N-CSRS 1 dncsrs.txt SEMI-ANNUAL REPORTS FOR THE ISHARES TRUST. ------------------------ UNITED STATES OMB APPROVAL SECURITIES AND EXCHANGE COMMISSION ------------------------ Washington, D.C. 20549 OMB Number: 3235-0570 Expires: Nov. 30, 2005 Estimated average burden hours per response: 5.0 ------------------------ FORM N-CSRS CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-09729 --------------------------------------------- iShares Trust -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) 45 Fremont Street, San Francisco, CA 94105 -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) CT Corporation 1209 Orange Street, Wilmington, New Castle County, Delaware 19801 -------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: 1-800-474-2737 ---------------------- Date of fiscal year end: 03/31/2004 ------------------------ Date of reporting period: 04/01/03-09/30/03 ------------------------ Form N-CSRS is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSRs in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSRS, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSRs unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. Section 3507. Item 1. Reports to Stockholders iShares(R) 2003 SEMI-ANNUAL REPORT TO SHAREHOLDERS SEPTEMBER 30, 2003 [GRAPHIC APPEARS HERE] 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 Managers' Discussion & Analysis ........................................... 4 Schedules of Investments .................................................. 10 iShares S&P 500 Index Fund .............................................. 10 iShares S&P 500/BARRA Growth Index Fund ................................. 19 iShares S&P 500/BARRA Value Index Fund .................................. 23 iShares S&P MidCap 400 Index Fund ....................................... 30 iShares S&P MidCap 400/BARRA Growth Index Fund .......................... 37 iShares S&P MidCap 400/BARRA Value Index Fund ........................... 41 iShares S&P SmallCap 600 Index Fund ..................................... 46 iShares S&P SmallCap 600/BARRA Growth Index Fund ........................ 56 iShares S&P SmallCap 600/BARRA Value Index Fund ......................... 61 Financial Statements ...................................................... 68 Financial Highlights ...................................................... 75 Notes to the Financial Statements ......................................... 84 iShares Family of Funds ................................................... 90 TO OUR SHAREHOLDERS For many investors, the last few years have been difficult and challenging. The collapse of the stock market bubble, a tepid economy, corporate accounting scandals, lackluster company earnings and the geopolitical situation all contributed to a three-year bear market. Stock market gains during the first half of 2003 give some hope that the markets have turned a corner, but there is no guarantee that challenging market conditions will not return. iShares have continued to innovate and expand, offering more tools that help investors tailor their portfolios to achieve diversity and address volatility in a complex market environment. For example, we recently launched the iShares Dow Jones Transportation Average and iShares Dow Jones Select Dividend Index Funds and in April of this year, iShares launched an emerging markets exchange traded fund based on the MSCI Emerging Markets Free Index. Last year, iShares launched the first fixed income exchange traded funds, which BUSINESS WEEK named one of the best new products of 2002./1/ We have added a Lehman Aggregate Bond Fund to our fixed income menu, enabling investors to track one of the most well known U.S. fixed income market indexes. We will also be adding the iShares Lehman TIPS Bond Fund, which provides the opportunity to invest in inflation protected government securities. Assets under management for the fixed income iShares funds were $4.2 billion as of September 30, 2003. With the addition of these iShares, investors can achieve even more diversity in their portfolios -- and at lower cost, since iShares fees are, on average, about half those of actively managed funds./2/ With over 80 different iShares to choose from, investors have the ability to build a diverse portfolio that covers a wide swath of market segments such as capitalization, sectors, value and growth, international and fixed income. That is important because market segments do not tend to move in tandem, particularly in volatile markets. Economic conditions such as inflation, interest rate levels, currency valuations or the price of oil, as well as the normal pace of the economic cycle, all may result in one market segment outperforming another. We encourage you to talk with your financial advisor about what blend of investments or asset allocation can best help you meet your financial goals. Throughout the coming year we will continue to work closely with the financial advisor community to introduce innovative strategies and structures for their client's portfolios. To learn more about iShares, we encourage you to visit our web site, www.iShares.com. At times like these, the importance of sound, disciplined investing is greater than ever. Such investing should be grounded in two key concepts: keeping the costs associated with investing as low as possible, and maintaining a diversified portfolio. That is why we believe iShares are an indispensable tool for investors in the current market. And that is also why more and more investors have recognized the benefits of iShares. Assets under management for iShares continue to grow, and as of September 30, 2003, had reached $44.5 billion. On behalf of the iShares family of funds and our colleagues at Barclays Global Investors, we thank you for making iShares a part of your portfolio. We look forward to meeting your investmentneeds in the year ahead. /s/ Lee T. Kranefuss Lee T. Kranefuss PRESIDENT AND CHAIRMAN OF THE BOARD OF TRUSTEES FOR 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. ---------- /1/ BUSINESS WEEK, 12/16/02. /2/ Morningstar Principia, BGI analysis 5/03. SHAREHOLDER LETTER 1 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. The annual management fees of iShares may be substantially less than those of most mutual funds. iShares transactions will result in brokerage commissions, but the savings from lower annual fees can help offset these costs. Past performance does not guarantee future results. iShares are not sponsored, endorsed, or issued by Lehman Brothers, nor are they sponsored, endorsed, issued, sold or promoted by Dow Jones & Company Inc., or Morgan Stanley Capital International. 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 the companies listed above. This advertising section does not constitute part of the 2003 Semi-Annual Report. 2 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS THIS PAGE INTENTIONALLY LEFT BLANK. 3 MANAGERS' DISCUSSION & ANALYSIS iSHARES S&P 500 INDEX FUNDS Performance as of 9/30/03
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS ------------------------------------------------------ --------------------------- YEAR ENDED 9/30/03 INCEPTION TO 9/30/03 INCEPTION TO 9/30/03 ------------------------- -------------------------- --------------------------- iSHARES INDEX FUND NAV MARKET INDEX NAV MARKET INDEX NAV MARKET INDEX S&P 500 24.23% 24.67% 24.40% (9.29)% (9.28)% (9.23)% (28.09)% (28.06)% (27.91)% S&P 500/BARRA Growth 22.16% 22.71% 22.43% (12.58)% (12.55)% (12.44)% (36.36)% (36.29)% (36.00)% S&P 500/BARRA Value 26.25% 26.77% 26.55% (4.56)% (4.55)% (4.41)% (14.53)% (14.48)% (14.06)%
"Total returns for the period since inception" are calculated from the inception date of each Fund (5/15/00, 5/22/00 and 5/22/00, respectively). "Average annual total returns" represent the average annual change in value of an investment over the periods indicated. "Cumulative total returns" represent 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 of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return ("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 (5/19/00, 5/26/00 and 5/26/00, respectively), the NAV 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 gain distributions have been reinvested in the Fund at Market Price and NAV, 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. Each Fund's past performance is no guarantee of future results. [CHART APPEARS HERE] TOP 10 FUND SECTORS (% OF NET ASSETS) iSHARES S&P 500 INDEX FUND FINANCIALS 20.74% INFORMATION TECHNOLOGY 17.53% HEALTH CARE 13.76% CONSUMER STAPLES 11.45% CONSUMER DISCRETIONARY 11.04% INDUSTRIALS 10.59% ENERGY 5.66% TELECOMMUNICATION SERVICES 3.41% UTILITIES 2.93% MATERIALS 2.76% [CHART APPEARS HERE] TOP 10 FUND SECTORS (% OF NET ASSETS) iSHARES S&P 500/BARRA GROWTH INDEX FUND INFORMATION TECHNOLOGY 26.52% HEALTH CARE 23.80% CONSUMER STAPLES 20.51% INDUSTRIALS 11.94% CONSUMER DISCRETIONARY 8.27% FINANCIALS 5.01% MATERIALS 2.31% ENERGY 0.73% TELECOMMUNICATION SERVICES 0.69% UTILITIES 0.10% [CHART APPEARS HERE] TOP 10 FUND SECTORS (% OF NET ASSETS) iSHARES S&P MIDCAP 500/BARRA VALUE INDEX FUND FINANCIALS 36.64% CONSUMER DISCRETIONARY 13.86% ENERGY 10.64% INDUSTRIALS 9.24% INFORMATION TECHNOLOGY 8.46% TELECOMMUNICATION SERVICES 6.16% UTILITIES 5.81% HEALTH CARE 3.61% MATERIALS 3.21% CONSUMER STAPLES 2.29% 4 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS The iShares S&P 500 Index Fund (the "Fund") seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Standard & Poor's 500 Index (the "Index"). The iShares S&P 500/BARRA Growth Index Fund (the "Growth Fund") and iShares S&P 500/BARRA Value Index Fund (the "Value 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 Index, as measured by the Standard & Poor's 500/BARRA Growth Index (the "Growth Index") and the Standard & Poor's 500/BARRA Value Index (the "Value Index"), respectively. For the six months ended September 30, 2003 (the "reporting period"), the Fund returned 18.36%, compared to a return of 18.45% by the Index. The Growth Fund and the Value Fund returned 15.12% and 21.72%, respectively, while the Growth Index returned 15.26% and the Value Index returned 21.86%. Equity markets rebounded during the six-month reporting period. As the war in Iraq reached an official conclusion and the economic outlook began to offer some signs of encouragement, stocks climbed. In late June, the Federal Reserve Board (the "Fed") cut short-term interest rates by 0.25% to the lowest level since the Eisenhower administration. Corporate earnings announcements generally showed higher earnings levels and stabilizing earnings expectations. GDP grew at an annual 3.3% rate, largely due to increased government spending. Unemployment levels, however, remained a problem, rising to a nine-year high. During the reporting period, smaller capitalization stocks generally outperformed larger capitalization stocks, and value stocks within the Index outperformed growth stocks. All ten industry sectors within the Index delivered positive returns during the reporting period. Information technology (17.56% of the Index as of September 30, 2003) led the way, gaining 31.03%, and financials (20.75% of the Index as of September 30, 2003) rose 23.48%. Consumer discretionary (11.05% of the Index as of September 30, 2003) climbed 21.86%, materials (2.76% of the Index as of September 30, 2003) rose 20.93%, and utilities (2.94% of the Index as of September 30, 2003) returned 20.81%. The weakest performance came from health care (13.78% of the Index as of September 30, 2003), which gained 4.86%. On an individual company basis, the best performing among the Index's ten largest constituents was Intel Corp. (1.95% of the Index as of September 30, 2003), which returned 69.04%. General Electric Co. and American International Group Inc. (respectively 3.24% and 1.63% of the Index as of September 30, 2003) gained 16.90% and 16.68%, respectively. The largest weighting at 3.26% of the Index as of September 30, 2003, Microsoft Corp. returned 14.83%. Johnson & Johnson and Pfizer Inc. (respectively 1.60% and 2.57% of the Index as of September 30, 2003) both posted declines, falling 14.43% and 2.50%, respectively. MANAGERS' DISCUSSION & ANALYSIS 5 MANAGERS' DISCUSSION & ANALYSIS iSHARES S&P MIDCAP 400 INDEX FUNDS Performance as of 9/30/03
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS --------------------------------------------------- ------------------------- YEAR ENDED 9/30/03 INCEPTION TO 9/30/03 INCEPTION TO 9/30/03 ------------------------ ------------------------ ------------------------- iSHARES INDEX FUND NAV MARKET INDEX NAV MARKET INDEX NAV MARKET INDEX S&P MidCap 400 26.55% 27.05% 26.81% 3.89% 3.95% 4.07% 13.69% 13.93% 14.35% S&P MidCap 400/BARRA Growth 25.06% 25.16% 25.36% (6.51)% (6.49)% (6.23)% (19.33)% (19.27)% (18.54)% S&P MidCap 400/BARRA Value 27.87% 28.22% 28.23% 10.37% 10.44% 10.62% 36.96% 37.26% 37.97%
"Total returns for the period since inception" are calculated from the inception date of each Fund (5/22/00, 7/24/00 and 7/24/00, respectively). "Average annual total returns" represent the average annual change in value of an investment over the periods indicated. "Cumulative total returns" represent 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 of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return ("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 (5/26/00, 7/28/00 and 7/28/00, respectively), the NAV 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 gain distributions have been reinvested in the Fund at Market Price and NAV, 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. Each Fund's past performance is no guarantee of future results. [CHART APPEARS HERE] TOP 10 FUND SECTORS (% OF NET ASSETS) iSHARES S&P MIDCAP 400 INDEX FUND FINANCIALS 19.99% CONSUMER DISCRETIONARY 16.08% INFORMATION TECHNOLOGY 16.07% HEALTH CARE 13.34% INDUSTRIALS 12.15% UTILITIES 6.62% ENERGY 6.34% CONSUMER STAPLES 4.77% MATERIALS 3.99% TELECOMMUNICATION SERVICES 0.60% [CHART APPEARS HERE] TOP 10 FUND SECTORS (% OF NET ASSETS) iSHARES S&P MIDCAP 400/BARRA GROWTH INDEX FUND HEALTH CARE 21.78% CONSUMER DISCRETIONARY 18.62% INFORMATION TECHNOLOGY 18.55% FINANCIALS 13.40% INDUSTRIALS 13.12% ENERGY 6.18% CONSUMER STAPLES 4.88% UTILITIES 1.77% MATERIALS 1.41% TELECOMMUNICATION SERVICES 0.29% [CHART APPEARS HERE] TOP 10 FUND SECTORS (% OF NET ASSETS) iSHARES S&P MIDCAP 400/BARRA VALUE INDEX FUND FINANCIALS 26.58% INFORMATION TECHNOLOGY 13.58% CONSUMER DISCRETIONARY 13.54% UTILITIES 11.47% INDUSTRIALS 11.19% MATERIALS 6.56% ENERGY 6.51% HEALTH CARE 4.90% CONSUMER STAPLES 4.66% TELECOMMUNICATION SERVICES 0.92% 6 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS The iShares S&P MidCap 400 Index Fund (the "Fund") seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Standard & Poor's MidCap 400Index (the "Index"). The iShares S&P MidCap 400/BARRA Growth Index Fund (the "Growth Fund") and iShares S&P MidCap 400/BARRA Value Index Fund (the "Value 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 Index, as measured by the Standard & Poor's MidCap 400/BARRA Growth Index (the "Growth Index") and the Standard & Poor's MidCap 400/BARRA Value Index (the "Value Index"), respectively. For the six months ended September 30, 2003 (the "reporting period"), the Fund returned 25.25%, compared to a return of 25.38% by the Index. The Growth Fund and the Value Fund returned 22.82% and 27.54%, respectively, while the Growth Index returned 22.96% and the Value Index returned 27.75%. Equity markets reversed course during the six-month reporting period. Responding positively to the official conclusion to the war in Iraq, stocks generally led an upward march throughout the reporting period. Some economic news provided signs of encouragement: GDP growth for the second quarter was revised upward several times, ultimately showing an annual growth rate of 3.3%. A major driver of the growth was government spending, which grew at an annual pace of 8.5%, largely due to a 45.8% annual increase in national defense spending during the second quarter. Corporate earnings growth was also strong and consistent, reaching double-digit growth rates toward the end of the reporting period. Mid-capitalization stocks, as represented by the Index, outperformed the broader market, as represented by the S&P 500 Index. Value stocks generally outperformed their growth counterparts by a wide margin during the reporting period. Most industry sectors within the Index posted healthy gains for the reporting period. Information technology (16.07% of the Index as of September 30, 2003) returned 41.78%. Financials, the largest group at 20.00% of the Index as of September 30, 2003, returned 24.09%. Consumer discretionary (16.09% of the Index as of September 30, 2003) climbed 28.27%. The weakest performer was energy (6.34% of the Index as of September 30, 2003), which returned a positive 4.61%. Among the Index's ten largest constituents, performance was largely positive. The Class A shares of Lennar Corp. (0.67% of the Index as of September 30, 2003) led the way, returning 59.66%. Mylan Laboratories Inc. and Sovereign Bancorp Inc. (respectively 0.81% and 0.63% of the Index as of September 30, 2003) gained 34.43% and 33.94%. Gilead Sciences Inc., the largest weighting at 1.32% of the Index, returned 33.46%. IDEC Pharmaceuticals Corp. (0.60% of the Index as of September 30, 2003) and the Class B shares of The Washington Post Company (0.74% of the Index as of September 30, 2003) both posted losses, falling 2.72% and 2.40%, respectively. MANAGERS' DISCUSSION & ANALYSIS 7 MANAGERS' DISCUSSION & ANALYSIS iSHARES S&P SMALLCAP 600 INDEX FUNDS Performance as of 9/30/03
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS ----------------------------------------------- ------------------------- YEAR ENDED 9/30/03 INCEPTION TO 9/30/03 INCEPTION TO 9/30/03 ---------------------- ----------------------- ------------------------- iSHARES INDEX FUND NAV MARKET INDEX NAV MARKET INDEX NAV MARKET INDEX S&P SmallCap 600 26.64% 27.00% 26.86% 6.40% 6.41% 6.57% 23.21% 23.22% 23.83% S&P SmallCap 600/BARRA Growth 27.51% 27.79% 27.78% (1.39)% (1.41)% (1.15)% (4.35)% (4.42)% (3.61)% S&P SmallCap 600/BARRA Value 25.45% 26.08% 25.73% 8.71% 8.68% 8.97% 30.50% 30.41% 31.52%
"Total returns for the period since inception" are calculated from the inception date of each Fund (5/22/00, 7/24/00 and 7/24/00, respectively). "Average annual total returns" represent the average annual change in value of an investment over the periods indicated. "Cumulative total returns" represent 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 of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return ("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 (5/26/00, 7/28/00 and 7/28/00, respectively), the NAV 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 gain distributions have been reinvested in the Fund at Market Price and NAV, 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. Each Fund's past performance is no guarantee of future results. [CHART APPEARS HERE] TOP 10 FUND SECTORS (% OF NET ASSETS) iSHARES S&P SMALLCAP 600 INDEX FUND CONSUMER DISCRETIONARY 19.64% INDUSTRIALS 18.58% INFORMATION TECHNOLOGY 17.00% FINANCIALS 13.91% HEALTH CARE 13.47% ENERGY 5.18% MATERIALS 4.50% UTILITIES 3.90% CONSUMER STAPLES 3.32% TELECOMMUNICATION SERVICES 0.44% [CHART APPEARS HERE] TOP 10 FUND SECTORS (% OF NET ASSETS) iSHARES S&P SMALLCAP 600/BARRA GROWTH INDEX FUND CONSUMER DISCRETIONARY 20.83% HEALTH CARE 20.02% INFORMATION TECHNOLOGY 19.34% INDUSTRIALS 14.75% FINANCIALS 11.48% ENERGY 5.39% CONSUMER STAPLES 3.18% MATERIALS 2.56% UTILITIES 1.82% TELECOMMUNICATION SERVICES 0.58% [CHART APPEARS HERE] TOP 10 FUND SECTORS (% OF NET ASSETS) iSHARES S&P SMALLCAP 600/BARRA VALUE INDEX FUND INDUSTRIALS 22.43% CONSUMER DISCRETIONARY 18.42% FINANCIALS 16.37% INFORMATION TECHNOLOGY 14.67% HEALTH CARE 6.87% MATERIALS 6.45% UTILITIES 6.01% ENERGY 4.97% CONSUMER STAPLES 3.47% TELECOMMUNICATION SERVICES 0.29% 8 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS The iShares S&P SmallCap 600 Index Fund (the "Fund") seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Standard & Poor's SmallCap 600 Index (the "Index"). The iShares S&P SmallCap 600/BARRA Growth Index Fund (the "Growth Fund") and iShares S&P SmallCap 600/BARRA Value Index Fund (the "Value 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 Index, as measured by the Standard & Poor's SmallCap 600/BARRA Growth Index (the "Growth Index") and the Standard & Poor's SmallCap 600/BARRA Value Index (the "Value Index"), respectively. For the six months ended September 30, 2003 (the "reporting period"), the Fund returned 28.24%, compared to a return of 28.36% by the Index. The Growth Fund and the Value Fund returned 25.94% and 30.37%, respectively, while the Growth Index returned 26.04% and the Value Index returned 30.51%. Investors found cause for optimism during the reporting period. Following an official conclusion to the war in Iraq, markets reversed course and headed upward throughout the period. Although first quarter GDP figures revealed tepid growth, second quarter growth was a healthier 3.3% annual rate. Although individual and corporate spending contributed to the higher-than-expected rate, a major driver was government spending, which grew at an annual pace of 8.5%. This increase was largely due to a 45.8% annual rate increase in national defense spending during the second quarter. During the reporting period, smaller company shares maintained the leadership role that they had assumed in the first quarter of the year, outperforming their larger capitalization counterparts. Within the Index, value stocks generally outperformed growth stocks. Within the Index, nearly every industry sector posted double-digit gains. Leading the way was information technology (16.83% of the Index as of September 30, 2003), which gained 43.98%. Consumer discretionary, the largest weighting at 19.68% of the Index as of September 30, 2003, gained 38.31%. Industrials (18.73% of the Index as of September 30, 2003) rose 25.41%. Health care and financials (respectively 13.48% and 13.92% of the Index as of September 30, 2003) returned 24.89% and 24.64%, respectively. Although telecommunications services (0.44% of the Index as of September 30, 2003) was the weakest performing group, it still managed to return 3.11%. Nine of the ten largest constituents in the Index delivered positive returns. ITT Educational Services Inc. (0.56% of the Index as of September 30, 2003) climbed 71.14%. The Ryland Group Inc. and Harman International Industries Inc. (respectively 0.47% and 0.82% of the Index as of September 30, 2003) gained 69.28% and 67.92%, respectively. NVR Inc., the largest weighting at 0.87% of the Index as of September 30, 2003, returned 41.79%. The only negative performance came from Alliant Techsystems Inc. (0.48% of the Index as of September 30, 2003), which declined 11.03%. MANAGERS' DISCUSSION & ANALYSIS 9 SCHEDULE OF INVESTMENTS (Unaudited) iSHARES S&P 500 INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- COMMON STOCKS - 99.87% Microsoft Corp. 7,456,036 $ 207,203,240 General Electric Co. 6,907,801 205,921,548 Wal-Mart Stores Inc. 3,012,462 168,246,003 Exxon Mobil Corp. 4,575,964 167,480,282 Pfizer Inc. 5,368,420 163,092,600 Citigroup Inc. 3,551,382 161,623,395 Intel Corp. 4,488,457 123,477,452 International Business Machines Corp. 1,192,902 105,369,034 American International Group Inc. 1,799,549 103,833,977 Johnson & Johnson 2,047,263 101,380,464 Cisco Systems Inc./1/ 4,841,382 94,600,604 Procter & Gamble Co. 894,317 83,010,504 Bank of America Corp. 1,030,994 80,458,772 Merck & Co. Inc. 1,544,331 78,174,035 Coca-Cola Co. (The) 1,695,379 72,833,482 Verizon Communications Inc. 1,900,744 61,660,135 Altria Group Inc. 1,399,476 61,297,049 Wells Fargo & Company 1,158,120 59,643,180 Dell Inc./1/ 1,770,929 59,131,319 Amgen Inc./1/ 890,138 57,476,211 PepsiCo Inc. 1,189,830 54,529,909 ChevronTexaco Corp. 737,416 52,688,373 SBC Communications Inc. 2,293,284 51,025,569 Home Depot Inc. 1,585,910 50,511,233 United Parcel Service Inc. Class B 775,858 49,499,740 JP Morgan Chase & Co. 1,404,137 48,204,023 Comcast Corp. Class A/1/ 1,552,236 47,933,048 Fannie Mae 671,801 47,160,430 AOL Time Warner Inc./1/ 3,111,452 47,014,040 Viacom Inc. Class B 1,210,096 46,346,677 Lilly (Eli) & Co. 774,394 45,999,004 Abbott Laboratories 1,077,413 45,843,923 Wyeth 917,751 42,308,321 Hewlett-Packard Co. 2,106,834 40,788,306 Oracle Corp./1/ 3,608,280 40,484,902 American Express Co. 887,896 40,008,594 Medtronic Inc. 839,355 39,382,537 Morgan Stanley 750,406 37,865,487 Wachovia Corp. 919,056 37,855,917 3M Co. 539,494 37,262,851 Merrill Lynch & Co. Inc. 644,473 34,498,640 Bristol-Myers Squibb Co. 1,337,760 34,326,922 U.S. Bancorp 1,327,592 31,848,932 BellSouth Corp. 1,274,573 30,181,889 Bank One Corp. 779,854 30,141,357 Walt Disney Co. (The) 1,410,038 28,440,466 Tyco International Ltd. 1,378,038 28,153,316 Anheuser-Busch Companies Inc. 570,406 28,143,832 Lowe's Companies Inc. 539,895 28,020,551 Du Pont (E.I.) de Nemours and Co. 687,343 27,500,593 Goldman Sachs Group Inc. (The) 326,690 27,409,291 Texas Instruments Inc. 1,193,359 27,208,585 ConocoPhillips 468,381 25,643,860 Freddie Mac 479,350 25,093,972 Washington Mutual Inc. 637,009 25,079,044 United Technologies Corp. 322,881 24,952,244 eBay Inc./1/ 442,331 23,669,132 Target Corp. 628,469 23,649,288 QUALCOMM Inc. 546,798 22,768,669 Gillette Co. (The) 704,640 22,534,387 FleetBoston Financial Corp. 725,543 21,875,121 Fifth Third Bancorp 393,137 21,807,309 Walgreen Co. 707,207 21,668,822 Colgate-Palmolive Co. 371,242 20,748,715 Applied Materials Inc./1/ 1,143,652 20,745,847 McDonald's Corp. 877,874 20,665,154 UnitedHealth Group Inc. 410,645 20,663,656 Dow Chemical Co. (The) 633,223 20,605,076 First Data Corp. 510,752 20,409,650 MBNA Corp. 881,571 20,099,819 Boeing Co. (The) 580,121 19,915,554 Schlumberger Ltd. 401,745 19,444,458 Motorola Inc. 1,602,396 19,180,680 EMC Corp./1/ 1,512,646 19,104,719 Boston Scientific Corp./1/ 283,730 18,101,974 Cardinal Health Inc. 308,003 17,984,295 10 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P 500 INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- Kimberly-Clark Corp. 349,965 $ 17,960,204 Allstate Corp. (The) 485,632 17,740,137 Marsh & McLennan Companies Inc. 367,555 17,499,294 Caterpillar Inc. 237,627 16,358,243 Clear Channel Communications Inc. 423,702 16,227,787 General Motors Corp. 386,747 15,829,555 Honeywell International Inc. 591,841 15,595,010 Bank of New York Co. Inc. (The) 531,903 15,483,696 Schering-Plough Corp. 1,013,316 15,442,936 AT&T Wireless Services Inc./1/ 1,870,765 15,302,858 Emerson Electric Co. 290,383 15,288,665 Alcoa Inc. 583,097 15,253,818 Yahoo! Inc./1/ 419,916 14,856,628 Automatic Data Processing Inc. 412,537 14,789,451 MetLife Inc. 524,370 14,708,579 Southern Company 501,343 14,699,377 Sysco Corp. 448,101 14,657,384 Gannett Co. Inc. 185,286 14,370,782 Lockheed Martin Corp. 310,497 14,329,437 Carnival Corp. 433,599 14,261,071 Exelon Corp. 224,453 14,252,766 Illinois Tool Works Inc. 212,165 14,058,053 Prudential Financial Inc. 376,152 14,053,039 Nextel Communications Inc. Class A/1/ 712,594 14,030,976 Dominion Resources Inc. 222,512 13,773,493 Ford Motor Company 1,265,526 13,629,715 BB&T Corp. 372,692 13,383,370 FedEx Corp. 205,781 13,258,470 Cendant Corp./1/ 699,682 13,077,057 Forest Laboratories Inc./1/ 251,356 12,932,266 International Paper Co. 330,317 12,888,969 HCA Inc. 344,773 12,708,333 Kohls Corp./1/ 233,716 12,503,806 National City Corp. 423,486 12,475,898 SLM Corp. 311,870 12,150,455 General Mills Inc. 255,895 12,044,978 Baxter International Inc. 412,084 11,975,161 SunTrust Banks Inc. 193,976 11,710,331 AT&T Corp. 542,234 11,685,143 Lehman Brothers Holdings Inc. 167,258 11,554,183 AFLAC Inc. 354,012 11,434,588 Schwab (Charles) Corp. (The) 932,791 11,109,541 Nike Inc. Class B 182,499 11,099,589 Duke Energy Corp. 622,577 11,088,096 Travelers Property Casualty Corp. Class B 696,914 11,066,994 Newmont Mining Corp. 280,571 10,967,520 Northrop Grumman Corp. 126,137 10,875,532 Waste Management Inc. 407,761 10,671,105 General Dynamics Corp. 136,108 10,624,590 Best Buy Co. Inc./1/ 223,169 10,604,991 Gap Inc. (The) 614,129 10,513,888 Avon Products Inc. 162,712 10,504,687 Computer Associates International Inc. 400,331 10,452,642 Progressive Corp. (The) 150,094 10,372,996 Stryker Corp. 137,144 10,328,315 State Street Corp. 229,187 10,313,415 Union Pacific Corp. 175,943 10,234,604 Hartford Financial Services Group Inc. 193,787 10,199,010 Harley-Davidson Inc. 208,464 10,047,965 Alltel Corp. 215,351 9,979,365 Guidant Corp. 212,145 9,938,993 Tribune Co. 215,586 9,895,397 Sara Lee Corp. 538,177 9,880,930 Costco Wholesale Corp./1/ 315,847 9,816,525 Analog Devices Inc./1/ 251,885 9,576,668 Southwest Airlines Co. 537,963 9,521,945 Golden West Financial Corp. 105,161 9,412,961 Omnicom Group Inc. 130,550 9,380,018 Sprint Corp. (FON Group) 620,960 9,376,496 Kellogg Co. 280,273 9,347,105 Electronic Arts Inc./1/ 101,159 9,329,895 Kroger Co./1/ 520,216 9,296,260 Occidental Petroleum Corp. 263,315 9,276,587 PNC Financial Services Group 193,374 9,200,735 Veritas Software Corp./1/ 292,626 9,188,456 Mellon Financial Corp. 296,769 8,944,618 SCHEDULES OF INVESTMENTS 11 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P 500 INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- Capital One Financial Corp. 156,375 $ 8,919,630 Maxim Integrated Products Inc. 224,861 8,882,010 Weyerhaeuser Co. 151,005 8,826,242 Paychex Inc. 259,504 8,804,971 Deere & Co. 165,031 8,797,803 Zimmer Holdings Inc./1/ 156,800 8,639,680 Corning Inc./1/ 914,834 8,617,736 Wrigley (William Jr.) Co. 155,347 8,590,689 Sears, Roebuck and Co. 195,972 8,569,856 Entergy Corp. 156,893 8,495,756 CVS Corp. 272,914 8,476,709 Chubb Corp. 128,743 8,352,846 Heinz (H.J.) Co. 242,212 8,303,027 American Electric Power Co. Inc. 272,773 8,183,190 McGraw-Hill Companies Inc. (The) 131,434 8,165,994 FPL Group Inc. 126,956 8,023,619 Apollo Group Inc. Class A/1/ 120,988 7,988,838 Staples Inc./1/ 336,145 7,983,444 Raytheon Co. 283,566 7,939,848 Masco Corp. 323,878 7,928,533 ConAgra Foods Inc. 370,176 7,862,538 Danaher Corp. 105,712 7,807,888 Starbucks Corp./1/ 270,473 7,789,622 WellPoint Health Networks Inc./1/ 100,919 7,778,837 Bed Bath & Beyond Inc./1/ 203,536 7,771,004 Apache Corp. 111,582 7,737,096 Linear Technology Corp. 215,727 7,725,184 Devon Energy Corp. 160,082 7,714,352 Franklin Resources Inc. 173,563 7,673,220 Equity Office Properties Trust 275,468 7,583,634 Campbell Soup Co. 282,916 7,497,274 KeyCorp 291,386 7,450,740 Progress Energy Inc. 167,489 7,446,561 Burlington Northern Santa Fe Corp. 256,822 7,414,451 Sun Microsystems Inc./1/ 2,231,143 7,385,083 Halliburton Co. 303,291 7,354,807 Countrywide Financial Corp. 93,317 7,304,855 XL Capital Ltd. Class A 94,327 7,304,683 Anadarko Petroleum Corp. 172,804 7,216,295 Agilent Technologies Inc./1/ 324,852 7,182,478 FirstEnergy Corp. 223,395 7,126,300 Allergan Inc. 89,925 7,079,795 Air Products & Chemicals Inc. 156,621 7,063,607 Univision Communications Inc. Class A/1/ 221,092 7,059,468 Genzyme Corp. - General Division/1/ 152,458 7,051,182 Safeway Inc./1/ 306,235 7,025,031 Principal Financial Group Inc. 224,387 6,953,753 Praxair Inc. 112,084 6,943,604 Clorox Co. 150,347 6,896,417 Marriott International Inc. Class A 159,739 6,873,569 SouthTrust Corp. 232,581 6,835,556 Intuit Inc./1/ 141,671 6,834,209 TJX Companies Inc. 351,792 6,831,801 Baker Hughes Inc. 230,628 6,824,283 Anthem Inc./1/ 95,279 6,796,251 KLA-Tencor Corp./1/ 132,028 6,786,239 PG&E Corp./1/ 283,527 6,776,295 Hancock (John) Financial Services Inc. 200,030 6,761,014 Electronic Data Systems Corp. 331,395 6,694,179 Burlington Resources Inc. 138,726 6,686,593 Xilinx Inc./1/ 234,356 6,681,490 International Game Technology Inc. 236,725 6,663,809 Chiron Corp./1/ 128,830 6,659,223 McKesson Corp. 199,507 6,641,588 Hershey Foods Corp. 90,376 6,568,528 Symantec Corp./1/ 104,108 6,560,886 Public Service Enterprise Group Inc. 155,904 6,547,968 Northern Trust Corp. 152,775 6,483,771 Aetna Inc. 105,700 6,450,871 Becton, Dickinson & Co. 175,490 6,338,699 St. Jude Medical Inc./1/ 117,589 6,322,761 Adobe Systems Inc. 160,895 6,316,738 ACE Ltd. 190,864 6,313,781 Ingersoll-Rand Co. Class A 117,606 6,284,865 12 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P 500 INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- Consolidated Edison Inc. 154,144 $ 6,282,909 Lucent Technologies Inc./1/ 2,872,804 6,205,257 Pitney Bowes Inc. 161,366 6,183,545 PPG Industries Inc. 117,784 6,150,680 Marathon Oil Corp. 214,904 6,124,764 Yum! Brands Inc./1/ 202,979 6,012,238 PACCAR Inc. 80,091 5,981,997 Coca-Cola Enterprises Inc. 313,344 5,972,337 Biomet Inc. 177,415 5,962,918 Johnson Controls Inc. 61,775 5,843,915 St. Paul Companies Inc. 157,714 5,840,149 Archer-Daniels-Midland Co. 444,767 5,830,895 Mattel Inc. 303,693 5,758,019 Simon Property Group Inc. 131,815 5,744,498 MedImmune Inc./1/ 173,208 5,717,596 Fortune Brands Inc. 100,103 5,680,845 Comerica Inc. 121,696 5,671,034 Micron Technology Inc./1/ 422,458 5,669,386 Unocal Corp. 179,248 5,649,897 Moody's Corp. 102,121 5,613,591 Xerox Corp./1/ 542,511 5,566,163 Lexmark International Inc./1/ 88,019 5,546,077 Equity Residential 188,895 5,530,846 AutoZone Inc./1/ 61,616 5,516,480 MBIA Inc. 99,799 5,485,951 Broadcom Corp. Class A/1/ 206,053 5,485,131 Limited Brands Inc. 359,549 5,421,999 Federated Department Stores Inc. 128,776 5,395,714 Block (H & R) Inc. 124,359 5,366,091 TXU Corp. 223,901 5,275,108 Regions Financial Corp. 153,919 5,271,726 Synovus Financial Corp. 208,240 5,203,918 Albertson's Inc. 252,620 5,196,393 SunGard Data Systems Inc./1/ 197,108 5,185,911 Loews Corp. 128,345 5,181,288 Apple Computer Inc./1/ 249,736 5,152,054 Rohm & Haas Co. 153,869 5,146,918 AmSouth Bancorp 241,769 5,130,338 Bear Stearns Companies Inc. (The) 68,545 5,127,166 Altera Corp./1/ 265,766 5,022,977 Norfolk Southern Corp. 270,223 4,999,126 Dover Corp. 140,105 4,955,514 PPL Corp. 120,992 4,954,622 Marshall & Ilsley Corp. 156,413 4,930,138 May Department Stores Co. (The) 198,586 4,891,173 Fiserv Inc./1/ 134,113 4,858,914 Medco Health Solutions Inc./1/ 187,127 4,852,203 Starwood Hotels & Resorts Worldwide Inc. 139,325 4,848,510 Computer Sciences Corp./1/ 129,005 4,846,718 Network Appliance Inc./1/ 233,691 4,797,676 Ameren Corp. 111,243 4,773,437 Charter One Financial Inc. 155,444 4,756,586 Family Dollar Stores Inc. 118,471 4,725,808 Ambac Financial Group Inc. 73,795 4,722,880 Tenet Healthcare Corp./1/ 320,491 4,640,710 Dollar General Corp. 230,300 4,606,000 PeopleSoft Inc./1/ 252,225 4,587,973 Concord EFS Inc./1/ 335,024 4,579,778 Eaton Corp. 51,612 4,573,855 Ecolab Inc. 180,828 4,565,907 Kinder Morgan Inc. 84,178 4,546,454 New York Times Co. Class A 103,256 4,487,506 AON Corp. 215,167 4,486,232 Cinergy Corp. 121,482 4,458,389 Cincinnati Financial Corp. 110,505 4,415,780 Quest Diagnostics Inc./1/ 72,733 4,410,529 Transocean Inc./1/ 220,070 4,401,400 Cintas Corp. 118,478 4,364,730 Lincoln National Corp. 123,290 4,362,000 Jefferson-Pilot Corp. 97,669 4,334,550 Monsanto Co. 180,615 4,323,923 CIGNA Corp. 96,623 4,314,217 Union Planters Corp. 136,149 4,307,754 CSX Corp. 147,140 4,303,845 Edison International/1/ 225,086 4,299,143 DTE Energy Co. 115,530 4,261,902 Xcel Energy Inc. 275,013 4,254,451 Sempra Energy 143,850 4,223,436 SCHEDULES OF INVESTMENTS 13 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P 500 INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- Georgia-Pacific Corp. 173,928 $ 4,216,015 Hilton Hotels Corp. 259,778 4,213,599 American Standard Companies Inc./1/ 49,720 4,188,910 Eastman Kodak Co. 197,309 4,131,650 AmerisourceBergen Corp. 76,121 4,114,340 Constellation Energy Group Inc. 114,954 4,113,054 Newell Rubbermaid Inc. 189,247 4,100,982 National Semiconductor Corp./1/ 126,847 4,095,890 UST Inc. 115,523 4,064,099 Sprint Corp. (PCS Group)/1/ 706,002 4,045,391 Penney (J.C.) Co. Inc. (Holding Co.) 187,071 3,997,707 Qwest Communications International Inc./1/ 1,166,970 3,967,698 Biogen Inc./1/ 102,160 3,905,577 Genuine Parts Co. 120,851 3,864,815 Freeport-McMoRan Copper & Gold Inc. 116,293 3,849,298 Avery Dennison Corp. 76,027 3,840,884 KeySpan Corp. 108,978 3,822,948 Pepsi Bottling Group Inc. 185,173 3,810,860 ITT Industries Inc. 63,437 3,796,070 Interpublic Group of Companies Inc. 268,711 3,794,199 Nabors Industries Ltd./1/ 101,181 3,770,004 Molex Inc. 131,489 3,759,271 Tiffany & Co. 100,598 3,755,323 BJ Services Co./1/ 109,678 3,747,697 ProLogis 123,654 3,740,534 First Tennessee National Corp. 87,787 3,727,436 Knight Ridder Inc. 55,364 3,692,779 Textron Inc. 93,530 3,689,759 NiSource Inc. 182,780 3,651,944 Parker Hannifin Corp. 81,497 3,642,916 North Fork Bancorp Inc. 104,794 3,641,592 Jabil Circuit Inc./1/ 138,160 3,599,068 Health Management Associates Inc. Class A 164,271 3,582,751 JDS Uniphase Corp./1/ 985,252 3,546,907 MGIC Investment Corp. 67,895 3,535,293 Novellus Systems Inc./1/ 104,247 3,518,336 MeadWestvaco Corp. 137,926 3,517,113 Delphi Corp. 386,869 3,501,164 T. Rowe Price Group Inc. 84,297 3,478,094 IMS Health Inc. 164,647 3,474,052 Zions Bancorporation 61,998 3,462,588 Sanmina-SCI Corp./1/ 350,207 3,397,008 Solectron Corp./1/ 576,951 3,375,163 CenturyTel Inc. 99,495 3,371,886 Rockwell Automation Inc. 128,425 3,371,156 Williams Companies Inc. 356,173 3,355,150 SAFECO Corp. 94,987 3,349,242 AutoNation Inc./1/ 189,412 3,322,286 Centex Corp. 42,522 3,311,613 Brown-Forman Corp. Class B 41,836 3,310,064 Express Scripts Inc./1/ 53,836 3,292,071 EOG Resources Inc. 78,777 3,288,152 Siebel Systems Inc./1/ 337,055 3,276,175 Plum Creek Timber Co. Inc. 127,598 3,246,093 Torchmark Corp. 79,741 3,240,674 RadioShack Corp. 114,018 3,239,251 Applera Corp. - Applied Biosystems Group 144,036 3,213,443 Scientific-Atlanta Inc. 102,435 3,190,850 Whirlpool Corp. 47,068 3,189,798 Harrah's Entertainment Inc. 75,389 3,174,631 Noble Corp./1/ 92,771 3,153,286 Huntington Bancshares Inc. 159,270 3,151,953 Amerada Hess Corp. 62,612 3,136,861 AES Corp. (The)/1/ 422,197 3,132,702 Rockwell Collins Inc. 123,490 3,118,123 Avaya Inc./1/ 285,962 3,116,986 Kerr-McGee Corp. 69,577 3,105,917 Unisys Corp./1/ 227,505 3,078,143 Watson Pharmaceuticals Inc./1/ 73,791 3,076,347 Cooper Industries Ltd. 63,376 3,043,949 El Paso Corp. 416,689 3,041,830 QLogic Corp./1/ 64,611 3,037,363 Office Depot Inc./1/ 213,676 3,002,148 Grainger (W.W.) Inc. 62,911 2,991,418 UNUMProvident Corp. 201,848 2,981,295 14 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P 500 INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- Sherwin-Williams Co. (The) 100,907 $ 2,967,675 VF Corp. 73,957 2,877,667 Phelps Dodge Corp./1/ 61,310 2,869,308 Leggett & Platt Inc. 132,557 2,867,208 Pulte Homes Inc. 42,146 2,866,349 Vulcan Materials Co. 70,117 2,798,369 Sealed Air Corp./1/ 58,721 2,773,393 Mercury Interactive Corp./1/ 59,437 2,699,034 Advanced Micro Devices Inc./1/ 240,860 2,675,955 Dow Jones & Co. Inc. 56,474 2,674,044 McCormick & Co. Inc. 95,775 2,626,151 Jones Apparel Group Inc. 87,117 2,607,412 Apartment Investment & Management Co. Class A 65,430 2,575,325 Sigma-Aldrich Corp. 49,236 2,557,318 King Pharmaceuticals Inc./1/ 167,981 2,544,912 Bard (C.R.) Inc. 35,736 2,537,256 Wendy's International Inc. 77,907 2,516,396 Liz Claiborne Inc. 73,748 2,511,119 Citrix Systems Inc./1/ 113,467 2,505,351 Nucor Corp. 53,802 2,468,436 Thermo Electron Corp./1/ 112,364 2,438,299 Alberto-Culver Co. Class B 40,857 2,403,209 Teradyne Inc./1/ 128,897 2,397,484 Engelhard Corp. 86,479 2,392,874 LSI Logic Corp./1/ 261,053 2,346,866 Providian Financial Corp./1/ 198,884 2,344,842 Waters Corp./1/ 85,332 2,340,657 Janus Capital Group Inc. 166,859 2,331,020 R.J. Reynolds Tobacco Holdings Inc. 58,613 2,317,558 American Power Conversion Corp. 135,134 2,316,197 Robert Half International Inc./1/ 118,632 2,313,324 Nordstrom Inc. 93,175 2,311,672 Pinnacle West Capital Corp. 63,393 2,250,452 Hasbro Inc. 119,440 2,231,139 Pactiv Corp./1/ 109,423 2,219,098 SUPERVALU Inc. 92,500 2,207,050 Black & Decker Corp. 54,389 2,205,474 BMC Software Inc./1/ 158,270 2,204,701 Citizens Communications Co./1/ 194,685 2,182,419 International Flavors & Fragrances Inc. 65,326 2,160,984 Equifax Inc. 96,734 2,154,266 Darden Restaurants Inc. 113,102 2,148,938 Ball Corp. 39,280 2,121,120 Sunoco Inc. 52,498 2,111,470 Federated Investors Inc. Class B 76,167 2,109,826 Sabre Holdings Corp. 98,030 2,106,665 Fluor Corp. 55,770 2,081,894 NCR Corp./1/ 65,390 2,072,209 Humana Inc./1/ 111,460 2,011,853 KB Home 32,776 1,955,416 Goodrich (B.F.) Co. 80,592 1,953,550 Donnelley (R.R.) & Sons Co. 78,016 1,940,258 Monster Worldwide Inc./1/ 76,785 1,933,446 Tellabs Inc./1/ 284,006 1,928,401 Comverse Technology Inc./1/ 128,711 1,925,517 CenterPoint Energy Inc. 209,828 1,924,123 CIENA Corp./1/ 323,814 1,913,741 Pall Corp. 84,851 1,904,056 Symbol Technologies Inc. 158,082 1,889,080 Manor Care Inc. 62,678 1,880,340 Convergys Corp./1/ 98,203 1,801,043 Temple-Inland Inc. 36,931 1,793,000 Eastman Chemical Co. 53,418 1,789,503 Stanley Works (The) 60,207 1,777,311 Toys R Us Inc./1/ 146,422 1,761,457 TECO Energy Inc. 126,527 1,748,603 Navistar International Corp./1/ 46,780 1,743,958 NVIDIA Corp./1/ 108,386 1,724,530 Bausch & Lomb Inc. 37,111 1,638,451 Bemis Co. 36,663 1,624,171 Brunswick Corp. 62,168 1,596,474 Rowan Companies Inc./1/ 64,828 1,593,472 Allied Waste Industries Inc./1/ 147,149 1,589,209 Dana Corp. 102,747 1,585,386 Meredith Corp. 34,308 1,584,000 Ashland Inc. 48,019 1,577,424 Millipore Corp./1/ 33,229 1,530,528 Deluxe Corp. 37,692 1,512,957 SCHEDULES OF INVESTMENTS 15 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P 500 INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- PMC-Sierra Inc./1/ 114,605 $ 1,511,755 Tektronix Inc./1/ 58,002 1,435,550 Compuware Corp./1/ 258,839 1,387,377 Circuit City Stores Inc. 144,904 1,380,935 Reebok International Ltd. 41,040 1,371,967 Coors (Adolf) Company Class B 25,128 1,350,881 Autodesk Inc. 79,060 1,345,601 Maytag Corp. 53,662 1,339,940 Novell Inc./1/ 249,847 1,331,685 PerkinElmer Inc. 86,650 1,326,612 Andrew Corp./1/ 105,600 1,297,824 United States Steel Corp. 70,082 1,288,107 ADC Telecommunications Inc./1/ 547,559 1,275,812 Big Lots Inc./1/ 80,007 1,264,911 Gateway Inc./1/ 223,143 1,262,989 Calpine Corp./1/ 258,256 1,262,872 Cummins Inc. 28,377 1,260,790 Ryder System Inc. 42,959 1,259,558 Delta Air Lines Inc. 85,072 1,131,458 Snap-On Inc. 40,403 1,117,143 Boise Cascade Corp. 40,362 1,113,991 Nicor Inc. 30,488 1,071,348 Applied Micro Circuits Corp./1/ 207,187 1,009,001 Peoples Energy Corp. 24,358 1,007,934 Louisiana-Pacific Corp./1/ 72,245 995,536 Crane Co. 40,995 959,693 Winn-Dixie Stores Inc. 96,913 935,210 Dynegy Inc. Class A/1/ 250,409 901,472 American Greetings Corp. Class A/1/ 44,971 873,787 Hercules Inc./1/ 75,151 851,461 Dillards Inc. Class A 58,292 814,922 Cooper Tire & Rubber Co. 50,588 802,832 Allegheny Energy Inc./1/ 86,532 790,902 Goodyear Tire & Rubber Co. (The) 117,445 771,614 Worthington Industries Inc. 58,862 739,307 CMS Energy Corp. 99,050 729,998 Great Lakes Chemical Corp. 34,471 693,212 Thomas & Betts Corp./1/ 40,417 640,609 SHARES OR SECURITY PRINCIPAL VALUE --------------------------------------------------------------------- Visteon Corp. 90,274 $ 595,808 Power-One Inc./1/ 54,650 562,349 Parametric Technology Corp./1/ 179,718 560,720 Tupperware Corp. 40,398 540,525 Allegheny Technologies Inc. 55,739 365,090 TOTAL COMMON STOCKS (Cost: $7,244,404,139) 6,348,594,385 SHORT TERM INVESTMENTS - 6.07% MONEY MARKET FUNDS - 3.63% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares/2/,/3/ 58,340,805 58,340,805 Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares/2/,/3/ 151,533,198 151,533,198 BlackRock Temp Cash Money Market Fund/2/ 2,511,332 2,511,332 Short Term Investment Co. - Liquid Assets Money Market Portfolio/2/ 13,329,144 13,329,144 Short Term Investment Co. - Prime Money Market Portfolio, Institutional Shares/2/ 5,139,414 5,139,414 230,853,893 FLOATING RATE NOTES - 1.41% Beta Finance Inc. 1.08%, 05/20/04/2/ $ 2,569,707 2,569,463 1.08%, 09/15/04/2/ 5,139,414 5,138,923 1.17%, 08/23/04/2/ 2,569,707 2,571,679 CC USA Inc. 1.06%, 05/24/04/2/ 5,139,414 5,139,084 1.08%, 04/19/04/2/ 2,261,342 2,261,280 1.12%, 07/15/04/2/ 2,569,707 2,570,436 Dorada Finance Inc. 1.08%, 05/20/04/2/ 5,139,414 5,138,925 1.24%, 08/09/04/2/ 1,284,854 1,284,689 16 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P 500 INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE --------------------------------------------------------------------- Five Finance Inc. 1.09%, 04/15/04/2/ $ 2,569,707 $ 2,569,707 HBOS Treasury Services PLC 1.13%, 06/24/08/2/ 5,139,414 5,139,414 Holmes Financing PLC 1.08%, 04/15/04/2/ 1,027,883 1,027,883 K2 USA LLC 1.08%, 08/16/04/2/ 1,284,854 1,284,685 1.08%, 09/27/04/2/ 5,550,567 5,549,746 1.09%, 04/13/04/2/ 2,569,707 2,569,640 1.09%, 05/17/04/2/ 2,569,707 2,569,627 Links Finance LLC 1.05%, 07/20/04/2/ 2,055,766 2,055,436 1.08%, 05/04/04/2/ 2,569,707 2,569,632 1.08%, 06/28/04/2/ 2,569,707 2,569,328 1.09%, 03/29/04/2/ 2,569,707 2,569,707 Nationwide Building Society 1.08%, 07/23/04/2/ 3,854,561 3,854,561 Sigma Finance Inc. 1.05%, 07/20/04/2/ 2,569,707 2,569,294 1.07%, 10/15/03/2/ 5,139,414 5,139,395 1.07%, 07/01/04/2/ 2,569,707 2,569,226 1.24%, 08/06/04/2/ 1,284,854 1,284,744 Tango Finance Corp. 1.05%, 07/15/04/2/ 1,541,824 1,541,422 1.06%, 07/06/04/2/ 1,541,824 1,541,704 WhistleJacket Capital LLC 1.08%, 09/15/04/2/ 2,569,707 2,569,216 White Pine Finance LLC 1.08%, 05/17/04/2/ 3,083,648 3,083,648 1.08%, 07/06/04/2/ 3,083,648 3,083,423 1.08%, 08/26/04/2/ 2,569,707 2,569,350 1.09%, 04/20/04/2/ 2,569,707 2,569,707 89,524,974 COMMERCIAL PAPER - 0.74% Amsterdam Funding Corp. 1.06%, 10/16/03/2/ 2,441,222 2,440,143 Blue Ridge Asset Funding Corp. 1.05%, 10/17/03/2/ 2,569,707 2,568,508 Edison Asset Securitization 1.07%, 10/23/03/2/ 4,831,049 4,827,890 Gemini Securitization Corp. 1.05%, 10/17/03/2/ 1,798,795 1,797,955 Greenwich Funding Corp. 1.06%, 10/16/03/2/ 3,032,254 3,030,915 Jupiter Securitization Corp. 1.05%, 10/20/03/2/ 2,569,707 2,568,283 New Center Asset Trust 1.06%, 10/22/03/2/ 2,569,707 2,568,119 Park Avenue Receivables Corp. 1.05%, 10/20/03/2/ 2,569,707 2,568,283 Preferred Receivables Funding Corp. 1.06%, 10/08/03/2/ 2,569,707 2,569,177 Receivables Capital Corp. 1.05%, 10/15/03/2/ 1,727,254 1,726,549 Sydney Capital Corp. 1.07%, 10/17/03/2/ 2,081,463 2,080,473 UBS Finance (Delaware) Inc. 1.03%, 10/08/03/2/ 5,139,414 5,138,385 1.05%, 10/15/03/2/ 2,569,707 2,568,658 1.11%, 10/01/03/2/ 10,278,828 10,278,828 46,732,166 TIME DEPOSITS - 0.23% Abbey National Treasury Services PLC 1.15%, 10/01/03/2/ 2,569,707 2,569,707 Canadian Imperial Bank of Commerce 1.06%, 10/08/03/2/ 1,284,854 1,284,854 1.08%, 10/30/03/2/ 2,055,766 2,055,765 1.37%, 08/26/04/2/ 5,139,414 5,139,414 Toronto-Dominion Bank 1.33%, 08/23/04/2/ 3,340,619 3,339,116 14,388,856 SCHEDULES OF INVESTMENTS 17 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P 500 INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE --------------------------------------------------------------------- REPURCHASE AGREEMENTS - 0.06% Lehman Brothers Inc. 1.10%, 10/01/03/2/ $ 4,111,531 $ 4,111,531 4,111,531 TOTAL SHORT TERM INVESTMENTS (Cost: $385,611,420) 385,611,420 TOTAL INVESTMENTS IN SECURITIES - 105.94% (Cost $7,630,015,559) 6,734,205,805 Other Assets, Less Liabilities - (5.94%) (377,284,462) -------------- NET ASSETS - 100.00% $6,356,921,343 ============== /1/ Non-income earning securities. /2/ All or a portion of this security represents investments of securities lending collateral. /3/ Issuer is an affiliate of the Fund's investment advisor. See Note 2. SEE NOTES TO FINANCIAL STATEMENTS. 18 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) iSHARES S&P 500/BARRA GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- COMMON STOCKS - 99.89% Microsoft Corp. 2,330,648 $ 64,768,708 General Electric Co. 2,159,279 64,368,107 Wal-Mart Stores Inc. 941,653 52,591,320 Pfizer Inc. 1,678,092 50,980,435 Intel Corp. 1,403,028 38,597,300 International Business Machines Corp. 372,886 32,937,020 Johnson & Johnson 639,661 31,676,013 Cisco Systems Inc./1/ 1,512,658 29,557,337 Procter & Gamble Co. 279,428 25,936,507 Merck & Co. Inc. 482,503 24,424,302 Coca-Cola Co. (The) 529,686 22,755,311 Altria Group Inc. 437,381 19,157,288 Dell Inc./1/ 553,571 18,483,736 Amgen Inc./1/ 278,178 17,961,953 PepsiCo Inc. 371,883 17,043,398 Home Depot Inc. 495,309 15,775,592 United Parcel Service Inc. Class B 242,523 15,472,967 Fannie Mae 209,864 14,732,453 Lilly (Eli) & Co. 241,922 14,370,167 Abbott Laboratories 336,742 14,328,372 Wyeth 286,893 13,225,767 Oracle Corp./1/ 1,127,902 12,655,060 American Express Co. 277,367 12,498,157 Medtronic Inc. 262,203 12,302,565 3M Co. 168,738 11,654,734 Bristol-Myers Squibb Co. 417,770 10,719,978 Anheuser-Busch Companies Inc. 178,162 8,790,513 Lowe's Companies Inc. 168,951 8,768,557 Du Pont (E.I.) de Nemours and Co. 214,703 8,590,267 United Technologies Corp. 101,033 7,807,830 eBay Inc./1/ 138,420 7,406,854 QUALCOMM Inc. 171,105 7,124,812 Gillette Co. (The) 219,833 7,030,259 Fifth Third Bancorp 122,774 6,810,274 Walgreen Co. 220,853 6,766,936 Colgate-Palmolive Co. 116,112 6,489,500 UnitedHealth Group Inc. 128,502 6,466,221 Dow Chemical Co. (The) 197,986 6,442,464 First Data Corp. 159,510 6,374,020 Schlumberger Ltd. 125,718 6,084,751 Boston Scientific Corp./1/ 88,705 5,659,379 Kimberly-Clark Corp. 109,350 5,611,842 Marsh & McLennan Companies Inc. 114,962 5,473,341 Emerson Electric Co. 90,874 4,784,516 Yahoo! Inc./1/ 131,406 4,649,144 Automatic Data Processing Inc. 128,856 4,619,488 Sysco Corp. 140,236 4,587,120 Nextel Communications Inc. Class A/1/ 223,000 4,390,870 Forest Laboratories Inc./1/ 78,568 4,042,324 Kohls Corp./1/ 73,140 3,912,990 SLM Corp. 97,332 3,792,055 General Mills Inc. 80,211 3,775,532 Baxter International Inc. 128,966 3,747,752 Nike Inc. Class B 56,970 3,464,915 Best Buy Co. Inc./1/ 69,460 3,300,739 Gap Inc. (The) 192,212 3,290,669 Avon Products Inc. 50,887 3,285,265 Progressive Corp. (The) 46,805 3,234,694 Stryker Corp. 42,939 3,233,736 Harley-Davidson Inc. 65,245 3,144,809 Guidant Corp. 66,455 3,113,417 Sara Lee Corp. 167,845 3,081,634 Analog Devices Inc./1/ 78,959 3,002,021 Omnicom Group Inc. 40,883 2,937,444 Kellogg Co. 87,724 2,925,595 Electronic Arts Inc./1/ 31,666 2,920,555 Veritas Software Corp./1/ 91,575 2,875,455 Maxim Integrated Products Inc. 70,100 2,768,950 Paychex Inc. 81,430 2,762,920 Zimmer Holdings Inc./1/ 49,015 2,700,727 Wrigley (William Jr.) Co. 48,652 2,690,456 Heinz (H.J.) Co. 75,879 2,601,132 McGraw-Hill Companies Inc. (The) 41,251 2,562,925 Apollo Group Inc. Class A/1/ 37,832 2,498,047 Bed Bath & Beyond Inc./1/ 63,757 2,434,242 Starbucks Corp./1/ 84,356 2,429,453 SCHEDULES OF INVESTMENTS 19 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P 500/BARRA GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- Linear Technology Corp. 67,656 $ 2,422,761 Campbell Soup Co. 88,560 2,346,840 Univision Communications Inc. Class A/1/ 69,461 2,217,890 Allergan Inc. 28,091 2,211,604 Genzyme Corp. - General Division/1/ 47,709 2,206,541 Praxair Inc. 35,080 2,173,206 Intuit Inc./1/ 44,398 2,141,760 Clorox Co. 46,685 2,141,441 TJX Companies Inc. 109,963 2,135,481 KLA-Tencor Corp./1/ 41,053 2,110,124 International Game Technology Inc. 74,241 2,089,884 Xilinx Inc./1/ 73,218 2,087,445 Chiron Corp./1/ 40,214 2,078,662 Symantec Corp./1/ 32,582 2,053,318 Hershey Foods Corp. 28,210 2,050,303 St. Jude Medical Inc./1/ 36,991 1,989,006 Becton, Dickinson & Co. 54,693 1,975,511 Adobe Systems Inc. 50,260 1,973,208 Lucent Technologies Inc./1/ 896,872 1,937,244 Pitney Bowes Inc. 50,397 1,931,213 Yum! Brands Inc./1/ 63,363 1,876,812 Biomet Inc. 55,223 1,856,045 Mattel Inc. 94,977 1,800,764 MedImmune Inc./1/ 53,809 1,776,235 Moody's Corp. 32,147 1,767,121 Xerox Corp./1/ 169,836 1,742,517 Lexmark International Inc./1/ 27,534 1,734,917 AutoZone Inc./1/ 19,272 1,725,422 Broadcom Corp. Class A/1/ 64,195 1,708,871 Block (H & R) Inc. 38,835 1,675,730 Altera Corp./1/ 82,536 1,559,930 Network Appliance Inc./1/ 73,367 1,506,225 Family Dollar Stores Inc. 37,223 1,484,825 Concord EFS Inc./1/ 105,486 1,441,994 Dollar General Corp. 71,912 1,438,240 Ecolab Inc. 55,926 1,412,131 New York Times Co. Class A 32,175 1,398,325 Cintas Corp. 36,963 1,361,717 American Standard Companies Inc./1/ 15,503 1,306,128 Sprint Corp. (PCS Group)/1/ 221,434 1,268,817 UST Inc. 35,984 1,265,917 Qwest Communications International Inc./1/ 366,186 1,245,032 Biogen Inc./1/ 32,179 1,230,203 Avery Dennison Corp. 23,878 1,206,317 Freeport-McMoRan Copper & Gold Inc. 36,179 1,197,525 ITT Industries Inc. 19,890 1,190,218 Tiffany & Co. 31,399 1,172,125 BJ Services Co./1/ 34,140 1,166,564 Knight Ridder Inc. 17,377 1,159,046 IMS Health Inc. 51,936 1,095,850 T. Rowe Price Group Inc. 26,423 1,090,213 Express Scripts Inc./1/ 16,858 1,030,867 Brown-Forman Corp. Class B 13,017 1,029,905 RadioShack Corp. 35,802 1,017,135 Whirlpool Corp. 14,858 1,006,927 AES Corp. (The)/1/ 133,017 986,986 Avaya Inc./1/ 89,208 972,367 Rockwell Collins Inc. 38,342 968,136 Unisys Corp./1/ 70,991 960,508 QLogic Corp./1/ 20,367 957,453 Sealed Air Corp./1/ 18,292 863,931 Mercury Interactive Corp./1/ 18,466 838,541 Dow Jones & Co. Inc. 17,689 837,574 McCormick & Co. Inc. 30,240 829,181 Bard (C.R.) Inc. 11,290 801,590 Sigma-Aldrich Corp. 15,349 797,227 Citrix Systems Inc./1/ 35,555 785,054 Waters Corp./1/ 26,736 733,368 Robert Half International Inc./1/ 36,604 713,778 Black & Decker Corp. 16,837 682,740 Equifax Inc. 30,530 679,903 International Flavors & Fragrances Inc. 20,404 674,964 Ball Corp. 12,241 661,014 Federated Investors Inc. Class B 23,535 651,919 Monster Worldwide Inc./1/ 24,285 611,496 20 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P 500/BARRA GROWTH INDEX FUND September 30, 2003 SHARES OR SECURITY PRINCIPAL VALUE --------------------------------------------------------------------- Navistar International Corp./1/ 14,817 $ 552,378 NVIDIA Corp./1/ 34,040 541,610 Meredith Corp. 10,859 501,360 PMC-Sierra Inc./1/ 36,668 483,688 Millipore Corp./1/ 10,372 477,734 Deluxe Corp. 11,523 462,533 Maytag Corp. 16,938 422,942 Hercules Inc./1/ 24,009 272,022 Tupperware Corp. 12,208 163,343 TOTAL COMMON STOCKS (Cost: $996,958,973) 997,339,350 SHORT TERM INVESTMENTS - 5.40% MONEY MARKET FUNDS - 3.23% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares/2/,/3/ 21,381,624 21,381,624 Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares/2/,/3/ 7,924,808 7,924,808 BlackRock Temp Cash Money Market Fund/2/ 352,036 352,036 Short Term Investment Co. - Liquid Assets Money Market Portfolio/2/ 1,868,464 1,868,464 Short Term Investment Co. - Prime Money Market Portfolio, Institutional Shares/2/ 720,437 720,437 32,247,369 FLOATING RATE NOTES - 1.26% Beta Finance Inc. 1.08%, 05/20/04/2/ $ 360,219 360,184 1.08%, 09/15/04/2/ 720,437 720,368 1.17%, 08/23/04/2/ 360,219 360,496 CC USA Inc. 1.06%, 05/24/04/2/ 720,437 720,391 1.08%, 04/19/04/2/ 316,992 316,984 1.12%, 07/15/04/2/ 360,219 360,321 Dorada Finance Inc. 1.08%, 05/20/04/2/ 720,437 720,369 1.24%, 08/09/04/2/ 180,109 180,086 Five Finance Inc. 1.09%, 04/15/04/2/ 360,219 360,219 HBOS Treasury Services PLC 1.13%, 06/24/08/2/ 720,437 720,437 Holmes Financing PLC 1.08%, 04/15/04/2/ 144,087 144,087 K2 USA LLC 1.08%, 08/16/04/2/ 180,109 180,086 1.08%, 09/27/04/2/ 778,072 777,957 1.09%, 04/13/04/2/ 360,219 360,209 1.09%, 05/17/04/2/ 360,219 360,207 Links Finance LLC 1.05%, 07/20/04/2/ 288,175 288,129 1.08%, 05/04/04/2/ 360,219 360,208 1.08%, 06/28/04/2/ 360,219 360,165 1.09%, 03/29/04/2/ 360,219 360,219 Nationwide Building Society 1.08%, 07/23/04/2/ 540,328 540,328 Sigma Finance Inc. 1.05%, 07/20/04/2/ 360,219 360,161 1.07%, 10/15/03/2/ 720,437 720,434 1.07%, 07/01/04/2/ 360,219 360,151 1.24%, 08/06/04/2/ 180,109 180,094 Tango Finance Corp. 1.05%, 07/15/04/2/ 216,131 216,075 1.06%, 07/06/04/2/ 216,131 216,114 WhistleJacket Capital LLC 1.08%, 09/15/04/2/ 360,219 360,150 White Pine Finance LLC 1.08%, 05/17/04/2/ 432,262 432,262 1.08%, 07/06/04/2/ 432,262 432,231 1.08%, 08/26/04/2/ 360,219 360,168 1.09%, 04/20/04/2/ 360,219 360,219 12,549,509 COMMERCIAL PAPER - 0.65% Amsterdam Funding Corp. 1.06%, 10/16/03/2/ 342,208 342,056 SCHEDULES OF INVESTMENTS 21 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P 500/BARRA GROWTH INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE --------------------------------------------------------------------- Blue Ridge Asset Funding Corp. 1.05%, 10/17/03/2/ $ 360,219 $ 360,050 Edison Asset Securitization 1.07%, 10/23/03/2/ 677,211 676,768 Gemini Securitization Corp. 1.05%, 10/17/03/2/ 252,153 252,035 Greenwich Funding Corp. 1.06%, 10/16/03/2/ 425,058 424,870 Jupiter Securitization Corp. 1.05%, 10/20/03/2/ 360,219 360,019 New Center Asset Trust 1.06%, 10/22/03/2/ 360,219 359,996 Park Avenue Receivables Corp. 1.05%, 10/20/03/2/ 360,219 360,019 Preferred Receivables Funding Corp. 1.06%, 10/08/03/2/ 360,219 360,144 Receivables Capital Corp. 1.05%, 10/15/03/2/ 242,125 242,026 Sydney Capital Corp. 1.07%, 10/17/03/2/ 291,777 291,638 UBS Finance (Delaware) Inc. 1.03%, 10/08/03/2/ 720,437 720,293 1.05%, 10/15/03/2/ 360,219 360,071 1.11%, 10/01/03/2/ 1,440,874 1,440,874 6,550,859 TIME DEPOSITS - 0.20% Abbey National Treasury Services PLC 1.15%, 10/01/03/2/ 360,219 360,219 Canadian Imperial Bank of Commerce 1.06%, 10/08/03/2/ 180,109 180,109 1.08%, 10/30/03/2/ 288,175 288,175 1.37%, 08/26/04/2/ 720,437 720,437 Toronto-Dominion Bank 1.33%, 08/23/04/2/ 468,284 468,073 2,017,013 REPURCHASE AGREEMENTS - 0.06% Lehman Brothers Inc. 1.10%, 10/01/03/2/ 576,350 576,350 576,350 TOTAL SHORT TERM INVESTMENTS (Cost: $53,941,100) 53,941,100 TOTAL INVESTMENTS IN SECURITIES - 105.29% (Cost $1,050,900,073) 1,051,280,450 Other Assets, Less Liabilities - (5.29%) (52,786,112) -------------- NET ASSETS - 100.00% $ 998,494,338 ============== /1/ Non-income earning securities. /2/ All or a portion of this security represents investments of securities lending collateral. /3/ Issuer is an affiliate of the Fund's investment advisor. See Note 2. SEE NOTES TO FINANCIAL STATEMENTS. 22 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) iSHARES S&P 500/BARRA VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- COMMON STOCKS - 99.92% Exxon Mobil Corp. 1,678,228 $ 61,423,145 Citigroup Inc. 1,302,462 59,275,046 American International Group Inc. 659,690 38,064,113 Bank of America Corp. 377,843 29,486,868 Verizon Communications Inc. 696,956 22,609,253 Wells Fargo & Company 424,687 21,871,381 ChevronTexaco Corp. 270,109 19,299,288 SBC Communications Inc. 840,053 18,691,179 JP Morgan Chase & Co. 514,974 17,679,057 Comcast Corp. Class A/1/ 569,040 17,571,955 AOL Time Warner Inc./1/ 1,141,099 17,242,006 Viacom Inc. Class B 443,743 16,995,357 Hewlett-Packard Co. 771,759 14,941,254 Wachovia Corp. 337,006 13,881,277 Morgan Stanley 274,909 13,871,908 Merrill Lynch & Co. Inc. 236,433 12,656,258 U.S. Bancorp 487,092 11,685,337 BellSouth Corp. 466,921 11,056,689 Bank One Corp. 286,043 11,055,562 Walt Disney Co. (The) 516,546 10,418,733 Tyco International Ltd. 504,844 10,313,963 Goldman Sachs Group Inc. (The) 119,869 10,057,009 Texas Instruments Inc. 437,756 9,980,837 ConocoPhillips 171,920 9,412,620 Freddie Mac 175,914 9,209,098 Washington Mutual Inc. 233,726 9,201,793 Target Corp. 230,248 8,664,232 FleetBoston Financial Corp. 265,803 8,013,960 Applied Materials Inc./1/ 418,981 7,600,315 McDonald's Corp. 321,633 7,571,241 MBNA Corp. 322,991 7,364,195 Boeing Co. (The) 212,550 7,296,841 Motorola Inc. 588,441 7,043,639 EMC Corp./1/ 554,709 7,005,975 Cardinal Health Inc. 112,847 6,589,136 Allstate Corp. (The) 177,939 6,500,112 Caterpillar Inc. 87,242 6,005,739 Clear Channel Communications Inc. 155,233 5,945,424 General Motors Corp. 141,712 5,800,272 Honeywell International Inc. 217,461 5,730,097 Bank of New York Co. Inc. (The) 194,877 5,672,869 Schering-Plough Corp. 371,279 5,658,292 AT&T Wireless Services Inc./1/ 685,449 5,606,973 Alcoa Inc. 213,651 5,589,110 Southern Company 184,200 5,400,744 MetLife Inc. 192,144 5,389,639 Gannett Co. Inc. 68,191 5,288,894 Lockheed Martin Corp. 113,997 5,260,962 Exelon Corp. 82,388 5,231,638 Carnival Corp. 158,881 5,225,596 Prudential Financial Inc. 138,357 5,169,018 Illinois Tool Works Inc. 77,728 5,150,257 Dominion Resources Inc. 81,760 5,060,944 Ford Motor Company 462,613 4,982,342 BB&T Corp. 136,919 4,916,761 FedEx Corp. 75,390 4,857,378 Cendant Corp./1/ 256,874 4,800,975 International Paper Co. 121,035 4,722,786 HCA Inc. 126,699 4,670,125 National City Corp. 155,283 4,574,637 SunTrust Banks Inc. 71,173 4,296,714 AT&T Corp. 199,254 4,293,924 Lehman Brothers Holdings Inc. 61,303 4,234,811 AFLAC Inc. 129,745 4,190,763 Schwab (Charles) Corp. (The) 342,428 4,078,317 Duke Energy Corp. 228,664 4,072,506 Travelers Property Casualty Corp. Class B 254,325 4,038,681 Newmont Mining Corp. 103,175 4,033,111 Northrop Grumman Corp. 46,221 3,985,175 Waste Management Inc. 149,439 3,910,819 General Dynamics Corp. 49,883 3,893,867 Computer Associates International Inc. 146,081 3,814,175 State Street Corp. 83,981 3,779,145 Hartford Financial Services Group Inc. 71,402 3,757,887 SCHEDULES OF INVESTMENTS 23 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P 500/BARRA VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- Union Pacific Corp. 64,207 $ 3,734,921 Alltel Corp. 78,648 3,644,548 Tribune Co. 79,314 3,640,513 Costco Wholesale Corp./1/ 115,256 3,582,156 Southwest Airlines Co. 197,950 3,503,715 Golden West Financial Corp. 38,565 3,451,953 Sprint Corp. (FON Group) 228,350 3,448,085 Occidental Petroleum Corp. 96,773 3,409,313 Kroger Co./1/ 190,663 3,407,148 PNC Financial Services Group 71,132 3,384,461 Mellon Financial Corp. 109,020 3,285,863 Capital One Financial Corp. 57,457 3,277,347 Weyerhaeuser Co. 55,334 3,234,272 Deere & Co. 60,481 3,224,242 Corning Inc./1/ 336,572 3,170,508 Sears, Roebuck and Co. 71,490 3,126,258 Entergy Corp. 57,634 3,120,881 CVS Corp. 99,539 3,091,681 Chubb Corp. 47,398 3,075,182 American Electric Power Co. Inc. 99,799 2,993,970 Staples Inc./1/ 123,938 2,943,528 Raytheon Co. 104,667 2,930,676 FPL Group Inc. 46,297 2,925,970 Masco Corp. 119,459 2,924,356 ConAgra Foods Inc. 135,677 2,881,779 WellPoint Health Networks Inc./1/ 37,118 2,861,055 Danaher Corp. 38,606 2,851,439 Apache Corp. 40,830 2,831,152 Devon Energy Corp. 58,623 2,825,042 Franklin Resources Inc. 63,801 2,820,642 Equity Office Properties Trust 101,444 2,792,753 Progress Energy Inc. 61,544 2,736,246 KeyCorp 106,745 2,729,470 Burlington Northern Santa Fe Corp. 94,145 2,717,966 Sun Microsystems Inc./1/ 815,992 2,700,934 Countrywide Financial Corp. 34,379 2,691,188 Halliburton Co. 110,833 2,687,700 XL Capital Ltd. Class A 34,492 2,671,060 Agilent Technologies Inc./1/ 119,067 2,632,571 Anadarko Petroleum Corp. 63,009 2,631,256 FirstEnergy Corp. 82,327 2,626,231 Air Products & Chemicals Inc. 57,422 2,589,732 Safeway Inc./1/ 111,501 2,557,833 Principal Financial Group Inc. 82,336 2,551,593 Marriott International Inc. Class A 58,889 2,533,994 SouthTrust Corp. 85,854 2,523,249 Baker Hughes Inc. 85,050 2,516,629 PG&E Corp./1/ 104,170 2,489,663 Anthem Inc./1/ 34,902 2,489,560 Hancock (John) Financial Services Inc. 73,191 2,473,856 Burlington Resources Inc. 50,727 2,445,041 Electronic Data Systems Corp. 120,849 2,441,150 McKesson Corp. 73,144 2,434,964 Public Service Enterprise Group Inc. 57,060 2,396,520 Aetna Inc. 38,904 2,374,311 Northern Trust Corp. 55,673 2,362,762 ACE Ltd. 70,347 2,327,079 Ingersoll-Rand Co. Class A 43,306 2,314,273 Consolidated Edison Inc. 56,640 2,308,646 PPG Industries Inc. 42,994 2,245,147 Marathon Oil Corp. 78,250 2,230,125 PACCAR Inc. 29,478 2,201,712 Coca-Cola Enterprises Inc. 114,138 2,175,470 Johnson Controls Inc. 22,639 2,141,649 Archer-Daniels-Midland Co. 163,267 2,140,430 St. Paul Companies Inc. 57,482 2,128,558 Simon Property Group Inc. 48,621 2,118,903 Fortune Brands Inc. 36,790 2,087,832 Micron Technology Inc./1/ 154,128 2,068,398 Comerica Inc. 44,366 2,067,456 Unocal Corp. 65,164 2,053,969 Equity Residential 69,192 2,025,942 MBIA Inc. 36,639 2,014,046 Limited Brands Inc. 131,833 1,988,042 Federated Department Stores Inc. 47,226 1,978,769 TXU Corp. 81,709 1,925,064 Regions Financial Corp. 56,090 1,921,083 24 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P 500/BARRA VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- Synovus Financial Corp. 76,666 $ 1,915,883 Albertson's Inc. 92,895 1,910,850 Apple Computer Inc./1/ 92,290 1,903,943 Loews Corp. 46,818 1,890,043 SunGard Data Systems Inc./1/ 71,821 1,889,611 AmSouth Bancorp 88,954 1,887,604 Bear Stearns Companies Inc. (The) 25,205 1,885,334 Rohm & Haas Co. 56,074 1,875,675 PPL Corp. 44,672 1,829,318 Norfolk Southern Corp. 98,433 1,821,010 Marshall & Ilsley Corp. 57,517 1,812,936 Dover Corp. 51,126 1,808,327 May Department Stores Co. (The) 72,836 1,793,951 Computer Sciences Corp./1/ 47,488 1,784,124 Fiserv Inc./1/ 49,012 1,775,705 Medco Health Solutions Inc./1/ 68,267 1,770,163 Starwood Hotels & Resorts Worldwide Inc. 50,641 1,762,307 Ameren Corp. 40,905 1,755,234 Charter One Financial Inc. 57,011 1,744,537 Ambac Financial Group Inc. 26,820 1,716,480 Tenet Healthcare Corp./1/ 118,183 1,711,290 PeopleSoft Inc./1/ 92,827 1,688,523 Kinder Morgan Inc. 31,164 1,683,168 Eaton Corp. 18,985 1,682,451 AON Corp. 79,182 1,650,945 Cinergy Corp. 44,678 1,639,683 Cincinnati Financial Corp. 40,735 1,627,771 Transocean Inc./1/ 81,064 1,621,280 Quest Diagnostics Inc./1/ 26,701 1,619,149 Jefferson-Pilot Corp. 36,011 1,598,168 Lincoln National Corp. 45,057 1,594,117 Union Planters Corp. 50,067 1,584,120 Monsanto Co. 66,006 1,580,184 CIGNA Corp. 35,385 1,579,940 CSX Corp. 53,948 1,577,979 Edison International/1/ 82,248 1,570,937 DTE Energy Co. 42,502 1,567,899 Xcel Energy Inc. 100,581 1,555,988 Hilton Hotels Corp. 95,611 1,550,810 Sempra Energy 52,686 1,546,861 Georgia-Pacific Corp. 63,716 1,544,476 AmerisourceBergen Corp. 28,284 1,528,750 Eastman Kodak Co. 72,548 1,519,155 Constellation Energy Group Inc. 42,190 1,509,558 Newell Rubbermaid Inc. 69,560 1,507,365 National Semiconductor Corp./1/ 46,466 1,500,387 Penney (J.C.) Co. Inc. (Holding Co.) 68,637 1,466,773 Pepsi Bottling Group Inc. 68,527 1,410,286 Genuine Parts Co. 43,985 1,406,640 KeySpan Corp. 40,063 1,405,410 Interpublic Group of Companies Inc. 98,831 1,395,494 Nabors Industries Ltd./1/ 37,026 1,379,589 Molex Inc. 48,227 1,378,810 ProLogis 45,310 1,370,628 First Tennessee National Corp. 31,925 1,355,535 North Fork Bancorp Inc. 38,963 1,353,964 Textron Inc. 34,106 1,345,482 Parker Hannifin Corp. 30,013 1,341,581 NiSource Inc. 66,492 1,328,510 Health Management Associates Inc. Class A 60,411 1,317,564 Jabil Circuit Inc./1/ 50,402 1,312,972 JDS Uniphase Corp./1/ 362,653 1,305,551 MGIC Investment Corp. 24,949 1,299,094 MeadWestvaco Corp. 50,886 1,297,593 Novellus Systems Inc./1/ 38,265 1,291,444 Delphi Corp. 141,857 1,283,806 Zions Bancorporation 22,818 1,274,385 Sanmina-SCI Corp./1/ 129,160 1,252,852 AutoNation Inc./1/ 70,456 1,235,798 SAFECO Corp. 34,906 1,230,786 Williams Companies Inc. 130,592 1,230,177 Solectron Corp./1/ 209,993 1,228,459 CenturyTel Inc. 36,240 1,228,174 Rockwell Automation Inc. 46,753 1,227,266 Centex Corp. 15,704 1,223,028 EOG Resources Inc. 29,123 1,215,594 SCHEDULES OF INVESTMENTS 25 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P 500/BARRA VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- Siebel Systems Inc./1/ 124,146 $ 1,206,699 Torchmark Corp. 29,141 1,184,290 Plum Creek Timber Co. Inc. 46,521 1,183,494 Applera Corp. - Applied Biosystems Group 52,939 1,181,069 Scientific-Atlanta Inc. 37,671 1,173,452 Harrah's Entertainment Inc. 27,737 1,168,005 Noble Corp./1/ 33,958 1,154,232 Huntington Bancshares Inc. 57,893 1,145,702 Amerada Hess Corp. 22,739 1,139,224 Kerr-McGee Corp. 25,427 1,135,061 Watson Pharmaceuticals Inc./1/ 27,179 1,133,093 Cooper Industries Ltd. 23,407 1,124,238 Grainger (W.W.) Inc. 23,289 1,107,392 El Paso Corp. 151,397 1,105,198 Office Depot Inc./1/ 78,417 1,101,759 UNUMProvident Corp. 74,170 1,095,491 Sherwin-Williams Co. (The) 37,145 1,092,434 VF Corp. 27,237 1,059,792 Pulte Homes Inc. 15,571 1,058,984 Leggett & Platt Inc. 48,829 1,056,171 Phelps Dodge Corp./1/ 22,546 1,055,153 Vulcan Materials Co. 25,791 1,029,319 Advanced Micro Devices Inc./1/ 87,205 968,848 Jones Apparel Group Inc. 32,359 968,505 Liz Claiborne Inc. 27,517 936,954 Apartment Investment & Management Co. Class A 23,693 932,556 King Pharmaceuticals Inc./1/ 61,235 927,710 Wendy's International Inc. 28,581 923,166 Nucor Corp. 19,688 903,285 Thermo Electron Corp./1/ 40,911 887,769 Engelhard Corp. 32,022 886,049 Teradyne Inc./1/ 47,227 878,422 Alberto-Culver Co. Class B 14,923 877,771 LSI Logic Corp./1/ 95,722 860,541 Providian Financial Corp./1/ 72,954 860,128 American Power Conversion Corp. 49,834 854,155 Nordstrom Inc. 34,403 853,538 R.J. Reynolds Tobacco Holdings Inc. 21,495 849,912 Janus Capital Group Inc. 60,506 845,269 Hasbro Inc. 43,961 821,191 Pactiv Corp./1/ 40,379 818,886 Pinnacle West Capital Corp. 22,993 816,252 BMC Software Inc./1/ 58,459 814,334 SUPERVALU Inc. 33,940 809,808 Citizens Communications Co./1/ 71,742 804,228 Darden Restaurants Inc. 42,063 799,197 Sabre Holdings Corp. 36,500 784,385 Sunoco Inc. 19,455 782,480 Fluor Corp. 20,533 766,497 NCR Corp./1/ 23,994 760,370 Humana Inc./1/ 40,644 733,624 Goodrich (B.F.) Co. 30,006 727,345 KB Home 12,004 716,159 Donnelley (R.R.) & Sons Co. 28,751 715,037 Tellabs Inc./1/ 104,784 711,483 Comverse Technology Inc./1/ 47,390 708,954 CenterPoint Energy Inc. 77,291 708,758 CIENA Corp./1/ 119,124 704,023 Pall Corp. 31,106 698,019 Symbol Technologies Inc. 58,163 695,048 Manor Care Inc. 22,756 682,680 Convergys Corp./1/ 36,841 675,664 Temple-Inland Inc. 13,720 666,106 Eastman Chemical Co. 19,618 657,203 Toys R Us Inc./1/ 53,978 649,355 TECO Energy Inc. 46,688 645,228 Stanley Works (The) 21,505 634,828 Bausch & Lomb Inc. 13,496 595,848 Bemis Co. 13,426 594,772 Rowan Companies Inc./1/ 23,803 585,078 Brunswick Corp. 22,764 584,580 Dana Corp. 37,586 579,952 Ashland Inc. 17,306 568,502 Allied Waste Industries Inc./1/ 52,637 568,480 Tektronix Inc./1/ 21,576 534,006 Compuware Corp./1/ 95,350 511,076 Reebok International Ltd. 15,167 507,033 26 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P 500/BARRA VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- Circuit City Stores Inc. 52,887 $ 504,013 Novell Inc./1/ 92,649 493,819 Coors (Adolf) Company Class B 9,177 493,356 PerkinElmer Inc. 31,805 486,935 United States Steel Corp. 26,315 483,670 Autodesk Inc. 28,079 477,905 Calpine Corp./1/ 97,672 477,616 Andrew Corp./1/ 38,704 475,672 Ryder System Inc. 16,115 472,492 ADC Telecommunications Inc./1/ 201,750 470,077 Gateway Inc./1/ 82,976 469,644 Cummins Inc. 10,469 465,138 Big Lots Inc./1/ 29,364 464,245 Delta Air Lines Inc. 30,973 411,941 Snap-On Inc. 14,773 408,473 Boise Cascade Corp. 14,611 403,264 Nicor Inc. 11,075 389,175 Peoples Energy Corp. 9,244 382,517 Applied Micro Circuits Corp./1/ 76,745 373,748 Louisiana-Pacific Corp./1/ 26,176 360,705 Crane Co. 14,889 348,551 Winn-Dixie Stores Inc. 35,786 345,335 Dynegy Inc. Class A/1/ 95,856 345,082 American Greetings Corp. Class A/1/ 16,513 320,848 Dillards Inc. Class A 21,304 297,830 Goodyear Tire & Rubber Co. (The) 44,788 294,257 Cooper Tire & Rubber Co. 18,509 293,738 Allegheny Energy Inc./1/ 31,568 288,532 Worthington Industries Inc. 21,504 270,090 CMS Energy Corp. 35,783 263,721 Great Lakes Chemical Corp. 12,520 251,777 Thomas & Betts Corp./1/ 14,596 231,347 Visteon Corp. 33,984 224,294 Power-One Inc./1/ 20,856 214,608 Parametric Technology Corp./1/ 68,091 212,444 Allegheny Technologies Inc. 20,965 137,321 TOTAL COMMON STOCKS (Cost: $1,230,697,941) 1,158,168,193 SHARES OR SECURITY PRINCIPAL VALUE --------------------------------------------------------------------- SHORT TERM INVESTMENTS - 6.26% MONEY MARKET FUNDS - 3.77% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares/2/,/3/ 29,274,460 $ 29,274,460 Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares/2/,/3/ 10,535,257 10,535,257 BlackRock Temp Cash Money Market Fund/2/ 467,997 467,997 Short Term Investment Co. - Liquid Assets Money Market Portfolio/2/ 2,483,940 2,483,940 Short Term Investment Co. - Prime Money Market Portfolio, Institutional Shares/2/ 957,751 957,751 43,719,405 FLOATING RATE NOTES - 1.44% Beta Finance Inc. 1.08%, 05/20/04/2/ $ 478,875 478,830 1.08%, 09/15/04/2/ 957,751 957,660 1.17%, 08/23/04/2/ 478,875 479,243 CC USA Inc. 1.06%, 05/24/04/2/ 957,751 957,689 1.08%, 04/19/04/2/ 421,410 421,399 1.12%, 07/15/04/2/ 478,875 479,011 Dorada Finance Inc. 1.08%, 05/20/04/2/ 957,751 957,660 1.24%, 08/09/04/2/ 239,438 239,407 Five Finance Inc. 1.09%, 04/15/04/2/ 478,875 478,875 HBOS Treasury Services PLC 1.13%, 06/24/08/2/ 957,751 957,751 Holmes Financing PLC 1.08%, 04/15/04/2/ 191,550 191,550 SCHEDULES OF INVESTMENTS 27 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P 500/BARRA VALUE INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE --------------------------------------------------------------------- K2 USA LLC 1.08%, 08/16/04/2/ $ 239,438 $ 239,406 1.08%, 09/27/04/2/ 1,034,371 1,034,218 1.09%, 04/13/04/2/ 478,875 478,863 1.09%, 05/17/04/2/ 478,875 478,860 Links Finance LLC 1.05%, 07/20/04/2/ 383,100 383,039 1.08%, 05/04/04/2/ 478,875 478,861 1.08%, 06/28/04/2/ 478,875 478,805 1.09%, 03/29/04/2/ 478,875 478,875 Nationwide Building Society 1.08%, 07/23/04/2/ 718,313 718,313 Sigma Finance Inc. 1.05%, 07/20/04/2/ 478,875 478,798 1.07%, 10/15/03/2/ 957,751 957,747 1.07%, 07/01/04/2/ 478,875 478,786 1.24%, 08/06/04/2/ 239,438 239,417 Tango Finance Corp. 1.05%, 07/15/04/2/ 287,325 287,250 1.06%, 07/06/04/2/ 287,325 287,303 WhistleJacket Capital LLC 1.08%, 09/15/04/2/ 478,875 478,784 White Pine Finance LLC 1.08%, 05/17/04/2/ 574,650 574,650 1.08%, 07/06/04/2/ 574,650 574,608 1.08%, 08/26/04/2/ 478,875 478,809 1.09%, 04/20/04/2/ 478,875 478,875 16,683,342 COMMERCIAL PAPER - 0.75% Amsterdam Funding Corp. 1.06%, 10/16/03/2/ 454,932 454,731 Blue Ridge Asset Funding Corp. 1.05%, 10/17/03/2/ 478,875 478,652 Edison Asset Securitization 1.07%, 10/23/03/2/ 900,286 899,697 Gemini Securitization Corp. 1.05%, 10/17/03/2/ 335,213 335,056 Greenwich Funding Corp. 1.06%, 10/16/03/2/ 565,073 564,823 Jupiter Securitization Corp. 1.05%, 10/20/03/2/ 478,875 478,610 New Center Asset Trust 1.06%, 10/22/03/2/ 478,875 478,579 Park Avenue Receivables Corp. 1.05%, 10/20/03/2/ 478,875 478,610 Preferred Receivables Funding Corp. 1.06%, 10/08/03/2/ 478,875 478,777 Receivables Capital Corp. 1.05%, 10/15/03/2/ 321,881 321,749 Sydney Capital Corp. 1.07%, 10/17/03/2/ 387,889 387,705 UBS Finance (Delaware) Inc. 1.03%, 10/08/03/2/ 957,751 957,559 1.05%, 10/15/03/2/ 478,875 478,680 1.11%, 10/01/03/2/ 1,915,501 1,915,501 8,708,729 TIME DEPOSITS - 0.23% Abbey National Treasury Services PLC 1.15%, 10/01/03/2/ 478,875 478,875 Canadian Imperial Bank of Commerce 1.06%, 10/08/03/2/ 239,438 239,438 1.08%, 10/30/03/2/ 383,100 383,100 1.37%, 08/26/04/2/ 957,751 957,751 Toronto-Dominion Bank 1.33%, 08/23/04/2/ 622,538 622,258 2,681,422 28 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P 500/BARRA VALUE INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE --------------------------------------------------------------------- REPURCHASE AGREEMENTS - 0.07% Lehman Brothers Inc. 1.10%, 10/01/03/2/ $ 766,200 $ 766,200 766,200 TOTAL SHORT TERM INVESTMENTS (Cost: $72,559,098) 72,559,098 TOTAL INVESTMENTS IN SECURITIES - 106.18% (Cost $1,303,257,039) 1,230,727,291 Other Assets, Less Liabilities - (6.18%) (71,653,869) -------------- NET ASSETS - 100.00% $1,159,073,422 ============== /1/ Non-income earning securities. /2/ All or a portion of this security represents investments of securities lending collateral. /3/ Issuer is an affiliate of the Fund's investment advisor. See Note 2. SEE NOTES TO FINANCIAL STATEMENTS. SCHEDULES OF INVESTMENTS 29 SCHEDULE OF INVESTMENTS (Unaudited) iSHARES S&P MIDCAP 400 INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- COMMON STOCKS - 99.96% Gilead Sciences Inc./1/ 253,616 $ 14,184,743 M&T Bank Corp. 150,666 13,153,142 Mylan Laboratories Inc. 225,380 8,710,937 Affiliated Computer Services Inc. Class A/1/ 167,376 8,149,537 Washington Post Company (The) Class B 12,008 7,985,320 Lennar Corp. Class A 92,665 7,208,410 Sovereign Bancorp Inc. 367,549 6,818,034 Murphy Oil Corp. 115,561 6,789,209 IDEC Pharmaceuticals Corp./1/ 195,598 6,484,074 National Commerce Financial Corp. 257,749 6,412,795 D.R. Horton Inc. 195,620 6,396,774 SanDisk Corp./1/ 98,042 6,249,197 Coach Inc./1/ 114,439 6,248,369 Weatherford International Ltd./1/ 165,207 6,241,520 Tyson Foods Inc. Class A 441,564 6,239,299 Microchip Technology Inc. 257,814 6,172,067 Dean Foods Co./1/ 195,062 6,052,774 CDW Corp. 104,253 6,019,568 Synopsys Inc./1/ 195,440 6,013,689 Legg Mason Inc. 82,711 5,971,734 Mohawk Industries Inc./1/ 83,463 5,952,581 Millennium Pharmaceuticals Inc./1/ 375,874 5,784,701 Barr Laboratories Inc./1/ 84,041 5,732,437 Banknorth Group Inc. 203,101 5,731,510 Career Education Corp./1/ 124,771 5,652,126 Valero Energy Corp. 144,143 5,516,353 New York Community Bancorp Inc. 174,378 5,494,651 DST Systems Inc./1/ 145,764 5,480,726 Compass Bancshares Inc. 158,368 5,476,365 AdvancePCS/1/ 115,816 5,277,735 Everest Re Group Ltd. 69,888 5,252,782 L-3 Communications Holdings Inc./1/ 121,302 5,246,311 Radian Group Inc. 117,752 5,228,189 GreenPoint Financial Corp. 173,059 5,167,542 Fidelity National Financial Inc. 169,715 5,101,633 ENSCO International Inc. 188,549 5,056,884 Old Republic International Corp. 152,035 5,030,838 Patterson Dental Co./1/ 85,784 4,939,443 Varian Medical Systems Inc./1/ 85,924 4,938,912 JetBlue Airways Corp./1/ 80,989 4,937,899 XTO Energy Inc. 231,234 4,853,602 IVAX Corp./1/ 246,242 4,826,343 Dollar Tree Stores Inc./1/ 143,919 4,821,286 SCANA Corp. 139,793 4,787,910 Health Net Inc./1/ 146,237 4,631,326 Diebold Inc. 91,254 4,622,015 Omnicare Inc. 127,533 4,598,840 Cadence Design Systems Inc./1/ 341,676 4,578,458 Republic Services Inc. 202,180 4,577,355 Lincare Holdings Inc./1/ 124,090 4,547,898 Smith International Inc./1/ 126,140 4,538,517 Expeditors International Washington Inc. 131,726 4,532,692 Commerce Bancorp Inc. 94,261 4,516,045 Wisconsin Energy Corp. 147,432 4,506,996 Ross Stores Inc. 96,504 4,473,925 DENTSPLY International Inc. 99,411 4,457,589 Lear Corp./1/ 84,540 4,450,186 Hillenbrand Industries Inc. 77,888 4,394,441 SPX Corp./1/ 96,536 4,371,150 TCF Financial Corp. 90,114 4,320,966 Oxford Health Plans Inc./1/ 104,570 4,319,787 SEI Investment Co. 132,246 4,297,995 CarMax Inc./1/ 130,218 4,252,920 E*TRADE Group Inc./1/ 455,990 4,222,467 Intersil Corp. Class A/1/ 173,962 4,140,296 Whole Foods Market Inc./1/ 74,821 4,128,623 Energy East Corp. 183,501 4,115,927 Telephone & Data Systems Inc. 72,306 4,088,181 Brinker International Inc./1/ 122,212 4,076,992 PETsMART Inc./1/ 178,108 4,043,052 Constellation Brands Inc./1/ 131,448 4,007,850 Hormel Foods Corp. 174,124 4,001,370 Mercantile Bankshares Corp. 100,011 4,000,440 Hibernia Corp. Class A 196,720 3,985,547 Coventry Health Care Inc./1/ 75,364 3,974,697 30 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P MIDCAP 400 INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- CH Robinson Worldwide Inc. 106,475 $ 3,961,935 Williams-Sonoma Inc./1/ 146,356 3,948,685 Energizer Holdings Inc./1/ 106,402 3,912,402 Dun & Bradstreet Corp./1/ 93,050 3,865,297 Edwards (A.G.) Inc. 100,242 3,850,295 Westwood One Inc./1/ 127,526 3,850,010 Pioneer Natural Resources Co./1/ 148,324 3,776,329 PMI Group Inc. (The) 111,846 3,774,803 Pepco Holdings Inc. 215,125 3,717,360 Neuberger Berman Inc. 88,296 3,696,954 Liberty Property Trust 99,761 3,689,162 ChoicePoint Inc./1/ 108,385 3,630,898 Manpower Inc. 97,834 3,629,641 Pogo Producing Co. 79,966 3,620,860 Universal Health Services Inc. Class B/1/ 73,027 3,611,185 Fastenal Co. 95,503 3,610,013 Berkley (W.R.) Corp. 104,654 3,585,446 Fair Isaac Corp. 60,667 3,576,926 Outback Steakhouse Inc. 94,447 3,576,708 Lam Research Corp./1/ 159,870 3,541,120 Vishay Intertechnology Inc./1/ 201,260 3,526,075 Associated Bancorp 92,722 3,504,892 Beckman Coulter Inc. 76,851 3,499,795 Ceridian Corp./1/ 186,754 3,477,359 Belo (A.H.) Corp. 142,979 3,467,241 Park Place Entertainment Corp./1/ 380,705 3,430,152 Michaels Stores Inc. 83,975 3,422,821 Abercrombie & Fitch Co. Class A/1/ 123,091 3,410,852 Gentex Corp./1/ 96,169 3,350,528 Rent-A-Center Inc./1/ 103,300 3,336,590 Chico's FAS Inc./1/ 108,759 3,332,376 Storage Technology Corp./1/ 137,892 3,328,713 Gallagher (Arthur J.) & Co. 114,030 3,224,768 Questar Corp. 104,473 3,218,813 Equitable Resources Inc. 78,240 3,215,664 MDU Resources Group Inc. 95,015 3,209,607 Cooper Cameron Corp./1/ 68,947 3,186,041 NSTAR 66,865 3,176,088 AMB Property Corp. 102,815 3,167,730 Corinthian Colleges Inc./1/ 55,225 3,156,661 Jacobs Engineering Group Inc./1/ 69,803 3,148,115 GTECH Holdings Corp. 73,034 3,129,507 Astoria Financial Corp. 101,096 3,123,866 First Health Group Corp./1/ 119,245 3,118,257 City National Corp. 61,131 3,115,236 Henry Schein Inc./1/ 54,642 3,098,201 Alliant Energy Corp. 138,975 3,057,450 International Rectifier Corp./1/ 80,645 3,019,349 Northeast Utilities 168,416 3,018,015 ALLETE Inc. 108,996 2,984,310 Harris Corp. 83,342 2,982,810 ADTRAN Inc. 48,603 2,973,532 Valspar Corp. (The) 63,647 2,969,133 Mandalay Resort Group 74,827 2,963,897 International Speedway Corp. Class A 67,000 2,940,630 Donaldson Co. Inc. 54,528 2,939,059 Sepracor Inc./1/ 106,647 2,937,058 Bowater Inc. 69,828 2,936,966 Eaton Vance Corp. 86,918 2,910,015 Pharmaceutical Resources Inc./1/ 42,564 2,903,716 99 Cents Only Stores/1/ 89,780 2,903,485 Entercom Communications Corp./1/ 64,638 2,897,075 SICOR Inc./1/ 149,761 2,887,392 Pride International Inc./1/ 170,110 2,883,365 Triad Hospitals Inc./1/ 94,896 2,873,451 Mack-Cali Realty Corp. 73,150 2,867,480 New Plan Excel Realty Trust 122,869 2,862,848 Leucadia National Corp. 75,083 2,841,892 Krispy Kreme Doughnuts Inc./1/ 73,174 2,817,199 Toll Brothers Inc./1/ 91,987 2,798,245 Silicon Laboratories Inc./1/ 62,024 2,787,979 Network Associates Inc./1/ 201,939 2,778,681 United Dominion Realty Trust Inc. 151,157 2,767,685 Hospitality Properties Trust 78,804 2,764,444 Patterson-UTI Energy Inc./1/ 101,859 2,757,323 3Com Corp./1/ 463,669 2,735,647 Hubbell Inc. Class B 74,934 2,734,342 DPL Inc. 159,278 2,731,618 Noble Energy Inc. 70,999 2,719,262 HON Industries Inc. 72,762 2,689,284 SCHEDULES OF INVESTMENTS 31 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P MIDCAP 400 INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- Community Health Systems Inc./1/ 123,848 $ 2,687,502 Certegy Inc. 83,508 2,681,442 Sonoco Products Co. 122,132 2,680,797 Puget Energy Inc. 118,588 2,659,929 Smucker (J.M.) Co. (The) 63,001 2,656,122 Brown & Brown Inc. 86,219 2,653,821 Viad Corp. 111,072 2,652,399 Great Plains Energy Inc. 87,122 2,641,539 Integrated Circuit Systems Inc./1/ 87,764 2,636,431 Smithfield Foods Inc./1/ 137,159 2,633,453 FirstMerit Corp. 106,382 2,631,891 Cypress Semiconductor Corp./1/ 148,745 2,629,812 PepsiAmericas Inc. 181,400 2,628,486 National Instruments Corp. 65,002 2,616,330 Lyondell Chemical Co. 204,143 2,608,948 Dial Corp. (The) 120,789 2,601,795 Hunt (J.B.) Transport Services Inc./1/ 99,638 2,592,581 Unitrin Inc. 85,034 2,590,136 Protective Life Corp. 86,769 2,590,055 Education Management Corp./1/ 44,837 2,585,750 Investors Financial Services Corp. 82,159 2,579,793 Wilmington Trust Corp. 82,821 2,547,574 Packaging Corporation of America/1/ 131,087 2,545,710 Neiman-Marcus Group Inc. Class A/1/ 59,911 2,498,289 O'Reilly Automotive Inc./1/ 67,908 2,496,977 Stericycle Inc./1/ 52,838 2,492,368 Avnet Inc./1/ 150,466 2,485,698 Pentair Inc. 62,156 2,478,160 Bank of Hawaii Corp. 73,771 2,477,230 Waddell & Reed Financial Inc. Class A 104,221 2,456,489 Fairchild Semiconductor International Inc. Class A/1/ 147,728 2,449,330 First American Corp. 97,704 2,432,830 OGE Energy Corp. 107,362 2,425,308 Hovnanian Enterprises Inc. Class A/1/ 37,642 2,423,016 Cullen/Frost Bankers Inc. 64,811 2,412,914 Apogent Technologies Inc./1/ 115,574 2,410,874 Independence Community Bank Corp. 68,749 2,401,403 Swift Transportation Co. Inc./1/ 105,234 2,387,759 Atmel Corp./1/ 590,314 2,367,159 Reynolds & Reynolds Co. (The) Class A 85,692 2,360,815 Cheesecake Factory (The)/1/ 64,795 2,343,635 National Fuel Gas Co. 102,418 2,340,251 Precision Castparts Corp. 66,619 2,338,327 HCC Insurance Holdings Inc. 80,216 2,332,681 Arrow Electronics Inc./1/ 126,711 2,330,215 BorgWarner Inc. 34,020 2,308,257 PacifiCare Health Systems Inc./1/ 47,296 2,308,045 Webster Financial Corp. 57,609 2,297,447 AGL Resources Inc. 80,395 2,264,727 Colonial BancGroup Inc. (The) 156,816 2,264,423 Advanced Fibre Communications Inc./1/ 107,878 2,262,202 Martin Marietta Materials Inc. 61,604 2,245,466 Roslyn Bancorp Inc. 95,356 2,238,959 Vectren Corp. 94,138 2,223,540 Cabot Corp. 77,854 2,219,618 Washington Federal Inc. 87,696 2,210,816 Tech Data Corp./1/ 71,344 2,200,962 Applebee's International Inc. 69,705 2,194,313 Lee Enterprises Inc. 56,247 2,175,071 CBRL Group Inc. 61,220 2,172,086 Pier 1 Imports Inc. 112,645 2,167,290 Graco Inc. 57,678 2,165,809 Tidewater Inc. 76,426 2,162,856 Teleflex Inc. 49,761 2,161,120 RF Micro Devices Inc./1/ 232,120 2,156,395 Rayonier Inc. 52,789 2,143,233 Peabody Energy Corp. 68,235 2,140,532 Overture Services Inc./1/ 80,709 2,137,981 Philadelphia Suburban Corp. 87,789 2,113,959 Edwards Lifesciences Corp./1/ 77,991 2,111,996 Lubrizol Corp. 64,978 2,108,536 Titan Corp. (The)/1/ 101,152 2,108,008 StanCorp Financial Group Inc. 36,631 2,104,451 Herman Miller Inc. 91,918 2,092,973 32 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P MIDCAP 400 INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- DeVry Inc./1/ 88,259 $ 2,088,208 Varco International Inc./1/ 122,954 2,079,152 Cytyc Corp./1/ 137,936 2,074,557 Barnes & Noble Inc./1/ 81,622 2,074,015 Polycom Inc./1/ 124,743 2,071,981 Saks Inc./1/ 179,443 2,068,978 Claire's Stores Inc. 61,677 2,063,712 Harte-Hanks Inc. 111,784 2,061,297 Hawaiian Electric Industries Inc. 47,194 2,054,355 Sybase Inc./1/ 119,588 2,034,192 AmeriCredit Corp./1/ 197,168 2,030,830 Tootsie Roll Industries Inc. 65,158 2,019,898 Steris Corp./1/ 87,163 2,006,492 CNF Inc. 62,459 2,001,811 CheckFree Corp./1/ 99,561 1,991,220 BISYS Group Inc. (The)/1/ 150,880 1,984,072 Harsco Corp. 51,112 1,966,279 Macromedia Inc./1/ 78,840 1,950,502 Ruby Tuesday Inc. 80,766 1,947,268 National-Oilwell Inc./1/ 106,998 1,940,944 Henry (Jack) & Associates Inc. 110,396 1,919,786 MONY Group Inc. (The) 58,977 1,919,701 ONEOK Inc. 94,792 1,911,955 American Financial Group Inc. 87,892 1,911,651 Timberland Co. Class A/1/ 44,761 1,909,504 RPM International Inc. 145,213 1,896,482 Apria Healthcare Group Inc./1/ 68,782 1,883,251 Werner Enterprises Inc. 80,671 1,848,173 Borders Group Inc./1/ 97,568 1,845,987 Westamerica Bancorp 41,143 1,828,806 Media General Inc. Class A 29,448 1,799,273 Lancaster Colony Corp. 45,240 1,799,195 Cytec Industries Inc./1/ 49,183 1,795,179 ICN Pharmaceuticals Inc. 104,504 1,793,289 AMETEK Inc. 41,692 1,786,919 Extended Stay America Inc./1/ 119,547 1,784,837 Church & Dwight Co. Inc. 50,852 1,779,311 FMC Technologies Inc./1/ 82,818 1,773,962 Avocent Corp./1/ 58,511 1,772,298 Charles River Laboratories International Inc./1/ 57,449 1,763,110 Readers Digest Association Inc. (The) 124,641 1,743,728 York International Corp. 50,150 1,734,689 Valassis Communications Inc./1/ 65,667 1,733,609 Covance Inc./1/ 77,418 1,732,615 Cabot Microelectronics Corp./1/ 31,041 1,730,225 McDATA Corp. Class A/1/ 144,512 1,729,809 Cree Inc./1/ 92,507 1,713,230 Provident Financial Group Inc. 61,243 1,712,354 Semtech Corp./1/ 92,161 1,701,292 Acxiom Corp./1/ 107,391 1,692,482 Furniture Brands International Inc./1/ 70,135 1,690,253 Carlisle Companies Inc. 38,720 1,688,966 WPS Resources Corp. 40,934 1,686,481 BJ's Wholesale Club Inc./1/ 87,035 1,685,868 WGL Holdings Inc. 61,014 1,682,766 AmerUs Group Co. 49,345 1,677,730 Westar Energy Inc. 90,634 1,672,197 Legato Systems Inc./1/ 148,399 1,663,553 Kennametal Inc. 44,443 1,662,168 Helmerich & Payne Inc. 63,039 1,647,839 Airgas Inc. 92,442 1,645,468 Protein Design Labs Inc./1/ 117,572 1,629,548 Integrated Device Technology Inc./1/ 131,160 1,629,007 IndyMac Bancorp Inc. 69,947 1,620,672 AGCO Corp./1/ 94,457 1,618,992 Forest Oil Corp./1/ 67,192 1,609,248 Allmerica Financial Corp./1/ 66,778 1,589,984 Western Gas Resources Inc. 41,642 1,582,396 United Rentals Inc./1/ 97,150 1,563,144 Grant Prideco Inc./1/ 153,293 1,562,056 Blyth Inc. 57,877 1,561,521 Cincinnati Bell Inc./1/ 306,664 1,560,920 ArvinMeritor Inc. 85,993 1,531,535 Mentor Graphics Corp./1/ 86,739 1,520,535 Trinity Industries Inc. 58,067 1,501,032 Sylvan Learning Systems Inc./1/ 54,307 1,481,495 Arch Coal Inc. 66,364 1,473,944 Alexander & Baldwin Inc. 52,341 1,469,735 Imation Corp. 44,863 1,464,777 SCHEDULES OF INVESTMENTS 33 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P MIDCAP 400 INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- Duquesne Light Holdings Inc. 94,454 $ 1,464,037 Scholastic Corp./1/ 49,403 1,422,312 PNM Resources Inc. 50,712 1,421,964 Micrel Inc./1/ 116,619 1,421,586 Albemarle Corp. 51,724 1,419,824 Flowserve Corp./1/ 69,765 1,416,229 KEMET Corp./1/ 109,095 1,389,870 Emmis Communications Corp./1/ 68,224 1,376,760 Greater Bay Bancorp 65,730 1,367,184 Ascential Software Corp./1/ 73,412 1,360,324 Superior Industries International Inc. 33,487 1,357,898 Callaway Golf Co. 94,816 1,353,024 Varian Inc./1/ 42,866 1,342,563 Activision Inc./1/ 111,037 1,326,892 American Eagle Outfitters Inc./1/ 89,221 1,325,824 Plantronics Inc./1/ 55,263 1,319,128 Universal Corp. 31,169 1,313,150 GATX Corp. 62,004 1,311,385 Minerals Technologies Inc. 25,410 1,293,369 Black Hills Corp. 40,240 1,241,806 Sensient Technologies Corp. 59,129 1,241,709 Dycom Industries Inc./1/ 59,994 1,223,278 IDACORP Inc. 47,923 1,222,036 Copart Inc./1/ 113,077 1,221,232 Quanta Services Inc./1/ 147,002 1,215,707 Silicon Valley Bancshares/1/ 43,521 1,202,485 Vertex Pharmaceuticals Inc./1/ 97,038 1,193,567 Brink's Co. (The) 68,447 1,188,240 LifePoint Hospitals Inc./1/ 48,863 1,175,155 Olin Corp. 73,770 1,167,041 Bob Evans Farms Inc. 43,611 1,164,850 MPS Group Inc./1/ 128,536 1,156,824 Banta Corp. 32,077 1,154,772 VISX Inc./1/ 60,167 1,146,181 Investment Technology Group Inc./1/ 59,237 1,136,166 Macrovision Corp./1/ 61,449 1,134,963 Perrigo Co. 88,481 1,126,363 Overseas Shipholding Group Inc. 43,572 1,126,336 FMC Corp./1/ 44,599 1,123,895 Kelly Services Inc. Class A 44,817 1,117,736 Payless ShoeSource Inc./1/ 86,010 1,112,969 Ohio Casualty Corp./1/ 76,596 1,110,642 LaBranche & Co. Inc. 75,183 1,097,672 Nordson Corp. 42,300 1,095,147 Ferro Corp. 51,068 1,090,812 EGL Inc./1/ 59,137 1,075,111 Potlatch Corp. 36,053 1,071,495 Gartner Inc. Class B/1/ 97,896 1,066,087 RSA Security Inc./1/ 74,050 1,057,434 Keane Inc./1/ 80,320 1,026,490 Modine Manufacturing Co. 43,079 1,025,280 Catalina Marketing Corp./1/ 66,929 1,016,652 Rollins Inc. 56,524 1,008,388 Lattice Semiconductor Corp./1/ 141,658 1,007,188 Granite Construction Inc. 52,032 971,958 CSG Systems International Inc./1/ 65,577 968,572 Longs Drug Stores Corp. 47,188 949,894 TriQuint Semiconductor Inc./1/ 169,207 947,559 Alaska Air Group Inc./1/ 33,485 931,553 IMC Global Inc. 145,242 931,001 Credence Systems Corp./1/ 79,574 915,101 Hanover Compressor Co./1/ 91,896 909,770 Ruddick Corp. 57,866 899,238 Federal Signal Corp. 60,195 896,905 CommScope Inc./1/ 74,205 894,912 Tecumseh Products Co. Class A 23,287 868,838 Interstate Bakeries Corp. 56,650 849,750 Price Communications Corp./1/ 67,801 840,732 Sotheby's Holdings Inc. Class A/1/ 77,115 834,384 Plexus Corp./1/ 53,631 833,426 Aquila Inc./1/ 246,212 832,197 Bandag Inc. 24,458 824,968 Crompton Corp. 140,219 814,672 Wausau-Mosinee Paper Corp. 64,594 788,693 Internet Security Systems Inc./1/ 62,844 785,550 Horace Mann Educators Corp. 53,930 782,524 Transaction Systems Architects Inc. Class A/1/ 44,947 746,570 Sierra Pacific Resources/1/ 146,651 711,257 LTX Corp./1/ 62,684 705,822 Quantum Corp./1/ 224,194 690,518 34 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P MIDCAP 400 INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- Newport Corp./1/ 48,460 $ 683,286 Advent Software Inc./1/ 41,142 661,975 Glatfelter Co. 54,725 644,660 Longview Fibre Co. 63,902 624,323 Six Flags Inc./1/ 115,903 609,650 Carpenter Technology Corp. 28,187 604,329 Wind River Systems Inc./1/ 100,281 570,599 Sequa Corp. Class A/1/ 13,248 567,147 Powerwave Technologies Inc./1/ 79,562 526,700 Retek Inc./1/ 68,269 460,816 Korn/Ferry International/1/ 46,864 386,628 Unifi Inc./1/ 68,347 328,066 Univision Communications Inc. Class A/1/ 1 29 TOTAL COMMON STOCKS (Cost: $1,041,125,967) 1,077,106,102 SHORT TERM INVESTMENTS - 22.26% MONEY MARKET FUNDS - 13.37% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares/2/,/3/ 96,081,909 96,081,909 Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares/2/,/3/ 35,006,490 35,006,490 BlackRock Temp Cash Money Market Fund/2/ 1,555,057 1,555,057 Short Term Investment Co. - Liquid Assets Money Market Portfolio/2/ 8,253,621 8,253,621 Short Term Investment Co. - Prime Money Market Portfolio, Institutional Shares/2/ 3,182,409 3,182,409 144,079,486 SECURITY PRINCIPAL VALUE --------------------------------------------------------------------- FLOATING RATE NOTES - 5.14% Beta Finance Inc. 1.08%, 05/20/04/2/ $ 1,591,204 $ 1,591,053 1.08%, 09/15/04/2/ 3,182,408 3,182,104 1.17%, 08/23/04/2/ 1,591,204 1,592,425 CC USA Inc. 1.06%, 05/24/04/2/ 3,182,408 3,182,204 1.08%, 04/19/04/2/ 1,400,260 1,400,221 1.12%, 07/15/04/2/ 1,591,204 1,591,656 Dorada Finance Inc. 1.08%, 05/20/04/2/ 3,182,408 3,182,106 1.24%, 08/09/04/2/ 795,602 795,500 Five Finance Inc. 1.09%, 04/15/04/2/ 1,591,204 1,591,205 HBOS Treasury Services PLC 1.13%, 06/24/08/2/ 3,182,408 3,182,409 Holmes Financing PLC 1.08%, 04/15/04/2/ 636,482 636,482 K2 USA LLC 1.08%, 08/16/04/2/ 795,602 795,498 1.08%, 09/27/04/2/ 3,437,001 3,436,492 1.09%, 04/13/04/2/ 1,591,204 1,591,163 1.09%, 05/17/04/2/ 1,591,204 1,591,155 Links Finance LLC 1.05%, 07/20/04/2/ 1,272,963 1,272,759 1.08%, 05/04/04/2/ 1,591,204 1,591,158 1.08%, 06/28/04/2/ 1,591,204 1,590,970 1.09%, 03/29/04/2/ 1,591,204 1,591,205 Nationwide Building Society 1.08%, 07/23/04/2/ 2,386,806 2,386,806 Sigma Finance Inc. 1.05%, 07/20/04/2/ 1,591,204 1,590,949 1.07%, 10/15/03/2/ 3,182,408 3,182,396 1.07%, 07/01/04/2/ 1,591,204 1,590,906 1.24%, 08/06/04/2/ 795,602 795,534 Tango Finance Corp. 1.05%, 07/15/04/2/ 954,722 954,473 1.06%, 07/06/04/2/ 954,722 954,648 WhistleJacket Capital LLC 1.08%, 09/15/04/2/ 1,591,204 1,590,900 SCHEDULES OF INVESTMENTS 35 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P MIDCAP 400 INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE --------------------------------------------------------------------- White Pine Finance LLC 1.08%, 05/17/04/2/ $ 1,909,445 $ 1,909,445 1.08%, 07/06/04/2/ 1,909,445 1,909,305 1.08%, 08/26/04/2/ 1,591,204 1,590,983 1.09%, 04/20/04/2/ 1,591,204 1,591,205 55,435,315 COMMERCIAL PAPER - 2.68% Amsterdam Funding Corp. 1.06%, 10/16/03/2/ 1,511,644 1,510,976 Blue Ridge Asset Funding Corp. 1.05%, 10/17/03/2/ 1,591,204 1,590,462 Edison Asset Securitization 1.07%, 10/23/03/2/ 2,991,464 2,989,508 Gemini Securitization Corp. 1.05%, 10/17/03/2/ 1,113,843 1,113,323 Greenwich Funding Corp. 1.06%, 10/16/03/2/ 1,877,621 1,876,792 Jupiter Securitization Corp. 1.05%, 10/20/03/2/ 1,591,204 1,590,322 New Center Asset Trust 1.06%, 10/22/03/2/ 1,591,204 1,590,220 Park Avenue Receivables Corp. 1.05%, 10/20/03/2/ 1,591,204 1,590,322 Preferred Receivables Funding Corp. 1.06%, 10/08/03/2/ 1,591,204 1,590,876 Receivables Capital Corp. 1.05%, 10/15/03/2/ 1,069,544 1,069,107 Sydney Capital Corp. 1.07%, 10/17/03/2/ 1,288,875 1,288,262 UBS Finance (Delaware) Inc. 1.03%, 10/08/03/2/ 3,182,408 3,181,771 1.05%, 10/15/03/2/ 1,591,204 1,590,554 1.11%, 10/01/03/2/ 6,364,816 6,364,816 28,937,311 TIME DEPOSITS - 0.83% Abbey National Treasury Services PLC 1.15%, 10/01/03/2/ 1,591,204 1,591,205 Canadian Imperial Bank of Commerce 1.06%, 10/08/03/2/ 795,602 795,602 1.08%, 10/30/03/2/ 1,272,963 1,272,963 1.37%, 08/26/04/2/ 3,182,408 3,182,409 Toronto-Dominion Bank 1.33%, 08/23/04/2/ 2,068,565 2,067,634 8,909,813 REPURCHASE AGREEMENTS - 0.24% Lehman Brothers Inc. 1.10%, 10/01/03/2/ 2,545,927 2,545,927 2,545,927 TOTAL SHORT TERM INVESTMENTS (Cost: $239,907,852) 239,907,852 TOTAL INVESTMENTS IN SECURITIES - 122.22% (Cost $1,281,033,819) 1,317,013,954 Other Assets, Less Liabilities - (22.22%) (239,436,974) -------------- NET ASSETS - 100.00% $1,077,576,980 ============== /1/ Non-income earning securities. /2/ All or a portion of this security represents investments of securities lending collateral. /3/ Issuer is an affiliate of the Fund's investment advisor. See Note 2. SEE NOTES TO FINANCIAL STATEMENTS. 36 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) iSHARES S&P MIDCAP 400/BARRA GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- COMMON STOCKS - 100.00% Gilead Sciences Inc./1/ 224,306 $ 12,545,435 M&T Bank Corp. 133,180 11,626,614 Mylan Laboratories Inc. 199,324 7,703,873 Affiliated Computer Services Inc. Class A/1/ 148,025 7,207,337 Washington Post Company (The) Class B 10,619 7,061,635 Murphy Oil Corp. 102,314 6,010,948 IDEC Pharmaceuticals Corp./1/ 173,159 5,740,221 SanDisk Corp./1/ 86,742 5,528,935 Weatherford International Ltd./1/ 146,259 5,525,665 Coach Inc./1/ 101,177 5,524,264 Microchip Technology Inc. 228,248 5,464,257 Dean Foods Co./1/ 172,442 5,350,875 Synopsys Inc./1/ 173,022 5,323,887 CDW Corp. 92,166 5,321,665 Legg Mason Inc. 73,223 5,286,701 Barr Laboratories Inc./1/ 74,396 5,074,551 Career Education Corp./1/ 110,453 5,003,521 New York Community Bancorp Inc. 154,146 4,857,140 DST Systems Inc./1/ 128,849 4,844,722 AdvancePCS/1/ 102,505 4,671,153 GreenPoint Financial Corp. 152,964 4,567,505 Patterson Dental Co./1/ 75,924 4,371,704 Varian Medical Systems Inc./1/ 76,047 4,371,182 JetBlue Airways Corp./1/ 71,679 4,370,269 XTO Energy Inc. 204,589 4,294,323 IVAX Corp./1/ 217,924 4,271,310 Dollar Tree Stores Inc./1/ 127,383 4,267,331 Health Net Inc./1/ 129,372 4,097,211 Diebold Inc. 80,706 4,087,759 Lincare Holdings Inc./1/ 109,659 4,019,002 Expeditors International Washington Inc. 116,578 4,011,449 Smith International Inc./1/ 111,473 4,010,799 Commerce Bancorp Inc. 83,414 3,996,365 Ross Stores Inc. 85,283 3,953,720 DENTSPLY International Inc. 87,974 3,944,754 Hillenbrand Industries Inc. 68,827 3,883,219 TCF Financial Corp. 79,628 3,818,163 Oxford Health Plans Inc./1/ 92,390 3,816,631 SEI Investment Co. 116,806 3,796,195 CarMax Inc./1/ 115,235 3,763,575 Whole Foods Market Inc./1/ 66,196 3,652,695 Brinker International Inc./1/ 108,143 3,607,650 PETsMART Inc./1/ 157,598 3,577,475 Hormel Foods Corp. 154,067 3,540,460 Coventry Health Care Inc./1/ 66,674 3,516,387 CH Robinson Worldwide Inc. 94,210 3,505,554 Williams-Sonoma Inc./1/ 129,500 3,493,910 Energizer Holdings Inc./1/ 94,133 3,461,270 Dun & Bradstreet Corp./1/ 82,201 3,414,630 Westwood One Inc./1/ 112,655 3,401,054 Neuberger Berman Inc. 77,992 3,265,525 ChoicePoint Inc./1/ 95,942 3,214,057 Manpower Inc. 86,548 3,210,931 Fastenal Co. 84,489 3,193,684 Universal Health Services Inc. Class B/1/ 64,501 3,189,574 Outback Steakhouse Inc. 83,604 3,166,083 Fair Isaac Corp. 53,665 3,164,088 Lam Research Corp./1/ 141,210 3,127,802 Beckman Coulter Inc. 68,027 3,097,950 Michaels Stores Inc. 74,333 3,029,813 Abercrombie & Fitch Co. Class A/1/ 108,715 3,012,493 Gentex Corp./1/ 85,259 2,970,424 Rent-A-Center Inc./1/ 91,500 2,955,450 Chico's FAS Inc./1/ 96,421 2,954,339 Storage Technology Corp./1/ 122,248 2,951,067 Gallagher (Arthur J.) & Co. 101,094 2,858,938 Equitable Resources Inc. 69,219 2,844,901 Cooper Cameron Corp./1/ 61,125 2,824,586 Jacobs Engineering Group Inc./1/ 61,884 2,790,968 Corinthian Colleges Inc./1/ 48,718 2,784,721 GTECH Holdings Corp. 64,749 2,774,495 First Health Group Corp./1/ 105,886 2,768,919 Henry Schein Inc./1/ 48,519 2,751,027 ADTRAN Inc. 43,090 2,636,246 Valspar Corp. (The) 56,168 2,620,237 Donaldson Co. Inc. 48,418 2,609,730 SCHEDULES OF INVESTMENTS 37 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P MIDCAP 400/BARRA GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- International Speedway Corp. Class A 59,399 $ 2,607,022 Sepracor Inc./1/ 94,549 2,603,879 Eaton Vance Corp. 77,178 2,583,919 Pharmaceutical Resources Inc./1/ 37,736 2,574,350 99 Cents Only Stores/1/ 79,596 2,574,135 Entercom Communications Corp./1/ 57,306 2,568,455 SICOR Inc./1/ 132,772 2,559,844 Krispy Kreme Doughnuts Inc./1/ 64,806 2,495,031 Silicon Laboratories Inc./1/ 54,988 2,471,711 United Dominion Realty Trust Inc. 134,011 2,453,741 Patterson-UTI Energy Inc./1/ 90,305 2,444,556 DPL Inc. 141,211 2,421,769 Hubbell Inc. Class B 66,326 2,420,236 HON Industries Inc. 64,607 2,387,875 Certegy Inc. 73,914 2,373,379 Sonoco Products Co. 108,100 2,372,795 Brown & Brown Inc. 76,313 2,348,914 Integrated Circuit Systems Inc./1/ 77,441 2,326,328 National Instruments Corp. 57,440 2,311,960 Dial Corp. (The) 107,088 2,306,676 Hunt (J.B.) Transport Services Inc./1/ 88,336 2,298,503 Education Management Corp./1/ 39,679 2,288,288 Investors Financial Services Corp. 72,719 2,283,377 Wilmington Trust Corp. 73,568 2,262,952 O'Reilly Automotive Inc./1/ 60,205 2,213,738 Stericycle Inc./1/ 46,844 2,209,631 Waddell & Reed Financial Inc. Class A 92,400 2,177,868 Cullen/Frost Bankers Inc. 57,460 2,139,236 Reynolds & Reynolds Co. (The) Class A 75,972 2,093,029 Cheesecake Factory (The)/1/ 57,445 2,077,786 Roslyn Bancorp Inc. 84,658 1,987,770 Applebee's International Inc. 61,934 1,949,682 Graco Inc. 51,136 1,920,157 Pier 1 Imports Inc. 99,380 1,912,071 Overture Services Inc./1/ 71,555 1,895,492 Edwards Lifesciences Corp./1/ 69,146 1,872,474 Philadelphia Suburban Corp. 77,391 1,863,575 Herman Miller Inc. 81,346 1,852,248 DeVry Inc./1/ 78,111 1,848,106 Cytyc Corp./1/ 121,593 1,828,759 Harte-Hanks Inc. 99,106 1,827,515 Claire's Stores Inc. 54,583 1,826,347 Tootsie Roll Industries Inc. 57,436 1,780,516 Steris Corp./1/ 76,836 1,768,765 BISYS Group Inc. (The)/1/ 133,766 1,759,023 Macromedia Inc./1/ 69,898 1,729,277 Ruby Tuesday Inc. 71,474 1,723,238 Henry (Jack) & Associates Inc. 98,124 1,706,376 Timberland Co. Class A/1/ 39,455 1,683,150 Apria Healthcare Group Inc./1/ 60,657 1,660,789 Westamerica Bancorp 36,259 1,611,713 Lancaster Colony Corp. 40,033 1,592,112 AMETEK Inc. 36,964 1,584,277 FMC Technologies Inc./1/ 73,649 1,577,562 Church & Dwight Co. Inc. 45,000 1,574,550 Avocent Corp./1/ 51,774 1,568,234 Charles River Laboratories International Inc./1/ 50,934 1,563,164 Readers Digest Association Inc. (The) 110,506 1,545,979 Covance Inc./1/ 68,551 1,534,171 Valassis Communications Inc./1/ 58,106 1,533,998 Cabot Microelectronics Corp./1/ 27,468 1,531,066 McDATA Corp. Class A/1/ 127,867 1,530,568 Cree Inc./1/ 81,862 1,516,084 Semtech Corp./1/ 81,951 1,512,815 Acxiom Corp./1/ 94,623 1,491,259 Carlisle Companies Inc. 34,008 1,483,429 Legato Systems Inc./1/ 131,571 1,474,911 Western Gas Resources Inc. 36,783 1,397,754 Cincinnati Bell Inc./1/ 272,770 1,388,399 Grant Prideco Inc./1/ 135,626 1,382,029 Blyth Inc. 51,140 1,379,757 Mentor Graphics Corp./1/ 76,903 1,348,110 Duquesne Light Holdings Inc. 83,443 1,293,367 Micrel Inc./1/ 102,749 1,252,510 Varian Inc./1/ 37,818 1,184,460 Plantronics Inc./1/ 48,997 1,169,558 38 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P MIDCAP 400/BARRA GROWTH INDEX FUND September 30, 2003 SHARES OR SECURITY PRINCIPAL VALUE --------------------------------------------------------------------- Vertex Pharmaceuticals Inc./1/ 85,528 $ 1,051,994 Olin Corp. 65,257 1,032,366 VISX Inc./1/ 53,561 1,020,337 Macrovision Corp./1/ 54,483 1,006,301 Nordson Corp. 37,571 972,713 Gartner Inc. Class B/1/ 86,132 937,977 RSA Security Inc./1/ 65,279 932,184 Catalina Marketing Corp./1/ 59,449 903,030 Rollins Inc. 50,176 895,140 Sotheby's Holdings Inc. Class A/1/ 68,876 745,238 Crompton Corp. 124,277 722,049 Transaction Systems Architects Inc. Class A/1/ 39,626 658,188 LTX Corp./1/ 55,268 622,318 Retek Inc./1/ 59,813 403,738 Univision Communications Inc. Class A/1/ - 14 TOTAL COMMON STOCKS (Cost: $439,133,944) 476,896,734 SHORT TERM INVESTMENTS - 18.88% MONEY MARKET FUNDS - 11.27% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares/2/,/3/ 35,551,136 35,551,136 Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares/2/,/3/ 13,263,313 13,263,313 BlackRock Temp Cash Money Market Fund/2/ 589,182 589,182 Short Term Investment Co. - Liquid Assets Money Market Portfolio/2/ 3,127,145 3,127,145 Short Term Investment Co. - Prime Money Market Portfolio, Institutional Shares/2/ 1,205,756 1,205,756 53,736,532 SECURITY PRINCIPAL VALUE --------------------------------------------------------------------- FLOATING RATE NOTES - 4.40% Beta Finance Inc. 1.08%, 05/20/04/2/ $ 602,878 $ 602,821 1.08%, 09/15/04/2/ 1,205,756 1,205,640 1.17%, 08/23/04/2/ 602,878 603,341 CC USA Inc. 1.06%, 05/24/04/2/ 1,205,756 1,205,678 1.08%, 04/19/04/2/ 530,533 530,518 1.12%, 07/15/04/2/ 602,878 603,049 Dorada Finance Inc. 1.08%, 05/20/04/2/ 1,205,756 1,205,641 1.24%, 08/09/04/2/ 301,439 301,400 Five Finance Inc. 1.09%, 04/15/04/2/ 602,878 602,878 HBOS Treasury Services PLC 1.13%, 06/24/08/2/ 1,205,756 1,205,756 Holmes Financing PLC 1.08%, 04/15/04/2/ 241,151 241,151 K2 USA LLC 1.08%, 08/16/04/2/ 301,439 301,400 1.08%, 09/27/04/2/ 1,302,216 1,302,024 1.09%, 04/13/04/2/ 602,878 602,862 1.09%, 05/17/04/2/ 602,878 602,859 Links Finance LLC 1.05%, 07/20/04/2/ 482,302 482,225 1.08%, 05/04/04/2/ 602,878 602,860 1.08%, 06/28/04/2/ 602,878 602,789 1.09%, 03/29/04/2/ 602,878 602,878 Nationwide Building Society 1.08%, 07/23/04/2/ 904,317 904,317 Sigma Finance Inc. 1.05%, 07/20/04/2/ 602,878 602,781 1.07%, 10/15/03/2/ 1,205,756 1,205,751 1.07%, 07/01/04/2/ 602,878 602,765 1.24%, 08/06/04/2/ 301,439 301,413 Tango Finance Corp. 1.05%, 07/15/04/2/ 361,727 361,633 1.06%, 07/06/04/2/ 361,727 361,698 WhistleJacket Capital LLC 1.08%, 09/15/04/2/ 602,878 602,763 SCHEDULES OF INVESTMENTS 39 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P MIDCAP 400/BARRA GROWTH INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE --------------------------------------------------------------------- White Pine Finance LLC 1.08%, 05/17/04/2/ $ 723,453 $ 723,453 1.08%, 07/06/04/2/ 723,453 723,400 1.08%, 08/26/04/2/ 602,878 602,795 1.09%, 04/20/04/2/ 602,878 602,878 21,003,417 COMMERCIAL PAPER - 2.30% Amsterdam Funding Corp. 1.06%, 10/16/03/2/ 572,734 572,481 Blue Ridge Asset Funding Corp. 1.05%, 10/17/03/2/ 602,878 602,597 Edison Asset Securitization 1.07%, 10/23/03/2/ 1,133,410 1,132,669 Gemini Securitization Corp. 1.05%, 10/17/03/2/ 422,015 421,818 Greenwich Funding Corp. 1.06%, 10/16/03/2/ 711,396 711,082 Jupiter Securitization Corp. 1.05%, 10/20/03/2/ 602,878 602,544 New Center Asset Trust 1.06%, 10/22/03/2/ 602,878 602,505 Park Avenue Receivables Corp. 1.05%, 10/20/03/2/ 602,878 602,544 Preferred Receivables Funding Corp. 1.06%, 10/08/03/2/ 602,878 602,754 Receivables Capital Corp. 1.05%, 10/15/03/2/ 405,230 405,065 Sydney Capital Corp. 1.07%, 10/17/03/2/ 488,331 488,099 UBS Finance (Delaware) Inc. 1.03%, 10/08/03/2/ 1,205,756 1,205,514 1.05%, 10/15/03/2/ 602,878 602,632 1.11%, 10/01/03/2/ 2,411,511 2,411,511 10,963,815 TIME DEPOSITS - 0.71% Abbey National Treasury Services PLC 1.15%, 10/01/03/2/ 602,878 602,878 Canadian Imperial Bank of Commerce 1.06%, 10/08/03/2/ 301,439 301,439 1.08%, 10/30/03/2/ 482,302 482,302 1.37%, 08/26/04/2/ 1,205,756 1,205,756 Toronto-Dominion Bank 1.33%, 08/23/04/2/ 783,741 783,388 3,375,763 REPURCHASE AGREEMENTS - 0.20% Lehman Brothers Inc. 1.10%, 10/01/03/2/ 964,605 964,605 964,605 TOTAL SHORT TERM INVESTMENTS (Cost: $90,044,132) 90,044,132 TOTAL INVESTMENTS IN SECURITIES - 118.88% (Cost $529,178,076) 566,940,866 Other Assets, Less Liabilities - (18.88%) (90,021,549) -------------- NET ASSETS - 100.00% $ 476,919,317 ============== /1/ Non-income earning securities. /2/ All or a portion of this security represents investments of securities lending collateral. /3/ Issuer is an affiliate of the Fund's investment advisor. See Note 2. SEE NOTES TO FINANCIAL STATEMENTS. 40 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) iSHARES S&P MIDCAP 400/BARRA VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- COMMON STOCKS - 99.91% Lennar Corp. Class A 127,467 $ 9,915,658 Sovereign Bancorp Inc. 505,580 9,378,509 National Commerce Financial Corp. 354,073 8,809,336 D.R. Horton Inc. 269,077 8,798,818 Tyson Foods Inc. Class A 606,561 8,570,707 Mohawk Industries Inc./1/ 114,804 8,187,821 Millennium Pharmaceuticals Inc./1/ 517,018 7,956,907 Banknorth Group Inc. 278,981 7,872,844 Valero Energy Corp. 197,987 7,576,962 Compass Bancshares Inc. 217,531 7,522,222 L-3 Communications Holdings Inc./1/ 166,844 7,216,003 Everest Re Group Ltd. 95,992 7,214,759 Radian Group Inc. 161,961 7,191,068 Fidelity National Financial Inc. 233,098 7,006,926 ENSCO International Inc. 259,338 6,955,445 Old Republic International Corp. 209,110 6,919,450 SCANA Corp. 191,998 6,575,931 Omnicare Inc. 175,403 6,325,032 Cadence Design Systems Inc./1/ 469,925 6,296,995 Republic Services Inc. 278,070 6,295,505 Wisconsin Energy Corp. 202,767 6,198,587 Lear Corp./1/ 116,272 6,120,558 SPX Corp./1/ 132,579 6,003,177 E*TRADE Group Inc./1/ 627,138 5,807,298 Intersil Corp. Class A/1/ 239,257 5,694,317 Energy East Corp. 252,363 5,660,502 Telephone & Data Systems Inc. 99,297 5,614,252 Constellation Brands Inc./1/ 180,779 5,511,952 Mercantile Bankshares Corp. 137,541 5,501,640 Hibernia Corp. Class A 270,149 5,473,219 Edwards (A.G.) Inc. 137,652 5,287,213 Pioneer Natural Resources Co./1/ 203,979 5,193,305 PMI Group Inc. (The) 153,817 5,191,324 Pepco Holdings Inc. 295,839 5,112,098 Liberty Property Trust 137,190 5,073,286 Pogo Producing Co. 109,969 4,979,396 Berkley (W.R.) Corp. 143,918 4,930,631 Vishay Intertechnology Inc./1/ 276,348 4,841,617 Associated Bancorp 127,316 4,812,545 Ceridian Corp./1/ 256,428 4,774,689 Belo (A.H.) Corp. 196,623 4,768,108 Park Place Entertainment Corp./1/ 522,726 4,709,761 Questar Corp. 143,438 4,419,325 MDU Resources Group Inc. 130,655 4,413,526 NSTAR 91,803 4,360,642 AMB Property Corp. 141,376 4,355,795 Astoria Financial Corp. 139,238 4,302,454 City National Corp. 83,927 4,276,920 Alliant Energy Corp. 191,098 4,204,156 International Rectifier Corp./1/ 111,078 4,158,760 Northeast Utilities 231,216 4,143,391 Harris Corp. 114,772 4,107,690 ALLETE Inc. 149,634 4,096,979 Mandalay Resort Group 102,729 4,069,096 Bowater Inc. 95,863 4,031,998 Pride International Inc./1/ 233,907 3,964,724 Triad Hospitals Inc./1/ 130,270 3,944,576 Mack-Cali Realty Corp. 100,578 3,942,658 New Plan Excel Realty Trust 168,673 3,930,081 Leucadia National Corp. 103,238 3,907,558 Toll Brothers Inc./1/ 126,478 3,847,461 Network Associates Inc./1/ 277,670 3,820,739 Hospitality Properties Trust 108,346 3,800,778 3Com Corp./1/ 637,530 3,761,427 Noble Energy Inc. 97,767 3,744,476 Community Health Systems Inc./1/ 170,526 3,700,414 Viad Corp. 152,975 3,653,043 Puget Energy Inc. 162,781 3,651,178 Smucker (J.M.) Co. (The) 86,481 3,646,039 Great Plains Energy Inc. 119,783 3,631,821 Smithfield Foods Inc./1/ 188,868 3,626,266 Cypress Semiconductor Corp./1/ 204,828 3,621,359 FirstMerit Corp. 146,266 3,618,621 PepsiAmericas Inc. 249,029 3,608,430 Lyondell Chemical Co. 280,215 3,581,148 Unitrin Inc. 116,913 3,561,170 Protective Life Corp. 119,299 3,561,075 Packaging Corporation of America/1/ 180,508 3,505,465 SCHEDULES OF INVESTMENTS 41 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P MIDCAP 400/BARRA VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- Neiman-Marcus Group Inc. Class A/1/ 82,211 $ 3,428,199 Avnet Inc./1/ 206,875 3,417,575 Bank of Hawaii Corp. 101,575 3,410,888 Pentair Inc. 85,456 3,407,131 Fairchild Semiconductor International Inc. Class A/1/ 202,793 3,362,308 First American Corp. 134,324 3,344,668 Hovnanian Enterprises Inc. Class A/1/ 51,839 3,336,876 OGE Energy Corp. 147,600 3,334,284 Apogent Technologies Inc./1/ 159,199 3,320,891 Independence Community Bank Corp. 94,652 3,306,194 Swift Transportation Co. Inc./1/ 144,432 3,277,162 Atmel Corp./1/ 811,607 3,254,544 National Fuel Gas Co. 140,803 3,217,349 Precision Castparts Corp. 91,584 3,214,598 Arrow Electronics Inc./1/ 174,548 3,209,938 HCC Insurance Holdings Inc. 110,278 3,206,884 BorgWarner Inc. 46,772 3,173,480 PacifiCare Health Systems Inc./1/ 65,021 3,173,025 Webster Financial Corp. 78,887 3,146,014 Advanced Fibre Communications Inc./1/ 148,316 3,110,186 AGL Resources Inc. 110,333 3,108,081 Colonial BancGroup Inc. (The) 215,209 3,107,618 Martin Marietta Materials Inc. 84,588 3,083,233 Vectren Corp. 129,000 3,046,980 Cabot Corp. 106,840 3,046,008 Washington Federal Inc. 120,685 3,042,469 Tech Data Corp./1/ 98,084 3,025,891 CBRL Group Inc. 84,280 2,990,254 Lee Enterprises Inc. 77,186 2,984,783 Teleflex Inc. 68,483 2,974,217 Tidewater Inc. 104,783 2,965,359 RF Micro Devices Inc./1/ 319,102 2,964,458 Rayonier Inc. 72,566 2,946,180 Peabody Energy Corp. 93,800 2,942,506 Titan Corp. (The)/1/ 139,045 2,897,698 StanCorp Financial Group Inc. 50,425 2,896,916 Lubrizol Corp. 89,064 2,890,127 Varco International Inc./1/ 168,712 2,852,920 Saks Inc./1/ 247,256 2,850,862 Barnes & Noble Inc./1/ 111,997 2,845,844 Polycom Inc./1/ 170,928 2,839,114 Hawaiian Electric Industries Inc. 64,873 2,823,922 Sybase Inc./1/ 164,088 2,791,137 AmeriCredit Corp./1/ 270,563 2,786,799 CNF Inc. 85,911 2,753,447 CheckFree Corp./1/ 137,174 2,743,480 Harsco Corp. 70,478 2,711,289 National-Oilwell Inc./1/ 147,078 2,667,995 MONY Group Inc. (The) 81,305 2,646,478 ONEOK Inc. 130,059 2,623,290 American Financial Group Inc. 120,351 2,617,634 RPM International Inc. 199,932 2,611,112 Borders Group Inc./1/ 133,721 2,530,001 Werner Enterprises Inc. 110,421 2,529,745 Media General Inc. Class A 40,500 2,474,550 ICN Pharmaceuticals Inc. 143,843 2,468,346 Cytec Industries Inc./1/ 67,599 2,467,363 Extended Stay America Inc./1/ 164,320 2,453,298 York International Corp. 68,798 2,379,723 Provident Financial Group Inc. 84,488 2,362,284 Furniture Brands International Inc./1/ 96,533 2,326,445 BJ's Wholesale Club Inc./1/ 119,845 2,321,398 WGL Holdings Inc. 84,150 2,320,857 WPS Resources Corp. 56,254 2,317,665 Westar Energy Inc. 124,760 2,301,822 AmerUs Group Co. 67,683 2,301,222 Kennametal Inc. 61,273 2,291,610 Helmerich & Payne Inc. 86,733 2,267,201 Airgas Inc. 127,041 2,261,330 Protein Design Labs Inc./1/ 161,862 2,243,407 Integrated Device Technology Inc./1/ 180,262 2,238,854 AGCO Corp./1/ 130,073 2,229,451 IndyMac Bancorp Inc. 96,123 2,227,170 Forest Oil Corp./1/ 92,144 2,206,849 Allmerica Financial Corp./1/ 91,838 2,186,663 42 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P MIDCAP 400/BARRA VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- United Rentals Inc./1/ 132,803 $ 2,136,800 ArvinMeritor Inc. 118,584 2,111,981 Trinity Industries Inc. 80,057 2,069,473 Sylvan Learning Systems Inc./1/ 74,623 2,035,715 Arch Coal Inc. 90,921 2,019,355 Alexander & Baldwin Inc. 71,539 2,008,815 Imation Corp. 61,322 2,002,163 Albemarle Corp. 71,176 1,953,781 PNM Resources Inc. 69,677 1,953,743 Scholastic Corp./1/ 67,770 1,951,098 Flowserve Corp./1/ 95,353 1,935,666 KEMET Corp./1/ 149,308 1,902,184 Emmis Communications Corp./1/ 93,917 1,895,245 Greater Bay Bancorp 90,020 1,872,416 Superior Industries International Inc. 46,034 1,866,679 Ascential Software Corp./1/ 100,675 1,865,508 Callaway Golf Co. 130,610 1,863,805 Activision Inc./1/ 152,567 1,823,176 American Eagle Outfitters Inc./1/ 122,659 1,822,713 Universal Corp. 42,868 1,806,029 GATX Corp. 84,724 1,791,913 Minerals Technologies Inc. 34,825 1,772,592 Black Hills Corp. 55,593 1,715,600 Sensient Technologies Corp. 80,969 1,700,349 Dycom Industries Inc./1/ 82,775 1,687,782 IDACORP Inc. 66,184 1,687,692 Copart Inc./1/ 155,002 1,674,022 Quanta Services Inc./1/ 201,643 1,667,588 Silicon Valley Bancshares/1/ 59,803 1,652,357 Brink's Co. (The) 94,001 1,631,857 LifePoint Hospitals Inc./1/ 66,982 1,610,917 Bob Evans Farms Inc. 59,832 1,598,113 MPS Group Inc./1/ 176,568 1,589,112 Banta Corp. 44,060 1,586,160 Investment Technology Group Inc./1/ 81,815 1,569,212 Overseas Shipholding Group Inc. 60,171 1,555,420 Perrigo Co. 121,249 1,543,500 Kelly Services Inc. Class A 61,667 1,537,975 FMC Corp./1/ 60,979 1,536,671 Ohio Casualty Corp./1/ 105,426 1,528,677 Payless ShoeSource Inc./1/ 117,777 1,524,034 Ferro Corp. 70,525 1,506,414 LaBranche & Co. Inc. 102,805 1,500,953 EGL Inc./1/ 81,516 1,481,961 Potlatch Corp. 49,514 1,471,556 Modine Manufacturing Co. 59,164 1,408,103 Keane Inc./1/ 110,084 1,406,873 Lattice Semiconductor Corp./1/ 194,222 1,380,918 Granite Construction Inc. 71,811 1,341,429 CSG Systems International Inc./1/ 90,387 1,335,016 Longs Drug Stores Corp. 64,774 1,303,901 TriQuint Semiconductor Inc./1/ 232,381 1,301,334 Alaska Air Group Inc./1/ 45,991 1,279,470 IMC Global Inc. 199,073 1,276,058 Credence Systems Corp./1/ 108,955 1,252,982 Hanover Compressor Co./1/ 126,170 1,249,083 Ruddick Corp. 80,146 1,245,469 Federal Signal Corp. 83,132 1,238,667 CommScope Inc./1/ 102,354 1,234,389 Tecumseh Products Co. Class A 31,945 1,191,868 Price Communications Corp./1/ 94,095 1,166,778 Interstate Bakeries Corp. 77,433 1,161,495 Aquila Inc./1/ 338,018 1,142,501 Plexus Corp./1/ 73,428 1,141,071 Bandag Inc. 33,571 1,132,350 Wausau-Mosinee Paper Corp. 89,100 1,087,911 Internet Security Systems Inc./1/ 85,818 1,072,725 Horace Mann Educators Corp. 73,800 1,070,838 Sierra Pacific Resources/1/ 202,405 981,664 Quantum Corp./1/ 306,659 944,510 Newport Corp./1/ 66,835 942,373 Advent Software Inc./1/ 56,265 905,304 Glatfelter Co. 75,527 889,708 Longview Fibre Co. 88,250 862,202 Six Flags Inc./1/ 160,947 846,581 Carpenter Technology Corp. 38,848 832,901 Wind River Systems Inc./1/ 137,647 783,211 Sequa Corp. Class A/1/ 18,164 777,601 Powerwave Technologies Inc./1/ 108,927 721,097 SCHEDULES OF INVESTMENTS 43 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P MIDCAP 400/BARRA VALUE INDEX FUND September 30, 2003 SHARES OR SECURITY PRINCIPAL VALUE --------------------------------------------------------------------- Korn/Ferry International/1/ 65,028 $ 536,481 Unifi Inc./1/ 93,738 449,942 TOTAL COMMON STOCKS (Cost: $710,736,090) 739,768,737 SHORT TERM INVESTMENTS - 21.61% MONEY MARKET FUNDS - 13.06% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares/2/,/3/ 65,036,229 65,036,229 Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares/2/,/3/ 23,102,768 23,102,768 BlackRock Temp Cash Money Market Fund/2/ 1,026,270 1,026,270 Short Term Investment Co. - Liquid Assets Money Market Portfolio/2/ 5,447,033 5,447,033 Short Term Investment Co. - Prime Money Market Portfolio, Institutional Shares/2/ 2,100,252 2,100,252 96,712,552 FLOATING RATE NOTES - 4.94% Beta Finance Inc. 1.08%, 05/20/04/2/ $ 1,050,126 1,050,026 1.08%, 09/15/04/2/ 2,100,252 2,100,051 1.17%, 08/23/04/2/ 1,050,126 1,050,932 CC USA Inc. 1.06%, 05/24/04/2/ 2,100,252 2,100,117 1.08%, 04/19/04/2/ 924,111 924,085 1.12%, 07/15/04/2/ 1,050,126 1,050,424 Dorada Finance Inc. 1.08%, 05/20/04/2/ 2,100,252 2,100,052 1.24%, 08/09/04/2/ 525,063 524,996 Five Finance Inc. 1.09%, 04/15/04/2/ 1,050,126 1,050,126 HBOS Treasury Services PLC 1.13%, 06/24/08/2/ 2,100,252 2,100,252 Holmes Financing PLC 1.08%, 04/15/04/2/ 420,050 420,050 SECURITY PRINCIPAL VALUE --------------------------------------------------------------------- K2 USA LLC 1.08%, 08/16/04/2/ $ 525,063 $ 524,994 1.08%, 09/27/04/2/ 2,268,272 2,267,936 1.09%, 04/13/04/2/ 1,050,126 1,050,098 1.09%, 05/17/04/2/ 1,050,126 1,050,093 Links Finance LLC 1.05%, 07/20/04/2/ 840,101 839,966 1.08%, 05/04/04/2/ 1,050,126 1,050,095 1.08%, 06/28/04/2/ 1,050,126 1,049,971 1.09%, 03/29/04/2/ 1,050,126 1,050,126 Nationwide Building Society 1.08%, 07/23/04/2/ 1,575,189 1,575,189 Sigma Finance Inc. 1.05%, 07/20/04/2/ 1,050,126 1,049,957 1.07%, 10/15/03/2/ 2,100,252 2,100,244 1.07%, 07/01/04/2/ 1,050,126 1,049,929 1.24%, 08/06/04/2/ 525,063 525,018 Tango Finance Corp. 1.05%, 07/15/04/2/ 630,075 629,911 1.06%, 07/06/04/2/ 630,075 630,026 WhistleJacket Capital LLC 1.08%, 09/15/04/2/ 1,050,126 1,049,925 White Pine Finance LLC 1.08%, 05/17/04/2/ 1,260,151 1,260,151 1.08%, 07/06/04/2/ 1,260,151 1,260,059 1.08%, 08/26/04/2/ 1,050,126 1,049,980 1.09%, 04/20/04/2/ 1,050,126 1,050,126 36,584,905 COMMERCIAL PAPER - 2.58% Amsterdam Funding Corp. 1.06%, 10/16/03/2/ 997,620 997,179 Blue Ridge Asset Funding Corp. 1.05%, 10/17/03/2/ 1,050,126 1,049,636 Edison Asset Securitization 1.07%, 10/23/03/2/ 1,974,237 1,972,946 Gemini Securitization Corp. 1.05%, 10/17/03/2/ 735,088 734,745 Greenwich Funding Corp. 1.06%, 10/16/03/2/ 1,239,148 1,238,601 44 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P MIDCAP 400/BARRA VALUE INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE --------------------------------------------------------------------- Jupiter Securitization Corp. 1.05%, 10/20/03/2/ $ 1,050,126 $ 1,049,544 New Center Asset Trust 1.06%, 10/22/03/2/ 1,050,126 1,049,476 Park Avenue Receivables Corp. 1.05%, 10/20/03/2/ 1,050,126 1,049,544 Preferred Receivables Funding Corp. 1.06%, 10/08/03/2/ 1,050,126 1,049,909 Receivables Capital Corp. 1.05%, 10/15/03/2/ 705,853 705,564 Sydney Capital Corp. 1.07%, 10/17/03/2/ 850,602 850,197 UBS Finance (Delaware) Inc. 1.03%, 10/08/03/2/ 2,100,252 2,099,831 1.05%, 10/15/03/2/ 1,050,126 1,049,698 1.11%, 10/01/03/2/ 4,200,503 4,200,503 19,097,373 TIME DEPOSITS - 0.80% Abbey National Treasury Services PLC 1.15%, 10/01/03/2/ 1,050,126 1,050,126 Canadian Imperial Bank of Commerce 1.06%, 10/08/03/2/ 525,063 525,063 1.08%, 10/30/03/2/ 840,101 840,101 1.37%, 08/26/04/2/ 2,100,252 2,100,252 Toronto-Dominion Bank 1.33%, 08/23/04/2/ 1,365,164 1,364,549 5,880,091 REPURCHASE AGREEMENTS - 0.23% Lehman Brothers Inc. 1.10%, 10/01/03/2/ 1,680,201 1,680,201 1,680,201 TOTAL SHORT TERM INVESTMENTS (Cost: $159,955,122) 159,955,122 TOTAL INVESTMENTS IN SECURITIES - 121.52% (Cost $870,691,212) 899,723,859 Other Assets, Less Liabilities - (21.52%) (159,314,354) -------------- NET ASSETS - 100.00% $ 740,409,505 ============== /1/ Non-income earning securities. /2/ All or a portion of this security represents investments of securities lending collateral. /3/ Issuer is an affiliate of the Fund's investment advisor. See Note 2. SEE NOTES TO FINANCIAL STATEMENTS. SCHEDULES OF INVESTMENTS 45 SCHEDULE OF INVESTMENTS (Unaudited) iSHARES S&P SMALLCAP 600 INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- COMMON STOCKS - 99.97% NVR Inc./1/ 30,578 $ 14,264,637 Harman International Industries Inc. 137,655 13,538,369 Cephalon Inc./1/ 237,478 10,904,990 Mid Atlantic Medical Services Inc./1/ 205,928 10,590,877 Zebra Technologies Corp. Class A/1/ 201,509 10,391,819 Newfield Exploration Co./1/ 238,389 9,194,664 ITT Educational Services Inc./1/ 191,801 9,191,104 Performance Food Group Co./1/ 194,516 7,918,746 Alliant Techsystems Inc./1/ 164,740 7,915,757 Ryland Group Inc. 106,385 7,777,807 Raymond James Financial Inc. 207,804 7,553,675 Scotts Co. (The) Class A/1/ 134,884 7,378,155 INAMED Corp./1/ 98,212 7,213,671 Renal Care Group Inc./1/ 209,758 7,163,236 Polaris Industries Inc. 92,997 6,895,728 Pacific Sunwear of California Inc./1/ 331,063 6,839,762 Medicis Pharmaceutical Corp. Class A 116,085 6,802,581 Shurgard Storage Centers Inc. Class A 192,187 6,784,201 Jeffries Group Inc. 233,838 6,722,842 Avid Technology Inc./1/ 127,115 6,716,757 Hudson United Bancorp 190,977 6,716,661 M.D.C. Holdings Inc. 123,692 6,679,368 NBTY Inc./1/ 284,041 6,632,357 Thor Industries Inc. 122,171 6,599,677 FactSet Research Systems Inc. 142,997 6,341,917 ResMed Inc./1/ 142,021 6,246,084 IDEXX Laboratories Inc./1/ 146,724 6,234,303 Cymer Inc./1/ 149,997 6,179,876 Take-Two Interactive Software Inc./1/ 178,267 6,091,383 AnnTaylor Stores Corp./1/ 189,485 6,090,048 Respironics Inc./1/ 145,636 6,084,672 Florida Rock Industries Inc. 122,566 6,079,274 Essex Property Trust Inc. 96,661 6,061,611 Regis Corp. 185,295 5,947,970 First Midwest Bancorp Inc. 199,104 5,915,380 Flagstar Bancorp Inc. 256,067 5,876,738 Roper Industries Inc. 134,787 5,869,974 Whitney Holding Corp. 171,962 5,846,708 Oshkosh Truck Corp. 146,429 5,800,053 UCBH Holdings Inc. 191,441 5,787,261 Skyworks Solutions Inc./1/ 632,891 5,759,308 Pharmaceutical Product Development Inc./1/ 238,639 5,724,950 Global Payments Inc. 158,942 5,721,912 Accredo Health Inc./1/ 204,383 5,720,680 Ethan Allen Interiors Inc. 158,628 5,710,608 AptarGroup Inc. 154,225 5,658,515 Downey Financial Corp. 119,507 5,584,562 Timken Co. (The) 366,087 5,579,166 Piedmont Natural Gas Co. 142,893 5,572,827 Energen Corp. 153,432 5,551,170 TECHNE Corp./1/ 174,394 5,543,985 Varian Semiconductor Equipment Associates Inc./1/ 146,703 5,494,027 Fred's Inc. 165,911 5,468,427 Cooper Companies Inc. 133,953 5,458,585 Briggs & Stratton Corp. 92,539 5,437,592 United Stationers Inc./1/ 141,434 5,329,233 Southwest Bancorp of Texas Inc. 145,656 5,317,901 United Bancshares Inc. 176,965 5,300,102 Southern Union Co./1/ 310,338 5,275,746 CACI International Inc. Class A/1/ 122,892 5,265,922 First Bancorp 171,193 5,264,185 UGI Corp. 181,795 5,259,329 Standard-Pacific Corp. 138,631 5,254,115 Patina Oil & Gas Corp. 144,714 5,244,435 Tractor Supply Co./1/ 158,986 5,216,331 Panera Bread Co. Class A/1/ 127,296 5,214,044 Zale Corp./1/ 116,948 5,193,661 La-Z-Boy Inc. 233,838 5,191,204 Heartland Express Inc. 213,952 5,139,127 Atmos Energy Corp. 213,525 5,111,788 Idex Corp. 139,611 5,087,425 MGI Pharma Inc./1/ 127,974 5,024,259 46 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P SMALLCAP 600 INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- Tom Brown Inc./1/ 194,644 $ 5,002,351 South Financial Group Inc. (The) 200,419 4,988,429 Invacare Corp. 132,190 4,967,700 P.F. Chang's China Bistro Inc./1/ 108,441 4,917,799 Corn Products International Inc. 154,107 4,908,308 Staten Island Bancorp Inc. 250,669 4,875,512 Cognex Corp. 184,147 4,841,225 Fossil Inc./1/ 199,375 4,830,856 Toro Co. 104,923 4,721,535 Cerner Corp./1/ 151,071 4,663,562 Chittenden Corp. 156,230 4,647,842 Commercial Federal Corp. 188,389 4,587,272 Tetra Tech Inc./1/ 229,728 4,573,885 Odyssey Healthcare Inc./1/ 152,821 4,557,122 Hot Topic Inc./1/ 202,088 4,555,064 Kronos Inc./1/ 85,907 4,545,339 Pediatrix Medical Group Inc./1/ 98,577 4,539,471 Mentor Corp. 198,799 4,532,617 Arbitron Inc./1/ 128,306 4,529,202 Hilb, Rogal & Hamilton Co. 145,526 4,517,127 Linens 'N Things Inc./1/ 189,143 4,497,821 Evergreen Resources Inc./1/ 166,219 4,487,913 Benchmark Electronics Inc./1/ 105,843 4,473,984 Diagnostic Products Corp. 122,834 4,462,559 Flowers Foods Inc. 193,257 4,406,260 East West Bancorp Inc. 102,863 4,397,393 Susquehanna Bancshares Inc. 170,107 4,371,750 Hyperion Solutions Corp./1/ 151,302 4,368,089 Urban Outfitters Inc./1/ 166,780 4,346,287 Men's Wearhouse Inc. (The)/1/ 168,700 4,327,155 CEC Entertainment Inc./1/ 110,202 4,319,918 Philadelphia Consolidated Holding Corp./1/ 93,473 4,318,453 Simpson Manufacturing Co. Inc./1/ 105,418 4,310,542 Albany International Corp. Class A 139,393 4,298,880 Community First Bankshares Inc. 162,281 4,289,087 Massey Energy Co. 321,974 4,282,254 SkyWest Inc. 247,183 4,281,210 MAF Bancorp Inc. 111,653 4,265,145 Waste Connections Inc./1/ 121,056 4,247,855 SCP Pool Corp./1/ 151,310 4,209,444 Sonic Corp./1/ 166,279 4,203,533 New Century Financial Corp. 148,097 4,194,107 New Jersey Resources Corp. 116,304 4,191,596 Power Integrations Inc./1/ 125,956 4,186,777 CLARCOR Inc. 106,878 4,168,242 Engineered Support Systems Inc. 68,834 4,164,457 Roadway Corp. 85,072 4,148,961 Capital Automotive 135,870 4,145,394 Fremont General Corp. 324,680 4,126,683 Alpharma Inc. Class A 220,605 4,103,253 Sybron Dental Specialties Inc./1/ 163,124 4,089,519 Delphi Financial Group Inc. Class A 87,653 4,077,618 Commonwealth Telephone Enterprises Inc./1/ 101,074 4,056,100 Knight Transportation Inc./1/ 160,085 4,013,331 Stone Energy Corp./1/ 112,966 3,985,440 Colonial Properties Trust 110,411 3,978,108 AMERIGROUP Corp./1/ 88,782 3,962,341 Landstar System Inc./1/ 64,804 3,954,340 Regeneron Pharmaceuticals Inc./1/ 222,808 3,937,017 TrustCo Bank Corp. NY 317,975 3,930,171 Priority Healthcare Corp. Class B/1/ 185,977 3,819,968 Christopher & Banks Corp. 159,324 3,801,471 Gables Residential Trust 117,182 3,787,322 Yellow Corp./1/ 126,530 3,780,716 Kellwood Co. 112,861 3,775,200 Delta & Pine Land Co. 163,005 3,750,745 Mueller Industries Inc./1/ 146,709 3,733,744 Quiksilver Inc./1/ 233,954 3,731,566 j2 Global Communications Inc./1/ 97,382 3,683,961 Lennox International Inc. 249,890 3,650,893 USF Corp. 115,976 3,649,765 Hutchinson Technology Inc./1/ 110,189 3,647,256 LandAmerica Financial Group Inc. 79,366 3,638,137 Flir Systems Inc./1/ 141,773 3,632,224 Brookline Bancorp Inc. 246,673 3,631,027 Cabot Oil & Gas Corp. 137,806 3,582,956 SCHEDULES OF INVESTMENTS 47 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P SMALLCAP 600 INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- Burlington Coat Factory Warehouse Corp. 190,713 $ 3,566,333 Rare Hospitality International Inc./1/ 142,737 3,555,579 ADVO Inc./1/ 85,299 3,550,997 RLI Corp. 107,538 3,540,151 Anixter International Inc./1/ 155,030 3,530,033 Pep Boys-Manny, Moe & Jack Inc. 230,544 3,527,323 Dionex Corp./1/ 89,486 3,522,169 Unit Corp./1/ 186,331 3,510,476 MacDermid Inc. 132,593 3,507,085 Smith (A.O.) Corp. 124,539 3,488,337 Cimarex Energy Co./1/ 177,746 3,483,822 Axcelis Technologies Inc./1/ 421,302 3,479,955 Adaptec Inc./1/ 460,309 3,479,936 Owens & Minor Inc. 143,894 3,467,845 Winnebago Industries Inc. 77,617 3,460,166 Ralcorp Holdings Inc./1/ 123,713 3,426,850 Selective Insurance Group Inc. 115,133 3,426,358 Spinnaker Exploration Co./1/ 142,131 3,411,144 WebEx Communications Inc./1/ 178,852 3,396,399 Cost Plus Inc./1/ 91,458 3,376,629 Kilroy Realty Corp. 117,648 3,358,850 Group 1 Automotive Inc./1/ 96,390 3,329,311 ATMI Inc./1/ 131,703 3,328,135 Wolverine World Wide Inc. 170,786 3,313,248 Cleco Corp. 202,320 3,305,909 Brooks Automation Inc./1/ 158,085 3,303,976 Kroll Inc./1/ 177,413 3,299,882 FEI Co./1/ 140,714 3,284,265 Republic Bancorp Inc. 246,274 3,280,370 Manhattan Associates Inc./1/ 126,406 3,272,651 Southwest Gas Corp. 144,068 3,270,344 Wilson Greatbatch Technologies Inc./1/ 90,617 3,266,743 Hughes Supply Inc. 100,450 3,259,602 Georgia Gulf Corp. 138,830 3,241,680 SERENA Software Inc./1/ 172,933 3,216,554 Avista Corp. 206,372 3,215,276 Integra LifeSciences Holdings Corp./1/ 113,557 3,212,528 Trimble Navigation Ltd./1/ 138,699 3,210,882 Acuity Brands Inc. 177,739 3,209,966 Northwest Natural Gas Co. 109,864 3,186,056 Watson Wyatt & Co. Holdings/1/ 141,026 3,174,495 Technitrol Inc./1/ 172,006 3,166,630 Progress Software Corp./1/ 146,977 3,160,006 Brady Corp. Class A 99,219 3,156,156 Harland (John H.) Co. 118,960 3,148,871 CAL Dive International Inc./1/ 161,088 3,131,551 NDCHealth Corp. 149,138 3,124,441 FileNET Corp./1/ 155,485 3,120,584 Coherent Inc./1/ 126,662 3,119,685 Curtiss-Wright Corp. 44,065 3,111,870 G&K Services Inc. Class A 88,761 3,106,635 Black Box Corp. 77,888 3,100,721 BARRA Inc./1/ 82,427 3,095,134 Steel Dynamics Inc./1/ 203,930 3,087,500 MAXIMUS Inc./1/ 88,933 3,063,742 St. Mary Land & Exploration Co. 120,112 3,041,236 American Medical Systems Holdings Inc./1/ 140,127 3,040,756 Electronics Boutique Holdings Corp./1/ 106,423 3,040,505 Argosy Gaming Co./1/ 124,548 3,038,971 Reliance Steel & Aluminum Co. 135,985 3,017,507 IHOP Corp. 91,785 3,015,137 Insight Enterprises Inc./1/ 197,530 3,006,407 DSP Group Inc./1/ 120,466 3,000,808 Wintrust Financial Corp. 79,465 2,993,447 Casey's General Store Inc. 212,534 2,981,852 ABM Industries Inc. 210,699 2,981,391 Vintage Petroleum Inc. 273,536 2,976,072 CH Energy Group Inc. 67,519 2,970,836 Russ Berrie & Co. Inc. 87,983 2,964,147 Provident Bankshares Corp. 104,805 2,960,741 Kirby Corp./1/ 103,147 2,960,319 Baldor Electric Co. 139,963 2,954,619 American Italian Pasta Co. Class A/1/ 76,260 2,950,499 Fuller (H.B.) Co. 121,498 2,948,756 48 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P SMALLCAP 600 INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- Kansas City Southern Industries Inc./1/ 264,222 $ 2,924,938 Aaron Rents Inc. 139,441 2,921,289 Photronics Inc./1/ 137,168 2,916,192 Arkansas Best Corp. 105,893 2,912,057 SEACOR SMIT Inc./1/ 80,396 2,907,923 Irwin Financial Corp. 119,520 2,904,336 WMS Industries Inc./1/ 128,042 2,901,432 Waypoint Financial Corp. 144,460 2,889,200 Cubic Corp. 114,384 2,873,326 FirstFed Financial Corp./1/ 72,667 2,870,346 Lexington Corp. Properties Trust 149,751 2,869,229 Kaydon Corp. 119,921 2,846,925 PolyMedica Corp. 105,996 2,808,894 CUNO Inc./1/ 71,441 2,799,780 American Healthways Inc./1/ 66,632 2,797,878 AmSurg Corp./1/ 84,470 2,786,665 Maverick Tube Corp./1/ 179,307 2,782,845 Southwestern Energy Co./1/ 152,082 2,752,684 Ultratech Inc./1/ 97,435 2,749,616 Analogic Corp. 57,204 2,745,792 Jack in the Box Inc./1/ 154,152 2,743,906 United Natural Foods Inc./1/ 82,647 2,743,054 UniSource Energy Corp. 143,774 2,734,581 EMCOR Group Inc./1/ 64,148 2,729,497 Movie Gallery Inc./1/ 138,423 2,720,012 K-Swiss Inc. Class A 75,308 2,710,335 URS Corp./1/ 139,607 2,708,376 Province Healthcare Co./1/ 208,558 2,700,826 US Oncology Inc./1/ 368,622 2,694,627 THQ Inc./1/ 163,633 2,686,854 BankUnited Financial Corp. Class A/1/ 125,871 2,653,361 Hain Celestial Group Inc./1/ 145,751 2,642,466 Aztar Corp./1/ 148,543 2,630,697 Inter-Tel Inc. 106,695 2,619,362 Triarc Companies Inc. Class B 251,797 2,618,689 Dendrite International Inc./1/ 171,988 2,612,498 NCO Group Inc./1/ 110,888 2,602,541 Advanced Energy Industries Inc./1/ 137,748 2,599,305 Viasys Healthcare Inc./1/ 127,576 2,577,035 CONMED Corp./1/ 123,878 2,556,842 Actel Corp./1/ 105,866 2,537,608 MICROS Systems Inc./1/ 74,217 2,534,511 Centene Corp./1/ 83,260 2,530,271 Forward Air Corp./1/ 90,928 2,514,159 Dime Community Bancshares 108,883 2,504,309 Sierra Health Services Inc./1/ 121,854 2,504,100 Electro Scientific Industries Inc./1/ 118,625 2,499,429 Cambrex Corp. 110,089 2,499,020 Veeco Instruments Inc./1/ 125,178 2,498,553 Aeroflex Inc./1/ 282,192 2,497,399 Enzo Biochem Inc./1/ 127,925 2,495,817 UICI/1/ 198,495 2,489,127 SPS Technologies Inc./1/ 55,242 2,485,890 Barnes Group Inc. 95,614 2,482,139 eFunds Corp./1/ 200,094 2,471,161 Manitowoc Co. Inc. (The) 113,043 2,451,903 Tredegar Corp. 162,881 2,451,359 Frontier Airlines Inc./1/ 148,002 2,436,113 Haemonetics Corp./1/ 103,110 2,434,427 Exar Corp./1/ 171,962 2,429,823 Landry's Restaurants Inc. 117,828 2,427,257 Oceaneering International Inc./1/ 103,051 2,423,760 Brown Shoe Co. Inc. 76,319 2,419,312 Financial Federal Corp./1/ 79,260 2,418,223 CARBO Ceramics Inc. 66,296 2,397,263 El Paso Electric Co./1/ 206,545 2,385,595 Sunrise Senior Living Inc./1/ 90,875 2,383,651 Jo-Ann Stores Inc./1/ 85,246 2,378,363 Anchor BanCorp Wisconsin Inc. 100,540 2,360,679 DRS Technologies Inc./1/ 95,951 2,315,298 TBC Corp./1/ 92,249 2,310,837 Kulicke & Soffa Industries Inc./1/ 212,840 2,307,186 Ryan's Family Steak Houses Inc./1/ 180,315 2,306,229 Seacoast Financial Services Corp. 111,348 2,306,017 Quanex Corp. 68,600 2,304,960 American Management Systems Inc./1/ 180,641 2,303,173 Boston Private Financial Holdings Inc. 96,939 2,283,883 Pinnacle Systems Inc./1/ 270,212 2,277,887 SCHEDULES OF INVESTMENTS 49 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P SMALLCAP 600 INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- Griffon Corp./1/ 126,482 $ 2,271,617 ANSYS Inc./1/ 63,860 2,269,584 Russell Corp. 138,992 2,265,570 WD-40 Co. 71,253 2,258,008 Sterling Bancshares Inc. 188,575 2,249,700 Global Imaging Systems Inc./1/ 91,333 2,246,792 Glenborough Realty Trust Inc. 118,926 2,242,944 School Specialty Inc./1/ 79,501 2,242,723 CDI Corp. 82,924 2,241,436 Zenith National Insurance Corp. 80,364 2,235,726 Advanced Medical Optics Inc./1/ 124,239 2,231,332 Texas Industries Inc. 90,127 2,217,124 Checkpoint Systems Inc./1/ 140,163 2,214,575 Commercial Metals Co. 119,832 2,201,314 Laclede Group Inc. (The) 81,485 2,200,910 Oxford Industries Inc. 34,187 2,194,805 Regal-Beloit Corp. 107,222 2,187,329 UIL Holdings Corp. 61,879 2,165,146 Too Inc./1/ 146,850 2,163,101 Rock-Tenn Co. Class A 148,318 2,162,476 Bowne & Co. Inc. 143,858 2,150,677 Stewart Information Services Corp./1/ 76,056 2,147,821 Paxar Corp./1/ 166,870 2,135,936 Rogers Corp./1/ 68,534 2,125,925 Watsco Inc. 110,938 2,120,025 JLG Industries Inc. 183,998 2,119,657 Imagistics International Inc./1/ 72,684 2,106,382 Thomas Industries Inc. 73,822 2,105,403 Woodward Governor Co. 47,720 2,085,841 Verity Inc./1/ 158,606 2,072,980 C&D Technologies Inc. 109,515 2,072,024 W-H Energy Services Inc./1/ 116,395 2,071,831 Remington Oil & Gas Corp./1/ 113,770 2,064,926 CIBER Inc./1/ 271,409 2,062,708 Kopin Corp./1/ 297,285 2,060,185 Monaco Coach Corp./1/ 124,183 2,055,229 Watts Industries Inc. Class A 116,239 2,048,131 Triumph Group Inc./1/ 67,835 2,021,483 Valmont Industries Inc. 102,078 2,020,124 Schulman (A.) Inc. 126,738 2,010,065 Insituform Technologies Inc. Class A/1/ 113,158 2,009,686 Standard Register Co. (The) 120,883 2,006,658 Teledyne Technologies Inc./1/ 137,664 2,003,011 Photon Dynamics Inc./1/ 68,663 2,001,526 Arch Chemicals Inc. 96,095 1,998,776 SurModics Inc./1/ 74,353 1,995,635 Viasat Inc./1/ 111,867 1,992,351 Websense Inc./1/ 93,643 1,991,787 General Communication Inc. Class A/1/ 239,229 1,990,385 Armor Holdings Inc./1/ 118,500 1,984,875 Hydril Co./1/ 97,326 1,971,825 ElkCorp 83,549 1,968,414 Offshore Logistics Inc./1/ 96,786 1,964,756 Phillips-Van Heusen Corp. 130,393 1,957,199 StarTek Inc. 61,084 1,954,688 Children's Place Retail Stores Inc. (The)/1/ 113,842 1,952,390 Cross Country Healthcare Inc./1/ 138,100 1,945,829 Datascope Corp. 63,191 1,942,491 Standard Microsystems Corp./1/ 71,966 1,941,643 Riggs National Corp. 122,699 1,932,509 Park Electrochemical Corp. 84,943 1,932,453 Mercury Computer Systems Inc./1/ 90,445 1,929,192 Shuffle Master Inc./1/ 70,912 1,927,388 International Multifoods Corp./1/ 82,533 1,927,146 Marcus Corp. 126,005 1,922,836 First Republic Bank 62,303 1,920,801 Tetra Technologies Inc./1/ 92,695 1,911,371 Belden Inc. 108,928 1,902,972 Papa John's International Inc./1/ 76,633 1,901,265 Presidential Life Corp. 125,519 1,899,102 GBC Bancorp 49,462 1,896,868 Central Parking Corp. 154,486 1,892,453 Microsemi Corp./1/ 123,844 1,887,383 ShopKo Stores Inc./1/ 125,095 1,876,425 Action Performance Companies Inc. 76,771 1,876,283 Biosite Inc./1/ 65,776 1,866,723 50 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P SMALLCAP 600 INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- Lone Star Steakhouse & Saloon Inc. 89,135 $ 1,862,921 Hooper Holmes Inc. 278,196 1,850,003 Universal Forest Products Inc. 76,084 1,846,559 Stewart & Stevenson Services Inc. 122,568 1,840,971 Ionics Inc./1/ 75,097 1,836,873 Stride Rite Corp. 169,281 1,828,235 Helix Technology Corp. 111,679 1,828,185 JDA Software Group Inc./1/ 122,552 1,822,348 Cash America International Inc. 110,794 1,817,022 Arctic Cat Inc. 93,657 1,810,390 CTS Corp. 146,842 1,807,625 Methode Electronics Inc. Class A 152,916 1,805,938 Information Holdings Inc./1/ 89,599 1,794,668 ESS Technology Inc./1/ 166,158 1,791,183 InVision Technologies Inc./1/ 73,523 1,789,550 OM Group Inc./1/ 121,932 1,785,084 Gymboree Corp./1/ 126,007 1,775,439 Spherion Corp./1/ 254,947 1,774,431 DuPont Photomasks Inc./1/ 77,669 1,763,863 Cohu Inc. 90,070 1,761,769 Cato Corp. Class A 87,293 1,760,700 Nautilus Group Inc. (The) 139,401 1,759,241 Wabash National Corp./1/ 109,836 1,751,884 Itron Inc./1/ 87,227 1,750,646 Pre-Paid Legal Services Inc./1/ 74,554 1,746,055 Steak n Shake Company (The)/1/ 116,228 1,731,797 Labor Ready Inc./1/ 172,081 1,729,414 Esterline Technologies Corp./1/ 89,562 1,727,651 CIMA Labs Inc./1/ 61,561 1,720,630 EDO Corp. 84,770 1,716,592 Haverty Furniture Companies Inc. 93,905 1,716,583 K2 Inc./1/ 115,291 1,712,071 Vicor Corp./1/ 179,553 1,711,140 Dress Barn Inc./1/ 124,709 1,708,513 Shaw Group Inc. (The)/1/ 162,315 1,705,931 Orthodontic Centers of America Inc./1/ 215,058 1,694,657 Sola International Inc./1/ 105,758 1,692,128 PAREXEL International Corp./1/ 109,859 1,683,040 GenCorp. Inc. 187,053 1,674,124 Prime Hospitality Corp./1/ 192,374 1,671,730 Frontier Oil Corp. 112,382 1,652,015 Lone Star Technologies Inc./1/ 122,230 1,648,883 MemberWorks Inc./1/ 51,816 1,648,785 Duane Reade Inc./1/ 103,365 1,648,672 Atlantic Coast Airlines Holdings Inc./1/ 193,687 1,648,276 Swift Energy Co./1/ 116,684 1,646,411 Harmonic Inc./1/ 260,119 1,630,946 Vital Sign Inc. 55,249 1,618,796 Applied Industrial Technologies Inc. 81,214 1,613,722 SOURCECORP Inc./1/ 69,378 1,613,039 Libbey Inc. 57,401 1,596,322 Schweitzer-Mauduit International Inc. 63,126 1,593,932 iDine Rewards Network Inc./1/ 97,774 1,588,827 Intermagnetics General Corp./1/ 70,763 1,582,261 ICU Medical Inc./1/ 58,105 1,581,037 ArthroCare Corp./1/ 88,608 1,578,995 Champion Enterprises Inc./1/ 243,246 1,544,612 PolyOne Corp. 392,854 1,543,916 Cable Design Technologies Corp./1/ 191,689 1,533,512 American States Water Co. 65,024 1,532,616 Roto-Rooter Inc. 42,249 1,501,952 Genesco Inc./1/ 93,515 1,501,851 Mesa Air Group Inc./1/ 135,265 1,501,441 Systems & Computer Technology Corp./1/ 143,939 1,501,284 PRG-Schultz International Inc./1/ 264,177 1,500,525 Nuevo Energy Co./1/ 82,311 1,495,591 Deltic Timber Corp. 51,174 1,479,952 New England Business Service Inc. 55,538 1,478,422 Chesapeake Corp. 65,572 1,477,993 Netegrity Inc./1/ 147,626 1,477,736 Pegasus Solutions Inc./1/ 106,193 1,468,649 Consolidated Graphics Inc./1/ 57,056 1,450,934 Gardner Denver Inc./1/ 69,009 1,449,879 SCHEDULES OF INVESTMENTS 51 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P SMALLCAP 600 INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- Buckeye Technologies Inc./1/ 159,052 $ 1,445,783 SWS Group Inc. 72,946 1,437,766 MRO Software Inc./1/ 105,034 1,433,714 Fleetwood Enterprises Inc./1/ 154,540 1,432,586 TALX Corp. 58,063 1,429,511 Atwood Oceanics Inc./1/ 59,557 1,428,772 Prima Energy Corp./1/ 54,804 1,383,801 RadiSys Corp./1/ 76,263 1,375,785 Goody's Family Clothing Inc. 139,376 1,374,247 Robbins & Myers Inc. 61,784 1,374,076 Rudolph Technologies Inc./1/ 70,051 1,352,685 Great Atlantic & Pacific Tea Co./1/ 165,663 1,343,527 DIMON Inc. 192,417 1,327,677 Heidrick & Struggles International Inc./1/ 78,087 1,322,013 OshKosh B'Gosh Inc. Class A 51,052 1,313,057 O'Charley's Inc./1/ 87,946 1,304,239 Planar Systems Inc./1/ 60,722 1,302,487 J&J Snack Foods Corp./1/ 37,288 1,297,622 Myers Industries Inc. 128,987 1,291,160 Jakks Pacific Inc./1/ 105,756 1,289,166 EPIQ Systems Inc./1/ 75,850 1,286,416 Savient Pharmaceuticals Inc./1/ 254,292 1,284,175 Concord Camera Corp./1/ 119,665 1,274,432 Wet Seal Inc. Class A/1/ 126,679 1,273,124 Artesyn Technologies Inc./1/ 166,467 1,261,820 Plains Resource Inc./1/ 101,060 1,258,197 Dril-Quip Inc./1/ 74,382 1,257,056 Standex International Corp. 51,642 1,254,901 SPSS Inc./1/ 74,266 1,252,867 Kaman Corp. Class A 96,381 1,249,098 Hancock Fabrics Inc. 78,865 1,244,490 Lance Inc. 125,175 1,244,239 Bally Total Fitness Holding Corp./1/ 143,321 1,239,727 Audiovox Corp. Class A/1/ 98,146 1,239,584 Bel Fuse Inc. Class B 46,897 1,239,019 Coinstar Inc./1/ 92,011 1,237,548 Apogee Enterprises Inc. 116,978 1,207,213 Agilysys Inc. 136,908 1,200,683 Sturm Ruger & Co. Inc. 115,764 1,194,684 Interface Inc. Class A/1/ 219,623 1,190,357 4Kids Entertainment Inc./1/ 56,269 1,187,276 Mobile Mini Inc./1/ 61,502 1,186,374 Possis Medical Inc./1/ 75,107 1,171,669 RehabCare Group Inc./1/ 67,963 1,158,769 Skyline Corp. 36,096 1,155,794 Hologic Inc./1/ 84,289 1,148,859 Veritas DGC Inc./1/ 143,484 1,145,002 Symmetricom Inc./1/ 180,661 1,143,584 Cleveland-Cliffs Inc./1/ 44,221 1,132,058 Central Vermont Public Service Corp. 50,934 1,129,716 Pericom Semiconductor Corp./1/ 110,477 1,104,770 Noven Pharmaceuticals Inc./1/ 96,774 1,103,224 AAR Corp./1/ 137,035 1,099,021 Lawson Products Inc. 40,826 1,096,178 Tower Automotive Inc./1/ 240,654 1,082,943 Volt Information Sciences Inc./1/ 65,465 1,080,173 Rainbow Technologies Inc./1/ 115,015 1,051,237 Caraustar Industries Inc./1/ 120,096 1,048,438 NUI Corp. 68,928 1,030,474 C-COR.net Corp./1/ 155,600 1,026,960 Wellman Inc. 136,401 1,024,372 Roxio Inc./1/ 117,627 1,019,826 Administaff Inc./1/ 114,308 1,016,198 Lindsay Manufacturing Co. 50,486 1,014,769 Pope & Talbot Inc. 66,886 1,011,316 National Presto Industries Inc. 29,325 1,007,020 X-Rite Inc. 86,759 982,112 Concord Communications Inc./1/ 74,966 981,305 Century Aluminum Co./1/ 90,291 979,657 Supertex Inc./1/ 54,468 977,156 Bei Technologies Inc. 62,579 976,232 Stein Mart Inc./1/ 178,113 974,278 Jill (J.) Group Inc. (The)/1/ 83,672 962,228 Curative Health Services Inc./1/ 53,415 954,526 RTI International Metals Inc./1/ 89,115 937,490 Tollgrade Communications Inc./1/ 58,331 937,379 Keithley Instruments Inc. 66,210 936,871 Quaker Chemical Corp. 39,981 929,958 Cascade Natural Gas Corp. 47,315 927,374 PC-Tel Inc./1/ 85,459 911,848 52 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P SMALLCAP 600 INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- Network Equipment Technologies Inc./1/ 96,842 $ 886,104 Astec Industries Inc./1/ 84,304 868,331 Standard Motor Products Inc. 84,909 857,581 Input/Output Inc./1/ 219,294 857,440 Nelson (Thomas) Inc./1/ 61,555 850,075 Midas Inc./1/ 64,171 844,490 Advanced Marketing Services Inc. 82,025 838,295 Ryerson Tull Inc. 106,802 833,056 Lydall Inc./1/ 68,455 822,145 Alliance Semiconductor Corp./1/ 150,738 820,015 Carreker Corp./1/ 99,717 802,722 Nash Finch Co. 51,196 793,538 Ziz Corp./1/ 96,639 783,742 Coachmen Industries Inc. 66,687 780,905 Pinnacle Entertainment Inc./1/ 111,183 778,281 Boston Communications Group Inc./1/ 77,361 771,367 Building Materials Holdings Corp. 57,164 748,848 NYFIX Inc./1/ 133,361 746,822 Radiant Systems Inc./1/ 118,106 739,344 Fedders Corp. 126,257 732,291 Theragenics Corp./1/ 127,808 728,506 Angelica Corp. 37,923 720,536 Brush Engineered Materials Inc./1/ 70,258 720,144 Department 56 Inc./1/ 55,867 709,511 Bell Microproducts Inc./1/ 107,571 700,287 Catapult Communications Corp./1/ 55,406 697,007 Captaris Inc./1/ 129,855 686,933 SBS Technologies Inc./1/ 62,422 677,279 Bassett Furniture Industries Inc. 49,959 676,944 Gerber Scientific Inc./1/ 94,721 672,519 Phoenix Technologies Ltd./1/ 103,677 650,055 MapInfo Corp./1/ 66,327 636,076 CPI Corp. 34,545 635,628 Material Sciences Corp. 60,133 614,559 Applica Inc./1/ 101,169 612,072 OMNOVA Solutions Inc./1/ 171,213 600,958 Osteotech Inc./1/ 72,980 597,706 Ultimate Electronics Inc./1/ 62,467 592,812 Midway Games Inc./1/ 198,783 588,398 Footstar Inc./1/ 86,774 586,592 On Assignment Inc./1/ 109,294 577,072 QRS Corp./1/ 67,808 576,368 Digi International Inc./1/ 86,778 574,384 Insurance Auto Auctions Inc./1/ 49,744 559,620 ArQule Inc./1/ 116,060 533,876 Steel Technologies Inc. 42,085 523,958 CryoLife Inc./1/ 84,054 517,773 Three-Five Systems Inc./1/ 91,631 504,887 Nature's Sunshine Products Inc. 59,976 497,801 Magnetek Inc./1/ 99,782 493,921 SCM Microsystems Inc./1/ 65,793 480,947 Salton Inc./1/ 48,210 479,690 Green Mountain Power Corp. 21,156 477,068 Intermet Corp. 110,389 474,673 Penford Corp. 36,502 474,526 Enesco Group Inc./1/ 59,303 474,424 Haggar Corp. 27,547 425,601 SCPIE Holdings Inc. 41,782 417,820 Concerto Software Inc./1/ 48,790 414,715 Brooktrout Inc./1/ 53,756 413,921 Butler Manufacturing Co. 27,074 411,254 IMCO Recycling Inc./1/ 65,021 399,879 Huffy Corp./1/ 64,065 390,796 Cross (A.T.) Co. Class A/1/ 64,735 388,410 Ashworth Inc./1/ 55,276 383,063 Metro One Telecommunications Inc./1/ 105,539 367,276 Milacron Inc. 145,973 335,738 Commonwealth Industries Inc. 68,663 326,149 Castle (A.M.) & Co./1/ 68,209 302,848 Meade Instruments Corp./1/ 83,451 277,057 Wolverine Tube Inc./1/ 51,761 218,949 TOTAL COMMON STOCKS (Cost: $1,646,139,761) 1,645,616,858 SCHEDULES OF INVESTMENTS 53 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P SMALLCAP 600 INDEX FUND September 30, 2003 SHARES OR SECURITY PRINCIPAL VALUE --------------------------------------------------------------------- SHORT TERM INVESTMENTS - 23.68% MONEY MARKET FUNDS - 14.14% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares/2/,/3/ 154,152,614 $ 154,152,614 Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares/2/,/3/ 57,356,535 57,356,535 BlackRock Temp Cash Money Market Fund/2/ 2,547,890 2,547,890 Short Term Investment Co. - Liquid Assets Money Market Portfolio/2/ 13,523,181 13,523,181 Short Term Investment Co. - Prime Money Market Portfolio, Institutional Shares/2/ 5,214,230 5,214,230 232,794,450 FLOATING RATE NOTES - 5.52% Beta Finance Inc. 1.08%, 05/20/04/2/ $ 2,607,115 2,606,867 1.08%, 09/15/04/2/ 5,214,230 5,213,732 1.17%, 08/23/04/2/ 2,607,115 2,609,116 CC USA Inc. 1.06%, 05/24/04/2/ 5,214,230 5,213,896 1.08%, 04/19/04/2/ 2,294,261 2,294,199 1.12%, 07/15/04/2/ 2,607,115 2,607,855 Dorada Finance Inc. 1.08%, 05/20/04/2/ 5,214,230 5,213,735 1.24%, 08/09/04/2/ 1,303,558 1,303,391 Five Finance Inc. 1.09%, 04/15/04/2/ 2,607,115 2,607,115 HBOS Treasury Services PLC 1.13%, 06/24/08/2/ 5,214,230 5,214,230 Holmes Financing PLC 1.08%, 04/15/04/2/ 1,042,846 1,042,846 K2 USA LLC 1.08%, 08/16/04/2/ 1,303,558 1,303,387 1.08%, 09/27/04/2/ 5,631,369 5,630,536 1.09%, 04/13/04/2/ 2,607,115 2,607,047 1.09%, 05/17/04/2/ 2,607,115 2,607,035 SECURITY PRINCIPAL VALUE --------------------------------------------------------------------- Links Finance LLC 1.05%, 07/20/04/2/ $ 2,085,692 $ 2,085,357 1.08%, 05/04/04/2/ 2,607,115 2,607,039 1.08%, 06/28/04/2/ 2,607,115 2,606,730 1.09%, 03/29/04/2/ 2,607,115 2,607,115 Nationwide Building Society 1.08%, 07/23/04/2/ 3,910,673 3,910,673 Sigma Finance Inc. 1.05%, 07/20/04/2/ 2,607,115 2,606,697 1.07%, 10/15/03/2/ 5,214,230 5,214,210 1.07%, 07/01/04/2/ 2,607,115 2,606,627 1.24%, 08/06/04/2/ 1,303,558 1,303,447 Tango Finance Corp. 1.05%, 07/15/04/2/ 1,564,269 1,563,861 1.06%, 07/06/04/2/ 1,564,269 1,564,147 WhistleJacket Capital LLC 1.08%, 09/15/04/2/ 2,607,115 2,606,617 White Pine Finance LLC 1.08%, 05/17/04/2/ 3,128,538 3,128,538 1.08%, 07/06/04/2/ 3,128,538 3,128,309 1.08%, 08/26/04/2/ 2,607,115 2,606,753 1.09%, 04/20/04/2/ 2,607,115 2,607,115 90,828,222 COMMERCIAL PAPER - 2.88% Amsterdam Funding Corp. 1.06%, 10/16/03/2/ 2,476,759 2,475,666 Blue Ridge Asset Funding Corp. 1.05%, 10/17/03/2/ 2,607,115 2,605,899 Edison Asset Securitization 1.07%, 10/23/03/2/ 4,901,377 4,898,172 Gemini Securitization Corp. 1.05%, 10/17/03/2/ 1,824,981 1,824,130 Greenwich Funding Corp. 1.06%, 10/16/03/2/ 3,076,396 3,075,037 Jupiter Securitization Corp. 1.05%, 10/20/03/2/ 2,607,115 2,605,670 New Center Asset Trust 1.06%, 10/22/03/2/ 2,607,115 2,605,503 Park Avenue Receivables Corp. 1.05%, 10/20/03/2/ 2,607,115 2,605,670 54 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P SMALLCAP 600 INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE --------------------------------------------------------------------- Preferred Receivables Funding Corp. 1.06%, 10/08/03/2/ $ 2,607,115 $ 2,606,578 Receivables Capital Corp. 1.05%, 10/15/03/2/ 1,752,399 1,751,684 Sydney Capital Corp. 1.07%, 10/17/03/2/ 2,111,763 2,110,759 UBS Finance (Delaware) Inc. 1.03%, 10/08/03/2/ 5,214,230 5,213,186 1.05%, 10/15/03/2/ 2,607,115 2,606,051 1.11%, 10/01/03/2/ 10,428,461 10,428,461 47,412,466 TIME DEPOSITS - 0.89% Abbey National Treasury Services PLC 1.15%, 10/01/03/2/ 2,607,115 2,607,115 Canadian Imperial Bank of Commerce 1.06%, 10/08/03/2/ 1,303,558 1,303,558 1.08%, 10/30/03/2/ 2,085,692 2,085,692 1.37%, 08/26/04/2/ 5,214,230 5,214,230 Toronto-Dominion Bank 1.33%, 08/23/04/2/ 3,389,250 3,387,724 14,598,319 REPURCHASE AGREEMENTS - 0.25% Lehman Brothers Inc. 1.10%, 10/01/03/2/ 4,171,384 4,171,384 4,171,384 TOTAL SHORT TERM INVESTMENTS (Cost: $389,804,841) 389,804,841 TOTAL INVESTMENTS IN SECURITIES - 123.65% (Cost $2,035,944,602) 2,035,421,699 OTHER ASSETS, LESS LIABILITIES - (23.65%) (389,263,683) -------------- NET ASSETS - 100.00% $1,646,158,016 ============== /1/ Non-income earning securities. /2/ All or a portion of this security represents investments of securities lending collateral. /3/ Issuer is an affiliate of the Fund's investment advisor. See Note 2. SEE NOTES TO FINANCIAL STATEMENTS. SCHEDULES OF INVESTMENTS 55 SCHEDULE OF INVESTMENTS (Unaudited) iSHARES S&P SMALLCAP 600/BARRA GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- COMMON STOCKS - 99.98% NVR Inc./1/ 18,461 $ 8,612,057 Harman International Industries Inc. 83,105 8,173,377 Cephalon Inc./1/ 143,364 6,583,275 Mid Atlantic Medical Services Inc./1/ 124,395 6,397,635 Zebra Technologies Corp. Class A/1/ 121,719 6,277,049 ITT Educational Services Inc./1/ 115,799 5,549,088 Performance Food Group Co./1/ 117,689 4,791,119 Alliant Techsystems Inc./1/ 99,690 4,790,105 Ryland Group Inc. 64,217 4,694,905 Scotts Co. (The) Class A/1/ 81,572 4,461,988 INAMED Corp./1/ 59,342 4,358,670 Renal Care Group Inc./1/ 126,727 4,327,727 Polaris Industries Inc. 56,134 4,162,336 Pacific Sunwear of California Inc./1/ 200,018 4,132,372 Medicis Pharmaceutical Corp. Class A 70,130 4,109,618 Shurgard Storage Centers Inc. Class A 116,109 4,098,648 Hudson United Bancorp 115,538 4,063,471 Avid Technology Inc./1/ 76,807 4,058,482 NBTY Inc./1/ 171,596 4,006,767 Thor Industries Inc. 73,807 3,987,054 FactSet Research Systems Inc. 86,510 3,836,719 ResMed Inc./1/ 85,804 3,773,660 IDEXX Laboratories Inc./1/ 88,554 3,762,659 Cymer Inc./1/ 90,626 3,733,791 Florida Rock Industries Inc. 74,151 3,677,890 Take-Two Interactive Software Inc./1/ 107,601 3,676,726 Respironics Inc./1/ 88,000 3,676,640 Regis Corp. 111,948 3,593,531 First Midwest Bancorp Inc. 120,174 3,570,370 Flagstar Bancorp Inc. 154,761 3,551,765 Roper Industries Inc. 81,355 3,543,010 Essex Property Trust Inc. 56,414 3,537,722 Oshkosh Truck Corp. 88,377 3,500,613 UCBH Holdings Inc. 115,678 3,496,946 Pharmaceutical Product Development Inc./1/ 144,370 3,463,436 Global Payments Inc. 95,992 3,455,712 Accredo Health Inc./1/ 123,362 3,452,902 Ethan Allen Interiors Inc. 95,837 3,450,132 Piedmont Natural Gas Co. 86,244 3,363,516 TECHNE Corp./1/ 105,261 3,346,247 Varian Semiconductor Equipment Associates Inc./1/ 88,721 3,322,601 Fred's Inc. 100,258 3,304,504 Cooper Companies Inc. 80,945 3,298,509 Southwest Bancorp of Texas Inc. 87,936 3,210,543 United Bancshares Inc. 106,808 3,198,900 CACI International Inc. Class A/1/ 74,175 3,178,399 UGI Corp. 109,858 3,178,192 First Bancorp 103,323 3,177,182 Patina Oil & Gas Corp. 87,341 3,165,238 Panera Bread Co. Class A/1/ 76,898 3,149,742 Tractor Supply Co./1/ 95,987 3,149,333 La-Z-Boy Inc. 141,133 3,133,153 Heartland Express Inc. 129,131 3,101,727 Idex Corp. 84,308 3,072,184 MGI Pharma Inc./1/ 77,335 3,036,172 P.F. Chang's China Bistro Inc./1/ 65,473 2,969,201 Cognex Corp. 111,288 2,925,762 Fossil Inc./1/ 120,368 2,916,517 Toro Co. 63,351 2,850,795 Tetra Tech Inc./1/ 138,645 2,760,422 Odyssey Healthcare Inc./1/ 92,346 2,753,758 Hot Topic Inc./1/ 122,104 2,752,224 Kronos Inc./1/ 51,922 2,747,193 Arbitron Inc./1/ 77,541 2,737,197 Mentor Corp. 120,025 2,736,570 Hilb, Rogal & Hamilton Co. 87,862 2,727,236 Evergreen Resources Inc./1/ 100,456 2,712,312 Diagnostic Products Corp. 74,162 2,694,305 East West Bancorp Inc. 62,105 2,654,989 Hyperion Solutions Corp./1/ 91,314 2,636,235 Urban Outfitters Inc./1/ 100,820 2,627,369 CEC Entertainment Inc./1/ 66,505 2,606,996 Simpson Manufacturing Co. Inc./1/ 63,645 2,602,444 Community First Bankshares Inc. 97,936 2,588,448 Waste Connections Inc./1/ 73,221 2,569,325 SCP Pool Corp./1/ 91,354 2,541,468 56 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P SMALLCAP 600/BARRA GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- Sonic Corp./1/ 100,358 $ 2,537,050 New Century Financial Corp. 89,366 2,530,845 New Jersey Resources Corp. 70,220 2,530,729 Power Integrations Inc./1/ 76,128 2,530,495 CLARCOR Inc. 64,529 2,516,631 Engineered Support Systems Inc. 41,559 2,514,320 Capital Automotive 82,131 2,505,817 Sybron Dental Specialties Inc./1/ 98,567 2,471,075 Commonwealth Telephone Enterprises Inc./1/ 61,094 2,451,702 Knight Transportation Inc./1/ 96,694 2,424,119 AMERIGROUP Corp./1/ 53,666 2,395,114 Landstar System Inc./1/ 39,107 2,386,309 Regeneron Pharmaceuticals Inc./1/ 134,626 2,378,841 TrustCo Bank Corp. NY 191,883 2,371,674 Priority Healthcare Corp. Class B/1/ 112,234 2,305,286 Christopher & Banks Corp. 96,313 2,298,028 Yellow Corp./1/ 76,348 2,281,278 Delta & Pine Land Co. 98,418 2,264,598 Quiksilver Inc./1/ 141,416 2,255,585 j2 Global Communications Inc./1/ 58,864 2,226,825 Flir Systems Inc./1/ 85,554 2,191,893 Cabot Oil & Gas Corp. 83,306 2,165,956 ADVO Inc./1/ 51,561 2,146,484 Dionex Corp./1/ 54,011 2,125,873 Unit Corp./1/ 112,639 2,122,119 MacDermid Inc. 80,011 2,116,291 Owens & Minor Inc. 86,984 2,096,314 Winnebago Industries Inc. 46,917 2,091,560 WebEx Communications Inc./1/ 108,097 2,052,762 Cost Plus Inc./1/ 55,286 2,041,159 ATMI Inc./1/ 79,614 2,011,846 Manhattan Associates Inc./1/ 76,405 1,978,125 Republic Bancorp Inc. 148,387 1,976,515 Wilson Greatbatch Technologies Inc./1/ 54,777 1,974,711 Georgia Gulf Corp. 83,908 1,959,252 SERENA Software Inc./1/ 104,522 1,944,109 Integra LifeSciences Holdings Corp./1/ 68,663 1,942,476 Trimble Navigation Ltd./1/ 83,840 1,940,896 Watson Wyatt & Co. Holdings/1/ 85,232 1,918,572 Progress Software Corp./1/ 88,864 1,910,576 Harland (John H.) Co. 72,093 1,908,302 Brady Corp. Class A 59,976 1,907,837 CAL Dive International Inc./1/ 97,362 1,892,717 NDCHealth Corp. 90,136 1,888,349 FileNET Corp./1/ 93,940 1,885,376 BARRA Inc./1/ 49,735 1,867,549 St. Mary Land & Exploration Co. 72,598 1,838,181 Electronics Boutique Holdings Corp./1/ 64,334 1,838,022 American Medical Systems Holdings Inc./1/ 84,691 1,837,795 Argosy Gaming Co./1/ 75,280 1,836,832 DSP Group Inc./1/ 72,827 1,814,121 Wintrust Financial Corp. 48,027 1,809,177 Baldor Electric Co. 84,588 1,785,653 American Italian Pasta Co. Class A/1/ 46,092 1,783,299 Cubic Corp. 69,132 1,736,596 Kaydon Corp. 72,474 1,720,533 PolyMedica Corp. 64,210 1,701,565 American Healthways Inc./1/ 40,373 1,695,262 CUNO Inc./1/ 43,139 1,690,622 AmSurg Corp./1/ 51,207 1,689,319 Maverick Tube Corp./1/ 108,435 1,682,911 Ultratech Inc./1/ 59,062 1,666,730 United Natural Foods Inc./1/ 49,984 1,658,969 Movie Gallery Inc./1/ 83,616 1,643,054 K-Swiss Inc. Class A 45,649 1,642,908 Inter-Tel Inc. 64,676 1,587,796 Dendrite International Inc./1/ 104,281 1,584,028 Advanced Energy Industries Inc./1/ 83,254 1,571,003 Actel Corp./1/ 64,025 1,534,679 Centene Corp./1/ 50,376 1,530,927 MICROS Systems Inc./1/ 44,828 1,530,876 Forward Air Corp./1/ 55,119 1,524,040 Sierra Health Services Inc./1/ 73,698 1,514,494 Dime Community Bancshares 65,667 1,510,341 Enzo Biochem Inc./1/ 77,291 1,507,947 Oceaneering International Inc./1/ 62,221 1,463,438 CARBO Ceramics Inc. 40,200 1,453,632 SCHEDULES OF INVESTMENTS 57 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P SMALLCAP 600/BARRA GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- Kulicke & Soffa Industries Inc./1/ 129,046 $ 1,398,859 Boston Private Financial Holdings Inc. 58,781 1,384,880 Pinnacle Systems Inc./1/ 163,236 1,376,079 ANSYS Inc./1/ 38,630 1,372,910 Sterling Bancshares Inc. 114,337 1,364,040 WD-40 Co. 43,002 1,362,733 Advanced Medical Optics Inc./1/ 75,261 1,351,688 Too Inc./1/ 88,721 1,306,860 Rogers Corp./1/ 41,525 1,288,106 Verity Inc./1/ 96,106 1,256,105 W-H Energy Services Inc./1/ 70,248 1,250,414 Kopin Corp./1/ 180,087 1,248,003 Remington Oil & Gas Corp./1/ 68,662 1,246,215 Teledyne Technologies Inc./1/ 83,480 1,214,634 Photon Dynamics Inc./1/ 41,602 1,212,698 SurModics Inc./1/ 45,077 1,209,867 Websense Inc./1/ 56,784 1,207,796 ElkCorp 50,674 1,193,879 Hydril Co./1/ 58,745 1,190,174 StarTek Inc. 36,865 1,179,680 Mercury Computer Systems Inc./1/ 54,855 1,170,057 Shuffle Master Inc./1/ 42,796 1,163,195 Tetra Technologies Inc./1/ 56,148 1,157,772 Papa John's International Inc./1/ 46,449 1,152,400 GBC Bancorp 29,990 1,150,117 Microsemi Corp./1/ 75,091 1,144,387 Biosite Inc./1/ 39,772 1,128,729 Helix Technology Corp. 67,730 1,108,740 Arctic Cat Inc. 56,485 1,091,855 Gymboree Corp./1/ 76,046 1,071,488 Cohu Inc. 54,366 1,063,399 Wabash National Corp./1/ 66,588 1,062,079 Itron Inc./1/ 52,830 1,060,298 Pre-Paid Legal Services Inc./1/ 44,953 1,052,799 Steak n Shake Company (The)/1/ 70,129 1,044,922 Labor Ready Inc./1/ 103,833 1,043,522 Frontier Oil Corp. 67,811 996,822 Lone Star Technologies Inc./1/ 73,764 995,076 MemberWorks Inc./1/ 31,268 994,948 Harmonic Inc./1/ 156,889 983,694 Libbey Inc. 34,743 966,203 iDine Rewards Network Inc./1/ 58,997 958,701 ICU Medical Inc./1/ 35,037 953,357 ArthroCare Corp./1/ 53,417 951,891 Champion Enterprises Inc./1/ 147,326 935,520 New England Business Service Inc. 33,689 896,801 Netegrity Inc./1/ 89,063 891,521 Prima Energy Corp./1/ 33,061 834,790 OshKosh B'Gosh Inc. Class A 30,790 791,919 Planar Systems Inc./1/ 36,575 784,534 EPIQ Systems Inc./1/ 46,069 781,330 Plains Resource Inc./1/ 61,134 761,118 Hancock Fabrics Inc. 47,978 757,093 Coinstar Inc./1/ 55,663 748,667 Possis Medical Inc./1/ 45,491 709,660 Noven Pharmaceuticals Inc./1/ 58,368 665,395 Rainbow Technologies Inc./1/ 69,120 631,757 Administaff Inc./1/ 68,949 612,957 Lindsay Manufacturing Co. 30,450 612,045 X-Rite Inc. 52,563 595,013 Concord Communications Inc./1/ 45,439 594,797 Supertex Inc./1/ 32,849 589,311 Bei Technologies Inc. 37,734 588,650 Jill (J.) Group Inc. (The)/1/ 50,795 584,143 Keithley Instruments Inc. 40,169 568,391 Quaker Chemical Corp. 24,274 564,613 PC-Tel Inc./1/ 51,707 551,714 Carreker Corp./1/ 60,103 483,829 Ziz Corp./1/ 58,489 474,346 Boston Communications Group Inc./1/ 46,864 467,281 CPI Corp. 20,782 382,389 Osteotech Inc./1/ 44,231 362,252 CryoLife Inc./1/ 50,680 312,189 TOTAL COMMON STOCKS (Cost: $448,891,515) 499,121,661 58 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P SMALLCAP 600/BARRA GROWTH INDEX FUND September 30, 2003 SHARES OR SECURITY PRINCIPAL VALUE --------------------------------------------------------------------- SHORT TERM INVESTMENTS - 23.32% MONEY MARKET FUNDS - 13.93% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares/2/,/3/ 46,031,723 $ 46,031,723 Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares/2/,/3/ 17,133,275 17,133,275 BlackRock Temp Cash Money Market Fund/2/ 761,094 761,094 Short Term Investment Co. - Liquid Assets Money Market Portfolio/2/ 4,039,582 4,039,582 Short Term Investment Co. - Prime Money Market Portfolio, Institutional Shares/2/ 1,557,570 1,557,570 69,523,244 FLOATING RATE NOTES - 5.43% Beta Finance Inc. 1.08%, 05/20/04/2/ $ 778,785 778,711 1.08%, 09/15/04/2/ 1,557,570 1,557,422 1.17%, 08/23/04/2/ 778,785 779,383 CC USA Inc. 1.06%, 05/24/04/2/ 1,557,570 1,557,471 1.08%, 04/19/04/2/ 685,331 685,312 1.12%, 07/15/04/2/ 778,785 779,006 Dorada Finance Inc. 1.08%, 05/20/04/2/ 1,557,570 1,557,422 1.24%, 08/09/04/2/ 389,393 389,343 Five Finance Inc. 1.09%, 04/15/04/2/ 778,785 778,785 HBOS Treasury Services PLC 1.13%, 06/24/08/2/ 1,557,570 1,557,570 Holmes Financing PLC 1.08%, 04/15/04/2/ 311,514 311,514 K2 USA LLC 1.08%, 08/16/04/2/ 389,393 389,342 1.08%, 09/27/04/2/ 1,682,176 1,681,927 1.09%, 04/13/04/2/ 778,785 778,765 1.09%, 05/17/04/2/ 778,785 778,761 SECURITY PRINCIPAL VALUE --------------------------------------------------------------------- Links Finance LLC 1.05%, 07/20/04/2/ $ 623,028 $ 622,928 1.08%, 05/04/04/2/ 778,785 778,762 1.08%, 06/28/04/2/ 778,785 778,670 1.09%, 03/29/04/2/ 778,785 778,785 Nationwide Building Society 1.08%, 07/23/04/2/ 1,168,178 1,168,178 Sigma Finance Inc. 1.05%, 07/20/04/2/ 778,785 778,660 1.07%, 10/15/03/2/ 1,557,570 1,557,564 1.07%, 07/01/04/2/ 778,785 778,639 1.24%, 08/06/04/2/ 389,393 389,360 Tango Finance Corp. 1.05%, 07/15/04/2/ 467,271 467,149 1.06%, 07/06/04/2/ 467,271 467,235 WhistleJacket Capital LLC 1.08%, 09/15/04/2/ 778,785 778,636 White Pine Finance LLC 1.08%, 05/17/04/2/ 934,542 934,542 1.08%, 07/06/04/2/ 934,542 934,474 1.08%, 08/26/04/2/ 778,785 778,677 1.09%, 04/20/04/2/ 778,785 778,785 27,131,778 COMMERCIAL PAPER - 2.84% Amsterdam Funding Corp. 1.06%, 10/16/03/2/ 739,846 739,519 Blue Ridge Asset Funding Corp. 1.05%, 10/17/03/2/ 778,785 778,422 Edison Asset Securitization 1.07%, 10/23/03/2/ 1,464,116 1,463,159 Gemini Securitization Corp. 1.05%, 10/17/03/2/ 545,150 544,895 Greenwich Funding Corp. 1.06%, 10/16/03/2/ 918,967 918,561 Jupiter Securitization Corp. 1.05%, 10/20/03/2/ 778,785 778,354 New Center Asset Trust 1.06%, 10/22/03/2/ 778,785 778,304 Park Avenue Receivables Corp. 1.05%, 10/20/03/2/ 778,785 778,354 SCHEDULES OF INVESTMENTS 59 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P SMALLCAP 600/BARRA GROWTH INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE --------------------------------------------------------------------- Preferred Receivables Funding Corp. 1.06%, 10/08/03/2/ $ 778,785 $ 778,625 Receivables Capital Corp. 1.05%, 10/15/03/2/ 523,468 523,255 Sydney Capital Corp. 1.07%, 10/17/03/2/ 630,816 630,516 UBS Finance (Delaware) Inc. 1.03%, 10/08/03/2/ 1,557,570 1,557,259 1.05%, 10/15/03/2/ 778,785 778,467 1.11%, 10/01/03/2/ 3,115,141 3,115,141 14,162,831 TIME DEPOSITS - 0.87% Abbey National Treasury Services PLC 1.15%, 10/01/03/2/ 778,785 778,785 Canadian Imperial Bank of Commerce 1.06%, 10/08/03/2/ 389,393 389,393 1.08%, 10/30/03/2/ 623,028 623,028 1.37%, 08/26/04/2/ 1,557,570 1,557,570 Toronto-Dominion Bank 1.33%, 08/23/04/2/ 1,012,421 1,011,966 4,360,742 REPURCHASE AGREEMENTS - 0.25% Lehman Brothers Inc. 1.10%, 10/01/03/2/ 1,246,056 1,246,056 1,246,056 TOTAL SHORT TERM INVESTMENTS (Cost: $116,424,651) 116,424,651 TOTAL INVESTMENTS IN SECURITIES - 123.30% (Cost $565,316,166) 615,546,312 OTHER ASSETS, LESS LIABILITIES - (23.30%) (116,319,378) -------------- NET ASSETS - 100.00% $ 499,226,934 ============== /1/ Non-income earning securities. /2/ All or a portion of this security represents investments of securities lending collateral. /3/ Issuer is an affiliate of the Fund's investment advisor. See Note 2. SEE NOTES TO FINANCIAL STATEMENTS. 60 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) iSHARES S&P SMALLCAP 600/BARRA VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- COMMON STOCKS - 99.94% Newfield Exploration Co./1/ 199,894 $ 7,709,912 Raymond James Financial Inc. 174,072 6,327,517 Jeffries Group Inc. 196,362 5,645,408 M.D.C. Holdings Inc. 103,880 5,609,520 AnnTaylor Stores Corp./1/ 158,738 5,101,839 Whitney Holding Corp. 144,427 4,910,518 Skyworks Solutions Inc./1/ 530,464 4,827,222 AptarGroup Inc. 129,535 4,752,639 Downey Financial Corp. 100,197 4,682,206 Timken Co. (The) 306,675 4,673,727 Energen Corp. 128,857 4,662,046 Briggs & Stratton Corp. 77,586 4,558,953 United Stationers Inc./1/ 118,686 4,472,088 Southern Union Co./1/ 260,735 4,432,495 Standard-Pacific Corp. 116,504 4,415,502 Zale Corp./1/ 97,953 4,350,093 Atmos Energy Corp. 179,360 4,293,878 Tom Brown Inc./1/ 163,128 4,192,390 South Financial Group Inc. (The) 168,161 4,185,527 Invacare Corp. 110,778 4,163,037 Corn Products International Inc. 129,400 4,121,390 Staten Island Bancorp Inc. 210,035 4,085,181 Cerner Corp./1/ 126,551 3,906,629 Chittenden Corp. 130,718 3,888,860 Commercial Federal Corp. 157,763 3,841,529 Pediatrix Medical Group Inc./1/ 82,590 3,803,270 Linens 'N Things Inc./1/ 158,501 3,769,154 Benchmark Electronics Inc./1/ 88,837 3,755,140 Flowers Foods Inc. 161,711 3,687,011 Susquehanna Bancshares Inc. 142,336 3,658,035 Philadelphia Consolidated Holding Corp./1/ 78,447 3,624,251 Men's Wearhouse Inc. (The)/1/ 141,268 3,623,524 Albany International Corp. Class A 116,965 3,607,201 Massey Energy Co. 270,208 3,593,766 SkyWest Inc. 206,816 3,582,053 MAF Bancorp Inc. 93,739 3,580,830 Roadway Corp. 71,189 3,471,888 Fremont General Corp. 271,694 3,453,231 Alpharma Inc. Class A 184,828 3,437,801 Delphi Financial Group Inc. Class A 73,501 3,419,267 Colonial Properties Trust 92,844 3,345,169 Stone Energy Corp./1/ 94,520 3,334,666 Gables Residential Trust 98,547 3,185,039 Kellwood Co. 94,915 3,174,907 Mueller Industries Inc./1/ 123,099 3,132,870 USF Corp. 97,496 3,068,199 Hutchinson Technology Inc./1/ 92,654 3,066,847 Lennox International Inc. 209,667 3,063,235 LandAmerica Financial Group Inc. 66,499 3,048,314 Brookline Bancorp Inc. 206,676 3,042,271 Burlington Coat Factory Warehouse Corp. 159,788 2,988,036 Rare Hospitality International Inc./1/ 119,594 2,979,087 RLI Corp. 90,104 2,966,224 Anixter International Inc./1/ 129,814 2,955,865 Pep Boys-Manny, Moe & Jack Inc. 193,165 2,955,425 Adaptec Inc./1/ 386,947 2,925,319 Axcelis Technologies Inc./1/ 353,904 2,923,247 Cimarex Energy Co./1/ 148,925 2,918,930 Smith (A.O.) Corp. 104,207 2,918,838 Ralcorp Holdings Inc./1/ 103,658 2,871,327 Selective Insurance Group Inc. 96,468 2,870,888 Spinnaker Exploration Co./1/ 119,094 2,858,256 Kilroy Realty Corp. 98,986 2,826,050 Group 1 Automotive Inc./1/ 80,869 2,793,215 Wolverine World Wide Inc. 143,100 2,776,140 Kroll Inc./1/ 149,092 2,773,111 Brooks Automation Inc./1/ 132,680 2,773,012 Cleco Corp. 169,525 2,770,038 FEI Co./1/ 117,893 2,751,623 Southwest Gas Corp. 121,052 2,747,880 Hughes Supply Inc. 84,170 2,731,317 Avista Corp. 172,928 2,694,218 Acuity Brands Inc. 148,928 2,689,640 Northwest Natural Gas Co. 92,056 2,669,624 Technitrol Inc./1/ 144,119 2,653,231 Coherent Inc./1/ 106,556 2,624,474 Curtiss-Wright Corp. 36,922 2,607,432 G&K Services Inc. Class A 74,378 2,603,230 SCHEDULES OF INVESTMENTS 61 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P SMALLCAP 600/BARRA VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- Black Box Corp. 65,302 $ 2,599,673 Steel Dynamics Inc./1/ 170,877 2,587,078 MAXIMUS Inc./1/ 74,719 2,574,070 IHOP Corp. 77,229 2,536,973 Reliance Steel & Aluminum Co. 113,949 2,528,528 Insight Enterprises Inc./1/ 165,506 2,519,001 Vintage Petroleum Inc. 229,918 2,501,508 Casey's General Store Inc. 178,093 2,498,645 ABM Industries Inc. 176,545 2,498,112 CH Energy Group Inc. 56,626 2,491,544 Russ Berrie & Co. Inc. 73,729 2,483,930 Provident Bankshares Corp. 87,817 2,480,830 Kirby Corp./1/ 86,435 2,480,685 Fuller (H.B.) Co. 101,806 2,470,832 Aaron Rents Inc. 116,845 2,447,903 Kansas City Southern Industries Inc./1/ 221,127 2,447,876 Photronics Inc./1/ 114,936 2,443,539 Arkansas Best Corp. 88,765 2,441,037 SEACOR SMIT Inc./1/ 67,347 2,435,941 Irwin Financial Corp. 100,159 2,433,864 WMS Industries Inc./1/ 107,289 2,431,169 Waypoint Financial Corp. 120,923 2,418,460 Lexington Corp. Properties Trust 125,610 2,406,688 FirstFed Financial Corp./1/ 60,889 2,405,116 Southwestern Energy Co./1/ 127,449 2,306,827 Analogic Corp. 47,928 2,300,544 Jack in the Box Inc./1/ 129,157 2,298,995 UniSource Energy Corp. 120,480 2,291,530 EMCOR Group Inc./1/ 53,755 2,287,275 URS Corp./1/ 116,984 2,269,490 Province Healthcare Co./1/ 174,767 2,263,233 THQ Inc./1/ 137,818 2,262,972 US Oncology Inc./1/ 308,800 2,257,328 BankUnited Financial Corp. Class A/1/ 105,863 2,231,592 Hain Celestial Group Inc./1/ 122,137 2,214,344 Aztar Corp./1/ 124,310 2,201,530 Triarc Companies Inc. Class B 210,986 2,194,254 NCO Group Inc./1/ 93,029 2,183,391 Viasys Healthcare Inc./1/ 107,374 2,168,955 CONMED Corp./1/ 103,811 2,142,659 Cambrex Corp. 92,415 2,097,820 Electro Scientific Industries Inc./1/ 99,526 2,097,013 Veeco Instruments Inc./1/ 105,034 2,096,479 Aeroflex Inc./1/ 236,713 2,094,910 Barnes Group Inc. 80,527 2,090,481 UICI/1/ 166,636 2,089,615 SPS Technologies Inc./1/ 46,384 2,087,280 eFunds Corp./1/ 167,875 2,073,256 Tredegar Corp. 136,551 2,055,093 Manitowoc Co. Inc. (The) 94,714 2,054,347 Exar Corp./1/ 144,776 2,045,685 Frontier Airlines Inc./1/ 123,862 2,038,769 Haemonetics Corp./1/ 86,329 2,038,228 Landry's Restaurants Inc. 98,862 2,036,557 Financial Federal Corp./1/ 66,425 2,026,627 Brown Shoe Co. Inc. 63,717 2,019,829 Jo-Ann Stores Inc./1/ 71,731 2,001,295 Sunrise Senior Living Inc./1/ 76,104 1,996,208 El Paso Electric Co./1/ 172,828 1,996,163 Anchor BanCorp Wisconsin Inc. 84,199 1,976,993 TBC Corp./1/ 77,574 1,943,229 Seacoast Financial Services Corp. 93,713 1,940,796 DRS Technologies Inc./1/ 80,416 1,940,438 American Management Systems Inc./1/ 151,949 1,937,350 Ryan's Family Steak Houses Inc./1/ 151,106 1,932,646 Quanex Corp. 57,497 1,931,899 Griffon Corp./1/ 106,199 1,907,334 Russell Corp. 116,386 1,897,092 School Specialty Inc./1/ 66,981 1,889,534 Global Imaging Systems Inc./1/ 76,661 1,885,861 Glenborough Realty Trust Inc. 99,673 1,879,833 CDI Corp. 69,498 1,878,531 Zenith National Insurance Corp. 67,356 1,873,844 Texas Industries Inc. 75,532 1,858,087 Checkpoint Systems Inc./1/ 117,346 1,854,067 Oxford Industries Inc. 28,820 1,850,244 Commercial Metals Co. 100,457 1,845,395 Laclede Group Inc. (The) 68,296 1,844,675 Regal-Beloit Corp. 89,872 1,833,389 62 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P SMALLCAP 600/BARRA VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- Rock-Tenn Co. Class A 124,596 $ 1,816,610 UIL Holdings Corp. 51,860 1,814,581 Stewart Information Services Corp./1/ 63,980 1,806,795 Bowne & Co. Inc. 120,785 1,805,736 Paxar Corp./1/ 139,713 1,788,326 Watsco Inc. 93,141 1,779,925 JLG Industries Inc. 154,493 1,779,759 Imagistics International Inc./1/ 60,796 1,761,868 Thomas Industries Inc. 61,564 1,755,805 Woodward Governor Co. 39,914 1,744,641 C&D Technologies Inc. 91,946 1,739,618 CIBER Inc./1/ 227,084 1,725,838 Monaco Coach Corp./1/ 104,276 1,725,768 Watts Industries Inc. Class A 97,423 1,716,593 Triumph Group Inc./1/ 56,956 1,697,289 Valmont Industries Inc. 85,555 1,693,133 Insituform Technologies Inc. Class A/1/ 95,070 1,688,443 Standard Register Co. (The) 101,313 1,681,796 Schulman (A.) Inc. 105,888 1,679,384 Arch Chemicals Inc. 80,543 1,675,294 Viasat Inc./1/ 93,819 1,670,916 General Communication Inc. Class A/1/ 200,507 1,668,218 Armor Holdings Inc./1/ 98,954 1,657,479 Offshore Logistics Inc./1/ 80,726 1,638,738 Children's Place Retail Stores Inc. (The)/1/ 95,409 1,636,264 Phillips-Van Heusen Corp. 108,924 1,634,949 Cross Country Healthcare Inc./1/ 115,747 1,630,875 Datascope Corp. 52,960 1,627,990 Standard Microsystems Corp./1/ 60,027 1,619,528 Marcus Corp. 105,803 1,614,554 Park Electrochemical Corp. 70,965 1,614,454 Riggs National Corp. 102,485 1,614,139 First Republic Bank 52,277 1,611,700 International Multifoods Corp./1/ 68,835 1,607,297 Presidential Life Corp. 105,386 1,594,490 Belden Inc. 90,996 1,589,700 Central Parking Corp. 129,467 1,585,971 ShopKo Stores Inc./1/ 104,399 1,565,985 Action Performance Companies Inc. 64,072 1,565,920 Lone Star Steakhouse & Saloon Inc. 74,457 1,556,151 Hooper Holmes Inc. 232,359 1,545,187 Universal Forest Products Inc. 63,556 1,542,504 Ionics Inc./1/ 63,051 1,542,227 Stewart & Stevenson Services Inc. 102,408 1,538,168 Stride Rite Corp. 141,248 1,525,478 JDA Software Group Inc./1/ 102,392 1,522,569 CTS Corp. 123,486 1,520,113 Cash America International Inc. 92,395 1,515,278 Methode Electronics Inc. Class A 127,878 1,510,239 InVision Technologies Inc./1/ 61,647 1,500,488 Information Holdings Inc./1/ 74,912 1,500,487 ESS Technology Inc./1/ 138,544 1,493,504 OM Group Inc./1/ 101,755 1,489,693 Spherion Corp./1/ 212,909 1,481,847 Nautilus Group Inc. (The) 116,821 1,474,281 Cato Corp. Class A 73,079 1,474,003 DuPont Photomasks Inc./1/ 64,891 1,473,675 CIMA Labs Inc./1/ 51,730 1,445,853 Esterline Technologies Corp./1/ 74,730 1,441,542 K2 Inc./1/ 96,833 1,437,970 Haverty Furniture Companies Inc. 78,425 1,433,609 Dress Barn Inc./1/ 104,637 1,433,527 EDO Corp. 70,788 1,433,457 Vicor Corp./1/ 150,006 1,429,557 Shaw Group Inc. (The)/1/ 135,559 1,424,725 Sola International Inc./1/ 88,748 1,419,968 Orthodontic Centers of America Inc./1/ 180,124 1,419,377 PAREXEL International Corp./1/ 92,101 1,410,987 GenCorp. Inc. 156,222 1,398,187 Prime Hospitality Corp./1/ 160,490 1,394,658 Swift Energy Co./1/ 97,962 1,382,244 Atlantic Coast Airlines Holdings Inc./1/ 162,290 1,381,088 Duane Reade Inc./1/ 86,265 1,375,927 Vital Sign Inc. 46,301 1,356,619 SCHEDULES OF INVESTMENTS 63 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P SMALLCAP 600/BARRA VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- Applied Industrial Technologies Inc. 68,084 $ 1,352,829 SOURCECORP Inc./1/ 57,998 1,348,454 Schweitzer-Mauduit International Inc. 53,059 1,339,740 Intermagnetics General Corp./1/ 59,040 1,320,134 PolyOne Corp. 329,036 1,293,111 Cable Design Technologies Corp./1/ 160,766 1,286,128 American States Water Co. 54,482 1,284,141 Systems & Computer Technology Corp./1/ 120,676 1,258,651 Nuevo Energy Co./1/ 69,038 1,254,420 PRG-Schultz International Inc./1/ 220,780 1,254,030 Mesa Air Group Inc./1/ 112,949 1,253,734 Genesco Inc./1/ 78,006 1,252,776 Roto-Rooter Inc. 35,230 1,252,427 Chesapeake Corp. 54,914 1,237,762 Deltic Timber Corp. 42,702 1,234,942 Pegasus Solutions Inc./1/ 88,935 1,229,971 Consolidated Graphics Inc./1/ 47,848 1,216,775 Gardner Denver Inc./1/ 57,531 1,208,726 Buckeye Technologies Inc./1/ 132,657 1,205,852 SWS Group Inc. 60,872 1,199,787 TALX Corp. 48,663 1,198,083 MRO Software Inc./1/ 87,621 1,196,027 Fleetwood Enterprises Inc./1/ 128,941 1,195,283 Atwood Oceanics Inc./1/ 49,663 1,191,415 Goody's Family Clothing Inc. 116,833 1,151,973 RadiSys Corp./1/ 63,643 1,148,120 Robbins & Myers Inc. 51,543 1,146,316 Rudolph Technologies Inc./1/ 58,781 1,135,061 Great Atlantic & Pacific Tea Co./1/ 138,162 1,120,494 DIMON Inc. 160,491 1,107,388 Heidrick & Struggles International Inc./1/ 65,123 1,102,532 O'Charley's Inc./1/ 74,274 1,101,483 J&J Snack Foods Corp./1/ 31,283 1,088,648 Myers Industries Inc. 107,967 1,080,750 Jakks Pacific Inc./1/ 88,221 1,075,414 Savient Pharmaceuticals Inc./1/ 212,082 1,071,014 Concord Camera Corp./1/ 100,265 1,067,822 Wet Seal Inc. Class A/1/ 106,036 1,065,662 Artesyn Technologies Inc./1/ 138,871 1,052,642 Dril-Quip Inc./1/ 62,044 1,048,544 Kaman Corp. Class A 80,904 1,048,516 Bally Total Fitness Holding Corp./1/ 121,132 1,047,792 Standex International Corp. 43,073 1,046,674 SPSS Inc./1/ 61,921 1,044,607 Bel Fuse Inc. Class B 39,301 1,038,332 Audiovox Corp. Class A/1/ 82,210 1,038,312 Lance Inc. 104,415 1,037,885 Apogee Enterprises Inc. 97,580 1,007,026 Agilysys Inc. 114,749 1,006,349 Interface Inc. Class A/1/ 184,533 1,000,169 Sturm Ruger & Co. Inc. 96,479 995,663 4Kids Entertainment Inc./1/ 47,124 994,316 Mobile Mini Inc./1/ 51,303 989,635 RehabCare Group Inc./1/ 57,059 972,856 Skyline Corp. 30,102 963,866 Hologic Inc./1/ 70,643 962,864 Symmetricom Inc./1/ 151,275 957,571 Veritas DGC Inc./1/ 119,684 955,078 Cleveland-Cliffs Inc./1/ 37,040 948,224 Central Vermont Public Service Corp. 42,478 942,162 Pericom Semiconductor Corp./1/ 92,131 921,310 AAR Corp./1/ 114,290 916,606 Lawson Products Inc. 34,049 914,216 Tower Automotive Inc./1/ 201,741 907,835 Volt Information Sciences Inc./1/ 54,596 900,834 Caraustar Industries Inc./1/ 100,151 874,318 C-COR.net Corp./1/ 130,650 862,290 NUI Corp. 57,493 859,520 Wellman Inc. 114,391 859,076 Roxio Inc./1/ 98,769 856,327 Pope & Talbot Inc. 56,118 848,504 National Presto Industries Inc. 24,460 839,956 Century Aluminum Co./1/ 75,617 820,444 Stein Mart Inc./1/ 149,155 815,878 Curative Health Services Inc./1/ 45,227 808,206 RTI International Metals Inc./1/ 74,754 786,412 Tollgrade Communications Inc./1/ 48,638 781,613 64 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P SMALLCAP 600/BARRA VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE --------------------------------------------------------------------- Cascade Natural Gas Corp. 39,751 $ 779,120 Network Equipment Technologies Inc./1/ 81,926 749,623 Astec Industries Inc./1/ 70,613 727,314 Input/Output Inc./1/ 183,874 718,947 Nelson (Thomas) Inc./1/ 51,557 712,002 Standard Motor Products Inc. 70,331 710,343 Midas Inc./1/ 53,962 710,140 Advanced Marketing Services Inc. 68,372 698,762 Ryerson Tull Inc. 89,041 694,520 Lydall Inc./1/ 57,700 692,977 Alliance Semiconductor Corp./1/ 125,712 683,873 Nash Finch Co. 42,888 664,764 Coachmen Industries Inc. 55,997 655,725 Pinnacle Entertainment Inc./1/ 93,056 651,392 NYFIX Inc./1/ 111,781 625,974 Building Materials Holdings Corp. 47,651 624,228 Radiant Systems Inc./1/ 99,024 619,890 Fedders Corp. 106,365 616,917 Theragenics Corp./1/ 107,369 612,003 Brush Engineered Materials Inc./1/ 59,442 609,280 Angelica Corp. 31,612 600,628 Department 56 Inc./1/ 46,929 595,998 Bell Microproducts Inc./1/ 90,377 588,354 Catapult Communications Corp./1/ 46,174 580,869 Captaris Inc./1/ 108,721 575,134 SBS Technologies Inc./1/ 52,409 568,638 Gerber Scientific Inc./1/ 79,501 564,457 Bassett Furniture Industries Inc. 41,636 564,168 Phoenix Technologies Ltd./1/ 86,940 545,114 MapInfo Corp./1/ 55,285 530,183 Material Sciences Corp. 50,760 518,767 Applica Inc./1/ 84,323 510,154 OMNOVA Solutions Inc./1/ 143,291 502,951 Ultimate Electronics Inc./1/ 52,324 496,555 Midway Games Inc./1/ 166,758 493,604 Footstar Inc./1/ 72,339 489,012 QRS Corp./1/ 56,874 483,429 Digi International Inc./1/ 72,974 483,015 On Assignment Inc./1/ 90,416 477,396 Insurance Auto Auctions Inc./1/ 41,450 466,313 ArQule Inc./1/ 98,846 454,692 Steel Technologies Inc. 35,039 436,236 Magnetek Inc./1/ 85,491 423,180 Three-Five Systems Inc./1/ 76,380 420,854 Nature's Sunshine Products Inc. 49,949 414,577 Green Mountain Power Corp. 17,812 401,661 Enesco Group Inc./1/ 50,116 400,928 SCM Microsystems Inc./1/ 54,740 400,149 Salton Inc./1/ 40,159 399,582 Penford Corp. 30,354 394,602 Intermet Corp. 91,649 394,091 Haggar Corp. 23,040 355,968 SCPIE Holdings Inc. 35,299 352,990 Concerto Software Inc./1/ 40,872 347,412 Brooktrout Inc./1/ 45,009 346,569 Butler Manufacturing Co. 22,714 345,026 IMCO Recycling Inc./1/ 54,900 337,635 Huffy Corp./1/ 55,178 336,586 Cross (A.T.) Co. Class A/1/ 54,164 324,984 Ashworth Inc./1/ 45,980 318,641 Metro One Telecommunications Inc./1/ 88,628 308,425 Milacron Inc. 121,381 279,176 Commonwealth Industries Inc. 57,470 272,982 Castle (A.M.) & Co./1/ 57,504 255,318 Meade Instruments Corp./1/ 70,254 233,243 Wolverine Tube Inc./1/ 43,953 185,921 TOTAL COMMON STOCKS (Cost: $698,206,704) 686,714,355 SHORT TERM INVESTMENTS - 18.34% MONEY MARKET FUNDS - 10.95% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares/2/,/3/ 49,864,209 49,864,209 Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares/2/,/3/ 18,526,309 18,526,309 BlackRock Temp Cash Money Market Fund/2/ 822,975 822,975 SCHEDULES OF INVESTMENTS 65 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P SMALLCAP 600/BARRA VALUE INDEX FUND September 30, 2003 SHARES OR SECURITY PRINCIPAL VALUE --------------------------------------------------------------------- Short Term Investment Co. - Liquid Assets Money Market Portfolio/2/ 4,368,023 $ 4,368,023 Short Term Investment Co. - Prime Money Market Portfolio, Institutional Shares/2/ 1,684,210 1,684,210 75,265,726 FLOATING RATE NOTES - 4.27% Beta Finance Inc. 1.08%, 05/20/04/2/ $ 842,105 842,025 1.08%, 09/15/04/2/ 1,684,210 1,684,049 1.17%, 08/23/04/2/ 842,105 842,751 CC USA Inc. 1.06%, 05/24/04/2/ 1,684,210 1,684,102 1.08%, 04/19/04/2/ 741,052 741,032 1.12%, 07/15/04/2/ 842,105 842,344 Dorada Finance Inc. 1.08%, 05/20/04/2/ 1,684,210 1,684,050 1.24%, 08/09/04/2/ 421,052 420,999 Five Finance Inc. 1.09%, 04/15/04/2/ 842,105 842,105 HBOS Treasury Services PLC 1.13%, 06/24/08/2/ 1,684,210 1,684,210 Holmes Financing PLC 1.08%, 04/15/04/2/ 336,842 336,842 K2 USA LLC 1.08%, 08/16/04/2/ 421,052 420,997 1.08%, 09/27/04/2/ 1,818,947 1,818,678 1.09%, 04/13/04/2/ 842,105 842,083 1.09%, 05/17/04/2/ 842,105 842,079 Links Finance LLC 1.05%, 07/20/04/2/ 673,684 673,576 1.08%, 05/04/04/2/ 842,105 842,080 1.08%, 06/28/04/2/ 842,105 841,981 1.09%, 03/29/04/2/ 842,105 842,105 Nationwide Building Society 1.08%, 07/23/04/2/ 1,263,157 1,263,157 Sigma Finance Inc. 1.05%, 07/20/04/2/ 842,105 841,970 1.07%, 10/15/03/2/ 1,684,210 1,684,204 1.07%, 07/01/04/2/ 842,105 841,947 1.24%, 08/06/04/2/ 421,052 421,017 Tango Finance Corp. 1.05%, 07/15/04/2/ 505,263 505,131 1.06%, 07/06/04/2/ 505,263 505,223 WhistleJacket Capital LLC 1.08%, 09/15/04/2/ 842,105 841,944 White Pine Finance LLC 1.08%, 05/17/04/2/ 1,010,526 1,010,526 1.08%, 07/06/04/2/ 1,010,526 1,010,452 1.08%, 08/26/04/2/ 842,105 841,988 1.09%, 04/20/04/2/ 842,105 842,105 29,337,752 COMMERCIAL PAPER - 2.23% Amsterdam Funding Corp. 1.06%, 10/16/03/2/ 800,000 799,646 Blue Ridge Asset Funding Corp. 1.05%, 10/17/03/2/ 842,105 841,712 Edison Asset Securitization 1.07%, 10/23/03/2/ 1,583,157 1,582,122 Gemini Securitization Corp. 1.05%, 10/17/03/2/ 589,473 589,198 Greenwich Funding Corp. 1.06%, 10/16/03/2/ 993,684 993,245 Jupiter Securitization Corp. 1.05%, 10/20/03/2/ 842,105 841,639 New Center Asset Trust 1.06%, 10/22/03/2/ 842,105 841,584 Park Avenue Receivables Corp. 1.05%, 10/20/03/2/ 842,105 841,639 Preferred Receivables Funding Corp. 1.06%, 10/08/03/2/ 842,105 841,932 Receivables Capital Corp. 1.05%, 10/15/03/2/ 566,029 565,798 Sydney Capital Corp. 1.07%, 10/17/03/2/ 682,105 681,781 UBS Finance (Delaware) Inc. 1.03%, 10/08/03/2/ 1,684,210 1,683,873 1.05%, 10/15/03/2/ 842,105 841,761 66 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P SMALLCAP 600/BARRA VALUE INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE --------------------------------------------------------------------- 1.11%, 10/01/03/2/ $ 3,368,420 $ 3,368,420 15,314,350 TIME DEPOSITS - 0.69% Abbey National Treasury Services PLC 1.15%, 10/01/03/2/ 842,105 842,105 Canadian Imperial Bank of Commerce 1.06%, 10/08/03/2/ 421,052 421,052 1.08%, 10/30/03/2/ 673,684 673,684 1.37%, 08/26/04/2/ 1,684,210 1,684,210 Toronto-Dominion Bank 1.33%, 08/23/04/2/ 1,094,736 1,094,244 4,715,295 REPURCHASE AGREEMENTS - 0.20% Lehman Brothers Inc. 1.10%, 10/01/03/2/ 1,347,368 1,347,368 1,347,368 TOTAL SHORT TERM INVESTMENTS (Cost: $125,980,491) 125,980,491 TOTAL INVESTMENTS IN SECURITIES - 118.28% (Cost $824,187,195) 812,694,846 Other Assets, Less Liabilities - (18.28%) (125,599,315) -------------- NET ASSETS - 100.00% $ 687,095,531 ============== /1/ Non-income earning securities. /2/ All or a portion of this security represents investments of securities lending collateral. /3/ Issuer is an affiliate of the Fund's investment advisor. See Note 2. SEE NOTES TO FINANCIAL STATEMENTS. SCHEDULES OF INVESTMENTS 67 STATEMENTS OF ASSETS AND LIABILITIES (Unaudited) iSHARES TRUST September 30, 2003
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 $ 7,630,015,559 $ 1,050,900,073 $ 1,303,257,039 $ 1,281,033,819 $ 529,178,076 --------------- --------------- --------------- --------------- --------------- Investments in securities, at value (including securities on loan/1/) (Note 1) $ 6,734,205,805 $ 1,051,280,450 $ 1,230,727,291 $ 1,317,013,954 $ 566,940,866 Receivables: Investment securities sold - - - 1,717,490 1,375,034 Dividends and interest 7,523,649 1,308,798 1,199,303 637,625 138,740 --------------- --------------- --------------- --------------- --------------- Total Assets 6,741,729,454 1,052,589,248 1,231,926,594 1,319,369,069 568,454,640 --------------- --------------- --------------- --------------- --------------- LIABILITIES Payables: Investment securities purchased - - 1,000,036 3,774,679 1,290,434 Collateral for securities on loan (Note 5) 383,804,168 53,801,225 71,523,458 237,657,740 90,044,132 Due to bank - - - - 17,321 Advisory fees (Note 2) 1,003,943 293,685 329,678 359,670 183,436 --------------- --------------- --------------- --------------- --------------- Total Liabilities 384,808,111 54,094,910 72,853,172 241,792,089 91,535,323 --------------- --------------- --------------- --------------- --------------- NET ASSETS $ 6,356,921,343 $ 998,494,338 $ 1,159,073,422 $ 1,077,576,980 $ 476,919,317 =============== =============== =============== =============== =============== NET ASSETS CONSIST OF: Paid-in capital $ 7,415,695,768 $ 1,071,007,176 $ 1,300,565,590 $ 998,809,453 $ 510,597,493 Undistributed net investment income 3,077,104 478,327 448,691 386,776 80,085 Undistributed net realized gain (accumulated net realized loss) (166,041,775) (73,371,542) (69,411,111) 42,400,616 (71,521,051) Net unrealized appreciation (depreciation) (895,809,754) 380,377 (72,529,748) 35,980,135 37,762,790 --------------- --------------- --------------- --------------- --------------- NET ASSETS $ 6,356,921,343 $ 998,494,338 $ 1,159,073,422 $ 1,077,576,980 $ 476,919,317 =============== =============== =============== =============== =============== iShares outstanding 63,650,000 19,650,000 23,800,000 10,550,000 4,400,000 =============== =============== =============== =============== =============== Net asset value per iShare $ 99.87 $ 50.81 $ 48.70 $ 102.14 $ 108.39 =============== =============== =============== =============== ===============
/1/ Securities on loan with market values of $371,247,653, $52,015,150, $68,908,495, $229,872,222 and $87,174,937, respectively. See Note 5. SEE NOTES TO FINANCIAL STATEMENTS. 68 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS STATEMENTS OF ASSETS AND LIABILITIES (Unaudited) (Continued) iSHARES TRUST September 30, 2003
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 $ 870,691,212 $ 2,035,944,602 $ 565,316,166 $ 824,187,195 --------------- --------------- --------------- --------------- Investments in securities, at value (including securities on loan/1/) (Note 1) $ 899,723,859 $ 2,035,421,699 $ 615,546,312 $ 812,694,846 Receivables: Dividends and interest 648,006 1,080,947 314,223 450,545 --------------- --------------- --------------- --------------- Total Assets 900,371,865 2,036,502,646 615,860,535 813,145,391 --------------- --------------- --------------- --------------- LIABILITIES Payables: Investment securities purchased 2,811,431 398,125 122,500 - Collateral for securities on loan (Note 5) 156,843,818 389,391,350 116,317,157 125,774,415 Advisory fees (Note 2) 307,111 555,155 193,944 275,445 --------------- --------------- --------------- --------------- Total Liabilities 159,962,360 390,344,630 116,633,601 126,049,860 --------------- --------------- --------------- --------------- NET ASSETS $ 740,409,505 $ 1,646,158,016 $ 499,226,934 $ 687,095,531 =============== =============== =============== =============== NET ASSETS CONSIST OF: Paid-in capital $ 734,928,336 $ 1,698,191,089 $ 494,795,866 $ 729,911,527 Undistributed net investment income 365,040 552,215 101,005 293,583 Accumulated net realized loss (23,916,518) (52,062,385) (45,900,083) (31,617,230) Net unrealized appreciation (depreciation) 29,032,647 (522,903) 50,230,146 (11,492,349) --------------- --------------- --------------- --------------- NET ASSETS $ 740,409,505 $ 1,646,158,016 $ 499,226,934 $ 687,095,531 =============== =============== =============== =============== iShares outstanding 7,800,000 14,050,000 6,350,000 7,950,000 =============== =============== =============== =============== Net asset value per iShare $ 94.92 $ 117.16 $ 78.62 $ 86.43 =============== =============== =============== ===============
/1/ Securities on loan with market values of $151,278,210, $376,720,800, $112,987,176 and $121,118,322, respectively. See Note 5. SEE NOTES TO FINANCIAL STATEMENTS. FINANCIAL STATEMENTS 69 STATEMENTS OF OPERATIONS (Unaudited) iSHARES TRUST For the six months ended September 30, 2003
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 $ 51,779,718 $ 6,165,044 $ 10,014,279 $ 7,042,338 $ 1,331,416 Interest 23,527 3,493 4,180 2,916 933 Securities lending income 116,176 15,187 22,246 90,265 38,194 --------------- --------------- --------------- --------------- --------------- Total investment income 51,919,421 6,183,724 10,040,705 7,135,519 1,370,543 --------------- --------------- --------------- --------------- --------------- EXPENSES (Note 2) Advisory fees 2,821,051 815,993 858,283 1,192,060 492,926 --------------- --------------- --------------- --------------- --------------- Total expenses 2,821,051 815,993 858,283 1,192,060 492,926 --------------- --------------- --------------- --------------- --------------- Net investment income 49,098,370 5,367,731 9,182,422 5,943,459 877,617 --------------- --------------- --------------- --------------- --------------- NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from: Investments (44,008,165) (8,582,107) (14,369,423) (10,981,693) (10,171,914) In-kind redemptions 109,948,040 2,230,879 10,928,493 100,223,794 - --------------- --------------- --------------- --------------- --------------- Net realized gain (loss) 65,939,875 (6,351,228) (3,440,930) 89,242,101 (10,171,914) --------------- --------------- --------------- --------------- --------------- Net change in unrealized appreciation (depreciation) on investments 802,578,479 119,025,554 148,087,264 181,324,693 84,585,212 --------------- --------------- --------------- --------------- --------------- Net realized and unrealized gain 868,518,354 112,674,326 144,646,334 270,566,794 74,413,298 --------------- --------------- --------------- --------------- --------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 917,616,724 $ 118,042,057 $ 153,828,756 $ 276,510,253 $ 75,290,915 =============== =============== =============== =============== ===============
SEE NOTES TO FINANCIAL STATEMENTS. 70 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS STATEMENTS OF OPERATIONS (Unaudited) (Continued) iSHARES TRUST For the six months ended September 30, 2003
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/ $ 5,653,014 $ 6,643,705 $ 1,264,798 $ 3,644,835 Interest 2,274 3,975 653 2,494 Securities lending income 37,234 212,223 94,314 54,636 --------------- --------------- --------------- --------------- Total investment income 5,692,522 6,859,903 1,359,765 3,701,965 --------------- --------------- --------------- --------------- EXPENSES (Note 2) Advisory fees 844,419 1,423,478 498,308 742,347 --------------- --------------- --------------- --------------- Total expenses 844,419 1,423,478 498,308 742,347 --------------- --------------- --------------- --------------- Net investment income 4,848,103 5,436,425 861,457 2,959,618 --------------- --------------- --------------- --------------- NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from: Investments (5,783,595) (16,211,557) (6,624,698) (7,655,856) In-kind redemptions 12,119,786 22,484,777 1,688,948 15,436,385 --------------- --------------- --------------- --------------- Net realized gain (loss) 6,336,191 6,273,220 (4,935,750) 7,780,529 --------------- --------------- --------------- --------------- Net change in unrealized appreciation (depreciation) on investments 141,492,189 306,656,002 85,614,911 135,110,253 --------------- --------------- --------------- --------------- Net realized and unrealized gain 147,828,380 312,929,222 80,679,161 142,890,782 --------------- --------------- --------------- --------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 152,676,483 $ 318,365,647 $ 81,540,618 $ 145,850,400 =============== =============== =============== ===============
/1/ Net of foreign withholding tax of $--, $3,460, $2,014 and $--, respectively. SEE NOTES TO FINANCIAL STATEMENTS. FINANCIAL STATEMENTS 71 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 months ended For the months ended For the September 30, 2003 year ended September 30, 2003 year ended (Unaudited) March 31, 2003 (Unaudited) March 31, 2003 ---------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 49,098,370 $ 67,878,629 $ 5,367,731 $ 6,464,963 Net realized gain (loss) 65,939,875 (95,968,100) (6,351,228) (48,991,696) Net change in unrealized appreciation (depreciation) 802,578,479 (1,135,337,649) 119,025,554 (99,683,967) ------------------ ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations 917,616,724 (1,163,427,120) 118,042,057 (142,210,700) ------------------ ------------------ ------------------ ------------------ DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income (49,361,034) (66,399,553) (5,305,526) (6,226,352) ------------------ ------------------ ------------------ ------------------ Total distributions to iShareholders (49,361,034) (66,399,553) (5,305,526) (6,226,352) ------------------ ------------------ ------------------ ------------------ iSHARES TRANSACTIONS: iShares sold 1,483,524,715 3,434,257,041 192,810,582 511,069,171 iShares redeemed (676,182,257) (1,732,053,170) (12,633,978) (121,706,589) ------------------ ------------------ ------------------ ------------------ Net increase in net assets from iShares transactions 807,342,458 1,702,203,871 180,176,604 389,362,582 ------------------ ------------------ ------------------ ------------------ INCREASE IN NET ASSETS 1,675,598,148 472,377,198 292,913,135 240,925,530 NET ASSETS: Beginning of period 4,681,323,195 4,208,945,997 705,581,203 464,655,673 ------------------ ------------------ ------------------ ------------------ End of period $ 6,356,921,343 $ 4,681,323,195 $ 998,494,338 $ 705,581,203 ================== ================== ================== ================== Undistributed net investment income included in net assets at end of period $ 3,077,104 $ 3,339,768 $ 478,327 $ 416,122 ================== ================== ================== ================== iSHARES ISSUED AND REDEEMED: iShares sold 15,450,000 37,700,000 4,000,000 10,750,000 iShares redeemed (6,850,000) (19,250,000) (250,000) (2,750,000) ------------------ ------------------ ------------------ ------------------ Net increase in iShares outstanding 8,600,000 18,450,000 3,750,000 8,000,000 ================== ================== ================== ================== iSHARES S&P 500/BARRA VALUE INDEX FUND ---------------------------------------- For the six months ended For the September 30, 2003 year ended (Unaudited) March 31, 2003 -------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 9,182,422 $ 12,961,375 Net realized gain (loss) (3,440,930) (33,810,700) Net change in unrealized appreciation (depreciation) 148,087,264 (184,623,296) ------------------ ------------------ Net increase (decrease) in net assets resulting from operations 153,828,756 (205,472,621) ------------------ ------------------ DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income (9,284,582) (12,637,254) ------------------ ------------------ Total distributions to iShareholders (9,284,582) (12,637,254) ------------------ ------------------ iSHARES TRANSACTIONS: iShares sold 359,078,779 435,565,285 iShares redeemed (14,588,141) (133,467,384) ------------------ ------------------ Net increase in net assets from iShares transactions 344,490,638 302,097,901 ------------------ ------------------ INCREASE IN NET ASSETS 489,034,812 83,988,026 NET ASSETS: Beginning of period 670,038,610 586,050,584 ------------------ ------------------ End of period $ 1,159,073,422 $ 670,038,610 ================== ================== Undistributed net investment income included in net assets at end of period $ 448,691 $ 550,851 ================== ================== iSHARES ISSUED AND REDEEMED: iShares sold 7,500,000 9,000,000 iShares redeemed (300,000) (2,900,000) ------------------ ------------------ Net increase in iShares outstanding 7,200,000 6,100,000 ================== ==================
SEE NOTES TO FINANCIAL STATEMENTS. 72 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS 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, 2003 year ended September 30, 2003 year ended (Unaudited) March 31, 2003 (Unaudited) March 31, 2003 ---------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 5,943,459 $ 7,757,992 $ 877,617 $ 995,131 Net realized gain (loss) 89,242,101 (24,473,839) (10,171,914) (35,915,123) Net change in unrealized appreciation (depreciation) 181,324,693 (180,427,971) 84,585,212 (61,617,995) ------------------ ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations 276,510,253 (197,143,818) 75,290,915 (96,537,987) ------------------ ------------------ ------------------ ------------------ DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income (5,967,364) (7,413,297) (834,460) (977,567) ------------------ ------------------ ------------------ ------------------ Total distributions to iShareholders (5,967,364) (7,413,297) (834,460) (977,567) ------------------ ------------------ ------------------ ------------------ iSHARES TRANSACTIONS: iShares sold 139,866,098 786,121,958 92,946,636 303,430,190 iShares redeemed (488,082,009) (31,885,415) - (148,757,596) ------------------ ------------------ ------------------ ------------------ Net increase (decrease) in net assets from iShares transactions (348,215,911) 754,236,543 92,946,636 154,672,594 ------------------ ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS (77,673,022) 549,679,428 167,403,091 57,157,040 NET ASSETS: Beginning of period 1,155,250,002 605,570,574 309,516,226 252,359,186 ------------------ ------------------ ------------------ ------------------ End of period $ 1,077,576,980 $ 1,155,250,002 $ 476,919,317 $ 309,516,226 ================== ================== ================== ================== Undistributed net investment income included in net assets at end of period $ 386,776 $ 410,681 $ 80,085 $ 36,928 ================== ================== ================== ================== iSHARES ISSUED AND REDEEMED: iShares sold 1,500,000 8,850,000 900,000 2,900,000 iShares redeemed (5,050,000) (350,000) - (1,550,000) ------------------ ------------------ ------------------ ------------------ Net increase (decrease) in iShares outstanding (3,550,000) 8,500,000 900,000 1,350,000 ================== ================== ================== ================== iSHARES S&P MIDCAP 400/BARRA VALUE INDEX FUND ---------------------------------------- For the six months ended For the September 30, 2003 year ended (Unaudited) March 31, 2003 ---------------------------------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 4,848,103 $ 8,481,134 Net realized gain (loss) 6,336,191 (7,511,398) Net change in unrealized appreciation (depreciation) 141,492,189 (152,862,965) ------------------ ------------------ Net increase (decrease) in net assets resulting from operations 152,676,483 (151,893,229) ------------------ ------------------ DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income (4,709,952) (8,270,124) ------------------ ------------------ Total distributions to iShareholders (4,709,952) (8,270,124) ------------------ ------------------ iSHARES TRANSACTIONS: iShares sold 54,423,863 287,277,766 iShares redeemed (8,763,636) (35,014,705) ------------------ ------------------ Net increase (decrease) in net assets from iShares transactions 45,660,227 252,263,061 ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS 193,626,758 92,099,708 NET ASSETS: Beginning of period 546,782,747 454,683,039 ------------------ ------------------ End of period $ 740,409,505 $ 546,782,747 ================== ================== Undistributed net investment income included in net assets at end of period $ 365,040 $ 226,889 ================== ================== iSHARES ISSUED AND REDEEMED: iShares sold 600,000 3,150,000 iShares redeemed (100,000) (450,000) ------------------ ------------------ Net increase (decrease) in iShares outstanding 500,000 2,700,000 ================== ==================
SEE NOTES TO FINANCIAL STATEMENTS. FINANCIAL STATEMENTS 73 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, 2003 year ended September 30, 2003 year ended (Unaudited) March 31, 2003 (Unaudited) March 31, 2003 ---------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 5,436,425 $ 8,003,825 $ 861,457 $ 1,026,693 Net realized gain (loss) 6,273,220 20,584,008 (4,935,750) (6,942,192) Net change in unrealized appreciation (depreciation) 306,656,002 (384,623,872) 85,614,911 (48,776,742) ------------------ ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations 318,365,647 (356,036,039) 81,540,618 (54,692,241) ------------------ ------------------ ------------------ ------------------ DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income (5,466,994) (7,704,600) (866,506) (920,639) ------------------ ------------------ ------------------ ------------------ Total distributions to iShareholders (5,466,994) (7,704,600) (866,506) (920,639) ------------------ ------------------ ------------------ ------------------ iSHARES TRANSACTIONS: iShares sold 388,160,208 846,248,846 113,051,163 394,436,900 iShares redeemed (77,196,802) (585,024,165) (7,270,734) (217,527,125) ------------------ ------------------ ------------------ ------------------ Net increase in net assets from iShares transactions 310,963,406 261,224,681 105,780,429 176,909,775 ------------------ ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS 623,862,059 (102,515,958) 186,454,541 121,296,895 NET ASSETS: Beginning of period 1,022,295,957 1,124,811,915 312,772,393 191,475,498 ------------------ ------------------ ------------------ ------------------ End of period $ 1,646,158,016 $ 1,022,295,957 $ 499,226,934 $ 312,772,393 ================== ================== ================== ================== Undistributed net investment income included in net assets at end of period $ 552,215 $ 582,784 $ 101,005 $ 106,054 ================== ================== ================== ================== iSHARES ISSUED AND REDEEMED: iShares sold 3,550,000 7,700,000 1,450,000 5,900,000 iShares redeemed (650,000) (5,700,000) (100,000) (3,300,000) ------------------ ------------------ ------------------ ------------------ Net increase in iShares outstanding 2,900,000 2,000,000 1,350,000 2,600,000 ================== ================== ================== ================== iSHARES S&P SMALLCAP 600/BARRA VALUE INDEX FUND ---------------------------------------- For the six months ended For the September 30, 2003 year ended (Unaudited) March 31, 2003 -------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 2,959,618 $ 5,565,636 Net realized gain (loss) 7,780,529 (11,868,323) Net change in unrealized appreciation (depreciation) 135,110,253 (186,992,108) ------------------ ------------------ Net increase (decrease) in net assets resulting from operations 145,850,400 (193,294,795) ------------------ ------------------ DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income (3,011,926) (5,389,255) ------------------ ------------------ Total distributions to iShareholders (3,011,926) (5,389,255) ------------------ ------------------ iSHARES TRANSACTIONS: iShares sold 69,700,933 499,925,865 iShares redeemed (8,391,953) (275,904,030) ------------------ ------------------ Net increase in net assets from iShares transactions 61,308,980 224,021,835 ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS 204,147,454 25,337,785 NET ASSETS: Beginning of period 482,948,077 457,610,292 ------------------ ------------------ End of period $ 687,095,531 $ 482,948,077 ================== ================== Undistributed net investment income included in net assets at end of period $ 293,583 $ 345,891 ================== ================== iSHARES ISSUED AND REDEEMED: iShares sold 800,000 6,150,000 iShares redeemed (100,000) (3,750,000) ------------------ ------------------ Net increase in iShares outstanding 700,000 2,400,000 ================== ==================
SEE NOTES TO FINANCIAL STATEMENTS. 74 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS 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, 2003 Year ended Year ended to (Unaudited) Mar. 31, 2003 Mar. 31, 2002 Mar. 31, 2001 --------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 85.04 $ 115.00 $ 116.24 $ 145.24 ------------- ------------- ------------- --------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.78 1.53 1.39 1.06 Net realized and unrealized gain (loss) 14.84 (29.97) (1.25) (28.98) ------------- ------------- ------------- --------------- Total from investment operations 15.62 (28.44) 0.14 (27.92) ------------- ------------- ------------- --------------- LESS DISTRIBUTIONS FROM: Net investment income (0.79) (1.52) (1.38) (1.01) Net realized gain - - - (0.07) ------------- ------------- ------------- --------------- Total distributions (0.79) (1.52) (1.38) (1.08) ------------- ------------- ------------- --------------- Net asset value, end of period $ 99.87 $ 85.04 $ 115.00 $ 116.24 ============= ============= ============= =============== Total return 18.36%/2/ (24.80)% 0.13% (19.32)%/2/ ============= ============= ============= =============== RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s) $ 6,356,921 $ 4,681,323 $ 4,208,946 $ 2,876,839 Ratio of expenses to average net assets/3/ 0.09% 0.09% 0.09% 0.09% Ratio of net investment income to average net assets/3/ 1.64% 1.67% 1.27% 1.06% Portfolio turnover rate/4/ 1% 5% 3% 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. FINANCIAL HIGHLIGHTS 75 FINANCIAL HIGHLIGHTS (Continued) iSHARES TRUST (For a share outstanding throughout each period)
iSHARES S&P 500/BARRA GROWTH INDEX FUND ------------------------------------------------------------------- Six months Period from ended May 22, 2000/1/ Sep. 30, 2003 Year ended Year ended to (Unaudited) Mar. 31, 2003 Mar. 31, 2002 Mar. 31, 2001 -------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 44.38 $ 58.82 $ 56.61 $ 82.15 ------------- ------------- ------------- --------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.28 0.51 0.43 0.25 Net realized and unrealized gain (loss) 6.43 (14.44) 2.19 (25.44) ------------- ------------- ------------- --------------- Total from investment operations 6.71 (13.93) 2.62 (25.19) ------------- ------------- ------------- --------------- LESS DISTRIBUTIONS FROM: Net investment income (0.28) (0.51) (0.41) (0.24) Net realized gain - - - (0.11) ------------- ------------- ------------- --------------- Total distributions (0.28) (0.51) (0.41) (0.35) ------------- ------------- ------------- --------------- Net asset value, end of period $ 50.81 $ 44.38 $ 58.82 $ 56.61 ============= ============= ============= =============== Total return 15.12%/2/ (23.72)% 4.64% (30.75)%/2/ ============= ============= ============= =============== RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s) $ 998,494 $ 705,581 $ 464,656 $ 141,520 Ratio of expenses to average net assets/3/ 0.18% 0.18% 0.18% 0.18% Ratio of net investment income to average net assets/3/ 1.18% 1.19% 0.82% 0.45% Portfolio turnover rate/4/ 9% 17% 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. 76 2003 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, 2003 Year ended Year ended to (Unaudited) Mar. 31, 2003 Mar. 31, 2002 Mar. 31, 2001 -------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 40.36 $ 55.81 $ 59.31 $ 60.20 ------------- ------------- ------------- --------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.42 0.85 0.83 0.65 Net realized and unrealized gain (loss) 8.35 (15.46) (3.49) (0.78) ------------- ------------- ------------- --------------- Total from investment operations 8.77 (14.61) (2.66) (0.13) ------------- ------------- ------------- --------------- LESS DISTRIBUTIONS FROM: Net investment income (0.43) (0.84) (0.84) (0.61) Net realized gain - - - (0.15) ------------- ------------- ------------- --------------- Total distributions (0.43) (0.84) (0.84) (0.76) ------------- ------------- ------------- --------------- Net asset value, end of period $ 48.70 $ 40.36 $ 55.81 $ 59.31 ============= ============= ============= =============== Total return 21.72%/2/ (26.29)% (4.48)% (0.27)%/2/ ============= ============= ============= =============== RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s) $ 1,159,073 $ 670,039 $ 586,051 $ 367,704 Ratio of expenses to average net assets/3/ 0.18% 0.18% 0.18% 0.18% Ratio of net investment income to average net assets/3/ 1.93% 2.01% 1.56% 1.51% Portfolio turnover rate/4/ 3% 22% 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 77 FINANCIAL HIGHLIGHTS (Continued) iSHARES TRUST (For a share outstanding throughout each period)
iSHARES S&P MIDCAP 400 INDEX FUND ------------------------------------------------------------------- Six months Period from ended May 22, 2000/1/ Sep. 30, 2003 Year ended Year ended to (Unaudited) Mar. 31, 2003 Mar. 31, 2002 Mar. 31, 2001 -------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 81.93 $ 108.14 $ 91.77 $ 92.63 ------------- ------------- ------------- --------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.48 0.76 0.75 0.72 Net realized and unrealized gain (loss) 20.20 (26.22) 16.37 (0.59) ------------- ------------- ------------- --------------- Total from investment operations 20.68 (25.46) 17.12 0.13 ------------- ------------- ------------- --------------- LESS DISTRIBUTIONS FROM: Net investment income (0.47) (0.75) (0.75) (0.69) Net realized gain - - - (0.30) ------------- ------------- ------------- --------------- Total distributions (0.47) (0.75) (0.75) (0.99) ------------- ------------- ------------- --------------- Net asset value, end of period $ 102.14 $ 81.93 $ 108.14 $ 91.77 ============= ============= ============= =============== Total return 25.25%/2/ (23.59)% 18.75% 0.04%/2/ ============= ============= ============= =============== RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s) $ 1,077,577 $ 1,155,250 $ 605,571 $ 156,005 Ratio of expenses to average net assets/3/ 0.20% 0.20% 0.20% 0.20% Ratio of net investment income to average net assets/3/ 1.00% 0.98% 0.87% 0.86% Portfolio turnover rate/4/ 6% 12% 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. 78 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS 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, 2003 Year ended Year ended to (Unaudited) Mar. 31, 2003 Mar. 31, 2002 Mar. 31, 2001 --------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 88.43 $ 117.38 $ 101.31 $ 135.73 ------------- ------------- ------------- ---------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.22 0.27 0.14 0.01 Net realized and unrealized gain (loss) 19.95 (28.95) 16.07 (33.95) ------------- ------------- ------------- ---------------- Total from investment operations 20.17 (28.68) 16.21 (33.94) ------------- ------------- ------------- ---------------- LESS DISTRIBUTIONS FROM: Net investment income (0.21) (0.27) (0.14) (0.01) Net realized gain - - - (0.47) ------------- ------------- ------------- ---------------- Total distributions (0.21) (0.27) (0.14) (0.48) ------------- ------------- ------------- ---------------- Net asset value, end of period $ 108.39 $ 88.43 $ 117.38 $ 101.31 ============= ============= ============= ================ Total return 22.82%/2/ (24.45)% 16.03% (25.08)%/2/ ============= ============= ============= ================ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s) $ 476,919 $ 309,516 $ 252,359 $ 162,092 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/ 0.45% 0.31% 0.15% 0.06% Portfolio turnover rate/4/ 15% 58% 50% 67%
/1/ Commencement of operations. /2/ Not annualized. /3/ Annualized for periods of less than one year. /4/ Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. SEE NOTES TO FINANCIAL STATEMENTS. FINANCIAL HIGHLIGHTS 79 FINANCIAL HIGHLIGHTS (Continued) iSHARES TRUST (For a share outstanding throughout each period)
iSHARES S&P MIDCAP 400/BARRA VALUE INDEX FUND -------------------------------------------------------------------- Six months Period from ended Jul. 24, 2000/1/ Sep. 30, 2003 Year ended Year ended to (Unaudited) Mar. 31, 2003 Mar. 31, 2002 Mar. 31, 2001 --------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 74.90 $ 98.84 $ 82.15 $ 72.40 ------------- ------------- ------------- ---------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.63 1.18 1.06 0.78 Net realized and unrealized gain (loss) 20.00 (23.96) 16.69 9.86 ------------- ------------- ------------- ---------------- Total from investment operations 20.63 (22.78) 17.75 10.64 ------------- ------------- ------------- ---------------- LESS DISTRIBUTIONS FROM: Net investment income (0.61) (1.16) (1.06) (0.75) Net realized gain - - - (0.14) ------------- ------------- ------------- ---------------- Total distributions (0.61) (1.16) (1.06) (0.89) ------------- ------------- ------------- ---------------- Net asset value, end of period $ 94.92 $ 74.90 $ 98.84 $ 82.15 ============= ============= ============= ================ Total return 27.54%/2/ (23.13)% 21.79% 14.71%/2/ ============= ============= ============= ================ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s) $ 740,410 $ 546,783 $ 454,683 $ 78,044 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/ 1.44% 1.50% 1.43% 1.58% Portfolio turnover rate/4/ 5% 11% 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 transactions in Creation Units. SEE NOTES TO FINANCIAL STATEMENTS. 80 2003 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, 2003 Year ended Year ended to (Unaudited) Mar. 31, 2003 Mar. 31, 2002 Mar. 31, 2001 -------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 91.69 $ 122.93 $ 101.50 $ 97.95 ------------- ------------- ------------- --------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.41 0.69 0.57 0.38 Net realized and unrealized gain (loss) 25.48 (31.26) 21.43 4.63 ------------- ------------- ------------- --------------- Total from investment operations 25.89 (30.57) 22.00 5.01 ------------- ------------- ------------- --------------- LESS DISTRIBUTIONS FROM: Net investment income (0.42) (0.67) (0.57) (0.34) Net realized gain - - - (1.12) ------------- ------------- ------------- --------------- Total distributions (0.42) (0.67) (0.57) (1.46) ------------- ------------- ------------- --------------- Net asset value, end of period $ 117.16 $ 91.69 $ 122.93 $ 101.50 ============= ============= ============= =============== Total return 28.24%/2/ (24.91)% 21.74% 5.08%/2/ ============= ============= ============= =============== RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s) $ 1,646,158 $ 1,022,296 $ 1,124,812 $ 208,081 Ratio of expenses to average net assets/3/ 0.20% 0.20% 0.20% 0.20% Ratio of net investment income to average net assets/3/ 0.76% 0.70% 0.60% 0.61% Portfolio turnover rate/4/ 6% 17% 16% 28%
/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 81 FINANCIAL HIGHLIGHTS (Continued) iSHARES TRUST (For a share outstanding throughout each period)
iSHARES S&P SMALLCAP 600/BARRA GROWTH INDEX FUND -------------------------------------------------------------------- Six months Period from ended Jul. 24, 2000/1/ Sep. 30, 2003 Year ended Year ended to (Unaudited) Mar. 31, 2003 Mar. 31, 2002 Mar. 31, 2001 --------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 62.55 $ 79.78 $ 67.91 $ 83.34 ------------- ------------- ------------- ---------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.15 0.19 0.09 0.00/5/ Net realized and unrealized gain (loss) 16.08 (17.25) 11.87 (14.81) ------------- ------------- ------------- ---------------- Total from investment operations 16.23 (17.06) 11.96 (14.81) ------------- ------------- ------------- ---------------- LESS DISTRIBUTIONS FROM: Net investment income (0.16) (0.17) (0.09) (0.00)/5/ Net realized gain - - - (0.62) ------------- ------------- ------------- ---------------- Total distributions (0.16) (0.17) (0.09) (0.62) ------------- ------------- ------------- ---------------- Net asset value, end of period $ 78.62 $ 62.55 $ 79.78 $ 67.91 ============= ============= ============= ================ Total return 25.94%/2/ (21.39)% 17.60% (17.86)%/2/ ============= ============= ============= ================ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s) $ 499,227 $ 312,772 $ 191,475 $ 27,162 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/ 0.43% 0.34% 0.14% 0.00%/6/ Portfolio turnover rate/4/ 18% 57% 49% 77%
/1/ Commencement of operations. /2/ Not annualized. /3/ Annualized for periods of less than one year. /4/ Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. /5/ Rounds to less than $0.01. /6/ Rounds to less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 82 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS 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, 2003 Year ended Year ended to (Unaudited) Mar. 31, 2003 Mar. 31, 2002 Mar. 31, 2001 --------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 66.61 $ 94.35 $ 75.87 $ 68.34 ------------- ------------- ------------- ---------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.40 0.71 0.60 0.43 Net realized and unrealized gain (loss) 19.83 (27.75) 18.48 7.82 ------------- ------------- ------------- ---------------- Total from investment operations 20.23 (27.04) 19.08 8.25 ------------- ------------- ------------- ---------------- LESS DISTRIBUTIONS FROM: Net investment income (0.41) (0.70) (0.60) (0.38) Net realized gain - - - (0.34) ------------- ------------- ------------- ---------------- Total distributions (0.41) (0.70) (0.60) (0.72) ------------- ------------- ------------- ---------------- Net asset value, end of period $ 86.43 $ 66.61 $ 94.35 $ 75.87 ============= ============= ============= ================ Total return 30.37%/2/ (28.75)% 25.29% 12.13%/2/ ============= ============= ============= ================ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s) $ 687,096 $ 482,948 $ 457,610 $ 64,490 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/ 1.00% 0.99% 0.92% 0.98% Portfolio turnover rate/4/ 6% 14% 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. FINANCIAL HIGHLIGHTS 83 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 statutory trust pursuant to an Agreement and Declaration of Trust dated December 16, 1999. As of September 30, 2003, the Trust offered 57 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. Under the Funds' organizational documents, their officers and trustees are indemnified against certain liabilities that may arise out of the performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds' maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote. 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. Beginning April 14, 2003, securities for which the primary market is the National Association of Securities Dealers Automated Quotations National Market System ("NASDAQ") are valued at the NASDAQ Official Closing Price. 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. Short-term investments 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. 84 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS NOTES TO THE FINANCIAL STATEMENTS (Unaudited) (Continued) iSHARES TRUST At March 31, 2003, 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 500 $ 3,290,053 $ - $ 3,290,053 S&P 500/BARRA Growth 416,122 - 416,122 S&P 500/BARRA Value 537,366 - 537,366 S&P MidCap 400 329,236 - 329,236 S&P MidCap 400/BARRA Growth 36,928 - 36,928 S&P MidCap 400/BARRA Value 110,992 - 110,992 S&P SmallCap 600 501,928 - 501,928 S&P SmallCap 600/BARRA Growth 106,054 - 106,054 S&P SmallCap 600/BARRA Value 271,701 - 271,701 -----------------------------------------------------------------------------------------
For the year ended March 31, 2003, the tax characterization of distributions paid for each Fund 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 the 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, 2003. The Funds had tax basis net capital loss carryforwards at March 31, 2003, the tax year-end of the Funds, as follows: -------------------------------------------------------------------------- EXPIRING EXPIRING iSHARES INDEX FUND 2010 2011 TOTAL -------------------------------------------------------------------------- S&P 500 $ 16,570,119 $ 109,148,380 $ 125,718,499 S&P 500/BARRA Growth 9,841,895 24,099,560 33,941,455 S&P 500/BARRA Value 5,134,741 23,315,922 28,450,663 S&P MidCap 400 4,458,220 4,023,734 8,481,954 S&P MidCap 400/BARRA Growth 11,111,322 22,971,326 34,082,648 S&P MidCap 400/BARRA Value 1,442,036 4,082,966 5,525,002 S&P SmallCap 600 3,199,196 22,944,237 26,143,433 S&P SmallCap 600/BARRA Growth 4,230,989 8,134,573 12,365,562 S&P SmallCap 600/BARRA Value 4,241,868 12,218,694 16,460,562 -------------------------------------------------------------------------- Net capital loss carryforwards may be applied against any net realized taxable gains in each succeeding year, or until their respective expiration date, whichever occurs first. NOTES TO THE FINANCIAL STATEMENTS 85 NOTES TO THE FINANCIAL STATEMENTS (Unaudited) (Continued) iSHARES TRUST For the six months ended September 30, 2003, certain Funds realized net capital gains or losses resulting from in-kind redemptions of large blocks of 50,000 or more iShares or multiples thereof ("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. 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, 2003 are disclosed in the Funds' Statements of Operations. REPURCHASE AGREEMENTS Each Fund may enter into repurchase agreements with banks and securities dealers. These transactions involve the purchase of securities with a simultaneous commitment to resell the securities to the bank or the dealer at an agreed-upon date and price. A repurchase agreement is accounted for as a loan by the Fund to the seller, collateralized by securities, which are delivered to the Funds' custodian or to an agent bank under a tri-party agreement. The securities are marked-to-market daily and additional securities are acquired as needed, to ensure that their value equals or exceeds the repurchase price plus accrued interest. The Funds did not enter into any repurchase agreements at September 30, 2003; however, cash collateral for securities on loan was invested in repurchase agreements at September 30, 2003. For further information, see Note 5, below. 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 ------------------------------------ --------------------------------------- S&P 500 0.09% S&P MidCap 400/BARRA Value 0.25% S&P 500/BARRA Growth 0.18 S&P SmallCap 600 0.20 S&P 500/BARRA Value 0.18 S&P SmallCap 600/BARRA Growth 0.25 S&P MidCap 400 0.20 S&P SmallCap 600/BARRA Value 0.25 S&P MidCap 400/BARRA Growth 0.25 Investors Bank & Trust Company ("Investors Bank") serves as administrator, custodian and transfer agent for the Trust. 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. 86 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS NOTES TO THE FINANCIAL STATEMENTS (Unaudited) (Continued) iSHARES TRUST Barclays Global Investors, N.A. ("BGI") serves as securities lending agent for the Trust. BGI is an affiliate of BGFA, the Funds' investment advisor. As securities lending agent, BGI receives a fee based on a share of the income earned on investment of the cash collateral received for the loan of securities. For the six months ended September 30, 2003, BGI earned securities lending agent fees as follows: ---------------------------------------------------------------------- SECURITIES LENDING iSHARES INDEX FUND AGENT FEES ---------------------------------------------------------------------- S&P 500 $ 116,965 S&P 500/BARRA Growth 15,258 S&P 500/BARRA Value 22,468 S&P MidCap 400 90,558 S&P MidCap 400/BARRA Growth 38,347 S&P MidCap 400/BARRA Value 37,489 S&P SmallCap 600 212,956 S&P SmallCap 600/BARRA Growth 94,455 S&P SmallCap 600/BARRA Value 55,094 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. Barclays Global Investors Services ("BGIS"), a subsidiary of BGI, may serve as a broker-dealer for the Funds. For the six months ended September 30, 2003, 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") and Prime Money Market Fund ("PMMF") of Barclays Global Investors Funds. The IMMF and PMMF are feeder funds in a master/feeder fund structure that invests substantially all of its assets in the Money Market Master Portfolio and Prime Money Market Master Portfolio, respectively, which are managed by BGFA, the Funds' investment advisor. The IMMF and PMMF are open-end money market funds available only to institutional investors, including other investment companies managed by BGFA. The IMMF and PMMF seek a high level of income consistent with liquidity and the preservation of capital. While the IMMF and PMMF do not directly charge an advisory fee, the master portfolios in which they invest do charge an advisory fee. Income distributions from the IMMF and PMMF 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, the Funds executed cross trades for the six months ended September 30, 2003. Cross trading is the buying or selling of portfolio securities between funds to which BGFA (or an affiliate) serves as investment advisor. The Board reviewed all such transactions executed during the second quarter of 2003 and concluded that they were in compliance with the requirements and restrictions set forth by Rule 17a-7. The Board is scheduled at its next meeting to review all such transactions executed during the third quarter of 2003. As of September 30, 2003, certain trustees and officers of the Trust are also employees of BGFA and its affiliates or employees of Investors Bank. NOTES TO THE FINANCIAL STATEMENTS 87 NOTES TO THE FINANCIAL STATEMENTS (Unaudited) (Continued) iSHARES TRUST 3. INVESTMENT PORTFOLIO TRANSACTIONS Purchases and sales of investments (excluding in-kind transactions and short-term securities) for the six months ended September 30, 2003 were as follows: -------------------------------------------------------------------- iSHARES INDEX FUND PURCHASES SALES -------------------------------------------------------------------- S&P 500 $ 78,033,019 $ 80,830,449 S&P 500/BARRA Growth 77,237,607 77,384,402 S&P 500/BARRA Value 31,391,713 32,657,338 S&P MidCap 400 63,039,869 63,876,391 S&P MidCap 400/BARRA Growth 59,116,371 59,032,324 S&P MidCap 400/BARRA Value 35,130,844 35,052,034 S&P SmallCap 600 84,297,676 83,855,593 S&P SmallCap 600/BARRA Growth 72,668,050 72,645,146 S&P SmallCap 600/BARRA Value 32,837,147 33,720,547 In-kind transactions for the six months ended September 30, 2003 were as follows: ----------------------------------------------------------------------- IN-KIND IN-KIND iSHARES INDEX FUND PURCHASES SALES ----------------------------------------------------------------------- S&P 500 $ 1,481,472,428 $ 675,004,291 S&P 500/BARRA Growth 192,601,270 12,620,614 S&P 500/BARRA Value 410,805,710 65,441,705 S&P MidCap 400 139,763,008 487,395,735 S&P MidCap 400/BARRA Growth 92,910,871 - S&P MidCap 400/BARRA Value 100,032,407 54,737,584 S&P SmallCap 600 387,985,658 77,132,979 S&P SmallCap 600/BARRA Growth 113,041,165 7,269,387 S&P SmallCap 600/BARRA Value 123,742,513 61,713,961 88 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS NOTES TO THE FINANCIAL STATEMENTS (Unaudited) (Continued) iSHARES TRUST At September 30, 2003, the aggregate unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:
------------------------------------------------------------------------------------------------- NET UNREALIZED TAX UNREALIZED UNREALIZED APPRECIATION iSHARES INDEX FUND COST APPRECIATION DEPRECIATION (DEPRECIATION) ------------------------------------------------------------------------------------------------- S&P 500 $ 7,743,227,286 $ 78,424,046 $ (1,087,445,527) $ (1,009,021,481) S&P 500/BARRA Growth 1,065,789,304 37,661,015 (52,169,869) (14,508,854) S&P 500/BARRA Value 1,333,638,859 24,199,370 (127,110,938) (102,911,568) S&P MidCap 400 1,301,452,878 89,971,486 (74,410,410) 15,561,076 S&P MidCap 400/BARRA Growth 538,252,544 47,432,423 (18,744,101) 28,688,322 S&P MidCap 400/BARRA Value 878,851,494 67,311,791 (46,439,426) 20,872,365 S&P SmallCap 600 2,062,644,058 145,252,400 (172,474,759) (27,222,359) S&P SmallCap 600/BARRA Growth 572,961,216 59,117,015 (16,531,919) 42,585,096 S&P SmallCap 600/BARRA Value 834,089,503 49,842,901 (71,237,558) (21,394,657)
4. iSHARES TRANSACTIONS At September 30, 2003, 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 a Fund of securities lending are that the borrower may not provide additional collateral when required, or return the securities when due. As of September 30, 2003, the Funds had loaned securities which were collateralized by cash. The cash collateral received was invested in a joint account which invests in securities with remaining maturities of 397 days or less and money market mutual funds. Income from the joint account is allocated daily to each Fund, based on each Fund's portion of the total cash collateral received. The market value of the securities on loan at September 30, 2003 and the value of the related collateral are disclosed in the Statements of Assets and Liabilities. NOTES TO THE FINANCIAL STATEMENTS 89 THE iSHARES FAMILY OF FUNDS The following is a list of iShares Funds being offered as of November 28, 2003, along with their respective exchange trading symbols. Please call iShares at 1-800-iSHARES (1-800-474-7237) to obtain a prospectus for any iShares fund. The prospectus 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 Transportation Average Index Fund (IYT) iShares Dow Jones U.S. Basic Materials Sector Index Fund (IYM) iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund (IYC) iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund (IYK) iShares Dow Jones U.S. Energy Sector Index Fund (IYE) iShares Dow Jones U.S. Financial Sector Index Fund (IYF) iShares Dow Jones U.S. 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. 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) SPECIALTY iShares Dow Jones Select Dividend Index Fund (DVY) FIXED INCOME iShares GS $ InvesTop(TM) Corporate Bond Fund (LQD) 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 Lehman Aggregate Bond Fund (AGG) 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) iShares MSCI Emerging Markets Index Fund (EEM) 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) INTERNATIONAL/EMERGING COUNTRY iShares MSCI Brazil Index Fund (EWZ) iShares MSCI Malaysia Index Fund (EWM) iShares MSCI Mexico Index Fund (EWW) iShares MSCI South Africa Index Fund (EZA) 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) This advertising section does not constitute part of the 2003 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)" and "Goldman Sachs(R)" are trademarks of Goldman, Sachs & Co. 90 2003 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., a wholly owned subsidiary of Barclays Bank PLC, none of which is affiliated with SEI. 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)2003 Barclays Global Investors. All rights reserved. iShares is a registered trademark of Barclays Global Investors, N.A. All other trademarks, servicemarks or registered trademarks are the property of their respective owners. This report is intended for the Funds' shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus. iSHARES(R) Industrial strength investment tools from BARCLAYS GLOBAL INVESTORS 1 800 iSHARES (1 800 474 2737) WWW.iSHARES.COM BARCLAYS iSHARES(R) 2003 SEMI-ANNUAL REPORT TO SHAREHOLDERS SEPTEMBER 30, 2003 [GRAPHIC APPEARS HERE] 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 LATIN AMERICA 40 INDEX FUND iSHARES S&P/TOPIX 150 INDEX FUND iSHARES NASDAQ BIOTECHNOLOGY INDEX FUND TABLE OF CONTENTS Shareholder Letter.......................................................... 1 Managers' Discussion & Analysis............................................. 4 Schedules of Investments.................................................... 26 iShares S&P 100 Index Fund................................................ 26 iShares S&P Global 100 Index Fund......................................... 29 iShares S&P Global Energy Sector Index Fund............................... 33 iShares S&P Global Financials Sector Index Fund........................... 36 iShares S&P Global Healthcare Sector Index Fund........................... 41 iShares S&P Global Technology Sector Index Fund........................... 44 iShares S&P Global Telecommunications Sector Index Fund................... 48 iShares S&P Europe 350 Index Fund......................................... 51 iShares S&P Latin America 40 Index Fund................................... 58 iShares S&P/TOPIX 150 Index Fund.......................................... 60 iShares Nasdaq Biotechnology Index Fund................................... 64 Financial Statements........................................................ 67 Financial Highlights........................................................ 75 Notes to the Financial Statements........................................... 83 iShares Family of Funds..................................................... 90 TO OUR SHAREHOLDERS: For many investors, the last few years have been difficult and challenging. The collapse of the stock market bubble, a tepid economy, corporate accounting scandals, lackluster company earnings and the geopolitical situation all contributed to a three-year bear market. Stock market gains during the first half of 2003 give some hope that the markets have turned a corner, but there is no guarantee that challenging market conditions will not return. iShares have continued to innovate and expand, offering more tools that help investors tailor their portfolios to achieve diversity and address volatility in a complex market environment. For example, we recently launched the iShares Dow Jones Transportation Average and iShares Dow Jones Select Dividend Index Funds and in April of this year, iShares launched an emerging markets exchange traded fund based on the MSCI Emerging Markets Free Index. Last year, iShares launched the first fixed income exchange traded funds, which BUSINESS WEEK named one of the best new products of 2002./1/ We will be adding a Lehman Aggregate Bond Fund to our fixed income menu, enabling investors to track one of the most well known U.S. fixed income market indexes. We will also be adding the iShares Lehman TIPS Bond Fund, which provides the opportunity to invest in inflation protected government securities. Assets under management for the fixed income iShares funds were $4.2 billion as of September 30, 2003. With the addition of these iShares, investors can achieve even more diversity in their portfolios -- and at lower cost, since iShares fees are, on average, about half those of actively managed funds./2/ With over 80 different iShares to choose from, investors have the ability to build a diverse portfolio that covers a wide swath of market segments such as capitalization, sectors, value and growth, international and fixed income. That is important because market segments do not tend to move in tandem, particularly in volatile markets. Economic conditions such as inflation, interest rate levels, currency valuations or the price of oil, as well as the normal pace of the economic cycle, all may result in one market segment outperforming another. We encourage you to talk with your financial advisor about what blend of investments or asset allocation can best help you meet your financial goals. Throughout the coming year we will continue to work closely with the financial advisor community to introduce innovative strategies and structures for their client's portfolios. To learn more about iShares, we encourage you to visit our web site, www.iShares.com. At times like these, the importance of sound, disciplined investing is greater than ever. Such investing should be grounded in two key concepts: keeping the costs associated with investing as low as possible, and maintaining a diversified portfolio. That is why we believe iShares are an indispensable tool for investors in the current market. And that is also why more and more investors have recognized the benefits of iShares. Assets under management for iShares continue to grow, and as of September 30, 2003, had reached $44.5 billion. On behalf of the iShares family of funds and our colleagues at Barclays Global Investors, we thank you for making iShares a part of your portfolio. We look forward to meeting your investment needs in the year ahead. /s/ Lee T. Kranefuss Lee T. Kranefuss PRESIDENT AND CHAIRMAN OF THE BOARD OF TRUSTEES FOR 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. ---------- /1/ BUSINESS WEEK, 12/16/02. /2/ Morningstar Principia, BGI analysis 5/03. SHAREHOLDER LETTER 1 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. The annual management fees of iShares may be substantially less than those of most mutual funds. iShares transactions will result in brokerage commissions, but the savings from lower annual fees can help offset these costs. Past performance does not guarantee future results. iShares are not sponsored, endorsed, or issued by Lehman Brothers, nor are they sponsored, endorsed, issued, sold or promoted by Dow Jones & Company Inc., or Morgan Stanley Capital International. 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 the companies listed above. This advertising section does not constitute part of the 2003 Semi-Annual Report. 2 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS THIS PAGE INTENTIONALLY LEFT BLANK. 3 MANAGERS' DISCUSSION & ANALYSIS iSHARES S&P 100 INDEX FUND Performance as of 9/30/03 AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS ------------------------------------------------- ------------------------- YEAR ENDED 9/30/03 INCEPTION TO 9/30/03 INCEPTION TO 9/30/03 ---------------------- ------------------------- ------------------------- NAV MARKET INDEX NAV MARKET INDEX NAV MARKET INDEX 24.50% 24.84% 24.77% (11.13)% (11.09)% (10.97)% (29.31)% (29.23)% (28.94)% "Total returns for the period since inception" are calculated from the inception date of the Fund (10/23/00). "Average annual total returns" represent the average annual change in value of an investment over the periods indicated. "Cumulative total returns" represent 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 of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return ("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 NAV 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 gain distributions have been reinvested in the Fund at Market Price and NAV, 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. [CHART APPEARS HERE] TOP 10 FUND SECTORS (% of Net Assets) FINANCIALS 19.46% INFORMATION TECHNOLOGY 19.10% CONSUMER STAPLES 15.33% HEALTH CARE 14.24% INDUSTRIALS 10.66% CONSUMER DISCRETIONARY 7.61% ENERGY 5.63% TELECOMMUNICATION SERVICES 3.87% MATERIALS 2.42% UTILITIES 1.55% The iShares S&P 100 Index Fund (the "Fund") seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Standard & Poor's 100 Index (the "Index"). For the six months ended September 30, 2003 (the "reporting period"), the Fund returned 17.12%, compared to a return of 17.25% by the Index. Equity markets rebounded during the six-month reporting period. As the war in Iraq came to an official close, equity markets reversed course and marched upward. Economic news began to provide encouragement. Second quarter GDP growth, after several upward revisions, revealed a healthy 3.3% growth. Corporate America also contributed to the optimism. Second quarter earnings announcements provided both higher earnings levels than previous quarters and stabilizing earnings expectations. One negative area, however, continued to be the job market, which worsened, declining each month of the reporting period. Performance among industry sectors was largely positive during the reporting period. Information technology (19.13% of the Index as of September 30, 2003) returned 29.15%, and financials (19.48% of the Index as of September 30, 2003) gained 26.91%. Utilities (1.55% of the Index as of September 30, 2003) gained 24.60%. Consumer discretionary and industrials (respectively 7.62% and 10.67% of the Index as of 4 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS September 30, 2003) climbed 21.66% and 21.55%, respectively. The only negative performance came from health care (14.26% of the Index as of September 30, 2003), which fell 0.45%. Among the Index's ten largest constituents, Intel Corp. (3.46% of the Index as of September 30, 2003) was the top performer with a 69.04% gain. Citigroup Inc. (4.53% of the Index as of September 30, 2003) returned 32.10%. General Electric Co. (5.77% of the Index as of September 30, 2003) climbed 16.90%, and American International Group Inc. (2.91% of the Index as of September 30, 2003) rose 16.68%. Of the ten largest constituents in the Index, only two suffered losses: Johnson & Johnson (2.84% of the Index as of September 30, 2003) fell 14.43%, and Pfizer Inc. (4.57% of the Index as of September 30, 2003) declined 2.50%. MANAGERS' DISCUSSION & ANALYSIS 5 MANAGERS' DISCUSSION & ANALYSIS iSHARES S&P GLOBAL 100 INDEX FUND Performance as of 9/30/03 AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS ------------------------------------------------- ------------------------ YEAR ENDED 9/30/03 INCEPTION TO 9/30/03 INCEPTION TO 9/30/03 ---------------------- ------------------------ ------------------------ NAV MARKET INDEX NAV MARKET INDEX NAV MARKET INDEX 25.25% 26.58% 25.57% (11.34)% (11.15)% (10.62)% (28.80)% (28.36)% (27.13)% "Total returns for the period since inception" are calculated from the inception date of the Fund (12/05/00). "Average annual total returns" represent the average annual change in value of an investment over the periods indicated. "Cumulative total returns" represent 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 of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return ("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 NAV 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 gain distributions have been reinvested in the Fund at Market Price and NAV, 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. [CHART APPEARS HERE] TOP 10 FUND HOLDINGS (% of Net Assets) GENERAL ELECTRIC CO. 4.94% MICROSOFT CORP. 4.38% EXXON MOBIL CORP. 4.01% PFIZER INC. 3.98% CITIGROUP INC. 3.85% INTEL CORP. 3.08% BP PLC 2.56% INTERNATIONAL BUSINESS MACHINES CORP. 2.53% WAL-MART STORES INC. 2.50% AMERICAN INTERNATIONAL GROUP INC. 2.49% The iShares S&P Global 100 Index Fund (the "Fund") seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Standard & Poor's Global 100 Index (the "Index"). For the six months ended September 30, 2003 (the "reporting period"), the Fund returned 20.01%, compared to a return of 20.29% by the Index. Global equity markets rebounded during the six-month reporting period. As the war in Iraq reached an official conclusion and the economic outlook began to offer some signs of encouragement, stocks climbed. In the U.S., the Federal Reserve Board (the "Fed") cut short-term interest rates by 0.25% to the lowest level since the Eisenhower administration. By the third quarter, corporate earnings announcements showed higher earnings levels and stabilizing earnings expectations. GDP grew at an annual 3.3% rate, largely due to increased government spending. Unemployment levels, however, remained a problem, rising to a nine-year high. Japan and other Asian markets enjoyed increased export levels, largely due to improving economic conditions in the U.S. Japan's export levels were also helped by exchange rates. Because Japan is largely depending on an export-led recovery, its central bank maintained its commitment to a weak currency through the ongoing sale of yen during the period. 6 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS In Europe, despite sluggish growth, markets began to deliver positive returns. Several European markets, such as Germany, grew in fits and starts as stocks initially rebounded in response to the conclusion of war, only to stall or drift back downward. Although economic growth levels remained low in most European markets, corporate earnings levels did gain momentum during the reporting period. Among the Index's ten largest constituents, performance was mostly positive. Intel Corp. (2.98% of the Index as of September 30, 2003) was the top performer, gaining 69.04%. Citigroup Inc. (3.91% of the Index as of September 30, 2003) rose 32.10%. The largest weighting at 4.98% of the Index, General Electric Co. climbed 16.90%, and American International Group Inc. (2.51% of the Index as of September 30, 2003) returned 16.68%. Among the ten largest constituents in the Index, the only negative performer was Pfizer Inc. (3.94% of the Index as of September 30, 2003), which fell 2.50%. MANAGERS' DISCUSSION & ANALYSIS 7 MANAGERS' DISCUSSION & ANALYSIS iSHARES S&P GLOBAL ENERGY SECTOR INDEX FUND Performance as of 9/30/03 AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS ---------------------------------------------- -------------------------- YEAR ENDED 9/30/03 INCEPTION TO 9/30/03 INCEPTION TO 9/30/03 ---------------------- ---------------------- -------------------------- NAV MARKET INDEX NAV MARKET INDEX NAV MARKET INDEX 15.37% 15.51% 15.98% 1.22% 1.38% 0.67% 2.31% 2.61% 1.26% "Total returns for the period since inception" are calculated from the inception date of the Fund (11/12/01). "Average annual total returns" represent the average annual change in value of an investment over the periods indicated. "Cumulative total returns" represent 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 of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return ("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 NAV 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 gain distributions have been reinvested in the Fund at Market Price and NAV, 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. [CHART APPEARS HERE] TOP 10 FUND HOLDINGS (% of Net Assets) EXXON MOBIL CORP. 20.21% BP PLC 12.77% TOTAL SA 8.48% ROYAL DUTCH PETROLEUM CO. 6.92% CHEVRONTEXACO CORP. 4.76% ENI SPA 4.40% SHELL TRANSPORT & TRADING CO. PLC 4.34% CONOCOPHILLIPS 4.05% ENCANA CORP. 2.67% SCHLUMBERGER LTD. 2.65% The iShares S&P Global Energy Sector Index Fund (the "Fund") seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Standard & Poor's Global Energy Sector Index (the "Index"). For the six-month period ending September 30, 2003 (the "reporting period"), the Fund returned 11.83%, compared to a return of 11.89% by the Index. Global equity markets reversed course and logged gains during the six-month reporting period. The official close to the war in Iraq lifted the cloud of uncertainty from many markets, and stocks generally responded positively. In many regions, signs of economic growth began to emerge. The U.S. experienced a healthier GDP growth level, posting a 3.3% annual growth for the second quarter. The more optimistic economic outlook in the U.S., in turn, helped the outlook for companies in Europe and Asia. Oil prices experienced a volatile period. The war in Iraq elevated oil prices as it created instability in the region. After the war ended, oil prices drifted downward as a result of resumed production in Iraq and higher inventories in the U.S. and Europe, as well as increased production in Russia. In August alone, the price of crude oil dropped 13%, to just over $25 per barrel. Fearing further price erosion and rising inventories, the Organization of Petroleum Exporting Countries (OPEC) decided to cut production by 3%-5%, effective November 1. 8 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS The ten largest companies in the Index generally performed well during the reporting period. Oil service and exploration company Schlumberger Ltd. (2.55% of the Index as of September 30, 2003) gained 27.33%. The large, diversified oil companies mostly logged gains. Total SA (9.25% of the Index as of September 30, 2003) gained 11.72%, and ChevronTexaco Corp. (6.91% of the Index as of September 30, 2003) returned 10.52%. Exxon Mobil Corp., the largest weighting at 21.98% of the Index, climbed 4.72%, and BP PLC (13.72% of the Index as of September 30, 2003) returned 2.93%. Of the ten largest constituents, the only negative performer was Shell Transport & Trading Co. PLC (5.44% of the Index as of September 30, 2003), which declined 2.88%. MANAGERS' DISCUSSION & ANALYSIS 9 MANAGERS' DISCUSSION & ANALYSIS iSHARES S&P GLOBAL FINANCIALS SECTOR INDEX FUND Performance as of 9/30/03 AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS -------------------------------------------- -------------------------- YEAR ENDED 9/30/03 INCEPTION TO 9/30/03 INCEPTION TO 9/30/03 ---------------------- -------------------- -------------------------- NAV MARKET INDEX NAV MARKET INDEX NAV MARKET INDEX 29.79% 29.76% 31.06% 1.21% 1.29% 2.01% 2.29% 2.44% 3.82% "Total returns for the period since inception" are calculated from the inception date of the Fund (11/12/01). "Average annual total returns" represent the average annual change in value of an investment over the periods indicated. "Cumulative total returns" represent 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 of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return ("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 NAV 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 gain distributions have been reinvested in the Fund at Market Price and NAV, 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. [CHART APPEARS HERE] TOP 10 FUND HOLDINGS (% of Net Assets) CITIGROUP INC. 6.33% AMERICAN INTERNATIONAL GROUP INC. 4.08% HSBC HOLDINGS PLC 3.82% BANK OF AMERICA CORP. 3.14% WELLS FARGO & COMPANY 2.33% JP MORGAN CHASE & CO. 1.89% ROYAL BANK OF SCOTLAND GROUP PLC 1.88% FANNIE MAE 1.85% UBS AG REGISTERED 1.75% AMERICAN EXPRESS CO. 1.58% The iShares S&P Global Financials Sector Index Fund (the "Fund") seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Standard & Poor's Global Financials Sector Index (the "Index"). For the six-month period ending September 30, 2003 (the "reporting period"), the Fund returned 28.69%, compared to a return of 29.29% by the Index. Global markets rebounded during the six-month reporting period. In the U.S., second quarter GDP growth was revealed to be at an annual rate of 3.3%, much higher than analysts had anticipated. Corporate earnings announcements for the second quarter also provided cause for optimism. In Japan, second quarter GDP growth was also reported to be higher than generally expected, and the market logged gains despite ongoing domestic concerns. Europe still struggled with sluggish growth, but many companies, particularly financial companies, received a boost from the improved conditions in the U.S., and major markets generally posted gains. Financial companies generally benefited from the improved economic conditions. Investment banks benefited from the positive performance of equity markets during the period and corresponding renewed investor interest in financial markets. The official conclusion to the war in Iraq also lifted a weight from the backs of insurers. And, lower interest rates and high levels of refinance activity continued to be a boon to lenders. 10 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS Among all of the ten largest constituents in the Index, performance was positive. JP Morgan Chase & Co. (1.90% of the Index as of September 30, 2003) led the way with a 44.79% gain. American Express Co. (1.57% of the Index as of September 30, 2003) returned 35.60%. Citigroup Inc., the largest weighting at 6.36% of the Index, climbed 32.10%. UBS AG and HSBC Holdings PLC (respectively 1.80% and 3.88% of the Index as of September 30, 2003) rose 28.87% and 22.27%, respectively. The weakest performer of the ten largest weightings was Royal Bank of Scotland Group PLC (1.93% of the Index as of September 30, 2003), which posted a healthy 7.37% gain. MANAGERS' DISCUSSION & ANALYSIS 11 MANAGERS' DISCUSSION & ANALYSIS iSHARES S&P GLOBAL HEALTHCARE SECTOR INDEX FUND Performance as of 9/30/03 AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS ---------------------------------------------- ------------------------- YEAR ENDED 9/30/03 INCEPTION TO 9/30/03 INCEPTION TO 9/30/03 ---------------------- ---------------------- ------------------------- NAV MARKET INDEX NAV MARKET INDEX NAV MARKET INDEX 10.97% 11.56% 11.73% (6.99)% (6.83)% (6.63)% (12.75)% (12.47)% (12.10)% "Total returns for the period since inception" are calculated from the inception date of the Fund (11/13/01). "Average annual total returns" represent the average annual change in value of an investment over the periods indicated. "Cumulative total returns" represent 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 of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return ("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 NAV 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 gain distributions have been reinvested in the Fund at Market Price and NAV, 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. [CHART APPEARS HERE] TOP 10 FUND HOLDINGS (% of Net Assets) PFIZER INC. 13.14% JOHNSON & JOHNSON 8.15% GLAXOSMITHKLINE PLC 6.90% MERCK & CO. INC. 6.33% NOVARTIS AG 5.38% AMGEN INC. 4.62% ASTRAZENECA PLC 4.05% LILLY (ELI) & CO. 3.75% ABBOTT LABORATORIES 3.66% WYETH 3.38% The iShares S&P Global Healthcare Sector Index Fund (the "Fund") seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Standard & Poor's Global Healthcare Sector Index (the "Index"). For the six-month period ending September 30, 2003 (the "reporting period"), the Fund returned 7.86%, compared to a return of 8.24% by the Index. As the official conclusion to the war in Iraq lifted the cloud of uncertainty that had descended on global markets, stocks rebounded during the six-month reporting period. In the U.S., investors turned their attention to the domestic economy, which was showing renewed signs of life. In particular, second quarter GDP figures revealed an economy growing at an annual rate of 3.3%, well above the 1.5% originally predicted. In Japan, an export-led rebound pushed stocks higher. In Europe, many countries benefited from improved export levels and generally better economic conditions. Health care companies posted mixed results for the reporting period. Several key pharmaceutical companies face expirations on their patents and in turn, the threat of competition from generic drug makers. However, several pharmaceutical companies saw their share price rise during the reporting period on positive news related to drugs in their pipelines. And, as investors became willing to return to growth-oriented stocks, some biotechnology and medical technology companies benefited from renewed investor interest in the area. 12 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS Among the Index's ten largest constituents, Wyeth (3.41% of the Index as of September 30, 2003) was the best performer, gaining 21.89%. UK pharmaceutical companies AstraZeneca PLC and GlaxoSmithKline PLC (respectively 4.02% and 6.90% of the Index as of September 30, 2003) returned 17.85% and 12.22%, respectively. Abbott Laboratories (3.70% of the Index as of September 30, 2003) climbed 13.13%. On the negative side, Johnson & Johnson (8.18% of the Index as of September 30, 2003) fell 14.43%, Merck & Co. Inc. (6.30% of the Index as of September 30, 2003) declined 2.37%, and Pfizer Inc. (13.16% of the Index as of September 30, 2003) dropped 2.50%. MANAGERS' DISCUSSION & ANALYSIS 13 MANAGERS' DISCUSSION & ANALYSIS iSHARES S&P GLOBAL TECHNOLOGY SECTOR INDEX FUND Performance as of 9/30/03 AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS ---------------------------------------------- ------------------------- YEAR ENDED 9/30/03 INCEPTION TO 9/30/03 INCEPTION TO 9/30/03 ---------------------- ---------------------- ------------------------- NAV MARKET INDEX NAV MARKET INDEX NAV MARKET INDEX 57.41% 57.69% 57.44% (8.47)% (8.38)% (7.66)% (15.36)% (15.21)% (13.91)% "Total returns for the period since inception" are calculated from the inception date of the Fund (11/12/01). "Average annual total returns" represent the average annual change in value of an investment over the periods indicated. "Cumulative total returns" represent 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 of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return ("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 NAV 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 gain distributions have been reinvested in the Fund at Market Price and NAV, 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. [CHART APPEARS HERE] TOP 10 FUND HOLDINGS (% of Net Assets) MICROSOFT CORP. 14.21% INTEL CORP. 8.61% INTERNATIONAL BUSINESS MACHINES CORP. 7.24% CISCO SYSTEMS INC. 6.56% DELL INC. 4.08% NOKIA OYJ 3.47% HEWLETT-PACKARD CO. 2.81% ORACLE CORP. 2.79% CANON INC. 2.17% SAMSUNG ELECTRONICS CO. LTD. GDR 2.08% The iShares S&P Global Technology Sector Index Fund (the "Fund") seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Standard & Poor's Global Information Technology Sector Index (the "Index"). For the six-month period ending September 30, 2003 (the "reporting period"), the Fund returned 34.55%, compared to a return of 34.68% by the Index. Global equity markets rebounded during the reporting period. As the war in Iraq came to an official close, markets responded, leading a solid rally through the end of September. As U.S. investors turned their attention on the domestic economy, they found cause for optimism. GDP growth for the second quarter, originally estimated at 1.5%, ultimately revealed a 3.3% annual rate. Corporate earnings announcements provided additional encouragement in the form of increased earnings levels and stabilizing earnings expectations. An improving U.S. economy also translated into increased commerce for many European and Asian companies. Japan enjoyed rising GDP levels and market performance, thanks largely to its exporters. Information technology stocks were one of the market leaders during the reporting period, particularly in the U.S. Both global PC sales and global chip sales levels climbed throughout the period, spurring a rally in the depressed technology sector. Encouraging earnings 14 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS announcements from some technology bellwethers also helped share prices. Some of the names that had endured the biggest declines in recent reporting periods rebounded the most, as investors expressed renewed interest in growth-oriented stocks, particularly ones with depressed prices. Among the Index's ten largest constituents, all delivered positive returns. Intel Corp. (8.48% of the Index as of September 30, 2003) led the way with a 69.04% gain. Cisco Systems Inc. (6.49% of the Index as of September 30, 2003) climbed 50.92%, Texas Instruments Inc. (1.87% of the Index as of September 30, 2003) gained 39.28%, and Samsung Electronics Co. Ltd. GDR (2.09% of the Index as of September 30, 2003) returned 38.03%. Dell Inc. (4.06% of the Index as of September 30, 2003) gained 22.37%. The weakest performance among the ten largest weightings came from Oracle Corp. (2.78% of the Index as of September 30, 2003), which gained 3.70%. MANAGERS' DISCUSSION & ANALYSIS 15 MANAGERS' DISCUSSION & ANALYSIS iSHARES S&P GLOBAL TELECOMMUNICATIONS SECTOR INDEX FUND Performance as of 9/30/03 AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS ------------------------------------------------- ------------------------ YEAR ENDED 9/30/03 INCEPTION TO 9/30/03 INCEPTION TO 9/30/03 ---------------------- ------------------------- ------------------------ NAV MARKET INDEX NAV MARKET INDEX NAV MARKET INDEX 38.71% 39.12% 39.63% (11.60)% (11.46)% (11.16)% (20.74)% (20.51)% (19.95)% "Total returns for the period since inception" are calculated from the inception date of the Fund (11/12/01). "Average annual total returns" represent the average annual change in value of an investment over the periods indicated. "Cumulative total returns" represent 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 of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return ("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 NAV 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 gain distributions have been reinvested in the Fund at Market Price and NAV, 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. [CHART APPEARS HERE] TOP 10 FUND HOLDINGS (% of Net Assets) VODAFONE GROUP PLC 15.44% VERIZON COMMUNICATIONS INC. 10.16% SBC COMMUNICATIONS INC. 8.38% TELEFONICA SA 6.18% NTT DOCOMO INC. 5.08% BELLSOUTH CORP. 4.96% NIPPON TELEGRAPH & TELEPHONE CORP. 4.59% DEUTSCHE TELEKOM AG 3.96% BT GROUP PLC 2.94% TELECOM ITALIA SPA 2.53% The iShares S&P Global Telecommunications Sector Index Fund (the "Fund") seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Standard & Poor's Global Telecommunications Sector Index (the "Index"). For the six-month period ending September 30, 2003 (the "reporting period"), the Fund returned 18.20%, compared to a return of 18.41% by the Index. Global markets rebounded during the reporting period, spurred by an official conclusion to the war in Iraq and improving economic conditions. The U.S. saw increases in GDP growth levels and corporate earnings. Japan continued to struggle with its domestic economy but experienced a market rally fueled largely by export growth. Europe began to experience some economic growth, and benefited from the improved U.S. economy. Telecommunications stocks rebounded globally during the reporting period. After languishing in recent reporting periods, the telecommunications sector enjoyed a resurgence that enabled share prices to retrace some of their losses and post gains for the reporting period. In general, the growth came from a renewed interest in investment activity in response to the conclusion of the war and improved economic 16 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS conditions. Investors generally appeared more willing to return to more growth-oriented securities again, and, for many, the depressed share prices provided additional incentive. Among the Index's ten largest constituents, performance was mostly positive. Nippon Telegraph & Telephone Corp. (4.54% of the Index as of September 30, 2003) gained 25.56%, and NTT DoCoMo Inc. (5.15% of the Index as of September 30, 2003) climbed 23.53%. Deutsche Telekom AG (3.93% of the Index as of September 30, 2003) rose 23.05%. Telefonica SA (6.18% of the Index as of September 30, 2003) returned 18.32%, and BT Group PLC (2.94% of the Index as of September 30, 2003) gained 14.65%. The only negative performer among the ten largest weightings was Verizon Communications Inc. (10.14% of the Index as of September 30, 2003), which declined 8.23%. MANAGERS' DISCUSSION & ANALYSIS 17 MANAGERS' DISCUSSION & ANALYSIS iSHARES S&P EUROPE 350 INDEX FUND Performance as of 9/30/03 AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS ------------------------------------------------ ------------------------- YEAR ENDED 9/30/03 INCEPTION TO 9/30/03 INCEPTION TO 9/30/03 ---------------------- ------------------------ ------------------------- NAV MARKET INDEX NAV MARKET INDEX NAV MARKET INDEX 26.98% 26.36% 28.70% (10.14)% (10.04)% (9.54)% (28.88)% (28.61)% (27.29)% "Total returns for the period since inception" are calculated from the inception date of the Fund (7/25/00). "Average annual total returns" represent the average annual change in value of an investment over the periods indicated. "Cumulative total returns" represent 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 of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return ("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 (7/28/00), the NAV 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 gain distributions have been reinvested in the Fund at Market Price and NAV, 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. [CHART APPEARS HERE] TOP 10 FUND HOLDINGS (% of Net Assets) BP PLC 3.56% HSBC HOLDINGS PLC 3.33% VODAFONE GROUP PLC 3.16% GLAXOSMITHKLINE PLC 2.94% TOTAL SA 2.40% NOVARTIS AG 2.24% ROYAL DUTCH PETROLEUM CO. 2.16% NESTLE SA 2.14% NOKIA OYJ 1.72% ASTRAZENECA PLC 1.71% The iShares S&P Europe 350 Index Fund (the "Fund") seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Standard & Poor's Europe 350 Index (the "Index"). The 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 Luxembourg. For the six months ending September 30, 2003 (the "reporting period"), the Fund returned 26.38%, compared to a return of 27.39% by the Index. European markets rebounded during the six-month reporting period. Although economic growth remained tepid across Europe, markets responded positively to the official conclusion of the war in Iraq and the improving economic outlook. Corporate earnings upgrades increased during the final months of the reporting period, providing additional cause for optimism. The war's conclusion provided a tailwind for several industries in Europe, notably insurance companies, whose share prices had been dragged down by potential risk exposure, as well as airlines, which had struggled with the elevated oil prices during the war. Because of the volatility of oil prices, oil companies endured a bumpy road, but generally finished the period with positive results. Technology and 18 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS telecommunications companies benefited from a return of investors globally, who seemed willing to dip a toe into the waters of growth-oriented stocks once again. All of the Index's ten largest constituents logged gains during the reporting period. HSBC Holdings PLC (3.36% of the Index as of September 30, 2003) gained 22.27%. AstraZeneca PLC (1.70% of the Index as of September 30, 2003) climbed 17.85%, and Nestle SA (2.18% of the Index as of September 30, 2003) rose 13.83%. GlaxoSmithKline PLC (2.91% of the Index as of September 30, 2003) returned 12.22%. The weakest performer among the ten largest weightings was Royal Dutch Petroleum Co. (2.15% of the Index as of September 30, 2003), which gained 1.07%. MANAGERS' DISCUSSION & ANALYSIS 19 MANAGERS' DISCUSSION & ANALYSIS iSHARES S&P LATIN AMERICA 40 INDEX FUND Performance as of 9/30/03 AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS ---------------------------------------------- ------------------------- YEAR ENDED 9/30/03 INCEPTION TO 9/30/03 INCEPTION TO 9/30/03 ---------------------- ---------------------- ------------------------- NAV MARKET INDEX NAV MARKET INDEX NAV MARKET INDEX 60.65% 61.05% 64.15% 10.89% 11.34% 11.47% 22.13% 23.09% 23.32% "Total returns for the period since inception" are calculated from the inception date of the Fund (10/25/01). "Average annual total returns" represent the average annual change in value of an investment over the periods indicated. "Cumulative total returns" represent 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 of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return ("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 NAV 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 gain distributions have been reinvested in the Fund at Market Price and NAV, 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. [CHART APPEARS HERE] TOP 10 FUND HOLDINGS (% of Net Assets) TELEFONOS DE MEXICO SA DE CV ADR SERIES L 11.12% AMERICA MOVIL SA DE CV SERIES L 8.79% PETROLEO BRASILEIRO SA ADR 8.34% CEMEX SA DE CV SERIES CPO 7.76% COMPANHIA VALE DO RIO DOCE ADR 5.52% COMPANHIA DE BEBIDAS DAS AMERICAS ADR 5.16% BANCO ITAU HOLDING FINANCIERA SA ADR 4.28% TELE NORTE LESTE PARTICIPACOES SA ADR 3.76% GRUPO FINANCIERO BBVA BANCOMER SA DE CV CLASS B 3.74% WAL-MART DE MEXICO SA DE CV SERIES V 3.53% The iShares S&P Latin America 40 Index Fund (the "Fund") seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Standard & Poor's Latin America 40 Index (the "Index"). The Index is comprised of highly liquid securities from major economic sectors of the Mexican and South American equity markets. Companies from Mexico, Brazil, Argentina, and Chile are represented in the Index. For the six-month period ending September 30, 2003 (the "reporting period"), the Fund returned 38.28%, compared with a return of 40.38% by the Index. During the reporting period, the Index rebounded sharply from the previous reporting period. As was the case for many equity markets around the world, stock markets in Latin America benefited from improving global economic growth. But, because of their lower labor costs and raw materials, emerging markets, such as those represented by the Index, have tended to benefit more from global economic recovery than have their more developed counterparts. Mexico, in particular, received a boost from improving economic conditions in the U.S., Mexico's key export market. Brazil's market staged a turnaround, based largely on political events. During much of 2002, investors had been worried that leftist Presidential candidate Luis Inacio Lula da Silva, if elected, might seek to unwind market-oriented reforms that had been put in place earlier 20 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS in 2002. This concern had contributed to an exodus of foreign investment, which in turn sparked a decline in the Brazilian currency, the real. The currency devaluation pushed up Brazil's external debt levels, sparking fears of a potential default and leading to further stock market declines. Luiz Inacio Lula da Silva was, indeed elected in late 2002. Since his election, he has successfully reduced government spending in Brazil, strengthening investors' confidence in the country. In addition, the real has appreciated sharply. The strengthening real helped many Brazilian companies, which have debt denominated in U.S. dollars. Argentina, which in previous reporting periods endured political turmoil, the largest sovereign debt default in history and devaluation of its currency, appeared to turn the corner toward recovery during the reporting period. But further reform will likely be necessary before full economic recovery is secured. Chile, which had escaped its neighbors' economic woes in 2002, performed well during the reporting period. Because its economy is heavily dependent on commodity exports, Chile benefited from improved global economic conditions. All of the ten largest constituents in the Index delivered positive performance during the reporting period, with nine of the ten posting double-digit gains. Leading the way was America Movil, SA de CV Series L (8.67% of the Index as of September 30, 2003), which gained 74.83%. Tele Norte Leste Participacoes SA ADR (3.75% of the Index as of September 30, 2003) climbed 68.97%. Compania de Petroleos de Chile SA and Petroleo Brasileiro SA ADR (respectively 3.56% and 8.48% of the Index as of September 30, 2003) returned 59.35% and 54.43%, respectively. The weakest performance among the ten largest weightings came from the Index's largest weighting, Telefonos de Mexico, SA de CV Series L (10.99% of the Index as of September 30, 2003), which gained 5.38% during the reporting period. MANAGERS' DISCUSSION & ANALYSIS 21 MANAGERS' DISCUSSION & ANALYSIS iSHARES S&P/TOPIX 150 INDEX FUND Performance as of 9/30/03 AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS -------------------------------------------- -------------------------- YEAR ENDED 9/30/03 INCEPTION TO 9/30/03 INCEPTION TO 9/30/03 ---------------------- -------------------- -------------------------- NAV MARKET INDEX NAV MARKET INDEX NAV MARKET INDEX 17.18% 18.17% 18.28% 0.20% 0.30% 0.92% 0.38% 0.59% 1.80% "Total returns for the period since inception" are calculated from the inception date of the Fund (10/23/01). "Average annual total returns" represent the average annual change in value of an investment over the periods indicated. "Cumulative total returns" represent 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 of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return ("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 NAV 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 gain distributions have been reinvested in the Fund at Market Price and NAV, 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. [CHART APPEARS HERE] TOP 10 FUND HOLDINGS (% of Net Assets) TOYOTA MOTOR CORP. 6.58% NTT DOCOMO INC. 3.73% NIPPON TELEGRAPH & TELEPHONE CORP. 3.26% CANON INC. 2.97% SONY CORP. 2.58% HONDA MOTOR CO. LTD. 2.50% NOMURA HOLDINGS INC. 2.38% TAKEDA CHEMICAL INDUSTRIES LTD. 2.31% NISSAN MOTOR CO. LTD. 2.05% MATSUSHITA ELECTRIC INDUSTRIAL CO. LTD. 1.99% The iShares S&P/TOPIX 150 Index Fund (the "Fund") seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Standard & Poor's/Tokyo Stock Price 150 Index (the "Index"). The Index includes 150 highly liquid securities selected from each major sector of the Tokyo market. For the six-month reporting period ending September 30, 2003 (the "reporting period"), the Fund returned 34.22%, compared to a return of 36.29% by the Index. Japan logged strong gains for the third quarter. Its economy, however, continues to struggle. Japanese wages had their biggest decline this year in August, suggesting a recovery in consumer spending may be limited. Because consumer spending accounts for more than half of Japan's GDP, this weakness points to a continued export-led recovery. A major wild card in the equation is exchange rates. A strengthening yen would hamper exports, and could cut import prices for consumer goods, making it more difficult for Japan to end a five-year bout with deflation. The central bank maintained its commitment to a weak currency through the ongoing sale of yen during the period. During the period from August 28 to September 26 alone, the Ministry of Finance sold a record 4.46 trillion yen in response to a strengthening yen. In addition, in September, the G-7 finance ministers endorsed the concept of freely floating currencies, which caused the yen to decline. Some of Japan's big exporters, including Sharp Corp. and Canon Inc. benefited from efforts to keep the yen lower, increasing capital spending to meet growing orders for mobile phones, digital cameras and other goods. 22 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS Among the ten largest constituents in the Index, performance was mostly positive. Nissan Motor Co. Ltd. (2.03% of the Index as of September 30, 2003) gained 52.53% during the reporting period. Nomura Holdings Inc. (2.41% of the Index as of September 30, 2003) climbed 45.75%, and Matsushita Electric Industrial Co. Ltd. (1.96% of the Index as of September 30, 2003) rose 32.77%. Canon Inc. (3.17% of the Index as of September 30, 2003) returned 31.88%. The largest weighting at 6.59% of the Index, Toyota Motor Corp. gained 24.48%. Two of the ten largest weightings delivered negative performance: Takeda Chemical Industries Ltd. (2.31% of the Index as of September 30, 2003) declined 8.13%, and Sony Corp. (2.56% of the Index as of September 30, 2003) fell 7.14%. MANAGERS' DISCUSSION & ANALYSIS 23 MANAGERS' DISCUSSION & ANALYSIS iSHARES NASDAQ BIOTECHNOLOGY INDEX FUND Performance as of 9/30/03 AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS ------------------------------------------------- ------------------------- YEAR ENDED 9/30/03 INCEPTION TO 9/30/03 INCEPTION TO 9/30/03 ---------------------- ------------------------- ------------------------- NAV MARKET INDEX NAV MARKET INDEX NAV MARKET INDEX 54.44% 54.87% 54.97% (11.65)% (11.65)% (11.51)% (28.01)% (28.01)% (27.67)% "Total returns for the period since inception" are calculated from the inception date of the Fund (2/5/01). "Average annual total returns" represent the average annual change in value of an investment over the periods indicated. "Cumulative total returns" represent 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 of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return ("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 (2/9/01), the NAV 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 gain distributions have been reinvested in the Fund at Market Price and NAV, 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. [CHART APPEARS HERE] TOP 10 FUND HOLDINGS (% of Net Assets) AMGEN INC. 14.04% MGI PHARMA INC. 2.75% GILEAD SCIENCES INC. 2.57% GENZYME CORP. - GENERAL DIVISION 2.41% CHIRON CORP. 2.31% IMCLONE SYSTEMS INC. 2.23% LIGAND PHARMACEUTICALS INC. CLASS B 2.13% OSI PHARMACEUTICALS INC. 2.10% ALKERMES INC. 2.07% NEKTAR THERAPEUTICS 2.06% The iShares Nasdaq Biotechnology Index Fund (the "Fund") seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Nasdaq Biotechnology Index (the "Index"). For the six-month period ended September 30, 2003 (the "reporting period"), the Fund returned 40.44%, compared to a return of 40.67% by the Index. Equity markets reversed course during the six-month reporting period. Responding positively to the official conclusion to the war in Iraq, stocks generally led an upward march throughout the reporting period. Some economic news provided signs of encouragement: GDP growth for the second quarter was revised upward several times, ultimately showing an annual growth rate of 3.3%. A major driver of the growth was government spending, which grew at an annual pace of 8.5%. Corporate earnings growth was also strong and consistent, reaching double-digit growth rates toward the end of the reporting period. As the economic outlook showed signs of improvement, many investors returned to equity markets. Because of their growth orientation and depressed prices, many biotechnology stocks were recipients of the renewed investor interest. In addition, some bellwether biotechnology companies provided encouraging earnings announcements during the reporting period. 24 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS Reflecting the strength of the biotechnology sector's rebound during the reporting period, each of the ten largest weightings in the Index delivered double-digit or triple-digit gains. MGI Pharma Inc. (2.70% of the Index as of September 30, 2003) gained 206.43%. ImClone Systems Inc. (2.23% of the Index as of September 30, 2003) climbed 135.36%. OSI Pharmaceuticals Inc. and Nektar Therapeutics (respectively 2.11% and 2.05% of the Index as of September 30, 2003) returned 104.06% and 102.53%, respectively. Ligand Pharmaceuticals Inc. Class B (2.13% of the Index as of September 30, 2003) climbed 98.77%, and Alkermes Inc. (2.06% of the Index as of September 30, 2003) rose 51.27%. The largest weighting at 14.02% of the Index, Amgen Inc. gained 12.11%. MANAGERS' DISCUSSION & ANALYSIS 25 SCHEDULE OF INVESTMENTS (Unaudited) iSHARES S&P 100 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ----------------------------------------------------------------------------- COMMON STOCKS - 99.86% Microsoft Corp. 798,907 $ 22,201,626 General Electric Co. 740,069 22,061,457 Wal-Mart Stores Inc. 322,697 18,022,627 Exxon Mobil Corp. 490,286 17,944,468 Pfizer Inc. 575,076 17,470,809 Citigroup Inc. 380,452 17,314,371 Intel Corp. 480,984 13,231,870 International Business Machines Corp. 127,789 11,287,602 American International Group Inc. 192,733 11,120,694 Johnson & Johnson 219,265 10,858,003 Cisco Systems Inc./1/ 518,373 10,129,008 Procter & Gamble Co. 95,758 8,888,258 Bank of America Corp. 110,453 8,619,752 Merck & Co. Inc. 165,351 8,370,068 Coca-Cola Co. (The) 181,637 7,803,126 Verizon Communications Inc. 203,557 6,603,389 Altria Group Inc. 149,885 6,564,963 Wells Fargo & Company 124,035 6,387,803 Amgen Inc./1/ 95,381 6,158,751 PepsiCo Inc. 127,442 5,840,667 SBC Communications Inc. 245,357 5,459,193 Home Depot Inc. 169,673 5,404,085 JP Morgan Chase & Co. 150,397 5,163,129 AOL Time Warner Inc./1/ 333,263 5,035,604 Viacom Inc. Class B 129,677 4,966,629 Hewlett-Packard Co. 225,407 4,363,880 Oracle Corp./1/ 386,759 4,339,436 American Express Co. 95,144 4,287,189 Medtronic Inc. 89,951 4,220,501 Morgan Stanley 80,289 4,051,383 3M Co. 57,812 3,993,075 Merrill Lynch & Co. Inc. 69,043 3,695,872 Bristol-Myers Squibb Co. 143,125 3,672,587 U.S. Bancorp 142,233 3,412,170 Bank One Corp. 83,581 3,230,406 Walt Disney Co. (The) 150,863 3,042,907 Anheuser-Busch Companies Inc. 61,137 3,016,500 Tyco International Ltd. 147,441 3,012,220 Du Pont (E.I.) de Nemours and Co. 73,542 2,942,415 Goldman Sachs Group Inc. (The) 35,005 2,936,920 Texas Instruments Inc. 127,896 2,916,029 United Technologies Corp. 34,611 2,674,738 Gillette Co. (The) 75,393 2,411,068 Colgate-Palmolive Co. 39,723 2,220,118 McDonald's Corp. 93,929 2,211,089 Dow Chemical Co. (The) 67,786 2,205,756 Boeing Co. (The) 62,072 2,130,932 Schlumberger Ltd. 42,985 2,080,474 EMC Corp./1/ 161,926 2,045,125 Allstate Corp. (The) 51,966 1,898,318 Clear Channel Communications Inc. 45,333 1,736,254 General Motors Corp. 41,379 1,693,642 Honeywell International Inc. 63,507 1,673,409 Alcoa Inc. 62,393 1,632,201 Southern Company 53,754 1,576,067 Exelon Corp. 24,042 1,526,667 Nextel Communications Inc. Class A/1/ 76,400 1,504,316 Ford Motor Company 135,094 1,454,962 FedEx Corp. 22,095 1,423,581 International Paper Co. 35,347 1,379,240 HCA Inc. 36,990 1,363,451 Baxter International Inc. 44,254 1,286,021 AT&T Corp. 58,228 1,254,813 Lehman Brothers Holdings Inc. 17,880 1,235,150 General Dynamics Corp. 14,607 1,140,222 Avon Products Inc. 17,422 1,124,764 Hartford Financial Services Group Inc. 20,829 1,096,230 Sara Lee Corp. 57,344 1,052,836 Weyerhaeuser Co. 16,230 948,644 Sears, Roebuck and Co. 20,972 917,106 Entergy Corp. 16,847 912,265 Heinz (H.J.) Co. 26,041 892,685 American Electric Power Co. Inc. 29,133 873,990 Raytheon Co. 30,520 854,560 26 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P 100 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ----------------------------------------------------------------------------- Campbell Soup Co. 30,432 $ 806,448 Burlington Northern Santa Fe Corp. 27,613 797,187 Halliburton Co. 32,364 784,827 Baker Hughes Inc. 24,827 734,631 Lucent Technologies Inc./1/ 307,271 663,705 MedImmune Inc./1/ 18,522 611,411 Xerox Corp./1/ 58,399 599,174 Limited Brands Inc. 38,546 581,274 Norfolk Southern Corp. 28,917 534,965 May Department Stores Co. (The) 21,410 527,328 Computer Sciences Corp./1/ 13,884 521,622 CIGNA Corp. 10,390 463,913 Eastman Kodak Co. 21,291 445,834 National Semiconductor Corp./1/ 13,605 439,305 Williams Companies Inc. 38,586 363,480 Rockwell Automation Inc. 13,623 357,604 RadioShack Corp. 12,308 349,670 Harrah's Entertainment Inc. 8,181 344,502 AES Corp. (The)/1/ 45,752 339,480 Unisys Corp./1/ 24,163 326,925 El Paso Corp. 44,653 325,967 Black & Decker Corp. 5,732 232,433 Toys R Us Inc./1/ 15,864 190,844 Delta Air Lines Inc. 8,995 119,633 Boise Cascade Corp. 4,271 117,880 Allegheny Technologies Inc. 5,990 39,234 TOTAL COMMON STOCKS (Cost: $414,750,395) 382,091,412 SHORT TERM INVESTMENTS - 5.07% MONEY MARKET FUNDS - 3.04% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares/2/,/3/ 7,735,519 7,738,519 Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares/2/,/3/ 2,836,599 2,836,599 BlackRock Temp Cash Money Market Fund/2/ 126,007 126,007 SHARES OR SECURITY PRINCIPAL VALUE ----------------------------------------------------------------------------- Short Term Investment Co. - Liquid Assets Money Market Portfolio/2/ 668,796 $ 668,796 Short Term Investment Co. - Prime Money Market Portfolio, Institutional Shares/2/ 257,873 257,873 11,627,794 FLOATING RATE NOTES - 1.18% Beta Finance Inc. 1.08%, 05/20/04/2/ $ 128,936 128,924 1.08%, 09/15/04/2/ 257,873 257,848 1.17%, 08/23/04/2/ 128,936 129,035 CC USA Inc. 1.06%, 05/24/04/2/ 257,873 257,856 1.08%, 04/19/04/2/ 113,464 113,461 1.12%, 07/15/04/2/ 128,936 128,973 Dorada Finance Inc. 1.08%, 05/20/04/2/ 257,873 257,848 1.24%, 08/09/04/2/ 64,468 64,460 Five Finance Inc. 1.09%, 04/15/04/2/ 128,936 128,936 HBOS Treasury Services PLC 1.13%, 06/24/08/2/ 257,873 257,873 Holmes Financing PLC 1.08%, 04/15/04/2/ 51,575 51,575 K2 USA LLC 1.08%, 08/16/04/2/ 64,468 64,460 1.08%, 09/27/04/2/ 278,502 278,461 1.09%, 04/13/04/2/ 128,936 128,933 1.09%, 05/17/04/2/ 128,936 128,932 Links Finance LLC 1.05%, 07/20/04/2/ 103,149 103,133 1.08%, 05/04/04/2/ 128,936 128,933 1.08%, 06/28/04/2/ 128,936 128,917 1.09%, 03/29/04/2/ 128,936 128,936 Nationwide Building Society 1.08%, 07/23/04/2/ 193,404 193,404 SCHEDULES OF INVESTMENTS 27 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P 100 INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE ----------------------------------------------------------------------------- Sigma Finance Inc. 1.05%, 07/20/04/2/ $ 128,936 $ 128,916 1.07%, 10/15/03/2/ 257,873 257,872 1.07%, 07/01/04/2/ 128,936 128,912 1.24%, 08/06/04/2/ 64,468 64,463 Tango Finance Corp. 1.05%, 07/15/04/2/ 77,362 77,342 1.06%, 07/06/04/2/ 77,362 77,356 WhistleJacket Capital LLC 1.08%, 09/15/04/2/ 128,936 128,912 White Pine Finance LLC 1.08%, 05/17/04/2/ 154,724 154,724 1.08%, 07/06/04/2/ 154,724 154,712 1.08%, 08/26/04/2/ 128,936 128,918 1.09%, 04/20/04/2/ 128,936 128,936 4,491,961 COMMERCIAL PAPER - 0.61% Amsterdam Funding Corp. 1.06%, 10/16/03/2/ 122,490 122,435 Blue Ridge Asset Funding Corp. 1.05%, 10/17/03/2/ 128,936 128,876 Edison Asset Securitization 1.07%, 10/23/03/2/ 242,400 242,242 Gemini Securitization Corp. 1.05%, 10/17/03/2/ 90,255 90,213 Greenwich Funding Corp. 1.06%, 10/16/03/2/ 152,145 152,078 Jupiter Securitization Corp. 1.05%, 10/20/03/2/ 128,936 128,865 New Center Asset Trust 1.06%, 10/22/03/2/ 128,936 128,857 Park Avenue Receivables Corp. 1.05%, 10/20/03/2/ 128,936 128,865 Preferred Receivables Funding Corp. 1.06%, 10/08/03/2/ 128,936 128,910 Receivables Capital Corp. 1.05%, 10/15/03/2/ 86,666 86,630 Sydney Capital Corp. 1.07%, 10/17/03/2/ 104,438 104,389 UBS Finance (Delaware) Inc. 1.03%, 10/08/03/2/ 257,873 257,821 1.05%, 10/15/03/2/ 128,936 128,884 1.11%, 10/01/03/2/ 515,745 515,745 2,344,810 TIME DEPOSITS - 0.19% Abbey National Treasury Services PLC 1.15%, 10/01/03/2/ 128,936 128,936 Canadian Imperial Bank of Commerce 1.06%, 10/08/03/2/ 64,468 64,468 1.08%, 10/30/03/2/ 103,149 103,149 1.37%, 08/26/04/2/ 257,873 257,873 Toronto-Dominion Bank 1.33%, 08/23/04/2/ 167,617 167,542 721,968 REPURCHASE AGREEMENTS - 0.05% Lehman Brothers Inc. 1.10%, 10/01/03/2/ 206,298 206,298 206,298 TOTAL SHORT TERM INVESTMENTS (Cost: $19,392,831) 19,392,831 TOTAL INVESTMENTS IN SECURITIES - 104.93% (Cost $434,143,226) 401,484,243 Other Assets, Less Liabilities - (4.93%) (18,866,664) ------------- NET ASSETS - 100.00% $ 382,617,579 ============= /1/ Non-income earning securities. /2/ All or a portion of this security represents investments of securities lending collateral. /3/ Issuer is an affiliate of the Fund's investment advisor. See Note 2. SEE NOTES TO FINANCIAL STATEMENTS. 28 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) iSHARES S&P GLOBAL 100 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ----------------------------------------------------------------------------- COMMON STOCKS - 99.51% AUSTRALIA - 0.77% Broken Hill Proprietary Co. Ltd. 62,271 $ 445,084 News Corp. Ltd. 23,793 193,574 638,658 BELGIUM - 0.30% Fortis Group 14,487 246,483 246,483 CANADA - 0.56% Alcan Ltd. 6,348 242,875 Nortel Networks Corp./1/ 53,955 221,216 464,091 FINLAND - 1.32% Nokia OYJ ADR 70,719 1,103,216 1,103,216 FRANCE - 5.32% Alcatel SA Class A/1/ 17,655 209,097 Aventis SA 9,372 486,226 AXA AG 19,239 324,197 AXA AG Rights/1/ 19,239 896 BNP Paribas SA 11,154 546,853 Carrefour SA 8,481 426,667 France Telecom SA/1/ 10,731 246,812 L'Oreal SA 4,422 302,026 Suez SA 13,332 211,616 Total SA 9,438 1,424,437 Vivendi Universal SA/1/ 14,025 248,259 4,427,086 GERMANY - 4.11% Allianz AG 4,447 392,550 BASF AG 7,722 339,023 Bayer AG 10,593 228,834 DaimlerChrysler AG 10,428 366,018 Deutsche Bank AG 8,085 491,954 Deutsche Telekom AG/1/ 32,307 468,032 E.ON AG 6,534 318,824 Siemens AG 11,715 697,688 Volkswagen AG 2,640 118,642 3,421,565 ITALY - 0.48% Assicurazioni Generali SpA 17,622 397,711 397,711 JAPAN - 4.90% Canon Inc. 13,200 645,142 Fuji Photo Film Co. Ltd. 6,600 193,779 Hitachi Ltd. 33,000 183,145 Honda Motor Co. Ltd. 9,900 396,124 Matsushita Electric Industrial Co. Ltd. 33,000 397,306 Mitsubishi Tokyo Financial Group Inc. 33 208,253 Nissan Motor Co. Ltd. 36,300 391,545 Sony Corp. 13,200 460,816 Toshiba Corp. 33,000 138,835 Toyota Motor Corp. 36,300 1,065,783 4,080,728 NETHERLANDS - 3.74% ABN AMRO Holding NV 17,127 316,132 Aegon NV 19,734 229,583 ING Groep NV 21,054 385,675 Koninklijke Philips Electronics NV (NY Shares) 19,437 445,496 Royal Dutch Petroleum Co. (NY Shares) 28,875 1,276,275 Unilever NV (NY Shares) 7,722 456,988 3,110,149 SOUTH KOREA - 0.25% Samsung Electronics Co. Ltd. GDR 1,221 206,654 206,654 SPAIN - 2.43% Banco Bilbao Vizcaya Argentaria SA 46,629 481,114 Banco Santander Central Hispano SA 66,495 563,740 SCHEDULES OF INVESTMENTS 29 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P GLOBAL 100 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ----------------------------------------------------------------------------- Repsol YPF SA 13,662 $ 224,491 Telefonica SA 63,631 751,389 2,020,734 SWEDEN - 0.46% Telefonaktiebolaget LM Ericsson AB ADR/1/ 26,154 383,941 383,941 SWITZERLAND - 5.16% Credit Suisse Group 16,170 517,327 Nestle SA 5,280 1,217,447 Novartis AG 35,607 1,377,796 Swiss Re 4,653 295,613 UBS AG (Registered) 15,807 886,944 4,295,127 UNITED KINGDOM - 11.90% AstraZeneca PLC 24,189 1,021,569 Barclays PLC/3/ 92,697 711,126 BP PLC 310,365 2,129,595 Diageo PLC 44,220 477,169 GlaxoSmithKline PLC 82,844 1,719,086 HSBC Holdings PLC 144,969 1,911,157 Reuters Group PLC 27,423 96,702 Vodafone Group PLC 921,954 1,838,081 9,904,485 UNITED STATES - 57.81% Altria Group Inc. 28,281 1,238,709 American International Group Inc. 35,904 2,071,661 AOL Time Warner Inc./1/ 62,238 940,416 AT&T Corp. 10,935 235,649 Bristol-Myers Squibb Co. 27,456 704,521 ChevronTexaco Corp. 14,520 1,037,454 Citigroup Inc. 70,323 3,200,400 Coca-Cola Co. (The) 31,680 1,360,973 Colgate-Palmolive Co. 7,029 392,851 Dell Inc./1/ 32,901 1,098,564 Dow Chemical Co. (The) 13,035 424,159 Du Pont (E.I.) de Nemours and Co. 14,124 565,101 EMC Corp./1/ 33,858 427,627 Exxon Mobil Corp. 91,179 3,337,151 Ford Motor Company 25,740 277,220 General Electric Co. 137,940 4,111,991 General Motors Corp. 7,590 310,659 Gillette Co. (The) 13,068 417,915 Hewlett-Packard Co. 40,722 788,378 Intel Corp. 93,093 2,560,988 International Business Machines Corp. 23,793 2,101,636 Johnson & Johnson 41,118 2,036,163 JP Morgan Chase & Co. 27,786 953,893 Kimberly-Clark Corp. 6,864 352,261 Lucent Technologies Inc./1/ 59,763 129,088 McDonald's Corp. 21,219 499,495 Merck & Co. Inc. 30,987 1,568,562 Microsoft Corp. 131,208 3,646,270 Morgan Stanley 14,685 741,005 PepsiCo Inc. 23,793 1,090,433 Pfizer Inc. 109,032 3,312,392 Procter & Gamble Co. 17,655 1,638,737 Texas Instruments Inc. 27,423 625,244 3M Co. 10,692 738,496 Tyco International Ltd. 28,677 585,871 United Technologies Corp. 6,600 510,048 Wal-Mart Stores Inc. 37,224 2,078,960 48,110,941 TOTAL COMMON STOCKS (Cost: $93,624,358) 82,811,569 SHORT TERM INVESTMENTS - 11.02% MONEY MARKET FUNDS - 6.68% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares/2/,/3/ 3,745,631 3,745,631 Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares/2/,/3/ 1,321,215 1,321,215 BlackRock Temp Cash Money Market Fund/2/ 58,691 58,691 30 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P GLOBAL 100 INDEX FUND September 30, 2003 SHARES OR SECURITY PRINCIPAL VALUE ----------------------------------------------------------------------------- Short Term Investment Co. - Liquid Assets Money Market Portfolio/2/ 311,508 $ 311,508 Short Term Investment Co. - Prime Money Market Portfolio, Institutional Shares/2/ 120,110 120,110 5,557,155 FLOATING RATE NOTES - 2.51% Beta Finance Inc. 1.08%, 05/20/04/2/ $ 60,055 60,050 1.08%, 09/15/04/2/ 120,110 120,099 1.17%, 08/23/04/2/ 60,055 60,101 CC USA Inc. 1.06%, 05/24/04/2/ 120,110 120,103 1.08%, 04/19/04/2/ 52,849 52,847 1.12%, 07/15/04/2/ 60,055 60,072 Dorada Finance Inc. 1.08%, 05/20/04/2/ 120,110 120,099 1.24%, 08/09/04/2/ 30,028 30,024 Five Finance Inc. 1.09%, 04/15/04/2/ 60,055 60,055 HBOS Treasury Services PLC 1.13%, 06/24/08/2/ 120,110 120,110 Holmes Financing PLC 1.08%, 04/15/04/2/ 24,022 24,022 K2 USA LLC 1.08%, 08/16/04/2/ 30,028 30,024 1.08%, 09/27/04/2/ 129,719 129,700 1.09%, 04/13/04/2/ 60,055 60,054 1.09%, 05/17/04/2/ 60,055 60,053 Links Finance LLC 1.05%, 07/20/04/2/ 48,044 48,036 1.08%, 05/04/04/2/ 60,055 60,053 1.08%, 06/28/04/2/ 60,055 60,046 1.09%, 03/29/04/2/ 60,055 60,055 Nationwide Building Society 1.08%, 07/23/04/2/ 90,083 90,083 Sigma Finance Inc. 1.05%, 07/20/04/2/ 60,055 60,046 SECURITY PRINCIPAL VALUE ----------------------------------------------------------------------------- 1.07%, 10/15/03/2/ $ 120,110 $ 120,110 1.07%, 07/01/04/2/ 60,055 60,044 1.24%, 08/06/04/2/ 30,028 30,025 Tango Finance Corp. 1.05%, 07/15/04/2/ 36,033 36,024 1.06%, 07/06/04/2/ 36,033 36,030 WhistleJacket Capital LLC 1.08%, 09/15/04/2/ 60,055 60,044 White Pine Finance LLC 1.08%, 05/17/04/2/ 72,066 72,066 1.08%, 07/06/04/2/ 72,061 72,061 1.08%, 08/26/04/2/ 60,055 60,047 1.09%, 04/20/04/2/ 60,055 60,055 2,092,238 COMMERCIAL PAPER - 1.31% Amsterdam Funding Corp. 1.06%, 10/16/03/2/ 57,052 57,031 Blue Ridge Asset Funding Corp. 1.05%, 10/17/03/2/ 60,055 60,027 Edison Asset Securitization 1.07%, 10/23/03/2/ 112,904 112,830 Gemini Securitization Corp. 1.05%, 10/17/03/2/ 42,039 42,019 Greenwich Funding Corp. 1.06%, 10/16/03/2/ 70,865 70,834 Jupiter Securitization Corp. 1.05%, 10/20/03/2/ 60,055 60,022 New Center Asset Trust 1.06%, 10/22/03/2/ 60,055 60,018 Park Avenue Receivables Corp. 1.05%, 10/20/03/2/ 60,055 60,022 Preferred Receivables Funding Corp. 1.06%, 10/08/03/2/ 60,055 60,043 Receivables Capital Corp. 1.05%, 10/15/03/2/ 40,367 40,350 Sydney Capital Corp. 1.07%, 10/17/03/2/ 48,645 48,622 SCHEDULES OF INVESTMENTS 31 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P GLOBAL 100 INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE ----------------------------------------------------------------------------- UBS Finance (Delaware) Inc. 1.03%, 10/08/03/2/ $ 120,110 $ 120,086 1.05%, 10/15/03/2/ 60,055 60,031 1.11%, 10/01/03/2/ 240,221 240,221 1,092,156 TIME DEPOSITS - 0.40% Abbey National Treasury Services PLC 1.15%, 10/01/03/2/ 60,055 60,055 Canadian Imperial Bank of Commerce 1.06%, 10/08/03/2/ 30,028 30,028 1.08%, 10/30/03/2/ 48,044 48,044 1.37%, 08/26/04/2/ 120,110 120,110 Toronto-Dominion Bank 1.33%, 08/23/04/2/ 78,072 78,037 336,274 REPURCHASE AGREEMENTS - 0.12% Lehman Brothers Inc. 1.10%, 10/01/03/2/ 96,088 96,088 96,088 TOTAL SHORT TERM INVESTMENTS (Cost: $9,173,911) 9,173,911 TOTAL INVESTMENTS IN SECURITIES - 110.53% (Cost $102,798,269) 91,985,480 Other Assets, Less Liabilities - (10.53%) (8,766,859) ------------- NET ASSETS - 100.00% $ 83,218,621 ============= /1/ Non-income earning securities. /2/ All or a portion of this security represents investments of securities lending collateral. /3/ Issuer is an affiliate of the Fund's investment advisor. See Note 2. SEE NOTES TO FINANCIAL STATEMENTS. 32 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) iSHARES S&P GLOBAL ENERGY SECTOR INDEX FUND September 30, 2003 SECURITY SHARES VALUE ----------------------------------------------------------------------------- COMMON STOCKS - 98.68% ARGENTINA - 0.20% Petrobras Energia Participaciones SA ADR/1/ 6,756 $ 59,791 59,791 CANADA - 7.56% Canadian Natural Resources Ltd. 4,068 167,580 EnCana Corp. 21,965 795,945 Husky Energy Inc. 4,416 67,085 Imperial Oil Ltd. 6,276 236,260 Nexen Inc. 3,480 94,772 Petro-Canada 9,144 355,677 Precision Drilling Corp./1/ 696 26,325 Suncor Energy Inc. 17,652 326,106 Talisman Energy Inc. 3,936 186,963 2,256,713 CHINA - 0.70% PetroChina Co. Ltd. ADR 6,216 208,547 208,547 FRANCE - 8.48% Total SA 16,764 2,530,118 2,530,118 ITALY - 4.39% Eni SpA 85,824 1,311,296 1,311,296 JAPAN - 0.84% Nippon Oil Corp. 36,000 158,546 TonenGeneral Sekiyu K.K. 12,000 90,874 249,420 LUXEMBOURG - 0.12% Tenaris SA ADR 1,332 35,058 35,058 NETHERLANDS - 6.92% Royal Dutch Petroleum Co. 46,992 2,063,662 2,063,662 NORWAY - 1.67% Norsk Hydro ASA ADR 6,816 350,070 Statoil ASA ADR 16,464 147,847 497,917 SPAIN - 2.02% Repsol YPF SA ADR 36,528 601,616 601,616 UNITED KINGDOM - 19.62% BG Group PLC 178,224 749,136 BP PLC 555,384 3,810,813 Shell Transport & Trading Co. PLC 209,712 1,294,364 5,854,313 UNITED STATES - 46.16% Amerada Hess Corp. 4,620 231,462 Anadarko Petroleum Corp. 7,884 329,236 Apache Corp. 4,927 341,638 Ashland Inc. 1,752 57,553 Baker Hughes Inc. 10,008 296,137 BJ Services Co./1/ 3,984 136,133 Burlington Resources Inc. 7,356 354,559 ChevronTexaco Corp. 19,860 1,418,997 ConocoPhillips 22,085 1,209,154 Devon Energy Corp. 4,968 239,408 EOG Resources Inc. 4,200 175,308 Exxon Mobil Corp. 164,772 6,030,655 Halliburton Co. 11,628 281,979 Marathon Oil Corp. 12,228 348,498 Nabors Industries Ltd./1/ 3,900 145,314 Noble Corp./1/ 3,504 119,101 Occidental Petroleum Corp. 14,004 493,361 Rowan Companies Inc./1/ 2,424 59,582 Schlumberger Ltd. 16,332 790,469 Sunoco Inc. 4,680 188,230 SCHEDULES OF INVESTMENTS 33 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P GLOBAL ENERGY SECTOR INDEX FUND September 30, 2003 SHARES OR SECURITY PRINCIPAL VALUE ----------------------------------------------------------------------------- Transocean Inc./1/ 8,676 $ 173,520 Unocal Corp. 11,172 352,141 13,772,435 TOTAL COMMON STOCKS (Cost: $29,407,855) 29,440,886 PREFERRED STOCKS - 1.01% BRAZIL - 1.01% Petroleo Brasileiro SA ADR 14,100 299,625 299,625 TOTAL PREFERRED STOCKS (Cost: $239,272) 299,625 SHORT TERM INVESTMENTS - 3.77% MONEY MARKET FUNDS - 2.27% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares/2/,/3/ 450,796 450,796 Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares/2/,/3/ 164,261 164,261 BlackRock Temp Cash Money Market Fund/2/ 7,297 7,297 Short Term Investment Co. - Liquid Assets Money Market Portfolio/2/ 38,729 38,729 Short Term Investment Co. - Prime Money Market Portfolio, Institutional Shares/2/ 14,933 14,933 676,016 FLOATING RATE NOTES - 0.87% Beta Finance Inc. 1.08%, 05/20/04/2/ $ 7,466 7,466 1.08%, 09/15/04/2/ 14,933 14,931 1.17%, 08/23/04/2/ 7,466 7,472 SECURITY PRINCIPAL VALUE ----------------------------------------------------------------------------- CC USA Inc. 1.06%, 05/24/04/2/ $ 14,933 $ 14,932 1.08%, 04/19/04/2/ 6,570 6,570 1.12%, 07/15/04/2/ 7,466 7,469 Dorada Finance Inc. 1.08%, 05/20/04/2/ 14,933 14,931 1.24%, 08/09/04/2/ 3,733 3,733 Five Finance Inc. 1.09%, 04/15/04/2/ 7,466 7,466 HBOS Treasury Services PLC 1.13%, 06/24/08/2/ 14,933 14,933 Holmes Financing PLC 1.08%, 04/15/04/2/ 2,987 2,987 K2 USA LLC 1.08%, 08/16/04/2/ 3,733 3,733 1.08%, 09/27/04/2/ 16,127 16,125 1.09%, 04/13/04/2/ 7,466 7,466 1.09%, 05/17/04/2/ 7,466 7,466 Links Finance LLC 1.05%, 07/20/04/2/ 5,973 5,972 1.08%, 05/04/04/2/ 7,466 7,467 1.08%, 06/28/04/2/ 7,466 7,465 1.09%, 03/29/04/2/ 7,466 7,466 Nationwide Building Society 1.08%, 07/23/04/2/ 11,200 11,200 Sigma Finance Inc. 1.05%, 07/20/04/2/ 7,466 7,465 1.07%, 10/15/03/2/ 14,933 14,933 1.07%, 07/01/04/2/ 7,466 7,465 1.24%, 08/06/04/2/ 3,733 3,733 Tango Finance Corp. 1.05%, 07/15/04/2/ 4,480 4,479 1.06%, 07/06/04/2/ 4,480 4,480 WhistleJacket Capital LLC 1.08%, 09/15/04/2/ 7,466 7,465 White Pine Finance LLC 1.08%, 05/17/04/2/ 8,960 8,960 1.08%, 07/06/04/2/ 8,960 8,959 1.08%, 08/26/04/2/ 7,466 7,465 1.09%, 04/20/04/2/ 7,466 7,466 260,120 34 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P GLOBAL ENERGY SECTOR INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE ----------------------------------------------------------------------------- COMMERCIAL PAPER - 0.45% Amsterdam Funding Corp. 1.06%, 10/16/03/2/ $ 7,093 $ 7,090 Blue Ridge Asset Funding Corp. 1.05%, 10/17/03/2/ 7,466 7,463 Edison Asset Securitization 1.07%, 10/23/03/2/ 14,037 14,028 Gemini Securitization Corp. 1.05%, 10/17/03/2/ 5,226 5,224 Greenwich Funding Corp. 1.06%, 10/16/03/2/ 8,810 8,806 Jupiter Securitization Corp. 1.05%, 10/20/03/2/ 7,466 7,462 New Center Asset Trust 1.06%, 10/22/03/2/ 7,466 7,462 Park Avenue Receivables Corp. 1.05%, 10/20/03/2/ 7,466 7,462 Preferred Receivables Funding Corp. 1.06%, 10/08/03/2/ 7,466 7,465 Receivables Capital Corp. 1.05%, 10/15/03/2/ 5,019 5,017 Sydney Capital Corp. 1.07%, 10/17/03/2/ 6,048 6,045 UBS Finance (Delaware) Inc. 1.03%, 10/08/03/2/ 14,933 14,930 1.05%, 10/15/03/2/ 7,466 7,463 1.11%, 10/01/03/2/ 29,866 29,866 135,783 TIME DEPOSITS - 0.14% Abbey National Treasury Services PLC 1.15%, 10/01/03/2/ 7,466 7,466 Canadian Imperial Bank of Commerce 1.06%, 10/08/03/2/ 3,733 3,733 1.08%, 10/30/03/2/ 5,973 5,973 1.37%, 08/26/04/2/ 14,933 14,933 Toronto-Dominion Bank 1.33%, 08/23/04/2/ 9,706 9,702 41,807 REPURCHASE AGREEMENTS - 0.04% Lehman Brothers Inc. 1.10%, 10/01/03/2/ 11,946 11,946 11,946 TOTAL SHORT TERM INVESTMENTS (Cost: $1,125,672) 1,125,672 TOTAL INVESTMENTS IN SECURITIES - 103.46% (Cost $30,772,799) 30,866,183 Other Assets, Less Liabilities - (3.46%) (1,030,837) ------------- NET ASSETS - 100.00% $ 29,835,346 ============= /1/ Non-income earning securities. /2/ All or a portion of this security represents investments of securities lending collateral. /3/ Issuer is an affiliate of the Fund's investment advisor. See Note 2. SEE NOTES TO FINANCIAL STATEMENTS. SCHEDULES OF INVESTMENTS 35 SCHEDULE OF INVESTMENTS (Unaudited) iSHARES S&P GLOBAL FINANCIALS SECTOR INDEX FUND September 30, 2003 SECURITY SHARES VALUE ----------------------------------------------------------------------------- COMMON STOCKS - 99.53% AUSTRALIA - 3.86% Australia and New Zealand Banking Group Ltd. 8,472 $ 102,930 AXA Asia Pacific Holdings Ltd. 6,242 10,942 Commonwealth Bank of Australia 7,488 140,391 General Property Trust 9,107 16,951 Insurance Australia Group Ltd. 8,607 24,176 Lend Lease Corp. Ltd. 2,704 18,851 Macquarie Bank Ltd. 1,059 24,729 Mirvac Group 3,161 8,986 National Australia Bank Ltd. 8,824 183,954 QBE Insurance Group Ltd. 3,300 22,247 St. George Bank Ltd. 2,112 29,291 Stockland Trust Group 2,755 8,578 Suncorp-Metway Ltd. 2,638 21,301 Westfield America Trust 15,824 19,921 Westfield Holdings Ltd. 2,256 21,683 Westfield Trust 9,867 21,839 Westpac Banking Corp. Ltd. 10,648 116,755 793,525 BELGIUM - 1.12% Algemene Maatschappij voor Nijverheidskredit NV 536 21,772 Dexia Group 4,336 63,220 Fortis Group 6,200 105,487 Groupe Bruxelles Lambert SA 352 16,868 KBC Bankverzekeringsholding NV 616 23,458 230,805 BRAZIL - 0.23% Banco Bradesco SA ADR 829 16,721 Banco Itau Holding Financiera SA ADR 558 20,200 Unibanco - Uniao de Bancos Brasileiros SA GDR 560 11,088 48,009 CANADA - 3.78% Bank of Montreal 2,704 93,556 Bank of Nova Scotia 2,920 136,539 Brascan Corp. Class A 704 17,811 Canadian Imperial Bank of Commerce 2,152 88,204 Manulife Financial Corp. 2,536 73,348 National Bank of Canada 920 24,836 Royal Bank of Canada 3,704 163,180 Sun Life Financial Inc. 3,416 74,043 Toronto-Dominion Bank 3,712 105,189 776,706 CHILE - 0.11% Banco de Chile ADR 501 11,272 Banco Santander Chile SA ADR 482 11,086 22,358 DENMARK - 0.29% Danske Bank A/S 3,072 58,538 58,538 FRANCE - 2.92% Assurances Generales de France 448 20,999 AXA AG 8,048 135,617 AXA AG Rights/1/ 8,048 375 BNP Paribas SA 4,744 232,587 Credit Agricole SA 3,832 74,659 Societe Generale Class A 2,064 137,488 601,725 GERMANY - 2.10% Allianz AG 1,725 152,271 Bayerische Hypo-Und Vereinsbank AG/1/ 2,480 42,657 Commerzbank AG 2,120 30,910 Deutsche Bank AG 3,288 200,067 MLP AG/1/ 368 5,614 431,519 GREECE - 0.12% National Bank of Greece SA ADR 6,521 25,367 25,367 HONG KONG - 1.22% BOC Hong Kong Holdings Ltd. 12,000 17,356 Cheung Kong (Holdings) Ltd. 8,000 63,276 Hang Seng Bank Ltd. 4,800 58,886 36 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P GLOBAL FINANCIALS SECTOR INDEX FUND September 30, 2003 SECURITY SHARES VALUE ----------------------------------------------------------------------------- Sun Hung Kai Properties Ltd. 8,000 $ 64,826 Swire Pacific Ltd. Class A 8,000 47,212 251,556 IRELAND - 0.70% Allied Irish Banks PLC 5,168 75,832 Bank of Ireland 5,661 67,639 143,471 ITALY - 3.06% Alleanza Assicurazioni SpA 2,936 28,276 Assicurazioni Generali SpA 6,464 145,886 Banca Fideuram SpA 2,448 14,254 Banca Intesa SpA 26,986 81,709 Banca Monte dei Paschi di Siena SpA 6,120 16,820 Banca Nazionale del Lavoro SpA/1/ 13,736 27,114 Banca Popolare di Verona e Novara SCRL 1,712 24,084 Capitalia SpA/1/ 13,072 31,359 FinecoGroup SpA/1/ 9,928 6,417 Mediobanca SpA 3,352 32,439 Mediolanum SpA 1,608 10,337 Riunione Adriatica di Sicurta SpA 1,544 23,555 Sanpaolo IMI SpA 6,384 63,639 Unicredito Italiano SpA 26,144 123,611 629,500 JAPAN - 5.03% Acom Co. Ltd. 400 17,938 Credit Saison Co. Ltd. 800 16,685 Daiwa Securities Group Inc. 8,000 54,066 Millea Holdings Inc. 8 90,230 Mitsubishi Estate Co. Ltd. 8,000 75,549 Mitsubishi Tokyo Financial Group Inc. 16 100,971 Mitsui Fudosan Co. Ltd. 8,000 70,895 Mitsui Sumitomo Insurance Co. Ltd. 8,000 58,148 Mizuho Financial Group Inc./1/ 24 53,708 Nikko Cordial Corp. 8,000 42,537 Nomura Holdings Inc. 8,000 128,899 ORIX Corp. 800 62,516 Promise Co. Ltd. 400 17,545 Sompo Japan Insurance Inc. 8,000 57,862 Sumitomo Mitsui Financial Group Inc. 16 64,450 Sumitomo Trust & Banking Co. Ltd. (The) 8,000 38,956 Takefuji Corp. 320 20,481 UFJ Holdings Inc./1/ 16 62,874 1,034,310 NETHERLANDS - 2.00% ABN AMRO Holding NV 7,944 146,631 Aegon NV 7,471 86,917 ING Groep NV 9,672 177,175 410,723 SINGAPORE - 0.84% DBS Group Holdings Ltd. 8,000 59,703 Oversea-Chinese Banking Corp. Ltd. (Ordinary) 8,000 51,835 United Overseas Bank Ltd. 8,000 62,017 173,555 SOUTH KOREA - 0.27% Kookmin Bank ADR 1,680 55,272 55,272 SPAIN - 2.43% Banco Bilbao Vizcaya Argentaria SA 18,664 192,574 Banco Popular Espanol SA 1,160 57,372 Banco Santander Central Hispano SA 27,440 232,634 Bankinter SA 512 18,323 500,903 SWEDEN - 1.08% ForeningsSparbanken AB 2,000 29,604 Nordea AB 13,608 77,580 Skandia Forsakrings AB 7,520 23,721 Skandinaviska Enskilda Banken AB Class A 3,160 34,519 Svenska Handelsbanken AB Class A 3,392 57,663 223,087 SWITZERLAND - 4.03% Baloise Holding (Registered) 656 24,415 SCHEDULES OF INVESTMENTS 37 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P GLOBAL FINANCIALS SECTOR INDEX FUND September 30, 2003 SECURITY SHARES VALUE ----------------------------------------------------------------------------- Credit Suisse Group 6,552 $ 209,618 Swiss Life Holding/1/ 112 15,266 Swiss Re 1,896 120,456 UBS AG (Registered) 6,424 360,456 Zurich Financial Services AG/1/ 800 99,955 830,166 UNITED KINGDOM - 12.56% Abbey National PLC 8,552 70,189 Alliance & Leicester PLC 2,568 35,860 AMVESCAP PLC 3,792 28,697 Aviva PLC 12,800 99,312 Barclays PLC/3/ 37,008 283,907 British Land Co. PLC 3,104 25,450 Hammerson PLC 1,672 15,139 HBOS PLC 21,000 240,039 HSBC Holdings PLC 59,660 786,510 Land Securities Group PLC 2,531 35,427 Legal & General Group PLC 36,912 56,573 Lloyds TSB Group PLC 31,624 217,385 Northern Rock PLC 2,504 27,811 Old Mutual PLC 20,008 30,831 Provident Financial PLC 760 8,144 Prudential Corp. PLC 11,440 78,069 Royal & Sun Alliance Insurance Group PLC 9,776 13,115 Royal & Sun Alliance Insurance Group PLC Rights/1/ 9,776 1,990 Royal Bank of Scotland Group PLC 15,224 386,985 Schroders PLC 920 10,256 Slough Estates PLC 2,416 14,591 Standard Chartered PLC 5,856 81,774 3i Group PLC 3,792 37,501 2,585,555 UNITED STATES - 51.78% ACE Ltd. 1,512 50,017 AFLAC Inc. 2,800 90,440 Allstate Corp. (The) 3,920 143,198 Ambac Financial Group Inc. 616 39,424 American Express Co. 7,216 325,153 American International Group Inc. 14,536 838,727 AmSouth Bancorp 2,120 44,986 AON Corp. 1,832 38,197 Apartment Investment & Management Co. Class A 400 15,744 Bank of America Corp. 8,272 645,547 Bank of New York Co. Inc. (The) 4,240 123,426 Bank One Corp. 6,304 243,650 BB&T Corp. 2,928 105,144 Bear Stearns Companies Inc. (The) 552 41,290 Capital One Financial Corp. 1,232 70,273 Charter One Financial Inc. 1,344 41,126 Chubb Corp. 992 64,361 Cincinnati Financial Corp. 944 37,722 Citigroup Inc. 28,616 1,302,314 Comerica Inc. 1,032 48,091 Countrywide Financial Corp. 696 54,483 Equity Office Properties Trust 2,416 66,512 Equity Residential 1,600 46,848 Fannie Mae 5,432 381,326 Federated Investors Inc. Class B 624 17,285 Fifth Third Bancorp 3,288 182,385 First Tennessee National Corp. 800 33,968 FleetBoston Financial Corp. 5,712 172,217 Franklin Resources Inc. 1,504 66,492 Freddie Mac 3,952 206,887 Golden West Financial Corp. 848 75,904 Goldman Sachs Group Inc. (The) 2,632 220,825 Hancock (John) Financial Services Inc. 1,720 58,136 Hartford Financial Services Group Inc. 1,640 86,313 Huntington Bancshares Inc. 1,240 24,540 Janus Capital Group Inc. 1,296 18,105 Jefferson-Pilot Corp. 832 36,924 JP Morgan Chase & Co. 11,320 388,616 KeyCorp 2,312 59,118 Lehman Brothers Holdings Inc. 1,320 91,186 Lincoln National Corp. 1,104 39,060 Loews Corp. 1,104 44,568 Marsh & McLennan Companies Inc. 3,000 142,830 Marshall & Ilsley Corp. 1,112 35,050 MBIA Inc. 872 47,934 MBNA Corp. 7,272 165,802 Mellon Financial Corp. 2,448 73,783 Merrill Lynch & Co. Inc. 5,200 278,356 38 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P GLOBAL FINANCIALS SECTOR INDEX FUND September 30, 2003 SECURITY SHARES VALUE ----------------------------------------------------------------------------- MetLife Inc. 4,184 $ 117,361 MGIC Investment Corp. 632 32,908 Moody's Corp. 752 41,337 Morgan Stanley 6,064 305,989 National City Corp. 3,496 102,992 North Fork Bancorp Inc. 848 29,468 Northern Trust Corp. 1,336 56,700 Plum Creek Timber Co. Inc. 1,056 26,865 PNC Financial Services Group 1,680 79,934 Principal Financial Group Inc. 1,752 54,294 Progressive Corp. (The) 1,144 79,062 ProLogis 976 29,524 Providian Financial Corp./1/ 1,368 16,129 Prudential Financial Inc. 2,936 109,689 Regions Financial Corp. 1,200 41,100 SAFECO Corp. 752 26,516 Schwab (Charles) Corp. (The) 7,456 88,801 Simon Property Group Inc. 864 37,653 SLM Corp. 2,544 99,114 SouthTrust Corp. 2,032 59,720 St. Paul Companies Inc. 1,264 46,806 State Street Corp. 1,872 84,240 SunTrust Banks Inc. 1,664 100,456 Synovus Financial Corp. 1,744 43,583 T. Rowe Price Group Inc. 488 20,135 Torchmark Corp. 592 24,059 Travelers Property Casualty Corp. Class B 5,683 90,246 U.S. Bancorp 10,688 256,405 Union Planters Corp. 1,042 32,969 UNUMProvident Corp. 1,536 22,687 Wachovia Corp. 7,496 308,760 Washington Mutual Inc. 5,040 198,425 Wells Fargo & Company 9,320 479,980 XL Capital Ltd. Class A 744 57,615 Zions Bancorporation 560 31,276 10,657,081 TOTAL COMMON STOCKS (Cost: $18,660,901) 20,483,731 SHARES OR SECURITY PRINCIPAL VALUE ----------------------------------------------------------------------------- SHORT TERM INVESTMENTS - 5.85% MONEY MARKET FUNDS - 3.54% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares/2/,/3/ 491,601 $ 491,602 Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares/2/,/3/ 173,463 173,463 BlackRock Temp Cash Money Market Fund/2/ 7,706 7,706 Short Term Investment Co. - Liquid Assets Money Market Portfolio/2/ 40,898 40,898 Short Term Investment Co. - Prime Money Market Portfolio, Institutional Shares/2/ 15,769 15,769 729,438 FLOATING RATE NOTES - 1.34% Beta Finance Inc. 1.08%, 05/20/04/2/ $ 7,885 7,884 1.08%, 09/15/04/2/ 15,769 15,768 1.17%, 08/23/04/2/ 7,885 7,891 CC USA Inc. 1.06%, 05/24/04/2/ 15,769 15,768 1.08%, 04/19/04/2/ 6,939 6,938 1.12%, 07/15/04/2/ 7,885 7,887 Dorada Finance Inc. 1.08%, 05/20/04/2/ 15,769 15,768 1.24%, 08/09/04/2/ 3,942 3,942 Five Finance Inc. 1.09%, 04/15/04/2/ 7,885 7,885 HBOS Treasury Services PLC 1.13%, 06/24/08/2/ 15,769 15,769 Holmes Financing PLC 1.08%, 04/15/04/2/ 3,154 3,154 K2 USA LLC 1.08%, 08/16/04/2/ 3,942 3,942 1.08%, 09/27/04/2/ 17,031 17,028 1.09%, 04/13/04/2/ 7,885 7,884 1.09%, 05/17/04/2/ 7,885 7,884 SCHEDULES OF INVESTMENTS 39 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P GLOBAL FINANCIALS SECTOR INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE ----------------------------------------------------------------------------- Links Finance LLC 1.05%, 07/20/04/2/ $ 6,308 $ 6,307 1.08%, 05/04/04/2/ 7,885 7,884 1.08%, 06/28/04/2/ 7,885 7,884 1.09%, 03/29/04/2/ 7,885 7,885 Nationwide Building Society 1.08%, 07/23/04/2/ 11,827 11,827 Sigma Finance Inc. 1.05%, 07/20/04/2/ 7,885 7,883 1.07%, 10/15/03/2/ 15,769 15,769 1.07%, 07/01/04/2/ 7,885 7,883 1.24%, 08/06/04/2/ 3,942 3,942 Tango Finance Corp. 1.05%, 07/15/04/2/ 4,731 4,730 1.06%, 07/06/04/2/ 4,731 4,730 WhistleJacket Capital LLC 1.08%, 09/15/04/2/ 7,885 7,883 White Pine Finance LLC 1.08%, 05/17/04/2/ 9,462 9,462 1.08%, 07/06/04/2/ 9,462 9,461 1.08%, 08/26/04/2/ 7,885 7,884 1.09%, 04/20/04/2/ 7,885 7,885 274,691 COMMERCIAL PAPER - 0.70% Amsterdam Funding Corp. 1.06%, 10/16/03/2/ 7,490 7,488 Blue Ridge Asset Funding Corp. 1.05%, 10/17/03/2/ 7,885 7,881 Edison Asset Securitization 1.07%, 10/23/03/2/ 14,823 14,814 Gemini Securitization Corp. 1.05%, 10/17/03/2/ 5,519 5,517 Greenwich Funding Corp. 1.06%, 10/16/03/2/ 9,304 9,300 Jupiter Securitization Corp. 1.05%, 10/20/03/2/ 7,885 7,880 New Center Asset Trust 1.06%, 10/22/03/2/ 7,885 7,880 Park Avenue Receivables Corp. 1.05%, 10/20/03/2/ 7,885 7,880 Preferred Receivables Funding Corp. 1.06%, 10/08/03/2/ 7,885 7,883 Receivables Capital Corp. 1.05%, 10/15/03/2/ 5,300 5,298 Sydney Capital Corp. 1.07%, 10/17/03/2/ 6,387 6,384 UBS Finance (Delaware) Inc. 1.03%, 10/08/03/2/ 15,769 15,766 1.05%, 10/15/03/2/ 7,885 7,881 1.11%, 10/01/03/2/ 31,539 31,539 143,391 TIME DEPOSITS - 0.21% Abbey National Treasury Services PLC 1.15%, 10/01/03/2/ 7,885 7,885 Canadian Imperial Bank of Commerce 1.06%, 10/08/03/2/ 3,942 3,942 1.08%, 10/30/03/2/ 6,308 6,308 1.37%, 08/26/04/2/ 15,769 15,769 Toronto-Dominion Bank 1.33%, 08/23/04/2/ 10,250 10,245 44,149 REPURCHASE AGREEMENTS - 0.06% Lehman Brothers Inc. 1.10%, 10/01/03/2/ 12,615 12,615 12,615 TOTAL SHORT TERM INVESTMENTS (Cost: $1,204,284) 1,204,284 TOTAL INVESTMENTS IN SECURITIES - 105.38% (Cost $19,865,185) 21,688,015 Other Assets, Less Liabilities - (5.38%) (1,107,770) ------------- NET ASSETS - 100.00% $ 20,580,245 ============= /1/ Non-income earning securities. /2/ All or a portion of this security represents investments of securities lending collateral. /3/ Issuer is an affiliate of the Fund's investment advisor. See Note 2. SEE NOTES TO FINANCIAL STATEMENTS. 40 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) iSHARES S&P GLOBAL HEALTHCARE SECTOR INDEX FUND September 30, 2003 SECURITY SHARES VALUE ----------------------------------------------------------------------------- COMMON STOCKS - 99.78% AUSTRALIA - 0.22% CSL Ltd. 2,496 $ 27,115 Mayne Group Ltd. 21,946 48,870 75,985 CANADA - 0.44% Biovail Corp./1/ 3,072 114,393 MDS Inc. 2,784 37,733 152,126 DENMARK - 0.51% Novo Nordisk A/S Class B 4,720 173,959 173,959 FRANCE - 3.41% Aventis SA 13,376 693,956 Essilor International SA 1,648 71,278 Sanofi-Synthelabo SA 6,688 406,560 1,171,794 GERMANY - 0.85% Altana AG 1,456 92,901 Fresenius Medical Care AG 736 42,418 Schering AG 3,552 154,622 289,941 IRELAND - 0.10% Elan Corp. PLC/1/ 6,784 34,996 34,996 JAPAN - 3.60% Daiichi Pharmaceutical Co. Ltd. 4,800 77,769 Eisai Co. Ltd. 4,800 112,143 Fujisawa Pharmaceutical Co. Ltd. 4,800 109,135 Sankyo Co. Ltd. 8,000 116,654 Takeda Chemical Industries Ltd. 16,000 582,912 Terumo Corp. 3,200 61,729 Yamanouchi Pharmaceutical Co. Ltd. 6,400 176,449 1,236,791 SWITZERLAND - 8.76% Novartis AG 47,760 1,848,051 Roche Holding AG (Bearer) 480 59,064 Roche Holding AG (Genusschein) 13,296 1,102,463 3,009,578 UNITED KINGDOM - 11.53% Amersham PLC 14,944 128,609 AstraZeneca PLC 32,944 1,391,317 GlaxoSmithKline PLC 114,176 2,369,253 Shire Pharmaceuticals Group PLC/1/ 9,616 69,656 3,958,835 UNITED STATES - 70.36% Abbott Laboratories 29,552 1,257,438 Aetna Inc. 2,848 173,814 Allergan Inc. 2,496 196,510 AmerisourceBergen Corp. 2,048 110,694 Amgen Inc./1/ 24,596 1,588,164 Anthem Inc./1/ 2,848 203,148 Applera Corp. - Applied Biosystems Group 4,000 89,240 Bard (C.R.) Inc. 992 70,432 Bausch & Lomb Inc. 1,024 45,210 Baxter International Inc. 11,456 332,911 Becton, Dickinson & Co. 4,912 177,422 Biogen Inc./1/ 2,816 107,656 Biomet Inc. 5,120 172,083 Boston Scientific Corp./1/ 7,904 504,275 Bristol-Myers Squibb Co. 36,944 947,983 Cardinal Health Inc. 8,448 493,279 Chiron Corp./1/ 3,600 186,084 CIGNA Corp. 3,152 140,737 Express Scripts Inc./1/ 1,200 73,380 Forest Laboratories Inc./1/ 7,232 372,086 Genzyme Corp. - General Division/1/ 4,112 190,180 Guidant Corp. 5,792 271,355 HCA Inc. 10,000 368,600 Health Management Associates Inc. Class A 4,560 99,454 Humana Inc./1/ 2,720 49,096 SCHEDULES OF INVESTMENTS 41 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P GLOBAL HEALTHCARE SECTOR INDEX FUND September 30, 2003 SECURITY SHARES VALUE ----------------------------------------------------------------------------- IMS Health Inc. 4,768 $ 100,605 Johnson & Johnson 56,512 2,798,474 King Pharmaceuticals Inc./1/ 5,008 75,871 Lilly (Eli) & Co. 21,680 1,287,792 Manor Care Inc. 1,984 59,520 McKesson Corp. 5,408 180,032 Medco Health Solutions Inc./1/ 5,181 134,343 MedImmune Inc./1/ 4,800 158,448 Medtronic Inc. 23,376 1,096,802 Merck & Co. Inc. 42,976 2,175,445 Millipore Corp./1/ 1,024 47,165 Monsanto Co. 7 168 Pfizer Inc. 148,592 4,514,225 Quest Diagnostics Inc./1/ 2,024 122,735 Schering-Plough Corp. 28,016 426,964 St. Jude Medical Inc./1/ 3,264 175,505 Stryker Corp. 3,728 280,756 UnitedHealth Group Inc. 11,568 582,102 Watson Pharmaceuticals Inc./1/ 2,096 87,382 WellPoint Health Networks Inc./1/ 3,024 233,090 Wyeth 25,200 1,161,720 Zimmer Holdings Inc./1/ 4,480 246,848 24,167,223 TOTAL COMMON STOCKS (Cost: $35,708,150) 34,271,228 SHORT TERM INVESTMENTS - 4.46% MONEY MARKET FUNDS - 2.70% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares/2/,/3/ 626,641 626,641 Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares/2/,/3/ 220,288 220,288 BlackRock Temp Cash Money Market Fund/2/ 9,786 9,786 SHARES OR SECURITY PRINCIPAL VALUE ----------------------------------------------------------------------------- Short Term Investment Co. - Liquid Assets Money Market Portfolio/2/ 51,938 $ 51,938 Short Term Investment Co. - Prime Money Market Portfolio, Institutional Shares/2/ 20,026 20,026 928,679 FLOATING RATE NOTES - 1.02% Beta Finance Inc. 1.08%, 05/20/04/2/ $ 10,013 10,012 1.08%, 09/15/04/2/ 20,026 20,024 1.17%, 08/23/04/2/ 10,013 10,021 CC USA Inc. 1.06%, 05/24/04/2/ 20,026 20,025 1.08%, 04/19/04/2/ 8,812 8,811 1.12%, 07/15/04/2/ 10,013 10,016 Dorada Finance Inc. 1.08%, 05/20/04/2/ 20,026 20,024 1.24%, 08/09/04/2/ 5,007 5,006 Five Finance Inc. 1.09%, 04/15/04/2/ 10,013 10,013 HBOS Treasury Services PLC 1.13%, 06/24/08/2/ 20,026 20,026 Holmes Financing PLC 1.08%, 04/15/04/2/ 4,005 4,005 K2 USA LLC 1.08%, 08/16/04/2/ 5,007 5,006 1.08%, 09/27/04/2/ 21,628 21,625 1.09%, 04/13/04/2/ 10,013 10,013 1.09%, 05/17/04/2/ 10,013 10,013 Links Finance LLC 1.05%, 07/20/04/2/ 8,010 8,009 1.08%, 05/04/04/2/ 10,013 10,013 1.08%, 06/28/04/2/ 10,013 10,012 1.09%, 03/29/04/2/ 10,013 10,013 Nationwide Building Society 1.08%, 07/23/04/2/ 15,020 15,020 Sigma Finance Inc. 1.05%, 07/20/04/2/ 10,013 10,011 1.07%, 10/15/03/2/ 20,026 20,026 1.07%, 07/01/04/2/ 10,013 10,011 1.24%, 08/06/04/2/ 5,007 5,006 42 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P GLOBAL HEALTHCARE SECTOR INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE ----------------------------------------------------------------------------- Tango Finance Corp. 1.05%, 07/15/04/2/ $ 6,008 $ 6,006 1.06%, 07/06/04/2/ 6,008 6,007 WhistleJacket Capital LLC 1.08%, 09/15/04/2/ 10,013 10,011 White Pine Finance LLC 1.08%, 05/17/04/2/ 12,016 12,016 1.08%, 07/06/04/2/ 12,016 12,015 1.08%, 08/26/04/2/ 10,013 10,013 1.09%, 04/20/04/2/ 10,013 10,012 348,841 COMMERCIAL PAPER - 0.53% Amsterdam Funding Corp. 1.06%, 10/16/03/2/ 9,512 9,510 Blue Ridge Asset Funding Corp. 1.05%, 10/17/03/2/ 10,013 10,008 Edison Asset Securitization 1.07%, 10/23/03/2/ 18,825 18,812 Gemini Securitization Corp. 1.05%, 10/17/03/2/ 7,009 7,006 Greenwich Funding Corp. 1.06%, 10/16/03/2/ 11,815 11,810 Jupiter Securitization Corp. 1.05%, 10/20/03/2/ 10,013 10,008 New Center Asset Trust 1.06%, 10/22/03/2/ 10,013 10,007 Park Avenue Receivables Corp. 1.05%, 10/20/03/2/ 10,013 10,008 Preferred Receivables Funding Corp. 1.06%, 10/08/03/2/ 10,013 10,011 Receivables Capital Corp. 1.05%, 10/15/03/2/ 6,730 6,728 Sydney Capital Corp. 1.07%, 10/17/03/2/ 8,111 8,107 UBS Finance (Delaware) Inc. 1.03%, 10/08/03/2/ 20,026 20,022 1.05%, 10/15/03/2/ 10,013 10,009 1.11%, 10/01/03/2/ 40,052 40,052 182,098 TIME DEPOSITS - 0.16% Abbey National Treasury Services PLC 1.15%, 10/01/03/2/ 10,013 10,013 Canadian Imperial Bank of Commerce 1.06%, 10/08/03/2/ 5,007 5,007 1.08%, 10/30/03/2/ 8,010 8,010 1.37%, 08/26/04/2/ 20,026 20,026 Toronto-Dominion Bank 1.33%, 08/23/04/2/ 13,017 13,011 56,067 REPURCHASE AGREEMENTS - 0.05% Lehman Brothers Inc. 1.10%, 10/01/03/2/ 16,021 16,021 16,021 TOTAL SHORT TERM INVESTMENTS (Cost: $1,531,706) 1,531,706 TOTAL INVESTMENTS IN SECURITIES - 104.24% (Cost $37,239,856) 35,802,934 OTHER ASSETS, LESS LIABILITIES - (4.24%) (1,454,666) ------------- NET ASSETS - 100.00% $ 34,348,268 ============= /1/ Non-income earning securities. /2/ All or a portion of this security represents investments of securities lending collateral. /3/ Issuer is an affiliate of the Fund's investment advisor. See Note 2. SEE NOTES TO FINANCIAL STATEMENTS. SCHEDULES OF INVESTMENTS 43 SCHEDULE OF INVESTMENTS (Unaudited) iSHARES S&P GLOBAL TECHNOLOGY SECTOR INDEX FUND September 30, 2003 SECURITY SHARES VALUE ----------------------------------------------------------------------------- COMMON STOCKS - 99.94% CANADA - 1.24% ATI Technologies Inc./1/ 1,674 $ 24,984 Celestica Inc./1/ 1,320 20,835 Cognos Inc./1/ 540 16,835 Nortel Networks Corp./1/ 25,410 104,506 167,160 FINLAND - 3.47% Nokia OYJ 30,414 468,234 468,234 FRANCE - 1.73% Alcatel SA Class A/1/ 7,524 89,110 Cap Gemini SA/1/ 708 29,352 Dassault Systemes SA 246 8,623 Sagem SA 132 12,367 STMicroelectronics NV 3,900 94,241 233,693 GERMANY - 1.54% Epcos AG/1/ 378 6,334 Infineon Technologies AG/1/ 2,544 33,241 SAP AG 1,380 168,550 208,125 JAPAN - 9.80% Advantest Corp. 600 39,798 Canon Inc. 6,000 293,246 Fujitsu Ltd. 12,000 62,731 Hitachi Ltd. 18,000 99,897 Hoya Corp. 600 46,458 Kyocera Corp. 1,200 70,895 Murata Manufacturing Co. Ltd. 1,800 92,808 NEC Corp./1/ 12,000 90,230 Nintendo Co. Ltd. 600 50,271 NTT Data Corp. 12 50,378 Ricoh Co. Ltd. 6,000 106,879 Rohm Co. Ltd. 600 77,877 Softbank Corp. 1,200 50,700 TDK Corp. 600 35,608 Tokyo Electron Ltd. 1,200 79,703 Toshiba Corp. 18,000 75,728 1,323,207 NETHERLANDS - 0.29% ASML Holding NV/1/ 3,042 39,854 39,854 SOUTH KOREA - 2.08% Samsung Electronics Co. Ltd. GDR 1,657 280,447 280,447 SWEDEN - 1.07% Telefonaktiebolaget LM Ericsson AB Class B/1/ 99,366 145,155 145,155 TAIWAN - 1.46% Taiwan Semiconductor Manufacturing Co. Ltd. ADR/1/ 12,940 140,140 United Microelectronics Corp. ADR/1/ 12,720 57,367 197,507 UNITED KINGDOM - 0.60% ARM Holdings PLC/1/ 6,312 10,277 Dimension Data Holdings PLC/1/ 8,412 3,634 LogicaCMG PLC 5,502 21,847 Misys PLC 4,002 18,783 Sage Group PLC 7,872 21,482 Spirent PLC 5,892 5,090 81,113 UNITED STATES - 76.66% ADC Telecommunications Inc./1/ 5,436 12,666 Adobe Systems Inc. 1,446 56,770 Advanced Micro Devices Inc./1/ 2,430 26,997 Agilent Technologies Inc./1/ 3,054 67,524 Altera Corp./1/ 2,232 42,185 Analog Devices Inc./1/ 2,280 86,686 Andrew Corp./1/ 588 7,227 Apple Computer Inc./1/ 2,490 51,369 44 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P GLOBAL TECHNOLOGY SECTOR INDEX FUND September 30, 2003 SECURITY SHARES VALUE ----------------------------------------------------------------------------- Applied Materials Inc./1/ 10,512 $ 190,688 Applied Micro Circuits Corp./1/ 2,136 10,402 Autodesk Inc. 756 12,867 Automatic Data Processing Inc. 3,600 129,060 Avaya Inc./1/ 2,298 25,048 BMC Software Inc./1/ 1,704 23,737 Broadcom Corp. Class A/1/ 1,818 48,395 CIENA Corp./1/ 2,784 16,453 Cisco Systems Inc./1/ 45,348 886,100 Citrix Systems Inc./1/ 996 21,992 Computer Associates International Inc. 3,654 95,406 Computer Sciences Corp./1/ 1,164 43,731 Compuware Corp./1/ 2,574 13,797 Comverse Technology Inc./1/ 1,290 19,298 Concord EFS Inc./1/ 3,300 45,111 Convergys Corp./1/ 900 16,506 Corning Inc./1/ 8,094 76,245 Dell Inc./1/ 16,494 550,735 Electronic Arts Inc./1/ 894 82,454 Electronic Data Systems Corp. 3,264 65,933 EMC Corp./1/ 14,022 177,098 First Data Corp. 4,632 185,095 Fiserv Inc./1/ 1,104 39,998 Gateway Inc./1/ 2,436 13,788 Hewlett-Packard Co. 19,584 379,146 Intel Corp. 42,264 1,162,683 International Business Machines Corp. 11,070 977,813 Intuit Inc./1/ 1,254 60,493 Jabil Circuit Inc./1/ 1,344 35,011 JDS Uniphase Corp./1/ 9,198 33,113 KLA-Tencor Corp./1/ 1,302 66,923 Lexmark International Inc./1/ 798 50,282 Linear Technology Corp. 1,986 71,119 LSI Logic Corp./1/ 2,484 22,331 Lucent Technologies Inc./1/ 25,824 55,780 Maxim Integrated Products Inc. 2,052 81,054 Mercury Interactive Corp./1/ 570 25,884 Micron Technology Inc./1/ 4,176 56,042 Microsoft Corp. 69,066 1,919,344 Molex Inc. 1,230 35,166 Motorola Inc. 14,550 174,163 National Semiconductor Corp./1/ 1,224 39,523 NCR Corp./1/ 654 20,725 Network Appliance Inc./1/ 2,298 47,178 Novell Inc./1/ 2,490 13,272 Novellus Systems Inc./1/ 1,002 33,817 NVIDIA Corp./1/ 942 14,988 Oracle Corp./1/ 33,582 376,790 Parametric Technology Corp./1/ 1,848 5,766 Paychex Inc. 2,202 74,714 PeopleSoft Inc./1/ 2,400 43,656 PerkinElmer Inc. 714 10,931 PMC-Sierra Inc./1/ 1,170 15,433 QLogic Corp./1/ 648 30,462 QUALCOMM Inc. 5,028 209,366 Sabre Holdings Corp. 750 16,118 Sanmina-SCI Corp./1/ 3,456 33,523 Scientific-Atlanta Inc. 1,146 35,698 Siebel Systems Inc./1/ 3,156 30,676 Solectron Corp./1/ 5,580 32,643 Sun Microsystems Inc./1/ 20,508 67,881 SunGard Data Systems Inc./1/ 1,812 47,674 Symantec Corp./1/ 990 62,390 Symbol Technologies Inc. 1,602 19,144 Tektronix Inc./1/ 666 16,484 Tellabs Inc./1/ 2,850 19,352 Teradyne Inc./1/ 1,230 22,878 Texas Instruments Inc. 11,034 251,575 Thermo Electron Corp./1/ 1,278 27,733 Unisys Corp./1/ 2,214 29,955 Veritas Software Corp./1/ 2,766 86,852 Waters Corp./1/ 894 24,522 Xerox Corp./1/ 4,968 50,972 Xilinx Inc./1/ 2,040 58,160 Yahoo! Inc./1/ 3,828 135,435 10,353,994 TOTAL COMMON STOCKS (Cost: $14,537,355) 13,498,489 SCHEDULES OF INVESTMENTS 45 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P GLOBAL TECHNOLOGY SECTOR INDEX FUND September 30, 2003 SHARES OR SECURITY PRINCIPAL VALUE ----------------------------------------------------------------------------- SHORT TERM INVESTMENTS - 3.17% MONEY MARKET FUNDS - 1.91% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares/2/,/3/ 172,805 $ 172,805 Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares/2/,/3/ 61,944 61,944 BlackRock Temp Cash Money Market Fund/2/ 2,752 2,752 Short Term Investment Co. - Liquid Assets Money Market Portfolio/2/ 14,605 14,605 Short Term Investment Co. - Prime Money Market Portfolio, Institutional Shares/2/ 5,631 5,631 257,737 FLOATING RATE NOTES - 0.73% Beta Finance Inc. 1.08%, 05/20/04/2/ $ 2,816 2,815 1.08%, 09/15/04/2/ 5,631 5,631 1.17%, 08/23/04/2/ 2,816 2,818 CC USA Inc. 1.06%, 05/24/04/2/ 5,631 5,631 1.08%, 04/19/04/2/ 2,478 2,478 1.12%, 07/15/04/2/ 2,816 2,816 Dorada Finance Inc. 1.08%, 05/20/04/2/ 5,631 5,631 1.24%, 08/09/04/2/ 1,408 1,408 Five Finance Inc. 1.09%, 04/15/04/2/ 2,816 2,816 HBOS Treasury Services PLC 1.13%, 06/24/08/2/ 5,631 5,631 Holmes Financing PLC 1.08%, 04/15/04/2/ 1,126 1,126 K2 USA LLC 1.08%, 08/16/04/2/ 1,408 1,408 1.08%, 09/27/04/2/ 6,082 6,081 1.09%, 04/13/04/2/ 2,816 2,816 1.09%, 05/17/04/2/ 2,816 2,816 SECURITY PRINCIPAL VALUE ----------------------------------------------------------------------------- Links Finance LLC 1.05%, 07/20/04/2/ $ 2,253 $ 2,252 1.08%, 05/04/04/2/ 2,816 2,816 1.08%, 06/28/04/2/ 2,816 2,815 1.09%, 03/29/04/2/ 2,816 2,816 Nationwide Building Society 1.08%, 07/23/04/2/ 4,223 4,223 Sigma Finance Inc. 1.05%, 07/20/04/2/ 2,816 2,815 1.07%, 10/15/03/2/ 5,631 5,631 1.07%, 07/01/04/2/ 2,816 2,815 1.24%, 08/06/04/2/ 1,408 1,408 Tango Finance Corp. 1.05%, 07/15/04/2/ 1,689 1,689 1.06%, 07/06/04/2/ 1,689 1,689 WhistleJacket Capital LLC 1.08%, 09/15/04/2/ 2,815 2,815 White Pine Finance LLC 1.08%, 05/17/04/2/ 3,379 3,379 1.08%, 07/06/04/2/ 3,379 3,379 1.08%, 08/26/04/2/ 2,816 2,815 1.09%, 04/20/04/2/ 2,816 2,816 98,095 COMMERCIAL PAPER - 0.38% Amsterdam Funding Corp. 1.06%, 10/16/03/2/ 2,670 2,670 Blue Ridge Asset Funding Corp. 1.05%, 10/17/03/2/ 2,816 2,814 Edison Asset Securitization 1.07%, 10/23/03/2/ 5,293 5,290 Gemini Securitization Corp. 1.05%, 10/17/03/2/ 1,971 1,970 Greenwich Funding Corp. 1.06%, 10/16/03/2/ 3,322 3,321 Jupiter Securitization Corp. 1.05%, 10/20/03/2/ 2,816 2,814 New Center Asset Trust 1.06%, 10/22/03/2/ 2,816 2,814 Park Avenue Receivables Corp. 1.05%, 10/20/03/2/ 2,816 2,814 46 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P GLOBAL TECHNOLOGY SECTOR INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE ----------------------------------------------------------------------------- Preferred Receivables Funding Corp. 1.06%, 10/08/03/2/ $ 2,816 $ 2,815 Receivables Capital Corp. 1.05%, 10/15/03/2/ 1,893 1,892 Sydney Capital Corp. 1.07%, 10/17/03/2/ 2,281 2,280 UBS Finance (Delaware) Inc. 1.03%, 10/08/03/2/ 5,631 5,630 1.05%, 10/15/03/2/ 2,816 2,814 1.11%, 10/01/03/2/ 11,263 11,263 51,201 TIME DEPOSITS - 0.12% Abbey National Treasury Services PLC 1.15%, 10/01/03/2/ 2,816 2,816 Canadian Imperial Bank of Commerce 1.06%, 10/08/03/2/ 1,408 1,408 1.08%, 10/30/03/2/ 2,253 2,253 1.37%, 08/26/04/2/ 5,631 5,631 Toronto-Dominion Bank 1.33%, 08/23/04/2/ 3,660 3,659 15,767 REPURCHASE AGREEMENTS - 0.03% Lehman Brothers Inc. 1.10%, 10/01/03/2/ 4,505 4,505 4,505 TOTAL SHORT TERM INVESTMENTS (Cost: $427,305) 427,305 TOTAL INVESTMENTS IN SECURITIES - 103.11% (Cost $14,964,660) 13,925,794 Other Assets, Less Liabilities - (3.11%) (419,607) ------------- NET ASSETS - 100.00% $ 13,506,187 ============= /1/ Non-income earning securities. /2/ All or a portion of this security represents investments of securities lending collateral. /3/ Issuer is an affiliate of the Fund's investment advisor. See Note 2. SEE NOTES TO FINANCIAL STATEMENTS. SCHEDULES OF INVESTMENTS 47 SCHEDULE OF INVESTMENTS (Unaudited) iSHARES S&P GLOBAL TELECOMMUNICATIONS SECTOR INDEX FUND September 30, 2003 SECURITY SHARES VALUE ----------------------------------------------------------------------------- COMMON STOCKS - 99.83% AUSTRALIA - 2.38% Telstra Corp. Ltd. 102,277 $ 328,132 328,132 BRAZIL - 0.73% Brasil Telecom Participacoes SA ADR 754 28,878 Embratel Participacoes SA ADR/1/ 898 11,728 Tele Norte Leste Participacoes SA ADR 4,340 60,500 101,106 CANADA - 2.86% BCE Inc. 14,490 313,004 TELUS Corp. 4,844 82,812 395,816 DENMARK - 0.44% TDC A/S ADR 4,025 61,180 61,180 FRANCE - 3.67% Bouygues SA 3,668 96,580 France Telecom SA/1/ 12,523 288,027 Orange SA/1/ 12,033 122,614 507,221 GERMANY - 3.97% Deutsche Telekom AG/1/ 37,814 547,812 547,812 GREECE - 0.36% Hellenic Telecommunications Organization SA 9,156 49,717 49,717 HONG KONG - 1.74% China Mobil Ltd. 77,000 202,846 China Unicom Ltd. 46,000 37,721 240,567 ITALY - 4.48% Telecom Italia Mobile SpA 58,114 $ 270,030 Telecom Italia SpA/1/ 141,774 349,193 619,223 JAPAN - 9.67% Nippon Telegraph & Telephone Corp. 140 634,114 NTT DoCoMo Inc. 287 701,347 1,335,461 MEXICO - 2.28% America Movil SA de CV ADR Series L 5,915 136,696 Telefonos de Mexico ADR 5,822 177,862 314,558 NETHERLANDS - 1.81% Equant NV/1/ 2,114 15,756 Koninklijke KPN NV/1/ 31,297 234,354 250,110 NEW ZEALAND - 0.32% Telecom Corp. of New Zealand Ltd. 14,327 43,638 43,638 PORTUGAL - 1.03% Portugal Telecom SGPS ADR 18,033 141,920 141,920 SOUTH KOREA - 0.75% SK Telecom Co. Ltd. ADR 5,810 103,650 103,650 SPAIN - 6.18% Telefonica SA 72,305 853,816 853,816 SWEDEN - 0.81% TeliaSonera AB ADR 5,145 112,212 112,212 48 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P GLOBAL TELECOMMUNICATIONS SECTOR INDEX FUND September 30, 2003 SECURITY SHARES VALUE ----------------------------------------------------------------------------- SWITZERLAND - 0.85% Swisscom AG ADR 4,025 $ 117,852 117,852 UNITED KINGDOM - 19.83% BT Group PLC 135,681 405,757 Cable & Wireless PLC 37,765 71,370 mm02 PLC/1/ 136,332 129,672 Vodafone Group PLC 1,070,055 2,133,347 2,740,146 UNITED STATES - 35.67% Alltel Corp. 4,879 226,093 AT&T Corp. 12,245 263,880 AT&T Wireless Services Inc./1/ 42,567 348,198 BellSouth Corp. 28,959 685,749 CenturyTel Inc. 2,275 77,100 Citizens Communications Co./1/ 4,473 50,142 Nextel Communications Inc. Class A/1/ 16,289 320,730 Qwest Communications International Inc./1/ 26,852 91,297 SBC Communications Inc. 52,045 1,158,001 Sprint Corp. (FON Group) 14,000 211,400 Sprint Corp. (PCS Group)/1/ 16,009 91,732 Verizon Communications Inc. 43,267 1,403,581 4,927,903 TOTAL COMMON STOCKS (Cost: $16,548,317) 13,792,040 SHORT TERM INVESTMENTS - 14.99% MONEY MARKET FUNDS - 8.98% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares/2/,/3/ 824,697 824,697 Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares/2/,/3/ 303,475 303,475 BlackRock Temp Cash Money Market Fund/2/ 13,481 13,481 SHARES OR SECURITY PRINCIPAL VALUE ----------------------------------------------------------------------------- Short Term Investment Co. - Liquid Assets Money Market Portfolio/2/ 71,552 $ 71,552 Short Term Investment Co. - Prime Money Market Portfolio, Institutional Shares/2/ 27,589 27,589 1,240,794 FLOATING RATE NOTES - 3.48% Beta Finance Inc. 1.08%, 05/20/04/2/ $ 13,794 13,793 1.08%, 09/15/04/2/ 27,589 27,586 1.17%, 08/23/04/2/ 13,794 13,805 CC USA Inc. 1.06%, 05/24/04/2/ 27,589 27,587 1.08%, 04/19/04/2/ 12,139 12,139 1.12%, 07/15/04/2/ 13,794 13,798 Dorada Finance Inc. 1.08%, 05/20/04/2/ 27,589 27,586 1.24%, 08/09/04/2/ 6,897 6,896 Five Finance Inc. 1.09%, 04/15/04/2/ 13,794 13,794 HBOS Treasury Services PLC 1.13%, 06/24/08/2/ 27,589 27,589 Holmes Financing PLC 1.08%, 04/15/04/2/ 5,518 5,518 K2 USA LLC 1.08%, 08/16/04/2/ 6,897 6,896 1.08%, 09/27/04/2/ 29,796 29,791 1.09%, 04/13/04/2/ 13,794 13,794 1.09%, 05/17/04/2/ 13,794 13,794 Links Finance LLC 1.05%, 07/20/04/2/ 11,035 11,034 1.08%, 05/04/04/2/ 13,794 13,794 1.08%, 06/28/04/2/ 13,794 13,792 1.09%, 03/29/04/2/ 13,794 13,794 Nationwide Building Society 1.08%, 07/23/04/2/ 20,691 20,691 SCHEDULES OF INVESTMENTS 49 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P GLOBAL TELECOMMUNICATIONS SECTOR INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE ----------------------------------------------------------------------------- Sigma Finance Inc. 1.05%, 07/20/04/2/ $ 13,794 $ 13,792 1.07%, 10/15/03/2/ 27,589 27,589 1.07%, 07/01/04/2/ 13,794 13,792 1.24%, 08/06/04/2/ 6,897 6,897 Tango Finance Corp. 1.05%, 07/15/04/2/ 8,277 8,274 1.06%, 07/06/04/2/ 8,277 8,276 WhistleJacket Capital LLC 1.08%, 09/15/04/2/ 13,794 13,792 White Pine Finance LLC 1.08%, 05/17/04/2/ 16,553 16,553 1.08%, 07/06/04/2/ 16,553 16,552 1.08%, 08/26/04/2/ 13,794 13,792 1.09%, 04/20/04/2/ 13,794 13,794 480,574 COMMERCIAL PAPER - 1.81% Amsterdam Funding Corp. 1.06%, 10/16/03/2/ 13,105 13,099 Blue Ridge Asset Funding Corp. 1.05%, 10/17/03/2/ 13,794 13,788 Edison Asset Securitization 1.07%, 10/23/03/2/ 25,933 25,916 Gemini Securitization Corp. 1.05%, 10/17/03/2/ 9,656 9,652 Greenwich Funding Corp. 1.06%, 10/16/03/2/ 16,277 16,270 Jupiter Securitization Corp. 1.05%, 10/20/03/2/ 13,794 13,787 New Center Asset Trust 1.06%, 10/22/03/2/ 13,794 13,786 Park Avenue Receivables Corp. 1.05%, 10/20/03/2/ 13,794 13,787 Preferred Receivables Funding Corp. 1.06%, 10/08/03/2/ 13,794 13,791 Receivables Capital Corp. 1.05%, 10/15/03/2/ 9,272 9,268 Sydney Capital Corp. 1.07%, 10/17/03/2/ 11,173 11,168 UBS Finance (Delaware) Inc. 1.03%, 10/08/03/2/ 27,589 27,583 1.05%, 10/15/03/2/ 13,794 13,789 1.11%, 10/01/03/2/ 55,177 55,177 250,861 TIME DEPOSITS - 0.56% Abbey National Treasury Services PLC 1.15%, 10/01/03/2/ 13,794 13,794 Canadian Imperial Bank of Commerce 1.06%, 10/08/03/2/ 6,897 6,897 1.08%, 10/30/03/2/ 11,035 11,035 1.37%, 08/26/04/2/ 27,589 27,589 Toronto-Dominion Bank 1.33%, 08/23/04/2/ 17,933 17,925 77,240 REPURCHASE AGREEMENTS - 0.16% Lehman Brothers Inc. 1.10%, 10/01/03/2/ 22,071 22,071 22,071 TOTAL SHORT TERM INVESTMENTS (Cost: $2,071,540) 2,071,540 TOTAL INVESTMENTS IN SECURITIES - 114.82% (Cost $18,619,857) 15,863,580 Other Assets, Less Liabilities - (14.82%) (2,047,217) ------------- NET ASSETS - 100.00% $ 13,816,363 ============= /1/ Non-income earning securities. /2/ All or a portion of this security represents investments of securities lending collateral. /3/ Issuer is an affiliate of the Fund's investment advisor. See Note 2. SEE NOTES TO FINANCIAL STATEMENTS. 50 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) iSHARES S&P EUROPE 350 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ----------------------------------------------------------------------------- COMMON STOCKS - 99.44% AUSTRIA - 0.04% OMV AG 1,512 $ 181,010 VA Technologie AG/1/ 1,134 32,751 213,761 BELGIUM - 1.43% Algemene Maatschappij voor Nijverheidskredit NV 11,718 475,979 Dexia Group 83,916 1,223,509 Electrabel SA 3,780 1,039,752 Fortis Group 140,805 2,395,667 Groupe Bruxelles Lambert SA 9,450 452,856 Interbrew SA 16,443 409,399 KBC Bankverzekeringsholding NV 11,718 446,231 Solvay SA 7,560 539,245 UCB SA 12,096 357,090 7,339,728 DENMARK - 0.91% AP Moller - Maersk A/S 189 1,289,404 Danske Bank A/S 60,858 1,159,664 Group 4 Falck A/S 9,450 204,526 ISS A/S 5,103 231,292 Novo Nordisk A/S Class B 30,807 1,135,417 TDC A/S 15,498 476,398 Vestas Wind Systems A/S 10,395 173,625 4,670,326 FINLAND - 2.12% Nokia OYJ 572,670 8,816,456 Stora Enso OYJ Class R 78,624 973,300 UPM-Kymmene OYJ 62,748 1,051,523 10,841,279 FRANCE - 13.96% Accor SA 25,515 939,541 Alcatel SA Class A/1/ 144,207 1,707,912 Alstom/1/ 44,982 131,483 Assurances Generales de France 8,883 416,374 Aventis SA 82,971 4,304,594 AXA AG 177,093 2,984,201 AXA AG Rights/1/ 167,723 7,813 BNP Paribas SA 100,359 4,920,356 Bouygues SA 27,405 721,587 Cap Gemini SA/1/ 12,285 509,311 Carrefour SA 70,497 3,546,603 Christian Dior SA 7,749 385,961 Compagnie de Saint-Gobain SA 38,556 1,417,505 Compagnie Generale des Etablissements Michelin Class B 17,577 653,585 Credit Agricole SA 76,063 1,481,929 Dassault Systemes SA 7,560 265,000 Essilor International SA 11,907 514,994 Etablissements Economiques du Casino Guichard-Perrachon SA 5,292 469,297 European Aeronautic Defence and Space Co. 30,618 472,088 France Telecom SA/1/ 95,823 2,203,916 Groupe Danone 15,876 2,421,980 Lafarge SA 18,665 1,209,626 Lagardere S.C.A. 16,632 753,446 L'Air Liquide SA 11,907 1,681,982 L'Oreal SA 36,855 2,517,228 LVMH Moet Hennessy Louis Vuitton SA 28,350 1,761,350 Orange SA/1/ 89,775 914,790 Pechiney SA Class A 8,505 467,987 Pernod-Ricard SA 6,993 662,083 Pinault-Printemps-Redoute SA 8,127 667,233 PSA Peugeot Citroen 21,924 931,648 Publicis Groupe 15,498 425,576 Renault SA 22,491 1,330,548 Sagem SA 1,701 159,363 Sanofi-Synthelabo SA 43,092 2,619,542 Schneider Electric SA 24,948 1,292,867 Societe Generale Class A 45,171 3,008,942 Societe Television Francaise 1 14,742 436,577 Sodexho Alliance SA 10,584 288,172 STMicroelectronics NV 70,308 1,698,952 Suez SA 112,455 1,784,978 Thales/Ex Thomson CSF 7,560 205,133 SCHEDULES OF INVESTMENTS 51 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P EUROPE 350 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ----------------------------------------------------------------------------- Thomson SA 23,247 $ 405,002 Total SA 81,270 12,265,730 Valeo SA 7,749 282,905 Veolia Environment 22,869 507,075 Vinci SA 8,694 626,206 Vivendi Universal SA/1/ 119,259 2,111,023 71,491,994 GERMANY - 8.99% Adidas-Salomon AG 5,670 494,895 Allianz AG 36,957 3,262,301 Altana AG 8,127 518,549 BASF AG 65,016 2,854,432 Bayer AG 83,160 1,796,456 Bayerische Hypo-Und Vereinsbank AG/1/ 42,525 731,447 Bayerische Motoren Werke AG 38,745 1,464,160 Commerzbank AG 48,195 702,691 Continental AG 15,876 462,210 DaimlerChrysler AG 97,902 3,436,315 Deutsche Bank AG 70,497 4,289,583 Deutsche Lufthansa AG 48,006 631,172 Deutsche Post AG 37,800 645,773 Deutsche Telekom AG/1/ 288,036 4,172,778 E.ON AG 74,466 3,633,542 Epcos AG/1/ 6,237 104,519 Fresenius Medical Care AG 3,969 228,748 Infineon Technologies AG/1/ 52,731 688,996 Linde AG 9,450 389,137 MAN AG 9,450 201,722 Metro AG 17,199 626,110 MLP AG/1/ 6,426 98,032 Muenchener Rueckversicherungs-Gesellschaft AG 14,175 1,408,254 RWE AG 47,250 1,256,771 SAP AG 24,759 3,024,015 Schering AG 21,357 929,689 Siemens AG 99,225 5,909,353 ThyssenKrupp AG 47,250 633,888 TUI AG 13,041 217,476 Volkswagen AG 27,027 1,214,593 46,027,607 GREECE - 0.18% Hellenic Telecommunications Organization SA 68,418 371,510 National Bank of Greece SA ADR 141,357 549,879 921,389 IRELAND - 0.81% Allied Irish Banks PLC 107,730 1,587,031 Bank of Ireland 120,960 1,445,264 CRH PLC 62,200 1,109,704 4,141,999 ITALY - 5.32% Alitalia SpA/1/ 400,302 126,566 Alleanza Assicurazioni SpA 60,480 582,473 Assicurazioni Generali SpA 134,757 3,041,328 Banca Fideuram SpA 28,350 165,075 Banca Intesa SpA 550,179 1,665,848 Banca Monte dei Paschi di Siena SpA 137,970 379,188 Banca Nazionale del Lavoro SpA/1/ 189,000 373,069 Banca Popolare di Verona e Novara SCRL 39,123 550,373 Benetton Group SpA 5,292 55,712 Capitalia SpA/1/ 201,852 484,238 Enel SpA 230,986 1,436,432 Eni SpA 328,860 5,024,618 Fiat SpA/1/ 74,466 588,825 FinecoGroup SpA/1/ 189,000 122,155 Finmeccanica SpA 735,399 495,004 Mediaset SpA 74,655 683,344 Mediobanca SpA 60,102 581,632 Mediolanum SpA 28,350 182,243 Parmalat Finanziaria SpA 41,958 131,684 Pirelli & Co. SpA 279,021 217,381 Riunione Adriatica di Sicurta SpA 43,848 668,928 Sanpaolo IMI SpA 143,829 1,433,766 Snam Rete Gas SpA 92,988 358,437 52 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P EUROPE 350 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ----------------------------------------------------------------------------- Telecom Italia Media SpA/1/ 433,675 $ 398,979 Telecom Italia Mobile SpA 436,023 2,026,005 Telecom Italia SpA/1/ 1,116,105 2,748,993 Tiscali SpA/1/ 26,838 163,147 Unicredito Italiano SpA 544,131 2,572,691 27,258,134 LUXEMBOURG - 0.14% Arcelor 60,102 730,714 730,714 NETHERLANDS - 7.29% ABN AMRO Holding NV 171,045 3,157,169 Aegon NV 156,541 1,821,175 Akzo Nobel NV 37,611 1,172,523 ASML Holding NV/1/ 52,731 690,839 Burhmann NV/1/ 13,986 103,751 DSM NV 8,883 421,650 Equant NV/1/ 17,199 128,186 Gucci Group NV 3,591 301,724 Hagemeyer NV 11,907 54,356 Heineken NV 22,326 810,932 ING Groep NV 201,096 3,683,751 Koninklijke Ahold NV/1/ 110,376 1,052,729 Koninklijke KPN NV/1/ 250,805 1,878,042 Koninklijke Numico NV/1/ 16,826 341,340 Koninklijke Philips Electronics NV 153,093 3,469,415 Randstad Holding NV 9,072 129,524 Reed Elsevier NV 88,830 1,003,436 Royal Dutch Petroleum Co. 251,370 11,038,959 TNT Post Group NV 35,154 664,433 Unilever NV CVA 68,607 4,034,762 VNU NV 31,185 914,086 Wolters Kluwer NV CVA 32,130 460,977 37,333,759 NORWAY - 0.36% Norsk Hydro ASA 18,900 961,621 Orkla ASA 18,900 370,987 Statoil ASA 47,250 423,555 Tomra Systems ASA 19,278 98,905 1,855,068 PORTUGAL - 0.61% Banco Comercial Portugues SA Class R 370,062 771,411 Banco Espirito Santo e Comercial de Lisboa SA 17,766 258,617 Brisa-Auto Estradas de Portugal SA 74,844 436,669 CIMPOR-Cimentos de Portugal SGPS SA 29,862 119,976 Electricidade de Portugal SA 192,969 442,702 Portugal Telecom SGPS SA 135,513 1,071,541 3,100,916 SPAIN - 5.03% Abertis Infraestructuras SA 33,831 466,471 Acerinox SA 6,048 255,809 Altadis SA 36,855 907,747 Amadeus Global Travel Distribution SA Class A 32,508 204,429 Banco Bilbao Vizcaya Argentaria SA 380,835 3,929,422 Banco Popular Espanol SA 23,625 1,168,456 Banco Santander Central Hispano SA 569,835 4,831,018 Bankinter SA 8,505 304,365 Endesa SA 112,644 1,740,753 Gas Natural SDG SA 25,326 486,346 Grupo Dragados SA 16,065 328,895 Iberdrola SA 90,153 1,517,072 Industria de Diseno Textil SA 25,137 538,629 Repsol YPF SA 113,778 1,869,577 Telefonica SA 567,567 6,702,136 Union Fenosa SA 30,429 503,192 25,754,317 SWEDEN - 2.92% ASSA Abloy AB Class B 37,800 332,290 Atlas Copco AB Class A 14,364 421,520 Electrolux AB Class B 37,800 823,396 ForeningsSparbanken AB 47,250 699,398 Hennes & Mauritz AB Class B 56,700 1,286,404 Holmen AB Class B 4,158 130,619 Nordea AB 287,847 1,641,034 SCHEDULES OF INVESTMENTS 53 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P EUROPE 350 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ----------------------------------------------------------------------------- Sandvik AB 30,996 $ 849,491 Securitas AB Class B 37,800 459,343 Skandia Forsakrings AB 125,874 397,048 Skandinaviska Enskilda Banken AB Class A 56,700 619,380 Skanska AB Class B 35,726 227,231 SKF AB Class B 8,883 280,199 Svenska Cellulosa AB Class B 22,491 814,112 Svenska Handelsbanken AB Class A 65,772 1,118,109 Swedish Match AB 36,666 279,662 Telefonaktiebolaget LM Ericsson AB Class B/1/ 1,836,513 2,682,809 Telia AB 200,788 872,156 Volvo AB Class A 12,474 271,721 Volvo AB Class B 31,752 734,753 14,940,675 SWITZERLAND - 10.48% ABB Ltd./1/ 124,551 688,492 Adecco SA 14,742 728,393 Baloise Holding (Registered) 4,914 182,889 Ciba Specialty Chemicals AG/1/ 8,127 551,093 Clariant AG (Registered)/1/ 18,900 248,308 Compagnie Financiere Richemont AG 57,817 1,149,247 Credit Suisse Group 145,152 4,643,853 Givaudan SA (Registered) 945 400,011 Holcim Ltd. 16,065 647,174 Nestle SA 47,439 10,938,343 Novartis AG 296,919 11,489,142 Roche Holding AG (Bearer) 3,402 418,617 Roche Holding AG (Genusschein) 83,727 6,942,380 Swatch Group (The) AG Class B 3,969 377,184 Swiss Life Holding/1/ 2,079 283,371 Swiss Re 38,178 2,425,514 Swisscom AG 2,835 826,499 Syngenta AG 12,290 666,336 UBS AG (Registered) 141,561 7,943,109 Zurich Financial Services AG/1/ 17,010 2,125,284 53,675,239 UNITED KINGDOM - 38.85% Abbey National PLC 173,502 1,423,986 Aegis Group PLC 141,750 207,832 Alliance & Leicester PLC 57,834 807,598 Allied Domecq PLC 140,238 883,037 Amersham PLC 83,160 715,679 AMVESCAP PLC 100,737 762,345 Anglo American PLC 176,715 3,173,754 ARM Holdings PLC/1/ 109,431 178,172 Associated British Foods PLC 45,171 397,750 AstraZeneca PLC 206,955 8,740,287 Aviva PLC 264,600 2,052,962 AWG PLC/1/ 18,596 149,070 BAA PLC 126,441 974,721 BAE Systems PLC 390,096 1,088,817 Barclays PLC/3/ 783,409 6,009,933 BBA Group PLC 57,834 235,169 BG Group PLC 421,659 1,772,377 BHP Billiton PLC 290,208 1,926,196 BOC Group PLC 61,236 840,352 Boots Group PLC 96,957 1,039,800 BP PLC 2,660,553 18,255,603 BPB PLC 60,102 318,533 Brambles Industries PLC 94,689 267,044 British Airways PLC/1/ 88,263 243,789 British American Tobacco PLC 185,976 1,997,559 British Land Co. PLC 61,425 503,624 British Sky Broadcasting Group PLC/1/ 154,035 1,572,590 BT Group PLC 1,040,098 3,110,434 Bunzl PLC 60,102 455,332 Cable & Wireless PLC 276,507 522,555 Cadbury Schweppes PLC 241,353 1,483,640 Capita Group PLC 85,617 349,920 Carlton Communications PLC 84,105 225,667 Carnival PLC 24,690 787,583 Centrica PLC 505,197 1,523,392 Cobham PLC 12,096 237,639 Compass Group PLC 264,789 1,526,524 Cookson Group PLC/1/,/4/ 206,955 108,308 54 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P EUROPE 350 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ----------------------------------------------------------------------------- Corus Group PLC/1/ 409,374 $ 137,727 Daily Mail and General Trust PLC Class A 36,477 324,377 Diageo PLC 377,433 4,072,801 Dimension Data Holdings PLC/1/ 141,372 61,068 Dixons Group PLC 250,803 560,440 Electrocomponents PLC 56,889 303,867 EMAP PLC 29,484 379,632 EMI Group PLC 103,383 253,776 Exel PLC 38,934 428,538 FirstGroup PLC 56,889 267,478 FKI PLC 75,411 128,420 Gallaher Group PLC 78,057 734,659 GKN PLC 94,689 377,952 GlaxoSmithKline PLC 726,138 15,068,007 Granada PLC 326,592 507,331 GUS PLC 118,125 1,287,419 Hammerson PLC 37,422 338,842 Hanson PLC 96,390 610,543 Hays PLC 226,611 405,670 HBOS PLC 460,593 5,264,777 Hilton Group PLC 196,749 587,565 HSBC Holdings PLC 1,292,193 17,035,250 IMI PLC 46,116 249,006 Imperial Chemical Industries PLC 136,269 375,254 Imperial Tobacco Group PLC 85,806 1,398,495 InterContinental Hotels Group PLC/1/ 91,296 728,060 J Sainsbury PLC 166,320 749,529 Johnson Matthey PLC 29,106 441,980 Kesa Electricals PLC/1/ 60,621 224,344 Kingfisher PLC 265,259 1,150,230 Land Securities Group PLC 60,065 840,748 Legal & General Group PLC 748,062 1,146,511 Lloyds TSB Group PLC 661,311 4,545,880 LogicaCMG PLC 91,665 363,978 Lonmin PLC 13,419 208,006 Marks & Spencer Group PLC 277,838 1,412,496 Misys PLC 60,858 285,634 Mitchells & Butlers PLC/1/ 91,296 348,104 mm02 PLC/1/ 1,023,277 973,291 National Grid Group PLC 367,361 2,352,836 Next PLC 34,776 649,412 Northern Rock PLC 51,408 570,961 Old Mutual PLC 412,965 636,358 Pearson PLC 101,691 963,434 Peninsular & Oriental Steam Navigation Co. PLC 82,593 340,306 Pilkington PLC 99,981 138,701 Provident Financial PLC 32,508 348,357 Prudential Corp. PLC 237,195 1,618,666 Psion PLC/1/ 45,360 48,985 Rank Group PLC 71,631 315,073 Reckitt Benckiser PLC 69,930 1,405,799 Reed International PLC 150,444 1,176,629 Rentokil Initial PLC 223,587 792,154 Rio Tinto PLC 125,496 2,675,043 RMC Group PLC 34,398 340,607 Rolls-Royce Group PLC 188,244 503,525 Royal & Sun Alliance Insurance Group PLC 187,677 251,784 Royal & Sun Alliance Insurance Group PLC Rights/1/ 177,747 36,175 Royal Bank of Scotland Group PLC 334,719 8,508,363 SABMiller PLC 88,263 690,675 Safeway PLC 127,575 588,170 Sage Group PLC 140,805 384,236 Schroders PLC 17,766 198,055 Scottish & Newcastle PLC 105,084 614,981 Scottish & Southern Energy PLC 103,005 1,040,486 Scottish Power PLC 222,453 1,298,162 Severn Trent PLC 40,257 449,119 Shell Transport & Trading Co. PLC 1,160,082 7,160,143 Shire Pharmaceuticals Group PLC/1/ 58,590 424,409 Slough Estates PLC 49,329 297,907 Smiths Group PLC 66,911 743,700 Spirent PLC 81,648 70,538 Standard Chartered PLC 119,826 1,673,258 Tate & Lyle PLC 41,391 223,493 Tesco PLC 860,706 3,446,244 3i Group PLC 73,143 723,346 Tomkins PLC 92,610 376,963 Trinity Mirror PLC 37,989 353,444 SCHEDULES OF INVESTMENTS 55 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P EUROPE 350 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ----------------------------------------------------------------------------- Unilever PLC 340,200 $ 2,905,171 United Business Media PLC 43,503 301,029 United Utilities PLC 67,662 515,979 Vodafone Group PLC 8,129,457 16,207,536 W.H. Smith Group PLC 32,886 203,795 Whitebread PLC 30,996 358,675 WM Morrison Supermarkets PLC 172,368 607,109 Wolseley PLC 70,119 818,091 WPP Group PLC 137,025 1,155,341 198,950,481 TOTAL COMMON STOCKS (Cost: $579,077,172) 509,247,386 PREFERRED STOCKS - 0.18% GERMANY - 0.18% Henkel KGaA 6,237 426,719 Porsche AG 1,134 477,291 904,010 TOTAL PREFERRED STOCKS (Cost: $924,538) 904,010 SHORT TERM INVESTMENTS - 17.60% MONEY MARKET FUNDS - 10.53% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares/2/,/3/ 35,786,369 35,786,369 Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares/2/,/3/ 13,233,199 13,233,199 BlackRock Temp Cash Money Market Fund/2/ 587,845 587,845 Short Term Investment Co. - Liquid Assets Money Market Portfolio/2/ 3,120,045 3,120,045 Short Term Investment Co. - Prime Money Market Portfolio, Institutional Shares/2/ 1,203,019 1,203,019 53,930,477 SECURITY PRINCIPAL VALUE ----------------------------------------------------------------------------- FLOATING RATE NOTES - 4.09% Beta Finance Inc. 1.08%, 05/20/04/2/ $ 601,509 $ 601,452 1.08%, 09/15/04/2/ 1,203,018 1,202,902 1.17%, 08/23/04/2/ 601,509 601,971 CC USA Inc. 1.06%, 05/24/04/2/ 1,203,018 1,202,941 1.08%, 04/19/04/2/ 529,328 529,314 1.12%, 07/15/04/2/ 601,509 601,680 Dorada Finance Inc. 1.08%, 05/20/04/2/ 1,203,018 1,202,904 1.24%, 08/09/04/2/ 300,755 300,716 Five Finance Inc. 1.09%, 04/15/04/2/ 601,509 601,509 HBOS Treasury Services PLC 1.13%, 06/24/08/2/ 1,203,018 1,203,018 Holmes Financing PLC 1.08%, 04/15/04/2/ 240,604 240,604 K2 USA LLC 1.08%, 08/16/04/2/ 300,755 300,715 1.08%, 09/27/04/2/ 1,299,260 1,299,067 1.09%, 04/13/04/2/ 601,509 601,493 1.09%, 05/17/04/2/ 601,509 601,490 Links Finance LLC 1.05%, 07/20/04/2/ 481,207 481,130 1.08%, 05/04/04/2/ 601,509 601,491 1.08%, 06/28/04/2/ 601,509 601,420 1.09%, 03/29/04/2/ 601,509 601,509 Nationwide Building Society 1.08%, 07/23/04/2/ 902,264 902,264 Sigma Finance Inc. 1.05%, 07/20/04/2/ 601,509 601,412 1.07%, 10/15/03/2/ 1,203,018 1,203,013 1.07%, 07/01/04/2/ 601,509 601,396 1.24%, 08/06/04/2/ 300,755 300,729 56 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P EUROPE 350 INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE ----------------------------------------------------------------------------- Tango Finance Corp. 1.05%, 07/15/04/2/ $ 360,905 $ 360,811 1.06%, 07/06/04/2/ 360,905 360,877 WhistleJacket Capital LLC 1.08%, 09/15/04/2/ 601,509 601,394 White Pine Finance LLC 1.08%, 05/17/04/2/ 721,811 721,811 1.08%, 07/06/04/2/ 721,811 721,758 1.08%, 08/26/04/2/ 601,509 601,425 1.09%, 04/20/04/2/ 601,509 601,509 20,955,725 COMMERCIAL PAPER - 2.13% Amsterdam Funding Corp. 1.06%, 10/16/03/2/ 571,434 571,183 Blue Ridge Asset Funding Corp. 1.05%, 10/17/03/2/ 601,509 601,228 Edison Asset Securitization 1.07%, 10/23/03/2/ 1,130,837 1,130,098 Gemini Securitization Corp. 1.05%, 10/17/03/2/ 421,056 420,860 Greenwich Funding Corp. 1.06%, 10/16/03/2/ 709,781 709,467 Jupiter Securitization Corp. 1.05%, 10/20/03/2/ 601,509 601,176 New Center Asset Trust 1.06%, 10/22/03/2/ 601,509 601,137 Park Avenue Receivables Corp. 1.05%, 10/20/03/2/ 601,509 601,176 Preferred Receivables Funding Corp. 1.06%, 10/08/03/2/ 601,509 601,385 Receivables Capital Corp. 1.05%, 10/15/03/2/ 404,310 404,145 Sydney Capital Corp. 1.07%, 10/17/03/2/ 487,222 486,991 UBS Finance (Delaware) Inc. 1.03%, 10/08/03/2/ 1,203,018 1,202,777 1.05%, 10/15/03/2/ 601,509 601,263 1.11%, 10/01/03/2/ 2,406,036 2,406,036 10,938,922 TIME DEPOSITS - 0.66% Abbey National Treasury Services PLC 1.15%, 10/01/03/2/ 601,509 601,509 Canadian Imperial Bank of Commerce 1.06%, 10/08/03/2/ 300,755 300,755 1.08%, 10/30/03/2/ 481,207 481,207 1.37%, 08/26/04/2/ 1,203,018 1,203,018 Toronto-Dominion Bank 1.33%, 08/23/04/2/ 781,962 781,610 3,368,099 REPURCHASE AGREEMENTS - 0.19% Lehman Brothers Inc. 1.10%, 10/01/03/2/ 962,414 962,414 962,414 TOTAL SHORT TERM INVESTMENTS (Cost: $90,155,637) 90,155,637 TOTAL INVESTMENTS IN SECURITIES - 117.22% (Cost $670,157,347) 600,307,033 Other Assets, Less Liabilities - (17.22%) (88,191,325) ------------- NET ASSETS - 100.00% $ 512,115,708 ============= /1/ Non-income earning securities. /2/ All or a portion of this security represents investments of securities lending collateral. /3/ Issuer is an affiliate of the Fund's investment advisor. See Note 2. /4/ Security valued at fair value in accordance with procedures approved by the Board of Trustees. See Note 1. SEE NOTES TO FINANCIAL STATEMENTS. SCHEDULES OF INVESTMENTS 57 SCHEDULE OF INVESTMENTS (Unaudited) iSHARES S&P LATIN AMERICA 40 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ----------------------------------------------------------------------------- COMMON STOCKS - 98.87% ARGENTINA - 1.11% Grupo Financiero Galicia SA ADR/1/ 9,100 $ 44,772 Petrobras Energia Participaciones SA ADR/1/ 35,152 311,095 355,867 BRAZIL - 41.69% Aracruz Celulose SA ADR 16,185 441,851 Banco Bradesco SA ADR 49,790 1,004,264 Banco Itau Holding Financiera SA ADR 37,766 1,367,129 Brasil Telecom Participacoes SA ADR 15,080 577,564 Centrais Eletricas Brasileiras SA ADR 73,541 298,937 Companhia Brasileira de Distribuicao Grupo Pao de Acucar ADR 5,980 112,902 Companhia de Bebidas das Americas ADR 76,258 1,650,986 Companhia Energetica de Minas Gerais ADR 21,036 248,646 Companhia Siderurgica Nacional SA ADR 13,325 473,304 Companhia Vale do Rio Doce ADR 47,840 1,765,296 Embratel Participacoes SA ADR/1/ 13,364 174,534 Empresa Brasileira de Aeronautica SA ADR 24,284 512,392 Gerdau SA ADR 26,000 374,660 Petroleo Brasileiro SA ADR 116,366 2,668,272 Tele Norte Leste Participacoes SA ADR 86,359 1,203,844 Unibanco - Uniao de Bancos Brasileiros SA GDR 23,166 458,687 13,333,268 CHILE - 10.16% Banco de Chile ADR 3,640 81,900 Banco Santander Chile SA ADR 39,650 911,950 Distribution y Servicio D&S SA ADR 35,100 595,998 Empresa Nacional de Electricidad SA ADR/1/ 70,720 763,776 Enersis SA ADR 61,750 356,915 Sociedad Quimica y Minera de Chile SA ADR 13,481 539,105 3,249,644 LUXEMBOURG - 1.34% Tenaris SA ADR 16,239 427,411 427,411 MEXICO - 44.57% Alfa SA Class A 122,200 294,290 America Movil SA de CV Series L/1/ 2,440,100 2,809,973 Cemex SA de CV Series CPO 499,200 2,482,657 Fomento Economico Mexicano SA de CV Class UBD 143,000 542,485 Grupo Carso SA de CV Series A1 139,100 431,025 Grupo Financiero BBVA Bancomer SA de CV Class B/1/ 1,375,400 1,197,571 Grupo Modelo SA de CV Series C 137,800 340,598 Grupo Televisa SA Series CPO 542,100 986,753 Kimberly-Clark de Mexico SA de CV Class A 198,900 479,905 Telefonos de Mexico SA de CV ADR Series L 2,329,600 3,556,561 Wal-Mart de Mexico SA de CV Series V 391,300 1,130,257 14,252,075 TOTAL COMMON STOCKS (Cost: $28,097,852) 31,618,265 PREFERRED STOCKS - 0.79% BRAZIL - 0.79% Centrais Eletricas Brasileiras SA ADR 54,263 251,156 251,156 TOTAL PREFERRED STOCKS (Cost: $268,869) 251,156 58 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P LATIN AMERICA 40 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ----------------------------------------------------------------------------- SHORT TERM INVESTMENTS - 0.09% MONEY MARKET FUNDS - 0.09% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares/2/ 27,941 $ 27,941 27,941 TOTAL SHORT TERM INVESTMENTS (Cost: $27,941) 27,941 TOTAL INVESTMENTS IN SECURITIES - 99.75% (Cost $28,394,662) 31,897,362 Other Assets, Less Liabilities - 0.25% 81,352 ------------- NET ASSETS - 100.00% $ 31,978,714 ============= /1/ Non-income earning securities. /2/ Issuer is an affiliate of the Fund's investment advisor. See Note 2. SEE NOTES TO FINANCIAL STATEMENTS. SCHEDULES OF INVESTMENTS 59 SCHEDULE OF INVESTMENTS (Unaudited) iSHARES S&P/TOPIX 150 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ----------------------------------------------------------------------------- COMMON STOCKS - 99.63% Toyota Motor Corp. 51,600 $ 1,514,998 NTT DoCoMo Inc. 352 860,189 Nippon Telegraph & Telephone Corp. 166 751,878 Canon Inc. 14,000 684,241 Sony Corp. 17,000 593,475 Honda Motor Co. Ltd. 14,400 576,180 Nomura Holdings Inc. 34,000 547,823 Takeda Chemical Industries Ltd. 14,600 531,907 Nissan Motor Co. Ltd. 43,800 472,443 Matsushita Electric Industrial Co. Ltd. 38,000 457,503 Tokyo Electric Power Co. Inc. (The) 21,000 449,268 Mitsubishi Tokyo Financial Group Inc. 58 366,021 Millea Holdings Inc. 32 360,918 Hitachi Ltd. 56,000 310,791 East Japan Railway Co. 64 309,932 Rohm Co. Ltd. 2,000 259,589 Fuji Photo Film Co. Ltd. 8,000 234,883 Sharp Corp. 16,000 234,167 Shin-Etsu Chemical Co. Ltd. 6,200 233,093 Toshiba Corp. 54,000 227,185 Kansai Electric Power Co. Inc. 13,200 225,445 Mizuho Financial Group Inc./1/ 100 223,784 Chubu Electric Power Co. Inc. 11,200 218,556 Sumitomo Mitsui Financial Group Inc. 54 217,518 Murata Manufacturing Co. Ltd. 4,200 216,551 Ricoh Co. Ltd. 12,000 213,758 Kao Corp. 10,000 211,252 NEC Corp./1/ 28,000 210,536 Nippon Steel Corp. 118,000 210,196 Ito-Yokado Co. Ltd. 6,000 199,794 Seven-Eleven Japan Co. Ltd. 6,000 191,738 Kyocera Corp. 3,200 189,053 Mitsui Sumitomo Insurance Co. Ltd. 26,000 188,981 Mitsubishi Estate Co. Ltd. 20,000 188,874 Mitsubishi Corp. 22,000 188,462 JFE Holdings Inc. 8,625 188,381 Tokyo Electron Ltd. 2,800 185,973 UFJ Holdings Inc./1/ 46 180,764 Mitsubishi Heavy Industries Ltd. 60,000 174,014 Nintendo Co. Ltd. 2,000 167,569 Fujitsu Ltd. 32,000 167,283 Yamanouchi Pharmaceutical Co. Ltd. 6,000 165,421 Dai Nippon Printing Co. Ltd. 12,000 164,562 Mitsui & Co. Ltd. 24,000 162,628 Denso Corp. 8,200 162,216 Daiwa Securities Group Inc. 24,000 162,198 Central Japan Railway Co. 20 161,840 Bridgestone Corp. 12,000 160,587 Softbank Corp. 3,800 160,551 Fanuc Ltd. 2,600 157,562 Tokyo Gas Co. Ltd. 46,000 152,764 Mitsubishi Electric Corp. 36,000 150,490 Secom Co. Ltd. 4,000 150,383 Hoya Corp. 1,800 139,373 Nikko Cordial Corp. 26,000 138,245 AEON Co. Ltd. 5,000 131,585 TDK Corp. 2,200 130,564 Keyence Corp. 600 127,396 Sanyo Electric Co. Ltd. 30,000 125,408 ORIX Corp. 1,600 125,032 Mitsui Fudosan Co. Ltd. 14,000 124,066 Fujisawa Pharmaceutical Co. Ltd. 5,400 122,777 Kyushu Electric Power Co. Inc. 7,200 118,265 Sompo Japan Insurance Inc. 16,000 115,723 Eisai Co. Ltd. 4,600 107,470 Kirin Brewery Co. Ltd. 14,000 107,148 Yamato Transport Co. Ltd. 8,000 106,700 Advantest Corp. 1,600 106,127 Nippon Oil Corp. 24,000 105,698 SMC Corp. 1,000 105,447 Nitto Denko Corp. 2,400 103,764 Suzuki Motor Corp. 7,000 103,576 NTT Data Corp. 24 100,756 Sumitomo Electric Industries Ltd. 12,000 99,897 Sankyo Co. Ltd. 6,800 99,156 Toppan Printing Co. Ltd. 12,000 98,930 Asahi Glass Co. Ltd. 14,000 96,370 Sumitomo Corp. 16,000 95,386 Komatsu Ltd. 18,000 93,774 Osaka Gas Co. Ltd. 34,000 92,826 Sekisui House Ltd. 10,000 90,409 60 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P/TOPIX 150 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ----------------------------------------------------------------------------- Oji Paper Co. Ltd. 16,000 $ 89,227 West Japan Railway Company 22 84,483 Japan Airlines System Corp. 30,000 84,053 Asahi Kasei Corp. 22,000 82,907 Ajinomoto Co. Inc. 8,000 82,281 Daikin Industries Ltd. 4,000 80,025 Toray Industries Inc. 22,000 78,969 Japan Tobacco Inc. 12 78,414 Nippon Unipac Holding 16 75,478 Marui Co. Ltd. 6,000 75,191 Pioneer Corp. 3,000 74,251 Mitsubishi Chemical Corp. 34,000 73,956 Daiwa House Industry Co. Ltd. 8,000 72,971 Sumitomo Chemical Co. Ltd. 20,000 72,864 Tostem Inax Holding Corp. 4,000 71,324 Nippon Yusen Kabushiki Kaisha 18,000 71,056 Mitsui Chemicals Inc. 12,000 69,283 Shiseido Co. Ltd. 6,000 68,424 Itochu Corp. 22,000 68,138 Takefuji Corp. 1,060 67,842 Acom Co. Ltd. 1,500 67,269 Nippon Express Co. Ltd. 16,000 66,885 Promise Co. Ltd. 1,500 65,792 Terumo Corp. 3,400 65,587 Kinki Nippon Railway Co. Ltd./1/ 20,000 65,524 All Nippon Airways Co. Ltd./1/ 26,000 65,399 Daiichi Pharmaceutical Co. Ltd. 4,000 64,808 Taisho Pharmaceutical Co. Ltd. 4,000 62,910 Kubota Corp. 18,000 62,033 Hirose Electric Co. Ltd. 600 61,496 Nipponkoa Insurance Co. Ltd. 12,000 60,905 Mitsui O.S.K. Lines Ltd. 18,000 60,744 Sumitomo Trust & Banking Co. Ltd. (The) 12,000 58,434 Tokyu Corp. 14,000 57,647 Matsushita Electric Works Ltd. 8,000 55,498 Credit Saison Co. Ltd. 2,600 54,227 Kajima Corp. 16,000 54,138 Oriental Land Co. Ltd. 1,000 53,529 Asahi Breweries Ltd. 7,200 53,107 Nippon Television Network Corp. 360 52,655 Fuji Heavy Industries Ltd. 10,000 51,202 Sumitomo Metal Mining Co. Ltd. 10,000 51,023 Taisei Corp. 18,000 49,143 Obayashi Corp. 12,000 48,874 Mabuchi Motor Co. Ltd. 600 48,713 Sumitomo Metal Industries Ltd. 52,000 45,616 Shimizu Corp. 12,000 44,900 Nippon Meat Packers Inc. 4,000 44,470 Kuraray Co. Ltd. 6,000 44,417 Nissin Food Products Co. Ltd. 1,800 42,698 NGK Insulators Ltd. 6,000 41,140 Marubeni Corp. 26,000 40,496 Uni-Charm Corp. 800 37,811 Odakyu Electric Railway Co. Ltd. 8,000 37,739 Furukawa Electric Co. Ltd. 10,000 35,447 Mitsui Mining & Smelting Co. Ltd. 10,000 35,447 Kawasaki Heavy Industries Ltd. 28,000 33,084 Alps Electric Co. Ltd. 2,000 32,440 Nisshin Seifun Group Inc. 4,000 31,652 NSK Ltd. 8,000 31,366 Minebea Co. Ltd. 6,000 31,151 Mazda Motor Corp. 12,000 30,291 TonenGeneral Sekiyu K.K. 4,000 30,291 Mitsubishi Materials Corp./1/ 20,000 28,644 Fujikura Ltd. 6,000 26,210 Taiyo Yuden Co. Ltd. 2,000 25,171 Nippon Sheet Glass Co. Ltd. 8,000 24,204 Toyo Seikan Kaisha Ltd. 2,000 22,235 Mitsubishi Logistics Corp. 2,000 15,790 TOTAL COMMON STOCKS (Cost: $21,121,853) 22,949,425 SHORT TERM INVESTMENTS - 9.52% MONEY MARKET FUNDS - 5.69% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares/2/,/3/ 868,870 868,870 SCHEDULES OF INVESTMENTS 61 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P/TOPIX 150 INDEX FUND September 30, 2003 SHARES OR SECURITY PRINCIPAL VALUE ----------------------------------------------------------------------------- Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares/2/,/3/ 322,387 $ 322,387 BlackRock Temp Cash Money Market Fund/2/ 14,321 14,321 Short Term Investment Co. - Liquid Assets Money Market Portfolio/2/ 76,011 76,011 Short Term Investment Co. - Prime Money Market Portfolio, Institutional Shares/2/ 29,308 29,308 1,310,897 FLOATING RATE NOTES - 2.22% Beta Finance Inc. 1.08%, 05/20/04/2/ $ 14,654 14,653 1.08%, 09/15/04/2/ 29,308 29,305 1.17%, 08/23/04/2/ 14,654 14,665 CC USA Inc. 1.06%, 05/24/04/2/ 29,308 29,306 1.08%, 04/19/04/2/ 12,895 12,895 1.12%, 07/15/04/2/ 14,654 14,658 Dorada Finance Inc. 1.08%, 05/20/04/2/ 29,308 29,305 1.24%, 08/09/04/2/ 7,327 7,326 Five Finance Inc. 1.09%, 04/15/04/2/ 14,654 14,654 HBOS Treasury Services PLC 1.13%, 06/24/08/2/ 29,308 29,308 Holmes Financing PLC 1.08%, 04/15/04/2/ 5,862 5,862 K2 USA LLC 1.08%, 08/16/04/2/ 7,327 7,326 1.08%, 09/27/04/2/ 31,653 31,648 1.09%, 04/13/04/2/ 14,654 14,654 1.09%, 05/17/04/2/ 14,654 14,654 Links Finance LLC 1.05%, 07/20/04/2/ 11,723 11,721 1.08%, 05/04/04/2/ 14,654 14,654 SECURITY PRINCIPAL VALUE ----------------------------------------------------------------------------- 1.08%, 06/28/04/2/ $ 14,654 $ 14,652 1.09%, 03/29/04/2/ 14,654 14,654 Nationwide Building Society 1.08%, 07/23/04/2/ 21,981 21,981 Sigma Finance Inc. 1.05%, 07/20/04/2/ 14,654 14,652 1.07%, 10/15/03/2/ 29,308 29,308 1.07%, 07/01/04/2/ 14,654 14,651 1.24%, 08/06/04/2/ 7,327 7,326 Tango Finance Corp. 1.05%, 07/15/04/2/ 8,792 8,790 1.06%, 07/06/04/2/ 8,792 8,792 WhistleJacket Capital LLC 1.08%, 09/15/04/2/ 14,654 14,651 White Pine Finance LLC 1.08%, 05/17/04/2/ 17,585 17,585 1.08%, 07/06/04/2/ 17,585 17,583 1.08%, 08/26/04/2/ 14,654 14,652 1.09%, 04/20/04/2/ 14,654 14,654 510,525 COMMERCIAL PAPER - 1.16% Amsterdam Funding Corp. 1.06%, 10/16/03/2/ 13,921 13,913 Blue Ridge Asset Funding Corp. 1.05%, 10/17/03/2/ 14,654 14,647 Edison Asset Securitization 1.07%, 10/23/03/2/ 27,549 27,531 Gemini Securitization Corp. 1.05%, 10/17/03/2/ 10,258 10,253 Greenwich Funding Corp. 1.06%, 10/16/03/2/ 17,292 17,284 Jupiter Securitization Corp. 1.05%, 10/20/03/2/ 14,654 14,646 New Center Asset Trust 1.06%, 10/22/03/2/ 14,654 14,645 Park Avenue Receivables Corp. 1.05%, 10/20/03/2/ 14,654 14,646 Preferred Receivables Funding Corp. 1.06%, 10/08/03/2/ 14,654 14,651 62 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES S&P/TOPIX 150 INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE ----------------------------------------------------------------------------- Receivables Capital Corp. 1.05%, 10/15/03/2/ $ 9,850 $ 9,846 Sydney Capital Corp. 1.07%, 10/17/03/2/ 11,870 11,864 UBS Finance (Delaware) Inc. 1.03%, 10/08/03/2/ 29,308 29,302 1.05%, 10/15/03/2/ 14,654 14,648 1.11%, 10/01/03/2/ 58,616 58,616 266,492 TIME DEPOSITS - 0.35% Abbey National Treasury Services PLC 1.15%, 10/01/03/2/ 14,654 14,654 Canadian Imperial Bank of Commerce 1.06%, 10/08/03/2/ 7,327 7,327 1.08%, 10/30/03/2/ 11,723 11,723 1.37%, 08/26/04/2/ 29,308 29,308 Toronto-Dominion Bank 1.33%, 08/23/04/2/ 19,050 19,042 82,054 REPURCHASE AGREEMENTS - 0.10% Lehman Brothers Inc. 1.10%, 10/01/03/2/ 23,446 23,446 23,446 TOTAL SHORT TERM INVESTMENTS (Cost: $2,193,414) 2,193,414 TOTAL INVESTMENTS IN SECURITIES - 109.15% (Cost $23,315,267) 25,142,839 Other Assets, Less Liabilities - (9.15%) (2,106,831) ------------- NET ASSETS - 100.00% $ 23,036,008 ============= /1/ Non-income earning securities. /2/ All or a portion of this security represents investments of securities lending collateral. /3/ Issuer is an affiliate of the Fund's investment advisor. See Note 2. SEE NOTES TO FINANCIAL STATEMENTS. SCHEDULES OF INVESTMENTS 63 SCHEDULE OF INVESTMENTS (Unaudited) iSHARES NASDAQ BIOTECHNOLOGY INDEX FUND September 30, 2003 SECURITY SHARES VALUE ----------------------------------------------------------------------------- COMMON STOCKS - 100.03% Amgen Inc./1/ 1,459,100 $ 94,214,087 MGI Pharma Inc./1/ 470,499 18,471,791 Gilead Sciences Inc./1/ 308,733 17,267,437 Genzyme Corp. - General Division/1/ 349,577 16,167,936 Chiron Corp./1/ 299,375 15,474,694 ImClone Systems Inc./1/ 385,614 14,930,974 Ligand Pharmaceuticals Inc. Class B/1/ 1,107,344 14,273,664 OSI Pharmaceuticals Inc./1/ 433,826 14,086,330 Alkermes Inc./1/ 1,009,925 13,856,171 Nektar Therapeutics/1/ 1,078,014 13,798,579 ICOS Corp./1/ 340,530 13,049,110 MedImmune Inc./1/ 378,920 12,508,149 Abgenix Inc./1/ 835,134 12,101,091 Genta Inc./1/ 944,930 11,972,263 Millennium Pharmaceuticals Inc./1/ 761,611 11,721,193 Tanox Inc./1/ 567,925 11,364,179 Amylin Pharmaceuticals Inc./1/ 402,338 11,362,025 Protein Design Labs Inc./1/ 819,447 11,357,535 ILEX Oncology Inc./1/ 665,937 11,061,214 Human Genome Sciences Inc./1/ 806,889 11,022,104 QLT Inc./1/ 680,525 10,867,984 Invitrogen Corp./1/ 186,165 10,795,708 Cell Genesys Inc./1/ 857,079 10,782,054 Qiagen NV/1/ 985,703 10,468,166 Biogen Inc./1/ 269,983 10,321,450 Celgene Corp./1/ 234,437 10,158,155 Telik Inc./1/ 496,282 9,950,454 NPS Pharmaceuticals Inc./1/ 351,308 9,783,928 Antigenics Inc./1/ 778,230 9,494,406 IDEC Pharmaceuticals Corp./1/ 285,097 9,450,966 Tularik Inc./1/ 944,170 9,309,516 ID Biomedical Corp./1/ 511,938 8,953,796 Medicines Co. (The)/1/ 339,052 8,815,352 XOMA Ltd./1/ 1,164,938 8,620,541 Exelixis Inc./1/ 1,188,908 8,488,803 Atrix Laboratories Inc./1/ 409,016 8,421,639 United Therapeutics Inc./1/ 362,093 8,179,681 Neurocrine Biosciences Inc./1/ 157,836 7,816,039 Medarex Inc./1/ 1,291,019 7,655,743 CV Therapeutics Inc./1/ 338,549 7,448,078 Cell Therapeutics Inc./1/ 631,188 7,176,608 Vertex Pharmaceuticals Inc./1/ 565,662 6,957,643 Corixa Corp./1/ 869,187 6,918,729 Diversa Corp./1/ 888,995 6,889,711 Albany Molecular Research Inc./1/ 431,158 6,385,450 Cephalon Inc./1/ 138,657 6,367,129 Myriad Genetics Inc./1/ 543,924 6,178,977 Regeneron Pharmaceuticals Inc./1/ 349,514 6,175,912 Enzon Pharmaceuticals Inc./1/ 503,359 5,859,099 InterMune Inc./1/ 306,588 5,849,699 Isis Pharmaceuticals Inc./1/ 890,524 5,806,217 Incyte Corp./1/ 1,113,758 5,134,424 Alexion Pharmaceuticals Inc./1/ 289,728 4,829,766 Cubist Pharmaceuticals Inc./1/ 429,394 4,633,161 Affymetrix Inc./1/ 214,124 4,494,463 SciClone Pharmaceuticals Inc./1/ 549,831 4,343,665 Transkaryotic Therapies Inc./1/ 409,993 4,284,427 Praecis Pharmaceuticals Inc./1/ 590,462 3,962,000 BioMarin Pharmaceutical Inc./1/ 502,237 3,847,135 Trimeris Inc./1/ 132,809 3,342,803 NeoPharm Inc./1/ 213,194 3,197,910 Pharmacopeia Inc./1/ 249,525 3,168,718 Immunomedics Inc./1/ 371,689 2,720,763 CuraGen Corp./1/ 519,600 2,613,588 Arena Pharmaceuticals Inc./1/ 335,868 2,418,250 Geron Corp./1/ 130,873 1,792,960 Novavax Inc./1/ 240,880 1,768,059 Luminex Corp./1/ 219,363 1,480,700 Gene Logic Inc./1/ 265,746 1,249,006 VaxGen Inc./1/ 97,236 1,166,832 Array BioPharma Inc./1/ 207,649 1,138,124 Immunogen Inc./1/ 247,321 1,100,578 Caliper Technologies Corp./1/ 156,448 977,800 ArQule Inc./1/ 113,975 524,285 Avigen Inc./1/ 95,608 497,162 TOTAL COMMON STOCKS (Cost: $587,718,687) 671,094,738 64 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES NASDAQ BIOTECHNOLOGY INDEX FUND September 30, 2003 SHARES OR SECURITY PRINCIPAL VALUE ----------------------------------------------------------------------------- SHORT TERM INVESTMENTS - 33.15% MONEY MARKET FUNDS - 19.78% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares/2/,/3/ 87,821,333 $ 87,821,333 Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares/2/,/3/ 32,751,845 32,751,845 BlackRock Temp Cash Money Market Fund/2/ 1,454,901 1,454,901 Short Term Investment Co. - Liquid Assets Money Market Portfolio/2/ 7,722,035 7,722,035 Short Term Investment Co. - Prime Money Market Portfolio, Institutional Shares/2/ 2,977,440 2,977,440 132,727,554 FLOATING RATE NOTES - 7.73% Beta Finance Inc. 1.08%, 05/20/04/2/ $ 1,488,720 1,488,579 1.08%, 09/15/04/2/ 2,977,440 2,977,156 1.17%, 08/23/04/2/ 1,488,720 1,489,863 CC USA Inc. 1.06%, 05/24/04/2/ 2,977,440 2,977,250 1.08%, 04/19/04/2/ 1,310,074 1,310,038 1.12%, 07/15/04/2/ 1,488,720 1,489,143 Dorada Finance Inc. 1.08%, 05/20/04/2/ 2,977,440 2,977,157 1.24%, 08/09/04/2/ 744,360 744,265 Five Finance Inc. 1.09%, 04/15/04/2/ 1,488,720 1,488,720 HBOS Treasury Services PLC 1.13%, 06/24/08/2/ 2,977,440 2,977,440 Holmes Financing PLC 1.08%, 04/15/04/2/ 595,488 595,488 SECURITY PRINCIPAL VALUE ----------------------------------------------------------------------------- K2 USA LLC 1.08%, 08/16/04/2/ $ 744,360 $ 744,263 1.08%, 09/27/04/2/ 3,215,636 3,215,160 1.09%, 04/13/04/2/ 1,488,720 1,488,681 1.09%, 05/17/04/2/ 1,488,720 1,488,674 Links Finance LLC 1.05%, 07/20/04/2/ 1,190,976 1,190,785 1.08%, 05/04/04/2/ 1,488,720 1,488,677 1.08%, 06/28/04/2/ 1,488,720 1,488,500 1.09%, 03/29/04/2/ 1,488,720 1,488,720 Nationwide Building Society 1.08%, 07/23/04/2/ 2,233,080 2,233,080 Sigma Finance Inc. 1.05%, 07/20/04/2/ 1,488,720 1,488,481 1.07%, 10/15/03/2/ 2,977,440 2,977,429 1.07%, 07/01/04/2/ 1,488,720 1,488,442 1.24%, 08/06/04/2/ 744,360 744,297 Tango Finance Corp. 1.05%, 07/15/04/2/ 893,232 892,999 1.06%, 07/06/04/2/ 893,232 893,162 WhistleJacket Capital LLC 1.08%, 09/15/04/2/ 1,488,720 1,488,435 White Pine Finance LLC 1.08%, 05/17/04/2/ 1,786,464 1,786,464 1.08%, 07/06/04/2/ 1,786,464 1,786,333 1.08%, 08/26/04/2/ 1,488,720 1,488,513 1.09%, 04/20/04/2/ 1,488,720 1,488,720 51,864,914 COMMERCIAL PAPER - 4.04% Amsterdam Funding Corp. 1.06%, 10/16/03/2/ 1,414,284 1,413,663 Blue Ridge Asset Funding Corp. 1.05%, 10/17/03/2/ 1,488,720 1,488,025 Edison Asset Securitization 1.07%, 10/23/03/2/ 2,798,794 2,796,964 Gemini Securitization Corp. 1.05%, 10/17/03/2/ 1,042,104 1,041,618 Greenwich Funding Corp. 1.06%, 10/16/03/2/ 1,756,690 1,755,914 SCHEDULES OF INVESTMENTS 65 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES NASDAQ BIOTECHNOLOGY INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE ----------------------------------------------------------------------------- Jupiter Securitization Corp. 1.05%, 10/20/03/2/ $ 1,488,720 $ 1,487,895 New Center Asset Trust 1.06%, 10/22/03/2/ 1,488,720 1,487,800 Park Avenue Receivables Corp. 1.05%, 10/20/03/2/ 1,488,720 1,487,895 Preferred Receivables Funding Corp. 1.06%, 10/08/03/2/ 1,488,720 1,488,413 Receivables Capital Corp. 1.05%, 10/15/03/2/ 1,000,658 1,000,250 Sydney Capital Corp. 1.07%, 10/17/03/2/ 1,205,863 1,205,290 UBS Finance (Delaware) Inc. 1.03%, 10/08/03/2/ 2,977,440 2,976,844 1.05%, 10/15/03/2/ 1,488,720 1,488,112 1.11%, 10/01/03/2/ 5,954,881 5,954,881 27,073,564 TIME DEPOSITS - 1.24% Abbey National Treasury Services PLC 1.15%, 10/01/03/2/ 1,488,720 1,488,720 Canadian Imperial Bank of Commerce 1.06%, 10/08/03/2/ 744,360 744,360 1.08%, 10/30/03/2/ 1,190,976 1,190,976 1.37%, 08/26/04/2/ 2,977,440 2,977,440 Toronto-Dominion Bank 1.33%, 08/23/04/2/ 1,935,336 1,934,465 8,335,961 REPURCHASE AGREEMENTS - 0.36% Lehman Brothers Inc. 1.10%, 10/01/03/2/ 2,381,952 2,381,952 2,381,952 TOTAL SHORT TERM INVESTMENTS (Cost: $222,383,945) 222,383,945 TOTAL INVESTMENTS IN SECURITIES - 133.18% (Cost $810,102,632) 893,478,683 OTHER ASSETS, LESS LIABILITIES - (33.18%) (222,593,303) ------------- NET ASSETS - 100.00% $ 670,885,380 ============= /1/ Non-income earning securities. /2/ All or a portion of this security represents investments of securities lending collateral. /3/ Issuer is an affiliate of the Fund's investment advisor. See Note 2. SEE NOTES TO FINANCIAL STATEMENTS. 66 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS STATEMENTS OF ASSETS AND LIABILITIES (Unaudited) iSHARES TRUST September 30, 2003
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 $ 434,143,226 $ 102,798,269 $ 30,772,799 $ 19,865,185 $ 37,239,856 $ 14,964,660 ------------- ------------- ------------ ------------ ------------ ------------ Foreign currency, at cost $ - $ 65,821 $ 83,570 $ 20,609 $ 20,234 $ 7,964 ------------- ------------- ------------ ------------ ------------ ------------ Investments in securities, at value (including securities on loan/1/) (Note 1) $ 401,484,243 $ 91,985,480 $ 30,866,183 $ 21,688,015 $ 35,802,934 $ 13,925,794 Foreign currency, at value - 68,465 86,597 20,697 20,188 8,419 Receivables: Dividends and interest 523,082 189,832 28,342 71,323 54,373 5,492 ------------- ------------- ------------ ------------ ------------ ------------ Total Assets 402,007,325 92,243,777 30,981,122 21,780,035 35,877,495 13,939,705 ------------- ------------- ------------ ------------ ------------ ------------ LIABILITIES Payables: Collateral for securities on loan (Note 5) 19,257,566 8,969,680 1,115,164 1,177,634 1,495,528 420,536 Advisory fees (Note 2) 132,180 55,476 30,612 22,156 33,699 12,982 ------------- ------------- ------------ ------------ ------------ ------------ Total Liabilities 19,389,746 9,025,156 1,145,776 1,199,790 1,529,227 433,518 ------------- ------------- ------------ ------------ ------------ ------------ NET ASSETS $ 382,617,579 $ 83,218,621 $ 29,835,346 $ 20,580,245 $ 34,348,268 $ 13,506,187 ============= ============= ============ ============ ============ ============ NET ASSETS CONSIST OF: Paid-in capital $ 407,369,755 $ 97,102,483 $ 29,452,816 $ 18,723,756 $ 36,034,792 $ 14,941,066 Undistributed net investment income (accumulated net investment loss) 195,318 1,064,895 393,180 329,836 220,015 (14,395) Undistributed net realized gain (accumulated net realized loss) 7,711,489 (4,140,392) (107,335) (297,608) (470,158) (382,077) Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies (32,658,983) (10,808,365) 96,685 1,824,261 (1,436,381) (1,038,407) ------------- ------------- ------------ ------------ ------------ ------------ NET ASSETS $ 382,617,579 $ 83,218,621 $ 29,835,346 $ 20,580,245 $ 34,348,268 $ 13,506,187 ============= ============= ============ ============ ============ ============ iShares outstanding 7,650,000 1,650,000 600,000 400,000 800,000 300,000 ============= ============= ============ ============ ============ ============ Net asset value per iShare $ 50.02 $ 50.44 $ 49.73 $ 51.45 $ 42.94 $ 45.02 ============= ============= ============ ============ ============ ============
/1/ Securities on loan with market values of $18,564,931, $8,613,219, $1,066,615, $1,125,360, $1,446,505 and $404,022, respectively. See Note 5. SEE NOTES TO FINANCIAL STATEMENTS. FINANCIAL STATEMENTS 67 STATEMENTS OF ASSETS AND LIABILITIES (Unaudited) (Continued) iSHARES TRUST September 30, 2003
iSHARES S&P iSHARES NASDAQ ------------------------------------------------------------------- -------------- Global Telecommunications Latin Sector Europe 350 America 40 /TOPIX 150 Biotechnology Index Fund Index Fund Index Fund Index Fund Index Fund -------------------------------------------------------------------------------------------------------------- ASSETS Investments at cost $ 18,619,857 $ 670,157,347 $ 28,394,662 $ 23,315,267 $ 810,102,632 ------------------ --------------- -------------- -------------- -------------- Foreign currency, at cost $ 7,224 $ 499,687 $ 9,973 $ 20,205 $ - ------------------ --------------- -------------- -------------- -------------- Investments in securities, at value (including securities on loan/1/) (Note 1) $ 15,863,580 $ 600,307,033 $ 31,897,362 $ 25,142,839 $ 893,478,683 Foreign currency, at value 7,420 502,772 9,857 21,102 - Receivables: Investment securities sold - - - - 251,050 Dividends and interest 20,743 1,628,199 86,015 78,992 51,657 iShares sold - - 8,421 - - ------------------ --------------- -------------- -------------- -------------- Total Assets 15,891,743 602,438,004 32,001,655 25,242,933 893,781,390 ------------------ --------------- -------------- -------------- -------------- LIABILITIES Payables: Collateral for securities on loan (Note 5) 2,060,282 89,839,689 - 2,188,675 222,351,038 Advisory fees (Note 2) 15,098 482,607 22,941 18,250 544,972 ------------------ --------------- -------------- -------------- -------------- Total Liabilities 2,075,380 90,322,296 22,941 2,206,925 222,896,010 ------------------ --------------- -------------- -------------- -------------- NET ASSETS $ 13,816,363 $ 512,115,708 $ 31,978,714 $ 23,036,008 $ 670,885,380 ================== =============== ============== ============== ============== NET ASSETS CONSIST OF: Paid-in capital $ 17,244,832 $ 592,304,928 $ 28,657,679 $ 21,465,468 $ 629,566,427 Undistributed net investment income (accumulated net investment loss) 159,764 9,744,910 338,748 61,696 (1,476,743) Accumulated net realized loss (832,150) (20,127,986) (520,296) (319,702) (40,580,355) Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies (2,756,083) (69,806,144) 3,502,583 1,828,546 83,376,051 ------------------ --------------- -------------- -------------- -------------- NET ASSETS $ 13,816,363 $ 512,115,708 $ 31,978,714 $ 23,036,008 $ 670,885,380 ================== =============== ============== ============== ============== iShares outstanding 350,000 9,450,000 650,000 300,000 9,350,000 ================== =============== ============== ============== ============== Net asset value per iShare $ 39.48 $ 54.19 $ 49.20 $ 76.79 $ 71.75 ================== =============== ============== ============== ==============
/1/ Securities on loan with market values of $1,959,974, $85,382,975, $-, $2,079,929 and $213,719,144, respectively. See Note 5. SEE NOTES TO FINANCIAL STATEMENTS. 68 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS STATEMENTS OF OPERATIONS (Unaudited) iSHARES TRUST For the six months ended September 30, 2003
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/ $ 3,675,905 $ 911,356 $ 413,067 $ 291,646 $ 229,673 $ 16,781 Interest 1,609 1,152 125 109 170 36 Securities lending income 6,666 7,840 7,412 3,419 726 369 ------------ ------------- ------------ ------------ ------------ ------------ Total investment income 3,684,180 920,348 420,604 295,174 230,569 17,186 ------------ ------------- ------------ ------------ ------------ ------------ EXPENSES (Note 2) Advisory fees 405,079 159,365 75,384 63,233 96,896 31,144 Stock dividend tax expense - - - - - 351 ------------ ------------- ------------ ------------ ------------ ------------ Total expenses 405,079 159,365 75,384 63,233 96,896 31,495 ------------ ------------- ------------ ------------ ------------ ------------ Net investment income (loss) 3,279,101 760,983 345,220 231,941 133,673 (14,309) ------------ ------------- ------------ ------------ ------------ ------------ NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from: Investments (3,772,640) (1,463,317) (8,458) (21,389) (208,264) (215,633) In-kind redemptions 19,937,646 - - - - - Foreign currency transactions - 5,349 2,180 3,255 957 495 ------------ ------------- ------------ ------------ ------------ ------------ Net realized gain (loss) 16,165,006 (1,457,968) (6,278) (18,134) (207,307) (215,138) ------------ ------------- ------------ ------------ ------------ ------------ Net change in unrealized appreciation (depreciation) on: Investments 37,474,154 14,406,161 1,621,576 4,371,518 2,103,647 2,635,975 Translation of assets and liabilities in foreign currencies - 2,089 2,938 1,214 596 298 ------------ ------------- ------------ ------------ ------------ ------------ Net change in unrealized appreciation (depreciation) 37,474,154 14,408,250 1,624,514 4,372,732 2,104,243 2,636,273 ------------ ------------- ------------ ------------ ------------ ------------ Net realized and unrealized gain 53,639,160 12,950,282 1,618,236 4,354,598 1,896,936 2,421,135 ------------ ------------- ------------ ------------ ------------ ------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 56,918,261 $ 13,711,265 $ 1,963,456 $ 4,586,539 $ 2,030,609 $ 2,406,826 ============ ============= ============ ============ ============ ============
/1/ Net of foreign withholding tax of $--, $105,107, $46,865, $29,140, $13,494 and $954, respectively. SEE NOTES TO FINANCIAL STATEMENTS. FINANCIAL STATEMENTS 69 STATEMENTS OF OPERATIONS (Unaudited) (Continued) iSHARES TRUST For the six months ended September 30, 2003
iSHARES S&P iSHARES NASDAQ ---------------------------------------------------------------- -------------- Global Telecommunications Latin Sector Europe 350 America 40 /TOPIX 150 Biotechnology Index Fund Index Fund Index Fund Index Fund Index Fund ----------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME Dividends/1/ $ 162,720 $ 8,624,937 $ 319,015 $ 82,521 $ - Interest 67 987 192 47 646 Securities lending income 2,051 289,914 - 1,119 217,559 ------------------ -------------- ------------- ------------- -------------- Total investment income 164,838 8,915,838 319,207 83,687 218,205 ------------------ -------------- ------------- ------------- -------------- EXPENSES (Note 2) Advisory fees 41,306 1,370,133 52,019 38,485 1,694,948 ------------------ -------------- ------------- ------------- -------------- Total expenses 41,306 1,370,133 52,019 38,485 1,694,948 ------------------ -------------- ------------- ------------- -------------- Net investment income (loss) 123,532 7,545,705 267,188 45,202 (1,476,743) ------------------ -------------- ------------- ------------- -------------- NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from: Investments (52,261) (5,086,468) (220,782) (12,613) (35,904,735) In-kind redemptions - - - - 84,774,847 Foreign currency transactions 2,235 91,418 (7,379) 1,140 - ------------------ -------------- ------------- ------------- -------------- Net realized gain (loss) (50,026) (4,995,050) (228,161) (11,473) 48,870,112 ------------------ -------------- ------------- ------------- -------------- Net change in unrealized appreciation (depreciation) on: Investments 1,685,907 96,067,615 5,636,745 4,886,120 179,890,432 Translation of assets and liabilities in foreign currencies (2,551) 22,641 49 245 - ------------------ -------------- ------------- ------------- -------------- Net change in unrealized appreciation (depreciation) 1,683,356 96,090,256 5,636,794 4,886,365 179,890,432 ------------------ -------------- ------------- ------------- -------------- Net realized and unrealized gain 1,633,330 91,095,206 5,408,633 4,874,892 228,760,544 ------------------ -------------- ------------- ------------- -------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 1,756,862 $ 98,640,911 $ 5,675,821 $ 4,920,094 $ 227,283,801 ================== ============== ============= ============= ==============
/1/ Net of foreign withholding tax of $7,539, $1,591,097, $16,768, $9,169 and $-, respectively. SEE NOTES TO FINANCIAL STATEMENTS. 70 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS STATEMENTS OF CHANGES IN NET ASSETS iSHARES TRUST
iSHARES S&P 100 iSHARES S&P GLOBAL INDEX FUND 100 INDEX FUND ---------------------------------- ---------------------------------- For the six For the six months ended For the months ended For the September 30, 2003 year ended September 30, 2003 year ended (Unaudited) March 31, 2003 (Unaudited) March 31, 2003 --------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 3,279,101 $ 2,759,541 $ 760,983 $ 752,946 Net realized gain (loss) 16,165,006 (1,393,438) (1,457,968) (1,023,689) Net change in unrealized appreciation (depreciation) 37,474,154 (41,964,818) 14,408,250 (13,313,320) ------------------ -------------- ------------------ -------------- Net increase (decrease) in net assets resulting from operations 56,918,261 (40,598,715) 13,711,265 (13,584,063) ------------------ -------------- ------------------ -------------- DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income (3,306,553) (2,612,939) - (579,587) ------------------ -------------- ------------------ -------------- Total distributions to iShareholders (3,306,553) (2,612,939) - (579,587) ------------------ -------------- ------------------ -------------- iSHARES TRANSACTIONS: iShares sold 163,714,700 334,496,579 4,364,244 47,130,609 iShares redeemed (133,919,619) (107,777,106) - (13,490,190) ------------------ -------------- ------------------ -------------- Net increase in net assets from iShares transactions 29,795,081 226,719,473 4,364,244 33,640,419 ------------------ -------------- ------------------ -------------- INCREASE IN NET ASSETS 83,406,789 183,507,819 18,075,509 19,476,769 NET ASSETS: Beginning of period 299,210,790 115,702,971 65,143,112 45,666,343 ------------------ -------------- ------------------ -------------- End of period $ 382,617,579 $ 299,210,790 $ 83,218,621 $ 65,143,112 ================== ============== ================== ============== Undistributed net investment income included in net assets at end of period $ 195,318 $ 222,770 $ 1,064,895 $ 303,912 ================== ============== ================== ============== iSHARES ISSUED AND REDEEMED: iShares sold 3,350,000 7,350,000 100,000 1,050,000 iShares redeemed (2,650,000) (2,400,000) - (300,000) ------------------ -------------- ------------------ -------------- Net increase in iShares outstanding 700,000 4,950,000 100,000 750,000 ================== ============== ================== ============== iSHARES GLOBAL ENERGY SECTOR INDEX FUND ---------------------------------- For the six months ended For the September 30, 2003 year ended (Unaudited) March 31, 2003 --------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: OPERATIONS: Net investment income $ 345,220 $ 274,873 Net realized gain (loss) (6,278) (90,561) Net change in unrealized appreciation (depreciation) 1,624,514 (2,972,584) ------------------ -------------- Net increase (decrease) in net assets resulting from operations 1,963,456 (2,788,272) ------------------ -------------- DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income - (273,069) ------------------ -------------- Total distributions to iShareholders - (273,069) ------------------ -------------- iSHARES TRANSACTIONS: iShares sold 10,085,516 4,475,704 iShares redeemed - - ------------------ -------------- Net increase in net assets from iShares transactions 10,085,516 4,475,704 ------------------ -------------- INCREASE IN NET ASSETS 12,048,972 1,414,363 NET ASSETS: Beginning of period 17,786,374 16,372,011 ------------------ -------------- End of period $ 29,835,346 $ 17,786,374 ================== ============== Undistributed net investment income included in net assets at end of period $ 393,180 $ 47,960 ================== ============== iSHARES ISSUED AND REDEEMED: iShares sold 200,000 100,000 iShares redeemed - - ------------------ -------------- Net increase in iShares outstanding 200,000 100,000 ================== ==============
SEE NOTES TO FINANCIAL STATEMENTS. FINANCIAL STATEMENTS 71 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 six months ended For the months ended For the September 30, 2003 year ended September 30, 2003 year ended (Unaudited) March 31, 2003 (Unaudited) March 31, 2003 --------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income (loss) $ 231,941 $ 217,420 $ 133,673 $ 183,602 Net realized loss (18,134) (271,700) (207,307) (250,130) Net change in unrealized appreciation (depreciation) 4,372,732 (2,968,565) 2,104,243 (3,211,239) ------------------ -------------- ------------------ -------------- Net increase (decrease) in net assets resulting from operations 4,586,539 (3,022,845) 2,030,609 (3,277,767) ------------------ -------------- ------------------ -------------- DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income - (171,448) - (135,321) ------------------ -------------- ------------------ -------------- Total distributions to iShareholders - (171,448) - (135,321) ------------------ -------------- ------------------ -------------- iSHARES TRANSACTIONS: iShares sold - 8,524,646 6,443,983 12,114,681 ------------------ -------------- ------------------ -------------- Net increase in net assets from iShares transactions - 8,524,646 6,443,983 12,114,681 ------------------ -------------- ------------------ -------------- INCREASE (DECREASE) IN NET ASSETS 4,586,539 5,330,353 8,474,592 8,701,593 NET ASSETS: Beginning of period 15,993,706 10,663,353 25,873,676 17,172,083 ------------------ -------------- ------------------ -------------- End of period $ 20,580,245 $ 15,993,706 $ 34,348,268 $ 25,873,676 ================== ============== ================== ============== Undistributed net investment income (accumulated net investment loss) included in net assets at end of period $ 329,836 $ 97,895 $ 220,015 $ 86,342 ================== ============== ================== ============== iSHARES ISSUED AND REDEEMED: iShares sold - 200,000 150,000 300,000 ------------------ -------------- ------------------ -------------- Net increase in iShares outstanding - 200,000 150,000 300,000 ================== ============== ================== ============== iSHARES S&P GLOBAL TECHNOLOGY SECTOR INDEX FUND ---------------------------------- For the six months ended For the September 30, 2003 year ended (Unaudited) March 31, 2003 --------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income (loss) $ (14,309) $ (9,818) Net realized loss (215,138) (140,642) Net change in unrealized appreciation (depreciation) 2,636,273 (2,776,464) ------------------ -------------- Net increase (decrease) in net assets resulting from operations 2,406,826 (2,926,924) ------------------ -------------- DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income - - ------------------ -------------- Total distributions to iShareholders - - ------------------ -------------- iSHARES TRANSACTIONS: iShares sold 4,407,501 1,832,339 ------------------ -------------- Net increase in net assets from iShares transactions 4,407,501 1,832,339 ------------------ -------------- INCREASE (DECREASE) IN NET ASSETS 6,814,327 (1,094,585) NET ASSETS: Beginning of period 6,691,860 7,786,445 ------------------ -------------- End of period $ 13,506,187 $ 6,691,860 ================== ============== Undistributed net investment income (accumulated net investment loss) included in net assets at end of period $ (14,395) $ (86) ================== ============== iSHARES ISSUED AND REDEEMED: iShares sold 100,000 50,000 ------------------ -------------- Net increase in iShares outstanding 100,000 50,000 ================== ==============
SEE NOTES TO FINANCIAL STATEMENTS. 72 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS 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 six months ended For the months ended For the September 30, 2003 year ended September 30, 2003 year ended (Unaudited) March 31, 2003 (Unaudited) March 31, 2003 --------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 123,532 $ 193,589 $ 7,545,705 $ 10,622,285 Net realized loss (50,026) (756,255) (4,995,050) (41,121,057) Net change in unrealized appreciation (depreciation) 1,683,356 (2,676,886) 96,090,256 (142,335,698) ------------------ -------------- ------------------ -------------- Net increase (decrease) in net assets resulting from operations 1,756,862 (3,239,552) 98,640,911 (172,834,470) ------------------ -------------- ------------------ -------------- DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income - (191,936) - (9,608,612) ------------------ -------------- ------------------ -------------- Total distributions to iShareholders - (191,936) - (9,608,612) ------------------ -------------- ------------------ -------------- iSHARES TRANSACTIONS: iShares sold 2,039,540 - 38,288,072 229,906,285 iShares redeemed - - - (242,033,817) ------------------ -------------- ------------------ -------------- Net increase (decrease) in net assets from iShares transactions 2,039,540 - 38,288,072 (12,127,532) ------------------ -------------- ------------------ -------------- INCREASE (DECREASE) IN NET ASSETS 3,796,402 (3,431,488) 136,928,983 (194,570,614) NET ASSETS: Beginning of period 10,019,961 13,451,449 375,186,725 569,757,339 ------------------ -------------- ------------------ -------------- End of period $ 13,816,363 $ 10,019,961 $ 512,115,708 $ 375,186,725 ================== ============== ================== ============== Undistributed net investment income included in net assets at end of period $ 159,764 $ 36,232 $ 9,744,910 $ 2,199,205 ================== ============== ================== ============== iSHARES ISSUED AND REDEEMED: iShares sold 50,000 - 700,000 4,450,000 iShares redeemed - - - (5,350,000) ------------------ -------------- ------------------ -------------- Net increase (decrease) in iShares outstanding 50,000 - 700,000 (900,000) ================== ============== ================== ============== iSHARES S&P LATIN AMERICA 40 INDEX FUND ---------------------------------- For the six months ended For the September 30, 2003 year ended (Unaudited) March 31, 2003 --------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 267,188 $ 209,588 Net realized loss (228,161) (118,511) Net change in unrealized appreciation (depreciation) 5,636,794 (3,750,062) ------------------ -------------- Net increase (decrease) in net assets resulting from operations 5,675,821 (3,658,985) ------------------ -------------- DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income - (184,159) ------------------ -------------- Total distributions to iShareholders - (184,159) ------------------ -------------- iSHARES TRANSACTIONS: iShares sold 17,407,781 7,085,754 iShares redeemed - (2,220,995) ------------------ -------------- Net increase (decrease) in net assets from iShares transactions 17,407,781 4,864,759 ------------------ -------------- INCREASE (DECREASE) IN NET ASSETS 23,083,602 1,021,615 NET ASSETS: Beginning of period 8,895,112 7,873,497 ------------------ -------------- End of period $ 31,978,714 $ 8,895,112 ================== ============== Undistributed net investment income included in net assets at end of period $ 338,748 $ 71,560 ================== ============== iSHARES ISSUED AND REDEEMED: iShares sold 400,000 150,000 iShares redeemed - (50,000) ------------------ -------------- Net increase (decrease) in iShares outstanding 400,000 100,000 ================== ==============
SEE NOTES TO FINANCIAL STATEMENTS. FINANCIAL STATEMENTS 73 STATEMENTS OF CHANGES IN NET ASSETS (Continued) iSHARES TRUST
iSHARES NASDAQ iSHARES S&P/TOPIX BIOTECHNOLOGY 150 INDEX FUND INDEX FUND ---------------------------------- --------------------------------- For the six For the six months ended For the months ended For the September 30, 2003 year ended September 30, 2003 year ended (Unaudited) March 31, 2003 (Unaudited) March 31, 2003 -------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income (loss) $ 45,202 $ 60,188 $ (1,476,743) $ (1,787,219) Net realized gain (loss) (11,473) (4,920,264) 48,870,112 (101,461,787) Net change in unrealized appreciation (depreciation) 4,886,365 (1,373,166) 179,890,432 (40,953,420) ------------------ -------------- ------------------ -------------- Net increase (decrease) in net assets resulting from operations 4,920,094 (6,233,242) 227,283,801 (144,202,426) ------------------ -------------- ------------------ -------------- DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income - (104,906) - - ------------------ -------------- ------------------ -------------- Total distributions to iShareholders - (104,906) - - ------------------ -------------- ------------------ -------------- iSHARES TRANSACTIONS: iShares sold 9,534,797 - 159,760,380 654,289,219 iShares redeemed - (18,197,922) (250,090,599) (265,962,047) ------------------ -------------- ------------------ -------------- Net increase (decrease) in net assets from iShares transactions 9,534,797 (18,197,922) (90,330,219) 388,327,172 ------------------ -------------- ------------------ -------------- INCREASE (DECREASE) IN NET ASSETS 14,454,891 (24,536,070) 136,953,582 244,124,746 NET ASSETS: Beginning of period 8,581,117 33,117,187 533,931,798 289,807,052 ------------------ -------------- ------------------ -------------- End of period $ 23,036,008 $ 8,581,117 $ 670,885,380 $ 533,931,798 ================== ============== ================== ============== Undistributed net investment income (accumulated net investment loss) included in net assets at end of period $ 61,696 $ 16,494 $ (1,476,743) $ - ================== ============== ================== ============== iSHARES ISSUED AND REDEEMED: iShares sold 150,000 - 2,450,000 12,100,000 iShares redeemed - (300,000) (3,550,000) (5,400,000) ------------------ -------------- ------------------ -------------- Net increase (decrease) in iShares outstanding 150,000 (300,000) (1,100,000) 6,700,000 ================== ============== ================== ==============
SEE NOTES TO FINANCIAL STATEMENTS. 74 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS FINANCIAL HIGHLIGHTS iSHARES TRUST (For a share outstanding throughout each period)
iSHARES S&P 100 INDEX FUND ------------------------------------------------------------------- Six months Period from ended Oct. 23, 2000/1/ Sep. 30, 2003 Year ended Year ended to (Unaudited) Mar. 31, 2003 Mar. 31, 2002 Mar. 31, 2001 ------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 43.05 $ 57.85 $ 59.17 $ 73.44 ------------- ------------- ------------- ---------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.40 0.66 0.61 0.31 Net realized and unrealized gain (loss) 6.98 (14.79) (1.34) (14.28) ------------- ------------- ------------- ---------------- Total from investment operations 7.38 (14.13) (0.73) (13.97) ------------- ------------- ------------- ---------------- Less distributions from: Net investment income (0.41) (0.67) (0.59) (0.30) ------------- ------------- ------------- ---------------- Total distributions (0.41) (0.67) (0.59) (0.30) ------------- ------------- ------------- ---------------- Net asset value, end of period $ 50.02 $ 43.05 $ 57.85 $ 59.17 ============= ============= ============= ================ Total return 17.12%/2/ (24.49)% (1.23)% (19.07)%/2/ ============= ============= ============= ================ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s) $ 382,618 $ 299,211 $ 115,703 $ 88,762 Ratio of expenses to average net assets/3/ 0.20% 0.20% 0.20% 0.20% Ratio of net investment income to average net assets/3/ 1.62% 1.63% 1.12% 1.03% Portfolio turnover rate/4/ 2% 4% 13% 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. FINANCIAL HIGHLIGHTS 75 FINANCIAL HIGHLIGHTS (Continued) iSHARES TRUST (For a share outstanding throughout each period)
iSHARES S&P GLOBAL 100 INDEX FUND ------------------------------------------------------------------- Six months Period from ended Dec. 5, 2000/1/ Sep. 30, 2003 Year ended Year ended to (Unaudited) Mar. 31, 2003 Mar. 31, 2002 Mar. 31, 2001 ------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 42.03 $ 57.08 $ 60.83 $ 72.50 ------------- ------------- ------------- ---------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.45 0.59 0.65 0.18 Net realized and unrealized gain (loss) 7.96 (15.09) (3.87) (11.73) ------------- ------------- ------------- ---------------- Total from investment operations 8.41 (14.50) (3.22) (11.55) ------------- ------------- ------------- ---------------- LESS DISTRIBUTIONS FROM: Net investment income - (0.55) (0.53) (0.12) ------------- ------------- ------------- ---------------- Total distributions - (0.55) (0.53) (0.12) ------------- ------------- ------------- ---------------- Net asset value, end of period $ 50.44 $ 42.03 $ 57.08 $ 60.83 ============= ============= ============= ================ Total return 20.01%/2/ (25.46)% (5.32)% (15.94)%/2/ ============= ============= ============= ================ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s) $ 83,219 $ 65,143 $ 45,666 $ 103,407 Ratio of expenses to average net assets/3/ 0.40% 0.40% 0.40% 0.40% Ratio of net investment income to average net assets/3/ 1.91% 1.60% 1.08% 0.88% Portfolio turnover rate/4/ 3% 5% 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. 76 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS FINANCIAL HIGHLIGHTS (Continued) iSHARES TRUST (For a share outstanding throughout each period)
iSHARES S&P GLOBAL ENERGY SECTOR INDEX FUND -------------------------------------------------- Six months Period from ended Nov. 12, 2001/1/ Sep. 30, 2003 Year ended to (Unaudited) Mar. 31, 2003 Mar. 31, 2002 --------------------------------------------------------------------------------------- Net asset value, beginning of period $ 44.47 $ 54.57 $ 49.64 ------------- ------------- ---------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.54 0.88 0.22 Net realized and unrealized gain (loss) 4.72 (10.07) 4.78 ------------- ------------- ---------------- Total from investment operations 5.26 (9.19) 5.00 ------------- ------------- ---------------- LESS DISTRIBUTIONS FROM: Net investment income - (0.91) (0.07) ------------- ------------- ---------------- Total distributions - (0.91) (0.07) ------------- ------------- ---------------- Net asset value, end of period $ 49.73 $ 44.47 $ 54.57 ============= ============= ================ Total return 11.83%/2/ (16.91)% 10.10%/2/ ============= ============= ================ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s) $ 29,835 $ 17,786 $ 16,372 Ratio of expenses to average net assets/3/ 0.65% 0.65% 0.65% Ratio of net investment income to average net assets/3/ 2.98% 1.89% 1.17% Portfolio turnover rate/4/ 0%/5/ 9% 5% iSHARES S&P GLOBAL FINANCIALS SECTOR INDEX FUND -------------------------------------------------- Six months Period from ended Nov. 12, 2001/1/ Sep. 30, 2003 Year ended to (Unaudited) Mar. 31, 2003 Mar. 31, 2002 --------------------------------------------------------------------------------------- Net asset value, beginning of period $ 39.98 $ 53.32 $ 51.00 ------------- ------------- ---------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.58 0.56 0.29 Net realized and unrealized gain (loss) 10.89 (13.33) 2.07 ------------- ------------- ---------------- Total from investment operations 11.47 (12.77) 2.36 ------------- ------------- ---------------- LESS DISTRIBUTIONS FROM: Net investment income - (0.57) (0.04) ------------- ------------- ---------------- Total distributions - (0.57) (0.04) ------------- ------------- ---------------- Net asset value, end of period $ 51.45 $ 39.98 $ 53.32 ============= ============= ================ Total return 28.69%/2/ (24.03)% 4.64%/2/ ============= ============= ================ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s) $ 20,580 $ 15,994 $ 10,663 Ratio of expenses to average net assets/3/ 0.65% 0.65% 0.65% Ratio of net investment income to average net assets/3/ 2.38% 2.04% 1.44% Portfolio turnover rate/4/ 4% 8% 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. /5/ Rounds to less than 1%. SEE NOTES TO FINANCIAL STATEMENTS. FINANCIAL HIGHLIGHTS 77 FINANCIAL HIGHLIGHTS (Continued) iSHARES TRUST (For a share outstanding throughout each period)
iSHARES S&P GLOBAL HEALTHCARE SECTOR INDEX FUND -------------------------------------------------- Six months Period from ended Nov. 13, 2001/1/ Sep. 30, 2003 Year ended to (Unaudited) Mar. 31, 2003 Mar. 31, 2002 --------------------------------------------------------------------------------------- Net asset value, beginning of period $ 39.81 $ 49.06 $ 49.53 ------------- ------------- ---------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) 0.14 0.28 0.11 Net realized and unrealized gain (loss) 2.99 (9.28) (0.57) ------------- ------------- ---------------- Total from investment operations 3.13 (9.00) (0.46) ------------- ------------- ---------------- LESS DISTRIBUTIONS FROM: Net investment income - (0.25) (0.01) ------------- ------------- ---------------- Total distributions - (0.25) (0.01) ------------- ------------- ---------------- Net asset value, end of period $ 42.94 $ 39.81 $ 49.06 ============= ============= ================ Total return 7.86%/2/ (18.36)% (0.92)%/2/ ============= ============= ================ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s) $ 34,348 $ 25,874 $ 17,172 Ratio of expenses to average net assets/3/ 0.65% 0.65% 0.65% Ratio of expenses to average net assets exclusive of foreign taxes on stock dividends/3/ - - - Ratio of net investment income (loss) to average net assets/3/ 0.90% 0.96% 0.62% Portfolio turnover rate/4/ 1% 4% 1% iSHARES S&P GLOBAL TECHNOLOGY SECTOR INDEX FUND -------------------------------------------------- Six months Period from ended Nov. 12, 2001/1/ Sep. 30, 2003 Year ended to (Unaudited) Mar. 31, 2003 Mar. 31, 2002 --------------------------------------------------------------------------------------- Net asset value, beginning of period $ 33.46 $ 51.91 $ 53.19 ------------- ------------- ---------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (0.05) (0.05) (0.19) Net realized and unrealized gain (loss) 11.61 (18.40) (1.09) ------------- ------------- ---------------- Total from investment operations 11.56 (18.45) (1.28) ------------- ------------- ---------------- LESS DISTRIBUTIONS FROM: Net investment income - - - ------------- ------------- ---------------- Total distributions - - - ------------- ------------- ---------------- Net asset value, end of period $ 45.02 $ 33.46 $ 51.91 ============= ============= ================ Total return 34.55%/2/ (35.54)% (2.40)%/2/ ============= ============= ================ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s) $ 13,506 $ 6,692 $ 7,786 Ratio of expenses to average net assets/3/ 0.66% 0.66% 0.65% Ratio of expenses to average net assets exclusive of foreign taxes on stock dividends/3/ 0.65% 0.65% 0.65% Ratio of net investment income (loss) to average net assets/3/ (0.30)% (0.16)% (0.44)% Portfolio turnover rate/4/ 5% 4% 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. 78 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS FINANCIAL HIGHLIGHTS (Continued) iSHARES TRUST (For a share outstanding throughout each period)
iSHARES S&P GLOBAL TELECOMMUNICATIONS SECTOR INDEX FUND -------------------------------------------------- Six months Period from ended Nov. 12, 2001/1/ Sep. 30, 2003 Year ended to (Unaudited) Mar. 31, 2003 Mar. 31, 2002 --------------------------------------------------------------------------------------- Net asset value, beginning of period $ 33.40 $ 44.84 $ 50.68 ------------- ------------- ---------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.34 0.65 0.11 Net realized and unrealized gain (loss) 5.74 (11.45) (5.93) ------------- ------------- ---------------- Total from investment operations 6.08 (10.80) (5.82) ------------- ------------- ---------------- LESS DISTRIBUTIONS FROM: Net investment income - (0.64) (0.02) ------------- ------------- ---------------- Total distributions - (0.64) (0.02) ------------- ------------- ---------------- Net asset value, end of period $ 39.48 $ 33.40 $ 44.84 ============= ============= ================ Total return 18.20%/2/ (24.24)% (11.50)%/2/ ============= ============= ================ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s) $ 13,816 $ 10,020 $ 13,451 Ratio of expenses to average net assets/3/ 0.65% 0.65% 0.65% Ratio of net investment income to average net assets/3/ 1.94% 1.78% 0.61% Portfolio turnover rate/4/ 4% 9% 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 79 FINANCIAL HIGHLIGHTS (Continued) iSHARES TRUST (For a share outstanding throughout each period)
iSHARES S&P EUROPE 350 INDEX FUND ------------------------------------------------------------------ Six months Period from ended Jul. 25, 2000/1/ Sep. 30, 2003 Year ended Year ended to (Unaudited) Mar. 31, 2003 Mar. 31, 2002 Mar. 31, 2001 ------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 42.88 $ 59.04 $ 63.13 $ 79.32 ------------- ------------- ------------- ---------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.78 1.18 0.83 0.38 Net realized and unrealized gain (loss) 10.53 (16.28) (4.08) (16.30) ------------- ------------- ------------- ---------------- Total from investment operations 11.31 (15.10) (3.25) (15.92) ------------- ------------- ------------- ---------------- LESS DISTRIBUTIONS FROM: Net investment income - (1.06) (0.84) (0.27) ------------- ------------- ------------- ---------------- Total distributions - (1.06) (0.84) (0.27) ------------- ------------- ------------- ---------------- Net asset value, end of period $ 54.19 $ 42.88 $ 59.04 $ 63.13 ============= ============= ============= ================ Total return 26.38%/2/ (25.73)% (5.16)% (20.10)%/2/ ============= ============= ============= ================ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s) $ 512,116 $ 375,187 $ 569,757 $ 154,656 Ratio of expenses to average net assets/3/ 0.60% 0.60% 0.60% 0.60% Ratio of net investment income to average net assets/3/ 3.30% 2.11% 1.49% 1.12% Portfolio turnover rate/4/ 2% 6% 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. 80 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS FINANCIAL HIGHLIGHTS (Continued) iSHARES TRUST (For a share outstanding throughout each period)
iSHARES S&P LATIN AMERICA 40 INDEX FUND -------------------------------------------------- Six months Period from ended Oct. 25, 2001/1/ Sep. 30, 2003 Year ended to (Unaudited) Mar. 31, 2003 Mar. 31, 2002 ------------------------------------------------------------------------------ Net asset value, beginning of period $ 35.58 $ 52.49 $ 41.51 ------------- ------------- ---------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.23 0.89 0.61 Net realized and unrealized gain (loss) 13.39 (16.88) 10.64 ------------- ------------- ---------------- Total from investment operations 13.62 (15.99) 11.25 ------------- ------------- ---------------- LESS DISTRIBUTIONS FROM: Net investment income - (0.92) (0.27) ------------- ------------- ---------------- Total distributions - (0.92) (0.27) ------------- ------------- ---------------- Net asset value, end of period $ 49.20 $ 35.58 $ 52.49 ============= ============= ================ Total return 38.28%/2/ (30.54)% 27.16%/2/ ============= ============= ================ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s) $ 31,979 $ 8,895 $ 7,873 Ratio of expenses to average net assets/3/ 0.50% 0.50% 0.50% Ratio of net investment income to average net assets/3/ 2.57% 2.42% 2.94% Portfolio turnover rate/4/ 11% 9% 2% iSHARES S&P/TOPIX 150 INDEX FUND -------------------------------------------------- Six months Period from ended Oct. 23, 2001/1/ Sep. 30, 2003 Year ended to (Unaudited) Mar. 31, 2003 Mar. 31, 2002 ------------------------------------------------------------------------------ Net asset value, beginning of period $ 57.21 $ 73.59 $ 77.39 ------------- ------------- ---------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.10 0.60 0.10 Net realized and unrealized gain (loss) 19.48 (16.28) (3.90) ------------- ------------- ---------------- Total from investment operations 19.58 (15.68) (3.80) ------------- ------------- ---------------- LESS DISTRIBUTIONS FROM: Net investment income - (0.70) - ------------- ------------- ---------------- Total distributions - (0.70) - ------------- ------------- ---------------- Net asset value, end of period $ 76.79 $ 57.21 $ 73.59 ============= ============= ================ Total return 34.22%/2/ (21.36)% (4.91)%/2/ ============= ============= ================ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s) $ 23,036 $ 8,581 $ 33,117 Ratio of expenses to average net assets/3/ 0.50% 0.50% 0.50% Ratio of net investment income to average net assets/3/ 0.59% 0.26% 0.32% Portfolio turnover rate/4/ 4% 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. FINANCIAL HIGHLIGHTS 81 FINANCIAL HIGHLIGHTS (Continued) iSHARES TRUST (For a share outstanding throughout each period)
iSHARES NASDAQ BIOTECHNOLOGY INDEX FUND ------------------------------------------------------------------ Six months Period from ended Feb. 5, 2001/1/ Sep. 30, 2003 Year ended Year ended to (Unaudited) Mar. 31, 2003 Mar. 31, 2002 Mar. 31, 2001 ------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 51.09 $ 77.28 $ 76.81 $ 99.66 ------------- ------------- ------------- ---------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (0.16) (0.17) (0.17) (0.05) Net realized and unrealized gain (loss) 20.82 (26.02) 0.64 (22.80) ------------- ------------- ------------- ---------------- Total from investment operations 20.66 (26.19) 0.47 (22.85) ------------- ------------- ------------- ---------------- Net asset value, end of period $ 71.75 $ 51.09 $ 77.28 $ 76.81 ============= ============= ============= ================ Total return 40.44%/2/ (33.89)% 0.61% (22.93)%/2/ ============= ============= ============= ================ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s) $ 670,885 $ 533,932 $ 289,807 $ 99,847 Ratio of expenses to average net assets/3/ 0.50% 0.50% 0.50% 0.50% Ratio of net investment income to average net assets/3/ (0.44)% (0.43)% (0.46)% (0.50)% Portfolio turnover rate/4/ 11% 48% 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. 82 2003 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 statutory trust pursuant to an Agreement and Declaration of Trust dated December 16, 1999. As of September 30, 2003, the Trust offered 57 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 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 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 a 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. Under the Funds' organizational documents, their officers and trustees are indemnified against certain liabilities that may arise out of the performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds' maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote. 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. Beginning April 14, 2003, securities for which the primary market is the National Association of Securities Dealers Automated Quotations National Market System ("NASDAQ") are valued at the NASDAQ Official Closing Price. Securities not listed on an NOTES TO THE FINANCIAL STATEMENTS 83 NOTES TO THE FINANCIAL STATEMENTS (Unaudited) (Continued) iSHARES TRUST 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. Short-term investments 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. 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. FOREIGN TAXES Taiwan levies a tax at a rate of up to 20%, based on the par value of stock dividends received by the iShares S&P Global Technology Sector Index Fund. This tax was paid by the Fund and is disclosed in its Statement of Operations. 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, 2003, 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 $ 222,770 $ - $ 222,770 S&P Global 100 303,912 - 303,912 S&P Global Energy Sector 47,960 - 47,960 S&P Global Financials Sector 100,130 - 100,130 S&P Global Healthcare Sector 86,342 - 86,342 S&P Global Telecommunications Sector 36,232 - 36,232 S&P Europe 350 2,608,281 - 2,608,281 S&P Latin America 40 71,560 - 71,560 S&P/TOPIX 150 16,494 - 16,494
84 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS NOTES TO THE FINANCIAL STATEMENTS (Unaudited) (Continued) iSHARES TRUST For the year ended March 31, 2003, the tax characterization of distributions paid for each Fund 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 the 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, 2003. The Funds had tax basis net capital loss carryforwards at March 31, 2003, the tax year-end of the Funds, as follows:
------------------------------------------------------------------------------ EXPIRING EXPIRING EXPIRING iSHARES INDEX FUND 2009 2010 2011 TOTAL ------------------------------------------------------------------------------ S&P 100 $ - $ 2,240,710 $ 3,096,741 $ 5,337,451 S&P Global 100 - 329,587 1,022,865 1,352,452 S&P Global Energy Sector - - 37,853 37,853 S&P Global Financials Sector - - 148,034 148,034 S&P Global Healthcare Sector - - 147,652 147,652 S&P Global Technology Sector - - 114,472 114,472 S&P Global Telecommunications Sector - - 505,504 505,504 S&P Europe 350 3,295 904,300 2,116,359 3,023,954 S&P Latin America 40 - - 29,834 29,834 S&P/TOPIX 150 - - 276,198 276,198 Nasdaq Biotechnology - 2,280,865 29,163,198 31,444,063
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, 2003, certain Funds realized net capital gains or losses resulting from in-kind redemptions of large blocks of 50,000 or more iShares or multiples thereof ("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. 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, 2003 are disclosed in the Funds' Statements of Operations. REPURCHASE AGREEMENTS Each Fund may enter into repurchase agreements with banks and securities dealers. These transactions involve the purchase of securities with a simultaneous commitment to resell the securities to the bank or the dealer at an agreed-upon date and price. A repurchase agreement is accounted for as a loan by the Fund to the seller, collateralized by securities, which are delivered to the Funds' custodian or to an agent bank under a tri-party agreement. The securities are marked-to-market daily and additional securities are acquired as needed, to ensure that their value equals or exceeds the repurchase price plus accrued interest. The Funds did not enter into any repurchase agreements at September 30, 2003; however, cash collateral for securities on loan was invested in repurchase agreements at September 30, 2003. For further information, see Note 5, below. NOTES TO THE FINANCIAL STATEMENTS 85 NOTES TO THE FINANCIAL STATEMENTS (Unaudited) (Continued) iSHARES TRUST 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 -------------------------------------- --------------------------------------- S&P 100 0.20% S&P Global Telecommunications S&P Global 100 0.40 Sector 0.65% S&P Global Energy Sector 0.65 S&P Europe 350 0.60 S&P Global Financials Sector 0.65 S&P Latin America 40 0.50 S&P Global Healthcare Sector 0.65 S&P/TOPIX 150 0.50 S&P Global Technology Sector 0.65 Nasdaq Biotechnology 0.50 Investors Bank & Trust Company ("Investors Bank") serves as administrator, custodian and transfer agent for the Trust. 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. Barclays Global Investors, N.A. ("BGI") serves as securities lending agent for the Trust. BGI is an affiliate of BGFA, the Funds' investment advisor. As securities lending agent, BGI receives a fee based on a share of the income earned on investment of the cash collateral received for the loan of securities. For the six months ended September 30, 2003, BGI earned securities lending agent fees as follows: ------------------------------------------------------------ SECURITIES LENDING iSHARES INDEX FUND AGENT FEES ------------------------------------------------------------ S&P 100 $ 6,714 S&P Global 100 8,031 S&P Global Energy Sector 7,418 S&P Global Financials Sector 3,421 S&P Global Healthcare Sector 729 S&P Global Technology Sector 353 S&P Global Telecommunications Sector 2,067 S&P Europe 350 289,759 S&P/TOPIX 150 1,130 Nasdaq Biotechnology 220,151 86 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS NOTES TO THE FINANCIAL STATEMENTS (Unaudited) (Continued) iSHARES TRUST 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. Barclays Global Investors Services ("BGIS"), a subsidiary of BGI, may serve as a broker-dealer for the Funds. For the six months ended September 30, 2003, BGIS did not receive any brokerage commissions from the Funds. As defined under the Section 2(a)/3/ of the 1940 Act, certain broker-dealers may be deemed to be an "affiliated person" of a Fund by virtue of being a DTC Participant that owned of record 5% or more of the outstanding shares of such Fund. The broker-dealers identified to be an "affiliated person" of a Fund (other than BGIS) did not execute any portfolio transactions with the Funds during the six months ended September 30, 2003. 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") and Prime Money Market Fund ("PMMF") of Barclays Global Investors Funds. The IMMF and PMMF are feeder funds in a master/feeder fund structure that invests substantially all of its assets in the Money Market Master Portfolio and Prime Money Market Master Portfolio, respectively, which are managed by BGFA, the Funds' investment advisor. The IMMF and PMMF are open-end money market funds available only to institutional investors, including other investment companies managed by BGFA. The IMMF and PMMF seek a high level of income consistent with liquidity and the preservation of capital. While the IMMF and PMMF do not directly charge an advisory fee, the master portfolios in which they invest do charge an advisory fee. Income distributions from the IMMF and PMMF 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, 2003. Cross trading is the buying or selling of portfolio securities between funds to which BGFA (or an affiliate) serves as investment advisor. The Board reviewed all such transactions executed during the second quarter of 2003 and concluded that they were in compliance with the requirements and restrictions set forth by Rule 17a-7. The Board is scheduled at its next meeting to review all such transactions executed during the third quarter of 2003. 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 $711,126, $283,907 and $6,009,933, respectively, as of September 30, 2003. Barclays PLC is an affiliate of BGFA, the Funds' investment advisor. As of September 30, 2003, certain trustees and officers of the Trust are also employees of BGFA and its affiliates or employees of Investors Bank. NOTES TO THE FINANCIAL STATEMENTS 87 NOTES TO THE FINANCIAL STATEMENTS (Unaudited) (Continued) iSHARES TRUST 3. INVESTMENT PORTFOLIO TRANSACTIONS Purchases and sales of investments (excluding in-kind transactions and short-term securities) for the six months ended September 30, 2003 were as follows: --------------------------------------------------------------------- iSHARES INDEX FUND PURCHASES SALES --------------------------------------------------------------------- S&P 100 $ 7,494,591 $ 7,497,582 S&P Global 100 3,079,174 2,314,607 S&P Global Energy Sector 303,227 36,192 S&P Global Financials Sector 1,008,310 754,700 S&P Global Healthcare Sector 588,608 438,568 S&P Global Technology Sector 443,360 436,161 S&P Global Telecommunications Sector 777,591 533,838 S&P Europe 350 18,067,541 9,083,709 S&P Latin America 40 2,380,982 2,230,843 S&P/TOPIX 150 666,037 568,953 Nasdaq Biotechnology 72,092,235 73,460,666 In-kind transactions for the six months ended September 30, 2003 were as follows: --------------------------------------------------------------------- IN-KIND IN-KIND iSHARES INDEX FUND PURCHASES SALES --------------------------------------------------------------------- S&P 100 $ 163,503,650 $ 133,744,050 S&P Global 100 4,333,721 - S&P Global Energy Sector 10,031,613 - S&P Global Healthcare Sector 6,423,549 - S&P Global Technology Sector 4,403,566 - S&P Global Telecommunications Sector 2,029,492 - S&P Europe 350 38,024,309 - S&P Latin America 40 17,328,091 - S&P/TOPIX 150 9,461,871 - Nasdaq Biotechnology 159,833,955 250,220,056 88 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS NOTES TO THE FINANCIAL STATEMENTS (Unaudited) (Continued) iSHARES TRUST At September 30, 2003, the aggregate unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:
---------------------------------------------------------------------------------------------- NET UNREALIZED TAX UNREALIZED UNREALIZED APPRECIATION iSHARES INDEX FUND COST APPRECIATION DEPRECIATION (DEPRECIATION) ---------------------------------------------------------------------------------------------- S&P 100 $ 439,010,852 $ 2,043,628 $ (39,570,237) $ (37,526,609) S&P Global 100 104,411,819 941,516 (13,367,855) (12,426,339) S&P Global Energy Sector 30,798,538 1,252,395 (1,184,750) 67,645 S&P Global Financials Sector 19,904,057 2,366,653 (582,695) 1,783,958 S&P Global Healthcare Sector 37,322,359 1,495,760 (3,015,185) (1,519,425) S&P Global Technology Sector 14,988,192 429,936 (1,492,334) (1,062,398) S&P Global Telecommunications Sector 18,686,248 440,089 (3,262,757) (2,822,668) S&P Europe 350 678,573,098 6,745,189 (85,011,254) (78,266,065) S&P Latin America 40 28,791,099 3,486,287 (380,024) 3,106,263 S&P/TOPIX 150 23,342,772 2,356,783 (556,716) 1,800,067 Nasdaq Biotechnology 868,101,694 61,439,525 (36,062,536) 25,376,989
4. iSHARES TRANSACTIONS At September 30, 2003, 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 a Fund of securities lending are that the borrower may not provide additional collateral when required, or return the securities when due. As of September 30, 2003, certain of the Funds had loaned securities which were collateralized by cash. The cash collateral received was invested in a joint account which invests in securities with remaining maturities of 397 days or less and money market mutual funds. Income from the joint account is allocated daily to each Fund, based on each Fund's portion of the total cash collateral received. The market value of the securities on loan at September 30, 2003 and the value of the related collateral are disclosed in the Statements of Assets and Liabilities. NOTES TO THE FINANCIAL STATEMENTS 89 THE iSHARES FAMILY OF FUNDS The following is a list of iShares Funds being offered as of November 28, 2003, 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. The prospectus 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 Transportation Average Index Fund (IYT) iShares Dow Jones U.S. Basic Materials Sector Index Fund (IYM) iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund (IYC) iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund (IYK) iShares Dow Jones U.S. Energy Sector Index Fund (IYE) iShares Dow Jones U.S. Financial Sector Index Fund (IYF) iShares Dow Jones U.S. 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. 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) SPECIALTY iShares Dow Jones Select Dividend Index Fund (DVY) FIXED INCOME iShares GS $ InvesTop(TM) Corporate Bond Fund (LQD) 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 Lehman Aggregate Bond Fund (AGG) 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) iShares MSCI Emerging Markets Index Fund (EEM) 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) INTERNATIONAL/EMERGING COUNTRY iShares MSCI Brazil Index Fund (EWZ) iShares MSCI Malaysia Index Fund (EWM) iShares MSCI Mexico Index Fund (EWW) iShares MSCI South Africa Index Fund (EZA) 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) This advertising section does not constitute part of the 2003 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)" and "Goldman Sachs(R)" are trademarks of Goldman, Sachs & Co. 90 THE iSHARES FAMILY OF FUNDS 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., a wholly owned subsidiary of Barclays Bank PLC, none of which is affiliated with SEI. 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)2003 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 Fund's shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus. iSHARES(R) Industrial strength investment tools from BARCLAYS GLOBAL INVESTORS 1 800 iSHARES (1 800 474 2737) WWW.iSHARES.COM BARCLAYS iSHARES(R) 2003 SEMI-ANNUAL REPORT TO SHAREHOLDERS SEPTEMBER 30, 2003 [GRAPHIC APPEARS HERE] 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 Managers' Discussion & Analysis .................................. 4 Schedules of Investments ......................................... 8 iShares Russell 1000 Index Fund ................................ 8 iShares Russell 1000 Growth Index Fund ......................... 23 iShares Russell 1000 Value Index Fund .......................... 32 iShares Russell 2000 Index Fund ................................ 44 iShares Russell 2000 Growth Index Fund ......................... 72 iShares Russell 2000 Value Index Fund .......................... 91 Financial Statements ............................................. 110 Financial Highlights ............................................. 114 Notes to the Financial Statements ................................ 120 iShares Family of Funds .......................................... 126 TO OUR SHAREHOLDERS For many investors, the last few years have been difficult and challenging. The collapse of the stock market bubble, a tepid economy, corporate accounting scandals, lackluster company earnings and the geopolitical situation all contributed to a three-year bear market. Stock market gains during the first half of 2003 give some hope that the markets have turned a corner, but there is no guarantee that challenging market conditions will not return. iShares have continued to innovate and expand, offering more tools that help investors tailor their portfolios to achieve diversity and address volatility in a complex market environment. For example, we recently launched the iShares Dow Jones Transportation Average and iShares Dow Jones Select Dividend Index Funds and in April of this year, iShares launched an emerging markets exchange traded fund based on the MSCI Emerging Markets Free Index. Last year, iShares launched the first fixed income exchange traded funds, which BUSINESS WEEK named one of the best new products of 2002./1/ We have added a Lehman Aggregate Bond Fund to our fixed income menu, enabling investors to track one of the most well known U.S. fixed income market indexes. We will also be adding the iShares Lehman TIPS Bond Fund, which provides the opportunity to invest in inflation protected government securities. Assets under management for the fixed income iShares funds were $4.2 billion as of September 30, 2003. With the addition of these iShares, investors can achieve even more diversity in their portfolios -- and at lower cost, since iShares fees are, on average, about half those of actively managed funds./2/ With over 80 different iShares to choose from, investors have the ability to build a diverse portfolio that covers a wide swath of market segments such as capitalization, sectors, value and growth, international and fixed income. That is important because market segments do not tend to move in tandem, particularly in volatile markets. Economic conditions such as inflation, interest rate levels, currency valuations or the price of oil, as well as the normal pace of the economic cycle, all may result in one market segment outperforming another. We encourage you to talk with your financial advisor about what blend of investments or asset allocation can best help you meet your financial goals. Throughout the coming year we will continue to work closely with the financial advisor community to introduce innovative strategies and structures for their client's portfolios. To learn more about iShares, we encourage you to visit our web site, www.iShares.com. At times like these, the importance of sound, disciplined investing is greater than ever. Such investing should be grounded in two key concepts: keeping the costs associated with investing as low as possible, and maintaining a diversified portfolio. That is why we believe iShares are an indispensable tool for investors in the current market. And that is also why more and more investors have recognized the benefits of iShares. Assets under management for iShares continue to grow, and as of September 30, 2003, had reached $44.5 billion. On behalf of the iShares family of funds and our colleagues at Barclays Global Investors, we thank you for making iShares a part of your portfolio. We look forward to meeting your investment needs in the year ahead. /s/ Lee T. Kranefuss Lee T. Kranefuss PRESIDENT AND CHAIRMAN OF THE BOARD OF TRUSTEES FOR 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. ---------- /1/BUSINESS WEEK, 12/16/02. /2/Morningstar Principia, BGI analysis 5/03. SHAREHOLDER LETTER 1 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. The annual management fees of iShares may be substantially less than those of most mutual funds. iShares transactions will result in brokerage commissions, but the savings from lower annual fees can help offset these costs. Past performance does not guarantee future results. iShares are not sponsored, endorsed, or issued by Lehman Brothers, nor are they sponsored, endorsed, issued, sold or promoted by Dow Jones & Company Inc., or Morgan Stanley Capital International. 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 the companies listed above. This advertising section does not constitute part of the 2003 Semi-Annual Report. 2 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS THIS PAGE INTENTIONALLY LEFT BLANK. 3 MANAGERS' DISCUSSION & ANALYSIS iSHARES RUSSELL 1000 INDEX FUNDS Performance as of 9/30/03
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS ---------------------------------------------------- ------------------------- YEAR ENDED 9/30/03 INCEPTION TO 9/30/03 INCEPTION TO 9/30/03 ------------------------- ------------------------- ------------------------- iSHARES INDEX FUND NAV MARKET INDEX NAV MARKET INDEX NAV MARKET INDEX Russell 1000 24.91% 25.17% 25.14% (9.05)% (9.04)% (8.92)% (27.45)% (27.41)% (27.07)% Russell 1000 Growth 25.66% 25.92% 25.92% (16.43)% (16.41)% (16.24)% (45.30)% (45.26)% (44.87)% Russell 1000 Value 24.03% 24.32% 24.37% (0.85)% (0.83)% (0.67)% (2.82)% (2.77)% (2.23)%
"Total returns for the period since inception" are calculated from the inception date of each Fund (5/15/00, 5/22/00 and 5/22/00, respectively). "Average annual total returns" represent the average annual change in value of an investment over the periods indicated. "Cumulative total returns" represent 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 of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return ("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 (5/19/00, 5/26/00 and 5/26/00, respectively), the NAV 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 gain distributions have been reinvested in the Fund at Market Price and NAV, 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. Each Fund's past performance is no guarantee of future results. [CHART APPEARS HERE] TOP 10 FUND SECTORS (% OF NET ASSETS) iSHARES RUSSELL 1000 INDEX FUND FINANCIAL SERVICES 22.98% TECHNOLOGY 14.92% HEALTH CARE 14.40% CONSUMER DISCRETIONARY 13.82% CONSUMER STAPLES 7.33% UTILITIES 7.15% DIVERSIFIED 4.36% INTEGRATED OILS 4.12% PRODUCER DURABLES 3.75% MATERIALS & PROCESSING 3.32% [CHART APPEARS HERE] TOP 10 FUND SECTORS (% OF NET ASSETS) iSHARES RUSSELL 1000 GROWTH INDEX FUND HEALTH CARE 24.53% TECHNOLOGY 23.08% CONSUMER DISCRETIONARY 17.09% FINANCIAL SERVICES 10.61% CONSUMER STAPLES 8.66% DIVERSIFIED 7.19% PRODUCER DURABLES 3.29% AUTO & TRANSPORTATION 1.68% UTILITIES 1.46% MATERIALS & PROCESSING 1.20% [CHART APPEARS HERE] TOP 10 FUND SECTORS (% OF NET ASSETS) iSHARES RUSSELL 1000 VALUE INDEX FUND FINANCIAL SERVICES 35.81% UTILITIES 13.06% CONSUMER DISCRETIONARY 10.43% INTEGRATED OILS 8.38% TECHNOLOGY 6.47% CONSUMER STAPLES 5.94% MATERIALS & PROCESSING 5.51% PRODUCER DURABLES 4.21% HEALTH CARE 3.91% AUTO & TRANSPORTATION 2.72% 4 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS The iShares Russell 1000 Index Fund (the "Fund") seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Russell 1000 Index (the "Index"). The iShares Russell 1000 Growth Index Fund (the "Growth Fund") and iShares Russell 1000 Value Index Fund (the "Value 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 Index, as measured by the Russell 1000 Growth Index (the "Growth Index") and the Russell 1000 Value Index (the "Value Index"), respectively. For the six-month period ended September 30, 2003 (the "reporting period"), the Fund returned 19.09%, compared to a return of 19.21% by the Index. The Growth Fund and the Value Fund returned 18.63% and 19.55%, respectively, while the Growth Index returned 18.78% and the Value Index returned 19.70%. As the war in Iraq reached an official conclusion and the economic outlook began to offer some signs of encouragement, stocks climbed during the reporting period. In late June, the Federal Reserve (the "Fed") cut short-term interest rates by 0.25%, bringing rates to their lowest levels since the Eisenhower administration. As the reporting period progressed, corporate earnings announcements showed higher earnings levels and stabilizing earnings expectations. GDP growth grew at an annual rate of 3.3% during the second quarter, largely due to increased government spending. Unemployment levels, however, remained a problem, reaching their highest levels in nine years. Although the equity rally was broad-based and larger capitalization stocks posted healthy gains, they did nevertheless lag their smaller capitalization counterparts during the reporting period. Within the Index, value stocks edged past growth stocks during the reporting period. Reflecting the broad-based nature of the equity rebound, all ten industry sectors within the Index delivered positive returns during the reporting period. Information technology (17.11% of the Index as of September 30, 2003) logged the biggest gains, climbing 32.32%. Financials (21.72% of the Index as of September 30, 2003) rose 23.78%, and consumer discretionary (11.96% of the Index as of September 30, 2003) returned 23.03%. Health care (14.59% of the Index as of September 30, 2003) delivered the weakest returns, gaining 7.14%. Among the Index's ten largest weightings, performance was largely positive. Intel Corp. (1.87% of the Index as of September 30, 2003) gained 69.04%, and Cisco Systems Inc. (1.43% of the Index as of September 30, 2003) climbed 50.92%. Citigroup Inc. (2.44% of the Index as of September 30, 2003) returned 32.10%. General Electric Co., the largest weighting at 3.10% of the Index, rose 16.90%. Two of the ten largest weightings posted negative results: Johnson & Johnson (1.53% of the Index as of September 30, 2003) declined 14.43%, and Pfizer Inc. (2.49% of the Index as of September 30, 2003) fell 2.50%. MANAGERS' DISCUSSION & ANALYSIS 5 MANAGERS' DISCUSSION & ANALYSIS iSHARES RUSSELL 2000 INDEX FUNDS Performance as of 9/30/03
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS ---------------------------------------------------------------- ------------------------------- YEAR ENDED 9/30/03 INCEPTION TO 9/30/03 INCEPTION TO 9/30/03 ------------------------------- ------------------------------- ------------------------------- iSHARES INDEX FUND NAV MARKET INDEX NAV MARKET INDEX NAV MARKET INDEX Russell 2000 36.23% 36.87% 36.50% 2.07% 2.00% 2.40% 7.12% 6.90% 8.30% Russell 2000 Growth 41.40% 42.42% 41.72% (12.46)% (12.50)% (12.20)% (34.59)% (34.67)% (33.98)% Russell 2000 Value 31.30% 32.23% 31.66% 11.62% 11.59% 11.97% 41.97% 41.85% 43.44%
"Total returns for the period since inception" are calculated from the inception date of each Fund (5/22/00, 7/24/00 and 7/24/00, respectively). "Average annual total returns" represent the average annual change in value of an investment over the periods indicated. "Cumulative total returns" represent 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 of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return ("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 (5/26/00, 7/28/00 and 7/28/00, respectively), the NAV 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 gain distributions have been reinvested in the Fund at Market Price and NAV, 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. Each Fund's past performance is no guarantee of future results. [CHART APPEARS HERE] TOP 10 FUND SECTORS (% OF NET ASSETS) iSHARES RUSSELL 2000 INDEX FUND FINANCIAL SERVICES 22.74% CONSUMER DISCRETIONARY 18.75% TECHNOLOGY 15.08% HEALTH CARE 13.30% PRODUCER DURABLES 7.90% MATERIALS & PROCESSING 7.80% AUTO & TRANSPORTATION 4.25% UTILITIES 4.12% OTHER ENERGY 3.46% CONSUMER STAPLES 1.94% [CHART APPEARS HERE] TOP 10 FUND SECTORS (% OF NET ASSETS) iSHARES RUSSELL 2000 GROWTH INDEX FUND TECHNOLOGY 22.82% HEALTH CARE 22.21% CONSUMER DISCRETIONARY 20.29% FINANCIAL SERVICES 12.87% PRODUCER DURABLES 7.74% MATERIALS & PROCESSING 4.54% AUTO & TRANSPORTATION 3.33% OTHER ENERGY 2.93% UTILITIES 1.97% CONSUMER STAPLES 1.09% [CHART APPEARS HERE] TOP 10 FUND SECTORS (% OF NET ASSETS) iSHARES RUSSELL 2000 VALUE INDEX FUND FINANCIAL SERVICES 32.67% CONSUMER DISCRETIONARY 17.18% MATERIALS & PROCESSING 11.08% PRODUCER DURABLES 8.07% TECHNOLOGY 7.29% UTILITIES 6.28% AUTO & TRANSPORTATION 5.17% HEALTH CARE 4.34% OTHER ENERGY 4.00% CONSUMER STAPLES 2.81% 6 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS The iShares Russell 2000 Index Fund (the "Fund") seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Russell 2000 Index (the "Index"). The iShares Russell 2000 Growth Index Fund (the "Growth Fund") and iShares Russell 2000 Value Index Fund (the "Value 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 Index, as measured by the Russell 2000 Growth Index (the "Growth Index") and the Russell 2000 Value Index (the "Value Index"), respectively. For the six-month period ended September 30, 2003 (the "reporting period"), the Fund returned 34.45%, compared to a return of 34.63% by the Index. The Growth Fund and the Value Fund returned 36.95% and 32.00%, respectively, while the Growth Index returned 37.14% and the Value Index returned 32.20%. Equity markets rebounded during the six-month reporting period. Responding to the official conclusion to the war in Iraq, stocks generally marched upward throughout the reporting period. Some economic indicators provided signs of encouragement: GDP growth for the second quarter was revised upward several times, ultimately showing an annual growth rate of 3.3%. Corporate earnings growth was also strong and consistent, reaching double-digit growth rates toward the end of the reporting period. Smaller company shares generally outperformed larger capitalization stocks during the reporting period. In particular, smaller capitalization growth stocks have largely driven the equity rebound this year, as investors appeared more willing to emerge from more relatively stable areas to participate in growth-oriented sectors, such as information technology and telecommunications. Some companies within these sectors had depressed share prices, which made them attractive to bargain hunters. However, many companies began to announce healthy earnings levels, thanks largely to an increase in demand, and, in some cases, effective cost-cutting. Reflecting the strength and breadth of the rebound, every industry sector within the Index achieved a double-digit gain during the reporting period. Telecommunication services (1.24% of the Index as of September 30, 2003) led the way with a 57.40% gain. Information technology (20.95% of the Index as of September 30, 2003), the laggard in previous reporting periods, logged a 55.12% gain. Health care (13.80% of the Index as of September 30, 2003) rose 48.58%, and consumer discretionary (14.80% of the Index as of September 30, 2003) climbed 35.29%. Financials (21.63% of the Index as of September 30, 2003) returned 24.34%. Among the Index's ten largest weightings, all delivered double-digit or even triple-digit gains. However, for some stocks, the significant gains were not so much an indication of robust growth as they were a reflection of the steep price declines suffered in the past several years. AMR Corp. (0.23% of the Index as of September 30, 2003) gained 445.24%, and Conexant Systems Inc. (0.20% of the Index as of September 30, 2003) climbed 365.46%. The Titan Corp. (0.21% of the Index as of September 30, 2003) rose 179.73%. Avid Technology Inc. (0.20% of the Index as of September 30, 2003) returned 138.85%, and Andrew Corp. (0.23% of the Index as of September 30, 2003) gained 119.64%. The smallest gains among the ten largest weightings came from Cytyc Corp. (0.22% of the Index as of September 30, 2003), which returned 15.02%. MANAGERS' DISCUSSION & ANALYSIS 7 SCHEDULE OF INVESTMENTS (Unaudited) iSHARES RUSSELL 1000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- COMMON STOCKS - 99.91% General Electric Co. 1,724,707 $ 51,413,516 Microsoft Corp. 1,543,333 42,889,224 Exxon Mobil Corp. 1,152,653 42,187,100 Pfizer Inc. 1,362,338 41,387,828 Citigroup Inc. 888,394 40,430,811 Intel Corp. 1,127,576 31,019,616 Wal-Mart Stores Inc. 458,649 25,615,547 Johnson & Johnson 512,334 25,370,780 International Business Machines Corp. 279,306 24,671,099 Cisco Systems Inc./1/ 1,210,756 23,658,172 American International Group Inc. 395,965 22,847,180 Procter & Gamble Co. 223,346 20,730,976 Bank of America Corp. 258,423 20,167,331 Merck & Co. Inc. 386,818 19,580,727 Coca-Cola Co. (The) 369,701 15,882,355 Verizon Communications Inc. 474,454 15,391,288 Altria Group Inc. 349,323 15,300,347 Wells Fargo & Company 288,988 14,882,882 Amgen Inc./1/ 222,465 14,364,565 PepsiCo Inc. 296,412 13,584,562 ChevronTexaco Corp. 184,309 13,168,878 Dell Inc./1/ 392,992 13,122,003 SBC Communications Inc. 573,187 12,753,411 Home Depot Inc. 395,731 12,604,032 JP Morgan Chase & Co. 350,441 12,030,640 Fannie Mae 169,048 11,867,170 Abbott Laboratories 269,309 11,459,098 Comcast Corp. Class A/1/ 368,983 11,394,195 AOL Time Warner Inc./1/ 746,385 11,277,877 Wyeth 229,114 10,562,155 Viacom Inc. Class B 267,200 10,233,760 Hewlett-Packard Co. 526,648 10,195,905 Lilly (Eli) & Co. 166,513 9,890,872 Medtronic Inc. 210,407 9,872,296 3M Co. 134,868 9,315,333 Morgan Stanley 182,912 9,229,740 Wachovia Corp. 220,955 9,101,136 American Express Co. 198,268 8,933,956 Bristol-Myers Squibb Co. 334,442 8,581,782 Merrill Lynch & Co. Inc. 159,938 8,561,481 U.S. Bancorp 331,248 7,946,640 Bank One Corp. 197,115 7,618,495 BellSouth Corp. 318,665 7,545,987 Oracle Corp./1/ 668,530 7,500,907 Walt Disney Co. (The) 352,564 7,111,216 Anheuser-Busch Companies Inc. 143,968 7,103,381 Du Pont (E.I.) de Nemours and Co. 171,857 6,875,999 Lowe's Companies Inc. 131,198 6,809,176 Texas Instruments Inc. 298,400 6,803,520 ConocoPhillips 117,250 6,419,438 Washington Mutual Inc. 160,573 6,321,759 Freddie Mac 120,139 6,289,277 United Technologies Corp. 80,743 6,239,819 Target Corp. 157,327 5,920,215 QUALCOMM Inc. 136,174 5,670,285 United Parcel Service Inc. Class B 88,538 5,648,724 Gillette Co. (The) 176,225 5,635,675 FleetBoston Financial Corp. 181,705 5,478,406 Walgreen Co. 176,873 5,419,389 Colgate-Palmolive Co. 92,854 5,189,610 Applied Materials Inc./1/ 286,032 5,188,620 McDonald's Corp. 219,581 5,168,937 First Data Corp. 129,086 5,158,277 Dow Chemical Co. (The) 157,931 5,139,075 UnitedHealth Group Inc. 95,782 4,819,750 Fifth Third Bancorp 86,520 4,799,264 Motorola Inc. 399,282 4,779,406 EMC Corp./1/ 377,449 4,767,181 Kimberly-Clark Corp. 87,805 4,506,153 Cardinal Health Inc. 77,057 4,499,358 Allstate Corp. (The) 121,497 4,438,285 Marsh & McLennan Companies Inc. 92,412 4,399,735 Liberty Media Corp. Class A/1/ 438,393 4,370,778 Boeing Co. (The) 126,363 4,338,042 MBNA Corp. 185,310 4,225,068 Goldman Sachs Group Inc. (The) 49,076 4,117,476 8 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Caterpillar Inc. 59,457 $ 4,093,020 Bank of New York Co. Inc. (The) 133,318 3,880,887 Schering-Plough Corp. 253,960 3,870,350 eBay Inc./1/ 72,270 3,867,168 Emerson Electric Co. 72,663 3,825,707 Alcoa Inc. 145,900 3,816,744 Honeywell International Inc. 143,204 3,773,425 Automatic Data Processing Inc. 103,228 3,700,724 Sysco Corp. 112,144 3,668,230 Southern Company 124,452 3,648,933 Gannett Co. Inc. 46,361 3,595,759 Prudential Financial Inc. 95,241 3,558,204 Exelon Corp. 55,994 3,555,619 Boston Scientific Corp./1/ 55,511 3,541,602 Clear Channel Communications Inc. 90,441 3,463,890 BB&T Corp. 96,298 3,458,061 Dominion Resources Inc. 55,308 3,423,565 FedEx Corp. 51,639 3,327,101 Cendant Corp./1/ 175,850 3,286,636 Ford Motor Company 303,652 3,270,332 General Motors Corp. 79,849 3,268,220 International Paper Co. 82,685 3,226,369 AT&T Wireless Services Inc./1/ 388,591 3,178,674 HCA Inc. 84,705 3,122,226 Yahoo! Inc./1/ 85,868 3,038,010 Forest Laboratories Inc./1/ 58,813 3,025,929 General Mills Inc. 63,703 2,998,500 Baxter International Inc. 103,162 2,997,888 Illinois Tool Works Inc. 44,315 2,936,312 Lockheed Martin Corp. 63,563 2,933,432 AT&T Corp. 135,460 2,919,163 Lehman Brothers Holdings Inc. 41,881 2,893,139 AFLAC Inc. 88,644 2,863,201 Genentech Inc./1/ 35,410 2,837,757 National City Corp. 95,368 2,809,541 Nextel Communications Inc. Class A/1/ 140,985 2,775,995 SLM Corp. 71,134 2,771,381 Duke Energy Corp. 155,313 2,766,125 Waste Management Inc. 101,871 2,665,964 Kohls Corp./1/ 49,455 2,645,842 Avon Products Inc. 40,549 2,617,843 Northrop Grumman Corp. 29,909 2,578,754 State Street Corp. 57,247 2,576,115 SunTrust Banks Inc. 42,614 2,572,607 Hartford Financial Services Group Inc. 48,755 2,565,976 Union Pacific Corp. 43,837 2,549,998 Harley-Davidson Inc. 52,213 2,516,667 Guidant Corp. 53,400 2,501,790 Alltel Corp. 53,752 2,490,868 Sara Lee Corp. 134,202 2,463,949 Costco Wholesale Corp./1/ 78,883 2,451,684 Newmont Mining Corp. 62,148 2,429,365 Analog Devices Inc./1/ 63,309 2,407,008 General Dynamics Corp. 30,504 2,381,142 Omnicom Group Inc. 32,544 2,338,286 Sprint Corp. (FON Group) 154,848 2,338,205 Kroger Co./1/ 130,516 2,332,321 PNC Financial Services Group 48,902 2,326,757 Progressive Corp. (The) 33,630 2,324,169 Travelers Property Casualty Corp. Class B 145,656 2,313,017 Southwest Airlines Co. 130,484 2,309,567 Occidental Petroleum Corp. 65,392 2,303,760 InterActiveCorp/1/ 68,711 2,270,899 Veritas Software Corp./1/ 71,597 2,248,146 Mellon Financial Corp. 74,521 2,246,063 Weyerhaeuser Co. 37,928 2,216,892 Maxim Integrated Products Inc. 56,028 2,213,106 Deere & Co. 41,318 2,202,663 Schwab (Charles) Corp. (The) 182,413 2,172,539 General Motors Corp. Class H/1/ 151,141 2,162,828 Corning Inc./1/ 229,422 2,161,155 Best Buy Co. Inc./1/ 44,936 2,135,359 CVS Corp. 67,897 2,108,881 Capital One Financial Corp. 36,949 2,107,571 Entergy Corp. 38,809 2,101,507 Sears, Roebuck and Co. 47,772 2,089,070 Heinz (H.J.) Co. 60,850 2,085,938 SCHEDULES OF INVESTMENTS 9 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Computer Associates International Inc. 79,832 $ 2,084,414 Chubb Corp. 31,901 2,069,737 American Electric Power Co. Inc. 68,458 2,053,740 McGraw-Hill Companies Inc. (The) 32,943 2,046,749 Masco Corp. 82,324 2,015,292 FPL Group Inc. 31,555 1,994,276 Raytheon Co. 70,710 1,979,880 ConAgra Foods Inc. 92,765 1,970,329 WellPoint Health Networks Inc./1/ 25,490 1,964,769 Staples Inc./1/ 81,941 1,946,099 Starbucks Corp./1/ 67,372 1,940,314 Gap Inc. (The) 113,302 1,939,730 Bed Bath & Beyond Inc./1/ 50,741 1,937,291 Linear Technology Corp. 54,065 1,936,068 Apache Corp. 27,872 1,932,644 Golden West Financial Corp. 21,520 1,926,255 Gilead Sciences Inc./1/ 34,436 1,926,005 Paychex Inc. 56,713 1,924,272 Equity Office Properties Trust 69,568 1,915,207 Devon Energy Corp. 39,736 1,914,878 KeyCorp 73,040 1,867,633 Zimmer Holdings Inc./1/ 33,849 1,865,080 Burlington Northern Santa Fe Corp. 64,383 1,858,737 Sun Microsystems Inc./1/ 557,849 1,846,480 Amazon.com Inc./1/ 37,842 1,830,039 Halliburton Co. 75,379 1,827,941 Anadarko Petroleum Corp. 43,006 1,795,931 Agilent Technologies Inc./1/ 81,194 1,795,199 Stryker Corp. 23,775 1,790,495 Electronic Arts Inc./1/ 19,410 1,790,184 Air Products & Chemicals Inc. 39,281 1,771,573 Allergan Inc. 22,500 1,771,425 Safeway Inc./1/ 76,425 1,753,190 Praxair Inc. 28,186 1,746,123 Baker Hughes Inc. 58,479 1,730,394 SouthTrust Corp. 58,787 1,727,750 TJX Companies Inc. 88,734 1,723,214 Nike Inc. Class B 28,243 1,717,739 Anthem Inc./1/ 23,887 1,703,860 PG&E Corp./1/ 70,708 1,689,921 KLA-Tencor Corp./1/ 32,847 1,688,336 Hancock (John) Financial Services Inc. 49,942 1,688,040 Burlington Resources Inc. 34,859 1,680,204 International Game Technology Inc. 59,152 1,665,129 St. Jude Medical Inc./1/ 30,959 1,664,665 Xilinx Inc./1/ 58,357 1,663,758 FirstEnergy Corp. 52,103 1,662,086 Countrywide Financial Corp. 21,147 1,655,387 Progress Energy Inc. 37,038 1,646,709 MetLife Inc. 58,601 1,643,758 Public Service Enterprise Group Inc. 38,790 1,629,180 Tribune Co. 35,091 1,610,677 Symantec Corp./1/ 25,409 1,601,275 Becton, Dickinson & Co. 44,017 1,589,894 Electronic Data Systems Corp. 77,945 1,574,489 McKesson Corp. 47,259 1,573,252 Adobe Systems Inc. 40,072 1,573,227 Consolidated Edison Inc. 38,577 1,572,399 Pitney Bowes Inc. 40,476 1,551,040 Wrigley (William Jr.) Co. 28,034 1,550,280 Principal Financial Group Inc. 49,913 1,546,804 Genzyme Corp. - General Division/1/ 33,225 1,536,656 Lucent Technologies Inc./1/ 711,252 1,536,304 Intuit Inc./1/ 31,782 1,533,164 PPG Industries Inc. 29,250 1,527,435 Marathon Oil Corp. 53,552 1,526,232 Aetna Inc. 24,857 1,517,023 EchoStar Communications Corp./1/ 39,322 1,504,853 Biomet Inc. 44,598 1,498,939 Yum! Brands Inc./1/ 50,548 1,497,232 Marriott International Inc. Class A 34,036 1,464,569 Apollo Group Inc. Class A/1/ 22,132 1,461,376 Johnson Controls Inc. 15,442 1,460,813 Danaher Corp. 19,692 1,454,451 10 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- MedImmune Inc./1/ 43,485 $ 1,435,440 Mattel Inc. 75,451 1,430,551 Kellogg Co. 42,772 1,426,446 Fortune Brands Inc. 25,116 1,425,333 Northern Trust Corp. 33,529 1,422,971 PACCAR Inc. 18,917 1,412,911 Comerica Inc. 30,278 1,410,955 Unocal Corp. 44,689 1,408,597 Kraft Foods Inc. 47,589 1,403,875 Equity Residential 47,430 1,388,750 MBIA Inc. 24,869 1,367,049 Federated Department Stores Inc. 32,382 1,356,806 St. Paul Companies Inc. 36,312 1,344,633 Block (H & R) Inc. 30,968 1,336,269 Regions Financial Corp. 38,398 1,315,131 TXU Corp. 55,661 1,311,373 Xerox Corp./1/ 127,437 1,307,504 Synovus Financial Corp. 52,126 1,302,629 Apple Computer Inc./1/ 62,797 1,295,502 SunGard Data Systems Inc./1/ 48,980 1,288,664 AmSouth Bancorp 60,702 1,288,096 Lexmark International Inc./1/ 20,346 1,282,001 Bear Stearns Companies Inc. (The) 17,025 1,273,470 Micron Technology Inc./1/ 94,649 1,270,190 Altera Corp./1/ 66,643 1,259,553 Franklin Resources Inc. 28,401 1,255,608 Norfolk Southern Corp. 67,256 1,244,236 PPL Corp. 30,290 1,240,375 Dover Corp. 35,014 1,238,445 Clorox Co. 26,907 1,234,224 Cox Communications Inc. Class A/1/ 38,995 1,233,022 May Department Stores Co. (The) 49,862 1,228,101 Marshall & Ilsley Corp. 38,930 1,227,074 Medco Health Solutions Inc./1/ 46,749 1,212,202 Mylan Laboratories Inc. 31,325 1,210,711 Albertson's Inc. 58,723 1,207,932 Ameren Corp. 27,901 1,197,232 Charter One Financial Inc. 38,910 1,190,646 Moody's Corp. 21,521 1,183,009 Archer-Daniels-Midland Co. 89,706 1,176,046 Tenet Healthcare Corp./1/ 81,191 1,175,646 Computer Sciences Corp./1/ 30,903 1,161,026 Concord EFS Inc./1/ 84,138 1,150,166 Limited Brands Inc. 75,941 1,145,190 Starwood Hotels & Resorts Worldwide Inc. 32,896 1,144,781 Fiserv Inc./1/ 31,572 1,143,854 Eaton Corp. 12,767 1,131,412 Cinergy Corp. 30,443 1,117,258 Hershey Foods Corp. 15,318 1,113,312 Union Planters Corp. 34,336 1,086,391 Jefferson-Pilot Corp. 24,432 1,084,292 Lincoln National Corp. 30,640 1,084,043 CSX Corp. 36,784 1,075,932 Monsanto Co. 44,931 1,075,648 CIGNA Corp. 24,067 1,074,592 Xcel Energy Inc. 69,061 1,068,374 DTE Energy Co. 28,843 1,064,018 New York Times Co. Class A 24,467 1,063,336 Network Appliance Inc./1/ 51,688 1,061,155 Georgia-Pacific Corp. 43,404 1,052,113 Campbell Soup Co. 39,165 1,037,872 Eastman Kodak Co. 49,524 1,037,033 Family Dollar Stores Inc. 25,981 1,036,382 AmerisourceBergen Corp. 19,149 1,035,003 UST Inc. 29,193 1,027,010 PeopleSoft Inc./1/ 56,456 1,026,935 AutoZone Inc./1/ 11,415 1,021,985 Constellation Energy Group Inc. 28,552 1,021,591 Newell Rubbermaid Inc. 47,117 1,021,025 National Semiconductor Corp./1/ 31,520 1,017,781 Caremark Rx Inc./1/ 44,943 1,015,712 M&T Bank Corp. 11,534 1,006,918 Broadcom Corp. Class A/1/ 37,422 996,174 Penney (J.C.) Co. Inc. (Holding Co.) 46,476 993,192 Simon Property Group Inc. 22,729 990,530 Biogen Inc./1/ 25,623 979,567 Dollar General Corp. 48,956 979,120 CIT Group Inc. 33,918 975,482 SCHEDULES OF INVESTMENTS 11 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Genuine Parts Co. 30,371 $ 971,265 Avery Dennison Corp. 18,955 957,607 KeySpan Corp. 27,271 956,667 Knight Ridder Inc. 14,238 949,675 Cincinnati Financial Corp. 23,751 949,090 ITT Industries Inc. 15,798 945,352 Interpublic Group of Companies Inc. 66,794 943,131 North Fork Bancorp Inc. 27,111 942,107 Edison International/1/ 49,219 940,083 Hilton Hotels Corp. 57,831 938,019 Sovereign Bancorp Inc. 50,269 932,490 Sempra Energy 31,642 929,009 Affiliated Computer Services Inc. Class A/1/ 19,080 929,005 First Tennessee National Corp. 21,876 928,855 AON Corp. 44,071 918,880 Ambac Financial Group Inc. 14,291 914,624 Popular Inc. 22,959 913,768 Parker Hannifin Corp. 20,436 913,489 Rohm & Haas Co. 27,270 912,182 Loews Corp. 22,526 909,375 Health Management Associates Inc. Class A 41,659 908,583 NiSource Inc. 45,470 908,491 IMS Health Inc. 42,074 887,761 American Standard Companies Inc./1/ 10,507 885,215 MeadWestvaco Corp. 34,666 883,983 General Growth Properties Inc. 12,295 881,551 National Commerce Financial Corp. 35,416 881,150 Novellus Systems Inc./1/ 26,087 880,436 Kinder Morgan Inc. 16,262 878,311 BJ Services Co./1/ 25,657 876,700 Zions Bancorporation 15,601 871,316 Sanmina-SCI Corp./1/ 89,305 866,258 Coach Inc./1/ 15,695 856,947 Juniper Networks Inc./1/ 57,359 855,796 ProLogis 27,972 846,153 Microchip Technology Inc. 35,156 841,635 CenturyTel Inc. 24,761 839,150 JDS Uniphase Corp./1/ 233,044 838,958 Williams Companies Inc. 89,032 838,681 Fox Entertainment Group Inc. Class A/1/ 29,917 837,377 EOG Resources Inc. 20,041 836,511 Univision Communications Inc. Class A/1/ 25,989 829,843 Dean Foods Co./1/ 26,730 829,432 RadioShack Corp. 29,156 828,322 Ecolab Inc. 32,753 827,013 Centex Corp. 10,616 826,774 Agere Systems Inc. Class B/1/ 285,448 824,945 Archstone-Smith Trust 31,257 824,560 Torchmark Corp. 20,094 816,620 Legg Mason Inc. 11,204 808,929 Applera Corp. - Applied Biosystems Group 36,187 807,332 Chiron Corp./1/ 15,615 807,139 Plum Creek Timber Co. Inc. 31,674 805,787 Qwest Communications International Inc./1/ 235,756 801,570 Solectron Corp./1/ 136,944 801,122 Harrah's Entertainment Inc. 18,996 799,922 Whirlpool Corp. 11,740 795,620 SAFECO Corp. 22,424 790,670 Banknorth Group Inc. 27,958 788,975 Huntington Bancshares Inc. 39,849 788,612 Avaya Inc./1/ 71,975 784,527 Textron Inc. 19,879 784,227 Rockwell Collins Inc. 30,826 778,357 Kerr-McGee Corp. 17,352 774,593 Cintas Corp. 20,828 767,304 Sprint Corp. (PCS Group)/1/ 133,907 767,287 Murphy Oil Corp. 13,044 766,335 New York Community Bancorp Inc. 24,308 765,945 Scientific-Atlanta Inc. 24,571 765,387 Quest Diagnostics Inc./1/ 12,604 764,307 Watson Pharmaceuticals Inc./1/ 18,329 764,136 Compass Bancshares Inc. 21,974 759,861 12 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- BEA Systems Inc./1/ 63,035 $ 759,572 El Paso Corp. 103,542 755,857 QLogic Corp./1/ 16,067 755,310 Office Depot Inc./1/ 53,574 752,715 Delphi Corp. 83,149 752,498 Freeport-McMoRan Copper & Gold Inc. 22,671 750,410 Millennium Pharmaceuticals Inc./1/ 48,728 749,924 T. Rowe Price Group Inc. 18,169 749,653 Valero Energy Corp. 19,554 748,332 Rockwell Automation Inc. 28,442 746,603 Career Education Corp./1/ 16,342 740,293 Synopsys Inc./1/ 23,828 733,188 Coca-Cola Enterprises Inc. 38,451 732,876 UNUMProvident Corp. 49,558 731,972 Laboratory Corp. of America Holdings/1/ 25,401 729,009 Leggett & Platt Inc. 33,681 728,520 Tiffany & Co. 19,361 722,746 Unisys Corp./1/ 52,867 715,291 Radian Group Inc. 15,996 710,222 Lennar Corp. Class A 9,104 708,200 Jabil Circuit Inc./1/ 26,811 698,427 ENSCO International Inc. 26,030 698,125 IDEC Pharmaceuticals Corp./1/ 20,909 693,133 Siebel Systems Inc./1/ 70,760 687,787 Old Republic International Corp. 20,635 682,812 Sealed Air Corp./1/ 14,444 682,190 Varian Medical Systems Inc./1/ 11,824 679,644 Duke Realty Corp. 23,185 677,002 Public Storage Inc. 17,253 676,835 Phelps Dodge Corp./1/ 14,391 673,499 SanDisk Corp./1/ 10,528 671,055 D.R. Horton Inc. 20,377 666,328 Dollar Tree Stores Inc./1/ 19,864 665,444 Advanced Micro Devices Inc./1/ 59,700 663,267 McCormick & Co. Inc. 24,141 661,946 iStar Financial Inc. 16,957 660,475 Kimco Realty Corp. 16,069 658,347 Vornado Realty Trust 13,704 658,340 SCANA Corp. 19,214 658,080 MGIC Investment Corp. 12,632 657,748 Express Scripts Inc./1/ 10,715 655,222 Fidelity National Financial Inc. 21,661 651,130 Vulcan Materials Co. 16,302 650,613 Molex Inc. 22,587 645,762 Bard (C.R.) Inc. 9,088 645,248 Wendy's International Inc. 19,923 643,513 Sigma-Aldrich Corp. 12,354 641,667 King Pharmaceuticals Inc./1/ 42,188 639,148 Grainger (W.W.) Inc. 13,377 636,076 Liz Claiborne Inc. 18,650 635,032 Sherwin-Williams Co. (The) 21,579 634,638 Citrix Systems Inc./1/ 28,668 632,989 Diebold Inc. 12,490 632,618 Apartment Investment & Management Co. Class A 16,007 630,036 Jones Apparel Group Inc. 20,974 627,752 Mohawk Industries Inc./1/ 8,797 627,402 Smurfit-Stone Container Corp. 41,874 627,273 Nucor Corp. 13,533 620,894 Ross Stores Inc. 13,363 619,509 Amerada Hess Corp. 12,356 619,036 GreenPoint Financial Corp. 20,701 618,132 SPX Corp./1/ 13,622 616,804 XTO Energy Inc. 29,346 615,973 Cadence Design Systems Inc./1/ 45,949 615,717 Pepsi Bottling Group Inc. 29,850 614,313 Thermo Electron Corp./1/ 28,042 608,511 Wisconsin Energy Corp. 19,889 608,007 TCF Financial Corp. 12,641 606,136 Estee Lauder Companies Inc. Class A 17,703 603,672 DENTSPLY International Inc. 13,413 601,439 Celgene Corp./1/ 13,861 600,597 Republic Services Inc. 26,348 596,519 Patterson Dental Co./1/ 10,311 593,707 Teradyne Inc./1/ 31,808 591,629 Oxford Health Plans Inc./1/ 14,314 591,311 Lincare Holdings Inc./1/ 16,031 587,536 CarMax Inc./1/ 17,928 585,528 Waters Corp./1/ 21,263 583,244 SCHEDULES OF INVESTMENTS 13 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- CDW Corp. 10,070 $ 581,442 JetBlue Airways Corp./1/ 9,525 580,739 Janus Capital Group Inc. 41,516 579,979 Expeditors International Washington Inc. 16,854 579,946 Mercury Interactive Corp./1/ 12,759 579,386 Pulte Homes Inc. 8,518 579,309 Lear Corp./1/ 11,002 579,145 R.J. Reynolds Tobacco Holdings Inc. 14,481 572,579 Washington Post Company (The) Class B 858 570,570 AdvancePCS/1/ 12,434 566,617 BMC Software Inc./1/ 40,442 563,357 Brinker International Inc./1/ 16,862 562,516 LSI Logic Corp./1/ 62,448 561,408 Energy East Corp. 24,988 560,481 Pactiv Corp./1/ 27,483 557,355 Hibernia Corp. Class A 27,464 556,421 Engelhard Corp. 20,070 555,337 VF Corp. 14,256 554,701 Darden Restaurants Inc. 29,170 554,230 PETsMART Inc./1/ 24,371 553,222 Intersil Corp. Class A/1/ 23,226 552,779 Rouse Co. (The) 13,244 552,275 Health Net Inc./1/ 17,406 551,248 Black & Decker Corp. 13,569 550,223 SUPERVALU Inc. 22,991 548,565 L-3 Communications Holdings Inc./1/ 12,674 548,150 Equifax Inc. 24,456 544,635 Citizens Communications Co./1/ 48,514 543,842 Mercantile Bankshares Corp. 13,550 542,000 ServiceMaster Co. (The) 52,757 541,287 Dun & Bradstreet Corp./1/ 13,001 540,062 Omnicare Inc. 14,958 539,385 AES Corp. (The)/1/ 72,629 538,907 AutoNation Inc./1/ 30,647 537,548 Barr Laboratories Inc./1/ 7,877 537,290 Ball Corp. 9,856 532,224 E*TRADE Group Inc./1/ 57,471 532,181 Providian Financial Corp./1/ 44,937 529,807 Fluor Corp. 14,176 529,190 Smith International Inc./1/ 14,701 528,942 PMI Group Inc. (The) 15,638 527,782 Sunoco Inc. 13,058 525,193 Boston Properties Inc. 12,010 522,075 DST Systems Inc./1/ 13,717 515,759 Tyson Foods Inc. Class A 36,233 511,972 Host Marriott Corp./1/ 47,528 509,975 Pioneer Natural Resources Co./1/ 19,996 509,098 Pinnacle West Capital Corp. 14,327 508,608 Humana Inc./1/ 28,002 505,436 Invitrogen Corp./1/ 8,691 503,991 Edwards (A.G.) Inc. 13,096 503,017 Energizer Holdings Inc./1/ 13,680 503,014 Robert Half International Inc./1/ 25,747 502,067 Autoliv Inc. 16,603 500,913 Hillenbrand Industries Inc. 8,864 500,107 AvalonBay Communities Inc. 10,648 498,326 Whole Foods Market Inc./1/ 9,002 496,730 Lam Research Corp./1/ 22,357 495,208 Sabre Holdings Corp. 23,007 494,420 Liberty Property Trust 13,332 493,017 Telephone & Data Systems Inc. 8,702 492,011 Commerce Bancorp Inc. 10,249 491,030 American Power Conversion Corp. 28,574 489,758 Tellabs Inc./1/ 72,043 489,172 Manpower Inc. 13,144 487,642 Goodrich (B.F.) Co. 20,055 486,133 Health Care Property Investors Inc. 10,398 485,587 ChoicePoint Inc./1/ 14,492 485,482 Level 3 Communications Inc./1/ 89,512 485,155 Symbol Technologies Inc. 40,310 481,705 Beckman Coulter Inc. 10,550 480,447 Vishay Intertechnology Inc./1/ 27,364 479,417 Pogo Producing Co. 10,543 477,387 Manor Care Inc. 15,856 475,680 CIENA Corp./1/ 80,353 474,886 VeriSign Inc./1/ 35,203 474,184 14 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Allied Capital Corp. 19,186 $ 471,784 Doral Financial Corp. 9,969 468,543 Convergys Corp./1/ 25,507 467,798 NCR Corp./1/ 14,740 467,111 IVAX Corp./1/ 23,691 464,344 Constellation Brands Inc./1/ 15,157 462,137 WebMD Corp./1/ 51,749 461,601 Michaels Stores Inc. 11,315 461,199 Pepco Holdings Inc. 26,689 461,186 Brown-Forman Corp. Class B 5,779 457,234 Gentex Corp./1/ 13,080 455,707 Eastman Chemical Co. 13,559 454,226 Fair Isaac Corp. 7,696 453,756 Commerce Bancshares Inc. 10,359 453,206 Hasbro Inc. 24,213 452,299 CH Robinson Worldwide Inc. 12,145 451,915 Associated Bancorp 11,945 451,521 Donnelley (R.R.) & Sons Co. 18,150 451,390 Scripps (E.W.) Co. Class A 5,291 450,264 Storage Technology Corp./1/ 18,627 449,656 NVR Inc./1/ 963 449,239 Valley National Bancorp 16,088 447,890 Pall Corp. 19,918 446,960 Chico's FAS Inc./1/ 14,587 446,946 UnionBanCal Corp. 9,011 446,946 Amylin Pharmaceuticals Inc./1/ 15,785 445,768 Equitable Resources Inc. 10,845 445,729 NSTAR 9,335 443,412 Park Place Entertainment Corp./1/ 49,186 443,166 Ameritrade Holding Corp./1/ 39,332 442,485 Westwood One Inc./1/ 14,620 441,378 Questar Corp. 14,299 440,552 Toys R Us Inc./1/ 36,236 435,919 Gallagher (Arthur J.) & Co. 15,408 435,738 Abercrombie & Fitch Co. Class A/1/ 15,667 434,133 MDU Resources Group Inc. 12,844 433,870 Western Digital Corp./1/ 33,644 433,671 Harman International Industries Inc. 4,402 432,937 MGM Grand Inc./1/ 11,742 429,170 Ceridian Corp./1/ 22,966 427,627 CenterPoint Energy Inc. 46,621 427,515 Universal Health Services Inc. Class B/1/ 8,610 425,765 Corinthian Colleges Inc./1/ 7,429 424,642 International Rectifier Corp./1/ 11,195 419,141 Monster Worldwide Inc./1/ 16,569 417,207 Mid Atlantic Medical Services Inc./1/ 8,099 416,532 First Health Group Corp./1/ 15,894 415,628 KB Home 6,956 414,995 Nordstrom Inc. 16,699 414,302 Maxtor Corp./1/ 33,996 413,731 SEI Investment Co. 12,724 413,530 TECO Energy Inc. 29,830 412,251 Coventry Health Care Inc./1/ 7,781 410,370 Astoria Financial Corp. 13,236 408,992 Alberto-Culver Co. Class B 6,953 408,975 NVIDIA Corp./1/ 25,686 408,690 Valspar Corp. (The) 8,713 406,461 Outback Steakhouse Inc. 10,705 405,398 Harris Corp. 11,303 404,534 Alliant Energy Corp. 18,369 404,118 International Flavors & Fragrances Inc. 12,212 403,973 AMB Property Corp. 13,104 403,734 Bausch & Lomb Inc. 9,126 402,913 Comverse Technology Inc./1/ 26,930 402,873 Foot Locker Inc. 24,852 402,602 Iron Mountain Inc./1/ 11,207 402,331 Dana Corp. 26,025 401,566 Krispy Kreme Doughnuts Inc./1/ 10,428 401,478 ALLETE Inc. 14,654 401,227 GTECH Holdings Corp. 9,331 399,833 Northeast Utilities 22,304 399,688 Temple-Inland Inc. 8,143 395,343 Rent-A-Center Inc./1/ 12,195 393,899 Cephalon Inc./1/ 8,556 392,892 Eaton Vance Corp. 11,725 392,553 Ashland Inc. 11,932 391,966 Williams-Sonoma Inc./1/ 14,519 391,723 Deluxe Corp. 9,758 391,686 SCHEDULES OF INVESTMENTS 15 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Markel Corp./1/ 1,460 $ 389,820 Henry Schein Inc./1/ 6,866 389,302 New Plan Excel Realty Trust 16,690 388,877 Triad Hospitals Inc./1/ 12,825 388,341 Rite Aid Corp./1/ 75,190 387,980 PMC-Sierra Inc./1/ 29,232 385,599 Pharmaceutical Resources Inc./1/ 5,647 385,238 Mack-Cali Realty Corp. 9,799 384,121 Belo (A.H.) Corp. 15,818 383,586 Developers Diversified Realty Corp. 12,837 383,441 DPL Inc. 22,261 381,776 Neuberger Berman Inc. 9,117 381,729 Fastenal Co. 10,097 381,667 Noble Energy Inc. 9,957 381,353 Cognizant Technology Solutions Corp./1/ 10,443 380,856 Berkley (W.R.) Corp. 11,075 379,429 Hudson City Bancorp Inc. 12,273 378,499 Lamar Advertising Co./1/ 12,889 378,163 UTStarcom Inc./1/ 11,882 377,966 Jacobs Engineering Group Inc./1/ 8,380 377,938 Brunswick Corp. 14,702 377,547 Rowan Companies Inc./1/ 15,342 377,106 Bowater Inc. 8,961 376,900 Fulton Financial Corp. 18,619 373,870 HON Industries Inc. 10,112 373,740 Patterson-UTI Energy Inc./1/ 13,738 371,888 Foundry Networks Inc./1/ 17,225 370,510 Cooper Cameron Corp./1/ 8,010 370,142 Viad Corp. 15,448 368,898 Network Associates Inc./1/ 26,700 367,392 3Com Corp./1/ 62,218 367,086 Sepracor Inc./1/ 13,307 366,475 Millipore Corp./1/ 7,926 365,072 Emulex Corp./1/ 14,313 364,552 Puget Energy Inc. 16,226 363,949 Cypress Semiconductor Corp./1/ 20,584 363,925 Donaldson Co. Inc. 6,744 363,502 Catellus Development Corp./1/ 14,831 362,618 Bemis Co. 8,164 361,665 Navistar International Corp./1/ 9,655 359,938 Bank of Hawaii Corp. 10,710 359,642 Dial Corp. (The) 16,696 359,632 Great Plains Energy Inc. 11,853 359,383 Federated Investors Inc. Class B 12,934 358,272 Weingarten Realty Investors 7,950 357,750 Hospitality Properties Trust 10,197 357,711 Smucker (J.M.) Co. (The) 8,445 356,041 Investors Financial Services Corp. 11,204 351,806 Sonoco Products Co. 15,958 350,278 City National Corp. 6,859 349,535 United Dominion Realty Trust Inc. 19,080 349,355 NTL Inc./1/ 7,399 348,641 ICOS Corp./1/ 9,079 347,907 Compuware Corp./1/ 64,613 346,326 Wilmington Trust Corp. 11,227 345,343 Pentair Inc. 8,601 342,922 ITT Educational Services Inc./1/ 7,148 342,532 Avnet Inc./1/ 20,690 341,799 Chesapeake Energy Corp. 31,702 341,748 Dow Jones & Co. Inc. 7,215 341,630 Maytag Corp. 13,658 341,040 Stanley Works (The) 11,489 339,155 ImClone Systems Inc./1/ 8,733 338,142 Autodesk Inc. 19,862 338,051 Tektronix Inc./1/ 13,650 337,838 FirstMerit Corp. 13,611 336,736 Macerich Co. (The) 8,879 335,182 Sky Financial Group Inc. 14,726 331,482 Apogent Technologies Inc./1/ 15,883 331,319 Novell Inc./1/ 61,929 330,082 American Tower Corp. Class A/1/ 32,457 329,439 Protective Life Corp. 11,034 329,365 Pride International Inc./1/ 19,406 328,932 OGE Energy Corp. 14,537 328,391 Cullen/Frost Bankers Inc. 8,811 328,034 ADC Telecommunications Inc./1/ 140,549 327,479 Ryland Group Inc. 4,470 326,802 16 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Zebra Technologies Corp. Class A/1/ 6,337 $ 326,799 DaVita Inc./1/ 10,178 323,966 Big Lots Inc./1/ 20,399 322,508 HCC Insurance Holdings Inc. 11,072 321,974 United States Steel Corp. 17,445 320,639 Performance Food Group Co./1/ 7,865 320,184 Webster Financial Corp. 7,983 318,362 Allied Waste Industries Inc./1/ 29,447 318,028 Hubbell Inc. Class B 8,689 317,062 Cabot Corp. 11,075 315,748 Alliant Techsystems Inc./1/ 6,536 314,055 Martin Marietta Materials Inc. 8,588 313,033 Arrow Electronics Inc./1/ 17,010 312,814 Circuit City Stores Inc. 32,820 312,775 Precision Castparts Corp. 8,896 312,250 Reynolds & Reynolds Co. (The) Class A 11,316 311,756 Certegy Inc. 9,702 311,531 Washington Federal Inc. 12,339 311,066 Integrated Circuit Systems Inc./1/ 10,347 310,824 Colonial BancGroup Inc. (The) 21,453 309,781 Applebee's International Inc. 9,765 307,402 Education Management Corp./1/ 5,314 306,458 BorgWarner Inc. 4,512 306,139 PerkinElmer Inc. 19,983 305,940 CBRL Group Inc. 8,600 305,128 Graco Inc. 8,108 304,455 Calpine Corp./1/ 62,254 304,422 Waddell & Reed Financial Inc. Class A 12,897 303,982 Philadelphia Suburban Corp. 12,573 302,758 AGL Resources Inc. 10,724 302,095 BancorpSouth Inc. 13,770 301,563 Pier 1 Imports Inc. 15,648 301,068 Mandalay Resort Group 7,600 301,036 Advanced Fibre Communications Inc./1/ 14,348 300,878 Human Genome Sciences Inc./1/ 21,988 300,356 Hormel Foods Corp. 13,070 300,349 Vectren Corp. 12,708 300,163 Corporate Executive Board Co. (The)/1/ 6,393 300,151 Nationwide Financial Services Inc. 9,557 299,516 ARAMARK Corp. Class B/1/ 11,921 298,383 Herman Miller Inc. 13,088 298,014 Rayonier Inc. 7,318 297,111 Weight Watchers International Inc./1/ 7,137 296,899 Independence Community Bank Corp. 8,481 296,241 Newfield Exploration Co./1/ 7,665 295,639 Renal Care Group Inc./1/ 8,632 294,783 Entercom Communications Corp./1/ 6,574 294,647 Cheesecake Factory (The)/1/ 8,113 293,447 Reebok International Ltd. 8,737 292,078 First American Corp. 11,698 291,280 Lee Enterprises Inc. 7,517 290,682 PacifiCare Health Systems Inc./1/ 5,941 289,921 Pan Pacific Retail Properties Inc. 6,741 289,863 StanCorp Financial Group Inc. 5,043 289,720 Advance Auto Parts Inc./1/ 4,086 289,697 Atmel Corp./1/ 72,090 289,081 Polycom Inc./1/ 17,391 288,865 Ryder System Inc. 9,844 288,626 Fisher Scientific International Inc./1/ 7,253 287,872 Roslyn Bancorp Inc. 12,236 287,301 Chelsea Property Group Inc. 5,990 286,921 Lubrizol Corp. 8,832 286,598 Edwards Lifesciences Corp./1/ 10,524 284,990 Thornburg Mortgage Inc. 11,243 284,785 Steris Corp./1/ 12,319 283,583 BRE Properties Inc. Class A 8,540 281,649 Tech Data Corp./1/ 9,102 280,797 Arden Realty Inc. 10,009 279,451 Hudson United Bancorp 7,934 279,039 Fairchild Semiconductor International Inc. Class A/1/ 16,808 278,677 Snap-On Inc. 10,039 277,578 Smithfield Foods Inc./1/ 14,440 277,248 SCHEDULES OF INVESTMENTS 17 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Lyondell Chemical Co. 21,667 $ 276,904 SICOR Inc./1/ 14,304 275,781 Cummins Inc. 6,193 275,155 CarrAmerica Realty Corp. 9,193 274,411 Polaris Industries Inc. 3,697 274,133 FNB Corp. (Florida) 7,926 273,447 Sirius Satellite Radio Inc./1/ 149,042 272,747 Neurocrine Biosciences Inc./1/ 5,496 272,162 Tidewater Inc. 9,585 271,256 Hawaiian Electric Industries Inc. 6,221 270,800 Del Monte Foods Co./1/ 31,083 270,733 Federal Realty Investment Trust 7,338 270,479 AmeriCredit Corp./1/ 26,156 269,407 CNF Inc. 8,338 267,233 Meredith Corp. 5,778 266,770 Stericycle Inc./1/ 5,646 266,322 Brown & Brown Inc. 8,613 265,108 Annaly Mortgage Management Inc. 16,136 264,953 ONEOK Inc. 13,134 264,913 Nicor Inc. 7,538 264,885 CenterPoint Properties Corp. 3,886 264,675 Transatlantic Holdings Inc. 3,721 264,638 Teleflex Inc. 6,079 264,011 Macromedia Inc./1/ 10,646 263,382 Shurgard Storage Centers Inc. Class A 7,461 263,373 Harsco Corp. 6,843 263,250 O'Reilly Automotive Inc./1/ 7,157 263,163 Medicis Pharmaceutical Corp. Class A 4,480 262,528 Ruby Tuesday Inc. 10,881 262,341 National Fuel Gas Co. 11,441 261,427 Cablevision Systems Corp./1/ 14,387 260,405 Neiman-Marcus Group Inc. Class A/1/ 6,226 259,624 Varco International Inc./1/ 15,349 259,552 National-Oilwell Inc./1/ 14,305 259,493 RPM International Inc. 19,852 259,267 Borders Group Inc./1/ 13,695 259,109 Leucadia National Corp. 6,774 256,396 Westamerica Bancorp 5,729 254,654 XM Satellite Radio Holdings Inc. Class A/1/ 16,389 254,521 BISYS Group Inc. (The)/1/ 19,305 253,861 Peoples Energy Corp. 6,119 253,204 Apria Healthcare Group Inc./1/ 9,231 252,745 Coors (Adolf) Company Class B 4,690 252,134 Delta Air Lines Inc. 18,829 250,426 Pixar Inc./1/ 3,762 250,399 Old National Bancorp 11,187 250,029 Reliant Resources Inc./1/ 48,684 249,262 Applied Micro Circuits Corp./1/ 50,996 248,351 MONY Group Inc. (The) 7,629 248,324 Unitrin Inc. 8,102 246,787 ResMed Inc./1/ 5,591 245,892 Hunt (J.B.) Transport Services Inc./1/ 9,419 245,082 Raymond James Financial Inc. 6,736 244,854 Saks Inc./1/ 21,170 244,090 Toll Brothers Inc./1/ 7,994 243,177 First Midwest Bancorp Inc. 8,138 241,780 Cytec Industries Inc./1/ 6,499 237,213 Respironics Inc./1/ 5,677 237,185 DeVry Inc./1/ 9,966 235,796 Rambus Inc./1/ 13,981 234,601 International Speedway Corp. Class A 5,340 234,373 Realty Income Corp. 5,906 234,173 Ingram Micro Inc. Class A/1/ 17,847 232,903 Regis Corp. 7,253 232,821 IndyMac Bancorp Inc. 10,011 231,955 Charles River Laboratories International Inc./1/ 7,555 231,863 Whitney Holding Corp. 6,795 231,030 Brocade Communications Systems Inc./1/ 44,135 230,385 Integrated Device Technology Inc./1/ 18,549 230,379 Cree Inc./1/ 12,392 229,500 Service Corp. International/1/ 50,163 229,245 American Capital Strategies Ltd. 9,209 228,936 18 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Trustmark Corp. 8,437 $ 228,896 Helmerich & Payne Inc. 8,734 228,307 WGL Holdings Inc. 8,233 227,066 Healthcare Realty Trust Inc. 7,080 226,418 99 Cents Only Stores/1/ 7,000 226,380 Camden Property Trust 5,884 226,122 Park National Corp. 2,014 225,367 Carlisle Companies Inc. 5,160 225,079 IDEXX Laboratories Inc./1/ 5,291 224,815 WPS Resources Corp. 5,456 224,787 CheckFree Corp./1/ 11,235 224,700 Andrx Group/1/ 12,124 224,415 Protein Design Labs Inc./1/ 16,188 224,366 Claire's Stores Inc. 6,679 223,479 Mettler Toledo International Inc./1/ 6,176 222,027 Amkor Technology Inc./1/ 15,581 221,406 Owens-Illinois Inc./1/ 19,234 219,652 Mills Corp. 5,570 219,179 Silicon Laboratories Inc./1/ 4,865 218,682 HRPT Properties Trust 23,912 218,556 AptarGroup Inc. 5,922 217,278 BearingPoint Inc./1/ 27,226 217,263 Church & Dwight Co. Inc. 6,165 215,713 AGCO Corp./1/ 12,576 215,553 National Instruments Corp. 5,350 215,337 Forest City Enterprises Inc. Class A 4,903 214,506 Avocent Corp./1/ 7,081 214,483 McDATA Corp. Class A/1/ 17,859 213,772 Red Hat Inc./1/ 21,104 213,150 FMC Technologies Inc./1/ 9,905 212,165 Key Energy Services Inc./1/ 21,945 211,769 Wiley (John) & Sons Inc. Class A 8,138 211,507 AMETEK Inc. 4,927 211,171 La-Z-Boy Inc. 9,476 210,367 ICN Pharmaceuticals Inc. 12,252 210,244 Affymetrix Inc./1/ 9,906 207,927 Crane Co. 8,821 206,500 Piedmont Natural Gas Co. 5,291 206,349 Henry (Jack) & Associates Inc. 11,793 205,080 Provident Financial Group Inc. 7,332 205,003 Swift Transportation Co. Inc./1/ 9,016 204,573 UGI Corp. 7,063 204,333 ADTRAN Inc. 3,317 202,934 Barnes & Noble Inc./1/ 7,980 202,772 Jeffries Group Inc. 7,035 202,256 NetScreen Technologies Inc./1/ 9,066 201,537 Ethan Allen Interiors Inc. 5,589 201,204 ArvinMeritor Inc. 11,218 199,793 Radio One Inc. Class D/1/ 13,834 198,656 Furniture Brands International Inc./1/ 8,235 198,463 Metro-Goldwyn-Mayer Inc./1/ 12,885 197,656 Packaging Corporation of America/1/ 10,147 197,055 Mercury General Corp. 4,377 196,002 Pharmaceutical Product Development Inc./1/ 8,166 195,902 Lancaster Colony Corp. 4,911 195,310 Imation Corp. 5,975 195,084 Duquesne Light Holdings Inc. 12,548 194,494 Lafarge North America Inc. 5,582 194,254 Scotts Co. (The) Class A/1/ 3,550 194,185 Readers Digest Association Inc. (The) 13,875 194,111 Boise Cascade Corp. 6,982 192,703 Valassis Communications Inc./1/ 7,298 192,667 DoubleClick Inc./1/ 17,822 191,943 Crescent Real Estate Equities Co. 13,020 188,790 Polo Ralph Lauren Corp. 7,036 188,706 McClatchy Co. (The) Class A 3,172 188,671 Community Health Systems Inc./1/ 8,669 188,117 Getty Images Inc./1/ 5,315 186,875 Harte-Hanks Inc. 10,033 185,009 Acxiom Corp./1/ 11,601 182,832 Station Casinos Inc. 5,946 181,948 IKON Office Solutions Inc. 24,779 181,134 International Bancshares Corp. 4,344 180,059 Trizec Properties Inc. 14,668 179,830 Total System Services Inc. 6,815 179,575 Friedman, Billings, Ramsey Group, Inc. Class A 10,386 179,158 SCHEDULES OF INVESTMENTS 19 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Diamond Offshore Drilling Inc. 9,374 $ 179,043 United Bancshares Inc. 5,948 178,143 University of Phoenix Online/1/ 2,662 177,236 Airgas Inc. 9,939 176,914 First Bancorp 5,689 174,937 Hovnanian Enterprises Inc. Class A/1/ 2,708 174,314 CBL & Associates Properties Inc. 3,480 173,652 Global Payments Inc. 4,785 172,260 Downey Financial Corp. 3,675 171,733 Cousins Properties Inc. 6,182 171,550 Grant Prideco Inc./1/ 16,799 171,182 St. Joe Company (The) 5,316 170,537 Erie Indemnity Co. Class A 4,382 170,460 Dynegy Inc. Class A/1/ 47,336 170,410 Amphenol Corp. Class A/1/ 3,261 169,735 Gemstar-TV Guide International Inc./1/ 35,756 169,126 Florida Rock Industries Inc. 3,385 167,896 Media General Inc. Class A 2,695 164,664 Peabody Energy Corp. 5,248 164,630 IDT Corp./1/ 9,280 164,070 Loews Corporation - Carolina Group 6,945 159,735 American National Insurance Co. 1,860 158,193 PepsiAmericas Inc. 10,643 154,217 Regency Centers Corp. 4,184 154,180 Talbots Inc. (The) 4,386 152,852 M.D.C. Holdings Inc. 2,821 152,334 BlackRock Inc. 3,042 149,058 Bio-Rad Laboratories Inc. Class A/1/ 2,889 147,339 Blyth Inc. 5,442 146,825 Scholastic Corp./1/ 5,078 146,196 InterDigital Communications Corp./1/ 9,673 145,095 Werner Enterprises Inc. 6,279 143,852 FactSet Research Systems Inc. 3,188 141,388 American Axle & Manufacturing Holdings Inc./1/ 4,767 141,008 Worthington Industries Inc. 11,214 140,848 Winn-Dixie Stores Inc. 14,454 139,481 Reinsurance Group of America Inc. 3,418 139,283 Tootsie Roll Industries Inc. 4,393 136,183 Cox Radio Inc. Class A/1/ 6,133 134,129 People's Bank 4,355 130,389 Blockbuster Inc. 6,135 128,835 Crown Castle International Corp./1/ 13,617 128,136 Timberland Co. Class A/1/ 2,999 127,937 AVX Corp. 9,330 127,728 Timken Co. (The) 8,307 126,599 Premcor Inc./1/ 5,454 126,369 Columbia Sportswear Co./1/ 2,345 123,699 LaBranche & Co. Inc. 8,468 123,633 LNR Property Corp. 3,008 123,178 Westport Resources Corp./1/ 5,183 122,008 Hearst-Argyle Television Inc./1/ 4,977 120,443 American Financial Group Inc. 5,505 119,734 Alleghany Corp./1/ 593 115,783 LeapFrog Enterprises Inc./1/ 3,046 115,748 Capitol Federal Financial 3,829 112,419 United Defense Industries Inc./1/ 3,942 111,913 Western Gas Resources Inc. 2,940 111,720 WellChoice Inc./1/ 3,665 110,426 Endo Pharmaceuticals Holdings Inc./1/ 5,377 109,960 Marvel Enterprises Inc./1/ 4,809 107,000 BOK Financial Corp./1/ 2,726 102,688 Nuveen Investments Inc. Class A 3,716 102,190 Nextel Partners Inc. Class A/1/ 12,427 97,552 Interactive Data Corp./1/ 6,078 96,032 Regal Entertainment Group Class A 5,159 95,957 Instinet Group Inc./1/ 20,086 95,790 CNA Financial Corp./1/ 4,427 93,056 American Pharmaceutical Partners Inc./1/ 2,958 92,749 RealNetworks Inc./1/ 14,053 92,047 UnitedGlobalCom Inc. Class A/1/ 14,841 90,679 MSC Industrial Direct Co. Inc. Class A 4,272 89,071 United States Cellular Corp./1/ 2,991 87,038 20 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Wynn Resorts Ltd./1/ 4,483 $ 81,501 Wesco Financial Corp. 230 78,193 Alliance Data Systems Corp./1/ 2,947 77,801 Eon Labs Inc./1/ 2,011 77,122 Student Loan Corp. 646 77,087 Steelcase Inc. Class A 6,443 75,899 West Corp./1/ 3,125 74,344 PanAmSat Corp./1/ 4,992 72,284 Entravision Communications Corp./1/ 7,481 71,069 CONSOL Energy Inc. 3,722 69,155 Hewitt Associates Inc. Class A/1/ 2,733 66,549 Texas Genco Holdings Inc. 2,408 57,310 Chicago Mercantile Exchange Holdings Inc. 733 50,438 Southern Peru Copper Corp. 2,065 45,678 Odyssey Re Holdings Corp. 1,907 39,246 MEMC Electronics Materials Inc./1/ 3,219 35,119 DQE Inc. 80 1,240 McLeodUSA Inc. Class A Escrow/2/ 21,438 - TOTAL COMMON STOCKS (Cost: $1,674,814,342) 1,659,180,653 SHORT TERM INVESTMENTS - 6.02% MONEY MARKET FUNDS - 3.63% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares/3/,/4/ 40,319,946 40,319,946 Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares/3/,/4/ 14,513,808 14,513,808 BlackRock Temp Cash Money Market Fund/3/ 644,732 644,732 Short Term Investment Co. - Liquid Assets Money Market Portfolio/3/ 3,421,979 3,421,979 SHARES OR SECURITY PRINCIPAL VALUE ---------------------------------------------------------------------------- Short Term Investment Co. - Prime Money Market Portfolio, Institutional Shares/3/ 1,319,437 $ 1,319,437 60,219,902 FLOATING RATE NOTES - 1.39% Beta Finance Inc. 1.08%, 05/20/04/3/ $ 659,719 659,656 1.08%, 09/15/04/3/ 1,319,437 1,319,311 1.17%, 08/23/04/3/ 659,719 660,225 CC USA Inc. 1.06%, 05/24/04/3/ 1,319,437 1,319,353 1.08%, 04/19/04/3/ 580,552 580,536 1.12%, 07/15/04/3/ 659,719 659,906 Dorada Finance Inc. 1.08%, 05/20/04/3/ 1,319,437 1,319,312 1.24%, 08/09/04/3/ 329,859 329,817 Five Finance Inc. 1.09%, 04/15/04/3/ 659,719 659,719 HBOS Treasury Services PLC 1.13%, 06/24/08/3/ 1,319,437 1,319,437 Holmes Financing PLC 1.08%, 04/15/04/3/ 263,887 263,887 K2 USA LLC 1.08%, 08/16/04/3/ 329,859 329,816 1.08%, 09/27/04/3/ 1,424,992 1,424,781 1.09%, 04/13/04/3/ 659,719 659,701 1.09%, 05/17/04/3/ 659,719 659,698 Links Finance LLC 1.05%, 07/20/04/3/ 527,775 527,690 1.08%, 05/04/04/3/ 659,719 659,699 1.08%, 06/28/04/3/ 659,719 659,621 1.09%, 03/29/04/3/ 659,719 659,719 Nationwide Building Society 1.08%, 07/23/04/3/ 989,578 989,578 Sigma Finance Inc. 1.05%, 07/20/04/3/ 659,719 659,613 1.07%, 10/15/03/3/ 1,319,437 1,319,432 1.07%, 07/01/04/3/ 659,719 659,595 1.24%, 08/06/04/3/ 329,859 329,831 SCHEDULES OF INVESTMENTS 21 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE ---------------------------------------------------------------------------- Tango Finance Corp. 1.05%, 07/15/04/3/ $ 395,831 $ 395,728 1.06%, 07/06/04/3/ 395,831 395,800 WhistleJacket Capital LLC 1.08%, 09/15/04/3/ 659,719 659,592 White Pine Finance LLC 1.08%, 05/17/04/3/ 791,662 791,662 1.08%, 07/06/04/3/ 791,662 791,604 1.08%, 08/26/04/3/ 659,719 659,627 1.09%, 04/20/04/3/ 659,719 659,719 22,983,665 COMMERCIAL PAPER - 0.72% Amsterdam Funding Corp. 1.06%, 10/16/03/3/ 626,733 626,455 Blue Ridge Asset Funding Corp. 1.05%, 10/17/03/3/ 659,719 659,411 Edison Asset Securitization 1.07%, 10/23/03/3/ 1,240,271 1,239,460 Gemini Securitization Corp. 1.05%, 10/17/03/3/ 461,803 461,587 Greenwich Funding Corp. 1.06%, 10/16/03/3/ 778,468 778,124 Jupiter Securitization Corp. 1.05%, 10/20/03/3/ 659,719 659,353 New Center Asset Trust 1.06%, 10/22/03/3/ 659,719 659,311 Park Avenue Receivables Corp. 1.05%, 10/20/03/3/ 659,719 659,353 Preferred Receivables Funding Corp. 1.06%, 10/08/03/3/ 659,719 659,583 Receivables Capital Corp. 1.05%, 10/15/03/3/ 443,436 443,255 Sydney Capital Corp. 1.07%, 10/17/03/3/ 534,372 534,118 UBS Finance (Delaware) Inc. 1.03%, 10/08/03/3/ 1,319,437 1,319,173 1.05%, 10/15/03/3/ 659,719 659,449 1.11%, 10/01/03/3/ 2,638,874 2,638,874 11,997,506 TIME DEPOSITS - 0.22% Abbey National Treasury Services PLC 1.15%, 10/01/03/3/ 659,719 659,719 Canadian Imperial Bank of Commerce 1.06%, 10/08/03/3/ 329,859 329,859 1.08%, 10/30/03/3/ 527,775 527,775 1.37%, 08/26/04/3/ 1,319,437 1,319,437 Toronto-Dominion Bank 1.33%, 08/23/04/3/ 857,634 857,248 3,694,038 REPURCHASE AGREEMENTS - 0.06% Lehman Brothers Inc. 1.10%, 10/01/03/3/ 1,055,550 1,055,550 1,055,550 TOTAL SHORT TERM INVESTMENTS (Cost: $99,950,661) 99,950,661 TOTAL INVESTMENTS IN SECURITIES - 105.93% (Cost $1,774,765,003) 1,759,131,314 OTHER ASSETS, LESS LIABILITIES - (5.93%) (98,514,783) --------------- NET ASSETS - 100.00% $ 1,660,616,531 =============== /1/ Non-income earning securities. /2/ Security valued at fair value in accordance with procedures approved by the Board of Trustees. See Note 1. /3/ All or a portion of this security represents investments of securities lending collateral. /4/ Issuer is an affiliate of the Fund's investment advisor. See Note 2. SEE NOTES TO FINANCIAL STATEMENTS. 22 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) iSHARES RUSSELL 1000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- COMMON STOCKS - 99.95% General Electric Co. 2,381,171 $ 70,982,708 Microsoft Corp. 2,130,768 59,214,043 Pfizer Inc. 1,880,884 57,141,256 Intel Corp. 1,556,771 42,826,770 Wal-Mart Stores Inc. 633,229 35,365,840 Johnson & Johnson 707,351 35,028,022 Cisco Systems Inc./1/ 1,672,290 32,676,547 Amgen Inc./1/ 307,145 19,832,353 Coca-Cola Co. (The) 435,418 18,705,557 Procter & Gamble Co. 197,170 18,301,319 Dell Inc./1/ 542,582 18,116,813 Home Depot Inc. 546,363 17,401,662 International Business Machines Corp. 192,457 16,999,727 PepsiCo Inc. 362,584 16,617,225 Fannie Mae 233,388 16,383,838 American International Group Inc. 279,002 16,098,415 Abbott Laboratories 371,811 15,820,558 Lilly (Eli) & Co. 230,025 13,663,485 Medtronic Inc. 290,641 13,636,876 Wyeth 279,062 12,864,758 Merck & Co. Inc. 236,124 11,952,597 3M Co. 165,034 11,398,898 Oracle Corp./1/ 923,314 10,359,583 Anheuser-Busch Companies Inc. 198,863 9,811,900 Lowe's Companies Inc. 181,252 9,406,979 Texas Instruments Inc. 412,249 9,399,277 American Express Co. 203,782 9,182,417 Target Corp. 217,076 8,168,570 QUALCOMM Inc. 188,205 7,836,856 United Parcel Service Inc. Class B 122,334 7,804,909 Walgreen Co. 244,323 7,486,057 Applied Materials Inc./1/ 394,617 7,158,352 First Data Corp. 178,340 7,126,466 Comcast Corp. Class A/1/ 224,359 6,928,206 UnitedHealth Group Inc. 132,365 6,660,607 Fifth Third Bancorp 119,554 6,631,660 EMC Corp./1/ 521,433 6,585,699 Colgate-Palmolive Co. 114,387 6,393,089 Cardinal Health Inc. 106,461 6,216,258 Marsh & McLennan Companies Inc. 127,609 6,075,464 Bristol-Myers Squibb Co. 231,533 5,941,137 Viacom Inc. Class B 145,909 5,588,315 Boeing Co. (The) 156,561 5,374,739 eBay Inc./1/ 99,922 5,346,826 Sysco Corp. 155,012 5,070,443 Altria Group Inc. 113,540 4,973,052 Boston Scientific Corp./1/ 76,783 4,898,755 Automatic Data Processing Inc. 134,708 4,829,282 Gillette Co. (The) 150,251 4,805,027 MBNA Corp. 190,621 4,346,159 Yahoo! Inc./1/ 118,788 4,202,719 Forest Laboratories Inc./1/ 81,349 4,185,406 Baxter International Inc. 142,520 4,141,631 Genentech Inc./1/ 48,903 3,919,086 Nextel Communications Inc. Class A/1/ 195,127 3,842,051 SLM Corp. 98,346 3,831,560 Kohls Corp./1/ 68,229 3,650,251 Harley-Davidson Inc. 72,093 3,474,883 Guidant Corp. 73,743 3,454,860 United Technologies Corp. 44,617 3,448,002 HCA Inc. 92,452 3,407,781 Analog Devices Inc./1/ 87,150 3,313,443 Omnicom Group Inc. 44,968 3,230,951 Progressive Corp. (The) 46,529 3,215,619 Veritas Software Corp./1/ 98,901 3,105,491 Maxim Integrated Products Inc. 77,415 3,057,893 Schwab (Charles) Corp. (The) 252,489 3,007,144 Best Buy Co. Inc./1/ 62,232 2,957,265 Motorola Inc. 225,671 2,701,282 Staples Inc./1/ 113,250 2,689,688 Bed Bath & Beyond Inc./1/ 70,406 2,688,101 Gap Inc. (The) 156,947 2,686,933 Starbucks Corp./1/ 93,137 2,682,346 Linear Technology Corp. 74,771 2,677,550 Gilead Sciences Inc./1/ 47,701 2,667,917 Paychex Inc. 78,627 2,667,814 Illinois Tool Works Inc. 40,000 2,650,400 Zimmer Holdings Inc./1/ 46,874 2,582,757 WellPoint Health Networks Inc./1/ 33,131 2,553,737 Amazon.com Inc./1/ 52,508 2,539,287 SCHEDULES OF INVESTMENTS 23 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- AFLAC Inc. 77,746 $ 2,511,196 Walt Disney Co. (The) 123,276 2,486,477 Stryker Corp. 32,973 2,483,197 Electronic Arts Inc./1/ 26,772 2,469,182 McGraw-Hill Companies Inc. (The) 39,505 2,454,446 Allergan Inc. 31,038 2,443,622 TJX Companies Inc. 122,881 2,386,349 Nike Inc. Class B 39,178 2,382,806 InterActiveCorp/1/ 70,626 2,334,189 KLA-Tencor Corp./1/ 45,390 2,333,046 St. Jude Medical Inc./1/ 42,938 2,308,776 International Game Technology Inc. 81,561 2,295,942 Halliburton Co. 94,621 2,294,559 Xilinx Inc./1/ 80,473 2,294,285 Computer Associates International Inc. 86,547 2,259,742 Clear Channel Communications Inc. 58,314 2,233,426 Symantec Corp./1/ 35,252 2,221,581 Adobe Systems Inc. 55,254 2,169,272 Liberty Media Corp. Class A/1/ 216,854 2,162,034 General Mills Inc. 45,469 2,140,226 Intuit Inc./1/ 44,018 2,123,428 Genzyme Corp. - General Division/1/ 45,863 2,121,164 Southwest Airlines Co. 119,742 2,119,433 Newmont Mining Corp. 53,695 2,098,938 EchoStar Communications Corp./1/ 54,469 2,084,529 Yum! Brands Inc./1/ 69,807 2,067,683 Biomet Inc. 61,480 2,066,343 Waste Management Inc. 78,188 2,046,180 Apollo Group Inc. Class A/1/ 30,582 2,019,329 Mattel Inc. 104,947 1,989,795 Freddie Mac 37,965 1,987,468 MedImmune Inc./1/ 60,182 1,986,608 AT&T Wireless Services Inc./1/ 239,769 1,961,310 Capital One Financial Corp. 34,017 1,940,330 Kimberly-Clark Corp. 37,008 1,899,251 Danaher Corp. 25,572 1,888,748 Block (H & R) Inc. 42,897 1,851,006 Baker Hughes Inc. 62,043 1,835,852 Wrigley (William Jr.) Co. 32,164 1,778,669 Lexmark International Inc./1/ 28,156 1,774,110 FedEx Corp. 27,329 1,760,807 Becton, Dickinson & Co. 48,286 1,744,090 Altera Corp./1/ 91,370 1,726,893 Mylan Laboratories Inc. 43,268 1,672,308 SunGard Data Systems Inc./1/ 63,189 1,662,503 Synovus Financial Corp. 65,913 1,647,166 Moody's Corp. 29,815 1,638,931 Concord EFS Inc./1/ 116,586 1,593,731 Fiserv Inc./1/ 43,504 1,576,150 Corning Inc./1/ 162,936 1,534,857 General Motors Corp. Class H/1/ 104,694 1,498,171 Network Appliance Inc./1/ 72,101 1,480,234 Pitney Bowes Inc. 37,659 1,443,093 Family Dollar Stores Inc. 35,789 1,427,623 AutoZone Inc./1/ 15,900 1,423,527 Caremark Rx Inc./1/ 62,067 1,402,714 Sara Lee Corp. 76,282 1,400,538 Broadcom Corp. Class A/1/ 51,937 1,382,563 Dollar General Corp. 68,184 1,363,680 Biogen Inc./1/ 35,254 1,347,760 Mellon Financial Corp. 44,327 1,336,016 Costco Wholesale Corp./1/ 41,884 1,301,755 McKesson Corp. 37,640 1,253,036 Health Management Associates Inc. Class A 56,894 1,240,858 American Standard Companies Inc./1/ 14,648 1,234,094 ITT Industries Inc. 20,434 1,222,771 IMS Health Inc. 57,943 1,222,597 Wells Fargo & Company 23,734 1,222,301 BJ Services Co./1/ 35,600 1,216,452 Heinz (H.J.) Co. 35,218 1,207,273 National Semiconductor Corp./1/ 36,963 1,193,535 Juniper Networks Inc./1/ 79,790 1,190,467 Coach Inc./1/ 21,712 1,185,475 Microchip Technology Inc. 48,609 1,163,699 Avery Dennison Corp. 22,915 1,157,666 Marriott International Inc. Class A 26,804 1,153,376 JDS Uniphase Corp./1/ 320,111 1,152,400 Ecolab Inc. 45,486 1,148,521 24 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- RadioShack Corp. 40,142 $ 1,140,434 Agere Systems Inc. Class B/1/ 391,737 1,132,120 EOG Resources Inc. 27,113 1,131,697 Affiliated Computer Services Inc. Class A/1/ 23,122 1,125,810 Chiron Corp./1/ 21,332 1,102,651 Anadarko Petroleum Corp. 26,272 1,097,119 Morgan Stanley 21,324 1,076,009 BEA Systems Inc./1/ 88,205 1,062,870 Quest Diagnostics Inc./1/ 17,510 1,061,806 Sprint Corp. (PCS Group)/1/ 185,119 1,060,732 QLogic Corp./1/ 22,425 1,054,199 Univision Communications Inc. Class A/1/ 32,942 1,051,840 Cintas Corp. 28,527 1,050,935 Freeport-McMoRan Copper & Gold Inc. 31,353 1,037,784 Career Education Corp./1/ 22,902 1,037,461 Cendant Corp./1/ 55,225 1,032,155 Du Pont (E.I.) de Nemours and Co. 25,707 1,028,537 Synopsys Inc./1/ 33,104 1,018,610 Lockheed Martin Corp. 21,885 1,009,993 Novellus Systems Inc./1/ 29,303 988,976 Tiffany & Co. 26,268 980,584 Kinder Morgan Inc. 18,155 980,552 Kellogg Co. 29,079 969,785 IDEC Pharmaceuticals Corp./1/ 28,942 959,427 Sealed Air Corp./1/ 20,159 952,110 New York Times Co. Class A 21,882 950,992 Applera Corp. - Applied Biosystems Group 42,250 942,597 Laboratory Corp. of America Holdings/1/ 32,835 942,365 Legg Mason Inc. 13,033 940,983 Clorox Co. 20,413 936,344 Anthem Inc./1/ 13,089 933,638 Varian Medical Systems Inc./1/ 16,155 928,589 SanDisk Corp./1/ 14,528 926,015 Express Scripts Inc./1/ 14,851 908,139 Dollar Tree Stores Inc./1/ 27,074 906,979 Newell Rubbermaid Inc. 41,758 904,896 Masco Corp. 36,814 901,207 Jabil Circuit Inc./1/ 33,391 869,836 Citrix Systems Inc./1/ 39,062 862,489 Emerson Electric Co. 16,292 857,774 Hershey Foods Corp. 11,763 854,935 Ross Stores Inc. 18,377 851,958 Bank of New York Co. Inc. (The) 29,166 849,022 Patterson Dental Co./1/ 14,479 833,701 DENTSPLY International Inc. 18,587 833,441 Celgene Corp./1/ 19,109 827,993 Oxford Health Plans Inc./1/ 19,899 822,028 CDW Corp. 14,181 818,811 JetBlue Airways Corp./1/ 13,393 816,571 Teradyne Inc./1/ 43,710 813,006 Aetna Inc. 13,278 810,356 Waters Corp./1/ 29,535 810,145 Lincare Holdings Inc./1/ 22,042 807,839 CarMax Inc./1/ 24,686 806,245 Mercury Interactive Corp./1/ 17,547 796,809 Expeditors International Washington Inc. 23,032 792,531 Micron Technology Inc./1/ 58,734 788,210 Bard (C.R.) Inc. 11,015 782,065 AdvancePCS/1/ 17,098 779,156 Molex Inc. 26,877 768,413 Estee Lauder Companies Inc. Class A 22,490 766,909 Brinker International Inc./1/ 22,963 766,046 PETsMART Inc./1/ 33,415 758,521 AmerisourceBergen Corp. 13,887 750,592 Barr Laboratories Inc./1/ 10,902 743,625 Black & Decker Corp. 18,314 742,633 Medco Health Solutions Inc./1/ 28,479 738,460 AES Corp. (The)/1/ 98,724 732,532 Dun & Bradstreet Corp./1/ 17,579 730,232 New York Community Bancorp Inc. 23,015 725,203 Unisys Corp./1/ 53,566 724,748 Praxair Inc. 11,646 721,470 T. Rowe Price Group Inc. 17,422 718,832 Dow Chemical Co. (The) 21,836 710,543 Pepsi Bottling Group Inc. 34,014 700,008 Harrah's Entertainment Inc. 16,605 699,237 BMC Software Inc./1/ 50,062 697,364 SCHEDULES OF INVESTMENTS 25 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Robert Half International Inc./1/ 35,071 $ 683,885 Whole Foods Market Inc./1/ 12,154 670,658 ChoicePoint Inc./1/ 19,926 667,521 Lam Research Corp./1/ 30,105 666,826 Beckman Coulter Inc. 14,362 654,045 Hilton Hotels Corp. 39,926 647,600 DST Systems Inc./1/ 17,122 643,787 Doral Financial Corp. 13,594 638,918 IVAX Corp./1/ 32,549 637,960 Gentex Corp./1/ 18,080 629,907 Chico's FAS Inc./1/ 20,517 628,641 Campbell Soup Co. 23,712 628,368 Darden Restaurants Inc. 32,844 624,036 Ameritrade Holding Corp./1/ 55,354 622,732 Commerce Bancorp Inc. 12,918 618,901 Scripps (E.W.) Co. Class A 7,268 618,507 Amylin Pharmaceuticals Inc./1/ 21,842 616,818 Ball Corp. 11,421 616,734 CH Robinson Worldwide Inc. 16,540 615,453 Fair Isaac Corp. 10,428 614,835 Equifax Inc. 27,543 613,383 NVR Inc./1/ 1,314 612,981 Westwood One Inc./1/ 20,164 608,751 Western Digital Corp./1/ 46,626 601,009 Gallagher (Arthur J.) & Co. 21,248 600,893 Abercrombie & Fitch Co. Class A/1/ 21,605 598,675 Harman International Industries Inc. 6,073 597,280 Monster Worldwide Inc./1/ 23,451 590,496 Corinthian Colleges Inc./1/ 10,316 589,663 Smith International Inc./1/ 16,371 589,029 McCormick & Co. Inc. 21,361 585,719 SEI Investment Co. 17,573 571,123 Coventry Health Care Inc./1/ 10,826 570,963 Symbol Technologies Inc. 47,669 569,645 First Health Group Corp./1/ 21,766 569,181 Mid Atlantic Medical Services Inc./1/ 11,036 567,581 NVIDIA Corp./1/ 35,544 565,541 Avon Products Inc. 8,692 561,156 PeopleSoft Inc./1/ 30,752 559,379 Krispy Kreme Doughnuts Inc./1/ 14,425 555,363 Iron Mountain Inc./1/ 15,273 548,301 Siebel Systems Inc./1/ 56,286 547,100 Williams-Sonoma Inc./1/ 20,276 547,046 Cephalon Inc./1/ 11,900 546,448 Eaton Vance Corp. 16,291 545,423 WebMD Corp./1/ 61,125 545,235 Pharmaceutical Resources Inc./1/ 7,968 543,577 Cognizant Technology Solutions Corp./1/ 14,755 538,115 Rockwell Collins Inc. 21,266 536,967 Fastenal Co. 14,147 534,757 PMC-Sierra Inc./1/ 40,501 534,249 Universal Health Services Inc. Class B/1/ 10,779 533,022 Sanmina-SCI Corp./1/ 54,733 530,910 Michaels Stores Inc. 13,025 530,899 Foundry Networks Inc./1/ 24,345 523,661 UTStarcom Inc./1/ 16,396 521,557 Sepracor Inc./1/ 18,773 517,008 Health Net Inc./1/ 16,302 516,284 Patterson-UTI Energy Inc./1/ 18,905 511,758 Millipore Corp./1/ 11,090 510,805 Fox Entertainment Group Inc. Class A/1/ 17,899 500,993 Millennium Pharmaceuticals Inc./1/ 32,403 498,682 Solectron Corp./1/ 84,617 495,009 Cox Communications Inc. Class A/1/ 15,612 493,651 Federated Investors Inc. Class B 17,738 491,343 Neuberger Berman Inc. 11,688 489,377 Investors Financial Services Corp. 15,577 489,118 TCF Financial Corp. 10,197 488,946 Pall Corp. 21,773 488,586 ITT Educational Services Inc./1/ 10,124 485,142 Manpower Inc. 13,009 482,634 XTO Energy Inc. 22,634 475,088 Cooper Cameron Corp./1/ 10,226 472,543 Maytag Corp. 18,763 468,512 GTECH Holdings Corp. 10,930 468,350 ImClone Systems Inc./1/ 12,045 466,382 Rent-A-Center Inc./1/ 14,423 465,863 VeriSign Inc./1/ 34,277 461,711 Dow Jones & Co. Inc. 9,741 461,236 Network Associates Inc./1/ 33,305 458,277 26 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- DaVita Inc./1/ 14,318 $ 455,742 Zebra Technologies Corp. Class A/1/ 8,706 448,968 Jacobs Engineering Group Inc./1/ 9,760 440,176 Reynolds & Reynolds Co. (The) Class A 15,898 437,990 Education Management Corp./1/ 7,554 435,639 Integrated Circuit Systems Inc./1/ 14,363 431,465 Donaldson Co. Inc. 7,965 429,313 Graco Inc. 11,113 417,293 Certegy Inc. 12,946 415,696 Pactiv Corp./1/ 20,487 415,476 Outback Steakhouse Inc. 10,967 415,320 Corporate Executive Board Co. (The)/1/ 8,844 415,226 Waddell & Reed Financial Inc. Class A 17,598 414,785 ARAMARK Corp. Class B/1/ 16,519 413,471 Applebee's International Inc. 13,116 412,892 Advance Auto Parts Inc./1/ 5,817 412,425 Weight Watchers International Inc./1/ 9,898 411,757 Phelps Dodge Corp./1/ 8,723 408,236 Starwood Hotels & Resorts Worldwide Inc. 11,617 404,272 Cheesecake Factory (The)/1/ 11,112 401,921 Lamar Advertising Co./1/ 13,623 399,699 Herman Miller Inc. 17,461 397,587 Rite Aid Corp./1/ 76,445 394,456 Sigma-Aldrich Corp. 7,550 392,147 Omnicare Inc. 10,864 391,756 Polaris Industries Inc. 5,269 390,696 Centex Corp. 5,016 390,646 L-3 Communications Holdings Inc./1/ 9,027 390,418 Edwards Lifesciences Corp./1/ 14,319 387,759 Fisher Scientific International Inc./1/ 9,765 387,573 Chesapeake Energy Corp. 35,862 386,592 Stericycle Inc./1/ 8,087 381,464 State Street Corp. 8,422 378,990 SICOR Inc./1/ 19,350 373,068 Macromedia Inc./1/ 14,915 368,997 Entercom Communications Corp./1/ 8,145 365,059 Popular Inc. 9,151 364,210 Leggett & Platt Inc. 16,777 362,887 Brown & Brown Inc. 11,721 360,772 Emulex Corp./1/ 14,121 359,662 E*TRADE Group Inc./1/ 38,799 359,279 Tribune Co. 7,824 359,122 Ruby Tuesday Inc. 14,835 357,672 ENSCO International Inc. 13,312 357,028 Steris Corp./1/ 15,452 355,705 Medicis Pharmaceutical Corp. Class A 6,014 352,420 Alliant Techsystems Inc./1/ 7,322 351,822 Apria Healthcare Group Inc./1/ 12,839 351,532 North Fork Bancorp Inc. 10,089 350,593 Pixar Inc./1/ 5,264 350,372 Henry Schein Inc./1/ 6,133 347,741 Intersil Corp. Class A/1/ 14,465 344,267 ResMed Inc./1/ 7,753 340,977 CIENA Corp./1/ 57,620 340,534 International Flavors & Fragrances Inc. 10,203 337,515 BISYS Group Inc. (The)/1/ 25,290 332,563 Charles River Laboratories International Inc./1/ 10,778 330,777 Respironics Inc./1/ 7,854 328,140 Dover Corp. 9,246 327,031 Rambus Inc./1/ 19,349 324,676 Advanced Micro Devices Inc./1/ 29,178 324,168 DeVry Inc./1/ 13,564 320,924 IDEXX Laboratories Inc./1/ 7,543 320,502 Ceridian Corp./1/ 17,104 318,476 Pier 1 Imports Inc. 16,487 317,210 Cree Inc./1/ 17,102 316,729 Silicon Laboratories Inc./1/ 6,979 313,706 Amkor Technology Inc./1/ 21,968 312,165 99 Cents Only Stores/1/ 9,426 304,837 Providian Financial Corp./1/ 25,825 304,477 Mettler Toledo International Inc./1/ 8,344 299,967 Performance Food Group Co./1/ 7,349 299,178 Cablevision Systems Corp./1/ 16,444 297,636 Autoliv Inc. 9,840 296,873 Wiley (John) & Sons Inc. Class A 11,388 295,974 Claire's Stores Inc. 8,825 295,284 SCHEDULES OF INVESTMENTS 27 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Red Hat Inc./1/ 29,168 $ 294,597 FMC Technologies Inc./1/ 13,652 292,426 National Instruments Corp. 7,265 292,416 Cypress Semiconductor Corp./1/ 16,454 290,907 Tenet Healthcare Corp./1/ 20,084 290,816 ADTRAN Inc. 4,728 289,259 McDATA Corp. Class A/1/ 24,099 288,465 Xerox Corp./1/ 28,088 288,183 LSI Logic Corp./1/ 31,982 287,518 Affymetrix Inc./1/ 13,696 287,479 Dial Corp. (The) 13,331 287,150 O'Reilly Automotive Inc./1/ 7,781 286,107 Rowan Companies Inc./1/ 11,611 285,398 Comverse Technology Inc./1/ 19,044 284,898 International Rectifier Corp./1/ 7,563 283,159 NetScreen Technologies Inc./1/ 12,642 281,032 Henry (Jack) & Associates Inc. 16,047 279,057 Navistar International Corp./1/ 7,446 277,587 Mohawk Industries Inc./1/ 3,876 276,436 Coca-Cola Enterprises Inc. 14,431 275,055 Pharmaceutical Product Development Inc./1/ 11,408 273,678 Whirlpool Corp. 3,975 269,386 Tellabs Inc./1/ 39,599 268,877 Qwest Communications International Inc./1/ 78,198 265,873 Getty Images Inc./1/ 7,508 263,981 Station Casinos Inc. 8,257 252,664 Varco International Inc./1/ 14,793 250,150 University of Phoenix Online/1/ 3,721 247,744 Storage Technology Corp./1/ 10,253 247,507 Triad Hospitals Inc./1/ 8,090 244,965 International Speedway Corp. Class A 5,580 244,906 Andrx Group/1/ 13,221 244,721 Avocent Corp./1/ 8,044 243,653 Viad Corp. 10,174 242,955 King Pharmaceuticals Inc./1/ 15,996 242,339 St. Joe Company (The) 7,542 241,947 SouthTrust Corp. 8,136 239,117 Amphenol Corp. Class A/1/ 4,490 233,704 Mandalay Resort Group 5,890 233,303 Total System Services Inc. 8,845 233,066 CBRL Group Inc. 6,517 231,223 Renal Care Group Inc./1/ 6,763 230,956 Grant Prideco Inc./1/ 22,158 225,790 Global Payments Inc. 6,151 221,436 Cadence Design Systems Inc./1/ 16,407 219,854 Protein Design Labs Inc./1/ 15,829 219,390 Hillenbrand Industries Inc. 3,883 219,079 HON Industries Inc. 5,927 219,062 Washington Post Company (The) Class B 326 216,790 Telephone & Data Systems Inc. 3,804 215,078 Key Energy Services Inc./1/ 22,156 213,805 Maxtor Corp./1/ 17,561 213,717 Harte-Hanks Inc. 11,576 213,461 BlackRock Inc. 4,322 211,778 Novell Inc./1/ 39,664 211,409 Noble Energy Inc. 5,508 210,956 National-Oilwell Inc./1/ 11,499 208,592 Human Genome Sciences Inc./1/ 15,213 207,810 Pride International Inc./1/ 12,223 207,180 Big Lots Inc./1/ 12,971 205,072 Friedman, Billings, Ramsey Group, Inc. Class A 11,883 204,982 Meredith Corp. 4,428 204,441 Church & Dwight Co. Inc. 5,812 203,362 Bio-Rad Laboratories Inc. Class A/1/ 3,980 202,980 Markel Corp./1/ 758 202,386 American Tower Corp. Class A/1/ 19,742 200,381 FactSet Research Systems Inc. 4,458 197,712 ICOS Corp./1/ 5,139 196,926 InterDigital Communications Corp./1/ 13,019 195,285 DoubleClick Inc./1/ 18,107 195,012 ADC Telecommunications Inc./1/ 82,674 192,630 Brocade Communications Systems Inc./1/ 36,874 192,482 Newfield Exploration Co./1/ 4,901 189,032 Hudson City Bancorp Inc. 6,068 187,137 Swift Transportation Co. Inc./1/ 8,143 184,765 Allied Waste Industries Inc./1/ 17,082 184,486 MGM Grand Inc./1/ 5,014 183,262 Atmel Corp./1/ 45,611 182,900 Invitrogen Corp./1/ 3,143 182,263 Timberland Co. Class A/1/ 4,232 180,537 28 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Talbots Inc. (The) 5,078 $ 176,968 Harris Corp. 4,927 176,337 Thermo Electron Corp./1/ 8,085 175,445 Advanced Fibre Communications Inc./1/ 8,345 174,995 Del Monte Foods Co./1/ 19,817 172,606 Tidewater Inc. 6,098 172,573 PerkinElmer Inc. 11,180 171,166 Knight Ridder Inc. 2,560 170,752 Regis Corp. 5,317 170,676 Edwards (A.G.) Inc. 4,421 169,811 HCC Insurance Holdings Inc. 5,822 169,304 Energizer Holdings Inc./1/ 4,544 167,083 Acxiom Corp./1/ 10,554 166,331 Columbia Sportswear Co./1/ 3,149 166,110 Applied Micro Circuits Corp./1/ 33,608 163,671 Neurocrine Biosciences Inc./1/ 3,283 162,574 LeapFrog Enterprises Inc./1/ 4,195 159,410 Polycom Inc./1/ 9,500 157,795 United Defense Industries Inc./1/ 5,513 156,514 Fairchild Semiconductor International Inc. Class A/1/ 9,348 154,990 Endo Pharmaceuticals Holdings Inc./1/ 7,474 152,843 Marvel Enterprises Inc./1/ 6,735 149,854 SPX Corp./1/ 3,281 148,564 Hunt (J.B.) Transport Services Inc./1/ 5,695 148,184 Constellation Brands Inc./1/ 4,854 147,998 Northern Trust Corp. 3,435 145,781 First Bancorp 4,703 144,617 CheckFree Corp./1/ 7,208 144,160 American Pharmaceutical Partners Inc./1/ 4,440 139,178 Valley National Bancorp 4,974 138,476 Nextel Partners Inc. Class A/1/ 17,578 137,987 Watson Pharmaceuticals Inc./1/ 3,210 133,825 Agilent Technologies Inc./1/ 5,986 132,350 Wendy's International Inc. 3,888 125,582 Nuveen Investments Inc. Class A 4,553 125,208 Integrated Device Technology Inc./1/ 10,051 124,833 Community Health Systems Inc./1/ 5,715 124,015 Belo (A.H.) Corp. 5,060 122,705 Chelsea Property Group Inc. 2,550 122,145 Radio One Inc. Class D/1/ 8,458 121,457 Diamond Offshore Drilling Inc. 6,355 121,380 AmeriCredit Corp./1/ 11,352 116,926 AMETEK Inc. 2,724 116,751 RealNetworks Inc./1/ 17,702 115,948 Manor Care Inc. 3,787 113,610 Lennar Corp. Class A 1,432 111,395 Cox Radio Inc. Class A/1/ 5,057 110,597 ICN Pharmaceuticals Inc. 6,220 106,735 West Corp./1/ 4,362 103,772 Eon Labs Inc./1/ 2,594 99,480 Alliance Data Systems Corp./1/ 3,702 97,733 IDT Corp./1/ 5,522 97,629 D.R. Horton Inc. 2,904 94,961 Hewitt Associates Inc. Class A/1/ 3,887 94,648 Pioneer Natural Resources Co./1/ 3,693 94,024 Radian Group Inc. 2,078 92,263 CONSOL Energy Inc. 4,953 92,027 MSC Industrial Direct Co. Inc. Class A 4,329 90,260 Tektronix Inc./1/ 3,639 90,065 Westamerica Bancorp 1,986 88,278 Arrow Electronics Inc./1/ 4,773 87,775 Brown-Forman Corp. Class B 1,097 86,795 Werner Enterprises Inc. 3,776 86,508 Crown Castle International Corp./1/ 9,172 86,309 Mills Corp. 2,148 84,524 Worthington Industries Inc. 6,715 84,340 Hovnanian Enterprises Inc. Class A/1/ 1,308 84,196 BearingPoint Inc./1/ 10,467 83,527 Convergys Corp./1/ 4,527 83,025 Ambac Financial Group Inc. 1,270 81,280 Interpublic Group of Companies Inc. 5,257 74,229 Mercantile Bankshares Corp. 1,851 74,040 Chicago Mercantile Exchange Holdings Inc. 1,053 72,457 First Tennessee National Corp. 1,640 69,634 Borders Group Inc./1/ 3,457 65,406 Cousins Properties Inc. 2,312 64,158 SCHEDULES OF INVESTMENTS 29 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Reebok International Ltd. 1,884 $ 62,982 Timken Co. (The) 4,027 61,371 Blockbuster Inc. 2,846 59,766 Interactive Data Corp./1/ 3,727 58,887 Scotts Co. (The) Class A/1/ 993 54,317 Alberto-Culver Co. Class B 901 52,997 Delphi Corp. 5,699 51,576 MEMC Electronics Materials Inc./1/ 4,586 50,033 Vulcan Materials Co. 1,203 48,012 Wynn Resorts Ltd./1/ 2,607 47,395 Pentair Inc. 1,181 47,086 LaBranche & Co. Inc. 3,130 45,698 Fluor Corp. 1,197 44,684 Florida Rock Industries Inc. 859 42,606 Barnes & Noble Inc./1/ 1,646 41,825 Entravision Communications Corp./1/ 4,266 40,527 LNR Property Corp. 914 37,428 Westport Resources Corp./1/ 1,545 36,369 Southern Peru Copper Corp. 1,605 35,503 Hudson United Bancorp 988 34,748 Valspar Corp. (The) 735 34,288 United States Cellular Corp./1/ 1,160 33,756 Gemstar-TV Guide International Inc./1/ 6,645 31,431 Compuware Corp./1/ 5,186 27,797 Autodesk Inc. 1,619 27,555 Apogent Technologies Inc./1/ 1,260 26,284 Bausch & Lomb Inc. 581 25,651 Transatlantic Holdings Inc. 354 25,176 Cabot Corp. 846 24,119 Tootsie Roll Industries Inc. 750 23,250 Jeffries Group Inc. 764 21,965 Scholastic Corp./1/ 747 21,506 IndyMac Bancorp Inc. 928 21,502 La-Z-Boy Inc. 962 21,356 Berkley (W.R.) Corp. 623 21,344 UnitedGlobalCom Inc. Class A/1/ 3,297 20,145 WellChoice Inc./1/ 534 16,089 Erie Indemnity Co. Class A 385 14,976 Polo Ralph Lauren Corp. 449 12,042 TOTAL COMMON STOCKS (Cost: $1,180,648,310) 1,166,332,947 SHARES OR SECURITY PRINCIPAL VALUE ---------------------------------------------------------------------------- SHORT TERM INVESTMENTS - 5.74% MONEY MARKET FUNDS - 3.45% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares/2/,/3/ 26,845,807 $ 26,845,806 Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares/2/,/3/ 9,771,724 9,771,724 BlackRock Temp Cash Money Market Fund/2/ 434,079 434,079 Short Term Investment Co. - Liquid Assets Money Market Portfolio/2/ 2,303,919 2,303,919 Short Term Investment Co. - Prime Money Market Portfolio, Institutional Shares/2/ 888,339 888,339 40,243,867 FLOATING RATE NOTES - 1.33% Beta Finance Inc. 1.08%, 05/20/04/2/ $ 444,169 444,127 1.08%, 09/15/04/2/ 888,339 888,254 1.17%, 08/23/04/2/ 444,169 444,510 CC USA Inc. 1.06%, 05/24/04/2/ 888,339 888,282 1.08%, 04/19/04/2/ 390,869 390,858 1.12%, 07/15/04/2/ 444,169 444,295 Dorada Finance Inc. 1.08%, 05/20/04/2/ 888,339 888,254 1.24%, 08/09/04/2/ 222,085 222,056 Five Finance Inc. 1.09%, 04/15/04/2/ 444,169 444,169 HBOS Treasury Services PLC 1.13%, 06/24/08/2/ 888,339 888,339 Holmes Financing PLC 1.08%, 04/15/04/2/ 177,668 177,668 K2 USA LLC 1.08%, 08/16/04/2/ 222,085 222,056 1.08%, 09/27/04/2/ 959,406 959,264 1.09%, 04/13/04/2/ 444,169 444,158 1.09%, 05/17/04/2/ 444,169 444,155 30 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 GROWTH INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE ---------------------------------------------------------------------------- Links Finance LLC 1.05%, 07/20/04/2/ $ 355,335 $ 355,278 1.08%, 05/04/04/2/ 444,169 444,156 1.08%, 06/28/04/2/ 444,169 444,104 1.09%, 03/29/04/2/ 444,169 444,169 Nationwide Building Society 1.08%, 07/23/04/2/ 666,254 666,254 Sigma Finance Inc. 1.05%, 07/20/04/2/ 444,169 444,098 1.07%, 10/15/03/2/ 888,339 888,335 1.07%, 07/01/04/2/ 444,169 444,086 1.24%, 08/06/04/2/ 222,085 222,066 Tango Finance Corp. 1.05%, 07/15/04/2/ 266,502 266,432 1.06%, 07/06/04/2/ 266,502 266,481 WhistleJacket Capital LLC 1.08%, 09/15/04/2/ 444,169 444,084 White Pine Finance LLC 1.08%, 05/17/04/2/ 533,003 533,003 1.08%, 07/06/04/2/ 533,003 532,964 1.08%, 08/26/04/2/ 444,169 444,108 1.09%, 04/20/04/2/ 444,169 444,169 15,474,232 COMMERCIAL PAPER - 0.69% Amsterdam Funding Corp. 1.06%, 10/16/03/2/ 421,961 421,775 Blue Ridge Asset Funding Corp. 1.05%, 10/17/03/2/ 444,169 443,962 Edison Asset Securitization 1.07%, 10/23/03/2/ 835,038 834,492 Gemini Securitization Corp. 1.05%, 10/17/03/2/ 310,919 310,773 Greenwich Funding Corp. 1.06%, 10/16/03/2/ 524,120 523,888 Jupiter Securitization Corp. 1.05%, 10/20/03/2/ 444,169 443,923 New Center Asset Trust 1.06%, 10/22/03/2/ 444,169 443,895 Park Avenue Receivables Corp. 1.05%, 10/20/03/2/ 444,169 443,923 Preferred Receivables Funding Corp. 1.06%, 10/08/03/2/ 444,169 444,078 Receivables Capital Corp. 1.05%, 10/15/03/2/ 298,553 298,431 Sydney Capital Corp. 1.07%, 10/17/03/2/ 359,777 359,606 UBS Finance (Delaware) Inc. 1.03%, 10/08/03/2/ 888,339 888,161 1.05%, 10/15/03/2/ 444,169 443,988 1.11%, 10/01/03/2/ 1,776,677 1,776,677 8,077,572 TIME DEPOSITS - 0.21% Abbey National Treasury Services PLC 1.15%, 10/01/03/2/ 444,169 444,169 Canadian Imperial Bank of Commerce 1.06%, 10/08/03/2/ 222,085 222,085 1.08%, 10/30/03/2/ 355,335 355,335 1.37%, 08/26/04/2/ 888,339 888,339 Toronto-Dominion Bank 1.33%, 08/23/04/2/ 577,420 577,160 2,487,088 REPURCHASE AGREEMENTS - 0.06% Lehman Brothers Inc. 1.10%, 10/01/03/2/ 710,671 710,671 710,671 TOTAL SHORT TERM INVESTMENTS (Cost: $66,993,430) 66,993,430 TOTAL INVESTMENTS IN SECURITIES - 105.69% (Cost $1,247,641,740) 1,233,326,377 OTHER ASSETS, LESS LIABILITIES - (5.69%) (66,359,543) --------------- NET ASSETS - 100.00% $ 1,166,966,834 =============== /1/ Non-income earning securities. /2/ All or a portion of this security represents investments of securities lending collateral. /3/ Issuer is an affiliate of the Fund's investment advisor. See Note 2. SEE NOTES TO FINANCIAL STATEMENTS. SCHEDULES OF INVESTMENTS 31 SCHEDULE OF INVESTMENTS (Unaudited) iSHARES RUSSELL 1000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- COMMON STOCKS - 99.90% Exxon Mobil Corp. 2,366,573 $ 86,616,572 Citigroup Inc. 1,824,004 83,010,422 Bank of America Corp. 530,788 41,422,696 Verizon Communications Inc. 974,495 31,612,618 Wells Fargo & Company 558,528 28,764,192 ChevronTexaco Corp. 378,549 27,047,326 SBC Communications Inc. 1,177,251 26,193,835 International Business Machines Corp. 287,434 25,389,045 JP Morgan Chase & Co. 719,747 24,708,915 Altria Group Inc. 548,875 24,040,725 AOL Time Warner Inc./1/ 1,532,960 23,163,026 American International Group Inc. 398,543 22,995,931 Merck & Co. Inc. 443,360 22,442,883 Hewlett-Packard Co. 1,081,629 20,940,337 Wachovia Corp. 453,785 18,691,404 Merrill Lynch & Co. Inc. 328,467 17,582,839 Morgan Stanley 343,725 17,344,364 U.S. Bancorp 680,274 16,319,773 Bank One Corp. 404,810 15,645,906 BellSouth Corp. 654,453 15,497,447 Procter & Gamble Co. 165,625 15,373,313 ConocoPhillips 240,362 13,159,820 Comcast Corp. Class A/1/ 424,125 13,096,980 Washington Mutual Inc. 329,518 12,973,124 Viacom Inc. Class B 331,806 12,708,170 Du Pont (E.I.) de Nemours and Co. 314,615 12,587,746 FleetBoston Financial Corp. 372,389 11,227,528 Walt Disney Co. (The) 540,519 10,902,268 McDonald's Corp. 450,585 10,606,771 Freddie Mac 190,148 9,954,248 Dow Chemical Co. (The) 291,492 9,485,150 Allstate Corp. (The) 249,302 9,107,002 Bristol-Myers Squibb Co. 342,551 8,789,859 Goldman Sachs Group Inc. (The) 100,781 8,455,526 Caterpillar Inc. 121,996 8,398,205 Schering-Plough Corp. 520,229 7,928,290 Alcoa Inc. 299,355 7,831,127 Honeywell International Inc. 294,115 7,749,930 United Technologies Corp. 99,427 7,683,719 Southern Company 255,619 7,494,749 Gannett Co. Inc. 95,135 7,378,671 Prudential Financial Inc. 195,402 7,300,219 Exelon Corp. 114,843 7,292,530 BB&T Corp. 197,575 7,094,918 Dominion Resources Inc. 113,620 7,033,078 Bank of New York Co. Inc. (The) 230,574 6,712,009 Ford Motor Company 622,990 6,709,602 General Motors Corp. 163,817 6,705,030 International Paper Co. 169,631 6,619,002 Emerson Electric Co. 124,942 6,578,196 Kimberly-Clark Corp. 125,409 6,435,990 AT&T Corp. 278,491 6,001,481 Lehman Brothers Holdings Inc. 85,917 5,935,146 Motorola Inc. 484,786 5,802,888 National City Corp. 195,640 5,763,554 Liberty Media Corp. Class A/1/ 577,601 5,758,682 Duke Energy Corp. 319,200 5,684,952 Northrop Grumman Corp. 61,488 5,301,495 SunTrust Banks Inc. 87,411 5,277,002 Hartford Financial Services Group Inc. 100,032 5,264,684 Union Pacific Corp. 90,000 5,235,300 Cendant Corp./1/ 278,176 5,199,109 Alltel Corp. 110,264 5,109,634 General Dynamics Corp. 62,572 4,884,370 Sprint Corp. (FON Group) 318,486 4,809,139 Coca-Cola Co. (The) 111,595 4,794,121 Kroger Co./1/ 267,294 4,776,544 PNC Financial Services Group 100,302 4,772,369 Travelers Property Casualty Corp. Class B 298,761 4,744,325 State Street Corp. 105,266 4,736,970 Occidental Petroleum Corp. 134,353 4,733,256 American Express Co. 104,208 4,695,612 Weyerhaeuser Co. 77,593 4,535,311 Avon Products Inc. 70,123 4,527,141 Deere & Co. 84,802 4,520,795 Lockheed Martin Corp. 97,686 4,508,209 32 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Gillette Co. (The) 138,548 $ 4,430,765 CVS Corp. 139,585 4,335,510 Entergy Corp. 79,986 4,331,242 Sears, Roebuck and Co. 97,510 4,264,112 Chubb Corp. 65,644 4,258,983 American Electric Power Co. Inc. 139,933 4,197,990 FedEx Corp. 65,105 4,194,715 FPL Group Inc. 64,932 4,103,702 Raytheon Co. 145,442 4,072,376 ConAgra Foods Inc. 190,250 4,040,910 Apache Corp. 57,252 3,969,854 Golden West Financial Corp. 44,125 3,949,629 Devon Energy Corp. 81,755 3,939,773 Equity Office Properties Trust 142,667 3,927,623 KeyCorp 149,790 3,830,130 Burlington Northern Santa Fe Corp. 132,023 3,811,504 Clear Channel Communications Inc. 99,399 3,806,982 Sun Microsystems Inc./1/ 1,144,123 3,787,047 Air Products & Chemicals Inc. 80,513 3,631,136 AT&T Wireless Services Inc./1/ 440,724 3,605,122 Safeway Inc./1/ 156,739 3,595,593 Agilent Technologies Inc./1/ 158,629 3,507,287 PG&E Corp./1/ 144,978 3,464,974 Hancock (John) Financial Services Inc. 102,398 3,461,052 Burlington Resources Inc. 71,334 3,438,299 Countrywide Financial Corp. 43,693 3,420,288 FirstEnergy Corp. 107,039 3,414,544 MetLife Inc. 120,730 3,386,477 Progress Energy Inc. 75,933 3,375,981 Public Service Enterprise Group Inc. 80,033 3,361,386 Electronic Data Systems Corp. 160,177 3,235,575 Consolidated Edison Inc. 79,109 3,224,483 PepsiCo Inc. 69,581 3,188,897 Principal Financial Group Inc. 102,866 3,187,817 SouthTrust Corp. 108,134 3,178,058 Lucent Technologies Inc./1/ 1,469,727 3,174,610 PPG Industries Inc. 60,139 3,140,459 Marathon Oil Corp. 109,793 3,129,101 Costco Wholesale Corp./1/ 99,986 3,107,565 Sara Lee Corp. 163,162 2,995,654 General Mills Inc. 63,591 2,993,228 Johnson Controls Inc. 31,590 2,988,414 Fortune Brands Inc. 51,494 2,922,284 PACCAR Inc. 38,923 2,907,159 Comerica Inc. 62,072 2,892,555 Unocal Corp. 91,434 2,882,000 Kraft Foods Inc. 97,471 2,875,395 Equity Residential 96,580 2,827,862 MBIA Inc. 50,983 2,802,536 Masco Corp. 114,446 2,801,638 Federated Department Stores Inc. 66,381 2,781,364 Tribune Co. 60,415 2,773,049 St. Paul Companies Inc. 74,440 2,756,513 Northern Trust Corp. 63,574 2,698,081 Regions Financial Corp. 78,707 2,695,715 TXU Corp. 114,211 2,690,811 Apple Computer Inc./1/ 129,543 2,672,472 AmSouth Bancorp 124,423 2,640,256 Mellon Financial Corp. 87,205 2,628,359 Bear Stearns Companies Inc. (The) 35,065 2,622,862 Franklin Resources Inc. 58,212 2,573,553 Wyeth 55,435 2,555,554 Norfolk Southern Corp. 138,138 2,555,553 Marshall & Ilsley Corp. 80,620 2,541,142 PPL Corp. 62,044 2,540,702 May Department Stores Co. (The) 102,230 2,517,925 Heinz (H.J.) Co. 72,756 2,494,076 Praxair Inc. 40,070 2,482,337 Albertson's Inc. 120,368 2,475,970 Ameren Corp. 57,135 2,451,663 Waste Management Inc. 93,473 2,446,188 Charter One Financial Inc. 79,747 2,440,258 Archer-Daniels-Midland Co. 183,858 2,410,378 Computer Sciences Corp./1/ 63,179 2,373,635 Limited Brands Inc. 157,040 2,368,163 Eaton Corp. 26,427 2,341,961 Cinergy Corp. 62,413 2,290,557 SCHEDULES OF INVESTMENTS 33 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Xerox Corp./1/ 221,090 $ 2,268,383 Jefferson-Pilot Corp. 50,369 2,235,376 Union Planters Corp. 70,365 2,226,349 Lincoln National Corp. 62,906 2,225,614 MBNA Corp. 97,565 2,224,482 CIGNA Corp. 49,794 2,223,302 Monsanto Co. 92,656 2,218,185 CSX Corp. 75,747 2,215,600 General Motors Corp. Class H/1/ 154,457 2,210,280 DTE Energy Co. 59,402 2,191,340 Xcel Energy Inc. 141,324 2,186,282 3M Co. 31,590 2,181,921 Corning Inc./1/ 229,293 2,159,940 Georgia-Pacific Corp. 88,718 2,150,524 AFLAC Inc. 66,418 2,145,301 Eastman Kodak Co. 101,519 2,125,808 Anthem Inc./1/ 29,703 2,118,715 Illinois Tool Works Inc. 31,712 2,101,237 Constellation Energy Group Inc. 58,603 2,096,815 UST Inc. 59,137 2,080,440 Anadarko Petroleum Corp. 49,579 2,070,419 Penney (J.C.) Co. Inc. (Holding Co.) 96,544 2,063,145 M&T Bank Corp. 23,630 2,062,899 Dover Corp. 58,150 2,056,765 Simon Property Group Inc. 46,559 2,029,041 CIT Group Inc. 69,953 2,011,848 Tenet Healthcare Corp./1/ 136,195 1,972,104 Genuine Parts Co. 61,621 1,970,640 KeySpan Corp. 55,767 1,956,306 Cincinnati Financial Corp. 48,318 1,930,787 Edison International/1/ 100,831 1,925,872 Sovereign Bancorp Inc. 103,701 1,923,654 Sempra Energy 64,996 1,908,283 Aetna Inc. 31,048 1,894,859 AON Corp. 90,294 1,882,630 Parker Hannifin Corp. 41,878 1,871,947 Rohm & Haas Co. 55,958 1,871,795 Loews Corp. 46,149 1,863,035 NiSource Inc. 92,944 1,857,021 Newmont Mining Corp. 47,365 1,851,498 Interpublic Group of Companies Inc. 130,120 1,837,294 General Growth Properties Inc. 25,371 1,819,101 MeadWestvaco Corp. 71,043 1,811,597 National Commerce Financial Corp. 72,545 1,804,920 Cox Communications Inc. Class A/1/ 56,902 1,799,241 First Tennessee National Corp. 42,138 1,789,179 Zions Bancorporation 31,958 1,784,854 ProLogis 57,952 1,753,048 Ambac Financial Group Inc. 27,251 1,744,064 Starwood Hotels & Resorts Worldwide Inc. 50,041 1,741,427 CenturyTel Inc. 50,997 1,728,288 Williams Companies Inc. 182,964 1,723,521 Dean Foods Co./1/ 54,939 1,704,757 Archstone-Smith Trust 64,590 1,703,884 Torchmark Corp. 41,159 1,672,702 Knight Ridder Inc. 25,061 1,671,569 Plum Creek Timber Co. Inc. 64,866 1,650,191 Banknorth Group Inc. 57,654 1,626,996 SAFECO Corp. 45,922 1,619,210 Avaya Inc./1/ 147,889 1,611,990 Textron Inc. 40,710 1,606,010 Kerr-McGee Corp. 35,951 1,604,853 Huntington Bancshares Inc. 81,063 1,604,237 Southwest Airlines Co. 90,014 1,593,248 Murphy Oil Corp. 26,911 1,581,021 Compass Bancshares Inc. 44,999 1,556,065 El Paso Corp. 212,615 1,552,089 Scientific-Atlanta Inc. 49,765 1,550,180 Rockwell Automation Inc. 58,950 1,547,438 Valero Energy Corp. 40,355 1,544,386 Office Depot Inc./1/ 109,485 1,538,264 UNUMProvident Corp. 102,025 1,506,909 Kellogg Co. 44,219 1,474,704 Delphi Corp. 160,741 1,454,706 Capital One Financial Corp. 25,381 1,447,732 Micron Technology Inc./1/ 107,852 1,447,374 Old Republic International Corp. 42,777 1,415,491 34 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- North Fork Bancorp Inc. 40,450 $ 1,405,638 Duke Realty Corp. 48,000 1,401,600 Public Storage Inc. 35,532 1,393,920 Medco Health Solutions Inc./1/ 53,603 1,389,926 McKesson Corp. 41,564 1,383,666 Watson Pharmaceuticals Inc./1/ 33,073 1,378,813 iStar Financial Inc. 35,025 1,364,224 Vornado Realty Trust 28,284 1,358,763 SCANA Corp. 39,315 1,346,539 Kimco Realty Corp. 32,774 1,342,751 Radian Group Inc. 30,093 1,336,129 MGIC Investment Corp. 25,623 1,334,190 HCA Inc. 36,192 1,334,037 Fidelity National Financial Inc. 44,329 1,332,530 Popular Inc. 33,220 1,322,156 Diebold Inc. 25,820 1,307,783 Apartment Investment & Management Co. Class A 33,101 1,302,855 Marriott International Inc. Class A 30,137 1,296,795 Liz Claiborne Inc. 38,085 1,296,794 Smurfit-Stone Container Corp. 86,556 1,296,609 Sherwin-Williams Co. (The) 43,801 1,288,187 Lennar Corp. Class A 16,556 1,287,891 PeopleSoft Inc./1/ 70,551 1,283,323 Grainger (W.W.) Inc. 26,978 1,282,804 Nucor Corp. 27,936 1,281,704 Vulcan Materials Co. 31,825 1,270,136 Jones Apparel Group Inc. 42,384 1,268,553 Amerada Hess Corp. 25,305 1,267,780 Qwest Communications International Inc./1/ 372,815 1,267,571 Wisconsin Energy Corp. 41,246 1,260,890 GreenPoint Financial Corp. 42,091 1,256,837 D.R. Horton Inc. 38,050 1,244,235 Whirlpool Corp. 18,252 1,236,938 Republic Services Inc. 53,914 1,220,613 InterActiveCorp/1/ 35,937 1,187,718 R.J. Reynolds Tobacco Holdings Inc. 29,921 1,183,076 Janus Capital Group Inc. 84,504 1,180,521 Campbell Soup Co. 44,365 1,175,672 Pulte Homes Inc. 17,270 1,174,533 Lear Corp./1/ 22,223 1,169,819 Energy East Corp. 51,627 1,157,994 Colgate-Palmolive Co. 20,613 1,152,061 SUPERVALU Inc. 47,717 1,138,528 Rouse Co. (The) 27,227 1,135,366 VF Corp. 29,162 1,134,693 Hibernia Corp. Class A 55,694 1,128,360 Clorox Co. 24,568 1,126,934 Engelhard Corp. 40,661 1,125,090 Citizens Communications Co./1/ 100,061 1,121,684 Centex Corp. 14,303 1,113,918 Wendy's International Inc. 34,326 1,108,730 Coca-Cola Enterprises Inc. 57,782 1,101,325 ServiceMaster Co. (The) 106,072 1,088,299 Sunoco Inc. 26,988 1,085,457 AutoNation Inc./1/ 61,786 1,083,726 Boston Properties Inc. 24,616 1,070,058 PMI Group Inc. (The) 31,559 1,065,116 Host Marriott Corp./1/ 98,302 1,054,780 Pinnacle West Capital Corp. 29,502 1,047,321 Tyson Foods Inc. Class A 74,075 1,046,680 Pitney Bowes Inc. 27,175 1,041,346 Humana Inc./1/ 57,326 1,034,734 SPX Corp./1/ 22,695 1,027,630 Liberty Property Trust 27,754 1,026,343 AvalonBay Communities Inc. 21,789 1,019,725 Hershey Foods Corp. 13,957 1,014,395 Mercantile Bankshares Corp. 25,264 1,010,560 Fluor Corp. 26,973 1,006,902 Sabre Holdings Corp. 46,811 1,005,968 AmerisourceBergen Corp. 18,606 1,005,654 Level 3 Communications Inc./1/ 185,440 1,005,085 Goodrich (B.F.) Co. 41,393 1,003,366 Health Care Property Investors Inc. 21,478 1,003,023 American Power Conversion Corp. 58,310 999,433 Vishay Intertechnology Inc./1/ 56,741 994,102 Pogo Producing Co. 21,764 985,474 SCHEDULES OF INVESTMENTS 35 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Hilton Hotels Corp. 60,706 $ 984,651 Thermo Electron Corp./1/ 45,123 979,169 Allied Capital Corp. 39,817 979,100 Sanmina-SCI Corp./1/ 100,408 973,958 Fox Entertainment Group Inc. Class A/1/ 34,755 972,792 NCR Corp./1/ 30,323 960,936 Pepco Holdings Inc. 55,458 958,314 Cadence Design Systems Inc./1/ 70,058 938,777 Pioneer Natural Resources Co./1/ 36,677 933,796 Leggett & Platt Inc. 43,063 931,453 Computer Associates International Inc. 35,663 931,161 King Pharmaceuticals Inc./1/ 61,194 927,089 Donnelley (R.R.) & Sons Co. 37,231 925,935 Hasbro Inc. 49,495 924,567 Associated Bancorp 24,416 922,925 Eastman Chemical Co. 27,467 920,144 Boeing Co. (The) 26,766 918,877 UnionBanCal Corp. 18,510 918,096 Commerce Bancshares Inc. 20,949 916,519 Equitable Resources Inc. 22,169 911,146 Park Place Entertainment Corp./1/ 100,612 906,514 Toys R Us Inc./1/ 75,018 902,467 Solectron Corp./1/ 153,916 900,409 ENSCO International Inc. 33,567 900,267 Questar Corp. 29,120 897,187 NSTAR 18,827 894,283 Advanced Micro Devices Inc./1/ 80,373 892,944 CenterPoint Energy Inc. 97,030 889,765 MDU Resources Group Inc. 26,262 887,130 Washington Post Company (The) Class B 1,304 867,160 TECO Energy Inc. 62,498 863,722 Mohawk Industries Inc./1/ 12,066 860,547 Astoria Financial Corp. 27,635 853,921 KB Home 14,203 847,351 Alliant Energy Corp. 38,417 845,174 Nordstrom Inc. 34,062 845,078 Convergys Corp./1/ 45,476 834,030 ALLETE Inc. 30,297 829,532 AMB Property Corp. 26,768 824,722 Foot Locker Inc. 50,414 816,707 Brown-Forman Corp. Class B 10,293 814,382 Dana Corp. 52,773 814,287 Baker Hughes Inc. 27,267 806,831 Millennium Pharmaceuticals Inc./1/ 52,415 806,667 Northeast Utilities 44,968 805,827 Temple-Inland Inc. 16,524 802,240 New Plan Excel Realty Trust 34,302 799,237 Ashland Inc. 24,233 796,054 Mack-Cali Realty Corp. 20,270 794,584 Developers Diversified Realty Corp. 26,553 793,138 Rockwell Collins Inc. 31,166 786,942 Manor Care Inc. 26,150 784,500 Bausch & Lomb Inc. 17,744 783,398 Deluxe Corp. 19,475 781,726 Valspar Corp. (The) 16,653 776,862 Alberto-Culver Co. Class B 13,130 772,307 Brunswick Corp. 30,037 771,350 DPL Inc. 44,931 770,567 Bowater Inc. 18,309 770,077 Phelps Dodge Corp./1/ 16,441 769,439 Energizer Holdings Inc./1/ 20,916 769,081 New York Times Co. Class A 17,696 769,068 Invitrogen Corp./1/ 13,261 769,005 Edwards (A.G.) Inc. 19,934 765,665 3Com Corp./1/ 128,872 760,345 Newell Rubbermaid Inc. 34,760 753,249 Fulton Financial Corp. 37,491 752,819 Catellus Development Corp./1/ 30,665 749,759 Great Plains Energy Inc. 24,688 748,540 Berkley (W.R.) Corp. 21,841 748,273 Puget Energy Inc. 33,328 747,547 Weingarten Realty Investors 16,421 738,945 Bemis Co. 16,669 738,437 Smucker (J.M.) Co. (The) 17,476 736,788 City National Corp. 14,411 734,385 United Dominion Realty Trust Inc. 39,950 731,485 Constellation Brands Inc./1/ 23,970 730,845 36 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Hospitality Properties Trust 20,812 $ 730,085 Wilmington Trust Corp. 23,620 726,551 NTL Inc./1/ 15,314 721,596 Bank of Hawaii Corp. 21,442 720,022 LSI Logic Corp./1/ 79,688 716,395 Sonoco Products Co. 32,588 715,307 Sigma-Aldrich Corp. 13,771 715,266 Valley National Bancorp 25,541 711,061 Avnet Inc./1/ 42,300 698,796 Macerich Co. (The) 18,420 695,355 Sky Financial Group Inc. 30,591 688,603 Cullen/Frost Bankers Inc. 18,414 685,553 Stanley Works (The) 23,168 683,919 OGE Energy Corp. 30,159 681,292 Hillenbrand Industries Inc. 12,028 678,620 FirstMerit Corp. 27,398 677,827 Telephone & Data Systems Inc. 11,976 677,123 United States Steel Corp. 36,693 674,417 Compuware Corp./1/ 125,701 673,757 Becton, Dickinson & Co. 18,639 673,241 Protective Life Corp. 22,515 672,073 Precision Castparts Corp. 18,762 658,546 BorgWarner Inc. 9,629 653,328 Providian Financial Corp./1/ 55,132 650,006 Ryland Group Inc. 8,884 649,509 Webster Financial Corp. 16,206 646,295 Hubbell Inc. Class B 17,620 642,954 Martin Marietta Materials Inc. 17,554 639,843 AGL Resources Inc. 22,541 634,980 Intersil Corp. Class A/1/ 26,620 633,556 Autodesk Inc. 37,140 632,123 Circuit City Stores Inc. 66,276 631,610 Apogent Technologies Inc./1/ 30,207 630,118 Philadelphia Suburban Corp. 26,097 628,416 Colonial BancGroup Inc. (The) 43,425 627,057 Washington Federal Inc. 24,729 623,418 Vectren Corp. 26,378 623,048 Pentair Inc. 15,538 619,500 Nationwide Financial Services Inc. 19,730 618,338 Calpine Corp./1/ 125,675 614,551 Lee Enterprises Inc. 15,849 612,881 Belo (A.H.) Corp. 25,228 611,779 Pan Pacific Retail Properties Inc. 14,184 609,912 Rayonier Inc. 14,960 607,376 Hormel Foods Corp. 26,420 607,132 Harrah's Entertainment Inc. 14,384 605,710 Siebel Systems Inc./1/ 62,272 605,284 Ryder System Inc. 20,628 604,813 Independence Community Bank Corp. 17,288 603,870 BancorpSouth Inc. 27,529 602,885 MGM Grand Inc./1/ 16,482 602,417 StanCorp Financial Group Inc. 10,446 600,123 PacifiCare Health Systems Inc./1/ 12,293 599,898 Lubrizol Corp. 18,303 593,932 First American Corp. 23,846 593,765 Thornburg Mortgage Inc. 23,360 591,709 Roslyn Bancorp Inc. 25,140 590,287 Tellabs Inc./1/ 86,499 587,328 Harris Corp. 16,380 586,240 Cabot Corp. 20,472 583,657 Lyondell Chemical Co. 45,426 580,544 Snap-On Inc. 20,932 578,770 BRE Properties Inc. Class A 17,548 578,733 Tech Data Corp./1/ 18,702 576,957 Federal Realty Investment Trust 15,564 573,689 CenterPoint Properties Corp. 8,365 569,740 Arden Realty Inc. 20,405 569,708 FNB Corp. (Florida) 16,501 569,285 Sirius Satellite Radio Inc./1/ 310,501 568,217 Hawaiian Electric Industries Inc. 13,033 567,326 Smithfield Foods Inc./1/ 29,452 565,478 Autoliv Inc. 18,650 562,670 CNF Inc. 17,485 560,394 CarrAmerica Realty Corp. 18,702 558,255 Storage Technology Corp./1/ 23,051 556,451 Annaly Mortgage Management Inc. 33,881 556,326 McGraw-Hill Companies Inc. (The) 8,949 556,001 Harsco Corp. 14,437 555,391 SCHEDULES OF INVESTMENTS 37 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- L-3 Communications Holdings Inc./1/ 12,782 $ 552,822 Cummins Inc. 12,434 552,443 E*TRADE Group Inc./1/ 59,635 552,220 XTO Energy Inc. 26,277 551,554 Nicor Inc. 15,653 550,046 ONEOK Inc. 27,081 546,224 Shurgard Storage Centers Inc. Class A 15,454 545,526 Tektronix Inc./1/ 21,973 543,832 Leucadia National Corp. 14,235 538,795 Wrigley (William Jr.) Co. 9,739 538,567 RPM International Inc. 41,231 538,477 Maxtor Corp./1/ 44,081 536,466 Peoples Energy Corp. 12,880 532,974 National Fuel Gas Co. 23,324 532,953 XM Satellite Radio Holdings Inc. Class A/1/ 34,270 532,213 Teleflex Inc. 12,198 529,759 Neiman-Marcus Group Inc. Class A/1/ 12,664 528,089 Pactiv Corp./1/ 25,642 520,020 MONY Group Inc. (The) 15,841 515,625 Raymond James Financial Inc. 14,116 513,117 Saks Inc./1/ 44,397 511,897 TCF Financial Corp. 10,666 511,435 Delta Air Lines Inc. 38,382 510,481 Omnicare Inc. 14,115 508,987 Old National Bancorp 22,759 508,664 Arrow Electronics Inc./1/ 27,497 505,670 Unitrin Inc. 16,413 499,940 Toll Brothers Inc./1/ 16,428 499,740 Hudson United Bancorp 14,207 499,660 Markel Corp./1/ 1,867 498,489 New York Community Bancorp Inc. 15,682 494,140 Coors (Adolf) Company Class B 9,179 493,463 Ingram Micro Inc. Class A/1/ 37,770 492,898 First Midwest Bancorp Inc. 16,580 492,592 Cytec Industries Inc./1/ 13,462 491,363 Reebok International Ltd. 14,695 491,254 Reliant Resources Inc./1/ 95,639 489,672 Transatlantic Holdings Inc. 6,883 489,519 Whitney Holding Corp. 14,362 488,308 Service Corp. International/1/ 106,573 487,039 Realty Income Corp. 12,229 484,880 American Capital Strategies Ltd. 19,235 478,182 CIENA Corp./1/ 80,826 477,682 McCormick & Co. Inc. 17,283 473,900 WGL Holdings Inc. 17,115 472,032 Helmerich & Payne Inc. 18,056 471,984 Hudson City Bancorp Inc. 15,303 471,945 Trustmark Corp. 17,338 470,380 Healthcare Realty Trust Inc. 14,675 469,306 Carlisle Companies Inc. 10,705 466,952 WPS Resources Corp. 11,277 464,612 Park National Corp. 4,149 464,273 Noble Energy Inc. 12,061 461,936 Camden Property Trust 11,984 460,545 HRPT Properties Trust 49,725 454,486 Triad Hospitals Inc./1/ 14,815 448,598 Owens-Illinois Inc./1/ 38,939 444,683 Forest City Enterprises Inc. Class A 10,134 443,362 T. Rowe Price Group Inc. 10,728 442,637 AptarGroup Inc. 12,047 442,004 HON Industries Inc. 11,948 441,598 International Rectifier Corp./1/ 11,784 441,193 Chelsea Property Group Inc. 8,983 430,286 Crane Co. 18,320 428,871 Automatic Data Processing Inc. 11,942 428,121 Piedmont Natural Gas Co. 10,929 426,231 UGI Corp. 14,720 425,850 AGCO Corp./1/ 24,765 424,472 Metro-Goldwyn-Mayer Inc./1/ 27,588 423,200 Borders Group Inc./1/ 22,242 420,819 IndyMac Bancorp Inc. 17,950 415,901 Mercury General Corp. 9,267 414,976 La-Z-Boy Inc. 18,570 412,254 ICOS Corp./1/ 10,719 410,752 Ethan Allen Interiors Inc. 11,406 410,616 Imation Corp. 12,555 409,921 38 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Provident Financial Group Inc. 14,513 $ 405,783 Duquesne Light Holdings Inc. 26,131 405,030 Packaging Corporation of America/1/ 20,755 403,062 Comverse Technology Inc./1/ 26,828 401,347 Crescent Real Estate Equities Co. 27,576 399,852 ArvinMeritor Inc. 22,212 395,596 Lafarge North America Inc. 11,287 392,788 Furniture Brands International Inc./1/ 16,255 391,745 Jeffries Group Inc. 13,610 391,288 HCC Insurance Holdings Inc. 13,394 389,498 Novell Inc./1/ 72,846 388,269 Readers Digest Association Inc. (The) 27,575 385,774 Viad Corp. 16,139 385,399 Lancaster Colony Corp. 9,677 384,854 Ceridian Corp./1/ 20,592 383,423 Allied Waste Industries Inc./1/ 35,458 382,946 Westamerica Bancorp 8,615 382,937 McClatchy Co. (The) Class A 6,434 382,694 Valassis Communications Inc./1/ 14,486 382,430 Advanced Fibre Communications Inc./1/ 18,185 381,339 Boise Cascade Corp. 13,812 381,211 IKON Office Solutions Inc. 52,070 380,632 International Bancshares Corp. 9,091 376,822 Unisys Corp./1/ 27,837 376,635 American Tower Corp. Class A/1/ 37,018 375,733 Polo Ralph Lauren Corp. 13,943 373,951 CBL & Associates Properties Inc. 7,464 372,454 United Bancshares Inc. 12,434 372,398 Airgas Inc. 20,777 369,831 ADC Telecommunications Inc./1/ 158,200 368,606 Health Net Inc./1/ 11,591 367,087 Pride International Inc./1/ 21,361 362,069 Downey Financial Corp. 7,737 361,550 PerkinElmer Inc. 23,496 359,724 AmeriCredit Corp./1/ 34,660 356,998 Trizec Properties Inc. 29,035 355,969 Polycom Inc./1/ 21,214 352,365 Rowan Companies Inc./1/ 14,304 351,592 Halliburton Co. 14,492 351,431 Dynegy Inc. Class A/1/ 97,162 349,783 Kinder Morgan Inc. 6,458 348,797 Scotts Co. (The) Class A/1/ 6,333 346,415 Big Lots Inc./1/ 21,872 345,796 Media General Inc. Class A 5,612 342,893 Peabody Energy Corp. 10,874 341,117 Barnes & Noble Inc./1/ 13,242 336,479 Novellus Systems Inc./1/ 9,860 332,775 Erie Indemnity Co. Class A 8,532 331,895 Mills Corp. 8,402 330,619 Fairchild Semiconductor International Inc. Class A/1/ 19,758 327,588 Newfield Exploration Co./1/ 8,481 327,112 Atmel Corp./1/ 81,312 326,061 Loews Corporation - Carolina Group 14,053 323,219 Neurocrine Biosciences Inc./1/ 6,485 321,137 M.D.C. Holdings Inc. 5,931 320,274 Cypress Semiconductor Corp./1/ 18,080 319,654 National Semiconductor Corp./1/ 9,893 319,445 BearingPoint Inc./1/ 39,783 317,468 Regency Centers Corp. 8,615 317,463 American National Insurance Co. 3,671 312,219 Tidewater Inc. 10,954 309,998 Human Genome Sciences Inc./1/ 22,584 308,497 Blyth Inc. 11,363 306,574 Navistar International Corp./1/ 8,218 306,367 Gemstar-TV Guide International Inc./1/ 64,396 304,593 PepsiAmericas Inc. 20,862 302,290 International Flavors & Fragrances Inc. 9,046 299,242 Del Monte Foods Co./1/ 34,134 297,307 Henry Schein Inc./1/ 5,204 295,067 Manpower Inc. 7,896 292,942 Dial Corp. (The) 13,597 292,879 Mandalay Resort Group 7,326 290,183 SCHEDULES OF INVESTMENTS 39 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Florida Rock Industries Inc. 5,818 $ 288,573 Hunt (J.B.) Transport Services Inc./1/ 11,018 286,688 Applied Micro Circuits Corp./1/ 58,592 285,343 American Axle & Manufacturing Holdings Inc./1/ 9,609 284,234 Winn-Dixie Stores Inc. 29,146 281,259 Reinsurance Group of America Inc. 6,886 280,605 VeriSign Inc./1/ 20,345 274,047 People's Bank 9,008 269,700 Scholastic Corp./1/ 9,364 269,590 Premcor Inc./1/ 11,541 267,405 Integrated Device Technology Inc./1/ 21,510 267,154 AMETEK Inc. 6,200 265,732 American Financial Group Inc. 12,110 263,392 Avery Dennison Corp. 5,206 263,007 AVX Corp. 19,018 260,356 ICN Pharmaceuticals Inc. 15,138 259,768 CBRL Group Inc. 7,295 258,827 Hearst-Argyle Television Inc./1/ 10,623 257,077 Legg Mason Inc. 3,550 256,310 Applera Corp. - Applied Biosystems Group 11,385 253,999 Affiliated Computer Services Inc. Class A/1/ 4,988 242,866 Synovus Financial Corp. 9,685 242,028 Cousins Properties Inc. 8,684 240,981 WellPoint Health Networks Inc./1/ 3,108 239,565 Tootsie Roll Industries Inc. 7,595 235,445 Renal Care Group Inc./1/ 6,877 234,850 Alleghany Corp./1/ 1,196 233,519 Regis Corp. 7,260 233,046 Western Gas Resources Inc. 6,105 231,990 CheckFree Corp./1/ 11,580 231,600 Hovnanian Enterprises Inc. Class A/1/ 3,514 226,196 Capitol Federal Financial 7,641 224,340 Radio One Inc. Class D/1/ 15,456 221,948 LNR Property Corp. 5,413 221,662 Meredith Corp. 4,792 221,247 BOK Financial Corp./1/ 5,871 221,161 Outback Steakhouse Inc. 5,778 218,813 Smith International Inc./1/ 6,037 217,211 National-Oilwell Inc./1/ 11,865 215,231 Equifax Inc. 9,457 210,607 Emulex Corp./1/ 8,078 205,747 Pepsi Bottling Group Inc. 9,950 204,771 Community Health Systems Inc./1/ 9,433 204,696 Performance Food Group Co./1/ 5,016 204,201 Instinet Group Inc./1/ 42,420 202,301 LaBranche & Co. Inc. 13,783 201,232 Darden Restaurants Inc. 10,569 200,811 Rite Aid Corp./1/ 38,644 199,403 WellChoice Inc./1/ 6,616 199,340 Regal Entertainment Group Class A 10,626 197,644 IDT Corp./1/ 10,950 193,596 Westport Resources Corp./1/ 8,200 193,028 Blockbuster Inc. 9,009 189,189 Danaher Corp. 2,557 188,860 SunGard Data Systems Inc./1/ 7,119 187,301 Brocade Communications Systems Inc./1/ 35,392 184,746 Wesco Financial Corp. 523 177,804 Diamond Offshore Drilling Inc. 9,251 176,694 Werner Enterprises Inc. 7,628 174,757 Pall Corp. 7,731 173,484 Michaels Stores Inc. 4,148 169,072 CNA Financial Corp./1/ 8,025 168,685 Steelcase Inc. Class A 14,221 167,523 Student Loan Corp. 1,403 167,420 Ball Corp. 3,071 165,834 Varco International Inc./1/ 9,663 163,401 Worthington Industries Inc. 12,712 159,663 UnitedGlobalCom Inc. Class A/1/ 25,909 158,304 Crown Castle International Corp./1/ 16,774 157,843 Timken Co. (The) 10,304 157,033 Jabil Circuit Inc./1/ 5,972 155,571 Lamar Advertising Co./1/ 5,294 155,326 WebMD Corp./1/ 16,907 150,810 40 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Molex Inc. 5,265 $ 150,526 PanAmSat Corp./1/ 10,168 147,233 First Bancorp 4,616 141,942 Alliant Techsystems Inc./1/ 2,883 138,528 Bard (C.R.) Inc. 1,950 138,450 Church & Dwight Co. Inc. 3,930 137,511 Pier 1 Imports Inc. 6,958 133,872 ITT Industries Inc. 2,181 130,511 Swift Transportation Co. Inc./1/ 5,682 128,925 Acxiom Corp./1/ 8,023 126,442 Symbol Technologies Inc. 10,489 125,344 Texas Genco Holdings Inc. 5,102 121,428 Chesapeake Energy Corp. 11,254 121,318 O'Reilly Automotive Inc./1/ 3,294 121,120 Protein Design Labs Inc./1/ 8,673 120,208 Laboratory Corp. of America Holdings/1/ 3,945 113,222 Univision Communications Inc. Class A/1/ 3,541 113,079 Key Energy Services Inc./1/ 11,704 112,944 Jacobs Engineering Group Inc./1/ 2,482 111,938 DoubleClick Inc./1/ 10,089 108,659 BMC Software Inc./1/ 7,755 108,027 Cox Radio Inc. Class A/1/ 4,896 107,076 Rent-A-Center Inc./1/ 3,307 106,816 International Speedway Corp. Class A 2,419 106,170 Interactive Data Corp./1/ 6,688 105,670 Commerce Bancorp Inc. 2,191 104,971 Andrx Group/1/ 5,482 101,472 United States Cellular Corp./1/ 3,445 100,250 GTECH Holdings Corp. 2,321 99,455 Donaldson Co. Inc. 1,799 96,966 Wynn Resorts Ltd./1/ 5,171 94,009 DST Systems Inc./1/ 2,484 93,398 Entravision Communications Corp./1/ 9,108 86,526 Estee Lauder Companies Inc. Class A 2,526 86,137 Odyssey Re Holdings Corp. 4,171 85,839 Cablevision Systems Corp./1/ 4,470 80,907 Network Associates Inc./1/ 5,666 77,964 Avocent Corp./1/ 2,484 75,240 Universal Health Services Inc. Class B/1/ 1,518 75,065 Cooper Cameron Corp./1/ 1,537 71,025 Friedman, Billings, Ramsey Group, Inc. Class A 4,041 69,707 Neuberger Berman Inc. 1,646 68,918 Southern Peru Copper Corp. 2,891 63,949 Entercom Communications Corp./1/ 1,235 55,353 Harte-Hanks Inc. 2,698 49,751 Talbots Inc. (The) 1,115 38,858 Claire's Stores Inc. 1,031 34,497 MSC Industrial Direct Co. Inc. Class A 1,591 33,172 BISYS Group Inc. (The)/1/ 2,290 30,113 Steris Corp./1/ 1,297 29,857 Global Payments Inc. 730 26,280 Grant Prideco Inc./1/ 2,451 24,976 West Corp./1/ 462 10,991 McLeodUSA Inc. Class A Escrow/2/ 59,330 - TOTAL COMMON STOCKS (Cost: $1,703,709,515) 1,672,073,503 SHORT TERM INVESTMENTS - 6.09% MONEY MARKET FUNDS - 3.68% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares/3/,/4/ 41,449,044 41,449,044 Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares/3/,/4/ 14,733,212 14,733,212 BlackRock Temp Cash Money Market Fund/3/ 654,478 654,478 Short Term Investment Co. - Liquid Assets Money Market Portfolio/3/ 3,473,709 3,473,709 SCHEDULES OF INVESTMENTS 41 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 VALUE INDEX FUND September 30, 2003 SHARES OR SECURITY PRINCIPAL VALUE ---------------------------------------------------------------------------- Short Term Investment Co. - Prime Money Market Portfolio, Institutional Shares/3/ 1,339,383 $ 1,339,383 61,649,826 FLOATING RATE NOTES - 1.39% Beta Finance Inc. 1.08%, 05/20/04/3/ $ 669,691 669,628 1.08%, 09/15/04/3/ 1,339,383 1,339,255 1.17%, 08/23/04/3/ 669,691 670,205 CC USA Inc. 1.06%, 05/24/04/3/ 1,339,383 1,339,297 1.08%, 04/19/04/3/ 589,328 589,312 1.12%, 07/15/04/3/ 669,691 669,881 Dorada Finance Inc. 1.08%, 05/20/04/3/ 1,339,383 1,339,256 1.24%, 08/09/04/3/ 334,846 334,803 Five Finance Inc. 1.09%, 04/15/04/3/ 669,691 669,691 HBOS Treasury Services PLC 1.13%, 06/24/08/3/ 1,339,383 1,339,383 Holmes Financing PLC 1.08%, 04/15/04/3/ 267,877 267,877 K2 USA LLC 1.08%, 08/16/04/3/ 334,846 334,802 1.08%, 09/27/04/3/ 1,446,534 1,446,320 1.09%, 04/13/04/3/ 669,691 669,674 1.09%, 05/17/04/3/ 669,691 669,671 Links Finance LLC 1.05%, 07/20/04/3/ 535,753 535,667 1.08%, 05/04/04/3/ 669,691 669,672 1.08%, 06/28/04/3/ 669,691 669,593 1.09%, 03/29/04/3/ 669,691 669,691 Nationwide Building Society 1.08%, 07/23/04/3/ 1,004,537 1,004,537 Sigma Finance Inc. 1.05%, 07/20/04/3/ 669,691 669,584 1.07%, 10/15/03/3/ 1,339,383 1,339,378 1.07%, 07/01/04/3/ 669,691 669,566 1.24%, 08/06/04/3/ 334,846 334,817 SECURITY PRINCIPAL VALUE ---------------------------------------------------------------------------- Tango Finance Corp. 1.05%, 07/15/04/3/ $ 401,815 $ 401,710 1.06%, 07/06/04/3/ 401,815 401,783 WhistleJacket Capital LLC 1.08%, 09/15/04/3/ 669,691 669,563 White Pine Finance LLC 1.08%, 05/17/04/3/ 803,630 803,630 1.08%, 07/06/04/3/ 803,630 803,571 1.08%, 08/26/04/3/ 669,691 669,598 1.09%, 04/20/04/3/ 669,691 669,691 23,331,106 COMMERCIAL PAPER - 0.73% Amsterdam Funding Corp. 1.06%, 10/16/03/3/ 636,207 635,928 Blue Ridge Asset Funding Corp. 1.05%, 10/17/03/3/ 669,691 669,379 Edison Asset Securitization 1.07%, 10/23/03/3/ 1,259,020 1,258,197 Gemini Securitization Corp. 1.05%, 10/17/03/3/ 468,784 468,565 Greenwich Funding Corp. 1.06%, 10/16/03/3/ 790,236 789,887 Jupiter Securitization Corp. 1.05%, 10/20/03/3/ 669,691 669,320 New Center Asset Trust 1.06%, 10/22/03/3/ 669,691 669,277 Park Avenue Receivables Corp. 1.05%, 10/20/03/3/ 669,691 669,320 Preferred Receivables Funding Corp. 1.06%, 10/08/03/3/ 669,691 669,553 Receivables Capital Corp. 1.05%, 10/15/03/3/ 450,140 449,956 Sydney Capital Corp. 1.07%, 10/17/03/3/ 542,450 542,192 UBS Finance (Delaware) Inc. 1.03%, 10/08/03/3/ 1,339,383 1,339,115 1.05%, 10/15/03/3/ 669,691 669,418 1.11%, 10/01/03/3/ 2,678,766 2,678,766 12,178,873 42 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 1000 VALUE INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE ---------------------------------------------------------------------------- TIME DEPOSITS - 0.23% Abbey National Treasury Services PLC 1.15%, 10/01/03/3/ $ 669,691 $ 669,691 Canadian Imperial Bank of Commerce 1.06%, 10/08/03/3/ 334,846 334,846 1.08%, 10/30/03/3/ 535,753 535,753 1.37%, 08/26/04/3/ 1,339,383 1,339,383 Toronto-Dominion Bank 1.33%, 08/23/04/3/ 870,599 870,207 3,749,880 REPURCHASE AGREEMENTS - 0.06% Lehman Brothers Inc. 1.10%, 10/01/03/3/ 1,071,506 1,071,506 1,071,506 TOTAL SHORT TERM INVESTMENTS (Cost: $101,981,191) 101,981,191 TOTAL INVESTMENTS IN SECURITIES - 105.99% (Cost $1,805,690,706) 1,774,054,694 OTHER ASSETS, LESS LIABILITIES - (5.99%) (100,311,881) --------------- NET ASSETS - 100.00% $ 1,673,742,813 =============== /1/ Non-income earning securities. /2/ Security valued at fair value in accordance with procedures approved by the Board of Trustees. See Note 1. /3/ All or a portion of this security represents investments of securities lending collateral. /4/ Issuer is an affiliate of the Fund's investment advisor. See Note 2. SEE NOTES TO FINANCIAL STATEMENTS. SCHEDULES OF INVESTMENTS 43 SCHEDULE OF INVESTMENTS (Unaudited) iSHARES RUSSELL 2000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- COMMON STOCKS - 99.92% Andrew Corp./1/ 674,989 $ 8,295,615 AMR Corp./1/ 714,850 8,185,032 Overture Services Inc./1/ 291,226 7,714,577 Cytyc Corp./1/ 512,444 7,707,158 Titan Corp. (The)/1/ 362,945 7,563,774 RF Micro Devices Inc./1/ 785,562 7,297,871 Avid Technology Inc./1/ 136,309 7,202,568 Conexant Systems Inc./1/ 1,224,053 6,928,140 Sybase Inc./1/ 398,312 6,775,287 Pacific Sunwear of California Inc./1/ 322,990 6,672,973 Louisiana-Pacific Corp./1/ 478,019 6,587,102 AnnTaylor Stores Corp./1/ 203,838 6,551,353 Zale Corp./1/ 146,649 6,512,682 Cymer Inc./1/ 157,797 6,501,236 Covance Inc./1/ 280,864 6,285,736 Sonus Networks Inc./1/ 905,723 6,276,660 York International Corp. 181,243 6,269,195 Skyworks Solutions Inc./1/ 675,443 6,146,531 BJ's Wholesale Club Inc./1/ 316,698 6,134,440 Accredo Health Inc./1/ 218,328 6,111,001 AmerUs Group Co. 178,596 6,072,264 Affiliated Managers Group Inc./1/ 96,097 6,034,892 Take-Two Interactive Software Inc./1/ 176,487 6,030,561 Vitesse Semiconductor Corp./1/ 939,481 6,012,678 INAMED Corp./1/ 81,256 5,968,253 TECHNE Corp./1/ 186,287 5,922,064 Gen-Probe Inc./1/ 108,790 5,893,154 Highwoods Properties Inc. 244,436 5,832,243 Abgenix Inc./1/ 401,788 5,821,908 Fred's Inc. 176,491 5,817,143 Briggs & Stratton Corp. 98,837 5,807,662 Ventas Inc. 338,907 5,802,088 Allmerica Financial Corp./1/ 243,043 5,786,854 UCBH Holdings Inc. 191,366 5,784,994 Energen Corp. 159,667 5,776,752 Cooper Companies Inc. 141,276 5,756,997 First Industrial Realty Trust Inc. 179,360 5,752,075 OSI Pharmaceuticals Inc./1/ 177,065 5,749,301 Health Care REIT Inc. 184,395 5,688,586 Kennametal Inc. 152,035 5,686,109 Westar Energy Inc. 305,788 5,641,789 CACI International Inc. Class A/1/ 131,266 5,624,748 Gateway Inc./1/ 990,847 5,608,194 Standard-Pacific Corp. 147,173 5,577,857 NBTY Inc./1/ 235,363 5,495,726 Oshkosh Truck Corp. 138,367 5,480,717 American Greetings Corp. Class A/1/ 281,645 5,472,362 Atmos Energy Corp. 228,070 5,459,996 Martek Biosciences Corp./1/ 103,642 5,458,824 Roper Industries Inc. 125,030 5,445,057 Mentor Graphics Corp./1/ 308,057 5,400,239 MGI Pharma Inc./1/ 137,304 5,390,555 OfficeMax Inc./1/ 567,785 5,320,145 Alexander & Baldwin Inc. 189,161 5,311,641 South Financial Group Inc. (The) 213,174 5,305,901 Reckson Associates Realty Corp. 229,213 5,297,112 Allegheny Energy Inc./1/ 578,577 5,288,194 United Stationers Inc./1/ 139,584 5,259,525 Corn Products International Inc. 164,569 5,241,523 P.F. Chang's China Bistro Inc./1/ 115,563 5,240,782 Citizens Banking Corp. 197,730 5,222,049 Panera Bread Co. Class A/1/ 127,086 5,205,443 Dade Behring Holdings Inc./1/ 183,044 5,170,993 PETCO Animal Supplies Inc./1/ 163,663 5,106,286 Crown Holdings Inc./1/ 753,565 5,086,564 Beazer Homes USA Inc./1/ 59,909 5,056,320 Airtran Holdings Inc./1/ 301,581 5,051,482 Toro Co. 111,868 5,034,060 KEMET Corp./1/ 393,991 5,019,445 PNM Resources Inc. 178,770 5,012,711 Home Properties of New York Inc. 127,274 4,989,141 Continental Airlines Inc. Class B/1/ 300,423 4,981,013 Phoenix Companies Inc. 430,188 4,968,671 Pediatrix Medical Group Inc./1/ 107,723 4,960,644 Semtech Corp./1/ 268,385 4,954,387 Medicines Co. (The)/1/ 190,539 4,954,014 44 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Patina Oil & Gas Corp. 136,356 $ 4,941,541 Greater Bay Bancorp 237,338 4,936,630 Commercial Federal Corp. 202,129 4,921,841 Ascential Software Corp./1/ 265,027 4,910,950 Intergraph Corp./1/ 210,646 4,903,839 First Niagara Financial Group Inc. 323,321 4,882,147 Charter Communications Inc. Class A/1/ 1,184,674 4,880,857 Extended Stay America Inc./1/ 325,728 4,863,119 Varian Semiconductor Equipment Associates Inc./1/ 129,855 4,863,070 Hot Topic Inc./1/ 215,442 4,856,063 Washington Real Estate Investment Trust 166,412 4,825,948 Hyperion Solutions Corp./1/ 166,602 4,809,800 Arbitron Inc./1/ 136,022 4,801,577 Activision Inc./1/ 401,690 4,800,195 Linens 'N Things Inc./1/ 201,577 4,793,501 Pacific Capital Bancorp 157,110 4,790,284 Kronos Inc./1/ 90,485 4,787,561 Universal Corp. 113,490 4,781,334 Evergreen Resources Inc./1/ 176,798 4,773,546 Essex Property Trust Inc. 76,017 4,767,026 Benchmark Electronics Inc./1/ 112,623 4,760,574 Cooper Tire & Rubber Co. 298,956 4,744,432 IGEN International Inc./1/ 82,043 4,742,085 Southwest Bancorp of Texas Inc. 129,168 4,715,924 Staten Island Bancorp Inc. 242,436 4,715,380 Strayer Education Inc. 48,679 4,707,746 Nationwide Health Properties Inc. 268,690 4,699,388 Electronics For Imaging Inc./1/ 201,419 4,697,091 Cabot Microelectronics Corp./1/ 84,125 4,689,127 Hercules Inc./1/ 413,393 4,683,743 Arch Coal Inc. 210,631 4,678,115 Lexar Media Inc./1/ 273,747 4,664,649 Susquehanna Bancshares Inc. 181,357 4,660,875 Idex Corp. 126,104 4,595,230 Alliance Gaming Corp./1/ 225,531 4,573,769 CMS Energy Corp. 619,640 4,566,747 OmniVision Technologies Inc./1/ 108,111 4,566,609 SkyWest Inc. 263,429 4,562,590 Tetra Tech Inc./1/ 229,156 4,562,496 Chittenden Corp. 153,020 4,552,345 Waste Connections Inc./1/ 129,054 4,528,505 Goodyear Tire & Rubber Co. (The) 688,973 4,526,553 Black Hills Corp. 146,557 4,522,749 United Online Inc./1/ 130,112 4,517,489 SL Green Realty Corp. 125,084 4,516,783 Invacare Corp. 119,878 4,505,015 Western Wireless Corp. Class A/1/ 240,477 4,482,491 Sonic Corp./1/ 177,219 4,480,096 New Jersey Resources Corp. 123,964 4,467,663 Dycom Industries Inc./1/ 218,839 4,462,127 IDACORP Inc. 174,936 4,460,868 CLARCOR Inc. 113,957 4,444,323 EarthLink Inc./1/ 538,730 4,433,748 East West Bancorp Inc. 103,602 4,428,985 Legato Systems Inc./1/ 395,022 4,428,197 Thor Industries Inc. 81,801 4,418,890 Forest Oil Corp./1/ 184,256 4,412,931 Prentiss Properties Trust 142,095 4,404,945 Community First Bankshares Inc. 166,441 4,399,036 Plantronics Inc./1/ 183,223 4,373,533 Sybron Dental Specialties Inc./1/ 174,421 4,372,734 Odyssey Healthcare Inc./1/ 146,448 4,367,079 Tractor Supply Co./1/ 133,036 4,364,911 Flowserve Corp./1/ 214,788 4,360,196 Sylvan Learning Systems Inc./1/ 159,526 4,351,869 Brink's Co. (The) 248,483 4,313,665 Vertex Pharmaceuticals Inc./1/ 350,526 4,311,470 Southern Union Co./1/ 253,605 4,311,285 Callaway Golf Co. 300,626 4,289,933 Documentum Inc./1/ 201,111 4,285,675 Bob Evans Farms Inc. 160,147 4,277,526 Hilb, Rogal & Hamilton Co. 137,260 4,260,550 Tom Brown Inc./1/ 165,525 4,253,993 Mentor Corp. 185,801 4,236,263 AMERIGROUP Corp./1/ 94,623 4,223,024 SCHEDULES OF INVESTMENTS 45 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- TrustCo Bank Corp. NY 340,369 $ 4,206,961 Varian Inc./1/ 134,069 4,199,041 CEC Entertainment Inc./1/ 106,846 4,188,363 Alexandria Real Estate Equities Inc. 86,866 4,172,174 Provident Financial Services Inc. 217,040 4,158,486 Trinity Industries Inc. 160,763 4,155,724 Investment Technology Group Inc./1/ 216,291 4,148,461 Superior Industries International Inc. 102,236 4,145,670 Hollywood Entertainment Corp./1/ 242,918 4,129,606 LifePoint Hospitals Inc./1/ 171,177 4,116,807 Landstar System Inc./1/ 67,273 4,104,998 Emmis Communications Corp./1/ 203,192 4,100,415 Cognex Corp. 155,206 4,080,366 Men's Wearhouse Inc. (The)/1/ 158,993 4,078,170 Yellow Corp./1/ 135,711 4,055,045 FMC Corp./1/ 160,887 4,054,352 Minerals Technologies Inc. 79,413 4,042,122 GATX Corp. 191,020 4,040,073 Alkermes Inc./1/ 294,458 4,039,964 Gables Residential Trust 124,901 4,036,800 Kellwood Co. 120,231 4,021,727 Payless ShoeSource Inc./1/ 310,608 4,019,268 Commerce Group Inc. 105,785 4,015,599 Commonwealth Telephone Enterprises Inc./1/ 99,952 4,011,074 Cincinnati Bell Inc./1/ 787,280 4,007,255 Albemarle Corp. 145,757 4,001,030 Cerner Corp./1/ 129,581 4,000,165 Mueller Industries Inc./1/ 156,565 3,984,579 Advanced Digital Information Corp./1/ 283,081 3,968,796 Quiksilver Inc./1/ 248,524 3,963,958 Corrections Corp. of America/1/ 160,358 3,956,032 Visteon Corp. 598,686 3,951,328 Taubman Centers Inc. 201,466 3,948,734 Dillards Inc. Class A 281,858 3,940,375 La Quinta Corp./1/ 632,118 3,938,095 Delta & Pine Land Co. 171,135 3,937,816 Gartner Inc. Class A/1/ 356,932 3,933,391 Post Properties Inc. 144,263 3,928,281 United Rentals Inc./1/ 243,033 3,910,401 Power Integrations Inc./1/ 117,402 3,902,442 Olin Corp. 246,308 3,896,593 USF Corp. 123,499 3,886,514 LandAmerica Financial Group Inc. 84,724 3,883,748 MPS Group Inc./1/ 430,961 3,878,649 Brookline Bancorp Inc. 263,348 3,876,483 Banta Corp. 107,575 3,872,700 Flir Systems Inc./1/ 150,981 3,868,133 Applera Corp. - Celera Genomics Group/1/ 329,111 3,847,308 Christopher & Banks Corp. 161,045 3,842,534 Sensient Technologies Corp. 181,520 3,811,920 SCP Pool Corp./1/ 136,882 3,808,057 ADVO Inc./1/ 91,227 3,797,780 Knight Trading Group Inc./1/ 331,564 3,796,408 MAF Bancorp Inc. 98,259 3,753,494 Albany International Corp. Class A 121,697 3,753,135 Vicuron Pharmaceuticals Inc./1/ 211,664 3,746,453 NPS Pharmaceuticals Inc./1/ 134,438 3,744,098 Massey Energy Co. 280,928 3,736,342 Ariba Inc./1/ 1,226,866 3,729,673 Cimarex Energy Co./1/ 190,139 3,726,724 Silicon Valley Bancshares/1/ 134,747 3,723,060 Axcelis Technologies Inc./1/ 449,766 3,715,067 Enterasys Networks Inc./1/ 928,299 3,713,196 W Holding Co. Inc. 207,418 3,712,782 Terex Corp./1/ 200,250 3,710,633 Adaptec Inc./1/ 489,931 3,703,878 Thoratec Corp./1/ 217,952 3,703,004 Sycamore Networks Inc./1/ 754,140 3,695,286 Ohio Casualty Corp./1/ 254,161 3,685,335 Selective Insurance Group Inc. 123,193 3,666,224 New Century Financial Corp. 129,276 3,661,096 Donnelley (R.H.) Corp./1/ 90,566 3,659,772 Ralcorp Holdings Inc./1/ 132,067 3,658,256 Stone Energy Corp./1/ 103,533 3,652,644 46 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Impac Mortgage Holdings Inc. 224,865 $ 3,640,564 Tekelec/1/ 233,139 3,639,300 Yankee Candle Co. Inc. (The)/1/ 142,342 3,626,874 Zoran Corp./1/ 185,701 3,621,170 Texas Regional Bancshares Inc. Class A 107,154 3,620,734 Cost Plus Inc./1/ 97,739 3,608,524 NII Holdings Inc. Class B/1/ 59,863 3,573,222 Perrigo Co. 279,829 3,562,223 Potlatch Corp. 119,637 3,555,612 American Eagle Outfitters Inc./1/ 239,250 3,555,255 First Commonwealth Financial Corp. 269,677 3,548,949 Fremont General Corp. 278,973 3,545,747 CSG Systems International Inc./1/ 239,478 3,537,090 Wolverine World Wide Inc. 182,323 3,537,066 UMB Financial Corp. 74,878 3,531,995 Brooks Automation Inc./1/ 168,902 3,530,052 Openwave Systems Inc./1/ 827,583 3,492,400 Cray Inc./1/ 317,512 3,486,282 GlobeSpanVirata Inc./1/ 482,401 3,482,935 Delphi Financial Group Inc. Class A 74,729 3,476,393 Hughes Supply Inc. 107,100 3,475,395 Ferro Corp. 162,602 3,473,179 Owens & Minor Inc. 143,956 3,469,340 Charter Municipal Mortgage Acceptance Co. 188,411 3,462,994 Hutchinson Technology Inc./1/ 104,499 3,458,917 Macrovision Corp./1/ 187,245 3,458,415 Capital Automotive 112,962 3,446,471 Matthews International Corp. Class A 130,474 3,445,818 Joy Global Inc./1/ 219,297 3,442,963 Avista Corp. 220,348 3,433,022 S&T Bancorp Inc. 120,323 3,429,206 Acuity Brands Inc. 189,766 3,427,174 TriQuint Semiconductor Inc./1/ 608,595 3,408,132 Digital River Inc./1/ 124,545 3,406,306 Northwest Natural Gas Co. 117,294 3,401,526 Watson Wyatt & Co. Holdings/1/ 150,910 3,396,984 Diagnostic Products Corp. 93,309 3,389,916 Technitrol Inc./1/ 183,631 3,380,647 Ligand Pharmaceuticals Inc. Class B/1/ 261,143 3,366,133 Harland (John H.) Co. 127,005 3,361,822 Rare Hospitality International Inc./1/ 134,850 3,359,114 Pep Boys-Manny, Moe & Jack Inc. 219,546 3,359,054 Trimble Navigation Ltd./1/ 145,023 3,357,282 Perot Systems Corp. Class A/1/ 335,660 3,356,600 Copart Inc./1/ 310,499 3,353,389 Chemical Financial Corp. 108,282 3,351,328 Cumulus Media Inc. Class A/1/ 196,381 3,348,296 NDCHealth Corp. 159,624 3,344,123 KV Pharmaceuticals Co./1/ 148,132 3,332,981 Great Lakes Chemical Corp. 165,512 3,328,446 Heartland Express Inc. 138,569 3,328,427 Advanced Neuromodulation Systems Inc./1/ 83,096 3,315,530 Credence Systems Corp./1/ 288,289 3,315,323 VISX Inc./1/ 173,957 3,313,881 Cleco Corp. 202,489 3,308,670 Coherent Inc./1/ 133,993 3,300,248 Lattice Semiconductor Corp./1/ 463,205 3,293,388 Alpharma Inc. Class A 176,789 3,288,275 Philadelphia Consolidated Holding Corp./1/ 71,169 3,288,008 Wilson Greatbatch Technologies Inc./1/ 91,128 3,285,164 MacDermid Inc. 124,035 3,280,726 CNET Networks Inc./1/ 462,775 3,276,447 Flowers Foods Inc. 143,680 3,275,904 Federal Signal Corp. 219,787 3,274,826 FTI Consulting Inc./1/ 188,673 3,273,477 Lincoln Electric Holding Inc. 147,088 3,266,824 VCA Antech Inc./1/ 138,566 3,263,229 St. Mary Land & Exploration Co. 128,437 3,252,025 Priority Healthcare Corp. Class B/1/ 157,931 3,243,903 Anixter International Inc./1/ 142,192 3,237,712 SCHEDULES OF INVESTMENTS 47 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Commercial Net Lease Realty Inc. 189,105 $ 3,220,458 Insight Enterprises Inc./1/ 211,305 3,216,062 Harleysville Group Inc. 137,803 3,212,188 Engineered Support Systems Inc. 52,670 3,186,535 Silicon Storage Technology Inc./1/ 364,130 3,186,138 IMC Global Inc. 496,326 3,181,450 Tupperware Corp. 237,718 3,180,667 Wintrust Financial Corp. 84,409 3,179,687 Southwest Gas Corp. 139,188 3,159,568 Unit Corp./1/ 167,674 3,158,978 Kilroy Realty Corp. 110,410 3,152,205 Fuller (H.B.) Co. 129,718 3,148,256 Cathay Bancorp Inc. 70,822 3,133,873 Republic Bancorp Inc. 235,060 3,130,999 FileNET Corp./1/ 155,828 3,127,468 Kansas City Southern Industries Inc./1/ 282,481 3,127,065 DSP Group Inc./1/ 125,407 3,123,888 Micrel Inc./1/ 255,967 3,120,238 CAL Dive International Inc./1/ 160,284 3,115,921 Liberty Corp. 74,202 3,112,774 RSA Security Inc./1/ 217,740 3,109,327 ATMI Inc./1/ 122,455 3,094,438 Thomas & Betts Corp./1/ 195,073 3,091,907 Unova Inc./1/ 210,924 3,090,037 Washington Group International Inc./1/ 114,550 3,087,123 Flagstar Bancorp Inc. 133,956 3,074,290 Kroll Inc./1/ 165,231 3,073,297 Interstate Bakeries Corp. 204,705 3,070,575 Otter Tail Corp. 117,339 3,067,241 FirstFed Financial Corp./1/ 77,597 3,065,081 Grey Global Group Inc. 4,025 3,063,427 Brandywine Realty Trust 118,819 3,052,460 Parametric Technology Corp./1/ 977,872 3,050,961 Select Medical Corp./1/ 105,665 3,043,152 Crompton Corp. 522,695 3,036,858 Nordson Corp. 117,290 3,036,638 Hancock Holding Co. 61,169 3,018,690 Keane Inc./1/ 236,039 3,016,578 NBT Bancorp Inc. 148,564 3,008,421 Sonic Automotive Inc. 124,689 3,000,017 Penn National Gaming Inc./1/ 140,669 2,999,063 Pennsylvania Real Estate Investment Trust 89,628 2,998,057 Dionex Corp./1/ 76,150 2,997,264 Senior Housing Properties Trust 207,772 2,993,995 Alaska Air Group Inc./1/ 107,506 2,990,817 Power-One Inc./1/ 290,560 2,989,862 Esperion Therapeutics Inc./1/ 153,880 2,982,194 Georgia Gulf Corp. 127,641 2,980,417 Maverick Tube Corp./1/ 192,019 2,980,135 Cabot Oil & Gas Corp. 114,586 2,979,236 Borland Software Corp./1/ 323,295 2,977,547 IHOP Corp. 90,438 2,970,888 Provident Bankshares Corp. 104,954 2,964,951 Glimcher Realty Trust 140,600 2,962,442 First Citizens BancShares Inc. Class A 27,925 2,951,672 Telik Inc./1/ 146,734 2,942,017 Southwestern Energy Co./1/ 162,326 2,938,101 Lennox International Inc. 200,787 2,933,498 Urban Outfitters Inc./1/ 112,516 2,932,167 Black Box Corp. 73,414 2,922,611 NetIQ Corp./1/ 244,679 2,921,467 ILEX Oncology Inc./1/ 175,659 2,917,696 United Natural Foods Inc./1/ 87,518 2,904,722 Sports Authority Inc. (The)/1/ 92,149 2,899,008 Couer D'Alene Mines Corp./1/ 931,635 2,897,385 CH Energy Group Inc. 65,701 2,890,844 Colonial Properties Trust 80,158 2,888,093 United National Bancorp 86,796 2,882,495 USG Corp./1/ 167,189 2,882,338 j2 Global Communications Inc./1/ 75,819 2,868,233 CVB Financial Corp. 150,644 2,862,236 AMCORE Financial Inc. 113,565 2,857,295 ProQuest Co./1/ 108,582 2,855,707 THQ Inc./1/ 173,726 2,852,581 CV Therapeutics Inc./1/ 129,528 2,849,616 Casey's General Store Inc. 203,001 2,848,104 48 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Plexus Corp./1/ 183,196 $ 2,846,866 eResearch Technology Inc./1/ 81,730 2,846,656 CommScope Inc./1/ 235,737 2,842,988 Aquila Inc./1/ 840,085 2,839,487 Onyx Pharmaceuticals Inc./1/ 131,401 2,831,692 Chateau Communities Inc. 94,891 2,823,956 Baldor Electric Co. 133,681 2,822,006 SEACOR SMIT Inc./1/ 77,911 2,818,041 ProAssurance Corp./1/ 108,730 2,808,496 Kaydon Corp. 118,256 2,807,397 Cyberonics Inc./1/ 90,942 2,806,470 Granite Construction Inc. 150,037 2,802,691 AtheroGenics Inc./1/ 166,985 2,795,329 Waypoint Financial Corp. 139,513 2,790,260 Knight Transportation Inc./1/ 111,165 2,786,907 Chiquita Brands International Inc./1/ 157,220 2,782,794 Extreme Networks Inc./1/ 441,005 2,782,742 Simpson Manufacturing Co. Inc./1/ 68,001 2,780,561 Millennium Chemicals Inc. 290,168 2,771,104 Photronics Inc./1/ 130,330 2,770,816 Jack in the Box Inc./1/ 155,610 2,769,858 Pacific Northwest Bancorp 77,660 2,768,579 Quanta Services Inc./1/ 334,536 2,766,613 Regeneron Pharmaceuticals Inc./1/ 156,503 2,765,408 Viasys Healthcare Inc./1/ 136,799 2,763,340 Ask Jeeves Inc./1/ 158,456 2,757,134 Tecumseh Products Co. Class A 73,789 2,753,068 BankUnited Financial Corp. Class A/1/ 130,531 2,751,593 PSS World Medical Inc./1/ 310,187 2,751,359 National Penn Bancshares Inc. 99,449 2,749,768 Lexington Corp. Properties Trust 143,386 2,747,276 Nektar Therapeutics/1/ 214,303 2,743,078 CONMED Corp./1/ 132,644 2,737,772 BankAtlantic Bancorp Inc. Class A 192,122 2,737,738 Longs Drug Stores Corp. 135,910 2,735,868 RLI Corp. 83,004 2,732,492 Entegris Inc./1/ 241,747 2,731,741 Priceline.com Inc./1/ 94,172 2,730,046 Net.B@nk Inc. 219,211 2,729,177 Arkansas Best Corp. 99,220 2,728,550 Genta Inc./1/ 215,262 2,727,370 Entertainment Properties Trust 90,848 2,725,440 Moog Inc. Class A/1/ 69,507 2,724,674 Spinnaker Exploration Co./1/ 113,428 2,722,272 G&K Services Inc. Class A 77,713 2,719,955 Province Healthcare Co./1/ 209,550 2,713,673 Actuant Corp. Class A/1/ 48,296 2,711,820 Trust Co. of New Jersey (The) 84,661 2,709,152 Northwest Airlines Corp./1/ 278,656 2,702,963 Inveresk Research Group Inc./1/ 135,324 2,686,181 Electro Scientific Industries Inc./1/ 127,200 2,680,104 Fossil Inc./1/ 110,597 2,679,765 Grey Wolf Inc./1/ 769,370 2,677,408 REMEC Inc./1/ 262,041 2,672,818 Catalina Marketing Corp./1/ 175,874 2,671,526 Genesis Health Ventures Inc./1/ 110,153 2,671,210 First Charter Corp. 135,989 2,665,384 Journal Register Co./1/ 142,133 2,664,994 Curtiss-Wright Corp. 37,734 2,664,775 Charming Shoppes Inc./1/ 465,729 2,659,313 AmSurg Corp./1/ 80,548 2,657,279 CUNO Inc./1/ 67,659 2,651,563 Digital Insight Corp./1/ 133,228 2,651,237 Adolor Corp./1/ 144,336 2,648,566 eFunds Corp./1/ 213,644 2,638,503 American Italian Pasta Co. Class A/1/ 68,158 2,637,033 Jones Lang LaSalle Inc./1/ 141,775 2,622,837 CMGI Inc./1/ 1,690,334 2,620,018 Hecla Mining Co./1/ 499,980 2,619,895 Manitowoc Co. Inc. (The) 120,719 2,618,395 EGL Inc./1/ 143,951 2,617,029 Iomega Corp./1/ 234,565 2,613,054 FEI Co./1/ 111,912 2,612,026 Newcastle Investment Corp. 113,581 2,611,227 Anteon International Corp./1/ 85,272 2,609,323 Novastar Financial Inc. 45,326 2,604,885 Steel Dynamics Inc./1/ 172,027 2,604,489 SCHEDULES OF INVESTMENTS 49 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Lin TV Corp. Class A/1/ 122,422 $ 2,602,692 Choice Hotels International Inc./1/ 89,645 2,601,498 Horace Mann Educators Corp. 179,263 2,601,106 El Paso Electric Co./1/ 225,073 2,599,593 Palm Inc./1/ 132,946 2,599,094 Ultratech Inc./1/ 92,049 2,597,623 Sierra Pacific Resources/1/ 535,305 2,596,229 MKS Instruments Inc./1/ 119,828 2,595,474 Exar Corp./1/ 183,355 2,590,806 Manhattan Associates Inc./1/ 99,818 2,584,288 Group 1 Automotive Inc./1/ 74,718 2,580,760 Brady Corp. Class A 81,119 2,580,395 Frontier Airlines Inc./1/ 156,724 2,579,677 MFA Mortgage Investments Inc. 270,954 2,579,482 Roadway Corp. 52,876 2,578,763 Scientific Games Corp. Class A/1/ 225,898 2,577,496 Connecticut Bankshares Inc. 50,234 2,574,492 Brown Shoe Co. Inc. 81,200 2,574,040 Progress Software Corp./1/ 119,453 2,568,240 MICROS Systems Inc./1/ 75,198 2,568,012 Transaction Systems Architects Inc. Class A/1/ 154,432 2,565,116 Harbor Florida Bancshares Inc. 95,764 2,553,068 BARRA Inc./1/ 67,955 2,551,710 LTX Corp./1/ 226,432 2,549,624 ValueClick Inc./1/ 302,769 2,546,287 EMCOR Group Inc./1/ 59,792 2,544,150 Argosy Gaming Co./1/ 104,112 2,540,333 Winnebago Industries Inc. 56,971 2,539,767 Eclipsys Corp./1/ 158,821 2,539,548 Harleysville National Corp. 108,657 2,539,314 Align Technology Inc./1/ 202,602 2,534,551 Modine Manufacturing Co. 106,009 2,523,014 City Holding Co. 75,957 2,521,772 Manufactured Home Communities Inc. 64,144 2,513,162 Seacoast Financial Services Corp. 121,323 2,512,599 American Healthways Inc./1/ 59,812 2,511,506 Newport Corp./1/ 176,735 2,491,964 Quanex Corp. 74,159 2,491,742 Asyst Technologies Inc./1/ 176,638 2,485,297 ESCO Technologies Inc./1/ 54,770 2,479,438 DRS Technologies Inc./1/ 102,745 2,479,237 Jarden Corp./1/ 65,654 2,478,438 Warnaco Group Inc. (The)/1/ 158,661 2,473,525 UniSource Energy Corp. 130,027 2,473,114 Sun Communities Inc. 62,718 2,471,089 Beverly Enterprises Inc./1/ 416,832 2,467,645 American Management Systems Inc./1/ 193,513 2,467,291 Corporate Office Properties Trust 133,197 2,465,476 MGE Energy Inc. 81,440 2,464,374 Vintage Petroleum Inc. 226,502 2,464,342 Kulicke & Soffa Industries Inc./1/ 227,278 2,463,694 Ryan's Family Steak Houses Inc./1/ 192,532 2,462,484 Magnum Hunter Resources Inc./1/ 308,094 2,461,671 Umpqua Holdings Corp. 129,050 2,455,822 R&G Financial Corp. Class B 83,923 2,450,552 USEC Inc. 375,249 2,450,376 Summit Properties Inc. 107,823 2,449,739 Genlyte Group Inc. (The)/1/ 55,006 2,448,867 Redwood Trust Inc. 57,704 2,446,650 Heritage Property Investment Trust Inc. 84,542 2,441,573 Centene Corp./1/ 80,083 2,433,722 ABM Industries Inc. 171,986 2,433,602 Reliance Steel & Aluminum Co. 109,614 2,432,335 Anworth Mortgage Asset Corp. 170,287 2,431,698 eSpeed, Inc./1/ 107,537 2,431,412 Allegheny Technologies Inc. 371,138 2,430,954 Arrow International Inc. 105,499 2,426,477 MAXIMUS Inc./1/ 70,422 2,426,038 Kirby Corp./1/ 84,245 2,417,831 Oceaneering International Inc./1/ 102,779 2,417,362 Actel Corp./1/ 100,582 2,410,951 Independent Bank Corp. (Michigan) 82,220 2,407,402 WD-40 Co. 75,943 2,406,634 Sohu.com Inc./1/ 77,374 2,406,331 50 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- ANSYS Inc./1/ 67,692 $ 2,405,774 Advanced Medical Optics Inc./1/ 133,030 2,389,219 Mid-State Bancshares 107,216 2,387,700 Dollar Thrifty Automotive Group Inc./1/ 104,709 2,378,988 Select Comfort Corp./1/ 89,608 2,374,612 Checkpoint Systems Inc./1/ 150,026 2,370,411 Texas Industries Inc. 96,240 2,367,504 Hollinger International Inc. 191,684 2,367,297 InfoSpace Inc./1/ 115,880 2,365,111 Aeropostale Inc./1/ 87,378 2,363,575 Advent Software Inc./1/ 146,572 2,358,343 Hanover Compressor Co./1/ 237,579 2,352,032 Navigant Consulting Co./1/ 191,020 2,351,456 Laclede Group Inc. (The) 87,032 2,350,734 CSK Auto Corp./1/ 152,327 2,348,882 MB Financial Inc. 52,625 2,336,550 Digene Corp./1/ 56,943 2,326,691 Ruddick Corp. 149,690 2,326,183 United Community Banks Inc. 83,663 2,314,955 FelCor Lodging Trust Inc. 223,399 2,314,414 Enzon Pharmaceuticals Inc./1/ 198,588 2,311,564 Connetics Corp./1/ 127,714 2,306,515 Integra LifeSciences Holdings Corp./1/ 81,349 2,301,363 Too Inc./1/ 156,039 2,298,454 First Financial Bankshares Inc. 62,144 2,296,842 Bowne & Co. Inc. 153,630 2,296,768 US Oncology Inc./1/ 313,843 2,294,192 Wabtec Corp. 144,462 2,289,723 Price Communications Corp./1/ 184,601 2,289,052 Community Bank System Inc. 52,122 2,288,677 Empire District Electric Co. (The) 103,772 2,282,984 Aztar Corp./1/ 128,880 2,282,465 WMS Industries Inc./1/ 100,680 2,281,409 Longview Fibre Co. 233,420 2,280,513 Symyx Technologies Inc./1/ 105,829 2,279,557 Aaron Rents Inc. 108,766 2,278,648 JLG Industries Inc. 196,778 2,266,883 Ventana Medical Systems Inc./1/ 56,244 2,266,633 Rogers Corp./1/ 72,857 2,260,024 GrafTech International Ltd./1/ 282,385 2,259,080 Spartech Corp. 105,740 2,252,262 MicroStrategy Inc. Class A/1/ 48,918 2,250,717 Boyd Gaming Corp. 146,849 2,240,916 Equity One Inc. 131,657 2,238,169 Glacier Bancorp Inc. 81,536 2,236,532 Tesoro Petroleum Corp./1/ 263,985 2,233,313 United Surgical Partners International Inc./1/ 78,860 2,231,738 Hudson River Bancorp Inc. 69,364 2,228,665 Anchor BanCorp Wisconsin Inc. 94,859 2,227,289 PS Business Parks Inc. 59,005 2,226,849 Six Flags Inc./1/ 423,236 2,226,221 BioMarin Pharmaceutical Inc./1/ 290,573 2,225,789 Mid-America Apartment Communities Inc. 73,694 2,224,085 Pinnacle Systems Inc./1/ 263,425 2,220,673 SureWest Communications 66,425 2,208,631 Sotheby's Holdings Inc. Class A/1/ 203,858 2,205,744 Inspire Pharmaceuticals Inc./1/ 128,102 2,203,354 Dot Hill Systems Corp./1/ 159,867 2,199,770 Mindspeed Technologies Inc./1/ 407,845 2,198,285 Kopin Corp./1/ 317,196 2,198,168 Resources Connection Inc./1/ 89,952 2,195,548 Plains Exploration & Production Co./1/ 175,957 2,194,184 Regal-Beloit Corp. 107,424 2,191,450 Sierra Health Services Inc./1/ 106,396 2,186,438 Informatica Corp./1/ 293,446 2,186,173 PolyMedica Corp. 82,448 2,184,872 Houston Exploration Co./1/ 62,234 2,184,413 InterMune Inc./1/ 114,443 2,183,572 First Financial Bancorp 147,997 2,182,956 Tanox Inc./1/ 108,961 2,180,310 Movie Gallery Inc./1/ 110,918 2,179,539 TierOne Corp./1/ 103,484 2,178,338 Rayovac Corp./1/ 148,812 2,172,655 Quest Software Inc./1/ 179,429 2,171,091 Vignette Corp./1/ 943,159 2,169,266 Sterling Bancshares Inc. 181,698 2,167,657 SCHEDULES OF INVESTMENTS 51 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Boston Private Financial Holdings Inc. 91,984 $ 2,167,143 First Merchants Corp. 84,339 2,160,765 Bright Horizons Family Solutions Inc./1/ 54,071 2,160,136 Dick's Sporting Goods Inc./1/ 57,804 2,158,401 Stewart Information Services Corp./1/ 76,405 2,157,677 Sandy Spring Bancorp Inc. 66,283 2,155,523 Superior Energy Services Inc./1/ 219,609 2,152,168 South Jersey Industries Inc. 56,816 2,150,486 Teledyne Technologies Inc./1/ 147,567 2,147,100 UICI/1/ 170,650 2,139,951 Dime Community Bancshares 92,901 2,136,723 Schulman (A.) Inc. 134,693 2,136,231 Gray Television Inc. 182,852 2,135,711 Smith (A.O.) Corp. 76,055 2,130,301 Jacuzzi Brands Inc./1/ 343,586 2,130,233 Photon Dynamics Inc./1/ 72,995 2,127,804 Internet Security Systems Inc./1/ 169,716 2,121,450 Saxon Capital Inc./1/ 123,756 2,121,178 Commercial Metals Co. 115,243 2,117,014 Anthracite Capital Inc. 219,195 2,115,232 Westcorp Inc. 60,495 2,114,300 Finish Line Inc. (The)/1/ 80,380 2,113,994 Tredegar Corp. 140,419 2,113,306 Aeroflex Inc./1/ 238,712 2,112,601 Alabama National Bancorp 44,438 2,110,805 School Specialty Inc./1/ 74,761 2,109,008 EastGroup Properties Inc. 75,819 2,106,252 ElkCorp 89,251 2,102,754 Frontier Financial Corp. 70,300 2,101,970 Inter-Tel Inc. 85,334 2,094,950 WebEx Communications Inc./1/ 109,917 2,087,324 Geron Corp./1/ 152,162 2,084,619 RAIT Investment Trust 90,571 2,079,510 Veeco Instruments Inc./1/ 104,113 2,078,095 Shuffle Master Inc./1/ 76,005 2,065,816 Wausau-Mosinee Paper Corp. 169,015 2,063,673 Dendrite International Inc./1/ 135,693 2,061,177 Mercury Computer Systems Inc./1/ 96,610 2,060,691 WFS Financial Inc./1/ 55,628 2,059,905 TIBCO Software Inc./1/ 383,419 2,051,292 Imagistics International Inc./1/ 70,769 2,050,886 Micromuse Inc./1/ 249,961 2,044,681 Identix Inc./1/ 390,669 2,043,199 American Medical Systems Holdings Inc./1/ 94,072 2,041,362 Pacer International Inc./1/ 102,352 2,039,875 Financial Federal Corp./1/ 66,721 2,035,658 Landry's Restaurants Inc. 98,767 2,034,600 Cornerstone Realty Income Trust Inc. 250,488 2,023,943 Advisory Board Co. (The)/1/ 44,520 2,023,434 Griffon Corp./1/ 112,637 2,022,961 Littelfuse Inc./1/ 87,800 2,019,400 Kindred Healthcare Inc./1/ 53,843 2,016,420 Microsemi Corp./1/ 132,263 2,015,688 Akamai Technologies Inc./1/ 469,382 2,013,649 Cambrex Corp. 88,397 2,006,612 Enzo Biochem Inc./1/ 102,705 2,003,775 Sunrise Senior Living Inc./1/ 76,137 1,997,074 Medarex Inc./1/ 336,764 1,997,011 Powerwave Technologies Inc./1/ 301,500 1,995,930 K-Swiss Inc. Class A 55,325 1,991,147 Quantum Corp./1/ 645,510 1,988,171 Bank Mutual Corp. 46,709 1,982,797 Guitar Center Inc./1/ 61,644 1,982,471 Tularik Inc./1/ 200,560 1,977,522 Cell Genesys Inc./1/ 156,966 1,974,632 Unizan Financial Corp. 98,775 1,970,561 Sovran Self Storage Inc. 59,432 1,970,171 Russell Corp. 120,692 1,967,280 Sterling Financial Corp. (Pennsylvania) 77,403 1,966,036 Per-Se Technologies Inc./1/ 122,742 1,963,872 Ionics Inc./1/ 80,265 1,963,282 Meritage Corp./1/ 41,502 1,960,970 Stewart & Stevenson Services Inc. 130,207 1,955,709 52 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- F5 Networks Inc./1/ 101,587 $ 1,954,534 Carpenter Technology Corp. 91,149 1,954,235 Orbital Sciences Corp./1/ 210,542 1,953,830 Helix Technology Corp. 119,282 1,952,646 Gold Bancorp Inc. 160,892 1,951,620 NCO Group Inc./1/ 83,073 1,949,723 MCG Capital Corp. 124,818 1,948,409 Triumph Group Inc./1/ 65,280 1,945,344 Insight Communications Co. Inc./1/ 203,670 1,938,938 JDA Software Group Inc./1/ 130,373 1,938,647 Jo-Ann Stores Inc./1/ 69,307 1,933,665 SERENA Software Inc./1/ 103,960 1,933,656 Atrix Laboratories Inc./1/ 93,877 1,932,927 Denbury Resources Inc./1/ 156,377 1,932,820 Alfa Corp. 154,321 1,932,099 WesBanco Inc. 82,169 1,930,972 WilTel Communications Inc./1/ 120,686 1,928,562 Monaco Coach Corp./1/ 116,302 1,924,798 TBC Corp./1/ 76,736 1,922,237 Florida East Coast Industries Inc. 66,815 1,920,931 CTS Corp. 156,043 1,920,889 Primedia Inc./1/ 673,739 1,920,156 Headwaters Inc./1/ 119,095 1,917,429 InVision Technologies Inc./1/ 78,770 1,917,262 AMLI Residential Properties Trust 73,057 1,914,093 Solutia Inc. 479,321 1,912,491 Websense Inc./1/ 89,847 1,911,046 Kelly Services Inc. Class A 76,483 1,907,486 Sterling Financial Corp. (Washington)/1/ 67,539 1,901,223 Gymboree Corp./1/ 134,926 1,901,107 AMC Entertainment Inc./1/ 141,820 1,900,388 Ocular Sciences Inc./1/ 85,278 1,899,994 ExpressJet Holdings Inc./1/ 137,447 1,896,769 OM Group Inc./1/ 129,490 1,895,734 Speedway Motorsports Inc. 64,233 1,895,516 Central Garden & Pet Co./1/ 72,374 1,890,409 Corus Bankshares Inc. 35,332 1,890,262 First Community Bancorp 56,418 1,889,439 Spherion Corp./1/ 271,084 1,886,745 Komag Inc./1/ 107,476 1,882,980 Magma Design Automation Inc./1/ 95,950 1,882,539 International Multifoods Corp./1/ 80,589 1,881,753 Agile Software Corp./1/ 197,545 1,880,628 Tetra Technologies Inc./1/ 91,156 1,879,637 ShopKo Stores Inc./1/ 125,193 1,877,895 Arch Chemicals Inc. 90,270 1,877,616 First Financial Corp. 31,052 1,875,541 UIL Holdings Corp. 53,533 1,873,120 Cohu Inc. 95,706 1,872,009 Wabash National Corp./1/ 117,366 1,871,988 Parkway Properties Inc. 42,818 1,871,147 Itron Inc./1/ 93,060 1,867,714 M/I Schottenstein Homes Inc. 47,055 1,866,672 California Water Service Group 71,987 1,857,984 Wind River Systems Inc./1/ 326,184 1,855,987 Safeguard Scientifics Inc./1/ 545,745 1,855,533 Nu Skin Enterprises Inc. Class A 145,462 1,854,641 National Health Investors Inc. 101,398 1,848,486 Hain Celestial Group Inc./1/ 101,848 1,846,504 Labor Ready Inc./1/ 183,153 1,840,688 Handleman Co. 108,939 1,838,890 POZEN Inc./1/ 103,326 1,837,136 Esterline Technologies Corp./1/ 95,167 1,835,771 PFF Bancorp Inc. 57,462 1,831,889 Insituform Technologies Inc. Class A/1/ 102,940 1,828,214 CIMA Labs Inc./1/ 65,371 1,827,119 IDX Systems Corp./1/ 78,936 1,825,000 Cash America International Inc. 111,194 1,823,582 Wright Medical Group Inc./1/ 72,016 1,820,564 Columbia Laboratories Inc./1/ 150,637 1,819,695 Overseas Shipholding Group Inc. 70,374 1,819,168 Stride Rite Corp. 168,328 1,817,942 FuelCell Energy Inc./1/ 155,356 1,817,665 Shaw Group Inc. (The)/1/ 172,462 1,812,576 W-H Energy Services Inc./1/ 101,692 1,810,118 First Sentinel Bancorp Inc. 101,170 1,809,931 SCHEDULES OF INVESTMENTS 53 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Orthodontic Centers of America Inc./1/ 229,403 $ 1,807,696 Corvis Corp./1/ 1,397,578 1,802,876 PAREXEL International Corp./1/ 117,680 1,802,858 Methode Electronics Inc. Class A 152,406 1,799,915 Mykrolis Corp./1/ 148,213 1,799,306 United Therapeutics Inc./1/ 79,598 1,798,119 Belden Inc. 102,651 1,793,313 Park Electrochemical Corp. 78,695 1,790,311 ScanSource Inc./1/ 48,983 1,789,839 Aviall Inc./1/ 144,126 1,784,280 Oxford Industries Inc. 27,734 1,780,523 Cubic Corp. 70,760 1,777,491 Albany Molecular Research Inc./1/ 119,948 1,776,430 Woodward Governor Co. 40,458 1,768,419 Bandag Inc. 52,426 1,768,329 C&D Technologies Inc. 93,450 1,768,074 Multimedia Games Inc./1/ 48,515 1,765,461 Bay View Capital Corp./1/ 290,791 1,765,101 SafeNet Inc./1/ 48,835 1,764,409 Sinclair Broadcast Group Inc. Class A/1/ 173,553 1,763,298 @Road Inc./1/ 130,949 1,761,264 Frontier Oil Corp. 119,483 1,756,400 Trammell Crow Co./1/ 141,024 1,755,749 CIBER Inc./1/ 230,948 1,755,205 Getty Realty Corp. 71,565 1,753,342 PracticeWorks Inc./1/ 81,660 1,753,240 Cirrus Logic Inc./1/ 316,774 1,751,760 Comstock Resources Inc./1/ 130,823 1,747,795 First Financial Holdings Inc. 57,947 1,747,682 Remington Oil & Gas Corp./1/ 96,196 1,745,957 Tuesday Morning Corp./1/ 62,709 1,745,191 Mid Atlantic Realty Trust 83,005 1,743,105 Weis Markets Inc. 51,115 1,738,421 Irwin Financial Corp. 71,528 1,738,130 Electronics Boutique Holdings Corp./1/ 60,821 1,737,656 Hooper Holmes Inc. 260,555 1,732,691 Harmonic Inc./1/ 276,344 1,732,677 Universal Forest Products Inc. 71,335 1,731,300 Offshore Logistics Inc./1/ 85,207 1,729,702 Intuitive Surgical Inc./1/ 103,650 1,728,882 Analogic Corp. 36,009 1,728,432 Impax Laboratories Inc./1/ 138,106 1,727,706 Haemonetics Corp./1/ 73,082 1,725,466 Portal Software Inc./1/ 119,088 1,724,394 Terayon Communication Systems Inc./1/ 299,408 1,721,596 SurModics Inc./1/ 64,098 1,720,390 Nabi Biopharmaceuticals/1/ 203,920 1,719,046 Action Performance Companies Inc. 70,324 1,718,719 Triad Guaranty Inc./1/ 34,866 1,711,223 Phillips-Van Heusen Corp. 113,998 1,711,110 Stage Stores Inc./1/ 67,093 1,709,530 Schweitzer-Mauduit International Inc. 67,628 1,707,607 Secure Computing Corp./1/ 146,004 1,705,327 NCI Building Systems Inc./1/ 85,675 1,704,933 Tompkins Trustco Inc. 37,237 1,703,593 Franklin Electric Co. Inc. 30,545 1,700,746 CARBO Ceramics Inc. 46,914 1,696,410 Time Warner Telecom Inc. Class A/1/ 183,029 1,694,849 Viasat Inc./1/ 94,981 1,691,612 SPS Technologies Inc./1/ 37,558 1,690,110 Sola International Inc./1/ 105,582 1,689,312 General Communication Inc. Class A/1/ 202,560 1,685,299 Pre-Paid Legal Services Inc./1/ 71,811 1,681,814 Suffolk Bancorp 50,496 1,681,012 Intermagnetics General Corp./1/ 75,139 1,680,108 United Auto Group Inc./1/ 72,993 1,678,839 Keystone Property Trust 82,818 1,677,893 Stewart Enterprises Inc. Class A/1/ 441,410 1,677,358 Merit Medical Systems Inc./1/ 75,668 1,672,263 iDine Rewards Network Inc./1/ 102,889 1,671,946 Global Imaging Systems Inc./1/ 67,897 1,670,266 Retek Inc./1/ 247,330 1,669,478 54 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- webMethods Inc./1/ 209,031 $ 1,668,067 aQuantive, Inc./1/ 180,120 1,667,911 Universal Compression Holdings Inc./1/ 77,258 1,662,592 Kramont Realty Trust 97,688 1,655,812 PolyOne Corp. 421,039 1,654,683 Swift Energy Co./1/ 117,174 1,653,325 Corixa Corp./1/ 207,356 1,650,554 VistaCare Inc. Class A/1/ 52,697 1,649,416 Nautilus Group Inc. (The) 130,231 1,643,515 American States Water Co. 69,589 1,640,213 Watsco Inc. 85,758 1,638,835 Kos Pharmaceuticals Inc./1/ 47,586 1,636,958 Range Resources Corp./1/ 239,175 1,635,957 Rock-Tenn Co. Class A 112,174 1,635,497 CTI Molecular Imaging Inc./1/ 110,492 1,631,967 Community Trust Bancorp Inc. 56,117 1,631,882 NetFlix Inc./1/ 48,472 1,629,144 Paxar Corp./1/ 127,237 1,628,634 Koger Equity Inc. 86,548 1,627,102 Cell Therapeutics Inc./1/ 142,641 1,621,828 SOURCECORP Inc./1/ 69,666 1,619,735 Atlantic Coast Airlines Holdings Inc./1/ 189,920 1,616,219 IBERIABANK Corp. 30,666 1,613,645 Systems & Computer Technology Corp./1/ 154,488 1,611,310 Investors Real Estate Trust 164,232 1,611,116 Kyphon Inc./1/ 82,419 1,607,171 Central Pacific Financial Corp. 65,514 1,605,093 Genesco Inc./1/ 99,821 1,603,125 S1 Corp./1/ 317,357 1,602,653 Exelixis Inc./1/ 224,413 1,602,309 First Federal Capital Corp. 77,967 1,602,222 Genesis Microchip Inc./1/ 142,488 1,597,290 Roto-Rooter Inc. 44,924 1,597,048 Sterling Bancorp (New York) 59,316 1,596,194 K2 Inc./1/ 107,464 1,595,840 Opsware Inc./1/ 218,450 1,594,685 Triarc Companies Inc. Class B 153,166 1,592,926 PTEK Holdings Inc./1/ 195,406 1,592,559 Fidelity Bankshares Inc. 60,564 1,590,411 Infinity Property & Casualty Corp. 56,525 1,588,918 Silgan Holdings Inc./1/ 49,609 1,587,488 CoStar Group Inc./1/ 60,727 1,578,902 Mine Safety Appliances Co. 28,874 1,577,098 Duane Reade Inc./1/ 98,821 1,576,195 Immucor Inc./1/ 58,258 1,570,053 Salix Pharmaceuticals Ltd./1/ 81,469 1,569,093 Pegasus Solutions Inc./1/ 113,337 1,567,451 Golden Telecom Inc./1/ 57,317 1,567,047 Libbey Inc. 56,337 1,566,732 Bedford Property Investors Inc. 60,204 1,562,294 Trimeris Inc./1/ 62,063 1,562,126 Armor Holdings Inc./1/ 93,195 1,561,016 Burlington Coat Factory Warehouse Corp. 83,442 1,560,365 SciClone Pharmaceuticals Inc./1/ 197,477 1,560,068 First Essex Bancorp Inc. 30,644 1,559,473 Rollins Inc. 87,199 1,555,630 Cable Design Technologies Corp./1/ 194,364 1,554,912 Penwest Pharmaceuticals Co./1/ 72,254 1,553,461 Lone Star Technologies Inc./1/ 115,066 1,552,240 Wireless Facilities Inc./1/ 130,209 1,549,487 West Pharmaceutical Services Inc. 49,432 1,547,716 Applied Industrial Technologies Inc. 77,782 1,545,528 Cato Corp. Class A 76,578 1,544,578 First Community Bancshares Inc. 43,846 1,544,256 Echelon Corp./1/ 129,737 1,543,870 Epicor Software Corp./1/ 172,672 1,543,688 Town & Country Trust (The) 65,702 1,543,340 Gardner Denver Inc./1/ 73,395 1,542,029 Glatfelter Co. 130,736 1,540,070 StarTek Inc. 48,017 1,536,544 Main Street Banks Inc. 61,314 1,535,916 Capital City Bank Group Inc. 40,179 1,533,231 Vector Group Ltd. 106,473 1,533,211 SCHEDULES OF INVESTMENTS 55 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Mediacom Communications Corp./1/ 228,825 $ 1,533,128 Greif Inc. Class A 58,961 1,532,986 GameStop Corp./1/ 96,255 1,530,454 Fleetwood Enterprises Inc./1/ 164,543 1,525,314 Simmons First National Corp. Class A 64,736 1,525,180 TALX Corp. 61,921 1,524,495 Verso Technologies Inc./1/ 411,798 1,523,653 Champion Enterprises Inc./1/ 239,710 1,522,158 Manugistics Group Inc./1/ 276,977 1,517,834 Westell Technologies Inc. Class A/1/ 202,288 1,515,137 Applied Films Corporation/1/ 50,922 1,513,911 Primus Telecommunications Group Inc./1/ 224,242 1,513,634 Bombay Co. Inc. (The)/1/ 153,621 1,513,167 Incyte Corp./1/ 327,796 1,511,140 Steak n Shake Company (The)/1/ 101,239 1,508,461 Intrado Inc./1/ 66,108 1,505,940 NACCO Industries Inc. 21,058 1,505,647 ManTech International Corp. Class A/1/ 60,465 1,504,369 CDI Corp. 55,623 1,503,490 ESS Technology Inc./1/ 139,450 1,503,271 Glenborough Realty Trust Inc. 79,045 1,490,789 LaSalle Hotel Properties 85,662 1,484,522 Old Dominion Freight Line Inc./1/ 51,028 1,484,405 FIRSTFED AMERICA BANCORP INC 67,156 1,484,148 OraSure Technologies Inc./1/ 156,129 1,483,226 Standard Microsystems Corp./1/ 54,904 1,481,310 State Auto Financial Corp. 58,719 1,480,893 Global Industries Ltd./1/ 325,034 1,478,905 Oil States International Inc./1/ 116,501 1,478,398 Boca Resorts Inc. Class A/1/ 114,000 1,477,440 Datascope Corp. 48,033 1,476,534 Kimball International Inc. Class B 100,656 1,475,617 U.S. Restaurant Properties Inc. 90,733 1,474,411 Chesapeake Corp. 65,348 1,472,944 First Republic Bank 47,624 1,468,248 Prime Hospitality Corp./1/ 168,728 1,466,246 Cubist Pharmaceuticals Inc./1/ 135,650 1,463,663 Barnes Group Inc. 56,299 1,461,522 RadiSys Corp./1/ 80,992 1,461,096 Penn Virginia Corp. 33,055 1,461,031 Alexion Pharmaceuticals Inc./1/ 87,526 1,459,058 MTS Systems Corp. 95,855 1,458,913 Stratex Networks Inc./1/ 378,586 1,457,556 Nuevo Energy Co./1/ 80,211 1,457,434 Lone Star Steakhouse & Saloon Inc. 69,592 1,454,473 Hanger Orthopedic Group Inc./1/ 94,701 1,453,660 21st Century Insurance Group 105,383 1,452,178 Transmeta Corp./1/ 518,506 1,451,817 SRA International Inc. Class A/1/ 38,736 1,449,888 autobytel.com Inc./1/ 151,853 1,445,641 Advanced Energy Industries Inc./1/ 76,589 1,445,234 7-Eleven Inc./1/ 105,261 1,445,234 ArthroCare Corp./1/ 81,100 1,445,202 Fidelity National Information Solutions Inc./1/ 57,991 1,441,076 Oriental Financial Group Inc. 59,231 1,436,944 Washington Trust Bancorp Inc. 59,843 1,436,830 EDO Corp. 70,810 1,433,902 Tennant Co. 38,831 1,430,534 Silicon Image Inc./1/ 317,002 1,429,679 Crown American Realty Trust 120,140 1,429,666 Portfolio Recovery Associates Inc./1/ 56,206 1,428,757 Newpark Resources Inc./1/ 331,971 1,427,475 Presidential Life Corp. 94,347 1,427,470 URS Corp./1/ 73,101 1,418,159 ScanSoft Inc./1/ 338,346 1,417,670 Century Business Services Inc./1/ 334,243 1,417,190 Local Financial Corp./1/ 79,142 1,415,850 Finisar Corp./1/ 629,102 1,415,479 Hawthorne Financial Corp./1/ 35,169 1,412,387 Transkaryotic Therapies Inc./1/ 134,439 1,404,888 Myriad Genetics Inc./1/ 123,451 1,402,403 Arris Group Inc./1/ 243,190 1,398,342 56 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Equity Inns Inc. 185,525 $ 1,397,003 Immunomedics Inc./1/ 190,778 1,396,495 InterVoice-Brite Inc./1/ 155,793 1,392,789 Topps Co. (The) 142,673 1,391,062 CKE Restaurant Inc./1/ 215,299 1,388,679 Gaylord Entertainment Co./1/ 56,491 1,386,854 Russ Berrie & Co. Inc. 41,063 1,383,412 Independent Bank Corp. (Massachusetts) 53,844 1,378,945 Planar Systems Inc./1/ 64,251 1,378,184 Walter Industries Inc. 128,441 1,378,172 Praecis Pharmaceuticals Inc./1/ 205,322 1,377,711 Forward Air Corp./1/ 49,808 1,377,191 Pharmacopeia Inc./1/ 108,406 1,376,648 Valhi Inc. 122,220 1,376,197 Therasense Inc./1/ 110,181 1,376,161 Harris Interactive Inc./1/ 195,116 1,373,617 TALK America Holdings Inc./1/ 120,259 1,372,155 Lawson Software Inc./1/ 193,433 1,371,440 Jakks Pacific Inc./1/ 112,407 1,370,241 SpectraLink Corp./1/ 73,332 1,369,842 Serologicals Corp./1/ 104,119 1,369,165 United Community Financial Corp. 138,288 1,369,051 SonicWALL Inc./1/ 235,406 1,363,001 Isle of Capri Casinos Inc./1/ 68,800 1,362,928 West Coast Bancorp 69,600 1,359,288 National Western Life Insurance Co. Class A/1/ 9,894 1,359,040 SeaChange International Inc./1/ 108,425 1,358,565 Universal Health Realty Income Trust 50,026 1,358,206 Meristar Hospitality Corp. 191,775 1,357,767 Right Management Consultants Inc./1/ 75,070 1,357,266 Pixelworks Inc./1/ 157,407 1,356,848 O'Charley's Inc./1/ 91,227 1,352,896 Biosite Inc./1/ 47,666 1,352,761 Alaris Medical Systems Inc./1/ 81,283 1,349,298 Artisan Components Inc./1/ 80,241 1,348,851 Palm Harbor Homes Inc./1/ 78,651 1,347,292 Siliconix Inc./1/ 26,814 1,347,135 Integra Bank Corp. 70,037 1,345,411 Royal Gold Inc. 73,407 1,343,348 Marcus Corp. 88,023 1,343,231 MRV Communications Inc./1/ 477,459 1,341,660 AMN Healthcare Services Inc./1/ 82,567 1,340,888 Mesa Air Group Inc./1/ 120,712 1,339,903 Robert Mondavi Corp. (The) Class A/1/ 43,171 1,337,438 Centex Construction Products Inc. 29,859 1,333,802 Coinstar Inc./1/ 99,163 1,333,742 Valmont Industries Inc. 67,277 1,331,412 Brookfield Homes Corp. 71,781 1,330,102 U.S.I. Holdings Corp./1/ 102,025 1,327,345 Isis Pharmaceuticals Inc./1/ 203,320 1,325,646 Berry Petroleum Co. Class A 72,503 1,325,355 Saul Centers Inc. 49,907 1,325,031 American West Holdings Corp. Class B/1/ 135,972 1,323,008 Able Laboratories Inc./1/ 69,965 1,321,639 Haverty Furniture Companies Inc. 72,212 1,320,035 California Pizza Kitchen Inc./1/ 75,801 1,318,937 Genesee & Wyoming Inc. Class A/1/ 55,617 1,318,679 FreeMarkets Inc./1/ 169,451 1,318,498 Old Second Bancorp Inc. 30,648 1,317,864 Alderwoods Group Inc./1/ 169,908 1,316,787 FBL Financial Group Inc. Class A 53,391 1,315,554 ICU Medical Inc./1/ 48,253 1,312,964 ActivCard Corp./1/ 160,046 1,312,377 Arctic Cat Inc. 67,875 1,312,024 Gentiva Health Services Inc./1/ 114,086 1,311,989 Inverness Medical Innovations Inc./1/ 51,569 1,309,853 DIMON Inc. 189,572 1,308,047 Peoples Bancorp Inc. 48,819 1,306,396 SonoSite Inc./1/ 65,090 1,302,451 Tyler Technologies Inc./1/ 183,789 1,301,226 SCHEDULES OF INVESTMENTS 57 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Anaren Inc./1/ 101,832 $ 1,299,376 Kaman Corp. Class A 100,163 1,298,112 Savient Pharmaceuticals Inc./1/ 256,687 1,296,269 GBC Bancorp 33,799 1,296,192 Consolidated Graphics Inc./1/ 50,878 1,293,828 Landauer Inc. 36,483 1,292,593 GenCorp. Inc. 144,139 1,290,044 Urstadt Biddle Properties Inc. Class A 95,432 1,288,332 AC Moore Arts & Crafts Inc./1/ 57,806 1,287,918 ChipPAC Inc. Class A/1/ 218,244 1,285,457 Avanex Corp./1/ 264,538 1,283,009 Ciphergen Biosystems Inc./1/ 103,777 1,281,646 Papa John's International Inc./1/ 51,498 1,277,665 Deltic Timber Corp. 44,104 1,275,488 Encysive Pharmaceuticals Inc./1/ 202,099 1,275,245 Oplink Communications Inc./1/ 504,028 1,275,191 Hydril Co./1/ 62,929 1,274,942 Packeteer Inc./1/ 105,679 1,273,432 Sapient Corp./1/ 354,045 1,271,022 E.piphany Inc./1/ 254,538 1,270,145 WCI Communities Inc./1/ 76,941 1,269,527 SWS Group Inc. 64,264 1,266,643 Stillwater Mining Co./1/ 200,748 1,264,712 SupportSoft Inc./1/ 112,932 1,263,709 Integrated Silicon Solution Inc./1/ 126,856 1,262,217 Heidrick & Struggles International Inc./1/ 74,553 1,262,182 West Bancorporation 73,362 1,261,826 Aksys Ltd./1/ 125,749 1,256,233 TTM Technologies Inc./1/ 87,855 1,254,569 Verity Inc./1/ 95,908 1,253,518 Quicksilver Resources Inc./1/ 51,230 1,251,549 Interwoven Inc./1/ 471,190 1,248,653 Bally Total Fitness Holding Corp./1/ 144,126 1,246,690 Prosperity Bancshares Inc. 58,501 1,246,656 Zoll Medical Corp./1/ 38,804 1,243,668 Ramco-Gershenson Properties Trust 48,840 1,242,978 Cross Country Healthcare Inc./1/ 88,181 1,242,470 RehabCare Group Inc./1/ 72,797 1,241,189 Concur Technologies Inc./1/ 104,632 1,240,936 DuPont Photomasks Inc./1/ 54,581 1,239,535 Thomas Industries Inc. 43,450 1,239,194 Wild Oats Markets Inc./1/ 113,160 1,236,839 Schnitzer Steel Industries Inc. Class A 41,180 1,236,635 Comtech Telecommunications Corp./1/ 51,674 1,235,525 Hologic Inc./1/ 90,549 1,234,183 Spanish Broadcasting System Inc. Class A/1/ 144,759 1,230,452 ValueVision Media Inc. Class A/1/ 77,333 1,230,368 Community Banks Inc. 37,138 1,229,268 Interpore International/1/ 80,005 1,228,877 New England Business Service Inc. 46,162 1,228,832 PMA Capital Corp. Class A 97,978 1,227,664 Exult Inc./1/ 152,595 1,226,864 Omega Financial Corp. 37,136 1,225,488 Friedman's Inc. 87,812 1,224,977 Ameristar Casinos Inc./1/ 48,901 1,224,481 Vail Resorts Inc./1/ 85,441 1,221,806 CB Bancshares Inc. 19,815 1,213,689 Standex International Corp. 49,908 1,212,764 Tanger Factory Outlet Centers Inc. 32,857 1,207,495 World Fuel Services Corp. 42,993 1,206,814 General Cable Corp./1/ 151,552 1,206,354 United Fire & Casualty Co. 32,901 1,202,861 Tenneco Automotive Inc./1/ 191,128 1,202,195 Saga Communications Inc./1/ 62,089 1,201,422 Argonaut Group Inc. 92,355 1,200,615 Central Vermont Public Service Corp. 54,069 1,199,250 Korn/Ferry International/1/ 145,170 1,197,652 MRO Software Inc./1/ 87,663 1,196,600 Dress Barn Inc./1/ 87,067 1,192,818 Hibbet Sporting Goods Inc./1/ 49,850 1,192,412 Capitol Bancorp Ltd. 44,437 1,188,690 City Bank 36,649 1,187,794 58 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Neoware Systems Inc./1/ 69,538 $ 1,187,014 Allegiant Bancorp Inc. 58,762 1,186,992 Bel Fuse Inc. Class B 44,841 1,184,699 Concord Camera Corp./1/ 111,181 1,184,078 Lithia Motors Inc. Class A 59,191 1,182,044 Zygo Corp./1/ 71,982 1,180,505 Correctional Properties Trust 47,280 1,179,636 Aspect Communications Corp./1/ 141,144 1,175,730 RC2 Corp./1/ 61,148 1,174,653 Netegrity Inc./1/ 117,290 1,174,073 Discovery Laboratories Inc./1/ 162,736 1,171,699 Lightbridge Inc./1/ 124,213 1,171,329 4Kids Entertainment Inc./1/ 55,369 1,168,286 AAR Corp./1/ 145,470 1,166,669 Mobile Mini Inc./1/ 60,473 1,166,524 North Pittsburgh Systems Inc. 68,703 1,163,142 RailAmerica Inc./1/ 135,077 1,161,662 Altiris Inc./1/ 44,200 1,161,576 Peoples Holding Co. 25,454 1,159,175 Mattson Technology Inc./1/ 127,939 1,159,127 Information Holdings Inc./1/ 57,695 1,155,631 Tower Automotive Inc./1/ 256,775 1,155,488 New Focus Inc./1/ 257,271 1,155,147 Plains Resource Inc./1/ 91,859 1,143,645 MBT Financial Corp. 72,989 1,138,628 Keystone Automotive Industries Inc./1/ 52,429 1,137,709 Bank of Granite Corp. 60,474 1,133,888 Oakley Inc./1/ 113,351 1,133,510 WSFS Financial Corp. 26,842 1,132,732 Ixia/1/ 104,530 1,130,910 Republic Bancshares Inc. 39,491 1,127,863 KVH Industries Inc./1/ 44,688 1,126,584 Agilysys Inc. 128,255 1,124,796 Lance Inc. 113,117 1,124,383 Riggs National Corp. 71,356 1,123,857 Young Broadcasting Inc. Class A/1/ 57,349 1,123,467 Veritas DGC Inc./1/ 140,651 1,122,395 Zenith National Insurance Corp. 40,302 1,121,202 Holly Corp. 45,164 1,119,164 American Woodmark Corp. 25,000 1,119,000 InterCept Inc./1/ 81,654 1,116,210 Possis Medical Inc./1/ 71,530 1,115,868 Drugstore.com Inc./1/ 145,382 1,112,172 Rofin-Sinar Technologies Inc./1/ 52,853 1,109,384 1st Source Corp. 57,984 1,108,074 Peregrine Pharmaceuticals Inc./1/ 515,344 1,107,990 Buckeye Technologies Inc./1/ 121,793 1,107,098 Robbins & Myers Inc. 49,721 1,105,795 American Physicians Capital Inc./1/ 39,729 1,103,672 Homestore.com Inc./1/ 398,003 1,102,468 Antigenics Inc./1/ 90,127 1,099,549 LookSmart Ltd./1/ 349,172 1,096,400 TiVo Inc./1/ 147,900 1,095,939 Molecular Devices Corp./1/ 62,908 1,095,857 NUI Corp. 73,281 1,095,551 Wellman Inc. 145,817 1,095,086 Artesyn Technologies Inc./1/ 144,239 1,093,332 Pulitzer Inc. 20,957 1,091,860 Brookstone Inc./1/ 55,058 1,091,800 aaiPharma Inc./1/ 63,794 1,091,515 Roxio Inc./1/ 125,825 1,090,903 SuperGen Inc./1/ 145,154 1,090,107 MemberWorks Inc./1/ 34,211 1,088,594 Symmetricom Inc./1/ 171,744 1,087,140 Lindsay Manufacturing Co. 54,015 1,085,702 Entrust Inc./1/ 221,099 1,085,596 Pope & Talbot Inc. 71,779 1,085,298 Midwest Banc Holdings Inc. 48,808 1,085,002 Lionbridge Technologies Inc./1/ 144,274 1,083,498 AMCOL International Corp. 87,632 1,083,132 Camden National Corp. 36,672 1,082,191 Farmer Brothers Co. 3,377 1,081,687 CIRCOR International Inc. 56,286 1,080,691 Interface Inc. Class A/1/ 199,298 1,080,195 Synovis Life Technologies Inc./1/ 44,084 1,077,854 Stratasys Inc./1/ 25,269 1,076,965 Concurrent Computer Corp./1/ 283,853 1,075,803 Columbia Banking System Inc. 61,166 1,075,298 Omnicell Inc./1/ 66,191 1,074,942 SCHEDULES OF INVESTMENTS 59 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Energy Partners Ltd./1/ 96,353 $ 1,071,445 Computer Network Technology Corp./1/ 123,241 1,069,732 eCollege.com Inc./1/ 53,073 1,068,890 CompuCredit Corp./1/ 61,065 1,068,637 American Medical Security Group Inc./1/ 52,577 1,067,839 Gabelli Asset Management Inc. Class A/1/ 29,936 1,067,518 Innkeepers USA Trust 122,470 1,065,489 Trex Co. Inc./1/ 34,297 1,064,922 KCS Energy Inc./1/ 156,457 1,063,908 Cleveland-Cliffs Inc./1/ 41,538 1,063,373 Fisher Communications Inc./1/ 22,539 1,062,714 Xicor Inc./1/ 114,266 1,061,531 Maxygen Inc./1/ 103,809 1,058,852 Noven Pharmaceuticals Inc./1/ 92,707 1,056,860 Tejon Ranch Co./1/ 31,734 1,056,742 CorVel Corp./1/ 29,725 1,056,724 Union Bankshares Corp. 34,776 1,056,147 Apogee Enterprises Inc. 102,126 1,053,940 Troy Financial Corp. 30,058 1,052,331 Caraustar Industries Inc./1/ 120,013 1,047,713 Hancock Fabrics Inc. 66,357 1,047,113 Interchange Financial Services Corp. 50,988 1,046,784 X-Rite Inc. 92,416 1,046,149 West Marine Inc./1/ 54,807 1,044,073 Conceptus Inc./1/ 79,622 1,043,048 Kadant Inc./1/ 54,424 1,042,764 Excel Technology Inc./1/ 41,696 1,042,400 First Busey Corp. Class A 40,333 1,040,591 Churchill Downs Inc. 27,366 1,039,361 Ditech Communications Corp./1/ 118,202 1,037,814 Daktronics Inc./1/ 64,760 1,036,808 Presstek Inc./1/ 139,904 1,032,352 Great Lakes REIT Inc. 64,771 1,031,154 Cascade Corp. 46,751 1,030,860 Prima Energy Corp./1/ 40,806 1,030,352 Rudolph Technologies Inc./1/ 53,302 1,029,262 PrivateBancorp Inc. 31,035 1,027,569 Red Robin Gourmet Burgers/1/ 40,317 1,026,471 Wet Seal Inc. Class A/1/ 102,114 1,026,246 Charles River Associates Inc./1/ 35,960 1,025,939 BSB Bancorp Inc. 36,929 1,023,303 PRG-Schultz International Inc./1/ 180,050 1,022,684 infoUSA Inc./1/ 136,051 1,021,743 Central Parking Corp. 83,229 1,019,555 OSI Systems Inc./1/ 58,911 1,019,160 Bradley Pharmaceuticals Inc./1/ 37,373 1,018,414 Casual Male Retail Group Inc./1/ 137,794 1,018,298 Second Bancorp Inc. 37,145 1,012,201 Great Southern Bancorp Inc. 25,942 1,009,663 TeleTech Holdings Inc./1/ 158,995 1,009,618 White Electronic Designs Corp./1/ 93,630 1,006,523 Ameron International Corp. 30,451 1,005,188 Ennis Business Forms Inc. 74,767 1,002,625 Sturm Ruger & Co. Inc. 96,995 1,000,988 II-VI Inc./1/ 50,062 1,000,739 Integrated Electrical Services Inc./1/ 144,895 999,775 First State Bancorp 33,752 999,397 Epix Medical Inc./1/ 58,665 998,478 USB Holding Co. Inc. 56,882 998,270 Advanta Corp. Class B 92,552 995,860 Rainbow Technologies Inc./1/ 108,899 995,337 Tollgrade Communications Inc./1/ 61,903 994,781 Cascade Natural Gas Corp. 50,725 994,210 Arrow Financial Corp. 38,239 994,208 Sharper Image Corp./1/ 43,097 993,817 Citizens Inc./1/ 123,180 991,599 BioLase Technology Inc./1/ 86,772 990,069 Harvest Natural Resources Inc./1/ 160,613 987,770 Connecticut Water Service Inc. 36,590 987,564 CuraGen Corp./1/ 196,125 986,509 Biopure Corp./1/ 152,431 986,229 Virginia Financial Group Inc. 32,796 986,176 EPIQ Systems Inc./1/ 58,141 986,071 PennRock Financial Services Corp. 34,861 983,080 First Indiana Corp. 53,128 982,868 Cardiac Science Inc./1/ 236,084 982,109 60 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Cascade Bancorp 57,770 $ 982,090 Bank of the Ozarks Inc. 22,063 982,024 Ceradyne Inc./1/ 37,899 980,447 Southern Financial Bancorp Inc. 24,888 980,089 Children's Place Retail Stores Inc. (The)/1/ 57,060 978,579 J&J Snack Foods Corp./1/ 28,093 977,636 deCODE genetics Inc./1/ 207,236 976,082 Playboy Enterprises Inc. Class B/1/ 67,024 975,199 FalconStor Software Inc./1/ 155,577 973,912 Concord Communications Inc./1/ 74,359 973,359 McGrath Rentcorp 34,782 972,157 St. Francis Capital Corp. 33,014 971,932 USANA Health Sciences Inc./1/ 20,138 971,659 CCBT Financial Companies Inc. 38,689 971,094 Regent Communications Inc./1/ 159,060 970,266 MatrixOne Inc./1/ 196,781 970,130 UniFirst Corp. 41,015 969,595 Superconductor Technologies Inc./1/ 246,610 969,177 Stamps.com Inc./1/ 166,224 967,424 Regeneration Technologies Inc./1/ 106,830 966,812 Federal Agricultural Mortgage Corp./1/ 35,794 966,438 DOV Pharmaceutical Inc./1/ 53,794 965,602 First Place Financial Corp. 54,331 964,375 Audiovox Corp. Class A/1/ 76,210 962,532 Gibraltar Steel Corp. 43,598 960,900 SCS Transportation Inc./1/ 63,541 959,469 William Lyon Homes Inc./1/ 19,121 958,918 PC-Tel Inc./1/ 89,838 958,571 Ariad Pharmaceuticals Inc./1/ 158,502 954,182 Accredited Home Lenders Holding Co./1/ 43,938 953,894 Centillium Communications Inc./1/ 134,784 952,923 Alexander's Inc./1/ 9,028 952,454 Universal American Financial Corp./1/ 107,594 952,207 Peapack-Gladstone Financial Corp. 30,622 951,419 Bentley Pharmaceuticals Inc./1/ 58,546 951,372 Electro Rent Corp./1/ 75,999 950,747 First Bancorp (North Carolina) 33,937 950,575 CCC Information Services Group Inc./1/ 56,659 949,605 Clark Inc./1/ 71,172 949,434 Pericom Semiconductor Corp./1/ 94,886 948,860 FindWhat.com/1/ 54,908 948,810 TriZetto Group Inc. (The)/1/ 141,446 947,688 Peet's Coffee & Tea Inc./1/ 48,472 947,628 C-COR.net Corp./1/ 143,428 946,625 i-STAT Corp./1/ 70,762 946,088 Network Equipment Technologies Inc./1/ 103,361 945,753 SPSS Inc./1/ 56,005 944,804 Banner Corp. 45,599 943,899 Parker Drilling Co./1/ 395,003 932,207 First National Corp. 35,175 932,137 Grace (W.R.) & Co./1/ 299,901 929,693 Cornell Companies Inc./1/ 56,488 929,228 OshKosh B'Gosh Inc. Class A 36,101 928,518 Quaker City Bancorp Inc. 23,176 927,040 Northwest Bancorp Inc. 50,380 925,481 Joseph A. Bank Clothiers Inc./1/ 21,046 925,393 Sonic Solutions Inc./1/ 66,410 925,091 AsiaInfo Holdings Inc./1/ 137,038 923,636 La Jolla Pharmaceutical Co./1/ 233,438 922,080 World Acceptance Corp./1/ 67,991 921,278 Asbury Automotive Group Inc./1/ 55,273 920,295 Indevus Pharmaceuticals Inc./1/ 171,831 919,296 ITLA Capital Corp./1/ 21,536 917,649 LSI Industries Inc. 65,085 917,048 RTI International Metals Inc./1/ 87,061 915,882 CT Communications Inc. 80,864 913,763 Palatin Technologies Inc./1/ 190,019 912,091 American Home Mortgage Holdings Inc. 51,845 910,917 Maxwell Shoe Co. Inc. Class A/1/ 63,366 909,936 Forrester Research Inc./1/ 63,436 909,038 EnPro Industries Inc./1/ 94,109 908,152 Seacoast Banking Corp. of Florida 52,190 908,106 SCHEDULES OF INVESTMENTS 61 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Flushing Financial Corp. 43,403 $ 904,519 Jill (J.) Group Inc. (The)/1/ 78,637 904,325 Silicon Graphics Inc./1/ 941,535 903,874 SY Bancorp Inc. 48,168 903,150 Sound Federal Bancorp Inc. 60,319 902,975 MedQuist Inc./1/ 46,620 902,563 Exact Sciences Corp./1/ 66,774 901,449 Watts Industries Inc. Class A 51,140 901,087 VitalWorks Inc./1/ 171,509 900,422 Vans Inc./1/ 82,534 899,621 MTR Gaming Group Inc./1/ 103,629 898,463 Unifi Inc./1/ 186,667 896,002 Chattem Inc./1/ 64,494 895,177 Elizabeth Arden Inc./1/ 54,298 894,831 Standard Register Co. (The) 53,831 893,595 Sipex Corp./1/ 113,782 893,189 Farmers Capital Bank Corp. 27,469 892,193 NeoPharm Inc./1/ 59,427 891,405 TRC Companies Inc./1/ 54,104 890,552 Skyline Corp. 27,800 890,156 Big 5 Sporting Goods Corp./1/ 58,197 889,250 Euronet Worldwide Inc./1/ 73,049 888,276 Myers Industries Inc. 88,596 886,846 Lexicon Genetics Inc./1/ 171,785 886,411 AK Steel Holding Corp./1/ 442,478 884,956 Calgon Carbon Corp. 157,124 884,608 Humboldt Bancorp 56,228 882,217 Macatawa Bank Corp. 38,064 881,562 Alloy Inc./1/ 157,415 881,524 Lakeland Bancorp Inc. 55,078 878,495 MasTec Inc./1/ 90,446 877,326 Middlesex Water Co. 35,778 876,919 TriPath Imaging Inc./1/ 100,651 875,664 Courier Corp. 17,158 873,514 BancFirst Corp. 16,480 873,440 Steven Madden Ltd./1/ 46,033 873,246 GulfMark Offshore Inc./1/ 62,151 873,222 Monolithic System Technology Inc./1/ 103,677 871,924 Herley Industries Inc./1/ 49,695 870,656 Curative Health Services Inc./1/ 48,640 869,197 Atwood Oceanics Inc./1/ 36,204 868,534 Winston Hotels Inc. 95,118 865,574 Encore Acquisition Co./1/ 40,153 865,297 Pilgrim's Pride Corp. Class B 69,217 865,213 Central European Distribution Corp./1/ 31,604 864,369 Pathmark Stores Inc./1/ 123,814 862,984 Intertan Inc./1/ 94,155 861,518 Shore Bancshares Inc. 24,784 857,279 Mercantile Bank Corp. 25,795 856,394 Stoneridge Inc./1/ 58,211 856,284 Hollis-Eden Pharmaceuticals/1/ 35,146 856,157 Petroleum Development Corp./1/ 71,311 854,306 Mission West Properties Inc. 69,097 854,039 Staar Surgical Co./1/ 80,421 853,267 Midas Inc./1/ 64,666 851,005 Monro Muffler Brake Inc./1/ 28,641 847,774 Zymogenetics Inc./1/ 57,706 845,393 D&E Communications Inc. 59,278 840,562 Quaker Chemical Corp. 36,099 839,663 Hanmi Financial Corp. 42,109 839,653 Vicor Corp./1/ 88,017 838,802 Keynote Systems Inc./1/ 71,827 836,785 SJW Corp. 9,891 835,790 Ethyl Corp./1/ 66,373 834,972 Standard Commercial Corp. 45,329 834,054 Kensey Nash Corp./1/ 35,502 833,587 Berkshire Hills Bancorp Inc. 24,686 831,671 Proxim Corp. Class A/1/ 557,354 830,457 Innovex Inc./1/ 83,461 830,437 Financial Institutions Inc. 37,972 829,688 Quidel Corp./1/ 123,459 828,410 Renaissance Learning Inc./1/ 35,066 827,558 Immunogen Inc./1/ 185,936 827,415 Coca-Cola Bottling Co. Consolidated 16,458 825,369 Goody's Family Clothing Inc. 83,651 824,799 EMS Technologies Inc./1/ 48,552 824,413 InFocus Corp./1/ 169,392 823,245 Ocwen Financial Corp./1/ 180,064 819,291 Southwest Bancorp Inc. 48,567 818,354 62 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- HEICO Corp. 60,147 $ 817,999 Navigant International Inc./1/ 58,106 814,065 Willow Grove Bancorp Inc. 50,519 812,851 Citizens First Bancorp Inc. 39,191 811,254 D&K Healthcare Resources Inc. 57,582 809,603 Gevity HR Inc. 54,958 806,783 Orthologic Corp./1/ 149,948 806,720 Energy Conversion Devices Inc./1/ 76,705 806,170 Resource America Inc. Class A 67,791 805,357 Baldwin & Lyons Inc. Class B 34,446 804,314 Integral Systems Inc./1/ 44,499 804,097 Playtex Products Inc./1/ 134,826 803,563 Administaff Inc./1/ 90,357 803,274 Lydall Inc./1/ 66,853 802,905 Pumatech Inc./1/ 168,385 801,513 Synaptics Inc./1/ 74,276 799,210 WatchGuard Technologies Inc./1/ 149,340 798,969 Octel Corp. 45,843 797,668 Applied Signal Technology Inc. 39,942 796,843 Heartland Financial USA Inc. 28,660 796,748 Lakeland Financial Corp. 23,498 793,527 Horizon Financial Corp. 49,073 792,038 Yardville National Bancorp 37,776 791,407 MSC.Software Corp./1/ 109,828 790,762 Input/Output Inc./1/ 202,231 790,723 Wayne Bancorp Inc. 27,696 789,336 MAPICS Inc./1/ 80,374 789,273 Firstbank Corp. 24,894 789,140 Nash Finch Co. 50,847 788,129 LabOne Inc./1/ 33,697 786,151 Keithley Instruments Inc. 55,509 785,452 Bei Technologies Inc. 50,305 784,758 Kirkland's Inc./1/ 48,872 783,418 Gladstone Capital Corp. 40,200 781,890 PDI Inc./1/ 31,887 781,869 Vital Sign Inc. 26,635 780,406 Ryerson Tull Inc. 99,438 775,616 Theragenics Corp./1/ 135,855 774,374 Riviana Foods Inc. 27,231 773,360 Vital Images Inc./1/ 41,275 772,668 Salem Communications Corp. Class A/1/ 39,807 771,858 Valence Technology Inc./1/ 225,028 767,345 Aether Systems Inc./1/ 167,715 766,458 AmericanWest Bancorporation/1/ 41,759 765,860 Avatar Holdings/1/ 23,919 764,930 Inet Technologies Inc./1/ 59,093 764,663 MIM Corp./1/ 101,776 763,320 Acadia Realty Trust 69,399 762,001 Angelica Corp. 40,102 761,938 Kansas City Life Insurance Co. 16,602 760,372 Gorman-Rupp Co. (The) 33,592 759,515 United Security Bancshares Inc. 29,689 753,210 Sanderson Farms Inc. 23,921 752,555 Closure Medical Corp./1/ 30,797 751,139 Magna Entertainment Corp. Class A/1/ 180,247 749,828 LodgeNet Entertainment Corp./1/ 48,081 745,256 Coachmen Industries Inc. 63,637 745,189 NBC Capital Corp. 30,673 743,514 United Industrial Corp. 46,737 743,118 Consolidated-Tomoka Land Co. 25,527 740,538 Aftermarket Technology Corp./1/ 64,809 739,471 E-LOAN Inc./1/ 203,596 739,053 Raven Industries Inc. 29,978 738,958 PDF Solutions Inc./1/ 65,655 738,619 Movado Group Inc. 33,690 737,811 Repligen Corp./1/ 136,665 736,624 Group 1 Software Inc./1/ 40,945 735,782 National Presto Industries Inc. 21,410 735,219 SoundView Technology Group Inc./1/ 74,685 734,900 Capital Corporation of the West/1/ 22,785 734,361 IXYS Corp./1/ 78,352 734,158 Apex Mortgage Capital Inc. 136,439 734,042 Building Materials Holdings Corp. 55,870 731,897 Integrated Defense Technologies Inc./1/ 43,542 730,635 First Oak Brook Bancshares Class A 29,313 729,894 SCHEDULES OF INVESTMENTS 63 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- SFBC International Inc./1/ 25,663 $ 729,650 Matria Healthcare Inc./1/ 42,177 727,975 Supertex Inc./1/ 40,505 726,660 Boston Communications Group Inc./1/ 72,799 725,879 Sykes Enterprises Inc./1/ 109,635 725,784 JNI Corp./1/ 104,366 725,344 Penn Engineering & Manufacturing Corp. 47,026 724,671 FNB Corp. (Virginia) 26,633 723,885 Casella Waste Systems Inc. Class A/1/ 58,263 723,626 Universal Display Corp./1/ 69,438 721,461 OceanFirst Financial Corp. 28,818 721,315 LSB Bancshares Inc. 39,194 721,170 SBS Technologies Inc./1/ 66,457 721,058 Quixote Corp. 28,644 720,397 Wackenhut Corrections Corp./1/ 42,196 719,442 CNA Surety Corp./1/ 71,562 719,198 Universal Electronics Inc./1/ 62,354 717,071 Department 56 Inc./1/ 56,236 714,197 German American Bancorp 40,548 712,023 Net2Phone Inc./1/ 112,623 710,651 CNB Financial Corp. 16,809 710,180 Southwest Water Co. 50,463 710,014 Option Care Inc./1/ 59,025 708,890 Dobson Communications Corp. Class A/1/ 87,175 707,861 GSI Commerce Inc./1/ 70,911 707,692 Healthcare Services Group Inc. 42,881 707,536 LTC Properties Inc. 60,859 704,747 MainSource Financial Group Inc. 27,065 701,254 Astec Industries Inc./1/ 68,000 700,400 Strattec Security Corp./1/ 14,685 699,887 ABC Bancorp 44,834 699,859 Learning Tree International Inc./1/ 41,635 698,219 Tweeter Home Entertainment Group Inc./1/ 90,857 697,782 Sequa Corp. Class A/1/ 16,280 696,947 Laserscope/1/ 59,262 696,329 Sigma Designs Inc./1/ 81,001 695,799 Midland Co. (The) 32,641 695,253 TriCo Bancshares 24,218 692,635 Lifeline Systems Inc./1/ 21,890 690,411 Meridian Resource Corp. (The)/1/ 160,159 690,285 Pinnacle Entertainment Inc./1/ 98,575 690,025 Diversa Corp./1/ 88,935 689,246 C&F Financial Corp. 15,227 688,397 Nara Bancorp Inc. 40,101 686,930 Stanley Furniture Co. Inc. 22,507 686,689 CardioDynamics International Corp./1/ 152,691 685,583 Aaon Inc./1/ 41,681 684,402 National Bankshares Inc. 15,969 683,154 Horizon Organic Holding Corp./1/ 28,502 682,338 Bryn Mawr Bank Corp. 16,190 681,599 Provident Bancorp Inc. 16,214 681,312 Advanced Marketing Services Inc. 66,506 679,691 Register.com/1/ 150,677 679,553 National Processing Inc./1/ 35,128 678,673 Hickory Tech Corp. 59,260 678,527 Kenneth Cole Productions Class A 25,984 678,442 Cole National Corp./1/ 54,413 677,986 Avant Immunotherapeutics Inc./1/ 281,152 677,576 CPI Corp. 36,824 677,562 Woodhead Industries Inc. 44,915 675,971 Columbia Bancorp 25,179 674,797 SS&C Technologies Inc. 33,732 674,303 Gerber Scientific Inc./1/ 94,886 673,691 Paxson Communications Corp./1/ 135,674 672,943 Darling International Inc./1/ 253,802 672,575 Credit Acceptance Corp./1/ 59,241 672,385 Gene Logic Inc./1/ 142,395 669,256 Safety Insurance Group Inc. 43,073 668,493 Syntel Inc. 29,260 667,421 NYFIX Inc./1/ 118,964 666,198 Coastal Financial Corp. 47,329 662,134 Dura Automotive Systems Inc./1/ 69,445 661,116 U.S. Physical Therapy Inc./1/ 54,014 660,645 Cepheid Inc./1/ 141,252 659,647 64 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Partners Trust Financial Group Inc. 30,008 $ 658,676 Exchange National Bancshares Inc. 18,996 658,211 Fargo Electronics/1/ 52,215 657,909 Buckle Inc. (The)/1/ 34,079 656,362 Boykin Lodging Co. 79,558 655,558 Summit Bancshares Inc. 23,801 654,528 Sauer-Danfoss Inc. 46,143 650,616 Sun Bancorp Inc. (New Jersey)/1/ 29,550 650,100 Southside Bancshares Inc. 40,089 647,836 Hudson Highland Group Inc./1/ 33,661 647,638 Infonet Services Corp. Class B/1/ 309,835 644,457 Kosan Biosciences Inc./1/ 80,955 644,402 Guilford Pharmaceuticals Inc./1/ 104,098 644,367 EnergySouth Inc. 19,957 644,212 Matrix Service Co./1/ 36,272 644,191 FloridaFirst Bancorp Inc. 24,456 643,437 Luminex Corp./1/ 95,297 643,255 Hypercom Corp./1/ 119,291 642,978 1-800-FLOWERS.COM Inc./1/ 85,410 642,283 Warwick Valley Telephone Co. 8,185 638,348 SM&A/1/ 55,297 637,574 Progenics Pharmaceuticals Inc./1/ 36,919 635,745 Greene County Bancshares Inc. 26,643 635,436 Overland Storage Inc./1/ 42,978 633,926 Western Sierra Bancorp/1/ 17,704 632,918 Lufkin Industries Inc. 26,316 631,584 Vastera Inc./1/ 122,781 631,094 Blair Corp. 30,341 631,093 Embarcadero Technologies Inc./1/ 62,740 629,910 SBA Communications Corp./1/ 196,785 629,712 NN Inc. 48,938 629,343 NIC Inc./1/ 133,524 628,898 Encore Wire Corp./1/ 47,624 628,637 Aspen Technology Inc./1/ 161,078 628,204 Penn-America Group Inc. 41,921 627,977 Central Coast Bancorp/1/ 37,172 627,835 Skechers U.S.A. Inc. Class A/1/ 84,491 626,923 Wilsons The Leather Experts Inc./1/ 78,451 626,823 Yadkin Valley Bank & Trust Co. 35,558 625,821 First United Corp. 27,660 623,733 Massbank Corp. 16,960 623,619 Digimarc Corp./1/ 42,361 623,130 Bassett Furniture Industries Inc. 45,793 620,495 Brush Engineered Materials Inc./1/ 60,514 620,268 OPNET Technologies Inc./1/ 49,677 619,969 Stellent Inc./1/ 79,781 619,101 Republic Bancorp Inc. Class A 32,567 619,099 Genencor International Inc./1/ 39,238 615,644 Eastern Virginia Bankshares 22,021 615,487 CFS Bancorp Inc. 44,112 614,039 State Bancorp Inc. 30,785 613,237 Navigators Group Inc./1/ 18,737 612,887 Arena Pharmaceuticals Inc./1/ 85,103 612,742 Pain Therapeutics Inc./1/ 99,582 612,429 Covenant Transport Inc. Class A/1/ 33,235 611,524 Datastream Systems Inc./1/ 78,616 609,274 Century Aluminum Co./1/ 55,991 607,502 American Mortgage Acceptance Corp. 36,654 606,257 HealthExtras Inc./1/ 70,409 606,221 Quality Systems Inc./1/ 15,079 606,176 MTC Technologies Inc./1/ 26,100 605,520 Tellium Inc./1/ 440,677 603,727 VIVUS Inc./1/ 172,260 602,910 Resource Bankshares Corp. 20,687 602,819 Verint Systems Inc./1/ 28,167 602,774 Hexcel Corp./1/ 102,156 602,720 CoBiz Inc. 37,554 601,991 Penns Woods Bancorp Inc. 13,769 601,981 Klamath First Bancorp Inc. 27,756 600,917 Citizens South Banking Corp. 40,516 599,232 Raindance Communications Inc./1/ 217,008 598,942 First Horizon Pharmaceutical Corp./1/ 93,375 597,600 Volt Information Sciences Inc./1/ 36,193 597,185 Overstock.com Inc./1/ 40,101 597,184 Young Innovations Inc. 18,625 596,186 SCHEDULES OF INVESTMENTS 65 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Lawson Products Inc. 22,132 $ 594,244 Cherokee Inc./1/ 27,960 592,752 Footstar Inc./1/ 87,663 592,602 ParthusCeva Inc./1/ 68,971 592,461 Neose Technologies Inc./1/ 63,288 591,743 Semitool Inc./1/ 74,249 591,022 TradeStation Group Inc./1/ 79,058 590,721 IBT Bancorp Inc. 11,829 590,385 Bioreliance Corp./1/ 22,998 587,829 Global Power Equipment Group Inc./1/ 111,490 587,552 First of Long Island Corp. 15,535 587,068 Coastal Bancorp Inc. 18,455 585,946 Del Laboratories Inc./1/ 20,641 583,108 CRIIMI MAE Inc./1/ 56,176 583,107 PEC Solutions Inc./1/ 39,407 581,647 Seattle Genetics Inc./1/ 95,792 581,457 Camco Financial Corp. 34,188 581,196 Chicago Pizza & Brewery Inc./1/ 49,463 581,190 Chesapeake Utilities Corp. 25,336 580,701 Osteotech Inc./1/ 70,541 577,731 Bebe Stores Inc./1/ 21,292 577,013 State Financial Services Corp. Class A 23,247 576,061 Mothers Work Inc./1/ 18,978 575,982 Drexler Technology Corp./1/ 41,071 575,815 Shenandoah Telecommunications Co. 14,855 572,660 Tier Technologies Inc. Class B/1/ 64,271 572,655 A.S.V. Inc./1/ 29,974 572,204 BroadVision Inc./1/ 116,646 571,915 KFx Inc./1/ 113,867 571,612 Patriot Bank Corp. 30,289 569,433 iPayment Holdings Inc./1/ 24,955 567,976 Aceto Corp. 40,464 566,496 Party City Corp./1/ 45,643 565,060 Capstead Mortgage Corp. 45,430 564,695 SeeBeyond Technology Corp./1/ 220,506 564,495 Pomeroy IT Solutions Inc. 44,315 562,801 America's Car-Mart Inc./1/ 18,724 560,784 McMoRan Exploration Co./1/ 53,442 560,072 FNB Corp. 22,447 560,053 Omega Healthcare Investors Inc./1/ 72,538 557,092 Charter Financial Corp. 18,055 556,997 First M&F Corp. 15,528 553,573 Blue Rhino Corp./1/ 49,937 553,302 Aphton Corp./1/ 98,529 552,748 Medis Technologies Ltd./1/ 54,164 551,931 World Wrestling Entertainment Inc. 55,034 551,441 Great Atlantic & Pacific Tea Co./1/ 67,862 550,361 Whitehall Jewellers Inc./1/ 49,069 550,063 Center Bancorp Inc. 34,150 548,790 Sizeler Property Investors Inc. 52,361 548,743 iGATE Corp./1/ 93,000 548,700 NL Industries Inc. 33,720 548,624 Heritage Commerce Corp./1/ 51,049 547,756 Bone Care International Inc./1/ 43,007 547,049 CSS Industries Inc. 21,227 546,595 Alliance Semiconductor Corp./1/ 100,001 544,005 Plug Power Inc./1/ 105,563 543,755 SEMCO Energy Inc. 117,932 542,487 SAFLINK Corp./1/ 117,826 542,000 EverTrust Financial Group Inc. 19,081 541,519 FFLC Bancorp Inc. 18,635 540,974 Stepan Co. 23,730 540,569 Enstar Group Inc./1/ 13,752 539,766 Three-Five Systems Inc./1/ 97,663 538,123 Metris Companies Inc. 130,035 535,744 Heritage Financial Corp. 24,478 533,131 MarineMax Inc./1/ 36,695 532,444 Hi-Tech Pharmacal Co./1/ 22,683 532,370 P.A.M. Transportation Services Inc./1/ 25,906 531,591 Commercial Capital Bancorp Inc./1/ 33,948 530,607 OMNOVA Solutions Inc./1/ 151,130 530,466 Charlotte Russe Holding Inc./1/ 51,514 530,079 Royal Bancshares of Pennsylvania Class A 19,710 529,214 First Defiance Financial Corp. 22,647 527,675 66 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Applica Inc./1/ 87,061 $ 526,719 InteliData Technologies Corp./1/ 222,589 525,310 Coldwater Creek Inc./1/ 53,478 525,154 Ulticom Inc./1/ 49,800 524,394 Dave & Buster's Inc./1/ 50,824 523,487 American National Bankshares Inc. 20,899 521,848 Rent-Way Inc./1/ 97,072 521,277 MutualFirst Financial Inc. 20,355 521,088 Research Frontiers Inc./1/ 45,301 519,557 Merchants Bancshares Inc. 18,360 519,221 Chronimed Inc./1/ 56,829 518,849 Drew Industries Inc./1/ 27,967 517,669 Sanfilippo (John B.) & Son Inc./1/ 24,262 515,810 GA Financial Inc. 19,008 515,687 Financial Industries Corp. 36,252 514,778 Computer Horizons Corp./1/ 139,063 514,533 ON Semiconductor Corp./1/ 128,455 513,820 Digitas Inc./1/ 70,397 511,082 Perini Corp./1/ 74,442 510,672 Computer Programs & Systems Inc. 28,210 508,626 Stein Mart Inc./1/ 92,932 508,338 QAD Inc./1/ 46,343 507,919 Martha Stewart Living Omnimedia Inc. Class A/1/ 54,904 507,862 Security Bank Corp. 17,169 506,486 Restoration Hardware Inc./1/ 87,059 505,813 Boston Beer Co. Inc. Class A/1/ 31,599 503,056 IMPAC Medical Systems Inc./1/ 28,096 502,637 First Citizens Banc Corp. 18,966 502,599 PennFed Financial Services Inc. 17,270 502,557 Ducommun Inc./1/ 30,652 499,628 Nelson (Thomas) Inc./1/ 36,168 499,480 Powell Industries Inc./1/ 29,730 499,464 Neoforma Inc./1/ 35,410 497,511 1-800 CONTACTS INC./1/ 24,459 493,583 Metrologic Instruments Inc./1/ 13,709 493,387 Horizon Offshore Inc./1/ 120,033 493,336 Source Interlink Companies Inc./1/ 52,475 493,265 Westfield Financial Inc. 22,094 493,138 Columbia Bancorp (Oregon) 34,260 492,316 Century Bancorp Inc. Class A 14,673 490,665 SureBeam Corporation Class A/1/ 343,004 490,496 Associated Estates Realty Corp. 75,066 489,430 AVI BioPharma Inc./1/ 94,060 486,290 Interpool Inc. 30,556 486,146 Parkvale Financial Corp. 19,231 485,583 Radiant Systems Inc./1/ 77,449 484,831 Nuvelo Inc./1/ 184,901 484,441 Nassda Corp./1/ 61,396 483,187 Dril-Quip Inc./1/ 28,516 481,920 Mail-Well Inc./1/ 137,415 480,953 Collins & Aikman Corp./1/ 142,251 480,808 Gulf Island Fabrication Inc./1/ 31,939 480,363 Petroleum Helicopters Inc./1/ 16,549 479,938 Pemstar Inc./1/ 134,659 479,386 Provident Financial Holdings Inc. 15,952 478,879 Interland Inc./1/ 61,980 476,626 Crown Media Holdings Inc./1/ 57,994 474,391 Perry Ellis International Inc./1/ 16,603 474,016 Ultimate Electronics Inc./1/ 49,928 473,817 TransMontaigne Inc./1/ 79,461 473,588 Virginia Commerce Bancorp Inc./1/ 21,684 473,145 Summit America Television Inc./1/ 162,482 472,823 ESB Financial Corp. 32,467 472,720 Maritrans Inc. 31,438 471,570 Cholestech Corp./1/ 61,864 470,166 Shoe Carnival Inc./1/ 32,823 469,369 Hooker Furniture Corp. 13,773 468,971 NASB Financial Inc. 14,025 468,575 Princeton Review Inc. (The)/1/ 72,602 466,831 Lannett Co. Inc./1/ 26,657 466,231 Dynacq International Inc./1/ 25,735 465,546 Franklin Financial Corp. 14,988 463,279 Commercial Bankshares Inc. 15,355 460,036 BancTrust Financial Group Inc. 30,402 459,070 CryoLife Inc./1/ 74,482 458,809 Medical Action Industries Inc./1/ 35,229 458,682 SCHEDULES OF INVESTMENTS 67 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- RCN Corp./1/ 248,945 $ 458,059 Sun Bancorp Inc. (Pennsylvania) 24,663 456,759 Dendreon Corp./1/ 51,377 454,686 Compucom Systems Inc./1/ 107,881 453,100 Insurance Auto Auctions Inc./1/ 40,107 451,204 First South Bancorp Inc. 13,996 449,971 Foothill Independent Bancorp 21,163 449,714 GB&T Bancshares Inc. 20,201 449,674 Allscripts Healthcare Solutions Inc./1/ 109,872 448,278 Meridian Bioscience Inc. 44,567 446,561 Turnstone Systems Inc./1/ 155,492 446,262 Triton PCS Holdings Inc. Class A/1/ 99,976 445,893 Candela Corp./1/ 34,940 445,834 Durect Corp./1/ 132,673 445,781 Great American Financial Resources Inc. 30,695 444,464 Alico Inc. 15,859 444,211 M&F Worldwide Corp./1/ 46,125 444,184 RPC Inc. 44,352 443,520 First Federal Financial of Kentucky 14,365 440,287 CyberGuard Corp./1/ 46,289 440,208 Exactech Inc./1/ 26,891 439,668 ACLARA BioSciences Inc./1/ 110,071 435,881 NetScout Systems Inc./1/ 87,315 435,702 Dominion Homes Inc./1/ 16,889 434,554 NS Group Inc./1/ 67,263 434,519 Virage Logic Corp./1/ 57,067 433,709 PAB Bankshares Inc. 31,987 432,784 Oak Hill Financial Inc. 14,863 430,878 Aspect Medical Systems Inc./1/ 41,922 430,539 First Consulting Group Inc. 86,434 430,441 American Land Lease Inc. 23,230 428,593 LNB Bancorp Inc. 21,220 428,220 NetRatings Inc./1/ 45,759 427,069 National Healthcare Corp./1/ 29,905 427,043 Sanders Morris Harris Group Inc. 48,036 426,079 National Health Realty Inc. 28,177 426,036 Redback Networks Inc./1/ 696,262 424,720 Center Financial Corp./1/ 20,902 424,520 Vitria Technology Inc./1/ 83,827 423,326 BHA Group Inc. 17,714 420,885 Weyco Group Inc. 8,480 419,675 Santander BanCorp 22,132 415,418 Schawk Inc. 34,768 414,435 Bruker BioSciences Corp./1/ 93,695 412,258 Rex Stores Corp./1/ 31,513 411,245 DigitalThink Inc./1/ 159,863 410,848 DJ Orthopedics Inc./1/ 29,424 410,465 Specialty Laboratories Inc./1/ 31,452 410,449 Cantel Medical Corp./1/ 30,731 409,952 Finlay Enterprises Inc./1/ 28,174 409,368 Kana Software Inc./1/ 104,363 409,103 Ambassadors Group Inc./1/ 23,879 406,182 First Albany Companies Inc. 31,734 404,608 Westmoreland Coal Co./1/ 28,387 398,270 Medallion Financial Corp. 63,216 398,261 DHB Industries Inc./1/ 91,543 398,212 Flag Financial Corp. 29,784 398,212 Arden Group Inc. Class A 6,458 397,167 Taylor Capital Group Inc. 17,188 396,699 United Security Bancshares 15,482 390,146 Cavalry Bancorp Inc. 23,219 388,918 Boyds Collection Ltd. (The)/1/ 85,807 386,990 Seabulk International Inc./1/ 53,059 386,800 Diodes Inc./1/ 18,752 386,104 Ingles Markets Inc. Class A 39,299 385,130 McLeodUSA Inc. Class A/1/ 276,594 384,466 Marine Products Corp. 26,117 384,442 Warwick Community Bancorp 13,539 381,394 United Mobile Homes Inc. 25,186 379,553 Northern States Financial Corp. 13,158 379,082 WESCO International Inc./1/ 72,231 377,768 Tarragon Realty Investors Inc./1/ 24,693 376,568 Medical Staffing Network Holdings Inc./1/ 49,519 374,364 Gundle/SLT Environmental Inc./1/ 24,325 373,389 CollaGenex Pharmaceuticals Inc./1/ 34,796 373,361 Greater Community Bancorp 23,424 370,099 Material Sciences Corp. 36,096 368,901 PICO Holdings Inc./1/ 28,212 368,731 68 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Manufacturers Services Ltd./1/ 73,518 $ 367,590 Deb Shops Inc. 19,949 366,064 Maui Land & Pineapple Co. Inc./1/ 14,119 365,117 Reading International Inc. Class A/1/ 62,610 357,503 Seaboard Corp. 1,660 357,066 Bankrate Inc./1/ 25,457 356,907 Alamo Group Inc. 24,880 354,789 Smart & Final Inc./1/ 56,708 354,425 Milacron Inc. 153,855 353,867 Sierra Bancorp 22,993 353,632 Steinway Musical Instruments Inc./1/ 19,917 353,527 Midway Games Inc./1/ 119,276 353,057 Third Wave Technologies Inc./1/ 108,923 351,821 Nature's Sunshine Products Inc. 42,244 350,625 Crawford & Co. Class B 49,639 348,466 Pacific Union Bank 18,477 342,748 APAC Customer Services Inc./1/ 136,044 340,110 Sypris Solutions Inc. 24,459 335,822 Ambassadors International Inc. 27,070 331,607 Trans World Entertainment Corp./1/ 58,589 331,028 Greenbrier Companies Inc./1/ 24,252 327,645 Old Point Financial Corp. 10,444 327,106 Novoste Corp./1/ 74,152 327,010 PetroCorp Inc./1/ 24,280 326,809 GTC Biotherapeutics Inc./1/ 104,691 324,542 Price Legacy Corporation/1/ 92,500 323,750 Catapult Communications Corp./1/ 25,647 322,639 Synplicity Inc./1/ 54,360 320,724 Independence Holding Co. 14,731 320,399 Pegasystems Inc./1/ 43,591 318,214 Green Mountain Coffee Roasters Inc./1/ 16,035 317,653 Dover Downs Gaming & Entertainment Inc. 38,606 317,341 U.S. Xpress Enterprises Inc. Class A/1/ 25,701 314,837 Galyan's Trading Co./1/ 30,646 312,896 FTD Inc. Class A/1/ 13,895 312,776 Guess ? Inc./1/ 34,852 310,183 United PanAm Financial Corp./1/ 17,773 309,428 Community Bank of Northern Virginia 18,629 308,310 Cerus Corp./1/ 66,540 308,080 Duratek Inc./1/ 34,488 307,633 Standard Motor Products Inc. 30,307 306,101 Richardson Electronics Ltd. 28,561 302,747 Ansoft Corp./1/ 29,373 301,073 BRT Realty Trust 15,736 300,243 Value Line Inc. 6,250 300,000 Metro One Telecommunications Inc./1/ 85,330 296,948 Technical Olympic USA Inc./1/ 10,691 294,003 Clayton Williams Energy Inc./1/ 15,561 293,325 Handspring Inc./1/ 258,143 291,702 Virbac Corp./1/ 40,224 291,624 Acme Communications Inc./1/ 38,581 291,287 Alteon Inc./1/ 153,174 291,031 MAIR Holdings Inc./1/ 42,855 290,985 Pantry Inc. (The)/1/ 23,870 288,588 FMS Financial Corp. 17,178 287,731 PC Connection Inc./1/ 30,557 287,236 Hampshire Group Ltd./1/ 9,018 287,133 General Binding Corp./1/ 27,521 286,218 Modtech Holdings Inc./1/ 35,973 285,626 Digital Generation Systems Inc./1/ 129,877 283,002 Systemax Inc./1/ 42,437 281,782 Emerson Radio Corp./1/ 74,910 280,912 ICT Group Inc./1/ 24,811 265,726 Mobius Management Systems Inc./1/ 32,551 261,059 Beasley Broadcast Group Inc. Class A/1/ 18,855 260,576 TheStreet.com Inc./1/ 57,403 258,314 SimpleTech Inc./1/ 35,788 256,242 Ampco-Pittsburgh Corp. 21,181 253,960 Dover Motorsports Inc. 67,002 251,928 National Beverage Corp./1/ 16,643 251,309 Fairchild Corp. (The) Class A/1/ 50,536 250,153 Centennial Communications Corp./1/ 48,940 248,615 Liquidmetal Technologies/1/ 77,727 244,840 SCHEDULES OF INVESTMENTS 69 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Sanchez Computer Associates Inc./1/ 63,297 $ 243,060 Micro Therapeutics Inc./1/ 44,704 236,484 Mestek Inc./1/ 13,948 234,466 United Capital Corp. 12,966 233,388 Convera Corp./1/ 52,418 228,018 MarketWatch.com Inc./1/ 26,936 225,212 Donegal Group Inc. Class A 14,715 222,196 NYMAGIC Inc. 9,754 218,782 Pegasus Communications Corp./1/ 14,319 213,067 Oneida Ltd. 66,732 205,535 Star Scientific Inc./1/ 110,928 201,889 Newtek Business Services Inc./1/ 38,150 188,461 Alliance Imaging Inc./1/ 54,348 186,957 Retractable Technologies Inc./1/ 30,359 185,493 EMC Insurance Group Inc. 10,385 183,399 Oneida Financial Corp. 7,575 180,437 Omega Protein Corp./1/ 27,094 177,466 Optical Communication Products Inc./1/ 74,188 175,084 Carmike Cinemas Inc./1/ 6,324 166,384 Sirna Therapeutics Inc./1/ 29,074 166,303 Inter Parfums Inc. 15,266 152,660 Nuance Communications Inc./1/ 26,104 151,142 Clean Harbors Inc./1/ 35,409 150,488 Hungarian Telephone and Cable Corp./1/ 15,022 138,953 Atari Inc./1/ 31,349 128,217 North Coast Energy Inc./1/ 9,736 121,583 Revlon Inc. Class A/1/ 45,678 121,503 Raytech Corp./1/ 33,530 117,690 Noland Co. 2,929 99,293 American Realty Investors Inc./1/ 9,531 95,691 Blount International Inc./1/ 18,418 88,591 Transcontinental Realty Investments Inc./1/ 7,451 87,847 Orleans Homebuilders Inc./1/ 7,334 86,688 Sports Resorts International Inc./1/ 7,024 35,682 TOTAL COMMON STOCKS (Cost: $3,690,483,302) 3,536,835,628 SHARES OR SECURITY PRINCIPAL VALUE ---------------------------------------------------------------------------- SHORT TERM INVESTMENTS - 23.83% MONEY MARKET FUNDS - 14.26% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares/2/,/3/ 335,213,087 $ 335,213,087 Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares/2/,/3/ 123,746,005 123,746,005 BlackRock Temp Cash Money Market Fund/2/ 5,497,041 5,497,041 Short Term Investment Co. - Liquid Assets Money Market Portfolio/2/ 29,176,094 29,176,094 Short Term Investment Co. - Prime Money Market Portfolio, Institutional Shares/2/ 11,249,637 11,249,637 504,881,864 FLOATING RATE NOTES - 5.54% Beta Finance Inc. 1.08%, 05/20/04/2/ $ 5,624,818 5,624,284 1.08%, 09/15/04/2/ 11,249,637 11,248,561 1.17%, 08/23/04/2/ 5,624,818 5,629,135 CC USA Inc. 1.06%, 05/24/04/2/ 11,249,637 11,248,915 1.08%, 04/19/04/2/ 4,949,840 4,949,705 1.12%, 07/15/04/2/ 5,624,818 5,626,414 Dorada Finance Inc. 1.08%, 05/20/04/2/ 11,249,637 11,248,567 1.24%, 08/09/04/2/ 2,812,409 2,812,049 Five Finance Inc. 1.09%, 04/15/04/2/ 5,624,818 5,624,818 HBOS Treasury Services PLC 1.13%, 06/24/08/2/ 11,249,637 11,249,637 Holmes Financing PLC 1.08%, 04/15/04/2/ 2,249,927 2,249,927 K2 USA LLC 1.08%, 08/16/04/2/ 2,812,409 2,812,041 1.08%, 09/27/04/2/ 12,149,608 12,147,810 1.09%, 04/13/04/2/ 5,624,818 5,624,672 1.09%, 05/17/04/2/ 5,624,818 5,624,643 70 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE ---------------------------------------------------------------------------- Links Finance LLC 1.05%, 07/20/04/2/ $ 4,499,855 $ 4,499,132 1.08%, 05/04/04/2/ 5,624,818 5,624,654 1.08%, 06/28/04/2/ 5,624,818 5,623,988 1.09%, 03/29/04/2/ 5,624,818 5,624,818 Nationwide Building Society 1.08%, 07/23/04/2/ 8,437,228 8,437,228 Sigma Finance Inc. 1.05%, 07/20/04/2/ 5,624,818 5,623,915 1.07%, 10/15/03/2/ 11,249,637 11,249,594 1.07%, 07/01/04/2/ 5,624,818 5,623,766 1.24%, 08/06/04/2/ 2,812,409 2,812,170 Tango Finance Corp. 1.05%, 07/15/04/2/ 3,374,891 3,374,010 1.06%, 07/06/04/2/ 3,374,891 3,374,627 WhistleJacket Capital LLC 1.08%, 09/15/04/2/ 5,624,818 5,623,743 White Pine Finance LLC 1.08%, 05/17/04/2/ 6,749,782 6,749,782 1.08%, 07/06/04/2/ 6,749,782 6,749,288 1.08%, 08/26/04/2/ 5,624,818 5,624,036 1.09%, 04/20/04/2/ 5,624,818 5,624,818 195,960,747 COMMERCIAL PAPER - 2.89% Amsterdam Funding Corp. 1.06%, 10/16/03/2/ 5,343,578 5,341,221 Blue Ridge Asset Funding Corp. 1.05%, 10/17/03/2/ 5,624,818 5,622,192 Edison Asset Securitization 1.07%, 10/23/03/2/ 10,574,659 10,567,744 Gemini Securitization Corp. 1.05%, 10/17/03/2/ 3,937,373 3,935,535 Greenwich Funding Corp. 1.06%, 10/16/03/2/ 6,637,286 6,634,354 Jupiter Securitization Corp. 1.05%, 10/20/03/2/ 5,624,818 5,621,701 New Center Asset Trust 1.06%, 10/22/03/2/ 5,624,818 5,621,340 Park Avenue Receivables Corp. 1.05%, 10/20/03/2/ 5,624,818 5,621,701 Preferred Receivables Funding Corp. 1.06%, 10/08/03/2/ 5,624,818 5,623,659 Receivables Capital Corp. 1.05%, 10/15/03/2/ 3,780,778 3,779,234 Sydney Capital Corp. 1.07%, 10/17/03/2/ 4,556,103 4,553,936 UBS Finance (Delaware) Inc. 1.03%, 10/08/03/2/ 11,249,637 11,247,384 1.05%, 10/15/03/2/ 5,624,818 5,622,522 1.11%, 10/01/03/2/ 22,499,274 22,499,274 102,291,797 TIME DEPOSITS - 0.89% Abbey National Treasury Services PLC 1.15%, 10/01/03/2/ 5,624,818 5,624,818 Canadian Imperial Bank of Commerce 1.06%, 10/08/03/2/ 2,812,409 2,812,409 1.08%, 10/30/03/2/ 4,499,855 4,499,854 1.37%, 08/26/04/2/ 11,249,637 11,249,637 Toronto-Dominion Bank 1.33%, 08/23/04/2/ 7,312,264 7,308,972 31,495,690 REPURCHASE AGREEMENTS - 0.25% Lehman Brothers Inc. 1.10%, 10/01/03/2/ 8,999,710 8,999,709 8,999,709 TOTAL SHORT TERM INVESTMENTS (Cost: $843,629,807) 843,629,807 TOTAL INVESTMENTS IN SECURITIES - 123.75% (Cost $4,534,113,109) 4,380,895,876 OTHER ASSETS, LESS LIABILITIES - (23.75%) (841,129,878) --------------- NET ASSETS - 100.00% $ 3,539,765,998 =============== /1/ Non-income earning securities. /2/ All or a portion of this security represents investments of securities lending collateral. /3/ Issuer is an affiliate of the Fund's investment advisor. See Note 2. SEE NOTES TO FINANCIAL STATEMENTS. SCHEDULES OF INVESTMENTS 71 SCHEDULE OF INVESTMENTS (Unaudited) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- COMMON STOCKS - 99.98% Overture Services Inc./1/ 220,058 $ 5,829,336 Cytyc Corp./1/ 387,217 5,823,744 Titan Corp. (The)/1/ 274,251 5,715,391 RF Micro Devices Inc./1/ 593,593 5,514,479 Avid Technology Inc./1/ 102,999 5,442,467 Conexant Systems Inc./1/ 924,934 5,235,126 Pacific Sunwear of California Inc./1/ 244,061 5,042,300 Cymer Inc./1/ 119,236 4,912,523 Covance Inc./1/ 212,231 4,749,730 Sonus Networks Inc./1/ 684,396 4,742,864 Accredo Health Inc./1/ 164,977 4,617,706 Affiliated Managers Group Inc./1/ 72,615 4,560,222 Take-Two Interactive Software Inc./1/ 133,361 4,556,945 Vitesse Semiconductor Corp./1/ 709,908 4,543,411 INAMED Corp./1/ 61,400 4,509,830 TECHNE Corp./1/ 140,765 4,474,919 Gen-Probe Inc./1/ 82,206 4,453,099 Fred's Inc. 133,363 4,395,644 UCBH Holdings Inc. 144,604 4,371,379 Cooper Companies Inc. 106,754 4,350,225 OSI Pharmaceuticals Inc./1/ 133,797 4,344,389 CACI International Inc. Class A/1/ 99,190 4,250,291 NBTY Inc./1/ 177,850 4,152,797 Martek Biosciences Corp./1/ 78,316 4,124,904 Roper Industries Inc. 94,478 4,114,517 MGI Pharma Inc./1/ 103,753 4,073,343 AMR Corp./1/ 350,524 4,013,500 P.F. Chang's China Bistro Inc./1/ 87,325 3,960,189 Panera Bread Co. Class A/1/ 96,032 3,933,471 Sybase Inc./1/ 230,532 3,921,349 PETCO Animal Supplies Inc./1/ 123,671 3,858,535 Airtran Holdings Inc./1/ 227,890 3,817,157 Oshkosh Truck Corp. 94,517 3,743,818 Semtech Corp./1/ 202,804 3,743,762 Medicines Co. (The)/1/ 143,981 3,743,506 Mentor Graphics Corp./1/ 209,963 3,680,651 Varian Semiconductor Equipment Associates Inc./1/ 98,125 3,674,781 Hot Topic Inc./1/ 162,755 3,668,498 Hyperion Solutions Corp./1/ 125,893 3,634,531 Kronos Inc./1/ 68,375 3,617,721 Evergreen Resources Inc./1/ 133,565 3,606,255 IGEN International Inc./1/ 61,996 3,583,369 Southwest Bancorp of Texas Inc. 97,589 3,562,974 Strayer Education Inc. 36,784 3,557,381 Cabot Microelectronics Corp./1/ 63,540 3,541,720 Lexar Media Inc./1/ 207,593 3,537,385 Pediatrix Medical Group Inc./1/ 76,271 3,512,280 Intergraph Corp./1/ 148,666 3,460,944 Alliance Gaming Corp./1/ 170,423 3,456,178 OmniVision Technologies Inc./1/ 81,694 3,450,755 Tetra Tech Inc./1/ 173,109 3,446,600 United Online Inc./1/ 98,320 3,413,670 Western Wireless Corp. Class A/1/ 181,666 3,386,254 Sonic Corp./1/ 133,625 3,378,040 Dade Behring Holdings Inc./1/ 118,912 3,359,264 Legato Systems Inc./1/ 298,401 3,345,075 East West Bancorp Inc. 78,198 3,342,964 Thor Industries Inc. 61,690 3,332,494 Plantronics Inc./1/ 138,454 3,304,897 Tractor Supply Co./1/ 100,586 3,300,227 Odyssey Healthcare Inc./1/ 110,409 3,292,396 Sylvan Learning Systems Inc./1/ 120,547 3,288,522 Vertex Pharmaceuticals Inc./1/ 264,878 3,257,999 Brink's Co. (The) 187,343 3,252,274 Documentum Inc./1/ 152,050 3,240,185 Waste Connections Inc./1/ 92,014 3,228,771 Hilb, Rogal & Hamilton Co. 103,721 3,219,500 Mentor Corp. 140,402 3,201,166 AMERIGROUP Corp./1/ 71,330 3,183,458 TrustCo Bank Corp. NY 257,203 3,179,029 Varian Inc./1/ 101,160 3,168,331 Patina Oil & Gas Corp. 86,630 3,139,471 Hollywood Entertainment Corp./1/ 183,635 3,121,795 LifePoint Hospitals Inc./1/ 129,352 3,110,916 Landstar System Inc./1/ 50,867 3,103,904 Cognex Corp. 117,009 3,076,167 Alkermes Inc./1/ 221,930 3,044,880 72 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Commonwealth Telephone Enterprises Inc./1/ 75,341 $ 3,023,434 Advanced Digital Information Corp./1/ 213,841 2,998,051 CLARCOR Inc. 76,860 2,997,540 CEC Entertainment Inc./1/ 76,279 2,990,137 Quiksilver Inc./1/ 187,369 2,988,536 Power Integrations Inc./1/ 88,694 2,948,189 Flir Systems Inc./1/ 113,929 2,918,861 EarthLink Inc./1/ 352,665 2,902,433 Christopher & Banks Corp. 121,514 2,899,324 SCP Pool Corp./1/ 103,215 2,871,441 Cerner Corp./1/ 92,490 2,855,166 NPS Pharmaceuticals Inc./1/ 101,638 2,830,618 Vicuron Pharmaceuticals Inc./1/ 159,499 2,823,132 Ariba Inc./1/ 926,786 2,817,429 W Holding Co. Inc. 156,834 2,807,329 Enterasys Networks Inc./1/ 701,465 2,805,860 Thoratec Corp./1/ 164,786 2,799,714 New Century Financial Corp. 97,753 2,768,365 Tekelec/1/ 175,912 2,745,986 Yankee Candle Co. Inc. (The)/1/ 107,563 2,740,705 Zoran Corp./1/ 139,984 2,729,688 Cost Plus Inc./1/ 73,840 2,726,173 NII Holdings Inc. Class B/1/ 45,460 2,713,507 Toro Co. 59,888 2,694,960 Skyworks Solutions Inc./1/ 294,185 2,677,084 CSG Systems International Inc./1/ 180,650 2,668,200 Sybron Dental Specialties Inc./1/ 105,750 2,651,153 Openwave Systems Inc./1/ 623,818 2,632,512 GlobeSpanVirata Inc./1/ 364,391 2,630,903 Cray Inc./1/ 239,318 2,627,712 Macrovision Corp./1/ 141,582 2,615,020 Matthews International Corp. Class A 98,331 2,596,922 Digital River Inc./1/ 93,983 2,570,435 Diagnostic Products Corp. 70,328 2,555,016 Rare Hospitality International Inc./1/ 101,936 2,539,226 Ligand Pharmaceuticals Inc. Class B/1/ 196,973 2,538,982 Trimble Navigation Ltd./1/ 109,390 2,532,379 Emmis Communications Corp./1/ 125,360 2,529,765 NDCHealth Corp. 120,336 2,521,039 KV Pharmaceuticals Co./1/ 111,678 2,512,755 Advanced Neuromodulation Systems Inc./1/ 62,683 2,501,052 VISX Inc./1/ 131,233 2,499,989 Wilson Greatbatch Technologies Inc./1/ 68,729 2,477,680 MacDermid Inc. 93,576 2,475,085 FTI Consulting Inc./1/ 142,354 2,469,842 CNET Networks Inc./1/ 348,808 2,469,561 VCA Antech Inc./1/ 104,474 2,460,363 Priority Healthcare Corp. Class B/1/ 119,413 2,452,743 Brooks Automation Inc./1/ 116,575 2,436,417 Wintrust Financial Corp. 64,136 2,416,003 Andrew Corp./1/ 196,569 2,415,833 Engineered Support Systems Inc. 39,814 2,408,747 IMC Global Inc. 374,408 2,399,955 Unit Corp./1/ 126,759 2,388,140 Texas Regional Bancshares Inc. Class A 70,306 2,375,640 Owens & Minor Inc. 98,164 2,365,752 Hercules Inc./1/ 208,500 2,362,305 DSP Group Inc./1/ 94,790 2,361,219 Micrel Inc./1/ 193,481 2,358,533 FileNET Corp./1/ 117,486 2,357,944 CAL Dive International Inc./1/ 121,169 2,355,525 RSA Security Inc./1/ 164,626 2,350,859 ATMI Inc./1/ 92,583 2,339,572 Watson Wyatt & Co. Holdings/1/ 103,810 2,336,763 Hutchinson Technology Inc./1/ 70,359 2,328,883 Grey Global Group Inc. 3,051 2,322,116 Kroll Inc./1/ 124,645 2,318,397 Select Medical Corp./1/ 79,745 2,296,656 Penn National Gaming Inc./1/ 106,350 2,267,382 Dionex Corp./1/ 57,553 2,265,286 Pennsylvania Real Estate Investment Trust 67,519 2,258,511 Power-One Inc./1/ 219,028 2,253,798 SCHEDULES OF INVESTMENTS 73 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Borland Software Corp./1/ 244,469 $ 2,251,559 Esperion Therapeutics Inc./1/ 115,920 2,246,530 Maverick Tube Corp./1/ 144,719 2,246,039 Cumulus Media Inc. Class A/1/ 131,287 2,238,443 Telik Inc./1/ 111,149 2,228,537 Southwestern Energy Co./1/ 122,753 2,221,829 Urban Outfitters Inc./1/ 84,816 2,210,305 Couer D'Alene Mines Corp./1/ 708,245 2,202,642 Washington Real Estate Investment Trust 75,842 2,199,418 ILEX Oncology Inc./1/ 132,346 2,198,267 United Natural Foods Inc./1/ 66,167 2,196,083 Heartland Express Inc. 91,319 2,193,482 Pacific Capital Bancorp 71,373 2,176,163 j2 Global Communications Inc./1/ 57,362 2,170,004 ProQuest Co./1/ 82,096 2,159,125 Onyx Pharmaceuticals Inc./1/ 99,947 2,153,858 eResearch Technology Inc./1/ 61,767 2,151,345 CV Therapeutics Inc./1/ 97,708 2,149,576 Baldor Electric Co. 101,131 2,134,875 Cyberonics Inc./1/ 68,746 2,121,502 Harland (John H.) Co. 80,059 2,119,162 AtheroGenics Inc./1/ 125,847 2,106,679 Knight Transportation Inc./1/ 84,010 2,106,131 Simpson Manufacturing Co. Inc./1/ 51,322 2,098,557 Regeneron Pharmaceuticals Inc./1/ 118,272 2,089,866 Ask Jeeves Inc./1/ 119,525 2,079,735 Lattice Semiconductor Corp./1/ 292,491 2,079,611 Nektar Therapeutics/1/ 161,986 2,073,421 Parametric Technology Corp./1/ 663,780 2,070,994 Priceline.com Inc./1/ 71,206 2,064,262 Entegris Inc./1/ 182,347 2,060,521 Genta Inc./1/ 162,233 2,055,492 Community First Bankshares Inc. 77,761 2,055,223 CVB Financial Corp. 107,858 2,049,302 Trust Co. of New Jersey (The) 64,028 2,048,896 Investment Technology Group Inc./1/ 106,726 2,047,005 Delta & Pine Land Co. 88,405 2,034,199 Inveresk Research Group Inc./1/ 102,338 2,031,409 Grey Wolf Inc./1/ 582,773 2,028,050 Fossil Inc./1/ 83,380 2,020,297 ADVO Inc./1/ 48,387 2,014,351 Catalina Marketing Corp./1/ 132,550 2,013,434 AmSurg Corp./1/ 60,912 2,009,487 Adolor Corp./1/ 109,427 2,007,985 Digital Insight Corp./1/ 100,404 1,998,040 American Italian Pasta Co. Class A/1/ 51,505 1,992,728 CMGI Inc./1/ 1,275,151 1,976,484 FEI Co./1/ 84,612 1,974,844 Novastar Financial Inc. 34,275 1,969,784 Anteon International Corp./1/ 64,310 1,967,886 Ultratech Inc./1/ 69,615 1,964,535 Manhattan Associates Inc./1/ 75,311 1,949,802 Scientific Games Corp. Class A/1/ 170,301 1,943,134 MICROS Systems Inc./1/ 56,876 1,942,315 Progress Software Corp./1/ 90,281 1,941,041 Transaction Systems Architects Inc. Class A/1/ 116,364 1,932,806 BARRA Inc./1/ 51,399 1,930,032 LTX Corp./1/ 171,152 1,927,172 Eclipsys Corp./1/ 120,082 1,920,111 Harleysville National Corp. 82,139 1,919,588 Cathay Bancorp Inc. 43,264 1,914,432 Winnebago Industries Inc. 42,940 1,914,265 Align Technology Inc./1/ 152,696 1,910,227 Olin Corp. 120,595 1,907,813 American Healthways Inc./1/ 45,234 1,899,376 Applera Corp. - Celera Genomics Group/1/ 161,482 1,887,725 Ascential Software Corp./1/ 101,372 1,878,423 Asyst Technologies Inc./1/ 133,247 1,874,785 Tupperware Corp. 139,439 1,865,694 Kulicke & Soffa Industries Inc./1/ 171,856 1,862,919 MGE Energy Inc. 61,390 1,857,661 CUNO Inc./1/ 47,316 1,854,319 ProAssurance Corp./1/ 71,211 1,839,380 eSpeed, Inc./1/ 81,311 1,838,442 Brady Corp. Class A 57,690 1,835,119 Centene Corp./1/ 60,302 1,832,578 EGL Inc./1/ 100,420 1,825,636 74 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- ANSYS Inc./1/ 51,205 $ 1,819,826 Actel Corp./1/ 75,882 1,818,892 Sohu.com Inc./1/ 58,410 1,816,551 Advanced Medical Optics Inc./1/ 100,211 1,799,790 Select Comfort Corp./1/ 67,766 1,795,799 Hollinger International Inc. 144,944 1,790,058 Checkpoint Systems Inc./1/ 113,043 1,786,079 Aeropostale Inc./1/ 65,827 1,780,620 Navigant Consulting Co./1/ 144,438 1,778,032 Flagstar Bancorp Inc. 76,864 1,764,029 Sycamore Networks Inc./1/ 359,819 1,763,113 Digene Corp./1/ 42,889 1,752,445 Enzon Pharmaceuticals Inc./1/ 150,545 1,752,344 United Community Banks Inc. 63,046 1,744,483 Connetics Corp./1/ 96,586 1,744,343 Nordson Corp. 67,352 1,743,743 Integra LifeSciences Holdings Corp./1/ 61,508 1,740,061 Too Inc./1/ 117,988 1,737,963 Wabtec Corp. 109,253 1,731,660 Symyx Technologies Inc./1/ 80,328 1,730,265 Ventana Medical Systems Inc./1/ 42,565 1,715,370 Beverly Enterprises Inc./1/ 289,592 1,714,385 Rogers Corp./1/ 55,070 1,708,271 Oceaneering International Inc./1/ 72,070 1,695,086 MicroStrategy Inc. Class A/1/ 36,834 1,694,732 Idex Corp. 46,404 1,690,962 Boyd Gaming Corp. 110,600 1,687,756 American Eagle Outfitters Inc./1/ 113,495 1,686,536 United Surgical Partners International Inc./1/ 59,455 1,682,577 Pinnacle Systems Inc./1/ 199,133 1,678,691 BioMarin Pharmaceutical Inc./1/ 218,990 1,677,463 Dot Hill Systems Corp./1/ 121,746 1,675,225 Sotheby's Holdings Inc. Class A/1/ 154,116 1,667,535 Inspire Pharmaceuticals Inc./1/ 96,829 1,665,459 Kopin Corp./1/ 239,784 1,661,703 Resources Connection Inc./1/ 68,063 1,661,282 InterMune Inc./1/ 86,710 1,654,427 Sierra Health Services Inc./1/ 80,468 1,653,617 PolyMedica Corp. 62,288 1,650,632 Taubman Centers Inc. 84,152 1,649,379 Tanox Inc./1/ 82,425 1,649,324 Informatica Corp./1/ 221,068 1,646,957 Movie Gallery Inc./1/ 83,598 1,642,701 Quest Software Inc./1/ 135,697 1,641,934 Vignette Corp./1/ 713,065 1,640,050 MKS Instruments Inc./1/ 75,516 1,635,677 Boston Private Financial Holdings Inc. 69,327 1,633,344 Bright Horizons Family Solutions Inc./1/ 40,875 1,632,956 Superior Energy Services Inc./1/ 166,017 1,626,967 Dick's Sporting Goods Inc./1/ 43,556 1,626,381 Teledyne Technologies Inc./1/ 111,129 1,616,927 Dime Community Bancshares 70,233 1,615,359 Silicon Storage Technology Inc./1/ 184,250 1,612,188 Photon Dynamics Inc./1/ 55,164 1,608,031 Aeroflex Inc./1/ 180,505 1,597,469 SureWest Communications 47,492 1,579,109 WebEx Communications Inc./1/ 83,124 1,578,525 Inter-Tel Inc. 64,229 1,576,822 Invacare Corp. 41,930 1,575,729 Geron Corp./1/ 114,414 1,567,472 Shuffle Master Inc./1/ 57,481 1,562,334 TriQuint Semiconductor Inc./1/ 278,538 1,559,813 Dendrite International Inc./1/ 102,633 1,558,995 Mercury Computer Systems Inc./1/ 73,003 1,557,154 Micromuse Inc./1/ 188,973 1,545,799 American Medical Systems Holdings Inc./1/ 71,144 1,543,825 Photronics Inc./1/ 72,333 1,537,800 Pacer International Inc./1/ 77,028 1,535,168 Advisory Board Co. (The)/1/ 33,518 1,523,393 Akamai Technologies Inc./1/ 355,070 1,523,250 Enzo Biochem Inc./1/ 77,681 1,515,556 Perot Systems Corp. Class A/1/ 150,589 1,505,890 ElkCorp 63,741 1,501,738 Guitar Center Inc./1/ 46,670 1,500,907 Benchmark Electronics Inc./1/ 35,475 1,499,528 Arrow International Inc. 65,158 1,498,634 Keane Inc./1/ 117,055 1,495,963 SCHEDULES OF INVESTMENTS 75 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Tularik Inc./1/ 151,714 $ 1,495,900 Per-Se Technologies Inc./1/ 92,686 1,482,976 Helix Technology Corp. 90,550 1,482,303 F5 Networks Inc./1/ 76,804 1,477,709 Independent Bank Corp. (Michigan) 50,409 1,475,976 Atrix Laboratories Inc./1/ 71,197 1,465,946 SERENA Software Inc./1/ 78,572 1,461,439 Essex Property Trust Inc. 23,281 1,459,952 WFS Financial Inc./1/ 39,405 1,459,167 Georgia Gulf Corp. 62,480 1,458,908 Headwaters Inc./1/ 89,981 1,448,694 Jarden Corp./1/ 38,363 1,448,203 Websense Inc./1/ 67,869 1,443,574 ExpressJet Holdings Inc./1/ 103,962 1,434,676 Gymboree Corp./1/ 101,599 1,431,530 Crompton Corp. 245,762 1,427,877 Internet Security Systems Inc./1/ 113,952 1,424,400 Agile Software Corp./1/ 149,331 1,421,631 Tetra Technologies Inc./1/ 68,855 1,419,790 Magma Design Automation Inc./1/ 72,285 1,418,232 Wabash National Corp./1/ 88,649 1,413,952 Itron Inc./1/ 70,344 1,411,804 M/I Schottenstein Homes Inc. 35,534 1,409,634 Extreme Networks Inc./1/ 220,820 1,393,374 Coherent Inc./1/ 56,514 1,391,940 Labor Ready Inc./1/ 138,375 1,390,669 POZEN Inc./1/ 78,023 1,387,249 Superior Industries International Inc. 34,093 1,382,471 CIMA Labs Inc./1/ 49,443 1,381,932 IDX Systems Corp./1/ 59,622 1,378,461 Wright Medical Group Inc./1/ 54,400 1,375,232 Columbia Laboratories Inc./1/ 113,623 1,372,566 Portal Software Inc./1/ 94,531 1,368,809 W-H Energy Services Inc./1/ 76,879 1,368,446 Littelfuse Inc./1/ 59,481 1,368,063 K-Swiss Inc. Class A 37,965 1,366,360 Veeco Instruments Inc./1/ 68,375 1,364,765 Wausau-Mosinee Paper Corp. 111,543 1,361,940 United Therapeutics Inc./1/ 60,198 1,359,873 Mykrolis Corp./1/ 111,912 1,358,612 Federal Signal Corp. 90,666 1,350,923 ScanSource Inc./1/ 36,942 1,349,861 Umpqua Holdings Corp. 70,465 1,340,949 @Road Inc./1/ 99,262 1,335,074 Sinclair Broadcast Group Inc. Class A/1/ 131,310 1,334,110 Multimedia Games Inc./1/ 36,661 1,334,094 SafeNet Inc./1/ 36,861 1,331,788 Plexus Corp./1/ 85,611 1,330,395 PracticeWorks Inc./1/ 61,472 1,319,804 Identix Inc./1/ 251,605 1,315,894 Tuesday Morning Corp./1/ 47,254 1,315,079 Electronics Boutique Holdings Corp./1/ 45,955 1,312,934 Remington Oil & Gas Corp./1/ 72,314 1,312,499 Harmonic Inc./1/ 209,113 1,311,139 Impax Laboratories Inc./1/ 104,650 1,309,171 Ferro Corp. 61,245 1,308,193 Intuitive Surgical Inc./1/ 78,152 1,303,575 Hooper Holmes Inc. 196,009 1,303,460 SurModics Inc./1/ 48,275 1,295,701 Secure Computing Corp./1/ 110,311 1,288,432 CARBO Ceramics Inc. 35,502 1,283,752 Selective Insurance Group Inc. 43,124 1,283,370 Wolverine World Wide Inc. 65,901 1,278,479 Advent Software Inc./1/ 79,333 1,276,468 Choice Hotels International Inc./1/ 43,934 1,274,965 Pre-Paid Legal Services Inc./1/ 54,332 1,272,455 Suffolk Bancorp 38,169 1,270,646 R&G Financial Corp. Class B 43,221 1,262,053 Merit Medical Systems Inc./1/ 57,077 1,261,402 webMethods Inc./1/ 157,915 1,260,162 iDine Rewards Network Inc./1/ 77,416 1,258,010 Global Imaging Systems Inc./1/ 51,096 1,256,962 Cabot Oil & Gas Corp. 48,340 1,256,840 Retek Inc./1/ 185,982 1,255,378 aQuantive, Inc./1/ 135,513 1,254,850 Corixa Corp./1/ 157,152 1,250,930 Mindspeed Technologies Inc./1/ 231,744 1,249,100 VistaCare Inc. Class A/1/ 39,747 1,244,081 76 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Kos Pharmaceuticals Inc./1/ 36,007 $ 1,238,641 Chateau Communities Inc. 41,549 1,236,498 CTI Molecular Imaging Inc./1/ 83,529 1,233,723 NetFlix Inc./1/ 36,614 1,230,597 Cell Therapeutics Inc./1/ 107,801 1,225,697 Manufactured Home Communities Inc. 31,169 1,221,201 Exelixis Inc./1/ 169,668 1,211,430 Kyphon Inc./1/ 62,039 1,209,760 Credence Systems Corp./1/ 104,841 1,205,671 Opsware Inc./1/ 164,966 1,204,252 PTEK Holdings Inc./1/ 147,186 1,199,566 Harbor Florida Bancshares Inc. 44,972 1,198,954 Salix Pharmaceuticals Ltd./1/ 62,048 1,195,044 SciClone Pharmaceuticals Inc./1/ 151,043 1,193,240 CoStar Group Inc./1/ 45,872 1,192,672 Immucor Inc./1/ 44,090 1,188,226 S&T Bancorp Inc. 41,625 1,186,312 Penwest Pharmaceuticals Co./1/ 55,160 1,185,940 Powerwave Technologies Inc./1/ 179,059 1,185,371 Golden Telecom Inc./1/ 43,275 1,183,138 ESCO Technologies Inc./1/ 26,099 1,181,502 Trimeris Inc./1/ 46,916 1,180,876 WMS Industries Inc./1/ 52,069 1,179,884 WD-40 Co. 37,221 1,179,533 CSK Auto Corp./1/ 76,341 1,177,178 TIBCO Software Inc./1/ 219,849 1,176,192 Rollins Inc. 65,854 1,174,835 Wireless Facilities Inc./1/ 98,713 1,174,685 Lone Star Technologies Inc./1/ 86,903 1,172,321 Epicor Software Corp./1/ 130,750 1,168,905 Exar Corp./1/ 82,414 1,164,510 Echelon Corp./1/ 97,659 1,162,142 Vector Group Ltd. 80,523 1,159,530 Mediacom Communications Corp./1/ 173,018 1,159,221 StarTek Inc. 36,214 1,158,848 Champion Enterprises Inc./1/ 180,619 1,146,931 Westell Technologies Inc. Class A/1/ 152,990 1,145,895 Bombay Co. Inc. (The)/1/ 116,034 1,142,935 Intrado Inc./1/ 49,929 1,137,383 ManTech International Corp. Class A/1/ 45,699 1,136,991 Charter Municipal Mortgage Acceptance Co. 61,830 1,136,435 Axcelis Technologies Inc./1/ 136,821 1,130,141 FuelCell Energy Inc./1/ 96,069 1,124,007 Old Dominion Freight Line Inc./1/ 38,529 1,120,809 OraSure Technologies Inc./1/ 117,937 1,120,401 City Holding Co. 33,661 1,117,545 Speedway Motorsports Inc. 37,757 1,114,209 InfoSpace Inc./1/ 54,568 1,113,733 Glimcher Realty Trust 52,603 1,108,345 Stratex Networks Inc./1/ 286,470 1,102,910 Transmeta Corp./1/ 393,303 1,101,248 autobytel.com Inc./1/ 115,152 1,096,247 SRA International Inc. Class A/1/ 29,262 1,095,277 Advanced Energy Industries Inc./1/ 57,988 1,094,234 ArthroCare Corp./1/ 61,257 1,091,600 Kaydon Corp. 45,930 1,090,378 Fidelity National Information Solutions Inc./1/ 43,819 1,088,902 Sterling Bancshares Inc. 91,072 1,086,489 Oriental Financial Group Inc. 44,771 1,086,144 Frontier Oil Corp. 73,808 1,084,978 Portfolio Recovery Associates Inc./1/ 42,642 1,083,960 Silicon Image Inc./1/ 239,727 1,081,169 Genesis Microchip Inc./1/ 95,712 1,072,932 ScanSoft Inc./1/ 256,016 1,072,707 Myriad Genetics Inc./1/ 93,223 1,059,013 InVision Technologies Inc./1/ 43,366 1,055,528 Immunomedics Inc./1/ 144,155 1,055,215 Main Street Banks Inc. 42,117 1,055,031 InterVoice-Brite Inc./1/ 117,636 1,051,666 CKE Restaurant Inc./1/ 162,658 1,049,144 St. Mary Land & Exploration Co. 41,192 1,042,981 Pegasus Solutions Inc./1/ 75,413 1,042,962 Forward Air Corp./1/ 37,675 1,041,714 Therasense Inc./1/ 83,202 1,039,193 Planar Systems Inc./1/ 48,327 1,036,614 SpectraLink Corp./1/ 55,391 1,034,704 SCHEDULES OF INVESTMENTS 77 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- TALK America Holdings Inc./1/ 90,454 $ 1,032,080 Harris Interactive Inc./1/ 146,500 1,031,360 Viasat Inc./1/ 57,876 1,030,772 Joy Global Inc./1/ 65,382 1,026,497 SeaChange International Inc./1/ 81,917 1,026,420 Pixelworks Inc./1/ 118,943 1,025,289 Alaris Medical Systems Inc./1/ 61,663 1,023,606 Biosite Inc./1/ 36,060 1,023,383 Artisan Components Inc./1/ 60,858 1,023,023 Royal Gold Inc. 55,643 1,018,267 WilTel Communications Inc./1/ 63,543 1,015,417 Mesa Air Group Inc./1/ 91,160 1,011,876 Aaron Rents Inc. 48,259 1,011,026 Able Laboratories Inc./1/ 53,495 1,010,521 Coinstar Inc./1/ 74,929 1,007,795 REMEC Inc./1/ 98,608 1,005,802 U.S.I. Holdings Corp./1/ 77,187 1,004,203 Hecla Mining Co./1/ 191,431 1,003,098 Isis Pharmaceuticals Inc./1/ 153,632 1,001,681 Newpark Resources Inc./1/ 232,129 998,155 California Pizza Kitchen Inc./1/ 57,333 997,594 FreeMarkets Inc./1/ 128,095 996,707 United Stationers Inc./1/ 26,376 993,848 Old Second Bancorp Inc. 23,104 993,472 ICU Medical Inc./1/ 36,510 993,437 TALX Corp. 40,057 986,203 SonoSite Inc./1/ 49,187 984,232 Ciphergen Biosystems Inc./1/ 78,759 972,674 ChipPAC Inc. Class A/1/ 164,954 971,579 AC Moore Arts & Crafts Inc./1/ 43,439 967,821 Avanex Corp./1/ 199,337 966,784 Sandy Spring Bancorp Inc. 29,675 965,031 Corvis Corp./1/ 747,281 963,992 Encysive Pharmaceuticals Inc./1/ 152,757 963,897 Hydril Co./1/ 47,563 963,626 Packeteer Inc./1/ 79,810 961,710 Independent Bank Corp. (Massachusetts) 37,523 960,964 Sapient Corp./1/ 266,767 957,694 Orbital Sciences Corp./1/ 103,169 957,408 SupportSoft Inc./1/ 85,385 955,458 West Bancorporation 55,401 952,897 Aksys Ltd./1/ 95,158 950,628 Quicksilver Resources Inc./1/ 38,721 945,954 Verity Inc./1/ 72,318 945,196 Penn Virginia Corp. 21,342 943,316 Zoll Medical Corp./1/ 29,381 941,661 Palm Inc./1/ 48,020 938,791 7-Eleven Inc./1/ 68,280 937,484 Concur Technologies Inc./1/ 79,005 936,999 Comtech Telecommunications Corp./1/ 39,151 936,100 ValueVision Media Inc. Class A/1/ 58,442 929,812 Spanish Broadcasting System Inc. Class A/1/ 109,389 929,807 Serologicals Corp./1/ 70,692 929,600 Exult Inc./1/ 115,369 927,567 Perrigo Co. 72,846 927,330 Ameristar Casinos Inc./1/ 36,996 926,380 Kelly Services Inc. Class A 37,087 924,950 Interpore International/1/ 60,052 922,399 Bowne & Co. Inc. 61,509 919,560 Neoware Systems Inc./1/ 53,290 909,660 Tyler Technologies Inc./1/ 128,432 909,299 Saga Communications Inc./1/ 46,893 907,380 Hibbet Sporting Goods Inc./1/ 37,681 901,330 Wind River Systems Inc./1/ 158,138 899,805 Discovery Laboratories Inc./1/ 123,484 889,085 Franklin Electric Co. Inc. 15,950 888,096 Frontier Financial Corp. 29,526 882,827 Netegrity Inc./1/ 88,157 882,452 Altiris Inc./1/ 33,561 881,983 Aspect Communications Corp./1/ 105,877 881,955 Sports Authority Inc. (The)/1/ 27,947 879,213 North Pittsburgh Systems Inc. 51,753 876,178 Papa John's International Inc./1/ 35,145 871,947 Mattson Technology Inc./1/ 96,060 870,304 Bay View Capital Corp./1/ 142,532 865,169 Nabi Biopharmaceuticals/1/ 102,604 864,952 Plains Resource Inc./1/ 69,369 863,644 Keystone Automotive Industries Inc./1/ 39,656 860,535 78 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Wild Oats Markets Inc./1/ 78,622 $ 859,338 New Jersey Resources Corp. 23,810 858,112 Ixia/1/ 79,253 857,438 Gentiva Health Services Inc./1/ 74,463 856,324 Oakley Inc./1/ 85,627 856,270 KVH Industries Inc./1/ 33,524 845,140 Possis Medical Inc./1/ 54,012 842,587 National Penn Bancshares Inc. 30,473 842,585 TiVo Inc./1/ 113,516 841,154 Peregrine Pharmaceuticals Inc./1/ 389,480 837,382 Drugstore.com Inc./1/ 109,268 835,900 Antigenics Inc./1/ 68,120 831,064 SuperGen Inc./1/ 110,304 828,383 Verso Technologies Inc./1/ 223,862 828,289 Synovis Life Technologies Inc./1/ 33,824 826,997 LookSmart Ltd./1/ 263,162 826,329 Molecular Devices Corp./1/ 47,415 825,969 aaiPharma Inc./1/ 48,243 825,438 Lionbridge Technologies Inc./1/ 109,503 822,368 Stratasys Inc./1/ 19,191 817,920 Activision Inc./1/ 67,868 811,023 Concurrent Computer Corp./1/ 213,896 810,666 Omnicell Inc./1/ 49,848 809,532 eCollege.com Inc./1/ 40,136 808,339 Westcorp Inc. 23,110 807,695 Applied Films Corporation/1/ 27,108 805,921 Mueller Industries Inc./1/ 31,655 805,620 CTS Corp. 65,289 803,708 Steel Dynamics Inc./1/ 53,062 803,359 Xicor Inc./1/ 86,408 802,730 Trex Co. Inc./1/ 25,806 801,276 Noven Pharmaceuticals Inc./1/ 70,074 798,844 Alabama National Bancorp 16,810 798,475 Hancock Fabrics Inc. 50,586 798,247 CorVel Corp./1/ 22,442 797,813 Tejon Ranch Co./1/ 23,927 796,769 Inverness Medical Innovations Inc./1/ 31,344 796,138 MB Financial Inc. 17,858 792,895 Conceptus Inc./1/ 60,432 791,659 MRO Software Inc./1/ 57,962 791,181 X-Rite Inc. 69,850 790,702 Oil States International Inc./1/ 62,244 789,876 Excel Technology Inc./1/ 31,537 788,425 Daktronics Inc./1/ 48,990 784,330 PrivateBancorp Inc. 23,625 782,224 MBT Financial Corp. 50,020 780,312 Prima Energy Corp./1/ 30,870 779,468 Charles River Associates Inc./1/ 27,313 779,240 Arch Coal Inc. 35,081 779,149 Rayovac Corp./1/ 53,276 777,830 Presstek Inc./1/ 105,305 777,046 Silgan Holdings Inc./1/ 24,271 776,672 Republic Bancorp Inc. 58,160 774,691 Linens 'N Things Inc./1/ 32,514 773,183 Palm Harbor Homes Inc./1/ 45,114 772,803 Casual Male Retail Group Inc./1/ 104,221 770,193 Komag Inc./1/ 43,926 769,584 Sterling Bancorp (New York) 28,587 769,276 Red Robin Gourmet Burgers/1/ 30,166 768,026 infoUSA Inc./1/ 101,920 765,419 Right Management Consultants Inc./1/ 42,178 762,578 Bradley Pharmaceuticals Inc./1/ 27,968 762,128 Manugistics Group Inc./1/ 139,072 762,115 Holly Corp. 30,648 759,457 Standard Microsystems Corp./1/ 28,019 755,953 Hanover Compressor Co./1/ 76,221 754,588 II-VI Inc./1/ 37,728 754,183 Epix Medical Inc./1/ 44,122 750,956 Rainbow Technologies Inc./1/ 82,037 749,818 Arrow Financial Corp. 28,824 749,418 Bank of the Ozarks Inc. 16,744 745,275 Sharper Image Corp./1/ 32,290 744,607 EPIQ Systems Inc./1/ 43,889 744,357 Cirrus Logic Inc./1/ 134,415 743,315 Citizens Inc./1/ 92,209 742,282 BioLase Technology Inc./1/ 65,029 741,981 PennRock Financial Services Corp. 26,293 741,463 Ceradyne Inc./1/ 28,559 738,821 Cardiac Science Inc./1/ 177,485 738,338 SCHEDULES OF INVESTMENTS 79 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Concord Communications Inc./1/ 56,390 $ 738,145 Getty Realty Corp. 30,087 737,131 Cascade Bancorp 43,347 736,899 USANA Health Sciences Inc./1/ 15,238 735,234 DOV Pharmaceutical Inc./1/ 40,882 733,832 World Fuel Services Corp. 26,126 733,357 FalconStor Software Inc./1/ 117,145 733,328 Midwest Banc Holdings Inc. 32,946 732,390 Finisar Corp./1/ 325,096 731,466 MatrixOne Inc./1/ 148,259 730,917 Federal Agricultural Mortgage Corp./1/ 27,014 729,378 Intermagnetics General Corp./1/ 32,612 729,204 General Cable Corp./1/ 91,544 728,690 Rudolph Technologies Inc./1/ 37,652 727,060 Regeneration Technologies Inc./1/ 80,335 727,032 Superconductor Technologies Inc./1/ 184,977 726,960 Lindsay Manufacturing Co. 36,091 725,429 Peapack-Gladstone Financial Corp. 23,310 724,245 Ariad Pharmaceuticals Inc./1/ 120,238 723,833 PC-Tel Inc./1/ 67,760 722,999 Alexander's Inc./1/ 6,826 720,143 FindWhat.com/1/ 41,654 719,781 Bentley Pharmaceuticals Inc./1/ 44,271 719,404 Landauer Inc. 20,253 717,564 O'Charley's Inc./1/ 48,338 716,853 TriZetto Group Inc. (The)/1/ 106,823 715,714 Cubist Pharmaceuticals Inc./1/ 66,295 715,323 Centillium Communications Inc./1/ 101,135 715,024 SPSS Inc./1/ 42,331 714,124 Joseph A. Bank Clothiers Inc./1/ 16,217 713,061 Sonic Solutions Inc./1/ 51,142 712,408 i-STAT Corp./1/ 53,081 709,693 CIBER Inc./1/ 93,331 709,316 Peet's Coffee & Tea Inc./1/ 36,271 709,098 Electronics For Imaging Inc./1/ 30,394 708,788 Cubic Corp. 28,161 707,404 White Electronic Designs Corp./1/ 65,716 706,447 Korn/Ferry International/1/ 85,397 704,525 Entrust Inc./1/ 142,974 702,002 La Jolla Pharmaceutical Co./1/ 177,335 700,473 Crown American Realty Trust 58,670 698,173 World Acceptance Corp./1/ 51,497 697,784 Indevus Pharmaceuticals Inc./1/ 129,719 693,997 Libbey Inc. 24,898 692,413 Palatin Technologies Inc./1/ 144,163 691,982 Transkaryotic Therapies Inc./1/ 66,083 690,567 AnnTaylor Stores Corp./1/ 21,432 688,824 Iomega Corp./1/ 61,612 686,358 Tollgrade Communications Inc./1/ 42,611 684,759 Zenith National Insurance Corp. 24,591 684,122 Jill (J.) Group Inc. (The)/1/ 59,455 683,732 Sound Federal Bancorp Inc. 45,665 683,605 MTR Gaming Group Inc./1/ 78,532 680,872 Exact Sciences Corp./1/ 50,417 680,629 Lightbridge Inc./1/ 71,788 676,961 VitalWorks Inc./1/ 128,802 676,211 21st Century Insurance Group 48,990 675,082 Children's Place Retail Stores Inc. (The)/1/ 39,288 673,789 NeoPharm Inc./1/ 44,911 673,665 Euronet Worldwide Inc./1/ 55,112 670,162 Quantum Corp./1/ 217,398 669,586 Nautilus Group Inc. (The) 52,754 665,755 American West Holdings Corp. Class B/1/ 68,171 663,304 TriPath Imaging Inc./1/ 76,178 662,749 Cable Design Technologies Corp./1/ 82,526 660,208 Staar Surgical Co./1/ 61,973 657,534 Pacific Northwest Bancorp 18,341 653,857 Monolithic System Technology Inc./1/ 77,739 653,785 Hollis-Eden Pharmaceuticals/1/ 26,704 650,509 Microsemi Corp./1/ 42,247 643,844 Zymogenetics Inc./1/ 43,772 641,260 Shore Bancshares Inc. 18,490 639,569 TTM Technologies Inc./1/ 44,747 638,987 Isle of Capri Casinos Inc./1/ 32,161 637,109 Otter Tail Corp. 24,365 636,901 Haemonetics Corp./1/ 26,896 635,015 80 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Innovex Inc./1/ 63,421 $ 631,039 SY Bancorp Inc. 33,612 630,225 Mobile Mini Inc./1/ 32,658 629,973 Quidel Corp./1/ 93,572 627,868 Forrester Research Inc./1/ 43,796 627,597 Proxim Corp. Class A/1/ 419,387 624,887 Renaissance Learning Inc./1/ 26,473 624,763 Kensey Nash Corp./1/ 26,534 623,018 C-COR.net Corp./1/ 94,155 621,423 Big 5 Sporting Goods Corp./1/ 40,324 616,151 Playboy Enterprises Inc. Class B/1/ 42,192 613,894 Orthologic Corp./1/ 113,896 612,760 Central Pacific Financial Corp. 24,999 612,475 Central European Distribution Corp./1/ 22,302 609,960 Gevity HR Inc. 41,545 609,881 American Home Mortgage Holdings Inc. 34,707 609,802 Pumatech Inc./1/ 127,810 608,376 Synaptics Inc./1/ 56,346 606,283 Integral Systems Inc./1/ 33,510 605,526 Applied Signal Technology Inc. 30,171 601,911 Administaff Inc./1/ 67,663 601,524 Oplink Communications Inc./1/ 237,603 601,136 Computer Network Technology Corp./1/ 69,175 600,439 Mercantile Bank Corp. 18,026 598,463 LabOne Inc./1/ 25,530 595,615 Kirkland's Inc./1/ 37,080 594,392 Bei Technologies Inc. 38,049 593,564 MAPICS Inc./1/ 60,416 593,285 GameStop Corp./1/ 37,137 590,478 Gladstone Capital Corp. 30,210 587,584 Net.B@nk Inc. 46,806 582,735 Prosperity Bancshares Inc. 27,340 582,615 PSS World Medical Inc./1/ 65,543 581,366 Salem Communications Corp. Class A/1/ 29,968 581,080 Inet Technologies Inc./1/ 44,832 580,126 Sturm Ruger & Co. Inc. 56,047 578,405 Vital Images Inc./1/ 30,888 578,223 Chattem Inc./1/ 41,354 573,994 Argosy Gaming Co./1/ 23,299 568,496 American Woodmark Corp. 12,673 567,243 Yellow Corp./1/ 18,919 565,300 New Focus Inc./1/ 125,734 564,546 United Industrial Corp. 35,485 564,212 PAREXEL International Corp./1/ 36,825 564,159 United Security Bancshares Inc. 22,232 564,026 Repligen Corp./1/ 104,446 562,964 Virginia Financial Group Inc. 18,705 562,459 Consolidated-Tomoka Land Co. 19,362 561,692 Raven Industries Inc. 22,785 561,650 Closure Medical Corp./1/ 23,016 561,360 PDF Solutions Inc./1/ 49,811 560,374 E-LOAN Inc./1/ 154,271 560,004 Universal Display Corp./1/ 53,756 558,525 Group 1 Software Inc./1/ 31,049 557,951 Concord Camera Corp./1/ 52,277 556,750 SFBC International Inc./1/ 19,511 554,737 Tanger Factory Outlet Centers Inc. 15,078 554,117 Vicor Corp./1/ 58,092 553,617 GulfMark Offshore Inc./1/ 39,213 550,943 Biopure Corp./1/ 84,978 549,808 Keithley Instruments Inc. 38,838 549,558 Boston Communications Group Inc./1/ 55,114 549,542 Young Broadcasting Inc. Class A/1/ 28,044 549,382 Supertex Inc./1/ 30,569 548,408 Capitol Bancorp Ltd. 20,339 544,068 Quixote Corp. 21,564 542,335 Energy Conversion Devices Inc./1/ 51,506 541,328 Alexandria Real Estate Equities Inc. 11,187 537,312 German American Bancorp 30,512 535,791 Siliconix Inc./1/ 10,661 535,609 GSI Commerce Inc./1/ 53,458 533,511 CNB Financial Corp. 12,608 532,688 Gabelli Asset Management Inc. Class A/1/ 14,854 529,694 Sigma Designs Inc./1/ 61,589 529,050 SCHEDULES OF INVESTMENTS 81 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Laserscope/1/ 44,961 $ 528,292 Tennant Co. 14,337 528,175 Learning Tree International Inc./1/ 31,454 527,484 Avant Immunotherapeutics Inc./1/ 217,952 525,264 Group 1 Automotive Inc./1/ 15,188 524,594 Sun Communities Inc. 13,286 523,468 Information Holdings Inc./1/ 26,125 523,284 Diversa Corp./1/ 67,168 520,552 Philadelphia Consolidated Holding Corp./1/ 11,215 518,133 Comstock Resources Inc./1/ 38,775 518,034 CardioDynamics International Corp./1/ 115,037 516,516 Provident Bancorp Inc. 12,287 516,300 West Marine Inc./1/ 27,048 515,264 Lifeline Systems Inc./1/ 16,332 515,111 CPI Corp. 27,952 514,317 Horizon Organic Holding Corp./1/ 21,469 513,968 Universal Electronics Inc./1/ 44,641 513,372 Symmetricom Inc./1/ 80,909 512,154 Curative Health Services Inc./1/ 28,572 510,582 Darling International Inc./1/ 192,588 510,358 American Medical Security Group Inc./1/ 25,087 509,517 SS&C Technologies Inc. 25,446 508,666 Kenneth Cole Productions Class A 19,464 508,205 Cleveland-Cliffs Inc./1/ 19,775 506,240 Steak n Shake Company (The)/1/ 33,942 505,736 First Busey Corp. Class A 19,519 503,590 Mid Atlantic Realty Trust 23,954 503,034 Cepheid Inc./1/ 107,512 502,081 CCC Information Services Group Inc./1/ 29,918 501,426 U.S. Physical Therapy Inc./1/ 40,912 500,395 Fargo Electronics/1/ 39,656 499,666 Syntel Inc. 21,901 499,562 First Bancorp (North Carolina) 17,828 499,362 IXYS Corp./1/ 53,053 497,107 Nara Bancorp Inc. 28,850 494,200 CuraGen Corp./1/ 97,673 491,295 Sanderson Farms Inc. 15,614 491,216 CompuCredit Corp./1/ 28,004 490,070 Duane Reade Inc./1/ 30,701 489,681 Luminex Corp./1/ 72,339 488,288 Triarc Companies Inc. Class B 46,949 488,270 1-800-FLOWERS.COM Inc./1/ 64,749 486,912 Kosan Biosciences Inc./1/ 61,106 486,404 Overland Storage Inc./1/ 32,974 486,366 Plains Exploration & Production Co./1/ 38,873 484,746 Regent Communications Inc./1/ 79,374 484,181 SM&A/1/ 41,908 483,199 Western Sierra Bancorp/1/ 13,502 482,697 Option Care Inc./1/ 40,161 482,334 Greene County Bancshares Inc. 20,223 482,319 Warwick Valley Telephone Co. 6,184 482,290 Nu Skin Enterprises Inc. Class A 37,757 481,402 Progenics Pharmaceuticals Inc./1/ 27,882 480,128 Hickory Tech Corp. 41,874 479,457 Embarcadero Technologies Inc./1/ 47,698 478,888 Integrated Electrical Services Inc./1/ 69,290 478,101 MIM Corp./1/ 63,633 477,247 Pain Therapeutics Inc./1/ 77,438 476,244 TRC Companies Inc./1/ 28,879 475,348 Yadkin Valley Bank & Trust Co. 26,985 474,936 AsiaInfo Holdings Inc./1/ 70,427 474,678 Macatawa Bank Corp. 20,408 472,649 Digimarc Corp./1/ 32,118 472,456 Glacier Bancorp Inc. 17,207 471,988 Fisher Communications Inc./1/ 9,994 471,217 OPNET Technologies Inc./1/ 37,688 470,346 Audiovox Corp. Class A/1/ 37,211 469,975 OshKosh B'Gosh Inc. Class A 18,249 469,364 Genesee & Wyoming Inc. Class A/1/ 19,793 469,292 Accredited Home Lenders Holding Co./1/ 21,554 467,937 Genencor International Inc./1/ 29,591 464,283 Heidrick & Struggles International Inc./1/ 27,371 463,391 82 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- VIVUS Inc./1/ 132,235 $ 462,823 Datastream Systems Inc./1/ 59,597 461,877 Anaren Inc./1/ 36,107 460,725 HealthExtras Inc./1/ 53,416 459,912 MTC Technologies Inc./1/ 19,814 459,685 Warnaco Group Inc. (The)/1/ 29,479 459,578 Penns Woods Bancorp Inc. 10,505 459,279 Verint Systems Inc./1/ 21,370 457,318 Quality Systems Inc./1/ 11,308 454,582 Overstock.com Inc./1/ 30,458 453,581 Cherokee Inc./1/ 21,289 451,327 McGrath Rentcorp 16,143 451,197 Hexcel Corp./1/ 76,436 450,972 Young Innovations Inc. 14,065 450,221 IBT Bancorp Inc. 9,020 450,188 Kadant Inc./1/ 23,405 448,440 TradeStation Group Inc./1/ 59,904 447,603 Gibraltar Steel Corp. 20,302 447,456 Bioreliance Corp./1/ 17,425 445,383 GrafTech International Ltd./1/ 55,577 444,616 Aspen Technology Inc./1/ 113,970 444,483 Del Laboratories Inc./1/ 15,699 443,497 Seattle Genetics Inc./1/ 72,727 441,453 Courier Corp. 8,651 440,422 Bebe Stores Inc./1/ 16,205 439,155 Chicago Pizza & Brewery Inc./1/ 37,268 437,899 PEC Solutions Inc./1/ 29,574 436,512 A.S.V. Inc./1/ 22,801 435,271 Stoneridge Inc./1/ 29,520 434,239 BroadVision Inc./1/ 88,505 433,940 Osteotech Inc./1/ 52,797 432,407 CoBiz Inc. 26,969 432,313 America's Car-Mart Inc./1/ 14,427 432,089 Mothers Work Inc./1/ 14,190 430,666 Drexler Technology Corp./1/ 30,678 430,106 Coca-Cola Bottling Co. Consolidated 8,557 429,134 Party City Corp./1/ 34,652 428,992 Aceto Corp. 30,619 428,666 SeeBeyond Technology Corp./1/ 166,291 425,705 Charter Financial Corp. 13,684 422,151 Connecticut Bankshares Inc. 8,231 421,839 Cross Country Healthcare Inc./1/ 29,929 421,700 Blue Rhino Corp./1/ 37,767 418,458 Medis Technologies Ltd./1/ 40,805 415,803 C&D Technologies Inc. 21,942 415,143 Quaker Chemical Corp. 17,833 414,796 Plug Power Inc./1/ 80,095 412,569 Barnes Group Inc. 15,863 411,803 SAFLINK Corp./1/ 89,416 411,314 Bone Care International Inc./1/ 32,245 410,156 Keynote Systems Inc./1/ 35,197 410,045 Playtex Products Inc./1/ 68,751 409,756 Standard Commercial Corp. 22,072 406,125 Heritage Financial Corp. 18,643 406,045 Hi-Tech Pharmacal Co./1/ 17,274 405,421 Commercial Capital Bancorp Inc./1/ 25,848 404,004 WatchGuard Technologies Inc./1/ 75,384 403,304 Resource Bankshares Corp. 13,780 401,549 Coldwater Creek Inc./1/ 40,625 398,938 InteliData Technologies Corp./1/ 168,900 398,604 KCS Energy Inc./1/ 58,597 398,460 Interwoven Inc./1/ 149,777 396,909 Lithia Motors Inc. Class A 19,869 396,784 Ocular Sciences Inc./1/ 17,776 396,049 Register.com/1/ 87,738 395,698 Research Frontiers Inc./1/ 34,497 395,646 Drew Industries Inc./1/ 21,341 395,022 Ulticom Inc./1/ 37,501 394,886 Arris Group Inc./1/ 68,016 391,092 Lakeland Bancorp Inc. 24,456 390,066 Vastera Inc./1/ 75,786 389,540 JNI Corp./1/ 55,982 389,075 Digitas Inc./1/ 53,503 388,432 First Financial Holdings Inc. 12,871 388,189 Covenant Transport Inc. Class A/1/ 21,054 387,394 FFLC Bancorp Inc. 13,343 387,347 Capital City Bank Group Inc. 10,126 386,408 QAD Inc./1/ 35,208 385,880 Computer Programs & Systems Inc. 21,402 385,878 ON Semiconductor Corp./1/ 96,162 384,648 SCHEDULES OF INVESTMENTS 83 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- P.A.M. Transportation Services Inc./1/ 18,666 $ 383,026 Insight Enterprises Inc./1/ 25,087 381,824 IMPAC Medical Systems Inc./1/ 21,262 380,377 Strattec Security Corp./1/ 7,967 379,707 Savient Pharmaceuticals Inc./1/ 74,975 378,624 Ryerson Tull Inc. 48,488 378,206 THQ Inc./1/ 23,004 377,726 NIC Inc./1/ 79,891 376,287 Source Interlink Companies Inc./1/ 39,838 374,477 SureBeam Corporation Class A/1/ 260,078 371,912 MedQuist Inc./1/ 19,189 371,499 1-800 CONTACTS INC./1/ 18,394 371,191 AVI BioPharma Inc./1/ 71,361 368,936 Nuvelo Inc./1/ 140,594 368,356 Aaon Inc./1/ 22,394 367,709 Nassda Corp./1/ 46,669 367,285 Aphton Corp./1/ 65,342 366,569 Coastal Financial Corp. 26,178 366,227 Gulf Island Fabrication Inc./1/ 24,292 365,352 Tompkins Trustco Inc. 7,982 365,177 York International Corp. 10,556 365,132 Gartner Inc. Class A/1/ 33,061 364,332 Radiant Systems Inc./1/ 58,034 363,293 LodgeNet Entertainment Corp./1/ 23,403 362,746 NYFIX Inc./1/ 64,696 362,298 First Community Bancshares Inc. 10,244 360,794 Virginia Commerce Bancorp Inc./1/ 16,433 358,568 Summit America Television Inc./1/ 122,841 357,467 Cholestech Corp./1/ 46,913 356,539 Lannett Co. Inc./1/ 20,262 354,382 OSI Systems Inc./1/ 20,467 354,079 Princeton Review Inc. (The)/1/ 54,986 353,560 Net2Phone Inc./1/ 55,968 353,158 Dynacq International Inc./1/ 19,500 352,755 Raindance Communications Inc./1/ 127,144 350,917 Anixter International Inc./1/ 15,402 350,704 Sensient Technologies Corp. 16,653 349,713 Franklin Financial Corp. 11,309 349,561 Medical Action Industries Inc./1/ 26,793 348,845 Dendreon Corp./1/ 39,266 347,504 Bank Mutual Corp. 8,157 346,265 CryoLife Inc./1/ 56,178 346,056 Paxson Communications Corp./1/ 69,545 344,943 First South Bancorp Inc. 10,644 342,205 SkyWest Inc. 19,713 341,429 Connecticut Water Service Inc. 12,597 339,993 Washington Trust Bancorp Inc. 14,136 339,405 Allscripts Healthcare Solutions Inc./1/ 83,138 339,203 Durect Corp./1/ 100,904 339,037 Candela Corp./1/ 26,536 338,599 Triton PCS Holdings Inc. Class A/1/ 75,889 338,465 Zale Corp./1/ 7,544 335,029 RPC Inc. 33,474 334,740 JDA Software Group Inc./1/ 22,510 334,724 CyberGuard Corp./1/ 35,121 334,001 Exactech Inc./1/ 20,418 333,834 First Federal Financial of Kentucky 10,858 332,798 Tellium Inc./1/ 242,312 331,967 Network Equipment Technologies Inc./1/ 36,176 331,010 Quaker City Bancorp Inc. 8,250 330,000 Great Southern Bancorp Inc. 8,477 329,925 KFx Inc./1/ 65,586 329,242 Aspect Medical Systems Inc./1/ 31,949 328,116 TeleTech Holdings Inc./1/ 51,589 327,590 LNB Bancorp Inc. 16,156 326,028 Impac Mortgage Holdings Inc. 19,970 323,314 Weyco Group Inc. 6,487 321,042 National Healthcare Corp./1/ 22,458 320,700 Seacoast Banking Corp. of Florida 18,384 319,882 Vitria Technology Inc./1/ 63,248 319,402 First Citizens Banc Corp. 12,024 318,636 Manitowoc Co. Inc. (The) 14,674 318,279 Shenandoah Telecommunications Co. 8,253 318,153 Newport Corp./1/ 22,381 315,572 Cantel Medical Corp./1/ 23,468 313,063 84 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- EDO Corp. 15,412 $ 312,093 DigitalThink Inc./1/ 121,238 311,582 Kana Software Inc./1/ 79,406 311,272 Bryn Mawr Bank Corp. 7,291 306,951 RC2 Corp./1/ 15,926 305,938 Ambassadors Group Inc./1/ 17,944 305,227 Park Electrochemical Corp. 13,348 303,667 DHB Industries Inc./1/ 69,641 302,938 First Financial Bankshares Inc. 8,192 302,776 California Water Service Group 11,711 302,261 Westmoreland Coal Co./1/ 21,510 301,785 Armor Holdings Inc./1/ 17,976 301,098 Tredegar Corp. 19,838 298,562 Arena Pharmaceuticals Inc./1/ 41,407 298,130 SBA Communications Corp./1/ 93,118 297,978 PDI Inc./1/ 12,137 297,599 Cavalry Bancorp Inc. 17,688 296,274 Briggs & Stratton Corp. 5,040 296,150 Cole National Corp./1/ 23,765 296,112 Nelson (Thomas) Inc./1/ 21,385 295,327 GB&T Bancshares Inc. 13,263 295,234 Abgenix Inc./1/ 20,300 294,147 Diodes Inc./1/ 14,257 293,552 First Horizon Pharmaceutical Corp./1/ 45,761 292,870 iPayment Holdings Inc./1/ 12,849 292,443 Sonic Automotive Inc. 12,126 291,752 Marine Products Corp. 19,697 289,940 Men's Wearhouse Inc. (The)/1/ 11,293 289,665 United Mobile Homes Inc. 19,189 289,178 Columbia Bancorp 10,786 289,065 Columbia Bancorp (Oregon) 20,044 288,032 Heartland Financial USA Inc. 10,346 287,619 Lydall Inc./1/ 23,936 287,471 CollaGenex Pharmaceuticals Inc./1/ 26,439 283,690 Flag Financial Corp. 21,214 283,631 New England Business Service Inc. 10,601 282,199 Hudson Highland Group Inc./1/ 14,577 280,461 Kirby Corp./1/ 9,657 277,156 E.piphany Inc./1/ 55,127 275,084 Specialty Laboratories Inc./1/ 21,061 274,846 Reading International Inc. Class A/1/ 47,708 272,413 Bankrate Inc./1/ 19,370 271,567 CDI Corp. 10,004 270,408 Boston Beer Co. Inc. Class A/1/ 16,976 270,258 Great Atlantic & Pacific Tea Co./1/ 33,079 268,271 Sierra Bancorp 17,411 267,781 Veritas DGC Inc./1/ 33,523 267,514 Third Wave Technologies Inc./1/ 82,638 266,921 Charlotte Russe Holding Inc./1/ 25,938 266,902 MTS Systems Corp. 17,476 265,985 Three-Five Systems Inc./1/ 47,662 262,618 Atlantic Coast Airlines Holdings Inc./1/ 30,639 260,738 Virage Logic Corp./1/ 34,133 259,411 APAC Customer Services Inc./1/ 103,389 258,472 Maui Land & Pineapple Co. Inc./1/ 9,990 258,341 Metrologic Instruments Inc./1/ 7,153 257,436 Encore Wire Corp./1/ 19,483 257,176 Monro Muffler Brake Inc./1/ 8,684 257,046 Aether Systems Inc./1/ 56,126 256,496 Community Banks Inc. 7,696 254,738 Martha Stewart Living Omnimedia Inc. Class A/1/ 27,497 254,347 OceanFirst Financial Corp. 10,037 251,226 NL Industries Inc. 15,436 251,144 Old Point Financial Corp. 7,992 250,309 Province Healthcare Co./1/ 19,287 249,767 Novoste Corp./1/ 56,347 248,490 C&F Financial Corp. 5,472 247,384 Fremont General Corp. 19,306 245,379 Neoforma Inc./1/ 17,416 244,695 Catapult Communications Corp./1/ 19,424 244,354 Green Mountain Coffee Roasters Inc./1/ 12,205 241,781 Meridian Bioscience Inc. 24,079 241,272 FTD Inc. Class A/1/ 10,602 238,651 Lincoln Electric Holding Inc. 10,716 238,002 Analogic Corp. 4,956 237,888 RehabCare Group Inc./1/ 13,836 235,904 SCHEDULES OF INVESTMENTS 85 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Duratek Inc./1/ 26,307 $ 234,658 Community Bank of Northern Virginia 14,177 234,629 Hypercom Corp./1/ 43,446 234,174 Middlesex Water Co. 9,551 234,095 Cerus Corp./1/ 50,487 233,755 United Security Bancshares 9,255 233,226 DJ Orthopedics Inc./1/ 16,673 232,588 First State Bancorp 7,764 229,892 Medical Staffing Network Holdings Inc./1/ 30,351 229,454 Ansoft Corp./1/ 22,359 229,180 deCODE genetics Inc./1/ 48,539 228,619 Value Line Inc. 4,680 224,640 Pegasystems Inc./1/ 30,713 224,205 MSC.Software Corp./1/ 31,103 223,942 Handspring Inc./1/ 196,520 222,068 RCN Corp./1/ 120,652 222,000 ACLARA BioSciences Inc./1/ 55,908 221,396 Pemstar Inc./1/ 62,141 221,222 United PanAm Financial Corp./1/ 12,679 220,741 Alteon Inc./1/ 116,148 220,681 Virbac Corp./1/ 30,431 220,625 NetScout Systems Inc./1/ 44,122 220,169 ParthusCeva Inc./1/ 25,574 219,681 General Binding Corp./1/ 21,041 218,826 FMS Financial Corp. 13,062 218,788 Acme Communications Inc./1/ 28,831 217,674 Albany International Corp. Class A 7,039 217,083 NBT Bancorp Inc. 10,693 216,533 GTC Biotherapeutics Inc./1/ 69,675 215,992 NN Inc. 16,782 215,817 State Bancorp Inc. 10,829 215,714 Digital Generation Systems Inc./1/ 98,885 215,470 NASB Financial Inc. 6,429 214,793 Bruker BioSciences Corp./1/ 48,529 213,528 Arctic Cat Inc. 11,026 213,133 Interchange Financial Services Corp. 10,374 212,978 Stellent Inc./1/ 26,892 208,682 Northwest Bancorp Inc. 11,211 205,946 Resource America Inc. Class A 17,296 205,476 Valence Technology Inc./1/ 59,975 204,515 Clayton Williams Energy Inc./1/ 10,836 204,259 Methode Electronics Inc. Class A 17,228 203,463 ICT Group Inc./1/ 18,885 202,258 Enstar Group Inc./1/ 5,125 201,156 Stewart & Stevenson Services Inc. 13,389 201,103 Navigators Group Inc./1/ 6,132 200,578 Ultimate Electronics Inc./1/ 21,061 199,869 NBC Capital Corp. 8,239 199,713 Mobius Management Systems Inc./1/ 24,845 199,257 Insituform Technologies Inc. Class A/1/ 11,132 197,704 TheStreet.com Inc./1/ 43,736 196,812 Center Bancorp Inc. 12,213 196,263 Beasley Broadcast Group Inc. Class A/1/ 14,192 196,133 SonicWALL Inc./1/ 33,685 195,036 Woodhead Industries Inc. 12,898 194,115 Albemarle Corp. 7,046 193,413 Standard Register Co. (The) 11,591 192,411 Capital Automotive 6,302 192,274 Smith (A.O.) Corp. 6,769 189,600 Maritrans Inc. 12,582 188,730 Centennial Communications Corp./1/ 36,803 186,959 Neose Technologies Inc./1/ 19,880 185,878 Mail-Well Inc./1/ 52,943 185,300 Adaptec Inc./1/ 24,373 184,260 Sanchez Computer Associates Inc./1/ 47,812 183,598 Arden Group Inc. Class A 2,972 182,778 Micro Therapeutics Inc./1/ 34,216 181,003 Shoe Carnival Inc./1/ 12,655 180,967 Convera Corp./1/ 41,416 180,160 MAXIMUS Inc./1/ 5,175 178,279 Chronimed Inc./1/ 19,400 177,122 Action Performance Companies Inc. 7,245 177,068 86 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Churchill Downs Inc. 4,564 $ 173,341 Ennis Business Forms Inc. 12,889 172,841 Alpharma Inc. Class A 9,284 172,682 School Specialty Inc./1/ 6,073 171,319 Farmers Capital Bank Corp. 5,267 171,072 Advanced Marketing Services Inc. 16,367 167,271 Technitrol Inc./1/ 9,006 165,800 Commercial Bankshares Inc. 5,534 165,799 Summit Bancshares Inc. 5,988 164,670 First Essex Bancorp Inc. 3,219 163,815 FNB Corp. 6,546 163,323 Manufacturers Services Ltd./1/ 32,628 163,140 Gray Television Inc. 13,830 161,534 Synplicity Inc./1/ 27,368 161,471 Eastern Virginia Bankshares 5,752 160,768 McMoRan Exploration Co./1/ 15,224 159,548 Southern Financial Bancorp Inc. 4,003 157,638 Riviana Foods Inc. 5,539 157,308 WESCO International Inc./1/ 29,931 156,539 U.S. Restaurant Properties Inc. 9,585 155,756 Star Scientific Inc./1/ 84,383 153,577 Semitool Inc./1/ 19,200 152,832 Spartech Corp. 7,135 151,976 NetRatings Inc./1/ 16,164 150,859 Alfa Corp. 12,042 150,766 Credit Acceptance Corp./1/ 13,190 149,706 Sun Bancorp Inc. (Pennsylvania) 8,045 148,993 Whitehall Jewellers Inc./1/ 13,284 148,914 Cohu Inc. 7,608 148,812 Security Bank Corp. 5,031 148,414 Schawk Inc. 12,317 146,819 ValueClick Inc./1/ 17,413 146,443 Brookstone Inc./1/ 7,372 146,197 MarketWatch.com Inc./1/ 17,271 144,403 Newtek Business Services Inc./1/ 29,097 143,739 Retractable Technologies Inc./1/ 23,483 143,481 Dover Downs Gaming & Entertainment Inc. 17,322 142,387 Thomas & Betts Corp./1/ 8,981 142,349 NCI Building Systems Inc./1/ 7,138 142,046 Universal Health Realty Income Trust 5,220 141,723 Emerson Radio Corp./1/ 37,291 139,841 CT Communications Inc. 12,241 138,323 Oneida Financial Corp. 5,741 136,751 IHOP Corp. 4,122 135,408 Town & Country Trust (The) 5,717 134,292 Galyan's Trading Co./1/ 13,088 133,628 Liquidmetal Technologies/1/ 42,115 132,662 Trans World Entertainment Corp./1/ 23,424 132,346 EMCOR Group Inc./1/ 3,084 131,224 Sterling Financial Corp. (Pennsylvania) 5,124 130,150 IBERIABANK Corp. 2,463 129,603 D&K Healthcare Resources Inc. 9,085 127,735 Irwin Financial Corp. 5,250 127,575 Nash Finch Co. 8,182 126,821 National Beverage Corp./1/ 8,336 125,874 Center Financial Corp./1/ 6,171 125,333 Offshore Logistics Inc./1/ 6,139 124,622 Firstbank Corp. 3,923 124,359 Carmike Cinemas Inc./1/ 4,631 121,842 Clark Inc./1/ 9,116 121,607 Meritage Corp./1/ 2,550 120,487 Southwest Water Co. 8,557 120,397 SimpleTech Inc./1/ 16,612 118,942 Skechers U.S.A. Inc. Class A/1/ 15,958 118,408 Hain Celestial Group Inc./1/ 6,525 118,298 Modine Manufacturing Co. 4,906 116,763 ActivCard Corp./1/ 14,133 115,891 Clean Harbors Inc./1/ 26,943 114,508 S1 Corp./1/ 22,531 113,782 Nuance Communications Inc./1/ 19,460 112,673 American Management Systems Inc./1/ 8,786 112,021 Vans Inc./1/ 10,272 111,965 USB Holding Co. Inc. 6,337 111,218 Greater Community Bancorp 7,028 111,042 Financial Federal Corp./1/ 3,639 111,026 Hawthorne Financial Corp./1/ 2,734 109,797 SCHEDULES OF INVESTMENTS 87 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Modtech Holdings Inc./1/ 13,608 $ 108,048 GBC Bancorp 2,805 107,572 Hungarian Telephone and Cable Corp./1/ 11,559 106,921 United Capital Corp. 5,934 106,812 AAR Corp./1/ 13,139 105,375 Sykes Enterprises Inc./1/ 15,756 104,305 United Auto Group Inc./1/ 4,509 103,707 Roto-Rooter Inc. 2,910 103,450 First Financial Bancorp 6,953 102,557 HEICO Corp. 7,535 102,476 Sirna Therapeutics Inc./1/ 17,851 102,108 Standard Motor Products Inc. 10,073 101,737 Berry Petroleum Co. Class A 5,462 99,845 SCS Transportation Inc./1/ 6,426 97,033 Gorman-Rupp Co. (The) 4,250 96,092 Genlyte Group Inc. (The)/1/ 2,123 94,516 Saxon Capital Inc./1/ 5,444 93,310 Herley Industries Inc./1/ 5,204 91,174 Artesyn Technologies Inc./1/ 11,839 89,740 Wayne Bancorp Inc. 3,127 89,120 Maxygen Inc./1/ 8,634 88,067 North Coast Energy Inc./1/ 7,027 87,753 ESS Technology Inc./1/ 8,060 86,887 PC Connection Inc./1/ 9,109 85,625 Rofin-Sinar Technologies Inc./1/ 4,044 84,884 RAIT Investment Trust 3,687 84,654 Optical Communication Products Inc./1/ 35,671 84,184 Casella Waste Systems Inc. Class A/1/ 6,694 83,139 Global Power Equipment Group Inc./1/ 15,188 80,041 First Sentinel Bancorp Inc. 4,464 79,861 Foothill Independent Bancorp 3,753 79,751 Bel Fuse Inc. Class B 2,953 78,018 Midway Games Inc./1/ 26,350 77,996 PRG-Schultz International Inc./1/ 13,602 77,259 SBS Technologies Inc./1/ 7,095 76,981 4Kids Entertainment Inc./1/ 3,636 76,720 Elizabeth Arden Inc./1/ 4,578 75,445 Inter Parfums Inc. 7,483 74,830 Genesco Inc./1/ 4,632 74,390 Schweitzer-Mauduit International Inc. 2,903 73,301 Atari Inc./1/ 17,463 71,424 Pegasus Communications Corp./1/ 4,739 70,516 Boyds Collection Ltd. (The)/1/ 15,266 68,850 Matria Healthcare Inc./1/ 3,975 68,608 American Realty Investors Inc./1/ 6,753 67,800 First Albany Companies Inc. 5,256 67,014 Fleetwood Enterprises Inc./1/ 7,203 66,772 Brookfield Homes Corp. 3,546 65,707 Farmer Brothers Co. 199 63,742 Northern States Financial Corp. 2,192 63,152 InterCept Inc./1/ 4,496 61,460 EMS Technologies Inc./1/ 3,608 61,264 First of Long Island Corp. 1,605 60,653 Integrated Defense Technologies Inc./1/ 3,576 60,005 Immunogen Inc./1/ 13,392 59,594 Insurance Auto Auctions Inc./1/ 5,009 56,351 LSI Industries Inc. 3,904 55,007 City Bank 1,579 51,175 Steven Madden Ltd./1/ 2,580 48,943 Sipex Corp./1/ 6,173 48,458 Stanley Furniture Co. Inc. 1,558 47,535 Union Bankshares Corp. 1,543 46,861 World Wrestling Entertainment Inc. 4,649 46,583 Intertan Inc./1/ 4,608 42,163 Tweeter Home Entertainment Group Inc./1/ 5,435 41,741 PAB Bankshares Inc. 3,061 41,415 Mission West Properties Inc. 3,207 39,639 Hanmi Financial Corp. 1,950 38,883 Exchange National Bancshares Inc. 1,047 36,279 Central Coast Bancorp/1/ 2,066 34,895 Deb Shops Inc. 1,867 34,259 Sypris Solutions Inc. 2,391 32,828 Healthcare Services Group Inc. 1,951 32,191 88 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Blount International Inc./1/ 6,685 $ 32,155 National Processing Inc./1/ 1,635 31,588 Independence Holding Co. 1,437 31,255 Technical Olympic USA Inc./1/ 1,129 31,048 Royal Bancshares of Pennsylvania Class A 1,053 28,273 Wilsons The Leather Experts Inc./1/ 3,457 27,621 Sports Resorts International Inc./1/ 5,081 25,811 Crawford & Co. Class B 3,562 25,005 BancTrust Financial Group Inc. 1,655 24,990 Stein Mart Inc./1/ 4,439 24,281 American National Bankshares Inc. 912 22,773 Horizon Offshore Inc./1/ 5,154 21,183 NS Group Inc./1/ 3,178 20,530 Hooker Furniture Corp. 534 18,183 Oak Hill Financial Inc. 620 17,974 Rex Stores Corp./1/ 1,174 15,321 McLeodUSA Inc. Class A/1/ 10,856 15,090 Raytech Corp./1/ 4,167 14,626 Orleans Homebuilders Inc./1/ 694 8,203 TOTAL COMMON STOCKS (Cost: $1,214,674,463) 1,341,214,460 SHORT TERM INVESTMENTS - 24.00% MONEY MARKET FUNDS - 14.38% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares/2/,/3/ 128,153,996 128,153,996 Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares/2/,/3/ 47,186,953 47,186,953 BlackRock Temp Cash Money Market Fund/2/ 2,096,137 2,096,137 Short Term Investment Co. - Liquid Assets Money Market Portfolio/2/ 11,125,458 11,125,458 SHARES OR SECURITY PRINCIPAL VALUE ---------------------------------------------------------------------------- Short Term Investment Co. - Prime Money Market Portfolio, Institutional Shares/2/ 4,289,723 $ 4,289,723 192,852,267 FLOATING RATE NOTES - 5.57% Beta Finance Inc. 1.08%, 05/20/04/2/ $ 2,144,862 2,144,658 1.08%, 09/15/04/2/ 4,289,723 4,289,313 1.17%, 08/23/04/2/ 2,144,862 2,146,508 CC USA Inc. 1.06%, 05/24/04/2/ 4,289,723 4,289,448 1.08%, 04/19/04/2/ 1,887,478 1,887,427 1.12%, 07/15/04/2/ 2,144,862 2,145,470 Dorada Finance Inc. 1.08%, 05/20/04/2/ 4,289,723 4,289,315 1.24%, 08/09/04/2/ 1,072,431 1,072,293 Five Finance Inc. 1.09%, 04/15/04/2/ 2,144,862 2,144,862 HBOS Treasury Services PLC 1.13%, 06/24/08/2/ 4,289,723 4,289,723 Holmes Financing PLC 1.08%, 04/15/04/2/ 857,945 857,945 K2 USA LLC 1.08%, 08/16/04/2/ 1,072,431 1,072,290 1.08%, 09/27/04/2/ 4,632,901 4,632,215 1.09%, 04/13/04/2/ 2,144,862 2,144,806 1.09%, 05/17/04/2/ 2,144,862 2,144,795 Links Finance LLC 1.05%, 07/20/04/2/ 1,715,889 1,715,614 1.08%, 05/04/04/2/ 2,144,862 2,144,799 1.08%, 06/28/04/2/ 2,144,862 2,144,545 1.09%, 03/29/04/2/ 2,144,862 2,144,862 Nationwide Building Society 1.08%, 07/23/04/2/ 3,217,292 3,217,292 Sigma Finance Inc. 1.05%, 07/20/04/2/ 2,144,862 2,144,517 1.07%, 10/15/03/2/ 4,289,723 4,289,707 1.07%, 07/01/04/2/ 2,144,862 2,144,460 1.24%, 08/06/04/2/ 1,072,431 1,072,340 SCHEDULES OF INVESTMENTS 89 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 GROWTH INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE ---------------------------------------------------------------------------- Tango Finance Corp. 1.05%, 07/15/04/2/ $ 1,286,917 $ 1,286,581 1.06%, 07/06/04/2/ 1,286,917 1,286,816 WhistleJacket Capital LLC 1.08%, 09/15/04/2/ 2,144,862 2,144,451 White Pine Finance LLC 1.08%, 05/17/04/2/ 2,573,834 2,573,834 1.08%, 07/06/04/2/ 2,573,834 2,573,645 1.08%, 08/26/04/2/ 2,144,862 2,144,563 1.09%, 04/20/04/2/ 2,144,862 2,144,862 74,723,956 COMMERCIAL PAPER - 2.91% Amsterdam Funding Corp. 1.06%, 10/16/03/2/ 2,037,618 2,036,715 Blue Ridge Asset Funding Corp. 1.05%, 10/17/03/2/ 2,144,862 2,143,861 Edison Asset Securitization 1.07%, 10/23/03/2/ 4,032,340 4,029,703 Gemini Securitization Corp. 1.05%, 10/17/03/2/ 1,501,403 1,500,702 Greenwich Funding Corp. 1.06%, 10/16/03/2/ 2,530,937 2,529,819 Jupiter Securitization Corp. 1.05%, 10/20/03/2/ 2,144,862 2,143,673 New Center Asset Trust 1.06%, 10/22/03/2/ 2,144,862 2,143,535 Park Avenue Receivables Corp. 1.05%, 10/20/03/2/ 2,144,862 2,143,673 Preferred Receivables Funding Corp. 1.06%, 10/08/03/2/ 2,144,862 2,144,419 Receivables Capital Corp. 1.05%, 10/15/03/2/ 1,441,690 1,441,101 Sydney Capital Corp. 1.07%, 10/17/03/2/ 1,737,338 1,736,512 UBS Finance (Delaware) Inc. 1.03%, 10/08/03/2/ 4,289,723 4,288,864 1.05%, 10/15/03/2/ 2,144,862 2,143,986 1.11%, 10/01/03/2/ 8,579,446 8,579,446 39,006,009 TIME DEPOSITS - 0.89% Abbey National Treasury Services PLC 1.15%, 10/01/03/2/ $ 2,144,862 $ 2,144,862 Canadian Imperial Bank of Commerce 1.06%, 10/08/03/2/ 1,072,431 1,072,431 1.08%, 10/30/03/2/ 1,715,889 1,715,889 1.37%, 08/26/04/2/ 4,289,723 4,289,723 Toronto-Dominion Bank 1.33%, 08/23/04/2/ 2,788,320 2,787,065 12,009,970 REPURCHASE AGREEMENTS - 0.25% Lehman Brothers Inc. 1.10%, 10/01/03/2/ 3,431,778 3,431,778 3,431,778 TOTAL SHORT TERM INVESTMENTS (Cost: $322,023,980) 322,023,980 TOTAL INVESTMENTS IN SECURITIES - 123.98% (Cost $1,536,698,443) 1,663,238,440 Other Assets, Less Liabilities - (23.98%) (321,735,306) --------------- NET ASSETS - 100.00% $ 1,341,503,134 =============== /1/ Non-income earning securities. /2/ All or a portion of this security represents investments of securities lending collateral. /3/ Issuer is an affiliate of the Fund's investment advisor. See Note 2. SEE NOTES TO FINANCIAL STATEMENTS. 90 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- COMMON STOCKS - 99.88% Louisiana-Pacific Corp./1/ 304,928 $ 4,201,908 BJ's Wholesale Club Inc./1/ 202,021 3,913,147 AmerUs Group Co. 113,920 3,873,280 Zale Corp./1/ 87,187 3,871,975 Highwoods Properties Inc. 155,910 3,720,013 Ventas Inc. 216,175 3,700,916 Allmerica Financial Corp./1/ 155,026 3,691,169 York International Corp. 106,692 3,690,476 Energen Corp. 101,845 3,684,752 First Industrial Realty Trust Inc. 114,402 3,668,872 Health Care REIT Inc. 117,614 3,628,392 Kennametal Inc. 96,976 3,626,902 Westar Energy Inc. 195,042 3,598,525 AnnTaylor Stores Corp./1/ 111,938 3,597,687 Gateway Inc./1/ 632,036 3,577,324 Standard-Pacific Corp. 93,866 3,557,521 American Greetings Corp. Class A/1/ 179,633 3,490,269 Atmos Energy Corp. 145,473 3,482,624 Abgenix Inc./1/ 239,105 3,464,631 Briggs & Stratton Corp. 58,817 3,456,087 OfficeMax Inc./1/ 362,140 3,393,252 Alexander & Baldwin Inc. 120,653 3,387,936 South Financial Group Inc. (The) 135,966 3,384,194 Reckson Associates Realty Corp. 146,193 3,378,520 Allegheny Energy Inc./1/ 369,040 3,373,026 Corn Products International Inc. 104,966 3,343,167 Citizens Banking Corp. 126,116 3,330,724 Andrew Corp./1/ 265,170 3,258,939 Crown Holdings Inc./1/ 480,643 3,244,340 Beazer Homes USA Inc./1/ 38,135 3,218,594 KEMET Corp./1/ 251,279 3,201,294 PNM Resources Inc. 114,018 3,197,065 Home Properties of New York Inc. 81,172 3,181,942 Continental Airlines Inc. Class B/1/ 191,615 3,176,977 Phoenix Companies Inc. 274,363 3,168,893 Greater Bay Bancorp 151,331 3,147,685 Commercial Federal Corp. 128,916 3,139,105 First Niagara Financial Group Inc. 206,209 3,113,756 Charter Communications Inc. Class A/1/ 755,603 3,113,084 Extended Stay America Inc./1/ 207,745 3,101,633 Arbitron Inc./1/ 86,759 3,062,593 Universal Corp. 72,380 3,049,369 Cooper Tire & Rubber Co. 190,617 3,025,092 Staten Island Bancorp Inc. 154,584 3,006,659 Nationwide Health Properties Inc. 171,354 2,996,981 Susquehanna Bancshares Inc. 115,634 2,971,794 CMS Energy Corp. 395,174 2,912,432 Chittenden Corp. 97,587 2,903,213 Goodyear Tire & Rubber Co. (The) 439,456 2,887,226 Black Hills Corp. 93,450 2,883,867 SL Green Realty Corp. 79,773 2,880,603 Dycom Industries Inc./1/ 139,515 2,844,711 IDACORP Inc. 111,310 2,838,405 Forest Oil Corp./1/ 117,505 2,814,245 Prentiss Properties Trust 90,617 2,809,127 Flowserve Corp./1/ 136,985 2,780,796 Southern Union Co./1/ 161,728 2,749,376 Callaway Golf Co. 191,724 2,735,901 Bob Evans Farms Inc. 102,133 2,727,972 Tom Brown Inc./1/ 106,011 2,724,483 Trinity Industries Inc. 102,488 2,649,315 Provident Financial Services Inc. 138,091 2,645,824 SkyWest Inc. 151,372 2,621,763 Gables Residential Trust 80,016 2,586,117 FMC Corp./1/ 102,572 2,584,814 Minerals Technologies Inc. 50,627 2,576,914 GATX Corp. 121,549 2,570,761 Payless ShoeSource Inc./1/ 198,088 2,563,259 Commerce Group Inc. 67,442 2,560,098 Kellwood Co. 76,493 2,558,691 Cincinnati Bell Inc./1/ 500,876 2,549,459 Corrections Corp. of America/1/ 101,984 2,515,945 United Stationers Inc./1/ 66,755 2,515,328 La Quinta Corp./1/ 403,725 2,515,207 Visteon Corp. 380,854 2,513,636 Dillards Inc. Class A 179,321 2,506,908 Post Properties Inc. 91,971 2,504,370 United Rentals Inc./1/ 154,938 2,492,952 USF Corp. 78,724 2,477,444 LandAmerica Financial Group Inc. 54,017 2,476,139 SCHEDULES OF INVESTMENTS 91 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- MPS Group Inc./1/ 274,742 $ 2,472,678 Brookline Bancorp Inc. 167,878 2,471,164 Banta Corp. 68,591 2,469,276 Knight Trading Group Inc./1/ 211,312 2,419,522 Linens 'N Things Inc./1/ 101,158 2,405,537 Electronics For Imaging Inc./1/ 102,658 2,393,985 MAF Bancorp Inc. 62,500 2,387,500 Albemarle Corp. 86,974 2,387,436 Massey Energy Co. 179,070 2,381,631 Silicon Valley Bancshares/1/ 86,185 2,381,292 Activision Inc./1/ 198,708 2,374,561 Cimarex Energy Co./1/ 120,964 2,370,894 Terex Corp./1/ 127,400 2,360,722 Men's Wearhouse Inc. (The)/1/ 91,649 2,350,797 Ohio Casualty Corp./1/ 161,672 2,344,244 Donnelley (R.H.) Corp./1/ 57,735 2,333,071 Ralcorp Holdings Inc./1/ 84,194 2,332,174 Arch Coal Inc. 104,753 2,326,564 Stone Energy Corp./1/ 65,874 2,324,035 Potlatch Corp. 76,425 2,271,351 First Commonwealth Financial Corp. 171,902 2,262,230 UMB Financial Corp. 47,726 2,251,235 Delphi Financial Group Inc. Class A 47,651 2,216,725 Hughes Supply Inc. 68,272 2,215,426 Alexandria Real Estate Equities Inc. 45,957 2,207,315 Gartner Inc. Class A/1/ 200,203 2,206,237 Adaptec Inc./1/ 291,760 2,205,706 Albany International Corp. Class A 71,504 2,205,183 Avista Corp. 140,442 2,188,086 Acuity Brands Inc. 120,949 2,184,339 Northwest Natural Gas Co. 74,764 2,168,156 Copart Inc./1/ 198,314 2,141,791 Pep Boys-Manny, Moe & Jack Inc. 139,937 2,141,036 Chemical Financial Corp. 69,012 2,135,921 Sensient Technologies Corp. 101,472 2,130,912 New Jersey Resources Corp. 59,083 2,129,351 Great Lakes Chemical Corp. 105,503 2,121,665 Yellow Corp./1/ 70,677 2,111,829 Cleco Corp. 128,717 2,103,236 Flowers Foods Inc. 91,813 2,093,336 Commercial Net Lease Realty Inc. 120,580 2,053,477 Harleysville Group Inc. 88,012 2,051,560 Impac Mortgage Holdings Inc. 126,704 2,051,338 Fremont General Corp. 161,049 2,046,933 Capital Automotive 66,615 2,032,424 Southwest Gas Corp. 88,927 2,018,643 Technitrol Inc./1/ 109,552 2,016,852 Kilroy Realty Corp. 70,518 2,013,289 Fuller (H.B.) Co. 82,851 2,010,794 Liberty Corp. 47,421 1,989,311 Kansas City Southern Industries Inc./1/ 179,583 1,987,984 Washington Group International Inc./1/ 73,001 1,967,377 Unova Inc./1/ 134,013 1,963,290 Interstate Bakeries Corp. 130,859 1,962,885 FirstFed Financial Corp./1/ 49,567 1,957,897 Brandywine Realty Trust 75,922 1,950,436 Alpharma Inc. Class A 104,807 1,949,410 Hancock Holding Co. 39,078 1,928,499 Alaska Air Group Inc./1/ 68,782 1,913,515 Senior Housing Properties Trust 132,768 1,913,187 Provident Bankshares Corp. 67,040 1,893,880 Lincoln Electric Holding Inc. 84,910 1,885,851 First Citizens BancShares Inc. Class A 17,839 1,885,582 Lennox International Inc. 127,960 1,869,496 Mueller Industries Inc./1/ 73,221 1,863,474 Black Box Corp. 46,684 1,858,490 Thomas & Betts Corp./1/ 117,166 1,857,081 NetIQ Corp./1/ 155,489 1,856,539 CH Energy Group Inc. 41,982 1,847,208 USG Corp./1/ 106,983 1,844,387 Colonial Properties Trust 51,092 1,840,845 United National Bancorp 55,296 1,836,380 AMR Corp./1/ 160,217 1,834,485 AMCORE Financial Inc. 72,568 1,825,811 CommScope Inc./1/ 150,875 1,819,552 Aquila Inc./1/ 537,606 1,817,108 92 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Casey's General Store Inc. 128,985 $ 1,809,660 Essex Property Trust Inc. 28,840 1,808,556 SEACOR SMIT Inc./1/ 49,773 1,800,289 Granite Construction Inc. 95,530 1,784,500 IHOP Corp. 54,294 1,783,558 Waypoint Financial Corp. 89,160 1,783,200 Chiquita Brands International Inc./1/ 100,460 1,778,142 Benchmark Electronics Inc./1/ 42,012 1,775,847 Anixter International Inc./1/ 77,789 1,771,256 Millennium Chemicals Inc. 185,349 1,770,083 Quanta Services Inc./1/ 213,689 1,767,208 Jack in the Box Inc./1/ 99,178 1,765,368 Tecumseh Products Co. Class A 47,150 1,759,167 Viasys Healthcare Inc./1/ 86,929 1,755,966 BankUnited Financial Corp. Class A/1/ 83,230 1,754,488 BankAtlantic Bancorp Inc. Class A 122,917 1,751,567 Lexington Corp. Properties Trust 91,369 1,750,630 Longs Drug Stores Corp. 86,966 1,750,626 Entertainment Properties Trust 58,312 1,749,360 CONMED Corp./1/ 84,520 1,744,493 Moog Inc. Class A/1/ 44,497 1,744,282 Arkansas Best Corp. 63,413 1,743,857 RLI Corp. 52,847 1,739,723 G&K Services Inc. Class A 49,669 1,738,415 NBT Bancorp Inc. 85,655 1,734,514 Actuant Corp. Class A/1/ 30,881 1,733,968 Spinnaker Exploration Co./1/ 72,203 1,732,872 Insight Enterprises Inc./1/ 113,670 1,730,057 Northwest Airlines Corp./1/ 177,344 1,720,237 Electro Scientific Industries Inc./1/ 81,321 1,713,433 Genesis Health Ventures Inc./1/ 70,498 1,709,577 First Charter Corp. 87,015 1,705,494 Curtiss-Wright Corp. 24,116 1,703,072 Charming Shoppes Inc./1/ 297,944 1,701,260 Journal Register Co./1/ 90,552 1,697,850 eFunds Corp./1/ 136,504 1,685,824 Jones Lang LaSalle Inc./1/ 90,601 1,676,119 Sonic Automotive Inc. 69,237 1,665,842 Philadelphia Consolidated Holding Corp./1/ 36,028 1,664,494 Skyworks Solutions Inc./1/ 182,460 1,660,386 Newcastle Investment Corp. 72,207 1,660,039 Sierra Pacific Resources/1/ 342,118 1,659,272 Lin TV Corp. Class A/1/ 77,966 1,657,557 Frontier Airlines Inc./1/ 100,672 1,657,061 Horace Mann Educators Corp. 114,163 1,656,505 El Paso Electric Co./1/ 143,331 1,655,473 Roadway Corp. 33,832 1,649,987 Brown Shoe Co. Inc. 51,962 1,647,195 MFA Mortgage Investments Inc. 172,708 1,644,180 Seacoast Financial Services Corp. 77,115 1,597,052 Quanex Corp. 47,465 1,594,824 UniSource Energy Corp. 83,224 1,582,920 DRS Technologies Inc./1/ 65,441 1,579,091 Ryan's Family Steak Houses Inc./1/ 122,994 1,573,093 Vintage Petroleum Inc. 144,390 1,570,963 Corporate Office Properties Trust 84,859 1,570,740 Magnum Hunter Resources Inc./1/ 196,290 1,568,357 Redwood Trust Inc. 36,942 1,566,341 USEC Inc. 239,829 1,566,083 Heritage Property Investment Trust Inc. 54,065 1,561,397 Summit Properties Inc. 68,710 1,561,091 Reliance Steel & Aluminum Co. 70,143 1,556,473 ABM Industries Inc. 109,858 1,554,491 Ascential Software Corp./1/ 83,847 1,553,685 Anworth Mortgage Asset Corp. 108,523 1,549,708 Allegheny Technologies Inc. 236,408 1,548,472 Invacare Corp. 41,158 1,546,718 Mid-State Bancshares 68,554 1,526,698 Province Healthcare Co./1/ 117,770 1,525,122 Dollar Thrifty Automotive Group Inc./1/ 67,013 1,522,535 EMCOR Group Inc./1/ 35,671 1,517,801 Modine Manufacturing Co. 63,738 1,516,964 Texas Industries Inc. 61,604 1,515,458 Idex Corp. 41,408 1,508,908 Laclede Group Inc. (The) 55,710 1,504,727 THQ Inc./1/ 91,538 1,503,054 ValueClick Inc./1/ 178,163 1,498,351 Perrigo Co. 116,798 1,486,839 SCHEDULES OF INVESTMENTS 93 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Genlyte Group Inc. (The)/1/ 33,391 $ 1,486,567 FelCor Lodging Trust Inc. 143,068 1,482,184 Ruddick Corp. 95,317 1,481,226 American Management Systems Inc./1/ 115,819 1,476,692 Superior Industries International Inc. 36,396 1,475,858 US Oncology Inc./1/ 200,866 1,468,330 Price Communications Corp./1/ 117,960 1,462,704 Community Bank System Inc. 33,304 1,462,379 Empire District Electric Co. (The) 66,433 1,461,526 Aztar Corp./1/ 82,490 1,460,898 Longview Fibre Co. 149,455 1,460,175 JLG Industries Inc. 125,837 1,449,642 Equity One Inc. 84,628 1,438,676 Tesoro Petroleum Corp./1/ 169,119 1,430,747 Hudson River Bancorp Inc. 44,403 1,426,668 Otter Tail Corp. 54,454 1,423,428 Anchor BanCorp Wisconsin Inc. 60,620 1,423,358 Six Flags Inc./1/ 270,281 1,421,678 Axcelis Technologies Inc./1/ 172,114 1,421,662 PS Business Parks Inc. 37,611 1,419,439 Mid-America Apartment Communities Inc. 46,943 1,416,740 Manitowoc Co. Inc. (The) 64,806 1,405,642 Regal-Beloit Corp. 68,760 1,402,704 MAXIMUS Inc./1/ 40,671 1,401,116 Houston Exploration Co./1/ 39,838 1,398,314 TierOne Corp./1/ 65,966 1,388,584 Stewart Information Services Corp./1/ 48,918 1,381,444 First Merchants Corp. 53,767 1,377,511 South Jersey Industries Inc. 36,262 1,372,517 UICI/1/ 109,277 1,370,334 Schulman (A.) Inc. 86,241 1,367,782 Jacuzzi Brands Inc./1/ 218,917 1,357,285 Finish Line Inc. (The)/1/ 51,459 1,353,372 Commercial Metals Co. 73,428 1,348,872 Republic Bancorp Inc. 101,129 1,347,038 Anthracite Capital Inc. 139,588 1,347,024 EastGroup Properties Inc. 48,285 1,341,357 Joy Global Inc./1/ 84,624 1,328,597 Newport Corp./1/ 94,079 1,326,514 Kirby Corp./1/ 45,775 1,313,743 Imagistics International Inc./1/ 45,306 1,312,968 First Financial Bancorp 89,002 1,312,780 Spartech Corp. 61,362 1,307,011 Landry's Restaurants Inc. 63,239 1,302,723 Cornerstone Realty Income Trust Inc. 159,722 1,290,554 Connecticut Bankshares Inc. 25,153 1,289,091 Griffon Corp./1/ 71,564 1,285,289 Kindred Healthcare Inc./1/ 34,292 1,284,235 Saxon Capital Inc./1/ 74,782 1,281,763 Cambrex Corp. 56,426 1,280,870 Medarex Inc./1/ 214,494 1,271,949 Sunrise Senior Living Inc./1/ 48,479 1,271,604 Cell Genesys Inc./1/ 100,620 1,265,800 PSS World Medical Inc./1/ 142,213 1,261,429 Sovran Self Storage Inc. 38,038 1,260,960 Charter Municipal Mortgage Acceptance Co. 68,299 1,255,336 Net.B@nk Inc. 100,814 1,255,134 Unizan Financial Corp. 62,890 1,254,656 RAIT Investment Trust 54,566 1,252,835 Russell Corp. 76,845 1,252,574 Gold Bancorp Inc. 103,059 1,250,106 Ionics Inc./1/ 51,087 1,249,588 Selective Insurance Group Inc. 41,942 1,248,194 Carpenter Technology Corp. 58,080 1,245,235 Triumph Group Inc./1/ 41,781 1,245,074 MCG Capital Corp. 79,473 1,240,574 NCO Group Inc./1/ 52,843 1,240,225 Jo-Ann Stores Inc./1/ 44,390 1,238,481 Denbury Resources Inc./1/ 100,119 1,237,471 WesBanco Inc. 52,638 1,236,993 Insight Communications Co. Inc./1/ 129,637 1,234,144 Monaco Coach Corp./1/ 74,464 1,232,379 Florida East Coast Industries Inc. 42,795 1,230,356 Primedia Inc./1/ 430,948 1,228,202 Washington Real Estate Investment Trust 42,273 1,225,917 94 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Gray Television Inc. 104,821 $ 1,224,309 TBC Corp./1/ 48,836 1,223,342 Pacific Capital Bancorp 40,066 1,221,612 AMC Entertainment Inc./1/ 90,938 1,218,569 AMLI Residential Properties Trust 46,501 1,218,326 OM Group Inc./1/ 83,050 1,215,852 First Financial Bankshares Inc. 32,867 1,214,764 Solutia Inc. 304,439 1,214,712 Sterling Financial Corp. (Washington)/1/ 43,001 1,210,478 First Community Bancorp 36,134 1,210,128 Group 1 Automotive Inc./1/ 34,994 1,208,693 Pacific Northwest Bancorp 33,888 1,208,107 Central Garden & Pet Co./1/ 46,177 1,206,143 Financial Federal Corp./1/ 39,466 1,204,108 Corus Bankshares Inc. 22,486 1,203,001 Arch Chemicals Inc. 57,796 1,202,157 Smith (A.O.) Corp. 42,909 1,201,881 School Specialty Inc./1/ 42,564 1,200,730 Spherion Corp./1/ 172,504 1,200,628 UIL Holdings Corp. 34,296 1,200,017 St. Mary Land & Exploration Co. 47,375 1,199,535 International Multifoods Corp./1/ 51,354 1,199,116 Parkway Properties Inc. 27,341 1,194,802 ShopKo Stores Inc./1/ 79,641 1,194,615 First Financial Corp. 19,764 1,193,746 S&T Bancorp Inc. 41,808 1,191,528 Warnaco Group Inc. (The)/1/ 76,236 1,188,519 National Health Investors Inc. 64,915 1,183,400 Safeguard Scientifics Inc./1/ 347,105 1,180,157 Wolverine World Wide Inc. 60,585 1,175,349 Handleman Co. 69,302 1,169,818 Esterline Technologies Corp./1/ 60,589 1,168,762 PFF Bancorp Inc. 36,521 1,164,289 Cash America International Inc. 70,888 1,162,563 Orthodontic Centers of America Inc./1/ 147,120 1,159,306 Overseas Shipholding Group Inc. 44,759 1,157,020 Stride Rite Corp. 107,056 1,156,205 Shaw Group Inc. (The)/1/ 109,827 1,154,282 Meritage Corp./1/ 24,330 1,149,593 Sterling Financial Corp. (Pennsylvania) 45,221 1,148,613 Argosy Gaming Co./1/ 47,030 1,147,532 Oxford Industries Inc. 17,865 1,146,933 Belden Inc. 65,313 1,141,018 Sun Communities Inc. 28,900 1,138,660 Albany Molecular Research Inc./1/ 76,884 1,138,652 Aviall Inc./1/ 91,736 1,135,692 Woodward Governor Co. 25,925 1,133,182 Bandag Inc. 33,426 1,127,459 Taubman Centers Inc. 57,437 1,125,765 Trammell Crow Co./1/ 89,684 1,116,566 Weis Markets Inc. 32,704 1,112,263 Alfa Corp. 88,734 1,110,950 Ferro Corp. 51,935 1,109,332 Universal Forest Products Inc. 45,472 1,103,605 Sports Authority Inc. (The)/1/ 35,064 1,103,113 Credence Systems Corp./1/ 95,260 1,095,490 Triad Guaranty Inc./1/ 22,313 1,095,122 Tredegar Corp. 72,735 1,094,662 Terayon Communication Systems Inc./1/ 190,283 1,094,127 Stage Stores Inc./1/ 42,922 1,093,653 Phillips-Van Heusen Corp. 72,492 1,088,105 First Sentinel Bancorp Inc. 60,672 1,085,422 Iomega Corp./1/ 97,352 1,084,501 Sola International Inc./1/ 67,270 1,076,320 Time Warner Telecom Inc. Class A/1/ 116,201 1,076,021 Keystone Property Trust 53,107 1,075,948 Stewart & Stevenson Services Inc. 71,547 1,074,636 Hain Celestial Group Inc./1/ 59,267 1,074,511 Cohu Inc. 54,931 1,074,450 General Communication Inc. Class A/1/ 129,079 1,073,937 SPS Technologies Inc./1/ 23,799 1,070,955 Community First Bankshares Inc. 40,456 1,069,252 Stewart Enterprises Inc. Class A/1/ 280,846 1,067,215 Universal Compression Holdings Inc./1/ 49,532 1,065,929 GrafTech International Ltd./1/ 133,183 1,065,464 SCHEDULES OF INVESTMENTS 95 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Swift Energy Co./1/ 75,193 $ 1,060,973 Kramont Realty Trust 62,324 1,056,392 PolyOne Corp. 268,271 1,054,305 Watsco Inc. 55,013 1,051,298 National Penn Bancshares Inc. 37,930 1,048,766 Range Resources Corp./1/ 153,235 1,048,127 American States Water Co. 44,452 1,047,734 Paxar Corp./1/ 81,479 1,042,931 Rock-Tenn Co. Class A 71,474 1,042,091 SOURCECORP Inc./1/ 44,670 1,038,578 Community Trust Bancorp Inc. 35,685 1,037,720 Glacier Bancorp Inc. 37,748 1,035,428 Koger Equity Inc. 55,020 1,034,376 Schweitzer-Mauduit International Inc. 40,952 1,034,038 Investors Real Estate Trust 105,116 1,031,188 Systems & Computer Technology Corp./1/ 98,563 1,028,012 First Federal Capital Corp. 49,891 1,025,260 Infinity Property & Casualty Corp. 36,266 1,019,437 Sybase Inc./1/ 59,772 1,016,722 K2 Inc./1/ 68,337 1,014,804 Fidelity Bankshares Inc. 38,491 1,010,774 Mine Safety Appliances Co. 18,505 1,010,743 Insituform Technologies Inc. Class A/1/ 56,646 1,006,033 Hercules Inc./1/ 88,277 1,000,178 Plains Exploration & Production Co./1/ 79,906 996,428 Offshore Logistics Inc./1/ 48,946 993,604 Bedford Property Investors Inc. 38,283 993,444 Burlington Coat Factory Warehouse Corp. 53,106 993,082 West Pharmaceutical Services Inc. 31,682 991,963 Irwin Financial Corp. 40,791 991,221 Cato Corp. Class A 48,799 984,276 Steel Dynamics Inc./1/ 64,996 984,039 Applied Industrial Technologies Inc. 49,470 982,969 Glatfelter Co. 83,357 981,945 Gardner Denver Inc./1/ 46,668 980,495 United Auto Group Inc./1/ 42,607 979,961 Greif Inc. Class A 37,470 974,220 Methode Electronics Inc. Class A 82,379 972,896 Primus Telecommunications Group Inc./1/ 143,951 971,669 Simmons First National Corp. Class A 41,147 969,423 Bank Mutual Corp. 22,785 967,223 NCI Building Systems Inc./1/ 48,408 963,319 Incyte Corp./1/ 208,444 960,927 Genesco Inc./1/ 59,791 960,243 Glimcher Realty Trust 45,552 959,781 JDA Software Group Inc./1/ 64,500 959,115 Glenborough Realty Trust Inc. 50,735 956,862 NACCO Industries Inc. 13,368 955,812 Action Performance Companies Inc. 38,935 951,571 Global Industries Ltd./1/ 208,625 949,244 LaSalle Hotel Properties 54,633 946,790 Chesapeake Corp. 41,914 944,742 FIRSTFED AMERICA BANCORP INC. 42,649 942,543 Federal Signal Corp. 63,236 942,216 Alexion Pharmaceuticals Inc./1/ 56,503 941,905 State Auto Financial Corp. 37,343 941,790 First Republic Bank 30,525 941,086 Datascope Corp. 30,532 938,554 Boca Resorts Inc. Class A/1/ 72,327 937,358 Kimball International Inc. Class B 63,925 937,141 Toro Co. 20,771 934,695 Lone Star Steakhouse & Saloon Inc. 44,616 932,474 California Water Service Group 36,128 932,464 Hanger Orthopedic Group Inc./1/ 60,678 931,407 Prime Hospitality Corp./1/ 107,056 930,317 RadiSys Corp./1/ 51,539 929,764 Roto-Rooter Inc. 26,138 929,206 Coherent Inc./1/ 37,674 927,911 Nuevo Energy Co./1/ 50,912 925,071 S1 Corp./1/ 182,849 923,387 Investment Technology Group Inc./1/ 47,907 918,856 96 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- IBERIABANK Corp. 17,407 $ 915,956 Fleetwood Enterprises Inc./1/ 98,356 911,760 Analogic Corp. 18,931 908,688 Presidential Life Corp. 59,959 907,180 Local Financial Corp./1/ 50,669 906,468 URS Corp./1/ 46,466 901,440 Century Business Services Inc./1/ 211,322 896,005 Topps Co. (The) 91,472 891,852 Equity Inns Inc. 117,826 887,230 Russ Berrie & Co. Inc. 26,316 886,586 Valhi Inc. 78,513 884,056 ESS Technology Inc./1/ 81,997 883,928 Park Electrochemical Corp. 38,853 883,906 Gaylord Entertainment Co./1/ 35,851 880,142 Ocular Sciences Inc./1/ 39,465 879,280 Town & Country Trust (The) 37,273 875,543 Olin Corp. 55,313 875,052 Praecis Pharmaceuticals Inc./1/ 130,398 874,971 Walter Industries Inc. 81,527 874,785 Pharmacopeia Inc./1/ 68,803 873,729 Lawson Software Inc./1/ 123,096 872,751 Jakks Pacific Inc./1/ 71,459 871,085 Perot Systems Corp. Class A/1/ 86,981 869,810 United Community Financial Corp. 87,740 868,626 Sycamore Networks Inc./1/ 176,782 866,232 Meristar Hospitality Corp. 122,177 865,013 Kaydon Corp. 36,411 864,397 West Coast Bancorp 44,167 862,582 AMN Healthcare Services Inc./1/ 53,090 862,182 Palm Inc./1/ 44,064 861,451 National Western Life Insurance Co. Class A/1/ 6,270 861,247 Applera Corp. - Celera Genomics Group/1/ 73,387 857,894 MRV Communications Inc./1/ 304,941 856,884 TriQuint Semiconductor Inc./1/ 152,903 856,257 Hanover Compressor Co./1/ 86,369 855,053 Centex Construction Products Inc. 19,133 854,671 Integra Bank Corp. 44,432 853,539 Marcus Corp. 55,861 852,439 Saul Centers Inc. 32,066 851,352 First Essex Bancorp Inc. 16,687 849,201 REMEC Inc./1/ 83,101 847,630 Robert Mondavi Corp. (The) Class A/1/ 27,333 846,776 FBL Financial Group Inc. Class A 34,283 844,733 American Eagle Outfitters Inc./1/ 56,756 843,394 Valmont Industries Inc. 42,574 842,539 Haverty Furniture Companies Inc. 45,947 839,911 Cabot Oil & Gas Corp. 32,173 836,498 Alderwoods Group Inc./1/ 107,890 836,147 Peoples Bancorp Inc. 31,162 833,895 DIMON Inc. 120,385 830,656 Hecla Mining Co./1/ 158,322 829,607 Urstadt Biddle Properties Inc. Class A 61,338 828,063 Kaman Corp. Class A 63,489 822,817 Consolidated Graphics Inc./1/ 32,301 821,414 Deltic Timber Corp. 28,234 816,527 WCI Communities Inc./1/ 49,387 814,886 GenCorp. Inc. 91,047 814,871 MB Financial Inc. 18,305 812,742 SWS Group Inc. 41,129 810,653 Atlantic Coast Airlines Holdings Inc./1/ 94,957 808,084 U.S. Restaurant Properties Inc. 49,578 805,643 Integrated Silicon Solution Inc./1/ 80,800 803,960 Delta & Pine Land Co. 34,887 802,750 Hawthorne Financial Corp./1/ 19,939 800,750 Ramco-Gershenson Properties Trust 31,390 798,876 Brookfield Homes Corp. 43,104 798,717 Stillwater Mining Co./1/ 126,357 796,049 Friedman's Inc. 56,807 792,458 Bally Total Fitness Holding Corp./1/ 91,581 792,176 Hologic Inc./1/ 57,735 786,928 DuPont Photomasks Inc./1/ 34,646 786,811 Schnitzer Steel Industries Inc. Class A 26,180 786,185 Thomas Industries Inc. 27,553 785,812 Vail Resorts Inc./1/ 54,936 785,585 First Financial Holdings Inc. 25,864 780,058 SCHEDULES OF INVESTMENTS 97 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- PMA Capital Corp. Class A 62,103 $ 778,151 Omega Financial Corp. 23,558 777,414 Tompkins Trustco Inc. 16,952 775,554 Nu Skin Enterprises Inc. Class A 60,763 774,728 CB Bancshares Inc. 12,648 774,703 GBC Bancorp 20,171 773,558 C&D Technologies Inc. 40,863 773,128 United Fire & Casualty Co. 21,133 772,622 Standex International Corp. 31,735 771,161 Chateau Communities Inc. 25,769 766,885 Tenneco Automotive Inc./1/ 121,523 764,380 Central Vermont Public Service Corp. 34,351 761,905 Argonaut Group Inc. 58,577 761,501 Allegiant Bancorp Inc. 37,679 761,116 Berry Petroleum Co. Class A 41,406 756,902 Dress Barn Inc./1/ 55,236 756,733 Correctional Properties Trust 30,181 753,016 Zygo Corp./1/ 45,746 750,234 ActivCard Corp./1/ 91,087 746,913 Universal Health Realty Income Trust 27,321 741,765 Microsemi Corp./1/ 48,623 741,015 RailAmerica Inc./1/ 85,987 739,488 Armor Holdings Inc./1/ 44,068 738,139 Peoples Holding Co. 16,135 734,788 Tower Automotive Inc./1/ 163,276 734,742 CDI Corp. 27,045 731,026 Crompton Corp. 125,418 728,679 WSFS Financial Corp. 17,237 727,401 Rayovac Corp./1/ 49,535 723,211 ADVO Inc./1/ 17,356 722,530 Lance Inc. 72,521 720,859 Bank of Granite Corp. 38,325 718,594 Republic Bancshares Inc. 25,072 716,056 Riggs National Corp. 45,368 714,546 Agilysys Inc. 81,465 714,448 City Bank 21,981 712,404 Robbins & Myers Inc. 31,788 706,965 Buckeye Technologies Inc./1/ 77,557 704,993 Wellman Inc. 93,759 704,130 SonicWALL Inc./1/ 121,525 703,630 1st Source Corp. 36,818 703,592 American Physicians Capital Inc./1/ 25,313 703,195 NUI Corp. 47,035 703,173 MTS Systems Corp. 46,132 702,129 Homestore.com Inc./1/ 252,689 699,949 Quantum Corp./1/ 227,054 699,326 MemberWorks Inc./1/ 21,927 697,717 Roxio Inc./1/ 80,392 696,999 CIRCOR International Inc. 36,294 696,845 Bel Fuse Inc. Class B 26,351 696,193 Pulitzer Inc. 13,307 693,295 Plexus Corp./1/ 44,471 691,079 Mid Atlantic Realty Trust 32,832 689,472 Pope & Talbot Inc. 45,502 687,990 AMCOL International Corp. 55,604 687,265 Bowne & Co. Inc. 45,962 687,132 First Community Bancshares Inc. 19,503 686,896 Interface Inc. Class A/1/ 126,546 685,879 Camden National Corp. 23,224 685,340 Columbia Banking System Inc. 38,857 683,106 Energy Partners Ltd./1/ 61,206 680,611 Innkeepers USA Trust 77,843 677,234 Apogee Enterprises Inc. 65,617 677,167 4Kids Entertainment Inc./1/ 32,030 675,833 PAREXEL International Corp./1/ 43,990 673,927 Westcorp Inc. 19,282 673,906 Exar Corp./1/ 47,521 671,472 Alabama National Bancorp 14,106 670,035 Comstock Resources Inc./1/ 50,103 669,376 Troy Financial Corp. 19,087 668,236 Keane Inc./1/ 52,263 667,921 Silicon Storage Technology Inc./1/ 76,146 666,278 Caraustar Industries Inc./1/ 76,205 665,270 City Holding Co. 20,026 664,863 Georgia Gulf Corp. 28,450 664,308 Arctic Cat Inc. 34,341 663,812 InterCept Inc./1/ 48,269 659,837 Ditech Communications Corp./1/ 75,031 658,772 Wet Seal Inc. Class A/1/ 65,458 657,853 EDO Corp. 32,439 656,890 98 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Great Lakes REIT Inc. 41,167 $ 655,379 Cascade Corp. 29,714 655,194 AAR Corp./1/ 81,358 652,491 Central Parking Corp. 53,181 651,467 Second Bancorp Inc. 23,875 650,594 Capital City Bank Group Inc. 17,013 649,216 BSB Bancorp Inc. 23,378 647,804 Cascade Natural Gas Corp. 32,629 639,528 Ameron International Corp. 19,331 638,116 Farmer Brothers Co. 1,990 637,417 Washington Trust Bancorp Inc. 26,529 636,961 Rofin-Sinar Technologies Inc./1/ 30,166 633,184 Advanta Corp. Class B 58,773 632,397 Union Bankshares Corp. 20,761 630,512 J&J Snack Foods Corp./1/ 18,115 630,402 Harvest Natural Resources Inc./1/ 102,090 627,854 UniFirst Corp. 26,452 625,325 First Indiana Corp. 33,731 624,024 Artesyn Technologies Inc./1/ 81,799 620,036 St. Francis Capital Corp. 20,953 616,856 Stamps.com Inc./1/ 105,871 616,169 CCBT Financial Companies Inc. 24,488 614,649 Harbor Florida Bancshares Inc. 23,029 613,953 First Place Financial Corp. 34,505 612,464 William Lyon Homes Inc./1/ 12,194 611,529 Aaron Rents Inc. 29,034 608,262 Electro Rent Corp./1/ 48,407 605,572 Triarc Companies Inc. Class B 58,199 605,270 Pericom Semiconductor Corp./1/ 60,426 604,260 Universal American Financial Corp./1/ 68,173 603,331 Frontier Financial Corp. 20,153 602,575 First National Corp. 22,628 599,642 Banner Corp. 28,965 599,575 Grace (W.R.) & Co./1/ 193,109 598,638 Maxygen Inc./1/ 58,627 597,995 Duane Reade Inc./1/ 37,475 597,726 Extreme Networks Inc./1/ 94,715 597,652 Asbury Automotive Group Inc./1/ 35,702 594,438 Parker Drilling Co./1/ 251,357 593,203 Cornell Companies Inc./1/ 35,832 589,436 RehabCare Group Inc./1/ 34,560 589,248 PRG-Schultz International Inc./1/ 103,739 589,238 ESCO Technologies Inc./1/ 12,907 584,300 E.piphany Inc./1/ 117,013 583,895 Flushing Financial Corp. 27,910 581,644 Choice Hotels International Inc./1/ 20,038 581,503 RTI International Metals Inc./1/ 55,212 580,830 EnPro Industries Inc./1/ 60,154 580,486 ITLA Capital Corp./1/ 13,598 579,411 Barnes Group Inc. 22,252 577,662 Maxwell Shoe Co. Inc. Class A/1/ 40,226 577,645 Silicon Graphics Inc./1/ 601,630 577,565 Unifi Inc./1/ 119,937 575,698 Manufactured Home Communities Inc. 14,643 573,713 Watts Industries Inc. Class A 32,461 571,963 Brookstone Inc./1/ 28,839 571,877 Humboldt Bancorp 36,437 571,697 Calgon Carbon Corp. 100,400 565,252 Skyline Corp. 17,651 565,185 Community Banks Inc. 17,069 564,984 InfoSpace Inc./1/ 27,649 564,316 Alloy Inc./1/ 100,596 563,338 Winston Hotels Inc. 61,903 563,317 AK Steel Holding Corp./1/ 281,411 562,822 Lexicon Genetics Inc./1/ 108,893 561,888 Haemonetics Corp./1/ 23,789 561,658 Myers Industries Inc. 55,883 559,389 Arris Group Inc./1/ 97,248 559,176 Atwood Oceanics Inc./1/ 23,298 558,919 Sandy Spring Bancorp Inc. 17,172 558,433 MasTec Inc./1/ 57,358 556,373 BancFirst Corp. 10,477 555,281 New England Business Service Inc. 20,766 552,791 Sybron Dental Specialties Inc./1/ 21,985 551,164 Encore Acquisition Co./1/ 25,478 549,051 Pilgrim's Pride Corp. Class B 43,916 548,950 USB Holding Co. Inc. 31,271 548,804 Pathmark Stores Inc./1/ 78,617 547,960 Komag Inc./1/ 31,230 547,150 CTS Corp. 44,294 545,259 SCHEDULES OF INVESTMENTS 99 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Petroleum Development Corp./1/ 45,486 $ 544,922 Midas Inc./1/ 41,321 543,784 Ethyl Corp./1/ 43,073 541,858 Cubic Corp. 21,570 541,838 LSI Industries Inc. 38,258 539,055 D&E Communications Inc. 37,917 537,663 Financial Institutions Inc. 24,583 537,139 SCS Transportation Inc./1/ 35,518 536,322 InFocus Corp./1/ 109,850 533,871 Steak n Shake Company (The)/1/ 35,802 533,450 WD-40 Co. 16,820 533,026 SJW Corp. 6,258 528,801 Berkshire Hills Bancorp Inc. 15,675 528,091 Willow Grove Bancorp Inc. 32,724 526,529 CIBER Inc./1/ 69,280 526,528 Goody's Family Clothing Inc. 53,327 525,804 Sipex Corp./1/ 66,852 524,788 Ocwen Financial Corp./1/ 115,092 523,669 Baldwin & Lyons Inc. Class B 22,314 521,032 Southwest Bancorp Inc. 30,897 520,614 Intertan Inc./1/ 56,766 519,409 Citizens First Bancorp Inc. 24,895 515,326 Central Pacific Financial Corp. 20,990 514,255 Navigant International Inc./1/ 36,626 513,130 Octel Corp. 29,477 512,900 Churchill Downs Inc. 13,498 512,654 Yardville National Bancorp 24,449 512,207 Mission West Properties Inc. 41,415 511,889 Clark Inc./1/ 38,334 511,376 Elizabeth Arden Inc./1/ 30,997 510,831 Steven Madden Ltd./1/ 26,857 509,477 Horizon Financial Corp. 31,413 507,006 Patina Oil & Gas Corp. 13,987 506,889 CSK Auto Corp./1/ 32,842 506,424 Savient Pharmaceuticals Inc./1/ 99,899 504,490 Hanmi Financial Corp. 25,285 504,183 Lakeland Financial Corp. 14,898 503,105 Input/Output Inc./1/ 128,456 502,263 Vital Sign Inc. 17,051 499,594 Ennis Business Forms Inc. 37,185 498,651 Getty Realty Corp. 20,338 498,281 AmericanWest Bancorporation/1/ 27,089 496,812 Theragenics Corp./1/ 86,725 494,333 Angelica Corp. 25,969 493,411 R&G Financial Corp. Class B 16,881 492,925 Southern Financial Bancorp Inc. 12,495 492,053 RC2 Corp./1/ 25,461 489,106 Veritas DGC Inc./1/ 61,179 488,208 Cirrus Logic Inc./1/ 88,101 487,199 Nautilus Group Inc. (The) 38,541 486,387 Interchange Financial Services Corp. 23,662 485,781 Kansas City Life Insurance Co. 10,584 484,747 Herley Industries Inc./1/ 27,568 482,991 EMS Technologies Inc./1/ 28,423 482,623 Avatar Holdings/1/ 15,075 482,098 Acadia Realty Trust 43,878 481,780 SoundView Technology Group Inc./1/ 48,370 475,961 Magna Entertainment Corp. Class A/1/ 114,376 475,804 Vans Inc./1/ 43,642 475,698 GameStop Corp./1/ 29,855 474,695 Immunogen Inc./1/ 106,632 474,512 Coachmen Industries Inc. 40,384 472,897 Emmis Communications Corp./1/ 23,424 472,696 Capital Corporation of the West/1/ 14,600 470,558 National Presto Industries Inc. 13,657 468,981 Movado Group Inc. 21,382 468,266 Photronics Inc./1/ 21,994 467,592 Building Materials Holdings Corp. 35,651 467,028 Apex Mortgage Capital Inc. 86,558 465,682 Aftermarket Technology Corp./1/ 40,705 464,444 Flagstar Bancorp Inc. 20,237 464,439 First Oak Brook Bancshares Class A 18,633 463,962 Tennant Co. 12,588 463,742 Department 56 Inc./1/ 36,462 463,067 Dade Behring Holdings Inc./1/ 16,367 462,368 Sterling Bancshares Inc. 38,599 460,486 CNA Surety Corp./1/ 45,793 460,220 CT Communications Inc. 40,713 460,057 100 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Penn Engineering & Manufacturing Corp. 29,788 $ 459,033 Nordson Corp. 17,712 458,564 Interwoven Inc./1/ 173,018 458,498 WMS Industries Inc./1/ 20,208 457,913 FNB Corp. (Virginia) 16,840 457,711 Wackenhut Corrections Corp./1/ 26,839 457,605 MainSource Financial Group Inc. 17,594 455,861 Intermagnetics General Corp./1/ 20,375 455,585 Tupperware Corp. 33,885 453,381 LSB Bancshares Inc. 24,602 452,677 Dobson Communications Corp. Class A/1/ 55,627 451,691 LTC Properties Inc. 38,540 446,293 Astec Industries Inc./1/ 43,208 445,042 Genesee & Wyoming Inc. Class A/1/ 18,763 444,871 ABC Bancorp 28,397 443,277 First State Bancorp 14,970 443,262 Sequa Corp. Class A/1/ 10,333 442,356 Midland Co. (The) 20,722 441,379 Meridian Resource Corp. (The)/1/ 102,097 440,038 Pinnacle Entertainment Inc./1/ 62,569 437,983 Orbital Sciences Corp./1/ 47,139 437,450 Anaren Inc./1/ 34,277 437,375 National Bankshares Inc. 10,188 435,843 TriCo Bancshares 15,222 435,349 Kelly Services Inc. Class A 17,439 434,929 Cross Country Healthcare Inc./1/ 30,824 434,310 Umpqua Holdings Corp. 22,780 433,503 Wayne Bancorp Inc. 15,191 432,944 HEICO Corp. 31,802 432,507 Cable Design Technologies Corp./1/ 54,058 432,464 deCODE genetics Inc./1/ 91,661 431,723 Gerber Scientific Inc./1/ 60,491 429,486 Wind River Systems Inc./1/ 75,074 427,171 Safety Insurance Group Inc. 27,482 426,521 Gene Logic Inc./1/ 90,352 424,654 Healthcare Services Group Inc. 25,602 422,433 Dura Automotive Systems Inc./1/ 44,367 422,374 Farmers Capital Bank Corp. 12,954 420,746 Advent Software Inc./1/ 26,133 420,480 Partners Trust Financial Group Inc. 19,069 418,565 Buckle Inc. (The)/1/ 21,729 418,501 Lithia Motors Inc. Class A 20,939 418,152 Integrated Defense Technologies Inc./1/ 24,812 416,345 Northwest Bancorp Inc. 22,560 414,427 Southside Bancshares Inc. 25,626 414,111 Boykin Lodging Co. 50,213 413,755 Libbey Inc. 14,852 413,034 Sauer-Danfoss Inc. 29,289 412,975 Sun Bancorp Inc. (New Jersey)/1/ 18,731 412,082 Heidrick & Struggles International Inc./1/ 24,335 411,992 Tweeter Home Entertainment Group Inc./1/ 53,628 411,863 Infonet Services Corp. Class B/1/ 197,749 411,318 EnergySouth Inc. 12,740 411,247 Matrix Service Co./1/ 23,142 411,002 FloridaFirst Bancorp Inc. 15,582 409,962 Guilford Pharmaceuticals Inc./1/ 65,984 408,441 Matria Healthcare Inc./1/ 23,637 407,975 D&K Healthcare Resources Inc. 28,895 406,264 Standard Register Co. (The) 24,435 405,621 Siliconix Inc./1/ 8,064 405,135 National Processing Inc./1/ 20,959 404,928 Blair Corp. 19,259 400,587 Gorman-Rupp Co. (The) 17,692 400,016 Penn-America Group Inc. 26,690 399,816 Lufkin Industries Inc. 16,627 399,048 Brush Engineered Materials Inc./1/ 38,891 398,633 Massbank Corp. 10,824 397,998 First United Corp. 17,646 397,917 SBS Technologies Inc./1/ 36,474 395,743 Bassett Furniture Industries Inc. 29,192 395,552 Nash Finch Co. 25,494 395,157 Stanley Furniture Co. Inc. 12,941 394,830 Bay View Capital Corp./1/ 65,027 394,714 Republic Bancorp Inc. Class A 20,694 393,393 Firstbank Corp. 12,375 392,288 Century Aluminum Co./1/ 35,937 389,916 SCHEDULES OF INVESTMENTS 101 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- CFS Bancorp Inc. 27,984 $ 389,537 Casella Waste Systems Inc. Class A/1/ 31,245 388,063 Exchange National Bancshares Inc. 11,182 387,456 American Mortgage Acceptance Corp. 23,368 386,507 Klamath First Bancorp Inc. 17,707 383,357 Citizens South Banking Corp. 25,867 382,573 Cathay Bancorp Inc. 8,617 381,302 Volt Information Sciences Inc./1/ 22,969 378,989 EarthLink Inc./1/ 45,983 378,440 Footstar Inc./1/ 55,692 376,478 Wilsons The Leather Experts Inc./1/ 47,109 376,401 Lawson Products Inc. 13,988 375,578 WilTel Communications Inc./1/ 23,478 375,178 Coastal Bancorp Inc. 11,783 374,110 CRIIMI MAE Inc./1/ 35,826 371,874 Sykes Enterprises Inc./1/ 56,109 371,442 Central Coast Bancorp/1/ 21,989 371,394 Camco Financial Corp. 21,824 371,008 Chesapeake Utilities Corp. 16,169 370,593 Nabi Biopharmaceuticals/1/ 43,883 369,934 State Financial Services Corp. Class A 14,848 367,933 Sterling Bancorp (New York) 13,624 366,622 Great Southern Bancorp Inc. 9,382 365,147 TeleTech Holdings Inc./1/ 57,316 363,957 Patriot Bank Corp. 19,321 363,235 SEMCO Energy Inc. 78,835 362,641 Tier Technologies Inc. Class B/1/ 40,525 361,078 Middlesex Water Co. 14,700 360,297 Riviana Foods Inc. 12,677 360,027 Capstead Mortgage Corp. 28,739 357,226 Pomeroy IT Solutions Inc. 28,084 356,667 Harland (John H.) Co. 13,434 355,598 21st Century Insurance Group 25,661 353,609 Silgan Holdings Inc./1/ 11,047 353,504 Omega Healthcare Investors Inc./1/ 46,021 353,441 First M&F Corp. 9,903 353,042 Southwest Water Co. 25,060 352,594 Mindspeed Technologies Inc./1/ 65,166 351,245 OSI Systems Inc./1/ 20,275 350,758 Sizeler Property Investors Inc. 33,468 350,745 Jarden Corp./1/ 9,279 350,282 Heritage Commerce Corp./1/ 32,562 349,390 CSS Industries Inc. 13,499 347,599 EverTrust Financial Group Inc. 12,176 345,555 iGATE Corp./1/ 58,544 345,410 Alliance Semiconductor Corp./1/ 63,389 344,836 Lattice Semiconductor Corp./1/ 47,978 341,124 Stepan Co. 14,967 340,948 MarineMax Inc./1/ 23,488 340,811 Metris Companies Inc. 82,516 339,966 Connecticut Water Service Inc. 12,521 337,942 Resource America Inc. Class A 28,416 337,582 OMNOVA Solutions Inc./1/ 95,798 336,251 Applica Inc./1/ 55,458 335,521 Mentor Graphics Corp./1/ 19,131 335,366 Oshkosh Truck Corp. 8,464 335,259 KCS Energy Inc./1/ 49,264 334,995 Corvis Corp./1/ 259,673 334,978 First Defiance Financial Corp. 14,250 332,025 Isle of Capri Casinos Inc./1/ 16,713 331,085 Rent-Way Inc./1/ 61,533 330,432 Dave & Buster's Inc./1/ 32,068 330,300 Sanfilippo (John B.) & Son Inc./1/ 15,505 329,636 GA Financial Inc. 12,135 329,223 Merchants Bancshares Inc. 11,633 328,981 MutualFirst Financial Inc. 12,795 327,552 Franklin Electric Co. Inc. 5,874 327,064 Computer Horizons Corp./1/ 88,239 326,484 Financial Industries Corp. 22,951 325,904 InVision Technologies Inc./1/ 13,388 325,864 Perini Corp./1/ 47,487 325,761 Monro Muffler Brake Inc./1/ 10,990 325,304 Manugistics Group Inc./1/ 59,192 324,372 Cubist Pharmaceuticals Inc./1/ 30,035 324,078 Restoration Hardware Inc./1/ 55,539 322,682 Network Equipment Technologies Inc./1/ 35,151 321,632 First of Long Island Corp. 8,460 319,703 Powell Industries Inc./1/ 18,997 319,150 102 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- PennFed Financial Services Inc. 10,962 $ 318,994 Valence Technology Inc./1/ 92,929 316,888 Ducommun Inc./1/ 19,427 316,660 TIBCO Software Inc./1/ 59,146 316,431 Crown American Realty Trust 26,579 316,290 World Wrestling Entertainment Inc. 31,274 313,365 MSC.Software Corp./1/ 43,455 312,876 Transkaryotic Therapies Inc./1/ 29,934 312,810 Westfield Financial Inc. 13,984 312,123 Quaker City Bancorp Inc. 7,798 311,920 American National Bankshares Inc. 12,489 311,850 Century Bancorp Inc. Class A 9,290 310,658 Royal Bancshares of Pennsylvania Class A 11,552 310,171 Interpool Inc. 19,489 310,070 Global Power Equipment Group Inc./1/ 58,604 308,843 Associated Estates Realty Corp. 47,350 308,722 Parkvale Financial Corp. 12,181 307,570 Collins & Aikman Corp./1/ 90,848 307,066 Oplink Communications Inc./1/ 121,241 306,740 Seacoast Banking Corp. of Florida 17,622 306,623 Interland Inc./1/ 39,835 306,331 Petroleum Helicopters Inc./1/ 10,558 306,193 Standard Microsystems Corp./1/ 11,333 305,764 Texas Regional Bancshares Inc. Class A 9,023 304,887 Prosperity Bancshares Inc. 14,303 304,797 Dril-Quip Inc./1/ 17,988 303,997 Tanger Factory Outlet Centers Inc. 8,269 303,886 Perry Ellis International Inc./1/ 10,629 303,458 NBC Capital Corp. 12,491 302,782 CLARCOR Inc. 7,736 301,704 ESB Financial Corp. 20,718 301,654 Stein Mart Inc./1/ 55,135 301,588 Provident Financial Holdings Inc. 10,023 300,890 Skechers U.S.A. Inc. Class A/1/ 40,546 300,851 Capitol Bancorp Ltd. 11,229 300,376 TransMontaigne Inc./1/ 50,365 300,175 Credit Acceptance Corp./1/ 26,442 300,117 Crown Media Holdings Inc./1/ 36,642 299,732 Horizon Offshore Inc./1/ 72,429 297,683 Information Holdings Inc./1/ 14,724 294,922 Advanced Marketing Services Inc. 28,680 293,110 Compucom Systems Inc./1/ 69,201 290,644 Independent Bank Corp. (Michigan) 9,906 290,048 Finisar Corp./1/ 127,140 286,065 Alico Inc. 10,174 284,974 Kadant Inc./1/ 14,868 284,871 Concord Camera Corp./1/ 26,668 284,014 M&F Worldwide Corp./1/ 29,483 283,921 Arrow International Inc. 12,310 283,130 Hooker Furniture Corp. 8,315 283,126 Applied Films Corporation/1/ 9,516 282,911 Turnstone Systems Inc./1/ 98,479 282,635 American West Holdings Corp. Class B/1/ 28,954 281,722 Great American Financial Resources Inc. 19,448 281,607 Fisher Communications Inc./1/ 5,960 281,014 Summit Bancshares Inc. 10,167 279,593 Dominion Homes Inc./1/ 10,799 277,858 First Consulting Group Inc./1/ 55,197 274,881 American Land Lease Inc. 14,851 274,001 National Health Realty Inc. 18,107 273,778 Powerwave Technologies Inc./1/ 41,089 272,009 Sanders Morris Harris Group Inc. 30,660 271,954 BancTrust Financial Group Inc. 17,952 271,075 Redback Networks Inc./1/ 442,539 269,949 Oil States International Inc./1/ 21,272 269,942 MKS Instruments Inc./1/ 12,428 269,190 Lydall Inc./1/ 22,393 268,940 BHA Group Inc. 11,319 268,939 Speedway Motorsports Inc. 9,080 267,951 Aether Systems Inc./1/ 58,503 267,359 Heartland Express Inc. 11,122 267,150 CompuCredit Corp./1/ 15,179 265,632 Santander BanCorp 14,094 264,544 Verso Technologies Inc./1/ 71,463 264,413 SCHEDULES OF INVESTMENTS 103 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Woodhead Industries Inc. 17,545 $ 264,052 MedQuist Inc./1/ 13,585 263,006 TTM Technologies Inc./1/ 18,360 262,181 Finlay Enterprises Inc./1/ 17,986 261,337 Oak Hill Financial Inc. 8,950 259,461 Symmetricom Inc./1/ 40,931 259,093 New Focus Inc./1/ 57,524 258,283 Heartland Financial USA Inc. 9,276 257,873 NS Group Inc./1/ 39,900 257,754 O'Charley's Inc./1/ 17,359 257,434 Eastern Virginia Bankshares 9,168 256,246 Medallion Financial Corp. 40,367 254,312 Taylor Capital Group Inc. 10,991 253,672 Cleveland-Cliffs Inc./1/ 9,836 251,802 Young Broadcasting Inc. Class A/1/ 12,816 251,065 OceanFirst Financial Corp. 9,894 247,647 Semitool Inc./1/ 31,048 247,142 Seabulk International Inc./1/ 33,847 246,745 Rex Stores Corp./1/ 18,902 246,671 American Medical Security Group Inc./1/ 12,120 246,157 Cumulus Media Inc. Class A/1/ 14,435 246,117 Ingles Markets Inc. Class A 24,906 244,079 PDI Inc./1/ 9,915 243,116 PAB Bankshares Inc. 17,814 241,023 Hutchinson Technology Inc./1/ 7,268 240,571 Tarragon Realty Investors Inc./1/ 15,769 240,477 Gundle/SLT Environmental Inc./1/ 15,583 239,199 Warwick Community Bancorp 8,486 239,051 McGrath Rentcorp 8,540 238,693 Insurance Auto Auctions Inc./1/ 21,202 238,523 First Busey Corp. Class A 9,178 236,792 American Woodmark Corp. 5,279 236,288 ProAssurance Corp./1/ 9,055 233,891 PICO Holdings Inc./1/ 17,862 233,456 Material Sciences Corp. 22,821 233,231 Integrated Electrical Services Inc./1/ 33,684 232,420 C&F Financial Corp. 5,141 232,419 McLeodUSA Inc. Class A/1/ 167,153 232,343 Seaboard Corp. 1,072 230,587 Lakeland Bancorp Inc. 14,419 229,977 Gibraltar Steel Corp. 10,420 229,657 Gabelli Asset Management Inc. Class A/1/ 6,439 229,615 Steinway Musical Instruments Inc./1/ 12,834 227,804 West Marine Inc./1/ 11,846 225,666 Milacron Inc. 98,069 225,559 Smart & Final Inc./1/ 35,980 224,875 Alamo Group Inc. 15,738 224,424 Navigators Group Inc./1/ 6,819 223,049 Whitehall Jewellers Inc./1/ 19,881 222,866 McMoRan Exploration Co./1/ 21,245 222,648 Neose Technologies Inc./1/ 23,764 222,193 Right Management Consultants Inc./1/ 12,178 220,178 Nature's Sunshine Products Inc. 26,517 220,091 FNB Corp. 8,803 219,635 Stellent Inc./1/ 28,184 218,708 Landauer Inc. 6,164 218,391 Owens & Minor Inc. 9,018 217,334 NN Inc. 16,876 217,025 Pacific Union Bank 11,621 215,570 Audiovox Corp. Class A/1/ 17,037 215,177 Foothill Independent Bancorp 10,051 213,584 Accredited Home Lenders Holding Co./1/ 9,820 213,192 CuraGen Corp./1/ 42,345 212,995 Mobile Mini Inc./1/ 11,026 212,692 Ambassadors International Inc. 17,308 212,023 Regent Communications Inc./1/ 34,603 211,078 FuelCell Energy Inc./1/ 17,978 210,343 Viasat Inc./1/ 11,793 210,033 Hypercom Corp./1/ 38,920 209,779 Greenbrier Companies Inc./1/ 15,527 209,770 PetroCorp Inc./1/ 15,534 209,088 Price Legacy Corporation/1/ 59,126 206,941 State Bancorp Inc. 10,361 206,391 Palm Harbor Homes Inc./1/ 12,029 206,057 Intergraph Corp./1/ 8,794 204,724 Frontier Oil Corp. 13,831 203,316 Deb Shops Inc. 11,077 203,263 104 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- First Albany Companies Inc. 15,736 $ 200,634 Pediatrix Medical Group Inc./1/ 4,347 200,179 U.S. Xpress Enterprises Inc. Class A/1/ 16,252 199,087 Parametric Technology Corp./1/ 63,692 198,719 Crawford & Co. Class B 28,288 198,582 Security Bank Corp. 6,680 197,060 OshKosh B'Gosh Inc. Class A 7,549 194,160 Guess ? Inc./1/ 21,740 193,486 ParthusCeva Inc./1/ 22,398 192,399 Brooks Automation Inc./1/ 9,198 192,238 BRT Realty Trust 10,070 192,136 Identix Inc./1/ 36,631 191,580 Richardson Electronics Ltd. 17,996 190,758 Watson Wyatt & Co. Holdings/1/ 8,452 190,255 Boyds Collection Ltd. (The)/1/ 42,157 190,128 Metro One Telecommunications Inc./1/ 54,155 188,459 Sypris Solutions Inc. 13,715 188,307 Northern States Financial Corp. 6,499 187,236 Courier Corp. 3,669 186,789 Standard Commercial Corp. 10,150 186,760 MAIR Holdings Inc./1/ 27,425 186,216 First Bancorp (North Carolina) 6,627 185,622 Pantry Inc. (The)/1/ 15,335 185,400 Cole National Corp./1/ 14,854 185,081 Center Bancorp Inc. 11,492 184,676 Keynote Systems Inc./1/ 15,804 184,117 Hampshire Group Ltd./1/ 5,779 184,003 Quaker Chemical Corp. 7,896 183,661 Columbia Bancorp 6,845 183,446 AsiaInfo Holdings Inc./1/ 27,103 182,674 CCC Information Services Group Inc./1/ 10,846 181,779 Chronimed Inc./1/ 19,885 181,550 Encore Wire Corp./1/ 13,752 181,526 Independence Holding Co. 8,295 180,416 Stoneridge Inc./1/ 12,106 178,079 Hudson Highland Group Inc./1/ 9,231 177,604 Computer Network Technology Corp./1/ 20,272 175,961 Systemax Inc./1/ 26,438 175,548 Biopure Corp./1/ 26,956 174,405 Lightbridge Inc./1/ 18,474 174,210 Enstar Group Inc./1/ 4,431 173,917 Ryerson Tull Inc. 22,222 173,332 Veeco Instruments Inc./1/ 8,620 172,055 WatchGuard Technologies Inc./1/ 32,070 171,575 Bryn Mawr Bank Corp. 4,075 171,557 Playtex Products Inc./1/ 28,299 168,662 Korn/Ferry International/1/ 20,391 168,226 Sun Bancorp Inc. (Pennsylvania) 9,059 167,773 LodgeNet Entertainment Corp./1/ 10,751 166,641 Macatawa Bank Corp. 7,133 165,200 Center Financial Corp./1/ 8,122 164,958 Waste Connections Inc./1/ 4,700 164,923 Inverness Medical Innovations Inc./1/ 6,487 164,770 Coca-Cola Bottling Co. Consolidated 3,279 164,442 Wausau-Mosinee Paper Corp. 13,344 162,930 TRC Companies Inc./1/ 9,884 162,691 Ampco-Pittsburgh Corp. 13,557 162,548 Fairchild Corp. (The) Class A/1/ 32,391 160,335 Dover Motorsports Inc. 42,345 159,217 Technical Olympic USA Inc./1/ 5,775 158,813 Net2Phone Inc./1/ 25,076 158,230 Midway Games Inc./1/ 53,278 157,703 General Cable Corp./1/ 19,448 154,806 Commercial Bankshares Inc. 5,154 154,414 Virginia Financial Group Inc. 5,124 154,079 Mail-Well Inc./1/ 43,678 152,873 Sturm Ruger & Co. Inc. 14,619 150,868 SBA Communications Corp./1/ 47,080 150,656 Internet Security Systems Inc./1/ 12,023 150,288 World Fuel Services Corp. 5,344 150,006 Shoe Carnival Inc./1/ 10,418 148,977 CEC Entertainment Inc./1/ 3,774 147,941 NetRatings Inc./1/ 15,767 147,153 Mestek Inc./1/ 8,713 146,466 Greater Community Bancorp 9,038 142,800 Maritrans Inc. 9,500 142,500 Donegal Group Inc. Class A 9,427 142,348 SCHEDULES OF INVESTMENTS 105 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- TALX Corp. 5,771 $ 142,082 NYMAGIC Inc. 6,264 140,502 Schawk Inc. 11,641 138,761 Penn Virginia Corp. 3,109 137,418 Arena Pharmaceuticals Inc./1/ 19,060 137,232 Paxson Communications Corp./1/ 27,590 136,846 Zenith National Insurance Corp. 4,916 136,763 Cerner Corp./1/ 4,401 135,859 NL Industries Inc. 8,321 135,383 JNI Corp./1/ 19,426 135,011 Littelfuse Inc./1/ 5,843 134,389 Ultimate Electronics Inc./1/ 14,110 133,904 First Horizon Pharmaceutical Corp./1/ 20,458 130,931 Oneida Ltd. 42,154 129,834 EGL Inc./1/ 7,111 129,278 7-Eleven Inc./1/ 9,377 128,746 Beverly Enterprises Inc./1/ 21,723 128,600 CUNO Inc./1/ 3,249 127,329 Strattec Security Corp./1/ 2,645 126,061 Aaon Inc./1/ 7,600 124,792 Great Atlantic & Pacific Tea Co./1/ 15,193 123,215 Curative Health Services Inc./1/ 6,803 121,570 NYFIX Inc./1/ 21,644 121,206 Three-Five Systems Inc./1/ 21,858 120,438 Pegasus Solutions Inc./1/ 8,707 120,418 Pemstar Inc./1/ 33,495 119,242 NASB Financial Inc. 3,555 118,773 Alliance Imaging Inc./1/ 34,470 118,577 EMC Insurance Group Inc. 6,651 117,457 iPayment Holdings Inc./1/ 5,053 115,006 Gentiva Health Services Inc./1/ 9,994 114,931 Omega Protein Corp./1/ 17,437 114,212 Coastal Financial Corp. 8,135 113,809 Oceaneering International Inc./1/ 4,815 113,249 Neoforma Inc./1/ 8,060 113,243 Genesis Microchip Inc./1/ 10,085 113,053 Charlotte Russe Holding Inc./1/ 10,979 112,974 Trans World Entertainment Corp./1/ 19,991 112,949 K-Swiss Inc. Class A 3,131 112,685 Martha Stewart Living Omnimedia Inc. Class A/1/ 12,112 112,036 PC Connection Inc./1/ 11,828 111,183 WESCO International Inc./1/ 21,169 110,714 Tellium Inc./1/ 79,108 108,378 Standard Motor Products Inc. 10,692 107,989 RCN Corp./1/ 55,759 102,597 Entrust Inc./1/ 20,592 101,107 Playboy Enterprises Inc. Class B/1/ 6,792 98,824 Manufacturers Services Ltd./1/ 19,752 98,760 Shenandoah Telecommunications Co. 2,538 97,840 Boston Beer Co. Inc. Class A/1/ 6,128 97,558 Arden Group Inc. Class A 1,573 96,739 MRO Software Inc./1/ 7,070 96,506 Brady Corp. Class A 3,031 96,416 CVB Financial Corp. 5,035 95,665 Register.com/1/ 21,155 95,409 NetScout Systems Inc./1/ 18,938 94,501 Metrologic Instruments Inc./1/ 2,566 92,350 ACLARA BioSciences Inc./1/ 23,160 91,714 GulfMark Offshore Inc./1/ 6,471 90,918 Modtech Holdings Inc./1/ 11,310 89,801 Raindance Communications Inc./1/ 32,050 88,458 Chattem Inc./1/ 6,338 87,971 KFx Inc./1/ 17,485 87,775 Galyan's Trading Co./1/ 8,413 85,897 Bruker BioSciences Corp./1/ 19,252 84,709 NIC Inc./1/ 17,932 84,460 Serologicals Corp./1/ 6,414 84,344 Main Street Banks Inc. 3,356 84,068 C-COR.net Corp./1/ 12,488 82,421 MIM Corp./1/ 10,988 82,410 Meridian Bioscience Inc. 8,116 81,322 Dover Downs Gaming & Entertainment Inc. 9,764 80,260 Holly Corp. 3,220 79,792 WFS Financial Inc./1/ 2,138 79,170 Revlon Inc. Class A/1/ 29,417 78,249 Papa John's International Inc./1/ 3,124 77,506 Midwest Banc Holdings Inc. 3,412 75,849 SureWest Communications 2,258 75,079 Pegasus Communications Corp./1/ 5,027 74,802 Lindsay Manufacturing Co. 3,693 74,229 106 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Vastera Inc./1/ 14,407 $ 74,052 ElkCorp 3,088 72,753 Nelson (Thomas) Inc./1/ 5,172 71,425 Synplicity Inc./1/ 11,990 70,741 Columbia Bancorp (Oregon) 4,917 70,657 DJ Orthopedics Inc./1/ 4,987 69,569 Independent Bank Corp. (Massachusetts) 2,657 68,046 Newpark Resources Inc./1/ 15,598 67,071 MBT Financial Corp. 4,270 66,612 American Home Mortgage Holdings Inc. 3,789 66,573 Vicor Corp./1/ 6,967 66,396 Covenant Transport Inc. Class A/1/ 3,528 64,915 Noland Co. 1,900 64,410 Sanderson Farms Inc. 2,043 64,273 Wild Oats Markets Inc./1/ 5,693 62,224 Emerson Radio Corp./1/ 16,341 61,279 Tyler Technologies Inc./1/ 8,624 61,058 Raytech Corp./1/ 17,340 60,863 SimpleTech Inc./1/ 8,429 60,352 Virage Logic Corp./1/ 7,887 59,941 Tollgrade Communications Inc./1/ 3,587 57,643 Energy Conversion Devices Inc./1/ 5,474 57,532 Transcontinental Realty Investments Inc./1/ 4,870 57,417 Children's Place Retail Stores Inc. (The)/1/ 3,241 55,583 United Capital Corp. 3,031 54,558 First Citizens Banc Corp. 2,010 53,265 United Security Bancshares 2,070 52,164 National Beverage Corp./1/ 3,449 52,080 Orleans Homebuilders Inc./1/ 4,223 49,916 IXYS Corp./1/ 5,288 49,549 Forrester Research Inc./1/ 3,415 48,937 Medical Staffing Network Holdings Inc./1/ 6,329 47,847 White Electronic Designs Corp./1/ 4,323 46,472 Big 5 Sporting Goods Corp./1/ 3,037 46,405 Liquidmetal Technologies/1/ 14,457 45,540 SY Bancorp Inc. 2,280 42,750 Mercantile Bank Corp. 1,267 42,064 Aphton Corp./1/ 7,462 41,862 Rudolph Technologies Inc./1/ 2,152 41,555 Option Care Inc./1/ 3,396 40,786 Resource Bankshares Corp. 1,361 39,660 Central European Distribution Corp./1/ 1,411 38,591 GB&T Bancshares Inc. 1,727 38,443 Optical Communication Products Inc./1/ 16,242 38,331 Keithley Instruments Inc. 2,640 37,356 Inter Parfums Inc. 3,683 36,830 Specialty Laboratories Inc./1/ 2,452 31,999 Blount International Inc./1/ 6,157 29,615 Hickory Tech Corp. 2,298 26,312 GTC Biotherapeutics Inc./1/ 8,204 25,432 Aspen Technology Inc./1/ 6,333 24,699 Universal Electronics Inc./1/ 2,055 23,633 Atari Inc./1/ 5,679 23,227 Nara Bancorp Inc. 1,318 22,577 MarketWatch.com Inc./1/ 2,695 22,533 Sirna Therapeutics Inc./1/ 3,540 20,249 P.A.M. Transportation Services Inc./1/ 927 19,022 CoBiz Inc. 1,168 18,723 FFLC Bancorp Inc. 602 17,476 Maui Land & Pineapple Co. Inc./1/ 654 16,912 Flag Financial Corp. 1,181 15,790 Clayton Williams Energy Inc./1/ 781 14,722 Pegasystems Inc./1/ 1,932 14,104 United PanAm Financial Corp./1/ 751 13,075 North Coast Energy Inc./1/ 537 6,706 American Realty Investors Inc./1/ 523 5,251 Burnham Pacific Properties Inc. 1,448 521 TOTAL COMMON STOCKS (Cost: $1,115,069,524) 1,123,980,870 SCHEDULES OF INVESTMENTS 107 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2003 SHARES OR SECURITY PRINCIPAL VALUE ---------------------------------------------------------------------------- SHORT TERM INVESTMENTS - 20.00% MONEY MARKET FUNDS - 11.98% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares/2/,/3/ 89,526,090 $ 89,526,090 Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares/2/,/3/ 32,998,744 32,998,744 BlackRock Temp Cash Money Market Fund/2/ 1,465,869 1,465,869 Short Term Investment Co. - Liquid Assets Money Market Portfolio/2/ 7,780,247 7,780,247 Short Term Investment Co. - Prime Money Market Portfolio, Institutional Shares/2/ 2,999,886 2,999,886 134,770,836 FLOATING RATE NOTES - 4.64% Beta Finance Inc. 1.08%, 05/20/04/2/ $ 1,499,943 1,499,800 1.08%, 09/15/04/2/ 2,999,886 2,999,599 1.17%, 08/23/04/2/ 1,499,943 1,501,094 CC USA Inc. 1.06%, 05/24/04/2/ 2,999,886 2,999,693 1.08%, 04/19/04/2/ 1,319,950 1,319,914 1.12%, 07/15/04/2/ 1,499,943 1,500,369 Dorada Finance Inc. 1.08%, 05/20/04/2/ 2,999,886 2,999,601 1.24%, 08/09/04/2/ 749,971 749,875 Five Finance Inc. 1.09%, 04/15/04/2/ 1,499,943 1,499,943 HBOS Treasury Services PLC 1.13%, 06/24/08/2/ 2,999,886 2,999,886 Holmes Financing PLC 1.08%, 04/15/04/2/ 599,977 599,977 K2 USA LLC 1.08%, 08/16/04/2/ 749,971 749,873 1.08%, 09/27/04/2/ 3,239,877 3,239,397 1.09%, 04/13/04/2/ 1,499,943 1,499,904 1.09%, 05/17/04/2/ 1,499,943 1,499,896 SECURITY PRINCIPAL VALUE ---------------------------------------------------------------------------- Links Finance LLC 1.05%, 07/20/04/2/ $ 1,199,954 $ 1,199,762 1.08%, 05/04/04/2/ 1,499,943 1,499,899 1.08%, 06/28/04/2/ 1,499,943 1,499,721 1.09%, 03/29/04/2/ 1,499,943 1,499,943 Nationwide Building Society 1.08%, 07/23/04/2/ 2,249,914 2,249,914 Sigma Finance Inc. 1.05%, 07/20/04/2/ 1,499,943 1,499,702 1.07%, 10/15/03/2/ 2,999,886 2,999,874 1.07%, 07/01/04/2/ 1,499,943 1,499,662 1.24%, 08/06/04/2/ 749,971 749,908 Tango Finance Corp. 1.05%, 07/15/04/2/ 899,966 899,731 1.06%, 07/06/04/2/ 899,966 899,895 WhistleJacket Capital LLC 1.08%, 09/15/04/2/ 1,499,943 1,499,656 White Pine Finance LLC 1.08%, 05/17/04/2/ 1,799,932 1,799,932 1.08%, 07/06/04/2/ 1,799,932 1,799,800 1.08%, 08/26/04/2/ 1,499,943 1,499,734 1.09%, 04/20/04/2/ 1,499,943 1,499,943 52,255,897 COMMERCIAL PAPER - 2.42% Amsterdam Funding Corp. 1.06%, 10/16/03/2/ 1,424,946 1,424,318 Blue Ridge Asset Funding Corp. 1.05%, 10/17/03/2/ 1,499,943 1,499,243 Edison Asset Securitization 1.07%, 10/23/03/2/ 2,819,893 2,818,049 Gemini Securitization Corp. 1.05%, 10/17/03/2/ 1,049,960 1,049,470 Greenwich Funding Corp. 1.06%, 10/16/03/2/ 1,769,933 1,769,151 Jupiter Securitization Corp. 1.05%, 10/20/03/2/ 1,499,943 1,499,112 New Center Asset Trust 1.06%, 10/22/03/2/ 1,499,943 1,499,015 Park Avenue Receivables Corp. 1.05%, 10/20/03/2/ 1,499,943 1,499,112 108 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 2000 VALUE INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE ---------------------------------------------------------------------------- Preferred Receivables Funding Corp. 1.06%, 10/08/03/2/ $ 1,499,943 $ 1,499,634 Receivables Capital Corp. 1.05%, 10/15/03/2/ 1,008,202 1,007,790 Sydney Capital Corp. 1.07%, 10/17/03/2/ 1,214,954 1,214,376 UBS Finance (Delaware) Inc. 1.03%, 10/08/03/2/ 2,999,886 2,999,285 1.05%, 10/15/03/2/ 1,499,943 1,499,330 1.11%, 10/01/03/2/ 5,999,772 5,999,772 27,277,657 TIME DEPOSITS - 0.75% Abbey National Treasury Services PLC 1.15%, 10/01/03/2/ 1,499,943 1,499,943 Canadian Imperial Bank of Commerce 1.06%, 10/08/03/2/ 749,971 749,971 1.08%, 10/30/03/2/ 1,199,954 1,199,954 1.37%, 08/26/04/2/ 2,999,886 2,999,886 Toronto-Dominion Bank 1.33%, 08/23/04/2/ 1,949,926 1,949,048 8,398,802 REPURCHASE AGREEMENTS - 0.21% Lehman Brothers Inc. 1.10%, 10/01/03/2/ 2,399,909 2,399,909 2,399,909 TOTAL SHORT TERM INVESTMENTS (Cost: $225,103,101) 225,103,101 TOTAL INVESTMENTS IN SECURITIES - 119.88% (Cost $1,340,172,625) 1,349,083,971 OTHER ASSETS, LESS LIABILITIES - (19.88%) (223,749,483) --------------- NET ASSETS - 100.00% $ 1,125,334,488 =============== /1/ Non-income earning securities. /2/ All or a portion of this security represents investments of securities lending collateral. /3/ Issuer is an affiliate of the Fund's investment advisor. See Note 2. SEE NOTES TO FINANCIAL STATEMENTS. SCHEDULES OF INVESTMENTS 109 STATEMENTS OF ASSETS AND LIABILITIES (Unaudited) iSHARES TRUST September 30, 2003
iSHARES RUSSELL ------------------------------------------------------------------------ 1000 1000 Growth 1000 Value 2000 Index Fund Index Fund Index Fund Index Fund ---------------------------------------------------------------------------------------------------- ASSETS Investments at cost $ 1,774,765,003 $ 1,247,641,740 $ 1,805,690,706 $ 4,534,113,109 --------------- --------------- --------------- --------------- Investments in securities, at value (including securities on loan/1/) (Note 1) $ 1,759,131,314 $ 1,233,326,377 $ 1,774,054,694 $ 4,380,895,876 Receivables: Investment securities sold 188,938 - 393,572 3,707,486 Dividends and interest 1,973,678 968,895 2,652,660 3,413,582 iShares sold 19,795 - - - --------------- --------------- --------------- --------------- Total Assets 1,761,313,725 1,234,295,272 1,777,100,926 4,388,016,944 --------------- --------------- --------------- --------------- LIABILITIES Payables: Investment securities purchased 1,742,707 609,774 2,599,371 6,931,535 Collateral for securities on loan (Note 5) 98,533,698 66,339,867 100,023,219 840,106,953 iShares redeemed - - 172,476 118,154 Advisory fees (Note 2) 420,789 378,797 563,047 1,094,304 --------------- --------------- --------------- --------------- Total Liabilities 100,697,194 67,328,438 103,358,113 848,250,946 --------------- --------------- --------------- --------------- NET ASSETS $ 1,660,616,531 $ 1,166,966,834 $ 1,673,742,813 $ 3,539,765,998 =============== =============== =============== =============== NET ASSETS CONSIST OF: Paid-in capital $ 1,700,730,188 $ 1,299,299,441 $ 1,754,290,494 $ 3,801,124,286 Undistributed net investment income 1,339,568 701,342 1,688,324 4,130,615 Accumulated net realized loss (25,819,536) (118,718,586) (50,599,993) (112,271,670) Net unrealized appreciation (depreciation) (15,633,689) (14,315,363) (31,636,012) (153,217,233) --------------- --------------- --------------- --------------- NET ASSETS $ 1,660,616,531 $ 1,166,966,834 $ 1,673,742,813 $ 3,539,765,998 =============== =============== =============== =============== iShares outstanding 31,100,000 27,450,000 32,550,000 36,400,000 =============== =============== =============== =============== Net asset value per iShare $ 53.40 $ 42.51 $ 51.42 $ 97.25 =============== =============== =============== =============== iSHARES RUSSELL ---------------------------------- 2000 Growth 2000 Value Index Fund Index Fund -------------------------------------------------------------- ASSETS Investments at cost $ 1,536,698,443 $ 1,340,172,625 --------------- --------------- Investments in securities, at value (including securities on loan/1/) (Note 1) $ 1,663,238,440 $ 1,349,083,971 Receivables: Investment securities sold 1,931,243 1,036,035 Dividends and interest 585,200 1,682,031 iShares sold - - --------------- --------------- Total Assets 1,665,754,883 1,351,802,037 --------------- --------------- LIABILITIES Payables: Investment securities purchased 3,348,478 1,992,653 Collateral for securities on loan (Note 5) 320,350,444 224,027,230 iShares redeemed 46,451 - Advisory fees (Note 2) 506,376 447,666 --------------- --------------- Total Liabilities 324,251,749 226,467,549 --------------- --------------- NET ASSETS $ 1,341,503,134 $ 1,125,334,488 =============== =============== NET ASSETS CONSIST OF: Paid-in capital $ 1,315,585,164 $ 1,141,747,989 Undistributed net investment income 568,446 2,307,869 Accumulated net realized loss (101,190,473) (27,632,716) Net unrealized appreciation (depreciation) 126,539,997 8,911,346 --------------- --------------- NET ASSETS $ 1,341,503,134 $ 1,125,334,488 =============== =============== iShares outstanding 25,450,000 8,100,000 =============== =============== Net asset value per iShare $ 52.71 $ 138.93 =============== ===============
/1/ Securities on loan with market values of $95,177,265, $64,336,123, $96,384,242, $807,265,370, $308,269,584 and $214,899,757, respectively. See Note 5. SEE NOTES TO FINANCIAL STATEMENTS. 110 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS STATEMENTS OF OPERATIONS (Unaudited) iSHARES TRUST For the six months ended September 30, 2003
iSHARES RUSSELL ------------------------------------------------------------------------ 1000 1000 Growth 1000 Value 2000 Index Fund Index Fund Index Fund Index Fund ---------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME Dividends/1/ $ 12,174,757 $ 5,171,939 $ 18,157,974 $ 18,867,504 Interest 9,686 3,527 7,912 11,651 Securities lending income 36,359 25,133 47,918 628,070 --------------- --------------- --------------- --------------- Total investment income 12,220,802 5,200,599 18,213,804 19,507,225 --------------- --------------- --------------- --------------- EXPENSES (Note 2) Advisory fees 1,035,936 998,990 1,444,962 2,893,128 --------------- --------------- --------------- --------------- Total expenses 1,035,936 998,990 1,444,962 2,893,128 --------------- --------------- --------------- --------------- Net investment income 11,184,866 4,201,609 16,768,842 16,614,097 --------------- --------------- --------------- --------------- NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from: Investments (19,413,682) (30,158,551) (26,133,794) (99,252,775) In-kind redemptions 27,188,424 22,741,229 14,786,579 178,806,412 --------------- --------------- --------------- --------------- Net realized gain (loss) 7,774,742 (7,417,322) (11,347,215) 79,553,637 --------------- --------------- --------------- --------------- Net change in unrealized appreciation (depreciation) on investments 162,440,039 154,225,181 203,501,010 640,013,886 --------------- --------------- --------------- --------------- Net realized and unrealized gain 170,214,781 146,807,859 192,153,795 719,567,523 --------------- --------------- --------------- --------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 181,399,647 $ 151,009,468 $ 208,922,637 $ 736,181,620 =============== =============== =============== =============== iSHARES RUSSELL ---------------------------------- 2000 Growth 2000 Value Index Fund Index Fund -------------------------------------------------------------- NET INVESTMENT INCOME Dividends/1/ $ 3,031,953 $ 8,847,937 Interest 3,294 4,719 Securities lending income 256,028 133,834 --------------- --------------- Total investment income 3,291,275 8,986,490 --------------- --------------- EXPENSES (Note 2) Advisory fees 1,204,938 1,138,603 --------------- --------------- Total expenses 1,204,938 1,138,603 --------------- --------------- Net investment income 2,086,337 7,847,887 --------------- --------------- NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from: Investments (16,748,020) (52,019,274) In-kind redemptions 18,430,176 55,688,873 --------------- --------------- Net realized gain (loss) 1,682,156 3,669,599 --------------- --------------- Net change in unrealized appreciation (depreciation) on investments 247,837,069 213,438,825 --------------- --------------- Net realized and unrealized gain 249,519,225 217,108,424 --------------- --------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 251,605,562 $ 224,956,311 =============== ===============
/1/ Net of foreign withholding tax of $1,357, $586, $2,170, $8,179, $4,104 and $1,124, respectively. SEE NOTES TO FINANCIAL STATEMENTS. FINANCIAL STATEMENTS 111 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, 2003 year ended September 30, 2003 year ended (Unaudited) March 31, 2003 (Unaudited) March 31, 2003 ----------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 11,184,866 $ 10,131,461 $ 4,201,609 $ 5,522,966 Net realized gain (loss) 7,774,742 (8,904,053) (7,417,322) (52,737,393) Net change in unrealized appreciation (depreciation) 162,440,039 (135,204,351) 154,225,181 (118,280,472) ------------------ ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations 181,399,647 (133,976,943) 151,009,468 (165,494,899) ------------------ ------------------ ------------------ ------------------ DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income (10,503,839) (9,653,259) (3,989,779) (5,153,751) ------------------ ------------------ ------------------ ------------------ Total distributions to iShareholders (10,503,839) (9,653,259) (3,989,779) (5,153,751) ------------------ ------------------ ------------------ ------------------ iSHARES TRANSACTIONS: iShares sold 700,421,560 689,592,834 359,712,478 714,075,496 iShares redeemed (129,840,621) (46,393,981) (255,115,738) (111,541,285) ------------------ ------------------ ------------------ ------------------ Net increase in net assets from iShares transactions 570,580,939 643,198,853 104,596,740 602,534,211 ------------------ ------------------ ------------------ ------------------ INCREASE IN NET ASSETS 741,476,747 499,568,651 251,616,429 431,885,561 NET ASSETS: Beginning of period 919,139,784 419,571,133 915,350,405 483,464,844 ------------------ ------------------ ------------------ ------------------ End of period $ 1,660,616,531 $ 919,139,784 $ 1,166,966,834 $ 915,350,405 ================== ================== ================== ================== Undistributed net investment income included in net assets at end of period $ 1,339,568 $ 658,541 $ 701,342 $ 489,512 ================== ================== ================== ================== iSHARES ISSUED AND REDEEMED: iShares sold 13,250,000 14,450,000 8,650,000 18,650,000 iShares redeemed (2,500,000) (1,000,000) (6,650,000) (2,950,000) ------------------ ------------------ ------------------ ------------------ Net increase in iShares outstanding 10,750,000 13,450,000 2,000,000 15,700,000 ================== ================== ================== ================== iSHARES RUSSELL 1000 VALUE INDEX FUND ---------------------------------------- For the six months ended For the September 30, 2003 year ended (Unaudited) March 31, 2003 --------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 16,768,842 $ 20,522,071 Net realized gain (loss) (11,347,215) (11,931,797) Net change in unrealized appreciation (depreciation) 203,501,010 (229,897,032) ------------------ ------------------ Net increase (decrease) in net assets resulting from operations 208,922,637 (221,306,758) ------------------ ------------------ DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income (16,072,789) (19,872,163) ------------------ ------------------ Total distributions to iShareholders (16,072,789) (19,872,163) ------------------ ------------------ iSHARES TRANSACTIONS: iShares sold 590,786,091 811,052,416 iShares redeemed (94,025,815) (277,129,955) ------------------ ------------------ Net increase in net assets from iShares transactions 496,760,276 533,922,461 ------------------ ----------------- INCREASE IN NET ASSETS 689,610,124 292,743,540 NET ASSETS: Beginning of period 984,132,689 691,389,149 ------------------ ------------------ End of period $ 1,673,742,813 $ 984,132,689 ================== ================== Undistributed net investment income included in net assets at end of period $ 1,688,324 $ 992,271 ================== ================== iSHARES ISSUED AND REDEEMED: iShares sold 11,750,000 16,450,000 iShares redeemed (1,850,000) (5,800,000) ------------------ ------------------ Net increase in iShares outstanding 9,900,000 10,650,000 ================== ==================
SEE NOTES TO FINANCIAL STATEMENTS. 112 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS STATEMENTS OF CHANGES IN NET ASSETS (Continued) iSHARES TRUST
iSHARES RUSSELL 2000 iSHARES RUSSELL 2000 INDEX FUND GROWTH INDEX FUND ---------------------------------------- ---------------------------------------- For the six For the six months ended For the months ended For the September 30, 2003 year ended September 30, 2003 year ended (Unaudited) March 31, 2003 (Unaudited) March 31, 2003 ----------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 16,614,097 $ 31,519,359 $ 2,086,337 $ 2,766,819 Net realized gain (loss) 79,553,637 (96,668,304) 1,682,156 (62,734,595) Net change in unrealized appreciation (depreciation) 640,013,886 (830,329,197) 247,837,069 (111,451,892) ------------------ ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations 736,181,620 (895,478,142) 251,605,562 (171,419,668) ------------------ ------------------ ------------------ ------------------ DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income (13,578,079) (31,917,146) (1,973,765) (2,341,216) ------------------ ------------------ ------------------ ------------------ Total distributions to iShareholders (13,578,079) (31,917,146) (1,973,765) (2,341,216) ------------------ ------------------ ------------------ ------------------ iSHARES TRANSACTIONS: iShares sold 2,189,368,030 3,038,486,032 504,816,194 455,490,755 iShares redeemed (1,078,750,731) (2,843,445,360) (51,130,570) (79,955,731) ------------------ ------------------ ------------------ ------------------ Net increase in net assets from iShares transactions 1,110,617,299 195,040,672 453,685,624 375,535,024 ------------------ ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS 1,833,220,840 (732,354,616) 703,317,421 201,774,140 NET ASSETS: Beginning of period 1,706,545,158 2,438,899,774 638,185,713 436,411,573 ------------------ ------------------ ------------------ ------------------ End of period $ 3,539,765,998 $ 1,706,545,158 $ 1,341,503,134 $ 638,185,713 ================== ================== ================== ================== Undistributed net investment income included in net assets at end of period $ 4,130,615 $ 1,094,597 $ 568,446 $ 455,874 ================== ================== ================== ================== iSHARES ISSUED AND REDEEMED: iShares sold 24,500,000 34,900,000 9,900,000 10,750,000 iShares redeemed (11,600,000) (35,600,000) (1,000,000) (1,900,000) ------------------ ------------------ ------------------ ------------------ Net increase (decrease) in iShares outstanding 12,900,000 (700,000) 8,900,000 8,850,000 ================== ================== ================== ================== iSHARES RUSSELL 2000 VALUE INDEX FUND ---------------------------------------- For the six months ended For the September 30, 2003 year ended (Unaudited) March 31, 2003 --------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 7,847,887 $ 15,284,000 Net realized gain (loss) 3,669,599 34,763,604 Net change in unrealized appreciation (depreciation) 213,438,825 (296,936,174) ------------------ ------------------ Net increase (decrease) in net assets resulting from operations 224,956,311 (246,888,570) ------------------ ------------------ DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income (6,345,439) (15,375,184) ------------------ ------------------ Total distributions to iShareholders (6,345,439) (15,375,184) ------------------ ------------------ iSHARES TRANSACTIONS: iShares sold 330,175,322 688,091,765 iShares redeemed (58,899,101) (628,348,346) ------------------ ------------------ Net increase in net assets from iShares transactions 271,276,221 59,743,419 ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS 489,887,093 (202,520,335) NET ASSETS: Beginning of period 635,447,395 837,967,730 ------------------ ------------------ End of period $ 1,125,334,488 $ 635,447,395 ================== ================== Undistributed net investment income included in net assets at end of period $ 2,307,869 $ 805,421 ================== ================== iSHARES ISSUED AND REDEEMED: iShares sold 2,550,000 5,150,000 iShares redeemed (450,000) (5,100,000) ------------------ ------------------ Net increase (decrease) in iShares outstanding 2,100,000 50,000 ================== ==================
SEE NOTES TO FINANCIAL STATEMENTS. FINANCIAL STATEMENTS 113 FINANCIAL HIGHLIGHTS iSHARES TRUST (For a share outstanding throughout each period)
iSHARES RUSSELL 1000 INDEX FUND ------------------------------------------------------------------------ Six months Period from ended May 15, 2000/1/ Sep. 30, 2003 Year ended Year ended to (Unaudited) Mar. 31, 2003 Mar. 31, 2002 Mar. 31, 2001 -------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 45.17 $ 60.81 $ 61.10 $ 76.78 ------------- ------------- ------------- --------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.40 0.72 0.70 0.64 Net realized and unrealized gain (loss) 8.22 (15.64) (0.30) (15.71) ------------- ------------- ------------- --------------- Total from investment operations 8.62 (14.92) 0.40 (15.07) ------------- ------------- ------------- --------------- LESS DISTRIBUTIONS FROM: Net investment income (0.39) (0.72) (0.69) (0.61) Net realized gain - - - (0.00)/5/ ------------- ------------- ------------- --------------- Total distributions (0.39) (0.72) (0.69) (0.61) ------------- ------------- ------------- --------------- NET ASSET VALUE, END OF PERIOD $ 53.40 $ 45.17 $ 60.81 $ 61.10 ============= ============= ============= =============== TOTAL RETURN 19.09%/2/ (24.59)% 0.68% (19.75)%/2/ ============= ============= ============= =============== RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s) $ 1,660,617 $ 919,140 $ 419,571 $ 207,723 Ratio of expenses to average net assets/3/ 0.15% 0.15% 0.15% 0.15% Ratio of net investment income to average net assets/3/ 1.62% 1.66% 1.23% 1.01% Portfolio turnover rate/4/ 4% 5% 8% 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. /5/ Rounds to less than $0.01. SEE NOTES TO FINANCIAL STATEMENTS. 114 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS FINANCIAL HIGHLIGHTS (Continued) iSHARES TRUST (For a share outstanding throughout each period)
iSHARES RUSSELL 1000 GROWTH INDEX FUND ------------------------------------------------------------------------ Six months Period from ended May 22, 2000/1/ Sep. 30, 2003 Year ended Year ended to (Unaudited) Mar. 31, 2003 Mar. 31, 2002 Mar. 31, 2001 -------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 35.97 $ 49.59 $ 50.99 $ 79.30 ------------- ------------- ------------- --------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.17 0.31 0.23 0.14 Net realized and unrealized gain (loss) 6.53 (13.63) (1.41) (28.20) ------------- ------------- ------------- --------------- Total from investment operations 6.70 (13.32) (1.18) (28.06) ------------- ------------- ------------- --------------- LESS DISTRIBUTIONS FROM: Net investment income (0.16) (0.30) (0.22) (0.14) Net realized gain - - - (0.11) ------------- ------------- ------------- --------------- Total distributions (0.16) (0.30) (0.22) (0.25) ------------- ------------- ------------- --------------- Net asset value, end of period $ 42.51 $ 35.97 $ 49.59 $ 50.99 ============= ============= ============= =============== Total return 18.63%/2/ (26.87)% (2.30)% (35.47)%/2/ ============= ============= ============= =============== RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s) $ 1,166,967 $ 915,350 $ 483,46 $ 209,078 Ratio of expenses to average net assets/3/ 0.20% 0.20% 0.20% 0.20% Ratio of net investment income to average net assets/3/ 0.84% 0.92% 0.52% 0.26% Portfolio turnover rate/4/ 10% 13% 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. SEE NOTES TO FINANCIAL STATEMENTS. FINANCIAL HIGHLIGHTS 115 FINANCIAL HIGHLIGHTS (Continued) iSHARES TRUST (For a share outstanding throughout each period)
iSHARES RUSSELL 1000 VALUE INDEX FUND ------------------------------------------------------------------ Six months Period from ended May 22, 2000/1/ Sep. 30, 2003 Year ended Year ended to (Unaudited) Mar. 31, 2003 Mar. 31, 2002 Mar. 31, 2001 ------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 43.45 $ 57.62 $ 56.18 $ 56.10 ------------- ------------- ------------- --------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.54 1.02 0.90 0.66 Net realized and unrealized gain (loss) 7.96 (14.18) 1.43 0.04 ------------- ------------- ------------- --------------- Total from investment operations 8.50 (13.16) 2.33 0.70 ------------- ------------- ------------- --------------- LESS DISTRIBUTIONS FROM: Net investment income (0.53) (1.01) (0.89) (0.62) ------------- ------------- ------------- --------------- Total distributions (0.53) (1.01) (0.89) (0.62) ------------- ------------- ------------- --------------- NET ASSET VALUE, END OF PERIOD $ 51.42 $ 43.45 $ 57.62 $ 56.18 ============= ============= ============= =============== TOTAL RETURN 19.55%/2/ (22.95)% 4.22% 1.22%/2/ ============= ============= ============= =============== RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s) $ 1,673,743 $ 984,133 $ 691,389 $ 191,005 Ratio of expenses to average net assets/3/ 0.20% 0.20% 0.20% 0.20% Ratio of net investment income to average net assets/3/ 2.32% 2.29% 1.82% 1.64% Portfolio turnover rate/4/ 12% 20% 16% 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. 116 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS FINANCIAL HIGHLIGHTS (Continued) iSHARES TRUST (For a share outstanding throughout each period)
iSHARES RUSSELL 2000 INDEX FUND ------------------------------------------------------------------ Six months Period from ended May 22, 2000/1/ Sep. 30, 2003 Year ended Year ended to (Unaudited) Mar. 31, 2003 Mar. 31, 2002 Mar. 31, 2001 ------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 72.62 $ 100.78 $ 89.80 $ 94.33 ------------- ------------- ------------- --------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.46 1.02 1.04 0.98 Net realized and unrealized gain (loss) 24.56 (28.15) 10.90 (4.47) ------------- ------------- ------------- --------------- Total from investment operations 25.02 (27.13) 11.94 (3.49) ------------- ------------- ------------- --------------- LESS DISTRIBUTIONS FROM: Net investment income (0.39) (1.03) (0.96) (0.88) Net realized gain - - - (0.16) ------------- ------------- ------------- --------------- Total distributions (0.39) (1.03) (0.96) (1.04) ------------- ------------- ------------- --------------- Net asset value, end of period $ 97.25 $ 72.62 $ 100.78 $ 89.80 ============= ============= ============= =============== Total return 34.45%/2/ (26.99)% 13.40% (3.77)%/2/ ============= ============= ============= =============== RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s) $ 3,539,766 $ 1,706,545 $ 2,438,900 $ 713,939 Ratio of expenses to average net assets/3/ 0.20% 0.20% 0.20% 0.20% Ratio of net investment income to average net assets/3/ 1.15% 1.28% 1.25% 1.39% Portfolio turnover rate/4/ 26% 30% 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 HIGHLIGHTS 117 FINANCIAL HIGHLIGHTS (Continued) iSHARES TRUST (For a share outstanding throughout each period)
iSHARES RUSSELL 2000 GROWTH INDEX FUND -------------------------------------------------------------------- Six months Period from ended Jul. 24, 2000/1/ Sep. 30, 2003 Year ended Year ended to (Unaudited) Mar. 31, 2003 Mar. 31, 2002 Mar. 31, 2001 -------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 38.56 $ 56.68 $ 54.48 $ 81.36 ------------- ------------- ------------- ---------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.08 0.21 0.11 0.05 Net realized and unrealized gain (loss) 14.16 (18.14) 2.19 (26.85) ------------- ------------- ------------- ---------------- Total from investment operations 14.24 (17.93) 2.30 (26.80) ------------- ------------- ------------- ---------------- LESS DISTRIBUTIONS FROM: Net investment income (0.09) (0.19) (0.10) (0.04) Net realized gain - - - (0.04) ------------- ------------- ------------- ---------------- Total distributions (0.09) (0.19) (0.10) (0.08) ------------- ------------- ------------- ---------------- Net asset value, end of period $ 52.71 $ 38.56 $ 56.68 $ 54.48 ============= ============= ============= ================ Total return 36.95%/2/ (31.65)% 4.24% (32.96)%/2/ ============= ============= ============= ================ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s) $ 1,341,503 $ 638,186 $ 436,412 $ 155,258 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/ 0.43% 0.58% 0.22% 0.14% Portfolio turnover rate/4/ 39% 41% 28% 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. 118 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS FINANCIAL HIGHLIGHTS (Continued) iSHARES TRUST (For a share outstanding throughout each period)
iSHARES RUSSELL 2000 VALUE INDEX FUND ------------------------------------------------------------------ Six months Period from ended Jul. 24, 2000/1/ Sep. 30, 2003 Year ended Year ended to (Unaudited) Mar. 31, 2003 Mar. 31, 2002 Mar. 31, 2001 ------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 105.91 $ 140.83 $ 116.50 $ 103.35 ------------- ------------- ------------- --------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 1.00 2.23 2.30 1.49 Net realized and unrealized gain (loss) 32.87 (34.90) 24.16 12.97 ------------- ------------- ------------- --------------- Total from investment operations 33.87 (32.67) 26.46 14.46 ------------- ------------- ------------- --------------- LESS DISTRIBUTIONS FROM: Net investment income (0.85) (2.25) (2.13) (1.28) Net realized gain - - - (0.03) ------------- ------------- ------------- --------------- Total distributions (0.85) (2.25) (2.13) (1.31) ------------- ------------- ------------- --------------- Net asset value, end of period $ 138.93 $ 105.91 $ 140.83 $ 116.50 ============= ============= ============= =============== Total return 32.00%/2/ (23.35)% 23.05% 14.05%/2/ ============= ============= ============= =============== RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s) $ 1,125,334 $ 635,447 $ 837,968 $ 273,763 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/ 1.72% 1.85% 2.07% 2.40% Portfolio turnover rate/4/ 15% 45% 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. FINANCIAL HIGHLIGHTS 119 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 statutory trust pursuant to an Agreement and Declaration of Trust dated December 16, 1999. As of September 30, 2003, the Trust offered 57 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. Under the Funds' organizational documents, their officers and trustees are indemnified against certain liabilities that may arise out of the performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds' maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote. 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. Beginning April 14, 2003, securities for which the primary market is the National Association of Securities Dealers Automated Quotations National Market System ("NASDAQ") are valued at the NASDAQ Official Closing Price. 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. Short-term investments 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. 120 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS NOTES TO THE FINANCIAL STATEMENTS (Unaudited) (Continued) iSHARES TRUST At March 31, 2003, 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 $ 610,716 $ - $ 610,716 Russell 1000 Growth 489,512 - 489,512 Russell 1000 Value 860,250 - 860,250 Russell 2000 Growth 319,221 - 319,221
For the year ended March 31, 2003, the tax characterization of distributions paid for each Fund was equal to the book characterization of distributions paid. 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, 2003. The Funds had tax basis net capital loss carryforwards at March 31, 2003, the tax year-end of the Funds, as follows:
EXPIRING EXPIRING EXPIRING iSHARES INDEX FUND 2009 2010 2011 TOTAL ----------------------------------------------------------------------------------- Russell 1000 $ - $ 12,325,552 $ 9,763,804 $ 22,089,356 Russell 1000 Growth - 20,107,067 68,492,707 88,599,774 Russell 1000 Value 99,151 5,765,240 15,563,320 21,427,711 Russell 2000 - 47,692,929 112,740,686 160,433,615 Russell 2000 Growth - 14,797,300 71,115,684 85,912,984 Russell 2000 Value - 6,847,139 18,124,608 24,971,747
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, 2003, certain Funds realized net capital gains or losses resulting from in-kind redemptions of large blocks of 50,000 or more iShares or multiples thereof ("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. 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, 2003 are disclosed in the Funds' Statements of Operations. NOTES TO THE FINANCIAL STATEMENTS 121 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. The Funds did not enter into any repurchase agreements at September 30, 2003; however, cash collateral for securities on loan was invested in repurchase agreements at September 30, 2003. For further information, see Note 5, below. 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 and transfer agent for the Trust. 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. 122 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS NOTES TO THE FINANCIAL STATEMENTS (Unaudited) (Continued) iSHARES TRUST Barclays Global Investors, N.A. ("BGI") serves as securities lending agent for the Trust. BGI is an affiliate of BGFA, the Funds' investment advisor. As securities lending agent, BGI receives a fee based on a share of the income earned on investment of the cash collateral received for the loan of securities. For the six months ended September 30, 2003, BGI earned securities lending agent fees as follows: SECURITIES LENDING iSHARES INDEX FUND AGENT FEES ------------------------------------------ Russell 1000 $ 39,503 Russell 1000 Growth 25,288 Russell 1000 Value 48,536 Russell 2000 631,835 Russell 2000 Growth 258,275 Russell 2000 Value 134,664 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. 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, 2003, 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") and Prime Money Market Fund ("PMMF") of Barclays Global Investors Funds. The IMMF and PMMF are feeder funds in a master/feeder fund structure that invests substantially all of its assets in the Money Market Master Portfolio and Prime Money Market Master Portfolio, respectively, which are managed by BGFA, the Funds' investment advisor. The IMMF and PMMF are open-end money market funds available only to institutional investors, including other investment companies managed by BGFA. The IMMF and PMMF seek a high level of income consistent with liquidity and the preservation of capital. While the IMMF and PMMF do not directly charge an advisory fee, the master portfolios in which they invest do charge an advisory fee. Income distributions from the IMMF and PMMF 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, the Funds executed cross trades for the six months ended September 30, 2003. Cross trading is the buying or selling of portfolio securities between funds to which BGFA (or an affiliate) serves as investment advisor. The Board reviewed all such transactions executed during the second quarter of 2003 and concluded that they were in compliance with the requirements and restrictions set forth by Rule 17a-7. The Board is scheduled at its next meeting to review all such transactions executed during the third quarter of 2003. As of September 30, 2003, certain trustees and officers of the Trust are also employees of BGFA and its affiliates or employees of Investors Bank. NOTES TO THE FINANCIAL STATEMENTS 123 NOTES TO THE FINANCIAL STATEMENTS (Unaudited) (Continued) iSHARES TRUST 3. INVESTMENT PORTFOLIO TRANSACTIONS Purchases and sales of investments (excluding in-kind transactions and short-term securities) for the six months ended September 30, 2003 were as follows: iSHARES INDEX FUND PURCHASES SALES -------------------------------------------------------------------- Russell 1000 $ 58,723,400 $ 57,850,076 Russell 1000 Growth 105,309,418 104,964,965 Russell 1000 Value 177,334,329 176,418,341 Russell 2000 741,270,582 738,215,855 Russell 2000 Growth 372,227,249 371,516,164 Russell 2000 Value 139,202,396 138,300,014 In-kind transactions for the six months ended September 30, 2003 were as follows: IN-KIND IN-KIND iSHARES INDEX FUND PURCHASES SALES ------------------------------------------------------------------------ Russell 1000 $ 699,601,037 $ 129,632,236 Russell 1000 Growth 359,430,834 254,828,455 Russell 1000 Value 589,675,529 93,818,418 Russell 2000 2,186,689,690 1,076,946,686 Russell 2000 Growth 504,223,915 51,075,201 Russell 2000 Value 514,740,634 243,408,208 At September 30, 2003, the aggregate unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:
NET UNREALIZED TAX UNREALIZED UNREALIZED APPRECIATION iSHARES INDEX FUND COST APPRECIATION DEPRECIATION (DEPRECIATION) ----------------------------------------------------------------------------------------------- Russell 1000 $ 1,798,370,420 $ 56,955,209 $ (96,194,315) $ (39,239,106) Russell 1000 Growth 1,274,982,925 31,143,348 (72,799,896) (41,156,548) Russell 1000 Value 1,833,433,539 47,500,741 (106,879,586) (59,378,845) Russell 2000 4,580,064,733 196,210,391 (395,379,248) (199,168,857) Russell 2000 Growth 1,556,125,069 154,606,035 (47,492,664) 107,113,371 Russell 2000 Value 1,349,938,885 76,211,535 (77,066,449) (854,914)
124 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS NOTES TO THE FINANCIAL STATEMENTS (Unaudited) (Continued) iSHARES TRUST 4. iSHARES TRANSACTIONS At September 30, 2003, 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 a Fund of securities lending are that the borrower may not provide additional collateral when required, or return the securities when due. As of September 30, 2003, the Funds had loaned securities which were collateralized by cash. The cash collateral received was invested in a joint account which invests in securities with remaining maturities of 397 days or less and money market mutual funds. Income from the joint account is allocated daily to each Fund, based on each Fund's portion of the total cash collateral received. The market value of the securities on loan at September 30, 2003 and the value of the related collateral are disclosed in the Statements of Assets and Liabilities. NOTES TO THE FINANCIAL STATEMENTS 125 THE iSHARES FAMILY OF FUNDS The following is a list of iShares Funds being offered as of November 28, 2003, 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. The prospectus 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 Transportation Average Index Fund (IYT) iShares Dow Jones U.S. Basic Materials Sector Index Fund (IYM) iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund (IYC) iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund (IYK) iShares Dow Jones U.S. Energy Sector Index Fund (IYE) iShares Dow Jones U.S. Financial Sector Index Fund (IYF) iShares Dow Jones U.S. 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. 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) SPECIALTY iShares Dow Jones Select Dividend Index Fund (DVY) FIXED INCOME iShares GS $ InvesTop(TM) Corporate Bond Fund (LQD) 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 Lehman Aggregate Bond Fund (AGG) 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) iShares MSCI Emerging Markets Index Fund (EEM) 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) INTERNATIONAL/EMERGING COUNTRY iShares MSCI Brazil Index Fund (EWZ) iShares MSCI Malaysia Index Fund (EWM) iShares MSCI Mexico Index Fund (EWW) iShares MSCI South Africa Index Fund (EZA) 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) This advertising section does not constitute part of the 2003 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)" and "Goldman Sachs(R)" are trademarks of Goldman, Sachs & Co. 126 2003 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 Investments Services (BGIS) assists in the marketing of iShares. BGFA and BGIS are subsidiaries of Barclays Global Investors, N.A., a wholly owned subsidiary of Barclays Bank PLC, none of which is affiliated with SEI. 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)2003 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 Fund's shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus. iShares(R) Industrial strength investment tools from BARCLAYS GLOBAL INVESTORS 1 800 iSHARES (1 800 474 2737) WWW.iSHARES.COM BARCLAYS iShares(R) 2003 SEMI-ANNUAL REPORT TO SHAREHOLDERS SEPTEMBER 30, 2003 [GRAPHIC APPEARS HERE] 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 Managers' Discussion & Analysis ........................................... 4 Schedules of Investments .................................................. 8 iShares Russell 3000 Index Fund ......................................... 8 iShares Russell 3000 Growth Index Fund .................................. 49 iShares Russell 3000 Value Index Fund ................................... 75 iShares Russell Midcap Index Fund ....................................... 103 iShares Russell Midcap Growth Index Fund ................................ 115 iShares Russell Midcap Value Index Fund ................................. 123 Financial Statements ...................................................... 133 Financial Highlights ...................................................... 137 Notes to the Financial Statements ......................................... 142 iShares Family of Funds ................................................... 150 TO OUR SHAREHOLDERS For many investors, the last few years have been difficult and challenging. The collapse of the stock market bubble, a tepid economy, corporate accounting scandals, lackluster company earnings and the geopolitical situation all contributed to a three-year bear market. Stock market gains during the first half of 2003 give some hope that the markets have turned a corner, but there is no guarantee that challenging market conditions will not return. iShares have continued to innovate and expand, offering more tools that help investors tailor their portfolios to achieve diversity and address volatility in a complex market environment. For example, we recently launched the iShares Dow Jones Transportation Average and iShares Dow Jones Select Dividend Index Funds and in April of this year, iShares launched an emerging markets exchange traded fund based on the MSCI Emerging Markets Free Index. Last year, iShares launched the first fixed income exchange traded funds, which BUSINESS WEEK named one of the best new products of 2002./1/ We have added a Lehman Aggregate Bond Fund to our fixed income menu, enabling investors to track one of the most well-known U.S. fixed income market indexes. We will also be adding the iShares Lehman TIPS Bond Fund, which provides the opportunity to invest in inflation protected government securities. Assets under management for the fixed income iShares funds were $4.2 billion as of September 30, 2003. With the addition of these iShares, investors can achieve even more diversity in their portfolios -- and at lower cost, since iShares fees are, on average, about half those of actively managed funds./2/ With over 80 different iShares to choose from, investors have the ability to build a diverse portfolio that covers a wide swath of market segments such as capitalization, sectors, value and growth, international and fixed income. That is important because market segments do not tend to move in tandem, particularly in volatile markets. Economic conditions such as inflation, interest rate levels, currency valuations or the price of oil, as well as the normal pace of the economic cycle, all may result in one market segment outperforming another. We encourage you to talk with your financial advisor about what blend of investments or asset allocation can best help you meet your financial goals. Throughout the coming year we will continue to work closely with the financial advisor community to introduce innovative strategies and structures for their client's portfolios. To learn more about iShares, we encourage you to visit our web site, www.iShares.com. At times like these, the importance of sound, disciplined investing is greater than ever. Such investing should be grounded in two key concepts: keeping the costs associated with investing as low as possible, and maintaining a diversified portfolio. That is why we believe iShares are an indispensable tool for investors in the current market. And that is also why more and more investors have recognized the benefits of iShares. Assets under management for iShares continue to grow, and as of September 30, 2003, had reached $44.5 billion. On behalf of the iShares family of funds and our colleagues at Barclays Global Investors, we thank you for making iShares a part of your portfolio. We look forward to meeting your investment needs in the year ahead. /s/ Lee T. Kranefuss Lee T. Kranefuss PRESIDENT AND CHAIRMAN OF THE BOARD OF TRUSTEES FOR 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. ---------- /1/ BUSINESS WEEK, 12/16/02. /2/ Morningstar Principia, BGI analysis 5/03. SHAREHOLDER LETTER 1 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. The annual management fees of iShares may be substantially less than those of most mutual funds. iShares transactions will result in brokerage commissions, but the savings from lower annual fees can help offset these costs. Past performance does not guarantee future results. iShares are not sponsored, endorsed, or issued by Lehman Brothers, nor are they sponsored, endorsed, issued, sold or promoted by Dow Jones & Company Inc., or Morgan Stanley Capital International. 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 the companies listed above. This advertising section does not constitute part of the 2003 Semi-Annual Report. 2 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS THIS PAGE INTENTIONALLY LEFT BLANK. 3 MANAGERS' DISCUSSION & ANALYSIS iSHARES RUSSELL 3000 INDEX FUNDS Performance as of 9/30/03
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS ------------------------------------------------- ------------------------- YEAR ENDED 9/30/03 INCEPTION TO 9/30/03 INCEPTION TO 9/30/03 ---------------------- ------------------------- ------------------------- iSHARES INDEX FUND NAV MARKET INDEX NAV MARKET INDEX NAV MARKET INDEX Russell 3000 25.63% 26.12% 25.92% (7.46)% (7.42)% (7.26)% (22.95)% (22.84)% (22.37)% Russell 3000 Growth 26.68% 27.06% 26.94% (19.14)% (19.12)% (18.96)% (49.22)% (49.17)% (48.86)% Russell 3000 Value 24.49% 24.81% 24.89% 0.40% 0.41% 0.63% 1.27% 1.31% 2.03%
"Total returns for the period since inception" are calculated from the inception date of each Fund (5/22/00, 7/24/00 and 7/24/00, respectively). "Average annual total returns" represent the average annual change in value of an investment over the periods indicated. "Cumulative total returns" represent 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 of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return ("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 (5/26/00, 7/28/00 and 7/28/00, respectively), the NAV 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 gain distributions have been reinvested in the Fund at Market Price and NAV, 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. Each Fund's past performance is no guarantee of future results. [CHART APPEARS HERE] TOP 10 FUND SECTORS (% OF NET ASSETS) iSHARES RUSSELL 3000 INDEX FUND FINANCIAL SERVICES 22.98% TECHNOLOGY 14.90% HEALTH CARE 14.30% CONSUMER DISCRETIONARY 14.18% UTILITIES 6.93% CONSUMER STAPLES 6.93% DIVERSIFIED 4.07% PRODUCER DURABLES 4.06% INTEGRATED OILS 3.81% MATERIALS & PROCESSING 3.66% [CHART APPEARS HERE] TOP 10 FUND SECTORS (% OF NET ASSETS) iSHARES RUSSELL 3000 GROWTH INDEX FUND HEALTH CARE 24.35% TECHNOLOGY 23.06% CONSUMER DISCRETIONARY 17.33% FINANCIAL SERVICES 10.80% CONSUMER STAPLES 8.09% DIVERSIFIED 6.67% PRODUCER DURABLES 3.60% AUTO & TRANSPORTATION 1.81% UTILITIES 1.50% MATERIALS & PROCESSING 1.45% [CHART APPEARS HERE] TOP 10 FUND SECTORS (% OF NET ASSETS) iSHARES RUSSELL 3000 VALUE INDEX FUND FINANCIAL SERVICES 35.57% UTILITIES 12.54% CONSUMER DISCRETIONARY 10.96% INTEGRATED OILS 7.75% TECHNOLOGY 6.54% MATERIALS & PROCESSING 5.93% CONSUMER STAPLES 5.70% PRODUCER DURABLES 4.50% HEALTH CARE 3.94% AUTO & TRANSPORTATION 2.91% 4 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS The iShares Russell 3000 Index Fund (the "Fund") seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Russell 3000 Index (the "Index"). The iShares Russell 3000 Growth Index Fund (the "Growth Fund") and iShares Russell 3000 Value Index Fund (the "Value 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 Index, as measured by the Russell 3000 Growth Index (the "Growth Index") and the Russell 3000 Value Index (the "Value Index"), respectively. For the six-month period ended September 30, 2003 (the "reporting period"), the Fund returned 20.08%, compared to a return of 20.23% by the Index. The Growth Fund and the Value Fund returned 19.83% and 20.39%, respectively, while the Growth Index returned 19.94% and the Value Index returned 20.56%. Investors finally found cause for optimism during the reporting period. Following an official conclusion to the war in Iraq, markets headed upward throughout the period. Although first quarter GDP figures revealed tepid growth, second quarter annual growth rates were a healthier 3.3%. Individual and corporate spending contributed to the higher-than-expected rate, but the major driver was government spending, which grew at an annual pace of 8.5%. This increase was largely due to a 45.8% annual rate increase in national defense spending during the second quarter. Corporate earnings announcements also contributed to the more encouraging outlook. One nagging problem continued to be unemployment, which worsened during the reporting period. Every sector within the Index posted a gain for the reporting period. Information technology (17.40% of the Index as of September 30, 2003) led the way with a 34.07% gain. Consumer discretionary, the largest sector at 22.39% of the Index, returned 23.99%. Financials (21.71% of the Index as of September 30, 2003) rose 23.82%, and industrials (10.11% of the Index as of September 30, 2003) climbed 21.53%. The laggard of the group, health care (14.53% of the Index as of September 30, 2003) logged a respectable 9.30% gain. Among the Index's ten largest individual constituents, performance was generally positive. Intel Corp. (1.73% of the Index as of September 30, 2003) gained 69.04%, and Cisco Systems Inc. (1.32% of the Index as of September 30, 2003) rose 50.92%. Citigroup Inc. (2.25% of the Index as of September 30, 2003) climbed 32.10%. General Electric Co., the largest weighting at 2.87% of the Index as of September 30, 2003), posted a 16.90% gain. The only two of the ten largest weightings to deliver negative results during the reporting period were Johnson & Johnson and Pfizer Inc. (respectively 1.41% and 2.31% of the Index as of September 30, 2003), which declined 14.43% and 2.50%, respectively. MANAGERS' DISCUSSION & ANALYSIS 5 MANAGERS' DISCUSSION & ANALYSIS iSHARES RUSSELL MIDCAP INDEX FUNDS Performance as of 9/30/03
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS ---------------------------------------------------- ------------------------- YEAR ENDED 9/30/03 INCEPTION TO 9/30/03 INCEPTION TO 9/30/03 ------------------------- ------------------------- ------------------------- iSHARES INDEX FUND NAV MARKET INDEX NAV MARKET INDEX NAV MARKET INDEX Russell Midcap 32.37% 32.53% 32.63% 0.77% 0.83% 0.88% 1.72% 1.84% 1.96% Russell Midcap Growth 38.57% 38.75% 38.89% (4.55)% (4.51)% (4.33)% (9.77)% (9.69)% (9.31)% Russell Midcap Value 27.96% 27.98% 28.30% 3.25% 3.22% 3.39% 7.31% 7.26% 7.65%
"Total returns for the period since inception" are calculated from the inception date of each Fund (7/17/01). "Average annual total returns" represent the average annual change in value of an investment over the periods indicated. "Cumulative total returns" represent 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 of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return ("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 (7/20/01), the NAV 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 gain distributions have been reinvested in the Fund at Market Price and NAV, 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. Each Fund's past performance is no guarantee of future results. [CHART APPEARS HERE] TOP 10 FUND SECTORS (% OF NET ASSETS) iSHARES RUSSELL MIDCAP INDEX FUND FINANCIAL SERVICES 24.26% CONSUMER DISCRETIONARY 18.75% TECHNOLOGY 12.82% HEALTH CARE 10.35% UTILITES 8.10% MATERIALS & PROCESSING 6.56% PRODUCER DURABLES 6.26% CONSUMER STAPLES 3.65% OTHER ENERGY 3.31% AUTO & TRANSPORTATION 2.77% [CHART APPEARS HERE] TOP 10 FUND SECTORS (% OF NET ASSETS) iSHARES RUSSELL MIDCAP GROWTH INDEX FUND CONSUMER DISCRETIONARY 27.18% HEALTH CARE 20.35% TECHNOLOGY 19.43% FINANCIAL SERVICES 12.42% PRODUCER DURABLES 6.77% MATERIALS & PROCESSING 3.94% OTHER ENERGY 3.19% CONSUMER STAPLES 2.39% AUTO & TRANSPORTATION 1.90% UTILITIES 1.64% [CHART APPEARS HERE] TOP 10 FUND SECTORS (% OF NET ASSETS) iSHARES RUSSELL MIDCAP VALUE INDEX FUND FINANCIAL SERVICES 32.35% CONSUMER DISCRETIONARY 13.00% UTILITIES 12.52% MATERIALS & PROCESSING 8.37% TECHNOLOGY 8.31% PRODUCER DURABLES 5.90% CONSUMER STAPLES 4.52% HEALTH CARE 3.52% OTHER ENERGY 3.38% AUTO & TRANSPORTATION 3.36% 6 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS The iShares Russell Midcap Index Fund (the "Fund") seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Russell Midcap Index (the "Index"). The iShares Russell Midcap Growth Index Fund (the "Growth Fund") and iShares Russell Midcap Value Index Fund (the "Value 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 Index, as measured by the Russell Midcap Growth Index (the "Growth Index") and the Russell Midcap Value Index (the "Value Index"), respectively. For the six-month period ended September 30, 2003 (the "reporting period"), the Fund returned 25.72%, compared to a return of 25.87% by the Index. The Growth Fund and the Value Fund returned 27.10% and 24.72%, respectively, while the Growth Index returned 27.26% and the Value Index returned 24.90%. Equity markets staged a rebound during the six-month reporting period. In response to the official conclusion to the war in Iraq and the release of encouraging economic news, stocks generally led an upward march throughout the reporting period. GDP growth for the second quarter was revised upward several times, ultimately showing a growth rate of 3.3%. Corporate earnings announcements were also encouraging, showing both higher earnings levels and stabilizing earnings expectations. In addition, earnings expectations have become more accurate than in previous reporting periods. Earnings growth became strong, reaching double-digit rates. The job front, however, continued to be a problem, with jobless levels climbing during the reporting period and non-farm payrolls declining every month of the reporting period. Mid-cap stocks, as measured by the Index, outperformed the broader Russell 3000 Index during the reporting period. Growth stocks outperformed their value counterparts, as the encouraging news on economic and corporate fronts persuaded many investors to return to more growth-oriented securities. Within the Index, every sector delivered a positive return. Growth-oriented technology stocks, which had endured the steepest declines in previous reporting periods, enjoyed some of the biggest gains. Within the Index, information technology (17.90% of the Index as of September 30, 2003) gained 43.71%, and consumer discretionary (18.38% of the Index as of September 30, 2003) climbed 26.24%. Telecommunication services (1.22% of the Index as of September 30, 2003) rose 24.35%, industrials (9.09% of the Index as of September 30, 2003) climbed 24.22%, and health care (11.03% of the Index as of September 30, 2003) gained 23.02%. Financials, the largest sector weighting at 21.70% of the Index, returned 23.03%. The Index's ten largest constituents also demonstrated strong performance during the reporting period. Sears Roebuck & Co. (0.49% of the Index as of September 30, 2003) climbed 81.08%, and Agilent Technologies Inc. (0.43% of the Index as of September 30, 2003) rose 68.14%. The largest weighting at 0.51% of the Index, Corning Inc. gained 61.30%. Electronic Arts Inc. (0.42% of the Index as of September 30, 2003) returned 57.20%. Staples Inc. and Safeway Inc. (respectively 0.46% and 0.42% of the Index as of September 30, 2003) returned 30.06% and 21.18%, respectively. MANAGERS' DISCUSSION & ANALYSIS 7 SCHEDULE OF INVESTMENTS (Unaudited) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- COMMON STOCKS - 99.92% General Electric Co. 1,052,746 $ 31,382,358 Microsoft Corp. 942,040 26,179,292 Exxon Mobil Corp. 703,572 25,750,735 Pfizer Inc. 831,563 25,262,884 Citigroup Inc. 542,269 24,678,662 Intel Corp. 687,969 18,926,027 Wal-Mart Stores Inc. 279,829 15,628,450 Johnson & Johnson 312,592 15,479,556 International Business Machines Corp. 170,477 15,058,233 Cisco Systems Inc./1/ 739,008 14,440,216 American International Group Inc. 241,680 13,944,936 Procter & Gamble Co. 136,316 12,652,851 Bank of America Corp. 157,725 12,308,859 Merck & Co. Inc. 236,097 11,951,230 Coca-Cola Co. (The) 225,642 9,693,580 Verizon Communications Inc. 289,572 9,393,716 Altria Group Inc. 213,198 9,338,072 Wells Fargo & Company 176,371 9,083,107 Amgen Inc./1/ 135,775 8,766,992 PepsiCo Inc. 180,902 8,290,739 ChevronTexaco Corp. 112,485 8,037,053 Dell Inc./1/ 239,850 8,008,591 SBC Communications Inc. 349,819 7,783,473 Home Depot Inc. 241,518 7,692,348 JP Morgan Chase & Co. 214,183 7,352,902 Fannie Mae 103,166 7,242,253 Abbott Laboratories 164,362 6,993,603 Comcast Corp. Class A/1/ 225,188 6,953,805 AOL Time Warner Inc./1/ 456,157 6,892,532 Wyeth 139,820 6,445,702 Viacom Inc. Class B 163,068 6,245,504 Hewlett-Packard Co. 321,835 6,230,726 Lilly (Eli) & Co. 101,616 6,035,990 Medtronic Inc. 128,406 6,024,810 3M Co. 82,308 5,685,014 Morgan Stanley 111,623 5,632,497 Wachovia Corp. 134,843 5,554,183 American Express Co. 120,992 5,451,900 Bristol-Myers Squibb Co. 204,096 5,237,103 Merrill Lynch & Co. Inc. 97,683 5,228,971 U.S. Bancorp 202,139 4,849,315 Bank One Corp. 120,281 4,648,861 BellSouth Corp. 194,461 4,604,836 Oracle Corp./1/ 407,969 4,577,412 Walt Disney Co. (The) 215,137 4,339,313 Anheuser-Busch Companies Inc. 87,854 4,334,716 Du Pont (E.I.) de Nemours and Co. 105,059 4,203,411 Lowe's Companies Inc. 80,058 4,155,010 Texas Instruments Inc. 182,083 4,151,492 ConocoPhillips 71,495 3,914,351 Washington Mutual Inc. 97,977 3,857,354 Freddie Mac 73,398 3,842,385 United Technologies Corp. 49,270 3,807,586 Target Corp. 95,903 3,608,830 QUALCOMM Inc. 83,256 3,466,780 United Parcel Service Inc. Class B 54,111 3,452,282 Gillette Co. (The) 107,520 3,438,490 FleetBoston Financial Corp. 111,033 3,347,645 Walgreen Co. 108,223 3,315,953 Applied Materials Inc./1/ 174,655 3,168,242 Colgate-Palmolive Co. 56,657 3,166,560 McDonald's Corp. 133,966 3,153,560 First Data Corp. 78,752 3,146,930 Dow Chemical Co. (The) 96,602 3,143,429 UnitedHealth Group Inc. 58,578 2,947,645 Fifth Third Bancorp 52,790 2,928,261 Motorola Inc. 244,274 2,923,960 EMC Corp./1/ 230,283 2,908,474 Cardinal Health Inc. 47,172 2,754,373 Kimberly-Clark Corp. 53,570 2,749,212 Allstate Corp. (The) 74,127 2,707,859 Marsh & McLennan Companies Inc. 56,576 2,693,583 Liberty Media Corp. Class A/1/ 267,467 2,666,646 Boeing Co. (The) 77,089 2,646,465 MBNA Corp. 113,206 2,581,097 Goldman Sachs Group Inc. (The) 30,010 2,517,839 Caterpillar Inc. 36,268 2,496,689 Bank of New York Co. Inc. (The) 81,412 2,369,903 8 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- eBay Inc./1/ 44,220 $ 2,366,212 Schering-Plough Corp. 155,049 2,362,947 Emerson Electric Co. 44,433 2,339,397 Alcoa Inc. 89,047 2,329,470 Honeywell International Inc. 87,591 2,308,023 Automatic Data Processing Inc. 62,973 2,257,582 Sysco Corp. 68,407 2,237,593 Southern Company 76,140 2,232,425 Gannett Co. Inc. 28,280 2,193,397 Prudential Financial Inc. 58,090 2,170,242 Exelon Corp. 34,119 2,166,556 Boston Scientific Corp./1/ 33,955 2,166,329 Clear Channel Communications Inc. 55,315 2,118,564 BB&T Corp. 58,739 2,109,317 Dominion Resources Inc. 33,841 2,094,758 FedEx Corp. 31,508 2,030,060 Cendant Corp./1/ 107,254 2,004,577 Ford Motor Company 185,216 1,994,776 General Motors Corp. 48,702 1,993,373 International Paper Co. 50,436 1,968,013 AT&T Wireless Services Inc./1/ 236,414 1,933,867 HCA Inc. 51,665 1,904,372 Yahoo! Inc./1/ 52,564 1,859,714 Forest Laboratories Inc./1/ 36,013 1,852,869 General Mills Inc. 38,981 1,834,836 Baxter International Inc. 62,921 1,828,484 Illinois Tool Works Inc. 27,136 1,798,031 Lockheed Martin Corp. 38,773 1,789,374 AT&T Corp. 82,951 1,787,594 Lehman Brothers Holdings Inc. 25,621 1,769,899 AFLAC Inc. 54,372 1,756,216 Genentech Inc./1/ 21,600 1,731,024 National City Corp. 58,484 1,722,939 SLM Corp. 43,644 1,700,370 Nextel Communications Inc. Class A/1/ 86,348 1,700,192 Duke Energy Corp. 95,057 1,692,965 Waste Management Inc. 62,386 1,632,642 Kohls Corp./1/ 30,165 1,613,827 Avon Products Inc. 24,800 1,601,088 Northrop Grumman Corp. 18,312 1,578,861 State Street Corp. 35,071 1,578,195 SunTrust Banks Inc. 25,987 1,568,835 Hartford Financial Services Group Inc. 29,720 1,564,164 Union Pacific Corp. 26,811 1,559,596 Harley-Davidson Inc. 31,945 1,539,749 Alltel Corp. 32,993 1,528,896 Guidant Corp. 32,513 1,523,234 Sara Lee Corp. 81,832 1,502,436 Costco Wholesale Corp./1/ 47,948 1,490,224 Newmont Mining Corp. 37,902 1,481,589 Analog Devices Inc./1/ 38,672 1,470,309 General Dynamics Corp. 18,603 1,452,150 Omnicom Group Inc. 19,838 1,425,360 Sprint Corp. (FON Group) 94,358 1,424,806 Kroger Co./1/ 79,642 1,423,203 Progressive Corp. (The) 20,582 1,422,422 PNC Financial Services Group 29,876 1,421,500 Occidental Petroleum Corp. 40,067 1,411,560 Travelers Property Casualty Corp. Class B 88,810 1,410,303 Southwest Airlines Co. 79,566 1,408,318 InterActiveCorp/1/ 42,046 1,389,620 Mellon Financial Corp. 45,438 1,369,501 Veritas Software Corp./1/ 43,561 1,367,815 Weyerhaeuser Co. 23,173 1,354,462 Maxim Integrated Products Inc. 34,245 1,352,678 Deere & Co. 25,160 1,341,280 Schwab (Charles) Corp. (The) 111,208 1,324,487 Corning Inc./1/ 140,529 1,323,783 General Motors Corp. Class H/1/ 92,148 1,318,638 Best Buy Co. Inc./1/ 27,555 1,309,414 Capital One Financial Corp. 22,658 1,292,412 Entergy Corp. 23,850 1,291,477 CVS Corp. 41,540 1,290,232 Computer Associates International Inc. 48,890 1,276,518 Heinz (H.J.) Co. 37,123 1,272,576 Chubb Corp. 19,550 1,268,404 Sears, Roebuck and Co. 28,991 1,267,776 SCHEDULES OF INVESTMENTS 9 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- McGraw-Hill Companies Inc. (The) 20,252 $ 1,258,257 American Electric Power Co. Inc. 41,605 1,248,150 Masco Corp. 50,188 1,228,602 FPL Group Inc. 19,353 1,223,110 Raytheon Co. 43,311 1,212,708 ConAgra Foods Inc. 56,898 1,208,514 WellPoint Health Networks Inc./1/ 15,594 1,201,989 Staples Inc./1/ 50,148 1,191,015 Bed Bath & Beyond Inc./1/ 31,167 1,189,956 Gap Inc. (The) 69,456 1,189,087 Linear Technology Corp. 33,049 1,183,485 Gilead Sciences Inc./1/ 21,104 1,180,347 Paychex Inc. 34,778 1,180,018 Golden West Financial Corp. 13,174 1,179,205 Starbucks Corp./1/ 40,941 1,179,101 Apache Corp. 16,951 1,175,382 Devon Energy Corp. 24,369 1,174,342 Equity Office Properties Trust 42,407 1,167,465 Zimmer Holdings Inc./1/ 20,736 1,142,554 KeyCorp 44,664 1,142,058 Burlington Northern Santa Fe Corp. 39,245 1,133,003 Sun Microsystems Inc./1/ 341,601 1,130,699 Amazon.com Inc./1/ 23,245 1,124,128 Halliburton Co. 46,169 1,119,598 Agilent Technologies Inc./1/ 49,754 1,100,061 Anadarko Petroleum Corp. 26,310 1,098,706 Stryker Corp. 14,579 1,097,944 Electronic Arts Inc./1/ 11,827 1,090,804 Air Products & Chemicals Inc. 24,027 1,083,618 Allergan Inc. 13,712 1,079,546 Safeway Inc./1/ 46,847 1,074,670 Praxair Inc. 17,112 1,060,088 Baker Hughes Inc. 35,708 1,056,600 Nike Inc. Class B 17,342 1,054,740 SouthTrust Corp. 35,828 1,052,985 TJX Companies Inc. 54,084 1,050,311 Anthem Inc./1/ 14,556 1,038,279 PG&E Corp./1/ 43,098 1,030,042 Hancock (John) Financial Services Inc. 30,432 1,028,602 KLA-Tencor Corp./1/ 20,001 1,028,051 Burlington Resources Inc. 21,236 1,023,575 Countrywide Financial Corp. 12,980 1,016,074 Xilinx Inc./1/ 35,619 1,015,498 FirstEnergy Corp. 31,828 1,015,313 St. Jude Medical Inc./1/ 18,849 1,013,511 International Game Technology Inc. 35,900 1,010,585 Progress Energy Inc. 22,570 1,003,462 MetLife Inc. 35,714 1,001,778 Public Service Enterprise Group Inc. 23,719 996,198 Tribune Co. 21,525 987,998 Symantec Corp./1/ 15,497 976,621 Becton, Dickinson & Co. 26,825 968,919 McKesson Corp. 28,898 962,014 Electronic Data Systems Corp. 47,506 959,621 Adobe Systems Inc. 24,420 958,729 Consolidated Edison Inc. 23,506 958,105 Wrigley (William Jr.) Co. 17,131 947,344 Principal Financial Group Inc. 30,504 945,319 Pitney Bowes Inc. 24,662 945,048 Lucent Technologies Inc./1/ 437,272 944,508 Genzyme Corp. - General Division/1/ 20,298 938,782 Marathon Oil Corp. 32,839 935,911 Intuit Inc./1/ 19,368 934,312 PPG Industries Inc. 17,886 934,007 Aetna Inc. 15,251 930,769 Yum! Brands Inc./1/ 31,097 921,093 EchoStar Communications Corp./1/ 23,963 917,064 Biomet Inc. 27,173 913,285 Apollo Group Inc. Class A/1/ 13,598 897,876 Danaher Corp. 12,072 891,638 Johnson Controls Inc. 9,418 890,943 Marriott International Inc. Class A 20,691 890,334 Mattel Inc. 46,278 877,431 MedImmune Inc./1/ 26,556 876,614 Northern Trust Corp. 20,567 872,863 10 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Kellogg Co. 26,117 $ 871,002 Comerica Inc. 18,663 869,696 Fortune Brands Inc. 15,301 868,332 Kraft Foods Inc. 29,307 864,556 PACCAR Inc. 11,568 864,014 Unocal Corp. 27,249 858,888 Equity Residential 28,747 841,712 MBIA Inc. 15,152 832,905 Federated Department Stores Inc. 19,733 826,813 Block (H & R) Inc. 19,110 824,596 St. Paul Companies Inc. 22,124 819,252 TXU Corp. 34,073 802,760 Regions Financial Corp. 23,390 801,108 Xerox Corp./1/ 77,641 796,597 AmSouth Bancorp 37,451 794,710 Synovus Financial Corp. 31,774 794,032 Apple Computer Inc./1/ 38,345 791,057 Lexmark International Inc./1/ 12,535 789,830 SunGard Data Systems Inc./1/ 29,974 788,616 Micron Technology Inc./1/ 57,971 777,971 Bear Stearns Companies Inc. (The) 10,334 772,983 Altera Corp./1/ 40,550 766,395 Franklin Resources Inc. 17,294 764,568 Dover Corp. 21,516 761,021 Norfolk Southern Corp. 41,112 760,572 Cox Communications Inc. Class A/1/ 23,976 758,121 Marshall & Ilsley Corp. 23,967 755,440 PPL Corp. 18,426 754,545 Clorox Co. 16,388 751,718 May Department Stores Co. (The) 30,507 751,387 Medco Health Solutions Inc./1/ 28,525 739,653 Mylan Laboratories Inc. 19,081 737,481 Albertson's Inc. 35,772 735,830 Ameren Corp. 17,097 733,632 Moody's Corp. 13,298 730,991 Charter One Financial Inc. 23,698 725,159 Archer-Daniels-Midland Co. 54,632 716,226 Tenet Healthcare Corp./1/ 49,309 713,994 Computer Sciences Corp./1/ 18,901 710,111 Limited Brands Inc. 46,688 704,055 Concord EFS Inc./1/ 51,251 700,601 Starwood Hotels & Resorts Worldwide Inc. 20,027 696,940 Eaton Corp. 7,860 696,553 Fiserv Inc./1/ 19,224 696,486 Cinergy Corp. 18,682 685,629 Hershey Foods Corp. 9,327 677,886 Union Planters Corp. 21,228 671,654 Jefferson-Pilot Corp. 14,934 662,771 CIGNA Corp. 14,820 661,713 Lincoln National Corp. 18,678 660,828 CSX Corp. 22,571 660,202 Monsanto Co. 27,570 660,026 New York Times Co. Class A 15,067 654,812 Xcel Energy Inc. 42,180 652,525 Network Appliance Inc./1/ 31,591 648,563 DTE Energy Co. 17,478 644,763 Georgia-Pacific Corp. 26,326 638,142 AmerisourceBergen Corp. 11,701 632,439 Eastman Kodak Co. 30,176 631,885 Family Dollar Stores Inc. 15,821 631,100 Campbell Soup Co. 23,770 629,905 UST Inc. 17,898 629,652 AutoZone Inc./1/ 7,031 629,485 PeopleSoft Inc./1/ 34,370 625,190 Caremark Rx Inc./1/ 27,638 624,619 Constellation Energy Group Inc. 17,425 623,466 M&T Bank Corp. 7,130 622,449 Newell Rubbermaid Inc. 28,659 621,041 National Semiconductor Corp./1/ 19,126 617,579 Penney (J.C.) Co. Inc. (Holding Co.) 28,396 606,823 Broadcom Corp. Class A/1/ 22,789 606,643 Dollar General Corp. 30,199 603,980 Simon Property Group Inc. 13,840 603,147 CIT Group Inc. 20,921 601,688 Biogen Inc./1/ 15,726 601,205 Genuine Parts Co. 18,509 591,918 Avery Dennison Corp. 11,668 589,467 SCHEDULES OF INVESTMENTS 11 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Interpublic Group of Companies Inc. 41,206 $ 581,829 KeySpan Corp. 16,500 578,820 Knight Ridder Inc. 8,625 575,287 Edison International/1/ 30,057 574,089 Cincinnati Financial Corp. 14,357 573,706 ITT Industries Inc. 9,585 573,566 North Fork Bancorp Inc. 16,496 573,236 First Tennessee National Corp. 13,464 571,681 Hilton Hotels Corp. 35,234 571,495 AON Corp. 27,262 568,413 Sovereign Bancorp Inc. 30,606 567,741 Sempra Energy 19,283 566,149 Popular Inc. 14,220 565,956 Loews Corp. 13,940 562,758 Affiliated Computer Services Inc. Class A/1/ 11,552 562,467 Parker Hannifin Corp. 12,502 558,839 Ambac Financial Group Inc. 8,710 557,440 NiSource Inc. 27,841 556,263 Rohm & Haas Co. 16,558 553,865 IMS Health Inc. 26,096 550,626 Health Management Associates Inc. Class A 25,144 548,391 National Commerce Financial Corp. 21,948 546,066 American Standard Companies Inc./1/ 6,452 543,581 BJ Services Co./1/ 15,898 543,235 Kinder Morgan Inc. 10,034 541,936 MeadWestvaco Corp. 21,169 539,810 General Growth Properties Inc. 7,480 536,316 Novellus Systems Inc./1/ 15,888 536,220 Zions Bancorporation 9,487 529,849 Sanmina-SCI Corp./1/ 54,012 523,916 Juniper Networks Inc./1/ 34,908 520,827 Fox Entertainment Group Inc. Class A/1/ 18,457 516,611 ProLogis 17,059 516,035 Williams Companies Inc. 54,775 515,980 Coach Inc./1/ 9,411 513,841 EOG Resources Inc. 12,293 513,110 RadioShack Corp. 18,055 512,943 JDS Uniphase Corp./1/ 142,071 511,456 CenturyTel Inc. 15,006 508,553 Centex Corp. 6,513 507,232 Dean Foods Co./1/ 16,339 506,999 Microchip Technology Inc. 21,171 506,834 Ecolab Inc. 19,928 503,182 Archstone-Smith Trust 19,038 502,222 Univision Communications Inc. Class A/1/ 15,664 500,161 Agere Systems Inc. Class B/1/ 172,263 497,840 Torchmark Corp. 12,223 496,743 Harrah's Entertainment Inc. 11,796 496,730 Plum Creek Timber Co. Inc. 19,464 495,164 Chiron Corp./1/ 9,572 494,777 Legg Mason Inc. 6,839 493,776 Whirlpool Corp. 7,253 491,536 Applera Corp. - Applied Biosystems Group 22,016 491,177 Qwest Communications International Inc./1/ 144,096 489,926 Solectron Corp./1/ 83,423 488,025 Huntington Bancshares Inc. 24,561 486,062 Textron Inc. 12,214 481,842 SAFECO Corp. 13,643 481,052 Banknorth Group Inc. 17,013 480,107 Avaya Inc./1/ 43,984 479,426 Rockwell Collins Inc. 18,942 478,286 Quest Diagnostics Inc./1/ 7,827 474,629 New York Community Bancorp Inc. 15,058 474,478 Kerr-McGee Corp. 10,605 473,407 Sprint Corp. (PCS Group)/1/ 82,595 473,269 Watson Pharmaceuticals Inc./1/ 11,301 471,139 Compass Bancshares Inc. 13,612 470,703 BEA Systems Inc./1/ 39,032 470,336 Murphy Oil Corp. 7,937 466,299 Scientific-Atlanta Inc. 14,874 463,325 Valero Energy Corp. 12,085 462,493 Cintas Corp. 12,536 461,826 12 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- T. Rowe Price Group Inc. 11,192 $ 461,782 El Paso Corp. 63,064 460,367 Freeport-McMoRan Copper & Gold Inc. 13,860 458,766 Career Education Corp./1/ 10,114 458,164 Office Depot Inc./1/ 32,591 457,904 Delphi Corp. 50,579 457,740 QLogic Corp./1/ 9,709 456,420 Millennium Pharmaceuticals Inc./1/ 29,638 456,129 Rockwell Automation Inc. 17,253 452,891 Synopsys Inc./1/ 14,494 445,980 UNUMProvident Corp. 30,178 445,729 Coca-Cola Enterprises Inc. 23,383 445,680 Laboratory Corp. of America Holdings/1/ 15,496 444,735 Tiffany & Co. 11,832 441,689 Leggett & Platt Inc. 20,316 439,435 Unisys Corp./1/ 32,150 434,990 Radian Group Inc. 9,773 433,921 Lennar Corp. Class A 5,553 431,968 Jabil Circuit Inc./1/ 16,566 431,544 Old Republic International Corp. 12,814 424,015 Sealed Air Corp./1/ 8,930 421,764 ENSCO International Inc. 15,707 421,262 IDEC Pharmaceuticals Corp./1/ 12,623 418,452 Varian Medical Systems Inc./1/ 7,226 415,350 Siebel Systems Inc./1/ 42,666 414,714 Duke Realty Corp. 14,172 413,822 SanDisk Corp./1/ 6,471 412,462 Phelps Dodge Corp./1/ 8,794 411,559 Public Storage Inc. 10,485 411,327 iStar Financial Inc. 10,477 408,079 Vornado Realty Trust 8,483 407,523 McCormick & Co. Inc. 14,849 407,160 Fidelity National Financial Inc. 13,509 406,081 D.R. Horton Inc. 12,392 405,218 SCANA Corp. 11,830 405,178 Advanced Micro Devices Inc./1/ 36,460 405,071 Vulcan Materials Co. 10,140 404,687 Express Scripts Inc./1/ 6,582 402,489 Kimco Realty Corp. 9,809 401,875 Dollar Tree Stores Inc./1/ 11,944 400,124 MGIC Investment Corp. 7,646 398,127 Citrix Systems Inc./1/ 17,838 393,863 Bard (C.R.) Inc. 5,545 393,695 Diebold Inc. 7,750 392,537 Sigma-Aldrich Corp. 7,533 391,264 Apartment Investment & Management Co. Class A 9,911 390,097 Molex Inc. 13,618 389,339 Smurfit-Stone Container Corp. 25,971 389,046 Liz Claiborne Inc. 11,385 387,659 Wendy's International Inc. 11,956 386,179 King Pharmaceuticals Inc./1/ 25,415 385,037 Sherwin-Williams Co. (The) 13,004 382,448 Grainger (W.W.) Inc. 8,026 381,636 Jones Apparel Group Inc. 12,747 381,518 GreenPoint Financial Corp. 12,687 378,834 Nucor Corp. 8,241 378,097 XTO Energy Inc. 18,003 377,883 Ross Stores Inc. 8,125 376,675 Mohawk Industries Inc./1/ 5,279 376,498 Wisconsin Energy Corp. 12,282 375,461 Cadence Design Systems Inc./1/ 27,992 375,093 DENTSPLY International Inc. 8,320 373,069 Amerada Hess Corp. 7,429 372,193 Thermo Electron Corp./1/ 17,093 370,918 Pepsi Bottling Group Inc. 18,012 370,687 Celgene Corp./1/ 8,546 370,298 Patterson Dental Co./1/ 6,400 368,512 SPX Corp./1/ 8,109 367,176 Estee Lauder Companies Inc. Class A 10,765 367,086 TCF Financial Corp. 7,612 364,995 Teradyne Inc./1/ 19,538 363,407 Republic Services Inc. 16,020 362,693 JetBlue Airways Corp./1/ 5,932 361,674 Oxford Health Plans Inc./1/ 8,706 359,645 Janus Capital Group Inc. 25,564 357,129 Lincare Holdings Inc./1/ 9,740 356,971 CDW Corp. 6,179 356,775 Waters Corp./1/ 12,976 355,932 SCHEDULES OF INVESTMENTS 13 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Expeditors International Washington Inc. 10,333 $ 355,559 Mercury Interactive Corp./1/ 7,814 354,834 CarMax Inc./1/ 10,826 353,577 Pulte Homes Inc. 5,175 351,952 Lear Corp./1/ 6,680 351,635 R.J. Reynolds Tobacco Holdings Inc. 8,872 350,799 Brinker International Inc./1/ 10,465 349,112 BMC Software Inc./1/ 24,906 346,941 Washington Post Company (The) Class B 520 345,800 AdvancePCS/1/ 7,567 344,828 Pactiv Corp./1/ 16,948 343,705 Energy East Corp. 15,192 340,757 PETsMART Inc./1/ 15,002 340,545 Darden Restaurants Inc. 17,888 339,872 L-3 Communications Holdings Inc./1/ 7,842 339,166 LSI Logic Corp./1/ 37,663 338,590 VF Corp. 8,681 337,778 AES Corp. (The)/1/ 45,357 336,549 Citizens Communications Co./1/ 30,001 336,311 Black & Decker Corp. 8,277 335,632 Health Net Inc./1/ 10,591 335,417 Engelhard Corp. 12,122 335,416 SUPERVALU Inc. 14,048 335,185 Hibernia Corp. Class A 16,544 335,181 Mercantile Bankshares Corp. 8,356 334,240 Barr Laboratories Inc./1/ 4,891 333,615 Rouse Co. (The) 8,000 333,600 Intersil Corp. Class A/1/ 14,006 333,343 Equifax Inc. 14,948 332,892 Providian Financial Corp./1/ 28,175 332,183 Omnicare Inc. 9,176 330,887 ServiceMaster Co. (The) 32,063 328,966 AutoNation Inc./1/ 18,704 328,068 Ball Corp. 6,064 327,456 Dun & Bradstreet Corp./1/ 7,871 326,961 Sunoco Inc. 8,118 326,506 PMI Group Inc. (The) 9,656 325,890 Boston Properties Inc. 7,419 322,504 Smith International Inc./1/ 8,928 321,229 E*TRADE Group Inc./1/ 34,470 319,192 Fluor Corp. 8,457 315,700 Humana Inc./1/ 17,422 314,467 DST Systems Inc./1/ 8,327 313,095 Pinnacle West Capital Corp. 8,785 311,868 Pioneer Natural Resources Co./1/ 12,223 311,198 Tyson Foods Inc. Class A 21,996 310,803 Energizer Holdings Inc./1/ 8,432 310,045 Host Marriott Corp./1/ 28,863 309,700 Sabre Holdings Corp. 14,393 309,306 Robert Half International Inc./1/ 15,850 309,075 Hillenbrand Industries Inc. 5,438 306,812 Liberty Property Trust 8,294 306,712 Autoliv Inc. 10,127 305,532 Edwards (A.G.) Inc. 7,944 305,129 Commerce Bancorp Inc. 6,355 304,468 Whole Foods Market Inc./1/ 5,512 304,152 Lam Research Corp./1/ 13,641 302,148 Goodrich (B.F.) Co. 12,449 301,764 American Power Conversion Corp. 17,591 301,510 Telephone & Data Systems Inc. 5,314 300,454 Invitrogen Corp./1/ 5,180 300,388 Manpower Inc. 8,076 299,620 Tellabs Inc./1/ 43,835 297,640 AvalonBay Communities Inc. 6,310 295,308 Manor Care Inc. 9,817 294,510 Level 3 Communications Inc./1/ 54,324 294,436 Health Care Property Investors Inc. 6,295 293,976 Symbol Technologies Inc. 24,573 293,647 Vishay Intertechnology Inc./1/ 16,755 293,548 ChoicePoint Inc./1/ 8,691 291,148 Beckman Coulter Inc. 6,342 288,815 Doral Financial Corp. 6,143 288,721 Pogo Producing Co. 6,376 288,705 CIENA Corp./1/ 48,809 288,461 VeriSign Inc./1/ 21,382 288,016 Michaels Stores Inc. 7,033 286,665 14 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Allied Capital Corp. 11,650 $ 286,473 Convergys Corp./1/ 15,524 284,710 IVAX Corp./1/ 14,382 281,887 WebMD Corp./1/ 31,560 281,515 Pepco Holdings Inc. 16,288 281,457 Hasbro Inc. 15,050 281,134 Constellation Brands Inc./1/ 9,205 280,660 NCR Corp./1/ 8,813 279,284 Gentex Corp./1/ 8,000 278,720 Equitable Resources Inc. 6,767 278,124 Chico's FAS Inc./1/ 9,070 277,905 Donnelley (R.R.) & Sons Co. 11,166 277,698 Brown-Forman Corp. Class B 3,508 277,553 Scripps (E.W.) Co. Class A 3,257 277,171 Amylin Pharmaceuticals Inc./1/ 9,809 277,006 Commerce Bancshares Inc. 6,298 275,538 Harman International Industries Inc. 2,801 275,478 Ameritrade Holding Corp./1/ 24,459 275,164 Fair Isaac Corp. 4,664 274,989 Eastman Chemical Co. 8,201 274,733 Associated Bancorp 7,253 274,163 Storage Technology Corp./1/ 11,349 273,965 NVR Inc./1/ 587 273,836 CH Robinson Worldwide Inc. 7,352 273,568 Valley National Bancorp 9,766 271,885 NSTAR 5,721 271,748 Gallagher (Arthur J.) & Co. 9,564 270,470 UnionBanCal Corp. 5,428 269,229 Abercrombie & Fitch Co. Class A/1/ 9,699 268,759 Pall Corp. 11,931 267,732 Western Digital Corp./1/ 20,572 265,173 Corinthian Colleges Inc./1/ 4,635 264,937 Westwood One Inc./1/ 8,727 263,468 MGM Grand Inc./1/ 7,171 262,100 Questar Corp. 8,500 261,885 Toys R Us Inc./1/ 21,753 261,689 Park Place Entertainment Corp./1/ 29,013 261,407 Monster Worldwide Inc./1/ 10,367 261,041 SEI Investment Co. 8,009 260,293 CenterPoint Energy Inc. 28,354 260,006 Mid Atlantic Medical Services Inc./1/ 5,029 258,641 Universal Health Services Inc. Class B/1/ 5,219 258,080 Ceridian Corp./1/ 13,839 257,682 MDU Resources Group Inc. 7,620 257,404 Coventry Health Care Inc./1/ 4,854 256,000 Alberto-Culver Co. Class B 4,344 255,514 TECO Energy Inc. 18,452 255,007 Maxtor Corp./1/ 20,844 253,671 KB Home 4,231 252,421 Alliant Energy Corp. 11,432 251,504 Nordstrom Inc. 10,128 251,276 Astoria Financial Corp. 8,092 250,043 First Health Group Corp./1/ 9,559 249,968 ALLETE Inc. 9,122 249,760 International Rectifier Corp./1/ 6,662 249,425 Harris Corp. 6,958 249,027 Iron Mountain Inc./1/ 6,879 246,956 Valspar Corp. (The) 5,284 246,499 Dana Corp. 15,961 246,278 Bausch & Lomb Inc. 5,576 246,180 NVIDIA Corp./1/ 15,469 246,127 GTECH Holdings Corp. 5,733 245,659 Foot Locker Inc. 15,163 245,641 Ashland Inc. 7,473 245,488 Krispy Kreme Doughnuts Inc./1/ 6,376 245,476 Eaton Vance Corp. 7,329 245,375 AMB Property Corp. 7,939 244,601 International Flavors & Fragrances Inc. 7,392 244,527 Williams-Sonoma Inc./1/ 9,061 244,466 Comverse Technology Inc./1/ 16,340 244,446 Outback Steakhouse Inc. 6,452 244,337 Pharmaceutical Resources Inc./1/ 3,522 240,271 Temple-Inland Inc. 4,941 239,886 Deluxe Corp. 5,967 239,515 Northeast Utilities 13,353 239,286 Rent-A-Center Inc./1/ 7,391 238,729 Belo (A.H.) Corp. 9,738 236,146 Henry Schein Inc./1/ 4,164 236,099 SCHEDULES OF INVESTMENTS 15 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Bowater Inc. 5,613 $ 236,083 New Plan Excel Realty Trust 10,127 235,959 Triad Hospitals Inc./1/ 7,791 235,911 Rowan Companies Inc./1/ 9,583 235,550 Cephalon Inc./1/ 5,126 235,386 Fastenal Co. 6,224 235,267 Neuberger Berman Inc. 5,614 235,058 PMC-Sierra Inc./1/ 17,803 234,839 UTStarcom Inc./1/ 7,354 233,931 HON Industries Inc. 6,327 233,846 Berkley (W.R.) Corp. 6,793 232,728 DPL Inc. 13,545 232,297 Noble Energy Inc. 6,057 231,983 Hudson City Bancorp Inc. 7,517 231,824 Foundry Networks Inc./1/ 10,776 231,792 Developers Diversified Realty Corp. 7,747 231,403 Brunswick Corp. 8,982 230,658 Markel Corp./1/ 859 229,353 Rite Aid Corp./1/ 44,410 229,156 Mack-Cali Realty Corp. 5,840 228,928 Cognizant Technology Solutions Corp./1/ 6,254 228,083 Puget Energy Inc. 10,160 227,889 Jacobs Engineering Group Inc./1/ 5,041 227,349 Catellus Development Corp./1/ 9,282 226,945 Lamar Advertising Co./1/ 7,733 226,886 Viad Corp. 9,498 226,812 Millipore Corp./1/ 4,918 226,523 Cooper Cameron Corp./1/ 4,899 226,383 Cypress Semiconductor Corp./1/ 12,797 226,251 Sepracor Inc./1/ 8,174 225,112 3Com Corp./1/ 38,032 224,389 Bemis Co. 5,060 224,158 Network Associates Inc./1/ 16,290 224,150 Fulton Financial Corp. 11,131 223,510 Patterson-UTI Energy Inc./1/ 8,201 222,001 Donaldson Co. Inc. 4,110 221,529 ITT Educational Services Inc./1/ 4,600 220,432 Bank of Hawaii Corp. 6,556 220,150 Sonoco Products Co. 10,007 219,654 Dial Corp. (The) 10,189 219,471 Hospitality Properties Trust 6,246 219,110 Emulex Corp./1/ 8,598 218,991 United Dominion Realty Trust Inc. 11,917 218,200 NTL Inc./1/ 4,623 217,836 Weingarten Realty Investors 4,837 217,665 Great Plains Energy Inc. 7,166 217,273 Federated Investors Inc. Class B 7,836 217,057 Navistar International Corp./1/ 5,814 216,746 City National Corp. 4,228 215,459 Investors Financial Services Corp. 6,836 214,650 Stanley Works (The) 7,240 213,725 Wilmington Trust Corp. 6,947 213,690 Smucker (J.M.) Co. (The) 5,054 213,077 Chesapeake Energy Corp. 19,445 209,617 Maytag Corp. 8,391 209,523 FirstMerit Corp. 8,468 209,498 Tektronix Inc./1/ 8,393 207,727 American Tower Corp. Class A/1/ 20,394 206,999 ICOS Corp./1/ 5,401 206,966 Dow Jones & Co. Inc. 4,364 206,635 Protective Life Corp. 6,903 206,055 Compuware Corp./1/ 38,406 205,856 ImClone Systems Inc./1/ 5,313 205,719 Cullen/Frost Bankers Inc. 5,514 205,286 Pentair Inc. 5,145 205,131 Novell Inc./1/ 38,415 204,752 Autodesk Inc. 12,003 204,291 Avnet Inc./1/ 12,361 204,204 Apogent Technologies Inc./1/ 9,658 201,466 Pride International Inc./1/ 11,838 200,654 OGE Energy Corp. 8,872 200,418 Macerich Co. (The) 5,302 200,150 ADC Telecommunications Inc./1/ 85,541 199,311 Precision Castparts Corp. 5,673 199,122 Allied Waste Industries Inc./1/ 18,341 198,083 Sky Financial Group Inc. 8,797 198,020 Zebra Technologies Corp. Class A/1/ 3,824 197,204 Webster Financial Corp. 4,918 196,130 16 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Big Lots Inc./1/ 12,385 $ 195,807 Ryland Group Inc. 2,667 194,984 United States Steel Corp. 10,576 194,387 Arrow Electronics Inc./1/ 10,556 194,125 Reynolds & Reynolds Co. (The) Class A 7,046 194,117 Hubbell Inc. Class B 5,303 193,506 Education Management Corp./1/ 3,345 192,906 DaVita Inc./1/ 6,060 192,890 Performance Food Group Co./1/ 4,735 192,762 HCC Insurance Holdings Inc. 6,565 190,910 AMR Corp./1/ 16,649 190,631 Cabot Corp. 6,672 190,219 BancorpSouth Inc. 8,633 189,063 Mandalay Resort Group 4,772 189,019 CBRL Group Inc. 5,325 188,931 Graco Inc. 5,021 188,539 BorgWarner Inc. 2,772 188,080 AGL Resources Inc. 6,658 187,556 Andrew Corp./1/ 15,249 187,410 Alliant Techsystems Inc./1/ 3,894 187,107 ARAMARK Corp. Class B/1/ 7,470 186,974 Calpine Corp./1/ 38,138 186,495 Circuit City Stores Inc. 19,546 186,273 PerkinElmer Inc. 12,151 186,032 Martin Marietta Materials Inc. 5,103 186,004 First American Corp. 7,467 185,928 Advanced Fibre Communications Inc./1/ 8,863 185,857 Integrated Circuit Systems Inc./1/ 6,175 185,497 Certegy Inc. 5,761 184,986 Washington Federal Inc. 7,319 184,512 Independence Community Bank Corp. 5,275 184,256 Pier 1 Imports Inc. 9,574 184,204 Waddell & Reed Financial Inc. Class A 7,809 184,058 Cheesecake Factory (The)/1/ 5,085 183,924 Corporate Executive Board Co. (The)/1/ 3,915 183,809 Philadelphia Suburban Corp. 7,619 183,466 Cytyc Corp./1/ 12,195 183,413 Applebee's International Inc. 5,806 182,773 Hormel Foods Corp. 7,948 182,645 PacifiCare Health Systems Inc./1/ 3,739 182,463 Advance Auto Parts Inc./1/ 2,569 182,142 Lee Enterprises Inc. 4,708 182,058 Vectren Corp. 7,699 181,850 StanCorp Financial Group Inc. 3,165 181,829 Chelsea Property Group Inc. 3,791 181,589 Pan Pacific Retail Properties Inc. 4,221 181,503 Newfield Exploration Co./1/ 4,694 181,048 Colonial BancGroup Inc. (The) 12,516 180,731 Renal Care Group Inc./1/ 5,285 180,483 Overture Services Inc./1/ 6,747 178,728 Lubrizol Corp. 5,491 178,183 Rayonier Inc. 4,384 177,990 Nationwide Financial Services Inc. 5,667 177,604 Human Genome Sciences Inc./1/ 12,997 177,539 Weight Watchers International Inc./1/ 4,256 177,050 Entercom Communications Corp./1/ 3,950 177,039 Smithfield Foods Inc./1/ 9,206 176,755 Polycom Inc./1/ 10,611 176,249 Roslyn Bancorp Inc. 7,494 175,959 Titan Corp. (The)/1/ 8,427 175,619 Atmel Corp./1/ 43,649 175,032 Ryder System Inc. 5,966 174,923 Herman Miller Inc. 7,673 174,714 Edwards Lifesciences Corp./1/ 6,448 174,612 Reebok International Ltd. 5,220 174,505 Federal Realty Investment Trust 4,731 174,385 Snap-On Inc. 6,296 174,084 Arden Realty Inc. 6,233 174,025 Thornburg Mortgage Inc. 6,797 172,168 Fisher Scientific International Inc./1/ 4,329 171,818 Stericycle Inc./1/ 3,625 170,991 FNB Corp. (Florida) 4,955 170,948 RF Micro Devices Inc./1/ 18,264 169,673 Hawaiian Electric Industries Inc. 3,892 169,419 SCHEDULES OF INVESTMENTS 17 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Lyondell Chemical Co. 13,165 $ 168,249 Del Monte Foods Co./1/ 19,286 167,981 Sirius Satellite Radio Inc./1/ 91,560 167,555 Tech Data Corp./1/ 5,422 167,269 CNF Inc. 5,218 167,237 Steris Corp./1/ 7,250 166,895 National Fuel Gas Co. 7,300 166,805 Polaris Industries Inc. 2,247 166,615 Fairchild Semiconductor International Inc. Class A/1/ 10,044 166,530 Neurocrine Biosciences Inc./1/ 3,362 166,486 Harsco Corp. 4,320 166,190 Nicor Inc. 4,725 166,037 Cummins Inc. 3,732 165,813 CarrAmerica Realty Corp. 5,549 165,638 Hudson United Bancorp 4,708 165,580 Shurgard Storage Centers Inc. Class A 4,683 165,310 CenterPoint Properties Corp. 2,414 164,418 SICOR Inc./1/ 8,492 163,726 BRE Properties Inc. Class A 4,957 163,482 Borders Group Inc./1/ 8,640 163,469 Transatlantic Holdings Inc. 2,290 162,865 Annaly Mortgage Management Inc. 9,881 162,246 Tidewater Inc. 5,731 162,187 Avid Technology Inc./1/ 3,060 161,690 XM Satellite Radio Holdings Inc. Class A/1/ 10,400 161,512 Neiman-Marcus Group Inc. Class A/1/ 3,854 160,712 Delta Air Lines Inc. 12,076 160,611 Medicis Pharmaceutical Corp. Class A 2,735 160,271 Apria Healthcare Group Inc./1/ 5,847 160,091 ONEOK Inc. 7,937 160,089 Macromedia Inc./1/ 6,461 159,845 AmeriCredit Corp./1/ 15,504 159,691 Peoples Energy Corp. 3,850 159,313 Teleflex Inc. 3,661 158,997 RPM International Inc. 12,162 158,836 Meredith Corp. 3,436 158,640 Pixar Inc./1/ 2,381 158,479 National-Oilwell Inc./1/ 8,724 158,253 Cablevision Systems Corp./1/ 8,728 157,977 Cytec Industries Inc./1/ 4,326 157,899 Sybase Inc./1/ 9,276 157,785 MONY Group Inc. (The) 4,835 157,379 Brown & Brown Inc. 5,092 156,732 Conexant Systems Inc./1/ 27,589 156,154 Ruby Tuesday Inc. 6,468 155,943 Leucadia National Corp. 4,116 155,791 O'Reilly Automotive Inc./1/ 4,232 155,611 Louisiana-Pacific Corp./1/ 11,273 155,342 Coors (Adolf) Company Class B 2,884 155,044 Pacific Sunwear of California Inc./1/ 7,502 154,991 Westamerica Bancorp 3,486 154,953 BISYS Group Inc. (The)/1/ 11,735 154,315 Old National Bancorp 6,876 153,679 Varco International Inc./1/ 9,071 153,391 First Midwest Bancorp Inc. 5,150 153,006 Unitrin Inc. 5,017 152,818 Applied Micro Circuits Corp./1/ 31,239 152,134 Cymer Inc./1/ 3,666 151,039 Zale Corp./1/ 3,378 150,017 Hunt (J.B.) Transport Services Inc./1/ 5,764 149,979 Raymond James Financial Inc. 4,119 149,726 Saks Inc./1/ 12,887 148,587 Rambus Inc./1/ 8,843 148,386 AnnTaylor Stores Corp./1/ 4,612 148,230 BJ's Wholesale Club Inc./1/ 7,625 147,696 AmerUs Group Co. 4,327 147,118 ResMed Inc./1/ 3,339 146,849 Ingram Micro Inc. Class A/1/ 11,242 146,708 Whitney Holding Corp. 4,311 146,574 Regis Corp. 4,562 146,440 DeVry Inc./1/ 6,182 146,266 Reliant Resources Inc./1/ 28,450 145,664 Toll Brothers Inc./1/ 4,778 145,347 York International Corp. 4,202 145,347 American Capital Strategies Ltd. 5,831 144,959 18 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Take-Two Interactive Software Inc./1/ 4,241 $ 144,915 Sonus Networks Inc./1/ 20,896 144,809 Cree Inc./1/ 7,818 144,789 Covance Inc./1/ 6,465 144,687 Respironics Inc./1/ 3,441 143,765 Park National Corp. 1,283 143,568 Skyworks Solutions Inc./1/ 15,767 143,480 Claire's Stores Inc. 4,288 143,476 Service Corp. International/1/ 31,393 143,466 Brocade Communications Systems Inc./1/ 27,370 142,871 Realty Income Corp. 3,598 142,661 Charles River Laboratories International Inc./1/ 4,632 142,156 IDEXX Laboratories Inc./1/ 3,334 141,662 Carlisle Companies Inc. 3,233 141,023 AptarGroup Inc. 3,834 140,669 WGL Holdings Inc. 5,098 140,603 Healthcare Realty Trust Inc. 4,378 140,008 Helmerich & Payne Inc. 5,356 140,006 Trustmark Corp. 5,155 139,855 Integrated Device Technology Inc./1/ 11,254 139,775 International Speedway Corp. Class A 3,175 139,351 Mills Corp. 3,536 139,142 AMETEK Inc. 3,244 139,038 INAMED Corp./1/ 1,891 138,894 Vitesse Semiconductor Corp./1/ 21,700 138,880 99 Cents Only Stores/1/ 4,290 138,739 HRPT Properties Trust 15,148 138,453 Silicon Laboratories Inc./1/ 3,069 137,952 TECHNE Corp./1/ 4,328 137,587 Owens-Illinois Inc./1/ 12,039 137,485 WPS Resources Corp. 3,332 137,278 Briggs & Stratton Corp. 2,335 137,205 Allmerica Financial Corp./1/ 5,754 137,003 Church & Dwight Co. Inc. 3,908 136,741 ADTRAN Inc. 2,234 136,676 Amkor Technology Inc./1/ 9,602 136,444 Gen-Probe Inc./1/ 2,517 136,346 Affiliated Managers Group Inc./1/ 2,169 136,213 Camden Property Trust 3,543 136,157 Highwoods Properties Inc. 5,695 135,883 Fred's Inc. 4,105 135,301 Kennametal Inc. 3,617 135,276 Abgenix Inc./1/ 9,329 135,177 IndyMac Bancorp Inc. 5,809 134,595 Avocent Corp./1/ 4,442 134,548 Forest City Enterprises Inc. Class A 3,075 134,531 First Industrial Realty Trust Inc. 4,179 134,021 Mettler Toledo International Inc./1/ 3,727 133,986 Accredo Health Inc./1/ 4,782 133,848 Protein Design Labs Inc./1/ 9,651 133,763 AGCO Corp./1/ 7,739 132,646 Andrx Group/1/ 7,140 132,161 Energen Corp. 3,651 132,093 CACI International Inc. Class A/1/ 3,067 131,421 Cooper Companies Inc. 3,212 130,889 CheckFree Corp./1/ 6,543 130,860 Red Hat Inc./1/ 12,935 130,644 Piedmont Natural Gas Co. 3,340 130,260 BearingPoint Inc./1/ 16,254 129,707 Jeffries Group Inc. 4,492 129,145 FMC Technologies Inc./1/ 5,998 128,477 Crane Co. 5,487 128,451 Reckson Associates Realty Corp. 5,558 128,445 Martek Biosciences Corp./1/ 2,436 128,304 South Financial Group Inc. (The) 5,153 128,258 UCBH Holdings Inc. 4,242 128,236 Ventas Inc. 7,469 127,869 NBTY Inc./1/ 5,462 127,538 Gateway Inc./1/ 22,521 127,469 Oshkosh Truck Corp. 3,214 127,307 UGI Corp. 4,400 127,292 American Greetings Corp. Class A/1/ 6,540 127,072 OSI Pharmaceuticals Inc./1/ 3,913 127,055 Alexander & Baldwin Inc. 4,520 126,922 ICN Pharmaceuticals Inc. 7,388 126,778 SCHEDULES OF INVESTMENTS 19 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Standard-Pacific Corp. 3,333 $ 126,321 Metro-Goldwyn-Mayer Inc./1/ 8,232 126,279 La-Z-Boy Inc. 5,674 125,963 Scotts Co. (The) Class A/1/ 2,300 125,810 Wiley (John) & Sons Inc. Class A 4,837 125,714 Roper Industries Inc. 2,881 125,468 National Instruments Corp. 3,111 125,218 Westar Energy Inc. 6,781 125,109 Health Care REIT Inc. 4,053 125,035 DoubleClick Inc./1/ 11,596 124,889 Citizens Banking Corp. 4,709 124,365 Barnes & Noble Inc./1/ 4,892 124,306 Key Energy Services Inc./1/ 12,864 124,138 Ethan Allen Interiors Inc. 3,438 123,768 Allegheny Energy Inc./1/ 13,526 123,628 Mentor Graphics Corp./1/ 7,042 123,446 Mercury General Corp. 2,755 123,369 Provident Financial Group Inc. 4,394 122,856 Atmos Energy Corp. 5,131 122,836 Henry (Jack) & Associates Inc. 7,053 122,652 McDATA Corp. Class A/1/ 10,244 122,621 Ascential Software Corp./1/ 6,609 122,465 Affymetrix Inc./1/ 5,821 122,183 United Stationers Inc./1/ 3,238 122,008 Swift Transportation Co. Inc./1/ 5,356 121,528 Harte-Hanks Inc. 6,560 120,966 Polo Ralph Lauren Corp. 4,498 120,636 Dade Behring Holdings Inc./1/ 4,265 120,486 ArvinMeritor Inc. 6,759 120,378 MGI Pharma Inc./1/ 3,064 120,293 Furniture Brands International Inc./1/ 4,981 120,042 Imation Corp. 3,669 119,793 Lancaster Colony Corp. 3,012 119,787 Intergraph Corp./1/ 5,139 119,636 United Bancshares Inc. 3,989 119,471 Phoenix Companies Inc. 10,341 119,439 PETCO Animal Supplies Inc./1/ 3,823 119,278 Beazer Homes USA Inc./1/ 1,411 119,088 NetScreen Technologies Inc./1/ 5,342 118,753 Pharmaceutical Product Development Inc./1/ 4,943 118,583 KEMET Corp./1/ 9,305 118,546 Radio One Inc. Class D/1/ 8,220 118,039 Packaging Corporation of America/1/ 6,078 118,035 Patina Oil & Gas Corp. 3,257 118,034 Commercial Federal Corp. 4,831 117,635 Airtran Holdings Inc./1/ 7,017 117,535 Home Properties of New York Inc. 2,996 117,443 OfficeMax Inc./1/ 12,503 117,153 Washington Real Estate Investment Trust 4,035 117,015 Station Casinos Inc. 3,820 116,892 Readers Digest Association Inc. (The) 8,345 116,747 Staten Island Bancorp Inc. 5,996 116,622 Corn Products International Inc. 3,645 116,093 Lafarge North America Inc. 3,334 116,023 Semtech Corp./1/ 6,266 115,670 Toro Co. 2,558 115,110 Medicines Co. (The)/1/ 4,420 114,920 Continental Airlines Inc. Class B/1/ 6,927 114,850 Community Health Systems Inc./1/ 5,284 114,663 International Bancshares Corp. 2,765 114,609 Friedman, Billings, Ramsey Group, Inc. Class A 6,639 114,523 Crescent Real Estate Equities Co. 7,874 114,173 Valassis Communications Inc./1/ 4,324 114,154 McClatchy Co. (The) Class A 1,918 114,083 Boise Cascade Corp. 4,125 113,850 Duquesne Light Holdings Inc. 7,339 113,754 Pediatrix Medical Group Inc./1/ 2,466 113,559 Varian Semiconductor Equipment Associates Inc./1/ 3,030 113,474 First Niagara Financial Group Inc. 7,504 113,310 Charter Communications Inc. Class A/1/ 27,496 113,284 Greater Bay Bancorp 5,446 113,277 Trizec Properties Inc. 9,238 113,258 Getty Images Inc./1/ 3,211 112,899 20 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- P.F. Chang's China Bistro Inc./1/ 2,476 $ 112,287 Electronics For Imaging Inc./1/ 4,804 112,029 Activision Inc./1/ 9,373 112,007 Western Wireless Corp. Class A/1/ 6,004 111,915 PNM Resources Inc. 3,990 111,880 Crown Holdings Inc./1/ 16,562 111,793 Kronos Inc./1/ 2,109 111,587 IKON Office Solutions Inc. 15,243 111,426 Panera Bread Co. Class A/1/ 2,718 111,329 Extended Stay America Inc./1/ 7,446 111,169 Southwest Bancorp of Texas Inc. 3,041 111,027 Gemstar-TV Guide International Inc./1/ 23,463 110,980 Hot Topic Inc./1/ 4,922 110,942 Benchmark Electronics Inc./1/ 2,621 110,790 Cabot Microelectronics Corp./1/ 1,986 110,700 Pacific Capital Bancorp 3,628 110,618 Community First Bankshares Inc. 4,185 110,610 Arbitron Inc./1/ 3,132 110,560 Hyperion Solutions Corp./1/ 3,827 110,485 Cooper Tire & Rubber Co. 6,960 110,455 IGEN International Inc./1/ 1,908 110,282 Black Hills Corp. 3,572 110,232 First Bancorp 3,578 110,023 Susquehanna Bancshares Inc. 4,279 109,970 St. Joe Company (The) 3,423 109,810 Airgas Inc. 6,152 109,506 Lexar Media Inc./1/ 6,411 109,243 Total System Services Inc. 4,129 108,799 Chittenden Corp. 3,650 108,587 Legato Systems Inc./1/ 9,684 108,558 CBL & Associates Properties Inc. 2,166 108,083 Essex Property Trust Inc. 1,723 108,049 Idex Corp. 2,963 107,972 Acxiom Corp./1/ 6,825 107,562 Tetra Tech Inc./1/ 5,397 107,454 Cousins Properties Inc. 3,859 107,087 Callaway Golf Co. 7,497 106,982 Strayer Education Inc. 1,106 106,961 Downey Financial Corp. 2,287 106,872 East West Bancorp Inc. 2,499 106,832 SkyWest Inc. 6,162 106,726 Erie Indemnity Co. Class A 2,743 106,703 Dycom Industries Inc./1/ 5,224 106,517 Amphenol Corp. Class A/1/ 2,043 106,338 New Jersey Resources Corp. 2,943 106,066 EarthLink Inc./1/ 12,875 105,961 Evergreen Resources Inc./1/ 3,914 105,678 M.D.C. Holdings Inc. 1,954 105,516 Grant Prideco Inc./1/ 10,337 105,334 United Online Inc./1/ 3,031 105,236 Universal Corp. 2,495 105,114 Media General Inc. Class A 1,720 105,092 IDACORP Inc. 4,110 104,805 Dynegy Inc. Class A/1/ 29,076 104,674 Goodyear Tire & Rubber Co. (The) 15,835 104,036 Arch Coal Inc. 4,663 103,565 Global Payments Inc. 2,873 103,428 Waste Connections Inc./1/ 2,945 103,340 Trinity Industries Inc. 3,996 103,297 CLARCOR Inc. 2,646 103,194 Linens 'N Things Inc./1/ 4,336 103,110 CMS Energy Corp. 13,988 103,092 Diamond Offshore Drilling Inc. 5,388 102,911 Flowserve Corp./1/ 5,062 102,759 Thor Industries Inc. 1,902 102,746 Hovnanian Enterprises Inc. Class A/1/ 1,589 102,284 Regency Centers Corp. 2,773 102,185 Invacare Corp. 2,716 102,067 SL Green Realty Corp. 2,820 101,830 Bob Evans Farms Inc. 3,812 101,819 IDT Corp./1/ 5,750 101,660 Brink's Co. (The) 5,849 101,539 Nationwide Health Properties Inc. 5,793 101,320 OmniVision Technologies Inc./1/ 2,398 101,292 Alliance Gaming Corp./1/ 4,990 101,197 LifePoint Hospitals Inc./1/ 4,205 101,130 Hercules Inc./1/ 8,923 101,098 Investment Technology Group Inc./1/ 5,218 100,081 University of Phoenix Online/1/ 1,503 100,070 SCHEDULES OF INVESTMENTS 21 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Hilb, Rogal & Hamilton Co. 3,213 $ 99,732 Florida Rock Industries Inc. 2,009 99,646 Commerce Group Inc. 2,623 99,569 Sybron Dental Specialties Inc./1/ 3,971 99,553 Minerals Technologies Inc. 1,948 99,153 Documentum Inc./1/ 4,644 98,964 Prentiss Properties Trust 3,187 98,797 Varian Inc./1/ 3,153 98,752 Cincinnati Bell Inc./1/ 19,338 98,430 AMERIGROUP Corp./1/ 2,201 98,231 Post Properties Inc. 3,592 97,810 Mentor Corp. 4,284 97,675 CEC Entertainment Inc./1/ 2,489 97,569 Alexandria Real Estate Equities Inc. 2,023 97,165 Tractor Supply Co./1/ 2,958 97,052 Banta Corp. 2,683 96,588 Vertex Pharmaceuticals Inc./1/ 7,828 96,284 American National Insurance Co. 1,132 96,277 Landstar System Inc./1/ 1,573 95,984 Sonic Corp./1/ 3,793 95,887 Peabody Energy Corp. 3,037 95,271 TrustCo Bank Corp. NY 7,685 94,987 Blyth Inc. 3,516 94,862 Talbots Inc. (The) 2,698 94,025 GATX Corp. 4,441 93,927 Forest Oil Corp./1/ 3,913 93,716 LandAmerica Financial Group Inc. 2,043 93,651 Gartner Inc. Class A/1/ 8,472 93,361 Sylvan Learning Systems Inc./1/ 3,421 93,325 Advanced Digital Information Corp./1/ 6,652 93,261 Odyssey Healthcare Inc./1/ 3,121 93,068 Visteon Corp. 14,079 92,921 USF Corp. 2,944 92,648 Plantronics Inc./1/ 3,871 92,401 Silicon Valley Bancshares/1/ 3,344 92,395 Hollywood Entertainment Corp./1/ 5,434 92,378 Payless ShoeSource Inc./1/ 7,125 92,198 Werner Enterprises Inc. 4,004 91,732 Dillards Inc. Class A 6,555 91,639 Potlatch Corp. 3,079 91,508 La Quinta Corp./1/ 14,684 91,481 Cerner Corp./1/ 2,962 91,437 Scholastic Corp./1/ 3,175 91,408 Bio-Rad Laboratories Inc. Class A/1/ 1,792 91,392 Tom Brown Inc./1/ 3,547 91,158 Cognex Corp. 3,462 91,016 Worthington Industries Inc. 7,227 90,771 Southern Union Co./1/ 5,324 90,508 FactSet Research Systems Inc. 2,037 90,341 PepsiAmericas Inc. 6,225 90,200 Yellow Corp./1/ 3,014 90,058 Albemarle Corp. 3,271 89,789 BlackRock Inc. 1,832 89,768 Loews Corporation - Carolina Group 3,896 89,608 Superior Industries International Inc. 2,208 89,534 Texas Regional Bancshares Inc. Class A 2,648 89,476 FMC Corp./1/ 3,545 89,334 Sensient Technologies Corp. 4,249 89,229 Men's Wearhouse Inc. (The)/1/ 3,474 89,108 Delta & Pine Land Co. 3,847 88,519 Brookline Bancorp Inc. 6,000 88,320 Owens & Minor Inc. 3,664 88,302 MPS Group Inc./1/ 9,806 88,254 Kellwood Co. 2,634 88,107 Ralcorp Holdings Inc./1/ 3,179 88,058 Quiksilver Inc./1/ 5,509 87,869 Alkermes Inc./1/ 6,403 87,849 Mueller Industries Inc./1/ 3,447 87,726 Albany International Corp. Class A 2,842 87,647 Flir Systems Inc./1/ 3,412 87,415 Applera Corp. - Celera Genomics Group/1/ 7,471 87,336 Provident Financial Services Inc. 4,558 87,331 Sycamore Networks Inc./1/ 17,729 86,872 Emmis Communications Corp./1/ 4,298 86,734 United Rentals Inc./1/ 5,389 86,709 22 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Axcelis Technologies Inc./1/ 10,493 $ 86,672 Crown Castle International Corp./1/ 9,189 86,468 Enterasys Networks Inc./1/ 21,603 86,412 InterDigital Communications Corp./1/ 5,741 86,115 Adaptec Inc./1/ 11,366 85,927 Power Integrations Inc./1/ 2,577 85,659 Gables Residential Trust 2,638 85,260 Donnelley (R.H.) Corp./1/ 2,107 85,144 Cimarex Energy Co./1/ 4,337 85,005 Christopher & Banks Corp. 3,556 84,846 LNR Property Corp. 2,070 84,766 Timberland Co. Class A/1/ 1,985 84,680 Impac Mortgage Holdings Inc. 5,221 84,528 Massey Energy Co. 6,350 84,455 Terex Corp./1/ 4,553 84,367 GlobeSpanVirata Inc./1/ 11,676 84,301 UMB Financial Corp. 1,787 84,293 SCP Pool Corp./1/ 3,027 84,211 Thoratec Corp./1/ 4,956 84,202 NPS Pharmaceuticals Inc./1/ 3,019 84,079 Wolverine World Wide Inc. 4,332 84,041 Perrigo Co. 6,583 83,802 Flowers Foods Inc. 3,673 83,744 Diagnostic Products Corp. 2,305 83,741 Olin Corp. 5,279 83,514 Tootsie Roll Industries Inc. 2,690 83,390 Commonwealth Telephone Enterprises Inc./1/ 2,076 83,310 Macrovision Corp./1/ 4,504 83,189 Zoran Corp./1/ 4,266 83,187 Hughes Supply Inc. 2,562 83,137 Corrections Corp. of America/1/ 3,364 82,990 Knight Trading Group Inc./1/ 7,247 82,978 ADVO Inc./1/ 1,993 82,969 American Eagle Outfitters Inc./1/ 5,583 82,963 Great Lakes Chemical Corp. 4,113 82,712 Charter Municipal Mortgage Acceptance Co. 4,500 82,710 Premcor Inc./1/ 3,566 82,624 First Commonwealth Financial Corp. 6,265 82,447 Taubman Centers Inc. 4,204 82,398 Ariba Inc./1/ 27,097 82,375 Harland (John H.) Co. 3,112 82,375 Ohio Casualty Corp./1/ 5,667 82,172 Yankee Candle Co. Inc. (The)/1/ 3,220 82,046 Wilson Greatbatch Technologies Inc./1/ 2,270 81,834 Stone Energy Corp./1/ 2,319 81,814 American Axle & Manufacturing Holdings Inc./1/ 2,757 81,552 Cox Radio Inc. Class A/1/ 3,726 81,488 Selective Insurance Group Inc. 2,724 81,066 W Holding Co. Inc. 4,504 80,622 People's Bank 2,689 80,509 Engineered Support Systems Inc. 1,330 80,465 Cost Plus Inc./1/ 2,172 80,190 Hutchinson Technology Inc./1/ 2,411 79,804 Avista Corp. 5,108 79,583 Philadelphia Consolidated Holding Corp./1/ 1,721 79,510 S&T Bancorp Inc. 2,783 79,316 Blockbuster Inc. 3,775 79,275 CSG Systems International Inc./1/ 5,366 79,256 Rare Hospitality International Inc./1/ 3,178 79,164 Chemical Financial Corp. 2,557 79,139 Northwest Natural Gas Co. 2,723 78,967 Alleghany Corp./1/ 404 78,881 LaBranche & Co. Inc. 5,402 78,869 Openwave Systems Inc./1/ 18,683 78,842 AVX Corp. 5,754 78,772 Fremont General Corp. 6,197 78,764 Matthews International Corp. Class A 2,979 78,675 TriQuint Semiconductor Inc./1/ 14,047 78,663 Cabot Oil & Gas Corp. 3,021 78,546 New Century Financial Corp. 2,767 78,361 Capital Automotive 2,558 78,045 Acuity Brands Inc. 4,321 78,037 SCHEDULES OF INVESTMENTS 23 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Reinsurance Group of America Inc. 1,915 $ 78,036 Tekelec/1/ 4,997 78,003 Winn-Dixie Stores Inc. 8,083 78,001 KV Pharmaceuticals Co./1/ 3,447 77,557 Cray Inc./1/ 7,056 77,475 MAF Bancorp Inc. 2,028 77,470 Vicuron Pharmaceuticals Inc./1/ 4,370 77,349 Dionex Corp./1/ 1,963 77,264 CNET Networks Inc./1/ 10,897 77,151 Western Gas Resources Inc. 2,028 77,064 VISX Inc./1/ 4,038 76,924 Republic Bancorp Inc. 5,766 76,803 Technitrol Inc./1/ 4,171 76,788 Brooks Automation Inc./1/ 3,670 76,703 St. Mary Land & Exploration Co. 3,027 76,644 Ligand Pharmaceuticals Inc. Class B/1/ 5,934 76,489 Lincoln Electric Holding Inc. 3,442 76,447 Kilroy Realty Corp. 2,674 76,343 Parametric Technology Corp./1/ 24,456 76,303 Pep Boys-Manny, Moe & Jack Inc. 4,982 76,225 Thomas & Betts Corp./1/ 4,806 76,175 Southwest Gas Corp. 3,350 76,045 Timken Co. (The) 4,982 75,926 Liberty Corp. 1,807 75,804 Priority Healthcare Corp. Class B/1/ 3,690 75,793 VCA Antech Inc./1/ 3,218 75,784 CAL Dive International Inc./1/ 3,897 75,758 NII Holdings Inc. Class B/1/ 1,266 75,568 Marvel Enterprises Inc./1/ 3,385 75,316 Lattice Semiconductor Corp./1/ 10,571 75,160 Alaska Air Group Inc./1/ 2,700 75,114 Tupperware Corp. 5,606 75,008 FirstFed Financial Corp./1/ 1,898 74,971 Delphi Financial Group Inc. Class A 1,610 74,897 Coherent Inc./1/ 3,040 74,875 IMC Global Inc. 11,677 74,850 FTI Consulting Inc./1/ 4,313 74,831 CH Energy Group Inc. 1,698 74,712 RSA Security Inc./1/ 5,225 74,613 Black Box Corp. 1,871 74,485 Copart Inc./1/ 6,890 74,412 Digital River Inc./1/ 2,720 74,392 Federal Signal Corp. 4,988 74,321 LeapFrog Enterprises Inc./1/ 1,955 74,290 Joy Global Inc./1/ 4,721 74,120 Fuller (H.B.) Co. 3,052 74,072 American Financial Group Inc. 3,402 73,993 Ferro Corp. 3,464 73,991 Unit Corp./1/ 3,922 73,890 FileNET Corp./1/ 3,670 73,657 Cleco Corp. 4,504 73,595 Heartland Express Inc. 3,059 73,477 Anixter International Inc./1/ 3,226 73,456 Provident Bankshares Corp. 2,589 73,139 Harleysville Group Inc. 3,134 73,054 Micrel Inc./1/ 5,970 72,774 Capitol Federal Financial 2,477 72,725 NDCHealth Corp. 3,461 72,508 Credence Systems Corp./1/ 6,300 72,450 United Defense Industries Inc./1/ 2,550 72,395 Kaydon Corp. 3,045 72,288 Cathay Bancorp Inc. 1,632 72,216 Advanced Neuromodulation Systems Inc./1/ 1,807 72,099 Washington Group International Inc./1/ 2,671 71,983 Silicon Storage Technology Inc./1/ 8,213 71,864 Genesis Health Ventures Inc./1/ 2,952 71,586 Perot Systems Corp. Class A/1/ 7,109 71,090 Nektar Therapeutics/1/ 5,544 70,963 Alpharma Inc. Class A 3,804 70,754 MacDermid Inc. 2,674 70,727 Insight Enterprises Inc./1/ 4,646 70,712 Extreme Networks Inc./1/ 11,188 70,596 Crompton Corp. 12,146 70,568 Columbia Sportswear Co./1/ 1,334 70,369 Brandywine Realty Trust 2,736 70,288 Cyberonics Inc./1/ 2,275 70,206 Commercial Net Lease Realty Inc. 4,116 70,095 24 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Aquila Inc./1/ 20,738 $ 70,094 ATMI Inc./1/ 2,773 70,074 Watson Wyatt & Co. Holdings/1/ 3,110 70,006 Maverick Tube Corp./1/ 4,508 69,964 Otter Tail Corp. 2,666 69,689 Unova Inc./1/ 4,745 69,514 AmSurg Corp./1/ 2,105 69,444 CVB Financial Corp. 3,649 69,331 THQ Inc./1/ 4,222 69,325 Progress Software Corp./1/ 3,224 69,316 Interstate Bakeries Corp. 4,614 69,210 Trimble Navigation Ltd./1/ 2,988 69,172 Cumulus Media Inc. Class A/1/ 4,053 69,104 Hearst-Argyle Television Inc./1/ 2,849 68,946 Hancock Holding Co. 1,395 68,843 PSS World Medical Inc./1/ 7,760 68,831 Urban Outfitters Inc./1/ 2,634 68,642 BOK Financial Corp./1/ 1,820 68,559 Wintrust Financial Corp. 1,815 68,371 Southwestern Energy Co./1/ 3,775 68,328 Sports Authority Inc. (The)/1/ 2,168 68,205 ILEX Oncology Inc./1/ 4,102 68,134 SEACOR SMIT Inc./1/ 1,881 68,036 USG Corp./1/ 3,943 67,977 j2 Global Communications Inc./1/ 1,796 67,943 Lennox International Inc. 4,646 67,878 Westport Resources Corp./1/ 2,883 67,866 Borland Software Corp./1/ 7,365 67,832 Kansas City Southern Industries Inc./1/ 6,124 67,793 DSP Group Inc./1/ 2,718 67,705 NBT Bancorp Inc. 3,338 67,595 Plexus Corp./1/ 4,349 67,583 Group 1 Automotive Inc./1/ 1,956 67,560 Georgia Gulf Corp. 2,891 67,505 Waypoint Financial Corp. 3,372 67,440 Colonial Properties Trust 1,871 67,412 Charming Shoppes Inc./1/ 11,801 67,384 Lexington Corp. Properties Trust 3,511 67,271 Longs Drug Stores Corp. 3,340 67,234 AMCORE Financial Inc. 2,669 67,152 First Citizens BancShares Inc. Class A 635 67,119 Curtiss-Wright Corp. 949 67,018 Chateau Communities Inc. 2,251 66,990 Province Healthcare Co./1/ 5,166 66,900 Pacific Northwest Bancorp 1,874 66,808 eResearch Technology Inc./1/ 1,917 66,769 American Italian Pasta Co. Class A/1/ 1,723 66,663 First Charter Corp. 3,401 66,660 CommScope Inc./1/ 5,503 66,366 Millennium Chemicals Inc. 6,913 66,019 Senior Housing Properties Trust 4,580 65,998 Chiquita Brands International Inc./1/ 3,725 65,932 Baldor Electric Co. 3,123 65,927 Keane Inc./1/ 5,138 65,664 Nextel Partners Inc. Class A/1/ 8,338 65,453 United Natural Foods Inc./1/ 1,969 65,351 IHOP Corp. 1,983 65,142 Choice Hotels International Inc./1/ 2,244 65,121 Hecla Mining Co./1/ 12,418 65,070 Kroll Inc./1/ 3,494 64,988 EGL Inc./1/ 3,574 64,975 Penn National Gaming Inc./1/ 3,045 64,919 United National Bancorp 1,947 64,660 Entertainment Properties Trust 2,154 64,620 Pennsylvania Real Estate Investment Trust 1,929 64,525 Simpson Manufacturing Co. Inc./1/ 1,578 64,524 Power-One Inc./1/ 6,261 64,426 Photronics Inc./1/ 3,029 64,397 Transaction Systems Architects Inc. Class A/1/ 3,876 64,380 EMCOR Group Inc./1/ 1,512 64,336 Argosy Gaming Co./1/ 2,634 64,270 Priceline.com Inc./1/ 2,211 64,097 Ask Jeeves Inc./1/ 3,683 64,084 Granite Construction Inc. 3,426 63,998 Iomega Corp./1/ 5,739 63,932 Jack in the Box Inc./1/ 3,586 63,831 SCHEDULES OF INVESTMENTS 25 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Glimcher Realty Trust 3,019 $ 63,610 Genta Inc./1/ 5,008 63,451 Telik Inc./1/ 3,163 63,418 RealNetworks Inc./1/ 9,675 63,371 Adolor Corp./1/ 3,450 63,307 Novastar Financial Inc. 1,099 63,160 Select Medical Corp./1/ 2,193 63,158 RLI Corp. 1,916 63,075 MICROS Systems Inc./1/ 1,845 63,007 G&K Services Inc. Class A 1,800 63,000 Inveresk Research Group Inc./1/ 3,171 62,944 Esperion Therapeutics Inc./1/ 3,247 62,927 Endo Pharmaceuticals Holdings Inc./1/ 3,077 62,925 Sun Communities Inc. 1,596 62,882 Ryan's Family Steak Houses Inc./1/ 4,913 62,837 Sonic Automotive Inc. 2,609 62,773 Nordson Corp. 2,424 62,757 CUNO Inc./1/ 1,599 62,665 Nuveen Investments Inc. Class A 2,274 62,535 Ultratech Inc./1/ 2,214 62,479 Trust Co. of New Jersey (The) 1,952 62,464 Connetics Corp./1/ 3,458 62,451 Grey Global Group Inc. 82 62,410 Entegris Inc./1/ 5,522 62,399 Net.B@nk Inc. 5,004 62,300 Harbor Florida Bancshares Inc. 2,335 62,251 City Holding Co. 1,874 62,217 eFunds Corp./1/ 5,029 62,108 ProAssurance Corp./1/ 2,404 62,095 BankUnited Financial Corp. Class A/1/ 2,945 62,081 WellChoice Inc./1/ 2,060 62,068 Flagstar Bancorp Inc. 2,704 62,057 Beverly Enterprises Inc./1/ 10,453 61,882 Brady Corp. Class A 1,945 61,870 CMGI Inc./1/ 39,896 61,839 Harleysville National Corp. 2,642 61,744 Jones Lang LaSalle Inc./1/ 3,333 61,660 Knight Transportation Inc./1/ 2,444 61,271 UniSource Energy Corp. 3,219 61,225 National Penn Bancshares Inc. 2,211 61,147 Connecticut Bankshares Inc. 1,193 61,141 Newcastle Investment Corp. 2,653 60,992 Northwest Airlines Corp./1/ 6,278 60,897 Regeneron Pharmaceuticals Inc./1/ 3,445 60,873 REMEC Inc./1/ 5,966 60,853 Palm Inc./1/ 3,109 60,781 Sierra Pacific Resources/1/ 12,522 60,732 NetIQ Corp./1/ 5,082 60,679 Steel Dynamics Inc./1/ 4,004 60,621 Tecumseh Products Co. Class A 1,622 60,517 Interactive Data Corp./1/ 3,825 60,435 Arkansas Best Corp. 2,194 60,335 CV Therapeutics Inc./1/ 2,741 60,302 El Paso Electric Co./1/ 5,220 60,291 Brown Shoe Co. Inc. 1,901 60,262 Roadway Corp. 1,235 60,231 Digital Insight Corp./1/ 3,022 60,138 Quanta Services Inc./1/ 7,262 60,057 Spinnaker Exploration Co./1/ 2,499 59,976 Manitowoc Co. Inc. (The) 2,763 59,929 Fossil Inc./1/ 2,473 59,921 Casey's General Store Inc. 4,270 59,908 Couer D'Alene Mines Corp./1/ 19,211 59,746 Moog Inc. Class A/1/ 1,524 59,741 Exar Corp./1/ 4,227 59,728 Grey Wolf Inc./1/ 17,163 59,727 BARRA Inc./1/ 1,585 59,517 Viasys Healthcare Inc./1/ 2,945 59,489 LTX Corp./1/ 5,283 59,487 Align Technology Inc./1/ 4,752 59,448 BankAtlantic Bancorp Inc. Class A 4,165 59,351 Catalina Marketing Corp./1/ 3,887 59,044 Modine Manufacturing Co. 2,479 59,000 Genlyte Group Inc. (The)/1/ 1,325 58,989 Regal Entertainment Group Class A 3,169 58,943 Electro Scientific Industries Inc./1/ 2,797 58,933 Kulicke & Soffa Industries Inc./1/ 5,404 58,579 Umpqua Holdings Corp. 3,076 58,536 26 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- FEI Co./1/ 2,503 $ 58,420 CONMED Corp./1/ 2,830 58,411 Vintage Petroleum Inc. 5,366 58,382 United Community Banks Inc. 2,104 58,218 Summit Properties Inc. 2,559 58,140 Jarden Corp./1/ 1,536 57,984 AtheroGenics Inc./1/ 3,462 57,954 ProQuest Co./1/ 2,203 57,939 Aeroflex Inc./1/ 6,529 57,782 First Financial Bankshares Inc. 1,563 57,768 Pinnacle Systems Inc./1/ 6,851 57,754 Anteon International Corp./1/ 1,887 57,742 MAXIMUS Inc./1/ 1,676 57,738 Warnaco Group Inc. (The)/1/ 3,703 57,730 Corporate Office Properties Trust 3,116 57,677 First Financial Bancorp 3,903 57,569 ESCO Technologies Inc./1/ 1,263 57,176 Horace Mann Educators Corp. 3,940 57,169 Actel Corp./1/ 2,381 57,073 Sohu.com Inc./1/ 1,835 57,069 MB Financial Inc. 1,282 56,921 Kirby Corp./1/ 1,983 56,912 Onyx Pharmaceuticals Inc./1/ 2,639 56,870 Advanced Medical Optics Inc./1/ 3,163 56,807 American Pharmaceutical Partners Inc./1/ 1,812 56,791 Eclipsys Corp./1/ 3,547 56,717 MKS Instruments Inc./1/ 2,614 56,619 Journal Register Co./1/ 3,018 56,587 Quanex Corp. 1,683 56,549 Dollar Thrifty Automotive Group Inc./1/ 2,486 56,482 Seacoast Financial Services Corp. 2,723 56,393 USEC Inc. 8,633 56,373 Ventana Medical Systems Inc./1/ 1,398 56,339 Actuant Corp. Class A/1/ 1,003 56,318 Frontier Airlines Inc./1/ 3,416 56,227 Navigant Consulting Co./1/ 4,564 56,183 Texas Industries Inc. 2,281 56,113 Imagistics International Inc./1/ 1,935 56,076 Wabtec Corp. 3,533 55,998 Manufactured Home Communities Inc. 1,428 55,949 R&G Financial Corp. Class B 1,916 55,947 Independent Bank Corp. (Michigan) 1,907 55,837 Aztar Corp./1/ 3,147 55,733 Arrow International Inc. 2,422 55,706 US Oncology Inc./1/ 7,614 55,658 American Management Systems Inc./1/ 4,362 55,615 MFA Mortgage Investments Inc. 5,839 55,587 Select Comfort Corp./1/ 2,097 55,571 InfoSpace Inc./1/ 2,720 55,515 Winnebago Industries Inc. 1,244 55,458 Mid-State Bancshares 2,490 55,452 Rogers Corp./1/ 1,781 55,247 Aeropostale Inc./1/ 2,041 55,209 ABM Industries Inc. 3,890 55,043 ANSYS Inc./1/ 1,548 55,016 Reliance Steel & Aluminum Co. 2,478 54,987 Oceaneering International Inc./1/ 2,334 54,896 Too Inc./1/ 3,723 54,840 American Healthways Inc./1/ 1,305 54,797 Price Communications Corp./1/ 4,414 54,734 Micromuse Inc./1/ 6,689 54,716 WD-40 Co. 1,724 54,634 Tesoro Petroleum Corp./1/ 6,445 54,525 MGE Energy Inc. 1,800 54,468 Asyst Technologies Inc./1/ 3,868 54,423 Photon Dynamics Inc./1/ 1,867 54,423 Griffon Corp./1/ 3,029 54,401 PolyMedica Corp. 2,050 54,325 Sierra Health Services Inc./1/ 2,637 54,190 WesBanco Inc. 2,304 54,144 Redwood Trust Inc. 1,276 54,102 Enzo Biochem Inc./1/ 2,773 54,101 Hanover Compressor Co./1/ 5,460 54,054 Hollinger International Inc. 4,373 54,007 Laclede Group Inc. (The) 1,996 53,912 Newport Corp./1/ 3,818 53,834 Ruddick Corp. 3,458 53,737 SCHEDULES OF INVESTMENTS 27 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Longview Fibre Co. 5,496 $ 53,696 Advent Software Inc./1/ 3,337 53,692 Instinet Group Inc./1/ 11,252 53,661 Community Bank System Inc. 1,217 53,438 Tanox Inc./1/ 2,670 53,427 Enzon Pharmaceuticals Inc./1/ 4,584 53,358 Steelcase Inc. Class A 4,525 53,305 Allegheny Technologies Inc. 8,120 53,186 DRS Technologies Inc./1/ 2,202 53,134 Anchor BanCorp Wisconsin Inc. 2,259 53,041 InterMune Inc./1/ 2,776 52,966 Bowne & Co. Inc. 3,537 52,878 JLG Industries Inc. 4,585 52,819 Heritage Property Investment Trust Inc. 1,822 52,619 UICI/1/ 4,195 52,605 Dot Hill Systems Corp./1/ 3,815 52,494 Anworth Mortgage Asset Corp. 3,661 52,279 Inspire Pharmaceuticals Inc./1/ 3,032 52,150 Boyd Gaming Corp. 3,416 52,128 Lin TV Corp. Class A/1/ 2,449 52,066 Schulman (A.) Inc. 3,280 52,021 United States Cellular Corp./1/ 1,784 51,914 Dime Community Bancshares 2,253 51,819 Hudson River Bancorp Inc. 1,610 51,729 Guitar Center Inc./1/ 1,608 51,713 Sandy Spring Bancorp Inc. 1,584 51,512 ValueClick Inc./1/ 6,125 51,511 Empire District Electric Co. (The) 2,341 51,502 Manhattan Associates Inc./1/ 1,987 51,443 FelCor Lodging Trust Inc. 4,963 51,417 Scientific Games Corp. Class A/1/ 4,501 51,356 Equity One Inc. 3,017 51,289 Integra LifeSciences Holdings Corp./1/ 1,812 51,261 Checkpoint Systems Inc./1/ 3,241 51,208 Digene Corp./1/ 1,250 51,075 Per-Se Technologies Inc./1/ 3,190 51,040 ElkCorp 2,166 51,031 Kopin Corp./1/ 7,360 51,005 Symyx Technologies Inc./1/ 2,367 50,985 Alabama National Bancorp 1,073 50,967 Shuffle Master Inc./1/ 1,868 50,772 TierOne Corp./1/ 2,409 50,709 Bank Mutual Corp. 1,188 50,431 Tredegar Corp. 3,343 50,312 Corus Bankshares Inc. 940 50,290 UnitedGlobalCom Inc. Class A/1/ 8,226 50,261 Wausau-Mosinee Paper Corp. 4,115 50,244 Vignette Corp./1/ 21,820 50,186 Finish Line Inc. (The)/1/ 1,905 50,101 eSpeed, Inc./1/ 2,215 50,081 South Jersey Industries Inc. 1,315 49,773 CNA Financial Corp./1/ 2,367 49,754 Frontier Financial Corp. 1,664 49,754 Houston Exploration Co./1/ 1,417 49,737 Sunrise Senior Living Inc./1/ 1,892 49,627 Mindspeed Technologies Inc./1/ 9,207 49,626 Inter-Tel Inc. 2,021 49,616 Alfa Corp. 3,959 49,567 Internet Security Systems Inc./1/ 3,961 49,512 Teledyne Technologies Inc./1/ 3,394 49,383 Magnum Hunter Resources Inc./1/ 6,166 49,266 WMS Industries Inc./1/ 2,170 49,172 Regal-Beloit Corp. 2,406 49,082 Six Flags Inc./1/ 9,318 49,013 Geron Corp./1/ 3,571 48,923 Carpenter Technology Corp. 2,279 48,862 UIL Holdings Corp. 1,396 48,846 Student Loan Corp. 409 48,806 Veeco Instruments Inc./1/ 2,443 48,762 MicroStrategy Inc. Class A/1/ 1,052 48,403 Sterling Financial Corp. (Washington)/1/ 1,719 48,390 Saxon Capital Inc./1/ 2,813 48,215 Stewart Information Services Corp./1/ 1,707 48,206 Sotheby's Holdings Inc. Class A/1/ 4,441 48,052 Smith (A.O.) Corp. 1,715 48,037 Informatica Corp./1/ 6,445 48,015 K-Swiss Inc. Class A 1,331 47,903 Dendrite International Inc./1/ 3,151 47,864 28 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Rayovac Corp./1/ 3,277 $ 47,844 M/I Schottenstein Homes Inc. 1,206 47,842 Pacer International Inc./1/ 2,400 47,832 Aaron Rents Inc. 2,283 47,829 American Medical Systems Holdings Inc./1/ 2,197 47,675 Hain Celestial Group Inc./1/ 2,629 47,664 Centene Corp./1/ 1,568 47,652 PS Business Parks Inc. 1,262 47,628 TBC Corp./1/ 1,899 47,570 Mercury Computer Systems Inc./1/ 2,226 47,481 Stride Rite Corp. 4,386 47,369 Superior Energy Services Inc./1/ 4,831 47,344 Glacier Bancorp Inc. 1,724 47,289 School Specialty Inc./1/ 1,676 47,280 MSC Industrial Direct Co. Inc. Class A 2,262 47,163 GrafTech International Ltd./1/ 5,891 47,128 Fidelity Bankshares Inc. 1,793 47,084 United Surgical Partners International Inc./1/ 1,662 47,035 West Corp./1/ 1,963 46,700 Arch Chemicals Inc. 2,243 46,654 NCO Group Inc./1/ 1,986 46,611 Microsemi Corp./1/ 3,056 46,573 Sterling Bancshares Inc. 3,898 46,503 Westcorp Inc. 1,328 46,414 Boston Private Financial Holdings Inc. 1,969 46,390 Medarex Inc./1/ 7,819 46,367 Mid-America Apartment Communities Inc. 1,535 46,326 Cambrex Corp. 2,040 46,308 Bright Horizons Family Solutions Inc./1/ 1,158 46,262 Nu Skin Enterprises Inc. Class A 3,628 46,257 CSK Auto Corp./1/ 2,999 46,245 Kelly Services Inc. Class A 1,853 46,214 Resources Connection Inc./1/ 1,892 46,180 Sovran Self Storage Inc. 1,393 46,178 Websense Inc./1/ 2,169 46,135 Triumph Group Inc./1/ 1,548 46,130 Ionics Inc./1/ 1,885 46,107 Handleman Co. 2,730 46,082 Unizan Financial Corp. 2,307 46,025 Tetra Technologies Inc./1/ 2,232 46,024 Shaw Group Inc. (The)/1/ 4,369 45,918 Florida East Coast Industries Inc. 1,596 45,885 Littelfuse Inc./1/ 1,995 45,885 Landry's Restaurants Inc. 2,223 45,794 MCG Capital Corp. 2,933 45,784 Mykrolis Corp./1/ 3,757 45,610 Insituform Technologies Inc. Class A/1/ 2,563 45,519 Plains Exploration & Production Co./1/ 3,638 45,366 Paxar Corp./1/ 3,539 45,299 Anthracite Capital Inc. 4,686 45,220 Movie Gallery Inc./1/ 2,301 45,215 Mine Safety Appliances Co. 826 45,116 Belden Inc. 2,580 45,073 PanAmSat Corp./1/ 3,112 45,062 First Financial Corp. 746 45,058 Cell Genesys Inc./1/ 3,573 44,948 Wright Medical Group Inc./1/ 1,778 44,948 First Financial Holdings Inc. 1,490 44,938 PFF Bancorp Inc. 1,409 44,919 Headwaters Inc./1/ 2,786 44,855 Quantum Corp./1/ 14,560 44,845 Solutia Inc. 11,223 44,780 Helix Technology Corp. 2,733 44,739 First Community Bancorp 1,335 44,709 RAIT Investment Trust 1,947 44,703 Magma Design Automation Inc./1/ 2,277 44,675 Oxford Industries Inc. 695 44,619 EastGroup Properties Inc. 1,606 44,615 BioMarin Pharmaceutical Inc./1/ 5,820 44,581 Identix Inc./1/ 8,520 44,560 SERENA Software Inc./1/ 2,395 44,547 WFS Financial Inc./1/ 1,201 44,473 Komag Inc./1/ 2,537 44,448 Quest Software Inc./1/ 3,664 44,334 SCHEDULES OF INVESTMENTS 29 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- SPS Technologies Inc./1/ 984 $ 44,280 Commercial Metals Co. 2,410 44,272 SureWest Communications 1,331 44,256 Esterline Technologies Corp./1/ 2,288 44,136 Cohu Inc. 2,255 44,108 Monaco Coach Corp./1/ 2,662 44,056 Alliance Data Systems Corp./1/ 1,664 43,930 Primedia Inc./1/ 15,399 43,887 TIBCO Software Inc./1/ 8,194 43,838 Wynn Resorts Ltd./1/ 2,411 43,832 Speedway Motorsports Inc. 1,482 43,734 Portal Software Inc./1/ 3,018 43,706 CIMA Labs Inc./1/ 1,563 43,686 Overseas Shipholding Group Inc. 1,688 43,635 Sterling Financial Corp. (Pennsylvania) 1,715 43,561 Labor Ready Inc./1/ 4,333 43,547 Cell Therapeutics Inc./1/ 3,817 43,399 National Health Investors Inc. 2,380 43,387 Stewart & Stevenson Services Inc. 2,887 43,363 WebEx Communications Inc./1/ 2,277 43,240 Spartech Corp. 2,027 43,175 ShopKo Stores Inc./1/ 2,878 43,170 CTS Corp. 3,505 43,147 OM Group Inc./1/ 2,946 43,129 IDX Systems Corp./1/ 1,858 42,957 Suffolk Bancorp 1,290 42,944 Wesco Financial Corp. 126 42,836 Columbia Laboratories Inc./1/ 3,538 42,739 K2 Inc./1/ 2,875 42,694 Itron Inc./1/ 2,114 42,428 Safeguard Scientifics Inc./1/ 12,449 42,327 Powerwave Technologies Inc./1/ 6,390 42,302 Entravision Communications Corp./1/ 4,448 42,256 Methode Electronics Inc. Class A 3,578 42,256 C&D Technologies Inc. 2,233 42,248 Meritage Corp./1/ 894 42,241 Park Electrochemical Corp. 1,854 42,179 CONSOL Energy Inc. 2,270 42,177 Jo-Ann Stores Inc./1/ 1,511 42,157 Weis Markets Inc. 1,238 42,104 Bedford Property Investors Inc. 1,622 42,091 Electronics Boutique Holdings Corp./1/ 1,472 42,055 URS Corp./1/ 2,165 42,001 Standard Microsystems Corp./1/ 1,556 41,981 JDA Software Group Inc./1/ 2,806 41,725 Jacuzzi Brands Inc./1/ 6,719 41,658 Rollins Inc. 2,334 41,639 W-H Energy Services Inc./1/ 2,337 41,599 SafeNet Inc./1/ 1,148 41,477 Dick's Sporting Goods Inc./1/ 1,110 41,447 Cubic Corp. 1,648 41,398 Woodward Governor Co. 947 41,393 Gold Bancorp Inc. 3,410 41,363 Atrix Laboratories Inc./1/ 2,008 41,345 Frontier Oil Corp. 2,812 41,336 Koger Equity Inc. 2,198 41,322 Orbital Sciences Corp./1/ 4,448 41,277 Prime Hospitality Corp./1/ 4,749 41,269 Gray Television Inc. 3,529 41,219 Hooper Holmes Inc. 6,192 41,177 Cornerstone Realty Income Trust Inc. 5,092 41,143 PAREXEL International Corp./1/ 2,685 41,134 Topps Co. (The) 4,217 41,116 First Merchants Corp. 1,604 41,094 CIBER Inc./1/ 5,402 41,055 PracticeWorks Inc./1/ 1,912 41,051 FuelCell Energy Inc./1/ 3,506 41,020 Insight Communications Co. Inc./1/ 4,297 40,907 Impax Laboratories Inc./1/ 3,258 40,758 Bandag Inc. 1,208 40,746 Stage Stores Inc./1/ 1,598 40,717 ExpressJet Holdings Inc./1/ 2,946 40,655 F5 Networks Inc./1/ 2,113 40,654 Intuitive Surgical Inc./1/ 2,436 40,632 Financial Federal Corp./1/ 1,329 40,548 West Pharmaceutical Services Inc. 1,295 40,546 Haemonetics Corp./1/ 1,717 40,538 30 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Lone Star Steakhouse & Saloon Inc. 1,938 $ 40,504 Russell Corp. 2,480 40,424 Cirrus Logic Inc./1/ 7,305 40,397 Bay View Capital Corp./1/ 6,654 40,390 Boca Resorts Inc. Class A/1/ 3,111 40,319 Armor Holdings Inc./1/ 2,407 40,317 Spherion Corp./1/ 5,786 40,271 Tuesday Morning Corp./1/ 1,445 40,214 California Water Service Group 1,556 40,160 United Therapeutics Inc./1/ 1,777 40,142 Kindred Healthcare Inc./1/ 1,071 40,109 Nautilus Group Inc. (The) 3,178 40,106 Sola International Inc./1/ 2,499 39,984 American States Water Co. 1,696 39,975 Wabash National Corp./1/ 2,498 39,843 Investors Real Estate Trust 4,058 39,809 Phillips-Van Heusen Corp. 2,651 39,792 Akamai Technologies Inc./1/ 9,262 39,734 Stewart Enterprises Inc. Class A/1/ 10,454 39,725 Sinclair Broadcast Group Inc. Class A/1/ 3,902 39,644 Tularik Inc./1/ 4,020 39,637 SurModics Inc./1/ 1,472 39,508 AMC Entertainment Inc./1/ 2,948 39,503 Wind River Systems Inc./1/ 6,936 39,466 Applied Industrial Technologies Inc. 1,981 39,362 Action Performance Companies Inc. 1,608 39,300 Schweitzer-Mauduit International Inc. 1,556 39,289 Multimedia Games Inc./1/ 1,078 39,228 IBERIABANK Corp. 743 39,097 InVision Technologies Inc./1/ 1,606 39,090 CoStar Group Inc./1/ 1,502 39,052 Trimeris Inc./1/ 1,549 38,988 First Federal Capital Corp. 1,896 38,963 Advisory Board Co. (The)/1/ 857 38,951 Lone Star Technologies Inc./1/ 2,886 38,932 AMLI Residential Properties Trust 1,485 38,907 Salix Pharmaceuticals Ltd./1/ 2,020 38,905 Cash America International Inc. 2,371 38,884 Time Warner Telecom Inc. Class A/1/ 4,189 38,790 Kos Pharmaceuticals Inc./1/ 1,127 38,769 VistaCare Inc. Class A/1/ 1,235 38,656 Franklin Electric Co. Inc. 693 38,586 Harmonic Inc./1/ 6,142 38,510 @Road Inc./1/ 2,860 38,467 Eon Labs Inc./1/ 1,003 38,465 Offshore Logistics Inc./1/ 1,894 38,448 Roto-Rooter Inc. 1,081 38,430 Triad Guaranty Inc./1/ 783 38,430 Denbury Resources Inc./1/ 3,108 38,415 Forward Air Corp./1/ 1,389 38,406 Terayon Communication Systems Inc./1/ 6,669 38,347 21st Century Insurance Group 2,780 38,308 Remington Oil & Gas Corp./1/ 2,105 38,206 Central Pacific Financial Corp. 1,556 38,122 SciClone Pharmaceuticals Inc./1/ 4,803 37,944 NCI Building Systems Inc./1/ 1,901 37,830 Opsware Inc./1/ 5,180 37,814 First Sentinel Bancorp Inc. 2,113 37,802 Newpark Resources Inc./1/ 8,780 37,754 Datascope Corp. 1,228 37,749 International Multifoods Corp./1/ 1,616 37,734 Tennant Co. 1,024 37,724 Infinity Property & Casualty Corp. 1,339 37,639 Cable Design Technologies Corp./1/ 4,702 37,616 Kyphon Inc./1/ 1,929 37,615 NetFlix Inc./1/ 1,115 37,475 Pegasus Solutions Inc./1/ 2,708 37,452 Swift Energy Co./1/ 2,654 37,448 Community Trust Bancorp Inc. 1,285 37,368 State Auto Financial Corp. 1,481 37,351 S1 Corp./1/ 7,391 37,325 Mid Atlantic Realty Trust 1,776 37,296 Orthodontic Centers of America Inc./1/ 4,730 37,272 Advanced Energy Industries Inc./1/ 1,972 37,212 SCHEDULES OF INVESTMENTS 31 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Immucor Inc./1/ 1,380 $ 37,191 Arris Group Inc./1/ 6,458 37,133 Central Garden & Pet Co./1/ 1,421 37,117 Parkway Properties Inc. 849 37,101 Aviall Inc./1/ 2,991 37,029 First Essex Bancorp Inc. 727 36,997 Getty Realty Corp. 1,510 36,995 ArthroCare Corp./1/ 2,075 36,976 Tompkins Trustco Inc. 807 36,920 First Community Bancshares Inc. 1,048 36,911 Simmons First National Corp. Class A 1,564 36,848 Artisan Components Inc./1/ 2,186 36,747 Gymboree Corp./1/ 2,608 36,747 Praecis Pharmaceuticals Inc./1/ 5,467 36,684 Range Resources Corp./1/ 5,361 36,669 Mediacom Communications Corp./1/ 5,471 36,656 Epicor Software Corp./1/ 4,093 36,591 CKE Restaurant Inc./1/ 5,667 36,552 United Auto Group Inc./1/ 1,588 36,524 ScanSource Inc./1/ 998 36,467 webMethods Inc./1/ 4,565 36,429 Burlington Coat Factory Warehouse Corp. 1,945 36,371 Papa John's International Inc./1/ 1,466 36,371 Golden Telecom Inc./1/ 1,328 36,308 Retek Inc./1/ 5,376 36,288 Ocular Sciences Inc./1/ 1,628 36,272 CARBO Ceramics Inc. 1,002 36,232 Penn Virginia Corp. 819 36,200 Century Business Services Inc./1/ 8,533 36,180 Atlantic Coast Airlines Holdings Inc./1/ 4,250 36,167 POZEN Inc./1/ 2,034 36,165 Irwin Financial Corp. 1,488 36,158 7-Eleven Inc./1/ 2,632 36,137 Town & Country Trust (The) 1,538 36,128 WSFS Financial Corp. 855 36,081 aQuantive, Inc./1/ 3,896 36,077 Systems & Computer Technology Corp./1/ 3,455 36,036 Hewitt Associates Inc. Class A/1/ 1,478 35,989 Trammell Crow Co./1/ 2,888 35,956 Washington Trust Bancorp Inc. 1,497 35,943 Analogic Corp. 748 35,904 Genesco Inc./1/ 2,234 35,878 CDI Corp. 1,327 35,869 Watsco Inc. 1,876 35,850 Local Financial Corp./1/ 2,002 35,816 Secure Computing Corp./1/ 3,066 35,811 Spanish Broadcasting System Inc. Class A/1/ 4,212 35,802 Primus Telecommunications Group Inc./1/ 5,294 35,735 Chesapeake Corp. 1,582 35,658 Independent Bank Corp. (Massachusetts) 1,392 35,649 PTEK Holdings Inc./1/ 4,374 35,648 Duane Reade Inc./1/ 2,231 35,584 First Republic Bank 1,154 35,578 Sterling Bancorp (New York) 1,322 35,575 Oriental Financial Group Inc. 1,463 35,492 Nabi Biopharmaceuticals/1/ 4,206 35,457 Biosite Inc./1/ 1,249 35,447 Corixa Corp./1/ 4,447 35,398 Universal Compression Holdings Inc./1/ 1,644 35,379 WilTel Communications Inc./1/ 2,213 35,364 iDine Rewards Network Inc./1/ 2,173 35,311 Steak n Shake Company (The)/1/ 2,361 35,179 Presidential Life Corp. 2,323 35,147 Silgan Holdings Inc./1/ 1,098 35,136 Chicago Mercantile Exchange Holdings Inc. 510 35,093 Capital City Bank Group Inc. 918 35,031 United Community Financial Corp. 3,530 34,947 Agile Software Corp./1/ 3,669 34,929 Mesa Air Group Inc./1/ 3,144 34,898 Siliconix Inc./1/ 694 34,867 Old Dominion Freight Line Inc./1/ 1,197 34,821 32 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Fidelity National Information Solutions Inc./1/ 1,399 $ 34,765 Cross Country Healthcare Inc./1/ 2,463 34,704 ValueVision Media Inc. Class A/1/ 2,181 34,700 NACCO Industries Inc. 485 34,678 Aksys Ltd./1/ 3,469 34,655 StarTek Inc. 1,080 34,560 MTS Systems Corp. 2,269 34,534 Genesis Microchip Inc./1/ 3,080 34,527 SOURCECORP Inc./1/ 1,483 34,480 ManTech International Corp. Class A/1/ 1,384 34,434 ESS Technology Inc./1/ 3,194 34,431 Kramont Realty Trust 2,031 34,425 Berry Petroleum Co. Class A 1,875 34,275 Old Second Bancorp Inc. 797 34,271 Aspect Communications Corp./1/ 4,105 34,195 General Communication Inc. Class A/1/ 4,110 34,195 Kaman Corp. Class A 2,637 34,176 Kimball International Inc. Class B 2,331 34,172 Heidrick & Struggles International Inc./1/ 2,016 34,131 RadiSys Corp./1/ 1,891 34,114 Glenborough Realty Trust Inc. 1,806 34,061 Albany Molecular Research Inc./1/ 2,298 34,033 Universal Health Realty Income Trust 1,251 33,965 Southern Peru Copper Corp. 1,535 33,954 Walter Industries Inc. 3,163 33,939 Thomas Industries Inc. 1,188 33,882 Odyssey Re Holdings Corp. 1,645 33,854 Portfolio Recovery Associates Inc./1/ 1,331 33,834 Gaylord Entertainment Co./1/ 1,375 33,756 Corvis Corp./1/ 26,157 33,743 Intrado Inc./1/ 1,481 33,737 Russ Berrie & Co. Inc. 1,001 33,724 Incyte Corp./1/ 7,312 33,708 Libbey Inc. 1,208 33,594 PMA Capital Corp. Class A 2,681 33,593 Global Industries Ltd./1/ 7,377 33,565 Robert Mondavi Corp. (The) Class A/1/ 1,083 33,551 Intermagnetics General Corp./1/ 1,498 33,495 PolyOne Corp. 8,505 33,425 Verity Inc./1/ 2,556 33,407 Penwest Pharmaceuticals Co./1/ 1,548 33,282 Arctic Cat Inc. 1,719 33,228 Greif Inc. Class A 1,278 33,228 InterVoice-Brite Inc./1/ 3,715 33,212 Pre-Paid Legal Services Inc./1/ 1,415 33,139 Integra Bank Corp. 1,725 33,137 Keystone Property Trust 1,634 33,105 Stratex Networks Inc./1/ 8,598 33,102 E.piphany Inc./1/ 6,617 33,019 Cubist Pharmaceuticals Inc./1/ 3,057 32,985 Viasat Inc./1/ 1,852 32,984 Isle of Capri Casinos Inc./1/ 1,660 32,885 Fleetwood Enterprises Inc./1/ 3,543 32,844 Centex Construction Products Inc. 735 32,832 Korn/Ferry International/1/ 3,977 32,810 FBL Financial Group Inc. Class A 1,331 32,796 Barnes Group Inc. 1,261 32,736 Haverty Furniture Companies Inc. 1,790 32,721 Gardner Denver Inc./1/ 1,556 32,692 Vector Group Ltd. 2,270 32,692 Global Imaging Systems Inc./1/ 1,328 32,669 Lawson Software Inc./1/ 4,598 32,600 Champion Enterprises Inc./1/ 5,132 32,588 FIRSTFED AMERICA BANCORP INC 1,468 32,443 O'Charley's Inc./1/ 2,187 32,433 Palm Harbor Homes Inc./1/ 1,892 32,410 Equity Inns Inc. 4,297 32,356 Young Broadcasting Inc. Class A/1/ 1,647 32,265 Universal Forest Products Inc. 1,329 32,255 Exelixis Inc./1/ 4,507 32,180 Deltic Timber Corp. 1,112 32,159 Merit Medical Systems Inc./1/ 1,455 32,155 Able Laboratories Inc./1/ 1,699 32,094 Alaris Medical Systems Inc./1/ 1,928 32,005 SCHEDULES OF INVESTMENTS 33 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Transkaryotic Therapies Inc./1/ 3,051 $ 31,883 Comstock Resources Inc./1/ 2,385 31,864 Maxygen Inc./1/ 3,121 31,834 Oil States International Inc./1/ 2,501 31,738 Apogee Enterprises Inc. 3,073 31,713 SRA International Inc. Class A/1/ 847 31,703 U.S.I. Holdings Corp./1/ 2,434 31,666 Brookfield Homes Corp. 1,708 31,649 Dress Barn Inc./1/ 2,308 31,620 Bombay Co. Inc. (The)/1/ 3,210 31,618 Texas Genco Holdings Inc. 1,327 31,583 U.S. Restaurant Properties Inc. 1,936 31,460 West Coast Bancorp 1,610 31,443 New England Business Service Inc. 1,181 31,438 American West Holdings Corp. Class B/1/ 3,226 31,389 Cato Corp. Class A 1,556 31,385 ScanSoft Inc./1/ 7,482 31,350 Savient Pharmaceuticals Inc./1/ 6,197 31,295 TALX Corp. 1,266 31,169 Alexion Pharmaceuticals Inc./1/ 1,866 31,106 Tyler Technologies Inc./1/ 4,388 31,067 Sapient Corp./1/ 8,643 31,028 Saul Centers Inc. 1,167 30,984 GBC Bancorp 803 30,795 CTI Molecular Imaging Inc./1/ 2,084 30,781 Immunomedics Inc./1/ 4,203 30,766 Oplink Communications Inc./1/ 12,159 30,762 Pharmacopeia Inc./1/ 2,418 30,706 ChipPAC Inc. Class A/1/ 5,211 30,693 Avanex Corp./1/ 6,317 30,637 GenCorp. Inc. 3,423 30,636 EDO Corp. 1,512 30,618 Finisar Corp./1/ 13,604 30,609 autobytel.com Inc./1/ 3,213 30,588 Coinstar Inc./1/ 2,272 30,558 Omega Financial Corp. 926 30,558 Nuevo Energy Co./1/ 1,676 30,453 Argonaut Group Inc. 2,342 30,446 Myriad Genetics Inc./1/ 2,676 30,399 RehabCare Group Inc./1/ 1,782 30,383 Integrated Silicon Solution Inc./1/ 3,046 30,308 Applied Films Corporation/1/ 1,014 30,146 TTM Technologies Inc./1/ 2,108 30,102 Manugistics Group Inc./1/ 5,490 30,085 DIMON Inc. 4,359 30,077 Interchange Financial Services Corp. 1,464 30,056 Zoll Medical Corp./1/ 935 29,967 Valmont Industries Inc. 1,513 29,942 Omnicell Inc./1/ 1,835 29,800 SpectraLink Corp./1/ 1,594 29,776 Hancock Fabrics Inc. 1,885 29,745 Rock-Tenn Co. Class A 2,039 29,729 Isis Pharmaceuticals Inc./1/ 4,554 29,692 Concur Technologies Inc./1/ 2,502 29,674 TALK America Holdings Inc./1/ 2,600 29,666 SWS Group Inc. 1,505 29,664 Encysive Pharmaceuticals Inc./1/ 4,701 29,663 Comtech Telecommunications Corp./1/ 1,239 29,624 Hawthorne Financial Corp./1/ 736 29,558 Echelon Corp./1/ 2,479 29,500 SonoSite Inc./1/ 1,470 29,415 Plains Resource Inc./1/ 2,358 29,357 Anaren Inc./1/ 2,299 29,335 Landauer Inc. 825 29,230 Bel Fuse Inc. Class B 1,104 29,168 Marcus Corp. 1,911 29,162 Possis Medical Inc./1/ 1,866 29,110 Crown American Realty Trust 2,442 29,060 Jakks Pacific Inc./1/ 2,381 29,024 FreeMarkets Inc./1/ 3,725 28,984 Hanger Orthopedic Group Inc./1/ 1,886 28,950 Troy Financial Corp. 826 28,918 Alderwoods Group Inc./1/ 3,730 28,907 Stillwater Mining Co./1/ 4,578 28,841 Mattson Technology Inc./1/ 3,180 28,811 Artesyn Technologies Inc./1/ 3,798 28,789 ICU Medical Inc./1/ 1,058 28,788 Kadant Inc./1/ 1,501 28,759 34 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Pixelworks Inc./1/ 3,335 $ 28,748 SonicWALL Inc./1/ 4,961 28,724 New Focus Inc./1/ 6,385 28,669 Planar Systems Inc./1/ 1,336 28,657 Exult Inc./1/ 3,564 28,655 LaSalle Hotel Properties 1,653 28,646 Glatfelter Co. 2,426 28,578 aaiPharma Inc./1/ 1,670 28,574 Wireless Facilities Inc./1/ 2,401 28,572 Standard Register Co. (The) 1,718 28,519 GameStop Corp./1/ 1,793 28,509 Packeteer Inc./1/ 2,364 28,486 Serologicals Corp./1/ 2,166 28,483 OshKosh B'Gosh Inc. Class A 1,106 28,446 Consolidated Graphics Inc./1/ 1,118 28,431 Watts Industries Inc. Class A 1,612 28,403 Standex International Corp. 1,167 28,358 First Busey Corp. Class A 1,099 28,354 Saga Communications Inc./1/ 1,464 28,328 AMCOL International Corp. 2,290 28,304 Right Management Consultants Inc./1/ 1,564 28,277 Mobile Mini Inc./1/ 1,465 28,260 American Physicians Capital Inc./1/ 1,017 28,252 Correctional Properties Trust 1,129 28,169 Interwoven Inc./1/ 10,630 28,169 Allegiant Bancorp Inc. 1,394 28,159 Molecular Devices Corp./1/ 1,613 28,098 SeaChange International Inc./1/ 2,242 28,092 Transmeta Corp./1/ 10,024 28,067 Community Banks Inc. 847 28,036 Concord Camera Corp./1/ 2,632 28,031 Veritas DGC Inc./1/ 3,509 28,002 General Cable Corp./1/ 3,516 27,987 Valhi Inc. 2,485 27,981 1st Source Corp. 1,464 27,977 Westell Technologies Inc. Class A/1/ 3,730 27,938 Meristar Hospitality Corp. 3,944 27,924 Peoples Holding Co. 613 27,916 Zenith National Insurance Corp. 1,002 27,876 Cleveland-Cliffs Inc./1/ 1,088 27,853 Triarc Companies Inc. Class B 2,676 27,830 NUI Corp. 1,861 27,822 Prima Energy Corp./1/ 1,098 27,725 BSB Bancorp Inc. 1,000 27,710 DuPont Photomasks Inc./1/ 1,219 27,683 Silicon Image Inc./1/ 6,138 27,682 Tower Automotive Inc./1/ 6,138 27,621 City Bank 851 27,581 California Pizza Kitchen Inc./1/ 1,583 27,544 Oakley Inc./1/ 2,754 27,540 Bank of Granite Corp. 1,457 27,319 Bally Total Fitness Holding Corp./1/ 3,155 27,291 Main Street Banks Inc. 1,089 27,279 North Pittsburgh Systems Inc. 1,608 27,223 Holly Corp. 1,095 27,134 RailAmerica Inc./1/ 3,152 27,107 CorVel Corp./1/ 762 27,089 Noven Pharmaceuticals Inc./1/ 2,374 27,064 Verso Technologies Inc./1/ 7,313 27,058 MemberWorks Inc./1/ 848 26,983 Netegrity Inc./1/ 2,694 26,967 Antigenics Inc./1/ 2,207 26,925 Interface Inc. Class A/1/ 4,967 26,921 Central Vermont Public Service Corp. 1,212 26,882 CompuCredit Corp./1/ 1,530 26,775 Genesee & Wyoming Inc. Class A/1/ 1,129 26,769 Churchill Downs Inc. 704 26,738 Rofin-Sinar Technologies Inc./1/ 1,269 26,636 Zygo Corp./1/ 1,622 26,601 Drugstore.com Inc./1/ 3,477 26,599 Agilysys Inc. 3,031 26,582 MEMC Electronics Materials Inc./1/ 2,436 26,577 Hydril Co./1/ 1,310 26,541 Peoples Bancorp Inc. 990 26,492 Euronet Worldwide Inc./1/ 2,178 26,484 Wet Seal Inc. Class A/1/ 2,633 26,462 United Fire & Casualty Co. 723 26,433 Hibbet Sporting Goods Inc./1/ 1,099 26,288 SCHEDULES OF INVESTMENTS 35 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Tanger Factory Outlet Centers Inc. 715 $ 26,276 Prosperity Bancshares Inc. 1,232 26,254 Energy Partners Ltd./1/ 2,351 26,143 FalconStor Software Inc./1/ 4,176 26,142 Lance Inc. 2,630 26,142 Unifi Inc./1/ 5,443 26,126 Universal American Financial Corp./1/ 2,949 26,099 OraSure Technologies Inc./1/ 2,746 26,087 Symmetricom Inc./1/ 4,121 26,086 Neoware Systems Inc./1/ 1,528 26,083 AC Moore Arts & Crafts Inc./1/ 1,170 26,068 Gabelli Asset Management Inc. Class A/1/ 731 26,067 Lightbridge Inc./1/ 2,755 25,980 Sharper Image Corp./1/ 1,126 25,966 Lionbridge Technologies Inc./1/ 3,451 25,917 Tejon Ranch Co./1/ 778 25,907 Alexander's Inc./1/ 245 25,847 Pulitzer Inc. 495 25,790 Ameron International Corp. 780 25,748 Hologic Inc./1/ 1,888 25,733 Stratasys Inc./1/ 603 25,700 First Indiana Corp. 1,389 25,697 Second Bancorp Inc. 943 25,697 Columbia Banking System Inc. 1,457 25,614 CCBT Financial Companies Inc. 1,020 25,602 MRO Software Inc./1/ 1,873 25,566 Computer Network Technology Corp./1/ 2,945 25,563 CB Bancshares Inc. 416 25,480 MRV Communications Inc./1/ 9,056 25,447 OSI Systems Inc./1/ 1,464 25,327 Therasense Inc./1/ 2,024 25,280 Information Holdings Inc./1/ 1,262 25,278 Peregrine Pharmaceuticals Inc./1/ 11,690 25,134 C-COR.net Corp./1/ 3,804 25,106 Wellman Inc. 3,335 25,046 McGrath Rentcorp 896 25,043 Pope & Talbot Inc. 1,656 25,039 Gentiva Health Services Inc./1/ 2,169 24,943 Concurrent Computer Corp./1/ 6,569 24,897 Entrust Inc./1/ 5,058 24,835 Intertan Inc./1/ 2,713 24,824 USB Holding Co. Inc. 1,410 24,750 Capitol Bancorp Ltd. 920 24,610 SPSS Inc./1/ 1,458 24,596 Movado Group Inc. 1,121 24,550 Atwood Oceanics Inc./1/ 1,021 24,494 Red Robin Gourmet Burgers/1/ 962 24,493 TeleTech Holdings Inc./1/ 3,849 24,441 Farmer Brothers Co. 76 24,344 Rainbow Technologies Inc./1/ 2,661 24,322 Harris Interactive Inc./1/ 3,452 24,302 Royal Gold Inc. 1,327 24,284 Renaissance Learning Inc./1/ 1,026 24,214 Flushing Financial Corp. 1,159 24,154 Caraustar Industries Inc./1/ 2,765 24,138 RTI International Metals Inc./1/ 2,288 24,070 J&J Snack Foods Corp./1/ 690 24,012 Urstadt Biddle Properties Inc. Class A 1,778 24,003 Federal Agricultural Mortgage Corp./1/ 888 23,976 American Medical Security Group Inc./1/ 1,180 23,966 Audiovox Corp. Class A/1/ 1,893 23,909 Banner Corp. 1,154 23,888 Wild Oats Markets Inc./1/ 2,173 23,751 Southern Financial Bancorp Inc. 602 23,707 Daktronics Inc./1/ 1,480 23,695 Riggs National Corp. 1,502 23,657 Farmers Capital Bank Corp. 728 23,645 Biopure Corp./1/ 3,648 23,603 Presstek Inc./1/ 3,195 23,576 EPIQ Systems Inc./1/ 1,390 23,574 Casella Waste Systems Inc. Class A/1/ 1,896 23,548 Integrated Electrical Services Inc./1/ 3,409 23,522 MasTec Inc./1/ 2,421 23,484 Asbury Automotive Group Inc./1/ 1,409 23,460 36 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Interpore International/1/ 1,525 $ 23,424 Ixia/1/ 2,165 23,423 Altiris Inc./1/ 891 23,415 St. Francis Capital Corp. 795 23,405 Ameristar Casinos Inc./1/ 934 23,387 Union Bankshares Corp. 769 23,355 NIC Inc./1/ 4,958 23,352 Pericom Semiconductor Corp./1/ 2,334 23,340 TiVo Inc./1/ 3,140 23,267 Fisher Communications Inc./1/ 493 23,245 BioLase Technology Inc./1/ 2,036 23,231 National Western Life Insurance Co. Class A/1/ 169 23,214 World Fuel Services Corp. 827 23,214 Vail Resorts Inc./1/ 1,623 23,209 Central Parking Corp. 1,891 23,165 Sturm Ruger & Co. Inc. 2,243 23,148 Tellium Inc./1/ 16,877 23,121 PRG-Schultz International Inc./1/ 4,052 23,015 Quicksilver Resources Inc./1/ 942 23,013 Skyline Corp. 718 22,990 Northwest Bancorp Inc. 1,249 22,944 Ciphergen Biosystems Inc./1/ 1,854 22,897 Trex Co. Inc./1/ 737 22,884 Cascade Natural Gas Corp. 1,167 22,873 II-VI Inc./1/ 1,143 22,849 Vicor Corp./1/ 2,396 22,834 Network Equipment Technologies Inc./1/ 2,494 22,820 FindWhat.com/1/ 1,319 22,792 Arrow Financial Corp. 876 22,782 infoUSA Inc./1/ 3,031 22,763 SCS Transportation Inc./1/ 1,507 22,756 ActivCard Corp./1/ 2,775 22,755 SY Bancorp Inc. 1,212 22,725 Indevus Pharmaceuticals Inc./1/ 4,244 22,705 AMN Healthcare Services Inc./1/ 1,395 22,655 Friedman's Inc. 1,623 22,641 Regeneration Technologies Inc./1/ 2,494 22,571 Ennis Business Forms Inc. 1,681 22,542 Advanta Corp. Class B 2,093 22,521 Homestore.com Inc./1/ 8,115 22,479 Keynote Systems Inc./1/ 1,928 22,461 Lindsay Manufacturing Co. 1,117 22,452 Seacoast Banking Corp. of Florida 1,289 22,429 Midwest Banc Holdings Inc. 1,005 22,341 Synovis Life Technologies Inc./1/ 912 22,298 Lakeland Bancorp Inc. 1,398 22,291 American Home Mortgage Holdings Inc. 1,268 22,279 Pathmark Stores Inc./1/ 3,191 22,241 BancFirst Corp. 419 22,207 Robbins & Myers Inc. 998 22,196 Discovery Laboratories Inc./1/ 3,066 22,075 First Place Financial Corp. 1,243 22,063 NeoPharm Inc./1/ 1,469 22,035 Sipex Corp./1/ 2,807 22,035 Connecticut Water Service Inc. 816 22,024 Playboy Enterprises Inc. Class B/1/ 1,513 22,014 WCI Communities Inc./1/ 1,334 22,011 Parker Drilling Co./1/ 9,315 21,983 MedQuist Inc./1/ 1,133 21,935 Camden National Corp. 742 21,896 MatrixOne Inc./1/ 4,439 21,884 LSI Industries Inc. 1,549 21,825 CuraGen Corp./1/ 4,337 21,815 First National Corp. 822 21,783 Keystone Automotive Industries Inc./1/ 1,002 21,743 Jill (J.) Group Inc. (The)/1/ 1,888 21,712 MSC.Software Corp./1/ 3,012 21,686 Administaff Inc./1/ 2,439 21,683 Great Southern Bancorp Inc. 556 21,640 Hollis-Eden Pharmaceuticals/1/ 888 21,632 Xicor Inc./1/ 2,326 21,609 Tenneco Automotive Inc./1/ 3,433 21,594 Stoneridge Inc./1/ 1,464 21,535 Baldwin & Lyons Inc. Class B 922 21,529 CIRCOR International Inc. 1,118 21,466 Excel Technology Inc./1/ 854 21,350 Lithia Motors Inc. Class A 1,069 21,348 Kansas City Life Insurance Co. 466 21,343 SCHEDULES OF INVESTMENTS 37 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Cardiac Science Inc./1/ 5,111 $ 21,262 AAR Corp./1/ 2,648 21,237 Steven Madden Ltd./1/ 1,118 21,208 Inverness Medical Innovations Inc./1/ 832 21,133 Brookstone Inc./1/ 1,065 21,119 Forrester Research Inc./1/ 1,473 21,108 Innkeepers USA Trust 2,424 21,089 Buckeye Technologies Inc./1/ 2,318 21,071 Herley Industries Inc./1/ 1,202 21,059 Diversa Corp./1/ 2,715 21,041 PennRock Financial Services Corp. 746 21,037 Rudolph Technologies Inc./1/ 1,088 21,009 West Bancorporation 1,219 20,967 TriPath Imaging Inc./1/ 2,406 20,932 Virginia Financial Group Inc. 695 20,899 Elizabeth Arden Inc./1/ 1,268 20,897 Stamps.com Inc./1/ 3,577 20,818 Cascade Bancorp 1,219 20,723 Standard Commercial Corp. 1,126 20,718 CCC Information Services Group Inc./1/ 1,236 20,715 X-Rite Inc. 1,829 20,704 First Bancorp (North Carolina) 737 20,643 AsiaInfo Holdings Inc./1/ 3,060 20,624 LookSmart Ltd./1/ 6,549 20,564 Vans Inc./1/ 1,886 20,557 InFocus Corp./1/ 4,227 20,543 Learning Tree International Inc./1/ 1,224 20,526 Harvest Natural Resources Inc./1/ 3,336 20,516 MAPICS Inc./1/ 2,088 20,504 AK Steel Holding Corp./1/ 10,167 20,334 William Lyon Homes Inc./1/ 405 20,311 Staar Surgical Co./1/ 1,914 20,308 Kenneth Cole Productions Class A 777 20,287 Silicon Graphics Inc./1/ 21,056 20,214 Middlesex Water Co. 824 20,196 Vital Sign Inc. 689 20,188 Aftermarket Technology Corp./1/ 1,769 20,184 Myers Industries Inc. 2,016 20,180 Schnitzer Steel Industries Inc. Class A 672 20,180 SupportSoft Inc./1/ 1,797 20,108 eCollege.com Inc./1/ 998 20,100 Ditech Communications Corp./1/ 2,288 20,089 Quaker City Bancorp Inc. 501 20,040 InterCept Inc./1/ 1,464 20,013 Conceptus Inc./1/ 1,526 19,991 Calgon Carbon Corp. 3,549 19,981 Great Lakes REIT Inc. 1,255 19,980 Ramco-Gershenson Properties Trust 785 19,978 NBC Capital Corp. 822 19,925 Pilgrim's Pride Corp. Class B 1,592 19,900 Mission West Properties Inc. 1,609 19,887 Republic Bancshares Inc. 695 19,849 PDI Inc./1/ 808 19,812 Seattle Genetics Inc./1/ 3,263 19,806 Building Materials Holdings Corp. 1,511 19,794 CFS Bancorp Inc. 1,421 19,780 Children's Place Retail Stores Inc. (The)/1/ 1,152 19,757 Acadia Realty Trust 1,793 19,687 Input/Output Inc./1/ 5,015 19,609 American Woodmark Corp. 438 19,605 Riviana Foods Inc. 690 19,596 Avatar Holdings/1/ 612 19,572 UniFirst Corp. 827 19,550 Electro Rent Corp./1/ 1,556 19,466 FNB Corp. (Virginia) 716 19,461 Tollgrade Communications Inc./1/ 1,211 19,461 Encore Wire Corp./1/ 1,474 19,457 Brush Engineered Materials Inc./1/ 1,895 19,424 Roxio Inc./1/ 2,240 19,421 United Industrial Corp. 1,221 19,414 Bank of the Ozarks Inc. 436 19,406 OceanFirst Financial Corp. 775 19,398 Supertex Inc./1/ 1,081 19,393 Octel Corp. 1,114 19,384 MTR Gaming Group Inc./1/ 2,229 19,325 Centillium Communications Inc./1/ 2,723 19,252 38 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- RC2 Corp./1/ 999 $ 19,191 Resource America Inc. Class A 1,615 19,186 Penn Engineering & Manufacturing Corp. 1,245 19,185 TriZetto Group Inc. (The)/1/ 2,857 19,142 Maxwell Shoe Co. Inc. Class A/1/ 1,328 19,070 Cascade Corp. 864 19,051 Lydall Inc./1/ 1,586 19,048 PC-Tel Inc./1/ 1,785 19,046 Peapack-Gladstone Financial Corp. 610 18,968 National Presto Industries Inc. 552 18,956 Astec Industries Inc./1/ 1,839 18,942 4Kids Entertainment Inc./1/ 897 18,927 MBT Financial Corp. 1,212 18,907 Encore Acquisition Co./1/ 874 18,835 Stanley Furniture Co. Inc. 617 18,825 Quaker Chemical Corp. 809 18,817 Clark Inc./1/ 1,405 18,743 Citizens Inc./1/ 2,328 18,740 Keithley Instruments Inc. 1,324 18,735 Immunogen Inc./1/ 4,209 18,730 Berkshire Hills Bancorp Inc. 555 18,698 Superconductor Technologies Inc./1/ 4,756 18,691 Proxim Corp. Class A/1/ 12,534 18,676 Macatawa Bank Corp. 806 18,667 Concord Communications Inc./1/ 1,426 18,666 Ryerson Tull Inc. 2,375 18,525 Financial Institutions Inc. 844 18,441 Lexicon Genetics Inc./1/ 3,571 18,426 DOV Pharmaceutical Inc./1/ 1,025 18,399 CT Communications Inc. 1,627 18,385 Salem Communications Corp. Class A/1/ 945 18,324 Great Atlantic & Pacific Tea Co./1/ 2,253 18,272 VitalWorks Inc./1/ 3,475 18,244 America's Car-Mart Inc./1/ 609 18,240 Coachmen Industries Inc. 1,556 18,221 Matria Healthcare Inc./1/ 1,055 18,209 Charles River Associates Inc./1/ 638 18,202 Grace (W.R.) & Co./1/ 5,869 18,194 Bei Technologies Inc. 1,161 18,112 Ocwen Financial Corp./1/ 3,969 18,059 Innovex Inc./1/ 1,814 18,049 HEICO Corp. 1,326 18,034 Theragenics Corp./1/ 3,160 18,012 Nash Finch Co. 1,161 17,996 GulfMark Offshore Inc./1/ 1,280 17,984 West Marine Inc./1/ 944 17,983 Universal Electronics Inc./1/ 1,556 17,894 Curative Health Services Inc./1/ 1,001 17,888 Quixote Corp. 710 17,857 Midland Co. (The) 838 17,849 Woodhead Industries Inc. 1,186 17,849 Bradley Pharmaceuticals Inc./1/ 654 17,821 Gorman-Rupp Co. (The) 787 17,794 deCODE genetics Inc./1/ 3,775 17,780 SuperGen Inc./1/ 2,366 17,769 Cornell Companies Inc./1/ 1,080 17,766 SFBC International Inc./1/ 624 17,742 Bioreliance Corp./1/ 694 17,739 Closure Medical Corp./1/ 724 17,658 German American Bancorp 1,005 17,648 Palatin Technologies Inc./1/ 3,651 17,525 ITLA Capital Corp./1/ 411 17,513 Tweeter Home Entertainment Group Inc./1/ 2,273 17,457 Magna Entertainment Corp. Class A/1/ 4,186 17,414 Genencor International Inc./1/ 1,109 17,400 Alloy Inc./1/ 3,102 17,371 LodgeNet Entertainment Corp./1/ 1,118 17,329 Boston Beer Co. Inc. Class A/1/ 1,085 17,273 Universal Display Corp./1/ 1,655 17,195 American National Bankshares Inc. 685 17,104 Paxson Communications Corp./1/ 3,438 17,052 KVH Industries Inc./1/ 675 17,017 Laserscope/1/ 1,447 17,002 EMS Technologies Inc./1/ 1,000 16,980 Sonic Solutions Inc./1/ 1,217 16,953 SCHEDULES OF INVESTMENTS 39 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Gibraltar Steel Corp. 769 $ 16,949 Navigant International Inc./1/ 1,207 16,910 White Electronic Designs Corp./1/ 1,573 16,910 1-800-FLOWERS.COM Inc./1/ 2,246 16,890 Gladstone Capital Corp. 868 16,883 Dobson Communications Corp. Class A/1/ 2,072 16,825 Blair Corp. 807 16,786 Guilford Pharmaceuticals Inc./1/ 2,708 16,763 Playtex Products Inc./1/ 2,811 16,754 SBS Technologies Inc./1/ 1,544 16,752 Hickory Tech Corp. 1,463 16,751 Commercial Capital Bancorp Inc./1/ 1,071 16,740 World Acceptance Corp./1/ 1,233 16,707 DHB Industries Inc./1/ 3,838 16,695 Hanmi Financial Corp. 837 16,690 Ceradyne Inc./1/ 644 16,660 Ariad Pharmaceuticals Inc./1/ 2,766 16,651 Courier Corp. 327 16,648 Bentley Pharmaceuticals Inc./1/ 1,023 16,624 PrivateBancorp Inc. 502 16,621 Credit Acceptance Corp./1/ 1,464 16,616 Volt Information Sciences Inc./1/ 999 16,484 Meridian Resource Corp. (The)/1/ 3,808 16,412 Lawson Products Inc. 610 16,378 Digimarc Corp./1/ 1,110 16,328 Regent Communications Inc./1/ 2,676 16,324 La Jolla Pharmaceutical Co./1/ 4,126 16,298 First State Bancorp 550 16,285 Stellent Inc./1/ 2,097 16,273 Hypercom Corp./1/ 3,017 16,262 CNA Surety Corp./1/ 1,611 16,191 Citizens First Bancorp Inc. 780 16,146 Integral Systems Inc./1/ 893 16,137 Sequa Corp. Class A/1/ 376 16,097 Epix Medical Inc./1/ 945 16,084 i-STAT Corp./1/ 1,203 16,084 Willow Grove Bancorp Inc. 998 16,058 D&K Healthcare Resources Inc. 1,140 16,028 Boykin Lodging Co. 1,945 16,027 CSS Industries Inc. 622 16,017 Central Coast Bancorp/1/ 945 15,961 Boston Communications Group Inc./1/ 1,593 15,884 Sauer-Danfoss Inc. 1,125 15,863 Santander BanCorp 844 15,842 Metrologic Instruments Inc./1/ 440 15,836 MIM Corp./1/ 2,111 15,832 Sykes Enterprises Inc./1/ 2,391 15,828 Stepan Co. 694 15,809 Energy Conversion Devices Inc./1/ 1,504 15,807 Aspect Medical Systems Inc./1/ 1,539 15,806 Lakeland Financial Corp. 467 15,771 Metris Companies Inc. 3,819 15,734 GSI Commerce Inc./1/ 1,567 15,639 NN Inc. 1,207 15,522 Monro Muffler Brake Inc./1/ 524 15,510 Pumatech Inc./1/ 3,258 15,508 Southwest Bancorp Inc. 920 15,502 Angelica Corp. 815 15,485 Vastera Inc./1/ 2,998 15,410 Coca-Cola Bottling Co. Consolidated 307 15,396 NL Industries Inc. 946 15,391 KCS Energy Inc./1/ 2,258 15,354 Orthologic Corp./1/ 2,850 15,333 Perry Ellis International Inc./1/ 537 15,331 ON Semiconductor Corp./1/ 3,827 15,308 Bassett Furniture Industries Inc. 1,127 15,271 Aether Systems Inc./1/ 3,340 15,264 Pinnacle Entertainment Inc./1/ 2,166 15,162 Trans World Entertainment Corp./1/ 2,683 15,159 Provident Bancorp Inc. 360 15,127 Alliance Semiconductor Corp./1/ 2,778 15,112 P.A.M. Transportation Services Inc./1/ 736 15,103 Nuvelo Inc./1/ 5,746 15,055 JNI Corp./1/ 2,165 15,047 OMNOVA Solutions Inc./1/ 4,275 15,005 Quality Systems Inc./1/ 373 14,995 Semitool Inc./1/ 1,874 14,917 Winston Hotels Inc. 1,633 14,860 40 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Penn-America Group Inc. 990 $ 14,830 Kensey Nash Corp./1/ 631 14,816 Humboldt Bancorp 942 14,780 NYFIX Inc./1/ 2,639 14,778 CyberGuard Corp./1/ 1,549 14,731 Casual Male Retail Group Inc./1/ 1,989 14,699 Apex Mortgage Capital Inc. 2,719 14,628 Horizon Organic Holding Corp./1/ 610 14,603 Stein Mart Inc./1/ 2,669 14,599 ABC Bancorp 935 14,595 Computer Programs & Systems Inc. 807 14,550 State Bancorp Inc. 730 14,542 Republic Bancorp Inc. Class A 764 14,524 Sanderson Farms Inc. 461 14,503 Resource Bankshares Corp. 497 14,483 Dendreon Corp./1/ 1,636 14,479 A.S.V. Inc./1/ 758 14,470 Petroleum Development Corp./1/ 1,207 14,460 Datastream Systems Inc./1/ 1,865 14,454 Aaon Inc./1/ 878 14,417 Monolithic System Technology Inc./1/ 1,713 14,406 Dura Automotive Systems Inc./1/ 1,512 14,394 Wackenhut Corrections Corp./1/ 844 14,390 Sanfilippo (John B.) & Son Inc./1/ 675 14,351 Rent-Way Inc./1/ 2,669 14,333 Peet's Coffee & Tea Inc./1/ 733 14,330 Inet Technologies Inc./1/ 1,107 14,325 CPI Corp. 778 14,315 WatchGuard Technologies Inc./1/ 2,671 14,290 Center Financial Corp./1/ 703 14,278 National Processing Inc./1/ 738 14,258 LTC Properties Inc. 1,230 14,243 Gene Logic Inc./1/ 3,029 14,236 Kana Software Inc./1/ 3,629 14,226 Covenant Transport Inc. Class A/1/ 773 14,223 Hexcel Corp./1/ 2,410 14,219 Progenics Pharmaceuticals Inc./1/ 825 14,207 Advanced Marketing Services Inc. 1,390 14,206 Klamath First Bancorp Inc. 656 14,202 MainSource Financial Group Inc. 548 14,199 Columbia Bancorp 529 14,177 D&E Communications Inc. 997 14,137 LSB Bancshares Inc. 768 14,131 Pomeroy IT Solutions Inc. 1,111 14,110 QAD Inc./1/ 1,286 14,095 Fargo Electronics/1/ 1,118 14,087 Greenbrier Companies Inc./1/ 1,040 14,050 United PanAm Financial Corp./1/ 806 14,032 CardioDynamics International Corp./1/ 3,122 14,018 Royal Bancshares of Pennsylvania Class A 522 14,016 Ethyl Corp./1/ 1,113 14,002 Capstead Mortgage Corp. 1,123 13,959 Joseph A. Bank Clothiers Inc./1/ 317 13,938 Allscripts Healthcare Solutions Inc./1/ 3,416 13,937 TRC Companies Inc./1/ 846 13,925 Overstock.com Inc./1/ 935 13,924 Capital Corporation of the West/1/ 432 13,923 Strattec Security Corp./1/ 292 13,917 KFx Inc./1/ 2,770 13,905 M&F Worldwide Corp./1/ 1,442 13,886 Aspen Technology Inc./1/ 3,554 13,861 Chattem Inc./1/ 998 13,852 USANA Health Sciences Inc./1/ 287 13,848 Central European Distribution Corp./1/ 506 13,839 Price Legacy Corporation/1/ 3,947 13,815 Bone Care International Inc./1/ 1,083 13,776 Cole National Corp./1/ 1,105 13,768 Young Innovations Inc. 430 13,764 Insurance Auto Auctions Inc./1/ 1,223 13,759 Massbank Corp. 374 13,752 Source Interlink Companies Inc./1/ 1,461 13,733 Buckle Inc. (The)/1/ 713 13,732 Healthcare Services Group Inc. 831 13,711 Hooker Furniture Corp. 401 13,654 Footstar Inc./1/ 2,019 13,648 Arena Pharmaceuticals Inc./1/ 1,893 13,630 SCHEDULES OF INVESTMENTS 41 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- EnPro Industries Inc./1/ 1,406 $ 13,568 Pantry Inc. (The)/1/ 1,121 13,553 Exact Sciences Corp./1/ 1,002 13,527 SJW Corp. 160 13,520 First Horizon Pharmaceutical Corp./1/ 2,107 13,485 Option Care Inc./1/ 1,121 13,463 Partners Trust Financial Group Inc. 613 13,455 Coastal Bancorp Inc. 423 13,430 Accredited Home Lenders Holding Co./1/ 614 13,330 Bankrate Inc./1/ 948 13,291 Schawk Inc. 1,114 13,279 Century Aluminum Co./1/ 1,220 13,237 Raven Industries Inc. 534 13,163 Community Bank of Northern Virginia 795 13,157 EverTrust Financial Group Inc. 463 13,140 1-800 CONTACTS INC./1/ 651 13,137 Midas Inc./1/ 998 13,134 Gevity HR Inc. 894 13,124 First Oak Brook Bancshares Class A 527 13,122 Navigators Group Inc./1/ 401 13,117 Applied Signal Technology Inc. 657 13,107 Interpool Inc. 823 13,094 Southwest Water Co. 929 13,071 Lufkin Industries Inc. 542 13,008 Darling International Inc./1/ 4,887 12,951 Pegasystems Inc./1/ 1,773 12,943 EnergySouth Inc. 400 12,912 PennFed Financial Services Inc. 443 12,891 Tier Technologies Inc. Class B/1/ 1,445 12,875 Three-Five Systems Inc./1/ 2,334 12,860 Luminex Corp./1/ 1,903 12,845 Systemax Inc./1/ 1,933 12,835 Yardville National Bancorp 612 12,821 Valence Technology Inc./1/ 3,742 12,760 Quidel Corp./1/ 1,897 12,729 Register.com/1/ 2,822 12,727 Mercantile Bank Corp. 383 12,716 Candela Corp./1/ 996 12,709 Syntel Inc. 556 12,682 Eastern Virginia Bankshares 452 12,633 Research Frontiers Inc./1/ 1,101 12,627 Consolidated-Tomoka Land Co. 433 12,561 TriCo Bancshares 439 12,555 CoBiz Inc. 782 12,535 Western Sierra Bancorp/1/ 350 12,513 NS Group Inc./1/ 1,936 12,507 Bryn Mawr Bank Corp. 297 12,504 Center Bancorp Inc. 778 12,502 Oak Hill Financial Inc. 431 12,495 Nassda Corp./1/ 1,587 12,490 BRT Realty Trust 650 12,402 Citizens South Banking Corp. 837 12,379 Weyco Group Inc. 250 12,373 PICO Holdings Inc./1/ 944 12,338 Sound Federal Bancorp Inc. 823 12,320 SBA Communications Corp./1/ 3,849 12,317 Summit Bancshares Inc. 447 12,293 ParthusCeva Inc./1/ 1,430 12,284 C&F Financial Corp. 271 12,252 State Financial Services Corp. Class A 493 12,217 MutualFirst Financial Inc. 477 12,211 Meridian Bioscience Inc. 1,214 12,164 Associated Estates Realty Corp. 1,865 12,160 Big 5 Sporting Goods Corp./1/ 795 12,148 PetroCorp Inc./1/ 902 12,141 World Wrestling Entertainment Inc. 1,210 12,124 Sun Bancorp Inc. (New Jersey)/1/ 550 12,100 Dril-Quip Inc./1/ 715 12,083 American Land Lease Inc. 654 12,066 Net2Phone Inc./1/ 1,912 12,065 Powell Industries Inc./1/ 718 12,062 PEC Solutions Inc./1/ 816 12,044 FloridaFirst Bancorp Inc. 457 12,024 Greene County Bancshares Inc. 504 12,020 Kosan Biosciences Inc./1/ 1,510 12,020 42 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- FFLC Bancorp Inc. 414 $ 12,018 Virginia Commerce Bancorp Inc./1/ 550 12,001 Department 56 Inc./1/ 944 11,989 SoundView Technology Group Inc./1/ 1,216 11,965 Exactech Inc./1/ 731 11,952 Camco Financial Corp. 703 11,951 Foothill Independent Bancorp 562 11,942 National Healthcare Corp./1/ 836 11,938 Mail-Well Inc./1/ 3,408 11,928 Duratek Inc./1/ 1,337 11,926 Synaptics Inc./1/ 1,104 11,879 United Security Bancshares Inc. 468 11,873 Skechers U.S.A. Inc. Class A/1/ 1,599 11,865 Matrix Service Co./1/ 665 11,810 Triton PCS Holdings Inc. Class A/1/ 2,648 11,810 Coastal Financial Corp. 844 11,806 Ulticom Inc./1/ 1,120 11,794 Patriot Bank Corp. 627 11,788 WESCO International Inc./1/ 2,251 11,773 Nara Bancorp Inc. 686 11,751 GA Financial Inc. 433 11,747 First M&F Corp. 329 11,729 IBT Bancorp Inc. 235 11,729 Taylor Capital Group Inc. 508 11,725 SeeBeyond Technology Corp./1/ 4,577 11,717 Gulf Island Fabrication Inc./1/ 779 11,716 AmericanWest Bancorporation/1/ 638 11,701 Repligen Corp./1/ 2,169 11,691 E-LOAN Inc./1/ 3,220 11,689 Fairchild Corp. (The) Class A/1/ 2,358 11,672 National Bankshares Inc. 272 11,636 Hampshire Group Ltd./1/ 365 11,622 RPC Inc. 1,159 11,590 Gundle/SLT Environmental Inc./1/ 755 11,589 Hudson Highland Group Inc./1/ 602 11,582 United Security Bancshares 459 11,567 BHA Group Inc. 485 11,524 Applica Inc./1/ 1,904 11,519 Shore Bancshares Inc. 333 11,518 Collins & Aikman Corp./1/ 3,398 11,485 CryoLife Inc./1/ 1,864 11,482 SM&A/1/ 995 11,472 Infonet Services Corp. Class B/1/ 5,514 11,469 Mobius Management Systems Inc./1/ 1,430 11,469 Global Power Equipment Group Inc./1/ 2,167 11,420 Pain Therapeutics Inc./1/ 1,853 11,396 Neose Technologies Inc./1/ 1,217 11,379 PAB Bankshares Inc. 838 11,338 ESB Financial Corp. 777 11,313 Ducommun Inc./1/ 691 11,263 U.S. Physical Therapy Inc./1/ 920 11,253 Safety Insurance Group Inc. 725 11,252 Diodes Inc./1/ 546 11,242 Penns Woods Bancorp Inc. 257 11,236 PDF Solutions Inc./1/ 998 11,228 First of Long Island Corp. 297 11,224 Old Point Financial Corp. 358 11,213 Provident Financial Holdings Inc. 373 11,197 Embarcadero Technologies Inc./1/ 1,115 11,195 Tarragon Realty Investors Inc./1/ 732 11,163 First South Bancorp Inc. 346 11,124 Columbia Bancorp (Oregon) 773 11,108 First Albany Companies Inc. 870 11,092 FTD Inc. Class A/1/ 492 11,075 SS&C Technologies Inc. 552 11,034 Micro Therapeutics Inc./1/ 2,085 11,030 Ultimate Electronics Inc./1/ 1,158 10,989 FMS Financial Corp. 656 10,988 Beasley Broadcast Group Inc. Class A/1/ 795 10,987 Steinway Musical Instruments Inc./1/ 618 10,970 McLeodUSA Inc. Class A/1/ 7,875 10,946 Cepheid Inc./1/ 2,343 10,942 Firstbank Corp. 345 10,936 Zymogenetics Inc./1/ 744 10,900 Group 1 Software Inc./1/ 606 10,890 LabOne Inc./1/ 466 10,872 Yadkin Valley Bank & Trust Co. 617 10,859 SCHEDULES OF INVESTMENTS 43 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Enstar Group Inc./1/ 276 $ 10,833 Digital Generation Systems Inc./1/ 4,967 10,823 Heartland Financial USA Inc. 389 10,814 Horizon Financial Corp. 670 10,814 Greater Community Bancorp 684 10,807 Parkvale Financial Corp. 428 10,807 TheStreet.com Inc./1/ 2,383 10,724 American Mortgage Acceptance Corp. 648 10,718 Kirkland's Inc./1/ 667 10,692 CNB Financial Corp. 253 10,689 Heritage Financial Corp. 490 10,672 Ambassadors International Inc. 871 10,670 HealthExtras Inc./1/ 1,237 10,651 Maritrans Inc. 710 10,650 Reading International Inc. Class A/1/ 1,865 10,649 Alico Inc. 380 10,644 First United Corp. 472 10,644 Clayton Williams Energy Inc./1/ 564 10,631 CRIIMI MAE Inc./1/ 1,024 10,629 Sierra Bancorp 690 10,612 iPayment Holdings Inc./1/ 466 10,606 Shenandoah Telecommunications Co. 275 10,601 First Citizens Banc Corp. 400 10,600 Flag Financial Corp. 792 10,589 Whitehall Jewellers Inc./1/ 943 10,571 Chesapeake Utilities Corp. 461 10,566 Bebe Stores Inc./1/ 389 10,542 Sanders Morris Harris Group Inc. 1,188 10,538 Computer Horizons Corp./1/ 2,839 10,504 Commercial Bankshares Inc. 350 10,486 Southside Bancshares Inc. 649 10,481 OPNET Technologies Inc./1/ 839 10,471 Chronimed Inc./1/ 1,146 10,463 FNB Corp. 419 10,454 Cavalry Bancorp Inc. 624 10,452 Vital Images Inc./1/ 558 10,446 MarketWatch.com Inc./1/ 1,249 10,443 IXYS Corp./1/ 1,112 10,419 Chicago Pizza & Brewery Inc./1/ 883 10,375 BancTrust Financial Group Inc. 687 10,374 Wayne Bancorp Inc. 363 10,346 Integrated Defense Technologies Inc./1/ 616 10,336 Century Bancorp Inc. Class A 309 10,333 GB&T Bancshares Inc. 464 10,329 Northern States Financial Corp. 358 10,314 Merchants Bancshares Inc. 364 10,294 Drexler Technology Corp./1/ 734 10,291 Charlotte Russe Holding Inc./1/ 1,000 10,290 Boyds Collection Ltd. (The)/1/ 2,281 10,287 Galyan's Trading Co./1/ 1,006 10,271 Financial Industries Corp. 723 10,267 First Defiance Financial Corp. 440 10,252 Ansoft Corp./1/ 998 10,229 Material Sciences Corp. 1,000 10,220 United Mobile Homes Inc. 678 10,217 Del Laboratories Inc./1/ 361 10,198 Goody's Family Clothing Inc. 1,031 10,166 Convera Corp./1/ 2,336 10,162 Overland Storage Inc./1/ 686 10,119 VIVUS Inc./1/ 2,890 10,115 Raindance Communications Inc./1/ 3,664 10,113 First Federal Financial of Kentucky 329 10,084 Nature's Sunshine Products Inc. 1,214 10,076 MTC Technologies Inc./1/ 434 10,069 Great American Financial Resources Inc. 695 10,064 Gerber Scientific Inc./1/ 1,417 10,061 Security Bank Corp. 340 10,030 Radiant Systems Inc./1/ 1,596 9,991 Avant Immunotherapeutics Inc./1/ 4,134 9,963 Heritage Commerce Corp./1/ 928 9,957 Dover Downs Gaming & Entertainment Inc. 1,209 9,938 ACLARA BioSciences Inc./1/ 2,509 9,936 Medallion Financial Corp. 1,575 9,922 McMoRan Exploration Co./1/ 946 9,914 Sizeler Property Investors Inc. 943 9,883 44 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- LNB Bancorp Inc. 489 $ 9,868 Blue Rhino Corp./1/ 890 9,861 Charter Financial Corp. 319 9,841 TransMontaigne Inc./1/ 1,629 9,709 Warwick Community Bancorp 343 9,662 GTC Biotherapeutics Inc./1/ 3,113 9,650 Wilsons The Leather Experts Inc./1/ 1,207 9,644 Perini Corp./1/ 1,402 9,618 AVI BioPharma Inc./1/ 1,857 9,601 NetScout Systems Inc./1/ 1,920 9,581 Lifeline Systems Inc./1/ 303 9,557 Specialty Laboratories Inc./1/ 731 9,540 Dave & Buster's Inc./1/ 926 9,538 Warwick Valley Telephone Co. 122 9,515 Exchange National Bancshares Inc. 273 9,459 Vitria Technology Inc./1/ 1,866 9,423 Ampco-Pittsburgh Corp. 782 9,376 First Consulting Group Inc./1/ 1,879 9,357 Midway Games Inc./1/ 3,159 9,351 Nelson (Thomas) Inc./1/ 677 9,349 Aphton Corp./1/ 1,658 9,301 IMPAC Medical Systems Inc./1/ 516 9,231 Seabulk International Inc./1/ 1,265 9,222 Bruker BioSciences Corp./1/ 2,090 9,196 Sigma Designs Inc./1/ 1,068 9,174 Medical Action Industries Inc./1/ 704 9,166 Marine Products Corp. 618 9,097 Neoforma Inc./1/ 647 9,090 Seaboard Corp. 42 9,034 Turnstone Systems Inc./1/ 3,147 9,032 SEMCO Energy Inc. 1,945 8,947 Summit America Television Inc./1/ 3,060 8,905 Newtek Business Services Inc./1/ 1,797 8,877 Milacron Inc. 3,859 8,876 Lannett Co. Inc./1/ 506 8,850 InteliData Technologies Corp./1/ 3,742 8,831 BroadVision Inc./1/ 1,797 8,811 Shoe Carnival Inc./1/ 616 8,809 CollaGenex Pharmaceuticals Inc./1/ 820 8,799 Pemstar Inc./1/ 2,462 8,765 SureBeam Corporation Class A/1/ 6,093 8,713 Dominion Homes Inc./1/ 338 8,697 Green Mountain Coffee Roasters Inc./1/ 439 8,697 Interland Inc./1/ 1,126 8,659 Westmoreland Coal Co./1/ 616 8,642 DigitalThink Inc./1/ 3,355 8,622 Redback Networks Inc./1/ 14,001 8,541 Medis Technologies Ltd./1/ 835 8,509 Oneida Financial Corp. 357 8,504 Virage Logic Corp./1/ 1,118 8,497 Technical Olympic USA Inc./1/ 307 8,443 Compucom Systems Inc./1/ 2,005 8,421 Ingles Markets Inc. Class A 857 8,399 Verint Systems Inc./1/ 392 8,389 Petroleum Helicopters Inc./1/ 289 8,381 Cherokee Inc./1/ 394 8,353 Osteotech Inc./1/ 1,015 8,313 Omega Protein Corp./1/ 1,263 8,273 iGATE Corp./1/ 1,399 8,254 Coldwater Creek Inc./1/ 836 8,210 TradeStation Group Inc./1/ 1,097 8,197 Cantel Medical Corp./1/ 613 8,177 Franklin Financial Corp. 264 8,160 Crawford & Co. Class B 1,155 8,108 NASB Financial Inc. 242 8,085 Manufacturers Services Ltd./1/ 1,614 8,070 National Health Realty Inc. 529 7,998 Princeton Review Inc. (The)/1/ 1,243 7,992 Mothers Work Inc./1/ 263 7,982 MarineMax Inc./1/ 550 7,980 Rex Stores Corp./1/ 609 7,947 Martha Stewart Living Omnimedia Inc. Class A/1/ 855 7,909 Standard Motor Products Inc. 778 7,858 Value Line Inc. 163 7,824 RCN Corp./1/ 4,247 7,814 SAFLINK Corp./1/ 1,694 7,792 Westfield Financial Inc. 349 7,790 Dynacq International Inc./1/ 427 7,724 Deb Shops Inc. 419 7,689 SCHEDULES OF INVESTMENTS 45 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Maui Land & Pineapple Co. Inc./1/ 297 $ 7,680 Arden Group Inc. Class A 124 7,626 MAIR Holdings Inc./1/ 1,109 7,530 Smart & Final Inc./1/ 1,202 7,513 Retractable Technologies Inc./1/ 1,224 7,479 Drew Industries Inc./1/ 402 7,441 Richardson Electronics Ltd. 700 7,420 Restoration Hardware Inc./1/ 1,272 7,390 Liquidmetal Technologies/1/ 2,325 7,324 Plug Power Inc./1/ 1,420 7,314 Aceto Corp. 522 7,308 Sun Bancorp Inc. (Pennsylvania) 394 7,297 Alamo Group Inc. 511 7,287 Guess ? Inc./1/ 818 7,280 NetRatings Inc./1/ 777 7,252 Dover Motorsports Inc. 1,893 7,118 Omega Healthcare Investors Inc./1/ 908 6,973 Novoste Corp./1/ 1,569 6,919 Ambassadors Group Inc./1/ 405 6,889 Digitas Inc./1/ 945 6,861 PC Connection Inc./1/ 729 6,853 Party City Corp./1/ 552 6,834 Star Scientific Inc./1/ 3,753 6,830 Sirna Therapeutics Inc./1/ 1,185 6,778 Metro One Telecommunications Inc./1/ 1,941 6,755 Durect Corp./1/ 2,002 6,727 Synplicity Inc./1/ 1,135 6,697 Third Wave Technologies Inc./1/ 2,057 6,644 APAC Customer Services Inc./1/ 2,649 6,622 Hi-Tech Pharmacal Co./1/ 281 6,595 Hungarian Telephone and Cable Corp./1/ 712 6,586 Horizon Offshore Inc./1/ 1,597 6,564 Cholestech Corp./1/ 848 6,445 Modtech Holdings Inc./1/ 805 6,392 Finlay Enterprises Inc./1/ 431 6,262 Cerus Corp./1/ 1,330 6,158 Inter Parfums Inc. 614 6,140 NYMAGIC Inc. 270 6,056 DJ Orthopedics Inc./1/ 428 5,971 National Beverage Corp./1/ 388 5,859 Catapult Communications Corp./1/ 458 5,762 Acme Communications Inc./1/ 763 5,761 North Coast Energy Inc./1/ 456 5,695 Sanchez Computer Associates Inc./1/ 1,475 5,664 Emerson Radio Corp./1/ 1,506 5,647 Pegasus Communications Corp./1/ 378 5,625 Mestek Inc./1/ 330 5,547 Crown Media Holdings Inc./1/ 671 5,489 Centennial Communications Corp./1/ 1,080 5,486 Sypris Solutions Inc. 396 5,437 EMC Insurance Group Inc. 294 5,192 Medical Staffing Network Holdings Inc./1/ 669 5,058 Clean Harbors Inc./1/ 1,139 4,841 Oneida Ltd. 1,556 4,792 Atari Inc./1/ 1,142 4,671 American Realty Investors Inc./1/ 444 4,458 Virbac Corp./1/ 610 4,423 Carmike Cinemas Inc./1/ 168 4,420 Noland Co. 126 4,271 Pacific Union Bank 226 4,192 Transcontinental Realty Investments Inc./1/ 355 4,185 Orleans Homebuilders Inc./1/ 353 4,172 Alteon Inc./1/ 2,185 4,151 Blount International Inc./1/ 861 4,141 U.S. Xpress Enterprises Inc. Class A/1/ 328 4,018 General Binding Corp./1/ 377 3,921 Independence Holding Co. 169 3,676 ICT Group Inc./1/ 326 3,491 Handspring Inc./1/ 2,943 3,326 Nuance Communications Inc./1/ 562 3,254 Optical Communication Products Inc./1/ 1,308 3,087 Alliance Imaging Inc./1/ 894 3,075 SimpleTech Inc./1/ 428 3,064 Donegal Group Inc. Class A 172 2,597 46 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SHARES SECURITY OR PRINCIPAL VALUE ---------------------------------------------------------------------------- United Capital Corp. 142 $ 2,556 Revlon Inc. Class A/1/ 818 2,176 Raytech Corp./1/ 472 1,657 Sports Resorts International Inc./1/ 303 1,539 McLeodUSA Inc. Class A Escrow/2/ 61,151 - TOTAL COMMON STOCKS (COST: $1,250,795,546) 1,094,262,284 SHORT TERM INVESTMENTS - 5.62% MONEY MARKET FUNDS - 3.39% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares/3/,/4/ 24,943,601 24,943,601 Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares/3/,/4/ 8,927,605 8,927,605 BlackRock Temp Cash Money Market Fund/3/ 396,582 396,582 Short Term Investment Co. - Liquid Assets Money Market Portfolio/3/ 2,104,897 2,104,897 Short Term Investment Co. - Prime Money Market Portfolio, Institutional Shares/3/ 811,600 811,600 37,184,285 FLOATING RATE NOTES - 1.29% Beta Finance Inc. 1.08%, 05/20/04/3/ $ 405,800 405,762 1.08%, 09/15/04/3/ 811,600 811,523 1.17%, 08/23/04/3/ 405,800 406,112 CC USA Inc. 1.06%, 05/24/04/3/ 811,600 811,548 1.08%, 04/19/04/3/ 357,104 357,094 1.12%, 07/15/04/3/ 405,800 405,915 Dorada Finance Inc. 1.08%, 05/20/04/3/ 811,600 811,523 1.24%, 08/09/04/3/ 202,900 202,874 Five Finance Inc. 1.09%, 04/15/04/3/ 405,800 405,800 SECURITY PRINCIPAL VALUE ---------------------------------------------------------------------------- HBOS Treasury Services PLC 1.13%, 06/24/08/3/ $ 811,600 $ 811,600 Holmes Financing PLC 1.08%, 04/15/04/3/ 162,320 162,320 K2 USA LLC 1.08%, 08/16/04/3/ 202,900 202,874 1.08%, 09/27/04/3/ 876,528 876,399 1.09%, 04/13/04/3/ 405,800 405,790 1.09%, 05/17/04/3/ 405,800 405,788 Links Finance LLC 1.05%, 07/20/04/3/ 324,640 324,588 1.08%, 05/04/04/3/ 405,800 405,788 1.08%, 06/28/04/3/ 405,800 405,740 1.09%, 03/29/04/3/ 405,800 405,800 Nationwide Building Society 1.08%, 07/23/04/3/ 608,700 608,700 Sigma Finance Inc. 1.05%, 07/20/04/3/ 405,800 405,735 1.07%, 10/15/03/3/ 811,600 811,597 1.07%, 07/01/04/3/ 405,800 405,724 1.24%, 08/06/04/3/ 202,900 202,883 Tango Finance Corp. 1.05%, 07/15/04/3/ 243,480 243,417 1.06%, 07/06/04/3/ 243,480 243,461 WhistleJacket Capital LLC 1.08%, 09/15/04/3/ 405,800 405,723 White Pine Finance LLC 1.08%, 05/17/04/3/ 486,960 486,960 1.08%, 07/06/04/3/ 486,960 486,925 1.08%, 08/26/04/3/ 405,800 405,744 1.09%, 04/20/04/3/ 405,800 405,800 14,137,507 COMMERCIAL PAPER - 0.67% Amsterdam Funding Corp. 1.06%, 10/16/03/3/ 385,510 385,341 Blue Ridge Asset Funding Corp. 1.05%, 10/17/03/3/ 405,800 405,611 Edison Asset Securitization 1.07%, 10/23/03/3/ 762,904 762,406 SCHEDULES OF INVESTMENTS 47 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE ---------------------------------------------------------------------------- Gemini Securitization Corp. 1.05%, 10/17/03/3/ $ 284,060 $ 283,928 Greenwich Funding Corp. 1.06%, 10/16/03/3/ 478,844 478,633 Jupiter Securitization Corp. 1.05%, 10/20/03/3/ 405,800 405,575 New Center Asset Trust 1.06%, 10/22/03/3/ 405,800 405,549 Park Avenue Receivables Corp. 1.05%, 10/20/03/3/ 406,800 405,575 Preferred Receivables Funding Corp. 1.06%, 10/08/03/3/ 405,800 405,717 Receivables Capital Corp. 1.05%, 10/15/03/3/ 272,763 272,651 Sydney Capital Corp. 1.07%, 10/17/03/3/ 328,698 328,542 UBS Finance (Delaware) Inc. 1.03%, 10/08/03/3/ 811,600 811,438 1.05%, 10/15/03/3/ 405,800 405,635 1.11%, 10/01/03/3/ 1,623,201 1,623,201 7,379,802 TIME DEPOSITS - 0.21% Abbey National Treasury Services PLC 1.15%, 10/01/03/3/ 405,800 405,800 Canadian Imperial Bank of Commerce 1.06%, 10/08/03/3/ 202,900 202,900 1.08%, 10/30/03/3/ 324,640 324,640 1.37%, 08/26/04/3/ 811,600 811,600 Toronto-Dominion Bank 1.33%, 08/23/04/3/ 527,540 527,303 2,272,243 REPURCHASE AGREEMENTS - 0.06% Lehman Brothers Inc. 1.10%, 10/01/03/3/ 649,280 649,280 649,280 TOTAL SHORT TERM INVESTMENTS (COST: $61,623,117) 61,623,117 TOTAL INVESTMENTS IN SECURITIES - 105.54% (COST $1,312,418,663) 1,155,885,401 OTHER ASSETS, LESS LIABILITIES - (5.54%) (60,718,708) --------------- NET ASSETS - 100.00% $ 1,095,166,693 =============== /1/ Non-income earning securities. /2/ Security valued at fair value in accordance with procedures approved by the Board of Trustees. See Note 1. /3/ All or a portion of this security represents investments of securities lending collateral. /4/ Issuer is an affiliate of the Fund's investment advisor. See Note 2. SEE NOTES TO FINANCIAL STATEMENTS. 48 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- COMMON STOCKS - 99.93% General Electric Co. 129,612 $ 3,863,734 Microsoft Corp. 115,976 3,222,973 Pfizer Inc. 102,375 3,110,153 Intel Corp. 84,752 2,331,528 Wal-Mart Stores Inc. 34,474 1,925,373 Johnson & Johnson 38,508 1,906,916 Cisco Systems Inc./1/ 91,050 1,779,117 Amgen Inc./1/ 16,731 1,080,321 Coca-Cola Co. (The) 23,717 1,018,882 Procter & Gamble Co. 10,737 996,608 Dell Inc./1/ 29,558 986,942 Home Depot Inc. 29,763 947,952 International Business Machines Corp. 10,486 926,228 PepsiCo Inc. 19,758 905,509 Fannie Mae 12,714 892,523 American International Group Inc. 15,195 876,751 Abbott Laboratories 20,262 862,148 Lilly (Eli) & Co. 12,530 744,282 Medtronic Inc. 15,833 742,884 Wyeth 15,208 701,089 Merck & Co. Inc. 12,870 651,479 3M Co. 8,994 621,216 Oracle Corp./1/ 50,145 562,627 Anheuser-Busch Companies Inc. 10,838 534,747 Texas Instruments Inc. 22,445 511,746 Lowe's Companies Inc. 9,838 510,592 American Express Co. 11,108 500,526 Target Corp. 11,819 444,749 QUALCOMM Inc. 10,259 427,185 United Parcel Service Inc. Class B 6,668 425,418 Walgreen Co. 13,302 407,573 Applied Materials Inc./1/ 21,489 389,810 First Data Corp. 9,677 386,693 Comcast Corp. Class A/1/ 12,173 375,902 Fifth Third Bancorp 6,517 361,498 UnitedHealth Group Inc. 7,183 361,449 EMC Corp./1/ 28,436 359,147 Colgate-Palmolive Co. 6,209 347,021 Cardinal Health Inc. 5,776 337,261 Marsh & McLennan Companies Inc. 6,926 329,747 Bristol-Myers Squibb Co. 12,560 322,290 Viacom Inc. Class B 7,913 303,068 Boeing Co. (The) 8,491 291,496 eBay Inc./1/ 5,418 289,917 Sysco Corp. 8,396 274,633 Altria Group Inc. 6,152 269,458 Boston Scientific Corp./1/ 4,174 266,301 Gillette Co. (The) 8,185 261,756 Automatic Data Processing Inc. 7,292 261,418 MBNA Corp. 10,316 235,205 Yahoo! Inc./1/ 6,437 227,741 Forest Laboratories Inc./1/ 4,410 226,894 Baxter International Inc. 7,729 224,605 Genentech Inc./1/ 2,655 212,772 Nextel Communications Inc. Class A/1/ 10,569 208,104 SLM Corp. 5,323 207,384 Kohls Corp./1/ 3,699 197,896 Harley-Davidson Inc. 3,934 189,619 Guidant Corp. 4,022 188,431 United Technologies Corp. 2,416 186,708 HCA Inc. 5,009 184,632 Analog Devices Inc./1/ 4,753 180,709 Omnicom Group Inc. 2,452 176,176 Progressive Corp. (The) 2,519 174,088 Veritas Software Corp./1/ 5,352 168,053 Maxim Integrated Products Inc. 4,226 166,927 Schwab (Charles) Corp. (The) 13,621 162,226 Best Buy Co. Inc./1/ 3,397 161,425 Staples Inc./1/ 6,189 146,989 Bed Bath & Beyond Inc./1/ 3,843 146,726 Starbucks Corp./1/ 5,087 146,506 Motorola Inc. 12,203 146,070 Paychex Inc. 4,295 145,729 Gap Inc. (The) 8,491 145,366 Linear Technology Corp. 4,036 144,529 Gilead Sciences Inc./1/ 2,581 144,355 Illinois Tool Works Inc. 2,163 143,320 Zimmer Holdings Inc./1/ 2,560 141,056 WellPoint Health Networks Inc./1/ 1,794 138,268 SCHEDULES OF INVESTMENTS 49 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Amazon.com Inc./1/ 2,835 $ 137,101 AFLAC Inc. 4,203 135,757 Stryker Corp. 1,799 135,483 Walt Disney Co. (The) 6,665 134,433 McGraw-Hill Companies Inc. (The) 2,155 133,890 Electronic Arts Inc./1/ 1,448 133,549 Allergan Inc. 1,680 132,266 Nike Inc. Class B 2,116 128,695 TJX Companies Inc. 6,620 128,560 InterActiveCorp/1/ 3,858 127,507 KLA-Tencor Corp./1/ 2,480 127,472 St. Jude Medical Inc./1/ 2,342 125,929 Xilinx Inc./1/ 4,398 125,387 International Game Technology Inc. 4,452 125,324 Halliburton Co. 5,110 123,917 Computer Associates International Inc. 4,669 121,908 Symantec Corp./1/ 1,928 121,503 Clear Channel Communications Inc. 3,145 120,454 Adobe Systems Inc. 2,985 117,191 Liberty Media Corp. Class A/1/ 11,727 116,918 General Mills Inc. 2,448 115,227 Genzyme Corp. - General Division/1/ 2,477 114,561 Southwest Airlines Co. 6,464 114,413 Intuit Inc./1/ 2,368 114,232 Newmont Mining Corp. 2,900 113,361 EchoStar Communications Corp./1/ 2,930 112,131 Biomet Inc. 3,321 111,619 Yum! Brands Inc./1/ 3,768 111,608 Waste Management Inc. 4,218 110,385 Apollo Group Inc. Class A/1/ 1,659 109,544 MedImmune Inc./1/ 3,284 108,405 Mattel Inc. 5,664 107,389 Freddie Mac 2,042 106,899 AT&T Wireless Services Inc./1/ 12,899 105,514 Capital One Financial Corp. 1,837 104,782 Kimberly-Clark Corp. 1,992 102,229 Danaher Corp. 1,381 102,001 Block (H & R) Inc. 2,306 99,504 Baker Hughes Inc. 3,340 98,831 Wrigley (William Jr.) Co. 1,734 95,890 Lexmark International Inc./1/ 1,516 95,523 FedEx Corp. 1,474 94,970 Becton, Dickinson & Co. 2,604 94,056 Altera Corp./1/ 4,953 93,612 Mylan Laboratories Inc. 2,366 91,446 SunGard Data Systems Inc./1/ 3,391 89,217 Synovus Financial Corp. 3,554 88,814 Moody's Corp. 1,600 87,952 Concord EFS Inc./1/ 6,261 85,588 Fiserv Inc./1/ 2,347 85,032 Corning Inc./1/ 8,950 84,309 Network Appliance Inc./1/ 3,954 81,176 General Motors Corp. Class H/1/ 5,641 80,723 Pitney Bowes Inc. 2,059 78,901 AutoZone Inc./1/ 871 77,981 Caremark Rx Inc./1/ 3,417 77,224 Family Dollar Stores Inc. 1,929 76,948 Sara Lee Corp. 4,084 74,982 Dollar General Corp. 3,736 74,720 Broadcom Corp. Class A/1/ 2,780 74,004 Biogen Inc./1/ 1,916 73,249 Mellon Financial Corp. 2,387 71,944 Costco Wholesale Corp./1/ 2,246 69,806 McKesson Corp. 2,012 66,979 Health Management Associates Inc. Class A 3,058 66,695 ITT Industries Inc. 1,108 66,303 American Standard Companies Inc./1/ 785 66,136 National Semiconductor Corp./1/ 2,037 65,775 IMS Health Inc. 3,113 65,684 Wells Fargo & Company 1,268 65,302 BJ Services Co./1/ 1,904 65,060 Coach Inc./1/ 1,190 64,974 Heinz (H.J.) Co. 1,879 64,412 Juniper Networks Inc./1/ 4,278 63,828 Microchip Technology Inc. 2,662 63,728 Marriott International Inc. Class A 1,470 63,254 JDS Uniphase Corp./1/ 17,329 62,384 Affiliated Computer Services Inc. Class A/1/ 1,277 62,177 Avery Dennison Corp. 1,229 62,089 50 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- EOG Resources Inc. 1,470 $ 61,358 RadioShack Corp. 2,158 61,309 Ecolab Inc. 2,427 61,282 Agere Systems Inc. Class B/1/ 20,947 60,537 Chiron Corp./1/ 1,145 59,185 Sprint Corp. (PCS Group)/1/ 10,244 58,698 Anadarko Petroleum Corp. 1,402 58,548 BEA Systems Inc./1/ 4,842 58,346 Cintas Corp. 1,580 58,207 Morgan Stanley 1,153 58,180 Univision Communications Inc. Class A/1/ 1,820 58,129 QLogic Corp./1/ 1,229 57,775 Freeport-McMoRan Copper & Gold Inc. 1,734 57,395 Career Education Corp./1/ 1,263 57,214 Quest Diagnostics Inc./1/ 933 56,577 Cendant Corp./1/ 2,986 55,808 Du Pont (E.I.) de Nemours and Co. 1,379 55,174 Lockheed Martin Corp. 1,193 55,057 Synopsys Inc./1/ 1,764 54,278 Tiffany & Co. 1,430 53,382 IDEC Pharmaceuticals Corp./1/ 1,602 53,106 Kinder Morgan Inc. 983 53,092 Novellus Systems Inc./1/ 1,562 52,717 Sealed Air Corp./1/ 1,107 52,284 Clorox Co. 1,134 52,017 New York Times Co. Class A 1,191 51,761 Kellogg Co. 1,546 51,559 Legg Mason Inc. 704 50,829 Applera Corp. - Applied Biosystems Group 2,262 50,465 Varian Medical Systems Inc./1/ 874 50,238 Laboratory Corp. of America Holdings/1/ 1,746 50,110 Anthem Inc./1/ 696 49,646 SanDisk Corp./1/ 774 49,335 Dollar Tree Stores Inc./1/ 1,471 49,278 Newell Rubbermaid Inc. 2,262 49,018 Express Scripts Inc./1/ 792 48,431 Masco Corp. 1,974 48,324 Citrix Systems Inc./1/ 2,174 48,002 Bank of New York Co. Inc. (The) 1,618 47,100 Hershey Foods Corp. 647 47,024 DENTSPLY International Inc. 1,035 46,409 Celgene Corp./1/ 1,067 46,233 Jabil Circuit Inc./1/ 1,769 46,082 Patterson Dental Co./1/ 797 45,891 Emerson Electric Co. 871 45,858 Ross Stores Inc. 984 45,618 Oxford Health Plans Inc./1/ 1,095 45,234 Expeditors International Washington Inc. 1,282 44,114 Waters Corp./1/ 1,607 44,080 Teradyne Inc./1/ 2,359 43,877 Aetna Inc. 718 43,820 CDW Corp. 755 43,594 JetBlue Airways Corp./1/ 711 43,350 CarMax Inc./1/ 1,317 43,013 Lincare Holdings Inc./1/ 1,170 42,880 Molex Inc. 1,498 42,828 Brinker International Inc./1/ 1,276 42,567 Mercury Interactive Corp./1/ 937 42,549 Bard (C.R.) Inc. 596 42,316 Micron Technology Inc./1/ 3,132 42,031 AdvancePCS/1/ 912 41,560 Estee Lauder Companies Inc. Class A 1,215 41,431 Barr Laboratories Inc./1/ 607 41,403 PETsMART Inc./1/ 1,790 40,633 Black & Decker Corp. 996 40,388 Medco Health Solutions Inc./1/ 1,552 40,243 AmerisourceBergen Corp. 739 39,943 AES Corp. (The)/1/ 5,321 39,482 Dun & Bradstreet Corp./1/ 949 39,421 Unisys Corp./1/ 2,886 39,048 Praxair Inc. 629 38,967 T. Rowe Price Group Inc. 939 38,743 New York Community Bancorp Inc. 1,226 38,631 Dow Chemical Co. (The) 1,177 38,300 BMC Software Inc./1/ 2,706 37,695 Pepsi Bottling Group Inc. 1,811 37,270 Harrah's Entertainment Inc. 874 36,804 SCHEDULES OF INVESTMENTS 51 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Beckman Coulter Inc. 806 $ 36,705 Robert Half International Inc./1/ 1,868 36,426 Lam Research Corp./1/ 1,635 36,215 Whole Foods Market Inc./1/ 645 35,591 ChoicePoint Inc./1/ 1,049 35,141 Chico's FAS Inc./1/ 1,142 34,991 Scripps (E.W.) Co. Class A 407 34,636 CH Robinson Worldwide Inc. 928 34,531 Doral Financial Corp. 732 34,404 DST Systems Inc./1/ 914 34,366 Hilton Hotels Corp. 2,113 34,273 NVR Inc./1/ 73 34,055 IVAX Corp./1/ 1,733 33,967 Westwood One Inc./1/ 1,125 33,964 Campbell Soup Co. 1,278 33,867 Gallagher (Arthur J.) & Co. 1,190 33,653 Gentex Corp./1/ 964 33,586 Abercrombie & Fitch Co. Class A/1/ 1,211 33,557 Darden Restaurants Inc. 1,748 33,212 Corinthian Colleges Inc./1/ 581 33,210 Ball Corp. 614 33,156 Amylin Pharmaceuticals Inc./1/ 1,173 33,126 Commerce Bancorp Inc. 684 32,770 Ameritrade Holding Corp./1/ 2,911 32,749 McCormick & Co. Inc. 1,194 32,739 Fair Isaac Corp. 554 32,664 Equifax Inc. 1,451 32,314 Western Digital Corp./1/ 2,506 32,302 Harman International Industries Inc. 325 31,964 NVIDIA Corp./1/ 1,977 31,456 Monster Worldwide Inc./1/ 1,236 31,122 Krispy Kreme Doughnuts Inc./1/ 808 31,108 Mid Atlantic Medical Services Inc./1/ 601 30,909 Smith International Inc./1/ 857 30,835 Cephalon Inc./1/ 670 30,766 Symbol Technologies Inc. 2,569 30,700 Eaton Vance Corp. 916 30,668 Coventry Health Care Inc./1/ 581 30,642 Avon Products Inc. 468 30,214 SEI Investment Co. 929 30,193 Cognizant Technology Solutions Corp./1/ 824 30,051 Fastenal Co. 794 30,013 First Health Group Corp./1/ 1,138 29,759 PMC-Sierra Inc./1/ 2,245 29,614 Iron Mountain Inc./1/ 822 29,510 WebMD Corp./1/ 3,297 29,409 PeopleSoft Inc./1/ 1,615 29,377 Foundry Networks Inc./1/ 1,362 29,297 Siebel Systems Inc./1/ 2,990 29,063 UTStarcom Inc./1/ 908 28,883 Rockwell Collins Inc. 1,143 28,861 Patterson-UTI Energy Inc./1/ 1,061 28,721 Sepracor Inc./1/ 1,041 28,669 Williams-Sonoma Inc./1/ 1,061 28,626 Pharmaceutical Resources Inc./1/ 418 28,516 Fox Entertainment Group Inc. Class A/1/ 1,007 28,186 Michaels Stores Inc. 691 28,165 Universal Health Services Inc. Class B/1/ 566 27,989 Health Net Inc./1/ 877 27,775 Sanmina-SCI Corp./1/ 2,843 27,577 Manpower Inc. 733 27,194 Cox Communications Inc. Class A/1/ 842 26,624 GTECH Holdings Corp. 620 26,567 Millipore Corp./1/ 576 26,531 ITT Educational Services Inc./1/ 551 26,404 Pall Corp. 1,169 26,232 VeriSign Inc./1/ 1,938 26,105 Dow Jones & Co. Inc. 551 26,090 Investors Financial Services Corp. 830 26,062 Federated Investors Inc. Class B 940 26,038 TCF Financial Corp. 542 25,989 Millennium Pharmaceuticals Inc./1/ 1,683 25,901 Cooper Cameron Corp./1/ 553 25,554 XTO Energy Inc. 1,217 25,545 Solectron Corp./1/ 4,363 25,524 Neuberger Berman Inc. 605 25,331 Zebra Technologies Corp. Class A/1/ 490 25,269 ImClone Systems Inc./1/ 646 25,013 52 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Jacobs Engineering Group Inc./1/ 554 $ 24,985 Maytag Corp. 994 24,820 Rent-A-Center Inc./1/ 762 24,613 Integrated Circuit Systems Inc./1/ 813 24,423 Education Management Corp./1/ 421 24,279 Network Associates Inc./1/ 1,758 24,190 Donaldson Co. Inc. 445 23,985 DaVita Inc./1/ 742 23,618 Waddell & Reed Financial Inc. Class A 990 23,334 Reynolds & Reynolds Co. (The) Class A 844 23,252 Overture Services Inc./1/ 861 22,808 Lamar Advertising Co./1/ 768 22,533 Applebee's International Inc. 715 22,508 Corporate Executive Board Co. (The)/1/ 476 22,348 Pactiv Corp./1/ 1,100 22,308 Outback Steakhouse Inc. 589 22,305 ARAMARK Corp. Class B/1/ 885 22,152 Weight Watchers International Inc./1/ 532 22,131 Advance Auto Parts Inc./1/ 308 21,837 Phelps Dodge Corp./1/ 466 21,809 Certegy Inc. 679 21,803 RF Micro Devices Inc./1/ 2,337 21,711 Graco Inc. 571 21,441 Omnicare Inc. 591 21,311 SICOR Inc./1/ 1,101 21,227 Cheesecake Factory (The)/1/ 586 21,196 Rite Aid Corp./1/ 4,087 21,089 Starwood Hotels & Resorts Worldwide Inc. 606 21,089 Centex Corp. 270 21,028 Sigma-Aldrich Corp. 404 20,984 Cytyc Corp./1/ 1,392 20,936 Edwards Lifesciences Corp./1/ 770 20,852 Leggett & Platt Inc. 959 20,743 Herman Miller Inc. 910 20,721 Entercom Communications Corp./1/ 462 20,707 Chesapeake Energy Corp. 1,920 20,698 Macromedia Inc./1/ 836 20,683 Conexant Systems Inc./1/ 3,652 20,670 E*TRADE Group Inc./1/ 2,223 20,585 L-3 Communications Holdings Inc./1/ 475 20,544 Titan Corp. (The)/1/ 980 20,423 Brown & Brown Inc. 663 20,407 Avid Technology Inc./1/ 384 20,291 Fisher Scientific International Inc./1/ 511 20,282 Apria Healthcare Group Inc./1/ 739 20,234 Polaris Industries Inc. 272 20,169 Medicis Pharmaceutical Corp. Class A 344 20,158 Pixar Inc./1/ 301 20,035 North Fork Bancorp Inc. 571 19,842 State Street Corp. 440 19,800 Stericycle Inc./1/ 419 19,764 ResMed Inc./1/ 447 19,659 Popular Inc. 489 19,462 CIENA Corp./1/ 3,276 19,361 Steris Corp./1/ 840 19,337 International Flavors & Fragrances Inc. 584 19,319 Tribune Co. 420 19,278 Emulex Corp./1/ 738 18,797 Henry Schein Inc./1/ 331 18,768 Charles River Laboratories International Inc./1/ 607 18,629 Ruby Tuesday Inc. 757 18,251 Pacific Sunwear of California Inc./1/ 882 18,222 ENSCO International Inc. 679 18,211 Rambus Inc./1/ 1,083 18,173 Accredo Health Inc./1/ 648 18,138 Respironics Inc./1/ 434 18,133 Intersil Corp. Class A/1/ 761 18,112 Alliant Techsystems Inc./1/ 376 18,067 Cymer Inc./1/ 437 18,004 Vitesse Semiconductor Corp./1/ 2,798 17,907 Covance Inc./1/ 796 17,814 INAMED Corp./1/ 242 17,775 Affiliated Managers Group Inc./1/ 283 17,772 Amkor Technology Inc./1/ 1,236 17,564 BISYS Group Inc. (The)/1/ 1,329 17,476 Providian Financial Corp./1/ 1,480 17,449 SCHEDULES OF INVESTMENTS 53 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- UCBH Holdings Inc. 575 $ 17,382 Fred's Inc. 526 17,337 Red Hat Inc./1/ 1,712 17,291 IDEXX Laboratories Inc./1/ 405 17,208 DeVry Inc./1/ 727 17,201 Pier 1 Imports Inc. 881 16,950 Sonus Networks Inc./1/ 2,435 16,875 Cree Inc./1/ 911 16,872 Dover Corp. 477 16,871 TECHNE Corp./1/ 528 16,785 National Instruments Corp. 417 16,784 Dial Corp. (The) 777 16,737 Affymetrix Inc./1/ 795 16,687 Xerox Corp./1/ 1,614 16,560 Ceridian Corp./1/ 888 16,535 Advanced Micro Devices Inc./1/ 1,480 16,443 Take-Two Interactive Software Inc./1/ 478 16,333 MGI Pharma Inc./1/ 416 16,332 NBTY Inc./1/ 698 16,298 LSI Logic Corp./1/ 1,798 16,164 Mettler Toledo International Inc./1/ 449 16,142 Silicon Laboratories Inc./1/ 356 16,002 Cooper Companies Inc. 392 15,974 Cablevision Systems Corp./1/ 879 15,910 Gen-Probe Inc./1/ 293 15,872 Cypress Semiconductor Corp./1/ 896 15,841 Autoliv Inc. 523 15,779 OSI Pharmaceuticals Inc./1/ 482 15,651 McDATA Corp. Class A/1/ 1,304 15,609 FMC Technologies Inc./1/ 727 15,572 Wiley (John) & Sons Inc. Class A 599 15,568 99 Cents Only Stores/1/ 481 15,556 Performance Food Group Co./1/ 382 15,551 Pharmaceutical Product Development Inc./1/ 647 15,522 Sybase Inc./1/ 911 15,496 CACI International Inc. Class A/1/ 361 15,469 P.F. Chang's China Bistro Inc./1/ 341 15,464 PETCO Animal Supplies Inc./1/ 494 15,413 Panera Bread Co. Class A/1/ 376 15,401 Henry (Jack) & Associates Inc. 875 15,216 Getty Images Inc./1/ 431 15,154 Claire's Stores Inc. 451 15,090 NetScreen Technologies Inc./1/ 673 14,961 Station Casinos Inc. 487 14,902 Medicines Co. (The)/1/ 573 14,898 Oshkosh Truck Corp. 376 14,893 ADTRAN Inc. 243 14,867 Comverse Technology Inc./1/ 990 14,810 Rowan Companies Inc./1/ 602 14,797 Tenet Healthcare Corp./1/ 1,020 14,770 Roper Industries Inc. 337 14,676 Navistar International Corp./1/ 393 14,651 Martek Biosciences Corp./1/ 278 14,642 O'Reilly Automotive Inc./1/ 398 14,634 Varco International Inc./1/ 854 14,441 International Speedway Corp. Class A 329 14,440 AMR Corp./1/ 1,258 14,404 Whirlpool Corp. 212 14,367 Lexar Media Inc./1/ 840 14,314 International Rectifier Corp./1/ 379 14,190 Hyperion Solutions Corp./1/ 491 14,175 Mohawk Industries Inc./1/ 198 14,121 Strayer Education Inc. 146 14,120 St. Joe Company (The) 440 14,115 Southwest Bancorp of Texas Inc. 386 14,093 Pediatrix Medical Group Inc./1/ 305 14,045 OmniVision Technologies Inc./1/ 330 13,939 Tellabs Inc./1/ 2,049 13,913 Coca-Cola Enterprises Inc. 719 13,704 Alliance Gaming Corp./1/ 674 13,669 Qwest Communications International Inc./1/ 3,990 13,566 Hot Topic Inc./1/ 601 13,547 Thor Industries Inc. 247 13,343 Sonic Corp./1/ 527 13,323 East West Bancorp Inc. 311 13,295 Airtran Holdings Inc./1/ 792 13,266 Tractor Supply Co./1/ 404 13,255 Semtech Corp./1/ 716 13,217 Odyssey Healthcare Inc./1/ 441 13,151 54 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Storage Technology Corp./1/ 544 $ 13,132 Kronos Inc./1/ 248 13,122 Plantronics Inc./1/ 549 13,105 Mentor Graphics Corp./1/ 744 13,042 Evergreen Resources Inc./1/ 482 13,014 Varian Semiconductor Equipment Associates Inc./1/ 347 12,995 Avocent Corp./1/ 427 12,934 University of Phoenix Online/1/ 193 12,850 Waste Connections Inc./1/ 363 12,738 AMERIGROUP Corp./1/ 285 12,720 Amphenol Corp. Class A/1/ 244 12,700 Andrx Group/1/ 684 12,661 SouthTrust Corp. 430 12,638 Legato Systems Inc./1/ 1,126 12,622 Total System Services Inc. 479 12,622 Cabot Microelectronics Corp./1/ 226 12,597 Harte-Hanks Inc. 682 12,576 BlackRock Inc. 256 12,544 Sylvan Learning Systems Inc./1/ 458 12,494 IGEN International Inc./1/ 216 12,485 King Pharmaceuticals Inc./1/ 824 12,484 Varian Inc./1/ 398 12,465 Viad Corp. 522 12,465 Hollywood Entertainment Corp./1/ 727 12,359 Triad Hospitals Inc./1/ 407 12,324 Intergraph Corp./1/ 528 12,292 CBRL Group Inc. 346 12,276 Grant Prideco Inc./1/ 1,198 12,208 Tetra Tech Inc./1/ 612 12,185 Advanced Digital Information Corp./1/ 867 12,155 Human Genome Sciences Inc./1/ 889 12,144 Church & Dwight Co. Inc. 345 12,072 American Tower Corp. Class A/1/ 1,185 12,028 Bio-Rad Laboratories Inc. Class A/1/ 234 11,934 United Online Inc./1/ 343 11,909 Renal Care Group Inc./1/ 348 11,884 Quiksilver Inc./1/ 743 11,851 Commonwealth Telephone Enterprises Inc./1/ 295 11,838 Dade Behring Holdings Inc./1/ 418 11,808 Friedman, Billings, Ramsey Group, Inc. Class A 682 11,764 Mandalay Resort Group 297 11,764 Vertex Pharmaceuticals Inc./1/ 951 11,697 Western Wireless Corp. Class A/1/ 627 11,687 HON Industries Inc. 316 11,679 Landstar System Inc./1/ 191 11,655 Protein Design Labs Inc./1/ 839 11,629 Novell Inc./1/ 2,172 11,577 Hillenbrand Industries Inc. 205 11,566 SCP Pool Corp./1/ 415 11,545 Hilb, Rogal & Hamilton Co. 370 11,485 Flir Systems Inc./1/ 448 11,478 ADC Telecommunications Inc./1/ 4,913 11,447 Documentum Inc./1/ 537 11,443 Brink's Co. (The) 659 11,440 Cognex Corp. 435 11,436 TrustCo Bank Corp. NY 925 11,433 Global Payments Inc. 316 11,376 Telephone & Data Systems Inc. 201 11,365 Key Energy Services Inc./1/ 1,177 11,358 Newfield Exploration Co./1/ 294 11,340 Mentor Corp. 496 11,309 Ariba Inc./1/ 3,697 11,239 W Holding Co. Inc. 626 11,205 Tekelec/1/ 715 11,161 Cadence Design Systems Inc./1/ 827 11,082 Meredith Corp. 240 11,081 Patina Oil & Gas Corp. 305 11,053 Enterasys Networks Inc./1/ 2,760 11,040 Christopher & Banks Corp. 462 11,023 New Century Financial Corp. 388 10,988 Yankee Candle Co. Inc. (The)/1/ 431 10,982 LifePoint Hospitals Inc./1/ 455 10,943 Cost Plus Inc./1/ 295 10,891 Toro Co. 240 10,800 Noble Energy Inc. 281 10,762 Power Integrations Inc./1/ 323 10,737 Washington Post Company (The) Class B 16 10,640 InterDigital Communications Corp./1/ 709 10,635 SCHEDULES OF INVESTMENTS 55 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Sybron Dental Specialties Inc./1/ 424 $ 10,630 CLARCOR Inc. 272 10,608 CEC Entertainment Inc./1/ 269 10,545 Digital River Inc./1/ 384 10,502 FactSet Research Systems Inc. 236 10,467 Atmel Corp./1/ 2,607 10,454 Maxtor Corp./1/ 859 10,454 GlobeSpanVirata Inc./1/ 1,447 10,447 ICOS Corp./1/ 272 10,423 Markel Corp./1/ 39 10,413 Zoran Corp./1/ 534 10,413 Alkermes Inc./1/ 754 10,345 Big Lots Inc./1/ 653 10,324 National-Oilwell Inc./1/ 569 10,322 Skyworks Solutions Inc./1/ 1,129 10,274 Energizer Holdings Inc./1/ 279 10,259 DoubleClick Inc./1/ 950 10,231 EarthLink Inc./1/ 1,242 10,222 NII Holdings Inc. Class B/1/ 171 10,207 NDCHealth Corp. 487 10,203 Cray Inc./1/ 929 10,200 Vicuron Pharmaceuticals Inc./1/ 576 10,195 Pride International Inc./1/ 599 10,153 Ligand Pharmaceuticals Inc. Class B/1/ 787 10,144 Trimble Navigation Ltd./1/ 438 10,140 HCC Insurance Holdings Inc. 348 10,120 Advanced Neuromodulation Systems Inc./1/ 253 10,095 CNET Networks Inc./1/ 1,424 10,082 Swift Transportation Co. Inc./1/ 443 10,052 VCA Antech Inc./1/ 426 10,032 CSG Systems International Inc./1/ 677 9,999 Columbia Sportswear Co./1/ 189 9,970 MacDermid Inc. 375 9,919 Priority Healthcare Corp. Class B/1/ 482 9,900 KV Pharmaceuticals Co./1/ 440 9,889 NPS Pharmaceuticals Inc./1/ 355 9,887 Brocade Communications Systems Inc./1/ 1,889 9,861 Cerner Corp./1/ 319 9,848 Hudson City Bancorp Inc. 318 9,807 Thoratec Corp./1/ 572 9,718 FTI Consulting Inc./1/ 560 9,716 Neurocrine Biosciences Inc./1/ 196 9,706 RSA Security Inc./1/ 677 9,668 MGM Grand Inc./1/ 264 9,649 DSP Group Inc./1/ 386 9,615 Owens & Minor Inc. 397 9,568 Texas Regional Bancshares Inc. Class A 283 9,563 FileNET Corp./1/ 475 9,533 Timberland Co. Class A/1/ 223 9,513 Endo Pharmaceuticals Holdings Inc./1/ 461 9,427 Watson Wyatt & Co. Holdings/1/ 417 9,387 Matthews International Corp. Class A 355 9,376 Select Medical Corp./1/ 325 9,360 VISX Inc./1/ 490 9,335 Wintrust Financial Corp. 247 9,304 Allied Waste Industries Inc./1/ 861 9,299 Urban Outfitters Inc./1/ 354 9,225 Macrovision Corp./1/ 499 9,217 j2 Global Communications Inc./1/ 242 9,155 Grey Global Group Inc. 12 9,133 Kroll Inc./1/ 491 9,133 Dionex Corp./1/ 232 9,132 Del Monte Foods Co./1/ 1,040 9,058 Diagnostic Products Corp. 249 9,046 Cumulus Media Inc. Class A/1/ 528 9,002 Rare Hospitality International Inc./1/ 360 8,968 Openwave Systems Inc./1/ 2,123 8,959 Maverick Tube Corp./1/ 577 8,955 Knight Ridder Inc. 134 8,938 ATMI Inc./1/ 353 8,920 Emmis Communications Corp./1/ 442 8,920 Heartland Express Inc. 371 8,911 Regis Corp. 277 8,892 Edwards (A.G.) Inc. 231 8,873 Thermo Electron Corp./1/ 406 8,810 Hunt (J.B.) Transport Services Inc./1/ 338 8,795 PerkinElmer Inc. 571 8,742 LeapFrog Enterprises Inc./1/ 230 8,740 56 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Harris Corp. 244 $ 8,733 ProQuest Co./1/ 332 8,732 Nektar Therapeutics/1/ 679 8,691 Wilson Greatbatch Technologies Inc./1/ 240 8,652 Ask Jeeves Inc./1/ 497 8,648 Invitrogen Corp./1/ 149 8,641 AtheroGenics Inc./1/ 516 8,638 Harland (John H.) Co. 325 8,603 Tidewater Inc. 304 8,603 Priceline.com Inc./1/ 295 8,552 Parametric Technology Corp./1/ 2,706 8,443 Talbots Inc. (The) 242 8,434 Advanced Fibre Communications Inc./1/ 402 8,430 IMC Global Inc. 1,306 8,371 Unit Corp./1/ 444 8,365 Lattice Semiconductor Corp./1/ 1,175 8,354 Ultratech Inc./1/ 296 8,353 Trust Co. of New Jersey (The) 261 8,352 Penn National Gaming Inc./1/ 391 8,336 Community First Bankshares Inc. 315 8,325 American Pharmaceutical Partners Inc./1/ 266 8,323 Acxiom Corp./1/ 528 8,321 Delta & Pine Land Co. 361 8,307 Entegris Inc./1/ 734 8,294 Brooks Automation Inc./1/ 396 8,276 CAL Dive International Inc./1/ 424 8,243 Fossil Inc./1/ 339 8,214 Borland Software Corp./1/ 891 8,206 CMGI Inc./1/ 5,277 8,179 United Defense Industries Inc./1/ 288 8,176 Hercules Inc./1/ 717 8,124 Scientific Games Corp. Class A/1/ 711 8,113 Hutchinson Technology Inc./1/ 245 8,109 Engineered Support Systems Inc. 134 8,107 Micrel Inc./1/ 663 8,082 Inveresk Research Group Inc./1/ 407 8,079 Anteon International Corp./1/ 264 8,078 LTX Corp./1/ 717 8,073 Esperion Therapeutics Inc./1/ 416 8,062 American Italian Pasta Co. Class A/1/ 208 8,048 CheckFree Corp./1/ 401 8,020 United Natural Foods Inc./1/ 241 7,999 Applied Micro Circuits Corp./1/ 1,641 7,992 Manhattan Associates Inc./1/ 308 7,974 Andrew Corp./1/ 648 7,964 Southwestern Energy Co./1/ 438 7,928 BARRA Inc./1/ 211 7,923 Onyx Pharmaceuticals Inc./1/ 365 7,866 Align Technology Inc./1/ 628 7,856 American Healthways Inc./1/ 187 7,852 Applera Corp. - Celera Genomics Group/1/ 668 7,809 CVB Financial Corp. 411 7,809 Select Comfort Corp./1/ 294 7,791 Marvel Enterprises Inc./1/ 350 7,787 Knight Transportation Inc./1/ 310 7,772 Polycom Inc./1/ 466 7,740 Belo (A.H.) Corp. 319 7,736 Telik Inc./1/ 383 7,679 Grey Wolf Inc./1/ 2,205 7,673 Simpson Manufacturing Co. Inc./1/ 187 7,646 CUNO Inc./1/ 195 7,642 Pacific Capital Bancorp 250 7,623 Tupperware Corp. 569 7,613 EGL Inc./1/ 418 7,599 Regeneron Pharmaceuticals Inc./1/ 430 7,598 MGE Energy Inc. 251 7,595 CV Therapeutics Inc./1/ 345 7,590 Washington Real Estate Investment Trust 261 7,569 ILEX Oncology Inc./1/ 455 7,558 Power-One Inc./1/ 734 7,553 Valley National Bancorp 271 7,545 eResearch Technology Inc./1/ 216 7,523 Couer D'Alene Mines Corp./1/ 2,405 7,480 Sycamore Networks Inc./1/ 1,524 7,468 Hollinger International Inc. 603 7,447 First Bancorp 242 7,441 Aeropostale Inc./1/ 275 7,439 Advanced Medical Optics Inc./1/ 414 7,435 SCHEDULES OF INVESTMENTS 57 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Checkpoint Systems Inc./1/ 470 $ 7,426 Pennsylvania Real Estate Investment Trust 222 7,426 Fairchild Semiconductor International Inc. Class A/1/ 445 7,378 Adolor Corp./1/ 402 7,377 SPX Corp./1/ 162 7,335 Baldor Electric Co. 347 7,325 FEI Co./1/ 312 7,282 Nextel Partners Inc. Class A/1/ 925 7,261 Inspire Pharmaceuticals Inc./1/ 422 7,258 Northern Trust Corp. 171 7,257 Catalina Marketing Corp./1/ 477 7,246 Wabtec Corp. 457 7,243 Constellation Brands Inc./1/ 237 7,226 Digital Insight Corp./1/ 363 7,224 Nordson Corp. 279 7,223 Genta Inc./1/ 567 7,184 Sohu.com Inc./1/ 231 7,184 Eclipsys Corp./1/ 444 7,100 Harleysville National Corp. 303 7,081 Cyberonics Inc./1/ 228 7,036 MICROS Systems Inc./1/ 206 7,035 Tanox Inc./1/ 350 7,004 Investment Technology Group Inc./1/ 365 7,001 Flagstar Bancorp Inc. 304 6,977 Oceaneering International Inc./1/ 296 6,962 Novastar Financial Inc. 121 6,954 Winnebago Industries Inc. 156 6,954 ADVO Inc./1/ 167 6,952 ANSYS Inc./1/ 195 6,930 Lennar Corp. Class A 89 6,923 Boyd Gaming Corp. 453 6,913 Vignette Corp./1/ 2,990 6,877 Bright Horizons Family Solutions Inc./1/ 172 6,871 Movie Gallery Inc./1/ 349 6,858 Kulicke & Soffa Industries Inc./1/ 631 6,840 AmSurg Corp./1/ 207 6,829 BioMarin Pharmaceutical Inc./1/ 891 6,825 Taubman Centers Inc. 348 6,821 ICN Pharmaceuticals Inc. 397 6,813 Dick's Sporting Goods Inc./1/ 181 6,759 Teledyne Technologies Inc./1/ 464 6,751 Integra LifeSciences Holdings Corp./1/ 237 6,705 Progress Software Corp./1/ 307 6,601 Actel Corp./1/ 275 6,592 Watson Pharmaceuticals Inc./1/ 158 6,587 Asyst Technologies Inc./1/ 468 6,585 Olin Corp. 415 6,565 Cathay Bancorp Inc. 148 6,549 Ventana Medical Systems Inc./1/ 162 6,529 Centene Corp./1/ 214 6,503 Enzon Pharmaceuticals Inc./1/ 555 6,460 Advisory Board Co. (The)/1/ 142 6,454 MicroStrategy Inc. Class A/1/ 140 6,441 Pacer International Inc./1/ 323 6,437 Too Inc./1/ 437 6,437 Eon Labs Inc./1/ 167 6,404 eSpeed, Inc./1/ 282 6,376 PolyMedica Corp. 240 6,360 ProAssurance Corp./1/ 246 6,354 Ascential Software Corp./1/ 342 6,337 Arrow International Inc. 274 6,302 RealNetworks Inc./1/ 962 6,301 Digene Corp./1/ 154 6,292 Agilent Technologies Inc./1/ 284 6,279 IDT Corp./1/ 355 6,276 POZEN Inc./1/ 353 6,276 Brady Corp. Class A 197 6,267 Independent Bank Corp. (Michigan) 214 6,266 Rogers Corp./1/ 202 6,266 Navigant Consulting Co./1/ 508 6,253 Symyx Technologies Inc./1/ 290 6,247 Georgia Gulf Corp. 267 6,234 Superior Energy Services Inc./1/ 632 6,194 Hewitt Associates Inc. Class A/1/ 254 6,185 WFS Financial Inc./1/ 167 6,184 Transaction Systems Architects Inc. Class A/1/ 372 6,179 Kopin Corp./1/ 889 6,161 Photon Dynamics Inc./1/ 211 6,151 58 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Nuveen Investments Inc. Class A 223 $ 6,133 Sotheby's Holdings Inc. Class A/1/ 566 6,124 InterMune Inc./1/ 320 6,106 Radio One Inc. Class D/1/ 424 6,089 Wabash National Corp./1/ 380 6,061 SERENA Software Inc./1/ 325 6,045 Magma Design Automation Inc./1/ 308 6,043 Wendy's International Inc. 187 6,040 MKS Instruments Inc./1/ 278 6,021 AMETEK Inc. 140 6,000 Agile Software Corp./1/ 628 5,979 ExpressJet Holdings Inc./1/ 433 5,975 Tetra Technologies Inc./1/ 289 5,959 Community Health Systems Inc./1/ 274 5,946 Integrated Device Technology Inc./1/ 476 5,912 M/I Schottenstein Homes Inc. 149 5,911 Mercury Computer Systems Inc./1/ 277 5,908 Gymboree Corp./1/ 419 5,904 Idex Corp. 162 5,903 Coherent Inc./1/ 239 5,887 Crompton Corp. 1,013 5,886 Resources Connection Inc./1/ 241 5,882 CIMA Labs Inc./1/ 209 5,842 United Community Banks Inc. 211 5,838 Littelfuse Inc./1/ 253 5,819 American Eagle Outfitters Inc./1/ 390 5,795 K-Swiss Inc. Class A 161 5,794 Wausau-Mosinee Paper Corp. 474 5,788 Pinnacle Systems Inc./1/ 686 5,783 United Therapeutics Inc./1/ 256 5,783 Quest Software Inc./1/ 477 5,772 Connetics Corp./1/ 319 5,761 ElkCorp 244 5,749 Chelsea Property Group Inc. 120 5,748 Electronics Boutique Holdings Corp./1/ 201 5,743 Werner Enterprises Inc. 250 5,728 Inter-Tel Inc. 233 5,720 Radian Group Inc. 127 5,639 Tuesday Morning Corp./1/ 202 5,622 Intuitive Surgical Inc./1/ 337 5,621 Kos Pharmaceuticals Inc./1/ 163 5,607 Federal Signal Corp. 376 5,602 Sinclair Broadcast Group Inc. Class A/1/ 549 5,578 Informatica Corp./1/ 748 5,573 Remington Oil & Gas Corp./1/ 307 5,572 Selective Insurance Group Inc. 187 5,565 Atrix Laboratories Inc./1/ 270 5,559 Sierra Health Services Inc./1/ 269 5,528 iDine Rewards Network Inc./1/ 340 5,525 SureWest Communications 166 5,520 United Surgical Partners International Inc./1/ 195 5,519 Akamai Technologies Inc./1/ 1,286 5,517 Worthington Industries Inc. 439 5,514 Opsware Inc./1/ 753 5,497 Choice Hotels International Inc./1/ 189 5,485 NetFlix Inc./1/ 163 5,478 VistaCare Inc. Class A/1/ 175 5,478 Dime Community Bancshares 238 5,474 Beverly Enterprises Inc./1/ 924 5,470 Guitar Center Inc./1/ 170 5,467 Boston Private Financial Holdings Inc. 232 5,466 Wolverine World Wide Inc. 281 5,451 WebEx Communications Inc./1/ 287 5,450 Diamond Offshore Drilling Inc. 285 5,443 Penwest Pharmaceuticals Co./1/ 253 5,440 Geron Corp./1/ 397 5,439 Credence Systems Corp./1/ 472 5,428 Columbia Laboratories Inc./1/ 448 5,412 Global Imaging Systems Inc./1/ 220 5,412 AmeriCredit Corp./1/ 525 5,407 Helix Technology Corp. 330 5,402 Dot Hill Systems Corp./1/ 392 5,394 F5 Networks Inc./1/ 280 5,387 Pre-Paid Legal Services Inc./1/ 230 5,387 Epicor Software Corp./1/ 602 5,382 R&G Financial Corp. Class B 184 5,373 WMS Industries Inc./1/ 237 5,370 American Medical Systems Holdings Inc./1/ 247 5,360 SCHEDULES OF INVESTMENTS 59 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Cell Therapeutics Inc./1/ 470 $ 5,344 @Road Inc./1/ 396 5,326 Benchmark Electronics Inc./1/ 126 5,326 webMethods Inc./1/ 666 5,315 Cabot Oil & Gas Corp. 204 5,304 Manor Care Inc. 176 5,280 aQuantive, Inc./1/ 568 5,260 Shuffle Master Inc./1/ 193 5,246 Harbor Florida Bancshares Inc. 196 5,225 Golden Telecom Inc./1/ 191 5,222 Exelixis Inc./1/ 728 5,198 Aeroflex Inc./1/ 587 5,195 Invacare Corp. 138 5,186 InfoSpace Inc./1/ 253 5,164 Impax Laboratories Inc./1/ 412 5,154 ManTech International Corp. Class A/1/ 207 5,150 Labor Ready Inc./1/ 511 5,136 W-H Energy Services Inc./1/ 288 5,126 CTI Molecular Imaging Inc./1/ 347 5,125 Micromuse Inc./1/ 626 5,121 FuelCell Energy Inc./1/ 437 5,113 Enzo Biochem Inc./1/ 262 5,112 Old Dominion Freight Line Inc./1/ 175 5,091 Perot Systems Corp. Class A/1/ 509 5,090 Dendrite International Inc./1/ 334 5,073 ESCO Technologies Inc./1/ 112 5,070 CONSOL Energy Inc. 272 5,054 ScanSource Inc./1/ 138 5,043 Wright Medical Group Inc./1/ 199 5,031 Keane Inc./1/ 392 5,010 Corixa Corp./1/ 629 5,007 OraSure Technologies Inc./1/ 527 5,007 Stratex Networks Inc./1/ 1,300 5,005 Photronics Inc./1/ 234 4,975 Cox Radio Inc. Class A/1/ 227 4,964 TriQuint Semiconductor Inc./1/ 886 4,962 Silicon Storage Technology Inc./1/ 567 4,961 Mercantile Bankshares Corp. 124 4,960 Tularik Inc./1/ 502 4,950 Per-Se Technologies Inc./1/ 309 4,944 Bombay Co. Inc. (The)/1/ 501 4,935 Charter Municipal Mortgage Acceptance Co. 266 4,889 Chicago Mercantile Exchange Holdings Inc. 71 4,886 Tektronix Inc./1/ 197 4,876 Westell Technologies Inc. Class A/1/ 650 4,869 SRA International Inc. Class A/1/ 130 4,866 Westamerica Bancorp 109 4,845 SafeNet Inc./1/ 134 4,841 West Corp./1/ 203 4,829 Lone Star Technologies Inc./1/ 357 4,816 IDX Systems Corp./1/ 208 4,809 Wireless Facilities Inc./1/ 402 4,784 Essex Property Trust Inc. 76 4,766 Internet Security Systems Inc./1/ 381 4,762 Headwaters Inc./1/ 295 4,749 Mykrolis Corp./1/ 390 4,735 Umpqua Holdings Corp. 248 4,719 First Tennessee National Corp. 111 4,713 SeaChange International Inc./1/ 376 4,711 Viasat Inc./1/ 264 4,702 CKE Restaurant Inc./1/ 727 4,689 Sterling Bancshares Inc. 392 4,677 Itron Inc./1/ 233 4,676 Brown-Forman Corp. Class B 59 4,668 ScanSoft Inc./1/ 1,109 4,647 Borders Group Inc./1/ 244 4,616 Main Street Banks Inc. 184 4,609 TALK America Holdings Inc./1/ 402 4,587 Superior Industries International Inc. 113 4,582 Harris Interactive Inc./1/ 649 4,569 Hooper Holmes Inc. 687 4,569 Hecla Mining Co./1/ 869 4,554 Retek Inc./1/ 674 4,550 Multimedia Games Inc./1/ 125 4,549 Secure Computing Corp./1/ 389 4,544 Joy Global Inc./1/ 289 4,537 Avanex Corp./1/ 934 4,530 Jarden Corp./1/ 120 4,530 Portal Software Inc./1/ 311 4,509 60 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- St. Mary Land & Exploration Co. 178 $ 4,507 U.S.I. Holdings Corp./1/ 346 4,501 Cousins Properties Inc. 162 4,495 PracticeWorks Inc./1/ 209 4,487 SurModics Inc./1/ 167 4,482 WilTel Communications Inc./1/ 280 4,474 Pegasus Solutions Inc./1/ 323 4,467 Websense Inc./1/ 210 4,467 autobytel.com Inc./1/ 469 4,465 Extreme Networks Inc./1/ 707 4,461 Salix Pharmaceuticals Ltd./1/ 231 4,449 Reebok International Ltd. 133 4,446 Ferro Corp. 208 4,443 Intrado Inc./1/ 195 4,442 Merit Medical Systems Inc./1/ 201 4,442 SciClone Pharmaceuticals Inc./1/ 562 4,440 Alliance Data Systems Corp./1/ 168 4,435 Sapient Corp./1/ 1,234 4,430 Identix Inc./1/ 844 4,414 Veeco Instruments Inc./1/ 219 4,371 7-Eleven Inc./1/ 318 4,366 Netegrity Inc./1/ 436 4,364 Comtech Telecommunications Corp./1/ 181 4,328 Palm Inc./1/ 221 4,321 Hovnanian Enterprises Inc. Class A/1/ 67 4,313 Mattson Technology Inc./1/ 476 4,313 Concur Technologies Inc./1/ 362 4,293 Sandy Spring Bancorp Inc. 132 4,293 CoStar Group Inc./1/ 165 4,290 CARBO Ceramics Inc. 118 4,267 Corvis Corp./1/ 3,296 4,252 Ciphergen Biosystems Inc./1/ 344 4,248 Peregrine Pharmaceuticals Inc./1/ 1,971 4,238 West Bancorporation 246 4,231 Timken Co. (The) 277 4,221 Mills Corp. 107 4,210 Verity Inc./1/ 322 4,209 Quicksilver Resources Inc./1/ 172 4,202 Bowne & Co. Inc. 281 4,201 Penn Virginia Corp. 95 4,199 Advent Software Inc./1/ 260 4,183 CSK Auto Corp./1/ 270 4,163 Portfolio Recovery Associates Inc./1/ 163 4,143 Suffolk Bancorp 124 4,128 City Holding Co. 124 4,117 Kelly Services Inc. Class A 165 4,115 Hydril Co./1/ 203 4,113 Interactive Data Corp./1/ 260 4,108 Plexus Corp./1/ 264 4,103 Inverness Medical Innovations Inc./1/ 161 4,089 Alaris Medical Systems Inc./1/ 246 4,084 Vector Group Ltd. 284 4,082 Trimeris Inc./1/ 162 4,078 TIBCO Software Inc./1/ 759 4,061 Gentiva Health Services Inc./1/ 352 4,048 Drugstore.com Inc./1/ 527 4,032 StarTek Inc. 126 4,032 MSC Industrial Direct Co. Inc. Class A 193 4,024 Wind River Systems Inc./1/ 706 4,017 Keystone Automotive Industries Inc./1/ 185 4,014 Chateau Communities Inc. 134 3,988 Bay View Capital Corp./1/ 649 3,939 Royal Gold Inc. 215 3,935 Advanced Energy Industries Inc./1/ 208 3,925 Harmonic Inc./1/ 624 3,912 Mediacom Communications Corp./1/ 581 3,893 Arrow Electronics Inc./1/ 211 3,880 Immunomedics Inc./1/ 530 3,880 Manufactured Home Communities Inc. 99 3,879 Isis Pharmaceuticals Inc./1/ 594 3,873 Pioneer Natural Resources Co./1/ 152 3,870 New Jersey Resources Corp. 107 3,856 Immucor Inc./1/ 143 3,854 Komag Inc./1/ 220 3,854 SpectraLink Corp./1/ 206 3,848 Delphi Corp. 424 3,837 Able Laboratories Inc./1/ 203 3,835 Neoware Systems Inc./1/ 224 3,824 Casual Male Retail Group Inc./1/ 517 3,821 FreeMarkets Inc./1/ 491 3,820 SCHEDULES OF INVESTMENTS 61 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Echelon Corp./1/ 320 $ 3,808 KVH Industries Inc./1/ 151 3,807 Rollins Inc. 213 3,800 D.R. Horton Inc. 116 3,793 S&T Bancorp Inc. 133 3,791 SuperGen Inc./1/ 504 3,785 Altiris Inc./1/ 144 3,784 Applied Films Corporation/1/ 127 3,776 Crown Castle International Corp./1/ 401 3,773 Exar Corp./1/ 267 3,773 Coinstar Inc./1/ 280 3,766 Powerwave Technologies Inc./1/ 565 3,740 Red Robin Gourmet Burgers/1/ 146 3,717 Ambac Financial Group Inc. 58 3,712 Cirrus Logic Inc./1/ 671 3,711 WD-40 Co. 117 3,708 Kyphon Inc./1/ 190 3,705 InVision Technologies Inc./1/ 152 3,700 X-Rite Inc. 326 3,690 Sterling Bancorp (New York) 137 3,687 Convergys Corp./1/ 201 3,686 MB Financial Inc. 83 3,685 Superconductor Technologies Inc./1/ 932 3,663 Nabi Biopharmaceuticals/1/ 434 3,659 Newpark Resources Inc./1/ 851 3,659 Alabama National Bancorp 77 3,657 Silicon Image Inc./1/ 809 3,649 Entrust Inc./1/ 743 3,648 Oil States International Inc./1/ 287 3,642 Mueller Industries Inc./1/ 143 3,639 i-STAT Corp./1/ 272 3,637 Serologicals Corp./1/ 276 3,629 Mindspeed Technologies Inc./1/ 670 3,611 Palatin Technologies Inc./1/ 751 3,605 Hancock Fabrics Inc. 228 3,598 ChipPAC Inc. Class A/1/ 607 3,575 Electronics For Imaging Inc./1/ 153 3,568 Wynn Resorts Ltd./1/ 196 3,563 Bank of the Ozarks Inc. 80 3,561 Glimcher Realty Trust 169 3,561 Zoll Medical Corp./1/ 111 3,558 Republic Bancorp Inc. 267 3,556 Silgan Holdings Inc./1/ 111 3,552 Pentair Inc. 89 3,548 TTM Technologies Inc./1/ 247 3,527 MBT Financial Corp. 225 3,510 Rainbow Technologies Inc./1/ 384 3,510 Trex Co. Inc./1/ 113 3,509 World Fuel Services Corp. 125 3,509 BearingPoint Inc./1/ 439 3,503 Genesis Microchip Inc./1/ 312 3,498 Therasense Inc./1/ 280 3,497 Encysive Pharmaceuticals Inc./1/ 552 3,483 ICU Medical Inc./1/ 128 3,483 DOV Pharmaceutical Inc./1/ 194 3,482 Speedway Motorsports Inc. 118 3,482 Fidelity National Information Solutions Inc./1/ 140 3,479 EPIQ Systems Inc./1/ 205 3,477 AC Moore Arts & Crafts Inc./1/ 156 3,476 Synovis Life Technologies Inc./1/ 142 3,472 BioLase Technology Inc./1/ 304 3,469 PTEK Holdings Inc./1/ 425 3,464 Biosite Inc./1/ 122 3,462 American West Holdings Corp. Class B/1/ 355 3,454 Myriad Genetics Inc./1/ 304 3,453 Oriental Financial Group Inc. 142 3,445 Frontier Oil Corp. 234 3,440 Hollis-Eden Pharmaceuticals/1/ 141 3,435 Cascade Bancorp 202 3,434 Packeteer Inc./1/ 285 3,434 USANA Health Sciences Inc./1/ 71 3,426 Westcorp Inc. 98 3,425 TiVo Inc./1/ 462 3,423 Tyler Technologies Inc./1/ 483 3,420 Discovery Laboratories Inc./1/ 473 3,406 Hanover Compressor Co./1/ 344 3,406 SonoSite Inc./1/ 170 3,402 Holly Corp. 137 3,395 II-VI Inc./1/ 169 3,378 ArthroCare Corp./1/ 189 3,368 62 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Champion Enterprises Inc./1/ 529 $ 3,359 CIBER Inc./1/ 442 3,359 Oplink Communications Inc./1/ 1,326 3,355 Axcelis Technologies Inc./1/ 405 3,345 Sharper Image Corp./1/ 145 3,344 Joseph A. Bank Clothiers Inc./1/ 76 3,342 TriPath Imaging Inc./1/ 384 3,341 SPSS Inc./1/ 198 3,340 PC-Tel Inc./1/ 312 3,329 Stratasys Inc./1/ 78 3,324 Ceradyne Inc./1/ 128 3,311 Charles River Associates Inc./1/ 116 3,309 Sound Federal Bancorp Inc. 221 3,308 California Pizza Kitchen Inc./1/ 190 3,306 Korn/Ferry International/1/ 400 3,300 United Stationers Inc./1/ 87 3,278 North Pittsburgh Systems Inc. 193 3,267 Lightbridge Inc./1/ 346 3,263 Oakley Inc./1/ 326 3,260 Iomega Corp./1/ 292 3,253 Interpublic Group of Companies Inc. 228 3,219 Sonic Solutions Inc./1/ 231 3,218 Interpore International/1/ 209 3,210 Zymogenetics Inc./1/ 219 3,208 Forward Air Corp./1/ 116 3,207 Zenith National Insurance Corp. 115 3,199 Pixelworks Inc./1/ 371 3,198 NeoPharm Inc./1/ 213 3,195 Regeneration Technologies Inc./1/ 351 3,177 Planar Systems Inc./1/ 148 3,175 Central European Distribution Corp./1/ 116 3,173 World Acceptance Corp./1/ 234 3,171 Mobile Mini Inc./1/ 164 3,164 LaBranche & Co. Inc. 216 3,154 Lionbridge Technologies Inc./1/ 420 3,154 Artisan Components Inc./1/ 187 3,143 Kaydon Corp. 132 3,134 REMEC Inc./1/ 307 3,131 Transmeta Corp./1/ 1,118 3,130 Cable Design Technologies Corp./1/ 391 3,128 Aksys Ltd./1/ 312 3,117 21st Century Insurance Group 226 3,114 Shore Bancshares Inc. 90 3,113 MRO Software Inc./1/ 228 3,112 Tollgrade Communications Inc./1/ 193 3,102 Noven Pharmaceuticals Inc./1/ 272 3,101 Steel Dynamics Inc./1/ 204 3,089 Hibbet Sporting Goods Inc./1/ 129 3,086 Entravision Communications Corp./1/ 323 3,068 Proxim Corp. Class A/1/ 2,055 3,062 Big 5 Sporting Goods Corp./1/ 200 3,056 Ixia/1/ 282 3,051 FindWhat.com/1/ 176 3,041 Concurrent Computer Corp./1/ 802 3,040 Aaron Rents Inc. 144 3,017 Applied Signal Technology Inc. 151 3,012 infoUSA Inc./1/ 401 3,012 Quantum Corp./1/ 978 3,012 Laserscope/1/ 256 3,008 Westport Resources Corp./1/ 127 2,990 Presstek Inc./1/ 404 2,981 TALX Corp. 121 2,979 Bradley Pharmaceuticals Inc./1/ 109 2,970 Yellow Corp./1/ 99 2,958 SFBC International Inc./1/ 104 2,957 Ameristar Casinos Inc./1/ 118 2,955 Perrigo Co. 232 2,953 Staar Surgical Co./1/ 277 2,939 Conceptus Inc./1/ 224 2,934 Raven Industries Inc. 119 2,933 CorVel Corp./1/ 82 2,915 United States Cellular Corp./1/ 100 2,910 LookSmart Ltd./1/ 925 2,904 Excel Technology Inc./1/ 116 2,900 Independent Bank Corp. (Massachusetts) 113 2,894 Vulcan Materials Co. 72 2,874 Consolidated-Tomoka Land Co. 99 2,872 Exult Inc./1/ 357 2,870 InterVoice-Brite Inc./1/ 321 2,870 Mesa Air Group Inc./1/ 258 2,864 Tejon Ranch Co./1/ 86 2,864 SCHEDULES OF INVESTMENTS 63 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Sports Authority Inc. (The)/1/ 91 $ 2,863 Molecular Devices Corp./1/ 164 2,857 Kirkland's Inc./1/ 178 2,853 GSI Commerce Inc./1/ 285 2,844 Cleveland-Cliffs Inc./1/ 111 2,842 United Security Bancshares Inc. 112 2,841 PAREXEL International Corp./1/ 185 2,834 Plains Exploration & Production Co./1/ 227 2,831 Gladstone Capital Corp. 145 2,820 Symmetricom Inc./1/ 445 2,817 Vital Images Inc./1/ 150 2,808 Synaptics Inc./1/ 260 2,798 FalconStor Software Inc./1/ 446 2,792 O'Charley's Inc./1/ 188 2,788 Spanish Broadcasting System Inc. Class A/1/ 328 2,788 Palm Harbor Homes Inc./1/ 162 2,775 VitalWorks Inc./1/ 528 2,772 Orbital Sciences Corp./1/ 298 2,765 Old Second Bancorp Inc. 64 2,752 Saga Communications Inc./1/ 142 2,748 Southern Peru Copper Corp. 124 2,743 Vicor Corp./1/ 287 2,735 Franklin Electric Co. Inc. 49 2,728 Darling International Inc./1/ 1,024 2,714 Group 1 Software Inc./1/ 151 2,713 Papa John's International Inc./1/ 109 2,704 Embarcadero Technologies Inc./1/ 269 2,701 Arrow Financial Corp. 104 2,698 Fargo Electronics/1/ 214 2,696 America's Car-Mart Inc./1/ 90 2,695 Daktronics Inc./1/ 168 2,690 Philadelphia Consolidated Holding Corp./1/ 58 2,680 Keithley Instruments Inc. 189 2,674 ValueVision Media Inc. Class A/1/ 168 2,673 German American Bancorp 152 2,669 Peapack-Gladstone Financial Corp. 86 2,666 Plains Resource Inc./1/ 214 2,664 Cardiac Science Inc./1/ 639 2,658 Quality Systems Inc./1/ 66 2,653 West Marine Inc./1/ 139 2,648 Young Broadcasting Inc. Class A/1/ 135 2,645 Heidrick & Struggles International Inc./1/ 156 2,641 American Medical Security Group Inc./1/ 130 2,640 Frontier Financial Corp. 88 2,631 Anaren Inc./1/ 206 2,629 Children's Place Retail Stores Inc. (The)/1/ 153 2,624 Chattem Inc./1/ 189 2,623 Mercantile Bank Corp. 79 2,623 Concord Communications Inc./1/ 200 2,618 Repligen Corp./1/ 485 2,614 Comstock Resources Inc./1/ 195 2,605 Midwest Banc Holdings Inc. 117 2,601 PennRock Financial Services Corp. 92 2,594 Innovex Inc./1/ 260 2,587 Wild Oats Markets Inc./1/ 236 2,579 CNB Financial Corp. 61 2,577 Centillium Communications Inc./1/ 361 2,552 Greene County Bancshares Inc. 107 2,552 First Bancorp (North Carolina) 91 2,549 aaiPharma Inc./1/ 148 2,532 SupportSoft Inc./1/ 226 2,529 Xicor Inc./1/ 272 2,527 E-LOAN Inc./1/ 695 2,523 Bausch & Lomb Inc. 57 2,517 Isle of Capri Casinos Inc./1/ 127 2,516 Lindsay Manufacturing Co. 125 2,512 Bentley Pharmaceuticals Inc./1/ 154 2,502 SM&A/1/ 217 2,502 Audiovox Corp. Class A/1/ 198 2,501 Accredited Home Lenders Holding Co./1/ 115 2,497 National Penn Bancshares Inc. 90 2,497 Warnaco Group Inc. (The)/1/ 160 2,494 Avant Immunotherapeutics Inc./1/ 1,034 2,492 Commercial Capital Bancorp Inc./1/ 159 2,485 A.S.V. Inc./1/ 130 2,482 Yadkin Valley Bank & Trust Co. 141 2,482 64 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Antigenics Inc./1/ 202 $ 2,464 Connecticut Bankshares Inc. 48 2,460 Playboy Enterprises Inc. Class B/1/ 169 2,459 Activision Inc./1/ 205 2,450 GrafTech International Ltd./1/ 306 2,448 C&D Technologies Inc. 129 2,441 Possis Medical Inc./1/ 156 2,434 Boston Communications Group Inc./1/ 244 2,433 Integrated Electrical Services Inc./1/ 352 2,429 1-800-FLOWERS.COM Inc./1/ 322 2,421 Warwick Valley Telephone Co. 31 2,418 La Jolla Pharmaceutical Co./1/ 610 2,409 Macatawa Bank Corp. 104 2,409 Overstock.com Inc./1/ 160 2,383 Gibraltar Steel Corp. 108 2,380 MEMC Electronics Materials Inc./1/ 218 2,378 Kadant Inc./1/ 124 2,376 Cherokee Inc./1/ 112 2,374 Digitas Inc./1/ 326 2,367 Penns Woods Bancorp Inc. 54 2,361 Resource Bankshares Corp. 81 2,360 Western Sierra Bancorp/1/ 66 2,360 Fisher Communications Inc./1/ 50 2,357 MatrixOne Inc./1/ 478 2,357 Bei Technologies Inc. 151 2,356 JNI Corp./1/ 339 2,356 Manugistics Group Inc./1/ 430 2,356 QAD Inc./1/ 215 2,356 Ariad Pharmaceuticals Inc./1/ 391 2,354 IBT Bancorp Inc. 47 2,346 Stoneridge Inc./1/ 159 2,339 KCS Energy Inc./1/ 342 2,326 LodgeNet Entertainment Corp./1/ 150 2,325 MTC Technologies Inc./1/ 100 2,320 York International Corp. 67 2,318 Rudolph Technologies Inc./1/ 120 2,317 Sigma Designs Inc./1/ 267 2,294 Arch Coal Inc. 103 2,288 American Woodmark Corp. 51 2,283 Charter Financial Corp. 74 2,283 White Electronic Designs Corp./1/ 212 2,279 Citizens Inc./1/ 283 2,278 Lithia Motors Inc. Class A 114 2,277 Transatlantic Holdings Inc. 32 2,276 Verint Systems Inc./1/ 106 2,268 Aspect Communications Corp./1/ 272 2,266 Salem Communications Corp. Class A/1/ 116 2,249 CTS Corp. 182 2,240 Coldwater Creek Inc./1/ 228 2,239 Linens 'N Things Inc./1/ 94 2,235 Florida Rock Industries Inc. 45 2,232 Net2Phone Inc./1/ 353 2,227 Standard Commercial Corp. 121 2,226 Source Interlink Companies Inc./1/ 236 2,218 Peet's Coffee & Tea Inc./1/ 113 2,209 Aspect Medical Systems Inc./1/ 214 2,198 Administaff Inc./1/ 246 2,187 BroadVision Inc./1/ 445 2,182 Sturm Ruger & Co. Inc. 211 2,178 FFLC Bancorp Inc. 75 2,177 Rayovac Corp./1/ 149 2,175 Integral Systems Inc./1/ 120 2,168 Drew Industries Inc./1/ 117 2,166 Bank Mutual Corp. 51 2,165 Blue Rhino Corp./1/ 195 2,161 Coca-Cola Bottling Co. Consolidated 43 2,156 Heritage Financial Corp. 99 2,156 Covenant Transport Inc. Class A/1/ 117 2,153 TradeStation Group Inc./1/ 288 2,152 Prima Energy Corp./1/ 85 2,146 MTR Gaming Group Inc./1/ 247 2,141 CyberGuard Corp./1/ 225 2,140 Playtex Products Inc./1/ 359 2,140 Universal Display Corp./1/ 206 2,140 Verso Technologies Inc./1/ 578 2,139 Capital City Bank Group Inc. 56 2,137 American Home Mortgage Holdings Inc. 121 2,126 Landauer Inc. 60 2,126 Savient Pharmaceuticals Inc./1/ 420 2,121 PrivateBancorp Inc. 64 2,119 SCHEDULES OF INVESTMENTS 65 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Jill (J.) Group Inc. (The)/1/ 184 $ 2,116 Finisar Corp./1/ 930 2,092 Berkley (W.R.) Corp. 61 2,090 Euronet Worldwide Inc./1/ 171 2,079 KFx Inc./1/ 413 2,073 Virginia Commerce Bancorp Inc./1/ 95 2,073 Aceto Corp. 148 2,072 Energy Conversion Devices Inc./1/ 197 2,070 Epix Medical Inc./1/ 121 2,059 Getty Realty Corp. 84 2,058 Inet Technologies Inc./1/ 159 2,057 Indevus Pharmaceuticals Inc./1/ 384 2,054 Ryerson Tull Inc. 263 2,051 Raindance Communications Inc./1/ 741 2,045 IndyMac Bancorp Inc. 88 2,039 Quixote Corp. 81 2,037 Kana Software Inc./1/ 518 2,031 Nassda Corp./1/ 258 2,030 Omnicell Inc./1/ 125 2,030 Exact Sciences Corp./1/ 150 2,025 InteliData Technologies Corp./1/ 858 2,025 SAFLINK Corp./1/ 440 2,024 Computer Programs & Systems Inc. 112 2,019 Kensey Nash Corp./1/ 86 2,019 Cubist Pharmaceuticals Inc./1/ 187 2,018 Candela Corp./1/ 158 2,016 Osteotech Inc./1/ 246 2,015 Alberto-Culver Co. Class B 34 2,000 Intermagnetics General Corp./1/ 89 1,990 Nu Skin Enterprises Inc. Class A 156 1,989 Register.com/1/ 441 1,989 eCollege.com Inc./1/ 98 1,974 Abgenix Inc./1/ 136 1,971 P.A.M. Transportation Services Inc./1/ 96 1,970 Transkaryotic Therapies Inc./1/ 188 1,965 Exactech Inc./1/ 120 1,962 Anixter International Inc./1/ 86 1,958 Gulf Island Fabrication Inc./1/ 130 1,955 AVI BioPharma Inc./1/ 378 1,954 Right Management Consultants Inc./1/ 108 1,953 IMPAC Medical Systems Inc./1/ 109 1,950 Network Equipment Technologies Inc./1/ 213 1,949 Federal Agricultural Mortgage Corp./1/ 72 1,944 Monolithic System Technology Inc./1/ 231 1,943 CardioDynamics International Corp./1/ 431 1,935 Hickory Tech Corp. 169 1,935 Keynote Systems Inc./1/ 166 1,934 Blockbuster Inc. 92 1,932 Progenics Pharmaceuticals Inc./1/ 112 1,929 TriZetto Group Inc. (The)/1/ 287 1,923 Horizon Organic Holding Corp./1/ 80 1,915 Scotts Co. (The) Class A/1/ 35 1,915 Cubic Corp. 76 1,909 TRC Companies Inc./1/ 116 1,909 United Industrial Corp. 120 1,908 Alexander's Inc./1/ 18 1,899 Genencor International Inc./1/ 120 1,883 Weyco Group Inc. 38 1,881 Crown American Realty Trust 158 1,880 DHB Industries Inc./1/ 432 1,879 IXYS Corp./1/ 200 1,874 Metrologic Instruments Inc./1/ 52 1,871 WellChoice Inc./1/ 62 1,868 AnnTaylor Stores Corp./1/ 58 1,864 Impac Mortgage Holdings Inc. 115 1,862 General Cable Corp./1/ 233 1,855 Specialty Laboratories Inc./1/ 142 1,853 Nelson (Thomas) Inc./1/ 134 1,851 Option Care Inc./1/ 154 1,850 Kosan Biosciences Inc./1/ 232 1,847 Quaker City Bancorp Inc. 46 1,840 First Federal Financial of Kentucky 60 1,839 Medical Action Industries Inc./1/ 141 1,836 Standard Microsystems Corp./1/ 68 1,835 Nautilus Group Inc. (The) 145 1,830 Closure Medical Corp./1/ 75 1,829 First Citizens Banc Corp. 69 1,828 SBA Communications Corp./1/ 570 1,824 Bankrate Inc./1/ 130 1,823 Arena Pharmaceuticals Inc./1/ 253 1,822 LNB Bancorp Inc. 90 1,816 66 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Libbey Inc. 65 $ 1,808 SS&C Technologies Inc. 90 1,799 First Horizon Pharmaceutical Corp./1/ 281 1,798 Dendreon Corp./1/ 203 1,797 New Focus Inc./1/ 400 1,796 Diodes Inc./1/ 87 1,791 Microsemi Corp./1/ 117 1,783 Pacific Northwest Bancorp 50 1,783 C-COR.net Corp./1/ 270 1,782 SureBeam Corporation Class A/1/ 1,245 1,780 Syntel Inc. 78 1,779 Otter Tail Corp. 68 1,778 Tredegar Corp. 118 1,776 Columbia Bancorp (Oregon) 123 1,768 Triarc Companies Inc. Class B 170 1,768 Cavalry Bancorp Inc. 105 1,759 Neoforma Inc./1/ 125 1,756 Hypercom Corp./1/ 325 1,752 MTS Systems Corp. 115 1,750 Forrester Research Inc./1/ 122 1,748 Computer Network Technology Corp./1/ 201 1,745 DJ Orthopedics Inc./1/ 125 1,744 Central Pacific Financial Corp. 71 1,739 Cole National Corp./1/ 139 1,732 Hudson Highland Group Inc./1/ 90 1,732 iPayment Holdings Inc./1/ 76 1,730 deCODE genetics Inc./1/ 366 1,724 GB&T Bancshares Inc. 77 1,714 Maui Land & Pineapple Co. Inc./1/ 66 1,707 United Mobile Homes Inc. 113 1,703 Flag Financial Corp. 127 1,698 Cepheid Inc./1/ 363 1,695 NIC Inc./1/ 359 1,691 Hi-Tech Pharmacal Co./1/ 72 1,690 Community Bank of Northern Virginia 102 1,688 SY Bancorp Inc. 90 1,688 DigitalThink Inc./1/ 654 1,681 Fluor Corp. 45 1,680 LabOne Inc./1/ 72 1,680 CDI Corp. 62 1,676 Sierra Bancorp 109 1,676 C&F Financial Corp. 37 1,673 Erie Indemnity Co. Class A 43 1,673 Heartland Financial USA Inc. 60 1,668 Reading International Inc. Class A/1/ 292 1,667 National Healthcare Corp./1/ 116 1,656 United PanAm Financial Corp./1/ 95 1,654 Renaissance Learning Inc./1/ 70 1,652 Digimarc Corp./1/ 112 1,648 PEC Solutions Inc./1/ 111 1,638 Old Point Financial Corp. 52 1,629 Monro Muffler Brake Inc./1/ 55 1,628 Westmoreland Coal Co./1/ 116 1,627 Meridian Bioscience Inc. 162 1,623 United Security Bancshares 64 1,613 Diversa Corp./1/ 208 1,612 Quidel Corp./1/ 240 1,610 Duratek Inc./1/ 180 1,606 MAPICS Inc./1/ 163 1,601 CollaGenex Pharmaceuticals Inc./1/ 149 1,599 Great Atlantic & Pacific Tea Co./1/ 197 1,598 Net.B@nk Inc. 127 1,581 NL Industries Inc. 97 1,578 FTD Inc. Class A/1/ 70 1,576 California Water Service Group 61 1,574 CuraGen Corp./1/ 313 1,574 Luminex Corp./1/ 233 1,573 Stellent Inc./1/ 202 1,568 GulfMark Offshore Inc./1/ 111 1,560 Drexler Technology Corp./1/ 111 1,556 Three-Five Systems Inc./1/ 282 1,554 Biopure Corp./1/ 240 1,553 ParthusCeva Inc./1/ 180 1,546 Medical Staffing Network Holdings Inc./1/ 204 1,542 Nara Bancorp Inc. 90 1,542 Analogic Corp. 32 1,536 Young Innovations Inc. 48 1,536 Haemonetics Corp./1/ 65 1,535 Resource America Inc. Class A 129 1,533 SCHEDULES OF INVESTMENTS 67 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Valence Technology Inc./1/ 448 $ 1,528 Fremont General Corp. 120 1,525 OPNET Technologies Inc./1/ 122 1,523 PDF Solutions Inc./1/ 135 1,519 1-800 CONTACTS INC./1/ 75 1,513 Prosperity Bancshares Inc. 71 1,513 Medis Technologies Ltd./1/ 148 1,508 NetScout Systems Inc./1/ 300 1,497 Ansoft Corp./1/ 146 1,496 State Bancorp Inc. 75 1,494 Digital Generation Systems Inc./1/ 682 1,486 Chicago Pizza & Brewery Inc./1/ 126 1,480 Methode Electronics Inc. Class A 125 1,476 Mobius Management Systems Inc./1/ 184 1,476 Orthologic Corp./1/ 274 1,474 ACLARA BioSciences Inc./1/ 371 1,469 Veritas DGC Inc./1/ 184 1,468 FMS Financial Corp. 87 1,457 GTC Biotherapeutics Inc./1/ 469 1,454 Lifeline Systems Inc./1/ 46 1,451 Barnes & Noble Inc./1/ 57 1,448 Polo Ralph Lauren Corp. 54 1,448 Center Bancorp Inc. 90 1,446 Radiant Systems Inc./1/ 231 1,446 U.S. Physical Therapy Inc./1/ 118 1,443 Third Wave Technologies Inc./1/ 446 1,441 Navigators Group Inc./1/ 44 1,439 Capital Automotive 47 1,434 Provident Bancorp Inc. 34 1,429 OSI Systems Inc./1/ 82 1,419 Clayton Williams Energy Inc./1/ 75 1,414 Enstar Group Inc./1/ 36 1,413 Virginia Financial Group Inc. 47 1,413 NBC Capital Corp. 58 1,406 Hexcel Corp./1/ 238 1,404 GameStop Corp./1/ 88 1,399 Mail-Well Inc./1/ 399 1,396 CoBiz Inc. 87 1,395 Pumatech Inc./1/ 291 1,385 Stewart & Stevenson Services Inc. 92 1,382 TheStreet.com Inc./1/ 307 1,382 Supertex Inc./1/ 77 1,381 Research Frontiers Inc./1/ 120 1,376 Argosy Gaming Co./1/ 56 1,366 Micro Therapeutics Inc./1/ 258 1,365 Gabelli Asset Management Inc. Class A/1/ 38 1,355 Novoste Corp./1/ 307 1,354 Albemarle Corp. 49 1,345 Alexandria Real Estate Equities Inc. 28 1,345 Smith (A.O.) Corp. 48 1,344 Maritrans Inc. 89 1,335 Durect Corp./1/ 397 1,334 Universal Electronics Inc./1/ 116 1,334 Del Laboratories Inc./1/ 47 1,328 Tennant Co. 36 1,326 Aphton Corp./1/ 235 1,318 Neose Technologies Inc./1/ 140 1,309 Gevity HR Inc. 89 1,307 Bebe Stores Inc./1/ 48 1,301 Sun Communities Inc. 33 1,300 Overland Storage Inc./1/ 88 1,298 Churchill Downs Inc. 34 1,291 CPI Corp. 70 1,288 Princeton Review Inc. (The)/1/ 200 1,286 Dynacq International Inc./1/ 71 1,284 Steak n Shake Company (The)/1/ 86 1,281 Kenneth Cole Productions Class A 49 1,279 Chronimed Inc./1/ 140 1,278 Group 1 Automotive Inc./1/ 37 1,278 CryoLife Inc./1/ 207 1,275 Learning Tree International Inc./1/ 76 1,275 Information Holdings Inc./1/ 63 1,262 Aspen Technology Inc./1/ 322 1,256 Convera Corp./1/ 287 1,248 Datastream Systems Inc./1/ 161 1,248 Ambassadors Group Inc./1/ 73 1,242 AsiaInfo Holdings Inc./1/ 184 1,240 Mid Atlantic Realty Trust 59 1,239 Aether Systems Inc./1/ 271 1,238 Pemstar Inc./1/ 346 1,232 Commercial Bankshares Inc. 41 1,228 68 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- FNB Corp. 49 $ 1,223 First Essex Bancorp Inc. 24 1,221 Curative Health Services Inc./1/ 68 1,215 Gray Television Inc. 104 1,215 First Busey Corp. Class A 47 1,213 Summit Bancshares Inc. 44 1,210 Alpharma Inc. Class A 65 1,209 Triton PCS Holdings Inc. Class A/1/ 270 1,204 Eastern Virginia Bankshares 43 1,202 PSS World Medical Inc./1/ 135 1,197 Regent Communications Inc./1/ 196 1,196 McMoRan Exploration Co./1/ 114 1,195 CompuCredit Corp./1/ 68 1,190 First South Bancorp Inc. 37 1,190 Concord Camera Corp./1/ 111 1,182 Southern Financial Bancorp Inc. 30 1,181 Marine Products Corp. 80 1,178 U.S. Restaurant Properties Inc. 72 1,170 Synplicity Inc./1/ 198 1,168 Arris Group Inc./1/ 202 1,161 Bone Care International Inc./1/ 91 1,158 Cholestech Corp./1/ 152 1,155 Capitol Bancorp Ltd. 43 1,150 Paxson Communications Corp./1/ 230 1,141 Tanger Factory Outlet Centers Inc. 31 1,139 Duane Reade Inc./1/ 71 1,132 NetRatings Inc./1/ 121 1,129 Martha Stewart Living Omnimedia Inc. Class A/1/ 122 1,128 Allscripts Healthcare Solutions Inc./1/ 276 1,126 Hudson United Bancorp 32 1,125 Franklin Financial Corp. 36 1,113 ON Semiconductor Corp./1/ 278 1,112 Sun Bancorp Inc. (Pennsylvania) 60 1,111 Beasley Broadcast Group Inc. Class A/1/ 80 1,106 CCC Information Services Group Inc./1/ 66 1,106 OshKosh B'Gosh Inc. Class A 43 1,106 Siliconix Inc./1/ 22 1,105 PDI Inc./1/ 45 1,103 Lannett Co. Inc./1/ 63 1,102 ValueClick Inc./1/ 131 1,102 Sanderson Farms Inc. 35 1,101 Cantel Medical Corp./1/ 82 1,094 Security Bank Corp. 37 1,092 MarketWatch.com Inc./1/ 130 1,087 Newtek Business Services Inc./1/ 219 1,082 Alteon Inc./1/ 567 1,077 VIVUS Inc./1/ 307 1,075 Valspar Corp. (The) 23 1,073 Brookstone Inc./1/ 54 1,071 NASB Financial Inc. 32 1,069 Park Electrochemical Corp. 47 1,069 NCI Building Systems Inc./1/ 53 1,055 Bioreliance Corp./1/ 41 1,048 Glacier Bancorp Inc. 38 1,042 CT Communications Inc. 92 1,040 Pain Therapeutics Inc./1/ 167 1,027 LNR Property Corp. 25 1,024 Oneida Financial Corp. 43 1,024 La-Z-Boy Inc. 46 1,021 MIM Corp./1/ 136 1,020 Courier Corp. 20 1,018 Plug Power Inc./1/ 197 1,015 WESCO International Inc./1/ 194 1,015 Bruker BioSciences Corp./1/ 230 1,012 APAC Customer Services Inc./1/ 403 1,007 McGrath Rentcorp 36 1,006 First Financial Holdings Inc. 33 995 Trans World Entertainment Corp./1/ 176 994 HealthExtras Inc./1/ 114 982 Virage Logic Corp./1/ 128 973 Genesee & Wyoming Inc. Class A/1/ 41 972 Quaker Chemical Corp. 41 954 Star Scientific Inc./1/ 524 954 Irwin Financial Corp. 39 948 IBERIABANK Corp. 18 947 Catapult Communications Corp./1/ 75 943 Mothers Work Inc./1/ 31 941 Party City Corp./1/ 76 941 Retractable Technologies Inc./1/ 154 941 SCHEDULES OF INVESTMENTS 69 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Seattle Genetics Inc./1/ 155 $ 941 Charlotte Russe Holding Inc./1/ 91 936 Center Financial Corp./1/ 46 934 Offshore Logistics Inc./1/ 46 934 Carmike Cinemas Inc./1/ 35 921 Firstbank Corp. 29 919 WatchGuard Technologies Inc./1/ 170 910 Clark Inc./1/ 68 907 Cross Country Healthcare Inc./1/ 64 902 Hain Celestial Group Inc./1/ 49 888 Ulticom Inc./1/ 84 885 Vastera Inc./1/ 172 884 Lydall Inc./1/ 73 877 Liquidmetal Technologies/1/ 278 876 Emerson Radio Corp./1/ 233 874 RCN Corp./1/ 473 870 Virbac Corp./1/ 120 870 ActivCard Corp./1/ 106 869 Compuware Corp./1/ 161 863 Strattec Security Corp./1/ 18 858 Modine Manufacturing Co. 36 857 Hawthorne Financial Corp./1/ 21 843 Vans Inc./1/ 77 839 THQ Inc./1/ 51 837 Greater Community Bancorp 52 822 Green Mountain Coffee Roasters Inc./1/ 41 812 Modtech Holdings Inc./1/ 102 810 Aaon Inc./1/ 49 805 GBC Bancorp 21 805 Jeffries Group Inc. 28 805 SeeBeyond Technology Corp./1/ 311 796 Hungarian Telephone and Cable Corp./1/ 86 795 AAR Corp./1/ 99 794 United Capital Corp. 44 792 General Binding Corp./1/ 76 790 Lakeland Bancorp Inc. 49 787 NYFIX Inc./1/ 139 778 Cerus Corp./1/ 167 773 Sirna Therapeutics Inc./1/ 134 766 HEICO Corp. 56 762 Universal Health Realty Income Trust 28 760 United Auto Group Inc./1/ 33 759 Ocular Sciences Inc./1/ 34 758 Standard Motor Products Inc. 75 758 MedQuist Inc./1/ 39 755 Barnes Group Inc. 29 753 Tellium Inc./1/ 549 752 Autodesk Inc. 44 749 Roto-Rooter Inc. 21 747 Interwoven Inc./1/ 281 745 Sanchez Computer Associates Inc./1/ 192 737 Apogent Technologies Inc./1/ 35 730 Summit America Television Inc./1/ 246 716 Insight Enterprises Inc./1/ 47 715 Clean Harbors Inc./1/ 168 714 Sensient Technologies Corp. 34 714 Vitria Technology Inc./1/ 140 707 Nuvelo Inc./1/ 265 694 Coastal Financial Corp. 50 692 Tompkins Trustco Inc. 15 686 Gartner Inc. Class A/1/ 62 683 Artesyn Technologies Inc./1/ 90 682 SCS Transportation Inc./1/ 45 680 SkyWest Inc. 39 675 First Community Bancshares Inc. 19 669 Zale Corp./1/ 15 666 Maxygen Inc./1/ 65 663 North Coast Energy Inc./1/ 53 662 Shenandoah Telecommunications Co. 17 655 Connecticut Water Service Inc. 24 648 Washington Trust Bancorp Inc. 27 648 RAIT Investment Trust 28 643 JDA Software Group Inc./1/ 43 639 PC Connection Inc./1/ 68 639 Rofin-Sinar Technologies Inc./1/ 30 630 RPC Inc. 63 630 Cabot Corp. 22 627 Great Southern Bancorp Inc. 16 623 Casella Waste Systems Inc. Class A/1/ 50 621 70 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Tootsie Roll Industries Inc. 20 $ 620 Thomas & Betts Corp./1/ 39 618 TeleTech Holdings Inc./1/ 97 616 Dover Downs Gaming & Entertainment Inc. 74 608 Manitowoc Co. Inc. (The) 28 607 Sykes Enterprises Inc./1/ 91 602 Woodhead Industries Inc. 40 602 Foothill Independent Bancorp 28 595 Newport Corp./1/ 42 592 Seacoast Banking Corp. of Florida 34 592 First Financial Bankshares Inc. 16 591 Bryn Mawr Bank Corp. 14 589 Briggs & Stratton Corp. 10 588 EDO Corp. 29 587 RC2 Corp./1/ 30 576 Armor Holdings Inc./1/ 34 569 Encore Wire Corp./1/ 43 568 Saxon Capital Inc./1/ 33 566 Men's Wearhouse Inc. (The)/1/ 22 564 Columbia Bancorp 21 563 Gemstar-TV Guide International Inc./1/ 119 563 National Beverage Corp./1/ 37 559 Boston Beer Co. Inc. Class A/1/ 35 557 Pegasystems Inc./1/ 76 555 Sonic Automotive Inc. 23 553 Acme Communications Inc./1/ 73 551 Atlantic Coast Airlines Holdings Inc./1/ 64 545 Kirby Corp./1/ 19 545 UnitedGlobalCom Inc. Class A/1/ 89 544 Handspring Inc./1/ 480 542 Pegasus Communications Corp./1/ 36 536 New England Business Service Inc. 20 532 E.piphany Inc./1/ 104 519 American Realty Investors Inc./1/ 51 512 First Albany Companies Inc. 40 510 First Sentinel Bancorp Inc. 28 501 Fleetwood Enterprises Inc./1/ 54 501 Community Banks Inc. 15 496 Arden Group Inc. Class A 8 492 Wayne Bancorp Inc. 17 485 Brookfield Homes Corp. 26 482 Inter Parfums Inc. 48 480 OceanFirst Financial Corp. 19 476 First Financial Bancorp 32 472 Shoe Carnival Inc./1/ 33 472 Lincoln Electric Holding Inc. 21 466 Province Healthcare Co./1/ 36 466 Northern States Financial Corp. 16 461 Immunogen Inc./1/ 102 454 First State Bancorp 15 444 RehabCare Group Inc./1/ 26 443 Middlesex Water Co. 18 441 SBS Technologies Inc./1/ 40 434 Albany International Corp. Class A 14 432 Value Line Inc. 9 432 MSC.Software Corp./1/ 59 425 Insurance Auto Auctions Inc./1/ 37 416 NN Inc. 32 412 Interchange Financial Services Corp. 20 411 ICT Group Inc./1/ 38 407 Arctic Cat Inc. 21 406 Centennial Communications Corp./1/ 80 406 NBT Bancorp Inc. 20 405 Farmers Capital Bank Corp. 12 390 Northwest Bancorp Inc. 21 386 Ultimate Electronics Inc./1/ 40 380 Manufacturers Services Ltd./1/ 75 375 Insituform Technologies Inc. Class A/1/ 21 373 Sipex Corp./1/ 47 369 SonicWALL Inc./1/ 63 365 Standard Register Co. (The) 22 365 Adaptec Inc./1/ 46 348 MAXIMUS Inc./1/ 10 344 Action Performance Companies Inc. 14 342 School Specialty Inc./1/ 12 339 Ennis Business Forms Inc. 25 335 Union Bankshares Corp. 11 334 Advanced Marketing Services Inc. 31 317 Scholastic Corp./1/ 11 317 Technitrol Inc./1/ 17 313 SCHEDULES OF INVESTMENTS 71 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Riviana Foods Inc. 11 $ 312 PAB Bankshares Inc. 23 311 Atari Inc./1/ 75 307 Optical Communication Products Inc./1/ 128 302 Spartech Corp. 14 298 Cohu Inc. 15 293 Alfa Corp. 23 288 Semitool Inc./1/ 36 287 Credit Acceptance Corp./1/ 25 284 Whitehall Jewellers Inc./1/ 25 280 Schawk Inc. 23 274 IHOP Corp. 8 263 Tweeter Home Entertainment Group Inc./1/ 34 261 Town & Country Trust (The) 11 258 EMCOR Group Inc./1/ 6 255 Galyan's Trading Co./1/ 25 255 Sterling Financial Corp. (Pennsylvania) 10 254 Nash Finch Co. 16 248 Blount International Inc./1/ 51 245 Exchange National Bancshares Inc. 7 243 D&K Healthcare Resources Inc. 17 239 Meritage Corp./1/ 5 236 Healthcare Services Group Inc. 14 231 Skechers U.S.A. Inc. Class A/1/ 30 223 SimpleTech Inc./1/ 31 222 USB Holding Co. Inc. 13 221 Technical Olympic USA Inc./1/ 8 220 American Management Systems Inc./1/ 17 217 Independence Holding Co. 10 217 Financial Federal Corp./1/ 7 214 Nuance Communications Inc./1/ 37 214 S1 Corp./1/ 42 212 4Kids Entertainment Inc./1/ 10 211 Wilsons The Leather Experts Inc./1/ 26 208 Berry Petroleum Co. Class A 11 201 Southwest Water Co. 14 197 BancTrust Financial Group Inc. 13 196 Gorman-Rupp Co. (The) 8 181 Genlyte Group Inc. (The)/1/ 4 178 Herley Industries Inc./1/ 10 175 ESS Technology Inc./1/ 15 162 Bel Fuse Inc. Class B 6 159 NS Group Inc./1/ 24 155 Schweitzer-Mauduit International Inc. 6 152 Elizabeth Arden Inc./1/ 9 148 Global Power Equipment Group Inc./1/ 28 148 PRG-Schultz International Inc./1/ 26 148 Genesco Inc./1/ 9 145 Midway Games Inc./1/ 49 145 Oak Hill Financial Inc. 5 145 Matria Healthcare Inc./1/ 8 138 Hooker Furniture Corp. 4 136 Boyds Collection Ltd. (The)/1/ 29 131 InterCept Inc./1/ 9 123 EMS Technologies Inc./1/ 7 119 McLeodUSA Inc. Class A/1/ 85 118 Integrated Defense Technologies Inc./1/ 7 117 Rex Stores Corp./1/ 9 117 Steven Madden Ltd./1/ 6 114 First of Long Island Corp. 3 113 LSI Industries Inc. 8 113 Raytech Corp./1/ 32 112 City Bank 3 97 Stanley Furniture Co. Inc. 3 92 World Wrestling Entertainment Inc. 9 90 Intertan Inc./1/ 9 82 Hanmi Financial Corp. 4 80 National Processing Inc./1/ 4 77 Mission West Properties Inc. 6 74 Deb Shops Inc. 4 73 Sypris Solutions Inc. 5 69 Central Coast Bancorp/1/ 4 68 Royal Bancshares of Pennsylvania Class A 2 54 Sports Resorts International Inc./1/ 10 51 American National Bankshares Inc. 2 50 Crawford & Co. Class B 7 49 72 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2003 SHARES OR SECURITY PRINCIPAL VALUE ---------------------------------------------------------------------------- Orleans Homebuilders Inc./1/ 4 $ 47 Stein Mart Inc./1/ 8 44 Horizon Offshore Inc./1/ 10 41 TOTAL COMMON STOCKS (Cost: $68,176,403) 68,499,703 SHORT TERM INVESTMENTS - 4.33% MONEY MARKET FUNDS - 2.61% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares/2/,/3/ 1,198,860 1,198,860 Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares/2/,/3/ 430,481 430,481 BlackRock Temp Cash Money Market Fund/2/ 19,123 19,123 Short Term Investment Co. - Liquid Assets Money Market Portfolio/2/ 101,496 101,496 Short Term Investment Co. - Prime Money Market Portfolio, Institutional Shares/2/ 39,135 39,135 1,789,095 FLOATING RATE NOTES - 0.99% Beta Finance Inc. 1.08%, 05/20/04/2/ $ 19,567 19,565 1.08%, 09/15/04/2/ 39,135 39,131 1.17%, 08/23/04/2/ 19,567 19,582 CC USA Inc. 1.06%, 05/24/04/2/ 39,135 39,132 1.08%, 04/19/04/2/ 17,219 17,219 1.12%, 07/15/04/2/ 19,567 19,573 Dorada Finance Inc. 1.08%, 05/20/04/2/ 39,135 39,131 1.24%, 08/09/04/2/ 9,784 9,783 Five Finance Inc. 1.09%, 04/15/04/2/ 19,567 19,567 HBOS Treasury Services PLC 1.13%, 06/24/08/2/ 39,135 39,135 SECURITY PRINCIPAL VALUE ---------------------------------------------------------------------------- Holmes Financing PLC 1.08%, 04/15/04/2/ $ 7,827 $ 7,827 K2 USA LLC 1.08%, 08/16/04/2/ 9,784 9,782 1.08%, 09/27/04/2/ 42,265 42,259 1.09%, 04/13/04/2/ 19,567 19,567 1.09%, 05/17/04/2/ 19,567 19,567 Links Finance LLC 1.05%, 07/20/04/2/ 15,654 15,651 1.08%, 05/04/04/2/ 19,567 19,567 1.08%, 06/28/04/2/ 19,567 19,564 1.09%, 03/29/04/2/ 19,567 19,567 Nationwide Building Society 1.08%, 07/23/04/2/ 29,351 29,351 Sigma Finance Inc. 1.05%, 07/20/04/2/ 19,567 19,564 1.07%, 10/15/03/2/ 39,135 39,134 1.07%, 07/01/04/2/ 19,567 19,564 1.24%, 08/06/04/2/ 9,784 9,783 Tango Finance Corp. 1.05%, 07/15/04/2/ 11,740 11,737 1.06%, 07/06/04/2/ 11,740 11,739 WhistleJacket Capital LLC 1.08%, 09/15/04/2/ 19,567 19,564 White Pine Finance LLC 1.08%, 05/17/04/2/ 23,481 23,481 1.08%, 07/06/04/2/ 23,481 23,479 1.08%, 08/26/04/2/ 19,567 19,565 1.09%, 04/20/04/2/ 19,567 19,567 681,697 COMMERCIAL PAPER - 0.52% Amsterdam Funding Corp. 1.06%, 10/16/03/2/ 18,589 18,582 Blue Ridge Asset Funding Corp. 1.05%, 10/17/03/2/ 19,567 19,558 Edison Asset Securitization 1.07%, 10/23/03/2/ 36,787 36,763 Gemini Securitization Corp. 1.05%, 10/17/03/2/ 13,697 13,691 SCHEDULES OF INVESTMENTS 73 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 GROWTH INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE ---------------------------------------------------------------------------- Greenwich Funding Corp. 1.06%, 10/16/03/2/ $ 23,089 $ 23,079 Jupiter Securitization Corp. 1.05%, 10/20/03/2/ 19,567 19,556 New Center Asset Trust 1.06%, 10/22/03/2/ 19,567 19,555 Park Avenue Receivables Corp. 1.05%, 10/20/03/2/ 19,567 19,556 Preferred Receivables Funding Corp. 1.06%, 10/08/03/2/ 19,567 19,563 Receivables Capital Corp. 1.05%, 10/15/03/2/ 13,152 13,148 Sydney Capital Corp. 1.07%, 10/17/03/2/ 15,850 15,842 UBS Finance (Delaware) Inc. 1.03%, 10/08/03/2/ 39,135 39,127 1.05%, 10/15/03/2/ 19,567 19,559 1.11%, 10/01/03/2/ 78,269 78,269 355,848 TIME DEPOSITS - 0.16% Abbey National Treasury Services PLC 1.15%, 10/01/03/2/ 19,567 19,567 Canadian Imperial Bank of Commerce 1.06%, 10/08/03/2/ 9,784 9,784 1.08%, 10/30/03/2/ 15,654 15,654 1.37%, 08/26/04/2/ 39,135 39,135 Toronto-Dominion Bank 1.33%, 08/23/04/2/ 25,438 25,426 109,566 REPURCHASE AGREEMENTS - 0.05% Lehman Brothers Inc. 1.10%, 10/01/03/2/ 31,308 31,308 31,308 TOTAL SHORT TERM INVESTMENTS (Cost: $2,967,514) 2,967,514 TOTAL INVESTMENTS IN SECURITIES - 104.26% (Cost $71,143,917) 71,467,217 Other Assets, Less Liabilities - (4.26%) (2,922,196) --------------- NET ASSETS - 100.00% $ 68,545,021 =============== /1/ Non-income earning securities. /2/ All or a portion of this security represents investments of securities lending collateral. /3/ Issuer is an affiliate of the Fund's investment advisor. See Note 2. SEE NOTES TO FINANCIAL STATEMENTS. 74 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- COMMON STOCKS - 99.90% Exxon Mobil Corp. 170,057 $ 6,224,086 Citigroup Inc. 131,072 5,965,087 Bank of America Corp. 38,152 2,977,382 Verizon Communications Inc. 70,053 2,272,519 Wells Fargo & Company 40,153 2,067,880 ChevronTexaco Corp. 27,215 1,944,512 SBC Communications Inc. 84,639 1,883,218 International Business Machines Corp. 20,665 1,825,339 JP Morgan Chase & Co. 51,747 1,776,475 Altria Group Inc. 39,463 1,728,479 AOL Time Warner Inc./1/ 110,219 1,665,409 American International Group Inc. 28,655 1,653,393 Merck & Co. Inc. 31,878 1,613,664 Hewlett-Packard Co. 77,774 1,505,705 Wachovia Corp. 32,632 1,344,112 Merrill Lynch & Co. Inc. 23,621 1,264,432 Morgan Stanley 24,719 1,247,321 U.S. Bancorp 48,925 1,173,711 Bank One Corp. 29,115 1,125,295 BellSouth Corp. 47,070 1,114,618 Procter & Gamble Co. 11,912 1,105,672 ConocoPhillips 17,302 947,285 Comcast Corp. Class A/1/ 30,532 942,828 Washington Mutual Inc. 23,721 933,896 Viacom Inc. Class B 23,887 914,872 Du Pont (E.I.) de Nemours and Co. 22,649 906,186 FleetBoston Financial Corp. 26,812 808,382 Walt Disney Co. (The) 38,919 784,996 McDonald's Corp. 32,444 763,732 Freddie Mac 13,693 716,829 Dow Chemical Co. (The) 20,993 683,112 Allstate Corp. (The) 17,955 655,896 Bristol-Myers Squibb Co. 24,674 633,135 Goldman Sachs Group Inc. (The) 7,259 609,030 Caterpillar Inc. 8,787 604,897 Schering-Plough Corp. 37,478 571,165 Alcoa Inc. 21,566 564,167 Honeywell International Inc. 21,190 558,356 United Technologies Corp. 7,163 553,557 Southern Company 18,398 539,429 Gannett Co. Inc. 6,854 531,596 Prudential Financial Inc. 14,079 525,991 Exelon Corp. 8,274 525,399 BB&T Corp. 14,237 511,251 Dominion Resources Inc. 8,187 506,775 Ford Motor Company 44,896 483,530 General Motors Corp. 11,806 483,220 Bank of New York Co. Inc. (The) 16,516 480,781 International Paper Co. 12,225 477,019 Emerson Electric Co. 9,004 474,061 Kimberly-Clark Corp. 9,039 463,881 AT&T Corp. 20,073 432,573 Lehman Brothers Holdings Inc. 6,179 426,845 Motorola Inc. 34,944 418,280 Liberty Media Corp. Class A/1/ 41,642 415,171 National City Corp. 14,074 414,620 Duke Energy Corp. 23,013 409,862 Hartford Financial Services Group Inc. 7,214 379,673 Northrop Grumman Corp. 4,403 379,627 SunTrust Banks Inc. 6,288 379,607 Union Pacific Corp. 6,490 377,523 Cendant Corp./1/ 20,013 374,043 Alltel Corp. 7,931 367,523 General Dynamics Corp. 4,513 352,285 Sprint Corp. (FON Group) 22,972 346,877 Coca-Cola Co. (The) 8,049 345,785 Kroger Co./1/ 19,281 344,551 PNC Financial Services Group 7,212 343,147 State Street Corp. 7,593 341,685 Occidental Petroleum Corp. 9,691 341,414 Travelers Property Casualty Corp. Class B 21,494 341,325 American Express Co. 7,498 337,860 Weyerhaeuser Co. 5,583 326,326 Deere & Co. 6,118 326,151 Avon Products Inc. 5,045 325,705 Lockheed Martin Corp. 7,028 324,342 Gillette Co. (The) 9,971 318,873 SCHEDULES OF INVESTMENTS 75 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- CVS Corp. 10,071 $ 312,805 Entergy Corp. 5,764 312,121 Sears, Roebuck and Co. 7,032 307,509 Chubb Corp. 4,728 306,753 FedEx Corp. 4,685 301,855 American Electric Power Co. Inc. 10,061 301,830 FPL Group Inc. 4,686 296,155 Raytheon Co. 10,489 293,692 ConAgra Foods Inc. 13,732 291,668 Golden West Financial Corp. 3,174 284,105 Apache Corp. 4,095 283,947 Devon Energy Corp. 5,873 283,020 Equity Office Properties Trust 10,267 282,651 KeyCorp 10,779 275,619 Burlington Northern Santa Fe Corp. 9,503 274,352 Sun Microsystems Inc./1/ 82,557 273,264 Clear Channel Communications Inc. 7,110 272,313 Air Products & Chemicals Inc. 5,814 262,211 AT&T Wireless Services Inc./1/ 31,825 260,328 Safeway Inc./1/ 11,292 259,038 Agilent Technologies Inc./1/ 11,314 250,153 Hancock (John) Financial Services Inc. 7,371 249,140 PG&E Corp./1/ 10,405 248,679 Burlington Resources Inc. 5,138 247,652 Countrywide Financial Corp. 3,128 244,860 MetLife Inc. 8,696 243,923 FirstEnergy Corp. 7,644 243,844 Progress Energy Inc. 5,465 242,974 Public Service Enterprise Group Inc. 5,744 241,248 Electronic Data Systems Corp. 11,469 231,674 Consolidated Edison Inc. 5,680 231,517 Principal Financial Group Inc. 7,433 230,349 SouthTrust Corp. 7,787 228,860 Lucent Technologies Inc./1/ 105,894 228,731 PepsiCo Inc. 4,978 228,142 PPG Industries Inc. 4,318 225,486 Marathon Oil Corp. 7,878 224,523 Costco Wholesale Corp./1/ 7,206 223,962 General Mills Inc. 4,569 215,063 Johnson Controls Inc. 2,267 214,458 Sara Lee Corp. 11,675 214,353 Fortune Brands Inc. 3,708 210,429 PACCAR Inc. 2,809 209,804 Comerica Inc. 4,470 208,302 Unocal Corp. 6,558 206,708 Kraft Foods Inc. 7,006 206,677 Equity Residential 6,926 202,793 MBIA Inc. 3,671 201,795 Masco Corp. 8,190 200,491 Federated Department Stores Inc. 4,783 200,408 Tribune Co. 4,351 199,711 St. Paul Companies Inc. 5,358 198,407 Regions Financial Corp. 5,666 194,061 Northern Trust Corp. 4,563 193,654 TXU Corp. 8,149 191,990 Apple Computer Inc./1/ 9,303 191,921 AmSouth Bancorp 8,959 190,110 Bear Stearns Companies Inc. (The) 2,526 188,945 Mellon Financial Corp. 6,238 188,013 Franklin Resources Inc. 4,195 185,461 Wyeth 3,985 183,709 Norfolk Southern Corp. 9,912 183,372 Marshall & Ilsley Corp. 5,799 182,784 PPL Corp. 4,454 182,391 May Department Stores Co. (The) 7,329 180,513 Praxair Inc. 2,886 178,788 Heinz (H.J.) Co. 5,207 178,496 Albertson's Inc. 8,669 178,321 Waste Management Inc. 6,735 176,255 Ameren Corp. 4,104 176,103 Charter One Financial Inc. 5,741 175,675 Archer-Daniels-Midland Co. 13,243 173,616 Computer Sciences Corp./1/ 4,519 169,779 Limited Brands Inc. 11,228 169,318 Eaton Corp. 1,880 166,606 Cinergy Corp. 4,478 164,343 Xerox Corp./1/ 15,976 163,914 Union Planters Corp. 5,069 160,383 Jefferson-Pilot Corp. 3,611 160,256 CSX Corp. 5,471 160,027 76 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Lincoln National Corp. 4,510 $ 159,564 CIGNA Corp. 3,567 159,267 General Motors Corp. Class H/1/ 11,127 159,227 MBNA Corp. 6,978 159,098 Monsanto Co. 6,640 158,962 DTE Energy Co. 4,296 158,479 3M Co. 2,274 157,065 Xcel Energy Inc. 10,135 156,788 Corning Inc./1/ 16,522 155,637 AFLAC Inc. 4,786 154,588 Georgia-Pacific Corp. 6,353 153,997 Eastman Kodak Co. 7,308 153,030 Anthem Inc./1/ 2,132 152,076 Illinois Tool Works Inc. 2,286 151,470 Constellation Energy Group Inc. 4,203 150,383 Anadarko Petroleum Corp. 3,596 150,169 UST Inc. 4,251 149,550 M&T Bank Corp. 1,704 148,759 Penney (J.C.) Co. Inc. (Holding Co.) 6,945 148,415 Dover Corp. 4,189 148,165 Simon Property Group Inc. 3,355 146,211 CIT Group Inc. 5,026 144,548 Genuine Parts Co. 4,417 141,256 Tenet Healthcare Corp./1/ 9,729 140,876 KeySpan Corp. 4,000 140,320 Sovereign Bancorp Inc. 7,508 139,273 Edison International/1/ 7,268 138,819 Cincinnati Financial Corp. 3,465 138,461 Aetna Inc. 2,236 136,463 Sempra Energy 4,643 136,318 AON Corp. 6,504 135,608 Loews Corp. 3,323 134,150 Parker Hannifin Corp. 2,998 134,011 Rohm & Haas Co. 4,006 134,001 NiSource Inc. 6,658 133,027 Newmont Mining Corp. 3,399 132,867 Interpublic Group of Companies Inc. 9,349 132,008 General Growth Properties Inc. 1,837 131,713 MeadWestvaco Corp. 5,089 129,770 Cox Communications Inc. Class A/1/ 4,100 129,642 National Commerce Financial Corp. 5,193 129,202 First Tennessee National Corp. 3,037 128,951 Zions Bancorporation 2,297 128,287 ProLogis 4,180 126,445 Ambac Financial Group Inc. 1,956 125,184 Starwood Hotels & Resorts Worldwide Inc. 3,593 125,036 Williams Companies Inc. 13,164 124,005 CenturyTel Inc. 3,636 123,224 Archstone-Smith Trust 4,635 122,271 Dean Foods Co./1/ 3,898 120,955 Torchmark Corp. 2,967 120,579 Knight Ridder Inc. 1,805 120,393 Plum Creek Timber Co. Inc. 4,646 118,194 Banknorth Group Inc. 4,143 116,915 SAFECO Corp. 3,311 116,746 Huntington Bancshares Inc. 5,828 115,336 Textron Inc. 2,923 115,312 Southwest Airlines Co. 6,487 114,820 Kerr-McGee Corp. 2,562 114,368 Avaya Inc./1/ 10,489 114,330 Murphy Oil Corp. 1,938 113,857 Valero Energy Corp. 2,941 112,552 Scientific-Atlanta Inc. 3,592 111,891 Rockwell Automation Inc. 4,253 111,641 Compass Bancshares Inc. 3,225 111,520 El Paso Corp. 15,167 110,719 Office Depot Inc./1/ 7,834 110,068 UNUMProvident Corp. 7,377 108,958 Kellogg Co. 3,148 104,986 Delphi Corp. 11,591 104,899 Capital One Financial Corp. 1,825 104,098 Micron Technology Inc./1/ 7,738 103,844 Old Republic International Corp. 3,065 101,421 North Fork Bancorp Inc. 2,918 101,400 Duke Realty Corp. 3,433 100,244 Medco Health Solutions Inc./1/ 3,853 99,908 McKesson Corp. 2,990 99,537 Public Storage Inc. 2,529 99,213 Watson Pharmaceuticals Inc./1/ 2,377 99,097 iStar Financial Inc. 2,519 98,115 SCHEDULES OF INVESTMENTS 77 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Vornado Realty Trust 2,037 $ 97,857 Radian Group Inc. 2,174 96,526 SCANA Corp. 2,814 96,380 MGIC Investment Corp. 1,847 96,173 Fidelity National Financial Inc. 3,196 96,072 HCA Inc. 2,599 95,799 Kimco Realty Corp. 2,336 95,706 Popular Inc. 2,394 95,281 Marriott International Inc. Class A 2,176 93,633 Apartment Investment & Management Co. Class A 2,378 93,598 Smurfit-Stone Container Corp. 6,222 93,206 Sherwin-Williams Co. (The) 3,161 92,965 Liz Claiborne Inc. 2,726 92,820 PeopleSoft Inc./1/ 5,098 92,733 Diebold Inc. 1,830 92,689 Lennar Corp. Class A 1,183 92,026 Grainger (W.W.) Inc. 1,932 91,867 Jones Apparel Group Inc. 3,069 91,855 Qwest Communications International Inc./1/ 26,810 91,154 Amerada Hess Corp. 1,819 91,132 Nucor Corp. 1,984 91,026 Vulcan Materials Co. 2,277 90,875 D.R. Horton Inc. 2,773 90,677 GreenPoint Financial Corp. 3,013 89,968 Whirlpool Corp. 1,318 89,321 Wisconsin Energy Corp. 2,917 89,173 Republic Services Inc. 3,856 87,300 InterActiveCorp/1/ 2,584 85,401 Campbell Soup Co. 3,202 84,853 Janus Capital Group Inc. 6,072 84,826 R.J. Reynolds Tobacco Holdings Inc. 2,140 84,616 Pulte Homes Inc. 1,235 83,992 Energy East Corp. 3,742 83,933 Lear Corp./1/ 1,582 83,276 Colgate-Palmolive Co. 1,487 83,108 Rouse Co. (The) 1,961 81,774 Clorox Co. 1,772 81,282 Engelhard Corp. 2,935 81,211 VF Corp. 2,083 81,050 SUPERVALU Inc. 3,393 80,957 Citizens Communications Co./1/ 7,205 80,768 Hibernia Corp. Class A 3,979 80,615 Centex Corp. 1,030 80,216 Wendy's International Inc. 2,468 79,716 Coca-Cola Enterprises Inc. 4,159 79,271 Sunoco Inc. 1,944 78,188 ServiceMaster Co. (The) 7,590 77,873 AutoNation Inc./1/ 4,413 77,404 Host Marriott Corp./1/ 7,186 77,106 Boston Properties Inc. 1,763 76,638 Pinnacle West Capital Corp. 2,149 76,289 PMI Group Inc. (The) 2,249 75,904 Tyson Foods Inc. Class A 5,338 75,426 Pitney Bowes Inc. 1,961 75,146 SPX Corp./1/ 1,632 73,897 Health Care Property Investors Inc. 1,580 73,786 Humana Inc./1/ 4,084 73,716 Level 3 Communications Inc./1/ 13,561 73,501 Hershey Foods Corp. 1,008 73,261 Fluor Corp. 1,955 72,980 AvalonBay Communities Inc. 1,557 72,868 Mercantile Bankshares Corp. 1,815 72,600 Liberty Property Trust 1,961 72,518 Sabre Holdings Corp. 3,370 72,421 AmerisourceBergen Corp. 1,339 72,373 American Power Conversion Corp. 4,193 71,868 Thermo Electron Corp./1/ 3,292 71,436 Hilton Hotels Corp. 4,392 71,238 Goodrich (B.F.) Co. 2,937 71,193 Pogo Producing Co. 1,570 71,090 Vishay Intertechnology Inc./1/ 4,039 70,763 Allied Capital Corp. 2,865 70,450 Fox Entertainment Group Inc. Class A/1/ 2,500 69,975 Sanmina-SCI Corp./1/ 7,179 69,636 NCR Corp./1/ 2,190 69,401 Pepco Holdings Inc. 3,987 68,895 Pioneer Natural Resources Co./1/ 2,695 68,615 Cadence Design Systems Inc./1/ 5,033 67,442 Leggett & Platt Inc. 3,112 67,313 78 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Computer Associates International Inc. 2,578 $ 67,312 King Pharmaceuticals Inc./1/ 4,406 66,751 Donnelley (R.R.) & Sons Co. 2,681 66,676 Associated Bancorp 1,763 66,641 Boeing Co. (The) 1,935 66,429 Questar Corp. 2,141 65,964 Hasbro Inc. 3,530 65,940 UnionBanCal Corp. 1,324 65,670 Eastman Chemical Co. 1,956 65,526 Commerce Bancshares Inc. 1,495 65,406 NSTAR 1,374 65,265 Equitable Resources Inc. 1,585 65,143 MDU Resources Group Inc. 1,925 65,026 ENSCO International Inc. 2,420 64,904 CenterPoint Energy Inc. 7,011 64,291 Toys R Us Inc./1/ 5,317 63,964 Park Place Entertainment Corp./1/ 7,092 63,899 Solectron Corp./1/ 10,889 63,701 Advanced Micro Devices Inc./1/ 5,648 62,749 TECO Energy Inc. 4,476 61,858 Washington Post Company (The) Class B 93 61,845 Mohawk Industries Inc./1/ 860 61,335 Nordstrom Inc. 2,454 60,884 Astoria Financial Corp. 1,957 60,471 Alliant Energy Corp. 2,746 60,412 ALLETE Inc. 2,200 60,236 Convergys Corp./1/ 3,271 59,990 AMB Property Corp. 1,937 59,679 KB Home 1,000 59,660 Millennium Pharmaceuticals Inc./1/ 3,789 58,313 Brown-Forman Corp. Class B 737 58,311 Baker Hughes Inc. 1,969 58,263 Foot Locker Inc. 3,584 58,061 Developers Diversified Realty Corp. 1,936 57,828 Northeast Utilities 3,208 57,487 New Plan Excel Realty Trust 2,460 57,318 Mack-Cali Realty Corp. 1,462 57,310 Temple-Inland Inc. 1,179 57,240 Dana Corp. 3,700 57,091 Rockwell Collins Inc. 2,255 56,939 Ashland Inc. 1,726 56,699 Manor Care Inc. 1,877 56,310 Deluxe Corp. 1,400 56,196 Valspar Corp. (The) 1,201 56,027 Phelps Dodge Corp./1/ 1,193 55,832 Energizer Holdings Inc./1/ 1,515 55,707 New York Times Co. Class A 1,275 55,411 Edwards (A.G.) Inc. 1,442 55,387 DPL Inc. 3,212 55,086 Bowater Inc. 1,307 54,972 Alberto-Culver Co. Class B 929 54,644 3Com Corp./1/ 9,251 54,581 Bausch & Lomb Inc. 1,234 54,481 Invitrogen Corp./1/ 939 54,453 Berkley (W.R.) Corp. 1,587 54,371 Brunswick Corp. 2,117 54,365 Newell Rubbermaid Inc. 2,507 54,327 Catellus Development Corp./1/ 2,214 54,132 Constellation Brands Inc./1/ 1,766 53,845 Fulton Financial Corp. 2,674 53,694 Puget Energy Inc. 2,383 53,451 Great Plains Energy Inc. 1,761 53,394 Smucker (J.M.) Co. (The) 1,264 53,290 City National Corp. 1,045 53,253 Weingarten Realty Investors 1,179 53,055 Bemis Co. 1,196 52,983 Wilmington Trust Corp. 1,710 52,600 Hospitality Properties Trust 1,483 52,024 NTL Inc./1/ 1,101 51,879 Sigma-Aldrich Corp. 997 51,784 Valley National Bancorp 1,846 51,393 Bank of Hawaii Corp. 1,527 51,277 Sonoco Products Co. 2,331 51,165 LSI Logic Corp./1/ 5,682 51,081 United Dominion Realty Trust Inc. 2,788 51,048 Avnet Inc./1/ 3,070 50,716 OGE Energy Corp. 2,228 50,331 Macerich Co. (The) 1,327 50,094 Sky Financial Group Inc. 2,206 49,657 Cullen/Frost Bankers Inc. 1,328 49,441 SCHEDULES OF INVESTMENTS 79 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Stanley Works (The) 1,670 $ 49,298 Hillenbrand Industries Inc. 869 49,029 Telephone & Data Systems Inc. 866 48,964 FirstMerit Corp. 1,975 48,861 Becton, Dickinson & Co. 1,350 48,762 Compuware Corp./1/ 9,058 48,551 United States Steel Corp. 2,601 47,806 Precision Castparts Corp. 1,353 47,490 Protective Life Corp. 1,582 47,223 BorgWarner Inc. 694 47,088 Hubbell Inc. Class B 1,276 46,561 Philadelphia Suburban Corp. 1,932 46,523 Vectren Corp. 1,955 46,177 Providian Financial Corp./1/ 3,912 46,122 Martin Marietta Materials Inc. 1,257 45,818 Circuit City Stores Inc. 4,793 45,677 Washington Federal Inc. 1,806 45,529 Intersil Corp. Class A/1/ 1,912 45,506 Apogent Technologies Inc./1/ 2,178 45,433 Autodesk Inc. 2,668 45,409 Ryland Group Inc. 620 45,328 AGL Resources Inc. 1,600 45,072 Colonial BancGroup Inc. (The) 3,120 45,053 Webster Financial Corp. 1,128 44,985 Pentair Inc. 1,126 44,894 Pan Pacific Retail Properties Inc. 1,044 44,892 Nationwide Financial Services Inc. 1,425 44,659 Hormel Foods Corp. 1,943 44,650 Belo (A.H.) Corp. 1,828 44,329 Calpine Corp./1/ 9,053 44,269 Lee Enterprises Inc. 1,141 44,122 Thornburg Mortgage Inc. 1,734 43,922 Siebel Systems Inc./1/ 4,497 43,711 MGM Grand Inc./1/ 1,195 43,677 Harrah's Entertainment Inc. 1,037 43,668 Ryder System Inc. 1,480 43,394 Rayonier Inc. 1,068 43,361 Lubrizol Corp. 1,331 43,191 PacifiCare Health Systems Inc./1/ 884 43,139 First American Corp. 1,725 42,952 BancorpSouth Inc. 1,958 42,880 Independence Community Bank Corp. 1,226 42,824 BRE Properties Inc. Class A 1,294 42,676 Lyondell Chemical Co. 3,303 42,212 Roslyn Bancorp Inc. 1,795 42,147 StanCorp Financial Group Inc. 733 42,111 Snap-On Inc. 1,514 41,862 Sirius Satellite Radio Inc./1/ 22,781 41,689 Harris Corp. 1,162 41,588 Tech Data Corp./1/ 1,347 41,555 CNF Inc. 1,291 41,377 Tellabs Inc./1/ 6,088 41,338 Cabot Corp. 1,440 41,054 FNB Corp. (Florida) 1,186 40,917 Smithfield Foods Inc./1/ 2,131 40,915 Autoliv Inc. 1,354 40,850 Hawaiian Electric Industries Inc. 937 40,788 Federal Realty Investment Trust 1,105 40,730 McGraw-Hill Companies Inc. (The) 650 40,384 CenterPoint Properties Corp. 592 40,321 Storage Technology Corp./1/ 1,670 40,314 Harsco Corp. 1,045 40,201 Arden Realty Inc. 1,433 40,009 XTO Energy Inc. 1,905 39,986 Annaly Mortgage Management Inc. 2,429 39,884 L-3 Communications Holdings Inc./1/ 920 39,790 Cummins Inc. 894 39,720 CarrAmerica Realty Corp. 1,312 39,163 Maxtor Corp./1/ 3,213 39,102 Wrigley (William Jr.) Co. 705 38,987 E*TRADE Group Inc./1/ 4,201 38,901 RPM International Inc. 2,970 38,788 Tektronix Inc./1/ 1,564 38,709 Shurgard Storage Centers Inc. Class A 1,091 38,512 Leucadia National Corp. 1,017 38,493 Teleflex Inc. 882 38,305 Peoples Energy Corp. 925 38,276 Nicor Inc. 1,087 38,197 XM Satellite Radio Holdings Inc. Class A/1/ 2,457 38,157 80 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- TCF Financial Corp. 789 $ 37,833 Pactiv Corp./1/ 1,860 37,721 ONEOK Inc. 1,855 37,415 National Fuel Gas Co. 1,632 37,291 Louisiana-Pacific Corp./1/ 2,698 37,178 Toll Brothers Inc./1/ 1,217 37,021 Delta Air Lines Inc. 2,778 36,947 Raymond James Financial Inc. 1,009 36,677 Neiman-Marcus Group Inc. Class A/1/ 876 36,529 Arrow Electronics Inc./1/ 1,984 36,486 Hudson United Bancorp 1,029 36,190 Saks Inc./1/ 3,126 36,043 New York Community Bancorp Inc. 1,139 35,890 Old National Bancorp 1,602 35,805 Markel Corp./1/ 134 35,778 MONY Group Inc. (The) 1,099 35,772 Omnicare Inc. 991 35,735 Reebok International Ltd. 1,064 35,570 Cytec Industries Inc./1/ 969 35,368 Realty Income Corp. 887 35,170 Coors (Adolf) Company Class B 650 34,944 First Midwest Bancorp Inc. 1,175 34,909 Whitney Holding Corp. 1,024 34,816 Healthcare Realty Trust Inc. 1,088 34,794 Service Corp. International/1/ 7,610 34,778 Transatlantic Holdings Inc. 489 34,778 Unitrin Inc. 1,140 34,724 Ingram Micro Inc. Class A/1/ 2,659 34,700 WGL Holdings Inc. 1,254 34,585 American Capital Strategies Ltd. 1,384 34,406 Hudson City Bancorp Inc. 1,115 34,387 McCormick & Co. Inc. 1,254 34,385 Reliant Resources Inc./1/ 6,636 33,976 Helmerich & Payne Inc. 1,292 33,773 Carlisle Companies Inc. 774 33,762 BJ's Wholesale Club Inc./1/ 1,738 33,665 WPS Resources Corp. 815 33,578 Zale Corp./1/ 754 33,485 Noble Energy Inc. 872 33,398 AmerUs Group Co. 982 33,388 CIENA Corp./1/ 5,627 33,256 Westar Energy Inc. 1,774 32,730 Allmerica Financial Corp./1/ 1,374 32,715 Highwoods Properties Inc. 1,369 32,664 First Industrial Realty Trust Inc. 1,018 32,647 Camden Property Trust 848 32,589 Triad Hospitals Inc./1/ 1,070 32,400 Trustmark Corp. 1,191 32,312 Ventas Inc. 1,887 32,305 Energen Corp. 891 32,236 Park National Corp. 288 32,227 T. Rowe Price Group Inc. 780 32,183 HON Industries Inc. 869 32,118 HRPT Properties Trust 3,476 31,771 York International Corp. 916 31,684 Gateway Inc./1/ 5,597 31,679 Standard-Pacific Corp. 826 31,305 Kennametal Inc. 837 31,304 AptarGroup Inc. 852 31,260 Briggs & Stratton Corp. 529 31,084 Forest City Enterprises Inc. Class A 710 31,062 International Rectifier Corp./1/ 829 31,038 Health Care REIT Inc. 1,003 30,943 Crane Co. 1,319 30,878 AGCO Corp./1/ 1,799 30,835 Piedmont Natural Gas Co. 790 30,810 UGI Corp. 1,061 30,695 Chelsea Property Group Inc. 635 30,416 La-Z-Boy Inc. 1,368 30,370 Automatic Data Processing Inc. 843 30,222 AnnTaylor Stores Corp./1/ 937 30,115 Owens-Illinois Inc./1/ 2,629 30,023 OfficeMax Inc./1/ 3,203 30,012 Allegheny Energy Inc./1/ 3,273 29,915 Mercury General Corp. 667 29,868 ICOS Corp./1/ 779 29,851 Metro-Goldwyn-Mayer Inc./1/ 1,945 29,836 Packaging Corporation of America/1/ 1,526 29,635 Ethan Allen Interiors Inc. 823 29,628 Alexander & Baldwin Inc. 1,054 29,596 Crescent Real Estate Equities Co. 2,033 29,478 IndyMac Bancorp Inc. 1,272 29,472 SCHEDULES OF INVESTMENTS 81 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Imation Corp. 902 $ 29,450 Borders Group Inc./1/ 1,556 29,440 Provident Financial Group Inc. 1,050 29,358 Beazer Homes USA Inc./1/ 347 29,287 American Greetings Corp. Class A/1/ 1,506 29,262 Reckson Associates Realty Corp. 1,263 29,188 Comverse Technology Inc./1/ 1,950 29,172 South Financial Group Inc. (The) 1,172 29,171 ArvinMeritor Inc. 1,635 29,119 Atmos Energy Corp. 1,216 29,111 Abgenix Inc./1/ 2,000 28,979 Citizens Banking Corp. 1,094 28,893 Duquesne Light Holdings Inc. 1,864 28,892 Commercial Federal Corp. 1,172 28,538 Lafarge North America Inc. 818 28,466 Novell Inc./1/ 5,339 28,457 Advanced Fibre Communications Inc./1/ 1,353 28,372 KEMET Corp./1/ 2,225 28,346 HCC Insurance Holdings Inc. 974 28,324 Phoenix Companies Inc. 2,432 28,090 Extended Stay America Inc./1/ 1,880 28,068 Corn Products International Inc. 876 27,901 Valassis Communications Inc./1/ 1,054 27,826 Boise Cascade Corp. 1,007 27,793 Ceridian Corp./1/ 1,489 27,725 Viad Corp. 1,160 27,701 Crown Holdings Inc./1/ 4,094 27,634 Allied Waste Industries Inc./1/ 2,552 27,562 Jeffries Group Inc. 956 27,485 Unisys Corp./1/ 2,030 27,466 Home Properties of New York Inc. 700 27,440 Andrew Corp./1/ 2,230 27,407 Pride International Inc./1/ 1,612 27,323 Lancaster Colony Corp. 685 27,242 Greater Bay Bancorp 1,309 27,227 Continental Airlines Inc. Class B/1/ 1,641 27,208 International Bancshares Corp. 656 27,191 AmeriCredit Corp./1/ 2,639 27,182 IKON Office Solutions Inc. 3,716 27,164 Westamerica Bancorp 611 27,159 Furniture Brands International Inc./1/ 1,124 27,088 United Bancshares Inc. 897 26,865 Readers Digest Association Inc. (The) 1,920 26,861 Polo Ralph Lauren Corp. 999 26,793 First Niagara Financial Group Inc. 1,772 26,757 Health Net Inc./1/ 844 26,729 Airgas Inc. 1,500 26,700 PNM Resources Inc. 950 26,638 Charter Communications Inc. Class A/1/ 6,439 26,529 McClatchy Co. (The) Class A 446 26,528 Cooper Tire & Rubber Co. 1,668 26,471 American Tower Corp. Class A/1/ 2,604 26,431 PerkinElmer Inc. 1,720 26,333 Goodyear Tire & Rubber Co. (The) 3,984 26,175 Nationwide Health Properties Inc. 1,486 25,990 Staten Island Bancorp Inc. 1,334 25,946 CMS Energy Corp. 3,508 25,854 Media General Inc. Class A 422 25,784 Downey Financial Corp. 550 25,701 Arbitron Inc./1/ 725 25,592 Halliburton Co. 1,055 25,584 Kinder Morgan Inc. 470 25,385 Universal Corp. 602 25,362 CBL & Associates Properties Inc. 506 25,249 Dynegy Inc. Class A/1/ 7,010 25,236 Tom Brown Inc./1/ 980 25,186 ADC Telecommunications Inc./1/ 10,798 25,159 Chittenden Corp. 843 25,079 Rowan Companies Inc./1/ 1,019 25,047 Trizec Properties Inc. 2,043 25,047 Bob Evans Farms Inc. 936 25,001 Black Hills Corp. 810 24,997 Callaway Golf Co. 1,751 24,987 Dycom Industries Inc./1/ 1,217 24,815 IDACORP Inc. 972 24,786 Susquehanna Bancshares Inc. 961 24,698 Polycom Inc./1/ 1,482 24,616 Southern Union Co./1/ 1,445 24,565 Prentiss Properties Trust 788 24,428 82 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Barnes & Noble Inc./1/ 957 $ 24,317 SL Green Realty Corp. 673 24,302 Big Lots Inc./1/ 1,533 24,237 Neurocrine Biosciences Inc./1/ 487 24,116 Flowserve Corp./1/ 1,184 24,035 Gables Residential Trust 743 24,014 Novellus Systems Inc./1/ 706 23,828 Peabody Energy Corp. 754 23,653 M.D.C. Holdings Inc. 438 23,652 Tidewater Inc. 835 23,631 Erie Indemnity Co. Class A 605 23,534 Trinity Industries Inc. 908 23,472 Scotts Co. (The) Class A/1/ 428 23,412 Forest Oil Corp./1/ 976 23,375 Cypress Semiconductor Corp./1/ 1,315 23,249 Mills Corp. 588 23,138 Fairchild Semiconductor International Inc. Class A/1/ 1,390 23,046 Corrections Corp. of America/1/ 933 23,017 BearingPoint Inc./1/ 2,872 22,919 American National Insurance Co. 269 22,878 GATX Corp. 1,081 22,863 Provident Financial Services Inc. 1,189 22,781 Payless ShoeSource Inc./1/ 1,739 22,503 Visteon Corp. 3,395 22,407 Newfield Exploration Co./1/ 580 22,371 Loews Corporation - Carolina Group 971 22,333 United Stationers Inc./1/ 592 22,307 Kellwood Co. 666 22,278 FMC Corp./1/ 884 22,277 La Quinta Corp./1/ 3,549 22,110 PepsiAmericas Inc. 1,525 22,097 Navistar International Corp./1/ 592 22,070 Commerce Group Inc. 581 22,055 Gemstar-TV Guide International Inc./1/ 4,660 22,042 Atmel Corp./1/ 5,488 22,007 Knight Trading Group Inc./1/ 1,918 21,961 USF Corp. 697 21,935 Applied Micro Circuits Corp./1/ 4,501 21,920 International Flavors & Fragrances Inc. 661 21,866 Silicon Valley Bancshares/1/ 789 21,800 Cincinnati Bell Inc./1/ 4,276 21,765 MPS Group Inc./1/ 2,415 21,735 SkyWest Inc. 1,254 21,719 LandAmerica Financial Group Inc. 472 21,636 Post Properties Inc. 793 21,593 National Semiconductor Corp./1/ 668 21,570 Dillards Inc. Class A 1,538 21,501 Ralcorp Holdings Inc./1/ 775 21,467 Regency Centers Corp. 580 21,373 Minerals Technologies Inc. 419 21,327 Mandalay Resort Group 538 21,310 Brookline Bancorp Inc. 1,443 21,241 Human Genome Sciences Inc./1/ 1,554 21,228 Banta Corp. 589 21,204 Blyth Inc. 778 20,990 Hunt (J.B.) Transport Services Inc./1/ 806 20,972 Reinsurance Group of America Inc. 510 20,783 Florida Rock Industries Inc. 418 20,733 Manpower Inc. 558 20,702 Winn-Dixie Stores Inc. 2,137 20,622 Linens 'N Things Inc./1/ 867 20,617 United Rentals Inc./1/ 1,279 20,579 Dial Corp. (The) 954 20,549 Terex Corp./1/ 1,106 20,494 Donnelley (R.H.) Corp./1/ 507 20,488 Del Monte Foods Co./1/ 2,350 20,469 Henry Schein Inc./1/ 360 20,412 Men's Wearhouse Inc. (The)/1/ 790 20,263 Hughes Supply Inc. 619 20,087 UMB Financial Corp. 425 20,047 VeriSign Inc./1/ 1,485 20,003 Copart Inc./1/ 1,852 20,002 First Commonwealth Financial Corp. 1,514 19,924 American Axle & Manufacturing Holdings Inc./1/ 672 19,878 Ohio Casualty Corp./1/ 1,366 19,807 Cimarex Energy Co./1/ 1,005 19,698 SCHEDULES OF INVESTMENTS 83 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- MAF Bancorp Inc. 515 $ 19,673 Gartner Inc. Class A/1/ 1,784 19,660 Electronics For Imaging Inc./1/ 843 19,659 Massey Energy Co. 1,473 19,591 Activision Inc./1/ 1,638 19,574 Albemarle Corp. 713 19,572 Potlatch Corp. 658 19,556 Great Lakes Chemical Corp. 969 19,487 Scholastic Corp./1/ 671 19,318 Avery Dennison Corp. 382 19,299 Stone Energy Corp./1/ 546 19,263 Arch Coal Inc. 860 19,101 Alexandria Real Estate Equities Inc. 397 19,068 Northwest Natural Gas Co. 657 19,053 Albany International Corp. Class A 617 19,028 Avista Corp. 1,218 18,976 Pep Boys-Manny, Moe & Jack Inc. 1,240 18,972 ICN Pharmaceuticals Inc. 1,105 18,962 CBRL Group Inc. 534 18,946 Acuity Brands Inc. 1,047 18,909 Flowers Foods Inc. 829 18,901 Sensient Technologies Corp. 900 18,900 People's Bank 631 18,892 AVX Corp. 1,364 18,673 Legg Mason Inc. 257 18,555 Integrated Device Technology Inc./1/ 1,491 18,518 Premcor Inc./1/ 799 18,513 AMETEK Inc. 431 18,473 Western Gas Resources Inc. 481 18,278 Alpharma Inc. Class A 974 18,116 Delphi Financial Group Inc. Class A 389 18,096 Liberty Corp. 431 18,080 Adaptec Inc./1/ 2,389 18,061 Chemical Financial Corp. 582 18,013 Harleysville Group Inc. 769 17,925 New Jersey Resources Corp. 497 17,912 Yellow Corp./1/ 597 17,838 Fuller (H.B.) Co. 734 17,814 Kilroy Realty Corp. 623 17,787 Brandywine Realty Trust 691 17,752 Fremont General Corp. 1,387 17,629 Applera Corp. - Applied Biosystems Group 790 17,625 Cousins Properties Inc. 635 17,621 Hearst-Argyle Television Inc./1/ 724 17,521 Unova Inc./1/ 1,196 17,521 Alaska Air Group Inc./1/ 628 17,471 American Financial Group Inc. 802 17,443 Capital Automotive 571 17,421 Southwest Gas Corp. 765 17,366 Regis Corp. 540 17,334 Kansas City Southern Industries Inc./1/ 1,555 17,214 Radio One Inc. Class D/1/ 1,198 17,203 FirstFed Financial Corp./1/ 435 17,182 Tootsie Roll Industries Inc. 552 17,112 WellPoint Health Networks Inc./1/ 222 17,112 Cleco Corp. 1,046 17,092 Casey's General Store Inc. 1,215 17,046 Hancock Holding Co. 345 17,026 Alleghany Corp./1/ 87 16,987 Black Box Corp. 424 16,879 Affiliated Computer Services Inc. Class A/1/ 346 16,847 Senior Housing Properties Trust 1,168 16,831 Technitrol Inc./1/ 912 16,790 Washington Group International Inc./1/ 623 16,790 Synovus Financial Corp. 671 16,768 National-Oilwell Inc./1/ 924 16,761 Commercial Net Lease Realty Inc. 982 16,723 USG Corp./1/ 970 16,723 Entertainment Properties Trust 555 16,650 Impac Mortgage Holdings Inc. 1,026 16,611 Thomas & Betts Corp./1/ 1,043 16,532 CheckFree Corp./1/ 826 16,520 First Citizens BancShares Inc. Class A 156 16,489 AMR Corp./1/ 1,440 16,488 Provident Bankshares Corp. 578 16,329 Renal Care Group Inc./1/ 476 16,255 Meredith Corp. 352 16,252 84 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Lincoln Electric Holding Inc. 724 $ 16,080 Outback Steakhouse Inc. 424 16,057 Northwest Airlines Corp./1/ 1,655 16,053 Lennox International Inc. 1,096 16,013 Mueller Industries Inc./1/ 627 15,957 CommScope Inc./1/ 1,323 15,955 Frontier Airlines Inc./1/ 968 15,933 Interstate Bakeries Corp. 1,061 15,915 SEACOR SMIT Inc./1/ 440 15,915 LNR Property Corp. 388 15,889 Longs Drug Stores Corp. 789 15,883 Newcastle Investment Corp. 689 15,840 AMCORE Financial Inc. 628 15,800 United National Bancorp 472 15,675 Viasys Healthcare Inc./1/ 775 15,655 Smith International Inc./1/ 434 15,615 MFA Mortgage Investments Inc. 1,634 15,556 Essex Property Trust Inc. 248 15,552 Millennium Chemicals Inc. 1,627 15,538 Actuant Corp. Class A/1/ 276 15,497 Aquila Inc./1/ 4,562 15,420 First Charter Corp. 785 15,386 Colonial Properties Trust 427 15,385 Regal Entertainment Group Class A 822 15,289 NetIQ Corp./1/ 1,278 15,259 Hovnanian Enterprises Inc. Class A/1/ 237 15,256 IHOP Corp. 463 15,210 Moog Inc. Class A/1/ 388 15,210 Waypoint Financial Corp. 760 15,200 Brown Shoe Co. Inc. 479 15,184 Sierra Pacific Resources/1/ 3,116 15,113 Chiquita Brands International Inc./1/ 852 15,080 BankAtlantic Bancorp Inc. Class A 1,057 15,062 Arkansas Best Corp. 547 15,042 BankUnited Financial Corp. Class A/1/ 711 14,988 CH Energy Group Inc. 339 14,916 Vintage Petroleum Inc. 1,370 14,906 BOK Financial Corp./1/ 394 14,842 CONMED Corp./1/ 719 14,840 Roadway Corp. 304 14,826 NBT Bancorp Inc. 729 14,762 Instinet Group Inc./1/ 3,091 14,741 Rite Aid Corp./1/ 2,852 14,716 Anworth Mortgage Asset Corp. 1,030 14,708 Darden Restaurants Inc. 769 14,611 Tecumseh Products Co. Class A 389 14,514 eFunds Corp./1/ 1,170 14,449 Jack in the Box Inc./1/ 811 14,436 Electro Scientific Industries Inc./1/ 685 14,433 WellChoice Inc./1/ 479 14,432 Capitol Federal Financial 491 14,416 Benchmark Electronics Inc./1/ 341 14,414 El Paso Electric Co./1/ 1,247 14,403 Granite Construction Inc. 771 14,402 Genesis Health Ventures Inc./1/ 593 14,380 Charming Shoppes Inc./1/ 2,516 14,366 Idex Corp. 392 14,284 Quanta Services Inc./1/ 1,727 14,282 Anixter International Inc./1/ 626 14,254 IDT Corp./1/ 806 14,250 Equifax Inc. 639 14,231 Dollar Thrifty Automotive Group Inc./1/ 625 14,200 Quanex Corp. 422 14,179 Insight Enterprises Inc./1/ 928 14,124 Sonic Automotive Inc. 587 14,123 Pepsi Bottling Group Inc. 685 14,097 Diamond Offshore Drilling Inc. 738 14,096 UniSource Energy Corp. 740 14,075 Corporate Office Properties Trust 758 14,031 Skyworks Solutions Inc./1/ 1,536 13,978 Lexington Corp. Properties Trust 729 13,968 Spinnaker Exploration Co./1/ 581 13,944 Community Health Systems Inc./1/ 641 13,910 RLI Corp. 422 13,892 Performance Food Group Co./1/ 340 13,841 G&K Services Inc. Class A 395 13,825 Emulex Corp./1/ 541 13,779 Allegheny Technologies Inc. 2,094 13,716 SunGard Data Systems Inc./1/ 520 13,681 SCHEDULES OF INVESTMENTS 85 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- USEC Inc. 2,094 $ 13,674 Reliance Steel & Aluminum Co. 615 13,647 Horace Mann Educators Corp. 937 13,596 Curtiss-Wright Corp. 192 13,559 DRS Technologies Inc./1/ 560 13,513 Journal Register Co./1/ 720 13,500 Ryan's Family Steak Houses Inc./1/ 1,053 13,468 Danaher Corp. 182 13,443 Community Bank System Inc. 306 13,436 Philadelphia Consolidated Holding Corp./1/ 290 13,398 Redwood Trust Inc. 316 13,398 Heritage Property Investment Trust Inc. 462 13,343 Jones Lang LaSalle Inc./1/ 720 13,320 Lin TV Corp. Class A/1/ 626 13,309 Texas Industries Inc. 541 13,309 FelCor Lodging Trust Inc. 1,284 13,302 Summit Properties Inc. 585 13,291 ABM Industries Inc. 938 13,273 Superior Industries International Inc. 324 13,138 Invacare Corp. 349 13,115 Seacoast Financial Services Corp. 633 13,109 Equity One Inc. 771 13,107 Mid-State Bancshares 585 13,028 US Oncology Inc./1/ 1,780 13,012 Wesco Financial Corp. 38 12,919 LaBranche & Co. Inc. 884 12,906 Werner Enterprises Inc. 561 12,853 Modine Manufacturing Co. 540 12,852 Pall Corp. 572 12,836 Laclede Group Inc. (The) 475 12,830 Student Loan Corp. 107 12,768 Westport Resources Corp./1/ 542 12,759 Perrigo Co. 1,001 12,743 Province Healthcare Co./1/ 982 12,717 Longview Fibre Co. 1,295 12,652 Empire District Electric Co. (The) 573 12,606 Ruddick Corp. 807 12,541 JLG Industries Inc. 1,084 12,488 Genlyte Group Inc. (The)/1/ 280 12,466 Hudson River Bancorp Inc. 387 12,434 Magnum Hunter Resources Inc./1/ 1,556 12,432 Schulman (A.) Inc. 783 12,418 Brocade Communications Systems Inc./1/ 2,377 12,408 Ball Corp. 229 12,366 Finish Line Inc. (The)/1/ 470 12,361 UICI/1/ 985 12,352 Worthington Industries Inc. 983 12,346 Ascential Software Corp./1/ 660 12,230 Aztar Corp./1/ 686 12,149 Blockbuster Inc. 577 12,117 Anchor BanCorp Wisconsin Inc. 516 12,116 Kirby Corp./1/ 422 12,111 EMCOR Group Inc./1/ 284 12,084 Joy Global Inc./1/ 768 12,058 Stewart Information Services Corp./1/ 427 12,058 Sunrise Senior Living Inc./1/ 459 12,040 Manitowoc Co. Inc. (The) 555 12,038 THQ Inc./1/ 731 12,003 Regal-Beloit Corp. 588 11,995 MAXIMUS Inc./1/ 347 11,954 AMLI Residential Properties Trust 456 11,947 Denbury Resources Inc./1/ 966 11,940 Houston Exploration Co./1/ 340 11,934 ValueClick Inc./1/ 1,419 11,934 American Management Systems Inc./1/ 925 11,794 Newport Corp./1/ 835 11,773 RAIT Investment Trust 512 11,756 Crown Castle International Corp./1/ 1,247 11,734 Jabil Circuit Inc./1/ 450 11,722 Six Flags Inc./1/ 2,228 11,719 Insight Communications Co. Inc./1/ 1,224 11,652 TierOne Corp./1/ 553 11,641 South Jersey Industries Inc. 307 11,620 Axcelis Technologies Inc./1/ 1,400 11,564 Timken Co. (The) 758 11,552 Price Communications Corp./1/ 930 11,532 Ionics Inc./1/ 470 11,496 86 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Selective Insurance Group Inc. 386 $ 11,487 Landry's Restaurants Inc. 555 11,433 UnitedGlobalCom Inc. Class A/1/ 1,870 11,426 Republic Bancorp Inc. 857 11,415 Lamar Advertising Co./1/ 389 11,413 Charter Municipal Mortgage Acceptance Co. 620 11,396 Commercial Metals Co. 620 11,389 Anthracite Capital Inc. 1,174 11,329 Griffon Corp./1/ 626 11,243 First Financial Corp. 186 11,234 Tesoro Petroleum Corp./1/ 1,327 11,226 Otter Tail Corp. 429 11,214 Saxon Capital Inc./1/ 654 11,210 Steelcase Inc. Class A 951 11,203 Meritage Corp./1/ 237 11,198 Michaels Stores Inc. 274 11,168 PS Business Parks Inc. 294 11,096 Mid-America Apartment Communities Inc. 367 11,076 Spartech Corp. 520 11,076 Unizan Financial Corp. 555 11,072 ShopKo Stores Inc./1/ 737 11,055 NCO Group Inc./1/ 471 11,054 Imagistics International Inc./1/ 380 11,012 EastGroup Properties Inc. 395 10,973 Woodward Governor Co. 251 10,971 Sterling Financial Corp. (Washington)/1/ 388 10,922 CNA Financial Corp./1/ 518 10,888 St. Mary Land & Exploration Co. 430 10,888 Cornerstone Realty Income Trust Inc. 1,346 10,876 UIL Holdings Corp. 310 10,847 First Merchants Corp. 423 10,837 Alfa Corp. 863 10,805 Overseas Shipholding Group Inc. 416 10,754 Wolverine World Wide Inc. 554 10,748 Solutia Inc. 2,693 10,745 International Multifoods Corp./1/ 460 10,741 TBC Corp./1/ 428 10,721 Cambrex Corp. 471 10,692 Carpenter Technology Corp. 497 10,656 GrafTech International Ltd./1/ 1,328 10,624 Connecticut Bankshares Inc. 207 10,609 Jacuzzi Brands Inc./1/ 1,709 10,596 Arch Chemicals Inc. 509 10,587 Triumph Group Inc./1/ 355 10,579 Medarex Inc./1/ 1,782 10,567 Kindred Healthcare Inc./1/ 282 10,561 National Health Investors Inc. 579 10,555 Handleman Co. 625 10,550 Spherion Corp./1/ 1,514 10,537 Net.B@nk Inc. 846 10,533 Varco International Inc./1/ 621 10,501 WesBanco Inc. 446 10,481 First Sentinel Bancorp Inc. 584 10,448 Sovran Self Storage Inc. 315 10,442 Cell Genesys Inc./1/ 829 10,429 First Bancorp 339 10,424 WebMD Corp./1/ 1,164 10,383 Bard (C.R.) Inc. 146 10,366 Gray Television Inc. 887 10,360 PSS World Medical Inc./1/ 1,168 10,360 Washington Real Estate Investment Trust 357 10,353 Florida East Coast Industries Inc. 360 10,350 Esterline Technologies Corp./1/ 535 10,320 Primedia Inc./1/ 3,611 10,291 First Community Bancorp 307 10,281 Oxford Industries Inc. 160 10,272 Central Garden & Pet Co./1/ 393 10,265 MCG Capital Corp. 656 10,240 First Financial Bancorp 693 10,222 Koger Equity Inc. 543 10,208 American States Water Co. 433 10,206 Group 1 Automotive Inc./1/ 295 10,189 Belden Inc. 583 10,185 PolyOne Corp. 2,590 10,179 School Specialty Inc./1/ 360 10,156 First Financial Bankshares Inc. 274 10,127 Corus Bankshares Inc. 189 10,111 SCHEDULES OF INVESTMENTS 87 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Phillips-Van Heusen Corp. 673 $ 10,102 Safeguard Scientifics Inc./1/ 2,966 10,084 Russell Corp. 618 10,073 Smith (A.O.) Corp. 359 10,056 S&T Bancorp Inc. 352 10,032 Glacier Bancorp Inc. 363 9,957 AMC Entertainment Inc./1/ 742 9,943 Iomega Corp./1/ 892 9,937 Stride Rite Corp. 920 9,936 Financial Federal Corp./1/ 325 9,916 Pier 1 Imports Inc. 514 9,889 Community First Bankshares Inc. 374 9,885 Warnaco Group Inc. (The)/1/ 634 9,884 Parkway Properties Inc. 226 9,876 Triad Guaranty Inc./1/ 201 9,865 Gold Bancorp Inc. 813 9,862 Time Warner Telecom Inc. Class A/1/ 1,063 9,843 PFF Bancorp Inc. 308 9,819 Stage Stores Inc./1/ 385 9,810 Molex Inc. 343 9,806 Shaw Group Inc. (The)/1/ 933 9,806 PanAmSat Corp./1/ 676 9,788 OM Group Inc./1/ 661 9,677 Terayon Communication Systems Inc./1/ 1,682 9,672 Pacific Capital Bancorp 313 9,543 Action Performance Companies Inc. 390 9,532 Jo-Ann Stores Inc./1/ 340 9,486 Argosy Gaming Co./1/ 388 9,467 Monaco Coach Corp./1/ 572 9,467 Church & Dwight Co. Inc. 270 9,447 Bandag Inc. 279 9,411 Sybase Inc./1/ 553 9,407 Datascope Corp. 305 9,376 Bedford Property Investors Inc. 361 9,368 Stewart Enterprises Inc. Class A/1/ 2,464 9,363 Tredegar Corp. 622 9,361 Alliant Techsystems Inc./1/ 194 9,322 Protein Design Labs Inc./1/ 671 9,300 Symbol Technologies Inc. 778 9,297 Pacific Northwest Bancorp 260 9,269 Trammell Crow Co./1/ 744 9,263 Ferro Corp. 433 9,249 Boca Resorts Inc. Class A/1/ 713 9,240 Hercules Inc./1/ 815 9,234 Systems & Computer Technology Corp./1/ 885 9,231 NACCO Industries Inc. 129 9,223 NCI Building Systems Inc./1/ 463 9,214 Fidelity Bankshares Inc. 350 9,191 Acxiom Corp./1/ 581 9,157 Stewart & Stevenson Services Inc. 608 9,132 Cox Radio Inc. Class A/1/ 417 9,120 FIRSTFED AMERICA BANCORP INC. 412 9,105 Rock-Tenn Co. Class A 624 9,098 General Communication Inc. Class A/1/ 1,092 9,085 West Pharmaceutical Services Inc. 290 9,080 Community Trust Bancorp Inc. 312 9,073 Credence Systems Corp./1/ 788 9,062 Universal Compression Holdings Inc./1/ 421 9,060 ITT Industries Inc. 151 9,036 Cash America International Inc. 550 9,020 Kramont Realty Trust 532 9,017 Simmons First National Corp. Class A 380 8,953 Greif Inc. Class A 342 8,892 Steel Dynamics Inc./1/ 586 8,872 Orthodontic Centers of America Inc./1/ 1,122 8,841 O'Reilly Automotive Inc./1/ 240 8,825 Cohu Inc. 451 8,822 Chesapeake Energy Corp. 817 8,807 Swift Transportation Co. Inc./1/ 388 8,804 Sterling Financial Corp. (Pennsylvania) 346 8,788 Range Resources Corp./1/ 1,283 8,776 Keystone Property Trust 432 8,752 Toro Co. 194 8,730 Irwin Financial Corp. 359 8,724 88 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Sola International Inc./1/ 545 $ 8,720 First Federal Capital Corp. 424 8,713 Chesapeake Corp. 386 8,700 Schweitzer-Mauduit International Inc. 344 8,686 Taubman Centers Inc. 443 8,683 Albany Molecular Research Inc./1/ 586 8,679 National Western Life Insurance Co. Class A/1/ 63 8,654 SPS Technologies Inc./1/ 192 8,640 Sun Communities Inc. 219 8,629 Coherent Inc./1/ 350 8,620 Century Business Services Inc./1/ 2,032 8,616 Aviall Inc./1/ 695 8,604 Roto-Rooter Inc. 242 8,603 Burlington Coat Factory Warehouse Corp. 458 8,565 Infinity Property & Casualty Corp. 303 8,517 RadiSys Corp./1/ 472 8,515 Glimcher Realty Trust 404 8,512 Paxar Corp./1/ 665 8,512 Hanger Orthopedic Group Inc./1/ 551 8,458 Jacobs Engineering Group Inc./1/ 187 8,434 Sports Authority Inc. (The)/1/ 268 8,431 Weis Markets Inc. 247 8,400 Universal Forest Products Inc. 345 8,373 Mine Safety Appliances Co. 153 8,357 Local Financial Corp./1/ 465 8,319 Integra Bank Corp. 433 8,318 K2 Inc./1/ 560 8,316 Applied Industrial Technologies Inc. 418 8,306 Nuevo Energy Co./1/ 457 8,304 Gardner Denver Inc./1/ 395 8,299 Fleetwood Enterprises Inc./1/ 893 8,278 Peoples Bancorp Inc. 309 8,269 Presidential Life Corp. 546 8,261 Hain Celestial Group Inc./1/ 454 8,231 Swift Energy Co./1/ 582 8,212 Watsco Inc. 428 8,179 Cato Corp. Class A 405 8,169 Methode Electronics Inc. Class A 686 8,102 Sycamore Networks Inc./1/ 1,649 8,080 International Speedway Corp. Class A 184 8,076 U.S. Restaurant Properties Inc. 497 8,076 Park Electrochemical Corp. 354 8,053 First Essex Bancorp Inc. 158 8,041 BMC Software Inc./1/ 576 8,024 Bank Mutual Corp. 189 8,023 United Community Financial Corp. 810 8,019 Genesco Inc./1/ 498 7,998 Equity Inns Inc. 1,057 7,959 Federal Signal Corp. 532 7,927 Consolidated Graphics Inc./1/ 311 7,909 SOURCECORP Inc./1/ 340 7,905 Interactive Data Corp./1/ 500 7,900 Incyte Corp./1/ 1,713 7,897 TriQuint Semiconductor Inc./1/ 1,408 7,885 Univision Communications Inc. Class A/1/ 246 7,871 National Penn Bancshares Inc. 285 7,868 Texas Genco Holdings Inc. 330 7,854 State Auto Financial Corp. 311 7,843 CB Bancshares Inc. 128 7,840 Hawthorne Financial Corp./1/ 195 7,831 Cabot Oil & Gas Corp. 301 7,826 Lone Star Steakhouse & Saloon Inc. 372 7,775 Investors Real Estate Trust 792 7,770 Kaydon Corp. 325 7,715 Investment Technology Group Inc./1/ 402 7,710 Alderwoods Group Inc./1/ 992 7,688 Valmont Industries Inc. 388 7,679 URS Corp./1/ 394 7,644 West Coast Bancorp 391 7,636 Alexion Pharmaceuticals Inc./1/ 458 7,635 IBERIABANK Corp. 145 7,630 GTECH Holdings Corp. 178 7,627 Marcus Corp. 499 7,615 Offshore Logistics Inc./1/ 373 7,572 Prime Hospitality Corp./1/ 869 7,552 Glatfelter Co. 638 7,516 Microsemi Corp./1/ 493 7,513 SCHEDULES OF INVESTMENTS 89 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Schnitzer Steel Industries Inc. Class A 250 $ 7,508 Donaldson Co. Inc. 139 7,492 Kaman Corp. Class A 577 7,478 Meristar Hospitality Corp. 1,048 7,420 Laboratory Corp. of America Holdings/1/ 258 7,405 Insituform Technologies Inc. Class A/1/ 416 7,388 Deltic Timber Corp. 255 7,375 Kimball International Inc. Class B 503 7,374 Plains Exploration & Production Co./1/ 591 7,370 GBC Bancorp 192 7,363 Pharmacopeia Inc./1/ 579 7,353 DIMON Inc. 1,062 7,328 Armor Holdings Inc./1/ 437 7,320 LaSalle Hotel Properties 422 7,313 Hecla Mining Co./1/ 1,394 7,305 Glenborough Realty Trust Inc. 387 7,299 Olin Corp. 461 7,293 United Auto Group Inc./1/ 317 7,291 First Republic Bank 236 7,276 Primus Telecommunications Group Inc./1/ 1,073 7,243 Key Energy Services Inc./1/ 749 7,228 Robert Mondavi Corp. (The) Class A/1/ 233 7,218 Bel Fuse Inc. Class B 273 7,213 AMN Healthcare Services Inc./1/ 444 7,211 Walter Industries Inc. 672 7,211 Analogic Corp. 150 7,200 Lawson Software Inc./1/ 1,015 7,196 Global Industries Ltd./1/ 1,575 7,166 Tower Automotive Inc./1/ 1,589 7,151 Commerce Bancorp Inc. 149 7,139 Tompkins Trustco Inc. 156 7,137 Argonaut Group Inc. 548 7,124 Troy Financial Corp. 203 7,107 Zygo Corp./1/ 432 7,085 Jakks Pacific Inc./1/ 581 7,082 JDA Software Group Inc./1/ 475 7,063 American Eagle Outfitters Inc./1/ 475 7,058 Saul Centers Inc. 265 7,036 GenCorp. Inc. 786 7,035 Hologic Inc./1/ 515 7,019 Peoples Holding Co. 153 6,968 Exar Corp./1/ 493 6,966 Stillwater Mining Co./1/ 1,101 6,936 S1 Corp./1/ 1,369 6,913 Allegiant Bancorp Inc. 341 6,888 1st Source Corp. 360 6,880 FBL Financial Group Inc. Class A 279 6,875 Apogee Enterprises Inc. 664 6,852 California Water Service Group 265 6,840 Republic Bancshares Inc. 239 6,826 United Fire & Casualty Co. 186 6,800 MB Financial Inc. 153 6,793 Centex Construction Products Inc. 152 6,790 Crompton Corp. 1,168 6,786 Russ Berrie & Co. Inc. 201 6,772 SWS Group Inc. 342 6,741 REMEC Inc./1/ 660 6,732 Rent-A-Center Inc./1/ 207 6,686 Gaylord Entertainment Co./1/ 272 6,678 Ameron International Corp. 202 6,668 Omega Financial Corp. 202 6,666 Triarc Companies Inc. Class B 641 6,666 Delta & Pine Land Co. 288 6,627 Topps Co. (The) 678 6,611 Andrx Group/1/ 357 6,608 WSFS Financial Corp. 156 6,583 City Bank 203 6,579 Agilysys Inc. 750 6,577 Integrated Silicon Solution Inc./1/ 661 6,577 Ocular Sciences Inc./1/ 295 6,573 Thomas Industries Inc. 230 6,560 Mid Atlantic Realty Trust 312 6,552 ESS Technology Inc./1/ 607 6,543 ADVO Inc./1/ 157 6,536 First Financial Holdings Inc. 216 6,515 Friedman's Inc. 467 6,515 90 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Estee Lauder Companies Inc. Class A 191 $ 6,513 Brookfield Homes Corp. 351 6,504 Valhi Inc. 577 6,497 SonicWALL Inc./1/ 1,122 6,496 Quantum Corp./1/ 2,108 6,493 Universal Health Realty Income Trust 239 6,489 Perot Systems Corp. Class A/1/ 647 6,470 Hanover Compressor Co./1/ 649 6,425 Standex International Corp. 262 6,367 DoubleClick Inc./1/ 591 6,365 MemberWorks Inc./1/ 200 6,364 CIRCOR International Inc. 331 6,355 Bowne & Co. Inc. 424 6,339 Praecis Pharmaceuticals Inc./1/ 942 6,321 C&D Technologies Inc. 334 6,319 Town & Country Trust (The) 269 6,319 AMCOL International Corp. 511 6,316 United States Cellular Corp./1/ 217 6,315 Dress Barn Inc./1/ 459 6,288 Nu Skin Enterprises Inc. Class A 493 6,286 Homestore.com Inc./1/ 2,269 6,285 Silicon Storage Technology Inc./1/ 718 6,283 Robbins & Myers Inc. 282 6,272 Atlantic Coast Airlines Holdings Inc./1/ 736 6,263 Palm Inc./1/ 320 6,256 First Community Bancshares Inc. 177 6,234 Central Vermont Public Service Corp. 281 6,233 First Place Financial Corp. 351 6,230 Urstadt Biddle Properties Inc. Class A 461 6,224 Extreme Networks Inc./1/ 985 6,215 Applera Corp. - Celera Genomics Group/1/ 531 6,207 Ditech Communications Corp./1/ 707 6,207 InterCept Inc./1/ 452 6,179 Lance Inc. 621 6,173 Ramco-Gershenson Properties Trust 242 6,159 City Holding Co. 185 6,142 Interface Inc. Class A/1/ 1,132 6,135 Wellman Inc. 816 6,128 Buckeye Technologies Inc./1/ 673 6,118 Cablevision Systems Corp./1/ 338 6,118 Correctional Properties Trust 245 6,113 Wet Seal Inc. Class A/1/ 608 6,110 RailAmerica Inc./1/ 709 6,097 Haverty Furniture Companies Inc. 333 6,087 Bally Total Fitness Holding Corp./1/ 702 6,072 Maxwell Shoe Co. Inc. Class A/1/ 422 6,060 LSI Industries Inc. 430 6,059 Roxio Inc./1/ 698 6,052 Grace (W.R.) & Co./1/ 1,951 6,048 Keane Inc./1/ 473 6,045 MRV Communications Inc./1/ 2,148 6,036 Barnes Group Inc. 232 6,023 Network Associates Inc./1/ 437 6,013 Innkeepers USA Trust 691 6,012 Cooper Cameron Corp./1/ 130 6,007 EDO Corp. 296 5,994 Humboldt Bancorp 382 5,994 Pulitzer Inc. 115 5,991 WCI Communities Inc./1/ 363 5,990 Dobson Communications Corp. Class A/1/ 732 5,944 NUI Corp. 396 5,920 Brookstone Inc./1/ 298 5,919 Advanta Corp. Class B 549 5,907 Stamps.com Inc./1/ 1,015 5,907 Pope & Talbot Inc. 390 5,897 Tenneco Automotive Inc./1/ 935 5,881 MTS Systems Corp. 385 5,860 Caraustar Industries Inc./1/ 668 5,832 Berry Petroleum Co. Class A 319 5,831 Wynn Resorts Ltd./1/ 320 5,818 Harvest Natural Resources Inc./1/ 942 5,793 BancFirst Corp. 109 5,777 J&J Snack Foods Corp./1/ 166 5,777 Farmer Brothers Co. 18 5,766 SCHEDULES OF INVESTMENTS 91 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Universal American Financial Corp./1/ 651 $ 5,761 DST Systems Inc./1/ 153 5,753 SJW Corp. 68 5,746 Willow Grove Bancorp Inc. 357 5,744 RTI International Metals Inc./1/ 545 5,733 American Physicians Capital Inc./1/ 206 5,723 Bank of Granite Corp. 305 5,719 Washington Trust Bancorp Inc. 238 5,714 Union Bankshares Corp. 188 5,710 Chateau Communities Inc. 191 5,684 St. Francis Capital Corp. 193 5,682 Frontier Financial Corp. 189 5,651 DuPont Photomasks Inc./1/ 248 5,632 Choice Hotels International Inc./1/ 194 5,630 Flushing Financial Corp. 270 5,627 Columbia Banking System Inc. 320 5,626 Entravision Communications Corp./1/ 590 5,605 Comstock Resources Inc./1/ 419 5,598 Aaron Rents Inc. 267 5,594 Southern Financial Bancorp Inc. 142 5,592 ESCO Technologies Inc./1/ 123 5,568 William Lyon Homes Inc./1/ 111 5,567 Vail Resorts Inc./1/ 389 5,563 Central Pacific Financial Corp. 227 5,561 Banner Corp. 268 5,548 BSB Bancorp Inc. 200 5,542 PMA Capital Corp. Class A 442 5,538 Universal Health Services Inc. Class B/1/ 111 5,489 Asbury Automotive Group Inc./1/ 329 5,478 RehabCare Group Inc./1/ 321 5,473 Duane Reade Inc./1/ 343 5,471 Alabama National Bancorp 115 5,462 First National Corp. 206 5,459 Riggs National Corp. 346 5,450 Horizon Financial Corp. 337 5,439 Arctic Cat Inc. 281 5,432 Second Bancorp Inc. 199 5,423 Capital City Bank Group Inc. 142 5,419 Artesyn Technologies Inc./1/ 711 5,389 Friedman, Billings, Ramsey Group, Inc. Class A 312 5,382 Georgia Gulf Corp. 230 5,370 InfoSpace Inc./1/ 262 5,347 ActivCard Corp./1/ 651 5,338 UniFirst Corp. 225 5,319 Community Banks Inc. 160 5,296 Manufactured Home Communities Inc. 135 5,289 Harbor Florida Bancshares Inc. 198 5,279 Odyssey Re Holdings Corp. 256 5,268 Haemonetics Corp./1/ 223 5,265 PRG-Schultz International Inc./1/ 922 5,237 First Indiana Corp. 283 5,236 Encore Acquisition Co./1/ 242 5,215 Komag Inc./1/ 297 5,203 Petroleum Development Corp./1/ 431 5,163 Berkshire Hills Bancorp Inc. 153 5,155 Skyline Corp. 161 5,155 Cornell Companies Inc./1/ 313 5,149 New England Business Service Inc. 193 5,138 CDI Corp. 189 5,109 CTS Corp. 415 5,109 Ennis Business Forms Inc. 380 5,096 Great Lakes REIT Inc. 320 5,094 Rayovac Corp./1/ 347 5,066 AAR Corp./1/ 630 5,053 Cascade Corp. 228 5,027 Ethyl Corp./1/ 399 5,019 Movado Group Inc. 229 5,015 Financial Institutions Inc. 229 5,004 Cubic Corp. 199 4,999 Midas Inc./1/ 379 4,988 Parker Drilling Co./1/ 2,109 4,977 D&E Communications Inc. 349 4,949 Pathmark Stores Inc./1/ 709 4,942 AK Steel Holding Corp./1/ 2,464 4,928 Sybron Dental Specialties Inc./1/ 195 4,889 Pilgrim's Pride Corp. Class B 391 4,887 EnPro Industries Inc./1/ 505 4,873 FloridaFirst Bancorp Inc. 185 4,867 92 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Kansas City Life Insurance Co. 106 $ 4,855 Atwood Oceanics Inc./1/ 202 4,846 Intertan Inc./1/ 527 4,822 Mission West Properties Inc. 390 4,820 Navigant International Inc./1/ 344 4,819 Calgon Carbon Corp. 851 4,791 ITLA Capital Corp./1/ 112 4,772 Alloy Inc./1/ 852 4,771 CT Communications Inc. 422 4,769 Plexus Corp./1/ 306 4,755 Maxygen Inc./1/ 466 4,753 CCBT Financial Companies Inc. 189 4,744 Vans Inc./1/ 435 4,742 Baldwin & Lyons Inc. Class B 203 4,740 Elizabeth Arden Inc./1/ 287 4,730 Central Parking Corp. 386 4,728 Immunogen Inc./1/ 1,062 4,726 HEICO Corp. 346 4,706 Energy Partners Ltd./1/ 423 4,704 Citizens First Bancorp Inc. 227 4,699 Stanley Furniture Co. Inc. 154 4,699 Camden National Corp. 159 4,692 4Kids Entertainment Inc./1/ 222 4,684 Westcorp Inc. 134 4,683 Gorman-Rupp Co. (The) 207 4,680 PAREXEL International Corp./1/ 305 4,673 R&G Financial Corp. Class B 160 4,672 Silicon Graphics Inc./1/ 4,847 4,653 Genesee & Wyoming Inc. Class A/1/ 196 4,647 Gene Logic Inc./1/ 988 4,644 Unifi Inc./1/ 966 4,637 WilTel Communications Inc./1/ 290 4,634 Sipex Corp./1/ 590 4,632 Vital Sign Inc. 158 4,629 Sandy Spring Bancorp Inc. 142 4,618 MasTec Inc./1/ 476 4,617 Myers Industries Inc. 461 4,615 Getty Realty Corp. 188 4,606 Emmis Communications Corp./1/ 228 4,601 American Mortgage Acceptance Corp. 278 4,598 Lexicon Genetics Inc./1/ 889 4,587 AmericanWest Bancorporation/1/ 250 4,585 Magna Entertainment Corp. Class A/1/ 1,101 4,580 Pericom Semiconductor Corp./1/ 458 4,580 Interchange Financial Services Corp. 222 4,558 TeleTech Holdings Inc./1/ 716 4,547 Flagstar Bancorp Inc. 197 4,521 InFocus Corp./1/ 930 4,520 GameStop Corp./1/ 283 4,500 Angelica Corp. 236 4,484 Herley Industries Inc./1/ 255 4,468 EMS Technologies Inc./1/ 262 4,449 Photronics Inc./1/ 209 4,443 Input/Output Inc./1/ 1,134 4,434 Umpqua Holdings Corp. 233 4,434 Coachmen Industries Inc. 378 4,426 Dade Behring Holdings Inc./1/ 156 4,407 Exchange National Bancshares Inc. 127 4,401 Avocent Corp./1/ 145 4,392 Aftermarket Technology Corp./1/ 384 4,381 Pinnacle Entertainment Inc./1/ 624 4,368 Rofin-Sinar Technologies Inc./1/ 208 4,366 Capital Corporation of the West/1/ 135 4,351 Tennant Co. 118 4,347 CIBER Inc./1/ 571 4,340 Penn Engineering & Manufacturing Corp. 281 4,330 Intermagnetics General Corp./1/ 193 4,315 Wackenhut Corrections Corp./1/ 253 4,314 Neuberger Berman Inc. 103 4,313 Electro Rent Corp./1/ 344 4,303 Yardville National Bancorp 204 4,274 Ocwen Financial Corp./1/ 933 4,245 Cascade Natural Gas Corp. 216 4,234 First State Bancorp 143 4,234 SCS Transportation Inc./1/ 278 4,198 Octel Corp. 240 4,176 Orbital Sciences Corp./1/ 449 4,167 Acadia Realty Trust 379 4,161 SCHEDULES OF INVESTMENTS 93 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Wayne Bancorp Inc. 146 $ 4,161 TriCo Bancshares 145 4,147 MainSource Financial Group Inc. 160 4,146 Clark Inc./1/ 309 4,122 CSK Auto Corp./1/ 267 4,117 Midland Co. (The) 193 4,111 Brush Engineered Materials Inc./1/ 401 4,110 Cross Country Healthcare Inc./1/ 291 4,100 Building Materials Holdings Corp. 311 4,074 Blair Corp. 195 4,056 Southwest Bancorp Inc. 240 4,044 Gerber Scientific Inc./1/ 568 4,033 Southwest Water Co. 285 4,010 Avatar Holdings/1/ 125 3,997 Winston Hotels Inc. 438 3,986 Farmers Capital Bank Corp. 122 3,963 Integrated Defense Technologies Inc./1/ 236 3,960 Southern Peru Copper Corp. 179 3,959 Sauer-Danfoss Inc. 280 3,948 Standard Microsystems Corp./1/ 146 3,939 Astec Industries Inc./1/ 382 3,935 Network Equipment Technologies Inc./1/ 430 3,934 Libbey Inc. 141 3,921 Siliconix Inc./1/ 78 3,919 National Presto Industries Inc. 114 3,915 World Wrestling Entertainment Inc. 390 3,908 Matrix Service Co./1/ 220 3,907 EnergySouth Inc. 121 3,906 Penn-America Group Inc. 259 3,880 Dril-Quip Inc./1/ 229 3,870 Steven Madden Ltd./1/ 204 3,870 National Processing Inc./1/ 200 3,864 CNA Surety Corp./1/ 384 3,859 E.piphany Inc./1/ 773 3,857 Entercom Communications Corp./1/ 86 3,855 Wilsons The Leather Experts Inc./1/ 479 3,827 EarthLink Inc./1/ 464 3,819 Bay View Capital Corp./1/ 629 3,818 Stein Mart Inc./1/ 698 3,818 Goody's Family Clothing Inc. 387 3,816 D&K Healthcare Resources Inc. 271 3,810 Theragenics Corp./1/ 668 3,808 Republic Bancorp Inc. Class A 200 3,802 Boykin Lodging Co. 458 3,774 First Oak Brook Bancshares Class A 151 3,760 CFS Bancorp Inc. 269 3,744 Watts Industries Inc. Class A 212 3,735 Healthcare Services Group Inc. 226 3,729 LTC Properties Inc. 322 3,729 Bassett Furniture Industries Inc. 274 3,713 Firstbank Corp. 117 3,709 Klamath First Bancorp Inc. 171 3,702 Horizon Offshore Inc./1/ 894 3,674 Cirrus Logic Inc./1/ 664 3,672 ABC Bancorp 235 3,668 Coastal Bancorp Inc. 115 3,651 Cathay Bancorp Inc. 82 3,628 Tupperware Corp. 271 3,626 Apex Mortgage Capital Inc. 673 3,621 Concord Camera Corp./1/ 340 3,621 Guilford Pharmaceuticals Inc./1/ 582 3,603 Sanders Morris Harris Group Inc. 406 3,601 Lufkin Industries Inc. 150 3,600 Dura Automotive Systems Inc./1/ 378 3,599 Manugistics Group Inc./1/ 656 3,595 SoundView Technology Group Inc./1/ 363 3,572 Arris Group Inc./1/ 620 3,565 Oshkosh Truck Corp. 90 3,565 BancTrust Financial Group Inc. 236 3,564 Central Coast Bancorp/1/ 211 3,564 Advanced Marketing Services Inc. 348 3,557 21st Century Insurance Group 258 3,555 Harland (John H.) Co. 134 3,547 MedQuist Inc./1/ 183 3,543 NBC Capital Corp. 146 3,539 OMNOVA Solutions Inc./1/ 1,008 3,538 Prosperity Bancshares Inc. 166 3,537 Camco Financial Corp. 208 3,536 CRIIMI MAE Inc./1/ 340 3,529 94 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- State Financial Services Corp. Class A 142 $ 3,519 Stepan Co. 154 3,508 Finisar Corp./1/ 1,557 3,503 Great Southern Bancorp Inc. 90 3,503 Meridian Resource Corp. (The)/1/ 811 3,495 Jarden Corp./1/ 92 3,473 Sequa Corp. Class A/1/ 81 3,468 USB Holding Co. Inc. 197 3,463 Footstar Inc./1/ 510 3,448 Tier Technologies Inc. Class B/1/ 387 3,448 Claire's Stores Inc. 103 3,446 Middlesex Water Co. 140 3,431 Department 56 Inc./1/ 270 3,429 Pomeroy IT Solutions Inc. 270 3,429 Steak n Shake Company (The)/1/ 230 3,427 McGrath Rentcorp 122 3,410 Rent-Way Inc./1/ 635 3,410 Cable Design Technologies Corp./1/ 426 3,408 Alliance Semiconductor Corp./1/ 626 3,405 Medallion Financial Corp. 539 3,396 C&F Financial Corp. 75 3,391 Sun Bancorp Inc. (New Jersey)/1/ 154 3,388 LSB Bancshares Inc. 184 3,386 EverTrust Financial Group Inc. 119 3,377 WMS Industries Inc./1/ 149 3,376 Veritas DGC Inc./1/ 422 3,368 Heartland Financial USA Inc. 121 3,364 WD-40 Co. 106 3,359 Metris Companies Inc. 815 3,358 First Busey Corp. Class A 130 3,354 Computer Horizons Corp./1/ 905 3,348 Anaren Inc./1/ 261 3,330 Heritage Commerce Corp./1/ 310 3,326 McLeodUSA Inc. Class A/1/ 2,387 3,318 FNB Corp. (Virginia) 122 3,316 Lakeland Bancorp Inc. 208 3,316 Lydall Inc./1/ 276 3,315 Tweeter Home Entertainment Group Inc./1/ 429 3,295 Infonet Services Corp. Class B/1/ 1,570 3,266 Accredited Home Lenders Holding Co./1/ 150 3,256 Seabulk International Inc./1/ 444 3,237 Redback Networks Inc./1/ 5,305 3,236 Mindspeed Technologies Inc./1/ 600 3,234 Mentor Graphics Corp./1/ 184 3,226 Corvis Corp./1/ 2,492 3,215 Hanmi Financial Corp. 161 3,210 Gabelli Asset Management Inc. Class A/1/ 90 3,209 GA Financial Inc. 118 3,201 Volt Information Sciences Inc./1/ 194 3,201 Merchants Bancshares Inc. 113 3,196 Churchill Downs Inc. 84 3,190 Franklin Electric Co. Inc. 57 3,174 MutualFirst Financial Inc. 124 3,174 TIBCO Software Inc./1/ 593 3,173 Restoration Hardware Inc./1/ 544 3,161 O'Charley's Inc./1/ 212 3,144 Lakeland Financial Corp. 93 3,141 Massbank Corp. 85 3,125 Patina Oil & Gas Corp. 86 3,117 Harte-Hanks Inc. 169 3,116 Cubist Pharmaceuticals Inc./1/ 288 3,108 Crown American Realty Trust 260 3,094 Perini Corp./1/ 451 3,094 Interwoven Inc./1/ 1,167 3,093 CSS Industries Inc. 120 3,090 Valence Technology Inc./1/ 905 3,086 Insurance Auto Auctions Inc./1/ 274 3,082 Texas Regional Bancshares Inc. Class A 91 3,075 Savient Pharmaceuticals Inc./1/ 608 3,070 NS Group Inc./1/ 475 3,068 American Medical Security Group Inc./1/ 151 3,067 Lawson Products Inc. 114 3,061 Lithia Motors Inc. Class A 153 3,055 Century Aluminum Co./1/ 281 3,049 Buckle Inc. (The)/1/ 158 3,043 MSC.Software Corp./1/ 422 3,038 SCHEDULES OF INVESTMENTS 95 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Perry Ellis International Inc./1/ 106 $ 3,026 SBS Technologies Inc./1/ 278 3,016 Transkaryotic Therapies Inc./1/ 288 3,010 Alico Inc. 107 2,997 Heidrick & Struggles International Inc./1/ 177 2,997 Global Power Equipment Group Inc./1/ 567 2,988 Frontier Oil Corp. 203 2,984 RC2 Corp./1/ 155 2,978 Landauer Inc. 84 2,976 OshKosh B'Gosh Inc. Class A 115 2,958 ESB Financial Corp. 203 2,956 Nautilus Group Inc. (The) 234 2,953 Omega Healthcare Investors Inc./1/ 382 2,934 Capstead Mortgage Corp. 236 2,933 CLARCOR Inc. 75 2,925 Wind River Systems Inc./1/ 514 2,925 Parkvale Financial Corp. 115 2,904 Hampshire Group Ltd./1/ 91 2,897 Northern States Financial Corp. 100 2,881 Sterling Bancshares Inc. 240 2,863 Woodhead Industries Inc. 190 2,860 Applica Inc./1/ 472 2,856 Courier Corp. 56 2,851 Sykes Enterprises Inc./1/ 430 2,847 American West Holdings Corp. Class B/1/ 292 2,841 M&F Worldwide Corp./1/ 294 2,831 Lattice Semiconductor Corp./1/ 398 2,830 Hooker Furniture Corp. 83 2,826 Boyds Collection Ltd. (The)/1/ 626 2,823 Security Bank Corp. 95 2,803 First Defiance Financial Corp. 120 2,796 Casella Waste Systems Inc. Class A/1/ 225 2,794 Sterling Bancorp (New York) 103 2,772 Verso Technologies Inc./1/ 748 2,768 Enstar Group Inc./1/ 70 2,747 Dave & Buster's Inc./1/ 265 2,729 Dominion Homes Inc./1/ 106 2,727 Watson Wyatt & Co. Holdings/1/ 121 2,724 Silgan Holdings Inc./1/ 85 2,720 Tanger Factory Outlet Centers Inc. 74 2,720 Nordson Corp. 105 2,718 CuraGen Corp./1/ 538 2,706 BISYS Group Inc. (The)/1/ 205 2,696 iGATE Corp./1/ 457 2,696 Financial Industries Corp. 189 2,684 Grant Prideco Inc./1/ 263 2,680 Steinway Musical Instruments Inc./1/ 151 2,680 Capitol Bancorp Ltd. 100 2,675 Powerwave Technologies Inc./1/ 402 2,661 Resource America Inc. Class A 224 2,661 Ducommun Inc./1/ 163 2,657 Computer Network Technology Corp./1/ 306 2,656 Symmetricom Inc./1/ 419 2,652 Talbots Inc. (The) 76 2,649 Santander BanCorp 141 2,647 MKS Instruments Inc./1/ 122 2,643 CEC Entertainment Inc./1/ 67 2,626 PDI Inc./1/ 107 2,624 Regent Communications Inc./1/ 429 2,617 Semitool Inc./1/ 328 2,611 TransMontaigne Inc./1/ 435 2,593 LodgeNet Entertainment Corp./1/ 167 2,588 Hutchinson Technology Inc./1/ 78 2,582 Oak Hill Financial Inc. 89 2,580 Milacron Inc. 1,120 2,576 First of Long Island Corp. 68 2,570 National Bankshares Inc. 60 2,567 Inverness Medical Innovations Inc./1/ 101 2,565 Nabi Biopharmaceuticals/1/ 304 2,563 Rex Stores Corp./1/ 196 2,558 Associated Estates Realty Corp. 392 2,556 Taylor Capital Group Inc. 110 2,539 Matria Healthcare Inc./1/ 147 2,537 Brooks Automation Inc./1/ 121 2,529 Partners Trust Financial Group Inc. 115 2,524 Kelly Services Inc. Class A 101 2,519 Commercial Bankshares Inc. 84 2,517 96 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Westfield Financial Inc. 112 $ 2,500 Ampco-Pittsburgh Corp. 208 2,494 Standard Register Co. (The) 150 2,490 Greater Community Bancorp 157 2,481 Compucom Systems Inc./1/ 587 2,465 Material Sciences Corp. 241 2,463 Maritrans Inc. 164 2,460 Metro One Telecommunications Inc./1/ 707 2,460 Owens & Minor Inc. 102 2,458 Coca-Cola Bottling Co. Consolidated 49 2,457 Monro Muffler Brake Inc./1/ 83 2,457 Isle of Capri Casinos Inc./1/ 124 2,456 Safety Insurance Group Inc. 158 2,452 Midway Games Inc./1/ 828 2,451 Advent Software Inc./1/ 152 2,446 PennFed Financial Services Inc. 84 2,444 Schawk Inc. 204 2,432 Great American Financial Resources Inc. 167 2,418 ProAssurance Corp./1/ 93 2,402 Seacoast Banking Corp. of Florida 138 2,401 Gundle/SLT Environmental Inc./1/ 156 2,395 Southside Bancshares Inc. 148 2,394 Tarragon Realty Investors Inc./1/ 157 2,394 Summit Bancshares Inc. 87 2,393 JNI Corp./1/ 343 2,384 Cerner Corp./1/ 77 2,377 Interland Inc./1/ 309 2,376 Turnstone Systems Inc./1/ 828 2,376 Guess ? Inc./1/ 266 2,367 WatchGuard Technologies Inc./1/ 440 2,354 MarineMax Inc./1/ 162 2,351 Northwest Bancorp Inc. 128 2,351 Global Payments Inc. 65 2,340 deCODE genetics Inc./1/ 496 2,336 American Woodmark Corp. 52 2,328 Right Management Consultants Inc./1/ 128 2,314 First Horizon Pharmaceutical Corp./1/ 360 2,304 Credit Acceptance Corp./1/ 202 2,293 Interpool Inc. 144 2,291 Oil States International Inc./1/ 180 2,284 Ingles Markets Inc. Class A 233 2,283 Nash Finch Co. 147 2,278 Whitehall Jewellers Inc./1/ 201 2,253 Stellent Inc./1/ 289 2,243 First United Corp. 99 2,232 McMoRan Exploration Co./1/ 213 2,232 NN Inc. 173 2,225 Parametric Technology Corp./1/ 712 2,221 FNB Corp. 88 2,196 National Health Realty Inc. 144 2,177 Petroleum Helicopters Inc./1/ 75 2,175 Royal Bancshares of Pennsylvania Class A 81 2,175 Warwick Community Bancorp 77 2,169 Aaon Inc./1/ 132 2,167 SEMCO Energy Inc. 469 2,157 Ambassadors International Inc. 176 2,156 Strattec Security Corp./1/ 45 2,145 Greenbrier Companies Inc./1/ 158 2,135 NYFIX Inc./1/ 381 2,134 Curative Health Services Inc./1/ 119 2,127 PetroCorp Inc./1/ 158 2,127 Palm Harbor Homes Inc./1/ 124 2,124 Sizeler Property Investors Inc. 202 2,117 Crawford & Co. Class B 300 2,106 Alamo Group Inc. 147 2,096 Steris Corp./1/ 91 2,095 American National Bankshares Inc. 83 2,073 State Bancorp Inc. 104 2,072 First Albany Companies Inc. 161 2,053 PICO Holdings Inc./1/ 157 2,052 Citizens South Banking Corp. 138 2,041 Heartland Express Inc. 84 2,018 Nature's Sunshine Products Inc. 243 2,017 Cumulus Media Inc. Class A/1/ 118 2,012 Omega Protein Corp./1/ 307 2,011 iPayment Holdings Inc./1/ 88 2,003 Sun Bancorp Inc. (Pennsylvania) 108 2,000 Genesis Microchip Inc./1/ 178 1,995 SCHEDULES OF INVESTMENTS 97 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Charlotte Russe Holding Inc./1/ 193 $ 1,986 ParthusCeva Inc./1/ 231 1,984 Technical Olympic USA Inc./1/ 72 1,980 Young Broadcasting Inc. Class A/1/ 101 1,979 Sypris Solutions Inc. 144 1,977 Coastal Financial Corp. 141 1,970 Korn/Ferry International/1/ 238 1,963 WESCO International Inc./1/ 374 1,956 Martha Stewart Living Omnimedia Inc. Class A/1/ 211 1,952 Price Legacy Corporation/1/ 557 1,949 Chesapeake Utilities Corp. 85 1,948 Patriot Bank Corp. 103 1,936 Center Bancorp Inc. 120 1,928 Wausau-Mosinee Paper Corp. 157 1,917 Powell Industries Inc./1/ 114 1,915 Identix Inc./1/ 364 1,904 Columbia Bancorp 71 1,903 Pediatrix Medical Group Inc./1/ 41 1,888 Systemax Inc./1/ 284 1,886 Quaker Chemical Corp. 81 1,884 Riviana Foods Inc. 66 1,874 AsiaInfo Holdings Inc./1/ 275 1,853 Independent Bank Corp. (Michigan) 63 1,845 Hudson Highland Group Inc./1/ 95 1,828 Chronimed Inc./1/ 200 1,826 Aether Systems Inc./1/ 399 1,823 First M&F Corp. 51 1,818 Bryn Mawr Bank Corp. 43 1,810 Pemstar Inc./1/ 508 1,808 OSI Systems Inc./1/ 103 1,782 Connecticut Water Service Inc. 66 1,781 Playboy Enterprises Inc. Class B/1/ 119 1,731 Arden Group Inc. Class A 28 1,722 Smart & Final Inc./1/ 275 1,719 Finlay Enterprises Inc./1/ 118 1,715 TRC Companies Inc./1/ 103 1,695 MRO Software Inc./1/ 124 1,693 Penn Virginia Corp. 38 1,680 KCS Energy Inc./1/ 246 1,673 Oneida Ltd. 543 1,672 Shenandoah Telecommunications Co. 43 1,658 EGL Inc./1/ 91 1,654 CVB Financial Corp. 87 1,653 Brady Corp. Class A 51 1,622 Ryerson Tull Inc. 207 1,615 ACLARA BioSciences Inc./1/ 406 1,608 CUNO Inc./1/ 41 1,607 GulfMark Offshore Inc./1/ 114 1,602 Shoe Carnival Inc./1/ 112 1,602 Standard Motor Products Inc. 158 1,596 Sanfilippo (John B.) & Son Inc./1/ 75 1,595 Independence Holding Co. 73 1,588 Metrologic Instruments Inc./1/ 44 1,584 InVision Technologies Inc./1/ 65 1,582 SBA Communications Corp./1/ 491 1,571 KFx Inc./1/ 309 1,551 Donegal Group Inc. Class A 102 1,540 Century Bancorp Inc. Class A 46 1,538 Paxson Communications Corp./1/ 310 1,538 Richardson Electronics Ltd. 144 1,526 TALX Corp. 62 1,526 Quaker City Bancorp Inc. 38 1,520 Manufacturers Services Ltd./1/ 302 1,510 NetRatings Inc./1/ 161 1,503 Pacific Union Bank 81 1,503 NIC Inc./1/ 317 1,493 Serologicals Corp./1/ 113 1,486 PC Connection Inc./1/ 158 1,485 Collins & Aikman Corp./1/ 434 1,467 Pegasus Solutions Inc./1/ 106 1,466 U.S. Xpress Enterprises Inc. Class A/1/ 119 1,458 MIM Corp./1/ 194 1,455 Meridian Bioscience Inc. 144 1,443 NASB Financial Inc. 42 1,403 NetScout Systems Inc./1/ 279 1,392 Skechers U.S.A. Inc. Class A/1/ 183 1,358 MAIR Holdings Inc./1/ 199 1,351 Provident Financial Holdings Inc. 45 1,351 Oplink Communications Inc./1/ 531 1,343 98 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Dover Motorsports Inc. 355 $ 1,335 Arrow International Inc. 58 1,334 Lindsay Manufacturing Co. 66 1,327 Deb Shops Inc. 72 1,321 Fisher Communications Inc./1/ 28 1,320 Crown Media Holdings Inc./1/ 161 1,317 Information Holdings Inc./1/ 65 1,302 SureWest Communications 39 1,297 Mestek Inc./1/ 77 1,294 Seaboard Corp. 6 1,291 Kadant Inc./1/ 67 1,284 CCC Information Services Group Inc./1/ 75 1,257 Applied Films Corporation/1/ 42 1,249 ElkCorp 53 1,249 Synplicity Inc./1/ 210 1,239 Columbia Bancorp (Oregon) 86 1,236 American Land Lease Inc. 66 1,218 First Consulting Group Inc./1/ 243 1,210 American Home Mortgage Holdings Inc. 68 1,195 CompuCredit Corp./1/ 68 1,190 BHA Group Inc. 50 1,188 Speedway Motorsports Inc. 40 1,180 Independent Bank Corp. (Massachusetts) 46 1,178 TTM Technologies Inc./1/ 82 1,171 MBT Financial Corp. 75 1,170 Noland Co. 34 1,153 Eastern Virginia Bankshares 41 1,146 Virginia Financial Group Inc. 38 1,143 Sanderson Farms Inc. 36 1,133 New Focus Inc./1/ 250 1,122 Bruker BioSciences Corp./1/ 254 1,118 West Corp./1/ 47 1,118 Holly Corp. 45 1,115 Wild Oats Markets Inc./1/ 102 1,115 Covenant Transport Inc. Class A/1/ 60 1,104 Cleveland-Cliffs Inc./1/ 43 1,101 Tyler Technologies Inc./1/ 153 1,083 SimpleTech Inc./1/ 151 1,081 RCN Corp./1/ 586 1,078 OceanFirst Financial Corp. 43 1,076 Emerson Radio Corp./1/ 286 1,072 Virage Logic Corp./1/ 141 1,072 PAB Bankshares Inc. 79 1,069 Integrated Electrical Services Inc./1/ 148 1,021 Navigators Group Inc./1/ 31 1,014 United Capital Corp. 56 1,008 Energy Conversion Devices Inc./1/ 95 998 Gibraltar Steel Corp. 45 992 Papa John's International Inc./1/ 40 992 Neose Technologies Inc./1/ 106 991 Keynote Systems Inc./1/ 85 990 Transcontinental Realty Investments Inc./1/ 84 990 West Marine Inc./1/ 51 972 Dover Downs Gaming & Entertainment Inc. 117 962 MSC Industrial Direct Co. Inc. Class A 46 959 Foothill Independent Bancorp 45 956 First Citizens Banc Corp. 36 954 Audiovox Corp. Class A/1/ 75 947 Children's Place Retail Stores Inc. (The)/1/ 55 943 Vastera Inc./1/ 183 941 Mobile Mini Inc./1/ 48 926 Viasat Inc./1/ 52 926 FuelCell Energy Inc./1/ 79 924 Veeco Instruments Inc./1/ 46 918 Hypercom Corp./1/ 169 911 Intergraph Corp./1/ 39 908 United Security Bancshares 36 907 Orleans Homebuilders Inc./1/ 75 886 Newpark Resources Inc./1/ 203 873 BRT Realty Trust 45 859 First Bancorp (North Carolina) 30 840 Internet Security Systems Inc./1/ 67 837 Cole National Corp./1/ 67 835 Alliance Imaging Inc./1/ 242 832 Pantry Inc. (The)/1/ 68 822 SCHEDULES OF INVESTMENTS 99 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Standard Commercial Corp. 44 $ 810 Waste Connections Inc./1/ 23 807 Big 5 Sporting Goods Corp./1/ 52 795 Encore Wire Corp./1/ 60 792 Tellium Inc./1/ 576 789 Pegasus Communications Corp./1/ 52 774 Sturm Ruger & Co. Inc. 75 774 Stoneridge Inc./1/ 52 765 Lightbridge Inc./1/ 81 764 Biopure Corp./1/ 116 751 EMC Insurance Group Inc. 42 742 Macatawa Bank Corp. 32 741 Rudolph Technologies Inc./1/ 38 734 Playtex Products Inc./1/ 123 733 Center Financial Corp./1/ 36 731 Aphton Corp./1/ 130 729 Central European Distribution Corp./1/ 26 711 Fairchild Corp. (The) Class A/1/ 143 708 World Fuel Services Corp. 25 702 White Electronic Designs Corp./1/ 65 699 Net2Phone Inc./1/ 110 694 GB&T Bancshares Inc. 31 690 General Cable Corp./1/ 86 685 Inter Parfums Inc. 67 670 Mail-Well Inc./1/ 191 668 Zenith National Insurance Corp. 24 668 Keithley Instruments Inc. 46 651 Medical Staffing Network Holdings Inc./1/ 85 643 NYMAGIC Inc. 28 628 Entrust Inc./1/ 127 624 Littelfuse Inc./1/ 27 621 Resource Bankshares Corp. 21 612 NL Industries Inc. 37 602 Arena Pharmaceuticals Inc./1/ 83 598 Ultimate Electronics Inc./1/ 63 598 7-Eleven Inc./1/ 41 563 Beverly Enterprises Inc./1/ 93 551 Great Atlantic & Pacific Tea Co./1/ 68 551 Oceaneering International Inc./1/ 23 541 Blount International Inc./1/ 110 529 Three-Five Systems Inc./1/ 94 518 Neoforma Inc./1/ 36 506 Main Street Banks Inc. 20 501 Tollgrade Communications Inc./1/ 31 498 Gentiva Health Services Inc./1/ 43 494 Trans World Entertainment Corp./1/ 86 486 Galyan's Trading Co./1/ 47 480 Hickory Tech Corp. 41 469 K-Swiss Inc. Class A 13 468 GTC Biotherapeutics Inc./1/ 147 456 Revlon Inc. Class A/1/ 161 428 Boston Beer Co. Inc. Class A/1/ 26 414 Universal Electronics Inc./1/ 36 414 Register.com/1/ 91 410 Option Care Inc./1/ 34 408 Chattem Inc./1/ 29 403 MarketWatch.com Inc./1/ 47 393 Liquidmetal Technologies/1/ 124 391 Modtech Holdings Inc./1/ 49 389 Raindance Communications Inc./1/ 141 389 Sirna Therapeutics Inc./1/ 64 366 Midwest Banc Holdings Inc. 16 356 C-COR.net Corp./1/ 53 350 DJ Orthopedics Inc./1/ 24 335 WFS Financial Inc./1/ 9 333 Nelson (Thomas) Inc./1/ 24 331 IXYS Corp./1/ 34 319 Vicor Corp./1/ 31 295 Raytech Corp./1/ 76 267 FFLC Bancorp Inc. 9 261 Pegasystems Inc./1/ 35 255 National Beverage Corp./1/ 16 242 Forrester Research Inc./1/ 16 229 Clayton Williams Energy Inc./1/ 12 226 SY Bancorp Inc. 12 225 Mercantile Bank Corp. 6 199 United PanAm Financial Corp./1/ 11 192 Optical Communication Products Inc./1/ 70 165 Specialty Laboratories Inc./1/ 10 131 100 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2003 SHARES OR SECURITY PRINCIPAL VALUE ---------------------------------------------------------------------------- Aspen Technology Inc./1/ 29 $ 113 Nara Bancorp Inc. 6 103 Atari Inc./1/ 25 102 CoBiz Inc. 6 96 P.A.M. Transportation Services Inc./1/ 4 82 Flag Financial Corp. 6 80 Maui Land & Pineapple Co. Inc./1/ 3 78 North Coast Energy Inc./1/ 6 75 American Realty Investors Inc./1/ 6 60 McLeodUSA Inc. Class A Escrow/2/ 5,865 - TOTAL COMMON STOCKS (COST: $125,780,085) 129,958,673 SHORT TERM INVESTMENTS - 5.73% MONEY MARKET FUNDS - 3.46% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares/3/,/4/ 3,025,524 3,025,524 Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares/3/,/4/ 1,076,108 1,076,108 BlackRock Temp Cash Money Market Fund/3/ 47,803 47,803 Short Term Investment Co. - Liquid Assets Money Market Portfolio/3/ 253,718 253,718 Short Term Investment Co. - Prime Money Market Portfolio, Institutional Shares/3/ 97,828 97,828 4,500,981 FLOATING RATE NOTES - 1.31% Beta Finance Inc. 1.08%, 05/20/04/3/ $ 48,914 48,909 1.08%, 09/15/04/3/ 97,828 97,819 1.17%, 08/23/04/3/ 48,914 48,952 CC USA Inc. 1.06%, 05/24/04/3/ 97,828 97,822 1.08%, 04/19/04/3/ 43,044 43,043 1.12%, 07/15/04/3/ 48,914 48,928 SECURITY PRINCIPAL VALUE ---------------------------------------------------------------------------- Dorada Finance Inc. 1.08%, 05/20/04/3/ $ 97,828 $ 97,819 1.24%, 08/09/04/3/ 24,457 24,454 Five Finance Inc. 1.09%, 04/15/04/3/ 48,914 48,914 HBOS Treasury Services PLC 1.13%, 06/24/08/3/ 97,828 97,828 Holmes Financing PLC 1.08%, 04/15/04/3/ 19,566 19,566 K2 USA LLC 1.08%, 08/16/04/3/ 24,457 24,454 1.08%, 09/27/04/3/ 105,654 105,639 1.09%, 04/13/04/3/ 48,914 48,913 1.09%, 05/17/04/3/ 48,914 48,912 Links Finance LLC 1.05%, 07/20/04/3/ 39,131 39,125 1.08%, 05/04/04/3/ 48,914 48,913 1.08%, 06/28/04/3/ 48,914 48,907 1.09%, 03/29/04/3/ 48,914 48,914 Nationwide Building Society 1.08%, 07/23/04/3/ 73,371 73,371 Sigma Finance Inc. 1.05%, 07/20/04/3/ 48,914 48,906 1.07%, 10/15/03/3/ 97,828 97,828 1.07%, 07/01/04/3/ 48,914 48,905 1.24%, 08/06/04/3/ 24,457 24,455 Tango Finance Corp. 1.05%, 07/15/04/3/ 29,348 29,341 1.06%, 07/06/04/3/ 29,348 29,346 WhistleJacket Capital LLC 1.08%, 09/15/04/3/ 48,914 48,905 White Pine Finance LLC 1.08%, 05/17/04/3/ 58,697 58,697 1.08%, 07/06/04/3/ 58,697 58,692 1.08%, 08/26/04/3/ 48,914 48,907 1.09%, 04/20/04/3/ 48,914 48,914 1,704,098 COMMERCIAL PAPER - 0.69% Amsterdam Funding Corp. 1.06%, 10/16/03/3/ 46,468 46,445 SCHEDULES OF INVESTMENTS 101 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL 3000 VALUE INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE ---------------------------------------------------------------------------- Blue Ridge Asset Funding Corp. 1.05%, 10/17/03/3/ $ 48,914 $ 48,891 Edison Asset Securitization 1.07%, 10/23/03/3/ 91,958 91,898 Gemini Securitization Corp. 1.05%, 10/17/03/3/ 34,240 34,224 Greenwich Funding Corp. 1.06%, 10/16/03/3/ 57,719 57,693 Jupiter Securitization Corp. 1.05%, 10/20/03/3/ 48,914 48,887 New Center Asset Trust 1.06%, 10/22/03/3/ 48,914 48,884 Park Avenue Receivables Corp. 1.05%, 10/20/03/3/ 48,914 48,887 Preferred Receivables Funding Corp. 1.06%, 10/08/03/3/ 48,914 48,904 Receivables Capital Corp. 1.05%, 10/15/03/3/ 32,878 32,865 Sydney Capital Corp. 1.07%, 10/17/03/3/ 39,620 39,601 UBS Finance (Delaware) Inc. 1.03%, 10/08/03/3/ 97,828 97,808 1.05%, 10/15/03/3/ 48,914 48,894 1.11%, 10/01/03/3/ 195,656 195,656 889,537 TIME DEPOSITS - 0.21% Abbey National Treasury Services PLC 1.15%, 10/01/03/3/ 48,914 48,914 Canadian Imperial Bank of Commerce 1.06%, 10/08/03/3/ 24,457 24,457 1.08%, 10/30/03/3/ 39,131 39,131 1.37%, 08/26/04/3/ 97,828 97,828 Toronto-Dominion Bank 1.33%, 08/23/04/3/ 63,588 63,560 273,890 REPURCHASE AGREEMENTS - 0.06% Lehman Brothers Inc. 1.10%, 10/01/03/3/ 78,262 78,262 78,262 TOTAL SHORT TERM INVESTMENTS (Cost: $7,446,768) 7,446,768 TOTAL INVESTMENTS IN SECURITIES - 105.63% (Cost $133,226,853) 137,405,441 OTHER ASSETS, LESS LIABILITIES - (5.63%) (7,322,120) --------------- NET ASSETS - 100.00% $ 130,083,321 =============== /1/ Non-income earning securities. /2/ Security valued at fair value in accordance with procedures approved by the Board of Trustees. See Note 1. /3/ All or a portion of this security represents investments of securities lending collateral. /4/ Issuer is an affiliate of the Fund's investment advisor. See Note 2. SEE NOTES TO FINANCIAL STATEMENTS. 102 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) iSHARES RUSSELL MIDCAP INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- COMMON STOCKS - 99.90% Corning Inc./1/ 162,981 $ 1,535,281 Sears, Roebuck and Co. 33,655 1,471,733 Staples Inc./1/ 58,173 1,381,609 Starbucks Corp./1/ 47,808 1,376,870 Zimmer Holdings Inc./1/ 24,054 1,325,375 Agilent Technologies Inc./1/ 57,693 1,275,592 Electronic Arts Inc./1/ 13,763 1,269,361 Allergan Inc. 15,944 1,255,271 Safeway Inc./1/ 54,042 1,239,723 Praxair Inc. 19,906 1,233,177 SouthTrust Corp. 41,683 1,225,063 TJX Companies Inc. 62,869 1,220,916 KLA-Tencor Corp./1/ 23,318 1,198,545 PG&E Corp./1/ 50,103 1,197,462 Hancock (John) Financial Services Inc. 35,382 1,195,912 Countrywide Financial Corp. 15,059 1,178,819 International Game Technology Inc. 41,859 1,178,331 Public Service Enterprise Group Inc. 27,654 1,161,468 Symantec Corp./1/ 18,101 1,140,725 McKesson Corp. 33,578 1,117,812 Electronic Data Systems Corp. 55,224 1,115,525 Consolidated Edison Inc. 27,334 1,114,134 Adobe Systems Inc. 28,354 1,113,178 Pitney Bowes Inc. 28,703 1,099,899 Lucent Technologies Inc./1/ 506,590 1,094,234 Intuit Inc./1/ 22,534 1,087,040 PPG Industries Inc. 20,799 1,086,124 Marathon Oil Corp. 37,975 1,082,288 Aetna Inc. 17,606 1,074,494 Yum! Brands Inc./1/ 35,846 1,061,759 Biomet Inc. 31,550 1,060,395 Marriott International Inc. Class A 24,140 1,038,744 Johnson Controls Inc. 10,915 1,032,559 Mattel Inc. 53,891 1,021,773 MedImmune Inc./1/ 30,750 1,015,058 Northern Trust Corp. 23,753 1,008,077 Fortune Brands Inc. 17,730 1,006,177 PACCAR Inc. 13,465 1,005,701 Comerica Inc. 21,450 999,570 Unocal Corp. 31,627 996,883 Equity Residential 33,358 976,722 MBIA Inc. 17,597 967,307 Federated Department Stores Inc. 22,963 962,150 St. Paul Companies Inc. 25,685 951,116 Block (H & R) Inc. 21,904 945,158 Regions Financial Corp. 27,161 930,264 TXU Corp. 39,476 930,055 Synovus Financial Corp. 37,200 929,628 Xerox Corp./1/ 90,270 926,170 Apple Computer Inc./1/ 44,788 923,976 SunGard Data Systems Inc./1/ 34,807 915,772 AmSouth Bancorp 42,933 911,038 Lexmark International Inc./1/ 14,418 908,478 Bear Stearns Companies Inc. (The) 12,135 907,698 Micron Technology Inc./1/ 67,569 906,776 Franklin Resources Inc. 20,125 889,726 Norfolk Southern Corp. 47,710 882,635 Altera Corp./1/ 46,695 882,535 PPL Corp. 21,441 878,009 Marshall & Ilsley Corp. 27,793 876,035 Dover Corp. 24,699 873,604 Clorox Co. 19,032 872,998 May Department Stores Co. (The) 35,344 870,523 Mylan Laboratories Inc. 22,173 856,986 Albertson's Inc. 41,617 856,062 Ameren Corp. 19,750 847,472 Charter One Financial Inc. 27,526 842,296 Moody's Corp. 15,223 836,808 Archer-Daniels-Midland Co. 63,466 832,039 Tenet Healthcare Corp./1/ 56,884 823,680 Computer Sciences Corp./1/ 21,791 818,688 Limited Brands Inc. 54,168 816,853 Concord EFS Inc./1/ 59,607 814,828 Starwood Hotels & Resorts Worldwide Inc. 23,287 810,388 Fiserv Inc./1/ 22,338 809,306 Eaton Corp. 9,125 808,657 SCHEDULES OF INVESTMENTS 103 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL MIDCAP INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Cinergy Corp. 21,577 $ 791,876 Hershey Foods Corp. 10,836 787,560 Lincoln National Corp. 21,749 769,480 Jefferson-Pilot Corp. 17,327 768,972 Union Planters Corp. 24,295 768,694 CIGNA Corp. 17,178 766,998 CSX Corp. 26,187 765,970 Monsanto Co. 31,970 765,362 DTE Energy Co. 20,582 759,270 New York Times Co. Class A 17,458 758,725 Network Appliance Inc./1/ 36,889 757,331 Xcel Energy Inc. 48,852 755,740 Georgia-Pacific Corp. 30,493 739,150 Family Dollar Stores Inc. 18,384 733,338 Eastman Kodak Co. 34,931 731,455 AmerisourceBergen Corp. 13,525 731,026 PeopleSoft Inc./1/ 40,006 727,709 Newell Rubbermaid Inc. 33,578 727,635 AutoZone Inc./1/ 8,113 726,357 Constellation Energy Group Inc. 20,257 724,795 Caremark Rx Inc./1/ 32,064 724,646 UST Inc. 20,496 721,049 National Semiconductor Corp./1/ 22,296 719,938 Penney (J.C.) Co. Inc. (Holding Co.) 33,243 710,403 Broadcom Corp. Class A/1/ 26,517 705,883 Simon Property Group Inc. 16,085 700,984 Dollar General Corp. 34,985 699,700 CIT Group Inc. 24,286 698,465 Biogen Inc./1/ 18,198 695,710 Avery Dennison Corp. 13,542 684,142 Genuine Parts Co. 21,311 681,526 KeySpan Corp. 19,244 675,080 Interpublic Group of Companies Inc. 47,775 674,583 ITT Industries Inc. 11,244 672,841 Hilton Hotels Corp. 41,411 671,686 Knight Ridder Inc. 10,002 667,133 North Fork Bancorp Inc. 19,181 666,540 Cincinnati Financial Corp. 16,677 666,413 Edison International/1/ 34,851 665,654 Affiliated Computer Services Inc. Class A/1/ 13,652 664,716 Sovereign Bancorp Inc. 35,611 660,584 First Tennessee National Corp. 15,454 656,177 Sempra Energy 22,324 655,433 AON Corp. 31,173 649,957 Parker Hannifin Corp. 14,474 646,988 Popular Inc. 16,246 646,591 Rohm & Haas Co. 19,295 645,418 Loews Corp. 15,931 643,134 Ambac Financial Group Inc. 10,043 642,752 NiSource Inc. 32,074 640,839 Health Management Associates Inc. Class A 29,200 636,852 American Standard Companies Inc./1/ 7,494 631,369 IMS Health Inc. 29,789 628,548 Kinder Morgan Inc. 11,630 628,136 MeadWestvaco Corp. 24,574 626,637 National Commerce Financial Corp. 25,112 624,787 General Growth Properties Inc. 8,711 624,579 BJ Services Co./1/ 18,150 620,185 Novellus Systems Inc./1/ 18,367 619,886 Zions Bancorporation 11,045 616,863 Juniper Networks Inc./1/ 40,938 610,795 Sanmina-SCI Corp./1/ 62,615 607,366 Coach Inc./1/ 11,111 606,661 ProLogis 20,001 605,030 Williams Companies Inc. 63,540 598,547 Microchip Technology Inc. 24,892 595,914 CenturyTel Inc. 17,535 594,261 JDS Uniphase Corp./1/ 164,631 592,672 Dean Foods Co./1/ 19,006 589,756 Centex Corp. 7,551 588,072 Archstone-Smith Trust 22,281 587,773 RadioShack Corp. 20,639 586,354 EOG Resources Inc. 14,039 585,988 Ecolab Inc. 23,175 585,169 Torchmark Corp. 14,229 578,267 Agere Systems Inc. Class B/1/ 199,588 576,809 104 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL MIDCAP INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Univision Communications Inc. Class A/1/ 18,038 $ 575,947 Legg Mason Inc. 7,933 572,763 Qwest Communications International Inc./1/ 168,027 571,292 Applera Corp. - Applied Biosystems Group 25,593 570,980 Whirlpool Corp. 8,416 570,352 Plum Creek Timber Co. Inc. 22,417 570,288 Chiron Corp./1/ 10,974 567,246 Harrah's Entertainment Inc. 13,440 565,958 Banknorth Group Inc. 19,856 560,336 SAFECO Corp. 15,870 559,576 Solectron Corp./1/ 95,471 558,505 Avaya Inc./1/ 51,167 557,720 Textron Inc. 14,072 555,140 Huntington Bancshares Inc. 27,977 553,665 Rockwell Collins Inc. 21,821 550,980 Kerr-McGee Corp. 12,339 550,813 Sprint Corp. (PCS Group)/1/ 95,924 549,645 Watson Pharmaceuticals Inc./1/ 13,136 547,640 Murphy Oil Corp. 9,281 545,259 BEA Systems Inc./1/ 45,156 544,130 Cintas Corp. 14,744 543,169 New York Community Bancorp Inc. 17,208 542,224 QLogic Corp./1/ 11,511 541,132 Quest Diagnostics Inc./1/ 8,917 540,727 Compass Bancshares Inc. 15,522 536,751 Valero Energy Corp. 14,022 536,622 El Paso Corp. 73,474 536,360 Freeport-McMoRan Copper & Gold Inc. 16,126 533,771 Rockwell Automation Inc. 20,315 533,269 Delphi Corp. 58,865 532,728 Scientific-Atlanta Inc. 17,087 532,260 Office Depot Inc./1/ 37,883 532,256 Millennium Pharmaceuticals Inc./1/ 34,484 530,709 Career Education Corp./1/ 11,704 530,191 T. Rowe Price Group Inc. 12,687 523,466 UNUMProvident Corp. 35,252 520,672 Synopsys Inc./1/ 16,862 518,844 Coca-Cola Enterprises Inc. 27,214 518,699 Laboratory Corp. of America Holdings/1/ 18,020 517,174 Leggett & Platt Inc. 23,610 510,684 Radian Group Inc. 11,437 507,803 Unisys Corp./1/ 37,448 506,671 Tiffany & Co. 13,544 505,598 Lennar Corp. Class A 6,441 501,045 IDEC Pharmaceuticals Corp./1/ 15,002 497,316 Jabil Circuit Inc./1/ 18,974 494,273 Siebel Systems Inc./1/ 50,718 492,979 ENSCO International Inc. 18,311 491,101 Old Republic International Corp. 14,805 489,897 Sealed Air Corp./1/ 10,303 486,611 Duke Realty Corp. 16,582 484,194 Varian Medical Systems Inc./1/ 8,365 480,820 Public Storage Inc. 12,250 480,568 Phelps Dodge Corp./1/ 10,162 475,582 iStar Financial Inc. 12,184 474,567 SanDisk Corp./1/ 7,418 472,823 D.R. Horton Inc. 14,438 472,123 Advanced Micro Devices Inc./1/ 42,375 470,786 Dollar Tree Stores Inc./1/ 14,007 469,234 Vornado Realty Trust 9,755 468,630 McCormick & Co. Inc. 17,053 467,593 SCANA Corp. 13,581 465,149 Express Scripts Inc./1/ 7,566 462,661 Vulcan Materials Co. 11,570 461,759 MGIC Investment Corp. 8,868 461,757 Fidelity National Financial Inc. 15,326 460,700 Kimco Realty Corp. 11,241 460,544 Bard (C.R.) Inc. 6,364 451,844 Sigma-Aldrich Corp. 8,692 451,462 Molex Inc. 15,760 450,578 Wendy's International Inc. 13,902 449,035 Apartment Investment & Management Co. Class A 11,408 449,019 Citrix Systems Inc./1/ 20,291 448,025 Liz Claiborne Inc. 13,154 447,894 King Pharmaceuticals Inc./1/ 29,539 447,516 SCHEDULES OF INVESTMENTS 105 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL MIDCAP INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Smurfit-Stone Container Corp. 29,836 $ 446,943 Sherwin-Williams Co. (The) 15,158 445,797 Diebold Inc. 8,782 444,808 Grainger (W.W.) Inc. 9,331 443,689 Jones Apparel Group Inc. 14,716 440,450 Nucor Corp. 9,599 440,402 Amerada Hess Corp. 8,777 439,728 Ross Stores Inc. 9,467 438,890 Cadence Design Systems Inc./1/ 32,726 438,528 Mohawk Industries Inc./1/ 6,148 438,475 Wisconsin Energy Corp. 14,213 434,491 XTO Energy Inc. 20,695 434,388 GreenPoint Financial Corp. 14,545 434,314 SPX Corp./1/ 9,492 429,798 Pepsi Bottling Group Inc. 20,868 429,463 DENTSPLY International Inc. 9,558 428,581 Celgene Corp./1/ 9,872 427,754 Estee Lauder Companies Inc. Class A 12,536 427,478 Thermo Electron Corp./1/ 19,667 426,774 TCF Financial Corp. 8,847 424,214 Patterson Dental Co./1/ 7,365 424,077 Oxford Health Plans Inc./1/ 10,208 421,692 Republic Services Inc. 18,622 421,602 Teradyne Inc./1/ 22,485 418,221 Waters Corp./1/ 15,196 416,826 CDW Corp. 7,198 415,613 JetBlue Airways Corp./1/ 6,811 415,267 Lincare Holdings Inc./1/ 11,253 412,422 CarMax Inc./1/ 12,553 409,981 Expeditors International Washington Inc. 11,903 409,582 Janus Capital Group Inc. 29,265 408,832 R.J. Reynolds Tobacco Holdings Inc. 10,333 408,567 Pulte Homes Inc. 5,988 407,244 Mercury Interactive Corp./1/ 8,942 406,056 Washington Post Company (The) Class B 610 405,650 Lear Corp./1/ 7,698 405,223 AdvancePCS/1/ 8,815 401,700 BMC Software Inc./1/ 28,612 398,565 Energy East Corp. 17,747 398,065 Intersil Corp. Class A/1/ 16,690 397,222 Pactiv Corp./1/ 19,472 394,892 Rouse Co. (The) 9,440 393,648 Brinker International Inc./1/ 11,799 393,615 VF Corp. 10,104 393,147 Darden Restaurants Inc. 20,670 392,730 Health Net Inc./1/ 12,360 391,441 L-3 Communications Holdings Inc./1/ 9,025 390,331 PETsMART Inc./1/ 17,186 390,122 SUPERVALU Inc. 16,339 389,849 Engelhard Corp. 14,084 389,704 Citizens Communications Co./1/ 34,728 389,301 LSI Logic Corp./1/ 43,272 389,015 Hibernia Corp. Class A 19,182 388,627 Barr Laboratories Inc./1/ 5,675 387,092 Mercantile Bankshares Corp. 9,673 386,920 Black & Decker Corp. 9,525 386,239 Equifax Inc. 17,297 385,204 AES Corp. (The)/1/ 51,468 381,893 Omnicare Inc. 10,542 380,145 E*TRADE Group Inc./1/ 40,846 378,234 Providian Financial Corp./1/ 32,019 377,504 Dun & Bradstreet Corp./1/ 9,085 377,391 ServiceMaster Co. (The) 36,707 376,614 Ball Corp. 6,968 376,272 AutoNation Inc./1/ 21,410 375,531 Sunoco Inc. 9,313 374,569 Smith International Inc./1/ 10,406 374,408 Fluor Corp. 9,963 371,919 PMI Group Inc. (The) 10,937 369,124 Boston Properties Inc. 8,480 368,626 Pioneer Natural Resources Co./1/ 14,417 367,057 DST Systems Inc./1/ 9,714 365,246 Pinnacle West Capital Corp. 10,217 362,704 Host Marriott Corp./1/ 33,680 361,386 Tyson Foods Inc. Class A 25,329 357,899 Edwards (A.G.) Inc. 9,279 356,406 Humana Inc./1/ 19,616 354,069 106 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL MIDCAP INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Invitrogen Corp./1/ 6,103 $ 353,913 Liberty Property Trust 9,567 353,788 Commerce Bancorp Inc. 7,375 353,336 AvalonBay Communities Inc. 7,542 352,966 Robert Half International Inc./1/ 18,053 352,034 Energizer Holdings Inc./1/ 9,573 351,999 Manpower Inc. 9,485 351,894 Autoliv Inc. 11,649 351,450 Sabre Holdings Corp. 16,286 349,986 Hillenbrand Industries Inc. 6,191 349,296 Level 3 Communications Inc./1/ 64,420 349,156 Health Care Property Investors Inc. 7,470 348,849 Telephone & Data Systems Inc. 6,168 348,739 Goodrich (B.F.) Co. 14,364 348,183 Whole Foods Market Inc./1/ 6,252 344,985 American Power Conversion Corp. 20,100 344,514 Pogo Producing Co. 7,576 343,041 Lam Research Corp./1/ 15,486 343,015 Tellabs Inc./1/ 50,376 342,053 Vishay Intertechnology Inc./1/ 19,507 341,763 Allied Capital Corp. 13,803 339,416 ChoicePoint Inc./1/ 10,129 339,321 Beckman Coulter Inc. 7,448 339,182 Symbol Technologies Inc. 28,216 337,181 CIENA Corp./1/ 56,937 336,498 VeriSign Inc./1/ 24,944 335,996 NCR Corp./1/ 10,563 334,741 Convergys Corp./1/ 18,159 333,036 Pepco Holdings Inc. 19,197 331,724 WebMD Corp./1/ 37,066 330,629 Doral Financial Corp. 7,014 329,658 Michaels Stores Inc. 8,082 329,422 IVAX Corp./1/ 16,793 329,143 Manor Care Inc. 10,922 327,660 Constellation Brands Inc./1/ 10,742 327,524 Storage Technology Corp./1/ 13,331 321,810 Gentex Corp./1/ 9,233 321,678 Chico's FAS Inc./1/ 10,472 320,862 Donnelley (R.R.) & Sons Co. 12,874 320,176 Scripps (E.W.) Co. Class A 3,762 320,146 Brown-Forman Corp. Class B 4,046 320,120 Amylin Pharmaceuticals Inc./1/ 11,331 319,987 Associated Bancorp 8,465 319,977 Hasbro Inc. 17,115 319,708 CH Robinson Worldwide Inc. 8,581 319,299 Valley National Bancorp 11,435 318,350 UnionBanCal Corp. 6,416 318,234 Commerce Bancshares Inc. 7,267 317,931 NVR Inc./1/ 681 317,687 Eastman Chemical Co. 9,481 317,613 Ameritrade Holding Corp./1/ 28,223 317,509 Fair Isaac Corp. 5,384 317,441 Equitable Resources Inc. 7,685 315,853 Park Place Entertainment Corp./1/ 34,721 312,836 Pall Corp. 13,940 312,814 Westwood One Inc./1/ 10,361 312,799 Western Digital Corp./1/ 24,185 311,745 Gallagher (Arthur J.) & Co. 11,010 311,363 Toys R Us Inc./1/ 25,858 311,072 Abercrombie & Fitch Co. Class A/1/ 11,210 310,629 Harman International Industries Inc. 3,154 310,196 Questar Corp. 10,032 309,086 NSTAR 6,498 308,655 Corinthian Colleges Inc./1/ 5,396 308,435 MDU Resources Group Inc. 9,077 306,621 CenterPoint Energy Inc. 33,126 303,765 MGM Grand Inc./1/ 8,266 302,122 TECO Energy Inc. 21,750 300,585 Monster Worldwide Inc./1/ 11,906 299,793 Universal Health Services Inc. Class B/1/ 5,999 296,651 Ceridian Corp./1/ 15,847 295,071 Mid Atlantic Medical Services Inc./1/ 5,727 294,540 Coventry Health Care Inc./1/ 5,573 293,920 NVIDIA Corp./1/ 18,466 293,813 Astoria Financial Corp. 9,493 293,334 KB Home 4,915 293,229 SEI Investment Co. 9,019 293,118 Alberto-Culver Co. Class B 4,973 292,512 SCHEDULES OF INVESTMENTS 107 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL MIDCAP INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- International Rectifier Corp./1/ 7,798 $ 291,957 Maxtor Corp./1/ 23,984 291,885 Outback Steakhouse Inc. 7,674 290,614 Alliant Energy Corp. 13,199 290,378 Valspar Corp. (The) 6,208 289,603 Harris Corp. 8,081 289,219 First Health Group Corp./1/ 11,029 288,408 Nordstrom Inc. 11,558 286,754 AMB Property Corp. 9,287 286,132 Krispy Kreme Doughnuts Inc./1/ 7,432 286,132 ALLETE Inc. 10,445 285,984 Comverse Technology Inc./1/ 19,091 285,601 Bausch & Lomb Inc. 6,449 284,723 Iron Mountain Inc./1/ 7,916 284,184 Cephalon Inc./1/ 6,171 283,372 Dana Corp. 18,209 280,965 International Flavors & Fragrances Inc. 8,487 280,750 Foot Locker Inc. 17,326 280,681 Eaton Vance Corp. 8,382 280,629 Henry Schein Inc./1/ 4,948 280,552 GTECH Holdings Corp. 6,530 279,810 Rent-A-Center Inc./1/ 8,640 279,072 New Plan Excel Realty Trust 11,962 278,715 Williams-Sonoma Inc./1/ 10,283 277,435 Pharmaceutical Resources Inc./1/ 4,064 277,246 Belo (A.H.) Corp. 11,402 276,498 Developers Diversified Realty Corp. 9,256 276,477 Northeast Utilities 15,426 276,434 Fastenal Co. 7,303 276,053 Markel Corp./1/ 1,032 275,544 Triad Hospitals Inc./1/ 9,095 275,397 Ashland Inc. 8,361 274,659 Cognizant Technology Solutions Corp./1/ 7,515 274,072 Mack-Cali Realty Corp. 6,990 274,008 Temple-Inland Inc. 5,641 273,871 Rite Aid Corp./1/ 52,957 273,258 Deluxe Corp. 6,802 273,032 Berkley (W.R.) Corp. 7,917 271,236 PMC-Sierra Inc./1/ 20,558 271,181 Noble Energy Inc. 7,071 270,819 Neuberger Berman Inc. 6,463 270,606 Jacobs Engineering Group Inc./1/ 5,968 269,157 Cooper Cameron Corp./1/ 5,814 268,665 UTStarcom Inc./1/ 8,425 267,999 Patterson-UTI Energy Inc./1/ 9,899 267,966 Brunswick Corp. 10,425 267,714 Rowan Companies Inc./1/ 10,877 267,357 Foundry Networks Inc./1/ 12,413 267,004 Bowater Inc. 6,337 266,534 DPL Inc. 15,499 265,808 HON Industries Inc. 7,159 264,597 Hudson City Bancorp Inc. 8,562 264,052 Sepracor Inc./1/ 9,567 263,475 Network Associates Inc./1/ 19,143 263,408 Lamar Advertising Co./1/ 8,898 261,067 Catellus Development Corp./1/ 10,667 260,808 3Com Corp./1/ 44,066 259,988 Fulton Financial Corp. 12,919 259,414 Viad Corp. 10,791 257,689 Puget Energy Inc. 11,476 257,407 Emulex Corp./1/ 10,082 256,789 Smucker (J.M.) Co. (The) 6,077 256,206 Bemis Co. 5,782 256,143 Great Plains Energy Inc. 8,426 255,476 Weingarten Realty Investors 5,670 255,150 Millipore Corp./1/ 5,518 254,159 Federated Investors Inc. Class B 9,168 253,954 Cypress Semiconductor Corp./1/ 14,356 253,814 Hospitality Properties Trust 7,232 253,699 City National Corp. 4,959 252,711 Donaldson Co. Inc. 4,681 252,306 United Dominion Realty Trust Inc. 13,774 252,202 NTL Inc./1/ 5,327 251,008 Investors Financial Services Corp. 7,965 250,101 Bank of Hawaii Corp. 7,444 249,970 Dial Corp. (The) 11,554 248,873 Sonoco Products Co. 11,304 248,123 Wilmington Trust Corp. 8,049 247,587 Navistar International Corp./1/ 6,629 247,129 108 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL MIDCAP INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- ITT Educational Services Inc./1/ 5,157 $ 247,123 Compuware Corp./1/ 45,873 245,879 ICOS Corp./1/ 6,406 245,478 Chesapeake Energy Corp. 22,681 244,501 Avnet Inc./1/ 14,703 242,894 ImClone Systems Inc./1/ 6,268 242,697 Dow Jones & Co. Inc. 5,115 242,195 Macerich Co. (The) 6,410 241,978 Pentair Inc. 6,046 241,054 Novell Inc./1/ 44,888 239,253 Stanley Works (The) 8,104 239,230 Maytag Corp. 9,570 238,963 American Tower Corp. Class A/1/ 23,470 238,220 OGE Energy Corp. 10,528 237,828 Sky Financial Group Inc. 10,548 237,435 DaVita Inc./1/ 7,374 234,714 Cullen/Frost Bankers Inc. 6,294 234,326 Zebra Technologies Corp. Class A/1/ 4,537 233,973 Tektronix Inc./1/ 9,427 233,318 Autodesk Inc. 13,637 232,102 FirstMerit Corp. 9,336 230,973 Apogent Technologies Inc./1/ 11,053 230,566 United States Steel Corp. 12,480 229,382 Protective Life Corp. 7,670 228,950 ADC Telecommunications Inc./1/ 98,098 228,568 Allied Waste Industries Inc./1/ 21,155 228,474 Alliant Techsystems Inc./1/ 4,753 228,382 Pride International Inc./1/ 13,457 228,096 Performance Food Group Co./1/ 5,595 227,772 Precision Castparts Corp. 6,434 225,833 HCC Insurance Holdings Inc. 7,749 225,341 Ryland Group Inc. 3,061 223,790 Big Lots Inc./1/ 14,121 223,253 Hubbell Inc. Class B 6,116 223,173 Webster Financial Corp. 5,591 222,969 Reynolds & Reynolds Co. (The) Class A 8,087 222,797 Integrated Circuit Systems Inc./1/ 7,409 222,566 BorgWarner Inc. 3,274 222,141 Education Management Corp./1/ 3,849 221,972 Colonial BancGroup Inc. (The) 15,294 220,845 Philadelphia Suburban Corp. 9,120 219,610 Advanced Fibre Communications Inc./1/ 10,418 218,465 Martin Marietta Materials Inc. 5,970 217,607 AGL Resources Inc. 7,723 217,557 Mandalay Resort Group 5,487 217,340 Corporate Executive Board Co. (The)/1/ 4,608 216,346 Cabot Corp. 7,564 215,650 Human Genome Sciences Inc./1/ 15,783 215,596 ARAMARK Corp. Class B/1/ 8,604 215,358 Nationwide Financial Services Inc. 6,852 214,742 Applebee's International Inc. 6,806 214,253 Waddell & Reed Financial Inc. Class A 9,090 214,251 Weight Watchers International Inc./1/ 5,143 213,949 Washington Federal Inc. 8,483 213,856 Circuit City Stores Inc. 22,439 213,844 Pier 1 Imports Inc. 11,084 213,256 Arrow Electronics Inc./1/ 11,588 213,103 Vectren Corp. 9,009 212,793 Calpine Corp./1/ 43,493 212,681 Graco Inc. 5,628 211,331 Lee Enterprises Inc. 5,442 210,442 Certegy Inc. 6,552 210,385 PerkinElmer Inc. 13,735 210,283 Advance Auto Parts Inc./1/ 2,953 209,368 CBRL Group Inc. 5,898 209,261 Pan Pacific Retail Properties Inc. 4,863 209,109 PacifiCare Health Systems Inc./1/ 4,276 208,669 Newfield Exploration Co./1/ 5,410 208,664 Hormel Foods Corp. 9,078 208,612 Chelsea Property Group Inc. 4,352 208,461 Rayonier Inc. 5,112 207,547 Entercom Communications Corp./1/ 4,625 207,292 Thornburg Mortgage Inc. 8,174 207,047 First American Corp. 8,284 206,272 Independence Community Bank Corp. 5,879 205,353 Reebok International Ltd. 6,128 204,859 SCHEDULES OF INVESTMENTS 109 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL MIDCAP INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- BancorpSouth Inc. 9,353 $ 204,831 Lubrizol Corp. 6,309 204,727 Ryder System Inc. 6,961 204,097 Herman Miller Inc. 8,958 203,974 Cheesecake Factory (The)/1/ 5,629 203,601 Edwards Lifesciences Corp./1/ 7,515 203,506 Roslyn Bancorp Inc. 8,652 203,149 Renal Care Group Inc./1/ 5,942 202,919 Tech Data Corp./1/ 6,570 202,685 StanCorp Financial Group Inc. 3,512 201,764 Atmel Corp./1/ 50,306 201,727 Polycom Inc./1/ 12,141 201,662 BRE Properties Inc. Class A 6,097 201,079 Hawaiian Electric Industries Inc. 4,592 199,890 Sirius Satellite Radio Inc./1/ 108,104 197,830 Polaris Industries Inc. 2,667 197,758 Federal Realty Investment Trust 5,331 196,501 Smithfield Foods Inc./1/ 10,222 196,262 Fisher Scientific International Inc./1/ 4,938 195,989 Del Monte Foods Co./1/ 22,497 195,949 Tidewater Inc. 6,923 195,921 Lyondell Chemical Co. 15,324 195,841 Snap-On Inc. 7,058 195,154 Neurocrine Biosciences Inc./1/ 3,925 194,366 Steris Corp./1/ 8,442 194,335 SICOR Inc./1/ 10,077 194,285 CenterPoint Properties Corp. 2,844 193,705 Stericycle Inc./1/ 4,104 193,586 Hudson United Bancorp 5,498 193,365 FNB Corp. (Florida) 5,598 193,131 CNF Inc. 6,015 192,781 Arden Realty Inc. 6,852 191,308 Annaly Mortgage Management Inc. 11,597 190,423 Harsco Corp. 4,947 190,311 Shurgard Storage Centers Inc. Class A 5,391 190,302 Nicor Inc. 5,385 189,229 CarrAmerica Realty Corp. 6,327 188,861 Leucadia National Corp. 4,967 188,001 Fairchild Semiconductor International Inc. Class A/1/ 11,313 187,570 Brown & Brown Inc. 6,090 187,450 Macromedia Inc./1/ 7,565 187,158 Varco International Inc./1/ 11,053 186,906 Cummins Inc. 4,202 186,695 O'Reilly Automotive Inc./1/ 5,060 186,056 XM Satellite Radio Holdings Inc. Class A/1/ 11,952 185,615 National Fuel Gas Co. 8,105 185,199 RPM International Inc. 14,174 185,112 AmeriCredit Corp./1/ 17,971 185,101 Cablevision Systems Corp./1/ 10,195 184,529 Transatlantic Holdings Inc. 2,585 183,845 Apria Healthcare Group Inc./1/ 6,713 183,802 ONEOK Inc. 9,108 183,708 BISYS Group Inc. (The)/1/ 13,899 182,772 Neiman-Marcus Group Inc. Class A/1/ 4,383 182,771 Teleflex Inc. 4,208 182,753 Borders Group Inc./1/ 9,629 182,181 Pixar Inc./1/ 2,736 182,108 Medicis Pharmaceutical Corp. Class A 3,101 181,719 Meredith Corp. 3,933 181,587 Peoples Energy Corp. 4,388 181,575 Westamerica Bancorp 4,072 181,000 Applied Micro Circuits Corp./1/ 37,090 180,628 Ruby Tuesday Inc. 7,479 180,319 ResMed Inc./1/ 4,071 179,043 National-Oilwell Inc./1/ 9,818 178,099 Delta Air Lines Inc. 13,347 177,515 Saks Inc./1/ 15,178 175,002 Raymond James Financial Inc. 4,791 174,153 Old National Bancorp 7,785 173,995 Toll Brothers Inc./1/ 5,715 173,850 MONY Group Inc. (The) 5,294 172,320 Hunt (J.B.) Transport Services Inc./1/ 6,612 172,044 Respironics Inc./1/ 4,111 171,758 Cytec Industries Inc./1/ 4,703 171,659 110 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL MIDCAP INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Reliant Resources Inc./1/ 33,254 $ 170,260 First Midwest Bancorp Inc. 5,718 169,882 Regis Corp. 5,285 169,649 Rambus Inc./1/ 10,097 169,428 Charles River Laboratories International Inc./1/ 5,520 169,409 Realty Income Corp. 4,270 169,306 Ingram Micro Inc. Class A/1/ 12,924 168,658 Service Corp. International/1/ 36,643 167,459 Coors (Adolf) Company Class B 3,111 167,247 Whitney Holding Corp. 4,902 166,668 Unitrin Inc. 5,464 166,433 American Capital Strategies Ltd. 6,692 166,363 DeVry Inc./1/ 7,014 165,951 International Speedway Corp. Class A 3,767 165,334 WGL Holdings Inc. 5,952 164,156 Healthcare Realty Trust Inc. 5,123 163,834 Carlisle Companies Inc. 3,755 163,793 Claire's Stores Inc. 4,895 163,787 Cree Inc./1/ 8,822 163,383 IDEXX Laboratories Inc./1/ 3,829 162,694 WPS Resources Corp. 3,947 162,616 Brocade Communications Systems Inc./1/ 31,137 162,535 Andrx Group/1/ 8,716 161,333 Trustmark Corp. 5,942 161,206 Mills Corp. 4,074 160,312 Helmerich & Payne Inc. 6,129 160,212 Silicon Laboratories Inc./1/ 3,545 159,348 CheckFree Corp./1/ 7,961 159,220 HRPT Properties Trust 17,418 159,201 Protein Design Labs Inc./1/ 11,436 158,503 Amkor Technology Inc./1/ 11,075 157,376 Integrated Device Technology Inc./1/ 12,653 157,150 Park National Corp. 1,400 156,660 Camden Property Trust 4,056 155,872 Red Hat Inc./1/ 15,394 155,479 Forest City Enterprises Inc. Class A 3,550 155,312 Avocent Corp./1/ 5,125 155,236 Mettler Toledo International Inc./1/ 4,314 155,088 IndyMac Bancorp Inc. 6,689 154,984 99 Cents Only Stores/1/ 4,781 154,618 AMETEK Inc. 3,601 154,339 National Instruments Corp. 3,827 154,037 FMC Technologies Inc./1/ 7,164 153,453 Church & Dwight Co. Inc. 4,378 153,186 Key Energy Services Inc./1/ 15,862 153,068 AptarGroup Inc. 4,150 152,263 La-Z-Boy Inc. 6,857 152,225 Wiley (John) & Sons Inc. Class A 5,839 151,756 BearingPoint Inc./1/ 18,988 151,524 McDATA Corp. Class A/1/ 12,608 150,918 Owens-Illinois Inc./1/ 13,170 150,401 AGCO Corp./1/ 8,750 149,975 Affymetrix Inc./1/ 7,131 149,680 Piedmont Natural Gas Co. 3,832 149,448 UGI Corp. 5,129 148,382 Crane Co. 6,328 148,138 Jeffries Group Inc. 5,152 148,120 NetScreen Technologies Inc./1/ 6,643 147,674 ADTRAN Inc. 2,410 147,444 Scotts Co. (The) Class A/1/ 2,657 145,338 ICN Pharmaceuticals Inc. 8,426 144,590 Metro-Goldwyn-Mayer Inc./1/ 9,417 144,457 Henry (Jack) & Associates Inc. 8,253 143,520 Provident Financial Group Inc. 5,119 143,127 Ethan Allen Interiors Inc. 3,963 142,668 Imation Corp. 4,367 142,583 Duquesne Light Holdings Inc. 9,164 142,042 Mercury General Corp. 3,154 141,236 Crescent Real Estate Equities Co. 9,695 140,577 Radio One Inc. Class D/1/ 9,758 140,125 Pharmaceutical Product Development Inc./1/ 5,840 140,102 DoubleClick Inc./1/ 12,959 139,568 Packaging Corporation of America/1/ 7,170 139,241 Polo Ralph Lauren Corp. 5,174 138,767 Getty Images Inc./1/ 3,936 138,390 ArvinMeritor Inc. 7,745 137,938 SCHEDULES OF INVESTMENTS 111 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL MIDCAP INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Barnes & Noble Inc./1/ 5,407 $ 137,392 Lafarge North America Inc. 3,927 136,660 Swift Transportation Co. Inc./1/ 5,977 135,618 Furniture Brands International Inc./1/ 5,560 133,996 Readers Digest Association Inc. (The) 9,506 132,989 Station Casinos Inc. 4,340 132,804 Community Health Systems Inc./1/ 6,107 132,522 International Bancshares Corp. 3,195 132,433 Friedman, Billings, Ramsey Group, Inc. Class A 7,658 132,100 Lancaster Colony Corp. 3,316 131,877 Harte-Hanks Inc. 7,103 130,979 United Bancshares Inc. 4,368 130,822 IKON Office Solutions Inc. 17,738 129,665 Airgas Inc. 7,278 129,548 Valassis Communications Inc./1/ 4,905 129,492 First Bancorp 4,181 128,566 Boise Cascade Corp. 4,656 128,506 CBL & Associates Properties Inc. 2,562 127,844 McClatchy Co. (The) Class A 2,148 127,763 St. Joe Company (The) 3,972 127,422 Hovnanian Enterprises Inc. Class A/1/ 1,964 126,423 Erie Indemnity Co. Class A 3,194 124,247 University of Phoenix Online/1/ 1,864 124,105 Grant Prideco Inc./1/ 12,107 123,370 Florida Rock Industries Inc. 2,480 123,008 Downey Financial Corp. 2,628 122,806 Acxiom Corp./1/ 7,755 122,219 Amphenol Corp. Class A/1/ 2,344 122,005 Diamond Offshore Drilling Inc. 6,346 121,209 Media General Inc. Class A 1,980 120,978 Dynegy Inc. Class A/1/ 33,600 120,960 IDT Corp./1/ 6,786 119,976 Trizec Properties Inc. 9,773 119,817 Peabody Energy Corp. 3,818 119,771 Total System Services Inc. 4,490 118,312 Cousins Properties Inc. 4,254 118,048 Global Payments Inc. 3,275 117,900 Gemstar-TV Guide International Inc./1/ 24,418 115,497 BlackRock Inc. 2,318 113,582 M.D.C. Holdings Inc. 2,090 112,860 Loews Corporation - Carolina Group 4,902 112,746 Bio-Rad Laboratories Inc. Class A/1/ 2,109 107,559 Blyth Inc. 3,970 107,111 Werner Enterprises Inc. 4,643 106,371 Regency Centers Corp. 2,886 106,349 American National Insurance Co. 1,241 105,547 FactSet Research Systems Inc. 2,369 105,065 Worthington Industries Inc. 8,252 103,645 PepsiAmericas Inc. 6,982 101,169 Scholastic Corp./1/ 3,496 100,650 Talbots Inc. (The) 2,886 100,577 InterDigital Communications Corp./1/ 6,701 100,515 Reinsurance Group of America Inc. 2,446 99,675 American Axle & Manufacturing Holdings Inc./1/ 3,354 99,211 Winn-Dixie Stores Inc. 10,178 98,218 Crown Castle International Corp./1/ 10,199 95,973 Timberland Co. Class A/1/ 2,228 95,046 Premcor Inc./1/ 4,086 94,673 Tootsie Roll Industries Inc. 3,006 93,186 People's Bank 3,103 92,904 Blockbuster Inc. 4,399 92,379 LaBranche & Co. Inc. 6,308 92,097 American Financial Group Inc. 4,196 91,263 LNR Property Corp. 2,218 90,827 Columbia Sportswear Co./1/ 1,711 90,255 Hearst-Argyle Television Inc./1/ 3,718 89,976 Cox Radio Inc. Class A/1/ 4,108 89,842 Westport Resources Corp./1/ 3,805 89,570 AVX Corp. 6,419 87,876 Timken Co. (The) 5,637 85,908 LeapFrog Enterprises Inc./1/ 2,244 85,272 United Defense Industries Inc./1/ 2,954 83,864 WellChoice Inc./1/ 2,741 82,586 112 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL MIDCAP INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Western Gas Resources Inc. 2,166 $ 82,308 Alleghany Corp./1/ 414 80,834 Marvel Enterprises Inc./1/ 3,632 80,812 Endo Pharmaceuticals Holdings Inc./1/ 3,873 79,203 BOK Financial Corp./1/ 2,090 78,730 Capitol Federal Financial 2,562 75,220 Nextel Partners Inc. Class A/1/ 9,382 73,649 Instinet Group Inc./1/ 15,156 72,279 Interactive Data Corp./1/ 4,485 70,863 Regal Entertainment Group Class A 3,738 69,527 American Pharmaceutical Partners Inc./1/ 2,217 69,503 RealNetworks Inc./1/ 9,906 64,884 Nuveen Investments Inc. Class A 2,250 61,875 UnitedGlobalCom Inc. Class A/1/ 10,043 61,363 Wynn Resorts Ltd./1/ 3,373 61,321 Wesco Financial Corp. 179 60,855 Steelcase Inc. Class A 5,107 60,160 CNA Financial Corp./1/ 2,837 59,634 Student Loan Corp. 490 58,472 West Corp./1/ 2,319 55,169 United States Cellular Corp./1/ 1,844 53,660 Entravision Communications Corp./1/ 5,541 52,639 MSC Industrial Direct Co. Inc. Class A 2,502 52,167 Hewitt Associates Inc. Class A/1/ 2,136 52,012 Eon Labs Inc./1/ 1,347 51,657 PanAmSat Corp./1/ 3,559 51,534 CONSOL Energy Inc. 2,541 47,212 Alliance Data Systems Corp./1/ 1,772 46,781 Texas Genco Holdings Inc. 1,798 42,792 Chicago Mercantile Exchange Holdings Inc. 582 40,047 Southern Peru Copper Corp. 1,724 38,135 Odyssey Re Holdings Corp. 1,504 30,952 MEMC Electronics Materials Inc./1/ 2,673 29,162 McLeodUSA Inc. Class A Escrow/2/ 3,687 - TOTAL COMMON STOCKS (Cost: $281,205,820) 297,968,034 SHARES OR SECURITY PRINCIPAL VALUE ---------------------------------------------------------------------------- SHORT TERM INVESTMENTS - 8.73% MONEY MARKET FUNDS - 5.28% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares/3/,/4/ 10,586,166 $ 10,586,166 Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares/3/,/4/ 3,762,835 3,762,835 BlackRock Temp Cash Money Market Fund/3/ 167,153 167,153 Short Term Investment Co. - Liquid Assets Money Market Portfolio/3/ 887,179 887,179 Short Term Investment Co. - Prime Money Market Portfolio, Institutional Shares/3/ 342,076 342,076 15,745,409 FLOATING RATE NOTES - 2.00% Beta Finance Inc. 1.08%, 05/20/04/3/ $ 171,038 171,022 1.08%, 09/15/04/3/ 342,076 342,043 1.17%, 08/23/04/3/ 171,038 171,169 CC USA Inc. 1.06%, 05/24/04/3/ 342,076 342,054 1.08%, 04/19/04/3/ 150,513 150,509 1.12%, 07/15/04/3/ 171,038 171,087 Dorada Finance Inc. 1.08%, 05/20/04/3/ 342,076 342,043 1.24%, 08/09/04/3/ 85,519 85,508 Five Finance Inc. 1.09%, 04/15/04/3/ 171,038 171,038 HBOS Treasury Services PLC 1.13%, 06/24/08/3/ 342,076 342,076 Holmes Financing PLC 1.08%, 04/15/04/3/ 68,415 68,415 K2 USA LLC 1.08%, 08/16/04/3/ 85,519 85,508 1.08%, 09/27/04/3/ 369,442 369,387 1.09%, 04/13/04/3/ 171,038 171,034 1.09%, 05/17/04/3/ 171,038 171,033 SCHEDULES OF INVESTMENTS 113 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL MIDCAP INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE ---------------------------------------------------------------------------- Links Finance LLC 1.05%, 07/20/04/3/ $ 136,830 $ 136,808 1.08%, 05/04/04/3/ 171,038 171,033 1.08%, 06/28/04/3/ 171,038 171,013 1.09%, 03/29/04/3/ 171,038 171,038 Nationwide Building Society 1.08%, 07/23/04/3/ 256,557 256,557 Sigma Finance Inc. 1.05%, 07/20/04/3/ 171,038 171,011 1.07%, 10/15/03/3/ 342,076 342,075 1.07%, 07/01/04/3/ 171,038 171,006 1.24%, 08/06/04/3/ 85,519 85,512 Tango Finance Corp. 1.05%, 07/15/04/3/ 102,623 102,596 1.06%, 07/06/04/3/ 102,623 102,615 WhistleJacket Capital LLC 1.08%, 09/15/04/3/ 171,038 171,005 White Pine Finance LLC 1.08%, 05/17/04/3/ 205,246 205,246 1.08%, 07/06/04/3/ 205,246 205,231 1.08%, 08/26/04/3/ 171,038 171,014 1.09%, 04/20/04/3/ 171,038 171,038 5,958,724 COMMERCIAL PAPER - 1.04% Amsterdam Funding Corp. 1.06%, 10/16/03/3/ 162,486 162,413 Blue Ridge Asset Funding Corp. 1.05%, 10/17/03/3/ 171,038 170,958 Edison Asset Securitization 1.07%, 10/23/03/3/ 321,551 321,341 Gemini Securitization Corp. 1.05%, 10/17/03/3/ 119,727 119,671 Greenwich Funding Corp. 1.06%, 10/16/03/3/ 201,825 201,736 Jupiter Securitization Corp. 1.05%, 10/20/03/3/ 171,038 170,943 New Center Asset Trust 1.06%, 10/22/03/3/ 171,038 170,932 Park Avenue Receivables Corp. 1.05%, 10/20/03/3/ 171,038 170,943 Preferred Receivables Funding Corp. 1.06%, 10/08/03/3/ 171,038 171,003 Receivables Capital Corp. 1.05%, 10/15/03/3/ 114,965 114,918 Sydney Capital Corp. 1.07%, 10/17/03/3/ 138,541 138,475 UBS Finance (Delaware) Inc. 1.03%, 10/08/03/3/ 342,076 342,007 1.05%, 10/15/03/3/ 171,038 170,968 1.11%, 10/01/03/3/ 684,152 684,152 3,110,460 TIME DEPOSITS - 0.32% Abbey National Treasury Services PLC 1.15%, 10/01/03/3/ 171,038 171,038 Canadian Imperial Bank of Commerce 1.06%, 10/08/03/3/ 85,519 85,519 1.08%, 10/30/03/3/ 136,830 136,830 1.37%, 08/26/04/3/ 342,076 342,076 Toronto-Dominion Bank 1.33%, 08/23/04/3/ 222,349 222,249 957,712 REPURCHASE AGREEMENTS - 0.09% Lehman Brothers Inc. 1.10%, 10/01/03/3/ 273,661 273,661 273,661 TOTAL SHORT TERM INVESTMENTS (Cost: $26,045,966) 26,045,966 TOTAL INVESTMENTS IN SECURITIES - 108.63% (Cost $307,251,786) 324,014,000 Other Assets, Less Liabilities - (8.63%) (25,752,748) --------------- NET ASSETS - 100.00% $ 298,261,252 =============== /1/ Non-income earning securities. /2/ Security valued at fair value in accordance with procedures approved by the Board of Trustees. See Note 1. /3/ All or a portion of this security represents investments of securities lending collateral. /4/ Issuer is an affiliate of the Fund's investment advisor. See Note 2. SEE NOTES TO FINANCIAL STATEMENTS. 114 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) iSHARES RUSSELL MIDCAP GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- COMMON STOCKS - 99.96% Staples Inc./1/ 114,755 $ 2,725,431 Starbucks Corp./1/ 94,361 2,717,597 Zimmer Holdings Inc./1/ 47,461 2,615,101 Electronic Arts Inc./1/ 27,143 2,503,399 Allergan Inc. 31,464 2,477,161 TJX Companies Inc. 124,089 2,409,808 KLA-Tencor Corp./1/ 45,984 2,363,578 International Game Technology Inc. 82,573 2,324,430 Symantec Corp./1/ 35,711 2,250,507 Adobe Systems Inc. 56,054 2,200,680 Intuit Inc./1/ 44,451 2,144,316 Biomet Inc. 62,365 2,096,088 Yum! Brands Inc./1/ 70,688 2,093,779 MedImmune Inc./1/ 61,050 2,015,260 Mattel Inc. 106,286 2,015,183 Block (H & R) Inc. 43,296 1,868,222 Lexmark International Inc./1/ 28,420 1,790,744 Altera Corp./1/ 92,581 1,749,781 Mylan Laboratories Inc. 43,807 1,693,141 SunGard Data Systems Inc./1/ 63,738 1,676,947 Synovus Financial Corp. 66,824 1,669,932 Moody's Corp. 30,082 1,653,608 Concord EFS Inc./1/ 117,651 1,608,289 Fiserv Inc./1/ 44,150 1,599,554 Corning Inc./1/ 164,882 1,553,188 Network Appliance Inc./1/ 73,062 1,499,963 Pitney Bowes Inc. 38,115 1,460,567 Family Dollar Stores Inc. 36,262 1,446,491 AutoZone Inc./1/ 16,111 1,442,418 Caremark Rx Inc./1/ 63,282 1,430,173 Broadcom Corp. Class A/1/ 52,621 1,400,771 Dollar General Corp. 69,063 1,381,260 Biogen Inc./1/ 35,907 1,372,725 McKesson Corp. 37,967 1,263,921 Health Management Associates Inc. Class A 57,749 1,259,506 ITT Industries Inc. 20,868 1,248,741 American Standard Companies Inc./1/ 14,821 1,248,669 IMS Health Inc. 58,817 1,241,039 BJ Services Co./1/ 35,854 1,225,131 Juniper Networks Inc./1/ 80,862 1,206,461 National Semiconductor Corp./1/ 37,334 1,205,515 Coach Inc./1/ 21,974 1,199,780 Microchip Technology Inc. 49,211 1,178,111 JDS Uniphase Corp./1/ 327,025 1,177,290 Avery Dennison Corp. 23,201 1,172,115 Marriott International Inc. Class A 27,141 1,167,877 Ecolab Inc. 45,866 1,158,116 RadioShack Corp. 40,744 1,157,537 EOG Resources Inc. 27,724 1,157,200 Affiliated Computer Services Inc. Class A/1/ 23,573 1,147,769 Agere Systems Inc. Class B/1/ 396,738 1,146,573 Chiron Corp./1/ 21,663 1,119,760 Sprint Corp. (PCS Group)/1/ 189,189 1,084,053 BEA Systems Inc./1/ 89,334 1,076,475 Cintas Corp. 29,153 1,073,997 QLogic Corp./1/ 22,702 1,067,221 Quest Diagnostics Inc./1/ 17,579 1,065,991 Univision Communications Inc. Class A/1/ 33,271 1,062,354 Career Education Corp./1/ 23,114 1,047,064 Freeport-McMoRan Copper & Gold Inc. 31,457 1,041,227 Synopsys Inc./1/ 33,244 1,022,918 Kinder Morgan Inc. 18,561 1,002,480 Tiffany & Co. 26,742 998,279 Novellus Systems Inc./1/ 29,428 993,195 IDEC Pharmaceuticals Corp./1/ 29,569 980,212 New York Times Co. Class A 22,315 969,810 Sealed Air Corp./1/ 20,429 964,862 Legg Mason Inc. 13,337 962,931 Clorox Co. 20,898 958,591 Applera Corp. - Applied Biosystems Group 42,828 955,493 Varian Medical Systems Inc./1/ 16,517 949,397 Laboratory Corp. of America Holdings/1/ 32,993 946,899 SanDisk Corp./1/ 14,771 941,504 Dollar Tree Stores Inc./1/ 27,672 927,012 Newell Rubbermaid Inc. 42,646 924,139 SCHEDULES OF INVESTMENTS 115 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL MIDCAP GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Express Scripts Inc./1/ 14,963 $ 914,987 Citrix Systems Inc./1/ 40,135 886,181 Jabil Circuit Inc./1/ 33,673 877,182 Hershey Foods Corp. 11,951 868,599 Ross Stores Inc. 18,703 867,071 DENTSPLY International Inc. 19,078 855,458 Patterson Dental Co./1/ 14,700 846,426 Celgene Corp./1/ 19,488 844,415 Teradyne Inc./1/ 44,893 835,010 Oxford Health Plans Inc./1/ 20,164 832,975 Aetna Inc. 13,648 832,937 CDW Corp. 14,377 830,128 JetBlue Airways Corp./1/ 13,600 829,192 Waters Corp./1/ 30,077 825,012 CarMax Inc./1/ 25,050 818,133 Lincare Holdings Inc./1/ 22,289 816,892 Expeditors International Washington Inc. 23,648 813,728 Mercury Interactive Corp./1/ 17,759 806,436 Bard (C.R.) Inc. 11,316 803,436 Micron Technology Inc./1/ 59,667 800,731 AdvancePCS/1/ 17,402 793,009 Molex Inc. 27,614 789,484 Estee Lauder Companies Inc. Class A 23,089 787,335 Brinker International Inc./1/ 23,507 784,194 PETsMART Inc./1/ 34,264 777,793 Barr Laboratories Inc./1/ 11,191 763,338 Black & Decker Corp. 18,780 761,529 AmerisourceBergen Corp. 13,944 753,673 Dun & Bradstreet Corp./1/ 18,077 750,919 AES Corp. (The)/1/ 100,987 749,324 Unisys Corp./1/ 55,125 745,841 Praxair Inc. 11,982 742,285 T. Rowe Price Group Inc. 17,901 738,595 New York Community Bancorp Inc. 23,370 736,389 BMC Software Inc./1/ 51,411 716,155 Pepsi Bottling Group Inc. 34,396 707,870 Harrah's Entertainment Inc. 16,592 698,689 Robert Half International Inc./1/ 35,635 694,882 Lam Research Corp./1/ 30,798 682,176 Whole Foods Market Inc./1/ 12,340 680,921 Beckman Coulter Inc. 14,810 674,447 ChoicePoint Inc./1/ 20,002 670,067 Hilton Hotels Corp. 40,562 657,916 Doral Financial Corp. 13,994 657,718 DST Systems Inc./1/ 17,364 652,886 IVAX Corp./1/ 33,009 646,976 Gentex Corp./1/ 18,465 643,321 Scripps (E.W.) Co. Class A 7,502 638,420 Chico's FAS Inc./1/ 20,826 638,109 Amylin Pharmaceuticals Inc./1/ 22,549 636,784 Ball Corp. 11,768 635,472 CH Robinson Worldwide Inc. 17,056 634,654 Darden Restaurants Inc. 33,264 632,016 Ameritrade Holding Corp./1/ 56,150 631,687 Commerce Bancorp Inc. 13,130 629,058 Westwood One Inc./1/ 20,731 625,869 NVR Inc./1/ 1,337 623,710 Fair Isaac Corp. 10,578 623,679 Gallagher (Arthur J.) & Co. 21,884 618,880 Abercrombie & Fitch Co. Class A/1/ 22,268 617,046 Western Digital Corp./1/ 47,674 614,518 Equifax Inc. 27,534 613,182 Harman International Industries Inc. 6,229 612,622 Corinthian Colleges Inc./1/ 10,644 608,411 McCormick & Co. Inc. 22,019 603,761 Monster Worldwide Inc./1/ 23,600 594,248 Coventry Health Care Inc./1/ 11,166 588,895 Smith International Inc./1/ 16,305 586,654 Symbol Technologies Inc. 49,068 586,363 Mid Atlantic Medical Services Inc./1/ 11,331 582,753 NVIDIA Corp./1/ 36,404 579,224 SEI Investment Co. 17,796 578,370 First Health Group Corp./1/ 21,774 569,390 Iron Mountain Inc./1/ 15,740 565,066 PeopleSoft Inc./1/ 31,057 564,927 Cephalon Inc./1/ 12,268 563,347 Eaton Vance Corp. 16,794 562,263 WebMD Corp./1/ 62,930 561,336 Krispy Kreme Doughnuts Inc./1/ 14,457 556,594 Siebel Systems Inc./1/ 57,082 554,837 Rockwell Collins Inc. 21,924 553,581 116 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL MIDCAP GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Pharmaceutical Resources Inc./1/ 8,098 $ 552,446 Fastenal Co. 14,527 549,121 Williams-Sonoma Inc./1/ 20,246 546,237 Cognizant Technology Solutions Corp./1/ 14,970 545,956 PMC-Sierra Inc./1/ 41,097 542,111 Michaels Stores Inc. 13,210 538,440 Universal Health Services Inc. Class B/1/ 10,886 538,313 UTStarcom Inc./1/ 16,878 536,889 Sanmina-SCI Corp./1/ 55,176 535,207 Health Net Inc./1/ 16,804 532,183 Patterson-UTI Energy Inc./1/ 19,510 528,136 Foundry Networks Inc./1/ 24,506 527,124 Sepracor Inc./1/ 19,063 524,995 Millipore Corp./1/ 11,029 507,996 Pall Corp. 22,477 504,384 Federated Investors Inc. Class B 18,008 498,822 Manpower Inc. 13,427 498,142 Investors Financial Services Corp. 15,819 496,717 Solectron Corp./1/ 84,907 496,706 Millennium Pharmaceuticals Inc./1/ 32,209 495,696 TCF Financial Corp. 10,310 494,364 ITT Educational Services Inc./1/ 10,285 492,857 XTO Energy Inc. 23,430 491,796 Neuberger Berman Inc. 11,614 486,278 Cooper Cameron Corp./1/ 10,499 485,159 GTECH Holdings Corp. 11,320 485,062 ImClone Systems Inc./1/ 12,478 483,148 VeriSign Inc./1/ 35,486 477,996 Maytag Corp. 19,049 475,654 Rent-A-Center Inc./1/ 14,630 472,549 Dow Jones & Co. Inc. 9,975 472,316 Network Associates Inc./1/ 33,798 465,060 Zebra Technologies Corp. Class A/1/ 8,982 463,202 DaVita Inc./1/ 14,478 460,835 Jacobs Engineering Group Inc./1/ 10,096 455,330 Integrated Circuit Systems Inc./1/ 14,883 447,085 Reynolds & Reynolds Co. (The) Class A 16,130 444,381 Education Management Corp./1/ 7,667 442,156 Corporate Executive Board Co. (The)/1/ 9,194 431,658 Donaldson Co. Inc. 8,004 431,416 ARAMARK Corp. Class B/1/ 17,162 429,565 Waddell & Reed Financial Inc. Class A 18,103 426,688 Pactiv Corp./1/ 21,025 426,387 Weight Watchers International Inc./1/ 10,241 426,026 Outback Steakhouse Inc. 11,237 425,545 Certegy Inc. 13,142 421,990 Applebee's International Inc. 13,350 420,258 Phelps Dodge Corp./1/ 8,967 419,656 Advance Auto Parts Inc./1/ 5,894 417,885 Lamar Advertising Co./1/ 14,080 413,107 Graco Inc. 10,998 412,975 Starwood Hotels & Resorts Worldwide Inc. 11,761 409,283 Cheesecake Factory (The)/1/ 11,249 406,876 Sigma-Aldrich Corp. 7,810 405,651 Rite Aid Corp./1/ 78,573 405,437 Centex Corp. 5,161 401,939 Omnicare Inc. 11,090 399,905 Herman Miller Inc. 17,517 398,862 Edwards Lifesciences Corp./1/ 14,667 397,182 Chesapeake Energy Corp. 36,818 396,898 L-3 Communications Holdings Inc./1/ 9,147 395,608 Fisher Scientific International Inc./1/ 9,920 393,725 Polaris Industries Inc. 5,307 393,514 SICOR Inc./1/ 19,859 382,882 Stericycle Inc./1/ 8,096 381,888 Popular Inc. 9,390 373,722 Entercom Communications Corp./1/ 8,338 373,709 Leggett & Platt Inc. 17,216 372,382 Macromedia Inc./1/ 14,960 370,110 E*TRADE Group Inc./1/ 39,860 369,104 Brown & Brown Inc. 11,961 368,160 Emulex Corp./1/ 14,354 365,596 Steris Corp./1/ 15,782 363,302 Medicis Pharmaceutical Corp. Class A 6,186 362,500 Apria Healthcare Group Inc./1/ 13,231 362,265 Pixar Inc./1/ 5,396 359,158 SCHEDULES OF INVESTMENTS 117 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL MIDCAP GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- North Fork Bancorp Inc. 10,241 $ 355,875 Ruby Tuesday Inc. 14,677 353,862 ENSCO International Inc. 13,150 352,683 Henry Schein Inc./1/ 6,203 351,710 ResMed Inc./1/ 7,981 351,004 Intersil Corp. Class A/1/ 14,687 349,551 Alliant Techsystems Inc./1/ 7,217 346,777 International Flavors & Fragrances Inc. 10,462 346,083 CIENA Corp./1/ 57,467 339,630 Respironics Inc./1/ 8,108 338,752 Charles River Laboratories International Inc./1/ 11,027 338,419 BISYS Group Inc. (The)/1/ 25,617 336,864 Rambus Inc./1/ 19,916 334,190 Dover Corp. 9,256 327,385 DeVry Inc./1/ 13,821 327,005 Cree Inc./1/ 17,616 326,248 Pier 1 Imports Inc. 16,947 326,060 Advanced Micro Devices Inc./1/ 29,140 323,745 Ceridian Corp./1/ 17,356 323,169 IDEXX Laboratories Inc./1/ 7,544 320,545 Silicon Laboratories Inc./1/ 6,997 314,515 Amkor Technology Inc./1/ 22,021 312,918 Providian Financial Corp./1/ 26,119 307,943 Autoliv Inc. 10,152 306,286 Cablevision Systems Corp./1/ 16,886 305,637 Red Hat Inc./1/ 30,204 305,060 Performance Food Group Co./1/ 7,470 304,104 99 Cents Only Stores/1/ 9,365 302,864 Mettler Toledo International Inc./1/ 8,392 301,692 FMC Technologies Inc./1/ 14,068 301,337 Wiley (John) & Sons Inc. Class A 11,545 300,055 National Instruments Corp. 7,422 298,735 Dial Corp. (The) 13,790 297,037 Affymetrix Inc./1/ 14,141 296,820 McDATA Corp. Class A/1/ 24,753 296,293 Claire's Stores Inc. 8,825 295,284 Cypress Semiconductor Corp./1/ 16,524 292,144 Rowan Companies Inc./1/ 11,814 290,388 NetScreen Technologies Inc./1/ 13,045 289,990 ADTRAN Inc. 4,733 289,565 Comverse Technology Inc./1/ 19,352 289,506 Tenet Healthcare Corp./1/ 19,951 288,890 LSI Logic Corp./1/ 32,037 288,013 O'Reilly Automotive Inc./1/ 7,815 287,358 Xerox Corp./1/ 27,905 286,305 Navistar International Corp./1/ 7,663 285,677 International Rectifier Corp./1/ 7,585 283,982 Mohawk Industries Inc./1/ 3,928 280,145 Henry (Jack) & Associates Inc. 16,057 279,231 Whirlpool Corp. 4,113 278,738 Pharmaceutical Product Development Inc./1/ 11,595 278,164 Tellabs Inc./1/ 40,281 273,508 Getty Images Inc./1/ 7,717 271,330 Coca-Cola Enterprises Inc. 14,142 269,547 Qwest Communications International Inc./1/ 77,243 262,626 Station Casinos Inc. 8,560 261,936 Varco International Inc./1/ 15,243 257,759 Storage Technology Corp./1/ 10,571 255,184 International Speedway Corp. Class A 5,787 253,991 Avocent Corp./1/ 8,296 251,286 St. Joe Company (The) 7,794 250,031 Andrx Group/1/ 13,444 248,848 SouthTrust Corp. 8,413 247,258 Viad Corp. 10,352 247,206 Triad Hospitals Inc./1/ 8,159 247,054 King Pharmaceuticals Inc./1/ 16,278 246,612 University of Phoenix Online/1/ 3,673 244,548 Amphenol Corp. Class A/1/ 4,659 242,501 CBRL Group Inc. 6,722 238,497 Total System Services Inc. 8,974 236,465 Renal Care Group Inc./1/ 6,876 234,815 Mandalay Resort Group 5,886 233,144 Hillenbrand Industries Inc. 4,033 227,542 Grant Prideco Inc./1/ 22,279 227,023 Protein Design Labs Inc./1/ 16,369 226,874 Global Payments Inc. 6,269 225,684 Telephone & Data Systems Inc. 3,948 223,220 118 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL MIDCAP GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Cadence Design Systems Inc./1/ 16,595 $ 222,373 Harte-Hanks Inc. 12,018 221,612 Key Energy Services Inc./1/ 22,931 221,284 BlackRock Inc. 4,476 219,324 HON Industries Inc. 5,908 218,360 Noble Energy Inc. 5,598 214,403 Friedman, Billings, Ramsey Group, Inc. Class A 12,389 213,710 Meredith Corp. 4,606 212,659 Maxtor Corp./1/ 17,432 212,147 Human Genome Sciences Inc./1/ 15,526 212,085 Bio-Rad Laboratories Inc. Class A/1/ 4,144 211,344 Church & Dwight Co. Inc. 6,011 210,325 Novell Inc./1/ 39,397 209,986 American Tower Corp. Class A/1/ 20,591 208,999 Big Lots Inc./1/ 13,115 207,348 Markel Corp./1/ 776 207,192 FactSet Research Systems Inc. 4,650 206,227 ICOS Corp./1/ 5,375 205,970 Washington Post Company (The) Class B 307 204,155 National-Oilwell Inc./1/ 11,226 203,640 DoubleClick Inc./1/ 18,883 203,370 Pride International Inc./1/ 11,902 201,739 InterDigital Communications Corp./1/ 13,373 200,595 ADC Telecommunications Inc./1/ 85,910 200,170 Brocade Communications Systems Inc./1/ 37,532 195,917 Hudson City Bancorp Inc. 6,352 195,896 MGM Grand Inc./1/ 5,242 191,595 Newfield Exploration Co./1/ 4,895 188,800 Allied Waste Industries Inc./1/ 17,430 188,244 Swift Transportation Co. Inc./1/ 8,241 186,988 Timberland Co. Class A/1/ 4,373 186,552 Invitrogen Corp./1/ 3,134 181,741 Atmel Corp./1/ 45,019 180,526 Del Monte Foods Co./1/ 20,671 180,044 Harris Corp. 5,014 179,451 Regis Corp. 5,546 178,027 Thermo Electron Corp./1/ 8,202 177,983 Edwards (A.G.) Inc. 4,625 177,646 Knight Ridder Inc. 2,643 176,288 Energizer Holdings Inc./1/ 4,794 176,275 HCC Insurance Holdings Inc. 6,049 175,905 Advanced Fibre Communications Inc./1/ 8,346 175,016 Tidewater Inc. 6,140 173,762 Talbots Inc. (The) 4,976 173,414 PerkinElmer Inc. 11,323 173,355 Columbia Sportswear Co./1/ 3,278 172,914 Acxiom Corp./1/ 10,781 169,909 LeapFrog Enterprises Inc./1/ 4,389 166,782 United Defense Industries Inc./1/ 5,780 164,094 Polycom Inc./1/ 9,650 160,286 Endo Pharmaceuticals Holdings Inc./1/ 7,829 160,103 Applied Micro Circuits Corp./1/ 32,646 158,986 Neurocrine Biosciences Inc./1/ 3,201 158,513 Marvel Enterprises Inc./1/ 7,104 158,064 Fairchild Semiconductor International Inc. Class A/1/ 9,399 155,835 Constellation Brands Inc./1/ 5,067 154,493 SPX Corp./1/ 3,346 151,507 First Bancorp 4,905 150,829 CheckFree Corp./1/ 7,506 150,120 Hunt (J.B.) Transport Services Inc./1/ 5,640 146,753 Northern Trust Corp. 3,440 145,994 Valley National Bancorp 5,243 145,965 Nextel Partners Inc. Class A/1/ 18,545 145,578 American Pharmaceutical Partners Inc./1/ 4,386 137,501 Watson Pharmaceuticals Inc./1/ 3,281 136,785 Belo (A.H.) Corp. 5,379 130,441 Agilent Technologies Inc./1/ 5,863 129,631 Nuveen Investments Inc. Class A 4,653 127,957 Wendy's International Inc. 3,955 127,746 Community Health Systems Inc./1/ 5,821 126,316 Integrated Device Technology Inc./1/ 10,159 126,175 Radio One Inc. Class D/1/ 8,703 124,975 AMETEK Inc. 2,901 124,337 RealNetworks Inc./1/ 18,910 123,860 Chelsea Property Group Inc. 2,503 119,894 AmeriCredit Corp./1/ 11,440 117,832 SCHEDULES OF INVESTMENTS 119 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL MIDCAP GROWTH INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Lennar Corp. Class A 1,506 $ 117,152 Manor Care Inc. 3,849 115,470 Diamond Offshore Drilling Inc. 5,978 114,180 ICN Pharmaceuticals Inc. 6,632 113,805 Cox Radio Inc. Class A/1/ 4,864 106,376 Eon Labs Inc./1/ 2,757 105,731 IDT Corp./1/ 5,897 104,259 West Corp./1/ 4,307 102,464 Hewitt Associates Inc. Class A/1/ 4,169 101,515 Alliance Data Systems Corp./1/ 3,733 98,551 Westamerica Bancorp 2,118 94,145 Werner Enterprises Inc. 4,069 93,221 Hovnanian Enterprises Inc. Class A/1/ 1,439 92,628 CONSOL Energy Inc. 4,969 92,324 MSC Industrial Direct Co. Inc. Class A 4,401 91,761 Mills Corp. 2,330 91,685 Worthington Industries Inc. 7,212 90,583 Radian Group Inc. 2,033 90,265 Tektronix Inc./1/ 3,629 89,818 Arrow Electronics Inc./1/ 4,864 89,449 D.R. Horton Inc. 2,639 86,295 Pioneer Natural Resources Co./1/ 3,369 85,775 Brown-Forman Corp. Class B 1,076 85,133 Convergys Corp./1/ 4,624 84,804 Crown Castle International Corp./1/ 8,926 83,994 Ambac Financial Group Inc. 1,288 82,432 Chicago Mercantile Exchange Holdings Inc. 1,145 78,787 BearingPoint Inc./1/ 9,650 77,007 First Tennessee National Corp. 1,773 75,282 Interpublic Group of Companies Inc. 5,112 72,181 Borders Group Inc./1/ 3,814 72,161 Mercantile Bankshares Corp. 1,800 72,000 Cousins Properties Inc. 2,548 70,707 Reebok International Ltd. 2,098 70,136 Timken Co. (The) 4,400 67,056 Interactive Data Corp./1/ 4,077 64,417 Delphi Corp. 6,408 57,992 MEMC Electronics Materials Inc./1/ 5,190 56,623 Vulcan Materials Co. 1,372 54,757 Pentair Inc. 1,332 53,107 Wynn Resorts Ltd./1/ 2,921 53,104 Blockbuster Inc. 2,495 52,395 Scotts Co. (The) Class A/1/ 932 50,980 Alberto-Culver Co. Class B 861 50,644 LaBranche & Co. Inc. 3,410 49,786 Florida Rock Industries Inc. 960 47,616 Fluor Corp. 1,242 46,364 Entravision Communications Corp./1/ 4,805 45,647 Barnes & Noble Inc./1/ 1,685 42,816 Westport Resources Corp./1/ 1,799 42,348 United States Cellular Corp./1/ 1,383 40,245 LNR Property Corp. 962 39,394 Valspar Corp. (The) 777 36,247 Hudson United Bancorp 1,013 35,627 Southern Peru Copper Corp. 1,467 32,450 Bausch & Lomb Inc. 731 32,274 Transatlantic Holdings Inc. 419 29,799 Compuware Corp./1/ 5,489 29,421 Autodesk Inc. 1,693 28,815 Jeffries Group Inc. 968 27,830 Apogent Technologies Inc./1/ 1,333 27,806 Berkley (W.R.) Corp. 778 26,654 IndyMac Bancorp Inc. 1,141 26,437 Cabot Corp. 891 25,402 Tootsie Roll Industries Inc. 807 25,017 Gemstar-TV Guide International Inc./1/ 4,877 23,068 WellChoice Inc./1/ 723 21,784 Erie Indemnity Co. Class A 502 19,528 La-Z-Boy Inc. 829 18,404 UnitedGlobalCom Inc. Class A/1/ 2,261 13,815 Polo Ralph Lauren Corp. 505 13,544 Scholastic Corp./1/ 463 13,330 TOTAL COMMON STOCKS (COST: $223,669,224) 239,855,315 120 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL MIDCAP GROWTH INDEX FUND September 30, 2003 SHARES OR SECURITY PRINCIPAL VALUE ---------------------------------------------------------------------------- SHORT TERM INVESTMENTS - 9.17% MONEY MARKET FUNDS - 5.52% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares/2/,/3/ 8,854,400 $ 8,854,400 Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares/2/,/3/ 3,202,053 3,202,053 BlackRock Temp Cash Money Market Fund/2/ 142,242 142,242 Short Term Investment Co. - Liquid Assets Money Market Portfolio/2/ 754,961 754,961 Short Term Investment Co. - Prime Money Market Portfolio, Institutional Shares/2/ 291,096 291,096 13,244,752 FLOATING RATE NOTES - 2.11% Beta Finance Inc. 1.08%, 05/20/04/2/ $ 145,548 145,534 1.08%, 09/15/04/2/ 291,096 291,068 1.17%, 08/23/04/2/ 145,548 145,660 CC USA Inc. 1.06%, 05/24/04/2/ 291,096 291,077 1.08%, 04/19/04/2/ 128,082 128,079 1.12%, 07/15/04/2/ 145,548 145,589 Dorada Finance Inc. 1.08%, 05/20/04/2/ 291,096 291,068 1.24%, 08/09/04/2/ 72,774 72,765 Five Finance Inc. 1.09%, 04/15/04/2/ 145,548 145,548 HBOS Treasury Services PLC 1.13%, 06/24/08/2/ 291,096 291,096 Holmes Financing PLC 1.08%, 04/15/04/2/ 58,219 58,219 K2 USA LLC 1.08%, 08/16/04/2/ 72,774 72,764 1.08%, 09/27/04/2/ 314,383 314,337 1.09%, 04/13/04/2/ 145,548 145,544 SECURITY PRINCIPAL VALUE ---------------------------------------------------------------------------- 1.09%, 05/17/04/2/ $ 145,548 $ 145,543 Links Finance LLC 1.05%, 07/20/04/2/ 116,438 116,420 1.08%, 05/04/04/2/ 145,548 145,544 1.08%, 06/28/04/2/ 145,548 145,526 1.09%, 03/29/04/2/ 145,548 145,548 Nationwide Building Society 1.08%, 07/23/04/2/ 218,322 218,322 Sigma Finance Inc. 1.05%, 07/20/04/2/ 145,548 145,525 1.07%, 10/15/03/2/ 291,096 291,095 1.07%, 07/01/04/2/ 145,548 145,521 1.24%, 08/06/04/2/ 72,774 72,768 Tango Finance Corp. 1.05%, 07/15/04/2/ 87,329 87,306 1.06%, 07/06/04/2/ 87,329 87,322 WhistleJacket Capital LLC 1.08%, 09/15/04/2/ 145,548 145,520 White Pine Finance LLC 1.08%, 05/17/04/2/ 174,657 174,657 1.08%, 07/06/04/2/ 174,657 174,645 1.08%, 08/26/04/2/ 145,548 145,528 1.09%, 04/20/04/2/ 145,548 145,548 5,070,686 COMMERCIAL PAPER - 1.10% Amsterdam Funding Corp. 1.06%, 10/16/03/2/ 138,270 138,206 Blue Ridge Asset Funding Corp. 1.05%, 10/17/03/2/ 145,548 145,480 Edison Asset Securitization 1.07%, 10/23/03/2/ 273,630 273,451 Gemini Securitization Corp. 1.05%, 10/17/03/2/ 101,884 101,836 Greenwich Funding Corp. 1.06%, 10/16/03/2/ 171,746 171,671 Jupiter Securitization Corp. 1.05%, 10/20/03/2/ 145,548 145,467 New Center Asset Trust 1.06%, 10/22/03/2/ 145,548 145,458 SCHEDULES OF INVESTMENTS 121 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL MIDCAP GROWTH INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE ---------------------------------------------------------------------------- Park Avenue Receivables Corp. 1.05%, 10/20/03/2/ $ 145,548 $ 145,467 Preferred Receivables Funding Corp. 1.06%, 10/08/03/2/ 145,548 145,518 Receivables Capital Corp. 1.05%, 10/15/03/2/ 97,831 97,792 Sydney Capital Corp. 1.07%, 10/17/03/2/ 117,894 117,838 UBS Finance (Delaware) Inc. 1.03%, 10/08/03/2/ 291,096 291,037 1.05%, 10/15/03/2/ 145,548 145,488 1.11%, 10/01/03/2/ 582,191 582,191 2,646,900 TIME DEPOSITS - 0.34% Abbey National Treasury Services PLC 1.15%, 10/01/03/2/ 145,548 145,548 Canadian Imperial Bank of Commerce 1.06%, 10/08/03/2/ 72,774 72,774 1.08%, 10/30/03/2/ 116,438 116,438 1.37%, 08/26/04/2/ 291,096 291,096 Toronto-Dominion Bank 1.33%, 08/23/04/2/ 189,212 189,127 814,983 REPURCHASE AGREEMENTS - 0.10% Lehman Brothers Inc. 1.10%, 10/01/03/2/ 232,877 232,877 232,877 TOTAL SHORT TERM INVESTMENTS (Cost: $22,010,198) 22,010,198 TOTAL INVESTMENTS IN SECURITIES - 109.13% (Cost $245,679,422) 261,865,513 Other Assets, Less Liabilities - (9.13%) (21,909,059) --------------- NET ASSETS - 100.00% $ 239,956,454 =============== /1/ Non-income earning securities. /2/ All or a portion of this security represents investments of securities lending collateral. /3/ Issuer is an affiliate of the Fund's investment advisor. See Note 2. SEE NOTES TO FINANCIAL STATEMENTS. 122 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) iSHARES RUSSELL MIDCAP VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- COMMON STOCKS - 99.89% Sears, Roebuck and Co. 35,642 $ 1,558,625 Safeway Inc./1/ 57,173 1,311,549 Agilent Technologies Inc./1/ 57,868 1,279,461 PG&E Corp./1/ 53,009 1,266,915 Hancock (John) Financial Services Inc. 37,369 1,263,072 Countrywide Financial Corp. 15,908 1,245,278 Public Service Enterprise Group Inc. 29,263 1,229,046 Electronic Data Systems Corp. 58,372 1,179,114 Consolidated Edison Inc. 28,927 1,179,065 SouthTrust Corp. 39,540 1,162,081 Lucent Technologies Inc./1/ 535,441 1,156,553 PPG Industries Inc. 21,990 1,148,318 Marathon Oil Corp. 40,150 1,144,275 Johnson Controls Inc. 11,554 1,093,008 Fortune Brands Inc. 18,832 1,068,716 PACCAR Inc. 14,197 1,060,374 Comerica Inc. 22,663 1,056,096 Unocal Corp. 33,439 1,053,997 Equity Residential 35,322 1,034,228 MBIA Inc. 18,580 1,021,343 Federated Department Stores Inc. 24,191 1,013,603 St. Paul Companies Inc. 27,225 1,008,142 Northern Trust Corp. 23,234 986,051 Regions Financial Corp. 28,788 985,989 TXU Corp. 41,688 982,169 Apple Computer Inc./1/ 47,206 973,860 AmSouth Bancorp 45,510 965,722 Bear Stearns Companies Inc. (The) 12,787 956,468 Franklin Resources Inc. 21,254 939,639 Norfolk Southern Corp. 50,531 934,823 PPL Corp. 22,694 929,319 Marshall & Ilsley Corp. 29,259 922,244 May Department Stores Co. (The) 37,250 917,467 Praxair Inc. 14,593 904,036 Albertson's Inc. 43,946 903,969 Ameren Corp. 20,901 896,862 Charter One Financial Inc. 29,040 888,624 Archer-Daniels-Midland Co. 66,967 877,937 Computer Sciences Corp./1/ 23,010 864,486 Limited Brands Inc. 57,213 862,772 Eaton Corp. 9,630 853,411 Cinergy Corp. 22,720 833,824 Xerox Corp./1/ 80,735 828,341 Jefferson-Pilot Corp. 18,341 813,974 Union Planters Corp. 25,618 810,554 Lincoln National Corp. 22,904 810,344 CIGNA Corp. 18,136 809,772 Monsanto Co. 33,806 809,316 CSX Corp. 27,588 806,949 DTE Energy Co. 21,669 799,369 Xcel Energy Inc. 51,518 796,983 Corning Inc./1/ 84,006 791,337 Georgia-Pacific Corp. 32,349 784,140 Eastman Kodak Co. 36,923 773,168 Constellation Energy Group Inc. 21,376 764,833 UST Inc. 21,649 761,612 Dover Corp. 21,204 749,985 Penney (J.C.) Co. Inc. (Holding Co.) 35,082 749,702 Simon Property Group Inc. 16,974 739,727 CIT Group Inc. 25,638 737,349 Tenet Healthcare Corp./1/ 49,681 719,381 Genuine Parts Co. 22,454 718,079 KeySpan Corp. 20,320 712,826 Cincinnati Financial Corp. 17,608 703,616 Sovereign Bancorp Inc. 37,904 703,119 Edison International/1/ 36,743 701,791 Sempra Energy 23,608 693,131 Aetna Inc. 11,299 689,578 AON Corp. 32,855 685,027 Parker Hannifin Corp. 15,270 682,569 Rohm & Haas Co. 20,391 682,079 Loews Corp. 16,893 681,970 NiSource Inc. 33,865 676,623 Interpublic Group of Companies Inc. 47,685 673,312 General Growth Properties Inc. 9,276 665,089 MeadWestvaco Corp. 25,892 660,246 National Commerce Financial Corp. 26,435 657,703 First Tennessee National Corp. 15,351 651,803 Zions Bancorporation 11,641 650,150 SCHEDULES OF INVESTMENTS 123 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL MIDCAP VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Starwood Hotels & Resorts Worldwide Inc. 18,358 $ 638,858 ProLogis 21,082 637,730 Ambac Financial Group Inc. 9,929 635,456 Williams Companies Inc. 67,075 631,847 CenturyTel Inc. 18,484 626,423 Dean Foods Co./1/ 20,097 623,610 Archstone-Smith Trust 23,535 620,853 Torchmark Corp. 14,996 609,437 Knight Ridder Inc. 9,122 608,437 Plum Creek Timber Co. Inc. 23,634 601,249 Banknorth Group Inc. 21,011 592,930 SAFECO Corp. 16,734 590,041 Avaya Inc./1/ 54,102 589,712 Textron Inc. 14,828 584,965 Huntington Bancshares Inc. 29,532 584,438 Kerr-McGee Corp. 13,025 581,436 Murphy Oil Corp. 9,884 580,685 Compass Bancshares Inc. 16,407 567,354 Valero Energy Corp. 14,805 566,587 El Paso Corp. 77,587 566,385 Scientific-Atlanta Inc. 18,162 565,746 Rockwell Automation Inc. 21,396 561,645 Office Depot Inc./1/ 39,922 560,904 UNUMProvident Corp. 37,175 549,075 Micron Technology Inc./1/ 39,602 531,459 Delphi Corp. 58,564 530,004 Old Republic International Corp. 15,594 516,005 North Fork Bancorp Inc. 14,732 511,937 Duke Realty Corp. 17,486 510,591 McKesson Corp. 15,240 507,340 Watson Pharmaceuticals Inc./1/ 12,141 506,158 Public Storage Inc. 12,887 505,557 iStar Financial Inc. 12,865 501,092 Vornado Realty Trust 10,426 500,865 SCANA Corp. 14,338 491,077 Kimco Realty Corp. 11,909 487,912 Radian Group Inc. 10,963 486,757 MGIC Investment Corp. 9,338 486,230 Fidelity National Financial Inc. 16,156 485,649 Popular Inc. 12,102 481,660 Apartment Investment & Management Co. Class A 12,173 479,129 Smurfit-Stone Container Corp. 31,825 476,739 Diebold Inc. 9,350 473,577 Liz Claiborne Inc. 13,886 472,818 Marriott International Inc. Class A 10,984 472,642 Sherwin-Williams Co. (The) 15,961 469,413 Grainger (W.W.) Inc. 9,833 467,559 PeopleSoft Inc./1/ 25,666 466,865 Lennar Corp. Class A 5,984 465,495 Amerada Hess Corp. 9,291 465,479 Jones Apparel Group Inc. 15,546 465,292 Qwest Communications International Inc./1/ 136,561 464,307 Nucor Corp. 10,107 463,709 Vulcan Materials Co. 11,596 462,796 Wisconsin Energy Corp. 15,042 459,834 GreenPoint Financial Corp. 15,347 458,261 D.R. Horton Inc. 13,952 456,230 Whirlpool Corp. 6,656 451,077 Republic Services Inc. 19,643 444,718 Janus Capital Group Inc. 31,006 433,154 R.J. Reynolds Tobacco Holdings Inc. 10,901 431,026 Pulte Homes Inc. 6,296 428,191 Lear Corp./1/ 8,099 426,331 Energy East Corp. 18,813 421,976 Rouse Co. (The) 10,021 417,876 VF Corp. 10,629 413,574 SUPERVALU Inc. 17,283 412,372 Citizens Communications Co./1/ 36,743 411,889 Hibernia Corp. Class A 20,296 411,197 Clorox Co. 8,958 410,903 Engelhard Corp. 14,817 409,986 Wendy's International Inc. 12,636 408,143 Centex Corp. 5,211 405,833 Coca-Cola Enterprises Inc. 21,252 405,063 Sunoco Inc. 9,974 401,154 ServiceMaster Co. (The) 38,644 396,487 AutoNation Inc./1/ 22,549 395,509 Boston Properties Inc. 8,977 390,230 PMI Group Inc. (The) 11,504 388,260 124 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL MIDCAP VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Host Marriott Corp./1/ 36,105 $ 387,407 Pinnacle West Capital Corp. 10,751 381,660 Tyson Foods Inc. Class A 27,008 381,623 Pitney Bowes Inc. 9,900 379,368 SPX Corp./1/ 8,359 378,496 Humana Inc./1/ 20,895 377,155 Liberty Property Trust 10,171 376,124 AvalonBay Communities Inc. 7,947 371,920 Mercantile Bankshares Corp. 9,285 371,400 Hershey Foods Corp. 5,090 369,941 Sabre Holdings Corp. 17,204 369,714 Level 3 Communications Inc./1/ 68,123 369,227 Fluor Corp. 9,881 368,858 AmerisourceBergen Corp. 6,820 368,621 American Power Conversion Corp. 21,486 368,270 Health Care Property Investors Inc. 7,864 367,249 Goodrich (B.F.) Co. 15,144 367,091 Pogo Producing Co. 8,020 363,146 Allied Capital Corp. 14,678 360,932 Thermo Electron Corp./1/ 16,600 360,220 Vishay Intertechnology Inc./1/ 20,503 359,213 Hilton Hotels Corp. 22,133 358,997 Sanmina-SCI Corp./1/ 36,665 355,651 NCR Corp./1/ 11,189 354,579 Pepco Holdings Inc. 20,248 349,885 Cadence Design Systems Inc./1/ 25,845 346,323 Pioneer Natural Resources Co./1/ 13,546 344,881 King Pharmaceuticals Inc./1/ 22,571 341,951 Donnelley (R.R.) & Sons Co. 13,715 341,092 Leggett & Platt Inc. 15,693 339,440 Hasbro Inc. 18,078 337,697 Associated Bancorp 8,894 336,193 Eastman Chemical Co. 10,016 335,536 Commerce Bancshares Inc. 7,637 334,119 UnionBanCal Corp. 6,714 333,014 Equitable Resources Inc. 8,091 332,540 Park Place Entertainment Corp./1/ 36,900 332,469 Toys R Us Inc./1/ 27,613 332,184 ENSCO International Inc. 12,362 331,549 Solectron Corp./1/ 56,493 330,484 Questar Corp. 10,710 329,975 NSTAR 6,860 325,850 MDU Resources Group Inc. 9,621 324,997 Advanced Micro Devices Inc./1/ 29,111 323,423 CenterPoint Energy Inc. 35,106 321,922 Washington Post Company (The) Class B 479 318,535 TECO Energy Inc. 22,850 315,787 Mohawk Industries Inc./1/ 4,360 310,955 Astoria Financial Corp. 10,022 309,680 KB Home 5,186 309,397 Convergys Corp./1/ 16,804 308,185 Alliant Energy Corp. 13,985 307,670 Nordstrom Inc. 12,333 305,982 ALLETE Inc. 11,172 305,889 AMB Property Corp. 9,755 300,552 Dana Corp. 19,261 297,197 Brown-Forman Corp. Class B 3,734 295,434 Foot Locker Inc. 18,183 294,565 Developers Diversified Realty Corp. 9,846 294,100 Mack-Cali Realty Corp. 7,496 293,843 Northeast Utilities 16,390 293,709 Millennium Pharmaceuticals Inc./1/ 19,047 293,133 Temple-Inland Inc. 6,025 292,514 New Plan Excel Realty Trust 12,512 291,530 Manor Care Inc. 9,709 291,270 Ashland Inc. 8,833 290,164 Valspar Corp. (The) 6,183 288,437 Deluxe Corp. 7,177 288,085 Rockwell Collins Inc. 11,362 286,891 Alberto-Culver Co. Class B 4,861 285,924 Bausch & Lomb Inc. 6,431 283,929 New York Times Co. Class A 6,533 283,924 Brunswick Corp. 10,950 281,196 Energizer Holdings Inc./1/ 7,642 280,996 DPL Inc. 16,378 280,883 Bowater Inc. 6,674 280,708 Phelps Dodge Corp./1/ 5,993 280,472 Edwards (A.G.) Inc. 7,268 279,164 Catellus Development Corp./1/ 11,399 278,706 Invitrogen Corp./1/ 4,780 277,192 3Com Corp./1/ 46,687 275,454 SCHEDULES OF INVESTMENTS 125 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL MIDCAP VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Fulton Financial Corp. 13,666 $ 274,413 Newell Rubbermaid Inc. 12,657 274,277 Berkley (W.R.) Corp. 7,972 273,121 Puget Energy Inc. 12,144 272,390 Great Plains Energy Inc. 8,961 271,698 Constellation Brands Inc./1/ 8,841 269,562 Smucker (J.M.) Co. (The) 6,383 269,107 Bemis Co. 6,074 269,078 NTL Inc./1/ 5,697 268,443 City National Corp. 5,253 267,693 Weingarten Realty Investors 5,948 267,660 Hospitality Properties Trust 7,588 266,187 United Dominion Realty Trust Inc. 14,384 263,371 Bank of Hawaii Corp. 7,817 262,495 Wilmington Trust Corp. 8,509 261,737 Sigma-Aldrich Corp. 5,024 260,947 Sonoco Products Co. 11,874 260,634 Valley National Bancorp 9,306 259,079 LSI Logic Corp./1/ 28,743 258,400 Avnet Inc./1/ 15,494 255,961 Sky Financial Group Inc. 11,275 253,800 Macerich Co. (The) 6,720 253,680 OGE Energy Corp. 11,135 251,540 Stanley Works (The) 8,450 249,444 Compuware Corp./1/ 46,428 248,854 Cullen/Frost Bankers Inc. 6,660 247,952 United States Steel Corp. 13,468 247,542 Hillenbrand Industries Inc. 4,381 247,176 FirstMerit Corp. 9,988 247,103 Telephone & Data Systems Inc. 4,367 246,910 Protective Life Corp. 8,218 245,307 Providian Financial Corp./1/ 20,183 237,958 Precision Castparts Corp. 6,773 237,732 Ryland Group Inc. 3,251 237,681 Webster Financial Corp. 5,903 235,412 BorgWarner Inc. 3,465 235,100 Hubbell Inc. Class B 6,407 233,791 AGL Resources Inc. 8,278 233,191 Intersil Corp. Class A/1/ 9,791 233,026 Martin Marietta Materials Inc. 6,340 231,093 Apogent Technologies Inc./1/ 11,026 230,002 Autodesk Inc. 13,459 229,072 Circuit City Stores Inc. 24,005 228,768 Colonial BancGroup Inc. (The) 15,841 228,744 Washington Federal Inc. 9,018 227,344 Philadelphia Suburban Corp. 9,440 227,315 Calpine Corp./1/ 46,334 226,573 Pentair Inc. 5,663 225,784 Nationwide Financial Services Inc. 7,193 225,429 Vectren Corp. 9,541 225,358 Belo (A.H.) Corp. 9,200 223,100 Lee Enterprises Inc. 5,755 222,546 Harrah's Entertainment Inc. 5,258 221,414 Hormel Foods Corp. 9,625 221,182 Siebel Systems Inc./1/ 22,678 220,430 Independence Community Bank Corp. 6,308 220,338 MGM Grand Inc./1/ 6,013 219,775 BancorpSouth Inc. 10,035 219,766 Rayonier Inc. 5,398 219,159 Pan Pacific Retail Properties Inc. 5,095 219,085 PacifiCare Health Systems Inc./1/ 4,479 218,575 Ryder System Inc. 7,417 217,466 Lubrizol Corp. 6,673 216,539 StanCorp Financial Group Inc. 3,769 216,529 First American Corp. 8,691 216,406 Tellabs Inc./1/ 31,612 214,645 Cabot Corp. 7,507 214,025 Thornburg Mortgage Inc. 8,445 213,912 BRE Properties Inc. Class A 6,449 212,688 Roslyn Bancorp Inc. 9,046 212,400 Tech Data Corp./1/ 6,838 210,952 Harris Corp. 5,877 210,338 Lyondell Chemical Co. 16,426 209,924 Snap-On Inc. 7,541 208,509 Sirius Satellite Radio Inc./1/ 113,458 207,628 Hawaiian Electric Industries Inc. 4,751 206,811 Smithfield Foods Inc./1/ 10,726 205,939 Autoliv Inc. 6,821 205,790 Federal Realty Investment Trust 5,582 205,753 Arden Realty Inc. 7,360 205,491 E*TRADE Group Inc./1/ 22,175 205,340 126 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL MIDCAP VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- FNB Corp. (Florida) 5,938 $ 204,861 CenterPoint Properties Corp. 2,986 203,376 Storage Technology Corp./1/ 8,408 202,969 Shurgard Storage Centers Inc. Class A 5,721 201,951 CNF Inc. 6,299 201,883 L-3 Communications Holdings Inc./1/ 4,659 201,502 XTO Energy Inc. 9,577 201,021 CarrAmerica Realty Corp. 6,725 200,741 Nicor Inc. 5,705 200,474 Harsco Corp. 5,211 200,467 Leucadia National Corp. 5,294 200,378 XM Satellite Radio Holdings Inc. Class A/1/ 12,849 199,545 Annaly Mortgage Management Inc. 12,102 198,715 Teleflex Inc. 4,568 198,388 Tektronix Inc./1/ 8,013 198,322 Cummins Inc. 4,463 198,291 Maxtor Corp./1/ 16,207 197,239 RPM International Inc. 14,918 194,829 National Fuel Gas Co. 8,518 194,636 ONEOK Inc. 9,622 194,076 Neiman-Marcus Group Inc. Class A/1/ 4,615 192,445 Peoples Energy Corp. 4,636 191,838 Pactiv Corp./1/ 9,346 189,537 Omnicare Inc. 5,256 189,531 TCF Financial Corp. 3,943 189,067 Delta Air Lines Inc. 13,989 186,054 Saks Inc./1/ 16,060 185,172 MONY Group Inc. (The) 5,664 184,363 Toll Brothers Inc./1/ 6,045 183,889 Old National Bancorp 8,222 183,762 Markel Corp./1/ 685 182,895 Hudson United Bancorp 5,195 182,708 Raymond James Financial Inc. 5,009 182,077 New York Community Bancorp Inc. 5,742 180,930 Coors (Adolf) Company Class B 3,352 180,204 Reebok International Ltd. 5,377 179,753 Arrow Electronics Inc./1/ 9,760 179,486 First Midwest Bancorp Inc. 6,041 179,478 Cytec Industries Inc./1/ 4,914 179,361 Unitrin Inc. 5,884 179,227 Transatlantic Holdings Inc. 2,516 178,938 Reliant Resources Inc./1/ 34,858 178,473 Realty Income Corp. 4,471 177,275 Ingram Micro Inc. Class A/1/ 13,523 176,475 Service Corp. International/1/ 38,320 175,122 Whitney Holding Corp. 5,144 174,896 American Capital Strategies Ltd. 6,999 173,995 McCormick & Co. Inc. 6,318 173,240 Noble Energy Inc. 4,521 173,154 Hudson City Bancorp Inc. 5,611 173,043 CIENA Corp./1/ 29,214 172,655 Trustmark Corp. 6,342 172,058 Healthcare Realty Trust Inc. 5,355 171,253 WGL Holdings Inc. 6,203 171,079 HRPT Properties Trust 18,683 170,763 Carlisle Companies Inc. 3,908 170,467 WPS Resources Corp. 4,116 169,579 Helmerich & Payne Inc. 6,487 169,570 Camden Property Trust 4,372 168,016 Park National Corp. 1,484 166,060 Triad Hospitals Inc./1/ 5,429 164,390 AptarGroup Inc. 4,414 161,950 HON Industries Inc. 4,379 161,848 Forest City Enterprises Inc. Class A 3,690 161,437 UGI Corp. 5,526 159,867 T. Rowe Price Group Inc. 3,852 158,934 Owens-Illinois Inc./1/ 13,876 158,464 International Rectifier Corp./1/ 4,215 157,810 Piedmont Natural Gas Co. 3,984 155,376 AGCO Corp./1/ 9,063 155,340 Ethan Allen Interiors Inc. 4,293 154,548 Chelsea Property Group Inc. 3,212 153,855 Crane Co. 6,565 153,687 Borders Group Inc./1/ 8,111 153,460 Mercury General Corp. 3,421 153,192 Imation Corp. 4,685 152,965 La-Z-Boy Inc. 6,887 152,891 IndyMac Bancorp Inc. 6,569 152,204 Metro-Goldwyn-Mayer Inc./1/ 9,838 150,915 ICOS Corp./1/ 3,921 150,253 SCHEDULES OF INVESTMENTS 127 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL MIDCAP VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Crescent Real Estate Equities Co. 10,290 $ 149,205 Provident Financial Group Inc. 5,310 148,468 Duquesne Light Holdings Inc. 9,527 147,668 Comverse Technology Inc./1/ 9,835 147,132 Packaging Corporation of America/1/ 7,559 146,796 Furniture Brands International Inc./1/ 6,078 146,480 Readers Digest Association Inc. (The) 10,342 144,685 Jeffries Group Inc. 5,018 144,267 ArvinMeritor Inc. 8,097 144,208 HCC Insurance Holdings Inc. 4,910 142,783 Lafarge North America Inc. 4,076 141,845 Westamerica Bancorp 3,186 141,618 United Bancshares Inc. 4,704 140,885 Lancaster Colony Corp. 3,534 140,547 Ceridian Corp./1/ 7,529 140,190 Allied Waste Industries Inc./1/ 12,967 140,044 Advanced Fibre Communications Inc./1/ 6,674 139,954 Valassis Communications Inc./1/ 5,288 139,603 Viad Corp. 5,835 139,340 Boise Cascade Corp. 5,048 139,325 Novell Inc./1/ 25,950 138,313 Polo Ralph Lauren Corp. 5,144 137,962 Unisys Corp./1/ 10,167 137,560 International Bancshares Corp. 3,318 137,531 American Tower Corp. Class A/1/ 13,535 137,380 McClatchy Co. (The) Class A 2,296 136,566 IKON Office Solutions Inc. 18,523 135,403 Airgas Inc. 7,604 135,351 ADC Telecommunications Inc./1/ 57,742 134,539 Health Net Inc./1/ 4,242 134,344 CBL & Associates Properties Inc. 2,662 132,834 Pride International Inc./1/ 7,787 131,990 Dynegy Inc. Class A/1/ 36,264 130,550 Big Lots Inc./1/ 8,226 130,053 Downey Financial Corp. 2,783 130,050 Trizec Properties Inc. 10,596 129,907 PerkinElmer Inc. 8,467 129,630 AmeriCredit Corp./1/ 12,575 129,522 Media General Inc. Class A 2,113 129,104 Kinder Morgan Inc. 2,361 127,518 Scotts Co. (The) Class A/1/ 2,315 126,631 Polycom Inc./1/ 7,550 125,406 Novellus Systems Inc./1/ 3,693 124,639 Peabody Energy Corp. 3,963 124,319 Rowan Companies Inc./1/ 5,035 123,760 Barnes & Noble Inc./1/ 4,861 123,518 Newfield Exploration Co./1/ 3,189 123,000 Erie Indemnity Co. Class A 3,117 121,251 Atmel Corp./1/ 30,083 120,633 BearingPoint Inc./1/ 15,071 120,267 Neurocrine Biosciences Inc./1/ 2,396 118,650 Mills Corp. 2,977 117,145 Loews Corporation - Carolina Group 5,092 117,116 M.D.C. Holdings Inc. 2,165 116,910 Regency Centers Corp. 3,167 116,704 Fairchild Semiconductor International Inc. Class A/1/ 7,017 116,342 Gemstar-TV Guide International Inc./1/ 24,508 115,923 Tidewater Inc. 4,086 115,634 National Semiconductor Corp./1/ 3,511 113,370 Human Genome Sciences Inc./1/ 8,235 112,490 Cypress Semiconductor Corp./1/ 6,285 111,119 Blyth Inc. 4,108 110,834 American National Insurance Co. 1,303 110,820 PepsiAmericas Inc. 7,627 110,515 Navistar International Corp./1/ 2,957 110,237 International Flavors & Fragrances Inc. 3,305 109,329 Del Monte Foods Co./1/ 12,467 108,588 Henry Schein Inc./1/ 1,900 107,730 American Axle & Manufacturing Holdings Inc./1/ 3,635 107,523 Manpower Inc. 2,898 107,516 Applied Micro Circuits Corp./1/ 21,994 107,111 Florida Rock Industries Inc. 2,159 107,086 Mandalay Resort Group 2,702 107,026 Dial Corp. (The) 4,967 106,989 Winn-Dixie Stores Inc. 10,723 103,477 Integrated Device Technology Inc./1/ 8,187 101,683 Hunt (J.B.) Transport Services Inc./1/ 3,904 101,582 128 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL MIDCAP VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Reinsurance Group of America Inc. 2,487 $ 101,345 Premcor Inc./1/ 4,325 100,210 VeriSign Inc./1/ 7,316 98,547 Scholastic Corp./1/ 3,394 97,713 People's Bank 3,209 96,077 Avery Dennison Corp. 1,898 95,887 CBRL Group Inc. 2,674 94,874 ICN Pharmaceuticals Inc. 5,527 94,843 American Financial Group Inc. 4,323 94,025 AMETEK Inc. 2,192 93,949 Hearst-Argyle Television Inc./1/ 3,849 93,146 Legg Mason Inc. 1,281 92,488 AVX Corp. 6,643 90,943 Applera Corp. - Applied Biosystems Group 4,004 89,329 Regis Corp. 2,705 86,831 Renal Care Group Inc./1/ 2,526 86,263 CheckFree Corp./1/ 4,311 86,220 Tootsie Roll Industries Inc. 2,773 85,963 Cousins Properties Inc. 3,085 85,609 Affiliated Computer Services Inc. Class A/1/ 1,753 85,354 Western Gas Resources Inc. 2,239 85,082 Synovus Financial Corp. 3,403 85,041 Radio One Inc. Class D/1/ 5,793 83,187 Hovnanian Enterprises Inc. Class A/1/ 1,278 82,265 Alleghany Corp./1/ 421 82,200 National-Oilwell Inc./1/ 4,460 80,904 Meredith Corp. 1,751 80,844 Outback Steakhouse Inc. 2,123 80,398 BOK Financial Corp./1/ 2,119 79,823 Capitol Federal Financial 2,700 79,272 LNR Property Corp. 1,929 78,993 Performance Food Group Co./1/ 1,932 78,652 Smith International Inc./1/ 2,177 78,328 Emulex Corp./1/ 3,073 78,269 Equifax Inc. 3,418 76,119 Pepsi Bottling Group Inc. 3,696 76,064 Instinet Group Inc./1/ 15,561 74,210 Darden Restaurants Inc. 3,875 73,625 Regal Entertainment Group Class A 3,957 73,600 WellChoice Inc./1/ 2,429 73,186 Rite Aid Corp./1/ 14,086 72,684 Community Health Systems Inc./1/ 3,291 71,415 LaBranche & Co. Inc. 4,827 70,474 Blockbuster Inc. 3,343 70,203 Westport Resources Corp./1/ 2,951 69,467 SunGard Data Systems Inc./1/ 2,612 68,722 IDT Corp./1/ 3,847 68,015 Diamond Offshore Drilling Inc. 3,508 67,003 Brocade Communications Systems Inc./1/ 12,794 66,785 Steelcase Inc. Class A 5,523 65,061 Pall Corp. 2,822 63,326 CNA Financial Corp./1/ 2,931 61,610 Michaels Stores Inc. 1,504 61,303 Ball Corp. 1,133 61,182 Wesco Financial Corp. 179 60,855 Werner Enterprises Inc. 2,653 60,780 Student Loan Corp. 503 60,023 UnitedGlobalCom Inc. Class A/1/ 9,783 59,774 Jabil Circuit Inc./1/ 2,293 59,733 Worthington Industries Inc. 4,679 58,768 Timken Co. (The) 3,770 57,455 Varco International Inc./1/ 3,374 57,054 Lamar Advertising Co./1/ 1,932 56,685 Molex Inc. 1,929 55,150 Crown Castle International Corp./1/ 5,757 54,173 PanAmSat Corp./1/ 3,679 53,272 First Bancorp 1,698 52,213 WebMD Corp./1/ 5,832 52,021 Bard (C.R.) Inc. 725 51,475 Alliant Techsystems Inc./1/ 1,066 51,221 Church & Dwight Co. Inc. 1,461 51,120 Pier 1 Imports Inc. 2,540 48,870 Texas Genco Holdings Inc. 2,032 48,362 Swift Transportation Co. Inc./1/ 2,099 47,626 Symbol Technologies Inc. 3,893 46,521 O'Reilly Automotive Inc./1/ 1,228 45,154 ITT Industries Inc. 739 44,222 Chesapeake Energy Corp. 4,047 43,627 Protein Design Labs Inc./1/ 3,134 43,437 SCHEDULES OF INVESTMENTS 129 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL MIDCAP VALUE INDEX FUND September 30, 2003 SECURITY SHARES VALUE ---------------------------------------------------------------------------- Rent-A-Center Inc./1/ 1,300 $ 41,990 Laboratory Corp. of America Holdings/1/ 1,456 41,787 Jacobs Engineering Group Inc./1/ 926 41,763 Key Energy Services Inc./1/ 4,229 40,810 Acxiom Corp./1/ 2,533 39,920 BMC Software Inc./1/ 2,839 39,547 Cox Radio Inc. Class A/1/ 1,801 39,388 Interactive Data Corp./1/ 2,486 39,279 International Speedway Corp. Class A 886 38,887 Univision Communications Inc. Class A/1/ 1,205 38,490 Andrx Group/1/ 2,038 37,723 GTECH Holdings Corp. 873 37,408 United States Cellular Corp./1/ 1,271 36,986 Donaldson Co. Inc. 682 36,760 DoubleClick Inc./1/ 3,399 36,607 Commerce Bancorp Inc. 730 34,974 Wynn Resorts Ltd./1/ 1,872 34,033 DST Systems Inc./1/ 887 33,351 Entravision Communications Corp./1/ 3,341 31,739 Estee Lauder Companies Inc. Class A 926 31,577 Odyssey Re Holdings Corp. 1,507 31,014 Cablevision Systems Corp./1/ 1,643 29,738 Network Associates Inc./1/ 2,038 28,043 Universal Health Services Inc. Class B/1/ 552 27,296 Avocent Corp./1/ 889 26,928 Friedman, Billings, Ramsey Group, Inc. Class A 1,507 25,996 Southern Peru Copper Corp. 1,114 24,642 Neuberger Berman Inc. 581 24,326 Cooper Cameron Corp./1/ 512 23,660 Harte-Hanks Inc. 1,001 18,458 Entercom Communications Corp./1/ 380 17,032 Claire's Stores Inc. 490 16,395 Talbots Inc. (The) 424 14,776 BISYS Group Inc. (The)/1/ 1,056 13,886 Steris Corp./1/ 509 11,717 SHARES OR SECURITY PRINCIPAL VALUE ---------------------------------------------------------------------------- Grant Prideco Inc./1/ 932 $ 9,497 MSC Industrial Direct Co. Inc. Class A 443 9,237 Global Payments Inc. 145 5,220 West Corp./1/ 142 3,378 McLeodUSA Inc. Class A Escrow/2/ 12,263 - TOTAL COMMON STOCKS (COST: $178,051,832) 186,780,833 SHORT TERM INVESTMENTS - 7.13% MONEY MARKET FUNDS - 4.33% Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares/3/,/4/ 5,477,294 5,477,294 Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares/3/,/4/ 1,913,929 1,913,929 BlackRock Temp Cash Money Market Fund/3/ 85,021 85,021 Short Term Investment Co. - Liquid Assets Money Market Portfolio/3/ 451,255 451,255 Short Term Investment Co. - Prime Money Market Portfolio, Institutional Shares/3/ 173,994 173,994 8,101,493 FLOATING RATE NOTES - 1.62% Beta Finance Inc. 1.08%, 05/20/04/3/ $ 86,997 86,989 1.08%, 09/15/04/3/ 173,994 173,977 1.17%, 08/23/04/3/ 86,997 87,064 CC USA Inc. 1.06%, 05/24/04/3/ 173,994 173,982 1.08%, 04/19/04/3/ 76,557 76,555 1.12%, 07/15/04/3/ 86,997 87,021 Dorada Finance Inc. 1.08%, 05/20/04/3/ 173,994 173,977 1.24%, 08/09/04/3/ 43,498 43,493 Five Finance Inc. 1.09%, 04/15/04/3/ 86,997 86,997 130 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL MIDCAP VALUE INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE ---------------------------------------------------------------------------- HBOS Treasury Services PLC 1.13%, 06/24/08/3/ $ 173,994 $ 173,994 Holmes Financing PLC 1.08%, 04/15/04/3/ 34,799 34,799 K2 USA LLC 1.08%, 08/16/04/3/ 43,498 43,493 1.08%, 09/27/04/3/ 187,913 187,885 1.09%, 04/13/04/3/ 86,997 86,995 1.09%, 05/17/04/3/ 86,997 86,994 Links Finance LLC 1.05%, 07/20/04/3/ 69,597 69,586 1.08%, 05/04/04/3/ 86,997 86,994 1.08%, 06/28/04/3/ 86,997 86,984 1.09%, 03/29/04/3/ 86,997 86,997 Nationwide Building Society 1.08%, 07/23/04/3/ 130,495 130,495 Sigma Finance Inc. 1.05%, 07/20/04/3/ 86,997 86,983 1.07%, 10/15/03/3/ 173,994 173,993 1.07%, 07/01/04/3/ 86,997 86,981 1.24%, 08/06/04/3/ 43,498 43,495 Tango Finance Corp. 1.05%, 07/15/04/3/ 52,198 52,184 1.06%, 07/06/04/3/ 52,198 52,194 WhistleJacket Capital LLC 1.08%, 09/15/04/3/ 86,997 86,980 White Pine Finance LLC 1.08%, 05/17/04/3/ 104,396 104,396 1.08%, 07/06/04/3/ 104,396 104,388 1.08%, 08/26/04/3/ 86,997 86,985 1.09%, 04/20/04/3/ 86,997 86,997 3,030,847 COMMERCIAL PAPER - 0.85% Amsterdam Funding Corp. 1.06%, 10/16/03/3/ 82,647 82,607 Blue Ridge Asset Funding Corp. 1.05%, 10/17/03/3/ 86,997 86,956 Edison Asset Securitization 1.07%, 10/23/03/3/ 163,554 163,447 Gemini Securitization Corp. 1.05%, 10/17/03/3/ 60,898 60,869 Greenwich Funding Corp. 1.06%, 10/16/03/3/ 102,656 102,611 Jupiter Securitization Corp. 1.05%, 10/20/03/3/ 86,997 86,949 New Center Asset Trust 1.06%, 10/22/03/3/ 86,997 86,943 Park Avenue Receivables Corp. 1.05%, 10/20/03/3/ 86,997 86,949 Preferred Receivables Funding Corp. 1.06%, 10/08/03/3/ 86,997 86,979 Receivables Capital Corp. 1.05%, 10/15/03/3/ 58,476 58,452 Sydney Capital Corp. 1.07%, 10/17/03/3/ 70,467 70,434 UBS Finance (Delaware) Inc. 1.03%, 10/08/03/3/ 173,994 173,959 1.05%, 10/15/03/3/ 86,997 86,961 1.11%, 10/01/03/3/ 347,987 347,987 1,582,103 TIME DEPOSITS - 0.26% Abbey National Treasury Services PLC 1.15%, 10/01/03/3/ 86,997 86,997 Canadian Imperial Bank of Commerce 1.06%, 10/08/03/3/ 43,498 43,498 1.08%, 10/30/03/3/ 69,597 69,597 1.37%, 08/26/04/3/ 173,994 173,994 SCHEDULES OF INVESTMENTS 131 SCHEDULE OF INVESTMENTS (Unaudited) (Continued) iSHARES RUSSELL MIDCAP VALUE INDEX FUND September 30, 2003 SECURITY PRINCIPAL VALUE ---------------------------------------------------------------------------- Toronto-Dominion Bank 1.33%, 08/23/04/3/ $ 113,096 $ 113,045 487,131 REPURCHASE AGREEMENTS - 0.07% Lehman Brothers Inc. 1.10%, 10/01/03/3/ 139,195 139,195 139,195 TOTAL SHORT TERM INVESTMENTS (Cost: $13,340,769) 13,340,769 TOTAL INVESTMENTS IN SECURITIES - 107.02% (Cost $191,392,601) 200,121,602 Other Assets, Less Liabilities - (7.02%) (13,126,638) --------------- NET ASSETS - 100.00% $ 186,994,964 =============== /1/ Non-income earning securities. /2/ Security valued at fair value in accordance with procedures approved by the Board of Trustees. See Note 1. /3/ All or a portion of this security represents investments of securities lending collateral. /4/ Issuer is an affiliate of the Fund's investment advisor. See Note 2. SEE NOTES TO FINANCIAL STATEMENTS. 132 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS STATEMENTS OF ASSETS AND LIABILITIES (Unaudited) iSHARES TRUST September 30, 2003
iSHARES RUSSELL ----------------------------------------------------------------------- 3000 3000 Growth 3000 Value Midcap Index Fund Index Fund Index Fund Index Fund ---------------------------------------------------------------------------------------------------- ASSETS Investments at cost $ 1,312,418,663 $ 71,143,917 $ 133,226,853 $ 307,251,786 --------------- --------------- --------------- -------------- Investments in securities, at value (including securities on loan/1/) (Note 1) $ 1,155,885,401 $ 71,467,217 $ 137,405,441 $ 324,014,000 Receivables: Investment securities sold 215,442 56,183 276,338 138,187 Dividends and interest 1,263,378 55,534 201,895 351,435 iShares sold - - - - --------------- --------------- --------------- -------------- Total Assets 1,157,364,221 71,578,934 137,883,674 324,503,622 --------------- --------------- --------------- -------------- LIABILITIES Payables: Investment securities purchased 1,231,632 82,636 440,016 595,300 Collateral for securities on loan (Note 5) 60,609,173 2,922,520 7,305,656 25,545,748 Advisory fees (Note 2) 356,723 28,757 54,681 101,322 --------------- --------------- --------------- -------------- Total Liabilities 62,197,528 3,033,913 7,800,353 26,242,370 --------------- --------------- --------------- -------------- NET ASSETS $ 1,095,166,693 $ 68,545,021 $ 130,083,321 $ 298,261,252 =============== =============== =============== ============== NET ASSETS CONSIST OF: Paid-in capital $ 1,296,839,060 $ 81,878,057 $ 130,389,477 $ 263,265,312 Undistributed net investment income 910,486 39,216 141,384 252,893 Undistributed net realized gain (accumulated net realized loss) (46,049,591) (13,695,522) (4,626,128) 17,980,833 Net unrealized appreciation (depreciation) (156,533,262) 323,300 4,178,588 16,762,214 --------------- --------------- --------------- -------------- NET ASSETS $ 1,095,166,693 $ 68,545,021 $ 130,083,321 $ 298,261,252 =============== =============== =============== ============== iShares outstanding 19,450,000 2,000,000 1,950,000 5,050,000 =============== =============== =============== ============== Net asset value per iShare $ 56.31 $ 34.27 $ 66.71 $ 59.06 =============== =============== =============== ============== iSHARES RUSSELL ---------------------------------- Midcap Growth Midcap Value Index Fund Index Fund ---------------------------------- ASSETS Investments at cost $ 245,679,422 $ 191,392,601 --------------- --------------- Investments in securities, at value (including securities on loan/1/) (Note 1) $ 261,865,513 $ 200,121,602 Receivables: Investment securities sold 14,960 244,586 Dividends and interest 85,547 281,968 iShares sold 11,796 - --------------- --------------- Total Assets 261,977,816 200,648,156 --------------- --------------- LIABILITIES Payables: Investment securities purchased 196,740 594,676 Collateral for securities on loan (Note 5) 21,738,618 12,993,594 Advisory fees (Note 2) 86,004 64,922 --------------- --------------- Total Liabilities 22,021,362 13,653,192 --------------- --------------- NET ASSETS $ 239,956,454 $ 186,994,964 =============== =============== NET ASSETS CONSIST OF: Paid-in capital $ 228,560,095 $ 179,369,079 Undistributed net investment income 40,518 224,568 Undistributed net realized gain (accumulated net realized loss) (4,830,250) (1,327,684) Net unrealized appreciation (depreciation) 16,186,091 8,729,001 --------------- --------------- NET ASSETS $ 239,956,454 $ 186,994,964 =============== =============== iShares outstanding 3,650,000 2,300,000 =============== =============== Net asset value per iShare $ 65.74 $ 81.30 =============== ===============
/1/ Securities on loan with market values of $58,464,068, $2,826,050, $7,037,278, $24,412,572, $21,094,458 and $12,275,604, respectively. See Note 5. SEE NOTES TO FINANCIAL STATEMENTS. FINANCIAL STATEMENTS 133 STATEMENTS OF OPERATIONS (Unaudited) iSHARES TRUST For the six months ended September 30, 2003
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/ $ 9,075,366 $ 330,095 $ 1,474,870 $ 2,096,111 $ 395,137 $ 1,592,683 Interest 3,049 262 674 595 356 733 Securities lending income 38,197 1,963 4,083 17,817 10,587 9,919 -------------- -------------- -------------- -------------- -------------- -------------- Total investment income 9,116,612 332,320 1,479,627 2,114,523 406,080 1,603,335 -------------- -------------- -------------- -------------- -------------- -------------- EXPENSES (Note 2) Advisory fees 1,045,717 82,277 148,858 266,762 213,507 168,566 -------------- -------------- -------------- -------------- -------------- -------------- Total expenses 1,045,717 82,277 148,858 266,762 213,507 168,566 -------------- -------------- -------------- -------------- -------------- -------------- Net investment income 8,070,895 250,043 1,330,769 1,847,761 192,573 1,434,769 -------------- -------------- -------------- -------------- -------------- -------------- NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from: Investments (14,980,438) (2,404,257) (1,214,594) (3,441,883) (5,374,393) (3,954,987) In-kind redemptions 19,938,106 - - 23,740,439 11,054,120 3,968,013 -------------- -------------- -------------- -------------- -------------- -------------- Net realized gain (loss) 4,957,668 (2,404,257) (1,214,594) 20,298,556 5,679,727 13,026 -------------- -------------- -------------- -------------- -------------- -------------- Net change in unrealized appreciation (depreciation) on investments 178,694,028 13,534,622 19,899,306 33,622,494 29,424,599 24,282,952 -------------- -------------- -------------- -------------- -------------- -------------- Net realized and unrealized gain 183,651,696 11,130,365 18,684,712 53,921,050 35,104,326 24,295,978 -------------- -------------- -------------- -------------- -------------- -------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 191,722,591 $ 11,380,408 $ 20,015,481 $ 55,768,811 $ 35,296,899 $ 25,730,747 ============== ============== ============== ============== ============== ==============
/1/ Net of foreign withholding tax of $1,139, $53, $170, $1,114, $528 and $706, respectively. SEE NOTES TO FINANCIAL STATEMENTS. 134 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS STATEMENTS OF CHANGES IN NET ASSETS iSHARES TRUST
iSHARES RUSSELL 3000 iSHARES RUSSELL 3000 iSHARES RUSSELL 3000 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 Sept. 30, 2003 year ended Sept. 30, 2003 year ended Sept. 30, 2003 year ended (Unaudited) March 31, 2003 (Unaudited) March 31, 2003 (Unaudited) March 31, 2003 --------------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 8,070,895 $ 16,552,383 $ 250,043 $ 403,493 $ 1,330,769 $ 1,759,769 Net realized gain (loss) 4,957,668 (65,574,448) (2,404,257) (6,539,314) (1,214,594) (1,686,892) Net change in unrealized appreciation (depreciation) 178,694,028 (256,539,549) 13,534,622 (7,131,915) 19,899,306 (20,709,017) --------------- ---------------- -------------- -------------- -------------- -------------- Net increase (decrease) in net assets resulting from operations 191,722,591 (305,561,614) 11,380,408 (13,267,736) 20,015,481 (20,636,140) --------------- ---------------- -------------- -------------- -------------- -------------- DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income (7,857,023) (16,410,948) (241,673) (377,724) (1,294,696) (1,695,779) --------------- ---------------- -------------- -------------- -------------- -------------- Total distributions to iShareholders (7,857,023) (16,410,948) (241,673) (377,724) (1,294,696) (1,695,779) --------------- ---------------- -------------- -------------- -------------- -------------- iSHARES TRANSACTIONS: iShares sold 139,887,863 1,912,763,393 - 43,245,935 13,385,153 56,990,205 iShares redeemed (213,727,184) (1,966,586,993) - - - (3,392,837) --------------- ---------------- -------------- -------------- -------------- -------------- Net increase (decrease) in net assets from iShares transactions (73,839,321) (53,823,600) - 43,245,935 13,385,153 53,597,368 --------------- ---------------- -------------- -------------- -------------- -------------- INCREASE (DECREASE) IN NET ASSETS 110,026,247 (375,796,162) 11,138,735 29,600,475 32,105,938 31,265,449 NET ASSETS: Beginning of period 985,140,446 1,360,936,608 57,406,286 27,805,811 97,977,383 66,711,934 --------------- ---------------- -------------- -------------- -------------- -------------- End of period $ 1,095,166,693 $ 985,140,446 $ 68,545,021 $ 57,406,286 $ 130,083,321 $ 97,977,383 =============== ================ ============== ============== ============== ============== Undistributed net investment income included in net assets at end of period $ 910,486 $ 696,614 $ 39,216 $ 30,846 $ 141,384 $ 105,311 =============== ================ ============== ============== ============== ============== iSHARES ISSUED AND REDEEMED: iShares sold 2,500,000 38,700,000 - 1,300,000 200,000 900,000 iShares redeemed (3,900,000) (39,150,000) - - - (50,000) --------------- ---------------- -------------- -------------- -------------- -------------- Net increase (decrease) in iShares outstanding (1,400,000) (450,000) - 1,300,000 200,000 850,000 =============== ================ ============== ============== ============== ==============
SEE NOTES TO FINANCIAL STATEMENTS. FINANCIAL STATEMENTS 135 STATEMENTS OF CHANGES IN NET ASSETS (Continued) iSHARES TRUST
iSHARES RUSSELL MIDCAP iSHARES RUSSELL MIDCAP iSHARES RUSSELL MIDCAP 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 Sept. 30, 2003 year ended Sept. 30, 2003 year ended Sept. 30, 2003 year ended (Unaudited) March 31, 2003 (Unaudited) March 31, 2003 (Unaudited) March 31, 2003 --------------------------------------------------------------------------------------------------------------------------------- Increase (Decrease) in Net Assets OPERATIONS: Net investment income $ 1,847,761 $ 1,543,348 $ 192,573 $ 161,251 $ 1,434,769 $ 1,798,490 Net realized gain (loss) 20,298,556 123,128 5,679,727 (9,721,862) 13,026 340,781 Net change in unrealized appreciation (depreciation) 33,622,494 (18,187,418) 29,424,599 (12,736,378) 24,282,952 (18,943,733) --------------- ---------------- -------------- -------------- -------------- -------------- Net increase (decrease) in net assets resulting from operations 55,768,811 (16,520,942) 35,296,899 (22,296,989) 25,730,747 (16,804,462) --------------- ---------------- -------------- -------------- -------------- -------------- DISTRIBUTIONS TO iSHAREHOLDERS: From net investment income (1,775,336) (1,368,806) (174,402) (140,691) (1,358,083) (1,668,357) --------------- ---------------- -------------- -------------- -------------- -------------- Total distributions to iShareholders (1,775,336) (1,368,806) (174,402) (140,691) (1,358,083) (1,668,357) --------------- ---------------- -------------- -------------- -------------- -------------- iSHARES TRANSACTIONS: iShares sold 127,654,204 180,731,023 106,817,069 61,393,587 61,251,089 86,530,245 iShares redeemed (77,140,245) (17,828,437) (18,456,546) (3,329,049) (3,854,681) (17,074,388) --------------- ---------------- -------------- -------------- -------------- -------------- Net increase in net assets from iShares transactions 50,513,959 162,902,586 88,360,523 58,064,538 57,396,408 69,455,857 --------------- ---------------- -------------- -------------- -------------- -------------- Increase in Net Assets 104,507,434 145,012,838 123,483,020 35,626,858 81,769,072 50,983,038 NET ASSETS: Beginning of period 193,753,818 48,740,980 116,473,434 80,846,576 105,225,892 54,242,854 --------------- ---------------- -------------- -------------- -------------- -------------- End of period $ 298,261,252 $ 193,753,818 $ 239,956,454 $ 116,473,434 $ 186,994,964 $ 105,225,892 =============== ================ ============== ============== ============== ============== Undistributed net investment income included in net assets at end of period $ 252,893 $ 180,468 $ 40,518 $ 22,347 $ 224,568 $ 147,882 =============== ================ ============== ============== ============== ============== iSHARES ISSUED AND REDEEMED: iShares sold 2,250,000 3,650,000 1,700,000 1,150,000 750,000 1,200,000 iShares redeemed (1,300,000) (350,000) (300,000) (50,000) (50,000) (250,000) --------------- ---------------- -------------- -------------- -------------- -------------- Net increase in iShares outstanding 950,000 3,300,000 1,400,000 1,100,000 700,000 950,000 =============== ================ ============== ============== ============== ==============
SEE NOTES TO FINANCIAL STATEMENTS. 136 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS FINANCIAL HIGHLIGHTS iSHARES TRUST (For a share outstanding throughout each period)
iSHARES RUSSELL 3000 INDEX FUND ------------------------------------------------------------------- Six months Period from ended May 22, 2000/1/ Sep. 30, 2003 Year ended Year ended to (Unaudited) Mar. 31, 2003 Mar. 31, 2002 Mar. 31, 2001 ------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 47.25 $ 63.89 $ 63.69 $ 76.23 ------------- ------------- ------------- --------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.44 0.90 0.65 0.51 Net realized and unrealized gain (loss) 9.05 (16.65) 0.19 (12.56) ------------- ------------- ------------- --------------- Total from investment operations 9.49 (15.75) 0.84 (12.05) ------------- ------------- ------------- --------------- LESS DISTRIBUTIONS FROM: Net investment income (0.43) (0.89) (0.64) (0.48) Net realized gain - - - (0.01) ------------- ------------- ------------- --------------- Total distributions (0.43) (0.89) (0.64) (0.49) ------------- ------------- ------------- --------------- Net Asset Value, End of Period $ 56.31 $ 47.25 $ 63.89 $ 63.69 ============= ============= ============= =============== Total Return 20.08%/2/ (24.73)% 1.35% (15.90)%/2/ ============= ============= ============= =============== RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s) $ 1,095,167 $ 985,140 $ 1,360,937 $ 388,509 Ratio of expenses to average net assets/3/ 0.20% 0.20% 0.20% 0.20% Ratio of net investment income to average net assets/3/ 1.54% 1.53% 1.20% 1.09% Portfolio turnover rate/4/ 3% 5% 6% 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. SEE NOTES TO FINANCIAL STATEMENTS. FINANCIAL HIGHLIGHTS 137 FINANCIAL HIGHLIGHTS (Continued) iSHARES TRUST (For a share outstanding throughout each period)
iSHARES RUSSELL 3000 GROWTH INDEX FUND ------------------------------------------------------------------- Six months Period from ended Jul. 24, 2000/1/ Sep. 30, 2003 Year ended Year ended to (Unaudited) Mar. 31, 2003 Mar. 31, 2002 Mar. 31, 2001 ------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 28.70 $ 39.72 $ 40.70 $ 68.63 ------------- ------------- ------------- ---------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.12 0.23 0.20 0.06 Net realized and unrealized gain (loss) 5.57 (11.03) (0.99) (27.93) ------------- ------------- ------------- ---------------- Total from investment operations 5.69 (10.80) (0.79) (27.87) ------------- ------------- ------------- ---------------- LESS DISTRIBUTIONS FROM: Net investment income (0.12) (0.22) (0.19) (0.06) Net realized gain - - - (0.00)/5/ ------------- ------------- ------------- ---------------- Total distributions (0.12) (0.22) (0.19) (0.06) ------------- ------------- ------------- ---------------- Net Asset Value, End of Period $ 34.27 $ 28.70 $ 39.72 $ 40.70 ============= ============= ============= ================ Total Return 19.83%/2/ (27.21)% (1.95)% (40.62)%/2/ ============= ============= ============= ================ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s) $ 68,545 $ 57,406 $ 27,806 $ 20,351 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/ 0.76% 0.83% 0.47% 0.20% Portfolio turnover rate/4/ 12% 15% 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. 138 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS FINANCIAL HIGHLIGHTS (Continued) iSHARES TRUST (For a share outstanding throughout each period)
iSHARES RUSSELL 3000 VALUE INDEX FUND ------------------------------------------------------------------- Six months Period from ended Jul. 24, 2000/1/ Sep. 30, 2003 Year ended Year ended to (Unaudited) Mar. 31, 2003 Mar. 31, 2002 Mar. 31, 2001 ------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 55.99 $ 74.12 $ 71.59 $ 69.91 ------------- ------------- ------------- ---------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.71 1.21 1.25 0.83 Net realized and unrealized gain (loss) 10.71 (18.13) 2.50 1.71 ------------- ------------- ------------- ---------------- Total from investment operations 11.42 (16.92) 3.75 2.54 ------------- ------------- ------------- ---------------- LESS DISTRIBUTIONS FROM: Net investment income (0.70) (1.21) (1.22) (0.77) Net realized gain - - - (0.09) ------------- ------------- ------------- ---------------- Total distributions (0.70) (1.21) (1.22) (0.86) ------------- ------------- ------------- ---------------- Net asset value, end of period $ 66.71 $ 55.99 $ 74.12 $ 71.59 ============= ============= ============= ================ Total Return 20.39%/2/ (22.92)% 5.34% 3.60%/2/ ============= ============= ============= ================ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s) $ 130,083 $ 97,977 $ 66,712 $ 32,216 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/ 2.23% 2.20% 1.79% 1.67% Portfolio turnover rate/4/ 13% 16% 15% 4%
/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 139 FINANCIAL HIGHLIGHTS (Continued) iSHARES TRUST (For a share outstanding throughout each period)
iSHARES RUSSELL MIDCAP INDEX FUND --------------------------------------------------- Six months Period from ended Jul. 17, 2001/1/ Sep. 30, 2003 Year ended to (Unaudited) Mar. 31, 2003 Mar. 31, 2002 ------------------------------------------------------------------------------ Net Asset Value, Beginning of Period $ 47.26 $ 60.93 $ 59.55 ------------- ------------- ---------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.36 0.60 0.46 Net realized and unrealized gain (loss) 11.79 (13.67) 1.32 ------------- ------------- ---------------- Total from investment operations 12.15 (13.07) 1.78 ------------- ------------- ---------------- LESS DISTRIBUTIONS FROM: Net investment income (0.35) (0.60) (0.40) ------------- ------------- ---------------- Total distributions (0.35) (0.60) (0.40) ------------- ------------- --------------- Net asset value, end of period $ 59.06 $ 47.26 $ 60.93 ============= ============= ================ Total return 25.72%/2/ (21.50)% 3.08%/2/ ============= ============= ================ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s) $ 298,261 $ 193,754 $ 48,741 Ratio of expenses to average net assets/3/ 0.20% 0.20% 0.20% Ratio of net investment income to average net assets/3/ 1.39% 1.50% 1.40% Portfolio turnover rate/4/ 5% 15% 7% iSHARES RUSSELL MIDCAP GROWTH INDEX FUND ----------------------------------------------------- Six months Period from ended Jul. 17, 2001/1/ Sep. 30, 2003 Year ended to (Unaudited) Mar. 31, 2003 Mar. 31, 2002 -------------------------------------------------------------------------------- Net Asset Value, Beginning of Period $ 51.77 $ 70.30 $ 73.06 ------------- ------------- ---------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.06 0.09 0.03 Net realized and unrealized gain (loss) 13.97 (18.54) (2.77) ------------- ------------- ---------------- Total from investment operations 14.03 (18.45) (2.74) ------------- ------------- ---------------- LESS DISTRIBUTIONS FROM: Net investment income (0.06) (0.08) (0.02) ------------- ------------- ---------------- Total distributions (0.06) (0.08) (0.02) ------------- ------------- ---------------- Net asset value, end of period $ 65.74 $ 51.77 $ 70.30 ============= ============= ================ Total return 27.10%/2/ (26.24)% (3.75)%/2/ ============= ============= ================ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s) $ 239,956 $ 116,473 $ 80,847 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% 0.20% 0.08% Portfolio turnover rate/4/ 10% 31% 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. 140 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS FINANCIAL HIGHLIGHTS (Continued) iSHARES TRUST (For a share outstanding throughout each period)
iSHARES RUSSELL MIDCAP VALUE INDEX FUND ---------------------------------------------------- Six months Period from ended Jul. 17, 2001/1/ Sep. 30, 2003 Year ended to (Unaudited) Mar. 31, 2003 Mar. 31, 2002 ------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 65.77 $ 83.45 $ 78.86 -------------- -------------- ---------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.72 1.35 1.02 Net realized and unrealized gain (loss) 15.52 (17.70) 4.49 -------------- -------------- ---------------- Total from investment operations 16.24 (16.35) 5.51 -------------- -------------- ---------------- LESS DISTRIBUTIONS FROM: Net investment income (0.71) (1.33) (0.92) -------------- -------------- ---------------- Total distributions (0.71) (1.33) (0.92) -------------- -------------- ---------------- Net asset value, end of period $ 81.30 $ 65.77 $ 83.45 ============== ============== ================ Total return 24.72%/2/ (19.69)% 7.14%/2/ ============== ============== ================ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s) $ 186,995 $ 105,226 $ 54,243 Ratio of expenses to average net assets/3/ 0.25% 0.25% 0.25% Ratio of net investment income to average net assets/3/ 2.13% 2.24% 1.91% Portfolio turnover rate/4/ 10% 24% 6%
/1/ Commencement of operations. /2/ Not annualized. /3/ Annualized for the 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 141 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 statutory trust pursuant to an Agreement and Declaration of Trust dated December 16, 1999. As of September 30, 2003, the Trust offered 57 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. Under the Funds' organizational documents, their officers and trustees are indemnified against certain liabilities that may arise out of the performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds' maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote. 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. Beginning April 14, 2003, securities for which the primary market is the National Association of Securities Dealers Automated Quotations National Market System ("NASDAQ") are valued at the NASDAQ Official Closing Price. 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. Short-term investments 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. 142 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS NOTES TO THE FINANCIAL STATEMENTS (Unaudited) (Continued) iSHARES TRUST At March 31, 2003, 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 $ 604,899 $ - $ 604,899 Russell 3000 Growth 29,921 - 29,921 Russell 3000 Value 83,031 - 83,031 Russell Midcap 158,859 - 158,859 Russell Midcap Growth 22,347 - 22,347 Russell Midcap Value 117,262 - 117,262 ------------------------------------------------------------------------------ For the year ended March 31, 2003, the tax characterization of distributions paid for each Fund was equal to the book characterization of distributions paid. 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, 2003. The Funds had tax basis net capital loss carryforwards at March 31, 2003, the tax year-end of the Funds, as follows: ------------------------------------------------------------------------------ EXPIRING EXPIRING iSHARES INDEX FUND 2010 2011 TOTAL ------------------------------------------------------------------------------ Russell 3000 $ 21,789,321 $ 14,801,082 $ 36,590,403 Russell 3000 Growth 4,176,050 6,607,675 10,783,725 Russell 3000 Value 605,073 1,545,605 2,150,678 Russell Midcap 66,369 1,282,837 1,349,206 Russell Midcap Growth 40,231 10,035,874 10,076,105 Russell Midcap Value 30,986 477,717 508,703 ------------------------------------------------------------------------------ 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, 2003, certain Funds realized net capital gains or losses resulting from in-kind redemptions of large blocks of 50,000 or more iShares or multiples thereof ("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. 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, 2003 are disclosed in the Funds' Statements of Operations. NOTES TO THE FINANCIAL STATEMENTS 143 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. The Funds did not enter into any repurchase agreements at September 30, 2003; however, cash collateral for securities on loan was invested in repurchase agreements at September 30, 2003. For further information, see Note 5, below. 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 3000 0.20% Russell Midcap 0.20% Russell 3000 Growth 0.25 Russell Midcap Growth 0.25 Russell 3000 Value 0.25 Russell Midcap Value 0.25 ----------------------------------- -------------------------------- Investors Bank & Trust Company ("Investors Bank") serves as administrator, custodian and transfer agent for the Trust. 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. 144 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS NOTES TO THE FINANCIAL STATEMENTS (Unaudited) (Continued) iSHARES TRUST Barclays Global Investors, N.A. ("BGI") serves as securities lending agent for the Trust. BGI is an affiliate of BGFA, the Funds' investment advisor. As securities lending agent, BGI receives a fee based on a share of the income earned on investment of the cash collateral received for the loan of securities. For the six months ended September 30, 2003, BGI earned securities lending agent fees as follows: ------------------------------------------------- SECURITIES LENDING iSHARES INDEX FUND AGENT FEES ------------------------------------------------- Russell 3000 $ 36,786 Russell 3000 Growth 1,978 Russell 3000 Value 4,141 Russell Midcap 17,301 Russell Midcap Growth 10,663 Russell Midcap Value 10,117 ------------------------------------------------- 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. Barclays Global Investors Services ("BGIS"), a subsidiary of BGI, may serve as a broker-dealer for the Funds. For the six months ended September 30, 2003, 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") and Prime Money Market Fund ("PMMF") of Barclays Global Investors Funds. The IMMF and PMMF are feeder funds in a master/feeder fund structure that invests substantially all of its assets in the Money Market Master Portfolio and Prime Money Market Master Portfolio, respectively, which are managed by BGFA, the Funds' investment advisor. The IMMF and PMMF are open-end money market funds available only to institutional investors, including other investment companies managed by BGFA. The IMMF and PMMF seek a high level of income consistent with liquidity and the preservation of capital. While the IMMF and PMMF do not directly charge an advisory fee, the master portfolios in which they invest do charge an advisory fee. Income distributions from the IMMF and PMMF 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, the Funds executed cross trades for the six months ended September 30, 2003. Cross trading is the buying or selling of portfolio securities between funds to which BGFA (or an affiliate) serves as investment advisor. The Board reviewed all such transactions executed during the second quarter of 2003 and concluded that they were in compliance with the requirements and restrictions set forth by Rule 17a-7. The Board is scheduled at its next meeting to review all such transactions executed during the third quarter of 2003. As of September 30, 2003, certain trustees and officers of the Trust are also employees of BGFA and its affiliates or employees of Investors Bank. NOTES TO THE FINANCIAL STATEMENTS 145 NOTES TO THE FINANCIAL STATEMENTS (Unaudited) (Continued) iSHARES TRUST 3. INVESTMENT PORTFOLIO TRANSACTIONS Purchases and sales of investments (excluding in-kind transactions and short-term securities) for the six months ended September 30, 2003 were as follows: ------------------------------------------------------------------- iSHARES INDEX FUND PURCHASES SALES ------------------------------------------------------------------- Russell 3000 $ 27,565,463 $ 27,161,977 Russell 3000 Growth 7,633,404 7,613,073 Russell 3000 Value 14,873,126 14,803,149 Russell Midcap 14,060,783 13,358,384 Russell Midcap Growth 16,849,365 16,790,800 Russell Midcap Value 14,697,241 14,210,649 ------------------------------------------------------------------- In-kind transactions for the six months ended September 30, 2003 were as follows: ------------------------------------------------------------------- IN-KIND IN-KIND iSHARES INDEX FUND PURCHASES SALES ------------------------------------------------------------------- Russell 3000 $ 139,761,744 $ 213,507,743 Russell 3000 Value 13,359,692 - Russell Midcap 155,790,067 106,071,463 Russell Midcap Growth 134,886,692 46,660,967 Russell Midcap Value 75,938,497 19,084,406 ------------------------------------------------------------------- At September 30, 2003, the aggregate unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:
----------------------------------------------------------------------------------------------- NET UNREALIZED TAX UNREALIZED UNREALIZED APPRECIATION iSHARES INDEX FUND COST APPRECIATION DEPRECIATION (DEPRECIATION) ----------------------------------------------------------------------------------------------- Russell 3000 $ 1,330,288,846 $ 25,854,507 $ (200,257,952) $ (174,403,445) Russell 3000 Growth 71,621,872 4,850,339 (5,004,994) (154,655) Russell 3000 Value 135,406,432 9,385,671 (7,386,662) 1,999,009 Russell Midcap 308,878,113 22,688,261 (7,552,374) 15,135,887 Russell Midcap Growth 247,430,389 20,264,872 (5,829,748) 14,435,124 Russell Midcap Value 193,052,257 11,481,363 (4,412,018) 7,069,345 -----------------------------------------------------------------------------------------------
146 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS NOTES TO THE FINANCIAL STATEMENTS (Unaudited) (Continued) iSHARES TRUST 4. iSHARES TRANSACTIONS At September 30, 2003, 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 a Fund of securities lending are that the borrower may not provide additional collateral when required, or return the securities when due. As of September 30, 2003, the Funds had loaned securities which were collateralized by cash. The cash collateral received was invested in a joint account which invests in securities with remaining maturities of 397 days or less and money market mutual funds. Income from the joint account is allocated daily to each Fund, based on each Fund's portion of the total cash collateral received. The market value of the securities on loan at September 30, 2003 and the value of the related collateral are disclosed in the Statements of Assets and Liabilities. NOTES TO THE FINANCIAL STATEMENTS 147 NOTES: 148 2003 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS NOTES: NOTES 149 THE iSHARES FAMILY OF FUNDS The following is a list of iShares Funds being offered as of November 28, 2003, 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. The prospectus 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 Transportation Average Index Fund (IYT) iShares Dow Jones U.S. Basic Materials Sector Index Fund (IYM) iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund (IYC) iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund (IYK) iShares Dow Jones U.S. Energy Sector Index Fund (IYE) iShares Dow Jones U.S. Financial Sector Index Fund (IYF) iShares Dow Jones U.S. 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. 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) SPECIALTY iShares Dow Jones Select Dividend Index Fund (DVY) FIXED INCOME iShares GS $ InvesTop(TM) Corporate Bond Fund (LQD) 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 Lehman Aggregate Bond Fund (AGG) 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) iShares MSCI Emerging Markets Index Fund (EEM) 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) INTERNATIONAL/EMERGING COUNTRY iShares MSCI Brazil Index Fund (EWZ) iShares MSCI Malaysia Index Fund (EWM) iShares MSCI Mexico Index Fund (EWW) iShares MSCI South Africa Index Fund (EZA) 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 (I00) This advertising section does not constitute part of the 2003 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)" and "Goldman Sachs(R)" are trademarks of Goldman, Sachs & Co. 150 2003 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., a wholly owned subsidiary of Barclays Bank PLC, none of which is affiliated with SEI. iShares are not sponsored, endorsed, sold or promoted by Frank Russell Company, nor does this company make any represention regarding the advisability of investing in iShares. Investing involves risk, including possible loss of principal. (C)2003 Barclays Global Investors. All rights reserved. iShares is a registered trademark of Barclays Global Investors, N.A. All other trademarks, servicemarks or registered trademarks are the property of their respective owners. This report is intended for the Funds' shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus. iSHARES(R) Industrial strength investment tools from BARCLAYS GLOBAL INVESTORS 1 800 iSHARES (1 800 474 2737) WWW.iSHARES.COM BARCLAYS Item 2. Code of Ethics. Not applicable to this filing. Item 3. Audit Committee Financial Expert. Not applicable to this filing. Item 4. Principal Accountant Fees and Services. Not applicable to this filing. Item 5. Listed Company Audit Committees. Not applicable to this filing. Item 6. [Reserved] Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not applicable to this registrant. Item 8. [Reserved] Item 9. Controls and Procedures. (a) The President and Principal Financial Officer have concluded that, based on their evaluation as of a date within 90 days of the filing date of this report, the disclosure controls and procedures of iShares Trust are reasonably designed to achieve the purposes described in the attached certification, Section 4 (a). (b) There were no significant changes in the iShares Trust's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation. Item 10. Exhibits. (a) Not applicable to this filing. (b) Certification letters are attached. (c) Section 906 Certifications are attached. Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. iShares Trust By: /s/ Lee T. Kranefuss ------------------------------- Lee T. Kranefuss, President Date: December 1, 2003 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ Lee T. Kranefuss ------------------------------- Lee T. Kranefuss, President Date: December 1, 2003 By: /s/ Michael A. Latham ------------------------------- Michael A. Latham, Principal Financial Officer Date: December 1, 2003