 Boston Scientific Corp.(1) 3,332 83,600 Bristol-Myers Squibb Co. 15,862 642,252 Cardinal Health Inc. 3,696 262,009 Chiron Corp.(1) 1,575 72,277 CIGNA Corp. 1,225 124,203 Forest Laboratories Inc. "A"(1) 1,463 119,527 Genzyme Corp. - General Division(1) 1,344 58,692 Guidant Corp.(1) 2,534 109,773 HCA Inc. 4,445 195,936 Health Management Associates Inc. "A"(1) 1,295 26,845 HEALTHSOUTH Corp.(1) 3,248 46,609 Humana Inc.(1) 1,421 19,226 Immunex Corp.(1) 4,417 133,658 Johnson & Johnson 24,808 1,611,280 King Pharmaceuticals Inc.(1) 1,890 66,169 Lilly (Eli) and Co. 9,163 698,221 Manor Care Inc.(1) 868 20,224 McKesson Corp. 2,366 88,559 MedImmune Inc.(1) 1,757 69,103 Medtronic Inc. 9,989 451,603 SCHEDULES OF INVESTMENTS 89 iShares S&P Global Healthcare Sector Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value -------------------------------------------------------------- COMMON STOCKS (continued) -------------------------------------------------------------- UNITED STATES (continued) -------------------------------------------------------------- Merck & Co. Inc. 18,760 $ 1,080,201 Pfizer Inc. 51,625 2,051,578 Pharmacia Corp. 10,745 484,385 Quintiles Transnational Corp.(1) 959 17,022 Schering-Plough Corp. 12,089 378,386 St. Jude Medical Inc.(1) 714 55,085 Stryker Corp.(1) 1,631 98,398 Tenet Healthcare Corp.(1) 2,688 180,150 UnitedHealth Group Inc. 2,625 200,603 Watson Pharmaceuticals Inc.(1) 875 23,704 WellPoint Health Networks Inc.(1) 1,050 66,854 Wyeth 10,696 702,192 Zimmer Holdings Inc.(1) 1,610 54,821 -------------------------------------------------------------- 12,225,748 -------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $17,439,627) 17,110,698 -------------------------------------------------------------- Security Shares Value -------------------------------------------------------------- SHORT TERM INSTRUMENTS - 0.15% -------------------------------------------------------------- Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 25,545 $ 25,545 -------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $25,545) 25,545 -------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 99.79% (Cost $17,465,172) 17,136,243 -------------------------------------------------------------- Other Assets, Less Liabilities -- 0.21% 35,840 -------------------------------------------------------------- NET ASSETS -- 100.00% $17,172,083 ============================================================== (1) Non-income earning securities. See notes to financial statements. 90 2002 iSHARES ANNUAL REPORT TO SHAREHOLDERS iShares S&P Global Technology Sector Index Fund Schedule of Investments March 31, 2002 Security Shares Value ------------------------------------------------------------- COMMON STOCKS - 99.94% ------------------------------------------------------------- CANADA - 1.13% ------------------------------------------------------------- ATI Technologies Inc.(1) 837 $ 11,096 Celestica Inc.(1) 660 23,870 Nortel Networks Corp. 11,103 48,785 Zarlink Semiconductor Inc.(1) 456 4,367 ------------------------------------------------------------- 88,118 ------------------------------------------------------------- FINLAND - 4.46% ------------------------------------------------------------- Nokia OYJ 16,419 347,070 ------------------------------------------------------------- 347,070 ------------------------------------------------------------- FRANCE - 2.01% ------------------------------------------------------------- Alcatel SA "A" 4,224 60,287 Cap Gemini SA 354 26,343 Dassault Systemes SA 123 5,966 Sagem SA 66 3,982 STMicroelectronics NV 1,782 59,620 ------------------------------------------------------------- 156,198 ------------------------------------------------------------- GERMANY - 1.80% ------------------------------------------------------------- Epcos AG(1) 189 8,726 Infineon Technologies AG(1) 1,272 28,830 SAP AG 675 102,228 ------------------------------------------------------------- 139,784 ------------------------------------------------------------- JAPAN - 8.01% ------------------------------------------------------------- Advantest Corp. 300 22,522 Canon Inc. 3,000 111,367 Fujitsu Ltd. 6,000 45,950 Hitachi Ltd. 12,000 87,736 Hoya Corp. 300 20,983 Kyocera Corp. 600 41,514 Matsushita Communication Industrial Co. Ltd. 300 10,299 Murata Manufacturing Co. Ltd. 600 38,480 NEC Corp. 3,000 24,990 NTT Data Corp. 3 12,789 Ricoh Co. Ltd. 3,000 55,570 Security Shares Value ------------------------------------------------------------- JAPAN (continued) ------------------------------------------------------------- Rohm Co. Ltd. 300 $ 45,045 Softbank Corp. 600 11,295 TDK Corp. 300 16,117 Tokyo Electron Ltd. 600 41,695 Toshiba Corp. 9,000 37,688 ------------------------------------------------------------- 624,040 ------------------------------------------------------------- NETHERLANDS - 0.54% ------------------------------------------------------------- ASM Lithography Holding NV(1) 1,521 38,348 Getronics NV(1) 1,143 3,799 ------------------------------------------------------------- 42,147 ------------------------------------------------------------- SINGAPORE - 0.10% ------------------------------------------------------------- Chartered Semiconductor Manufacturing Ltd. ADR(1) 300 8,073 ------------------------------------------------------------- 8,073 ------------------------------------------------------------- SOUTH KOREA - 1.88% ------------------------------------------------------------- Samsung Electronics Co. Ltd. GDR(2) 1,068 146,401 ------------------------------------------------------------- 146,401 ------------------------------------------------------------- SPAIN - 0.14% ------------------------------------------------------------- Terra Networks SA ADR(1) 1,392 10,844 ------------------------------------------------------------- 10,844 ------------------------------------------------------------- SWEDEN - 1.41% ------------------------------------------------------------- Telefonakfiebolaget Ericsson AB "B"(1) 25,929 109,641 ------------------------------------------------------------- 109,641 ------------------------------------------------------------- TAIWAN - 2.48% ------------------------------------------------------------- Advanced Semiconductor Engineering Inc. ADR(1) 3,687 18,767 Macronix International Co. Ltd. ADR(1) 1,881 16,666 Taiwan Semiconductor Manufacturing Co. Ltd. ADR(1) 4,857 100,783 United Microelectronics Corp. ADR(1) 5,319 56,647 ------------------------------------------------------------- 192,863 ------------------------------------------------------------- SCHEDULES OF INVESTMENTS 91 iShares S&P Global Technology Sector Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value -------------------------------------------------------------- COMMON STOCKS (continued) ------------------------------------------------------------- UNITED KINGDOM - 0.80% ------------------------------------------------------------- Arm Holdings PLC(1) 3,156 $ 12,763 CMG PLC 2,121 7,913 Dimension Data Holdings PLC(1) 4,206 3,474 Logica PLC 1,557 10,210 Marconi PLC 11,046 1,095 Misys PLC 2,001 8,356 Sage Group PLC 3,936 12,667 Spirent PLC 2,946 5,726 ------------------------------------------------------------- 62,204 ------------------------------------------------------------- UNITED STATES - 75.18% ------------------------------------------------------------- ADC Telecommunications Inc.(1) 2,718 11,062 Adobe Systems Inc. 831 33,481 Advanced Micro Devices Inc.(1) 1,215 17,873 Agilent Technologies Inc.(1) 1,617 56,530 Altera Corp.(1) 1,353 29,590 Analog Devices Inc.(1) 1,260 56,750 Andrew Corp.(1) 294 4,919 Apple Computer Inc.(1) 1,245 29,469 Applied Materials Inc.(1) 2,841 154,181 Applied Micro Circuits Corp.(1) 1,068 8,544 Autodesk Inc. 189 8,824 Avaya Inc.(1) 1,041 7,683 BMC Software Inc.(1) 852 16,571 Broadcom Corp. "A"(1) 909 32,633 Cisco Systems Inc.(1) 25,539 432,375 Citrix Systems Inc.(1) 648 11,197 Compaq Computer Corp. 5,949 62,167 Computer Associates International Inc. 2,013 44,065 Computer Sciences Corp.(1) 582 29,537 Compuware Corp.(1) 1,287 16,615 Comverse Technology Inc.(1) 645 8,172 Conexant Systems Inc.(1) 873 10,520 Corning Inc. 3,240 24,689 Dell Computer Corp.(1) 9,105 237,732 Electronic Data Systems Corp. 1,632 94,640 EMC Corp.(1) 7,698 91,760 Gateway Inc.(1) 1,218 7,698 Hewlett-Packard Co. 6,819 122,333 Security Shares Value ------------------------------------------------------------- UNITED STATES (continued) ------------------------------------------------------------- Intel Corp. 23,259 $ 707,306 International Business Machines Corp. 5,892 612,768 Intuit Inc.(1) 726 27,849 Jabil Circuit Inc.(1) 672 15,812 JDS Uniphase Corp.(1) 4,599 27,088 KLA-Tencor Corp.(1) 651 43,292 Lexmark International Inc. "A"(1) 453 25,903 Linear Technology Corp. 1,110 49,084 LSI Logic Corp.(1) 867 14,739 Lucent Technologies Inc.(1) 11,856 56,079 Maxim Integrated Products Inc.(1) 1,143 63,677 Mercury Interactive Corp.(1) 285 10,730 Micron Technology Inc.(1) 2,088 68,695 Microsoft Corp.(1) 18,510 1,116,338 Millipore Corp. 159 7,034 Motorola Inc. 7,665 108,843 National Semiconductor Corp.(1) 612 20,618 NCR Corp.(1) 327 14,633 Network Appliance Inc.(1) 1,149 23,417 Novell Inc.(1) 1,245 4,843 Novellus Systems Inc.(1) 501 27,124 NVIDIA Corp.(1) 471 20,894 Oracle Corp.(1) 19,230 246,144 Palm Inc.(1) 2,499 9,971 Parametric Technology Corp.(1) 924 5,581 PeopleSoft Inc.(1) 1,026 37,480 PerkinElmer Inc. 357 6,605 PMC-Sierra Inc.(1) 585 9,524 QLogic Corp.(1) 324 16,045 QUALCOMM Inc.(1) 2,646 99,595 Rational Software Corp.(1) 576 9,118 Sanmina-SCI Corp.(1) 1,728 20,304 Sapient Corp.(1) 690 3,278 Scientific-Atlanta Inc. 573 13,236 Siebel Systems Inc.(1) 1,578 51,459 Solectron Corp.(1) 2,790 21,762 Sun Microsystems Inc.(1) 11,403 100,574 Symbol Technologies Inc. 801 9,003 Tektronix Inc.(1) 333 7,879 Tellabs Inc.(1) 1,425 14,920 Teradyne Inc.(1) 615 24,249 92 2002 iSHARES ANNUAL REPORT TO SHAREHOLDERS iShares S&P Global Technology Sector Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value ------------------------------------------------------------- COMMON STOCKS (continued) ------------------------------------------------------------- UNITED STATES (continued) ------------------------------------------------------------- Texas Instruments Inc. 6,063 $ 200,685 Thermo Electron Corp.(1) 639 13,246 Unisys Corp.(1) 1,107 13,981 Veritas Software Corp.(1) 1,383 60,617 Vitesse Semiconductor Corp.(1) 648 6,350 Waters Corp.(1) 447 12,503 Xerox Corp.(1) 2,484 26,703 Xilinx Inc.(1) 1,161 46,277 Yahoo! Inc.(1) 2,100 38,787 ------------------------------------------------------------- 5,854,252 ------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $8,679,741) 7,781,635 ------------------------------------------------------------- Security Shares Value ------------------------------------------------------------- SHORT TERM INSTRUMENTS - 1.13% ------------------------------------------------------------- Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 55,950 $ 55,950 Dreyfus Money Market Fund 13,522 13,522 Goldman Sachs Financial Square Prime Obligation Fund 4,216 4,216 Providian Temp Cash Money Market Fund 14,062 14,062 ------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $87,750) 87,750 ------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 101.07% (Cost $8,767,491) 7,869,385 ------------------------------------------------------------- Other Assets, Less Liabilities -- (1.07%) (82,940) ------------------------------------------------------------- NET ASSETS -- 100.00% $7,786,445 ============================================================= (1) Non-income earning securities. (2) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. See notes to financial statements. SCHEDULES OF INVESTMENTS 93 iShares S&P Global Telecommunications Sector Index Fund Schedule of Investments March 31, 2002 Security Shares Value --------------------------------------------------------------- COMMON STOCKS AND RIGHTS - 99.76% --------------------------------------------------------------- AUSTRALIA - 1.37% --------------------------------------------------------------- Telstra Corp. Ltd. 64,230 $ 184,424 --------------------------------------------------------------- 184,424 --------------------------------------------------------------- BRAZIL - 0.42% --------------------------------------------------------------- Tele Norte Leste Participacoes SA ADR 4,536 56,972 --------------------------------------------------------------- 56,972 --------------------------------------------------------------- CANADA - 1.70% --------------------------------------------------------------- BCE Inc. 10,710 187,831 TELUS Corp. 3,528 40,379 --------------------------------------------------------------- 228,210 --------------------------------------------------------------- DENMARK - 0.42% --------------------------------------------------------------- TDC A/S ADR 3,534 56,261 --------------------------------------------------------------- 56,261 --------------------------------------------------------------- FINLAND - 0.28% --------------------------------------------------------------- Sonera OYJ ADR 7,722 38,147 --------------------------------------------------------------- 38,147 --------------------------------------------------------------- FRANCE - 2.50% --------------------------------------------------------------- Bouygues SA 2,766 90,369 France Telecom SA 5,610 171,884 Orange SA(1) 10,740 73,177 --------------------------------------------------------------- 335,430 --------------------------------------------------------------- GERMANY - 3.50% --------------------------------------------------------------- Deutsche Telekom AG 31,242 470,705 --------------------------------------------------------------- 470,705 --------------------------------------------------------------- HONG KONG - 1.65% --------------------------------------------------------------- China Mobil Ltd.(1) 60,000 185,388 Pacific Century CyberWorks Ltd.(1) 138,000 35,825 --------------------------------------------------------------- 221,213 --------------------------------------------------------------- ITALY - 5.72% --------------------------------------------------------------- Olivetti SpA 99,774 123,859 Security Shares Value --------------------------------------------------------------- ITALY (continued) --------------------------------------------------------------- Telecom Italia Mobile SpA 48,186 $ 233,731 Telecom Italia SpA 28,650 157,463 Telecom Italia SpA "A" 30,852 254,082 --------------------------------------------------------------- 769,135 --------------------------------------------------------------- JAPAN - 8.09% --------------------------------------------------------------- Nippon Telegraph & Telephone Corp. 114 437,816 NTT DoCoMo Inc.(1) 240 650,454 --------------------------------------------------------------- 1,088,270 --------------------------------------------------------------- MEXICO - 2.67% --------------------------------------------------------------- America Movil SA de CV ADR 5,562 110,461 Telefonos de Mexico ADR 6,162 248,883 --------------------------------------------------------------- 359,344 --------------------------------------------------------------- NETHERLANDS - 0.87% --------------------------------------------------------------- Equant NV(1) 1,812 20,440 Koninklijke (Royal) KPN NV(1) 18,948 97,033 --------------------------------------------------------------- 117,473 --------------------------------------------------------------- PORTUGAL - 0.99% --------------------------------------------------------------- Portugal Telecom SGPS ADR(1) 18,073 133,198 --------------------------------------------------------------- 133,198 --------------------------------------------------------------- SOUTH KOREA - 1.34% --------------------------------------------------------------- Korea Telecom Corp. ADR 2,784 66,760 SK Telecom Co. Ltd. ADR 4,620 113,652 --------------------------------------------------------------- 180,412 --------------------------------------------------------------- SPAIN - 4.71% --------------------------------------------------------------- Telefonica SA(1) 55,428 621,370 Telefonica SA - Bonus Rights(1) 55,428 12,571 --------------------------------------------------------------- 633,941 --------------------------------------------------------------- SWITZERLAND - 0.78% --------------------------------------------------------------- Swisscom AG ADR 3,516 105,128 --------------------------------------------------------------- 105,128 --------------------------------------------------------------- 94 2002 iSHARES ANNUAL REPORT TO SHAREHOLDERS iShares S&P Global Telecommunications Sector Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value --------------------------------------------------------------- COMMON STOCKS AND RIGHTS (continued) --------------------------------------------------------------- UNITED KINGDOM - 16.91% --------------------------------------------------------------- BT Group PLC(1) 112,164 $ 447,220 Cable & Wireless PLC 35,994 114,684 mm02 PLC(1) 109,968 106,878 Vodafone Group PLC 869,208 1,605,949 --------------------------------------------------------------- 2,274,731 --------------------------------------------------------------- UNITED STATES - 45.84% --------------------------------------------------------------- Alltel Corp. 4,230 234,977 AT&T Corp. 41,478 651,205 AT&T Wireless Services Inc.(1) 34,116 305,338 BellSouth Corp. 24,156 890,390 CenturyTel Inc. 2,046 69,564 Citizens Communications Co.(1) 3,834 41,216 Nextel Communications Inc. "A"(1) 4,998 26,889 Qwest Communications International Inc. 21,516 176,862 SBC Communications Inc. 43,116 1,614,263 Sprint Corp. (FON Group) 11,538 176,416 Sprint Corp. (PCS Group)(1) 12,672 130,395 Verizon Communications Inc. 34,896 1,593,002 WorldCom Corp.(1) 37,878 255,298 --------------------------------------------------------------- 6,165,815 --------------------------------------------------------------- TOTAL COMMON STOCKS AND RIGHTS (Cost: $15,181,343) 13,418,809 --------------------------------------------------------------- Security Shares Value --------------------------------------------------------------- SHORT TERM INSTRUMENTS - 0.13% --------------------------------------------------------------- Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 18,397 $ 18,397 --------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $18,397) 18,397 --------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 99.89% (Cost $15,199,740) 13,437,206 --------------------------------------------------------------- Other Assets, Less Liabilities -- 0.11% 14,243 --------------------------------------------------------------- NET ASSETS -- 100.00% $13,451,449 =============================================================== (1) Non-income earning securities. See notes to financial statements. SCHEDULES OF INVESTMENTS 95 iShares S&P Europe 350 Index Fund Schedule of Investments March 31, 2002 Security Shares Value ------------------------------------------------------------------- COMMON STOCKS AND RIGHTS - 99.60% ------------------------------------------------------------------- AUSTRIA - 0.03% ------------------------------------------------------------------- OMV AG 1,544 $ 147,346 VA Technologie AG 1,158 31,792 ------------------------------------------------------------------- 179,138 ------------------------------------------------------------------- BELGIUM - 1.30% ------------------------------------------------------------------- Algemene Maatschappij voor Nijverheidskredit NV 11,966 414,435 Dexia Group 90,710 1,369,839 Electrabel SA 4,439 918,580 Fortis Group 137,802 3,065,585 Groupe Bruxelles Lambert SA 9,650 536,692 Interbrew SA 7,720 213,835 KBC Bankverzekerings Holding NV 11,966 391,469 UCB SA 12,352 479,528 ------------------------------------------------------------------- 7,389,963 ------------------------------------------------------------------- DENMARK - 0.56% ------------------------------------------------------------------- Danske Bank A/S 77,200 1,204,961 Novo Nordisk A/S "B" 19,300 768,956 Tele Danmark A/S 19,300 620,601 Vestas Wind Systems A/S 19,300 611,540 ------------------------------------------------------------------- 3,206,058 ------------------------------------------------------------------- FINLAND - 2.55% ------------------------------------------------------------------- Nokia OYJ 587,685 12,422,662 Sonera Group OYJ(1) 52,110 258,674 Stora Enso OYJ - R Shares 75,849 959,475 UPM-Kymmene OYJ 26,827 917,435 ------------------------------------------------------------------- 14,558,246 ------------------------------------------------------------------- FRANCE - 13.76% ------------------------------------------------------------------- Accor SA 26,441 1,061,091 Air Liquide SA 12,159 1,784,189 Alcatel SA "A" 144,943 2,068,699 Alstom 20,265 271,022 Assurances Generales de France 12,159 598,265 Aventis SA 82,604 5,707,466 AXA AG 168,489 3,802,645 BNP Paribas SA 101,518 5,127,887 Security Shares Value ------------------------------------------------------------------- FRANCE (continued) ------------------------------------------------------------------- Bouygues SA 21,230 $ 693,616 Cap Gemini SA 11,580 861,736 Carrefour Supermarche SA 76,621 3,609,592 Castorama Dubois Investissement SA 8,492 464,509 Christian Dior SA 11,387 430,640 Compagnie de Saint Gobain 11,194 1,827,157 Compagnie Generale des Etablissements Michelin "B" 18,142 689,113 Credit Lyonnais SA 28,950 1,102,679 Dassault Systemes SA 4,825 234,040 Essilor International SA 7,720 276,469 Etablissements Economiques du Casino Guichard-Perrachon SA 4,632 336,613 European Aeronautic Defence and Space Co. 21,809 307,463 France Telecom SA 49,022 1,501,975 Groupe Danone 17,563 2,070,003 Lafarge SA 14,089 1,259,855 Lagardere S.C.A. 18,335 870,155 L'Oreal SA 34,933 2,582,810 LVMH SA 32,038 1,632,282 Orange SA(1) 76,235 519,427 Pechiney SA "A" 8,685 462,943 Pinault-Printemps-Redoute SA 8,299 983,201 PSA Peugeot Citroen 27,792 1,372,313 Renault SA 17,949 861,231 Sagem SA 1,930 116,430 Sanofi-Synthelabo SA 41,881 2,689,129 Schneider SA 19,107 966,801 Societe Generale "A" 44,004 2,783,218 Societe Television Francaise(1) 16,984 528,371 Sodexho Alliance SA 10,808 440,896 STMicroelectronics NV 59,444 1,988,794 Suez SA 114,835 3,247,913 Thales/Ex Thomson CSF 7,720 277,211 Thomson Multimedia SA(1) 14,861 462,972 TotalFinaElf SA 91,289 14,096,409 Valeo SA 7,913 351,379 Vinci SA 1,158 75,010 Vivendi Environment SA 3,860 119,882 Vivendi Universal SA 125,836 4,893,976 ------------------------------------------------------------------- 78,409,477 ------------------------------------------------------------------- 96 2002 iSHARES ANNUAL REPORT TO SHAREHOLDERS iShares S&P Europe 350 Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value ------------------------------------------------------------------- COMMON STOCKS AND RIGHTS (continued) ------------------------------------------------------------------- GERMANY - 10.44% ------------------------------------------------------------------- Adidas AG 9,650 $ 696,141 Allianz AG 24,125 5,745,752 BASF AG 77,200 3,137,809 Bayer AG 96,500 3,270,655 Bayerische Hypo-Und Vereinsbank AG 38,600 1,414,339 Bayerische Motoren Werke AG 38,600 1,536,577 Commerzbank AG 57,900 1,044,088 Continental AG 19,300 286,740 DaimlerChrysler AG 106,150 4,843,264 Degussa AG 9,650 313,090 Deutsche Bank AG 77,200 4,979,817 Deutsche Lufthansa AG 48,250 735,373 Deutsche Post AG 38,600 577,186 Deutsche Telekom AG 299,150 4,507,114 E.On AG 86,850 4,421,073 Epcos AG(1) 9,650 445,516 Infineon Technologies AG(1) 45,548 1,032,345 Linde AG 9,650 478,602 MAN AG 9,650 240,858 Marschollek, Lautenschlaeger and Partner AG 2,123 146,076 Metro AG 19,300 659,014 Muenchener Rueckversicherungs- Gesellschaft AG 9,650 2,404,124 Preussag AG 9,650 289,434 RWE AG 48,250 1,813,385 SAP AG 26,441 4,004,466 Schering AG 19,300 1,129,787 Siemens AG 101,325 6,718,111 Thyssen Krupp AG 48,250 758,944 Volkswagen AG 34,740 1,832,379 ------------------------------------------------------------------- 59,462,059 ------------------------------------------------------------------- GREECE - 0.13% ------------------------------------------------------------------- Hellenic Telecommunications Organization SA 61,703 461,538 National Bank of Greece SA ADR(1) 62,450 267,286 ------------------------------------------------------------------- 728,824 ------------------------------------------------------------------- Security Shares Value ------------------------------------------------------------------- IRELAND - 0.71% ------------------------------------------------------------------- Allied Irish Bank PLC 110,010 $ 1,353,222 Bank of Ireland 122,362 1,324,752 CRH PLC 49,408 870,692 Elan Corporation PLC(1) 37,056 497,847 ------------------------------------------------------------------- 4,046,513 ------------------------------------------------------------------- ITALY - 5.10% ------------------------------------------------------------------- Alitalia SpA(1) 193,000 158,279 Alleanza Assicurazioni SpA 46,127 443,460 Assicurazioni Generali SpA 135,100 3,334,309 Autostrade SpA 48,636 369,142 Banca di Roma SpA 120,625 290,441 Banca Fideuram SpA 28,950 232,607 Banca Nazionale del Lavoro SpA 193,000 431,876 Bipop Carire SpA 193,000 298,860 Enel SpA 235,874 1,335,495 ENI SpA 328,100 4,808,765 Fiat SpA 38,600 537,111 Finmeccanica SpA(1) 965,000 846,112 IntesaBci SpA 579,000 1,737,637 Mediaset SpA 96,500 829,244 Mediobanca Banca SpA 48,250 506,384 Mediolanum SpA 28,950 261,146 Olivetti SpA 868,500 1,078,156 Pirelli SpA 193,000 300,540 Riunione Adriatica di Sicurta SpA 48,250 631,399 Rolo Banca SpA 20,265 320,347 Sanpaolo - IMI SpA 144,750 1,702,260 Seat-Pagine Gialle SpA(1) 707,924 547,792 Telecom Italia Mobile SpA 434,250 2,106,373 Telecom Italia SpA 289,500 1,591,121 Telecom Italia SpA "A" 299,150 2,463,650 Unicredito Italiano SpA 434,250 1,886,643 ------------------------------------------------------------------- 29,049,149 ------------------------------------------------------------------- LUXEMBOURG - 0.05% ------------------------------------------------------------------- Arcelor(1) 19,300 264,346 ------------------------------------------------------------------- 264,346 ------------------------------------------------------------------- SCHEDULES OF INVESTMENTS 97 iShares S&P Europe 350 Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value ------------------------------------------------------------------- COMMON STOCKS AND RIGHTS (continued) ------------------------------------------------------------------- NETHERLANDS - 8.08% ------------------------------------------------------------------- ABN AMRO Holding NV 164,050 $ 3,115,670 Aegon NV 109,817 2,680,611 Akzo Nobel NV 38,407 1,795,942 ASM Lithography Holding NV(1) 53,847 1,357,612 Burhmann NV 7,720 101,024 DSM NV 9,071 371,937 Elsevier NV 82,411 1,104,316 Equant NV(1) 18,914 213,354 Getronics NV(1) 45,355 150,756 Gucci Group NV 4,439 411,657 Hagemeyer NV 12,159 269,431 Heineken NV 22,798 928,818 ING Groep NV 186,052 5,064,149 Koninklijke (Royal) KPN NV(1) 171,386 877,668 Koninklijke Ahold NV 100,939 2,648,831 Numico NV 18,142 500,137 Philips Electronics NV 147,455 4,498,542 Randstad Holding NV 9,264 141,192 Royal Dutch Petroleum Co. 251,865 13,787,921 TNT Post Group NV 35,898 746,294 Unilever NV - CVA 64,076 3,678,225 VNU NV 25,476 809,001 Wolters Kluwer NV - CVA 37,249 779,908 ------------------------------------------------------------------- 46,032,996 ------------------------------------------------------------------- NORWAY - 0.24% ------------------------------------------------------------------- Norsk Hydro ASA 19,300 934,220 Orkla ASA 19,300 348,556 Petroleum Geo-Services(1) 19,300 99,650 ------------------------------------------------------------------- 1,382,426 ------------------------------------------------------------------- PORTUGAL - 0.54% ------------------------------------------------------------------- Banco Comercial Portugues SA "R" 219,055 770,154 Banco Espirito Santo e Comercial de Lisboa SA 11,580 122,240 Brisa-Auto Estradas de Portugal SA 76,428 356,048 Cimentos de Portugal SA 11,966 203,773 Electricidade de Portugal SA 197,053 410,856 Security Shares Value ------------------------------------------------------------------- PORTUGAL (continued) ------------------------------------------------------------------- Portugal Telecom SA(1) 138,381 $ 1,029,776 Telecel-Comunicacoes Pessoais SA(1) 22,774 170,468 ------------------------------------------------------------------- 3,063,315 ------------------------------------------------------------------- SPAIN - 4.06% ------------------------------------------------------------------- Acerinox SA 6,176 218,966 Altadis SA 39,565 726,576 Amadeus Global Travel Distribution SA "A"(1) 34,161 242,888 Autopistas Concesionaria Espanola SA 17,949 165,983 Banco Bilbao Vizcaya SA 358,208 4,265,648 Banco Popular Espanol SA 27,599 1,040,146 Banco Santander Central Hispano SA 511,257 4,281,829 Bankinter SA 8,685 264,430 Endesa SA 118,695 1,765,529 Gas Natural SDG SA 17,370 298,679 Iberdrola SA 105,185 1,372,780 Repsol YPF SA 111,554 1,406,272 Telefonica SA(1) 530,586 5,948,081 Telefonica SA - Bonus Rights(1) 251,315 56,998 Terra Networks SA(1) 69,673 547,045 Union Electrica Fenosa SA 32,617 526,706 ------------------------------------------------------------------- 23,128,556 ------------------------------------------------------------------- SWEDEN - 2.43% ------------------------------------------------------------------- ASSA Abloy AB "B" 38,600 510,531 Atlas Copco AB "A" 19,300 453,702 Electrolux AB "B" 38,600 685,679 Hennes & Mauritz AB "B" 57,900 1,171,056 Nordea AB 289,500 1,648,992 Sandvik AB 19,300 459,294 Securitas AB "B" 38,600 765,801 Skandia Forsakrings AB 128,538 651,482 Skandinaviska Enskilda Banken (SEB) "A" 57,900 575,746 Skanska AB "B" 36,482 274,720 Svenska Cellulosa AB "B" 19,300 599,969 Svenska Handelsbanken AB "A"(1) 77,200 1,106,778 98 2002 iSHARES ANNUAL REPORT TO SHAREHOLDERS iShares S&P Europe 350 Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value ------------------------------------------------------------------- COMMON STOCKS AND RIGHTS (continued) ------------------------------------------------------------------- SWEDEN (continued) ------------------------------------------------------------------- Telefonakfiebolaget Ericsson AB "B"(1) 887,800 $ 3,754,062 Telia AB 115,800 411,403 Volvo AB "B" 38,600 763,936 ------------------------------------------------------------------- 13,833,151 ------------------------------------------------------------------- SWITZERLAND - 10.32% ------------------------------------------------------------------- ABB Ltd.(1) 154,400 1,225,612 Adecco SA 19,300 1,225,042 Baloise Holding - Registered 4,246 330,732 Clariant AG - Registered 19,300 440,096 Compagnie Financiere Richemont AG 77,200 1,778,750 Credit Suisse Group(1) 138,960 5,267,390 Holcim Ltd. "B" 3,860 874,456 Nestle S.A. 48,250 10,729,874 Novartis AG 353,190 13,891,987 Roche Holding AG - Bearer 8,685 837,877 Roche Holding AG - Genusschein 85,885 6,677,052 Schweizerische Lebensversicherungs-und Rentenanstalt 965 316,732 Swatch Group (The) AG "B"(1) 386 39,305 Swiss Re 34,740 3,196,584 Swisscom AG 1,930 582,971 Syngenta AG 15,445 943,617 UBS AG - Registered(1) 167,910 8,266,713 Zurich Financial Services AG 9,457 2,193,025 ------------------------------------------------------------------- 58,817,815 ------------------------------------------------------------------- UNITED KINGDOM - 39.30% ------------------------------------------------------------------- Abbey National PLC 184,894 2,622,352 Aegis Group PLC 144,750 257,655 Alliance & Leicester PLC 71,603 912,559 Allied Domecq PLC 143,206 876,879 AMVESCAP PLC 79,709 1,099,865 Anglo American PLC 155,365 2,588,490 Arm Holdings PLC(1) 111,747 451,916 Associated British Foods PLC 52,110 380,669 AstraZeneca PLC 219,634 10,905,860 AWG PLC(1) 36,477 272,961 Security Shares Value ------------------------------------------------------------------- UNITED KINGDOM (continued) ------------------------------------------------------------------- BAA PLC 143,206 $ 1,298,993 BAE Systems PLC 188,947 901,353 Barclays PLC 203,037 6,273,985 Bass PLC 114,449 1,217,417 BBA Group PLC 59,058 248,091 BG Group PLC 469,762 2,036,935 BHP Billiton PLC 217,897 1,241,904 BOC Group PLC 66,006 1,001,014 Boots Co. PLC 120,625 1,155,153 BP PLC 2,759,900 24,563,110 BPB Industries PLC 61,374 340,847 Brambles Industries PLC 96,693 461,951 British Airways PLC 60,409 209,891 British American Tobacco PLC 213,265 2,049,903 British Land Co. PLC 69,480 512,012 British Sky Broadcasting Group PLC(1) 88,201 1,044,970 BT Group PLC(1) 1,044,933 4,166,357 Bunzl PLC 61,374 463,202 Cable & Wireless PLC 312,853 996,812 Cadbury Schweppes PLC 272,323 1,879,791 Capita Group PLC 87,429 516,670 Carlton Communications PLC 85,885 332,040 Centrica PLC 535,961 1,736,299 CGNU PLC 252,058 2,659,666 Chub PLC 98,044 247,816 CMG PLC 80,095 298,826 Cobham PLC 12,352 197,878 Colt Telecom PLC(1) 67,936 48,370 Compass Group PLC 290,658 1,945,316 Cookson Group PLC 97,272 137,134 Corus Group PLC(1) 418,038 511,929 Daily Mail and General Trust PLC "A" 37,249 392,515 Diageo PLC 422,863 5,527,792 Dimension Data Holdings PLC(1) 144,364 119,230 Dixons Group PLC 256,111 953,681 Electrocomponents PLC 58,093 395,009 EMAP PLC 33,968 398,811 EMI Group PLC 105,571 544,957 Enterprise Oil PLC 59,637 534,163 SCHEDULES OF INVESTMENTS 99 iShares S&P Europe 350 Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value ------------------------------------------------------------------- COMMON STOCKS AND RIGHTS (continued) ------------------------------------------------------------------- UNITED KINGDOM (continued) ------------------------------------------------------------------- Exel PLC 39,758 $ 491,421 FirstGroup PLC 58,093 249,829 FKI PLC 77,007 211,092 Gallaher Group PLC 84,341 648,549 GKN PLC 96,693 475,033 GlaxoSmithKline PLC 782,422 18,428,307 Granada Compass PLC 290,658 567,045 Great Universal Stores PLC 134,907 1,344,753 Hammerson PLC 38,214 307,179 Hanson PLC 98,430 742,871 Hays PLC 231,407 594,785 HBOS PLC 456,638 4,932,147 Hilton Group PLC 200,913 713,101 HSBC Holdings PLC 1,155,298 13,358,480 IMI PLC 47,092 210,562 Imperial Chemical Industries PLC 97,658 475,604 Imperial Tobacco Group PLC 69,866 1,154,068 Innogy Holdings PLC 54,622 210,011 Invensys PLC 468,990 828,143 J Sainsbury PLC 157,295 894,836 Johnson Matthey PLC 29,722 442,709 Kingfisher PLC 167,722 924,299 Land Securities PLC 70,059 890,891 Lattice Group PLC 469,762 1,167,312 Legal & General Group PLC 689,010 1,584,585 Lloyds TSB Group PLC 694,221 7,127,567 Logica PLC 53,847 353,102 Marks & Spencer Group PLC 283,718 1,556,449 Misys PLC 77,007 321,574 mm02 PLC(1) 1,044,933 1,015,570 National Grid Group PLC 198,983 1,312,631 Next PLC 45,934 709,694 Northern Rock PLC 56,549 563,680 Nycomed Amersham PLC "A" 84,920 929,314 Old Mutual PLC 421,705 612,527 P&O Princess Cruises PLC 89,745 618,532 Pearson PLC 87,245 1,120,610 Peninsular & Oriental Steam Navigation Co. PLC 71,410 252,691 Pilkington PLC 147,452 239,374 Security Shares Value ------------------------------------------------------------------- UNITED KINGDOM (continued) ------------------------------------------------------------------- Powergen PLC 87,236 $ 956,525 Provident Financial PLC 33,196 339,406 Prudential Corp. PLC 221,950 2,237,678 Railtrack Group PLC 20,367 58,005 Rank Group PLC 93,991 392,159 Reckitt Benckiser PLC 70,445 1,157,616 Reed International PLC 153,628 1,489,792 Rentokil Initial PLC 305,905 1,232,767 Reuters Group PLC 159,997 1,233,721 Rio Tinto PLC 121,590 2,403,226 RMC Group PLC 35,126 333,627 Rolls Royce PLC 192,228 515,978 Royal Bank of Scotland Group PLC 316,906 8,158,999 Royal Sun Alliance Industries Group PLC 191,649 805,079 Safeway PLC 140,504 587,728 Sage Group PLC 169,840 546,579 Schroders PLC 18,142 232,506 Scottish & Southern Energy PLC 114,835 1,111,970 Scottish Newcastle Breweries PLC 83,569 666,413 Scottish Power PLC 247,812 1,268,624 Severn Trent PLC 45,934 482,725 Shell Transport & Trading Co. PLC 1,236,551 9,209,214 Shire Pharmaceuticals Group PLC(1) 41,688 322,344 Slough Estates PLC 50,373 278,407 Smiths Group PLC 57,326 662,035 South African Breweries PLC 75,656 528,434 Spirent PLC 83,376 162,066 Standard Chartered PLC 122,362 1,335,569 Tate & Lyle PLC 57,707 286,994 Telewest Communications PLC(1) 189,719 35,117 Tesco PLC 776,825 2,665,908 3i Group PLC 81,060 908,423 Tomkins PLC 127,380 469,344 Trinity Mirror PLC 38,793 269,852 Unilever PLC 326,170 2,610,273 United Business Media PLC 44,423 386,507 United Utilities PLC 73,726 641,460 Vodafone Group PLC 8,379,095 15,481,216 W.H. Smith Group PLC 33,582 230,497 Whitebread PLC 16,598 153,631 WM Morrison Supermarkets PLC 194,158 588,901 100 2002 iSHARES ANNUAL REPORT TO SHAREHOLDERS iShares S&P Europe 350 Index Fund Schedule of Investments (Continued) March 31, 2002 Security Shares Value ----------------------------------------------------------------------- COMMON STOCKS AND RIGHTS (Continued) ----------------------------------------------------------------------- UNITED KINGDOM (Continued) ----------------------------------------------------------------------- Wolseley PLC 77,007 $ 781,860 WPP Group PLC 103,834 1,185,826 ----------------------------------------------------------------------- 223,916,927 ----------------------------------------------------------------------- TOTAL COMMON STOCKS AND RIGHTS (Cost: $591,030,016) 567,468,959 ----------------------------------------------------------------------- SHORT TERM INSTRUMENTS - 6.48% ----------------------------------------------------------------------- Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 23,211,332 23,211,332 Dreyfus Money Market Fund 6,253,782 6,253,782 Goldman Sachs Financial Square Prime Obligation Fund 949,882 949,882 Providian Temp Cash Money Market Fund 6,503,933 6,503,933 ----------------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $36,918,929) 36,918,929 ----------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 106.08% (Cost $627,948,945) 604,387,888 ----------------------------------------------------------------------- Other Assets, Less Liabilities -- (6.08%) (34,630,549) ----------------------------------------------------------------------- NET ASSETS -- 100.00% $569,757,339 ======================================================================= /(1)/ Non-income earning securities. See notes to financial statements. Schedules of Investments 101 iShares S&P/TSE 60 Index Fund Schedule of Investments March 31, 2002 Security Shares Value ------------------------------------------------------------- COMMON STOCKS - 99.49% ------------------------------------------------------------- Royal Bank of Canada 13,551 $ 451,870 Toronto Dominion Bank 12,837 351,219 Bank of Nova Scotia 10,074 332,201 BCE Inc. 16,500 289,375 Manulife Financial Corp. 10,180 278,971 Nortel Networks Corp. 63,443 278,762 Canadian Imperial Bank of Commerce 7,428 262,825 Bank of Montreal 9,936 240,522 Alcan Aluminum Ltd. 6,078 240,125 Canadian National Railway Company 4,113 205,109 Barrick Gold Corp. 10,563 193,000 Bombardier Inc. "B" 21,033 189,183 Sun Life Financial Services of Canada 8,532 184,234 Suncor Energy Inc. 4,260 153,535 Biovail Corp.(1) 3,026 150,314 Pancanadian Energy Corp. 4,955 147,339 Celestica Inc.(1) 3,705 133,997 Petro-Canada 5,082 130,793 Magna International Inc. "A" 1,782 130,528 TransCanada PipeLines Ltd. 9,336 126,399 Thomson Corp. 3,659 120,751 Alberta Energy Co. Ltd. 2,769 120,643 Talisman Energy Inc. 2,538 105,710 Placer Dome Inc. 7,236 87,536 Brascan Corp. "A" 4,098 87,359 Potash Corp. of Saskatchewan Inc. 1,287 83,291 Shaw Communications Inc. "B" 4,563 81,742 Enbridge Inc. 2,850 79,905 Canadian Pacific Railway Ltd. 3,622 76,644 Abitibi-Consolidated Inc. 8,544 76,314 Inco Ltd.(1) 3,828 74,501 Canadian Natural Resources Ltd. 2,300 74,389 National Bank of Canada 3,573 72,674 George Weston Ltd. 1,005 72,443 Imperial Oil Ltd. 2,220 66,027 Quebecor World Inc. 2,511 65,631 Loblaw Companies Ltd. 1,716 62,653 Nova Chemicals Corp. 2,400 59,872 Noranda Corp. 5,004 59,123 ATI Technologies Inc./(1)/ 4,428 58,702 Fairmont Hotels & Resorts Inc. 1,811 51,059 Nexen Inc. 2,091 50,460 Dofasco Inc. 2,655 47,029 Cognos Inc./(1)/ 1,720 46,768 TransAlta Corp. 3,366 46,205 Rogers Communications "B"/(1)/ 3,111 42,510 TELUS Corp. 3,519 40,276 Precision Drilling Corp./(1)/ 1,101 35,175 Molson Inc. "A" 1,554 34,014 Teck Corp. "B" 3,495 32,751 Domtar Inc. 2,970 32,392 MDS Inc. 2,001 27,819 Zarlink Semiconductor Inc./(1)/ 2,700 25,859 Husky Energy Inc. 2,331 24,984 Canadian Tire Corp. Ltd. "A" 1,200 23,573 CAE Inc. 3,117 22,898 CP Ships Ltd. 1,811 21,738 Agrium Inc. 2,013 21,134 Cameco Corp. 600 17,394 Cott Corp./(1)/ 900 16,924 ------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $8,761,452) 6,717,173 ------------------------------------------------------------- SHORT TERM INSTRUMENTS - 0.07% ------------------------------------------------------------- Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 4,901 4,901 ------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $4,901) 4,901 ------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES - 99.56% (Cost $8,766,353) 6,722,074 ------------------------------------------------------------- Other Assets, Less Liabilities - 0.44% 29,999 ------------------------------------------------------------- NET ASSETS - 100.00% $6,752,073 ============================================================= /(1)/ Non-income earning securities. See notes to financial statements. 102 2002 iShares Annual Report to Shareholders iShares S&P Latin America 40 Index Fund Schedule of Investments March 31, 2002 Security Shares Value -------------------------------------------------------------------------------- COMMON STOCKS - 97.75% -------------------------------------------------------------------------------- ARGENTINA - 1.53% -------------------------------------------------------------------------------- Perez Companc SA ADR 5,400 $ 43,848 Siderca SAIC ADR 2,850 52,725 Telecom Argentina SA ADR 8,268 23,647 -------------------------------------------------------------------------------- 120,220 -------------------------------------------------------------------------------- BRAZIL - 37.58% -------------------------------------------------------------------------------- Aracruz Celulose SA ADR 3,600 74,340 Banco Bradesco SA ADR 10,980 332,255 Banco Itau SA ADR 8,301 332,870 Centrais Eletricas Brasileiras SA ADR 16,311 136,508 Companhia de Bebidas das Americas ADR 19,110 372,836 Companhia Energetica de Minas Gerais ADR 7,779 115,907 Companhia Paranaense de Energia-COPEL ADR 8,388 65,426 Companhia Vale do Rio Doce ADR 11,319 299,954 Embratel Participacoes SA ADR 17,460 60,237 Empresa Brasileira de Aeronautica SA ADR 4,862 98,115 Petroleo Brasileiro SA ADR 25,596 677,526 Tele Norte Leste Participacoes SA ADR 20,430 256,601 Unibanco - Uniao de Bancos Brasileiros SA GDR 5,580 136,431 -------------------------------------------------------------------------------- 2,959,006 -------------------------------------------------------------------------------- CHILE - 1.80% -------------------------------------------------------------------------------- Empresa Nacional de Electricidad SA ADR 8,509 79,985 Enersis SA ADR/(1)/ 4,233 38,266 Sociedad Quimica y Minera de Chile SA ADR 993 23,336 -------------------------------------------------------------------------------- 141,587 -------------------------------------------------------------------------------- MEXICO - 56.84% -------------------------------------------------------------------------------- Alfa SA "A"/(1)/ 48,300 76,473 America Movil SA de CV "L"/(1)/ 606,300 602,056 Apasco SA de CV 7,200 46,774 Carso Global Telecom "A1"/(1)/ 120,900 301,827 Cemex SA de CV "CPO" 117,900 693,181 Desc SA de CV "B" 39,300 23,981 Fomento Economico Mexicano SA de CV "UBD" 35,700 166,166 Grupo Carso SA de CV "A1"/(1)/ 29,700 119,290 Grupo Financiero BBVA Bancomer SA de CV "O"/(1)/ 287,700 315,060 Grupo Modelo SA de CV "C" 38,700 98,759 Grupo Televisa SA "CPO"/(1)/ 129,300 309,738 Kimberly-Clark de Mexico SA de CV "A" 51,300 173,035 Telefonos de Mexico SA de CV ADR "L" 607,800 1,220,645 Vitro SA de CV "A" 19,200 19,812 Walmart de Mexico SA de CV "V"/(1)/ 93,900 308,386 -------------------------------------------------------------------------------- 4,475,183 -------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $6,092,990) 7,695,996 -------------------------------------------------------------------------------- PREFERRED STOCKS - 1.10% -------------------------------------------------------------------------------- BRAZIL - 1.10% -------------------------------------------------------------------------------- Centrais Eletricas Brasileiras SA ADR 11,743 86,657 -------------------------------------------------------------------------------- 86,657 -------------------------------------------------------------------------------- TOTAL PREFERRED STOCKS (Cost: $73,942) 86,657 -------------------------------------------------------------------------------- SHORT TERM INSTRUMENTS - 0.21% -------------------------------------------------------------------------------- Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 16,663 16,663 -------------------------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $16,663) 16,663 -------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES - 99.06% (Cost $6,183,595) 7,799,316 -------------------------------------------------------------------------------- Other Assets, Less Liabilities - 0.94% 74,181 -------------------------------------------------------------------------------- NET ASSETS - 100.00% $ 7,873,497 ================================================================================ /(1)/ Non-income earning securities. See notes to financial statements. Schedules of Investments 103 iShares S&P/TOPIX 150 Index Fund Schedule of Investments March 31, 2002 Security Shares Value -------------------------------------------------------------------------------- COMMON STOCKS - 99.60% -------------------------------------------------------------------------------- Toyota Motor Corp. 77,700 $ 2,239,516 NTT DoCoMo Inc./(1)/ 555 1,504,176 Sony Corp. 26,400 1,372,438 Nippon Telegraph & Telephone Corp. 267 1,025,412 Honda Motor Co. Ltd. 21,900 920,383 Canon Inc. 24,000 890,935 Takeda Chemical Industries Ltd. 21,000 850,870 Nomura Holdings Inc. 54,000 700,391 Tokyo Electric Power Co. Inc. (The) 33,900 642,012 Hitachi Ltd. 87,000 636,083 Matsushita Electric Industrial Co. Ltd. 51,000 621,843 Nissan Motor Co. Ltd. 69,000 498,753 Rohm Co. Ltd. 3,300 495,492 Mitsubishi Tokyo Financial Group Inc. 69 421,700 Shin-Etsu Chemical Co. Ltd. 9,900 419,051 Murata Manufacturing Co. Ltd. 6,300 404,044 Nintendo Co. Ltd. 2,700 397,253 East Japan Railway Co. 90 378,240 Fuji Photo Film Co. Ltd. 12,000 377,561 NEC Corp. 45,000 374,845 Fujitsu Ltd. 48,000 367,603 Ito-Yokado Co. Ltd. 9,000 357,868 Kyocera Corp. 5,100 352,865 Toshiba Corp. 84,000 351,758 Kao Corp. 18,000 335,459 Ricoh Co. Ltd. 18,000 333,421 Sharp Corp. 24,000 316,536 Mitsubishi Heavy Industries Ltd. 93,000 304,538 Kansai Electric Power Co. Inc. 21,600 303,787 Tokyo Electron Ltd. 4,200 291,863 Sumitomo Mitsui Banking Corp. 69,000 287,378 Seven-Eleven Japan Co. Ltd. 9,000 279,775 Tokio Marine & Fire Insurance Co. Ltd. 39,000 276,900 Mizuho Holdings Inc. 114 271,807 Secom Co. Ltd. 6,000 265,288 Chubu Electric Power Co. Inc. 16,800 264,926 Mitsubishi Corp. 33,000 248,741 Mitsubishi Electric Corp. 54,000 248,540 Nippon Steel Corp. 171,000 245,146 Bridgestone Corp. 18,000 244,463 Yamanouchi Pharmaceutical Co. Ltd. 9,000 224,771 Mitsui & Co. Ltd. 36,000 219,744 Fanuc Ltd. 3,900 214,223 Mitsubishi Estate Co. Ltd. 30,000 214,131 Daiwa Securities Group Inc. 36,000 212,954 SMC Corp. 1,800 212,548 Sanyo Electric Co. Ltd. 45,000 204,736 Dai Nippon Printing Co. Ltd. 18,000 202,226 Denso Corp. 12,900 195,639 Central Japan Railway Co. 33 191,474 Hoya Corp. 2,700 188,848 Nippon Mitsubishi Oil Corp. 39,000 185,679 Nikko Cordial Corp. 42,000 185,384 Sankyo Co. Ltd. 12,000 183,348 Mitsui Sumitomo Insurance Co. Ltd. 39,000 183,323 Yamato Transport Co. Ltd. 12,000 181,537 Advantest Corp. 2,400 180,179 ORIX Corp. 2,400 179,998 Aeon Co. Ltd. 9,000 178,933 TDK Corp. 3,300 177,282 Keyence Corp. 900 171,940 Toppan Printing Co. Ltd. 18,000 169,223 Mitsui Fudosan Co. Ltd. 21,000 167,796 Tokyo Gas Co. Ltd. 69,000 167,118 NTT Data Corp. 39 166,258 Kirin Brewery Co. Ltd. 24,000 163,157 Kyushu Electric Power Co. Inc. 11,100 156,448 Asahi Glass Co. Ltd. 24,000 152,834 Eisai Co. Ltd. 6,000 148,036 Sumitomo Chemical Co. Ltd. 39,000 147,131 UFJ Holdings Inc. 60 143,962 Takefuji Corp. 2,280 139,688 West Japan Railway Company 36 138,258 Sumitomo Corp. 24,000 133,097 Fujisawa Pharmaceutical Co. Ltd. 6,000 131,739 Japan Tobacco Inc. 21 127,234 Acom Co. Ltd. 2,100 127,076 Osaka Gas Co. Ltd. 57,000 126,443 Nippon Television Network Corp. 540 122,843 Sumitomo Electric Industries Ltd. 18,000 121,552 Softbank Corp. 6,300 118,599 Nippon Unipac Holding 24 117,343 Japan Airlines Co. Ltd. 42,000 114,085 Oji Paper Co. Ltd. 24,000 113,722 Itochu Corp. 33,000 113,540 Daiichi Pharmaceutical Co. Ltd. 6,000 112,046 Ajinomoto Co. Inc. 12,000 108,650 Daikin Industries Ltd. 6,000 108,650 Marui Co. Ltd. 9,000 107,971 Sekisui House Ltd. 15,000 107,065 104 2002 iShares Annual Report to Shareholders iShares S&P/TOPIX 150 Index Fund Schedule of Investments (continued) March 31, 2002 Security Shares Value ----------------------------------------------------------------- COMMON STOCKS (continued) ----------------------------------------------------------------- Asahi Kasei Corp. 33,000 $ 106,818 Suzuki Motor Corp. 9,000 106,002 All Nippon Airways Co. Ltd./(1)/ 39,000 105,347 Nitto Denko Corp. 3,600 105,119 Mitsubishi Chemical Corp. 48,000 103,219 Nippon Express Co. Ltd. 24,000 98,328 Nippon Yusen Kabushiki Kaisha 30,000 97,560 Asahi Breweries Ltd. 12,000 96,880 Shiseido Co. Ltd. 9,000 93,371 Pioneer Corp. 4,800 92,353 Taisho Pharmaceutical Co. Ltd. 6,000 90,769 Toray Industries Inc. 33,000 90,631 Furukawa Electric Co. Ltd. 18,000 87,327 Komatsu Ltd. 24,000 85,834 Kubota Corp. 27,000 83,322 Matsushita Communication Industrial Co. Ltd. 2,400 82,393 Mabuchi Motor Co. Ltd. 900 82,167 Credit Saison Co. Ltd. 3,900 81,363 Mitsui Chemicals Inc. 18,000 78,772 Tostem Corp. 6,000 78,092 Promise Co. Ltd. 1,800 77,278 Kawasaki Steel Corp./(1)/ 72,000 75,514 Sumitomo Trust & Banking Co. Ltd. (The) 18,000 75,512 Daiwa House Industry Co. Ltd. 12,000 75,150 Fuji Heavy Industries Ltd. 15,000 73,225 Alps Electric Co. Ltd. 6,000 72,434 Matsushita Electric Works Ltd. 9,000 68,585 NKK Corp./(1)/ 87,000 68,269 Terumo Corp. 5,100 66,302 Hirose Electric Co. Ltd. 900 62,881 Mitsui Mining & Smelting Co. Ltd. 18,000 60,844 Shimizu Corp. 18,000 60,709 Sumitomo Metal Mining Co. Ltd. 15,000 59,983 Kajima Corp. 24,000 59,215 Taisei Corp. 27,000 59,079 Nippon Meat Packers Inc. 6,000 58,400 Minebea Co. Ltd. 9,000 58,060 Kuraray Co. Ltd. 9,000 57,517 NSK Ltd. 12,000 51,881 Obayashi Corp. 18,000 50,659 Ebara Corporation 9,000 49,844 Mitsubishi Materials Corp. 30,000 49,797 Taiyo Yuden Co. Ltd. 3,000 49,572 Nissin Food Products Co. Ltd. 2,700 49,300 Ibiden Co. Ltd. 3,000 48,214 TonenGeneral Sekiyu K.K. 6,000 45,497 Mazda Motor Corp. 18,000 44,003 NGK Insulators Ltd. 6,000 43,551 Nippon Sheet Glass Co. Ltd. 12,000 42,827 Daiwa Bank Holdings Inc./(1)/ 66,000 41,831 Toyo Seikan Kaisha Ltd. 3,000 36,285 Nisshin Seifun Group Inc. 6,000 36,127 Kawasaki Heavy Industries Ltd./(1)/ 36,000 35,856 Fujikura Ltd. 9,000 33,953 Sekisui Chemical Co. Ltd. 12,000 33,319 Uni-Charm Corp. 1,200 32,957 Sumitomo Metal Industries Ltd./(1)/ 84,000 30,425 Marubeni Corp./(1)/ 39,000 28,837 Mitsubishi Logistics Corp. 3,000 22,115 Mitsui Trust Holdings Inc. 9,000 14,396 ----------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $34,670,607) 32,985,991 ----------------------------------------------------------------- SHORT TERM INSTRUMENTS - 9.29% ----------------------------------------------------------------- Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 1,787,749 1,787,749 Dreyfus Money Market Fund 548,158 548,158 Goldman Sachs Financial Square Prime Obligation Fund 170,912 170,912 Providian Temp Cash Money Market Fund 570,084 570,084 ----------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $3,076,903) 3,076,903 ----------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 108.89% (Cost $37,747,510) 36,062,894 ----------------------------------------------------------------- Other Assets, Less Liabilities -- (8.89%) (2,945,707) ----------------------------------------------------------------- NET ASSETS -- 100.00% $33,117,187 ================================================================= /(1)/ Non-income earning securities. See notes to financial statements. Schedules of Investments 105 iShares Nasdaq Biotechnology Index Fund Schedule of Investments March 31, 2002 Security Shares Value ------------------------------------------------------------------- COMMON STOCKS - 100.03% ------------------------------------------------------------------- Amgen Inc./(1)/ 851,074 $ 50,792,096 Immunex Corp./(1)/ 503,324 15,230,584 MedImmune Inc./(1)/ 256,779 10,099,118 IDEC Pharmaceuticals Corp./(1)/ 157,057 10,098,765 Gilead Sciences Inc./(1)/ 278,379 10,018,860 Genzyme Corp. - General Division/(1)/ 223,021 9,739,327 Chiron Corp./(1)/ 194,596 8,930,010 Biogen Inc./(1)/ 146,914 7,207,601 Millennium Pharmaceuticals Inc./(1)/ 287,853 6,421,997 Neurocrine Biosciences Inc./(1)/ 147,139 5,972,372 NPS Pharmaceuticals Inc./(1)/ 182,823 5,965,515 Cephalon Inc./(1)/ 93,168 5,869,584 Scios Inc./(1)/ 179,589 5,195,510 Cell Therapeutics Inc./(1)/ 204,431 5,076,022 InterMune Inc./(1)/ 166,335 5,001,693 Alkermes Inc./(1)/ 190,490 4,964,169 Regeneron Pharmaceuticals Inc./(1)/ 167,741 4,191,848 Celgene Corp./(1)/ 169,354 4,191,512 Transkaryotic Therapies Inc./(1)/ 96,998 4,175,764 ICOS Corp./(1)/ 90,641 4,168,580 Genta Inc./(1)/ 242,521 4,067,077 CV Therapeutics Inc./(1)/ 111,601 4,039,956 Trimeris Inc./(1)/ 87,927 3,798,446 OSI Pharmaceuticals Inc./(1)/ 96,185 3,765,643 Abgenix Inc./(1)/ 189,405 3,577,861 Vertex Pharmaceuticals Inc./(1)/ 128,419 3,577,753 Invitrogen Corp./(1)/ 103,731 3,560,048 Enzon Inc./(1)/ 76,358 3,381,896 Medarex Inc./(1)/ 207,347 3,344,300 ImClone Systems Inc./(1)/ 134,618 3,315,641 Immunomedics Inc./(1)/ 173,827 3,295,760 Isis Pharmaceuticals Inc./(1)/ 196,041 3,152,339 Incyte Genomics Inc./(1)/ 263,004 3,129,748 Human Genome Sciences Inc./(1)/ 137,610 2,998,522 Protein Design Labs Inc./(1)/ 171,716 2,941,495 Albany Molecular Research Inc./(1)/ 120,112 2,879,085 Tularik Inc./(1)/ 174,991 2,876,852 Myriad Genetics Inc./(1)/ 84,878 2,844,262 Exelixis Inc./(1)/ 205,089 2,828,177 QLT Inc./(1)/ 165,340 2,819,047 CuraGen Corp./(1)/ 172,457 2,769,659 Affymetrix Inc./(1)/ 94,455 2,737,306 Alexion Pharmaceuticals Inc./(1)/ 99,704 2,344,041 Cell Genesys Inc./(1)/ 137,924 2,337,812 Cubist Pharmaceuticals Inc./(1)/ 126,002 2,328,517 Immunogen Inc./(1)/ 198,854 2,201,314 Tanox Inc./(1)/ 148,343 2,100,537 Inhale Therapeutic Systems Inc./(1)/ 185,668 1,958,797 ILEX Oncology Inc./(1)/ 112,320 1,938,643 Gene Logic Inc./(1)/ 97,509 1,897,525 Luminex Corp./(1)/ 131,856 1,656,111 Medicines Co. (The)/(1)/ 102,936 1,467,867 Caliper Technologies Corp./(1)/ 105,673 1,370,579 Antigenics Inc./(1)/ 95,281 1,332,981 Corixa Corp./(1)/ 189,048 1,166,426 Atrix Laboratories Inc./(1)/ 49,031 1,116,436 Pharmacopeia Inc./(1)/ 83,360 1,109,522 Arena Pharmaceuticals Inc./(1)/ 107,931 1,074,993 Praecis Pharmaceuticals Inc./(1)/ 201,606 1,048,351 NeoPharm Inc./(1)/ 41,087 882,960 Emisphere Technologies Inc./(1)/ 51,417 874,603 Guilford Pharmaceuticals Inc./(1)/ 96,954 690,313 United Therapeutics Inc./(1)/ 48,595 654,089 Arqule Inc./(1)/ 50,445 637,120 Avigen Inc./(1)/ 47,020 521,922 SuperGen Inc./(1)/ 91,736 516,474 Geron Corp./(1)/ 63,015 479,544 EntreMed Inc./(1)/ 59,101 449,168 VaxGen Inc./(1)/ 36,965 422,140 ViroPharma Inc./(1)/ 57,071 290,491 ------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $345,442,037) 289,881,076 ------------------------------------------------------------------- 106 2002 iShares Annual Report to Shareholders iShares Nasdaq Biotechnology Index Fund Schedule of Investments (continued) March 31, 2002 Shares or Security Principal Value ----------------------------------------------------------------------- SHORT TERM INSTRUMENTS - 12.58% ----------------------------------------------------------------------- Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 21,525,270 $ 21,525,270 Dreyfus Money Market Fund 6,563,368 6,563,368 General Electric Commercial Paper 1.86%, 05/10/02 $ 1,000,000 1,000,000 Goldman Sachs Financial Square Prime Obligation Fund 1,046,409 1,046,409 Providian Temp Cash Money Market Fund 6,325,902 6,325,902 ----------------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $36,460,949) 36,460,949 ----------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 112.61% (Cost $381,902,986) 326,342,025 ----------------------------------------------------------------------- Other Assets, Less Liabilities -- (12.61%) (36,534,973) ----------------------------------------------------------------------- NET ASSETS -- 100.00% $289,807,052 ======================================================================= /(1)/ Non-income earning securities. See notes to financial statements. Schedules of Investments 107 iShares Trust Statements of Assets and Liabilities March 31, 2002
iShares S&P ------------------------------------------------------------------------------------ MidCap 500/BARRA 500/BARRA MidCap 400/BARRA 100 500 Growth Value 400 Growth Index Fund Index Fund Index Fund Index Fund Index Fund Index Fund ----------------------------------------------------------------------------------------------------------------------------------- ASSETS Investments at cost $144,533,115 $4,842,832,896 $497,414,532 $636,199,267 $623,071,587 $257,398,563 ------------------------------------------------------------------------------------ Investments in securities, at value (including securities on loan/(1)/) (Note 1) $116,364,796 $4,279,782,312 $478,453,322 $600,205,551 $658,155,000 $272,194,136 Receivables: Investment securities sold -- -- -- -- 193,368 -- Dividends and interest 203,967 4,457,878 511,221 606,879 473,156 81,872 ------------------------------------------------------------------------------------ Total Assets 116,568,763 4,284,240,190 478,964,543 600,812,430 658,821,524 272,276,008 ------------------------------------------------------------------------------------ LIABILITIES Payables: Investment securities purchased -- -- -- -- 165,720 -- Collateral for securities on loan (Note 5) 810,205 74,693,674 14,182,480 14,602,719 52,907,500 19,818,391 Advisory fees (Note 2) 55,587 600,519 126,390 159,127 177,730 98,431 ------------------------------------------------------------------------------------ Total Liabilities 865,792 75,294,193 14,308,870 14,761,846 53,250,950 19,916,822 ------------------------------------------------------------------------------------ NET ASSETS $115,702,971 $4,208,945,997 $464,655,673 $586,050,584 $605,570,574 $252,359,186 ==================================================================================== Net assets consist of: Paid-in capital $147,891,316 $4,848,387,649 $505,421,021 $649,660,558 $584,609,528 $260,164,769 Undistributed net investment income 76,168 2,079,880 187,493 286,251 150,182 19,364 Undistributed net realized loss (4,096,194) (78,470,948) (21,991,631) (27,902,509) (14,272,549) (22,620,520) Net unrealized appreciation (depreciation) (28,168,319) (563,050,584) (18,961,210) (35,993,716) 35,083,413 14,795,573 ------------------------------------------------------------------------------------ NET ASSETS $115,702,971 $4,208,945,997 $464,655,673 $586,050,584 $605,570,574 $252,359,186 ==================================================================================== iShares outstanding 2,000,000 36,600,000 7,900,000 10,500,000 5,600,000 2,150,000 ==================================================================================== Net asset value per iShare $ 57.85 $ 115.00 $ 58.82 $ 55.81 $ 108.14 $ 117.38 ====================================================================================
-------------------------------------------------------------------------------- /(1)/ Securities on loan with market values of $762,737, $71,187,087, $13,718,035, $13,997,657, $51,074,570 and $19,191,420, respectively. See Note 5. See notes to financial statements. 108 2002 iShares Annual Report to Shareholders iShares Trust Statements of Assets and Liabilities (continued) March 31, 2002
iShares S&P ------------------------------------------------------------------------------------ Midcap Smallcap Smallcap 400/BARRA Smallcap 600/BARRA 600/BARRA Global Value 600 Growth Value Global 100 Energy Sector Index Fund Index Fund Index Fund Index Fund Index Fund Index Fund ------------------------------------------------------------------------------------------------------------------------------ ASSETS Investments at cost $445,757,767 $1,152,921,122 $194,653,205 $457,325,602 $ 59,677,541 $14,901,087 ------------------------------------------------------------------------------------ Foreign currency, at cost $ -- $ -- $ -- $ -- $ 86,095 $ 26,752 ------------------------------------------------------------------------------------ Investments in securities, at value (including securities on loan/(1)/) (Note 1) $486,161,190 $1,230,366,089 $208,045,182 $497,715,108 $ 47,775,771 $16,345,952 Foreign currency, at value -- -- -- -- 84,513 26,688 Receivables: Investment securities sold -- 2,703,667 273,221 1,795,999 61,635 -- Dividends and interest 508,963 659,471 58,917 354,387 106,419 15,581 ------------------------------------------------------------------------------------ Total Assets 486,670,153 1,233,729,227 208,377,320 499,865,494 48,028,338 16,388,221 ------------------------------------------------------------------------------------ LIABILITIES Payables: Investment securities purchased 243,053 2,708,054 250,568 1,863,898 139,973 -- Collateral for securities on loan (Note 5) 31,594,467 105,905,629 16,583,310 40,246,934 2,192,904 -- Advisory fees (Note 2) 149,594 303,629 67,944 144,370 29,118 16,210 ------------------------------------------------------------------------------------ Total Liabilities 31,987,114 108,917,312 16,901,822 42,255,202 2,361,995 16,210 ------------------------------------------------------------------------------------ NET ASSETS $454,683,039 $1,124,811,915 $191,475,498 $457,610,292 $ 45,666,343 $16,372,011 ==================================================================================== Net assets consist of: Paid-in capital $419,482,689 $1,064,857,073 $187,622,899 $425,992,586 $ 58,392,264 $14,891,596 Undistributed net investment income 154,828 338,579 -- 228,480 126,538 44,499 Undistributed net realized loss (5,357,901) (17,828,704) (9,539,378) (9,000,280) (949,164) (8,839) Net unrealized appreciation (depreciation) 40,403,423 77,444,967 13,391,977 40,389,506 (11,903,295) 1,444,755 ------------------------------------------------------------------------------------ NET ASSETS $454,683,039 $1,124,811,915 $191,475,498 $457,610,292 $ 45,666,343 $16,372,011 ==================================================================================== iShares outstanding 4,600,000 9,150,000 2,400,000 4,850,000 800,000 300,000 ==================================================================================== Net asset value per iShare $ 98.84 $ 122.93 $ 79.78 $ 94.35 $ 57.08 $ 54.57 ====================================================================================
-------------------------------------------------------------------------------- /(1)/ Securities on loan with market values of $30,318,566, $101,944,957, $15,968,561, $38,552,323, $2,065,862 and $--, respectively. See Note 5. See notes to financial statements. Financial Statements 109 iShares Trust Statements of Assets and Liabilities (continued) March 31, 2002
iShares S&P ------------------------------------------------------------------------------- Global Global Global Global Tele- Financials Healthcare Technology communications Sector Sector Sector Sector Europe 350 /TSE 60 Index Fund Index Fund Index Fund Index Fund Index Fund Index Fund ------------------------------------------------------------------------------------------------------------------------- ASSETS Investments at cost $10,191,533 $17,465,172 $8,767,491 $15,199,740 $627,948,945 $ 8,766,353 ------------------------------------------------------------------------------- Foreign currency, at cost $ 20,282 $ 28,892 $ 3,128 $ 14,767 $ 356,380 $ 21,088 ------------------------------------------------------------------------------- Investments in securities, at value (including securities on loan/(1)/) (Note 1) $10,611,444 $17,136,243 $7,869,385 $13,437,206 $604,387,888 $ 6,722,074 Foreign currency, at value 20,336 28,474 3,051 14,685 357,080 21,018 Receivables: Investment securities sold -- -- -- -- 218,491 -- Dividends and interest 42,342 25,363 7,468 13,664 1,169,322 14,351 ------------------------------------------------------------------------------- Total Assets 10,674,122 17,190,080 7,879,904 13,465,555 606,132,781 6,757,443 ------------------------------------------------------------------------------- LIABILITIES Payables: Investment securities purchased -- -- -- -- 1,403,446 -- Collateral for securities on loan (Note 5) -- -- 75,069 -- 34,719,699 -- Advisory fees (Note 2) 10,769 17,997 18,390 14,106 252,297 5,370 ------------------------------------------------------------------------------- Total Liabilities 10,769 17,997 93,459 14,106 36,375,442 5,370 ------------------------------------------------------------------------------- NET ASSETS $10,663,353 $17,172,083 $7,786,445 $13,451,449 $569,757,339 $ 6,752,073 =============================================================================== Net assets consist of: Paid-in capital $10,199,110 $17,476,128 $8,710,899 $15,205,292 $598,659,998 $ 8,847,179 Undistributed net investment income (accumulated net investment loss) 48,230 34,516 (554) 29,866 666,421 17,015 Undistributed net realized loss (4,081) (9,176) (25,684) (21,156) (6,008,378) (67,738) Net unrealized appreciation (depreciation) 420,094 (329,385) (898,216) (1,762,553) (23,560,702) (2,044,383) ------------------------------------------------------------------------------- NET ASSETS $10,663,353 $17,172,083 $7,786,445 $13,451,449 $569,757,339 $ 6,752,073 =============================================================================== iShares outstanding 200,000 350,000 150,000 300,000 9,650,000 150,000 =============================================================================== Net asset value per iShare $ 53.32 $ 49.06 $ 51.91 $ 44.84 $ 59.04 $ 45.01 ===============================================================================
-------------------------------------------------------------------------------- /(1)/ Securities on loan with market values of $--, $--, $71,301, $--, $32,679,003 and $--, respectively. See Note 5. See notes to financial statements. 110 2002 iShares Annual Report to Shareholders iShares Trust Statements of Assets and Liabilities (continued) March 31, 2002
iShares S&P iShares Nasdaq ---------------------- -------------- Latin Bio- America 40 /TOPIX 150 technology Index Fund Index Fund Index Fund ------------------------------------------------------------------------------------------------ ASSETS Investments at cost $6,183,595 $37,747,510 $381,902,986 -------------------------------------- Foreign currency, at cost $ 19,426 $ 12,331 $ -- -------------------------------------- Investments in securities, at value (including securities on loan/(1)/) (Note 1) $7,799,316 $36,062,894 $326,342,025 Foreign currency, at value 19,554 12,182 -- Receivables: Investment securities sold -- -- 99,728 Dividends and interest 60,702 110,724 14,406 -------------------------------------- Total Assets 7,879,572 36,185,800 326,456,159 -------------------------------------- LIABILITIES Payables: Collateral for securities on loan (Note 5) -- 3,043,260 36,438,455 Advisory fees (Note 2) 6,075 25,353 210,652 -------------------------------------- Total Liabilities 6,075 3,068,613 36,649,107 -------------------------------------- NET ASSETS $7,873,497 $33,117,187 $289,807,052 ====================================== Net assets consist of: Paid-in capital $6,226,193 $34,773,370 $349,725,621 Undistributed net investment income 50,630 44,591 -- Undistributed net realized loss (19,177) (16,121) (4,357,608) Net unrealized appreciation (depreciation) 1,615,851 (1,684,653) (55,560,961) -------------------------------------- NET ASSETS $7,873,497 $33,117,187 $289,807,052 ====================================== iShares outstanding 150,000 450,000 3,750,000 ====================================== Net asset value per iShare $ 52.49 $ 73.59 $ 77.28 ======================================
-------------------------------------------------------------------------------- /(1)/ Securities on loan with market values of $--, $2,552,628 and $34,825,674, respectively. See Note 5. See notes to financial statements. Financial Statements 111 iShares Trust Statements of Operations Year Ended March 31, 2002
iShares S&P ---------------------------------------------------------------------------------- MidCap 500/BARRA 500/BARRA MidCap 400/BARRA 100 500 Growth Value 400 Growth Index Fund Index Fund Index Fund Index Fund Index Fund Index Fund ---------------------------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME Dividends/(1)/ $ 2,175,110 $ 41,516,145 $ 2,995,804 $ 8,002,527 $ 3,804,047 $ 589,072 Interest 3,393 45,736 4,179 7,378 6,703 618 Securities lending income 3,209 175,628 25,135 40,204 77,234 30,851 ---------------------------------------------------------------------------------- Total investment income 2,181,712 41,737,509 3,025,118 8,050,109 3,887,984 620,541 ---------------------------------------------------------------------------------- EXPENSES (NOTE 2) Advisory fees 330,327 2,901,467 543,734 833,280 724,902 391,698 ---------------------------------------------------------------------------------- Total expenses 330,327 2,901,467 543,734 833,280 724,902 391,698 ---------------------------------------------------------------------------------- Net investment income 1,851,385 38,836,042 2,481,384 7,216,829 3,163,082 228,843 ---------------------------------------------------------------------------------- NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from: Investments (6,418,462) (72,670,569) (16,154,392) (27,205,825) (12,536,444) (17,734,047) In-kind redemptions (6,493,940) 135,814,716 738,110 13,210,650 6,694,480 7,050,155 ---------------------------------------------------------------------------------- Net realized gain (loss) (12,912,402) 63,144,147 (15,416,282) (13,995,175) (5,841,964) (10,683,892) ---------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on investments (7,000,453) (36,155,639) 14,927,613 (9,270,516) 63,400,847 39,991,393 ---------------------------------------------------------------------------------- Net realized and unrealized gain (loss) (19,912,855) 26,988,508 (488,669) (23,265,691) 57,558,883 29,307,501 ---------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $(18,061,470) $ 65,824,550 $ 1,992,715 $(16,048,862) $ 60,721,965 $ 29,536,344 ================================================================================== ----------------------------------------------------------------------------------------------------------------------------
/(1)/ Net of foreign withholding tax of: $158, $146,986, $2,180, $43,057, $-- and $--, respectively. See notes to financial statements. 112 2002 iShares Annual Report to Shareholders iShares Trust Statements of Operations (continued) Year Ended March 31, 2002
iShares S&P ----------------------------------------------------------------------------------- MidCap SmallCap SmallCap 400/BARRA SmallCap 600/BARRA 600/BARRA Global Value 600 Growth Value Global 100 Energy Sector Index Fund Index Fund Index Fund Index Fund Index Fund Index Fund/(2)/ ------------------------------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME Dividends/(1)/ $ 3,714,594 $ 3,987,233 $ 283,227 $ 2,257,373 $ 935,726 $ 102,732 Interest 5,467 9,580 1,643 5,575 2,802 140 Securities lending income 44,920 230,213 27,866 82,101 6,679 -- ----------------------------------------------------------------------------------- Total investment income 3,764,981 4,227,026 312,736 2,345,049 945,207 102,872 ----------------------------------------------------------------------------------- EXPENSES (NOTE 2) Advisory fees 560,048 1,055,506 198,704 500,287 256,616 36,617 ----------------------------------------------------------------------------------- Total expenses 560,048 1,055,506 198,704 500,287 256,616 36,617 ----------------------------------------------------------------------------------- Net investment income 3,204,933 3,171,520 114,032 1,844,762 688,591 66,255 ----------------------------------------------------------------------------------- NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from: Investments (5,984,654) (17,854,890) (6,764,220) (9,235,354) (903,938) (8,839) In-kind redemptions 11,164,296 14,133,495 2,571,422 13,505,557 (8,128,140) -- Foreign currency transactions -- -- -- -- (14,918) (298) ----------------------------------------------------------------------------------- Net realized gain (loss) 5,179,642 (3,721,395) (4,192,798) 4,270,203 (9,046,996) (9,137) ----------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on: Investments 41,089,722 88,741,661 17,701,679 41,827,684 6,704,154 1,444,865 Translation of assets and liabilities in foreign currencies -- -- -- -- 1,815 (110) ----------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) 41,089,722 88,741,661 17,701,679 41,827,684 6,705,969 1,444,755 ----------------------------------------------------------------------------------- Net realized and unrealized gain (loss) 46,269,364 85,020,266 13,508,881 46,097,887 (2,341,027) 1,435,618 ----------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $49,474,297 $ 88,191,786 $13,622,913 $47,942,649 $(1,652,436) $1,501,873 ===================================================================================
-------------------------------------------------------------------------------- /(1)/ Net of foreign withholding tax of: $--, $--, $--, $--, $71,101 and $5,346, respectively. /(2)/ For the period from November 12, 2001 (commencement of operations) to March 31, 2002. See notes to financial statements. Financial Statements 113 iShares Trust Statements of Operations (continued) Year Ended March 31, 2002
iShares S&P ------------------------------------------------------------------------------------------- Global Global Global Global Tele- Financials Healthcare Technology Communications Sector Sector Sector Sector Europe 350 /TSE 60 Index Fund/(2)/ Index Fund/(3)/ Index Fund/(2)/ Index Fund/(2)/ Index Fund Index Fund ------------------------------------------------------------------------------------------------------------------------------------ NET INVESTMENT INCOME Dividends/(1)/ $ 82,464 $ 80,255 $ 13,202 $ 69,832 $ 3,970,332 $103,515 Interest 118 141 122 158 13,840 132 Securities lending income -- -- 31 -- 105,083 -- ------------------------------------------------------------------------------------------- Total investment income 82,582 80,396 13,355 69,990 4,089,255 103,647 ------------------------------------------------------------------------------------------- EXPENSES (NOTE 2) Advisory fees 25,560 40,999 42,442 35,943 1,176,579 33,633 ------------------------------------------------------------------------------------------- Total expenses 25,560 40,999 42,442 35,943 1,176,579 33,633 ------------------------------------------------------------------------------------------- Net investment income (loss) 57,022 39,397 (29,087) 34,047 2,912,676 70,014 ------------------------------------------------------------------------------------------- NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from: Investments (4,204) (9,176) (25,684) (21,156) (2,475,279) (35,654) In-kind redemptions -- -- 409,796 -- 1,803,156 -- Foreign currency transactions (97) (15) (554) 428 (26,902) (417) ------------------------------------------------------------------------------------------- Net realized gain (loss) (4,301) (9,191) 383,558 (20,728) (699,025) (36,071) ------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on: Investments 419,911 (328,929) (898,106) (1,762,534) (5,897,650) 126,120 Translation of assets and liabilities in foreign currencies 183 (456) (110) (19) 9,533 186 ------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) 420,094 (329,385) (898,216) (1,762,553) (5,888,117) 126,306 ------------------------------------------------------------------------------------------- Net realized and unrealized gain (loss) 415,793 (338,576) (514,658) (1,783,281) (6,587,142) 90,235 ------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $472,815 $(299,179) $(543,745) $(1,749,234) $(3,674,466) $160,249 ===========================================================================================
-------------------------------------------------------------------------------- /(1)/ Net of foreign withholding tax of: $4,607, $6,718, $830, $3,126, $594,441 and $18,320, respectively. /(2)/ For the period from November 12, 2001 (commencement of operations) to March 31, 2002. /(3)/ For the period from November 13, 2001 (commencement of operations) to March 31, 2002. See notes to financial statements. 114 2002 iShares Annual Report to Shareholders iShares Trust Statements of Operations (continued) Year Ended March 31, 2002
iShares S&P iShares Nasdaq -------------------------------------------- -------------- Latin America 40 /TOPIX 150 Biotechnology Index Fund/(2)/ Index Fund/(3)/ Index Fund ------------------------------------------------------------------------------------------------------ NET INVESTMENT INCOME Dividends/(1)/ $ 105,547 $ 109,934 $ -- Interest 133 671 3,123 Securities lending income -- 2,837 64,264 ------------------------------------------------------------ Total investment income 105,680 113,442 67,387 ------------------------------------------------------------ EXPENSES (NOTE 2) Advisory fees 15,268 68,755 822,823 ------------------------------------------------------------ Total expenses 15,268 68,755 822,823 ------------------------------------------------------------ Net investment income (loss) 90,412 44,687 (755,436) ------------------------------------------------------------ NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from: Investments (19,177) (16,120) (4,572,745) In-kind redemptions -- -- 9,856,783 Foreign currency transactions 92 (97) -- ------------------------------------------------------------ Net realized gain (loss) (19,085) (16,217) 5,284,038 ------------------------------------------------------------ Net change in unrealized appreciation (depreciation) on: Investments 1,615,721 (1,684,616) (27,836,288) Translation of assets and liabilities in foreign currencies 130 (37) -- ------------------------------------------------------------ Net change in unrealized appreciation (depreciation) 1,615,851 (1,684,653) (27,836,288) ------------------------------------------------------------ Net realized and unrealized gain (loss) 1,596,766 (1,700,870) (22,552,250) ------------------------------------------------------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $1,687,178 $(1,656,183) $(23,307,686) ============================================================ ------------------------------------------------------------------------------------------------------
/(1)/ Net of foreign withholding tax of: $881, $19,400 and $--, respectively. /(2)/ For the period from October 25, 2001 (commencement of operations) to March 31, 2002. /(3)/ For the period from October 23, 2001 (commencement of operations) to March 31, 2002. See notes to financial statements. Financial Statements 115 iShares Trust Statements of Changes in Net Assets
iShares S&P 500/BARRA iShares S&P 100 Index Fund iShares S&P 500 Index Fund Growth Index Fund ------------------------------ ------------------------------- ------------------------------ For the period For the period For the period For the October 23, For the May 15, For the May 22, year ended 2000/(1)/ to year ended 2000/(1)/ to year ended 2000/(1)/ to March 31, 2002 March 31, 2001 March 31, 2002 March 31, 2001 March 31, 2002 March 31, 2001 --------------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income $ 1,851,385 $ 672,111 $ 38,836,042 $ 15,640,674 $ 2,481,384 $ 407,080 Net realized gain (loss) (12,912,402) (7,703,309) 63,144,147 29,660,250 (15,416,282) (9,062,793) Net change in unrealized appreciation (depreciation) (7,000,453) (21,167,866) (36,155,639) (526,894,945) 14,927,613 (33,888,823) ----------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (18,061,470) (28,199,064) 65,824,550 (481,594,021) 1,992,715 (42,544,536) ----------------------------------------------------------------------------------------------- Distributions to iShareholders: From net investment income (1,797,714) (649,614) (37,970,041) (14,405,609) (2,312,036) (388,935) From net realized gain -- -- -- (978,894) -- (179,829) ----------------------------------------------------------------------------------------------- Total distributions to iShareholders (1,797,714) (649,614) (37,970,041) (15,384,503) (2,312,036) (568,764) ----------------------------------------------------------------------------------------------- iShares Transactions: iShares sold 223,696,594 255,638,224 2,604,641,421 3,970,896,590 395,680,297 184,633,405 iShares redeemed (176,896,167) (138,027,818) (1,300,388,729) (597,079,270) (72,225,408) -- ----------------------------------------------------------------------------------------------- Net increase in net assets from iShares transactions 46,800,427 117,610,406 1,304,252,692 3,373,817,320 323,454,889 184,633,405 ----------------------------------------------------------------------------------------------- Increase in net assets 26,941,243 88,761,728 1,332,107,201 2,876,838,796 323,135,568 141,520,105 NET ASSETS: Beginning of period 88,761,728 -- 2,876,838,796 -- 141,520,105 -- ----------------------------------------------------------------------------------------------- End of period $ 115,702,971 $ 88,761,728 $ 4,208,945,997 $2,876,838,796 $464,655,673 $141,520,105 =============================================================================================== Undistributed net investment income included in net assets at end of period $ 76,168 $ 22,497 $ 2,079,880 $ 1,235,065 $ 187,493 $ 18,145 =============================================================================================== iSHARES ISSUED AND REDEEMED: iShares sold 3,550,000 3,510,000 22,350,000 29,500,000 6,700,000 2,500,000 iShares redeemed (3,050,000) (2,010,000) (10,500,000) (4,750,000) (1,300,000) -- ----------------------------------------------------------------------------------------------- Net increase in iShares outstanding 500,000 1,500,000 11,850,000 24,750,000 5,400,000 2,500,000 =============================================================================================== ---------------------------------------------------------------------------------------------------------------------------------
/(1)/ Commencement of operations. See notes to financial statements. 116 2002 iShares Annual Report to Shareholders iShares Trust Statements of Changes in Net Assets (continued)
iShares S&P 500/BARRA iShares S&P Midcap 400 iShares S&P Midcap 400/BARRA Value Index Fund Index Fund Growth Index Fund ------------------------------ ------------------------------ ------------------------------ For the period For the period For the period For the May 22, For the May 22, For the July 24, year ended 2000/(1)/ to year ended 2000/(1)/ to year ended 2000/(1)/ To March 31, 2002 March 31, 2001 March 31, 2002 March 31, 2001 March 31, 2002 March 31, 2001 ---------------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income $ 7,216,829 $ 2,086,690 $ 3,163,082 $ 1,517,388 $ 228,843 $ 25,123 Net realized gain (loss) (13,995,175) 9,252,905 (5,841,964) 26,831,230 (10,683,892) (4,917,468) Net change in unrealized appreciation (depreciation) (9,270,516) (26,723,200) 63,400,847 (28,317,434) 39,991,393 (25,195,820) --------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (16,048,862) (15,383,605) 60,721,965 31,184 29,536,344 (30,088,165) --------------------------------------------------------------------------------------------- Distributions to iShareholders: From net investment income (7,172,724) (1,837,737) (3,053,610) (1,473,578) (223,214) (19,312) From net realized gain -- (485,753) -- (701,610) -- (351,372) --------------------------------------------------------------------------------------------- Total distributions to iShareholders (7,172,724) (2,323,490) (3,053,610) (2,175,188) (223,214) (370,684) --------------------------------------------------------------------------------------------- iShares Transactions: iShares sold 301,439,774 450,615,485 425,727,004 359,352,127 183,707,326 265,907,708 iShares redeemed (59,871,433) (65,204,561) (33,829,653) (201,203,255) (122,753,731) (73,356,398) --------------------------------------------------------------------------------------------- Net increase in net assets from iShares transactions 241,568,341 385,410,924 391,897,351 158,148,872 60,953,595 192,551,310 --------------------------------------------------------------------------------------------- Increase in net assets 218,346,755 367,703,829 449,565,706 156,004,868 90,266,725 162,092,461 NET ASSETS: Beginning of period 367,703,829 -- 156,004,868 -- 162,092,461 -- --------------------------------------------------------------------------------------------- End of period $586,050,584 $367,703,829 $605,570,574 $ 156,004,868 $ 252,359,186 $162,092,461 ============================================================================================= Undistributed net investment income included in net assets at end of period $ 286,251 $ 248,953 $ 150,182 $ 43,810 $ 19,364 $ 5,811 ============================================================================================= iSHARES ISSUED AND REDEEMED: iShares sold 5,300,000 7,300,000 4,250,000 3,650,000 1,650,000 2,200,000 iShares redeemed (1,000,000) (1,100,000) (350,000) (1,950,000) (1,100,000) (600,000) --------------------------------------------------------------------------------------------- Net increase in iShares outstanding 4,300,000 6,200,000 3,900,000 1,700,000 550,000 1,600,000 =============================================================================================
------------------------------------------------------------------------------- /(1)/ Commencement of operations. See notes to financial statements. Financial Statements 117 iShares Trust Statements of Changes in Net Assets (continued)
iShares S&P Midcap 400/BARRA iShares S&P SmallCap 600 iShares S&P SmallCap 600/BARRA Value Index Fund Index Fund Growth Index Fund ------------------------------ ------------------------------ ------------------------------ For the period For the period For the period For the July 24, For the May 22, For the July 24, year ended 2000/(1)/ to year ended 2000/(1)/ to year ended 2000/(1)/ to March 31, 2002 March 31, 2001 March 31, 2002 March 31, 2001 March 31, 2002 March 31, 2001 --------------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income (loss) $ 3,204,933 $ 461,223 $ 3,171,520 $ 508,002 $ 114,032 $ (158) Net realized gain (loss) 5,179,642 3,306,517 (3,721,395) 5,066,964 (4,192,798) (870,412) Net change in unrealized appreciation (depreciation) 41,089,722 (686,299) 88,741,661 (11,296,694) 17,701,679 (4,309,702) --------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 49,474,297 3,081,441 88,191,786 (5,721,728) 13,622,913 (5,180,272) --------------------------------------------------------------------------------------------- Distributions to iShareholders: From net investment income (3,078,287) (429,092) (2,909,646) (428,561) (121,208) (1,515) From net realized gain -- (79,322) -- (1,403,931) -- (154,251) --------------------------------------------------------------------------------------------- Total distributions to iShareholders (3,078,287) (508,414) (2,909,646) (1,832,492) (121,208) (155,766) --------------------------------------------------------------------------------------------- iShares Transactions: iShares sold 364,997,732 88,151,375 961,277,810 236,569,338 165,841,201 47,626,303 iShares redeemed (34,754,239) (12,680,866) (129,829,500) (20,933,653) (15,029,622) (15,128,051) --------------------------------------------------------------------------------------------- Net increase in net assets from iShares transactions 330,243,493 75,470,509 831,448,310 215,635,685 150,811,579 32,498,252 --------------------------------------------------------------------------------------------- Increase in net assets 376,639,503 78,043,536 916,730,450 208,081,465 164,313,284 27,162,214 NET ASSETS: Beginning of period 78,043,536 -- 208,081,465 -- 27,162,214 -- --------------------------------------------------------------------------------------------- End of period $454,683,039 $ 78,043,536 $1,124,811,915 $208,081,465 $191,475,498 $ 27,162,214 ============================================================================================= Undistributed net investment income included in net assets at end of period $ 154,828 $ 32,131 $ 338,579 $ 79,441 $ -- $ -- ============================================================================================= iSHARES ISSUED AND REDEEMED: iShares sold 4,050,000 1,100,000 8,450,000 2,250,000 2,200,000 600,000 iShares redeemed (400,000) (150,000) (1,350,000) (200,000) (200,000) (200,000) --------------------------------------------------------------------------------------------- Net increase in iShares outstanding 3,650,000 950,000 7,100,000 2,050,000 2,000,000 400,000 =============================================================================================
-------------------------------------------------------------------------------- /(1)/ Commencement of operations. See notes to financial statements. 118 2002 iShares Annual Report to Shareholders iShares Trust Statements of Changes in Net Assets (continued)
iShares S&P Global iShares S&P SmallCap 600/BARRA iShares S&P Global Energy Sector Value Index Fund 100 Index Fund Index Fund ------------------------------ ------------------------------ ------------------ For the period For the period For the period For the July 24, For the December 5, November 12, year ended 2000/(1)/ to year ended 2000/(1)/ to 2001/(1)/ to March 31, 2002 March 31, 2001 March 31, 2002 March 31, 2001 March 31, 2002 ---------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income $ 1,844,762 $ 196,111 $ 688,591 $ 308,404 $ 66,255 Net realized gain (loss) 4,270,203 2,212,842 (9,046,996) (324,174) (9,137) Net change in unrealized appreciation (depreciation) 41,827,684 (1,438,178) 6,705,969 (18,609,264) 1,444,755 ---------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 47,942,649 970,775 (1,652,436) (18,625,034) 1,501,873 ---------------------------------------------------------------------------------- Distributions to iShareholders: From net investment income (1,654,566) (155,580) (643,292) (203,001) (21,458) From net realized gain -- (85,751) -- -- -- ---------------------------------------------------------------------------------- Total distributions to iShareholders (1,654,566) (241,331) (643,292) (203,001) (21,458) ---------------------------------------------------------------------------------- iShares Transactions: iShares sold 375,496,634 71,163,205 12,486,982 122,234,830 14,891,596 iShares redeemed (28,664,094) (7,402,980) (67,931,706) -- -- ---------------------------------------------------------------------------------- Net increase (decrease) in net assets from iShares transactions 346,832,540 63,760,225 (55,444,724) 122,234,830 14,891,596 ---------------------------------------------------------------------------------- Increase (decrease) in net assets 393,120,623 64,489,669 (57,740,452) 103,406,795 16,372,011 NET ASSETS: Beginning of period 64,489,669 -- 103,406,795 -- -- ---------------------------------------------------------------------------------- End of period $457,610,292 $64,489,669 $ 45,666,343 $103,406,795 $16,372,011 ================================================================================== Undistributed net investment income included in net assets at end of period $ 228,480 $ 40,531 $ 126,538 $ 96,157 $ 44,499 ================================================================================== iSHARES ISSUED AND REDEEMED: iShares sold 4,350,000 950,000 200,000 1,700,000 300,000 iShares redeemed (350,000) (100,000) (1,100,000) -- -- ---------------------------------------------------------------------------------- Net increase (decrease) in iShares outstanding 4,000,000 850,000 (900,000) 1,700,000 300,000 ==================================================================================
-------------------------------------------------------------------------------- /(1)/ Commencement of operations. See notes to financial statements. Financial Statements 119 iShares Trust Statements of Changes in Net Assets (continued)
iShares S&P iShares S&P iShares S&P iShares S&P Global Global Global Global Tele- Financials Sector Healthcare Sector Technology Sector communications Index Fund Index Fund Index Fund Sector Index Fund ----------------- ----------------- ----------------- ----------------- For the period For the period For the period For the period November 12, November 13, November 12, November 12, 2001/(1)/ to 2001/(1)/ to 2001/(1)/ to 2001/(1)/ to March 31, 2002 March 31, 2002 March 31, 2002 March 31, 2002 --------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income (loss) $ 57,022 $ 39,397 $ (29,087) $ 34,047 Net realized gain (loss) (4,301) (9,191) 383,558 (20,728) Net change in unrealized appreciation (depreciation) 420,094 (329,385) (898,216) (1,762,553) --------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 472,815 (299,179) (543,745) (1,749,234) --------------------------------------------------------------------------- Distributions to iShareholders: From net investment income (8,572) (4,866) -- (4,609) --------------------------------------------------------------------------- Total distributions to iShareholders (8,572) (4,866) -- (4,609) --------------------------------------------------------------------------- iShares Transactions: iShares sold 10,199,110 17,476,128 32,221,480 15,205,292 iShares redeemed -- -- (23,891,290) -- --------------------------------------------------------------------------- Net increase in net assets from iShares transactions 10,199,110 17,476,128 8,330,190 15,205,292 --------------------------------------------------------------------------- Increase in net assets 10,663,353 17,172,083 7,786,445 13,451,449 NET ASSETS: Beginning of period -- -- -- -- --------------------------------------------------------------------------- End of period $10,663,353 $17,172,083 $ 7,786,445 $13,451,449 =========================================================================== Undistributed net investment income (accumulated net investment loss) included in net assets at end of period $ 48,230 $ 34,516 $ (554) $ 29,866 =========================================================================== iSHARES ISSUED AND REDEEMED: iShares sold 200,000 350,000 600,000 300,000 iShares redeemed -- -- (450,000) -- --------------------------------------------------------------------------- Net increase in iShares outstanding 200,000 350,000 150,000 300,000 =========================================================================== iShares S&P Europe 350 Index Fund ------------------------------ For the period For the July 25, year ended 2000/(1)/ to March 31, 2002 March 31, 2001 ------------------------------------------------------------------------------ INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income (loss) $ 2,912,676 $ 512,680 Net realized gain (loss) (699,025) (3,666,909) Net change in unrealized appreciation (depreciation) (5,888,117) (17,672,585) ------------------------------ Net increase (decrease) in net assets resulting from operations (3,674,466) (20,826,814) ------------------------------ Distributions to iShareholders: From net investment income (2,498,708) (239,360) ------------------------------ Total distributions to iShareholders (2,498,708) (239,360) ------------------------------ iShares Transactions: iShares sold 441,584,206 175,722,618 iShares redeemed (20,310,137) -- ------------------------------ Net increase in net assets from iShares transactions 421,274,069 175,722,618 ------------------------------ Increase in net assets 415,100,895 154,656,444 NET ASSETS: Beginning of period 154,656,444 -- ------------------------------ End of period $569,757,339 $154,656,444 ============================== Undistributed net investment income (accumulated net investment loss) included in net assets at end of period $ 666,421 $ 192,538 ============================== iSHARES ISSUED AND REDEEMED: iShares sold 7,550,000 2,450,000 iShares redeemed (350,000) -- ------------------------------ Net increase in iShares outstanding 7,200,000 2,450,000 ==============================
-------------------------------------------------------------------------------- /(1)/ Commencement of operations. See notes to financial statements. 120 2002 iShares Annual Report to Shareholders iShares Trust Statements of Changes in Net Assets (continued)
iShares S&P iShares S&P/TSE Latin America iShares S&P/TOPIX 60 Index Fund 40 Index Fund 150 Index Fund ------------------------------ -------------- ---------------------------- For the period For the period For the period For the June 12, October 25, October 23, year ended 2000/(1)/ to 2001/(1)/ to 2001/(1)/ to March 31, 2002 March 31, 2001 March 31, 2002 March 31, 2002 ---------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income (loss) $ 70,014 $ 52,014 $ 90,412 $ 44,687 Net realized gain (loss) (36,071) 36,204 (19,085) (16,217) Net change in unrealized appreciation (depreciation) 126,306 (2,170,689) 1,615,851 (1,684,653) ----------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 160,249 (2,082,471) 1,687,178 (1,656,183) ----------------------------------------------------------------- Distributions to iShareholders: From net investment income (59,927) (41,650) (39,874) -- From net realized gain -- (71,307) -- -- ----------------------------------------------------------------- Total distributions to iShareholders (59,927) (112,957) (39,874) -- ----------------------------------------------------------------- iShares Transactions: iShares sold -- 8,847,179 6,226,193 34,773,370 iShares redeemed -- -- -- -- ----------------------------------------------------------------- Net increase in net assets from iShares transactions -- 8,847,179 6,226,193 34,773,370 ----------------------------------------------------------------- Increase in net assets 100,322 6,651,751 7,873,497 33,117,187 NET ASSETS: Beginning of period 6,651,751 -- -- -- ----------------------------------------------------------------- End of period $6,752,073 $ 6,651,751 $7,873,497 $33,117,187 ================================================================= Undistributed net investment income (accumulated net investment loss) included in net assets at end of period $ 17,015 $ 7,344 $ 50,630 $ 44,591 ================================================================= iSHARES ISSUED AND REDEEMED: iShares sold -- 150,000 150,000 450,000 iShares redeemed -- -- -- -- ----------------------------------------------------------------- Net increase in iShares outstanding -- 150,000 150,000 450,000 ================================================================= iShares Nasdaq Biotechnology Index Fund ----------------------------- For the period For the February 5, year ended 2001/(1)/ to March 31, 2002 March 31, 2001 ------------------------------ INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income (loss) $ (755,436) $ (68,930) Net realized gain (loss) 5,284,038 (2,445,244) Net change in unrealized appreciation (depreciation) (27,836,288) (27,724,673) ----------------------------- Net increase (decrease) in net assets resulting from operations (23,307,686) (30,238,847) ----------------------------- Distributions to iShareholders: From net investment income -- -- From net realized gain -- -- ----------------------------- Total distributions to iShareholders -- -- ----------------------------- iShares Transactions: iShares sold 363,412,389 130,086,009 iShares redeemed (150,144,813) -- ----------------------------- Net increase in net assets from iShares transactions 213,267,576 130,086,009 ----------------------------- Increase in net assets 189,959,890 99,847,162 NET ASSETS: Beginning of period 99,847,162 -- ----------------------------- End of period $ 289,807,052 $ 99,847,162 ============================= Undistributed net investment income (accumulated net investment loss) included in net assets at end of period $ -- $ (68,930) ============================= iSHARES ISSUED AND REDEEMED: iShares sold 4,250,000 1,300,000 iShares redeemed (1,800,000) -- ----------------------------- Net increase in iShares outstanding 2,450,000 1,300,000 =============================
-------------------------------------------------------------------------------- /(1)/ Commencement of operations. See Notes to Financial Statements. Financial Statements 121 iShares Trust Financial Highlights (For a share outstanding throughout each period)
iShares S&P 500/BARRA iShares S&P 100 Index Fund iShares S&P 500 Index Fund Growth Index Fund ------------------------------ ------------------------------ ------------------------------ Period from Period from Period from Oct. 23, May 15, May 22, Year ended 2000/(1)/ to Year ended 2000/(1)/ to Year ended 2000/(1)/ to Mar. 31, 2002 Mar. 31, 2001 Mar. 31, 2002 Mar. 31, 2001 Mar. 31, 2002 Mar. 31, 2001 --------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 59.17 $ 73.44 $ 116.24 $ 145.24 $ 56.61 $ 82.15 --------------------------------------------------------------------------------------------- Income from investment operations: Net investment income 0.61 0.31 1.39 1.06 0.43 0.25 Net realized and unrealized gain (loss) (1.34) (14.28) (1.25) (28.98) 2.19 (25.44) --------------------------------------------------------------------------------------------- Total from investment operations (0.73) (13.97) 0.14 (27.92) 2.62 (25.19) --------------------------------------------------------------------------------------------- Less distributions from: Net investment income (0.59) (0.30) (1.38) (1.01) (0.41) (0.24) Net realized gain -- -- -- (0.07) -- (0.11) --------------------------------------------------------------------------------------------- Total distributions (0.59) (0.30) (1.38) (1.08) (0.41) (0.35) --------------------------------------------------------------------------------------------- Net asset value, end of period $ 57.85 $ 59.17 $ 115.00 $ 116.24 $ 58.82 $ 56.61 ============================================================================================= Total Return (1.23)% (19.07)%/(2)/ 0.13% (19.32)%/(2)/ 4.64% (30.75)%/(2)/ ============================================================================================= Ratios/Supplemental data: Net assets, end of period (000s) $ 115,703 $ 88,762 $4,208,946 $2,876,839 $464,656 $141,520 Ratio of expenses to average net assets/(3)/ 0.20% 0.20% 0.09% 0.09% 0.18% 0.18% Ratio of net investment income to average net assets/(3)/ 1.12% 1.03% 1.27% 1.06% 0.82% 0.45% Portfolio turnover rate/(4)/ 13% 5% 3% 5% 28% 31% -------------------------------------------------------------------------------------------------------------------------------
/(1)/ Commencement of operations. /(2)/ Not annualized. /(3)/ Annualized for periods of less than one year. /(4)/ Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. See notes to financial statements. 122 2002 iShares Annual Report to Shareholders iShares Trust Financial Highlights (continued) (For a share outstanding throughout each period)
iShares S&P 500/BARRA iShares S&P MidCap 400 iShares S&P MidCap 400/BARRA Value Index Fund Index Fund Growth Index Fund ------------------------------ ------------------------------ ------------------------------ Period from Period from Period from May 22, May 22, Jul. 24, Year ended 2000/(1)/ to Year ended 2000/(1)/ to Year ended 2000/(1)/ to Mar. 31, 2002 Mar. 31, 2001 Mar. 31, 2002 Mar. 31, 2001 Mar. 31, 2002 Mar. 31, 2001 --------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 59.31 $ 60.20 $ 91.77 $ 92.63 $ 101.31 $ 135.73 -------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income 0.83 0.65 0.75 0.72 0.14 0.01 Net realized and unrealized gain (loss) (3.49) (0.78) 16.37 (0.59) 16.07 (33.95) -------------------------------------------------------------------------------------------------- Total from investment operations (2.66) (0.13) 17.12 0.13 16.21 (33.94) -------------------------------------------------------------------------------------------------- Less distributions from: Net investment income (0.84) (0.61) (0.75) (0.69) (0.14) (0.01) Net realized gain -- (0.15) -- (0.30) -- (0.47) -------------------------------------------------------------------------------------------------- Total distributions (0.84) (0.76) (0.75) (0.99) (0.14) (0.48) -------------------------------------------------------------------------------------------------- Net asset value, end of period $ 55.81 $ 59.31 $ 108.14 $ 91.77 $ 117.38 $ 101.31 ================================================================================================== Total return (4.48)% (0.27)%/(2)/ 18.75% 0.04%/(2)/ 16.03% (25.08)%/(2)/ ================================================================================================== Ratios/Supplemental data: Net assets, end of period (000s) $586,051 $367,704 $605,571 $156,005 $252,359 $162,092 Ratio of expenses to average net assets/(3)/ 0.18% 0.18% 0.20% 0.20% 0.25% 0.25% Ratio of net investment income to average net assets/(3)/ 1.56% 1.51% 0.87% 0.86% 0.15% 0.06% Portfolio turnover rate/(4)/ 17% 9% 14% 32% 50% 67% ---------------------------------------------------------------------------------------------------------------------------------
/(1)/ Commencement of operations. /(2)/ Not annualized. /(3)/ Annualized for periods of less than one year. /(4)/ Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. See notes to financial statements. Financial Highlights 123 iShares Trust Financial Highlights (continued) (For a share outstanding throughout each period)
iShares S&P MidCap 400/BARRA iShares S&P SmallCap 600 iShares S&P SmallCap 600/BARRA Value Index Fund Index Fund Growth Index Fund ------------------------------ ------------------------------ ------------------------------ Period from Period from Period from Jul. 24, May 22, Jul. 24, Year ended 2000/(1)/ to Year ended 2000/(1)/ to Year ended 2000/(1)/ to Mar. 31, 2002 Mar. 31, 2001 Mar. 31, 2002 Mar. 31, 2001 Mar. 31, 2002 Mar. 31, 2001 --------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 82.15 $ 72.40 $ 101.50 $ 97.95 $ 67.91 $ 83.34 -------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income 1.06 0.78 0.57 0.38 0.09 0.00/(5)/ Net realized and unrealized gain (loss) 16.69 9.86 21.43 4.63 11.87 (14.81) -------------------------------------------------------------------------------------------------- Total from investment operations 17.75 10.64 22.00 5.01 11.96 (14.81) -------------------------------------------------------------------------------------------------- Less distributions from: Net investment income (1.06) (0.75) (0.57) (0.34) (0.09) (0.00)/(5)/ Net realized gain -- (0.14) -- (1.12) -- (0.62) -------------------------------------------------------------------------------------------------- Total distributions (1.06) (0.89) (0.57) (1.46) (0.09) (0.62) -------------------------------------------------------------------------------------------------- Net asset value, end of period $ 98.84 $ 82.15 $ 122.93 $ 101.50 $ 79.78 $ 67.91 ================================================================================================== Total return 21.79% 14.71%/(2)/ 21.74% 5.08%/(2)/ 17.60% (17.86)%/(2)/ ================================================================================================== Ratios/supplemental data: Net assets, end of period (000s) $454,683 $78,044 $1,124,812 $208,081 $191,475 $27,162 Ratio of expenses to average net assets/(3)/ 0.25% 0.25% 0.20% 0.20% 0.25% 0.25% Ratio of net investment income to average net assets/(3)/ 1.43% 1.58% 0.60% 0.61% 0.14% 0.00%/(6)/ Portfolio turnover rate/(4)/ 13% 17% 16% 28% 49% 77% ---------------------------------------------------------------------------------------------------------------------------------
/(1)/ Commencement of operations. /(2)/ Not annualized. /(3)/ Annualized for periods of less than one year. /(4)/ Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. /(5)/ Rounds to less than $0.01. /(6)/ Rounds to less than 0.01%. See notes to financial statements. 124 2002 iShares Annual Report to Shareholders iShares Trust Financial Highlights (continued) (For a share outstanding throughout each period)
iShares S&P SmallCap 600/BARRA iShares S&P Global Value Index Fund 100 Index Fund ------------------------------ ------------------------------ Period from Period from Jul. 24, Dec. 5, Year ended 2000/(1)/ to Year ended 2000/(1)/ to Mar. 31, 2002 Mar. 31, 2001 Mar. 31, 2002 Mar. 31, 2001 ------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 75.87 $ 68.34 $ 60.83 $ 72.50 ---------------------------------------------------------------- Income from investment operations: Net investment income 0.60 0.43 0.65 0.18 Net realized and unrealized gain (loss) 18.48 7.82 (3.87) (11.73) ---------------------------------------------------------------- Total from investment operations 19.08 8.25 (3.22) (11.55) ---------------------------------------------------------------- Less distributions from: Net investment income (0.60) (0.38) (0.53) (0.12) Net realized gain -- (0.34) -- -- ---------------------------------------------------------------- Total distributions (0.60) (0.72) (0.53) (0.12) ---------------------------------------------------------------- Net asset value, end of period $ 94.35 $ 75.87 $ 57.08 $ 60.83 ================================================================ Total return 25.29% 12.13%/(2)/ (5.32)% (15.94)%/(2)/ ================================================================ Ratios/Supplemental data: Net assets, end of period (000s) $457,610 $64,490 $45,666 $103,407 Ratio of expenses to average net assets/(3)/ 0.25% 0.25% 0.40% 0.40% Ratio of net investment income to average net assets/(3)/ 0.92% 0.98% 1.08% 0.88% Portfolio turnover rate/(4)/ 14% 17% 4% 5% ------------------------------------------------------------------------------------------------------------ iShares S&P Global iShares S&P Global Energy Sector Financials Sector Index Fund Index Fund ------------------------------ ------------------------------ Period from Period from Nov. 12, Nov. 12, 2001/(1)/ to 2001/(1)/ to Mar. 31, 2002 Mar. 31, 2002 ------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 49.64 $ 51.00 ---------------------------------------------------------------- Income from investment operations: Net investment income 0.22 0.29 Net realized and unrealized gain (loss) 4.78 2.07 ---------------------------------------------------------------- Total from investment operations 5.00 2.36 ---------------------------------------------------------------- Less distributions from: Net investment income (0.07) (0.04) Net realized gain -- -- ---------------------------------------------------------------- Total distributions (0.07) (0.04) ---------------------------------------------------------------- Net asset value, end of period $ 54.57 $ 53.32 ================================================================ Total return 10.10%/(2)/ 4.64%/(2)/ ================================================================ Ratios/Supplemental data: Net assets, end of period (000s) $16,372 $10,663 Ratio of expenses to average net assets/(3)/ 0.65% 0.65% Ratio of net investment income to average net assets/(3)/ 1.17% 1.44% Portfolio turnover rate/(4)/ 5% 2% ------------------------------------------------------------------------------------------------------------
/(1)/ Commencement of operations. /(2)/ Not annualized. /(3)/ Annualized for periods of less than one year. /(4)/ Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. See notes to financial statements. Financial Highlights 125 iShares Trust Financial Highlights (continued) (For a share outstanding throughout each period)
iShares S&P Global iShares S&P Global Healthcare Sector Technology Sector Index Fund Index Fund ----------------------------- ----------------------------- Period from Period from Nov. 13, Nov. 12, 2001/(1)/ to 2001/(1)/ to Mar. 31, 2002 Mar. 31, 2002 ---------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 49.53 $53.19 -------------------------------------------------------------- Income from investment operations: Net investment income (loss) 0.11 (0.19) Net realized and unrealized loss (0.57) (1.09) -------------------------------------------------------------- Total from investment operations (0.46) (1.28) -------------------------------------------------------------- Less distributions from: Net investment income (0.01) -- -------------------------------------------------------------- Total distributions (0.01) -- -------------------------------------------------------------- Net asset value, end of period $ 49.06 $51.91 ============================================================== Total return (0.92)%/(2)/ (2.40)%/(2)/ ============================================================== Ratios/Supplemental data: Net assets, end of period (000s) $ 17,172 $7,786 Ratio of expenses to average net assets/(3)/ 0.65% 0.65% Ratio of net investment income (loss) to average net assets/(3)/ 0.62% (0.44)% Portfolio turnover rate/(4)/ 1% 2% ---------------------------------------------------------------------------------------------------------- iShares S&P Global Telecommunications Sector iShares S&P Europe Index Fund 350 Index Fund ----------------------------- ----------------------------- Period from Period from Nov. 12, Jul. 25, 2001/(1)/ to Year ended 2000/(1)/ to Mar. 31, 2002 Mar. 31, 2002 Mar. 31, 2001 ---------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 50.68 $ 63.13 $ 79.32 -------------------------------------------------------------- Income from investment operations: Net investment income (loss) 0.11 0.83 0.38 Net realized and unrealized loss (5.93) (4.08) (16.30) -------------------------------------------------------------- Total from investment operations (5.82) (3.25) (15.92) -------------------------------------------------------------- Less distributions from: Net investment income (0.02) (0.84) (0.27) -------------------------------------------------------------- Total distributions (0.02) (0.84) (0.27) -------------------------------------------------------------- Net asset value, end of period $ 44.84 $ 59.04 $ 63.13 ============================================================== Total return (11.50)%/(2)/ (5.16)% (20.10)%/(2)/ ============================================================== Ratios/Supplemental data: Net assets, end of period (000s) $13,451 $569,757 $154,656 Ratio of expenses to average net assets/(3)/ 0.65% 0.60% 0.60% Ratio of net investment income (loss) to average net assets/(3)/ 0.61% 1.49% 1.12% Portfolio turnover rate/(4)/ 2% 4% 24% ----------------------------------------------------------------------------------------------------------
/(1)/ Commencement of operations. /(2)/ Not annualized. /(3)/ Annualized for periods of less than one year. /(4)/ Excludes portfolio securities received or delivered as a result of capital share transactions in Creation Units. See notes to financial statements. 126 2002 iShares Annual Report to Shareholders iShares Trust Financial Highlights (continued) (For a share outstanding throughout each period)
iShares S&P iShares S&P/TSE Latin America iShares S&P/TOPIX 60 Index fund 40 Index Fund 150 Index Fund ------------------------------ ------------- ------------------- Period from Period from Period from Jun. 12, Oct. 25, Oct. 23, Year ended 2000/(1)/ to 2001/(1)/ to 2001/(1)/ to Mar. 31, 2002 Mar. 31, 2001 Mar. 31, 2002 Mar. 31, 2002 -------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $44.35 $ 59.00 $41.51 $ 77.39 ---------------------------------------------------------------------- Income from investment operations: Net investment income (loss) 0.47 0.35 0.61 0.10 Net realized and unrealized gain (loss) 0.59 (14.24) 10.64 (3.90) ---------------------------------------------------------------------- Total from investment operations 1.06 (13.89) 11.25 (3.80) ---------------------------------------------------------------------- Less distributions from: Net investment income (0.40) (0.28) (0.27) -- Net realized gain -- (0.48) -- -- ---------------------------------------------------------------------- Total distributions (0.40) (0.76) (0.27) -- ---------------------------------------------------------------------- Net asset value, end of period $45.01 $ 44.35 $52.49 $ 73.59 ====================================================================== Total return 2.43% (23.80)%/(2)/ 27.16%/(2)/ (4.91)%/(2)/ ====================================================================== Ratios/Supplemental data: Net assets, end of period (000s) $6,752 $ 6,652 $7,873 $ 33,117 Ratio of expenses to average net assets/(3)/ 0.50% 0.50% 0.50% 0.50% Ratio of net investment income (loss) to average net assets/(3)/ 1.04% 0.76% 2.94% 0.32% Portfolio turnover rate/(4)/ 30% 50% 2% 5% iShares Nasdaq Biotechnology Index Fund ------------------------------ Period from Feb. 5, Year ended 2001/(1)/ to Mar. 31, 2002 Mar. 31, 2001 ---------------------------------------------------------------------------- Net asset value, beginning of period $ 76.81 $ 99.66 --------------------------------- Income from investment operations: Net investment income (loss) (0.17) (0.05) Net realized and unrealized gain (loss) 0.64 (22.80) --------------------------------- Total from investment operations 0.47 (22.85) --------------------------------- Less distributions from: Net investment income -- -- Net realized gain -- -- --------------------------------- Total distributions -- -- --------------------------------- Net asset value, end of period $ 77.28 $ 76.81 ================================= Total return 0.61% (22.93)%/(2)/ ================================= Ratios/Supplemental data: Net assets, end of period (000s) $289,807 $99,847 Ratio of expenses to average net assets/(3)/ 0.50% 0.50% Ratio of net investment income (loss) to average net assets/(3)/ (0.46)% (0.50)% Portfolio turnover rate/(4)/ 17% 9%
-------------------------------------------------------------------------------- /(1)/ Commencement of operations. /(2)/ Not annualized. /(3)/ Annualized for periods of less than one year. /(4)/ Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. See notes to financial statements. Financial Highlights 127 iShares Trust Notes to the Financial Statements 1. SIGNIFICANT ACCOUNTING POLICIES iShares Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company. The Trust was established as a Delaware business trust pursuant to an Agreement and Declaration of Trust dated December 16, 1999. As of March 31, 2002, the Trust offered 55 investment portfolios or funds. The funds offered by the Trust, along with their respective exchange trading symbols are: iShares S&P Series ------------------ .. iShares S&P 100 Index Fund (OEF) .. iShares S&P 500 Index Fund (IVV) .. iShares S&P 500/BARRA Growth Index Fund (IVW) .. iShares S&P 500/BARRA Value Index Fund (IVE) .. iShares S&P MidCap 400 Index Fund (IJH) .. iShares S&P MidCap 400/BARRA Growth Index Fund (IJK) .. iShares S&P MidCap 400/BARRA Value Index Fund (IJJ) .. iShares S&P SmallCap 600 Index Fund (IJR) .. iShares S&P SmallCap 600/BARRA Growth Index Fund (IJT) .. iShares S&P SmallCap 600/BARRA Value Index Fund (IJS) .. iShares S&P Global 100 Index Fund (IOO) .. iShares S&P Global Energy Sector Index Fund (IXC) .. iShares S&P Global Financials Sector Index Fund (IXG) .. iShares S&P Global Healthcare Sector Index Fund (IXJ) .. iShares S&P Global Technology Sector Index Fund (IXN) .. iShares S&P Global Telecommunications Sector Index Fund (IXP) .. iShares S&P Europe 350 Index Fund (IEV) .. iShares S&P/TSE 60 Index Fund (IKC) .. iShares S&P Latin America 40 Index Fund (ILF) .. iShares S&P/TOPIX 150 Index Fund (ITF) iShares Nasdaq Series --------------------- .. iShares Nasdaq Biotechnology Index Fund (IBB) iShares Dow Jones Series ------------------------ .. iShares Dow Jones U.S. Total Market Index Fund (IYY) .. iShares Dow Jones U.S. Basic Materials Sector Index Fund (IYM) .. iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund (IYC) .. iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund (IYK) .. iShares Dow Jones U.S. Energy Sector Index Fund (IYE) .. iShares Dow Jones U.S. Financial Sector Index Fund (IYF) .. iShares Dow Jones U.S. Healthcare Sector Index Fund (IYH) .. iShares Dow Jones U.S. Industrial Sector Index Fund (IYJ) .. iShares Dow Jones U.S. Technology Sector Index Fund (IYW) .. iShares Dow Jones U.S. Telecommunications Sector Index Fund (IYZ) .. iShares Dow Jones U.S. Utilities Sector Index Fund (IDU) .. iShares Dow Jones U.S. Chemicals Index Fund (IYD) .. iShares Dow Jones U.S. Financial Services Index Fund (IYG) .. iShares Dow Jones U.S. Internet Index Fund (IYV) .. iShares Dow Jones U.S. Real Estate Index Fund (IYR) iShares MSCI Series ------------------- .. iShares MSCI EAFE Index Fund (EFA) iShares Cohen & Steers Series ----------------------------- .. iShares Cohen & Steers Realty Majors Index Fund (ICF) iShares Russell Series ---------------------- .. iShares Russell 3000 Index Fund (IWV) .. iShares Russell 3000 Growth Index Fund (IWZ) .. iShares Russell 3000 Value Index Fund (IWW) .. iShares Russell 2000 Index Fund (IWM) .. iShares Russell 2000 Growth Index Fund (IWO) .. iShares Russell 2000 Value Index Fund (IWN) .. iShares Russell 1000 Index Fund (IWB) .. iShares Russell 1000 Growth Index Fund (IWF) .. iShares Russell 1000 Value Index Fund (IWD) .. iShares Russell Midcap Index Fund (IWR) .. iShares Russell Midcap Growth Index Fund (IWP) .. iShares Russell Midcap Value Index Fund (IWS) iShares Goldman Sachs Series ---------------------------- .. iShares Goldman Sachs Technology Index Fund (IGM) .. iShares Goldman Sachs Networking Index Fund (IGN) .. iShares Goldman Sachs Semiconductor Index Fund (IGW) .. iShares Goldman Sachs Software Index Fund (IGV) .. iShares Goldman Sachs Natural Resources Index Fund (IGE) 128 2002 iShares Annual Report to Shareholders iShares Trust Notes to the Financial Statements (continued) The investment objective of each fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index, as indicated in the name of each fund. The investment advisor uses a "passive" or index approach to achieve each fund's investment objective. These financial statements relate only to the iShares S&P Series Funds and the iShares Nasdaq Biotechnology Index Fund (each a "Fund", collectively the "Funds"). The iShares S&P 100, iShares S&P 500/BARRA Growth, iShares S&P Global 100, iShares S&P Global Energy Sector, iShares S&P Global Financials Sector, iShares S&P Global Healthcare Sector, iShares S&P Global Technology Sector, iShares S&P Global Telecommunications Sector, iShares S&P/TSE 60, iShares S&P Latin America 40, iShares S&P/TOPIX 150 and iShares Nasdaq Biotechnology Index Funds are classified as non-diversified funds under the 1940 Act. Each of the other iShares S&P Series Funds is classified as a diversified fund. Non-diversified funds generally hold stocks of fewer companies than diversified funds and may be more susceptible to the risks associated with these particular companies, or to a single economic, political or regulatory occurrence. The iShares S&P Global 100, iShares S&P Global Energy Sector, iShares S&P Global Financials Sector, iShares S&P Global Healthcare Sector, iShares S&P Global Technology Sector, iShares S&P Global Telecommunications Sector, iShares S&P Europe 350, iShares S&P/TSE 60, iShares S&P Latin America 40 and iShares S&P/TOPIX 150 Index Funds invest in the securities of non-U.S. issuers that may trade in non-U.S. markets, which may involve certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: generally less liquid and less efficient securities markets; generally greater price volatility; exchange rate fluctuations and exchange controls; imposition of restrictions on the expatriation of funds or other assets of the Fund; less publicly available information about issuers; the imposition of withholding or other taxes; higher transaction and custody costs; settlement delays and risk of loss attendant in settlement procedures; difficulties in enforcing contractual obligations; less regulation of securities markets; different accounting, disclosure and reporting requirements; more substantial governmental involvement in the economy; higher inflation rates; greater social, economic and political uncertainties; the risk of nationalization or expropriation of assets; and the risk of war. The following significant accounting policies are consistently followed by the Trust in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") for investment companies. The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions. Actual results could differ from those estimates. SECURITY VALUATION Equity securities are valued at the last sales price on the primary securities exchange or national securities market on which such securities are traded. Securities not listed on an exchange or national securities market, or securities for which there were no sales prices, are valued at the latest quoted bid prices. U.S. Government obligations are valued at the latest quoted bid price. Debt securities maturing in 60 days or less are valued at amortized cost, which approximates market value. Mutual fund shares are valued at net asset value. Any securities, including restricted securities or other assets for which market quotations are not readily available, or for which a significant event has occurred since the time of the most recent market quotation, are valued in accordance with fair value pricing policies approved by the Board of Trustees of the Trust. SECURITY TRANSACTIONS AND INCOME RECOGNITION Security transactions are accounted for on trade date. Dividend income is recognized on the ex-dividend date, and interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method. Notes to the Financial Statements 129 iShares Trust Notes to the Financial Statements (continued) FOREIGN CURRENCY TRANSLATION The accounting records of the Funds are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the prevailing rates of exchange on the valuation date. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars at the prevailing exchange rate on the respective dates of such transactions. Each Fund does not isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of securities. Such fluctuations are reflected by the Funds as a component of realized and unrealized gains and losses from investments for financial reporting purposes. DISTRIBUTIONS TO SHAREHOLDERS Distributions to shareholders from net investment income, if any, are declared and distributed at least annually by each Fund. Distributions of net realized capital gains, if any, generally are declared and distributed once a year. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. At March 31, 2002, the components of distributable earnings on a tax basis were as follows:
-------------------------------------------------------------------------------------- Total Undistributed Undistributed Distributable iShares Index Fund Ordinary Income Long Term Gain Earnings -------------------------------------------------------------------------------------- S&P 100 $ 76,168 $ - $ 76,168 S&P 500 2,073,501 - 2,073,501 S&P 500/BARRA Growth 187,493 - 187,493 S&P 500/BARRA Value 284,367 - 284,367 S&P MidCap 400 146,315 - 146,315 S&P MidCap 400/BARRA Growth 19,364 - 19,364 S&P MidCap 400/BARRA Value 149,921 - 149,921 S&P SmallCap 600 330,527 - 330,527 S&P SmallCap 600/BARRA Value 221,292 - 221,292 S&P Global 100 127,603 - 127,603 S&P Global Energy Sector 44,499 - 44,499 S&P Global Financials Sector 50,481 - 50,481 S&P Global Healthcare Sector 34,531 - 34,531 S&P Global Telecommunications Sector 29,866 - 29,866 S&P Europe 350 1,231,299 - 1,231,299 S&P/TSE 60 17,243 - 17,243 S&P Latin America 40 50,630 - 50,630 S&P/TOPIX 150 44,591 - 44,591 --------------------------------------------------------------------------------------
For the year ended March 31, 2002, the tax characterization of distributions paid was equal to the book characterization of distributions paid for all of theFunds. The total distributions and distributions per share are disclosed in the accompanying Statements of Changes in Net Assets and the Financial Highlights for all Funds. 130 2002 iShares Annual Report to Shareholders iShares Trust Notes to the Financial Statements (continued) FEDERAL INCOME TAXES Each Fund is treated as a separate entity for federal income tax purposes. It is the policy of each Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its net income and any net gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes was required for the year ended March 31, 2002. From November 1, 2001 to March 31, 2002, certain of the Funds incurred net realized capital losses or net foreign currency losses. As permitted by tax regulations, these Funds have elected to defer losses and treat them as arising in the year ending March 31, 2003. ----------------------------------------------------------- Deferred Net Realized Capital/Net Foreign iShares Index Fund Currency Losses ----------------------------------------------------------- S&P 100 $ 1,242,460 S&P 500 15,287,564 S&P 500/BARRA Growth 5,050,376 S&P 500/BARRA Value 6,614,887 S&P MidCap 400 2,679,654 S&P MidCap 400/BARRA Growth 6,572,855 S&P MidCap 400/BARRA Value 750,491 S&P SmallCap 600 4,575,762 S&P SmallCap 600/BARRA Growth 2,760,264 S&P SmallCap 600/BARRA Value 1,613,863 S&P Global 100 487,437 S&P Global Energy Sector 5,497 S&P Global Financials Sector 4,081 S&P Global Healthcare Sector 8,037 S&P Global Technology Sector 26,238 S&P Global Telecommunications Sector 20,805 S&P Europe 350 1,168,031 S&P/TSE 60 228 S&P Latin America 40 19,177 S&P/TOPIX 150 16,121 Nasdaq Biotechnology 17,913 ----------------------------------------------------------- Notes to the Financial Statements 131 iShares Trust Notes to the Financial Statements (continued) The following Funds had tax basis net capital loss carryforwards at March 31, 2002, the tax year end of the Funds:
----------------------------------------------------------------------------------- iShares Index Fund Expiring 2009 Expiring 2010 Total ----------------------------------------------------------------------------------- S&P 100 $ - $ 2,240,710 $ 2,240,710 S&P 500 - 16,570,119 16,570,119 S&P 500/BARRA Growth - 9,841,895 9,841,895 S&P 500/BARRA Value - 5,134,741 5,134,741 S&P MidCap 400 - 4,458,220 4,458,220 S&P MidCap 400/BARRA Growth - 11,111,322 11,111,322 S&P MidCap 400/BARRA Value - 1,442,036 1,442,036 S&P SmallCap 600 - 3,199,196 3,199,196 S&P SmallCap 600/BARRA Growth - 4,230,989 4,230,989 S&P SmallCap 600/BARRA Value - 4,241,868 4,241,868 S&P Global 100 - 329,587 329,587 S&P Europe 350 3,295 904,300 907,595 S&P/TSE 60 - 56,625 56,625 Nasdaq Biotechnology - 2,280,865 2,280,865 -----------------------------------------------------------------------------------
Net capital loss carryforwards may be applied against any net realized taxable gains in each succeeding year, or until their respective expiration date, whichever occurs first. For the year ended March 31, 2002, certain Funds realized net capital gains or losses resulting from in-kind redemptions of large blocks of 50,000 iShares ("Creation Units"). Because such gains or losses are not taxable to the Funds, and are not distributed to existing Fund shareholders, the gains or losses are reclassified from accumulated net realized gains or losses to paid-in-capital at the end of the Funds' tax year end. The in-kind gains or losses for the year ended March 31, 2002 are disclosed in the Funds' Statements of Operations. REPURCHASE AGREEMENTS Each Fund may enter into repurchase agreements with banks and securities dealers. These transactions involve the purchase of securities with a simultaneous commitment to resell the securities to the bank or the dealer at an agreed-upon date and price. A repurchase agreement is accounted for as a loan by the Fund to the seller, collateralized by securities, which are delivered to the Funds' custodian or to an agent bank under a tri-party agreement. The securities are marked-to-market daily and additional securities are acquired as needed, to ensure that their value equals or exceeds the repurchase price plus accrued interest. None of the Funds held repurchase agreements at March 31, 2002. 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 the Investment Advisory Agreement, BGFA is responsible for all expenses ("Covered Expenses") of the Trust, including the cost of transfer agency, custody, fund administration, legal, audit and other services, except interest, taxes, brokerage commissions and other expenses connected with the executions of portfolio transactions, distribution fees and extraordinary expenses. Expenses related to the organization and initial registration of the Trust were borne by BGFA. 132 2002 iShares Annual Report to Shareholders iShares Trust Notes to the Financial Statements (continued) For its investment management services to each Fund, BGFA is entitled to an annual advisory fee based on the average daily net assets of each Fund as follows: ------------------------------------------------------- Advisory iShares Index Fund Fee ------------------------------------------------------- S&P 100 0.20% S&P 500 0.09 S&P 500/BARRA Growth 0.18 S&P 500/BARRA Value 0.18 S&P MidCap 400 0.20 S&P MidCap 400/BARRA Growth 0.25 S&P MidCap 400/BARRA Value 0.25 S&P SmallCap 600 0.20 S&P SmallCap 600/BARRA Growth 0.25 S&P SmallCap 600/BARRA Value 0.25 S&P Global 100 0.40 ------------------------------------------------------- ------------------------------------------------------- Advisory iShares Index Fund Fee ------------------------------------------------------- S&P Global Energy Sector 0.65% S&P Global Financial Sector 0.65 S&P Global Healthcare Sector 0.65 S&P Global Technology Sector 0.65 S&P Global Telecommunications Sector 0.65 S&P Europe 350 0.60 S&P/TSE 60 0.50 S&P Latin America 40 0.50 S&P/TOPIX 150 0.50 Nasdaq Biotechnology 0.50 --------------------------------------------------------- Investors Bank & Trust Company ("Investors Bank") serves as administrator, custodian, transfer agent and securities lending agent for the Funds. As compensation for its services, Investors Bank receives certain out-of-pocket costs, transaction fees, and asset-based fees, which are accrued daily and paid monthly. These fees are Covered Expenses as defined above. SEI Investments Distribution Company serves as each Fund's underwriter and distributor of the shares of each Fund, pursuant to a Distribution Agreement with the Trust. The distributor will deliver the Prospectus and Statement of Additional Information, if so requested, to persons purchasing Creation Units and will maintain records of both orders placed with it and confirmations of acceptance furnished by it. Barclays Global Investors Services ("BGIS"), a subsidiary of Barclays Global Investors, N.A., may serve as a broker-dealer for the Funds. For the year ended March 31, 2002, BGIS received the following amounts in brokerage commissions: ------------------------------------------------------- Commissions Paid to iShares Index Fund BGIS ------------------------------------------------------- S&P 100 $ 1,191 S&P 500 11,340 S&P 500/BARRA Growth 255 S&P 500/BARRA Value 2,052 S&P MidCap 400 1,112 S&P MidCap 400/BARRA Growth 432 S&P MidCap 400/BARRA Value 1,441 ------------------------------------------------------- Pursuant to an exemptive order issued by the Securities and Exchange Commission, each Fund may invest in the Institutional Shares of the Institutional Money Market Fund ("IMMF") of Barclays Global Investors Funds. The IMMF is a feeder fund in a master/feeder fund structure that invests substantially all of its assets in the Money Market Master Portfolio, which is managed by BGFA, the Funds' investment advisor. The IMMF is an open-end money market fund available only to institutional investors, including investment companies managed by BGFA. The IMMF seeks a high level of income consistent Notes to the Financial Statements 133 iShares Trust Notes to the Financial Statements (continued) with liquidity and the preservation of capital. While the IMMF does not directly charge an advisory fee, the master portfolio in which it invests does charge an advisory fee. Income distributions from the IMMF are declared daily and paid monthly from net investment income. Income distributions earned by the Funds are recorded as either interest income or securities lending income in the accompanying Statements of Operations. Pursuant to Rule 17a-7 of the 1940 Act, certain Funds executed cross trades for the year ended March 31, 2002. Cross trading is the buying or selling of portfolio securities between funds to which BGFA serves as investment advisor. In management's opinion, all transactions were in compliance with the requirements and restrictions set forth by Rule 17a-7. As a result of using an index approach to investing, the iShares S&P Global 100, iShares S&P Global Financials Sector and iShares S&P Europe 350 Index Funds held shares of Barclays PLC, with market values of $366,359, $150,919 and $6,273,985, respectively, as of March 31, 2002. Barclays PLC is an affiliate of BGFA, the Funds' investment advisor. As of March 31, 2002, certain trustees and officers of the Trust are also employees of BGFA and its affiliates or employees of Investors Bank. 3. INVESTMENT PORTFOLIO TRANSACTIONS Purchases and sales of investments (excluding in-kind transactions and short-term securities) for the year ended March 31, 2002 were as follows: ------------------------------------------------------------------- iShares Index Fund Purchases Sales ------------------------------------------------------------------- S&P 100 $ 19,701,705 $ 19,677,141 S&P 500 104,837,558 103,866,080 S&P 500/BARRA Growth 84,832,176 84,730,119 S&P 500/BARRA Value 77,225,511 77,978,913 S&P MidCap 400 49,697,244 54,933,167 S&P MidCap 400/BARRA Growth 79,172,675 79,721,358 S&P MidCap 400/BARRA Value 29,764,418 32,059,953 S&P SmallCap 600 83,640,855 83,745,676 S&P SmallCap 600/BARRA Growth 40,680,318 44,143,512 S&P SmallCap 600/BARRA Value 29,443,573 33,025,925 S&P Global 100 2,371,512 2,539,697 S&P Global Energy Sector 813,694 816,315 S&P Global Financial Sector 223,548 234,770 S&P Global Healthcare Sector 100,905 101,925 S&P Global Technology Sector 227,247 240,405 S&P Global Telecommunications Sector 257,394 239,187 S&P Europe 350 10,687,435 8,492,310 S&P/TSE 60 2,022,753 2,026,005 S&P Latin America 40 122,102 144,186 S&P/TOPIX 150 1,544,793 1,556,835 Nasdaq Biotechnology 29,963,810 30,928,717 ------------------------------------------------------------------- 134 2002 iShares Annual Report to Shareholders iShares Trust Notes to the Financial Statements (continued) In-kind transactions for the year ended March 31, 2002 were as follows: ---------------------------------------------------------------------- In-kind In-kind iShares Index Fund Purchases Sales ---------------------------------------------------------------------- S&P 100 $ 223,444,579 $ 176,697,021 S&P 500 2,601,586,457 1,298,788,109 S&P 500/BARRA Growth 395,355,794 72,129,706 S&P 500/BARRA Value 366,624,694 124,424,636 S&P MidCap 400 438,077,107 41,836,437 S&P MidCap 400/BARRA Growth 183,408,328 122,456,210 S&P MidCap 400/BARRA Value 414,817,027 82,515,526 S&P SmallCap 600 972,286,622 141,003,186 S&P SmallCap 600/BARRA Growth 167,295,167 13,143,582 S&P SmallCap 600/BARRA Value 434,670,834 84,206,178 S&P Global 100 12,427,684 67,561,856 S&P Global Energy Sector 14,870,596 -- S&P Global Financial Sector 10,185,110 -- S&P Global Healthcare Sector 17,449,824 -- S&P Global Technology Sector 32,191,108 23,882,321 S&P Global Telecommunications Sector 15,184,292 -- S&P Europe 350 439,073,554 20,247,175 S&P Latin America 40 6,208,193 -- S&P/TOPIX 150 34,698,769 -- Nasdaq Biotechnology 371,147,916 157,601,610 ---------------------------------------------------------------------- Notes to the Financial Statements 135 iShares Trust Notes to the Financial Statements (continued) At March 31, 2002, the aggregate unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:
----------------------------------------------------------------------------------------------------------- Net Unrealized Tax Unrealized Unrealized Appreciation iShares Index Fund Cost Appreciation Depreciation (Depreciation) ----------------------------------------------------------------------------------------------------------- S&P 100 $ 145,146,139 $ 1,974,691 $ (30,756,034) $ (28,781,343) S&P 500 4,889,439,782 145,008,903 (754,666,373) (609,657,470) S&P 500/BARRA Growth 504,513,892 15,604,543 (41,665,113) (26,060,570) S&P 500/BARRA Value 652,350,264 18,414,953 (70,559,666) (52,144,713) S&P MidCap 400 630,202,395 63,275,494 (35,322,889) 27,952,605 S&P MidCap 400/BARRA Growth 262,334,906 22,454,120 (12,594,890) 9,859,230 S&P MidCap 400/BARRA Value 448,918,234 45,387,492 (8,144,536) 37,242,956 S&P SmallCap 600 1,162,966,816 106,417,739 (39,018,466) 67,399,273 S&P SmallCap 600/BARRA Growth 197,201,330 17,373,013 (6,529,161) 10,843,852 S&P SmallCap 600/BARRA Value 460,462,963 45,949,039 (8,696,894) 37,252,145 S&P Global 100 59,810,746 1,410,057 (13,445,032) (12,034,975) S&P Global Energy Sector 14,904,429 1,553,790 (112,267) 1,441,523 S&P Global Financial Sector 10,193,784 703,955 (286,295) 417,660 S&P Global Healthcare Sector 17,466,326 737,141 (1,067,224) (330,083) S&P Global Technology Sector 8,767,491 29,005 (927,111) (898,106) S&P Global Telecommunications Sector 15,200,091 301,790 (2,064,675) (1,762,885) S&P Europe 350 632,446,574 5,796,085 (33,854,771) (28,058,686) S&P/TSE 60 8,777,466 875,333 (2,930,725) (2,055,392) S&P Latin America 40 6,183,595 1,678,223 (62,502) 1,615,721 S&P/TOPIX 150 37,747,510 1,927,082 (3,611,698) (1,684,616) Nasdaq Biotechnology 383,961,815 623,914 (58,243,704) (57,619,790) -----------------------------------------------------------------------------------------------------------
4. iSHARES TRANSACTIONS At March 31, 2002, there were an unlimited number of no par value shares of beneficial interest ("iShares") authorized. iShares are issued and redeemed by each Fund only in Creation Units or multiples thereof. Except when aggregated in Creation Units, iShares are not redeemable. Transactions in iShares for each Fund are disclosed in detail in the Statements of Changes in Net Assets. The consideration for the purchase of Creation Units of a Fund generally consists of the in-kind contribution of a designated portfolio of equity securities constituting a substantial replication, or a portfolio sampling representation, of the stocks involved in the relevant Fund's underlying index and an amount of cash. A purchase transaction fee and a redemption transaction fee are charged to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units of iShares. 5. LOANS OF PORTFOLIO SECURITIES Each Fund may lend its investment securities to approved borrowers such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received is required to 136 2002 iShares Annual Report to Shareholders iShares Trust Notes to the Financial Statements (continued) have a value of at least 102% of the market value of the loaned securities for securities denominated in U.S. dollars and a value of at least 105% for all other securities. The collateral is maintained thereafter, at a value equal to at least 100% of the current market value of the securities on loan. The risks to the Funds of securities lending are that the borrower may not provide additional collateral when required or return the securities when due. As of March 31, 2002, the Funds had loaned securities which were collateralized by cash. The cash collateral received was invested in commercial paper and money market mutual funds. The market value of the securities on loan at March 31, 2002 and the value of the related collateral are disclosed in the Statements of Assets and Liabilities. 6. LEGAL PROCEEDINGS In April 2002, the judge overseeing an ongoing action in the U.S. District Court for the Northern District of Illinois granted leave for a United States patentholder named MOPEX, Inc. to amend its complaint to add the Trust, along with seven other parties, as a defendant. There are now a total of twenty defendants, including the Trust's investment advisor, other exchange traded funds, various fund service providers and market makers, and the Chicago Stock Exchange, Inc. In the action, the plaintiff alleges that the actions of the parties, now including the Trust, infringed their patent. In addition, the plaintiff alleges that the parties engaged in a "conspiracy" amongst themselves to infringe the patent. Although this is the only case to which the Trust has been named as a party, this action is one of three involving related issues. The Trust believes that it has valid defenses to all claims raised by the patentholder. However, a resolution of this case may impose increased costs on the Trust and thus raise the expense ratios of the Funds, adversely affecting performance. Notes to the Financial Statements 137 Report of Independent Accountants To the Shareholders and Board of Trustees iShares Trust: In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the funds comprising the iShares S&P Series Funds and the iShares Nasdaq Biotechnology Index Fund (the "Funds"), as listed on the table of contents at March 31, 2002, the results of each of their operations for the periods then ended, and the changes in each of their net assets and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Funds' management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at March 31, 2002 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP San Francisco, California April 26, 2002 138 2002 iShares Annual Report to Shareholders iShares Trust Tax Information (Unaudited) For the period ended March 31, 2002, certain of the Funds earned foreign source income and paid foreign taxes which they intend to pass through to their shareholders pursuant to Section 853 of the Internal Revenue Code as follows:
------------------------------------------------------------------------ Foreign Source Foreign iShares Index Fund Income Earned Taxes Paid ------------------------------------------------------------------------ S&P Global Energy Sector $ 54,510 $ 5,346 S&P Global Telecommunications Sector 33,144 3,018 S&P Europe 350 4,564,773 513,329 S&P/TSE 60 121,835 18,320 S&P Latin America 40 106,428 881 S&P/TOPIX 150 129,334 19,089 ------------------------------------------------------------------------
For corporate shareholders, a portion of the income dividends paid by certain of the Funds during the period ended March 31, 2002 qualified for the dividends-received deduction: -------------------------------------------------------- Dividends- Received iShares Index Fund Deduction -------------------------------------------------------- S&P 100 100.00% S&P 500 99.90 S&P 500/BARRA Growth 99.95 S&P 500/BARRA Value 99.29 S&P MidCap 400 99.72 S&P MidCap 400/BARRA Growth 98.03 S&P MidCap 400/BARRA Value 99.85 S&P SmallCap 600 98.15 -------------------------------------------------------- -------------------------------------------------------- Dividends- Received iShares Index Fund Deduction -------------------------------------------------------- S&P SmallCap 600/BARRA Growth 98.57% S&P SmallCap 600/BARRA Value 99.31 S&P Global 100 76.61 S&P Global Energy Sector 74.17 S&P Global Financials Sector 60.51 S&P Global Healthcare Sector 100.00 S&P Global Telecommunications Sector 100.00 S&P/TSE 60 0.15 -------------------------------------------------------- Tax Information 139 iShares Trust Shareholder Meeting Results (Unaudited) A special meeting of shareholders of the iShares Trust was held on November 15, 2001. At the meeting, the following matter was voted upon and approved by the shareholders. The matter voted upon was a Trust-wide proposal and the voting results are presented below. Proposal: To elect the six nominees specified below as Trustees, to -------- hold office until their successors are duly elected and qualified. ------------------------------------------------------------------------ Trustee Votes for Votes Withheld ------------------------------------------------------------------------ Nathan Most 99,539,634 163,697 Richard K. Lyons 99,539,634 163,697 George G.C. Parker 99,539,634 163,697 John B. Carroll 99,539,634 163,697 W. Allen Reed 99,539,634 163,697 Garrett F. Bouton 99,539,634 163,697 ------------------------------------------------------------------------ Messrs. Most, Lyons, and Parker previously served as Trustees of the Trust and were reelected. Messrs. Carroll, Reed and Bouton were newly elected. 140 2002 iShares Annual Report to Shareholders iShares Trust Supplemental Information (Unaudited) The charts below present information about the differences between the daily closing price on secondary markets for shares of an iShares Fund and that Fund's net asset value. Net asset value, or "NAV", is the price per share at which each Fund issues and redeems shares. It is calculated in accordance with the standard formula for valuing mutual fund shares as of the close of regular trading (normally 4:00 p.m. Eastern time) every day the New York Stock Exchange is open. The "Closing Price" of each iShares Fund is the price of the last reported trade for shares of such Fund on any major U.S. market. Each Fund's Closing Price may be at, above or below its NAV. The NAV of each Fund will fluctuate with changes in the market value of its portfolio holdings. The trading price of each Fund will fluctuate in accordance with changes in its NAV, as well as market supply and demand. Premiums or discounts are the differences (generally expressed as a percentage) between the NAV and Closing Price of a Fund on a given day. A premium is the amount that a Fund is trading above the reported NAV, expressed as a percentage of the NAV. A discount is the amount that a Fund is trading below the reported NAV, expressed as a percentage of the NAV. One reason for differences is that timing discrepancies can exist between the determination of NAV and Closing Price of a Fund. Trading activity varies and it is important to note that the date/time of the last trade (which is recorded as the Closing Price) may not take place at the time when the Funds normally calculated NAV. Each Fund normally trades on its respective stock exchange until 4:00 p.m. (Eastern Time). Price Discovery, the constant flow of information among investors, corporations and financial institutions, causes market prices to change and evolve throughout the trading day, even after non-U.S. markets are closed. Price Discovery between the time that each Fund calculates its NAV and the date/time of the last trade may contribute to any difference between the NAV and the Closing Price of each Fund. The following information shows the frequency distributions of premiums and discounts for each of the iShares Funds included in this report. The information shown for each Fund is for each full calendar quarter completed after the inception date of such Fund through the date of this report (March 31, 2002). The specific periods covered for each Fund is disclosed in the chart for such Fund. The vertical column of each chart shows the premium or discount expressed as a percentage of NAV. The horizontal column indicates the number of trading days in the period covered by the chart. Each bar in the chart shows the number of trading days in which the iShares Fund traded within the premium/discount range indicated. All data presented here represents past performance, which cannot be used to predict future results. Supplemental Information 141 iShares Trust Supplemental Information (Unaudited) (continued) iShares S&P 100 Index Fund PERIOD COVERED: JANUARY 1, 2001 THROUGH MARCH 31, 2002 [GRAPHIC] PERCENT PREMIUMS/DISCOUNTS NUMBER OF DAYS GT 6.00% 0 GT 5.50%_LT 6.00% 0 GT 5.00%_LT 5.50% 0 GT 4.50%_LT 5.00% 0 GT 4 00%_LT 4.50% 0 GT 3.50%_LT 4.00% 0 GT 3.00%_LT 3.50% 0 GT 2.50%_LT 3.00% 0 GT 2.00%_LT 2.50% 0 GT 1.50%_LT 2.00% 1 GT 1.00%_LT 1.50% 6 GT 0.50%_LT 1.00% 14 LT 0.50%_GT (0.50)% 272 LT (0.50)%_GT (1.00)% 12 LT (1.00)%_GT (1.50)% 0 LT (1.50)%_GT (2.00)% 2 LT (2.00)%_GT (2.50)% 0 LT (2.50)%_GT (3.00)% 0 LT (3.00)%_GT (3.50)% 0 LT (3.50)%_GT (4.00)% 0 LT (4.00)%_GT (4.50)% 0 LT (4.50)%_GT (5.00)% 0 LT (5.00)%_GT (5.50)% 0 LT (5.50)%_GT (6.00)% 0 LT (6.00)% 0 iShares S&P 500 Index Fund PERIOD COVERED: July 1, 2000 THROUGH MARCH 31, 2002 [GRAPHIC] PERCENT PREMIUMS/DISCOUNTS NUMBER OF DAYS GT 6.00% 0 GT 5.50%_LT 6.00% 0 GT 5.00%_LT 5.50% 0 GT 4.50%_LT 5.00% 0 GT 4 00%_LT 4.50% 0 GT 3.50%_LT 4.00% 0 GT 3.00%_LT 3.50% 0 GT 2.50%_LT 3.00% 0 GT 2.00%_LT 2.50% 0 GT 1.50%_LT 2.00% 0 GT 1.00%_LT 1.50% 1 GT 0.50%_LT 1.00% 2 LT 0.50%_GT (0.50)% 423 LT (0.50)%_GT (1.00)% 8 LT (1.00)%_GT (1.50)% 0 LT (1.50)%_GT (2.00)% 0 LT (2.00)%_GT (2.50)% 1 LT (2.50)%_GT (3.00)% 0 LT (3.00)%_GT (3.50)% 0 LT (3.50)%_GT (4.00)% 0 LT (4.00)%_GT (4.50)% 0 LT (4.50)%_GT (5.00)% 0 LT (5.00)%_GT (5.50)% 0 LT (5.50)%_GT (6.00)% 0 LT (6.00)% 0 142 2002 iShares Annual Report to Shareholders iShares Trust Supplemental Information (Unaudited) (continued) iShares S&P 500/BARRA Growth Index Fund PERIOD COVERED: JULY 1, 2000 THROUGH MARCH 31, 2002 [GRAPHIC] PERCENT PREMIUMS/DISCOUNTS NUMBER OF DAYS GT 6.00% 0 GT 5.50%_LT 6.00% 0 GT 5.00%_LT 5.50% 0 GT 4.50%_LT 5.00% 0 GT 4 00%_LT 4.50% 0 GT 3.50%_LT 4.00% 0 GT 3.00%_LT 3.50% 0 GT 2.50%_LT 3.00% 0 GT 2.00%_LT 2.50% 0 GT 1.50%_LT 2.00% 0 GT 1.00%_LT 1.50% 2 GT 0.50%_LT 1.00% 14 LT 0.50%_GT (0.50)% 407 LT (0.50)%_GT (1.00)% 10 LT (1.00)%_GT (1.50)% 1 LT (1.50)%_GT (2.00)% 1 LT (2.00)%_GT (2.50)% 0 LT (2.50)%_GT (3.00)% 0 LT (3.00)%_GT (3.50)% 0 LT (3.50)%_GT (4.00)% 0 LT (4.00)%_GT (4.50)% 0 LT (4.50)%_GT (5.00)% 0 LT (5.00)%_GT (5.50)% 0 LT (5.50)%_GT (6.00)% 0 LT (6.00)% 0 iShares S&P 500/BARRA Value Index Fund PERIOD COVERED: JULY 1, 2000 THROUGH MARCH 31, 2002 [GRAPHIC] PERCENT PREMIUMS/DISCOUNTS NUMBER OF DAYS GT 6.00% 0 GT 5.50%_LT 6.00% 0 GT 5.00%_LT 5.50% 0 GT 4.50%_LT 5.00% 0 GT 4 00%_LT 4.50% 0 GT 3.50%_LT 4.00% 0 GT 3.00%_LT 3.50% 0 GT 2.50%_LT 3.00% 0 GT 2.00%_LT 2.50% 0 GT 1.50%_LT 2.00% 1 GT 1.00%_LT 1.50% 0 GT 0.50%_LT 1.00% 5 LT 0.50%_GT (0.50)% 426 LT (0.50)%_GT (1.00)% 3 LT (1.00)%_GT (1.50)% 0 LT (1.50)%_GT (2.00)% 0 LT (2.00)%_GT (2.50)% 0 LT (2.50)%_GT (3.00)% 0 LT (3.00)%_GT (3.50)% 0 LT (3.50)%_GT (4.00)% 0 LT (4.00)%_GT (4.50)% 0 LT (4.50)%_GT (5.00)% 0 LT (5.00)%_GT (5.50)% 0 LT (5.50)%_GT (6.00)% 0 LT (6.00)% 0 Supplemental Information 143 iShares Trust Supplemental Information (Unaudited) (continued) iShares S&P MidCap 400 Index Fund PERIOD COVERED: JULY 1, 2000 THROUGH MARCH 31, 2002 [GRAPHIC] PERCENT PREMIUMS/DISCOUNTS NUMBER OF DAYS GT 6.00% 0 GT 5.50%_LT 6.00% 0 GT 5.00%_LT 5.50% 0 GT 4.50%_LT 5.00% 0 GT 4 00%_LT 4.50% 0 GT 3.50%_LT 4.00% 0 GT 3.00%_LT 3.50% 0 GT 2.50%_LT 3.00% 0 GT 2.00%_LT 2.50% 0 GT 1.50%_LT 2.00% 0 GT 1.00%_LT 1.50% 0 GT 0.50%_LT 1.00% 4 LT 0.50%_GT (0.50)% 426 LT (0.50)%_GT (1.00)% 4 LT (1.00)%_GT (1.50)% 1 LT (1.50)%_GT (2.00)% 0 LT (2.00)%_GT (2.50)% 0 LT (2.50)%_GT (3.00)% 0 LT (3.00)%_GT (3.50)% 0 LT (3.50)%_GT (4.00)% 0 LT (4.00)%_GT (4.50)% 0 LT (4.50)%_GT (5.00)% 0 LT (5.00)%_GT (5.50)% 0 LT (5.50)%_GT (6.00)% 0 LT (6.00)% 0 iShares S&P MidCap 400/BARRA Growth Index Fund PERIOD COVERED: OCTOBER 1, 2000 THROUGH MARCH 31, 2002 [GRAPHIC] PERCENT PREMIUMS/DISCOUNTS NUMBER OF DAYS GT 6.00% 0 GT 5.50%_LT 6.00% 0 GT 5.00%_LT 5.50% 0 GT 4.50%_LT 5.00% 0 GT 4 00%_LT 4.50% 0 GT 3.50%_LT 4.00% 0 GT 3.00%_LT 3.50% 0 GT 2.50%_LT 3.00% 0 GT 2.00%_LT 2.50% 0 GT 1.50%_LT 2.00% 2 GT 1.00%_LT 1.50% 3 GT 0.50%_LT 1.00% 9 LT 0.50%_GT (0.50)% 346 LT (0.50)%_GT (1.00)% 9 LT (1.00)%_GT (1.50)% 1 LT (1.50)%_GT (2.00)% 1 LT (2.00)%_GT (2.50)% 1 LT (2.50)%_GT (3.00)% 0 LT (3.00)%_GT (3.50)% 0 LT (3.50)%_GT (4.00)% 0 LT (4.00)%_GT (4.50)% 0 LT (4.50)%_GT (5.00)% 0 LT (5.00)%_GT (5.50)% 0 LT (5.50)%_GT (6.00)% 0 LT (6.00)% 0 144 2002 iShares Annual Report to Shareholders iShares Trust Supplemental Information (Unaudited) (continued) iShares S&P MidCap 400/BARRA Value Index Fund PERIOD COVERED: OCTOBER 1, 2000 THROUGH MARCH 31, 2002 [GRAPHIC] PERCENT PREMIUMS/DISCOUNTS NUMBER OF DAYS GT 6.00% 0 GT 5.50%_LT 6.00% 0 GT 5.00%_LT 5.50% 0 GT 4.50%_LT 5.00% 0 GT 4 00%_LT 4.50% 0 GT 3.50%_LT 4.00% 0 GT 3.00%_LT 3.50% 0 GT 2.50%_LT 3.00% 0 GT 2.00%_LT 2.50% 0 GT 1.50%_LT 2.00% 0 GT 1.00%_LT 1.50% 1 GT 0.50%_LT 1.00% 2 LT 0.50%_GT (0.50)% 364 LT (0.50)%_GT (1.00)% 4 LT (1.00)%_GT (1.50)% 1 LT (1.50)%_GT (2.00)% 0 LT (2.00)%_GT (2.50)% 0 LT (2.50)%_GT (3.00)% 0 LT (3.00)%_GT (3.50)% 0 LT (3.50)%_GT (4.00)% 0 LT (4.00)%_GT (4.50)% 0 LT (4.50)%_GT (5.00)% 0 LT (5.00)%_GT (5.50)% 0 LT (5.50)%_GT (6.00)% 0 LT (6.00)% 0 iShares S&P SmallCap 600 Index Fund PERIOD COVERED: JULY 1, 2000 THROUGH MARCH 31, 2002 [GRAPHIC] PERCENT PREMIUMS/DISCOUNTS NUMBER OF DAYS GT 6.00% 0 GT 5.50%_LT 6.00% 0 GT 5.00%_LT 5.50% 0 GT 4.50%_LT 5.00% 0 GT 4 00%_LT 4.50% 0 GT 3.50%_LT 4.00% 0 GT 3.00%_LT 3.50% 0 GT 2.50%_LT 3.00% 0 GT 2.00%_LT 2.50% 0 GT 1.50%_LT 2.00% 0 GT 1.00%_LT 1.50% 1 GT 0.50%_LT 1.00% 7 LT 0.50%_GT (0.50)% 412 LT (0.50)%_GT (1.00)% 12 LT (1.00)%_GT (1.50)% 3 LT (1.50)%_GT (2.00)% 0 LT (2.00)%_GT (2.50)% 0 LT (2.50)%_GT (3.00)% 0 LT (3.00)%_GT (3.50)% 0 LT (3.50)%_GT (4.00)% 0 LT (4.00)%_GT (4.50)% 0 LT (4.50)%_GT (5.00)% 0 LT (5.00)%_GT (5.50)% 0 LT (5.50)%_GT (6.00)% 0 LT (6.00)% 0 Supplemental Information 145 iShares Trust Supplemental Information (Unaudited) (continued) iShares S&P SmallCap 600/BARRA Growth Index Fund PERIOD COVERED: OCTOBER 1, 2000 THROUGH MARCH 31, 2002 [GRAPHIC] PERCENT PREMIUMS/DISCOUNTS NUMBER OF DAYS GT 6.00% 0 GT 5.50%_LT 6.00% 0 GT 5.00%_LT 5.50% 0 GT4.50%_LT5.00% 0 GT 4 00%_LT 4.50% 0 GT 3.50%_LT 4.00% 0 GT 3.00%_LT 3.50% 0 GT 2.50%_LT 3.00% 0 GT 2.00%_LT 2.50% 0 GT 1.50%_LT 2.00% 2 GT 1.00%_LT 1.50% 5 GT 0.50%_LT 1.00% 24 LT 0.50%_GT (0.50)% 320 LT (0.50)%_GT (1.00)% 17 LT (1.00)%_GT (1.50)% 1 LT (1.50)%_GT (2.00)% 0 LT (2.00)%_GT (2.50)% 1 LT (2.50)%_GT (3.00)% 1 LT (3.00)%_GT (3.50)% 1 LT (3.50)%_GT (4.00)% 0 LT (4.00)%_GT (4.50)% 0 LT (4.50)%_GT (5.00)% 0 LT (5.00)%_GT (5.50)% 0 LT (5.50)%_GT (6.00)% 0 LT (6.00)% 0 iShares S&P SmallCap 600/BARRA Value Index Fund PERIOD COVERED: OCTOBER 1, 2000 THROUGH MARCH 31, 2002 [GRAPHIC] PERCENT PREMIUMS/DISCOUNTS NUMBER OF DAYS GT 6.00% 0 GT 5.50%_LT 6.00% 0 GT 5.00%_LT 5.50% 0 GT4.50%_LT5.00% 0 GT 4 00%_LT 4.50% 0 GT 3.50%_LT 4.00% 0 GT 3.00%_LT 3.50% 0 GT 2.50%_LT 3.00% 0 GT 2.00%_LT 2.50% 0 GT 1.50%_LT 2.00% 0 GT 1.00%_LT 1.50% 2 GT 0.50%_LT 1.00% 16 LT 0.50%_GT (0.50)% 334 LT (0.50)%_GT (1.00)% 13 LT (1.00)%_GT (1.50)% 7 LT (1.50)%_GT (2.00)% 0 LT (2.00)%_GT (2.50)% 0 LT (2.50)%_GT (3.00)% 0 LT (3.00)%_GT (3.50)% 0 LT (3.50)%_GT (4.00)% 0 LT (4.00)%_GT (4.50)% 0 LT (4.50)%_GT (5.00)% 0 LT (5.00)%_GT (5.50)% 0 LT (5.50)%_GT (6.00)% 0 LT (6.00)% 0 146 2002 iShares Annual Report to Shareholders iShares Trust Supplemental Information (Unaudited) (continued) iShares S&P Global 100 Index Fund PERIOD COVERED: JANUARY 1, 2001 THROUGH MARCH 31, 2002 [GRAPHIC] PERCENT PREMIUMS/DISCOUNTS NUMBER OF DAYS GT 6.00% 0 GT 5.50%_LT 6.00% 0 GT 5.00%_LT 5.50% 0 GT4.50%_LT5.00% 0 GT 4 00%_LT 4.50% 0 GT 3.50%_LT 4.00% 0 GT 3.00%_LT 3.50% 0 GT 2.50%_LT 3.00% 0 GT 2.00%_LT 2.50% 2 GT 1.50%_LT 2.00% 1 GT 1.00%_LT 1.50% 15 GT 0.50%_LT 1.00% 55 LT 0.50%_GT (0.50)% 217 LT (0.50)%_GT (1.00)% 12 LT (1.00)%_GT (1.50)% 6 LT (1.50)%_GT (2.00)% 0 LT (2.00)%_GT (2.50)% 0 LT (2.50)%_GT (3.00)% 0 LT (3.00)%_GT (3.50)% 0 LT (3.50)%_GT (4.00)% 0 LT (4.00)%_GT (4.50)% 0 LT (4.50)%_GT (5.00)% 0 LT (5.00)%_GT (5.50)% 0 LT (5.50)%_GT (6.00)% 0 LT (6.00)% 0 iShares S&P Global Energy Sector Index Fund PERIOD COVERED: JANUARY 1, 2002 THROUGH MARCH 31, 2002 [GRAPHIC] PERCENT PREMIUMS/DISCOUNTS NUMBER OF DAYS GT 6.00% 0 GT 5.50%_LT 6.00% 0 GT 5.00%_LT 5.50% 0 GT4.50%_LT5.00% 0 GT 4 00%_LT 4.50% 0 GT 3.50%_LT 4.00% 0 GT 3.00%_LT 3.50% 0 GT 2.50%_LT 3.00% 0 GT 2.00%_LT 2.50% 0 GT 1.50%_LT 2.00% 0 GT 1.00%_LT 1.50% 0 GT 0.50%_LT 1.00% 4 LT 0.50%_GT (0.50)% 44 LT (0.50)%_GT (1.00)% 5 LT (1.00)%_GT (1.50)% 2 LT (1.50)%_GT (2.00)% 3 LT (2.00)%_GT (2.50)% 0 LT (2.50)%_GT (3.00)% 1 LT (3.00)%_GT (3.50)% 1 LT (3.50)%_GT (4.00)% 0 LT (4.00)%_GT (4.50)% 0 LT (4.50)%_GT (5.00)% 0 LT (5.00)%_GT (5.50)% 0 LT (5.50)%_GT (6.00)% 0 LT (6.00)% 0 Supplemental Information 147 iShares Trust Supplemental Information (Unaudited) (continued) iShares S&P Global Financials Sector Index Fund PERIOD COVERED: JANUARY 1, 2002 THROUGH MARCH 31, 2002 [GRAPHIC] PERCENT PREMIUMS/DISCOUNTS NUMBER OF DAYS GT 6.00% 0 GT 5.50%_LT 6.00% 0 GT 5.00%_LT 5.50% 0 GT4.50%_LT5.00% 0 GT 4 00%_LT 4.50% 0 GT 3.50%_LT 4.00% 0 GT 3.00%_LT 3.50% 0 GT 2.50%_LT 3.00% 2 GT 2.00%_LT 2.50% 2 GT 1.50%_LT 2.00% 0 GT 1.00%_LT 1.50% 3 GT 0.50%_LT 1.00% 5 LT 0.50%_GT (0.50)% 35 LT (0.50)%_GT (1.00)% 5 LT (1.00)%_GT (1.50)% 5 LT (1.50)%_GT (2.00)% 1 LT (2.00)%_GT (2.50)% 1 LT (2.50)%_GT (3.00)% 1 LT (3.00)%_GT (3.50)% 0 LT (3.50)%_GT (4.00)% 0 LT (4.00)%_GT (4.50)% 0 LT (4.50)%_GT (5.00)% 0 LT (5.00)%_GT (5.50)% 0 LT (5.50)%_GT (6.00)% 0 LT (6.00)% 0 iShares S&P Global Healthcare Sector Index Fund PERIOD COVERED: JANUARY 1, 2002 THROUGH MARCH 31, 2002 [GRAPHIC] PERCENT PREMIUMS/DISCOUNTS NUMBER OF DAYS GT 6.00% 0 GT 5.50%_LT 6.00% 0 GT 5.00%_LT 5.50% 0 GT4.50%_LT5.00% 0 GT 4 00%_LT 4.50% 0 GT 3.50%_LT 4.00% 0 GT 3.00%_LT 3.50% 0 GT 2.50%_LT 3.00% 0 GT 2.00%_LT 2.50% 0 GT 1.50%_LT 2.00% 0 GT 1.00%_LT 1.50% 0 GT 0.50%_LT 1.00% 7 LT 0.50%_GT (0.50)% 49 LT (0.50)%_GT (1.00)% 3 LT (1.00)%_GT (1.50)% 1 LT (1.50)%_GT (2.00)% 0 LT (2.00)%_GT (2.50)% 0 LT (2.50)%_GT (3.00)% 0 LT (3.00)%_GT (3.50)% 0 LT (3.50)%_GT (4.00)% 0 LT (4.00)%_GT (4.50)% 0 LT (4.50)%_GT (5.00)% 0 LT (5.00)%_GT (5.50)% 0 LT (5.50)%_GT (6.00)% 0 LT (6.00)% 0 148 2002 iShares Annual Report to Shareholders iShares Trust Supplemental Information (Unaudited) (continued) iShares S&P Global Technology Sector Index Fund PERIOD COVERED: JANUARY 1, 2002 THROUGH MARCH 31, 2002 [GRAPHIC] PERCENT PREMIUMS/DISCOUNTS NUMBER OF DAYS GT 6.00% 0 GT 5.50%_LT 6.00% 0 GT 5.00%_LT 5.50% 0 GT4.50%_LT5.00% 0 GT 4 00%_LT 4.50% 1 GT 3.50%_LT 4.00% 2 GT 3.00%_LT 3.50% 0 GT 2.50%_LT 3.00% 1 GT 2.00%_LT 2.50% 2 GT 1.50%_LT 2.00% 3 GT 1.00%_LT 1.50% 4 GT 0.50%_LT 1.00% 8 LT 0.50%_GT (0.50)% 25 LT (0.50)%_GT (1.00)% 6 LT (1.00)%_GT (1.50)% 6 LT (1.50)%_GT (2.00)% 0 LT (2.00)%_GT (2.50)% 0 LT (2.50)%_GT (3.00)% 1 LT (3.00)%_GT (3.50)% 0 LT (3.50)%_GT (4.00)% 0 LT (4.00)%_GT (4.50)% 0 LT (4.50)%_GT (5.00)% 1 LT (5.00)%_GT (5.50)% 0 LT (5.50)%_GT (6.00)% 0 LT (6.00)% 0 iShares S&P Global Telecommunications Sector Index Fund PERIOD COVERED: JANUARY 1, 2002 THROUGH MARCH 31, 2002 [GRAPHIC] PERCENT PREMIUMS/DISCOUNTS NUMBER OF DAYS GT 6.00% 0 GT 5.50%_LT 6.00% 0 GT 5.00%_LT 5.50% 0 GT4.50%_LT5.00% 0 GT 4 00%_LT 4.50% 0 GT 3.50%_LT 4.00% 0 GT 3.00%_LT 3.50% 1 GT 2.50%_LT 3.00% 2 GT 2.00%_LT 2.50% 3 GT 1.50%_LT 2.00% 2 GT 1.00%_LT 1.50% 4 GT 0.50%_LT 1.00% 9 LT 0.50%_GT (0.50)% 32 LT (0.50)%_GT (1.00)% 4 LT (1.00)%_GT (1.50)% 2 LT (1.50)%_GT (2.00)% 1 LT (2.00)%_GT (2.50)% 0 LT (2.50)%_GT (3.00)% 0 LT (3.00)%_GT (3.50)% 0 LT (3.50)%_GT (4.00)% 0 LT (4.00)%_GT (4.50)% 0 LT (4.50)%_GT (5.00)% 0 LT (5.00)%_GT (5.50)% 0 LT (5.50)%_GT (6.00)% 0 LT (6.00)% 0 Supplemental Information 149 iShares Trust Supplemental Information (Unaudited) (continued) iShares S&P Europe 350 Index Fund PERIOD COVERED: OCTOBER 1, 2000 THROUGH MARCH 31, 2002 [GRAPHIC] PERCENT PREMIUMS/DISCOUNTS NUMBER OF DAYS GT 6.00% 1 GT 5.50%_LT 6.00% 0 GT 5.00%_LT 5.50% 1 GT4.50%_LT5.00% 1 GT 4 00%_LT 4.50% 2 GT 3.50%_LT 4.00% 11 GT 3.00%_LT 3.50% 19 GT 2.50%_LT 3.00% 14 GT 2.00%_LT 2.50% 31 GT 1.50%_LT 2.00% 39 GT 1.00%_LT 1.50% 53 GT 0.50%_LT 1.00% 85 LT 0.50%_GT (0.50)% 106 LT (0.50)%_GT (1.00)% 7 LT (1.00)%_GT (1.50)% 1 LT (1.50)%_GT (2.00)% 1 LT (2.00)%_GT (2.50)% 0 LT (2.50)%_GT (3.00)% 0 LT (3.00)%_GT (3.50)% 0 LT (3.50)%_GT (4.00)% 0 LT (4.00)%_GT (4.50)% 0 LT (4.50)%_GT (5.00)% 0 LT (5.00)%_GT (5.50)% 0 LT (5.50)%_GT (6.00)% 0 LT (6.00)% 0 iShares S&P/TSE 60 Index Fund PERIOD COVERED: JULY 1, 2000 THROUGH MARCH 31, 2002 [GRAPHIC] PERCENT PREMIUMS/DISCOUNTS NUMBER OF DAYS GT 6.00% 1 GT 5.50%_LT 6.00% 1 GT 5.00%_LT 5.50% 0 GT4.50%_LT5.00% 0 GT 4 00%_LT 4.50% 1 GT 3.50%_LT 4.00% 4 GT 3.00%_LT 3.50% 5 GT 2.50%_LT 3.00% 10 GT 2.00%_LT 2.50% 14 GT 1.50%_LT 2.00% 19 GT 1.00%_LT 1.50% 29 GT 0.50%_LT 1.00% 50 LT 0.50%_GT (0.50)% 147 LT (0.50)%_GT (1.00)% 55 LT (1.00)%_GT (1.50)% 33 LT (1.50)%_GT (2.00)% 19 LT (2.00)%_GT (2.50)% 16 LT (2.50)%_GT (3.00)% 6 LT (3.00)%_GT (3.50)% 9 LT (3.50)%_GT (4.00)% 8 LT (4.00)%_GT (4.50)% 1 LT (4.50)%_GT (5.00)% 3 LT (5.00)%_GT (5.50)% 3 LT (5.50)%_GT (6.00)% 0 LT (6.00)% 0 150 2002 iShares Annual Report to Shareholders iShares Trust Supplemental Information (Unaudited) (continued) iShares S&P Latin America 40 Index Fund PERIOD COVERED: JANUARY 1, 2002 THROUGH MARCH 31, 2002 [GRAPHIC] PERCENT PREMIUMS/DISCOUNTS NUMBER OF DAYS GT 6.00% 0 GT 5.50%_LT 6.00% 0 GT 5.00%_LT 5.50% 0 GT 4.50%_LT5.00% 0 GT 4 00%_LT 4.50% 0 GT 3.50%_LT 4.00% 0 GT 3.00%_LT 3.50% 0 GT 2.50%_LT 3.00% 0 GT 2.00%_LT 2.50% 3 GT 1.50%_LT 2.00% 1 GT 1.00%_LT 1.50% 3 GT 0.50%_LT 1.00% 9 LT 0.50%_GT (0.50)% 33 LT (0.50)%_GT (1.00)% 7 LT (1.00)%_GT (1.50)% 3 LT (1.50)%_GT (2.00)% 0 LT (2.00)%_GT (2.50)% 1 LT (2.50)%_GT (3.00)% 0 LT (3.00)%_GT (3.50)% 0 LT (3.50)%_GT (4.00)% 0 LT (4.00)%_GT (4.50)% 0 LT (4.50)%_GT (5.00)% 0 LT (5.00)%_GT (5.50)% 0 LT (5.50)%_GT (6.00)% 0 LT (6.00)% 0 iShares S&P/TOPIX 150 Index Fund PERIOD COVERED: JANUARY 1, 2002 THROUGH MARCH 31, 2002 [GRAPHIC] PERCENT PREMIUMS/DISCOUNTS NUMBER OF DAYS GT 6.00% 0 GT 5.50%_LT 6.00% 0 GT 5.00%_LT 5.50% 0 GT 4.50%_LT5.00% 1 GT 4 00%_LT 4.50% 0 GT 3.50%_LT 4.00% 1 GT 3.00%_LT 3.50% 0 GT 2.50%_LT 3.00% 0 GT 2.00%_LT 2.50% 1 GT 1.50%_LT 2.00% 3 GT 1.00%_LT 1.50% 3 GT 0.50%_LT 1.00% 8 LT 0.50%_GT (0.50)% 28 LT (0.50)%_GT (1.00)% 9 LT (1.00)%_GT (1.50)% 4 LT (1.50)%_GT (2.00)% 2 LT (2.00)%_GT (2.50)% 0 LT (2.50)%_GT (3.00)% 0 LT (3.00)%_GT (3.50)% 0 LT (3.50)%_GT (4.00)% 0 LT (4.00)%_GT (4.50)% 0 LT (4.50)%_GT (5.00)% 0 LT (5.00)%_GT (5.50)% 0 LT (5.50)%_GT (6.00)% 0 LT (6.00)% 0 Supplemental Information 151 iShares Trust Supplemental Information (Unaudited) (continued) iShares Nasdaq Biotechnology Index Fund PERIOD COVERED: APRIL 1, 2001 THROUGH MARCH 31, 2002 [GRAPHIC] PERCENT PREMIUMS/DISCOUNTS NUMBER OF DAYS GT 6.00% 0 GT 5.50%_LT 6.00% 0 GT 5.00%_LT 5.50% 0 GT4.50%_LT5.00% 0 GT 4 00%_LT 4.50% 0 GT 3.50%_LT 4.00% 0 GT 3.00%_LT 3.50% 0 GT 2.50%_LT 3.00% 0 GT 2.00%_LT 2.50% 1 GT 1.50%_LT 2.00% 0 GT 1.00%_LT 1.50% 0 GT 0.50%_LT 1.00% 14 LT 0.50%_GT (0.50)% 222 LT (0.50)%_GT (1.00)% 9 LT (1.00)%_GT (1.50)% 0 LT (1.50)%_GT (2.00)% 1 LT (2.00)%_GT (2.50)% 0 LT (2.50)%_GT (3.00)% 0 LT (3.00)%_GT (3.50)% 0 LT (3.50)%_GT (4.00)% 0 LT (4.00)%_GT (4.50)% 0 LT (4.50)%_GT (5.00)% 0 LT (5.00)%_GT (5.50)% 0 LT (5.50)%_GT (6.00)% 0 LT (6.00)% 0 152 2002 iShares Annual Report to Shareholders iShares Trust Trustees Information (Unaudited) The Board of Trustees has responsibility for the overall management and operations of the Trust, including general supervision of the duties performed by BGFA and other service providers. Each Trustee serves until his or her successor is duly elected and qualified. iShares Trust, iShares, Inc., Barclays Global Investors Funds and Master Investment Portfolio are considered to be members of the same fund complex, as defined in Form N-1A under the 1940 Act. Each Trustee also serves as a Director for iShares, Inc. and oversees 77 portfolios within the fund complex. In addition, Richard K. Lyons serves as a Trustee for Barclays Global Investors Funds and Master Investment Portfolio and oversees 100 portfolios within the fund complex. Additional information about the Funds' Trustees may be found in the Funds' Statement of Additional Information, which is available without charge upon request by calling toll-free 1-800-474-2737.
Interested Trustees Position(s), Principal Occupation(s) Name, Age and Address Length of Service During Past 5 Years Other Directorships Held ------------------------------------------------------------------------------------------------------------------------------------ *Garrett F. Bouton (56) Chairman (since Managing Director and Chief Executive Chairman of the Board of Directors Barclays Global Investors February 28, Officer (since 1999) for Barclays Global (since 1998) of BGFA; Director (since 45 Fremont Street 2002), Trustee Investors, N.A. ("BGI") Global Individual 1998) of BGI; Director of various San Francisco, CA 94105 (since January 1, Investor Business; Global H.R. Director (from Barclays subsidiaries (since 1997). 2002) and 1996-1999) for BGI. President. *Nathan Most (87) Trustee (since Consultant to BGI (1998-present), American None. P.O. Box 193 February 15, 2000) Stock Exchange (1996-2000) and the Hong Burlingame, CA 94011 Kong Stock Exchange (1998 to present); Consultant to the Amsterdam Stock Exchange (1997-1998); Consultant to the Pacific Stock Exchange (1997-1998); Formerly Senior Vice President American Stock Exchange (New Product Development) (1976-1996).
------------------------ * Garrett F. Bouton and Nathan Most are deemed to be "interested persons" (as defined in the 1940 Act) of the Trust due to their affiliations with BGFA, the Funds' investment advisor and BGI, the parent company of BGFA.
Independent Trustees Position(s), Principal Occupation(s) Name, Age and Address Length of Service During Past 5 Years Other Directorships Held ------------------------------------------------------------------------------------------------------------------------------------ John B. Carroll (65) Trustee (since Retired Vice President of Investment Former Trustee and member of the 520 Main Street January 1, 2002) Management (1984-2000) of Verizon Executive Committee (since 1991) of Ridgefield, CT 06877 Corporation; Advisory Board member of The Common Fund Institutional Funds, a Ibbotson Associates (1992-1998); former Vice non-profit organization; Member of the Chairman and Executive Committee Member Board of Managers of JP Morgan Private (1994-1998) of the Committee on Investment Equity Funds. of Employee Benefit Assets of the Financial Executive Institute. Richard K. Lyons (41) Trustee (since Professor, University of California, Berkeley: Board of Trustees: Matthews Asian Haas School of Business, February 15, 2000) Haas School of Business (since 1993); Funds since 1995 (oversees 6 UC Berkeley Consultant for IMF World Bank, Federal portfolios). Berkeley, CA 94720 Reserve Bank, and Citibank N.A. (since 2000)
Trustee Information 153 iShares Trust Trustees Information (Unaudited) (continued)
Interested Trustees (continued) Position(s), Principal Occupation(s) Name, Age and Address Length of Service During Past 5 Years Other Directorships Held ------------------------------------------------------------------------------------------------------------------------------------ George G.C. Parker (60) Trustee (since Dean Witter Distinguished Professor of Board of Directors: Affinity Group Graduate School of February 15, 2000) Finance (since 1994); Associate Dean for (since 1998); Bailard, Biehl and Business (Room K301) Academic Affairs, Director of MBA Program, Kaiser, Inc. (since 1985); California Stanford University and Professor, Stanford University: Graduate Casualty Group of Insurance Companies 521 Memorial Way School of Business (1993-2001). (since 1978); Continental Airlines, Stanford, CA 94305 Inc. (since 1996); Community First Financial Group (since 1995); Dresdner /RCM Mutual Funds (oversees 10 portfolios) (1994-2002); Tyon Ranch Company (since 1999). W. Allen Reed (54) Trustee (since President and Chief Executive Officer (since Director (since 1994) of General General Motors Investment January 1, 2002) 1994) of General Motors Investment Motors Investment Management Management Corp. Management Corporation. Corporation; Director (1995-1998) of 767 Fifth Avenue Taubman Centers, Inc. (a real estate New York, NY 10153 investment trust); Director (since 1992) of FLIR Systems (an imaging technology company); Director (since 1994) of General Motors Acceptance Corporation; Director (since 1994) of GMAC Insurance Holdings, Inc.; Director (since 1995) of Global Emerging Markets Fund; Director (since 2000) of Temple Inland Industries; Chairman (since 1995) of the Investment Advisory Committee of Howard Hughes Medical Institute. Officers who are not Trustees Principal Occupation(s) Directorships Held by Name, Age and Address Position During Past 5 Years Officers ------------------------------------------------------------------------------------------------------------------------------------ Lee T. Kranefuss (39) Vice President Chief Executive Officer of the Board of Trustees for Barclays Global Barclays Global Investors Individual Investor Business of BGI; The Investors Funds and Master Investment 45 Fremont Street Boston Consulting Group (until 1997). Portfolio (since 2001). San Francisco, CA 94105 Michael Latham (35) Secretary, Treasurer Director of Mutual Fund Delivery in the None. Barclays Global Investors and Principal U.S. Individual Investor Business of BGI 45 Fremont Street Financial Officer (since 2000); Head of Operations, BGI San Francisco, CA 94105 Europe (1997-2000); Manager, Portfolio Accounting Group of BGI (1994-1997). Donna M. Mccarthy (34) Assistant Treasurer Unit Director (formerly Director), None. Investors Bank & Trust Co. Mutual Fund Administration at Investors 200 Clarendon Street Bank & Trust Co. ("IBT"); Manager, Boston, MA 02116 Business Assurance Group, Coopers & Lybrand (1988-1994). Sandra I. Madden (34) Assistant Secretary Associate Counsel, Mutual Fund None. Investors Bank & Trust Co. Administration, IBT (since 1999); 200 Clarendon Street Associate, Scudder Kemper Boston, MA 02116 Investments, Inc. (1996-1999). Susan C. Mosher (45) Assistant Secretary Senior Director & Senior Counsel, Mutual None. Investors Bank & Trust Co. Fund Administration, IBT (since 1995). 200 Clarendon Street Boston, MA 02116
154 2002 iShares Annual Report to Shareholders iShares are distributed by SEI Investments iShares(R) Distribution Co. (SEI). Barclays Global 45 Fremont Street Fund Advisors (BGFA) serves as an adviser San Francisco, CA 94105 to iShares. Barclays Global Investors Services (BGIS) assists in the marketing of iShares. BGFA and BGIS are subsidiaries 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 S&P Series and the iShares S&P Series and the iShares Nasdaq Series. iShares are not sponsored, endorsed, issued, sold or promoted by Standard & Poor's or The Nasdaq Stock Market, Inc., nor do these companies make any representation regarding the advisability of investing in iShares. (C)2002 Barclays Global Investors. All rights reserved. iShares is a registered trademark of Barclays Global Investors, N.A. All other trademarks, servicemarks or registered trademarks are the property of their respective owners. This report is intended for the Funds' shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus. iShares(R) Industrial strength investment tools from BARCLAYS GLOBAL INVESTORS 1-800-iShares 1-800-474-2737 www.iShares.com