-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, B/5o9Pcq1fgYMUsFFGe6wdAmEICN9m/yS/uv6yOneuF4dxmh1bvSJNv02Hs+fJh9 GlTy9NKbzcMTJus4ZlgkMw== 0001021408-02-014834.txt : 20021204 0001021408-02-014834.hdr.sgml : 20021204 20021204163708 ACCESSION NUMBER: 0001021408-02-014834 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020930 FILED AS OF DATE: 20021204 EFFECTIVENESS DATE: 20021204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ISHARES TRUST CENTRAL INDEX KEY: 0001100663 IRS NUMBER: 943351276 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-09729 FILM NUMBER: 02848934 BUSINESS ADDRESS: STREET 1: 45 FREMONT STREET CITY: SAN FRANCISCO STATE: CA ZIP: 94105 N-30D 1 dn30d.txt SEMI-ANNUAL REPORTS FOR ISHARES S&P AND RUSSELL iShares(R) 2002 SEMI-ANNUAL REPORT TO SHAREHOLDERS SEPTEMBER 30, 2002 [PICTURE] INDUSTRIAL STRENGTH INVESTMENT TOOLS iSHARES RUSSELL 1000 INDEX FUND iSHARES RUSSELL 1000 GROWTH INDEX FUND iSHARES RUSSELL 1000 VALUE INDEX FUND iSHARES RUSSELL 2000 INDEX FUND iSHARES RUSSELL 2000 GROWTH INDEX FUND iSHARES RUSSELL 2000 VALUE INDEX FUND Table of Contents Shareholder Letter ...................................................... 1 Market Overview ......................................................... 3 Managers' Discussion & Analysis ......................................... 6 Schedules of Investments ................................................ 10 iShares Russell 1000 Index Fund ....................................... 10 iShares Russell 1000 Growth Index Fund ................................ 23 iShares Russell 1000 Value Index Fund ................................. 31 iShares Russell 2000 Index Fund ....................................... 41 iShares Russell 2000 Growth Index Fund ................................ 69 iShares Russell 2000 Value Index Fund ................................. 86 Financial Statements .................................................... 104 Financial Highlights .................................................... 108 Notes to the Financial Statements ....................................... 111 iShares Family of Funds ................................................. 118
To Our Shareholders While the second half of 2001 was a difficult period for us all, 2002 has also been a time of tumultuous market events. As a whole, the past year has seen scores of layoffs, company closings, and corporate accounting scandals in the wake of the emotional shock of September 11. The past year has been truly remarkable for iShares considering the market environment. By the close of our second 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. However, iShares has followed a very different course. Instead of shrinking in size, iShares' assets under management grew to over $24 billion as of September 30, 2002. In fact, the iShares family of funds became the nation's third fastest growing family of equity funds/2/ during the period June 2001 through June 2002, surpassing some of the most established and best-known mutual fund groups. In July, iShares celebrated another milestone: the launch of the first-ever fixed income exchange traded funds. These four fixed income iShares funds -- three bond funds based on Lehman U.S. Treasury indexes, and one based on a Goldman Sachs(R) corporate bond index -- were greeted with an enthusiastic reception from the investment community. These new funds attracted $3 billion in assets in their first week of trading. That is an impressive beginning considering that total inflows for all U.S. bond mutual funds combined was $50 billion for the first six months of 2002./3/ With a total of 81 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). Total assets under management for all iShares funds have grown tenfold since they were first launched in May 2000. We believe this is a result of investors and their advisors recognizing that iShares are not merely an investment choice, but an important investment tool. At BGI we consider the iShares family of funds "industrial strength" for four simple reasons. We think you should keep these reasons in mind when you and your advisor meet to discuss your investment objectives, and then evaluate, and perhaps rebalance your portfolio. First, iShares strive to obtain a fundamental goal of institutional investing: taking less of a bite out of a fund's returns. iShares seek to achieve this by minimizing capital gains distributions 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./4/ iShares, on the other hand, are managed in a way that keeps capital gains distributions to a minimum. For example, during the calendar year 2001 none of the domestic iShares funds distributed any capital gains./5/ Additionally, the fees charged by the iShares Funds are typically about half of other actively managed mutual funds./6/ Second, iShares embody a key tactic of institutional investors: UNCOMPLICATED DIVERSIFICATION. The benefits of diversification, as compared to picking individual stocks, are well documented. Although it's possible to diversify a portfolio by hand-selecting a wide variety of securities, to do it effectively is complicated and time-consuming. This is a reason why $1.56 trillion in institutional assets(7) are invested in index funds. - ------------------- /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/Financial Research Corporation (FRC) database, BGI analysis. /4/Jonathan Clements, Fund Distributions are a Taxing Problem; How the Tax Man Dines on Your Funds, The Wall Street Journal, August 1999. /5/Past performance is no guarantee of future results. There can be no assurance that iShares will not generate capital gains distributions in the future. /6/Source: Morningstar Principia, BGI analysis 6/01. /7/Source: Pensions & Investments, 5/27/02. Shareholder Letter 1 Third, iShares embody a key strategy of institutional investors: modular asset allocation. Each iShare fund focuses on a very specific slice of the equity and fixed income markets. With so many different iShares to choose from, investors have tremendous flexibility in structuring their portfolios to meet specific needs. The fourth reason iShares are "industrial strength" is that they are advised by Barclays Global Investors, one of the world's largest institutional asset managers./8/ BGI manages money for over two thousand institutional clients around the world. Also, BGI has a longer index-based investing track record than any other fund manager. In fact, over thirty years ago it was BGI that created the world's first index strategy. Throughout the coming year we will be working closely with the financial advisor community to introduce innovative strategies and structures that we have developed for their clients' portfolios. And we continue to enhance and improve the tools, data and resources on our Web site. If you haven't visited www.iShares.com in a while, we invite you to do so and learn more about iShares. In fact, Forbes Magazine named iShares.com "Best of the Web" among all ETF sites./9/ We think you'll agree everything about iShares really is industrial strength. On behalf of the iShares family of funds 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 President and Chairman of the Board Lee T. Kranefuss of Trustees of iShares Trust Vice President of iShares Trust iShares are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors (BGFA) serves as an advisor to iShares. Barclays Global Investors Services (BGIS) assists in the marketing of iShares. BGFA and BGIS are subsidiaries of Barclays Global Investors, N.A., none of which is affiliated with SEI. For Complete information, including charges and expenses, request a prospectus by calling 1-800-iSHARES (1-800-474-2737). Read it carefully before you invest. There are Risks Involved With Investing, Including Possible Loss of Principal. Diversification may not protect against market risk. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Mutual funds and iShares are obliged to distribute portfolio gains to shareholders by year-end. These gains may be generated due to index rebalancing or to meet diversification requirements. Your own iShares trading, too, will generate tax consequences and transaction expenses. Certain traditional mutual funds can be tax efficient as well. Past performance does not guarantee future results. iShares are not sponsored or endorsed by Goldman, Sachs & Co. or Lehman Brothers, nor are they sponsored, endorsed, sold or promoted by Cohen & Steers Capital Management, Inc., Dow Jones & Company, Inc., Morgan Stanley Capital International, The Nasdaq Stock Market, Inc., Frank Russell Company, or Standard & Poor's. None of these companies make any representation regarding the advisability of investing in iShares. Neither SEI nor BGI, nor any of their affiliates, are affiliated with Goldman, Sachs & Co. or Lehman Brothers. "GS $ InvesTop(TM)" and "Goldman Sachs(R)" are trademarks of Goldman, Sachs & Co. - ------------------ /8/Source: Pensions & Investments, 5/27/02. /9/Forbes Winter 2001. 2 2002 iShares Semi-Annual Report to Shareholders Market Overview U.S. Equity Markets U.S. equities fell heavily in the six months under review. Stocks rallied briefly in August, but this proved to be yet another false dawn. By the end of September, the broader market indices were back languishing at six-year lows. These latest falls mean that the S&P 500 Index has almost halved in value since its peak two years ago, and some sectors, notably telecommunications and technology, have lost considerably more than that. The current bear market is now on par with the 1970s bear market in terms of the scale of decline. However, in terms of duration, this is already the longest bear market in 60 years. With hindsight, many believe equities had become significantly overvalued during the technology bubble. Therefore, some correction was inevitable, but a number of factors have added to the gloom this year. Chief among these were the corporate accounting scandals. Sadly, these were not confined to one errant corporation but spread among many. As a result, investors have not only had to contend with a severe profits recession, but learn how to differentiate real from virtual profits. It is little wonder, given such profound uncertainties, that investors have been applying larger risk premiums to their equity valuations. This year's further collapse in share prices, in turn, has taken a toll on investor confidence and the wider economy. The Federal Reserve Board (the "Fed") has done a remarkable job in keeping the economy moving both before and after the events of September 11. Manufacturing has been in a deep recession, but the broader economy has held up reasonably well so far. This has been due largely to continued resilient consumer spending fueled by low interest rates and a buoyant housing market. However, even with interest rates at 40-year lows, industrial production has fallen since the summer and business investment has been cut. The danger has been that, after showing some improvement earlier this year, the manufacturing sector may relapse, causing the economy to suffer a so-called "double-dip" recession. If these factors were not enough, investors also have had to contend with the prospect of a second Gulf War. Such geopolitical risk adds greatly to market uncertainties, while the higher oil price sparked by war fears could further slow economic recovery. Against this background, forecasts for economic growth have been cut back. With profits statements remaining uniformly downbeat, investors have had little incentive to raise their risk appetite, preferring instead to seek the relative safety of bonds and cash. U.S. Fixed Income Markets For all the reasons equity prices have dropped this year, bond prices have risen. Due to the inverse relationship between bond prices and bond yields, yields have fallen during the period. By the end of the six-month period, yields on the 30-year bond were at the lowest levels recorded since they were first introduced in the 1970s. Yields on 5- and 10-year Treasuries had fallen to their lowest levels since 1958. The threat of war, the diminishing prospect of sustained economic recovery and the sheer distrust of equities in the corporate climate have all added to the relative attractiveness of bonds. The spike in oil prices to 19-month highs may in the past have raised the unwelcome specter of inflation and thus have been harmful to bonds. But in the low inflation environment of the reporting period, producers have had much greater difficulty passing on price increases. Therefore, rising oil prices have been much more likely to bear down on demand as consumers have absorbed higher oil prices by cutting expenditure on other discretionary purchases. There were no changes to the targeted federal funds rate over the period, but the Fed's policy bias seemed to shift toward one of greater ease over the summer as equity prices tumbled and doubts about the strength of the economic recovery accumulated. This perceived shift helped to drag bond yields lower, particularly at the short end of the curve. So far, the prospect of increased bond supply on the back of an escalating federal budget deficit has had only limited impact on investor enthusiasm for U.S. Treasuries. International Equity Markets The decline in U.S. equities over the period was echoed to a greater or lesser extent in markets around the world. Though the accounting scandals were confined largely to the U.S., the negative effect on investor confidence was global. The hesitant nature of the U.S. economic Market Overview 3 recovery also has had ramifications around the globe, while geopolitical risk in the Middle East and rising oil prices have affected all markets. In Europe, economic growth has been particularly sluggish, with the German economy most seriously affected by the downturn in international trade. However, it is not just a squeeze on exports that has dampened growth. Domestic demand has fallen due to lower business investment. Consumers, too, have been reluctant to spend. High unemployment has affected large parts of the eurozone and there have been growing doubts that the operation of a single monetary policy offers sufficient flexibility to tackle the problem. Room for policy maneuver has been further constrained by the Stability and Growth Pact, which was adopted in 1997 when the monetary union was being established and limits the size of budget deficits across the zone. While UK equities have also fallen heavily with concerns over the pensions industry and the solvency of the insurance sector, the economy has fared somewhat more favorably, helped by a more expansive fiscal policy and a strong housing market which, like the U.S., has supported consumer confidence and spending. Japanese equities plumbed new depths over the period with the Nikkei Dow Index recording a 19-year low. Concern has again focused on the stability of the banking system and the mountain of bad debts that continued to undermine the efficient functioning of the economy. Japanese consumer prices have now fallen for three years in a row. Such deflation has raised the real value of debt and reduced the effectiveness of monetary policy. Meanwhile the government has continued to balk at the large-scale injection of public funds deemed necessary to put the banking system back on a sounder footing. /s/ Francis Enderle Francis Enderle Chief Investment Officer, Global Indexing 4 2002 iShares Semi-Annual Report to Shareholders THIS PAGE INTENTIONALLY LEFT BLANK. 5 Managers' Discussion & Analysis iSHARES RUSSELL 1000 INDEX FUNDS Performance as of 9/30/02
Average Annual Total Returns Cumulative Total Returns ---------------------------------------------------- ------------------------- Year Ended 9/30/02 Inception to 9/30/02 Inception to 9/30/02 ------------------------- ------------------------- ------------------------- iShares Index Fund NAV Market Index NAV Market Index NAV Market Index Russell 1000 (19.63)% (19.62)% (19.34)% (20.40)% (20.46)% (20.30)% (41.91)% (42.01)% (41.73)% Russell 1000 Growth (22.73)% (22.72)% (22.31)% (29.68)% (29.73)% (29.53)% (56.47)% (56.53)% (56.22)% Russell 1000 Value (17.07)% (17.05)% (16.80)% (9.81)% (9.88)% (9.69)% (21.65)% (21.79)% (21.38)%
"Total returns for the period since inception" are calculated from the inception date of each Fund (05/15/00, 05/22/00 and 05/22/00, respectively). "Average annual total return" represents the average annual change in value of an investment over the periods indicated. "Cumulative total return" represents the total 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 determined by using the midpoint between the highest bid and the lowest offer on the Exchange on which the iShares of the Fund are listed for trading, as of the time that the Fund's NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (05/19/00, 05/26/00 and 05/26/00, respectively), the net asset value of the Fund is used as a proxy for secondary market trading price to calculate market returns. 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 RUSSELL 1000 INDEX [PIE CHART] Consumer Discretionary 13.53% Consumer Staples 9.80% Energy 5.94% Financials 21.89% Health Care 15.98% Industrials 11.07% Information Technology 12.24% Materials 2.84% Telecommunication Services 3.49% Utilities 3.22% RUSSELL 1000 GROWTH INDEX [PIE CHART] Consumer Discretionary 15.12% Consumer Staples 12.30% Energy 1.22% Financials 10.08% Health Care 27.46% Industrials 13.20% Information Technology 19.61% Materials 0.56% Telecommunication Services 0.38% Utilities 0.07% RUSSELL 1000 VALUE INDEX [PIE CHART] Consumer Discretionary 11.87% Consumer Staples 7.21% Energy 10.86% Financials 34.17% Health Care 4.01% Industrials 8.86% Information Technology 4.57% Materials 5.21% Telecommunication Services 6.74% Utilities 6.50% 6 2002 iShares Semi-Annual Report to Shareholders The iShares Russell 1000 Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Russell 1000 Index. For the six-month period ended September 30, 2002 (the "reporting period"), the Index declined 28.09%. The iShares Russell 1000 Growth Index Fund and iShares Russell 1000 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 Russell 1000 Index, as measured by the Russell 1000 Growth Index and the Russell 1000 Value Index, respectively. During the reporting period, the Russell 1000 Growth Index declined 30.91% and the Russell 1000 Value Index declined 25.69%. For the reporting period, the iShares Russell 1000 Index Fund declined 28.10%; the iShares Russell 1000 Growth Index Fund was down 30.96% and the iShares Russell 1000 Value Index Fund declined 25.73%. Equity markets slumped during the reporting period, facing downward pressure on economic, political and corporate fronts. Weak economic indicators continued to cloud the outlook for recovery: despite a robust first quarter GDP growth rate of 6.1%, second quarter growth was reported at a sluggish 1.3%. The labor market remained soft, housing starts declined, and the U.S. dollar continued weakening. Investor skepticism about corporate leadership continued: earlier investigations of corporate scandal broadened to include even more companies. As Americans marked the one-year anniversary of the tragic events of September 11, 2001, geopolitical tensions continued to weigh heavily on the markets. The possibility of war with Iraq helped drive the price of oil above $30 per barrel, its highest level in more than a year. Responding to the sense of uncertainty on these fronts, investors generally retreated away from growth-oriented stocks more than value-oriented stocks. Although both areas suffered double-digit declines, losses were greater among growth sectors during the reporting period. Reflecting this trend, the two sectors within the Russell 1000 Index that were the most adversely affected were information technology (12.24% of the Index as of September 30, 2002) and telecommunications services (3.49% of the Index as of September 30, 2002), which declined 46.04% and 43.58%, respectively. The utilities sector (3.22% of the Index as of September 30, 2002), which contains a mixture of growth-oriented companies and traditional value-oriented companies, also struggled, losing 32.98%. Consumer discretionary stocks (13.53% of the Index as of September 30, 2002) fell 27.78%. The strongest performer was consumer staples (9.80% of the Index as of September 30, 2002), which declined 14.06%. In terms of individual Index holdings, the only position among the Index's ten largest holdings to post a gain over the reporting period was Procter & Gamble (1.49% of the Index as of September 30, 2002) which returned 0.91%. Citigroup (1.96% of the Index as of September 30, 2002) logged the biggest loss, falling 35.44%. General Electric (the Index's largest holding at 3.14% of the Index as of September 30, 2002) fell 33.34%, and Microsoft (2.51% of the Index as of September 30, 2002) declined 27.47%. Exxon Mobil (2.78% of the Index as of September 30) lost 26.33%. Managers' Discussion & Analysis 7 Managers' Discussion & Analysis iSHARES RUSSELL 2000 INDEX FUNDS Performance as of 9/30/02
Average Annual Total Returns Cumulative Total Returns ---------------------------------------------------- ------------------------- Year Ended 9/30/02 Inception to 9/30/02 Inception to 9/30/02 ------------------------- ------------------------- ------------------------- iShares Index Fund NAV Market Index NAV Market Index NAV Market Index Russell 2000 (9.53)% (9.55)% (9.21)% (9.68)% (9.94)% (9.34)% (21.37)% (21.90)% (20.66)% Russell 2000 Growth (18.46)% (18.28)% (18.00)% (29.69)% (29.95)% (29.45)% (53.74)% (54.13)% (53.41)% Russell 2000 Value (1.85)% (2.27)% (1.45)% 3.63% 3.26% 3.99% 8.12% 7.28% 8.94%
"Total returns for the period since inception" are calculated from the inception date of each Fund (05/22/00, 07/24/00 and 07/24/00, respectively). "Average annual total return" represents the average annual change in value of an investment over the periods indicated. "Cumulative total return" represents the total 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 determined by using the midpoint between the highest bid and the lowest offer on the Exchange on which the iShares of the Fund are listed for trading, as of the time that the Fund's NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (05/26/00, 07/28/00 and 07/28/00, respectively), the net asset value of the Fund is used as a proxy for secondary market trading price to calculate market returns. 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 RUSSELL 2000 INDEX [PIE CHART] Consumer Discretionary 14.76% Consumer Staples 3.57% Energy 4.11% Financials 23.92% Health Care 13.07% Industrials 15.18% Information Technology 14.90% Materials 5.32% Telecommunication Services 1.03% Utilities 4.14% RUSSELL 2000 GROWTH INDEX Consumer Discretionary 15.00% Consumer Staples 3.06% Energy 4.88% Financials 16.69% Health Care 20.12% Industrials 14.45% Information Technology 21.17% Materials 2.32% Telecommunication Services 1.31% Utilities 1.00% RUSSELL 2000 VALUE INDEX Consumer Discretionary 14.54% Consumer Staples 4.04% Energy 3.40% Financials 30.59% Health Care 6.59% Industrials 15.86% Information Technology 9.12% Materials 8.08% Telecommunication Services 0.76% Utilities 7.02% 8 2002 iShares Semi-Annual Report to Shareholders The iShares Russell 2000 Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Russell 2000 Index. For the six-month period ended September 30, 2002 (the "reporting period"), the Index declined 27.97%. The iShares Russell 2000 Growth Index Fund and iShares Russell 2000 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 Russell 2000 Index, as measured by the Russell 2000 Growth Index and the Russell 2000 Value Index, respectively. During the reporting period, the Russell 2000 Growth Index declined 33.84% and the Russell 2000 Value Index declined 22.96%. For the same period, the iShares Russell 2000 Index Fund declined 27.94%; the iShares Russell 2000 Growth Index Fund was down 33.80% and the iShares Russell 2000 Value Index Fund declined 22.96%. Equity markets faced challenges from all fronts during the reporting period. Despite a robust first quarter GDP growth rate of 6.1%, second quarter growth was reported at a mere 1.3%, raising doubts about the strength of economic recovery. Further clouding the economic picture, the labor market remained soft, consumer spending appeared to have peaked, and the U.S. dollar continued weakening. On the corporate front, profit warnings escalated during the period. During the third quarter of 2002, the number of companies issuing earnings warnings rose 28% over the second quarter. The investigations into corporate irregularities continued to expand during the reporting period, rattling investors' confidence in corporate leadership. Compounding the uncertainty, geopolitical tensions continued to mount. As an invasion of Iraq became a clear possibility, the potential disruption in the flow of oil from the Middle East led to a spike in oil prices. By late September oil jumped to a 19-month high of $30.71 per barrel. Although every major industry group of the Russell 2000 Index posted declines for the reporting period, the losses were more severe among growth sectors. Leading the list was information technology stocks (14.90% of the Index as of September 30, 2002), which fell 53.44%. Telecommunications services (1.03% of the Index) also registered heavy losses, declining 51.83%. Health care (13.07% of the Index as of September 30) declined 32.73%. The best performing group was financials (23.93% of the Index), which lost a relatively slight 6.10%. In terms of individual holdings, performance was mixed over the reporting period among the Index's ten largest holdings. Corinthian Colleges, the Index's second largest holding at 0.25% of the Index, gained 49.32%, while Worthington Industries (0.22% of the Index as of September 30, 2002) returned 24.11%. Techne Corporation (0.24% of the Index as of September 30) logged a gain of 18.93%. On the negative side, Overture Services (0.21% of the Index as of September 30, 2002) declined 15.58%, Payless Shoesource (0.21% of the Index as of September 30) fell 11.53%, and AGL Resources (0.22% of the Index) lost 3.73%. Managers' Discussion & Analysis 9 Schedule of Investments (Unaudited) iSHARES RUSSELL 1000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ COMMON STOCKS - 99.83% General Electric Co. 760,850 $ 18,754,953 Exxon Mobil Corp. 519,264 16,564,522 Microsoft Corp./1/ 342,944 15,000,371 Pfizer Inc. 478,078 13,873,824 Johnson & Johnson 230,576 12,469,550 Citigroup Inc. 394,056 11,683,760 Wal-Mart Stores Inc. 208,581 10,270,528 American International Group Inc. 176,073 9,631,193 Procter & Gamble Co. 99,537 8,896,617 Merck & Co. Inc. 173,418 7,926,937 International Business Machines Corp. 131,045 7,651,718 Bank of America Corp. 117,826 7,517,299 Coca-Cola Co. (The) 155,359 7,451,018 Intel Corp. 511,966 7,111,208 Philip Morris Companies Inc. 163,816 6,356,061 Wells Fargo & Company 130,993 6,308,623 Cisco Systems Inc./1/ 560,219 5,871,095 Verizon Communications Inc. 208,556 5,722,777 ChevronTexaco Corp. 81,756 5,661,603 SBC Communications Inc. 255,764 5,140,856 PepsiCo Inc. 135,391 5,002,697 Viacom Inc. "B"/1/ 119,397 4,841,548 Abbott Laboratories 119,502 4,827,881 Home Depot Inc. 179,933 4,696,251 Fannie Mae 76,268 4,540,997 Lilly (Eli) and Co. 73,766 4,082,210 Dell Computer Corp./1/ 173,129 4,070,263 Medtronic Inc. 93,002 3,917,244 Pharmacia Corp. 99,063 3,851,569 AOL Time Warner Inc./1/ 328,062 3,838,325 Amgen Inc./1/ 90,457 3,772,057 Bristol-Myers Squibb Co. 148,391 3,531,706 AT&T Corp. 292,132 3,508,505 Wachovia Corp. 104,845 3,427,383 Anheuser-Busch Companies Inc. 67,134 3,396,980 Bank One Corp. 89,993 3,365,738 3M Co. 29,794 3,276,446 Wyeth 101,560 3,229,608 Freddie Mac 53,124 2,969,632 JP Morgan Chase & Co. 152,497 2,895,918 Morgan Stanley 84,419 2,860,116 American Express Co. 90,325 2,816,333 Du Pont (E.I.) de Nemours & Co. 76,130 2,746,009 U.S. Bancorp 146,466 2,721,338 BellSouth Corp. 143,621 2,636,882 Oracle Corp./1/ 315,508 2,479,893 Lowe's Companies Inc. 59,479 2,462,431 Hewlett-Packard Co. 207,192 2,417,931 Walgreen Co. 78,413 2,411,984 Gillette Co. (The) 80,940 2,395,824 ConocoPhillips 51,798 2,395,139 Schering-Plough Corp. 112,323 2,394,726 Fifth Third Bancorp 39,095 2,393,787 Walt Disney Co. (The) 156,200 2,364,868 Washington Mutual Inc. 74,607 2,347,882 Colgate-Palmolive Co. 41,877 2,259,264 Kimberly-Clark Corp. 39,788 2,253,592 Merrill Lynch & Co. Inc. 65,773 2,167,220 Cardinal Health Inc. 34,562 2,149,756 Boeing Co. (The) 61,264 2,090,940 Target Corp. 69,526 2,052,408 United Technologies Corp. 36,243 2,047,367 Texas Instruments Inc. 132,904 1,962,992 Allstate Corp. (The) 54,406 1,934,133 Dow Chemical Co. (The) 69,582 1,900,284 United Parcel Service Inc. 29,874 1,868,021 Tenet Healthcare Corp./1/ 37,435 1,853,033 Lockheed Martin Corp. 28,623 1,851,049 UnitedHealth Group Inc. 20,885 1,821,590 HCA Inc. 37,738 1,796,706 Motorola Inc. 173,992 1,771,239 Marsh & McLennan Companies Inc. 42,004 1,749,047 McDonald's Corp. 97,443 1,720,843 General Motors Corp. "A" 42,943 1,670,483 Automatic Data Processing Inc. 47,543 1,653,070 First Data Corp. 58,599 1,637,842 FleetBoston Financial Corp. 80,278 1,632,052 QUALCOMM Inc./1/ 58,961 1,628,503 Bank of New York Co. Inc. (The) 55,817 1,604,181 Southern Co. 53,934 1,552,221 10 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 1000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Comcast Corp. "A"(1) 72,473 $ 1,511,787 MBNA Corp. 81,410 1,496,316 Gannett Co. Inc. 20,434 1,474,926 Applied Materials Inc./1/ 125,731 1,452,193 Sysco Corp. 50,889 1,444,739 Liberty Media Corp. "A"/1/ 198,839 1,427,664 Emerson Electric Co. 32,263 1,417,636 Baxter International Inc. 46,113 1,408,752 Clear Channel Communications Inc./1/ 39,424 1,369,984 Ford Motor Company 138,981 1,362,014 Kohls Corp./1/ 22,344 1,358,739 Honeywell International Inc. 62,684 1,357,735 National City Corp. 46,717 1,332,836 BB&T Corp. 36,784 1,288,911 Prudential Financial Inc./1/ 44,857 1,281,116 Alcoa Inc. 64,909 1,252,744 General Mills Inc. 28,119 1,249,046 Duke Energy Corp. 63,589 1,243,165 International Paper Co. 37,053 1,237,200 Goldman Sachs Group Inc. (The) 18,497 1,221,357 AFLAC Inc. 39,685 1,217,933 SunTrust Banks Inc. 19,071 1,172,485 Exelon Corp. 24,649 1,170,827 FedEx Corp. 22,898 1,146,503 Costco Wholesale Corp./1/ 34,855 1,128,256 General Dynamics Corp. 13,857 1,126,990 Union Pacific Corp. 19,321 1,118,106 Sara Lee Corp. 60,125 1,099,686 Harley-Davidson Inc. 23,199 1,077,594 Dominion Resources Inc. 21,214 1,076,186 SLM Corp. 11,307 1,053,134 Waste Management Inc. 44,360 1,034,475 ConAgra Foods Inc. 41,240 1,024,814 Forest Laboratories Inc. "A"/1/ 12,258 1,005,279 Household International Inc. 34,960 989,718 Illinois Tool Works Inc. 16,929 987,469 Travelers Property Casualty Corp. "B"/1/ 72,691 983,509 Caterpillar Inc. 26,420 983,352 State Street Corp. 24,917 962,793 Alltel Corp. 23,815 955,696 Northrop Grumman Corp. 7,462 925,586 Lehman Brothers Holdings Inc. 18,741 919,246 PNC Financial Services Group 21,757 917,493 McGraw-Hill Companies Inc. (The) 14,917 913,219 Heinz (H.J.) Co. 26,844 895,784 Cendant Corp./1/ 83,089 894,038 Raytheon Co. 30,439 891,863 Mellon Financial Corp. 33,836 877,367 Kroger Co./1/ 60,905 858,761 TXU Corp. 20,435 852,344 Anadarko Petroleum Corp. 19,060 848,932 Sears, Roebuck and Co. 21,729 847,431 Avon Products Inc. 18,083 833,626 Deere & Co. 18,231 828,599 Equity Office Properties Trust 32,000 826,240 Safeway Inc./1/ 36,908 823,048 KeyCorp 32,714 816,869 Occidental Petroleum Corp. 28,766 816,379 WellPoint Health Networks Inc./1/ 11,112 814,510 Omnicom Group Inc. 14,375 800,400 Kraft Foods Inc. 21,489 783,489 Hartford Financial Services Group Inc. 19,007 779,287 EMC Corp./1/ 170,470 779,048 Southwest Airlines Co. 59,235 773,609 Boston Scientific Corp./1/ 24,311 767,255 CVS Corp. 30,082 762,579 Guidant Corp./1/ 23,487 758,865 Baker Hughes Inc. 25,923 752,545 Progressive Corp. (The) 14,726 745,577 Weyerhaeuser Co. 16,791 734,942 Air Products & Chemicals Inc. 17,420 731,814 Schwab (Charles) Corp. (The) 83,854 729,530 Bed Bath & Beyond Inc./1/ 22,394 729,373 FPL Group Inc. 13,522 727,484 Masco Corp. 36,891 721,219 Newmont Mining Corp. 26,077 717,378 Entergy Corp. 17,040 708,864 American Electric Power Co. Inc. 24,804 707,162 AT&T Wireless Services Inc./1/ 171,382 706,094 Schedules of Investments 11 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 1000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ TJX Companies Inc. 41,369 $ 703,273 CIGNA Corp. 9,932 702,689 Anthem Inc./1/ 10,807 702,455 Burlington Northern Santa Fe Corp. 29,361 702,315 Albertson's Inc. 29,043 701,679 Progress Energy Inc. 16,815 687,229 Chubb Corp. 12,426 681,318 Comerica Inc. 13,756 663,314 Intuit Inc./1/ 14,564 663,099 Consolidated Edison Inc. 16,309 655,948 Sun Microsystems Inc./1/ 249,156 645,314 SouthTrust Corp. 26,605 645,171 Praxair Inc. 12,504 639,079 FirstEnergy Corp. 21,269 635,730 Yum! Brands Inc./1/ 22,738 630,070 Hancock (John) Financial Services Inc. 22,633 629,197 Newell Rubbermaid Inc. 20,378 629,069 Kellogg Co. 18,911 628,791 Apache Corp. 10,526 625,771 Concord EFS Inc./1/ 39,127 621,337 Tribune Co. 14,856 621,129 Sprint Corp. (FON Group) 67,974 619,923 General Motors Corp. "H"/1/ 67,394 616,655 Principal Financial Group Inc./1/ 23,437 613,581 Starbucks Corp./1/ 29,678 612,257 Maxim Integrated Products Inc./1/ 24,700 611,572 Eastman Kodak Co. 22,405 610,312 Wrigley (William Jr.) Co. 12,319 609,667 Electronic Arts Inc./1/ 9,218 608,019 Paychex Inc. 24,956 606,930 Mattel Inc. 33,492 603,191 Norfolk Southern Corp. 29,780 601,258 Golden West Financial Corp. 9,654 600,286 Burlington Resources Inc. 15,474 593,583 McKesson Corp. 20,950 593,514 Stryker Corp. 10,302 593,395 eBay Inc./1/ 11,234 593,268 Block (H & R) Inc. 14,105 592,551 Unocal Corp. 18,789 589,787 PPG Industries Inc. 12,972 579,848 Regions Financial Corp. 17,657 576,854 AmSouth Bancorp 27,803 576,634 Zimmer Holdings Inc./1/ 14,926 572,263 AmerisourceBergen Corp. 7,955 568,146 Northern Trust Corp. 15,015 566,366 Becton, Dickinson & Co. 19,870 564,308 Pitney Bowes Inc. 18,497 563,974 Allergan Inc. 10,277 559,069 Capital One Financial Corp. 15,932 556,345 Genentech Inc./1/ 16,938 552,687 Archer-Daniels-Midland Co. 43,880 548,939 Analog Devices Inc./1/ 27,836 548,369 Biomet Inc. 20,566 547,673 Fortune Brands Inc. 11,568 547,051 Marathon Oil Corp. 23,797 539,716 Charter One Financial Inc. 17,771 528,162 Devon Energy Corp. 10,943 528,000 Johnson Controls Inc. 6,853 526,447 Clorox Co. 12,961 520,773 Micron Technology Inc./1/ 41,905 518,365 MetLife Inc. 22,638 515,241 Electronic Data Systems Corp. 36,705 513,136 Gap Inc. (The) 47,240 512,554 Linear Technology Corp. 24,413 505,837 DTE Energy Co. 12,417 505,372 Equity Residential 21,078 504,607 May Department Stores Co. (The) 22,102 503,263 St. Paul Companies Inc. 16,996 488,125 Moody's Corp. 9,990 484,515 St. Jude Medical Inc./1/ 13,562 484,163 Public Service Enterprise Group Inc. 15,807 482,114 Danaher Corp. 8,475 481,804 M&T Bank Corp. 6,082 479,322 North Fork Bancorp Inc. 12,556 475,119 International Game Technology Inc./1/ 6,869 474,923 TRW Inc. 8,078 472,967 Lexmark International Group Inc. "A"/1/ 9,977 468,919 New York Times Co. "A" 10,302 468,226 12 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 1000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Limited Brands Inc. 32,565 $ 466,982 Agilent Technologies Inc./1/ 35,692 466,138 Jefferson-Pilot Corp. 11,579 464,318 Synovus Financial Corp. 22,506 464,074 Interpublic Group of Companies Inc. 29,251 463,628 Ameren Corp. 11,080 461,482 Veritas Software Corp./1/ 31,366 461,394 Staples Inc./1/ 35,844 458,445 MBIA Inc. 11,348 453,353 Federated Department Stores Inc./1/ 15,370 452,493 Marshall & Ilsley Corp. 16,199 451,790 Hershey Foods Corp. 7,227 448,435 Gilead Sciences Inc./1/ 13,278 445,211 Loews Corp. 10,263 440,180 Lincoln National Corp. 14,380 439,309 AutoZone Inc./1/ 5,562 438,619 Best Buy Co. Inc./1/ 19,596 437,187 ITT Industries Inc. 6,959 433,754 Halliburton Co. 33,456 431,917 CSX Corp. 16,311 430,284 Avery Dennison Corp. 7,513 428,091 Marriott International Inc. "A" 14,756 427,776 Union Planters Corp. 15,562 427,333 Harrah's Entertainment Inc./1/ 8,821 425,260 SunGard Data Systems Inc./1/ 21,709 422,240 Ecolab Inc. 9,924 414,129 Fiserv Inc./1/ 14,677 412,130 Genuine Parts Co. 13,368 409,596 Bear Stearns Companies Inc. (The) 7,225 407,490 KLA-Tencor Corp./1/ 14,579 407,337 Franklin Resources Inc. 13,055 406,011 Xilinx Inc./1/ 25,550 404,661 Aetna Inc. 11,269 403,543 Cinergy Corp. 12,819 402,901 MedImmune Inc./1/ 19,195 401,559 Apollo Group Inc. "A"/1/ 9,151 397,428 National Commerce Financial Corp. 15,856 397,193 Apple Computer Inc./1/ 27,340 396,430 Dover Corp. 15,563 394,989 Cox Communications Inc. "A"/1/ 15,737 386,973 Campbell Soup Co. 17,304 382,072 Nextel Communications Inc. "A"/1/ 50,562 381,743 Cintas Corp. 9,062 379,879 Countrywide Credit Industries Inc. 8,005 377,436 Cincinnati Financial Corp. 10,565 375,903 Health Management Associates Inc. "A"/1/ 18,590 375,890 UNUMProvident Corp. 18,457 375,600 Coca-Cola Enterprises Inc. 17,672 375,353 AON Corp. 18,303 375,028 Rohm & Haas Co. "A" 12,002 372,062 Symantec Corp./1/ 11,019 371,010 PPL Corp. 11,357 369,557 Delphi Automotive Systems Corp. 43,121 368,685 El Paso Corp. 44,486 367,899 Amerada Hess Corp. 5,416 367,638 UST Inc. 13,011 367,040 Laboratory Corp. of America Holdings/1/ 10,753 363,236 KeySpan Corp. 10,813 362,236 Knight Ridder Inc. 6,404 361,250 IDEC Pharmaceuticals Corp./1/ 8,638 358,650 Simon Property Group Inc. 9,907 353,977 Quest Diagnostics Inc./1/ 5,693 350,290 Adobe Systems Inc. 18,295 349,434 Parker Hannifin Corp. 9,094 347,482 Huntington Bancshares Inc. 19,068 346,847 Computer Sciences Corp./1/ 12,455 346,124 Ambac Financial Group Inc. 6,401 344,950 King Pharmaceuticals Inc./1/ 18,809 341,760 Starwood Hotels & Resorts Worldwide Inc. 15,296 341,101 Eaton Corp. 5,350 341,009 First Tennessee National Corp. 9,731 337,374 PG&E Corp./1/ 29,929 337,001 Computer Associates International Inc. 35,050 336,480 Kerr-McGee Corp. 7,736 336,052 Biogen Inc./1/ 11,396 333,561 IMS Health Inc. 22,218 332,603 Popular Inc. 10,519 332,400 Schedules of Investments 13 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 1000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Penney (J.C.) Co. Inc. 20,608 $ 328,079 Family Dollar Stores Inc. 12,157 326,780 Darden Restaurants Inc. 13,355 323,725 Torchmark Corp. 9,389 321,667 Archstone-Smith Trust 13,390 319,753 Affiliated Computer Services Inc. "A"/1/ 7,480 318,274 Plum Creek Timber Co. Inc. 14,053 317,738 Mylan Laboratories Inc. 9,704 317,709 EchoStar Communications Corp./1/ 18,336 317,213 Pepsi Bottling Group Inc. 13,540 316,836 Microchip Technology Inc./1/ 15,421 315,359 BJ Services Co./1/ 12,110 314,860 EOG Resources Inc. 8,743 314,398 Constellation Energy Group Inc. 12,590 312,106 SAFECO Corp. 9,816 311,952 Textron Inc. 9,122 311,060 Genzyme Corp. - General Division/1/ 15,076 310,716 Zions Bancorp 7,025 305,798 Rockwell Collins 13,930 305,624 Monsanto Co. 19,896 304,210 Prologis Trust 12,168 303,105 SPX Corp./1/ 2,994 302,095 Applera Corp. - Applied Biosystems Group 16,390 299,937 Leggett & Platt Inc. 15,065 298,136 American Standard Companies Inc./1/ 4,672 297,233 MeadWestvaco Corp. 15,424 296,295 Office Depot Inc./1/ 23,732 292,853 Hilton Hotels Corp. 25,560 290,873 Caremark Rx Inc./1/ 17,063 290,071 Compass Bancshares Inc. 9,801 289,031 Wendy's International Inc. 8,719 288,686 Dollar General Corp. 21,395 287,121 MGIC Investment Corp. 6,972 284,667 Xcel Energy Inc. 30,544 284,365 Yahoo! Inc./1/ 29,659 283,837 R.J. Reynolds Tobacco Holdings Inc. 7,027 283,329 ENSCO International Inc. 11,217 280,874 Jones Apparel Group Inc./1/ 9,140 280,598 USA Networks Inc./1/ 14,476 280,545 PACCAR Inc. 8,203 277,179 NiSource Inc. 16,021 276,042 Sigma-Aldrich Corp. 5,598 275,813 GreenPoint Financial Corp. 6,605 275,693 Xerox Corp./1/ 55,433 274,393 Sempra Energy 13,945 274,019 L-3 Communications Holdings Inc./1/ 5,195 273,777 Dean Foods Co./1/ 6,809 270,862 Banknorth Group Inc. 11,344 269,420 Ocean Energy Inc. 13,449 268,308 RadioShack Corp./1/ 13,363 268,062 Univision Communications Inc./1/ 11,717 267,148 DST Systems Inc./1/ 9,033 266,203 Oxford Health Plans Inc./1/ 6,833 266,077 Express Scripts Inc. "A"/1/ 4,831 263,386 Vulcan Materials Co. 7,280 263,245 Old Republic International Corp. 9,184 260,642 Sovereign Bancorp Inc. 20,057 258,735 Black & Decker Corp. 6,168 258,624 PeopleSoft Inc./1/ 20,879 258,273 Duke-Weeks Realty Corp. 10,409 256,270 Lincare Holdings Inc./1/ 8,178 253,845 Grainger (W.W.) Inc. 5,946 253,002 ServiceMaster Co. 23,262 252,393 Altera Corp./1/ 29,082 252,141 Edison International/1/ 25,120 251,200 TCF Financial Corp. 5,863 248,181 Hibernia Corp. "A" 12,381 247,496 Chiron Corp./1/ 7,052 246,397 McCormick & Co. Inc. 10,787 245,944 General Growth Properties Inc. 4,764 245,346 Kinder Morgan Inc. 6,904 244,747 Waters Corp./1/ 10,085 244,561 CenturyTel Inc. 10,881 244,061 Equifax Inc. 11,157 242,553 Nike Inc. "B" 5,604 241,981 Public Storage Inc. 7,517 239,792 BMC Software Inc./1/ 18,337 239,665 Circuit City Stores Inc. 15,749 238,597 Qwest Communications International Inc./1/ 104,582 238,447 14 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 1000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Engelhard Corp. 9,993 $ 238,133 Apartment Investment & Management Co. "A" 6,114 237,529 Molex Inc. 10,097 237,481 Sherwin-Williams Co. 9,992 236,611 Pepco Holdings Inc. 11,768 234,772 Amazon.com Inc./1/ 14,722 234,521 ChoicePoint Inc./1/ 6,580 234,511 VF Corp. 6,500 233,870 Georgia-Pacific Corp. 17,716 231,902 Estee Lauder Companies Inc. "A" 8,002 229,977 Michaels Stores Inc./1/ 5,019 229,368 Lennar Corp. 4,109 229,200 Nucor Corp. 6,044 229,068 Smith International Inc./1/ 7,776 227,915 Novellus Systems Inc./1/ 10,935 227,557 New York Community Bancorp Inc. 8,061 227,078 Murphy Oil Corp. 2,765 226,924 Eastman Chemical Co. 5,925 226,157 Deluxe Corp. 5,001 225,345 Whirlpool Corp. 4,904 224,897 Varian Medical Systems Inc./1/ 5,231 224,881 Republic Services Inc. "A"/1/ 11,926 224,209 Radian Group Inc. 6,830 223,068 Bard (C.R.) Inc. 4,024 219,831 Vornado Realty Trust 5,563 219,460 Kimco Realty Corp. 7,047 219,162 Synopsys Inc./1/ 5,729 218,561 DENTSPLY International Inc. 5,432 218,203 Ross Stores Inc. 6,120 218,117 Fox Entertainment Group Inc. "A"/1/ 9,882 217,700 Ball Corp. 4,304 216,879 Energy East Corp. 10,908 216,087 Pioneer Natural Resources Co./1/ 8,892 215,631 Sabre Holdings Corp./1/ 11,111 214,998 Energizer Holdings Inc./1/ 7,052 214,381 Thermo Electron Corp./1/ 13,257 213,835 Hillenbrand Industries Inc. 3,934 213,616 Fidelity National Financial Inc. 7,391 212,343 Wisconsin Energy Corp. 8,735 212,261 Triad Hospitals Inc./1/ 5,567 211,268 Legg Mason Inc. 4,958 211,012 SCANA Corp. 8,074 210,085 Centex Corp. 4,717 209,199 First Health Group Corp./1/ 7,648 207,414 Stilwell Financial Inc. 17,179 207,351 First Virginia Banks Inc. 5,555 207,201 Reliant Energy Inc. 20,596 206,166 Valero Energy Corp. 7,775 205,804 Liz Claiborne Inc. 8,240 205,588 Mercantile Bankshares Corp. 5,373 205,087 Cadence Design Systems Inc./1/ 20,082 204,234 Westwood One Inc./1/ 5,688 203,346 Lear Corp./1/ 4,879 203,210 Millennium Pharmaceuticals Inc./1/ 21,747 202,682 T. Rowe Price Group Inc. 8,106 202,326 Tyson Foods Inc. "A" 17,373 202,048 Rockwell International Corp. 12,362 201,130 Pactiv Corp./1/ 12,215 200,937 Convergys Corp./1/ 13,364 200,861 Telephone & Data Systems Inc. 3,979 200,741 Expeditors International Washington Inc. 7,174 200,442 Lucent Technologies Inc./1/ 263,495 200,256 Edwards (A.G.) Inc. 6,201 198,308 Patterson Dental Co./1/ 3,847 196,889 Mohawk Industries Inc./1/ 3,939 195,571 AvalonBay Communities Inc. 4,669 195,164 Valley National Bancorp 7,325 194,845 Brinker International Inc./1/ 7,493 194,069 MGM Grand Inc./1/ 5,149 192,058 Dun & Bradstreet Corp./1/ 5,714 192,048 Universal Health Services Inc. "B"/1/ 3,752 191,915 Watson Pharmaceuticals Inc./1/ 7,810 191,423 Bemis Co. 3,860 190,684 Donnelley (R.R.) & Sons Co. 8,087 190,125 Boston Properties Inc. 5,105 189,906 PMI Group Inc. (The) 6,963 189,463 Robert Half International Inc./1/ 11,906 188,948 Dollar Tree Stores Inc./1/ 8,521 187,803 CDW Computer Centers Inc./1/ 4,418 187,146 Associated Bancorp 5,858 185,874 Schedules of Investments 15 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 1000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Health Care Property Investors Inc. 4,363 $ 185,864 Washington Post Company (The) "B" 286 185,614 TECO Energy Inc. 11,650 185,002 XTO Energy Inc. 8,976 184,995 Tiffany & Co. 8,604 184,384 Golden State Bancorp Inc. 5,694 184,030 Commerce Bancorp Inc. 4,425 183,682 Diebold Inc. 5,550 182,706 AMB Property Corp. 6,313 182,446 Brown-Forman Corp. "B" 2,725 182,439 JDS Uniphase Corp./1/ 93,166 181,487 Liberty Property Trust 5,753 178,343 International Flavors & Fragrances Inc. 5,589 178,010 Rouse Co. 5,550 177,323 AutoNation Inc./1/ 15,370 177,062 LSI Logic Corp./1/ 27,838 176,771 PETsMART Inc./1/ 9,917 176,622 QLogic Corp./1/ 6,767 176,213 Commerce Bancshares Inc. 4,499 175,776 Jabil Circuit Inc./1/ 11,890 175,734 American Water Works Inc. 3,928 175,424 Health Net Inc./1/ 8,175 175,354 Manor Care Inc./1/ 7,784 174,984 Coach Inc./1/ 6,802 174,131 Unisys Corp./1/ 24,838 173,866 Stanley Works (The) 5,296 173,020 Allied Capital Corp. 7,854 171,924 Manpower Inc. 5,857 171,844 Northeast Utilities 10,058 169,980 Beckman Coulter Inc. 4,389 169,854 Whole Foods Market Inc./1/ 3,961 169,689 Siebel Systems Inc./1/ 29,428 169,211 Federated Investors Inc. "B" 6,228 168,094 Pinnacle West Capital Corp. 6,055 168,087 Equitable Resources Inc. 4,865 168,086 Smurfit-Stone Container Corp./1/ 13,365 167,864 Network Appliance Inc./1/ 22,887 167,762 Park Place Entertainment Corp./1/ 21,070 167,507 Alliant Techsystems Inc./1/ 2,409 166,823 Lamar Advertising Co./1/ 5,480 166,318 Host Marriott Corp./1/ 17,875 165,880 UnionBanCal Corp. 3,934 165,267 National Semiconductor Corp./1/ 13,831 165,142 Gallagher (Arthur J.) & Co. 6,674 164,514 Williams-Sonoma Inc./1/ 6,942 164,039 NSTAR 4,130 163,342 SUPERVALU Inc. 10,102 163,147 Career Education Corp./1/ 3,393 162,891 Pulte Homes Inc. 3,817 162,719 D.R. Horton Inc. 8,730 162,553 Humana Inc./1/ 13,100 162,440 DPL Inc. 9,769 160,700 Phelps Dodge Corp./1/ 6,265 160,572 Autoliv Inc. 7,584 159,871 Hospitality Properties Trust 4,821 159,672 Broadcom Corp. "A"/1/ 14,949 159,655 Protective Life Corp. 5,186 159,573 Harris Corp. 4,758 159,345 Sonoco Products Co. 7,433 158,397 Astoria Financial Corp. 6,487 158,283 KB HOME 3,228 157,656 Ceridian Corp./1/ 11,058 157,576 Gentex Corp./1/ 5,793 157,512 Scripps (E.W.) Co. 2,256 156,341 Henry Schein Inc./1/ 2,949 155,560 Sunoco Inc. 5,142 155,083 Toys R Us Inc./1/ 15,041 153,117 Scientific-Atlanta Inc. 12,170 152,247 Dial Corp. (The) 7,088 152,108 Fluor Corp. 6,195 151,406 Fulton Financial Corp. 8,013 150,644 Cooper Cameron Corp./1/ 3,599 150,294 Dana Corp. 11,451 149,779 Noble Energy Inc. 4,405 149,638 Citizens Communications Co./1/ 21,887 148,394 Pogo Producing Co. 4,331 147,514 Cephalon Inc./1/ 3,610 147,360 Bank of Hawaii Corp. 5,278 147,256 Apogent Technologies Inc./1/ 7,824 145,996 Brunswick Corp. 6,868 144,503 16 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 1000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------------- Bowater Inc. 4,074 $ 143,812 Valspar Corp. (The) 3,855 143,792 Belo (A.H.) Corp. 6,570 143,752 IVAX Corp./1/ 11,709 143,669 Ashland Inc. 5,339 143,032 BISYS Group Inc. (The)/1/ 8,548 142,837 Wilmington Trust Corp. 4,931 142,605 City National Corp. 3,042 142,274 Big Lots Inc./1/ 8,948 141,647 Advanced Micro Devices Inc./1/ 26,388 140,912 Invitrogen Corp./1/ 4,124 140,505 Fastenal Co. 4,436 140,089 CH Robinson Worldwide Inc. 5,194 139,771 BEA Systems Inc./1/ 26,973 139,720 Maytag Corp. 6,024 139,636 Patterson-UTI Energy Inc./1/ 5,459 139,259 Pall Corp. 8,814 139,173 Pentair Inc. 3,743 139,127 Goodrich (B.F.) Co. 7,346 138,692 Dow Jones & Co. Inc. 3,589 137,853 Puget Energy Inc. 6,743 137,625 Rent-A-Center Inc./1/ 2,649 137,616 Valassis Communications Inc./1/ 3,919 137,439 FirstMerit Corp. 6,378 136,617 Alberto-Culver Co. "B" 2,780 136,303 SEI Investment Co. 5,706 136,259 Symbol Technologies Inc. 17,755 136,181 Rowan Companies Inc. 7,283 135,755 Temple-Inland Inc. 3,510 135,591 Teradyne Inc./1/ 14,111 135,466 Questar Corp. 5,917 135,144 Omnicare Inc. 6,398 135,126 New Plan Excel Realty Trust 7,321 134,999 Cullen/Frost Bankers Inc. 3,953 134,995 Alliant Energy Corp. 6,995 134,654 Smithfield Foods Inc./1/ 8,573 134,596 Viad Corp. 6,584 134,511 Investors Financial Services Corp. 4,958 134,213 Pier 1 Imports Inc. 6,973 132,975 Helmerich & Payne Inc. 3,876 132,675 Brocade Communications Systems Inc./1/ 17,616 132,648 NVR Inc./1/ 442 132,525 Barr Laboratories Inc./1/ 2,118 131,930 Pennzoil-Quaker State Co. 5,988 131,556 Nordstrom Inc. 7,330 131,500 Charles River Laboratories International Inc./1/ 3,341 131,134 Solectron Corp./1/ 62,132 131,099 Meredith Corp. 3,022 130,097 Bausch & Lomb Inc. 3,912 129,761 Tellabs Inc./1/ 31,791 129,389 Steris Corp./1/ 5,190 129,283 Abercrombie & Fitch Co. "A"/1/ 6,563 129,094 Outback Steakhouse Inc./1/ 4,695 129,019 AdvancePCS/1/ 5,696 128,331 Mid Atlantic Medical Services Inc./1/ 3,538 128,076 United Dominion Realty Trust Inc. 8,025 127,678 ALLETE Inc. 5,894 127,310 AGCO Corp./1/ 5,486 127,275 Allegheny Energy Inc. 9,707 127,162 Constellation Brands Inc./1/ 5,504 127,142 NCR Corp./1/ 6,410 126,918 Hormel Foods Corp. 5,783 126,532 Healthsouth Corp./1/ 30,444 126,343 Webster Financial Corp. 3,752 125,992 Fair Isaac and Co. Inc. 3,843 125,666 Eaton Vance Corp. 4,544 125,596 MDU Resources Group Inc. 5,493 125,405 Weingarten Realty Investors 3,400 124,440 Teleflex Inc. 2,724 124,160 Renal Care Group Inc./1/ 3,774 124,127 Fisher Scientific International Inc./1/ 4,071 123,555 National-Oilwell Inc./1/ 6,324 122,559 American Power Conversion Corp./1/ 12,813 122,492 Agere Systems Inc. "B"/1/ 123,216 121,984 Hasbro Inc. 10,931 121,662 Markel Corp./1/ 610 121,500 Martin Marietta Materials Inc. 3,730 121,486 Readers Digest Association Inc. (The) "A" 7,759 121,428 Schedules of Investments 17 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 1000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Entercom Communications Corp./1/ 2,551 $ 120,841 Intersil Corp. "A"/1/ 9,314 120,709 RPM Inc. 8,559 120,340 Coors (Adolf) Company "B" 2,120 119,356 BancorpSouth Inc. 6,022 118,633 Catellus Development Corp./1/ 6,401 118,098 Corning Inc./1/ 73,719 117,950 Millipore Corp. 3,708 117,877 Network Associates Inc./1/ 11,062 117,589 Old National Bancorp 4,711 117,115 Hawaiian Electric Industries Inc. 2,701 116,413 HON Industries Inc. 4,561 116,077 Iron Mountain Inc./1/ 4,641 115,979 Vectren Corp. 5,242 115,324 Juniper Networks Inc./1/ 23,927 114,850 StanCorp Financial Group Inc. 2,167 114,634 Reynolds & Reynolds Co. (The) "A" 5,070 113,771 Cheesecake Factory (The)/1/ 3,813 113,742 Annaly Mortgage Management Inc. 6,120 112,914 Human Genome Sciences Inc./1/ 9,358 112,857 Pride International Inc./1/ 8,649 112,437 Lubrizol Corp. 3,974 112,345 Edwards Lifesciences Corp./1/ 4,386 112,238 WebMD Corp./1/ 22,196 112,090 Neuberger Berman Inc. 4,155 111,977 Performance Food Group Co./1/ 3,290 111,728 Colonial BancGroup Inc. (The) 8,988 111,451 Hubbell Inc. "B" 3,831 111,367 Sanmina-SCI Corp./1/ 40,204 111,365 HCC Insurance Holdings Inc. 4,637 111,334 Investment Technology Group Inc./1/ 3,800 111,188 National Fuel Gas Co. 5,589 111,053 Autodesk Inc. 8,758 110,964 Lyondell Chemical Co. 9,293 110,958 Sealed Air Corp./1/ 6,556 110,731 Unitrin Inc. 3,591 110,244 Washington Federal Inc. 4,918 109,745 Foot Locker Inc./1/ 10,972 109,610 Jacobs Engineering Group Inc./1/ 3,549 109,593 Polaris Industries Inc. 1,765 109,430 Lee Enterprises Inc. 3,330 109,424 Transatlantic Holdings Inc. 1,639 108,912 Newfield Exploration Co./1/ 3,240 108,832 CNF Transportation Inc. 3,459 108,578 DaVita Inc./1/ 4,598 108,513 3Com Corp./1/ 27,518 108,421 Sky Financial Group Inc. 5,425 108,012 Tektronix Inc./1/ 6,542 107,485 BRE Properties Inc. "A" 3,477 106,918 First American Corp. 5,226 106,767 Mack-Cali Realty Corp. 3,302 106,093 Vishay Intertechnology Inc./1/ 12,046 106,005 Mandalay Resort Group/1/ 3,152 105,750 Herman Miller Inc. 5,938 105,459 Arden Realty Inc. 4,457 105,408 BJ's Wholesale Club Inc./1/ 5,542 105,353 Brown & Brown Inc. 3,510 105,300 Sprint Corp. (PCS Group)/1/ 53,591 105,038 Ryder System Inc. 4,213 105,030 Dillards Inc. "A" 5,203 104,997 Tidewater Inc. 3,890 104,991 GTECH Holdings Corp./1/ 4,222 104,790 Tech Data Corp./1/ 3,920 103,488 Snap-On Inc. 4,487 103,111 Andrx Group/1/ 4,650 102,997 Vertex Pharmaceuticals Inc./1/ 5,563 102,860 Doral Financial Corp. 4,252 102,643 Krispy Kreme Doughnuts Inc./1/ 3,277 102,439 OGE Energy Corp. 6,060 102,232 Accredo Health Inc./1/ 2,140 102,035 Comverse Technology Inc./1/ 14,577 101,893 Phoenix Companies Inc. 7,461 101,619 Cabot Corp. 4,829 101,409 Cytyc Corp./1/ 9,399 100,757 Scholastic Corp./1/ 2,252 100,619 Donaldson Co. Inc. 2,927 100,484 Providian Financial Corp./1/ 20,500 100,450 Community Health Systems Inc./1/ 3,761 100,155 Medicis Pharmaceutical Corp. "A"/1/ 2,450 100,132 BorgWarner Inc. 2,015 100,025 Celgene Corp./1/ 5,935 99,945 Borders Group Inc./1/ 6,314 99,761 18 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 1000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Roslyn Bancorp Inc. 5,707 $ 99,359 Crescent Real Estate Equities Co. 6,303 98,957 Arrow Electronics Inc./1/ 7,814 98,691 Saks Inc./1/ 9,372 98,687 Mercury Interactive Corp./1/ 5,745 98,584 CarrAmerica Realty Corp. 3,909 98,390 Varco International Inc./1/ 5,803 98,187 Goodyear Tire & Rubber Co. 11,009 97,870 E*TRADE Group Inc./1/ 21,984 97,829 iStar Financial Inc. 3,503 97,804 Waddell & Reed Financial Inc. "A" 5,523 97,536 Westamerica Bancorp 2,420 97,478 Reebok International Ltd./1/ 3,879 97,169 Activision Inc./1/ 4,060 97,156 Independence Community Bank Corp. 3,870 97,098 Harman International Industries Inc. 1,873 96,928 Certegy Inc./1/ 4,820 96,882 CenterPoint Properties Corp. 1,745 96,847 Visteon Corp. 10,183 96,433 Level 3 Communications Inc./1/ 24,784 96,410 Berkley (W.R.) Corp. 2,820 95,880 Cablevision Systems Corp./1/ 10,563 95,701 IMC Global Inc. 7,900 95,195 First Midwest Bancorp Inc. 3,543 95,165 NICOR Inc. 3,374 95,147 Hudson City Bancorp Inc. 5,859 95,092 Whitney Holding Corp. 2,978 95,028 CIENA Corp./1/ 31,987 95,001 Avnet Inc. 8,781 94,747 ArvinMeritor Inc. 5,024 93,949 Leucadia National Corp. 2,761 93,874 Dreyer's Grand Ice Cream Inc. 1,342 93,752 PepsiAmericas Inc. 6,589 93,564 Zebra Technologies Corp. "A"/1/ 1,766 93,051 LifePoint Hospitals Inc./1/ 2,980 92,940 CBRL Group Inc. 4,068 92,832 Owens-Illinois Inc./1/ 8,188 92,688 Great Plains Energy Inc. 4,820 92,303 First Industrial Realty Trust Inc. 2,965 91,885 OM Group Inc. 2,142 91,678 Navistar International Corp. 4,227 91,641 Highwoods Properties Inc. 3,910 91,494 FNB Corp. 3,249 91,037 Coventry Health Care Inc./1/ 2,794 90,805 Radio One Inc. "D"/1/ 5,504 90,761 Pittston Brink's Group 4,030 90,272 Applebee's International Inc. 4,104 89,960 Lancaster Colony Corp. 2,135 89,926 Dole Food Co. 3,095 89,848 United States Steel Corp. 7,729 89,734 Church & Dwight Co. Inc. 2,695 89,339 Reckson Associates Realty Corp. 3,923 89,327 Peoples Energy Corp. 2,649 89,245 Ruby Tuesday Inc. 4,747 89,149 Harte-Hanks Inc. 4,784 89,030 Hudson United Bancorp 3,347 89,030 Developers Diversified Realty Corp. 4,044 89,008 Precision Castparts Corp. 4,099 88,866 Camden Property Trust 2,677 88,743 Delta Air Lines Inc. 9,522 88,459 Rayonier Inc. 2,103 88,137 La-Z-Boy Inc. 3,797 88,090 Park National Corp. 938 87,891 Lam Research Corp./1/ 9,865 87,799 McClatchy Co. (The) "A" 1,437 87,585 Boise Cascade Corp. 3,838 87,506 Graco Inc. 3,520 87,296 VeriSign Inc./1/ 17,230 87,012 International Speedway Corp. "A" 2,187 86,890 Chico's FAS Inc./1/ 5,450 86,818 Storage Technology Corp./1/ 8,217 86,361 Citrix Systems Inc./1/ 14,286 86,145 SICOR Inc./1/ 5,660 86,089 IndyMac Bancorp Inc./1/ 4,459 85,925 Furniture Brands International Inc./1/ 3,741 85,856 Acxiom Corp./1/ 6,054 85,846 MONY Group Inc. (The) 3,474 85,704 Philadelphia Suburban Corp. 4,195 85,159 Hispanic Broadcasting Corp./1/ 4,563 85,100 Integrated Device Technology Inc./1/ 8,139 84,971 Schedules of Investments 19 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 1000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------------ O'Reilly Automotive Inc./1/ 2,967 $ 84,916 Advanced Fibre Communications Inc./1/ 6,367 84,490 Williams Companies Inc. 37,199 84,070 IKON Office Solutions Inc. 10,660 84,001 Sybase Inc./1/ 7,218 83,873 AmerUs Group Co. 2,954 83,775 York International Corp. 2,965 83,613 Mercury General Corp. 1,948 83,374 Diamond Offshore Drilling Inc. 4,169 83,172 Quintiles Transnational Corp./1/ 8,707 82,804 NVIDIA Corp./1/ 9,651 82,613 Alleghany Corp./1/ 434 82,243 DeVry Inc./1/ 4,414 82,189 Education Management Corp./1/ 1,835 81,235 American Greetings Corp. "A" 5,045 81,224 AES Corp. (The)/1/ 32,306 81,088 Harsco Corp. 2,976 80,917 Fairchild Semiconductor International Corp. "A"/1/ 8,526 80,741 ICOS Corp./1/ 3,842 80,567 Citizens Banking Corp. 3,331 80,510 Weight Watchers International Inc./1/ 1,856 80,476 Ethan Allen Interiors Inc. 2,466 79,800 CMS Energy Corp. 9,853 79,415 Compuware Corp./1/ 26,037 79,413 Ingram Micro Inc. "A"/1/ 5,952 79,162 Crane Co. 3,963 78,309 Clayton Homes Inc. 7,119 78,167 Catalina Marketing Corp./1/ 2,772 77,838 International Rectifier Corp./1/ 4,949 77,303 Raymond James Financial Inc. 2,840 76,879 Freeport-McMoRan Copper & Gold Inc./1/ 5,704 76,776 Allied Waste Industries Inc./1/ 10,405 76,477 Provident Financial Group Inc. 3,039 76,249 Trustmark Corp. 3,341 76,175 Cooper Tire & Rubber Co. 4,711 76,036 Packaging Corporation of America/1/ 4,333 75,871 Affymetrix Inc./1/ 3,606 75,005 Trizec Properties Inc. 6,586 74,751 Wiley (John) & Sons Inc. "A" 3,388 74,570 Cerner Corp./1/ 2,113 74,399 Barnes & Noble Inc./1/ 3,469 73,404 Diagnostic Products Corp. 1,587 73,002 IDACORP Inc. 2,985 72,625 Neiman-Marcus Group Inc. "A"/1/ 2,756 72,345 Zale Corp./1/ 2,398 72,324 AptarGroup Inc. 2,691 72,307 Ryland Group Inc. 1,941 72,147 Affiliated Managers Group Inc./1/ 1,605 71,599 Erie Indemnity Co. "A" 1,715 71,447 ADC Telecommunications Inc./1/ 62,127 71,445 Emulex Corp./1/ 6,332 71,298 Lafarge North America Inc. 2,459 71,237 FMC Technologies Inc./1/ 4,214 70,627 Toll Brothers Inc./1/ 3,245 70,546 Mettler Toledo International Inc./1/ 2,706 70,356 UTStarcom Inc./1/ 4,599 70,227 Cox Radio Inc. "A"/1/ 2,663 69,664 Swift Transportation Co. Inc./1/ 4,454 69,482 Mirant Corp./1/ 31,315 69,206 Global Payments Inc. 2,684 68,710 KPMG Consulting Inc./1/ 10,613 68,560 Calpine Corp./1/ 27,554 68,058 Edwards (J.D.) & Co./1/ 7,354 68,024 LaBranche & Co. Inc./1/ 3,356 67,959 Winn-Dixie Stores Inc. 5,114 67,096 CEC Entertainment Inc./1/ 1,952 66,583 Alliance Data Systems Corp./1/ 4,381 66,372 Extended Stay America Inc./1/ 5,216 66,243 Pharmaceutical Product Development Inc./1/ 3,416 66,065 Pixar Inc./1/ 1,352 65,031 GATX Corp. 3,279 64,924 Henry (Jack) & Associates Inc. 5,200 64,636 Cummins Inc. 2,723 64,317 Applied Micro Circuits Corp./1/ 22,253 63,644 Rite Aid Corp./1/ 30,258 63,542 RF Micro Devices Inc./1/ 10,461 62,766 99 Cents Only Stores/1/ 3,013 62,369 Cousins Properties Inc. 2,662 61,226 20 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 1000 INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------------------- Blockbuster Inc. 2,459 $ 60,983 St. Joe Company (The) 2,187 60,361 Timken Co. (The) 3,602 60,334 Cypress Semiconductor Corp./1/ 9,112 59,775 Grant Prideco Inc./1/ 6,997 59,754 Greater Bay Bancorp 3,264 59,372 IDT Corp./1/ 3,627 59,120 Rational Software Corp./1/ 13,633 58,895 Hercules Inc./1/ 6,368 58,649 Scotts Co. (The) "A"/1/ 1,399 58,324 ICN Pharmaceuticals Inc. 6,335 57,395 TMP Worldwide Inc./1/ 6,329 56,961 Silicon Valley Bancshares/1/ 3,349 56,699 KEMET Corp./1/ 6,623 56,627 American National Insurance Co. 819 56,519 Tootsie Roll Industries Inc. 1,897 56,379 Forest Oil Corp./1/ 2,200 56,100 Callaway Golf Co. 5,374 55,890 Advance Auto Parts Inc./1/ 1,049 55,324 American Financial Group Inc. 2,382 54,834 Talbots Inc. (The) 1,957 54,796 Integrated Circuit Systems Inc./1/ 3,487 54,746 Downey Financial Corp. 1,593 54,560 AK Steel Holding Corp./1/ 7,432 54,328 BlackRock Inc./1/ 1,307 54,136 CheckFree Corp./1/ 4,736 53,896 Regency Centers Corp. 1,712 53,072 Forest City Enterprises Inc. "A" 1,631 53,007 Copart Inc./1/ 4,866 52,796 Polycom Inc./1/ 7,675 52,113 AmeriCredit Corp./1/ 6,349 51,236 Titan Corp. (The)/1/ 5,312 50,995 AMR Corp./1/ 12,090 50,536 SkyWest Inc. 3,847 50,396 Albemarle Corp. 1,986 50,226 PMC-Sierra Inc./1/ 12,923 50,141 Polo Ralph Lauren Corp./1/ 2,412 50,121 CNA Financial Corp./1/ 1,998 49,950 Allmerica Financial Corp. 4,125 49,500 Aquila Inc. 12,058 49,438 National Instruments Corp./1/ 2,214 48,464 PerkinElmer Inc. 8,879 48,391 Emmis Communications Corp./1/ 2,522 47,918 Semtech Corp./1/ 4,885 47,385 Cymer Inc./1/ 2,523 47,029 American Axle & Manufacturing Holdings Inc./1/ 1,875 46,837 American Eagle Outfitters Inc./1/ 3,857 46,515 Timberland Co. "A"/1/ 1,464 46,380 Andrew Corp./1/ 7,070 46,308 Perot Systems Corp. "A"/1/ 4,953 46,063 ARAMARK Corp. "B"/1/ 2,165 45,465 Amphenol Corp. "A"/1/ 1,454 45,074 Nationwide Financial Services Inc. 1,676 44,749 Shaw Group Inc. (The)/1/ 3,070 43,594 People's Bank 1,926 43,200 Media General Inc. "A" 845 42,968 Circuit City Stores Inc. - CarMax Group/1/ 2,673 42,902 Gateway Inc./1/ 14,041 41,702 Gemstar-TV Guide International Inc./1/ 16,306 41,091 Peabody Energy Corp. 1,584 40,392 Avaya Inc./1/ 28,070 40,140 Entravision Communications Corp./1/ 3,028 40,121 Allegheny Technologies Inc. 5,795 40,101 CSG Systems International Inc./1/ 3,643 39,709 Getty Images Inc./1/ 1,966 39,438 Total System Services Inc. 2,998 39,424 Flowserve Corp./1/ 3,935 39,350 PanAmSat Corp./1/ 2,216 38,448 John Nuveen Co. "A" 1,634 37,174 Expedia Inc. "A"/1/ 726 36,772 Metro-Goldwyn-Mayer Inc./1/ 3,046 36,400 AVX Corp. 4,125 35,722 Reinsurance Group of America Inc. 1,374 35,504 Capitol Federal Financial 1,599 35,434 Loews Corporation - Carolina Group 1,883 35,419 Orthodontic Centers of America Inc./1/ 3,230 34,561 Macromedia Inc./1/ 4,468 34,538 Cumulus Media Inc. "A"/1/ 1,940 34,241 Schedules of Investments 21 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 1000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Ticketmaster "B"/1/ 2,240 $ 34,160 University of Phoenix Online/1/ 1,053 33,854 Hearst-Argyle Television Inc./1/ 1,359 33,758 Atmel Corp./1/ 31,838 33,748 BOK Financial Corp./1/ 1,032 33,540 United States Cellular Corp./1/ 1,126 33,307 Sonic Automotive Inc./1/ 1,880 33,276 Adaptec Inc./1/ 7,500 33,075 United Rentals Inc./1/ 3,799 32,064 Micrel Inc./1/ 5,031 30,991 Columbia Sportswear Co./1/ 828 28,748 Hotels.com "A"/1/ 561 28,375 Advent Software Inc./1/ 2,464 28,213 Interactive Data Corp./1/ 2,280 27,930 Lin TV Corp. "A"/1/ 1,096 27,126 Continental Airlines Inc. "B"/1/ 4,929 26,567 Steelcase Inc. 2,446 25,610 21st Century Insurance Group 2,467 25,435 Northwest Airlines Corp. "A"/1/ 3,794 25,344 Wesco Financial Corp. 82 25,215 RealNetworks Inc./1/ 6,928 25,010 Dynegy Inc. "A" 20,964 24,318 Six Flags Inc./1/ 6,840 24,077 GameStop Corp./1/ 1,093 22,352 Conexant Systems Inc./1/ 20,027 22,230 Student Loan Corp. 241 21,806 Advanced Medical Optics Inc./1/ 2,264 21,531 Regal Entertainment Group "A"/1/ 1,188 21,146 CONSOL Energy Inc. 1,640 20,762 MSC Industrial Direct Co. Inc. "A"/1/ 1,868 19,838 West Corp./1/ 1,390 19,460 Premcor Inc./1/ 1,200 18,828 PETCO Animal Supplies Inc./1/ 864 18,740 Amkor Technology Inc./1/ 7,362 17,522 MKS Instruments Inc./1/ 1,573 17,177 AMN Healthcare Services Inc./1/ 899 16,631 Charter Communications Inc./1/ 8,789 16,348 JetBlue Airways Corp./1/ 387 15,608 i2 Technologies Inc./1/ 21,792 11,332 Instinet Group Inc. 2,495 7,735 Reliant Resources Inc./1/ 4,103 7,180 National Processing Inc./1/ 389 6,609 UnitedGlobalCom Inc. "A"/1/ 3,600 5,904 Ribapharm Inc./1/ 1,305 5,873 PayPal Inc./1/ 262 5,478 TOTAL COMMON STOCKS (COST: $787,446,623) 596,274,922 SHORT TERM INSTRUMENTS - 1.58% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 8,052,969 8,052,969 Dreyfus Money Market Fund 428,342 428,342 Goldman Sachs Financial Square Prime Obligation Fund 311,757 311,757 Providian Temp Cash Money Market Fund 642,513 642,513 TOTAL SHORT TERM INSTRUMENTS (COST: $9,435,581) 9,435,581 TOTAL INVESTMENTS IN SECURITIES - 101.41% (COST $796,882,204) 605,710,503 OTHER ASSETS, LESS LIABILITIES - (1.41%) (8,426,609) ------------ NET ASSETS - 100.00% $597,283,894 ============ /1/ Non-income earning securities. See notes to financial statements. 22 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) iSHARES RUSSELL 1000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- COMMON STOCKS - 99.89% General Electric Co. 1,172,280 $ 28,896,702 Microsoft Corp./1/ 528,283 23,107,098 Pfizer Inc. 736,634 21,377,119 Johnson & Johnson 355,175 19,207,864 Wal-Mart Stores Inc. 321,322 15,821,895 Intel Corp. 788,755 10,955,807 Coca-Cola Co. (The) 203,765 9,772,569 Cisco Systems Inc./1/ 863,102 9,045,309 Procter & Gamble Co. 90,860 8,121,067 PepsiCo Inc. 208,564 7,706,440 Abbott Laboratories 184,077 7,436,711 Home Depot Inc. 277,204 7,235,024 Merck & Co. Inc. 154,708 7,071,703 Fannie Mae 117,510 6,996,545 American International Group Inc. 118,866 6,501,970 Dell Computer Corp./1/ 266,769 6,271,739 Medtronic Inc. 143,271 6,034,575 Philip Morris Companies Inc. 154,480 5,993,824 Pharmacia Corp. 152,570 5,931,922 Amgen Inc./1/ 139,362 5,811,395 Lilly (Eli) and Co. 102,101 5,650,269 International Business Machines Corp. 93,545 5,462,093 Wyeth 156,446 4,974,983 Freddie Mac 76,109 4,254,493 Oracle Corp./1/ 486,015 3,820,078 Lowe's Companies Inc. 91,638 3,793,813 Walgreen Co. 120,780 3,715,193 Fifth Third Bancorp 60,148 3,682,862 3M Co. 33,240 3,655,403 Anheuser-Busch Companies Inc. 68,968 3,489,781 Citigroup Inc. 112,918 3,348,019 Cardinal Health Inc. 53,304 3,315,509 Target Corp. 106,986 3,158,227 Colgate-Palmolive Co. 57,125 3,081,894 Texas Instruments Inc. 204,670 3,022,976 Viacom Inc. "B"/1/ 73,812 2,993,077 United Parcel Service Inc. 46,007 2,876,818 Tenet Healthcare Corp./1/ 57,665 2,854,418 UnitedHealth Group Inc. 32,100 2,799,762 AOL Time Warner Inc./1/ 238,652 2,792,228 HCA Inc. 58,215 2,771,616 American Express Co. 86,826 2,707,235 Automatic Data Processing Inc. 73,206 2,545,373 Marsh & McLennan Companies Inc. 61,098 2,544,121 First Data Corp. 90,218 2,521,593 QUALCOMM Inc./1/ 90,846 2,509,167 MBNA Corp. 125,303 2,303,069 Applied Materials Inc./1/ 193,491 2,234,821 Sysco Corp. 78,257 2,221,716 Gillette Co. (The) 73,612 2,178,915 Baxter International Inc. 70,976 2,168,317 Kohls Corp./1/ 34,385 2,090,952 Boeing Co. (The) 60,169 2,053,568 Bristol-Myers Squibb Co. 84,758 2,017,240 Motorola Inc. 176,278 1,794,510 Kimberly-Clark Corp. 30,841 1,746,834 Harley-Davidson Inc. 35,742 1,660,216 SLM Corp. 17,332 1,614,302 Forest Laboratories Inc. "A"/1/ 18,912 1,550,973 Schering-Plough Corp. 69,124 1,473,724 General Mills Inc. 30,751 1,365,959 WellPoint Health Networks Inc./1/ 17,107 1,253,943 Omnicom Group Inc. 22,075 1,229,136 McGraw-Hill Companies Inc. (The) 19,458 1,191,219 Boston Scientific Corp./1/ 37,351 1,178,798 Guidant Corp./1/ 36,122 1,167,102 United Technologies Corp. 20,567 1,161,830 Schwab (Charles) Corp. (The) 128,956 1,121,917 Bed Bath & Beyond Inc./1/ 34,443 1,121,809 Baker Hughes Inc. 37,404 1,085,838 TJX Companies Inc. 63,700 1,082,900 Clear Channel Communications Inc./1/ 30,683 1,066,234 Intuit Inc./1/ 22,467 1,022,923 Kroger Co./1/ 71,993 1,015,101 State Street Corp. 25,946 1,002,553 Newmont Mining Corp. 36,132 993,991 Concord EFS Inc./1/ 60,203 956,024 Maxim Integrated Products Inc./1/ 38,167 945,015 Paychex Inc. 38,730 941,914 Starbucks Corp./1/ 45,640 941,553 Schedules of Investments 23 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 1000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Electronic Arts Inc./1/ 14,242 $ 939,402 eBay Inc./1/ 17,370 917,310 Stryker Corp. 15,904 916,070 Block (H & R) Inc. 21,655 909,727 AFLAC Inc. 29,567 907,411 Anthem Inc./1/ 13,591 883,415 Costco Wholesale Corp./1/ 27,165 879,331 Zimmer Holdings Inc./1/ 22,877 877,104 Allergan Inc. 15,857 862,621 Wells Fargo & Company 17,887 861,438 Bank of New York Co. Inc. (The) 29,832 857,372 Capital One Financial Corp. 24,488 855,121 Analog Devices Inc./1/ 43,141 849,878 Mattel Inc. 47,027 846,956 Sara Lee Corp. 46,237 845,675 Biomet Inc. 31,697 844,091 Gap Inc. (The) 72,693 788,719 Linear Technology Corp. 37,470 776,378 Yum! Brands Inc./1/ 27,861 772,028 Genentech Inc./1/ 23,607 770,296 McKesson Corp. 27,117 768,225 Danaher Corp. 13,163 748,317 Moody's Corp. 15,406 747,191 St. Jude Medical Inc./1/ 20,836 743,845 International Game Technology Inc./1/ 10,679 738,346 Illinois Tool Works Inc. 12,449 726,150 Lexmark International Group Inc. "A"/1/ 15,341 721,027 Synovus Financial Corp. 34,827 718,133 Interpublic Group of Companies Inc. 44,853 710,920 Staples Inc./1/ 55,030 703,834 Gilead Sciences Inc./1/ 20,394 683,811 AmerisourceBergen Corp. 9,572 683,632 Progressive Corp. (The) 13,419 679,404 Best Buy Co. Inc./1/ 30,350 677,109 AutoZone Inc./1/ 8,548 674,095 EMC Corp./1/ 147,124 672,357 Heinz (H.J.) Co. 19,966 666,265 Electronic Data Systems Corp. 47,614 665,644 Mellon Financial Corp. 25,182 652,969 SunGard Data Systems Inc./1/ 33,360 648,852 Wrigley (William Jr.) Co. 12,973 642,034 Fiserv Inc./1/ 22,631 635,478 Ecolab Inc. 15,227 635,423 Xilinx Inc./1/ 39,690 628,610 KLA-Tencor Corp./1/ 22,355 624,599 Lockheed Martin Corp. 9,622 622,255 MedImmune Inc./1/ 29,581 618,835 Harrah's Entertainment Inc./1/ 12,695 612,026 Apollo Group Inc. "A"/1/ 14,053 610,322 Veritas Software Corp./1/ 41,449 609,715 Anadarko Petroleum Corp. 13,482 600,488 Southwest Airlines Co. 45,408 593,028 Nextel Communications Inc. "A"/1/ 78,519 592,818 Cintas Corp. 14,024 587,886 Health Management Associates Inc. "A"/1/ 28,324 572,711 Symantec Corp./1/ 16,974 571,515 Laboratory Corp. of America Holdings/1/ 16,752 565,883 IDEC Pharmaceuticals Corp./1/ 13,272 551,053 AT&T Wireless Services Inc./1/ 132,413 545,542 Coca-Cola Enterprises Inc. 25,655 544,912 Quest Diagnostics Inc./1/ 8,831 543,371 Adobe Systems Inc. 28,155 537,760 King Pharmaceuticals Inc./1/ 29,207 530,691 Pitney Bowes Inc. 17,077 520,678 Safeway Inc./1/ 23,095 515,019 Biogen Inc./1/ 17,565 514,128 IMS Health Inc. 34,208 512,094 Masco Corp. 26,050 509,277 Family Dollar Stores Inc. 18,916 508,462 Kellogg Co. 14,938 496,688 New York Times Co. "A" 10,922 496,405 General Motors Corp. "H"/1/ 54,150 495,472 Darden Restaurants Inc. 20,357 493,454 EchoStar Communications Corp./1/ 28,371 490,818 Affiliated Computer Services Inc. "A"/1/ 11,496 489,155 Pepsi Bottling Group Inc. 20,800 486,720 Microchip Technology Inc./1/ 23,613 482,886 Sun Microsystems Inc./1/ 186,278 482,460 24 2002 iShares Semi-Anual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 1000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- BJ Services Co./1/ 18,511 $ 481,286 Avery Dennison Corp. 8,313 473,675 Mylan Laboratories Inc. 13,855 453,613 Dollar General Corp. 33,371 447,839 Caremark Rx Inc./1/ 26,282 446,794 Yahoo! Inc./1/ 46,191 442,048 Applera Corp. - Applied Biosystems Group 23,648 432,758 Northern Trust Corp. 11,440 431,517 L-3 Communications Holdings Inc./1/ 8,064 424,973 General Dynamics Corp. 5,155 419,256 DST Systems Inc./1/ 14,053 414,142 RadioShack Corp./1/ 20,589 413,015 Univision Communications Inc./1/ 18,079 412,201 Genzyme Corp. - General Division/1/ 19,919 410,531 Express Scripts Inc. "A"/1/ 7,503 409,064 Oxford Health Plans Inc./1/ 10,443 406,650 Micron Technology Inc./1/ 32,868 406,577 PeopleSoft Inc./1/ 32,563 402,804 Altera Corp./1/ 45,509 394,563 Lincare Holdings Inc./1/ 12,600 391,104 Clorox Co. 9,715 390,349 American Standard Companies Inc./1/ 6,081 386,873 Chiron Corp./1/ 11,066 386,646 Black & Decker Corp. 8,996 377,202 Waters Corp./1/ 15,544 376,942 USA Networks Inc./1/ 18,629 361,030 ChoicePoint Inc./1/ 10,101 360,000 Amazon.com Inc./1/ 22,585 359,779 ENSCO International Inc. 14,293 357,897 Michaels Stores Inc./1/ 7,766 354,906 Smith International Inc./1/ 12,050 353,186 Marriott International Inc. "A" 12,072 349,967 Varian Medical Systems Inc./1/ 8,038 345,554 Equifax Inc. 15,811 343,731 Synopsys Inc./1/ 8,908 339,840 Hershey Foods Corp. 5,471 339,476 Deluxe Corp. 7,521 338,896 Agilent Technologies Inc./1/ 25,899 338,241 Halliburton Co. 25,846 333,672 Ross Stores Inc. 9,300 331,452 Novellus Systems Inc./1/ 15,902 330,921 Sabre Holdings Corp./1/ 17,099 330,866 DENTSPLY International Inc. 8,192 329,073 First Health Group Corp./1/ 11,825 320,694 Westwood One Inc./1/ 8,968 320,606 Kraft Foods Inc. 8,698 317,129 Cadence Design Systems Inc./1/ 31,106 316,348 Expeditors International Washington Inc. 11,124 310,805 Molex Inc. 13,092 307,924 Convergys Corp./1/ 20,480 307,814 Waste Management Inc. 13,175 307,241 Mohawk Industries Inc./1/ 6,070 301,376 Patterson Dental Co./1/ 5,851 299,454 Universal Health Services Inc. "B"/1/ 5,801 296,721 Dollar Tree Stores Inc./1/ 13,305 293,242 CDW Computer Centers Inc./1/ 6,916 292,962 Ocean Energy Inc. 14,662 292,507 Robert Half International Inc./1/ 18,245 289,548 Amerada Hess Corp. 4,175 283,399 Tiffany & Co. 13,216 283,219 Commerce Bancorp Inc. 6,817 282,974 Alcoa Inc. 14,655 282,841 UST Inc. 9,935 280,266 PETsMART Inc./1/ 15,585 277,569 Limited Brands Inc. 19,273 276,375 Murphy Oil Corp. 3,363 276,001 Brown-Forman Corp. "B" 4,120 275,834 QLogic Corp./1/ 10,480 272,899 Brinker International Inc./1/ 10,527 272,649 Nike Inc. "B" 6,309 272,423 Coach Inc./1/ 10,532 269,619 Wendy's International Inc. 8,076 267,396 Alliant Techsystems Inc./1/ 3,849 266,543 Siebel Systems Inc./1/ 46,232 265,834 Beckman Coulter Inc. 6,865 265,675 Whole Foods Market Inc./1/ 6,186 265,008 Federated Investors Inc. "B" 9,741 262,910 Estee Lauder Companies Inc. "A" 9,101 261,563 Network Appliance Inc./1/ 35,190 257,943 Household International Inc. 9,103 257,706 Schedules of Investments 25 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 1000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------------- Career Education Corp./1/ 5,282 $ 253,578 Gallagher (Arthur J.) & Co. 10,244 252,515 Williams-Sonoma Inc./1/ 10,573 249,840 Jabil Circuit Inc./1/ 16,777 247,964 Gentex Corp./1/ 8,967 243,813 Dun & Bradstreet Corp./1/ 6,952 233,657 Kinder Morgan Inc. 6,514 230,921 TCF Financial Corp. 5,415 229,217 Starwood Hotels & Resorts Worldwide Inc. 10,277 229,177 Cephalon Inc./1/ 5,533 225,857 IVAX Corp./1/ 18,025 221,167 Fastenal Co. 6,949 219,449 BISYS Group Inc. (The)/1/ 13,104 218,968 BEA Systems Inc./1/ 42,245 218,829 Scripps (E.W.) Co. 3,128 216,770 CH Robinson Worldwide Inc. 8,020 215,818 SEI Investment Co. 8,960 213,965 Cooper Cameron Corp./1/ 5,053 211,013 Maytag Corp. 9,101 210,961 National Semiconductor Corp./1/ 17,648 210,717 Allied Capital Corp. 9,556 209,181 Brocade Communications Systems Inc./1/ 27,709 208,649 BMC Software Inc./1/ 15,940 208,336 Barr Laboratories Inc./1/ 3,323 206,990 Investors Financial Services Corp. 7,606 205,894 Charles River Laboratories International Inc./1/ 5,210 204,492 Patterson-UTI Energy Inc./1/ 7,912 201,835 Rent-A-Center Inc./1/ 3,879 201,514 Mid Atlantic Medical Services Inc./1/ 5,506 199,317 Abercrombie & Fitch Co. "A"/1/ 10,114 198,942 AdvancePCS/1/ 8,751 197,160 NVR Inc./1/ 655 196,389 McCormick & Co. Inc. 8,544 194,803 Burlington Resources Inc. 5,076 194,715 Ceridian Corp./1/ 13,584 193,572 Eaton Vance Corp. 6,975 192,789 Fisher Scientific International Inc./1/ 6,343 192,510 Fair Isaac and Co. Inc. 5,884 192,407 Steris Corp./1/ 7,622 189,864 SPX Corp./1/ 1,866 188,279 Honeywell International Inc. 8,583 185,908 Legg Mason Inc. 4,355 185,349 North Fork Bancorp Inc. 4,865 184,092 Network Associates Inc./1/ 17,209 182,932 Qwest Communications International Inc./1/ 79,952 182,291 Millipore Corp. 5,733 182,252 Lamar Advertising Co./1/ 5,868 178,094 Millennium Pharmaceuticals Inc./1/ 19,049 177,537 Reynolds & Reynolds Co. (The) "A" 7,827 175,638 Cheesecake Factory (The)/1/ 5,884 175,520 Entercom Communications Corp./1/ 3,687 174,653 Viad Corp. 8,490 173,451 Manpower Inc. 5,874 172,343 Polaris Industries Inc. 2,772 171,864 Investment Technology Group Inc./1/ 5,871 171,785 Brown & Brown Inc. 5,663 169,890 Triad Hospitals Inc./1/ 4,473 169,750 Stanley Works (The) 5,174 169,035 Andrx Group/1/ 7,546 167,144 Accredo Health Inc./1/ 3,496 166,689 DaVita Inc./1/ 7,027 165,837 Sprint Corp. (PCS Group)/1/ 84,208 165,048 Neuberger Berman Inc. 6,097 164,314 Henry Schein Inc./1/ 3,109 164,000 Teradyne Inc./1/ 17,042 163,603 BJ's Wholesale Club Inc./1/ 8,506 161,699 Herman Miller Inc. 9,074 161,154 Harman International Industries Inc. 3,059 158,303 Juniper Networks Inc./1/ 32,891 157,877 Mercury Interactive Corp./1/ 9,180 157,529 Cytyc Corp./1/ 14,630 156,834 Dreyer's Grand Ice Cream Inc. 2,230 155,788 Waddell & Reed Financial Inc. "A" 8,695 153,554 Krispy Kreme Doughnuts Inc./1/ 4,912 153,549 Activision Inc./1/ 6,400 153,152 Sealed Air Corp./1/ 9,060 153,023 Celgene Corp./1/ 9,048 152,368 Certegy Inc./1/ 7,476 150,268 26 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 1000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------------------- Level 3 Communications Inc./1/ 37,502 $ 145,883 Fox Entertainment Group Inc. "A"/1/ 6,549 144,274 LifePoint Hospitals Inc./1/ 4,606 143,652 Renal Care Group Inc./1/ 4,348 143,006 Applebee's International Inc. 6,490 142,261 Dow Jones & Co. Inc. 3,694 141,887 Comcast Corp. "A"/1/ 6,793 141,702 Leggett & Platt Inc. 7,149 141,479 Ruby Tuesday Inc. 7,508 141,000 JDS Uniphase Corp./1/ 71,121 138,544 Graco Inc. 5,510 136,648 LSI Logic Corp./1/ 21,494 136,487 Catellus Development Corp./1/ 7,377 136,106 Lam Research Corp./1/ 15,235 135,591 Chico's FAS Inc./1/ 8,480 135,086 Zebra Technologies Corp. "A"/1/ 2,547 134,202 Performance Food Group Co./1/ 3,790 128,708 NVIDIA Corp./1/ 15,014 128,520 Broadcom Corp. "A"/1/ 12,013 128,299 Weight Watchers International Inc./1/ 2,958 128,259 Noble Energy Inc. 3,772 128,135 DeVry Inc./1/ 6,820 126,988 Education Management Corp./1/ 2,868 126,966 Harris Corp. 3,784 126,726 Jacobs Engineering Group Inc./1/ 4,021 124,168 Catalina Marketing Corp./1/ 4,406 123,720 Fairchild Semiconductor International Corp. "A"/1/ 12,949 122,627 Becton, Dickinson & Co. 4,310 122,404 Dial Corp. (The) 5,701 122,343 Edwards Lifesciences Corp./1/ 4,761 121,834 International Flavors & Fragrances Inc. 3,812 121,412 Rowan Companies Inc. 6,507 121,290 Affymetrix Inc./1/ 5,814 120,931 Doral Financial Corp. 4,984 120,314 SICOR Inc./1/ 7,903 120,205 National-Oilwell Inc./1/ 6,168 119,536 Intersil Corp. "A"/1/ 9,213 119,400 Wiley (John) & Sons Inc. "A" 5,418 119,250 Iron Mountain Inc./1/ 4,737 118,378 Freeport-McMoRan Copper & Gold Inc./1/ 8,759 117,896 Diagnostic Products Corp. 2,539 116,794 Big Lots Inc./1/ 7,376 116,762 Apogent Technologies Inc./1/ 6,256 116,737 Medicis Pharmaceutical Corp. "A"/1/ 2,837 115,948 New York Community Bancorp Inc. 4,114 115,891 Citrix Systems Inc./1/ 19,115 115,263 O'Reilly Automotive Inc./1/ 4,023 115,138 Community Health Systems Inc./1/ 4,310 114,775 Cerner Corp./1/ 3,205 112,848 Omnicare Inc. 5,305 112,042 Watson Pharmaceuticals Inc./1/ 4,528 110,981 UTStarcom Inc./1/ 7,211 110,112 Mettler Toledo International Inc./1/ 4,234 110,084 GTECH Holdings Corp./1/ 4,332 107,520 Edwards (J.D.) & Co./1/ 11,612 107,411 KPMG Consulting Inc./1/ 16,599 107,230 Manor Care Inc./1/ 4,759 106,982 Citizens Communications Co./1/ 15,713 106,534 Pharmaceutical Product Development Inc./1/ 5,434 105,094 Newfield Exploration Co./1/ 3,128 105,070 Symbol Technologies Inc. 13,687 104,979 Agere Systems Inc. "B"/1/ 104,961 103,911 Donaldson Co. Inc. 3,026 103,883 CEC Entertainment Inc./1/ 3,042 103,763 Solectron Corp./1/ 48,953 103,291 AGCO Corp./1/ 4,447 103,170 RF Micro Devices Inc./1/ 17,175 103,050 Global Payments Inc. 4,016 102,810 International Rectifier Corp./1/ 6,570 102,623 T. Rowe Price Group Inc. 4,051 101,113 Henry (Jack) & Associates Inc. 8,101 100,695 Pixar Inc./1/ 2,081 100,096 Outback Steakhouse Inc./1/ 3,626 99,642 99 Cents Only Stores/1/ 4,761 98,553 Varco International Inc./1/ 5,787 97,916 Harte-Hanks Inc. 5,204 96,846 St. Joe Company (The) 3,472 95,827 Invitrogen Corp./1/ 2,804 95,532 Schedules of Investments 27 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 1000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Allied Waste Industries Inc./1/ 12,740 $ 93,639 Affiliated Managers Group Inc./1/ 2,099 93,636 Thermo Electron Corp./1/ 5,789 93,377 Sanmina-SCI Corp./1/ 33,633 93,163 Acxiom Corp./1/ 6,523 92,496 Tellabs Inc./1/ 22,145 90,130 Tootsie Roll Industries Inc. 2,984 88,684 Hilton Hotels Corp. 7,745 88,138 Human Genome Sciences Inc./1/ 7,283 87,833 Emulex Corp./1/ 7,793 87,749 Furniture Brands International Inc./1/ 3,808 87,394 Grant Prideco Inc./1/ 10,204 87,142 WebMD Corp./1/ 17,230 87,012 Hispanic Broadcasting Corp./1/ 4,661 86,928 Pride International Inc./1/ 6,638 86,294 Integrated Circuit Systems Inc./1/ 5,432 85,282 Tidewater Inc. 3,123 84,290 Advance Auto Parts Inc./1/ 1,583 83,487 Copart Inc./1/ 7,692 83,458 BlackRock Inc./1/ 2,001 82,881 Diamond Offshore Drilling Inc. 4,131 82,413 Church & Dwight Co. Inc. 2,471 81,914 Scholastic Corp./1/ 1,829 81,720 Constellation Brands Inc./1/ 3,497 80,781 Alliance Data Systems Corp./1/ 5,291 80,159 Corning Inc./1/ 49,519 79,230 Comverse Technology Inc./1/ 11,230 78,498 Sigma-Aldrich Corp. 1,584 78,044 Rational Software Corp./1/ 18,031 77,894 CIENA Corp./1/ 26,076 77,446 PMC-Sierra Inc./1/ 19,941 77,371 Talbots Inc. (The) 2,737 76,636 National Instruments Corp./1/ 3,491 76,418 Radio One Inc. "D"/1/ 4,468 73,677 Cymer Inc./1/ 3,945 73,535 ARAMARK Corp. "B"/1/ 3,460 72,660 Cypress Semiconductor Corp./1/ 11,008 72,212 Titan Corp. (The)/1/ 7,509 72,086 Semtech Corp./1/ 7,401 71,790 Ball Corp. 1,424 71,755 Amphenol Corp. "A"/1/ 2,298 71,238 E*TRADE Group Inc./1/ 15,987 71,142 Timberland Co. "A"/1/ 2,240 70,963 Cox Radio Inc. "A"/1/ 2,680 70,109 American Eagle Outfitters Inc./1/ 5,783 69,743 Perot Systems Corp. "A"/1/ 7,491 69,666 Advanced Fibre Communications Inc./1/ 5,229 69,389 Valspar Corp. (The) 1,835 68,446 Advanced Micro Devices Inc./1/ 12,798 68,341 Integrated Device Technology Inc./1/ 6,510 67,964 Pier 1 Imports Inc. 3,537 67,451 VeriSign Inc./1/ 13,335 67,342 CSG Systems International Inc./1/ 6,125 66,762 Coventry Health Care Inc./1/ 2,042 66,365 Quintiles Transnational Corp./1/ 6,910 65,714 AmeriCredit Corp./1/ 7,999 64,552 Ethan Allen Interiors Inc. 1,987 64,299 International Speedway Corp. "A" 1,596 63,409 Polycom Inc./1/ 9,119 61,918 Swift Transportation Co. Inc./1/ 3,954 61,682 Providian Financial Corp./1/ 12,528 61,387 Provident Financial Group Inc. 2,431 60,994 Computer Associates International Inc. 6,342 60,883 Foot Locker Inc./1/ 6,045 60,390 Sybase Inc./1/ 5,145 59,785 ITT Industries Inc. 952 59,338 TMP Worldwide Inc./1/ 6,530 58,770 Total System Services Inc. 4,461 58,662 Expedia Inc. "A"/1/ 1,129 57,184 Flowserve Corp./1/ 5,673 56,730 Getty Images Inc./1/ 2,815 56,469 John Nuveen Co. "A" 2,475 56,306 Orthodontic Centers of America Inc./1/ 5,155 55,159 Compuware Corp./1/ 17,936 54,705 SkyWest Inc. 4,117 53,933 University of Phoenix Online/1/ 1,646 52,919 Hotels.com "A"/1/ 1,039 52,553 Applied Micro Circuits Corp./1/ 18,100 51,766 Pioneer Natural Resources Co./1/ 2,123 51,483 Computer Sciences Corp./1/ 1,834 50,967 28 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 1000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- AES Corp. (The)/1/ 20,155 $ 50,589 Health Net Inc./1/ 2,303 49,399 Readers Digest Association Inc. (The) "A" 3,126 48,922 Columbia Sportswear Co./1/ 1,395 48,434 Newell Rubbermaid Inc. 1,567 48,373 Tech Data Corp./1/ 1,830 48,312 Rockwell Collins 2,193 48,114 Forest Oil Corp./1/ 1,874 47,787 Micrel Inc./1/ 7,615 46,908 Teleflex Inc. 1,021 46,537 Rouse Co. 1,383 44,187 Autodesk Inc. 3,482 44,117 CheckFree Corp./1/ 3,847 43,779 Circuit City Stores Inc. - CarMax Group/1/ 2,724 43,720 Donnelley (R.R.) & Sons Co. 1,854 43,588 Circuit City Stores Inc. 2,857 43,284 Advent Software Inc./1/ 3,762 43,075 Shaw Group Inc. (The)/1/ 3,026 42,969 Unisys Corp./1/ 6,100 42,700 ADC Telecommunications Inc./1/ 36,490 41,963 D.R. Horton Inc. 2,244 41,783 Rite Aid Corp./1/ 19,674 41,315 Energizer Holdings Inc./1/ 1,315 39,976 Macromedia Inc./1/ 5,150 39,809 Ticketmaster "B"/1/ 2,562 39,071 Hudson United Bancorp 1,452 38,623 Jones Apparel Group Inc./1/ 1,217 37,362 Westamerica Bancorp 906 36,494 Vishay Intertechnology Inc./1/ 4,117 36,230 Pogo Producing Co. 1,053 35,865 Blockbuster Inc. 1,426 35,365 PETCO Animal Supplies Inc./1/ 1,627 35,290 Atmel Corp./1/ 33,179 35,170 Stilwell Financial Inc. 2,836 34,231 Arrow Electronics Inc./1/ 2,693 34,013 Sonic Automotive Inc./1/ 1,914 33,878 Ingram Micro Inc. "A"/1/ 2,527 33,609 Fluor Corp. 1,371 33,507 RealNetworks Inc./1/ 9,173 33,115 CONSOL Energy Inc. 2,587 32,751 Calpine Corp./1/ 13,014 32,145 Gemstar-TV Guide International Inc./1/ 12,713 32,037 PerkinElmer Inc. 5,657 30,831 Zale Corp./1/ 1,011 30,492 West Corp./1/ 2,170 30,380 Barnes & Noble Inc./1/ 1,423 30,111 Ambac Financial Group Inc. 557 30,017 Cox Communications Inc. "A"/1/ 1,211 29,778 AMN Healthcare Services Inc./1/ 1,604 29,674 PanAmSat Corp./1/ 1,623 28,159 Lin TV Corp. "A"/1/ 1,120 27,720 Advanced Medical Optics Inc./1/ 2,903 27,608 Tektronix Inc./1/ 1,676 27,537 Metro-Goldwyn-Mayer Inc./1/ 2,244 26,816 GameStop Corp./1/ 1,304 26,667 Meredith Corp. 616 26,519 MKS Instruments Inc./1/ 2,402 26,230 Cumulus Media Inc. "A"/1/ 1,470 25,945 Adaptec Inc./1/ 5,872 25,896 Storage Technology Corp./1/ 2,460 25,855 Scotts Co. (The) "A"/1/ 617 25,723 ICN Pharmaceuticals Inc. 2,830 25,640 MSC Industrial Direct Co. Inc. "A"/1/ 2,368 25,148 American Power Conversion Corp./1/ 2,523 24,120 HCC Insurance Holdings Inc. 998 23,962 Vulcan Materials Co. 655 23,685 XTO Energy Inc. 1,084 22,341 Extended Stay America Inc./1/ 1,718 21,819 Callaway Golf Co. 2,043 21,247 CBRL Group Inc. 860 19,625 Cabot Corp. 910 19,110 MGM Grand Inc./1/ 482 17,979 Mirant Corp./1/ 8,069 17,832 Amkor Technology Inc./1/ 7,422 17,664 Lennar Corp. 297 16,567 HON Industries Inc. 650 16,542 FMC Technologies Inc./1/ 966 16,190 Regal Entertainment Group "A"/1/ 900 16,020 Conexant Systems Inc./1/ 14,363 15,943 Greater Bay Bancorp 846 15,389 Schedules of Investments 29 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 1000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Mandalay Resort Group/1/ 435 $ 14,594 Borders Group Inc./1/ 859 13,572 Pall Corp. 840 13,264 Healthsouth Corp./1/ 3,121 12,952 LaBranche & Co. Inc./1/ 638 12,919 OM Group Inc. 295 12,626 National Processing Inc./1/ 718 12,199 Williams Companies Inc. 5,149 11,637 PayPal Inc./1/ 524 10,957 i2 Technologies Inc./1/ 20,122 10,463 United Rentals Inc./1/ 1,192 10,060 Markel Corp./1/ 50 9,959 Alberto-Culver Co. "B" 196 9,610 ArvinMeritor Inc. 487 9,107 Avaya Inc./1/ 6,365 9,102 Ribapharm Inc./1/ 2,008 9,036 La-Z-Boy Inc. 385 8,932 Silicon Valley Bancshares/1/ 393 6,653 Emmis Communications Corp./1/ 305 5,795 JetBlue Airways Corp./1/ 65 2,621 TOTAL COMMON STOCKS (Cost: $640,346,728) 468,774,610 SHORT TERM INSTRUMENTS - 1.68% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 5,979,083 $ 5,979,083 Dreyfus Money Market Fund 361,852 361,852 Goldman Sachs Financial Square Prime Obligation Fund 213,363 213,363 Providian Temp Cash Money Market Fund 1,342,777 1,342,777 TOTAL SHORT TERM INSTRUMENTS (Cost: $7,897,075) 7,897,075 TOTAL INVESTMENTS IN SECURITIES - 101.57% (Cost $648,243,803) 476,671,685 OTHER ASSETS, LESS LIABILITIES - (1.57%) (7,357,010) ------------ NET ASSETS - 100.00% $469,314,675 ============ /1/ Non-income earning securities. See notes to financial statements. 30 2002 iShares Semi-annual Report to Shareholders Schedule of Investments (Unaudited) iSHARES RUSSELL 1000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ COMMON STOCKS - 99.81% Exxon Mobil Corp. 1,409,970 $ 44,978,043 Citigroup Inc. 871,088 25,827,759 Bank of America Corp. 320,051 20,419,254 Wells Fargo & Company 324,035 15,605,526 Verizon Communications Inc. 566,154 15,535,266 ChevronTexaco Corp. 221,976 15,371,838 American International Group Inc. 268,625 14,693,788 SBC Communications Inc. 694,381 13,957,058 International Business Machines Corp. 191,128 11,159,964 Procter & Gamble Co. 109,949 9,827,242 AT&T Corp. 792,917 9,522,933 Wachovia Corp. 284,516 9,300,828 Bank One Corp. 244,272 9,135,773 Merck & Co. Inc. 198,291 9,063,882 Viacom Inc. "B"/1/ 194,150 7,872,782 JP Morgan Chase & Co. 413,971 7,861,309 Morgan Stanley 229,002 7,758,588 Du Pont (E.I.) de Nemours & Co. 206,505 7,448,635 U.S. Bancorp 397,504 7,385,624 BellSouth Corp. 389,721 7,155,278 Philip Morris Companies Inc. 172,634 6,698,199 Hewlett-Packard Co. 562,351 6,562,636 ConocoPhillips 140,514 6,497,367 Walt Disney Co. (The) 424,054 6,420,178 Washington Mutual Inc. 202,576 6,375,067 Bristol-Myers Squibb Co. 253,370 6,030,206 Merrill Lynch & Co. Inc. 178,440 5,879,598 AOL Time Warner Inc./1/ 470,229 5,501,679 Allstate Corp. (The) 147,448 5,241,776 Dow Chemical Co. (The) 188,696 5,153,288 McDonald's Corp. 264,414 4,669,551 General Motors Corp. "A" 116,590 4,535,351 FleetBoston Financial Corp. 217,653 4,424,885 Southern Co. 146,212 4,207,981 Gannett Co. Inc. 55,387 3,997,834 Lockheed Martin Corp. 60,796 3,931,677 Schering-Plough Corp. 182,914 3,899,726 Liberty Media Corp. "A"/1/ 539,418 3,873,021 Comcast Corp. "A"/1/ 184,850 3,855,971 Emerson Electric Co. 87,548 3,846,859 Ford Motor Company 376,878 3,693,404 National City Corp. 126,637 3,612,954 United Technologies Corp. 62,036 3,504,414 BB&T Corp. 99,647 3,491,631 Prudential Financial Inc./1/ 121,982 3,483,806 Duke Energy Corp. 172,563 3,373,607 Honeywell International Inc. 155,018 3,357,690 International Paper Co. 100,425 3,353,191 Goldman Sachs Group Inc. (The) 50,159 3,311,999 SunTrust Banks Inc. 51,804 3,184,910 Exelon Corp. 66,990 3,182,025 FedEx Corp. 62,018 3,105,241 Anheuser-Busch Companies Inc. 60,660 3,069,396 Kimberly-Clark Corp. 53,537 3,032,336 Union Pacific Corp. 52,383 3,031,404 Coca-Cola Co. (The) 62,892 3,016,300 Dominion Resources Inc. 57,465 2,915,199 Alcoa Inc. 150,006 2,895,116 American Express Co. 92,199 2,874,765 Bank of New York Co. Inc. (The) 98,860 2,841,236 ConAgra Foods Inc. 111,673 2,775,074 Travelers Property Casualty Corp. "B"/1/ 197,152 2,667,467 Gillette Co. (The) 90,061 2,665,806 Caterpillar Inc. 71,475 2,660,299 Alltel Corp. 64,654 2,594,565 Northrop Grumman Corp. 20,173 2,502,259 Lehman Brothers Holdings Inc. 50,736 2,488,601 PNC Financial Services Group 58,832 2,480,945 3M Co. 22,400 2,463,328 Cendant Corp./1/ 226,088 2,432,707 Raytheon Co. 82,829 2,426,890 General Dynamics Corp. 28,777 2,340,433 TXU Corp. 55,403 2,310,859 Sears, Roebuck and Co. 58,735 2,290,665 Avon Products Inc. 49,179 2,267,152 Waste Management Inc. 96,724 2,255,604 Deere & Co. 49,417 2,246,003 Household International Inc. 79,014 2,236,886 Equity Office Properties Trust 86,631 2,236,812 Schedules of Investments 31 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 1000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Occidental Petroleum Corp. 77,990 $ 2,213,356 KeyCorp 88,535 2,210,719 Hartford Financial Services Group Inc. 51,483 2,110,803 CVS Corp. 81,512 2,066,329 Boeing Co. (The) 60,196 2,054,489 Weyerhaeuser Co. 45,383 1,986,414 Air Products & Chemicals Inc. 47,198 1,982,788 FPL Group Inc. 36,549 1,966,336 Entergy Corp. 46,393 1,929,949 American Electric Power Co. Inc. 67,140 1,914,161 CIGNA Corp. 26,926 1,905,014 Burlington Northern Santa Fe Corp. 79,637 1,904,917 Albertson's Inc. 78,724 1,901,972 Progress Energy Inc. 45,518 1,860,321 Clear Channel Communications Inc./1/ 53,105 1,845,399 Chubb Corp. 33,608 1,842,727 Comerica Inc. 37,142 1,790,987 Consolidated Edison Inc. 44,219 1,778,488 SouthTrust Corp. 72,097 1,748,352 Praxair Inc. 34,014 1,738,456 FirstEnergy Corp. 57,637 1,722,770 AFLAC Inc. 55,679 1,708,789 Hancock (John) Financial Services Inc. 61,277 1,703,501 Apache Corp. 28,556 1,697,654 Sprint Corp. (FON Group) 185,257 1,689,544 Tribune Co. 40,362 1,687,535 Principal Financial Group Inc./1/ 63,897 1,672,823 Eastman Kodak Co. 60,694 1,653,305 Motorola Inc. 161,497 1,644,039 Norfolk Southern Corp. 80,667 1,628,667 Newell Rubbermaid Inc. 52,644 1,625,120 Golden West Financial Corp. 26,072 1,621,157 Unocal Corp. 50,829 1,595,522 Kraft Foods Inc. 43,077 1,570,587 PPG Industries Inc. 35,046 1,566,556 AmSouth Bancorp 75,221 1,560,084 Regions Financial Corp. 47,734 1,559,470 Costco Wholesale Corp./1/ 46,409 1,502,259 Sara Lee Corp. 81,610 1,492,647 Archer-Daniels-Midland Co. 118,679 1,484,674 Fortune Brands Inc. 31,184 1,474,691 Marathon Oil Corp. 64,454 1,461,817 Devon Energy Corp. 30,008 1,447,886 Charter One Financial Inc. 48,155 1,431,164 Johnson Controls Inc. 18,447 1,417,099 MetLife Inc. 61,792 1,406,386 Illinois Tool Works Inc. 23,983 1,398,928 Equity Residential 57,111 1,367,237 May Department Stores Co. (The) 59,877 1,363,399 DTE Energy Co. 33,457 1,361,700 Safeway Inc./1/ 59,921 1,336,238 St. Paul Companies Inc. 46,505 1,335,624 Public Service Enterprise Group Inc. 42,884 1,307,962 Becton, Dickinson & Co. 46,009 1,306,656 M&T Bank Corp. 16,434 1,295,164 TRW Inc. 22,008 1,288,568 Burlington Resources Inc. 32,933 1,263,310 Jefferson-Pilot Corp. 31,283 1,254,448 Heinz (H.J.) Co. 37,554 1,253,177 Ameren Corp. 30,007 1,249,792 Anadarko Petroleum Corp. 27,913 1,243,245 Federated Department Stores Inc./1/ 41,807 1,230,798 Marshall & Ilsley Corp. 44,115 1,230,367 MBIA Inc. 30,731 1,227,703 Mellon Financial Corp. 47,211 1,224,181 Loews Corp. 27,905 1,196,845 Lincoln National Corp. 38,860 1,187,173 CSX Corp. 44,159 1,164,914 Union Planters Corp. 42,117 1,156,533 Lilly (Eli) and Co. 20,479 1,133,308 Genuine Parts Co. 36,269 1,111,282 Bear Stearns Companies Inc. (The) 19,640 1,107,696 Franklin Resources Inc. 35,357 1,099,603 Cinergy Corp. 34,764 1,092,633 Aetna Inc. 30,347 1,086,726 National Commerce Financial Corp. 42,955 1,076,023 ITT Industries Inc. 17,237 1,074,382 Apple Computer Inc./1/ 73,970 1,072,565 32 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 1000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Dover Corp. 42,138 $ 1,069,462 Masco Corp. 54,484 1,065,162 Southwest Airlines Co. 80,254 1,048,117 Campbell Soup Co. 46,780 1,032,902 UNUMProvident Corp. 50,535 1,028,387 Cincinnati Financial Corp. 28,626 1,018,513 AON Corp. 49,522 1,014,706 Countrywide Credit Industries Inc. 21,518 1,014,574 Rohm & Haas Co. "A" 32,581 1,010,011 El Paso Corp. 121,580 1,005,467 Cox Communications Inc. "A"/1/ 40,861 1,004,772 Delphi Automotive Systems Corp. 116,604 996,964 PPL Corp. 30,596 995,594 KeySpan Corp. 29,235 979,373 Knight Ridder Inc. 17,324 977,247 General Mills Inc. 21,946 974,841 Simon Property Group Inc. 27,111 968,676 North Fork Bancorp Inc. 25,452 963,104 AT&T Wireless Services Inc./1/ 232,740 958,889 Parker Hannifin Corp. 24,525 937,100 Huntington Bancshares Inc. 51,409 935,130 Eaton Corp. 14,584 929,584 EMC Corp./1/ 203,403 929,552 First Tennessee National Corp. 26,406 915,496 PG&E Corp./1/ 80,958 911,587 Kerr-McGee Corp. 20,880 907,027 Sun Microsystems Inc./1/ 347,689 900,515 Popular Inc. 28,356 896,050 Penney (J.C.) Co. Inc. 55,598 885,120 Ambac Financial Group Inc. 16,271 876,844 Archstone-Smith Trust 36,609 874,223 Plum Creek Timber Co. Inc. 38,458 869,535 EOG Resources Inc. 24,111 867,032 Torchmark Corp. 25,236 864,585 Computer Sciences Corp./1/ 30,457 846,400 SAFECO Corp. 26,612 845,729 Constellation Energy Group Inc. 34,101 845,364 State Street Corp. 21,851 844,323 Textron Inc. 24,634 840,019 Zions Bancorp 19,091 831,031 Prologis Trust 33,352 830,798 Monsanto Co. 54,294 830,155 Progressive Corp. (The) 16,341 827,345 Kellogg Co. 24,664 820,078 General Motors Corp. "H"/1/ 87,410 799,801 Computer Associates International Inc. 83,137 798,115 MeadWestvaco Corp. 41,522 797,638 Office Depot Inc./1/ 64,130 791,364 Compass Bancshares Inc. 26,578 783,785 Northern Trust Corp. 20,754 782,841 Limited Brands Inc. 54,145 776,439 MGIC Investment Corp. 18,970 774,545 R.J. Reynolds Tobacco Holdings Inc. 19,115 770,717 Xcel Energy Inc. 82,467 767,768 PACCAR Inc. 22,656 765,546 Rockwell Collins 34,320 752,981 Dean Foods Co./1/ 18,700 743,886 NiSource Inc. 43,129 743,113 Xerox Corp./1/ 149,721 741,119 Sempra Energy 37,711 741,021 GreenPoint Financial Corp. 17,694 738,548 Banknorth Group Inc. 30,538 725,277 Clorox Co. 17,778 714,320 Colgate-Palmolive Co. 13,234 713,974 Old Republic International Corp. 24,848 705,186 Jones Apparel Group Inc./1/ 22,927 703,859 Sovereign Bancorp Inc. 54,160 698,664 Micron Technology Inc./1/ 55,909 691,594 Duke-Weeks Realty Corp. 27,968 688,572 Grainger (W.W.) Inc. 16,177 688,331 ServiceMaster Co. 62,833 681,738 Edison International/1/ 67,778 677,780 Vulcan Materials Co. 18,650 674,384 Hibernia Corp. "A" 33,330 666,267 General Growth Properties Inc. 12,916 665,174 Agilent Technologies Inc./1/ 50,719 662,390 Apartment Investment & Management Co. "A" 17,007 660,722 CenturyTel Inc. 29,385 659,106 Public Storage Inc. 20,642 658,480 Engelhard Corp. 26,973 642,767 Schedules of Investments 33 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 1000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Sherwin-Williams Co. 27,012 $ 639,644 Pepco Holdings Inc. 31,898 636,365 VF Corp. 17,609 633,572 Georgia-Pacific Corp. 47,874 626,671 Hilton Hotels Corp. 55,005 625,957 Hershey Foods Corp. 9,993 620,066 Sigma-Aldrich Corp. 12,486 615,185 Nucor Corp. 16,219 614,700 Eastman Chemical Co. 16,048 612,552 Whirlpool Corp. 13,332 611,406 Radian Group Inc. 18,685 610,252 Pitney Bowes Inc. 19,776 602,970 Republic Services Inc. "A"/1/ 31,995 601,506 Bard (C.R.) Inc. 10,976 599,619 Energy East Corp. 30,053 595,350 Kimco Realty Corp. 19,040 592,144 Vornado Realty Trust 14,987 591,237 Halliburton Co. 45,300 584,823 Wisconsin Energy Corp. 23,962 582,277 Hillenbrand Industries Inc. 10,719 582,042 Circuit City Stores Inc. 38,166 578,215 Lennar Corp. 10,344 576,988 Fidelity National Financial Inc. 19,856 570,463 Lear Corp./1/ 13,618 567,190 Freddie Mac 10,144 567,050 SCANA Corp. 21,768 566,403 Centex Corp. 12,687 562,668 Reliant Energy Inc. 55,865 559,209 Mercantile Bankshares Corp. 14,591 556,938 First Virginia Banks Inc. 14,924 556,665 Valero Energy Corp. 21,011 556,161 Leggett & Platt Inc. 27,999 554,100 Liz Claiborne Inc. 22,175 553,266 Rockwell International Corp. 33,951 552,383 Telephone & Data Systems Inc. 10,898 549,804 Tyson Foods Inc. "A" 46,759 543,807 Pactiv Corp./1/ 32,943 541,912 Lucent Technologies Inc./1/ 712,630 541,599 Marriott International Inc. "A" 18,669 541,214 Kroger Co./1/ 38,310 540,171 Edwards (A.G.) Inc. 16,731 535,057 Wrigley (William Jr.) Co. 10,710 530,038 Valley National Bancorp 19,708 524,233 AvalonBay Communities Inc. 12,470 521,246 Bemis Co. 10,478 517,613 Washington Post Company (The) "B" 797 517,253 Starwood Hotels & Resorts Worldwide Inc. 23,155 516,357 Boston Properties Inc. 13,779 512,579 PMI Group Inc. (The) 18,725 509,507 Health Care Property Investors Inc. 11,944 508,814 TECO Energy Inc. 32,007 508,271 Associated Bancorp 15,862 503,301 AMB Property Corp. 17,398 502,802 Energizer Holdings Inc./1/ 16,516 502,086 MGM Grand Inc./1/ 13,332 497,284 UST Inc. 17,579 495,904 Amerada Hess Corp. 7,284 494,438 Diebold Inc. 15,017 494,360 Stilwell Financial Inc. 40,923 493,941 SPX Corp./1/ 4,831 487,448 Golden State Bancorp Inc. 15,064 486,868 Pioneer Natural Resources Co./1/ 20,073 486,770 Liberty Property Trust 15,529 481,399 Commerce Bancshares Inc. 12,217 477,318 AutoNation Inc./1/ 41,333 476,156 American Water Works Inc. 10,613 473,977 Ball Corp. 9,295 468,375 XTO Energy Inc. 22,250 458,573 Equitable Resources Inc. 13,199 456,025 Northeast Utilities 26,963 455,675 Host Marriott Corp./1/ 48,887 453,671 Smurfit-Stone Container Corp./1/ 35,928 451,256 Park Place Entertainment Corp./1/ 56,513 449,278 SUPERVALU Inc. 27,791 448,825 Pinnacle West Capital Corp. 16,112 447,269 UnionBanCal Corp. 10,595 445,096 Phelps Dodge Corp./1/ 17,349 444,655 KB HOME 9,043 441,660 Protective Life Corp. 14,308 440,257 Pulte Homes Inc. 10,251 437,000 34 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 1000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Humana Inc./1/ 35,202 $ 436,505 NSTAR 10,994 434,813 Donnelley (R.R.) & Sons Co. 18,417 432,984 DPL Inc. 26,316 432,898 Hospitality Properties Trust 13,057 432,448 Autoliv Inc. 20,366 429,315 Astoria Financial Corp. 17,486 426,658 Sonoco Products Co. 20,004 426,285 Sunoco Inc. 13,984 421,757 New York Community Bancorp Inc. 14,945 421,001 Rouse Co. 13,082 417,970 Toys R Us Inc./1/ 40,454 411,822 Thermo Electron Corp./1/ 25,502 411,347 Scientific-Atlanta Inc. 32,577 407,538 Dana Corp. 30,893 404,080 Fulton Financial Corp. 21,480 403,824 Belo (A.H.) Corp. 18,329 401,039 New York Times Co. "A" 8,733 396,915 Bank of Hawaii Corp. 14,215 396,598 Brunswick Corp. 18,776 395,047 Wilmington Trust Corp. 13,607 393,514 Health Net Inc./1/ 18,305 392,642 City National Corp. 8,339 390,015 Unisys Corp./1/ 55,605 389,235 Ashland Inc. 14,401 385,803 Bowater Inc. 10,903 384,876 Pentair Inc. 10,249 380,955 FirstMerit Corp. 17,715 379,455 McGraw-Hill Companies Inc. (The) 6,162 377,238 Goodrich (B.F.) Co. 19,976 377,147 Temple-Inland Inc. 9,759 376,990 Puget Energy Inc. 18,221 371,891 D.R. Horton Inc. 19,914 370,799 Valassis Communications Inc./1/ 10,537 369,533 Pennzoil-Quaker State Co. 16,765 368,327 Questar Corp. 16,009 365,646 T. Rowe Price Group Inc. 14,642 365,464 Cullen/Frost Bankers Inc. 10,650 363,697 New Plan Excel Realty Trust 19,674 362,789 Alliant Energy Corp. 18,821 362,304 Smithfield Foods Inc./1/ 22,997 361,053 Helmerich & Payne Inc. 10,428 356,950 United Dominion Realty Trust Inc. 22,366 355,843 Anthem Inc./1/ 5,472 355,680 AmerisourceBergen Corp./1/ 4,958 354,100 Nordstrom Inc. 19,665 352,790 Pall Corp. 22,262 351,517 Weingarten Realty Investors 9,488 347,261 Pogo Producing Co. 10,193 347,174 Bausch & Lomb Inc. 10,396 344,835 Fluor Corp. 14,076 344,017 Yum! Brands Inc./1/ 12,378 342,994 Allegheny Energy Inc. 26,128 342,277 Webster Financial Corp. 10,175 341,677 ALLETE Inc. 15,792 341,107 NCR Corp./1/ 17,166 339,887 Hormel Foods Corp. 15,534 339,884 Alberto-Culver Co. "B" 6,899 338,258 MDU Resources Group Inc. 14,744 336,606 RPM Inc. 23,873 335,654 BancorpSouth Inc. 16,889 332,713 Fox Entertainment Group Inc. "A"/1/ 14,957 329,503 Martin Marietta Materials Inc. 10,114 329,413 StanCorp Financial Group Inc. 6,217 328,879 Hasbro Inc. 29,283 325,920 Coors (Adolf) Company "B" 5,760 324,288 Hawaiian Electric Industries Inc. 7,513 323,810 Watson Pharmaceuticals Inc./1/ 13,197 323,458 Avery Dennison Corp. 5,674 323,305 Qwest Communications International Inc./1/ 141,321 322,212 Markel Corp./1/ 1,609 320,481 Meredith Corp. 7,417 319,302 Wendy's International Inc. 9,626 318,717 Annaly Mortgage Management Inc. 17,241 318,096 Old National Bancorp 12,719 316,194 Healthsouth Corp./1/ 76,058 315,641 Lyondell Chemical Co. 26,206 312,900 McCormick & Co. Inc. 13,666 311,585 Vectren Corp. 14,127 310,794 Colonial BancGroup Inc. (The) 25,045 310,558 First American Corp. 14,897 304,346 Schedules of Investments 35 Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 1000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Lubrizol Corp. 10,730 $ 303,337 Lee Enterprises Inc. 9,218 302,903 National Fuel Gas Co. 14,946 296,977 Unitrin Inc. 9,667 296,777 Ryder System Inc. 11,896 296,567 BMC Software Inc./1/ 22,629 295,761 Hubbell Inc. "B" 10,168 295,584 Washington Federal Inc. 13,201 294,580 Dillards Inc. "A" 14,555 293,720 BRE Properties Inc. "A" 9,535 293,201 CNF Transportation Inc. 9,306 292,115 3Com Corp./1/ 74,124 292,049 Transatlantic Holdings Inc. 4,375 290,719 Sky Financial Group Inc. 14,480 288,297 Mack-Cali Realty Corp. 8,899 285,925 Phoenix Companies Inc. 20,888 284,495 Arden Realty Inc. 12,026 284,415 American Power Conversion Corp./1/ 29,528 282,288 HON Industries Inc. 11,007 280,128 Snap-On Inc. 12,100 278,058 CarrAmerica Realty Corp. 11,012 277,172 Vertex Pharmaceuticals Inc./1/ 14,942 276,278 Manor Care Inc./1/ 12,262 275,650 Triad Hospitals Inc./1/ 7,260 275,517 BorgWarner Inc. 5,517 273,864 OGE Energy Corp. 16,226 273,733 TCF Financial Corp. 6,426 272,013 Independence Community Bank Corp. 10,802 271,022 IMC Global Inc. 22,472 270,788 First Midwest Bancorp Inc. 10,069 270,453 Roslyn Bancorp Inc. 15,329 266,878 Berkley (W.R.) Corp. 7,836 266,424 Crescent Real Estate Equities Co. 16,928 265,770 Valspar Corp. (The) 7,109 265,166 CenterPoint Properties Corp. 4,777 265,123 HCC Insurance Holdings Inc. 11,022 264,638 Saks Inc./1/ 25,080 264,092 Whitney Holding Corp. 8,255 263,417 Goodyear Tire & Rubber Co. 29,608 263,215 Marsh & McLennan Companies Inc. 6,319 263,123 iStar Financial Inc. 9,417 262,923 International Flavors & Fragrances Inc. 8,232 262,189 Kinder Morgan Inc. 7,395 262,153 Owens-Illinois Inc./1/ 23,155 262,115 Advanced Micro Devices Inc./1/ 48,843 260,822 NICOR Inc. 9,224 260,117 Reebok International Ltd./1/ 10,262 257,063 Highwoods Properties Inc. 10,982 256,979 Visteon Corp. 27,124 256,864 FNB Corp. 9,065 254,001 Leucadia National Corp. 7,462 253,708 Reckson Associates Realty Corp. 11,128 253,385 First Industrial Realty Trust Inc. 8,173 253,281 Mandalay Resort Group/1/ 7,537 252,866 Avnet Inc. 23,407 252,562 Dole Food Co. 8,698 252,503 Pittston Brink's Group 11,251 252,022 Hudson City Bancorp Inc. 15,476 251,175 Cablevision Systems Corp./1/ 27,615 250,192 Pier 1 Imports Inc. 13,114 250,084 PepsiAmericas Inc. 17,572 249,522 Developers Diversified Realty Corp. 11,327 249,307 Peoples Energy Corp. 7,360 247,958 McKesson Corp. 8,745 247,746 Camden Property Trust 7,469 247,597 Lancaster Colony Corp. 5,845 246,191 Great Plains Energy Inc. 12,844 245,963 JDS Uniphase Corp./1/ 125,702 244,868 ArvinMeritor Inc. 13,092 244,820 Navistar International Corp. 11,282 244,594 LSI Logic Corp./1/ 38,498 244,462 Legg Mason Inc. 5,722 243,528 United States Steel Corp. 20,779 241,244 Borders Group Inc./1/ 15,260 241,108 Rayonier Inc. 5,751 241,024 Philadelphia Suburban Corp. 11,868 240,920 Teleflex Inc. 5,282 240,754 Boise Cascade Corp. 10,525 239,970 AmerUs Group Co. 8,401 238,252 Delta Air Lines Inc. 25,589 237,722 36 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 1000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Cabot Corp. 11,233 $ 235,893 Millennium Pharmaceuticals Inc./1/ 25,285 235,656 IKON Office Solutions Inc. 29,890 235,533 Tektronix Inc./1/ 14,278 234,588 Park National Corp. 2,503 234,531 Precision Castparts Corp. 10,808 234,317 Readers Digest Association Inc. (The) "A" 14,916 233,435 McClatchy Co. (The) "A" 3,799 231,549 York International Corp. 8,175 230,535 MONY Group Inc. (The) 9,328 230,122 IndyMac Bancorp Inc./1/ 11,910 229,506 Mercury General Corp. 5,353 229,108 La-Z-Boy Inc. 9,762 226,478 Harsco Corp. 8,327 226,411 Vishay Intertechnology Inc./1/ 25,656 225,773 ICOS Corp./1/ 10,747 225,365 Citizens Banking Corp. 9,305 224,902 OM Group Inc. 5,190 222,132 American Greetings Corp. "A" 13,742 221,246 Alleghany Corp./1/ 1,166 220,957 Autodesk Inc. 17,362 219,977 Raymond James Financial Inc. 8,094 219,105 Electronic Data Systems Corp. 15,609 218,214 Cooper Tire & Rubber Co. 13,369 215,776 Packaging Corporation of America/1/ 12,295 215,285 Westamerica Bancorp 5,304 213,645 Trizec Properties Inc. 18,693 212,166 Citizens Communications Co./1/ 31,263 211,963 Invitrogen Corp./1/ 6,220 211,915 CBRL Group Inc. 9,248 211,039 CMS Energy Corp. 26,092 210,302 Ryland Group Inc. 5,652 210,085 Ocean Energy Inc. 10,482 209,116 Clayton Homes Inc. 19,033 208,982 Crane Co. 10,533 208,132 Constellation Brands Inc./1/ 8,990 207,669 Williams Companies Inc. 91,240 206,202 Broadcom Corp. "A"/1/ 19,263 205,729 Trustmark Corp. 9,012 205,474 Toll Brothers Inc./1/ 9,348 203,226 Dial Corp. (The) 9,405 201,831 Arrow Electronics Inc./1/ 15,905 200,880 Harris Corp. 5,996 200,806 AptarGroup Inc. 7,445 200,047 Erie Indemnity Co. "A" 4,749 197,843 Neiman-Marcus Group Inc. "A"/1/ 7,487 196,534 Newmont Mining Corp. 7,001 192,598 Tellabs Inc./1/ 46,920 190,964 Tech Data Corp./1/ 7,181 189,578 Lafarge North America Inc. 6,530 189,174 IDACORP Inc. 7,775 189,166 Storage Technology Corp./1/ 17,952 188,676 Symbol Technologies Inc. 23,840 182,853 Apogent Technologies Inc./1/ 9,735 181,655 Foot Locker Inc./1/ 18,119 181,009 Solectron Corp./1/ 85,643 180,707 Corning Inc./1/ 111,729 178,766 Veritas Software Corp./1/ 12,112 178,168 Hudson United Bancorp 6,679 177,661 Nike Inc. "B" 4,081 176,218 Winn-Dixie Stores Inc. 13,422 176,097 FMC Technologies Inc./1/ 10,442 175,008 Noble Energy Inc. 5,143 174,708 LaBranche & Co. Inc./1/ 8,612 174,393 Cousins Properties Inc. 7,457 171,511 Big Lots Inc./1/ 10,797 170,917 Timken Co. (The) 10,184 170,582 AGCO Corp./1/ 7,343 170,358 Estee Lauder Companies Inc. "A" 5,927 170,342 GATX Corp. 8,596 170,201 Cummins Inc. 7,148 168,836 IDT Corp./1/ 10,234 166,814 Outback Steakhouse Inc./1/ 6,010 165,155 Stanley Works (The) 5,040 164,657 Ingram Micro Inc. "A"/1/ 12,287 163,417 Providian Financial Corp./1/ 33,011 161,754 Omnicare Inc. 7,604 160,596 Hercules Inc./1/ 16,917 155,806 Mirant Corp./1/ 70,285 155,330 Manpower Inc. 5,253 154,123 KEMET Corp./1/ 17,884 152,908 Schedules of Investments 37 Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 1000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------------- Rowan Companies Inc. 8,182 $ 152,512 Regency Centers Corp. 4,898 151,838 Zale Corp./1/ 5,030 151,705 Downey Financial Corp. 4,425 151,556 Agere Systems Inc. "B"/1/ 152,673 151,146 Human Genome Sciences Inc./1/ 12,496 150,702 WebMD Corp./1/ 29,796 150,470 Pride International Inc./1/ 11,477 149,201 Lamar Advertising Co./1/ 4,883 148,199 Extended Stay America Inc./1/ 11,659 148,069 Forest City Enterprises Inc. "A" 4,554 148,005 American National Insurance Co. 2,133 147,198 Henry Schein Inc./1/ 2,789 147,120 American Financial Group Inc. 6,332 145,763 Silicon Valley Bancshares/1/ 8,599 145,581 AK Steel Holding Corp./1/ 19,796 144,709 Aquila Inc. 35,271 144,611 Tidewater Inc. 5,327 143,776 Albemarle Corp. 5,651 142,914 Greater Bay Bancorp 7,844 142,682 Murphy Oil Corp. 1,736 142,474 Barnes & Noble Inc./1/ 6,629 140,270 Genentech Inc./1/ 4,282 139,722 Sanmina-SCI Corp./1/ 50,315 139,373 ENSCO International Inc. 5,546 138,872 E*TRADE Group Inc./1/ 31,051 138,177 Mattel Inc. 7,625 137,326 American Axle & Manufacturing Holdings Inc./1/ 5,469 136,616 Coventry Health Care Inc./1/ 4,162 135,265 Dow Jones & Co. Inc. 3,512 134,896 AMR Corp./1/ 32,251 134,809 Comverse Technology Inc./1/ 19,279 134,760 Scholastic Corp./1/ 3,016 134,755 Polo Ralph Lauren Corp./1/ 6,426 133,532 Andrew Corp./1/ 20,289 132,893 Media General Inc. "A" 2,608 132,617 Allmerica Financial Corp. 10,991 131,892 CIENA Corp./1/ 44,175 131,200 CNA Financial Corp./1/ 5,200 130,000 Emmis Communications Corp./1/ 6,832 129,808 AES Corp. (The)/1/ 51,157 128,404 Calpine Corp./1/ 51,288 126,681 USA Networks Inc./1/ 6,534 126,629 Baker Hughes Inc. 4,344 126,106 Newfield Exploration Co./1/ 3,742 125,694 Scotts Co. (The) "A"/1/ 2,923 121,860 American Standard Companies Inc./1/ 1,901 120,942 Entravision Communications Corp./1/ 9,003 119,290 National-Oilwell Inc./1/ 6,110 118,412 Peabody Energy Corp. 4,641 118,346 Radio One Inc. "D"/1/ 7,176 118,332 Genzyme Corp. - General Division/1/ 5,728 118,054 Sybase Inc./1/ 10,157 118,024 Compuware Corp./1/ 38,390 117,089 Quintiles Transnational Corp./1/ 12,235 116,355 Allegheny Technologies Inc. 16,755 115,945 VeriSign Inc./1/ 22,924 115,766 People's Bank 5,094 114,258 Nationwide Financial Services Inc. 4,274 114,116 ICN Pharmaceuticals Inc. 12,593 114,093 Intersil Corp. "A"/1/ 8,779 113,776 International Speedway Corp. "A" 2,858 113,548 ADC Telecommunications Inc./1/ 98,269 113,008 Callaway Golf Co. 10,632 110,573 Provident Financial Group Inc. 4,367 109,568 Iron Mountain Inc./1/ 4,372 109,256 Integrated Device Technology Inc./1/ 10,464 109,244 Advanced Fibre Communications Inc./1/ 8,182 108,575 Gateway Inc./1/ 36,508 108,429 Rite Aid Corp./1/ 50,224 105,470 Varco International Inc./1/ 6,216 105,175 Dun & Bradstreet Corp./1/ 3,122 104,930 United States Cellular Corp./1/ 3,518 104,062 Capitol Federal Financial 4,580 101,493 Loews Corporation - Carolina Group 5,353 100,690 GTECH Holdings Corp./1/ 4,032 100,074 Church & Dwight Co. Inc. 3,003 99,549 Molex Inc. 4,209 98,996 Ethan Allen Interiors Inc. 3,057 98,925 BOK Financial Corp./1/ 2,984 96,980 38 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 1000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Edwards Lifesciences Corp./1/ 3,767 $ 96,398 AVX Corp. 10,914 94,515 Ceridian Corp./1/ 6,627 94,435 Avaya Inc./1/ 65,010 92,964 Allied Capital Corp. 4,246 92,945 Wesco Financial Corp. 301 92,558 Blockbuster Inc. 3,683 91,338 Reinsurance Group of America Inc. 3,486 90,078 Applied Micro Circuits Corp./1/ 31,041 88,777 Swift Transportation Co. Inc./1/ 5,633 87,875 Donaldson Co. Inc. 2,554 87,679 Interactive Data Corp./1/ 7,138 87,440 Hearst-Argyle Television Inc./1/ 3,494 86,791 Renal Care Group Inc./1/ 2,638 86,764 Jacobs Engineering Group Inc./1/ 2,686 82,944 Furniture Brands International Inc./1/ 3,514 80,646 Community Health Systems Inc./1/ 3,027 80,609 Diamond Offshore Drilling Inc. 4,020 80,199 Performance Food Group Co./1/ 2,353 79,908 Forest Oil Corp./1/ 3,091 78,820 Teradyne Inc./1/ 8,167 78,403 Hispanic Broadcasting Corp./1/ 4,180 77,957 Doral Financial Corp. 3,141 75,824 PerkinElmer Inc. 13,817 75,303 Northwest Airlines Corp. "A"/1/ 11,023 73,634 CheckFree Corp./1/ 6,421 73,071 Student Loan Corp. 801 72,474 United Rentals Inc./1/ 8,558 72,230 Catellus Development Corp./1/ 3,844 70,922 Continental Airlines Inc. "B"/1/ 13,149 70,873 National Semiconductor Corp./1/ 5,876 70,159 Viad Corp. 3,332 68,073 21st Century Insurance Group 6,532 67,345 Cox Radio Inc. "A"/1/ 2,542 66,499 Steelcase Inc. 6,301 65,971 Acxiom Corp./1/ 4,635 65,724 Coca-Cola Enterprises Inc. 3,061 65,016 Dynegy Inc. "A" 55,832 64,765 Six Flags Inc./1/ 17,916 63,064 Harte-Hanks Inc. 3,256 60,594 Harrah's Entertainment Inc./1/ 1,226 59,105 Medicis Pharmaceutical Corp. "A"/1/ 1,445 59,057 Premcor Inc./1/ 3,758 58,963 Gemstar-TV Guide International Inc./1/ 23,138 58,308 Mylan Laboratories Inc. 1,759 57,590 Metro-Goldwyn-Mayer Inc./1/ 4,784 57,169 Cumulus Media Inc. "A"/1/ 3,091 54,556 TMP Worldwide Inc./1/ 5,890 53,010 PanAmSat Corp./1/ 3,044 52,813 SkyWest Inc. 3,906 51,169 Equifax Inc. 2,294 49,872 Shaw Group Inc. (The)/1/ 3,444 48,905 Charter Communications Inc./1/ 25,928 48,226 Adaptec Inc./1/ 10,906 48,095 Applera Corp. - Applied Biosystems Group 2,616 47,873 Novellus Systems Inc./1/ 2,221 46,219 Alliance Data Systems Corp./1/ 2,843 43,071 Brinker International Inc./1/ 1,651 42,761 Scripps (E.W.) Co. 614 42,550 Jabil Circuit Inc./1/ 2,856 42,212 Circuit City Stores Inc. - CarMax Group/1/ 2,579 41,393 Emulex Corp./1/ 3,467 39,038 Cypress Semiconductor Corp./1/ 5,884 38,599 Affiliated Managers Group Inc./1/ 848 37,829 Lin TV Corp. "A"/1/ 1,443 35,714 Regal Entertainment Group "A"/1/ 1,977 35,191 Entercom Communications Corp./1/ 733 34,722 Sonic Automotive Inc./1/ 1,949 34,497 Juniper Networks Inc./1/ 7,171 34,421 Allied Waste Industries Inc./1/ 4,662 34,266 Black & Decker Corp. 807 33,838 Polycom Inc./1/ 4,980 33,814 JetBlue Airways Corp./1/ 832 33,555 O'Reilly Automotive Inc./1/ 1,134 32,455 AmeriCredit Corp./1/ 3,883 31,336 Ticketmaster "B"/1/ 1,988 30,317 Conexant Systems Inc./1/ 27,090 30,070 Cooper Cameron Corp./1/ 720 30,067 International Rectifier Corp./1/ 1,763 27,538 Schedules of Investments 39 Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 1000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Citrix Systems Inc./1/ 4,531 $ 27,322 Atmel Corp./1/ 25,166 26,676 Sealed Air Corp./1/ 1,577 26,636 Instinet Group Inc. 8,500 26,350 GameStop Corp./1/ 1,202 24,581 SICOR Inc./1/ 1,593 24,230 Neuberger Berman Inc. 835 22,503 UnitedGlobalCom Inc. "A"/1/ 13,519 22,171 Rational Software Corp./1/ 4,905 21,190 MSC Industrial Direct Co. Inc. "A"/1/ 1,887 20,040 Rent-A-Center Inc./1/ 382 19,845 Zebra Technologies Corp. "A"/1/ 376 19,811 Getty Images Inc./1/ 969 19,438 Patterson-UTI Energy Inc./1/ 751 19,158 Macromedia Inc./1/ 2,338 18,073 Reliant Resources Inc./1/ 10,100 17,675 Steris Corp./1/ 695 17,312 Amkor Technology Inc./1/ 6,386 15,199 Titan Corp. (The)/1/ 1,555 14,928 i2 Technologies Inc./1/ 27,753 14,432 American Eagle Outfitters Inc./1/ 1,161 14,002 Flowserve Corp./1/ 1,234 12,340 Advanced Medical Optics Inc./1/ 1,253 11,916 Fairchild Semiconductor International Corp. "A"/1/ 1,257 11,904 Global Payments Inc. 454 11,622 Talbots Inc. (The) 390 10,920 RealNetworks Inc./1/ 2,695 9,729 Perot Systems Corp. "A"/1/ 662 6,157 Columbia Sportswear Co./1/ 147 5,104 Advent Software Inc./1/ 418 4,786 Orthodontic Centers of America Inc./1/ 431 4,612 Ribapharm Inc./1/ 859 3,866 MKS Instruments Inc./1/ 320 3,494 West Corp./1/ 161 2,254 TOTAL COMMON STOCKS (Cost: $1,037,838,885) 793,069,566 SHORT TERM INSTRUMENTS - 1.84% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 12,053,013 12,053,013 Dreyfus Money Market Fund 663,516 663,516 Goldman Sachs Financial Square Prime Obligation Fund 592,924 592,924 Providian Temp Cash Money Market Fund 1,295,278 1,295,278 TOTAL SHORT TERM INSTRUMENTS (Cost: $14,604,731) 14,604,731 TOTAL INVESTMENTS IN SECURITIES - 101.65% (Cost $1,052,443,616) 807,674,297 Other Assets, Less Liabilities - (1.65%) (13,078,445) ------------ NET ASSETS - 100.00% $794,595,852 ============ /1/ Non-income earning securities. See notes to financial Statements. 40 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) iSHARES RUSSELL 2000 INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------------- COMMON STOCKS - 99.79% Smucker (J.M.) Co. (The) 188,595 $ 6,921,436 Corinthian Colleges Inc./1/ 160,500 6,057,270 Techne Corp./1/ 176,394 5,783,959 Healthcare Realty Trust Inc. 177,792 5,529,331 Worthington Industries Inc. 285,309 5,335,278 AGL Resources Inc. 237,202 5,239,792 Regis Corp. 183,580 5,193,478 Covance Inc./1/ 264,039 5,167,243 Payless ShoeSource Inc./1/ 95,419 5,153,580 Overture Services Inc./1/ 216,413 5,100,854 Hilb Rogal & Hamilton Co. 121,135 4,996,819 Scios Inc./1/ 196,335 4,996,726 WGL Holdings Inc. 206,066 4,927,038 Interstate Bakeries Corp. 184,856 4,911,624 Neurocrine Biosciences Inc./1/ 119,447 4,897,327 Pan Pacific Retail Properties Inc. 141,265 4,870,817 Crompton Corp. 481,683 4,840,914 Realty Income Corp. 141,419 4,829,459 Stericycle Inc./1/ 142,359 4,828,817 Carlisle Companies Inc. 128,831 4,725,521 WPS Resources Corp. 133,131 4,718,163 Community First Bankshares Inc. 169,144 4,715,735 Kennametal Inc. 146,174 4,695,109 Take-Two Interactive Software Inc./1/ 160,199 4,645,771 Piedmont Natural Gas Co. 130,543 4,630,360 DQE Inc. 303,365 4,550,475 Shurgard Storage Centers Inc. "A" 143,072 4,523,937 HRPT Properties Trust 546,577 4,509,260 Health Care REIT Inc. 164,870 4,509,194 United Bancshares Inc. 155,201 4,502,381 Corporate Executive Board Co. (The)/1/ 156,843 4,477,868 Federal Realty Investment Trust 162,787 4,395,249 Southwest Bancorp of Texas Inc./1/ 119,908 4,365,850 Service Corp. International/1/ 1,246,659 4,363,307 Amylin Pharmaceuticals Inc./1/ 259,937 4,320,153 AnnTaylor Stores Corp./1/ 186,639 4,298,296 ONEOK Inc. 227,349 4,296,896 Macerich Co. (The) 138,367 4,286,610 CACI International Inc. "A"/1/ 120,511 4,272,115 Roper Industries Inc. 123,526 4,261,647 Superior Industries International Inc. 90,270 4,249,912 Arbitron Inc./1/ 124,559 4,247,462 UGI Corp. 116,820 4,246,407 Imation Corp./1/ 148,772 4,214,711 Commercial Federal Corp. 192,219 4,184,608 IDEXX Laboratories Inc./1/ 135,138 4,182,251 Respironics Inc./1/ 130,010 4,161,620 Corn Products International Inc. 143,091 4,113,866 Waste Connections Inc./1/ 117,438 4,085,668 AMETEK Inc. 140,152 4,081,226 Apria Healthcare Group Inc./1/ 173,037 4,076,752 Staten Island Bancorp Inc. 233,965 4,070,991 Pacific Capital Bancorp 148,376 4,029,595 Chelsea Property Group Inc. 117,769 3,974,704 Chesapeake Energy Corp. 601,413 3,969,326 Washington Real Estate Investment Trust 156,177 3,963,772 Claire's Stores Inc. 179,469 3,912,424 Sensient Technologies Corp. 184,754 3,903,852 Universal Corp. 111,183 3,899,188 Transkaryotic Therapies Inc./1/ 118,494 3,865,037 Cree Inc./1/ 308,873 3,860,912 Alexander & Baldwin Inc. 173,185 3,853,366 Western Digital Corp./1/ 815,067 3,830,815 Blyth Inc. 137,075 3,824,392 Invacare Corp. 111,653 3,824,115 Great Lakes Chemical Corp. 158,609 3,809,788 Prentiss Properties Trust 130,456 3,775,397 Banta Corp. 106,269 3,772,549 Atmos Energy Corp. 175,218 3,767,187 New Jersey Resources Corp. 114,323 3,761,227 International Bancshares Corp. 96,286 3,744,563 Schedules of Investments 41 Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------------- Chittenden Corp. 125,945 $ 3,727,972 Energen Corp. 145,868 3,691,919 Cytec Industries Inc./1/ 168,171 3,691,353 ResMed Inc./1/ 128,962 3,688,313 Post Properties Inc. 141,868 3,685,731 Tupperware Corp. 220,235 3,660,306 Yellow Corp./1/ 123,054 3,631,077 Susquehanna Bancshares Inc. 167,082 3,617,325 South Financial Group Inc. (The) 170,885 3,603,965 First Bancorp 94,181 3,590,180 Oshkosh Truck Corp. 63,624 3,588,394 Home Properties of New York Inc. 110,196 3,581,370 Cabot Microelectronics Corp./1/ 96,031 3,576,194 Jack in the Box Inc./1/ 156,506 3,568,337 Sonic Corp./1/ 154,217 3,562,413 Nationwide Health Properties Inc. 208,440 3,553,902 Federal Signal Corp. 192,054 3,537,635 Olin Corp. 215,506 3,529,984 Crown Cork & Seal Co. Inc./1/ 672,256 3,529,344 Thornbury Mortgage Inc. 187,452 3,522,223 Bob Evans Farms Inc. 148,405 3,517,198 Ohio Casualty Corp./1/ 215,682 3,511,303 Enzon Inc./1/ 182,369 3,508,780 Cambrex Corp. 95,295 3,506,856 Province Healthcare Co./1/ 202,809 3,478,166 THQ Inc./1/ 167,006 3,473,725 InterMune Inc./1/ 105,685 3,468,582 Potlatch Corp. 120,444 3,454,334 Varian Inc./1/ 125,091 3,453,763 Briggs & Stratton Corp. 91,862 3,448,499 Ventas Inc. 257,610 3,439,094 SL Green Realty Corp. 111,824 3,437,470 Electronics For Imaging Inc./1/ 230,055 3,432,421 PacifiCare Health Systems Inc. "A"/1/ 147,816 3,413,071 Charming Shoppes Inc./1/ 503,859 3,401,048 Cooper Companies Inc. 64,608 3,391,920 Intergraph Corp./1/ 198,351 3,389,819 East West Bancorp Inc. 100,157 3,381,300 ITT Educational Services Inc./1/ 180,122 3,380,890 SanDisk Corp./1/ 256,768 3,366,228 Commerce Group Inc. 103,989 3,365,084 Harland (John H.) Co. 123,885 3,363,478 Idex Corp. 117,461 3,353,512 United Stationers Inc./1/ 127,304 3,348,095 Too Inc./1/ 143,782 3,347,245 CBL & Associates Properties Inc. 85,883 3,327,966 Harleysville Group Inc. 125,614 3,297,367 Evergreen Resources Inc./1/ 80,453 3,296,964 American Capital Strategies Ltd. 174,833 3,293,854 FMC Corp./1/ 126,924 3,277,178 USFreightways Corp. 114,081 3,271,843 CH Energy Group Inc. 69,385 3,256,238 Hollywood Entertainment Corp./1/ 223,904 3,251,086 Tom Brown Inc./1/ 141,762 3,246,350 TrustCo Bank Corp. NY 306,623 3,243,458 Key Energy Services Inc./1/ 410,376 3,233,763 CLARCOR Inc. 105,316 3,233,201 Novell Inc./1/ 1,538,660 3,231,186 Minerals Technologies Inc. 86,668 3,212,783 Airgas Inc./1/ 244,484 3,210,075 Fuller (H.B.) Co. 120,186 3,196,948 Alexandria Real Estate Equities Inc. 75,171 3,193,264 Standard-Pacific Corp. 136,343 3,187,699 Arch Coal Inc. 192,211 3,181,092 Ferro Corp. 137,481 3,175,811 Landstar System Inc./1/ 64,728 3,173,290 LNR Property Corp. 95,149 3,173,219 Northwest Natural Gas Co. 107,895 3,167,797 Kansas City Southern Industries Inc./1/ 254,987 3,161,839 CAL Dive International Inc./1/ 155,882 3,143,672 Texas Regional Bancshares Inc. "A" 93,763 3,140,123 EMCOR Group Inc./1/ 63,096 3,135,871 42 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------------- Jeffries Group Inc. 81,984 $ 3,128,509 Protein Design Labs Inc.(1) 376,628 3,126,012 Pediatrix Medical Group Inc.(1) 100,538 3,115,673 FTI Consulting Inc.(1) 78,234 3,110,584 Southwest Gas Corp. 139,407 3,101,806 Beazer Homes USA Inc.(1) 50,644 3,091,816 Mueller Industries Inc.(1) 119,257 3,088,756 First Commonwealth Financial Corp. 249,101 3,086,361 Charter Municipal Mortgage Acceptance Corp. 174,626 3,076,910 PNM Resources Inc. 153,859 3,046,408 UCBH Holdings Inc. 76,949 3,023,326 Essex Property Trust Inc. 61,116 3,021,575 Donnelley (R.H.) Corp./1/ 116,159 3,020,134 SEACOR SMIT Inc./1/ 73,659 3,019,282 Longs Drug Stores Corp. 130,715 3,018,209 American Financial Holdings Inc. 98,969 3,009,647 Werner Enterprises Inc. 163,216 2,999,910 Lincoln Electric Holding Inc. 134,809 2,983,458 W Holding Co. Inc. 183,023 2,983,275 Black Hills Corp. 113,786 2,980,055 Hughes Supply Inc. 101,196 2,948,851 Toro Co. 52,356 2,945,025 Stone Energy Corp./1/ 90,518 2,941,835 Unit Corp./1/ 153,052 2,930,946 Brookline Bancorp Inc. 248,748 2,923,038 Delta & Pine Land Co. 155,811 2,919,898 M.D.C. Holdings Inc. 82,145 2,899,719 Patina Oil & Gas Corp. 101,527 2,893,520 Louisiana-Pacific Corp./1/ 443,726 2,870,907 PolyOne Corp. 333,928 2,868,442 Black Box Corp./1/ 85,938 2,853,142 Terex Corp./1/ 168,578 2,848,968 Gartner Inc. "A"/1/ 350,801 2,841,488 Spinnaker Exploration Co./1/ 98,951 2,839,894 S&T Bancorp Inc. 112,656 2,836,678 EarthLink Inc./1/ 530,310 2,831,855 St. Mary Land & Exploration Co. 118,035 2,821,037 Linens `N Things Inc./1/ 153,491 2,819,630 Gables Residential Trust 105,225 2,810,560 G&K Services Inc. "A" 82,757 2,801,324 La Quinta Corp. 583,433 2,800,478 Manitowoc Co. Inc. (The) 102,183 2,794,705 Wallace Computer Services Inc. 158,055 2,789,671 Alliance Gaming Corp./1/ 179,467 2,774,560 Otter Tail Corp. 105,239 2,771,995 Perrigo Co./1/ 259,842 2,762,120 Chemical Financial Corp. 95,645 2,760,315 Mills Corp. 92,734 2,750,490 Fred's Inc. 91,837 2,742,069 Anixter International Inc./1/ 132,507 2,729,644 UMB Financial Corp. 69,843 2,726,671 First Financial Bancorp 152,891 2,722,989 Matthews International Corp. "A" 116,165 2,714,776 Waypoint Financial Corp. 160,883 2,712,487 FBR Asset Investment Corp. 86,595 2,706,960 Ralcorp Holdings Inc./1/ 127,121 2,703,864 Bio-Rad Laboratories Inc. "A"/1/ 71,622 2,697,285 Tecumseh Products Co. "A" 64,194 2,693,580 Pinnacle Systems Inc./1/ 249,169 2,691,025 Georgia Gulf Corp. 116,615 2,666,985 Mentor Corp. 83,638 2,666,379 UICI/1/ 163,644 2,660,851 Hancock Holding Co. 56,428 2,650,931 First Citizens BancShares Inc. "A" 25,699 2,649,104 Wolverine World Wide Inc. 176,386 2,645,790 Sierra Pacific Resources 433,317 2,643,234 Jones Lang LaSalle Inc./1/ 128,451 2,640,953 Millennium Chemicals Inc. 266,972 2,637,683 Curtiss Wright Corp. 44,016 2,631,717 Panera Bread Co. "A"/1/ 97,315 2,627,505 Republic Bancorp Inc. 201,831 2,623,803 AmSurg Corp./1/ 86,638 2,613,868 OSI Pharmaceuticals Inc./1/ 153,949 2,612,515 Plantronics Inc./1/ 160,199 2,611,244 Plains Resource Inc./1/ 101,241 2,609,993 Arkansas Best Corp./1/ 90,968 2,609,963 Schedules of Investments 43 Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------------- DRS Technologies Inc./1/ 70,043 $ 2,607,000 Pacific Sunwear of California Inc./1/ 127,773 2,601,458 Skyworks Solutions Inc./1/ 572,835 2,594,943 Hyperion Solutions Corp./1/ 141,305 2,592,947 LandAmerica Financial Group Inc. 78,758 2,590,351 Thomas & Betts Corp./1/ 183,807 2,589,841 DoubleClick Inc./1/ 503,142 2,586,150 Priority Healthcare Corp. "B"/1/ 102,033 2,571,232 Liberty Corp. 71,429 2,557,158 Florida Rock Industries Inc. 83,666 2,556,833 Grey Wolf Inc./1/ 709,489 2,554,160 Cathay Bancorp Inc. 65,408 2,550,912 Brandywine Realty Trust 113,114 2,550,721 Technitrol Inc. 170,029 2,541,934 ADVO Inc./1/ 80,027 2,540,857 Cabot Oil & Gas Corp. "A" 117,567 2,527,690 US Oncology Inc./1/ 310,751 2,520,191 American Italian Pasta Co. "A"/1/ 70,374 2,511,648 Brady Corp. "A" 78,001 2,511,632 Chateau Communities Inc. 94,933 2,507,181 Commercial Net Lease Realty Inc. 155,335 2,504,000 Christopher & Banks Corp./1/ 99,559 2,500,922 Western Gas Resources Inc. 79,972 2,499,125 Trinity Industries Inc. 151,747 2,497,756 Pep Boys-Manny, Moe & Jack Inc. 203,772 2,496,207 Trimeris Inc./1/ 56,109 2,492,362 MAF Bancorp Inc. 80,578 2,489,860 Station Casinos Inc./1/ 146,176 2,486,454 Oceaneering International Inc./1/ 97,639 2,484,913 Nautilus Group Inc. (The)/1/ 126,911 2,474,755 Wilson Greatbatch Technologies Inc./1/ 88,814 2,469,029 Baldor Electric Co. 129,083 2,465,485 Iomega Corp./1/ 230,048 2,459,213 Boyd Gaming Corp./1/ 131,718 2,459,175 Kellwood Co. 107,301 2,452,901 CVB Financial Corp. 111,755 2,451,905 Kilroy Realty Corp. 103,055 2,443,434 NetIQ Corp./1/ 167,699 2,431,636 Penn National Gaming Inc./1/ 128,770 2,431,178 Argosy Gaming Co./1/ 105,654 2,425,816 FelCor Lodging Trust Inc. 188,653 2,420,418 Hot Topic Inc./1/ 133,931 2,414,776 Lennox International Inc. 181,169 2,396,866 Westar Energy Inc. 237,429 2,388,536 Selective Insurance Group Inc. 109,643 2,382,542 Coinstar Inc./1/ 92,302 2,379,546 Heartland Express Inc./1/ 126,406 2,368,848 El Paso Electric Co./1/ 198,615 2,359,546 Avocent Corp./1/ 176,301 2,358,907 Chiquita Brands International Inc./1/ 152,333 2,353,545 Glimcher Realty Trust 125,442 2,350,783 FactSet Research Systems Inc. 88,316 2,344,790 Kaydon Corp. 116,620 2,337,065 Teledyne Technologies Inc./1/ 128,654 2,336,357 Syncor International Corp./1/ 72,755 2,336,163 SangStat Medical Corp./1/ 111,932 2,334,902 Airborne Inc. 205,006 2,324,768 Solutia Inc. 444,639 2,321,016 Cleco Corp. 172,165 2,319,063 Applera Corp. - Celera Genomics Group/1/ 291,230 2,315,278 Sun Communities Inc. 63,040 2,313,568 Price Communications Corp./1/ 204,462 2,310,421 MPS Group Inc./1/ 398,151 2,309,276 CONMED Corp./1/ 114,402 2,305,200 AMCORE Financial Inc. 104,739 2,300,068 Nu Skin Enterprises Inc. "A" 187,551 2,288,122 Ryan's Family Steak Houses Inc./1/ 187,997 2,287,924 CV Therapeutics Inc./1/ 109,401 2,287,575 Modine Manufacturing Co. 120,200 2,286,204 Red Hat Inc./1/ 480,271 2,281,287 Florida East Coast Industries Inc. 96,621 2,280,256 Avista Corp. 202,660 2,269,792 44 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------------- Capital Automotive 90,714 $ 2,266,036 Thor Industries Inc. 64,905 2,256,098 ABM Industries Inc. 159,920 2,254,872 NBTY Inc./1/ 173,620 2,253,588 Sybron Dental Specialties Inc./1/ 161,046 2,253,034 NPS Pharmaceuticals Inc./1/ 109,503 2,252,258 Lattice Semiconductor Corp./1/ 361,938 2,251,254 Granite Construction Inc. 136,154 2,243,818 Nordson Corp. 94,409 2,241,270 Coherent Inc./1/ 122,555 2,236,629 Vintage Petroleum Inc. 206,040 2,225,232 Credence Systems Corp./1/ 256,705 2,223,065 Hunt (J.B.) Transport Services Inc./1/ 94,388 2,222,837 Macrovision Corp./1/ 181,390 2,218,400 Flir Systems Inc./1/ 63,395 2,218,191 Horace Mann Educators Corp. 150,659 2,214,687 Maxtor Corp./1/ 845,178 2,205,915 Anthracite Capital Inc. 195,043 2,203,986 Cost Plus Inc./1/ 81,923 2,199,633 Reliance Steel & Aluminum Co. 100,584 2,197,760 MacDermid Inc. 109,924 2,192,984 Choice Hotels International Inc./1/ 94,810 2,191,059 NBT Bancorp Inc. 126,830 2,190,354 Provident Bankshares Corp. 101,296 2,185,968 Journal Register Co./1/ 115,522 2,177,590 Colonial Properties Trust 60,146 2,176,082 First Charter Corp. 130,743 2,166,412 Mercury Computer Systems Inc./1/ 91,786 2,166,150 Senior Housing Properties Trust 192,885 2,164,170 Texas Industries Inc. 89,072 2,162,668 Schulman (A.) Inc. 124,789 2,162,593 Net.B@nk Inc./1/ 207,442 2,159,471 USEC Inc. 344,603 2,157,215 WesBanco Inc. 90,383 2,152,019 Acuity Brands Inc. 175,476 2,151,336 Abgenix Inc./1/ 331,420 2,150,916 Hovnanian Enterprises Inc. "A"/1/ 63,574 2,148,801 Pharmaceutical Resources Inc./1/ 76,533 2,141,393 Varian Semiconductor Equipment Associates Inc./1/ 130,093 2,138,729 Flowers Foods Inc./1/ 93,689 2,129,551 NDCHealth Corp. 136,615 2,124,363 Identix Inc./1/ 355,835 2,117,218 American Management Systems Inc./1/ 166,068 2,114,046 Sterling Bancshares Inc. 161,685 2,113,223 United Defense Industries Inc./1/ 89,493 2,112,035 National Penn Bancshares Inc. 75,486 2,110,589 Philadelphia Consolidated Holding Corp./1/ 71,413 2,106,684 Landry's Restaurants Inc. 93,003 2,100,938 Quanex Corp. 60,241 2,090,363 Stewart Enterprises Inc. "A"/1/ 408,968 2,085,737 SCP Pool Corp./1/ 75,964 2,082,173 Libbey Inc. 65,207 2,077,495 Owens & Minor Inc. 144,595 2,066,263 Seacoast Financial Services Corp. 102,803 2,063,256 Kronos Inc./1/ 83,478 2,056,063 Engineered Support Systems Inc. 36,039 2,055,665 Wabtec Corp. 145,422 2,047,542 Silicon Laboratories Inc./1/ 111,524 2,044,235 CUNO Inc./1/ 66,083 2,038,661 Benchmark Electronics Inc./1/ 96,532 2,031,999 Delphi Financial Group Inc. "A" 55,754 2,030,561 Monaco Coach Corp./1/ 101,340 2,029,840 Dime Community Bancshares 94,665 2,027,724 Axcelis Technologies Inc./1/ 415,340 2,026,859 IGEN International Inc./1/ 67,674 2,022,099 IHOP Corp./1/ 83,853 2,020,857 Ruddick Corp. 132,942 2,019,389 Winnebago Industries Inc. 51,009 2,016,386 PSS World Medical Inc./1/ 302,196 2,009,603 Ascential Software Corp./1/ 1,080,868 2,008,253 Schedules of Investments 45 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------------- Smith (A.O.) Corp. "B" 70,635 $ 2,007,447 InterDigital Communications Corp./1/ 230,662 2,006,759 Trust Co. of New Jersey (The) 78,851 2,006,758 Borland Software Corp./1/ 257,221 2,003,752 Foundry Networks Inc./1/ 364,981 2,000,096 Hollinger International Inc. 219,918 1,999,055 ProQuest Co./1/ 65,822 1,997,698 OfficeMax Inc./1/ 488,546 1,993,268 Parametric Technology Corp./1/ 1,106,672 1,992,010 Cognizant Technology Solutions Corp./1/ 34,607 1,988,864 Impac Mortgage Holdings Inc. 178,367 1,988,792 Internet Security Systems Inc./1/ 161,411 1,988,584 P.F. Chang's China Bistro Inc./1/ 68,498 1,988,497 Kimball International Inc. "B" 143,656 1,985,326 Cognex Corp./1/ 142,532 1,982,620 Yankee Candle Co. Inc. (The)/1/ 114,887 1,972,610 TriQuint Semiconductor Inc./1/ 557,600 1,968,328 Harleysville National Corp. 81,257 1,961,544 Paxar Corp./1/ 134,800 1,959,992 Rare Hospitality International Inc./1/ 83,688 1,959,973 WD-40 Co. 67,715 1,956,964 Isis Pharmaceuticals Inc./1/ 197,869 1,950,988 Genesis Health Ventures Inc./1/ 118,661 1,950,787 Simpson Manufacturing Co. Inc./1/ 62,010 1,946,494 Southern Union Co./1/ 171,970 1,943,261 Documentum Inc./1/ 167,772 1,937,767 Men's Wearhouse Inc. (The)/1/ 130,519 1,918,629 Aztar Corp./1/ 145,184 1,917,881 Cross Country Inc./1/ 136,820 1,915,480 Regeneron Pharmaceuticals Inc./1/ 141,741 1,913,504 Exar Corp./1/ 165,645 1,913,200 First Financial Bankshares Inc. 52,363 1,908,108 Casey's General Store Inc. 165,091 1,906,801 Albany International Corp. "A" 100,377 1,905,155 Heritage Property Investment Trust Inc. 76,324 1,905,047 Dionex Corp./1/ 74,109 1,894,226 Sandy Spring Bancorp Inc. 61,495 1,894,046 FirstFed Financial Corp./1/ 73,201 1,884,926 Crown Castle International Corp./1/ 867,823 1,883,176 Digital Insight Corp./1/ 119,779 1,882,926 VISX Inc./1/ 203,809 1,881,157 PRG-Schultz International Inc./1/ 151,228 1,872,203 Alabama National Bancorp 41,316 1,870,788 Grey Global Group Inc. 3,169 1,869,710 Laclede Group Inc. (The) 80,098 1,866,283 Quiksilver Inc./1/ 82,564 1,865,121 United Natural Foods Inc./1/ 80,712 1,858,797 Dycom Industries Inc./1/ 202,795 1,857,602 Strayer Education Inc. 31,201 1,856,147 Adolor Corp./1/ 132,350 1,855,547 eFunds Corp./1/ 197,694 1,854,567 Harbor Florida Bancshares Inc. 90,383 1,848,332 Sierra Health Services Inc./1/ 103,016 1,848,107 Wellman Inc. 135,219 1,845,739 City Holding Co. 71,669 1,844,760 UniSource Energy Corp. 120,937 1,844,289 DSP Group Inc./1/ 114,709 1,842,112 Tredegar Corp. 109,929 1,841,311 Tractor Supply Co./1/ 57,886 1,839,617 Extreme Networks Inc./1/ 436,839 1,839,092 Dress Barn Inc./1/ 118,163 1,838,616 Sylvan Learning Systems Inc./1/ 134,340 1,837,771 Stage Stores Inc./1/ 84,701 1,837,165 Commercial Metals Co. 102,345 1,834,022 Roadway Corp. 49,925 1,831,249 Alkermes Inc./1/ 231,397 1,825,722 KV Pharmaceuticals Co./1/ 96,578 1,825,324 Palm Inc./1/ 2,458,110 1,819,001 Summit Properties Inc. 93,762 1,818,983 Genlyte Group Inc. (The)/1/ 51,294 1,818,372 Newport Corp./1/ 160,780 1,813,598 Kroll Inc./1/ 91,412 1,812,700 Cornerstone Realty Income Trust Inc. 203,548 1,811,577 Haemonetics Corp./1/ 76,330 1,811,311 46 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------------- Alfa Corp. 147,785 $ 1,810,366 Alaska Air Group Inc./1/ 102,206 1,809,046 Moog Inc. "A"/1/ 63,984 1,808,188 Anchor BanCorp Wisconsin Inc. 89,410 1,806,082 UIL Holdings Corp. 50,820 1,801,569 SurModics Inc./1/ 56,511 1,795,354 Unizan Financial Corp. 93,544 1,793,987 Sinclair Broadcast Group Inc. "A"/1/ 130,505 1,787,919 Kirby Corp./1/ 79,032 1,787,704 JDN Realty Corp. 147,751 1,784,832 Wintrust Financial Corp. 62,261 1,783,778 Pacific Northwest Bancorp 65,403 1,780,924 Woodward Governor Co. 37,568 1,780,648 AmeriPath Inc./1/ 119,484 1,780,312 Group 1 Automotive Inc./1/ 79,531 1,777,518 Kindred Healthcare Inc./1/ 47,882 1,773,070 Steel Dynamics Inc./1/ 135,331 1,771,483 Ionics Inc./1/ 74,393 1,771,297 Standard Register Co. (The) 73,673 1,768,152 Gaylord Entertainment Co. "A"/1/ 93,397 1,767,071 Connecticut Bankshares Inc. 47,716 1,766,923 Insight Enterprises Inc./1/ 173,871 1,764,791 MGE Energy Inc. 68,774 1,764,741 Overseas Shipholding Group Inc. 115,416 1,763,556 Spherion Corp./1/ 249,673 1,760,195 Tower Automotive Inc./1/ 261,085 1,749,270 GrafTech International Ltd./1/ 240,980 1,747,105 Frontier Financial Corp. 68,379 1,742,297 Manufactured Home Communities Inc. 54,516 1,737,970 Hutchinson Technology Inc./1/ 107,522 1,736,480 Boston Private Financial Holdings Inc. 81,516 1,736,291 Taubman Centers Inc. 121,808 1,733,328 BARRA Inc./1/ 63,412 1,732,416 Electro Scientific Industries Inc./1/ 116,656 1,730,008 Anteon International Corp./1/ 63,575 1,727,968 American Medical Systems Holdings Inc./1/ 82,788 1,717,851 Massey Energy Co. 266,209 1,717,048 United Community Banks Inc. 70,358 1,709,699 Fossil Inc./1/ 85,135 1,706,947 RehabCare Group Inc./1/ 73,714 1,705,005 Watson Wyatt & Co. Holdings/1/ 85,206 1,704,120 DIANON Systems Inc./1/ 36,006 1,703,444 Jo-Ann Stores Inc./1/ 60,733 1,702,953 Viasys Healthcare Inc./1/ 110,537 1,702,270 Hanover Compressor Co./1/ 204,835 1,700,130 Tekelec/1/ 196,922 1,699,437 Action Performance Companies Inc./1/ 66,102 1,698,821 W-H Energy Services Inc./1/ 98,197 1,698,808 Tetra Tech Inc./1/ 212,402 1,697,092 ImClone Systems Inc./1/ 216,937 1,692,109 Checkpoint Systems Inc./1/ 136,461 1,685,293 American States Water Co. 64,177 1,682,721 Keane Inc./1/ 249,149 1,681,756 Ocular Sciences Inc./1/ 71,985 1,681,570 Cell Genesys Inc./1/ 139,486 1,680,806 PMA Capital Corp. "A" 111,982 1,679,730 Regal-Beloit Corp. 98,059 1,677,789 Mid-State Bancshares 102,192 1,675,949 IRT Property Co. 142,452 1,673,811 Corrections Corp. of America/1/ 118,880 1,670,264 Sterling Financial Corp. (Pennsylvania) 71,570 1,669,728 Corus Bankshares Inc. 38,102 1,669,249 Pure Resources Inc./1/ 74,195 1,661,968 Triumph Group Inc./1/ 59,355 1,661,940 Dollar Thrifty Automotive Group Inc./1/ 103,534 1,661,721 South Jersey Industries Inc. 50,867 1,661,316 Rayovac Corp./1/ 135,948 1,658,566 Unilab Corp./1/ 79,058 1,657,846 Gymboree Corp./1/ 101,380 1,653,508 SureWest Communications 56,306 1,648,077 Schedules of Investments 47 Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------------- Independent Bank Corp. (Michigan) 49,755 $ 1,646,891 Plexus Corp./1/ 177,831 1,644,937 Brooks-PRI Automation Inc./1/ 143,459 1,642,606 ESCO Technologies Inc./1/ 50,719 1,638,224 ICU Medical Inc./1/ 44,797 1,635,986 Itron Inc./1/ 88,883 1,634,558 Thoratec Labs Corp./1/ 208,472 1,634,420 MICROS Systems Inc./1/ 70,341 1,631,208 MAXIMUS Inc./1/ 72,806 1,630,854 Sunrise Assisted Living Inc./1/ 75,573 1,621,041 ATMI Inc./1/ 114,916 1,620,316 Insight Communications Co. Inc./1/ 175,170 1,616,819 C&D Technologies Inc. 110,171 1,615,107 Sovran Self Storage Inc. 53,064 1,614,207 M/I Schottenstein Homes Inc. 51,218 1,613,367 EGL Inc./1/ 146,322 1,611,005 S1 Corp./1/ 300,528 1,610,830 Progress Software Corp./1/ 133,023 1,609,578 Broadwing Inc./1/ 812,538 1,608,825 MB Financial Inc. 47,952 1,606,392 Entertainment Properties Trust 72,643 1,605,410 Commonwealth Telephone Enterprises Inc./1/ 46,092 1,602,619 Suffolk Bancorp 49,738 1,601,564 Myriad Genetics Inc./1/ 100,911 1,598,430 Empire District Electric Co. (The) 94,460 1,596,374 Lexington Corp. Properties Trust 99,130 1,595,993 Atlantic Coast Airlines Holdings Inc./1/ 172,278 1,593,571 ShopKo Stores Inc./1/ 122,007 1,593,411 BankAtlantic Bancorp Inc. "A" 176,695 1,586,721 Cyberonics Inc./1/ 92,157 1,586,022 Sycamore Networks Inc./1/ 674,730 1,585,616 Papa John's International Inc./1/ 54,307 1,581,963 Pulitzer Inc. 37,934 1,579,951 Argonaut Group Inc. 91,501 1,578,392 Knight Transportation Inc./1/ 101,464 1,572,692 Invision Technologies Inc./1/ 49,108 1,571,947 Prime Hospitality Corp./1/ 191,326 1,568,873 School Specialty Inc./1/ 62,708 1,568,327 Rogers Corp./1/ 67,077 1,566,248 Weis Markets Inc. 46,765 1,565,692 Inter-Tel Inc. 76,747 1,561,801 Hudson River Bancorp Inc. 64,653 1,561,370 New Century Financial Corp. 66,724 1,561,342 Nortek Inc./1/ 36,052 1,559,970 Kelly Services Inc. "A" 71,721 1,554,194 Nextel Partners Inc. "A"/1/ 286,923 1,543,646 First Financial Holdings Inc. 57,023 1,543,613 Pennsylvania Real Estate Investment Trust 59,765 1,539,546 Russell Corp. 102,643 1,538,619 Sepracor Inc./1/ 293,440 1,537,626 Financial Federal Corp./1/ 48,262 1,537,145 Rambus Inc./1/ 354,120 1,536,881 ProAssurance Corp./1/ 90,856 1,535,466 Stewart Information Services Corp./1/ 71,833 1,533,635 Glacier Bancorp Inc. 67,219 1,531,249 California Water Service Group 59,721 1,524,677 Bedford Property Investors Inc. 61,456 1,521,651 EastGroup Properties Inc. 61,471 1,521,407 Thomas Industries Inc. 61,337 1,521,158 Joy Global Inc./1/ 183,089 1,519,639 First Merchants Corp. 61,511 1,519,322 Ariba Inc./1/ 1,121,027 1,513,386 Entegris Inc./1/ 194,644 1,512,384 CIMA Labs Inc./1/ 60,099 1,511,490 CSK Auto Corp./1/ 120,904 1,508,882 Odyssey Healthcare Inc./1/ 50,360 1,508,282 Bay View Capital Corp./1/ 265,922 1,507,778 Arch Chemicals Inc. 85,044 1,506,980 Lone Star Steakhouse & Saloon Inc. 71,790 1,506,872 Longview Fibre Co. 216,704 1,503,926 Armor Holdings Inc./1/ 100,220 1,502,298 MFA Mortgage Investments Inc. 184,512 1,494,547 48 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------------- Albany Molecular Research Inc./1/ 87,751 $ 1,494,400 OshKosh B'Gosh Inc. "A" 43,489 1,494,282 Central Parking Corp. 73,984 1,490,038 Ligand Pharmaceuticals Inc. "B"/1/ 219,064 1,489,635 Mid-America Apartment Communities Inc. 59,730 1,487,874 Meristar Hospitality Corp. 172,997 1,486,044 CommScope Inc./1/ 218,805 1,483,498 Quest Software Inc./1/ 157,440 1,479,936 Commonwealth Bancorp Inc. 32,111 1,477,106 FEI Co./1/ 102,202 1,476,819 National Health Investors Inc. 96,801 1,476,215 Duane Reade Inc./1/ 91,976 1,471,616 Esterline Technologies Corp./1/ 88,017 1,464,603 NCI Building Systems Inc./1/ 77,851 1,463,599 FileNET Corp./1/ 141,212 1,461,544 Hain Celestial Group Inc./1/ 99,623 1,459,477 McDATA Corp. "A"/1/ 268,376 1,457,282 Ameritrade Holding Corp./1/ 390,099 1,455,069 EDO Corp. 64,875 1,453,849 Headwaters Inc./1/ 105,055 1,451,860 PS Business Parks Inc. 42,494 1,444,796 NUI Corp. 66,855 1,444,068 BankUnited Financial Corp. "A"/1/ 90,439 1,442,502 JLG Industries Inc. 178,800 1,439,340 United National Bancorp 69,737 1,435,187 Lone Star Technologies Inc./1/ 121,085 1,434,857 Actuant Corp. "A"/1/ 38,880 1,434,672 Community Bank System Inc. 48,216 1,428,640 RLI Corp. 26,582 1,426,124 Veritas DGC Inc./1/ 131,729 1,423,990 First Sentinel Bancorp Inc. 105,108 1,422,111 Bowne & Co. Inc. 142,112 1,421,120 Offshore Logistics Inc./1/ 79,006 1,418,948 First Federal Capital Corp. 72,905 1,416,544 Wausau-Mosinee Paper Corp. 153,753 1,416,065 Maverick Tube Corp./1/ 159,627 1,415,891 United Surgical Partners International Inc./1/ 64,168 1,413,621 Biosite Inc./1/ 48,702 1,411,871 Hooper Holmes Inc. 227,101 1,408,026 First Financial Corp. 29,003 1,405,195 ElkCorp 82,289 1,404,673 Shuffle Master Inc./1/ 75,403 1,403,250 Enzo Biochem Inc./1/ 97,859 1,399,384 Walter Industries Inc. 113,894 1,398,618 CARBO Ceramics Inc. 39,023 1,398,584 Littelfuse Inc./1/ 83,040 1,396,733 Umpqua Holdings Corp. 84,772 1,392,804 Apex Mortgage Capital Inc. 123,849 1,385,870 Martek Biosciences Corp./1/ 84,541 1,384,782 California Pizza Kitchen Inc./1/ 60,145 1,383,936 Aaron Rents Inc. "B" 60,133 1,383,059 CPB Inc. 29,881 1,379,606 Applied Industrial Technologies Inc. 81,383 1,379,442 Insituform Technologies Inc. "A"/1/ 96,109 1,379,068 Frontier Oil Corp. 110,650 1,372,060 AMERIGROUP Corp./1/ 40,829 1,370,221 R&G Financial Corp. "B" 62,719 1,368,529 RAIT Investment Trust 66,406 1,367,964 Datascope Corp. 50,511 1,366,828 Koger Equity Inc. 80,904 1,366,469 Burlington Coat Factory Warehouse Corp. 75,797 1,364,346 Speedway Motorsports Inc./1/ 57,806 1,361,331 Topps Co. (The)/1/ 157,404 1,356,822 Mentor Graphics Corp./1/ 277,516 1,354,278 Telik Inc./1/ 109,351 1,353,765 Glenborough Realty Trust Inc. 66,618 1,352,345 Bandag Inc. 44,236 1,349,198 CIBER Inc./1/ 232,184 1,348,989 Tompkins Trustco Inc. 31,439 1,348,733 Schweitzer-Mauduit International Inc. 63,106 1,347,313 F&M Bancorp 42,548 1,344,517 Photon Dynamics Inc./1/ 72,114 1,343,484 Schedules of Investments 49 Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------------- Greif Brothers Corp. "A" 54,779 $ 1,342,085 Superior Energy Services Inc./1/ 206,237 1,340,541 ADTRAN Inc./1/ 85,882 1,339,759 Houston Exploration Co./1/ 42,948 1,337,830 Valmont Industries Inc. 57,213 1,335,924 ChemFirst Inc. 46,405 1,334,608 Stride Rite Corp. 168,556 1,333,278 Sotheby's Holdings Inc. "A"/1/ 190,463 1,333,241 Brown Shoe Co. Inc. 74,440 1,332,476 PFF Bancorp Inc. 48,061 1,332,251 Unifi Inc./1/ 212,401 1,331,754 Jill (J.) Group Inc. (The)/1/ 76,395 1,330,801 Methode Electronics Inc. "A" 144,875 1,329,953 Sequa Corp. "A"/1/ 25,501 1,328,602 RFS Hotel Investors Inc. 120,777 1,327,339 Jarden Corp./1/ 48,863 1,326,630 GenCorp. Inc. 131,903 1,325,625 Meritage Corp./1/ 37,386 1,325,334 Incyte Genomics Inc./1/ 285,191 1,323,286 AMLI Residential Properties Trust 59,842 1,321,311 Spartech Corp. 62,417 1,320,744 Imagistics International Inc./1/ 76,084 1,320,057 SOURCECORP Inc./1/ 64,662 1,319,751 Saxon Capital Inc./1/ 119,177 1,319,289 Apogee Enterprises Inc. 120,257 1,315,612 Therasense Inc./1/ 94,094 1,313,552 CDI Corp./1/ 50,209 1,312,965 Lance Inc. 102,941 1,312,498 International Multifoods Corp./1/ 66,963 1,312,475 WMS Industries Inc./1/ 92,857 1,309,284 Mine Safety Appliances Co. 33,304 1,305,184 Community Trust Bancorp Inc. 48,489 1,304,354 Southwestern Energy Co./1/ 108,623 1,303,476 Hanger Orthopedic Group Inc./1/ 81,918 1,302,496 Power Integrations Inc./1/ 106,828 1,302,233 SPS Technologies Inc./1/ 52,125 1,299,476 Bally Total Fitness Holding Corp./1/ 130,925 1,297,467 Knight Trading Group Inc./1/ 345,396 1,295,235 Belden Inc. 96,095 1,289,595 Silicon Storage Technology Inc./1/ 328,316 1,283,716 Aeroflex Inc./1/ 254,554 1,282,952 Atrix Laboratories Inc./1/ 86,665 1,282,642 Hecla Mining/1/ 358,611 1,280,241 Chemed Corp. 41,553 1,278,586 Town & Country Trust (The) 60,756 1,277,699 Triarc Companies Inc./1/ 56,276 1,276,902 TIBCO Software Inc./1/ 340,224 1,275,840 Arrow International Inc. 39,520 1,271,358 Redwood Trust Inc. 46,476 1,270,189 Advanced Digital Information Corp./1/ 264,237 1,268,338 Wright Medical Group Inc./1/ 66,287 1,261,442 Presidential Life Corp. 87,531 1,260,446 Per-Se Technologies Inc./1/ 127,522 1,259,917 Zoran Corp./1/ 114,528 1,259,808 O'Charley's Inc./1/ 67,127 1,258,027 Korn/Ferry International/1/ 160,238 1,256,266 Advanced Neuromodulation Systems Inc./1/ 37,700 1,254,656 Russ Berrie & Co. Inc. 41,796 1,254,298 First Niagara Financial Group Inc. 39,544 1,249,195 MCG Capital Corp. 94,772 1,249,095 Getty Realty Corp. 65,438 1,248,557 Integra LifeSciences Holdings Corp./1/ 78,503 1,247,413 Westport Resources Corp./1/ 67,897 1,242,515 Investors Real Estate Trust 117,187 1,241,010 Mississippi Valley Bancshares Inc. 24,889 1,239,970 Silgan Holdings Inc./1/ 43,456 1,235,889 Scientific Games Corp. "A"/1/ 184,340 1,235,262 Boca Resorts Inc. "A"/1/ 121,058 1,234,792 Tennant Co. 38,150 1,234,153 Trammell Crow Co./1/ 124,914 1,231,652 Phillips-Van Heusen Corp. 97,738 1,231,499 Serologicals Corp./1/ 91,594 1,226,444 Hydril Co./1/ 49,145 1,222,728 AFC Enterprises Inc./1/ 60,541 1,222,323 50 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------------- Mediacom Communications Corp./1/ 227,504 $ 1,221,696 Gold Bancorp Inc. 125,520 1,217,544 Quantum DLT & Storage Group/1/ 550,330 1,216,229 Farmer Brothers Co. 3,738 1,214,857 Remington Oil & Gas Corp./1/ 86,160 1,214,856 Fremont General Corp. 247,618 1,213,328 Corixa Corp./1/ 191,346 1,211,220 Park Electrochemical Corp. 72,382 1,208,779 Newpark Resources Inc./1/ 304,850 1,207,206 Connetics Corp./1/ 129,912 1,201,686 Universal Health Realty Income Trust 46,307 1,201,667 Alpharma Inc. "A" 125,118 1,201,133 Robert Mondavi Corp. (The) "A"/1/ 39,425 1,200,886 Fidelity Bankshares Inc. 67,022 1,199,694 Bright Horizons Family Solutions Inc./1/ 42,920 1,198,756 GlobeSpanVirata Inc./1/ 506,593 1,195,559 Griffon Corp./1/ 112,198 1,194,909 ScanSource Inc./1/ 20,567 1,193,914 Berry Petroleum Co. "A" 70,079 1,190,642 West Pharmaceutical Services Inc. 55,541 1,189,688 Mid Atlantic Realty Trust 73,927 1,185,050 InFocus Corp./1/ 155,399 1,184,140 Flagstar Bancorp Inc. 57,164 1,183,295 Stewart & Stevenson Services Inc. 120,775 1,182,750 U.S. Restaurant Properties Inc. 82,980 1,182,465 Omega Financial Corp. 35,008 1,181,520 Integra Bank Corp. 65,534 1,180,923 Odyssey Re Holdings Corp. 71,056 1,180,240 Analogic Corp. 28,160 1,179,622 Inhale Therapeutic Systems Inc./1/ 234,224 1,177,678 Genesco Inc./1/ 85,308 1,177,250 Electronics Boutique Holdings Corp./1/ 42,845 1,176,095 Cato Corp. "A" 61,927 1,175,374 United Community Financial Corp. 132,633 1,173,802 ExpressJet Holdings Inc./1/ 127,347 1,171,592 Pre-Paid Legal Services Inc./1/ 58,856 1,170,057 Saga Communications Inc./1/ 63,229 1,169,737 Global Industries Ltd./1/ 282,571 1,167,018 Pathmark Stores Inc./1/ 127,542 1,167,009 Heidrick & Struggles International Inc./1/ 76,784 1,166,349 Anworth Mortgage Asset Corp. 95,579 1,165,108 Kaman Corp. "A" 95,058 1,164,461 Resources Connection Inc./1/ 80,774 1,163,953 Triad Guaranty Inc./1/ 33,405 1,163,162 INAMED Corp./1/ 50,551 1,162,673 Rollins Inc. 59,864 1,161,362 Hancock Fabrics Inc. 71,863 1,160,587 Franklin Electric Co. Inc. 27,138 1,160,149 Tier Technologies Inc. "B"/1/ 61,268 1,159,191 Veeco Instruments Inc./1/ 107,268 1,158,494 Kramont Realty Trust 78,089 1,155,717 DuPont Photomasks Inc./1/ 50,591 1,152,463 Cable Design Technologies Corp./1/ 188,135 1,151,386 PracticeWorks Inc./1/ 66,371 1,148,218 VitalWorks Inc./1/ 157,768 1,146,973 Landauer Inc. 34,582 1,146,393 Right Management Consultants Inc./1/ 46,494 1,145,612 Genta Inc./1/ 178,160 1,143,787 Vector Group Ltd. 90,699 1,141,900 Oriental Financial Group Inc. 51,606 1,135,332 NorthWestern Corp. 116,237 1,134,473 Universal Compression Holdings Inc./1/ 69,930 1,132,866 Photronics Inc./1/ 111,978 1,126,499 Tetra Technologies Inc./1/ 55,787 1,124,108 ArthroCare Corp./1/ 92,705 1,123,585 Old Second Bancorp Inc. 29,416 1,123,103 Local Financial Corp./1/ 81,273 1,122,380 Parkway Properties Inc. 33,152 1,121,864 Schedules of Investments 51 Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------------- Simmons First National Corp. "A" 30,048 $ 1,117,185 Manhattan Associates Inc./1/ 82,291 1,112,574 Cubic Corp. 65,440 1,112,480 Tularik Inc./1/ 162,265 1,111,515 Atwood Oceanics Inc./1/ 37,973 1,110,710 Pegasus Solutions Inc./1/ 105,212 1,109,987 Nautica Enterprises Inc./1/ 106,605 1,108,692 Irwin Financial Corp. 65,199 1,108,383 Medicines Co. (The)/1/ 100,732 1,105,836 First Community Bancshares Inc. 37,507 1,104,956 Movie Gallery Inc./1/ 73,364 1,101,194 Alderwoods Group Inc./1/ 169,279 1,100,313 Alloy Inc./1/ 132,332 1,099,679 WebEx Communications Inc./1/ 98,223 1,099,115 ENDOcare Inc./1/ 76,750 1,098,292 Penn Virginia Corp. 33,894 1,098,166 Stillwater Mining Co./1/ 182,968 1,097,808 Labor Ready Inc./1/ 173,603 1,097,171 Genesee & Wyoming Inc. "A"/1/ 49,243 1,095,657 Marcus Corp. 83,605 1,095,226 Conceptus Inc./1/ 71,494 1,093,858 Oakley Inc./1/ 108,786 1,093,299 Washington Trust Bancorp Inc. 55,273 1,091,089 DIMON Inc. 174,804 1,090,777 United Therapeutics Inc./1/ 66,267 1,090,092 American Tower Corp./1/ 685,318 1,089,656 Watts Industries Inc. "A" 66,406 1,089,058 Avid Technology Inc./1/ 105,609 1,087,773 AC Moore Arts & Crafts Inc./1/ 51,450 1,087,138 Guitar Center Inc./1/ 57,864 1,086,686 Universal Forest Products Inc. 57,730 1,086,479 Jakks Pacific Inc./1/ 97,713 1,086,471 Wet Seal Inc. "A"/1/ 108,383 1,083,830 Noven Pharmaceuticals Inc./1/ 88,068 1,077,952 Magnum Hunter Resources Inc./1/ 205,252 1,077,570 ANSYS Inc./1/ 62,532 1,077,426 Zoll Medical Corp./1/ 35,438 1,077,315 Raytech Corp./1/ 176,362 1,074,045 Clark/Bardes Inc./1/ 60,135 1,069,802 Intermagnetics General Corp./1/ 62,603 1,068,633 Tanox Inc./1/ 101,772 1,068,606 Helix Technology Corp. 110,710 1,068,351 K-Swiss Inc. "A" 49,858 1,065,465 Select Medical Corp./1/ 74,468 1,064,892 Interland Inc./1/ 519,406 1,064,782 Equity Inns Inc. 171,732 1,064,738 Carpenter Technology Corp. 81,414 1,058,382 Steak n Shake Company (The)/1/ 96,212 1,058,332 Trimble Navigation Ltd./1/ 106,886 1,058,171 Gardner Denver Inc./1/ 67,227 1,056,136 Caraustar Industries Inc. 111,858 1,045,872 PolyMedica Corp./1/ 39,439 1,041,978 Bank of Granite Corp. 57,830 1,040,940 Immunomedics Inc. 173,466 1,040,796 Saul Centers Inc. 44,786 1,039,931 United Fire & Casualty Co. 30,573 1,038,871 Central Garden & Pet Co./1/ 60,687 1,038,355 Websense Inc./1/ 89,412 1,038,073 New England Business Service Inc. 49,041 1,037,217 Kmart Corp./1/ 2,114,948 1,036,325 Watsco Inc. 72,451 1,036,049 Mykrolis Corp./1/ 168,251 1,034,744 CT Communications Inc. 71,316 1,034,082 TeleTech Holdings Inc./1/ 165,289 1,033,056 Arris Group Inc./1/ 277,543 1,026,909 Agile Software Corp./1/ 160,035 1,025,824 Isle of Capri Casinos Inc./1/ 61,411 1,024,335 Lindsay Manufacturing Co. 42,267 1,024,129 Kopin Corp./1/ 294,200 1,023,816 Magna Entertainment Corp. "A"/1/ 187,750 1,020,985 Denbury Resources Inc./1/ 100,299 1,020,041 Intuitive Surgical Inc./1/ 127,616 1,019,652 Legato Systems Inc./1/ 369,374 1,018,734 Symyx Technologies Inc./1/ 97,205 1,017,736 Range Resources Corp./1/ 217,420 1,017,526 Swift Energy Co./1/ 97,741 1,016,506 52 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------------- Independent Bank Corp. (Massachusetts) 51,101 $ 1,015,888 Royal Gold Inc. 53,095 1,012,522 West Coast Bancorp 66,725 1,010,217 Keystone Property Trust 60,679 1,009,699 Sturm Ruger & Co. Inc. 82,556 1,007,183 Playtex Products Inc./1/ 118,279 1,006,554 Silicon Image Inc./1/ 246,006 1,006,165 Beverly Enterprises Inc./1/ 415,688 1,005,965 Ventana Medical Systems Inc./1/ 53,701 1,005,820 ValueVision Media Inc./1/ 85,527 1,005,798 MedQuist Inc./1/ 42,854 1,005,698 Spanish Broadcasting System Inc. "A"/1/ 153,170 1,003,264 United Auto Group Inc./1/ 71,582 1,002,864 URS Corp./1/ 60,461 1,001,839 Fleetwood Enterprises Inc. 148,402 1,000,229 Federal Agricultural Mortgage Corp./1/ 33,747 995,874 Westcorp Inc. 49,793 995,860 CoStar Group Inc./1/ 55,245 994,410 Genesis Microchip Inc./1/ 129,597 994,009 Medford Bancorp Inc. 28,392 992,300 Cohu Inc. 87,768 991,778 Intertrust Technologies Corp./1/ 310,802 991,458 Medarex Inc./1/ 295,451 989,761 Fisher Communications Inc. 21,013 987,611 American Woodmark Corp. 19,422 985,472 GulfMark Offshore Inc./1/ 56,915 984,629 Capital City Bank Group Inc. 29,771 984,229 Myers Industries Inc. 78,392 982,252 Fleming Companies Inc. 196,342 981,710 Crown American Realty Trust 106,618 979,819 Sterling Bancorp 36,909 979,196 Asyst Technologies Inc./1/ 162,086 978,999 Daisytek International Corp./1/ 75,111 976,443 Corporate Office Properties Trust 71,885 974,042 Great Lakes REIT Inc. 55,734 973,673 Peoples Holding Co. 23,813 970,380 eSpeed, Inc./1/ 95,434 969,609 Advanta Corp. "B" 93,852 969,491 Key Productions Co. Inc./1/ 59,785 968,517 Centex Construction Products Inc. 27,101 967,506 StarTek Inc./1/ 43,953 967,406 Novastar Financial Inc. 44,160 964,896 Handleman Co./1/ 105,242 962,964 Second Bancorp Inc. 35,931 960,436 IBERIABANK Corp. 25,508 959,866 CCBT Financial Companies Inc. 36,606 957,979 4Kids Entertainment Inc./1/ 40,349 957,482 E.piphany Inc./1/ 265,819 956,948 Bank Mutual Corp. 47,112 953,547 Cerus Corp./1/ 57,161 952,874 3TEC Energy Corp./1/ 66,479 950,650 First Republic Bank/1/ 43,683 950,105 J&J Snack Foods Corp./1/ 25,766 949,477 Del Monte Foods Co./1/ 116,060 948,210 Exelixis Inc./1/ 191,280 946,836 Arctic Cat Inc. 67,778 946,181 Herley Industries Inc./1/ 50,663 940,812 Powerwave Technologies Inc./1/ 277,523 940,803 Merit Medical Systems Inc./1/ 48,705 940,494 Standard Microsystems Corp./1/ 61,459 939,155 USB Holding Co. Inc. 50,877 937,663 Information Holdings Inc./1/ 43,243 936,211 National Western Life Insurance Company "A"/1/ 9,170 935,340 VCA Antech Inc./1/ 75,792 935,273 First Essex Bancorp Inc. 28,286 934,852 PTEK Holdings Inc./1/ 200,257 933,198 WSFS Financial Corp. 33,326 933,128 Verity Inc./1/ 93,715 932,464 Churchill Downs Inc. 25,535 932,027 Wind River Systems Inc./1/ 289,402 931,874 Standex International Corp. 45,925 931,359 Troy Financial Corp. 35,682 930,587 City Bank 32,149 930,392 Virginia Financial Group Inc. 30,948 929,368 Actel Corp./1/ 89,328 929,011 Sola International Inc./1/ 92,258 927,193 Schedules of Investments 53 Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------------- RTI International Metals Inc./1/ 88,257 $ 926,699 Zenith National Insurance Corp. 35,020 925,228 Stoneridge Inc./1/ 54,410 924,970 Deltic Timber Corp. 42,057 924,413 Cascade Natural Gas Corp. 46,882 923,575 webMethods Inc./1/ 191,207 923,530 Echelon Corp./1/ 106,054 922,670 Pioneer-Standard Electronics Inc. 127,379 922,224 Systems & Computer Technology Corp./1/ 131,465 920,255 MSC.Software Corp./1/ 107,983 920,015 MIM Corp./1/ 97,278 919,277 Coachmen Industries Inc. 61,032 916,090 Navigant Consulting Co./1/ 165,450 913,284 FuelCell Energy Inc./1/ 144,926 913,034 OceanFirst Financial Corp. 44,291 912,395 Input/Output Inc./1/ 190,019 910,191 Cleveland-Cliffs Inc. 37,743 907,719 NACCO Industries Inc. 22,795 907,241 Interwoven Inc./1/ 449,850 903,299 Forrester Research Inc./1/ 60,323 903,035 First Indiana Corp. 49,257 902,881 NCO Group Inc./1/ 79,262 902,794 Great Southern Bancorp Inc. 24,096 902,636 Ennis Business Forms Inc. 69,042 900,998 Planar Systems Inc./1/ 56,443 899,701 Eon Labs Inc./1/ 41,691 899,692 XM Satellite Radio Holdings Inc. "A"/1/ 230,032 897,125 Prima Energy Corp./1/ 42,777 897,034 Chattem Inc./1/ 21,943 895,933 Financial Institutions Inc. 32,980 895,407 Sterling Financial Corp. (Washington)/1/ 49,325 894,262 FBL Financial Group Inc. "A" 48,459 894,069 LaSalle Hotel Properties 71,415 892,688 Alexion Pharmaceuticals Inc./1/ 76,954 891,897 Enterasys Networks Inc./1/ 685,279 890,863 Bel Fuse Inc. "B" 41,502 890,218 BioMarin Pharmaceutical Inc./1/ 153,744 890,178 IDX Systems Corp./1/ 71,719 890,033 Nabi Biopharmaceuticals/1/ 163,924 888,894 Camden National Corp. 34,153 887,978 Gene Logic Inc./1/ 114,213 887,435 Chesapeake Corp. 59,384 887,197 Century Business Services Inc./1/ 334,084 885,323 SERENA Software Inc./1/ 73,745 884,940 Proxim Corp. "A"/1/ 505,596 884,793 Community Banks Inc. 32,945 884,244 Banner Corp. 43,740 883,548 Urstadt Biddle Properties Inc. "A" 74,558 883,512 Barnes Group Inc. 43,923 882,413 LTX Corp./1/ 193,263 881,279 Forward Air Corp./1/ 48,683 881,162 Pharmacopeia Inc./1/ 99,425 880,906 RailAmerica Inc./1/ 121,047 877,591 Valhi Inc. 89,135 875,306 Farmers Capital Bank Corp. 26,131 871,991 Digital River Inc./1/ 113,659 871,765 Diversa Corp./1/ 102,159 871,416 Central Vermont Public Service Corp. 49,378 870,534 AMC Entertainment Inc./1/ 117,577 870,070 First Busey Corp. "A" 38,333 869,009 First Community Bancorp 30,008 868,432 1st Source Corp. 61,452 865,859 MatrixOne Inc./1/ 199,283 864,888 CNA Surety Corp. 65,482 864,362 Citizens Inc./1/ 96,068 862,691 CKE Restaurant Inc./1/ 215,610 862,440 Unova Inc./1/ 175,265 862,304 Peoples Bancorp Inc. 33,395 858,252 PennRock Financial Services Corp. 29,516 855,964 Multimedia Games Inc./1/ 43,459 855,751 Impath Inc./1/ 66,209 854,758 Fidelity National Information Solutions Inc./1/ 55,794 853,090 Innkeepers USA Trust 106,723 852,717 54 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------------- PAREXEL International Corp./1/ 100,295 $ 852,508 Oneida Ltd. 61,199 852,502 Pope & Talbot Inc. 66,301 851,968 Palm Harbor Homes Inc./1/ 73,151 849,356 North Pittsburgh Systems Inc. 63,650 848,455 Capstead Mortgage Corp. 41,032 848,131 Seacoast Banking Corp. of Florida 44,108 845,991 MTS Systems Corp. 89,340 845,960 United Online Inc./1/ 88,137 845,234 Riggs National Corp. 59,115 844,753 7-Eleven Inc./1/ 98,287 842,320 SY Bancorp Inc. 24,138 838,313 CorVel Corp./1/ 27,954 837,781 Transaction Systems Architects Inc. "A"/1/ 134,724 835,289 ESS Technology Inc./1/ 135,665 834,340 Connecticut Water Service Inc. 32,524 833,265 Ameristar Casinos Inc./1/ 43,919 832,704 Airtran Holdings Inc./1/ 267,301 831,306 Salem Communications Corp. "A"/1/ 37,008 829,719 JDA Software Group Inc./1/ 118,664 829,461 Sports Authority Inc. (The)/1/ 138,800 828,636 Dendrite International Inc./1/ 131,294 828,465 Peapack-Gladstone Financial Corp. 12,736 827,840 Consolidated Graphics Inc./1/ 47,093 826,482 Allos Therapeutics Inc./1/ 97,453 826,401 FreeMarkets Inc./1/ 166,435 825,518 Advanced Marketing Services Inc. 59,563 821,374 MTR Gaming Group Inc./1/ 89,143 821,007 Calgon Carbon Corp. 141,987 820,685 Main Street Banks Inc. 44,203 819,082 Southern Peru Copper Corp. 59,732 818,926 Aeropostale Inc./1/ 53,029 816,647 United Industrial Corp. 40,486 815,793 Allegiant Bancorp Inc. 50,175 815,344 First National Corp. 29,540 815,304 State Auto Financial Corp. 53,817 814,789 Molecular Devices Corp./1/ 64,900 811,899 BancFirst Corp. 16,476 810,949 Lightbridge Inc./1/ 119,904 809,472 Haverty Furniture Companies Inc. 64,679 808,487 Lakeland Bancorp Inc. 47,256 805,715 Aviall Inc./1/ 78,999 805,000 Hologic Inc./1/ 81,769 801,336 Harvest Natural Resources Inc./1/ 147,154 799,046 Micromuse Inc./1/ 316,944 798,699 Vignette Corp./1/ 997,009 798,604 Gibraltar Steel Corp. 35,868 798,422 Retek Inc./1/ 221,626 797,854 Standard Commercial Corp. 47,640 797,494 Union Bankshares Corp. 31,988 797,461 Phoenix Technologies Ltd./1/ 109,915 796,884 Gentiva Health Services Inc. 96,269 796,145 Prosperity Bancshares Inc. 46,569 793,070 McGrath Rentcorp 38,809 790,539 PEC Solutions Inc./1/ 35,510 790,453 UniFirst Corp. 33,134 789,915 Octel Corp. 41,762 788,884 Primedia Inc./1/ 566,561 787,520 Port Financial Corp. 19,674 787,157 Angelica Corp. 36,605 786,641 Hickory Tech Corp. 59,368 786,626 Centennial Bancorp 90,515 785,670 Cirrus Logic Inc./1/ 307,898 785,140 Lithia Motors Inc. "A"/1/ 46,144 784,909 Priceline.com Inc./1/ 536,830 783,772 Anaren Microwave Inc./1/ 95,338 783,678 Gabelli Asset Management Inc. "A"/1/ 26,409 783,027 Kadant Inc./1/ 57,526 776,601 Robbins & Myers Inc. 41,636 776,511 Arrow Financial Corp. 27,054 775,097 Ultratech Stepper Inc./1/ 95,787 774,917 Versicor Inc./1/ 90,591 771,835 MEMC Electronics Materials Inc./1/ 232,331 771,339 Schedules of Investments 55 Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------------- OMNOVA Solutions Inc./1/ 168,034 $ 771,276 Tesoro Petroleum Corp./1/ 274,056 767,357 Strattec Security Corp./1/ 15,032 766,933 CuraGen Corp./1/ 181,736 766,926 Graphic Packaging International Corp./1/ 96,066 766,607 Dura Automotive Systems Inc./1/ 62,565 766,421 La Jolla Pharmaceutical Co./1/ 179,594 765,070 Urban Outfitters Inc./1/ 31,411 762,973 New Focus Inc./1/ 282,425 762,548 Cash America International Inc. 93,038 761,981 Endo Pharmaceuticals Holdings Inc./1/ 89,216 761,012 FNB Corp. 24,748 760,259 Monolithic System Technology Inc./1/ 75,979 759,790 First Bancorp North Carolina 30,694 758,449 First Place Financial Corp. 54,229 758,121 Oak Technology Inc./1/ 237,055 753,835 Maxygen Inc./1/ 121,338 753,509 Informatica Corp./1/ 242,830 752,773 Buckeye Technologies Inc./1/ 102,289 751,824 Antigenics Inc./1/ 93,018 751,585 Midwest Banc Holdings Inc. 39,250 749,283 Integral Systems Inc./1/ 39,100 747,201 Trex Co. Inc./1/ 27,289 746,081 TBC Corp./1/ 71,879 745,385 Ameron International Corp. 15,150 745,228 Pinnacle Entertainment Inc./1/ 102,041 744,899 Vital Sign Inc. 25,068 744,770 Eclipsys Corp./1/ 146,580 744,626 NBC Capital Corp. 29,656 744,366 MGI Pharma Inc./1/ 106,288 744,016 Firstfed America Bancorp Inc. 30,858 743,369 Wild Oats Markets Inc./1/ 81,708 741,909 Possis Medical Inc./1/ 72,596 741,205 EPIQ Systems Inc./1/ 41,969 741,173 Granite State Bankshares Inc. 21,933 741,116 On Assignment Inc./1/ 89,571 740,752 Rock-Tenn Co. "A" 47,752 736,336 Lydall Inc./1/ 62,331 735,506 Bio-Technology General Corp./1/ 247,969 733,988 American Healthways Inc./1/ 45,357 733,423 Interface Inc. "A" 185,064 732,853 VIB Corp./1/ 48,938 732,602 Quicksilver Resources Inc./1/ 40,665 731,970 Middlesex Water Co. 32,510 731,475 BSB Bancorp Inc. 36,702 730,737 ScanSoft Inc./1/ 220,829 728,736 Gorman-Rupp Co. (The) 31,194 726,820 Nuevo Energy Co./1/ 66,665 726,649 Parker Drilling Co./1/ 329,508 724,918 Tejon Ranch Co./1/ 29,711 724,651 World Fuel Services Corp. 37,534 724,406 Pixelworks Inc./1/ 140,504 723,596 Oil States International Inc./1/ 72,217 722,170 Cascade Bancorp 52,930 721,965 Stepan Co. 26,853 721,003 BE Aerospace Inc./1/ 151,229 719,850 Pericom Semiconductor Corp./1/ 83,446 719,305 Keystone Automotive Industries Inc./1/ 43,591 719,252 Finish Line Inc. (The)/1/ 79,735 719,210 CFS Bancorp Inc. 50,936 718,198 ManTech International Corp. "A"/1/ 30,586 717,578 Quaker City Bancorp Inc./1/ 21,572 715,543 Crawford & Co. "B" 112,713 711,219 Skyline Corp. 26,129 710,448 Esperion Therapeutics Inc./1/ 124,104 709,875 F5 Networks Inc./1/ 94,022 709,866 Holly Corp. 41,698 708,032 Liberate Technologies/1/ 453,346 707,220 St. Francis Capital Corp. 30,657 705,418 Flushing Financial Corp. 42,272 705,097 Boykin Lodging Co. 73,132 703,530 FalconStor Software Inc./1/ 144,396 703,209 Manugistics Group Inc./1/ 251,842 702,639 SWS Group Inc. 57,290 701,803 Magma Design Automation Inc./1/ 78,508 700,291 Cray Inc./1/ 177,280 700,256 56 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------------- Correctional Properties Trust 30,443 $ 700,189 Shenandoah Telecommunications Co. 13,761 698,233 Excel Technology Inc./1/ 37,043 696,779 Astec Industries Inc./1/ 64,414 694,383 Ramco-Gershenson Properties Trust 35,299 693,978 Blair Corp. 33,890 693,050 Intertan Inc./1/ 99,096 691,690 Energy Conversion Devices Inc./1/ 63,439 688,313 TALX Corp. 52,225 687,803 Microsemi Corp./1/ 122,532 687,405 SonoSite Inc./1/ 59,711 685,482 MemberWorks Inc./1/ 39,306 684,711 Power-One Inc./1/ 228,805 681,839 SJW Corp. 8,729 680,862 Mobile Mini Inc./1/ 52,548 680,497 Mission West Properties Inc. 61,329 679,525 CCC Information Services Group Inc./1/ 51,961 679,130 American National Bankshares Inc. 24,682 677,768 Talk America Holdings Inc./1/ 292,138 677,760 HEICO Corp. 59,837 677,355 Avigen Inc./1/ 85,209 675,707 Aaon Inc./1/ 39,910 675,277 NeoPharm Inc./1/ 47,869 674,953 Tenneco Automotive Inc./1/ 160,248 674,644 German American Bancorp 39,548 672,316 Oregon Steel Mills Inc./1/ 109,390 669,467 Keynote Systems Inc./1/ 101,980 667,969 Metro One Telecommunications Inc./1/ 78,577 667,905 Cobalt Corp./1/ 39,925 666,747 American Physicians Capital Inc./1/ 39,497 665,919 Footstar Inc./1/ 85,355 665,769 Comstock Resources Inc./1/ 96,051 662,752 Elizabeth Arden Inc./1/ 55,234 662,256 AtheroGenics Inc./1/ 105,732 661,882 Energy Partners Ltd./1/ 81,302 661,798 Maxwell Shoe Co. Inc. "A"/1/ 58,144 659,934 U.S. Industries Inc./1/ 280,713 659,676 Midway Games Inc./1/ 120,372 659,639 General Communication Inc. "A"/1/ 175,391 659,470 Silicon Graphics Inc./1/ 803,987 659,269 Praecis Pharmaceuticals Inc./1/ 219,443 656,135 ILEX Oncology Inc./1/ 137,729 654,213 Citizens First Bancorp Inc. 36,398 654,072 Renaissance Learning Inc./1/ 46,009 653,788 Learning Tree International Inc./1/ 44,352 651,531 REMEC Inc./1/ 190,962 651,180 MRO Software Inc./1/ 74,608 649,090 Insignia Financial Group Inc./1/ 82,579 648,245 Exact Sciences Corp./1/ 48,417 647,335 iDine Rewards Network Inc./1/ 69,950 647,037 SeaChange International Inc./1/ 94,080 646,330 Immucor Inc./1/ 39,769 646,246 RSA Security Inc./1/ 191,510 643,474 Global Imaging Systems Inc./1/ 33,989 641,712 InterCept Inc./1/ 64,873 641,594 Tuesday Morning Corp./1/ 35,171 640,464 National Healthcare Corp./1/ 35,673 640,330 Terayon Communication Systems Inc./1/ 275,905 640,100 Friedman Billings Ramsey Group Inc. "A"/1/ 63,131 639,517 Hawthorne Financial Corp./1/ 24,224 639,514 Movado Group Inc. 39,308 638,755 TriZetto Group Inc. (The)/1/ 128,234 638,605 Entrust Inc./1/ 203,224 638,123 Salix Pharmaceuticals Ltd./1/ 75,604 638,098 GBC Bancorp 32,774 636,471 Insurance Auto Auctions Inc./1/ 42,115 636,400 Gladstone Capital Corp. 37,663 635,751 Array BioPharma Inc./1/ 81,485 634,768 eResearch Technology Inc./1/ 34,400 634,680 Nash Finch Co. 46,643 634,345 TRC Companies Inc./1/ 36,884 632,561 Schedules of Investments 57 Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------------- Quaker Chemical Corp. 32,723 $ 629,591 Stamps.com Inc./1/ 148,682 628,925 Kulicke & Soffa Industries Inc./1/ 209,033 627,099 Skechers U.S.A. Inc. "A"/1/ 65,582 625,652 Advanced Energy Industries Inc./1/ 70,287 625,554 USG Corp./1/ 156,023 624,092 Intrado Inc./1/ 64,548 623,534 Columbia Banking System Inc./1/ 56,284 623,064 Allen Telecom Inc./1/ 116,610 622,697 Bryn Mawr Bank Corp. 15,761 622,244 Berkshire Hills Bancorp Inc. 26,446 621,481 Orbital Sciences Corp./1/ 182,747 621,340 Cell Therapeutics Inc./1/ 140,841 619,700 II-VI Inc./1/ 46,355 618,839 Hibbet Sporting Goods Inc./1/ 29,710 616,482 Tanger Factory Outlet Centers Inc. 22,027 616,315 LSI Industries Inc. 60,663 615,123 Encore Acquisition Co./1/ 37,338 614,210 Frontier Airlines Inc./1/ 125,267 611,303 Western Wireless Corp. "A"/1/ 226,219 610,791 SRA International Inc. "A"/1/ 21,318 610,334 Kenneth Cole Productions "A"/1/ 30,050 610,015 Ryerson Tull Inc. 94,684 608,818 Champion Enterprises Inc./1/ 206,706 607,716 SEMCO Energy Inc. 78,096 607,587 Lawson Products Inc. 20,818 606,845 Golden Telecom Inc./1/ 50,306 606,187 WFS Financial Inc./1/ 29,222 606,064 Aksys Ltd./1/ 108,014 605,959 Building Materials Holdings Corp./1/ 51,766 605,662 Interchange Financial Services Corp. 36,426 602,850 VIVUS Inc./1/ 139,496 602,623 Vicor Corp./1/ 84,233 602,266 Pilgrim's Pride Corp. "B" 64,729 601,980 K2 Inc./1/ 76,168 601,727 Tyler Technologies Inc./1/ 136,563 600,877 Buckle Inc. (The)/1/ 29,850 599,985 Concurrent Computer Corp./1/ 262,516 598,536 Infonet Services Corp. "B"/1/ 266,162 596,203 SonicWALL Inc./1/ 216,711 595,955 Great Atlantic & Pacific Tea Co./1/ 70,939 594,469 Ultimate Electronics Inc./1/ 46,598 594,125 First State Bancorp 24,069 593,301 Interpore International/1/ 73,167 592,653 ValueClick Inc./1/ 271,740 592,393 ITLA Capital Corp./1/ 19,610 592,026 Alliance Imaging Inc./1/ 49,494 591,948 Courier Corp. 15,575 591,834 Exult Inc./1/ 200,608 591,794 American Pharmaceutical Partners Inc./1/ 36,115 589,758 LSB Bancshares Inc. 35,871 589,719 X-Rite Inc. 76,174 588,825 Bassett Furniture Industries Inc. 42,736 588,475 Racing Champions Corp./1/ 35,995 588,158 Lufkin Industries Inc. 23,882 587,497 Cubist Pharmaceuticals Inc./1/ 114,745 586,347 Kansas City Life Insurance Co. 15,493 586,255 Integrated Defense Technologies Inc./1/ 29,759 586,252 Northwest Bancorp Inc. 45,947 584,905 SPSS Inc./1/ 50,497 584,250 Radiant Systems Inc./1/ 72,993 583,944 Central Coast Bancorp/1/ 31,555 583,452 CTS Corp. 126,522 582,001 Advisory Board Co. (The)/1/ 19,646 581,915 Three Rivers Bancorp Inc. 36,294 580,704 PennFed Financial Services Inc. 21,114 580,424 Riviana Foods Inc. 25,327 579,988 Vitesse Semiconductor Corp./1/ 852,133 579,450 CNET Networks Inc./1/ 526,457 579,103 Computer Network Technology Corp./1/ 115,339 579,002 National Presto Industries Inc. 19,956 576,329 Electro Rent Corp./1/ 59,405 575,040 58 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------------- Luminex Corp./1/ 81,615 $ 574,570 Regent Communications Inc./1/ 113,084 574,467 Artisan Components Inc./1/ 62,883 572,801 Sharper Image Corp./1/ 29,957 572,778 Daktronics Inc./1/ 59,407 569,713 Lexicon Genetics Inc./1/ 141,958 569,252 Capitol Bancorp Ltd. 32,653 568,815 Texas Biotech Corp./1/ 185,669 568,147 Raindance Communications Inc./1/ 183,565 567,216 aaiPharma Inc./1/ 47,203 566,011 Centene Corp./1/ 21,205 565,961 Tweeter Home Entertainment Group Inc./1/ 81,878 564,958 CIRCOR International Inc. 42,151 564,823 Playboy Enterprises Inc. "B"/1/ 59,068 564,690 MainSource Financial Group Inc. 23,731 564,560 AstroPower Inc./1/ 79,449 564,088 ProBusiness Services Inc./1/ 89,108 564,054 Oxford Industries Inc. 25,745 563,816 Safeguard Scientifics Inc./1/ 506,908 562,668 Steven Madden Ltd./1/ 39,072 562,637 Boston Communications Group Inc./1/ 54,412 561,532 Southwest Water Co. 39,299 560,404 Midland Co. (The) 33,180 558,419 Associated Estates Realty Corp. 68,935 558,373 Cascade Corp./1/ 39,723 558,108 West Marine Inc./1/ 43,855 557,397 Compucom Systems Inc./1/ 96,767 557,378 Superior Financial Corp. 29,607 556,612 White Electronic Designs Corp./1/ 74,304 556,537 Theragenics Corp./1/ 126,303 555,733 Hanmi Financial Corp./1/ 37,012 555,180 Penn Engineering & Manufacturing Corp. 49,534 554,781 OmniVision Technologies Inc./1/ 84,068 554,008 State Bancorp Inc. 31,121 552,398 Immunogen Inc./1/ 170,373 552,009 Brush Engineered Materials Inc./1/ 70,556 550,337 Southwest Bancorp Inc. 21,835 549,150 Unitil Corp. 20,165 547,480 Friedman's Inc. 70,294 546,887 Humboldt Bancorp 45,588 546,144 Boston Beer Co. Inc. "A"/1/ 39,252 545,603 First Oak Brook Bancshares "A" 18,274 543,286 TriCo Bancshares 21,461 542,963 Stein Mart Inc./1/ 92,694 541,333 General Cable Corp. 140,468 540,802 Navigant International Inc./1/ 51,367 539,354 ABC Bancorp 41,959 537,914 Impax Laboratories Inc./1/ 110,624 537,633 Healthcare Services Group Inc./1/ 39,345 536,666 CoorsTek Inc./1/ 35,736 536,040 Osmonics Inc./1/ 45,018 535,714 Radiologix Inc./1/ 83,212 532,557 Hollywood Casino Corp. "A"/1/ 43,940 530,795 Wabash National Corp. 97,947 529,893 Baldwin & Lyons Inc. "B" 24,229 529,646 Nature's Sunshine Products Inc. 48,825 528,775 Material Sciences Corp./1/ 43,350 527,570 Universal Electronics Inc./1/ 58,656 524,971 Orthologic Corp./1/ 135,445 524,145 NL Industries Inc. 36,072 523,405 Powell Industries Inc./1/ 27,795 522,546 Macatawa Bank Corp. 28,350 522,491 Dave & Buster's Inc./1/ 46,569 522,038 BKF Capital Group Inc./1/ 24,761 521,962 Drexler Technology Corp./1/ 35,825 520,895 Cole National Corp./1/ 41,389 519,432 Winston Hotels Inc. 71,650 518,746 Charles River Associates Inc./1/ 31,207 518,036 Cholestech Corp./1/ 49,785 516,270 Buca Inc./1/ 64,484 515,872 AAR Corp. 108,551 515,615 Meridian Medical Technologies Inc./1/ 14,339 515,487 Schedules of Investments 59 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------------- Ducommun Inc./1/ 29,236 $ 514,846 Lakeland Financial Corp. 21,659 513,102 Quixote Corp. 27,762 512,209 Volt Information Sciences Inc./1/ 33,797 512,025 Applied Films Corporation/1/ 46,794 511,926 CSS Industries Inc./1/ 14,196 511,908 Butler Manufacturing Co. 23,646 510,754 First Horizon Pharmaceutical Corp./1/ 94,505 510,327 Prime Medical Service Inc./1/ 55,223 510,205 Alexander's Inc./1/ 8,359 509,899 Young Broadcasting Inc. "A"/1/ 58,811 509,891 Bei Technologies Inc. 46,267 508,937 Resource America Inc. "A" 63,574 508,592 PetroQuest Energy Inc./1/ 114,747 507,182 Gray Television Inc. "A" 37,694 506,984 Financial Industries Corp. 33,213 506,830 CoBiz Inc. 31,472 506,699 UAL Corp./1/ 236,760 506,666 Marvel Enterprises Inc./1/ 72,198 505,386 Vail Resorts Inc./1/ 35,684 505,285 Gart Sports Co./1/ 26,712 504,055 Pacific Union Bank/1/ 44,960 504,002 Medical Staffing Network Holdings Inc./1/ 33,149 502,870 Foamex International Inc./1/ 91,414 502,777 Carreker Corp./1/ 81,906 502,084 Bostonfed Bancorp Inc. 16,726 501,613 Whitehall Jewellers Inc./1/ 47,492 499,616 Columbia Laboratories Inc./1/ 110,994 499,473 Audiovox Corp. "A"/1/ 71,093 497,580 Integrated Electrical Services Inc./1/ 132,763 496,534 Santander BanCorp 35,954 496,165 Guilford Pharmaceuticals Inc./1/ 102,485 496,027 Encore Wire Corp./1/ 56,348 495,862 Computer Horizons Corp./1/ 133,197 495,493 C-COR.net Corp./1/ 133,498 495,278 CB Bancshares Inc. 14,078 494,419 Young Innovations Inc./1/ 18,427 494,212 OraSure Technologies Inc./1/ 111,205 493,639 Viasat Inc./1/ 78,229 492,843 Sizeler Property Investors Inc. 48,903 491,964 OSI Systems Inc./1/ 28,423 491,860 First of Long Island Corp. 14,777 491,335 WatchGuard Technologies Inc./1/ 111,568 490,899 Children's Place Retail Stores Inc. (The)/1/ 48,477 489,618 Department 56 Inc./1/ 46,844 489,520 Penwest Pharmaceuticals Co./1/ 58,713 489,079 Woodhead Industries Inc. 44,354 488,781 Comfort Systems USA Inc./1/ 160,577 488,154 D&K Healthcare Resources Inc. 54,431 487,157 Quidel Corp./1/ 108,899 486,779 Zomax Inc./1/ 124,696 486,314 LTC Properties Inc. 59,831 485,828 POZEN Inc./1/ 95,719 485,295 Universal American Financial Corp./1/ 98,956 484,983 Boyds Collection Ltd. (The)/1/ 75,293 484,887 SureBeam Corporation "A"/1/ 269,261 484,670 Massbank Corp. 16,159 483,800 Glatfelter Co. 41,760 482,328 William Lyon Homes Inc./1/ 21,038 481,981 Great American Financial Resources Inc. 30,976 481,677 @Road Inc./1/ 88,951 480,335 Parkvale Financial Corp. 20,316 478,442 Option Care Inc./1/ 53,992 477,829 Coastal Financial Corp. 35,270 477,556 Mesa Air Group Inc./1/ 130,820 477,493 Concord Camera Corp./1/ 102,248 476,476 Kosan Biosciences Inc./1/ 72,761 475,857 PrivateBancorp Inc. 15,554 475,486 Curative Health Services Inc./1/ 43,596 473,017 AMCOL International Corp. 84,107 470,999 Charter Financial Corp. 16,783 470,931 Peet's Coffee & Tea Inc./1/ 36,790 470,912 infoUSA Inc./1/ 108,652 470,463 Summit Bancshares Inc. 22,333 470,110 Merix Corp./1/ 57,652 469,864 Sun Bancorp Inc. 20,900 469,832 60 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------------- Luby's Inc./1/ 95,226 $ 468,512 RPC Inc. 47,032 465,617 PLATO Learning Inc./1/ 69,989 465,427 Credit Acceptance Corp./1/ 56,658 464,596 Stanley Furniture Co. Inc./1/ 21,840 463,882 AEP Industries Inc./1/ 17,153 463,646 ArQule Inc./1/ 89,993 463,464 Columbia Bancorp 24,548 463,221 Arena Pharmaceuticals Inc./1/ 82,551 462,286 NetScreen Technologies Inc./1/ 42,598 462,188 MCSi Inc./1/ 93,323 461,949 Cadiz Inc./1/ 153,758 461,274 Kensey Nash Corp./1/ 30,655 461,113 Cardiac Science Inc./1/ 232,693 460,732 Ocwen Financial Corp./1/ 158,282 459,018 Water Pik Technologies Inc./1/ 45,099 457,755 Openwave Systems Inc./1/ 738,253 457,717 EMS Technologies Inc./1/ 44,530 456,878 Supertex Inc./1/ 43,905 456,612 Dril-Quip Inc./1/ 27,010 455,118 EnergySouth Inc. 17,801 453,925 Casella Waste Systems Inc. "A"/1/ 70,420 452,801 Aspen Technology Inc./1/ 150,574 451,722 Ingles Markets Inc. "A" 42,187 451,401 Roanoke Electric Steel Corp. 41,547 450,785 U.S. Concrete Inc./1/ 85,623 449,521 Stratex Networks Inc./1/ 349,694 447,259 Transmeta Corp./1/ 460,944 447,116 NN Inc. 48,246 446,276 Microtune Inc./1/ 184,908 445,628 Coastal Bancorp Inc. 16,117 445,474 Grace (W.R.) & Co./1/ 277,817 444,507 Global Power Equipment Group Inc./1/ 94,514 444,216 Vans Inc./1/ 78,069 444,213 Deb Shops Inc. 17,798 443,704 SBS Technologies Inc./1/ 61,840 442,774 PC-Tel Inc./1/ 84,967 442,678 Brookstone Inc./1/ 35,969 442,419 Harmonic Inc./1/ 252,663 442,160 Cornell Cos Inc./1/ 55,591 441,948 Galyan's Trading Co./1/ 44,071 441,151 Neurogen Corp./1/ 54,935 441,128 Siliconix Inc./1/ 24,802 440,732 Digimarc Corp./1/ 37,714 440,122 Avatar Holdings/1/ 18,279 439,793 Intermet Corp. 91,306 439,182 Covenant Transport Inc. "A"/1/ 25,064 438,620 Northwest Pipe Co./1/ 24,441 437,249 Penford Corp. 32,384 437,184 Bentley Pharmaceuticals Inc./1/ 51,363 436,585 Tasty Baking Company 34,218 436,280 Wireless Facilities Inc./1/ 98,217 435,101 Shoe Carnival Inc./1/ 30,496 434,568 International Specialty Products Inc./1/ 44,799 434,102 Spartan Motors Inc. 38,322 433,039 Sykes Enterprises Inc./1/ 102,806 432,813 Caliper Technologies Corp./1/ 103,074 431,880 Information Resources Inc./1/ 116,394 431,822 Horizon Organic Holding Corp./1/ 27,678 431,777 Sports Resorts International Inc./1/ 103,473 431,482 Bank of the Ozarks Inc. 18,810 430,749 NS Group Inc./1/ 72,558 430,269 Virage Logic Corp./1/ 45,610 430,102 Banc Corp. (The)/1/ 55,345 428,370 Yardville National Bancorp 25,081 426,126 First South Bancorp Inc. 11,932 425,376 AMERCO/1/ 42,198 424,512 Three-Five Systems Inc./1/ 91,311 423,683 SpeedFam-IPEC Inc./1/ 114,105 423,330 Starrett (LS) Co. "A" 27,631 422,202 j2 Global Communications Inc./1/ 21,220 422,066 Tollgrade Communications Inc./1/ 53,940 421,271 Warwick Community Bancorp 15,585 420,795 ChipPAC Inc./1/ 196,445 420,196 Sitel Corp./1/ 240,102 420,179 Acadia Realty Trust 56,682 419,447 Wackenhut Corrections Corp./1/ 36,959 419,115 Merchants Bancshares Inc. 16,964 419,011 Schedules of Investments 61 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------------- U.S. Physical Therapy Inc./1/ 39,672 $ 418,540 First Consulting Group Inc./1/ 77,024 417,470 Aftermarket Technology Corp./1/ 32,199 416,333 LendingTree Inc./1/ 28,147 414,887 Pomeroy Computer Resources/1/ 42,063 414,741 Dynamics Research Corp./1/ 28,431 414,524 Republic Bancshares Inc./1/ 21,292 413,916 Alico Inc. 14,522 413,151 NYFIX Inc./1/ 106,005 412,359 CPI Corp. 29,962 411,977 Aether Systems Inc./1/ 153,220 410,630 Hypercom Corp./1/ 143,340 409,952 Monro Muffler Brake Inc./1/ 22,936 409,637 Princeton Review Inc. (The)/1/ 68,246 409,476 AsiaInfo Holdings Inc./1/ 122,764 409,418 SoundView Technology Group Inc./1/ 314,771 409,202 Geron Corp./1/ 104,817 408,786 Universal Display Corp./1/ 67,891 408,025 ParkerVision Inc./1/ 36,090 407,817 SpectraLink Corp./1/ 71,227 405,282 Wilsons The Leather Experts Inc./1/ 56,786 404,316 RMH Teleservices Inc./1/ 49,529 404,157 American Home Mortgage Holdings Inc. 36,612 403,830 Rudolph Technologies Inc./1/ 38,999 401,300 General Binding Corp./1/ 25,311 401,179 Cepheid Inc./1/ 104,171 401,058 GSI Commerce Inc./1/ 79,267 400,298 Secure Computing Corp./1/ 124,351 397,923 National Health Realty Inc. 25,100 395,576 Digene Corp./1/ 49,857 393,870 Royal Bancshares of Pennsylvania "A" 21,512 393,670 Partners Trust Financial Group Inc. 28,035 391,649 Omega Healthcare Investors Inc./1/ 68,216 390,196 Genencor International Inc./1/ 40,980 389,720 Finisar Corp./1/ 564,403 389,438 Wellsford Real Properties Inc./1/ 22,627 389,184 Ariad Pharmaceuticals Inc./1/ 122,885 388,317 CardioDynamics International Corp./1/ 135,612 387,850 First Defiance Financial Corp. 22,583 387,750 Mothers Work Inc./1/ 10,192 387,602 Align Technology Inc./1/ 140,187 386,776 CompuCredit Corp./1/ 72,678 385,193 QRS Corp./1/ 57,808 383,267 Alliance Semiconductor Corp./1/ 100,522 381,984 FSI International Inc./1/ 124,762 381,772 Register.com/1/ 125,283 379,607 Bombay Co. Inc. (The)/1/ 140,406 379,096 Modtech Holdings Inc./1/ 37,764 377,640 Lifeline Systems Inc./1/ 17,002 374,044 Ixia/1/ 91,212 373,969 WCI Communities Inc./1/ 29,298 372,085 Crown Media Holdings Inc./1/ 106,285 371,997 Sauer-Danfoss Inc. 41,267 371,403 Collins & Aikman Corp./1/ 103,069 370,018 American Medical Security Group Inc./1/ 26,136 369,563 Avenue A Inc./1/ 147,196 367,990 Rex Stores Corp./1/ 35,725 367,968 1-800-FLOWERS.COM Inc./1/ 52,468 367,276 Lexar Media Inc./1/ 138,016 365,742 World Acceptance Corp./1/ 46,113 365,215 Research Frontiers Inc./1/ 40,742 365,048 Nu Horizons Electronics Corp./1/ 60,792 364,752 Allegiance Telecom Inc./1/ 438,971 364,346 LabOne Inc./1/ 22,502 363,632 Applica Inc./1/ 68,551 363,320 Vesta Insurance Group 145,315 363,288 DocuCorp International Inc./1/ 33,497 362,438 Harris Interactive Inc./1/ 157,008 361,118 Omnicell Inc./1/ 61,644 360,001 Neose Technologies Inc./1/ 46,389 359,979 Century Bancorp Inc. "A" 13,558 359,829 Sun Bancorp Inc. "B"/1/ 27,095 359,280 Triangle Pharmaceuticals Inc./1/ 133,014 359,271 Provident Bancorp Inc. 12,623 359,124 62 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------------- LodgeNet Entertainment Corp./1/ 46,779 $ 358,327 ONYX Software Corp./1/ 186,283 355,801 Sapient Corp./1/ 344,857 355,203 World Wrestling Entertainment Inc./1/ 42,257 353,691 Semitool Inc./1/ 68,173 351,091 Overland Storage Inc./1/ 32,291 350,680 StorageNetworks Inc./1/ 280,065 350,081 Shop At Home Inc./1/ 149,417 349,636 Century Aluminum Co. 50,184 349,281 Gulf Island Fabrication Inc./1/ 29,670 348,919 Navigators Group Inc./1/ 17,156 347,752 Ambassadors Group Inc./1/ 23,572 346,980 Illumina Inc./1/ 100,733 346,522 Akamai Technologies Inc./1/ 417,397 346,440 Equity One Inc. 26,156 345,259 Dover Downs Gaming & Entertainment Inc. 42,395 345,095 Drew Industries Inc./1/ 22,141 344,293 Party City Corp./1/ 25,036 344,245 Exploration Company of Delaware (The)/1/ 66,047 342,784 Viewpoint Corp./1/ 157,235 342,772 I-many Inc./1/ 171,103 342,206 MAPICS Inc./1/ 60,913 341,113 Concord Communications Inc./1/ 67,539 341,072 Finlay Enterprises Inc./1/ 22,605 341,026 Restoration Hardware Inc./1/ 75,718 340,731 Avanex Corp./1/ 248,245 340,096 Sanderson Farms Inc. 21,250 340,000 PriceSmart Inc./1/ 16,983 339,660 Embrex Inc./1/ 30,547 339,072 Zymogenetics Inc./1/ 42,313 338,504 deCODE genetics Inc./1/ 153,738 338,224 Witness Systems Inc./1/ 58,074 337,991 Integrated Silicon Solution Inc./1/ 113,418 337,986 Plug Power Inc./1/ 70,449 337,239 Kyphon Inc./1/ 25,544 337,181 Republic Bancorp Inc. "A" 29,832 335,610 Netro Corp./1/ 163,183 334,525 Presstek Inc./1/ 129,884 331,204 Turnstone Systems Inc./1/ 149,088 330,975 Acacia Research Corp./1/ 83,339 330,939 Datastream Systems Inc./1/ 66,172 330,860 Seaboard Corp. 1,529 328,735 FPIC Insurance Group Inc./1/ 37,294 328,187 Aspect Communications Corp./1/ 222,770 327,472 Milacron Inc. 72,550 327,201 Donnelly Corp. 12,616 326,881 MRV Communications Inc./1/ 384,455 326,787 Rent-Way Inc./1/ 108,414 325,242 Cherokee Inc./1/ 20,158 325,149 Acclaim Entertainment Inc./1/ 295,366 324,903 Res-Care Inc./1/ 65,452 324,642 Alamo Group Inc. 26,253 324,487 Durect Corp./1/ 104,660 324,446 Schawk Inc. 32,717 321,281 Xicor Inc./1/ 88,507 319,510 Westfield Financial Inc. 21,141 319,018 APAC Customer Services Inc./1/ 109,545 318,776 Arden Group Inc. "A"/1/ 5,724 317,739 Goody's Family Clothing Inc./1/ 67,132 316,863 Standard Motor Products Inc. 29,273 316,441 Horizon Offshore Inc./1/ 74,940 315,572 LeCroy Corp./1/ 35,058 314,120 Schnitzer Steel Industries Inc. "A" 17,293 312,986 Administaff Inc./1/ 81,148 312,420 Quaker Fabric Corp./1/ 49,628 312,160 Beasley Broadcast Group Inc. "A"/1/ 24,836 311,940 SeeBeyond Technology Corp./1/ 221,528 310,139 Bell Microproducts Inc./1/ 73,795 308,463 Women First HealthCare Inc./1/ 65,867 308,258 Chicago Pizza & Brewery Inc./1/ 44,732 308,203 Bradley Pharmaceuticals Inc./1/ 35,102 307,494 Terra Industries Inc./1/ 165,188 305,598 Acme Communications Inc./1/ 39,169 305,518 Keithley Instruments Inc. 25,081 304,734 PICO Holdings Inc./1/ 27,688 304,568 MedCath Corp./1/ 26,944 304,467 Euronet Worldwide Inc./1/ 60,504 304,335 Schedules of Investments 63 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------------- Charlotte Russe Holding Inc./1/ 31,929 $ 303,325 Del Laboratories Inc./1/ 16,766 303,129 Bioreliance Corp./1/ 14,540 302,723 Escalade Inc./1/ 15,230 302,315 TransMontaigne Inc./1/ 60,487 301,225 Kendle International Inc./1/ 44,809 300,220 Neoforma Inc./1/ 31,729 299,204 Numerical Technologies Inc./1/ 103,075 298,918 Nelson (Thomas) Inc./1/ 33,930 298,584 Genzyme Corp. - Biosurgery Division/1/ 159,177 297,661 Metris Companies Inc. 128,570 296,997 Marine Products Corp. 27,990 296,974 Martha Stewart Living Omnimedia Inc. "A"/1/ 42,328 296,296 Penn Traffic Company (The)/1/ 45,318 295,927 ProxyMed Inc./1/ 19,409 293,658 NATCO Group Inc. "A"/1/ 38,928 293,128 Sirius Satellite Radio Inc./1/ 292,657 292,657 Nara Bancorp Inc. 16,945 292,640 Remedy Temp Inc./1/ 23,296 291,899 Vastera Inc./1/ 135,758 291,880 Bush Industries Inc. "A" 35,893 289,298 IMCO Recycling Inc./1/ 47,721 288,712 Answerthink Inc./1/ 198,756 288,196 Paxson Communications Corp./1/ 130,436 286,959 Alaris Medical Inc./1/ 60,076 286,563 Packeteer Inc./1/ 95,460 286,380 Tropical Sportswear International Corp./1/ 22,034 286,001 Interpool Inc. 23,772 285,739 Cantel Medical Corp./1/ 28,252 285,345 Asbury Automotive Group Inc./1/ 32,582 285,092 Rainbow Technologies Inc./1/ 100,374 285,062 Franklin Financial Corp. 11,554 284,691 AVANIR Pharmaceuticals "A"/1/ 247,312 284,409 Meridian Resource Corp. (The)/1/ 134,104 282,959 Quanta Services Inc./1/ 135,836 282,539 Petroleum Helicopters Inc./1/ 10,731 282,225 HealthTronics Surgical Services Inc./1/ 33,666 281,784 TiVo Inc./1/ 78,265 281,754 LookSmart Ltd./1/ 290,037 281,336 DiamondCluster International Inc. "A"/1/ 86,171 280,917 Allscripts Healthcare Solutions Inc./1/ 98,202 280,858 Zygo Corp./1/ 66,064 280,111 NetScout Systems Inc./1/ 76,439 279,767 Checkers Drive-in Restaurants Inc./1/ 34,966 279,728 MarineMax Inc./1/ 30,968 279,022 Syntel Inc./1/ 23,676 278,667 Nastech Pharmaceutical Co. Inc./1/ 33,558 277,860 Monterey Pasta Co./1/ 59,640 277,326 Independence Holding Co. 13,860 277,200 ANADIGICS Inc./1/ 129,770 276,410 Biopure Corp./1/ 78,756 275,646 Champps Entertainment Inc./1/ 35,172 275,397 MasTec Inc./1/ 85,189 275,160 RadiSys Corp./1/ 69,441 274,986 HealthExtras Inc./1/ 64,663 273,524 Columbus McKinnon Corp./1/ 51,924 273,120 Computer Programs & Systems Inc./1/ 12,774 273,108 Touch America Holdings Inc./1/ 440,245 272,952 Somera Communications Inc./1/ 133,133 272,923 OPNET Technologies Inc./1/ 42,839 271,171 Inverness Medical Innovations Inc./1/ 28,420 269,706 Steinway Musical Instruments Inc./1/ 17,561 269,561 NASB Financial Inc. 12,944 269,106 Pain Therapeutics Inc./1/ 67,698 268,761 PDF Solutions Inc./1/ 50,755 268,494 Urologix Inc./1/ 58,852 268,365 Gaiam Inc./1/ 23,287 267,102 Read-Rite Corp./1/ 513,550 267,046 Magnetek Inc./1/ 83,320 266,624 MedSource Technologies Inc./1/ 35,316 265,576 Coldwater Creek Inc./1/ 20,144 265,498 64 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------------- Dynacq International Inc./1/ 22,780 $ 265,159 SS&C Technologies Inc./1/ 33,334 265,005 Dover Motorsports Inc. 66,167 264,668 US Unwired Inc. "A"/1/ 377,578 264,305 IXYS Corp./1/ 52,436 263,753 ICT Group Inc./1/ 13,016 263,574 Lifecore Biomedical Inc./1/ 42,328 262,434 Riverstone Networks Inc./1/ 514,363 262,325 SCM Microsystems Inc./1/ 66,178 261,337 Ciphergen Biosystems Inc./1/ 86,836 260,508 Center Trust Inc. 44,680 259,144 Kos Pharmaceuticals Inc./1/ 23,010 257,689 WESCO International Inc./1/ 59,900 257,570 Hall Kinion & Associates Inc./1/ 42,784 256,704 kForce.com Inc./1/ 82,246 255,785 Applied Molecular Evolution Inc./1/ 65,196 255,568 DVI Inc./1/ 52,934 254,083 MapInfo Corp./1/ 64,170 253,472 Specialty Laboratories Inc./1/ 27,511 252,826 Oplink Communications Inc./1/ 435,721 252,718 Inet Technologies Inc./1/ 49,708 252,020 SpeechWorks International Inc./1/ 109,508 251,868 Hexcel Corp./1/ 101,158 250,872 Onyx Pharmaceuticals Inc./1/ 58,364 249,798 P.A.M. Transportation Services Inc./1/ 13,074 249,452 Closure Medical Corp./1/ 22,343 249,348 Indevus Pharmaceuticals Inc./1/ 160,416 248,645 Trikon Technologies Inc./1/ 43,693 248,176 BWAY Corporation/1/ 17,849 248,101 Ulticom Inc./1/ 44,849 248,015 Benihana Inc./1/ 19,923 247,045 Roxio Inc./1/ 81,404 246,654 Seattle Genetics Inc./1/ 76,259 245,554 Vitria Technology Inc./1/ 314,727 245,487 Sequenom Inc./1/ 159,108 245,026 Tripos Inc./1/ 31,052 243,758 Willow Grove Bancorp Inc. 20,585 242,903 Bruker Daltonics Inc./1/ 47,479 242,618 Sonic Innovations Inc./1/ 46,056 241,794 Epix Medical Inc./1/ 53,055 240,339 Ladish Co. Inc./1/ 38,694 239,903 Advanced Tissue Sciences Inc./1/ 310,395 239,004 Trico Marine Services Inc./1/ 93,259 236,878 Mestek Inc./1/ 12,893 235,297 Bone Care International Inc./1/ 40,624 234,807 Netegrity Inc./1/ 113,890 234,613 American Superconductor Corp./1/ 86,823 234,422 Salton Inc./1/ 27,477 233,829 iGate Corp./1/ 85,402 232,293 U.S. Xpress Enterprises Inc. "A"/1/ 23,675 231,542 Sypris Solutions Inc./1/ 21,160 229,586 Price Legacy Corporation/1/ 78,276 229,349 Discovery Partners International Inc./1/ 71,795 229,026 Q-Med Inc./1/ 32,669 228,356 NetFlix Inc./1/ 23,523 228,173 Value Line Inc. 5,783 225,537 1-800 CONTACTS INC./1/ 22,510 225,100 Harvard Bioscience Inc./1/ 74,262 225,014 Matria Healthcare Inc./1/ 26,195 224,753 Maui Land & Pineapple Co. Inc./1/ 12,472 224,496 Michael Baker Corp./1/ 21,620 222,686 Midwest Express Holdings Inc./1/ 55,557 222,228 Trans World Entertainment Corp./1/ 70,525 222,154 Catapult Communications Corp./1/ 22,659 220,925 Mesaba Holdings Inc./1/ 40,605 220,891 Virco Manufacturing Corp. 22,632 219,526 Bebe Stores Inc./1/ 18,549 219,064 Culp Inc./1/ 25,594 217,549 Proton Energy Systems Inc./1/ 102,613 217,540 Wyndham International Inc. "A"/1/ 635,457 216,055 SuperGen Inc./1/ 124,515 215,411 Smart & Final Inc./1/ 50,167 213,210 Schedules of Investments 65 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------------- Altiris Inc./1/ 21,207 $ 211,010 Lawson Software Inc./1/ 59,602 210,991 TriPath Imaging Inc./1/ 93,280 209,880 Nuance Communications Inc./1/ 122,639 208,486 Quadramed Corp./1/ 115,138 208,400 National Beverage Corp./1/ 15,245 208,247 Bio-Reference Laboratories Inc./1/ 31,024 201,656 3D Systems Corp./1/ 30,615 201,447 FAO Inc./1/ 70,625 201,281 MIPS Technologies Inc. "A"/1/ 151,103 200,816 Transcontinental Realty Investments Inc./1/ 12,141 200,205 Castle (A.M.) & Co. 29,593 199,753 ITXC Corp./1/ 80,463 199,548 California First National Bancorp 14,764 199,462 Medis Technologies Ltd./1/ 45,885 196,388 EarthShell Corp./1/ 280,233 196,163 Capstone Turbine Corp./1/ 328,500 193,815 CTB International Corp./1/ 14,923 190,850 Redback Networks Inc./1/ 614,700 190,557 Active Power Inc./1/ 142,123 190,445 Artesyn Technologies Inc./1/ 125,401 189,356 NetRatings Inc./1/ 32,401 189,222 Endocardial Solutions Inc./1/ 58,462 188,832 MetaSolv Inc./1/ 122,844 187,951 Virbac Corp./1/ 36,831 187,101 Vical Inc./1/ 80,607 186,202 RITA Medical Systems Inc./1/ 42,349 185,870 Drugstore.com Inc./1/ 110,432 184,421 Sipex Corp./1/ 107,940 183,498 Monarch Casino & Resort Inc./1/ 13,614 181,338 CryoLife Inc./1/ 69,226 180,680 Flow International Corp./1/ 55,830 180,331 Electroglas Inc./1/ 89,690 179,380 Richardson Electronics Ltd. 27,243 179,259 Rigel Pharmaceuticals Inc./1/ 111,321 178,114 Actuate Corp./1/ 187,031 177,679 Net2Phone Inc./1/ 75,175 177,413 Synplicity Inc./1/ 40,615 175,051 ABIOMED Inc./1/ 52,913 174,613 NIC Inc./1/ 102,079 174,555 Coca-Cola Bottling Co. Consolidated 3,713 174,140 Tremont Corp. 5,402 172,918 Triton PCS Holdings Inc. "A"/1/ 82,516 172,458 Championship Auto Racing Teams Inc./1/ 45,690 172,251 Aphton Corp./1/ 76,757 171,936 Seminis Inc. "A"/1/ 58,596 171,686 Green Mountain Coffee Inc./1/ 13,311 171,579 Handspring Inc./1/ 182,319 171,380 Peregrine Pharmaceuticals Inc./1/ 405,099 170,142 Liquidmetal Technologies/1/ 21,267 169,923 Carmike Cinemas Inc./1/ 9,414 169,452 Progenics Pharmaceuticals Inc./1/ 33,518 168,260 Atlas Air Worldwide Holdings Inc./1/ 69,813 168,249 Union Acceptance Corp. "A"/1/ 41,741 168,216 Leeds Federal Bankshares Inc. 5,287 167,228 ADE Corp./1/ 39,646 166,910 Verint Systems Inc./1/ 19,156 165,297 Dominion Homes Inc./1/ 10,647 165,028 Manufacturers Services Ltd./1/ 61,026 164,770 AXT Inc./1/ 79,063 164,451 Johnson Outdoors Inc. "A"/1/ 15,590 163,851 Sonus Networks Inc./1/ 767,231 161,119 Lannett Co. Inc./1/ 15,755 158,338 EMCORE Corp./1/ 102,221 155,376 Ceres Group Inc./1/ 80,505 155,375 Paradyne Networks Inc./1/ 116,422 154,841 Inktomi Corp./1/ 616,583 154,146 DHB Industries Inc./1/ 70,631 149,738 eUniverse Inc./1/ 50,737 148,659 IMPCO Technologies Inc./1/ 41,288 148,637 ON Semiconductor Corp./1/ 118,271 147,839 Mattson Technology Inc./1/ 88,867 146,631 Time Warner Telecom Inc. "A"/1/ 180,717 146,381 Cache Inc./1/ 11,002 146,327 CompX International Inc. 15,709 145,780 66 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2002 Security Shares Value - -------------------------------------------------------------------------------- WestPoint Stevens Inc./1/ 147,895 $ 144,937 dELiA*s Corp. "A"/1/ 137,407 144,277 Private Media Group Inc./1/ 61,053 144,085 Spectrian Corp./1/ 48,725 143,739 Embarcadero Technologies Inc./1/ 34,125 142,984 Sangamo BioSciences Inc./1/ 72,299 142,429 EMC Insurance Group Inc. 9,982 142,343 Pegasystems Inc./1/ 25,881 141,310 Centillium Communications Inc./1/ 117,752 141,302 PDI Inc./1/ 34,698 141,221 Sanchez Computer Associates Inc./1/ 57,808 141,052 Chordiant Software Inc./1/ 151,537 140,929 August Technology Corp./1/ 31,019 139,585 Inforte Corp./1/ 27,231 139,423 Covansys Corporation/1/ 81,499 138,548 Syntroleum Corp./1/ 83,145 138,021 Guess ? Inc./1/ 31,784 136,353 Protection One Inc./1/ 50,268 135,724 First Banks America Inc./1/ 3,335 133,900 MEEMIC Holdings Inc./1/ 4,523 129,629 RCN Corp./1/ 251,380 128,204 Med-Design Corp. (The)/1/ 36,069 127,324 Tellium Inc./1/ 330,946 125,759 Mail-Well Inc./1/ 120,557 125,379 Technical Olympic USA Inc./1/ 8,178 124,952 Quovadx Inc./1/ 88,687 124,162 Bridgeford Food Corp. 12,269 123,426 Centennial Communications Corp. "A"/1/ 42,478 123,186 Mossimo Inc./1/ 20,707 121,757 Portal Software Inc./1/ 506,428 121,543 NaPro BioTherapeutics Inc./1/ 108,264 121,256 DJ Orthopedics Inc./1/ 31,043 118,584 Midas Inc./1/ 23,472 117,360 ClearOne Communications Inc./1/ 33,705 114,934 Novadigm Inc./1/ 57,355 114,710 PC Connection Inc./1/ 27,904 113,290 Stratos Lightwave Inc./1/ 308,893 111,201 Nassda Corp./1/ 21,236 110,852 Revlon Inc. "A"/1/ 36,229 108,325 Factory 2-U Stores Inc./1/ 54,966 106,634 Inrange Technologies Corp./1/ 36,832 102,761 TTM Technologies Inc./1/ 65,254 102,449 Synaptics Inc./1/ 21,227 102,102 Homestore.com Inc./1/ 328,183 98,455 Inter Parfums Inc. 13,989 93,474 Advanced Power Technology Inc./1/ 23,307 90,664 NYMAGIC Inc./1/ 6,137 88,618 SONICblue Inc./1/ 363,799 87,312 Digitas Inc./1/ 39,685 87,307 Therma-Wave Inc./1/ 104,775 82,772 Nanometrics Inc./1/ 30,538 81,231 Bruker AXS Inc./1/ 38,387 80,613 PLX Technology Inc./1/ 72,021 79,223 Actrade Financial Technologies Ltd./1,2/ 30,524 76,920 Overstock.com Inc./1/ 12,764 75,946 Alamosa Holdings Inc./1/ 312,661 71,912 Caminus Corp./1/ 39,516 70,338 Aurora Foods Inc./1/ 100,297 65,193 SimpleTech Inc./1/ 30,457 64,873 UbiquiTel Inc./1/ 248,946 62,237 Next Level Communications Inc./1/ 70,163 54,026 Infogrames Inc./1/ 23,680 52,570 Optical Communication Products Inc./1/ 63,371 48,796 ATA Holdings Corp./1/ 13,762 46,791 AirGate PCS Inc./1/ 103,835 45,687 Acterna Corp./1/ 113,389 45,356 Alaska Communications Systems Group Inc./1/ 26,321 44,219 Deltagen Inc./1/ 29,253 43,879 BriteSmile Inc./1/ 51,184 38,388 Suntron Corp./1/ 10,597 34,440 DDi Corp./1/ 203,709 32,390 Liberty Livewire Corp. "A"/1/ 20,490 32,169 Dobson Communications Corp. "A"/1/ 89,915 27,874 Schedules of Investments 67 Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2002 Shares or Security Principal Value - ------------------------------------------------------------------------- Magellan Health Services Inc./1/ 103,051 $ 26,793 Cross Media Marketing Corp./1/ 35,513 26,635 Penton Media Inc./1/ 63,174 15,169 HPL Technologies Inc./1/ 44,761 2,241 TOTAL COMMON STOCKS (Cost: $3,305,582,216) 2,402,549,054 SHORT TERM INSTRUMENTS - 12.00% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 247,576,827 247,576,827 Dreyfus Money Market Fund 13,365,679 13,365,679 General Electric Commercial Paper 1.74%, 11/04/02 $ 8,000,000 8,000,000 Security Shares Value - ------------------------------------------------------------------------- Goldman Sachs Financial Square Prime Obligation Fund 963,139 $ 963,139 Providian Temp Cash Money Market Fund 18,998,513 18,998,513 TOTAL SHORT TERM INSTRUMENTS (Cost: $288,904,158) 288,904,158 TOTAL INVESTMENTS IN SECURITIES - 111.79% (Cost $3,594,486,374) 2,691,453,212 OTHER ASSETS, LESS LIABILITIES - (11.79%) (283,770,835) -------------- NET ASSETS - 100.00% $2,407,682,377 ============== /1/ Non-income earning securities. /2/ Security valued at fair value in accordance with procedures approved by the Board of Trustees (Note 1). See notes to financial statements. 68 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ COMMON STOCKS - 99.92% Corinthian Colleges Inc./1/ 51,336 $ 1,937,425 Techne Corp./1/ 56,400 1,849,356 Covance Inc./1/ 84,460 1,652,882 Overture Services Inc./1/ 69,205 1,631,162 Hilb Rogal & Hamilton Co. 38,764 1,599,015 Scios Inc./1/ 62,797 1,598,184 Neurocrine Biosciences Inc./1/ 38,245 1,568,045 Stericycle Inc./1/ 45,529 1,544,344 Take-Two Interactive Software Inc./1/ 51,280 1,487,120 United Bancshares Inc. 49,618 1,439,418 Corporate Executive Board Co. (The)/1/ 50,156 1,431,954 Federal Realty Investment Trust 52,327 1,412,829 Macerich Co. (The) 44,263 1,371,268 CACI International Inc. "A"/1/ 38,617 1,368,973 Roper Industries Inc. 39,499 1,362,715 IDEXX Laboratories Inc./1/ 43,220 1,337,573 Respironics Inc./1/ 41,549 1,329,983 AMETEK Inc. 44,787 1,304,197 Apria Healthcare Group Inc./1/ 55,324 1,303,433 Pacific Capital Bancorp 47,471 1,289,217 Chelsea Property Group Inc. 37,699 1,272,341 Washington Real Estate Investment Trust 49,950 1,267,731 Transkaryotic Therapies Inc./1/ 37,907 1,236,451 Invacare Corp. 35,718 1,223,341 Staten Island Bancorp Inc. 69,765 1,213,911 International Bancshares Corp. 30,755 1,196,062 Chittenden Corp. 40,274 1,192,110 ResMed Inc./1/ 41,256 1,179,922 Chesapeake Energy Corp. 178,671 1,179,229 Regis Corp. 41,225 1,166,255 First Bancorp 30,177 1,150,347 Cabot Microelectronics Corp./1/ 30,702 1,143,342 Sonic Corp./1/ 49,321 1,139,315 Enzon Inc./1/ 58,346 1,122,577 Province Healthcare Co./1/ 64,863 1,112,400 Shurgard Storage Centers Inc. "A" 35,147 1,111,348 InterMune Inc./1/ 33,858 1,111,220 THQ Inc./1/ 53,413 1,110,990 Waste Connections Inc./1/ 31,640 1,100,756 Intergraph Corp./1/ 63,463 1,084,583 Cooper Companies Inc. 20,640 1,083,600 ITT Educational Services Inc./1/ 57,586 1,080,889 Too Inc./1/ 46,024 1,071,439 Evergreen Resources Inc./1/ 25,757 1,055,522 Varian Inc./1/ 37,862 1,045,370 Olin Corp. 63,622 1,042,128 TrustCo Bank Corp. NY 98,047 1,037,141 CLARCOR Inc. 33,673 1,033,761 Alexandria Real Estate Equities Inc. 24,193 1,027,719 Landstar System Inc./1/ 20,698 1,014,719 Amylin Pharmaceuticals Inc./1/ 60,716 1,009,100 CAL Dive International Inc./1/ 49,854 1,005,406 FTI Consulting Inc./1/ 25,033 995,312 Key Energy Services Inc./1/ 123,646 974,330 UCBH Holdings Inc. 24,667 969,166 Essex Property Trust Inc. 19,506 964,377 Lincoln Electric Holding Inc. 43,092 953,669 Smucker (J.M.) Co. (The) 25,691 942,860 Unit Corp./1/ 48,938 937,163 Brookline Bancorp Inc. 79,571 935,040 Patina Oil & Gas Corp. 32,483 925,766 Arbitron Inc./1/ 26,358 898,808 Otter Tail Corp. 33,651 886,367 Perrigo Co./1/ 83,123 883,597 Mills Corp. 29,638 879,063 Fred's Inc. 29,409 878,094 Matthews International Corp. "A" 37,146 868,102 Airgas Inc./1/ 65,917 865,490 Bio-Rad Laboratories Inc. "A"/1/ 22,907 862,678 Pinnacle Systems Inc./1/ 79,729 861,073 Spinnaker Exploration Co./1/ 29,790 854,973 Mentor Corp. 26,737 852,376 Linens `N Things Inc./1/ 46,299 850,513 Panera Bread Co. "A"/1/ 31,099 839,673 AmSurg Corp./1/ 27,747 837,127 Jeffries Group Inc. 21,901 835,742 Plantronics Inc./1/ 51,251 835,391 Pediatrix Medical Group Inc./1/ 26,943 834,964 Plains Resource Inc./1/ 32,367 834,421 Schedules of Investments 69 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ DRS Technologies Inc./1/ 22,408 $ 834,026 Pacific Sunwear of California Inc./1/ 40,926 833,253 Hyperion Solutions Corp./1/ 45,173 828,925 S&T Bancorp Inc. 32,748 824,595 Priority Healthcare Corp. "B"/1/ 32,616 821,923 Grey Wolf Inc./1/ 226,817 816,541 Cathay Bancorp Inc. 20,891 814,749 Superior Industries International Inc. 17,161 807,940 Brady Corp. "A" 24,950 803,390 Chateau Communities Inc. 30,408 803,075 Christopher & Banks Corp./1/ 31,840 799,821 Trimeris Inc./1/ 17,936 796,717 Nautilus Group Inc. (The)/1/ 40,557 790,862 Wilson Greatbatch Technologies Inc./1/ 28,418 790,020 Baldor Electric Co. 41,256 787,990 Alliance Gaming Corp./1/ 50,785 785,136 CVB Financial Corp. 35,722 783,741 Penn National Gaming Inc./1/ 41,193 777,724 Hot Topic Inc./1/ 42,803 771,738 Southwest Bancorp of Texas Inc./1/ 21,159 770,399 Coinstar Inc./1/ 29,507 760,690 Chiquita Brands International Inc./1/ 48,708 752,539 FactSet Research Systems Inc. 28,221 749,268 SangStat Medical Corp./1/ 35,775 746,266 Syncor International Corp./1/ 23,239 746,204 Price Communications Corp./1/ 65,430 739,359 Ryan's Family Steak Houses Inc./1/ 60,090 731,295 Thor Industries Inc. 20,816 723,564 ABM Industries Inc. 51,170 721,497 NBTY Inc./1/ 55,569 721,286 NPS Pharmaceuticals Inc./1/ 35,048 720,867 Macrovision Corp./1/ 57,985 709,157 Flir Systems Inc./1/ 20,249 708,513 ADVO Inc./1/ 22,186 704,405 Cost Plus Inc./1/ 26,206 703,631 Interstate Bakeries Corp. 26,379 700,890 Western Digital Corp./1/ 148,358 697,283 Mercury Computer Systems Inc./1/ 29,363 692,967 Oshkosh Truck Corp. 12,233 689,941 Hovnanian Enterprises Inc. "A"/1/ 20,393 689,283 Pharmaceutical Resources Inc./1/ 24,471 684,699 Varian Semiconductor Equipment Associates Inc./1/ 41,630 684,397 Identix Inc./1/ 113,787 677,033 National Penn Bancshares Inc. 24,102 673,892 Cambrex Corp. 18,131 667,221 Avocent Corp./1/ 49,833 666,766 SCP Pool Corp./1/ 24,314 666,447 Libbey Inc. 20,913 666,288 Tupperware Corp. 39,750 660,645 Kronos Inc./1/ 26,740 658,606 Black Box Corp./1/ 19,766 656,231 Engineered Support Systems Inc. 11,488 655,276 Carlisle Companies Inc. 17,858 655,031 Silicon Laboratories Inc./1/ 35,654 653,538 East West Bancorp Inc. 19,332 652,648 Dime Community Bancshares 30,306 649,155 Axcelis Technologies Inc./1/ 132,838 648,249 Winnebago Industries Inc. 16,351 646,355 InterDigital Communications Corp./1/ 73,843 642,434 Borland Software Corp./1/ 82,243 640,673 Foundry Networks Inc./1/ 116,744 639,757 Red Hat Inc./1/ 134,424 638,514 Cognizant Technology Solutions Corp./1/ 11,038 634,354 P.F. Chang's China Bistro Inc./1/ 21,850 634,305 Cognex Corp./1/ 45,548 633,573 Yankee Candle Co. Inc. (The)/1/ 36,725 630,568 Harleysville National Corp. 25,981 627,181 American Italian Pasta Co. "A"/1/ 17,549 626,324 WD-40 Co. 21,631 625,136 Isis Pharmaceuticals Inc./1/ 63,298 624,118 Simpson Manufacturing Co. Inc./1/ 19,861 623,437 Documentum Inc./1/ 53,629 619,415 Argosy Gaming Co./1/ 26,916 617,991 Cree Inc./1/ 49,249 615,612 Cross Country Inc./1/ 43,761 612,654 Regeneron Pharmaceuticals Inc./1/ 45,358 612,333 Glimcher Realty Trust 32,621 611,318 Community First Bankshares Inc. 21,907 610,767 70 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Albany International Corp. "A" 32,174 $ 610,663 VISX Inc./1/ 65,234 602,110 Digital Insight Corp./1/ 38,275 601,683 PRG-Schultz International Inc./1/ 48,340 598,449 Harland (John H.) Co. 22,027 598,033 Internet Security Systems Inc./1/ 48,491 597,409 Grey Global Group Inc. 1,012 597,080 Strayer Education Inc. 10,028 596,566 DoubleClick Inc./1/ 115,778 595,099 United Natural Foods Inc./1/ 25,788 593,898 Adolor Corp./1/ 42,335 593,537 Rare Hospitality International Inc./1/ 25,265 591,706 Sierra Health Services Inc./1/ 32,940 590,944 UGI Corp. 16,204 589,015 Extreme Networks Inc./1/ 139,747 588,335 Paxar Corp./1/ 40,440 587,998 KV Pharmaceuticals Co./1/ 30,938 584,728 Alkermes Inc./1/ 73,977 583,679 Hollywood Entertainment Corp./1/ 40,132 582,717 SanDisk Corp./1/ 44,319 581,022 Kroll Inc./1/ 29,225 579,532 Haemonetics Corp./1/ 24,397 578,941 Anchor BanCorp Wisconsin Inc. 28,599 577,700 SurModics Inc./1/ 18,135 576,149 Manitowoc Co. Inc. (The) 20,814 569,263 IHOP Corp./1/ 23,575 568,157 Insight Enterprises Inc./1/ 55,610 564,441 Skyworks Solutions Inc./1/ 123,089 557,593 Frontier Financial Corp. 21,841 556,509 Manufactured Home Communities Inc. 17,405 554,871 BARRA Inc./1/ 20,301 554,623 American Medical Systems Holdings Inc./1/ 26,439 548,609 United Community Banks Inc. 22,462 545,827 Fossil Inc./1/ 27,195 545,260 W-H Energy Services Inc./1/ 31,466 544,362 Tekelec/1/ 62,988 543,586 DIANON Systems Inc./1/ 11,489 543,545 Action Performance Companies Inc./1/ 21,142 543,349 Ocular Sciences Inc./1/ 22,984 536,906 Oceaneering International Inc./1/ 20,915 532,287 IGEN International Inc./1/ 17,800 531,864 Federal Signal Corp. 28,817 530,809 Unilab Corp./1/ 25,247 529,430 Gymboree Corp./1/ 32,458 529,390 SureWest Communications 18,086 529,377 Jack in the Box Inc./1/ 23,203 529,028 Plexus Corp./1/ 56,927 526,575 Arch Coal Inc. 31,765 525,711 Banta Corp. 14,773 524,441 Ferro Corp. 22,691 524,162 ICU Medical Inc./1/ 14,301 522,273 Itron Inc./1/ 28,398 522,239 MICROS Systems Inc./1/ 22,454 520,708 ATMI Inc./1/ 36,702 517,498 Electro Scientific Industries Inc./1/ 34,824 516,440 S1 Corp./1/ 96,096 515,075 Progress Software Corp./1/ 42,557 514,940 TriQuint Semiconductor Inc./1/ 145,860 514,886 Suffolk Bancorp 15,908 512,238 Myriad Genetics Inc./1/ 32,308 511,759 Commonwealth Telephone Enterprises Inc./1/ 14,702 511,189 Atlantic Coast Airlines Holdings Inc./1/ 55,101 509,684 Exar Corp./1/ 44,120 509,586 Cyberonics Inc./1/ 29,526 508,142 Boston Private Financial Holdings Inc. 23,851 508,026 Delta & Pine Land Co. 27,092 507,704 Knight Transportation Inc./1/ 32,517 504,014 Invision Technologies Inc./1/ 15,677 501,821 Idex Corp. 17,560 501,338 Inter-Tel Inc. 24,602 500,651 Rogers Corp./1/ 21,432 500,437 Donnelley (R.H.) Corp./1/ 19,148 497,848 Nextel Partners Inc. "A"/1/ 91,735 493,534 Pennsylvania Real Estate Investment Trust 19,136 492,943 Financial Federal Corp./1/ 15,430 491,445 Schedules of Investments 71 Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Rambus Inc./1/ 113,170 $ 491,158 Blyth Inc. 17,476 487,580 FMC Corp./1/ 18,834 486,294 Entegris Inc./1/ 62,254 483,714 eFunds Corp./1/ 51,492 483,046 Pacific Northwest Bancorp 17,729 482,761 Odyssey Healthcare Inc./1/ 16,114 482,614 Sylvan Learning Systems Inc./1/ 35,257 482,316 Armor Holdings Inc./1/ 32,049 480,415 OshKosh B'Gosh Inc. "A" 13,972 480,078 Albany Molecular Research Inc./1/ 28,050 477,691 Wintrust Financial Corp. 16,626 476,335 NDCHealth Corp. 30,613 476,032 FEI Co./1/ 32,754 473,295 Quest Software Inc./1/ 50,305 472,867 Payless ShoeSource Inc./1/ 8,693 469,509 McDATA Corp. "A"/1/ 85,874 466,296 Ameritrade Holding Corp./1/ 124,755 465,336 Headwaters Inc./1/ 33,620 464,628 Monaco Coach Corp./1/ 22,810 456,884 Papa John's International Inc./1/ 15,659 456,147 Station Casinos Inc./1/ 26,728 454,643 United Surgical Partners International Inc./1/ 20,567 453,091 Maverick Tube Corp./1/ 51,065 452,947 Biosite Inc./1/ 15,581 451,693 MAXIMUS Inc./1/ 20,158 451,539 Hollinger International Inc. 49,659 451,400 Hooper Holmes Inc. 72,684 450,641 Georgia Gulf Corp. 19,683 450,150 Group 1 Automotive Inc./1/ 20,119 449,660 ElkCorp 26,323 449,334 Shuffle Master Inc./1/ 24,100 448,501 Enzo Biochem Inc./1/ 31,316 447,819 Umpqua Holdings Corp. 27,150 446,075 CARBO Ceramics Inc. 12,446 446,065 Martek Biosciences Corp./1/ 27,014 442,489 California Pizza Kitchen Inc./1/ 19,220 442,252 Keane Inc./1/ 65,430 441,652 W Holding Co. Inc. 26,969 439,595 Sun Communities Inc. 11,969 439,262 Frontier Oil Corp. 35,422 439,233 Stone Energy Corp./1/ 13,440 436,800 AMERIGROUP Corp./1/ 13,008 436,548 Dionex Corp./1/ 16,986 434,162 Telik Inc./1/ 34,985 433,114 Mentor Graphics Corp./1/ 88,727 432,988 Quiksilver Inc./1/ 19,150 432,598 Schweitzer-Mauduit International Inc. 20,245 432,231 FileNET Corp./1/ 41,644 431,015 Teledyne Technologies Inc./1/ 23,729 430,919 Pure Resources Inc./1/ 19,174 429,498 Photon Dynamics Inc./1/ 23,043 429,291 CUNO Inc./1/ 13,906 429,000 Superior Energy Services Inc./1/ 65,946 428,649 Sotheby's Holdings Inc. "A"/1/ 60,892 426,244 New Century Financial Corp./1/ 18,204 425,974 Jill (J.) Group Inc. (The)/1/ 24,422 425,431 Jarden Corp./1/ 15,661 425,196 ProQuest Co./1/ 13,916 422,351 Therasense Inc./1/ 30,078 419,889 Lance Inc. 32,909 419,590 Heartland Express Inc./1/ 22,284 417,602 AmeriPath Inc./1/ 27,988 417,021 Hecla Mining/1/ 116,619 416,330 Power Integrations Inc./1/ 34,151 416,301 Mine Safety Appliances Co. 10,603 415,532 Insituform Technologies Inc. "A"/1/ 28,934 415,174 Silicon Storage Technology Inc./1/ 104,986 410,495 Aeroflex Inc./1/ 81,436 410,437 Atrix Laboratories Inc./1/ 27,699 409,945 NetIQ Corp./1/ 28,247 409,581 CPB Inc. 8,866 409,343 Texas Regional Bancshares Inc. "A" 12,199 408,545 Anteon International Corp./1/ 15,017 408,162 Town & Country Trust (The) 19,386 407,688 Speedway Motorsports Inc./1/ 17,253 406,308 Wright Medical Group Inc./1/ 21,242 404,235 Watson Wyatt & Co. Holdings/1/ 20,099 401,980 Topps Co. (The)/1/ 46,631 401,959 72 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Advanced Neuromodulation Systems Inc./1/ 12,067 $ 401,590 Black Hills Corp. 15,319 401,205 First Niagara Financial Group Inc. 12,696 401,067 Getty Realty Corp. 20,947 399,669 Mississippi Valley Bancshares Inc. 8,018 399,457 Integra LifeSciences Holdings Corp./1/ 25,058 398,172 United National Bancorp 19,291 397,009 Sterling Financial Corp. (Pennsylvania) 16,985 396,260 Aaron Rents Inc. "B" 17,179 395,117 Scientific Games Corp. "A"/1/ 58,955 395,057 Sybron Dental Specialties Inc./1/ 28,190 394,378 Serologicals Corp./1/ 29,306 392,407 Standard Register Co. (The) 16,339 392,136 Apogee Enterprises Inc. 35,839 392,079 AFC Enterprises Inc./1/ 19,376 391,201 Mediacom Communications Corp./1/ 72,767 390,759 Hydril Co./1/ 15,705 390,740 Applera Corp. - Celera Genomics Group/1/ 49,126 390,552 DSP Group Inc./1/ 24,164 388,050 Connetics Corp./1/ 41,615 384,939 Genlyte Group Inc. (The)/1/ 10,843 384,384 Bright Horizons Family Solutions Inc./1/ 13,714 383,032 Duane Reade Inc./1/ 23,889 382,224 ScanSource Inc./1/ 6,571 381,447 Berry Petroleum Co. "A" 22,433 381,137 Technitrol Inc. 25,486 381,016 Southwestern Energy Co./1/ 31,660 379,920 Toro Co. 6,745 379,406 CONMED Corp./1/ 18,789 378,598 Cato Corp. "A" 19,833 376,430 Electronics Boutique Holdings Corp./1/ 13,660 374,967 Saga Communications Inc./1/ 20,259 374,792 Pre-Paid Legal Services Inc./1/ 18,830 374,340 VitalWorks Inc./1/ 51,323 373,118 INAMED Corp./1/ 16,192 372,416 Resources Connection Inc./1/ 25,824 372,124 Rollins Inc. 19,151 371,529 Genta Inc./1/ 57,830 371,269 Franklin Electric Co. Inc. 8,662 370,300 Tier Technologies Inc. "B"/1/ 19,556 370,000 AnnTaylor Stores Corp./1/ 15,969 367,766 Landauer Inc. 11,071 367,004 PracticeWorks Inc./1/ 21,160 366,068 Vector Group Ltd. 28,958 364,581 Tompkins Trustco Inc. 8,471 363,406 Oriental Financial Group Inc. 16,502 363,044 Tennant Co. 11,211 362,676 Lattice Semiconductor Corp./1/ 58,291 362,570 O'Charley's Inc./1/ 19,302 361,739 Rayovac Corp./1/ 29,585 360,937 Photronics Inc./1/ 35,868 360,832 School Specialty Inc./1/ 14,401 360,169 Sepracor Inc./1/ 68,497 358,924 Newpark Resources Inc./1/ 90,361 357,830 Atwood Oceanics Inc./1/ 12,175 356,119 Cubic Corp. 20,939 355,963 Manhattan Associates Inc./1/ 26,326 355,928 Tularik Inc./1/ 51,881 355,385 Medicines Co. (The)/1/ 32,183 353,305 Movie Gallery Inc./1/ 23,491 352,600 City Holding Co. 13,665 351,737 WebEx Communications Inc./1/ 31,371 351,041 Labor Ready Inc./1/ 55,539 351,006 NBT Bancorp Inc. 20,312 350,788 Oakley Inc./1/ 34,845 350,192 ENDOcare Inc./1/ 24,470 350,166 Conceptus Inc./1/ 22,873 349,957 Parametric Technology Corp./1/ 194,291 349,724 Washington Trust Bancorp Inc. 17,672 348,845 Ligand Pharmaceuticals Inc. "B"/1/ 51,184 348,051 AC Moore Arts & Crafts Inc./1/ 16,457 347,736 Guitar Center Inc./1/ 18,509 347,599 MGE Energy Inc. 13,544 347,539 Noven Pharmaceuticals Inc./1/ 28,239 345,645 ANSYS Inc./1/ 20,044 345,358 Magnum Hunter Resources Inc./1/ 65,665 344,741 Schedules of Investments 73 Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ West Pharmaceutical Services Inc. 16,092 $ 344,691 Lone Star Technologies Inc./1/ 29,074 344,527 Zoll Medical Corp./1/ 11,324 344,250 Glacier Bancorp Inc. 15,096 343,887 Intermagnetics General Corp./1/ 20,043 342,134 Helix Technology Corp. 35,396 341,571 Nordson Corp. 14,372 341,191 Owens & Minor Inc. 23,873 341,145 Select Medical Corp./1/ 23,823 340,669 American Capital Strategies Ltd. 18,029 339,666 RehabCare Group Inc./1/ 14,656 338,993 CSK Auto Corp./1/ 26,925 336,024 Mid Atlantic Realty Trust 20,914 335,251 Veeco Instruments Inc./1/ 30,940 334,152 PolyMedica Corp./1/ 12,599 332,866 MacDermid Inc. 16,674 332,646 Immunomedics Inc. 55,433 332,598 G&K Services Inc. "A" 9,821 332,441 Websense Inc./1/ 28,592 331,953 ImClone Systems Inc./1/ 42,551 331,898 New England Business Service Inc. 15,646 330,913 TeleTech Holdings Inc./1/ 52,774 329,838 Lindsay Manufacturing Co. 13,552 328,365 American Management Systems Inc./1/ 25,772 328,078 Kopin Corp./1/ 94,151 327,645 Alloy Inc./1/ 39,424 327,613 Sterling Bancshares Inc. 24,996 326,698 Global Industries Ltd./1/ 79,062 326,526 Intuitive Surgical Inc./1/ 40,766 325,720 Legato Systems Inc./1/ 118,090 325,692 ArthroCare Corp./1/ 26,870 325,664 Symyx Technologies Inc./1/ 31,057 325,167 Kirby Corp./1/ 14,353 324,665 Independent Bank Corp. (Massachusetts) 16,326 324,561 Royal Gold Inc. 16,981 323,828 ValueVision Media Inc./1/ 27,361 321,765 MedQuist Inc./1/ 13,708 321,699 Silicon Image Inc./1/ 78,613 321,527 Ventana Medical Systems Inc./1/ 17,139 321,013 Spanish Broadcasting System Inc. "A"/1/ 48,992 320,898 Newport Corp./1/ 28,195 318,040 American Woodmark Corp. 6,267 317,988 CoStar Group Inc./1/ 17,665 317,970 Federal Agricultural Mortgage Corp./1/ 10,768 317,764 Genesis Microchip Inc./1/ 41,383 317,408 Houston Exploration Co./1/ 10,184 317,232 Cohu Inc. 28,027 316,705 GulfMark Offshore Inc./1/ 18,227 315,327 EDO Corp. 14,057 315,017 Crown American Realty Trust 34,124 313,600 Wet Seal Inc. "A"/1/ 31,353 313,530 Per-Se Technologies Inc./1/ 31,517 311,388 Right Management Consultants Inc./1/ 12,626 311,105 StarTek Inc./1/ 14,120 310,781 eSpeed, Inc./1/ 30,538 310,266 Avid Technology Inc./1/ 30,084 309,865 Cerus Corp./1/ 18,324 305,461 Ascential Software Corp./1/ 164,179 305,045 Genesco Inc./1/ 21,990 303,462 Powerwave Technologies Inc./1/ 88,665 300,574 Herley Industries Inc./1/ 16,166 300,203 Merit Medical Systems Inc./1/ 15,533 299,942 Information Holdings Inc./1/ 13,842 299,679 Sandy Spring Bancorp Inc. 9,695 298,606 TIBCO Software Inc./1/ 79,340 297,525 Actel Corp./1/ 28,547 296,889 Alfa Corp. 24,083 295,017 Remington Oil & Gas Corp./1/ 20,922 295,000 Echelon Corp./1/ 33,896 294,895 MSC.Software Corp./1/ 34,559 294,443 MIM Corp./1/ 31,140 294,273 Planar Systems Inc./1/ 18,420 293,615 Navigant Consulting Co./1/ 52,851 291,738 Key Productions Co. Inc./1/ 17,993 291,487 Steel Dynamics Inc./1/ 22,247 291,213 Asyst Technologies Inc./1/ 48,137 290,747 Zoran Corp./1/ 26,347 289,817 74 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Great Southern Bancorp Inc. 7,721 $ 289,229 Forrester Research Inc./1/ 19,291 288,786 Ennis Business Forms Inc. 22,044 287,674 Benchmark Electronics Inc./1/ 13,652 287,375 Curtiss Wright Corp. 4,804 287,231 Prima Energy Corp./1/ 13,675 286,765 Briggs & Stratton Corp. 7,638 286,731 Sturm Ruger & Co. Inc. 23,495 286,639 MAF Bancorp Inc. 9,269 286,412 Gartner Inc. "A"/1/ 35,306 285,979 Financial Institutions Inc. 10,521 285,645 IDX Systems Corp./1/ 22,923 284,474 BioMarin Pharmaceutical Inc./1/ 49,074 284,138 SERENA Software Inc./1/ 23,587 283,044 Forward Air Corp./1/ 15,555 281,545 First Community Bancorp 9,661 279,589 Digital River Inc./1/ 36,367 278,935 First Busey Corp. "A" 12,267 278,093 Fleming Companies Inc. 55,380 276,900 Citizens Inc./1/ 30,771 276,324 Multimedia Games Inc./1/ 13,946 274,611 PennRock Financial Services Corp. 9,462 274,398 Impath Inc./1/ 21,192 273,589 Fidelity National Information Solutions Inc./1/ 17,809 272,300 North Pittsburgh Systems Inc. 20,311 270,746 CorVel Corp./1/ 9,003 269,820 Trimble Navigation Ltd./1/ 27,124 268,528 Connecticut Water Service Inc. 10,447 267,652 SY Bancorp Inc. 7,693 267,178 ESS Technology Inc./1/ 43,421 267,039 Salem Communications Corp. "A"/1/ 11,900 266,798 R&G Financial Corp. "B" 12,217 266,575 Stage Stores Inc./1/ 12,275 266,245 Airtran Holdings Inc./1/ 85,466 265,799 Peapack-Gladstone Financial Corp. 4,087 265,655 JDA Software Group Inc./1/ 37,989 265,543 Dendrite International Inc./1/ 41,991 264,963 Allos Therapeutics Inc./1/ 31,136 264,033 FreeMarkets Inc./1/ 53,227 264,006 Main Street Banks Inc. 14,181 262,774 Sensient Technologies Corp. 12,408 262,181 United Industrial Corp. 12,992 261,789 United Stationers Inc./1/ 9,918 260,843 Lakeland Bancorp Inc. 15,155 258,393 Micromuse Inc./1/ 101,390 255,503 Phoenix Technologies Ltd./1/ 35,204 255,229 Ariba Inc./1/ 188,961 255,097 Retek Inc./1/ 70,802 254,887 McGrath Rentcorp 12,459 253,790 PEC Solutions Inc./1/ 11,400 253,764 Virginia Financial Group Inc. 8,405 252,402 Gabelli Asset Management Inc. "A"/1/ 8,479 251,402 First Financial Bankshares Inc. 6,893 251,181 Hickory Tech Corp. 18,926 250,769 Priceline.com Inc./1/ 171,627 250,575 Arrow Financial Corp. 8,678 248,625 Littelfuse Inc./1/ 14,704 247,321 Mykrolis Corp./1/ 40,185 247,138 Strattec Security Corp./1/ 4,843 247,090 Versicor Inc./1/ 28,972 246,841 Urban Outfitters Inc./1/ 10,097 245,256 La Jolla Pharmaceutical Co./1/ 57,480 244,865 Woodward Governor Co. 5,151 244,147 Endo Pharmaceuticals Holdings Inc./1/ 28,619 244,120 Claire's Stores Inc. 11,158 243,244 MTR Gaming Group Inc./1/ 26,398 243,126 Monolithic System Technology Inc./1/ 24,260 242,600 webMethods Inc./1/ 50,182 242,379 Oak Technology Inc./1/ 75,718 240,783 Informatica Corp./1/ 77,670 240,777 Antigenics Inc./1/ 29,740 240,299 Midwest Banc Holdings Inc. 12,579 240,133 Integral Systems Inc./1/ 12,562 240,060 Vital Sign Inc. 8,054 239,284 Ameristar Casinos Inc./1/ 12,593 238,763 MGI Pharma Inc./1/ 34,040 238,280 Eclipsys Corp./1/ 46,859 238,044 Wild Oats Markets Inc./1/ 26,165 237,578 Bel Fuse Inc. "B" 11,067 237,387 Schedules of Investments 75 Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Possis Medical Inc./1/ 23,246 $ 237,342 Hologic Inc./1/ 24,215 237,307 EPIQ Systems Inc./1/ 13,420 236,997 On Assignment Inc./1/ 28,612 236,621 Boyd Gaming Corp./1/ 12,645 236,082 American Healthways Inc./1/ 14,509 234,611 Middlesex Water Co. 10,419 234,427 ScanSoft Inc./1/ 70,560 232,848 WSFS Financial Corp. 8,312 232,736 Ventas Inc. 17,406 232,370 Cray Inc./1/ 58,790 232,220 Tejon Ranch Co./1/ 9,514 232,046 Kelly Services Inc. "A" 10,645 230,677 Crawford & Co. "B" 35,973 226,990 F5 Networks Inc./1/ 30,012 226,591 FalconStor Software Inc./1/ 46,171 224,853 Advanced Digital Information Corp./1/ 46,694 224,131 Advanced Marketing Services Inc. 16,251 224,101 Excel Technology Inc./1/ 11,891 223,670 Shenandoah Telecommunications Co. 4,407 223,611 Energy Conversion Devices Inc./1/ 20,326 220,537 Net.B@nk Inc./1/ 21,163 220,307 TALX Corp. 16,721 220,216 Microsemi Corp./1/ 39,178 219,789 SonoSite Inc./1/ 19,134 219,658 Molecular Devices Corp./1/ 17,514 219,100 Midway Games Inc./1/ 39,605 217,035 Isle of Capri Casinos Inc./1/ 12,994 216,740 Aaon Inc./1/ 12,777 216,186 MatrixOne Inc./1/ 49,594 215,238 Tractor Supply Co./1/ 6,770 215,151 Metro One Telecommunications Inc./1/ 25,133 213,630 Spartech Corp. 10,086 213,420 Cobalt Corp./1/ 12,778 213,393 iDine Rewards Network Inc./1/ 23,037 213,092 Wind River Systems Inc./1/ 66,174 213,080 Pixelworks Inc./1/ 40,994 211,119 AtheroGenics Inc./1/ 33,723 211,106 General Communication Inc. "A"/1/ 56,101 210,940 InterCept Inc./1/ 21,239 210,054 Learning Tree International Inc./1/ 14,244 209,244 Eon Labs Inc./1/ 9,693 209,175 Renaissance Learning Inc./1/ 14,701 208,901 Exact Sciences Corp./1/ 15,506 207,315 MRO Software Inc./1/ 23,826 207,286 Immucor Inc./1/ 12,714 206,603 Global Imaging Systems Inc./1/ 10,867 205,169 Acuity Brands Inc. 16,697 204,705 Tuesday Morning Corp./1/ 11,238 204,644 Salix Pharmaceuticals Ltd./1/ 24,186 204,130 City Bank 7,038 203,680 Nu Skin Enterprises Inc. "A" 16,688 203,594 Array BioPharma Inc./1/ 26,074 203,116 Palm Harbor Homes Inc./1/ 17,490 203,076 TRC Companies Inc./1/ 11,825 202,790 eResearch Technology Inc./1/ 10,980 202,581 Palm Inc./1/ 273,399 202,315 GlobeSpanVirata Inc./1/ 85,489 201,754 Quaker Chemical Corp. 10,482 201,674 Kulicke & Soffa Industries Inc./1/ 66,906 200,718 Advanced Energy Industries Inc./1/ 22,495 200,205 Bryn Mawr Bank Corp. 5,059 199,729 Men's Wearhouse Inc. (The)/1/ 13,574 199,538 Intrado Inc./1/ 20,650 199,479 Hancock Fabrics Inc. 12,284 198,387 Orbital Sciences Corp./1/ 58,326 198,308 Tanger Factory Outlet Centers Inc. 7,063 197,623 Hibbet Sporting Goods Inc./1/ 9,502 197,167 Independent Bank Corp. (Michigan) 5,904 195,422 Western Wireless Corp. "A"/1/ 72,363 195,380 CIMA Labs Inc./1/ 7,743 194,736 Aksys Ltd./1/ 34,539 193,764 Beverly Enterprises Inc./1/ 79,723 192,930 Interchange Financial Services Corp. 11,644 192,708 Trex Co. Inc./1/ 7,044 192,583 VIVUS Inc./1/ 44,508 192,275 Tyler Technologies Inc./1/ 43,611 191,888 Concurrent Computer Corp./1/ 84,074 191,689 76 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Entrust Inc./1/ 61,038 $ 191,659 Ultimate Electronics Inc./1/ 14,934 190,409 Interpore International/1/ 23,414 189,653 Courier Corp. 4,982 189,311 Exult Inc./1/ 64,147 189,234 Diversa Corp./1/ 22,069 188,249 Cubist Pharmaceuticals Inc./1/ 36,761 187,849 Racing Champions Corp./1/ 11,494 187,812 Integrated Defense Technologies Inc./1/ 9,531 187,761 Northwest Bancorp Inc. 14,718 187,360 Skechers U.S.A. Inc. "A"/1/ 19,577 186,765 Crown Castle International Corp./1/ 86,008 186,637 Radiant Systems Inc./1/ 23,305 186,440 Advisory Board Co. (The)/1/ 6,293 186,399 K-Swiss Inc. "A" 8,722 186,389 First State Bancorp 7,560 186,354 Central Coast Bancorp/1/ 10,063 186,065 Universal Corp. 5,302 185,941 Riviana Foods Inc. 8,098 185,444 ILEX Oncology Inc./1/ 38,998 185,240 Kaydon Corp. 9,191 184,188 LTX Corp./1/ 40,381 184,137 Transaction Systems Architects Inc. "A"/1/ 29,618 183,632 Luminex Corp./1/ 26,053 183,413 Daktronics Inc./1/ 19,114 183,303 Artisan Components Inc./1/ 20,084 182,945 Nash Finch Co. 13,398 182,213 Republic Bancorp Inc. 14,005 182,065 aaiPharma Inc./1/ 15,169 181,892 Primedia Inc./1/ 130,652 181,606 Community Banks Inc. 6,747 181,089 ProBusiness Services Inc./1/ 28,602 181,051 AstroPower Inc./1/ 25,415 180,446 VCA Antech Inc./1/ 14,620 180,411 Playboy Enterprises Inc. "B"/1/ 18,840 180,110 J&J Snack Foods Corp./1/ 4,874 179,607 Southwest Water Co. 12,573 179,291 Crompton Corp. 17,720 178,086 White Electronic Designs Corp./1/ 23,769 178,030 Hanmi Financial Corp./1/ 11,844 177,660 MEMC Electronics Materials Inc./1/ 53,481 177,557 OmniVision Technologies Inc./1/ 26,933 177,488 Credence Systems Corp./1/ 20,420 176,837 Tetra Technologies Inc./1/ 8,746 176,232 Western Gas Resources Inc. 5,600 175,000 Boston Beer Co. Inc. "A"/1/ 12,548 174,417 Radiologix Inc./1/ 27,251 174,406 Humboldt Bancorp 14,548 174,285 FuelCell Energy Inc./1/ 27,613 173,962 Arrow International Inc. 5,377 172,978 General Cable Corp. 44,852 172,680 Elizabeth Arden Inc./1/ 14,393 172,572 Texas Biotech Corp./1/ 56,393 172,563 CCC Information Services Group Inc./1/ 13,170 172,132 Impax Laboratories Inc./1/ 35,317 171,641 Friedman Billings Ramsey Group Inc. "A"/1/ 16,918 171,379 Capitol Bancorp Ltd. 9,729 169,479 Del Monte Foods Co./1/ 20,716 169,250 Universal Electronics Inc./1/ 18,730 167,634 Chattem Inc./1/ 4,105 167,607 Orthologic Corp./1/ 43,224 167,268 Systems & Computer Technology Corp./1/ 23,889 167,223 CoorsTek Inc./1/ 11,139 167,085 Intertan Inc./1/ 23,880 166,682 Drexler Technology Corp./1/ 11,461 166,643 First Community Bancshares Inc. 5,613 165,359 Magma Design Automation Inc./1/ 18,518 165,181 Cholestech Corp./1/ 15,928 165,173 Sharper Image Corp./1/ 8,632 165,044 Buca Inc./1/ 20,624 164,992 Verity Inc./1/ 16,537 164,543 Quixote Corp. 8,918 164,537 Quicksilver Resources Inc./1/ 9,110 163,980 Meridian Medical Technologies Inc./1/ 4,561 163,968 Alexander's Inc./1/ 2,686 163,846 First Horizon Pharmaceutical Corp./1/ 30,218 163,177 Schedules of Investments 77 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ WFS Financial Inc./1/ 7,846 $ 162,726 PetroQuest Energy Inc./1/ 36,700 162,214 Bei Technologies Inc. 14,746 162,206 CoBiz Inc. 10,057 161,918 E.piphany Inc./1/ 44,909 161,672 First National Corp. 5,846 161,350 Gorman-Rupp Co. (The) 6,917 161,166 Marvel Enterprises Inc./1/ 23,017 161,119 Carreker Corp./1/ 26,186 160,520 Whitehall Jewellers Inc./1/ 15,131 159,178 TriZetto Group Inc. (The)/1/ 31,651 157,622 OraSure Technologies Inc./1/ 35,499 157,580 OSI Systems Inc./1/ 9,070 156,956 Young Innovations Inc./1/ 5,849 156,870 Children's Place Retail Stores Inc. (The)/1/ 15,497 156,520 D&K Healthcare Resources Inc. 17,462 156,285 Penwest Pharmaceuticals Co./1/ 18,734 156,054 Interwoven Inc./1/ 77,591 155,803 Quidel Corp./1/ 34,830 155,690 Trust Co. of New Jersey (The) 6,109 155,474 Frontier Airlines Inc./1/ 31,701 154,701 Boyds Collection Ltd. (The)/1/ 24,016 154,663 @Road Inc./1/ 28,395 153,333 Florida Rock Industries Inc. 5,005 152,953 Mesa Air Group Inc./1/ 41,821 152,647 Coastal Financial Corp. 11,233 152,095 Kosan Biosciences Inc./1/ 23,256 152,094 USB Holding Co. Inc. 8,238 151,826 Brooks-PRI Automation Inc./1/ 13,251 151,724 Cascade Natural Gas Corp. 7,700 151,690 Curative Health Services Inc./1/ 13,954 151,401 Gart Sports Co./1/ 8,009 151,130 Peet's Coffee & Tea Inc./1/ 11,786 150,861 PrivateBancorp Inc. 4,932 150,771 7-Eleven Inc./1/ 17,571 150,583 infoUSA Inc./1/ 34,710 150,294 RPC Inc. 15,114 149,629 Meritage Corp./1/ 4,220 149,599 Aeropostale Inc./1/ 9,648 148,579 AEP Industries Inc./1/ 5,492 148,449 Columbia Bancorp 7,838 147,903 NetScreen Technologies Inc./1/ 13,619 147,766 Cadiz Inc./1/ 49,127 147,381 Cascade Bancorp 10,805 147,380 Kensey Nash Corp./1/ 9,785 147,186 Agile Software Corp./1/ 22,911 146,860 Supertex Inc./1/ 14,054 146,162 SRA International Inc. "A"/1/ 5,105 146,156 Deltic Timber Corp. 6,641 145,969 Spartan Motors Inc. 12,869 145,420 Valmont Industries Inc. 6,225 145,354 OceanFirst Financial Corp. 7,052 145,271 EGL Inc./1/ 13,186 145,178 Option Care Inc./1/ 16,317 144,405 II-VI Inc./1/ 10,796 144,127 NN Inc. 15,386 142,320 Global Power Equipment Group Inc./1/ 30,202 141,949 Siliconix Inc./1/ 7,962 141,485 American Tower Corp./1/ 88,847 141,267 Harmonic Inc./1/ 80,724 141,267 ChipPAC Inc./1/ 65,520 140,147 Sports Resorts International Inc./1/ 33,440 139,445 Bentley Pharmaceuticals Inc./1/ 16,390 139,315 Universal Display Corp./1/ 23,085 138,741 Centene Corp./1/ 5,191 138,548 American Pharmaceutical Partners Inc./1/ 8,476 138,413 Horizon Organic Holding Corp./1/ 8,819 137,576 LSI Industries Inc. 13,560 137,498 Sports Authority Inc. (The)/1/ 23,012 137,382 Virage Logic Corp./1/ 14,568 137,376 Cepheid Inc./1/ 35,583 136,995 Glatfelter Co. 11,849 136,856 Dril-Quip Inc./1/ 8,116 136,755 MCG Capital Corp. 10,296 135,701 j2 Global Communications Inc./1/ 6,813 135,511 First South Bancorp Inc. 3,795 135,292 Oneida Ltd. 9,704 135,177 Mothers Work Inc./1/ 3,542 134,702 U.S. Physical Therapy Inc./1/ 12,733 134,333 78 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Wackenhut Corrections Corp./1/ 11,778 $ 133,563 Susquehanna Bancshares Inc. 6,150 133,148 CuraGen Corp./1/ 31,396 132,491 NYFIX Inc./1/ 33,971 132,147 ParkerVision Inc./1/ 11,610 131,193 Harvest Natural Resources Inc./1/ 24,152 131,145 Princeton Review Inc. (The)/1/ 21,816 130,896 Triad Guaranty Inc./1/ 3,755 130,749 Vignette Corp./1/ 163,116 130,656 AsiaInfo Holdings Inc./1/ 39,176 130,652 Geron Corp./1/ 33,497 130,638 Stanley Furniture Co. Inc./1/ 6,147 130,562 Arctic Cat Inc. 9,324 130,163 SpectraLink Corp./1/ 22,687 129,089 SOURCECORP Inc./1/ 6,324 129,073 American Home Mortgage Holdings Inc. 11,690 128,941 RMH Teleservices Inc./1/ 15,784 128,797 SeaChange International Inc./1/ 18,737 128,723 Galyan's Trading Co./1/ 12,807 128,198 GSI Commerce Inc./1/ 25,355 128,043 Rudolph Technologies Inc./1/ 12,414 127,740 Secure Computing Corp./1/ 39,871 127,587 CTS Corp. 27,733 127,572 General Binding Corp./1/ 8,028 127,244 Lakeland Financial Corp. 5,358 126,931 Alabama National Bancorp 2,782 125,969 Digene Corp./1/ 15,907 125,665 Sycamore Networks Inc./1/ 53,214 125,053 PLATO Learning Inc./1/ 18,750 124,687 Digimarc Corp./1/ 10,667 124,484 Ariad Pharmaceuticals Inc./1/ 39,362 124,384 Genencor International Inc./1/ 13,051 124,115 CardioDynamics International Corp./1/ 43,295 123,824 QRS Corp./1/ 18,490 122,589 Aftermarket Technology Corp./1/ 9,422 121,826 Manugistics Group Inc./1/ 43,663 121,820 Prosperity Bancshares Inc. 7,047 120,010 Nationwide Health Properties Inc. 7,033 119,913 OSI Pharmaceuticals Inc./1/ 7,064 119,876 WCI Communities Inc./1/ 9,413 119,545 Ixia/1/ 29,150 119,515 Cardiac Science Inc./1/ 60,355 119,503 Harbor Florida Bancshares Inc. 5,841 119,448 Liberate Technologies/1/ 76,411 119,201 Jones Lang LaSalle Inc./1/ 5,780 118,837 Lifeline Systems Inc./1/ 5,387 118,514 1-800-FLOWERS.COM Inc./1/ 16,744 117,208 Columbia Laboratories Inc./1/ 26,025 117,112 Lexar Media Inc./1/ 44,073 116,793 Research Frontiers Inc./1/ 13,011 116,579 Peoples Bancorp Inc. 4,518 116,113 LabOne Inc./1/ 7,171 115,883 DocuCorp International Inc./1/ 10,682 115,579 Tanox Inc./1/ 10,976 115,248 Triangle Pharmaceuticals Inc./1/ 42,600 115,063 Power-One Inc./1/ 38,599 115,025 Kenneth Cole Productions "A"/1/ 5,666 115,020 Omnicell Inc./1/ 19,669 114,867 Merix Corp./1/ 13,951 113,701 ONYX Software Corp./1/ 59,476 113,599 Credit Acceptance Corp./1/ 13,827 113,381 Wabtec Corp. 8,047 113,302 World Wrestling Entertainment Inc./1/ 13,519 113,154 Keynote Systems Inc./1/ 17,233 112,876 Semitool Inc./1/ 21,803 112,285 Granite State Bankshares Inc. 3,322 112,250 Overland Storage Inc./1/ 10,270 111,532 Clark/Bardes Inc./1/ 6,236 110,938 Bob Evans Farms Inc. 4,678 110,869 Party City Corp./1/ 8,046 110,632 Akamai Technologies Inc./1/ 133,197 110,554 Ambassadors Group Inc./1/ 7,473 110,003 Viewpoint Corp./1/ 50,394 109,859 MemberWorks Inc./1/ 6,297 109,694 Exploration Company of Delaware (The)/1/ 21,111 109,566 Investors Real Estate Trust 10,310 109,183 I-many Inc./1/ 54,582 109,164 Concord Communications Inc./1/ 21,593 109,045 Schedules of Investments 79 Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Restoration Hardware Inc./1/ 24,221 $ 108,994 MAPICS Inc./1/ 19,455 108,948 New Focus Inc./1/ 40,344 108,929 Steak n Shake Company (The)/1/ 9,901 108,911 Embrex Inc./1/ 9,778 108,536 Sanderson Farms Inc. 6,771 108,336 Witness Systems Inc./1/ 18,544 107,926 Plug Power Inc./1/ 22,445 107,444 Presstek Inc./1/ 41,636 106,172 Haverty Furniture Companies Inc. 8,491 106,137 Acacia Research Corp./1/ 26,727 106,133 Westcorp Inc. 5,249 104,980 Genesee & Wyoming Inc. "A"/1/ 4,672 103,952 Acclaim Entertainment Inc./1/ 94,414 103,855 Durect Corp./1/ 33,451 103,698 Viasat Inc./1/ 16,445 103,604 Dynamics Research Corp./1/ 7,032 102,527 Vintage Petroleum Inc. 9,485 102,438 Schawk Inc. 10,422 102,344 APAC Customer Services Inc./1/ 35,120 102,199 Xicor Inc./1/ 28,227 101,899 Stein Mart Inc./1/ 17,372 101,452 Pacific Union Bank/1/ 9,049 101,439 Gables Residential Trust 3,790 101,231 New Jersey Resources Corp. 3,072 101,069 EMS Technologies Inc./1/ 9,816 100,712 Aspen Technology Inc./1/ 33,545 100,635 MFA Mortgage Investments Inc. 12,419 100,594 Esperion Therapeutics Inc./1/ 17,550 100,386 Administaff Inc./1/ 26,068 100,362 Sterling Bancorp 3,779 100,257 Beasley Broadcast Group Inc. "A"/1/ 7,963 100,015 Regent Communications Inc./1/ 19,683 99,990 Penford Corp. 7,325 98,887 SeeBeyond Technology Corp./1/ 70,618 98,865 Old Second Bancorp Inc. 2,586 98,733 Chicago Pizza & Brewery Inc./1/ 14,315 98,630 Keithley Instruments Inc. 8,099 98,403 Women First HealthCare Inc./1/ 20,965 98,116 TriCo Bancshares 3,878 98,113 Bradley Pharmaceuticals Inc./1/ 11,164 97,797 Bioreliance Corp./1/ 4,696 97,771 Vitesse Semiconductor Corp./1/ 143,601 97,649 Escalade Inc./1/ 4,903 97,325 CNET Networks Inc./1/ 88,419 97,261 Computer Network Technology Corp./1/ 19,340 97,087 Euronet Worldwide Inc./1/ 19,294 97,049 Charlotte Russe Holding Inc./1/ 10,212 97,014 CPI Corp. 7,028 96,635 National Healthcare Corp./1/ 5,377 96,517 Del Laboratories Inc./1/ 5,329 96,348 First Consulting Group Inc./1/ 17,767 96,297 ExpressJet Holdings Inc./1/ 10,422 95,882 Dress Barn Inc./1/ 6,144 95,601 Martha Stewart Living Omnimedia Inc. "A"/1/ 13,550 94,850 Marine Products Corp. 8,924 94,684 Provident Bancorp Inc. 3,321 94,482 Park Electrochemical Corp. 5,654 94,422 Nara Bancorp Inc. 5,349 92,377 Franklin Financial Corp. 3,725 91,784 Packeteer Inc./1/ 30,521 91,563 Cantel Medical Corp./1/ 9,020 91,102 Inverness Medical Innovations Inc./1/ 9,573 90,848 Hollywood Casino Corp. "A"/1/ 7,469 90,226 HealthTronics Surgical Services Inc./1/ 10,760 90,061 TiVo Inc./1/ 24,968 89,885 LookSmart Ltd./1/ 92,569 89,792 Lydall Inc./1/ 7,600 89,680 Maxtor Corp./1/ 34,285 89,484 EnergySouth Inc. 3,495 89,122 Kyphon Inc./1/ 6,748 89,074 Syntel Inc./1/ 7,547 88,828 Nastech Pharmaceutical Co. Inc./1/ 10,666 88,314 Monterey Pasta Co./1/ 18,992 88,313 Biopure Corp./1/ 25,213 88,245 Champps Entertainment Inc./1/ 11,266 88,213 Merchants Bancshares Inc. 3,544 87,537 HealthExtras Inc./1/ 20,622 87,231 OPNET Technologies Inc./1/ 13,717 86,829 80 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Pain Therapeutics Inc./1/ 21,739 $ 86,304 PDF Solutions Inc./1/ 16,166 85,518 Urologix Inc./1/ 18,741 85,459 Gaiam Inc./1/ 7,448 85,429 MedSource Technologies Inc./1/ 11,343 85,299 Dynacq International Inc./1/ 7,311 85,100 ICT Group Inc./1/ 4,175 84,544 SS&C Technologies Inc./1/ 10,617 84,405 Tropical Sportswear International Corp./1/ 6,499 84,357 US Unwired Inc. "A"/1/ 120,504 84,353 Lifecore Biomedical Inc./1/ 13,550 84,010 First Financial Holdings Inc. 3,099 83,890 WESCO International Inc./1/ 19,203 82,573 Transmeta Corp./1/ 85,082 82,530 Bank of the Ozarks Inc. 3,595 82,325 Deb Shops Inc. 3,286 81,920 Datastream Systems Inc./1/ 16,232 81,160 Vicor Corp./1/ 11,277 80,631 PAREXEL International Corp./1/ 9,442 80,257 Inet Technologies Inc./1/ 15,807 80,141 IXYS Corp./1/ 15,909 80,022 Medical Staffing Network Holdings Inc./1/ 5,265 79,870 Closure Medical Corp./1/ 7,156 79,861 Indevus Pharmaceuticals Inc./1/ 51,372 79,627 Benihana Inc./1/ 6,420 79,608 Commonwealth Bancorp Inc. 1,714 78,844 BE Aerospace Inc./1/ 16,522 78,645 Mission West Properties Inc. 7,036 77,959 Watts Industries Inc. "A" 4,752 77,933 Tripos Inc./1/ 9,908 77,778 Bruker Daltonics Inc./1/ 15,199 77,667 American National Bankshares Inc. 2,824 77,547 WatchGuard Technologies Inc./1/ 17,623 77,541 Arden Group Inc. "A"/1/ 1,396 77,492 Sonic Innovations Inc./1/ 14,722 77,290 Vastera Inc./1/ 35,839 77,054 Openwave Systems Inc./1/ 124,272 77,049 Allscripts Healthcare Solutions Inc./1/ 26,834 76,745 Advanced Tissue Sciences Inc./1/ 99,563 76,664 Somera Communications Inc./1/ 37,309 76,483 MapInfo Corp./1/ 19,329 76,350 Checkers Drive-in Restaurants Inc./1/ 9,475 75,800 1-800 CONTACTS INC./1/ 7,577 75,770 Alaris Medical Inc./1/ 15,767 75,209 SonicWALL Inc./1/ 27,346 75,201 CBL & Associates Properties Inc. 1,940 75,175 C-COR.net Corp./1/ 19,839 73,603 Caliper Technologies Corp./1/ 17,427 73,019 Riverstone Networks Inc./1/ 142,611 72,732 Sypris Solutions Inc./1/ 6,701 72,706 Q-Med Inc./1/ 10,381 72,563 Tasty Baking Company 5,670 72,293 Harvard Bioscience Inc./1/ 23,647 71,650 Trikon Technologies Inc./1/ 12,440 70,659 First of Long Island Corp. 2,123 70,590 Roxio Inc./1/ 23,263 70,487 Bebe Stores Inc./1/ 5,965 70,447 Catapult Communications Corp./1/ 7,216 70,356 Acme Communications Inc./1/ 8,992 70,138 GrafTech International Ltd./1/ 9,612 69,687 Aether Systems Inc./1/ 25,911 69,441 Hanger Orthopedic Group Inc./1/ 4,364 69,388 Gladstone Capital Corp. 4,101 69,225 Russ Berrie & Co. Inc. 2,304 69,143 Saul Centers Inc. 2,952 68,545 BWAY Corporation/1/ 4,916 68,332 Computer Programs & Systems Inc./1/ 3,170 67,775 LendingTree Inc./1/ 4,585 67,583 American States Water Co. 2,546 66,756 AVANIR Pharmaceuticals "A"/1/ 57,798 66,468 Quadramed Corp./1/ 36,688 66,405 Zymogenetics Inc./1/ 8,221 65,768 Finisar Corp./1/ 94,972 65,531 DuPont Photomasks Inc./1/ 2,841 64,718 Weis Markets Inc. 1,928 64,549 Allegiance Telecom Inc./1/ 77,742 64,526 MIPS Technologies Inc. "A"/1/ 48,463 64,407 Mid-State Bancshares 3,927 64,403 FAO Inc./1/ 22,498 64,119 Schedules of Investments 81 Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Zygo Corp./1/ 14,995 $ 63,579 MRV Communications Inc./1/ 74,533 63,353 Redback Networks Inc./1/ 204,220 63,308 Chemical Financial Corp. 2,184 63,030 NASB Financial Inc. 3,027 62,931 Second Bancorp Inc. 2,348 62,762 EarthShell Corp./1/ 89,127 62,389 Value Line Inc. 1,576 61,464 P.A.M. Transportation Services Inc./1/ 3,221 61,457 Thomas & Betts Corp./1/ 4,324 60,925 Central Parking Corp. 3,025 60,923 World Fuel Services Corp. 3,155 60,892 Epix Medical Inc./1/ 13,360 60,521 Shop At Home Inc./1/ 25,830 60,442 Kos Pharmaceuticals Inc./1/ 5,375 60,195 Hanover Compressor Co./1/ 7,220 59,926 Endocardial Solutions Inc./1/ 18,538 59,878 Universal Health Realty Income Trust 2,304 59,789 Virbac Corp./1/ 11,748 59,680 RITA Medical Systems Inc./1/ 13,447 59,019 C&D Technologies Inc. 4,009 58,772 StorageNetworks Inc./1/ 46,930 58,663 Medis Technologies Ltd./1/ 13,591 58,169 Young Broadcasting Inc. "A"/1/ 6,703 58,115 CryoLife Inc./1/ 22,220 57,994 Monarch Casino & Resort Inc./1/ 4,349 57,929 EMCOR Group Inc./1/ 1,162 57,751 Horizon Offshore Inc./1/ 13,664 57,539 Sykes Enterprises Inc./1/ 13,665 57,530 Royal Bancshares of Pennsylvania "A" 3,122 57,133 Rigel Pharmaceuticals Inc./1/ 35,628 57,005 Actuate Corp./1/ 59,958 56,960 Dover Downs Gaming & Entertainment Inc. 6,992 56,915 Provident Bankshares Corp. 2,622 56,583 United Online Inc./1/ 5,894 56,523 Coca-Cola Bottling Co. Consolidated 1,202 56,374 First Financial Bancorp 3,155 56,191 Synplicity Inc./1/ 12,936 55,754 Seacoast Banking Corp. of Florida 2,899 55,603 NetFlix Inc./1/ 5,731 55,591 NIC Inc./1/ 32,487 55,553 Green Mountain Coffee Inc./1/ 4,304 55,479 Peregrine Pharmaceuticals Inc./1/ 131,836 55,371 ANADIGICS Inc./1/ 25,944 55,261 Aphton Corp./1/ 24,597 55,097 Triton PCS Holdings Inc. "A"/1/ 26,279 54,923 Wireless Facilities Inc./1/ 12,383 54,857 National Beverage Corp./1/ 4,012 54,804 Bone Care International Inc./1/ 9,481 54,800 St. Mary Land & Exploration Co. 2,285 54,611 Centex Construction Products Inc. 1,520 54,264 Leeds Federal Bankshares Inc. 1,713 54,182 Progenics Pharmaceuticals Inc./1/ 10,652 53,473 NATCO Group Inc. "A"/1/ 7,072 53,252 RadiSys Corp./1/ 13,404 53,080 Griffon Corp./1/ 4,978 53,016 Zomax Inc./1/ 13,546 52,829 VIB Corp./1/ 3,526 52,784 F&M Bancorp 1,667 52,677 Century Bancorp Inc. "A" 1,984 52,655 REMEC Inc./1/ 15,386 52,466 Granite Construction Inc. 3,146 51,846 Collins & Aikman Corp./1/ 14,347 51,506 Sonus Networks Inc./1/ 245,120 51,475 Camden National Corp. 1,978 51,428 Barnes Group Inc. 2,544 51,109 Lannett Co. Inc./1/ 5,049 50,742 Ciphergen Biosystems Inc./1/ 16,880 50,640 Paxson Communications Corp./1/ 22,832 50,230 First Oak Brook Bancshares "A" 1,689 50,214 Altiris Inc./1/ 5,039 50,138 SPSS Inc./1/ 4,310 49,867 Lawson Software Inc./1/ 14,007 49,585 Arris Group Inc./1/ 13,376 49,491 Bio-Reference Laboratories Inc./1/ 7,573 49,224 Zenith National Insurance Corp. 1,844 48,718 Seattle Genetics Inc./1/ 14,854 47,830 Foamex International Inc./1/ 8,668 47,674 Shoe Carnival Inc./1/ 3,328 47,424 82 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ First Republic Bank/1/ 2,178 $ 47,371 Seacoast Financial Services Corp. 2,345 47,064 Sapient Corp./1/ 45,487 46,852 Cache Inc./1/ 3,522 46,843 Grace (W.R.) & Co./1/ 28,906 46,250 Private Media Group Inc./1/ 19,543 46,121 dELiA*s Corp. "A"/1/ 43,899 46,094 Heidrick & Struggles International Inc./1/ 3,029 46,011 Ulticom Inc./1/ 8,313 45,971 Netegrity Inc./1/ 22,253 45,841 Embarcadero Technologies Inc./1/ 10,854 45,478 Powell Industries Inc./1/ 2,415 45,402 Bally Total Fitness Holding Corp./1/ 4,581 45,398 Sanchez Computer Associates Inc./1/ 18,593 45,367 Electroglas Inc./1/ 22,655 45,310 NBC Capital Corp. 1,805 45,306 Centillium Communications Inc./1/ 37,566 45,079 Woodhead Industries Inc. 4,086 45,028 Encore Wire Corp./1/ 5,114 45,003 Pegasystems Inc./1/ 8,231 44,941 Chordiant Software Inc./1/ 48,032 44,670 August Technology Corp./1/ 9,892 44,514 Covansys Corporation/1/ 25,945 44,106 Enterasys Networks Inc./1/ 33,893 44,061 Hexcel Corp./1/ 17,482 43,355 SpeechWorks International Inc./1/ 18,758 43,143 Unitil Corp. 1,584 43,006 Matria Healthcare Inc./1/ 4,999 42,891 Bank of Granite Corp. 2,372 42,696 Sangamo BioSciences Inc./1/ 21,429 42,215 Applied Films Corporation/1/ 3,849 42,108 Analogic Corp. 1,005 42,099 Valhi Inc. 4,273 41,961 Vitria Technology Inc./1/ 53,215 41,508 Keystone Automotive Industries Inc./1/ 2,494 41,151 Handspring Inc./1/ 43,497 40,887 Med-Design Corp. (The)/1/ 11,573 40,853 Insight Communications Co. Inc./1/ 4,368 40,317 American Superconductor Corp./1/ 14,745 39,811 Flowers Foods Inc./1/ 1,745 39,664 CKE Restaurant Inc./1/ 9,915 39,660 Syntroleum Corp./1/ 23,800 39,508 Bridgeford Food Corp. 3,912 39,355 International Multifoods Corp./1/ 2,004 39,278 NaPro BioTherapeutics Inc./1/ 34,663 38,823 Portal Software Inc./1/ 161,120 38,669 Verint Systems Inc./1/ 4,456 38,451 RSA Security Inc./1/ 11,360 38,170 Saxon Capital Inc./1/ 3,377 37,383 Jo-Ann Stores Inc./1/ 1,330 37,293 CCBT Financial Companies Inc. 1,423 37,240 Novadigm Inc./1/ 18,588 37,176 Tredegar Corp. 2,200 36,850 ClearOne Communications Inc./1/ 10,789 36,790 LodgeNet Entertainment Corp./1/ 4,752 36,400 DiamondCluster International Inc. "A"/1/ 11,116 36,238 4Kids Entertainment Inc./1/ 1,527 36,236 Neurogen Corp./1/ 4,503 36,159 Northwest Pipe Co./1/ 2,010 35,959 Allegiant Bancorp Inc. 2,208 35,880 LeCroy Corp./1/ 3,979 35,652 Apex Mortgage Capital Inc. 3,183 35,618 IMCO Recycling Inc./1/ 5,881 35,580 Nassda Corp./1/ 6,814 35,569 Nuance Communications Inc./1/ 20,759 35,290 MB Financial Inc. 1,038 34,773 Gulf Island Fabrication Inc./1/ 2,948 34,668 Summit Bancshares Inc. 1,643 34,585 Factory 2-U Stores Inc./1/ 17,664 34,268 Charter Financial Corp. 1,219 34,205 eUniverse Inc./1/ 11,549 33,839 Centennial Bancorp 3,827 33,218 Sizeler Property Investors Inc. 3,302 33,218 Avanex Corp./1/ 24,226 33,190 Thomas Industries Inc. 1,338 33,182 Farmer Brothers Co. 102 33,150 ON Semiconductor Corp./1/ 26,491 33,114 Active Power Inc./1/ 24,692 33,087 Capstone Turbine Corp./1/ 55,087 32,501 Schedules of Investments 83 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ MCSi Inc./1/ 6,557 $ 32,457 Inrange Technologies Corp./1/ 11,629 32,445 First Sentinel Bancorp Inc. 2,364 31,985 Inforte Corp./1/ 6,104 31,252 California Water Service Group 1,221 31,172 TTM Technologies Inc./1/ 19,635 30,827 Inter Parfums Inc. 4,449 29,728 Cirrus Logic Inc./1/ 11,577 29,521 CompuCredit Corp./1/ 5,530 29,309 State Bancorp Inc. 1,608 28,542 Flushing Financial Corp. 1,709 28,506 Flagstar Bancorp Inc. 1,373 28,421 FNB Corp. 907 27,863 Wausau-Mosinee Paper Corp. 3,021 27,823 Checkpoint Systems Inc./1/ 2,245 27,726 Cherokee Inc./1/ 1,698 27,389 Knight Trading Group Inc./1/ 7,271 27,266 AXT Inc./1/ 13,092 27,231 Partners Trust Financial Group Inc. 1,946 27,186 SBS Technologies Inc./1/ 3,790 27,136 Pathmark Stores Inc./1/ 2,938 26,883 Tetra Tech Inc./1/ 3,335 26,647 First Federal Capital Corp. 1,345 26,133 Inktomi Corp./1/ 104,362 26,090 Spectrian Corp./1/ 8,843 26,087 Advanced Power Technology Inc./1/ 6,621 25,756 Mobile Mini Inc./1/ 1,980 25,641 EMCORE Corp./1/ 16,785 25,513 PLX Technology Inc./1/ 22,931 25,224 BKF Capital Group Inc./1/ 1,188 25,043 NetScout Systems Inc./1/ 6,739 24,665 Actrade Financial Technologies Ltd./1/,(2) 9,654 24,328 Standard Microsystems Corp./1/ 1,585 24,220 RCN Corp./1/ 47,215 24,080 Farmers Capital Bank Corp. 720 24,026 Therma-Wave Inc./1/ 30,402 24,018 First Essex Bancorp Inc. 712 23,532 Specialty Laboratories Inc./1/ 2,521 23,168 LSB Bancshares Inc. 1,406 23,115 WMS Industries Inc./1/ 1,615 22,772 Coldwater Creek Inc./1/ 1,720 22,670 SureBeam Corporation "A"/1/ 12,484 22,471 Lightbridge Inc./1/ 3,293 22,231 Answerthink Inc./1/ 15,008 21,762 Time Warner Telecom Inc. "A"/1/ 26,596 21,543 Netro Corp./1/ 10,487 21,498 Centennial Communications Corp. "A"/1/ 7,327 21,248 Alliance Imaging Inc./1/ 1,762 21,074 Tellium Inc./1/ 54,989 20,896 Gold Bancorp Inc. 2,140 20,758 Michael Baker Corp./1/ 2,006 20,662 SimpleTech Inc./1/ 9,643 20,540 Jakks Pacific Inc./1/ 1,846 20,526 Virco Manufacturing Corp. 2,110 20,465 Bruker AXS Inc./1/ 9,552 20,059 Flow International Corp./1/ 6,202 20,032 X-Rite Inc. 2,572 19,882 Raindance Communications Inc./1/ 6,384 19,727 Tweeter Home Entertainment Group Inc./1/ 2,843 19,617 PDI Inc./1/ 4,664 18,982 Charles River Associates Inc./1/ 1,109 18,409 Local Financial Corp./1/ 1,331 18,381 Cole National Corp./1/ 1,451 18,210 Exelixis Inc./1/ 3,586 17,751 Irwin Financial Corp. 1,044 17,748 WestPoint Stevens Inc./1/ 17,675 17,322 Kendle International Inc./1/ 2,573 17,239 Digitas Inc./1/ 7,765 17,083 Stratos Lightwave Inc./1/ 46,982 16,914 Paradyne Networks Inc./1/ 12,669 16,850 Manufacturers Services Ltd./1/ 6,173 16,667 Hall Kinion & Associates Inc./1/ 2,734 16,404 Lawson Products Inc. 548 15,974 Standex International Corp. 786 15,940 Illumina Inc./1/ 4,563 15,697 Synaptics Inc./1/ 3,164 15,219 Ultratech Stepper Inc./1/ 1,854 14,999 Pericom Semiconductor Corp./1/ 1,730 14,913 BSB Bancorp Inc. 739 14,713 84 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ AirGate PCS Inc./1/ 32,909 $ 14,480 Sun Bancorp Inc. 644 14,477 Theragenics Corp./1/ 3,228 14,203 Gray Television Inc. "A" 1,052 14,149 DHB Industries Inc./1/ 6,569 13,926 Caminus Corp./1/ 7,583 13,498 Overstock.com Inc./1/ 2,250 13,387 PriceSmart Inc./1/ 664 13,280 William Lyon Homes Inc./1/ 576 13,196 Buckle Inc. (The)/1/ 653 13,125 Nature's Sunshine Products Inc. 1,209 13,093 Three Rivers Bancorp Inc. 812 12,992 BriteSmile Inc./1/ 16,585 12,439 Warwick Community Bancorp 460 12,420 Infogrames Inc./1/ 5,586 12,401 World Acceptance Corp./1/ 1,388 10,993 Steven Madden Ltd./1/ 735 10,584 MetaSolv Inc./1/ 6,901 10,559 Mossimo Inc./1/ 1,718 10,102 Cross Media Marketing Corp./1/ 11,224 8,418 Align Technology Inc./1/ 3,010 8,305 CTB International Corp./1/ 617 7,891 Suntron Corp./1/ 2,302 7,482 Monro Muffler Brake Inc./1/ 413 7,376 3D Systems Corp./1/ 1,063 6,995 Alamosa Holdings Inc./1/ 30,330 6,976 Donnelly Corp. 266 6,892 Optical Communication Products Inc./1/ 8,606 6,627 Liquidmetal Technologies/1/ 823 6,576 Drew Industries Inc./1/ 396 6,158 Res-Care Inc./1/ 1,147 5,689 Dobson Communications Corp. "A"/1/ 16,439 5,096 PC Connection Inc./1/ 1,199 4,868 ATA Holdings Corp./1/ 1,050 3,570 Acterna Corp./1/ 8,817 3,527 Dominion Homes Inc./1/ 163 2,526 Penton Media Inc./1/ 9,386 2,253 DDi Corp./1/ 13,967 2,221 HPL Technologies Inc./1/ 11,500 575 TOTAL COMMON STOCKS (Cost: $495,371,483) 368,484,447 SHORT TERM INSTRUMENTS - 13.12% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 42,229,565 42,229,565 Dreyfus Money Market Fund 2,249,630 2,249,630 Goldman Sachs Financial Square Prime Obligation Fund 697,329 697,329 Providian Temp Cash Money Market Fund 3,224,445 3,224,445 TOTAL SHORT TERM INSTRUMENTS (Cost: $48,400,969) 48,400,969 TOTAL INVESTMENTS IN SECURITIES - 113.04% (Cost $543,772,452) 416,885,416 OTHER ASSETS, LESS LIABILITIES - (13.04%) (48,100,930) ------------ NET ASSETS - 100.00% $368,784,486 ============ /1/ Non-income earning securities. /2/ Security valued at fair value in accordance with procedures approved by the Board of Trustees (Note 1). See notes to financial statements. Schedules of Investments 85 Schedule of Investments (Unaudited) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ COMMON STOCKS - 99.78% Healthcare Realty Trust Inc. 111,234 $ 3,459,413 Worthington Industries Inc. 178,528 3,338,474 AGL Resources Inc. 148,370 3,277,493 WGL Holdings Inc. 128,905 3,082,119 Pan Pacific Retail Properties Inc. 88,408 3,048,308 Realty Income Corp. 88,447 3,020,465 WPS Resources Corp. 83,251 2,950,415 Kennametal Inc. 91,426 2,936,603 Piedmont Natural Gas Co. 81,643 2,895,877 DQE Inc. 189,830 2,847,450 Health Care REIT Inc. 103,455 2,829,494 HRPT Properties Trust 341,971 2,821,261 Service Corp. International/1/ 779,919 2,729,717 ONEOK Inc. 142,286 2,689,205 Crompton Corp. 266,664 2,679,973 Imation Corp./1/ 93,048 2,636,050 Commercial Federal Corp. 120,232 2,617,451 Corn Products International Inc. 89,512 2,573,470 Smucker (J.M.) Co. (The) 67,760 2,486,792 Alexander & Baldwin Inc. 108,320 2,410,120 Great Lakes Chemical Corp. 99,244 2,383,841 Prentiss Properties Trust 81,581 2,360,954 Atmos Energy Corp. 109,600 2,356,400 Payless ShoeSource Inc./1/ 42,847 2,314,166 Cytec Industries Inc./1/ 105,261 2,310,479 Energen Corp. 91,271 2,310,069 Post Properties Inc. 88,768 2,306,193 Yellow Corp./1/ 76,986 2,271,703 South Financial Group Inc. (The) 106,968 2,255,955 Home Properties of New York Inc. 68,877 2,238,502 Crown Cork & Seal Co. Inc./1/ 422,470 2,217,967 Thornbury Mortgage Inc. 117,277 2,203,635 Ohio Casualty Corp./1/ 134,922 2,196,530 Potlatch Corp. 75,328 2,160,407 New Jersey Resources Corp. 65,496 2,154,818 SL Green Realty Corp. 69,904 2,148,849 Electronics For Imaging Inc./1/ 143,953 2,147,779 PacifiCare Health Systems Inc. "A"/1/ 92,472 2,135,178 Charming Shoppes Inc./1/ 315,180 2,127,465 Commerce Group Inc. 65,111 2,106,992 Universal Corp. 59,352 2,081,475 Harleysville Group Inc. 78,608 2,063,460 USFreightways Corp. 71,314 2,045,286 CH Energy Group Inc. 43,477 2,040,376 Tom Brown Inc./1/ 88,689 2,030,978 Novell Inc./1/ 962,641 2,021,546 Minerals Technologies Inc. 54,264 2,011,566 Susquehanna Bancshares Inc. 92,377 1,999,962 Fuller (H.B.) Co. 75,165 1,999,389 Standard-Pacific Corp. 85,276 1,993,753 Nationwide Health Properties Inc. 116,740 1,990,417 LNR Property Corp. 59,549 1,985,959 Northwest Natural Gas Co. 67,527 1,982,593 Bob Evans Farms Inc. 83,614 1,981,652 Kansas City Southern Industries Inc./1/ 159,527 1,978,135 Claire's Stores Inc. 90,463 1,972,093 AnnTaylor Stores Corp./1/ 85,433 1,967,522 Protein Design Labs Inc./1/ 235,614 1,955,596 Southwest Gas Corp. 87,239 1,941,068 CBL & Associates Properties Inc. 50,028 1,938,585 Mueller Industries Inc./1/ 74,613 1,932,477 First Commonwealth Financial Corp. 155,888 1,931,452 Beazer Homes USA Inc./1/ 31,631 1,931,073 Sensient Technologies Corp. 91,275 1,928,641 Charter Municipal Mortgage Acceptance Corp. 109,223 1,924,509 PNM Resources Inc. 96,288 1,906,502 Longs Drug Stores Corp. 81,848 1,889,870 SEACOR SMIT Inc./1/ 46,028 1,886,688 American Financial Holdings Inc. 61,932 1,883,352 Werner Enterprises Inc. 102,115 1,876,874 EMCOR Group Inc./1/ 37,287 1,853,164 Hughes Supply Inc. 63,265 1,843,542 M.D.C. Holdings Inc. 51,394 1,814,208 Louisiana-Pacific Corp./1/ 277,609 1,796,130 PolyOne Corp. 208,854 1,794,056 Terex Corp./1/ 105,526 1,783,389 EarthLink Inc./1/ 331,781 1,771,711 86 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Community First Bankshares Inc. 63,123 $ 1,759,869 La Quinta Corp. 364,970 1,751,856 Wallace Computer Services Inc. 98,842 1,744,561 UMB Financial Corp. 43,734 1,707,375 Anixter International Inc./1/ 82,844 1,706,586 Interstate Bakeries Corp. 64,095 1,703,004 Ventas Inc. 127,121 1,697,065 Waypoint Financial Corp. 100,643 1,696,841 FBR Asset Investment Corp. 54,215 1,694,761 Ralcorp Holdings Inc./1/ 79,545 1,691,922 Tecumseh Products Co. "A" 40,145 1,684,484 Carlisle Companies Inc. 45,770 1,678,844 UICI/1/ 102,421 1,665,365 First Citizens BancShares Inc. "A" 16,136 1,663,331 St. Mary Land & Exploration Co. 69,376 1,658,086 Hancock Holding Co. 35,277 1,657,278 Wolverine World Wide Inc. 110,306 1,654,590 Sierra Pacific Resources 271,044 1,653,368 Millennium Chemicals Inc. 167,058 1,650,533 Arkansas Best Corp./1/ 56,935 1,633,522 LandAmerica Financial Group Inc. 49,280 1,620,819 Liberty Corp. 44,761 1,602,444 Chemical Financial Corp. 55,498 1,601,672 Briggs & Stratton Corp. 42,602 1,599,279 Brandywine Realty Trust 70,712 1,594,556 First Financial Bancorp 89,479 1,593,621 United Stationers Inc./1/ 60,330 1,586,679 Cabot Oil & Gas Corp. "A" 73,559 1,581,518 US Oncology Inc./1/ 194,391 1,576,511 Commercial Net Lease Realty Inc. 97,180 1,566,542 Trinity Industries Inc. 94,926 1,562,482 Pep Boys-Manny, Moe & Jack Inc. 127,422 1,560,920 Gables Residential Trust 58,333 1,558,074 Iomega Corp./1/ 144,762 1,547,506 Kellwood Co. 67,183 1,535,803 Kilroy Realty Corp. 64,508 1,529,485 FelCor Lodging Trust Inc. 118,037 1,514,415 Thomas & Betts Corp./1/ 106,595 1,501,924 UGI Corp. 41,315 1,501,800 Lennox International Inc. 113,321 1,499,237 Westar Energy Inc. 148,516 1,494,071 Selective Insurance Group Inc. 68,653 1,491,830 El Paso Electric Co./1/ 124,289 1,476,553 Airborne Inc. 128,217 1,453,981 Solutia Inc. 278,170 1,452,047 Cleco Corp. 107,670 1,450,315 MPS Group Inc./1/ 249,117 1,444,879 Blyth Inc. 51,629 1,440,449 AMCORE Financial Inc. 65,541 1,439,280 CV Therapeutics Inc./1/ 68,461 1,431,520 Modine Manufacturing Co. 75,175 1,429,829 Florida East Coast Industries Inc. 60,453 1,426,691 Avista Corp. 126,742 1,419,510 Capital Automotive 56,725 1,416,990 Jones Lang LaSalle Inc./1/ 68,894 1,416,461 American Capital Strategies Ltd. 74,480 1,403,203 Coherent Inc./1/ 76,672 1,399,264 OSI Pharmaceuticals Inc./1/ 82,414 1,398,566 Hunt (J.B.) Transport Services Inc./1/ 59,095 1,391,687 Horace Mann Educators Corp. 94,242 1,385,357 Anthracite Capital Inc. 122,007 1,378,679 Reliance Steel & Aluminum Co. 62,954 1,375,545 Choice Hotels International Inc./1/ 59,329 1,371,093 Colonial Properties Trust 37,656 1,362,394 Journal Register Co./1/ 72,252 1,361,950 First Charter Corp. 81,832 1,355,956 Senior Housing Properties Trust 120,630 1,353,469 Texas Industries Inc. 55,700 1,352,396 Schulman (A.) Inc. 78,018 1,352,052 USEC Inc. 215,580 1,349,531 WesBanco Inc. 56,548 1,346,408 Abgenix Inc./1/ 207,374 1,345,857 Banta Corp. 37,584 1,334,232 United Defense Industries Inc./1/ 55,997 1,321,529 Philadelphia Consolidated Holding Corp./1/ 44,651 1,317,205 Landry's Restaurants Inc. 58,178 1,314,241 Quanex Corp. 37,636 1,305,969 Stewart Enterprises Inc. "A"/1/ 255,877 1,304,973 Florida Rock Industries Inc. 42,688 1,304,545 Granite Construction Inc. 79,059 1,302,892 Republic Bancorp Inc. 98,926 1,286,038 Schedules of Investments 87 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Delphi Financial Group Inc. "A" 34,833 $ 1,268,618 Ruddick Corp. 83,154 1,263,109 Provident Bankshares Corp. 58,312 1,258,373 PSS World Medical Inc./1/ 189,075 1,257,349 Flowers Foods Inc./1/ 55,302 1,257,014 Smith (A.O.) Corp. "B" 44,122 1,253,947 Impac Mortgage Holdings Inc. 112,401 1,253,271 OfficeMax Inc./1/ 305,698 1,247,248 Kimball International Inc. "B" 89,811 1,241,188 Southwest Bancorp of Texas Inc./1/ 33,644 1,224,978 Western Gas Resources Inc. 39,066 1,220,813 Genesis Health Ventures Inc./1/ 74,190 1,219,684 Gartner Inc. "A"/1/ 150,563 1,219,560 Southern Union Co./1/ 107,561 1,215,439 Cree Inc./1/ 97,033 1,212,912 Maxtor Corp./1/ 461,597 1,204,768 Seacoast Financial Services Corp. 59,863 1,201,450 Aztar Corp./1/ 90,798 1,199,442 Jack in the Box Inc./1/ 52,502 1,197,046 Casey's General Store Inc. 103,286 1,192,953 Heritage Property Investment Trust Inc. 47,737 1,191,516 Vintage Petroleum Inc. 110,305 1,191,294 FirstFed Financial Corp./1/ 45,792 1,179,144 Federal Signal Corp. 63,693 1,173,225 Texas Regional Bancshares Inc. "A" 34,886 1,168,332 Laclede Group Inc. (The) 50,120 1,167,796 Dycom Industries Inc./1/ 126,853 1,161,973 UniSource Energy Corp. 75,685 1,154,196 Wellman Inc. 84,547 1,154,067 Commercial Metals Co. 64,015 1,147,149 Roadway Corp. 31,218 1,145,076 Summit Properties Inc. 58,687 1,138,528 Cornerstone Realty Income Trust Inc. 127,333 1,133,264 Moog Inc. "A"/1/ 40,058 1,132,039 Alaska Air Group Inc./1/ 63,933 1,131,614 UIL Holdings Corp. 31,764 1,126,034 Unizan Financial Corp. 58,541 1,122,699 Idex Corp. 39,203 1,119,246 Sinclair Broadcast Group Inc. "A"/1/ 81,687 1,119,112 JDN Realty Corp. 92,402 1,116,216 Kindred Healthcare Inc./1/ 30,030 1,112,011 Connecticut Bankshares Inc. 29,912 1,107,641 Ionics Inc./1/ 46,519 1,107,617 Gaylord Entertainment Co. "A"/1/ 58,453 1,105,931 Toro Co. 19,658 1,105,763 G&K Services Inc. "A" 32,665 1,105,710 Overseas Shipholding Group Inc. 72,202 1,103,247 Kaydon Corp. 55,031 1,102,821 Spherion Corp./1/ 156,178 1,101,055 FMC Corp./1/ 42,547 1,098,564 Tower Automotive Inc./1/ 163,411 1,094,854 Hutchinson Technology Inc./1/ 67,281 1,086,588 Curtiss Wright Corp. 18,147 1,085,009 Taubman Centers Inc. 76,202 1,084,354 Tredegar Corp. 64,511 1,080,559 Superior Industries International Inc. 22,948 1,080,392 Black Hills Corp. 41,232 1,079,866 Boyd Gaming Corp./1/ 57,633 1,076,008 Massey Energy Co. 166,567 1,074,357 Viasys Healthcare Inc./1/ 69,127 1,064,556 Wabtec Corp. 75,213 1,058,999 Cell Genesys Inc./1/ 87,241 1,051,254 Regal-Beloit Corp. 61,368 1,050,006 PMA Capital Corp. "A" 69,999 1,049,985 IRT Property Co. 89,054 1,046,384 Credence Systems Corp./1/ 120,740 1,045,608 Corrections Corp. of America/1/ 74,363 1,044,800 Corus Bankshares Inc. 23,769 1,041,320 Dollar Thrifty Automotive Group Inc./1/ 64,811 1,040,217 Triumph Group Inc./1/ 37,116 1,039,248 South Jersey Industries Inc. 31,766 1,037,478 Nu Skin Enterprises Inc. "A" 84,785 1,034,377 Western Digital Corp./1/ 219,783 1,032,980 Thoratec Labs Corp./1/ 130,456 1,022,775 ESCO Technologies Inc./1/ 31,654 1,022,424 Sunrise Assisted Living Inc./1/ 47,262 1,013,770 W Holding Co. Inc. 62,190 1,013,697 88 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Sovran Self Storage Inc. 33,192 $ 1,009,701 Tetra Tech Inc./1/ 126,262 1,008,833 M/I Schottenstein Homes Inc. 31,982 1,007,433 Broadwing Inc./1/ 508,367 1,006,567 Entertainment Properties Trust 45,382 1,002,942 Checkpoint Systems Inc./1/ 81,033 1,000,758 MAF Bancorp Inc. 32,345 999,461 Empire District Electric Co. (The) 59,124 999,196 Tupperware Corp. 60,112 999,061 Lexington Corp. Properties Trust 62,046 998,941 ShopKo Stores Inc./1/ 76,306 996,556 Jo-Ann Stores Inc./1/ 35,484 994,971 BankAtlantic Bancorp Inc. "A" 110,500 992,290 Stone Energy Corp./1/ 30,443 989,398 Argonaut Group Inc. 57,253 987,614 Pulitzer Inc. 23,642 984,689 Prime Hospitality Corp./1/ 119,726 981,753 Nortek Inc./1/ 22,586 977,296 Hudson River Bancorp Inc. 40,440 976,626 Regis Corp. 34,234 968,480 SanDisk Corp./1/ 73,870 968,436 Dress Barn Inc./1/ 61,990 964,564 Russell Corp. 64,266 963,347 Arch Coal Inc. 58,101 961,572 Stewart Information Services Corp./1/ 44,990 960,537 ProAssurance Corp./1/ 56,822 960,292 Ferro Corp. 41,508 958,835 GrafTech International Ltd./1/ 131,982 956,869 Bedford Property Investors Inc. 38,473 952,591 EastGroup Properties Inc. 38,459 951,860 Trust Co. of New Jersey (The) 37,397 951,754 First Merchants Corp. 38,492 950,752 Joy Global Inc./1/ 114,539 950,674 Hanover Compressor Co./1/ 114,030 946,449 Acuity Brands Inc. 77,168 946,080 Bay View Capital Corp./1/ 166,415 943,573 Arch Chemicals Inc. 53,249 943,572 Lone Star Steakhouse & Saloon Inc. 44,915 942,766 Longview Fibre Co. 135,569 940,849 Harland (John H.) Co. 34,490 936,403 MB Financial Inc. 27,859 933,277 Insight Communications Co. Inc./1/ 100,962 931,879 Mid-America Apartment Communities Inc. 37,364 930,737 Meristar Hospitality Corp. 108,226 929,661 CommScope Inc./1/ 136,888 928,101 National Health Investors Inc. 60,575 923,769 Mid-State Bancshares 56,318 923,615 American States Water Co. 35,201 922,970 Harbor Florida Bancshares Inc. 45,065 921,579 Alabama National Bancorp 20,311 919,682 Net.B@nk Inc./1/ 88,206 918,224 Esterline Technologies Corp./1/ 55,036 915,799 NCI Building Systems Inc./1/ 48,706 915,673 Hain Celestial Group Inc./1/ 62,391 914,028 Donnelley (R.H.) Corp./1/ 35,142 913,692 NUI Corp. 41,855 904,068 PS Business Parks Inc. 26,564 903,176 BankUnited Financial Corp. "A"/1/ 56,598 902,738 Arbitron Inc./1/ 26,469 902,593 JLG Industries Inc. 111,861 900,481 Actuant Corp. "A"/1/ 24,280 895,932 C&D Technologies Inc. 61,099 895,711 Hollywood Entertainment Corp./1/ 61,673 895,492 Community Bank System Inc. 30,218 895,359 Oshkosh Truck Corp. 15,873 895,237 RLI Corp. 16,685 895,150 California Water Service Group 34,986 893,193 Veritas DGC Inc./1/ 82,352 890,225 Bowne & Co. Inc. 88,953 889,530 Thomas Industries Inc. 35,852 889,130 Offshore Logistics Inc./1/ 49,429 887,745 Cambrex Corp. 24,099 886,843 First Financial Corp. 18,179 880,773 Walter Industries Inc. 71,210 874,459 Applied Industrial Technologies Inc. 50,939 863,416 RAIT Investment Trust 41,580 856,548 Koger Equity Inc. 50,634 855,208 Datascope Corp. 31,581 854,582 Weis Markets Inc. 25,518 854,343 Burlington Coat Factory Warehouse Corp. 47,410 853,380 Schedules of Investments 89 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ CIBER Inc./1/ 146,809 $ 852,960 Technitrol Inc. 56,578 845,841 Glenborough Realty Trust Inc. 41,622 844,927 Bandag Inc. 27,693 844,636 ADTRAN Inc./1/ 53,768 838,781 Greif Brothers Corp. "A" 34,234 838,733 East West Bancorp Inc. 24,823 838,024 First Federal Capital Corp. 43,071 836,870 Stride Rite Corp. 105,508 834,568 ChemFirst Inc. 28,996 833,925 Delta & Pine Land Co. 44,486 833,668 Unifi Inc./1/ 132,950 833,597 Brown Shoe Co. Inc. 46,549 833,227 Sequa Corp. "A"/1/ 15,992 833,183 Methode Electronics Inc. "A" 90,599 831,699 PFF Bancorp Inc. 29,999 831,572 RFS Hotel Investors Inc. 75,571 830,525 Wausau-Mosinee Paper Corp. 90,135 830,143 GenCorp. Inc. 82,480 828,924 Incyte Genomics Inc./1/ 178,430 827,915 First Sentinel Bancorp Inc. 61,124 827,008 AMLI Residential Properties Trust 37,451 826,918 Imagistics International Inc./1/ 47,566 825,270 CDI Corp./1/ 31,359 820,038 Community Trust Bancorp Inc. 30,406 817,921 Central Parking Corp. 40,400 813,656 Crown Castle International Corp./1/ 374,726 813,155 SPS Technologies Inc./1/ 32,583 812,294 Men's Wearhouse Inc. (The)/1/ 55,137 810,514 Belden Inc. 60,151 807,226 Triarc Companies Inc./1/ 35,217 799,074 First Financial Holdings Inc. 29,517 799,025 Chemed Corp. 25,948 798,420 Apex Mortgage Capital Inc. 71,205 796,784 Redwood Trust Inc. 29,094 795,139 Presidential Life Corp. 54,779 788,818 Georgia Gulf Corp. 34,474 788,420 Korn/Ferry International/1/ 100,266 786,085 Westport Resources Corp./1/ 42,519 778,098 Commonwealth Bancorp Inc. 16,895 777,170 WMS Industries Inc./1/ 54,835 773,174 Silgan Holdings Inc./1/ 27,167 772,629 Boca Resorts Inc. "A"/1/ 75,714 772,283 Phillips-Van Heusen Corp. 61,176 770,818 Trammell Crow Co./1/ 78,140 770,460 Corixa Corp./1/ 121,219 767,316 Quantum DLT & Storage Group/1/ 344,317 760,941 Fremont General Corp. 154,874 758,883 Knight Trading Group Inc./1/ 201,856 756,960 Saxon Capital Inc./1/ 67,980 752,539 Alpharma Inc. "A" 78,319 751,862 Fidelity Bankshares Inc. 41,953 750,959 Robert Mondavi Corp. (The) "A"/1/ 24,605 749,468 Sycamore Networks Inc./1/ 317,905 747,077 International Multifoods Corp./1/ 38,054 745,858 Palm Inc./1/ 1,002,860 742,116 InFocus Corp./1/ 97,207 740,717 Stewart & Stevenson Services Inc. 75,557 739,930 U.S. Restaurant Properties Inc. 51,916 739,803 Omega Financial Corp. 21,905 739,294 Odyssey Re Holdings Corp. 44,492 739,012 Integra Bank Corp. 40,997 738,766 Anworth Mortgage Asset Corp. 60,510 737,617 MFA Mortgage Investments Inc. 91,032 737,359 F&M Bancorp 23,328 737,165 Inhale Therapeutic Systems Inc./1/ 146,508 736,642 United Community Financial Corp. 82,960 734,196 Nordson Corp. 30,862 732,664 Brooks-PRI Automation Inc./1/ 63,812 730,647 Amylin Pharmaceuticals Inc./1/ 43,955 730,532 Kaman Corp. "A" 59,491 728,765 Tractor Supply Co./1/ 22,928 728,652 Bally Total Fitness Holding Corp./1/ 73,064 724,064 Kramont Realty Trust 48,867 723,232 EGL Inc./1/ 65,665 722,972 Gold Bancorp Inc. 74,371 721,399 MacDermid Inc. 36,137 720,933 Cable Design Technologies Corp./1/ 117,710 720,385 NetIQ Corp./1/ 49,607 719,302 Universal Compression Holdings Inc./1/ 43,817 709,835 NorthWestern Corp. 72,710 709,650 90 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------------- Benchmark Electronics Inc./1/ 33,605 $ 707,385 First Financial Bankshares Inc. 19,372 705,916 Farmer Brothers Co. 2,165 703,629 Simmons First National Corp. "A" 18,873 701,698 CONMED Corp./1/ 34,797 701,160 Parkway Properties Inc. 20,686 700,014 Lattice Semiconductor Corp./1/ 112,307 698,550 Pegasus Solutions Inc./1/ 65,852 694,739 Nautica Enterprises Inc./1/ 66,703 693,711 Alderwoods Group Inc./1/ 105,972 688,818 Penn Virginia Corp. 21,216 687,398 Stillwater Mining Co./1/ 114,446 686,676 Marcus Corp. 52,307 685,222 Applera Corp. - Celera Genomics Group/1/ 86,176 685,099 Flagstar Bancorp Inc. 33,073 684,611 Sterling Bancshares Inc. 52,321 683,835 NBT Bancorp Inc. 39,564 683,270 DIMON Inc. 109,359 682,400 United Therapeutics Inc./1/ 41,483 682,395 American Management Systems Inc./1/ 53,507 681,144 Universal Forest Products Inc. 36,119 679,760 Hanger Orthopedic Group Inc./1/ 42,731 679,423 Pathmark Stores Inc./1/ 74,138 678,363 Raytech Corp./1/ 110,309 671,782 Station Casinos Inc./1/ 39,245 667,557 Heartland Express Inc./1/ 35,580 666,769 Equity Inns Inc. 107,487 666,419 Interland Inc./1/ 324,984 666,217 Local Financial Corp./1/ 48,187 665,462 Carpenter Technology Corp. 50,931 662,103 Gardner Denver Inc./1/ 42,118 661,674 Shurgard Storage Centers Inc. "A" 20,887 660,447 Ascential Software Corp./1/ 355,105 659,785 Irwin Financial Corp. 38,628 656,676 Analogic Corp. 15,627 654,615 Caraustar Industries Inc. 69,917 653,724 Russ Berrie & Co. Inc. 21,777 653,528 Central Garden & Pet Co./1/ 37,971 649,684 Watsco Inc. 45,372 648,820 United Fire & Casualty Co. 19,084 648,474 Kmart Corp./1/ 1,323,389 648,461 CT Communications Inc. 44,660 647,570 Independent Bank Corp. (Michigan) 19,509 645,748 Griffon Corp./1/ 60,564 645,007 Heidrick & Struggles International Inc./1/ 42,202 641,048 Woodward Governor Co. 13,479 638,878 Jakks Pacific Inc./1/ 57,455 638,842 Magna Entertainment Corp. "A"/1/ 117,464 638,769 Universal Health Realty Income Trust 24,612 638,681 Denbury Resources Inc./1/ 62,755 638,218 Sybron Dental Specialties Inc./1/ 45,530 636,965 Range Resources Corp./1/ 135,984 636,405 Swift Energy Co./1/ 61,168 636,147 Manitowoc Co. Inc. (The) 23,171 633,727 West Coast Bancorp 41,795 632,776 Keystone Property Trust 37,968 631,788 Playtex Products Inc./1/ 73,957 629,374 Owens & Minor Inc. 43,901 627,345 URS Corp./1/ 37,831 626,860 United Auto Group Inc./1/ 44,737 626,765 Stage Stores Inc./1/ 28,855 625,865 Fleetwood Enterprises Inc. 92,824 625,634 Medford Bancorp Inc. 17,792 621,830 Intertrust Technologies Corp./1/ 194,493 620,433 Medarex Inc./1/ 184,796 619,067 Teledyne Technologies Inc./1/ 34,007 617,567 Fisher Communications Inc. 13,116 616,452 Myers Industries Inc. 49,059 614,709 Capital City Bank Group Inc. 18,570 613,924 Daisytek International Corp./1/ 46,946 610,298 Great Lakes REIT Inc. 34,834 608,550 Corporate Office Properties Trust 44,908 608,503 Peoples Holding Co. 14,932 608,479 Advanta Corp. "B" 58,767 607,063 Novastar Financial Inc. 27,614 603,366 Handleman Co./1/ 65,880 602,802 Sandy Spring Bancorp Inc. 19,552 602,202 IBERIABANK Corp. 15,975 601,139 Schedules of Investments 91 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Bank Mutual Corp. 29,516 $ 597,404 3TEC Energy Corp./1/ 41,605 594,951 DuPont Photomasks Inc./1/ 26,062 593,692 Sun Communities Inc. 16,008 587,494 National Western Life Insurance Company "A"/1/ 5,759 587,418 PTEK Holdings Inc./1/ 125,340 584,084 Churchill Downs Inc. 15,995 583,817 Troy Financial Corp. 22,326 582,262 Sola International Inc./1/ 57,752 580,408 RTI International Metals Inc./1/ 55,171 579,296 Stoneridge Inc./1/ 34,047 578,799 Pioneer-Standard Electronics Inc. 79,691 576,963 Coachmen Industries Inc. 38,181 573,097 SOURCECORP Inc./1/ 28,078 573,072 Park Electrochemical Corp. 34,215 571,391 Input/Output Inc./1/ 118,918 569,617 Cleveland-Cliffs Inc. 23,638 568,494 NACCO Industries Inc. 14,280 568,344 Bank of Granite Corp. 31,494 566,892 CIMA Labs Inc./1/ 22,536 566,780 First Indiana Corp. 30,867 565,792 NCO Group Inc./1/ 49,600 564,944 Investors Real Estate Trust 53,200 563,388 Parametric Technology Corp./1/ 312,344 562,219 XM Satellite Radio Holdings Inc. "A"/1/ 143,939 561,362 Sterling Financial Corp. (Washington)/1/ 30,921 560,598 FBL Financial Group Inc. "A" 30,356 560,068 Exelixis Inc./1/ 112,882 558,766 LaSalle Hotel Properties 44,639 557,988 Alexion Pharmaceuticals Inc./1/ 48,106 557,549 Nabi Biopharmaceuticals/1/ 102,543 556,050 Alfa Corp. 45,332 555,317 Chesapeake Corp. 37,144 554,931 Gene Logic Inc./1/ 71,415 554,895 Century Business Services Inc./1/ 209,051 553,985 Proxim Corp. "A"/1/ 316,327 553,572 Urstadt Biddle Properties Inc. "A" 46,611 552,340 Banner Corp. 27,339 552,248 Standex International Corp. 27,226 552,143 Pharmacopeia Inc./1/ 62,183 550,941 Valmont Industries Inc. 23,555 550,009 RailAmerica Inc./1/ 75,714 548,927 ExpressJet Holdings Inc./1/ 59,385 546,342 Arris Group Inc./1/ 147,495 545,731 AMC Entertainment Inc./1/ 73,614 544,744 Central Vermont Public Service Corp. 30,870 544,238 First Essex Bancorp Inc. 16,453 543,772 1st Source Corp. 38,419 541,324 CNA Surety Corp. 41,005 541,266 Meritage Corp./1/ 15,265 541,144 Standard Microsystems Corp./1/ 35,328 539,847 Unova Inc./1/ 109,653 539,493 Steel Dynamics Inc./1/ 41,166 538,863 Innkeepers USA Trust 66,811 533,820 Pope & Talbot Inc. 41,498 533,249 Skyworks Solutions Inc./1/ 117,570 532,592 Watts Industries Inc. "A" 32,319 530,032 Capstead Mortgage Corp. 25,634 529,855 4Kids Entertainment Inc./1/ 22,328 529,843 MTS Systems Corp. 55,878 529,109 Riggs National Corp. 37,001 528,744 CCBT Financial Companies Inc. 20,059 524,944 Kelly Services Inc. "A" 24,146 523,244 Consolidated Graphics Inc./1/ 29,501 517,743 MCG Capital Corp. 39,250 517,315 Oceaneering International Inc./1/ 20,215 514,472 Calgon Carbon Corp. 88,911 513,906 Saul Centers Inc. 22,118 513,580 Newport Corp./1/ 45,526 513,533 Southern Peru Copper Corp. 37,377 512,439 Old Second Bancorp Inc. 13,380 510,848 State Auto Financial Corp. 33,614 508,916 BancFirst Corp. 10,306 507,261 First Republic Bank/1/ 23,183 504,230 Aviall Inc./1/ 49,401 503,396 Centex Construction Products Inc. 14,093 503,120 Black Box Corp./1/ 15,126 502,183 Gibraltar Steel Corp. 22,455 499,848 92 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Farmers Capital Bank Corp. 14,972 $ 499,616 Standard Commercial Corp. 29,845 499,605 Gentiva Health Services Inc. 60,283 498,540 Union Bankshares Corp. 19,988 498,301 UniFirst Corp. 20,741 494,465 Octel Corp. 26,098 492,991 Angelica Corp. 22,933 492,830 Port Financial Corp. 12,276 491,163 Anaren Microwave Inc./1/ 59,657 490,381 Lithia Motors Inc. "A"/1/ 28,821 490,245 Robbins & Myers Inc. 26,067 486,150 Kadant Inc./1/ 36,010 486,135 Zenith National Insurance Corp. 18,387 485,785 Kirby Corp./1/ 21,424 484,611 OMNOVA Solutions Inc./1/ 105,156 482,666 Second Bancorp Inc. 18,008 481,354 Genesee & Wyoming Inc. "A"/1/ 21,599 480,578 Tesoro Petroleum Corp./1/ 171,552 480,346 Dura Automotive Systems Inc./1/ 39,166 479,783 Graphic Packaging International Corp./1/ 60,116 479,726 Cash America International Inc. 58,230 476,904 Triad Guaranty Inc./1/ 13,636 474,806 First Bancorp North Carolina 19,187 474,111 First Place Financial Corp. 33,883 473,684 Maxygen Inc./1/ 75,919 471,457 Buckeye Technologies Inc./1/ 64,037 470,672 Enterasys Networks Inc./1/ 361,907 470,479 City Holding Co. 18,198 468,417 Firstfed America Bancorp Inc. 19,354 466,238 Pinnacle Entertainment Inc./1/ 63,836 466,003 Ameron International Corp. 9,468 465,731 TBC Corp./1/ 44,900 465,613 Valhi Inc. 47,373 465,203 Lightbridge Inc./1/ 68,687 463,706 CKE Restaurant Inc./1/ 115,507 462,028 Rock-Tenn Co. "A" 29,912 461,243 Bio-Technology General Corp./1/ 155,228 459,475 Camden National Corp. 17,641 458,666 Interface Inc. "A" 115,809 458,604 Arrow International Inc. 14,238 458,036 Clark/Bardes Inc./1/ 25,584 455,139 Nuevo Energy Co./1/ 41,749 455,064 Ultratech Stepper Inc./1/ 56,207 454,715 Barnes Group Inc. 22,594 453,913 Parker Drilling Co./1/ 206,167 453,567 DoubleClick Inc./1/ 88,189 453,291 Oil States International Inc./1/ 45,226 452,260 Stepan Co. 16,821 451,644 CFS Bancorp Inc. 31,928 450,185 Finish Line Inc. (The)/1/ 49,869 449,818 ManTech International Corp. "A"/1/ 19,102 448,152 Ariba Inc./1/ 331,779 447,902 Steak n Shake Company (The)/1/ 40,681 447,491 Quaker City Bancorp Inc./1/ 13,475 446,966 Ramco-Gershenson Properties Trust 22,634 444,984 Skyline Corp. 16,357 444,747 Tanox Inc./1/ 42,255 443,678 Holly Corp. 26,060 442,499 St. Francis Capital Corp. 19,159 440,849 Boykin Lodging Co. 45,822 440,808 SWS Group Inc. 35,845 439,101 Allegiant Bancorp Inc. 27,002 438,782 Correctional Properties Trust 18,997 436,931 CUNO Inc./1/ 14,112 435,355 Astec Industries Inc./1/ 40,346 434,930 Blair Corp. 21,218 433,908 Cirrus Logic Inc./1/ 169,964 433,408 BSB Bancorp Inc. 21,593 429,917 SJW Corp. 5,510 429,780 Centennial Bancorp 49,135 426,492 ProQuest Co./1/ 13,977 424,202 Talk America Holdings Inc./1/ 182,831 424,168 HEICO Corp. 37,458 424,025 MGE Energy Inc. 16,504 423,493 FNB Corp. 13,780 423,322 NeoPharm Inc./1/ 30,006 423,085 Avigen Inc./1/ 53,285 422,550 Tenneco Automotive Inc./1/ 100,256 422,078 German American Bancorp 24,810 421,770 Pericom Semiconductor Corp./1/ 48,853 421,113 Seacoast Banking Corp. of Florida 21,937 420,752 Schedules of Investments 93 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Oregon Steel Mills Inc./1/ 68,510 $ 419,281 Westcorp Inc. 20,931 418,620 United Online Inc./1/ 43,622 418,335 Sterling Bancorp 15,740 417,582 Footstar Inc./1/ 53,423 416,699 American Physicians Capital Inc./1/ 24,687 416,223 Comstock Resources Inc./1/ 60,107 414,738 Energy Partners Ltd./1/ 50,888 414,228 U.S. Industries Inc./1/ 175,640 412,754 Maxwell Shoe Co. Inc. "A"/1/ 36,364 412,731 Silicon Graphics Inc./1/ 503,099 412,541 Spartech Corp. 19,434 411,223 Praecis Pharmaceuticals Inc./1/ 137,395 410,811 ImClone Systems Inc./1/ 52,498 409,484 Citizens First Bancorp Inc. 22,735 408,548 Insignia Financial Group Inc./1/ 51,694 405,798 RehabCare Group Inc./1/ 17,517 405,168 American Tower Corp./1/ 254,763 405,073 Terayon Communication Systems Inc./1/ 172,685 400,629 Waste Connections Inc./1/ 11,511 400,468 Movado Group Inc. 24,642 400,433 Hawthorne Financial Corp./1/ 15,158 400,171 GBC Bancorp 20,497 398,052 NDCHealth Corp. 25,598 398,049 Insurance Auto Auctions Inc./1/ 26,340 398,024 Stamps.com Inc./1/ 93,074 393,703 DSP Group Inc./1/ 24,512 393,638 Littelfuse Inc./1/ 23,313 392,125 USG Corp./1/ 97,576 390,304 Berkshire Hills Bancorp Inc. 16,583 389,700 Allen Telecom Inc./1/ 72,936 389,478 Columbia Banking System Inc./1/ 35,162 389,243 Cell Therapeutics Inc./1/ 88,089 387,592 Flushing Financial Corp. 23,202 387,009 Encore Acquisition Co./1/ 23,393 384,815 Genlyte Group Inc. (The)/1/ 10,777 382,045 Ryerson Tull Inc. 59,223 380,804 Champion Enterprises Inc./1/ 129,385 380,392 SEMCO Energy Inc. 48,850 380,053 NBC Capital Corp. 15,133 379,838 Monaco Coach Corp./1/ 18,942 379,408 Golden Telecom Inc./1/ 31,422 378,635 Building Materials Holdings Corp./1/ 32,333 378,296 Mobile Mini Inc./1/ 29,152 377,518 PAREXEL International Corp./1/ 44,342 376,907 Pilgrim's Pride Corp. "B" 40,518 376,817 K2 Inc./1/ 47,592 375,977 Infonet Services Corp. "B"/1/ 166,559 373,092 Great Atlantic & Pacific Tea Co./1/ 44,408 372,139 Keystone Automotive Industries Inc./1/ 22,480 370,920 ValueClick Inc./1/ 170,094 370,805 First Community Bancshares Inc. 12,574 370,430 ITLA Capital Corp./1/ 12,253 369,918 Kansas City Life Insurance Co. 9,730 368,183 Lufkin Industries Inc. 14,949 367,745 Bassett Furniture Industries Inc. 26,678 367,356 Hollinger International Inc. 40,323 366,536 PennFed Financial Services Inc. 13,201 362,895 National Presto Industries Inc. 12,508 361,231 Tetra Technologies Inc./1/ 17,922 361,128 Electro Rent Corp./1/ 37,150 359,612 Lexicon Genetics Inc./1/ 88,893 356,461 Advanced Digital Information Corp./1/ 73,876 354,605 VIB Corp./1/ 23,671 354,355 GlobeSpanVirata Inc./1/ 149,914 353,797 Agile Software Corp./1/ 55,155 353,544 Oxford Industries Inc. 16,139 353,444 Buckle Inc. (The)/1/ 17,582 353,398 MainSource Financial Group Inc. 14,842 353,091 CIRCOR International Inc. 26,331 352,835 Safeguard Scientifics Inc./1/ 317,199 352,091 Boston Communications Group Inc./1/ 34,014 351,024 Cascade Corp./1/ 24,931 350,281 Lawson Products Inc. 11,998 349,742 Associated Estates Realty Corp. 43,152 349,531 Superior Financial Corp. 18,569 349,097 West Marine Inc./1/ 27,431 348,648 Compucom Systems Inc./1/ 60,507 348,520 Midland Co. (The) 20,702 348,415 94 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Penn Engineering & Manufacturing Corp. 31,020 $ 347,424 Immunogen Inc./1/ 106,641 345,517 Brush Engineered Materials Inc./1/ 44,215 344,877 Southwest Bancorp Inc. 13,668 343,750 Friedman's Inc. 44,036 342,600 American Italian Pasta Co. "A"/1/ 9,565 341,375 Standard Register Co. (The) 14,175 340,200 R&G Financial Corp. "B" 15,577 339,890 Hancock Fabrics Inc. 20,938 338,149 Dionex Corp./1/ 13,218 337,852 Navigant International Inc./1/ 32,174 337,827 Three Rivers Bancorp Inc. 21,046 336,736 World Fuel Services Corp. 17,444 336,669 Healthcare Services Group Inc./1/ 24,659 336,349 ABC Bancorp 26,189 335,743 Arctic Cat Inc. 23,988 334,872 Osmonics Inc./1/ 28,133 334,783 Steven Madden Ltd./1/ 23,143 333,259 Baldwin & Lyons Inc. "B" 15,186 331,966 Wabash National Corp. 61,355 331,931 Rayovac Corp./1/ 27,091 330,510 X-Rite Inc. 42,707 330,125 Material Sciences Corp./1/ 27,067 329,405 NL Industries Inc. 22,588 327,752 Alliance Imaging Inc./1/ 27,385 327,525 Macatawa Bank Corp. 17,766 327,427 Dave & Buster's Inc./1/ 29,181 327,119 RSA Security Inc./1/ 97,344 327,076 Prime Medical Service Inc./1/ 35,315 326,275 Winston Hotels Inc. 44,871 324,866 Quiksilver Inc./1/ 14,304 323,127 Ducommun Inc./1/ 18,346 323,073 AAR Corp. 67,965 322,834 LSB Bancshares Inc. 19,630 322,717 Theragenics Corp./1/ 72,891 320,720 Jeffries Group Inc. 8,401 320,582 Volt Information Sciences Inc./1/ 21,150 320,423 Butler Manufacturing Co. 14,782 319,291 CSS Industries Inc./1/ 8,843 318,879 Resource America Inc. "A" 39,793 318,344 Integrated Electrical Services Inc./1/ 84,888 317,481 Financial Industries Corp. 20,802 317,439 UAL Corp./1/ 148,215 317,180 Vail Resorts Inc./1/ 22,336 316,278 Pediatrix Medical Group Inc./1/ 10,194 315,912 Raindance Communications Inc./1/ 102,089 315,455 Tweeter Home Entertainment Group Inc./1/ 45,661 315,061 Airgas Inc./1/ 23,973 314,765 Bostonfed Bancorp Inc. 10,422 312,556 Audiovox Corp. "A"/1/ 44,517 311,575 Santander BanCorp 22,526 310,859 Guilford Pharmaceuticals Inc./1/ 64,141 310,442 Computer Horizons Corp./1/ 83,369 310,133 Argosy Gaming Co./1/ 13,481 309,524 CB Bancshares Inc. 8,803 309,161 Peoples Bancorp Inc. 11,989 308,117 Department 56 Inc./1/ 29,340 306,603 Comfort Systems USA Inc./1/ 100,478 305,453 Nature's Sunshine Products Inc. 28,107 304,399 REMEC Inc./1/ 89,222 304,247 LTC Properties Inc. 37,406 303,737 Universal American Financial Corp./1/ 61,945 303,592 POZEN Inc./1/ 59,841 303,394 K-Swiss Inc. "A" 14,183 303,091 Massbank Corp. 10,076 301,675 Great American Financial Resources Inc. 19,342 300,768 Parkvale Financial Corp. 12,700 299,085 AmeriPath Inc./1/ 20,061 298,909 Concord Camera Corp./1/ 64,001 298,245 Haverty Furniture Companies Inc. 23,848 298,100 BE Aerospace Inc./1/ 62,230 296,215 AMCOL International Corp. 52,592 294,515 Deltic Timber Corp. 13,356 293,565 Luby's Inc./1/ 59,590 293,183 EDO Corp. 13,071 292,921 ArQule Inc./1/ 56,327 290,084 Arena Pharmaceuticals Inc./1/ 51,736 289,722 State Bancorp Inc. 16,319 289,662 Schedules of Investments 95 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Gray Television Inc. "A" 21,511 $ 289,323 Cole National Corp./1/ 23,021 288,914 Charles River Associates Inc./1/ 17,381 288,525 USB Holding Co. Inc. 15,643 288,301 Ocwen Financial Corp./1/ 98,996 287,088 OceanFirst Financial Corp. 13,935 287,061 Water Pik Technologies Inc./1/ 28,257 286,809 CSK Auto Corp./1/ 22,959 286,528 Glacier Bancorp Inc. 12,527 285,365 Casella Waste Systems Inc. "A"/1/ 44,108 283,614 E.piphany Inc./1/ 78,686 283,270 Lydall Inc./1/ 23,995 283,141 Ingles Markets Inc. "A" 26,460 283,122 Roanoke Electric Steel Corp. 26,071 282,870 U.S. Concrete Inc./1/ 53,556 281,169 Anteon International Corp./1/ 10,326 280,661 Watson Wyatt & Co. Holdings/1/ 14,013 280,260 Coastal Bancorp Inc. 10,137 280,187 Stratex Networks Inc./1/ 218,883 279,951 BKF Capital Group Inc./1/ 13,256 279,436 Microtune Inc./1/ 115,716 278,876 Cascade Natural Gas Corp. 14,145 278,656 Vans Inc./1/ 48,825 277,814 Glimcher Realty Trust 14,801 277,371 Brookstone Inc./1/ 22,533 277,156 PC-Tel Inc./1/ 53,143 276,875 William Lyon Homes Inc./1/ 12,066 276,432 Cornell Cos Inc./1/ 34,729 276,096 School Specialty Inc./1/ 10,998 275,060 Intermet Corp. 57,113 274,714 Avatar Holdings/1/ 11,415 274,645 Covenant Transport Inc. "A"/1/ 15,680 274,400 American National Bankshares Inc. 9,974 273,886 Mission West Properties Inc. 24,509 271,560 International Specialty Products Inc./1/ 28,015 271,465 Information Resources Inc./1/ 72,789 270,047 NS Group Inc./1/ 45,446 269,495 Sterling Financial Corp. (Pennsylvania) 11,535 269,112 SPSS Inc./1/ 23,225 268,713 Oneida Ltd. 19,286 268,654 Banc Corp. (The)/1/ 34,624 267,990 Yardville National Bancorp 15,697 266,692 Sun Bancorp Inc. 11,831 265,961 AMERCO/1/ 26,379 265,373 SpeedFam-IPEC Inc./1/ 71,484 265,206 Three-Five Systems Inc./1/ 57,121 265,041 Starrett (LS) Co. "A" 17,333 264,848 New Focus Inc./1/ 97,777 263,998 Tollgrade Communications Inc./1/ 33,704 263,228 Sitel Corp./1/ 150,274 262,980 Prosperity Bancshares Inc. 15,439 262,926 Gladstone Capital Corp. 15,569 262,805 Del Monte Foods Co./1/ 32,150 262,665 Acadia Realty Trust 35,486 262,596 Verity Inc./1/ 26,341 262,093 Interwoven Inc./1/ 129,486 260,008 Sepracor Inc./1/ 49,570 259,747 Wilsons The Leather Experts Inc./1/ 36,463 259,617 Unitil Corp. 9,559 259,527 SureBeam Corporation "A"/1/ 144,146 259,463 Pomeroy Computer Resources/1/ 26,266 258,983 Republic Bancshares Inc./1/ 13,308 258,708 Alico Inc. 9,052 257,529 Hypercom Corp./1/ 89,740 256,656 SoundView Technology Group Inc./1/ 197,000 256,100 Beverly Enterprises Inc./1/ 104,079 251,871 Ligand Pharmaceuticals Inc. "B"/1/ 36,997 251,580 Sports Authority Inc. (The)/1/ 41,715 249,039 Granite State Bankshares Inc. 7,370 249,032 Esperion Therapeutics Inc./1/ 43,511 248,883 Systems & Computer Technology Corp./1/ 35,496 248,472 National Health Realty Inc. 15,748 248,188 Omega Healthcare Investors Inc./1/ 42,707 244,284 Vignette Corp./1/ 304,505 243,909 Wellsford Real Properties Inc./1/ 14,140 243,208 Sizeler Property Investors Inc. 24,175 243,201 Harvest Natural Resources Inc./1/ 44,774 243,123 First Oak Brook Bancshares "A" 8,157 242,508 J&J Snack Foods Corp./1/ 6,580 242,473 96 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ First Defiance Financial Corp. 14,115 $ 242,355 Monro Muffler Brake Inc./1/ 13,535 241,735 Powell Industries Inc./1/ 12,731 239,343 Alliance Semiconductor Corp./1/ 62,925 239,115 FSI International Inc./1/ 78,041 238,805 Warwick Community Bancorp 8,837 238,599 Applied Films Corporation/1/ 21,791 238,394 Register.com/1/ 78,380 237,491 Bombay Co. Inc. (The)/1/ 87,890 237,303 Modtech Holdings Inc./1/ 23,643 236,430 Group 1 Automotive Inc./1/ 10,488 234,407 7-Eleven Inc./1/ 27,201 233,113 Chattem Inc./1/ 5,702 232,813 Crown Media Holdings Inc./1/ 66,510 232,785 VCA Antech Inc./1/ 18,864 232,782 American Medical Security Group Inc./1/ 16,408 232,009 Sauer-Danfoss Inc. 25,769 231,921 FuelCell Energy Inc./1/ 36,610 230,643 Avenue A Inc./1/ 92,135 230,337 Rex Stores Corp./1/ 22,358 230,287 Charter Financial Corp. 8,169 229,222 Nu Horizons Electronics Corp./1/ 38,053 228,318 Applica Inc./1/ 42,953 227,651 Vesta Insurance Group 90,994 227,485 Summit Bancshares Inc. 10,767 226,645 Align Technology Inc./1/ 81,984 226,194 SonicWALL Inc./1/ 82,235 226,146 Harris Interactive Inc./1/ 98,274 226,030 Neose Technologies Inc./1/ 29,070 225,583 Sun Bancorp Inc. "B"/1/ 17,011 225,566 MCSi Inc./1/ 45,516 225,304 SBS Technologies Inc./1/ 31,370 224,609 TriQuint Semiconductor Inc./1/ 63,495 224,137 Lone Star Technologies Inc./1/ 18,904 224,012 IGEN International Inc./1/ 7,446 222,486 Encore Wire Corp./1/ 25,222 221,954 Foamex International Inc./1/ 40,230 221,265 Aeropostale Inc./1/ 14,326 220,620 CuraGen Corp./1/ 52,238 220,444 Zoran Corp./1/ 20,021 220,231 Vicor Corp./1/ 30,666 219,262 Century Aluminum Co. 31,422 218,697 Houston Exploration Co./1/ 7,020 218,673 Isle of Capri Casinos Inc./1/ 13,020 217,174 Navigators Group Inc./1/ 10,699 216,869 Woodhead Industries Inc. 19,658 216,631 Equity One Inc. 16,396 216,427 TIBCO Software Inc./1/ 57,692 216,345 eFunds Corp./1/ 22,909 214,909 MemberWorks Inc./1/ 12,278 213,883 Finlay Enterprises Inc./1/ 14,132 213,200 National Healthcare Corp./1/ 11,870 213,067 deCODE genetics Inc./1/ 96,250 211,750 Integrated Silicon Solution Inc./1/ 71,052 211,735 Seaboard Corp. 982 211,130 ADVO Inc./1/ 6,637 210,725 Republic Bancorp Inc. "A" 18,730 210,713 Liberate Technologies/1/ 134,209 209,366 Turnstone Systems Inc./1/ 93,294 207,113 World Acceptance Corp./1/ 26,138 207,013 FPIC Insurance Group Inc./1/ 23,372 205,674 Sylvan Learning Systems Inc./1/ 14,997 205,159 Aspect Communications Corp./1/ 139,489 205,049 Milacron Inc. 45,432 204,898 Young Broadcasting Inc. "A"/1/ 23,607 204,673 Neurogen Corp./1/ 25,484 204,637 Alamo Group Inc. 16,475 203,631 Rent-Way Inc./1/ 67,850 203,550 Northwest Pipe Co./1/ 11,356 203,159 Pure Resources Inc./1/ 9,028 202,227 Drew Industries Inc./1/ 12,988 201,963 Manugistics Group Inc./1/ 72,081 201,106 Power-One Inc./1/ 67,449 200,998 Zomax Inc./1/ 51,461 200,698 Exar Corp./1/ 17,341 200,289 Alliance Gaming Corp./1/ 12,887 199,233 Westfield Financial Inc. 13,196 199,128 Standard Motor Products Inc. 18,385 198,742 Goody's Family Clothing Inc./1/ 42,025 198,358 Keynote Systems Inc./1/ 30,232 198,020 Donnelly Corp. 7,595 196,786 Schedules of Investments 97 Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Community Banks Inc. 7,329 $ 196,710 Quaker Fabric Corp./1/ 31,100 195,619 Schnitzer Steel Industries Inc. "A" 10,803 195,524 Bell Microproducts Inc./1/ 46,210 193,158 First National Corp. 6,969 192,344 Res-Care Inc./1/ 38,603 191,471 LTX Corp./1/ 41,978 191,420 Terra Industries Inc./1/ 103,370 191,235 MedCath Corp./1/ 16,908 191,060 Partners Trust Financial Group Inc. 13,664 190,886 PICO Holdings Inc./1/ 17,335 190,685 Keane Inc./1/ 27,929 188,521 TransMontaigne Inc./1/ 37,841 188,448 Grace (W.R.) & Co./1/ 117,083 187,333 Neoforma Inc./1/ 19,862 187,299 Nelson (Thomas) Inc./1/ 21,266 187,141 Numerical Technologies Inc./1/ 64,496 187,038 PriceSmart Inc./1/ 9,332 186,640 City Bank 6,442 186,431 Genzyme Corp. - Biosurgery Division/1/ 99,678 186,398 Illumina Inc./1/ 54,064 185,980 Metris Companies Inc. 80,466 185,876 Penn Traffic Company (The)/1/ 28,356 185,165 CompuCredit Corp./1/ 34,826 184,578 Remington Oil & Gas Corp./1/ 13,036 183,808 ProxyMed Inc./1/ 12,117 183,330 Sirius Satellite Radio Inc./1/ 183,164 183,164 Remedy Temp Inc./1/ 14,570 182,562 Wintrust Financial Corp. 6,342 181,698 Bush Industries Inc. "A" 22,497 181,326 Per-Se Technologies Inc./1/ 18,259 180,399 Shoe Carnival Inc./1/ 12,649 180,248 Asbury Automotive Group Inc./1/ 20,417 178,649 Interpool Inc. 14,856 178,569 Red Hat Inc./1/ 37,561 178,415 Rainbow Technologies Inc./1/ 62,820 178,409 Petroleum Helicopters Inc./1/ 6,735 177,131 Meridian Resource Corp. (The)/1/ 83,898 177,025 Quanta Services Inc./1/ 85,084 176,975 Chesapeake Energy Corp. 26,738 176,471 Diversa Corp./1/ 20,647 176,119 MarineMax Inc./1/ 19,398 174,776 Staten Island Bancorp Inc. 9,975 173,565 Independence Holding Co. 8,644 172,880 Computer Network Technology Corp./1/ 34,401 172,693 MasTec Inc./1/ 53,377 172,408 Duane Reade Inc./1/ 10,739 171,824 CNET Networks Inc./1/ 155,931 171,524 Vitesse Semiconductor Corp./1/ 252,232 171,518 Columbus McKinnon Corp./1/ 32,574 171,339 Avocent Corp./1/ 12,787 171,090 Touch America Holdings Inc./1/ 275,597 170,870 Pacific Northwest Bancorp 6,237 169,834 Olin Corp. 10,366 169,796 First of Long Island Corp. 5,097 169,475 Steinway Musical Instruments Inc./1/ 11,028 169,280 Netro Corp./1/ 81,616 167,313 Read-Rite Corp./1/ 321,453 167,156 Magnetek Inc./1/ 52,171 166,947 Wind River Systems Inc./1/ 51,661 166,348 Dover Motorsports Inc. 41,445 165,780 C-COR.net Corp./1/ 44,609 165,499 Regent Communications Inc./1/ 32,472 164,958 Wireless Facilities Inc./1/ 37,089 164,304 Mykrolis Corp./1/ 26,701 164,211 Cascade Bancorp 12,000 163,680 SCM Microsystems Inc./1/ 41,446 163,670 Transaction Systems Architects Inc. "A"/1/ 26,383 163,575 United National Bancorp 7,915 162,891 Center Trust Inc. 27,978 162,272 kForce.com Inc./1/ 51,447 160,000 Applied Molecular Evolution Inc./1/ 40,792 159,905 S&T Bancorp Inc. 6,322 159,188 DVI Inc./1/ 33,057 158,674 Kenneth Cole Productions "A"/1/ 7,808 158,502 Oplink Communications Inc./1/ 272,726 158,181 Sykes Enterprises Inc./1/ 37,448 157,656 Medical Staffing Network Holdings Inc./1/ 10,341 156,873 98 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Hollywood Casino Corp. "A"/1/ 12,984 $ 156,847 Onyx Pharmaceuticals Inc./1/ 36,579 156,558 WatchGuard Technologies Inc./1/ 35,425 155,870 Kendle International Inc./1/ 22,954 153,792 Sequenom Inc./1/ 99,654 153,467 Eon Labs Inc./1/ 7,094 153,089 LodgeNet Entertainment Corp./1/ 19,955 152,855 SeaChange International Inc./1/ 22,156 152,212 Willow Grove Bancorp Inc. 12,874 151,913 Gulf Island Fabrication Inc./1/ 12,916 151,892 IHOP Corp./1/ 6,264 150,962 Ladish Co. Inc./1/ 24,268 150,462 Cherokee Inc./1/ 9,298 149,977 Trico Marine Services Inc./1/ 58,348 148,204 Avanex Corp./1/ 108,173 148,197 Salton Inc./1/ 17,219 146,534 Mestek Inc./1/ 8,013 146,237 TriCo Bancshares 5,770 145,981 iGate Corp./1/ 53,505 145,534 Primedia Inc./1/ 104,672 145,494 U.S. Xpress Enterprises Inc. "A"/1/ 14,789 144,636 New Century Financial Corp. 6,150 143,910 Price Legacy Corporation/1/ 49,019 143,626 Discovery Partners International Inc./1/ 44,972 143,461 Genesco Inc./1/ 10,328 142,526 MEMC Electronics Materials Inc./1/ 42,893 142,405 Stein Mart Inc./1/ 24,047 140,434 Maui Land & Pineapple Co. Inc./1/ 7,769 139,842 Tompkins Trustco Inc. 3,258 139,768 MAXIMUS Inc./1/ 6,237 139,709 Midwest Express Holdings Inc./1/ 34,813 139,252 Trans World Entertainment Corp./1/ 44,164 139,117 Gorman-Rupp Co. (The) 5,952 138,682 Mesaba Holdings Inc./1/ 25,435 138,366 Answerthink Inc./1/ 95,328 138,226 Trimble Navigation Ltd./1/ 13,904 137,650 Culp Inc./1/ 16,050 136,425 Proton Energy Systems Inc./1/ 64,211 136,127 Royal Bancshares of Pennsylvania "A" 7,433 136,024 LendingTree Inc./1/ 9,213 135,800 Quicksilver Resources Inc./1/ 7,532 135,576 Openwave Systems Inc./1/ 218,610 135,538 Wyndham International Inc. "A"/1/ 397,828 135,262 SuperGen Inc./1/ 77,937 134,831 Palm Harbor Homes Inc./1/ 11,557 134,188 Smart & Final Inc./1/ 31,422 133,544 TriPath Imaging Inc./1/ 58,433 131,474 Sapient Corp./1/ 127,387 131,209 Collins & Aikman Corp./1/ 36,490 130,999 Tasty Baking Company 10,220 130,305 Hall Kinion & Associates Inc./1/ 21,457 128,742 Caliper Technologies Corp./1/ 30,547 127,992 WSFS Financial Corp. 4,555 127,540 NetScout Systems Inc./1/ 34,637 126,771 LeCroy Corp./1/ 14,032 125,727 Castle (A.M.) & Co. 18,577 125,395 ITXC Corp./1/ 50,357 124,885 Century Bancorp Inc. "A" 4,700 124,738 Transcontinental Realty Investments Inc./1/ 7,538 124,302 California First National Bancorp 9,168 123,860 Aether Systems Inc./1/ 45,401 121,675 Coldwater Creek Inc./1/ 9,120 120,202 MatrixOne Inc./1/ 27,692 120,183 3D Systems Corp./1/ 18,235 119,986 Artesyn Technologies Inc./1/ 78,481 118,506 NetRatings Inc./1/ 20,285 118,464 Transmeta Corp./1/ 121,470 117,826 Varian Inc./1/ 4,256 117,508 Key Energy Services Inc./1/ 14,897 117,388 LSI Industries Inc. 11,503 116,640 Vical Inc./1/ 50,469 116,583 Pacific Union Bank/1/ 10,336 115,867 Drugstore.com Inc./1/ 69,108 115,410 Deb Shops Inc. 4,627 115,351 Finisar Corp./1/ 167,146 115,331 Sipex Corp./1/ 67,552 114,838 CTS Corp. 24,897 114,526 Specialty Laboratories Inc./1/ 12,429 114,223 Magma Design Automation Inc./1/ 12,767 113,882 Schedules of Investments 99 Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Richardson Electronics Ltd. 17,046 $ 112,163 Bank of the Ozarks Inc. 4,859 111,271 Net2Phone Inc./1/ 47,112 111,184 IMCO Recycling Inc./1/ 18,248 110,400 ABIOMED Inc./1/ 33,165 109,444 EnergySouth Inc. 4,281 109,165 Tremont Corp. 3,404 108,962 Right Management Consultants Inc./1/ 4,394 108,268 Championship Auto Racing Teams Inc./1/ 28,636 107,958 Allegiance Telecom Inc./1/ 129,863 107,786 Seminis Inc. "A"/1/ 36,735 107,634 Viasat Inc./1/ 17,017 107,207 Carmike Cinemas Inc./1/ 5,916 106,488 Intertan Inc./1/ 15,202 106,110 DiamondCluster International Inc. "A"/1/ 32,428 105,715 Spinnaker Exploration Co./1/ 3,679 105,587 Atlas Air Worldwide Holdings Inc./1/ 43,710 105,341 Union Acceptance Corp. "A"/1/ 26,128 105,296 ADE Corp./1/ 24,876 104,728 Dover Downs Gaming & Entertainment Inc. 12,852 104,615 II-VI Inc./1/ 7,821 104,410 CTB International Corp./1/ 8,113 103,757 StorageNetworks Inc./1/ 82,945 103,681 webMethods Inc./1/ 21,435 103,531 Johnson Outdoors Inc. "A"/1/ 9,711 102,063 Linens `N Things Inc./1/ 5,472 100,521 SRA International Inc. "A"/1/ 3,497 100,119 Shop At Home Inc./1/ 42,685 99,883 American Pharmaceutical Partners Inc./1/ 6,087 99,401 IMPCO Technologies Inc./1/ 27,415 98,694 Papa John's International Inc./1/ 3,370 98,168 Michael Baker Corp./1/ 9,493 97,778 Ceres Group Inc./1/ 50,417 97,305 MetaSolv Inc./1/ 63,523 97,190 Dominion Homes Inc./1/ 6,236 96,658 Virco Manufacturing Corp. 9,910 96,126 Bel Fuse Inc. "B" 4,363 93,586 Boston Private Financial Holdings Inc. 4,366 92,996 Liquidmetal Technologies/1/ 11,637 92,980 Mattson Technology Inc./1/ 55,667 91,851 TriZetto Group Inc. (The)/1/ 18,442 91,841 Trex Co. Inc./1/ 3,359 91,835 Aaron Rents Inc. "B" 3,967 91,241 CompX International Inc. 9,792 90,870 Global Industries Ltd./1/ 21,944 90,629 Virginia Financial Group Inc. 2,982 89,549 EMC Insurance Group Inc. 6,262 89,296 CCC Information Services Group Inc./1/ 6,783 88,654 EMS Technologies Inc./1/ 8,630 88,544 Merchants Bancshares Inc. 3,574 88,278 Aspen Technology Inc./1/ 28,579 85,737 Horizon Offshore Inc./1/ 20,312 85,534 Guess ? Inc./1/ 19,925 85,478 Mid Atlantic Realty Trust 5,312 85,151 Protection One Inc./1/ 31,511 85,080 Technical Olympic USA Inc./1/ 5,566 85,043 Columbia Laboratories Inc./1/ 18,743 84,343 First Banks America Inc./1/ 2,100 84,315 Paxson Communications Corp./1/ 37,220 81,884 Zymogenetics Inc./1/ 10,222 81,776 Centene Corp./1/ 3,061 81,698 Penford Corp. 6,038 81,513 MRV Communications Inc./1/ 95,383 81,076 MEEMIC Holdings Inc./1/ 2,827 81,022 Molecular Devices Corp./1/ 6,415 80,252 Frontier Airlines Inc./1/ 16,403 80,047 O'Charley's Inc./1/ 4,251 79,668 NATCO Group Inc. "A"/1/ 10,536 79,336 Mail-Well Inc./1/ 75,544 78,566 Quovadx Inc./1/ 55,608 77,851 Elizabeth Arden Inc./1/ 6,471 77,587 Advanced Marketing Services Inc. 5,549 76,521 Internet Security Systems Inc./1/ 6,202 76,409 Paxar Corp./1/ 5,228 76,015 Flow International Corp./1/ 23,022 74,361 100 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ DJ Orthopedics Inc./1/ 19,450 $ 74,299 Electro Scientific Industries Inc./1/ 5,000 74,150 SpeechWorks International Inc./1/ 32,190 74,037 Avid Technology Inc./1/ 7,184 73,995 Southwestern Energy Co./1/ 6,160 73,920 Midas Inc./1/ 14,687 73,435 Fleming Companies Inc. 14,616 73,080 Vitria Technology Inc./1/ 93,268 72,749 Merix Corp./1/ 8,844 72,079 Hexcel Corp./1/ 29,016 71,960 First Consulting Group Inc./1/ 13,254 71,837 FileNET Corp./1/ 6,938 71,808 Veeco Instruments Inc./1/ 6,625 71,550 Lakeland Financial Corp. 3,010 71,307 Manufacturers Services Ltd./1/ 26,275 70,943 CPI Corp. 5,081 69,864 West Pharmaceutical Services Inc. 3,259 69,808 American Superconductor Corp./1/ 25,712 69,422 Rare Hospitality International Inc./1/ 2,951 69,112 RadiSys Corp./1/ 17,406 68,928 Sturm Ruger & Co. Inc. 5,648 68,906 CPB Inc. 1,492 68,886 Credit Acceptance Corp./1/ 8,297 68,035 Revlon Inc. "A"/1/ 22,707 67,894 DHB Industries Inc./1/ 31,077 65,883 ArthroCare Corp./1/ 5,432 65,836 ANADIGICS Inc./1/ 30,652 65,289 Ulticom Inc./1/ 11,803 65,271 Friedman Billings Ramsey Group Inc. "A"/1/ 6,419 65,024 Tennant Co. 1,992 64,441 Wet Seal Inc. "A"/1/ 6,416 64,160 Paradyne Networks Inc./1/ 47,773 63,538 Topps Co. (The)/1/ 7,339 63,262 Ciphergen Biosystems Inc./1/ 21,064 63,192 WFS Financial Inc./1/ 3,036 62,967 Nuance Communications Inc./1/ 36,372 61,832 Homestore.com Inc./1/ 205,752 61,726 PC Connection Inc./1/ 15,014 60,957 Seattle Genetics Inc./1/ 18,465 59,457 Dynamics Research Corp./1/ 4,046 58,991 Netegrity Inc./1/ 27,941 57,558 Capstone Turbine Corp./1/ 97,377 57,452 Matria Healthcare Inc./1/ 6,654 57,091 Speedway Motorsports Inc./1/ 2,417 56,920 Apogee Enterprises Inc. 5,200 56,888 WestPoint Stevens Inc./1/ 57,525 56,375 Mossimo Inc./1/ 9,552 56,166 Newpark Resources Inc./1/ 14,149 56,030 Ameristar Casinos Inc./1/ 2,937 55,686 NYMAGIC Inc./1/ 3,805 54,944 SONICblue Inc./1/ 227,991 54,718 Acme Communications Inc./1/ 7,008 54,662 Active Power Inc./1/ 40,735 54,585 Cardiac Science Inc./1/ 27,334 54,121 Insituform Technologies Inc. "A"/1/ 3,574 51,283 Zygo Corp./1/ 12,050 51,092 Nanometrics Inc./1/ 19,176 51,008 PDI Inc./1/ 12,527 50,985 AXT Inc./1/ 23,952 49,820 Time Warner Telecom Inc. "A"/1/ 60,321 48,860 Datastream Systems Inc./1/ 9,746 48,730 AVANIR Pharmaceuticals "A"/1/ 41,789 48,057 EMCORE Corp./1/ 31,130 47,318 NASB Financial Inc. 2,252 46,819 PLATO Learning Inc./1/ 7,014 46,643 ILEX Oncology Inc./1/ 9,805 46,574 Alloy Inc./1/ 5,588 46,436 Arden Group Inc. "A"/1/ 824 45,740 Inktomi Corp./1/ 182,710 45,677 Kos Pharmaceuticals Inc./1/ 3,907 43,754 Asyst Technologies Inc./1/ 7,189 43,422 Aurora Foods Inc./1/ 62,823 40,835 NetFlix Inc./1/ 4,207 40,808 Bone Care International Inc./1/ 6,919 39,992 Pixelworks Inc./1/ 7,698 39,645 Computer Programs & Systems Inc./1/ 1,833 39,190 UbiquiTel Inc./1/ 155,913 38,978 MTR Gaming Group Inc./1/ 4,210 38,774 Nash Finch Co. 2,840 38,624 Spectrian Corp./1/ 13,084 38,598 Schedules of Investments 101 Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ P.A.M. Transportation Services Inc./1/ 1,974 $ 37,664 Kyphon Inc./1/ 2,850 37,620 Hologic Inc./1/ 3,811 37,348 Tellium Inc./1/ 97,986 37,235 Stratos Lightwave Inc./1/ 102,329 36,838 Provident Bancorp Inc. 1,290 36,701 Key Productions Co. Inc./1/ 2,260 36,612 RCN Corp./1/ 70,877 36,147 Sharper Image Corp./1/ 1,847 35,315 Stanley Furniture Co. Inc./1/ 1,647 34,982 Centennial Communications Corp. "A"/1/ 12,047 34,936 Altiris Inc./1/ 3,477 34,596 Lawson Software Inc./1/ 9,758 34,543 Synaptics Inc./1/ 7,073 34,021 Next Level Communications Inc./1/ 43,931 33,827 Glatfelter Co. 2,896 33,449 Alaris Medical Inc./1/ 6,701 31,964 Digimarc Corp./1/ 2,732 31,882 Alamosa Holdings Inc./1/ 137,886 31,714 Vastera Inc./1/ 14,615 31,422 Epix Medical Inc./1/ 6,918 31,339 Bio-Reference Laboratories Inc./1/ 4,571 29,711 ON Semiconductor Corp./1/ 22,352 27,940 Alaska Communications Systems Group Inc./1/ 16,509 27,735 Verint Systems Inc./1/ 3,142 27,112 Deltagen Inc./1/ 18,024 27,036 Handspring Inc./1/ 28,525 26,813 eUniverse Inc./1/ 9,107 26,684 Inforte Corp./1/ 5,140 26,317 Skechers U.S.A. Inc. "A"/1/ 2,724 25,987 Allscripts Healthcare Solutions Inc./1/ 9,036 25,843 Galyan's Trading Co./1/ 2,574 25,766 Checkers Drive-in Restaurants Inc./1/ 3,214 25,712 Entrust Inc./1/ 7,813 24,533 Capitol Bancorp Ltd. 1,394 24,283 Electroglas Inc./1/ 11,702 23,404 National Beverage Corp./1/ 1,603 21,897 BWAY Corporation/1/ 1,569 21,809 ATA Holdings Corp./1/ 6,404 21,774 Aftermarket Technology Corp./1/ 1,681 21,735 Riverstone Networks Inc./1/ 42,505 21,678 Somera Communications Inc./1/ 10,404 21,328 Digitas Inc./1/ 9,669 21,272 Acterna Corp./1/ 51,935 20,774 Overstock.com Inc./1/ 3,462 20,599 Liberty Livewire Corp. "A"/1/ 12,923 20,289 Gart Sports Co./1/ 1,041 19,644 Value Line Inc. 490 19,110 Dril-Quip Inc./1/ 1,120 18,872 Texas Biotech Corp./1/ 5,960 18,238 Caminus Corp./1/ 10,142 18,053 CoorsTek Inc./1/ 1,150 17,250 Optical Communication Products Inc./1/ 22,318 17,185 Option Care Inc./1/ 1,903 16,842 Magellan Health Services Inc./1/ 64,561 16,786 Roxio Inc./1/ 5,470 16,574 Trikon Technologies Inc./1/ 2,891 16,421 DDi Corp./1/ 101,908 16,203 First State Bancorp 653 16,096 Tropical Sportswear International Corp./1/ 1,050 13,629 Bruker AXS Inc./1/ 5,065 10,636 Syntroleum Corp./1/ 5,968 9,907 Medis Technologies Ltd./1/ 2,307 9,874 Infogrames Inc./1/ 4,250 9,435 MapInfo Corp./1/ 2,341 9,247 IXYS Corp./1/ 1,661 8,355 Dobson Communications Corp. "A"/1/ 25,390 7,871 Sangamo BioSciences Inc./1/ 3,319 6,538 Advanced Power Technology Inc./1/ 1,674 6,512 Suntron Corp./1/ 2,001 6,503 Penton Media Inc./1/ 20,138 4,833 Therma-Wave Inc./1/ 5,805 4,586 TTM Technologies Inc./1/ 2,218 3,482 Burnham Pacific Properties Inc. 1,448 1,651 TOTAL COMMON STOCKS (Cost: $990,212,422) 783,009,005 102 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited)(Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ SHORT TERM INSTRUMENTS - 6.00% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 40,786,462 $ 40,786,462 Dreyfus Money Market Fund 2,931,732 2,931,732 Goldman Sachs Financial Square Prime Obligation Fund 627,910 627,910 Providian Temp Cash Money Market Fund 2,772,598 2,772,598 TOTAL SHORT TERM INSTRUMENTS (Cost: $47,118,702) 47,118,702 TOTAL INVESTMENTS IN SECURITIES - 105.78% (Cost $1,037,331,124) 830,127,707 Other Assets, Less Liabilities - (5.78%) (45,369,873) ------------ NET ASSETS - 100.00% $784,757,834 ============ /1/ Non-income earning securities. See notes to Financial Statements. Schedules of Investments 103 Statements of Assets and Liabilities (Unaudited) iSHARES TRUST September 30, 2002
iShares Russell ---------------------------------------------------------------------------------------- 1000 1000 Growth 1000 Value 2000 2000 Growth 2000 Value Index Fund Index Fund Index Fund Index Fund Index Fund Index Fund - ----------------------------------------------------------------------------------------------------------------------------------- ASSETS Investments at cost $796,882,204 $648,243,803 $1,052,443,616 $3,594,486,374 $543,772,452 $1,037,331,124 ------------ ------------ -------------- -------------- ------------ -------------- Investments in securities, at value (including securities on loan/1/) (Note 1) $605,710,503 $476,671,685 $ 807,674,297 $2,691,453,212 $416,885,416 $ 830,127,707 Cash 35,571 - - - - - Receivables: Dividends and interest 888,799 577,026 1,444,136 4,172,289 374,852 1,832,687 ------------ ------------ -------------- -------------- ------------ -------------- Total Assets 606,634,873 477,248,711 809,118,433 2,695,625,501 417,260,268 831,960,394 ------------ ------------ -------------- -------------- ------------ -------------- LIABILITIES Payables: Collateral for securities on loan (Note 5) 9,199,855 7,771,782 14,250,883 287,065,636 48,317,156 46,858,844 Advisory fees (Note 2) 151,124 162,254 271,698 877,488 158,626 343,716 ------------ ------------ -------------- -------------- ------------ -------------- Total Liabilities 9,350,979 7,934,036 14,522,581 287,943,124 48,475,782 47,202,560 ------------ ------------ -------------- -------------- ------------ -------------- NET ASSETS $597,283,894 $469,314,675 $ 794,595,852 $2,407,682,377 $368,784,486 $ 784,757,834 ============ ============ ============== ============== ============ ============== NET ASSETS CONSIST OF: Paid-in capital $817,968,599 $746,915,732 $1,065,196,018 $3,404,251,784 $586,098,135 $ 953,397,675 Undistributed net investment income 490,500 379,233 664,819 3,429,939 261,771 1,647,408 Undistributed net realized gain (loss) (30,003,504) (106,408,172) (26,495,666) (96,966,184) (90,688,384) 36,916,168 Net unrealized depreciation (191,171,701) (171,572,118) (244,769,319) (903,033,162) (126,887,036) (207,203,417) ------------ ------------ -------------- ------------- ------------ -------------- NET ASSETS $597,283,894 $469,314,675 $ 794,595,852 $2,407,682,377 $368,784,486 $ 784,757,834 ============ ============ ============== ============== ============ ============== iShares outstanding 13,750,000 13,750,000 18,750,000 33,350,000 9,850,000 7,300,000 ============ ============ ============== ============== ============ ============== Net asset value per iShare $ 43.44 $ 34.13 $ 42.38 $ 72.19 $ 37.44 $ 107.50 ============ ============ ============== ============== ============ ==============
/1/ Securities on loan with market values of $8,666,627, $7,363,954, $13,430,863, $269,120,218, $45,456,640 and $43,694,974, respectively. See Note 5. See notes to financial statements. 104 2002 iShares Semi-Annual Report to Shareholders Statements of Operations (Unaudited) iSHARES TRUST For the six months ended September 30, 2002
iShares Russell --------------------------------------------------------------------------------------- 1000 1000 Growth 1000 Value 2000 2000 Growth 2000 Value Index Fund Index Fund Index Fund Index Fund Index Fund Index Fund - ----------------------------------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME Dividends/1/ $ 4,123,137 $ 2,288,606 $ 9,088,637 $ 19,887,336 $ 1,444,950 $ 9,341,479 Interest 5,758 2,242 8,972 114,490 4,167 12,652 Securities lending income 10,340 12,730 17,199 423,267 95,084 80,224 ------------- ------------- ------------- ------------- ------------- ------------- Total investment income 4,139,235 2,303,578 9,114,808 20,425,093 1,544,201 9,434,355 ------------- ------------- ------------- ------------- ------------- ------------- EXPENSES (NOTE 2) Advisory fees 372,402 474,807 796,080 2,838,636 519,579 1,181,536 ------------- ------------- ------------- ------------- ------------- ------------- Total expenses 372,402 474,807 796,080 2,838,636 519,579 1,181,536 ------------- ------------- ------------- ------------- ------------- ------------- Net investment income 3,766,833 1,828,771 8,318,728 17,586,457 1,024,622 8,252,819 ------------- ------------- ------------- ------------- ------------- ------------- NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from: Investments (13,678,691) (63,153,665) (21,276,412) (149,958,757) (65,565,979) (21,950,180) In-kind redemptions - 4,046,020 7,266,453 120,093,260 8,947,659 70,808,332 ------------- ------------- ------------- ------------- ------------- ------------- Net realized gain (loss) (13,678,691) (59,107,645) (14,009,959) (29,865,497) (56,618,320) 48,858,152 ------------- ------------- ------------- ------------- ------------- ------------- Net change in unrealized appreciation (depreciation) on investments (148,302,324) (121,312,046) (239,529,329) (940,131,240) (117,041,856) (299,612,112) ------------- ------------- ------------- ------------- ------------- ------------- Net realized and unrealized loss (161,981,015) (180,419,691) (253,539,288) (969,996,737) (173,660,176) (250,753,960) ------------- ------------- ------------- ------------- ------------- ------------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(158,214,182) $(178,590,920) $(245,220,560) $(952,410,280) $(172,635,554) $(242,501,141) ============= ============= ============= ============= ============= =============
/1/ Net of foreign withholding tax of $380, $50, $1,032, $9,284, $2,038 and $1,940, respectively. See notes to financial statements. Financial Statements 105 Statements of Changes in Net Assets iSHARES TRUST
iShares Russell 1000 iShares Russell 1000 Index Fund Growth Index Fund ---------------------------------- ---------------------------------- For the six For the six months ended For the months ended For the September 30, 2002 year ended September 30, 2002 year ended (Unaudited) March 31, 2002 Unaudited) March 31, 2002 - ----------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 3,766,833 $ 3,684,451 $ 1,828,771 $ 2,114,654 Net realized gain (loss) (13,678,691) 2,411,962 (59,107,645) (42,267,562) Net change in unrealized appreciation (depreciation) (148,302,324) 494,427 (121,312,046) 1,378,927 ------------- ------------- ------------- ------------- Net increase (decrease) in net assets resulting from operations (158,214,182) 6,590,840 (178,590,920) (38,773,981) ------------- ------------- ------------- ------------- DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income (3,515,016) (3,516,544) (1,574,213) (1,993,842) ------------- ------------- ------------- ------------ Total distributions to iShareholders (3,515,016) (3,516,544) (1,574,213) (1,993,842) ------------- ------------- ------------- ------------- iSHARES TRANSACTIONS: iShares sold 339,441,959 386,533,984 203,661,992 432,772,933 iShares redeemed - (177,760,490) (37,647,028) (117,617,813) ------------- ------------- ------------- ------------- Net increase in net assets from iShares transactions 339,441,959 208,773,494 166,014,964 315,155,120 ------------- ------------- ------------- ------------- INCREASE (DECREASE) IN NET ASSETS 177,712,761 211,847,790 (14,150,169) 274,387,297 NET ASSETS: Beginning of period 419,571,133 207,723,343 483,464,844 209,077,547 ------------- ------------- ------------- ------------- End of period $ 597,283,894 $ 419,571,133 $ 469,314,675 $ 483,464,844 ============= ============= ============= ============= Undistributed net investment income included in net assets at end of period $ 490,500 $ 238,683 $ 379,233 $ 124,675 ============= ============= ============= ============= iSHARES ISSUED AND REDEEMED: iShares sold 6,850,000 6,450,000 4,950,000 8,000,000 iShares redeemed - (2,950,000) (950,000) (2,350,000) ------------- ------------- ------------- ------------- Net increase in iShares outstanding 6,850,000 3,500,000 4,000,000 5,650,000 ============= ============= ============= ============= iShares Russell 1000 Value Index Fund ---------------------------------- For the six months ended For the September 30, 2002 year ended (Unaudited) March 31, 2002 ---------------------------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 8,318,728 $ 8,423,31 Net realized gain (loss) (14,009,959) 7,397,423 Net change in unrealized appreciation (depreciation) (239,529,329) 4,575,129 ----------- ------------ Net increase (decrease) in net assets resulting from operations (245,220,560) 20,395,870 ----------- ------------ DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income (8,185,871) (7,968,208) ------------ ------------ Total distributions to iShareholders (8,185,871) (7,968,208) ------------ ------------ iSHARES TRANSACTIONS: iShares sold 521,054,063 687,791,275 iShares redeemed (164,440,929) 199,834,895 ------------- ------------ Net increase in net assets from iShares transactions 356,613,134 487,956,380 ----------- ------------ INCREASE (DECREASE) IN NET ASSETS 103,206,703 500,384,042 NET ASSETS: Beginning of period 691,389,149 191,005,107 ------------- ------------ End of period $ 794,595,852 $691,389,149 ============= ============ Undistributed net investment income included in net assets at end of period $ 664,819 $ 531,962 ============= ============ iSHARES ISSUED AND REDEEMED: iShares sold 10,050,000 12,200,000 iShares redeemed (3,300,000) 3,600,000) ------------- ------------ Net increase in iShares outstanding 6,750,000 8,600,00 ============= ============
See notes to financial statements. 106 2002 iShares Semi-Annual Report to Shareholders Statements of Changes in Net Assets (Continued) iSHARES TRUST
iShares Russell 2000 iShares Russell 2000 iShares Russell 2000 Index Fund Growth Index Fund Value Index Fund --------------------------------- --------------------------------- --------------------------------- For the six For the six For the six months ended For the months ended For the months ended For the September 30, 2002 year ended September 30, 2002 year ended September 30, 2002 year ended (Unaudited) March 31, 2002 (Unaudited) March 31, 2002 (Unaudited) March 31, 2002 - ---------------------------------------------------------------- --------------------------------- --------------------------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 17,586,457 $ 19,805,955 $ 1,024,622 $ 679,204 $ 8,252,819 $ 10,375,201 Net realized gain (loss) 29,865,497) 53,887,648 (56,618,320) (24,103,050) 48,858,152 11,979,898 Net change in unrealized appreciation (depreciation) (940,131,240) 106,656,881 (117,041,856) 23,140,519 (299,612,112) 82,906,789 -------------- -------------- ------------- ------------- ------------- ------------- Net increase (decrease) in net assets resulting from operations (952,410,280) 180,350,484 (172,635,554) (283,327) (242,501,141) 105,261,888 -------------- -------------- ------------- ------------- ------------- DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income (17,340,951) (16,627,178) (871,414) (566,781) (8,384,591) (8,688,498) -------------- -------------- ------------- ------------- ------------- ------------- Total distributions to iShareholders (17,340,951) (16,627,178) (871,414) (566,781) (8,384,591) (8,688,498) -------------- -------------- ------------- ------------- ------------- ------------- iSHARES TRANSACTIONS: iShares sold 1,941,332,975 2,328,641,415 170,426,660 314,890,447 563,948,113 544,536,783 iShares redeemed (1,002,799,141) (767,404,281) (64,546,779) (32,887,260) (366,272,277) (76,905,774) -------------- -------------- ------------- ------------- ------------- ------------- Net increase in net assets from iShares transactions 938,533,834 1,561,237,134 105,879,881 282,003,187 197,675,836 467,631,009 -------------- -------------- ------------- ------------- ------------- ------------- INCREASE (DECREASE) IN NET ASSETS (31,217,397) 1,724,960,440 (67,627,087) 281,153,079 NET ASSETS: Beginning of period 2,438,899,774 713,939,334 436,411,573 155,258,494 837,967,730 273,763,331 -------------- -------------- ------------- ------------- ------------- ------------- End of period $2,407,682,377 $2,438,899,774 $ 368,784,486 $ 436,411,573 $ 784,757,834 $ 837,967,730 ============== ============== ============= ============= ============= ============= Undistributed net investment income included in net assets at end of period $ 3,429,939 $ 3,184,433 $ 261,771 $ 108,563 $ 1,647,408 $ 1,779,180 ============== ============== ============= ============= ============= ============= iSHARES ISSUED AND REDEEMED: iShares sold 20,350,000 24,450,000 3,650,000 5,550,000 4,050,000 4,250,000 iShares redeemed (11,200,000) (8,200,000) (1,500,000) (700,000) (2,700,000) (650,000) -------------- -------------- -------------- ------------- ------------- ------------- Net increase in iShares outstanding 9,150,000 16,250,000 2,150,000 4,850,000 1,350,000 3,600,000 ============== ============== ============== ============= ============= =============
See notes to financial statements. Financial Statements 107 Financial Highlights iSHARES TRUST (For a share outstanding throughout each period)
iShares Russell 1000 iShares Russell 1000 Index Fund Growth Index Fund ------------------------------------------------- -------------------------------------------------- Six months Period from Six months Period from ended May 15, 2000/1/ ended May 22, 2000/1/ Sep. 30, 2002 Year ended to Sep. 30, 2002 Year ended to (Unaudited) Mar. 31, 2002 Mar. 31, 2001 (Unaudited) Mar. 31, 2002 Mar. 31, 2001 - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 60.81 $ 61.10 $ 76.78 $ 49.59 $ 50.99 $ 79.30 ---------- ------------- ---------- ------------- ----------- --------- Income from investment operations: Net investment income 0.33 0.70 0.64 0.13 0.23 0.14 Net realized and unrealized loss (17.37) (0.30) (15.71) (15.47) (1.41) (28.20) ---------- ------------- ---------- ------------- ----------- --------- Total from investment operations (17.04) 0.40 (15.07) (15.34) (1.18) (28.06) ---------- ------------- ---------- ------------- ----------- --------- Less distributions from: Net investment income (0.33) (0.69) (0.61) (0.12) (0.22) (0.14) Net realized gain - - (0.00)/5/ - - (0.11) ---------- ------------- ---------- ------------- ----------- --------- Total distributions (0.33) (0.69) (0.61) (0.12) (0.22) (0.25) ---------- ------------- ---------- ------------- ----------- --------- Net asset value, end of period $ 43.44 $ 60.81 $ 61.10 $ 34.13 $ 49.59 $ 50.99 ========== ============= ========== ============= =========== ========= Total return (28.10)%/2/ 0.68% (19.75)%/2/ (30.96)%/2/ (2.30)% (35.47)%/2/ ========== ============= ========== ============= =========== ========= Ratios/Supplemental data: Net assets, end of period (000s) $ 597,284 $ 419,571 $ 207,723 $ 469,315 $ 483,465 $ 209,078 Ratio of expenses to average net assets/3/ 0.15% 0.15% 0.15% 0.20% 0.20% 0.20% Ratio of net investment income to average net assets/3/ 1.52% 1.23% 1.01% 0.77% 0.52% 0.26% Portfolio turnover rate/4/ 4% 8% 9% 16% 22% 11%
/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. See notes to financial statements. 108 2002 iShares Semi-Annual Report to Shareholders Financial Highlights (Continued) iSHARES TRUST (For a share outstanding throughout each period)
iShares Russell 1000 iShares Russell 2000 Value Index Fund Index Fund ----------------------------------------------- ------------------------------------------------- Six months Period from Six months Period from ended May 22, 2000/1/ ended May 22, 2000/1/ Sep. 30, 2002 Year ended to Sep. 30, 2002 Year ended to (Unaudited) Mar. 31, 2002 Mar. 31, 2001 (Unaudited) Mar. 31, 2002 Mar. 31, 2001 - ------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 57.62 $ 56.18 $ 56.10 $ 100.78 $ 89.80 $ 94.33 ---------------------------------------------------------------------------------------------- Income from investment operations: Net investment income 0.47 0.90 0.66 0.47 1.04 0.98 Net realized and unrealized gain (loss) (15.23) 1.43 0.04 (28.56) 10.90 (4.47) ---------------------------------------------------------------------------------------------- Total from investment operations (14.76) 2.33 0.70 (28.09) 11.94 (3.49) ---------------------------------------------------------------------------------------------- Less distributions from: Net investment income (0.48) (0.89) (0.62) (0.50) (0.96) (0.88) Net realized gain - - - - - (0.16) ---------------------------------------------------------------------------------------------- Total distributions (0.48) (0.89) (0.62) (0.50) (0.96) (1.04) ---------------------------------------------------------------------------------------------- Net asset value, end of period $ 42.38 $ 57.62 $ 56.18 $ 72.19 $ 100.78 $ 89.80 ============================================================================================== Total return (25.73)%/2/ 4.22% 1.22%/2/ (27.94)%/2/ 13.40% (3.77)%/2/ ============================================================================================== Ratios/Supplemental data: Net assets, end of period (000s) $ 794,596 $ 691,389 $ 191,005 $2,407,682 $2,438,900 $ 713,939 Ratio of expenses to average net assets/3/ 0.20% 0.20% 0.20% 0.20% 0.20% 0.20% Ratio of net investment income to average net assets/3/ 2.09% 1.82% 1.64% 1.24% 1.25% 1.39% Portfolio turnover rate/4/ 19% 16% 9% 23% 20% 39%
/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 Statements. 109 Financial Highlights (Continued) iSHARES TRUST (For a share outstanding throughout each period)
iShares Russell 2000 iShares Russell 2000 Growth Index Fund Value Index Fund ------------------------------------------------ ------------------------------------------------- Six months Period from Six months Period from ended Jul. 24, 2000/1/ ended Jul. 24, 2000/1/ Sep. 30, 2002 Year ended to Sep. 30, 2002 Year ended to (Unaudited) Mar. 31, 2002 Mar. 31, 2001 (Unaudited) Mar. 31, 2002 Mar. 31, 2001 - -------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 56.68 $ 54.48 $ 81.36 $ 140.83 $ 116.50 $ 103.35 ---------- -------- ------------ --------- ----------- --------- Income from investment operations: Net investment income 0.10 0.11 0.05 1.11 2.30 1.49 Net realized and unrealized gain (loss) (19.25) 2.19 (26.85) (33.25) 24.16 12.97 ---------- -------- ------------ --------- ----------- --------- Total from investment operations (19.15) 2.30 (26.80) (32.14) 26.46 14.46 ---------- -------- ------------ --------- ----------- --------- Less distributions from: Net investment income (0.09) (0.10) (0.04) (1.19) (2.13) (1.28) Net realized gain - - (0.04) - - (0.03) ---------- -------- ------------ --------- ----------- --------- Total distributions (0.09) (0.10) (0.08) (1.19) (2.13) (1.31) ---------- -------- ------------ --------- ----------- --------- Net asset value, end of period $ 37.44 $ 56.68 $ 54.48 $ 107.50 $ 140.83 $ 116.50 ========== ======== ============ ========= =========== ========= Total return (33.80)%/2/ 4.24% (32.96)%/2/ (22.96)%/2/ 23.05% 14.05%/2/ ========== ======== ============ ========= =========== ========= Ratios/Supplemental data: Net assets, end of period (000s) $ 368,784 $436,412 $ 155,258 $ 784,758 $ 837,968 $ 273,763 Ratio of expenses to average net assets/3/ 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% Ratio of net investment income to average net assets/3/ 0.49% 0.22% 0.14% 1.75% 2.07% 2.40% Portfolio turnover rate/4/ 42% 28% 9% 37% 26% 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. 110 2002 iShares Semi-Annual Report to Shareholders Notes to the Financial Statements (Unaudited) iSHARES TRUST 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 September 30, 2002, the Trust offered 59 investment portfolios or funds. These financial statements relate only to the iShares Russell 1000, iShares Russell 1000 Growth, iShares Russell 1000 Value, iShares Russell 2000, iShares Russell 2000 Growth, and iShares Russell 2000 Value Index Funds (each a "Fund", collectively the "Funds"). 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. Each of the Funds is classified as a diversified fund under the 1940 Act, except for the iShares Russell 1000 Growth Index Fund, which is classified as a non-diversified fund. Non-diversified funds generally hold stocks of fewer companies than diversified funds and may be more susceptible to the risks associated with these particular companies, or to a single economic, political or regulatory occurrence. The following significant accounting policies are consistently followed by the Trust in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") for investment companies. The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions. Actual results could differ from those estimates. SECURITY VALUATION Equity securities are valued at the last sales price on the primary securities exchange or national securities market on which such securities are traded. Securities not listed on an exchange or national securities market, or securities for which there 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. 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. Notes to the Financial Statements 111 Notes to the Financial Statements (Unaudited)(Continued) iSHARES TRUST At March 31, 2002, the tax year-end of the Funds, the components of distributable earnings on a tax basis were as follows: --------------------------------------------------------------------------- Undistributed Undistributed Total Distributable iShares Index Fund Ordinary Income Long-term Gain Earnings --------------------------------------------------------------------------- Russell 1000 $ 232,270 $ - $ 232,270 Russell 1000 Growth 124,072 - 124,072 Russell 1000 Value 503,928 - 503,928 Russell 2000 2,515,585 - 2,515,585 Russell 2000 Growth 77,172 - 77,172 Russell 2000 Value 1,355,213 - 1,355,213 --------------------------------------------------------------------------- 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 the Funds. 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. FEDERAL INCOME TAXES Each Fund is treated as a separate entity for federal income tax purposes. It is the policy of each Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its net income and any net gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes was required for the six months ended September 30, 2002. The following Funds had tax basis net capital loss carryforwards at March 31, 2002, the tax year-end of the Funds: --------------------------------------------------------------------------- Expiring Expiring iShares Index Fund 2009 2010 Total --------------------------------------------------------------------------- Russell 1000 $ - $12,325,552 $12,325,552 Russell 1000 Growth - 20,107,067 20,107,067 Russell 1000 Value 99,151 5,765,240 5,864,391 Russell 2000 - 47,681,248 47,681,248 Russell 2000 Growth - 14,797,300 14,797,300 Russell 2000 Value - 6,838,382 6,838,382 --------------------------------------------------------------------------- Net capital loss carryforwards may be applied against any net realized taxable gains in each succeeding year, or until their respective expiration dates, whichever occurs first. For the six months ended September 30, 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. These reclassifications have no effect on net assets or net asset values per share. The in-kind gains or losses for the six months ended September 30, 2002 are disclosed in the Statements of Operations. 112 2002 iShares Semi-Annual Report to Shareholders Notes to the Financial Statements (Unaudited) (Continued) iSHARES TRUST 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 September 30, 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. 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 Advisory iShares Index Fund Fee iShares Index Fund Fee ----------------------------------- ----------------------------------- Russell 1000 0.15% Russell 2000 0.20% Russell 1000 Growth 0.20 Russell 2000 Growth 0.25 Russell 1000 Value 0.20 Russell 2000 Value 0.25 ----------------------------------- ----------------------------------- 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. Notes to the Financial Statements 113 Notes to the Financial Statements (Unaudited) (Continued) iSHARES TRUST Barclays Global Investors Services ("BGIS"), a subsidiary of Barclays Global Investors, N.A., may serve as a broker-dealer for the Funds. For the six months ended September 30, 2002, BGIS did not receive any brokerage commissions from the Funds. 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 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 from temporary cash investments or from investment of securities lending collateral are recorded as either interest income or securities lending income, respectively, in the accompanying Statements of Operations. Pursuant to Rule 17a-7 of the 1940 Act, certain Funds executed cross trades for the six months ended September 30, 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 of September 30, 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 six months ended September 30, 2002 were as follows: -------------------------------------------------------- iShares Index Fund Purchases Sales -------------------------------------------------------- Russell 1000 $ 17,735,384 $ 17,408,179 Russell 1000 Growth 76,002,138 75,786,849 Russell 1000 Value 153,519,091 153,234,167 Russell 2000 628,241,182 629,686,962 Russell 2000 Growth 176,537,853 176,527,023 Russell 2000 Value 342,510,120 344,305,540 -------------------------------------------------------- 114 2002 iShares Semi-Annual Report to Shareholders Notes to the Financial Statements (Unaudited) (Continued) iSHARES TRUST In-kind transactions for the six months ended September 30, 2002 were as follows: ------------------------------------------------------ In-Kind In-Kind iShares Index Fund Purchases Sales ------------------------------------------------------ Russell 1000 $ 338,985,412 $ - Russell 1000 Growth 203,506,792 37,622,077 Russell 1000 Value 520,106,621 164,139,998 Russell 2000 1,935,800,079 996,700,804 Russell 2000 Growth 170,251,182 64,346,337 Russell 2000 Value 563,182,183 363,987,916 ------------------------------------------------------ At September 30, 2002, the aggregate unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:
------------------------------------------------------------------------------------- Net Tax Unrealized Unrealized Unrealized iShares Index Fund Cost Appreciation Depreciation Depreciation ------------------------------------------------------------------------------------- Russell 1000 $ 796,882,204 $ 7,880,960 $(199,052,661) $(191,171,701) Russell 1000 Growth 648,243,803 4,654,386 (176,226,504) (171,572,118) Russell 1000 Value 1,052,443,616 5,631,665 (250,400,984) (244,769,319) Russell 2000 3,594,486,374 43,558,555 (946,591,717) (903,033,162) Russell 2000 Growth 543,772,452 10,271,485 (137,158,521) (126,887,036) Russell 2000 Value 1,037,331,124 15,497,394 (222,700,811) (207,203,417) -------------------------------------------------------------------------------------
4. iSHARES TRANSACTIONS At September 30, 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 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 Notes to the Financial Statements 115 Notes to the Financial Statements (Unaudited) (Continued) iSHARES TRUST 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 September 30, 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 September 30, 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, which allegedly covers a mechanism for continuous pricing of exchange traded funds. 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 two 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. 116 2002 iShares Semi-Annual Report to Shareholders Notes: Notes 117 The iShares Family of Funds The following is a list of iShares Funds being offered, along with their respective exchange trading symbols. Please call iShares at 1-800-iShares (1-800-474-2737) to obtain a prospectus for any iShares fund. It contains more complete information, including charges and expenses. Broad Market iShares Dow Jones U.S. Total Market Index Fund (IYY) iShares Russell 3000 Index Fund (IWV) iShares Russell 3000 Growth Index Fund (IWZ) iShares Russell 3000 Value Index Fund (IWW) Large Cap iShares Russell 1000 Index Fund (IWB) iShares Russell 1000 Growth Index Fund (IWF) iShares Russell 1000 Value Index Fund (IWD) 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) Mid Cap iShares Russell Midcap Index Fund (IWR) iShares Russell Midcap Growth Index Fund (IWP) iShares Russell Midcap Value Index Fund (IWS) 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) Small Cap iShares Russell 2000 Index Fund (IWM) iShares Russell 2000 Growth Index Fund (IWO) iShares Russell 2000 Value Index Fund (IWN) 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) Sector & Industry iShares Cohen & Steers Realty Majors Index Fund (ICF) iShares Dow Jones U.S. Basic Materials Sector Index Fund (IYM) iShares Dow Jones U.S. Chemicals Index Fund (IYD) * 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. Financial Services Index Fund (IYG) 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. Internet Index Fund (IYV) * iShares Dow Jones U.S. Real Estate Index Fund (IYR) 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 Goldman Sachs Natural Resources Index Fund (IGE) iShares Goldman Sachs Networking Index Fund (IGN) iShares Goldman Sachs Semiconductor Index Fund (IGW) iShares Goldman Sachs Software Index Fund (IGV) iShares Goldman Sachs Technology Index Fund (IGM) iShares Nasdaq Biotechnology Index Fund (IBB) Fixed Income iShares Lehman 1-3 Year Treasury Bond Fund (SHY) iShares Lehman 7-10 Year Treasury Bond Fund (IEF) iShares Lehman 20+ Year Treasury Bond Fund (TLT) iShares GS $ InvesTop(TM) Corporate Bond Fund (LQD) Global Sector 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) International/Broad Market iShares MSCI EAFE Index Fund (EFA) International/Regional iShares MSCI EMU Index Fund (EZU) iShares MSCI Pacific ex-Japan Index Fund (EPP) iShares S&P Europe 350 Index Fund (IEV) International/Developed Country iShares MSCI Australia Index Fund (EWA) iShares MSCI Austria Index Fund (EWO) iShares MSCI Belgium Index Fund (EWK) iShares MSCI Canada Index Fund (EWC) iShares MSCI France Index Fund (EWQ) iShares MSCI Germany Index Fund (EWG) iShares MSCI Hong Kong Index Fund (EWH) iShares MSCI Italy Index Fund (EWI) iShares MSCI Japan Index Fund (EWJ) iShares MSCI Netherlands Index Fund (EWN) iShares MSCI Singapore Index Fund (EWS) iShares MSCI Spain Index Fund (EWP) iShares MSCI Sweden Index Fund (EWD) iShares MSCI Switzerland Index Fund (EWL) iShares MSCI United Kingdom Index Fund (EWU) iShares S&P/TOPIX 150 Index Fund (ITF) iShares S&P/TSE 60 Index Fund (IKC) * International/Emerging Country iShares MSCI Brazil Index Fund (EWZ) iShares MSCI Malaysia Index Fund (EWM) iShares MSCI Mexico Index Fund (EWW) iShares MSCI South Korea Index Fund (EWY) iShares MSCI Taiwan Index Fund (EWT) iShares S&P Latin America 40 Index Fund (ILF) Global/Broad Market iShares S&P Global 100 Index Fund (IOO) * Fund termination and liquidation anticipated on December 13, 2002. This advertising section does not constitute part of the 2002 Semi-Annual Report. iShares are not sponsored or endorsed by Goldman, Sachs & Co. or Lehman Brothers, nor are they sponsored, endorsed, sold or promoted by Cohen & Steers Capital Management, Inc., Dow Jones & Company, Inc., Morgan Stanley Capital International, The Nasdaq Stock Market, Inc., Frank Russell Company, or Standard & Poor's. None of these companies make any representation regarding the advisability of investing in iShares. Neither SEI nor BGI, nor any of their affiliates, are affiliated with Goldman, Sachs & Co. or Lehman Brothers. "GS $ InvesTop(TM)," "GS $ InvesTop(TM) Index," "GS $ Investment Grade Index(TM)" and "Goldman Sachs(R)" are trademarks of Goldman, Sachs & Co. The methodology of the GS $ InvesTop(TM) Index is owned by Goldman, Sachs & Co., may be covered by one or more patents or pending patent applications and is provided under license from Goldman, Sachs & Co. 118 2002 iShares Semi-annual Report to Shareholders iShares are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors (BGFA) serves as an advisor 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. Investors Bank & Trust Company serves as administrator, custodian, securities lending agent and transfer agent. iShares are not sponsored, endorsed, sold or promoted by Frank Russell Company, nor does this company make any representation regarding the advisability of investing in iShares. Investing involves risk, including possible loss of principal. (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. [GRAPHIC] iShares(R) Industrial strength investment tools form BARCLAYS GLOBAL INVESTORS 1-800-iShares (474-2737) www.iShares.com BGI-F-006-0300 iShares(R) 2002 SEMI-ANNUAL REPORT TO SHAREHOLDERS SEPTEMBER 30, 2002 [PICTURE] INDUSTRIAL STRENGTH INVESTMENT TOOLS iSHARES S&P 500 INDEX FUND iSHARES S&P 500/BARRA GROWTH INDEX FUND iSHARES S&P 500/BARRA VALUE INDEX FUND iSHARES S&P MIDCAP 400 INDEX FUND iSHARES S&P MIDCAP 400/BARRA GROWTH INDEX FUND iSHARES S&P MIDCAP 400/BARRA VALUE INDEX FUND iSHARES S&P SMALLCAP 600 INDEX FUND iSHARES S&P SMALLCAP 600/BARRA GROWTH INDEX FUND iSHARES S&P SMALLCAP 600/BARRA VALUE INDEX FUND Table of Contents Shareholder Letter ................................................................. 1 Market Overview .................................................................... 3 Managers' Discussion & Analysis .................................................... 6 Schedules of Investments ........................................................... 12 iShares S&P 500 Index Fund ....................................................... 12 iShares S&P 500/BARRA Growth Index Fund .......................................... 19 iShares S&P 500/BARRA Value Index Fund ........................................... 22 iShares S&P MidCap 400 Index Fund ................................................ 27 iShares S&P MidCap 400/BARRA Growth Index Fund ................................... 32 iShares S&P MidCap 400/BARRA Value Index Fund .................................... 35 iShares S&P SmallCap 600 Index Fund .............................................. 38 iShares S&P SmallCap 600/BARRA Growth Index Fund ................................. 46 iShares S&P SmallCap 600/BARRA Value Index Fund .................................. 50 Financial Statements ............................................................... 55 Financial Highlights ............................................................... 62 Notes to the Financial Statements .................................................. 67 iShares Family of Funds ............................................................ 74
To Our Shareholders While the second half of 2001 was a difficult period for us all, 2002 has also been a time of tumultuous market events. As a whole, the past year has seen scores of layoffs, company closings, and corporate accounting scandals in the wake of the emotional shock of September 11. The past year has been truly remarkable for iShares considering the market environment. By the close of our second 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. However, iShares has followed a very different course. Instead of shrinking in size, iShares' assets under management grew to over $24 billion as of September 30, 2002. In fact, the iShares family of funds became the nation's third fastest growing family of equity funds/2/ during the period June 2001 through June 2002, surpassing some of the most established and best-known mutual fund groups. In July, iShares celebrated another milestone: the launch of the first-ever fixed income exchange traded funds. These four fixed income iShares funds -- three bond funds based on Lehman U.S. Treasury indexes, and one based on a Goldman Sachs-Registered Trademark- corporate bond index -- were greeted with an enthusiastic reception from the investment community. These new funds attracted $3 billion in assets in their first week of trading. That is an impressive beginning considering that total inflows for all U.S. bond mutual funds combined was $50 billion for the first six months of 2002./3/ With a total of 81 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). Total assets under management for all iShares funds have grown tenfold since they were first launched in May 2000. We believe this is a result of investors and their advisors recognizing that iShares are not merely an investment choice, but an important investment tool. At BGI we consider the iShares family of funds "industrial strength" for four simple reasons. We think you should keep these reasons in mind when you and your advisor meet to discuss your investment objectives, and then evaluate, and perhaps rebalance your portfolio. First, iShares strive to obtain a fundamental goal of institutional investing: taking less of a bite out of a fund's returns. iShares seek to achieve this by minimizing capital gains distributions 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./4/ iShares, on the other hand, are managed in a way that keeps capital gains distributions to a minimum. For example, during the calendar year 2001 none of the domestic iShares funds distributed any capital gains./5/ Additionally, the fees charged by the iShares Funds are typically about half of other actively managed mutual funds./6/ Second, iShares embody a key tactic of institutional investors: uncomplicated diversification. The benefits of diversification, as compared to picking individual stocks, are well documented. Although it's possible to diversify a portfolio by hand-selecting a wide variety of securities, to do it effectively is complicated and time-consuming. This is a reason why $1.56 trillion in institutional assets/7/ are invested in index funds. ________________________ /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/Financial Research Corporation (FRC) database, BGI analysis. /4/Jonathan Clements, Fund Distributions are a Taxing Problem; How the Tax Man Dines on Your Funds, The Wall Street Journal, August 1999. /5/Past performance is no guarantee of future results. There can be no assurance that iShares will not generate capital gains distributions in the future. /6/Source: Morningstar Principia, BGI analysis 6/01. /7/Source: Pensions & Investments, 5/27/02. Shareholder Letter 1 Third, iShares embody a key strategy of institutional investors: Modular asset allocation. Each iShare fund focuses on a very specific slice of the equity and fixed income markets. With so many different iShares to choose from, investors have tremendous flexibility in structuring their portfolios to meet specific needs. The fourth reason iShares are "industrial strength" is that they are advised by Barclays Global Investors, one of the world's largest institutional asset managers./8/ BGI manages money for over two thousand institutional clients around the world. Also, BGI has a longer index-based investing track record than any other fund manager. In fact, over thirty years ago it was BGI that created the world's first index strategy. Throughout the coming year we will be working closely with the financial advisor community to introduce innovative strategies and structures that we have developed for their clients' portfolios. And we continue to enhance and improve the tools, data and resources on our Web site. If you haven't visited www.iShares.com in a while, we invite you to do so and learn more about iShares. In fact, Forbes Magazine named iShares.com "Best of the Web" among all ETF sites./9/ We think you'll agree everything about iShares really is industrial strength. On behalf of the iShares family of funds 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/ Garrettt F. Bouton /s/ Lee T. Kranefuss Garrett F. Bouton Lee T. Kranefuss President and Chairman of Vice President of iShares Trust the Board of Trustees of iShares Trust iShares are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors (BGFA) serves as an advisor to iShares. Barclays Global Investors Services (BGIS) assists in the marketing of iShares. BGFA and BGIS are subsidiaries of Barclays Global Investors, N.A., none of which is affiliated with SEI. For complete information, including charges and expenses, request a prospectus by calling 1-800-iSHARES (1-800-474-2737). Read it carefully before you invest. There are risks involved with investing, including possible loss of principal. Diversification may not protect against market risk. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Mutual funds and iShares are obliged to distribute portfolio gains to shareholders by year-end. These gains may be generated due to index rebalancing or to meet diversification requirements. Your own iShares trading, too, will generate tax consequences and transaction expenses. Certain traditional mutual funds can be tax efficient as well. Past performance does not guarantee future results. iShares are not sponsored or endorsed by Goldman, Sachs & Co. or Lehman Brothers, nor are they sponsored, endorsed, sold or promoted by Cohen & Steers Capital Management, Inc., Dow Jones & Company, Inc., Morgan Stanley Capital International, The Nasdaq Stock Market, Inc., Frank Russell Company, or Standard & Poor's. None of these companies make any representation regarding the advisability of investing in iShares. Neither SEI nor BGI, nor any of their affiliates, are affiliated with Goldman, Sachs & Co. or Lehman Brothers. "GS $ InvesTop(TM)" and "Goldman Sachs-Registered Trademark-" are trademarks of Goldman, Sachs & Co. __________________________ /8/Source: Pensions & Investments, 5/27/02. /9/Forbes Winter 2001. 2 2002 iShares Semi-Annual Report to Shareholders Market Overview U.S. Equity Markets U.S. equities fell heavily in the six months under review. Stocks rallied briefly in August, but this proved to be yet another false dawn. By the end of September, the broader market indices were back languishing at six-year lows. These latest falls mean that the S&P 500 Index has almost halved in value since its peak two years ago, and some sectors, notably telecommunications and technology, have lost considerably more than that. The current bear market is now on par with the 1970s bear market in terms of the scale of decline. However, in terms of duration, this is already the longest bear market in 60 years. With hindsight, many believe equities had become significantly overvalued during the technology bubble. Therefore, some correction was inevitable, but a number of factors have added to the gloom this year. Chief among these were the corporate accounting scandals. Sadly, these were not confined to one errant corporation but spread among many. As a result, investors have not only had to contend with a severe profits recession, but learn how to differentiate real from virtual profits. It is little wonder, given such profound uncertainties, that investors have been applying larger risk premiums to their equity valuations. This year's further collapse in share prices, in turn, has taken a toll on investor confidence and the wider economy. The Federal Reserve Board (the "Fed") has done a remarkable job in keeping the economy moving both before and after the events of September 11. Manufacturing has been in a deep recession, but the broader economy has held up reasonably well so far. This has been due largely to continued resilient consumer spending fueled by low interest rates and a buoyant housing market. However, even with interest rates at 40-year lows, industrial production has fallen since the summer and business investment has been cut. The danger has been that, after showing some improvement earlier this year, the manufacturing sector may relapse, causing the economy to suffer a so-called "double-dip" recession. If these factors were not enough, investors also have had to contend with the prospect of a second Gulf War. Such geopolitical risk adds greatly to market uncertainties, while the higher oil price sparked by war fears could further slow economic recovery. Against this background, forecasts for economic growth have been cut back. With profits statements remaining uniformly downbeat, investors have had little incentive to raise their risk appetite, preferring instead to seek the relative safety of bonds and cash. U.S. Fixed Income Markets For all the reasons equity prices have dropped this year, bond prices have risen. Due to the inverse relationship between bond prices and bond yields, yields have fallen during the period. By the end of the six-month period, yields on the 30-year bond were at the lowest levels recorded since they were first introduced in the 1970s. Yields on 5- and 10-year Treasuries had fallen to their lowest levels since 1958. The threat of war, the diminishing prospect of sustained economic recovery and the sheer distrust of equities in the corporate climate have all added to the relative attractiveness of bonds. The spike in oil prices to 19-month highs may in the past have raised the unwelcome specter of inflation and thus have been harmful to bonds. But in the low inflation environment of the reporting period, producers have had much greater difficulty passing on price increases. Therefore, rising oil prices have been much more likely to bear down on demand as consumers have absorbed higher oil prices by cutting expenditure on other discretionary purchases. There were no changes to the targeted federal funds rate over the period, but the Fed's policy bias seemed to shift toward one of greater ease over the summer as equity prices tumbled and doubts about the strength of the economic recovery accumulated. This perceived shift helped to drag bond yields lower, particularly at the short end of the curve. So far, the prospect of increased bond supply on the back of an escalating federal budget deficit has had only limited impact on investor enthusiasm for U.S. Treasuries. International Equity Markets The decline in U.S. equities over the period was echoed to a greater or lesser extent in markets around the world. Though the accounting scandals were confined largely to the U.S., the negative effect on investor confidence was global. The hesitant nature of the U.S. economic Market Overview 3 recovery also has had ramifications around the globe, while geopolitical risk in the Middle East and rising oil prices have affected all markets. In Europe, economic growth has been particularly sluggish, with the German economy most seriously affected by the downturn in international trade. However, it is not just a squeeze on exports that has dampened growth. Domestic demand has fallen due to lower business investment. Consumers, too, have been reluctant to spend. High unemployment has affected large parts of the eurozone and there have been growing doubts that the operation of a single monetary policy offers sufficient flexibility to tackle the problem. Room for policy maneuver has been further constrained by the Stability and Growth Pact, which was adopted in 1997 when the monetary union was being established and limits the size of budget deficits across the zone. While UK equities have also fallen heavily with concerns over the pensions industry and the solvency of the insurance sector, the economy has fared somewhat more favorably, helped by a more expansive fiscal policy and a strong housing market which, like the U.S., has supported consumer confidence and spending. Japanese equities plumbed new depths over the period with the Nikkei Dow Index recording a 19-year low. Concern has again focused on the stability of the banking system and the mountain of bad debts that continued to undermine the efficient functioning of the economy. Japanese consumer prices have now fallen for three years in a row. Such deflation has raised the real value of debt and reduced the effectiveness of monetary policy. Meanwhile the government has continued to balk at the large-scale injection of public funds deemed necessary to put the banking system back on a sounder footing. /s/ Francis Enderle Francis Enderle Chief Investment Officer, Global Indexing 4 2002 iShares Semi-Annual Report to Shareholders THIS PAGE INTENTIONALLY LEFT BLANK. 5 Managers' Discussion & Analysis iSHARES S&P 500 INDEX FUNDS Performance as of 9/30/02
Average Annual Total Returns Cumulative Total Returns ---------------------------------------------------------- ---------------------------- Year Ended 9/30/02 Inception to 9/30/02 Inception to 9/30/02 ---------------------------- ---------------------------- ---------------------------- iSHARES INDEX FUND NAV MARKET INDEX NAV MARKET INDEX NAV MARKET INDEX S&P 500 (20.53)% (20.85)% (20.31)% (20.52)% (20.63)% (20.49)% (42.13)% (42.31)% (42.05)% S&P 500/BARRA Growth (19.47)% (19.68)% (19.19)% (24.13)% (24.24)% (24.03)% (47.91)% (48.09)% (47.72)% S&P 500/BARRA Value (22.35)% (22.51)% (22.05)% (15.23)% (15.36)% (15.12)% (32.30)% (32.55)% (32.09)%
"Total returns for the period since inception" are calculated from the inception date of each Fund (05/15/00, 05/22/00 and 05/22/00, respectively). "Average annual total return" represents the average annual change in value of an investment over the periods indicated. "Cumulative total return" represents the total 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 determined by using the midpoint between the highest bid and the lowest offer on the Exchange on which the iShares of the Fund are listed for trading, as of the time that the Fund's NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (05/19/00, 05/26/00 and 05/26/00, respectively), the net asset value of the Fund is used as a proxy for secondary market trading price to calculate market returns. 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 13.85% Consumer Staples 10.27% Energy 6.10% Financials 20.68% Health Care 15.32% Industrials 11.90% Information Technology 12.64% Materials 2.72% Telecommunication Services 3.61% Utilities 2.91% S&P 500/BARRA GROWTH INDEX [GRAPHIC] Consumer Discretionary 14.78% Consumer Staples 17.86% Energy 0.10% Financials 6.92% Health Care 27.16% Industrials 12.95% Information Technology 19.52% Materials 0.49% Telecommunication Services 0.22% S&P 500/BARRA VALUE INDEX [GRAPHIC] Consumer Discretionary 12.84% Consumer Staples 1.97% Energy 12.66% Financials 35.74% Health Care 2.35% Industrials 10.75% Information Technology 5.11% Materials 5.17% Telecommunication Services 7.32% Utilities 6.09% The iShares S&P 500 Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, to the performance of the S&P 500 Index. During the six months ended September 30, 2002 (the "reporting period"), the Index declined 28.36%. The iShares S&P 500/BARRA Growth Index Fund and iShares S&P 500/BARRA Value Index Fund seek investment 6 2002 iShares Semi-Annual Report to Shareholders 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 declined 28.08%, while the S&P 500/BARRA Value Index declined 28.92%. For the same period, the iShares S&P 500 Index Fund declined 28.36%; the iShares S&P 500/BARRA Growth Index Fund was down 28.12% and the iShares S&P 500/BARRA Value Index Fund declined 28.94%. Equity prices fell during the reporting period, driven down by a string of weak economic data. Following robust first quarter growth reports, GDP growth was lower than expected for the second quarter, and past economic growth was revised downward. Manufacturing activity slowed and fewer jobs than expected were created in the U.S. economy. Consumer confidence fell during the end of the period after having risen following the September 11, 2001 attacks. Consumer confidence is important as it provides indications of consumer spending, which generally accounts for two thirds of GDP. Ongoing geopolitical tension fueled negative investor sentiment. As the possibility of an invasion in Iraq raised concerns about supply of oil from the area, the price of oil surged to more than $30 per barrel. In response to economic conditions, the Federal Reserve Board left rates unchanged during the period. The widespread decline in equities left no major industry group untouched. Within the S&P 500 Index, every sector posted double digit declines over the reporting period. Technology stocks continued to experience the largest declines: information technology (12.64% of the Index as of September 30, 2002) and telecommunications services (3.61% of the Index as of September 30, 2002) fell 44.73% and 43.49%, respectively. Utilities (2.91% of the Index as of September 30, 2002) lost 35.43%, and industrials (11.90% of the Index as of September 30, 2002) fell 29.22%. Reflecting the downturn in consumer confidence, consumer discretionary (13.85% of the Index as of September 30, 2002) declined 27.04%. In terms of individual holdings, most of the ten largest holdings in the Index also posted losses over the reporting period. Citigroup (2.00% of the Index as of September 30, 2002) declined 35.44%. General Electric, the largest weighting at 3.26% of the Index as of September 30, declined 33.34%. Technology bellwether Microsoft (3.15% of the Index as of September 30, 2002) fell 27.47%. Pfizer (2.39% of the Index as of September 30) declined 26.43%, while Exxon Mobil (2.87% of the Index as of September 30) lost 26.33%. The only positive performance came from Procter & Gamble (1.54% of the Index), which gained 0.91%. Managers' Discussion & Analysis 7 Managers' Discussion & Analysis iSHARES S&P MIDCAP 400 INDEX FUNDS Performance as of 9/30/02
Average Annual Total Returns Cumulative Total Returns ---------------------------------------------------- ------------------------- Year Ended 9/30/02 Inception to 9/30/02 Inception to 9/30/02 ------------------------- ------------------------- ------------------------- iSHARES INDEX FUND NAV MARKET INDEX NAV MARKET INDEX NAV MARKET INDEX S&P MidCap 400 (4.85)% (5.09)% (4.65)% (4.44)% (4.51)% (4.29)% (10.16)% (10.33)% (9.82)% S&P MidCap 400/BARRA Growth (6.55)% (6.40)% (6.23)% (18.15)% (18.16)% (17.87)% (35.49)% (35.51)% (35.02)% S&P MidCap 400/BARRA Value (3.58)% (3.72)% (3.36)% 3.19% 3.17% 3.40% 7.12% 7.07% 7.59%
"Total returns for the period since inception" are calculated from the inception date of each Fund (05/22/00, 07/24/00 and 07/24/00, respectively). "Average annual total return" represents the average annual change in value of an investment over the periods indicated. "Cumulative total return" represents the total 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 determined by using the midpoint between the highest bid and the lowest offer on the Exchange on which the iShares of the Fund are listed for trading, as of the time that the Fund's NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (05/26/00, 07/28/00 and 07/28/00, respectively), the net asset value of the Fund is used as a proxy for secondary market trading price to calculate market returns. 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 [PIE CHART] Consumer Discretionary 16.74% Consumer Staples 5.90% Energy 7.22% Financials 19.51% Health Care 14.06% Industrials 12.84% Information Technology 10.79% Materials 4.96% Telecommunication Services 0.60% Utilities 7.38% S&P MIDCAP 400/BARRA GROWTH INDEX [PIE CHART] Consumer Discretionary 19.33% Consumer Staples 5.26% Energy 7.77% Financials 10.73% Health Care 24.03% Industrials 16.13% Information Technology 13.01% Materials 2.95% Telecommunication Services 0.18% Utilities 0.61% S&P MIDCAP 400/BARRA VALUE INDEX [PIE CHART] Consumer Discretionary 14.09% Consumer Staples 6.55% Energy 6.66% Financials 28.50% Health Care 3.89% Industrials 9.48% Information Technology 8.52% Materials 7.00% Telecommunication Services 1.02% Utilities 14.29% 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 six months ended September 30, 2002 (the "reporting period"), the Index 8 2002 iShares Semi-Annual Report to Shareholders declined 24.31%. 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 declined 25.68%, while the S&P MidCap 400/BARRA Value Index declined 23.26%. For the same period, the iShares S&P MidCap 400 Index Fund declined 24.38%; the iShares S&P MidCap 400/BARRA Growth Index Fund was down 25.80% and the iShares S&P MidCap 400/BARRA Value Index Fund declined 23.33%. Equity markets continued to face downward pressure during the reporting period. Weak economic figures contributed to the decline: despite a strong first quarter GDP growth figure of 6.1%, a tepid 1.3% figure for the second quarter raised concerns about the strength of recovery. Manufacturing activity slowed, the economy created fewer jobs than had been anticipated, and the dollar continued to slide against major foreign currencies. Notably, consumer confidence, which had risen following the September 11, 2001 attacks, appeared to have peaked during the reporting period. Corporate earnings warnings also contributed to the decline. Continued geopolitical tension and the threat of war in the Middle East heightened, also contributing to stock market worries. As the possibility of an invasion in Iraq raised concerns about the supply of oil from the area, the price of oil surged to more than $30 per barrel. In response to economic conditions, the Federal Reserve Board left rates unchanged during the period. Within the S&P MidCap 400 Index, no industry sector was immune to the equity declines. As investors seemed to favor value stocks over growth, technology sectors suffered the steepest declines over the reporting period. Information technology (10.79% of the Index as of September 30, 2002) fell 50.19%, while telecommunications services (0.60% of the Index as of September 30, 2002) lost 47.53%. Materials (4.96% of the Index as of September 30, 2002) declined 24.92%, industrials (12.84% of the Index as of September 30) fell 24.54%, and utilities (7.38% of the Index) lost 20.09%. All of the Index's ten largest holdings posted double digit declines during the reporting period. Hardest hit was IDEC Pharmaceuticals (0.95% as of September 30, 2002), which fell 68.77%. Quest Diagnostics (0.90% of the Index as of September 30, 2002) fell 59.07%, and Affiliated Computer Services (0.84% of the Index as of September 30, 2002) declined 57.53%. Among the ten largest holdings, the best performer was Washington Post- Cl B (0.93% of the Index), which declined 25.93%. Managers' Discussion & Analysis 9 Managers' Discussion & Analysis iSHARES S&P SMALLCAP 600 INDEX FUNDS Performance as of 9/30/02
Average Annual Total Returns Cumulative Total Returns ------------------------------------------------- ------------------------- Year Ended 9/30/02 Inception to 9/30/02 Inception to 9/30/02 ---------------------- ------------------------- ------------------------- iSHARES INDEX FUND NAV MARKET INDEX NAV MARKET INDEX NAV MARKET INDEX S&P SmallCap 600 (1.93)% (2.12)% (1.77)% (1.16)% (1.28)% (1.02)% (2.72)% (2.99)% (2.39)% S&P SmallCap 600/BARRA Growth (3.31)% (3.62)% (3.20)% (12.31)% (12.43)% (12.08)% (25.00)% (25.22)% (24.56)% S&P SmallCap 600/BARRA Value (1.41)% (1.87)% (1.04)% 1.82% 1.54% 2.08% 4.04% 3.41% 4.60%
"Total returns for the period since inception" are calculated from the inception date of each Fund (05/22/00, 07/24/00 and 07/24/00, respectively). "Average annual total return" represents the average annual change in value of an investment over the periods indicated. "Cumulative total return" represents the total 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 determined by using the midpoint between the highest bid and the lowest offer on the Exchange on which the iShares of the Fund are listed for trading, as of the time that the Fund's NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (05/26/00, 07/28/00 and 07/28/00, respectively), the net asset value of the Fund is used as a proxy for secondary market trading price to calculate market returns. 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 [PIE CHART] Consumer Discretionary 21.07% Consumer Staples 3.51% Energy 5.74% Financials 14.04% Health Care 12.59% Industrials 20.59% Information Technology 12.92% Materials 4.96% Telecommunication Services 0.19% Utilities 4.39% S&P SMALLCAP 600/BARRA GROWTH INDEX [PIE CHART] Consumer Discretionary 23.13% Consumer Staples 3.69% Energy 3.44% Financials 10.38% Health Care 20.25% Industrials 18.49% Information Technology 15.73% Materials 3.11% Telecommunication Services 0.26% Utilities 1.52% S&P SMALLCAP 600/BARRA VALUE INDEX [PIE CHART] Consumer Discretionary 18.90% Consumer Staples 3.31% Energy 8.16% Financials 17.88% Health Care 4.52% Industrials 22.80% Information Technology 9.97% Materials 6.92% Telecommunication Services 0.12% Utilities 7.42% 10 2002 iShares Semi-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. During the six months ended September 30, 2002 (the "reporting period"), the Index declined 23.93%. 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 declined 22.28%, while the S&P SmallCap 600/BARRA Value Index declined 25.88%. For the reporting period, the iShares S&P SmallCap 600 Index Fund declined 23.96%; the iShares S&P SmallCap 600/BARRA Growth Index Fund was down 22.36% and the iShares S&P SmallCap 600/BARRA Value Index Fund declined 25.95%. Market-weary investors found no relief during the reporting period. Weak economic indicators continued to cloud the outlook for recovery: despite a robust first quarter GDP growth rate of 6.1%, second quarter growth was reported at a sluggish 1.3%. The labor market remained soft, housing starts declined, and the U.S. dollar continued weakening. Growing investor skepticism about corporate leadership continued as earlier investigations broadened to include additional companies. Earnings warnings also grew during the reporting period. As Americans marked the one-year anniversary of the tragic events of September 11, 2001, geopolitical tensions continued to weigh heavily on the markets. The possibility of war with Iraq drove the price of oil above $30 per barrel, its highest level in more than a year. Although equities declined across the board, smaller company shares were the hardest hit. Within the S&P SmallCap 600 Index, technology stocks endured the steepest declines over the reporting period. Telecommunications services (0.19% of the Index as of September 30, 2002) fell 52.53%, while information technology (12.92% of the Index as of September 30, 2002) dropped 46.85%. Materials (4.96% of the Index as of September 30, 2002) declined 25.90%, industrials (20.59% of the Index as of September 30, 2002) declined 24.18%, and consumer staples (3.51% of the Index as of September 30) fell 23.40%. In terms of individual holdings, performance over the reporting period was mixed. The best performing stock among the Index's ten largest holdings was Mid Atlantic Medical Services (0.55% of the Index as of September 30, 2002), which gained 27.02%. Coventry Health Care (0.63% of the Index as of September 30) climbed 25.00%. Pogo Producing (0.67% of the Index as of September 30, 2002) and Harman International (0.55% of the Index as of September 30, 2002) rose 7.64% and 4.97%, respectively. On the negative side, Cephalon (0.73% of the Index as of September 30, 2002), declined 35.21%, and Fair Issac & Co. (0.54% of the Index as of September 30) fell 22.54%. Managers' Discussion & Analysis 11 Schedule of Investments (Unaudited) iSHARES S&P 500 INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------------- COMMON STOCKS - 99.83% - --------------------------------------------------------------------- General Electric Co. 4,269,440 $ 105,241,696 Microsoft Corp./1/ 2,323,896 101,647,211 Wal-Mart Stores Inc. 1,908,726 93,985,668 Exxon Mobil Corp. 2,901,054 92,543,623 Pfizer Inc. 2,657,750 77,127,905 Johnson & Johnson 1,277,685 69,097,205 Citigroup Inc. 2,173,673 64,449,404 American International Group Inc. 1,120,233 61,276,745 Coca-Cola Co. (The) 1,065,167 51,085,409 Procter & Gamble Co. 557,679 49,845,349 Merck & Co. Inc. 966,215 44,165,688 International Business Machines Corp. 727,682 42,489,352 Bank of America Corp. 645,617 41,190,365 Intel Corp. 2,862,566 39,761,042 Philip Morris Companies Inc. 908,054 35,232,495 Wells Fargo & Company 729,785 35,146,446 Cisco Systems Inc./1/ 3,139,221 32,899,036 Verizon Communications Inc. 1,170,598 32,121,209 ChevronTexaco Corp. 458,196 31,730,073 Viacom Inc. "B"/1/ 757,236 30,705,920 United Parcel Service Inc. 479,005 29,952,183 SBC Communications Inc. 1,428,373 28,710,297 PepsiCo Inc. 760,331 28,094,230 Abbott Laboratories 670,233 27,077,413 Lilly (Eli) and Co. 481,987 26,673,161 Home Depot Inc. 1,010,823 26,382,480 Dell Computer Corp./1/ 1,113,063 26,168,111 Fannie Mae 427,160 25,433,106 Amgen Inc./1/ 549,210 22,902,057 AOL Time Warner Inc./1/ 1,914,635 22,401,229 Medtronic Inc. 520,544 21,925,313 Pharmacia Corp. 553,937 21,537,071 AT&T Corp. 1,649,118 19,805,907 Bristol-Myers Squibb Co. 830,897 19,775,349 Wachovia Corp. 588,217 19,228,814 Anheuser-Busch Companies Inc. 373,454 18,896,772 Bank One Corp. 503,401 18,827,197 3M Co. 167,336 18,401,940 Oracle Corp./1/ 2,336,103 18,361,770 Wyeth 568,477 18,077,569 American Express Co. 570,092 17,775,469 Freddie Mac 298,411 16,681,175 JP Morgan Chase & Co. 855,155 16,239,393 Morgan Stanley 471,308 15,967,915 Du Pont (E.I.) de Nemours & Co. 426,050 15,367,623 Fifth Third Bancorp 249,670 15,287,294 Hewlett-Packard Co. 1,308,606 15,271,432 U.S. Bancorp 821,120 15,256,410 BellSouth Corp. 803,007 14,743,209 Lowe's Companies Inc. 333,787 13,818,782 Goldman Sachs Group Inc. (The) 206,527 13,636,978 Walgreen Co. 439,396 13,515,821 Gillette Co. (The) 453,657 13,428,247 ConocoPhillips 290,231 13,420,281 Schering-Plough Corp. 628,973 13,409,704 Walt Disney Co. (The) 875,316 13,252,284 Washington Mutual Inc. 416,178 13,097,122 Lockheed Martin Corp. 195,098 12,616,988 Colgate-Palmolive Co. 233,491 12,596,839 Kimberly-Clark Corp. 222,318 12,592,092 Boeing Co. (The) 359,929 12,284,377 Merrill Lynch & Co. Inc. 371,068 12,226,691 Tyco International Ltd. 855,726 12,065,737 Cardinal Health Inc. 193,699 12,048,078 Target Corp. 389,090 11,485,937 United Technologies Corp. 202,602 11,444,987 UnitedHealth Group Inc. 130,560 11,387,443 Texas Instruments Inc. 743,521 10,981,805 Allstate Corp. (The) 303,724 10,797,388 Dow Chemical Co. (The) 390,549 10,665,893 HCA Inc. 222,231 10,580,418 Tenet Healthcare Corp./1/ 209,641 10,377,230 MBNA Corp. 547,868 10,069,814 Motorola Inc. 985,588 10,033,286 McDonald's Corp. 546,817 9,656,788 Marsh & McLennan Companies Inc. 230,686 9,605,765 Schlumberger Ltd. 247,609 9,523,042 General Motors Corp. "A" 240,272 9,346,581 12 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES S&P 500 INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------------- Automatic Data Processing Inc. 265,934 $ 9,246,525 QUALCOMM Inc./1/ 333,123 9,200,857 FleetBoston Financial Corp. 449,235 9,132,948 Clear Channel Communications Inc./1/ 262,623 9,126,149 First Data Corp. 325,976 9,111,029 Bank of New York Co. Inc. (The) 311,856 8,962,741 Kohls Corp./1/ 144,396 8,780,721 Southern Co. 303,802 8,743,422 Comcast Corp. "A"/1/ 405,912 8,467,324 Gannett Co. Inc. 114,449 8,260,929 Applied Materials Inc./1/ 705,275 8,145,926 Sysco Corp. 284,360 8,072,980 Emerson Electric Co. 180,497 7,931,038 Baxter International Inc. 258,586 7,899,802 Illinois Tool Works Inc. 131,380 7,663,395 Ford Motor Company 781,330 7,657,034 Honeywell International Inc. 351,248 7,608,032 SunTrust Banks Inc. 122,602 7,537,571 National City Corp. 261,956 7,473,605 Duke Energy Corp. 380,991 7,448,374 BB&T Corp. 207,241 7,261,725 Prudential Financial Inc./1/ 250,213 7,146,083 General Dynamics Corp. 86,539 7,038,217 Alcoa Inc. 362,743 7,000,940 General Mills Inc. 157,607 7,000,903 International Paper Co. 206,903 6,908,491 MetLife Inc. 302,210 6,878,300 AFLAC Inc. 221,996 6,813,057 Exelon Corp. 137,956 6,552,910 FedEx Corp. 127,861 6,402,000 eBay Inc./1/ 120,780 6,378,392 Forest Laboratories Inc. "A"/1/ 77,080 6,321,331 Carnival Corp. "A" 251,408 6,310,341 Costco Wholesale Corp./1/ 194,908 6,309,172 Union Pacific Corp. 108,354 6,270,446 SLM Corp. 66,579 6,201,168 Waste Management Inc. 263,841 6,152,772 Sara Lee Corp. 336,204 6,149,171 Dominion Resources Inc. 119,165 6,045,240 Harley-Davidson Inc. 129,685 6,023,868 Northrop Grumman Corp. 48,417 6,005,645 Kellogg Co. 175,698 5,841,959 Travelers Property Casualty Corp. "B"/1/ 428,446 5,796,874 ConAgra Foods Inc. 230,184 5,720,072 Household International Inc. 195,609 5,537,691 Boston Scientific Corp./1/ 174,373 5,503,212 Caterpillar Inc. 147,461 5,488,498 Tribune Co. 129,396 5,410,047 State Street Corp. 139,362 5,384,948 Alltel Corp. 133,239 5,346,881 Sears, Roebuck and Co. 135,443 5,282,277 PNC Financial Services Group 121,698 5,132,005 Lehman Brothers Holdings Inc. 104,555 5,128,423 Schwab (Charles) Corp. (The) 587,535 5,111,555 McGraw-Hill Companies Inc. (The) 83,138 5,089,708 Raytheon Co. 172,640 5,058,352 Heinz (H.J.) Co. 150,361 5,017,547 TXU Corp. 119,163 4,970,289 Nike Inc. "B" 115,025 4,966,780 Stryker Corp. 84,732 4,880,563 Mellon Financial Corp. 188,059 4,876,370 Cendant Corp./1/ 446,869 4,808,310 Kroger Co./1/ 340,176 4,796,482 AT&T Wireless Services Inc./1/ 1,160,084 4,779,546 Wrigley (William Jr.) Co. 96,572 4,779,348 Progressive Corp. (The) 94,041 4,761,296 Anadarko Petroleum Corp. 106,446 4,741,105 Newmont Mining Corp. 171,933 4,729,877 Avon Products Inc. 101,313 4,670,529 Deere & Co. 102,177 4,643,945 Equity Office Properties Trust 179,416 4,632,521 WellPoint Health Networks Inc./1/ 62,409 4,574,580 Occidental Petroleum Corp. 161,173 4,574,090 KeyCorp 182,659 4,560,995 Safeway Inc./1/ 201,703 4,497,977 Omnicom Group Inc. 80,557 4,485,414 EMC Corp./1/ 951,879 4,350,087 Hartford Financial Services Group Inc. 106,065 4,348,665 Schedules of Investments 13 Schedule of Investments (Unaudited) (Continued) iSHARES S&P 500 INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------------- Southwest Airlines Co. 331,085 $ 4,323,970 XL Capital Ltd. "A" 58,207 4,278,215 CIGNA Corp. 60,368 4,271,036 CVS Corp. 168,219 4,264,352 Guidant Corp./1/ 131,105 4,236,003 Albertson's Inc. 174,320 4,211,571 Baker Hughes Inc. 144,544 4,196,112 FPL Group Inc. 77,955 4,193,979 Masco Corp. 212,429 4,152,987 American Electric Power Co. Inc. 145,216 4,140,108 Intuit Inc./1/ 90,700 4,129,571 Golden West Financial Corp. 66,349 4,125,581 Weyerhaeuser Co. 93,792 4,105,276 Air Products & Chemicals Inc. 97,285 4,086,943 Coca-Cola Enterprises Inc. 191,966 4,077,358 Bed Bath & Beyond Inc./1/ 125,079 4,073,823 Gap Inc. (The) 372,529 4,041,940 Chubb Corp. 73,564 4,033,514 Entergy Corp. 96,042 3,995,347 Clorox Co. 98,699 3,965,726 Anthem Inc./1/ 60,652 3,942,380 Principal Financial Group Inc./1/ 150,153 3,931,006 TJX Companies Inc. 231,208 3,930,536 Electronic Arts Inc./1/ 59,575 3,929,567 Burlington Northern Santa Fe Corp. 164,033 3,923,669 Paychex Inc. 160,960 3,914,547 Campbell Soup Co. 175,760 3,880,781 Progress Energy Inc. 94,801 3,874,517 FirstEnergy Corp. 127,486 3,810,557 Danaher Corp. 64,746 3,680,810 Consolidated Edison Inc. 91,226 3,669,110 Apache Corp. 61,528 3,657,840 Comerica Inc. 75,519 3,641,526 Hershey Foods Corp. 58,512 3,630,670 Sun Microsystems Inc./1/ 1,390,727 3,601,983 SouthTrust Corp. 148,489 3,600,858 Northern Trust Corp. 94,987 3,582,910 Praxair Inc. 69,874 3,571,260 AutoZone Inc./1/ 45,204 3,564,787 Newell Rubbermaid Inc. 114,397 3,531,435 Yum! Brands Inc./1/ 127,148 3,523,271 McKesson Corp. 124,164 3,517,566 Hancock (John) Financial Services Inc. 125,793 3,497,045 Archer-Daniels-Midland Co. 279,103 3,491,579 Franklin Resources Inc. 112,218 3,489,980 Concord EFS Inc./1/ 219,588 3,487,057 Sprint Corp. (FON Group) 382,153 3,485,235 Loews Corp. 80,508 3,452,988 Starbucks Corp./1/ 166,231 3,429,346 Maxim Integrated Products Inc./1/ 138,390 3,426,536 Eastman Kodak Co. 124,861 3,401,214 Mattel Inc. 187,026 3,368,338 Norfolk Southern Corp. 166,350 3,358,607 ACE Ltd. 112,326 3,325,973 Capital One Financial Corp. 94,835 3,311,638 Burlington Resources Inc. 86,211 3,307,054 Unocal Corp. 104,752 3,288,165 Block (H & R) Inc. 78,208 3,285,518 PPG Industries Inc. 72,506 3,241,018 AmerisourceBergen Corp. 45,337 3,237,969 Devon Energy Corp. 66,954 3,230,530 Moody's Corp. 66,540 3,227,190 Apollo Group Inc. "A"/1/ 74,303 3,226,979 TRW Inc. 55,026 3,221,772 AmSouth Bancorp 154,930 3,213,248 Limited Brands Inc. 223,117 3,199,498 Micron Technology Inc./1/ 258,476 3,197,348 Zimmer Holdings Inc./1/ 83,376 3,196,636 Pitney Bowes Inc. 103,127 3,144,342 Becton, Dickinson & Co. 110,626 3,141,778 Regions Financial Corp. 95,993 3,136,091 Analog Devices Inc./1/ 156,542 3,083,877 Best Buy Co. Inc./1/ 137,611 3,070,101 Cintas Corp. 72,784 3,051,105 Biomet Inc. 114,219 3,041,652 Fortune Brands Inc. 64,282 3,039,896 Marriott International Inc. "A" 104,069 3,016,960 Allergan Inc. 55,408 3,014,195 Marathon Oil Corp. 132,717 3,010,022 Charter One Financial Inc. 99,640 2,961,305 14 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES S&P 500 INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------------- New York Times Co. "A" 64,956 $ 2,952,250 Nextel Communications Inc. "A"/1/ 390,192 2,945,950 Rohm & Haas Co. "A" 94,690 2,935,390 Johnson Controls Inc. 38,018 2,920,543 DTE Energy Co. 71,642 2,915,829 Electronic Data Systems Corp. 205,588 2,874,120 Pepsi Bottling Group Inc. 122,018 2,855,221 Transocean Inc. 136,703 2,843,422 Chiron Corp./1/ 81,362 2,842,788 Simon Property Group Inc. 79,333 2,834,568 Equity Residential 117,863 2,821,640 Linear Technology Corp. 135,974 2,817,381 May Department Stores Co.(The) 123,332 2,808,270 St. Paul Companies Inc. 96,790 2,779,809 St. Jude Medical Inc./1/ 75,682 2,701,847 Public Service Enterprise Group Inc. 88,416 2,696,688 Avery Dennison Corp. 47,107 2,684,157 North Fork Bancorp Inc. 70,185 2,655,800 Synovus Financial Corp. 126,828 2,615,193 International Game Technology Inc./1/ 37,713 2,607,477 Interpublic Group of Companies Inc. 164,097 2,600,937 Agilent Technologies Inc./1/ 198,876 2,597,321 Amerada Hess Corp. 38,166 2,590,708 Veritas Software Corp./1/ 175,573 2,582,679 Ameren Corp. 61,980 2,581,467 Lexmark International Group Inc. "A"/1/ 54,867 2,578,749 Jefferson-Pilot Corp. 64,193 2,574,139 Staples Inc./1/ 200,267 2,561,415 Federated Department Stores Inc./1/ 86,209 2,537,993 Marshall & Ilsley Corp. 90,924 2,535,870 Countrywide Credit Industries Inc. 53,750 2,534,312 MBIA Inc. 63,265 2,527,437 Ingersoll-Rand Co. "A" 72,362 2,492,147 Cincinnati Financial Corp. 69,494 2,472,597 Yahoo! Inc./1/ 256,793 2,457,509 Ambac Financial Group Inc. 45,416 2,447,468 Lincoln National Corp. 80,056 2,445,711 ITT Industries Inc. 39,237 2,445,642 Halliburton Co. 186,615 2,409,200 Bear Stearns Companies Inc. The 42,681 2,407,208 CSX Corp. 91,024 2,401,213 AON Corp. 116,624 2,389,626 Union Planters Corp. 86,852 2,384,956 Computer Associates International Inc. 247,816 2,379,034 SunGard Data Systems Inc./1/ 120,839 2,350,319 Harrah's Entertainment Inc./1/ 48,610 2,343,488 Fiserv Inc./1/ 82,216 2,308,625 Ecolab Inc. 55,261 2,306,042 Aetna Inc. 64,242 2,300,506 Genuine Parts Co. 74,670 2,287,889 Xilinx Inc./1/ 144,294 2,285,328 KLA-Tencor Corp./1/ 80,983 2,262,665 Cinergy Corp. 71,714 2,253,971 PPL Corp. 69,172 2,250,857 MedImmune Inc./1/ 107,196 2,242,540 Univision Communications Inc. "A"/1/ 98,106 2,236,817 Apple Computer Inc./1/ 153,393 2,224,198 Dover Corp. 86,885 2,205,141 UNUMProvident Corp. 104,035 2,117,112 Health Management Associates Inc. "A"/1/ 103,334 2,089,413 El Paso Corp. 250,306 2,070,031 Delphi Corp. 240,341 2,054,915 Textron Inc. 59,978 2,045,250 UST Inc. 72,306 2,039,752 Computer Sciences Corp./1/ 73,328 2,037,785 KeySpan Corp. 60,423 2,024,171 Nabors Industries Ltd./1/ 61,773 2,023,066 Knight Ridder Inc. 35,718 2,014,852 Family Dollar Stores Inc. 74,186 1,994,120 American Standard Companies Inc./1/ 31,086 1,977,691 Schedules of Investments 15 Schedule of Investments (Unaudited) (Continued) iSHARES S&P 500 INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------------- Adobe Systems Inc. 102,775 $ 1,963,002 Brown-Forman Corp. "B" 29,262 1,959,091 Molex Inc. 82,863 1,948,938 King Pharmaceuticals Inc./1/ 106,256 1,930,672 Parker Hannifin Corp. 50,449 1,927,656 Eaton Corp. 30,102 1,918,701 Dollar General Corp. 142,567 1,913,249 Huntington Bancshares Inc. 105,062 1,911,078 Starwood Hotels & Resorts Worldwide Inc. 85,446 1,905,446 PG&E Corp./1/ 168,053 1,892,277 Genzyme Corp. - General Division/1/ 91,653 1,888,968 First Tennessee National Corp. 54,332 1,883,690 Kerr-McGee Corp. 42,984 1,867,225 Biogen Inc./1/ 63,593 1,861,367 Kinder Morgan Inc. 52,366 1,856,375 IMS Health Inc. 123,738 1,852,358 MGIC Investment Corp. 44,871 1,832,083 Hilton Hotels Corp. 160,559 1,827,161 Penney (J.C. Co. Inc. (Holding Co.) 114,548 1,823,604 Darden Restaurants Inc. 74,207 1,798,766 Plum Creek Timber Co. Inc. 79,098 1,788,406 EOG Resources Inc. 49,725 1,788,111 Noble Corp./1/ 57,585 1,785,135 Torchmark Corp. 52,019 1,782,171 BJ Services Co./1/ 67,110 1,744,860 Constellation Energy Group Inc. 70,237 1,741,175 SAFECO Corp. 54,775 1,740,750 Sempra Energy 87,911 1,727,451 Rockwell Collins 78,308 1,718,078 Zions Bancorp 39,283 1,709,989 Monsanto Co. 111,780 1,709,116 Grainger (W.W.) Inc. 40,166 1,709,063 VF Corp. 47,212 1,698,688 Jones Apparel Group Inc./1/ 55,219 1,695,223 PACCAR Inc. 49,664 1,678,130 Applera Corp. - Applied Biosystems Group 90,942 1,664,239 Leggett & Platt Inc. 83,958 1,661,529 PeopleSoft Inc./1/ 133,336 1,649,366 MeadWestvaco Corp. 85,570 1,643,800 Qwest Communications International Inc./1/ 718,428 1,638,016 Wendy's International Inc. 49,386 1,635,170 Office Depot Inc./1/ 132,117 1,630,324 Xcel Energy Inc. 169,910 1,581,862 R.J. Reynolds Tobacco Holdings Inc. 39,100 1,576,512 Vulcan Materials Co. 43,407 1,569,597 Sherwin-Williams Co. 65,367 1,547,891 Sigma-Aldrich Corp. 31,354 1,544,812 Xerox Corp./1/ 311,986 1,544,331 NiSource Inc. 88,912 1,531,954 RadioShack Corp./1/ 74,438 1,493,226 Black & Decker Corp. 34,461 1,444,950 Altera Corp./1/ 164,602 1,427,099 Edison International/1/ 139,589 1,395,890 Dow Jones & Co. Inc. 36,105 1,386,793 Waters Corp./1/ 56,238 1,363,772 Circuit City Stores Inc. 89,956 1,362,833 BMC Software Inc./1/ 104,049 1,359,920 CenturyTel Inc. 60,580 1,358,809 Equifax Inc. 61,991 1,347,684 Tiffany & Co. 62,420 1,337,661 Whirlpool Corp. 29,134 1,336,085 Engelhard Corp. 55,540 1,323,518 T. Rowe Price Group Inc. 53,010 1,323,130 Reliant Energy Inc. 130,007 1,301,370 Novellus Systems Inc./1/ 62,225 1,294,902 Rockwell Automation Inc. 79,452 1,292,684 Georgia-Pacific Corp. 98,632 1,291,093 International Flavors & Fragrances Inc. 40,344 1,284,956 Nucor Corp. 33,458 1,268,058 Eastman Chemical Co. 33,074 1,262,435 Jabil Circuit Inc./1/ 84,603 1,250,432 Broadcom Corp. "A"/1/ 116,943 1,248,951 Bard (C.R.) Inc. 22,524 1,230,486 Ball Corp. 24,338 1,226,392 Deluxe Corp. 27,196 1,225,452 16 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES S&P 500 INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------------- Alberto-Culver Co. "B" 24,752 $ 1,213,591 Cooper Industries Inc. 39,859 1,209,721 Sabre Holdings Corp./1/ 61,905 1,197,862 Robert Half International Inc./1/ 75,452 1,197,423 Stanley Works The) 36,509 1,192,749 Thermo Electron Corp./1/ 73,433 1,184,474 Siebel Systems Inc./1/ 203,952 1,172,724 Centex Corp. 26,209 1,162,369 Stilwell Financial Inc. 95,274 1,149,957 Donnelley (R.R.) & Sons Co. 48,514 1,140,564 Liz Claiborne Inc. 45,692 1,140,015 JDS Uniphase Corp./1/ 583,277 1,136,224 Bemis Co. 22,685 1,120,639 Watson Pharmaceuticals Inc./1/ 45,635 1,118,514 Lucent Technologies Inc./1/ 1,468,054 1,115,721 Pactiv Corp./1/ 67,771 1,114,833 Convergys Corp./1/ 74,039 1,112,806 Pulte Homes Inc. 26,040 1,110,085 KB HOME 22,001 1,074,529 TECO Energy Inc. 66,361 1,053,813 Network Appliance Inc./1/ 143,332 1,050,624 QLogic Corp./1/ 39,846 1,037,590 Nordstrom Inc. 57,689 1,034,941 Pinnacle West Capital Corp. 36,318 1,008,188 LSI Logic Corp./1/ 158,452 1,006,170 Sunoco Inc. 32,636 984,302 Phelps Dodge Corp./1/ 37,974 973,274 Manor Care Inc./1/ 42,975 966,078 Unisys Corp./1/ 137,858 965,006 SUPERVALU Inc. 57,031 921,051 Toys R Us Inc./1/ 90,401 920,282 National Semiconductor Corp./1/ 76,873 917,864 Meredith Corp. 21,294 916,707 Humana Inc./1/ 72,488 898,851 Temple-Inland Inc. 22,853 882,811 Coors (Adolf) Company "B" 15,488 871,974 Fluor Corp. 34,562 844,695 Scientific-Atlanta Inc. 67,088 839,271 NCR Corp./1/ 42,193 835,421 Sprint Corp. (PCS Group)/1/ 425,221 833,433 Dana Corp. 63,705 833,261 Freeport-McMoRan Copper & Gold Inc./1/ 61,850 832,501 Pall Corp. 52,574 830,143 Hasbro Inc. 74,132 825,089 Goodrich (B.F.) Co. 43,681 824,697 Citizens Communications Co./1/ 120,739 818,610 Brunswick Corp. 38,550 811,092 American Power Conversion Corp./1/ 83,942 802,486 Ashland Inc. 29,703 795,743 Winn-Dixie Stores Inc. 60,181 789,575 Big Lots Inc./1/ 49,641 785,817 Advanced Micro Devices Inc./1/ 146,273 781,098 Maytag Corp. 33,218 769,993 Bausch & Lomb Inc. 23,133 767,322 Symbol Technologies Inc. 98,214 753,301 Teradyne Inc./1/ 78,342 752,083 Rowan Companies Inc. 40,246 750,185 Solectron Corp./1/ 352,569 743,921 Dillards Inc. "A" 36,120 728,902 Tellabs Inc./1/ 176,020 716,401 Allegheny Energy Inc. 53,756 704,204 Healthsouth Corp./1/ 168,639 699,852 Worthington Industries Inc. 36,590 684,233 Ryder System Inc. 26,571 662,415 Millipore Corp. 20,697 657,958 Corning Inc./1/ 407,118 651,389 Tektronix Inc./1/ 39,071 641,937 Reebok International Ltd./1/ 25,516 639,176 Autodesk Inc. 49,176 623,060 Sanmina-SCI Corp./1/ 224,581 622,089 Goodyear Tire & Rubber Co. 69,970 622,033 Allied Waste Industries Inc./1/ 84,483 620,950 Mercury Interactive Corp./1/ 35,799 614,311 Sealed Air Corp./1/ 35,903 606,402 Providian Financial Corp./1/ 123,692 606,091 AES Corp. (The)/1/ 229,752 576,678 Snap-On Inc. 24,979 574,017 Boise Cascade Corp. 24,938 568,586 Navistar International Corp./1/ 25,955 562,704 Comverse Technology Inc./1/ 80,029 559,403 Schedules of Investments 17 Schedule of Investments (Unaudited) (Continued) iSHARES S&P 500 INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------------- NVIDIA Corp./1/ 64,769 $ 554,423 CIENA Corp./1/ 184,453 547,825 NICOR Inc. 18,920 533,544 Visteon Corp. 56,052 530,812 Great Lakes Chemical Corp. 21,457 515,397 Peoples Energy Corp. 15,200 512,088 Cooper Tire & Rubber Co. 31,308 505,311 Crane Co. 25,571 505,283 United States Steel Corp. 43,372 503,549 Williams Companies Inc. 221,213 499,941 Delta Air Lines Inc. 52,778 490,308 CMS Energy Corp. 60,771 489,814 Compuware Corp./1/ 160,010 488,030 Quintiles Transnational Corp./1/ 50,822 483,317 Citrix Systems Inc./1/ 77,998 470,328 American Greetings Corp. "A" 27,901 449,206 Hercules Inc./1/ 46,713 430,227 TMP Worldwide Inc./1/ 47,765 429,885 Cummins Inc. 17,773 419,798 Tupperware Corp. 24,974 415,068 Gateway Inc./1/ 138,793 412,215 Calpine Corp./1/ 160,210 395,719 ADC Telecommunications Inc./1/ 340,299 391,344 Mirant Corp./1/ 172,257 380,688 Applied Micro Circuits Corp./1/ 128,238 366,761 Rational Software Corp./1/ 83,249 359,636 Thomas & Betts Corp./1/ 24,993 352,151 Novell Inc./1/ 155,375 326,288 PerkinElmer Inc. 53,874 293,613 Louisiana-Pacific Corp./1/ 44,771 289,668 AMR Corp./1/ 66,502 277,978 PMC-Sierra Inc./1/ 71,225 276,353 Andrew Corp./1/ 41,994 275,061 Shares or Security Principal Value - --------------------------------------------------------------------- Allegheny Technologies Inc. 34,531 $ 238,955 Avaya Inc./1/ 154,797 221,360 Parametric Technology Corp./1/ 111,756 201,161 Dynegy Inc. "A" 154,772 179,536 McDermott International Inc./1/ 27,014 165,596 Power-One Inc./1/ 33,924 101,094 TOTAL COMMON STOCKS (Cost: $4,980,301,191) 3,227,116,750 SHORT TERM INSTRUMENTS - 1.69% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 39,945,679 39,945,679 Dreyfus Money Market Fund 2,273,954 2,273,954 General Electric Commercial Paper 1.74%, 11/04/02 $ 9,927,500 9,927,500 Goldman Sachs Financial Square Prime Obligation Fund 748,097 748,097 Providian Temp Cash Money Market Fund 1,630,931 1,630,931 TOTAL SHORT TERM INSTRUMENTS (Cost: $54,526,161) 54,526,161 TOTAL INVESTMENTS IN SECURITIES - 101.52% (Cost $5,034,827,352) 3,281,642,911 Other Assets, Less Liabilities - (1.52%) (49,231,183) -------------- NET ASSETS - 100.00% $3,232,411,728 ============== /1/ Non-income earning securities. See notes to financial statements. 18 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) iSHARES S&P 500/BARRA GROWTH INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ COMMON STOCKS - 99.84% General Electric Co. 1,138,286 $ 28,058,750 Microsoft Corp./1/ 619,530 27,098,242 Wal-Mart Stores Inc. 508,882 25,057,350 Pfizer Inc. 708,271 20,554,024 Johnson & Johnson 340,432 18,410,563 Coca-Cola Co. (The) 283,997 13,620,496 Procter & Gamble Co. 148,660 13,287,231 Merck & Co. Inc. 257,396 11,765,571 International Business Machines Corp. 193,900 11,321,821 Intel Corp. 762,770 10,594,875 Philip Morris Companies Inc. 241,932 9,386,962 Cisco Systems Inc./1/ 836,943 8,771,163 United Parcel Service Inc. 127,757 7,988,645 PepsiCo Inc. 202,726 7,490,726 Abbott Laboratories 178,697 7,219,359 Lilly (Eli) and Co. 128,487 7,110,471 Home Depot Inc. 269,562 7,035,568 Dell Computer Corp./1/ 296,801 6,977,791 Fannie Mae 113,859 6,779,165 Amgen Inc./1/ 146,320 6,101,544 Medtronic Inc. 138,769 5,844,950 Pharmacia Corp. 147,603 5,738,805 Bristol-Myers Squibb Co. 221,515 5,272,057 Anheuser-Busch Companies Inc. 99,373 5,028,274 3M Co. 44,634 4,908,401 Oracle Corp./1/ 622,103 4,889,730 Wyeth 151,590 4,820,562 American Express Co. 152,020 4,739,984 Fifth Third Bancorp 66,461 4,069,407 Lowe's Companies Inc. 89,043 3,686,380 Walgreen Co. 117,156 3,603,719 Gillette Co. (The) 120,982 3,581,067 Schering-Plough Corp. 167,707 3,575,513 Kimberly-Clark Corp. 59,142 3,349,803 Colgate-Palmolive Co. 62,069 3,348,623 Cardinal Health Inc. 51,652 3,212,754 Target Corp. 103,728 3,062,051 UnitedHealth Group Inc. 34,732 3,029,325 Texas Instruments Inc. 198,286 2,928,684 HCA Inc. 59,298 2,823,178 Tenet Healthcare Corp./1/ 55,899 2,767,000 MBNA Corp. 146,147 2,686,182 McDonald's Corp. 145,790 2,574,651 Marsh & McLennan Companies Inc. 61,346 2,554,447 Automatic Data Processing Inc. 70,952 2,467,001 QUALCOMM Inc./1/ 88,823 2,453,291 First Data Corp. 86,769 2,425,194 Bank of New York Co. Inc. (The) 83,059 2,387,116 Kohls Corp./1/ 38,549 2,344,165 Applied Materials Inc./1/ 188,068 2,172,185 Sysco Corp. 75,888 2,154,460 Baxter International Inc. 68,948 2,106,361 General Dynamics Corp. 23,074 1,876,608 General Mills Inc. 42,102 1,870,171 eBay Inc./1/ 32,249 1,703,070 Forest Laboratories Inc. "A"/1/ 20,554 1,685,634 SLM Corp. 17,668 1,645,598 Sara Lee Corp. 89,722 1,641,015 Harley-Davidson Inc. 34,620 1,608,099 Kellogg Co. 46,899 1,559,392 Boston Scientific Corp./1/ 46,535 1,468,645 Schwab (Charles) Corp. (The) 156,555 1,362,028 McGraw-Hill Companies Inc. (The) 22,199 1,359,023 Heinz (H.J.) Co. 40,167 1,340,373 Stryker Corp. 22,655 1,304,928 Mellon Financial Corp. 49,939 1,294,918 Kroger Co./1/ 90,516 1,276,276 Wrigley (William Jr.) Co. 25,760 1,274,862 Avon Products Inc. 27,033 1,246,221 Omnicom Group Inc. 21,500 1,197,120 Guidant Corp./1/ 34,905 1,127,781 Intuit Inc./1/ 24,203 1,101,963 Bed Bath & Beyond Inc./1/ 33,382 1,087,252 Gap Inc. (The) 99,438 1,078,902 Clorox Co. 26,345 1,058,542 TJX Companies Inc. 61,716 1,049,172 Electronic Arts Inc./1/ 15,886 1,047,841 Paychex Inc. 42,982 1,045,322 Campbell Soup Co. 46,905 1,035,662 Danaher Corp. 17,276 982,141 Schedules of Investments 19 Schedule of Investments (Unaudited) (Continued) iSHARES S&P 500/BARRA GROWTH INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Hershey Foods Corp. 15,615 $ 968,911 Northern Trust Corp. 25,376 957,183 AutoZone Inc./1/ 12,049 950,184 Newell Rubbermaid Inc. 30,543 942,862 Yum! Brands Inc./1/ 33,894 939,203 Concord EFS Inc./1/ 58,592 930,441 Starbucks Corp./1/ 44,349 914,920 Maxim Integrated Products Inc./1/ 36,943 914,709 Mattel Inc. 49,897 898,645 Block (H & R) Inc. 20,696 869,439 Apollo Group Inc. "A"/1/ 19,843 861,781 Moody's Corp. 17,724 859,614 Limited Brands Inc. 59,541 853,818 Zimmer Holdings Inc./1/ 22,217 851,800 Becton, Dickinson & Co. 29,448 836,323 Pitney Bowes Inc. 27,335 833,444 Analog Devices Inc./1/ 41,748 822,436 Best Buy Co. Inc./1/ 36,765 820,227 Cintas Corp. 19,434 814,673 Biomet Inc. 30,254 805,664 Allergan Inc. 14,782 804,141 New York Times Co. "A" 17,333 787,785 Nextel Communications Inc. "A"/1/ 103,999 785,192 Pepsi Bottling Group Inc. 32,624 763,402 Linear Technology Corp. 36,210 750,271 St. Jude Medical Inc./1/ 20,251 722,961 Avery Dennison Corp. 12,577 716,637 North Fork Bancorp Inc. 18,762 709,954 Synovus Financial Corp. 33,875 698,502 Interpublic Group of Companies Inc. 43,793 694,119 Lexmark International Group Inc. "A"/1/ 14,528 682,816 Staples Inc./1/ 53,374 682,653 Yahoo! Inc./1/ 68,623 656,722 SunGard Data Systems Inc./1/ 32,277 627,788 Fiserv Inc./1/ 21,968 616,861 Ecolab Inc. 14,755 615,726 Xilinx Inc./1/ 38,570 610,872 KLA-Tencor Corp./1/ 21,630 604,342 MedImmune Inc./1/ 28,615 598,626 Univision Communications Inc. "A"/1/ 26,174 596,767 Health Management Associates Inc. "A"/1/ 27,503 556,111 Delphi Corp. 64,082 547,901 UST Inc. 19,311 544,763 Family Dollar Stores Inc. 19,813 532,573 Brown-Forman Corp. "B" 7,833 524,419 Adobe Systems Inc. 27,423 523,779 American Standard Companies Inc./1/ 8,210 522,320 Molex Inc. 22,107 519,957 Dollar General Corp. 38,070 510,899 Biogen Inc./1/ 16,975 496,858 IMS Health Inc. 32,715 489,744 Darden Restaurants Inc. 19,733 478,328 BJ Services Co./1/ 17,929 466,154 Rockwell Collins 20,918 458,941 Sigma-Aldrich Corp. 8,368 412,291 RadioShack Corp./1/ 19,789 396,967 Black & Decker Corp. 9,202 385,840 Altera Corp./1/ 43,851 380,188 Dow Jones & Co. Inc. 9,634 370,042 Waters Corp./1/ 15,020 364,235 Equifax Inc. 16,547 359,732 Tiffany & Co. 16,655 356,917 T. Rowe Price Group Inc. 14,140 352,934 International Flavors & Fragrances Inc. 10,767 342,929 Ball Corp. 6,483 326,678 Alberto-Culver Co. "B" 6,614 324,284 Deluxe Corp. 7,159 322,585 Robert Half International Inc./1/ 20,146 319,717 Sabre Holdings Corp./1/ 16,519 319,643 Stanley Works (The) 9,770 319,186 Siebel Systems Inc./1/ 54,465 313,174 Network Appliance Inc./1/ 38,359 281,171 QLogic Corp./1/ 10,644 277,170 Meredith Corp. 5,699 245,342 20 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES S&P 500/BARRA GROWTH INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Sprint Corp. (PCS Group)/1/ 113,563 $ 222,583 Freeport-McMoRan Copper & Gold Inc./1/ 16,503 222,130 Maytag Corp. 8,853 205,213 Millipore Corp. 5,535 175,958 Mercury Interactive Corp./1/ 9,588 164,530 Sealed Air Corp./1/ 9,607 162,262 NVIDIA Corp./1/ 17,403 148,970 Hercules Inc./1/ 12,446 114,628 Tupperware Corp. 6,659 110,673 PMC-Sierra Inc./1/ 19,031 73,840 TOTAL COMMON STOCKS (Cost: $594,332,296) 449,481,169 SHORT TERM INSTRUMENTS - 0.54% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 1,026,066 1,026,066 Dreyfus Money Market Fund 104,736 104,736 Goldman Sachs Financial Square Prime Obligation Fund 61,229 61,229 Providian Temp Cash Money Market Fund 1,257,104 1,257,104 TOTAL SHORT TERM INSTRUMENTS (Cost: $2,449,135) 2,449,135 TOTAL INVESTMENTS IN SECURITIES - 100.38% (Cost $596,781,431) 451,930,304 Other Assets, Less Liabilities - (0.38%) (1,708,274) ------------ NET ASSETS - 100.00% $450,222,030 ============ /1/ Non-income earning securities. See notes to financial statements. Schedules of Investments 21 Schedule of Investments (Unaudited) iSHARES S&P 500/BARRA VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ COMMON STOCKS - 99.84% Exxon Mobil Corp. 1,022,974 $ 32,632,871 Citigroup Inc. 766,214 22,718,245 American International Group Inc. 395,205 21,617,713 Bank of America Corp. 227,491 14,513,926 Wells Fargo & Company 257,236 12,388,486 Verizon Communications Inc. 412,989 11,332,418 ChevronTexaco Corp. 161,690 11,197,033 Viacom Inc. "B"/1/ 267,213 10,835,487 SBC Communications Inc. 503,483 10,120,008 AOL Time Warner Inc./1/ 675,512 7,903,490 AT&T Corp. 581,878 6,988,355 Wachovia Corp. 207,557 6,785,038 Bank One Corp. 177,606 6,642,464 Freddie Mac 105,345 5,888,785 JP Morgan Chase & Co. 301,706 5,729,397 Morgan Stanley 165,991 5,623,775 Du Pont (E.I.) de Nemours & Co. 150,350 5,423,124 Hewlett-Packard Co. 461,801 5,389,218 U.S. Bancorp 289,682 5,382,292 BellSouth Corp. 283,427 5,203,720 Goldman Sachs Group Inc. (The) 72,917 4,814,710 ConocoPhillips 102,404 4,735,161 Walt Disney Co. (The) 308,866 4,676,231 Washington Mutual Inc. 146,568 4,612,495 Lockheed Martin Corp. 68,871 4,453,888 Boeing Co. (The) 126,999 4,334,476 Merrill Lynch & Co. Inc. 130,919 4,313,781 Tyco International Ltd. 301,872 4,256,395 United Technologies Corp. 71,448 4,036,098 Allstate Corp. (The) 106,947 3,801,966 Dow Chemical Co. (The) 137,813 3,763,673 Motorola Inc. 347,801 3,540,614 Schlumberger Ltd. 87,362 3,359,943 General Motors Corp. "A" 84,783 3,298,059 FleetBoston Financial Corp. 158,563 3,223,586 Clear Channel Communications Inc./1/ 92,684 3,220,769 Southern Co. 107,212 3,085,561 Comcast Corp. "A"/1/ 143,215 2,987,465 Gannett Co. Inc. 40,377 2,914,412 Emerson Electric Co. 63,742 2,800,823 Ford Motor Company 275,733 2,702,183 Illinois Tool Works Inc. 46,315 2,701,554 Honeywell International Inc. 123,955 2,684,865 SunTrust Banks Inc. 43,174 2,654,338 National City Corp. 92,408 2,636,400 Duke Energy Corp. 134,391 2,627,344 BB&T Corp. 73,112 2,561,844 Prudential Financial Inc./1/ 87,997 2,513,194 Alcoa Inc. 127,994 2,470,284 International Paper Co. 72,984 2,436,936 MetLife Inc. 106,456 2,422,939 AFLAC Inc. 78,354 2,404,684 Exelon Corp. 48,738 2,315,055 FedEx Corp. 45,141 2,260,210 Carnival Corp. "A" 88,785 2,228,503 Costco Wholesale Corp./1/ 68,783 2,226,506 Union Pacific Corp. 38,225 2,212,081 Waste Management Inc. 92,815 2,164,446 Dominion Resources Inc. 42,108 2,136,139 Northrop Grumman Corp. 17,111 2,122,448 Travelers Property Casualty Corp. "B"/1/ 151,207 2,045,831 ConAgra Foods Inc. 81,277 2,019,733 Household International Inc. 68,954 1,952,088 Caterpillar Inc. 52,077 1,938,306 Tribune Co. 45,734 1,912,139 State Street Corp. 49,126 1,898,229 Alltel Corp. 47,050 1,888,116 Sears, Roebuck and Co. 47,820 1,864,980 Lehman Brothers Holdings Inc. 36,939 1,811,858 PNC Financial Services Group 42,939 1,810,738 Raytheon Co. 60,970 1,786,421 TXU Corp. 42,131 1,757,284 Nike Inc. "B" 40,455 1,746,847 Cendant Corp./1/ 157,671 1,696,540 AT&T Wireless Services Inc./1/ 409,503 1,687,152 Anadarko Petroleum Corp. 37,591 1,674,303 Newmont Mining Corp. 60,761 1,671,535 Progressive Corp. (The) 32,965 1,669,018 Deere & Co. 36,081 1,639,881 22 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES S&P 500/BARRA VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Equity Office Properties Trust 63,306 $ 1,634,561 Occidental Petroleum Corp. 56,935 1,615,815 WellPoint Health Networks Inc./1/ 22,034 1,615,092 KeyCorp 64,509 1,610,790 Safeway Inc./1/ 70,829 1,579,487 Hartford Financial Services Group Inc. 37,459 1,535,819 EMC Corp./1/ 334,515 1,528,734 Southwest Airlines Co. 116,861 1,526,205 XL Capital Ltd. "A" 20,571 1,511,968 CVS Corp. 59,404 1,505,891 CIGNA Corp. 21,193 1,499,405 Albertson's Inc. 61,557 1,487,217 FPL Group Inc. 27,555 1,482,459 Baker Hughes Inc. 50,977 1,479,862 Masco Corp. 75,042 1,467,071 American Electric Power Co. Inc. 51,225 1,460,425 Golden West Financial Corp. 23,432 1,457,002 Weyerhaeuser Co. 33,135 1,450,319 Air Products & Chemicals Inc. 34,370 1,443,884 Coca-Cola Enterprises Inc. 67,774 1,439,520 Chubb Corp. 25,962 1,423,496 Entergy Corp. 33,929 1,411,446 Anthem Inc./1/ 21,391 1,390,415 Burlington Northern Santa Fe Corp. 57,757 1,381,547 Principal Financial Group Inc./1/ 52,631 1,377,880 Progress Energy Inc. 33,465 1,367,715 FirstEnergy Corp. 45,016 1,345,528 Consolidated Edison Inc. 32,248 1,297,015 Apache Corp. 21,709 1,290,600 Comerica Inc. 26,493 1,277,492 SouthTrust Corp. 52,421 1,271,209 Sun Microsystems Inc./1/ 490,763 1,271,076 Praxair Inc. 24,532 1,253,831 McKesson Corp. 43,868 1,242,780 Archer-Daniels-Midland Co. 98,543 1,232,767 Sprint Corp. (FON Group) 134,955 1,230,790 Franklin Resources Inc. 39,469 1,227,486 Hancock (John) Financial Services Inc. 44,055 1,224,729 Loews Corp. 28,244 1,211,385 Eastman Kodak Co. 44,069 1,200,440 Norfolk Southern Corp. 58,705 1,185,254 ACE Ltd. 39,712 1,175,872 Capital One Financial Corp. 33,539 1,171,182 Burlington Resources Inc. 30,390 1,165,760 Unocal Corp. 37,025 1,162,215 PPG Industries Inc. 25,659 1,146,957 AmerisourceBergen Corp. 15,994 1,142,291 Devon Energy Corp. 23,657 1,141,450 TRW Inc. 19,442 1,138,329 AmSouth Bancorp 54,485 1,130,019 Micron Technology Inc./1/ 91,281 1,129,146 Regions Financial Corp. 33,599 1,097,679 Fortune Brands Inc. 22,709 1,073,909 Marriott International Inc. "A" 36,756 1,065,556 Marathon Oil Corp. 46,876 1,063,148 Charter One Financial Inc. 34,885 1,036,788 Rohm & Haas Co. "A" 33,410 1,035,710 Johnson Controls Inc. 13,415 1,030,540 DTE Energy Co. 25,313 1,030,239 Electronic Data Systems Corp. 72,599 1,014,934 Transocean Inc. 48,223 1,003,038 Chiron Corp./1/ 28,688 1,002,359 Simon Property Group Inc. 28,048 1,002,155 Equity Residential 41,599 995,880 May Department Stores Co. (The) 43,577 992,248 St. Paul Companies Inc. 34,225 982,942 Public Service Enterprise Group Inc. 31,248 953,064 Agilent Technologies Inc./1/ 70,229 917,191 Amerada Hess Corp. 13,481 915,090 Ameren Corp. 21,924 913,135 Veritas Software Corp./1/ 62,042 912,638 International Game Technology Inc./1/ 13,142 908,638 Jefferson-Pilot Corp. 22,415 898,841 Federated Department Stores Inc./1/ 30,486 897,508 Countrywide Credit Industries Inc. 18,959 893,917 MBIA Inc. 22,341 892,523 Marshall & Ilsley Corp. 31,956 891,253 Ingersoll-Rand Co. "A" 25,596 881,526 Cincinnati Financial Corp. 24,569 874,165 Ambac Financial Group Inc. 16,071 866,066 Schedules of Investments 23 Schedule of Investments (Unaudited) (Continued) iSHARES S&P 500/BARRA VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ ITT Industries Inc. 13,853 $ 863,457 Lincoln National Corp. 28,038 856,561 Halliburton Co. 65,932 851,182 CSX Corp. 32,208 849,647 Bear Stearns Companies Inc. (The) 15,017 846,959 AON Corp. 41,187 843,922 Computer Associates International Inc. 87,508 840,077 Union Planters Corp. 30,404 834,894 Harrah's Entertainment Inc./1/ 16,995 819,329 Aetna Inc. 22,768 815,322 Genuine Parts Co. 26,394 808,712 Cinergy Corp. 25,298 795,116 PPL Corp. 24,403 794,074 Apple Computer Inc./1/ 54,192 785,784 Dover Corp. 30,639 777,618 UNUMProvident Corp. 36,756 747,985 El Paso Corp. 88,432 731,333 Computer Sciences Corp./1/ 25,977 721,901 Textron Inc. 21,059 718,112 KeySpan Corp. 21,371 715,928 Nabors Industries Ltd./1/ 21,781 713,328 Knight Ridder Inc. 12,619 711,838 Parker Hannifin Corp. 17,879 683,157 Eaton Corp. 10,613 676,473 King Pharmaceuticals Inc./1/ 37,162 675,234 Starwood Hotels & Resorts Worldwide Inc. 30,117 671,609 PG&E Corp./1/ 59,396 668,799 Genzyme Corp. - General Division/1/ 32,356 666,857 Huntington Bancshares Inc. 36,624 666,191 First Tennessee National Corp. 19,128 663,168 Kerr-McGee Corp. 15,200 660,288 Kinder Morgan Inc. 18,431 653,379 Hilton Hotels Corp. 56,792 646,293 Penney (J.C.) Co. Inc. (Holding Co.) 40,398 643,136 MGIC Investment Corp. 15,630 638,173 Plum Creek Timber Co. Inc. 27,876 630,276 EOG Resources Inc. 17,510 629,660 Noble Corp./1/ 20,311 629,641 Torchmark Corp. 18,132 621,202 Constellation Energy Group Inc. 24,833 615,610 SAFECO Corp. 19,317 613,894 Sempra Energy 31,032 609,779 Zions Bancorp 13,908 605,415 Grainger (W.W.) Inc. 14,183 603,487 Monsanto Co. 39,440 603,038 VF Corp. 16,691 600,542 Jones Apparel Group Inc./1/ 19,459 597,391 PACCAR Inc. 17,464 590,109 Applera Corp. - Applied Biosystems Group 32,111 587,631 Leggett & Platt Inc. 29,623 586,239 PeopleSoft Inc./1/ 47,194 583,790 MeadWestvaco Corp. 30,192 579,988 Wendy's International Inc. 17,485 578,928 Qwest Communications International Inc./1/ 253,541 578,073 Office Depot Inc./1/ 46,721 576,537 Xcel Energy Inc. 60,044 559,010 Vulcan Materials Co. 15,385 556,322 R.J. Reynolds Tobacco Holdings Inc. 13,600 548,352 Xerox Corp./1/ 110,148 545,233 Sherwin-Williams Co. 22,992 544,451 NiSource Inc. 31,383 540,729 Edison International/1/ 49,217 492,170 Circuit City Stores Inc. 31,721 480,573 CenturyTel Inc. 21,375 479,441 BMC Software Inc./1/ 36,667 479,238 Whirlpool Corp. 10,263 470,661 Engelhard Corp. 19,573 466,425 Reliant Energy Inc. 45,907 459,529 Novellus Systems Inc./1/ 21,958 456,946 Rockwell Automation Inc. 28,061 456,552 Georgia-Pacific Corp. 34,844 456,108 Nucor Corp. 11,812 447,675 Eastman Chemical Co. 11,698 446,513 Broadcom Corp. "A"/1/ 41,353 441,650 Jabil Circuit Inc./1/ 29,839 441,020 Cooper Industries Inc. 14,102 427,996 Bard (C.R.) Inc. 7,830 427,753 Centex Corp. 9,344 414,406 24 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES S&P 500/BARRA VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Thermo Electron Corp./1/ 25,505 $ 411,396 Stilwell Financial Inc. 33,601 405,564 Liz Claiborne Inc. 16,167 403,367 Donnelley (R.R.) & Sons Co. 17,086 401,692 JDS Uniphase Corp./1/ 205,862 401,019 Watson Pharmaceuticals Inc./1/ 16,134 395,444 Bemis Co. 7,978 394,113 Pactiv Corp./1/ 23,956 394,076 Lucent Technologies Inc./1/ 518,029 393,702 Convergys Corp./1/ 26,187 393,591 Pulte Homes Inc. 9,201 392,239 KB HOME 7,636 372,942 TECO Energy Inc. 23,479 372,847 Nordstrom Inc. 20,366 365,366 Pinnacle West Capital Corp. 12,832 356,216 LSI Logic Corp./1/ 56,060 355,981 Sunoco Inc. 11,544 348,167 Phelps Dodge Corp./1/ 13,446 344,621 Unisys Corp./1/ 48,679 340,753 Manor Care Inc./1/ 15,107 339,605 Toys R Us Inc./1/ 32,020 325,964 National Semiconductor Corp./1/ 27,244 325,293 SUPERVALU Inc. 20,120 324,938 Humana Inc./1/ 25,600 317,440 Temple-Inland Inc. 8,081 312,169 Coors (Adolf) Company "B" 5,509 310,157 Fluor Corp. 12,189 297,899 Scientific-Atlanta Inc. 23,703 296,525 NCR Corp./1/ 14,928 295,574 Dana Corp. 22,462 293,803 Pall Corp. 18,513 292,320 Goodrich (B.F.) Co. 15,461 291,904 Hasbro Inc. 26,187 291,461 Citizens Communications Co./1/ 42,643 289,120 Brunswick Corp. 13,627 286,712 American Power Conversion Corp./1/ 29,587 282,852 Ashland Inc. 10,494 281,134 Winn-Dixie Stores Inc. 21,254 278,852 Big Lots Inc./1/ 17,566 278,070 Advanced Micro Devices Inc./1/ 51,664 275,886 Bausch & Lomb Inc. 8,133 269,772 Symbol Technologies Inc. 34,714 266,256 Teradyne Inc./1/ 27,608 265,037 Rowan Companies Inc. 14,210 264,874 Solectron Corp./1/ 124,432 262,552 Dillards Inc. "A" 12,747 257,234 Tellabs Inc./1/ 62,164 253,007 Allegheny Energy Inc. 18,950 248,245 Healthsouth Corp./1/ 59,535 247,070 Worthington Industries Inc. 12,920 241,604 Ryder System Inc. 9,350 233,095 Corning Inc./1/ 143,731 229,970 Tektronix Inc./1/ 13,820 227,063 Reebok International Ltd./1/ 8,990 225,199 Autodesk Inc. 17,370 220,078 Goodyear Tire & Rubber Co. 24,729 219,841 Sanmina-SCI Corp./1/ 79,242 219,500 Allied Waste Industries Inc./1/ 29,767 218,787 Providian Financial Corp./1/ 43,646 213,865 AES Corp. (The)/1/ 81,399 204,311 Snap-On Inc. 8,780 201,764 Boise Cascade Corp. 8,784 200,275 Navistar International Corp./1/ 9,121 197,743 Comverse Technology Inc./1/ 28,247 197,447 CIENA Corp./1/ 65,112 193,383 NICOR Inc. 6,651 187,558 Visteon Corp. 19,784 187,354 Great Lakes Chemical Corp. 7,547 181,279 Peoples Energy Corp. 5,323 179,332 Cooper Tire & Rubber Co. 11,053 178,395 United States Steel Corp. 15,338 178,074 Crane Co. 9,009 178,018 Williams Companies Inc. 78,058 176,411 CMS Energy Corp. 21,554 173,725 Delta Air Lines Inc. 18,609 172,878 Compuware Corp./1/ 56,421 172,084 Quintiles Transnational Corp./1/ 17,955 170,752 Citrix Systems Inc./1/ 27,326 164,776 American Greetings Corp. "A" 9,848 158,553 TMP Worldwide Inc./1/ 16,830 151,470 Cummins Inc. 6,239 147,365 Gateway Inc./1/ 48,975 145,456 Schedules of Investments 25 Schedule of Investments (Unaudited) (Continued) iSHARES S&P 500/BARRA VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Calpine Corp./1/ 56,580 $ 139,753 ADC Telecommunications Inc./1/ 120,102 138,117 Mirant Corp./1/ 60,832 134,439 Applied Micro Circuits Corp./1/ 45,235 129,372 Rational Software Corp./1/ 29,377 126,909 Thomas & Betts Corp./1/ 8,868 124,950 Novell Inc./1/ 54,878 115,244 PerkinElmer Inc. 18,981 103,446 Louisiana-Pacific Corp./1/ 15,844 102,511 AMR Corp./1/ 23,413 97,866 Andrew Corp./1/ 14,838 97,189 Allegheny Technologies Inc. 12,165 84,182 Avaya Inc./1/ 54,591 78,065 Parametric Technology Corp./1/ 39,491 71,084 Dynegy Inc. "A" 54,656 63,401 McDermott International Inc./1/ 9,486 58,149 Power-One Inc./1/ 11,966 35,659 TOTAL COMMON STOCKS (Cost: $787,538,718) 543,519,592 SHORT TERM INSTRUMENTS - 2.08% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 9,403,401 9,403,401 Dreyfus Money Market Fund 511,278 511,278 Goldman Sachs Financial Square Prime Obligation Fund 272,120 272,120 Providian Temp Cash Money Market Fund 1,166,917 1,166,917 TOTAL SHORT TERM INSTRUMENTS (Cost: $11,353,716) 11,353,716 TOTAL INVESTMENTS IN SECURITIES - 101.92% (Cost $798,892,434) 554,873,308 Other Assets, Less Liabilities - (1.92%) (10,473,648) ------------ NET ASSETS - 100.00% $544,399,660 ============ /1/ Non-income earning securities. See notes to financial statements. 26 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) iSHARES S&P MIDCAP 400 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- COMMON STOCKS - 99.94% - ------------------------------------------------------------------- M&T Bank Corp. 81,980 $ 6,460,844 Gilead Sciences Inc./1/ 174,754 5,859,502 IDEC Pharmaceuticals Corp./1/ 136,203 5,655,149 Washington Post Company (The) "B" 8,484 5,506,116 Quest Diagnostics Inc./1/ 86,920 5,348,188 Affiliated Computer Services Inc. "A"/1/ 117,656 5,006,263 National Commerce Financial Corp. 184,086 4,611,354 L-3 Communications Holdings Inc./1/ 83,881 4,420,529 Symantec Corp./1/ 129,322 4,354,272 Weatherford International Ltd./1/ 116,170 4,314,554 American Water Works Inc. 89,348 3,990,282 Golden State Bancorp Inc. 122,541 3,960,525 Express Scripts Inc. "A"/1/ 70,266 3,830,902 GreenPoint Financial Corp. 88,568 3,696,828 Microchip Technology Inc./1/ 180,057 3,682,166 SPX Corp./1/ 36,443 3,677,099 Tyson Foods Inc. "A" 315,260 3,666,474 Mylan Laboratories Inc. 111,834 3,661,445 Westwood One Inc./1/ 95,359 3,409,084 Compass Bancshares Inc. 114,818 3,385,983 Murphy Oil Corp. 40,859 3,353,298 ENSCO International Inc. 132,770 3,324,561 Lennar Corp. 57,698 3,218,394 Dean Foods Co./1/ 80,664 3,208,814 CDW Computer Centers Inc./1/ 75,151 3,183,396 DST Systems Inc./1/ 106,938 3,151,463 Banknorth Group Inc. 132,263 3,141,246 Ocean Energy Inc. 156,867 3,129,497 Patterson Dental Co./1/ 60,781 3,110,772 Oxford Health Plans Inc./1/ 78,525 3,057,763 Old Republic International Corp. 107,494 3,050,680 Sovereign Bancorp Inc. 232,715 3,002,024 Hillenbrand Industries Inc. 55,027 2,987,966 Mohawk Industries Inc./1/ 59,620 2,960,133 Lincare Holdings Inc./1/ 94,954 2,947,372 Pepco Holdings Inc. 145,767 2,908,052 McCormick & Co. Inc. 124,688 2,842,886 TCF Financial Corp. 66,762 2,826,035 Hibernia Corp. "A" 141,124 2,821,069 DENTSPLY International Inc. 69,836 2,805,312 Radian Group Inc. 84,583 2,762,481 Republic Services Inc. "A"/1/ 146,052 2,745,778 Universal Health Services Inc. "B"/1/ 53,400 2,731,410 ChoicePoint Inc./1/ 76,425 2,723,787 Hormel Foods Corp. 123,982 2,712,726 Michaels Stores Inc./1/ 59,210 2,705,897 New York Community Bancorp Inc. 95,858 2,700,320 Smith International Inc./1/ 90,498 2,652,496 Telephone & Data Systems Inc. 52,320 2,639,544 Varian Medical Systems Inc./1/ 60,775 2,612,717 Synopsys Inc./1/ 68,079 2,597,214 Expeditors International Washington Inc. 92,768 2,591,938 Energy East Corp. 128,899 2,553,489 Pioneer Natural Resources Co./1/ 103,582 2,511,864 Triad Hospitals Inc./1/ 66,181 2,511,569 Everest Re Group Ltd. 45,760 2,510,394 Ross Stores Inc. 70,133 2,499,540 Valero Energy Corp. 94,419 2,499,271 Wisconsin Energy Corp. 102,781 2,497,578 Commerce Bancorp Inc. 59,953 2,488,649 Legg Mason Inc. 57,875 2,463,160 First Health Group Corp./1/ 90,395 2,451,512 Fidelity National Financial Inc. 85,249 2,449,204 Lear Corp./1/ 58,584 2,440,024 D.R. Horton Inc. 130,667 2,433,020 SCANA Corp. 93,501 2,432,896 Williams-Sonoma Inc./1/ 102,717 2,427,203 Barr Laboratories Inc./1/ 38,899 2,423,019 Cadence Design Systems Inc./1/ 236,822 2,408,480 Health Net Inc./1/ 111,734 2,396,694 Energizer Holdings Inc./1/ 78,629 2,390,322 First Virginia Banks Inc. 64,060 2,389,438 Mercantile Bankshares Corp. 62,195 2,373,983 Millennium Pharmaceuticals Inc./1/ 253,503 2,362,648 SEI Investment Co. 96,554 2,305,710 Edwards (A.G.) Inc. 70,930 2,268,341 Brinker International Inc./1/ 87,467 2,265,395 Dollar Tree Stores Inc./1/ 101,821 2,244,135 Dun & Bradstreet Corp./1/ 66,316 2,228,881 Whole Foods Market Inc./1/ 51,281 2,196,878 PMI Group Inc. (The) 80,491 2,190,160 Schedules of Investments 27 Schedule of Investments (Unaudited) (Continued) iSHARES S&P MIDCAP 400 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------------- Belo (A.H.) Corp. 99,999 $ 2,187,978 Dreyer's Grand Ice Cream Inc. 31,040 2,168,454 Associated Bancorp 67,531 2,142,759 PETsMART Inc./1/ 120,312 2,142,757 Park Place Entertainment Corp./1/ 269,203 2,140,164 Fastenal Co. 67,721 2,138,629 Beckman Coulter Inc. 55,132 2,133,608 IVAX Corp./1/ 173,636 2,130,514 Diebold Inc. 64,283 2,116,196 Entercom Communications Corp./1/ 44,386 2,102,565 City National Corp. 44,678 2,089,590 Northeast Utilities 121,945 2,060,870 Henry Schein Inc./1/ 39,024 2,058,516 Mandalay Resort Group/1/ 60,967 2,045,443 CH Robinson Worldwide Inc. 75,451 2,030,386 Coach Inc./1/ 79,184 2,027,110 Cooper Cameron Corp./1/ 48,400 2,021,184 Manpower Inc. 68,221 2,001,604 Harris Corp. 59,208 1,982,876 PepsiAmericas Inc. 137,302 1,949,688 Gallagher (Arthur J.) & Co. 78,705 1,940,078 Astoria Financial Corp. 79,127 1,930,699 Equitable Resources Inc. 55,360 1,912,688 Ceridian Corp./1/ 132,328 1,885,674 International Speedway Corp. "A" 47,462 1,885,665 Protective Life Corp. 61,281 1,885,616 Outback Steakhouse Inc./1/ 68,495 1,882,243 NSTAR 47,354 1,872,851 AdvancePCS/1/ 82,530 1,859,401 DPL Inc. 112,899 1,857,189 Unitrin Inc. 60,478 1,856,675 Hospitality Properties Trust 55,851 1,849,785 Constellation Brands Inc./1/ 79,650 1,839,915 Gentex Corp./1/ 67,560 1,836,956 Sonoco Products Co. 86,088 1,834,535 Dial Corp. (The) 84,654 1,816,675 Hispanic Broadcasting Corp./1/ 97,079 1,810,523 Patterson-UTI Energy Inc./1/ 70,469 1,797,664 BISYS Group Inc. (The)/1/ 106,521 1,779,966 Apogent Technologies Inc./1/ 95,386 1,779,903 Omnicare Inc. 84,042 1,774,967 Abercrombie & Fitch Co. "A"/1/ 88,482 1,740,441 Bowater Inc. 49,262 1,738,949 Noble Energy Inc. 51,108 1,736,139 Eaton Vance Corp. 62,025 1,714,371 Lyondell Chemical Co. 142,438 1,700,710 Bank of Hawaii Corp. 60,775 1,695,622 Wilmington Trust Corp. 58,594 1,694,538 Neuberger Berman Inc. 62,389 1,681,384 Leucadia National Corp. 49,402 1,679,668 Valspar Corp. (The) 44,724 1,668,205 Valassis Communications Inc./1/ 47,537 1,667,123 Questar Corp. 72,948 1,666,132 ALLETE Inc. 75,952 1,640,563 Pentair Inc. 43,908 1,632,060 Packaging Corporation of America/1/ 93,155 1,631,144 Viad Corp. 79,510 1,624,389 Smucker (J.M.) Co. (The) 44,185 1,621,590 FirstMerit Corp. 75,569 1,618,688 Teleflex Inc. 34,985 1,594,616 Puget Energy Inc. 78,022 1,592,429 Pier 1 Imports Inc. 83,432 1,591,048 New Plan Excel Realty Trust 86,269 1,590,800 Pennzoil-Quaker State Co. 71,991 1,581,642 Intersil Corp. "A"/1/ 121,670 1,576,843 SICOR Inc./1/ 103,470 1,573,779 Charles River Laboratories International Inc./1/ 39,944 1,567,802 Alliant Energy Corp. 81,038 1,559,981 Scholastic Corp./1/ 34,893 1,559,019 Investors Financial Services Corp. 57,523 1,557,148 Pride International Inc./1/ 118,892 1,545,596 AGCO Corp./1/ 66,442 1,541,454 Smithfield Foods Inc./1/ 97,624 1,532,697 Hubbell Inc. "B" 52,703 1,532,076 Steris Corp./1/ 61,450 1,530,720 Harte-Hanks Inc. 82,133 1,528,495 Helmerich & Payne Inc. 44,604 1,526,795 Krispy Kreme Doughnuts Inc./1/ 48,560 1,517,986 Jacobs Engineering Group Inc./1/ 48,536 1,498,792 Network Associates Inc./1/ 138,981 1,477,368 Tidewater Inc. 54,081 1,459,646 Varco International Inc./1/ 86,191 1,458,352 MDU Resources Group Inc. 63,664 1,453,449 Dole Food Co. 49,994 1,451,326 E*TRADE Group Inc./1/ 325,152 1,446,926 RPM International Inc. 102,376 1,439,407 Webster Financial Corp. 42,826 1,438,097 28 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited)(Continued) iSHARES S&P MIDCAP 400 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Activision Inc./1/ 59,505 $ 1,423,955 National Fuel Gas Co. 71,441 1,419,533 Martin Marietta Materials Inc. 43,528 1,417,707 American Financial Group Inc. 61,387 1,413,129 National-Oilwell Inc./1/ 72,335 1,401,852 Hawaiian Electric Industries Inc. 32,417 1,397,173 StanCorp Financial Group Inc. 26,385 1,395,767 Readers Digest Association Inc.(The) "A" 89,003 1,392,897 Reynolds & Reynolds Co. (The) "A" 62,012 1,391,549 Education Management Corp./1/ 31,198 1,381,135 CNF Inc. 43,896 1,377,895 Lancaster Colony Corp. 32,660 1,375,639 Catalina Marketing Corp./1/ 48,840 1,371,427 Tootsie Roll Industries Inc. 46,096 1,369,973 Edwards Lifesciences Corp./1/ 53,328 1,364,664 Donaldson Co. Inc. 39,375 1,351,744 Clayton Homes Inc. 122,998 1,350,518 Cheesecake Factory (The)/1/ 45,075 1,344,587 Saks Inc./1/ 127,229 1,339,721 HON Industries Inc. 52,611 1,338,950 HCC Insurance Holdings Inc. 55,590 1,334,716 Vectren Corp. 60,493 1,330,846 Tech Data Corp./1/ 50,369 1,329,742 Roslyn Bancorp Inc. 74,714 1,300,771 Colonial BancGroup Inc. (The) 104,900 1,300,760 Lee Enterprises Inc. 39,488 1,297,576 Lubrizol Corp. 45,859 1,296,434 99 Cents Only Stores/1/ 62,557 1,294,930 Independence Community Bank Corp. 51,105 1,282,224 Barnes & Noble Inc./1/ 60,056 1,270,785 GTECH Holdings Corp./1/ 51,090 1,268,054 Waddell & Reed Financial Inc. "A" 71,510 1,262,867 Investment Technology Group Inc./1/ 43,026 1,258,941 3Com Corp./1/ 319,262 1,257,892 Vishay Intertechnology Inc./1/ 142,321 1,252,425 Vertex Pharmaceuticals Inc./1/ 67,696 1,251,699 Certegy Inc./1/ 61,737 1,240,914 IMC Global Inc. 102,646 1,236,884 BJ's Wholesale Club Inc./1/ 63,631 1,209,625 Westamerica Bancorp 29,967 1,207,071 Herman Miller Inc. 67,746 1,203,169 Swift Transportation Co. Inc./1/ 76,436 1,192,402 BorgWarner Inc. 23,752 1,179,049 Church & Dwight Co. Inc. 35,489 1,176,460 OGE Energy Corp. 69,675 1,175,417 Cytyc Corp./1/ 109,389 1,172,650 DeVry Inc./1/ 62,399 1,161,869 Avnet Inc. 106,891 1,153,354 Furniture Brands International Inc./1/ 50,245 1,153,123 Blyth Inc. 41,312 1,152,605 Cabot Corp. 54,880 1,152,480 Borders Group Inc./1/ 72,879 1,151,488 Apria Healthcare Group Inc./1/ 48,756 1,148,691 ArvinMeritor Inc. 60,634 1,133,856 Arrow Electronics Inc./1/ 89,559 1,131,130 Neiman-Marcus Group Inc. "A"/1/ 42,791 1,123,264 Superior Industries International Inc. 23,622 1,112,124 Acxiom Corp./1/ 78,427 1,112,095 AGL Resources Inc. 49,962 1,103,661 LifePoint Hospitals Inc./1/ 35,142 1,096,009 AmeriCredit Corp./1/ 135,478 1,093,307 Provident Financial Group Inc. 43,528 1,092,118 Payless ShoeSource Inc./1/ 20,156 1,088,626 Pittston Brink's Group 48,461 1,085,526 CBRL Group Inc. 46,813 1,068,273 LaBranche & Co. Inc./1/ 52,667 1,066,507 Forest Oil Corp./1/ 41,821 1,066,435 Timberland Co. "A"/1/ 33,487 1,060,868 Extended Stay America Inc./1/ 83,451 1,059,828 Great Plains Energy Inc. 55,293 1,058,861 Covance Inc./1/ 53,922 1,055,254 Media General Inc. "A" 20,721 1,053,663 MONY Group Inc. (The) 42,599 1,050,917 Interstate Bakeries Corp. 39,236 1,042,501 Rayonier Inc. 24,787 1,038,823 WGL Holdings Inc. 43,344 1,036,355 Crompton Corp. 101,382 1,018,889 ONEOK Inc. 53,909 1,018,880 Lam Research Corp./1/ 113,732 1,012,215 Precision Castparts Corp. 46,600 1,010,288 Sybase Inc./1/ 86,705 1,007,512 AmerUs Group Co. 35,463 1,005,731 National Instruments Corp./1/ 45,944 1,005,714 Schedules of Investments 29 Schedule of Investments (Unaudited) (Continued) iSHARES S&P MIDCAP 400 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------------------- WPS Resources Corp. 28,320 $ 1,003,661 Henry (Jack) & Associates Inc. 80,745 1,003,660 Carlisle Companies Inc. 27,141 995,532 Storage Technology Corp./1/ 94,599 994,235 York International Corp. 35,131 990,694 DQE Inc. 65,814 987,210 Fairchild Semiconductor International Corp. "A"/1/ 104,065 985,496 Kennametal Inc. 30,669 985,088 IndyMac Bancorp Inc./1/ 51,118 985,044 Harsco Corp. 36,059 980,444 FMC Technologies Inc./1/ 58,428 979,253 Advanced Fibre Communications Inc./1/ 73,631 977,083 Integrated Device Technology Inc./1/ 92,274 963,341 Claire's Stores Inc. 43,424 946,643 Albemarle Corp. 37,203 940,864 Western Gas Resources Inc. 29,438 919,938 RF Micro Devices Inc./1/ 149,957 899,742 Emmis Communications Corp./1/ 47,245 897,655 Sensient Technologies Corp. 42,278 893,334 International Rectifier Corp./1/ 56,768 886,716 Imation Corp./1/ 31,249 885,284 Copart Inc./1/ 81,281 881,899 Ohio Casualty Corp./1/ 53,981 878,811 GATX Corp. 43,556 862,409 AMETEK Inc. 29,446 857,468 Grant Prideco Inc./1/ 99,300 848,022 Varian Inc./1/ 30,206 833,988 Airgas Inc./1/ 63,353 831,825 Greater Bay Bancorp 45,613 829,700 Ferro Corp. 35,874 828,689 Olin Corp. 50,249 823,079 Hunt (J.B.) Transport Services Inc./1/ 34,749 818,339 Universal Corp. 23,323 817,938 IDACORP Inc. 33,523 815,615 Alexander & Baldwin Inc. 36,643 815,307 Cree Inc./1/ 64,929 811,612 FMC Corp./1/ 31,256 807,030 SanDisk Corp./1/ 61,278 803,355 Cabot Microelectronics Corp./1/ 21,571 803,304 Banta Corp. 22,475 797,862 CheckFree Corp./1/ 69,669 792,833 Longs Drug Stores Corp. 34,129 788,039 American Eagle Outfitters Inc./1/ 64,366 776,254 Arch Coal Inc. 46,730 773,381 Cytec Industries Inc./1/ 35,192 772,464 Bob Evans Farms Inc. 31,648 750,058 Federal Signal Corp. 40,394 744,057 PacifiCare Health Systems Inc. "A"/1/ 31,591 729,436 Potlatch Corp. 25,367 727,526 Cypress Semiconductor Corp./1/ 109,631 719,179 Nordson Corp. 29,901 709,850 Callaway Golf Co. 67,891 706,066 AK Steel Holding Corp./1/ 96,303 703,975 Tecumseh Products Co. "A" 16,475 691,291 PNM Resources Inc. 34,880 690,624 Perrigo Co./1/ 64,677 687,517 Kelly Services Inc. "A" 31,681 686,527 Trinity Industries Inc. 40,984 674,597 Fuller (H.B.) Co. 25,263 671,996 Silicon Valley Bancshares/1/ 39,651 671,291 ICN Pharmaceuticals Inc. 73,825 668,854 Plantronics Inc./1/ 40,972 667,844 Minerals Technologies Inc. 17,946 665,258 Titan Corp. (The)/1/ 69,270 664,992 Aquila Inc. 160,438 657,796 Protein Design Labs Inc./1/ 79,240 657,692 KEMET Corp./1/ 76,673 655,554 Wallace Computer Services Inc. 37,000 653,050 Westar Energy Inc. 63,940 643,236 Semtech Corp./1/ 65,185 632,295 Ruddick Corp. 41,402 628,896 Black Hills Corp. 23,915 626,334 Lattice Semiconductor Corp./1/ 97,901 608,944 Granite Construction Inc. 36,883 607,832 Polycom Inc./1/ 89,099 604,982 Gartner Inc. "B"/1/ 73,957 591,656 United Rentals Inc./1/ 68,325 576,663 Modine Manufacturing Co. 29,903 568,755 Allmerica Financial Corp. 47,341 568,092 Cleco Corp. 41,742 562,265 Macrovision Corp./1/ 45,603 557,725 Sierra Pacific Resources 91,135 555,924 Price Communications Corp./1/ 48,666 549,926 McDATA Corp. "A"/1/ 101,200 549,516 Albany International Corp. "A" 28,687 544,479 30 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES S&P MIDCAP 400 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Kaydon Corp. 27,044 $ 541,962 Avocent Corp./1/ 40,137 537,033 Horace Mann Educators Corp. 36,432 535,550 Internet Security Systems Inc./1/ 43,114 531,164 MPS Group Inc./1/ 90,940 527,452 ADTRAN Inc./1/ 33,770 526,812 Rollins Inc. 26,967 523,160 Bandag Inc. 17,109 521,824 Micrel Inc./1/ 82,788 509,974 Papa John's International Inc./1/ 17,401 506,891 CSG Systems International Inc./1/ 46,005 501,454 Flowserve Corp./1/ 49,259 492,590 Airborne Inc. 43,167 489,514 Sylvan Learning Systems Inc./1/ 35,762 489,224 Solutia Inc. 93,610 488,644 Hanover Compressor Co./1/ 58,629 486,621 Sequa Corp. "A"/1/ 9,309 484,999 EGL Inc./1/ 43,458 478,473 Overseas Shipholding Group Inc. 30,737 469,661 Credence Systems Corp./1/ 54,012 467,744 Keane Inc./1/ 67,509 455,686 Schulman (A.) Inc. 26,095 452,226 Glatfelter Co. 38,665 446,581 Atmel Corp./1/ 417,044 442,067 VISX Inc./1/ 47,635 439,671 Wausau-Mosinee Paper Corp. 45,977 423,448 Alaska Air Group Inc./1/ 23,685 419,224 FEI Co./1/ 28,914 417,807 TriQuint Semiconductor Inc./1/ 117,325 414,157 Ascential Software Corp./1/ 221,684 411,889 Macromedia Inc./1/ 53,060 410,154 Sepracor Inc./1/ 74,924 392,602 Dycom Industries Inc./1/ 42,744 391,535 Broadwing Inc./1/ 195,428 386,947 Sotheby's Holdings Inc. "A"/1/ 54,889 384,223 Newport Corp./1/ 33,910 382,505 CommScope Inc./1/ 55,145 373,883 GrafTech International Ltd./1/ 49,919 361,913 Plexus Corp./1/ 37,445 346,366 Advent Software Inc./1/ 29,236 334,752 Longview Fibre Co. 45,603 316,485 Quantum Corp./1/ 139,489 308,271 Unifi Inc./1/ 48,071 301,405 Six Flags Inc./1/ 82,549 290,572 Mentor Graphics Corp./1/ 58,434 285,158 Legato Systems Inc./1/ 101,550 280,075 Incyte Genomics Inc./1/ 60,045 278,609 InFocus Corp./1/ 35,128 267,675 Korn/Ferry International/1/ 33,787 264,890 NCO Group Inc./1/ 23,162 263,815 Carpenter Technology Corp. 19,876 258,388 Stewart & Stevenson Services Inc. 25,395 248,693 Wind River Systems Inc./1/ 70,464 226,894 LTX Corp./1/ 43,554 198,606 Powerwave Technologies Inc./1/ 58,380 197,908 Transaction Systems Architects Inc. "A"/1/ 31,556 195,647 Cirrus Logic Inc./1/ 73,548 187,547 RSA Security Inc./1/ 50,522 169,754 Retek Inc./1/ 46,634 167,882 Sykes Enterprises Inc./1/ 36,077 151,884 Metris Companies Inc. 51,732 119,501 Quanta Services Inc./1/ 54,418 113,189 Atlas Air Worldwide Holdings Inc./1/ 34,201 82,424 MIPS Technologies Inc. "B"/1/ 35,022 42,727 TOTAL COMMON STOCKS (Cost: $733,591,416) 593,960,650 SHORT TERM INSTRUMENTS - 8.71% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 47,691,409 47,691,409 Dreyfus Money Market Fund 2,398,760 2,398,760 Goldman Sachs Financial Square Prime Obligation Fund 710,869 710,869 Providian Temp Cash Money Market Fund 978,140 978,140 TOTAL SHORT TERM INSTRUMENTS (Cost: $51,779,178) 51,779,178 TOTAL INVESTMENTS IN SECURITIES - 108.65% (Cost $785,370,594) 645,739,828 OTHER ASSETS, LESS LIABILITIES - (8.65%) (51,394,280) ------------ NET ASSETS - 100.00% $594,345,548 ============ /1/ Non-income earning securities. See notes to financial statements. Schedules of Investments 31 Schedule of Investments (Unaudited) iSHARES S&P MIDCAP 400/BARRA GROWTH INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- COMMON STOCKS - 99.98% Gilead Sciences Inc./1/ 157,861 $ 5,293,079 IDEC Pharmaceuticals Corp./1/ 123,071 5,109,908 Washington Post Company (The) "B" 7,659 4,970,691 Quest Diagnostics Inc./1/ 78,540 4,832,566 Affiliated Computer Services Inc. "A"/1/ 106,282 4,522,299 L-3 Communications Holdings Inc./1/ 75,716 3,990,233 Symantec Corp./1/ 116,954 3,937,841 Weatherford International Ltd./1/ 104,865 3,894,686 Express Scripts Inc. "A"/1/ 63,438 3,458,640 GreenPoint Financial Corp. 80,009 3,339,576 Microchip Technology Inc./1/ 162,734 3,327,910 SPX Corp./1/ 32,967 3,326,370 Mylan Laboratories Inc. 101,024 3,307,526 Westwood One Inc./1/ 86,182 3,081,007 Murphy Oil Corp. 36,950 3,032,487 ENSCO International Inc. 119,891 3,002,071 CDW Computer Centers Inc./1/ 67,877 2,875,270 DST Systems Inc./1/ 96,615 2,847,244 Patterson Dental Co./1/ 54,943 2,811,983 Oxford Health Plans Inc./1/ 70,989 2,764,312 Hillenbrand Industries Inc. 49,762 2,702,077 Lincare Holdings Inc./1/ 85,717 2,660,656 McCormick & Co. Inc. 112,689 2,569,309 TCF Financial Corp. 60,301 2,552,541 DENTSPLY International Inc. 63,107 2,535,008 Universal Health Services Inc. "B"/1/ 48,270 2,469,011 ChoicePoint Inc./1/ 69,070 2,461,655 Hormel Foods Corp. 111,885 2,448,044 Michaels Stores Inc./1/ 53,461 2,443,168 New York Community Bancorp Inc. 86,603 2,439,607 Smith International Inc./1/ 81,655 2,393,308 Varian Medical Systems Inc./1/ 54,825 2,356,927 Synopsys Inc./1/ 61,486 2,345,691 Expeditors International Washington Inc. 83,833 2,342,294 Ross Stores Inc. 63,372 2,258,578 Commerce Bancorp Inc. 54,219 2,250,631 Legg Mason Inc. 52,300 2,225,888 First Health Group Corp./1/ 81,669 2,214,863 Williams-Sonoma Inc./1/ 92,734 2,191,304 Barr Laboratories Inc./1/ 35,134 2,188,497 Cadence Design Systems Inc./1/ 214,011 2,176,492 Health Net Inc./1/ 100,964 2,165,678 Energizer Holdings Inc./1/ 71,061 2,160,254 SEI Investment Co. 87,275 2,084,127 Brinker International Inc./1/ 78,959 2,045,038 Dollar Tree Stores Inc./1/ 92,065 2,029,113 Dun & Bradstreet Corp./1/ 59,871 2,012,264 Whole Foods Market Inc./1/ 46,320 1,984,349 Dreyer's Grand Ice Cream Inc. 28,026 1,957,896 PETsMART Inc./1/ 108,787 1,937,496 Fastenal Co. 61,145 1,930,959 Beckman Coulter Inc. 49,852 1,929,272 IVAX Corp./1/ 156,997 1,926,353 Diebold Inc. 58,074 1,911,796 Entercom Communications Corp./1/ 40,175 1,903,090 Henry Schein Inc./1/ 35,356 1,865,029 CH Robinson Worldwide Inc. 68,202 1,835,316 Coach Inc./1/ 71,474 1,829,734 Cooper Cameron Corp./1/ 43,728 1,826,081 Manpower Inc. 61,687 1,809,897 Gallagher (Arthur J.) & Co. 71,154 1,753,946 Equitable Resources Inc. 50,055 1,729,400 Ceridian Corp./1/ 119,634 1,704,784 International Speedway Corp. "A" 42,849 1,702,391 Outback Steakhouse Inc./1/ 61,837 1,699,281 DPL Inc. 101,942 1,676,946 Gentex Corp./1/ 61,065 1,660,357 Sonoco Products Co. 77,738 1,656,597 Dial Corp. (The) 76,485 1,641,368 Patterson-UTI Energy Inc./1/ 63,591 1,622,206 Apogent Technologies Inc./1/ 86,191 1,608,324 BISYS Group Inc. (The)/1/ 96,206 1,607,602 Abercrombie & Fitch Co. "A"/1/ 79,830 1,570,256 Eaton Vance Corp. 56,010 1,548,116 Lyondell Chemical Co. 128,768 1,537,490 Wilmington Trust Corp. 52,914 1,530,273 32 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES S&P MIDCAP 400/BARRA GROWTH INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------------- Neuberger Berman Inc. 56,403 $ 1,520,061 Valassis Communications Inc./1/ 42,999 1,507,975 Valspar Corp. (The) 40,338 1,504,607 Viad Corp. 71,912 1,469,162 Smucker (J.M.) Co. (The) 39,942 1,465,871 Teleflex Inc. 31,657 1,442,926 Pier 1 Imports Inc. 75,412 1,438,107 Intersil Corp. "A"/1/ 109,907 1,424,395 SICOR Inc./1/ 93,595 1,423,580 Charles River Laboratories International Inc./1/ 36,117 1,417,592 Investors Financial Services Corp. 52,000 1,407,640 Scholastic Corp./1/ 31,465 1,405,856 Hubbell Inc. "B" 47,647 1,385,098 Steris Corp./1/ 55,592 1,384,797 Harte-Hanks Inc. 74,226 1,381,346 Krispy Kreme Doughnuts Inc./1/ 43,869 1,371,345 Jacobs Engineering Group Inc./1/ 43,818 1,353,100 Network Associates Inc./1/ 125,571 1,334,820 Activision Inc./1/ 53,811 1,287,697 Reynolds & Reynolds Co. (The) "A" 56,015 1,256,977 Readers Digest Association Inc. (The) "A" 80,299 1,256,679 Education Management Corp./1/ 28,179 1,247,484 Lancaster Colony Corp. 29,494 1,242,287 Tootsie Roll Industries Inc. 41,649 1,237,808 Catalina Marketing Corp./1/ 44,073 1,237,570 Edwards Lifesciences Corp./1/ 48,175 1,232,798 Donaldson Co. Inc. 35,557 1,220,672 Cheesecake Factory (The)/1/ 40,837 1,218,168 Roslyn Bancorp Inc. 67,597 1,176,864 99 Cents Only Stores/1/ 56,500 1,169,550 GTECH Holdings Corp./1/ 46,262 1,148,223 Waddell & Reed Financial Inc. "A" 64,708 1,142,743 Investment Technology Group Inc./1/ 38,849 1,136,722 Vertex Pharmaceuticals Inc./1/ 61,232 1,132,180 Certegy Inc./1/ 55,876 1,123,108 IMC Global Inc. 92,730 1,117,397 BJ's Wholesale Club Inc./1/ 57,376 1,090,718 Westamerica Bancorp 27,043 1,089,292 Herman Miller Inc. 61,271 1,088,173 Church & Dwight Co. Inc. 32,102 1,064,181 Cytyc Corp./1/ 98,981 1,061,076 DeVry Inc./1/ 56,276 1,047,859 Blyth Inc. 37,364 1,042,456 Apria Healthcare Group Inc./1/ 44,039 1,037,559 Acxiom Corp./1/ 70,939 1,005,915 LifePoint Hospitals Inc./1/ 31,770 990,843 Timberland Co. "A"/1/ 30,279 959,239 Covance Inc./1/ 48,815 955,310 Lam Research Corp./1/ 102,681 913,861 National Instruments Corp./1/ 41,566 909,880 Henry (Jack) & Associates Inc. 72,902 906,172 Fairchild Semiconductor International Corp. "A"/1/ 94,247 892,519 FMC Technologies Inc./1/ 52,720 883,587 RF Micro Devices Inc./1/ 135,794 814,764 International Rectifier Corp./1/ 51,215 799,978 Copart Inc./1/ 73,351 795,858 AMETEK Inc. 26,573 773,806 Grant Prideco Inc./1/ 89,600 765,184 Varian Inc./1/ 27,363 755,492 Greater Bay Bancorp 41,302 751,283 Ferro Corp. 32,489 750,496 Cabot Microelectronics Corp./1/ 19,584 729,308 FMC Corp./1/ 28,232 728,950 American Eagle Outfitters Inc./1/ 58,139 701,156 Federal Signal Corp. 36,530 672,883 Cypress Semiconductor Corp./1/ 99,140 650,358 Nordson Corp. 26,982 640,553 Plantronics Inc./1/ 37,136 605,317 Semtech Corp./1/ 58,835 570,700 Gartner Inc. "B"/1/ 67,010 536,080 Price Communications Corp./1/ 44,038 497,629 Rollins Inc. 24,351 472,409 Micrel Inc./1/ 74,926 461,544 Papa John's International Inc./1/ 15,797 460,167 CSG Systems International Inc./1/ 41,679 454,301 Flowserve Corp./1/ 44,473 444,730 Solutia Inc. 84,459 440,876 VISX Inc./1/ 43,325 399,890 Schedules of Investments 33 Schedule of Investments (Unaudited) (Continued) iSHARES S&P MIDCAP 400/BARRA GROWTH INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- FEI Co./1/ 26,120 $ 377,434 Macromedia Inc./1/ 48,111 371,898 Sepracor Inc./1/ 67,684 354,664 Sotheby's Holdings Inc. "A"/1/ 49,515 346,605 GrafTech International Ltd./1/ 45,058 326,670 Advent Software Inc./1/ 26,494 303,356 Mentor Graphics Corp./1/ 53,022 258,747 Retek Inc./1/ 42,203 151,931 TOTAL COMMON STOCKS (Cost: $334,741,063) 269,671,189 SHORT TERM INSTRUMENTS - 9.17% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 20,419,789 20,419,789 Dreyfus Money Market Fund 1,148,889 1,148,889 Goldman Sachs Financial Square Prime Obligation Fund 656,182 656,182 Providian Temp Cash Money Market Fund 2,523,333 2,523,333 TOTAL SHORT TERM INSTRUMENTS (Cost: $24,748,193) 24,748,193 TOTAL INVESTMENTS IN SECURITIES - 109.15% (Cost $359,489,256) 294,419,382 Other Assets, Less Liabilities - (9.15%) (24,686,334) ------------ NET ASSETS - 100.00% $269,733,048 ============ /1/ Non-income earning securities. See notes to financial statements. 34 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) iSHARES S&P MIDCAP 400/BARRA VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- COMMON STOCKS - 99.92% M&T Bank Corp. 148,228 $ 11,681,849 National Commerce Financial Corp. 332,693 8,333,960 American Water Works Inc. 161,466 7,211,072 Golden State Bancorp Inc. 221,573 7,161,239 Tyson Foods Inc. "A" 569,685 6,625,437 Compass Bancshares Inc. 207,740 6,126,253 Lennar Corp. 104,364 5,821,424 Dean Foods Co./1/ 145,841 5,801,555 Banknorth Group Inc. 239,211 5,681,261 Ocean Energy Inc. 283,754 5,660,892 Old Republic International Corp. 194,270 5,513,383 Sovereign Bancorp Inc. 420,948 5,430,229 Mohawk Industries Inc./1/ 107,797 5,352,121 Pepco Holdings Inc. 263,424 5,255,309 Hibernia Corp. "A" 255,028 5,098,010 Radian Group Inc. 152,969 4,995,968 Republic Services Inc. "A"/1/ 263,934 4,961,959 Telephone & Data Systems Inc. 94,612 4,773,175 Energy East Corp. 233,048 4,616,681 Triad Hospitals Inc./1/ 119,659 4,541,059 Pioneer Natural Resources Co./1/ 187,247 4,540,740 Everest Re Group Ltd. 82,697 4,536,757 Valero Energy Corp. 170,658 4,517,317 Wisconsin Energy Corp. 185,657 4,511,465 Fidelity National Financial Inc. 154,036 4,425,454 Lear Corp./1/ 105,935 4,412,193 D.R. Horton Inc. 236,262 4,399,198 SCANA Corp. 168,963 4,396,417 First Virginia Banks Inc. 115,832 4,320,534 Mercantile Bankshares Corp. 112,407 4,290,575 Millennium Pharmaceuticals Inc./1/ 458,809 4,276,100 Edwards (A.G.) Inc. 128,121 4,097,310 PMI Group Inc. (The) 145,518 3,959,545 Belo (A.H.) Corp. 180,936 3,958,880 Associated Bancorp 121,902 3,867,950 Park Place Entertainment Corp./1/ 486,449 3,867,270 City National Corp. 80,653 3,772,141 Northeast Utilities 220,260 3,722,394 Mandalay Resort Group/1/ 110,273 3,699,659 Harris Corp. 107,031 3,584,468 PepsiAmericas Inc. 248,065 3,522,523 Astoria Financial Corp. 142,951 3,488,004 Protective Life Corp. 110,724 3,406,977 NSTAR 85,514 3,382,079 AdvancePCS/1/ 149,038 3,357,826 Unitrin Inc. 109,357 3,357,260 Hospitality Properties Trust 100,906 3,342,007 Constellation Brands Inc./1/ 144,071 3,328,040 Hispanic Broadcasting Corp./1/ 175,283 3,269,028 Omnicare Inc. 151,898 3,208,086 Bowater Inc. 89,083 3,144,630 Noble Energy Inc. 92,421 3,139,541 Bank of Hawaii Corp. 109,800 3,063,420 Leucadia National Corp. 89,254 3,034,636 Questar Corp. 131,935 3,013,395 ALLETE Inc. 137,404 2,967,926 Pentair Inc. 79,357 2,949,700 Packaging Corporation of America/1/ 168,245 2,945,970 FirstMerit Corp. 136,455 2,922,866 New Plan Excel Realty Trust 156,218 2,880,660 Puget Energy Inc. 141,117 2,880,198 Pennzoil-Quaker State Co. 130,126 2,858,868 Alliant Energy Corp. 146,615 2,822,339 Pride International Inc./1/ 214,762 2,791,906 AGCO Corp./1/ 120,182 2,788,222 Smithfield Foods Inc./1/ 176,334 2,768,444 Helmerich & Payne Inc. 80,589 2,758,561 Varco International Inc./1/ 155,950 2,638,674 Tidewater Inc. 97,632 2,635,088 MDU Resources Group Inc. 115,222 2,630,518 Dole Food Co. 90,344 2,622,686 E*TRADE Group Inc./1/ 589,191 2,621,900 RPM International Inc. 185,165 2,603,420 Webster Financial Corp. 77,318 2,596,338 National Fuel Gas Co. 129,262 2,568,436 Martin Marietta Materials Inc. 78,708 2,563,520 American Financial Group Inc. 111,101 2,557,545 National-Oilwell Inc./1/ 130,608 2,531,183 Hawaiian Electric Industries Inc. 58,659 2,528,203 StanCorp Financial Group Inc. 47,734 2,525,129 CNF Inc. 79,357 2,491,016 Clayton Homes Inc. 222,049 2,438,098 Saks Inc./1/ 229,933 2,421,194 HON Industries Inc. 95,056 2,419,175 HCC Insurance Holdings Inc. 100,467 2,412,213 Vectren Corp. 109,270 2,403,940 Tech Data Corp./1/ 90,990 2,402,136 Colonial BancGroup Inc. (The) 189,382 2,348,337 Schedules of Investments 35 Schedule of Investments (Unaudited) (Continued) iSHARES S&P MIDCAP 400/BARRA VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Lee Enterprises Inc. 71,369 $ 2,345,185 Lubrizol Corp. 82,922 2,344,205 Independence Community Bank Corp. 92,234 2,314,151 Barnes & Noble Inc./1/ 108,665 2,299,351 3Com Corp./1/ 578,030 2,277,438 Vishay Intertechnology Inc./1/ 257,320 2,264,416 Swift Transportation Co. Inc./1/ 138,112 2,154,547 BorgWarner Inc. 42,962 2,132,634 OGE Energy Corp. 125,985 2,125,367 Borders Group Inc./1/ 131,769 2,081,950 Avnet Inc. 192,906 2,081,456 Furniture Brands International Inc./1/ 90,671 2,080,899 Cabot Corp. 99,052 2,080,092 ArvinMeritor Inc. 109,515 2,047,930 Arrow Electronics Inc./1/ 161,876 2,044,494 Neiman-Marcus Group Inc. "A"/1/ 77,329 2,029,886 Superior Industries International Inc. 42,802 2,015,118 AGL Resources Inc. 90,439 1,997,798 AmeriCredit Corp./1/ 245,555 1,981,629 Provident Financial Group Inc. 78,540 1,970,569 Payless ShoeSource Inc./1/ 36,447 1,968,502 Pittston Brink's Group 87,419 1,958,186 Forest Oil Corp./1/ 75,746 1,931,523 CBRL Group Inc. 84,545 1,929,317 LaBranche & Co. Inc./1/ 95,109 1,925,957 Extended Stay America Inc./1/ 151,079 1,918,703 Great Plains Energy Inc. 99,798 1,911,132 MONY Group Inc. (The) 76,911 1,897,394 Media General Inc. "A" 37,298 1,896,603 Interstate Bakeries Corp. 70,946 1,885,035 Rayonier Inc. 44,769 1,876,269 WGL Holdings Inc. 78,272 1,871,484 ONEOK Inc. 97,386 1,840,595 Crompton Corp. 183,131 1,840,467 Precision Castparts Corp. 84,281 1,827,212 Sybase Inc./1/ 156,437 1,817,798 AmerUs Group Co. 63,991 1,814,785 WPS Resources Corp. 51,106 1,811,197 Carlisle Companies Inc. 48,970 1,796,220 Storage Technology Corp./1/ 170,722 1,794,288 York International Corp. 63,586 1,793,125 DQE Inc. 119,365 1,790,475 Kennametal Inc. 55,493 1,782,435 IndyMac Bancorp Inc./1/ 92,226 1,777,195 Harsco Corp. 65,244 1,773,984 Advanced Fibre Communications Inc./1/ 133,130 1,766,635 Integrated Device Technology Inc./1/ 166,497 1,738,229 Claire's Stores Inc. 78,631 1,714,156 Albemarle Corp. 67,153 1,698,299 Western Gas Resources Inc. 53,128 1,660,250 Emmis Communications Corp./1/ 85,448 1,623,512 Sensient Technologies Corp. 76,241 1,610,972 Imation Corp./1/ 56,415 1,598,237 Ohio Casualty Corp./1/ 97,681 1,590,247 GATX Corp. 78,831 1,560,854 Airgas Inc./1/ 114,775 1,506,996 Olin Corp. 91,204 1,493,922 Hunt (J.B.) Transport Services Inc./1/ 63,178 1,487,842 Universal Corp. 42,195 1,479,779 IDACORP Inc. 60,731 1,477,585 Alexander & Baldwin Inc. 66,262 1,474,329 Cree Inc./1/ 117,105 1,463,812 SanDisk Corp./1/ 110,781 1,452,339 Banta Corp. 40,698 1,444,779 CheckFree Corp./1/ 125,695 1,430,409 Longs Drug Stores Corp. 61,679 1,424,168 Arch Coal Inc. 84,328 1,395,628 Cytec Industries Inc./1/ 63,510 1,394,045 Bob Evans Farms Inc. 57,304 1,358,105 PacifiCare Health Systems Inc. "A"/1/ 57,183 1,320,355 Potlatch Corp. 45,891 1,316,154 Callaway Golf Co. 122,445 1,273,428 AK Steel Holding Corp./1/ 173,764 1,270,215 Tecumseh Products Co. "A" 29,787 1,249,863 PNM Resources Inc. 62,989 1,247,182 Perrigo Co./1/ 116,705 1,240,574 Kelly Services Inc. "A" 57,173 1,238,939 Trinity Industries Inc. 73,944 1,217,118 Fuller (H.B.) Co. 45,687 1,215,274 Silicon Valley Bancshares/1/ 71,585 1,211,934 ICN Pharmaceuticals Inc. 133,238 1,207,136 Titan Corp. (The)/1/ 125,474 1,204,550 Minerals Technologies Inc. 32,452 1,202,996 Protein Design Labs Inc./1/ 143,378 1,190,037 Aquila Inc. 290,127 1,189,521 36 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES S&P MIDCAP 400/BARRA VALUE INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- KEMET Corp./1/ 138,763 $ 1,186,424 Wallace Computer Services Inc. 66,937 1,181,438 Westar Energy Inc. 115,221 1,159,123 Ruddick Corp. 74,804 1,136,273 Black Hills Corp. 43,207 1,131,591 Granite Construction Inc. 66,826 1,101,292 Lattice Semiconductor Corp./1/ 176,642 1,098,713 Polycom Inc./1/ 160,674 1,090,976 United Rentals Inc./1/ 123,313 1,040,762 Modine Manufacturing Co. 54,106 1,029,096 Allmerica Financial Corp. 85,466 1,025,592 Cleco Corp. 75,691 1,019,558 Macrovision Corp./1/ 82,054 1,003,520 Sierra Pacific Resources 164,393 1,002,797 McDATA Corp. "A"/1/ 182,557 991,285 Albany International Corp. "A" 51,992 986,808 Kaydon Corp. 49,016 982,281 Avocent Corp./1/ 72,426 969,060 Horace Mann Educators Corp. 65,745 966,452 Internet Security Systems Inc./1/ 77,899 959,716 MPS Group Inc./1/ 165,001 957,006 ADTRAN Inc./1/ 60,802 948,511 Bandag Inc. 30,756 938,058 Sylvan Learning Systems Inc./1/ 64,864 887,340 Airborne Inc. 77,876 883,114 Hanover Compressor Co./1/ 105,612 876,580 Sequa Corp. "A"/1/ 16,799 875,228 EGL Inc./1/ 78,819 867,797 Overseas Shipholding Group Inc. 55,393 846,405 Credence Systems Corp./1/ 97,541 844,705 Keane Inc./1/ 121,538 820,382 Schulman (A.) Inc. 47,276 819,293 Glatfelter Co. 70,122 809,909 Atmel Corp./1/ 751,478 796,567 Wausau-Mosinee Paper Corp. 82,923 763,721 Alaska Air Group Inc./1/ 42,680 755,436 TriQuint Semiconductor Inc./1/ 212,409 749,804 Ascential Software Corp./1/ 399,038 741,413 Dycom Industries Inc./1/ 76,937 704,743 Broadwing Inc./1/ 351,944 696,849 Newport Corp./1/ 61,351 692,039 CommScope Inc./1/ 99,259 672,976 Plexus Corp./1/ 67,492 624,301 Longview Fibre Co. 82,065 569,531 Quantum Corp./1/ 253,233 559,645 Unifi Inc./1/ 86,455 542,073 Six Flags Inc./1/ 148,446 522,530 Legato Systems Inc./1/ 184,483 508,804 Incyte Genomics Inc./1/ 108,203 502,062 InFocus Corp./1/ 63,138 481,112 Korn/Ferry International/1/ 60,735 476,162 NCO Group Inc./1/ 41,608 473,915 Carpenter Technology Corp. 35,691 463,983 Stewart & Stevenson Services Inc. 45,614 446,698 Wind River Systems Inc./1/ 126,653 407,823 LTX Corp./1/ 78,672 358,744 Powerwave Technologies Inc./1/ 104,779 355,201 Transaction Systems Architects Inc. "A"/1/ 56,715 351,633 Cirrus Logic Inc./1/ 133,532 340,507 RSA Security Inc./1/ 90,579 304,345 Sykes Enterprises Inc./1/ 64,678 272,294 Metris Companies Inc. 92,369 213,372 Quanta Services Inc./1/ 97,040 201,843 Atlas Air Worldwide Holdings Inc./1/ 60,413 145,595 MIPS Technologies Inc. "B"/1/ 60,766 74,135 TOTAL COMMON STOCKS (Cost: $650,237,534) 534,097,406 SHORT TERM INSTRUMENTS - 7.69% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 34,774,078 34,774,078 Dreyfus Money Market Fund 1,901,235 1,901,235 Goldman Sachs Financial Square Prime Obligation Fund 923,759 923,759 Providian Temp Cash Money Market Fund 3,531,852 3,531,852 TOTAL SHORT TERM INSTRUMENTS (Cost: $41,130,924) 41,130,924 TOTAL INVESTMENTS IN SECURITIES - 107.61% (Cost $691,368,458) 575,228,330 Other Assets, Less Liabilities - (7.61%) (40,686,928) ------------ NET ASSETS - 100.00% $534,541,402 ============ /1/ Non-income earning securities. See notes to financial statements. Schedules of Investments 37 Schedule of Investments (Unaudited) iSHARES S&P SMALLCAP 600 INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------------- COMMON STOCKS - 99.93% Alliant Techsystems Inc./1/ 126,179 $ 8,737,896 XTO Energy Inc. 411,596 8,482,994 NVR Inc./1/ 25,162 7,544,322 Cephalon Inc./1/ 182,703 7,457,936 Pogo Producing Co. 201,456 6,861,591 Coventry Health Care Inc./1/ 198,406 6,448,195 Cullen/Frost Bankers Inc. 169,245 5,779,717 Mid Atlantic Medical Services Inc./1/ 154,323 5,586,493 Harman International Industries Inc. 107,816 5,579,478 Fair Isaac and Co. Inc. 169,127 5,530,453 Zebra Technologies Corp. "A"/1/ 104,677 5,515,442 Corinthian Colleges Inc./1/ 142,356 5,372,515 Renal Care Group Inc./1/ 160,701 5,285,456 Toll Brothers Inc./1/ 235,210 5,113,465 Performance Food Group Co./1/ 148,616 5,046,999 O'Reilly Automotive Inc./1/ 175,725 5,029,250 Accredo Health Inc./1/ 103,799 4,949,136 Newfield Exploration Co./1/ 147,315 4,948,311 First American Corp. 237,259 4,847,201 Polaris Industries Inc. 76,548 4,745,976 Washington Federal Inc. 210,482 4,696,906 Philadelphia Suburban Corp. 227,985 4,628,096 Techne Corp./1/ 137,936 4,522,921 La-Z-Boy Inc. 193,416 4,487,251 Chico's FAS Inc./1/ 276,400 4,403,052 Raymond James Financial Inc. 160,699 4,350,122 Diagnostic Products Corp. 94,373 4,341,158 First Midwest Bancorp Inc. 158,642 4,261,124 Whitney Holding Corp. 132,236 4,219,651 Medicis Pharmaceutical Corp. "A"/1/ 101,967 4,167,391 Ethan Allen Interiors Inc. 128,533 4,159,328 Cerner Corp./1/ 117,554 4,139,076 Scotts Co. (The) "A"/1/ 98,459 4,104,756 United Bancshares Inc. 140,918 4,088,031 Regis Corp. 143,633 4,063,378 Applebee's International Inc. 185,326 4,062,346 Southwest Bancorp of Texas Inc./1/ 111,339 4,053,853 Hilb Rogal & Hamilton Co. 97,114 4,005,953 OM Group Inc. 93,515 4,002,442 Hudson United Bancorp 149,826 3,985,372 Ruby Tuesday Inc. 211,655 3,974,881 Graco Inc. 157,699 3,910,935 Werner Enterprises Inc. 211,721 3,891,432 Piedmont Natural Gas Co. 108,433 3,846,119 Shurgard Storage Centers Inc. "A" 118,653 3,751,808 Priority Healthcare Corp. "B"/1/ 145,995 3,679,074 Take-Two Interactive Software Inc./1/ 126,749 3,675,721 Community First Bankshares Inc. 131,223 3,658,497 Roper Industries Inc. 103,606 3,574,407 Pharmaceutical Product Development Inc./1/ 183,198 3,543,049 Respironics Inc./1/ 109,936 3,519,051 Invacare Corp. 102,692 3,517,201 Staten Island Bancorp Inc. 200,468 3,488,143 IDEXX Laboratories Inc./1/ 110,465 3,418,671 Zale Corp./1/ 113,257 3,415,831 Jeffries Group Inc. 89,007 3,396,507 Corn Products International Inc. 118,019 3,393,046 AnnTaylor Stores Corp./1/ 147,115 3,388,059 First Bancorp 88,232 3,363,404 CACI International Inc. "A"/1/ 94,383 3,345,877 Timken Co. (The) 199,662 3,344,339 Arbitron Inc./1/ 97,482 3,324,136 UGI Corp. 91,376 3,321,518 Thor Industries Inc. 94,287 3,277,416 Commercial Federal Corp. 150,218 3,270,246 Ryland Group Inc. 87,325 3,245,870 Downey Financial Corp. 93,733 3,210,355 AptarGroup Inc. 119,273 3,204,866 Waste Connections Inc./1/ 91,886 3,196,714 Cambrex Corp. 86,193 3,171,902 Chittenden Corp. 106,973 3,166,401 Oshkosh Truck Corp. 56,082 3,163,025 CEC Entertainment Inc./1/ 91,874 3,133,822 M.D.C. Holdings Inc. 88,530 3,125,109 Global Payments Inc. 121,994 3,123,046 Heartland Express Inc./1/ 166,009 3,111,009 South Financial Group Inc. (The) 146,238 3,084,159 38 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES S&P SMALLCAP 600 INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------------- Sonic Corp./1/ 133,505 $ 3,083,966 Idex Corp. 107,616 3,072,437 ResMed Inc./1/ 107,221 3,066,521 Fossil Inc./1/ 152,604 3,059,710 Essex Property Trust Inc. 60,536 2,992,900 Tom Brown Inc./1/ 130,205 2,981,695 FactSet Research Systems Inc. 111,599 2,962,953 Jack in the Box Inc./1/ 129,849 2,960,557 Atmos Energy Corp. 137,123 2,948,145 New Jersey Resources Corp. 89,302 2,938,036 Mueller Industries Inc./1/ 113,310 2,934,729 Energen Corp. 114,216 2,890,807 Florida Rock Industries Inc. 94,449 2,886,361 United Stationers Inc./1/ 109,548 2,881,112 ITT Educational Services Inc./1/ 152,255 2,857,826 NBTY Inc./1/ 219,780 2,852,744 Stone Energy Corp./1/ 87,440 2,841,800 Yellow Corp./1/ 96,241 2,839,879 Susquehanna Bancshares Inc. 130,747 2,830,673 Unit Corp./1/ 143,526 2,748,523 Province Healthcare Co./1/ 160,247 2,748,236 SEACOR SMIT Inc./1/ 67,022 2,747,232 THQ Inc./1/ 130,940 2,723,552 Briggs & Stratton Corp. 71,808 2,695,672 Syncor International Corp./1/ 83,890 2,693,708 Smith (A.O.) Corp. "B" 94,579 2,687,935 Colonial Properties Trust 74,232 2,685,714 Linens `N Things Inc./1/ 146,019 2,682,369 Burlington Coat Factory Warehouse Corp. 147,579 2,656,422 Cooper Companies Inc. 50,541 2,653,403 East West Bancorp Inc. 78,364 2,645,569 Landstar System Inc./1/ 53,933 2,644,065 PRG-Schultz International Inc./1/ 213,279 2,640,394 Harland (John H.) Co. 97,169 2,638,138 Pediatrix Medical Group Inc./1/ 84,866 2,629,997 Too Inc./1/ 112,508 2,619,186 PolyOne Corp. 302,754 2,600,657 Patina Oil & Gas Corp. 90,942 2,591,847 Panera Bread Co. "A"/1/ 95,798 2,586,546 UICI/1/ 157,998 2,569,047 Evergreen Resources Inc./1/ 62,648 2,567,315 USFreightways Corp. 89,221 2,558,858 UCBH Holdings Inc. 65,074 2,556,757 CH Energy Group Inc. 54,356 2,550,927 Anixter International Inc./1/ 123,810 2,550,486 Simpson Manufacturing Co. Inc./1/ 80,945 2,540,864 TrustCo Bank Corp. NY 239,941 2,538,096 CLARCOR Inc. 82,467 2,531,737 Fred's Inc. 84,361 2,518,851 Lennox International Inc. 190,158 2,515,790 Standard-Pacific Corp. 107,097 2,503,928 SkyWest Inc. 189,718 2,485,306 CAL Dive International Inc./1/ 123,038 2,481,307 Delphi Financial Group Inc. "A" 68,066 2,478,964 Northwest Natural Gas Co. 84,375 2,477,250 Kansas City Southern Industries Inc./1/ 199,478 2,473,527 Mentor Corp. 77,252 2,462,794 US Oncology Inc./1/ 303,651 2,462,610 Winnebago Industries Inc. 62,293 2,462,442 Brady Corp. "A" 76,421 2,460,756 EMCOR Group Inc./1/ 49,339 2,452,148 Georgia Gulf Corp. 106,374 2,432,773 Southwest Gas Corp. 109,015 2,425,584 Central Parking Corp. 119,353 2,403,769 P.F. Chang's China Bistro Inc./1/ 82,242 2,387,485 Delta & Pine Land Co. 127,213 2,383,972 Manitowoc Co. Inc. (The) 87,036 2,380,435 MAF Bancorp Inc. 76,800 2,373,120 Arkansas Best Corp./1/ 82,375 2,363,421 Roadway Corp. 64,328 2,359,551 G&K Services Inc. "A" 68,731 2,326,544 Hughes Supply Inc. 79,209 2,308,150 Capital Automotive 92,084 2,300,258 Reliance Steel & Aluminum Co. 105,233 2,299,341 ABM Industries Inc. 162,994 2,298,215 Toro Co. 40,490 2,277,563 Cabot Oil & Gas Corp. "A" 105,672 2,271,948 Vintage Petroleum Inc. 209,700 2,264,760 Standard Register Co. (The) 92,890 2,229,360 Pacific Sunwear of California Inc./1/ 109,003 2,219,301 St. Mary Land & Exploration Co. 92,379 2,207,858 Schedules of Investments 39 Schedule of Investments (Unaudited) (Continued) iSHARES S&P SMALLCAP 600 INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------------------- Argosy Gaming Co./1/ 95,767 $ 2,198,810 Black Box Corp./1/ 66,155 2,196,346 Watson Wyatt & Co. Holdings/1/ 109,658 2,193,160 Kroll Inc./1/ 110,583 2,192,861 Kilroy Realty Corp. 92,194 2,185,920 American Financial Holdings Inc. 70,921 2,156,708 SCP Pool Corp./1/ 78,658 2,156,016 Baldor Electric Co. 112,835 2,155,149 MacDermid Inc. 107,071 2,136,066 Tredegar Corp. 127,242 2,131,304 American Italian Pasta Co. "A"/1/ 59,596 2,126,981 Christopher & Banks Corp./1/ 84,578 2,124,599 Ralcorp Holdings Inc./1/ 99,423 2,114,727 Philadelphia Consolidated Holding Corp./1/ 71,630 2,113,085 ADVO Inc./1/ 66,448 2,109,724 Pinnacle Systems Inc./1/ 194,958 2,105,546 Pep Boys-Manny, Moe & Jack Inc. 170,751 2,091,700 Landry's Restaurants Inc. 92,483 2,089,191 Cymer Inc./1/ 112,072 2,089,022 Oceaneering International Inc./1/ 81,624 2,077,331 DRS Technologies Inc./1/ 55,688 2,072,707 Men's Wearhouse Inc. (The)/1/ 140,423 2,064,218 Southern Union Co./1/ 182,618 2,063,585 Steel Dynamics Inc./1/ 157,320 2,059,319 Skyworks Solutions Inc./1/ 453,357 2,053,707 AmSurg Corp./1/ 67,807 2,045,737 Plains Resource Inc./1/ 79,211 2,042,060 Cognex Corp./1/ 146,709 2,040,722 Russ Berrie & Co. Inc. 67,807 2,034,888 Hyperion Solutions Corp./1/ 110,628 2,030,024 Wolverine World Wide Inc. 135,262 2,028,930 Curtiss Wright Corp. 33,713 2,015,700 LandAmerica Financial Group Inc. 61,276 2,015,368 Technitrol Inc. 133,006 1,988,440 Engineered Support Systems Inc. 34,687 1,978,546 El Paso Electric Co./1/ 166,140 1,973,743 Regeneron Pharmaceuticals Inc./1/ 146,170 1,973,295 Shaw Group Inc. (The)/1/ 138,852 1,971,698 Haemonetics Corp./1/ 82,615 1,960,454 Flir Systems Inc./1/ 55,651 1,947,229 Teledyne Technologies Inc./1/ 106,209 1,928,755 DIANON Systems Inc./1/ 40,712 1,926,085 Cost Plus Inc./1/ 71,678 1,924,554 Kellwood Co. 84,033 1,920,994 Paxar Corp./1/ 131,885 1,917,608 Monaco Coach Corp./1/ 95,525 1,913,366 CONMED Corp./1/ 94,853 1,911,288 Casey's General Store Inc. 164,764 1,903,024 Sterling Bancshares Inc. 145,423 1,900,679 Selective Insurance Group Inc. 86,971 1,889,880 Financial Federal Corp./1/ 59,197 1,885,424 Quanex Corp. 54,059 1,875,847 Dress Barn Inc./1/ 120,548 1,875,727 Hot Topic Inc./1/ 104,000 1,875,120 Glenborough Realty Trust Inc. 91,747 1,862,464 BARRA Inc./1/ 67,616 1,847,269 Valmont Industries Inc. 79,001 1,844,673 Dime Community Bancshares 86,049 1,843,170 Analogic Corp. 43,869 1,837,672 Varian Semiconductor Equipment Associates Inc./1/ 111,268 1,829,246 Orthodontic Centers of America Inc./1/ 169,981 1,818,797 CARBO Ceramics Inc. 50,626 1,814,436 Kirby Corp./1/ 79,799 1,805,053 SurModics Inc./1/ 56,726 1,802,185 Dionex Corp./1/ 70,116 1,792,165 Provident Bankshares Corp. 82,776 1,786,306 Woodward Governor Co. 37,611 1,782,686 NDCHealth Corp. 114,393 1,778,811 Avista Corp. 158,593 1,776,242 American Management Systems Inc./1/ 138,983 1,769,254 RLI Corp. 32,922 1,766,265 Sybron Dental Specialties Inc./1/ 126,009 1,762,866 Quiksilver Inc./1/ 78,001 1,762,043 Ryan's Family Steak Houses Inc./1/ 144,782 1,761,997 Jo-Ann Stores Inc./1/ 62,661 1,757,014 Coherent Inc./1/ 95,914 1,750,431 Rock-Tenn Co. "A" 113,076 1,743,632 Group 1 Automotive Inc./1/ 76,418 1,707,942 40 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES S&P SMALLCAP 600 INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------------- Sierra Health Services Inc./1/ 94,853 $ 1,701,663 Rare Hospitality International Inc./1/ 72,618 1,700,714 UIL Holdings Corp. 47,958 1,700,111 UniSource Energy Corp. 111,422 1,699,186 Mercury Computer Systems Inc./1/ 71,879 1,696,344 CUNO Inc./1/ 54,952 1,695,269 Texas Industries Inc. 69,707 1,692,486 Benchmark Electronics Inc./1/ 80,136 1,686,863 Acuity Brands Inc. 137,259 1,682,795 Commercial Metals Co. 93,820 1,681,254 ICU Medical Inc./1/ 45,970 1,678,824 IHOP Corp./1/ 69,374 1,671,913 Anchor BanCorp Wisconsin Inc. 82,746 1,671,469 CDI Corp./1/ 63,778 1,667,795 Hain Celestial Group Inc./1/ 112,513 1,648,315 Aaron Rents Inc. "B" 71,488 1,644,224 URS Corp./1/ 99,059 1,641,408 Zenith National Insurance Corp. 61,966 1,637,142 Inter-Tel Inc. 80,375 1,635,631 Aztar Corp./1/ 123,802 1,635,424 Alpharma Inc. "A" 170,071 1,632,682 Libbey Inc. 51,108 1,628,301 MAXIMUS Inc./1/ 72,209 1,617,482 Owens & Minor Inc. 113,163 1,617,099 Sunrise Assisted Living Inc./1/ 75,175 1,612,504 Kronos Inc./1/ 65,367 1,609,989 SERENA Software Inc./1/ 133,877 1,606,524 Cato Corp. "A" 84,512 1,604,038 Massey Energy Co. 248,602 1,603,483 Seacoast Financial Services Corp. 79,779 1,601,165 Russell Corp. 106,565 1,597,409 Axcelis Technologies Inc./1/ 325,037 1,586,181 INAMED Corp./1/ 68,915 1,585,045 Boston Private Financial Holdings Inc. 74,249 1,581,504 WD-40 Co. 54,167 1,565,426 Information Holdings Inc./1/ 72,293 1,565,143 Gymboree Corp./1/ 95,700 1,560,867 Adaptec Inc./1/ 351,906 1,551,905 Triarc Companies Inc./1/ 68,015 1,543,260 Insight Enterprises Inc./1/ 151,671 1,539,461 Lone Star Steakhouse & Saloon Inc. 72,711 1,526,204 Action Performance Companies Inc./1/ 59,303 1,524,087 AmeriPath Inc./1/ 101,278 1,509,042 School Specialty Inc./1/ 60,066 1,502,251 Exar Corp./1/ 130,021 1,501,743 WMS Industries Inc./1/ 106,455 1,501,016 FirstFed Financial Corp./1/ 57,336 1,476,402 Triumph Group Inc./1/ 52,575 1,472,100 Tower Automotive Inc./1/ 218,522 1,464,097 EDO Corp. 65,228 1,461,759 Laclede Group Inc. (The) 62,677 1,460,374 Armor Holdings Inc./1/ 97,352 1,459,306 United Natural Foods Inc./1/ 63,175 1,454,920 eFunds Corp./1/ 154,710 1,451,335 Watts Industries Inc. "A" 88,160 1,445,824 Wellman Inc. 105,824 1,444,498 Progress Software Corp./1/ 119,156 1,441,788 DSP Group Inc./1/ 89,734 1,441,038 GenCorp. Inc. 143,171 1,438,869 OshKosh B'Gosh Inc. "A" 41,873 1,438,756 ATMI Inc./1/ 101,494 1,431,065 Regal-Beloit Corp. 83,013 1,420,352 Biosite Inc./1/ 48,817 1,415,205 Thomas Industries Inc. 56,680 1,405,664 Tetra Tech Inc./1/ 175,718 1,403,987 Presidential Life Corp. 97,464 1,403,482 Ionics Inc./1/ 58,205 1,385,861 Atlantic Coast Airlines Holdings Inc./1/ 149,795 1,385,604 Spherion Corp./1/ 195,344 1,377,175 Coca-Cola Bottling Co. Consolidated 29,167 1,367,932 Hutchinson Technology Inc./1/ 84,084 1,357,957 Electro Scientific Industries Inc./1/ 91,288 1,353,801 Riggs National Corp. 94,665 1,352,763 DuPont Photomasks Inc./1/ 59,348 1,351,947 MICROS Systems Inc./1/ 58,238 1,350,539 ChemFirst Inc. 46,934 1,349,822 Enzo Biochem Inc./1/ 94,389 1,349,763 Atwood Oceanics Inc./1/ 45,927 1,343,365 Schedules of Investments 41 Schedule of Investments (Unaudited) (Continued) iSHARES S&P SMALLCAP 600 INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------------- Hooper Holmes Inc. 216,444 $ 1,341,953 Viasys Healthcare Inc./1/ 86,514 1,332,316 Offshore Logistics Inc./1/ 73,974 1,328,573 Datascope Corp. 49,043 1,327,104 Checkpoint Systems Inc./1/ 106,784 1,318,782 RehabCare Group Inc./1/ 56,980 1,317,947 American States Water Co. 50,228 1,316,978 Arch Chemicals Inc. 74,226 1,315,285 K-Swiss Inc. "A" 61,328 1,310,579 Forward Air Corp./1/ 72,204 1,306,892 Manhattan Associates Inc./1/ 95,113 1,285,928 Pre-Paid Legal Services Inc./1/ 64,601 1,284,268 Brooks-PRI Automation Inc./1/ 111,643 1,278,312 Marcus Corp. 97,372 1,275,573 Vital Sign Inc. 42,861 1,273,400 Duane Reade Inc./1/ 79,242 1,267,872 Insituform Technologies Inc. "A"/1/ 88,167 1,265,108 C&D Technologies Inc. 86,230 1,264,132 Stewart Information Services Corp./1/ 58,907 1,257,664 Watsco Inc. 87,758 1,254,939 Barnes Group Inc. 62,431 1,254,239 CIBER Inc./1/ 214,908 1,248,615 ShopKo Stores Inc./1/ 95,454 1,246,629 Myers Industries Inc. 99,116 1,241,924 International Multifoods Corp./1/ 63,266 1,240,014 Itron Inc./1/ 67,182 1,235,477 Lance Inc. 96,407 1,229,189 Prime Hospitality Corp./1/ 149,749 1,227,942 Rogers Corp./1/ 52,492 1,225,688 FileNET Corp./1/ 118,216 1,223,536 Remington Oil & Gas Corp./1/ 86,104 1,214,066 Fremont General Corp. 246,688 1,208,771 Maverick Tube Corp./1/ 134,534 1,193,317 SOURCECORP Inc./1/ 57,885 1,181,433 Griffon Corp./1/ 110,465 1,176,452 O'Charley's Inc./1/ 62,481 1,170,956 Verity Inc./1/ 117,393 1,168,060 Nautica Enterprises Inc./1/ 111,594 1,160,578 Phillips-Van Heusen Corp. 91,697 1,155,382 Esterline Technologies Corp./1/ 68,897 1,146,446 Power Integrations Inc./1/ 93,890 1,144,519 JLG Industries Inc. 141,764 1,141,200 NUI Corp. 52,319 1,130,090 Lone Star Technologies Inc./1/ 94,699 1,122,183 Universal Forest Products Inc. 59,500 1,119,790 Bowne & Co. Inc. 111,206 1,112,060 Veritas DGC Inc./1/ 102,871 1,112,036 Belden Inc. 82,740 1,110,371 Jill /J./ Group Inc. (The)/1/ 63,632 1,108,469 Stride Rite Corp. 139,325 1,102,061 ElkCorp 64,417 1,099,598 Shuffle Master Inc./1/ 59,083 1,099,535 Methode Electronics Inc. "A" 119,599 1,097,919 SPS Technologies Inc./1/ 43,727 1,090,114 Sturm Ruger & Co. Inc. 89,327 1,089,789 Park Electrochemical Corp. 64,830 1,082,661 Imagistics International Inc./1/ 62,378 1,082,258 Bally Total Fitness Holding Corp./1/ 109,159 1,081,766 Applied Industrial Technologies Inc. 63,710 1,079,885 J&J Snack Foods Corp./1/ 29,272 1,078,673 Frontier Oil Corp. 86,656 1,074,534 Great Atlantic & Pacific Tea Co./1/ 127,366 1,067,327 PolyMedica Corp./1/ 40,169 1,061,265 Photronics Inc./1/ 105,112 1,057,427 First Republic Bank/1/ 48,569 1,056,376 Schweitzer-Mauduit International Inc. 49,396 1,054,605 Photon Dynamics Inc./1/ 56,385 1,050,453 Arctic Cat Inc. 74,988 1,046,833 Brown Shoe Co. Inc. 58,291 1,043,409 Veeco Instruments Inc./1/ 96,408 1,041,206 StarTek Inc./1/ 46,870 1,031,609 Apogee Enterprises Inc. 94,077 1,029,202 Southwestern Energy Co./1/ 85,044 1,020,528 Hancock Fabrics Inc. 62,557 1,010,296 Steak n Shake Company (The)/1/ 91,675 1,008,425 Vicor Corp./1/ 140,876 1,007,263 Aeroflex Inc./1/ 199,278 1,004,361 Chemed Corp. 32,554 1,001,687 Genesco Inc./1/ 72,557 1,001,287 42 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES S&P SMALLCAP 600 INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------------- Wet Seal Inc. "A"/1/ 99,904 $ 999,040 4Kids Entertainment Inc./1/ 41,836 992,768 Dril-Quip Inc./1/ 57,411 967,375 Advanced Energy Industries Inc./1/ 106,448 947,387 Tetra Technologies Inc./1/ 46,861 944,249 Lindsay Manufacturing Co. 38,915 942,910 Intermagnetics General Corp./1/ 54,977 938,457 Trimble Navigation Ltd./1/ 94,207 932,649 Lawson Products Inc. 31,976 932,100 Swift Energy Co./1/ 89,135 927,004 DIMON Inc. 148,215 924,862 Noven Pharmaceuticals Inc./1/ 74,768 915,160 New England Business Service Inc. 43,215 913,997 Heidrick & Struggles International Inc./1/ 60,053 912,205 Kaman Corp. "A" 74,366 910,984 Advanced Medical Optics Inc./1/ 95,384 907,102 Cable Design Technologies Corp./1/ 147,194 900,827 Avid Technology Inc./1/ 87,140 897,542 Haverty Furniture Companies Inc. 71,715 896,438 ESS Technology Inc./1/ 145,458 894,567 Fleming Companies Inc. 178,732 893,660 Prima Energy Corp./1/ 42,555 892,378 Children's Place Retail Stores Inc. (The)(1) 87,909 887,881 NorthWestern Corp. 90,953 887,701 Advanced Marketing Services Inc. 63,810 879,940 Deltic Timber Corp. 39,555 869,419 Pegasus Solutions Inc./1/ 82,343 868,719 ArthroCare Corp./1/ 71,672 868,665 Caraustar Industries Inc. 92,504 864,912 Robbins & Myers Inc. 46,347 864,372 Jakks Pacific Inc./1/ 77,267 859,132 Stillwater Mining Co./1/ 143,154 858,924 Labor Ready Inc./1/ 135,804 858,281 Midway Games Inc./1/ 155,466 851,954 Buckeye Technologies Inc./1/ 115,548 849,278 Actel Corp./1/ 81,193 844,407 ANSYS Inc./1/ 48,767 840,255 Helix Technology Corp. 86,691 836,568 Dendrite International Inc./1/ 132,488 835,999 Gardner Denver Inc./1/ 52,702 827,948 Standex International Corp. 40,190 815,053 Sola International Inc./1/ 81,085 814,904 Cleveland-Cliffs Inc. 33,782 812,457 Standard Microsystems Corp./1/ 53,145 812,109 Input Output Inc./1/ 169,218 810,554 Stein Mart Inc./1/ 138,107 806,545 Coachmen Industries Inc. 53,458 802,405 Kopin Corp./1/ 230,252 801,277 Fleetwood Enterprises Inc./1/ 116,971 788,385 MemberWorks Inc./1/ 44,680 778,326 Bel Fuse Inc. "B" 36,240 777,348 Cohu Inc. 68,652 775,768 Systems & Computer Technology Corp./1/ 110,518 773,626 Consolidated Graphics Inc./1/ 43,905 770,533 Volt Information Sciences Inc./1/ 50,511 765,242 Pioneer-Standard Electronics Inc. 105,479 763,668 Key Productions Co. Inc./1/ 46,800 758,160 Skyline Corp. 27,846 757,133 Chesapeake Corp. 50,346 752,169 GBC Bancorp 38,290 743,592 On Assignment Inc./1/ 89,159 737,345 Radiant Systems Inc./1/ 91,611 732,888 Pericom Semiconductor Corp./1/ 84,592 729,183 TBC Corp./1/ 70,130 727,248 RTI International Metals Inc./1/ 69,000 724,500 Cascade Natural Gas Corp. 36,711 723,207 Planar Systems Inc./1/ 45,081 718,591 PAREXEL International Corp./1/ 83,085 706,223 Astec Industries Inc./1/ 65,270 703,611 SWS Group Inc. 57,191 700,590 Impath Inc./1/ 54,078 698,147 Metro One Telecommunications Inc./1/ 81,420 692,070 General Communication Inc. "A"/1/ 183,806 691,111 MRO Software Inc./1/ 79,190 688,953 Central Vermont Public Service Corp. 38,668 681,717 Schedules of Investments 43 Schedule of Investments (Unaudited) (Continued) iSHARES S&P SMALLCAP 600 INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------------- Interface Inc. "A" 169,634 $ 671,751 Cash America International Inc. 81,459 667,149 Pope & Talbot Inc. 51,857 666,362 National Presto Industries Inc. 22,710 655,865 JDA Software Group Inc./1/ 92,851 649,029 SPSS Inc./1/ 55,841 646,080 Keithley Instruments Inc. 52,333 635,846 Trenwick Group Ltd. 122,178 635,326 Pinnacle Entertainment Inc./1/ 86,074 628,340 Lydall Inc./1/ 53,153 627,205 Hologic Inc./1/ 63,973 626,935 Phoenix Technologies Ltd./1/ 86,447 626,741 Nuevo Energy Co./1/ 56,705 618,085 Angelica Corp. 28,674 616,204 Insurance Auto Auctions Inc./1/ 40,579 613,189 Mobile Mini Inc./1/ 47,287 612,367 TALX Corp. 46,226 608,796 Ultratech Stepper Inc./1/ 74,975 606,548 OMNOVA Solutions Inc./1/ 131,468 603,438 Ultimate Electronics Inc./1/ 47,313 603,241 Material Sciences Corp./1/ 48,990 596,208 Boston Communications Group Inc./1/ 57,216 590,469 Quaker Chemical Corp. 30,527 587,339 MGI Pharma Inc./1/ 83,238 582,666 Nature's Sunshine Products Inc. 53,148 575,593 Bio-Technology General Corp./1/ 194,112 574,572 BE Aerospace Inc./1/ 116,186 553,045 Rudolph Technologies Inc./1/ 53,723 552,810 Oxford Industries Inc. 24,960 546,624 Audiovox Corp. "A"/1/ 77,440 542,003 Viasat Inc./1/ 85,964 541,573 Allen Telecom Inc./1/ 101,182 540,312 Steel Technologies Inc. 31,777 538,938 Microsemi Corp./1/ 95,936 538,201 Nash Finch Co. 39,558 537,989 Bassett Furniture Industries Inc. 39,019 537,292 Ryerson Tull Inc. 82,351 529,517 Bei Technologies Inc. 47,848 526,328 Footstar Inc./1/ 66,770 520,806 X-Rite Inc. 67,046 518,266 AstroPower Inc./1/ 72,273 513,138 Goody's Family Clothing Inc./1/ 107,916 509,364 CTS Corp. 110,708 509,257 Building Materials Holdings Corp./1/ 43,316 506,797 Milacron Inc. 112,002 505,129 AAR Corp. 105,830 502,693 Kulicke & Soffa Industries Inc./1/ 163,605 490,815 Frontier Airlines Inc./1/ 98,172 479,079 Alliance Semiconductor Corp./1/ 125,923 478,507 Champion Enterprises Inc./1/ 161,862 475,874 Century Aluminum Co. 68,303 475,389 Carreker Corp./1/ 76,866 471,189 K2 Inc./1/ 59,603 470,864 Butler Manufacturing Co. 20,940 452,304 Standard Motor Products Inc. 41,620 449,912 Department 56 Inc./1/ 42,972 449,057 C-COR.net Corp./1/ 120,423 446,769 Theragenics Corp./1/ 98,786 434,658 Brush Engineered Materials Inc./1/ 55,228 430,778 Supertex Inc./1/ 41,416 430,726 Concord Camera Corp./1/ 91,304 425,477 Catapult Communications Corp./1/ 43,364 422,799 Nelson (Thomas) Inc./1/ 47,734 420,059 Curative Health Services Inc./1/ 38,393 416,564 Wabash National Corp./1/ 76,536 414,060 Intermet Corp. 85,512 411,313 Applica Inc./1/ 77,558 411,057 Mesa Air Group Inc./1/ 109,230 398,690 Huffy Corp./1/ 51,457 397,248 NYFIX Inc./1/ 101,934 396,523 Luby's Inc./1/ 74,455 366,319 CPI Corp. 26,639 366,286 Information Resources Inc./1/ 98,173 364,222 ArQule Inc./1/ 70,430 362,715 Administaff Inc./1/ 93,046 358,227 Aspen Technology Inc./1/ 117,916 353,748 Tollgrade Communications Inc./1/ 45,035 351,723 Stratex Networks Inc./1/ 273,717 350,084 SBS Technologies Inc./1/ 48,474 347,074 PC-Tel Inc./1/ 66,535 346,647 QRS Corp./1/ 52,273 346,570 Harmonic Inc./1/ 197,804 346,157 44 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES S&P SMALLCAP 600 INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------------- Penford Corp. 25,348 $ 342,198 Green Mountain Power Corp. 18,978 335,911 Three-Five Systems Inc./1/ 71,489 331,709 Cross (A.T.) Co. "A"/1/ 53,915 331,577 Castle (A.M.) & Co. 48,966 330,521 Enesco Group Inc./1/ 45,923 321,920 Salton Inc./1/ 36,507 310,675 IMCO Recycling Inc./1/ 49,283 298,162 Osteotech Inc./1/ 56,303 290,523 Concord Communications Inc./1/ 56,349 284,562 Gerber Scientific Inc./1/ 73,458 282,813 Commonwealth Industries Inc. 53,150 279,038 Network Equipment Technologies Inc./1/ 73,421 275,329 Fedders Corp./1/ 106,782 269,091 Bell Microproducts Inc./1/ 64,202 268,364 Rainbow Technologies Inc./1/ 88,631 251,712 Wolverine Tube Inc./1/ 40,655 249,215 Midas Inc./1/ 49,719 248,595 Hall Kinion & Associates Inc./(1)/ 40,987 245,922 Captaris Inc./1/ 105,939 243,554 Concerto Software Inc./1/ 40,494 239,765 Magnetek Inc./1/ 74,835 239,472 Analysts International Corp./1/ 80,343 232,995 Netegrity Inc./1/ 112,933 232,642 Haggar Corp. 21,166 232,403 RadiSys Corp./1/ 58,015 229,739 Zix Corp./1/ 58,709 226,030 Computer Task Group Inc./1/ 69,308 225,251 Ashworth Inc./1/ 43,906 217,335 SCM Microsystems Inc./1/ 51,812 204,606 MapInfo Corp./1/ 50,279 198,602 Midwest Express Holdings Inc./1/ 49,518 198,072 Roxio Inc./1/ 63,718 193,066 Artesyn Technologies Inc./1/ 127,483 192,499 Symmetricom Inc./1/ 73,861 189,084 Brooktrout Inc./1/ 40,551 185,318 Titan International Inc. 69,007 178,728 Royal Appliance Manufacturing Co./1/ 43,369 172,609 Meade Instruments Corp./1/ 54,757 170,842 CryoLife Inc./1/ 64,867 169,303 Flow International Corp./1/ 50,693 163,738 SCPIE Holdings Inc. 30,960 157,896 Aware Inc./1/ 75,286 156,595 AXT Inc./1/ 74,522 155,006 Digi International Inc./1/ 73,677 143,891 Electroglas Inc./1/ 70,299 140,598 ePresence Inc./1/ 75,812 124,332 Factory 2-U Stores Inc./1/ 42,994 83,408 Franklin Covey Co./1/ 66,183 78,096 Therma-Wave Inc./1/ 95,746 75,639 Westwood Holdings Group Inc. 1 11 TOTAL COMMON STOCKS (Cost: $1,306,658,775) 1,019,703,354 SHORT TERM INSTRUMENTS - 9.75% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 89,408,487 89,408,486 Dreyfus Money Market Fund 4,521,624 4,521,624 Goldman Sachs Financial Square Prime Obligation Fund 988,907 988,907 Providian Temp Cash Money Market Fund 4,532,436 4,532,436 TOTAL SHORT TERM INSTRUMENTS (Cost: $99,451,453) 99,451,453 TOTAL INVESTMENTS IN SECURITIES - 109.68% (Cost $1,406,110,228) 1,119,154,807 Other Assets, Less Liabilities - (9.68%) (98,777,610) -------------- NET ASSETS - 100.00% $1,020,377,197 ============== /1/ Non-income earning securities. See notes to financial statements. Schedules of Investments 45 Schedule of Investments (Unaudited) iSHARES S&P SMALLCAP 600/BARRA GROWTH INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- COMMON STOCKS - 99.97% Alliant Techsystems Inc./1/ 55,325 $ 3,831,256 XTO Energy Inc. 180,473 3,719,549 NVR Inc./1/ 11,026 3,305,926 Cephalon Inc./1/ 80,062 3,268,131 Coventry Health Care Inc./1/ 87,045 2,828,962 Cullen/Frost Bankers Inc. 74,133 2,531,642 Mid Atlantic Medical Services Inc./1/ 67,545 2,445,129 Harman International Industries Inc. 47,162 2,440,633 Fair Isaac and Co. Inc. 74,118 2,423,659 Zebra Technologies Corp. "A"/1/ 45,790 2,412,680 Corinthian Colleges Inc./1/ 62,363 2,353,580 Renal Care Group Inc./1/ 70,385 2,314,963 Performance Food Group Co./1/ 65,210 2,214,532 O'Reilly Automotive Inc./1/ 77,118 2,207,117 Accredo Health Inc./1/ 45,409 2,165,101 Polaris Industries Inc. 33,538 2,079,356 Philadelphia Suburban Corp. 99,983 2,029,655 Techne Corp./1/ 60,439 1,981,795 La-Z-Boy Inc. 84,726 1,965,643 Chico's FAS Inc./1/ 121,359 1,933,249 Diagnostic Products Corp. 41,436 1,906,056 First Midwest Bancorp Inc. 69,487 1,866,421 Medicis Pharmaceutical Corp. "A"/1/ 44,705 1,827,093 Ethan Allen Interiors Inc. 56,299 1,821,836 Cerner Corp./1/ 51,512 1,813,738 Scotts Co. (The) "A"/1/ 43,235 1,802,467 United Bancshares Inc. 61,685 1,789,482 Applebee's International Inc. 81,314 1,782,403 Regis Corp. 62,923 1,780,092 Southwest Bancorp of Texas Inc./1/ 48,844 1,778,410 Hilb Rogal & Hamilton Co. 42,619 1,758,034 Hudson United Bancorp 65,587 1,744,614 Ruby Tuesday Inc. 92,750 1,741,845 Graco Inc. 69,163 1,715,242 Take-Two Interactive Software Inc./1/ 55,673 1,614,517 Priority Healthcare Corp. "B"/1/ 63,937 1,611,212 Community First Bankshares Inc. 57,489 1,602,793 Roper Industries Inc. 45,375 1,565,437 Pharmaceutical Product Development Inc./1/ 80,309 1,553,176 Respironics Inc./1/ 48,175 1,542,082 Invacare Corp. 44,929 1,538,818 IDEXX Laboratories Inc./1/ 48,382 1,497,326 First Bancorp 38,709 1,475,587 CACI International Inc. "A"/1/ 41,303 1,464,191 Arbitron Inc./1/ 42,853 1,461,287 UGI Corp. 40,094 1,457,417 Thor Industries Inc. 41,359 1,437,639 AptarGroup Inc. 52,196 1,402,506 Cambrex Corp. 37,823 1,391,886 Chittenden Corp. 46,831 1,386,198 Oshkosh Truck Corp. 24,557 1,385,015 CEC Entertainment Inc./1/ 40,191 1,370,915 Global Payments Inc. 53,453 1,368,397 Heartland Express Inc./1/ 72,650 1,361,461 Sonic Corp./1/ 58,661 1,355,069 Idex Corp. 47,161 1,346,447 Fossil Inc./1/ 67,051 1,344,373 ResMed Inc./1/ 46,945 1,342,627 Essex Property Trust Inc. 26,433 1,306,848 FactSet Research Systems Inc. 48,995 1,300,817 Jack in the Box Inc./1/ 56,810 1,295,268 ITT Educational Services Inc./1/ 66,758 1,253,048 NBTY Inc./1/ 96,389 1,251,129 Province Healthcare Co./1/ 70,384 1,207,086 THQ Inc./1/ 57,572 1,197,498 Syncor International Corp./1/ 36,839 1,182,900 Linens `N Things Inc./1/ 64,035 1,176,323 Cooper Companies Inc. 22,231 1,167,127 Harland (John H.) Co. 42,758 1,160,880 East West Bancorp Inc. 34,375 1,160,500 PRG-Schultz International Inc./1/ 93,648 1,159,362 Landstar System Inc./1/ 23,633 1,158,608 Too Inc./1/ 49,292 1,147,518 Patina Oil & Gas Corp. 39,944 1,138,404 Panera Bread Co. "A"/1/ 42,120 1,137,240 Evergreen Resources Inc./1/ 27,526 1,128,015 UCBH Holdings Inc. 28,524 1,120,708 46 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES S&P SMALLCAP 600/BARRA GROWTH INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------------------- Simpson Manufacturing Co. Inc./1/ 35,505 $ 1,114,502 TrustCo Bank Corp. NY 105,154 1,112,319 CLARCOR Inc. 36,163 1,110,204 Fred's Inc. 37,050 1,106,239 CAL Dive International Inc./1/ 54,111 1,091,257 Brady Corp. "A" 33,546 1,080,181 Winnebago Industries Inc. 27,312 1,079,643 Mentor Corp. 33,797 1,077,448 Georgia Gulf Corp. 46,578 1,065,239 P.F. Chang's China Bistro Inc./1/ 36,129 1,048,825 Manitowoc Co. Inc. (The) 38,282 1,047,013 Delta & Pine Land Co. 55,687 1,043,574 G&K Services Inc. "A" 30,030 1,016,515 ABM Industries Inc. 71,273 1,004,949 Pacific Sunwear of California Inc./1/ 47,755 972,292 Kroll Inc./1/ 48,618 964,095 Argosy Gaming Co./1/ 41,936 962,851 Watson Wyatt & Co. Holdings/1/ 48,020 960,400 SCP Pool Corp./1/ 34,501 945,672 Baldor Electric Co. 49,427 944,056 MacDermid Inc. 46,906 935,775 Christopher & Banks Corp./1/ 37,130 932,706 American Italian Pasta Co. "A"/1/ 26,131 932,615 Pinnacle Systems Inc./1/ 85,451 922,871 ADVO Inc./1/ 29,041 922,052 Cymer Inc./1/ 49,305 919,045 Oceaneering International Inc./1/ 35,929 914,393 DRS Technologies Inc./1/ 24,485 911,332 AmSurg Corp./1/ 29,715 896,502 Plains Resource Inc./1/ 34,744 895,700 Cognex Corp./1/ 64,350 895,108 Hyperion Solutions Corp./1/ 48,443 888,929 Technitrol Inc. 58,227 870,494 Engineered Support Systems Inc. 15,217 867,978 Regeneron Pharmaceuticals Inc./1/ 63,998 863,973 Haemonetics Corp./1/ 36,190 858,789 Flir Systems Inc./1/ 24,503 857,360 Cost Plus Inc./(1)/ 31,562 847,440 DIANON Systems Inc./1/ 17,897 846,707 Teledyne Technologies Inc./1/ 46,505 844,531 Monaco Coach Corp./1/ 41,830 837,855 Sterling Bancshares Inc. 63,795 833,801 Financial Federal Corp./1/ 26,023 828,833 Hot Topic Inc./1/ 45,534 820,969 BARRA Inc./1/ 29,541 807,060 Dime Community Bancshares 37,646 806,377 Varian Semiconductor Equipment Associates Inc./1/ 48,903 803,965 CARBO Ceramics Inc. 22,277 798,408 Orthodontic Centers of America Inc./1/ 74,495 797,096 SurModics Inc./1/ 24,947 792,566 Dionex Corp./1/ 30,714 785,050 NDCHealth Corp. 50,288 781,978 Quiksilver Inc./1/ 34,332 775,560 Sybron Dental Specialties Inc./1/ 55,225 772,598 Ryan's Family Steak Houses Inc./1/ 63,285 770,178 Sierra Health Services Inc./1/ 41,732 748,672 Mercury Computer Systems Inc./1/ 31,507 743,565 CUNO Inc./1/ 24,065 742,405 ICU Medical Inc./1/ 20,145 735,695 Inter-Tel Inc. 35,341 719,189 Libbey Inc. 22,530 717,806 Owens & Minor Inc. 49,564 708,270 Kronos Inc./1/ 28,649 705,625 SERENA Software Inc./1/ 58,673 704,076 Cato Corp. "A" 37,073 703,646 INAMED Corp./1/ 30,328 697,544 Axcelis Technologies Inc./1/ 142,479 695,298 Boston Private Financial Holdings Inc. 32,578 693,911 WD-40 Co. 23,851 689,294 Gymboree Corp./1/ 42,006 685,118 Insight Enterprises Inc./1/ 66,725 677,259 Action Performance Companies Inc./1/ 25,943 666,735 EDO Corp. 28,581 640,500 Armor Holdings Inc./1/ 42,700 640,073 United Natural Foods Inc./1/ 27,697 637,862 Progress Software Corp./1/ 52,420 634,282 OshKosh B'Gosh Inc. "A" 18,392 631,949 ATMI Inc./1/ 44,426 626,407 Schedules of Investments 47 Schedule of Investments (Unaudited) (Continued) iSHARES S&P SMALLCAP 600/BARRA GROWTH INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Biosite Inc./1/ 21,457 $ 622,038 Atlantic Coast Airlines Holdings Inc./1/ 65,710 607,817 Coca-Cola Bottling Co. Consolidated 12,862 603,228 Enzo Biochem Inc./1/ 41,360 591,448 MICROS Systems Inc./1/ 25,502 591,391 Hooper Holmes Inc. 94,917 588,485 Forward Air Corp./1/ 31,678 573,372 K-Swiss Inc. "A" 26,770 572,075 Manhattan Associates Inc./1/ 41,827 565,501 Pre-Paid Legal Services Inc./1/ 28,218 560,974 Vital Sign Inc. 18,750 557,062 Duane Reade Inc./1/ 34,752 556,032 Insituform Technologies Inc. "A"/1/ 38,608 553,986 Itron Inc./1/ 29,366 540,041 Lance Inc. 42,217 538,267 Rogers Corp./1/ 22,997 536,980 FileNET Corp./1/ 51,827 536,409 Remington Oil & Gas Corp./1/ 37,783 532,740 Maverick Tube Corp./1/ 59,227 525,343 Power Integrations Inc./1/ 41,179 501,972 Jill (J.) Group Inc. (The)/1/ 28,007 487,882 Shuffle Master Inc./1/ 25,969 483,283 ElkCorp 28,217 481,664 Frontier Oil Corp. 38,003 471,237 PolyMedica Corp./1/ 17,653 466,392 Photon Dynamics Inc./1/ 24,822 462,434 Arctic Cat Inc. 32,752 457,218 StarTek Inc./1/ 20,501 451,227 Hancock Fabrics Inc. 27,427 442,946 Steak n Shake Company (The)/1/ 40,062 440,682 Aeroflex Inc./1/ 87,356 440,274 Wet Seal Inc. "A"/1/ 44,009 440,090 Genesco Inc./1/ 31,811 438,992 Advanced Energy Industries Inc./1/ 46,620 414,918 Lindsay Manufacturing Co. 16,999 411,886 Intermagnetics General Corp./1/ 24,096 411,319 Trimble Navigation Ltd./1/ 41,462 410,474 Noven Pharmaceuticals Inc./1/ 32,791 401,362 New England Business Service Inc. 18,895 399,629 Advanced Medical Optics Inc./1/ 41,860 398,089 ESS Technology Inc./1/ 63,470 390,340 Prima Energy Corp./1/ 18,589 389,811 Children's Place Retail Stores Inc.(The)/1/ 38,469 388,537 Advanced Marketing Services Inc. 27,971 385,720 Labor Ready Inc./1/ 59,546 376,331 Midway Games Inc./1/ 67,821 371,659 Actel Corp./1/ 35,611 370,354 Helix Technology Corp. 38,023 366,922 Dendrite International Inc./1/ 58,062 366,371 ANSYS Inc./1/ 21,251 366,155 Kopin Corp./1/ 100,880 351,062 Cohu Inc. 30,118 340,333 MemberWorks Inc./1/ 19,427 338,418 On Assignment Inc./1/ 39,133 323,630 Radiant Systems Inc./1/ 40,222 321,776 Planar Systems Inc./1/ 19,789 315,437 Impath Inc./1/ 23,672 305,606 MRO Software Inc./1/ 35,039 304,839 Metro One Telecommunications Inc./1/ 35,722 303,637 General Communication Inc. "A"/1/ 80,564 302,921 JDA Software Group Inc./1/ 40,754 284,870 Keithley Instruments Inc. 22,988 279,304 Phoenix Technologies Ltd./1/ 37,906 274,818 Ultimate Electronics Inc./1/ 20,906 266,551 OMNOVA Solutions Inc./1/ 57,651 264,618 Quaker Chemical Corp. 13,419 258,182 MGI Pharma Inc./1/ 36,530 255,710 BE Aerospace Inc./1/ 51,434 244,826 Rudolph Technologies Inc./1/ 23,542 242,247 Bei Technologies Inc. 20,940 230,340 X-Rite Inc. 29,400 227,262 AstroPower Inc./1/ 31,703 225,091 Kulicke & Soffa Industries Inc./1/ 71,673 215,019 Frontier Airlines Inc./1/ 43,052 210,094 Department 56 Inc./1/ 18,782 196,272 Supertex Inc./1/ 18,100 188,240 Catapult Communications Corp./1/ 18,953 184,792 Nelson (Thomas) Inc./1/ 20,881 183,753 48 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES S&P SMALLCAP 600/BARRA GROWTH INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Mesa Air Group Inc./1/ 47,481 $ 173,306 Administaff Inc./1/ 40,699 156,691 QRS Corp./1/ 22,874 151,655 Harmonic Inc./1/ 86,652 151,641 Concord Communications Inc./1/ 24,719 124,831 Hall Kinion & Associates Inc./1/ 17,918 107,508 Zix Corp./1/ 25,812 99,376 Roxio Inc./1/ 27,921 84,601 CryoLife Inc./1/ 28,433 74,210 Factory 2-U Stores Inc./1/ 18,804 36,480 TOTAL COMMON STOCKS (Cost: $274,094,712) 231,974,301 SHORT TERM INSTRUMENTS - 9.61% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 18,674,200 18,674,200 Dreyfus Money Market Fund 1,037,815 1,037,815 Goldman Sachs Financial Square Prime Obligation Fund 530,344 530,344 Providian Temp Cash Money Market Fund 2,056,723 2,056,723 TOTAL SHORT TERM INSTRUMENTS (Cost: $22,299,082) 22,299,082 TOTAL INVESTMENTS IN SECURITIES - 109.58% (Cost $296,393,794) 254,273,383 Other Assets, Less Liabilities - (9.58%) (22,234,705) ------------ NET ASSETS - 100.00% $232,038,678 ============ /1/ Non-income earning securities. See notes to financial statements. Schedules of Investments 49 Schedule of Investments (Unaudited) iSHARES S&P SMALLCAP 600/BARRA VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- COMMON STOCKS - 99.91% Pogo Producing Co. 188,244 $ 6,411,594 Toll Brothers Inc./1/ 219,664 4,775,495 Newfield Exploration Co./1/ 137,613 4,622,421 First American Corp. 221,954 4,534,520 Washington Federal Inc. 196,592 4,386,951 Raymond James Financial Inc. 150,010 4,060,771 Whitney Holding Corp. 123,941 3,954,957 OM Group Inc. 87,300 3,736,440 Werner Enterprises Inc. 197,685 3,633,450 Piedmont Natural Gas Co. 101,581 3,603,078 Shurgard Storage Centers Inc. "A" 110,908 3,506,911 Staten Island Bancorp Inc. 187,169 3,256,741 Zale Corp./1/ 105,732 3,188,877 Jeffries Group Inc. 83,397 3,182,430 AnnTaylor Stores Corp./1/ 137,834 3,174,317 Corn Products International Inc. 110,331 3,172,016 Timken Co. (The) 187,065 3,133,339 Commercial Federal Corp. 140,177 3,051,653 Ryland Group Inc. 81,610 3,033,444 Downey Financial Corp. 87,494 2,996,669 Waste Connections Inc./1/ 86,109 2,995,732 M.D.C. Holdings Inc. 82,723 2,920,122 South Financial Group Inc. (The) 136,949 2,888,254 Tom Brown Inc./1/ 121,559 2,783,701 Atmos Energy Corp. 128,482 2,762,363 Mueller Industries Inc./1/ 106,231 2,751,383 New Jersey Resources Corp. 83,366 2,742,741 Energen Corp. 106,853 2,704,449 Florida Rock Industries Inc. 88,403 2,701,596 United Stationers Inc./1/ 102,239 2,688,886 Yellow Corp./1/ 90,265 2,663,540 Susquehanna Bancshares Inc. 122,579 2,653,835 Stone Energy Corp./1/ 81,585 2,651,513 Unit Corp./1/ 134,370 2,573,186 SEACOR SMIT Inc./1/ 62,535 2,563,310 Smith (A.O.) Corp. "B" 88,670 2,520,001 Briggs & Stratton Corp. 67,075 2,517,995 Colonial Properties Trust 69,541 2,515,993 Burlington Coat Factory Warehouse Corp. 137,829 2,480,922 Pediatrix Medical Group Inc./1/ 79,270 2,456,577 PolyOne Corp. 283,471 2,435,016 UICI/1/ 147,460 2,397,700 USFreightways Corp. 83,412 2,392,256 Anixter International Inc./1/ 115,815 2,385,789 CH Energy Group Inc. 50,686 2,378,694 Lennox International Inc. 178,173 2,357,229 Standard-Pacific Corp. 100,172 2,342,021 SkyWest Inc. 177,718 2,328,106 Northwest Natural Gas Co. 78,991 2,319,176 Delphi Financial Group Inc. "A" 63,652 2,318,206 Kansas City Southern Industries Inc./1/ 186,629 2,314,200 US Oncology Inc./1/ 283,308 2,297,628 EMCOR Group Inc./1/ 46,208 2,296,538 Southwest Gas Corp. 102,248 2,275,018 Central Parking Corp. 111,463 2,244,865 MAF Bancorp Inc. 71,844 2,219,980 Arkansas Best Corp./1/ 76,873 2,205,563 Roadway Corp. 59,986 2,200,286 Hughes Supply Inc. 74,067 2,158,312 Capital Automotive 86,300 2,155,774 Reliance Steel & Aluminum Co. 98,348 2,148,904 Toro Co. 37,749 2,123,381 Cabot Oil & Gas Corp. "A" 98,555 2,118,932 Vintage Petroleum Inc. 196,158 2,118,506 Standard Register Co. (The) 87,072 2,089,728 St. Mary Land & Exploration Co. 86,323 2,063,120 Kilroy Realty Corp. 86,433 2,049,326 Black Box Corp./1/ 61,689 2,048,075 American Financial Holdings Inc. 66,193 2,012,929 Tredegar Corp. 118,917 1,991,860 Ralcorp Holdings Inc./1/ 93,022 1,978,578 Philadelphia Consolidated Holding Corp./1/ 66,946 1,974,907 Pep Boys-Manny, Moe & Jack Inc. 159,599 1,955,088 Landry's Restaurants Inc. 86,442 1,952,725 Men's Wearhouse Inc. (The)/1/ 131,580 1,934,226 Steel Dynamics Inc./1/ 147,213 1,927,018 Southern Union Co./1/ 170,502 1,926,675 Skyworks Solutions Inc./1/ 425,081 1,925,617 50 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES S&P SMALLCAP 600/BARRA VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Russ Berrie & Co. Inc. 63,339 $ 1,900,803 Wolverine World Wide Inc. 126,161 1,892,415 Curtiss Wright Corp. 31,644 1,891,995 LandAmerica Financial Group Inc. 57,175 1,880,486 Shaw Group Inc. (The)/1/ 129,881 1,844,310 El Paso Electric Co./1/ 154,859 1,839,725 Kellwood Co. 78,593 1,796,636 Paxar Corp./1/ 122,972 1,788,013 CONMED Corp./1/ 88,636 1,786,015 Casey's General Store Inc. 153,847 1,776,933 Selective Insurance Group Inc. 81,526 1,771,560 Quanex Corp. 50,623 1,756,618 Dress Barn Inc./1/ 112,880 1,756,413 Glenborough Realty Trust Inc. 85,812 1,741,984 Valmont Industries Inc. 73,619 1,719,004 Analogic Corp. 41,008 1,717,825 Kirby Corp./1/ 74,347 1,681,729 Provident Bankshares Corp. 77,139 1,664,660 Woodward Governor Co. 35,095 1,663,433 Avista Corp. 148,313 1,661,106 American Management Systems Inc./1/ 130,317 1,658,935 RLI Corp. 30,776 1,651,132 Jo-Ann Stores Inc./1/ 58,802 1,648,808 Coherent Inc./1/ 89,699 1,637,007 Rock-Tenn Co. "A" 106,110 1,636,216 Group 1 Automotive Inc./1/ 71,583 1,599,880 Rare Hospitality International Inc./1/ 67,975 1,591,975 UIL Holdings Corp. 44,818 1,588,798 UniSource Energy Corp. 104,142 1,588,166 Texas Industries Inc. 65,221 1,583,566 Benchmark Electronics Inc./1/ 75,009 1,578,939 Commercial Metals Co. 87,964 1,576,315 Acuity Brands Inc. 128,342 1,573,473 Anchor BanCorp Wisconsin Inc. 77,401 1,563,500 CDI Corp./1/ 59,720 1,561,678 IHOP Corp./1/ 64,788 1,561,391 Aaron Rents Inc. "B" 67,018 1,541,414 Hain Celestial Group Inc./1/ 105,050 1,538,982 URS Corp./1/ 92,724 1,536,437 Zenith National Insurance Corp. 57,943 1,530,854 Aztar Corp./1/ 115,691 1,528,278 Alpharma Inc. "A" 158,921 1,525,642 Sunrise Assisted Living Inc./1/ 70,547 1,513,233 MAXIMUS Inc./1/ 67,264 1,506,714 Massey Energy Co. 232,165 1,497,464 Russell Corp. 99,653 1,493,798 Seacoast Financial Services Corp. 74,302 1,491,241 Information Holdings Inc./1/ 67,636 1,464,319 Adaptec Inc./1/ 329,428 1,452,777 Triarc Companies Inc./1/ 63,624 1,443,629 Lone Star Steakhouse & Saloon Inc. 68,056 1,428,495 AmeriPath Inc./1/ 94,740 1,411,626 Exar Corp./1/ 122,108 1,410,347 School Specialty Inc./1/ 56,369 1,409,789 WMS Industries Inc./1/ 99,400 1,401,540 FirstFed Financial Corp./1/ 53,528 1,378,346 Triumph Group Inc./1/ 49,171 1,376,788 Tower Automotive Inc./1/ 204,198 1,368,127 Laclede Group Inc. (The) 58,647 1,366,475 eFunds Corp./1/ 144,645 1,356,915 Watts Industries Inc. "A" 82,518 1,353,295 DSP Group Inc./1/ 83,984 1,348,699 Wellman Inc. 98,791 1,348,497 GenCorp. Inc. 133,912 1,345,816 Regal-Beloit Corp. 77,547 1,326,829 Tetra Tech Inc./1/ 164,618 1,315,298 Thomas Industries Inc. 52,956 1,313,309 Presidential Life Corp. 90,934 1,309,450 Ionics Inc./1/ 54,451 1,296,478 Spherion Corp./1/ 182,519 1,286,759 Hutchinson Technology Inc./1/ 78,618 1,269,681 Electro Scientific Industries Inc./1/ 85,339 1,265,577 ChemFirst Inc. 43,995 1,265,296 Riggs National Corp. 88,418 1,263,493 DuPont Photomasks Inc./1/ 55,375 1,261,442 Atwood Oceanics Inc./1/ 42,925 1,255,556 Viasys Healthcare Inc./1/ 80,853 1,245,136 Offshore Logistics Inc./1/ 69,166 1,242,221 Datascope Corp. 45,838 1,240,376 Checkpoint Systems Inc./1/ 99,891 1,233,654 Schedules of Investments 51 Schedule of Investments (Unaudited) (Continued) iSHARES S&P SMALLCAP 600/BARRA VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- American States Water Co. 47,039 $ 1,233,363 Arch Chemicals Inc. 69,471 1,231,026 RehabCare Group Inc./1/ 53,078 1,227,694 Brooks-PRI Automation Inc./1/ 104,793 1,199,880 Marcus Corp. 91,047 1,192,716 C&D Technologies Inc. 80,579 1,181,288 Barnes Group Inc. 58,308 1,171,408 Stewart Information Services Corp./1/ 54,691 1,167,653 Watsco Inc. 81,636 1,167,395 CIBER Inc./1/ 200,754 1,166,381 ShopKo Stores Inc./1/ 89,239 1,165,461 Myers Industries Inc. 92,830 1,163,160 International Multifoods Corp./1/ 59,157 1,159,477 Prime Hospitality Corp./1/ 139,656 1,145,179 Fremont General Corp. 231,744 1,135,546 SOURCECORP Inc./1/ 53,899 1,100,079 Griffon Corp./1/ 102,911 1,096,002 O'Charley's Inc./1/ 58,131 1,089,433 Verity Inc./1/ 109,178 1,086,321 Nautica Enterprises Inc./1/ 104,289 1,084,606 Phillips-Van Heusen Corp. 85,785 1,080,891 Esterline Technologies Corp./1/ 64,332 1,070,484 JLG Industries Inc. 132,448 1,066,206 NUI Corp. 48,947 1,057,255 Lone Star Technologies Inc./1/ 88,511 1,048,855 Universal Forest Products Inc. 55,607 1,046,524 Veritas DGC Inc./1/ 96,276 1,040,744 Bowne & Co. Inc. 103,987 1,039,870 Belden Inc. 77,363 1,038,211 Methode Electronics Inc. "A" 111,875 1,027,012 Stride Rite Corp. 129,459 1,024,021 Sturm Ruger & Co. Inc. 83,531 1,019,078 SPS Technologies Inc./1/ 40,865 1,018,764 Bally Total Fitness Holding Corp./1/ 102,220 1,013,000 Park Electrochemical Corp. 60,518 1,010,651 J&J Snack Foods Corp./1/ 27,381 1,008,990 Applied Industrial Technologies Inc. 59,512 1,008,728 Imagistics International Inc./1/ 58,080 1,007,688 Great Atlantic & Pacific Tea Co./1/ 119,164 998,594 First Republic Bank/1/ 45,675 993,431 Photronics Inc./1/ 98,712 993,043 Schweitzer-Mauduit International Inc. 46,250 987,438 Brown Shoe Co. Inc. 54,498 975,514 Veeco Instruments Inc./1/ 90,218 974,354 Apogee Enterprises Inc. 88,000 962,720 Southwestern Energy Co./1/ 79,557 954,684 Vicor Corp./1/ 131,568 940,711 Chemed Corp. 30,414 935,839 4Kids Entertainment Inc./1/ 39,121 928,341 Dril-Quip Inc./1/ 53,651 904,019 Tetra Technologies Inc./1/ 43,991 886,419 Lawson Products Inc. 29,756 867,387 Swift Energy Co./1/ 83,395 867,308 DIMON Inc. 138,567 864,658 Heidrick & Struggles International Inc./1/ 56,227 854,088 Kaman Corp. "A" 69,552 852,012 Cable Design Technologies Corp./1/ 137,647 842,400 Avid Technology Inc./1/ 81,506 839,512 Haverty Furniture Companies Inc. 67,088 838,600 Buckeye Technologies Inc./1/ 113,875 836,981 Fleming Companies Inc. 167,396 836,980 NorthWestern Corp. 85,049 830,078 Deltic Timber Corp. 37,023 813,766 Pegasus Solutions Inc./1/ 77,057 812,951 Caraustar Industries Inc. 86,497 808,747 Jakks Pacific Inc./1/ 72,696 808,307 Robbins & Myers Inc. 43,258 806,762 ArthroCare Corp./1/ 66,444 805,301 Stillwater Mining Co./1/ 133,915 803,490 Gardner Denver Inc./1/ 49,203 772,979 Standard Microsystems Corp./1/ 50,042 764,692 Sola International Inc./1/ 75,858 762,373 Standex International Corp. 37,541 761,331 Cleveland-Cliffs Inc. 31,585 759,619 Input/Output Inc./1/ 158,248 758,008 Stein Mart Inc./1/ 129,174 754,376 Coachmen Industries Inc. 49,994 750,410 Fleetwood Enterprises Inc./1/ 110,228 742,937 52 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES S&P SMALLCAP 600/BARRA VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Bel Fuse Inc. "B" 33,876 $ 726,640 Systems & Computer Technology Corp./1/ 103,304 723,128 Consolidated Graphics Inc./1/ 41,030 720,076 Volt Information Sciences Inc./1/ 47,231 715,550 Pioneer-Standard Electronics Inc. 98,652 714,240 Skyline Corp. 26,075 708,979 Key Productions Co. Inc./1/ 43,676 707,551 Chesapeake Corp. 47,035 702,703 GBC Bancorp 35,762 694,498 Pericom Semiconductor Corp./1/ 79,129 682,092 TBC Corp./1/ 65,523 679,474 RTI International Metals Inc./1/ 64,503 677,282 Cascade Natural Gas Corp. 34,301 675,730 PAREXEL International Corp./1/ 77,697 660,424 Astec Industries Inc./1/ 61,052 658,141 SWS Group Inc. 53,549 655,975 Central Vermont Public Service Corp. 36,166 637,607 Interface Inc. "A" 158,667 628,321 Pope & Talbot Inc. 48,492 623,122 Cash America International Inc. 76,024 622,637 National Presto Industries Inc. 21,230 613,122 SPSS Inc./1/ 52,248 604,509 Trenwick Group Ltd. 114,189 593,783 Pinnacle Entertainment Inc./1/ 80,485 587,541 Lydall Inc./1/ 49,714 586,625 Hologic Inc./1/ 59,845 586,481 Nuevo Energy Co./1/ 53,065 578,408 Angelica Corp. 26,812 576,190 Insurance Auto Auctions Inc./1/ 37,975 573,840 Mobile Mini Inc./1/ 44,236 572,856 Ultratech Stepper Inc./1/ 70,102 567,125 TALX Corp. 42,946 565,599 Material Sciences Corp./1/ 45,441 553,017 Boston Communications Group Inc./1/ 53,563 552,770 Bio-Technology General Corp./1/ 181,524 537,311 Nature's Sunshine Products Inc. 49,084 531,580 Oxford Industries Inc. 23,354 511,453 Audiovox Corp. "A"/1/ 73,073 511,438 Viasat Inc./1/ 80,386 506,432 Allen Telecom Inc./1/ 94,672 505,548 Microsemi Corp./1/ 89,696 503,195 Nash Finch Co. 36,973 502,833 Steel Technologies Inc. 29,633 502,576 Bassett Furniture Industries Inc. 36,465 502,123 Ryerson Tull Inc. 77,110 495,817 Footstar Inc./1/ 62,525 487,695 Goody's Family Clothing Inc./1/ 100,996 476,701 CTS Corp. 103,611 476,611 Building Materials Holdings Corp./1/ 40,541 474,330 Milacron Inc. 104,685 472,129 AAR Corp. 98,935 469,941 Champion Enterprises Inc./1/ 151,369 445,025 Century Aluminum Co. 63,877 444,584 Carreker Corp./1/ 72,409 443,867 Alliance Semiconductor Corp./1/ 116,181 441,488 K2 Inc./1/ 55,699 440,022 Butler Manufacturing Co. 19,565 422,604 Standard Motor Products Inc. 38,918 420,704 C-COR.net Corp./1/ 112,609 417,779 Theragenics Corp./1/ 92,410 406,604 Brush Engineered Materials Inc./1/ 51,656 402,917 Concord Camera Corp./1/ 85,332 397,647 Curative Health Services Inc./1/ 35,886 389,363 Wabash National Corp./1/ 71,542 387,042 Applica Inc./1/ 72,584 384,695 Intermet Corp. 79,239 381,140 NYFIX Inc./1/ 95,402 371,114 Huffy Corp./1/ 47,907 369,842 CPI Corp. 24,919 342,636 Luby's Inc./1/ 69,628 342,570 Information Resources Inc./1/ 91,769 340,463 ArQule Inc./1/ 65,879 339,277 Aspen Technology Inc./1/ 110,204 330,612 Tollgrade Communications Inc./1/ 42,124 328,988 Stratex Networks Inc./1/ 256,052 327,491 SBS Technologies Inc./1/ 45,311 324,427 PC-Tel Inc./1/ 62,199 324,057 Penford Corp. 23,717 320,180 Green Mountain Power Corp. 17,728 313,786 Schedules of Investments 53 Schedule of Investments (Unaudited) (Continued) iSHARES S&P SMALLCAP 600/BARRA VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Three-Five Systems Inc./1/ 66,820 $ 310,045 Castle (A.M.) & Co. 45,762 308,893 Cross (A.T.) Co. "A"/1/ 49,932 307,082 Enesco Group Inc./1/ 42,695 299,292 Salton Inc./1/ 34,122 290,378 IMCO Recycling Inc./1/ 45,100 272,855 Osteotech Inc./1/ 52,618 271,509 Gerber Scientific Inc./1/ 68,689 264,453 Commonwealth Industries Inc. 49,652 260,673 Network Equipment Technologies Inc./1/ 68,732 257,745 Fedders Corp./1/ 99,855 251,635 Bell Microproducts Inc./1/ 60,040 250,967 Rainbow Technologies Inc./1/ 82,873 235,359 Wolverine Tube Inc./1/ 38,058 233,296 Midas Inc./1/ 46,445 232,225 Captaris Inc./1/ 99,020 227,647 Magnetek Inc./1/ 69,957 223,862 Concerto Software Inc./1/ 37,003 219,095 Analysts International Corp./1/ 75,180 218,022 Haggar Corp. 19,809 217,503 Netegrity Inc./1/ 105,572 217,478 RadiSys Corp./(1)/ 54,189 214,588 Computer Task Group Inc./1/ 64,875 210,844 Ashworth Inc./1/ 40,999 202,945 SCM Microsystems Inc./1/ 48,475 191,428 Midwest Express Holdings Inc./1/ 47,680 190,720 MapInfo Corp./1/ 47,018 185,721 Artesyn Technologies Inc./1/ 119,212 180,010 Symmetricom Inc./1/ 68,685 175,834 Brooktrout Inc./1/ 37,940 173,386 Titan International Inc. 64,546 167,174 Royal Appliance Manufacturing Co./1/ 40,117 159,666 Meade Instruments Corp./1/ 51,154 159,600 Flow International Corp./1/ 47,403 153,112 SCPIE Holdings Inc. 29,440 150,144 Aware Inc./1/ 70,409 146,451 AXT Inc./1/ 69,637 144,845 Digi International Inc./1/ 68,932 134,624 Electroglas Inc./1/ 65,641 131,282 ePresence Inc./1/ 70,839 116,176 Franklin Covey Co./1/ 61,865 73,001 Therma-Wave Inc./1/ 89,587 70,774 TOTAL COMMON STOCKS (Cost: $594,686,550) 458,744,871 SHORT TERM INSTRUMENTS - 8.70% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 33,574,580 33,574,580 Dreyfus Money Market Fund 1,858,605 1,858,605 Goldman Sachs Financial Square Prime Obligation Fund 902,732 902,732 Providian Temp Cash Money Market Fund 3,587,907 3,587,907 TOTAL SHORT TERM INSTRUMENTS (Cost: $39,923,824) 39,923,824 TOTAL INVESTMENTS IN SECURITIES - 108.61% (Cost $634,610,374) 498,668,695 Other Assets, Less Liabilities - (8.61%) (39,528,814) ------------ NET ASSETS - 100.00% $459,139,881 ============ /1/ Non-income earning securities. See notes to financial statements. 54 2002 iShares Semi-Annual Report to Shareholders Statements of Assets and Liabilities (Unaudited) iSHARES TRUST September 30, 2002
iShares S&P --------------------------------------------------------------------- MidCap 500/BARRA 500/BARRA MidCap 400/BARRA 500 Growth Value 400 Growth Index Fund Index Fund Index Fund Index Fund Index Fund - ------------------------------------------------------------------------------------------------------------ ASSETS Investments at cost $5,034,827,352 $596,781,431 $798,892,434 $785,370,594 $359,489,256 ---------------------------------------------------------------------- Investments in securities, at value (including securities on loan/1/) (Note 1) $3,281,642,911 $451,930,304 $554,873,308 $645,739,828 $294,419,382 Receivables: Investment securities sold - - - 465,345 - Dividends and interest 4,914,347 676,984 841,358 505,194 110,066 ---------------------------------------------------------------------- Total Assets 3,286,557,258 452,607,288 555,714,666 646,710,367 294,529,448 ---------------------------------------------------------------------- LIABILITIES Payables: Investment securities purchased 455,704 - 160,451 644,655 - Collateral for securities on loan (Note 5) 53,135,146 2,249,502 10,981,141 51,520,140 24,675,625 Advisory fees (Note 2) 554,680 135,756 173,414 200,024 120,775 ---------------------------------------------------------------------- Total Liabilities 54,145,530 2,385,258 11,315,006 52,364,819 24,796,400 ---------------------------------------------------------------------- NET ASSETS $3,232,411,728 $450,222,030 $544,399,660 $594,345,548 $269,733,048 ====================================================================== Net Assets Consist of: Paid-in capital $5,192,558,447 $646,564,730 $828,880,791 $747,156,343 $374,941,324 Undistributed net investment income 1,976,597 258,571 307,243 115,962 25,630 Undistributed net realized loss (208,938,875) (51,750,144) (40,769,248) (13,295,991) (40,164,032) Net unrealized depreciation (1,753,184,441) (144,851,127) (244,019,126) (139,630,766) (65,069,874) ---------------------------------------------------------------------- NET ASSETS $3,232,411,728 $450,222,030 $544,399,660 $594,345,548 $269,733,048 ====================================================================== iShares outstanding 39,550,000 10,700,000 13,850,000 7,300,000 3,100,000 ====================================================================== Net asset value per iShare $ 81.73 $ 42.08 $ 39.31 $ 81.42 $ 87.01 ======================================================================
/1/ Securities on loan with market values of $49,916,126, $2,007,234, $10,333,022, $49,644,049 and $23,686,887, respectively. See Note 5. See notes to financial statements. Financial Statements 55 Statements of Assets and Liabilities (Unaudited) (Continued) iSHARES TRUST September 30, 2002
iShares S&P -------------------------------------------------------- MidCap SmallCap SmallCap 400/BARRA SmallCap 600/BARRA 600/BARRA Value 600 Growth Value Index Fund Index Fund Index Fund Index Fund - ----------------------------------------------------------------------------------------------------- ASSETS Investments at cost $691,368,458 $1,406,110,228 $296,393,794 $634,610,374 -------------------------------------------------------- Investments in securities, at value (including securities on loan/1/) (Note 1) $575,228,330 $1,119,154,807 $254,273,383 $498,668,695 Receivables: Investment securities sold 837,884 - 20,427 134,635 Dividends and interest 721,002 823,210 133,658 506,984 iShares sold - 17,791 - - -------------------------------------------------------- Total Assets 576,787,216 1,119,995,808 254,427,468 499,310,314 -------------------------------------------------------- LIABILITIES Payables: Investment securities purchased 1,175,437 - - 46,632 Collateral for securities on loan (Note 5) 40,834,376 99,262,411 22,290,008 39,918,778 Advisory fees (Note 2) 236,001 356,200 98,782 205,023 -------------------------------------------------------- Total Liabilities 42,245,814 99,618,611 22,388,790 40,170,433 -------------------------------------------------------- NET ASSETS $534,541,402 $1,020,377,197 $232,038,678 $459,139,881 ======================================================== Net Assets Consist of: Paid-in capital $653,523,490 $1,300,998,149 $290,730,052 $605,300,186 Undistributed net investment income 142,238 324,071 21,028 237,594 Undistributed net realized gain (loss) (2,984,198) 6,010,398 (16,591,991) (10,456,220) Net unrealized depreciation (116,140,128) (286,955,421) (42,120,411) (135,941,679) -------------------------------------------------------- NET ASSETS $534,541,402 $1,020,377,197 $232,038,678 $459,139,881 ======================================================== iShares outstanding 7,100,000 10,950,000 3,750,000 6,600,000 ======================================================== Net asset value per iShare $ 75.29 $ 93.19 $ 61.88 $ 69.57 ========================================================
/1/ Securities on loan with market values of $39,042,515, $94,049,652, $21,238,765 and $37,994,399, respectively. See Note 5. See notes to financial statements. 56 2002 iShares Semi-Annual Report to Shareholders Statements of Operations (Unaudited) iSHARES TRUST For the six months ended September 30, 2002
iShares S&P ------------------------------------------------------------------------- MidCap 500/BARRA 500/BARRA MidCap 400/BARRA 500 Growth Value 400 Growth Index Fund Index Fund Index Fund Index Fund Index Fund - ------------------------------------------------------------------------------------------------------------------ NET INVESTMENT INCOME Dividends/1/ $ 31,509,130 $ 2,742,210 $ 6,390,724 $ 3,249,326 $ 718,713 Interest 27,259 2,094 5,196 3,484 1,040 Securities lending income 51,729 3,557 11,674 42,072 17,538 -------------------------------------------------------------------------- Total investment income 31,588,118 2,747,861 6,407,594 3,294,882 737,291 -------------------------------------------------------------------------- EXPENSES (NOTE 2) Advisory fees 1,828,651 403,314 559,302 615,497 384,866 -------------------------------------------------------------------------- Total expenses 1,828,651 403,314 559,302 615,497 384,866 -------------------------------------------------------------------------- Net investment income 29,759,467 2,344,547 5,848,292 2,679,385 352,425 -------------------------------------------------------------------------- NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss)from: Investments (134,890,870) (31,197,665) (19,656,032) (5,552,421) (26,476,158) In-kind redemptions 4,422,943 1,439,152 6,789,293 6,528,979 8,932,646 -------------------------------------------------------------------------- Net realized gain(loss) (130,467,927) (29,758,513) (12,866,739) 976,558 (17,543,512) -------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on investments (1,190,133,857) (125,889,917) (208,025,410) (174,714,179) (79,865,447) -------------------------------------------------------------------------- Net realized and unrealized loss (1,320,601,784) (155,648,430) (220,892,149) (173,737,621) (97,408,959) -------------------------------------------------------------------------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(1,290,842,317) $(153,303,883) $(215,043,857) $(171,058,236) $(97,056,534) ==========================================================================
/1/ Net of foreign withholding tax of $165,052, $7,895, $39,587, $-- and $--, respectively. See notes to financial statements. Financial Statements 57 Statements of Operations (Unaudited) (Continued) iSHARES TRUST For the six months ended September 30, 2002
iShares S&P ------------------------------------------------------------ MidCap SmallCap SmallCap 400/BARRA SmallCap 600/BARRA 600/BARRA Value 600 Growth Value Index Fund Index Fund Index Fund Index Fund - ----------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME Dividends/1/ $ 4,493,029 $ 4,700,634 $ 533,220 $ 3,050,635 Interest 5,965 5,803 1,254 2,624 Securities lending income 38,510 201,880 32,012 93,130 ------------------------------------------------------------ Total investment income 4,537,504 4,908,317 566,486 3,146,389 ------------------------------------------------------------ EXPENSES (NOTE 2) Advisory fees 696,649 1,198,452 282,991 698,799 ------------------------------------------------------------ Total expenses 696,649 1,198,452 282,991 698,799 ------------------------------------------------------------ Net investment income 3,840,855 3,709,865 283,495 2,447,590 ------------------------------------------------------------ NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from: Investments (5,379,293) (24,798,978) (10,737,868) (10,520,668) In-kind redemptions 7,752,996 48,638,080 3,685,255 9,064,728 ------------------------------------------------------------ Net realized gain (loss) 2,373,703 23,839,102 (7,052,613) (1,455,940) ------------------------------------------------------------ Net change in unrealized appreciation (depreciation) on investments (156,543,551) (364,400,388) (55,512,388) (176,331,185) ------------------------------------------------------------ Net realized and unrealized loss (154,169,848) (340,561,286) (62,565,001) (177,787,125) ------------------------------------------------------------ NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (150,328,993) $ (336,851,421) $(62,281,506) $(175,339,535) ============================================================
/1/ Net of foreign withholding tax of $--, $2,802, $604 and $1,250, respectively. See notes to financial statements. 58 2002 iShares Semi-Annual Report to Shareholders Statements of Changes in Net Assets iSHARES TRUST
iShares S&P iShares S&P 500 500/BARRA Index Fund Growth Index Fund ------------------------------------ ------------------------------------ ------------------- For the six For the six For the six months ended For the months ended For the months ended September 30, 2002 year ended September 30, 2002 year ended September 30, 2002 (Unaudited) March 31, 2002 (Unaudited) March 31, 2002 (Unaudited) - ------------------------------------------------------------------------------------------------------------------------------------ INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 29,759,467 $ 38,836,042 $ 2,344,547 $ 2,481,384 $ 5,848,292 Net realized gain (loss) (130,467,927) 63,144,147 (29,758,513) (15,416,282) (12,866,739) Net change in unrealized appreciation (depreciation) (1,190,133,857) (36,155,639) (125,889,917) 14,927,613 (208,025,410) ------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (1,290,842,317) 65,824,550 (153,303,883) 1,992,715 (215,043,857) ------------------------------------------------------------------------------------- DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income (29,862,750) (37,970,041) (2,273,469) (2,312,036) (5,827,300) ------------------------------------------------------------------------------------- Total distributions to iShareholders (29,862,750) (37,970,041) (2,273,469) (2,312,036) (5,827,300) ------------------------------------------------------------------------------------- iSHARES TRANSACTIONS: iShares sold 1,021,828,648 2,604,641,421 180,437,424 395,680,297 279,510,735 iShares redeemed (677,657,850) (1,300,388,729) (39,293,715) (72,225,408) (100,290,502) ------------------------------------------------------------------------------------- Net increase in net assets from iShares transactions 344,170,798 1,304,252,692 141,143,709 323,454,889 179,220,233 ------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS (976,534,269) 1,332,107,201 (14,433,643) 323,135,568 (41,650,924) NET ASSETS: Beginning of period 4,208,945,997 2,876,838,796 464,655,673 141,520,105 586,050,584 ------------------------------------------------------------------------------------- End of period $3,232,411,728 $4,208,945,997 $ 450,222,030 $ 464,655,673 $ 544,399,660 ===================================================================================== Undistributed net investment income included in net assets at end of period $ 1,976,597 $ 2,079,880 $ 258,571 $ 187,493 $ 307,243 ===================================================================================== iSHARES ISSUED AND REDEEMED: iShares sold 10,550,000 22,350,000 3,650,000 6,700,000 5,450,000 iShares redeemed (7,600,000) (10,500,000) (850,000) (1,300,000) (2,100,000) ------------------------------------------------------------------------------------- Net increase in iShares outstanding 2,950,000 11,850,000 2,800,000 5,400,000 3,350,000 ===================================================================================== iShares S&P 500/BARRA Value Index Fund ------------------ For the year ended March 31, 2002 - ------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 7,216,829 Net realized gain (loss) (13,995,175 Net change in unrealized appreciation (depreciation) (9,270,516) -------------- Net increase (decrease) in net assets resulting from operations (16,048,862) -------------- Distributions to iShareholders: From net investment income (7,172,724) -------------- Total distributions to iShareholders (7,172,724) -------------- iShares Transactions: iShares sold 301,439,774 iShares redeemed (59,871,433) -------------- Net increase in net assets from iShares transactions 241,568,341 -------------- Increase (Decrease) in net assets 218,346,755 NET ASSETS: Beginning of period 367,703,829 -------------- End of period $ 586,050,584 ============== Undistributed net investment income included in net assets at end of period $ 286,251 ============== iSHARES ISSUED AND REDEEMED: iShares sold 5,300,000 iShares redeemed (1,000,000) -------------- Net increase in iShares outstanding 4,300,000 ==============
See notes to financial statements. Financial Statements 59 Statements of Changes in Net Assets (Continued) iSHARES TRUST
iShares S&P Midcap iShares S&P Midcap 400 400/BARRA Index Fund Growth Index Fund ---------------------------------- ---------------------------------- For the six For the six months ended For the months ended For the September 30, 2002 year ended September 30, 2002 year ended (Unaudited) March 31, 2002 (Unaudited) March 31, 2002 - -------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 2,679,385 $ 3,163,082 $ 352,425 $ 228,843 Net realized gain (loss) 976,558 (5,841,964) (17,543,512) (10,683,892) Net change in unrealized appreciation (depreciation) (174,714,179) 63,400,847 (79,865,447) 39,991,393 -------------- -------------- -------------- -------------- Net increase (decrease) in net assets resulting from operations (171,058,236) 60,721,965 (97,056,534) 29,536,344 -------------- -------------- -------------- -------------- DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income (2,713,605) (3,053,610) (346,159) (223,214) -------------- -------------- -------------- -------------- Total distributions to iShareholders (2,713,605) (3,053,610) (346,159) (223,214) -------------- -------------- -------------- -------------- iSHARES TRANSACTIONS: iShares sold 186,318,594 425,727,004 196,415,280 183,707,326 iShares redeemed (23,771,779) (33,829,653) (81,638,725) (122,753,731) -------------- -------------- -------------- -------------- Net increase in net assets from iShares transactions 162,546,815 391,897,351 114,776,555 60,953,595 -------------- -------------- -------------- -------------- INCREASE (DECREASE) IN NET ASSETS (11,225,026) 449,565,706 17,373,862 90,266,725 NET ASSETS: Beginning of period 605,570,574 156,004,868 252,359,186 162,092,461 -------------- -------------- -------------- -------------- End of period $ 594,345,548 $ 605,570,574 $ 269,733,048 $ 252,359,186 ============== ============== ============== ============== Undistributed net investment income included in net assets at end of period $ 115,962 $ 150,182 $ 25,630 $ 19,364 ============== ============== ============== ============== ISHARES ISSUED AND REDEEMED: iShares sold 1,950,000 4,250,000 1,750,000 1,650,000 iShares redeemed (250,000) (350,000) (800,000) (1,100,000) -------------- -------------- -------------- -------------- Net increase in iShares outstanding 1,700,000 3,900,000 950,000 550,000 ============== ============== ============== ============== iShares S&P Midcap 400/BARRA Value Index Fund ---------------------------------- For the six months ended For the September 30, 2002 year ended (Unaudited) March 31, 2002 ---------------------------------- INCREASE (DECREASE) IN NET OPERATIONS: Net investment income $ 3,840,855 $ 3,204,933 Net realized gain (loss) 2,373,703 5,179,642 Net change in unrealized appreciation (depreciation) (156,543,551) 41,089,722 ------------- -------------- Net increase (decrease) in net assets resulting from operations (150,328,993) 49,474,297 ------------- -------------- DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income (3,853,445) (3,078,287) ------------- -------------- Total distributions to iShareholders (3,853,445) (3,078,287) ------------- -------------- iSHARES TRANSACTIONS: iShares sold 238,675,034 364,997,732 iShares redeemed (4,634,233) (34,754,239) ------------- -------------- Net increase in net assets from iShares transactions 234,040,801 330,243,493 ------------- -------------- INCREASE (DECREASE) IN NET ASSETS 79,858,363 376,639,503 NET ASSETS: Beginning of period 454,683,039 78,043,536 ------------- -------------- End of period $ 534,541,402 $ 454,683,039 ============= ============== Undistributed net investment income included in net assets at end of period $ 142,238 $ 154,828 ============= ============== ISHARES ISSUED AND REDEEM iShares sold 2,550,000 4,050,000 iShares redeemed (50,000) (400,000) ------------- -------------- Net increase in iShares outstanding 2,500,000 3,650,000 ============= ==============
See notes to financial statements. 60 2002 iShares Semi-Annual Report to Shareholders Statements of Changes in Net Assets (Continued) iSHARES TRUST
iShares S&P SmallCap iShares S&P SmallCap 600 600/BARRA Index Fund Growth Index Fund ----------------------------------- ---------------------------------- For the six For the six months ended For the months ended For the September 30, 2002 year ended September 30, 2002 year ended (Unaudited) March 31, 2002 (Unaudited) March 31, 2002 - ------------------------------------------------------------------------------------------------------------------ INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 3,709,865 $ 3,171,520 $ 283,495 $ 114,032 Net realized gain (loss) 23,839,102 (3,721,395) (7,052,613) (4,192,798) Net change in unrealized appreciation (depreciation) (364,400,388) 88,741,661 (55,512,388) 17,701,679 ----------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (336,851,421) 88,191,786 (62,281,506) 13,622,913 ----------------------------------------------------------------------- DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income (3,724,373) (2,909,646) (262,467) (121,208) ----------------------------------------------------------------------- Total distributions to iShareholders (3,724,373) (2,909,646) (262,467) (121,208) ----------------------------------------------------------------------- iSHARES TRANSACTIONS: iShares sold 536,950,878 961,277,810 129,179,955 165,841,201 iShares redeemed (300,809,802) (129,829,500) (26,072,802) (15,029,622) ----------------------------------------------------------------------- Net increase in net assets from iShares transactions 236,141,076 831,448,310 103,107,153 150,811,579 ----------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS (104,434,718) 916,730,450 40,563,180 164,313,284 NET ASSETS: Beginning of period 1,124,811,915 208,081,465 191,475,498 27,162,214 ----------------------------------------------------------------------- End of period $ 1,020,377,197 $ 1,124,811,915 $ 232,038,678 $ 191,475,498 ======================================================================= Undistributed net investment income included in net assets at end of period $ 324,071 $ 338,579 $ 21,028 $ - ======================================================================= iSHARES ISSUED AND REDEEMED: iShares sold 4,600,000 8,450,000 1,750,000 2,200,000 iShares redeemed (2,800,000) (1,350,000) (400,000) (200,000) ----------------------------------------------------------------------- Net increase in iShares outstanding 1,800,000 7,100,000 1,350,000 2,000,000 ======================================================================= iShares S&P SmallCap 600/BARRA Value Index Fund ----------------------------------- For the six months ended For the September 30, 2002 year ended (Unaudited) March 31, 2002 - ------------------------------------------------------------------------------ INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 2,447,590 $ 1,844,762 Net realized gain (loss) (1,455,940) 4,270,203 Net change in unrealized appreciation (depreciation) (176,331,185) 41,827,684 ----------------------------------- Net increase (decrease) in net assets resulting from operations (175,339,535) 47,942,649 ----------------------------------- DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income (2,438,476) (1,654,566) ----------------------------------- Total distributions to iShareholders (2,438,476) (1,654,566) ----------------------------------- iSHARES TRANSACTIONS: iShares sold 242,757,465 375,496,634 iShares redeemed (63,449,865) (28,664,094) ----------------------------------- Net increase in net assets from iShares transactions 179,307,600 346,832,540 ----------------------------------- INCREASE (DECREASE) IN NET ASSETS 1,529,589 393,120,623 NET ASSETS: Beginning of period 457,610,292 64,489,669 ----------------------------------- End of period $ 459,139,881 $ 457,610,292 =================================== Undistributed net investment income included in net assets at end of period $ 237,594 $ 228,480 =================================== iSHARES ISSUED AND REDEEMED: iShares sold 2,550,000 4,350,000 iShares redeemed (800,000) (350,000) ----------------------------------- Net increase in iShares outstanding 1,750,000 4,000,000 ===================================
See notes to financial statements. Financial statements 61 Financial Highlights iSHARES TRUST (For a share outstanding throughout each period)
iShares S&P 500 Index Fund ------------------------------------------------------------ Six months Period from ended May 15, 2000/1/ Sep. 30, 2002 Year ended to (Unaudited) Mar. 31, 2002 Mar. 31, 2001 - --------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 115.00 $ 116.24 $ 145.24 ------------------------------------------------------------ Income from investment operations: Net investment income 0.76 1.39 1.06 Net realized and unrealized gain (loss) (33.26) (1.25) (28.98) ------------------------------------------------------------ Total from investment operations (32.50) 0.14 (27.92) ------------------------------------------------------------ Less distributions from: Net investment income (0.77) (1.38) (1.01) Net realized gain - - (0.07) ------------------------------------------------------------ Total distributions (0.77) (1.38) (1.08) ------------------------------------------------------------ Net asset value, end of period $ 81.73 $ 115.00 $ 116.24 ============================================================ Total return (28.36)%/2/ 0.13% (19.32)%/2/ ============================================================ Ratios/Supplemental data: Net assets, end of period (000s) $ 3,232,412 $ 4,208,946 $ 2,876,839 Ratio of expenses to average net assets/3/ 0.09% 0.09% 0.09% Ratio of net investment income to average net assets/3/ 1.54% 1.27% 1.06% Portfolio turnover rate/4/ 4% 3% 5% iShares S&P 500/BARRA Growth Index Fund ------------------------------------------------------------ Six months Period from ended May 22, 2000/1/ Sep. 30, 2002 Year ended to (Unaudited) Mar. 31,2002 Mar. 31, 2001 - --------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 58.82 $ 56.61 $ 82.15 ------------------------------------------------------------ Income from investment operations: Net investment income 0.23 0.43 0.25 Net realized and unrealized gain (loss) (16.74) 2.19 (25.44) ------------------------------------------------------------ Total from investment operations (16.51) 2.62 (25.19) ------------------------------------------------------------ Less distributions from: Net investment income (0.23) (0.41) (0.24) Net realized gain - - (0.11) ------------------------------------------------------------ Total distributions (0.23) (0.41) (0.35) ------------------------------------------------------------ Net asset value, end of period $ 42.08 $ 58.82 $ 56.61 ============================================================ Total return (28.12)%/2/ 4.64% (30.75)%/2/ ============================================================ Ratios/Supplemental data: Net assets, end of period (000s) $ 450,222 $ 464,656 $ 141,520 Ratio of expenses to average net assets/3/ 0.18% 0.18% 0.18% Ratio of net investment income to average net assets/3/ 1.05% 0.82% 0.45% Portfolio turnover rate/4/ 10% 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. 62 2002 iShares Semi-Annual Report to Shareholders Financial Highlights (Continued) iSHARES TRUST (For a share outstanding throughout each period)
iShares S&P 500/BARRA Value Index Fund ----------------------------------------------------------- Six months Period from ended May 22, 2000/1/ Sep. 30, 2002 Year ended to (Unaudited) Mar. 31, 2002 Mar. 31, 2001 - ----------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 55.81 $ 59.31 $ 60.20 ------------- ------------- ------------------ Income from investment operations: Net investment income 0.40 0.83 0.65 Net realized and unrealized gain (loss) (16.49) (3.49) (0.78) ------------- ------------- ------------------ Total from investment operations (16.09) (2.66) (0.13) ------------- ------------- ------------------ Less distributions from: Net investment income (0.41) (0.84) (0.61) Net realized gain - - (0.15) ------------- ------------- ------------------ Total distributions (0.41) (0.84) (0.76) ------------- ------------- ------------------ Net asset value, end of period $ 39.31 $ 55.81 $ 59.31 ============= ============= ================== Total return (28.94)%/2/ (4.48)% (0.27)%/2/ ============= ============= ================== Ratios/Supplemental data: Net assets, end of period (000s) $ 544,400 $ 586,051 $ 367,704 Ratio of expenses to average net assets/3/ 0.18% 0.18% 0.18% Ratio of net investment income to average net assets/3/ 1.88% 1.56% 1.51% Portfolio turnover rate/4/ 13% 17% 9% iShares S&P Midcap 400 Index Fund ----------------------------------------------------------- Six months Period from ended May 22, 2000/1/ Sep. 30, 2002 Year ended to (Unaudited) Mar. 31, 2002 Mar. 31, 2001 - ----------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 108.14 $ 91.77 $ 92.63 ------------- ------------- ------------------ Income from investment operations: Net investment income 0.40 0.75 0.72 Net realized and unrealized gain (loss) (26.71) 16.37 (0.59) ------------- ------------- ------------------ Total from investment operations (26.31) 17.12 0.13 ------------- ------------- ------------------ Less distributions from: Net investment income (0.41) (0.75) (0.69) Net realized gain - - (0.30) ------------- ------------- ------------------ Total distributions (0.41) (0.75) (0.99) ------------- ------------- ------------------ Net asset value, end of period $ 81.42 $ 108.14 $ 91.77 ============= ============= ================== Total return (24.38)%/2/ 18.75% 0.04%/2/ ============= ============= ================== Ratios/Supplemental data: Net assets, end of period (000s) $ 594,346 $ 605,571 $ 156,005 Ratio of expenses to average net assets/3/ 0.20% 0.20% 0.20% Ratio of net investment income to average net assets/3/ 0.87% 0.87% 0.86% Portfolio turnover rate/4/ 4% 14% 32%
/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 63 Financial Highlights (Continued) iSHARES TRUST (For a share outstanding throughout each period)
iShares S&P MidCap 400/BARRA Growth Index Fund ---------------------------------------------------------- Six months Period from ended Jul. 24, 2000/1/ Sep. 30, 2002 Year ended to (Unaudited) Mar. 31, 2002 Mar. 31, 2001 - ------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 117.38 $ 101.31 $ 135.73 ---------------------------------------------------------- Income from investment operations: Net investment income 0.10 0.14 0.01 Net realized and unrealized gain (loss) (30.37) 16.07 (33.95) ---------------------------------------------------------- Total from investment operations (30.27) 16.21 (33.94) ---------------------------------------------------------- Less distributions from: Net investment income (0.10) (0.14) (0.01) Net realized gain - - (0.47) ---------------------------------------------------------- Total distributions (0.10) (0.14) (0.48) ---------------------------------------------------------- Net asset value, end of period $ 87.01 $ 117.38 $ 101.31 ========================================================== Total return (25.80)%/2/ 16.03% (25.08)%/2/ ========================================================== Ratios/Supplemental Data: Net assets, end of period (000s) $ 269,733 $ 252,359 $ 162,092 Ratio of expenses to average net assets/3/ 0.25% 0.25% 0.25% Ratio of net investment income to average net assets/3/ 0.23% 0.15% 0.06% Portfolio turnover rate/4/ 35% 50% 67% iShares S&P MidCap 400/BARRA Value Index Fund ---------------------------------------------------------- Six months Period from ended Jul. 24, 2000/1/ Sep. 30, 2002 Year ended to (Unaudited) Mar. 31, 2002 Mar. 31, 2001 - ------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 98.84 $ 82.15 $ 72.40 ---------------------------------------------------------- Income from investment operations: Net investment income 0.56 1.06 0.78 Net realized and unrealized gain (loss) (23.54) 16.69 9.86 ---------------------------------------------------------- Total from investment operations (22.98) 17.75 10.64 ---------------------------------------------------------- Less distributions from: Net investment income (0.57) (1.06) (0.75) Net realized gain - - (0.14) ---------------------------------------------------------- Total distributions (0.57) (1.06) (0.89) ---------------------------------------------------------- Net asset value, end of period $ 75.29 $ 98.84 $ 82.15 ========================================================== Total return (23.33)%/2/ 21.79% 14.71%/2/ ========================================================== Ratios/Supplemental Data: Net assets, end of period (000s) $ 534,541 $ 454,683 $ 78,044 Ratio of expenses to average net assets/3/ 0.25% 0.25% 0.25% Ratio of net investment income to average net assets/3/ 1.38% 1.43% 1.58% Portfolio turnover rate/4/ 5% 13% 17%
/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 transaction in Creation Units. See notes to financial statements. 64 2002 iShares Semi-Annual Report to Shareholders Financial Highlights (Continued) iSHARES TRUST (For a share outstanding throughout each period)
iShares S&P SmallCap 600 Index Fund ------------------------------------------------------------- Six months Period from ended May 22, 2000/1/ Sep. 30, 2002 Year ended to (Unaudited) Mar. 31, 2002 Mar. 31, 2001 - ---------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 122.93 $ 101.50 $ 97.95 ------------------------------------------------------------- Income from investment operations: Net investment income 0.32 0.57 0.38 Net realized and unrealized gain (loss) (29.73) 21.43 4.63 ------------------------------------------------------------- Total from investment operations (29.41) 22.00 5.01 ------------------------------------------------------------- Less distributions from: Net investment income (0.33) (0.57) (0.34) Net realized gain - - (1.12) ------------------------------------------------------------- Total distributions (0.33) (0.57) (1.46) ------------------------------------------------------------- Net asset value, end of period $ 93.19 $ 122.93 $ 101.50 ============================================================= Total return (23.96)%/2/ 21.74% 5.08%/2/ ============================================================= Ratios/Supplemental Data: Net assets, end of period (000s) $ 1,020,377 $1,124,812 $ 208,081 Ratio of expenses to average net assets/3/ 0.20% 0.20% 0.20% Ratio of net investment income to average net assets/3/ 0.62% 0.60% 0.61% Portfolio turnover rate/4/ 6% 16% 28% iShares S&P SmallCap 600/BARRA Growth Index Fund ------------------------------------------------------------- Six months Period from ended Jul. 24, 2000/1/ Sep. 30, 2002 Year ended to (Unaudited) Mar. 31, 2002 Mar. 31, 2001 ------------------------------------------------------------- Net asset value, beginning of period $ 79.78 $ 67.91 $ 83.34 Income from investment operations: Net investment income 0.08 0.09 0.00/5/ Net realized and unrealized gain (loss) (17.91) 11.87 (14.81) ------------------------------------------------------------- Total from investment operations (17.83) 11.96 (14.81) ------------------------------------------------------------- Less distributions from: Net investment income (0.07) (0.09) (0.00)/5/ Net realized gain - - (0.62) ------------------------------------------------------------- Total distributions (0.07) (0.09) (0.62) ------------------------------------------------------------- Net asset value, end of period $ 61.88 $ 79.78 $ 67.91 ============================================================= Total return (22.36)%/2/ 17.60% (17.86)%/2/ ============================================================= Ratios/Supplemental Data: Net assets, end of period (000s) $ 232,039 $ 191,475 $ 27,162 Ratio of expenses to average net assets/3/ 0.25% 0.25% 0.25% Ratio of net investment income to average net assets/3/ 0.25% 0.14% 0.00%/6/ Portfolio turnover rate/4/ 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. /5/ Rounds to less than 0.01%. See notes to financial statements. Financial Highlights 65 Financial Highlights (Continued) iSHARES TRUST (For a share outstanding throughout each period)
iShares S&P SmallCap 600/BARRA Value Index Fund ---------------------------------------------------------------- Six months Period from ended Jul. 24, 2000/1/ Sep. 30, 2002 Year ended to (Unaudited) Mar. 31, 2002 Mar. 31, 2001 - ------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 94.35 $ 75.87 $ 68.34 ---------------------------------------------------------------- Income from investment operations: Net investment income 0.34 0.60 0.43 Net realized and unrealized gain (loss) (24.77) 18.48 7.82 ---------------------------------------------------------------- Total from investment operations (24.43) 19.08 8.25 ---------------------------------------------------------------- Less distributions from: Net investment income (0.35) (0.60) (0.38) Net realized gain - - (0.34) ---------------------------------------------------------------- Total distributions (0.35) (0.60) (0.72) ---------------------------------------------------------------- Net asset value, end of period $ 69.57 $ 94.35 $ 75.87 ================================================================ Total return (25.95)%/2/ 25.29% 12.13%/2/ ================================================================ Ratios/Supplemental data: Net assets, end of period (000s) $ 459,140 $ 457,610 $ 64,490 Ratio of expenses to average net assets/3/ 0.25% 0.25% 0.25% Ratio of net investment income to average net assets/3/ 0.88% 0.92% 0.98% Portfolio turnover rate/4/ 5% 14% 17%
/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. 66 2002 iShares Semi-Annual Report to Shareholders Notes to the Financial Statements (Unaudited) iSHARES TRUST 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 September 30, 2002, the Trust offered 59 investment portfolios or funds. These financial statements relate only to the iShares S&P 500, iShares S&P 500/BARRA Growth, iShares S&P 500/BARRA Value, iShares S&P MidCap 400, iShares S&P MidCap 400/BARRA Growth, iShares S&P MidCap 400/BARRA Value, iShares S&P SmallCap 600, iShares S&P SmallCap 600/BARRA Growth and iShares S&P SmallCap 600/BARRA Value Index Funds (each a "Fund", collectively the "Funds"). 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. Each of the Funds is classified as a diversified fund under the 1940 Act, except for the iShares S&P 500/BARRA Growth Index Fund, which is classified as a non-diversified fund. Non-diversified funds generally hold stocks of fewer companies than diversified funds and may be more susceptible to the risks associated with these particular companies, or to a single economic, political or regulatory occurrence. The following significant accounting policies are consistently followed by the Trust in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") for investment companies. The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions. Actual results could differ from those estimates. SECURITY VALUATION Equity securities are valued at the last sales price on the primary securities exchange or national securities market on which such securities are traded. Securities not listed on an exchange or national securities market, or securities for which there 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. 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. Notes to the Financial Statements 67 Notes to the Financial Statements (Unaudited) (Continued) iSHARES TRUST At March 31, 2002, the tax year-end of the Funds, 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 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 ---------------------------------------------------------------------------- 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 the Funds. 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. FEDERAL INCOME TAXES Each Fund is treated as a separate entity for federal income tax purposes. It is the policy of each Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its net income and any net gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes was required for the six months ended September 30, 2002. The following Funds had tax basis net capital loss carryforwards at March 31, 2002, the tax year-end of the Funds: ---------------------------------------------------------------------------- Expiring iShares Index Fund 2010 Total ---------------------------------------------------------------------------- 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 ---------------------------------------------------------------------------- Net capital loss carryforwards may be applied against any net realized taxable gains in each succeeding year, or until their respective expiration date, whichever comes first. 68 2002 iShares Semi-Annual Report to Shareholders Notes to the Financial Statements (Unaudited) (Continued) iSHARES TRUST For the six months ended September 30, 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. These reclassifications have no effect on net assets or net asset values per share. The in-kind gains or losses for the six months ended September 30, 2002 are disclosed in the 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 September 30, 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. 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 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 ------------------------------------------------------------ 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. Notes to the Financial Statements 69 Notes to the Financial Statements (Unaudited) (Continued) iSHARES TRUST Barclays Global Investors Services ("BGIS"), a subsidiary of Barclays Global Investors, N.A., may serve as a broker-dealer for the Funds. For the six months ended September 30, 2002, BGIS did not receive any brokerage commissions from the Funds. 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 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 from temporary cash investments or from investment of securities lending collateral are recorded as either interest income or securities lending income, respectively, in the accompanying Statements of Operations. Pursuant to Rule 17a-7 of the 1940 Act, certain Funds executed cross trades for the six months ended September 30, 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 of September 30, 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 six months ended September 30, 2002 were as follows: -------------------------------------------------------------------- iShares Index Fund Purchases Sales -------------------------------------------------------------------- S&P 500 $139,421,184 $140,133,944 S&P 500/BARRA Growth 46,310,763 46,395,710 S&P 500/BARRA Value 78,474,247 78,499,845 S&P MidCap 400 26,993,981 25,009,447 S&P MidCap 400/BARRA Growth 105,032,630 105,068,608 S&P MidCap 400/BARRA Value 26,504,009 25,902,808 S&P SmallCap 600 70,605,529 70,163,004 S&P SmallCap 600/BARRA Growth 64,819,396 64,762,454 S&P SmallCap 600/BARRA Value 29,554,569 35,722,392 -------------------------------------------------------------------- 70 2002 iShares Semi-Annual Report to Shareholders Notes to the Financial Statements (Unaudited) (Continued) iSHARES TRUST In-kind transactions for the six months ended September 30, 2002 were as follows: ---------------------------------------------------------------------- In-kind In-kind iShares Index Fund Purchases Sales ---------------------------------------------------------------------- S&P 500 $1,020,614,589 $676,658,537 S&P 500/BARRA Growth 180,256,295 39,260,719 S&P 500/BARRA Value 279,044,376 100,139,696 S&P MidCap 400 202,397,219 41,887,241 S&P MidCap 400/BARRA Growth 196,409,403 81,643,345 S&P MidCap 400/BARRA Value 319,541,800 86,174,581 S&P SmallCap 600 561,584,366 326,127,678 S&P SmallCap 600/BARRA Growth 129,104,914 26,071,663 S&P SmallCap 600/BARRA Value 330,967,118 145,637,638 ---------------------------------------------------------------------- At September 30, 2002, the aggregate unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:
-------------------------------------------------------------------------------------------------- Tax Unrealized Unrealized Net Unrealized iShares Index Fund Cost Appreciation Depreciation Depreciation -------------------------------------------------------------------------------------------------- S&P 500 $5,034,827,352 $40,760,913 $(1,793,945,354) $(1,753,184,441) S&P 500/BARRA Growth 596,781,431 4,250,453 (149,101,580) (144,851,127) S&P 500/BARRA Value 798,892,434 4,474,317 (248,493,443) (244,019,126) S&P MidCap 400 785,370,594 25,397,272 (165,028,038) (139,630,766) S&P MidCap 400/BARRA Growth 359,489,256 6,087,145 (71,157,019) (65,069,874) S&P MidCap 400/BARRA Value 691,368,458 11,113,526 (127,253,654) (116,140,128) S&P SmallCap 600 1,406,110,228 27,329,622 (314,285,043) (286,955,421) S&P SmallCap 600/BARRA Growth 296,393,794 8,518,302 (50,638,713) (42,120,411) S&P SmallCap 600/BARRA Value 634,610,374 8,004,018 (143,945,697) (135,941,679) --------------------------------------------------------------------------------------------------
4. iSHARES TRANSACTIONS At September 30, 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. Notes to the Financial Statements 71 Notes to the Financial Statements (Unaudited) (Continued) iSHARES TRUST 5. LOANS OF PORTFOLIO SECURITIES Each Fund may lend its investment securities to approved borrowers such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received is required to have a value of at least 102% of the market value of the loaned securities for securities denominated in U.S. dollars and a value of at least 105% for all other securities. The collateral is maintained thereafter, at a value equal to at least 100% of the current market value of the securities on loan. The risks to the Funds of securities lending are that the borrower may not provide additional collateral when required or return the securities when due. As of September 30, 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 September 30, 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, which allegedly covers a mechanism for continuous pricing of exchange traded funds. 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 two 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. 72 2002 iShares Semi-Annual Report to Shareholders Notes: Notes 73 The iShares Family of Funds The following is a list of iShares Funds being offered, along with their respective exchange trading symbols. Please call iShares at 1-800-iShares (1-800-474-2737) to obtain a prospectus for any iShares fund. It contains more complete information, including charges and expenses. Broad Market Fixed Income iShares Dow Jones U.S. Total Market Index Fund (IYY) iShares Lehman 1-3 Year Treasury Bond Fund (SHY) iShares Russell 3000 Index Fund (IWV) iShares Lehman 7-10 Year Treasury Bond Fund (IEF) iShares Russell 3000 Growth Index Fund (IWZ) iShares Lehman 20+ Year Treasury Bond Fund (TLT) iShares Russell 3000 Value Index Fund (IWW) iShares GS $ InvesTop/TM/ Corporate Bond Fund (LQD) Large Cap Global Sector iShares Russell 1000 Index Fund (IWB) iShares S&P Global Energy Sector Index Fund (IXC) iShares Russell 1000 Growth Index Fund (IWF) iShares S&P Global Financials Sector Index Fund (IXG) iShares Russell 1000 Value Index Fund (IWD) iShares S&P Global Healthcare Sector Index Fund (IXJ) iShares S&P 100 Index Fund (OEF) iShares S&P Global Technology Sector Index Fund (IXN) iShares S&P 500 Index Fund (IVV) iShares S&P Global Telecommunications Sector Index Fund (IXP) iShares S&P 500/BARRA Growth Index Fund (IVW) iShares S&P 500/BARRA Value Index Fund (IVE) International/Broad Market iShares MSCI EAFE Index Fund (EFA) Mid Cap iShares Russell Midcap Index Fund (IWR) International/Regional iShares Russell Midcap Growth Index Fund (IWP) iShares MSCI EMU Index Fund (EZU) iShares Russell Midcap Value Index Fund (IWS) iShares MSCI Pacific ex-Japan Index Fund (EPP) iShares S&P MidCap 400 Index Fund (IJH) iShares S&P Europe 350 Index Fund (IEV) iShares S&P MidCap 400/BARRA Growth Index Fund (IJK) iShares S&P MidCap 400/BARRA Value Index Fund (IJJ) International/Developed Country iShares MSCI Australia Index Fund (EWA) Small Cap iShares MSCI Austria Index Fund (EWO) iShares Russell 2000 Index Fund (IWM) iShares MSCI Belgium Index Fund (EWK) iShares Russell 2000 Growth Index Fund (IWO) iShares MSCI Canada Index Fund (EWC) iShares Russell 2000 Value Index Fund (IWN) iShares MSCI France Index Fund (EWQ) iShares S&P SmallCap 600 Index Fund (IJR) iShares MSCI Germany Index Fund (EWG) iShares S&P SmallCap 600/BARRA Growth Index Fund (IJT) iShares MSCI Hong Kong Index Fund (EWH) iShares S&P SmallCap 600/BARRA Value Index Fund (IJS) iShares MSCI Italy Index Fund (EWI) iShares MSCI Japan Index Fund (EWJ) Sector & Industry iShares MSCI Netherlands Index Fund (EWN) iShares Cohen & Steers Realty Majors Index Fund (ICF) iShares MSCI Singapore Index Fund (EWS) iShares Dow Jones U.S. Basic Materials Sector Index Fund (IYM) iShares MSCI Spain Index Fund (EWP) iShares Dow Jones U.S. Chemicals Index Fund (IYD) * iShares MSCI Sweden Index Fund (EWD) iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund (IYC) iShares MSCI Switzerland Index Fund (EWL) iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund (IYK) iShares MSCI United Kingdom Index Fund (EWU) iShares Dow Jones U.S. Energy Sector Index Fund (IYE) iShares S&P/TOPIX 150 Index Fund (ITF) iShares Dow Jones U.S. Financial Sector Index Fund (IYF) iShares S&P/TSE 60 Index Fund (IKC) * iShares Dow Jones U.S. Financial Services Index Fund (IYG) iShares Dow Jones U.S. Healthcare Sector Index Fund (IYH) International/Emerging Country iShares Dow Jones U.S. Industrial Sector Index Fund (IYJ) iShares MSCI Brazil Index Fund (EWZ) iShares Dow Jones U.S. Internet Index Fund (IYV) * iShares MSCI Malaysia Index Fund (EWM) iShares Dow Jones U.S. Real Estate Index Fund (IYR) iShares MSCI Mexico Index Fund (EWW) iShares Dow Jones U.S. Technology Sector Index Fund (IYW) iShares MSCI South Korea Index Fund (EWY) iShares Dow Jones U.S. Telecommunications Sector Index Fund (IYZ) iShares MSCI Taiwan Index Fund (EWT) iShares Dow Jones U.S. Utilities Sector Index Fund (IDU) iShares S&P Latin America 40 Index Fund (ILF) iShares Goldman Sachs Natural Resources Index Fund (IGE) iShares Goldman Sachs Networking Index Fund (IGN) Global/Broad Market iShares Goldman Sachs Semiconductor Index Fund (IGW) iShares S&P Global 100 Index Fund (IOO) iShares Goldman Sachs Software Index Fund (IGV) iShares Goldman Sachs Technology Index Fund (IGM) * Fund Termination and Liquidation Anticipated On December iShares Nasdaq Biotechnology Index Fund (IBB) 13, 2002.
This advertising section does not constitute part of the 2002 Semi-Annual Report. iShares are not sponsored or endorsed by Goldman, Sachs & Co. or Lehman Brothers, nor are they sponsored, endorsed, sold or promoted by Cohen & Steers Capital Management, Inc., Dow Jones & Company, Inc., Morgan Stanley Capital International, The Nasdaq Stock Market, Inc., Frank Russell Company, or Standard & Poor's. None of these companies make any representation regarding the advisability of investing in iShares. Neither SEI nor BGI, nor any of their affiliates, are affiliated with Goldman, Sachs & Co. or Lehman Brothers. "GS $ InvesTop/TM/," "GS $ InvesTop/TM/ Index," "GS $ Investment Grade Index/TM/" and "Goldman Sachs/(R)/" are trademarks of Goldman, Sachs & Co. The methodology of the GS $ InvesTop/TM/ Index is owned by Goldman, Sachs & Co., may be covered by one or more patents or pending patent applications and is provided under license from Goldman, Sachs & Co. 74 2002 iShares Semi-annual Report to Shareholders iShares are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors (BGFA) serves as an advisor 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. Investors Bank & Trust Company serves as administrator,custodian, securities lending agent and transfer agent. iShares are not sponsored, endorsed, sold or promoted by Standard & Poor's, nor does this company make any representation regarding the advisability of investing in iShares. Investing involves risk, including possible loss of principal. (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. [GRAPHIC] iShares(R) Industrial strength investment tools from BARCLAYS GLOBAL INVESTORS 1-800-iShares (474-2737) www.iShares.com BGI-F-007-03002 iShares(R) 2002 SEMI-ANNUAL REPORT TO SHAREHOLDERS September 30, 2002 [PICTURE] INDUSTRIAL STRENGTH INVESTMENT TOOLS iSHARES RUSSELL 3000 INDEX FUND iSHARES RUSSELL 3000 GROWTH INDEX FUND iSHARES RUSSELL 3000 VALUE INDEX FUND iSHARES RUSSELL MIDCAP INDEX FUND iSHARES RUSSELL MIDCAP GROWTH INDEX FUND iSHARES RUSSELL MIDCAP VALUE INDEX FUND Table of Contents Shareholder Letter....................................................... 1 Market Overview.......................................................... 3 Managers' Discussion & Analysis.......................................... 6 Schedules of Investments................................................. 10 iShares Russell 3000 Index Fund........................................ 10 iShares Russell 3000 Growth Index Fund................................. 49 iShares Russell 3000 Value Index Fund.................................. 73 iShares Russell Midcap Index Fund...................................... 100 iShares Russell Midcap Growth Index Fund............................... 111 iShares Russell Midcap Value Index Fund................................ 117 Financial Statements..................................................... 125 Financial Highlights..................................................... 129 Notes to the Financial Statements........................................ 132 iShares Family of Funds.................................................. 138
To Our Shareholders While the second half of 2001 was a difficult period for us all, 2002 has also been a time of tumultuous market events. As a whole, the past year has seen scores of layoffs, company closings, and corporate accounting scandals in the wake of the emotional shock of September 11. The past year has been truly remarkable for iShares considering the market environment. By the close of our second 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. However, iShares has followed a very different course. Instead of shrinking in size, iShares' assets under management grew to over $24 billion as of September 30, 2002. In fact, the iShares family of funds became the nation's third fastest growing family of equity funds/2/ during the period June 2001 through June 2002, surpassing some of the most established and best-known mutual fund groups. In July, iShares celebrated another milestone: the launch of the first-ever fixed income exchange traded funds. These four fixed income iShares funds -- three bond funds based on Lehman U.S. Treasury indexes, and one based on a Goldman Sachs(R) corporate bond index -- were greeted with an enthusiastic reception from the investment community. These new funds attracted $3 billion in assets in their first week of trading. That is an impressive beginning considering that total inflows for all U.S. bond mutual funds combined was $50 billion for the first six months of 2002./3/ With a total of 81 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). Total assets under management for all iShares funds have grown tenfold since they were first launched in May 2000. We believe this is a result of investors and their advisors recognizing that iShares are not merely an investment choice, but an important investment tool. At BGI we consider the iShares family of funds "industrial strength" for four simple reasons. We think you should keep these reasons in mind when you and your advisor meet to discuss your investment objectives, and then evaluate, and perhaps rebalance your portfolio. First, iShares strive to obtain a fundamental goal of institutional investing: taking less of a bite out of a fund's returns. iShares seek to achieve this by minimizing capital gains distributions 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./4/ iShares, on the other hand, are managed in a way that keeps capital gains distributions to a minimum. For example, during the calendar year 2001 none of the domestic iShares funds distributed any capital gains./5/ Additionally, the fees charged by the iShares Funds are typically about half of other actively managed mutual funds./6/ Second, iShares embody a key tactic of institutional investors: uncomplicated diversification. The benefits of diversification, as compared to picking individual stocks, are well documented. Although it's possible to diversify a portfolio by hand-selecting a wide variety of securities, to do it effectively is complicated and time-consuming. This is a reason why $1.56 trillion in institutional assets/7/ are invested in index funds. _____________________ /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/Financial Research Corporation (FRC) database, BGI analysis. /4/Jonathan Clements, Fund Distributions are a Taxing Problem; How the Tax Man Dines on Your Funds, The Wall Street Journal, August 1999. /5/Past performance is no guarantee of future results. There can be no assurance that iShares will not generate capital gains distributions in the future. /6/Source: Morningstar Principia, BGI analysis 6/01. /7/Source: Pensions & Investments, 5/27/02. Shareholder Letter 1 Third, iShares embody a key strategy of institutional investors: Modular Asset Allocation. Each iShare fund focuses on a very specific slice of the equity and fixed income markets. With so many different iShares to choose from, investors have tremendous flexibility in structuring their portfolios to meet specific needs. The fourth reason iShares are "industrial strength" is that they are advised by Barclays Global Investors, one of the world's largest institutional asset managers./8/ BGI manages money for over two thousand institutional clients around the world. Also, BGI has a longer index-based investing track record than any other fund manager. In fact, over thirty years ago it was BGI that created the world's first index strategy. Throughout the coming year we will be working closely with the financial advisor community to introduce innovative strategies and structures that we have developed for their clients' portfolios. And we continue to enhance and improve the tools, data and resources on our Web site. If you haven't visited www.iShares.com in a while, we invite you to do so and learn more about iShares. In fact, Forbes Magazine named iShares.com "Best of the Web" among all ETF sites./9/ We think you'll agree everything about iShares really is industrial strength. On behalf of the iShares family of funds 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 iShares are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors (BGFA) serves as an advisor to iShares. Barclays Global Investors Services (BGIS) assists in the marketing of iShares. BGFA and BGIS are subsidiaries of Barclays Global Investors, N.A., none of which is affiliated with SEI. For complete information, including charges and expenses, request a prospectus by calling 1-800-iSHARES (1-800-474-2737). Read it carefully before you invest. There are risks involved with investing, including possible loss of principal. Diversification may not protect against market risk. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Mutual funds and iShares are obliged to distribute portfolio gains to shareholders by year-end. These gains may be generated due to index rebalancing or to meet diversification requirements. Your own iShares trading, too, will generate tax consequences and transaction expenses. Certain traditional mutual funds can be tax efficient as well. Past performance does not guarantee future results. iShares are not sponsored or endorsed by Goldman, Sachs & Co. or Lehman Brothers, nor are they sponsored, endorsed, sold or promoted by Cohen & Steers Capital Management, Inc., Dow Jones & Company, Inc., Morgan Stanley Capital International, The Nasdaq Stock Market, Inc., Frank Russell Company, or Standard & Poor's. None of these companies make any representation regarding the advisability of investing in iShares. Neither SEI nor BGI, nor any of their affiliates, are affiliated with Goldman, Sachs & Co. or Lehman Brothers. "GS $ InvesTop(TM)" and "Goldman Sachs(R)" are trademarks of Goldman, Sachs & Co. _____________________ /8/Source: Pensions & Investments, 5/27/02. /9/Forbes Winter 2001. 2 2002 iShares Semi-Annual Report to Shareholders Market Overview U.S. Equity Markets U.S. equities fell heavily in the six months under review. Stocks rallied briefly in August, but this proved to be yet another false dawn. By the end of September, the broader market indices were back languishing at six-year lows. These latest falls mean that the S&P 500 Index has almost halved in value since its peak two years ago, and some sectors, notably telecommunications and technology, have lost considerably more than that. The current bear market is now on par with the 1970s bear market in terms of the scale of decline. However, in terms of duration, this is already the longest bear market in 60 years. With hindsight, many believe equities had become significantly overvalued during the technology bubble. Therefore, some correction was inevitable, but a number of factors have added to the gloom this year. Chief among these were the corporate accounting scandals. Sadly, these were not confined to one errant corporation but spread among many. As a result, investors have not only had to contend with a severe profits recession, but learn how to differentiate real from virtual profits. It is little wonder, given such profound uncertainties, that investors have been applying larger risk premiums to their equity valuations. This year's further collapse in share prices, in turn, has taken a toll on investor confidence and the wider economy. The Federal Reserve Board (the "Fed") has done a remarkable job in keeping the economy moving both before and after the events of September 11. Manufacturing has been in a deep recession, but the broader economy has held up reasonably well so far. This has been due largely to continued resilient consumer spending fueled by low interest rates and a buoyant housing market. However, even with interest rates at 40-year lows, industrial production has fallen since the summer and business investment has been cut. The danger has been that, after showing some improvement earlier this year, the manufacturing sector may relapse, causing the economy to suffer a so-called "double-dip" recession. If these factors were not enough, investors also have had to contend with the prospect of a second Gulf War. Such geopolitical risk adds greatly to market uncertainties, while the higher oil price sparked by war fears could further slow economic recovery. Against this background, forecasts for economic growth have been cut back. With profits statements remaining uniformly downbeat, investors have had little incentive to raise their risk appetite, preferring instead to seek the relative safety of bonds and cash. U.S. Fixed Income Markets For all the reasons equity prices have dropped this year, bond prices have risen. Due to the inverse relationship between bond prices and bond yields, yields have fallen during the period. By the end of the six-month period, yields on the 30-year bond were at the lowest levels recorded since they were first introduced in the 1970s. Yields on 5- and 10-year Treasuries had fallen to their lowest levels since 1958. The threat of war, the diminishing prospect of sustained economic recovery and the sheer distrust of equities in the corporate climate have all added to the relative attractiveness of bonds. The spike in oil prices to 19-month highs may in the past have raised the unwelcome specter of inflation and thus have been harmful to bonds. But in the low inflation environment of the reporting period, producers have had much greater difficulty passing on price increases. Therefore, rising oil prices have been much more likely to bear down on demand as consumers have absorbed higher oil prices by cutting expenditure on other discretionary purchases. There were no changes to the targeted federal funds rate over the period, but the Fed's policy bias seemed to shift toward one of greater ease over the summer as equity prices tumbled and doubts about the strength of the economic recovery accumulated. This perceived shift helped to drag bond yields lower, particularly at the short end of the curve. So far, the prospect of increased bond supply on the back of an escalating federal budget deficit has had only limited impact on investor enthusiasm for U.S. Treasuries. International Equity Markets The decline in U.S. equities over the period was echoed to a greater or lesser extent in markets around the world. Though the accounting scandals were confined largely to the U.S., the negative effect on investor confidence was global. The hesitant nature of the U.S. economic Market Overview 3 recovery also has had ramifications around the globe, while geopolitical risk in the Middle East and rising oil prices have affected all markets. In Europe, economic growth has been particularly sluggish, with the German economy most seriously affected by the downturn in international trade. However, it is not just a squeeze on exports that has dampened growth. Domestic demand has fallen due to lower business investment. Consumers, too, have been reluctant to spend. High unemployment has affected large parts of the eurozone and there have been growing doubts that the operation of a single monetary policy offers sufficient flexibility to tackle the problem. Room for policy maneuver has been further constrained by the Stability and Growth Pact, which was adopted in 1997 when the monetary union was being established and limits the size of budget deficits across the zone. While UK equities have also fallen heavily with concerns over the pensions industry and the solvency of the insurance sector, the economy has fared somewhat more favorably, helped by a more expansive fiscal policy and a strong housing market which, like the U.S., has supported consumer confidence and spending. Japanese equities plumbed new depths over the period with the Nikkei Dow Index recording a 19-year low. Concern has again focused on the stability of the banking system and the mountain of bad debts that continued to undermine the efficient functioning of the economy. Japanese consumer prices have now fallen for three years in a row. Such deflation has raised the real value of debt and reduced the effectiveness of monetary policy. Meanwhile the government has continued to balk at the large-scale injection of public funds deemed necessary to put the banking system back on a sounder footing. /S/ Francis Enderle Francis Enderle Chief Investment Officer, Global Indexing 4 2002 iShares Semi-Annual Report to Shareholders THIS PAGE INTENTIONALLY LEFT BLANK. 5 Managers' Discussion & Analysis iSHARES RUSSELL 3000 INDEX FUNDS Performance as of 9/30/02
Average Annual Total Returns Cumulative Total Returns ---------------------------------------------------- ------------------------- Year Ended 9/30/02 Inception to 9/30/02 Inception to 9/30/02 ------------------------- ------------------------- ------------------------- iSHARES INDEX FUND NAV MARKET INDEX NAV MARKET INDEX NAV MARKET INDEX Russell 3000 (19.09)% (19.31)% (18.66)% (18.70)% (18.79)% (18.53)% (38.67)% (38.82)% (38.35)% Russell 3000 Growth (22.56)% (22.64)% (22.03)% (34.13)% (34.20)% (33.98)% (59.91)% (60.00)% (59.71)% Russell 3000 Value (16.09)% (16.20)% (15.74)% (9.01)% (9.09)% (8.82)% (18.67)% (18.82)% (18.30)%
"Total returns for the period since inception" are calculated from the inception date of each Fund (05/22/00, 07/24/00 and 07/24/00, respectively). "Average annual total return" represents the average annual change in value of an investment over the periods indicated. "Cumulative total return" represents the total 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 determined by using the midpoint between the highest bid and the lowest offer on the Exchange on which the iShares of the Fund are listed for trading, as of the time that the Fund's NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (05/26/00, 07/28/00 and 07/28/00, respectively), the net asset value of the Fund is used as a proxy for secondary market trading price to calculate market returns. 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 RUSSELL 3000 INDEX [PIE CHART] Consumer Discretionary 13.62% Consumer Staples 9.38% Energy 5.82% Financials 22.02% Health Care 15.77% Industrials 11.35% Information Technology 12.42% Materials 3.01% Telecommunication Services 3.33% Utilities 3.28% RUSSELL 3000 GROWTH INDEX [PIE CHART] Consumer Discretionary 15.12% Consumer Staples 11.71% Energy 1.46% Financials 10.50% Health Care 26.98% Industrials 13.28% Information Technology 19.71% Materials 0.67% Telecommunication Services 0.44% Utilities 0.13% RUSSELL 3000 VALUE INDEX [PIE CHART] Consumer Discretionary 12.08% Consumer Staples 6.98% Energy 10.32% Financials 33.93% Health Care 4.19% Industrials 9.36% Information Technology 4.89% Materials 5.41% Telecommunication Services 6.31% Utilities 6.53% 6 2002 iShares Semi-Annual Report to Shareholders The iShares Russell 3000 Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Russell 3000 Index. For the six-month period ended September 30, 2002 (the "reporting period"), the Index declined 28.06%. The iShares Russell 3000 Growth Index Fund and iShares Russell 3000 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 Russell 3000 Index, as measured by the Russell 3000 Growth Index and the Russell 3000 Value Index, respectively. During the reporting period, the Russell 3000 Growth Index declined 31.10% and the Russell 3000 Value Index declined 25.47%. For the same period, the iShares Russell 3000 Index Fund declined 28.06%; the iShares Russell 3000 Growth Index Fund was down 31.15% and the iShares Russell 3000 Value Index Fund declined 25.47%. Market-weary investors found no relief during the reporting period. The same themes that had weighed on equity markets in recent quarters continued relentlessly, eroding investor confidence and driving down stock prices. Economic news continued to portray an economy not yet out of the throes of recession: although GDP growth for the first quarter of 2002 was a heady 6.1%, the second quarter GDP growth was a much slower 1.3%. Consumer spending, which had been a bright spot on the economic landscape, appeared to have peaked. Labor markets remained soft, and the dollar continued its slide against major foreign currencies. Investigations into corporate governance problems expanded to include even more companies. Corporations continued to announce layoffs and issue earnings warnings at a steady rate. As tensions in the Middle East mounted, a possible invasion of Iraq further clouded the outlook for economic recovery. Every major industry group within the Russell 3000 Index posted double-digit losses over the reporting period. Technology-related groups suffered the largest declines: information technology (12.42% of the Index as of September 30, 2002) lost 46.70%, while telecommunications services (3.33% of the Index as of September 30, 2002) fell 43.76%. Utilities (3.28% of the Index as of September 30, 2002) declined 31.73%, consumer discretionary stocks (13.62% of the Index as of September 30, 2002) fell 27.47%, and materials (3.01% of the Index as of September 30) lost 25.32%. The best performing group was consumer staples (9.38% of the Index), which fell 14.12%. Within the Index's ten largest holdings, Citigroup (1.83% of the Index as of September 30, 2002) registered the biggest loss over the reporting period with a decline of 35.44%. General Electric, the largest Index holding at 2.93% of the Index as of September 30, declined 33.34%. Microsoft (2.34% of the Index as of September 30, 2002) fell 27.47%, Pfizer (2.17% of the Index as of September 30, 2002) fell 26.43%, and Exxon Mobil (2.59% of the Index as of September 30) lost 26.33%. Out of the Index's ten largest holdings, the sole company finishing the reporting period in positive territory was Procter & Gamble (1.39% of the Index), which managed to eke out a 0.91% return. Managers' Discussion & Analysis 7 Managers' Discussion & Analysis iSHARES RUSSELL Midcap INDEX FUNDS Performance as of 9/30/02
Average Annual Total Returns Cumulative Total Returns ---------------------------------------------------- -------------------------- Year Ended 9/30/02 Inception to 9/30/02 Inception to 9/30/02 ------------------------- ------------------------- -------------------------- iSHARES INDEX FUND NAV MARKET INDEX NAV MARKET INDEX NAV MARKET INDEX Russell Midcap (8.99)% (8.75)% (8.90)% (19.58)% (19.59)% (19.53)% (23.15)% (23.15)% (23.12)% Russell Midcap Growth (15.67)% (15.54)% (15.36)% (29.89)% (29.91)% (29.69)% (34.89)% (34.91)% (34.70)% Russell Midcap Value (5.46)% (5.33)% (5.40)% (13.56)% (13.61)% (13.50)% (16.14)% (16.20)% (16.10)% - -----------------------------------------------------------------------------------------------------------
"Total returns for the period since inception" are calculated from the inception date of each Fund (07/17/01, 07/17/01 and 07/17/01, respectively). "Average annual total return" represents the average annual change in value of an investment over the periods indicated. "Cumulative total return" represents the total 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 determined by using the midpoint between the highest bid and the lowest offer on the Exchange on which the iShares of the Fund are listed for trading, as of the time that the Fund's NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (07/20/01, 07/20/01 and 07/20/01, respectively), the net asset value of the Fund is used as a proxy for secondary market trading price to calculate market returns. 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 RUSSELL MIDCAP INDEX [PIE CHART] Consumer Discretionary 19.00% Consumer Staples 4.09% Energy 5.77% Financials 21.39% Health Care 12.75% Industrials 11.50% Information Technology 11.28% Materials 5.72% Telecommunication Services 1.07% Utilities 7.43% RUSSELL MIDCAP GROWTH INDEX [PIE CHART] Consumer Discretionary 22.38% Consumer Staples 4.08% Energy 4.41% Financials 6.16% Health Care 25.15% Industrials 14.03% Information Technology 19.53% Materials 2.56% Telecommunication Services 1.33% Utilities 0.37% RUSSELL MIDCAP VALUE INDEX [PIE CHART] Consumer Discretionary 16.65% Consumer Staples 4.10% Energy 6.72% Financials 32.00% Health Care 4.12% Industrials 9.73% Information Technology 5.54% Materials 7.92% Telecommunication Services 0.88% Utilities 12.34% 8 2002 iShares Semi-Annual Report to Shareholders The iShares Russell Midcap Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Russell Midcap Index. For the six-month period ended September 30, 2002 (the "reporting period"), the Index declined 25.50%. The iShares Russell Midcap Growth Index Fund and iShares Russell Midcap 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 Russell Midcap Index, as measured by the Russell Midcap Growth Index and the Russell Midcap Value Index, respectively. During the reporting period, the Russell Midcap Growth Index declined 32.30% and the Russell Midcap Value Index declined 21.79%. For the reporting period, the iShares Russell Midcap Index Fund declined 25.44%; the iShares Russell Midcap Growth Index Fund was down 32.35% and the iShares Russell Midcap Value Index Fund declined 21.73%. Equity markets continued to face downward pressure during the reporting period. The economic outlook still failed to show clear signs of recovery: a strong first quarter GDP growth figure of 6.1% gave cause for optimism, but was followed by a tepid 1.3% figure for the second quarter. Manufacturing activity slowed, and the economy created fewer jobs than had been anticipated. The dollar continued to slide against major foreign currencies. Notably, consumer confidence, which had risen strongly following the September 11, 2001 attacks, appeared to have peaked during the reporting period. Consumer confidence provides indications of consumer spending levels, which generally represent two-thirds of GDP. Within Corporate America, the picture remained bleak as companies increasingly missed their earnings targets. And, as Americans marked the one-year anniversary of the tragic events of last September 11, continued geopolitical tension and the threat of war in the Middle East heightened, contributing to stock market jitters. As the possibility of an invasion in Iraq raised concerns about supply of oil from the area, the price of oil surged to more than $30 per barrel. In response to economic conditions, the Federal Reserve Board left rates unchanged during the period. The widespread decline in equities left no industry group untouched, but growth-oriented technology areas bore the brunt of the declines. Within the Russell Midcap Index, information technology (11.28% of the Index as of September 30, 2002) declined 53.00%, and telecommunications services (1.07% of the Index as of September 30, 2002) fell 39.27%. Utilities (7.43% of the Index as of September 30, 2002) lost 26.82%, industrials (11.50% of the Index as of September 30, 2002) fell 25.04%, and materials (5.72% of the Index as of September 30, 2002) declined 24.14%. Reflecting the decline in consumer confidence, consumer discretionary (19.00% of the Index as of September 30) and consumer staples (4.09% of the Index as of September 30) fell 21.57% and 10.73%, respectively. In terms of the Index's ten largest individual holdings, performance was mixed over the reporting period. The largest holding, Wellpoint Health Networks (0.56% of the Index as of September 30) gained 15.12%. Intuit (0.46% of the Index as of September 30, 2002) gained 18.69%. Anthem (0.48% of the Index as of September 30) returned 12.91%. On the negative side, Praxair (0.44% of the Index as of September 30) fell 13.94%, and FirstEnergy (0.44% of the Index) lost 11.52%. Managers' Discussion & Analysis 9 Schedule of Investments (Unaudited) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- COMMON STOCKS - 99.86% - ------------------------------------------------------------------- General Electric Co. 824,646 $ 20,327,524 Exxon Mobil Corp. 562,728 17,951,023 Microsoft Corp./1/ 371,553 16,251,728 Pfizer Inc. 518,232 15,039,093 Johnson & Johnson 249,878 13,513,402 Citigroup Inc. 427,198 12,666,421 Wal-Mart Stores Inc. 226,018 11,129,126 American International Group Inc. 190,865 10,440,315 Procter & Gamble Co. 107,880 9,642,314 Merck & Co. Inc. 187,967 8,591,972 International Business Machines Corp. 142,072 8,295,584 Bank of America Corp. 127,790 8,153,002 Coca-Cola Co. (The) 168,357 8,074,402 Intel Corp. 554,908 7,707,672 Philip Morris Companies Inc. 177,528 6,888,086 Wells Fargo & Company 141,907 6,834,241 Cisco Systems Inc./1/ 607,269 6,364,179 Verizon Communications Inc. 225,995 6,201,303 ChevronTexaco Corp. 88,646 6,138,736 SBC Communications Inc. 277,240 5,572,524 PepsiCo Inc. 146,752 5,422,486 Viacom Inc. "B"/1/ 129,397 5,247,048 Abbott Laboratories 129,577 5,234,911 Home Depot Inc. 195,097 5,092,032 Fannie Mae 82,650 4,920,981 Lilly (Eli) and Co. 79,935 4,423,603 Dell Computer Corp./1/ 187,777 4,414,637 Medtronic Inc. 100,866 4,248,476 Pharmacia Corp. 107,339 4,173,340 AOL Time Warner Inc./1/ 355,644 4,161,035 Amgen Inc./1/ 98,015 4,087,225 Bristol-Myers Squibb Co. 160,828 3,827,706 AT&T Corp. 316,785 3,804,588 Wachovia Corp. 113,675 3,716,036 Anheuser-Busch Companies Inc. 72,848 3,686,109 Bank One Corp. 97,561 3,648,781 3M Co. 32,355 3,558,079 Wyeth 110,123 3,501,911 Freddie Mac 57,646 3,222,411 JP Morgan Chase & Co. 165,370 3,140,376 Morgan Stanley 91,452 3,098,394 American Express Co. 97,917 3,053,052 Du Pont (E.I.) de Nemours & Co. 82,542 2,977,290 U.S. Bancorp 158,713 2,948,888 BellSouth Corp. 155,625 2,857,275 Oracle Corp./1/ 342,131 2,689,150 Lowe's Companies Inc. 64,439 2,667,775 Hewlett-Packard Co. 224,737 2,622,681 Walgreen Co. 85,040 2,615,830 Gillette Co. (The) 87,772 2,598,051 Fifth Third Bancorp 42,413 2,596,948 ConocoPhillips 56,162 2,596,931 Schering-Plough Corp. 121,730 2,595,284 Walt Disney Co. (The) 169,472 2,565,806 Washington Mutual Inc. 80,927 2,546,773 Colgate-Palmolive Co. 45,474 2,453,322 Kimberly-Clark Corp. 43,109 2,441,694 Merrill Lynch & Co. Inc. 71,314 2,349,796 Cardinal Health Inc. 37,490 2,331,878 Boeing Co. (The) 66,437 2,267,495 Target Corp. 75,363 2,224,716 United Technologies Corp. 39,266 2,218,136 Texas Instruments Inc. 144,076 2,128,003 Allstate Corp. (The) 58,883 2,093,291 Dow Chemical Co. (The) 75,399 2,059,147 United Parcel Service Inc. 32,369 2,024,034 Lockheed Martin Corp. 31,098 2,011,108 Tenet Healthcare Corp./1/ 40,597 2,009,552 UnitedHealth Group Inc. 22,591 1,970,387 HCA Inc. 40,906 1,947,535 Motorola Inc. 188,735 1,921,322 Marsh & McLennan Companies Inc. 45,466 1,893,204 McDonald's Corp. 105,621 1,865,267 General Motors Corp. "A" 46,603 1,812,857 Automatic Data Processing Inc. 51,568 1,793,019 First Data Corp. 63,481 1,774,294 FleetBoston Financial Corp. 87,002 1,768,751 QUALCOMM Inc./1/ 64,037 1,768,702 Bank of New York Co. Inc. (The) 60,426 1,736,643 10 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Southern Co. 58,542 $ 1,684,839 Comcast Corp. "A"/1/ 78,653 1,640,702 MBNA Corp. 88,221 1,621,502 Gannett Co. Inc. 22,192 1,601,819 Applied Materials Inc./1/ 136,338 1,574,704 Sysco Corp. 55,195 1,566,986 Liberty Media Corp. "A"/1/ 215,653 1,548,389 Emerson Electric Co. 35,070 1,540,976 Baxter International Inc. 49,961 1,526,309 Clear Channel Communications Inc./1/ 42,784 1,486,744 Ford Motor Company 150,653 1,476,399 Honeywell International Inc. 67,939 1,471,559 Kohls Corp./1/ 24,172 1,469,899 National City Corp. 50,612 1,443,960 BB&T Corp. 39,869 1,397,010 Prudential Financial Inc./1/ 48,792 1,393,500 Alcoa Inc. 70,365 1,358,044 General Mills Inc. 30,517 1,355,565 Duke Energy Corp. 68,933 1,347,640 International Paper Co. 40,167 1,341,176 Goldman Sachs Group Inc. (The) 20,079 1,325,816 AFLAC Inc. 43,093 1,322,524 Exelon Corp. 26,827 1,274,282 SunTrust Banks Inc. 20,712 1,273,374 FedEx Corp. 24,762 1,239,833 General Dynamics Corp. 15,056 1,224,504 Costco Wholesale Corp./1/ 37,763 1,222,388 Union Pacific Corp. 20,964 1,213,187 Sara Lee Corp. 65,287 1,194,099 Dominion Resources Inc. 23,096 1,171,660 Harley-Davidson Inc. 25,213 1,171,144 SLM Corp. 12,183 1,134,725 Waste Management Inc. 48,079 1,121,202 ConAgra Foods Inc. 44,784 1,112,882 Forest Laboratories Inc. "A"/1/ 13,348 1,094,669 Illinois Tool Works Inc. 18,506 1,079,455 Household International Inc. 38,044 1,077,026 Travelers Property Casualty Corp. "B"/1/ 78,929 1,067,909 Caterpillar Inc. 28,666 1,066,949 State Street Corp. 27,130 1,048,303 Alltel Corp. 25,925 1,040,370 Northrop Grumman Corp. 8,125 1,007,825 Lehman Brothers Holdings Inc. 20,330 997,187 PNC Financial Services Group 23,581 994,411 McGraw-Hill Companies Inc. (The) 16,148 988,581 Heinz (H.J.) Co. 29,241 975,772 Cendant Corp./1/ 90,381 972,500 Raytheon Co. 32,983 966,402 Mellon Financial Corp. 36,690 951,372 Kroger Co./1/ 66,128 932,405 TXU Corp. 22,200 925,962 Anadarko Petroleum Corp. 20,698 921,889 Sears, Roebuck and Co. 23,547 918,333 Avon Products Inc. 19,605 903,790 Deere & Co. 19,800 899,910 Equity Office Properties Trust 34,726 896,625 Safeway Inc./1/ 40,008 892,178 WellPoint Health Networks Inc./1/ 12,088 886,050 KeyCorp 35,451 885,211 Occidental Petroleum Corp. 31,162 884,378 Omnicom Group Inc. 15,554 866,047 Kraft Foods Inc. 23,246 847,549 EMC Corp./1/ 185,022 845,551 Hartford Financial Services Group Inc. 20,540 842,140 Southwest Airlines Co. 64,248 839,079 Boston Scientific Corp./1/ 26,317 830,565 CVS Corp. 32,652 827,728 Guidant Corp./1/ 25,541 825,230 Baker Hughes Inc. 28,080 815,162 Progressive Corp. (The) 16,059 813,067 Weyerhaeuser Co. 18,197 796,483 Air Products & Chemicals Inc. 18,919 794,787 Bed Bath & Beyond Inc./1/ 24,384 794,187 Schwab (Charles) Corp. (The) 90,936 791,143 FPL Group Inc. 14,622 786,664 Masco Corp. 40,043 782,841 Newmont Mining Corp. 28,364 780,294 American Electric Power Co. Inc. 26,927 767,689 Entergy Corp. 18,400 765,440 Schedules of Investments 11 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- AT&T Wireless Services Inc./1/ 185,686 $ 765,026 TJX Companies Inc. 44,912 763,504 Burlington Northern Santa Fe Corp. 31,911 763,311 Albertson's Inc. 31,486 760,702 CIGNA Corp. 10,724 758,723 Anthem Inc./1/ 11,672 758,680 Progress Energy Inc. 18,245 745,673 Chubb Corp. 13,460 738,012 Intuit Inc./1/ 15,792 719,010 Comerica Inc. 14,894 718,189 Consolidated Edison Inc. 17,674 710,848 SouthTrust Corp. 28,927 701,480 Sun Microsystems Inc./1/ 270,468 700,512 Praxair Inc. 13,612 695,709 FirstEnergy Corp. 23,150 691,954 Hancock (John) Financial Services Inc. 24,607 684,075 Yum! Brands Inc./1/ 24,669 683,578 Kellogg Co. 20,489 681,259 Newell Rubbermaid Inc. 22,020 679,757 Apache Corp. 11,396 677,492 Concord EFS Inc./1/ 42,650 677,282 Sprint Corp. (FON Group) 74,046 675,300 Tribune Co. 16,131 674,437 General Motors Corp. "H"/1/ 73,206 669,835 Starbucks Corp./1/ 32,271 665,751 Principal Financial Group Inc./1/ 25,402 665,024 Maxim Integrated Products Inc./1/ 26,853 664,880 Eastman Kodak Co. 24,373 663,921 Wrigley (William Jr.) Co. 13,385 662,424 Electronic Arts Inc./1/ 10,032 661,711 Paychex Inc. 27,103 659,145 Mattel Inc. 36,382 655,240 Norfolk Southern Corp. 32,408 654,318 Golden West Financial Corp. 10,443 649,346 Stryker Corp. 11,222 646,387 eBay Inc./1/ 12,175 642,962 McKesson Corp. 22,682 642,581 Burlington Resources Inc. 16,738 642,070 Unocal Corp. 20,419 640,952 Block (H & R) Inc. 15,234 639,980 PPG Industries Inc. 14,022 626,783 AmerisourceBergen Corp. 8,771 626,425 AmSouth Bancorp 30,162 625,560 Regions Financial Corp. 19,144 625,434 Zimmer Holdings Inc./1/ 16,178 620,265 Northern Trust Corp. 16,372 617,552 Becton, Dickinson & Co. 21,602 613,497 Pitney Bowes Inc. 20,104 612,971 Allergan Inc. 11,193 608,899 Capital One Financial Corp. 17,329 605,129 Genentech Inc./1/ 18,414 600,849 Analog Devices Inc./1/ 30,404 598,959 Biomet Inc. 22,458 598,057 Archer-Daniels-Midland Co. 47,659 596,214 Fortune Brands Inc. 12,483 590,321 Marathon Oil Corp. 25,819 585,575 Devon Energy Corp. 12,002 579,097 Charter One Financial Inc. 19,312 573,965 Clorox Co. 14,022 563,404 Micron Technology Inc./1/ 45,455 562,278 Johnson Controls Inc. 7,318 562,169 MetLife Inc. 24,593 559,737 Electronic Data Systems Corp. 39,843 557,005 Gap Inc. (The) 51,322 556,844 DTE Energy Co. 13,476 548,473 Linear Technology Corp. 26,455 548,148 May Department Stores Co. (The) 24,063 547,915 Equity Residential 22,864 547,364 Moody's Corp. 10,896 528,456 St. Paul Companies Inc. 18,390 528,161 Danaher Corp. 9,234 524,953 M&T Bank Corp. 6,651 524,165 International Game Technology Inc./1/ 7,577 523,874 Public Service Enterprise Group Inc. 17,159 523,350 St. Jude Medical Inc./1/ 14,646 522,862 North Fork Bancorp Inc. 13,678 517,576 TRW Inc. 8,780 514,069 New York Times Co. "A" 11,226 510,222 12 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Limited Brands Inc. 35,426 $ 508,009 Agilent Technologies Inc./1/ 38,769 506,323 Lexmark International Group Inc. "A"/1/ 10,759 505,673 Synovus Financial Corp. 24,420 503,540 Interpublic Group of Companies Inc. 31,768 503,523 Jefferson-Pilot Corp. 12,553 503,375 Ameren Corp. 11,989 499,342 Veritas Software Corp./1/ 33,902 498,698 Staples Inc./1/ 38,956 498,247 MBIA Inc. 12,411 495,819 Marshall & Ilsley Corp. 17,647 492,175 Federated Department Stores Inc./1/ 16,576 487,997 Hershey Foods Corp. 7,818 485,107 Gilead Sciences Inc./1/ 14,390 482,497 Loews Corp. 11,188 479,853 Lincoln National Corp. 15,645 477,955 AutoZone Inc./1/ 6,012 474,106 Best Buy Co. Inc./1/ 21,091 470,540 Halliburton Co. 36,373 469,575 CSX Corp. 17,699 466,900 Union Planters Corp. 16,978 466,216 Avery Dennison Corp. 8,156 464,729 ITT Industries Inc. 7,435 463,424 Marriott International Inc. "A" 15,948 462,333 SunGard Data Systems Inc./1/ 23,506 457,192 Harrah's Entertainment Inc./1/ 9,471 456,597 Fiserv Inc./1/ 15,950 447,876 Ecolab Inc. 10,723 447,471 Genuine Parts Co. 14,589 447,007 Franklin Resources Inc. 14,259 443,455 KLA-Tencor Corp./1/ 15,806 441,620 Xilinx Inc./1/ 27,791 440,154 Cinergy Corp. 13,984 439,517 Aetna Inc. 12,191 436,560 Bear Stearns Companies Inc. (The) 7,732 436,085 MedImmune Inc./1/ 20,844 436,056 National Commerce Financial Corp. 17,314 433,716 Apple Computer Inc./1/ 29,842 432,709 Dover Corp. 17,012 431,765 Apollo Group Inc. "A"/1/ 9,860 428,220 Cox Communications Inc. "A"/1/ 17,132 421,276 Nextel Communications Inc. "A"/1/ 54,886 414,389 Cintas Corp. 9,848 412,828 Campbell Soup Co. 18,546 409,496 Cincinnati Financial Corp. 11,506 409,383 Coca-Cola Enterprises Inc. 19,248 408,828 AON Corp. 19,936 408,489 UNUMProvident Corp. 20,045 407,916 Health Management Associates Inc. "A"/1/ 20,166 407,757 Rohm & Haas Co. "A" 13,146 407,526 Countrywide Credit Industries Inc. 8,598 405,396 Symantec Corp./1/ 11,961 402,727 Delphi Automotive Systems Corp. 46,875 400,781 PPL Corp. 12,314 400,698 Laboratory Corp. of America Holdings/1/ 11,855 400,462 El Paso Corp. 48,266 399,160 UST Inc. 14,134 398,720 Knight Ridder Inc. 7,024 396,224 Amerada Hess Corp. 5,833 395,944 IDEC Pharmaceuticals Corp./1/ 9,430 391,534 KeySpan Corp. 11,680 391,280 Simon Property Group Inc. 10,877 388,635 Adobe Systems Inc. 20,020 382,382 Quest Diagnostics Inc./1/ 6,181 380,317 Computer Sciences Corp./1/ 13,642 379,111 Huntington Bancshares Inc. 20,685 376,260 Eaton Corp. 5,896 375,811 Ambac Financial Group Inc. 6,962 375,182 Parker Hannifin Corp. 9,814 374,993 King Pharmaceuticals Inc./1/ 20,524 372,921 Starwood Hotels & Resorts Worldwide Inc. 16,709 372,611 First Tennessee National Corp. 10,624 368,334 Kerr-McGee Corp. 8,451 367,111 PG&E Corp./1/ 32,559 366,614 Computer Associates International Inc. 38,097 365,731 Schedules of Investments 13 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Biogen Inc./1/ 12,435 $ 363,972 IMS Health Inc. 24,153 361,570 Popular Inc. 11,372 359,355 Family Dollar Stores Inc. 13,311 357,800 Penney (J.C.) Co. Inc. 22,364 356,035 Darden Restaurants Inc. 14,550 352,692 EOG Resources Inc. 9,705 348,992 Torchmark Corp. 10,131 347,088 Mylan Laboratories Inc. 10,571 346,095 Plum Creek Timber Co. Inc. 15,264 345,119 EchoStar Communications Corp./1/ 19,941 344,979 Archstone-Smith Trust 14,396 343,776 Pepsi Bottling Group Inc. 14,657 342,974 Microchip Technology Inc./1/ 16,770 342,947 BJ Services Co./1/ 13,156 342,056 Affiliated Computer Services Inc. "A"/1/ 8,038 342,017 Constellation Energy Group Inc. 13,745 340,739 SAFECO Corp. 10,697 339,951 Genzyme Corp. - General Division/1/ 16,420 338,416 Textron Inc. 9,821 334,896 Rockwell Collins 15,184 333,137 Prologis Trust 13,363 332,872 Zions Bancorp 7,619 331,655 Monsanto Co. 21,606 330,356 Applera Corp. - Applied Biosystems Group 17,797 325,685 Leggett & Platt Inc. 16,423 325,011 MeadWestvaco Corp. 16,699 320,788 Caremark Rx Inc./1/ 18,617 316,489 American Standard Companies Inc./1/ 4,972 316,319 Hilton Hotels Corp. 27,770 316,023 SPX Corp./1/ 3,132 316,019 Office Depot Inc./1/ 25,535 315,102 Compass Bancshares Inc. 10,672 314,717 Wendy's International Inc. 9,431 312,260 Dollar General Corp. 23,255 312,082 Xcel Energy Inc. 33,266 309,706 MGIC Investment Corp. 7,577 309,369 Yahoo! Inc./1/ 32,239 308,527 R.J. Reynolds Tobacco Holdings Inc. 7,630 307,642 ENSCO International Inc. 12,247 306,665 Sigma-Aldrich Corp. 6,171 304,045 USA Networks Inc./1/ 15,593 302,192 Jones Apparel Group Inc./1/ 9,811 301,198 PACCAR Inc. 8,884 300,190 Sempra Energy 15,235 299,368 NiSource Inc. 17,373 299,337 Xerox Corp./1/ 60,319 298,579 Express Scripts Inc. "A"/1/ 5,401 294,463 GreenPoint Financial Corp. 7,054 294,434 L-3 Communications Holdings Inc./1/ 5,578 293,961 RadioShack Corp./1/ 14,645 293,779 Dean Foods Co./1/ 7,372 293,258 Univision Communications Inc./1/ 12,821 292,319 Banknorth Group Inc. 12,276 291,555 DST Systems Inc./1/ 9,860 290,574 Ocean Energy Inc. 14,432 287,918 Oxford Health Plans Inc./1/ 7,389 287,728 Vulcan Materials Co. 7,956 287,689 Old Republic International Corp. 10,042 284,992 Sovereign Bancorp Inc. 21,869 282,110 Black & Decker Corp. 6,696 280,763 PeopleSoft Inc./1/ 22,611 279,698 Altera Corp./1/ 31,714 274,960 ServiceMaster Co. 25,341 274,950 Grainger (W.W.) Inc. 6,450 274,447 Lincare Holdings Inc./1/ 8,840 274,394 Edison International/1/ 27,390 273,900 TCF Financial Corp. 6,464 273,621 Duke-Weeks Realty Corp. 11,028 271,509 Chiron Corp./1/ 7,667 267,885 Hibernia Corp. "A" 13,397 267,806 Kinder Morgan Inc. 7,543 267,399 Waters Corp./1/ 11,024 267,332 Nike Inc. "B" 6,174 266,593 CenturyTel Inc. 11,872 266,289 General Growth Properties Inc. 5,170 266,255 McCormick & Co. Inc. 11,657 265,780 14 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Equifax Inc. 12,141 $ 263,945 Apartment Investment & Management Co. "A" 6,743 261,966 BMC Software Inc./1/ 20,035 261,857 Engelhard Corp. 10,944 260,796 Circuit City Stores Inc. 17,196 260,519 Qwest Communications International Inc./1/ 113,862 259,605 Molex Inc. 10,993 258,555 Sherwin-Williams Co. 10,868 257,354 Public Storage Inc. 8,017 255,742 VF Corp. 7,078 254,666 Pepco Holdings Inc. 12,760 254,562 Amazon.com Inc./1/ 15,929 253,749 ChoicePoint Inc./1/ 7,084 252,474 Michaels Stores Inc./1/ 5,521 252,310 Lennar Corp. 4,520 252,126 Georgia-Pacific Corp. 19,259 252,100 Smith International Inc./1/ 8,554 250,718 Novellus Systems Inc./1/ 12,005 249,824 New York Community Bancorp Inc. 8,865 249,727 Murphy Oil Corp. 3,032 248,836 Estee Lauder Companies Inc. "A" 8,608 247,394 Eastman Chemical Co. 6,437 245,700 Nucor Corp. 6,477 245,478 Republic Services Inc. "A"/1/ 13,026 244,889 Ball Corp. 4,842 243,988 Deluxe Corp. 5,384 242,603 Whirlpool Corp. 5,278 242,049 Radian Group Inc. 7,372 240,770 Varian Medical Systems Inc./1/ 5,588 240,228 Synopsys Inc./1/ 6,296 240,192 Fox Entertainment Group Inc. "A"/1/ 10,887 239,841 Kimco Realty Corp. 7,709 239,750 Bard (C.R.) Inc. 4,369 238,678 Vornado Realty Trust 6,032 237,962 Ross Stores Inc. 6,639 236,614 Pioneer Natural Resources Co./1/ 9,707 235,395 Energy East Corp. 11,816 234,075 DENTSPLY International Inc. 5,810 233,388 Energizer Holdings Inc./1/ 7,671 233,198 Thermo Electron Corp./1/ 14,417 232,546 Sabre Holdings Corp./1/ 12,008 232,355 Triad Hospitals Inc./1/ 6,111 231,912 Hillenbrand Industries Inc. 4,262 231,427 Legg Mason Inc. 5,429 231,058 Centex Corp. 5,201 230,664 SCANA Corp. 8,859 230,511 Fidelity National Financial Inc. 7,990 229,553 Wisconsin Energy Corp. 9,428 229,100 Westwood One Inc./1/ 6,367 227,620 Stilwell Financial Inc. 18,677 225,431 First Health Group Corp./1/ 8,301 225,123 First Virginia Banks Inc. 6,031 224,956 Valero Energy Corp. 8,480 224,466 Liz Claiborne Inc. 8,949 223,278 Cadence Design Systems Inc./1/ 21,944 223,170 Mercantile Bankshares Corp. 5,846 223,142 Expeditors International Washington Inc. 7,980 222,961 Reliant Energy Inc. 22,222 222,442 T. Rowe Price Group Inc. 8,856 221,046 Lear Corp./1/ 5,261 219,121 Pactiv Corp./1/ 13,306 218,884 Tyson Foods Inc. "A" 18,813 218,795 Telephone & Data Systems Inc. 4,316 217,742 Lucent Technologies Inc./1/ 286,468 217,716 Rockwell International Corp. 13,357 217,318 Convergys Corp./1/ 14,441 217,048 Millennium Pharmaceuticals Inc./1/ 23,251 216,699 Mohawk Industries Inc./1/ 4,356 216,275 Edwards (A.G.) Inc. 6,747 215,769 Universal Health Services Inc. "B"/1/ 4,155 212,528 Brinker International Inc./1/ 8,197 212,302 Valley National Bancorp 7,961 211,763 Bemis Co. 4,230 208,962 Watson Pharmaceuticals Inc./1/ 8,521 208,850 MGM Grand Inc./1/ 5,589 208,470 Dun & Bradstreet Corp./1/ 6,191 208,080 Schedules of Investments 15 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Donnelley (R.R.) & Sons Co. 8,830 $ 207,593 AvalonBay Communities Inc. 4,966 207,579 Patterson Dental Co./1/ 4,044 206,972 Boston Properties Inc. 5,547 206,348 Dollar Tree Stores Inc./1/ 9,340 205,854 PMI Group Inc. (The) 7,556 205,599 Health Care Property Investors Inc. 4,812 204,991 CDW Computer Centers Inc./1/ 4,835 204,811 Robert Half International Inc./1/ 12,895 204,644 Golden State Bancorp Inc. 6,315 204,101 Associated Bancorp 6,416 203,580 Commerce Bancorp Inc. 4,866 201,988 Tiffany & Co. 9,410 201,656 AMB Property Corp. 6,966 201,317 Washington Post Company (The) "B" 309 200,541 XTO Energy Inc. 9,728 200,494 Diebold Inc. 6,070 199,824 TECO Energy Inc. 12,562 199,485 JDS Uniphase Corp./1/ 101,560 197,839 Rouse Co. 6,069 193,905 Commerce Bancshares Inc. 4,954 193,553 AutoNation Inc./1/ 16,766 193,144 International Flavors & Fragrances Inc. 6,063 193,107 Jabil Circuit Inc./1/ 13,056 192,968 LSI Logic Corp./1/ 30,250 192,088 PETsMART Inc./1/ 10,747 191,404 QLogic Corp./1/ 7,350 191,394 Alliant Techsystems Inc./1/ 2,760 191,130 Liberty Property Trust 6,155 190,805 Manor Care Inc./1/ 8,487 190,788 American Water Works Inc. 4,270 190,698 Health Net Inc./1/ 8,848 189,790 Unisys Corp./1/ 27,104 189,728 Coach Inc./1/ 7,395 189,312 Brown-Forman Corp. "B" 2,816 188,531 Manpower Inc. 6,412 188,128 Stanley Works (The) 5,744 187,656 Equitable Resources Inc. 5,403 186,674 Northeast Utilities 11,006 186,001 Allied Capital Corp. 8,479 185,605 Siebel Systems Inc./1/ 32,071 184,408 Lamar Advertising Co./1/ 6,053 183,709 Whole Foods Market Inc./1/ 4,286 183,612 Smurfit-Stone Container Corp./1/ 14,578 183,100 Federated Investors Inc. "B" 6,774 182,830 Park Place Entertainment Corp./1/ 22,893 181,999 Network Appliance Inc./1/ 24,787 181,689 National Semiconductor Corp./1/ 15,149 180,879 Host Marriott Corp./1/ 19,429 180,301 Pinnacle West Capital Corp. 6,487 180,079 Beckman Coulter Inc. 4,652 180,032 UnionBanCal Corp. 4,252 178,627 Gallagher (Arthur J.) & Co. 7,241 178,491 Hospitality Properties Trust 5,388 178,451 NSTAR 4,511 178,410 Career Education Corp./1/ 3,696 177,438 Humana Inc./1/ 14,272 176,973 SUPERVALU Inc. 10,924 176,423 DPL Inc. 10,705 176,097 D.R. Horton Inc. 9,454 176,033 Protective Life Corp. 5,715 175,851 Williams-Sonoma Inc./1/ 7,405 174,980 Broadcom Corp. "A"/1/ 16,354 174,661 Sonoco Products Co. 8,193 174,593 Autoliv Inc. 8,266 174,247 Phelps Dodge Corp./1/ 6,798 174,233 Ceridian Corp./1/ 12,162 173,308 Harris Corp. 5,170 173,143 Pulte Homes Inc. 4,057 172,950 Astoria Financial Corp. 7,080 172,752 Gentex Corp./1/ 6,336 172,276 Dial Corp. (The) 8,005 171,787 Henry Schein Inc./1/ 3,240 170,910 Scripps (E.W.) Co. 2,460 170,478 KB HOME 3,471 169,524 Sunoco Inc. 5,595 168,745 Toys R Us Inc./1/ 16,466 167,624 Fluor Corp. 6,809 166,412 Cooper Cameron Corp./1/ 3,967 165,662 16 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Scientific-Atlanta Inc. 13,225 $ 165,445 Fulton Financial Corp. 8,751 164,519 Dana Corp. 12,517 163,722 Noble Energy Inc. 4,813 163,498 Pogo Producing Co. 4,799 163,454 Cephalon Inc./1/ 3,966 161,892 Bank of Hawaii Corp. 5,759 160,676 Apogent Technologies Inc./1/ 8,576 160,028 Citizens Communications Co./1/ 23,533 159,554 Bowater Inc. 4,501 158,885 Belo (A.H.) Corp. 7,248 158,586 Ashland Inc. 5,877 157,445 IVAX Corp./1/ 12,803 157,093 Valspar Corp. (The) 4,208 156,958 Brunswick Corp. 7,401 155,717 City National Corp. 3,304 154,528 Fastenal Co. 4,880 154,110 BISYS Group Inc. (The)/1/ 9,215 153,983 Advanced Micro Devices Inc./1/ 28,764 153,600 Big Lots Inc./1/ 9,697 153,504 Maytag Corp. 6,603 153,058 BEA Systems Inc./1/ 29,512 152,872 Pall Corp. 9,677 152,800 NVR Inc./1/ 507 152,014 Pier 1 Imports Inc. 7,920 151,034 Puget Energy Inc. 7,400 151,034 Wilmington Trust Corp. 5,221 150,991 Barr Laboratories Inc./1/ 2,399 149,434 Alberto-Culver Co. "B" 3,042 149,149 Dow Jones & Co. Inc. 3,883 149,146 Goodrich (B.F.) Co. 7,897 149,095 Valassis Communications Inc./1/ 4,251 149,083 CH Robinson Worldwide Inc. 5,524 148,651 Questar Corp. 6,508 148,643 Rowan Companies Inc. 7,970 148,561 Pennzoil-Quaker State Co. 6,750 148,298 Cullen/Frost Bankers Inc. 4,338 148,143 Invitrogen Corp./1/ 4,345 148,034 Symbol Technologies Inc. 19,281 147,885 FirstMerit Corp. 6,901 147,819 Omnicare Inc. 6,990 147,629 SEI Investment Co. 6,179 147,555 Pentair Inc. 3,966 147,416 Teradyne Inc./1/ 15,338 147,245 Alliant Energy Corp. 7,615 146,589 New Plan Excel Realty Trust 7,943 146,469 Patterson-UTI Energy Inc./1/ 5,735 146,300 Investors Financial Services Corp. 5,404 146,286 Viad Corp. 7,131 145,686 Smithfield Foods Inc./1/ 9,258 145,351 Mid Atlantic Medical Services Inc./1/ 4,014 145,307 Brocade Communications Systems Inc./1/ 19,253 144,975 Temple-Inland Inc. 3,749 144,824 Rent-A-Center Inc./1/ 2,781 144,473 Nordstrom Inc. 8,044 144,309 Weingarten Realty Investors 3,925 143,655 Helmerich & Payne Inc. 4,180 143,081 AdvancePCS/1/ 6,348 143,020 Abercrombie & Fitch Co. "A"/1/ 7,270 143,001 Meredith Corp. 3,318 142,840 Solectron Corp./1/ 67,457 142,334 United Dominion Realty Trust Inc. 8,894 141,504 Bausch & Lomb Inc. 4,244 140,773 Tellabs Inc./1/ 34,543 140,590 Eaton Vance Corp. 5,079 140,384 Charles River Laboratories International Inc./1/ 3,574 140,279 Entercom Communications Corp./1/ 2,955 139,978 Outback Steakhouse Inc./1/ 5,086 139,763 Steris Corp./1/ 5,604 139,596 ALLETE Inc. 6,440 139,104 Fisher Scientific International Inc./1/ 4,582 139,064 Allegheny Energy Inc. 10,586 138,677 Hormel Foods Corp. 6,334 138,588 Smucker (J.M.) Co. (The) 3,768 138,286 NCR Corp./1/ 6,981 138,224 MDU Resources Group Inc. 6,032 137,711 Markel Corp./1/ 690 137,434 Fair Isaac and Co. Inc. 4,192 137,078 Healthsouth Corp./1/ 32,983 136,879 Schedules of Investments 17 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Teleflex Inc. 2,993 $ 136,421 AGCO Corp./1/ 5,859 135,929 Constellation Brands Inc./1/ 5,871 135,620 Webster Financial Corp. 4,025 135,160 RPM Inc. 9,558 134,385 National-Oilwell Inc./1/ 6,926 134,226 Renal Care Group Inc./1/ 4,081 134,224 BancorpSouth Inc. 6,785 133,664 Network Associates Inc./1/ 12,548 133,385 Hasbro Inc. 11,974 133,271 Agere Systems Inc. "B"/1/ 133,971 132,631 Millipore Corp. 4,166 132,437 American Power Conversion Corp./1/ 13,811 132,033 StanCorp Financial Group Inc. 2,493 131,880 Hawaiian Electric Industries Inc. 3,052 131,541 Intersil Corp. "A"/1/ 10,149 131,531 Edwards Lifesciences Corp./1/ 5,124 131,123 Martin Marietta Materials Inc. 4,011 130,638 Readers Digest Association Inc. (The) "A" 8,332 130,396 HON Industries Inc. 5,097 129,719 Catellus Development Corp./1/ 7,019 129,501 Iron Mountain Inc./1/ 5,134 128,299 Corning Inc./1/ 79,998 127,997 Old National Bancorp 5,138 127,731 Polaris Industries Inc. 2,049 127,038 Performance Food Group Co./1/ 3,727 126,569 Vectren Corp. 5,748 126,456 Cheesecake Factory (The)/1/ 4,225 126,032 Coors (Adolf) Company "B" 2,233 125,718 Annaly Mortgage Management Inc. 6,805 125,552 Juniper Networks Inc./1/ 25,932 124,474 Human Genome Sciences Inc./1/ 10,313 124,375 Reynolds & Reynolds Co. (The) "A" 5,534 124,183 HCC Insurance Holdings Inc. 5,137 123,339 Lyondell Chemical Co. 10,309 123,089 WebMD Corp./1/ 24,345 122,942 Pride International Inc./1/ 9,454 122,902 Hubbell Inc. "B" 4,227 122,879 Investment Technology Group Inc./1/ 4,192 122,658 Neuberger Berman Inc. 4,538 122,299 Lubrizol Corp. 4,315 121,985 National Fuel Gas Co. 6,135 121,902 Colonial BancGroup Inc. (The) 9,828 121,867 Lee Enterprises Inc. 3,700 121,582 Tidewater Inc. 4,471 120,672 Unitrin Inc. 3,925 120,498 Newfield Exploration Co./1/ 3,587 120,487 Sanmina-SCI Corp./1/ 43,391 120,193 DaVita Inc./1/ 5,091 120,148 Accredo Health Inc./1/ 2,516 119,963 Sky Financial Group Inc. 6,020 119,858 Sealed Air Corp./1/ 7,063 119,294 Tektronix Inc./1/ 7,260 119,282 Autodesk Inc. 9,399 119,085 BRE Properties Inc. "A" 3,865 118,849 Foot Locker Inc./1/ 11,887 118,751 Transatlantic Holdings Inc. 1,786 118,680 CNF Transportation Inc. 3,769 118,309 Doral Financial Corp. 4,899 118,262 3Com Corp./1/ 29,800 117,412 Washington Federal Inc. 5,252 117,198 First American Corp. 5,730 117,064 Mack-Cali Realty Corp. 3,636 116,825 BorgWarner Inc. 2,348 116,555 Arden Realty Inc. 4,889 115,625 Brown & Brown Inc. 3,850 115,500 Jacobs Engineering Group Inc./1/ 3,730 115,182 BJ's Wholesale Club Inc./1/ 6,045 114,915 Ryder System Inc. 4,606 114,828 Corinthian Colleges Inc./1/ 3,040 114,730 Harman International Industries Inc. 2,213 114,523 Mandalay Resort Group/1/ 3,404 114,204 CenterPoint Properties Corp. 2,051 113,830 Snap-On Inc. 4,952 113,797 Sprint Corp. (PCS Group)/1/ 58,028 113,735 Vertex Pharmaceuticals Inc./1/ 6,148 113,677 18 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Vishay Intertechnology Inc./1/ 12,899 $ 113,511 Dillards Inc. "A" 5,602 113,048 Independence Community Bank Corp. 4,504 113,005 Andrx Group/1/ 5,100 112,965 Dreyer's Grand Ice Cream Inc. 1,617 112,964 Herman Miller Inc. 6,356 112,883 GTECH Holdings Corp./1/ 4,529 112,410 Tech Data Corp./1/ 4,246 112,094 Scholastic Corp./1/ 2,503 111,834 Donaldson Co. Inc. 3,256 111,778 OGE Energy Corp. 6,625 111,764 Techne Corp./1/ 3,404 111,617 Phoenix Companies Inc. 8,195 111,616 IMC Global Inc. 9,157 110,342 Cabot Corp. 5,244 110,124 Crescent Real Estate Equities Co. 7,011 110,073 Cytyc Corp./1/ 10,263 110,019 Westamerica Bancorp 2,730 109,964 Roslyn Bancorp Inc. 6,309 109,840 Providian Financial Corp./1/ 22,335 109,442 Comverse Technology Inc./1/ 15,600 109,044 First Midwest Bancorp Inc. 4,058 108,998 iStar Financial Inc. 3,880 108,330 Waddell & Reed Financial Inc. "A" 6,129 108,238 Community Health Systems Inc./1/ 4,060 108,118 Whitney Holding Corp. 3,387 108,079 Varco International Inc./1/ 6,374 107,848 Zebra Technologies Corp. "A"/1/ 2,041 107,541 Borders Group Inc./1/ 6,792 107,314 Celgene Corp./1/ 6,370 107,271 Worthington Industries Inc. 5,731 107,170 ArvinMeritor Inc. 5,723 107,020 Reebok International Ltd./1/ 4,264 106,813 Owens-Illinois Inc./1/ 9,435 106,804 E*TRADE Group Inc./1/ 23,981 106,715 Saks Inc./1/ 10,115 106,511 Goodyear Tire & Rubber Co. 11,971 106,422 Krispy Kreme Doughnuts Inc./1/ 3,402 106,347 CarrAmerica Realty Corp. 4,223 106,293 Highwoods Properties Inc. 4,535 106,119 Coventry Health Care Inc./1/ 3,263 106,047 Healthcare Realty Trust Inc. 3,409 106,020 Mercury Interactive Corp./1/ 6,176 105,980 AGL Resources Inc. 4,797 105,966 Certegy Inc./1/ 5,236 105,244 Cablevision Systems Corp./1/ 11,585 104,960 NICOR Inc. 3,717 104,819 Visteon Corp. 11,055 104,691 Arrow Electronics Inc./1/ 8,288 104,677 Activision Inc./1/ 4,362 104,383 Avnet Inc. 9,673 104,372 FNB Corp. 3,722 104,290 Level 3 Communications Inc./1/ 26,792 104,221 Dole Food Co. 3,589 104,189 Hudson City Bancorp Inc. 6,411 104,051 Berkley (W.R.) Corp. 3,060 104,040 CIENA Corp./1/ 35,024 104,021 Leucadia National Corp. 3,031 103,054 CBRL Group Inc. 4,512 102,964 Pittston Brink's Group 4,589 102,794 Developers Diversified Realty Corp. 4,658 102,523 LifePoint Hospitals Inc./1/ 3,281 102,328 Medicis Pharmaceutical Corp. "A"/1/ 2,489 101,725 Church & Dwight Co. Inc. 3,068 101,704 Navistar International Corp. 4,682 101,506 Peoples Energy Corp. 3,010 101,407 Ruby Tuesday Inc. 5,394 101,299 Payless ShoeSource Inc./1/ 1,871 101,053 First Industrial Realty Trust Inc. 3,255 100,872 Regis Corp. 3,554 100,543 PepsiAmericas Inc. 7,079 100,522 Great Plains Energy Inc. 5,248 100,499 Camden Property Trust 3,027 100,345 Scios Inc./1/ 3,899 99,230 Furniture Brands International Inc./1/ 4,321 99,167 Applebee's International Inc. 4,496 98,552 Overture Services Inc./1/ 4,179 98,499 Hudson United Bancorp 3,700 98,420 Schedules of Investments 19 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Carlisle Companies Inc. 2,675 $ 98,119 Reckson Associates Realty Corp. 4,282 97,501 La-Z-Boy Inc. 4,202 97,486 Graco Inc. 3,929 97,439 McClatchy Co. (The) "A" 1,598 97,398 Precision Castparts Corp. 4,488 97,300 Philadelphia Suburban Corp. 4,792 97,278 Realty Income Corp. 2,842 97,054 Radio One Inc. "D"/1/ 5,868 96,763 Delta Air Lines Inc. 10,402 96,635 AmerUs Group Co. 3,403 96,509 United States Steel Corp. 8,308 96,456 Covance Inc./1/ 4,923 96,343 Hilb Rogal & Hamilton Co. 2,330 96,112 Crompton Corp. 9,542 95,897 Interstate Bakeries Corp. 3,606 95,811 WGL Holdings Inc. 4,006 95,783 Piedmont Natural Gas Co. 2,696 95,627 Acxiom Corp./1/ 6,739 95,559 MONY Group Inc. (The) 3,873 95,547 Harte-Hanks Inc. 5,132 95,507 Hispanic Broadcasting Corp./1/ 5,111 95,320 Lam Research Corp./1/ 10,701 95,239 VeriSign Inc./1/ 18,826 95,071 OM Group Inc. 2,210 94,588 IndyMac Bancorp Inc./1/ 4,899 94,404 Citrix Systems Inc./1/ 15,649 94,363 SICOR Inc./1/ 6,200 94,302 IKON Office Solutions Inc. 11,967 94,300 Lancaster Colony Corp. 2,226 93,759 Storage Technology Corp./1/ 8,913 93,676 Chico's FAS Inc./1/ 5,828 92,840 Mercury General Corp. 2,167 92,748 Diamond Offshore Drilling Inc. 4,641 92,588 Rayonier Inc. 2,207 92,495 Corporate Executive Board Co. (The)/1/ 3,239 92,473 York International Corp. 3,278 92,440 Harsco Corp. 3,396 92,337 Integrated Device Technology Inc./1/ 8,818 92,060 Advanced Fibre Communications Inc./1/ 6,931 91,974 Take-Two Interactive Software Inc./1/ 3,161 91,669 Pan Pacific Retail Properties Inc. 2,658 91,648 Sybase Inc./1/ 7,867 91,415 Boise Cascade Corp. 4,007 91,360 United Bancshares Inc. 3,149 91,352 Williams Companies Inc. 40,246 90,956 Stericycle Inc./1/ 2,676 90,770 Park National Corp. 968 90,702 HRPT Properties Trust 10,937 90,230 DeVry Inc./1/ 4,838 90,084 Quintiles Transnational Corp./1/ 9,455 89,917 American Greetings Corp. "A" 5,569 89,661 Amylin Pharmaceuticals Inc./1/ 5,393 89,632 WPS Resources Corp. 2,527 89,557 Kennametal Inc. 2,785 89,454 Citizens Banking Corp. 3,701 89,453 NVIDIA Corp./1/ 10,438 89,349 AES Corp. (The)/1/ 35,569 89,278 Neurocrine Biosciences Inc./1/ 2,176 89,216 Fairchild Semiconductor International Corp. "A"/1/ 9,381 88,838 O'Reilly Automotive Inc./1/ 3,094 88,550 Ryland Group Inc. 2,367 87,981 Cooper Tire & Rubber Co. 5,448 87,931 Ingram Micro Inc. "A"/1/ 6,600 87,780 Ethan Allen Interiors Inc. 2,682 86,790 International Speedway Corp. "A" 2,184 86,770 CMS Energy Corp. 10,764 86,758 Community First Bankshares Inc. 3,097 86,344 Corn Products International Inc. 3,003 86,336 Zale Corp./1/ 2,861 86,288 Southwest Bancorp of Texas Inc./1/ 2,369 86,255 Clayton Homes Inc. 7,853 86,226 Service Corp. International/1/ 24,589 86,062 Compuware Corp./1/ 28,162 85,894 Health Care REIT Inc. 3,131 85,633 Macerich Co. (The) 2,764 85,629 Shurgard Storage Centers Inc. "A" 2,708 85,627 20 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Trustmark Corp. 3,754 $ 85,591 Catalina Marketing Corp./1/ 3,047 85,560 Freeport-McMoRan Copper & Gold Inc./1/ 6,352 85,498 ONEOK Inc. 4,513 85,296 Crane Co. 4,311 85,185 Roper Industries Inc. 2,464 85,008 Raymond James Financial Inc. 3,138 84,946 CACI International Inc. "A"/1/ 2,395 84,903 Commercial Federal Corp. 3,889 84,664 Provident Financial Group Inc. 3,372 84,603 Respironics Inc./1/ 2,643 84,602 IDEXX Laboratories Inc./1/ 2,730 84,488 ICOS Corp./1/ 4,026 84,425 Allied Waste Industries Inc./1/ 11,484 84,407 Arbitron Inc./1/ 2,460 83,886 Affymetrix Inc./1/ 4,021 83,637 Affiliated Managers Group Inc./1/ 1,871 83,465 Staten Island Bancorp Inc. 4,784 83,242 DQE Inc. 5,543 83,145 Weight Watchers International Inc./1/ 1,911 82,861 Diagnostic Products Corp. 1,801 82,846 Education Management Corp./1/ 1,870 82,785 Washington Real Estate Investment Trust 3,259 82,713 Barnes & Noble Inc./1/ 3,882 82,143 Trizec Properties Inc. 7,222 81,970 Toll Brothers Inc./1/ 3,770 81,960 International Rectifier Corp./1/ 5,234 81,755 Federal Realty Investment Trust 3,025 81,675 Wiley (John) & Sons Inc. "A" 3,709 81,635 Packaging Corporation of America/1/ 4,634 81,141 AMETEK Inc. 2,785 81,099 Chelsea Property Group Inc. 2,391 80,696 Apria Healthcare Group Inc./1/ 3,415 80,457 AptarGroup Inc. 2,994 80,449 IDACORP Inc. 3,306 80,435 UGI Corp. 2,205 80,152 Edwards (J.D.) & Co./1/ 8,595 79,504 Great Lakes Chemical Corp. 3,303 79,338 Imation Corp./1/ 2,800 79,324 Alexander & Baldwin Inc. 3,562 79,254 AnnTaylor Stores Corp./1/ 3,440 79,223 Neiman-Marcus Group Inc. "A"/1/ 3,014 79,118 New Jersey Resources Corp. 2,391 78,664 Sensient Technologies Corp. 3,722 78,646 UTStarcom Inc./1/ 5,139 78,473 Cerner Corp./1/ 2,226 78,377 Claire's Stores Inc. 3,591 78,284 Chesapeake Energy Corp. 11,854 78,236 Universal Corp. 2,225 78,031 Cox Radio Inc. "A"/1/ 2,978 77,904 Alleghany Corp./1/ 410 77,695 FMC Technologies Inc./1/ 4,634 77,666 Transkaryotic Therapies Inc./1/ 2,379 77,598 Swift Transportation Co. Inc./1/ 4,968 77,501 ADC Telecommunications Inc./1/ 67,061 77,120 Blyth Inc. 2,760 77,004 Atmos Energy Corp. 3,577 76,905 Erie Indemnity Co. "A" 1,843 76,779 Cree Inc./1/ 6,138 76,725 Pacific Capital Bancorp 2,823 76,667 ResMed Inc./1/ 2,675 76,505 Global Payments Inc. 2,974 76,134 Waste Connections Inc./1/ 2,187 76,086 Emulex Corp./1/ 6,750 76,005 Western Digital Corp./1/ 16,120 75,764 CEC Entertainment Inc./1/ 2,214 75,520 Superior Industries International Inc. 1,604 75,516 Mirant Corp./1/ 34,065 75,284 LaBranche & Co. Inc./1/ 3,714 75,209 Cambrex Corp. 2,038 74,998 Tupperware Corp. 4,508 74,923 Cytec Industries Inc./1/ 3,402 74,674 Calpine Corp./1/ 30,206 74,609 Jack in the Box Inc./1/ 3,268 74,510 Pharmaceutical Product Development Inc./1/ 3,851 74,478 Banta Corp. 2,095 74,372 Schedules of Investments 21 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- KPMG Consulting Inc./1/ 11,503 $ 74,309 Chittenden Corp. 2,502 74,059 Post Properties Inc. 2,836 73,679 Ohio Casualty Corp./1/ 4,499 73,244 Extended Stay America Inc./1/ 5,750 73,025 Prentiss Properties Trust 2,515 72,784 Mettler Toledo International Inc./1/ 2,799 72,774 South Financial Group Inc. (The) 3,447 72,697 Susquehanna Bancshares Inc. 3,355 72,636 Winn-Dixie Stores Inc. 5,519 72,409 Lafarge North America Inc. 2,482 71,904 InterMune Inc./1/ 2,188 71,810 Federal Signal Corp. 3,896 71,764 Oshkosh Truck Corp. 1,271 71,684 GATX Corp. 3,615 71,577 Invacare Corp. 2,089 71,548 Greater Bay Bancorp 3,928 71,450 Cummins Inc. 2,992 70,671 International Bancshares Corp. 1,816 70,624 East West Bancorp Inc. 2,091 70,592 Timken Co. (The) 4,210 70,518 United Stationers Inc./1/ 2,680 70,484 Bob Evans Farms Inc. 2,972 70,436 Cabot Microelectronics Corp./1/ 1,886 70,235 CBL & Associates Properties Inc. 1,812 70,215 Landstar System Inc./1/ 1,428 70,008 Alliance Data Systems Corp./1/ 4,618 69,963 Province Healthcare Co./1/ 4,074 69,869 Cousins Properties Inc. 3,019 69,437 ITT Educational Services Inc./1/ 3,692 69,299 Intergraph Corp./1/ 4,047 69,163 Yellow Corp./1/ 2,342 69,108 Commerce Group Inc. 2,135 69,089 SanDisk Corp./1/ 5,266 69,037 Potlatch Corp. 2,407 69,033 RF Micro Devices Inc./1/ 11,501 69,006 Too Inc./1/ 2,962 68,955 Rite Aid Corp./1/ 32,835 68,954 Applied Micro Circuits Corp./1/ 24,105 68,940 Enzon Inc./1/ 3,576 68,802 Briggs & Stratton Corp. 1,831 68,736 99 Cents Only Stores/1/ 3,319 68,703 SL Green Realty Corp. 2,232 68,612 THQ Inc./1/ 3,298 68,598 Varian Inc./1/ 2,481 68,500 Ventas Inc. 5,131 68,499 Energen Corp. 2,701 68,362 Nationwide Health Properties Inc. 4,006 68,302 Idex Corp. 2,391 68,263 Henry (Jack) & Associates Inc. 5,450 67,743 Electronics For Imaging Inc./1/ 4,530 67,588 LNR Property Corp. 2,023 67,467 USFreightways Corp. 2,342 67,169 Thornbury Mortgage Inc. 3,568 67,043 Key Energy Services Inc./1/ 8,485 66,862 Home Properties of New York Inc. 2,052 66,690 Harland (John H.) Co. 2,440 66,246 First Bancorp 1,730 65,948 Grant Prideco Inc./1/ 7,706 65,809 Scotts Co. (The) "A"/1/ 1,578 65,787 Hercules Inc./1/ 7,091 65,308 St. Joe Company (The) 2,355 64,998 Rational Software Corp./1/ 15,043 64,986 Harleysville Group Inc. 2,462 64,627 Olin Corp. 3,935 64,461 Sonic Corp./1/ 2,789 64,426 Cypress Semiconductor Corp./1/ 9,819 64,413 Texas Regional Bancshares Inc. "A" 1,914 64,100 Mueller Industries Inc./1/ 2,469 63,947 Tom Brown Inc./1/ 2,791 63,914 Essex Property Trust Inc. 1,290 63,778 American Financial Holdings Inc. 2,093 63,648 TrustCo Bank Corp. NY 6,005 63,521 PacifiCare Health Systems Inc. "A"/1/ 2,748 63,451 Fuller (H.B.) Co. 2,380 63,308 Pediatrix Medical Group Inc./1/ 2,041 63,251 IDT Corp./1/ 3,878 63,211 Novell Inc./1/ 30,099 63,208 CLARCOR Inc. 2,058 63,181 Airgas Inc./1/ 4,808 63,129 22 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Charter Municipal Mortgage Acceptance Corp. 3,572 $ 62,939 ICN Pharmaceuticals Inc. 6,929 62,777 Northwest Natural Gas Co. 2,135 62,684 Ferro Corp. 2,708 62,555 Crown Cork & Seal Co. Inc./1/ 11,883 62,386 Donnelley (R.H.) Corp./1/ 2,399 62,374 PNM Resources Inc. 3,150 62,370 KEMET Corp./1/ 7,289 62,321 Charming Shoppes Inc./1/ 9,231 62,309 Black Hills Corp. 2,377 62,254 TMP Worldwide Inc./1/ 6,909 62,181 Blockbuster Inc. 2,502 62,050 Pixar Inc./1/ 1,290 62,049 Jeffries Group Inc. 1,626 62,048 Longs Drug Stores Corp. 2,684 61,974 Evergreen Resources Inc./1/ 1,506 61,716 CAL Dive International Inc./1/ 3,057 61,651 Silicon Valley Bancshares/1/ 3,636 61,557 Cooper Companies Inc. 1,170 61,425 Callaway Golf Co. 5,901 61,370 Kansas City Southern Industries Inc./1/ 4,940 61,256 Forest City Enterprises Inc. "A" 1,884 61,230 Protein Design Labs Inc./1/ 7,377 61,229 BlackRock Inc./1/ 1,478 61,219 Integrated Circuit Systems Inc./1/ 3,898 61,199 Downey Financial Corp. 1,783 61,068 First Commonwealth Financial Corp. 4,921 60,971 American Financial Group Inc. 2,646 60,911 Forest Oil Corp./1/ 2,386 60,843 American National Insurance Co. 880 60,729 FMC Corp./1/ 2,349 60,651 UCBH Holdings Inc. 1,534 60,271 Terex Corp./1/ 3,545 59,911 Media General Inc. "A" 1,178 59,901 SEACOR SMIT Inc./1/ 1,461 59,886 G&K Services Inc. "A" 1,762 59,644 Beazer Homes USA Inc./1/ 976 59,585 Lincoln Electric Holding Inc. 2,686 59,444 Chemical Financial Corp. 2,054 59,278 CH Energy Group Inc. 1,262 59,226 Talbots Inc. (The) 2,110 59,080 Stone Energy Corp./1/ 1,815 58,988 Standard-Pacific Corp. 2,520 58,918 Arch Coal Inc. 3,544 58,653 Spinnaker Exploration Co./1/ 2,041 58,577 Hollywood Entertainment Corp./1/ 4,021 58,385 AK Steel Holding Corp./1/ 7,983 58,356 Copart Inc./1/ 5,378 58,351 American Capital Strategies Ltd. 3,097 58,347 Unit Corp./1/ 3,044 58,293 Minerals Technologies Inc. 1,571 58,237 CheckFree Corp./1/ 5,115 58,209 Regency Centers Corp. 1,876 58,156 Patina Oil & Gas Corp. 2,036 58,026 Mills Corp. 1,932 57,303 UMB Financial Corp. 1,467 57,272 PolyOne Corp. 6,657 57,184 Louisiana-Pacific Corp./1/ 8,837 57,175 Werner Enterprises Inc. 3,103 57,033 Tootsie Roll Industries Inc. 1,918 57,003 Manitowoc Co. Inc. (The) 2,075 56,751 Polycom Inc./1/ 8,343 56,649 Southwest Gas Corp. 2,544 56,604 Emmis Communications Corp./1/ 2,974 56,506 Polo Ralph Lauren Corp./1/ 2,713 56,376 Delta & Pine Land Co. 3,007 56,351 Matthews International Corp. "A" 2,407 56,252 EMCOR Group Inc./1/ 1,130 56,161 St. Mary Land & Exploration Co. 2,340 55,926 W Holding Co. Inc. 3,428 55,876 Linens 'N Things Inc./1/ 3,041 55,863 Hughes Supply Inc. 1,908 55,599 Wallace Computer Services Inc. 3,143 55,474 CNA Financial Corp./1/ 2,207 55,175 La Quinta Corp. 11,492 55,162 Mentor Corp. 1,730 55,152 Titan Corp. (The)/1/ 5,732 55,027 Cymer Inc./1/ 2,952 55,025 Thomas & Betts Corp./1/ 3,898 54,923 Schedules of Investments 23 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Alexandria Real Estate Equities Inc. 1,291 $ 54,842 SkyWest Inc. 4,184 54,810 Perrigo Co./1/ 5,155 54,798 Albemarle Corp. 2,166 54,778 AmeriCredit Corp./1/ 6,785 54,755 Gables Residential Trust 2,050 54,755 M.D.C. Holdings Inc. 1,551 54,750 Otter Tail Corp. 2,078 54,735 Jones Lang LaSalle Inc./1/ 2,657 54,628 First Financial Bancorp 3,063 54,552 AMR Corp./1/ 13,037 54,495 Hancock Holding Co. 1,159 54,449 Republic Bancorp Inc. 4,171 54,223 Getty Images Inc./1/ 2,703 54,222 PMC-Sierra Inc./1/ 13,939 54,083 Black Box Corp./1/ 1,627 54,016 Toro Co. 960 54,000 Tecumseh Products Co. "A" 1,286 53,961 Allmerica Financial Corp. 4,494 53,928 Trimeris Inc./1/ 1,213 53,881 Amphenol Corp. "A"/1/ 1,737 53,847 PerkinElmer Inc. 9,847 53,666 Gartner Inc. "A"/1/ 6,624 53,654 Commercial Net Lease Realty Inc. 3,326 53,615 National Instruments Corp./1/ 2,439 53,390 LandAmerica Financial Group Inc. 1,623 53,380 Millennium Chemicals Inc. 5,401 53,362 Ralcorp Holdings Inc./1/ 2,507 53,324 Curtiss Wright Corp. 891 53,273 MAF Bancorp Inc. 1,722 53,210 UICI/1/ 3,271 53,186 Brookline Bancorp Inc. 4,516 53,068 Advance Auto Parts Inc./1/ 1,005 53,004 FTI Consulting Inc./1/ 1,333 53,000 Aquila Inc. 12,915 52,951 Cabot Oil & Gas Corp. "A" 2,449 52,653 DRS Technologies Inc./1/ 1,412 52,555 Sierra Pacific Resources 8,592 52,411 Semtech Corp./1/ 5,378 52,167 OSI Pharmaceuticals Inc./1/ 3,073 52,149 US Oncology Inc./1/ 6,430 52,147 EarthLink Inc./1/ 9,744 52,033 Trinity Industries Inc. 3,156 51,948 Liberty Corp. 1,450 51,910 CVB Financial Corp. 2,355 51,669 Pinnacle Systems Inc./1/ 4,781 51,635 Anixter International Inc./1/ 2,499 51,479 Skyworks Solutions Inc./1/ 11,353 51,429 Kellwood Co. 2,246 51,344 DoubleClick Inc./1/ 9,957 51,179 American Italian Pasta Co. "A"/1/ 1,433 51,144 Wolverine World Wide Inc. 3,408 51,120 Station Casinos Inc./1/ 2,980 50,690 Cathay Bancorp Inc. 1,296 50,544 American Eagle Outfitters Inc./1/ 4,191 50,543 Andrew Corp./1/ 7,716 50,540 American Axle & Manufacturing Holdings Inc./1/ 2,019 50,435 Syncor International Corp./1/ 1,567 50,316 Westar Energy Inc. 4,996 50,260 Western Gas Resources Inc. 1,608 50,250 Waypoint Financial Corp. 2,980 50,243 El Paso Electric Co./1/ 4,228 50,229 NetIQ Corp./1/ 3,461 50,185 Hyperion Solutions Corp./1/ 2,728 50,059 ADVO Inc./1/ 1,573 49,943 Teledyne Technologies Inc./1/ 2,738 49,722 Boyd Gaming Corp./1/ 2,660 49,662 Pacific Sunwear of California Inc./1/ 2,437 49,617 Georgia Gulf Corp. 2,169 49,605 Timberland Co. "A"/1/ 1,565 49,579 Kilroy Realty Corp. 2,086 49,459 Avocent Corp./1/ 3,695 49,439 Circuit City Stores Inc. - CarMax Group/1/ 3,077 49,386 Bio-Rad Laboratories Inc. "A"/1/ 1,308 49,259 FBR Asset Investment Corp. 1,574 49,203 Brady Corp. "A" 1,525 49,105 Wilson Greatbatch Technologies Inc./1/ 1,766 49,095 S&T Bancorp Inc. 1,945 48,975 24 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Shaw Group Inc. (The)/1/ 3,445 $ 48,919 Nautilus Group Inc. (The)/1/ 2,506 48,867 Perot Systems Corp. "A"/1/ 5,233 48,667 Panera Bread Co. "A"/1/ 1,801 48,627 Cleco Corp. 3,608 48,600 Florida Rock Industries Inc. 1,589 48,560 Technitrol Inc. 3,247 48,543 Alliance Gaming Corp./1/ 3,137 48,498 Brandywine Realty Trust 2,148 48,437 AmSurg Corp./1/ 1,605 48,423 Nationwide Financial Services Inc. 1,811 48,354 NPS Pharmaceuticals Inc./1/ 2,347 48,273 Cumulus Media Inc. "A"/1/ 2,732 48,220 Lennox International Inc. 3,638 48,131 Iomega Corp./1/ 4,479 47,881 Plains Resource Inc./1/ 1,854 47,796 Airborne Inc. 4,214 47,787 Horace Mann Educators Corp. 3,250 47,775 Ryan's Family Steak Houses Inc./1/ 3,921 47,719 Pep Boys-Manny, Moe & Jack Inc. 3,890 47,653 Fred's Inc. 1,595 47,624 Kaydon Corp. 2,373 47,555 Price Communications Corp./1/ 4,187 47,313 People's Bank 2,101 47,125 Choice Hotels International Inc./1/ 2,037 47,075 Arkansas Best Corp./1/ 1,640 47,053 NBTY Inc./1/ 3,625 47,053 Lattice Semiconductor Corp./1/ 7,556 46,998 Argosy Gaming Co./1/ 2,046 46,976 Christopher & Banks Corp./1/ 1,867 46,899 ARAMARK Corp. "B"/1/ 2,227 46,767 Applera Corp. - Celera Genomics Group/1/ 5,875 46,706 Oceaneering International Inc./1/ 1,830 46,574 FactSet Research Systems Inc. 1,753 46,542 NBT Bancorp Inc. 2,694 46,525 Cost Plus Inc./1/ 1,730 46,450 Selective Insurance Group Inc. 2,136 46,415 Plantronics Inc./1/ 2,845 46,374 Sun Communities Inc. 1,260 46,242 Chateau Communities Inc. 1,747 46,138 Solutia Inc. 8,787 45,868 Schulman (A.) Inc. 2,638 45,717 AMCORE Financial Inc. 2,081 45,699 CSG Systems International Inc./1/ 4,190 45,671 Priority Healthcare Corp. "B"/1/ 1,810 45,612 Libbey Inc. 1,431 45,592 Nordson Corp. 1,920 45,581 Coinstar Inc./1/ 1,768 45,579 Thor Industries Inc. 1,310 45,536 Grey Wolf Inc./1/ 12,605 45,378 Provident Bankshares Corp. 2,101 45,340 Vintage Petroleum Inc. 4,190 45,252 Gemstar-TV Guide International Inc./1/ 17,945 45,221 Modine Manufacturing Co. 2,377 45,211 Gateway Inc./1/ 15,216 45,192 CONMED Corp./1/ 2,242 45,176 Varian Semiconductor Equipment Associates Inc./1/ 2,739 45,029 Nu Skin Enterprises Inc. "A" 3,690 45,018 Avista Corp. 4,016 44,979 Baldor Electric Co. 2,351 44,904 Capitol Federal Financial 2,023 44,830 Penn National Gaming Inc./1/ 2,373 44,802 Florida East Coast Industries Inc. 1,898 44,793 MPS Group Inc./1/ 7,706 44,695 Colonial Properties Trust 1,231 44,538 FelCor Lodging Trust Inc. 3,471 44,533 Pharmaceutical Resources Inc./1/ 1,581 44,236 Journal Register Co./1/ 2,346 44,222 Flowers Foods Inc./1/ 1,945 44,210 Benchmark Electronics Inc./1/ 2,092 44,037 Granite Construction Inc. 2,670 44,002 Allegheny Technologies Inc. 6,356 43,984 Glimcher Realty Trust 2,347 43,983 Macrovision Corp./1/ 3,588 43,881 First Charter Corp. 2,645 43,828 Sybron Dental Specialties Inc./1/ 3,131 43,803 Entravision Communications Corp./1/ 3,304 43,778 Kronos Inc./1/ 1,777 43,768 Schedules of Investments 25 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- American Management Systems Inc./1/ 3,438 $ 43,766 Winnebago Industries Inc. 1,106 43,720 SCP Pool Corp./1/ 1,595 43,719 CV Therapeutics Inc./1/ 2,088 43,660 Heartland Express Inc./1/ 2,326 43,589 Flowserve Corp./1/ 4,354 43,540 Total System Services Inc. 3,305 43,461 National Penn Bancshares Inc. 1,552 43,394 Avaya Inc./1/ 30,239 43,242 Coherent Inc./1/ 2,368 43,216 Abgenix Inc./1/ 6,658 43,210 SangStat Medical Corp./1/ 2,071 43,201 Texas Industries Inc. 1,777 43,146 ABM Industries Inc. 3,050 43,005 Hot Topic Inc./1/ 2,385 43,002 First Citizens BancShares Inc. "A" 417 42,985 Capital Automotive 1,720 42,966 Credence Systems Corp./1/ 4,956 42,919 WesBanco Inc. 1,800 42,858 Paxar Corp./1/ 2,947 42,849 Seacoast Financial Services Corp. 2,135 42,849 Owens & Minor Inc. 2,974 42,498 USEC Inc. 6,785 42,474 Rare Hospitality International Inc./1/ 1,812 42,437 Hovnanian Enterprises Inc. "A"/1/ 1,253 42,351 PanAmSat Corp./1/ 2,440 42,334 NDCHealth Corp. 2,705 42,063 WD-40 Co. 1,454 42,021 Harleysville National Corp. 1,736 41,907 Chiquita Brands International Inc./1/ 2,711 41,885 Peabody Energy Corp. 1,641 41,846 Stewart Enterprises Inc. "A"/1/ 8,186 41,749 Acuity Brands Inc. 3,397 41,647 Red Hat Inc./1/ 8,753 41,577 Monaco Coach Corp./1/ 2,074 41,542 P.F. Chang's China Bistro Inc./1/ 1,430 41,513 Maxtor Corp./1/ 15,898 41,494 Hotels.com "A"/1/ 817 41,324 Ascential Software Corp./1/ 22,224 41,292 Kimball International Inc. "B" 2,979 41,170 Men's Wearhouse Inc. (The)/1/ 2,797 41,116 Woodward Governor Co. 867 41,094 Ruddick Corp. 2,702 41,043 Quiksilver Inc./1/ 1,813 40,956 Reliance Steel & Aluminum Co. 1,874 40,947 PRG-Schultz International Inc./1/ 3,300 40,854 Mercury Computer Systems Inc./1/ 1,722 40,639 Flir Systems Inc./1/ 1,160 40,588 PSS World Medical Inc./1/ 6,080 40,432 Anthracite Capital Inc. 3,578 40,431 Genlyte Group Inc. (The)/1/ 1,137 40,307 Metro-Goldwyn-Mayer Inc./1/ 3,370 40,272 John Nuveen Co. "A" 1,770 40,267 Quanex Corp. 1,158 40,183 Axcelis Technologies Inc./1/ 8,225 40,138 UIL Holdings Corp. 1,132 40,129 Senior Housing Properties Trust 3,572 40,078 OfficeMax Inc./1/ 9,815 40,045 Sterling Bancshares Inc. 3,058 39,968 Aztar Corp./1/ 3,010 39,762 Macromedia Inc./1/ 5,133 39,678 Parametric Technology Corp./1/ 22,004 39,607 Summit Properties Inc. 2,035 39,479 Dionex Corp./1/ 1,543 39,439 Adaptec Inc./1/ 8,930 39,381 Alkermes Inc./1/ 4,949 39,048 Trust Co. of New Jersey (The) 1,532 38,989 Simpson Manufacturing Co. Inc./1/ 1,242 38,986 InterDigital Communications Corp./1/ 4,481 38,985 CUNO Inc./1/ 1,263 38,964 AVX Corp. 4,494 38,918 TriQuint Semiconductor Inc./1/ 11,023 38,911 UniSource Energy Corp. 2,547 38,842 Landry's Restaurants Inc. 1,719 38,832 Foundry Networks Inc./1/ 7,064 38,711 Casey's General Store Inc. 3,346 38,646 Reinsurance Group of America Inc. 1,495 38,631 Internet Security Systems Inc./1/ 3,121 38,451 Sandy Spring Bancorp Inc. 1,248 38,438 26 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Net.B@nk Inc./1/ 3,690 $ 38,413 Dycom Industries Inc./1/ 4,190 38,380 Engineered Support Systems Inc. 671 38,274 Alfa Corp. 3,119 38,208 Exar Corp./1/ 3,303 38,150 Corus Bankshares Inc. 870 38,115 Silicon Laboratories Inc./1/ 2,078 38,090 FirstFed Financial Corp./1/ 1,478 38,058 Manufactured Home Communities Inc. 1,192 38,001 MGE Energy Inc. 1,480 37,977 Hunt (J.B.) Transport Services Inc./1/ 1,608 37,868 Philadelphia Consolidated Holding Corp./1/ 1,283 37,849 Interactive Data Corp./1/ 3,085 37,791 Adolor Corp./1/ 2,694 37,770 Documentum Inc./1/ 3,268 37,745 United States Cellular Corp./1/ 1,276 37,744 Wabtec Corp. 2,680 37,734 Cognex Corp./1/ 2,706 37,640 MacDermid Inc. 1,886 37,626 Ticketmaster "B"/1/ 2,461 37,530 University of Phoenix Online/1/ 1,167 37,519 Dime Community Bancshares 1,749 37,464 Harbor Florida Bancshares Inc. 1,831 37,444 City Holding Co. 1,454 37,426 Alaska Air Group Inc./1/ 2,112 37,382 VISX Inc./1/ 4,046 37,345 American States Water Co. 1,424 37,337 Haemonetics Corp./1/ 1,569 37,232 ImClone Systems Inc./1/ 4,771 37,214 American Medical Systems Holdings Inc./1/ 1,793 37,205 United Defense Industries Inc./1/ 1,576 37,194 Suffolk Bancorp 1,152 37,094 BOK Financial Corp./1/ 1,141 37,083 Nortek Inc./1/ 857 37,082 Dress Barn Inc./1/ 2,380 37,033 Digital Insight Corp./1/ 2,350 36,942 eFunds Corp./1/ 3,937 36,933 Insight Enterprises Inc./1/ 3,638 36,926 Extreme Networks Inc./1/ 8,752 36,846 Identix Inc./1/ 6,188 36,819 South Jersey Industries Inc. 1,127 36,808 Sierra Health Services Inc./1/ 2,049 36,759 Triumph Group Inc./1/ 1,312 36,736 Laclede Group Inc. (The) 1,576 36,721 Massey Energy Co. 5,687 36,681 Orthodontic Centers of America Inc./1/ 3,428 36,680 Borland Software Corp./1/ 4,691 36,543 Sylvan Learning Systems Inc./1/ 2,665 36,457 Viasys Healthcare Inc./1/ 2,365 36,421 IHOP Corp./1/ 1,510 36,391 School Specialty Inc./1/ 1,454 36,365 Smith (A.O.) Corp. "B" 1,279 36,349 Atmel Corp./1/ 34,241 36,295 Gymboree Corp./1/ 2,220 36,208 Cognizant Technology Solutions Corp./1/ 628 36,091 SurModics Inc./1/ 1,136 36,091 Palm Inc./1/ 48,756 36,079 Roadway Corp. 983 36,056 Overseas Shipholding Group Inc. 2,355 35,984 Hearst-Argyle Television Inc./1/ 1,448 35,968 Loews Corporation - Carolina Group 1,908 35,889 Hollinger International Inc. 3,937 35,787 Sonic Automotive Inc./1/ 2,021 35,772 AmeriPath Inc./1/ 2,400 35,760 Cross Country Inc./1/ 2,549 35,686 Cornerstone Realty Income Trust Inc. 4,000 35,600 United Rentals Inc./1/ 4,213 35,558 Hanover Compressor Co./1/ 4,284 35,557 Anchor BanCorp Wisconsin Inc. 1,755 35,451 MICROS Systems Inc./1/ 1,525 35,365 Kirby Corp./1/ 1,563 35,355 Pulitzer Inc. 845 35,194 Crown Castle International Corp./1/ 16,206 35,167 ProQuest Co./1/ 1,158 35,145 Schedules of Investments 27 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Southern Union Co./1/ 3,108 $ 35,120 Delphi Financial Group Inc. "A" 960 34,963 Kroll Inc./1/ 1,762 34,940 Ionics Inc./1/ 1,465 34,882 Connecticut Bankshares Inc. 941 34,845 Gaylord Entertainment Co. "A"/1/ 1,834 34,699 Taubman Centers Inc. 2,438 34,693 Keane Inc./1/ 5,134 34,654 Sovran Self Storage Inc. 1,137 34,588 Unizan Financial Corp. 1,803 34,578 MB Financial Inc. 1,030 34,505 Hutchinson Technology Inc./1/ 2,135 34,480 Micrel Inc./1/ 5,594 34,459 IGEN International Inc./1/ 1,152 34,422 Albany International Corp. "A" 1,812 34,392 Expedia Inc. "A"/1/ 679 34,391 Columbia Sportswear Co./1/ 990 34,373 Broadwing Inc./1/ 17,336 34,325 Genesis Health Ventures Inc./1/ 2,082 34,228 Rogers Corp./1/ 1,463 34,161 Commercial Metals Co. 1,906 34,156 BARRA Inc./1/ 1,249 34,123 Regeneron Pharmaceuticals Inc./1/ 2,525 34,088 Cell Genesys Inc./1/ 2,817 33,945 Frontier Financial Corp. 1,328 33,837 RehabCare Group Inc./1/ 1,462 33,816 DIANON Systems Inc./1/ 714 33,779 JDN Realty Corp. 2,794 33,752 Tetra Tech Inc./1/ 4,221 33,726 Sepracor Inc./1/ 6,434 33,714 Tekelec/1/ 3,905 33,700 Grey Global Group Inc. 57 33,630 GrafTech International Ltd./1/ 4,631 33,575 Isis Pharmaceuticals Inc./1/ 3,396 33,485 Independent Bank Corp. (Michigan) 1,008 33,365 First Financial Bankshares Inc. 913 33,270 Pacific Northwest Bancorp 1,220 33,221 Myriad Genetics Inc./1/ 2,088 33,074 Weis Markets Inc. 986 33,011 Yankee Candle Co. Inc. (The)/1/ 1,920 32,966 Jo-Ann Stores Inc./1/ 1,175 $ 32,947 Papa John's International Inc./1/ 1,130 32,917 KV Pharmaceuticals Co./1/ 1,738 32,848 Electro Scientific Industries Inc./1/ 2,209 32,759 Unilab Corp./1/ 1,559 32,692 Action Performance Companies Inc./1/ 1,272 32,690 Inter-Tel Inc. 1,601 32,580 Regal-Beloit Corp. 1,902 32,543 Moog Inc. "A"/1/ 1,148 32,442 IRT Property Co. 2,752 32,336 Commonwealth Bancorp Inc. 701 32,246 Tredegar Corp. 1,924 32,227 Mine Safety Appliances Co. 822 32,214 Heritage Property Investment Trust Inc. 1,288 32,148 Tower Automotive Inc./1/ 4,794 32,120 ProAssurance Corp./1/ 1,900 32,110 Wellman Inc. 2,351 32,091 Ameritrade Holding Corp./1/ 8,600 32,078 Fossil Inc./1/ 1,598 32,040 PS Business Parks Inc. 940 31,960 Stage Stores Inc./1/ 1,472 31,928 Spherion Corp./1/ 4,526 31,908 C&D Technologies Inc. 2,176 31,900 Lone Star Steakhouse & Saloon Inc. 1,518 31,863 Bedford Property Investors Inc. 1,286 31,841 Commonwealth Telephone Enterprises Inc./1/ 915 31,815 First Sentinel Bancorp Inc. 2,348 31,768 Argonaut Group Inc. 1,838 31,705 Plexus Corp./1/ 3,425 31,681 Lin TV Corp. "A"/1/ 1,280 31,680 Impac Mortgage Holdings Inc. 2,836 31,621 Watson Wyatt & Co. Holdings/1/ 1,579 31,580 Sunrise Assisted Living Inc./1/ 1,472 31,574 FileNET Corp./1/ 3,050 31,567 Corrections Corp. of America/1/ 2,246 31,556 Newport Corp./1/ 2,796 31,539 EastGroup Properties Inc. 1,270 31,432 28 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Steel Dynamics Inc./1/ 2,401 $ 31,429 United National Bancorp 1,527 31,426 PMA Capital Corp. "A" 2,093 31,395 Wausau-Mosinee Paper Corp. 3,403 31,342 Thomas Industries Inc. 1,261 31,273 Brooks-PRI Automation Inc./1/ 2,730 31,258 First Financial Holdings Inc. 1,154 31,239 California Water Service Group 1,220 31,147 NUI Corp. 1,441 31,126 Tractor Supply Co./1/ 979 31,113 S1 Corp./1/ 5,795 31,061 Kelly Services Inc. "A" 1,433 31,053 Empire District Electric Co. (The) 1,837 31,045 EGL Inc./1/ 2,818 31,026 Mid-State Bancshares 1,886 30,930 Boston Private Financial Holdings Inc. 1,449 30,864 CIMA Labs Inc./1/ 1,227 30,859 Arch Chemicals Inc. 1,739 30,815 ATMI Inc./1/ 2,185 30,808 Standard Register Co. (The) 1,282 30,768 Hudson River Bancorp Inc. 1,274 30,767 Atlantic Coast Airlines Holdings Inc./1/ 3,326 30,765 RLI Corp. 572 30,688 Prime Hospitality Corp./1/ 3,741 30,676 Walter Industries Inc. 2,491 30,589 Sinclair Broadcast Group Inc. "A"/1/ 2,232 30,578 DSP Group Inc./1/ 1,904 30,576 United Community Banks Inc. 1,258 30,569 Albany Molecular Research Inc./1/ 1,794 30,552 Cyberonics Inc./1/ 1,771 30,479 Lexington Corp. Properties Trust 1,893 30,477 Strayer Education Inc. 512 30,459 Koger Equity Inc. 1,794 30,301 Checkpoint Systems Inc./1/ 2,448 30,233 Dollar Thrifty Automotive Group Inc./1/ 1,882 30,206 Insight Communications Co. Inc./1/ 3,270 30,182 Ocular Sciences Inc./1/ 1,292 30,181 Glenborough Realty Trust Inc. 1,486 30,166 Anteon International Corp./1/ 1,109 $ 30,143 Hooper Holmes Inc. 4,848 30,058 M/I Schottenstein Homes Inc. 954 30,051 Rambus Inc./1/ 6,911 29,994 Longview Fibre Co. 4,320 29,981 Insituform Technologies Inc. "A"/1/ 2,087 29,946 United Natural Foods Inc./1/ 1,299 29,916 Hain Celestial Group Inc./1/ 2,041 29,901 Mid-America Apartment Communities Inc. 1,199 29,867 Sterling Financial Corp. (Pennsylvania) 1,279 29,839 SureWest Communications 1,017 29,768 Veritas DGC Inc./1/ 2,753 29,760 Alabama National Bancorp 657 29,749 ElkCorp 1,742 29,736 Esterline Technologies Corp./1/ 1,784 29,686 Progress Software Corp./1/ 2,452 29,669 Bay View Capital Corp./1/ 5,226 29,631 CDI Corp./1/ 1,133 29,628 Central Parking Corp. 1,471 29,626 Enzo Biochem Inc./1/ 2,065 29,529 First Merchants Corp. 1,195 29,517 ESCO Technologies Inc./1/ 911 29,425 Maverick Tube Corp./1/ 3,317 29,422 Student Loan Corp. 325 29,406 OshKosh B'Gosh Inc. "A" 854 29,343 CommScope Inc./1/ 4,327 29,337 Entertainment Properties Trust 1,323 29,238 Advent Software Inc./1/ 2,553 29,232 Continental Airlines Inc. "B"/1/ 5,415 29,187 Hydril Co./1/ 1,172 29,159 Bandag Inc. 956 29,158 CSK Auto Corp./1/ 2,327 29,041 Umpqua Holdings Corp. 1,765 28,999 Wintrust Financial Corp. 1,010 28,937 F&M Bancorp 915 28,914 Biosite Inc./1/ 997 28,903 JLG Industries Inc. 3,577 28,795 Group 1 Automotive Inc./1/ 1,286 28,742 Steelcase Inc. 2,745 28,740 Schedules of Investments 29 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- California Pizza Kitchen Inc./1/ 1,247 $ 28,693 Power Integrations Inc./1/ 2,353 28,683 First Federal Capital Corp. 1,476 28,679 National Health Investors Inc. 1,876 28,609 Community Bank System Inc. 965 28,593 ShopKo Stores Inc./1/ 2,188 28,575 Financial Federal Corp./1/ 897 28,569 ADTRAN Inc./1/ 1,830 28,548 Armor Holdings Inc./1/ 1,903 28,526 Topps Co. (The)/1/ 3,293 28,386 21st Century Insurance Group 2,745 28,301 Advanced Neuromodulation Systems Inc./1/ 849 28,255 W-H Energy Services Inc./1/ 1,633 28,251 Tennant Co. 872 28,209 BankAtlantic Bancorp Inc. "A" 3,141 28,206 Headwaters Inc./1/ 2,038 28,165 CPB Inc. 610 28,164 Pure Resources Inc./1/ 1,257 28,157 Westport Resources Corp./1/ 1,538 28,145 MSC Industrial Direct Co. Inc. "A"/1/ 2,648 28,122 Russell Corp. 1,876 28,121 Belden Inc. 2,092 28,075 Imagistics International Inc./1/ 1,615 28,020 Sycamore Networks Inc./1/ 11,919 28,010 First Financial Corp. 578 28,004 NCI Building Systems Inc./1/ 1,481 27,843 Entegris Inc./1/ 3,580 27,817 Bowne & Co. Inc. 2,781 27,810 MAXIMUS Inc./1/ 1,240 27,776 Knight Transportation Inc./1/ 1,790 27,745 Omega Financial Corp. 822 27,743 Ariba Inc./1/ 20,486 27,656 Duane Reade Inc./1/ 1,727 27,632 Knight Trading Group Inc./1/ 7,366 27,622 Itron Inc./1/ 1,500 27,585 Frontier Oil Corp. 2,224 27,578 Valmont Industries Inc. 1,177 27,483 Burlington Coat Factory Warehouse Corp. 1,525 27,450 Stride Rite Corp. 3,462 27,384 RealNetworks Inc./1/ 7,575 27,346 Aaron Rents Inc. "B" 1,186 27,278 Arrow International Inc. 845 27,184 Rayovac Corp./1/ 2,227 27,169 Speedway Motorsports Inc./1/ 1,146 26,988 Mentor Graphics Corp./1/ 5,530 26,986 Photon Dynamics Inc./1/ 1,447 26,958 Shuffle Master Inc./1/ 1,448 26,947 Northwest Airlines Corp. "A"/1/ 4,033 26,940 Ligand Pharmaceuticals Inc. "B"/1/ 3,952 26,874 Thoratec Labs Corp./1/ 3,420 26,813 GenCorp. Inc. 2,667 26,803 Sequa Corp. "A"/1/ 514 26,779 GameStop Corp./1/ 1,309 26,769 Unifi Inc./1/ 4,267 26,754 First Niagara Financial Group Inc. 846 26,725 Franklin Electric Co. Inc. 625 26,719 Meristar Hospitality Corp. 3,104 26,663 Kindred Healthcare Inc./1/ 719 26,625 Lone Star Technologies Inc./1/ 2,246 26,615 Glacier Bancorp Inc. 1,165 26,539 PFF Bancorp Inc. 957 26,528 Incyte Genomics Inc./1/ 5,716 26,522 Brown Shoe Co. Inc. 1,481 26,510 Littelfuse Inc./1/ 1,575 26,492 INAMED Corp./1/ 1,151 26,473 Offshore Logistics Inc./1/ 1,474 26,473 FEI Co./1/ 1,830 26,443 Dynegy Inc. "A" 22,776 26,420 Datascope Corp. 976 26,411 Actuant Corp. "A"/1/ 715 26,383 Fidelity Bankshares Inc. 1,473 26,367 EDO Corp. 1,176 26,354 Alpharma Inc. "A" 2,743 26,333 Quantum DLT & Storage Group/1/ 11,910 26,321 RFS Hotel Investors Inc. 2,395 26,321 ChemFirst Inc. 915 26,315 Apogee Enterprises Inc. 2,401 26,267 McDATA Corp. "A"/1/ 4,832 26,238 Presidential Life Corp. 1,819 26,194 30 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Houston Exploration Co./1/ 839 $ 26,135 Invision Technologies Inc./1/ 814 26,056 Schweitzer-Mauduit International Inc. 1,220 26,047 Lance Inc. 2,042 26,036 Phillips-Van Heusen Corp. 2,063 25,994 Joy Global Inc./1/ 3,129 25,971 Quest Software Inc./1/ 2,762 25,963 Universal Health Realty Income Trust 999 25,924 Methode Electronics Inc. "A" 2,822 25,906 New Century Financial Corp. 1,104 25,834 ICU Medical Inc./1/ 706 25,783 Zoran Corp./1/ 2,342 25,762 Aeroflex Inc./1/ 5,101 25,709 Six Flags Inc./1/ 7,302 25,703 Integra Bank Corp. 1,425 25,678 Southwestern Energy Co./1/ 2,139 25,668 MFA Mortgage Investments Inc. 3,160 25,596 Jill (J.) Group Inc. (The)/1/ 1,468 25,573 Chemed Corp. 829 25,508 Pre-Paid Legal Services Inc./1/ 1,279 25,427 Atwood Oceanics Inc./1/ 869 25,418 AMLI Residential Properties Trust 1,149 25,370 Robert Mondavi Corp. (The) "A"/1/ 831 25,312 Bright Horizons Family Solutions Inc./1/ 906 25,305 Veeco Instruments Inc./1/ 2,343 25,304 Town & Country Trust (The) 1,202 25,278 BankUnited Financial Corp. "A"/1/ 1,584 25,265 Zoll Medical Corp./1/ 831 25,262 Genesco Inc./1/ 1,830 25,254 CARBO Ceramics Inc. 704 25,231 Silicon Storage Technology Inc./1/ 6,449 25,216 Applied Industrial Technologies Inc. 1,487 25,205 InFocus Corp./1/ 3,303 25,169 Griffon Corp./1/ 2,357 25,102 Kaman Corp. "A" 2,049 25,100 International Multifoods Corp./1/ 1,280 25,088 Nextel Partners Inc. "A"/1/ 4,661 25,076 Advanced Digital Information Corp./1/ 5,224 25,075 Stewart Information Services Corp./1/ 1,171 25,001 Connetics Corp./1/ 2,702 24,993 Pennsylvania Real Estate Investment Trust 969 24,961 Boca Resorts Inc. "A"/1/ 2,439 24,878 Per-Se Technologies Inc./1/ 2,518 24,878 United Surgical Partners International Inc./1/ 1,126 24,806 Berry Petroleum Co. "A" 1,455 24,720 Federal Agricultural Mortgage Corp./1/ 834 24,611 Bally Total Fitness Holding Corp./1/ 2,483 24,607 Korn/Ferry International/1/ 3,137 24,594 Gold Bancorp Inc. 2,534 24,580 CIBER Inc./1/ 4,226 24,553 United Community Financial Corp. 2,774 24,550 Superior Energy Services Inc./1/ 3,769 24,499 Spartech Corp. 1,156 24,461 Tompkins Trustco Inc. 569 24,410 Analogic Corp. 580 24,296 Heidrick & Struggles International Inc./1/ 1,596 24,243 O'Charley's Inc./1/ 1,293 24,232 First Community Bancshares Inc. 821 24,187 R&G Financial Corp. "B" 1,104 24,089 K-Swiss Inc. "A" 1,127 24,084 Silgan Holdings Inc./1/ 846 24,060 Old Second Bancorp Inc. 629 24,015 Conexant Systems Inc./1/ 21,625 24,004 Park Electrochemical Corp. 1,434 23,948 Guitar Center Inc./1/ 1,272 23,888 Global Industries Ltd./1/ 5,781 23,876 Kramont Realty Trust 1,611 23,843 Greif Brothers Corp. "A" 973 23,838 Community Trust Bancorp Inc. 885 23,806 Fremont General Corp. 4,853 23,780 Martek Biosciences Corp./1/ 1,448 23,718 Photronics Inc./1/ 2,357 23,711 Schedules of Investments 31 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Sotheby's Holdings Inc. "A"/1/ 3,385 $ 23,695 Advanced Medical Optics Inc./1/ 2,491 23,689 Rollins Inc. 1,220 23,668 Hancock Fabrics Inc. 1,465 23,660 United Therapeutics Inc./1/ 1,437 23,639 Atrix Laboratories Inc./1/ 1,588 23,502 Independent Bank Corp. (Massachusetts) 1,178 23,419 SOURCECORP Inc./1/ 1,147 23,410 NorthWestern Corp. 2,397 23,395 Wesco Financial Corp. 76 23,370 Hanger Orthopedic Group Inc./1/ 1,466 23,309 Apex Mortgage Capital Inc. 2,081 23,286 MKS Instruments Inc./1/ 2,126 23,216 Tetra Technologies Inc./1/ 1,152 23,213 Cato Corp. "A" 1,220 23,156 Redwood Trust Inc. 846 23,121 American Tower Corp./1/ 14,526 23,096 Carpenter Technology Corp. 1,775 23,075 PolyMedica Corp./1/ 873 23,065 Pathmark Stores Inc./1/ 2,519 23,049 Parkway Properties Inc. 681 23,045 Washington Trust Bancorp Inc. 1,161 22,918 Noven Pharmaceuticals Inc./1/ 1,870 22,889 Simmons First National Corp. "A" 614 22,829 CCBT Financial Companies Inc. 868 22,716 AMERIGROUP Corp./1/ 676 22,687 Triarc Companies Inc./1/ 999 22,667 Legato Systems Inc./1/ 8,202 22,621 Cable Design Technologies Corp./1/ 3,694 22,607 ScanSource Inc./1/ 388 22,523 Symyx Technologies Inc./1/ 2,151 22,521 NACCO Industries Inc. 564 22,447 Telik Inc./1/ 1,813 22,445 Therasense Inc./1/ 1,604 22,392 Pegasus Solutions Inc./1/ 2,120 22,366 CONSOL Energy Inc. 1,766 22,358 Remington Oil & Gas Corp./1/ 1,585 22,349 Cubic Corp. 1,312 22,304 Zenith National Insurance Corp. 842 22,246 Westcorp Inc. 1,112 22,240 Regal Entertainment Group "A"/1/ 1,248 22,214 WMS Industries Inc./1/ 1,568 22,109 Isle of Capri Casinos Inc./1/ 1,324 22,084 ValueVision Media Inc./1/ 1,877 22,074 TIBCO Software Inc./1/ 5,864 21,990 Second Bancorp Inc. 821 21,945 Sterling Bancorp 827 21,940 Nautica Enterprises Inc./1/ 2,108 21,923 Trimble Navigation Ltd./1/ 2,212 21,899 Newpark Resources Inc./1/ 5,523 21,871 Information Holdings Inc./1/ 1,010 21,866 Tanox Inc./1/ 2,082 21,861 Local Financial Corp./1/ 1,582 21,847 Enterasys Networks Inc./1/ 16,784 21,819 Corixa Corp./1/ 3,443 21,794 Landauer Inc. 657 21,780 Oakley Inc./1/ 2,166 21,768 Ventana Medical Systems Inc./1/ 1,162 21,764 U.S. Restaurant Properties Inc. 1,516 21,603 West Corp./1/ 1,543 21,602 Labor Ready Inc./1/ 3,409 21,545 Spanish Broadcasting System Inc. "A"/1/ 3,288 21,536 Swift Energy Co./1/ 2,066 21,486 DIMON Inc. 3,435 21,434 Stillwater Mining Co./1/ 3,570 21,420 Meritage Corp./1/ 604 21,412 Odyssey Healthcare Inc./1/ 714 21,384 Saxon Capital Inc./1/ 1,926 21,321 SPS Technologies Inc./1/ 854 21,290 MCG Capital Corp. 1,615 21,286 Verity Inc./1/ 2,138 21,273 Intuitive Surgical Inc./1/ 2,662 21,269 Saul Centers Inc. 915 21,246 Actel Corp./1/ 2,041 21,226 Sturm Ruger & Co. Inc. 1,739 21,216 Resources Connection Inc./1/ 1,472 21,212 PETCO Animal Supplies Inc./1/ 974 21,126 Penn Virginia Corp. 651 21,092 Wright Medical Group Inc./1/ 1,108 21,085 GlobeSpanVirata Inc./1/ 8,912 21,032 32 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- CoStar Group Inc./1/ 1,166 $ 20,988 Tier Technologies Inc. "B"/1/ 1,109 20,982 Lindsay Manufacturing Co. 865 20,959 Watts Industries Inc. "A" 1,276 20,926 Equity Inns Inc. 3,373 20,913 ANSYS Inc./1/ 1,212 20,883 Jakks Pacific Inc./1/ 1,877 20,870 RAIT Investment Trust 1,011 20,827 Watsco Inc. 1,456 20,821 USB Holding Co. Inc. 1,129 20,807 FBL Financial Group Inc. "A" 1,127 20,793 Amkor Technology Inc./1/ 8,734 20,787 ENDOcare Inc./1/ 1,452 20,778 First Indiana Corp. 1,133 20,768 Oriental Financial Group Inc. 942 20,724 Helix Technology Corp. 2,145 20,699 Stewart & Stevenson Services Inc. 2,113 20,693 MedQuist Inc./1/ 881 20,675 Vector Group Ltd. 1,640 20,647 Sola International Inc./1/ 2,053 20,633 Trammell Crow Co./1/ 2,087 20,578 Medarex Inc./1/ 6,139 20,566 Russ Berrie & Co. Inc. 685 20,557 Arctic Cat Inc. 1,471 20,535 Kmart Corp./1/ 41,845 20,504 Inhale Therapeutic Systems Inc./1/ 4,074 20,484 AFC Enterprises Inc./1/ 1,013 20,452 Wet Seal Inc. "A"/1/ 2,045 20,450 Steak n Shake Company (The)/1/ 1,857 20,427 Caraustar Industries Inc. 2,177 20,355 Serologicals Corp./1/ 1,516 20,299 Barnes Group Inc. 1,009 20,271 Triad Guaranty Inc./1/ 582 20,265 Medicines Co. (The)/1/ 1,844 20,243 Centex Construction Products Inc. 567 20,242 Mediacom Communications Corp./1/ 3,768 20,234 OceanFirst Financial Corp. 982 20,229 Mid Atlantic Realty Trust 1,261 20,214 Right Management Consultants Inc./1/ 819 20,180 Bank of Granite Corp. 1,121 20,178 Integra LifeSciences Holdings Corp./1/ 1,267 20,133 ExpressJet Holdings Inc./1/ 2,188 20,130 Cleveland-Cliffs Inc. 836 20,106 Kopin Corp./1/ 5,764 20,059 Investors Real Estate Trust 1,889 20,005 Forward Air Corp./1/ 1,105 20,000 Myers Industries Inc. 1,596 19,998 Premcor Inc./1/ 1,274 19,989 Scientific Games Corp. "A"/1/ 2,976 19,942 MSC.Software Corp./1/ 2,340 19,937 WebEx Communications Inc./1/ 1,773 19,840 Intermagnetics General Corp./1/ 1,162 19,835 Beverly Enterprises Inc./1/ 8,185 19,808 Cohu Inc. 1,751 19,786 Flagstar Bancorp Inc. 955 19,768 City Bank 683 19,766 Port Financial Corp. 494 19,765 DuPont Photomasks Inc./1/ 867 19,750 Immunomedics Inc. 3,279 19,674 New England Business Service Inc. 929 19,648 Navigant Consulting Co./1/ 3,556 19,629 First Republic Bank/1/ 902 19,618 Silicon Image Inc./1/ 4,794 19,607 Handleman Co./1/ 2,142 19,599 Range Resources Corp./1/ 4,185 19,586 Irwin Financial Corp. 1,152 19,584 Avid Technology Inc./1/ 1,901 19,580 Churchill Downs Inc. 536 19,564 Marcus Corp. 1,491 19,532 United Industrial Corp. 969 19,525 Genesee & Wyoming Inc. "A"/1/ 877 19,513 Primedia Inc./1/ 14,017 19,484 ArthroCare Corp./1/ 1,596 19,344 Key Productions Co. Inc./1/ 1,192 19,310 West Coast Bancorp 1,274 19,288 Odyssey Re Holdings Corp. 1,159 19,251 Impath Inc./1/ 1,491 19,249 J&J Snack Foods Corp./1/ 522 19,236 WSFS Financial Corp. 687 19,236 Schedules of Investments 33 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- First Busey Corp. "A" 847 $ 19,201 Stoneridge Inc./1/ 1,128 19,176 Gardner Denver Inc./1/ 1,220 19,166 Getty Realty Corp. 1,004 19,156 LTX Corp./1/ 4,199 19,147 Capital City Bank Group Inc. 579 19,142 West Pharmaceutical Services Inc. 893 19,128 Medford Bancorp Inc. 545 19,048 Electronics Boutique Holdings Corp./1/ 693 19,023 Daisytek International Corp./1/ 1,460 18,980 Bank Mutual Corp. 936 18,945 Playtex Products Inc./1/ 2,223 18,918 Deltic Timber Corp. 860 18,903 Salem Communications Corp. "A"/1/ 843 18,900 Systems & Computer Technology Corp./1/ 2,699 18,893 URS Corp./1/ 1,139 18,873 United Fire & Casualty Co. 555 18,859 Transaction Systems Architects Inc. "A"/1/ 3,036 18,823 TeleTech Holdings Inc./1/ 3,009 18,806 Input/Output Inc./1/ 3,923 18,791 Fleetwood Enterprises Inc. 2,787 18,784 AMN Healthcare Services Inc./1/ 1,015 18,777 Intertrust Technologies Corp./1/ 5,881 18,760 RTI International Metals Inc./1/ 1,784 18,732 CT Communications Inc. 1,291 18,719 Farmers Capital Bank Corp. 560 18,687 E.piphany Inc./1/ 5,189 18,680 Standard Microsystems Corp./1/ 1,220 18,643 Chesapeake Corp. 1,246 18,615 Standex International Corp. 915 18,556 First Essex Bancorp Inc. 559 18,475 Unova Inc./1/ 3,737 18,386 Haverty Furniture Companies Inc. 1,470 18,375 Financial Institutions Inc. 676 18,353 Hecla Mining/1/ 5,136 18,336 Gene Logic Inc./1/ 2,357 18,314 Coachmen Industries Inc. 1,220 18,312 Asyst Technologies Inc./1/ 3,028 18,289 Bel Fuse Inc. "B" 852 18,275 StarTek Inc./1/ 828 18,224 Banner Corp. 902 18,220 Diversa Corp./1/ 2,127 18,143 Alloy Inc./1/ 2,181 18,124 Interland Inc./1/ 8,818 18,077 American Healthways Inc./1/ 1,117 18,062 Jarden Corp./1/ 665 18,055 Raytech Corp./1/ 2,962 18,039 Cascade Natural Gas Corp. 915 18,025 Capstead Mortgage Corp. 871 18,004 RailAmerica Inc./1/ 2,480 17,980 American Woodmark Corp. 354 17,962 First Place Financial Corp. 1,279 17,880 IDX Systems Corp./1/ 1,438 17,846 NCO Group Inc./1/ 1,566 17,837 Fleming Companies Inc. 3,567 17,835 Saga Communications Inc./1/ 964 17,834 PAREXEL International Corp./1/ 2,097 17,825 Manhattan Associates Inc./1/ 1,318 17,819 CorVel Corp./1/ 594 17,802 Nabi Biopharmaceuticals/1/ 3,282 17,797 Prima Energy Corp./1/ 846 17,741 Seacoast Banking Corp. of Florida 924 17,722 Century Business Services Inc./1/ 6,685 17,715 Charter Communications Inc./1/ 9,517 17,702 VitalWorks Inc./1/ 2,419 17,586 Great Lakes REIT Inc. 1,003 17,522 SERENA Software Inc./1/ 1,460 17,520 7-Eleven Inc./1/ 2,044 17,517 Websense Inc./1/ 1,507 17,496 Wind River Systems Inc./1/ 5,424 17,465 Conceptus Inc./1/ 1,140 17,442 Mississippi Valley Bancshares Inc. 350 17,437 Tularik Inc./1/ 2,536 17,372 Magnum Hunter Resources Inc./1/ 3,307 17,359 State Auto Financial Corp. 1,145 17,335 FuelCell Energy Inc./1/ 2,750 17,325 FalconStor Software Inc./1/ 3,552 17,298 Del Monte Foods Co./1/ 2,116 17,288 34 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Agile Software Corp./1/ 2,691 $ 17,249 Informatica Corp./1/ 5,561 17,239 Proxim Corp. "A"/1/ 9,846 17,231 Alderwoods Group Inc./1/ 2,645 17,192 Mykrolis Corp./1/ 2,787 17,140 Eclipsys Corp./1/ 3,367 17,104 Genta Inc./1/ 2,663 17,096 Palm Harbor Homes Inc./1/ 1,472 17,091 Pioneer-Standard Electronics Inc. 2,359 17,079 Community Banks Inc. 636 17,070 Select Medical Corp./1/ 1,193 17,060 PracticeWorks Inc./1/ 984 17,023 Forrester Research Inc./1/ 1,137 17,021 Oneida Ltd. 1,220 16,995 Crawford & Co. "B" 2,691 16,980 Pope & Talbot Inc. 1,320 16,962 Pharmacopeia Inc./1/ 1,914 16,958 North Pittsburgh Systems Inc. 1,272 16,956 Central Vermont Public Service Corp. 960 16,925 Movie Gallery Inc./1/ 1,125 16,886 BSB Bancorp Inc. 848 16,884 FNB Corp. 548 16,835 CNA Surety Corp. 1,275 16,830 Powerwave Technologies Inc./1/ 4,954 16,794 Alexion Pharmaceuticals Inc./1/ 1,446 16,759 3TEC Energy Corp./1/ 1,170 16,731 Arris Group Inc./1/ 4,521 16,728 On Assignment Inc./1/ 2,022 16,722 MTS Systems Corp. 1,765 16,713 CFS Bancorp Inc. 1,185 16,708 Gabelli Asset Management Inc. "A"/1/ 563 16,693 Riggs National Corp. 1,166 16,662 Lakeland Bancorp Inc. 977 16,658 Vignette Corp./1/ 20,759 16,628 Connecticut Water Service Inc. 648 16,602 Farmer Brothers Co. 51 16,575 Centennial Bancorp 1,909 16,570 Crown American Realty Trust 1,799 16,533 BancFirst Corp. 335 16,489 Universal Forest Products Inc. 875 16,468 Southern Peru Copper Corp. 1,199 16,438 NBC Capital Corp. 654 16,415 Exelixis Inc./1/ 3,313 16,399 Citizens Inc./1/ 1,824 16,380 Echelon Corp./1/ 1,880 16,356 Clark/Bardes Inc./1/ 919 16,349 Universal Compression Holdings Inc./1/ 1,008 16,330 Cerus Corp./1/ 978 16,303 Octel Corp. 862 16,283 Multimedia Games Inc./1/ 826 16,265 Royal Gold Inc. 852 16,248 Anworth Mortgage Asset Corp. 1,332 16,237 Arrow Financial Corp. 566 16,216 Lawson Products Inc. 556 16,207 Denbury Resources Inc./1/ 1,588 16,150 Calgon Carbon Corp. 2,793 16,144 Keystone Property Trust 969 16,124 4Kids Entertainment Inc./1/ 679 16,113 Parker Drilling Co./1/ 7,299 16,058 Molecular Devices Corp./1/ 1,277 15,975 Friedman Billings Ramsey Group Inc. "A"/1/ 1,572 15,924 Alexander's Inc./1/ 261 15,921 Micromuse Inc./1/ 6,311 15,904 1st Source Corp. 1,128 15,894 MTR Gaming Group Inc./1/ 1,725 15,887 Aviall Inc./1/ 1,554 15,835 Virginia Financial Group Inc. 527 15,826 Novastar Financial Inc. 724 15,819 Tuesday Morning Corp./1/ 868 15,806 First National Corp. 572 15,787 Pericom Semiconductor Corp./1/ 1,830 15,775 Kadant Inc./1/ 1,165 15,728 UniFirst Corp. 659 15,711 Fisher Communications Inc. 334 15,698 Central Garden & Pet Co./1/ 915 15,656 Dendrite International Inc./1/ 2,479 15,642 AMC Entertainment Inc./1/ 2,108 15,599 Trex Co. Inc./1/ 569 15,556 Schedules of Investments 35 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- ESS Technology Inc./1/ 2,522 $ 15,510 Main Street Banks Inc. 837 15,510 VCA Antech Inc./1/ 1,255 15,487 Vital Sign Inc. 521 15,479 OMNOVA Solutions Inc./1/ 3,351 15,381 Interface Inc. "A" 3,875 15,345 Innkeepers USA Trust 1,920 15,341 TBC Corp./1/ 1,479 15,337 Magna Entertainment Corp. "A"/1/ 2,818 15,324 Airtran Holdings Inc./1/ 4,927 15,323 Tanger Factory Outlet Centers Inc. 547 15,305 Astec Industries Inc./1/ 1,419 15,297 Cash America International Inc. 1,867 15,291 RSA Security Inc./1/ 4,535 15,238 webMethods Inc./1/ 3,153 15,229 Maxygen Inc./1/ 2,449 15,208 Consolidated Graphics Inc./1/ 866 15,198 Interwoven Inc./1/ 7,564 15,189 AC Moore Arts & Crafts Inc./1/ 718 15,171 U.S. Industries Inc./1/ 6,443 15,141 Flushing Financial Corp. 907 15,129 Retek Inc./1/ 4,200 15,120 Ameron International Corp. 306 15,052 Energy Partners Ltd./1/ 1,847 15,035 Herley Industries Inc./1/ 808 15,005 Hawthorne Financial Corp./1/ 568 14,995 Prosperity Bancshares Inc. 880 14,986 Skyline Corp. 550 14,955 Hickory Tech Corp. 1,127 14,933 National Presto Industries Inc. 517 14,931 Camden National Corp. 574 14,924 Ennis Business Forms Inc. 1,143 14,916 Peoples Holding Co. 366 14,915 Tejon Ranch Co./1/ 610 14,878 Advanta Corp. "B" 1,439 14,865 JetBlue Airways Corp./1/ 368 14,841 Intertan Inc./1/ 2,125 14,832 Phoenix Technologies Ltd./1/ 2,042 14,805 CKE Restaurant Inc./1/ 3,696 14,784 Possis Medical Inc./1/ 1,446 14,764 Middlesex Water Co. 656 14,760 Anaren Microwave Inc./1/ 1,795 14,755 Lydall Inc./1/ 1,250 14,750 EPIQ Systems Inc./1/ 833 14,711 Genesis Microchip Inc./1/ 1,918 14,711 Rock-Tenn Co. "A" 954 14,711 JDA Software Group Inc./1/ 2,100 14,679 Insurance Auto Auctions Inc./1/ 971 14,673 Boykin Lodging Co. 1,525 14,670 Great Atlantic & Pacific Tea Co./1/ 1,749 14,657 Power-One Inc./1/ 4,917 14,653 MIM Corp./1/ 1,549 14,638 Standard Commercial Corp. 874 14,631 Lightbridge Inc./1/ 2,167 14,629 Mobile Mini Inc./1/ 1,129 14,621 Exult Inc./1/ 4,950 14,602 American Physicians Capital Inc./1/ 865 14,584 Cirrus Logic Inc./1/ 5,709 14,558 Troy Financial Corp. 558 14,553 XM Satellite Radio Holdings Inc. "A"/1/ 3,719 14,504 Great Southern Bancorp Inc. 387 14,497 Valhi Inc. 1,475 14,485 NeoPharm Inc./1/ 1,026 14,467 WFS Financial Inc./1/ 697 14,456 Kansas City Life Insurance Co. 382 14,455 PTEK Holdings Inc./1/ 3,100 14,446 St. Francis Capital Corp. 627 14,427 Gorman-Rupp Co. (The) 619 14,423 Dura Automotive Systems Inc./1/ 1,176 14,406 CuraGen Corp./1/ 3,413 14,403 Bio-Technology General Corp./1/ 4,853 14,365 Cobalt Corp./1/ 860 14,362 IBERIABANK Corp. 381 14,337 GulfMark Offshore Inc./1/ 828 14,324 SWS Group Inc. 1,169 14,320 Holly Corp. 843 14,314 Learning Tree International Inc./1/ 972 14,279 MatrixOne Inc./1/ 3,276 14,218 American National Bankshares Inc. 517 14,197 FreeMarkets Inc./1/ 2,853 14,151 36 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Stepan Co. 526 $ 14,123 Movado Group Inc. 869 14,121 Sports Authority Inc. (The)/1/ 2,365 14,119 Mission West Properties Inc. 1,273 14,105 Avigen Inc./1/ 1,778 14,100 Planar Systems Inc./1/ 884 14,091 First Bancorp North Carolina 569 14,060 United Auto Group Inc./1/ 1,002 14,038 Urban Outfitters Inc./1/ 577 14,015 Liberate Technologies/1/ 8,937 13,942 Lithia Motors Inc. "A"/1/ 817 13,897 Quaker City Bancorp Inc./1/ 417 13,832 Advanced Energy Industries Inc./1/ 1,552 13,813 Western Wireless Corp. "A"/1/ 5,110 13,797 Building Materials Holdings Corp./1/ 1,175 13,747 Corporate Office Properties Trust 1,013 13,726 Insignia Financial Group Inc./1/ 1,744 13,690 Fidelity National Information Solutions Inc./1/ 895 13,685 Keynote Systems Inc./1/ 2,084 13,650 Midway Games Inc./1/ 2,487 13,629 Midwest Banc Holdings Inc. 713 13,611 BioMarin Pharmaceutical Inc./1/ 2,341 13,554 Silicon Graphics Inc./1/ 16,520 13,546 United Online Inc./1/ 1,411 13,531 Vicor Corp./1/ 1,892 13,528 Glatfelter Co. 1,169 13,502 Oak Technology Inc./1/ 4,230 13,451 Avatar Holdings/1/ 558 13,425 Finish Line Inc. (The)/1/ 1,485 13,395 Boyds Collection Ltd. (The)/1/ 2,077 13,376 Microsemi Corp./1/ 2,384 13,374 Eon Labs Inc./1/ 619 13,358 Wild Oats Markets Inc./1/ 1,471 13,357 TALX Corp. 1,014 13,354 Endo Pharmaceuticals Holdings Inc./1/ 1,564 13,341 Buckeye Technologies Inc./1/ 1,814 13,333 Nuevo Energy Co./1/ 1,221 13,309 Oregon Steel Mills Inc./1/ 2,169 13,274 Advanced Marketing Services Inc. 961 13,252 Robbins & Myers Inc. 710 13,242 Computer Network Technology Corp./1/ 2,635 13,228 Arden Group Inc. "A"/1/ 238 13,211 Central Coast Bancorp/1/ 714 13,202 Cell Therapeutics Inc./1/ 2,977 13,099 MGI Pharma Inc./1/ 1,870 13,090 Tesoro Petroleum Corp./1/ 4,671 13,079 Gentiva Health Services Inc. 1,581 13,075 Merit Medical Systems Inc./1/ 675 13,034 SY Bancorp Inc. 375 13,024 SonoSite Inc./1/ 1,134 13,018 SPSS Inc./1/ 1,122 12,982 Frontier Airlines Inc./1/ 2,660 12,981 Comstock Resources Inc./1/ 1,881 12,979 Boston Communications Group Inc./1/ 1,257 12,972 Ultratech Stepper Inc./1/ 1,599 12,936 Priceline.com Inc./1/ 8,857 12,931 Metro One Telecommunications Inc./1/ 1,521 12,929 Global Imaging Systems Inc./1/ 684 12,914 Excel Technology Inc./1/ 686 12,904 CCC Information Services Group Inc./1/ 984 12,861 ScanSoft Inc./1/ 3,891 12,840 Praecis Pharmaceuticals Inc./1/ 4,291 12,830 Chattem Inc./1/ 314 12,821 eSpeed, Inc./1/ 1,261 12,812 REMEC Inc./1/ 3,750 12,788 GBC Bancorp 655 12,720 Correctional Properties Trust 553 12,719 Northwest Bancorp Inc. 997 12,692 CoorsTek Inc./1/ 846 12,690 Kulicke & Soffa Industries Inc./1/ 4,228 12,684 Energy Conversion Devices Inc./1/ 1,168 12,673 ILEX Oncology Inc./1/ 2,668 12,673 CTS Corp. 2,749 12,645 MRO Software Inc./1/ 1,453 12,641 Ameristar Casinos Inc./1/ 666 12,627 Integral Systems Inc./1/ 659 12,593 Schedules of Investments 37 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Union Bankshares Corp. 501 $ 12,490 Footstar Inc./1/ 1,599 12,472 Steven Madden Ltd./1/ 866 12,470 Entrust Inc./1/ 3,966 12,453 ManTech International Corp. "A"/1/ 530 12,434 USG Corp./1/ 3,103 12,412 Columbia Banking System Inc./1/ 1,121 12,409 PEC Solutions Inc./1/ 557 12,399 Sterling Financial Corp. (Washington)/1/ 683 12,383 Kenneth Cole Productions "A"/1/ 609 12,363 Nash Finch Co. 909 12,362 Quaker Chemical Corp. 641 12,333 LSI Industries Inc. 1,213 12,300 Allos Therapeutics Inc./1/ 1,447 12,271 NL Industries Inc. 844 12,246 VIB Corp./1/ 818 12,245 i2 Technologies Inc./1/ 23,529 12,235 Baldwin & Lyons Inc. "B" 559 12,220 Tweeter Home Entertainment Group Inc./1/ 1,769 12,206 Cubist Pharmaceuticals Inc./1/ 2,385 12,187 Terayon Communication Systems Inc./1/ 5,241 12,159 Stein Mart Inc./1/ 2,081 12,153 Versicor Inc./1/ 1,424 12,132 La Jolla Pharmaceutical Co./1/ 2,845 12,120 LaSalle Hotel Properties 969 12,113 Volt Information Sciences Inc./1/ 799 12,105 Digital River Inc./1/ 1,573 12,065 Bassett Furniture Industries Inc. 875 12,049 Skechers U.S.A. Inc. "A"/1/ 1,263 12,049 Universal American Financial Corp./1/ 2,457 12,042 Manugistics Group Inc./1/ 4,314 12,036 Ryerson Tull Inc. 1,871 12,031 K2 Inc./1/ 1,520 12,008 Allen Telecom Inc./1/ 2,248 12,004 BE Aerospace Inc./1/ 2,521 12,000 National Healthcare Corp./1/ 668 11,991 Riviana Foods Inc. 522 11,954 SeaChange International Inc./1/ 1,738 11,940 Stamps.com Inc./1/ 2,821 11,933 Quicksilver Resources Inc./1/ 662 11,916 II-VI Inc./1/ 891 11,895 Champion Enterprises Inc./1/ 4,040 11,878 SEMCO Energy Inc. 1,525 11,865 MemberWorks Inc./1/ 680 11,846 F5 Networks Inc./1/ 1,565 11,816 Electro Rent Corp./1/ 1,220 11,810 Gibraltar Steel Corp. 530 11,798 McGrath Rentcorp 578 11,774 New Focus Inc./1/ 4,350 11,745 Hibbet Sporting Goods Inc./1/ 565 11,724 Concurrent Computer Corp./1/ 5,141 11,721 Associated Estates Realty Corp. 1,445 11,704 Pilgrim's Pride Corp. "B" 1,256 11,681 Gray Television Inc. "A" 867 11,661 Oil States International Inc./1/ 1,165 11,650 CSS Industries Inc./1/ 323 11,647 General Communication Inc. "A"/1/ 3,094 11,633 PennRock Financial Services Corp. 401 11,629 TRC Companies Inc./1/ 678 11,628 CIRCOR International Inc. 866 11,604 Boston Beer Co. Inc. "A"/1/ 833 11,579 Array BioPharma Inc./1/ 1,484 11,560 Vitesse Semiconductor Corp./1/ 16,996 11,557 Urstadt Biddle Properties Inc. "A" 975 11,554 Ultimate Electronics Inc./1/ 906 11,552 Oxford Industries Inc. 527 11,541 Brush Engineered Materials Inc./1/ 1,475 11,505 Butler Manufacturing Co. 531 11,470 Hologic Inc./1/ 1,165 11,417 Immucor Inc./1/ 702 11,408 MEMC Electronics Materials Inc./1/ 3,425 11,371 Young Broadcasting Inc. "A"/1/ 1,311 11,366 AstroPower Inc./1/ 1,592 11,303 Texas Biotech Corp./1/ 3,693 11,301 German American Bancorp 664 11,288 Lexicon Genetics Inc./1/ 2,815 11,288 Midland Co. (The) 670 11,276 Tenneco Automotive Inc./1/ 2,677 11,270 38 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Playboy Enterprises Inc. "B"/1/ 1,177 $ 11,252 Pixelworks Inc./1/ 2,183 11,242 Stanley Furniture Co. Inc./1/ 529 11,236 ProBusiness Services Inc./1/ 1,771 11,210 InterCept Inc./1/ 1,128 11,156 Pinnacle Entertainment Inc./1/ 1,526 11,140 Penn Engineering & Manufacturing Corp. 993 11,122 Harvest Natural Resources Inc./1/ 2,040 11,077 Intrado Inc./1/ 1,145 11,061 International Specialty Products Inc./1/ 1,138 11,027 Blair Corp. 539 11,023 Aeropostale Inc./1/ 714 10,996 C-COR.net Corp./1/ 2,964 10,996 Daktronics Inc./1/ 1,144 10,971 Buckle Inc. (The)/1/ 545 10,954 Granite State Bankshares Inc. 324 10,948 Theragenics Corp./1/ 2,488 10,947 BKF Capital Group Inc./1/ 518 10,919 Universal Electronics Inc./1/ 1,220 10,919 Acadia Realty Trust 1,473 10,900 X-Rite Inc. 1,409 10,892 Allegiant Bancorp Inc. 670 10,887 Safeguard Scientifics Inc./1/ 9,761 10,835 HEICO Corp. 955 10,811 Cole National Corp./1/ 853 10,705 Osmonics Inc./1/ 897 10,674 Immunogen Inc./1/ 3,285 10,643 CNET Networks Inc./1/ 9,668 10,635 General Cable Corp. 2,760 10,626 Peoples Bancorp Inc. 413 10,614 Regent Communications Inc./1/ 2,088 10,607 UnitedGlobalCom Inc. "A"/1/ 6,462 10,598 Covenant Transport Inc. "A"/1/ 605 10,587 Esperion Therapeutics Inc./1/ 1,845 10,553 Orbital Sciences Corp./1/ 3,095 10,523 World Fuel Services Corp. 544 10,499 Antigenics Inc./1/ 1,293 10,447 Luminex Corp./1/ 1,483 10,440 Talk America Holdings Inc./1/ 4,496 10,431 Hollywood Casino Corp. "A"/1/ 863 10,425 Nature's Sunshine Products Inc. 962 10,418 Powell Industries Inc./1/ 550 10,340 Aaon Inc./1/ 610 10,321 Magma Design Automation Inc./1/ 1,157 10,320 Audiovox Corp. "A"/1/ 1,473 10,310 Keystone Automotive Industries Inc./1/ 624 10,296 Woodhead Industries Inc. 934 10,293 Guilford Pharmaceuticals Inc./1/ 2,120 10,261 UAL Corp./1/ 4,788 10,246 Republic Bancshares Inc./1/ 527 10,245 Resource America Inc. "A" 1,279 10,232 aaiPharma Inc./1/ 852 10,216 infoUSA Inc./1/ 2,359 10,214 Golden Telecom Inc./1/ 846 10,194 Wabash National Corp. 1,882 10,182 Radiant Systems Inc./1/ 1,260 10,080 Aksys Ltd./1/ 1,789 10,036 Graphic Packaging International Corp./1/ 1,257 10,031 Navigant International Inc./1/ 955 10,028 Encore Wire Corp./1/ 1,138 10,014 Digimarc Corp./1/ 858 10,013 Friedman's Inc. 1,287 10,013 AMCOL International Corp. 1,786 10,002 Quixote Corp. 542 10,000 Bei Technologies Inc. 909 9,999 National Western Life Insurance Company "A"/1/ 98 9,996 Roanoke Electric Steel Corp. 920 9,982 Encore Acquisition Co./1/ 606 9,969 Columbia Laboratories Inc./1/ 2,212 9,954 First Community Bancorp 343 9,926 Integrated Electrical Services Inc./1/ 2,653 9,922 Ixia/1/ 2,417 9,910 Elizabeth Arden Inc./1/ 826 9,904 Cascade Bancorp 726 9,903 CoBiz Inc. 614 9,885 Citizens First Bancorp Inc. 550 9,883 PennFed Financial Services Inc. 359 9,869 Schedules of Investments 39 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- AAR Corp. 2,060 $ 9,785 Monolithic System Technology Inc./1/ 970 9,700 Shenandoah Telecommunications Co. 191 9,691 AMERCO/1/ 963 9,688 National Processing Inc./1/ 570 9,684 Superior Financial Corp. 513 9,644 OraSure Technologies Inc./1/ 2,158 9,579 PetroQuest Energy Inc./1/ 2,163 9,560 Concord Camera Corp./1/ 2,044 9,525 Casella Waste Systems Inc. "A"/1/ 1,476 9,491 Collins & Aikman Corp./1/ 2,642 9,485 Zomax Inc./1/ 2,424 9,453 Neurogen Corp./1/ 1,177 9,451 State Bancorp Inc. 531 9,425 Cray Inc./1/ 2,381 9,405 Winston Hotels Inc. 1,297 9,390 Renaissance Learning Inc./1/ 660 9,379 Coastal Bancorp Inc. 339 9,370 SonicWALL Inc./1/ 3,402 9,356 Siliconix Inc./1/ 526 9,347 First South Bancorp Inc. 262 9,340 Santander BanCorp 676 9,329 AtheroGenics Inc./1/ 1,488 9,315 Vail Resorts Inc./1/ 654 9,261 Credit Acceptance Corp./1/ 1,128 9,250 TriZetto Group Inc. (The)/1/ 1,857 9,248 Luby's Inc./1/ 1,879 9,245 Dril-Quip Inc./1/ 547 9,217 Ducommun Inc./1/ 523 9,210 WatchGuard Technologies Inc./1/ 2,083 9,165 ParkerVision Inc./1/ 811 9,164 eResearch Technology Inc./1/ 495 9,133 Children's Place Retail Stores Inc. (The)/1/ 900 9,090 Openwave Systems Inc./1/ 14,651 9,084 Ocwen Financial Corp./1/ 3,129 9,074 Lakeland Financial Corp. 383 9,073 MainSource Financial Group Inc. 380 9,040 Mesa Air Group Inc./1/ 2,472 9,023 Viasat Inc./1/ 1,432 9,022 Triangle Pharmaceuticals Inc./1/ 3,333 9,002 American Pharmaceutical Partners Inc./1/ 551 8,998 NS Group Inc./1/ 1,516 8,990 Carreker Corp./1/ 1,466 8,987 RPC Inc. 907 8,979 Berkshire Hills Bancorp Inc. 379 8,906 PICO Holdings Inc./1/ 806 8,866 ValueClick Inc./1/ 4,061 8,853 Information Resources Inc./1/ 2,386 8,852 Sports Resorts International Inc./1/ 2,121 8,845 NN Inc. 955 8,834 Firstfed America Bancorp Inc. 366 8,817 Charlotte Russe Holding Inc./1/ 928 8,816 Lufkin Industries Inc. 358 8,807 Sitel Corp./1/ 4,994 8,740 Infonet Services Corp. "B"/1/ 3,898 8,732 Artisan Components Inc./1/ 955 8,699 Starrett (LS) Co. "A" 569 8,694 OmniVision Technologies Inc./1/ 1,318 8,686 Alliance Imaging Inc./1/ 726 8,683 SBS Technologies Inc./1/ 1,208 8,649 Stratex Networks Inc./1/ 6,750 8,633 Supertex Inc./1/ 829 8,622 Rudolph Technologies Inc./1/ 836 8,602 Hanmi Financial Corp./1/ 569 8,535 Three-Five Systems Inc./1/ 1,830 8,491 Cadiz Inc./1/ 2,829 8,487 Pomeroy Computer Resources/1/ 859 8,470 Schawk Inc. 862 8,465 First Horizon Pharmaceutical Corp./1/ 1,565 8,451 Gladstone Capital Corp. 500 8,440 Instinet Group Inc. 2,719 8,429 Alico Inc. 296 8,421 Bryn Mawr Bank Corp. 213 8,409 Wireless Facilities Inc./1/ 1,897 8,404 Harmonic Inc./1/ 4,798 8,396 Aspen Technology Inc./1/ 2,798 8,394 CPI Corp. 610 8,387 40 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Penwest Pharmaceuticals Co.(1) 1,004 $ 8,363 Deb Shops Inc. 335 8,352 Vans Inc.(1) 1,466 8,342 Alliance Semiconductor Corp.(1) 2,190 8,322 Steinway Musical Instruments Inc.(1) 542 8,320 SureBeam Corporation "A"(1) 4,605 8,289 Arena Pharmaceuticals Inc.(1) 1,473 8,249 Maxwell Shoe Co. Inc. "A"(1) 726 8,240 Angelica Corp. 383 8,231 Value Line Inc. 211 8,229 LSB Bancshares Inc. 500 8,220 ArQule Inc.(1) 1,595 8,214 Great American Financial Resources Inc. 527 8,195 POZEN Inc.(1) 1,614 8,183 Bruker Daltonics Inc.(1) 1,601 8,181 Virage Logic Corp.(1) 866 8,166 Genencor International Inc.(1) 857 8,150 Radiologix Inc.(1) 1,270 8,128 U.S. Concrete Inc.(1) 1,545 8,111 Foamex International Inc.(1) 1,474 8,107 Salix Pharmaceuticals Ltd.(1) 956 8,069 MCSi Inc.(1) 1,620 8,019 World Wrestling Entertainment Inc.(1) 958 8,018 iDine Rewards Network Inc.(1) 866 8,010 Tremont Corp. 250 8,003 QRS Corp.(1) 1,205 7,989 NYFIX Inc.(1) 2,051 7,978 AsiaInfo Holdings Inc.(1) 2,388 7,964 D&K Healthcare Resources Inc. 888 7,948 Sykes Enterprises Inc.(1) 1,887 7,944 Universal Display Corp.(1) 1,319 7,927 First Consulting Group Inc.(1) 1,459 7,908 Raindance Communications Inc.(1) 2,556 7,898 Merix Corp.(1) 969 7,897 Tyler Technologies Inc.(1) 1,794 7,894 Digene Corp.(1) 998 7,884 Integrated Defense Technologies Inc.(1) 400 7,880 Beasley Broadcast Group Inc. "A"(1) 627 7,875 Interpool Inc. 655 7,873 VIVUS Inc.(1) 1,822 7,871 Applica Inc.(1) 1,484 7,865 Ramco-Gershenson Properties Trust 400 7,864 Sauer-Danfoss Inc. 873 7,857 Provident Bancorp Inc. 276 7,852 Administaff Inc.(1) 2,035 7,835 Dover Downs Gaming & Entertainment Inc. 957 7,790 World Acceptance Corp.(1) 981 7,770 Crown Media Holdings Inc.(1) 2,216 7,756 Healthcare Services Group Inc.(1) 566 7,720 Centene Corp.(1) 289 7,713 DiamondCluster International Inc. "A"(1) 2,360 7,694 Option Care Inc.(1) 869 7,691 Kosan Biosciences Inc.(1) 1,174 7,678 Bostonfed Bancorp Inc. 256 7,677 Wackenhut Corrections Corp.(1) 676 7,666 Secure Computing Corp.(1) 2,394 7,661 Buca Inc.(1) 956 7,648 Allscripts Healthcare Solutions Inc.(1) 2,660 7,608 Research Frontiers Inc.(1) 849 7,607 Impax Laboratories Inc.(1) 1,565 7,606 Transmeta Corp.(1) 7,840 7,605 Medical Staffing Network Holdings Inc.(1) 501 7,600 PLATO Learning Inc.(1) 1,138 7,568 Caliper Technologies Corp.(1) 1,805 7,563 Reliant Resources Inc.(1) 4,315 7,551 WESCO International Inc.(1) 1,747 7,512 Tollgrade Communications Inc.(1) 959 7,490 Neose Technologies Inc.(1) 965 7,488 Semitool Inc.(1) 1,454 7,488 Nu Horizons Electronics Corp.(1) 1,232 7,392 Ingles Markets Inc. "A" 689 7,372 Finisar Corp.(1) 10,664 7,358 Lexar Media Inc.(1) 2,776 7,356 Schedules of Investments 41 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Netro Corp./1/ 3,585 $ 7,349 Exact Sciences Corp./1/ 549 7,340 Humboldt Bancorp 608 7,284 SRA International Inc. "A"/1/ 254 7,272 Coastal Financial Corp. 537 7,271 Datastream Systems Inc./1/ 1,445 7,225 ITLA Capital Corp./1/ 239 7,215 Gulf Island Fabrication Inc./1/ 611 7,185 Aftermarket Technology Corp./1/ 555 7,176 SpectraLink Corp./1/ 1,258 7,158 Sharper Image Corp./1/ 374 7,151 Capitol Bancorp Ltd. 410 7,142 First of Long Island Corp. 213 7,082 Integrated Silicon Solution Inc./1/ 2,374 7,075 Cholestech Corp./1/ 680 7,052 CardioDynamics International Corp./1/ 2,450 7,007 Sapient Corp./1/ 6,795 6,999 Vesta Insurance Group 2,784 6,960 Curative Health Services Inc./1/ 641 6,955 Interchange Financial Services Corp. 420 6,951 Southwest Bancorp Inc. 276 6,941 White Electronic Designs Corp./1/ 924 6,921 Global Power Equipment Group Inc./1/ 1,468 6,900 Ariad Pharmaceuticals Inc./1/ 2,178 6,882 Metris Companies Inc. 2,979 6,881 Unitil Corp. 253 6,869 EMS Technologies Inc./1/ 667 6,843 Dave & Buster's Inc./1/ 608 6,816 Wilsons The Leather Experts Inc./1/ 955 6,800 Microtune Inc./1/ 2,820 6,796 Pacific Union Bank/1/ 605 6,782 Geron Corp./1/ 1,738 6,778 Whitehall Jewellers Inc./1/ 643 6,764 Viewpoint Corp./1/ 3,097 6,751 Century Aluminum Co. 968 6,737 Donnelly Corp. 259 6,711 Republic Bancorp Inc. "A" 596 6,705 Orthologic Corp./1/ 1,721 6,660 Trans World Entertainment Corp./1/ 2,111 6,650 LodgeNet Entertainment Corp./1/ 866 6,634 ABC Bancorp 517 6,628 Ribapharm Inc./1/ 1,470 6,615 Quidel Corp./1/ 1,477 6,602 First Oak Brook Bancshares "A" 222 6,600 Macatawa Bank Corp. 358 6,598 Charter Financial Corp. 235 6,594 Standard Motor Products Inc. 610 6,594 Cornell Cos Inc./1/ 828 6,583 Xicor Inc./1/ 1,822 6,577 West Marine Inc./1/ 517 6,571 FSI International Inc./1/ 2,135 6,533 kForce.com Inc./1/ 2,097 6,522 Department 56 Inc./1/ 624 6,521 Prime Medical Service Inc./1/ 705 6,514 Racing Champions Corp./1/ 398 6,503 Computer Horizons Corp./1/ 1,745 6,491 Keithley Instruments Inc. 534 6,488 ChipPAC Inc./1/ 3,019 6,458 deCODE genetics Inc./1/ 2,935 6,457 Material Sciences Corp./1/ 530 6,450 TransMontaigne Inc./1/ 1,293 6,439 Presstek Inc./1/ 2,523 6,434 TriCo Bancshares 253 6,401 PC-Tel Inc./1/ 1,219 6,351 Aspect Communications Corp./1/ 4,293 6,311 LeCroy Corp./1/ 701 6,281 Meridian Resource Corp. (The)/1/ 2,968 6,262 Rent-Way Inc./1/ 2,081 6,243 Acacia Research Corp./1/ 1,569 6,230 GSI Commerce Inc./1/ 1,231 6,217 Closure Medical Corp./1/ 556 6,205 MasTec Inc./1/ 1,917 6,192 I-many Inc./1/ 3,091 6,182 Peapack-Gladstone Financial Corp. 95 6,175 Register.com/1/ 2,034 6,163 PriceSmart Inc./1/ 308 6,160 StorageNetworks Inc./1/ 4,924 6,155 Kos Pharmaceuticals Inc./1/ 548 6,137 @Road Inc./1/ 1,135 6,129 42 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Intermet Corp. 1,260 $ 6,061 MRV Communications Inc./1/ 7,124 6,055 Terra Industries Inc./1/ 3,271 6,051 Quaker Fabric Corp./1/ 960 6,038 ONYX Software Corp./1/ 3,160 6,036 Sanderson Farms Inc. 377 6,032 SJW Corp. 77 6,006 APAC Customer Services Inc./1/ 2,061 5,998 AEP Industries Inc./1/ 221 5,974 Century Bancorp Inc. "A" 225 5,971 Southwest Water Co. 416 5,932 Kensey Nash Corp./1/ 394 5,927 Royal Bancshares of Pennsylvania "A" 323 5,911 Proton Energy Systems Inc./1/ 2,787 5,908 Paxson Communications Corp./1/ 2,682 5,900 Cardiac Science Inc./1/ 2,979 5,898 Comfort Systems USA Inc./1/ 1,938 5,892 Dover Motorsports Inc. 1,473 5,892 Triton PCS Holdings Inc. "A"/1/ 2,818 5,890 Rainbow Technologies Inc./1/ 2,073 5,887 Galyan's Trading Co./1/ 588 5,886 Milacron Inc. 1,298 5,854 Yardville National Bancorp 344 5,845 1-800 CONTACTS INC./1/ 583 5,830 RadiSys Corp./1/ 1,471 5,825 Cascade Corp./1/ 414 5,817 Gart Sports Co./1/ 308 5,812 Charles River Associates Inc./1/ 350 5,810 Compucom Systems Inc./1/ 1,007 5,800 Grace (W.R.) & Co./1/ 3,622 5,795 Allegiance Telecom Inc./1/ 6,961 5,778 Acclaim Entertainment Inc./1/ 5,249 5,774 Applied Molecular Evolution Inc./1/ 1,473 5,774 PayPal Inc./1/ 276 5,771 Parkvale Financial Corp. 244 5,746 Genzyme Corp. - Biosurgery Division/1/ 3,070 5,741 ANADIGICS Inc./1/ 2,690 5,730 Massbank Corp. 190 5,689 Pain Therapeutics Inc./1/ 1,433 5,689 Advisory Board Co. (The)/1/ 192 5,687 SoundView Technology Group Inc./1/ 4,359 5,667 OSI Systems Inc./1/ 327 5,659 Kendle International Inc./1/ 844 5,655 DocuCorp International Inc./1/ 520 5,626 Overland Storage Inc./1/ 518 5,625 Magnetek Inc./1/ 1,754 5,613 AVANIR Pharmaceuticals "A"/1/ 4,873 5,604 Witness Systems Inc./1/ 962 5,599 U.S. Physical Therapy Inc./1/ 529 5,581 Packeteer Inc./1/ 1,860 5,580 Columbia Bancorp 295 5,567 DVI Inc./1/ 1,159 5,563 Interpore International/1/ 686 5,557 Oplink Communications Inc./1/ 9,555 5,542 Onyx Pharmaceuticals Inc./1/ 1,289 5,517 Aether Systems Inc./1/ 2,058 5,515 Strattec Security Corp./1/ 108 5,510 Trikon Technologies Inc./1/ 969 5,504 Drexler Technology Corp./1/ 378 5,496 Turnstone Systems Inc./1/ 2,475 5,495 NetScout Systems Inc./1/ 1,500 5,490 3D Systems Corp./1/ 831 5,468 Touch America Holdings Inc./1/ 8,800 5,456 Zygo Corp./1/ 1,286 5,453 Sirius Satellite Radio Inc./1/ 5,418 5,418 Financial Industries Corp. 355 5,417 Bush Industries Inc. "A" 672 5,416 Hypercom Corp./1/ 1,893 5,414 Petroleum Helicopters Inc./1/ 205 5,392 Peet's Coffee & Tea Inc./1/ 420 5,376 Bell Microproducts Inc./1/ 1,283 5,363 NetScreen Technologies Inc./1/ 494 5,360 Bentley Pharmaceuticals Inc./1/ 629 5,346 Illumina Inc./1/ 1,552 5,339 Ladish Co. Inc./1/ 860 5,332 First State Bancorp 216 5,324 Penford Corp. 394 5,319 Horizon Offshore Inc./1/ 1,261 5,310 SpeedFam-IPEC Inc./1/ 1,424 5,283 Schedules of Investments 43 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- TiVo Inc./1/ 1,462 $ 5,263 Roxio Inc./1/ 1,736 5,260 Read-Rite Corp./1/ 10,072 5,237 Summit Bancshares Inc. 247 5,199 Riverstone Networks Inc./1/ 10,168 5,186 Specialty Laboratories Inc./1/ 563 5,174 Shoe Carnival Inc./1/ 362 5,159 Indevus Pharmaceuticals Inc./1/ 3,320 5,146 Northwest Pipe Co./1/ 287 5,134 Somera Communications Inc./1/ 2,491 5,107 Biopure Corp./1/ 1,459 5,106 ITXC Corp./1/ 2,053 5,091 Sizeler Property Investors Inc. 501 5,040 Three Rivers Bancorp Inc. 315 5,040 Modtech Holdings Inc./1/ 503 5,030 Water Pik Technologies Inc./1/ 495 5,024 Akamai Technologies Inc./1/ 6,012 4,990 CompuCredit Corp./1/ 939 4,977 Syntel Inc./1/ 421 4,955 Durect Corp./1/ 1,582 4,904 Plug Power Inc./1/ 1,024 4,902 ICT Group Inc./1/ 242 4,900 WCI Communities Inc./1/ 385 4,890 Concord Communications Inc./1/ 960 4,848 Tasty Baking Company 379 4,832 Trico Marine Services Inc./1/ 1,902 4,831 Lifeline Systems Inc./1/ 219 4,818 SCM Microsystems Inc./1/ 1,220 4,818 Martha Stewart Living Omnimedia Inc. "A"/1/ 687 4,809 Bone Care International Inc./1/ 831 4,803 Ulticom Inc./1/ 868 4,800 LTC Properties Inc. 590 4,791 SpeechWorks International Inc./1/ 2,065 4,750 Answerthink Inc./1/ 3,270 4,741 Hexcel Corp./1/ 1,906 4,727 American Superconductor Corp./1/ 1,741 4,701 NATCO Group Inc. "A"/1/ 624 4,699 Tropical Sportswear International Corp./1/ 362 4,699 Coca-Cola Bottling Co. Consolidated 100 4,690 Midas Inc./1/ 938 4,690 Midwest Express Holdings Inc./1/ 1,170 4,680 Mesaba Holdings Inc./1/ 857 4,662 Brookstone Inc./1/ 378 4,649 Mattson Technology Inc./1/ 2,808 4,633 Advanced Tissue Sciences Inc./1/ 6,013 4,630 Bank of the Ozarks Inc. 202 4,626 Quanta Services Inc./1/ 2,218 4,613 Vitria Technology Inc./1/ 5,898 4,600 Wellsford Real Properties Inc./1/ 267 4,592 Green Mountain Coffee Inc./1/ 355 4,576 j2 Global Communications Inc./1/ 230 4,575 1-800-FLOWERS.COM Inc./1/ 651 4,557 Dynamics Research Corp./1/ 312 4,549 Numerical Technologies Inc./1/ 1,558 4,518 Salton Inc./1/ 529 4,502 MapInfo Corp./1/ 1,137 4,491 Mestek Inc./1/ 246 4,490 Wyndham International Inc. "A"/1/ 13,178 4,481 Nelson (Thomas) Inc./1/ 509 4,479 Nara Bancorp Inc. 259 4,473 Artesyn Technologies Inc./1/ 2,958 4,467 MIPS Technologies Inc. "A"/1/ 3,355 4,459 Partners Trust Financial Group Inc. 317 4,428 Navigators Group Inc./1/ 217 4,399 First Defiance Financial Corp. 256 4,396 Banc Corp. (The)/1/ 567 4,389 Applied Films Corporation/1/ 398 4,354 American Home Mortgage Holdings Inc. 394 4,346 Netegrity Inc./1/ 2,106 4,338 Inet Technologies Inc./1/ 855 4,335 IXYS Corp./1/ 860 4,326 Ciphergen Biosystems Inc./1/ 1,434 4,302 Seaboard Corp. 20 4,300 Championship Auto Racing Teams Inc./1/ 1,139 4,294 Sun Bancorp Inc. 191 4,294 44 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- TriPath Imaging Inc./1/ 1,902 $ 4,280 OPNET Technologies Inc./1/ 671 4,247 Avanex Corp./1/ 3,091 4,235 Escalade Inc./1/ 212 4,208 Cantel Medical Corp./1/ 416 4,202 Urologix Inc./1/ 912 4,159 National Beverage Corp./1/ 304 4,153 Bombay Co. Inc. (The)/1/ 1,530 4,131 NYMAGIC Inc./1/ 286 4,130 Princeton Review Inc. (The)/1/ 686 4,116 Vical Inc./1/ 1,782 4,116 Spartan Motors Inc. 364 4,113 Marvel Enterprises Inc./1/ 583 4,081 Smart & Final Inc./1/ 950 4,038 ABIOMED Inc./1/ 1,220 4,026 Coldwater Creek Inc./1/ 305 4,020 Westfield Financial Inc. 265 3,999 Horizon Organic Holding Corp./1/ 256 3,994 Dynacq International Inc./1/ 343 3,993 Omega Healthcare Investors Inc./1/ 690 3,947 Time Warner Telecom Inc. "A"/1/ 4,817 3,902 Rex Stores Corp./1/ 377 3,883 General Binding Corp./1/ 243 3,852 Peregrine Pharmaceuticals Inc./1/ 9,170 3,851 Maui Land & Pineapple Co. Inc./1/ 213 3,834 Castle (A.M.) & Co. 566 3,820 Synplicity Inc./1/ 883 3,806 Sipex Corp./1/ 2,219 3,772 CryoLife Inc./1/ 1,444 3,769 Nuance Communications Inc./1/ 2,211 3,759 Rigel Pharmaceuticals Inc./1/ 2,346 3,754 P.A.M. Transportation Services Inc./1/ 196 3,740 ON Semiconductor Corp./1/ 2,987 3,734 Harris Interactive Inc./1/ 1,616 3,717 Exploration Company of Delaware (The)/1/ 715 3,711 MedCath Corp./1/ 326 3,684 Flow International Corp./1/ 1,135 3,666 Electroglas Inc./1/ 1,830 3,660 Sequenom Inc./1/ 2,371 3,651 Catapult Communications Corp./1/ 374 3,646 US Unwired Inc. "A"/1/ 5,207 3,645 ADE Corp./1/ 860 3,621 Embarcadero Technologies Inc./1/ 863 3,616 Bebe Stores Inc./1/ 305 3,602 Acterna Corp./1/ 8,953 3,581 Active Power Inc./1/ 2,671 3,579 Atlas Air Worldwide Holdings Inc./1/ 1,478 3,562 NetRatings Inc./1/ 609 3,557 Chicago Pizza & Brewery Inc./1/ 515 3,548 Courier Corp. 93 3,534 Net2Phone Inc./1/ 1,492 3,521 Richardson Electronics Ltd. 532 3,501 Euronet Worldwide Inc./1/ 692 3,481 Penn Traffic Company (The)/1/ 532 3,474 SeeBeyond Technology Corp./1/ 2,479 3,471 Manufacturers Services Ltd./1/ 1,278 3,451 National Health Realty Inc. 219 3,451 Embrex Inc./1/ 308 3,419 HealthTronics Surgical Services Inc./1/ 408 3,415 American Medical Security Group Inc./1/ 241 3,408 Technical Olympic USA Inc./1/ 223 3,407 Redback Networks Inc./1/ 10,977 3,403 Actuate Corp./1/ 3,579 3,400 Vastera Inc./1/ 1,577 3,391 Align Technology Inc./1/ 1,223 3,374 MetaSolv Inc./1/ 2,189 3,349 Omnicell Inc./1/ 571 3,335 Avenue A Inc./1/ 1,333 3,332 AXT Inc./1/ 1,596 3,320 Progenics Pharmaceuticals Inc./1/ 657 3,298 Party City Corp./1/ 236 3,245 Capstone Turbine Corp./1/ 5,405 3,189 Monterey Pasta Co./1/ 685 3,185 EMCORE Corp./1/ 2,092 3,180 Inverness Medical Innovations Inc./1/ 330 3,132 Goody's Family Clothing Inc./1/ 662 3,125 Schedules of Investments 45 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Benihana Inc./1/ 250 $ 3,100 SS&C Technologies Inc./1/ 389 3,093 Asbury Automotive Group Inc./1/ 350 3,062 Syntroleum Corp./1/ 1,821 3,023 IMCO Recycling Inc./1/ 499 3,019 Restoration Hardware Inc./1/ 670 3,015 IMPCO Technologies Inc./1/ 826 2,974 Aphton Corp./1/ 1,322 2,961 EnergySouth Inc. 116 2,958 CB Bancshares Inc. 84 2,950 Kyphon Inc./1/ 223 2,944 Sun Bancorp Inc. "B"/1/ 219 2,904 Equity One Inc. 219 2,891 FPIC Insurance Group Inc./1/ 327 2,878 LendingTree Inc./1/ 195 2,874 Private Media Group Inc./1/ 1,214 2,865 Remedy Temp Inc./1/ 228 2,857 Medis Technologies Ltd./1/ 667 2,855 Meridian Medical Technologies Inc./1/ 79 2,840 CompX International Inc. 305 2,830 Spectrian Corp./1/ 956 2,820 HealthExtras Inc./1/ 665 2,813 MAPICS Inc./1/ 500 2,800 SuperGen Inc./1/ 1,618 2,799 Guess ? Inc./1/ 650 2,788 Sanchez Computer Associates Inc./1/ 1,139 2,779 LookSmart Ltd./1/ 2,845 2,760 Mail-Well Inc./1/ 2,652 2,758 Infogrames Inc./1/ 1,234 2,739 Columbus McKinnon Corp./1/ 520 2,735 Marine Products Corp. 256 2,716 EarthShell Corp./1/ 3,872 2,710 Sonus Networks Inc./1/ 12,864 2,701 Alamo Group Inc. 218 2,694 Champps Entertainment Inc./1/ 341 2,670 dELiA*s Corp. "A"/1/ 2,541 2,668 Inktomi Corp./1/ 10,597 2,649 Epix Medical Inc./1/ 581 2,632 Tripos Inc./1/ 334 2,622 Shop At Home Inc./1/ 1,118 2,616 MedSource Technologies Inc./1/ 347 2,609 Cepheid Inc./1/ 677 2,606 PDI Inc./1/ 640 2,605 Women First HealthCare Inc./1/ 555 2,597 Covansys Corporation/1/ 1,523 2,589 Michael Baker Corp./1/ 251 2,585 Harvard Bioscience Inc./1/ 847 2,566 Centillium Communications Inc./1/ 2,135 2,562 August Technology Corp./1/ 559 2,515 Franklin Financial Corp. 102 2,513 NetFlix Inc./1/ 257 2,493 Neoforma Inc./1/ 263 2,480 Alaris Medical Inc./1/ 505 2,409 Centennial Communications Corp. "A"/1/ 828 2,401 Quadramed Corp./1/ 1,306 2,364 MarineMax Inc./1/ 262 2,361 Inrange Technologies Corp./1/ 832 2,321 Nastech Pharmaceutical Co. Inc./1/ 278 2,302 PC Connection Inc./1/ 561 2,278 Factory 2-U Stores Inc./1/ 1,170 2,270 Independence Holding Co. 111 2,220 Chordiant Software Inc./1/ 2,369 2,203 Med-Design Corp. (The)/1/ 615 2,171 Acme Communications Inc./1/ 275 2,145 Computer Programs & Systems Inc./1/ 100 2,138 NaPro BioTherapeutics Inc./1/ 1,900 2,128 PDF Solutions Inc./1/ 377 1,994 Actrade Financial Technologies Ltd./1/,/2/ 785 1,978 Merchants Bancshares Inc. 80 1,976 First Banks America Inc./1/ 49 1,967 Stratos Lightwave Inc./1/ 5,442 1,959 Portal Software Inc./1/ 8,128 1,951 Digitas Inc./1/ 884 1,945 Revlon Inc. "A"/1/ 650 1,944 Seattle Genetics Inc./1/ 597 1,922 Homestore.com Inc./1/ 6,351 1,905 PrivateBancorp Inc. 62 1,895 46 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- SONICblue Inc./1/ 7,857 $ 1,886 Novadigm Inc./1/ 936 1,872 Res-Care Inc./1/ 376 1,865 MEEMIC Holdings Inc./1/ 65 1,863 RMH Teleservices Inc./1/ 221 1,803 Hall Kinion & Associates Inc./1/ 300 1,800 Checkers Drive-in Restaurants Inc./1/ 224 1,792 Lifecore Biomedical Inc./1/ 289 1,792 Caminus Corp./1/ 986 1,755 Bradley Pharmaceuticals Inc./1/ 199 1,743 FAO Inc./1/ 611 1,741 iGate Corp./1/ 629 1,711 LabOne Inc./1/ 104 1,681 Sangamo BioSciences Inc./1/ 851 1,676 Nanometrics Inc./1/ 614 1,633 PLX Technology Inc./1/ 1,469 1,616 Schnitzer Steel Industries Inc. "A" 88 1,593 Warwick Community Bancorp 59 1,593 WestPoint Stevens Inc./1/ 1,601 1,569 Center Trust Inc. 264 1,531 Deltagen Inc./1/ 1,021 1,531 Alaska Communications Systems Group Inc./1/ 897 1,507 William Lyon Homes Inc./1/ 65 1,489 TTM Technologies Inc./1/ 947 1,487 Handspring Inc./1/ 1,569 1,475 Finlay Enterprises Inc./1/ 97 1,463 BWAY Corporation/1/ 100 1,390 Drew Industries Inc./1/ 87 1,353 Aurora Foods Inc./1/ 2,074 1,348 Alamosa Holdings Inc./1/ 5,840 1,343 Young Innovations Inc./1/ 46 1,234 Bioreliance Corp./1/ 59 1,228 Monro Muffler Brake Inc./1/ 68 1,214 Therma-Wave Inc./1/ 1,533 1,211 Willow Grove Bancorp Inc. 100 1,180 UbiquiTel Inc./1/ 4,627 1,157 Discovery Partners International Inc./1/ 345 1,101 Ceres Group Inc./1/ 565 1,090 Paradyne Networks Inc./1/ 806 1,072 Endocardial Solutions Inc./1/ 331 1,069 Virco Manufacturing Corp. 110 1,067 Ambassadors Group Inc./1/ 72 1,060 RCN Corp./1/ 2,047 1,044 U.S. Xpress Enterprises Inc. "A"/1/ 100 978 Cherokee Inc./1/ 60 968 Drugstore.com Inc./1/ 550 918 NASB Financial Inc. 44 915 Quovadx Inc./1/ 653 914 BriteSmile Inc./1/ 1,192 894 Price Legacy Corporation/1/ 296 867 RITA Medical Systems Inc./1/ 196 860 ClearOne Communications Inc./1/ 251 856 AirGate PCS Inc./1/ 1,944 855 Zymogenetics Inc./1/ 104 832 Gaiam Inc./1/ 67 768 Lawson Software Inc./1/ 210 743 Culp Inc./1/ 86 731 Del Laboratories Inc./1/ 40 723 ProxyMed Inc./1/ 44 666 Bio-Reference Laboratories Inc./1/ 100 650 Next Level Communications Inc./1/ 836 644 Dobson Communications Corp. "A"/1/ 2,053 636 Liberty Livewire Corp. "A"/1/ 388 609 DDi Corp./1/ 3,608 574 Mothers Work Inc./1/ 15 570 Sypris Solutions Inc./1/ 51 553 Pegasystems Inc./1/ 100 546 Magellan Health Services Inc./1/ 2,043 531 Penton Media Inc./1/ 1,897 455 Optical Communication Products Inc./1/ 368 283 Tellium Inc./1/ 691 263 Sonic Innovations Inc./1/ 49 257 Advanced Power Technology Inc./1/ 45 175 Cross Media Marketing Corp./1/ 109 82 HPL Technologies Inc./1/ 594 30 TOTAL COMMON STOCKS (COST: $1,013,024,715) 693,182,586 Schedules of Investments 47 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- SHORT TERM INSTRUMENTS - 1.33% - ------------------------------------------------------------------- Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 7,912,826 $ 7,912,826 Dreyfus Money Market Fund 414,095 414,095 Goldman Sachs Financial Square Prime Obligation Fund 301,388 301,388 Providian Temp Cash Money Market Fund 621,143 621,143 - ------------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $9,249,452) 9,249,452 - ------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES - 101.19% (Cost $1,022,274,167) 702,432,038 - ------------------------------------------------------------------- Other Assets, Less Liabilities - (1.19%) (8,269,572) - ------------------------------------------------------------------- NET ASSETS - 100.00% $694,162,466 =================================================================== /1/ Non-income earning securities. /2/ Security valued at fair value in accordance with procedures approved by the Board of Trustees (Note 1). See notes to financial statements. 48 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------- COMMON STOCKS - 99.89% - --------------------------------------------------------------- General Electric Co. 92,455 $ 2,279,016 Microsoft Corp./1/ 41,672 1,822,733 Pfizer Inc. 58,106 1,686,236 Johnson & Johnson 28,019 1,515,268 Wal-Mart Stores Inc. 25,348 1,248,136 Intel Corp. 62,216 864,180 Coca-Cola Co. (The) 16,070 770,717 Cisco Systems Inc./1/ 68,042 713,080 Procter & Gamble Co. 7,172 641,033 PepsiCo Inc. 16,454 607,975 Abbott Laboratories 14,529 586,972 Home Depot Inc. 21,870 570,807 Merck & Co. Inc. 12,206 557,936 Fannie Mae 9,267 551,757 American International Group Inc. 9,373 512,703 Dell Computer Corp./1/ 21,041 494,674 Medtronic Inc. 11,299 475,914 Philip Morris Companies Inc. 12,186 472,817 Pharmacia Corp. 12,042 468,193 Amgen Inc./1/ 11,000 458,700 Lilly (Eli) and Co. 8,052 445,598 International Business Machines Corp. 7,377 430,743 Wyeth 12,343 392,507 Freddie Mac 6,010 335,959 Oracle Corp./1/ 38,287 300,936 Lowe's Companies Inc. 7,233 299,446 Walgreen Co. 9,530 293,143 Fifth Third Bancorp 4,750 290,842 3M Co. 2,620 288,121 Anheuser-Busch Companies Inc. 5,444 275,466 Citigroup Inc. 8,920 264,478 Cardinal Health Inc. 4,206 261,613 Target Corp. 8,444 249,267 Colgate-Palmolive Co. 4,504 242,991 Texas Instruments Inc. 16,145 238,462 Viacom Inc. "B"/1/ 5,821 236,042 United Parcel Service Inc. 3,630 226,984 Tenet Healthcare Corp./1/ 4,551 225,275 UnitedHealth Group Inc. 2,531 220,754 AOL Time Warner Inc./1/ 18,826 220,264 HCA Inc. 4,590 218,530 American Express Co. 6,854 213,708 Automatic Data Processing Inc. 5,774 200,762 Marsh & McLennan Companies Inc. 4,819 200,663 First Data Corp. 7,120 199,004 QUALCOMM Inc./1/ 7,166 197,925 MBNA Corp. 9,886 181,705 Applied Materials Inc./1/ 15,282 176,507 Sysco Corp. 6,176 175,337 Gillette Co. (The) 5,806 171,858 Baxter International Inc. 5,586 170,652 Kohls Corp./1/ 2,713 164,978 Boeing Co. (The) 4,746 161,981 Bristol-Myers Squibb Co. 6,692 159,270 Motorola Inc. 13,927 141,777 Kimberly-Clark Corp. 2,434 137,862 Harley-Davidson Inc. 2,818 130,896 SLM Corp. 1,370 127,602 Forest Laboratories Inc. "A"/1/ 1,493 122,441 Schering-Plough Corp. 5,463 116,471 General Mills Inc. 2,428 107,852 WellPoint Health Networks Inc./1/ 1,352 99,102 Omnicom Group Inc. 1,741 96,939 McGraw-Hill Companies Inc. (The) 1,527 93,483 Boston Scientific Corp./1/ 2,958 93,354 Guidant Corp./1/ 2,851 92,116 United Technologies Corp. 1,618 91,401 Schwab (Charles) Corp. (The) 10,189 88,644 Bed Bath & Beyond Inc./1/ 2,717 88,493 Baker Hughes Inc. 2,957 85,842 TJX Companies Inc. 5,028 85,476 Clear Channel Communications Inc./1/ 2,428 84,373 Intuit Inc./1/ 1,765 80,360 Kroger Co./1/ 5,686 80,173 State Street Corp. 2,049 79,173 Newmont Mining Corp. 2,865 78,816 Concord EFS Inc./1/ 4,761 75,605 Paychex Inc. 3,062 74,468 Maxim Integrated Products Inc./1/ 3,006 74,429 Starbucks Corp./1/ 3,602 74,309 Electronic Arts Inc./1/ 1,120 73,875 Schedules of Investments 49 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------- eBay Inc./1/ 1,365 $ 72,086 Stryker Corp. 1,247 71,827 AFLAC Inc. 2,334 71,630 Block (H & R) Inc. 1,702 71,501 Anthem Inc./1/ 1,068 69,420 Costco Wholesale Corp./1/ 2,138 69,207 Zimmer Holdings Inc./1/ 1,799 68,974 Wells Fargo & Company 1,412 68,002 Allergan Inc. 1,245 67,728 Bank of New York Co. Inc. (The) 2,343 67,338 Mattel Inc. 3,733 67,231 Analog Devices Inc./1/ 3,410 67,177 Sara Lee Corp. 3,662 66,978 Capital One Financial Corp. 1,917 66,942 Biomet Inc. 2,499 66,548 Gap Inc. (The) 5,737 62,246 Linear Technology Corp. 2,954 61,207 Yum! Brands Inc./1/ 2,196 60,851 McKesson Corp. 2,135 60,485 Genentech Inc./1/ 1,853 60,463 Danaher Corp. 1,037 58,953 Moody's Corp. 1,210 58,685 St. Jude Medical Inc./1/ 1,632 58,262 International Game Technology Inc./1/ 836 57,801 Illinois Tool Works Inc. 981 57,222 Synovus Financial Corp. 2,759 56,891 Lexmark International Group Inc. "A"/1/ 1,200 56,400 Interpublic Group of Companies Inc. 3,558 56,394 Staples Inc./1/ 4,355 55,700 AmerisourceBergen Corp. 751 53,636 Best Buy Co. Inc./1/ 2,403 53,611 Gilead Sciences Inc./1/ 1,597 53,547 Progressive Corp. (The) 1,054 53,364 EMC Corp./1/ 11,604 53,030 AutoZone Inc./1/ 670 52,836 Electronic Data Systems Corp. 3,761 52,579 Heinz (H.J.) Co. 1,573 52,491 Mellon Financial Corp. 2,005 51,990 SunGard Data Systems Inc./1/ 2,639 51,329 Wrigley (William Jr.) Co. 1,021 50,529 Ecolab Inc. 1,194 49,826 Fiserv Inc./1/ 1,772 49,758 Xilinx Inc./1/ 3,134 49,636 MedImmune Inc./1/ 2,344 49,036 KLA-Tencor Corp./1/ 1,751 48,923 Lockheed Martin Corp. 755 48,826 Harrah's Entertainment Inc./1/ 1,004 48,403 Veritas Software Corp./1/ 3,276 48,190 Apollo Group Inc. "A"/1/ 1,100 47,773 Nextel Communications Inc. "A"/1/ 6,230 47,037 Southwest Airlines Co. 3,597 46,977 Anadarko Petroleum Corp. 1,054 46,945 Cintas Corp. 1,100 46,112 Health Management Associates Inc. "A"/1/ 2,259 45,677 Symantec Corp./1/ 1,338 45,050 Laboratory Corp. of America Holdings/1/ 1,323 44,691 Coca-Cola Enterprises Inc. 2,049 43,521 IDEC Pharmaceuticals Corp./1/ 1,043 43,305 AT&T Wireless Services Inc./1/ 10,438 43,005 Quest Diagnostics Inc./1/ 694 42,702 Adobe Systems Inc. 2,231 42,612 King Pharmaceuticals Inc./1/ 2,320 42,154 Pitney Bowes Inc. 1,351 41,192 Safeway Inc./1/ 1,833 40,876 Masco Corp. 2,085 40,762 IMS Health Inc. 2,701 40,434 Biogen Inc./1/ 1,374 40,217 Family Dollar Stores Inc. 1,481 39,809 Darden Restaurants Inc. 1,627 39,438 Kellogg Co. 1,183 39,335 New York Times Co. "A" 861 39,132 EchoStar Communications Corp./1/ 2,260 39,098 General Motors Corp. "H"/1/ 4,265 39,025 Affiliated Computer Services Inc. "A"/1/ 898 38,210 Pepsi Bottling Group Inc. 1,628 38,095 Sun Microsystems Inc./1/ 14,662 37,975 Microchip Technology Inc./1/ 1,851 37,853 BJ Services Co./1/ 1,452 37,752 Avery Dennison Corp. 656 37,379 Mylan Laboratories Inc. 1,091 35,719 Dollar General Corp. 2,635 35,362 50 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------- Caremark Rx Inc./1/ 2,059 $ 35,003 Yahoo! Inc./1/ 3,646 34,892 Applera Corp. - Applied Biosystems Group 1,853 33,910 Northern Trust Corp. 893 33,684 L-3 Communications Holdings Inc./1/ 638 33,623 DST Systems Inc./1/ 1,108 32,653 General Dynamics Corp. 401 32,613 RadioShack Corp./1/ 1,614 32,377 Univision Communications Inc./1/ 1,415 32,262 Genzyme Corp. - General Division/1/ 1,561 32,172 Micron Technology Inc./1/ 2,599 32,150 Express Scripts Inc. "A"/1/ 585 31,894 PeopleSoft Inc./1/ 2,577 31,877 Oxford Health Plans Inc./1/ 815 31,736 Altera Corp./1/ 3,589 31,117 Lincare Holdings Inc./1/ 994 30,854 Clorox Co. 765 30,738 Chiron Corp./1/ 865 30,223 American Standard Companies Inc./1/ 473 30,092 Black & Decker Corp. 705 29,561 Waters Corp./1/ 1,219 29,561 USA Networks Inc./1/ 1,476 28,605 ENSCO International Inc. 1,134 28,395 Amazon.com Inc./1/ 1,765 28,116 ChoicePoint Inc./1/ 787 28,049 Michaels Stores Inc./1/ 613 28,014 Marriott International Inc. "A" 953 27,627 Smith International Inc./1/ 938 27,493 Varian Medical Systems Inc./1/ 632 27,170 Equifax Inc. 1,242 27,001 Agilent Technologies Inc./1/ 2,065 26,969 Deluxe Corp. 597 26,901 Hershey Foods Corp. 429 26,619 Synopsys Inc./1/ 697 26,591 Halliburton Co. 2,022 26,104 Ross Stores Inc. 731 26,053 DENTSPLY International Inc. 645 25,910 Sabre Holdings Corp./1/ 1,339 25,910 Novellus Systems Inc./1/ 1,244 25,888 First Health Group Corp./1/ 948 25,710 Westwood One Inc./1/ 705 25,204 Cadence Design Systems Inc./1/ 2,466 25,079 Kraft Foods Inc. 686 25,012 Expeditors International Washington Inc. 872 24,364 Molex Inc. 1,035 24,343 Waste Management Inc. 1,043 24,323 Convergys Corp./1/ 1,602 24,078 Patterson Dental Co./1/ 461 23,594 Mohawk Industries Inc./1/ 474 23,534 Dollar Tree Stores Inc./1/ 1,064 23,451 Universal Health Services Inc. "B"/1/ 458 23,427 CDW Computer Centers Inc./1/ 546 23,129 Ocean Energy Inc. 1,157 23,082 Robert Half International Inc./1/ 1,424 22,599 Alcoa Inc. 1,160 22,388 Tiffany & Co. 1,034 22,159 Limited Brands Inc. 1,543 22,127 Commerce Bancorp Inc. 533 22,125 UST Inc. 782 22,060 PETsMART Inc./1/ 1,236 22,013 Amerada Hess Corp. 324 21,993 Brinker International Inc./1/ 835 21,626 Murphy Oil Corp. 262 21,502 Brown-Forman Corp. "B" 321 21,491 Nike Inc. "B" 495 21,374 QLogic Corp./1/ 816 21,249 Wendy's International Inc. 639 21,157 Coach Inc./1/ 820 20,992 Beckman Coulter Inc. 542 20,975 Whole Foods Market Inc./1/ 488 20,906 Siebel Systems Inc./1/ 3,616 20,792 Alliant Techsystems Inc./1/ 298 20,637 Federated Investors Inc. "B" 762 20,566 Estee Lauder Companies Inc. "A" 706 20,290 Household International Inc. 713 20,185 Network Appliance Inc./1/ 2,751 20,165 Career Education Corp./1/ 415 19,923 Gallagher (Arthur J.) & Co. 801 19,745 Williams-Sonoma Inc./1/ 831 19,637 Jabil Circuit Inc./1/ 1,312 19,391 Schedules of Investments 51 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------- Gentex Corp./1/ 700 $ 19,033 Dun & Bradstreet Corp./1/ 551 18,519 Kinder Morgan Inc. 514 18,221 Starwood Hotels & Resorts Worldwide Inc. 814 18,152 TCF Financial Corp. 426 18,033 BEA Systems Inc./1/ 3,395 17,586 Cephalon Inc./1/ 429 17,512 IVAX Corp./1/ 1,410 17,301 Fastenal Co. 545 17,211 BISYS Group Inc. (The)/1/ 1,020 17,044 Scripps (E.W.) Co. 242 16,771 SEI Investment Co. 700 16,716 CH Robinson Worldwide Inc. 620 16,684 National Semiconductor Corp./1/ 1,396 16,668 Maytag Corp. 719 16,666 Cooper Cameron Corp./1/ 399 16,662 Allied Capital Corp. 753 16,483 Rent-A-Center Inc./1/ 315 16,364 Brocade Communications Systems Inc./1/ 2,166 16,310 BMC Software Inc./1/ 1,245 16,272 Investors Financial Services Corp. 599 16,215 Charles River Laboratories International Inc./1/ 411 16,132 Barr Laboratories Inc./1/ 257 16,009 Mid Atlantic Medical Services Inc./1/ 436 15,783 Patterson-UTI Energy Inc./1/ 618 15,765 NVR Inc./1/ 52 15,591 Abercrombie & Fitch Co. "A"/1/ 789 15,520 AdvancePCS/1/ 686 15,456 McCormick & Co. Inc. 677 15,436 Burlington Resources Inc. 399 15,306 Ceridian Corp./1/ 1,073 15,290 Fisher Scientific International Inc./1/ 502 15,236 Network Associates Inc./1/ 1,432 15,222 Fair Isaac and Co. Inc. 464 15,173 Steris Corp./1/ 609 15,170 Eaton Vance Corp. 545 15,064 Legg Mason Inc. 342 14,556 SPX Corp./1/ 144 14,530 Honeywell International Inc. 667 14,447 Qwest Communications International Inc./1/ 6,332 14,437 North Fork Bancorp Inc. 381 14,417 Millipore Corp. 446 14,178 Lamar Advertising Co./1/ 465 14,113 Cheesecake Factory (The)/1/ 466 13,901 Millennium Pharmaceuticals Inc./1/ 1,486 13,850 Entercom Communications Corp./1/ 291 13,785 Reynolds & Reynolds Co. (The) "A" 613 13,756 Viad Corp. 673 13,749 Manpower Inc. 465 13,643 Investment Technology Group Inc./1/ 458 13,401 Brown & Brown Inc. 446 13,380 Triad Hospitals Inc./1/ 352 13,358 Stanley Works (The) 407 13,297 Polaris Industries Inc. 213 13,206 Corinthian Colleges Inc./1/ 349 13,171 DaVita Inc./1/ 555 13,098 Neuberger Berman Inc. 484 13,044 Sprint Corp. (PCS Group)/1/ 6,647 13,028 Andrx Group/1/ 587 13,002 Accredo Health Inc./1/ 271 12,921 Henry Schein Inc./1/ 243 12,818 Teradyne Inc./1/ 1,331 12,778 Juniper Networks Inc./1/ 2,643 12,686 Techne Corp./1/ 385 12,624 BJ's Wholesale Club Inc./1/ 662 12,585 Herman Miller Inc. 705 12,521 Harman International Industries Inc. 238 12,317 Mercury Interactive Corp./1/ 717 12,304 Activision Inc./1/ 511 12,228 Cytyc Corp./1/ 1,140 12,221 Dreyer's Grand Ice Cream Inc. 173 12,086 Krispy Kreme Doughnuts Inc./1/ 383 11,973 Waddell & Reed Financial Inc. "A" 675 11,921 Sealed Air Corp./1/ 704 11,891 Celgene Corp./1/ 703 11,839 Level 3 Communications Inc./1/ 3,033 11,798 Certegy Inc./1/ 580 11,658 Fox Entertainment Group Inc. "A"/1/ 523 11,522 52 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------- LifePoint Hospitals Inc./1/ 368 $ 11,477 Renal Care Group Inc./1/ 348 11,446 Ruby Tuesday Inc. 606 11,381 Applebee's International Inc. 517 11,333 Leggett & Platt Inc. 571 11,300 Covance Inc./1/ 576 11,272 Dow Jones & Co. Inc. 292 11,216 Overture Services Inc./1/ 470 11,078 JDS Uniphase Corp./1/ 5,645 10,996 Comcast Corp. "A"/1/ 526 10,972 Scios Inc./1/ 431 10,969 Graco Inc. 440 10,912 Hilb Rogal & Hamilton Co. 264 10,890 Catellus Development Corp./1/ 587 10,830 Chico's FAS Inc./1/ 678 10,801 Neurocrine Biosciences Inc./1/ 262 10,742 Stericycle Inc./1/ 313 10,617 LSI Logic Corp./1/ 1,670 10,605 Zebra Technologies Corp. "A"/1/ 201 10,591 Lam Research Corp./1/ 1,184 10,538 NVIDIA Corp./1/ 1,191 10,195 Take-Two Interactive Software Inc./1/ 351 10,179 Performance Food Group Co./1/ 299 10,154 Education Management Corp./1/ 229 10,138 Noble Energy Inc. 297 10,089 Weight Watchers International Inc./1/ 232 10,060 Harris Corp. 298 9,980 Broadcom Corp. "A"/1/ 934 9,975 Dial Corp. (The) 460 9,872 United Bancshares Inc. 340 9,863 DeVry Inc./1/ 529 9,850 Corporate Executive Board Co. (The)/1/ 344 9,821 Federal Realty Investment Trust 363 9,801 Jacobs Engineering Group Inc./1/ 317 9,789 Edwards Lifesciences Corp./1/ 382 9,775 Becton, Dickinson & Co. 343 9,741 Catalina Marketing Corp./1/ 345 9,688 Affymetrix Inc./1/ 465 9,672 SICOR Inc./1/ 633 9,628 Doral Financial Corp. 396 9,559 International Flavors & Fragrances Inc. 300 9,555 Wiley (John) & Sons Inc. "A" 434 9,552 Fairchild Semiconductor International Corp. "A"/1/ 1,007 9,536 Iron Mountain Inc./1/ 376 9,396 Rowan Companies Inc. 502 9,357 Diagnostic Products Corp. 203 9,338 Apogent Technologies Inc./1/ 499 9,311 Big Lots Inc./1/ 588 9,308 CACI International Inc. "A"/1/ 262 9,288 Roper Industries Inc. 269 9,281 Intersil Corp. "A"/1/ 716 9,279 Macerich Co. (The) 299 9,263 New York Community Bancorp Inc. 328 9,240 National-Oilwell Inc./1/ 474 9,186 Respironics Inc./1/ 286 9,155 IDEXX Laboratories Inc./1/ 295 9,130 Freeport-McMoRan Copper & Gold Inc./1/ 678 9,126 Cerner Corp./1/ 259 9,119 O'Reilly Automotive Inc./1/ 318 9,101 Medicis Pharmaceutical Corp. "A"/1/ 222 9,073 AMETEK Inc. 309 8,998 Omnicare Inc. 426 8,997 Citrix Systems Inc./1/ 1,484 8,949 Community Health Systems Inc./1/ 336 8,948 Apria Healthcare Group Inc./1/ 379 8,929 UTStarcom Inc./1/ 579 8,841 Pacific Capital Bancorp 322 8,745 Washington Real Estate Investment Trust 343 8,705 Chelsea Property Group Inc. 257 8,674 GTECH Holdings Corp./1/ 349 8,662 Manor Care Inc./1/ 382 8,587 Edwards (J.D.) & Co./1/ 928 8,584 Watson Pharmaceuticals Inc./1/ 348 8,529 Mettler Toledo International Inc./1/ 328 8,528 KPMG Consulting Inc./1/ 1,316 8,501 Transkaryotic Therapies Inc./1/ 260 8,481 Pharmaceutical Product Development Inc./1/ 434 8,394 Agere Systems Inc. "B"/1/ 8,387 8,303 Schedules of Investments 53 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------- AGCO Corp./1/ 357 $ 8,282 Citizens Communications Co./1/ 1,219 8,265 Invacare Corp. 241 8,254 Staten Island Bancorp Inc. 473 8,230 Symbol Technologies Inc. 1,068 8,192 Donaldson Co. Inc. 238 8,171 Global Payments Inc. 319 8,166 CEC Entertainment Inc./1/ 239 8,152 International Bancshares Corp. 209 8,128 ResMed Inc./1/ 284 8,122 Newfield Exploration Co./1/ 241 8,095 Chesapeake Energy Corp. 1,225 8,085 Solectron Corp./1/ 3,822 8,064 Chittenden Corp. 272 8,051 T. Rowe Price Group Inc. 322 8,037 International Rectifier Corp./1/ 514 8,029 RF Micro Devices Inc./1/ 1,337 8,022 Pixar Inc./1/ 166 7,985 Regis Corp. 282 7,978 Outback Steakhouse Inc./1/ 288 7,914 99 Cents Only Stores/1/ 381 7,887 Henry (Jack) & Associates Inc. 633 7,868 First Bancorp 205 7,815 Sonic Corp./1/ 338 7,808 Cabot Microelectronics Corp./1/ 209 7,783 Harte-Hanks Inc. 416 7,742 Enzon Inc./1/ 401 7,715 St. Joe Company (The) 279 7,700 Varco International Inc./1/ 453 7,665 THQ Inc./1/ 368 7,654 Waste Connections Inc./1/ 220 7,654 InterMune Inc./1/ 232 7,614 Province Healthcare Co./1/ 443 7,597 Shurgard Storage Centers Inc. "A" 239 7,557 Intergraph Corp./1/ 441 7,537 Allied Waste Industries Inc./1/ 1,021 7,504 ITT Educational Services Inc./1/ 397 7,452 Affiliated Managers Group Inc./1/ 167 7,450 Thermo Electron Corp./1/ 460 7,420 Cooper Companies Inc. 141 7,402 Too Inc./1/ 316 7,356 Acxiom Corp./1/ 518 7,345 Invitrogen Corp./1/ 214 7,291 Alexandria Real Estate Equities Inc. 171 7,264 Sanmina-SCI Corp./1/ 2,614 7,241 Evergreen Resources Inc./1/ 175 7,171 Varian Inc./1/ 259 7,151 TrustCo Bank Corp. NY 672 7,108 Olin Corp. 433 7,093 CLARCOR Inc. 230 7,061 Hilton Hotels Corp. 617 7,021 Advance Auto Parts Inc./1/ 133 7,014 Tellabs Inc./1/ 1,719 6,996 Grant Prideco Inc./1/ 819 6,994 Tootsie Roll Industries Inc. 234 6,954 CAL Dive International Inc./1/ 343 6,917 Amylin Pharmaceuticals Inc./1/ 416 6,914 Furniture Brands International Inc./1/ 301 6,908 Tidewater Inc. 255 6,882 Integrated Circuit Systems Inc./1/ 437 6,861 Emulex Corp./1/ 604 6,801 FTI Consulting Inc./1/ 171 6,799 Human Genome Sciences Inc./1/ 559 6,742 Copart Inc./1/ 620 6,727 Pride International Inc./1/ 516 6,708 Hispanic Broadcasting Corp./1/ 359 6,695 Essex Property Trust Inc. 135 6,674 Key Energy Services Inc./1/ 847 6,674 Landstar System Inc./1/ 136 6,667 UCBH Holdings Inc. 169 6,640 Church & Dwight Co. Inc. 199 6,597 WebMD Corp./1/ 1,301 6,570 Lincoln Electric Holding Inc. 293 6,484 Unit Corp./1/ 338 6,473 Constellation Brands Inc./1/ 280 6,468 BlackRock Inc./1/ 156 6,462 Alliance Data Systems Corp./1/ 425 6,439 Scholastic Corp./1/ 144 6,434 Diamond Offshore Drilling Inc. 322 6,424 Smucker (J.M.) Co. (The) 175 6,423 Patina Oil & Gas Corp. 225 6,413 Brookline Bancorp Inc. 537 6,310 54 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------- CIENA Corp./1/ 2,067 $ 6,139 Corning Inc./1/ 3,834 6,134 Comverse Technology Inc./1/ 870 6,081 Perrigo Co./1/ 572 6,080 Arbitron Inc./1/ 178 6,070 Rational Software Corp./1/ 1,397 6,035 Otter Tail Corp. 229 6,032 Mills Corp. 203 6,021 PMC-Sierra Inc./1/ 1,544 5,991 Matthews International Corp. "A" 256 5,983 Fred's Inc. 200 5,972 Sigma-Aldrich Corp. 121 5,962 Talbots Inc. (The) 212 5,936 Cymer Inc./1/ 316 5,890 National Instruments Corp./1/ 269 5,888 ARAMARK Corp. "B"/1/ 280 5,880 Radio One Inc. "D"/1/ 356 5,870 Airgas Inc./1/ 446 5,856 Spinnaker Exploration Co./1/ 204 5,855 Pinnacle Systems Inc./1/ 542 5,854 Titan Corp. (The)/1/ 608 5,837 Linens 'N Things Inc./1/ 317 5,823 Mentor Corp. 182 5,802 Bio-Rad Laboratories Inc. "A"/1/ 154 5,800 AmSurg Corp./1/ 192 5,793 Plains Resource Inc./1/ 224 5,775 Grey Wolf Inc./1/ 1,600 5,760 Pacific Sunwear of California Inc./1/ 282 5,742 Cypress Semiconductor Corp./1/ 873 5,727 Plantronics Inc./1/ 350 5,705 Ball Corp. 113 5,694 Perot Systems Corp. "A"/1/ 610 5,673 Hyperion Solutions Corp./1/ 309 5,670 Panera Bread Co. "A"/1/ 210 5,670 Jeffries Group Inc. 148 5,648 S&T Bancorp Inc. 224 5,640 DRS Technologies Inc./1/ 151 5,620 Priority Healthcare Corp. "B"/1/ 223 5,620 Pediatrix Medical Group Inc./1/ 181 5,609 Cathay Bancorp Inc. 143 5,577 Semtech Corp./1/ 570 5,529 Christopher & Banks Corp./1/ 220 5,526 Amphenol Corp. "A"/1/ 178 5,518 Timberland Co. "A"/1/ 174 5,512 Brady Corp. "A" 170 5,474 E*TRADE Group Inc./1/ 1,228 5,465 Superior Industries International Inc. 116 5,461 Nautilus Group Inc. (The)/1/ 280 5,460 Pier 1 Imports Inc. 286 5,454 Chateau Communities Inc. 206 5,440 Coventry Health Care Inc./1/ 167 5,427 Wilson Greatbatch Technologies Inc./1/ 195 5,421 Trimeris Inc./1/ 122 5,419 Baldor Electric Co. 282 5,386 Valspar Corp. (The) 144 5,371 American Eagle Outfitters Inc./1/ 445 5,367 CSG Systems International Inc./1/ 490 5,341 Advanced Fibre Communications Inc./1/ 402 5,335 Alliance Gaming Corp./1/ 345 5,334 Cox Radio Inc. "A"/1/ 203 5,310 Penn National Gaming Inc./1/ 281 5,305 Advanced Micro Devices Inc./1/ 991 5,292 CVB Financial Corp. 241 5,288 Southwest Bancorp of Texas Inc./1/ 145 5,279 Hot Topic Inc./1/ 291 5,247 Coinstar Inc./1/ 203 5,233 VeriSign Inc./1/ 1,034 5,222 Quintiles Transnational Corp./1/ 548 5,211 Syncor International Corp./1/ 162 5,202 Integrated Device Technology Inc./1/ 498 5,199 FactSet Research Systems Inc. 195 5,177 Chiquita Brands International Inc./1/ 329 5,083 Ethan Allen Interiors Inc. 156 5,048 Price Communications Corp./1/ 446 5,040 SangStat Medical Corp./1/ 241 5,027 Swift Transportation Co. Inc./1/ 322 5,023 AmeriCredit Corp./1/ 616 4,971 Thor Industries Inc. 143 4,971 International Speedway Corp. "A" 125 4,966 Ryan's Family Steak Houses Inc./1/ 408 4,965 NPS Pharmaceuticals Inc./1/ 240 4,936 Computer Associates International Inc. 514 4,934 Schedules of Investments 55 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------- Provident Financial Group Inc. 196 $ 4,918 Foot Locker Inc./1/ 492 4,915 ABM Industries Inc. 347 4,893 NBTY Inc./1/ 377 4,893 Macrovision Corp./1/ 400 4,892 Flir Systems Inc./1/ 139 4,864 Western Digital Corp./1/ 1,025 4,818 Cost Plus Inc./1/ 179 4,806 Polycom Inc./1/ 703 4,773 ADVO Inc./1/ 150 4,762 Oshkosh Truck Corp. 84 4,738 Interstate Bakeries Corp. 178 4,729 Pharmaceutical Resources Inc./1/ 169 4,729 Providian Financial Corp./1/ 965 4,729 Mercury Computer Systems Inc./1/ 200 4,720 SCP Pool Corp./1/ 172 4,715 Varian Semiconductor Equipment Associates Inc./1/ 286 4,702 Hovnanian Enterprises Inc. "A"/1/ 139 4,698 ITT Industries Inc. 75 4,675 Identix Inc./1/ 785 4,671 Sybase Inc./1/ 402 4,671 National Penn Bancshares Inc. 166 4,641 Red Hat Inc./1/ 974 4,627 Getty Images Inc./1/ 230 4,614 Avocent Corp./1/ 344 4,603 Engineered Support Systems Inc. 80 4,563 Total System Services Inc. 347 4,563 East West Bancorp Inc. 135 4,558 Expedia Inc. "A"/1/ 90 4,558 Black Box Corp./1/ 137 4,548 Flowserve Corp./1/ 453 4,530 John Nuveen Co. "A" 199 4,527 Cambrex Corp. 123 4,526 Libbey Inc. 142 4,524 Tupperware Corp. 271 4,504 Cognizant Technology Solutions Corp./1/ 78 4,483 Kronos Inc./1/ 182 4,483 TMP Worldwide Inc./1/ 497 4,473 InterDigital Communications Corp./1/ 511 4,446 University of Phoenix Online/1/ 138 4,437 Axcelis Technologies Inc./1/ 909 4,436 Winnebago Industries Inc. 112 4,427 Foundry Networks Inc./1/ 805 4,411 Carlisle Companies Inc. 120 4,402 Silicon Laboratories Inc./1/ 240 4,399 Dime Community Bancshares 205 4,391 Cognex Corp./1/ 314 4,368 Hotels.com "A"/1/ 86 4,350 Borland Software Corp./1/ 557 4,339 Yankee Candle Co. Inc. (The)/1/ 252 4,327 P.F. Chang's China Bistro Inc./1/ 149 4,325 Documentum Inc./1/ 372 4,297 Orthodontic Centers of America Inc./1/ 401 4,291 American Italian Pasta Co. "A"/1/ 120 4,283 WD-40 Co. 148 4,277 Harleysville National Corp. 177 4,273 Cree Inc./1/ 341 4,262 Isis Pharmaceuticals Inc./1/ 429 4,230 Glimcher Realty Trust 225 4,217 Argosy Gaming Co./1/ 183 4,202 Albany International Corp. "A" 221 4,195 Pioneer Natural Resources Co./1/ 173 4,195 Compuware Corp./1/ 1,373 4,188 Regeneron Pharmaceuticals Inc./1/ 309 4,172 SkyWest Inc. 318 4,166 Cross Country Inc./1/ 297 4,158 Internet Security Systems Inc./1/ 337 4,152 Digital Insight Corp./1/ 264 4,150 Simpson Manufacturing Co. Inc./1/ 132 4,143 Community First Bankshares Inc. 148 4,126 VISX Inc./1/ 446 4,117 DoubleClick Inc./1/ 800 4,112 Adolor Corp./1/ 292 4,094 KV Pharmaceuticals Co./1/ 216 4,082 Rare Hospitality International Inc./1/ 174 4,075 SanDisk Corp./1/ 308 4,038 Sierra Health Services Inc./1/ 225 4,037 PRG-Schultz International Inc./1/ 326 4,036 UGI Corp. 111 4,035 Extreme Networks Inc./1/ 958 4,033 United Natural Foods Inc./1/ 175 4,030 56 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------- Alkermes Inc./1/ 510 $ 4,024 Readers Digest Association Inc. (The) "A" 257 4,022 Harland (John H.) Co. 148 4,018 BARRA Inc./1/ 147 4,016 Haemonetics Corp./1/ 169 4,010 Computer Sciences Corp./1/ 144 4,002 Applied Micro Circuits Corp./1/ 1,397 3,995 Health Net Inc./1/ 185 3,968 Columbia Sportswear Co./1/ 114 3,958 Paxar Corp./1/ 272 3,955 Kroll Inc./1/ 199 3,946 Anchor BanCorp Wisconsin Inc. 195 3,939 IHOP Corp./1/ 163 3,928 Strayer Education Inc. 66 3,926 Hollywood Entertainment Corp./1/ 270 3,920 Teleflex Inc. 86 3,920 Manitowoc Co. Inc. (The) 143 3,911 SurModics Inc./1/ 123 3,908 AES Corp. (The)/1/ 1,545 3,878 Insight Enterprises Inc./1/ 380 3,857 Newell Rubbermaid Inc. 124 3,828 Tech Data Corp./1/ 145 3,828 Skyworks Solutions Inc./1/ 844 3,823 Manufactured Home Communities Inc. 119 3,794 DIANON Systems Inc./1/ 80 3,785 Frontier Financial Corp. 148 3,771 American Medical Systems Holdings Inc./1/ 181 3,756 Tekelec/1/ 435 3,754 Fossil Inc./1/ 185 3,709 Action Performance Companies Inc./1/ 144 3,701 Jack in the Box Inc./1/ 162 3,694 Circuit City Stores Inc. - CarMax Group/1/ 230 3,691 Rockwell Collins 168 3,686 Autodesk Inc. 290 3,674 United Community Banks Inc. 151 3,669 Federal Signal Corp. 199 3,666 W-H Energy Services Inc./1/ 211 3,650 Forest Oil Corp./1/ 143 3,646 Shaw Group Inc. (The)/1/ 256 3,635 Unilab Corp./1/ 173 3,628 Gymboree Corp./1/ 222 3,621 Commonwealth Telephone Enterprises Inc./1/ 104 3,616 Nextel Partners Inc. "A"/1/ 672 3,615 Oceaneering International Inc./1/ 142 3,614 Itron Inc./1/ 196 3,604 Ocular Sciences Inc./1/ 154 3,597 Plexus Corp./1/ 388 3,589 Micrel Inc./1/ 582 3,585 ATMI Inc./1/ 254 3,581 Circuit City Stores Inc. 236 3,575 Suffolk Bancorp 111 3,574 SureWest Communications 122 3,571 Myriad Genetics Inc./1/ 224 3,548 TriQuint Semiconductor Inc./1/ 1,005 3,548 Rouse Co. 111 3,546 Grey Global Group Inc. 6 3,540 Boston Private Financial Holdings Inc. 166 3,536 Ferro Corp. 153 3,534 Progress Software Corp./1/ 292 3,533 Electro Scientific Industries Inc./1/ 238 3,530 Arch Coal Inc. 213 3,525 Advent Software Inc./1/ 307 3,515 Unisys Corp./1/ 501 3,507 MICROS Systems Inc./1/ 151 3,502 ADC Telecommunications Inc./1/ 3,041 3,497 Atlantic Coast Airlines Holdings Inc./1/ 378 3,496 Cyberonics Inc./1/ 203 3,494 Donnelley (R.H.) Corp./1/ 134 3,484 Banta Corp. 98 3,479 Donnelley (R.R.) & Sons Co. 148 3,479 Armor Holdings Inc./1/ 232 3,478 Exar Corp./1/ 301 3,477 ICU Medical Inc./1/ 95 3,469 Delta & Pine Land Co. 185 3,467 IGEN International Inc./1/ 116 3,466 Invision Technologies Inc./1/ 108 3,457 Knight Transportation Inc./1/ 222 3,441 Rogers Corp./1/ 147 3,432 Schedules of Investments 57 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------- Rambus Inc./1/ 786 $ 3,411 Financial Federal Corp./1/ 107 3,408 Inter-Tel Inc. 167 3,398 Idex Corp. 118 3,369 D.R. Horton Inc. 180 3,352 eFunds Corp./1/ 355 3,330 Albany Molecular Research Inc./1/ 195 3,321 Papa John's International Inc./1/ 114 3,321 Energizer Holdings Inc./1/ 109 3,314 CheckFree Corp./1/ 291 3,312 Entegris Inc./1/ 425 3,302 Odyssey Healthcare Inc./1/ 110 3,295 Blyth Inc. 118 3,292 S1 Corp./1/ 614 3,291 Pennsylvania Real Estate Investment Trust 127 3,272 Sylvan Learning Systems Inc./1/ 238 3,256 Quest Software Inc./1/ 345 3,243 Pacific Northwest Bancorp 119 3,240 FEI Co./1/ 224 3,237 OshKosh B'Gosh Inc. "A" 94 3,230 FMC Corp./1/ 125 3,227 Ameritrade Holding Corp./1/ 864 3,223 NDCHealth Corp. 207 3,219 Ticketmaster "B"/1/ 211 3,218 Headwaters Inc./1/ 232 3,206 Hudson United Bancorp 120 3,192 Payless ShoeSource Inc./1/ 59 3,187 W Holding Co. Inc. 194 3,162 Biosite Inc./1/ 109 3,160 McDATA Corp. "A"/1/ 581 3,155 Rite Aid Corp./1/ 1,502 3,154 MAXIMUS Inc./1/ 140 3,136 Georgia Gulf Corp. 137 3,133 Shuffle Master Inc./1/ 168 3,126 Maverick Tube Corp./1/ 351 3,113 Station Casinos Inc./1/ 183 3,113 California Pizza Kitchen Inc./1/ 135 3,106 Hooper Holmes Inc. 500 3,100 Group 1 Automotive Inc./1/ 138 3,084 United Surgical Partners International Inc./1/ 140 3,084 Aaron Rents Inc. "B" 134 3,082 Hollinger International Inc. 339 3,082 Wintrust Financial Corp. 107 3,066 Westamerica Bancorp 76 3,061 Enzo Biochem Inc./1/ 214 3,060 Keane Inc./1/ 452 3,051 CARBO Ceramics Inc. 85 3,046 Monaco Coach Corp./1/ 152 3,045 ElkCorp 178 3,038 Quiksilver Inc./1/ 134 3,027 Teledyne Technologies Inc./1/ 166 3,015 Sun Communities Inc. 82 3,009 Pure Resources Inc./1/ 134 3,002 Frontier Oil Corp. 242 3,001 Dionex Corp./1/ 117 2,991 Umpqua Holdings Corp. 182 2,990 Scientific Games Corp. "A"/1/ 445 2,982 FileNET Corp./1/ 288 2,981 Mentor Graphics Corp./1/ 609 2,972 Macromedia Inc./1/ 384 2,968 Martek Biosciences Corp./1/ 181 2,965 Superior Energy Services Inc./1/ 456 2,964 Stone Energy Corp./1/ 91 2,958 AMERIGROUP Corp./1/ 88 2,953 Schweitzer-Mauduit International Inc. 138 2,946 Mine Safety Appliances Co. 75 2,939 PETCO Animal Supplies Inc./1/ 135 2,928 Jill (J.) Group Inc. (The)/1/ 168 2,927 Telik Inc./1/ 235 2,909 Photon Dynamics Inc./1/ 156 2,906 Jarden Corp./1/ 107 2,905 Blockbuster Inc. 117 2,902 CUNO Inc./1/ 94 2,900 Vishay Intertechnology Inc./1/ 329 2,895 AmeriPath Inc./1/ 194 2,891 Sotheby's Holdings Inc. "A"/1/ 412 2,884 Insituform Technologies Inc. "A"/1/ 200 2,870 Atmel Corp./1/ 2,706 2,868 Power Integrations Inc./1/ 235 2,865 58 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------- Town & Country Trust (The) 136 $ 2,860 Fluor Corp. 117 2,859 Atrix Laboratories Inc./1/ 193 2,856 Lance Inc. 224 2,856 Jones Apparel Group Inc./1/ 93 2,855 New Century Financial Corp. 122 2,855 NetIQ Corp./1/ 196 2,842 Therasense Inc./1/ 203 2,834 Anteon International Corp./1/ 104 2,827 Stilwell Financial Inc. 234 2,824 Silicon Storage Technology Inc./1/ 722 2,823 Aeroflex Inc./1/ 560 2,822 Texas Regional Bancshares Inc. "A" 84 2,813 Arrow Electronics Inc./1/ 222 2,804 VitalWorks Inc./1/ 385 2,799 Heartland Express Inc./1/ 149 2,792 Black Hills Corp. 106 2,776 Topps Co. (The)/1/ 322 2,776 Gemstar-TV Guide International Inc./1/ 1,097 2,764 Hecla Mining/1/ 772 2,756 Conceptus Inc./1/ 180 2,754 Ambac Financial Group Inc. 51 2,748 Ingram Micro Inc. "A"/1/ 206 2,740 Mississippi Valley Bancshares Inc. 55 2,740 Watson Wyatt & Co. Holdings/1/ 137 2,740 Wright Medical Group Inc./1/ 144 2,740 Speedway Motorsports Inc./1/ 116 2,732 Advanced Neuromodulation Systems Inc./1/ 82 2,729 ScanSource Inc./1/ 47 2,728 CPB Inc. 59 2,724 First Niagara Financial Group Inc. 86 2,717 Integra LifeSciences Holdings Corp./1/ 171 2,717 United National Bancorp 132 2,717 Getty Realty Corp. 142 2,709 Sonic Automotive Inc./1/ 153 2,708 AFC Enterprises Inc./1/ 134 2,705 Sybron Dental Specialties Inc./1/ 193 2,700 Toro Co. 48 2,700 DSP Group Inc./1/ 168 2,698 Genlyte Group Inc. (The)/1/ 76 2,694 Standard Register Co. (The) 112 2,688 Hydril Co./1/ 108 2,687 Sterling Financial Corp. (Pennsylvania) 115 2,683 Serologicals Corp./1/ 199 2,665 PracticeWorks Inc./1/ 154 2,664 Connetics Corp./1/ 287 2,655 Southwestern Energy Co./1/ 221 2,652 Genta Inc./1/ 413 2,651 Pre-Paid Legal Services Inc./1/ 133 2,644 Magnum Hunter Resources Inc./1/ 502 2,636 Apogee Enterprises Inc. 240 2,626 Duane Reade Inc./1/ 164 2,624 Applera Corp. - Celera Genomics Group/1/ 330 2,623 American Capital Strategies Ltd. 139 2,619 Cato Corp. "A" 138 2,619 Rollins Inc. 135 2,619 Technitrol Inc. 175 2,616 Berry Petroleum Co. "A" 153 2,599 Bright Horizons Family Solutions Inc./1/ 93 2,597 Landauer Inc. 78 2,586 ProQuest Co./1/ 85 2,580 INAMED Corp./1/ 112 2,576 Tennant Co. 79 2,556 Electronics Boutique Holdings Corp./1/ 93 2,553 Saga Communications Inc./1/ 138 2,553 Tier Technologies Inc. "B"/1/ 134 2,535 Medicines Co. (The)/1/ 230 2,525 Franklin Electric Co. Inc. 59 2,522 Resources Connection Inc./1/ 175 2,522 RealNetworks Inc./1/ 698 2,520 CONMED Corp./1/ 125 2,519 Lattice Semiconductor Corp./1/ 404 2,513 AnnTaylor Stores Corp./1/ 109 2,510 O'Charley's Inc./1/ 133 2,493 Barnes & Noble Inc./1/ 117 2,476 Zale Corp./1/ 82 2,473 Global Industries Ltd./1/ 598 2,470 CONSOL Energy Inc. 195 2,469 Sepracor Inc./1/ 471 2,468 Oriental Financial Group Inc. 112 2,464 Schedules of Investments 59 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------- Atwood Oceanics Inc./1/ 84 $ 2,457 Newpark Resources Inc./1/ 620 2,455 Rayovac Corp./1/ 201 2,452 Calpine Corp./1/ 991 2,448 Tompkins Trustco Inc. 57 2,445 Mediacom Communications Corp./1/ 453 2,433 Vector Group Ltd. 193 2,432 Photronics Inc./1/ 241 2,424 Genesis Microchip Inc./1/ 315 2,416 Cubic Corp. 142 2,414 ANSYS Inc./1/ 140 2,412 Cox Communications Inc. "A"/1/ 98 2,410 Parametric Technology Corp./1/ 1,339 2,410 CSK Auto Corp./1/ 193 2,409 Silicon Image Inc./1/ 589 2,409 Manhattan Associates Inc./1/ 178 2,407 RehabCare Group Inc./1/ 104 2,406 School Specialty Inc./1/ 96 2,401 Tularik Inc./1/ 350 2,398 Oakley Inc./1/ 238 2,392 Washington Trust Bancorp Inc. 121 2,389 Ligand Pharmaceuticals Inc. "B"/1/ 351 2,387 Noven Pharmaceuticals Inc./1/ 195 2,387 NBT Bancorp Inc. 138 2,383 Lone Star Technologies Inc./1/ 201 2,382 ENDOcare Inc./1/ 166 2,375 Owens & Minor Inc. 166 2,372 Zoll Medical Corp./1/ 78 2,371 Glacier Bancorp Inc. 104 2,369 AC Moore Arts & Crafts Inc./1/ 112 2,367 Guitar Center Inc./1/ 126 2,366 Metro-Goldwyn-Mayer Inc./1/ 198 2,366 West Pharmaceutical Services Inc. 110 2,356 West Corp./1/ 168 2,352 WebEx Communications Inc./1/ 210 2,350 AMN Healthcare Services Inc./1/ 127 2,349 Cumulus Media Inc. "A"/1/ 133 2,347 City Holding Co. 91 2,342 Movie Gallery Inc./1/ 156 2,342 PanAmSat Corp./1/ 135 2,342 Intermagnetics General Corp./1/ 137 2,339 Helix Technology Corp. 242 2,335 MGE Energy Inc. 91 2,335 Crown American Realty Trust 254 2,334 Tektronix Inc./1/ 142 2,333 Select Medical Corp./1/ 163 2,331 Wet Seal Inc. "A"/1/ 233 2,330 Immunomedics Inc. 387 2,322 Pogo Producing Co. 68 2,316 Nordson Corp. 97 2,303 PolyMedica Corp./1/ 87 2,299 TeleTech Holdings Inc./1/ 367 2,294 ImClone Systems Inc./1/ 294 2,293 Navigant Consulting Co./1/ 415 2,291 New England Business Service Inc. 108 2,284 Veeco Instruments Inc./1/ 211 2,279 Intuitive Surgical Inc./1/ 285 2,277 Lin TV Corp. "A"/1/ 92 2,277 Mid Atlantic Realty Trust 142 2,276 PerkinElmer Inc. 417 2,273 Federal Agricultural Mortgage Corp./1/ 77 2,272 GameStop Corp./1/ 111 2,270 Websense Inc./1/ 195 2,264 Planar Systems Inc./1/ 142 2,263 Legato Systems Inc./1/ 818 2,256 MacDermid Inc. 113 2,254 American Management Systems Inc./1/ 177 2,253 Kopin Corp./1/ 647 2,252 ValueVision Media Inc./1/ 191 2,246 BioMarin Pharmaceutical Inc./1/ 386 2,235 ArthroCare Corp./1/ 184 2,230 Symyx Technologies Inc./1/ 213 2,230 Lindsay Manufacturing Co. 92 2,229 Newport Corp./1/ 196 2,211 Alloy Inc./1/ 266 2,210 Ventana Medical Systems Inc./1/ 118 2,210 Sterling Bancshares Inc. 169 2,209 Independent Bank Corp. (Massachusetts) 111 2,207 Cohu Inc. 195 2,203 G&K Services Inc. "A" 65 2,200 Meredith Corp. 51 2,196 60 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------- MKS Instruments Inc./1/ 201 $ 2,195 MedQuist Inc./1/ 93 2,183 Per-Se Technologies Inc./1/ 221 2,183 CoStar Group Inc./1/ 121 2,178 Royal Gold Inc. 114 2,174 Impath Inc./1/ 167 2,156 Spanish Broadcasting System Inc. "A"/1/ 329 2,155 Kirby Corp./1/ 95 2,149 Right Management Consultants Inc./1/ 87 2,144 EDO Corp. 95 2,129 Scotts Co. (The) "A"/1/ 51 2,126 Houston Exploration Co./1/ 68 2,118 Ascential Software Corp./1/ 1,136 2,111 GulfMark Offshore Inc./1/ 122 2,111 Labor Ready Inc./1/ 334 2,111 eSpeed, Inc./1/ 205 2,083 Avid Technology Inc./1/ 202 2,081 Genesco Inc./1/ 150 2,070 Merit Medical Systems Inc./1/ 107 2,066 Powerwave Technologies Inc./1/ 609 2,065 TIBCO Software Inc./1/ 550 2,063 Actel Corp./1/ 198 2,059 Cerus Corp./1/ 123 2,050 StarTek Inc./1/ 93 2,047 MSC.Software Corp./1/ 240 2,045 Herley Industries Inc./1/ 110 2,043 Information Holdings Inc./1/ 94 2,035 American Woodmark Corp. 40 2,030 Asyst Technologies Inc./1/ 336 2,029 Briggs & Stratton Corp. 54 2,027 Forrester Research Inc./1/ 135 2,021 Echelon Corp./1/ 232 2,018 HCC Insurance Holdings Inc. 84 2,017 Alfa Corp. 164 2,009 Key Productions Co. Inc./1/ 123 1,993 SERENA Software Inc./1/ 166 1,992 Remington Oil & Gas Corp./1/ 141 1,988 Great Southern Bancorp Inc. 53 1,985 Airtran Holdings Inc./1/ 637 1,981 Adaptec Inc./1/ 449 1,980 American Power Conversion Corp./1/ 207 1,979 Forward Air Corp./1/ 109 1,973 Sandy Spring Bancorp Inc. 64 1,971 MIM Corp./1/ 208 1,966 MSC Industrial Direct Co. Inc. "A"/1/ 185 1,965 Gartner Inc. "A"/1/ 242 1,960 Benchmark Electronics Inc./1/ 93 1,958 Zoran Corp./1/ 178 1,958 First Busey Corp. "A" 86 1,950 Prima Energy Corp./1/ 93 1,950 Steel Dynamics Inc./1/ 149 1,950 Advanced Medical Optics Inc./1/ 203 1,931 Ennis Business Forms Inc. 148 1,931 Connecticut Water Service Inc. 75 1,921 MAF Bancorp Inc. 62 1,916 Curtiss Wright Corp. 32 1,913 Sturm Ruger & Co. Inc. 156 1,903 Storage Technology Corp./1/ 181 1,902 IDX Systems Corp./1/ 153 1,899 La Jolla Pharmaceutical Co./1/ 445 1,896 Extended Stay America Inc./1/ 148 1,880 ICN Pharmaceuticals Inc. 207 1,875 SY Bancorp Inc. 54 1,875 Financial Institutions Inc. 69 1,873 Fleming Companies Inc. 373 1,865 Salem Communications Corp. "A"/1/ 83 1,861 Digital River Inc./1/ 242 1,856 Citizens Inc./1/ 206 1,850 CBRL Group Inc. 81 1,848 North Pittsburgh Systems Inc. 138 1,840 Dendrite International Inc./1/ 291 1,836 Trimble Navigation Ltd./1/ 185 1,832 First Community Bancorp 63 1,823 Stage Stores Inc./1/ 84 1,822 Peapack-Gladstone Financial Corp. 28 1,820 Oak Technology Inc./1/ 572 1,819 Sensient Technologies Corp. 86 1,817 Multimedia Games Inc./1/ 92 1,812 ESS Technology Inc./1/ 294 1,808 Vulcan Materials Co. 50 1,808 Ariba Inc./1/ 1,337 1,805 Schedules of Investments 61 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------- Fidelity National Information Solutions Inc./1/ 118 $ 1,804 JDA Software Group Inc./1/ 258 1,803 CorVel Corp./1/ 60 1,798 PennRock Financial Services Corp. 62 1,798 ScanSoft Inc./1/ 540 1,782 FreeMarkets Inc./1/ 359 1,781 Priceline.com Inc./1/ 1,220 1,781 Lakeland Bancorp Inc. 104 1,773 Micromuse Inc./1/ 702 1,769 Allos Therapeutics Inc./1/ 208 1,764 Retek Inc./1/ 487 1,753 United Industrial Corp. 87 1,753 First Financial Bankshares Inc. 48 1,749 Littelfuse Inc./1/ 104 1,749 PEC Solutions Inc./1/ 78 1,736 R&G Financial Corp. "B" 79 1,724 Main Street Banks Inc. 93 1,723 Mykrolis Corp./1/ 280 1,722 Gabelli Asset Management Inc. "A"/1/ 58 1,720 Virginia Financial Group Inc. 57 1,712 McGrath Rentcorp 84 1,711 Phoenix Technologies Ltd./1/ 236 1,711 XTO Energy Inc. 83 1,711 United Stationers Inc./1/ 65 1,710 Cray Inc./1/ 432 1,706 Endo Pharmaceuticals Holdings Inc./1/ 200 1,706 American Healthways Inc./1/ 104 1,682 Claire's Stores Inc. 77 1,679 Possis Medical Inc./1/ 164 1,674 Bel Fuse Inc. "B" 78 1,673 Lennar Corp. 30 1,673 Informatica Corp./1/ 539 1,671 Versicor Inc./1/ 196 1,670 MTR Gaming Group Inc./1/ 181 1,667 Integral Systems Inc./1/ 87 1,663 Arrow Financial Corp. 58 1,662 Hickory Tech Corp. 125 1,656 EPIQ Systems Inc./1/ 94 1,651 Monolithic System Technology Inc./1/ 165 1,650 General Communication Inc. "A"/1/ 438 1,647 On Assignment Inc./1/ 199 1,646 webMethods Inc./1/ 340 1,642 Eclipsys Corp./1/ 323 1,641 Cabot Corp. 78 1,638 Vital Sign Inc. 55 1,634 Strattec Security Corp./1/ 32 1,633 Hologic Inc./1/ 165 1,617 Antigenics Inc./1/ 200 1,616 Ventas Inc. 121 1,615 Ameristar Casinos Inc./1/ 85 1,612 Woodward Governor Co. 34 1,612 Midwest Banc Holdings Inc. 84 1,604 Urban Outfitters Inc./1/ 66 1,603 Wild Oats Markets Inc./1/ 176 1,598 Boyd Gaming Corp./1/ 85 1,587 FalconStor Software Inc./1/ 325 1,583 Callaway Golf Co. 151 1,570 Isle of Capri Casinos Inc./1/ 94 1,568 WSFS Financial Corp. 56 1,568 City Bank 54 1,563 Excel Technology Inc./1/ 83 1,561 Tejon Ranch Co./1/ 64 1,561 Advanced Marketing Services Inc. 113 1,558 Advanced Digital Information Corp./1/ 324 1,555 Orbital Sciences Corp./1/ 456 1,550 Tyler Technologies Inc./1/ 351 1,544 VIVUS Inc./1/ 357 1,542 Energy Conversion Devices Inc./1/ 142 1,541 Net.B@nk Inc./1/ 148 1,541 F5 Networks Inc./1/ 203 1,533 Middlesex Water Co. 68 1,530 TALX Corp. 116 1,528 Tractor Supply Co./1/ 48 1,525 Shenandoah Telecommunications Co. 30 1,522 Microsemi Corp./1/ 271 1,520 MatrixOne Inc./1/ 346 1,502 Molecular Devices Corp./1/ 120 1,501 Kelly Services Inc. "A" 69 1,495 Metro One Telecommunications Inc./1/ 175 1,488 Wind River Systems Inc./1/ 462 1,488 Marvel Enterprises Inc./1/ 210 1,470 62 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------- White Electronic Designs Corp./1/ 195 $ 1,461 Beverly Enterprises Inc./1/ 602 1,457 Tuesday Morning Corp./1/ 80 1,457 Aaon Inc./1/ 86 1,454 First State Bancorp 59 1,454 HON Industries Inc. 57 1,451 SonoSite Inc./1/ 126 1,446 Cobalt Corp./1/ 86 1,436 Learning Tree International Inc./1/ 97 1,425 Midway Games Inc./1/ 260 1,425 TRC Companies Inc./1/ 83 1,423 Acuity Brands Inc. 116 1,422 Exact Sciences Corp./1/ 106 1,417 Global Imaging Systems Inc./1/ 75 1,416 GlobeSpanVirata Inc./1/ 598 1,411 MRO Software Inc./1/ 162 1,409 Regal Entertainment Group "A"/1/ 79 1,406 Palm Inc./1/ 1,896 1,403 Spartech Corp. 66 1,397 CoorsTek Inc./1/ 93 1,395 Salix Pharmaceuticals Ltd./1/ 165 1,393 iDine Rewards Network Inc./1/ 150 1,388 eResearch Technology Inc./1/ 75 1,384 CIMA Labs Inc./1/ 55 1,383 General Cable Corp. 359 1,382 Immucor Inc./1/ 85 1,381 Western Wireless Corp. "A"/1/ 511 1,380 Renaissance Learning Inc./1/ 97 1,378 Tanger Factory Outlet Centers Inc. 49 1,371 Palm Harbor Homes Inc./1/ 118 1,370 Men's Wearhouse Inc. (The)/1/ 93 1,367 Trex Co. Inc./1/ 50 1,367 Nu Skin Enterprises Inc. "A" 112 1,366 InterCept Inc./1/ 138 1,365 Kulicke & Soffa Industries Inc./1/ 455 1,365 Entrust Inc./1/ 434 1,363 Advanced Energy Industries Inc./1/ 153 1,362 PetroQuest Energy Inc./1/ 308 1,361 Conexant Systems Inc./1/ 1,225 1,360 Eon Labs Inc./1/ 63 1,360 Array BioPharma Inc./1/ 174 1,355 Intrado Inc./1/ 140 1,352 Orthologic Corp./1/ 349 1,351 Hancock Fabrics Inc. 83 1,340 Hibbet Sporting Goods Inc./1/ 64 1,328 Concurrent Computer Corp./1/ 582 1,327 Mirant Corp./1/ 600 1,326 MGI Pharma Inc./1/ 189 1,323 Radiant Systems Inc./1/ 165 1,320 Cubist Pharmaceuticals Inc./1/ 256 1,308 Quaker Chemical Corp. 68 1,308 Interchange Financial Services Corp. 79 1,307 Skechers U.S.A. Inc. "A"/1/ 137 1,307 Diversa Corp./1/ 153 1,305 Quidel Corp./1/ 292 1,305 Exult Inc./1/ 442 1,304 Bryn Mawr Bank Corp. 33 1,303 Crown Castle International Corp./1/ 600 1,302 Independent Bank Corp. (Michigan) 39 1,291 LTX Corp./1/ 280 1,277 Racing Champions Corp./1/ 78 1,275 FMC Technologies Inc./1/ 76 1,274 Radiologix Inc./1/ 199 1,274 ILEX Oncology Inc./1/ 268 1,273 MGM Grand Inc./1/ 34 1,268 First Community Bancshares Inc. 43 1,267 Crawford & Co. "B" 200 1,262 Community Banks Inc. 47 1,261 infoUSA Inc./1/ 291 1,260 Riviana Foods Inc. 55 1,260 Transaction Systems Architects Inc. "A"/1/ 203 1,259 Central Coast Bancorp/1/ 68 1,257 Greater Bay Bancorp 69 1,255 Courier Corp. 33 1,254 ProBusiness Services Inc./1/ 198 1,253 Ultimate Electronics Inc./1/ 98 1,250 Borders Group Inc./1/ 79 1,248 aaiPharma Inc./1/ 104 1,247 Interpore International/1/ 154 1,247 AstroPower Inc./1/ 175 1,242 Integrated Defense Technologies Inc./1/ 63 1,241 Schedules of Investments 63 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------- OM Group Inc. 29 $ 1,241 Amkor Technology Inc./1/ 521 1,240 Artisan Components Inc./1/ 136 1,239 K-Swiss Inc. "A" 58 1,239 Credence Systems Corp./1/ 142 1,230 FuelCell Energy Inc./1/ 195 1,228 Universal Corp. 35 1,227 Pixelworks Inc./1/ 238 1,226 Nash Finch Co. 90 1,224 Kaydon Corp. 61 1,222 Northwest Bancorp Inc. 96 1,222 Alexander's Inc./1/ 20 1,220 Texas Biotech Corp./1/ 398 1,218 Primedia Inc./1/ 873 1,213 Tetra Technologies Inc./1/ 60 1,209 Mandalay Resort Group/1/ 36 1,208 CCC Information Services Group Inc./1/ 92 1,202 Hanmi Financial Corp./1/ 80 1,200 Southwest Water Co. 84 1,198 Republic Bancorp Inc. 92 1,196 Harvest Natural Resources Inc./1/ 220 1,195 Playboy Enterprises Inc. "B"/1/ 125 1,195 Universal Electronics Inc./1/ 133 1,190 Daktronics Inc./1/ 124 1,189 MEMC Electronics Materials Inc./1/ 358 1,189 Crompton Corp. 118 1,186 OmniVision Technologies Inc./1/ 180 1,186 Advisory Board Co. (The)/1/ 40 1,185 Del Monte Foods Co./1/ 145 1,185 VCA Antech Inc./1/ 96 1,185 J&J Snack Foods Corp./1/ 32 1,179 Bei Technologies Inc. 107 1,177 Elizabeth Arden Inc./1/ 98 1,175 Humboldt Bancorp 98 1,174 Intertan Inc./1/ 168 1,173 AtheroGenics Inc./1/ 187 1,171 Boston Beer Co. Inc. "A"/1/ 84 1,168 GSI Commerce Inc./1/ 230 1,162 Western Gas Resources Inc. 37 1,156 National Processing Inc./1/ 68 1,155 Verity Inc./1/ 116 1,154 E.piphany Inc./1/ 318 1,145 Friedman Billings Ramsey Group Inc. "A"/1/ 113 1,145 Chattem Inc./1/ 28 1,143 Systems & Computer Technology Corp./1/ 163 1,141 WFS Financial Inc./1/ 55 1,141 Drexler Technology Corp./1/ 78 1,134 Quicksilver Resources Inc./1/ 63 1,134 Alberto-Culver Co. "B" 23 1,128 Arrow International Inc. 35 1,126 Buca Inc./1/ 140 1,120 Cholestech Corp./1/ 108 1,120 Geron Corp./1/ 287 1,119 Gorman-Rupp Co. (The) 48 1,118 Capitol Bancorp Ltd. 64 1,115 OraSure Technologies Inc./1/ 251 1,114 Penwest Pharmaceuticals Co./1/ 133 1,108 First Horizon Pharmaceutical Corp./1/ 204 1,102 Boyds Collection Ltd. (The)/1/ 171 1,101 Children's Place Retail Stores Inc. (The)/1/ 109 1,101 Interwoven Inc./1/ 547 1,098 Magma Design Automation Inc./1/ 123 1,097 Valmont Industries Inc. 47 1,097 Whitehall Jewellers Inc./1/ 104 1,094 Sharper Image Corp./1/ 57 1,090 Quixote Corp. 59 1,089 Frontier Airlines Inc./1/ 223 1,088 Kosan Biosciences Inc./1/ 166 1,086 Carreker Corp./1/ 176 1,079 Meridian Medical Technologies Inc./1/ 30 1,079 Healthsouth Corp./1/ 257 1,067 Aksys Ltd./1/ 190 1,066 7-Eleven Inc./1/ 124 1,063 RPC Inc. 107 1,059 Agile Software Corp./1/ 165 1,058 D&K Healthcare Resources Inc. 118 1,056 II-VI Inc./1/ 79 1,055 Harmonic Inc./1/ 602 1,054 CoBiz Inc. 65 1,046 64 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------- PayPal Inc./1/ 50 $ 1,046 TriZetto Group Inc. (The)/1/ 210 1,046 Coastal Financial Corp. 77 1,043 Brooks-PRI Automation Inc./1/ 91 1,042 Florida Rock Industries Inc. 34 1,039 OSI Systems Inc./1/ 60 1,038 Deltic Timber Corp. 47 1,033 Mesa Air Group Inc./1/ 283 1,033 Cadiz Inc./1/ 342 1,026 Cascade Natural Gas Corp. 52 1,024 Peet's Coffee & Tea Inc./1/ 80 1,024 First National Corp. 37 1,021 Gart Sports Co./1/ 54 1,019 Cepheid Inc./1/ 264 1,016 USB Holding Co. Inc. 55 1,014 EGL Inc./1/ 92 1,013 LaBranche & Co. Inc./1/ 50 1,013 OceanFirst Financial Corp. 49 1,009 MFA Mortgage Investments Inc. 124 1,004 Columbia Bancorp 53 1,000 Curative Health Services Inc./1/ 92 998 American Tower Corp./1/ 626 995 Siliconix Inc./1/ 56 995 Trust Co. of New Jersey (The) 39 993 Young Innovations Inc./1/ 37 992 PrivateBancorp Inc. 32 978 Option Care Inc./1/ 110 974 American Home Mortgage Holdings Inc. 88 971 NN Inc. 105 971 Aeropostale Inc./1/ 63 970 Supertex Inc./1/ 93 967 NetScreen Technologies Inc./1/ 89 966 Kensey Nash Corp./1/ 64 963 Dril-Quip Inc./1/ 57 960 SOURCECORP Inc./1/ 47 959 Global Power Equipment Group Inc./1/ 203 954 Impax Laboratories Inc./1/ 196 953 CuraGen Corp./1/ 225 949 American Pharmaceutical Partners Inc./1/ 58 947 Sports Resorts International Inc./1/ 227 947 AEP Industries Inc./1/ 35 946 ChipPAC Inc./1/ 442 945 SRA International Inc. "A"/1/ 33 945 Cascade Bancorp 69 941 Luminex Corp./1/ 133 936 Women First HealthCare Inc./1/ 200 936 Bentley Pharmaceuticals Inc./1/ 110 935 SeaChange International Inc./1/ 136 934 Pall Corp. 59 932 Lexar Media Inc./1/ 351 930 First South Bancorp Inc. 26 927 ParkerVision Inc./1/ 82 927 Spartan Motors Inc. 82 927 Glatfelter Co. 80 924 Digimarc Corp./1/ 79 922 Meritage Corp./1/ 26 922 NYFIX Inc./1/ 236 918 Cardiac Science Inc./1/ 463 917 j2 Global Communications Inc./1/ 46 915 LSI Industries Inc. 90 913 Sports Authority Inc. (The)/1/ 153 913 Vignette Corp./1/ 1,140 913 Universal Display Corp./1/ 151 908 Centene Corp./1/ 34 907 Wackenhut Corrections Corp./1/ 80 907 Alabama National Bancorp 20 906 Horizon Organic Holding Corp./1/ 58 905 Triad Guaranty Inc./1/ 26 905 PLATO Learning Inc./1/ 135 898 CTS Corp. 195 897 U.S. Physical Therapy Inc./1/ 85 897 Virage Logic Corp./1/ 95 896 Rudolph Technologies Inc./1/ 87 895 Secure Computing Corp./1/ 279 893 Durect Corp./1/ 287 890 Ariad Pharmaceuticals Inc./1/ 281 888 CardioDynamics International Corp./1/ 310 887 Sycamore Networks Inc./1/ 377 886 AsiaInfo Holdings Inc./1/ 264 880 Oneida Ltd. 63 878 Schedules of Investments 65 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------- United Rentals Inc./1/ 104 $ 878 Princeton Review Inc. (The)/1/ 145 870 Digene Corp./1/ 110 869 OSI Pharmaceuticals Inc./1/ 51 865 Manugistics Group Inc./1/ 309 862 Galyan's Trading Co./1/ 86 861 ArvinMeritor Inc. 46 860 Ribapharm Inc./1/ 191 860 SpectraLink Corp./1/ 151 859 General Binding Corp./1/ 54 856 APAC Customer Services Inc./1/ 293 853 Arctic Cat Inc. 61 852 I-many Inc./1/ 423 846 Susquehanna Bancshares Inc. 39 844 Liberate Technologies/1/ 540 842 Ixia/1/ 205 841 Tanox Inc./1/ 80 840 Inet Technologies Inc./1/ 165 837 Triangle Pharmaceuticals Inc./1/ 310 837 Prosperity Bancshares Inc. 49 834 HealthExtras Inc./1/ 196 829 Lakeland Financial Corp. 35 829 Columbia Laboratories Inc./1/ 184 828 Stanley Furniture Co. Inc./1/ 39 828 Genencor International Inc./1/ 87 827 MemberWorks Inc./1/ 47 819 Clark/Bardes Inc./1/ 46 818 Nationwide Health Properties Inc. 48 818 Wabtec Corp. 58 817 @Road Inc./1/ 151 815 La-Z-Boy Inc. 35 812 Williams Companies Inc. 359 811 LabOne Inc./1/ 50 808 TiVo Inc./1/ 224 806 Power-One Inc./1/ 270 805 MCG Capital Corp. 61 804 Aftermarket Technology Corp./1/ 62 802 Keynote Systems Inc./1/ 122 799 Markel Corp./1/ 4 797 ONYX Software Corp./1/ 417 796 Merix Corp./1/ 97 791 Semitool Inc./1/ 153 788 WCI Communities Inc./1/ 62 787 1-800-FLOWERS.COM Inc./1/ 112 784 New Focus Inc./1/ 290 783 Packeteer Inc./1/ 261 783 Research Frontiers Inc./1/ 87 780 Tropical Sportswear International Corp./1/ 60 779 Granite State Bankshares Inc. 23 777 Akamai Technologies Inc./1/ 934 775 Kenneth Cole Productions "A"/1/ 38 771 Peoples Bancorp Inc. 30 771 Lifeline Systems Inc./1/ 35 770 Viewpoint Corp./1/ 352 767 Schawk Inc. 78 766 Tasty Baking Company 60 765 Jones Lang LaSalle Inc./1/ 37 761 Mothers Work Inc./1/ 20 761 Acacia Research Corp./1/ 191 758 Harbor Florida Bancshares Inc. 37 757 Acclaim Entertainment Inc./1/ 684 752 Sanderson Farms Inc. 47 752 Ambassadors Group Inc./1/ 51 751 Presstek Inc./1/ 294 750 i2 Technologies Inc./1/ 1,441 749 Credit Acceptance Corp./1/ 91 746 World Wrestling Entertainment Inc./1/ 89 745 Party City Corp./1/ 54 743 SeeBeyond Technology Corp./1/ 530 742 Viasat Inc./1/ 117 737 DocuCorp International Inc./1/ 68 736 Bob Evans Farms Inc. 31 735 Restoration Hardware Inc./1/ 163 734 Computer Network Technology Corp./1/ 146 733 Concord Communications Inc./1/ 145 732 IXYS Corp./1/ 145 729 Beasley Broadcast Group Inc. "A"/1/ 58 728 New Jersey Resources Corp. 22 724 Vintage Petroleum Inc. 67 724 Esperion Therapeutics Inc./1/ 126 721 66 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------- Overland Storage Inc./1/ 66 $ 717 C-COR.net Corp./1/ 193 716 Regent Communications Inc./1/ 141 716 Sterling Bancorp 27 716 Dynamics Research Corp./1/ 49 714 Haverty Furniture Companies Inc. 57 713 CNET Networks Inc./1/ 647 712 Embrex Inc./1/ 64 710 Stein Mart Inc./1/ 121 707 Keithley Instruments Inc. 58 705 Steak n Shake Company (The)/1/ 64 704 Xicor Inc./1/ 195 704 Aspen Technology Inc./1/ 234 702 Investors Real Estate Trust 66 699 Virbac Corp./1/ 137 696 Gables Residential Trust 26 694 Administaff Inc./1/ 180 693 JetBlue Airways Corp./1/ 17 686 Westcorp Inc. 34 680 Vitesse Semiconductor Corp./1/ 996 677 Hollywood Casino Corp. "A"/1/ 56 676 Pacific Union Bank/1/ 60 673 Genesee & Wyoming Inc. "A"/1/ 30 667 Bradley Pharmaceuticals Inc./1/ 76 666 National Healthcare Corp./1/ 37 664 Penford Corp. 49 662 CPI Corp. 48 660 Syntel Inc./1/ 56 659 TriCo Bancshares 26 658 EMS Technologies Inc./1/ 64 657 Charlotte Russe Holding Inc./1/ 69 655 Provident Bancorp Inc. 23 654 LookSmart Ltd./1/ 672 652 Harvard Bioscience Inc./1/ 214 648 Roxio Inc./1/ 212 642 Chicago Pizza & Brewery Inc./1/ 93 641 First Consulting Group Inc./1/ 118 640 Euronet Worldwide Inc./1/ 127 639 Vastera Inc./1/ 297 639 Medis Technologies Ltd./1/ 148 633 Maxtor Corp./1/ 242 632 Avaya Inc./1/ 440 629 Altiris Inc./1/ 63 627 Bioreliance Corp./1/ 30 625 Martha Stewart Living Omnimedia Inc. "A"/1/ 89 623 Franklin Financial Corp. 25 616 Synplicity Inc./1/ 143 616 Del Laboratories Inc./1/ 34 615 Escalade Inc./1/ 31 615 Marine Products Corp. 58 615 EnergySouth Inc. 24 612 US Unwired Inc. "A"/1/ 872 610 Biopure Corp./1/ 174 609 Silicon Valley Bancshares/1/ 36 609 Emmis Communications Corp./1/ 32 608 ExpressJet Holdings Inc./1/ 66 607 Kyphon Inc./1/ 46 607 Cantel Medical Corp./1/ 60 606 Lydall Inc./1/ 51 602 Park Electrochemical Corp. 36 601 Vicor Corp./1/ 84 601 WESCO International Inc./1/ 139 598 FAO Inc./1/ 209 596 First Financial Holdings Inc. 22 596 Champps Entertainment Inc./1/ 76 595 Merchants Bancshares Inc. 24 593 Closure Medical Corp./1/ 53 591 Dress Barn Inc./1/ 38 591 Transmeta Corp./1/ 606 588 Mission West Properties Inc. 53 587 Nara Bancorp Inc. 34 587 Datastream Systems Inc./1/ 117 585 Endocardial Solutions Inc./1/ 181 585 Bruker Daltonics Inc./1/ 114 583 Indevus Pharmaceuticals Inc./1/ 376 583 Inter Parfums Inc. 87 581 Monterey Pasta Co./1/ 125 581 HealthTronics Surgical Services Inc./1/ 69 578 Zomax Inc./1/ 148 577 Deb Shops Inc. 23 573 Gaiam Inc./1/ 50 573 Schedules of Investments 67 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------- MedSource Technologies Inc./1/ 76 $ 572 Nastech Pharmaceutical Co. Inc./1/ 69 571 Dynacq International Inc./1/ 49 570 Allscripts Healthcare Solutions Inc./1/ 199 569 Urologix Inc./1/ 124 565 OPNET Technologies Inc./1/ 89 563 Inverness Medical Innovations Inc./1/ 59 560 Openwave Systems Inc./1/ 902 559 Quadramed Corp./1/ 309 559 WatchGuard Technologies Inc./1/ 126 554 BE Aerospace Inc./1/ 116 552 Lifecore Biomedical Inc./1/ 89 552 REMEC Inc./1/ 162 552 Bank of the Ozarks Inc. 24 550 American National Bankshares Inc. 20 549 ICT Group Inc./1/ 27 547 MapInfo Corp./1/ 138 545 Arris Group Inc./1/ 147 544 SonicWALL Inc./1/ 197 542 SS&C Technologies Inc./1/ 68 541 AVANIR Pharmaceuticals "A"/1/ 468 538 Omnicell Inc./1/ 92 537 Advanced Tissue Sciences Inc./1/ 696 536 Somera Communications Inc./1/ 261 535 1-800 CONTACTS INC./1/ 53 530 RMH Teleservices Inc./1/ 65 530 Lawson Software Inc./1/ 149 527 QRS Corp./1/ 79 524 Riverstone Networks Inc./1/ 1,021 521 Aether Systems Inc./1/ 194 520 Exploration Company of Delaware (The)/1/ 100 519 PAREXEL International Corp./1/ 61 519 Catapult Communications Corp./1/ 53 517 Plug Power Inc./1/ 108 517 Medical Staffing Network Holdings Inc./1/ 34 516 Caliper Technologies Corp./1/ 123 515 Russ Berrie & Co. Inc. 17 510 Sypris Solutions Inc./1/ 47 510 Tripos Inc./1/ 65 510 DuPont Photomasks Inc./1/ 22 501 Collins & Aikman Corp./1/ 138 495 Watts Industries Inc. "A" 30 492 Chemical Financial Corp. 17 491 Saul Centers Inc. 21 488 Benihana Inc./1/ 39 484 MAPICS Inc./1/ 85 476 American States Water Co. 18 472 Witness Systems Inc./1/ 81 471 Finisar Corp./1/ 677 467 Trikon Technologies Inc./1/ 82 466 Central Parking Corp. 23 463 Matria Healthcare Inc./1/ 54 463 MRV Communications Inc./1/ 545 463 Zygo Corp./1/ 109 462 Hall Kinion & Associates Inc./1/ 76 456 Peregrine Pharmaceuticals Inc./1/ 1,082 454 Second Bancorp Inc. 17 454 St. Mary Land & Exploration Co. 19 454 MIPS Technologies Inc. "A"/1/ 339 451 GrafTech International Ltd./1/ 62 450 Computer Programs & Systems Inc./1/ 21 449 Checkers Drive-in Restaurants Inc./1/ 56 448 EarthShell Corp./1/ 640 448 Hanger Orthopedic Group Inc./1/ 28 445 NIC Inc./1/ 260 445 Arden Group Inc. "A"/1/ 8 444 StorageNetworks Inc./1/ 354 443 Bio-Reference Laboratories Inc./1/ 68 442 Universal Health Realty Income Trust 17 441 Allegiance Telecom Inc./1/ 530 440 Hanover Compressor Co./1/ 53 440 Gladstone Capital Corp. 26 439 Bebe Stores Inc./1/ 37 437 NASB Financial Inc. 21 437 Young Broadcasting Inc. "A"/1/ 50 434 Private Media Group Inc./1/ 183 432 Zymogenetics Inc./1/ 54 432 BWAY Corporation/1/ 31 431 Hexcel Corp./1/ 172 427 Mid-State Bancshares 26 426 68 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------ C&D Technologies Inc. 29 $ 425 Dover Downs Gaming & Entertainment Inc. 52 423 Shop At Home Inc./1/ 180 421 P.A.M. Transportation Services Inc./1/ 22 420 Rigel Pharmaceuticals Inc./1/ 260 416 Commonwealth Bancorp Inc. 9 414 Kos Pharmaceuticals Inc./1/ 37 414 Wireless Facilities Inc./1/ 93 412 Provident Bankshares Corp. 19 410 Pain Therapeutics Inc./1/ 103 409 World Fuel Services Corp. 21 405 Horizon Offshore Inc./1/ 96 404 Triton PCS Holdings Inc. "A"/1/ 193 403 Grace (W.R.) & Co./1/ 250 400 Bone Care International Inc./1/ 69 399 Epix Medical Inc./1/ 88 399 Covansys Corporation/1/ 234 398 eUniverse Inc./1/ 136 398 LendingTree Inc./1/ 27 398 Sangamo BioSciences Inc./1/ 202 398 CryoLife Inc./1/ 152 397 Progenics Pharmaceuticals Inc./1/ 79 397 Granite Construction Inc. 24 396 Redback Networks Inc./1/ 1,277 396 Thomas & Betts Corp./1/ 28 395 Actuate Corp./1/ 415 394 RITA Medical Systems Inc./1/ 89 391 CBL & Associates Properties Inc. 10 387 Green Mountain Coffee Inc./1/ 30 387 ANADIGICS Inc./1/ 181 386 Synaptics Inc./1/ 80 385 Royal Bancshares of Pennsylvania "A" 21 384 Seacoast Banking Corp. of Florida 20 384 Old Second Bancorp Inc. 10 382 Aphton Corp./1/ 169 379 Inrange Technologies Corp./1/ 136 379 Powell Industries Inc./1/ 20 376 First Financial Bancorp 21 374 Monarch Casino & Resort Inc./1/ 28 373 dELiA*s Corp. "A"/1/ 352 370 RadiSys Corp./1/ 93 368 Barnes Group Inc. 18 362 Michael Baker Corp./1/ 35 361 Paxson Communications Corp./1/ 164 361 Ciphergen Biosystems Inc./1/ 120 360 Novadigm Inc./1/ 180 360 PDF Solutions Inc./1/ 68 360 Sonus Networks Inc./1/ 1,713 360 SPSS Inc./1/ 31 359 Sapient Corp./1/ 348 358 Seattle Genetics Inc./1/ 111 357 National Beverage Corp./1/ 26 355 Value Line Inc. 9 351 Heidrick & Struggles International Inc./1/ 23 349 NATCO Group Inc. "A"/1/ 46 346 SureBeam Corporation "A"/1/ 192 346 United Online Inc./1/ 36 345 Enterasys Networks Inc./1/ 265 344 VIB Corp./1/ 23 344 Ulticom Inc./1/ 62 343 Seacoast Financial Services Corp. 17 341 Weis Markets Inc. 10 335 Sanchez Computer Associates Inc./1/ 137 334 Griffon Corp./1/ 31 330 Coca-Cola Bottling Co. Consolidated 7 328 Handspring Inc./1/ 348 327 Chordiant Software Inc./1/ 348 324 SpeechWorks International Inc./1/ 141 324 Netegrity Inc./1/ 156 321 NetFlix Inc./1/ 33 320 Woodhead Industries Inc. 29 320 Bally Total Fitness Holding Corp./1/ 32 317 Vitria Technology Inc./1/ 407 317 Centillium Communications Inc./1/ 262 314 Shoe Carnival Inc./1/ 22 314 Lannett Co. Inc./1/ 31 312 Foamex International Inc./1/ 56 308 Res-Care Inc./1/ 62 308 Bank of Granite Corp. 17 306 Cache Inc./1/ 23 306 Schedules of Investments 69 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------- Alaris Medical Inc./1/ 64 $ 305 Electroglas Inc./1/ 151 302 American Superconductor Corp./1/ 111 300 TTM Technologies Inc./1/ 191 300 RSA Security Inc./1/ 89 299 EMCOR Group Inc./1/ 6 298 Keystone Automotive Industries Inc./1/ 18 297 Raindance Communications Inc./1/ 96 297 Pegasystems Inc./1/ 54 295 Med-Design Corp. (The)/1/ 83 293 Syntroleum Corp./1/ 176 292 Centex Construction Products Inc. 8 286 Leeds Federal Bankshares Inc. 9 285 F&M Bancorp 9 284 Sonic Innovations Inc./1/ 54 284 August Technology Corp./1/ 63 283 Encore Wire Corp./1/ 32 282 LeCroy Corp./1/ 31 278 Neurogen Corp./1/ 34 273 DiamondCluster International Inc. "A"/1/ 83 271 Portal Software Inc./1/ 1,128 271 Gulf Island Fabrication Inc./1/ 23 270 NaPro BioTherapeutics Inc./1/ 241 270 Centennial Bancorp 31 269 First Oak Brook Bancshares "A" 9 268 Century Bancorp Inc. "A" 10 265 Valhi Inc. 27 265 Avanex Corp./1/ 193 264 Applied Films Corporation/1/ 24 263 Camden National Corp. 10 260 Insight Communications Co. Inc./1/ 28 258 Nuance Communications Inc./1/ 152 258 SimpleTech Inc./1/ 120 256 CKE Restaurant Inc./1/ 63 252 Analogic Corp. 6 251 Bridgeford Food Corp. 25 251 NBC Capital Corp. 10 251 ON Semiconductor Corp./1/ 201 251 MCSi Inc./1/ 50 248 CompuCredit Corp./1/ 46 244 Saxon Capital Inc./1/ 22 244 Verint Systems Inc./1/ 28 242 Active Power Inc./1/ 179 240 Nassda Corp./1/ 46 240 WMS Industries Inc./1/ 17 240 First Republic Bank/1/ 11 239 Capstone Turbine Corp./1/ 404 238 Zenith National Insurance Corp. 9 238 Factory 2-U Stores Inc./1/ 122 237 4Kids Entertainment Inc./1/ 10 237 CCBT Financial Companies Inc. 9 236 Apex Mortgage Capital Inc. 21 235 First of Long Island Corp. 7 233 Mobile Mini Inc./1/ 18 233 First Sentinel Bancorp Inc. 17 230 IMCO Recycling Inc./1/ 38 230 LodgeNet Entertainment Corp./1/ 30 230 Knight Trading Group Inc./1/ 59 221 Cirrus Logic Inc./1/ 86 219 ClearOne Communications Inc./1/ 64 218 Unitil Corp. 8 217 Sizeler Property Investors Inc. 21 211 Specialty Laboratories Inc./1/ 23 211 Pathmark Stores Inc./1/ 23 210 SBS Technologies Inc./1/ 29 208 Tetra Tech Inc./1/ 26 208 Sykes Enterprises Inc./1/ 49 206 Flowers Foods Inc./1/ 9 205 ATA Holdings Corp./1/ 60 204 NetScout Systems Inc./1/ 55 201 Thomas Industries Inc. 8 198 AXT Inc./1/ 94 196 International Multifoods Corp./1/ 10 196 Inktomi Corp./1/ 771 193 DHB Industries Inc./1/ 90 191 Netro Corp./1/ 92 189 EMCORE Corp./1/ 123 187 PLX Technology Inc./1/ 170 187 X-Rite Inc. 24 186 Inforte Corp./1/ 36 184 Paradyne Networks Inc./1/ 138 184 70 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------- Tredegar Corp. 11 $ 184 Wausau-Mosinee Paper Corp. 20 184 Lightbridge Inc./1/ 27 182 Q-Med Inc./1/ 26 182 Allegiant Bancorp Inc. 11 179 Northwest Pipe Co./1/ 10 179 RCN Corp./1/ 341 174 Time Warner Telecom Inc. "A"/1/ 213 173 Bruker AXS Inc./1/ 82 172 WestPoint Stevens Inc./1/ 173 170 Centennial Communications Corp. "A"/1/ 58 168 Charter Financial Corp. 6 168 Jo-Ann Stores Inc./1/ 6 168 MB Financial Inc. 5 168 Spectrian Corp./1/ 57 168 Summit Bancshares Inc. 8 168 Answerthink Inc./1/ 113 164 Flow International Corp./1/ 50 161 Therma-Wave Inc./1/ 204 161 Tweeter Home Entertainment Group Inc./1/ 23 159 Advanced Power Technology Inc./1/ 40 156 Pericom Semiconductor Corp./1/ 18 155 California Water Service Group 6 153 Actrade Financial Technologies Ltd./1/,/2/ 60 151 Tellium Inc./1/ 395 150 Exelixis Inc./1/ 30 148 Kendle International Inc./1/ 22 147 Ultratech Stepper Inc./1/ 18 146 Coldwater Creek Inc./1/ 11 145 Manufacturers Services Ltd./1/ 53 143 State Bancorp Inc. 8 142 Digitas Inc./1/ 64 141 PDI Inc./1/ 34 138 World Acceptance Corp./1/ 17 135 Acme Communications Inc./1/ 17 133 Flushing Financial Corp. 8 133 Cherokee Inc./1/ 8 129 Illumina Inc./1/ 37 127 BKF Capital Group Inc./1/ 6 126 Partners Trust Financial Group Inc. 9 126 Stratos Lightwave Inc./1/ 346 125 Flagstar Bancorp Inc. 6 124 Checkpoint Systems Inc./1/ 10 123 FNB Corp. 4 123 Standard Microsystems Corp./1/ 8 122 Theragenics Corp./1/ 27 119 Infogrames Inc./1/ 53 118 First Federal Capital Corp. 6 117 LSB Bancshares Inc. 7 115 Embarcadero Technologies Inc./1/ 27 113 Caminus Corp./1/ 62 110 UnitedGlobalCom Inc. "A"/1/ 67 110 Nature's Sunshine Products Inc. 10 108 AirGate PCS Inc./1/ 236 104 BriteSmile Inc./1/ 134 100 Jakks Pacific Inc./1/ 9 100 First Essex Bancorp Inc. 3 99 Alliance Imaging Inc./1/ 8 96 Virco Manufacturing Corp. 10 96 Align Technology Inc./1/ 32 88 Cole National Corp./1/ 7 88 Gold Bancorp Inc. 9 87 MetaSolv Inc./1/ 57 87 Steven Madden Ltd./1/ 6 86 Irwin Financial Corp. 5 85 Charles River Associates Inc./1/ 5 83 Local Financial Corp./1/ 6 83 PC Connection Inc./1/ 20 81 Optical Communication Products Inc./1/ 95 73 Overstock.com Inc./1/ 11 65 Standex International Corp. 3 61 Alamosa Holdings Inc./1/ 263 60 BSB Bancorp Inc. 3 60 PriceSmart Inc./1/ 3 60 Lawson Products Inc. 2 58 Cross Media Marketing Corp./1/ 76 57 Gray Television Inc. "A" 4 54 Warwick Community Bancorp 2 54 3D Systems Corp./1/ 8 53 Schedules of Investments 71 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------- Acterna Corp./1/ 127 $ 51 Three Rivers Bancorp Inc. 3 48 William Lyon Homes Inc./1/ 2 46 Dobson Communications Corp. "A"/1/ 145 45 Sun Bancorp Inc. 2 45 Mossimo Inc./1/ 7 41 Buckle Inc. (The)/1/ 2 40 Suntron Corp./1/ 10 33 Penton Media Inc./1/ 113 27 CTB International Corp./1/ 2 26 DDi Corp./1/ 164 26 Donnelly Corp. 1 26 Monro Muffler Brake Inc./1/ 1 18 Drew Industries Inc./1/ 1 16 Liquidmetal Technologies/1/ 2 16 HPL Technologies Inc./1/ 67 3 - --------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $54,405,472) 39,500,919 - --------------------------------------------------------------- SHORT TERM INSTRUMENTS - 2.44% - --------------------------------------------------------------- Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 823,649 823,649 Dreyfus Money Market Fund 44,384 44,384 Goldman Sachs Financial Square Prime Obligation Fund 32,303 32,303 Providian Temp Cash Money Market Fund 66,575 66,575 - --------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $966,911) 966,911 - --------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES - 102.33% (Cost $55,372,383) 40,467,830 - --------------------------------------------------------------- OTHER ASSETS, LESS LIABILITIES - (2.33%) (923,246) - --------------------------------------------------------------- NET ASSETS - 100.00% $39,544,584 =============================================================== /1/ Non-income earning securities. /2/ Security valued at fair value in accordance with procedures approved by the Board of Trustees (Note 1). See notes to financial statements. 72 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- COMMON STOCKS - 99.78% - ----------------------------------------------------------------- Exxon Mobil Corp. 108,115 $ 3,448,868 Citigroup Inc. 66,775 1,979,879 Bank of America Corp. 24,529 1,564,950 Wells Fargo & Company 24,837 1,196,150 Verizon Communications Inc. 43,420 1,191,445 ChevronTexaco Corp. 17,017 1,178,427 American International Group Inc. 20,600 1,126,820 SBC Communications Inc. 53,218 1,069,682 International Business Machines Corp. 14,660 855,997 Procter & Gamble Co. 8,433 753,742 AT&T Corp. 60,796 730,160 Wachovia Corp. 21,805 712,805 Bank One Corp. 18,729 700,465 Merck & Co. Inc. 15,213 695,386 Viacom Inc. "B"/1/ 14,898 604,114 JP Morgan Chase & Co. 31,714 602,249 Morgan Stanley 17,563 595,034 Du Pont (E.I.) de Nemours & Co. 15,848 571,637 U.S. Bancorp 30,458 565,910 BellSouth Corp. 29,851 548,064 Philip Morris Companies Inc. 13,229 513,285 Hewlett-Packard Co. 43,096 502,930 ConocoPhillips 10,777 498,328 Walt Disney Co. (The) 32,511 492,217 Washington Mutual Inc. 15,546 489,233 Bristol-Myers Squibb Co. 19,402 461,768 Merrill Lynch & Co. Inc. 13,695 451,250 AOL Time Warner Inc./1/ 36,035 421,609 Allstate Corp. (The) 11,314 402,213 Dow Chemical Co. (The) 14,485 395,585 McDonald's Corp. 20,264 357,862 General Motors Corp. "A" 8,944 347,922 FleetBoston Financial Corp. 16,667 338,840 Southern Co. 11,210 322,624 Gannett Co. Inc. 4,252 306,909 Lockheed Martin Corp. 4,666 301,750 Schering-Plough Corp. 13,999 298,459 Liberty Media Corp. "A"/1/ 41,383 297,130 Comcast Corp. "A"/1/ 14,149 295,148 Emerson Electric Co. 6,699 294,354 Ford Motor Company 28,911 283,328 National City Corp. 9,694 276,570 United Technologies Corp. 4,759 268,836 BB&T Corp. 7,644 267,846 Prudential Financial Inc./1/ 9,347 266,950 Duke Energy Corp. 13,248 258,998 Honeywell International Inc. 11,895 257,646 International Paper Co. 7,703 257,203 Goldman Sachs Group Inc. (The) 3,848 254,083 SunTrust Banks Inc. 3,972 244,199 Exelon Corp. 5,137 244,007 FedEx Corp. 4,760 238,333 Anheuser-Busch Companies Inc. 4,663 235,948 Kimberly-Clark Corp. 4,106 232,564 Union Pacific Corp. 4,018 232,522 Coca-Cola Co. (The) 4,830 231,647 Dominion Resources Inc. 4,412 223,821 Alcoa Inc. 11,503 222,008 American Express Co. 7,065 220,287 Bank of New York Co. Inc. (The) 7,569 217,533 ConAgra Foods Inc. 8,538 212,169 Travelers Property Casualty Corp. "B"/1/ 15,113 204,479 Caterpillar Inc. 5,486 204,189 Gillette Co. (The) 6,896 204,122 Alltel Corp. 4,961 199,085 Northrop Grumman Corp. 1,552 192,510 Lehman Brothers Holdings Inc. 3,894 191,001 PNC Financial Services Group 4,518 190,524 3M Co. 1,721 189,258 Cendant Corp./1/ 17,335 186,525 Raytheon Co. 6,334 185,586 General Dynamics Corp. 2,205 179,333 TXU Corp. 4,249 177,226 Sears, Roebuck and Co. 4,510 175,890 Avon Products Inc. 3,773 173,935 Waste Management Inc. 7,417 172,964 Deere & Co. 3,795 172,483 Equity Office Properties Trust 6,636 171,342 Household International Inc. 6,039 170,964 Schedules of Investments 73 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- KeyCorp 6,782 $ 169,347 Occidental Petroleum Corp. 5,965 169,287 Hartford Financial Services Group Inc. 3,948 161,868 CVS Corp. 6,235 158,057 Boeing Co. (The) 4,623 157,783 Weyerhaeuser Co. 3,486 152,582 Air Products & Chemicals Inc. 3,626 152,328 FPL Group Inc. 2,809 151,124 Entergy Corp. 3,559 148,054 American Electric Power Co. Inc. 5,129 146,228 CIGNA Corp. 2,064 146,028 Burlington Northern Santa Fe Corp. 6,094 145,768 Albertson's Inc. 6,024 145,540 Progress Energy Inc. 3,491 142,677 Clear Channel Communications Inc./1/ 4,085 141,954 Chubb Corp. 2,583 141,626 Comerica Inc. 2,853 137,572 Consolidated Edison Inc. 3,394 136,507 SouthTrust Corp. 5,522 133,908 Praxair Inc. 2,608 133,295 FirstEnergy Corp. 4,404 131,636 AFLAC Inc. 4,254 130,555 Apache Corp. 2,194 130,433 Hancock (John) Financial Services Inc. 4,683 130,187 Sprint Corp. (FON Group) 14,220 129,686 Tribune Co. 3,100 129,611 Principal Financial Group Inc./1/ 4,892 128,073 Eastman Kodak Co. 4,638 126,339 Motorola Inc. 12,404 126,273 Norfolk Southern Corp. 6,187 124,916 Golden West Financial Corp. 2,003 124,547 Newell Rubbermaid Inc. 4,021 124,128 Unocal Corp. 3,921 123,080 PPG Industries Inc. 2,704 120,869 Kraft Foods Inc. 3,307 120,573 AmSouth Bancorp 5,761 119,483 Regions Financial Corp. 3,635 118,755 Costco Wholesale Corp./1/ 3,566 115,431 Sara Lee Corp. 6,251 114,331 Archer-Daniels-Midland Co. 9,120 114,091 Fortune Brands Inc. 2,398 113,401 Marathon Oil Corp. 4,927 111,744 Devon Energy Corp. 2,305 111,216 Charter One Financial Inc. 3,668 109,014 Johnson Controls Inc. 1,415 108,700 Illinois Tool Works Inc. 1,853 108,085 MetLife Inc. 4,723 107,495 DTE Energy Co. 2,574 104,762 Equity Residential 4,362 104,426 May Department Stores Co. (The) 4,575 104,173 St. Paul Companies Inc. 3,572 102,588 Safeway Inc./1/ 4,579 102,112 Public Service Enterprise Group Inc. 3,294 100,467 Becton, Dickinson & Co. 3,536 100,422 M&T Bank Corp. 1,262 99,458 TRW Inc. 1,696 99,301 Burlington Resources Inc. 2,529 97,012 Ameren Corp. 2,318 96,545 Jefferson-Pilot Corp. 2,399 96,200 Heinz (H.J.) Co. 2,882 96,172 Anadarko Petroleum Corp. 2,146 95,583 Federated Department Stores Inc./1/ 3,212 94,561 MBIA Inc. 2,359 94,242 Mellon Financial Corp. 3,631 94,152 Marshall & Ilsley Corp. 3,359 93,683 Loews Corp. 2,141 91,827 Lincoln National Corp. 2,987 91,253 CSX Corp. 3,362 88,690 Union Planters Corp. 3,206 88,037 Lilly (Eli) and Co. 1,578 87,327 Genuine Parts Co. 2,799 85,761 Bear Stearns Companies Inc. (The) 1,515 85,446 Franklin Resources Inc. 2,720 84,592 Cinergy Corp. 2,683 84,327 Aetna Inc. 2,344 83,939 National Commerce Financial Corp. 3,312 82,966 ITT Industries Inc. 1,331 82,961 Apple Computer Inc./1/ 5,663 82,113 Masco Corp. 4,190 81,914 Dover Corp. 3,207 81,394 74 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Southwest Airlines Co. 6,161 $ 80,463 Cincinnati Financial Corp. 2,213 78,739 Campbell Soup Co. 3,563 78,671 Countrywide Credit Industries Inc. 1,664 78,458 UNUMProvident Corp. 3,851 78,368 Rohm & Haas Co. "A" 2,516 77,996 Cox Communications Inc. "A"/1/ 3,151 77,483 AON Corp. 3,778 77,411 El Paso Corp. 9,314 77,027 PPL Corp. 2,362 76,859 Delphi Automotive Systems Corp. 8,956 76,574 KeySpan Corp. 2,259 75,676 Knight Ridder Inc. 1,337 75,420 General Mills Inc. 1,696 75,336 Simon Property Group Inc. 2,093 74,783 North Fork Bancorp Inc. 1,959 74,129 AT&T Wireless Services Inc./1/ 17,872 73,633 Parker Hannifin Corp. 1,890 72,217 Eaton Corp. 1,127 71,835 EMC Corp./1/ 15,616 71,365 Huntington Bancshares Inc. 3,919 71,287 First Tennessee National Corp. 2,035 70,553 Kerr-McGee Corp. 1,610 69,938 PG&E Corp./1/ 6,205 69,868 Popular Inc. 2,192 69,267 Sun Microsystems Inc./1/ 26,717 69,197 Ambac Financial Group Inc. 1,259 67,848 Penney (J.C.) Co. Inc. 4,247 67,612 Archstone-Smith Trust 2,825 67,461 Plum Creek Timber Co. Inc. 2,965 67,039 EOG Resources Inc. 1,862 66,958 Torchmark Corp. 1,949 66,773 Constellation Energy Group Inc. 2,633 65,272 State Street Corp. 1,689 65,263 SAFECO Corp. 2,050 65,149 Computer Sciences Corp./1/ 2,343 65,112 Textron Inc. 1,898 64,722 Prologis Trust 2,575 64,143 Zions Bancorp 1,473 64,120 Progressive Corp. (The) 1,263 63,946 Kellogg Co. 1,913 63,607 Monsanto Co. 4,160 63,606 MeadWestvaco Corp. 3,210 61,664 Computer Associates International Inc. 6,383 61,277 General Motors Corp. "H"/1/ 6,695 61,259 Office Depot Inc./1/ 4,900 60,466 Compass Bancshares Inc. 2,048 60,396 Northern Trust Corp. 1,601 60,390 Limited Brands Inc. 4,176 59,884 MGIC Investment Corp. 1,463 59,734 R.J. Reynolds Tobacco Holdings Inc. 1,475 59,472 PACCAR Inc. 1,748 59,065 Xcel Energy Inc. 6,318 58,821 Rockwell Collins 2,646 58,053 Dean Foods Co./1/ 1,443 57,403 NiSource Inc. 3,330 57,376 GreenPoint Financial Corp. 1,366 57,017 Sempra Energy 2,901 57,005 Xerox Corp./1/ 11,512 56,984 Banknorth Group Inc. 2,357 55,979 Colgate-Palmolive Co. 1,023 55,191 Clorox Co. 1,373 55,167 Old Republic International Corp. 1,915 54,348 Jones Apparel Group Inc./1/ 1,768 54,278 Sovereign Bancorp Inc. 4,177 53,883 Grainger (W.W.) Inc. 1,250 53,187 Duke-Weeks Realty Corp. 2,154 53,031 Micron Technology Inc./1/ 4,265 52,758 ServiceMaster Co. 4,842 52,536 Vulcan Materials Co. 1,439 52,034 Edison International/1/ 5,181 51,810 General Growth Properties Inc. 996 51,294 Hibernia Corp. "A" 2,566 51,294 Agilent Technologies Inc./1/ 3,905 50,999 CenturyTel Inc. 2,268 50,871 Public Storage Inc. 1,592 50,785 Apartment Investment & Management Co. "A" 1,307 50,777 Engelhard Corp. 2,078 49,519 Sherwin-Williams Co. 2,081 49,278 Pepco Holdings Inc. 2,457 49,017 Schedules of Investments 75 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- VF Corp. 1,359 $ 48,897 Hilton Hotels Corp. 4,218 48,001 Hershey Foods Corp. 772 47,903 Georgia-Pacific Corp. 3,647 47,739 Sigma-Aldrich Corp. 967 47,644 Nucor Corp. 1,253 47,489 Eastman Chemical Co. 1,240 47,331 Whirlpool Corp. 1,030 47,236 Radian Group Inc. 1,442 47,096 Pitney Bowes Inc. 1,534 46,772 Republic Services Inc. "A"/1/ 2,471 46,455 Bard (C.R.) Inc. 843 46,053 Energy East Corp. 2,321 45,979 Vornado Realty Trust 1,159 45,723 Kimco Realty Corp. 1,469 45,686 Halliburton Co. 3,493 45,095 Hillenbrand Industries Inc. 827 44,906 Wisconsin Energy Corp. 1,847 44,882 Circuit City Stores Inc. 2,948 44,662 Lennar Corp. 799 44,568 Fidelity National Financial Inc. 1,532 44,014 Freddie Mac 784 43,826 SCANA Corp. 1,679 43,688 Lear Corp./1/ 1,046 43,566 Centex Corp. 982 43,552 Reliant Energy Inc. 4,311 43,153 Valero Energy Corp. 1,620 42,881 First Virginia Banks Inc. 1,149 42,858 Mercantile Bankshares Corp. 1,120 42,750 Liz Claiborne Inc. 1,710 42,664 Rockwell International Corp. 2,618 42,595 Leggett & Platt Inc. 2,148 42,509 Telephone & Data Systems Inc. 836 42,176 Marriott International Inc. "A" 1,451 42,064 Tyson Foods Inc. "A" 3,605 41,926 Pactiv Corp./1/ 2,536 41,717 Kroger Co./1/ 2,956 41,680 Lucent Technologies Inc./1/ 54,713 41,582 Edwards (A.G.) Inc. 1,292 41,318 Wrigley (William Jr.) Co. 834 41,275 Valley National Bancorp 1,520 40,432 AvalonBay Communities Inc. 957 40,003 Boston Properties Inc. 1,070 39,804 Bemis Co. 804 39,718 Washington Post Company (The) "B" 61 39,589 Starwood Hotels & Resorts Worldwide Inc. 1,768 39,426 PMI Group Inc. (The) 1,445 39,318 Health Care Property Investors Inc. 916 39,022 TECO Energy Inc. 2,451 38,922 AMB Property Corp. 1,341 38,755 Associated Bancorp 1,218 38,647 UST Inc. 1,366 38,535 Amerada Hess Corp. 567 38,488 MGM Grand Inc./1/ 1,028 38,344 Energizer Holdings Inc./1/ 1,260 38,304 Stilwell Financial Inc. 3,156 38,093 Diebold Inc. 1,153 37,957 SPX Corp./1/ 373 37,636 Golden State Bancorp Inc. 1,157 37,394 Liberty Property Trust 1,198 37,138 Pioneer Natural Resources Co./1/ 1,531 37,127 Commerce Bancshares Inc. 947 36,999 American Water Works Inc. 826 36,889 Ball Corp. 724 36,482 AutoNation Inc./1/ 3,152 36,311 XTO Energy Inc. 1,713 35,305 Equitable Resources Inc. 1,014 35,034 Host Marriott Corp./1/ 3,765 34,939 Northeast Utilities 2,064 34,882 Pinnacle West Capital Corp. 1,253 34,783 Smurfit-Stone Container Corp./1/ 2,763 34,703 SUPERVALU Inc. 2,142 34,593 Park Place Entertainment Corp./1/ 4,350 34,582 Phelps Dodge Corp./1/ 1,335 34,216 UnionBanCal Corp. 814 34,196 KB HOME 694 33,895 Protective Life Corp. 1,099 33,816 Humana Inc./1/ 2,710 33,604 NSTAR 849 33,578 Pulte Homes Inc. 787 33,550 DPL Inc. 2,028 33,361 76 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Hospitality Properties Trust 1,001 $ 33,153 Autoliv Inc. 1,569 33,075 Donnelley (R.R.) & Sons Co. 1,406 33,055 Astoria Financial Corp. 1,350 32,940 Sonoco Products Co. 1,544 32,903 Rouse Co. 1,023 32,685 Sunoco Inc. 1,077 32,482 New York Community Bancorp Inc. 1,147 32,311 Thermo Electron Corp./1/ 1,973 31,824 Toys R Us Inc./1/ 3,109 31,650 Scientific-Atlanta Inc. 2,508 31,375 Dana Corp. 2,380 31,130 Fulton Financial Corp. 1,650 31,020 Belo (A.H.) Corp. 1,407 30,785 New York Times Co. "A" 677 30,770 Bank of Hawaii Corp. 1,092 30,467 Wilmington Trust Corp. 1,050 30,366 Brunswick Corp. 1,442 30,340 Health Net Inc./1/ 1,405 30,137 City National Corp. 640 29,933 Unisys Corp./1/ 4,262 29,834 Ashland Inc. 1,112 29,790 McGraw-Hill Companies Inc. (The) 483 29,569 Bowater Inc. 837 29,546 Pentair Inc. 787 29,253 FirstMerit Corp. 1,360 29,131 Goodrich (B.F.) Co. 1,542 29,113 Temple-Inland Inc. 747 28,857 Puget Energy Inc. 1,396 28,492 Valassis Communications Inc./1/ 809 28,372 D.R. Horton Inc. 1,521 28,321 T. Rowe Price Group Inc. 1,133 28,280 Pennzoil-Quaker State Co. 1,284 28,209 Questar Corp. 1,226 28,002 New Plan Excel Realty Trust 1,515 27,937 Cullen/Frost Bankers Inc. 818 27,935 Alliant Energy Corp. 1,445 27,816 Smithfield Foods Inc./1/ 1,771 27,805 AmerisourceBergen Corp. 388 27,711 Anthem Inc./1/ 426 27,690 Pogo Producing Co. 802 27,316 Helmerich & Payne Inc. 797 27,281 United Dominion Realty Trust Inc. 1,714 27,270 Nordstrom Inc. 1,509 27,071 Pall Corp. 1,709 26,985 Fluor Corp. 1,096 26,786 Weingarten Realty Investors 729 26,681 Yum! Brands Inc./1/ 960 26,602 Bausch & Lomb Inc. 797 26,436 Alberto-Culver Co. "B" 538 26,378 Allegheny Energy Inc. 2,013 26,370 NCR Corp./1/ 1,326 26,255 Webster Financial Corp. 781 26,226 Hormel Foods Corp. 1,193 26,103 ALLETE Inc. 1,203 25,985 MDU Resources Group Inc. 1,132 25,844 RPM Inc. 1,830 25,730 BancorpSouth Inc. 1,297 25,551 Martin Marietta Materials Inc. 777 25,307 Avery Dennison Corp. 444 25,299 Fox Entertainment Group Inc. "A"/1/ 1,144 25,202 StanCorp Financial Group Inc. 474 25,075 Hasbro Inc. 2,249 25,031 Coors (Adolf) Company "B" 443 24,941 Wendy's International Inc. 752 24,899 Qwest Communications International Inc./1/ 10,909 24,873 Hawaiian Electric Industries Inc. 577 24,869 Watson Pharmaceuticals Inc./1/ 1,014 24,853 Meredith Corp. 575 24,754 Markel Corp./1/ 124 24,698 Annaly Mortgage Management Inc. 1,324 24,428 Old National Bancorp 977 24,288 Healthsouth Corp./1/ 5,840 24,236 Lyondell Chemical Co. 2,028 24,214 Colonial BancGroup Inc. (The) 1,920 23,808 Vectren Corp. 1,082 23,804 McCormick & Co. Inc. 1,041 23,735 First American Corp. 1,141 23,311 Lubrizol Corp. 821 23,210 Lee Enterprises Inc. 706 23,199 BMC Software Inc./1/ 1,738 22,716 Schedules of Investments 77 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Hubbell Inc. "B" 781 $ 22,704 CNF Transportation Inc. 723 22,695 Unitrin Inc. 739 22,687 Ryder System Inc. 910 22,686 Washington Federal Inc. 1,014 22,627 BRE Properties Inc. "A" 733 22,540 Dillards Inc. "A" 1,114 22,481 3Com Corp./1/ 5,696 22,442 National Fuel Gas Co. 1,126 22,374 Transatlantic Holdings Inc. 336 22,327 Sky Financial Group Inc. 1,109 22,080 Mack-Cali Realty Corp. 683 21,945 Arden Realty Inc. 924 21,853 Phoenix Companies Inc. 1,601 21,806 American Power Conversion Corp./1/ 2,249 21,500 Triad Hospitals Inc./1/ 565 21,442 Snap-On Inc. 929 21,348 CarrAmerica Realty Corp. 846 21,294 Vertex Pharmaceuticals Inc./1/ 1,145 21,171 TCF Financial Corp. 499 21,123 HON Industries Inc. 828 21,073 BorgWarner Inc. 424 21,047 OGE Energy Corp. 1,246 21,020 Manor Care Inc./1/ 932 20,951 Independence Community Bank Corp. 835 20,950 Valspar Corp. (The) 559 20,851 IMC Global Inc. 1,726 20,798 Healthcare Realty Trust Inc. 668 20,775 First Midwest Bancorp Inc. 772 20,736 International Flavors & Fragrances Inc. 651 20,734 Kinder Morgan Inc. 580 20,561 iStar Financial Inc. 733 20,465 Marsh & McLennan Companies Inc. 491 20,445 Berkley (W.R.) Corp. 601 20,434 Crescent Real Estate Equities Co. 1,301 20,426 Roslyn Bancorp Inc. 1,171 20,387 CenterPoint Properties Corp. 367 20,368 HCC Insurance Holdings Inc. 847 20,336 Owens-Illinois Inc./1/ 1,796 20,331 Saks Inc./1/ 1,926 20,281 Goodyear Tire & Rubber Co. 2,281 20,278 Whitney Holding Corp. 634 20,231 Advanced Micro Devices Inc./1/ 3,758 20,068 Worthington Industries Inc. 1,071 20,028 NICOR Inc. 708 19,966 Visteon Corp. 2,090 19,792 Reebok International Ltd./1/ 789 19,764 Mandalay Resort Group/1/ 589 19,761 Highwoods Properties Inc. 844 19,750 AGL Resources Inc. 891 19,682 FNB Corp. 697 19,530 Avnet Inc. 1,807 19,498 Leucadia National Corp. 573 19,482 First Industrial Realty Trust Inc. 628 19,462 Cablevision Systems Corp./1/ 2,142 19,407 McKesson Corp. 685 19,406 Dole Food Co. 668 19,392 Reckson Associates Realty Corp. 851 19,377 Pittston Brink's Group 864 19,354 Hudson City Bancorp Inc. 1,187 19,265 Navistar International Corp. 886 19,208 Pier 1 Imports Inc. 1,006 19,184 PepsiAmericas Inc. 1,350 19,170 Developers Diversified Realty Corp. 870 19,149 Legg Mason Inc. 448 19,067 Peoples Energy Corp. 565 19,035 Camden Property Trust 574 19,028 Lancaster Colony Corp. 449 18,912 Great Plains Energy Inc. 987 18,901 JDS Uniphase Corp./1/ 9,678 18,853 Teleflex Inc. 413 18,825 ArvinMeritor Inc. 1,005 18,793 LSI Logic Corp./1/ 2,942 18,682 United States Steel Corp. 1,596 18,530 Rayonier Inc. 442 18,524 WGL Holdings Inc. 774 18,506 Philadelphia Suburban Corp. 909 18,453 Boise Cascade Corp. 808 18,422 Delta Air Lines Inc. 1,972 18,320 AmerUs Group Co. 645 18,292 78 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- McClatchy Co. (The) "A" 300 $ 18,285 Pan Pacific Retail Properties Inc. 530 18,274 Borders Group Inc./1/ 1,156 18,265 Realty Income Corp. 531 18,134 Millennium Pharmaceuticals Inc./1/ 1,943 18,109 IKON Office Solutions Inc. 2,291 18,053 Tektronix Inc./1/ 1,097 18,024 Park National Corp. 192 17,990 Readers Digest Association Inc. (The) "A" 1,149 17,982 Precision Castparts Corp. 828 17,951 Cabot Corp. 846 17,766 MONY Group Inc. (The) 719 17,738 WPS Resources Corp. 500 17,720 York International Corp. 628 17,710 Mercury General Corp. 412 17,634 Kennametal Inc. 546 17,538 Vishay Intertechnology Inc./1/ 1,980 17,424 Harsco Corp. 640 17,402 La-Z-Boy Inc. 750 17,400 Piedmont Natural Gas Co. 490 17,380 OM Group Inc. 406 17,377 Citizens Banking Corp. 715 17,282 ICOS Corp./1/ 822 17,237 IndyMac Bancorp Inc./1/ 891 17,170 DQE Inc. 1,144 17,160 Alleghany Corp./1/ 90 17,055 HRPT Properties Trust 2,050 16,912 Electronic Data Systems Corp. 1,205 16,846 Health Care REIT Inc. 613 16,766 Raymond James Financial Inc. 619 16,756 American Greetings Corp. "A" 1,037 16,696 Autodesk Inc. 1,311 16,610 Cooper Tire & Rubber Co. 1,023 16,511 Packaging Corporation of America/1/ 941 16,477 Westamerica Bancorp 408 16,434 Crompton Corp. 1,632 16,402 Service Corp. International/1/ 4,685 16,397 Constellation Brands Inc./1/ 709 16,378 Trizec Properties Inc. 1,435 16,287 Citizens Communications Co./1/ 2,402 16,286 Invitrogen Corp./1/ 474 16,149 Ryland Group Inc. 434 16,132 ONEOK Inc. 853 16,122 CMS Energy Corp. 2,000 16,120 Clayton Homes Inc. 1,461 16,042 Crane Co. 809 15,986 Ocean Energy Inc. 797 15,900 Harris Corp. 472 15,807 Williams Companies Inc. 6,992 15,802 Trustmark Corp. 693 15,800 Broadcom Corp. "A"/1/ 1,479 15,796 Imation Corp./1/ 557 15,780 Commercial Federal Corp. 722 15,718 Toll Brothers Inc./1/ 718 15,609 CBRL Group Inc. 681 15,540 Dial Corp. (The) 723 15,516 Smucker (J.M.) Co. (The) 422 15,487 Corn Products International Inc. 536 15,410 Arrow Electronics Inc./1/ 1,219 15,396 AptarGroup Inc. 572 15,370 Erie Indemnity Co. "A" 365 15,206 Neiman-Marcus Group Inc. "A"/1/ 575 15,094 Newmont Mining Corp. 547 15,048 Tech Data Corp./1/ 563 14,863 Tellabs Inc./1/ 3,603 14,664 Lafarge North America Inc. 503 14,572 IDACORP Inc. 597 14,525 Storage Technology Corp./1/ 1,379 14,493 Alexander & Baldwin Inc. 649 14,440 Payless ShoeSource Inc./1/ 266 14,367 Great Lakes Chemical Corp. 594 14,268 Prentiss Properties Trust 488 14,123 Atmos Energy Corp. 656 14,104 Foot Locker Inc./1/ 1,406 14,046 Symbol Technologies Inc. 1,821 13,967 Solectron Corp./1/ 6,585 13,894 Cytec Industries Inc./1/ 631 13,850 Noble Energy Inc. 407 13,826 Energen Corp. 546 13,819 Nike Inc. "B" 320 13,818 Apogent Technologies Inc./1/ 740 13,808 Schedules of Investments 79 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Corning Inc./1/ 8,591 $ 13,746 Veritas Software Corp./1/ 932 13,710 Winn-Dixie Stores Inc. 1,041 13,658 Hudson United Bancorp 513 13,646 Yellow Corp./1/ 460 13,574 South Financial Group Inc. (The) 639 13,477 FMC Technologies Inc./1/ 800 13,408 LaBranche & Co. Inc./1/ 662 13,405 Home Properties of New York Inc. 412 13,390 Thornbury Mortgage Inc. 708 13,303 Post Properties Inc. 510 13,250 Crown Cork & Seal Co. Inc./1/ 2,519 13,225 Cousins Properties Inc. 573 13,179 New Jersey Resources Corp. 399 13,127 Big Lots Inc./1/ 829 13,123 Timken Co. (The) 783 13,115 Estee Lauder Companies Inc. "A" 456 13,105 Stanley Works (The) 401 13,101 GATX Corp. 661 13,088 AGCO Corp./1/ 562 13,038 Outback Steakhouse Inc./1/ 474 13,026 Cummins Inc. 549 12,967 Potlatch Corp. 451 12,935 Ohio Casualty Corp./1/ 791 12,877 SL Green Realty Corp. 418 12,849 Charming Shoppes Inc./1/ 1,903 12,845 Electronics For Imaging Inc./1/ 860 12,831 IDT Corp./1/ 787 12,828 PacifiCare Health Systems Inc. "A"/1/ 553 12,769 Ingram Micro Inc. "A"/1/ 960 12,768 Commerce Group Inc. 389 12,588 Susquehanna Bancshares Inc. 579 12,535 Universal Corp. 354 12,415 Bob Evans Farms Inc. 523 12,395 Providian Financial Corp./1/ 2,528 12,387 Harleysville Group Inc. 469 12,311 USFreightways Corp. 427 12,246 Manpower Inc. 416 12,205 Hercules Inc./1/ 1,324 12,194 Zale Corp./1/ 404 12,185 CH Energy Group Inc. 259 12,155 Tom Brown Inc./1/ 530 12,137 Novell Inc./1/ 5,768 12,113 CBL & Associates Properties Inc. 312 12,090 Minerals Technologies Inc. 325 12,048 Mirant Corp./1/ 5,410 11,956 Omnicare Inc. 566 11,954 Nationwide Health Properties Inc. 701 11,952 Standard-Pacific Corp. 511 11,947 Fuller (H.B.) Co. 449 11,943 Henry Schein Inc./1/ 225 11,869 Kansas City Southern Industries Inc./1/ 955 11,842 LNR Property Corp. 355 11,839 Lamar Advertising Co./1/ 390 11,836 Northwest Natural Gas Co. 402 11,803 AnnTaylor Stores Corp./1/ 510 11,745 Rowan Companies Inc. 629 11,725 KEMET Corp./1/ 1,370 11,713 Protein Design Labs Inc./1/ 1,409 11,695 Regency Centers Corp. 377 11,687 Claire's Stores Inc. 535 11,663 Downey Financial Corp. 340 11,645 Aquila Inc. 2,837 11,632 Southwest Gas Corp. 521 11,592 Agere Systems Inc. "B"/1/ 11,707 11,590 WebMD Corp./1/ 2,290 11,565 Mueller Industries Inc./1/ 446 11,551 Beazer Homes USA Inc./1/ 189 11,538 First Commonwealth Financial Corp. 929 11,510 Human Genome Sciences Inc./1/ 954 11,505 Charter Municipal Mortgage Acceptance Corp. 651 11,471 PNM Resources Inc. 578 11,444 Pride International Inc./1/ 878 11,414 Forest City Enterprises Inc. "A" 350 11,375 American National Insurance Co. 164 11,318 Longs Drug Stores Corp. 489 11,291 SEACOR SMIT Inc./1/ 275 11,272 Werner Enterprises Inc. 609 11,193 American Financial Holdings Inc. 368 11,191 Silicon Valley Bancshares/1/ 661 11,191 80 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Extended Stay America Inc./1/ 878 $ 11,151 AK Steel Holding Corp./1/ 1,519 11,104 Tidewater Inc. 411 11,093 Sensient Technologies Corp. 524 11,072 Hughes Supply Inc. 379 11,044 EMCOR Group Inc./1/ 222 11,033 Albemarle Corp. 435 11,001 Greater Bay Bancorp 603 10,969 Murphy Oil Corp. 133 10,915 Terex Corp./1/ 642 10,850 M.D.C. Holdings Inc. 307 10,837 Genentech Inc./1/ 332 10,833 Community First Bankshares Inc. 388 10,817 American Financial Group Inc. 469 10,796 Coventry Health Care Inc./1/ 332 10,790 ENSCO International Inc. 430 10,767 Louisiana-Pacific Corp./1/ 1,663 10,760 FBR Asset Investment Corp. 344 10,753 Sanmina-SCI Corp./1/ 3,875 10,734 PolyOne Corp. 1,249 10,729 Dow Jones & Co. Inc. 278 10,678 E*TRADE Group Inc./1/ 2,381 10,595 EarthLink Inc./1/ 1,978 10,563 Carlisle Companies Inc. 286 10,490 La Quinta Corp. 2,184 10,483 American Axle & Manufacturing Holdings Inc./1/ 417 10,417 Wallace Computer Services Inc. 590 10,414 Barnes & Noble Inc./1/ 491 10,390 AMR Corp./1/ 2,484 10,383 Mattel Inc. 576 10,374 Scholastic Corp./1/ 232 10,366 Comverse Technology Inc./1/ 1,481 10,352 Allmerica Financial Corp. 849 10,188 Anixter International Inc./1/ 494 10,176 Media General Inc. "A" 200 10,170 Andrew Corp./1/ 1,551 10,159 CIENA Corp./1/ 3,418 10,151 UMB Financial Corp. 260 10,150 Interstate Bakeries Corp. 381 10,123 Waypoint Financial Corp. 600 10,116 Ralcorp Holdings Inc./1/ 475 10,103 Ventas Inc. 755 10,079 Tecumseh Products Co. "A" 239 10,028 Emmis Communications Corp./1/ 526 9,994 Polo Ralph Lauren Corp./1/ 479 9,954 UICI/1/ 610 9,919 AES Corp. (The)/1/ 3,946 9,904 First Citizens BancShares Inc. "A" 96 9,896 Chemical Financial Corp. 342 9,870 Hancock Holding Co. 210 9,866 Sierra Pacific Resources 1,617 9,864 Wolverine World Wide Inc. 657 9,855 Millennium Chemicals Inc. 997 9,850 St. Mary Land & Exploration Co. 412 9,847 First Financial Bancorp 550 9,796 Commercial Net Lease Realty Inc. 607 9,785 USA Networks Inc./1/ 504 9,768 Calpine Corp./1/ 3,939 9,729 Newfield Exploration Co./1/ 288 9,674 Arkansas Best Corp./1/ 337 9,669 United Stationers Inc./1/ 367 9,652 Gables Residential Trust 361 9,642 Baker Hughes Inc. 331 9,609 LandAmerica Financial Group Inc. 292 9,604 UGI Corp. 264 9,596 Liberty Corp. 266 9,523 US Oncology Inc./1/ 1,172 9,505 Briggs & Stratton Corp. 253 9,498 Brandywine Realty Trust 421 9,494 Cabot Oil & Gas Corp. "A" 437 9,395 Kellwood Co. 411 9,395 Scotts Co. (The) "A"/1/ 225 9,380 CNA Financial Corp./1/ 375 9,375 Pep Boys-Manny, Moe & Jack Inc. 760 9,310 International Speedway Corp. "A" 234 9,297 American Standard Companies Inc./1/ 146 9,289 Radio One Inc. "D"/1/ 563 9,284 Trinity Industries Inc. 563 9,267 Iomega Corp./1/ 857 9,161 Blyth Inc. 328 9,151 Peabody Energy Corp. 358 9,129 Schedules of Investments 81 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- El Paso Electric Co./1/ 767 $ 9,112 National-Oilwell Inc./1/ 470 9,109 Nationwide Financial Services Inc. 341 9,105 Kilroy Realty Corp. 383 9,081 Westar Energy Inc. 900 9,054 Entravision Communications Corp./1/ 683 9,050 FelCor Lodging Trust Inc. 704 9,032 Compuware Corp./1/ 2,951 9,001 Thomas & Betts Corp./1/ 638 8,989 Sybase Inc./1/ 772 8,971 Lennox International Inc. 676 8,943 Genzyme Corp. - General Division/1/ 433 8,924 Quintiles Transnational Corp./1/ 938 8,920 Selective Insurance Group Inc. 409 8,888 Allegheny Technologies Inc. 1,284 8,885 Provident Financial Group Inc. 354 8,882 VeriSign Inc./1/ 1,755 8,863 ADC Telecommunications Inc./1/ 7,706 8,862 ICN Pharmaceuticals Inc. 972 8,806 Intersil Corp. "A"/1/ 677 8,774 People's Bank 391 8,770 Airborne Inc. 766 8,686 Cleco Corp. 643 8,661 Solutia Inc. 1,658 8,655 MPS Group Inc./1/ 1,485 8,613 Dun & Bradstreet Corp./1/ 255 8,571 Modine Manufacturing Co. 448 8,521 AMCORE Financial Inc. 388 8,520 Callaway Golf Co. 818 8,507 Banta Corp. 239 8,484 American Capital Strategies Ltd. 449 8,459 Florida East Coast Industries Inc. 358 8,449 CV Therapeutics Inc./1/ 404 8,448 Avista Corp. 753 8,434 Integrated Device Technology Inc./1/ 805 8,404 Iron Mountain Inc./1/ 336 8,397 Schulman (A.) Inc. 483 8,370 Capital Automotive 335 8,368 Coherent Inc./1/ 458 8,358 OSI Pharmaceuticals Inc./1/ 491 8,332 Gateway Inc./1/ 2,801 8,319 Quanex Corp. 238 8,259 Advanced Fibre Communications Inc./1/ 622 8,254 Jones Lang LaSalle Inc./1/ 401 8,245 Reliance Steel & Aluminum Co. 375 8,194 Anthracite Capital Inc. 724 8,181 Horace Mann Educators Corp. 551 8,100 Capitol Federal Financial 365 8,088 Choice Hotels International Inc./1/ 350 8,088 Colonial Properties Trust 223 8,068 Journal Register Co./1/ 428 8,068 Senior Housing Properties Trust 718 8,056 Rite Aid Corp./1/ 3,834 8,051 USEC Inc. 1,284 8,038 Texas Industries Inc. 331 8,037 First Charter Corp. 485 8,036 Church & Dwight Co. Inc. 242 8,022 Abgenix Inc./1/ 1,235 8,015 Ethan Allen Interiors Inc. 246 7,961 WesBanco Inc. 334 7,953 Varco International Inc./1/ 468 7,919 Molex Inc. 336 7,903 Philadelphia Consolidated Holding Corp./1/ 266 7,847 Hunt (J.B.) Transport Services Inc./1/ 333 7,842 Republic Bancorp Inc. 603 7,839 United Defense Industries Inc./1/ 331 7,812 United States Cellular Corp./1/ 264 7,809 Landry's Restaurants Inc. 345 7,794 Granite Construction Inc. 471 7,762 Loews Corporation - Carolina Group 412 7,750 Stewart Enterprises Inc. "A"/1/ 1,519 7,747 Florida Rock Industries Inc. 253 7,732 GTECH Holdings Corp./1/ 310 7,694 Delphi Financial Group Inc. "A" 206 7,503 Ruddick Corp. 492 7,473 Impac Mortgage Holdings Inc. 669 7,459 PSS World Medical Inc./1/ 1,120 7,448 Smith (A.O.) Corp. "B" 261 7,418 OfficeMax Inc./1/ 1,814 7,401 Donaldson Co. Inc. 215 7,381 82 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Kimball International Inc. "B" 532 $ 7,352 Provident Bankshares Corp. 337 7,272 AVX Corp. 839 7,266 Southwest Bancorp of Texas Inc./1/ 199 7,246 Genesis Health Ventures Inc./1/ 440 7,234 Southern Union Co./1/ 640 7,232 Gartner Inc. "A"/1/ 892 7,225 Western Gas Resources Inc. 231 7,219 BOK Financial Corp./1/ 222 7,215 Seacoast Financial Services Corp. 359 7,205 Blockbuster Inc. 290 7,192 Maxtor Corp./1/ 2,754 7,188 Flowers Foods Inc./1/ 316 7,183 Curtiss Wright Corp. 120 7,175 Cree Inc./1/ 572 7,150 Ceridian Corp./1/ 501 7,139 Aztar Corp./1/ 540 7,133 Jack in the Box Inc./1/ 312 7,114 G&K Services Inc. "A" 210 7,108 Avaya Inc./1/ 4,969 7,106 Toro Co. 126 7,087 Wesco Financial Corp. 23 7,073 Edwards Lifesciences Corp./1/ 276 7,063 Heritage Property Investment Trust Inc. 282 7,039 Casey's General Store Inc. 609 7,034 Vintage Petroleum Inc. 651 7,031 Superior Industries International Inc. 148 6,968 Federal Signal Corp. 378 6,963 FirstFed Financial Corp./1/ 270 6,952 Reinsurance Group of America Inc. 269 6,951 Allied Capital Corp. 317 6,939 UniSource Energy Corp. 455 6,939 Idex Corp. 242 6,909 Dycom Industries Inc./1/ 752 6,888 Laclede Group Inc. (The) 295 6,873 Alaska Air Group Inc./1/ 388 6,868 Texas Regional Bancshares Inc. "A" 205 6,865 Jacobs Engineering Group Inc./1/ 222 6,855 Wellman Inc. 501 6,839 Black Hills Corp. 261 6,836 Commercial Metals Co. 380 6,810 Applied Micro Circuits Corp./1/ 2,365 6,764 Roadway Corp. 184 6,749 UIL Holdings Corp. 190 6,736 Moog Inc. "A"/1/ 238 6,726 Interactive Data Corp./1/ 549 6,725 Cornerstone Realty Income Trust Inc. 754 6,711 FMC Corp./1/ 259 6,687 Swift Transportation Co. Inc./1/ 426 6,646 Unizan Financial Corp. 345 6,616 Boyd Gaming Corp./1/ 354 6,609 Massey Energy Co. 1,021 6,585 Sinclair Broadcast Group Inc. "A"/1/ 480 6,576 JDN Realty Corp. 544 6,572 Hearst-Argyle Television Inc./1/ 264 6,558 Kindred Healthcare Inc./1/ 177 6,554 Spherion Corp./1/ 929 6,549 Overseas Shipholding Group Inc. 428 6,540 Gaylord Entertainment Co. "A"/1/ 345 6,527 Tower Automotive Inc./1/ 974 6,526 Ionics Inc./1/ 274 6,524 Connecticut Bankshares Inc. 175 6,480 Renal Care Group Inc./1/ 195 6,414 Tredegar Corp. 382 6,398 MAF Bancorp Inc. 207 6,396 Taubman Centers Inc. 449 6,389 Summit Properties Inc. 329 6,383 Nu Skin Enterprises Inc. "A" 523 6,381 Hutchinson Technology Inc./1/ 394 6,363 Kaydon Corp. 317 6,353 Viasys Healthcare Inc./1/ 408 6,283 Credence Systems Corp./1/ 721 6,244 Broadwing Inc./1/ 3,144 6,225 Wabtec Corp. 442 6,223 Regal-Beloit Corp. 363 6,211 PMA Capital Corp. "A" 414 6,210 Western Digital Corp./1/ 1,318 6,195 Cell Genesys Inc./1/ 514 6,194 Dress Barn Inc./1/ 398 6,193 Ferro Corp. 268 6,191 Performance Food Group Co./1/ 182 6,181 Schedules of Investments 83 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Dollar Thrifty Automotive Group Inc./1/ 385 $ 6,179 IRT Property Co. 525 6,169 Corrections Corp. of America/1/ 439 6,168 Diamond Offshore Drilling Inc. 309 6,165 Triumph Group Inc./1/ 220 6,160 Harland (John H.) Co. 226 6,136 Corus Bankshares Inc. 140 6,133 MB Financial Inc. 183 6,130 South Jersey Industries Inc. 187 6,107 SanDisk Corp./1/ 465 6,096 Forest Oil Corp./1/ 238 6,069 EastGroup Properties Inc. 245 6,064 W Holding Co. Inc. 372 6,064 ProAssurance Corp./1/ 358 6,050 Teradyne Inc./1/ 627 6,019 Community Health Systems Inc./1/ 226 6,018 Thoratec Labs Corp./1/ 767 6,013 ESCO Technologies Inc./1/ 186 6,008 Tetra Tech Inc./1/ 751 6,000 Regis Corp. 212 5,997 Harbor Florida Bancshares Inc. 293 5,992 Sunrise Assisted Living Inc./1/ 279 5,985 American States Water Co. 228 5,978 Lexington Corp. Properties Trust 371 5,973 Arbitron Inc./1/ 174 5,933 Sovran Self Storage Inc. 195 5,932 M/I Schottenstein Homes Inc. 188 5,922 ShopKo Stores Inc./1/ 452 5,903 Entertainment Properties Trust 267 5,901 Tupperware Corp. 355 5,900 Empire District Electric Co. (The) 348 5,881 BankAtlantic Bancorp Inc. "A" 652 5,855 Jo-Ann Stores Inc./1/ 208 5,832 Pulitzer Inc. 140 5,831 Argonaut Group Inc. 338 5,830 Checkpoint Systems Inc./1/ 472 5,829 Prime Hospitality Corp./1/ 710 5,822 Stone Energy Corp./1/ 179 5,817 Furniture Brands International Inc./1/ 253 5,806 PerkinElmer Inc. 1,060 5,777 Alabama National Bancorp 127 5,751 Weis Markets Inc. 171 5,725 Hudson River Bancorp Inc. 237 5,724 Donnelley (R.H.) Corp./1/ 220 5,720 Nortek Inc./1/ 132 5,712 PS Business Parks Inc. 167 5,678 Arch Coal Inc. 343 5,677 GrafTech International Ltd./1/ 783 5,677 Russell Corp. 378 5,666 Joy Global Inc./1/ 682 5,661 Commonwealth Bancorp Inc. 123 5,658 Northwest Airlines Corp. "A"/1/ 847 5,658 Hanover Compressor Co./1/ 676 5,611 Student Loan Corp. 62 5,610 Bedford Property Investors Inc. 226 5,596 Stewart Information Services Corp./1/ 262 5,594 Acuity Brands Inc. 456 5,591 California Water Service Group 219 5,591 Oshkosh Truck Corp. 99 5,584 Hispanic Broadcasting Corp./1/ 299 5,576 Arch Chemicals Inc. 314 5,564 First Merchants Corp. 225 5,557 United Rentals Inc./1/ 658 5,554 Longview Fibre Co. 800 5,552 Bay View Capital Corp./1/ 978 5,545 CheckFree Corp./1/ 487 5,542 Meristar Hospitality Corp. 643 5,523 Offshore Logistics Inc./1/ 307 5,514 CommScope Inc./1/ 813 5,512 Doral Financial Corp. 228 5,504 Insight Communications Co. Inc./1/ 592 5,464 Mid-America Apartment Communities Inc. 219 5,455 Continental Airlines Inc. "B"/1/ 1,011 5,449 Esterline Technologies Corp./1/ 325 5,408 National Health Investors Inc. 354 5,398 First Financial Corp. 111 5,378 Hain Celestial Group Inc./1/ 367 5,377 Net.B@nk Inc./1/ 516 5,372 JLG Industries Inc. 664 5,345 NCI Building Systems Inc./1/ 283 5,320 84 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Mid-State Bancshares 324 $ 5,314 NUI Corp. 246 5,314 Bandag Inc. 174 5,307 BankUnited Financial Corp. "A"/1/ 332 5,295 First Financial Holdings Inc. 195 5,279 Actuant Corp. "A"/1/ 143 5,277 Hollywood Entertainment Corp./1/ 363 5,271 C&D Technologies Inc. 359 5,263 Bowne & Co. Inc. 525 5,250 Veritas DGC Inc./1/ 483 5,221 Trust Co. of New Jersey (The) 205 5,217 Community Bank System Inc. 176 5,215 Thomas Industries Inc. 210 5,208 Lone Star Steakhouse & Saloon Inc. 248 5,206 RLI Corp. 97 5,204 Steelcase Inc. 496 5,193 Cambrex Corp. 141 5,189 Stride Rite Corp. 656 5,189 21st Century Insurance Group 503 5,186 Wausau-Mosinee Paper Corp. 563 5,185 National Semiconductor Corp./1/ 433 5,170 Catellus Development Corp./1/ 278 5,129 Walter Industries Inc. 417 5,121 Greif Brothers Corp. "A" 207 5,071 Harrah's Entertainment Inc./1/ 105 5,062 RFS Hotel Investors Inc. 460 5,055 Applied Industrial Technologies Inc. 298 5,051 Acxiom Corp./1/ 356 5,048 First Federal Capital Corp. 259 5,032 CIBER Inc./1/ 863 5,014 Datascope Corp. 185 5,006 RAIT Investment Trust 243 5,006 Burlington Coat Factory Warehouse Corp. 278 5,004 Dynegy Inc. "A" 4,310 5,000 Technitrol Inc. 334 4,993 Medicis Pharmaceutical Corp. "A"/1/ 121 4,945 Unifi Inc./1/ 787 4,934 Brown Shoe Co. Inc. 275 4,922 ADTRAN Inc./1/ 315 4,914 PFF Bancorp Inc. 177 4,906 Sequa Corp. "A"/1/ 94 4,897 East West Bancorp Inc. 145 4,895 Methode Electronics Inc. "A" 533 4,893 ChemFirst Inc. 170 4,889 Incyte Genomics Inc./1/ 1,053 4,886 GenCorp. Inc. 486 4,884 Viad Corp. 239 4,883 Cox Radio Inc. "A"/1/ 186 4,866 First Sentinel Bancorp Inc. 359 4,857 Delta & Pine Land Co. 259 4,854 Mylan Laboratories Inc. 148 4,846 Imagistics International Inc./1/ 279 4,841 Presidential Life Corp. 336 4,838 AMLI Residential Properties Trust 219 4,836 Six Flags Inc./1/ 1,373 4,833 Integra Bank Corp. 268 4,829 Crown Castle International Corp./1/ 2,221 4,820 CDI Corp./1/ 184 4,812 Glenborough Realty Trust Inc. 237 4,811 SPS Technologies Inc./1/ 193 4,811 Belden Inc. 358 4,804 Men's Wearhouse Inc. (The)/1/ 326 4,792 Koger Equity Inc. 283 4,780 Coca-Cola Enterprises Inc. 225 4,779 Community Trust Bancorp Inc. 177 4,761 Central Parking Corp. 236 4,753 Quantum DLT & Storage Group/1/ 2,134 4,716 F&M Bancorp 149 4,708 Apex Mortgage Capital Inc. 418 4,677 Chemed Corp. 152 4,677 Triarc Companies Inc./1/ 206 4,674 Redwood Trust Inc. 170 4,646 Georgia Gulf Corp. 201 4,597 Korn/Ferry International/1/ 586 4,594 Cumulus Media Inc. "A"/1/ 258 4,554 Silgan Holdings Inc./1/ 160 4,550 Harte-Hanks Inc. 244 4,541 Trammell Crow Co./1/ 459 4,526 Boca Resorts Inc. "A"/1/ 443 4,519 Phillips-Van Heusen Corp. 358 4,511 Westport Resources Corp./1/ 245 4,484 Schedules of Investments 85 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Gemstar-TV Guide International Inc./1/ 1,769 $ 4,458 WMS Industries Inc./1/ 316 4,456 First Financial Bankshares Inc. 122 4,446 Knight Trading Group Inc./1/ 1,183 4,436 Alpharma Inc. "A" 462 4,435 Shurgard Storage Centers Inc. "A" 140 4,427 Premcor Inc./1/ 282 4,425 Corixa Corp./1/ 698 4,418 Saxon Capital Inc./1/ 399 4,417 Palm Inc./1/ 5,949 4,402 Sycamore Networks Inc./1/ 1,870 4,394 Fremont General Corp. 896 4,390 United Community Financial Corp. 495 4,381 Stewart & Stevenson Services Inc. 447 4,377 International Multifoods Corp./1/ 223 4,371 Fidelity Bankshares Inc. 244 4,368 Universal Health Realty Income Trust 168 4,360 Robert Mondavi Corp. (The) "A"/1/ 143 4,356 Inhale Therapeutic Systems Inc./1/ 866 4,354 Gold Bancorp Inc. 448 4,346 InFocus Corp./1/ 570 4,343 Anworth Mortgage Asset Corp. 356 4,340 Brooks-PRI Automation Inc./1/ 379 4,340 Sterling Bancshares Inc. 331 4,326 Kaman Corp. "A" 352 4,312 Applera Corp. - Celera Genomics Group/1/ 542 4,309 U.S. Restaurant Properties Inc. 302 4,303 Omega Financial Corp. 127 4,286 Odyssey Re Holdings Corp. 258 4,285 Bally Total Fitness Holding Corp./1/ 432 4,281 Metro-Goldwyn-Mayer Inc./1/ 358 4,278 Simmons First National Corp. "A" 115 4,276 Shaw Group Inc. (The)/1/ 300 4,260 Tractor Supply Co./1/ 134 4,259 Cable Design Technologies Corp./1/ 694 4,247 EGL Inc./1/ 385 4,239 NetIQ Corp./1/ 292 4,234 MFA Mortgage Investments Inc. 521 4,220 Kramont Realty Trust 284 4,203 NorthWestern Corp. 429 4,187 Benchmark Electronics Inc./1/ 197 4,147 Universal Compression Holdings Inc./1/ 256 4,147 Griffon Corp./1/ 386 4,111 MacDermid Inc. 206 4,110 Amylin Pharmaceuticals Inc./1/ 247 4,105 Lattice Semiconductor Corp./1/ 657 4,087 Stillwater Mining Co./1/ 681 4,086 Pegasus Solutions Inc./1/ 386 4,072 TMP Worldwide Inc./1/ 452 4,068 Parkway Properties Inc. 120 4,061 NBT Bancorp Inc. 235 4,058 Equity Inns Inc. 652 4,042 Nautica Enterprises Inc./1/ 388 4,035 Intertrust Technologies Corp./1/ 1,262 4,026 Adaptec Inc./1/ 912 4,022 Pathmark Stores Inc./1/ 439 4,017 Alderwoods Group Inc./1/ 615 3,997 American Management Systems Inc./1/ 314 3,997 Manitowoc Co. Inc. (The) 146 3,993 Penn Virginia Corp. 123 3,985 Marcus Corp. 304 3,982 CONMED Corp./1/ 197 3,970 Jakks Pacific Inc./1/ 356 3,958 SkyWest Inc. 302 3,956 Flagstar Bancorp Inc. 191 3,954 Universal Forest Products Inc. 210 3,952 DIMON Inc. 633 3,950 Ascential Software Corp./1/ 2,123 3,945 Local Financial Corp./1/ 285 3,936 Raytech Corp./1/ 645 3,928 Carpenter Technology Corp. 302 3,926 Interland Inc./1/ 1,906 3,907 Farmer Brothers Co. 12 3,900 Hanger Orthopedic Group Inc./1/ 245 3,895 Heartland Express Inc./1/ 207 3,879 Caraustar Industries Inc. 413 3,862 NACCO Industries Inc. 97 3,861 Gardner Denver Inc./1/ 245 3,849 United Therapeutics Inc./1/ 234 3,849 86 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Station Casinos Inc./1/ 226 $ 3,844 Kmart Corp./1/ 7,801 3,822 Nordson Corp. 161 3,822 Scripps (E.W.) Co. 55 3,811 Irwin Financial Corp. 224 3,808 PanAmSat Corp./1/ 219 3,800 Peoples Holding Co. 93 3,790 Sandy Spring Bancorp Inc. 123 3,788 Russ Berrie & Co. Inc. 126 3,781 Sybron Dental Specialties Inc./1/ 270 3,777 United Fire & Casualty Co. 111 3,772 Analogic Corp. 90 3,770 Watsco Inc. 263 3,761 Investors Real Estate Trust 355 3,759 Charter Communications Inc./1/ 2,016 3,750 Central Garden & Pet Co./1/ 219 3,747 Sun Communities Inc. 102 3,743 Capital City Bank Group Inc. 113 3,736 Brinker International Inc./1/ 144 3,730 CT Communications Inc. 257 3,726 Heidrick & Struggles International Inc./1/ 245 3,722 Swift Energy Co./1/ 357 3,713 Independent Bank Corp. (Michigan) 112 3,707 Magna Entertainment Corp. "A"/1/ 681 3,703 Woodward Governor Co. 78 3,697 Fleetwood Enterprises Inc. 548 3,694 Range Resources Corp./1/ 788 3,688 Playtex Products Inc./1/ 433 3,685 Cleveland-Cliffs Inc. 153 3,680 URS Corp./1/ 222 3,679 Equifax Inc. 169 3,674 Stage Stores Inc./1/ 169 3,666 Denbury Resources Inc./1/ 360 3,661 Medarex Inc./1/ 1,092 3,658 United Auto Group Inc./1/ 261 3,657 West Coast Bancorp 241 3,649 Owens & Minor Inc. 255 3,644 Keystone Property Trust 217 3,611 Novellus Systems Inc./1/ 172 3,579 Fisher Communications Inc. 76 3,572 Applera Corp. - Applied Biosystems Group 195 3,568 Medford Bancorp Inc. 102 3,565 Teledyne Technologies Inc./1/ 196 3,559 Watts Industries Inc. "A" 217 3,559 Meritage Corp./1/ 100 3,545 Novastar Financial Inc. 162 3,540 Daisytek International Corp./1/ 272 3,536 Chesapeake Corp. 236 3,526 Myers Industries Inc. 281 3,524 Handleman Co./1/ 385 3,523 RTI International Metals Inc./1/ 335 3,517 Advanta Corp. "B" 339 3,502 IBERIABANK Corp. 93 3,500 Corporate Office Properties Trust 258 3,496 Great Lakes REIT Inc. 200 3,494 DuPont Photomasks Inc./1/ 152 3,463 Skyworks Solutions Inc./1/ 759 3,438 3TEC Energy Corp./1/ 240 3,432 Coachmen Industries Inc. 228 3,422 Arrow International Inc. 106 3,410 Bank Mutual Corp. 168 3,400 Stoneridge Inc./1/ 200 3,400 AMC Entertainment Inc./1/ 457 3,382 Standard Microsystems Corp./1/ 221 3,377 PTEK Holdings Inc./1/ 723 3,369 Pioneer-Standard Electronics Inc. 465 3,367 Sola International Inc./1/ 335 3,367 National Western Life Insurance Company "A"/1/ 33 3,366 Innkeepers USA Trust 421 3,364 Input/Output Inc./1/ 699 3,348 Troy Financial Corp. 128 3,342 Bank of Granite Corp. 185 3,330 Urstadt Biddle Properties Inc. "A" 281 3,330 Churchill Downs Inc. 91 3,321 MCG Capital Corp. 252 3,321 Century Business Services Inc./1/ 1,252 3,318 Second Bancorp Inc. 124 3,315 NCO Group Inc./1/ 291 3,314 Proxim Corp. "A"/1/ 1,892 3,311 Schedules of Investments 87 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Parametric Technology Corp./1/ 1,837 $ 3,307 SOURCECORP Inc./1/ 162 3,306 Robbins & Myers Inc. 177 3,301 Arris Group Inc./1/ 890 3,293 Banner Corp. 163 3,293 XM Satellite Radio Holdings Inc. "A"/1/ 844 3,292 Alliance Data Systems Corp./1/ 217 3,288 Centex Construction Products Inc. 92 3,284 First Indiana Corp. 178 3,263 Exelixis Inc./1/ 655 3,242 Gene Logic Inc./1/ 417 3,240 First Essex Bancorp Inc. 98 3,239 Alfa Corp. 264 3,234 Saul Centers Inc. 139 3,228 Alexion Pharmaceuticals Inc./1/ 278 3,222 CIMA Labs Inc./1/ 128 3,219 UniFirst Corp. 135 3,218 LaSalle Hotel Properties 257 3,212 FBL Financial Group Inc. "A" 174 3,210 Sterling Financial Corp. (Washington)/1/ 177 3,209 Old Second Bancorp Inc. 84 3,207 Unova Inc./1/ 648 3,188 Standex International Corp. 157 3,184 RailAmerica Inc./1/ 439 3,183 First Republic Bank/1/ 146 3,175 1st Source Corp. 225 3,170 Nabi Biopharmaceuticals/1/ 584 3,167 ExpressJet Holdings Inc./1/ 344 3,165 Circuit City Stores Inc. - CarMax Group/1/ 197 3,162 Firstfed America Bancorp Inc. 131 3,156 Park Electrochemical Corp. 188 3,140 Pharmacopeia Inc./1/ 354 3,136 Southern Peru Copper Corp. 228 3,126 Port Financial Corp. 78 3,121 Jabil Circuit Inc./1/ 210 3,104 Central Vermont Public Service Corp. 176 3,103 Farmers Capital Bank Corp. 93 3,103 Steel Dynamics Inc./1/ 237 3,102 CNA Surety Corp. 234 3,089 CFS Bancorp Inc. 219 3,088 Pope & Talbot Inc. 240 3,084 Entercom Communications Corp./1/ 65 3,079 MTS Systems Corp. 321 3,040 Zenith National Insurance Corp. 115 3,038 MGE Energy Inc. 118 3,028 Capstead Mortgage Corp. 146 3,018 Riggs National Corp. 211 3,015 Calgon Carbon Corp. 521 3,011 Cypress Semiconductor Corp./1/ 458 3,004 CCBT Financial Companies Inc. 114 2,983 O'Reilly Automotive Inc./1/ 104 2,976 ProQuest Co./1/ 98 2,974 Newport Corp./1/ 263 2,967 4Kids Entertainment Inc./1/ 125 2,966 Affiliated Managers Group Inc./1/ 66 2,944 Black & Decker Corp. 70 2,935 Consolidated Graphics Inc./1/ 167 2,931 Emulex Corp./1/ 260 2,928 Juniper Networks Inc./1/ 606 2,909 Aviall Inc./1/ 285 2,904 State Auto Financial Corp. 191 2,892 Black Box Corp./1/ 87 2,888 Standard Commercial Corp. 171 2,863 Parker Drilling Co./1/ 1,299 2,858 BancFirst Corp. 58 2,855 Lithia Motors Inc. "A"/1/ 167 2,841 OMNOVA Solutions Inc./1/ 618 2,837 Tesoro Petroleum Corp./1/ 1,013 2,836 Octel Corp. 150 2,833 Gentiva Health Services Inc. 342 2,828 Gibraltar Steel Corp. 127 2,827 Union Bankshares Corp. 113 2,817 Valmont Industries Inc. 120 2,802 Dura Automotive Systems Inc./1/ 228 2,793 Cash America International Inc. 340 2,785 Kelly Services Inc. "A" 128 2,774 Anaren Microwave Inc./1/ 337 2,770 Genlyte Group Inc. (The)/1/ 78 2,765 88 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Seacoast Banking Corp. of Florida 144 $ 2,762 Steak n Shake Company (The)/1/ 251 2,761 Interface Inc. "A" 697 2,760 Quaker City Bancorp Inc./1/ 83 2,753 Flushing Financial Corp. 165 2,752 Skyline Corp. 101 2,746 Maxygen Inc./1/ 442 2,745 Angelica Corp. 127 2,729 TBC Corp./1/ 263 2,727 CKE Restaurant Inc./1/ 681 2,724 Graphic Packaging International Corp./1/ 341 2,721 Triad Guaranty Inc./1/ 78 2,716 St. Francis Capital Corp. 118 2,715 Ameron International Corp. 55 2,705 Buckeye Technologies Inc./1/ 368 2,705 German American Bancorp 159 2,703 Kadant Inc./1/ 200 2,700 American Physicians Capital Inc./1/ 160 2,698 Enterasys Networks Inc./1/ 2,074 2,696 First Bancorp North Carolina 109 2,693 Genesee & Wyoming Inc. "A"/1/ 121 2,692 Valhi Inc. 274 2,691 Bio-Technology General Corp./1/ 904 2,676 Boykin Lodging Co. 278 2,674 Pinnacle Entertainment Inc./1/ 366 2,672 Hawthorne Financial Corp./1/ 101 2,666 Lightbridge Inc./1/ 394 2,660 Ultratech Stepper Inc./1/ 328 2,654 Ariba Inc./1/ 1,942 2,622 Rock-Tenn Co. "A" 170 2,621 Finish Line Inc. (The)/1/ 290 2,616 Nuevo Energy Co./1/ 239 2,605 DoubleClick Inc./1/ 505 2,596 Oceaneering International Inc./1/ 102 2,596 First Place Financial Corp. 185 2,586 JetBlue Airways Corp./1/ 64 2,581 Regal Entertainment Group "A"/1/ 145 2,581 Clark/Bardes Inc./1/ 145 2,580 Camden National Corp. 99 2,574 Oil States International Inc./1/ 256 2,560 Great Atlantic & Pacific Tea Co./1/ 305 2,556 Kirby Corp./1/ 113 2,556 Insurance Auto Auctions Inc./1/ 169 2,554 Polycom Inc./1/ 376 2,553 Cirrus Logic Inc./1/ 1,000 2,550 SWS Group Inc. 207 2,536 ManTech International Corp. "A"/1/ 108 2,534 Lin TV Corp. "A"/1/ 102 2,524 Stepan Co. 94 2,524 Astec Industries Inc./1/ 232 2,501 Tanox Inc./1/ 238 2,499 City Holding Co. 97 2,497 Allied Waste Industries Inc./1/ 339 2,492 BSB Bancorp Inc. 125 2,489 CSS Industries Inc./1/ 69 2,488 Allegiant Bancorp Inc. 153 2,486 Holly Corp. 146 2,479 Allen Telecom Inc./1/ 464 2,478 Barnes Group Inc. 123 2,471 CUNO Inc./1/ 80 2,468 U.S. Industries Inc./1/ 1,049 2,465 Citizens First Bancorp Inc. 137 2,462 Praecis Pharmaceuticals Inc./1/ 823 2,461 Footstar Inc./1/ 315 2,457 Insignia Financial Group Inc./1/ 313 2,457 Talk America Holdings Inc./1/ 1,058 2,455 Blair Corp. 120 2,454 Silicon Graphics Inc./1/ 2,987 2,449 PennFed Financial Services Inc. 89 2,447 Correctional Properties Trust 106 2,438 Tenneco Automotive Inc./1/ 575 2,421 SJW Corp. 31 2,418 AmeriCredit Corp./1/ 299 2,413 Terayon Communication Systems Inc./1/ 1,037 2,406 Conexant Systems Inc./1/ 2,163 2,401 Pericom Semiconductor Corp./1/ 278 2,396 HEICO Corp. 211 2,389 Avigen Inc./1/ 301 2,387 Pediatrix Medical Group Inc./1/ 77 2,386 USG Corp./1/ 595 2,380 Schedules of Investments 89 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Ramco-Gershenson Properties Trust 121 $ 2,379 United Online Inc./1/ 247 2,369 FNB Corp. 77 2,365 American Tower Corp./1/ 1,485 2,361 Sterling Bancorp 89 2,361 Centennial Bancorp 271 2,352 Oregon Steel Mills Inc./1/ 384 2,350 Maxwell Shoe Co. Inc. "A"/1/ 207 2,349 Comstock Resources Inc./1/ 339 2,339 Jeffries Group Inc. 61 2,328 Bassett Furniture Industries Inc. 169 2,327 Dionex Corp./1/ 91 2,326 NeoPharm Inc./1/ 165 2,326 Sonic Automotive Inc./1/ 131 2,319 Zebra Technologies Corp. "A"/1/ 44 2,318 Cell Therapeutics Inc./1/ 525 2,310 Ryerson Tull Inc. 359 2,308 Energy Partners Ltd./1/ 282 2,295 Deltic Timber Corp. 104 2,286 ImClone Systems Inc./1/ 293 2,285 GBC Bancorp 117 2,272 ValueClick Inc./1/ 1,042 2,272 Movado Group Inc. 139 2,259 Baldwin & Lyons Inc. "B" 103 2,252 SEMCO Energy Inc. 289 2,248 RehabCare Group Inc./1/ 97 2,244 Pilgrim's Pride Corp. "B" 241 2,241 Littelfuse Inc./1/ 133 2,237 Neuberger Berman Inc. 83 2,237 Building Materials Holdings Corp./1/ 191 2,235 Waste Connections Inc./1/ 64 2,227 Ticketmaster "B"/1/ 146 2,226 Stamps.com Inc./1/ 525 2,221 DSP Group Inc./1/ 138 2,216 Columbia Banking System Inc./1/ 200 2,214 Lufkin Industries Inc. 90 2,214 Champion Enterprises Inc./1/ 747 2,196 Navigant International Inc./1/ 209 2,194 Oxford Industries Inc. 100 2,190 Berkshire Hills Bancorp Inc. 93 2,185 Lexicon Genetics Inc./1/ 544 2,181 Infonet Services Corp. "B"/1/ 970 2,173 NBC Capital Corp. 86 2,159 Golden Telecom Inc./1/ 179 2,157 Encore Acquisition Co./1/ 130 2,138 Hollinger International Inc. 235 2,136 Atmel Corp./1/ 2,012 2,133 GlobeSpanVirata Inc./1/ 901 2,126 PAREXEL International Corp./1/ 250 2,125 Mobile Mini Inc./1/ 164 2,124 K2 Inc./1/ 267 2,109 Compucom Systems Inc./1/ 362 2,085 Keystone Automotive Industries Inc./1/ 126 2,079 Sterling Financial Corp. (Pennsylvania) 89 2,076 Spartech Corp. 98 2,074 Cole National Corp./1/ 165 2,071 NDCHealth Corp. 133 2,068 Sealed Air Corp./1/ 122 2,061 Osmonics Inc./1/ 172 2,047 Westcorp Inc. 102 2,040 Wabash National Corp. 376 2,034 Advanced Digital Information Corp./1/ 423 2,030 Safeguard Scientifics Inc./1/ 1,826 2,027 Electro Rent Corp./1/ 209 2,023 ITLA Capital Corp./1/ 67 2,023 CSK Auto Corp./1/ 162 2,022 Tetra Technologies Inc./1/ 100 2,015 Lawson Products Inc. 69 2,011 Cooper Cameron Corp./1/ 48 2,004 Hancock Fabrics Inc. 124 2,003 Monaco Coach Corp./1/ 100 2,003 National Presto Industries Inc. 69 1,993 Steris Corp./1/ 80 1,993 Midland Co. (The) 118 1,986 International Rectifier Corp./1/ 127 1,984 CIRCOR International Inc. 148 1,983 Arctic Cat Inc. 142 1,982 Citrix Systems Inc./1/ 328 1,978 Instinet Group Inc. 638 1,978 Penn Engineering & Manufacturing Corp. 176 1,971 90 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Buckle Inc. (The)/1/ 98 $ 1,970 Immunogen Inc./1/ 607 1,967 Associated Estates Realty Corp. 242 1,960 Brush Engineered Materials Inc./1/ 251 1,958 Agile Software Corp./1/ 305 1,955 Friedman's Inc. 251 1,953 West Marine Inc./1/ 153 1,945 Covenant Transport Inc. "A"/1/ 111 1,942 Universal American Financial Corp./1/ 396 1,941 Prime Medical Service Inc./1/ 210 1,940 REMEC Inc./1/ 569 1,940 Cascade Corp./1/ 138 1,939 ADVO Inc./1/ 61 1,937 Coastal Bancorp Inc. 70 1,935 American Italian Pasta Co. "A"/1/ 54 1,927 MainSource Financial Group Inc. 81 1,927 Avatar Holdings/1/ 80 1,925 Superior Financial Corp. 102 1,918 VIB Corp./1/ 128 1,916 Gray Television Inc. "A" 142 1,910 Glacier Bancorp Inc. 83 1,891 Southwest Bancorp Inc. 75 1,886 UAL Corp./1/ 879 1,881 Resource America Inc. "A" 235 1,880 J&J Snack Foods Corp./1/ 51 1,879 World Fuel Services Corp. 97 1,872 Boston Communications Group Inc./1/ 181 1,868 Rayovac Corp./1/ 153 1,867 ABC Bancorp 145 1,859 Casella Waste Systems Inc. "A"/1/ 289 1,858 Steven Madden Ltd./1/ 129 1,858 NL Industries Inc. 128 1,857 Healthcare Services Group Inc./1/ 136 1,855 AAR Corp. 390 1,852 Airgas Inc./1/ 141 1,851 Luby's Inc./1/ 376 1,850 Three Rivers Bancorp Inc. 115 1,840 Material Sciences Corp./1/ 151 1,838 Integrated Electrical Services Inc./1/ 491 1,836 RSA Security Inc./1/ 546 1,835 Tweeter Home Entertainment Group Inc./1/ 264 1,822 Alliance Imaging Inc./1/ 152 1,818 Theragenics Corp./1/ 413 1,817 Ducommun Inc./1/ 103 1,814 Macatawa Bank Corp. 98 1,806 Prosperity Bancshares Inc. 106 1,805 Volt Information Sciences Inc./1/ 119 1,803 Winston Hotels Inc. 249 1,803 X-Rite Inc. 233 1,801 Vail Resorts Inc./1/ 127 1,798 Dave & Buster's Inc./1/ 160 1,794 LSB Bancshares Inc. 109 1,792 Roanoke Electric Steel Corp. 165 1,790 Raindance Communications Inc./1/ 578 1,786 Quiksilver Inc./1/ 79 1,785 SICOR Inc./1/ 117 1,780 GameStop Corp./1/ 87 1,779 Butler Manufacturing Co. 82 1,771 AMCOL International Corp. 316 1,770 R&G Financial Corp. "B" 81 1,767 Santander BanCorp 127 1,753 NS Group Inc./1/ 295 1,749 Financial Industries Corp. 114 1,740 Guilford Pharmaceuticals Inc./1/ 357 1,728 UnitedGlobalCom Inc. "A"/1/ 1,053 1,727 Comfort Systems USA Inc./1/ 567 1,724 Department 56 Inc./1/ 165 1,724 Wintrust Financial Corp. 60 1,719 BE Aerospace Inc./1/ 360 1,714 Computer Horizons Corp./1/ 460 1,711 Bostonfed Bancorp Inc. 57 1,709 E.piphany Inc./1/ 473 1,703 Haverty Furniture Companies Inc. 136 1,700 AmeriPath Inc./1/ 114 1,699 Argosy Gaming Co./1/ 74 1,699 Peoples Bancorp Inc. 66 1,696 Audiovox Corp. "A"/1/ 242 1,694 CB Bancshares Inc. 48 1,686 Great American Financial Resources Inc. 107 1,664 Ocwen Financial Corp./1/ 573 1,662 Nature's Sunshine Products Inc. 153 1,657 Schedules of Investments 91 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Beverly Enterprises Inc./1/ 683 $ 1,653 Parkvale Financial Corp. 70 1,648 Massbank Corp. 55 1,647 Stratex Networks Inc./1/ 1,283 1,641 LTC Properties Inc. 202 1,640 Microtune Inc./1/ 676 1,629 International Specialty Products Inc./1/ 168 1,628 Vignette Corp./1/ 2,032 1,628 Pomeroy Computer Resources/1/ 165 1,627 POZEN Inc./1/ 321 1,627 Concord Camera Corp./1/ 349 1,626 EDO Corp. 72 1,614 USB Holding Co. Inc. 87 1,603 Arena Pharmaceuticals Inc./1/ 286 1,602 AMERCO/1/ 159 1,600 MSC Industrial Direct Co. Inc. "A"/1/ 150 1,593 ArQule Inc./1/ 309 1,591 Kansas City Life Insurance Co. 42 1,589 Group 1 Automotive Inc./1/ 71 1,587 Charles River Associates Inc./1/ 95 1,577 Sauer-Danfoss Inc. 175 1,575 Systems & Computer Technology Corp./1/ 225 1,575 Intermet Corp. 327 1,573 Water Pik Technologies Inc./1/ 155 1,573 Rational Software Corp./1/ 364 1,572 State Bancorp Inc. 88 1,562 First Community Bancshares Inc. 53 1,561 BKF Capital Group Inc./1/ 74 1,560 New Focus Inc./1/ 575 1,552 Information Resources Inc./1/ 418 1,551 Mission West Properties Inc. 140 1,551 Esperion Therapeutics Inc./1/ 271 1,550 Applica Inc./1/ 292 1,548 U.S. Concrete Inc./1/ 293 1,538 Vans Inc./1/ 270 1,536 Cornell Cos Inc./1/ 193 1,534 Oneida Ltd. 110 1,532 Ingles Markets Inc. "A" 143 1,530 Brookstone Inc./1/ 124 1,525 PC-Tel Inc./1/ 292 1,521 Watson Wyatt & Co. Holdings/1/ 76 1,520 Three-Five Systems Inc./1/ 326 1,513 William Lyon Homes Inc./1/ 66 1,512 Tollgrade Communications Inc./1/ 192 1,500 Anteon International Corp./1/ 55 1,495 Macromedia Inc./1/ 192 1,484 Starrett (LS) Co. "A" 97 1,482 SPSS Inc./1/ 128 1,481 Sitel Corp./1/ 845 1,479 Hypercom Corp./1/ 516 1,476 Pacific Northwest Bancorp 54 1,470 Alliance Gaming Corp./1/ 95 1,469 Alliance Semiconductor Corp./1/ 386 1,467 Cascade Natural Gas Corp. 74 1,458 Sepracor Inc./1/ 278 1,457 SoundView Technology Group Inc./1/ 1,120 1,456 American National Bankshares Inc. 53 1,455 K-Swiss Inc. "A" 68 1,453 SpeedFam-IPEC Inc./1/ 391 1,451 Del Monte Foods Co./1/ 177 1,446 Yardville National Bancorp 85 1,444 Interwoven Inc./1/ 717 1,440 Banc Corp. (The)/1/ 185 1,432 Ligand Pharmaceuticals Inc. "B"/1/ 210 1,428 Lydall Inc./1/ 121 1,428 Nu Horizons Electronics Corp./1/ 237 1,422 Wilsons The Leather Experts Inc./1/ 199 1,417 Standard Register Co. (The) 59 1,416 Sun Bancorp Inc. 63 1,416 Verity Inc./1/ 142 1,413 SureBeam Corporation "A"/1/ 784 1,411 Republic Bancorp Inc. "A" 125 1,406 OceanFirst Financial Corp. 68 1,401 Sports Authority Inc. (The)/1/ 234 1,397 Steinway Musical Instruments Inc./1/ 91 1,397 Glimcher Realty Trust 74 1,387 Unitil Corp. 51 1,385 CuraGen Corp./1/ 328 1,384 Gladstone Capital Corp. 82 1,384 Republic Bancshares Inc./1/ 71 1,380 Alico Inc. 48 1,366 92 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Register.com/1/ 448 $ 1,357 FSI International Inc./1/ 442 1,353 Reliant Resources Inc./1/ 773 1,353 TransMontaigne Inc./1/ 270 1,345 Omega Healthcare Investors Inc./1/ 232 1,327 Acadia Realty Trust 179 1,325 National Health Realty Inc. 84 1,324 Isle of Capri Casinos Inc./1/ 79 1,318 Crown Media Holdings Inc./1/ 375 1,312 Bombay Co. Inc. (The)/1/ 484 1,307 Wellsford Real Properties Inc./1/ 76 1,307 Monro Muffler Brake Inc./1/ 73 1,304 Patterson-UTI Energy Inc./1/ 51 1,301 Powell Industries Inc./1/ 69 1,297 Seaboard Corp. 6 1,290 First Defiance Financial Corp. 75 1,288 American Medical Security Group Inc./1/ 91 1,287 Granite State Bankshares Inc. 38 1,284 Papa John's International Inc./1/ 44 1,282 First Oak Brook Bancshares "A" 43 1,278 Sizeler Property Investors Inc. 127 1,278 Vesta Insurance Group 511 1,278 MCSi Inc./1/ 257 1,272 Warwick Community Bancorp 47 1,269 Woodhead Industries Inc. 115 1,267 Getty Images Inc./1/ 63 1,264 FuelCell Energy Inc./1/ 200 1,260 Modtech Holdings Inc./1/ 126 1,260 WSFS Financial Corp. 45 1,260 SonicWALL Inc./1/ 457 1,257 TriQuint Semiconductor Inc./1/ 354 1,250 Applied Films Corporation/1/ 114 1,247 Avenue A Inc./1/ 499 1,247 Rex Stores Corp./1/ 121 1,246 VCA Antech Inc./1/ 101 1,246 Lone Star Technologies Inc./1/ 105 1,244 Tompkins Trustco Inc. 29 1,244 SBS Technologies Inc./1/ 173 1,239 Foamex International Inc./1/ 225 1,237 Harris Interactive Inc./1/ 537 1,235 Keynote Systems Inc./1/ 188 1,231 Harvest Natural Resources Inc./1/ 226 1,227 Century Aluminum Co. 176 1,225 Align Technology Inc./1/ 442 1,219 Liberate Technologies/1/ 781 1,218 Neose Technologies Inc./1/ 157 1,218 Aeropostale Inc./1/ 79 1,217 7-Eleven Inc./1/ 142 1,217 Integrated Silicon Solution Inc./1/ 406 1,210 Charter Financial Corp. 43 1,207 Summit Bancshares Inc. 57 1,200 Zoran Corp./1/ 109 1,199 Quaker Fabric Corp./1/ 190 1,195 Terra Industries Inc./1/ 645 1,193 Amkor Technology Inc./1/ 500 1,190 deCODE genetics Inc./1/ 539 1,186 Rent-Way Inc./1/ 395 1,185 TIBCO Software Inc./1/ 313 1,174 Sun Bancorp Inc. "B"/1/ 88 1,167 Encore Wire Corp./1/ 132 1,162 Bush Industries Inc. "A" 144 1,161 Metris Companies Inc. 500 1,155 Milacron Inc. 256 1,155 Navigators Group Inc./1/ 57 1,155 School Specialty Inc./1/ 46 1,150 Aspect Communications Corp./1/ 779 1,145 Chattem Inc./1/ 28 1,143 Rent-A-Center Inc./1/ 22 1,143 World Acceptance Corp./1/ 144 1,140 Turnstone Systems Inc./1/ 513 1,139 Young Broadcasting Inc. "A"/1/ 131 1,136 ProxyMed Inc./1/ 75 1,135 Zomax Inc./1/ 291 1,135 Vicor Corp./1/ 157 1,123 Houston Exploration Co./1/ 36 1,121 C-COR.net Corp./1/ 302 1,120 Goody's Family Clothing Inc./1/ 237 1,119 Manugistics Group Inc./1/ 401 1,119 Rainbow Technologies Inc./1/ 394 1,119 FPIC Insurance Group Inc./1/ 127 1,118 Schedules of Investments 93 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Sykes Enterprises Inc./1/ 265 $ 1,116 Transaction Systems Architects Inc. "A"/1/ 180 1,116 National Healthcare Corp./1/ 62 1,113 Equity One Inc. 84 1,109 Power-One Inc./1/ 372 1,109 i2 Technologies Inc./1/ 2,131 1,108 Finlay Enterprises Inc./1/ 73 1,101 MemberWorks Inc./1/ 63 1,097 LTX Corp./1/ 240 1,094 Sylvan Learning Systems Inc./1/ 80 1,094 Neurogen Corp./1/ 136 1,092 eFunds Corp./1/ 116 1,088 Exar Corp./1/ 94 1,086 CNET Networks Inc./1/ 986 1,085 Titan Corp. (The)/1/ 113 1,085 Numerical Technologies Inc./1/ 372 1,079 IGEN International Inc./1/ 36 1,076 Alamo Group Inc. 87 1,075 Genzyme Corp. - Biosurgery Division/1/ 575 1,075 PICO Holdings Inc./1/ 97 1,067 Standard Motor Products Inc. 98 1,059 Aaron Rents Inc. "B" 46 1,058 Northwest Pipe Co./1/ 59 1,056 Bell Microproducts Inc./1/ 251 1,049 Sirius Satellite Radio Inc./1/ 1,048 1,048 Deb Shops Inc. 42 1,047 Meridian Resource Corp. (The)/1/ 496 1,047 PriceSmart Inc./1/ 52 1,040 Keane Inc./1/ 154 1,039 New Century Financial Corp. 44 1,030 Quanta Services Inc./1/ 495 1,030 MedCath Corp./1/ 91 1,028 Wind River Systems Inc./1/ 319 1,027 Drew Industries Inc./1/ 66 1,026 Grace (W.R.) & Co./1/ 641 1,026 Vitesse Semiconductor Corp./1/ 1,504 1,023 Illumina Inc./1/ 296 1,018 Schnitzer Steel Industries Inc. "A" 56 1,014 Westfield Financial Inc. 67 1,011 Interpool Inc. 84 1,010 Pure Resources Inc./1/ 45 1,008 kForce.com Inc./1/ 323 1,005 American Eagle Outfitters Inc./1/ 83 1,001 First National Corp. 36 994 Res-Care Inc./1/ 200 992 Nelson (Thomas) Inc./1/ 112 986 Penn Traffic Company (The)/1/ 151 986 Neoforma Inc./1/ 104 981 Touch America Holdings Inc./1/ 1,583 981 Partners Trust Financial Group Inc. 70 978 CompuCredit Corp./1/ 183 970 Collins & Aikman Corp./1/ 269 966 Remedy Temp Inc./1/ 77 965 Donnelly Corp. 37 959 Remington Oil & Gas Corp./1/ 68 959 Trico Marine Services Inc./1/ 377 958 MasTec Inc./1/ 296 956 Shoe Carnival Inc./1/ 67 955 Asbury Automotive Group Inc./1/ 109 954 Advanced Medical Optics Inc./1/ 100 951 Magnetek Inc./1/ 296 947 Duane Reade Inc./1/ 59 944 Computer Network Technology Corp./1/ 186 934 SCM Microsystems Inc./1/ 236 932 DVI Inc./1/ 194 931 Ladish Co. Inc./1/ 150 930 MarineMax Inc./1/ 102 919 Speedway Motorsports Inc./1/ 39 918 Netro Corp./1/ 447 916 Royal Bancshares of Pennsylvania "A" 50 915 Red Hat Inc./1/ 192 912 Columbus McKinnon Corp./1/ 173 910 First of Long Island Corp. 27 898 Diversa Corp./1/ 105 896 Petroleum Helicopters Inc./1/ 34 894 Arden Group Inc. "A"/1/ 16 888 Mykrolis Corp./1/ 144 886 Salton Inc./1/ 104 885 94 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Chesapeake Energy Corp. 134 $ 884 Openwave Systems Inc./1/ 1,421 881 Dover Motorsports Inc. 220 880 Onyx Pharmaceuticals Inc./1/ 204 873 Oplink Communications Inc./1/ 1,505 873 Olin Corp. 53 870 Per-Se Technologies Inc./1/ 88 869 Avanex Corp./1/ 632 866 United National Bancorp 42 864 Fairchild Semiconductor International Corp. "A"/1/ 91 862 Independence Holding Co. 43 860 Mestek Inc./1/ 47 858 Avocent Corp./1/ 64 856 Staten Island Bancorp Inc. 49 853 Read-Rite Corp./1/ 1,639 852 ITXC Corp./1/ 341 846 Talbots Inc. (The) 30 840 Trans World Entertainment Corp./1/ 266 838 Medical Staffing Network Holdings Inc./1/ 55 834 Regent Communications Inc./1/ 164 833 Sequenom Inc./1/ 541 833 Cascade Bancorp 61 832 Kendle International Inc./1/ 123 824 LodgeNet Entertainment Corp./1/ 107 820 Midwest Express Holdings Inc./1/ 204 816 Applied Molecular Evolution Inc./1/ 208 815 Center Trust Inc. 140 812 Kenneth Cole Productions "A"/1/ 40 812 Stanley Furniture Co. Inc./1/ 38 807 Wireless Facilities Inc./1/ 181 802 Proton Energy Systems Inc./1/ 378 801 Flowserve Corp./1/ 80 800 MatrixOne Inc./1/ 182 790 Gulf Island Fabrication Inc./1/ 67 788 Primedia Inc./1/ 555 771 WatchGuard Technologies Inc./1/ 175 770 Tremont Corp. 24 768 Discovery Partners International Inc./1/ 240 766 SuperGen Inc./1/ 443 766 Answerthink Inc./1/ 526 763 Wyndham International Inc. "A"/1/ 2,235 760 iGate Corp./1/ 277 753 SeaChange International Inc./1/ 109 749 Genesco Inc./1/ 54 745 Cherokee Inc./1/ 46 742 Provident Bancorp Inc. 26 740 MEMC Electronics Materials Inc./1/ 222 737 Stein Mart Inc./1/ 126 736 Vical Inc./1/ 318 735 West Pharmaceutical Services Inc. 34 728 Price Legacy Corporation/1/ 247 724 U.S. Xpress Enterprises Inc. "A"/1/ 74 724 Smart & Final Inc./1/ 170 722 Willow Grove Bancorp Inc. 61 720 Culp Inc./1/ 84 714 Championship Auto Racing Teams Inc./1/ 189 713 Trimble Navigation Ltd./1/ 71 703 Castle (A.M.) & Co. 104 702 MAXIMUS Inc./1/ 31 694 Guess ? Inc./1/ 161 691 Hollywood Casino Corp. "A"/1/ 57 689 Quicksilver Resources Inc./1/ 38 684 TriPath Imaging Inc./1/ 304 684 TriCo Bancshares 27 683 First Consulting Group Inc./1/ 125 677 Mesaba Holdings Inc./1/ 124 675 Net2Phone Inc./1/ 286 675 Aether Systems Inc./1/ 249 667 Artesyn Technologies Inc./1/ 441 666 Maui Land & Pineapple Co. Inc./1/ 37 666 Caliper Technologies Corp./1/ 158 662 Palm Harbor Homes Inc./1/ 57 662 Finisar Corp./1/ 957 660 Drugstore.com Inc./1/ 394 658 DiamondCluster International Inc. "A"/1/ 199 649 Eon Labs Inc./1/ 30 647 CPB Inc. 14 646 Schedules of Investments 95 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Technical Olympic USA Inc./1/ 42 $ 642 LSI Industries Inc. 63 639 NetScout Systems Inc./1/ 174 637 Tasty Baking Company 50 637 RealNetworks Inc./1/ 176 635 Hexcel Corp./1/ 255 632 Transmeta Corp./1/ 645 626 Sipex Corp./1/ 365 620 Seminis Inc. "A"/1/ 211 618 Atlas Air Worldwide Holdings Inc./1/ 256 617 Sapient Corp./1/ 597 615 CTS Corp. 133 612 Global Industries Ltd./1/ 147 607 Coldwater Creek Inc./1/ 46 606 Hall Kinion & Associates Inc./1/ 101 606 IMCO Recycling Inc./1/ 98 593 LeCroy Corp./1/ 66 591 Allegiance Telecom Inc./1/ 711 590 LendingTree Inc./1/ 40 590 NetRatings Inc./1/ 101 590 Ceres Group Inc./1/ 304 587 Dover Downs Gaming & Entertainment Inc. 72 586 Fleming Companies Inc. 117 585 Nash Finch Co. 43 585 Value Line Inc. 15 585 Credit Acceptance Corp./1/ 71 582 California First National Bancorp 43 581 Magma Design Automation Inc./1/ 65 580 Ciphergen Biosystems Inc./1/ 193 579 Transcontinental Realty Investments Inc./1/ 35 577 Pacific Union Bank/1/ 51 572 3D Systems Corp./1/ 87 572 ABIOMED Inc./1/ 172 568 Community Banks Inc. 21 564 Key Energy Services Inc./1/ 71 559 Century Bancorp Inc. "A" 21 557 Richardson Electronics Ltd. 84 553 ADE Corp./1/ 131 552 Varian Inc./1/ 20 552 Sturm Ruger & Co. Inc. 45 549 Friedman Billings Ramsey Group Inc. "A"/1/ 54 547 Tropical Sportswear International Corp./1/ 41 532 Midas Inc./1/ 106 530 Mail-Well Inc./1/ 504 524 StorageNetworks Inc./1/ 419 524 webMethods Inc./1/ 108 522 Intertan Inc./1/ 74 517 Michael Baker Corp./1/ 50 515 MetaSolv Inc./1/ 335 513 IMPCO Technologies Inc./1/ 141 508 Newpark Resources Inc./1/ 128 507 Johnson Outdoors Inc. "A"/1/ 47 494 Spinnaker Exploration Co./1/ 17 488 Carmike Cinemas Inc./1/ 27 486 Viasat Inc./1/ 77 485 EnergySouth Inc. 19 484 Union Acceptance Corp. "A"/1/ 120 484 Mattson Technology Inc./1/ 290 478 CTB International Corp./1/ 37 473 Protection One Inc./1/ 174 470 Specialty Laboratories Inc./1/ 51 469 Shop At Home Inc./1/ 200 468 Mid Atlantic Realty Trust 29 465 Bank of the Ozarks Inc. 20 458 S&T Bancorp Inc. 18 453 Right Management Consultants Inc./1/ 18 444 II-VI Inc./1/ 33 441 Linens 'N Things Inc./1/ 24 441 Aspen Technology Inc./1/ 146 438 TriZetto Group Inc. (The)/1/ 88 438 EMS Technologies Inc./1/ 42 431 Virco Manufacturing Corp. 44 427 Quovadx Inc./1/ 304 426 Paxson Communications Corp./1/ 190 418 Bel Fuse Inc. "B" 19 408 CompX International Inc. 44 408 Horizon Offshore Inc./1/ 97 408 Liquidmetal Technologies/1/ 51 407 96 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- MRV Communications Inc./1/ 479 $ 407 Paxar Corp./1/ 28 407 Apogee Enterprises Inc. 37 405 PC Connection Inc./1/ 98 398 American Pharmaceutical Partners Inc./1/ 24 392 EMC Insurance Group Inc. 27 385 Boston Private Financial Holdings Inc. 18 383 Trex Co. Inc./1/ 14 383 Perot Systems Corp. "A"/1/ 41 381 City Bank 13 376 Datastream Systems Inc./1/ 75 375 Orthodontic Centers of America Inc./1/ 35 374 SRA International Inc. "A"/1/ 13 372 Frontier Airlines Inc./1/ 74 361 DJ Orthopedics Inc./1/ 94 359 Vitria Technology Inc./1/ 460 359 Seattle Genetics Inc./1/ 111 357 Active Power Inc./1/ 266 356 Tennant Co. 11 356 Wet Seal Inc. "A"/1/ 35 350 Flow International Corp./1/ 108 349 RadiSys Corp./1/ 88 348 Merchants Bancshares Inc. 14 346 DHB Industries Inc./1/ 162 343 CCC Information Services Group Inc./1/ 26 340 ANADIGICS Inc./1/ 159 339 Molecular Devices Corp./1/ 27 338 Allscripts Healthcare Solutions Inc./1/ 118 337 IHOP Corp./1/ 14 337 Veeco Instruments Inc./1/ 31 335 Virginia Financial Group Inc. 11 330 Columbia Laboratories Inc./1/ 73 328 Homestore.com Inc./1/ 1,092 328 SONICblue Inc./1/ 1,367 328 Electro Scientific Industries Inc./1/ 22 326 Dominion Homes Inc./1/ 21 325 Elizabeth Arden Inc./1/ 27 324 Penford Corp. 24 324 Asyst Technologies Inc./1/ 53 320 Centene Corp./1/ 12 320 Spectrian Corp./1/ 108 319 SpeechWorks International Inc./1/ 138 317 Zymogenetics Inc./1/ 39 312 American Superconductor Corp./1/ 115 310 Acterna Corp./1/ 773 309 Manufacturers Services Ltd./1/ 114 308 Paradyne Networks Inc./1/ 229 305 Advanced Marketing Services Inc. 22 303 Gorman-Rupp Co. /The/ 13 303 CPI Corp. 22 302 Revlon Inc. "A"/1/ 101 302 Avid Technology Inc./1/ 29 299 Advent Software Inc./1/ 26 298 WestPoint Stevens Inc./1/ 300 294 MEEMIC Holdings Inc./1/ 10 287 Nuance Communications Inc./1/ 169 287 NATCO Group Inc. "A"/1/ 38 286 Alaska Communications Systems Group Inc./1/ 169 284 Capstone Turbine Corp./1/ 479 283 Global Payments Inc. 11 282 First Banks America Inc./1/ 7 281 Ribapharm Inc./1/ 62 279 Netegrity Inc./1/ 135 278 Southwestern Energy Co./1/ 23 276 Nanometrics Inc./1/ 102 271 FileNET Corp./1/ 26 269 Alaris Medical Inc./1/ 55 262 Lakeland Financial Corp. 11 261 National Beverage Corp./1/ 19 260 Internet Security Systems Inc./1/ 21 259 PDI Inc./1/ 62 252 Merix Corp./1/ 30 244 AXT Inc./1/ 117 243 Rare Hospitality International Inc./1/ 10 234 Dynamics Research Corp./1/ 16 233 Ulticom Inc./1/ 42 232 AVANIR Pharmaceuticals "A"/1/ 200 230 EMCORE Corp./1/ 151 230 Schedules of Investments 97 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- WFS Financial Inc./1/ 11 $ 228 Inktomi Corp./1/ 909 227 Time Warner Telecom Inc. "A"/1/ 279 226 Riverstone Networks Inc./1/ 441 225 Mossimo Inc./1/ 38 223 Electroglas Inc./1/ 111 222 Aurora Foods Inc./1/ 340 221 Roxio Inc./1/ 73 221 Cardiac Science Inc./1/ 110 218 ILEX Oncology Inc./1/ 44 209 Topps Co. /The//1/ 24 207 ArthroCare Corp./1/ 16 194 Infogrames Inc./1/ 86 191 Zygo Corp./1/ 45 191 Ameristar Casinos Inc./1/ 10 190 UbiquiTel Inc./1/ 758 189 NYMAGIC Inc./1/ 13 188 RCN Corp./1/ 361 184 Stratos Lightwave Inc./1/ 496 179 Columbia Sportswear Co./1/ 5 174 Insituform Technologies Inc. "A"/1/ 12 172 ATA Holdings Corp./1/ 50 170 O'Charley's Inc./1/ 9 169 MKS Instruments Inc./1/ 15 164 Alamosa Holdings Inc./1/ 693 159 Alloy Inc./1/ 19 158 Matria Healthcare Inc./1/ 18 154 Kos Pharmaceuticals Inc./1/ 13 146 PLATO Learning Inc./1/ 22 146 Liberty Livewire Corp. "A"/1/ 92 144 Acme Communications Inc./1/ 17 133 Tellium Inc./1/ 351 133 MTR Gaming Group Inc./1/ 13 120 Glatfelter Co. 10 115 Pixelworks Inc./1/ 22 113 Deltagen Inc./1/ 74 111 NASB Financial Inc. 5 104 ON Semiconductor Corp./1/ 83 104 Trikon Technologies Inc./1/ 18 102 Epix Medical Inc./1/ 22 100 Next Level Communications Inc./1/ 127 98 NetFlix Inc./1/ 10 97 Vastera Inc./1/ 45 97 Hologic Inc./1/ 9 88 Lawson Software Inc./1/ 25 88 Synaptics Inc./1/ 18 87 Penton Media Inc./1/ 357 86 West Corp./1/ 6 84 Magellan Health Services Inc./1/ 305 79 P.A.M. Transportation Services Inc./1/ 4 76 Somera Communications Inc./1/ 34 70 Centennial Communications Corp. "A"/1/ 23 67 Skechers U.S.A. Inc. "A"/1/ 7 67 eUniverse Inc./1/ 22 64 DDi Corp./1/ 394 63 Galyan's Trading Co./1/ 6 60 Inforte Corp./1/ 10 51 Key Productions Co. Inc./1/ 3 49 Handspring Inc./1/ 51 48 Bone Care International Inc./1/ 8 46 Caminus Corp./1/ 26 46 Dobson Communications Corp. "A"/1/ 147 46 Computer Programs & Systems Inc./1/ 2 43 Kyphon Inc./1/ 3 40 Optical Communication Products Inc./1/ 50 38 Overstock.com Inc./1/ 6 36 Digitas Inc./1/ 10 22 Sharper Image Corp./1/ 1 19 Therma-Wave Inc./1/ 17 13 Darden Restaurants Inc. 1 12 Westwood Holdings Group Inc. 1 11 Verint Systems Inc./1/ 1 9 TOTAL COMMON STOCKS (COST: $82,401,354) 65,501,526 SHORT TERM INSTRUMENTS - 3.08% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 1,727,319 1,727,319 Dreyfus Money Market Fund 91,805 91,805 98 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Goldman Sachs Financial Square Prime Obligation Fund 66,818 $ 66,818 Providian Temp Cash Money Market Fund 137,707 137,707 - ----------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (COST: $2,023,649) 2,023,649 - ----------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES - 102.86% (COST $84,425,003) 67,525,175 - ----------------------------------------------------------------- OTHER ASSETS, LESS LIABILITIES - (2.86%) (1,876,401) - ----------------------------------------------------------------- NET ASSETS - 100.00% $65,648,774 ================================================================= /1/ Non-income earning securities. See notes to financial statements. Schedules of Investments 99 Schedule of Investments /Unaudited/ iSHARES RUSSELL MIDCAP INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- COMMON STOCKS - 99.83% - ----------------------------------------------------------------- WellPoint Health Networks Inc./1/ 5,342 $ 391,569 Bed Bath & Beyond Inc./1/ 10,727 349,378 Newmont Mining Corp. 12,513 344,233 Entergy Corp. 8,205 341,328 Anthem Inc./1/ 5,205 338,325 Intuit Inc./1/ 6,996 318,528 Consolidated Edison Inc. 7,821 314,561 SouthTrust Corp. 12,749 309,163 Praxair Inc. 6,015 307,427 FirstEnergy Corp. 10,202 304,938 Newell Rubbermaid Inc. 9,821 303,174 Yum! Brands Inc./1/ 10,890 301,762 Apache Corp. 5,049 300,163 Electronic Arts Inc./1/ 4,431 292,269 Starbucks Corp./1/ 14,157 292,059 Eastman Kodak Co. 10,720 292,013 Mattel Inc. 16,014 288,412 Norfolk Southern Corp. 14,235 287,405 Stryker Corp. 4,948 285,005 McKesson Corp. 10,015 283,725 Burlington Resources Inc. 7,392 283,557 Block (H & R) Inc. 6,739 283,105 Unocal Corp. 9,009 282,793 PPG Industries Inc. 6,212 277,676 AmSouth Bancorp 13,299 275,821 Regions Financial Corp. 8,428 275,343 AmerisourceBergen Corp. 3,854 275,253 Zimmer Holdings Inc./1/ 7,136 273,594 Becton, Dickinson & Co. 9,513 270,169 Pitney Bowes Inc. 8,856 270,019 Allergan Inc. 4,932 268,301 Archer-Daniels-Midland Co. 20,970 262,335 Biomet Inc. 9,848 262,252 Fortune Brands Inc. 5,517 260,899 Marathon Oil Corp. 11,388 258,280 Devon Energy Corp. 5,301 255,773 Charter One Financial Inc. 8,503 252,711 Johnson Controls Inc. 3,262 250,587 Clorox Co. 6,176 248,152 Equity Residential 10,086 241,459 DTE Energy Co. 5,921 240,985 May Department Stores Co. (The) 10,575 240,793 St. Paul Companies Inc. 8,222 236,136 Danaher Corp. 4,102 233,199 Moody's Corp. 4,794 232,509 Public Service Enterprise Group Inc. 7,600 231,800 St. Jude Medical Inc./1/ 6,476 231,193 International Game Technology Inc./1/ 3,311 228,923 M&T Bank Corp. 2,902 228,707 North Fork Bancorp Inc. 6,022 227,872 TRW Inc. 3,882 227,291 New York Times Co. "A" 4,941 224,568 Lexmark International Group Inc. "A"/1/ 4,778 224,566 Synovus Financial Corp. 10,850 223,727 Jefferson-Pilot Corp. 5,519 221,312 Veritas Software Corp./1/ 15,020 220,944 Ameren Corp. 5,303 220,870 Staples Inc./1/ 17,157 219,438 Marshall & Ilsley Corp. 7,813 217,905 Federated Department Stores Inc./1/ 7,391 217,591 MBIA Inc. 5,426 216,769 Hershey Foods Corp. 3,465 215,003 Gilead Sciences Inc./1/ 6,305 211,407 Loews Corp. 4,925 211,233 Lincoln National Corp. 6,893 210,581 AutoZone Inc./1/ 2,659 209,689 ITT Industries Inc. 3,335 207,871 Halliburton Co. 16,005 206,625 CSX Corp. 7,824 206,397 Marriott International Inc. "A" 7,100 205,829 Avery Dennison Corp. 3,606 205,470 Union Planters Corp. 7,421 203,781 Harrah's Entertainment Inc./1/ 4,190 202,000 SunGard Data Systems Inc./1/ 10,377 201,833 Fiserv Inc./1/ 7,048 197,908 Ecolab Inc. 4,739 197,758 Genuine Parts Co. 6,425 196,862 Bear Stearns Companies Inc. (The) 3,478 196,159 KLA-Tencor Corp./1/ 6,950 194,183 100 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL MIDCAP INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Cinergy Corp. 6,140 $ 192,980 MedImmune Inc./1/ 9,188 192,213 Aetna Inc. 5,361 191,977 Apollo Group Inc. "A"/1/ 4,362 189,442 Apple Computer Inc./1/ 13,057 189,326 National Commerce Financial Corp. 7,553 189,203 Dover Corp. 7,424 188,421 Nextel Communications Inc. "A"/1/ 24,599 185,722 Cintas Corp. 4,359 182,729 Coca-Cola Enterprises Inc. 8,567 181,963 UNUMProvident Corp. 8,925 181,624 Cincinnati Financial Corp. 5,060 180,035 Countrywide Credit Industries Inc. 3,818 180,019 AON Corp. 8,752 179,328 Symantec Corp./1/ 5,310 178,788 Health Management Associates Inc. "A"/1/ 8,827 178,482 Rohm & Haas Co. "A" 5,756 178,436 Laboratory Corp. of America Holdings/1/ 5,240 177,007 PPL Corp. 5,429 176,660 Delphi Automotive Systems Corp. 20,597 176,104 Amerada Hess Corp. 2,583 175,334 UST Inc. 6,207 175,099 KeySpan Corp. 5,181 173,564 Knight Ridder Inc. 3,072 173,292 IDEC Pharmaceuticals Corp./1/ 4,131 171,519 Simon Property Group Inc. 4,793 171,254 Quest Diagnostics Inc./1/ 2,760 169,823 Adobe Systems Inc. 8,753 167,182 Ambac Financial Group Inc. 3,077 165,820 Computer Sciences Corp./1/ 5,959 165,601 King Pharmaceuticals Inc./1/ 9,111 165,547 Huntington Bancshares Inc. 9,083 165,220 Parker Hannifin Corp. 4,321 165,105 Eaton Corp. 2,580 164,449 Starwood Hotels & Resorts Worldwide Inc. 7,299 162,768 First Tennessee National Corp. 4,656 161,424 PG&E Corp./1/ 14,315 161,187 Kerr-McGee Corp. 3,695 160,511 Computer Associates International Inc. 16,692 160,243 Biogen Inc./1/ 5,458 159,756 Popular Inc. 5,020 158,632 IMS Health Inc. 10,582 158,413 Family Dollar Stores Inc. 5,843 157,060 Penney (J.C.) Co. Inc. 9,796 155,952 Archstone-Smith Trust 6,438 153,739 Darden Restaurants Inc. 6,340 153,682 EOG Resources Inc. 4,266 153,405 Torchmark Corp. 4,462 152,868 Plum Creek Timber Co. Inc. 6,761 152,866 Affiliated Computer Services Inc. "A"/1/ 3,571 151,946 Mylan Laboratories Inc. 4,623 151,357 Pepsi Bottling Group Inc. 6,423 150,298 BJ Services Co./1/ 5,777 150,202 SAFECO Corp. 4,718 149,938 Microchip Technology Inc./1/ 7,302 149,326 Constellation Energy Group Inc. 6,000 148,740 Textron Inc. 4,360 148,676 Genzyme Corp. - General Division/1/ 7,169 147,753 Prologis Trust 5,912 147,268 Zions Bancorp 3,383 147,262 Rockwell Collins 6,688 146,735 Monsanto Co. 9,558 146,142 SPX Corp./1/ 1,421 143,379 Applera Corp. - Applied Biosystems Group 7,774 142,264 American Standard Companies Inc./1/ 2,235 142,191 Leggett & Platt Inc. 7,176 142,013 Wendy's International Inc. 4,253 140,817 MeadWestvaco Corp. 7,318 140,579 Office Depot Inc./1/ 11,318 139,664 Compass Bancshares Inc. 4,701 138,632 Hilton Hotels Corp. 12,169 138,483 Dollar General Corp. 10,315 138,427 Caremark Rx Inc./1/ 8,134 138,278 Yahoo! Inc./1/ 14,341 137,243 MGIC Investment Corp. 3,358 137,107 R.J. Reynolds Tobacco Holdings Inc. 3,376 136,120 Schedules of Investments 101 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL MIDCAP INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- ENSCO International Inc. 5,434 $ 136,067 Jones Apparel Group Inc./1/ 4,422 135,755 Xcel Energy Inc. 14,578 135,721 PACCAR Inc. 4,000 135,160 L-3 Communications Holdings Inc./1/ 2,532 133,436 Sigma-Aldrich Corp. 2,698 132,930 Dean Foods Co./1/ 3,319 132,030 Xerox Corp./1/ 26,462 130,987 NiSource Inc. 7,600 130,948 GreenPoint Financial Corp. 3,128 130,563 Sempra Energy 6,635 130,378 DST Systems Inc./1/ 4,383 129,167 Ocean Energy Inc. 6,409 127,860 RadioShack Corp./1/ 6,365 127,682 Banknorth Group Inc. 5,373 127,609 Univision Communications Inc./1/ 5,581 127,247 Express Scripts Inc. "A"/1/ 2,324 126,704 Vulcan Materials Co. 3,500 126,560 Oxford Health Plans Inc./1/ 3,246 126,399 PeopleSoft Inc./1/ 10,118 125,160 Black & Decker Corp. 2,969 124,490 Old Republic International Corp. 4,373 124,106 Sovereign Bancorp Inc. 9,540 123,066 Lincare Holdings Inc./1/ 3,964 123,043 Altera Corp./1/ 14,116 122,386 Grainger (W.W.) Inc. 2,876 122,374 Duke-Weeks Realty Corp. 4,909 120,860 ServiceMaster Co. 11,076 120,175 Edison International/1/ 11,955 119,550 Chiron Corp./1/ 3,418 119,425 TCF Financial Corp. 2,821 119,413 Kinder Morgan Inc. 3,340 118,403 General Growth Properties Inc. 2,287 117,781 Hibernia Corp. "A" 5,859 117,121 Apartment Investment & Management Co. "A" 3,007 116,822 CenturyTel Inc. 5,208 116,815 Public Storage Inc. 3,659 116,722 Waters Corp./1/ 4,798 116,352 BMC Software Inc./1/ 8,897 116,284 Circuit City Stores Inc. 7,661 116,064 McCormick & Co. Inc. 5,090 116,052 Equifax Inc. 5,291 115,026 Molex Inc. 4,847 114,001 Qwest Communications International Inc./1/ 49,912 113,799 Engelhard Corp. 4,733 112,787 Sherwin-Williams Co. 4,752 112,527 VF Corp. 3,120 112,258 Pepco Holdings Inc. 5,602 111,760 ChoicePoint Inc./1/ 3,133 111,660 Amazon.com Inc./1/ 6,996 111,446 New York Community Bancorp Inc. 3,956 111,441 Michaels Stores Inc./1/ 2,438 111,417 Estee Lauder Companies Inc. "A" 3,870 111,224 Georgia-Pacific Corp. 8,454 110,663 Novellus Systems Inc./1/ 5,306 110,418 Murphy Oil Corp. 1,345 110,384 Nucor Corp. 2,880 109,152 Smith International Inc./1/ 3,724 109,150 Eastman Chemical Co. 2,852 108,861 Lennar Corp. 1,950 108,771 Whirlpool Corp. 2,368 108,596 Radian Group Inc. 3,314 108,235 Varian Medical Systems Inc./1/ 2,500 107,475 Deluxe Corp. 2,360 106,342 Bard (C.R.) Inc. 1,946 106,310 Synopsys Inc./1/ 2,780 106,057 Republic Services Inc. "A"/1/ 5,626 105,769 Kimco Realty Corp. 3,380 105,118 Ball Corp. 2,085 105,063 Energy East Corp. 5,293 104,854 Vornado Realty Trust 2,641 104,187 Ross Stores Inc. 2,908 103,641 DENTSPLY International Inc. 2,575 103,438 Wisconsin Energy Corp. 4,247 103,202 Hillenbrand Industries Inc. 1,896 102,953 Energizer Holdings Inc./1/ 3,371 102,478 Sabre Holdings Corp./1/ 5,283 102,226 Triad Hospitals Inc./1/ 2,689 102,048 Pioneer Natural Resources Co./1/ 4,200 101,850 Thermo Electron Corp./1/ 6,301 101,635 102 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL MIDCAP INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Fidelity National Financial Inc. 3,527 $ 101,331 First Health Group Corp./1/ 3,729 101,130 SCANA Corp. 3,863 100,515 Westwood One Inc./1/ 2,810 100,458 Legg Mason Inc. 2,360 100,442 Centex Corp. 2,251 99,832 Lear Corp./1/ 2,395 99,752 Cadence Design Systems Inc./1/ 9,714 98,791 Reliant Energy Inc. 9,869 98,789 First Virginia Banks Inc. 2,637 98,360 Valero Energy Corp. 3,715 98,336 Stilwell Financial Inc. 8,134 98,177 Liz Claiborne Inc. 3,932 98,103 Mercantile Bankshares Corp. 2,569 98,059 Rockwell International Corp. 5,972 97,164 Telephone & Data Systems Inc. 1,919 96,814 Expeditors International Washington Inc. 3,460 96,672 Millennium Pharmaceuticals Inc./1/ 10,341 96,378 Tyson Foods Inc. "A" 8,268 96,157 T. Rowe Price Group Inc. 3,845 95,971 Pactiv Corp./1/ 5,783 95,130 Convergys Corp./1/ 6,328 95,110 Edwards (A.G.) Inc. 2,974 95,109 Mohawk Industries Inc./1/ 1,888 93,739 Brinker International Inc./1/ 3,616 93,654 Patterson Dental Co./1/ 1,823 93,301 Valley National Bancorp 3,500 93,100 MGM Grand Inc./1/ 2,492 92,952 Universal Health Services Inc. "B"/1/ 1,808 92,479 Dun & Bradstreet Corp./1/ 2,737 91,991 AvalonBay Communities Inc. 2,198 91,876 CDW Computer Centers Inc./1/ 2,165 91,709 Washington Post Company (The) "B" 141 91,509 Dollar Tree Stores Inc./1/ 4,146 91,378 Bemis Co. 1,848 91,291 Watson Pharmaceuticals Inc./1/ 3,714 91,030 Boston Properties Inc. 2,445 90,954 Donnelley (R.R.) & Sons Co. 3,848 90,466 PMI Group Inc. (The) 3,322 90,392 Health Care Property Investors Inc. 2,103 89,588 TECO Energy Inc. 5,628 89,373 AMB Property Corp. 3,090 89,301 Robert Half International Inc./1/ 5,619 89,174 Associated Bancorp 2,792 88,590 Commerce Bancorp Inc. 2,129 88,375 Rouse Co. 2,754 87,990 Tiffany & Co. 4,092 87,692 XTO Energy Inc. 4,252 87,634 PETsMART Inc./1/ 4,898 87,233 Diebold Inc. 2,642 86,975 JDS Uniphase Corp./1/ 44,392 86,476 LSI Logic Corp./1/ 13,600 86,360 Golden State Bancorp Inc. 2,656 85,842 Health Net Inc./1/ 3,980 85,371 Liberty Property Trust 2,752 85,312 Brown-Forman Corp. "B" 1,273 85,227 International Flavors & Fragrances Inc. 2,661 84,753 Commerce Bancshares Inc. 2,158 84,313 QLogic Corp./1/ 3,236 84,265 Jabil Circuit Inc./1/ 5,680 83,950 American Water Works Inc. 1,879 83,916 AutoNation Inc./1/ 7,270 83,750 Coach Inc./1/ 3,258 83,405 Manor Care Inc./1/ 3,686 82,861 Beckman Coulter Inc. 2,141 82,857 Unisys Corp./1/ 11,833 82,831 Whole Foods Market Inc./1/ 1,926 82,510 Lamar Advertising Co./1/ 2,716 82,431 Siebel Systems Inc./1/ 14,332 82,409 Alliant Techsystems Inc./1/ 1,187 82,200 Stanley Works (The) 2,512 82,067 Allied Capital Corp. 3,746 82,000 Federated Investors Inc. "B" 3,031 81,807 Manpower Inc. 2,779 81,536 Northeast Utilities 4,766 80,545 Equitable Resources Inc. 2,327 80,398 Network Appliance Inc./1/ 10,901 79,904 Host Marriott Corp./1/ 8,600 79,808 Smurfit-Stone Container Corp./1/ 6,346 79,706 Park Place Entertainment Corp./1/ 9,974 79,293 Schedules of Investments 103 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL MIDCAP INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Pinnacle West Capital Corp. 2,855 $ 79,255 Career Education Corp./1/ 1,650 79,213 D.R. Horton Inc. 4,242 78,986 National Semiconductor Corp./1/ 6,594 78,732 SUPERVALU Inc. 4,873 78,699 Phelps Dodge Corp./1/ 3,067 78,607 UnionBanCal Corp. 1,866 78,391 Gallagher (Arthur J.) & Co. 3,162 77,943 KB HOME 1,591 77,704 Williams-Sonoma Inc./1/ 3,284 77,601 Protective Life Corp. 2,520 77,540 Henry Schein Inc./1/ 1,466 77,332 NSTAR 1,949 77,083 Ceridian Corp./1/ 5,399 76,936 Pulte Homes Inc. 1,803 76,862 Humana Inc./1/ 6,181 76,644 DPL Inc. 4,648 76,460 Autoliv Inc. 3,615 76,204 Hospitality Properties Trust 2,297 76,077 Sonoco Products Co. 3,555 75,757 Broadcom Corp. "A"/1/ 7,083 75,646 Astoria Financial Corp. 3,098 75,591 Gentex Corp./1/ 2,778 75,534 Harris Corp. 2,253 75,453 Dial Corp. (The) 3,482 74,724 Sunoco Inc. 2,468 74,435 Scripps (E.W.) Co. 1,074 74,428 Toys R Us Inc./1/ 7,119 72,471 Fluor Corp. 2,957 72,269 Pogo Producing Co. 2,115 72,037 Scientific-Atlanta Inc. 5,722 71,582 Noble Energy Inc. 2,099 71,303 Fulton Financial Corp. 3,788 71,214 Dana Corp. 5,433 71,064 Cooper Cameron Corp./1/ 1,697 70,867 Belo (A.H.) Corp. 3,231 70,694 Citizens Communications Co./1/ 10,354 70,200 Bank of Hawaii Corp. 2,507 69,945 Wilmington Trust Corp. 2,412 69,755 Brunswick Corp. 3,309 69,621 Cephalon Inc./1/ 1,699 69,353 Apogent Technologies Inc./1/ 3,709 69,210 City National Corp. 1,468 68,658 BEA Systems Inc./1/ 13,250 68,635 Valspar Corp. (The) 1,833 68,371 Ashland Inc. 2,548 68,261 Fastenal Co. 2,159 68,181 Dow Jones & Co. Inc. 1,775 68,178 IVAX Corp./1/ 5,538 67,951 Bowater Inc. 1,921 67,811 BISYS Group Inc. (The)/1/ 4,042 67,542 Big Lots Inc./1/ 4,257 67,388 Pentair Inc. 1,805 67,092 Rent-A-Center Inc./1/ 1,291 67,067 Advanced Micro Devices Inc./1/ 12,558 67,060 FirstMerit Corp. 3,123 66,895 Goodrich (B.F.) Co. 3,536 66,760 Temple-Inland Inc. 1,726 66,675 Viad Corp. 3,262 66,643 Invitrogen Corp./1/ 1,952 66,505 SEI Investment Co. 2,779 66,363 CH Robinson Worldwide Inc. 2,460 66,199 Maytag Corp. 2,849 66,040 Pier 1 Imports Inc. 3,463 66,039 Patterson-UTI Energy Inc./1/ 2,582 65,867 Pall Corp. 4,164 65,750 Puget Energy Inc. 3,205 65,414 Valassis Communications Inc./1/ 1,861 65,265 Pennzoil-Quaker State Co. 2,951 64,833 Symbol Technologies Inc. 8,436 64,704 Meredith Corp. 1,500 64,575 Cullen/Frost Bankers Inc. 1,885 64,373 Questar Corp. 2,818 64,363 Brocade Communications Systems Inc./1/ 8,538 64,291 Teradyne Inc./1/ 6,696 64,282 Rowan Companies Inc. 3,448 64,271 Charles River Laboratories International Inc./1/ 1,635 64,174 New Plan Excel Realty Trust 3,479 64,153 Investors Financial Services Corp. 2,362 63,939 Omnicare Inc. 3,027 63,930 104 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL MIDCAP INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Alliant Energy Corp. 3,317 $ 63,852 Smithfield Foods Inc./1/ 4,065 63,821 Solectron Corp./1/ 30,243 63,813 Alberto-Culver Co. "B" 1,301 63,788 Steris Corp./1/ 2,548 63,471 Barr Laboratories Inc./1/ 1,018 63,411 AGCO Corp./1/ 2,732 63,382 NVR Inc./1/ 211 63,264 Helmerich & Payne Inc. 1,834 62,778 Mid Atlantic Medical Services Inc./1/ 1,733 62,735 United Dominion Realty Trust Inc. 3,941 62,701 Nordstrom Inc. 3,479 62,413 Constellation Brands Inc./1/ 2,695 62,255 Abercrombie & Fitch Co. "A"/1/ 3,132 61,606 Tellabs Inc./1/ 15,106 61,481 Weingarten Realty Investors 1,676 61,342 Markel Corp./1/ 307 61,148 AdvancePCS/1/ 2,706 60,966 Fisher Scientific International Inc./1/ 2,006 60,882 Bausch & Lomb Inc. 1,835 60,867 Entercom Communications Corp./1/ 1,281 60,681 Outback Steakhouse Inc./1/ 2,203 60,538 Fair Isaac and Co. Inc. 1,850 60,495 ALLETE Inc. 2,797 60,415 Renal Care Group Inc./1/ 1,834 60,320 Webster Financial Corp. 1,796 60,310 NCR Corp./1/ 3,041 60,212 Healthsouth Corp./1/ 14,467 60,038 Hormel Foods Corp. 2,740 59,951 Allegheny Energy Inc. 4,572 59,893 Agere Systems Inc. "B"/1/ 60,118 59,517 Eaton Vance Corp. 2,151 59,454 MDU Resources Group Inc. 2,603 59,426 BancorpSouth Inc. 2,981 58,726 RPM Inc. 4,171 58,644 Martin Marietta Materials Inc. 1,787 58,203 Teleflex Inc. 1,272 57,978 American Power Conversion Corp./1/ 6,064 57,972 National-Oilwell Inc./1/ 2,975 57,656 Network Associates Inc./1/ 5,420 57,615 StanCorp Financial Group Inc. 1,089 57,608 Coors (Adolf) Company "B" 1,019 57,370 Hawaiian Electric Industries Inc. 1,329 57,280 Readers Digest Association Inc. (The) "A" 3,660 57,279 Hasbro Inc. 5,129 57,086 Juniper Networks Inc./1/ 11,883 57,038 Intersil Corp. "A"/1/ 4,397 56,985 Iron Mountain Inc./1/ 2,267 56,652 Millipore Corp. 1,776 56,459 Annaly Mortgage Management Inc. 3,043 56,143 Edwards Lifesciences Corp./1/ 2,190 56,042 Old National Bancorp 2,251 55,960 Corning Inc./1/ 34,880 55,808 Catellus Development Corp./1/ 3,011 55,553 Cheesecake Factory (The)/1/ 1,854 55,305 Neuberger Berman Inc. 2,052 55,301 Lyondell Chemical Co. 4,627 55,246 HON Industries Inc. 2,168 55,176 HCC Insurance Holdings Inc. 2,286 54,887 Performance Food Group Co./1/ 1,616 54,879 Colonial BancGroup Inc. (The) 4,424 54,858 Newfield Exploration Co./1/ 1,632 54,819 Vectren Corp. 2,486 54,692 Reynolds & Reynolds Co. (The) "A" 2,409 54,058 First American Corp. 2,627 53,670 Jacobs Engineering Group Inc./1/ 1,736 53,608 Sanmina-SCI Corp./1/ 19,265 53,364 Lubrizol Corp. 1,887 53,345 Human Genome Sciences Inc./1/ 4,418 53,281 Lee Enterprises Inc. 1,621 53,266 Tidewater Inc. 1,972 53,224 Brown & Brown Inc. 1,773 53,190 Polaris Industries Inc. 856 53,072 WebMD Corp./1/ 10,499 53,020 Autodesk Inc. 4,176 52,910 Investment Technology Group Inc./1/ 1,806 52,844 Pride International Inc./1/ 4,033 52,429 National Fuel Gas Co. 2,635 52,357 Ryder System Inc. 2,097 52,278 GTECH Holdings Corp./1/ 2,104 52,221 Unitrin Inc. 1,701 52,221 Schedules of Investments 105 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL MIDCAP INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Hubbell Inc. "B" 1,796 $ 52,210 Sealed Air Corp./1/ 3,081 52,038 Washington Federal Inc. 2,331 52,016 BRE Properties Inc. "A" 1,684 51,783 Dillards Inc. "A" 2,563 51,721 CNF Transportation Inc. 1,647 51,699 Accredo Health Inc./1/ 1,083 51,637 3Com Corp./1/ 13,105 51,634 Foot Locker Inc./1/ 5,166 51,608 Andrx Group/1/ 2,326 51,521 DaVita Inc./1/ 2,179 51,424 Transatlantic Holdings Inc. 773 51,366 Vishay Intertechnology Inc./1/ 5,834 51,339 Sprint Corp. (PCS Group)/1/ 26,088 51,132 Sky Financial Group Inc. 2,565 51,069 Doral Financial Corp. 2,107 50,863 Tektronix Inc./1/ 3,095 50,851 Mack-Cali Realty Corp. 1,574 50,573 Arden Realty Inc. 2,130 50,374 Phoenix Companies Inc. 3,683 50,162 Mandalay Resort Group/1/ 1,490 49,990 BJ's Wholesale Club Inc./1/ 2,615 49,711 Westamerica Bancorp 1,232 49,625 Scholastic Corp./1/ 1,110 49,595 Herman Miller Inc. 2,792 49,586 Harman International Industries Inc. 953 49,318 Community Health Systems Inc./1/ 1,851 49,292 Snap-On Inc. 2,139 49,154 CarrAmerica Realty Corp. 1,947 49,006 Vertex Pharmaceuticals Inc./1/ 2,642 48,851 Tech Data Corp./1/ 1,848 48,787 Varco International Inc./1/ 2,873 48,611 Donaldson Co. Inc. 1,415 48,577 Mercury Interactive Corp./1/ 2,827 48,511 Cytyc Corp./1/ 4,510 48,347 OGE Energy Corp. 2,863 48,299 BorgWarner Inc. 972 48,250 Activision Inc./1/ 2,013 48,171 Cabot Corp. 2,288 48,048 IMC Global Inc. 3,987 48,043 Comverse Technology Inc./1/ 6,872 48,035 First Midwest Bancorp Inc. 1,777 47,730 Dreyer's Grand Ice Cream Inc. 683 47,714 Independence Community Bank Corp. 1,899 47,646 Krispy Kreme Doughnuts Inc./1/ 1,520 47,515 Borders Group Inc./1/ 3,000 47,400 Providian Financial Corp./1/ 9,661 47,339 Waddell & Reed Financial Inc. "A" 2,674 47,223 Berkley (W.R.) Corp. 1,387 47,158 Roslyn Bancorp Inc. 2,704 47,077 Crescent Real Estate Equities Co. 2,995 47,022 CIENA Corp./1/ 15,784 46,878 Celgene Corp./1/ 2,782 46,849 CenterPoint Properties Corp. 843 46,786 Saks Inc./1/ 4,440 46,753 iStar Financial Inc. 1,670 46,626 Whitney Holding Corp. 1,461 46,621 ArvinMeritor Inc. 2,491 46,582 Arrow Electronics Inc./1/ 3,685 46,542 Goodyear Tire & Rubber Co. 5,208 46,299 Certegy Inc./1/ 2,300 46,230 E*TRADE Group Inc./1/ 10,381 46,195 Medicis Pharmaceutical Corp. "A"/1/ 1,128 46,101 Level 3 Communications Inc./1/ 11,792 45,871 Zebra Technologies Corp. "A"/1/ 870 45,840 Owens-Illinois Inc./1/ 4,046 45,801 NICOR Inc. 1,623 45,769 Reebok International Ltd./1/ 1,821 45,616 Visteon Corp. 4,816 45,608 Highwoods Properties Inc. 1,945 45,513 Coventry Health Care Inc./1/ 1,392 45,240 LifePoint Hospitals Inc./1/ 1,449 45,191 Leucadia National Corp. 1,327 45,118 FNB Corp. 1,608 45,056 Ruby Tuesday Inc. 2,392 44,922 Applebee's International Inc. 2,049 44,914 First Industrial Realty Trust Inc. 1,448 44,874 Cablevision Systems Corp./1/ 4,947 44,820 Dole Food Co. 1,543 44,793 Avnet Inc. 4,151 44,789 Reckson Associates Realty Corp. 1,960 44,629 106 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL MIDCAP INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Pittston Brink's Group 1,991 $ 44,598 Radio One Inc. "D"/1/ 2,695 44,441 CBRL Group Inc. 1,947 44,431 Hudson City Bancorp Inc. 2,733 44,357 PepsiAmericas Inc. 3,122 44,332 Hudson United Bancorp 1,664 44,262 OM Group Inc. 1,034 44,255 Developers Diversified Realty Corp. 2,008 44,196 Church & Dwight Co. Inc. 1,325 43,924 Camden Property Trust 1,324 43,891 Peoples Energy Corp. 1,302 43,864 La-Z-Boy Inc. 1,879 43,593 Great Plains Energy Inc. 2,275 43,566 Lancaster Colony Corp. 1,034 43,552 Navistar International Corp. 2,003 43,425 Graco Inc. 1,742 43,202 SICOR Inc./1/ 2,810 42,740 Rayonier Inc. 1,019 42,706 United States Steel Corp. 3,676 42,678 Philadelphia Suburban Corp. 2,100 42,630 Chico's FAS Inc./1/ 2,664 42,438 Boise Cascade Corp. 1,858 42,362 Furniture Brands International Inc./1/ 1,838 42,182 AmerUs Group Co. 1,486 42,143 Delta Air Lines Inc. 4,527 42,056 O'Reilly Automotive Inc./1/ 1,463 41,871 Lam Research Corp./1/ 4,692 41,759 Harte-Hanks Inc. 2,239 41,668 Quintiles Transnational Corp./1/ 4,374 41,597 Park National Corp. 442 41,415 IKON Office Solutions Inc. 5,252 41,386 Precision Castparts Corp. 1,903 41,257 McClatchy Co. (The) "A" 676 41,202 VeriSign Inc./1/ 8,150 41,158 Storage Technology Corp./1/ 3,899 40,978 Acxiom Corp./1/ 2,882 40,867 York International Corp. 1,449 40,862 Mercury General Corp. 953 40,788 MONY Group Inc. (The) 1,652 40,755 International Speedway Corp. "A" 1,018 40,445 Citrix Systems Inc./1/ 6,700 40,401 Hispanic Broadcasting Corp./1/ 2,162 40,321 NVIDIA Corp./1/ 4,701 40,241 Advanced Fibre Communications Inc./1/ 3,032 40,235 Harsco Corp. 1,476 40,132 IndyMac Bancorp Inc./1/ 2,079 40,062 Weight Watchers International Inc./1/ 923 40,021 Education Management Corp./1/ 902 39,932 ICOS Corp./1/ 1,901 39,864 Citizens Banking Corp. 1,648 39,832 Diamond Offshore Drilling Inc. 1,993 39,760 Williams Companies Inc. 17,578 39,726 Integrated Device Technology Inc./1/ 3,797 39,641 Alleghany Corp./1/ 209 39,605 Fairchild Semiconductor International Corp. "A"/1/ 4,170 39,490 Ingram Micro Inc. "A"/1/ 2,964 39,421 Sybase Inc./1/ 3,387 39,357 DeVry Inc./1/ 2,099 39,083 American Greetings Corp. "A" 2,420 38,962 Provident Financial Group Inc. 1,548 38,839 Raymond James Financial Inc. 1,428 38,656 Affymetrix Inc./1/ 1,852 38,522 Catalina Marketing Corp./1/ 1,363 38,273 AES Corp. (The)/1/ 15,203 38,160 Cooper Tire & Rubber Co. 2,358 38,058 Packaging Corporation of America/1/ 2,171 38,014 Ethan Allen Interiors Inc. 1,166 37,732 Wiley (John) & Sons Inc. "A" 1,711 37,659 Compuware Corp./1/ 12,248 37,356 CMS Energy Corp. 4,618 37,221 Ryland Group Inc. 998 37,096 Trizec Properties Inc. 3,267 37,080 Clayton Homes Inc. 3,372 37,025 Diagnostic Products Corp. 803 36,938 Crane Co. 1,867 36,892 Zale Corp./1/ 1,219 36,765 Trustmark Corp. 1,604 36,571 International Rectifier Corp./1/ 2,332 36,426 Freeport-McMoRan Copper & Gold Inc./1/ 2,693 36,248 Schedules of Investments 107 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL MIDCAP INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Affiliated Managers Group Inc./1/ 811 $ 36,179 Cerner Corp./1/ 1,026 36,125 Allied Waste Industries Inc./1/ 4,889 35,934 Toll Brothers Inc./1/ 1,652 35,914 FMC Technologies Inc./1/ 2,136 35,799 AptarGroup Inc. 1,322 35,522 Swift Transportation Co. Inc./1/ 2,265 35,334 UTStarcom Inc./1/ 2,310 35,274 Erie Indemnity Co. "A" 842 35,078 Neiman-Marcus Group Inc. "A"/1/ 1,330 34,913 LaBranche & Co. Inc./1/ 1,715 34,729 Barnes & Noble Inc./1/ 1,638 34,660 Global Payments Inc. 1,352 34,611 Mettler Toledo International Inc./1/ 1,305 33,930 KPMG Consulting Inc./1/ 5,247 33,896 Emulex Corp./1/ 3,001 33,791 Edwards (J.D.) & Co./1/ 3,651 33,772 Extended Stay America Inc./1/ 2,659 33,769 IDACORP Inc. 1,386 33,721 ADC Telecommunications Inc./1/ 29,196 33,574 Lafarge North America Inc. 1,158 33,547 Pharmaceutical Product Development Inc./1/ 1,727 33,400 Alliance Data Systems Corp./1/ 2,199 33,315 Mirant Corp./1/ 14,777 32,657 Cox Radio Inc. "A"/1/ 1,246 32,595 CEC Entertainment Inc./1/ 953 32,507 Calpine Corp./1/ 12,976 32,051 RF Micro Devices Inc./1/ 5,286 31,716 Applied Micro Circuits Corp./1/ 11,009 31,486 99 Cents Only Stores/1/ 1,518 31,423 Pixar Inc./1/ 650 31,265 Winn-Dixie Stores Inc. 2,382 31,252 Rite Aid Corp./1/ 14,825 31,133 Henry (Jack) & Associates Inc. 2,500 31,075 Cousins Properties Inc. 1,327 30,521 Greater Bay Bancorp 1,669 30,359 St. Joe Company (The) 1,097 30,277 Timken Co. (The) 1,804 30,217 GATX Corp. 1,524 30,175 Cummins Inc. 1,271 30,021 Scotts Co. (The) "A"/1/ 716 29,850 IDT Corp./1/ 1,825 29,748 Cypress Semiconductor Corp./1/ 4,517 29,632 Forest Oil Corp./1/ 1,120 28,560 Silicon Valley Bancshares/1/ 1,676 28,375 Grant Prideco Inc./1/ 3,264 27,875 Blockbuster Inc. 1,122 27,826 Rational Software Corp./1/ 6,421 27,739 Tootsie Roll Industries Inc. 931 27,669 Hercules Inc./1/ 2,986 27,501 Advance Auto Parts Inc./1/ 519 27,372 ICN Pharmaceuticals Inc. 3,021 27,370 Integrated Circuit Systems Inc./1/ 1,738 27,287 TMP Worldwide Inc./1/ 3,029 27,261 Aquila Inc. 6,625 27,162 Regency Centers Corp. 874 27,094 Downey Financial Corp. 783 26,818 Copart Inc./1/ 2,470 26,800 KEMET Corp./1/ 3,117 26,650 Forest City Enterprises Inc. "A" 811 26,358 Talbots Inc. (The) 930 26,040 American National Insurance Co. 377 26,017 Callaway Golf Co. 2,500 26,000 BlackRock Inc./1/ 626 25,929 Emmis Communications Corp./1/ 1,361 25,859 SkyWest Inc. 1,960 25,676 AK Steel Holding Corp./1/ 3,507 25,636 CheckFree Corp./1/ 2,250 25,605 American Financial Group Inc. 1,112 25,598 Titan Corp. (The)/1/ 2,650 25,440 AmeriCredit Corp./1/ 3,152 25,437 Albemarle Corp. 1,004 25,391 Polycom Inc./1/ 3,690 25,055 American Axle & Manufacturing Holdings Inc./1/ 968 24,181 AMR Corp./1/ 5,711 23,872 American Eagle Outfitters Inc./1/ 1,978 23,855 PMC-Sierra Inc./1/ 6,121 23,749 Media General Inc. "A" 465 23,645 Andrew Corp./1/ 3,607 23,626 National Instruments Corp./1/ 1,074 23,510 108 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL MIDCAP INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Polo Ralph Lauren Corp./1/ 1,127 $ 23,419 Allmerica Financial Corp. 1,950 23,400 Perot Systems Corp. "A"/1/ 2,502 23,269 ARAMARK Corp. "B"/1/ 1,107 23,247 Cymer Inc./1/ 1,245 23,207 CNA Financial Corp./1/ 924 23,100 PerkinElmer Inc. 4,119 22,449 Shaw Group Inc. (The)/1/ 1,573 22,337 Amphenol Corp. "A"/1/ 711 22,041 Semtech Corp./1/ 2,254 21,864 Circuit City Stores Inc. - CarMax Group/1/ 1,362 21,860 Getty Images Inc./1/ 1,089 21,845 Timberland Co. "A"/1/ 686 21,732 Peabody Energy Corp. 833 21,242 CSG Systems International Inc./1/ 1,944 21,190 Entravision Communications Corp./1/ 1,593 21,107 Gemstar-TV Guide International Inc./1/ 8,268 20,835 Allegheny Technologies Inc. 2,969 20,545 People's Bank 909 20,389 Nationwide Financial Services Inc. 763 20,372 Flowserve Corp./1/ 2,023 20,230 Metro-Goldwyn-Mayer Inc./1/ 1,656 19,789 Gateway Inc./1/ 6,517 19,355 Cumulus Media Inc. "A"/1/ 1,085 19,150 Avaya Inc./1/ 13,264 18,968 PanAmSat Corp./1/ 1,074 18,634 Expedia Inc. "A"/1/ 363 18,386 United States Cellular Corp./1/ 619 18,310 Ticketmaster "B"/1/ 1,199 18,285 Capitol Federal Financial 825 18,282 John Nuveen Co. "A" 797 18,132 Loews Corporation - Carolina Group 958 18,020 Total System Services Inc. 1,370 18,016 Orthodontic Centers of America Inc./1/ 1,677 17,944 University of Phoenix Online/1/ 547 17,586 Hotels.com "A"/1/ 344 17,400 Adaptec Inc./1/ 3,940 17,375 Sonic Automotive Inc./1/ 962 17,027 BOK Financial Corp./1/ 522 16,965 AVX Corp. 1,944 16,835 Macromedia Inc./1/ 2,170 16,774 Wesco Financial Corp. 54 16,605 Columbia Sportswear Co./1/ 476 16,527 United Rentals Inc./1/ 1,930 16,289 Reinsurance Group of America Inc. 629 16,253 Atmel Corp./1/ 14,955 15,852 Interactive Data Corp./1/ 1,268 15,533 Lin TV Corp. "A"/1/ 624 15,444 Hearst-Argyle Television Inc./1/ 618 15,351 Micrel Inc./1/ 2,301 14,174 Advent Software Inc./1/ 1,204 13,786 GameStop Corp./1/ 661 13,517 Student Loan Corp. 148 13,391 Northwest Airlines Corp. "A"/1/ 1,976 13,200 Continental Airlines Inc. "B"/1/ 2,346 12,645 21st Century Insurance Group 1,177 12,135 RealNetworks Inc./1/ 3,259 11,765 Regal Entertainment Group "A"/1/ 660 11,748 Steelcase Inc. 1,112 11,643 PETCO Animal Supplies Inc./1/ 531 11,517 Dynegy Inc. "A" 9,927 11,515 Six Flags Inc./1/ 3,167 11,148 MSC Industrial Direct Co. Inc. "A"/1/ 1,023 10,864 Conexant Systems Inc./1/ 9,547 10,597 Advanced Medical Optics Inc./1/ 1,094 10,404 Premcor Inc./1/ 659 10,340 West Corp./1/ 693 9,702 CONSOL Energy Inc. 766 9,698 AMN Healthcare Services Inc./1/ 516 9,546 MKS Instruments Inc./1/ 843 9,206 JetBlue Airways Corp./1/ 215 8,671 Charter Communications Inc./1/ 4,637 8,625 Amkor Technology Inc./1/ 3,227 7,680 i2 Technologies Inc./1/ 10,743 5,586 Instinet Group Inc. 1,523 4,721 National Processing Inc./1/ 275 4,672 UnitedGlobalCom Inc. "A"/1/ 2,705 4,436 Ribapharm Inc./1/ 953 4,289 Schedules of Investments 109 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL MIDCAP INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- PayPal Inc./1/ 197 $ 4,119 Reliant Resources Inc./1/ 1,829 3,201 - ----------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $86,976,908) 69,899,678 - ----------------------------------------------------------------- SHORT TERM INSTRUMENTS - 5.78% - ----------------------------------------------------------------- Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 3,444,431 3,444,431 Dreyfus Money Market Fund 186,596 186,596 Goldman Sachs Financial Square Prime Obligation Fund 135,810 135,810 Providian Temp Cash Money Market Fund 279,894 279,894 - ----------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $4,046,731) 4,046,731 - ----------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES - 105.61% (Cost $91,023,639) 73,946,409 - ----------------------------------------------------------------- OTHER ASSETS, LESS LIABILITIES - (5.61%) (3,927,508) - ----------------------------------------------------------------- NET ASSETS - 100.00% $70,018,901 ================================================================= /1/ Non-income earning securities. See notes to financial statements. 110 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) iSHARES RUSSELL MIDCAP GROWTH INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- COMMON STOCKS - 99.98% - ----------------------------------------------------------------- WellPoint Health Networks Inc./1/ 10,614 $ 778,006 Bed Bath & Beyond Inc./1/ 21,332 694,783 Intuit Inc./1/ 13,902 632,958 Newmont Mining Corp. 22,400 616,224 Starbucks Corp./1/ 28,216 582,096 Electronic Arts Inc./1/ 8,804 580,712 Stryker Corp. 9,829 566,150 Block (H & R) Inc. 13,401 562,976 Anthem Inc./1/ 8,406 546,390 Zimmer Holdings Inc./1/ 14,174 543,431 Allergan Inc. 9,802 533,229 Mattel Inc. 29,196 525,820 Biomet Inc. 19,584 521,522 Yum! Brands Inc./1/ 17,305 479,522 McKesson Corp. 16,830 476,794 Danaher Corp. 8,158 463,782 Moody's Corp. 9,536 462,496 St. Jude Medical Inc./1/ 12,872 459,530 International Game Technology Inc./1/ 6,574 454,526 Lexmark International Group Inc. "A"/1/ 9,489 445,983 Synovus Financial Corp. 21,569 444,753 Staples Inc./1/ 34,131 436,535 AmerisourceBergen Corp. 5,923 423,021 Gilead Sciences Inc./1/ 12,588 422,076 AutoZone Inc./1/ 5,290 417,169 SunGard Data Systems Inc./1/ 20,606 400,787 Ecolab Inc. 9,414 392,846 Fiserv Inc./1/ 13,958 391,941 KLA-Tencor Corp./1/ 13,825 386,270 MedImmune Inc./1/ 18,276 382,334 Harrah's Entertainment Inc./1/ 7,894 380,570 Veritas Software Corp./1/ 25,626 376,958 Apollo Group Inc. "A"/1/ 8,667 376,408 Nextel Communications Inc. "A"/1/ 48,889 369,112 Cintas Corp. 8,659 362,985 Health Management Associates Inc. "A"/1/ 17,637 356,620 Symantec Corp./1/ 10,533 354,646 Laboratory Corp. of America Holdings/1/ 10,425 352,156 IDEC Pharmaceuticals Corp./1/ 8,223 341,419 Coca-Cola Enterprises Inc. 15,967 339,139 Quest Diagnostics Inc./1/ 5,454 335,585 Adobe Systems Inc. 17,396 332,264 King Pharmaceuticals Inc./1/ 18,121 329,259 Pitney Bowes Inc. 10,641 324,444 Biogen Inc./1/ 10,851 317,609 IMS Health Inc. 21,098 315,837 Family Dollar Stores Inc. 11,675 313,824 New York Times Co. "A" 6,766 307,515 Darden Restaurants Inc. 12,652 306,684 Affiliated Computer Services Inc. "A"/1/ 7,089 301,637 Pepsi Bottling Group Inc. 12,824 300,082 Microchip Technology Inc./1/ 14,587 298,304 BJ Services Co./1/ 11,438 297,388 Avery Dennison Corp. 5,158 293,903 Mylan Laboratories Inc. 8,585 281,073 Dollar General Corp. 20,573 276,090 Caremark Rx Inc./1/ 16,211 275,587 Yahoo! Inc./1/ 28,532 273,051 Applera Corp. - Applied Biosystems Group 14,588 266,960 L-3 Communications Holdings Inc./1/ 5,031 265,134 DST Systems Inc./1/ 8,738 257,509 RadioShack Corp./1/ 12,705 254,862 Univision Communications Inc./1/ 11,145 254,106 Genzyme Corp. - General Division/1/ 12,280 253,091 Express Scripts Inc. "A"/1/ 4,622 251,991 Oxford Health Plans Inc./1/ 6,422 250,073 PeopleSoft Inc./1/ 20,111 248,773 Lincare Holdings Inc./1/ 7,868 244,223 Altera Corp./1/ 28,084 243,488 Clorox Co. 6,042 242,768 American Standard Companies Inc./1/ 3,747 238,384 Chiron Corp./1/ 6,799 237,557 Black & Decker Corp. 5,573 233,676 Waters Corp./1/ 9,601 232,824 ENSCO International Inc. 8,899 222,831 Amazon.com Inc./1/ 13,898 221,395 Michaels Stores Inc./1/ 4,842 221,279 ChoicePoint Inc./1/ 6,203 221,075 Schedules of Investments 111 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL MIDCAP GROWTH INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Marriott International Inc. "A" 7,523 $ 218,092 Smith International Inc./1/ 7,414 217,304 Varian Medical Systems Inc./1/ 4,975 213,875 Equifax Inc. 9,774 212,487 Deluxe Corp. 4,696 211,602 Synopsys Inc./1/ 5,493 209,558 Hershey Foods Corp. 3,365 208,798 Ross Stores Inc. 5,772 205,714 Halliburton Co. 15,927 205,618 DENTSPLY International Inc. 5,095 204,666 Sabre Holdings Corp./1/ 10,564 204,413 Novellus Systems Inc./1/ 9,787 203,667 First Health Group Corp./1/ 7,392 200,471 Westwood One Inc./1/ 5,569 199,092 Cadence Design Systems Inc./1/ 19,381 197,105 Expeditors International Washington Inc. 6,873 192,032 Molex Inc. 8,164 192,017 Convergys Corp./1/ 12,640 189,979 Mohawk Industries Inc./1/ 3,747 186,039 Patterson Dental Co./1/ 3,628 185,681 Universal Health Services Inc. "B"/1/ 3,592 183,731 Dollar Tree Stores Inc./1/ 8,305 183,042 CDW Computer Centers Inc./1/ 4,308 182,487 Ocean Energy Inc. 9,137 182,283 Robert Half International Inc./1/ 11,236 178,315 Commerce Bancorp Inc. 4,232 175,670 Tiffany & Co. 8,139 174,419 Amerada Hess Corp. 2,562 173,909 UST Inc. 6,162 173,830 PETsMART Inc./1/ 9,734 173,363 Brinker International Inc./1/ 6,584 170,526 Brown-Forman Corp. "B" 2,534 169,651 Murphy Oil Corp. 2,065 169,475 QLogic Corp./1/ 6,445 167,828 Wendy's International Inc. 5,021 166,245 Coach Inc./1/ 6,476 165,786 Beckman Coulter Inc. 4,265 165,055 Whole Foods Market Inc./1/ 3,838 164,420 Siebel Systems Inc./1/ 28,488 163,806 Alliant Techsystems Inc./1/ 2,359 163,361 Federated Investors Inc. "B" 5,990 161,670 Estee Lauder Companies Inc. "A" 5,586 160,542 Network Appliance Inc./1/ 21,660 158,768 Career Education Corp./1/ 3,279 157,418 Gallagher (Arthur J.) & Co. 6,300 155,295 Williams-Sonoma Inc./1/ 6,537 154,469 Jabil Circuit Inc./1/ 10,351 152,988 Gentex Corp./1/ 5,521 150,116 Dun & Bradstreet Corp./1/ 4,353 146,304 Kinder Morgan Inc. 4,049 143,537 Starwood Hotels & Resorts Worldwide Inc. 6,429 143,367 TCF Financial Corp. 3,349 141,763 Cephalon Inc./1/ 3,381 138,012 BEA Systems Inc./1/ 26,317 136,322 IVAX Corp./1/ 11,073 135,866 Fastenal Co. 4,290 135,478 BISYS Group Inc. (The)/1/ 8,048 134,482 Scripps (E.W.) Co. 1,925 133,403 SEI Investment Co. 5,522 131,865 CH Robinson Worldwide Inc. 4,900 131,859 National Semiconductor Corp./1/ 11,021 131,591 Maytag Corp. 5,659 131,176 Cooper Cameron Corp./1/ 3,141 131,168 Allied Capital Corp. 5,942 130,070 Brocade Communications Systems Inc./1/ 17,057 128,439 BMC Software Inc./1/ 9,807 128,177 Charles River Laboratories International Inc./1/ 3,259 127,916 Investors Financial Services Corp. 4,699 127,202 Barr Laboratories Inc./1/ 2,017 125,639 Rent-A-Center Inc./1/ 2,415 125,459 Mid Atlantic Medical Services Inc./1/ 3,451 124,926 Patterson-UTI Energy Inc./1/ 4,883 124,565 NVR Inc./1/ 414 124,130 Abercrombie & Fitch Co. "A"/1/ 6,223 122,406 McCormick & Co. Inc. 5,368 122,390 AdvancePCS/1/ 5,386 121,347 Fisher Scientific International Inc./1/ 3,984 120,914 Ceridian Corp./1/ 8,484 120,897 Steris Corp./1/ 4,818 120,016 Burlington Resources Inc. 3,123 119,798 112 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL MIDCAP GROWTH INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Fair Isaac and Co. Inc. 3,663 $ 119,780 Network Associates Inc./1/ 11,266 119,758 Eaton Vance Corp. 4,292 118,631 Legg Mason Inc. 2,701 114,955 SPX Corp./1/ 1,131 114,118 North Fork Bancorp Inc. 3,005 113,709 Qwest Communications International Inc./1/ 49,508 112,878 Millipore Corp. 3,525 112,060 Lamar Advertising Co./1/ 3,677 111,597 Cheesecake Factory (The)/1/ 3,691 110,103 Entercom Communications Corp./1/ 2,312 109,519 Millennium Pharmaceuticals Inc./1/ 11,714 109,174 Viad Corp. 5,331 108,912 Manpower Inc. 3,684 108,089 Reynolds & Reynolds Co. (The) "A" 4,786 107,398 Brown & Brown Inc. 3,535 106,050 Triad Hospitals Inc./1/ 2,794 106,032 Investment Technology Group Inc./1/ 3,589 105,014 Polaris Industries Inc. 1,691 104,842 Stanley Works (The) 3,203 104,642 Neuberger Berman Inc. 3,813 102,760 Henry Schein Inc./1/ 1,945 102,599 Andrx Group/1/ 4,615 102,222 Accredo Health Inc./1/ 2,143 102,178 DaVita Inc./1/ 4,316 101,858 Sprint Corp. (PCS Group)/1/ 51,885 101,695 Teradyne Inc./1/ 10,471 100,522 Juniper Networks Inc./1/ 20,681 99,269 BJ's Wholesale Club Inc./1/ 5,214 99,118 Herman Miller Inc. 5,546 98,497 Harman International Industries Inc. 1,883 97,445 Mercury Interactive Corp./1/ 5,630 96,611 Cytyc Corp./1/ 8,959 96,040 Activision Inc./1/ 3,999 95,696 Krispy Kreme Doughnuts Inc./1/ 3,022 94,468 Dreyer's Grand Ice Cream Inc. 1,352 94,451 Sealed Air Corp./1/ 5,554 93,807 Waddell & Reed Financial Inc. "A" 5,311 93,792 Celgene Corp./1/ 5,533 93,176 Certegy Inc./1/ 4,581 92,078 Level 3 Communications Inc./1/ 23,495 91,396 Renal Care Group Inc./1/ 2,727 89,691 LifePoint Hospitals Inc./1/ 2,867 89,416 Applebee's International Inc. 4,073 89,280 Ruby Tuesday Inc. 4,747 89,149 Leggett & Platt Inc. 4,490 88,857 Dow Jones & Co. Inc. 2,299 88,305 Graco Inc. 3,472 86,106 JDS Uniphase Corp./1/ 44,097 85,901 LSI Logic Corp./1/ 13,496 85,700 Catellus Development Corp./1/ 4,643 85,663 Chico's FAS Inc./1/ 5,300 84,429 Lam Research Corp./1/ 9,325 82,992 Zebra Technologies Corp. "A"/1/ 1,569 82,671 NVIDIA Corp./1/ 9,418 80,618 Performance Food Group Co./1/ 2,370 80,485 Noble Energy Inc. 2,369 80,475 Weight Watchers International Inc./1/ 1,842 79,869 Education Management Corp./1/ 1,803 79,819 Harris Corp. 2,378 79,639 Broadcom Corp. "A"/1/ 7,360 78,605 DeVry Inc./1/ 4,168 77,608 Edwards Lifesciences Corp./1/ 3,032 77,589 Jacobs Engineering Group Inc./1/ 2,503 77,293 Dial Corp. (The) 3,600 77,256 Becton, Dickinson & Co. 2,703 76,765 Affymetrix Inc./1/ 3,678 76,502 International Flavors & Fragrances Inc. 2,389 76,090 SICOR Inc./1/ 5,002 76,080 Catalina Marketing Corp./1/ 2,706 75,984 Doral Financial Corp. 3,138 75,751 Wiley (John) & Sons Inc. "A" 3,408 75,010 Fairchild Semiconductor International Corp. "A"/1/ 7,912 74,927 Rowan Companies Inc. 3,964 73,889 Iron Mountain Inc./1/ 2,954 73,820 Apogent Technologies Inc./1/ 3,948 73,670 Big Lots Inc./1/ 4,653 73,657 New York Community Bancorp Inc. 2,604 73,355 Diagnostic Products Corp. 1,584 72,864 Intersil Corp. "A"/1/ 5,607 72,667 National-Oilwell Inc./1/ 3,741 72,501 Schedules of Investments 113 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL MIDCAP GROWTH INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Freeport-McMoRan Copper & Gold Inc./1/ 5,339 $ 71,863 O'Reilly Automotive Inc./1/ 2,503 71,636 Cerner Corp./1/ 2,034 71,617 Medicis Pharmaceutical Corp. "A"/1/ 1,736 70,950 Omnicare Inc. 3,359 70,942 Citrix Systems Inc./1/ 11,660 70,310 Community Health Systems Inc./1/ 2,623 69,850 UTStarcom Inc./1/ 4,560 69,631 GTECH Holdings Corp./1/ 2,749 68,230 Manor Care Inc./1/ 3,030 68,114 Edwards (J.D.) & Co./1/ 7,336 67,858 Mettler Toledo International Inc./1/ 2,596 67,496 KPMG Consulting Inc./1/ 10,411 67,255 Watson Pharmaceuticals Inc./1/ 2,742 67,206 Pharmaceutical Product Development Inc./1/ 3,430 66,336 AGCO Corp./1/ 2,846 66,027 Agere Systems Inc. "B"/1/ 65,808 65,150 Citizens Communications Co./1/ 9,590 65,020 Donaldson Co. Inc. 1,881 64,575 Global Payments Inc. 2,518 64,461 Symbol Technologies Inc. 8,381 64,282 Newfield Exploration Co./1/ 1,912 64,224 CEC Entertainment Inc./1/ 1,881 64,161 Solectron Corp./1/ 30,047 63,399 T. Rowe Price Group Inc. 2,540 63,398 RF Micro Devices Inc./1/ 10,502 63,012 International Rectifier Corp./1/ 4,028 62,917 Outback Steakhouse Inc./1/ 2,280 62,654 99 Cents Only Stores/1/ 3,024 62,597 Pixar Inc./1/ 1,295 62,290 Henry (Jack) & Associates Inc. 4,971 61,790 Harte-Hanks Inc. 3,305 61,506 St. Joe Company (The) 2,193 60,527 Varco International Inc./1/ 3,543 59,948 Allied Waste Industries Inc./1/ 8,071 59,322 Thermo Electron Corp./1/ 3,627 58,504 Invitrogen Corp./1/ 1,709 58,226 Acxiom Corp./1/ 4,078 57,826 Affiliated Managers Group Inc./1/ 1,296 57,815 Sanmina-SCI Corp./1/ 20,590 57,034 Hilton Hotels Corp. 4,887 55,614 Grant Prideco Inc./1/ 6,467 55,228 Furniture Brands International Inc./1/ 2,395 54,965 Tellabs Inc./1/ 13,482 54,872 Tootsie Roll Industries Inc. 1,842 54,744 Tidewater Inc. 2,013 54,331 Integrated Circuit Systems Inc./1/ 3,454 54,228 Advance Auto Parts Inc./1/ 1,021 53,848 Emulex Corp./1/ 4,738 53,350 Hispanic Broadcasting Corp./1/ 2,847 53,097 Copart Inc./1/ 4,893 53,089 Human Genome Sciences Inc./1/ 4,399 53,052 WebMD Corp./1/ 10,454 52,793 Pride International Inc./1/ 4,055 52,715 BlackRock Inc./1/ 1,254 51,941 Church & Dwight Co. Inc. 1,539 51,018 Constellation Brands Inc./1/ 2,201 50,843 Alliance Data Systems Corp./1/ 3,351 50,768 Diamond Offshore Drilling Inc. 2,539 50,653 Scholastic Corp./1/ 1,115 49,818 Corning Inc./1/ 30,072 48,115 Comverse Technology Inc./1/ 6,841 47,819 Rational Software Corp./1/ 10,997 47,507 Talbots Inc. (The) 1,688 47,264 PMC-Sierra Inc./1/ 12,163 47,192 CIENA Corp./1/ 15,854 47,086 Sigma-Aldrich Corp. 952 46,905 Radio One Inc. "D"/1/ 2,832 46,700 National Instruments Corp./1/ 2,132 46,669 ARAMARK Corp. "B"/1/ 2,210 46,410 Cymer Inc./1/ 2,485 46,320 Titan Corp. (The)/1/ 4,760 45,696 Cypress Semiconductor Corp./1/ 6,921 45,402 Perot Systems Corp. "A"/1/ 4,766 44,324 Ball Corp. 877 44,192 Amphenol Corp. "A"/1/ 1,417 43,927 Timberland Co. "A"/1/ 1,370 43,402 Pier 1 Imports Inc. 2,271 43,308 Semtech Corp./1/ 4,463 43,291 E*TRADE Group Inc./1/ 9,651 42,947 American Eagle Outfitters Inc./1/ 3,517 42,415 Coventry Health Care Inc./1/ 1,304 42,380 114 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL MIDCAP GROWTH INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- Valspar Corp. (The) 1,127 $ 42,037 CSG Systems International Inc./1/ 3,853 41,998 Advanced Fibre Communications Inc./1/ 3,146 41,747 Cox Radio Inc. "A"/1/ 1,594 41,699 Advanced Micro Devices Inc./1/ 7,798 41,641 Quintiles Transnational Corp./1/ 4,340 41,273 Integrated Device Technology Inc./1/ 3,928 41,008 VeriSign Inc./1/ 8,109 40,950 Ethan Allen Interiors Inc. 1,238 40,062 Swift Transportation Co. Inc./1/ 2,539 39,608 International Speedway Corp. "A" 990 39,333 AmeriCredit Corp./1/ 4,843 39,083 Provident Financial Group Inc. 1,548 38,839 Computer Associates International Inc. 4,044 38,822 Foot Locker Inc./1/ 3,879 38,751 Polycom Inc./1/ 5,528 37,535 Providian Financial Corp./1/ 7,511 36,804 Expedia Inc. "A"/1/ 720 36,468 Sybase Inc./1/ 3,133 36,405 Getty Images Inc./1/ 1,799 36,088 John Nuveen Co. "A" 1,583 36,013 Total System Services Inc. 2,714 35,689 Flowserve Corp./1/ 3,566 35,660 ITT Industries Inc. 570 35,528 TMP Worldwide Inc./1/ 3,908 35,172 University of Phoenix Online/1/ 1,089 35,011 Hotels.com "A"/1/ 686 34,698 Orthodontic Centers of America Inc./1/ 3,144 33,641 Pioneer Natural Resources Co./1/ 1,378 33,417 Compuware Corp./1/ 10,812 32,977 SkyWest Inc. 2,500 32,750 Health Net Inc./1/ 1,493 32,025 Readers Digest Association Inc. (The) "A" 2,039 31,910 Columbia Sportswear Co./1/ 906 31,456 Applied Micro Circuits Corp./1/ 10,967 31,366 Computer Sciences Corp./1/ 1,128 31,347 Teleflex Inc. 669 30,493 Newell Rubbermaid Inc. 981 30,283 AES Corp. (The)/1/ 12,049 30,243 Tech Data Corp./1/ 1,136 29,990 Autodesk Inc. 2,296 29,090 Circuit City Stores Inc. - CarMax Group/1/ 1,806 28,986 Rockwell Collins 1,314 28,829 Circuit City Stores Inc. 1,886 28,573 Forest Oil Corp./1/ 1,120 28,560 Micrel Inc./1/ 4,581 28,219 Donnelley (R.R.) & Sons Co. 1,190 27,977 Unisys Corp./1/ 3,974 27,818 Rouse Co. 862 27,541 ADC Telecommunications Inc./1/ 23,526 27,054 D.R. Horton Inc. 1,450 26,999 Shaw Group Inc. (The)/1/ 1,878 26,668 Energizer Holdings Inc./1/ 865 26,296 Macromedia Inc./1/ 3,390 26,205 CheckFree Corp./1/ 2,283 25,981 Ticketmaster "B"/1/ 1,700 25,925 Advent Software Inc./1/ 2,255 25,820 Hudson United Bancorp 946 25,164 Rite Aid Corp./1/ 11,751 24,677 Blockbuster Inc. 945 23,436 PETCO Animal Supplies Inc./1/ 1,068 23,165 Westamerica Bancorp 575 23,161 Vishay Intertechnology Inc./1/ 2,626 23,109 Jones Apparel Group Inc./1/ 740 22,718 Stilwell Financial Inc. 1,873 22,607 Fluor Corp. 918 22,436 Atmel Corp./1/ 20,890 22,143 Arrow Electronics Inc./1/ 1,753 22,140 Ingram Micro Inc. "A"/1/ 1,650 21,945 Sonic Automotive Inc./1/ 1,239 21,930 Ambac Financial Group Inc. 391 21,071 Gemstar-TV Guide International Inc./1/ 8,166 20,578 Pogo Producing Co. 601 20,470 Barnes & Noble Inc./1/ 942 19,933 RealNetworks Inc./1/ 5,462 19,718 CONSOL Energy Inc. 1,530 19,370 Calpine Corp./1/ 7,731 19,096 Zale Corp./1/ 626 18,880 Tektronix Inc./1/ 1,143 18,779 Metro-Goldwyn-Mayer Inc./1/ 1,566 18,714 Schedules of Investments 115 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL MIDCAP GROWTH INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------- AMN Healthcare Services Inc./1/ 1,008 $ 18,648 Cumulus Media Inc. "A"/1/ 1,054 18,603 PanAmSat Corp./1/ 1,070 18,565 West Corp./1/ 1,317 18,438 Lin TV Corp. "A"/1/ 737 18,241 PerkinElmer Inc. 3,302 17,996 GameStop Corp./1/ 875 17,894 MKS Instruments Inc./1/ 1,575 17,199 Adaptec Inc./1/ 3,856 17,005 Meredith Corp. 395 17,005 Scotts Co. (The) "A"/1/ 390 16,259 Advanced Medical Optics Inc./1/ 1,693 16,100 American Power Conversion Corp./1/ 1,656 15,831 HCC Insurance Holdings Inc. 658 15,799 Extended Stay America Inc./1/ 1,194 15,164 Storage Technology Corp./1/ 1,430 15,029 ICN Pharmaceuticals Inc. 1,645 14,904 MSC Industrial Direct Co. Inc. "A"/1/ 1,372 14,571 Vulcan Materials Co. 384 13,885 CBRL Group Inc. 602 13,738 XTO Energy Inc. 643 13,252 Lennar Corp. 226 12,606 Callaway Golf Co. 1,198 12,459 Cabot Corp. 593 12,453 HON Industries Inc. 462 11,758 Regal Entertainment Group "A"/1/ 612 10,894 Conexant Systems Inc./1/ 9,498 10,543 MGM Grand Inc./1/ 275 10,257 Mirant Corp./1/ 4,608 10,184 Mandalay Resort Group/1/ 303 10,166 Borders Group Inc./1/ 642 10,144 Greater Bay Bancorp 549 9,986 Amkor Technology Inc./1/ 4,082 9,715 FMC Technologies Inc./1/ 577 9,671 OM Group Inc. 222 9,502 National Processing Inc./1/ 542 9,209 Healthsouth Corp./1/ 2,032 8,433 PayPal Inc./1/ 388 8,113 Alberto-Culver Co. "B" 159 7,796 Markel Corp./1/ 39 7,768 Pall Corp. 489 7,721 LaBranche & Co. Inc./1/ 376 7,614 United Rentals Inc./1/ 814 6,870 Ribapharm Inc./1/ 1,492 6,714 La-Z-Boy Inc. 288 6,682 ArvinMeritor Inc. 352 6,582 Williams Companies Inc. 2,730 6,170 i2 Technologies Inc./1/ 11,206 5,827 Silicon Valley Bancshares/1/ 297 5,028 Emmis Communications Corp./1/ 261 4,959 Avaya Inc./1/ 3,446 4,928 JetBlue Airways Corp./1/ 102 4,114 UnitedGlobalCom Inc. "A"/1/ 279 458 - ----------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $75,209,292) 57,023,107 - ----------------------------------------------------------------- SHORT TERM INSTRUMENTS - 8.21% - ----------------------------------------------------------------- Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 3,982,113 3,982,113 Dreyfus Money Market Fund 217,499 217,499 Goldman Sachs Financial Square Prime Obligation Fund 158,301 158,301 Providian Temp Cash Money Market Fund 326,249 326,249 - ----------------------------------------------------------------- TOTAL SHORT TERM INSTRUMENTS (Cost: $4,684,162) 4,684,162 - ----------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES - 108.19% (Cost $79,893,454) 61,707,269 - ----------------------------------------------------------------- OTHER ASSETS, LESS LIABILITIES - (8.19%) (4,671,669) - ----------------------------------------------------------------- NET ASSETS - 100.00% $57,035,600 ================================================================= /1/ Non-Income earning securities. See notes to financial statements. 116 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) iSHARES RUSSELL MIDCAP VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ COMMON STOCKS - 99.79% - ------------------------------------------------------------------ Entergy Corp. 14,760 $ 614,016 Consolidated Edison Inc. 14,086 566,539 SouthTrust Corp. 22,961 556,804 Praxair Inc. 10,824 553,215 FirstEnergy Corp. 18,362 548,840 Apache Corp. 9,104 541,233 Eastman Kodak Co. 19,333 526,631 Norfolk Southern Corp. 25,708 519,045 Newell Rubbermaid Inc. 16,781 518,029 Unocal Corp. 16,203 508,612 PPG Industries Inc. 11,183 499,880 AmSouth Bancorp 23,952 496,764 Regions Financial Corp. 15,190 496,257 Archer-Daniels-Midland Co. 37,780 472,628 Fortune Brands Inc. 9,963 471,150 Marathon Oil Corp. 20,527 465,552 Devon Energy Corp. 9,561 461,318 Charter One Financial Inc. 15,328 455,538 Johnson Controls Inc. 5,871 451,010 Equity Residential 18,191 435,493 DTE Energy Co. 10,694 435,246 May Department Stores Co. (The) 19,067 434,156 St. Paul Companies Inc. 14,861 426,808 Public Service Enterprise Group Inc. 13,652 416,386 Becton, Dickinson & Co. 14,657 416,259 M&T Bank Corp. 5,234 412,492 TRW Inc. 7,000 409,850 Burlington Resources Inc. 10,472 401,706 Jefferson-Pilot Corp. 9,955 399,196 Ameren Corp. 9,581 399,049 Federated Department Stores Inc./1/ 13,312 391,905 Marshall & Ilsley Corp. 14,049 391,827 MBIA Inc. 9,800 391,510 Loews Corp. 8,878 380,777 Lincoln National Corp. 12,373 377,995 CSX Corp. 14,062 370,956 Union Planters Corp. 13,419 368,486 Genuine Parts Co. 11,530 353,279 Bear Stearns Companies Inc. (The) 6,253 352,669 Cinergy Corp. 11,052 347,364 Aetna Inc. 9,667 346,175 ITT Industries Inc. 5,490 342,192 National Commerce Financial Corp. 13,658 342,133 Apple Computer Inc./1/ 23,561 341,635 Dover Corp. 13,423 340,676 UNUMProvident Corp. 16,092 327,472 Cincinnati Financial Corp. 9,128 324,774 Countrywide Credit Industries Inc. 6,873 324,062 AON Corp. 15,784 323,414 Rohm & Haas Co. "A" 10,359 321,129 PPL Corp. 9,767 317,818 Delphi Automotive Systems Corp. 37,130 317,462 KeySpan Corp. 9,323 312,321 Knight Ridder Inc. 5,520 311,383 Simon Property Group Inc. 8,640 308,707 North Fork Bancorp Inc. 8,139 307,980 Huntington Bancshares Inc. 16,382 297,989 Parker Hannifin Corp. 7,796 297,885 Eaton Corp. 4,652 296,518 First Tennessee National Corp. 8,398 291,159 PG&E Corp./1/ 25,797 290,474 Kerr-McGee Corp. 6,638 288,355 Popular Inc. 9,047 285,885 Penney (J.C.) Co. Inc. 17,719 282,086 Ambac Financial Group Inc. 5,205 280,497 Archstone-Smith Trust 11,647 278,130 Plum Creek Timber Co. Inc. 12,223 276,362 EOG Resources Inc. 7,684 276,317 Torchmark Corp. 8,044 275,587 Computer Sciences Corp./1/ 9,727 270,313 SAFECO Corp. 8,467 269,081 Constellation Energy Group Inc. 10,850 268,972 Textron Inc. 7,827 266,901 Zions Bancorp 6,081 264,706 Prologis Trust 10,618 264,494 Monsanto Co. 17,289 264,349 MeadWestvaco Corp. 13,225 254,052 Computer Associates International Inc. 26,445 253,872 Office Depot Inc./1/ 20,424 252,032 Schedules of Investments 117 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL MIDCAP VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Compass Bancshares Inc. 8,456 $ 249,367 MGIC Investment Corp. 6,037 246,491 R.J. Reynolds Tobacco Holdings Inc. 6,102 246,033 Xcel Energy Inc. 26,229 244,192 PACCAR Inc. 7,207 243,525 Rockwell Collins 10,910 239,365 Dean Foods Co./1/ 5,956 236,930 NiSource Inc. 13,742 236,775 Xerox Corp./1/ 47,714 236,184 Sempra Energy 11,983 235,466 GreenPoint Financial Corp. 5,633 235,121 Banknorth Group Inc. 9,701 230,399 Clorox Co. 5,658 227,338 Old Republic International Corp. 7,909 224,457 Jones Apparel Group Inc./1/ 7,295 223,957 Sovereign Bancorp Inc. 17,245 222,461 Grainger (W.W.) Inc. 5,152 219,218 Duke-Weeks Realty Corp. 8,900 219,118 ServiceMaster Co. 19,997 216,967 Edison International/1/ 21,596 215,960 Vulcan Materials Co. 5,936 214,646 General Growth Properties Inc. 4,133 212,850 Hibernia Corp. "A" 10,592 211,734 Public Storage Inc. 6,598 210,476 CenturyTel Inc. 9,366 210,079 Apartment Investment & Management Co. "A" 5,406 210,023 Engelhard Corp. 8,584 204,557 Sherwin-Williams Co. 8,597 203,577 Pepco Holdings Inc. 10,134 202,173 VF Corp. 5,610 201,848 Georgia-Pacific Corp. 15,245 199,557 Hilton Hotels Corp. 17,532 199,514 Hershey Foods Corp. 3,169 196,636 Nucor Corp. 5,183 196,436 Sigma-Aldrich Corp. 3,975 195,848 Whirlpool Corp. 4,269 195,776 Eastman Chemical Co. 5,110 195,049 Radian Group Inc. 5,942 194,066 Pitney Bowes Inc. 6,308 192,331 Republic Services Inc. "A"/1/ 10,179 191,365 Bard (C.R.) Inc. 3,496 190,986 Energy East Corp. 9,568 189,542 Kimco Realty Corp. 6,093 189,492 Vornado Realty Trust 4,755 187,585 Hillenbrand Industries Inc. 3,431 186,303 Halliburton Co. 14,414 186,085 Wisconsin Energy Corp. 7,637 185,579 Lennar Corp. 3,312 184,743 Circuit City Stores Inc. 12,142 183,951 Fidelity National Financial Inc. 6,353 182,522 Lear Corp./1/ 4,339 180,719 SCANA Corp. 6,937 180,501 Centex Corp. 4,069 180,460 Reliant Energy Inc. 17,791 178,088 Mercantile Bankshares Corp. 4,646 177,338 Valero Energy Corp. 6,689 177,058 First Virginia Banks Inc. 4,745 176,989 Liz Claiborne Inc. 7,062 176,197 Rockwell International Corp. 10,805 175,797 Leggett & Platt Inc. 8,878 175,696 Telephone & Data Systems Inc. 3,470 175,062 Tyson Foods Inc. "A" 14,877 173,020 Marriott International Inc. "A" 5,957 172,693 Pactiv Corp./1/ 10,460 172,067 Edwards (A.G.) Inc. 5,333 170,549 Valley National Bancorp 6,283 167,128 AvalonBay Communities Inc. 3,974 166,113 Bemis Co. 3,339 164,947 Washington Post Company (The) "B" 254 164,846 Boston Properties Inc. 4,417 164,312 Starwood Hotels & Resorts Worldwide Inc. 7,353 163,972 PMI Group Inc. (The) 5,987 162,906 Health Care Property Investors Inc. 3,802 161,965 TECO Energy Inc. 10,163 161,388 Energizer Holdings Inc./1/ 5,292 160,877 AMB Property Corp. 5,564 160,800 Associated Bancorp 5,054 160,363 MGM Grand Inc./1/ 4,272 159,346 UST Inc. 5,613 158,343 118 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL MIDCAP VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Amerada Hess Corp. 2,322 $ 157,617 Stilwell Financial Inc. 13,030 157,272 Diebold Inc. 4,760 156,699 Golden State Bancorp Inc. 4,802 155,201 SPX Corp./1/ 1,536 154,982 Pioneer Natural Resources Co./1/ 6,374 154,570 Liberty Property Trust 4,972 154,132 Commerce Bancshares Inc. 3,895 152,178 AutoNation Inc./1/ 13,147 151,453 American Water Works Inc. 3,382 151,040 Ball Corp. 2,968 149,558 XTO Energy Inc. 7,092 146,166 Equitable Resources Inc. 4,211 145,490 Northeast Utilities 8,585 145,087 Host Marriott Corp./1/ 15,564 144,434 Pinnacle West Capital Corp. 5,166 143,408 Smurfit-Stone Container Corp./1/ 11,403 143,222 Park Place Entertainment Corp./1/ 17,993 143,044 SUPERVALU Inc. 8,855 143,008 UnionBanCal Corp. 3,379 141,952 Phelps Dodge Corp./1/ 5,525 141,606 KB HOME 2,882 140,757 Protective Life Corp. 4,562 140,373 NSTAR 3,524 139,374 Pulte Homes Inc. 3,265 139,187 Humana Inc./1/ 11,188 138,731 Donnelley (R.R.) & Sons Co. 5,883 138,309 DPL Inc. 8,380 137,851 Hospitality Properties Trust 4,159 137,746 Autoliv Inc. 6,489 136,788 Astoria Financial Corp. 5,603 136,713 Sonoco Products Co. 6,359 135,510 Sunoco Inc. 4,458 134,453 Rouse Co. 4,185 133,711 New York Community Bancorp Inc. 4,745 133,667 Toys R Us Inc./1/ 12,889 131,210 Thermo Electron Corp./1/ 8,083 130,379 Scientific-Atlanta Inc. 10,362 129,629 Fulton Financial Corp. 6,833 128,460 Dana Corp. 9,814 128,367 Belo (A.H.) Corp. 5,799 126,882 Wilmington Trust Corp. 4,365 126,236 Bank of Hawaii Corp. 4,516 125,996 New York Times Co. "A" 2,768 125,806 Brunswick Corp. 5,934 124,851 City National Corp. 2,663 124,549 Health Net Inc./1/ 5,786 124,110 Unisys Corp./1/ 17,698 123,886 Ashland Inc. 4,614 123,609 Bowater Inc. 3,473 122,597 Pentair Inc. 3,269 121,509 Temple-Inland Inc. 3,123 120,641 FirstMerit Corp. 5,601 119,973 Goodrich (B.F.) Co. 6,348 119,850 Valassis Communications Inc./1/ 3,364 117,975 D.R. Horton Inc. 6,314 117,567 Puget Energy Inc. 5,754 117,439 T. Rowe Price Group Inc. 4,683 116,888 Cullen/Frost Bankers Inc. 3,405 116,281 Pennzoil-Quaker State Co. 5,292 116,265 Questar Corp. 5,050 115,342 New Plan Excel Realty Trust 6,251 115,268 Smithfield Foods Inc./1/ 7,334 115,144 Alliant Energy Corp. 5,953 114,595 Anthem Inc./1/ 1,748 113,620 Helmerich & Payne Inc. 3,317 113,541 United Dominion Realty Trust Inc. 7,109 113,104 Nordstrom Inc. 6,264 112,376 AmerisourceBergen Corp. 1,572 112,272 Pall Corp. 7,078 111,762 Pogo Producing Co. 3,262 111,104 Weingarten Realty Investors 3,035 111,081 Bausch & Lomb Inc. 3,318 110,058 Fluor Corp. 4,503 110,053 Yum! Brands Inc./1/ 3,960 109,732 Webster Financial Corp. 3,249 109,101 Allegheny Energy Inc. 8,317 108,953 NCR Corp./1/ 5,498 108,860 ALLETE Inc. 5,009 108,194 Alberto-Culver Co. "B" 2,202 107,964 Hormel Foods Corp. 4,916 107,562 MDU Resources Group Inc. 4,662 106,433 Schedules of Investments 119 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL MIDCAP VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ RPM Inc. 7,557 $ 106,251 BancorpSouth Inc. 5,376 105,907 Martin Marietta Materials Inc. 3,228 105,136 StanCorp Financial Group Inc. 1,974 104,425 Hawaiian Electric Industries Inc. 2,407 103,742 Coors (Adolf) Company "B" 1,842 103,705 Hasbro Inc. 9,311 103,631 Wendy's International Inc. 3,100 102,641 Qwest Communications International Inc./1/ 44,987 102,570 Avery Dennison Corp. 1,800 102,564 Markel Corp./1/ 514 102,379 Watson Pharmaceuticals Inc./1/ 4,175 102,329 Meredith Corp. 2,366 101,856 Annaly Mortgage Management Inc. 5,489 101,272 Old National Bancorp 4,070 101,180 Healthsouth Corp./1/ 24,231 100,559 Lyondell Chemical Co. 8,344 99,627 McCormick & Co. Inc. 4,369 99,613 Colonial BancGroup Inc. (The) 7,929 98,320 Vectren Corp. 4,455 98,010 Lee Enterprises Inc. 2,941 96,641 Lubrizol Corp. 3,418 96,627 First American Corp. 4,704 96,103 Ryder System Inc. 3,793 94,559 Unitrin Inc. 3,079 94,525 Hubbell Inc. "B" 3,249 94,448 BMC Software Inc./1/ 7,205 94,169 BRE Properties Inc. "A" 3,055 93,941 National Fuel Gas Co. 4,713 93,647 CNF Transportation Inc. 2,983 93,636 Washington Federal Inc. 4,176 93,187 Transatlantic Holdings Inc. 1,399 92,964 3Com Corp./1/ 23,594 92,960 Dillards Inc. "A" 4,589 92,606 Sky Financial Group Inc. 4,621 92,004 Mack-Cali Realty Corp. 2,849 91,538 Arden Realty Inc. 3,846 90,958 Phoenix Companies Inc. 6,641 90,450 American Power Conversion Corp./1/ 9,422 90,074 HON Industries Inc. 3,502 89,126 Snap-On Inc. 3,867 88,864 CarrAmerica Realty Corp. 3,523 88,674 BorgWarner Inc. 1,766 87,664 Vertex Pharmaceuticals Inc./1/ 4,727 87,402 Manor Care Inc./1/ 3,886 87,357 Triad Hospitals Inc./1/ 2,297 87,171 OGE Energy Corp. 5,139 86,695 First Midwest Bancorp Inc. 3,223 86,570 Independence Community Bank Corp. 3,445 86,435 IMC Global Inc. 7,161 86,290 TCF Financial Corp. 2,028 85,845 Berkley (W.R.) Corp. 2,510 85,340 CenterPoint Properties Corp. 1,533 85,082 HCC Insurance Holdings Inc. 3,535 84,875 Valspar Corp. (The) 2,275 84,858 Roslyn Bancorp Inc. 4,860 84,613 Crescent Real Estate Equities Co. 5,384 84,529 Whitney Holding Corp. 2,648 84,498 iStar Financial Inc. 3,017 84,235 Saks Inc./1/ 7,989 84,124 International Flavors & Fragrances Inc. 2,641 84,116 Goodyear Tire & Rubber Co. 9,437 83,895 Kinder Morgan Inc. 2,354 83,449 Owens-Illinois Inc./1/ 7,355 83,259 Advanced Micro Devices Inc./1/ 15,558 83,080 NICOR Inc. 2,943 82,993 Reebok International Ltd./1/ 3,289 82,389 Highwoods Properties Inc. 3,519 82,345 Visteon Corp. 8,656 81,972 FNB Corp. 2,913 81,622 Leucadia National Corp. 2,396 81,464 First Industrial Realty Trust Inc. 2,620 81,194 Dole Food Co. 2,789 80,965 Cablevision Systems Corp./1/ 8,931 80,915 Pittston Brink's Group 3,610 80,864 Reckson Associates Realty Corp. 3,550 80,834 Mandalay Resort Group/1/ 2,409 80,822 Avnet Inc. 7,477 80,677 Peoples Energy Corp. 2,361 79,542 120 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL MIDCAP VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Hudson City Bancorp Inc. 4,900 $ 79,527 PepsiAmericas Inc. 5,597 79,477 Camden Property Trust 2,393 79,328 Pier 1 Imports Inc. 4,156 79,255 Lancaster Colony Corp. 1,880 79,186 Developers Diversified Realty Corp. 3,585 78,906 McKesson Corp. 2,784 78,871 Navistar International Corp. 3,615 78,373 ArvinMeritor Inc. 4,189 78,334 JDS Uniphase Corp./1/ 40,014 77,947 Great Plains Energy Inc. 4,068 77,902 LSI Logic Corp./1/ 12,243 77,743 Legg Mason Inc. 1,815 77,246 Rayonier Inc. 1,843 77,240 United States Steel Corp. 6,608 76,719 Boise Cascade Corp. 3,362 76,654 Philadelphia Suburban Corp. 3,775 76,633 Borders Group Inc./1/ 4,834 76,377 Teleflex Inc. 1,674 76,301 AmerUs Group Co. 2,690 76,288 Delta Air Lines Inc. 8,166 75,862 Park National Corp. 804 75,335 Cabot Corp. 3,586 75,306 Millennium Pharmaceuticals Inc./1/ 8,064 75,156 IKON Office Solutions Inc. 9,500 74,860 Precision Castparts Corp. 3,450 74,796 Tektronix Inc./1/ 4,545 74,674 Readers Digest Association Inc. (The) "A" 4,754 74,400 York International Corp. 2,621 73,912 MONY Group Inc. (The) 2,994 73,862 McClatchy Co. (The) "A" 1,210 73,750 Mercury General Corp. 1,721 73,659 IndyMac Bancorp Inc./1/ 3,800 73,226 La-Z-Boy Inc. 3,132 72,662 Harsco Corp. 2,667 72,516 Citizens Banking Corp. 2,987 72,196 Vishay Intertechnology Inc./1/ 8,188 72,054 ICOS Corp./1/ 3,426 71,843 OM Group Inc. 1,661 71,091 Alleghany Corp./1/ 374 70,873 Raymond James Financial Inc. 2,590 70,111 American Greetings Corp. "A" 4,354 70,099 Autodesk Inc. 5,511 69,824 Westamerica Bancorp 1,706 68,718 Cooper Tire & Rubber Co. 4,223 68,159 Packaging Corporation of America/1/ 3,884 68,009 Invitrogen Corp./1/ 1,986 67,663 Citizens Communications Co./1/ 9,955 67,495 Ryland Group Inc. 1,812 67,352 Trizec Properties Inc. 5,921 67,203 CMS Energy Corp. 8,321 67,067 CBRL Group Inc. 2,935 66,977 Clayton Homes Inc. 6,079 66,747 Constellation Brands Inc./1/ 2,876 66,436 Ocean Energy Inc. 3,316 66,154 Trustmark Corp. 2,896 66,029 Williams Companies Inc. 29,128 65,829 Crane Co. 3,330 65,801 Broadcom Corp. "A"/1/ 6,135 65,522 Toll Brothers Inc./1/ 2,995 65,111 AptarGroup Inc. 2,391 64,246 Dial Corp. (The) 2,982 63,994 Harris Corp. 1,909 63,932 Arrow Electronics Inc./1/ 5,057 63,870 Erie Indemnity Co. "A" 1,532 63,823 Neiman-Marcus Group Inc. "A"/1/ 2,400 63,000 Newmont Mining Corp. 2,230 61,347 Tellabs Inc./1/ 14,970 60,928 IDACORP Inc. 2,503 60,898 Lafarge North America Inc. 2,100 60,837 Tech Data Corp./1/ 2,292 60,509 Storage Technology Corp./1/ 5,695 59,854 Symbol Technologies Inc. 7,567 58,039 Solectron Corp./1/ 27,243 57,483 Apogent Technologies Inc./1/ 3,080 57,473 Hudson United Bancorp 2,155 57,323 Foot Locker Inc./1/ 5,728 57,223 Corning Inc./1/ 35,629 57,006 Veritas Software Corp./1/ 3,842 56,516 Winn-Dixie Stores Inc. 4,284 56,206 Noble Energy Inc. 1,637 55,609 Schedules of Investments 121 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL MIDCAP VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ FMC Technologies Inc./1/ 3,302 $ 55,342 Cousins Properties Inc. 2,406 55,338 LaBranche & Co. Inc./1/ 2,728 55,242 Estee Lauder Companies Inc. "A" 1,907 54,807 GATX Corp. 2,759 54,628 Big Lots Inc./1/ 3,443 54,503 Cummins Inc. 2,298 54,279 Timken Co. (The) 3,221 53,952 AGCO Corp./1/ 2,316 53,731 IDT Corp./1/ 3,284 53,529 Stanley Works (The) 1,615 52,762 Outback Steakhouse Inc./1/ 1,912 52,542 Ingram Micro Inc. "A"/1/ 3,894 51,790 Providian Financial Corp./1/ 10,541 51,651 Omnicare Inc. 2,414 50,984 Hercules Inc./1/ 5,377 49,522 Mirant Corp./1/ 22,398 49,500 Regency Centers Corp. 1,587 49,197 Zale Corp./1/ 1,631 49,191 Manpower Inc. 1,676 49,174 Downey Financial Corp. 1,424 48,772 Aquila Inc. 11,814 48,437 KEMET Corp./1/ 5,658 48,376 Rowan Companies Inc. 2,590 48,278 Human Genome Sciences Inc./1/ 3,999 48,228 Agere Systems Inc. "B"/1/ 48,687 48,200 Forest City Enterprises Inc. "A" 1,473 47,873 WebMD Corp./1/ 9,448 47,712 Pride International Inc./1/ 3,660 47,580 Lamar Advertising Co./1/ 1,567 47,558 American National Insurance Co. 686 47,341 Extended Stay America Inc./1/ 3,698 46,965 Henry Schein Inc./1/ 890 46,948 Silicon Valley Bancshares/1/ 2,764 46,795 Tidewater Inc. 1,717 46,342 Albemarle Corp. 1,824 46,129 Murphy Oil Corp. 560 45,959 AK Steel Holding Corp./1/ 6,284 45,936 Greater Bay Bancorp 2,522 45,875 American Financial Group Inc. 1,977 45,511 Barnes & Noble Inc./1/ 2,108 44,605 Sanmina-SCI Corp./1/ 16,075 44,528 E*TRADE Group Inc./1/ 9,939 44,229 Scholastic Corp./1/ 985 44,010 ENSCO International Inc. 1,755 43,945 American Axle & Manufacturing Holdings Inc./1/ 1,756 43,865 Mattel Inc. 2,412 43,440 Coventry Health Care Inc./1/ 1,325 43,063 Comverse Technology Inc./1/ 6,157 43,037 AMR Corp./1/ 10,285 42,991 Media General Inc. "A" 845 42,968 Dow Jones & Co. Inc. 1,107 42,520 Andrew Corp./1/ 6,477 42,424 Allmerica Financial Corp. 3,522 42,264 CIENA Corp./1/ 14,106 41,895 Polo Ralph Lauren Corp./1/ 2,015 41,872 CNA Financial Corp./1/ 1,658 41,450 Emmis Communications Corp./1/ 2,173 41,287 AES Corp. (The)/1/ 16,421 41,217 Newfield Exploration Co./1/ 1,215 40,812 Calpine Corp./1/ 16,348 40,380 Scotts Co. (The) "A"/1/ 949 39,564 American Standard Companies Inc./1/ 618 39,317 Peabody Energy Corp. 1,512 38,556 Entravision Communications Corp./1/ 2,873 38,067 Radio One Inc. "D"/1/ 2,285 37,680 Sybase Inc./1/ 3,241 37,660 National-Oilwell Inc./1/ 1,934 37,481 Compuware Corp./1/ 12,282 37,460 Quintiles Transnational Corp./1/ 3,929 37,365 People's Bank 1,651 37,032 VeriSign Inc./1/ 7,311 36,921 Genzyme Corp. - General Division/1/ 1,790 36,892 Allegheny Technologies Inc. 5,310 36,745 Nationwide Financial Services Inc. 1,376 36,739 International Speedway Corp. "A" 921 36,591 ICN Pharmaceuticals Inc. 4,001 36,249 Intersil Corp. "A"/1/ 2,794 36,210 ADC Telecommunications Inc./1/ 31,225 35,908 Iron Mountain Inc./1/ 1,421 35,511 Callaway Golf Co. 3,410 35,464 122 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL MIDCAP VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Provident Financial Group Inc. 1,405 $ 35,251 Gateway Inc./1/ 11,721 34,811 Integrated Device Technology Inc./1/ 3,328 34,744 Advanced Fibre Communications Inc./1/ 2,617 34,728 Rite Aid Corp./1/ 16,120 33,852 Dun & Bradstreet Corp./1/ 995 33,442 United States Cellular Corp./1/ 1,126 33,307 Capitol Federal Financial 1,493 33,085 Varco International Inc./1/ 1,934 32,723 Loews Corporation - Carolina Group 1,739 32,711 Church & Dwight Co. Inc. 986 32,686 GTECH Holdings Corp./1/ 1,316 32,663 Molex Inc. 1,331 31,305 Ethan Allen Interiors Inc. 961 31,098 Edwards Lifesciences Corp./1/ 1,211 30,989 BOK Financial Corp./1/ 945 30,713 AVX Corp. 3,510 30,397 Avaya Inc./1/ 20,860 29,830 Ceridian Corp./1/ 2,084 29,697 Reinsurance Group of America Inc. 1,143 29,535 Allied Capital Corp. 1,342 29,376 Blockbuster Inc. 1,173 29,090 Wesco Financial Corp. 94 28,905 Donaldson Co. Inc. 836 28,700 Applied Micro Circuits Corp./1/ 9,902 28,320 Hearst-Argyle Television Inc./1/ 1,125 27,945 Interactive Data Corp./1/ 2,251 27,575 Renal Care Group Inc./1/ 835 27,463 Swift Transportation Co. Inc./1/ 1,749 27,284 Jacobs Engineering Group Inc./1/ 870 26,866 Performance Food Group Co./1/ 780 26,489 Furniture Brands International Inc./1/ 1,149 26,370 Diamond Offshore Drilling Inc. 1,308 26,095 Forest Oil Corp./1/ 1,017 25,934 Community Health Systems Inc./1/ 968 25,778 Teradyne Inc./1/ 2,578 24,749 Hispanic Broadcasting Corp./1/ 1,310 24,432 Student Loan Corp. 269 24,339 PerkinElmer Inc. 4,399 23,975 Doral Financial Corp. 987 23,826 Northwest Airlines Corp. "A"/1/ 3,559 23,774 CheckFree Corp./1/ 2,041 23,227 United Rentals Inc./1/ 2,710 22,872 National Semiconductor Corp./1/ 1,886 22,519 Continental Airlines Inc. 'B'/1/ 4,171 22,482 Catellus Development Corp./1/ 1,189 21,937 Viad Corp. 1,059 21,635 21st Century Insurance Group 2,081 21,455 Cox Radio Inc. "A"/1/ 810 21,190 Steelcase Inc. 2,002 20,961 Acxiom Corp./1/ 1,471 20,859 Dynegy Inc. "A" 17,897 20,761 Six Flags Inc./1/ 5,726 20,156 Coca-Cola Enterprises Inc. 948 20,136 Harte-Hanks Inc. 1,027 19,112 Premcor Inc./1/ 1,200 18,828 Medicis Pharmaceutical Corp. "A"/1/ 460 18,800 Harrah's Entertainment Inc./1/ 389 18,754 Gemstar-TV Guide International Inc./1/ 7,431 18,726 Metro-Goldwyn-Mayer Inc./1/ 1,535 18,343 Mylan Laboratories Inc. 554 18,138 Cumulus Media Inc. "A"/1/ 984 17,368 TMP Worldwide Inc./1/ 1,911 17,199 SkyWest Inc. 1,290 16,899 PanAmSat Corp./1/ 942 16,344 Shaw Group Inc. (The)/1/ 1,127 16,003 Equifax Inc. 736 16,001 Applera Corp. - Applied Biosystems Group 853 15,610 Charter Communications Inc./1/ 8,350 15,531 Adaptec Inc./1/ 3,481 15,351 Novellus Systems Inc./1/ 736 15,316 Alliance Data Systems Corp./1/ 937 14,196 Brinker International Inc./1/ 529 13,701 Affiliated Managers Group Inc./1/ 290 12,937 Scripps (E.W.) Co. 186 12,890 Jabil Circuit Inc./1/ 866 12,799 Circuit City Stores Inc. - CarMax Group/1/ 796 12,776 Cypress Semiconductor Corp./1/ 1,864 12,228 Schedules of Investments 123 Schedule of Investments (Unaudited) (Continued) iSHARES RUSSELL MIDCAP VALUE INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------ Juniper Networks Inc./1/ 2,514 $ 12,067 Emulex Corp./1/ 1,070 12,048 JetBlue Airways Corp./1/ 291 11,736 Regal Entertainment Group "A"/1/ 642 11,428 Lin TV Corp. "A"/1/ 461 11,410 Black & Decker Corp. 268 11,237 Sonic Automotive Inc./1/ 627 11,098 Polycom Inc./1/ 1,608 10,918 Entercom Communications Corp./1/ 223 10,564 Allied Waste Industries Inc./1/ 1,433 10,533 O'Reilly Automotive Inc./1/ 365 10,446 AmeriCredit Corp./1/ 1,271 10,257 Conexant Systems Inc./1/ 8,598 9,544 Ticketmaster "B"/1/ 612 9,333 Cooper Cameron Corp./1/ 215 8,978 Sealed Air Corp./1/ 528 8,918 Citrix Systems Inc./1/ 1,463 8,822 International Rectifier Corp./1/ 557 8,700 Atmel Corp./1/ 7,958 8,435 Instinet Group Inc. 2,716 8,420 GameStop Corp./1/ 408 8,344 SICOR Inc./1/ 534 8,122 Zebra Technologies Corp. "A"/1/ 141 7,429 UnitedGlobalCom Inc. "A"/1/ 4,501 7,382 Rent-A-Center Inc./1/ 135 7,013 Getty Images Inc./1/ 339 6,800 Neuberger Berman Inc. 251 6,764 Rational Software Corp./1/ 1,565 6,761 MSC Industrial Direct Co. Inc. "A"/1/ 600 6,372 Patterson-UTI Energy Inc./1/ 245 6,250 Steris Corp./1/ 245 6,103 Macromedia Inc./1/ 765 5,913 Reliant Resources Inc./1/ 3,283 5,745 Titan Corp. (The)/1/ 524 5,030 Amkor Technology Inc./1/ 2,094 4,984 i2 Technologies Inc./1/ 9,249 4,809 American Eagle Outfitters Inc./1/ 390 4,703 Talbots Inc. (The) 155 4,340 Flowserve Corp./1/ 431 4,310 Fairchild Semiconductor International Corp. "A"/1/ 416 3,940 Global Payments Inc. 146 3,738 Advanced Medical Optics Inc./1/ 385 3,661 RealNetworks Inc./1/ 938 3,386 Perot Systems Corp. "A"/1/ 234 2,176 Orthodontic Centers of America Inc./1/ 185 1,980 Columbia Sportswear Co./1/ 49 1,701 Advent Software Inc./1/ 118 1,351 Ribapharm Inc./1/ 300 1,350 MKS Instruments Inc./1/ 112 1,223 West Corp./1/ 70 980 - ------------------------------------------------------------------ TOTAL COMMON STOCKS (Cost: $89,139,196) 74,325,672 - ------------------------------------------------------------------ SHORT TERM INSTRUMENTS - 5.87% - ------------------------------------------------------------------ Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 3,721,498 3,721,498 Dreyfus Money Market Fund 202,118 202,118 Goldman Sachs Financial Square Prime Obligation Fund 147,106 147,106 Providian Temp Cash Money Market Fund 303,177 303,177 - ------------------------------------------------------------------ TOTAL SHORT TERM INSTRUMENTS (Cost: $4,373,899) 4,373,899 - ------------------------------------------------------------------ TOTAL INVESTMENTS IN SECURITIES - 105.66% (Cost $93,513,095) 78,699,571 - ------------------------------------------------------------------ Other Assets, Less Liabilities - (5.66%) (4,213,726) - ------------------------------------------------------------------ NET ASSETS - 100.00% $74,485,845 ================================================================== /1/ Non-income earning securities. See notes to financial statements. 124 2002 iShares Semi-Annual Report to Shareholders Statements of Assets and Liabilities (Unaudited) iSHARES TRUST September 30, 2002
iShares Russell --------------------------------------------------------------------------------------------- 3000 3000 Growth 3000 Value Midcap Midcap Growth Midcap Value Index Fund Index Fund Index Fund Index Fund Index Fund Index Fund - ------------------------------------------------------------------------------------------------------------------------ ASSETS Investments at cost $1,022,274,167 $ 55,372,383 $ 84,425,003 $ 91,023,639 $ 79,893,454 $ 93,513,095 -------------- ------------ ------------ ------------ ------------ ------------ Investments in securities, at value (including securities on loan/1/) (Note 1) $ 702,432,038 $ 40,467,830 $ 67,525,175 $ 73,946,409 $ 61,707,269 $ 78,699,571 Receivables: Dividends and interest 890,360 48,065 125,381 102,477 25,220 156,181 -------------- ------------ ------------ ------------ ------------ ------------ Total Assets 703,322,398 40,515,895 67,650,556 74,048,886 61,732,489 78,855,752 -------------- ------------ ------------ ------------ ------------ ------------ LIABILITIES Payables: Collateral for securities on loan (Note 5) 8,893,866 953,261 1,971,771 4,007,682 4,671,412 4,341,058 Advisory fees (Note 2) 266,066 18,050 30,011 22,303 25,477 28,849 -------------- ------------ ------------ ------------ ------------ ------------ Total Liabilities 9,159,932 971,311 2,001,782 4,029,985 4,696,889 4,369,907 -------------- ------------ ------------ ------------ ------------ ------------ NET ASSETS $ 694,162,466 $ 39,544,584 $ 65,648,774 $ 70,018,901 $ 57,035,600 $ 74,485,845 ============== ============ ============ ============ ============ ============ Net assets consist of: Paid-in capital $1,131,773,032 $ 65,499,354 $ 84,537,100 $ 88,476,750 $ 84,948,835 $ 89,445,168 Undistributed net investment income 539,028 30,468 61,707 50,033 8,017 78,975 Undistributed net realized loss (118,307,465) (11,080,685) (2,050,205) (1,430,652) (9,735,067) (224,774) Net unrealized depreciation (319,842,129) (14,904,553) (16,899,828) (17,077,230) (18,186,185) (14,813,524) -------------- ------------ ------------ ------------ ------------ ------------ NET ASSETS $ 694,162,466 $ 39,544,584 $ 65,648,774 $ 70,018,901 $ 57,035,600 $ 74,485,845 ============== ============ ============ ============ ============ ============ iShares outstanding 15,250,000 1,450,000 1,200,000 1,550,000 1,200,000 1,150,000 ============== ============ ============ ============ ============ ============ Net asset value per iShare $ 45.52 $ 27.27 $ 54.71 $ 45.17 $ 47.53 $ 64.77 ============== ============ ============ ============ ============ ============
/1/ Securities on loan with market values of $8,463,696, $903,791, $1,852,618, $3,834,113, $4,478,095 and $4,148,609, respectively. See Note 5. See notes to financial statements. Financial Statements 125 Statements of Operations (Unaudited) iSHARES TRUST For the six months ended September 30, 2002
iShares Russell -------------------------------------------------------------------------------------------------- 3000 3000 Growth 3000 Value Midcap Midcap Growth Midcap Value Index Fund Index Fund Index Fund Index Fund Index Fund Index Fund - ------------------------------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME Dividends/1/ $ 8,397,641 $ 195,746 $ 821,818 $ 473,360 $ 117,637 $ 738,539 Interest 7,643 249 930 864 288 779 Securities lending income 38,478 1,358 2,384 3,043 6,561 2,371 -------------- ------------ ------------ ------------ ------------ ------------ Total investment income 8,443,762 197,353 825,132 477,267 124,486 741,689 -------------- ------------ ------------ ------------ ------------ ------------ EXPENSES (NOTE 2) Advisory fees 1,065,674 51,850 91,526 61,891 86,572 82,698 -------------- ------------ ------------ ------------ ------------ ------------ Total expenses 1,065,674 51,850 91,526 61,891 86,572 82,698 -------------- ------------ ------------ ------------ ------------ ------------ Net investment income 7,378,088 145,503 733,606 415,376 37,914 658,991 -------------- ------------ ------------ ------------ ------------ ------------ NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from: Investments (23,133,710) (6,328,006) (1,545,330) (1,599,859) (10,078,606) (652,665) In-kind redemptions (60,134,841) - 619,422 397,438 578,570 649,475 -------------- ------------ ------------ ------------ ------------ ------------ Net realized loss (83,268,551) (6,328,006) (925,908) (1,202,421) (9,500,036) (3,190) -------------- ------------ ------------ ------------ ------------ ------------ Net change in unrealized appreciation (depreciation) on investments (241,154,388) (8,825,146) (21,888,127) (18,404,368) (17,684,055) (18,203,306) -------------- ------------ ------------ ------------ ------------ ------------ Net realized and unrealized loss (324,422,939) (15,153,152) (22,814,035) (19,606,789) (27,184,091) (18,206,496) -------------- ------------ ------------ ------------ ------------ ------------ NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (317,044,851) $(15,007,649) $(22,080,429) $(19,191,413) $(27,146,177) $(17,547,505) ============== ============ ============ ============ ============ ============
/1/ Net of foreign withholding tax of $770, $16, $97, $197, $35 and $312, respectively. See notes to financial statements. 126 2002 iShares Semi-Annual Report to Shareholders Statements of Changes in Net Assets iSHARES TRUST
iShares Russell 3000 iShares Russell 3000 Index Fund Growth Index Fund ----------------------------------- ---------------------------------- For the six For the six months ended For the months ended For the September 30, 2002 year ended September 30, 2002 year ended (Unaudited) March 31, 2002 (Unaudited) March 31, 2002 - -------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 7,378,088 $ 11,379,955 $ 145,503 $ 140,575 Net realized gain (loss) (83,268,551) 50,586,766 (6,328,006) (2,927,873) Net change in unrealized appreciation (depreciation) (241,154,388) 662,437 (8,825,146) 3,033,329 ------------------ --------------- ------------------ -------------- Net increase (decrease) in net assets resulting from operations (317,044,851) 62,629,158 (15,007,649) 246,031 ------------------ --------------- ------------------ -------------- DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income (7,639,120) (10,680,502) (120,810) (134,625) ------------------ --------------- ------------------ -------------- Total distributions to iShareholders (7,639,120) (10,680,502) (120,810) (134,625) ------------------ --------------- ------------------ -------------- iSHARES TRANSACTIONS: iShares sold 468,919,257 1,578,633,222 26,867,232 27,600,774 iShares redeemed (811,009,428) (658,154,490) - (20,257,453) ------------------ --------------- ------------------ -------------- Net increase (decrease) in net assets from iShares transactions (342,090,171) 920,478,732 26,867,232 7,343,321 ------------------ --------------- ------------------ -------------- INCREASE (DECREASE) IN NET ASSETS (666,774,142) 972,427,388 11,738,773 7,454,727 NET ASSETS: Beginning of period 1,360,936,608 388,509,220 27,805,811 20,351,084 ------------------ --------------- ------------------ -------------- End of period $ 694,162,466 $ 1,360,936,608 $ 39,544,584 $ 27,805,811 ================== =============== ================== ============== Undistributed net investment income included in net assets at end of period $ 539,028 $ 800,060 $ 30,468 $ 5,775 ================== =============== ================== ============== iSHARES ISSUED AND REDEEMED: iShares sold 9,400,000 25,500,000 750,000 700,000 iShares redeemed (15,450,000) (10,300,000) - (500,000) ------------------ --------------- ------------------ -------------- Net increase (decrease) in iShares outstanding (6,050,000) 15,200,000 750,000 200,000 ================== =============== ================== ============== iShares Russell 3000 Value Index Fund ---------------------------------- For the six months ended For the September 30, 2002 year ended (Unaudited) March 31, 2002 - ------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSTES OPERATIONS: Net investment income $ 733,606 $ 862,510 Net realized gain (loss) (925,908) (843,422) Net change in unrealized appreciation (depreciation) (21,888,127) 4,925,088 ------------------ ------------- Net increase (decrease) in net assets resulting from operations (22,080,429) 4,944,176 ------------------ ------------- DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income (731,521) (819,516) ------------------ ------------- Total distributions to iShareholders (731,521) (819,516) ------------------ ------------- iSHARES TRANSACTIONS: iShares sold 25,141,627 30,371,648 iShares redeemed (3,392,837) - ------------------ ------------- Net increase (decrease) in net assets from iShares transactions 21,748,790 30,371,648 ------------------ ------------- INCREASE (DECREASE) IN NET ASSETS (1,063,160) 34,496,308 NET ASSETS: Beginning of period 66,711,934 32,215,626 ------------------ ------------- End of period $ 65,648,774 $ 66,711,934 ================== ============= Undistributed net investment income included in net assets at end of period $ 61,707 $ 59,622 ================== ============= iSHARES ISSUED AND REDEEMED: iShares sold 350,000 450,000 iShares redeemed (50,000) - ------------------ ------------- Net increase (decrease) in iShares outstanding 300,000 450,000 ================== =============
See notes to financial statements. Financial Statements 127 Statements of Changes in Net Assets (Continued) iSHARES TRUST
iShares Russell Midcap iShares Russell Midcap Index Fund Growth Index Fund ------------------------------------ -------------------------------------- For the six For the period For the six For the period months ended July 17, 2001/1/ months ended July 17, 2001/1/ September 30, 2002 to September 30, 2002 to (Unaudited) March 31, 2002 (Unaudited) March 31, 2002 - ------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 415,376 $ 320,324 $ 37,914 $ 11,984 Net realized loss (1,202,421) (427,251) (9,500,036) (235,733) Net change in unrealized appreciation (depreciation) (18,404,368) 1,327,138 (17,684,055) (502,130) ------------------ -------------- ----------------- ------------- Net increase (decrease) in net assets resulting from operations (19,191,413) 1,220,211 (27,146,177) (725,879) ------------------ -------------- ----------------- ------------- DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income (405,447) (272,904) (34,819) (6,155) ------------------ -------------- ----------------- ------------- Total distributions to iShareholders (405,447) (272,904) (34,819) (6,155) ------------------ -------------- ----------------- ------------- iSHARES TRANSACTIONS: iShares sold 43,861,567 79,684,124 6,699,069 81,578,610 iShares redeemed (2,986,786) (31,890,451) (3,329,049) - ------------------ -------------- ----------------- ------------- Net increase in net assets from iShares transactions 40,874,781 47,793,673 3,370,020 81,578,610 ------------------ -------------- ----------------- ------------- INCREASE (DECREASE) IN NET ASSETS 21,277,921 48,740,980 (23,810,976) 80,846,576 NET ASSETS: Beginning of period 48,740,980 - 80,846,576 - ------------------ -------------- ----------------- ------------- End of period $ 70,018,901 $ 48,740,980 $ 57,035,600 $ 80,846,576 ================== ============== ================= ============= Undistributed net investment income included in net assets at end of period $ 50,033 $ 40,104 $ 8,017 $ 4,922 ================== ============== ================= ============= iSHARES ISSUED AND REDEEMED: iShares sold 800,000 1,350,000 100,000 1,150,000 iShares redeemed (50,000) (550,000) (50,000) - ------------------ -------------- ----------------- ------------- Net increase in iShares outstanding 750,000 800,000 50,000 1,150,000 ================== ============== ================= ============= iShares Russell Midcap Value Index Fund ------------------------------------ For the six For the period months ended July 17, 2001/1/ September 30, 2002 to (Unaudited) March 31, 2002 - --------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 658,991 $ 330,830 Net realized loss (3,190) (219,446) Net change in unrealized appreciation (depreciation) (18,203,306) 3,389,782 ------------------ ------------- Net increase (decrease) in net assets resulting from operations (17,547,505) 3,501,166 ------------------ ------------- DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income (642,035) (265,079) ------------------ ------------- Total distributions to iShareholders (642,035) (265,079) ------------------ ------------- iSHARES TRANSACTIONS: iShares sold 42,391,001 51,006,767 iShares redeemed (3,958,470) - ------------------ ------------- Net increase in net assets from iShares transactions 38,432,531 51,006,767 ------------------ ------------- INCREASE (DECREASE) IN NET ASSETS 20,242,991 54,242,854 NET ASSETS: Beginning of period 54,242,854 - ------------------ ------------- End of period $ 74,485,845 $ 54,242,854 ================== ============= Undistributed net investment income included in net assets at end of period $ 78,975 $ 62,019 ================== ============= iSHARES ISSUED AND REDEEMED: iShares sold 550,000 650,000 iShares redeemed (50,000) - ------------------ ------------- Net increase in iShares outstanding 500,000 650,000 ================== =============
/1/ Commencement of operations. See notes to financial statements. 128 2002 iShares Semi-Annual Report to Shareholders Financial Highlights iSHARES TRUST (For a share outstanding throughout each period)
iShares Russell 3000 iShares Russell 3000 Index Fund Growth Index Fund ------------------------------------------------- ---------------------------------------------------- Six months Period from Six months Period from ended May 22, 2000/1/ ended Jul. 24, 2000/1/ Sep. 30, 2002 Year ended to Sep. 30, 2002 Year ended to (Unaudited) Mar. 31, 2002 Mar. 31, 2001 (Unaudited) Mar. 31, 2002 Mar. 31, 2001 - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 63.89 $ 63.69 $ 76.23 $ 39.72 $ 40.70 $ 68.63 ------------- ------------ ------------- ----------- ------------- ---------- Income from investment operations: Net investment income 0.51 0.65 0.51 0.10 0.20 0.06 Net realized and unrealized gain (loss) (18.37) 0.19 (12.56) (12.46) (0.99) (27.93) ------------- ------------ ------------- ----------- ------------- ---------- Total from investment operations (17.86) 0.84 (12.05) (12.36) (0.79) (27.87) ------------- ------------ ------------- ----------- ------------- ---------- Less distributions from: Net investment income (0.51) (0.64) (0.48) (0.09) (0.19) (0.06) Net realized gain - - (0.01) - - (0.00)/5/ ------------- ------------ ------------- ----------- ------------- ---------- Total distributions (0.51) (0.64) (0.49) (0.09) (0.19) (0.06) ------------- ------------ ------------- ----------- ------------- ---------- Net asset value, end of period $ 45.52 $ 63.89 $ 63.69 $ 27.27 $ 39.72 $ 40.70 ============= ============ ============= =========== ============= ========== Total return (28.06)%/2/ 1.35% (15.90)%/2/ (31.15)%/2/ (1.95)% (40.62)%/2/ ============= ============ ============= =========== ============= ========== Ratios/Supplemental data: Net assets, end of period (000s) $ 694,162 $ 1,360,937 $ 388,509 $ 39,545 $ 27,806 $ 20,351 Ratio of expenses to average net assets/3/ 0.20% 0.20% 0.20% 0.25% 0.25% 0.25% Ratio of net investment income to average net assets/3/ 1.38% 1.20% 1.09% 0.70% 0.47% 0.20% Portfolio turnover rate/4/ 3% 6% 3% 17% 18% 3%
/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. See notes to financial statements. Financial Highlights 129 Financial Highlights (Continued) iSHARES TRUST (For a share outstanding throughout each period)
iShares Russell iShares Russell 3000 Midcap Value Index Fund Index Fund ---------------------------------------------------- ----------------------------------- Six months Period from Six months Period from ended Jul. 24, 2000/1/ ended Jul. 17, 2001/1/ Sep. 30, 2002 Year ended to Sep. 30, 2002 to (Unaudited) Mar. 31, 2002 Mar. 31, 2001 (Unaudited) Mar. 31, 2002 - -------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 74.12 $ 71.59 $ 69.91 $ 60.93 $ 59.55 ----------- ------------- ------------- ----------- ------------- Income from investment operations: Net investment income 0.59 1.25 0.83 0.28 0.46 Net realized and unrealized gain (loss) (19.39) 2.50 1.71 (15.74) 1.32 ----------- ------------- ------------- ----------- ------------- Total from investment operations (18.80) 3.75 2.54 (15.46) 1.78 ----------- ------------- ------------- ----------- ------------- Less distributions from: Net investment income (0.61) (1.22) (0.77) (0.30) (0.40) Net realized gain - - (0.09) - - ----------- ------------- ------------- ----------- ------------- Total distributions (0.61) (1.22) (0.86) (0.30) (0.40) ----------- ------------- ------------- ----------- ------------- Net asset value, end of period $ 54.71 $ 74.12 $ 71.59 $ 45.17 $ 60.93 =========== ============= ============= =========== ============= Total return (25.47)%/2/ 5.34% 3.60%/2/ (25.44)%/2/ 3.08%/2/ =========== ============= ============= =========== ============= Ratios/Supplemental data: Net assets, end of period (000s) $ 65,649 $ 66,712 $ 32,216 $ 70,019 $ 48,741 Ratio of expenses to average net assets(3) 0.25% 0.25% 0.25% 0.20% 0.20% Ratio of net investment income to average net assets(3) 2.00% 1.79% 1.67% 1.34% 1.40% Portfolio turnover rate(4) 13% 15% 4% 21% 7%
/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. 130 2002 iShares Semi-Annual Report to Shareholders Financial Highlights (Continued) iSHARES TRUST (For a share outstanding throughout each period)
iShares Russell iShares Russell Midcap Midcap Growth Index Fund Value Index Fund ------------------------------- -------------------------------- Six months Period from Six months Period from ended Jul. 17, 2001/1/ ended Jul. 17, 2001/1/ Sep. 30, 2002 to Sep. 30, 2002 to (Unaudited) Mar. 31, 2002 (Unaudited) Mar. 31, 2002 - ---------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 70.30 $ 73.06 $ 83.45 $ 78.86 ------------- ---------------- ------------- ---------------- Income from investment operations: Net investment income 0.03 0.03 0.60 1.02 Net realized and unrealized gain (loss) (22.77) (2.77) (18.65) 4.49 ------------- ---------------- ------------- ---------------- Total from investment operations (22.74) (2.74) (18.05) 5.51 ------------- ---------------- ------------- ---------------- Less distributions from: Net investment income (0.03) (0.02) (0.63) (0.92) ------------- ---------------- ------------- ---------------- Total distributions (0.03) (0.02) (0.63) (0.92) ------------- ---------------- ------------- ---------------- Net asset value, end of period $ 47.53 $ 70.30 $ 64.77 $ 83.45 ============= ================ ============= ================ Total return/2/ (32.35)% (3.75)% (21.73)% 7.14% ============= ================ ============= ================ Ratios/Supplemental data: Net assets, end of period (000s) $ 57,036 $ 80,847 $ 74,486 $ 54,243 Ratio of expenses to average net assets/3/ 0.25% 0.25% 0.25% 0.25% Ratio of net investment income to average net assets/3/ 0.11% 0.08% 1.99% 1.91% Portfolio turnover rate/4/ 36% 5% 25% 6%
/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 131 Notes to the Financial Statements (Unaudited) iSHARES TRUST 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 September 30, 2002, the Trust offered 59 investment portfolios or funds. These financial statements relate only to the iShares Russell 3000, iShares Russell 3000 Growth, iShares Russell 3000 Value, iShares Russell Midcap, iShares Russell Midcap Growth, and iShares Russell Midcap Value Index Funds (each a "Fund", collectively the "Funds"). 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. Each of the Funds is classified as a diversified fund under the 1940 Act. 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. 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. 132 2002 iShares Semi-Annual Report to Shareholders Notes to the Financial Statements (Unaudited) (Continued) iSHARES TRUST At March 31, 2002, the tax year-end of the Funds, the components of distributable earnings on a tax basis were as follows: - -------------------------------------------------------------------------------- Undistributed Undistributed Total Distributable iShares Index Fund Ordinary Income Long-Term Gain Earnings - -------------------------------------------------------------------------------- Russell 3000 $ 743,363 $ - $ 743,363 Russell 3000 Growth 5,712 - 5,712 Russell 3000 Value 52,863 - 52,863 Russell Midcap 38,464 - 38,464 Russell Midcap Growth 4,922 - 4,922 Russell Midcap Value 59,626 - 59,626 - -------------------------------------------------------------------------------- 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 the Funds. 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. FEDERAL INCOME TAXES Each Fund is treated as a separate entity for federal income tax purposes. It is the policy of each Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its net income and any net gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes was required for the six months ended September 30, 2002. The following Funds had tax basis net capital loss carryforwards at March 31, 2002, the tax year-end of the Funds: ------------------------------------------------------------------ Expiring iShares Index Fund 2010 Total ------------------------------------------------------------------ Russell 3000 $21,820,617 $21,820,617 Russell 3000 Growth 4,176,050 4,176,050 Russell 3000 Value 605,073 605,073 Russell Midcap 66,369 66,369 Russell Midcap Growth 40,231 40,231 Russell Midcap Value 30,986 30,986 ------------------------------------------------------------------ Net capital loss carryforwards may be applied against any net realized taxable gains in each succeeding year, or until their respective expiration dates, whichever occurs first. For the six months ended September 30, 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. These reclassifications have no effect on net assets or net asset values per share. The in-kind gains or losses for the six months ended September 30, 2002 are disclosed in the Statements of Operations. Notes to the Financial Statements 133 Notes to the Financial Statements (Unaudited) (Continued) iSHARES TRUST 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 September 30, 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. 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 ------------------------------------------------------------ Russell 3000 0.20% Russell 3000 Growth 0.25 Russell 3000 Value 0.25 ------------------------------------------------------------ ------------------------------------------------------------ Advisory iShares Index Fund Fee ------------------------------------------------------------ Russell Midcap 0.20% Russell Midcap Growth 0.25 Russell Midcap Value 0.25 ------------------------------------------------------------ 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. 134 2002 iShares Semi-Annual Report to Shareholders Notes to the Financial Statements (Unaudited) (Continued) iSHARES TRUST Barclays Global Investors Services ("BGIS"), a subsidiary of Barclays Global Investors, N.A., may serve as a broker-dealer for the Funds. For the six months ended September 30, 2002, BGIS did not receive any brokerage commissions from the Funds. 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 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 from temporary cash investments or from investment of securities lending collateral are recorded as either interest income or securities lending income, respectively, in the accompanying Statements of Operations. Pursuant to Rule 17a-7 of the 1940 Act, certain Funds executed cross trades for the six months ended September 30, 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 of September 30, 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 six months ended September 30, 2002 were as follows: ---------------------------------------------------------------- iShares Index Fund Purchases Sales ---------------------------------------------------------------- Russell 3000 $33,654,400 $33,509,464 Russell 3000 Growth 6,635,236 6,627,000 Russell 3000 Value 9,848,245 9,902,444 Russell Midcap 12,604,902 12,602,939 Russell Midcap Growth 24,969,564 24,947,101 Russell Midcap Value 16,564,164 16,520,749 ---------------------------------------------------------------- Notes to the Financial Statements 135 Notes to the Financial Statements (Unaudited) (Continued) iSHARES TRUST In-kind transactions for the six months ended September 30, 2002 were as follows: ------------------------------------------------------------------- In-Kind In-Kind iShares Index Fund Purchases Sales ------------------------------------------------------------------- Russell 3000 $468,168,150 $809,479,381 Russell 3000 Growth 26,873,099 - Russell 3000 Value 24,965,196 3,200,328 Russell Midcap 43,819,941 2,976,777 Russell Midcap Growth 6,699,857 3,308,711 Russell Midcap Value 42,269,234 3,902,147 ------------------------------------------------------------------- At September 30, 2002, the aggregate unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:
- ----------------------------------------------------------------------------------------- Net Tax Unrealized Unrealized Unrealized iShares Index Fund Cost Appreciation Depreciation Depreciation - ----------------------------------------------------------------------------------------- Russell 3000 $1,022,274,167 $ 4,563,559 $(324,405,688) $(319,842,129) Russell 3000 Growth 55,372,383 414,992 (15,319,545) (14,904,553) Russell 3000 Value 84,425,003 2,218,269 (19,118,097) (16,899,828) Russell Midcap 91,023,639 910,925 (17,988,155) (17,077,230) Russell Midcap Growth 79,893,454 1,447,074 (19,633,259) (18,186,185) Russell Midcap Value 93,513,095 768,394 (15,581,918) (14,813,524) - -----------------------------------------------------------------------------------------
4. iSHARES TRANSACTIONS At September 30, 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 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 136 2002 iShares Semi-Annual Report to Shareholders Notes to the Financial Statements (Unaudited) (Continued) iSHARES TRUST 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 September 30, 2002, the Funds had loaned securities which were collateralized by cash. The cash collateral received was invested in money market mutual funds. The market value of the securities on loan at September 30, 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, which allegedly covers a mechanism for continuous pricing of exchange traded funds. 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 two 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 The iShares Family of Funds The following is a list of iShares Funds being offered, along with their respective exchange trading symbols. Please call iShares at 1-800-iShares (1-800-474-2737) to obtain a prospectus for any iShares fund. It contains more complete information, including charges and expenses. Broad Market iShares Dow Jones U.S. Total Market Index Fund (IYY) iShares Russell 3000 Index Fund (IWV) iShares Russell 3000 Growth Index Fund (IWZ) iShares Russell 3000 Value Index Fund (IWW) Large Cap iShares Russell 1000 Index Fund (IWB) iShares Russell 1000 Growth Index Fund (IWF) iShares Russell 1000 Value Index Fund (IWD) 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) Mid Cap iShares Russell Midcap Index Fund (IWR) iShares Russell Midcap Growth Index Fund (IWP) iShares Russell Midcap Value Index Fund (IWS) 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) Small Cap iShares Russell 2000 Index Fund (IWM) iShares Russell 2000 Growth Index Fund (IWO) iShares Russell 2000 Value Index Fund (IWN) 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) Sector & Industry iShares Cohen & Steers Realty Majors Index Fund (ICF) iShares Dow Jones U.S. Basic Materials Sector Index Fund (IYM) iShares Dow Jones U.S. Chemicals Index Fund (IYD) * 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. Financial Services Index Fund (IYG) 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. Internet Index Fund (IYV) * iShares Dow Jones U.S. Real Estate Index Fund (IYR) 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 Goldman Sachs Natural Resources Index Fund (IGE) iShares Goldman Sachs Networking Index Fund (IGN) iShares Goldman Sachs Semiconductor Index Fund (IGW) iShares Goldman Sachs Software Index Fund (IGV) iShares Goldman Sachs Technology Index Fund (IGM) iShares Nasdaq Biotechnology Index Fund (IBB) Fixed Income iShares Lehman 1-3 Year Treasury Bond Fund (SHY) iShares Lehman 7-10 Year Treasury Bond Fund (IEF) iShares Lehman 20+ Year Treasury Bond Fund (TLT) iShares GS $ InvesTop(TM) Corporate Bond Fund (LQD) Global Sector 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) International/Broad Market iShares MSCI EAFE Index Fund (EFA) International/Regional iShares MSCI EMU Index Fund (EZU) iShares MSCI Pacific ex-Japan Index Fund (EPP) iShares S&P Europe 350 Index Fund (IEV) International/Developed Country iShares MSCI Australia Index Fund (EWA) iShares MSCI Austria Index Fund (EWO) iShares MSCI Belgium Index Fund (EWK) iShares MSCI Canada Index Fund (EWC) iShares MSCI France Index Fund (EWQ) iShares MSCI Germany Index Fund (EWG) iShares MSCI Hong Kong Index Fund (EWH) iShares MSCI Italy Index Fund (EWI) iShares MSCI Japan Index Fund (EWJ) iShares MSCI Netherlands Index Fund (EWN) iShares MSCI Singapore Index Fund (EWS) iShares MSCI Spain Index Fund (EWP) iShares MSCI Sweden Index Fund (EWD) iShares MSCI Switzerland Index Fund (EWL) iShares MSCI United Kingdom Index Fund (EWU) iShares S&P/TOPIX 150 Index Fund (ITF) iShares S&P/TSE 60 Index Fund (IKC) * International/Emerging Country iShares MSCI Brazil Index Fund (EWZ) iShares MSCI Malaysia Index Fund (EWM) iShares MSCI Mexico Index Fund (EWW) iShares MSCI South Korea Index Fund (EWY) iShares MSCI Taiwan Index Fund (EWT) iShares S&P Latin America 40 Index Fund (ILF) Global/Broad Market iShares S&P Global 100 Index Fund (IOO) * Fund termination and liquidation anticipated on December 13, 2002. This advertising section does not constitute part of the 2002 Semi-Annual Report. iShares are not sponsored or endorsed by Goldman, Sachs & Co. or Lehman Brothers, nor are they sponsored, endorsed, sold or promoted by Cohen & Steers Capital Management, Inc., Dow Jones & Company, Inc., Morgan Stanley Capital International, The Nasdaq Stock Market, Inc., Frank Russell Company, or Standard & Poor's. None of these companies make any representation regarding the advisability of investing in iShares. Neither SEI nor BGI, nor any of their affiliates, are affiliated with Goldman, Sachs & Co. or Lehman Brothers. "GS $ InvesTop(TM)," "GS $ InvesTop(TM) Index," "GS $ Investment Grade Index(TM)" and "Goldman Sachs(R)" are trademarks of Goldman, Sachs & Co. The methodology of the GS $ InvesTop(TM) Index is owned by Goldman, Sachs & Co., may be covered by one or more patents or pending patent applications and is provided under license from Goldman, Sachs & Co. 138 2002 iShares Semi-Annual Report to Shareholders iShares are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors (BGFA) serves as an advisor 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. Investors Bank & Trust Company serves as administrator, custodian, securities lending agent and transfer agent. iShares are not sponsored, endorsed, sold or promoted by Frank Russell Company, nor does this company make any representation regarding the advisability of investing in iShares. Investing involves risk, including possible loss of principal. (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. [GRAPHIC] iShares(R) Industrial strength investment tools from BARCLAYS GLOBAL INVESTORS 1-800-iShares (474-2737) www.iShares.com BGI-F-006-03002 iShares(R) 2002 SEMI-ANNUAL REPORT TO SHAREHOLDERS SEPTEMBER 30, 2002 [PICTURE] INDUSTRIAL STRENGTH INVESTMENT TOOLS iSHARES S&P 100 INDEX FUND iSHARES S&P GLOBAL 100 INDEX FUND iSHARES S&P GLOBAL ENERGY SECTOR INDEX FUND iSHARES S&P GLOBAL FINANCIALS SECTOR INDEX FUND iSHARES S&P GLOBAL HEALTHCARE SECTOR INDEX FUND iSHARES S&P GLOBAL TECHNOLOGY SECTOR INDEX FUND iSHARES S&P GLOBAL TELECOMMUNICATIONS SECTOR INDEX FUND iSHARES S&P EUROPE 350 INDEX FUND iSHARES S&P/TSE 60 INDEX FUND iSHARES S&P LATIN AMERICA 40 INDEX FUND iSHARES S&P/TOPIX 150 INDEX FUND iSHARES NASDAQ BIOTECHNOLOGY INDEX FUND Table of Contents Shareholder Letter............................................... 1 Market Overview.................................................. 3 Managers' Discussion & Analysis.................................. 6 Schedules of Investments......................................... 30 iShares S&P 100 Index Fund.................................... 30 iShares S&P Global 100 Index Fund............................. 32 iShares S&P Global Energy Sector Index Fund................... 34 iShares S&P Global Financials Sector Index Fund............... 36 iShares S&P Global Healthcare Sector Index Fund............... 40 iShares S&P Global Technology Sector Index Fund............... 42 iShares S&P Global Telecommunications Sector Index Fund....... 45 iShares S&P Europe 350 Index Fund............................. 47 iShares S&P/TSE 60 Index Fund................................. 53 iShares S&P Latin America 40 Index Fund....................... 54 iShares S&P/TOPIX 150 Index Fund.............................. 55 iShares Nasdaq Biotechnology Index Fund....................... 58 Financial Statements............................................. 60 Financial Highlights............................................. 68 Notes to the Financial Statements................................ 74 iShares Family of Funds.......................................... 82
To Our Shareholders While the second half of 2001 was a difficult period for us all, 2002 has also been a time of tumultuous market events. As a whole, the past year has seen scores of layoffs, company closings, and corporate accounting scandals in the wake of the emotional shock of September 11. The past year has been truly remarkable for iShares considering the market environment. By the close of our second 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. However, iShares has followed a very different course. Instead of shrinking in size, iShares' assets under management grew to over $24 billion as of September 30, 2002. In fact, the iShares family of funds became the nation's third fastest growing family of equity funds/2/ during the period June 2001 through June 2002, surpassing some of the most established and best-known mutual fund groups. In July, iShares celebrated another milestone: the launch of the first-ever fixed income exchange traded funds. These four fixed income iShares funds -- three bond funds based on Lehman U.S. Treasury indexes, and one based on a Goldman Sachs-Registered Trademark- corporate bond index -- were greeted with an enthusiastic reception from the investment community. These new funds attracted $3 billion in assets in their first week of trading. That is an impressive beginning considering that total inflows for all U.S. bond mutual funds combined was $50 billion for the first six months of 2002./3/ With a total of 81 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). Total assets under management for all iShares funds have grown tenfold since they were first launched in May 2000. We believe this is a result of investors and their advisors recognizing that iShares are not merely an investment choice, but an important investment tool. As 2002 comes to a close, iShares continues to innovate, refine and improve its family of funds. In fact, iShares decided to close three funds in response to investor interest in broader exposure to markets represented by other iShares funds. The three funds that are closing are the iShares S&P/TSE 60 Index Fund, the iShares Dow Jones U.S. Internet Index Fund, and the iShares Dow Jones U.S. Chemicals Index Fund. If you have any questions, please refer to the questions and answers section on the fund closures at www.iShares.com or call 1-800-iSHARES. At BGI we consider the iShares family of funds "industrial strength" for four simple reasons. We think you should keep these reasons in mind when you and your advisor meet to discuss your investment objectives, and then evaluate, and perhaps rebalance your portfolio. First, iShares strive to obtain a fundamental goal of institutional investing: taking less of a bite out of a fund's returns. iShares seek to achieve this by minimizing capital gains distributions 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./4/ iShares, on the other hand, are managed in a way that keeps capital gains distributions to a minimum. For example, during the calendar year 2001 none of the domestic iShares funds distributed any capital gains./5/ Additionally, the fees charged by the iShares Funds are typically about half of other actively managed mutual funds./6/ - --------------------- /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/Financial Research Corporation (FRC) database, BGI analysis. /4/Jonathan Clements, Fund Distributions are a Taxing Problem; How the Tax Man Dines on Your Funds, The Wall Street Journal, August 1999. /5/Past performance is no guarantee of future results. There can be no assurance that iShares will not generate capital gains distributions in the future. /6/Source: Morningstar Principia, BGI analysis 6/01. Shareholder Letter 1 Second, iShares embody a key tactic of institutional investors: uncomplicated diversification. The benefits of diversification, as compared to picking individual stocks, are well documented. Although it's possible to diversify a portfolio by hand-selecting a wide variety of securities, to do it effectively is complicated and time-consuming. This is a reason why $1.56 trillion in institutional assets/7/ are invested in index funds. Third, iShares embody a key strategy of institutional investors: modular asset allocation. Each iShare fund focuses on a very specific slice of the equity and fixed income markets. With so many different iShares to choose from, investors have tremendous flexibility in structuring their portfolios to meet specific needs. The fourth reason iShares are "industrial strength" is that they are advised by Barclays Global Investors, one of the world's largest institutional asset managers./8/ BGI manages money for over two thousand institutional clients around the world. Also, BGI has a longer index-based investing track record than any other fund manager. In fact, over thirty years ago it was BGI that created the world's first index strategy. Throughout the coming year we will be working closely with the financial advisor community to introduce innovative strategies and structures that we have developed for their clients' portfolios. And we continue to enhance and improve the tools, data and resources on our Web site. If you haven't visited www.iShares.com in a while, we invite you to do so and learn more about iShares. In fact, Forbes Magazine named iShares.com "Best of the Web" among all ETF sites./9/ We think you'll agree everything about iShares really is industrial strength. On behalf of the iShares family of funds 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 Board Vice President of ishares Trust of Trustees of iShares Trust iShares are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors (BGFA) serves as an advisor to iShares. Barclays Global Investors Services (BGIS) assists in the marketing of iShares. BGFA and BGIS are subsidiaries of Barclays Global Investors, N.A., none of which is affiliated with SEI. For complete information, including charges and expenses, request a prospectus by calling 1-800-iSHARES (1-800-474-2737). Read it carefully before you invest. There are risks involved with investing, including possible loss of principal. Diversification may not protect against market risk. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Mutual funds and iShares are obliged to distribute portfolio gains to shareholders by year-end. These gains may be generated due to index rebalancing or to meet diversification requirements. Your own iShares trading, too, will generate tax consequences and transaction expenses. Certain traditional mutual funds can be tax efficient as well. Past performance does not guarantee future results. iShares are not sponsored or endorsed by Goldman, Sachs & Co. or Lehman Brothers, nor are they sponsored, endorsed, sold or promoted by Cohen & Steers Capital Management, Inc., Dow Jones & Company, Inc., Morgan Stanley Capital International, The Nasdaq Stock Market, Inc., Frank Russell Company, or Standard & Poor's. None of these companies make any representation regarding the advisability of investing in iShares. Neither SEI nor BGI, nor any of their affiliates, are affiliated with Goldman, Sachs & Co. or Lehman Brothers. "GS $InvesTop(TM)" and "Goldman Sachs(R)" are trademarks of Goldman, Sachs & Co. - --------------------- /7/Source: Pensions & Investments, 5/27/02. /8/Source: Pensions & Investments, 5/27/02. /9/Forbes Winter 2001. 2 2002 iShares Semi-Annual Report to Shareholders Market Overview U.S. Equity Markets U.S. equities fell heavily in the six months under review. Stocks rallied briefly in August, but this proved to be yet another false dawn. By the end of September, the broader market indices were back languishing at six-year lows. These latest falls mean that the S&P 500 Index has almost halved in value since its peak two years ago, and some sectors, notably telecommunications and technology, have lost considerably more than that. The current bear market is now on par with the 1970s bear market in terms of the scale of decline. However, in terms of duration, this is already the longest bear market in 60 years. With hindsight, many believe equities had become significantly overvalued during the technology bubble. Therefore, some correction was inevitable, but a number of factors have added to the gloom this year. Chief among these were the corporate accounting scandals. Sadly, these were not confined to one errant corporation but spread among many. As a result, investors have not only had to contend with a severe profits recession, but learn how to differentiate real from virtual profits. It is little wonder, given such profound uncertainties, that investors have been applying larger risk premiums to their equity valuations. This year's further collapse in share prices, in turn, has taken a toll on investor confidence and the wider economy. The Federal Reserve Board (the "Fed") has done a remarkable job in keeping the economy moving both before and after the events of September 11. Manufacturing has been in a deep recession, but the broader economy has held up reasonably well so far. This has been due largely to continued resilient consumer spending fueled by low interest rates and a buoyant housing market. However, even with interest rates at 40-year lows, industrial production has fallen since the summer and business investment has been cut. The danger has been that, after showing some improvement earlier this year, the manufacturing sector may relapse, causing the economy to suffer a so-called "double-dip" recession. If these factors were not enough, investors also have had to contend with the prospect of a second Gulf War. Such geopolitical risk adds greatly to market uncertainties, while the higher oil price sparked by war fears could further slow economic recovery. Against this background, forecasts for economic growth have been cut back. With profits statements remaining uniformly downbeat, investors have had little incentive to raise their risk appetite, preferring instead to seek the relative safety of bonds and cash. U.S. Fixed Income Markets For all the reasons equity prices have dropped this year, bond prices have risen. Due to the inverse relationship between bond prices and bond yields, yields have fallen during the period. By the end of the six-month period, yields on the 30-year bond were at the lowest levels recorded since they were first introduced in the 1970s. Yields on 5- and 10-year Treasuries had fallen to their lowest levels since 1958. The threat of war, the diminishing prospect of sustained economic recovery and the sheer distrust of equities in the corporate climate have all added to the relative attractiveness of bonds. The spike in oil prices to 19-month highs may in the past have raised the unwelcome specter of inflation and thus have been harmful to bonds. But in the low inflation environment of the reporting period, producers have had much greater difficulty passing on price increases. Therefore, rising oil prices have been much more likely to bear down on demand as consumers have absorbed higher oil prices by cutting expenditure on other discretionary purchases. There were no changes to the targeted federal funds rate over the period, but the Fed's policy bias seemed to shift toward one of greater ease over the summer as equity prices tumbled and doubts about the strength of the economic recovery accumulated. This perceived shift helped to drag bond yields lower, particularly at the short end of the curve. So far, the prospect of increased bond supply on the back of an escalating federal budget deficit has had only limited impact on investor enthusiasm for U.S. Treasuries. International Equity Markets The decline in U.S. equities over the period was echoed to a greater or lesser extent in markets around the world. Though the accounting scandals were confined largely to the U.S., the negative effect on investor confidence was global. The hesitant nature of the U.S. economic Market Overview 3 recovery also has had ramifications around the globe, while geopolitical risk in the Middle East and rising oil prices have affected all markets. In Europe, economic growth has been particularly sluggish, with the German economy most seriously affected by the downturn in international trade. However, it is not just a squeeze on exports that has dampened growth. Domestic demand has fallen due to lower business investment. Consumers, too, have been reluctant to spend. High unemployment has affected large parts of the eurozone and there have been growing doubts that the operation of a single monetary policy offers sufficient flexibility to tackle the problem. Room for policy maneuver has been further constrained by the Stability and Growth Pact, which was adopted in 1997 when the monetary union was being established and limits the size of budget deficits across the zone. While UK equities have also fallen heavily with concerns over the pensions industry and the solvency of the insurance sector, the economy has fared somewhat more favorably, helped by a more expansive fiscal policy and a strong housing market which, like the U.S., has supported consumer confidence and spending. Japanese equities plumbed new depths over the period with the Nikkei Dow Index recording a 19-year low. Concern has again focused on the stability of the banking system and the mountain of bad debts that continued to undermine the efficient functioning of the economy. Japanese consumer prices have now fallen for three years in a row. Such deflation has raised the real value of debt and reduced the effectiveness of monetary policy. Meanwhile the government has continued to balk at the large-scale injection of public funds deemed necessary to put the banking system back on a sounder footing. /s/ Francis Enderle Francis Enderle Chief Investment Officer, Global Indexing 4 2002 iShares Semi-Annual Report to Shareholders THIS PAGE INTENTIONALLY LEFT BLANK. 5 Managers' Discussion & Analysis iSHARES S&P 100 INDEX FUND Performance as of 9/30/02
Average Annual Total Returns Cumulative Total Returns ---------------------------------------------------- ------------------------- Year Ended 9/30/02 Inception to 9/30/02 Inception to 9/30/02 ------------------------- ------------------------- ------------------------- NAV MARKET INDEX NAV MARKET INDEX NAV MARKET INDEX (22.54)% (22.60)% (22.23)% (25.31)% (25.36)% (25.19)% (43.22)% (43.30)% (43.05)%
"Total returns for the period since inception" are calculated from the inception date of the Fund (10/23/00). "Average annual total return" represents the average annual change in value of an investment over the periods indicated. "Cumulative total return" represents the total 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 determined by using the midpoint between the highest bid and the lowest offer on the Exchange on which the iShares of the Fund are listed for trading, as of the time that the Fund's NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (10/27/00), the net asset value of the Fund is used as a proxy for secondary market trading price to calculate market returns. 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. [PIE CHART] Sector Breakout S&P 100 INDEX Consumer Discretionary 13.34% Consumer Staples 12.53% Energy 5.95% Financials 17.60% Health Care 16.51% Industrials 10.66% Information Technology 14.91% Materials 2.46% Telecommunication Services 4.58% Utilities 1.46% 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 six-month period ended September 30, 2002 (the "reporting period"), the Index declined 28.94%. For the reporting period, the iShares S&P 100 Index Fund declined 28.97%. Markets faced downward pressure from a variety of factors during the reporting period. The economic outlook remained cloudy: a strong first quarter GDP growth figure of 6.1% gave cause for optimism, but was followed by a tepid 1.3% figure for the second quarter. Manufacturing activity slowed, and the economy created fewer jobs than had been anticipated. Notably, consumer confidence, which had risen following the September 11 attacks, appeared to have peaked during the reporting period. Consumer confidence provides indications of consumer spending levels, which generally represent two-thirds of GDP. News from Corporate America provided no relief. The corporate scandals continued to unravel, for some firms culminating with the images of corporate executives being led away in handcuffs. Continued geopolitical tension and the threat of war in the Middle East heightened, 6 2002 iShares Semi-Annual Report to Shareholders contributing to stock market jitters. As the possibility of an invasion in Iraq raised concerns about supply of oil from the area, the price of oil surged to more than $30 per barrel. In response to economic conditions, the Federal Reserve Board (the "Fed") left rates unchanged during the reporting period. Within the Index, no industry sector was exempt from the broad equity declines during the reporting period. Information technology (14.91% of the Index as of September 30, 2002) and utilities (1.46% of the Index as of September 30, 2002) were the hardest hit, posting losses of 41.73% and 38.45%, respectively. Telecommunications services (4.58% of the Index as of September 30, 2002) continued to struggle, losing 37.33%. In line with the fall in consumer confidence levels, both consumer discretionary (13.34% of the Index as of September 30) and consumer staples (12.53% of the Index as of September 30) declined over the reporting period, falling 30.36% and 12.38%, respectively. Most of the Index's ten largest individual holdings posted significant losses. Citigroup (3.53% of the Index as of September 30, 2002) declined 35.44%, closely followed by General Electric (5.76% of the Index as of September 30, 2002), which fell 33.34%. Microsoft (5.57% of the Index as of September 30, 2002) lost 27.47%, Pfizer (4.22% of the Index as of September 30) lost 26.43%, and Exxon Mobil (5.07% of the Index as of September 30) declined 26.33%. Procter & Gamble (2.73% of the Index) was the only stock among the ten largest Index holdings to post a positive result, gaining 0.91%. Managers' Discussion & Analysis 7 Managers' Discussion & Analysis iSHARES S&P GLOBAL 100 INDEX FUND Performance as of 9/30/02
Average Annual Total Returns Cumulative Total Returns ---------------------------------------------------- ------------------------- Year Ended 9/30/02 Inception to 9/30/02 Inception to 9/30/02 ------------------------- ------------------------- ------------------------- NAV MARKET INDEX NAV MARKET INDEX NAV MARKET INDEX (23.62)% (23.92)% (22.80)% (26.65)% (26.83)% (25.85)% (43.15)% (43.40)% (41.97)%
"Total returns for the period since inception" are calculated from the inception date of the Fund (12/05/00). "Average annual total return" represents the average annual change in value of an investment over the periods indicated. "Cumulative total return" represents the total 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 determined by using the midpoint between the highest bid and the lowest offer on the Exchange on which the iShares of the Fund are listed for trading, as of the time that the Fund's NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (12/08/00), the net asset value of the Fund is used as a proxy for secondary market trading price to calculate market returns. 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. [LINE GRAPH] TOP 10 INDEX HOLDINGS General Electric Co. 5.14% Exxon Mobil Corp. 4.52% Microsoft Corp. 4.35% Pfizer Inc. 3.76% Johnson & Johnson 3.37% Citigroup Inc. 3.14% BP PLC 3.14% American International Group Inc. 2.99% Wal-Mart Stores Inc. 2.83% GlaxoSmithKline PLC 2.46% 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. From April 1, 2002, through September 30, 2002 (the "reporting period"), the total return of the Fund was -28.58%. Over the reporting period, the total return of the corresponding S&P Global 100 Index was - -28.34%. Sluggish economic growth in the United States and in many countries around the world created a poor backdrop for the S&P Global 100 Index throughout the reporting period. Emerging corporate scandals and bankruptcies also undermined the confidence of many investors. In some cases, the mere rumor of a problem led to significant declines in a variety of stocks, even if the rumor was repeatedly denied by the company or later proven to be unfounded. Even some areas of the market that are traditionally regarded as defensive disappointed investors. Such was the case with numerous pharmaceutical stocks, for example. Several of them faced skepticism from an increasing number of investors as generic competitors mounted successful legal challenges to patents on key products. A number of pharmaceutical makers also announced unexpected delays in rolling out new products, putting additional pressure on their shares. 8 2002 iShares Semi-Annual Report to Shareholders Similarly, blue-chip financial stocks were generally weaker than might have been expected, given their resilience in past downturns. For example, shares of Citigroup (3.14% of the Index as of September 30, 2002) depreciated by 35.44% over the reporting period as the company grappled with capital-market losses and worries about slowing growth. Investors' concerns about sluggish economic growth -- and even the possibility of a double-dip recession in the United States and elsewhere -- only intensified toward the autumn, leading the S&P Global 100 Index to end the reporting period on a down note. Managers' Discussion & Analysis 9 Managers' Discussion & Analysis iSHARES S&P GLOBAL ENERGY SECTOR INDEX FUND Performance as of 9/30/02 Total Returns ------------------------- Inception to 9/30/02 ------------------------- NAV MARKET INDEX (11.33)% (11.18)% (12.69)% "Total returns for the period since inception" represent the total change in value of an investment from the inception date of the Fund (11/12/01). 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 determined by using the midpoint between the highest bid and the lowest offer on the Exchange on which the iShares of the Fund are listed for trading, as of the time that the Fund's NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (11/16/01), the net asset value of the Fund is used as a proxy for secondary market trading price to calculate market returns. 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 [LINE GRAPH] Exxon Mobil Corp. 22.03% BP PLC 15.31% TotalFinaElf SA 9.52% Royal Dutch Petroleum Co. 8.59% ChevronTexaco Corp. 7.56% Shell Transport & Trading Co. PLC 5.88% Eni SpA 3.90% ConocoPhillips 3.20% Schlumberger Ltd. 2.27% EnCana Corp. 1.47% The iShares S&P Global Energy Sector Index Fund seeks investment results that correspond generally to the price and yield, before fees and expenses, of the S&P Global Energy Sector Index. For the six-month period from April 1, 2002 through September 30, 2002 (the "reporting period"), the Index fell 20.69%. The iShares S&P Global Energy Sector Index Fund declined 19.46% for the reporting period. Investors hoping for relief after several years of poor stock returns found little good news over the reporting period, as equity markets around the world continued to experience substantial losses. Casting a shadow over the markets was the weak global economy: in the U.S., corporate earnings were hard hit, while in Germany and France, unemployment reached above 10%. Japan remained mired in recession, despite that country's record low interest rates. In addition to the sluggish economy, there were other issues weighing on investors, including accounting improprieties at leading corporations, the threat of further terrorism, and the possibility of war with Iraq. A rare bright spot amid the news was American consumers, who continued to purchase goods and thus prop up the domestic economy. In addition, the real estate sector was relatively strong, buoyed by low interest rates. As the Federal Reserve Board kept rates at 1.75% throughout the period, mortgage rates remained attractive, spurring refinancings and thus putting money in consumers' pockets. Global energy companies were negatively affected by the slow economic growth around the globe, and in particular by weakness in the U.S. manufacturing sector. While instability in oil-producing regions such as the Mideast can boost fuel prices and in turn provide support for energy stocks, the ongoing situation in Iraq failed to lift shares substantially. Many investors believed that the weak economic conditions globally would keep pressure on energy stocks, despite the potential for supply disruption in the event of war. 10 2002 iShares Semi-Annual Report to Shareholders In this difficult environment, nearly all of the ten largest stocks in the Index declined during the reporting period. Exxon Mobil Corp. (22.03% of the Index as of September 30, 2002) shares fell 26.33%. BP (15.31% of the Index as of September 30) declined 23.89%. TotalFinaElf (9.52% of the Index) and Royal Dutch Petroleum (8.59% of the Index as of September 30, 2002) both dropped, losing 12.46% and 23.70%, respectively. ChevronTexaco (7.56% of the Index as of September 30, 2002) and Shell Transport and Trading Company (5.88% of the Index) fell 21.98% and 17.35%, respectively. ENI SpA (3.90% of the Index September 30, 2002), Conoco Philips (3.20% of the Index) and Schlumberger (2.27% of the Index September 30, 2002) each ended lower, falling 2.08%, 25.38%, and 34.09%, respectively. Only EnCana Corp. (1.47% of the Index) managed to rise, its shares increasing 2.15% over the reporting period. Managers' Discussion & Analysis 11 Managers' Discussion & Analysis iSHARES S&P GLOBAL FINANCIALS SECTOR INDEX FUND Performance as of 9/30/02 Total Returns ------------------------- Inception to 9/30/02 ------------------------- NAV MARKET INDEX (21.19)% (21.06)% (20.79)% "Total returns for the period since inception" represent the total change in value of an investment from the inception date of the Fund (11/12/01). 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 determined by using the midpoint between the highest bid and the lowest offer on the Exchange on which the iShares of the Fund are listed for trading, as of the time that the Fund's NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (11/16/01), the net asset value of the Fund is used as a proxy for secondary market trading price to calculate market returns. 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 [LINE GRAPH] Citigroup Inc. 5.35% American International Group Inc. 5.09% Bank of America Corp. 3.42% HSBC Holdings PLC 3.40% Wells Fargo & Company 2.92% Fannie Mae 2.11% UBS AG - Registered 1.79% Royal Bank of Scotland Group PLC 1.78% Wachovia Corp. 1.60% Bank One Corp. 1.57% The iShares S&P Global Financials Sector Index Fund seeks investment results that correspond generally to the price and yield, before fees and expenses, to the S&P Global Financials Sector Index. For the six-month period from April 1, 2002 through September 30, 2002 (the "reporting period"), the Index fell 24.60%. The iShares S&P Global Financials Sector Index Fund declined 24.68% for the same period. A listless global economy continued to take a toll on stock markets around the world over the reporting period. Investors sold U.S. stocks as companies across a wide array of sectors reported weak earnings, and ongoing revelations of corporate wrongdoing undermined investor confidence. In Europe, political uncertainty ahead of elections helped keep German stocks from rising, while in France, unemployment was a concern, and in the U.K. manufacturing was weak. Japan continued to struggle under recessionary conditions, despite record low interest rates there. In addition, other issues negatively impacted stocks, including the possibility of war with Iraq, nervousness over further terrorism, and the potential for rising oil prices. In the U.S., interest rates remained at a 40-year low of 1.75% during the reporting period, which did serve to bolster consumer spending and the real estate market, providing some relief for the economy. 12 2002 iShares Semi-Annual Report to Shareholders The financial services group struggled under these generally poor investment conditions. In addition, a number of large financial companies came under scrutiny for actions during the robust stock market of the late 1990s. Still other institutions were the targets of civil lawsuits filed by shareholders. Investment banking activity, including lucrative mergers and acquisitions, was reduced substantially over the reporting period, leading to falling revenues for banks, and in turn, several waves of layoffs on Wall Street. In Europe, the health of Germany's banking system was under question, another difficulty for financial companies to overcome. In the poor investing environment that prevailed over the reporting period, each of the ten largest stocks in the Index fell. Citigroup Inc. (5.35% of the Index as of September 30, 2002) shares declined 35.44%. American International Group (5.09% of the Index as of September 30) fell 24.07%. Bank of America (3.42% of the Index as of September 30, 2002) lost 4.59%, while HSBC Holdings (3.40% of the Index) declined 10.91%. Wells Fargo (2.92% of the Index as of September 30, 2002) moved down 1.43%, while Fannie Mae (2.11% of the Index as of September 30) lost 24.82%. UBS AG (1.79% of the Index as of September 30, 2002) shares fell 16.90%, while Royal Bank of Scotland Group (1.78% of the Index) lost 26.24%. Wachovia Corp. (1.60% of the Index as of September 30, 2002), and a new addition to the Index) and Bank One Corp. (1.57% of the Index as of September 30) dropped 10.65% and 9.54%, respectively. Managers' Discussion & Analysis 13 Managers' Discussion & Analysis iSHARES S&P GLOBAL HEALTHCARE SECTOR INDEX FUND Performance as of 9/30/02 Total Returns --------------------------------- Inception to 9/30/02 --------------------------------- NAV MARKET INDEX (21.38)% (21.54)% (21.33)% "Total returns for the period since inception" represent the total change in value of an investment from the inception date of the Fund (11/13/01). 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 determined by using the midpoint between the highest bid and the lowest offer on the Exchange on which the iShares of the Fund are listed for trading, as of the time that the Fund's NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (11/21/01), the net asset value of the Fund is used as a proxy for secondary market trading price to calculate market returns. 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. 10.98% Johnson & Johnson 9.83% GlaxoSmithKline PLC 7.18% Merck & Co. INC. 6.28% Novartis Ag 6.13% Abbott Laboratories 3.86% Lilly (Eli) & Co. 3.80% Amgen Inc. 3.26% Astrazeneca Plc 3.19% Medtronic Inc. 3.12% 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 six-month period from April 1, 2002 through September 30, 2002 (the "reporting period"), the Index fell 20.73%. The iShares S&P Global Healthcare Sector Index Fund declined 20.65% for the reporting period. During the reporting period, weak economic conditions in the key markets of North America and Europe, together with concerns over geopolitical instability, sent stock prices lower. In the U.S., equities fell substantially on worries about company performance, ongoing corporate scandals, and rising jobless claims. Elsewhere, investors carefully assessed the resilience of U.S. consumer spending, which had been providing an important support for the economy. Despite some volatility in consumer confidence during the reporting period -- concerns about terrorism and unemployment took their toll -- Americans continued to shop and even more significantly, maintain the strong real estate market. Helping to encourage consumer spending and mortgage refinancings were record low interest rates. Faced with sluggish economic conditions, the Federal Reserve Board kept interest rates at 1.75% throughout the period. In addition to the generally poor investing conditions, healthcare stocks struggled under a number of specific issues. Pharmaceutical stocks, which predominated among the Index's largest holdings, were particularly hard hit. In the U.S. there was no FDA commissioner during the period, which slowed the new drug approval process. In addition, several key pharmaceutical companies face expirations on their patents 14 2002 iShares Semi-Annual Report to Shareholders and in turn, the threat of competition from generic drug makers. Finally, a number of pharmaceutical companies had relatively spare product pipelines, putting additional pressure on share prices. The largest holding, Pfizer (10.98% of the Index as of September 30, 2002) fell 26.43%. Johnson & Johnson (9.83% of the Index as of September 30, 2002) lost 16.15%. GlaxoSmithKline (7.18% of the Index as of September 30, 2002) and Merck & Co. (6.28% of the Index as of September 30, 2002) both fell, declining 16.86% and 19.52%, respectively. Novartis AG (6.13% of the Index as of September 30, 2002) and Abbott Labs (3.86% of the Index as of September 30, 2002) lost 0.58% and 22.29%, respectively. Eli Lilly & Co (3.80% of the Index as of September 30, 2002) fell 26.62%, while Amgen (3.26% of the Index as of September 30, 2002) lost 30.13%. AstraZeneca (3.19% of the Index as of September 30, 2002) declined 38.56%. Medtronic (3.12% of the Index as of September 30, 2002) ended the reporting period 6.57% lower. Managers' Discussion & Analysis 15 Managers' Discussion & Analysis iSHARES S&P GLOBAL TECHNOLOGY SECTOR INDEX FUND Performance as of 9/30/02 Total Returns ------------------------- Inception to 9/30/02 ------------------------- NAV MARKET INDEX (46.23)% (46.23)% (45.32)% "Total returns for the period since inception" represent the total change in value of an investment from the inception date of the Fund (11/12/01). 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 determined by using the midpoint between the highest bid and the lowest offer on the Exchange on which the iShares of the Fund are listed for trading, as of the time that the Fund's NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (11/16/01), the net asset value of the Fund is used as a proxy for secondary market trading price to calculate market returns. 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. 18.51% International Business Machines Corp. 7.73% Intel Corp. 7.23% Cisco Systems Inc. 5.99% Nokia OYJ 4.93% Dell Computer Corp. 4.77% Oracle Corp. 3.34% Hewlett-Packard Co. 2.78% Samsung Electronics Co Ltd. 2.72% Texas Instruments Inc. 2.00% 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 six-month period from April 1, 2002 to September 30, 2002 (the "reporting period"), the Index declined 44.14%. The iShares S&P Global Technology Sector Index Fund dropped 44.91% for the reporting period. The six months of the reporting period have been exceptionally difficult ones for many investors, as stock markets around the globe have experienced substantial declines. The threat of war with Iraq, corporate accounting scandals in the U.S., weak economic growth worldwide, and concerns over the health of banks in Europe and Japan all conspired to put pressure on share prices. Extremely low interest rates in the U.S. -- the Federal Funds rate stood at 1.75% throughout the reporting period -- did help to catalyze consumer spending and keep real estate prices strong, providing a measure of support to the1 economy. However, even lower interest rates in Japan failed to lift that economy's poor performance, and in Europe, high unemployment continued to afflict Germany and France. Only marginally better were some economies in Asia, where a thriving China is sparking some export-driven growth. Information technology stocks were among the market's worst performers over the reporting period months. Capital spending by companies, a significant source of revenue for information technology firms, was weak throughout the reporting period. Such spending has fallen dramatically over the past several years, leading to layoffs, bankruptcies and declining revenues across the information technology 16 2002 iShares Semi-Annual Report to Shareholders landscape. Tracing the fortunes of these stocks, the technology-heavy Nasdaq has fallen more than 70% as of September 30, 2002 since its peak in March 2000, and dropped more than 30% during the reporting period. In this difficult environment, each of the ten largest companies in the Index registered declines during the reporting period. Top holding Microsoft (18.51% of the Index as of September 30, 2002) declined 27.47%. IBM (7.73% of the Index as of September 30, 2002) shares fell 43.71% while Intel Corp. (7.23% of the Index as of September 30, 2002) lost 54.23% during the reporting period. Cisco Systems (5.99% of the Index as of September 30) and Finland's Nokia (4.93% of the Index) both moved lower, dropping 38.10% and 37.16%, respectively. Dell Computer (4.77% of the Index as of September 30, 2002) lost 9.96%, while Oracle Corp. (3.34% of the Index as of September 30, 2002) fell 38.59%. Hewlett-Packard (2.78% of the Index as of September 30) moved lower, falling 34.27%, while Korea's Samsung Electronics (2.72% of the Index) dropped 11.82%. Texas Instruments (2.00% of the Index as of September 30, 2002) dropped 55.31%. Managers' Discussion & Analysis 17 Managers' Discussion & Analysis iSHARES S&P GLOBAL TELECOMMUNICATIONS SECTOR INDEX FUND Performance as of 9/30/02 Total Returns ------------------------------ Inception to 9/30/02 ------------------------------ NAV MARKET INDEX (42.86)% (42.86)% (42.67)% "Total returns for the period since inception" represent the total change in value of an investment from the inception date of the Fund (11/12/01). 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 determined by using the midpoint between the highest bid and the lowest offer on the Exchange on which the iShares of the Fund are listed for trading, as of the time that the Fund's NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (11/16/01), the net asset value of the Fund is used as a proxy for secondary market trading price to calculate market returns. 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 [LINE GRAPH] Vodafone Group PLC 12.82% Verizon Communications Inc. 11.06% SBC Communications Inc. 9.87% AT&T Corp. 6.82% BellSouth Corp. 5.07% Telefonica SA 5.01% NTT DoCoMo Inc. 4.56% Nippon Telegraph & Telephone Corp. 4.29% BT Group PLC 3.30% Deutsche Telekom AG 2.93% 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 six-month period from April 1, 2002 through September 30, 2002 (the "reporting period"), the Index fell 35.31%. The iShares S&P Global Telecommunications Sector Index Fund declined 35.44% for the reporting period. Volatility and falling stock prices characterized financial markets across the globe during the Index's reporting period. Many investors remained highly pessimistic about prospects for equities, and there was little good news to spark a recovery in stocks. Economic conditions were weak throughout much of the world, with corporate earnings falling in the U.S., financial turmoil shaking South America, and Europe struggling to solve rising unemployment levels. While Japan was plagued by sluggish growth, there was some vigor in some Asian markets, spurred by rapid growth in China. However, this was not enough to bolster stocks, as corporate accounting scandals and talk of war with Iraq put additional pressure on prices. The ongoing stimulus by the Federal Reserve Board did help to spur consumers to keep spending and helped to maintain strong real estate prices, adding some support to the weakened U.S. economy. The federal funds rate stood at 1.75% throughout the reporting period. Telecommunications stocks were among the market's worst performers over the reporting period. The industry continues to suffer from substantial over-investment in capacity made during the boom years of the late 1990s. Adding to the difficulties, capital spending by companies, a significant source of revenue for telecommunications firms, was weak throughout the reporting period. Such spending has 18 2002 iShares Semi-Annual Report to Shareholders fallen dramatically over the past several years, leading to layoffs, bankruptcies and declining revenues across the telecom landscape. In addition, accounting scandals at several prominent telecom companies have contributed to the negative stock performance for the entire sector. Amid the turmoil, each of the ten largest companies in the Index endured losses during the reporting period. Top holding Vodafone Group (12.82% of the Index as of September 30, 2002) dropped 30.21%. Verizon Communications (11.06% of the Index as of September 30, 2002) shares fell 39.36%, while SBC Communications (9.87% of the Index as of September 30, 2002) declined 45.46%. AT&T Corp (6.82% of the Index as of September 30) lost 22.98%, and BellSouth (5.07% of the Index) fell 49.57%. Telefonica (5.01% of the Index as of September 30, 2002) lost 33.47%, while NTT Docomo (4.56% of the Index as of September 30) dropped 35.59%. Nippon Tel&Tel Co. (4.29% of the Index as of September 30, 2002) declined 11.87%, while BT Group (3.30% of the Index as of September 30) fell 34.59%, and Deutsche Telekom (2.93% of the Index) lost 42.99% over the reporting period. Managers' Discussion & Analysis 19 Managers' Discussion & Analysis iSHARES S&P EUROPE 350 INDEX FUND Performance as of 9/30/02 Average Annual Total Returns Cumulative Total Returns - ---------------------------------------------------- ------------------------- Year Ended 9/30/02 Inception to 9/30/02 Inception to 9/30/02 - ------------------------- ------------------------- ------------------------- NAV MARKET INDEX NAV MARKET INDEX NAV MARKET INDEX (19.25)% (18.75)% (19.11)% (23.29)% (22.99)% (23.04)% (43.99)% (43.51)% (43.50)% "Total returns for the period since inception" are calculated from the inception date of the Fund (07/25/00). "Average annual total return" represents the average annual change in value of an investment over the periods indicated. "Cumulative total return" represents the total 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 determined by using the midpoint between the highest bid and the lowest offer on the Exchange on which the iShares of the Fund are listed for trading, as of the time that the Fund's NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (07/28/00), the net asset value of the Fund is used as a proxy for secondary market trading price to calculate market returns. 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 [LINE GRAPH] BP PLC 4.41% GlaxoSmithKline PLC 3.46% Novartis AG 2.95% HSBC Holdings PLC 2.81% TotalFinaElf SA 2.74% Vodafone Group PLC 2.56% Nestle SA 2.49% Royal Dutch Petroleum Co. 2.48% Nokia OYJ 1.86% Shell Transport & Trading Co. PLC 1.70% 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 equity performance of leading companies in the United Kingdom, 15 countries in the Euro Zone (which includes the European Monetary Union countries plus Denmark, Norway, Sweden and Switzerland) and the United States. From April 1, 2002, through September 30, 2002 (the "reporting period"), the total return of the Fund was -26.08%. Over the same period, the total return of the corresponding S&P Europe 350 Index was - -26.12%. Europe's equity markets reflected the cautious mood of investors over the reporting period. Amid the global economic slowdown, many investors favored defensive stocks, such as those of Swiss pharmaceutical giant Novartis AG and Swiss food maker Nestle SA (respectively 2.95% and 2.49% of the Index as of September 30, 2002). Although these stocks posted a loss during the reporting period, their declines were much less severe than those of most shares in more growth-oriented areas. Not all so-called "defensive" holdings proved to be safe harbors, however. Like several other pharmaceutical stocks, shares of GlaxoSmithKline PLC (the Index's second-largest holding as of September 30, 2002, with a weighting of 3.46%) suffered a double-digit loss over the reporting period. In addition, numerous financial companies (collectively 24.98% of the Index as of September 30, 2002) dealt a 20 2002 iShares Semi-Annual Report to Shareholders blow to investor confidence as they set aside larger-than-expected bad-debt provisions due to the poor economic environment and corporate bankruptcies. In most cases, however, these losses paled in comparison to those of many telecommunications services and information technology stocks (respectively 7.80% and 3.16% of the Index as of September 30, 2002). For example, shares of both Britain's Vodafone Group PLC and Finland's Nokia OYJ (respectively 2.56% and 1.86% of the Index as of September 30, 2002) faced intense selling pressure as the growth prospects for wireless communications seemed to dim. Shares of the Index's energy companies (13.37% of the Index as of September 30, 2002) were also quite weak over the reporting period. Britain's BP PLC, for example, depreciated 23.89% from April 1 through September 30, 2002. (As of September 30, 2002, BP was the Index's largest stock with a weighting of 4.41%.) Early in the reporting period, BP's shares and those of several other energy companies were buoyed when political tensions in the Middle East and OPEC production cuts helped raise crude-oil prices. But the gains were more than offset by the impact of sluggish worldwide demand for oil and petroleum products. As the reporting period ended, the global downturn was also weighing heavily on many other stocks in the Index. Managers' Discussion & Analysis 21 Managers' Discussion & Analysis iSHARES S&P/TSE 60 INDEX FUND Performance as of 9/30/02 Average Annual Total Returns Cumulative Total Returns - ---------------------------------------------------- ------------------------- Year Ended 9/30/02 Inception to 9/30/02 Inception to 9/30/02 - ------------------------- ------------------------- ------------------------- NAV MARKET INDEX NAV MARKET INDEX NAV MARKET INDEX (12.19)% (12.50)% (11.65)% (19.17)% (19.39)% (21.72)% (38.76)% (39.14)% (43.11)% "Total returns for the period since inception" are calculated from the inception date of the Fund (06/12/00). "Average annual total return" represents the average annual change in value of an investment over the periods indicated. "Cumulative total return" represents the total 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 determined by using the midpoint between the highest bid and the lowest offer on the Exchange on which the iShares of the Fund are listed for trading, as of the time that the Fund's NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (06/19/00), the net asset value of the Fund is used as a proxy for secondary market trading price to calculate market returns. 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 [PIE CHART] Consumer Discretionary 6.76% Consumer Staples 3.71% Energy 18.00% Financials 35.16% Health Care 2.05% Industrials 5.79% Information Technology 2.70% Materials 14.01% Telecommunication Services 6.73% Utilities 5.09% 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. The Index measures the performance of the largest publicly traded stocks in Canada. From April 1, 2002, through September 30, 2002 (the "reporting period"), the total return of the Fund was -21.53%. Over the reporting period, the total return of the corresponding S&P/TSE 60 Index was - -21.21%. Several different factors drove the S&P/TSE 60 Index down over the reporting period. The poor economic conditions existing in many of Canada's key export markets were among the most important factors. The global downturn put pressure on a host of Canadian exporters. Although some of them (including EnCana, 5.33% of the S&P/TSE 60 Index as of September 30, 2002) still managed to post modest share-price gains over the period, this was largely because the strength of the Canadian dollar versus the U.S. dollar helped buoy market returns for U.S. dollar-based investors. 22 2002 iShares Semi-Annual Report to Shareholders For more domestically oriented Canadian companies, the picture appeared to be brighter early in the reporting period. Many companies in the financial sector (35.16% of the Index as of September 30, 2002) and other areas of the market benefited from the continued strength of consumer activity in Canada. Over the summer, however, the Canadian central bank's decision to raise interest rates cooled off domestic demand somewhat and put pressure on the equity market. Several financial companies also reported significant losses arising from loans to the troubled telecommunications sector and to bankrupt companies in other industries. The news led to considerable declines in several of Canada's largest financial stocks. The summer also brought some disappointing news for some of Canada's largest companies. In July, Standard & Poor's opted to remove the shares of companies such as Barrick Gold (3.13% of the Index as of September 30, 2002) from the S&P 500 Index. S&P said its decision was motivated by a desire to eliminate any overlap between its U.S. and foreign indices and not by any particular change in the fundamentals of the companies themselves. Nonetheless, the move led to significant, albeit mostly temporary, declines in the affected stocks as indexers adjusted their portfolios. As the reporting period ended, investors' persistent concerns about the direction of the global economy continued to weigh on the S&P/TSE 60 Index. Managers' Discussion & Analysis 23 Managers' Discussion & Analysis iSHARES S&P LATIN AMERICA 40 INDEX FUND Performance as of 9/30/02 Total Returns --------------------------- Inception to 9/30/02 --------------------------- NAV MARKET INDEX (23.98)% (23.57)% (24.87)% "Total returns for the period since inception" represent the total change in value of an investment from the inception date of the Fund (10/25/01). 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 determined by using the midpoint between the highest bid and the lowest offer on the Exchange on which the iShares of the Fund are listed for trading, as of the time that the Fund's NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (10/26/01), the net asset value of the Fund is used as a proxy for secondary market trading price to calculate market returns. 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 [LINE GRAPH] Telefonos de Mexico SA de CV "L" 18.98% Cemex SA de CV "CPO" 11.46% America Movil SA de CV "L" 8.06% Petroleo Brasileiro SA 5.77% Companhia Vale Do Rio Doce 5.35% Walmart de Mexico SA de CV "V" 5.01% Grupo Financiero BBVA Bancomer SA de CV "B" 4.50% Companhia de Bebidas das Americas 4.28% Grupo Televisa SA "CPO" 3.66% Banco Itau SA 2.84% 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. The Index is comprised of highly liquid securities trading on the stock exchanges of Mexico, Brazil, Argentina and Chile. From April 1, 2002, through September 30, 2002 (the "reporting period"), the total return of the iShares S&P Latin America 40 Index Fund was - -40.22%. Over the reporting period, the total return of the corresponding S&P Latin America 40 Index was -41.16%. Macroeconomic concerns and political worries weighed heavily on many shares in the S&P Latin America 40 Index over the reporting period. Brazil's stock market was particularly weak, due to both political and macroeconomic issues. Early in the reporting period, many investors became alarmed about the relatively high levels that Brazil's government debt had reached. This problem also led U.S. credit-rating agencies to downgrade Brazilian sovereign debt to junk-bond level from investment-grade status, a move that undermined confidence in Brazil's equity market as well. Over the summer, many investors also became concerned that a leftist candidate would win Brazil's presidential elections (scheduled for October 2002) and derail the country's free-market reforms. The subsequent exodus of international capital from Brazil led to severe declines in many of the country's largest and most liquid shares, such as Petrobras PN (Petroleo Brasileiro SA). That stock (5.77% of the 24 2002 iShares Semi-Annual Report to Shareholders Index as of September 30, 2002) declined by 61.08% over the reporting period. The outflow of foreign capital from Brazil's equity market also led to a steep depreciation of the country's currency versus the U.S. dollar, further depressing returns for U.S. dollar-based investors. Although Mexico's equity market did not decline as much as Brazil's, it too posted a significant decline in absolute terms over the reporting period. The Mexican peso's growing weakness versus the U.S. dollar was one of the main concerns for many investors. Although the depreciation was generally a boon for Mexican exporters, it created a predicament for domestically oriented Mexican companies with a significant amount of U.S. dollar-denominated debt: Even though they were generating revenues in the increasingly weaker peso, they still had to service debt (and, in some cases, pay for capital equipment) in the stronger U.S. dollar. Shares of Telefonos de Mexico, S.A. de C.V. Series L (the Mexican equity market's largest and most liquid stock as well as the S&P Latin America 40 Index's largest stock as of September 30, 2002, with a weighting of 18.98%) also declined by 28.46% over the reporting period as investor sentiment toward the Mexican equity market became more pessimistic. In addition to these domestic issues, shares of many companies in Brazil, Mexico and other countries of Latin America were depressed by sluggish demand in key export markets, particularly the United States. This trend exerted considerable pressure on the S&P Latin America 40 Index throughout the reporting period. Managers' Discussion & Analysis 25 Managers' Discussion & Analysis iSHARES S&P/TOPIX 150 INDEX FUND Performance as of 9/30/02 Total Returns --------------------------- Inception to 9/30/02 --------------------------- NAV MARKET INDEX (14.34)% (14.89)% (13.93)% "Total returns for the period since inception" represent the total change in value of an investment from the inception date of the Fund (10/23/01). 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 determined by using the midpoint between the highest bid and the lowest offer on the Exchange on which the iShares of the Fund are listed for trading, as of the time that the Fund's NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (10/26/01), the net asset value of the Fund is used as a proxy for secondary market trading price to calculate market returns. 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 [LINE GRAPH] Toyota Motor Corp. 6.07% Sony Corp. 3.77% NTT DoCoMo Inc. 3.11% Takeda Chemical Industries Ltd. 3.03% Nippon Telegraph & Telephone Corp. 2.92% Honda Motor Co. Ltd. 2.74% Canon Inc. 2.51% Nomura Holdings, Inc. 2.42% Tokyo Electric Power Co. Inc. 2.04% Matsushita Electric Industrial Co. Ltd. 1.85% 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. The Index includes 150 highly liquid securities selected from each major sector of the Tokyo stock exchange. From April 1, 2002, through September 30, 2002 (the "reporting period"), the total return of the Fund was - -9.92%. Over the reporting period, the total return of the corresponding S&P/Topix 150 Index was -9.62%. The S&P/Topix 150 Index faced a headwind caused by both domestic and external factors over the reporting period. Slow economic growth in the United States, parts of Europe and other regions led to disappointing results for some Japanese exporters and corresponding declines in their share prices. Economic activity in Japan itself also remained quite subdued. As the country's unemployment rate reached near-record levels over the spring, Japanese consumers became more reluctant to spend. This trend depressed shares of more domestically oriented companies in the S&P/Topix 150 Index. Shares of Japanese communications companies, such as NTT DoCoMo Inc. (3.11% of the Index as of September 30, 2002) were even weaker. NTT DoCoMo's stock, for example, depreciated by 35.59% over the reporting period. The company posted significant losses after writing off some of its foreign investments. While the outlook remained generally poor for domestically oriented Japanese companies and capital-goods exporters over the reporting period, continued strength in U.S. consumer demand and the yen's weakness helped to boost some exporters' stocks, including those of 26 2002 iShares Semi-Annual Report to Shareholders Honda Motor Corp. (2.74% of the Index as of September 30, 2002) and several other Japanese automakers. Their strength could not offset weakness in other areas of the market, however. Nonetheless, quite a few international investors apparently viewed the Japanese equity market as a relatively appealing alternative to the weak U.S. stock market. The corporate accounting scandals and bankruptcies that emerged in the U.S. over the reporting period helped to hasten international capital flows into Japan. But the newfound attention was a double-edged sword: It initially helped to lift the country's equity market, but it also drove up the value of the yen versus the dollar -- making numerous Japanese goods less competitive in overseas markets. Managers' Discussion & Analysis 27 Managers' Discussion & Analysis iSHARES NASDAQ BIOTECHNOLOGY INDEX FUND Performance as of 9/30/02 Average Annual Total Returns Cumulative Total Returns - ---------------------------------------------------- ------------------------- Year Ended 9/30/02 Inception to 9/30/02 Inception to 9/30/02 - ------------------------- ------------------------- ------------------------- NAV MARKET INDEX NAV MARKET INDEX NAV MARKET INDEX (37.49)% (37.69)% (37.11)% (37.00)% (37.11)% (36.98)% (53.38)% (53.52)% (53.32)% "Total returns for the period since inception" are calculated from the inception date of the Fund (02/05/01). "Average annual total return" represents the average annual change in value of an investment over the periods indicated. "Cumulative total return" represents the total 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 determined by using the midpoint between the highest bid and the lowest offer on the Exchange on which the iShares of the Fund are listed for trading, as of the time that the Fund's NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (02/09/01), the net asset value of the Fund is used as a proxy for secondary market trading price to calculate market returns. 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 [LINE GRAPH] Amgen Inc. 19.13% Gilead Sciences Inc. 3.11% Chiron Corp. 3.02% IDEC Pharmaceuticals Corp. 2.96% Medimmune Inc. 2.51% Genzyme Corp. - General Division 2.35% Biogen Inc. 2.16% Amylin Pharmaceuticals Inc. 1.83% InterMune Inc. 1.61% Millennium Pharmaceuticals Inc. 1.58% 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. For the six-month period ended September 30, 2002 (the "reporting period"), the Index declined 39.84%. For the reporting period, the iShares Nasdaq Biotechnology Fund declined 39.88%. Equity markets declined during the reporting period, facing downward pressure on economic, corporate, and political fronts. Weak economic indicators continued to cloud the outlook for recovery: despite a robust first quarter GDP growth rate of 6.1%, second quarter growth was reported at a sluggish 1.3%. The labor market remained soft, housing starts declined, and the U.S. dollar continued weakening. Growing investor skepticism about corporate leadership was deserved: earlier investigations of corporate scandals broadened to include even more companies. Earnings warnings also grew during the reporting period. As Americans marked the one-year anniversary of the tragic events of September 11, 2001, geopolitical tensions continued to weigh heavily on the markets. The possibility of war with Iraq drove the price of oil above $30 per barrel, its highest level in more than a year. Although equities declined across the board over the reporting period, smaller company shares were the hardest hit. 28 2002 iShares Semi-Annual Report to Shareholders Responding to the sense of uncertainty on these fronts, investors generally retreated away from growth-oriented stocks toward the relative stability of value-oriented stocks. Biotechnology stocks, which had been viewed by many investors as the "next growth opportunity" when technology stock values had begun to decline, were abandoned during the reporting period as this group was particularly hard hit. Most of the ten largest holdings within the Index posted declines. Genzyme Corporation (2.35% of the Index as of September 30, 2002) fell 52.81%, while Medimmune (2.51% of the Index as of September 30, 2002) lost 46.81%. Biogen (2.16% of the Index as of September 30, 2002) declined 40.34%, and IDEC Pharmaceuticals (2.96% of the Index as of September 30, 2002) fell 35.43%. Global biotechnology company Amgen, at 19.13% the largest weighting in the Index, declined 30.13%. On the positive side, Amylin Pharmaceuticals (1.83% of the Index as of September 30) gained 66.03%, and Intermune (1.61% of the Index) returned 9.15% over the reporting period. Managers' Discussion & Analysis 29 Schedule of Investments (Unaudited) iSHARES S&P 100 INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------- COMMON STOCKS - 99.81% General Electric Co. 348,107 $ 8,580,837 Microsoft Corp./1/ 189,443 8,286,237 Wal-Mart Stores Inc. 155,634 7,663,418 Exxon Mobil Corp. 236,262 7,536,758 Pfizer Inc. 216,244 6,275,401 Johnson & Johnson 103,917 5,619,831 Citigroup Inc. 176,611 5,236,516 American International Group Inc. 91,334 4,995,970 Coca-Cola Co. (The) 86,835 4,164,607 Procter & Gamble Co. 45,460 4,063,215 Merck & Co. Inc. 78,604 3,592,989 International Business Machines Corp. 59,210 3,457,272 Bank of America Corp. 52,380 3,341,844 Intel Corp. 233,187 3,238,967 Philip Morris Companies Inc. 73,808 2,863,750 Wells Fargo & Company 59,376 2,859,548 Cisco Systems Inc./1/ 255,943 2,682,283 Verizon Communications Inc. 95,501 2,620,547 Viacom Inc. "B"/1/ 61,700 2,501,935 SBC Communications Inc. 116,277 2,337,168 PepsiCo Inc. 62,043 2,292,489 Home Depot Inc. 82,429 2,151,397 Amgen Inc./1/ 44,734 1,865,408 AOL Time Warner Inc./1/ 156,150 1,826,955 Medtronic Inc. 42,476 1,789,089 Pharmacia Corp. 45,129 1,754,615 AT&T Corp. 134,763 1,618,504 Bristol-Myers Squibb Co. 67,763 1,612,759 Anheuser-Busch Companies Inc. 30,358 1,536,115 Bank One Corp. 41,069 1,535,981 3M Co. 13,644 1,500,431 Oracle Corp./1/ 189,942 1,492,944 American Express Co. 46,481 1,449,278 JP Morgan Chase & Co. 69,794 1,325,388 Morgan Stanley 38,352 1,299,366 Du Pont (E.I.) de Nemours & Co. 34,739 1,253,036 Hewlett-Packard Co. 106,903 1,247,558 U.S. Bancorp 66,933 1,243,615 Goldman Sachs Group Inc. (The) 16,884 1,114,850 Gillette Co. (The) 37,024 1,095,910 Walt Disney Co. (The) 71,334 1,079,997 Colgate-Palmolive Co. 18,987 1,024,349 Boeing Co. (The) 29,359 1,002,023 Merrill Lynch & Co. Inc. 30,284 997,858 Tyco International Ltd. 69,817 984,420 United Technologies Corp. 16,516 932,989 Texas Instruments Inc. 60,667 896,052 Dow Chemical Co. (The) 31,858 870,042 HCA Inc. 18,202 866,597 McDonald's Corp. 44,654 788,590 Schlumberger Ltd. 20,209 777,238 General Motors Corp. "A" 19,628 763,529 Clear Channel Communications Inc./1/ 21,433 744,797 Southern Co. 24,835 714,751 Baxter International Inc. 21,143 645,919 Ford Motor Company 63,794 625,181 Honeywell International Inc. 28,674 621,079 General Dynamics Corp. 7,065 574,596 Alcoa Inc. 29,488 569,118 International Paper Co. 16,829 561,920 Exelon Corp. 11,265 535,087 FedEx Corp. 10,421 521,779 Sara Lee Corp. 27,433 501,749 Sears, Roebuck and Co. 11,040 430,560 Lehman Brothers Holdings Inc. 8,522 418,004 Raytheon Co. 14,072 412,310 Heinz (H.J.) Co. 12,241 408,482 Avon Products Inc. 8,272 381,339 Hartford Financial Services Group Inc. 8,657 354,937 EMC Corp./1/ 77,290 353,215 CIGNA Corp. 4,917 347,878 Baker Hughes Inc. 11,793 342,351 American Electric Power Co. Inc. 11,804 336,532 Weyerhaeuser Co. 7,644 334,578 Entergy Corp. 7,808 324,813 Burlington Northern Santa Fe Corp. 13,289 317,873 Campbell Soup Co. 14,351 316,870 Eastman Kodak Co. 10,193 277,657 Norfolk Southern Corp. 13,620 274,988 30 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES S&P 100 INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------- Limited Brands Inc. 18,180 $ 260,701 Nextel Communications Inc. "A"/1/ 31,749 239,705 May Department Stores Co. (The) 10,101 230,000 Halliburton Co. 15,189 196,090 Harrah's Entertainment Inc./1/ 3,898 187,923 MedImmune Inc./1/ 8,747 182,987 El Paso Corp. 20,426 168,923 Computer Sciences Corp./1/ 6,038 167,796 Xerox Corp./1/ 25,483 126,141 RadioShack Corp./1/ 6,053 121,423 Black & Decker Corp. 2,790 116,985 Rockwell Automation Inc. 6,511 105,934 Lucent Technologies Inc./1/ 119,588 90,887 Unisys Corp./1/ 11,221 78,547 National Semiconductor Corp./1/ 6,309 75,329 Toys R Us Inc./1/ 7,398 75,312 AES Corp. (The)/1/ 18,726 47,002 Boise Cascade Corp. 2,031 46,307 Williams Companies Inc. 17,996 40,671 Delta Air Lines Inc. 4,275 39,715 Allegheny Technologies Inc. 2,770 19,168 TOTAL COMMON STOCKS (Cost: $221,134,127) 148,774,374 SHORT TERM INSTRUMENTS - 0.50% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 641,726 641,726 Dreyfus Money Market Fund 30,894 30,894 Goldman Sachs Financial Square Prime Obligation Fund 22,485 22,485 Providian Temp Cash Money Market Fund 46,341 46,341 TOTAL SHORT TERM INSTRUMENTS (Cost: $741,446) 741,446 TOTAL INVESTMENTS IN SECURITIES - 100.31% (Cost $221,875,573) 149,515,820 Other Assets, Less Liabilities - (0.31%) (464,347) ------------ NET ASSETS - 100.00% $149,051,473 ============ /1/ Non-income earning securities. See notes to financial statements. Schedules of Investments 31 Schedule of Investments (Unaudited) iSHARES S&P GLOBAL 100 INDEX FUND September 30, 2002 Security Shares Value - -------------------------------------------------------------------------------- COMMON STOCKS - 99.70% AUSTRALIA - 0.63% Broken Hill Proprietary Co. Ltd. 39,627 $ 194,878 News Corp. Ltd. 15,771 75,330 270,208 BELGIUM - 0.30% Fortis Group 9,135 128,565 128,565 CANADA - 0.28% Alcan Ltd. 3,834 94,623 Nortel Networks Corp./1/ 46,095 24,891 119,514 FINLAND - 1.40% Nokia OYJ ADR 45,360 601,020 601,020 FRANCE - 5.17% Alcatel SA "A" 13,146 30,533 Aventis SA 6,132 321,206 AXA AG 11,760 115,415 BNP Paribas SA 6,993 227,940 Carrefour SA 5,607 224,989 France Telecom SA 4,662 31,977 L'Oreal SA 2,940 212,117 Suez SA 7,686 120,934 TotalFinaElf SA 6,300 829,374 Vivendi Universal SA 8,925 100,117 2,214,602 GERMANY - 3.29% Allianz AG 1,659 142,076 BASF AG 5,250 186,277 Bayer AG 6,300 108,653 DaimlerChrysler AG 6,783 227,262 Deutsche Bank AG 5,607 255,191 Deutsche Telekom AG 20,496 170,564 Siemens AG 7,350 246,986 Volkswagen AG 1,932 69,734 1,406,743 ITALY - 0.46% Assicurazioni Generali SpA 11,403 167,247 Fiat SpA 2,835 27,459 194,706 JAPAN - 5.17% Canon Inc. 8,400 274,618 Fuji Photo Film Co. Ltd. 4,200 125,234 Hitachi Ltd. 29,400 147,315 Honda Motor Co. Ltd. 6,300 255,125 Matsushita Electric Industrial Co. Ltd. 14,700 152,507 Mitsubishi Tokyo Financial Group Inc. 21 155,076 NEC Corp. 14,700 70,880 Sony Corp. 8,400 352,587 Toshiba Corp./1/ 27,300 83,421 Toyota Motor Corp. 23,100 593,913 2,210,676 MEXICO - 0.12% America Movil SA de CV ADR - Series L 4,200 50,736 50,736 NETHERLANDS - 3.26% ING Groep NV 13,608 188,424 Koninklijke (Royal) Philips Electronics NV - NY Shares 12,600 183,078 Royal Dutch Petroleum Co. - NY Shares 18,375 738,124 Unilever NV - NY Shares 4,809 285,895 1,395,521 SPAIN - 1.91% Banco Bilbao Vizcaya Argentaria SA 29,148 217,788 Banco Santander Central Hispano SA 41,370 211,388 Repsol YPF SA 8,253 97,800 Telefonica SA/1/ 38,893 289,834 816,810 SWEDEN - 0.14% Telefonaktiebolaget LM Ericsson AB ADR/1/ 171,339 61,682 61,682 32 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES S&P GLOBAL 100 INDEX FUND September 30, 2002 Security Shares Value - --------------------------------------------------------------- SWITZERLAND - 5.86% ABB Ltd./1/ 13,587 $ 44,915 Credit Suisse Group/1/ 9,786 191,974 Nestle SA 3,402 743,581 Novartis AG 23,436 926,655 Swiss Re 2,331 131,091 UBS AG - Registered/1/ 11,340 471,858 2,510,074 UNITED KINGDOM - 12.39% AstraZeneca PLC 16,086 487,723 Barclays PLC 59,976 350,392 BP PLC 202,314 1,352,166 Diageo PLC 29,589 367,134 GlaxoSmithKline PLC 55,643 1,076,303 HSBC Holdings PLC 83,559 846,244 Reuters Group PLC 13,377 47,543 Vodafone Group PLC 605,724 776,356 5,303,861 UNITED STATES - 59.32% American International Group Inc. 22,974 1,256,678 AOL Time Warner Inc./1/ 39,879 466,584 AT&T Corp. 33,558 403,032 Bristol-Myers Squibb Co. 17,682 420,832 ChevronTexaco Corp. 9,261 641,324 Citigroup Inc. 45,276 1,342,433 Coca-Cola Co. (The) 20,433 979,967 Colgate-Palmolive Co. 4,977 268,509 Dell Computer Corp./1/ 21,273 500,128 Dow Chemical Co. (The) 8,400 229,404 Du Pont (E.I.) de Nemours & Co. 9,198 331,772 EMC Corp./1/ 23,184 105,951 Exxon Mobil Corp. 60,207 1,920,603 Ford Motor Company 15,876 155,585 General Electric Co. 88,725 2,187,071 General Motors Corp. "A" 4,305 167,464 Gillette Co. (The) 8,400 248,640 Hewlett-Packard Co. 25,557 298,250 Intel Corp. 61,215 850,276 International Business Machines Corp. 15,435 901,250 Johnson & Johnson 26,586 1,437,771 JP Morgan Chase & Co. 17,472 331,793 Kimberly-Clark Corp. 4,683 265,245 Lucent Technologies Inc./1/ 35,721 27,148 McDonald's Corp. 12,600 222,516 Merck & Co. Inc. 20,307 928,233 Microsoft Corp./1/ 42,336 1,851,777 Morgan Stanley 9,786 331,550 PepsiCo Inc. 15,393 568,771 Pfizer Inc. 55,818 1,619,838 Philip Morris Companies Inc. 19,194 744,727 Procter & Gamble Co. 11,571 1,034,216 Texas Instruments Inc. 16,989 250,927 3M Co. 3,570 392,593 Tyco International Ltd. 17,619 248,428 United Technologies Corp. 4,200 237,258 Wal-Mart Stores Inc. 24,822 1,222,235 25,390,779 TOTAL COMMON STOCKS (Cost: $68,183,998) 42,675,497 SHORT TERM INSTRUMENTS - 1.70% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 625,066 625,066 Dreyfus Money Market Fund 31,304 31,304 Goldman Sachs Financial Square Prime Obligation Fund 22,784 22,784 Providian Temp Cash Money Market Fund 46,956 46,956 TOTAL SHORT TERM INSTRUMENTS (Cost: $726,110) 726,110 TOTAL INVESTMENTS IN SECURITIES - 101.40% (Cost $68,910,108) 43,401,607 Other Assets, Less Liabilities - (1.40%) (598,183) ----------- NET ASSETS - 100.00% $42,803,424 =========== /1/ Non-income earning securities. See notes to financial statements. Schedules of Investments 33 Schedule of Investments (Unaudited) iSHARES S&P GLOBAL ENERGY SECTOR INDEX FUND September 30, 2002 Security Shares Value - -------------------------------------------------------------------------------- COMMON STOCKS - 99.49% ARGENTINA - 0.13% Perez Companc SA ADR/1/ 3,378 $ 16,991 16,991 AUSTRALIA - 0.67% Woodside Petroleum Ltd. 13,116 88,378 88,378 CANADA - 8.43% Canadian Natural Resources Ltd. 2,310 73,325 EnCana Corp. 10,985 332,417 Husky Energy Inc. 2,964 31,206 Imperial Oil Ltd. 5,850 169,282 Nexen Inc. 2,112 50,543 Petro-Canada 5,298 155,513 Suncor Energy Inc. 12,084 208,053 Talisman Energy Inc. 2,268 90,937 1,111,276 CHINA - 0.53% PetroChina Co. Ltd. ADR 3,468 69,707 69,707 FRANCE - 8.25% TotalFinaElf SA 8,262 1,087,664 1,087,664 ITALY - 4.88% ENI SpA 46,884 643,159 643,159 JAPAN - 0.98% Nippon Oil Corp. 30,000 129,129 129,129 NETHERLANDS - 6.73% Royal Dutch Petroleum Co. 21,990 887,816 887,816 SPAIN - 1.66% Repsol YPF SA ADR 18,264 218,803 218,803 UNITED KINGDOM - 21.14% BG Group PLC 89,112 349,292 BP PLC 273,744 1,829,568 Shell Transport & Trading Co. PLC 102,234 609,335 2,788,195 UNITED STATES - 46.09% Amerada Hess Corp. 2,454 166,578 Anadarko Petroleum Corp. 3,942 175,577 Apache Corp. 2,349 139,648 Baker Hughes Inc. 4,962 144,047 BJ Services Co./1/ 1,842 47,892 Burlington Resources Inc. 3,990 153,056 ChevronTexaco Corp. 9,072 628,236 ConocoPhillips 12,293 568,428 Devon Energy Corp. 2,484 119,853 EOG Resources Inc. 2,826 101,623 Exxon Mobil Corp. 79,086 2,522,843 Halliburton Co. 5,814 75,059 Kerr-McGee Corp. 2,202 95,655 Marathon Oil Corp. 6,114 138,666 Nabors Industries Ltd./1/ 1,950 63,863 Noble Corp./1/ 1,752 54,312 Occidental Petroleum Corp. 7,002 198,717 Rowan Companies Inc. 1,944 36,236 Schlumberger Ltd. 8,034 308,988 Sunoco Inc. 2,340 70,574 Transocean Inc. 4,668 97,094 Unocal Corp. 5,412 169,883 6,076,828 TOTAL COMMON STOCKS (Cost: $14,967,647) 13,117,946 34 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES S&P GLOBAL ENERGY SECTOR INDEX FUND September 30, 2002 Security Shares Value - -------------------------------------------------------------------------------- PREFERRED STOCKS - 0.30% BRAZIL - 0.30% Petroleo Brasileiro SA ADR 4,176 $ 39,881 39,881 TOTAL PREFERRED STOCKS (Cost: $81,578) 39,881 SHORT TERM INSTRUMENTS - 0.11% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 13,928 13,928 TOTAL SHORT TERM INSTRUMENTS (Cost: $13,928) 13,928 TOTAL INVESTMENTS IN SECURITIES - 99.90% (Cost $15,063,153) 13,171,755 Other Assets, Less Liabilities - 0.10% 12,970 ----------- NET ASSETS - 100.00% $13,184,725 =========== /1/ Non-income earning securities. See Notes to Financial Statements. Schedules of Investments 35 Schedule of Investments (Unaudited) iSHARES S&P GLOBAL FINANCIALS SECTOR INDEX FUND September 30, 2002 Security Shares Value - -------------------------------------------------------------------------------- COMMON STOCKS - 99.54% ARGENTINA - 0.05% BBVA Banco Frances SA ADR(1) 2,292 $ 4,011 4,011 AUSTRALIA - 3.21% AMP Ltd. 3,552 22,583 Australia and New Zealand Banking Group Ltd. 4,512 43,275 Commonwealth Bank of Australia 3,744 61,320 Lend Lease Corp. Ltd. 1,352 7,420 National Australia Bank Ltd. 4,560 82,961 Westpac Banking Corp. Ltd. 5,324 40,069 257,628 BELGIUM - 0.92% Dexia Group 1,824 16,441 Fortis Group 3,100 43,629 Groupe Bruxelles Lambert SA 112 4,150 KBC Bankverzekerings Holding NV 308 9,692 73,912 BRAZIL - 0.06% Unibanco - Uniao de Bancos Brasileiros SA GDR 688 4,885 4,885 CANADA - 3.41% Bank of Montreal 1,452 33,769 Bank of Nova Scotia 1,460 41,236 Brascan Corp. "A" 352 7,037 Canadian Imperial Bank of Commerce 1,076 27,453 Manulife Financial Corp. 1,388 29,297 National Bank of Canada 588 10,917 Royal Bank of Canada 1,924 63,923 Sun Life Financial Services of Canada 1,708 27,910 Toronto Dominion Bank 1,856 32,494 274,036 DENMARK - 0.29% Danske Bank A/S 1,536 23,299 23,299 FRANCE - 2.30% AXA AG 4,024 39,492 BNP Paribas SA 2,280 74,318 Credit Lyonnais SA 688 22,500 Societe Generale "A" 1,152 48,571 184,881 GERMANY - 2.27% Allianz AG 520 44,533 Bayerische Hypo-und Vereinsbank AG 1,036 13,741 Commerzbank AG 1,156 7,632 Deutsche Bank AG 1,808 82,287 Marschollek, Lautenschlaeger und Partner AG 200 1,779 Muenchener Rueckversicherungs- Gesellschaft AG 308 32,477 182,449 GREECE - 0.14% National Bank of Greece SA ADR 3,812 11,245 11,245 HONG KONG - 1.37% Bank of East Asia Ltd. 4,800 8,431 Cheung Kong (Holdings) Ltd. 4,000 25,232 Hang Seng Bank Ltd. 2,400 25,155 New World Development Co. Ltd. 8,000 4,102 Sun Hung Kai Properties Ltd. 4,000 23,488 Swire Pacific Ltd. "A" 4,000 15,796 Wharf Holdings Ltd. 4,000 7,616 109,820 IRELAND - 0.78% Allied Irish Banks PLC 2,584 30,902 Bank of Ireland 3,292 32,048 62,950 36 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES S&P GLOBAL FINANCIALS SECTOR INDEX FUND September 30, 2002 Security Shares Value - -------------------------------------------------------------------------------- ITALY - 2.46% Alleanza Assicurazioni SpA 1,468 $ 8,952 Assicurazioni Generali SpA 3,368 49,398 Banca Fideuram SpA 804 2,980 Banca Monte dei Paschi di Siena SpA 3,060 6,245 Banca Nazionale del Lavoro SpA/1/ 5,752 6,282 Capitalia SpA 6,536 6,421 Fineco SpA/1/ 6,088 2,323 IntesaBci SpA 13,164 22,118 Mediobanca SpA 1,676 11,413 Mediolanum SpA 928 3,586 Riunione Adriatica di Sicurta SpA 1,080 12,691 Sanpaolo IMI SpA 3,192 17,951 Unicredito Italiano SpA 13,072 47,285 197,645 JAPAN - 4.95% Acom Co. Ltd. 200 8,444 Credit Saison Co. Ltd. 400 8,789 Daiwa Securities Group Inc. 4,000 22,080 Millea Holdings Inc./1/ 4 32,068 Mitsubishi Estate Co. Ltd. 4,000 31,970 Mitsubishi Tokyo Financial Group Inc. 8 59,077 Mitsui Sumitomo Insurance Co. Ltd. 4,000 18,761 Mizuho Holdings Inc. 12 28,093 Nikko Cordial Corp. 4,000 19,024 Nomura Holdings Inc. 4,000 52,571 ORIX Corp. 400 23,558 Promise Co. Ltd. 200 7,705 Resona Holdings, Inc./1/ 8,000 5,980 Sumitomo Mitsui Banking Corp. 8,000 44,948 Takefuji Corp. 240 13,563 UFJ Holdings Inc. 8 21,226 397,857 MEXICO - 0.06% Grupo Financiero BBVA Bancomer SA de CV "B"/1/ 6,756 4,788 4,788 NETHERLANDS - 1.54% ABN AMRO Holding NV 3,584 39,248 Aegon NV 2,556 23,999 ING Groep NV 4,352 60,260 123,507 SINGAPORE - 0.97% Capitaland Ltd. 8,000 5,491 City Developments Ltd. 4,000 10,578 DBS Group Holdings Ltd. 4,000 25,207 Keppel Corp. Ltd. 4,000 9,768 United Overseas Bank Ltd. 4,000 26,782 77,826 SPAIN - 2.15% Banco Bilbao Vizcaya Argentaria SA 9,608 71,789 Banco Popular Espanol SA 664 25,581 Banco Santander Central Hispano SA 13,720 70,105 Bankinter SA 256 5,617 173,092 SWEDEN - 0.95% ForeningsSparbanken AB 1,000 9,976 Nordea AB 6,804 27,003 Skandia Forsakrings AB 3,048 4,471 Skandinaviska Enskilda Banken AB "A" 1,580 13,461 Svenska Handelsbanken AB "A" 1,696 21,126 76,037 SWITZERLAND - 3.59% Baloise Holding - Registered 160 6,299 Credit Suisse Group/1/ 3,276 64,266 Swiss Re 876 49,265 UBS AG - Registered/1/ 3,464 144,137 Zurich Financial Services AG 260 24,267 288,234 UNITED KINGDOM - 12.51% Abbey National PLC 4,276 34,631 Alliance & Leicester PLC 1,512 18,677 AMVESCAP PLC 2,220 10,508 Aviva PLC 5,872 33,012 Barclays PLC 18,956 110,745 Schedules of Investments 37 Schedule of Investments (Unaudited) (Continued) iSHARES S&P GLOBAL FINANCIALS SECTOR INDEX FUND September 30, 2002 Security Shares Value - -------------------------------------------------------------------------------- British Land Co. PLC 1,552 $ 10,739 Hammerson PLC 836 5,949 HBOS PLC 11,028 101,888 HSBC Holdings PLC 26,784 271,255 Land Securities Group PLC 1,267 14,744 Legal & General Group PLC 14,856 20,209 Legal & General Group PLC - NP/1/ 3,863 1,671 Lloyds TSB Group PLC 15,812 116,746 Northern Rock PLC 1,252 12,916 Old Mutual PLC 11,912 13,066 Prudential Corp. PLC 5,720 30,539 Royal Bank of Scotland Group PLC 7,560 142,666 Royal Sun Alliance Industries Group PLC 3,880 5,873 Slough Estates PLC 1,208 6,079 Standard Chartered PLC 2,928 30,160 3i Group PLC 1,896 12,850 1,004,923 UNITED STATES - 55.56% ACE Ltd. 756 22,385 AFLAC Inc. 1,492 45,790 Allstate Corp. (The) 2,028 72,095 Ambac Financial Group Inc. 308 16,598 American Express Co. 3,764 117,362 American International Group Inc. 7,396 404,561 AmSouth Bancorp 1,060 21,984 AON Corp. 772 15,818 Bank of America Corp. 4,380 279,444 Bank of New York Co. Inc. (The) 2,120 60,929 Bank One Corp. 3,356 125,514 BB&T Corp. 1,304 45,692 Bear Stearns Companies Inc. (The) 276 15,566 Capital One Financial Corp. 616 21,511 Charter One Financial Inc. 672 19,972 Chubb Corp. 496 27,196 Cincinnati Financial Corp. 472 16,794 Citigroup Inc. 14,596 432,771 Comerica Inc. 516 24,882 Countrywide Credit Industries Inc. 348 16,408 Equity Office Properties Trust 1,208 31,191 Equity Residential 800 19,152 Fannie Mae 2,828 168,379 Fifth Third Bancorp 1,688 103,356 First Tennessee National Corp. 400 13,868 FleetBoston Financial Corp. 3,020 61,397 Franklin Resources Inc. 752 23,387 Freddie Mac 1,976 110,458 Golden West Financial Corp. 460 28,603 Goldman Sachs Group Inc. (The) 1,316 86,896 Hancock (John) Financial Services Inc. 860 23,908 Hartford Financial Services Group Inc. 700 28,700 Household International Inc. 1,308 37,030 Huntington Bancshares Inc. 760 13,824 Jefferson-Pilot Corp. 416 16,682 JP Morgan Chase & Co. 5,660 107,483 KeyCorp 1,264 31,562 Lehman Brothers Holdings Inc. 708 34,727 Lincoln National Corp. 552 16,864 Loews Corp. 552 23,675 Marsh & McLennan Companies Inc. 1,556 64,792 Marshall & Ilsley Corp. 556 15,507 MBIA Inc. 436 17,418 MBNA Corp. 3,636 66,830 Mellon Financial Corp. 1,328 34,435 Merrill Lynch & Co. Inc. 2,472 81,452 MetLife Inc. 2,020 45,975 MGIC Investment Corp. 316 12,902 Moody's Corp. 444 21,534 Morgan Stanley 3,140 106,383 National City Corp. 1,748 49,870 North Fork Bancorp Inc. 424 16,044 Northern Trust Corp. 668 25,197 Plum Creek Timber Co. Inc. 528 11,938 PNC Financial Services Group 840 35,423 Principal Financial Group Inc./1/ 968 25,342 Progressive Corp. (The) 636 32,201 Prudential Financial Inc./1/ 1,616 46,153 Regions Financial Corp. 680 22,216 SAFECO Corp. 376 11,949 Schwab (Charles) Corp. (The) 3,976 34,591 Simon Property Group Inc. 432 15,435 38 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES S&P GLOBAL FINANCIALS SECTOR INDEX FUND September 30, 2002 Security Shares Value - -------------------------------------------------------------------------------- SLM Corp. 448 $ 41,727 SouthTrust Corp. 1,016 24,638 St. Paul Companies Inc. 632 18,151 State Street Corp. 936 36,167 Stilwell Financial Inc. 648 7,821 SunTrust Banks Inc. 832 51,151 Synovus Financial Corp. 872 17,981 T. Rowe Price Group Inc. 360 8,986 Torchmark Corp. 368 12,608 Travelers Property Casualty Corp. "B"/1/ 3,295 44,581 U.S. Bancorp 5,472 101,670 Union Planters Corp. 618 16,970 UNUMProvident Corp. 712 14,489 Wachovia Corp. 3,912 127,883 Washington Mutual Inc. 2,728 85,850 Wells Fargo & Company 4,872 234,636 XL Capital Ltd. "A" 372 27,342 Zions Bancorp 280 12,188 4,462,840 TOTAL COMMON STOCKS (Cost: $10,168,957) 7,995,865 SHORT TERM INSTRUMENTS - 0.06% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 5,057 5,057 TOTAL SHORT TERM INSTRUMENTS (Cost: $5,057) 5,057 TOTAL INVESTMENTS IN SECURITIES - 99.60% (Cost $10,174,014) 8,000,922 Other Assets, Less Liabilities - 0.40% 31,934 ---------- NET ASSETS - 100.00% $8,032,856 ========== /1/ Non-income earning securities. See notes to financial statements. Schedules of Investments 39 Schedule of Investments (Unaudited) iSHARES S&P GLOBAL HEALTHCARE SECTOR INDEX FUND September 30, 2002 Security Shares Value - -------------------------------------------------------------------------------- COMMON STOCKS - 99.74% AUSTRALIA - 0.13% CSL Ltd. 1,512 $ 18,109 18,109 BELGIUM - 0.15% UCB SA 721 20,808 20,808 CANADA - 0.23% Biovail Corp./1/ 574 14,222 MDS Inc. 1,218 16,548 30,770 DENMARK - 0.40% Novo Nordisk A/S "B" 1,981 54,035 54,035 FRANCE - 3.67% Aventis SA 5,635 295,172 Essilor International SA 980 39,750 Sanofi-Synthelabo SA 2,926 164,982 499,904 GERMANY - 0.77% Altana AG 637 23,080 Fresenius Medical Care AG 322 6,992 Schering AG 1,554 74,490 104,562 JAPAN - 3.36% Eisai Co. Ltd. 700 16,157 Sankyo Co. Ltd. 5,600 72,495 Takeda Chemical Industries Ltd. 7,000 282,323 Terumo Corp. 700 10,350 Yamanouchi Pharmaceutical Co. Ltd. 3,500 76,762 458,087 SWITZERLAND - 9.81% Novartis AG 21,889 865,487 Roche Holding AG - Bearer 679 76,740 Roche Holding AG - Genusschein 5,831 394,420 1,336,647 UNITED KINGDOM - 10.96% Amersham PLC 6,538 54,955 AstraZeneca PLC 14,413 436,998 GlaxoSmithKline PLC 51,093 988,292 Shire Pharmaceuticals Group PLC/1/ 1,575 12,756 1,493,001 UNITED STATES - 70.26% Abbott Laboratories 12,803 517,241 Aetna Inc. 1,183 42,363 Allergan Inc. 1,092 59,405 AmerisourceBergen Corp. 847 60,493 Amgen Inc./1/ 10,623 442,979 Anthem Inc./1/ 847 55,055 Applera Corp. - Applied Biosystems Group 1,750 32,025 Bard (C.R.) Inc. 434 23,709 Bausch & Lomb Inc. 448 14,860 Baxter International Inc. 4,914 150,123 Becton, Dickinson & Co. 2,149 61,032 Biogen Inc./1/ 1,232 36,061 Biomet Inc. 2,240 59,651 Boston Scientific Corp./1/ 3,332 105,158 Bristol-Myers Squibb Co. 16,037 381,681 Cardinal Health Inc. 3,696 229,891 Chiron Corp./1/ 1,575 55,030 CIGNA Corp. 1,225 86,669 Forest Laboratories Inc. "A"/1/ 1,463 119,981 Genzyme Corp. - General Division/1/ 1,344 27,700 Guidant Corp./1/ 2,534 81,874 HCA Inc. 4,445 211,626 Health Management Associates Inc. "A"/1/ 1,995 40,339 Healthsouth Corp./1/ 3,248 13,479 Humana Inc./1/ 1,421 17,620 IMS Health Inc. 1,736 25,988 Johnson & Johnson 25,431 1,375,308 40 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES S&P GLOBAL HEALTHCARE SECTOR INDEX FUND September 30, 2002 Security Shares Value - -------------------------------------------------------------------------------- King Pharmaceuticals Inc./1/ 2,191 $ 39,810 Lilly (Eli) and Co. 9,289 514,053 Manor Care Inc./1/ 868 19,513 McKesson Corp. 2,366 67,029 MedImmune Inc./1/ 1,757 36,756 Medtronic Inc. 9,989 420,737 Merck & Co. Inc. 18,858 861,999 Monsanto Co. 7 107 Pfizer Inc. 52,115 1,512,377 Pharmacia Corp. 10,745 417,766 Quintiles Transnational Corp./1/ 959 9,120 Schering-Plough Corp. 12,089 257,737 St. Jude Medical Inc./1/ 1,428 50,980 Stryker Corp. 1,631 93,946 Tenet Healthcare Corp./1/ 4,032 199,584 UnitedHealth Group Inc. 2,625 228,952 Watson Pharmaceuticals Inc./1/ 1,169 28,652 WellPoint Health Networks Inc./1/ 1,050 76,965 Wyeth 10,934 347,701 Zimmer Holdings Inc./1/ 1,610 61,727 9,572,852 TOTAL COMMON STOCKS (Cost: $17,383,041) 13,588,775 SHORT TERM INSTRUMENTS - 0.13% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 18,292 18,292 TOTAL SHORT TERM INSTRUMENTS (Cost: $18,292) 18,292 TOTAL INVESTMENTS IN SECURITIES - 99.87% (Cost $17,401,333) 13,607,067 Other Assets, Less Liabilities - 0.13% 17,438 ----------- NET ASSETS - 100.00% $13,624,505 =========== /1/ Non-income earning securities. See notes to financial statements. Schedules of Investments 41 Schedule of Investments (Unaudited) iSHARES S&P GLOBAL TECHNOLOGY SECTOR INDEX FUND September 30, 2002 Security Shares Value - -------------------------------------------------------------------------- COMMON STOCKS AND RIGHTS - 99.92% CANADA - 0.55% ATI Technologies Inc./1/ 837 $ 4,126 Celestica Inc./1/ 660 8,576 Cognos Inc./1/ 270 4,539 Nortel Networks Corp./1/ 11,103 5,529 Zarlink Semiconductor Inc./1/ 456 975 23,745 FINLAND - 5.09% Nokia OYJ 16,419 218,259 218,259 FRANCE - 1.05% Alcatel SA "A" 4,224 9,811 Cap Gemini SA 354 5,668 Dassault Systemes SA 123 1,896 Sagem SA 66 3,777 STMicroelectronics NV 1,782 23,970 45,122 GERMANY - 0.92% Epcos AG/1/ 189 1,343 Infineon Technologies AG/1/ 1,272 7,053 SAP AG 675 30,915 39,311 JAPAN - 11.19% Advantest Corp. 300 11,656 Canon Inc. 3,000 98,078 Fujitsu Ltd. 6,000 25,924 Hitachi Ltd. 12,000 60,128 Hoya Corp. 300 18,605 Kyocera Corp. 600 40,168 Murata Manufacturing Co. Ltd. 600 30,557 NEC Corp. 6,000 28,931 NTT Data Corp. 3 10,769 Ricoh Co. Ltd. 3,000 52,119 Rohm Co. Ltd. 300 35,214 Softbank Corp. 600 5,806 TDK Corp. 300 11,656 Tokyo Electron Ltd. 600 22,967 Toshiba Corp./1/ 9,000 27,501 480,079 NETHERLANDS - 0.24% ASML Holding NV/1/ 1,521 9,350 Getronics NV/1/ 1,143 825 10,175 SINGAPORE - 0.04% Chartered Semiconductor Manufacturing Ltd. ADR/1/ 300 1,629 Chartered Semiconductor Manufacturing Ltd.- Rights/1/ 240 7 1,636 SOUTH KOREA - 2.78% Samsung Electronics Co. Ltd. GDR/2/ 1,008 119,196 119,196 SPAIN - 0.13% Terra Networks SA ADR/1/ 1,392 5,401 5,401 SWEDEN - 0.44% Telefonaktiebolaget LM Ericsson AB "B"/1/ 51,858 18,845 18,845 TAIWAN - 1.89% Advanced Semiconductor Engineering Inc. ADR/1/ 3,687 8,849 Macronix International Co. Ltd. ADR/1/ 2,069 6,414 Taiwan Semiconductor Manufacturing Co. Ltd. ADR/1/ 6,988 44,374 United Microelectronics Corp. ADR/1/ 6,116 21,589 81,226 UNITED KINGDOM - 0.58% Arm Holdings PLC/1/ 3,156 6,154 CMG PLC 2,121 1,309 Dimension Data Holdings PLC/1/ 4,206 1,058 42 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES S&P GLOBAL TECHNOLOGY SECTOR INDEX FUND September 30, 2002 Security Shares Value - -------------------------------------------------------------------------- Logica PLC 1,557 $ 2,938 Misys PLC 2,001 4,689 Sage Group PLC 3,936 6,964 Spirent PLC 2,946 1,668 24,780 UNITED STATES - 75.02% ADC Telecommunications Inc./1/ 2,718 3,126 Adobe Systems Inc. 831 15,872 Advanced Micro Devices Inc./1/ 1,215 6,488 Agilent Technologies Inc./1/ 1,617 21,118 Altera Corp./1/ 1,353 11,730 Analog Devices Inc./1/ 1,260 24,822 Andrew Corp./1/ 294 1,926 Apple Computer Inc./1/ 1,245 18,052 Applied Materials Inc./1/ 5,682 65,627 Applied Micro Circuits Corp./1/ 1,068 3,054 Autodesk Inc. 378 4,789 Avaya Inc./1/ 1,041 1,489 BMC Software Inc./1/ 852 11,136 Broadcom Corp. "A"/1/ 909 9,708 Cisco Systems Inc./1/ 24,867 260,606 Citrix Systems Inc./1/ 648 3,907 Computer Associates International Inc. 2,013 19,325 Computer Sciences Corp./1/ 582 16,174 Compuware Corp./1/ 1,287 3,925 Comverse Technology Inc./1/ 645 4,509 Corning Inc./1/ 3,240 5,184 Dell Computer Corp./1/ 8,841 207,852 Electronic Arts Inc./1/ 447 29,484 Electronic Data Systems Corp. 1,632 22,815 EMC Corp./1/ 7,698 35,180 Gateway Inc./1/ 1,218 3,617 Hewlett-Packard Co. 10,065 117,459 Intel Corp. 22,698 315,275 International Business Machines Corp. 5,781 337,553 Intuit Inc./1/ 726 33,055 Jabil Circuit Inc./1/ 672 9,932 JDS Uniphase Corp./1/ 4,599 8,959 KLA-Tencor Corp./1/ 651 18,189 Lexmark International Group Inc. "A"/1/ 453 21,291 Linear Technology Corp. 1,110 22,999 LSI Logic Corp./1/ 867 5,505 Lucent Technologies Inc./1/ 11,856 9,011 Maxim Integrated Products Inc./1/ 1,143 28,301 Mercury Interactive Corp./1/ 285 4,891 Micron Technology Inc./1/ 2,088 25,829 Microsoft Corp./1/ 18,132 793,094 Millipore Corp. 159 5,055 Motorola Inc. 7,665 78,030 National Semiconductor Corp./1/ 612 7,307 NCR Corp./1/ 327 6,475 Network Appliance Inc./1/ 1,149 8,422 Novell Inc./1/ 1,245 2,614 Novellus Systems Inc./1/ 501 10,426 NVIDIA Corp./1/ 471 4,032 Oracle Corp./1/ 18,561 145,889 Parametric Technology Corp./1/ 924 1,663 PeopleSoft Inc./1/ 1,026 12,692 PerkinElmer Inc. 357 1,946 PMC-Sierra Inc./1/ 585 2,270 QLogic Corp./1/ 324 8,437 QUALCOMM Inc./1/ 2,646 73,082 Rational Software Corp./1/ 576 2,488 Sanmina-SCI Corp./1/ 1,728 4,787 Scientific-Atlanta Inc. 573 7,168 Siebel Systems Inc./1/ 1,578 9,073 Solectron Corp./1/ 2,790 5,887 Sun Microsystems Inc./1/ 11,403 29,534 SunGard Data Systems Inc./1/ 741 14,412 Symbol Technologies Inc. 801 6,144 Tektronix Inc./1/ 333 5,471 Tellabs Inc./1/ 1,425 5,800 Teradyne Inc./1/ 615 5,904 Texas Instruments Inc. 6,063 89,550 Thermo Electron Corp./1/ 639 10,307 Unisys Corp./1/ 1,107 7,749 Veritas Software Corp./1/ 1,383 20,344 Vitesse Semiconductor Corp./1/ 648 441 Waters Corp./1/ 447 10,840 Schedules of Investments 43 Schedule of Investments (Unaudited) (Continued) iSHARES S&P GLOBAL TECHNOLOGY SECTOR INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------------------- Xerox Corp./1/ 2,484 $ 12,296 Xilinx Inc./1/ 1,161 18,388 Yahoo! Inc./1/ 2,100 20,097 3,217,878 TOTAL COMMON STOCKS AND RIGHTS (Cost: $8,606,689) 4,285,653 SHORT TERM INSTRUMENTS - 3.72% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 135,839 135,839 Dreyfus Money Market Fund 7,380 7,380 Goldman Sachs Financial Square Prime Obligation Fund 5,371 5,371 Providian Temp Cash Money Market Fund 11,069 11,069 TOTAL SHORT TERM INSTRUMENTS (Cost: $159,659) 159,659 TOTAL INVESTMENTS IN SECURITIES - 103.64% (Cost $8,766,348) 4,445,312 Other Assets, Less Liabilities - (3.64%) (156,054) ---------- NET ASSETS - 100.00% $4,289,258 ========== /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. 44 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) iSHARES S&P GLOBAL TELECOMMUNICATIONS SECTOR INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- COMMON STOCKS - 99.82% AUSTRALIA - 1.83% Telstra Corp. Ltd. 61,836 $ 159,271 159,271 BRAZIL - 0.28% Tele Norte Leste Participacoes SA ADR 4,536 24,041 24,041 CANADA - 2.55% BCE Inc. 11,034 195,471 TELUS Corp. 3,528 26,112 221,583 DENMARK - 0.44% TDC A/S ADR 3,534 38,344 38,344 FINLAND - 0.36% Sonera OYJ ADR/1/ 7,722 31,274 31,274 FRANCE - 2.13% Bouygues SA 3,528 90,658 France Telecom SA 6,642 45,558 Orange SA/1/ 10,740 48,616 184,832 GERMANY -2.99% Deutsche Telekom AG 31,242 259,990 259,990 HONG KONG - 1.94% China Mobil Ltd./1/ 63,000 145,391 Pacific Century CyberWorks Ltd./1/ 162,000 23,053 168,444 ITALY -7.17% Olivetti SpA/1/ 87,462 73,214 Telecom Italia Mobile SpA 48,186 187,641 Telecom Italia SpA 28,650 142,428 Telecom Italia SpA "A" 30,852 219,848 623,131 JAPAN - 8.97% Nippon Telegraph & Telephone Corp. 114 379,251 NTT DoCoMo Inc. 234 399,803 779,054 MEXICO - 2.55% America Movil SA de CV ADR - Series L 5,562 67,189 Telefonos de Mexico ADR 5,471 154,009 221,198 NETHERLANDS - 1.38% Equant NV/1/ 1,812 4,656 Koninklijke (Royal) KPN NV/1/ 22,134 114,849 119,505 PORTUGAL - 0.91% Portugal Telecom SGPS ADR 17,035 78,702 78,702 SOUTH KOREA - 1.97% KT Corp. ADR 2,784 61,749 SK Telecom Co. Ltd. ADR 5,160 109,547 171,296 SPAIN - 4.83% Telefonica SA/1/ 56,310 419,628 419,628 SWITZERLAND - 1.04% Swisscom AG ADR 3,270 90,088 90,088 UNITED KINGDOM - 17.93% BT Group PLC 112,164 290,157 Cable & Wireless PLC 35,994 65,379 Colt Telecom Group PLC/1/ 14,358 8,297 Schedules of Investments 45 Schedule of Investments (Unaudited) (Continued) iSHARES S&P GLOBAL TELECOMMUNICATIONS SECTOR INDEX FUND September 30, 2002 Security Shares Value - -------------------------------------------------------------------- mm02 PLC/1/ 109,968 $ 69,170 Vodafone Group PLC 877,230 1,124,346 1,557,349 UNITED STATES - 40.55% Alltel Corp. 4,230 169,750 AT&T Corp. 49,398 593,270 AT&T Wireless Services Inc./1/ 34,728 143,079 BellSouth Corp. 24,156 443,504 CenturyTel Inc. 2,046 45,892 Citizens Communications Co./1/ 3,834 25,995 Nextel Communications Inc. "A"/1/ 11,430 86,296 Qwest Communications International Inc./1/ 21,516 49,056 SBC Communications Inc. 43,116 866,632 Sprint Corp. (FON Group) 11,538 105,227 Sprint Corp. (PCS Group)/1/ 12,672 24,837 Verizon Communications Inc. 35,310 968,906 3,522,444 TOTAL COMMON STOCKS (Cost: $14,823,220) 8,670,174 SHORT TERM INSTRUMENTS - 0.10% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 8,842 8,842 TOTAL SHORT TERM INSTRUMENTS (Cost: $8,842) 8,842 TOTAL INVESTMENTS IN SECURITIES - 99.92% (Cost $14,832,062) 8,679,016 Other Assets, Less Liabilities - 0.08% 7,313 ---------- NET ASSETS - 100.00% $8,686,329 ========== /1/ Non-income earning securities. See notes to financial statements. 46 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) iSHARES S&P EUROPE 350 INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------------------- COMMON STOCKS - 99.44% AUSTRIA - 0.04% OMV AG 1,952 $ 164,757 VA Technologie AG 1,464 23,223 187,980 BELGIUM - 1.32% Algemene Maatschappij voor Nijverheidskredit NV 15,128 487,421 Dexia Group 114,680 1,033,680 Electrabel SA 5,612 1,325,626 Fortis Group 174,216 2,451,899 Groupe Bruxelles Lambert SA 12,200 452,044 Interbrew SA 15,616 370,104 KBC Bankverzekerings Holding NV 15,128 476,058 UCB SA 15,616 450,670 7,047,502 DENMARK - 0.61% Danske Bank A/S 97,600 1,480,436 Novo Nordisk A/S "B" 33,428 911,802 TDC A/S 24,400 529,192 Vestas Wind Systems A/S 24,400 334,397 3,255,827 FINLAND - 2.28% Nokia OYJ 742,980 9,876,507 Sonera OYJ/1/ 76,616 283,962 Stora Enso OYJ "R" 95,892 928,781 UPM-Kymmene OYJ 38,064 1,045,839 12,135,089 FRANCE - 13.21% Accor SA 33,428 976,278 Alcatel SA "A" 183,244 425,603 Alstom/1/ 37,576 141,864 Assurances Generales de France 15,372 383,616 Aventis SA 104,432 5,470,347 AXA AG 220,820 2,167,172 BNP Paribas SA 128,344 4,183,424 Bouygues SA 26,840 689,702 Cap Gemini SA 14,640 234,402 Carrefour SA 96,868 3,886,974 Castorama Dubois Investissement SA 10,736 708,801 Christian Dior SA 14,396 411,762 Compagnie de Saint-Gobain SA 56,608 1,249,876 Compagnie Generale des Etablissements Michelin "B" 22,936 644,240 Credit Lyonnais SA 36,600 1,196,970 Dassault Systemes SA 6,100 94,050 Essilor International SA 9,760 395,879 Etablissements Economiques du Casino Guichard-Perrachon SA 5,856 383,725 European Aeronautic Defence and Space Co. 39,528 419,969 France Telecom SA 74,908 513,801 Groupe Danone 22,204 2,677,296 Lafarge SA 17,812 1,422,425 Lagardere S.C.A. 23,180 888,895 L'Air Liquide SA 17,269 2,133,450 L'Oreal SA 45,872 3,309,601 LVMH SA 40,504 1,477,169 Orange SA/1/ 96,380 436,274 Pechiney SA "A" 10,980 291,918 Pinault-Printemps-Redoute SA 10,492 663,657 PSA Peugeot Citroen 35,136 1,299,108 Renault SA 22,692 977,608 Sagem SA 2,440 139,628 Sanofi-Synthelabo SA 52,948 2,985,457 Schneider Electric SA 32,940 1,461,106 Societe Generale "A" 59,292 2,499,899 Societe Television Francaise 1 21,472 456,052 Sodexho Alliance SA 13,664 265,636 STMicroelectronics NV 91,012 1,224,230 Suez SA 145,180 2,284,306 Thales/Ex Thomson CSF 9,760 260,929 Thomson Multimedia SA/1/ 30,012 472,812 TotalFinaElf SA 113,704 14,968,745 Valeo SA 10,004 287,029 Vinci SA 11,468 694,790 Schedules of Investments 47 Schedule of Investments (Unaudited) (Continued) iSHARES S&P EUROPE 350 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------------------ Vivendi Environment SA 19,764 $ 396,531 Vivendi Universal SA 159,088 1,784,586 70,337,592 GERMANY - 8.23% Adidas-Salomon AG 9,272 633,223 Allianz AG 30,500 2,612,005 Altana AG 6,344 229,859 BASF AG 81,740 2,900,241 Bayer AG 122,000 2,104,073 Bayerische Hypo-und Vereinsbank AG 48,800 647,259 Bayerische Motoren Werke AG 48,800 1,567,988 Commerzbank AG 73,200 483,274 Continental AG/1/ 24,400 321,941 DaimlerChrysler AG 132,736 4,447,267 Deutsche Bank AG 97,600 4,442,059 Deutsche Lufthansa AG/1/ 61,000 574,553 Deutsche Post AG 48,800 415,752 Deutsche Telekom AG 378,200 3,147,305 E.ON AG 105,896 5,002,792 Epcos AG/1/ 12,200 86,694 Infineon Technologies AG/1/ 57,584 319,280 Linde AG 12,200 436,489 MAN AG 12,200 160,850 Marschollek, Lautenschlaeger und Partner AG 6,344 56,430 Metro AG 24,400 431,185 Muenchener Rueckversicherungs- Gesellschaft AG 15,860 1,672,369 RWE AG 61,000 1,796,603 SAP AG 33,428 1,530,989 Schering AG 24,400 1,169,599 Siemens AG 128,100 4,304,608 ThyssenKrupp AG 61,000 675,233 TUI AG 12,200 197,627 Volkswagen AG 40,016 1,444,341 43,811,888 GREECE - 0.18% Hellenic Telecommunications Organization SA 77,972 440,542 National Bank of Greece SA ADR 176,523 520,743 961,285 IRELAND - 0.74% Allied Irish Banks PLC 139,080 1,663,244 Bank of Ireland 154,696 1,505,981 CRH PLC 62,464 700,696 Elan Corporation PLC/1/ 46,848 93,991 3,963,912 ITALY - 5.28% Alitalia SpA/1/ 244,000 51,850 Alleanza Assicurazioni SpA 58,316 355,611 Assicurazioni Generali SpA 176,656 2,590,996 Autostrade SpA 106,872 827,050 Banca Fideuram SpA 36,600 135,651 Banca Monte dei Paschi di Siena SpA 98,820 201,682 Banca Nazionale del Lavoro SpA/1/ 244,000 266,472 Capitalia SpA 236,680 232,514 Enel SpA 298,196 1,441,181 ENI SpA 422,852 5,800,726 Fiat SpA 48,800 472,662 Fineco SpA/1/ 244,000 93,086 Finmeccanica SpA 1,220,000 573,888 IntesaBci SpA 732,000 1,229,906 Mediaset SpA 122,000 758,425 Mediobanca SpA 72,224 491,817 Mediolanum SpA 36,600 141,437 Olivetti SpA/1/ 1,098,000 919,136 Pirelli SpA 244,000 205,936 Riunione Adriatica di Sicurta SpA 61,000 716,829 Sanpaolo IMI SpA 183,000 1,029,119 Seat-Pagine Gialle SpA/1/ 894,992 519,274 Telecom Italia Mobile SpA 549,000 2,137,861 48 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES S&P EUROPE 350 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------------- Telecom Italia SpA 366,000 $ 1,819,496 Telecom Italia SpA "A" 378,200 2,695,015 Unicredito Italiano SpA 658,800 2,383,077 28,090,697 LUXEMBOURG - 0.13% Arcelor/1/ 70,272 712,579 712,579 NETHERLANDS - 7.42% ABN AMRO Holding NV 207,400 2,271,196 Aegon NV 138,836 1,303,559 Akzo Nobel NV 48,556 1,564,465 ASML Holding NV/1/ 68,076 418,497 Burhmann NV 9,760 48,906 DSM NV 11,468 469,238 Equant NV/1/ 23,912 61,447 Getronics NV/1/ 57,340 41,371 Gucci Group NV 5,612 472,566 Hagemeyer NV 15,372 116,377 Heineken NV 28,816 1,130,939 ING Groep NV 235,216 3,256,942 Koninklijke Ahold NV 142,496 1,688,606 Koninklijke Numico NV 22,936 244,367 Koninklijke (Royal) KPN NV/1/ 257,666 1,336,977 Randstad Holding NV 11,712 78,829 Reed Elsevier NV 104,188 1,244,942 Royal Dutch Petroleum Co. 327,204 13,210,403 Royal Philips Electronics NV 203,743 2,960,101 TNT Post Group NV 45,384 760,736 Unilever NV - CVA 88,572 5,243,586 VNU NV 32,208 748,379 Wolters Kluwer NV - CVA 47,092 851,734 39,524,163 NORWAY - 0.28% Norsk Hydro ASA 24,400 918,606 Orkla ASA 24,400 390,161 Petroleum Geo-Services/1/ 21,900 16,519 Tomra Systems ASA 24,888 151,797 1,477,083 PORTUGAL - 0.55% Banco Comercial Portugues SA "R" 276,940 588,470 Banco Espirito Santo e Comercial de Lisboa SA 14,640 150,480 Brisa-Auto Estradas de Portugal SA 96,624 477,487 CIMPOR-Cimentos de Portugal SGPS SA 20,008 342,101 Electricidade de Portugal SA 249,124 371,793 Portugal Telecom SGPS SA 174,948 786,724 Vodafone Telecel-Comunicacoes Pessoais SA 28,792 202,039 2,919,094 SPAIN - 4.23% Acerinox SA 7,808 240,151 Altadis SA 50,020 1,117,267 Amadeus Global Travel Distribution SA "A" 43,188 180,984 Autopistas Concesionaria Espanola SA 22,692 257,915 Banco Bilbao Vizcaya Argentaria SA 464,820 3,473,042 Banco Popular Espanol SA 34,892 1,344,228 Banco Santander Central Hispano SA 700,524 3,579,467 Bankinter SA 10,980 240,913 Endesa SA 156,160 1,412,202 Gas Natural SDG SA 32,696 554,197 Grupo Dragados SA 20,740 311,571 Iberdrola SA 132,980 1,721,719 Industria de Diseno Textil SA 16,104 326,282 Repsol YPF SA 141,032 1,671,257 Telefonica SA/1/ 704,213 5,247,866 Terra Networks SA/1/ 72,956 292,028 Union Fenosa SA 41,236 529,817 22,500,906 SWEDEN - 2.17% ASSA Abloy AB "B" 48,800 473,658 Schedules of Investments 49 Schedule of Investments (Unaudited) (Continued) iSHARES S&P EUROPE 350 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------- Atlas Copco AB "A" 24,400 $ 406,558 Electrolux AB "B" 48,800 736,802 ForeningsSparbanken AB 61,000 608,518 Hennes & Mauritz AB "B" 73,200 1,270,986 Nordea AB 366,000 1,452,544 Sandvik AB 40,016 940,792 Securitas AB "B" 48,800 605,232 Skandia Forsakrings AB 162,504 238,345 Skandinaviska Enskilda Banken AB "A" 73,200 623,649 Skanska AB "B" 46,121 227,312 Svenska Cellulosa AB "B" 24,400 755,221 Svenska Handelsbanken AB "A" 97,600 1,215,725 Telefonaktiebolaget LM Ericsson AB "B"/1/ 2,512,468 913,031 Telia AB 146,400 367,874 Volvo AB "B" 48,800 707,859 11,544,106 SWITZERLAND - 11.40% ABB Ltd./1/ 195,200 645,273 Adecco SA 22,204 751,337 Baloise Holding - Registered 5,368 211,339 Ciba Specialty Chemicals AG 4,636 305,563 Clariant AG - Registered 24,400 440,564 Compagnie Financiere Richemont AG 93,208 1,382,433 Credit Suisse Group/1/ 175,680 3,446,350 Holcim Ltd. "B" 4,880 772,645 Nestle SA 61,000 13,332,880 Novartis AG 413,336 16,343,223 Roche Holding AG - Bearer 11,956 1,351,259 Roche Holding AG - Genusschein 108,580 7,344,557 Schweizerische Lebensversicherungs-und Rentenanstalt/1/ 1,464 129,933 Swatch Group (The) AG "B" 3,172 236,845 Swiss Re 43,920 2,469,977 Swisscom AG 3,904 1,085,180 Syngenta AG 19,525 1,065,579 UBS AG - Registered/1/ 198,616 8,264,432 Zurich Financial Services AG 11,956 1,115,904 60,695,273 UNITED KINGDOM - 41.37% Abbey National PLC 223,992 1,814,089 Aegis Group PLC 183,000 196,414 Alliance & Leicester PLC 79,056 976,563 Allied Domecq PLC 181,048 1,141,707 Amersham PLC 107,360 902,414 AMVESCAP PLC 113,460 537,063 Anglo American PLC 218,868 2,770,738 Arm Holdings PLC/1/ 141,276 275,488 Associated British Foods PLC 65,880 590,535 AstraZeneca PLC 277,672 8,418,932 Aviva PLC 328,180 1,845,028 AWG PLC/1/ 46,116 293,713 AWG PLC - Redeemable/1/ 14,388,192 23,021 BAA PLC 181,048 1,506,138 BAE Systems PLC 438,712 1,324,647 Barclays PLC 1,026,756 5,998,514 BBA Group PLC 74,664 202,840 BG Group PLC 544,364 2,133,744 BHP Billiton PLC 361,457 1,676,871 BOC Group PLC 83,448 1,137,763 Boots Co. PLC 152,500 1,267,458 BP PLC 3,489,200 23,320,068 BPB PLC 77,592 326,406 Brambles Industries PLC 122,244 397,941 British Airways PLC/1/ 76,372 115,299 British American Tobacco PLC 260,348 2,657,164 British Land Co. PLC 87,840 607,800 British Sky Broadcasting Group PLC/1/ 152,256 1,227,122 BT Group PLC 1,321,047 3,417,416 Bunzl PLC 77,592 538,116 Cable & Wireless PLC 395,524 718,430 Cadbury Schweppes PLC 344,284 2,301,022 Capita Group PLC 110,532 344,163 Carlton Communications PLC 108,580 186,117 50 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES S&P EUROPE 350 INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------------------- Centrica PLC 677,588 $ 1,766,201 Chubb PLC 123,952 212,466 CMG PLC 101,260 62,498 Cobham PLC 15,616 227,895 Colt Telecom Group PLC/1/ 85,888 49,635 Compass Group PLC 367,464 1,531,369 Cookson Group PLC 122,976 39,168 Corus Group PLC/1/ 528,504 284,652 Daily Mail and General Trust PLC "A" 47,092 348,066 Diageo PLC 534,604 6,633,260 Dimension Data Holdings PLC/1/ 182,512 45,920 Dixons Group PLC 323,788 878,340 Electrocomponents PLC 73,444 291,051 EMAP PLC 42,944 457,203 EMI Group PLC 133,468 356,813 Exel PLC 50,264 497,191 FirstGroup PLC 73,444 281,526 FKI PLC 97,356 124,781 Gallaher Group PLC 106,628 1,016,997 GKN PLC 122,244 468,586 GlaxoSmithKline PLC 984,296 19,039,238 Granada PLC 367,464 388,630 GUS PLC 170,556 1,453,734 Hammerson PLC 48,312 343,788 Hanson PLC 124,440 618,392 Hays PLC 292,556 526,776 HBOS PLC 577,304 5,333,712 Hilton Group PLC 254,004 639,125 HSBC Holdings PLC 1,449,360 14,678,393 IMI PLC 59,536 245,300 Imperial Chemical Industries PLC 165,188 529,940 Imperial Tobacco Group PLC 101,748 1,608,086 Invensys PLC 592,920 566,476 J Sainsbury PLC 198,860 875,640 Johnson Matthey PLC 37,576 493,418 Kingfisher PLC 362,589 1,174,643 Land Securities Group PLC 77,500 901,883 Lattice Group PLC 593,896 1,599,421 Legal & General Group PLC 871,080 1,184,930 Legal & General Group PLC - NP/1/ 226,481 97,953 Lloyds TSB Group PLC 864,248 6,381,089 Logica PLC 68,076 128,466 Lonmin PLC 17,324 231,163 Marks & Spencer Group PLC 358,688 1,810,657 Misys PLC 97,356 228,125 mm02 PLC/1/ 1,321,047 830,939 National Grid Group PLC 251,564 1,786,180 Next PLC 58,072 848,397 Northern Rock PLC 71,492 737,526 Old Mutual PLC 533,140 584,801 P&O Princess Cruises PLC 113,460 795,786 Pearson PLC 110,297 883,744 Peninsular & Oriental Steam Navigation Co. PLC 90,280 241,002 Pilkington PLC 186,416 160,504 Provident Financial PLC 41,968 392,695 Prudential Corp. PLC 290,604 1,551,535 Rank Group PLC 118,828 498,935 Reckitt Benckiser PLC 89,060 1,680,669 Reed International PLC 194,224 1,669,219 Rentokil Initial PLC 357,704 1,171,445 Reuters Group PLC 202,276 718,909 Rio Tinto PLC 158,600 2,549,019 RMC Group PLC 44,408 292,613 Rolls Royce PLC 243,024 382,180 Royal Bank of Scotland Group PLC 406,260 7,666,614 Royal Sun Alliance Industries Group PLC 242,292 366,733 SABMiller PLC 95,648 655,810 Safeway PLC 177,632 582,438 Sage Group PLC 214,720 379,883 Schroders PLC 22,936 162,311 Scottish & Newcastle PLC 105,652 930,435 Scottish & Southern Energy PLC 132,980 1,432,500 Scottish Power PLC 287,188 1,556,990 Severn Trent PLC 58,072 544,291 Shell Transport & Trading Co. PLC 1,527,928 9,106,756 Schedules of Investments 51 Schedule of Investments (Unaudited) (Continued) iSHARES S&P EUROPE 350 INDEX FUND September 30, 2002 Security Shares Value - ------------------------------------------------------------------------------ Shire Pharmaceuticals Group PLC/1/ 70,516 $ 571,102 Six Continents PLC 144,692 1,349,325 Slough Estates PLC 63,684 320,477 Smiths Group PLC 72,473 730,557 Spirent PLC 105,408 59,671 Standard Chartered PLC 154,696 1,593,446 Tate & Lyle PLC 72,956 424,502 Tesco PLC 1,013,088 3,277,948 3i Group PLC 102,480 694,598 Tomkins PLC 161,040 560,951 Trinity Mirror PLC 49,044 273,798 Unilever PLC 426,268 3,867,913 United Business Media PLC 56,153 189,859 United Utilities PLC 93,208 861,149 Vodafone Group PLC 10,593,260 13,577,381 W.H. Smith Group PLC 42,456 205,640 WM Morrison Supermarkets PLC 245,464 826,085 Wolseley PLC 97,356 773,932 WPP Group PLC 167,384 1,122,661 220,285,194 TOTAL COMMON STOCKS (Cost: $736,730,586) 529,450,170 PREFERRED STOCKS - 0.07% GERMANY - 0.07% Porsche AG 976 395,493 395,493 TOTAL PREFERRED STOCKS (Cost: $442,408) 395,493 SHORT TERM INSTRUMENTS - 4.95% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 23,208,582 23,208,582 Dreyfus Money Market Fund 1,225,556 1,225,556 Goldman Sachs Financial Square Prime Obligation Fund 691,986 691,986 Providian Temp Cash Money Market Fund 1,238,334 1,238,334 TOTAL SHORT TERM INSTRUMENTS (Cost: $26,364,458) 26,364,458 TOTAL INVESTMENTS IN SECURITIES - 104.46% (Cost $763,537,452) 556,210,121 Other Assets, Less Liabilities - (4.46%) (23,755,948) ------------- NET ASSETS - 100.00% $ 532,454,173 ============= /1/ Non-income earning securities. See notes to financial statements. 52 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) iSHARES S&P/TSE 60 INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------------------- COMMON STOCKS - 99.27% Royal Bank of Canada 4,419 $ 146,817 BCE Inc. 5,727 101,455 Bank of Nova Scotia 3,358 94,842 EnCana Corp. 3,010 91,086 Bank of Montreal 3,312 77,026 Toronto Dominion Bank 4,279 74,914 Sun Life Financial Services of Canada 4,074 66,573 Manulife Financial Corp. 3,141 66,297 Canadian Imperial Bank of Commerce 2,476 63,172 Barrick Gold Corp. 3,521 54,939 Alcan Inc. 2,026 50,133 Petro-Canada 1,694 49,724 Canadian National Railway Co. 1,325 49,535 Suncor Energy Inc. 2,840 48,897 TransCanada PipeLines Ltd. 3,112 44,339 Talisman Energy Inc. 846 33,921 Magna International Inc. "A" 594 33,823 Thomson Corp. 1,221 30,275 Enbridge Inc. 950 27,712 Biovail Corp./1/ 1,010 25,024 Loblaw Companies Ltd. 700 24,837 Canadian Natural Resources Ltd. 768 24,378 Brascan Corp. "A" 1,203 24,049 Potash Corp. of Saskatchewan Inc. 374 23,225 George Weston Ltd. 335 22,176 National Bank of Canada 1,191 22,113 Imperial Oil Ltd. 740 21,413 Inco Ltd./1/ 1,276 20,698 Placer Dome Inc. 2,230 20,456 Canadian Pacific Railway Ltd. 1,103 19,881 Bombardier Inc. "B" 7,011 19,271 Abitibi-Consolidated Inc. 2,848 19,140 Nexen Inc. 697 16,680 Celestica Inc./1/ 1,235 16,047 Quebecor World Inc. 666 15,661 Fairmont Hotels & Resorts Inc. 605 14,211 TransAlta Corp. 1,122 13,263 Nova Chemicals Corp. 629 13,003 Shaw Communications Inc. "B" 1,521 12,494 Nortel Networks Corp./1/ 24,950 12,425 Precision Drilling Corp./1/ 367 11,083 Noranda Corp. 1,154 10,876 Dofasco Inc. 637 10,763 Molson Inc. "A" 518 10,124 Cognos Inc./1/ 574 9,756 MDS Inc. 667 9,062 TELUS Corp. 1,173 8,682 Domtar Inc. 990 8,619 Husky Energy Inc. 777 8,180 Teck Cominco Ltd. "B" 1,165 7,455 ATI Technologies Inc./1/ 1,476 7,277 CP Ships Ltd. 605 6,846 Canadian Tire Corp. Ltd. "A" 400 6,776 Rogers Communications "B"/1/ 1,037 6,538 Agrium Inc. 671 6,045 Cameco Corp. 316 5,459 Cott Corp./1/ 300 4,549 Royal Group Technologies Ltd./1/ 460 3,973 CAE Inc. 1,039 2,987 Zarlink Semiconductor Inc./1/ 900 1,923 TOTAL COMMON STOCKS (Cost: $3,776,743) 1,752,898 SHORT TERM INSTRUMENTS - 0.13% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2,351 2,351 TOTAL SHORT TERM INSTRUMENTS (Cost: $2,351) 2,351 TOTAL INVESTMENTS IN SECURITIES - 99.40% (Cost $3,779,094) 1,755,249 Other Assets, Less Liabilities - 0.60% 10,533 ---------- NET ASSETS - 100.00% $1,765,782 ========== /1/ Non-income earning securities. See notes to financial statements. Schedules of Investments 53 Schedule of Investments (Unaudited) iSHARES S&P LATIN AMERICA 40 INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------------------- COMMON STOCKS - 98.73% ARGENTINA - 1.52% Perez Companc SA ADR/1/ 7,200 $ 36,216 Siderca SAIC ADR 3,204 49,822 Telecom Argentina SA ADR/1/ 11,024 9,040 95,078 BRAZIL - 29.27% Aracruz Celulose SA ADR 5,200 76,232 Banco Bradesco SA ADR 14,640 155,038 Banco Itau SA ADR 12,000 187,920 Centrais Eletricas Brasileiras SA ADR 22,628 43,170 Companhia de Bebidas das Americas ADR 26,200 280,864 Companhia Energetica de Minas Gerais ADR 10,898 58,304 Companhia Paranaense de Energia ADR 13,044 25,045 Companhia Vale do Rio Doce ADR 15,492 335,402 Embratel Participacoes SA ADR/1/ 34,392 20,635 Empresa Brasileira de Aeronautica SA ADR 6,082 80,891 Petroleo Brasileiro SA ADR 34,160 366,537 Tele Norte Leste Participacoes SA ADR 28,628 151,728 Unibanco - Uniao de Bancos Brasileiros SA GDR 7,760 55,096 1,836,862 CHILE - 2.08% Empresa Nacional de Electricidad SA ADR 12,145 80,157 Enersis SA ADR/1/ 5,644 25,285 Sociedad Quimica y Minera de Chile SA ADR 1,324 25,288 130,730 MEXICO - 65.86% Alfa SA "A"/1/ 64,400 96,948 America Movil SA de CV "L"/1/ 841,200 509,010 Apasco SA de CV 9,600 54,431 Carso Global Telecom "A1"/1/ 166,400 165,102 Cemex SA de CV "CPO" 165,600 690,436 Desc SA de CV "B" 52,400 23,564 Fomento Economico Mexicano SA de CV "UBD" 48,800 165,061 Grupo Carso SA de CV "A1"/1/ 41,600 105,735 Grupo Financiero BBVA Bancomer SA de CV "B"/1/ 400,000 283,480 Grupo Modelo SA de CV "C" 54,400 136,142 Grupo Televisa SA "CPO"/1/ 176,400 222,793 Kimberly-Clark de Mexico SA de CV "A" 68,400 152,785 Savia SA de CV "A"/1/ 28,000 16,150 Telefonos de Mexico SA de CV ADR "L" 838,400 1,182,647 Vitro SA de CV "A" 25,600 21,647 Walmart de Mexico SA de CV "V" 127,200 307,760 4,133,691 TOTAL COMMON STOCKS (Cost: $9,336,780) 6,196,361 PREFERRED STOCKS - 0.51% BRAZIL - 0.51% Centrais Eletricas Brasileiras SA ADR 16,697 32,282 32,282 TOTAL PREFERRED STOCKS (Cost: $117,342) 32,282 SHORT TERM INSTRUMENTS - 0.13% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 7,851 7,851 TOTAL SHORT TERM INSTRUMENTS (Cost: $7,851) 7,851 TOTAL INVESTMENTS IN SECURITIES - 99.37% (Cost $9,461,973) 6,236,494 Other Assets, Less Liabilities - 0.63% 39,673 ---------- NET ASSETS - 100.00% $6,276,167 ========== /1/ Non-income earning securities. See notes to financial statements. 54 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) iSHARES S&P/TOPIX 150 INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------------------- COMMON STOCKS - 99.60% Toyota Motor Corp. 71,100 $ 1,828,017 Sony Corp. 26,100 1,095,540 NTT DoCoMo Inc. 543 927,748 Takeda Chemical Industries Ltd. 22,800 919,567 Nippon Telegraph & Telephone Corp. 264 878,265 Honda Motor Co. Ltd. 20,400 826,120 Canon Inc. 24,000 784,622 Nomura Holdings Inc. 54,000 709,711 Tokyo Electric Power Co. Inc. (The) 33,900 612,617 Matsushita Electric Industrial Co. Ltd. 57,922 600,913 Nissan Motor Co. Ltd. 71,100 527,967 Mitsubishi Tokyo Financial Group Inc. 69 509,537 Hitachi Ltd. 87,000 435,931 East Japan Railway Co. 90 419,911 Sumitomo Mitsui Banking Corp. 69,000 387,677 Rohm Co. Ltd. 3,300 387,358 Millea Holdings Inc./1/ 48 384,820 Fuji Photo Film Co. Ltd. 12,000 357,811 Ito-Yokado Co. Ltd. 9,000 353,376 Nintendo Co. Ltd. 3,000 349,433 Kyocera Corp. 5,100 341,425 Kao Corp. 15,000 330,828 Murata Manufacturing Co. Ltd. 6,300 320,848 Shin-Etsu Chemical Co. Ltd. 9,600 317,792 Ricoh Co. Ltd. 18,000 312,716 Seven-Eleven Japan Co. Ltd. 9,000 304,583 Kansai Electric Power Co. Inc. 21,600 303,400 Chubu Electric Power Co. Inc. 16,800 282,899 Mizuho Holdings Inc. 114 266,880 Toshiba Corp./1/ 84,000 256,679 Mitsubishi Heavy Industries Ltd. 90,000 245,439 Secom Co. Ltd. 6,000 240,020 Mitsubishi Estate Co. Ltd. 30,000 239,772 Sharp Corp. 24,000 230,458 Nippon Steel Corp. 171,000 224,745 Mitsubishi Corp. 33,000 221,734 NEC Corp. 45,000 216,981 AEON Co. Ltd. 8,400 215,279 Bridgestone Corp. 18,000 214,096 Central Japan Railway Co. 33 209,537 Fujitsu Ltd. 48,000 207,394 Tokyo Gas Co. Ltd. 69,000 201,777 Denso Corp. 12,300 200,151 Nikko Cordial Corp. 42,000 199,752 Daiwa Securities Group Inc. 36,000 198,720 Yamanouchi Pharmaceutical Co. Ltd. 9,000 197,388 Dai Nippon Printing Co. Ltd. 18,000 195,023 Mitsui & Co. Ltd. 36,000 188,960 Fujisawa Pharmaceutical Co. Ltd. 9,000 184,820 Mitsui Sumitomo Insurance Co. Ltd. 39,000 182,922 Yamato Transport Co. Ltd. 12,000 180,384 Mitsubishi Electric Corp./1/ 54,000 174,323 Fanuc Ltd. 3,900 174,273 Mitsui Fudosan Co. Ltd. 21,000 170,774 Nippon Oil Corp. 39,000 167,868 Hoya Corp. 2,700 167,447 SMC Corp. 1,800 162,050 Tokyo Electron Ltd. 4,200 160,769 UFJ Holdings Inc. 60 159,192 Toppan Printing Co. Ltd. 18,000 158,945 Sankyo Co. Ltd. 12,000 155,347 JFE Holdings Inc./1/ 13,725 153,778 Eisai Co. Ltd. 6,600 152,341 Sanyo Electric Co. Ltd. 45,000 152,294 Keyence Corp. 900 151,109 Kyushu Electric Power Co. Inc. 11,100 150,444 Sumitomo Chemical Co. Ltd. 39,000 149,604 Asahi Glass Co. Ltd. 24,000 147,461 Kirin Brewery Co. Ltd. 24,000 141,941 ORIX Corp. 2,400 141,350 NTT Data Corp. 39 139,995 Osaka Gas Co. Ltd. 57,000 139,057 Nippon Unipac Holding 27 135,954 Japan Tobacco Inc. 21 132,479 West Japan Railway Company 36 131,296 Schedules of Investments 55 Schedule of Investments (Unaudited) (Continued) iSHARES S&P/TOPIX 150 INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------------------- TDK Corp. 3,300 $ 128,216 Ajinomoto Co. Inc. 12,000 127,057 Sumitomo Corp. 24,000 123,214 Oji Paper Co. Ltd. 24,000 113,357 Daikin Industries Ltd. 6,000 112,864 Sekisui House Ltd. 15,000 112,001 Nippon Express Co. Ltd. 24,000 108,230 Shiseido Co. Ltd. 9,000 107,418 Takefuji Corp. 1,890 106,811 Sumitomo Electric Industries Ltd. 18,000 103,203 Japan Airlines Co. Ltd./1/ 42,000 101,774 Suzuki Motor Corp. 9,000 101,503 Asahi Kasei Corp. 36,000 97,585 Marui Co. Ltd. 9,000 97,511 Daiichi Pharmaceutical Co. Ltd. 6,000 97,388 Sumitomo Trust & Banking Co. Ltd. (The) 18,000 94,480 Taisho Pharmaceutical Co. Ltd. 6,000 94,234 Mitsubishi Chemical Corp./1/ 51,000 93,422 Advantest Corp. 2,400 93,248 All Nippon Airways Co. Ltd./1/ 39,000 92,582 Itochu Corp. 33,000 92,436 Nippon Television Network Corp. 540 91,907 Nitto Denko Corp. 3,600 91,375 Komatsu Ltd. 27,000 90,709 Nippon Yusen Kabushiki Kaisha 27,000 88,935 Acom Co. Ltd. 2,100 88,664 Tostem Inax Holding Corp. 6,000 87,482 Credit Saison Co. Ltd. 3,900 85,695 Toray Industries Inc. 33,000 80,236 Mabuchi Motor Co. Ltd. 900 79,473 Pioneer Corp. 4,800 79,448 Kubota Corp. 27,000 77,404 Mitsui Chemicals Inc. 18,000 77,328 Asahi Breweries Ltd. 12,000 77,280 Terumo Corp. 5,100 75,407 Promise Co. Ltd. 1,950 75,123 Daiwa House Industry Co. Ltd. 12,000 73,337 Matsushita Electric Works Ltd. 12,000 73,040 Kajima Corp. 24,000 72,943 Alps Electric Co. Ltd. 6,000 70,873 Kinki Nippon Railway Co. Ltd./1/ 25,000 67,972 Tokyu Corp. 18,000 66,388 Hirose Electric Co. Ltd. 900 64,613 Sumitomo Metal Mining Co. Ltd. 15,000 61,853 Softbank Corp. 6,300 60,961 NGK Insulators Ltd. 9,000 60,621 Shimizu Corp. 18,000 55,742 Taisei Corp. 27,000 55,447 Nissin Food Products Co. Ltd. 2,700 54,559 Kuraray Co. Ltd. 9,000 53,006 Fuji Heavy Industries Ltd. 15,000 52,612 Diawa Bank Holdings Inc./1/ 66,000 49,335 Nippon Meat Packers Inc. 6,000 48,053 Marubeni Corp./1/ 39,000 47,093 Uni-Charm Corp. 1,200 46,722 Obayashi Corp. 18,000 46,575 Taiyo Yuden Co. Ltd. 3,000 45,836 Minebea Co. Ltd. 9,000 45,614 Nisshin Seifun Group Inc. 6,000 44,603 Mazda Motor Corp. 18,000 42,287 Mitsubishi Materials Corp./1/ 30,000 41,646 Furukawa Electric Co. Ltd. 18,000 40,955 Mitsui Mining & Smelting Co. Ltd. 18,000 39,182 NSK Ltd. 12,000 39,034 TonenGeneral Sekiyu K.K. 6,000 38,344 Ibiden Co. Ltd. 3,000 37,260 Ebara Corporation 9,000 36,742 Kawasaki Heavy Industries Ltd./1/ 36,000 36,670 Sumitomo Metal Industries Ltd./1/ 84,000 33,810 Toyo Seikan Kaisha Ltd. 3,000 33,637 Sekisui Chemical Co. Ltd. 12,000 33,120 Nippon Sheet Glass Co. Ltd. 12,000 30,360 Mitsui Trust Holdings Inc. 9,000 22,326 Fujikura Ltd. 9,000 21,070 Mitsubishi Logistics Corp. 3,000 18,901 TOTAL COMMON STOCKS (Cost: $34,699,960) 29,708,576 56 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES S&P/TOPIX 150 INDEX FUND September 30, 2002 Security Shares Value - ----------------------------------------------------------------------------- SHORT TERM INSTRUMENTS - 9.96% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2,525,416 $ 2,525,416 Dreyfus Money Market Fund 138,127 138,127 Goldman Sachs Financial Square Prime Obligation Fund 100,531 100,531 Providian Temp Cash Money Market Fund 207,190 207,190 TOTAL SHORT TERM INSTRUMENTS (Cost: $2,971,264) 2,971,264 TOTAL INVESTMENTS IN SECURITIES - 109.56% (Cost $37,671,224) 32,679,840 Other Assets, Less Liabilities - (9.56%) (2,851,142) ----------- NET ASSETS - 100.00% $29,828,698 =========== /1/ Non-income earning securities. See notes to financial statements. Schedules of Investments 57 Schedule of Investments (Unaudited) iSHARES NASDAQ BIOTECHNOLOGY INDEX FUND September 30, 2002 Security Shares Value - ---------------------------------------------------------------------------- COMMON STOCKS - 100.03% Amgen Inc./1/ 1,695,182 $ 70,689,089 Gilead Sciences Inc./1/ 343,108 11,504,411 Chiron Corp./1/ 319,945 11,178,878 IDEC Pharmaceuticals Corp./1/ 263,534 10,941,932 MedImmune Inc./1/ 443,004 9,267,644 Genzyme Corp. - General Division/1/ 420,989 8,676,583 Biogen Inc./1/ 272,958 7,989,481 Amylin Pharmaceuticals Inc./1/ 406,730 6,759,853 InterMune Inc./1/ 180,755 5,932,379 Millennium Pharmaceuticals Inc./1/ 624,674 5,821,962 OSI Pharmaceuticals Inc./1/ 342,760 5,816,637 Cephalon Inc./1/ 139,096 5,677,899 Affymetrix Inc./1/ 272,397 5,665,858 Medicines Co. (The)/1/ 512,880 5,630,397 Neurocrine Biosciences Inc./1/ 136,351 5,590,391 Isis Pharmaceuticals Inc./1/ 555,965 5,481,815 NPS Pharmaceuticals Inc./1/ 265,992 5,470,923 Scios Inc./1/ 207,038 5,269,117 Cell Genesys Inc./1/ 436,828 5,263,777 CV Therapeutics Inc./1/ 246,771 5,159,982 ImClone Systems Inc./1/ 657,055 5,125,029 Invitrogen Corp./1/ 149,836 5,104,913 Ligand Pharmaceuticals Inc. "B"/1/ 748,945 5,092,826 Myriad Genetics Inc./1/ 318,742 5,048,873 Trimeris Inc./1/ 112,283 4,987,611 Transkaryotic Therapies Inc./1/ 152,734 4,981,878 Celgene Corp./1/ 293,735 4,946,497 Tularik Inc./1/ 715,286 4,899,709 QLT Inc./1/ 636,618 4,895,592 Human Genome Sciences Inc./1/ 405,475 4,890,029 Alkermes Inc./1/ 613,514 4,840,625 Vertex Pharmaceuticals Inc./1/ 260,616 4,818,790 Regeneron Pharmaceuticals Inc./1/ 349,863 4,723,151 Abgenix Inc./1/ 727,487 4,721,391 Telik Inc./1/ 380,963 4,716,322 ICOS Corp./1/ 223,488 4,686,543 Enzon Inc./1/ 242,992 4,675,166 United Therapeutics Inc./1/ 272,242 4,478,381 Genta Inc./1/ 694,814 4,460,706 Qiagen NV/1/ 970,095 4,452,736 Albany Molecular Research Inc./1/ 261,113 4,446,754 Tanox Inc./1/ 410,336 4,308,528 Incyte Genomics Inc./1/ 899,882 4,175,453 Protein Design Labs Inc./1/ 502,724 4,172,609 Corixa Corp./1/ 640,037 4,051,434 Inhale Therapeutic Systems Inc./1/ 768,158 3,862,298 BioMarin Pharmaceutical Inc./1/ 664,517 3,847,553 Diversa Corp./1/ 431,596 3,681,514 Atrix Laboratories Inc./1/ 247,598 3,664,450 Medarex Inc./1/ 978,966 3,279,536 Immunomedics Inc./1/ 520,650 3,123,900 Antigenics Inc./1/ 353,338 2,854,971 Exelixis Inc./1/ 572,899 2,835,850 Gene Logic Inc./1/ 223,459 1,736,276 Alexion Pharmaceuticals Inc./1/ 144,903 1,679,426 CuraGen Corp./1/ 394,518 1,664,866 Luminex Corp./1/ 236,358 1,663,960 Array BioPharma Inc./1/ 205,120 1,597,885 NeoPharm Inc./1/ 109,959 1,550,422 Pharmacopeia Inc./1/ 165,193 1,463,610 Avigen Inc./1/ 130,144 1,032,042 Arena Pharmaceuticals Inc./1/ 181,469 1,016,226 ILEX Oncology Inc./1/ 197,848 939,778 Cell Therapeutics Inc./1/ 201,933 888,505 Immunogen Inc./1/ 268,939 871,362 Cubist Pharmaceuticals Inc./1/ 157,887 806,803 Guilford Pharmaceuticals Inc./1/ 154,592 748,225 VaxGen Inc./1/ 79,270 701,619 ArQule Inc./1/ 118,550 610,533 Novavax Inc./1/ 115,130 498,513 Caliper Technologies Corp./1/ 116,306 487,322 Geron Corp./1/ 122,052 476,003 Emisphere Technologies Inc./1/ 69,341 205,249 EntreMed Inc./1/ 84,710 136,383 ViroPharma Inc./1/ 89,180 90,072 TOTAL COMMON STOCKS (Cost: $520,233,331) 369,505,706 58 2002 iShares Semi-Annual Report to Shareholders Schedule of Investments (Unaudited) (Continued) iSHARES NASDAQ BIOTECHNOLOGY INDEX FUND September 30, 2002 Shares or Security Principal Value - ----------------------------------------------------------------------------- SHORT TERM INSTRUMENTS - 20.15% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 63,697,581 $ 63,697,581 Dreyfus Money Market Fund 3,460,056 3,460,056 General Electric Commercial Paper 1.74%, 11/04/02 $ 1,000,000 1,000,000 Goldman Sachs Financial Square Prime Obligation Fund 895,672 895,672 Providian Temp Cash Money Market Fund 5,390,084 5,390,084 TOTAL SHORT TERM INSTRUMENTS (Cost: $74,443,393) 74,443,393 TOTAL INVESTMENTS IN SECURITIES - 120.18% (Cost $594,676,724) 443,949,099 Other Assets, Less Liabilities - (20.18%) (74,559,870) ------------ NET ASSETS - 100.00% $369,389,229 ============ /1/ Non-income earning securities. See notes to financial statements. Schedules of Investments 59 Statements of Assets and Liabilities (Unaudited) iSHARES TRUST September 30, 2002
iShares S&P ------------------------------------------------------------------------------ Global Global Global Global Energy Financials Healthcare Technology 100 Global 100 Sector Sector Sector Sector Index Fund Index Fund Index Fund Index Fund Index Fund Index Fund - ----------------------------------------------------------------------------------------------------------------------------------- ASSETS Investments at cost $221,875,573 $ 68,910,108 $15,063,153 $10,174,014 $17,401,333 $ 8,766,348 ------------ ------------ ----------- ----------- ----------- ----------- Foreign currency, at cost $ - $ 15,487 $ 39,179 $ 9,940 $ 11,240 $ 5,326 ------------ ------------ ----------- ----------- ----------- ----------- Investments in securities, at value (including securities on loan/1/) (Note 1) $149,515,820 $ 43,401,607 $13,171,755 $ 8,000,922 $13,607,067 $ 4,445,312 Foreign currency, at value - 14,096 39,202 9,956 11,255 5,593 Receivables: Investment securities sold - - 41,754 - - - Dividends and interest 253,759 85,608 13,581 31,694 21,660 2,333 ------------ ------------ ----------- ----------- ----------- ----------- Total Assets 149,769,579 43,501,311 13,266,292 8,042,572 13,639,982 4,453,238 ------------ ------------ ----------- ----------- ----------- ----------- LIABILITIES Payables: Investment securities purchased - - 66,305 - - - Collateral for securities on loan (Note 5) 663,533 672,345 - - - 158,496 Advisory fees (Note 2) 54,573 25,542 15,262 9,716 15,477 5,484 ------------ ------------ ----------- ----------- ----------- ----------- Total Liabilities 718,106 697,887 81,567 9,716 15,477 163,980 ------------ ------------ ----------- ----------- ----------- ----------- NET ASSETS $149,051,473 $ 42,803,424 $13,184,725 $ 8,032,856 $13,624,505 $ 4,289,258 ============ ============ =========== =========== =========== =========== Net Assets Consist Of: Paid-in capital $229,210,487 $ 69,427,891 $14,891,596 $10,199,110 $17,476,128 $ 8,710,899 Undistributed net investment income (accumulated net investment loss) 104,842 449,662 230,266 143,646 89,595 (10,128) Undistributed net realized loss (7,904,103) (1,564,771) (45,787) (137,166) (147,078) (90,760) Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies (72,359,753) (25,509,358) (1,891,350) (2,172,734) (3,794,140) (4,320,753) ----------- ------------ ----------- ----------- ----------- ----------- NET ASSETS $149,051,473 $ 42,803,424 $13,184,725 $ 8,032,856 $13,624,505 $ 4,289,258 ============ ============ =========== =========== =========== =========== iShares outstanding 3,650,000 1,050,000 300,000 200,000 350,000 150,000 ============ ============ =========== =========== =========== =========== Net asset value per iShare $ 40.84 $ 40.77 $ 43.95 $ 40.16 $ 38.93 $ 28.60 ============ ============ =========== =========== =========== ===========
/1/ Securities on loan with market values of $605,275, $649,386, $-, $-, $- and $143,780, respectively. See Note 5. See notes to financial statements. 60 2002 iShares Semi-Annual Report to Shareholders Statements of Assets and Liabilities (Unaudited) (Continued) iSHARES TRUST September 30, 2002
iShares S&P iShares Nasdaq ------------------------------------------------------------------------------ -------------- Global Telecommunications Latin Sector Europe 350 /TSE 60 America 40 /TOPIX 150 Biotechnology Index Fund Index Fund Index Fund Index Fund Index Fund Index Fund - ----------------------------------------------------------------------------------------------------------------------------------- ASSETS Investments at cost $ 14,832,062 $ 763,537,452 $ 3,779,094 $ 9,461,973 $ 37,671,224 $ 594,676,724 ---------------- -------------- -------------- ------------ ------------ ------------- Foreign currency, at cost $ 4,599 $ 1,366,125 $ 4,901 $ 15,484 $ 41,280 $ - ---------------- -------------- -------------- ------------ ------------ ------------- Investments in securities, at value (including securities on loan /1/) (Note 1) $ 8,679,016 $ 556,210,121 $ 1,755,249 $ 6,236,494 $ 32,679,840 $ 443,949,099 Foreign currency, at value 4,568 1,377,448 4,889 15,161 40,156 - Receivables: Investment securities sold - - - - 75,366 74,647 Dividends and interest 13,531 1,752,630 10,067 30,520 98,886 53,571 ---------------- -------------- -------------- ------------ ------------ ------------- Total Assets 8,697,115 559,340,199 1,770,205 6,282,175 32,894,248 444,077,317 ---------------- -------------- -------------- ------------ ------------ ------------- LIABILITIES Payables: Investment securities purchased - - - - 73,028 - Collateral for securities on loan (Note 5) - 26,322,272 - - 2,966,660 74,314,463 Advisory fees (Note 2) 10,786 563,754 4,423 6,008 25,862 373,625 ---------------- -------------- -------------- ------------ ------------ ------------- Total Liabilities 10,786 26,886,026 4,423 6,008 3,065,550 74,688,088 ---------------- -------------- -------------- ------------ ------------ ------------- NET ASSETS $ 8,686,329 $ 532,454,173 $ 1,765,782 $ 6,276,167 $ 29,828,698 $ 369,389,229 ================ ============== ============== ============ ============ ============= Net assets consist of: Paid-in capital $ 15,205,292 $ 737,610,610 $ 5,420,374 $ 9,226,468 $ 34,773,370 $ 608,459,352 Undistributed net investment income (accumulated net investment loss) 135,822 8,466,000 51,022 154,591 84,785 (790,488) Undistributed net realized gain (loss) (501,763) (6,333,588) (1,681,685) 120,911 (37,695) (87,552,010) Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies (6,153,022) (207,288,849) (2,023,929) (3,225,803) (4,991,762) (150,727,625) ---------------- -------------- -------------- ------------ ------------ ------------- NET ASSETS $ 8,686,329 $ 532,454,173 $ 1,765,782 $ 6,276,167 $ 29,828,698 $ 369,389,229 ================ ============== ============== ============ ============ ============= iShares outstanding 300,000 12,200,000 50,000 200,000 450,000 7,950,000 ================ ============== ============== ============ ============ ============= Net asset value per iShare $ 28.95 $ 43.64 $ 35.32 $ 31.38 $ 66.29 $ 46.46 ================ ============== ============== ============ ============ =============
/1/ Securities on loan with market values of $-, $24,585,120, $-, $-, $2,803,802 and $70,111,775, respectively. See Note 5. See notes to financial statements. Financial Statements 61 Statements of Operations (Unaudited) iSHARES TRUST For the six months ended September 30, 2002
iShares S&P ------------------------------------------------------------------------------------ Global Global Global Global Energy Financials Healthcare Technology 100 Global 100 Sector Sector Sector Sector Index Fund Index Fund Index Fund Index Fund Index Fund Index Fund - ------------------------------------------------------------------------------------------------------------------------------------ NET INVESTMENT INCOME Dividends/1/ $ 1,086,247 $ 401,419 $ 234,666 $ 127,371 $ 104,020 $ 9,381 Interest 855 222 160 105 192 45 Securities lending income 530 2,077 - - - 397 ------------ ------------ ----------- ----------- ----------- ----------- Total investment income 1,087,632 403,718 234,826 127,476 104,212 9,823 ------------ ------------ ----------- ----------- ----------- ----------- EXPENSES (NOTE 2) Advisory fees 131,082 80,594 49,059 32,060 49,133 19,397 ------------ ------------ ----------- ----------- ----------- ----------- Total expenses 131,082 80,594 49,059 32,060 49,133 19,397 ------------ ------------ ----------- ----------- ----------- ----------- Net investment income (loss) 956,550 323,124 185,767 95,416 55,079 (9,574) ------------ ------------ ----------- ----------- ----------- ----------- NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from: Investments (3,977,945) (617,575) (38,818) (137,142) (139,644) (65,698) In-kind redemptions 170,036 - - - - - Foreign currency transactions - 1,968 1,870 4,057 1,742 622 ------------ ------------ ----------- ----------- ----------- ----------- Net realized loss (3,807,909) (615,607) (36,948) (133,085) (137,902) (65,076) ------------ ------------ ----------- ----------- ----------- ----------- Net change in unrealized appreciation (depreciation) on: Investments (44,191,434) (13,606,731) (3,336,263) (2,593,003) (3,465,337) (3,422,930) Translation of assets and liabilities in foreign currencies - 668 158 175 582 393 ------------ ------------ ----------- ----------- ----------- ----------- Net change in unrealized appreciation (depreciation) (44,191,434) (13,606,063) (3,336,105) (2,592,828) (3,464,755) (3,422,537) ------------ ------------ ----------- ----------- ----------- ----------- Net realized and unrealized loss (47,999,343) (14,221,670) (3,373,053) (2,725,913) (3,602,657) (3,487,613) ------------ ------------ ----------- ----------- ----------- ----------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(47,042,793) $(13,898,546) $(3,187,286) $(2,630,497) $(3,547,578) $(3,497,187) ============ ============ =========== =========== =========== ===========
/1/ Net of foreign withholding tax of $-, $41,712, $23,013, $10,481, $5,380 and $1,080, respectively. See notes to financial statements. 62 2002 iShares Semi-Annual Report to Shareholders Statements of Operations (Unaudited) (Continued) iSHARES TRUST For the six months ended September 30, 2002
iShares S&P iShares Nasdaq ------------------------------------------------------------------------------------ -------------- Global Telecommunications Latin Sector Europe 350 /TSE 60 America 40 /TOPIX 150 Biotechnology Index Fund Index Fund Index Fund Index Fund Index Fund Index Fund - --------------------------- ----------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME Dividends/1/ $ 141,697 $ 9,250,434 $ 49,200 $ 127,156 $ 119,641 $ 142 Interest 113 - 29 257 233 3,201 Securities lending income - 302,987 - - 3,387 101,495 -------------- ---------------- -------------- -------------- -------------- -------------- Total investment income 141,810 9,553,421 49,229 127,413 123,261 104,838 -------------- ---------------- -------------- -------------- -------------- -------------- EXPENSES (NOTE 2) Advisory fees 35,854 1,753,842 15,222 23,452 83,067 895,326 -------------- ---------------- -------------- -------------- -------------- -------------- Total expenses 35,854 1,753,842 15,222 23,452 83,067 895,326 -------------- ---------------- -------------- -------------- -------------- -------------- Net investment income (loss) 105,956 7,799,579 34,007 103,961 40,194 (790,488) -------------- ---------------- -------------- -------------- -------------- -------------- NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from: Investments (484,699) (647,536) 25,205 (14,678) (38,329) (88,610,668) In-kind redemptions - - (1,639,273) 158,946 - 5,416,266 Foreign currency transactions 4,092 322,326 121 (4,180) 16,755 - -------------- ---------------- -------------- -------------- -------------- -------------- Net realized gain (loss) (480,607) (325,210) (1,613,947) 140,088 (21,574) (83,194,402) -------------- ---------------- -------------- -------------- -------------- -------------- Net change in unrealized appreciation (depreciation) on: Investments (4,390,512) (183,766,274) 20,434 (4,841,200) (3,306,768) (95,166,664) Translation of assets and liabilities in foreign currencies 43 38,127 20 (454) (341) - -------------- ---------------- -------------- -------------- -------------- -------------- Net change in unrealized appreciation (depreciation) (4,390,469) (183,728,147) 20,454 (4,841,654) (3,307,109) (95,166,664) -------------- ---------------- -------------- -------------- -------------- -------------- Net realized and unrealized loss (4,871,076) (184,053,357) (1,593,493) (4,701,566) (3,328,683) (178,361,066) -------------- ---------------- -------------- -------------- -------------- -------------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (4,765,120) $ (176,253,778) $ (1,559,486) $ (4,597,605) $ (3,288,489) $ (179,151,554) ============== ================ ============== ============== ============== ==============
/1/ Net of foreign withholding tax of $10,636, $1,498,351, $8,682, $5,369, $21,113 and $-, respectively. See Notes to Financial Statements. Financial Statements 63 Statements of Changes in Net Assets iSHARES TRUST
iShares S&P Global iShares S&P 100 iShares S&P Global Energy Index Fund 100 Index Fund Sector Index Fund ----------------------------------- ---------------------------------- ------------------ For the six For the six For the six months ended For the months ended For the months ended September 30, 2002 year ended September 30, 2002 year ended September 30, 2002 (Unaudited) March 31, 2002 (Unaudited) March 31, 2002 (Unaudited) - ---------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 956,550 $ 1,851,385 $ 323,124 $ 688,591 $ 185,767 Net realized loss (3,807,909) (12,912,402) (615,607) (9,046,996) (36,948) Net change in unrealized appreciation (depreciation) (44,191,434) (7,000,453) (13,606,063) 6,705,969 (3,336,105) ------------- ------------- ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations (47,042,793) (18,061,470) (13,898,546) (1,652,436) (3,187,286) ------------- ------------- ------------ ------------ ------------ DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income (927,876) (1,797,714) - (643,292) - ------------- ------------- ------------ ------------ ------------ Total distributions to iShareholders (927,876) (1,797,714) - (643,292) - ------------- ------------- ------------ ------------ ------------ iSHARES TRANSACTIONS: iShares sold 122,631,863 223,696,594 11,035,627 12,486,982 - iShares redeemed (41,312,692) (176,896,167) - (67,931,706) - ------------- ------------- ------------ ------------ ------------ Net increase (decrease) in net assets from iShares transactions 81,319,171 46,800,427 11,035,627 (55,444,724) - ------------- ------------- ------------ ------------ ------------ INCREASE (DECREASE) IN NET ASSETS 33,348,502 26,941,243 (2,862,919) (57,740,452) (3,187,286) NET ASSETS: Beginning of period 115,702,971 88,761,728 45,666,343 103,406,795 16,372,011 ------------- ------------- ------------ ------------ ------------ End of period $ 149,051,473 $ 115,702,971 $ 42,803,424 $ 45,666,343 $ 13,184,725 ============= ============= ============ ============ ============ Undistributed net investment income included in net assets at end of period $ 104,842 $ 76,168 $ 449,662 $ 126,538 $ 230,266 ============= ============= ============ ============ ============ iSHARES ISSUED AND REDEEMED: iShares sold 2,600,000 3,550,000 250,000 200,000 - iShares redeemed (950,000) (3,050,000) - (1,100,000) - ------------- ------------- ------------ ------------ ------------ Net increase (decrease) in iShares outstanding 1,650,000 500,000 $ 250,000 (900,000) - ============= ============= ============ ============ ============ iShares S&P Global Energy Sector Index Fund ------------------------ For the period November 12, 2001/1/ to March 31, 2002 - -------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 66,255 Net realized loss (9,137) Net change in unrealized appreciation (depreciation) 1,444,755 -------------- Net increase (decrease) in net assets resulting from operations 1,501,873 -------------- DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income (21,458) -------------- Total distributions to iShareholders (21,458) -------------- iSHARES TRANSACTIONS: iShares sold 14,891,596 iShares redeemed - -------------- Net increase (decrease) in net assets from iShares transactions 14,891,596 -------------- INCREASE (DECREASE) IN NET ASSETS 16,372,011 NET ASSETS: Beginning of period - -------------- End of period $ 16,372,011 ============== Undistributed net investment income included in net assets at end of period $ 44,499 ============== iSHARES ISSUED AND REDEEMED: iShares sold 300,000 iShares redeemed - -------------- Net increase (decrease) in iShares outstanding 300,000 ==============
/1/ Commencement of operations. See notes to financial statements. 64 2002 iShares Semi-Annual Report to Shareholders Statements of Changes in Net Assets (Continued) iSHARES TRUST
iShares S&P Global iShares S&P Global Financials Healthcare Sector Index Fund Sector Index Fund -------------------------------------------- ----------------------------------------- For the six For the period For the six For the period months ended November 12, 2001/1/ months ended November 13, 2001/1/ September 30, 2002 to September 30, 2002 to (Unaudited) March 31, 2002 (Unaudited) March 31, 2002 - ------------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income (loss) $ 95,416 $ 57,022 $ 55,079 $ 39,397 Net realized gain (loss) (133,085) (4,301) (137,902) (9,191) Net change in unrealized appreciation (depreciation) (2,592,828) 420,094 (3,464,755) (329,385) ------------------ ------------------- ------------------ ---------------- Net increase (decrease)in net assets resulting from operations (2,630,497) 472,815 (3,547,578) (299,179) ------------------ ------------------- ------------------ ---------------- DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income - (8,572) - (4,866) ------------------ ------------------- ------------------ ---------------- Total distributions to iShareholders - (8,572) - (4,866) ------------------ ------------------- ------------------ ---------------- iSHARES TRANSACTIONS: iShares sold - 10,199,110 - 17,476,128 iShares redeemed - - - - ------------------ ------------------- ------------------ ---------------- Net increase in net assets from iShares transactions - 10,199,110 - 17,476,128 ------------------ ------------------- ------------------ ---------------- INCREASE (DECREASE) IN NET ASSETS (2,630,497) 10,663,353 (3,547,578) 17,172,083 NET ASSETS: Beginning of period 10,663,353 - 17,172,083 - ------------------ ------------------- ------------------ ---------------- End of period $ 8,032,856 $ 10,663,353 $ 13,624,505 $ 17,172,083 ================== =================== ================== ================ Undistributed net investment income (accumulated net investment loss)included in net assets at end of period $ 143,646 $ 48,230 $ 89,595 $ 34,516 ================== =================== ================== ================ iSHARES ISSUED AND REDEEMED: iShares sold - 200,000 - 350,000 iShares redeemed - - - - ------------------ ------------------- ------------------ ---------------- Net increase in iShares outstanding - 200,000 - 350,000 ================== =================== ================== ================ iShares S&P Global Technology Sector Index Fund -------------------------------------------- For the six For the period months ended November 12, 2001(1) September 30, 2002 to (Unaudited) March 31, 2002 - -------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income (loss) $ (9,574) $ (29,087) Net realized gain (loss) (65,076) 383,558 Net change in unrealized appreciation (depreciation) (3,422,537) (898,216) ------------------ ------------------- Net increase (decrease) in net assets resulting from operations (3,497,187) (543,745) ------------------ ------------------- DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income - - ------------------ ------------------- Total distributions to iShareholders - - ------------------ ------------------- iSHARES TRANSACTIONS: iShares sold - 32,221,480 iShares redeemed - (23,891,290) ------------------ ------------------- Net increase in net assets from iShares transactions - 8,330,190 ------------------ ------------------- INCREASE (DECREASE) IN NET ASSETS (3,497,187) 7,786,445 NET ASSETS: Beginning of period 7,786,445 - ------------------ ------------------- End of period $ 4,289,258 $ 7,786,445 ================== =================== Undistributed net investment income (accumulated net investment loss) included in net assets at end of period $ (10,128) $ (554) ================== =================== iSHARES ISSUED AND REDEEMED: iShares sold - 600,000 iShares redeemed - (450,000) ------------------ ------------------- Net increase in iShares outstanding - 150,000 ================== ===================
/1/ Commencement of operations. See notes to financial statements. Financial Statements 65 Statements of Changes in Net Assets (Continued) iSHARES TRUST
iShares S&P Global Telecommunications iShares S&P Europe Sector Index Fund 350 Index Fund ----------------------------------------------------------------------------- For the six For the period For the six months ended November 12, 2001/1/ months ended For the September 30, 2002 to September 30, 2002 year ended (Unaudited) March 31, 2002 (Unaudited) March 31, 2002 - -------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 105,956 $ 34,047 $ 7,799,579 $ 2,912,676 Net realized loss (480,607) (20,728) (325,210) (699,025) Net change in unrealized appreciation (depreciation) (4,390,469) (1,762,553) (183,728,147) (5,888,117) ----------- ----------- ------------- ------------ Net increase (decrease) in net assets resulting from operations (4,765,120) (1,749,234) (176,253,778) (3,674,466) ----------- ----------- ------------- ------------ DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income - (4,609) - (2,498,708) ----------- ----------- ------------- ------------ Total distributions to iShareholders - (4,609) - (2,498,708) ----------- ----------- ------------- ------------ iSHARES TRANSACTIONS: iShares sold - 15,205,292 138,950,612 441,584,206 iShares redeemed - - - (20,310,137) ----------- ----------- ------------- ------------ Net increase (decrease) in net assets from iShares transactions - 15,205,292 138,950,612 421,274,069 ----------- ----------- ------------- ------------ INCREASE (DECREASE) IN NET ASSETS (4,765,120) 13,451,449 (37,303,166) 415,100,895 NET ASSETS: Beginning of period 13,451,449 - 569,757,339 154,656,444 ----------- ----------- ------------- ------------ End of period $ 8,686,329 $13,451,449 $ 532,454,173 $569,757,339 =========== =========== ============= ============ Undistributed net investment income included in net assets at end of period $ 135,822 $ 29,866 $ 8,466,000 $ 666,421 =========== =========== ============= ============ iSHARES ISSUED AND REDEEMED: iShares sold - 300,000 2,550,000 7,550,000 iShares redeemed - - - (350,000) ----------- ----------- ------------- ------------ Net increase (decrease) in iShares outstanding - 300,000 2,550,000 7,200,000 =========== =========== ============= ============ iShares S&P Europe 60 Index Fund ----------------------------------- For the six months ended For the September 30, 2002 year ended (Unaudited) March 31, 2002 - -------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 34,007 $ 70,014 Net realized loss (1,613,947) (36,071) Net change in unrealized appreciation (depreciation) 20,454 126,306 ----------- ---------- Net increase (decrease) in net assets resulting from operations (1,559,486) 160,249 ----------- ---------- DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income - (59,927) ----------- ---------- Total distributions to iShareholders - (59,927) ----------- ---------- iSHARES TRANSACTIONS: iShares sold 1,916,795 - iShares redeemed (5,343,600) - ----------- ---------- Net increase (decrease) in net assets from iShares transactions (3,426,805) - ----------- ---------- INCREASE (DECREASE) IN NET ASSETS (4,986,291) 100,322 NET ASSETS: Beginning of period 6,752,073 6,651,751 ----------- ---------- End of period $ 1,765,782 $6,752,073 =========== ========== Undistributed net investment income included in net assets at end of period $ 51,022 $ 17,015 =========== ========== iSHARES ISSUED AND REDEEMED: iShares sold 50,000 - iShares redeemed (150,000) - ----------- ---------- Net increase (decrease) in iShares outstanding (100,000) - =========== ==========
/1/ Commencement of operations. See notes to financial statements. 66 2002 iShares Semi-Annual Report to Shareholders Statements of Changes in Net Assets (Continued) iSHARES TRUST
iShares S&P Latin America iShares S&P/TOPIX 40 Index Fund 150 Index Fund --------------------------------------------------------------------------------- For the six For the period For the six For the period months ended October 25, 2001/1/ months ended October 23, 2001(1) September 30, 2002 to September 30, 2002 to (Unaudited) March 31, 2002 (Unaudited) March 31, 2002 - ------------------------------------------------------------------------------------------------------------ INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income (loss) $ 103,961 $ 90,412 $ 40,194 $ 44,687 Net realized gain (loss) 140,088 (19,085) (21,574) (16,217) Net change in unrealized appreciation (depreciation) (4,841,654) 1,615,851 (3,307,109) (1,684,653) ----------- ---------- ----------- ----------- Net increase (decrease) in net assets resulting from operations (4,597,605) 1,687,178 (3,288,489) (1,656,183) ----------- ---------- ----------- ----------- DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income - (39,874) - - ----------- ---------- ----------- ----------- Total distributions to iShareholders - (39,874) - - ----------- ---------- ----------- ----------- iSHARES TRANSACTIONS: iShares sold 5,221,270 6,226,193 - 34,773,370 iShares redeemed (2,220,995) - - - ----------- ---------- ----------- ----------- Net increase in net assets from iShares transactions 3,000,275 6,226,193 - 34,773,370 ----------- ---------- ----------- ----------- INCREASE (DECREASE) IN NET ASSETS (1,597,330) 7,873,497 (3,288,489) 33,117,187 NET ASSETS: Beginning of period 7,873,497 - 33,117,187 - ----------- ---------- ----------- ----------- End of period $ 6,276,167 $7,873,497 $29,828,698 $33,117,187 =========== ========== =========== =========== Undistributed net investment income (accumulated net investment loss) included in net assets at end of period $ 154,591 $ 50,630 $ 84,785 $ 44,591 =========== ========== =========== =========== iSHARES ISSUED AND REDEEMED: iShares sold 100,000 150,000 - 450,000 iShares redeemed (50,000) - - - ----------- ---------- ----------- ----------- Net increase in iShares outstanding 50,000 150,000 - 450,000 =========== ========== =========== =========== iShares Nasdaq Biotechnology Index Fund ----------------------------------- For the six months ended For the September 30, 2002 year ended (Unaudited) March 31, 2002 - -------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income (loss) $ (790,488) $ (755,436) Net realized gain (loss) (83,194,402) 5,284,038 Net change in unrealized appreciation (depreciation) (95,166,664) (27,836,288) ------------- ------------- Net increase (decrease) in net assets resulting from operations (179,151,554) (23,307,686) ------------- ------------- DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income - - ------------- ------------- Total distributions to iShareholders - - ------------- ------------- iSHARES TRANSACTIONS: iShares sold 427,858,108 363,412,389 iShares redeemed (169,124,377) (150,144,813) ------------- ------------- Net increase in net assets from iShares transactions 258,733,731 213,267,576 ------------- ------------- INCREASE (DECREASE) IN NET ASSETS 79,582,177 189,959,890 NET ASSETS: Beginning of period 289,807,052 99,847,162 ------------- ------------- End of period $ 369,389,229 $ 289,807,052 ============= ============= Undistributed net investment income (accumulated net investment loss) included in net assets at end of period $ (790,488) $ - ============= ============= iSHARES ISSUED AND REDEEMED: iShares sold 7,650,000 4,250,000 iShares redeemed (3,450,000) (1,800,000) ------------- ------------- Net increase in iShares outstanding 4,200,000 2,450,000 ============= =============
/1/ Commencement of operations. See notes to Financial Statements. Financial Statements 67 Financial Highlights iSHARES TRUST (For a share outstanding throughout each period)
iShares S&P Global iShares S&P 100 Index Fund 100 Index Fund -------------------------------------------------- ------------------------------------------------ Six months Period from Six months Period from ended Oct. 23, 2000/1/ ended Dec. 5, 2000/1/ Sep. 30, 2002 Year ended to Sep. 30, 2002 Year ended to (Unaudited) Mar. 31, 2002 Mar. 31, 2001 (Unaudited) Mar. 31, 2002 Mar. 31, 2001 - -------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 57.85 $ 59.17 $ 73.44 $ 57.08 $ 60.83 $ 72.50 ----------- ------------ ----------- ------------ ---------- ----------- Income from investment operations: Net investment income 0.29 0.61 0.31 0.27 0.65 0.18 Net realized and unrealized loss (17.00) (1.34) (14.28) (16.58) (3.87) (11.73) ----------- ------------ ----------- ------------ ---------- ----------- Total from investment operations (16.71) (0.73) (13.97) (16.31) (3.22) (11.55) ----------- ------------ ----------- ------------ ---------- ----------- Less distributions from: Net investment income (0.30) (0.59) (0.30) - (0.53) (0.12) ----------- ------------ ----------- ------------ ---------- ----------- Total distributions (0.30) (0.59) (0.30) - (0.53) (0.12) ----------- ------------ ----------- ------------ ---------- ----------- Net asset value, end of period $ 40.84 $ 57.85 $ 59.17 $ 40.77 $ 57.08 $ 60.83 =========== ============ =========== ============ ========== =========== Total return (28.97)%/2/ (1.23)% (19.07)%/2/ (28.58)%/2/ (5.32)% (15.94)%/2/ =========== ============ =========== ============ ========== =========== Ratios/Supplemental data: Net assets, end of period (000s) $ 149,051 $ 115,703 $ 88,762 $ 42,803 $ 45,666 $ 103,407 Ratio of expenses to average net assets/3/ 0.20% 0.20% 0.20% 0.40% 0.40% 0.40% Ratio of net investment income to average net assets/3/ 1.46% 1.12% 1.03% 1.60% 1.08% 0.88% Portfolio turnover rate/4/ 3% 13% 5% 2% 4% 5%
/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. 68 2002 iShares Semi-Annual Report to Shareholders Financial Highlights (Continued) iSHARES TRUST (For a share outstanding throughout each period)
iShares S&P Global iShares S&P Global Energy Financials Sector Index Fund Sector Index Fund ----------------------------------- ----------------------------------- Six months Period from Six months Period from ended Nov. 12, 2001/1/ ended Nov. 12, 2001/1/ Sep. 30, 2002 to Sep. 30, 2002 to (Unaudited) Mar. 31, 2002 (Unaudited) Mar. 31, 2002 - ----------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 54.57 $ 49.64 $ 53.32 $ 51.00 ------------- ---------------- ------------- ------------- Income from investment operations: Net investment income 0.62 0.22 0.48 0.29 Net realized and unrealized gain (loss) (11.24) 4.78 (13.64) 2.07 ------------- ---------------- ------------- ------------- Total from investment operations (10.62) 5.00 (13.16) 2.36 ------------- ---------------- ------------- ------------- Less distributions from: Net investment income - (0.07) - (0.04) ------------- ---------------- ------------- ------------- Total distributions - (0.07) - (0.04) ------------- ---------------- ------------- ------------- Net asset value, end of period $ 43.95 $ 54.57 $ 40.16 $ 53.32 ============= ================ ============= ============= Total return/2/ (19.46)% 10.10% (24.68)% 4.64% ============= ================ ============= ============= Ratios/Supplemental data: Net assets, end of period (000s) $ 13,185 $ 16,372 $ 8,033 $ 10,663 Ratio of expenses to average net assets/3/ 0.65% 0.65% 0.65% 0.65% Ratio of net investment income to average net assets/3/ 2.46% 1.17% 1.93% 1.44% Portfolio turnover rate/4/ 4% 5% 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 69 Financial Highlights (Continued) iSHARES TRUST (For a share outstanding throughout each period)
iShares S&P Global iShares S&P Global Healthcare Technology Sector Index Fund Sector Index Fund ----------------------------------- ----------------------------------- Six months Period from Six months Period from ended Nov. 13, 2001/1/ ended Nov. 12, 2001/1/ Sep. 30, 2002 to Sep. 30, 2002 to (Unaudited) Mar. 31, 2002 (Unaudited) Mar. 31, 2002 - ------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 49.06 $ 49.53 $ 51.91 $ 53.19 ------------- ---------------- ------------- ---------------- Income from investment operations: Net investment income (loss) 0.16 0.11 (0.06) (0.19) Net realized and unrealized loss (10.29) (0.57) (23.25) (1.09) ------------- ---------------- ------------- ----------------- Total from investment operations (10.13) (0.46) (23.31) (1.28) ------------- ---------------- ------------- ---------------- Less distributions from: Net investment income - (0.01) - - ------------- ---------------- ------------- ---------------- Total distributions - (0.01) - - ------------- ---------------- ------------- ---------------- Net asset value, end of period $ 38.93 $ 49.06 $ 28.60 $ 51.91 ============= ================ ============= ================ Total return/2/ (20.65)% (0.92)% (44.91)% (2.40)% ============= ================ ============= ================ Ratios/supplemental Data: Net assets, end of period (000s) $ 13,625 $ 17,172 $ 4,289 $ 7,786 Ratio of expenses to average net assets/3/ 0.65% 0.65% 0.65% 0.65% Ratio of net investment income (loss) to average net assets/3/ 0.73% 0.62% (0.32)% (0.44)% Portfolio turnover rate/4) 2% 1% 1% 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. 70 2002 iShares Semi-Annual Report to Shareholders Financial Highlights (Continued) iSHARES TRUST (For a share outstanding throughout each period)
iShares S&P Global Telecommunications iShares S&P Europe Sector Index Fund 350 Index Fund ----------------------------------- --------------------------------------------------- Six months Period from Six months Period from ended Nov. 12, 2001/1/ ended Jul. 25, 2000/1/ Sep. 30, 2002 to Sep. 30, 2002 Year ended to (Unaudited) Mar. 31, 2002 (Unaudited) Mar. 31, 2002 Mar. 31, 2001 - ---------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 44.84 $ 50.68 $ 59.04 $ 63.13 $ 79.32 ------------- ---------------- ---------- ------------- -------------- Income from investment operations: Net investment income 0.35 0.11 0.62 0.83 0.38 Net realized and unrealized loss (16.24) (5.93) (16.02) (4.08) (16.30) ------------- ---------------- ---------- ------------- -------------- Total from investment operations (15.89) (5.82) (15.40) (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 $ 28.95 $ 44.84 $ 43.64 $ 59.04 $ 63.13 ============= ================ ========== ============= ============== Total return (35.44)%/2/ (11.50)%/2/ (26.08)%/2/ (5.16)% (20.10)%/2/ ============= ================ ========== ============= ============== Ratios/Supplemental Data: Net assets, end of period (000s) $ 8,686 $ 13,451 $ 532,454 $ 569,757 $ 154,656 Ratio of expenses to average net assets/3/ 0.65% 0.65% 0.60% 0.60% 0.60% Ratio of net investment income to average net assets/3/ 1.92% 0.61% 2.67% 1.49% 1.12% Portfolio turnover rate/4/ 1% 2% 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 processing capital share transactions in Creation Units. See notes to financial statements. Financial Highlights 71 Financial Highlights (Continued) iSHARES TRUST (For a share outstanding throughout each period)
ishares S&P Latin iShares S&P/TSE America 60 Index Fund 40 Index Fund --------------------------------------------------- ------------------------------- Six months Period from Six months Period from ended Jun. 12, 2000/1/ ended Oct. 25, 2001/1/ Sep. 30, 2002 Year ended to Sep. 30, 2002 to (Unaudited) Mar. 31, 2002 Mar. 31, 2001 (Unaudited) Mar. 31, 2002 - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 45.01 $ 44.35 $ 59.00 $ 52.49 $ 41.51 -------- -------- -------- --------- --------- Income from investment operations: Net investment income 0.23 0.47 0.35 0.44 0.61 Net realized and unrealized gain (loss) (9.92) 0.59 (14.24) (21.55) 10.64 -------- -------- -------- --------- --------- Total from investment operations (9.69) 1.06 (13.89) (21.11) 11.25 -------- -------- -------- --------- --------- 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 $ 35.32 $ 45.01 $ 44.35 $ 31.38 $ 52.49 ======== ======== ======== ========= ========= Total return (21.53)%/2/ 2.43% (23.80)%/2/ (40.22)%/2/ 27.16%/2/ ======== ======== ======== ========= ========= Ratios/Supplemental data: Net assets, end of period (000s) $ 1,766 $ 6,752 $ 6,652 $ 6,276 $ 7,873 Ratio of expenses to average net assets/3/ 0.50% 0.50% 0.50% 0.50% 0.50% Ratio of net investment income to average net assets/3/ 1.12% 1.04% 0.76% 2.22% 2.94% Portfolio turnover rate/4/ 2% 30% 50% 2% 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. 72 2002 ishares Semi-Annual Report to Shareholders Financial Highlights (Continued) iSHARES TRUST (For a share outstanding throughout each period)
iShares S&P/TOPIX iShares Nasdaq Biotechnology 150 Index Fund Index Fund ------------------------------- --------------------------------------------- Six months Period from Six months Period from ended Oct. 23, 2001/1/ ended Feb. 5, 2001/1/ Sep. 30, 2002 to Sep. 30, 2002 Year ended to (Unaudited) Mar. 31, 2002 (Unaudited) Mar. 31, 2002 Mar. 31, 2001 - ------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 73.59 $ 77.39 $ 77.28 $ 76.81 $ 99.66 ------- ------- -------- -------- ------- Income from investment operations: Net investment income (loss) 0.09 0.10 (0.10) (0.17) (0.05) Net realized and unrealized gain (loss) (7.39) (3.90) (30.72) 0.64 (22.80) ------- ------- -------- -------- ------- Total from investment operations (7.30) (3.80) (30.82) 0.47 (22.85) ------- ------- -------- -------- ------- Net asset value, end of period $ 66.29 $ 73.59 $ 46.46 $ 77.28 $ 76.81 ======= ======= ======== ======== ======= Total return (9.92)%/2/ (4.91)%/2/ (39.88)%/2/ 0.61% (22.93)%/2/ ======= ======= ======== ======== ======= Ratios/Supplemental data: Net assets, end of period (000s) $29,829 $33,117 $369,389 $289,807 $99,847 Ratio of expenses to average net assets/3/ 0.50% 0.50% 0.50% 0.50% 0.50% Ratio of net investment income (loss) to average net assets/3/ 0.24% 0.32% (0.44)% (0.46)% (0.50)% Portfolio turnover rate/4/ 2% 5% 31% 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 73 Notes to the Financial Statements (Unaudited) iSHARES TRUST 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 September 30, 2002, the Trust offered 59 investment portfolios or funds. These financial statements relate only to the iShares S&P 100, 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, iShares S&P/TOPIX 150 and iShares Nasdaq Biotechnology Index Funds (each a "Fund", collectively the "Funds"). 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. Each of the Funds is classified as a non-diversified fund under the 1940 Act, except for the iShares S&P Europe 350 Index Fund, which is classified as a diversified fund. Non-diversified funds generally hold stocks of fewer companies than diversified funds and may be more susceptible to the risks associated with these particular companies, or to a single economic, political or regulatory occurrence. The 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. 74 2002 iShares Semi-Annual Report to Shareholders Notes to the Financial Statements (Unaudited) (Continued) iSHARES 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. 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 tax year-end of the Funds, the components of distributable earnings on a tax basis were as follows:
------------------------------------------------------------------------------------------- Undistributed Undistributed Total Distributable iShares Index Fund Ordinary Income Long-term Gain Earnings ------------------------------------------------------------------------------------------- S&P 100 $ 76,168 $ - $ 76,168 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 the Funds. 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. FEDERAL INCOME TAXES Each Fund is treated as a separate entity for federal income tax purposes. It is the policy of each Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its net income and any net gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes was required for the six months ended September 30, 2002. Notes to the Financial Statements 75 Notes to the Financial Statements (Unaudited) (Continued) iSHARES TRUST The following Funds had tax basis net capital loss carryforwards at March 31, 2002, the tax year-end of the Funds: --------------------------------------------------------------------- Expiring Expiring iShares Index Fund 2009 2010 Total --------------------------------------------------------------------- S&P 100 $ - $2,240,710 $2,240,710 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 comes first. For the six months ended September 30, 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. These reclassifications have no effect on net assets or net asset values per share. The in-kind gains or losses for the six months ended September 30, 2002 are disclosed in the 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 September 30, 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. 76 2002 iShares Semi-annual Report to Shareholders Notes to the Financial Statements (Unaudited) (Continued) iSHARES TRUST 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 Global 100 0.40 S&P Global Energy Sector 0.65 S&P Global Financials Sector 0.65 S&P Global Healthcare Sector 0.65 S&P Global Technology Sector 0.65 ------------------------------------------------- ------------------------------------------------- Advisory iShares Index Fund Fee ------------------------------------------------- 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 six months ended September 30, 2002, BGIS received brokerage commissions totaling $132,966 from the iShares Nasdaq Biotechnology Index Fund. 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 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 from temporary cash investments or from investment of securities lending collateral are recorded as either interest income or securities lending income, respectively, in the accompanying Statements of Operations. Pursuant to Rule 17a-7 of the 1940 Act, certain Funds executed cross trades for the six months ended September 30, 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 $350,392, $110,745 and $5,998,514, respectively, as of September 30, 2002. Barclays PLC is an affiliate of BGFA, the Funds' investment advisor. Notes to the Financial Statements 77 Notes to the Financial Statements (Unaudited) (Continued) iSHARES TRUST As of September 30, 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 six months ended September 30, 2002 were as follows: -------------------------------------------------------------------- iShares Index Fund Purchases Sales -------------------------------------------------------------------- S&P 100 $ 3,720,266 $ 3,699,955 S&P Global 100 1,206,633 801,708 S&P Global Energy Sector 844,544 615,637 S&P Global Financials Sector 622,141 485,726 S&P Global Healthcare Sector 391,053 307,995 S&P Global Technology Sector 88,552 95,906 S&P Global Telecommunications Sector 251,807 125,231 S&P Europe 350 17,335,926 8,851,740 S&P/TSE 60 164,989 121,774 S&P Latin America 40 378,856 189,918 S&P/TOPIX 150 629,745 562,063 Nasdaq Biotechnology 111,366,268 112,192,130 -------------------------------------------------------------------- In-kind transactions for the six months ended September 30, 2002 were as follows: ------------------------------------------------------------------ In-kind In-kind iShares Index Fund Purchases Sales ------------------------------------------------------------------ S&P 100 $122,457,050 $ 41,244,481 S&P Global 100 10,997,807 - S&P Europe 350 138,306,328 - S&P/TSE 60 1,911,232 5,325,088 S&P Latin America 40 5,155,356 2,201,372 Nasdaq Biotechnology 427,995,501 169,183,943 ------------------------------------------------------------------ 78 2002 iShares Semi-Annual Report to Shareholders Notes to the Financial Statements (Unaudited) (Continued) iSHARES TRUST At September 30, 2002, the aggregate unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:
----------------------------------------------------------------------------------------------- Net Tax Unrealized Unrealized Unrealized iShares Index Fund Cost Appreciation Depreciation Depreciation ----------------------------------------------------------------------------------------------- S&P 100 $221,875,573 $ 229,153 $ (72,588,906) $ (72,359,753) S&P Global 100 68,910,108 379,988 (25,888,489) (25,508,501) S&P Global Energy Sector 15,063,153 318,257 (2,209,655) (1,891,398) S&P Global Financials Sector 10,174,014 166,957 (2,340,049) (2,173,092) S&P Global Healthcare Sector 17,401,333 329,813 (4,124,079) (3,794,266) S&P Global Technology Sector 8,766,348 7,296 (4,328,332) (4,321,036) S&P Global Telecommunications Sector 14,832,062 32,826 (6,185,872) (6,153,046) S&P Europe 350 763,537,452 4,350,930 (211,678,261) (207,327,331) S&P/TSE 60 3,779,094 1,222 (2,025,067) (2,023,845) S&P Latin America 40 9,461,973 15,306 (3,240,785) (3,225,479) S&P/TOPIX 150 37,671,224 688,887 (5,680,271) (4,991,384) Nasdaq Biotechnology 594,676,724 4,968,418 (155,696,043) (150,727,625) -----------------------------------------------------------------------------------------------
4. iSHARES TRANSACTIONS At September 30, 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 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 September 30, 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 September 30, 2002 and the value of the related collateral are disclosed in the Statements of Assets and Liabilities. Notes to the Financial Statements 79 Notes to the Financial Statements (Unaudited) (Continued) iSHARES TRUST 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, which allegedly covers a mechanism for continuous pricing of exchange traded funds. 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 two 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. 7. FUND CLOSURE At the Board of Trustees meeting held on August 20, 2002, the Trustees unanimously voted to close and liquidate the iShares S&P/TSE 60 Index Fund. Trading of the iShares S&P/TSE 60 Index Fund shares will halt on or about December 5, 2002. New shares of the Fund will not be available for investment as of December 6, 2002. The iShares S&P/TSE 60 Index Fund will complete liquidation on December 13, 2002 and shares of the Fund will be individually redeemed. 80 2002 iShares Semi-Annual Report to Shareholders Notes: Notes 81 The iShares Family of Funds The following is a list of iShares Funds being offered, along with their respective exchange trading symbols. Please call iShares at 1-800-iShares (1-800-474-2737) to obtain a prospectus for any iShares fund. It contains more complete information, including charges and expenses. Broad Market iShares Dow Jones U.S. Total Market Index Fund (IYY) iShares Russell 3000 Index Fund (IWV) iShares Russell 3000 Growth Index Fund (IWZ) iShares Russell 3000 Value Index Fund (IWW) Large Cap iShares Russell 1000 Index Fund (IWB) iShares Russell 1000 Growth Index Fund (IWF) iShares Russell 1000 Value Index Fund (IWD) 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) Mid Cap iShares Russell Midcap Index Fund (IWR) iShares Russell Midcap Growth Index Fund (IWP) iShares Russell Midcap Value Index Fund (IWS) iShares S&P MidCap 400 Index Fund (IJH) iShares S&P MidCap 400/BARRA Value Index Fund (IJJ) Small Cap iShares Russell 2000 Index Fund (IWM) iShares Russell 2000 Growth Index Fund (IWO) iShares Russell 2000 Value Index Fund (IWN) 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) Sector & Industry iShares Cohen & Steers Realty Majors Index Fund (ICF) iShares Dow Jones U.S. Basic Materials Sector Index Fund (IYM) iShares Dow Jones U.S. Chemicals Index Fund (IYD) * 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. Financial Services Index Fund (IYG) 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. Internet Index Fund (IYV) * iShares Dow Jones U.S. Real Estate Index Fund (IYR) 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 Goldman Sachs Natural Resources Index Fund (IGE) iShares Goldman Sachs Networking Index Fund (IGN) iShares Goldman Sachs Semiconductor Index Fund (IGW) iShares Goldman Sachs Software Index Fund (IGV) iShares Goldman Sachs Technology Index Fund (IGM) iShares Nasdaq Biotechnology Index Fund (IBB) Fixed Income iShares Lehman 1-3 Year Treasury Bond Fund (SHY) iShares Lehman 7-10 Year Treasury Bond Fund (IEF) iShares Lehman 20+ Year Treasury Bond Fund (TLT) iShares GS $ InvesTop(TM) Corporate Bond Fund (LQD) Global Sector 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) International/Broad Market iShares MSCI EAFE Index Fund (EFA) International/Regional iShares MSCI EMU Index Fund (EZU) iShares MSCI Pacific ex-Japan Index Fund (EPP) iShares S&P Europe 350 Index Fund (IEV) International/Developed Country iShares MSCI Australia Index Fund (EWA) iShares MSCI Austria Index Fund (EWO) iShares MSCI Belgium Index Fund (EWK) iShares MSCI Canada Index Fund (EWC) iShares MSCI France Index Fund (EWQ) iShares MSCI Germany Index Fund (EWG) iShares MSCI Hong Kong Index Fund (EWH) iShares MSCI Italy Index Fund (EWI) iShares MSCI Japan Index Fund (EWJ) iShares MSCI Netherlands Index Fund (EWN) iShares MSCI Singapore Index Fund (EWS) iShares MSCI Spain Index Fund (EWP) iShares MSCI Sweden Index Fund (EWD) iShares MSCI Switzerland Index Fund (EWL) iShares MSCI United Kingdom Index Fund (EWU) iShares S&P/TOPIX 150 Index Fund (ITF) iShares S&P/TSE 60 Index Fund (IKC) * International/Emerging Country iShares MSCI Brazil Index Fund (EWZ) iShares MSCI Malaysia Index Fund (EWM) iShares MSCI Mexico Index Fund (EWW) iShares MSCI South Korea Index Fund (EWY) iShares MSCI Taiwan Index Fund (EWT) iShares S&P Latin America 40 Index Fund (ILF) Global/Broad Market iShares S&P Global 100 Index Fund (IOO) * Fund termination and liquidation anticipated on December 13, 2002. This advertising section does not constitute part of the 2002 Semi-Annual Report. iShares are not sponsored or endorsed by Goldman, Sachs & Co. or Lehman Brothers, nor are they sponsored, endorsed, sold or promoted by Cohen & Steers Capital Management, Inc., Dow Jones & Company, Inc., Morgan Stanley Capital International, The Nasdaq Stock Market, Inc., Frank Russell Company, or Standard & Poor's. None of these companies make any representation regarding the advisability of investing in iShares. Neither SEI nor BGI, nor any of their affiliates, are affiliated with Goldman, Sachs & Co. or Lehman Brothers. "GS $ InvesTop(TM)," "GS $ InvesTop(TM) Index," "GS $ Investment Grade Index(TM)" and "Goldman Sachs (R)" are trademarks of Goldman, Sachs & Co. The methodology of the GS $ InvesTop(TM) Index is owned by Goldman, Sachs & Co., may be covered by one or more patents or pending patent applications and is provided under license from Goldman, Sachs & Co. 82 2002 iShares Semi-Annual Report to Shareholders iShares are distributed by SEI Investments Distributions Co.(SEI). Barclays Global Fund Advisors (BGFA) serves as an advisor 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. Investors Bank & Trust Company serves as administrator,custodian, securities lending agent and transfer agent. iShares are not sponsored, endorsed, 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. Investing involves risk, including possible loss of principal. (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 (474-2737) www.iShares.com BGI-F-007-03001 -----END PRIVACY-ENHANCED MESSAGE-----