Annual Shareholder Report

N-CSR 1 dncsr.htm ANNUAL SHAREHOLDER REPORT Annual Shareholder Report


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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

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:		April 30, 2004

Date of reporting period:		April 30, 2004

Form N-CSR 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-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR 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.

iShares^®

ITEM 1. Report to Stockholders

2004 ANNUAL REPORT TO SHAREHOLDERS

APRIL 30, 2004

iSHARES DOW JONES U.S. BASIC MATERIALS SECTOR INDEX FUND

iSHARES DOW JONES U.S. CONSUMER CYCLICAL SECTOR INDEX FUND

iSHARES DOW JONES U.S. CONSUMER NON-CYCLICAL SECTOR INDEX FUND

iSHARES DOW JONES U.S. FINANCIAL SECTOR INDEX FUND

iSHARES DOW JONES U.S. INDUSTRIAL SECTOR INDEX FUND

iSHARES DOW JONES U.S. FINANCIAL SERVICES INDEX FUND

iSHARES DOW JONES U.S. REAL ESTATE INDEX FUND

iSHARES COHEN & STEERS REALTY MAJORS INDEX FUND

Table of Contents



Shareholder Letter		1

Managers’ Discussion & Analysis		4

Schedules of Investments		20

iShares Dow Jones U.S. Basic Materials Sector Index Fund		20

iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund		24

iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund		31

iShares Dow Jones U.S. Financial Sector Index Fund		35

iShares Dow Jones U.S. Industrial Sector Index Fund		42

iShares Dow Jones U.S. Financial Services Index Fund		48

iShares Dow Jones U.S. Real Estate Index Fund		53

iShares Cohen & Steers Realty Majors Index Fund		57

Financial Statements		60

Financial Highlights		67

Notes to the Financial Statements		75

Report of Independent Registered Public Accounting Firm		82

Tax Information (Unaudited)		83

Supplemental Information (Unaudited)		84

Trustee Information (Unaudited)		87

iShares Family of Funds		90

THIS PAGE INTENTIONALLY LEFT BLANK.

To Our Shareholders:

Stock markets generally posted solid gains during the last twelve months, reversing the trend of the past several years. The uncertainty that characterized the first few months of the fiscal year, including tepid economic growth figures, the possibility of deflation, and high unemployment levels, diminished as the year progressed. Healthy quarterly gross domestic product (GDP) beginning in the third quarter of 2003 contributed to the performance trend, and declining unemployment rates in the first quarter of 2004 provided additional encouragement. While the performance of the past year has been a welcome relief, there is no guarantee that more challenging conditions will not return.

The iShares^® Funds continue to innovate and expand, offering more tools that help investors tailor their portfolios to achieve diversity and address volatility. For example, the iShares family of funds recently partnered with the New York Stock Exchange (the “NYSE”) and introduced two new funds based on NYSE indexes. The iShares NYSE Composite Index Fund provides broad-based exposure to common stocks, ADRs, real estate investment trusts and tracking stocks listed on the NYSE. The iShares NYSE 100 Index Fund offers exposure to the largest 100 U.S. companies, based on market capitalization, listed on the NYSE. Launched late in 2003, the iShares Dow Jones Select Dividend Index Fund provides investors with exposure to fifty of the highest dividend-yielding securities in the Dow Jones U.S. Total Market Index. The iShares family of funds has also added the iShares Lehman TIPS Bond Fund, which provides the opportunity to gain exposure to inflation-protected government securities.

With the addition of these iShares Funds, investors can achieve even more diversity in their portfolios – and at lower cost, since iShares Fund fees are, on average, about half those of actively managed funds.¹ With more than 85 different funds in the iShares family of funds to choose from, investors have the ability to build a diverse portfolio that covers a wide range of market segments with various capitalizations and sectors, as well as value and growth, international and fixed income securities. That is important because market segments do not tend to move in tandem, particularly in volatile markets. Economic factors, including 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.

As market conditions change, 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. We will continue to work closely with the financial advisor community to introduce innovative strategies and structures for their clients’ portfolios. To learn more about the iShares Funds, please visit our web site at www.iShares.com.

Regardless of market conditions, a sound, disciplined investing plan is essential. Such a plan should be grounded in key concepts: such as keeping the costs associated with investing as low as possible, managing risk and maintaining a diversified portfolio. That is why we believe the iShares Funds are an indispensable tool for investors. And that is also why more and more investors have recognized the benefits of the iShares Funds. Assets under management for the iShares family of funds continue to grow, and, as of April 30, 2004, had reached $74.2 billion.

On behalf of the iShares family of funds, we thank you for making the iShares Funds 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

iShares Trust

Morningstar Principia, BGI analysis 3/04.


SHAREHOLDER LETTER		1

The iShares Funds are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors (BGFA) serves as an advisor to the iShares Funds. Barclays Global Investors Services (BGIS) assists in the marketing of the iShares Funds. BGFA and BGIS are subsidiaries of Barclays Global Investors, N.A., none of which is affiliated with SEI.

To determine if the Fund(s) are an appropriate investment for you, carefully consider the Funds’ investment objectives, risk factors and charges and expenses before investing. This and other information can be found in the Funds’ prospectuses, which may be obtained by calling 1-800-iShares or by visiting www.iShares.com. Read the prospectus carefully before investing.

There are risks involved with investing, including possible loss of principal. Diversification may not protect against market risk. An investment in the Funds is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The annual management fees of the iShares Funds may be substantially less than those of most mutual funds. iShares transactions will result in brokerage commissions, but the savings from lower annual fees may help offset these costs.

iShares is a registered trademark of Barclays Global Investors, N.A. The iShares Funds are not sponsored, endorsed, or issued by Lehman Brothers, nor are they sponsored, endorsed, issued, sold or promoted by Dow Jones & Company, Inc. or the New York Stock Exchange, Inc. None of these companies make any representation regarding the advisability of investing in the iShares Funds. 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 2004 Annual Report.


2		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

THIS PAGE INTENTIONALLY LEFT BLANK.


		3

Managers’ Discussion & Analysis

iSHARES^® DOW JONES U.S. BASIC MATERIALS SECTOR INDEX FUND

Performance as of 4/30/04

Average Annual Total Returns

Cumulative Total Returns

Year Ended 4/30/04

Inception to 4/30/04

NAV

MARKET

INDEX

NAV

MARKET

INDEX

NAV

MARKET

INDEX

24.85%

24.95%

25.65%

6.00%

6.01%

6.56%

25.42%

25.45%

27.97%

Total returns for the periods since inception are calculated from the inception date of the Fund (6/12/00). “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 stock exchange on which the shares 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 (6/19/00), 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.

GROWTH OF $10,000 INVESTMENT

SINCE INCEPTION AT NET ASSET VALUE

[GRAPHIC APPEARS HERE]


	iSHARES DOW JONES U.S. BASIC MATERIALS SECTOR INDEX FUND		DOW JONES U.S. BASIC MATERIALS SECTOR INDEX
6/12/2000	$	10,000	$	10,000
6/30/2000	$	9,312	$	9,310
7/31/2000	$	9,434	$	9,438
8/31/2000	$	9,598	$	9,606
9/30/2000	$	8,626	$	8,637
10/31/2000	$	9,614	$	9,631
11/30/2000	$	9,435	$	9,437
12/31/2000	$	10,839	$	10,853
1/31/2001	$	10,589	$	10,607
2/28/2001	$	10,594	$	10,616
3/31/2001	$	10,156	$	10,182
4/30/2001	$	11,080	$	11,108
5/31/2001	$	11,523	$	11,561
6/30/2001	$	11,082	$	11,121
7/31/2001	$	11,096	$	11,145
8/31/2001	$	11,028	$	11,082
9/30/2001	$	9,714	$	9,769
10/31/2001	$	9,973	$	10,027
11/30/2001	$	11,151	$	11,221
12/31/2001	$	10,956	$	11,029
1/31/2002	$	11,025	$	11,093
2/28/2002	$	11,608	$	11,686
3/31/2002	$	12,081	$	12,168
4/30/2002	$	11,454	$	11,542
5/31/2002	$	11,935	$	12,0330
6/30/2002	$	11,786	$	11,886
7/31/2002	$	10,502	$	10,598
8/31/2002	$	10,422	$	10,521
9/30/2002	$	9,070	$	9,163
10/31/2002	$	9,429	$	9,531
11/30/2002	$	10,472	$	10,596
12/31/2002	$	9,992	$	10,112
1/31/2003	$	9,486	$	9,604
2/28/2003	$	9,201	$	9,320
3/31/2003	$	9,225	$	9,347
4/30/2003	$	10,046	$	10,183
5/31/2003	$	10,358	$	10,506
6/30/2003	$	10,384	$	10,538
7/31/2003	$	11,193	$	11,367
8/31/2003	$	11,519	$	11,705
9/30/2003	$	10,964	$	11,148
10/31/2003	$	11,885	$	12,088
11/30/2003	$	12,191	$	12,409
12/31/2003	$	13,472	$	13,718
1/31/2004	$	12,877	$	13,119
2/29/2004	$	13,499	$	13,761
3/31/2004	$	13,186	$	13,447
4/30/2004	$	12,542	$	12,795

Performance figures assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. The Fund’s past performance is no guarantee of future results.


4		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

FUND ALLOCATION BY INDUSTRY

(% of Net Assets)

[GRAPHIC APPEARS HERE]


Chemicals	58.34	%
Forest Products & Paper	18.76	%
Mining & Metals	22.86	%
Short-Term and Net Other Assets	0.04	%

The iShares Dow Jones U.S. Basic Materials Sector Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Basic Materials Sector Index (the “Index”). For the 12-month period ended April 30, 2004 (the “reporting period”), the Fund returned 24.85%, while the Index returned 25.65%.

Equity markets generally performed well against a backdrop of encouraging economic news during the reporting period. Quarterly gross domestic product (GDP) figures throughout the reporting period revealed healthy levels of growth. Corporate earnings growth also was strong and consistent, in some cases reaching double-digit growth rates and exceeding analyst expectations. Jobless claims, which had been the last holdout in the turn toward economic expansion, finally declined late in the reporting period, dipping to a three-year low in April.

Because improving economic conditions generally translate into increased demand for commodities products, such as paper, forest products, and metals, basic materials shares benefited from the stronger economic climate during the reporting period. The home building growth spurred by historically low interest rates provided an additional boost for companies engaged in the production of building materials. Those companies that depend on oil and natural gas, however, were hindered by volatile energy prices during the reporting period.

Among the Fund’s ten largest holdings, performance was mostly positive during the reporting period. Georgia-Pacific Corp. (2.66% of the net assets of the Fund as of April 30, 2004), which manufactures paper products and building materials, led the way with a 127.33% gain. Newmont Mining Corp. (4.92% of the net assets of the Fund as of April 30, 2004) gained 38.42%, and Alcoa Inc. (9.01% of the net assets of the Fund as of April 30, 2004) climbed 34.10%. Praxair Inc. (4.01% of the net assets of the Fund as of April 30, 2004) rose 25.86%. The largest holding at 14.45% of the Fund’s net assets as of April 30, 2004, E. I. Du Pont de Nemours and Co., posted a 0.99% gain after struggling during the reporting period due to volatile oil prices.


MANAGERS’ DISCUSSION & ANALYSIS		5

Managers’ Discussion & Analysis

iSHARES^® DOW JONES U.S. CONSUMER CYCLICAL SECTOR INDEX FUND

Performance as of 4/30/04

Average Annual Total Returns

Cumulative Total Returns

Year Ended 4/30/04

Inception to 4/30/04

NAV

MARKET

INDEX

NAV

MARKET

INDEX

NAV

MARKET

INDEX

22.21%

22.55%

22.95%

(1.57)%

(1.52)%

(1.04)%

(5.95)%

(5.76)%

(3.96)%

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 stock exchange on which the shares 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 (6/20/00), 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.

GROWTH OF $10,000 INVESTMENT

SINCE INCEPTION AT NET ASSET VALUE

[GRAPHIC APPEARS HERE]


	iSHARES DOW JONES U.S. CONSUMER CYCLICAL SECTOR INDEX FUND		DOW JONES U.S. CONSUMER CYCLICAL SECTOR INDEX
6/12/2000	$	10,000	$	10,000
6/30/2000	$	10,101	$	10,101
7/31/2000	$	10,012	$	10,013
8/31/2000	$	9,928	$	9,934
9/30/2000	$	9,769	$	9,780
10/31/2000	$	9,713	$	9,729
11/30/2000	$	9,037	$	9,055
12/31/2000	$	9,333	$	9,355
1/31/2001	$	10,442	$	10,469
2/28/2001	$	9,770	$	9,798
3/31/2001	$	9,297	$	9,329
4/30/2001	$	10,098	$	10,138
5/31/2001	$	10,378	$	10,424
6/30/2001	$	10,205	$	10,258
7/31/2001	$	10,121	$	10,177
8/31/2001	$	9,210	$	9,266
9/30/2001	$	7,945	$	7,996
10/31/2001	$	8,035	$	8,090
11/30/2001	$	9,085	$	9,152
12/31/2001	$	9,365	$	9,439
1/31/2002	$	9,291	$	9,367
2/28/2002	$	9,392	$	9,475
3/31/2002	$	9,595	$	9,685
4/30/2002	$	9,291	$	9,381
5/31/2002	$	9,249	$	9,340
6/30/2002	$	8,421	$	8,508
7/31/2002	$	7,445	$	7,526
8/31/2002	$	7,604	$	7,690
9/30/2002	$	6,951	$	7,034
10/31/2002	$	7,371	$	7,463
11/30/2002	$	7,734	$	7,834
12/31/2002	$	7,067	$	7,162
1/31/2003	$	6,873	$	6,968
2/28/2003	$	6,763	$	6,859
3/31/2003	$	6,927	$	7,030
4/30/2003	$	7,696	$	7,812
5/31/2003	$	8,019	$	8,145
6/30/2003	$	8,214	$	8,346
7/31/2003	$	8,398	$	8,538
8/31/2003	$	8,829	$	8,981
9/30/2003	$	8,437	$	8,586
10/31/2003	$	9,176	$	9,343
11/30/2003	$	9,256	$	9,428
12/31/2003	$	9,403	$	9,584
1/31/2004	$	9,355	$	9,539
2/29/2004	$	9,635	$	9,829
3/31/2004	$	9,616	$	9,816
4/30/2004	$	9,405	$	9,604


6		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

FUND ALLOCATION BY INDUSTRY

(% of Net Assets)

[GRAPHIC APPEARS HERE]


Advertising	1.84	%
Airlines	1.16	%
Auto Parts & Tires	2.56	%
Automobile Manufacturers	2.93	%
Broadcasting	22.04	%
Entertainment	0.58	%
Home Construction & Furnishings	3.67	%
Leisure Goods & Services	15.39	%
Publishing	5.51	%
Retail	42.05	%
Short-Term and Net Other Assets	0.01	%
Textiles & Apparel	2.26	%

The iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Consumer Cyclical Sector Index (the “Index”). For the 12-month period ended April 30, 2004 (the “reporting period”), the Fund returned 22.21%, while the Index returned 22.95%.

Equity markets generally delivered solid gains during the reporting period. Early in the reporting period, the Federal Reserve Board cut short-term interest rates to 1.00%, the lowest level in 45 years, in a continued effort to stimulate the economy. Increasingly, signs pointed toward improving economic conditions. Gross domestic product (GDP) figures for each of the four quarters during the reporting period were encouraging. Corporate earnings announcements also provided cause for optimism, revealing both higher earnings levels and stabilizing earnings expectations. Jobless claims, which had been the last holdout in the turn toward economic expansion, finally declined late in the reporting period, dipping to a three-year low in April.

Consumer cyclical stocks benefited from the improving economic climate during the reporting period and the corresponding increased demand for the types of consumer goods and services that tend to be sensitive to the state of the economy. The housing boom spurred by low interest rates also translated into increased demand for home improvement products.

Among the Fund’s ten largest holdings, McDonald’s Corp. (2.07% of the net assets of the Fund as of April 30, 2004) was the strongest performer with a 59.24% gain for the reporting period. Retailer Target Corp. (2.15% of the net assets of the Fund as of April 30, 2004) rose 29.69%. Home improvement stores Home Depot Inc. (4.79% of the net assets of the Fund as of April 30, 2004) and Lowe’s Companies Inc. (2.22% of the net assets of the Fund as of April 30, 2004) climbed 25.10% and 18.61%, respectively. The Walt Disney Co. (2.82% of the net assets of the Fund as of April 30, 2004) gained 23.42%. The worst performer among the ten largest Fund holdings was Viacom Inc. Class B (3.50% of the Fund’s net assets as of April 30, 2004), which declined 10.97% during the reporting period.


MANAGERS’ DISCUSSION & ANALYSIS		7

Managers’ Discussion & Analysis

iSHARES^® DOW JONES U.S. CONSUMER NON-CYCLICAL SECTOR INDEX FUND

Performance as of 4/30/04

Average Annual Total Returns

Cumulative Total Returns

Year Ended 4/30/04

Inception to 4/30/04

NAV

MARKET

INDEX

NAV

MARKET

INDEX

NAV

MARKET

INDEX

32.73%

32.67%

33.56%

7.92%

7.93%

8.68%

34.44%

34.52%

38.12%

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 stock exchange on which the shares 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 (6/16/00), 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.

GROWTH OF $10,000 INVESTMENT

SINCE INCEPTION AT NET ASSET VALUE

[GRAPHIC APPEARS HERE]


	iSHARES DOW JONES U.S. CONSUMER NON-CYCLICAL SECTOR INDEX FUND		DOW JONES U.S. CONSUMER NON-CYCLICAL SECTOR INDEX
6/12/2000	$	10,000	$	10,000
6/30/2000	$	10,066	$	10,068
7/31/2000	$	9,935	$	9,948
8/31/2000	$	9,969	$	9,986
9/30/2000	$	9,923	$	9,945
10/31/2000	$	10,451	$	10,478
11/30/2000	$	10,365	$	10,398
12/31/2000	$	10,631	$	10,669
1/31/2001	$	10,495	$	10,567
2/28/2001	$	10,527	$	10,604
3/31/2001	$	10,033	$	10,111
4/30/2001	$	10,006	$	10,086
5/31/2001	$	10,344	$	10,431
6/30/2001	$	10,225	$	10,317
7/31/2001	$	10,316	$	10,414
8/31/2001	$	10,646	$	10,753
9/30/2001	$	10,349	$	10,462
10/31/2001	$	10,410	$	10,530
11/30/2001	$	10,754	$	10,883
12/31/2001	$	10,866	$	11,002
1/31/2002	$	10,976	$	11,116
2/28/2002	$	11,375	$	11,528
3/31/2002	$	11,808	$	11,971
4/30/2002	$	11,973	$	12,144
5/31/2002	$	12,078	$	12,258
6/30/2002	$	11,362	$	11,535
7/31/2002	$	10,813	$	10,986
8/31/2002	$	10,959	$	11,137
9/30/2002	$	10,180	$	10,351
10/31/2002	$	10,522	$	10,704
11/30/2002	$	10,323	$	10,508
12/31/2002	$	10,329	$	10,521
1/31/2003	$	9,969	$	10,159
2/28/2003	$	9,737	$	9,924
3/31/2003	$	9,749	$	9,944
4/30/2003	$	10,129	$	10,338
5/31/2003	$	11,001	$	11,234
6/30/2003	$	11,143	$	11,385
7/31/2003	$	10,954	$	11,198
8/31/2003	$	11,036	$	11,286
9/30/2003	$	11,194	$	11,454
10/31/2003	$	11,705	$	11,984
11/30/2003	$	12,040	$	12,332
12/31/2003	$	12,479	$	12,789
1/31/2004	$	12,577	$	12,898
2/29/2004	$	13,073	$	13,411
3/31/2004	$	13,125	$	13,471
4/30/2004	$	13,445	$	13,808


8		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

FUND ALLOCATION BY INDUSTRY

(% of Net Assets)

[GRAPHIC APPEARS HERE]


Beverage	25.41	%
Consumer Services	12.46	%
Cosmetics	9.06	%
Food	14.54	%
Food Retailers & Wholesalers	6.29	%
Household Products	20.20	%
Short-Term and Net Other Assets	0.06	%
Tobacco	11.98	%

The iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Consumer Non-Cyclical Sector Index (the “Index”). For the 12-month period ended April 30, 2004 (the “reporting period”), the Fund returned 32.73%, while the Index returned 33.56%.

Although the broad-based uptrend in equities translated into positive returns for all sectors during the reporting period, consumer non-cyclical stocks delivered the strongest returns of all Dow Jones sectors. In part, the performance leadership was fueled by particularly strong gains for some of the Fund’s larger holdings.

Among the Fund’s ten largest holdings, Altria Group Inc. (10.63% of the net assets of the Fund as of April 30, 2004) led the way with a gain of 80.04%, followed by eBay Inc. (3.26% of the net assets of the Fund as of April 30, 2004), which climbed 72.27% during the reporting period. The Gillette Co. (3.54% of the net assets of the Fund as of April 30, 2004) rose 34.38%, and food distributor Sysco Corp. (2.33% of the net assets of the Fund as of April 30, 2004) returned 33.14%. Colgate-Palmolive Co. (2.73% of the net assets of the Fund as of April 30, 2004) was the weakest performer of the ten largest holdings, with a 1.24% gain for the reporting period.


MANAGERS’ DISCUSSION & ANALYSIS		9

Managers’ Discussion & Analysis

iSHARES^® DOW JONES U.S. FINANCIAL SECTOR INDEX FUND

Performance as of 4/30/04

Average Annual Total Returns

Cumulative Total Returns

Year Ended 4/30/04

Inception to 4/30/04

NAV

MARKET

INDEX

NAV

MARKET

INDEX

NAV

MARKET

INDEX

23.29%

23.13%

24.04%

7.15%

7.16%

7.81%

31.31%

31.33%

34.51%

Total returns for the periods since inception are calculated from the inception date of the Fund (5/22/00). “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 stock exchange on which the shares 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 (5/31/00), 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.

GROWTH OF $10,000 INVESTMENT

SINCE INCEPTION AT NET ASSET VALUE

[GRAPHIC APPEARS HERE]


	iSHARES DOW JONES U.S. FINANCIAL SECTOR INDEX FUND		DOW JONES U.S. FINANCIAL SECTOR INDEX
5/22/2000	$	10,000	$	10,000
5/31/2000	$	10,267	$	10,268
6/30/2000	$	9,719	$	9,720
7/31/2000	$	10,676	$	10,688
8/31/2000	$	11,656	$	11,676
9/30/2000	$	11,965	$	11,992
10/31/2000	$	11,890	$	11,917
11/30/2000	$	11,269	$	11,300
12/31/2000	$	12,394	$	12,432
1/31/2001	$	12,359	$	12,400
2/28/2001	$	11,609	$	11,652
3/31/2001	$	11,278	$	11,324
4/30/2001	$	11,669	$	11,739
5/31/2001	$	12,130	$	12,216
6/30/2001	$	12,186	$	12,277
7/31/2001	$	12,021	$	12,117
8/31/2001	$	11,367	$	11,461
9/30/2001	$	10,717	$	10,810
10/31/2001	$	10,515	$	10,615
11/30/2001	$	11,241	$	11,353
12/31/2001	$	11,518	$	11,638
1/31/2002	$	11,368	$	11,490
2/28/2002	$	11,258	$	11,384
3/31/2002	$	11,978	$	12,120
4/30/2002	$	11,747	$	11,889
5/31/2002	$	11,731	$	11,881
6/30/2002	$	11,201	$	11,349
7/31/2002	$	10,396	$	10,538
8/31/2002	$	10,600	$	10,749
9/30/2002	$	9,418	$	9,554
10/31/2002	$	10,138	$	10,291
11/30/2002	$	10,535	$	10,699
12/31/2002	$	10,043	$	10,200
1/31/2003	$	9,872	$	10,033
2/28/2003	$	9,592	$	9,752
3/31/2003	$	9,565	$	9,732
4/30/2003	$	10,651	$	10,844
5/31/2003	$	11,243	$	11,452
6/30/2003	$	11,280	$	11,495
7/31/2003	$	11,791	$	12,024
8/31/2003	$	11,698	$	11,935
9/30/2003	$	11,799	$	12,043
10/31/2003	$	12,590	$	12,859
11/30/2003	$	12,640	$	12,915
12/31/2003	$	13,193	$	13,489
1/31/2004	$	13,614	$	13,927
2/29/2004	$	13,973	$	14,301
3/31/2004	$	13,891	$	14,225
4/30/2004	$	13,130	$	13,451


10		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

FUND ALLOCATION BY INDUSTRY

(% of Net Assets)

[GRAPHIC APPEARS HERE]


Banks	38.55	%
Diversified Financial	21.29	%
Insurance	22.00	%
Real Estate	7.52	%
Securities Brokers	10.45	%
Short-Term and Net Other Assets	0.19	%

The iShares Dow Jones U.S. Financial Sector Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Financial Sector Index (the “Index”). For the 12-month period ended April 30, 2004 (the “reporting period”), the Fund returned 23.29%, while the Index returned 24.04%.

Financial companies performed well as economic conditions improved during the reporting period. Investment banks, in particular, were buoyed by increased equity valuations and renewed investor interest in financial markets. In addition, lower interest rates and corresponding high levels of refinance activity continued to be a boon to lenders.

Performance among the Fund’s ten largest holdings was mostly positive for the reporting period. Bank One Corp. (2.28% of the net assets of the Fund as of April 30, 2004) led the way with a 36.95% gain. American Express Co. (2.31% of the net assets of the Fund as of April 30, 2004) rose 29.29%, and investment bank J.P. Morgan Chase & Co. (3.20% of the net assets of the Fund as of April 30, 2004) climbed 28.11%. Insurer American International Group Inc. (6.79% of the net assets of the Fund as of April 30, 2004) gained 23.64%. The sole negative performer among the Fund’s ten largest holdings was Fannie Mae (2.49% of the net assets of the Fund as of April 30, 2004), which declined 5.07% during the reporting period.


MANAGERS’ DISCUSSION & ANALYSIS		11

Managers’ Discussion & Analysis

iSHARES^® DOW JONES U.S. INDUSTRIAL SECTOR INDEX FUND

Performance as of 4/30/04

Average Annual Total Returns

Cumulative Total Returns

Year Ended 4/30/04

Inception to 4/30/04

NAV

MARKET

INDEX

NAV

MARKET

INDEX

NAV

MARKET

INDEX

26.56%

26.70%

26.62%

(3.79)%

(4.24)%

(13.93)%

(13.95)%

(15.48)%

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 stock exchange on which the shares 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 (6/20/00), 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.

GROWTH OF $10,000 INVESTMENT

SINCE INCEPTION AT NET ASSET VALUE

[GRAPHIC APPEARS HERE]


	iSHARES DOW JONES U.S. INDUSTRIAL SECTOR INDEX FUND		DOW JONES U.S. INDUSTRIAL SECTOR INDEX
6/12/2000	$	10,000	$	10,000
6/30/2000	$	10,036	$	10,087
7/31/2000	$	9,964	$	9,975
8/31/2000	$	11,033	$	11,092
9/30/2000	$	10,455	$	10,483
10/31/2000	$	10,364	$	10,303
11/30/2000	$	9,544	$	9,376
12/31/2000	$	9,763	$	9,557
1/31/2001	$	9,894	$	9,701
2/28/2001	$	9,275	$	9,117
3/31/2001	$	8,312	$	8,168
4/30/2001	$	9,354	$	9,211
5/31/2001	$	9,527	$	9,384
6/30/2001	$	9,085	$	9,007
7/31/2001	$	8,824	$	8,702
8/31/2001	$	8,442	$	8,317
9/30/2001	$	7,383	$	7,281
10/31/2001	$	7,634	$	7,503
11/30/2001	$	8,394	$	8,236
12/31/2001	$	8,744	$	8,586
1/31/2002	$	8,318	$	8,146
2/28/2002	$	8,421	$	8,243
3/31/2002	$	8,662	$	8,484
4/30/2002	$	7,977	$	7,791
5/31/2002	$	7,982	$	7,787
6/30/2002	$	7,471	$	7,292
7/31/2002	$	7,071	$	6,918
8/31/2002	$	6,933	$	6,773
9/30/2002	$	6,113	$	5,961
10/31/2002	$	6,385	$	6,221
11/30/2002	$	6,887	$	6,717
12/31/2002	$	6,562	$	6,391
1/31/2003	$	6,240	$	6,078
2/28/2003	$	6,116	$	5,973
3/31/2003	$	6,165	$	6,036
4/30/2003	$	6,801	$	6,673
5/31/2003	$	7,061	$	6,919
6/30/2003	$	7,152	$	7,009
7/31/2003	$	7,420	$	7,268
8/31/2003	$	7,790	$	7,635
9/30/2003	$	7,543	$	7,404
10/31/2003	$	7,948	$	7,795
11/30/2003	$	8,109	$	7,951
12/31/2003	$	8,687	$	8,516
1/31/2004	$	8,799	$	8,646
2/29/2004	$	8,753	$	8,604
3/31/2004	$	8,653	$	8,502
4/30/2004	$	8,606	$	8,450


12		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

FUND ALLOCATION BY INDUSTRY

(% of Net Assets)

[GRAPHIC APPEARS HERE]


Advanced Industrial Equipment	4.71	%
Aerospace	11.93	%
Building Materials	2.13	%
Containers & Packaging	2.25	%
Electric Components & Equipment	4.31	%
General Industrial Services	17.41	%
Heavy Construction	0.60	%
Industrial, Diversified	42.70	%
Industrial Equipment	3.75	%
Industrial Transportation	10.21	%

The iShares Dow Jones U.S. Industrial Sector Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Industrial Sector Index (the “Index”). For the 12-month period ended April 30, 2004 (the “reporting period”) the Fund returned 26.56%, while the Index returned 26.62%.

Equity markets generally delivered solid gains during the reporting period. Early in the reporting period, the Federal Reserve Board cut short-term interest rates to 1.00%, the lowest level in 45 years, in a continued effort to stimulate the economy. Increasingly, signs pointed toward economic expansion. Quarterly gross domestic product (GDP) growth figures throughout the reporting period were encouraging. Corporate earnings announcements also provided cause for optimism, revealing both higher earnings levels and stabilizing earnings expectations. Jobless claims, which had been the last holdout in the turn toward economic expansion, finally declined late in the reporting period, dipping to a three-year low in April.

As economic activity increased during the reporting period, so did demand for industrial production, and the types of companies that are involved in industrial production, including construction, manufacturing, and transportation companies, which tended to benefit from the improved economic climate.

Among the Fund’s ten largest holdings, performance was generally strong during the reporting period. Manufacturing company Tyco International Ltd. (4.13% of the net assets of the Fund as of April 30, 2004) gained 75.96%. Aerospace company The Boeing Co. (2.42% of the net assets of the Fund as of April 30, 2004) climbed 56.49%. Machinery producer Caterpillar Inc. (2.12% of the net assets of the Fund as of April 30, 2004) and manufacturing company Honeywell International Inc. (2.18% of the net assets of the Fund as of April 30, 2004) returned 47.78% and 46.53%, respectively. General Electric Co., the largest holding at 22.28% of the Fund’s net assets as of April 30, 2004, gained 1.70% during the reporting period.


MANAGERS’ DISCUSSION & ANALYSIS		13

Managers’ Discussion & Analysis

iSHARES^® DOW JONES U.S. FINANCIAL SERVICES INDEX FUND

Performance as of 4/30/04

Average Annual Total Returns

Cumulative Total Returns

Year Ended 4/30/04

Inception to 4/30/04

NAV

MARKET

INDEX

NAV

MARKET

INDEX

NAV

MARKET

INDEX

22.91%

22.98%

23.68%

6.03%

6.05%

6.69%

25.54%

25.61%

28.56%

GROWTH OF $10,000 INVESTMENT

SINCE INCEPTION AT NET ASSET VALUE

[GRAPHIC APPEARS HERE]


	iSHARES DOW JONES U.S. FINANCIAL SERVICES INDEX FUND		DOW JONES U.S. FINANCIAL SERVICES INDEX
6/12/2000	$	10,000	$	10,000
6/30/2000	$	9,255	$	9,258
7/31/2000	$	10,112	$	10,123
8/31/2000	$	11,226	$	11,243
9/30/2000	$	11,398	$	11,423
10/31/2000	$	11,215	$	11,242
11/30/2000	$	10,491	$	10,520
12/31/2000	$	11,640	$	11,677
1/31/2001	$	11,949	$	11,990
2/28/2001	$	11,078	$	11,119
3/31/2001	$	10,652	$	10,697
4/30/2001	$	11,103	$	11,160
5/31/2001	$	11,561	$	11,631
6/30/2001	$	11,525	$	11,599
7/31/2001	$	11,472	$	11,552
8/31/2001	$	10,747	$	10,822
9/30/2001	$	9,974	$	10,049
10/31/2001	$	9,823	$	9,907
11/30/2001	$	10,538	$	10,635
12/31/2001	$	10,898	$	11,004
1/31/2002	$	10,794	$	10,903
2/28/2002	$	10,552	$	10,663
3/31/2002	$	11,436	$	11,564
4/30/2002	$	11,104	$	11,232
5/31/2002	$	11,154	$	11,290
6/30/2002	$	10,538	$	10,670
7/31/2002	$	9,743	$	9,870
8/31/2002	$	10,070	$	10,207
9/30/2002	$	8,867	$	8,993
10/31/2002	$	9,650	$	9,790
11/30/2002	$	10,004	$	10,155
12/31/2002	$	9,545	$	9,693
1/31/2003	$	9,440	$	9,591
2/28/2003	$	9,228	$	9,379
3/31/2003	$	9,154	$	9,312
4/30/2003	$	10,213	$	10,396
5/31/2003	$	10,835	$	11,035
6/30/2003	$	10,931	$	11,139
7/31/2003	$	11,370	$	11,591
8/31/2003	$	11,323	$	11,549
9/30/2003	$	11,449	$	11,683
10/31/2003	$	12,331	$	12,591
11/30/2003	$	12,365	$	12,631
12/31/2003	$	12,794	$	13,077
1/31/2004	$	13,147	$	13,445
2/29/2004	$	13,447	$	13,759
3/31/2004	$	13,332	$	13,648
4/30/2004	$	12,554	$	12,856


14		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

FUND ALLOCATION BY INDUSTRY

(% of Net Assets)

[GRAPHIC APPEARS HERE]


Banks	54.73	%
Diversified Financial	30.23	%
Securities Brokers	14.84	%
Short-Term and Net Other Assets	0.20	%

The iShares Dow Jones U.S. Financial Services Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Financial Services Index (the “Index”). For the 12-month period ended April 30, 2004 (the “reporting period”), the Fund returned 22.91%, while the Index returned 23.68%.

Financial companies benefited from the improving economic conditions. Investment banks, in particular, were buoyed by increased equity valuations and renewed investor interest in financial markets. In addition, lower interest rates and corresponding high levels of refinance activity continued to be a boon to lenders.

Among the Fund’s ten largest holdings, performance was mostly positive over the reporting period. Bank One Corp. (3.24% of the net assets of the Fund as of April 30, 2004) gained 36.95%, and investment bank J.P. Morgan Chase & Co. (4.55% of the net assets of the Fund as of April 30, 2004) climbed 28.11%. American Express Co. (3.27% of the net assets of the Fund as of April 30, 2004) gained 29.29%, and Citigroup Inc. (the largest holding at 14.60% of the Fund’s net assets as of April 30, 2004) climbed 22.52%. On the negative side, Fannie Mae (3.54% of the net assets of the Fund as of April 30, 2004) declined 5.07% during the reporting period.


MANAGERS’ DISCUSSION & ANALYSIS		15

Managers’ Discussion & Analysis

iSHARES^® DOW JONES U.S. REAL ESTATE INDEX FUND

Performance as of 4/30/04

Average Annual Total Returns

Cumulative Total Returns

Year Ended 4/30/04

Inception to 4/30/04

NAV

MARKET

INDEX

NAV

MARKET

INDEX

NAV

MARKET

INDEX

23.66%

23.88%

24.56%

14.26%

14.89%

67.83%

67.86%

71.37%

GROWTH OF $10,000 INVESTMENT

SINCE INCEPTION AT NET ASSET VALUE

[GRAPHIC APPEARS HERE]


	iSHARES DOW JONES U.S. REAL ESTATE INDEX FUND		DOW JONES U.S. REAL ESTATE INDEX
6/12/2000	$	10,000	$	10,000
6/30/2000	$	10,009	$	9,933
7/31/2000	$	10,965	$	10,909
8/31/2000	$	10,693	$	10,643
9/30/2000	$	11,079	$	11,025
10/31/2000	$	10,516	$	10,471
11/30/2000	$	10,642	$	10,603
12/31/2000	$	11,382	$	11,347
1/31/2001	$	11,473	$	11,457
2/28/2001	$	11,273	$	11,261
3/31/2001	$	11,333	$	11,328
4/30/2001	$	11,631	$	11,637
5/31/2001	$	11,892	$	11,920
6/30/2001	$	12,577	$	12,622
7/31/2001	$	12,290	$	12,333
8/31/2001	$	12,666	$	12,717
9/30/2001	$	12,051	$	12,108
10/31/2001	$	11,648	$	11,707
11/30/2001	$	12,326	$	12,397
12/31/2001	$	12,619	$	12,685
1/31/2002	$	12,622	$	12,696
2/28/2002	$	12,859	$	12,940
3/31/2002	$	13,627	$	13,723
4/30/2002	$	13,706	$	13,813
5/31/2002	$	13,934	$	14,051
6/30/2002	$	14,221	$	14,349
7/31/2002	$	13,502	$	13,623
8/31/2002	$	13,550	$	13,677
9/30/2002	$	12,932	$	13,060
10/31/2002	$	12,340	$	12,460
11/30/2002	$	12,934	$	13,068
12/31/2002	$	13,003	$	13,145
1/31/2003	$	12,600	$	12,741
2/28/2003	$	12,774	$	12,922
3/31/2003	$	13,022	$	13,180
4/30/2003	$	13,572	$	13,754
5/31/2003	$	14,368	$	14,583
6/30/2003	$	14,671	$	14,898
7/31/2003	$	15,455	$	15,707
8/31/2003	$	15,537	$	15,797
9/30/2003	$	16,021	$	16,301
10/31/2003	$	16,338	$	16,633
11/30/2003	$	17,041	$	17,358
12/31/2003	$	17,650	$	17,993
1/31/2004	$	18,388	$	18,755
2/29/2004	$	18,769	$	19,151
3/31/2004	$	19,771	$	20,184
4/30/2004	$	16,783	$	17,132


16		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

FUND ALLOCATION BY INDUSTRY

(% of Net Assets)

[GRAPHIC APPEARS HERE]


Building Materials	1.07	%
Forest Products & Paper	3.01	%
Real Estate	18.40	%
Real Estate Investment Trust	77.37	%
Short-Term and Net Other Assets	0.15	%

The iShares Dow Jones U.S. Real Estate Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Real Estate Index (the “Index”). For the 12-month period ended April 30, 2004 (the “reporting period”), the Fund returned 23.66%, while the Index gained 24.56%.

Equity markets generally delivered solid gains during the reporting period. Early in the reporting period, the Federal Reserve Board cut short-term interest rates to 1.00%, the lowest level in 45 years, in a continued effort to stimulate the economy. Increasingly, signs pointed toward economic expansion. Quarterly gross domestic product (GDP) figures throughout the reporting period were encouraging. Corporate earnings announcements also provided cause for optimism, revealing both higher earnings levels and stabilizing earnings expectations. Jobless claims, which had been the last holdout in the turn toward economic expansion, finally declined late in the reporting period, dipping to a three-year low in April.

The real estate sector benefited from the historically low interest rates, which drove a real estate boom. In addition, those companies involved with properties such as shopping centers and public storage units tended to benefit from the improving economic conditions.

Among the Fund’s ten largest holdings, performance was mostly positive during the reporting period. General Growth Properties Inc. (3.25% of the net assets of the Fund as of April 30, 2004) and Simon Property Group Inc. (4.66% of the net assets of the Fund as of April 30, 2004), which own shopping centers and malls, gained 46.22% and 31.29%, respectively. Vornado Realty Trust (2.75% of the net assets of the Fund as of April 30, 2004), which owns office properties, returned 32.76%. Plum Creek Timber Co. Inc. (3.02% of the net assets of the Fund as of April 30, 2004) climbed 27.09%. On the negative side, Equity Office Properties Trust, the largest holding at 5.60% of the Fund’s net assets, declined 3.08% during the reporting period.


MANAGERS’ DISCUSSION & ANALYSIS		17

Managers’ Discussion & Analysis

iSHARES^® COHEN & STEERS REALTY MAJORS INDEX FUND

Performance as of 4/30/04

Average Annual Total Returns

Cumulative Total Returns

Year Ended 4/30/04

Inception to 4/30/04

NAV

MARKET

INDEX

NAV

MARKET

INDEX

NAV

MARKET

INDEX

24.97%

24.84%

25.55%

13.47%

13.43%

13.88%

50.82%

50.67%

52.55%

Total returns for the periods since inception are calculated from the inception date of the Fund (1/29/01). “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 stock exchange on which the shares 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 (2/2/01), 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.

GROWTH OF $10,000 INVESTMENT

SINCE INCEPTION AT NET ASSET VALUE

[GRAPHIC APPEARS HERE]


	iSHARES COHEN & STEERS REALTY MAJORS INDEX FUND	COHEN & STEERS REALTY MAJORS INDEX
1/29/2001	$10,000	$10,000
1/31/2001	$10,046	$10,054
2/28/2001	$9,836	$9,843
3/31/2001	$9,849	$9,858
4/30/2001	$10,091	$10,103
5/31/2001	$10,263	$10,280
6/30/2001	$10,858	$10,881
7/31/2001	$10,621	$10,649
8/31/2001	$11,125	$11,161
9/30/2001	$10,704	$10,716
10/31/2001	$10,309	$10,324
11/30/2001	$10,952	$10,973
12/31/2001	$11,137	$11,162
1/31/2002	$11,085	$11,113
2/28/2002	$11,315	$11,349
3/31/2002	$12,013	$12,053
4/30/2002	$12,013	$12,059
5/31/2002	$12,254	$12,305
6/30/2002	$12,570	$12,627
7/31/2002	$11,966	$12,018
8/31/2002	$11,970	$12,027
9/30/2002	$11,461	$11,517
10/31/2002	$10,883	$10,932
11/30/2002	$11,413	$11,466
12/31/2002	$11,466	$11,528
1/31/2003	$11,128	$11,190
2/28/2003	$11,433	$11,502
3/31/2003	$11,630	$11,703
4/30/2003	$12,069	$12,152
5/31/2003	$12,722	$12,819
6/30/2003	$12,994	$13,100
7/31/2003	$13,755	$13,873
8/31/2003	$13,914	$14,038
9/30/2003	$14,408	$14,542
10/31/2003	$14,617	$14,759
11/30/2003	$15,226	$15,379
12/31/2003	$15,684	$15,847
1/31/2004	$16,390	$16,565
2/29/2004	$16,704	$16,883
3/31/2004	$17,727	$17,928
4/30/2004	$15,083	$15,257


18		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

FUND ALLOCATION BY INDUSTRY

(% of Net Assets)

[GRAPHIC APPEARS HERE]


Real Estate	10.75	%
Real Estate Investment Trust	89.15	%
Short-Term and Net Other Assets	0.10	%

The iShares Cohen & Steers Realty Majors Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Cohen & Steers Realty Majors Index (the “Index”). For the 12-month period ended April 30, 2004 (the “reporting period”), the Fund returned 24.97%, while the Index returned 25.55%.

Real estate shares continued to perform well during the reporting period, benefiting from high demand in a low-interest rate environment. In addition, the improving economic conditions translated into increased business for shopping malls, public storage facilities, and other areas that benefited individual constituents of the Index.

Nine of the Fund’s ten largest holdings posted gains during the reporting period. General Growth Properties Inc. (5.43% of the net assets of the Fund as of April 30, 2004), which owns, develops and manages shopping centers and malls, was the best performer, gaining 46.22% during the reporting period. Vornado Realty Trust (5.29% of the net assets of the Fund as of April 30, 2004) climbed 32.76%. The largest holding at 8.04% of the Fund’s net assets as of April 30, 2004, Simon Property Group Inc., whose main holdings are shopping malls, gained 31.29%. Public Storage Inc. (4.91% of the net assets of the Fund as of April 30, 2004) returned 29.98%. The weakest performer among the Fund’s ten largest holdings was Equity Office Properties Trust (7.46% of the net assets of the Fund as of April 30, 2004), which declined 3.08% during the reporting period.


MANAGERS’ DISCUSSION & ANALYSIS		19

Schedule of Investments

iSHARES^® DOW JONES U.S. BASIC MATERIALS SECTOR INDEX FUND

April 30, 2004


Security	Shares	Value
COMMON STOCKS – 99.96%

Du Pont (E.I.) de Nemours and Co.	1,065,854	$	45,778,429
Dow Chemical Co. (The)	984,287		39,066,351
Alcoa Inc.	928,605		28,554,604
International Paper Co.	513,705		20,712,586
Newmont Mining Corp.	416,870		15,590,938
Weyerhaeuser Co.	236,836		14,020,691
Praxair Inc.	347,657		12,706,863
Air Products & Chemicals Inc.	227,686		11,341,040
PPG Industries Inc.	183,081		10,858,534
Georgia-Pacific Corp.	239,700		8,413,470
Avery Dennison Corp.	104,417		6,706,704
Phelps Dodge Corp.¹	97,306		6,405,654
Rohm & Haas Co.	154,177		5,978,984
Ecolab Inc.	198,112		5,903,738
MeadWestvaco Corp.	215,065		5,623,950
Freeport-McMoRan Copper & Gold Inc.	178,696		5,450,228
Nucor Corp.	76,096		4,520,102
Engelhard Corp.	134,229		3,898,010
Sigma-Aldrich Corp.	63,376		3,589,617
Eastman Chemical Co.	82,597		3,516,154
United States Steel Corp.	112,502		3,220,932
Boise Cascade Corp.	93,349		3,148,662
International Flavors & Fragrances Inc.	85,715		3,107,169
Lyondell Chemical Co.	189,208		3,093,551
Valspar Corp. (The)	50,365		2,500,622
Louisiana-Pacific Corp.	105,964		2,499,691
Bowater Inc.	59,098		2,479,161
Cabot Corp.	65,849		2,225,696
RPM International Inc.	123,481		1,862,094
Lubrizol Corp.	55,007		1,749,223
FMC Corp.¹	35,692		1,530,830
Cytec Industries Inc.	38,734		1,523,021
Airgas Inc.	67,768		1,501,061
IMC Global Inc.	111,848		1,405,929
Worthington Industries Inc.	74,914		1,352,198
Minerals Technologies Inc.	21,854		1,281,737
Olin Corp.	73,849		1,275,372
Hercules Inc.¹	106,937		1,188,070
Great Lakes Chemical Corp.	47,017		1,181,067
Potlatch Corp.	30,838		1,168,143
Ferro Corp.	44,289		1,146,642
Millennium Chemicals Inc.	68,174		1,116,008
Georgia Gulf Corp.	34,956		1,113,698
Couer d’Alene Mines Corp.¹	228,980		1,060,177
Meridian Gold Inc.¹	106,396		1,055,448
Albemarle Corp.	35,131		1,027,582
Sensient Technologies Corp.	46,643		954,316
Fuller (H.B.) Co.	30,403		833,042
Cabot Microelectronics Corp.¹	26,529		783,401
MacDermid Inc.	24,016		777,638
OM Group Inc.¹	30,377		773,095
Crompton Corp.	119,156		741,150
Allegheny Technologies Inc.	71,835		734,154
Wausau-Mosinee Paper Corp.	51,671		724,944
Cambrex Corp.	26,146		646,329
Schulman (A.) Inc.	32,049		640,980
Stillwater Mining Co.¹	46,617		626,066
Carpenter Technology Corp.	21,608		590,115
Cleveland-Cliffs Inc.¹	11,279		534,399
WD-40 Co.	17,072		518,135
AK Steel Holding Corp.¹	109,685		515,520
Caraustar Industries Inc.¹	30,283		383,080
RTI International Metals Inc.¹	22,464		329,098
Tredegar Corp.	24,350		323,612
Ryerson Tull Inc.	24,467		287,243
Wellman Inc.	34,516		279,234
Pope & Talbot Inc.	15,942		264,637

TOTAL COMMON STOCKS (Cost: $314,430,627)			316,710,619

SHORT-TERM INVESTMENTS – 7.34%

MONEY MARKET FUNDS – 2.69%

Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^2,3	5,820,734		5,820,734
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^2,3	2,074,973		2,074,973


20		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. BASIC MATERIALS SECTOR INDEX FUND

April 30, 2004


Security	Shares or Principal		Value
BlackRock Temp Cash Money Market Fund²		95,709	$	95,709
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares²		536,270		536,270

				8,527,686
FLOATING RATE NOTES – 1.83%

Beta Finance Inc.
1.06%, 05/20/04^2,4	$	94,317		94,317
1.06%, 09/15/04^2,4		188,634		188,627
1.06%, 10/12/04^2,4		94,317		94,313
1.14%, 03/15/05^2,4		94,317		94,382
1.15%, 08/23/04^2,4		94,317		94,342
Canadian Imperial Bank of Commerce
1.24%, 10/07/04²		141,475		141,467
1.38%, 11/22/04²		47,158		47,160
1.40%, 10/29/04²		188,634		188,632
CC USA Inc.
1.06%, 05/24/04^2,4		188,634		188,633
1.07%, 07/16/04²		47,158		47,055
1.10%, 07/15/04^2,4		94,317		94,324
1.29%, 04/15/05^2,4		188,634		188,616
1.51%, 02/15/05^2,4		122,612		122,766
Dorada Finance Inc.
1.04%, 07/01/04²		66,022		65,909
1.06%, 05/20/04^2,4		188,634		188,633
1.24%, 08/09/04²		47,158		47,157
1.48%, 01/18/05^2,4		141,475		141,470
Five Finance Inc.
1.05%, 04/29/05^2,4		150,907		150,892
HBOS Treasury Services PLC
1.10%, 04/22/05²		188,634		188,634
1.24%, 04/01/05²		120,726		120,715
K2 USA LLC
1.06%, 08/16/04^2,4		47,158		47,156
1.06%, 09/27/04^2,4		203,725		203,712
1.07%, 05/17/04²		94,317		94,317
1.46%, 01/12/05^2,4		94,317		94,310

Security	Principal		Value
Links Finance LLC
1.05%, 04/15/05^2,4	$	188,634	$	188,598
1.06%, 05/04/04²		94,317		94,317
1.06%, 06/28/04²		94,317		94,314
1.09%, 07/20/04²		75,454		75,450
1.19%, 04/25/05²		188,634		188,754
Nationwide Building Society
1.11%, 04/28/05^2,4		188,634		188,634
1.14%, 07/23/04^2,4		141,475		141,475
Northern Rock PLC
1.11%, 01/13/05^2,4		179,202		179,202
Permanent Financing PLC
1.05%, 03/10/05²		188,634		188,634
1.06%, 12/10/04²		94,317		94,317
Sigma Finance Inc.
1.05%, 07/01/04²		94,317		94,313
1.08%, 10/07/04²		188,634		188,618
1.09%, 07/20/04²		94,317		94,313
1.24%, 08/06/04²		47,158		47,157
Tango Finance Corp.
1.06%, 07/06/04^2,4		56,590		56,589
1.06%, 01/18/05^2,4		82,999		82,993
1.06%, 04/07/05^2,4		69,229		69,222
1.07%, 02/25/05^2,4		105,635		105,618
1.08%, 07/15/04^2,4		56,590		56,586
WhistleJacket Capital LLC
1.06%, 09/15/04^2,4		94,317		94,311
1.26%, 10/20/04^2,4		46,725		46,447
1.32%, 02/04/05^2,4		47,158		47,151
White Pine Finance LLC
1.05%, 07/06/04²		113,180		113,178
1.05%, 04/15/05^2,4		141,475		141,449
1.06%, 08/26/04^2,4		94,317		94,312
1.06%, 11/15/04^2,4		113,180		113,180

				5,806,671
COMMERCIAL PAPER – 1.53%

Alpine Securitization Corp.
1.04%, 05/20/04²		94,317		94,271
Amsterdam Funding Corp.
1.03%, 05/05/04²		76,397		76,392
1.04%, 05/21/04²		113,180		113,121


SCHEDULES OF INVESTMENTS		21

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. BASIC MATERIALS SECTOR INDEX FUND

April 30, 2004


Security	Principal		Value
Barton Capital Corp.
1.03%, 05/03/04²	$	47,204	$	47,204
1.03%, 05/06/04²		47,158		47,154
Blue Ridge Asset Funding Corp.
1.03%, 05/21/04²		94,317		94,268
Cantabric Finance LLC
1.09%, 07/22/04²		141,475		141,133
Corporate Asset Funding
1.05%, 05/21/04²		98,090		98,038
CRC Funding LLC
1.04%, 06/03/04²		188,634		188,465
1.10%, 07/07/04²		73,567		73,421
Delaware Funding Corp.
1.03%, 05/05/04²		141,632		141,624
1.03%, 05/21/04²		47,158		47,134
Edison Asset Securitization
1.03%, 05/06/04²		141,475		141,463
1.04%, 06/17/04²		188,634		188,389
1.05%, 06/22/04²		94,317		94,179
1.07%, 09/21/04²		94,317		93,922
Eureka Securitization Inc.
1.03%, 05/25/04²		37,727		37,703
Falcon Asset Securitization Corp.
1.03%, 05/05/04²		94,317		94,312
1.04%, 05/25/04²		141,475		141,386
1.04%, 05/26/04²		188,634		188,509
Ford Credit Auto Receivables
1.04%, 05/14/04²		47,158		47,143
Galaxy Funding Inc.
1.05%, 05/17/04²		94,317		94,279
1.07%, 07/20/04²		84,885		84,688
Gemini Securitization Corp.
1.03%, 05/24/04²		47,158		47,130
GIRO Funding US Corp.
1.05%, 05/19/04²		47,158		47,136
Grampian Funding LLC
1.26%, 10/22/04²		188,634		187,503
Jupiter Securitization Corp.
1.04%, 05/20/04²		141,475		141,406
1.04%, 05/24/04²		94,317		94,260
1.04%, 05/26/04²		129,312		129,227
1.04%, 05/27/04²		169,771		169,653
New Center Asset Trust
1.06%, 05/03/04²		235,792		235,793
Park Avenue Receivables Corp.
1.03%, 05/07/04²		94,317		94,306
Polonius Inc.
1.04%, 05/21/04²		109,125		109,068
Preferred Receivables Funding Corp.
1.04%, 05/20/04²		47,158		47,135
Scaldis Capital LLC
1.04%, 05/07/04²		94,317		94,306
1.04%, 05/20/04²		254,946		254,822
1.04%, 05/25/04²		94,317		94,257
1.05%, 06/30/04²		67,531		67,417
Sydney Capital Corp.
1.25%, 10/22/04²		62,777		62,402
Thames Asset Global Securitization No. 1 Inc.
1.04%, 05/20/04²		94,317		94,271
Thunder Bay Funding Inc.
1.03%, 05/03/04²		68,010		68,010
Windmill Funding Corp.
1.03%, 05/05/04²		141,475		141,467
1.03%, 05/06/04²		94,317		94,309
1.03%, 05/10/04²		188,634		188,596

				4,830,672
TIME DEPOSITS – 0.97%

Abbey National Treasury Services PLC
1.25%, 01/06/05²		188,634		188,634
1.33%, 02/10/05²		94,317		94,306
1.39%, 02/02/05²		94,317		94,307
1.39%, 04/08/05²		132,044		132,026
1.40%, 10/25/04²		188,634		188,620
Bank of New York
1.39%, 11/01/04²		188,634		188,625
Bank of Novia Scotia
1.13%, 10/06/04²		188,634		188,634
1.24%, 10/07/04²		141,475		141,469
1.42%, 10/29/04²		141,475		141,481
National City Bank (Cleveland, Ohio)
1.25%, 01/06/05²		188,634		188,640


22		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. BASIC MATERIALS SECTOR INDEX FUND

April 30, 2004


Security	Principal		Value
Prudential Funding LLC
1.06%, 05/03/04²	$	282,951	$	282,951
Toronto-Dominion Bank
1.04%, 06/22/04²		47,158		47,158
1.22%, 03/23/05²		330,109		330,058
1.34%, 02/10/05²		75,454		75,445
1.41%, 11/01/04²		141,475		141,468
UBS Finance (Delaware)
1.10%, 09/08/04²		188,634		187,896
1.11%, 12/17/04²		282,951		280,962
1.14%, 09/29/04²		188,634		187,748

				3,080,428
U.S. GOVERNMENT AGENCY NOTES – 0.19%

Federal Home Loan Mortgage Corp.
1.15%, 05/12/04²		141,475		141,435
1.28%, 08/19/04²		75,454		75,164
1.63%, 04/15/05²		132,044		132,444
Federal National Mortgage Association
1.28%, 08/20/04²		245,224		244,274

				593,317
REPURCHASE AGREEMENTS – 0.13%

Merrill Lynch Government Securities Inc.
1.07%, 05/03/04²		405,563		405,562

				405,562

TOTAL SHORT-TERM INVESTMENTS (Cost: $23,244,336)				23,244,336

TOTAL INVESTMENTS IN SECURITIES – 107.30% (Cost: $337,674,963)				339,954,955

Other Assets, Less Liabilities – (7.30%)				(23,116,197	)

NET ASSETS – 100.00%			$	316,838,758

Non-income earning securities.

All or a portion of this security represents investments of securities lending collateral.

Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

⁴

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		23

Schedule of Investments

iSHARES^® DOW JONES U.S. CONSUMER CYCLICAL SECTOR INDEX FUND

April 30, 2004


Security	Shares	Value
COMMON STOCKS – 99.99%

Wal-Mart Stores Inc.	351,082	$	20,011,674
Home Depot Inc.	298,880		10,517,587
Time Warner Inc.¹	573,424		9,644,992
Viacom Inc. Class B	198,887		7,686,983
Walt Disney Co. (The)	269,011		6,195,323
Comcast Corp. Class A¹	165,035		4,967,553
Lowe’s Companies Inc.	93,687		4,877,345
Target Corp.	108,512		4,706,165
Walgreen Co.	134,675		4,643,594
McDonald’s Corp.	166,768		4,541,093
Cardinal Health Inc.	57,101		4,182,648
Liberty Media Corp. Class A¹	353,706		3,869,544
Ford Motor Company	231,343		3,553,428
Comcast Corp. Special Class A¹	120,331		3,488,396
Gannett Co. Inc.	35,625		3,087,975
Clear Channel Communications Inc.	73,749		3,059,846
General Motors Corp.	60,392		2,863,789
Costco Wholesale Corp.¹	60,205		2,254,677
Harley-Davidson Inc.	39,825		2,242,944
Carnival Corp.	50,541		2,156,584
DIRECTV Group Inc. (The)¹	120,018		2,148,322
Starbucks Corp.¹	52,003		2,020,837
CVS Corp.	51,869		2,003,699
Omnicom Group Inc.	25,107		1,996,258
Electronic Arts Inc.¹	39,211		1,984,861
McGraw-Hill Companies Inc. (The)	25,137		1,982,304
Gap Inc. (The)	85,665		1,885,487
Best Buy Co. Inc.	34,702		1,882,584
International Game Technology Inc.	45,551		1,719,095
Staples Inc.	65,097		1,676,899
Amazon.com Inc.¹	38,521		1,674,123
Kohls Corp.¹	39,851		1,665,373
Nike Inc. Class B	22,629		1,628,157
TJX Companies Inc.	66,192		1,626,337
Yum! Brands Inc.¹	38,633		1,498,574
Bed Bath & Beyond Inc.¹	39,246		1,456,812
Tribune Co.	28,701		1,374,204
Johnson Controls Inc.	24,762		1,358,443
Southwest Airlines Co.	93,356		1,333,124
Sears, Roebuck and Co.	32,081		1,284,844
Penney (J.C.) Co. Inc. (Holding Co.)	35,794		1,211,985
Limited Brands Inc.	57,806		1,193,116
McKesson Corp.	36,082		1,185,655
Federated Department Stores Inc.	23,787		1,165,563
May Department Stores Co. (The)	37,836		1,165,349
Marriott International Inc. Class A	24,185		1,140,565
EchoStar Communications Corp.¹	32,262		1,070,776
Starwood Hotels & Resorts Worldwide Inc.	26,869		1,069,118
Coach Inc.¹	24,560		1,046,256
Univision Communications Inc. Class A¹	29,817		1,009,305
Eastman Kodak Co.	37,552		968,466
Mattel Inc.	56,340		955,526
New York Times Co. Class A	19,672		901,174
Hilton Hotels Corp.	49,690		869,078
Cox Communications Inc. Class A¹	26,235		857,622
AmerisourceBergen Corp.	14,744		853,530
Interpublic Group of Companies Inc.¹	54,340		852,595
Genuine Parts Co.	22,824		817,099
Knight Ridder Inc.	10,521		814,746
AutoZone Inc.¹	8,913		780,511
D.R. Horton Inc.	26,994		777,427
Centex Corp.	16,211		777,317
Harrah’s Entertainment Inc.	14,412		766,430
Lennar Corp. Class A	16,193		758,642
Tiffany & Co.	19,306		752,934
Dollar General Corp.	39,941		749,293
Washington Post Company (The) Class B	796		732,320
Office Depot Inc.¹	40,902		716,194
Family Dollar Stores Inc.	21,261		683,329
Pulte Homes Inc.	13,648		671,072
RadioShack Corp.	21,613		664,816
Delphi Corp.	64,913		662,113


24		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. CONSUMER CYCLICAL SECTOR INDEX FUND

April 30, 2004


Security	Shares	Value
Harman International Industries Inc.	8,626	$	654,282
Fox Entertainment Group Inc. Class A¹	22,878		637,152
Ross Stores Inc.	19,934		607,987
Jones Apparel Group Inc.	16,531		605,035
Leggett & Platt Inc.	25,115		567,599
NTL Inc.¹	9,947		564,691
Wendy’s International Inc.	14,204		553,956
Scripps (E.W.) Co. Class A	5,193		548,121
Mohawk Industries Inc.¹	7,024		541,831
Lear Corp.	8,918		540,609
Cablevision Systems Corp.¹	24,651		538,131
XM Satellite Radio Holdings Inc. Class A¹	21,813		522,639
Royal Caribbean Cruises Ltd.	12,825		519,797
VF Corp.	11,250		519,300
PETsMART Inc.	18,702		518,045
Whirlpool Corp.	7,818		512,157
Liz Claiborne Inc.	14,356		503,896
Nordstrom Inc.	13,513		481,468
Brinker International Inc.¹	12,515		481,327
Fastenal Co.	8,640		474,077
GTECH Holdings Corp.	7,723		470,485
Brunswick Corp.	11,363		467,133
Sirius Satellite Radio Inc.¹	140,712		464,350
Chico’s FAS Inc.¹	11,390		463,915
Caesars Entertainment Inc.¹	34,655		459,179
Foot Locker Inc.	18,915		453,960
AutoNation Inc.¹	26,532		451,575
Darden Restaurants Inc.	19,862		450,073
Michaels Stores Inc.	8,953		447,919
Lamar Advertising Co.¹	10,805		443,653
Mandalay Resort Group	7,614		437,424
Toys R Us Inc.¹	27,916		431,302
Dollar Tree Stores Inc.¹	15,139		407,996
Henry Schein Inc.¹	5,748		405,062
Williams-Sonoma Inc.¹	12,408		403,012
Abercrombie & Fitch Co. Class A	12,712		399,792
Gentex Corp.	10,111		397,666
Dana Corp.	19,429		391,689
Outback Steakhouse Inc.	8,855		389,000
Hasbro Inc.	20,478		386,829
ARAMARK Corp. Class B	12,919		369,483
MGM Mirage¹	8,004		366,663
Belo (A.H.) Corp.	12,874		366,394
UnitedGlobalCom Inc. Class A¹	46,985		351,448
CarMax Inc.¹	13,551		351,242
KB Home	4,920		339,136
Advance Auto Parts Inc.¹	7,454		321,640
NVR Inc.¹	710		320,210
O’Reilly Automotive Inc.¹	7,124		319,796
JetBlue Airways Corp.¹	11,401		315,580
Westwood One Inc.¹	10,395		307,068
Circuit City Stores Inc.	25,127		293,483
BorgWarner Inc.	3,576		293,017
Rite Aid Corp.¹	58,448		286,395
Applebee’s International Inc.	7,252		281,233
Meredith Corp.	5,296		269,778
Activision Inc.¹	17,843		268,716
Maytag Corp.	9,605		267,979
Cheesecake Factory (The)¹	6,322		267,737
Ruby Tuesday Inc.	8,725		261,052
Ryland Group Inc.	3,261		257,456
Herman Miller Inc.	9,640		253,339
Borders Group Inc.	10,360		248,329
Dow Jones & Co. Inc.	5,293		243,954
Krispy Kreme Doughnuts Inc.¹	7,498		243,760
CBRL Group Inc.	6,482		243,399
Polaris Industries Inc.	5,642		242,042
Toll Brothers Inc.¹	6,106		241,614
AnnTaylor Stores Corp.¹	5,930		240,343
Pier 1 Imports Inc.	11,544		238,499
Entercom Communications Corp.¹	5,180		236,208
AMR Corp.¹	20,788		235,944
Polo Ralph Lauren Corp.	6,801		235,315
HON Industries Inc.	6,226		230,424
Saks Inc.	15,942		229,565
Lee Enterprises Inc.	4,770		227,911
Metro-Goldwyn-Mayer Inc.¹	10,718		225,292
BJ’s Wholesale Club Inc.¹	9,241		223,909
Kmart Holding Corp.¹	4,983		222,939


SCHEDULES OF INVESTMENTS		25

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. CONSUMER CYCLICAL SECTOR INDEX FUND

April 30, 2004


Security	Shares	Value
Pacific Sunwear of California Inc.¹	10,373	$	222,708
Reebok International Ltd.	6,029		219,335
Claire’s Stores Inc.	10,732		218,718
Big Lots Inc.¹	15,406		218,149
Viacom Inc. Class A	5,562		217,808
Pixar Inc.¹	3,181		217,262
Barnes & Noble Inc.¹	7,112		212,435
Valassis Communications Inc.¹	6,812		210,491
Cooper Tire & Rubber Co.	9,719		207,889
Ethan Allen Interiors Inc.	4,924		204,691
Standard-Pacific Corp.	3,980		200,751
Extended Stay America Inc.	10,285		200,043
Goodyear Tire & Rubber Co. (The)¹	22,743		198,092
M.D.C. Holdings Inc.	3,129		193,341
Station Casinos Inc.	4,286		193,213
Linens ‘n Things Inc.¹	5,936		192,564
Media General Inc. Class A	2,669		191,848
Avid Technology Inc.¹	3,983		191,064
ArvinMeritor Inc.	9,211		190,576
Furniture Brands International Inc.	6,770		190,508
Zale Corp.¹	3,382		189,121
Pep Boys-Manny, Moe & Jack Inc.	6,840		187,895
Tommy Hilfiger Corp.¹	11,989		187,028
Donnelley (R.H.) Corp.¹	4,121		186,640
Neiman-Marcus Group Inc. Class A	3,823		185,951
McClatchy Co. (The) Class A	2,607		185,097
Beazer Homes USA Inc.	1,809		178,096
Visteon Corp.	16,289		176,899
CEC Entertainment Inc.¹	5,103		174,370
Urban Outfitters Inc.¹	3,722		171,845
American Eagle Outfitters Inc.¹	6,668		171,301
Take-Two Interactive Software Inc.¹	5,920		171,029
Marvel Enterprises Inc.¹	8,935		169,676
American Greetings Corp. Class A¹	8,198		168,059
Sonic Corp.¹	5,113		164,997
Wynn Resorts Ltd.¹	4,122		164,591
Hollinger International Inc.	8,118		161,954
Tractor Supply Co.¹	4,106		160,380
Readers Digest Association Inc. (The)	11,182		160,238
Quiksilver Inc.¹	7,408		160,235
PETCO Animal Supplies Inc.¹	5,445		159,865
Harte-Hanks Inc.	6,658		159,526
Radio One Inc. Class D¹	8,365		158,600
Timberland Co. Class A¹	2,515		157,741
Hovnanian Enterprises Inc. Class A¹	4,369		157,153
Gemstar-TV Guide International Inc.¹	28,107		157,118
Wiley (John) & Sons Inc. Class A	5,129		156,947
P.F. Chang’s China Bistro Inc.¹	3,165		154,642
La Quinta Corp.¹	21,405		153,902
American Axle & Manufacturing Holdings Inc.¹	4,000		153,880
Aeropostale Inc.¹	6,995		153,809
Emmis Communications Corp.¹	6,550		153,270
Alliance Gaming Corp.¹	6,056		151,218
Dillards Inc. Class A	8,902		149,821
Panera Bread Co. Class A¹	3,628		148,276
International Speedway Corp. Class A	3,495		147,244
Cumulus Media Inc. Class A¹	6,960		146,299
Scientific Games Corp. Class A¹	8,092		145,980
La-Z-Boy Inc.	6,961		145,067
Callaway Golf Co.	8,521		144,601
Thor Industries Inc.	5,159		143,730
Wolverine World Wide Inc.	5,224		140,421
Kellwood Co.	3,553		140,166
Bob Evans Farms Inc.	4,571		140,147
SkyWest Inc.	7,671		139,612
Hot Topic Inc.¹	6,262		139,392
Tuesday Morning Corp.¹	4,668		137,659
DoubleClick Inc.¹	16,997		137,166
Airtran Holdings Inc.¹	11,134		135,946
Guitar Center Inc.¹	3,218		133,611
Charter Communications Inc. Class A¹	33,094		132,376
99 Cents Only Stores¹	6,696		132,313
Jack in the Box Inc.¹	4,812		130,309
Payless ShoeSource Inc.¹	9,092		128,652
Winnebago Industries Inc.	4,449		128,265
Scholastic Corp.¹	4,483		127,138


26		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. CONSUMER CYCLICAL SECTOR INDEX FUND

April 30, 2004


Security	Shares	Value
Owens & Minor Inc.	5,153	$	125,218
Fossil Inc.¹	5,069		124,140
ADVO Inc.	3,924		123,214
FactSet Research Systems Inc.	2,939		116,855
Aztar Corp.¹	4,426		114,633
Sports Authority Inc. (The)¹	2,877		110,304
Men’s Wearhouse Inc. (The)¹	4,326		110,270
Talbots Inc. (The)	3,150		110,092
Modine Manufacturing Co.	3,946		108,515
IHOP Corp.	2,824		104,912
Catalina Marketing Corp.¹	6,301		104,471
Charming Shoppes Inc.¹	14,590		103,005
Cost Plus Inc.¹	2,845		102,989
Ryan’s Family Steak Houses Inc.¹	5,672		102,890
Cox Radio Inc. Class A¹	4,957		102,659
PSS World Medical Inc.¹	8,752		97,935
Priority Healthcare Corp. Class B¹	4,839		97,022
Hollywood Entertainment Corp.¹	7,106		95,647
Hearst-Argyle Television Inc.	3,565		93,581
Delta Air Lines Inc.	15,007		93,344
Continental Airlines Inc. Class B¹	8,682		92,550
Six Flags Inc.¹	12,398		92,117
THQ Inc.¹	4,918		91,180
Lexar Media Inc.¹	9,734		90,526
Superior Industries International Inc.	2,639		89,937
Christopher & Banks Corp.	4,977		89,039
NetFlix Inc.¹	3,424		86,593
Champion Enterprises Inc.¹	7,761		84,517
Fred’s Inc.	4,277		79,424
Interactive Data Corp.¹	4,592		76,778
Sinclair Broadcast Group Inc. Class A¹	6,206		76,706
Alaska Air Group Inc.¹	3,458		76,526
WMS Industries Inc.¹	2,688		75,909
Longs Drug Stores Corp.	3,863		75,715
Lone Star Steakhouse & Saloon Inc.	2,348		72,201
Fleetwood Enterprises Inc.¹	4,971		72,079
Northwest Airlines Corp.¹	7,595		71,393
Steelcase Inc. Class A	5,375		66,059
Lennar Corp. Class B	1,434		62,953
Nautilus Group Inc. (The)	3,901		62,728
Genesco Inc.¹	2,751		61,210
Russell Corp.	3,600		59,868
Papa John’s International Inc.¹	1,736		58,069
Phillips-Van Heusen Corp.	3,174		57,354
Prime Hospitality Corp.¹	5,607		56,350
Jakks Pacific Inc.¹	3,242		56,314
Pinnacle Entertainment Inc.¹	4,752		54,268
Stride Rite Corp.	5,057		54,262
Insight Communications Co. Inc.¹	5,921		53,940
ShopKo Stores Inc.¹	3,940		52,244
Duane Reade Inc.¹	3,078		51,372
Cato Corp. Class A	2,539		50,831
Children’s Place Retail Stores Inc. (The)¹	1,908		50,257
ValueVision Media Inc. Class A¹	3,392		47,624
Interface Inc. Class A¹	5,498		46,898
Dress Barn Inc.¹	2,712		45,616
Oakley Inc.	3,259		45,105
Triarc Companies Inc. Class B	4,077		42,605
Stein Mart Inc.¹	3,251		41,353
Atlantic Coast Airlines Holdings Inc.¹	6,258		40,990
Kenneth Cole Productions Class A	1,174		40,609
Young Broadcasting Inc. Class A¹	2,270		40,088
Tower Automotive Inc.¹	6,374		32,635
Triarc Companies Inc.	1,801		19,811
Bally Total Fitness Holding Corp.¹	4,434		18,268
Unifi Inc.¹	6,549		16,372

TOTAL COMMON STOCKS (Cost: $222,719,807)			219,354,494


SCHEDULES OF INVESTMENTS		27

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. CONSUMER CYCLICAL SECTOR INDEX FUND

April 30, 2004


Security	Shares or Principal		Value
SHORT-TERM INVESTMENTS – 9.73%

MONEY MARKET FUNDS – 3.54%

Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^2,3		5,273,866	$	5,273,866
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^2,3		1,914,221		1,914,221
BlackRock Temp Cash Money Market Fund²		88,295		88,295
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares²		494,724		494,724

				7,771,106
FLOATING RATE NOTES – 2.44%

Beta Finance Inc.
1.06%, 05/20/04^2,4	$	87,010		87,009
1.06%, 09/15/04^2,4		174,020		174,014
1.06%, 10/12/04^2,4		87,010		87,006
1.14%, 03/15/05^2,4		87,010		87,070
1.15%, 08/23/04^2,4		87,010		87,033
Canadian Imperial Bank of Commerce
1.24%, 10/07/04²		130,515		130,507
1.38%, 11/22/04²		43,505		43,507
1.40%, 10/29/04²		174,020		174,018
CC USA Inc.
1.06%, 05/24/04^2,4		174,020		174,020
1.07%, 07/16/04²		43,505		43,409
1.10%, 07/15/04^2,4		87,010		87,016
1.29%, 04/15/05^2,4		174,020		174,004
1.51%, 02/15/05^2,4		113,113		113,254
Dorada Finance Inc.
1.04%, 07/01/04²		60,907		60,803
1.06%, 05/20/04^2,4		174,020		174,019
1.24%, 08/09/04²		43,505		43,503
1.48%, 01/18/05^2,4		130,515		130,510
Five Finance Inc.
1.05%, 04/29/05^2,4		139,216		139,203

Security	Principal		Value
HBOS Treasury Services PLC
1.10%, 04/22/05²	$	174,020	$	174,020
1.24%, 04/01/05²		111,373		111,363
K2 USA LLC
1.06%, 08/16/04^2,4		43,505		43,503
1.06%, 09/27/04^2,4		187,942		187,930
1.07%, 05/17/04²		87,010		87,010
1.46%, 01/12/05^2,4		87,010		87,005
Links Finance LLC
1.05%, 04/15/05^2,4		174,020		173,988
1.06%, 05/04/04²		87,010		87,010
1.06%, 06/28/04²		87,010		87,007
1.09%, 07/20/04²		69,608		69,605
1.19%, 04/25/05²		174,020		174,131
Nationwide Building Society
1.11%, 04/28/05^2,4		174,020		174,020
1.14%, 07/23/04^2,4		130,515		130,515
Northern Rock PLC
1.11%, 01/13/05^2,4		165,319		165,319
Permanent Financing PLC
1.05%, 03/10/05²		174,020		174,020
1.06%, 12/10/04²		87,010		87,010
Sigma Finance Inc.
1.05%, 07/01/04²		87,010		87,007
1.08%, 10/07/04²		174,020		174,005
1.09%, 07/20/04²		87,010		87,006
1.24%, 08/06/04²		43,505		43,504
Tango Finance Corp.
1.06%, 07/06/04^2,4		52,206		52,205
1.06%, 01/18/05^2,4		76,569		76,563
1.06%, 04/07/05^2,4		63,865		63,859
1.07%, 02/25/05^2,4		97,451		97,435
1.08%, 07/15/04^2,4		52,206		52,203
WhistleJacket Capital LLC
1.06%, 09/15/04^2,4		87,010		87,004
1.26%, 10/20/04^2,4		43,105		42,849
1.32%, 02/04/05^2,4		43,505		43,498


28		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. CONSUMER CYCLICAL SECTOR INDEX FUND

April 30, 2004


Security	Principal		Value
White Pine Finance LLC
1.05%, 07/06/04²	$	104,412	$	104,410
1.05%, 04/15/05^2,4		130,515		130,490
1.06%, 08/26/04^2,4		87,010		87,006
1.06%, 11/15/04^2,4		104,412		104,412

				5,356,817
COMMERCIAL PAPER – 2.03%

Alpine Securitization Corp.
1.04%, 05/20/04²		87,010		86,967
Amsterdam Funding Corp.
1.03%, 05/05/04²		70,478		70,475
1.04%, 05/21/04²		104,412		104,358
Barton Capital Corp.
1.03%, 05/03/04²		43,547		43,547
1.03%, 05/06/04²		43,505		43,501
Blue Ridge Asset Funding Corp.
1.03%, 05/21/04²		87,010		86,965
Cantabric Finance LLC
1.09%, 07/22/04²		130,515		130,199
Corporate Asset Funding
1.05%, 05/21/04²		90,490		90,443
CRC Funding LLC
1.04%, 06/03/04²		174,020		173,864
1.10%, 07/07/04²		67,868		67,733
Delaware Funding Corp.
1.03%, 05/05/04²		130,660		130,652
1.03%, 05/21/04²		43,505		43,483
Edison Asset Securitization
1.03%, 05/06/04²		130,515		130,504
1.04%, 06/17/04²		174,020		173,794
1.05%, 06/22/04²		87,010		86,883
1.07%, 09/21/04²		87,010		86,646
Eureka Securitization Inc.
1.03%, 05/25/04²		34,804		34,782
Falcon Asset Securitization Corp.
1.03%, 05/05/04²		87,010		87,005
1.04%, 05/25/04²		130,515		130,433
1.04%, 05/26/04²		174,020		173,905
Ford Credit Auto Receivables
1.04%, 05/14/04²		43,505		43,491
Galaxy Funding Inc.
1.05%, 05/17/04²		87,010		86,975
1.07%, 07/20/04²		78,309		78,127
Gemini Securitization Corp.
1.03%, 05/24/04²		43,505		43,479
GIRO Funding US Corp.
1.05%, 05/19/04²		43,505		43,485
Grampian Funding LLC
1.26%, 10/22/04²		174,020		172,977
Jupiter Securitization Corp.
1.04%, 05/20/04²		130,515		130,451
1.04%, 05/24/04²		87,010		86,957
1.04%, 05/26/04²		119,294		119,215
1.04%, 05/27/04²		156,618		156,510
New Center Asset Trust
1.06%, 05/03/04²		217,525		217,525
Park Avenue Receivables Corp.
1.03%, 05/07/04²		87,010		87,000
Polonius Inc.
1.04%, 05/21/04²		100,671		100,618
Preferred Receivables Funding Corp.
1.04%, 05/20/04²		43,505		43,484
Scaldis Capital LLC
1.04%, 05/07/04²		87,010		87,000
1.04%, 05/20/04²		235,195		235,080
1.04%, 05/25/04²		87,010		86,955
1.05%, 06/30/04²		62,299		62,194
Sydney Capital Corp.
1.25%, 10/22/04²		57,914		57,568
Thames Asset Global Securitization No. 1 Inc.
1.04%, 05/20/04²		87,010		86,967
Thunder Bay Funding Inc.
1.03%, 05/03/04²		62,741		62,742
Windmill Funding Corp.
1.03%, 05/05/04²		130,515		130,508
1.03%, 05/06/04²		87,010		87,003
1.03%, 05/10/04²		174,020		173,985

				4,456,435


SCHEDULES OF INVESTMENTS		29

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. CONSUMER CYCLICAL SECTOR INDEX FUND

April 30, 2004


Security	Principal		Value
TIME DEPOSITS – 1.30%

Abbey National Treasury Services PLC
1.25%, 01/06/05²	$	174,020	$	174,020
1.33%, 02/10/05²		87,010		87,000
1.39%, 02/02/05²		87,010		87,000
1.39%, 04/08/05²		121,814		121,797
1.40%, 10/25/04²		174,020		174,008
Bank of New York
1.39%, 11/01/04²		174,020		174,011
Bank of Novia Scotia
1.13%, 10/06/04²		174,020		174,020
1.24%, 10/07/04²		130,515		130,509
1.42%, 10/29/04²		130,515		130,520
National City Bank (Cleveland, Ohio)
1.25%, 01/06/05²		174,020		174,026
Prudential Funding LLC
1.06%, 05/03/04²		261,030		261,030
Toronto-Dominion Bank
1.04%, 06/22/04²		43,505		43,505
1.22%, 03/23/05²		304,535		304,488
1.34%, 02/10/05²		69,608		69,600
1.41%, 11/01/04²		130,515		130,509
UBS Finance (Delaware)
1.10%, 09/08/04²		174,020		173,339
1.11%, 12/17/04²		261,030		259,196
1.14%, 09/29/04²		174,020		173,203

				2,841,781
U.S. GOVERNMENT AGENCY NOTES – 0.25%

Federal Home Loan Mortgage Corp.
1.15%, 05/12/04²		130,515		130,478
1.28%, 08/19/04²		69,608		69,341
1.63%, 04/15/05²		121,814		122,183
Federal National Mortgage Association
1.28%, 08/20/04²		226,226		225,343

				547,345
REPURCHASE AGREEMENTS – 0.17%

Merrill Lynch Government Securities Inc.
1.07%, 05/03/04²		374,144		374,144

				374,144

TOTAL SHORT-TERM INVESTMENTS (Cost: $21,347,628)				21,347,628

TOTAL INVESTMENTS IN SECURITIES – 109.72% (Cost: $244,067,435)				240,702,122
Other Assets, Less Liabilities – (9.72%)				(21,315,336	)

NET ASSETS – 100.00%			$	219,386,786

Non-income earning securities.

All or a portion of this security represents investments of securities lending collateral.

Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

⁴

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

See notes to financial statements.


30		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® DOW JONES U.S. CONSUMER NON-CYCLICAL SECTOR INDEX FUND

April 30, 2004


Security	Shares	Value

COMMON STOCKS – 99.94%

Procter & Gamble Co.	353,709	$	37,404,727
Coca-Cola Co. (The)	615,354		31,118,452
Altria Group Inc.	555,893		30,785,354
PepsiCo Inc.	469,845		25,601,854
Anheuser-Busch Companies Inc.	222,989		11,425,956
Gillette Co. (The)	250,521		10,251,319
eBay Inc.¹	118,133		9,429,376
Kimberly-Clark Corp.	137,271		8,984,387
Colgate-Palmolive Co.	136,614		7,907,218
Sysco Corp.	176,454		6,749,366
Cendant Corp.	281,928		6,676,055
Avon Products Inc.	64,729		5,437,236
Sara Lee Corp.	216,543		4,997,812
InterActiveCorp¹	145,006		4,621,341
ConAgra Foods Inc.	146,956		4,245,559
General Mills Inc.	80,838		3,940,853
Heinz (H.J.) Co.	96,367		3,680,256
Apollo Group Inc. Class A¹	38,740		3,520,691
Kroger Co.¹	185,967		3,254,423
Fortune Brands Inc.	40,045		3,053,431
Archer-Daniels-Midland Co.	161,872		2,842,472
Safeway Inc.¹	121,065		2,778,442
Kellogg Co.	64,704		2,775,802
Kraft Foods Inc.	75,708		2,491,550
Wrigley (William Jr.) Co.	37,326		2,303,014
Clorox Co.	42,175		2,183,821
Hershey Foods Corp.	24,124		2,144,382
Block (H & R) Inc.	45,192		2,038,611
Albertson’s Inc.	87,171		2,036,315
Campbell Soup Co.	69,724		1,926,474
Newell Rubbermaid Inc.	75,112		1,775,648
Coca-Cola Enterprises Inc.	65,567		1,770,309
UST Inc.	45,309		1,685,948
Career Education Corp.¹	25,932		1,659,648
R.J. Reynolds Tobacco Holdings Inc.	23,117		1,497,288
Dean Foods Co.¹	42,628		1,431,448
Estee Lauder Companies Inc.Class A	30,621		1,399,686
Whole Foods Market Inc.	16,676		1,333,913
Pepsi Bottling Group Inc.	44,417		1,300,086
Black & Decker Corp.	21,233		1,228,329
Tyson Foods Inc. Class A	64,392		1,206,706
McCormick & Co. Inc.	33,392		1,140,671
SUPERVALU Inc.	36,726		1,130,794
Bunge Ltd.	27,293		1,011,206
ServiceMaster Co. (The)	80,719		979,121
Energizer Holdings Inc.¹	22,276		964,551
Stanley Works (The)	22,155		941,809
Alberto-Culver Co.	18,906		891,607
Constellation Brands Inc.¹	25,633		849,221
Corinthian Colleges Inc.¹	24,548		751,660
Smucker (J.M.) Co. (The)	13,698		716,405
Rent-A-Center Inc.¹	22,437		656,731
Smithfield Foods Inc.¹	23,887		635,394
Hormel Foods Corp.	20,406		622,179
NBTY Inc.¹	16,574		615,890
Service Corp. International¹	82,506		609,719
Del Monte Foods Co.¹	54,347		601,078
Education Management Corp.¹	16,341		579,452
Regis Corp.	12,171		528,465
Brown-Forman Corp. Class B	10,896		510,587
ITT Educational Services Inc.¹	12,556		506,383
Church & Dwight Co. Inc.	11,078		497,956
Snap-On Inc.	14,458		488,391
DeVry Inc.¹	16,751		482,429
Dreyer’s Grand Ice Cream Holdings Inc.	5,965		471,175
Coors (Adolf) Company Class B	7,084		465,490
Strayer Education Inc.	3,686		460,639
Weight Watchers International Inc.¹	11,567		451,113
Performance Food Group Co.¹	12,533		440,284
PepsiAmericas Inc.	21,845		437,555
Corn Products International Inc.	9,773		415,352
Scotts Co. (The) Class A¹	6,008		396,228
Sylvan Learning Systems Inc.¹	11,025		388,631
Loews Corporation - Carolina Group	14,570		382,317
University of Phoenix Online¹	4,018		349,807
Universal Corp.	6,909		347,108


SCHEDULES OF INVESTMENTS		31

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. CONSUMER NON-CYCLICAL SECTOR INDEX FUND

April 30, 2004


Security	Shares	Value
Nu Skin Enterprises Inc. Class A	14,639	$	346,505
Lancaster Colony Corp.	7,667		316,647
United Rentals Inc.¹	18,003		309,652
Flowers Foods Inc.	12,308		301,423
Blyth Inc.	9,070		294,866
Ralcorp Holdings Inc.¹	8,021		279,211
Matthews International Corp. Class A	8,806		268,583
Tupperware Corp.	14,320		268,214
Tootsie Roll Industries Inc.	6,365		221,770
Casey’s General Store Inc.	12,891		213,475
Chiquita Brands International Inc.¹	10,951		197,228
Stewart Enterprises Inc. Class A¹	24,515		178,960
Winn-Dixie Stores Inc.	22,995		175,222
Sotheby’s Holdings Inc. Class A¹	12,457		161,816
Hain Celestial Group Inc.¹	8,005		158,499
American Italian Pasta Co. Class A	4,851		150,187
Priceline.com Inc.¹	5,758		139,516
Interstate Bakeries Corp.	12,316		139,171
International Multifoods Corp.¹	4,885		121,392
Roto-Rooter Inc.	2,349		113,692
Pre-Paid Legal Services Inc.¹	4,303		107,575
Robert Mondavi Corp. (The) Class A¹	2,896		104,256
Wild Oats Markets Inc.¹	7,450		102,810
Stamps.com Inc.	10,419		71,058
Learning Tree International Inc.¹	2,226		35,037

TOTAL COMMON STOCKS (Cost: $268,008,529)			289,389,721

SHORT-TERM INVESTMENTS – 7.40%

MONEY MARKET FUNDS – 2.68%

Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^2,3	5,238,307		5,238,307
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^2,3	1,928,892		1,928,892


Security	Shares or Principal		Value
BlackRock Temp Cash Money Market Fund²		88,971	$	88,971
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares²		498,516		498,516

				7,754,686
FLOATING RATE NOTES – 1.86%

Beta Finance Inc.
1.06%, 05/20/04^2,4	$	87,677		87,676
1.06%, 09/15/04^2,4		175,354		175,347
1.06%, 10/12/04^2,4		87,677		87,673
1.14%, 03/15/05^2,4		87,677		87,738
1.15%, 08/23/04^2,4		87,677		87,700
Canadian Imperial Bank of Commerce
1.24%, 10/07/04²		131,515		131,507
1.38%, 11/22/04²		43,838		43,840
1.40%, 10/29/04²		175,354		175,352
CC USA Inc.
1.06%, 05/24/04^2,4		175,354		175,353
1.07%, 07/16/04²		43,838		43,742
1.10%, 07/15/04^2,4		87,677		87,683
1.29%, 04/15/05^2,4		175,354		175,337
1.51%, 02/15/05^2,4		113,980		114,122
Dorada Finance Inc.
1.04%, 07/01/04²		61,374		61,269
1.06%, 05/20/04^2,4		175,354		175,353
1.24%, 08/09/04²		43,838		43,837
1.48%, 01/18/05^2,4		131,515		131,511
Five Finance Inc.
1.05%, 04/29/05^2,4		140,283		140,269
HBOS Treasury Services PLC
1.10%, 04/22/05²		175,354		175,354
1.24%, 04/01/05²		112,226		112,216
K2 USA LLC
1.06%, 08/16/04^2,4		43,838		43,837
1.06%, 09/27/04^2,4		189,382		189,371
1.07%, 05/17/04²		87,677		87,677
1.46%, 01/12/05^2,4		87,677		87,671


32		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. CONSUMER NON-CYCLICAL SECTOR INDEX FUND

April 30, 2004


Security	Principal		Value
Links Finance LLC
1.05%, 04/15/05^2,4	$	175,354	$	175,320
1.06%, 05/04/04²		87,677		87,677
1.06%, 06/28/04²		87,677		87,674
1.09%, 07/20/04²		70,142		70,139
1.19%, 04/25/05²		175,354		175,465
Nationwide Building Society
1.11%, 04/28/05^2,4		175,354		175,354
1.14%, 07/23/04^2,4		131,515		131,515
Northern Rock PLC
1.11%, 01/13/05^2,4		166,586		166,586
Permanent Financing PLC
1.05%, 03/10/05²		175,354		175,354
1.06%, 12/10/04²		87,677		87,677
Sigma Finance Inc.
1.05%, 07/01/04²		87,677		87,673
1.08%, 10/07/04²		175,354		175,339
1.09%, 07/20/04²		87,677		87,673
1.24%, 08/06/04²		43,838		43,837
Tango Finance Corp.
1.06%, 07/06/04^2,4		52,606		52,605
1.06%, 01/18/05^2,4		77,156		77,150
1.06%, 04/07/05^2,4		64,355		64,349
1.07%, 02/25/05^2,4		98,198		98,182
1.08%, 07/15/04^2,4		52,606		52,603
WhistleJacket Capital LLC
1.06%, 09/15/04^2,4		87,677		87,670
1.26%, 10/20/04^2,4		43,435		43,177
1.32%, 02/04/05^2,4		43,838		43,832
White Pine Finance LLC
1.05%, 07/06/04²		105,212		105,211
1.05%, 04/15/05^2,4		131,515		131,482
1.06%, 08/26/04^2,4		87,677		87,673
1.06%, 11/15/04^2,4		105,212		105,212

				5,397,864
COMMERCIAL PAPER – 1.55%

Alpine Securitization Corp.
1.04%, 05/20/04²		87,677		87,634
Amsterdam Funding Corp.
1.03%, 05/05/04²		71,018		71,014
1.04%, 05/21/04²		105,212		105,158
Barton Capital Corp.
1.03%, 05/03/04²		43,881		43,881
1.03%, 05/06/04²		43,838		43,835
Blue Ridge Asset Funding Corp.
1.03%, 05/21/04²		87,677		87,632
Cantabric Finance LLC
1.09%, 07/22/04²		131,515		131,197
Corporate Asset Funding
1.05%, 05/21/04²		91,184		91,136
CRC Funding LLC
1.04%, 06/03/04²		175,354		175,197
1.10%, 07/07/04²		68,388		68,252
Delaware Funding Corp.
1.03%, 05/05/04²		131,661		131,653
1.03%, 05/21/04²		43,838		43,816
Edison Asset Securitization
1.03%, 05/06/04²		131,515		131,504
1.04%, 06/17/04²		175,354		175,126
1.05%, 06/22/04²		87,677		87,549
1.07%, 09/21/04²		87,677		87,309
Eureka Securitization Inc.
1.03%, 05/25/04²		35,071		35,049
Falcon Asset Securitization Corp.
1.03%, 05/05/04²		87,677		87,672
1.04%, 05/25/04²		131,515		131,432
1.04%, 05/26/04²		175,354		175,238
Ford Credit Auto Receivables
1.04%, 05/14/04²		43,838		43,825
Galaxy Funding Inc.
1.05%, 05/17/04²		87,677		87,641
1.07%, 07/20/04²		78,909		78,726
Gemini Securitization Corp.
1.03%, 05/24/04²		43,838		43,812
GIRO Funding US Corp.
1.05%, 05/19/04²		43,838		43,818
Grampian Funding LLC
1.26%, 10/22/04²		175,354		174,302
Jupiter Securitization Corp.
1.04%, 05/20/04²		131,515		131,451
1.04%, 05/24/04²		87,677		87,624
1.04%, 05/26/04²		120,209		120,129
1.04%, 05/27/04²		157,818		157,710


SCHEDULES OF INVESTMENTS		33

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. CONSUMER NON-CYCLICAL SECTOR INDEX FUND

April 30, 2004


Security	Principal		Value
New Center Asset Trust
1.06%, 05/03/04²	$	219,192	$	219,192
Park Avenue Receivables Corp.
1.03%, 05/07/04²		87,677		87,667
Polonius Inc.
1.04%, 05/21/04²		101,442		101,389
Preferred Receivables Funding Corp.
1.04%, 05/20/04²		43,838		43,817
Scaldis Capital LLC
1.04%, 05/07/04²		87,677		87,667
1.04%, 05/20/04²		236,998		236,881
1.04%, 05/25/04²		87,677		87,621
1.05%, 06/30/04²		62,777		62,670
Sydney Capital Corp.
1.25%, 10/22/04²		58,358		58,009
Thames Asset Global Securitization No. 1 Inc.
1.04%, 05/20/04²		87,677		87,634
Thunder Bay Funding Inc.
1.03%, 05/03/04²		63,222		63,222
Windmill Funding Corp.
1.03%, 05/05/04²		131,515		131,508
1.03%, 05/06/04²		87,677		87,669
1.03%, 05/10/04²		175,354		175,319

				4,490,587
TIME DEPOSITS – 0.99%

Abbey National Treasury Services PLC
1.25%, 01/06/05²		175,354		175,354
1.33%, 02/10/05²		87,677		87,667
1.39%, 02/02/05²		87,677		87,667
1.39%, 04/08/05²		122,748		122,731
1.40%, 10/25/04²		175,354		175,341
Bank of New York
1.39%, 11/01/04²		175,354		175,345
Bank of Novia Scotia
1.13%, 10/06/04²		175,354		175,354
1.24%, 10/07/04²		131,515		131,510
1.42%, 10/29/04²		131,515		131,520
National City Bank (Cleveland, Ohio)
1.25%, 01/06/05²		175,354		175,360
Prudential Funding LLC
1.06%, 05/03/04²		263,031		263,031
Toronto-Dominion Bank
1.04%, 06/22/04²		43,838		43,838
1.22%, 03/23/05²		306,869		306,821
1.34%, 02/10/05²		70,142		70,133
1.41%, 11/01/04²		131,515		131,509
UBS Finance (Delaware)
1.10%, 09/08/04²		175,354		174,668
1.11%, 12/17/04²		263,031		261,182
1.14%, 09/29/04²		175,354		174,530

				2,863,561
U.S. GOVERNMENT AGENCY NOTES – 0.19%

Federal Home Loan Mortgage Corp.
1.15%, 05/12/04²		131,515		131,478
1.28%, 08/19/04²		70,142		69,872
1.63%, 04/15/05²		122,748		123,120
Federal National Mortgage Association
1.28%, 08/20/04²		227,960		227,077

				551,547
REPURCHASE AGREEMENTS – 0.13%

Merrill Lynch Government Securities Inc.
1.07%, 05/03/04²		377,011		377,011

				377,011

TOTAL SHORT-TERM INVESTMENTS (Cost: $21,435,256)				21,435,256

TOTAL INVESTMENTS IN SECURITIES – 107.34% (Cost: $289,443,785)				310,824,977

Other Assets, Less Liabilities – (7.34%)				(21,255,519	)

NET ASSETS – 100.00%			$	289,569,458

Non-income earning securities.

All or a portion of this security represents investments of securities lending collateral.

Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

⁴

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

See notes to financial statements.


34		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® DOW JONES U.S. FINANCIAL SECTOR INDEX FUND

April 30, 2004


Security	Shares	Value
COMMON STOCKS – 99.81%

Citigroup Inc.	551,521	$	26,522,645
Bank of America Corp.	221,979		17,867,090
American International Group Inc.	244,590		17,524,873
Wells Fargo & Company	180,676		10,200,967
JP Morgan Chase & Co.	219,785		8,263,916
Wachovia Corp.	141,826		6,488,540
Fannie Mae	93,570		6,430,130
American Express Co.	121,539		5,949,334
Bank One Corp.	119,392		5,894,383
Morgan Stanley	105,700		5,431,923
U.S. Bancorp	205,377		5,265,866
Merrill Lynch & Co. Inc.	92,532		5,018,010
Freddie Mac	74,123		4,328,783
Washington Mutual Inc.	94,114		3,707,151
Allstate Corp. (The)	75,210		3,452,139
Goldman Sachs Group Inc. (The)	32,845		3,177,754
MBNA Corp.	120,692		2,942,471
St. Paul Travelers Companies Inc.	70,879		2,882,649
Fifth Third Bancorp	50,947		2,733,816
Prudential Financial Inc.	57,546		2,528,571
Marsh & McLennan Companies Inc.	53,685		2,421,193
Bank of New York Co. Inc. (The)	82,854		2,414,366
AFLAC Inc.	54,496		2,301,366
Lehman Brothers Holdings Inc.	29,632		2,174,989
National City Corp.	58,537		2,029,478
BB&T Corp.	58,427		2,015,147
SunTrust Banks Inc.	28,611		1,946,979
Hartford Financial Services Group Inc.	31,143		1,902,214
SLM Corp.	48,196		1,846,389
Progressive Corp. (The)	20,344		1,780,507
Countrywide Financial Corp.	29,553		1,752,493
State Street Corp.	35,731		1,743,673
Capital One Financial Corp.	25,125		1,646,441
PNC Financial Services Group	30,673		1,628,736
Golden West Financial Corp.	13,883		1,459,242
Chubb Corp.	20,107		1,387,383
Mellon Financial Corp.	46,013		1,363,825
KeyCorp	44,550		1,323,135
ACE Ltd.	29,853		1,308,756
Principal Financial Group Inc.	34,552		1,219,686
MetLife Inc.	34,147		1,178,071
Schwab (Charles) Corp. (The)	109,844		1,130,295
XL Capital Ltd. Class A	14,687		1,121,352
SouthTrust Corp.	35,347		1,098,585
Equity Office Properties Trust	42,853		1,078,610
Northern Trust Corp.	22,098		934,303
Simon Property Group Inc.	19,033		917,581
MBIA Inc.	15,429		908,614
Comerica Inc.	17,384		897,536
Lincoln National Corp.	19,111		857,702
M&T Bank Corp.	9,992		849,320
Bear Stearns Companies Inc. (The)	10,421		835,139
AmSouth Bancorp	37,594		827,820
Regions Financial Corp.	23,769		825,022
Franklin Resources Inc.	14,986		821,682
Marshall & Ilsley Corp.	22,341		821,479
Equity Residential	29,260		803,480
Charter One Financial Inc.	23,844		795,674
Ambac Financial Group Inc.	11,443		789,567
CIT Group Inc.	22,846		785,217
MGIC Investment Corp.	10,544		776,249
Loews Corp.	13,311		772,171
AON Corp.	29,553		770,151
Jefferson-Pilot Corp.	15,107		749,156
T. Rowe Price Group Inc.	13,393		686,793
New York Community Bancorp Inc.	26,267		658,514
Legg Mason Inc.	7,111		654,639
SAFECO Corp.	14,856		650,544
Cincinnati Financial Corp.	15,838		649,208
Synovus Financial Corp.	26,997		644,418
Torchmark Corp.	12,132		631,349
Sovereign Bancorp Inc.	31,422		627,812
General Growth Properties Inc.	22,788		617,783
North Fork Bancorp Inc.	16,077		596,778
Fidelity National Financial Inc.	16,006		585,820
National Commerce Financial Corp.	21,995		584,847
First Horizon National Corp.	13,300		584,668
Plum Creek Timber Co. Inc.	19,621		579,997
Union Planters Corp.	20,220		562,116
Popular Inc.	12,908		542,136
Zions Bancorporation	9,515		537,788


SCHEDULES OF INVESTMENTS		35

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. FINANCIAL SECTOR INDEX FUND

April 30, 2004


Security	Shares	Value
Vornado Realty Trust	10,611	$	535,325
Boston Properties Inc.	11,304		531,288
Banknorth Group Inc.	17,332		530,879
ProLogis	17,934		527,618
Archstone-Smith Trust	19,096		523,803
Everest Re Group Ltd.	5,892		501,881
Compass Bancshares Inc.	12,889		494,422
Huntington Bancshares Inc.	22,914		490,360
GreenPoint Financial Corp.	11,992		467,688
Radian Group Inc.	10,024		466,216
Commerce Bancorp Inc.	8,030		457,790
E*TRADE Financial Corp.¹	38,810		440,882
UNUMProvident Corp.	28,169		438,028
Kimco Realty Corp.	9,937		424,707
Old Republic International Corp.	18,007		418,123
PMI Group Inc. (The)	9,582		412,313
Rouse Co. (The)	9,484		410,657
Duke Realty Corp.	13,760		401,242
iStar Financial Inc.	10,898		387,315
Janus Capital Group Inc.	25,450		386,840
Public Storage Inc.	9,173		383,340
AvalonBay Communities Inc.	7,613		377,833
Providian Financial Corp.¹	30,683		372,185
RenaissanceRe Holdings Ltd.	7,051		371,517
Ameritrade Holding Corp.¹	30,228		369,991
Mercantile Bankshares Corp.	8,577		368,125
Hibernia Corp. Class A	16,401		357,378
TCF Financial Corp.	7,032		348,436
White Mountains Insurance Group Ltd.	663		341,445
Health Care Property Investors Inc.	13,920		332,688
PartnerRe Ltd.	5,660		324,318
Doral Financial Corp.	9,820		321,998
Berkley (W.R.) Corp.	7,767		314,564
Edwards (A.G.) Inc.	8,487		310,539
Liberty Property Trust	8,407		307,276
Commerce Bancshares Inc.	6,838		307,026
Gallagher (Arthur J.) & Co.	9,494		305,992
Independence Community Bank Corp.	8,393		305,757
Host Marriott Corp.¹	25,354		301,713
Federated Investors Inc. Class B	10,138		298,057
Associated Bancorp	7,203		294,963
Developers Diversified Realty Corp.	8,653		283,386
UnionBanCal Corp.	5,225		279,172
City National Corp.	4,508		277,918
Friedman, Billings, Ramsey Group, Inc. Class A	14,867		275,039
Investors Financial Services Corp.	7,054		274,189
People’s Bank	6,476		273,352
Valley National Bancorp	10,491		271,181
AmeriCredit Corp.¹	16,569		268,583
Markel Corp.¹	908		266,053
Astoria Financial Corp.	7,665		263,829
Fulton Financial Corp.	12,800		263,680
AMB Property Corp.	8,625		261,337
Macerich Co. (The)	6,131		256,705
Bank of Hawaii Corp.	5,820		254,450
Hospitality Properties Trust	6,499		253,981
Wilmington Trust Corp.	7,075		245,998
Protective Life Corp.	6,832		245,679
Hudson City Bancorp Inc.	7,265		245,557
Apartment Investment & Management Co. Class A	8,628		243,051
Cullen/Frost Bankers Inc.	5,549		240,272
Sky Financial Group Inc.	9,970		238,283
Mack-Cali Realty Corp.	6,309		235,641
Leucadia National Corp.	4,762		234,624
Chelsea Property Group Inc.	4,584		233,784
Eaton Vance Corp.	6,378		232,861
Colonial BancGroup Inc. (The)	13,453		231,795
United Dominion Realty Trust Inc.	12,888		231,340
New Plan Excel Realty Trust	10,261		230,257
Brown & Brown Inc.	5,869		228,950
Weingarten Realty Investors	7,845		226,799
Regency Centers Corp.	5,896		223,517
SEI Investment Co.	7,480		220,810
Webster Financial Corp.	4,978		216,543
Thornburg Mortgage Inc.	8,343		215,917
Annaly Mortgage Management Inc.	12,251		211,942
Conseco Inc.¹	10,492		207,742
Nationwide Financial Services Inc.	6,030		207,432
HCC Insurance Holdings Inc.	6,332		202,751
First American Corp.	7,448		201,990


36		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. FINANCIAL SECTOR INDEX FUND

April 30, 2004


Security	Shares	Value
Rayonier Inc.	5,173	$	201,747
Transatlantic Holdings Inc.	2,240		200,480
Waddell & Reed Financial Inc. Class A	8,862		197,002
Allmerica Financial Corp.¹	5,641		196,081
Catellus Development Corp.	9,017		194,316
Ventas Inc.	8,783		194,016
IndyMac Bancorp Inc.	6,009		193,249
Federal Realty Investment Trust	5,208		193,113
Washington Federal Inc.	8,244		192,580
Arden Realty Inc.	6,754		190,598
StanCorp Financial Group Inc.	3,066		189,693
Pan Pacific Retail Properties Inc.	4,288		188,372
Unitrin Inc.	4,672		185,245
BISYS Group Inc. (The)¹	12,756		184,962
Jefferies Group Inc.	5,333		181,855
FirstMerit Corp.	7,616		179,433
HRPT Properties Trust	18,635		177,964
CenterPoint Properties Corp.	2,459		177,294
UCBH Holdings Inc.	4,766		176,437
South Financial Group Inc. (The)	6,333		175,424
Whitney Holding Corp.	4,265		174,865
Cathay General Bancorp	2,682		174,598
American Financial Realty Trust	11,428		169,134
Hudson United Bancorp	4,722		168,717
MONY Group Inc. (The)¹	5,448		168,616
Old National Bancorp	7,033		168,089
Alliance Data Systems Corp.¹	4,834		168,078
First Midwest Bancorp Inc.	4,952		167,130
Healthcare Realty Trust Inc.	4,642		166,416
Health Care REIT Inc.	5,210		166,407
Mills Corp.	4,083		165,770
St. Joe Company (The)	4,223		165,542
Westamerica Bancorp	3,382		164,365
Chicago Mercantile Exchange Holdings Inc.	1,398		163,985
Affiliated Managers Group Inc.¹	3,355		163,388
CarrAmerica Realty Corp.	5,703		162,593
Camden Property Trust	3,818		161,578
CBL & Associates Properties Inc.	3,199		160,750
Raymond James Financial Inc.	6,396		160,668
Shurgard Storage Centers Inc. Class A	4,787		159,407
BRE Properties Inc. Class A	5,006		158,690
Greater Bay Bancorp	5,589		158,560
AmerUs Group Co.	4,104		158,414
New Century Financial Corp.	3,693		156,694
BancorpSouth Inc.	7,722		156,216
SL Green Realty Corp.	3,824		156,019
Realty Income Corp.	4,009		153,344
CapitalSource Inc.¹	7,256		152,811
Crescent Real Estate Equities Co.	9,831		152,086
Montpelier Re Holdings Ltd	4,392		150,206
Fremont General Corp.	6,910		148,910
Reckson Associates Realty Corp.	6,237		148,253
Trustmark Corp.	5,550		147,741
First Bancorp	4,003		147,551
East West Bancorp Inc.	2,612		147,134
IPC Holdings Ltd.	3,954		145,507
W Holding Co. Inc.	8,496		144,772
Mercury General Corp.	2,822		143,894
Erie Indemnity Co. Class A	3,094		143,005
Commerce Group Inc.	3,064		141,404
Trizec Properties Inc.	9,784		140,107
First Industrial Realty Trust Inc.	4,142		139,378
Southwest Bancorp of Texas Inc.	3,426		139,335
American National Insurance Co.	1,476		139,083
Park National Corp.	1,182		136,462
MAF Bancorp Inc.	3,339		136,398
Pennsylvania Real Estate Investment Trust	4,183		135,320
Knight Trading Group Inc.¹	11,642		135,280
Essex Property Trust Inc.	2,207		134,517
United Bancshares Inc.	4,334		130,063
Provident Financial Group Inc.	3,297		129,836
Silicon Valley Bancshares¹	3,770		129,537
Highwoods Properties Inc.	5,653		127,475
American Financial Group Inc.	4,127		126,699
Pacific Capital Bancorp	3,439		126,143
Community First Bankshares Inc.	3,891		125,212
Impac Mortgage Holdings Inc.	6,645		124,992
Nationwide Health Properties Inc.	6,841		124,027
Prentiss Properties Trust	3,871		124,027
Home Properties Inc.	3,267		121,990


SCHEDULES OF INVESTMENTS		37

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. FINANCIAL SECTOR INDEX FUND

April 30, 2004


Security	Shares	Value
Texas Regional Bancshares Inc. Class A	2,885	$	121,805
Washington Real Estate Investment Trust	4,460		121,312
Phoenix Companies Inc.	9,429		119,465
Cousins Properties Inc.	4,239		119,201
Alexandria Real Estate Equities Inc.	2,094		118,981
Citizens Banking Corp.	3,880		118,844
Chittenden Corp.	3,897		118,547
Commercial Federal Corp.	4,609		118,267
Hilb, Rogal & Hobbs Co.	3,266		117,086
Delphi Financial Group Inc. Class A	2,915		117,066
Ohio Casualty Corp.¹	5,946		116,661
Philadelphia Consolidated Holding Corp.¹	2,016		116,404
Provident Financial Services Inc.	6,326		113,868
Post Properties Inc.	4,085		109,846
Brandywine Realty Trust	4,244		107,543
LNR Property Corp.	2,137		107,320
Taubman Centers Inc.	5,427		105,827
Reinsurance Group of America Inc.	2,724		105,746
First Niagara Financial Group Inc.	8,381		105,601
Downey Financial Corp.	2,179		105,137
Selective Insurance Group Inc.	2,815		100,664
Gables Residential Trust	3,152		100,234
Piper Jaffray Companies Inc.¹	2,065		99,987
TrustCo Bank Corp. NY	7,825		98,673
Susquehanna Bancshares Inc.	4,196		98,186
FNB Corp. (Florida)	4,901		96,060
Capital Automotive	3,410		95,923
Platinum Underwriters Holdings Ltd.	2,963		94,757
Kilroy Realty Corp.	2,989		93,705
First National Bankshares of Florida	4,901		90,227
Redwood Trust Inc.	2,051		89,116
Republic Bancorp Inc.	6,801		88,481
Total System Services Inc.	3,958		87,868
Novastar Financial Inc.	2,682		87,058
CAN Financial Corp.¹	3,129		85,766
Colonial Properties Trust	2,313		81,603
Provident Bankshares Corp.	2,703		76,144
AMCORE Financial Inc.	2,528		71,644
Investment Technology Group Inc.¹	4,968		71,191
FirstFed Financial Corp.¹	1,720		69,522
Horace Mann Educators Corp.	4,423		69,043
Manufactured Home Communities Inc.	2,177		68,140
Harbor Florida Bancshares Inc.	2,415		66,944
Glenborough Realty Trust Inc.	3,450		64,825
Koger Equity Inc.	2,970		62,221
Dime Community Bancshares	3,637		62,193
Sterling Bancshares Inc.	4,767		60,589
First Sentinel Bancorp Inc.	2,879		59,307
Anchor BanCorp Wisconsin Inc.	2,222		53,950
NetBank Inc.	4,933		53,227
PFF Bancorp Inc.	1,418		53,104
FelCor Lodging Trust Inc.¹	5,192		51,920
W.P. Stewart & Co. Ltd.	2,491		49,994
BSB Bancorp Inc.	1,062		39,825
Presidential Life Corp.	2,436		39,195
Equity Inns Inc.	4,666		38,261
Meristar Hospitality Corp.¹	6,268		36,354
Safeguard Scientifics Inc.¹	12,906		33,556
LaBranche & Co. Inc.	3,134		30,619
SWS Group Inc.	1,455		23,629
OceanFirst Financial Corp.	1,015		22,178
Bay View Capital Corp.	6,543		14,198

TOTAL COMMON STOCKS (COST: $234,655,538)			257,597,560

SHORT-TERM INVESTMENTS – 7.16%

MONEY MARKET FUNDS – 2.64%

Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^2,3	4,680,226		4,680,226
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^2,3	1,642,772		1,642,772
BlackRock Temp Cash Money Market Fund²	75,774		75,774


38		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. FINANCIAL SECTOR INDEX FUND

April 30, 2004


Security	Shares or Principal		Value
Short-Term Investment Co. – Prime Money Market Portfolio, Institutional Shares²		424,569	$	424,569

				6,823,341
FLOATING RATE NOTES – 1.78%

Beta Finance Inc.
1.06%, 05/20/04^2,4	$	74,671		74,671
1.06%, 09/15/04^2,4		149,343		149,334
1.06%, 10/12/04^2,4		74,671		74,668
1.14%, 03/15/05^2,4		74,671		74,723
1.15%, 08/23/04^2,4		74,671		74,691
Canadian Imperial Bank of Commerce
1.24%, 10/07/04²		112,007		112,000
1.38%, 11/22/04²		37,336		37,337
1.40%, 10/29/04²		149,343		149,342
CC USA Inc.
1.06%, 05/24/04^2,4		149,343		149,342
1.07%, 07/16/04²		37,336		37,254
1.10%, 07/15/04^2,4		74,671		74,677
1.29%, 04/15/05^2,4		149,343		149,329
1.51%, 02/15/05^2,4		97,073		97,194
Dorada Finance Inc.
1.04%, 07/01/04²		52,270		52,181
1.06%, 05/20/04^2,4		149,343		149,342
1.24%, 08/09/04²		37,336		37,334
1.48%, 01/18/05^2,4		112,007		112,003
Five Finance Inc.
1.05%, 04/29/05^2,4		119,474		119,463
HBOS Treasury Services PLC
1.10%, 04/22/05²		149,343		149,343
1.24%, 04/01/05²		95,579		95,571
K2 USA LLC
1.06%, 08/16/04^2,4		37,336		37,334
1.06%, 09/27/04^2,4		161,290		161,281
1.07%, 05/17/04²		74,671		74,671
1.46%, 01/12/05^2,4		74,671		74,666
Links Finance LLC
1.05%, 04/15/05^2,4		149,343		149,315
1.06%, 05/04/04²		74,671		74,671
1.06%, 06/28/04²		74,671		74,669
1.09%, 07/20/04²		59,737		59,735
1.19%, 04/25/05²		149,343		149,438

Security	Principal		Value
Nationwide Building Society
1.11%, 04/28/05^2,4	$	149,343	$	149,343
1.14%, 07/23/04^2,4		112,007		112,007
Northern Rock PLC
1.11%, 01/13/05^2,4		141,876		141,876
Permanent Financing PLC
1.05%, 03/10/05²		149,343		149,343
1.06%, 12/10/04²		74,671		74,671
Sigma Finance Inc.
1.05%, 07/01/04²		74,671		74,668
1.08%, 10/07/04²		149,343		149,330
1.09%, 07/20/04²		74,671		74,668
1.24%, 08/06/04²		37,336		37,335
Tango Finance Corp.
1.06%, 07/06/04^2,4		44,803		44,802
1.06%, 01/18/05^2,4		65,711		65,706
1.06%, 04/07/05^2,4		54,809		54,804
1.07%, 02/25/05^2,4		83,632		83,618
1.08%, 07/15/04^2,4		44,803		44,800
WhistleJacket Capital LLC
1.06%, 09/15/04^2,4		74,671		74,666
1.26%, 10/20/04^2,4		36,992		36,772
1.32%, 02/04/05^2,4		37,336		37,330
White Pine Finance LLC
1.05%, 07/06/04²		89,606		89,604
1.05%, 04/15/05^2,4		112,007		111,986
1.06%, 08/26/04^2,4		74,671		74,668
1.06%, 11/15/04^2,4		89,606		89,606

				4,597,182
COMMERCIAL PAPER – 1.48%

Alpine Securitization Corp.
1.04%, 05/20/04²		74,671		74,635
Amsterdam Funding Corp.
1.03%, 05/05/04²		60,484		60,480
1.04%, 05/21/04²		89,606		89,559
Barton Capital Corp.
1.03%, 05/03/04²		37,372		37,372
1.03%, 05/06/04²		37,336		37,333
Blue Ridge Asset Funding Corp.
1.03%, 05/21/04²		74,671		74,634
Cantabric Finance LLC
1.09%, 07/22/04²		112,007		111,736


SCHEDULES OF INVESTMENTS		39

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. FINANCIAL SECTOR INDEX FUND

April 30, 2004


Security	Principal		Value
Corporate Asset Funding
1.05%, 05/21/04²	$	77,658	$	77,618
CRC Funding LLC
1.04%, 06/03/04²		149,343		149,209
1.10%, 07/07/04²		58,244		58,128
Delaware Funding Corp.
1.03%, 05/05/04²		112,131		112,125
1.03%, 05/21/04²		37,336		37,317
Edison Asset Securitization
1.03%, 05/06/04²		112,007		111,998
1.04%, 06/17/04²		149,343		149,149
1.05%, 06/22/04²		74,671		74,563
1.07%, 09/21/04²		74,671		74,359
Eureka Securitization Inc.
1.03%, 05/25/04²		29,869		29,850
Falcon Asset Securitization Corp.
1.03%, 05/05/04²		74,671		74,667
1.04%, 05/25/04²		112,007		111,936
1.04%, 05/26/04²		149,343		149,244
Ford Credit Auto Receivables
1.04%, 05/14/04²		37,336		37,324
Galaxy Funding Inc.
1.05%, 05/17/04²		74,671		74,641
1.07%, 07/20/04²		67,204		67,049
Gemini Securitization Corp.
1.03%, 05/24/04²		37,336		37,314
GIRO Funding US Corp.
1.05%, 05/19/04²		37,336		37,319
Grampian Funding LLC
1.26%, 10/22/04²		149,343		148,447
Jupiter Securitization Corp.
1.04%, 05/20/04²		112,007		111,952
1.04%, 05/24/04²		74,671		74,626
1.04%, 05/26/04²		102,378		102,310
1.04%, 05/27/04²		134,409		134,316
New Center Asset Trust
1.06%, 05/03/04²		186,679		186,679
Park Avenue Receivables Corp.
1.03%, 05/07/04²		74,671		74,663
Polonius Inc.
1.04%, 05/21/04²		86,395		86,350
Preferred Receivables Funding Corp.
1.04%, 05/20/04²		37,336		37,317
Scaldis Capital LLC
1.04%, 05/07/04²		74,671		74,663
1.04%, 05/20/04²		201,843		201,744
1.04%, 05/25/04²		74,671		74,624
1.05%, 06/30/04²		53,465		53,374
Sydney Capital Corp.
1.25%, 10/22/04²		49,701		49,405
Thames Asset Global Securitization No. 1 Inc.
1.04%, 05/20/04²		74,671		74,635
Thunder Bay Funding Inc.
1.03%, 05/03/04²		53,844		53,844
Windmill Funding Corp.
1.03%, 05/05/04²		112,007		112,001
1.03%, 05/06/04²		74,671		74,665
1.03%, 05/10/04²		149,343		149,313

				3,824,487
TIME DEPOSITS – 0.95%

Abbey National Treasury Services PLC
1.25%, 01/06/05²		149,343		149,343
1.33%, 02/10/05²		74,671		74,663
1.39%, 02/02/05²		74,671		74,663
1.39%, 04/08/05²		104,540		104,525
1.40%, 10/25/04²		149,343		149,332
Bank of New York
1.39%, 11/01/04²		149,343		149,335
Bank of Novia Scotia
1.13%, 10/06/04²		149,343		149,343
1.24%, 10/07/04²		112,007		112,002
1.42%, 10/29/04²		112,007		112,011
National City Bank (Cleveland, Ohio)
1.25%, 01/06/05²		149,343		149,348
Prudential Funding LLC
1.06%, 05/03/04²		224,014		224,014
Toronto-Dominion Bank
1.04%, 06/22/04²		37,336		37,336
1.22%, 03/23/05²		261,350		261,309
1.34%, 02/10/05²		59,737		59,730
1.41%, 11/01/04²		112,007		112,002


40		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. FINANCIAL SECTOR INDEX FUND

April 30, 2004


Security	Principal		Value

UBS Finance (Delaware)
1.10%, 09/08/04²	$	149,343	$	148,759
1.11%, 12/17/04²		224,014		222,440
1.14%, 09/29/04²		149,343		148,641

				2,438,796
U.S. GOVERNMENT AGENCY NOTES – 0.18%

Federal Home Loan Mortgage Corp.
1.15%, 05/12/04²		112,007		111,975
1.28%, 08/19/04²		59,737		59,508
1.63%, 04/15/05²		104,540		104,857
Federal National Mortgage Association
1.28%, 08/20/04²		194,146		193,393

				469,733
REPURCHASE AGREEMENTS - 0.13%

Merrill Lynch Government Securities Inc.
1.07%, 05/03/04²		321,087		321,087

				321,087

TOTAL SHORT-TERM INVESTMENTS (Cost: $18,474,626)				18,474,626

TOTAL INVESTMENTS IN SECURITIES – 106.97% (Cost: $253,130,164)				276,072,186

Other Assets, Less Liabilities – (6.97%)				(17,991,469	)

NET ASSETS – 100.00%			$	258,080,717

Non-income earning securities.

All or a portion of this security represents investments of securities lending collateral.

Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

⁴

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

see notes to financial statements.


SCHEDULES OF INVESTMENTS		41

Schedule of Investments

iSHARES^® DOW JONES U.S. INDUSTRIAL SECTOR INDEX FUND

April 30, 2004


Security	Shares	Value
COMMON STOCKS – 100.00%

General Electric Co.	1,170,664	$	35,061,387
3M Co.	84,835		7,336,531
Tyco International Ltd.	236,876		6,502,246
United Technologies Corp.	61,018		5,263,413
First Data Corp.	107,977		4,901,076
Boeing Co. (The)	89,233		3,809,357
United Parcel Service Inc. Class B	53,472		3,751,061
Honeywell International Inc.	99,443		3,438,739
Caterpillar Inc.	42,934		3,337,260
Automatic Data Processing Inc.	74,869		3,280,011
Emerson Electric Co.	53,505		3,222,071
Illinois Tool Works Inc.	34,177		2,946,399
FedEx Corp.	33,363		2,399,133
Waste Management Inc.	75,649		2,148,432
Lockheed Martin Corp.	44,126		2,104,810
General Dynamics Corp.	22,352		2,092,594
Deere & Co.	28,521		1,940,569
Northrop Grumman Corp.	19,237		1,909,272
Union Pacific Corp.	29,819		1,757,234
Masco Corp.	58,621		1,641,974
Burlington Northern Santa Fe Corp.	47,390		1,549,653
Raytheon Co.	47,596		1,535,447
Paychex Inc.	40,427		1,507,119
Agilent Technologies Inc.¹	50,964		1,376,538
Ingersoll-Rand Co. Class A	20,152		1,300,812
Danaher Corp.	13,343		1,234,494
Norfolk Southern Corp.	46,037		1,096,601
PACCAR Inc.	19,231		1,085,782
Moody’s Corp.	15,738		1,015,258
Eaton Corp.	16,658		989,152
Dover Corp.	24,487		980,215
Textron Inc.	16,908		932,983
ITT Industries Inc.	10,840		859,504
Fiserv Inc.¹	22,881		836,529
CSX Corp.	25,627		788,287
Parker Hannifin Corp.	14,037		776,106
American Standard Companies Inc.¹	7,162		753,371
Rockwell Automation Inc.	21,832		713,688
Waters Corp.¹	15,663		675,859
Cintas Corp.	14,829		666,712
L-3 Communications Holdings Inc.	10,647		657,346
Sanmina-SCI Corp.¹	62,867		629,927
Cooper Industries Ltd.	11,162		612,905
Thermo Electron Corp.¹	20,661		603,301
Sherwin-Williams Co. (The)	15,618		594,265
Republic Services Inc.	19,833		571,587
Robert Half International Inc.¹	20,931		570,788
Accenture Ltd.¹	21,966		522,132
Jabil Circuit Inc.¹	19,354		510,752
Vulcan Materials Co.	10,873		502,768
Expeditors International Washington Inc.	12,427		499,441
Sealed Air Corp.¹	10,016		491,585
Solectron Corp.¹	98,856		484,394
Grainger (W.W.) Inc.	9,046		474,010
Iron Mountain Inc.¹	9,957		453,143
Ball Corp.	6,839		451,374
ChoicePoint Inc.¹	10,062		441,923
SPX Corp.	9,878		438,089
Pactiv Corp.¹	18,973		435,430
Dun & Bradstreet Corp.¹	8,185		427,666
Equifax Inc.	17,410		426,719
Manpower Inc.	9,087		426,180
Sabre Holdings Corp.	17,368		409,711
Donnelley (R.R.) & Sons Co.	13,531		398,082
Diebold Inc.	8,634		397,941
American Power Conversion Corp.	21,236		396,264
CH Robinson Worldwide Inc.	9,377		384,832
DST Systems Inc.¹	8,638		381,368
Ceridian Corp.¹	17,544		375,091
Temple-Inland Inc.	5,995		370,311
Fluor Corp.	9,568		365,115
Smurfit-Stone Container Corp.	20,532		352,945
Pall Corp.	14,807		352,111
Pentair Inc.	5,863		349,376
Bemis Co.	12,738		344,053
Symbol Technologies Inc.	27,363		328,356
Tektronix Inc.	11,042		326,843
Navistar International Corp.¹	7,156		323,093
Goodrich (B.F.) Co.	11,044		317,957
Deluxe Corp.	7,653		316,145


42		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. INDUSTRIAL SECTOR INDEX FUND

April 30, 2004


Security	Shares	Value
ALLETE Inc.	8,982	$	310,328
Avnet Inc.¹	14,309		309,647
Millipore Corp.¹	5,837		306,034
Allied Waste Industries Inc.¹	24,306		306,013
Vishay Intertechnology Inc.¹	17,343		301,768
Arrow Electronics Inc.¹	11,905		300,958
Convergys Corp.¹	20,406		296,295
PerkinElmer Inc.	15,352		295,526
Sonoco Products Co.	11,429		284,125
Packaging Corporation of America	12,620		277,388
Getty Images Inc.¹	5,072		276,931
Certegy Inc.	7,722		276,293
Alliant Techsystems Inc.¹	4,609		273,268
Precision Castparts Corp.	5,916		266,279
Hubbell Inc. Class B	5,908		265,506
Viad Corp.	10,608		264,776
Donaldson Co. Inc.	9,614		263,712
Monster Worldwide Inc.¹	10,020		256,612
Ryder System Inc.	6,952		255,764
Martin Marietta Materials Inc.	5,857		253,315
Owens-Illinois Inc.¹	17,604		245,752
Acxiom Corp.	10,452		241,859
CheckFree Corp.¹	8,005		240,470
Cummins Inc.	4,018		240,317
Jacobs Engineering Group Inc.¹	5,716		238,414
Corporate Executive Board Co. (The)	4,497		232,270
Graco Inc.	8,205		231,381
Molex Inc. Class A	8,780		226,173
Tech Data Corp.¹	6,360		216,240
CNF Inc.	5,861		214,278
Harsco Corp.	4,822		209,902
AMETEK Inc.	7,800		206,700
Stericycle Inc.¹	4,286		204,957
Carlisle Companies Inc.	3,328		197,184
Molex Inc.	6,555		195,208
Titan Corp. (The)¹	10,156		194,995
Crane Co.	6,318		194,658
Fair Isaac Corp.	5,673		191,294
Teleflex Inc.	4,149		189,402
York International Corp.	4,752		186,278
Brink’s Co. (The)	6,562		181,964
National Instruments Corp.	5,943		181,618
Roper Industries Inc.	3,694		179,344
Terex Corp.¹	5,398		177,324
Briggs & Stratton Corp.	2,526		176,820
Garmin Ltd.	5,470		175,915
AGCO Corp.¹	9,022		173,674
Hunt (J.B.) Transport Services Inc.¹	5,356		169,571
Landstar System Inc.¹	3,768		169,409
Thomas & Betts Corp.	7,020		168,761
Copart Inc.¹	8,765		166,184
Yellow Roadway Corp.¹	4,869		165,790
AptarGroup Inc.	4,169		163,842
Trinity Industries Inc.	5,322		161,203
Varian Inc.¹	3,911		160,507
Integrated Circuit Systems Inc.¹	6,770		160,381
Kennametal Inc.	3,646		157,361
Lafarge North America Inc.	3,435		151,999
United Stationers Inc.¹	3,971		150,898
Global Payments Inc.	3,131		150,225
Cognex Corp.	4,670		148,413
Alexander & Baldwin Inc.	4,604		145,440
Hughes Supply Inc.	2,600		145,314
Ingram Micro Inc. Class A¹	12,100		144,595
Flowserve Corp.¹	6,641		141,918
Timken Co. (The)	6,373		140,588
Werner Enterprises Inc.	6,923		138,391
Dycom Industries Inc.¹	5,841		137,731
Mueller Industries Inc.	3,966		133,059
KEMET Corp.¹	10,590		131,104
MSC Industrial Direct Co. Inc. Class A	4,549		130,374
Dionex Corp.¹	2,533		129,259
Crown Holdings Inc.¹	15,286		129,014
MPS Group Inc.¹	11,777		128,840
Arbitron Inc.¹	3,439		128,103
Banta Corp.	2,870		127,658
Acuity Brands Inc.	5,124		125,384
Swift Transportation Co. Inc.¹	7,202		121,858
Waste Connections Inc.¹	2,936		118,233
Benchmark Electronics Inc.¹	4,275		115,553
Nordson Corp.	3,132		108,242
Tetra Tech Inc.¹	6,374		105,872


SCHEDULES OF INVESTMENTS		43

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. INDUSTRIAL SECTOR INDEX FUND

April 30, 2004


Security	Shares	Value
USF Corp.	3,180	$	105,735
CSG Systems International Inc.¹	6,122		102,788
Littelfuse Inc.¹	2,653		101,875
Kaydon Corp.	3,520		98,454
GATX Corp.	4,150		97,525
Technitrol Inc.¹	4,491		95,524
Overseas Shipholding Group Inc.	2,913		95,459
Kansas City Southern Industries Inc.¹	6,825		94,526
NDCHealth Corp.	4,106		93,904
Albany International Corp. Class A	3,065		93,483
eFunds Corp.¹	5,772		92,698
AVX Corp.	6,487		92,051
Aeroflex Inc.¹	7,271		91,469
Manitowoc Co. Inc. (The)	2,870		87,277
G&K Services Inc. Class A	2,268		85,957
EGL Inc.¹	4,492		83,282
Coherent Inc.¹	3,328		81,370
Texas Industries Inc.	2,410		81,241
Monaco Coach Corp.	3,114		81,182
Granite Construction Inc.	4,036		80,115
Jacuzzi Brands Inc.¹	9,104		79,569
Orbotech Ltd.¹	3,718		78,524
Plexus Corp.¹	5,143		73,956
FuelCell Energy Inc.¹	4,482		73,863
EMCOR Group Inc.¹	1,744		71,330
Newport Corp.¹	4,611		68,427
Electro Scientific Industries Inc.¹	3,263		66,696
Veeco Instruments Inc.¹	2,924		66,521
Power-One Inc.¹	7,607		65,420
Spherion Corp.¹	6,488		63,907
NCO Group Inc.¹	2,798		63,515
Photon Dynamics Inc.¹	2,027		62,837
Bowne & Co. Inc.	3,711		62,827
Esterline Technologies Corp.¹	2,462		60,935
Checkpoint Systems Inc.¹	3,758		60,391
GrafTech International Ltd.¹	6,769		60,041
Regal-Beloit Corp.	2,923		58,489
Shaw Group Inc. (The)¹	4,673		56,076
Helix Technology Corp.	3,116		54,842
CTS Corp.	3,964		51,730
Stewart & Stevenson Services Inc.	3,172		50,689
Insituform Technologies Inc. Class A¹	3,044		49,435
Navigant Consulting Co.¹	2,788		48,874
C&D Technologies Inc.	3,133		48,562
Wabash National Corp.¹	1,880		47,771
Park Electrochemical Corp.	2,024		47,706
ElkCorp	1,703		47,207
Agilysys Inc.	3,763		44,140
Arkansas Best Corp.	1,678		43,611
Artesyn Technologies Inc.¹	4,673		43,038
Ionics Inc.¹	1,832		42,264
SCS Transportation Inc.¹	1,700		38,896
Methode Electronics Inc.	3,303		37,456
Quanta Services Inc.¹	6,293		34,423
FreeMarkets Inc.¹	4,746		32,985
Forrester Research Inc.¹	1,812		31,420
Anaren Inc.¹	2,067		30,488
TeleTech Holdings Inc.¹	4,758		29,071
Hudson Highland Group Inc.¹	761		23,279
PRG-Schultz International Inc.¹	4,872		22,898
AAR Corp.¹	2,134		21,660
Presstek Inc.¹	1,938		20,640
MedQuist Inc.¹	1,366		18,591

TOTAL COMMON STOCKS (Cost: $161,217,516)			157,379,916

SHORT-TERM INVESTMENTS – 8.47%

MONEY MARKET FUNDS – 3.07%

Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^2,3	3,265,787		3,265,787
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^2,3	1,199,418		1,199,418
BlackRock Temp Cash Money Market Fund²	55,324		55,324
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares²	309,987		309,987

			4,830,516


44		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. INDUSTRIAL SECTOR INDEX FUND

April 30, 2004


Security	Principal		Value

FLOATING RATE NOTES – 2.13%

Beta Finance Inc.
1.06%, 05/20/04^2,4	$	54,519	$	54,519
1.06%, 09/15/04^2,4		109,038		109,034
1.06%, 10/12/04^2,4		54,519		54,517
1.14%, 03/15/05^2,4		54,519		54,557
1.15%, 08/23/04^2,4		54,519		54,533
Canadian Imperial Bank of Commerce
1.24%, 10/07/04²		81,779		81,774
1.38%, 11/22/04²		27,260		27,261
1.40%, 10/29/04²		109,038		109,037
CC USA Inc.
1.06%, 05/24/04^2,4		109,038		109,038
1.07%, 07/16/04²		27,260		27,200
1.10%, 07/15/04^2,4		54,519		54,524
1.29%, 04/15/05^2,4		109,038		109,028
1.51%, 02/15/05^2,4		70,875		70,963
Dorada Finance Inc.
1.04%, 07/01/04²		38,163		38,098
1.06%, 05/20/04^2,4		109,038		109,038
1.24%, 08/09/04²		27,260		27,258
1.48%, 01/18/05^2,4		81,779		81,776
Five Finance Inc.
1.05%, 04/29/05^2,4		87,231		87,222
HBOS Treasury Services PLC
1.10%, 04/22/05²		109,038		109,038
1.24%, 04/01/05²		69,785		69,778
K2 USA LLC
1.06%, 08/16/04^2,4		27,260		27,258
1.06%, 09/27/04^2,4		117,761		117,754
1.07%, 05/17/04²		54,519		54,519
1.46%, 01/12/05^2,4		54,519		54,515
Links Finance LLC
1.05%, 04/15/05^2,⁴		109,038		109,018
1.06%, 05/04/04²		54,519		54,519
1.06%, 06/28/04²		54,519		54,518
1.09%, 07/20/04²		43,615		43,613
1.19%, 04/25/05²		109,038		109,108
Nationwide Building Society
1.11%, 04/28/05^2,4		109,038		109,038
1.14%, 07/23/04^2,4		81,779		81,779
Northern Rock PLC
1.11%, 01/13/05^2,4		103,586		103,586
Permanent Financing PLC
1.05%, 03/10/05²		109,038		109,038
1.06%, 12/10/04²		54,519		54,519
Sigma Finance Inc.
1.05%, 07/01/04²		54,519		54,517
1.08%, 10/07/04²		109,038		109,029
1.09%, 07/20/04²		54,519		54,517
1.24%, 08/06/04²		27,260		27,259
Tango Finance Corp.
1.06%, 07/06/04^2,4		32,712		32,711
1.06%, 01/18/05^2,4		47,977		47,973
1.06%, 04/07/05^2,4		40,017		40,013
1.07%, 02/25/05^2,4		61,061		61,052
1.08%, 07/15/04^2,4		32,712		32,709
WhistleJacket Capital LLC
1.06%, 09/15/04^2,4		54,519		54,515
1.26%, 10/20/04^2,4		27,009		26,849
1.32%, 02/04/05^2,4		27,260		27,255
White Pine Finance LLC
1.05%, 07/06/04²		65,423		65,422
1.05%, 04/15/05^2,4		81,779		81,763
1.06%, 08/26/04^2,4		54,519		54,517
1.06%, 11/15/04^2,4		65,423		65,423

				3,356,499
COMMERCIAL PAPER – 1.77%

Alpine Securitization Corp.
1.04%, 05/20/04²		54,519		54,492
Amsterdam Funding Corp.
1.03%, 05/05/04²		44,161		44,158
1.04%, 05/21/04²		65,423		65,389
Barton Capital Corp.
1.03%, 05/03/04²		27,286		27,286
1.03%, 05/06/04²		27,260		27,257
Blue Ridge Asset Funding Corp.
1.03%, 05/21/04²		54,519		54,491
Cantabric Finance LLC
1.09%, 07/22/04²		81,779		81,581
Corporate Asset Funding
1.05%, 05/21/04²		56,700		56,670


SCHEDULES OF INVESTMENTS		45

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. INDUSTRIAL SECTOR INDEX FUND

April 30, 2004


Security	Principal		Value
CRC Funding LLC
1.04%, 06/03/04²	$	109,038	$	108,941
1.10%, 07/07/04²		42,525		42,441
Delaware Funding Corp.
1.03%, 05/05/04²		81,869		81,865
1.03%, 05/21/04²		27,260		27,246
Edison Asset Securitization
1.03%, 05/06/04²		81,779		81,772
1.04%, 06/17/04²		109,038		108,897
1.05%, 06/22/04²		54,519		54,440
1.07%, 09/21/04²		54,519		54,291
Eureka Securitization Inc.
1.03%, 05/25/04²		21,808		21,794
Falcon Asset Securitization Corp.
1.03%, 05/05/04²		54,519		54,516
1.04%, 05/25/04²		81,779		81,727
1.04%, 05/26/04²		109,038		108,966
Ford Credit Auto Receivables
1.04%, 05/14/04²		27,260		27,251
Galaxy Funding Inc.
1.05%, 05/17/04²		54,519		54,497
1.07%, 07/20/04²		49,067		48,954
Gemini Securitization Corp.
1.03%, 05/24/04²		27,260		27,243
GIRO Funding US Corp.
1.05%, 05/19/04²		27,260		27,247
Grampian Funding LLC
1.26%, 10/22/04²		109,038		108,385
Jupiter Securitization Corp.
1.04%, 05/20/04²		81,779		81,739
1.04%, 05/24/04²		54,519		54,486
1.04%, 05/26/04²		74,748		74,699
1.04%, 05/27/04²		98,135		98,067
New Center Asset Trust
1.06%, 05/03/04²		136,298		136,298
Park Avenue Receivables Corp.
1.03%, 05/07/04²		54,519		54,513
Polonius Inc.
1.04%, 05/21/04²		63,079		63,046
Preferred Receivables Funding Corp.
1.04%, 05/20/04²		27,260		27,246
Scaldis Capital LLC
1.04%, 05/07/04²		54,519		54,513
1.04%, 05/20/04²		147,370		147,297
1.04%, 05/25/04²		54,519		54,485
1.05%, 06/30/04²		39,036		38,970
Sydney Capital Corp.
1.25%, 10/22/04²		36,288		36,071
Thames Asset Global Securitization No. 1 Inc.
1.04%, 05/20/04²		54,519		54,492
Thunder Bay Funding Inc.
1.03%, 05/03/04²		39,313		39,313
Windmill Funding Corp.
1.03%, 05/05/04²		81,779		81,774
1.03%, 05/06/04²		54,519		54,515
1.03%, 05/10/04²		109,038		109,017

				2,792,338
TIME DEPOSITS – 1.13%

Abbey National Treasury Services PLC
1.25%, 01/06/05²		109,038		109,038
1.33%, 02/10/05²		54,519		54,513
1.39%, 02/02/05²		54,519		54,513
1.39%, 04/08/05²		76,327		76,316
1.40%, 10/25/04²		109,038		109,031
Bank of New York
1.39%, 11/01/04²		109,038		109,033
Bank of Novia Scotia
1.13%, 10/06/04²		109,038		109,038
1.24%, 10/07/04²		81,779		81,775
1.42%, 10/29/04²		81,779		81,782
National City Bank (Cleveland, Ohio)
1.25%, 01/06/05²		109,038		109,042
Prudential Funding LLC
1.06%, 05/03/04²		163,558		163,558
Toronto-Dominion Bank
1.04%, 06/22/04²		27,260		27,260
1.22%, 03/23/05²		190,817		190,788
1.34%, 02/10/05²		43,615		43,610
1.41%, 11/01/04²		81,779		81,775


46		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. INDUSTRIAL SECTOR INDEX FUND

April 30, 2004


Security	Principal		Value
UBS Finance (Delaware)
1.10%, 09/08/04²	$	109,038	$	108,612
1.11%, 12/17/04²		163,558		162,408
1.14%, 09/29/04²		109,038		108,526

				1,780,618
U.S. GOVERNMENT AGENCY NOTES – 0.22%

Federal Home Loan Mortgage Corp.
1.15%, 05/12/04²		81,779		81,755
1.28%, 08/19/04²		43,615		43,448
1.63%, 04/15/05²		76,327		76,558
Federal National Mortgage Association
1.28%, 08/20/04²		141,750		141,201

				342,962
REPURCHASE AGREEMENTS – 0.15%

Merrill Lynch Government Securities Inc.
1.07%, 05/03/04²		234,433		234,433

				234,433

TOTAL SHORT-TERM INVESTMENTS (Cost: $13,337,366)				13,337,366


TOTAL INVESTMENTS IN SECURITIES – 108.47% (Cost: $174,554,882)				170,717,282

Other Assets, Less Liabilities – (8.47%)				(13,333,110	)

NET ASSETS – 100.00%			$	157,384,172

Non-income earning securities.

All or a portion of this security represents investments of securities lending collateral.

Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

⁴

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		47

Schedule of Investments

iSHARES^® DOW JONES U.S. FINANCIAL SERVICES INDEX FUND

April 30, 2004


Security	Shares	Value
COMMON STOCKS – 99.80%

Citigroup Inc.	335,890	$	16,152,950
Bank of America Corp.	135,189		10,881,363
Wells Fargo & Company	110,031		6,212,350
JP Morgan Chase & Co.	133,846		5,032,610
Wachovia Corp.	86,298		3,948,134
Fannie Mae	56,935		3,912,573
American Express Co.	73,953		3,619,999
Bank One Corp.	72,647		3,586,582
Morgan Stanley	64,316		3,305,199
U.S. Bancorp	124,964		3,204,077
Merrill Lynch & Co. Inc.	56,302		3,053,257
Freddie Mac	45,100		2,633,840
Washington Mutual Inc.	57,260		2,255,471
Goldman Sachs Group Inc. (The)	19,984		1,933,452
MBNA Corp.	73,426		1,790,126
Fifth Third Bancorp	30,996		1,663,245
Bank of New York Co. Inc. (The)	50,406		1,468,831
Lehman Brothers Holdings Inc.	18,041		1,324,209
National City Corp.	35,638		1,235,569
BB&T Corp.	35,571		1,226,844
SunTrust Banks Inc.	17,418		1,185,295
SLM Corp.	29,341		1,124,054
Countrywide Financial Corp.	17,991		1,066,866
State Street Corp.	21,752		1,061,498
Capital One Financial Corp.	15,295		1,002,281
PNC Financial Services Group	18,672		991,483
Golden West Financial Corp.	8,451		888,285
Mellon Financial Corp.	28,009		830,187
KeyCorp	27,117		805,375
Principal Financial Group Inc.	21,030		742,359
Schwab (Charles) Corp. (The)	67,225		691,745
SouthTrust Corp.	21,513		668,624
Northern Trust Corp.	13,375		565,495
Comerica Inc.	10,518		543,044
M&T Bank Corp.	6,076		516,460
Bear Stearns Companies Inc. (The)	6,375		510,892
AmSouth Bancorp	22,737		500,669
Marshall & Ilsley Corp.	13,600		500,072
Franklin Resources Inc.	9,101		499,008
Regions Financial Corp.	14,376		498,991
Charter One Financial Inc.	14,482		483,264
CIT Group Inc.	13,814		474,787
T. Rowe Price Group Inc.	8,148		417,829
New York Community Bancorp Inc.	15,872		397,911
Legg Mason Inc.	4,295		395,398
Synovus Financial Corp.	16,299		389,057
Sovereign Bancorp Inc.	18,969		379,001
North Fork Bancorp Inc.	9,817		364,407
First Horizon National Corp.	8,122		357,043
National Commerce Financial Corp.	13,370		355,508
Union Planters Corp.	12,198		339,104
Popular Inc.	7,934		333,228
Zions Bancorporation	5,851		330,699
Banknorth Group Inc.	10,533		322,626
Compass Bancshares Inc.	7,911		303,466
Huntington Bancshares Inc.	14,125		302,275
GreenPoint Financial Corp.	7,367		287,313
Commerce Bancorp Inc.	4,933		281,230
E*TRADE Financial Corp.¹	23,805		270,425
Janus Capital Group Inc.	15,664		238,093
Providian Financial Corp.¹	18,895		229,196
Ameritrade Holding Corp.¹	18,464		225,999
Mercantile Bankshares Corp.	5,173		222,025
Hibernia Corp. Class A	10,130		220,733
TCF Financial Corp.	4,317		213,907
Doral Financial Corp.	6,028		197,658
Edwards (A.G.) Inc.	5,166		189,024
Commerce Bancshares Inc.	4,116		184,808
Federated Investors Inc. Class B	6,251		183,779
Associated Bancorp	4,463		182,760
Independence Community Bank Corp.	4,707		171,476
UnionBanCal Corp.	3,151		168,358
People’s Bank	3,960		167,152
Valley National Bancorp	6,451		166,764
City National Corp.	2,705		166,763
Investors Financial Services Corp.	4,252		165,275
AmeriCredit Corp.¹	10,183		165,066
Fulton Financial Corp.	7,855		161,813
Astoria Financial Corp.	4,631		159,399
Bank of Hawaii Corp.	3,540		154,769
Hudson City Bancorp Inc.	4,462		150,816


48		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. FINANCIAL SERVICES INDEX FUND

April 30, 2004


Security	Shares	Value
Wilmington Trust Corp.	4,305	$	149,685
Cullen/Frost Bankers Inc.	3,385		146,571
Eaton Vance Corp.	3,958		144,507
Sky Financial Group Inc.	6,021		143,902
Colonial BancGroup Inc. (The)	8,179		140,924
SEI Investment Co.	4,648		137,209
Webster Financial Corp.	2,980		129,630
Waddell & Reed Financial Inc. Class A	5,416		120,398
IndyMac Bancorp Inc.	3,732		120,021
Washington Federal Inc.	5,115		119,486
BISYS Group Inc. (The)¹	7,915		114,767
FirstMerit Corp.	4,670		110,025
Jefferies Group Inc.	3,200		109,120
Whitney Holding Corp.	2,660		109,060
UCBH Holdings Inc.	2,931		108,506
South Financial Group Inc. (The)	3,889		107,725
Cathay General Bancorp	1,635		106,438
Hudson United Bancorp	2,910		103,974
Old National Bancorp	4,318		103,200
First Midwest Bancorp Inc.	3,043		102,701
Alliance Data Systems Corp.¹	2,944		102,363
Affiliated Managers Group Inc.¹	2,096		102,075
Westamerica Bancorp	2,094		101,768
Raymond James Financial Inc.	3,910		98,219
BancorpSouth Inc.	4,824		97,590
Chicago Mercantile Exchange Holdings Inc.	831		97,476
New Century Financial Corp.	2,285		96,953
Greater Bay Bancorp	3,405		96,600
Fremont General Corp.	4,329		93,290
CapitalSource Inc.¹	4,421		93,106
Trustmark Corp.	3,398		90,455
East West Bancorp Inc.	1,566		88,213
First Bancorp	2,392		88,169
W Holding Co. Inc.	5,137		87,534
Southwest Bancorp of Texas Inc.	2,146		87,278
Park National Corp.	726		83,817
United Bancshares Inc.	2,729		81,897
MAF Bancorp Inc.	2,001		81,741
Knight Trading Group Inc.¹	6,936		80,596
Provident Financial Group Inc.	2,010		79,154
Community First Bankshares Inc.	2,444		78,648
Silicon Valley Bancshares¹	2,266		77,860
Pacific Capital Bancorp	2,067		75,818
Texas Regional Bancshares Inc. Class A	1,794		75,743
Citizens Banking Corp.	2,443		74,829
Chittenden Corp.	2,390		72,704
Commercial Federal Corp.	2,804		71,951
Provident Financial Services Inc.	3,967		71,406
Downey Financial Corp.	1,343		64,800
First Niagara Financial Group Inc.	5,079		63,995
TrustCo Bank Corp. NY	4,903		61,827
Susquehanna Bancshares Inc.	2,624		61,402
Piper Jaffray Companies Inc.¹	1,250		60,525
FNB Corp. (Florida)	2,983		58,467
First National Bankshares of Florida	2,983		54,917
Total System Services Inc.	2,471		54,856
Republic Bancorp Inc.	4,166		54,200
Provident Bankshares Corp.	1,610		45,354
AMCORE Financial Inc.	1,537		43,559
Investment Technology Group Inc.¹	3,035		43,492
FirstFed Financial Corp.¹	1,068		43,169
Harbor Florida Bancshares Inc.	1,462		40,527
Dime Community Bancshares	2,305		39,416
Sterling Bancshares Inc.	2,912		37,012
First Sentinel Bancorp Inc.	1,723		35,494
PFF Bancorp Inc.	917		34,342
NetBank Inc.	3,165		34,150
Anchor BanCorp Wisconsin Inc.	1,361		33,045
W.P. Stewart & Co. Ltd.	1,375		27,596
BSB Bancorp Inc.	637		23,887
Safeguard Scientifics Inc.¹	7,979		20,745
LaBranche & Co. Inc.	1,783		17,420
SWS Group Inc.	837		13,593
OceanFirst Financial Corp.	620		13,547
Bay View Capital Corp.	3,955		8,582

TOTAL COMMON STOCKS (Cost: $105,973,819)			110,448,589


SCHEDULES OF INVESTMENTS		49

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. FINANCIAL SERVICES INDEX FUND

April 30, 2004


Security	Shares or Principal		Value
SHORT-TERM INVESTMENTS – 6.89%

MONEY MARKET FUNDS – 2.53%

Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^2,3		1,905,876	$	1,905,876
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^2,3		681,025		681,025
BlackRock Temp Cash Money Market Fund²		31,413		31,413
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares²		176,009		176,009

				2,794,323
FLOATING RATE NOTES – 1.72%

Beta Finance Inc.
1.06%, 05/20/04^2,4	$	30,956		30,955
1.06%, 09/15/04^2,4		61,911		61,909
1.06%, 10/12/04^2,4		30,956		30,955
1.14%, 03/15/05^2,4		30,956		30,977
1.15%, 08/23/04^2,4		30,956		30,964
Canadian Imperial Bank of Commerce
1.24%, 10/07/04²		46,434		46,431
1.38%, 11/22/04²		15,478		15,478
1.40%, 10/29/04²		61,911		61,911
CC USA Inc.
1.06%, 05/24/04^2,4		61,911		61,911
1.07%, 07/16/04²		15,478		15,444
1.10%, 07/15/04^2,4		30,956		30,958
1.29%, 04/15/05^2,4		61,911		61,905
1.51%, 02/15/05^2,4		40,242		40,293
Dorada Finance Inc.
1.04%, 07/01/04²		21,669		21,632
1.06%, 05/20/04^2,4		61,911		61,911
1.24%, 08/09/04²		15,478		15,478
1.48%, 01/18/05^2,4		46,434		46,432
Five Finance Inc.
1.05%, 04/29/05^2,4		49,529		49,524
HBOS Treasury Services PLC
1.10%, 04/22/05²		61,911		61,911
1.24%, 04/01/05²		39,623		39,620

Security	Principal		Value
K2 USA LLC
1.06%, 08/16/04^2,4	$	15,478	$	15,477
1.06%, 09/27/04^2,4		66,864		66,860
1.07%, 05/17/04²		30,956		30,956
1.46%, 01/12/05^2,4		30,956		30,954
Links Finance LLC
1.05%, 04/15/05^2,4		61,911		61,900
1.06%, 05/04/04²		30,956		30,956
1.06%, 06/28/04²		30,956		30,955
1.09%, 07/20/04²		24,765		24,763
1.19%, 04/25/05²		61,911		61,951
Nationwide Building Society
1.11%, 04/28/05^2,4		61,911		61,911
1.14%, 07/23/04^2,4		46,434		46,434
Northern Rock PLC
1.11%, 01/13/05^2,4		58,816		58,816
Permanent Financing PLC
1.05%, 03/10/05²		61,911		61,911
1.06%, 12/10/04²		30,956		30,956
Sigma Finance Inc.
1.05%, 07/01/04²		30,956		30,954
1.08%, 10/07/04²		61,911		61,906
1.09%, 07/20/04²		30,956		30,954
1.24%, 08/06/04²		15,478		15,477
Tango Finance Corp.
1.06%, 07/06/04^2,4		18,573		18,573
1.06%, 01/18/05^2,4		27,241		27,239
1.06%, 04/07/05^2,4		22,721		22,719
1.07%, 02/25/05^2,4		34,670		34,665
1.08%, 07/15/04^2,4		18,573		18,572
WhistleJacket Capital LLC
1.06%, 09/15/04^2,4		30,956		30,953
1.26%, 10/20/04^2,4		15,335		15,244
1.32%, 02/04/05^2,4		15,478		15,475
White Pine Finance LLC
1.05%, 07/06/04²		37,147		37,146
1.05%, 04/15/05^2,4		46,434		46,425
1.06%, 08/26/04^2,4		30,956		30,954
1.06%, 11/15/04^2,4		37,147		37,147

				1,905,802


50		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. FINANCIAL SERVICES INDEX FUND

April 30, 2004


Security	Principal		Value
COMMERCIAL PAPER – 1.43%

Alpine Securitization Corp.
1.04%, 05/20/04²	$	30,956	$	30,940
Amsterdam Funding Corp.
1.03%, 05/05/04²		25,074		25,073
1.04%, 05/21/04²		37,147		37,127
Barton Capital Corp.
1.03%, 05/03/04²		15,493		15,493
1.03%, 05/06/04²		15,478		15,477
Blue Ridge Asset Funding Corp.
1.03%, 05/21/04²		30,956		30,940
Cantabric Finance LLC
1.09%, 07/22/04²		46,434		46,321
Corporate Asset Funding
1.05%, 05/21/04²		32,194		32,177
CRC Funding LLC
1.04%, 06/03/04²		61,911		61,856
1.10%, 07/07/04²		24,145		24,097
Delaware Funding Corp.
1.03%, 05/05/04²		46,485		46,482
1.03%, 05/21/04²		15,478		15,470
Edison Asset Securitization
1.03%, 05/06/04²		46,434		46,430
1.04%, 06/17/04²		61,911		61,831
1.05%, 06/22/04²		30,956		30,911
1.07%, 09/21/04²		30,956		30,826
Eureka Securitization Inc.
1.03%, 05/25/04²		12,382		12,374
Falcon Asset Securitization Corp.
1.03%, 05/05/04²		30,956		30,954
1.04%, 05/25/04²		46,434		46,404
1.04%, 05/26/04²		61,911		61,870
Ford Credit Auto Receivables
1.04%, 05/14/04²		15,478		15,473
Galaxy Funding Inc.
1.05%, 05/17/04²		30,956		30,943
1.07%, 07/20/04²		27,860		27,796
Gemini Securitization Corp.
1.03%, 05/24/04²		15,478		15,469
GIRO Funding US Corp.
1.05%, 05/19/04²		15,478		15,471
Grampian Funding LLC
1.26%, 10/22/04²		61,911		61,540
Jupiter Securitization Corp.
1.04%, 05/20/04²		46,434		46,411
1.04%, 05/24/04²		30,956		30,937
1.04%, 05/26/04²		42,441		42,413
1.04%, 05/27/04²		55,720		55,682
New Center Asset Trust
1.06%, 05/03/04²		77,389		77,389
Park Avenue Receivables Corp.
1.03%, 05/07/04²		30,956		30,952
Polonius Inc.
1.04%, 05/21/04²		35,816		35,797
Preferred Receivables Funding Corp.
1.04%, 05/20/04²		15,478		15,470
Scaldis Capital LLC
1.04%, 05/07/04²		30,956		30,952
1.04%, 05/20/04²		83,676		83,635
1.04%, 05/25/04²		30,956		30,936
1.05%, 06/30/04²		22,164		22,127
Sydney Capital Corp.
1.25%, 10/22/04²		20,604		20,481
Thames Asset Global Securitization No. 1 Inc.
1.04%, 05/20/04²		30,956		30,940
Thunder Bay Funding Inc.
1.03%, 05/03/04²		22,322		22,322
Windmill Funding Corp.
1.03%, 05/05/04²		46,434		46,431
1.03%, 05/06/04²		30,956		30,954
1.03%, 05/10/04²		61,911		61,899

				1,585,473
TIME DEPOSITS – 0.91%

Abbey National Treasury Services PLC
1.25%, 01/06/05²		61,911		61,911
1.33%, 02/10/05²		30,956		30,952
1.39%, 02/02/05²		30,956		30,952
1.39%, 04/08/05²		43,338		43,332
1.40%, 10/25/04²		61,911		61,907
Bank of New York
1.39%, 11/01/04²		61,911		61,908


SCHEDULES OF INVESTMENTS		51

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. FINANCIAL SERVICES INDEX FUND

April 30, 2004


Security	Principal		Value
Bank of Novia Scotia
1.13%, 10/06/04²	$	61,911	$	61,911
1.24%, 10/07/04²		46,434		46,432
1.42%, 10/29/04²		46,434		46,436
National City Bank (Cleveland, Ohio)
1.25%, 01/06/05²		61,911		61,914
Prudential Funding LLC
1.06%, 05/03/04²		92,867		92,868
Toronto-Dominion Bank
1.04%, 06/22/04²		15,478		15,478
1.22%, 03/23/05²		108,345		108,328
1.34%, 02/10/05²		24,765		24,762
1.41%, 11/01/04²		46,434		46,431
UBS Finance (Delaware)
1.10%, 09/08/04²		61,911		61,669
1.11%, 12/17/04²		92,867		92,214
1.14%, 09/29/04²		61,911		61,620

				1,011,025
U.S. GOVERNMENT AGENCY NOTES – 0.18%

Federal Home Loan Mortgage Corp.
1.15%, 05/12/04²		46,434		46,420
1.28%, 08/19/04²		24,765		24,669
1.63%, 04/15/05²		43,338		43,469
Federal National Mortgage Association
1.28%, 08/20/04²		80,485		80,169

				194,727
REPURCHASE AGREEMENTS – 0.12%

Merrill Lynch Government Securities Inc.
1.07%, 05/03/04²		133,109		133,109

				133,109

TOTAL SHORT-TERM INVESTMENTS (Cost: $7,624,459)				7,624,459

TOTAL INVESTMENTS IN SECURITIES – 106.69% (Cost: $113,598,278)				118,073,048

Other Assets, Less Liabilities – (6.69%)				(7,402,180	)


NET ASSETS – 100.00%			$	110,670,868

Non-income earning securities.

All or a portion of this security represents investments of securities lending collateral.

Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

⁴

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

See notes to financial statements.


52		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® DOW JONES U.S. REAL ESTATE INDEX FUND

April 30, 2004


Security	Shares	Value
COMMON STOCKS – 99.85%

Equity Office Properties Trust	931,931	$	23,456,703
Simon Property Group Inc.	405,315		19,540,236
Equity Residential	646,336		17,748,387
General Growth Properties Inc.	502,610		13,625,757
Plum Creek Timber Co. Inc.	427,469		12,635,984
Archstone-Smith Trust	431,243		11,828,995
Vornado Realty Trust	228,458		11,525,706
ProLogis	390,321		11,483,244
Boston Properties Inc.	240,260		11,292,220
Kimco Realty Corp.	206,403		8,821,664
Duke Realty Corp.	300,640		8,766,662
Rouse Co. (The)	201,313		8,716,853
AvalonBay Communities Inc.	168,114		8,343,498
iStar Financial Inc.	233,338		8,292,833
Public Storage Inc.	189,376		7,914,023
Health Care Property Investors Inc.	304,245		7,271,456
Host Marriott Corp.¹	576,620		6,861,778
Liberty Property Trust	181,897		6,648,335
Friedman, Billings, Ramsey Group, Inc. Class A	358,457		6,631,455
Developers Diversified Realty Corp.	185,265		6,067,429
AMB Property Corp.	198,561		6,016,398
Macerich Co. (The)	134,774		5,642,987
United Dominion Realty Trust Inc.	307,968		5,528,026
Annaly Mortgage Management Inc.	316,334		5,472,578
Hospitality Properties Trust	138,821		5,425,125
Thornburg Mortgage Inc.	205,092		5,307,781
New Plan Excel Realty Trust	229,168		5,142,530
Mack-Cali Realty Corp.	136,957		5,115,344
Weingarten Realty Investors	169,854		4,910,479
Chelsea Property Group Inc.	92,923		4,739,073
Regency Centers Corp.	123,561		4,684,198
Ventas Inc.	208,903		4,614,667
Rayonier Inc.	114,722		4,474,158
Arden Realty Inc.	154,783		4,367,976
Federal Realty Investment Trust	117,183		4,345,146
Catellus Development Corp.	192,915		4,157,318
American Financial Realty Trust	264,038		3,907,762
Crescent Real Estate Equities Co.	251,487		3,890,504
Mills Corp.	92,358		3,749,735
Pan Pacific Retail Properties Inc.	85,009		3,734,445
Health Care REIT Inc.	116,242		3,712,769
CarrAmerica Realty Corp.	127,931		3,647,313
Camden Property Trust	85,751		3,628,982
BRE Properties Inc. Class A	113,981		3,613,198
Reckson Associates Realty Corp.	151,580		3,603,057
CBL & Associates Properties Inc.	71,054		3,570,464
CenterPoint Properties Corp.	49,457		3,565,850
Healthcare Realty Trust Inc.	98,844		3,543,557
Shurgard Storage Centers Inc. Class A	105,571		3,515,514
SL Green Realty Corp.	83,432		3,404,026
St. Joe Company (The)	86,446		3,388,683
HRPT Properties Trust	353,680		3,377,644
First Industrial Realty Trust Inc.	97,774		3,290,095
Home Properties Inc.	85,171		3,180,285
Highwoods Properties Inc.	139,864		3,153,933
Realty Income Corp.	80,592		3,082,644
Essex Property Trust Inc.	50,532		3,079,925
Trizec Properties Inc.	210,296		3,011,439
Post Properties Inc.	111,934		3,009,905
Nationwide Health Properties Inc.	165,005		2,991,541
Prentiss Properties Trust	86,796		2,780,944
Redwood Trust Inc.	59,958		2,605,175
Brandywine Realty Trust	101,760		2,578,598
Pennsylvania Real Estate Investment Trust	79,307		2,565,581
Alexandria Real Estate Equities Inc.	44,903		2,551,388
Washington Real Estate Investment Trust	93,463		2,542,194
Cousins Properties Inc.	87,750		2,467,530
Taubman Centers Inc.	119,707		2,334,287
Kilroy Realty Corp.	69,166		2,168,354
LNR Property Corp.	42,346		2,126,616
Capital Automotive	71,675		2,016,218
Gables Residential Trust	62,418		1,984,892
Colonial Properties Trust	54,490		1,922,407
Manufactured Home Communities Inc.	54,771		1,714,332
Glenborough Realty Trust Inc.	81,824		1,537,473
FelCor Lodging Trust Inc.¹	135,871		1,358,710
Koger Equity Inc.	58,141		1,218,054
Equity Inns Inc.	125,818		1,031,708


SCHEDULES OF INVESTMENTS		53

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. REAL ESTATE INDEX FUND

April 30, 2004


Security	Shares or Principal		Value
Meristar Hospitality Corp.¹		150,536	$	873,109

TOTAL COMMON STOCKS (Cost: $457,999,609)				418,447,842

SHORT-TERM INVESTMENTS – 12.74%

MONEY MARKET FUNDS – 4.66%

Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^2,3		13,297,418		13,297,418
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^2,3		4,775,264		4,775,264
BlackRock Temp Cash Money Market Fund²		220,262		220,262
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares²		1,234,155		1,234,155

				19,527,099
FLOATING RATE NOTES – 3.19%

Beta Finance Inc.
1.06%, 05/20/04^2,4	$	217,058		217,057
1.06%, 09/15/04^2,4		434,116		434,100
1.06%, 10/12/04^2,4		217,058		217,049
1.14%, 03/15/05^2,4		217,058		217,209
1.15%, 08/23/04^2,4		217,058		217,115
Canadian Imperial Bank of Commerce
1.24%, 10/07/04²		325,587		325,566
1.38%, 11/22/04²		108,529		108,534
1.40%, 10/29/04²		434,116		434,111
CC USA Inc.
1.06%, 05/24/04^2,4		434,116		434,114
1.07%, 07/16/04²		108,529		108,290
1.10%, 07/15/04^2,4		217,058		217,074
1.29%, 04/15/05^2,4		434,116		434,075
1.51%, 02/15/05^2,4		282,175		282,528
Dorada Finance Inc.
1.04%, 07/01/04²		151,941		151,682
1.06%, 05/20/04^2,4		434,116		434,113
1.24%, 08/09/04²		108,529		108,525
1.48%, 01/18/05^2,4		325,587		325,576


Security	Principal		Value
Five Finance Inc.
1.05%, 04/29/05^2,4	$	347,293	$	347,258
HBOS Treasury Services PLC
1.10%, 04/22/05²		434,116		434,116
1.24%, 04/01/05²		277,834		277,809
K2 USA LLC
1.06%, 08/16/04^2,4		108,529		108,524
1.06%, 09/27/04^2,4		468,845		468,817
1.07%, 05/17/04²		217,058		217,058
1.46%, 01/12/05^2,4		217,058		217,043
Links Finance LLC
1.05%, 04/15/05^2,4		434,116		434,034
1.06%, 05/04/04²		217,058		217,059
1.06%, 06/28/04²		217,058		217,052
1.09%, 07/20/04²		173,646		173,640
1.19%, 04/25/05²		434,116		434,392
Nationwide Building Society
1.11%, 04/28/05^2,4		434,116		434,116
1.14%, 07/23/04^2,4		325,587		325,587
Northern Rock PLC
1.11%, 01/13/05^2,4		412,410		412,410
Permanent Financing PLC
1.05%, 03/10/05²		434,116		434,116
1.06%, 12/10/04²		217,058		217,058
Sigma Finance Inc.
1.05%, 07/01/04²		217,058		217,049
1.08%, 10/07/04²		434,116		434,079
1.09%, 07/20/04²		217,058		217,049
1.24%, 08/06/04²		108,529		108,526
Tango Finance Corp.
1.06%, 07/06/04^2,4		130,235		130,232
1.06%, 01/18/05^2,4		191,011		190,998
1.06%, 04/07/05^2,4		159,321		159,306
1.07%, 02/25/05^2,4		243,105		243,066
1.08%, 07/15/04^2,4		130,235		130,227
WhistleJacket Capital LLC
1.06%, 09/15/04^2,4		217,058		217,042
1.26%, 10/20/04^2,4		107,531		106,891
1.32%, 02/04/05^2,4		108,529		108,513


54		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. REAL ESTATE INDEX FUND

April 30, 2004


Security	Principal		Value
White Pine Finance LLC
1.05%, 07/06/04²	$	260,470	$	260,465
1.05%, 04/15/05^2,4		325,587		325,525
1.06%, 08/26/04^2,4		217,058		217,048
1.06%, 11/15/04^2,4		260,470		260,470

				13,363,293
COMMERCIAL PAPER – 2.65%

Alpine Securitization Corp.
1.04%, 05/20/04²		217,058		216,951
Amsterdam Funding Corp.
1.03%, 05/05/04²		175,817		175,807
1.04%, 05/21/04²		260,470		260,334
Barton Capital Corp.
1.03%, 05/03/04²		108,633		108,634
1.03%, 05/06/04²		108,529		108,520
Blue Ridge Asset Funding Corp.
1.03%, 05/21/04²		217,058		216,946
Cantabric Finance LLC
1.09%, 07/22/04²		325,587		324,799
Corporate Asset Funding
1.05%, 05/21/04²		225,740		225,623
CRC Funding LLC
1.04%, 06/03/04²		434,116		433,727
1.10%, 07/07/04²		169,305		168,970
Delaware Funding Corp.
1.03%, 05/05/04²		325,947		325,929
1.03%, 05/21/04²		108,529		108,473
Edison Asset Securitization
1.03%, 05/06/04²		325,587		325,559
1.04%, 06/17/04²		434,116		433,552
1.05%, 06/22/04²		217,058		216,741
1.07%, 09/21/04²		217,058		216,148
Eureka Securitization Inc.
1.03%, 05/25/04²		86,823		86,769
Falcon Asset Securitization Corp.
1.03%, 05/05/04²		217,058		217,046
1.04%, 05/25/04²		325,587		325,381
1.04%, 05/26/04²		434,116		433,830
Ford Credit Auto Receivables
1.04%, 05/14/04²		108,529		108,495
Galaxy Funding Inc.
1.05%, 05/17/04²		217,058		216,970
1.07%, 07/20/04²		195,352		194,899
Gemini Securitization Corp.
1.03%, 05/24/04²		108,529		108,464
GIRO Funding US Corp.
1.05%, 05/19/04²		108,529		108,478
Grampian Funding LLC
1.26%, 10/22/04²		434,116		431,513
Jupiter Securitization Corp.
1.04%, 05/20/04²		325,587		325,428
1.04%, 05/24/04²		217,058		216,926
1.04%, 05/26/04²		297,595		297,398
1.04%, 05/27/04²		390,704		390,435
New Center Asset Trust
1.06%, 05/03/04²		542,645		542,645
Park Avenue Receivables Corp.
1.03%, 05/07/04²		217,058		217,033
Polonius Inc.
1.04%, 05/21/04²		251,136		251,006
Preferred Receivables Funding Corp.
1.04%, 05/20/04²		108,529		108,476
Scaldis Capital LLC
1.04%, 05/07/04²		217,058		217,033
1.04%, 05/20/04²		586,725		586,436
1.04%, 05/25/04²		217,058		216,920
1.05%, 06/30/04²		155,414		155,151
Sydney Capital Corp.
1.25%, 10/22/04²		144,474		143,611
Thames Asset Global Securitization No. 1 Inc.
1.04%, 05/20/04²		217,058		216,951
Thunder Bay Funding Inc.
1.03%, 05/03/04²		156,516		156,517
Windmill Funding Corp.
1.03%, 05/05/04²		325,587		325,568
1.03%, 05/06/04²		217,058		217,039
1.03%, 05/10/04²		434,116		434,029

				11,117,160


SCHEDULES OF INVESTMENTS		55

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. REAL ESTATE INDEX FUND

April 30, 2004


Security	Principal		Value
TIME DEPOSITS – 1.69%

Abbey National Treasury Services PLC
1.25%, 01/06/05²	$	434,116	$	434,116
1.33%, 02/10/05²		217,058		217,033
1.39%, 02/02/05²		217,058		217,034
1.39%, 04/08/05²		303,881		303,839
1.40%, 10/25/04²		434,116		434,085
Bank of New York
1.39%, 11/01/04²		434,116		434,094
Bank of Novia Scotia
1.13%, 10/06/04²		434,116		434,116
1.24%, 10/07/04²		325,587		325,573
1.42%, 10/29/04²		325,587		325,599
National City Bank (Cleveland, Ohio)
1.25%, 01/06/05²		434,116		434,131
Prudential Funding LLC
1.06%, 05/03/04²		651,174		651,174
Toronto-Dominion Bank
1.04%, 06/22/04²		108,529		108,529
1.22%, 03/23/05²		759,703		759,585
1.34%, 02/10/05²		173,646		173,626
1.41%, 11/01/04²		325,587		325,571
UBS Finance (Delaware)
1.10%, 09/08/04²		434,116		432,418
1.11%, 12/17/04²		651,174		646,596
1.14%, 09/29/04²		434,116		432,077

				7,089,196
U.S. GOVERNMENT AGENCY NOTES – 0.33%

Federal Home Loan Mortgage Corp.
1.15%, 05/12/04²		325,587		325,493
1.28%, 08/19/04²		173,646		172,980
1.63%, 04/15/05²		303,881		304,802
Federal National Mortgage Association
1.28%, 08/20/04²		564,351		562,164

				1,365,439
REPURCHASE AGREEMENTS – 0.22%

Merrill Lynch Government Securities Inc.
1.07%, 05/03/04²		933,350		933,350

				933,350

TOTAL SHORT-TERM INVESTMENTS (Cost: $53,395,537)				53,395,537

TOTAL INVESTMENTS IN SECURITIES – 112.59% (Cost: $511,395,146)				471,843,379

Other Assets, Less Liabilities – (12.59%)				(52,754,217	)

NET ASSETS – 100.00%			$	419,089,162

Non-income earning securities.

All or a portion of this security represents investments of securities lending collateral.

Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

⁴

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

See notes to financial statements.


56		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® COHEN & STEERS REALTY MAJORS INDEX FUND

April 30, 2004


Security	Shares		Value
COMMON STOCKS – 99.90%

Simon Property Group Inc.		1,207,838	$	58,229,870
Equity Office Properties Trust		2,146,238		54,020,810
Equity Residential		1,836,443		50,428,725
General Growth Properties Inc.		1,452,205		39,369,278
Vornado Realty Trust		760,158		38,349,971
Public Storage Inc.		851,848		35,598,728
ProLogis		1,208,771		35,562,043
Archstone-Smith Trust		1,286,883		35,299,201
Boston Properties Inc.		672,433		31,604,351
Kimco Realty Corp.		735,566		31,438,091
Rouse Co. (The)		643,861		27,879,181
Duke Realty Corp.		920,898		26,853,386
Host Marriott Corp.¹		2,221,865		26,440,193
AvalonBay Communities Inc.		471,461		23,398,609
Liberty Property Trust		598,845		21,887,785
Health Care Property Investors Inc.		881,829		21,075,713
Developers Diversified Realty Corp.		590,228		19,329,967
Macerich Co. (The)		412,115		17,255,255
Weingarten Realty Investors		591,152		17,090,204
Chelsea Property Group Inc.		334,154		17,041,854
AMB Property Corp.		561,040		16,999,512
CenterPoint Properties Corp.		194,270		14,006,867
Pan Pacific Retail Properties Inc.		309,958		13,616,455
Arden Realty Inc.		454,194		12,817,355
SL Green Realty Corp.		296,619		12,102,055
Reckson Associates Realty Corp.		428,540		10,186,396
United Dominion Realty Trust Inc.		207,551		3,725,540
Crescent Real Estate Equities Co.		231,611		3,583,022
Prentiss Properties Trust		109,297		3,501,876
Mack-Cali Realty Corp.		77,756		2,904,187
Apartment Investment & Management Co. Class A		74,880		2,109,370

TOTAL COMMON STOCKS (Cost: $712,574,566)				723,705,850

SHORT-TERM INVESTMENTS – 7.76%

MONEY MARKET FUNDS – 2.84%

Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^2,3		14,051,899		14,051,899

Security	Shares or Principal		Value
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^2,3		5,021,138	$	5,021,138
BlackRock Temp Cash Money Market Fund²		231,603		231,603
Short-Term Investment Co. – Prime Money Market Portfolio, Institutional Shares²		1,297,700		1,297,700

				20,602,340
FLOATING RATE NOTES – 1.94%

Beta Finance Inc.
1.06%, 05/20/04^2,4	$	228,234		228,232
1.06%, 09/15/04^2,4		456,468		456,451
1.06%, 10/12/04^2,4		228,234		228,224
1.14%, 03/15/05^2,4		228,234		228,392
1.15%, 08/23/04^2,4		228,234		228,294
Canadian Imperial Bank of Commerce
1.24%, 10/07/04²		342,351		342,329
1.38%, 11/22/04²		114,117		114,122
1.40%, 10/29/04²		456,468		456,462
CC USA Inc.
1.06%, 05/24/04^2,4		456,468		456,466
1.07%, 07/16/04²		114,117		113,866
1.10%, 07/15/04^2,4		228,234		228,250
1.29%, 04/15/05^2,4		456,468		456,425
1.51%, 02/15/05^2,4		296,704		297,075
Dorada Finance Inc.
1.04%, 07/01/04²		159,764		159,491
1.06%, 05/20/04^2,4		456,468		456,465
1.24%, 08/09/04²		114,117		114,112
1.48%, 01/18/05^2,4		342,351		342,339
Five Finance Inc.
1.05%, 04/29/05^2,4		365,174		365,139
HBOS Treasury Services PLC
1.10%, 04/22/05²		456,468		456,468
1.24%, 04/01/05²		292,139		292,113
K2 USA LLC
1.06%, 08/16/04^2,4		114,117		114,112
1.06%, 09/27/04^2,4		492,985		492,956
1.07%, 05/17/04²		228,234		228,234


SCHEDULES OF INVESTMENTS		57

Schedule of Investments (Continued)

iSHARES^® COHEN & STEERS REALTY MAJORS INDEX FUND

April 30, 2004


Security	Principal		Value
1.46%, 01/12/05^2,4	$	228,234	$	228,218
Links Finance LLC
1.05%, 04/15/05^2,4		456,468		456,381
1.06%, 05/04/04²		228,234		228,234
1.06%, 06/28/04²		228,234		228,227
1.09%, 07/20/04²		182,587		182,579
1.19%, 04/25/05²		456,468		456,758
Nationwide Building Society
1.11%, 04/28/05^2,4		456,468		456,468
1.14%, 07/23/04^2,4		342,351		342,351
Northern Rock PLC
1.11%, 01/13/05^2,4		433,645		433,645
Permanent Financing PLC
1.05%, 03/10/05²		456,468		456,468
1.06%, 12/10/04²		228,234		228,234
Sigma Finance Inc.
1.05%, 07/01/04²		228,234		228,225
1.08%, 10/07/04²		456,468		456,429
1.09%, 07/20/04²		228,234		228,225
1.24%, 08/06/04²		114,117		114,115
Tango Finance Corp.
1.06%, 07/06/04^2,4		136,940		136,938
1.06%, 01/18/05^2,4		200,846		200,831
1.06%, 04/07/05^2,4		167,524		167,508
1.07%, 02/25/05^2,4		255,622		255,580
1.08%, 07/15/04^2,4		136,940		136,931
WhistleJacket Capital LLC
1.06%, 09/15/04^2,4		228,234		228,217
1.26%, 10/20/04^2,4		113,067		112,394
1.32%, 02/04/05^2,4		114,117		114,100
White Pine Finance LLC
1.05%, 07/06/04²		273,881		273,876
1.05%, 04/15/05^2,4		342,351		342,286
1.06%, 08/26/04^2,4		228,234		228,223
1.06%, 11/15/04^2,4		273,881		273,881

				14,051,339
COMMERCIAL PAPER – 1.61%

Alpine Securitization Corp.
1.04%, 05/20/04²		228,234		228,122
Amsterdam Funding Corp.
1.03%, 05/05/04²		184,870		184,859
1.04%, 05/21/04²		273,881		273,738
Barton Capital Corp.
1.03%, 05/03/04²		114,227		114,227
1.03%, 05/06/04²		114,117		114,107
Blue Ridge Asset Funding Corp.
1.03%, 05/21/04²		228,234		228,116
Cantabric Finance LLC
1.09%, 07/22/04²		342,351		341,522
Corporate Asset Funding
1.05%, 05/21/04²		237,363		237,239
CRC Funding LLC
1.04%, 06/03/04²		456,468		456,059
1.10%, 07/07/04²		178,022		177,669
Delaware Funding Corp.
1.03%, 05/05/04²		342,730		342,710
1.03%, 05/21/04²		114,117		114,059
Edison Asset Securitization
1.03%, 05/06/04²		342,351		342,322
1.04%, 06/17/04²		456,468		455,874
1.05%, 06/22/04²		228,234		227,901
1.07%, 09/21/04²		228,234		227,277
Eureka Securitization Inc.
1.03%, 05/25/04²		91,294		91,236
Falcon Asset Securitization Corp.
1.03%, 05/05/04²		228,234		228,221
1.04%, 05/25/04²		342,351		342,134
1.04%, 05/26/04²		456,468		456,166
Ford Credit Auto Receivables
1.04%, 05/14/04²		114,117		114,081
Galaxy Funding Inc.
1.05%, 05/17/04²		228,234		228,142
1.07%, 07/20/04²		205,411		204,934
Gemini Securitization Corp.
1.03%, 05/24/04²		114,117		114,048
GIRO Funding US Corp.
1.05%, 05/19/04²		114,117		114,064
Grampian Funding LLC
1.26%, 10/22/04²		456,468		453,731
Jupiter Securitization Corp.
1.04%, 05/20/04²		342,351		342,184
1.04%, 05/24/04²		228,234		228,095
1.04%, 05/26/04²		312,918		312,711
1.04%, 05/27/04²		410,821		410,538


58		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® COHEN & STEERS REALTY MAJORS INDEX FUND

April 30, 2004


Security	Principal		Value
New Center Asset Trust
1.06%, 05/03/04²	$	570,585	$	570,585
Park Avenue Receivables Corp.
1.03%, 05/07/04²		228,234		228,208
Polonius Inc.
1.04%, 05/21/04²		264,067		263,929
Preferred Receivables Funding Corp.
1.04%, 05/20/04²		114,117		114,061
Scaldis Capital LLC
1.04%, 05/07/04²		228,234		228,208
1.04%, 05/20/04²		616,935		616,632
1.04%, 05/25/04²		228,234		228,089
1.05%, 06/30/04²		163,416		163,139
Sydney Capital Corp.
1.25%, 10/22/04²		151,913		151,005
Thames Asset Global Securitization No. 1 Inc.
1.04%, 05/20/04²		228,234		228,122
Thunder Bay Funding Inc.
1.03%, 05/03/04²		164,575		164,575
Windmill Funding Corp.
1.03%, 05/05/04²		342,351		342,331
1.03%, 05/06/04²		228,234		228,214
1.03%, 05/10/04²		456,468		456,376

				11,689,560
TIME DEPOSITS – 1.03%

Abbey National Treasury Services PLC
1.25%, 01/06/05²		456,468		456,468
1.33%, 02/10/05²		228,234		228,208
1.39%, 02/02/05²		228,234		228,208
1.39%, 04/08/05²		319,528		319,483
1.40%, 10/25/04²		456,468		456,435
Bank of New York
1.39%, 11/01/04²		456,468		456,445
Bank of Novia Scotia
1.13%, 10/06/04²		456,468		456,468
1.24%, 10/07/04²		342,351		342,336
1.42%, 10/29/04²		342,351		342,364
National City Bank (Cleveland, Ohio)
1.25%, 01/06/05²		456,468		456,483
Prudential Funding LLC
1.06%, 05/03/04²		684,702		684,702
Toronto-Dominion Bank
1.04%, 06/22/04²		114,117		114,117
1.22%, 03/23/05²		798,819		798,695
1.34%, 02/10/05²		182,587		182,566
1.41%, 11/01/04²		342,351		342,334
UBS Finance (Delaware)
1.10%, 09/08/04²		456,468		454,683
1.11%, 12/17/04²		684,702		679,889
1.14%, 09/29/04²		456,468		454,324

				7,454,208
U.S. GOVERNMENT AGENCY NOTES – 0.20%

Federal Home Loan Mortgage Corp.
1.15%, 05/12/04²		342,351		342,253
1.28%, 08/19/04²		182,587		181,886
1.63%, 04/15/05²		319,528		320,496
Federal National Mortgage Association
1.28%, 08/20/04²		593,408		591,109

				1,435,744
REPURCHASE AGREEMENTS – 0.14%

Merrill Lynch Government Securities Inc.
1.07%, 05/03/04²		981,406		981,406

				981,406


TOTAL SHORT-TERM INVESTMENTS (Cost: $56,214,597)				56,214,597


TOTAL INVESTMENTS IN SECURITIES – 107.66% (Cost: $768,789,163)				779,920,447

Other Assets, Less Liabilities – (7.66%)				(55,474,211	)

NET ASSETS – 100.00%			$	724,446,236

Non-income earning securities.

All or a portion of this security represents investments of securities lending collateral.

Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

⁴

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		59

Statements of Assets And Liabilities

iSHARES^® TRUST

April 30, 2004


	iShares Dow Jones U.S.
	Basic Materials Sector Index Fund			Consumer Cyclical Sector Index Fund			Consumer Non-cyclical Sector Index Fund			Financial Sector Index Fund
ASSETS

Investments, at cost:
Unaffiliated issuers	$	329,779,256		$	236,879,348		$	282,276,586		$	246,807,166

Affiliates of the investment advisor	$	7,895,707		$	7,188,087		$	7,167,199		$	6,322,998

Investments in securities, at value (including securities on loan^a) (Note 1): Unaffiliated issuers	$	332,059,248		$	233,514,035		$	303,657,778		$	269,749,188
Affiliates of the investment advisor		7,895,707			7,188,087			7,167,199			6,322,998
Receivables:
Investment securities sold		—			—			—			1,363,220
Dividends and interest		221,939			96,987			350,835			498,102
Capital shares sold		—			—			3,495			—

Total Assets		340,176,894			240,799,109			311,179,307			277,933,508

LIABILITIES

Payables:
Investment securities purchased		—			—			—			1,385,388
Collateral for securities on loan (Note 5)		22,985,384			21,204,663			21,367,182			18,197,706
Advisory fees (Note 2)		352,752			207,660			242,667			269,697

Total Liabilities		23,338,136			21,412,323			21,609,849			19,852,791

NET ASSETS	$	316,838,758		$	219,386,786		$	289,569,458		$	258,080,717

Net assets consist of:

Paid-in capital	$	316,431,099		$	225,983,791		$	270,481,083		$	238,872,068
Undistributed net investment income		410,552			—			230,289			597,453
Accumulated net realized loss		(2,282,885	)		(3,231,692	)		(2,523,106	)		(4,330,826	)
Net unrealized appreciation (depreciation)		2,279,992			(3,365,313	)		21,381,192			22,942,022

NET ASSETS	$	316,838,758		$	219,386,786		$	289,569,458		$	258,080,717

Shares outstanding		7,500,000			3,950,000			5,550,000			2,950,000

Net asset value per share	$	42.25		$	55.54		$	52.17		$	87.48

Securities on loan with market values of $22,198,387, $20,506,540, $20,643,535 and $17,600,240, respectively. See Note 5.

See notes to financial statements.


60		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Assets and Liabilities (Continued)

iSHARES^® TRUST

April 30, 2004


	iShares Dow Jones U.S.									iShares Cohen & Steers
	Industrial Sector Index Fund			Financial Services Index Fund			Real Estate Index Fund			Realty Majors Index Fund
ASSETS

Investments, at cost:
Unaffiliated issuers	$	170,089,677		$	111,011,377		$	493,322,464		$	749,716,126

Affiliates of the investment advisor	$	4,465,205		$	2,586,901		$	18,072,682		$	19,073,037

Investments in securities, at value (including securities on loan^a)(Note 1):
Unaffiliated issuers	$	166,252,077		$	115,486,147		$	453,770,697		$	760,847,410
Affiliates of the investment advisor		4,465,205			2,586,901			18,072,682			19,073,037
Receivables:
Investment securities sold		49,772			—			—			—
Dividends and interest		73,461			267,276			784,618			633,704

Total Assets		170,840,515			118,340,324			472,627,997			780,554,151

LIABILITIES

Payables:
Collateral for securities on loan (Note 5)		13,286,525			7,544,008			52,897,826			55,621,439
Capital shares redeemed		—			—			102,267			—
Advisory fees (Note 2)		169,818			125,448			538,742			486,476

Total Liabilities		13,456,343			7,669,456			53,538,835			56,107,915

NET ASSETS	$	157,384,172		$	110,670,868		$	419,089,162		$	724,446,236

Net assets consist of:

Paid-in capital	$	169,957,015		$	108,397,847		$	460,035,289		$	713,685,349
Undistributed net investment income		—			324,275			290,001			1,629,733
Accumulated net realized loss		(8,735,243	)		(2,526,024	)		(1,684,361	)		(2,000,130	)
Net unrealized appreciation (depreciation)		(3,837,600	)		4,474,770			(39,551,767	)		11,131,284

NET ASSETS	$	157,384,172		$	110,670,868		$	419,089,162		$	724,446,236

Shares outstanding		3,250,000			1,100,000			4,500,000			7,200,000

Net asset value per share	$	48.43		$	100.61		$	93.13		$	100.62

Securities on loan with market values of $12,867,772, $7,291,085, $51,107,839 and $53,739,453, respectively. See Note 5.

see notes to financial statements.


FINANCIAL STATEMENTS		61

Statements of Operations

iSHARES^® TRUST

Year Ended April 30, 2004


	iShares Dow Jones U.S.
	Basic Materials Sector Index Fund			Consumer Cyclical Sector Index Fund			Consumer Non-Cyclical Sector Index Fund			Financial Sector Index Fund
NET INVESTMENT INCOME

Dividends^a	$	5,467,728		$	1,216,726		$	3,132,178		$	5,565,856
Interest^b		1,822			760			898			1,751
Securities lending income^b		18,771			14,680			13,261			14,653

Total investment income		5,488,321			1,232,166			3,146,337			5,582,260

EXPENSES (Note 2)

Advisory fees		1,431,135			936,060			887,525			1,249,444

Total expenses		1,431,135			936,060			887,525			1,249,444

Net investment income		4,057,186			296,106			2,258,812			4,332,816

NET REALIZED AND UNREALIZED GAIN (LOSS)

Net realized gain (loss) from:
Investments		(1,852,057	)		(1,589,536	)		(749,683	)		(1,166,684	)
In-kind redemptions		20,192,040			2,288,794			636,782			1,018,029

Net realized gain (loss)		18,339,983			699,258			(112,901	)		(148,655	)

Net change in unrealized appreciation (depreciation) on investments		12,741,111			27,215,745			38,413,496			32,124,797

Net realized and unrealized gain		31,081,094			27,915,003			38,300,595			31,976,142

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	35,138,280		$	28,211,109		$	40,559,407		$	36,308,958

Net of foreign withholding tax of $-, $-, $- and $1,501, respectively.

Includes income earned from affiliates of the Funds’ investment advisor. See Note 2.

see notes to financial statements.


62		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations (Continued)

iSHARES^® TRUST

Year Ended April 30, 2004


	iShares Dow Jones U.S.									iShares Cohen & Steers
	Industrial Sector Index Fund			Financial Services Index Fund			Real Estate Index Fund			Realty Majors Index Fund
NET INVESTMENT INCOME

Dividends^a	$	2,084,120		$	2,795,961		$	21,384,387		$	30,098,790
Interest^b		737			1,001			4,993			7,157
Securities lending income^b		9,235			7,298			36,110			43,063

Total investment income		2,094,092			2,804,260			21,425,490			30,149,010

EXPENSES (Note 2)

Advisory fees		816,820			628,792			2,080,140			1,875,786

Total expenses		816,820			628,792			2,080,140			1,875,786

Net investment income		1,277,272			2,175,468			19,345,350			28,273,224

NET REALIZED AND UNREALIZED GAIN (LOSS)

Net realized gain (loss) from:
Investments		(1,152,956	)		(1,230,376	)		(5,818,922	)		(7,495,970	)
In-kind redemptions		12,118,106			11,344,014			60,339,295			32,623,596

Net realized gain		10,965,150			10,113,638			54,520,373			25,127,626

Net change in unrealized appreciation (depreciation) on investments		15,562,180			5,539,065			(35,483,332	)		14,250,762

Net realized and unrealized gain		26,527,330			15,652,703			19,037,041			39,378,388

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	27,804,602		$	17,828,171		$	38,382,391		$	67,651,612

Net of foreign withholding tax of $-, $1,031, $- and $-, respectively.

Includes income earned from affiliates of the Funds’ investment advisor. See Note 2.

See notes to financial statements.


FINANCIAL STATEMENTS		63

Statements of Changes in Net Assets

iSHARES^® TRUST


	iShares Dow Jones U.S. Basic Materials Sector Index Fund						iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund						iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund
	For the year ended April 30, 2004			For the year ended April 30, 2003			For the year ended April 30, 2004			For the year ended April 30, 2003			For the year ended April 30, 2004			For the year ended April 30, 2003
INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:

Net investment income	$	4,057,186		$	1,483,664		$	296,106		$	159,650		$	2,258,812		$	1,765,404
Net realized gain (loss)		18,339,983			47,637			699,258			(12,645,323	)		(112,901	)		(2,264,332	)
Net change in unrealized appreciation (depreciation)		12,741,111			(9,234,438	)		27,215,745			(28,561,389	)		38,413,496			(22,809,651	)

Net increase (decrease) in net assets resulting from operations		35,138,280			(7,703,137	)		28,211,109			(41,047,062	)		40,559,407			(23,308,579	)

DISTRIBUTIONS TO SHAREHOLDERS:

From net investment income		(3,869,236	)		(1,321,199	)		(296,106	)		(159,650	)		(2,371,901	)		(1,581,472	)
Return of capital		—			—			(8,787	)		(17,563	)		—			—

Total distributions to shareholders		(3,869,236	)		(1,321,199	)		(304,893	)		(177,213	)		(2,371,901	)		(1,581,472	)

CAPITAL SHARE TRANSACTIONS:

Proceeds from shares sold		275,384,412			124,678,747			132,602,989			257,549,911			170,050,256			67,215,486
Cost of shares redeemed		(89,594,002	)		(73,863,854	)		(70,898,261	)		(215,911,491	)		(6,586,545	)		(69,380,963	)

Net increase (decrease) in net assets from capital share transactions		185,790,410			50,814,893			61,704,728			41,638,420			163,463,711			(2,165,477	)

INCREASE (DECREASE) IN NET ASSETS		217,059,454			41,790,557			89,610,944			414,145			201,651,217			(27,055,528	)

NET ASSETS:

Beginning of year		99,779,304			57,988,747			129,775,842			129,361,697			87,918,241			114,973,769

End of year	$	316,838,758		$	99,779,304		$	219,386,786		$	129,775,842		$	289,569,458		$	87,918,241

Undistributed net investment income included in net assets at end of year	$	410,552		$	222,602		$	—		$	—		$	230,289		$	343,378

SHARES ISSUED AND REDEEMED:

Shares sold		6,650,000			3,550,000			2,500,000			5,350,000			3,500,000			1,500,000
Shares redeemed		(2,050,000	)		(2,100,000	)		(1,400,000	)		(4,850,000	)		(150,000	)		(1,700,000	)

Net increase (decrease) in shares outstanding		4,600,000			1,450,000			1,100,000			500,000			3,350,000			(200,000	)

See notes to financial statements.


64		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST


	iShares Dow Jones U.S. Financial Sector Index Fund						iShares Dow Jones U.S. Industrial Sector Index Fund						iShares Dow Jones U.S. Financial Services Index Fund
	For the year ended April 30, 2004			For the year ended April 30, 2003			For the year ended April 30, 2004			For the year ended April 30, 2003			For the year ended April 30, 2004			For the year ended April 30, 2003
INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:

Net investment income	$	4,332,816		$	2,499,345		$	1,277,272		$	730,706		$	2,175,468		$	1,059,977
Net realized gain (loss)		(148,655	)		393,557			10,965,150			(2,021,984	)		10,113,638			(964,721	)
Net change in unrealized appreciation (depreciation)		32,124,797			(12,735,690	)		15,562,180			(9,582,522	)		5,539,065			(291,999	)

Net increase (decrease) in net assets resulting from operations		36,308,958			(9,842,788	)		27,804,602			(10,873,800	)		17,828,171			(196,743	)

DISTRIBUTIONS TO SHAREHOLDERS:

From net investment income		(3,894,471	)		(2,355,203	)		(1,283,480	)		(724,498	)		(2,073,172	)		(945,070	)
Return of capital		—			—			(11,324	)		—			—			—

Total distributions to shareholders		(3,894,471	)		(2,355,203	)		(1,294,804	)		(724,498	)		(2,073,172	)		(945,070	)

CAPITAL SHARE TRANSACTIONS:

Proceeds from shares sold		81,532,850			59,776,259			111,708,255			34,729,899			45,865,363			75,007,718
Cost of shares redeemed		(4,069,289	)		(21,171,250	)		(61,884,407	)		(26,715,462	)		(67,906,919	)		(17,000,726	)

Net increase (decrease) in net assets from capital share transactions		77,463,561			38,605,009			49,823,848			8,014,437			(22,041,556	)		58,006,992

INCREASE (DECREASE) IN NET ASSETS		109,878,048			26,407,018			76,333,646			(3,583,861	)		(6,286,557	)		56,865,179

NET ASSETS:

Beginning of year		148,202,669			121,795,651			81,050,526			84,634,387			116,957,425			60,092,246

End of year	$	258,080,717		$	148,202,669		$	157,384,172		$	81,050,526		$	110,670,868		$	116,957,425

Undistributed net investment income included in net assets at end of year	$	597,453		$	320,833		$	—		$	6,208		$	324,275		$	221,979

SHARES ISSUED AND REDEEMED:

Shares sold		950,000			850,000			2,450,000			900,000			450,000			950,000
Shares redeemed		(50,000	)		(300,000	)		(1,300,000	)		(650,000	)		(750,000	)		(200,000	)

Net increase (decrease) in shares outstanding		900,000			550,000			1,150,000			250,000			(300,000	)		750,000

See notes to financial statements.


FINANCIAL STATEMENTS		65

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST


	iShares Dow Jones U.S. Real Estate Index Fund						iShares Cohen & Steers Realty Majors Index Fund
	For the year ended April 30, 2004			For the year ended April 30, 2003			For the year ended April 30, 2004			For the year ended April 30, 2003
INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:

Net investment income	$	19,345,350		$	9,086,000		$	28,273,224		$	10,744,683
Net realized gain (loss)		54,520,373			(5,335,054	)		25,127,626			334,129
Net change in unrealized appreciation (depreciation)		(35,483,332	)		(6,654,575	)		14,250,762			(2,468,883	)

Net increase (decrease) in net assets resulting from operations		38,382,391			(2,903,629	)		67,651,612			8,609,929

Undistributed net investment income included in the price of capital shares issued or redeemed		2,549,000			378,000			4,088,000			2,950,500

DISTRIBUTIONS TO SHAREHOLDERS:

From net investment income		(13,871,295	)		(7,002,627	)		(20,735,219	)		(8,993,012	)
Return of capital		(6,619,829	)		(1,573,981	)		(8,685,946	)		(2,864,361	)

Total distributions to shareholders		(20,491,124	)		(8,576,608	)		(29,421,165	)		(11,857,373	)

CAPITAL SHARE TRANSACTIONS:

Proceeds from shares sold		697,487,703			247,295,083			537,632,626			313,456,287
Cost of shares redeemed		(494,041,553	)		(147,895,080	)		(123,236,692	)		(135,111,372	)

Net increase in net assets from capital share transactions		203,446,150			99,400,003			414,395,934			178,344,915

INCREASE IN NET ASSETS		223,886,417			88,297,766			456,714,381			178,047,971

NET ASSETS:

Beginning of year		195,202,745			106,904,979			267,731,855			89,683,884

End of year	$	419,089,162		$	195,202,745		$	724,446,236		$	267,731,855

Undistributed net investment income included in net assets at end of year	$	290,001		$	654,592		$	1,629,733		$	442,680

SHARES ISSUED AND REDEEMED:

Shares sold		7,150,000			3,100,000			5,250,000			3,800,000
Shares redeemed		(5,100,000	)		(1,900,000	)		(1,200,000	)		(1,650,000	)

Net increase in shares outstanding		2,050,000			1,200,000			4,050,000			2,150,000

See notes to financial statements.


66		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares Dow Jones U.S. Basic Materials Sector Index Fund
	Year ended Apr. 30, 2004			Year ended Apr. 30, 2003			Year ended Apr. 30, 2002			Period From Jun. 12, 2000¹ to Apr. 30, 2001
Net asset value, beginning of period	$	34.41		$	39.99		$	39.24		$	36.04

Income from investment operations:

Net investment income		0.66			0.70			0.55			0.55
Net realized and unrealized gain (loss)		7.86			(5.62	)		0.73			3.25

Total from investment operations		8.52			(4.92	)		1.28			3.80

Less distributions from:

Net investment income		(0.68	)		(0.66	)		(0.53	)		(0.53	)
Net realized gain		—			—			—			(0.07	)

Total distributions		(0.68	)		(0.66	)		(0.53	)		(0.60	)

Net asset value, end of period	$	42.25		$	34.41		$	39.99		$	39.24

Total return		24.85	%		(12.30	)%		3.38	%		10.80	%²

Ratios/Supplemental data:

Net assets, end of period (000s)	$	316,839		$	99,779		$	57,989		$	9,811
Ratio of expenses to average net assets³		0.60	%		0.60	%		0.60	%		0.60	%
Ratio of net investment income to average net assets³		1.70	%		2.10	%		1.42	%		1.77	%
Portfolio turnover rate⁴		7	%		6	%		9	%		16	%

Commencement of operations.

Not annualized.

Annualized for periods of less than one year.

⁴

Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.


FINANCIAL STATEMENTS		67

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund
	Year ended Apr. 30, 2004			Year ended Apr. 30, 2003			Year ended Apr. 30, 2002			Period From Jun. 12, 2000¹ to Apr. 30, 2001
Net asset value, beginning of Period	$	45.54		$	55.05		$	59.88		$	59.63

Income from investment operations:

Net investment income		0.10			0.05			0.02			0.09
Net realized and unrealized gain (loss)		10.00			(9.50	)		(4.80	)		0.45

Total from investment operations		10.10			(9.45	)		(4.78	)		0.54

Less distributions from:

Net investment income		(0.10	)		(0.05	)		—			(0.10	)
Net realized gain		—			—			—			(0.19	)
Return of capital		(0.00	)⁵		(0.01	)		(0.05	)		—

Total distributions		(0.10	)		(0.06	)		(0.05	)		(0.29	)

Net asset value, end of period	$	55.54		$	45.54		$	55.05		$	59.88

Total return		22.21	%		(17.17	)%		(7.98	)%		0.98	%²

Ratios/supplemental data:

Net assets, end of period (000s)	$	219,387		$	129,776		$	129,362		$	29,940
Ratio of expenses to average net assets³		0.60	%		0.60	%		0.60	%		0.60	%
Ratio of net investment income (loss) to average net assets³		0.19	%		0.11	%		(0.05	)%		0.16	%
Portfolio turnover rate⁴		6	%		10	%		4	%		25	%

Commencement of operations.

Not annualized.

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.


68		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund
	Year ended Apr. 30, 2004			Year ended Apr. 30, 2003			Year ended Apr. 30, 2002			Period From Jun. 12, 2000¹ to Apr. 30, 2001
Net asset value, beginning of period	$	39.96		$	47.91		$	40.55		$	40.83

Income from investment operations:

Net investment income		0.65			0.69			0.49			0.42
Net realized and unrealized gain (loss)		12.32			(8.04	)		7.41			(0.39	)

Total from investment operations		12.97			(7.35	)		7.90			0.03

Less distributions from:

Net investment income		(0.76	)		(0.60	)		(0.54	)		(0.31	)

Total distributions		(0.76	)		(0.60	)		(0.54	)		(0.31	)

Net asset value, end of period	$	52.17		$	39.96		$	47.91		$	40.55

Total return		32.73	%		(15.40	)%		19.65	%		0.06	%²

Ratios/Supplemental data:

Net assets, end of period (000s)	$	289,569		$	87,918		$	114,974		$	14,192
Ratio of expenses to average net assets³		0.60	%		0.60	%		0.60	%		0.60	%
Ratio of net investment income to average net assets³		1.53	%		1.57	%		1.46	%		1.21	%
Portfolio turnover rate⁴		5	%		28	%		8	%		38	%

Commencement of operations.

Not annualized.

Annualized for periods of less than one year.

⁴

Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.


FINANCIAL HIGHLIGHTS		69

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares Dow Jones U.S. Financial Sector Index Fund
	Year ended Apr. 30, 2004			Year ended Apr. 30, 2003			Year ended Apr. 30, 2002			Period From May 22, 2000¹to Apr. 30, 2001
Net asset value, beginning of period	$	72.29		$	81.20		$	81.78		$	71.80

Income from investment operations:

Net investment income		1.65			1.31			1.11			1.77
Net realized and unrealized gain (loss)		15.09			(8.94	)		(0.61	)		10.17

Total from investment operations		16.74			(7.63	)		0.50			11.94

Less distributions from:

Net investment income		(1.55	)		(1.28	)		(1.08	)		(1.57	)
Net realized gain		—			—			—			(0.39	)

Total distributions		(1.55	)		(1.28	)		(1.08	)		(1.96	)

Net asset value, end of period	$	87.48		$	72.29		$	81.20		$	81.78

Total return		23.29	%		(9.33	)%		0.66	%		16.69	%²

Ratios/Supplemental data:

Net assets, end of period (000s)	$	258,081		$	148,203		$	121,796		$	57,249
Ratio of expenses to average net assets³		0.60	%		0.60	%		0.60	%		0.60	%
Ratio of net investment income to average net assets³		2.08	%		1.94	%		1.49	%		1.46	%
Portfolio turnover rate⁴		7	%		28	%		4	%		11	%

Commencement of operations.

Not annualized.

Annualized for periods of less than one year.

⁴

Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.


70		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares Dow Jones U.S. Industrial Sector Index Fund
	Year ended Apr. 30, 2004			Year ended Apr. 30, 2003			Year ended Apr. 30, 2002			Period From Jun. 12, 2000¹ to Apr. 30, 2001
Net asset value, beginning of period	$	38.60		$	45.75		$	53.99		$	58.11

Income from investment operations:

Net investment income		0.39			0.38			0.29			0.22
Net realized and unrealized gain (loss)		9.84			(7.15	)		(8.23	)		(3.98	)

Total from investment operations		10.23			(6.77	)		(7.94	)		(3.76	)

Less distributions from:

Net investment income		(0.40	)		(0.38	)		(0.30	)		(0.23	)
Net realized gain		—			—			—			(0.13	)
Return of capital		(0.00	)⁵		—			—			—

Total distributions		(0.40	)		(0.38	)		(0.30	)		(0.36	)

Net asset value, end of period	$	48.43		$	38.60		$	45.75		$	53.99

Total return		26.56	%		(14.75	)%		(14.72	)%		(6.46	)%²

Ratios/Supplemental data:

Net assets, end of period (000s)	$	157,384		$	81,051		$	84,634		$	45,891
Ratio of expenses to average net assets³		0.60	%		0.60	%		0.60	%		0.60	%
Ratio of net investment income to average net assets³		0.94	%		1.03	%		0.56	%		0.44	%
Portfolio turnover rate⁴		3	%		12	%		27	%		23	%

Commencement of operations.

Not annualized.

Annualized for periods of less than one year.

⁴

Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

⁵

Rounds to less than $0.01.

See notes to financial statements.


FINANCIAL HIGHLIGHTS		71

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares Dow Jones U.S. Financial Services Index Fund
	Year ended Apr. 30, 2004			Year ended Apr. 30, 2003			Year ended Apr. 30, 2002			Period From Jun. 12, 2000¹ to Apr. 30, 2001
Net asset value, beginning of period	$	83.54		$	92.45		$	93.67		$	85.58

Income from investment operations:

Net investment income		2.12			1.41			1.22			1.29
Net realized and unrealized gain (loss)		16.93			(8.90	)		(1.26	)		8.10

Total from investment operations		19.05			(7.49	)		(0.04	)		9.39

Less distributions from:

Net investment income		(1.98	)		(1.42	)		(1.18	)		(1.17	)
Net realized gain		—			—			—			(0.13	)

Total distributions		(1.98	)		(1.42	)		(1.18	)		(1.30	)

Net asset value, end of period	$	100.61		$	83.54		$	92.45		$	93.67

Total return		22.91	%		(8.02	)%		0.00	%⁵		11.03	%²

Ratios/Supplemental data:

Net assets, end of period (000s)	$	110,671		$	116,957		$	60,092		$	37,467
Ratio of expenses to average net assets³		0.60	%		0.60	%		0.60	%		0.60	%
Ratio of net investment income to average net assets³		2.08	%		1.90	%		1.46	%		1.33	%
Portfolio turnover rate⁴		7	%		41	%		3	%		5	%

Commencement of operations.

Not annualized.

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.


72		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares Dow Jones U.S. Real Estate Index Fund
	Year ended Apr. 30, 2004			Year ended Apr. 30, 2003			Year ended Apr. 30, 2002			Period from Jun. 12, 2000¹ to Apr. 30, 2001
Net asset value, beginning of period	$	79.67		$	85.52		$	77.21		$	68.97

Income from investment operations:

Net investment income		4.98			5.04			4.56			3.51
Net realized and unrealized gain (loss)		13.84			(6.01	)		8.71			7.51

Total from investment operations		18.82			(0.97	)		13.27			11.02

Less distributions from:

Net investment income		(3.63	)		(3.98	)		(4.54	)		(2.64	)
Net realized gain		—			—			—			(0.14	)
Return of capital		(1.73	)		(0.90	)		(0.42	)		—

Total distributions		(5.36	)		(4.88	)		(4.96	)		(2.78	)

Net asset value, end of period	$	93.13		$	79.67		$	85.52		$	77.21

Total return		23.66	%		(0.98	)%		17.83	%		16.32	%²

Ratios/supplemental data:

Net assets, end of period (000s)	$	419,089		$	195,203		$	106,905		$	54,049
Ratio of expenses to average net assets³		0.60	%		0.60	%		0.60	%		0.60	%
Ratio of net investment income to average net assets³		5.58	%		6.40	%		5.97	%		6.37	%
Portfolio turnover rate⁴		20	%		21	%		10	%		30	%

Commencement of operations.

Not annualized.

Annualized for periods of less than one year.

⁴

Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.


FINANCIAL HIGHLIGHTS		73

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares Cohen & Steers Realty Majors Index Fund
	Year ended Apr. 30, 2004			Year ended Apr. 30, 2003			Year ended Apr. 30, 2002			Period from Jan. 29, 2001¹ to Apr. 30, 2001
Net asset value, beginning of period	$	84.99		$	89.68		$	80.09		$	79.86

Income from investment operations:

Net investment income		5.26			4.59			4.79			1.11
Net realized and unrealized gain (loss)		15.87			(4.32	)		9.98			(0.39	)

Total from investment operations		21.13			0.27			14.77			0.72

Less distributions from:

Net investment income		(3.88	)		(3.76	)		(4.77	)		(0.49	)
Return of capital		(1.62	)		(1.20	)		(0.41	)		—

Total distributions		(5.50	)		(4.96	)		(5.18	)		(0.49	)

Net asset value, end of period	$	100.62		$	84.99		$	89.68		$	80.09

Total return		24.97	%		0.46	%		19.05	%		0.91	%²

Ratios/supplemental data:

Net assets, end of period (000s)	$	724,446		$	267,732		$	89,684		$	40,047
Ratio of expenses to average net assets³		0.35	%		0.35	%⁵		0.35	%		0.35	%
Ratio of net investment income to average net assets³		5.28	%		6.17	%⁵		5.80	%		6.01	%
Portfolio turnover rate⁴		15	%		13	%		15	%		2	%

Commencement of operations.

Not annualized.

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

Includes voluntary reimbursement from the advisor. If such reimbursement had not been made, the ratios of expenses to average net assets and net investment income to average net assets would have been 0.36% and 6.16%, respectively.

See notes to financial statements.


74		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements

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 April 30, 2004, the Trust offered 63 investment portfolios or funds.

These financial statements relate only to the iShares Dow Jones U.S. Basic Materials Sector, iShares Dow Jones U.S. Consumer Cyclical Sector, iShares Dow Jones U.S. Consumer Non-Cyclical Sector, iShares Dow Jones U.S. Financial Sector, iShares Dow Jones U.S. Industrial Sector, iShares Dow Jones U.S. Financial Services, iShares Dow Jones U.S. Real Estate and the iShares Cohen & Steers Realty Majors 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. 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 affecting these companies.

Under the Trust’s organizational documents, the Funds’ 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.

The following significant accounting policies are consistently followed by the Trust in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for investment companies. The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions. Actual results could differ from those estimates.

SECURITY VALUATION

Equity securities are valued at the last sales price on the primary securities exchange or national securities market on which such securities are traded. Securities 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 (the “Board”).

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.

EQUALIZATION

The iShares Dow Jones U.S. Real Estate Index Fund and the iShares Cohen & Steers Realty Majors Index Fund use the accounting practice of equalization. This accounting method is used to keep the continuing shareholders’ per share equity in undistributed net investment income


NOTES TO THE FINANCIAL STATEMENTS		75

Notes to the Financial Statements (Continued)

iSHARES^® TRUST

from being affected by the continuous sales and redemptions of capital stock. Equalization is calculated on a per share basis whereby a portion of the proceeds from sales and costs of repurchases of capital stock is applied to undistributed net investment income. The amounts of equalization are disclosed in the Statements of Changes in Net Assets as undistributed net investment income included in the price of capital shares issued or redeemed.

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 April 30, 2004, the tax year-end of the Funds, the components of distributable earnings (accumulated losses) on a tax basis were as follows:


iShares Index Fund	Undistributed Ordinary Income		Unrealized Appreciation (Depreciation)			Capital and Other Losses			Total Distributable Earnings (Accumulated Losses)
Dow Jones U.S. Basic Materials Sector	$	410,552	$	858,481		$	(861,374	)	$	407,659
Dow Jones U.S. Consumer Cyclical Sector		—		(5,320,369	)		(1,276,636	)		(6,597,005	)
Dow Jones U.S. Consumer Non-Cyclical Sector		217,484		20,519,852			(1,648,961	)		19,088,375
Dow Jones U.S. Financial Sector		421,695		21,527,099			(2,740,145	)		19,208,649
Dow Jones U.S. Industrial Sector		—		(5,221,438	)		(7,351,405	)		(12,572,843	)
Dow Jones U.S. Financial Services		324,275		3,453,422			(1,504,676	)		2,273,021
Dow Jones U.S. Real Estate		—		(39,922,394	)		(1,023,733	)		(40,946,127	)
Cohen & Steers Realty Majors		—		10,934,658			(173,771	)		10,760,887

The differences between the components of distributable earnings (accumulated losses) on a tax basis and the amounts reflected in the Statements of Assets and Liabilities are primarily due to differing treatments of wash sales and dividends from real estate investment trusts.

For the years ended April 30, 2004 and April 30, 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 year ended April 30, 2004.


76		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Continued)

iSHARES^® TRUST

From November 1, 2003 to April 30, 2004, certain Funds incurred net realized capital losses. As permitted by tax regulations, these Funds have elected to defer these losses and treat them as arising in the year ending April 30, 2005, as follows:


iShares Index Fund	Deferred Net Realized Capital Losses
Dow Jones U.S. Basic Materials Sector	$	105,997
Dow Jones U.S. Consumer Cyclical Sector		38,335
Dow Jones U.S. Industrial Sector		3,547,732
Dow Jones U.S. Financial Services		6,748
Cohen & Steers Realty Majors		173,771

The Funds had tax basis net capital loss carryforwards at April 30, 2004, the tax year-end of the Funds, as follows:


iShares Index Fund	Expiring 2009		Expiring 2010		Expiring 2011		Expiring 2012		Total
Dow Jones U.S. Basic Materials Sector	$	—	$	67,181	$	474,468	$	213,728	$	755,377
Dow Jones U.S. Consumer Cyclical Sector		—		214,348		640,467		383,486		1,238,301
Dow Jones U.S. Consumer Non-Cyclical Sector		12,169		410,794		786,981		439,017		1,648,961
Dow Jones U.S. Financial Sector		—		146,667		1,198,744		1,394,734		2,740,145
Dow Jones U.S. Industrial Sector		—		1,834,072		1,969,601		—		3,803,673
Dow Jones U.S. Financial Services		—		154,770		506,488		836,670		1,497,928
Dow Jones U.S. Real Estate		—		—		818,229		205,504		1,023,733

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 year ended April 30, 2004, the Funds realized net capital gains or losses resulting from in-kind redemptions of large blocks of 50,000 or more shares 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 year ended April 30, 2004 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 an investment by the Fund, 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 April 30, 2004; however, cash collateral for securities on loan was invested in repurchase agreements at April 30, 2004. For further information, see Note 5, below.


NOTES TO THE FINANCIAL STATEMENTS		77

Notes to the Financial Statements (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 execution 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 advisory services to each Fund, BGFA is entitled to an annual advisory fee based on the average daily net assets of each Fund as follows:


iShares Index Fund	Advisory Fee
Dow Jones U.S. Basic Materials Sector	0.60	%
Dow Jones U.S. Consumer Cyclical Sector	0.60
Dow Jones U.S. Consumer Non-Cyclical Sector	0.60
Dow Jones U.S. Financial Sector	0.60
Dow Jones U.S. Industrial Sector	0.60
Dow Jones U.S. Financial Services	0.60
Dow Jones U.S. Real Estate	0.60
Cohen & Steers Realty Majors	0.35

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 as fees, a share of the income earned on investment of the cash collateral received for the loan of securities. For the year ended April 30, 2004, BGI earned securities lending agent fees as follows:


iShares Index Fund	Securities Lending Agent Fees
Dow Jones U.S. Basic Materials Sector	$	18,896
Dow Jones U.S. Consumer Cyclical Sector		14,783
Dow Jones U.S. Consumer Non-Clyclical Sector		13,415
Dow Jones U.S. Financial Sector		14,727
Dow Jones U.S. Industrial Sector		9,309
Dow Jones U.S. Financial Services		7,299
Dow Jones U.S Real Estate		36,449
Cohen & Steers Realty Majors		43,437

SEI Investments Distribution Company (“SEI”) serves as each Fund’s underwriter and distributor of the shares of each Fund, pursuant to a Distribution Agreement with the Trust. SEI does not receive a fee from the Funds for its distribution services.

Barclays Global Investors Services (“BGIS”), a subsidiary of BGI, may serve as a broker-dealer for the Funds. For the year ended April 30, 2004, BGIS did not receive any brokerage commissions from the Funds.

Pursuant to Rule 17a-7 under the 1940 Act, the Funds executed cross trades for the year ended April 30, 2004. 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 first eleven months of the fiscal year 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 last month of the fiscal year.


78		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Continued)

iSHARES^® TRUST

Pursuant to an exemptive order issued by the U.S. 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 invest substantially all of their assets in the Money Market Master Portfolio and Prime Money Market Master Portfolio (collectively, the “Master Portfolios”), respectively, which are managed by BGFA, the Funds’ investment advisor. The IMMF and PMMF are open-end money market funds available to institutional and accredited 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.

Transactions in shares of issuers affiliated with BGFA for the year ended April 30, 2004, including interest income, were as follows:


iShares Index Fund and Name of Issuer	Number of Shares Held Beginning of Year (in 000s)	Gross Additions (in 000s)	Gross Reductions (in 000s)	Number of Shares Held End of Year (in 000s)	Value at End of Year		Interest Income
Dow Jones U.S. Basic Materials Sector
IMMF	50	38,075	37,866	259	$	258,952	$	1,822

Dow Jones U.S. Consumer Cyclical Sector

IMMF	85	14,644	14,586	143		142,967		760

Dow Jones U.S. Consumer Non-cyclical Sector

IMMF	60	18,733	18,725	68		68,072		898

Dow Jones U.S. Financial Sector

IMMF	145	38,004	37,872	277		276,920		1,751

Dow Jones U.S. Industrial Sector

IMMF	22	14,462	14,433	51		50,841		737

Dow Jones U.S. Financial Services

IMMF	118	21,698	21,736	80		80,450		1,001

Dow Jones U.S. Real Estate

IMMF	25	111,009	110,536	498		497,711		4,993

Cohen & Steers Realty Majors

IMMF	43	157,989	157,439	593		593,157		7,157

Due to the nature of the structure of the joint account used for the investment of the collateral for securities lending, the transactions reported for the IMMF do not include activity related to the Funds’ holding of this issuer for securities lending purposes. In addition to the transactions disclosed above, the Funds also invested in the PMMF for purposes of investing collateral from securities lending.

As of April 30, 2004, certain trustees and officers of the Trust are also officers of BGI.


NOTES TO THE FINANCIAL STATEMENTS		79

Notes to the Financial Statements (Continued)

iSHARES^® TRUST

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended April 30, 2004, were as follows:


iShares Index Fund	Purchases		Sales
Dow Jones U.S. Basic Materials Sector	$	17,672,821	$	17,197,859
Dow Jones U.S. Consumer Cyclical Sector		9,040,863		9,028,553
Dow Jones U.S. Consumer Non-Cyclical Sector		7,409,190		7,440,117
Dow Jones U.S. Financial Sector		13,729,277		13,519,228
Dow Jones U.S. Industrial Sector		3,866,892		3,839,850
Dow Jones U.S. Financial Services		6,934,813		6,913,153
Dow Jones U.S. Real Estate		69,130,227		70,969,807
Cohen & Steers Realty Majors		81,501,698		85,465,289

In-kind transactions (see Note 4) for the year ended April 30, 2004, were as follows:


iShares Index Fund	In-Kind Purchases		In-Kind Sales
Dow Jones U.S. Basic Materials Sector	$	275,002,424	$	89,514,618
Dow Jones U.S. Consumer Cyclical Sector		132,529,197		70,857,599
Dow Jones U.S. Consumer Non-Cyclical Sector		170,160,344		6,837,846
Dow Jones U.S. Financial Sector		81,442,355		4,066,855
Dow Jones U.S. Industrial Sector		111,641,619		61,796,906
Dow Jones U.S. Financial Services		45,781,385		67,806,384
Dow Jones U.S. Real Estate		712,110,130		505,895,466
Cohen & Steers Realty Majors		575,725,474		155,233,239

At April 30, 2004, the aggregate unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:


iShares Index Fund	Tax Cost		Unrealized Appreciation		Unrealized Depreciation			Net Unrealized Appreciation (Depreciation)
Dow Jones U.S. Basic Materials Sector	$	339,096,474	$	11,796,843	$	(10,938,362	)	$	858,481
Dow Jones U.S. Consumer Cyclical Sector		246,022,491		10,337,170		(15,657,539	)		(5,320,369	)
Dow Jones U.S. Consumer Non-Cyclical Sector		290,305,125		23,681,123		(3,161,271	)		20,519,852
Dow Jones U.S. Financial Sector		254,545,087		25,664,789		(4,137,690	)		21,527,099
Dow Jones U.S. Industrial Sector		175,938,720		7,181,567		(12,403,005	)		(5,221,438	)
Dow Jones U.S. Financial Services		114,619,626		6,102,047		(2,648,625	)		3,453,422
Dow Jones U.S. Real Estate		511,765,773		—		(39,922,394	)		(39,922,394	)
Cohen & Steers Realty Majors		768,985,789		21,233,182		(10,298,524	)		10,934,658


80		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Continued)

iSHARES^® TRUST

4. CAPITAL SHARE TRANSACTIONS

At April 30, 2004, there were an unlimited number of no par value capital shares of beneficial interest authorized. Capital shares are issued and redeemed by each Fund only in Creation Units or multiples thereof. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in capital shares 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.

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, which consists 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 April 30, 2004, the Funds had loaned securities which were collateralized by cash. The cash collateral received was invested in a joint account with other funds managed by BGFA, which invests in securities with remaining maturities of 397 days or less, repurchase agreements and money market mutual funds including money market funds managed by BGFA. Repurchase agreements held in the joint account are fully collateralized by U.S. Government securities. 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 April 30, 2004 and the value of the related collateral are disclosed in the Statements of Assets and Liabilities. Securities lending income is presented net of broker rebates and fees paid to BGI.


NOTES TO THE FINANCIAL STATEMENTS		81

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees of

iShares Trust:

In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the funds comprising the iShares Dow Jones Index Funds and the iShares Cohen & Steers Realty Majors Index Fund (the “Funds”), as listed on the table of contents, at April 30, 2004, the results of each of their operations for the year then ended, and the changes in each of their net assets and financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards of the Public Company Accounting Oversight Board (United States), which require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at April 30, 2004 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

June 21, 2004


82		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Tax Information (Unaudited)

iSHARES^® TRUST

For corporate shareholders, a portion of the income dividends paid by the Funds during the year ended April 30, 2004 qualified for the dividends-received deduction, as follows:


iShares Index Fund	Dividends- Received Deduction
Dow Jones U.S. Basic Materials Sector	100.00	%
Dow Jones U.S. Consumer Cyclical Sector	100.00
Dow Jones U.S. Consumer Non-Cyclical Sector	98.76
Dow Jones U.S. Financial Sector	98.48
Dow Jones U.S. Industrial Sector	100.00
Dow Jones U.S. Financial Services	100.00

Under Section 854(b)(2) of the Internal Revenue Code, the Funds hereby designate the following maximum amounts as qualified dividends for purposes of the maximum rate under Section 1(h)(11) of the Internal Revenue Code for the fiscal year ended April 30, 2004:


iShares Index Fund	Amount
Dow Jones U.S. Basic Materials Sector	$	4,057,186
Dow Jones U.S. Consumer Cyclical Sector		296,106
Dow Jones U.S. Consumer Non-Cyclical Sector		2,246,007
Dow Jones U.S. Financial Sector		4,068,177
Dow Jones U.S. Industrial Sector		1,277,272
Dow Jones U.S. Financial Services		2,175,468

In January 2005, shareholders will receive Form 1099-DIV which will include their share of qualified dividends distributed during the calendar year 2004. Shareholders are advised to check with their tax advisors for information on the treatment of these amounts on their individual income tax returns.


TAX INFORMATION		83

Supplemental Information (Unaudited)

iSHARES^® TRUST

The tables that follow present information about the differences between the daily market price on secondary markets for shares of an iShares Fund and that Fund’s net asset value. Net asset value, or “NAV”, is the price per share at which each Fund issues and redeems shares. It is calculated in accordance with the standard formula for valuing mutual fund shares. The “Market Price” of each iShares Fund generally is determined using the midpoint between the highest bid and the lowest offer on the stock exchange on which the shares of such Fund is listed for trading, as of the time that the Fund’s NAV is calculated. Each Fund’s Market Price may be at, above or below its NAV. The NAV of each Fund will fluctuate with changes in the market value of its portfolio holdings. The Market Price of each Fund will fluctuate in accordance with changes in its NAV, as well as market supply and demand.

Premiums or discounts are the differences (expressed as a percentage) between the NAV and Market Price of a Fund on a given day, generally at the time NAV is calculated. A premium is the amount that a Fund is trading above the reported NAV, expressed as a percentage of the NAV. A discount is the amount that a Fund is trading below the reported NAV, expressed as a percentage of the NAV.

The following information shows the frequency distributions of premiums and discounts for each of the iShares Funds included in this report. The information shown for each Fund is for each full calendar quarter completed after the inception date of such Fund through March 31, 2004, the date of the most recent calendar quarter end. The specific periods covered for each Fund are disclosed in the table for such Fund.

Each line in the table shows the number of trading days in which the iShares Fund traded within the premium/discount range indicated. The number of trading days in each premium/discount range is also shown as a percentage of the total number of trading days in the period covered by each table. All data presented here represents past performance, which cannot be used to predict future results.

iShares Dow Jones U.S. Basic Materials Sector Index Fund

Period Covered: July 1, 2000 through March 31, 2004


Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 1.0%	2	0.21	%
Greater than 0.5% and Less than 1.0%	19	2.03
Between 0.5% and – 0.5%	905	96.59
Less than – 0.5% and Greater than –1.0%	5	0.53
Less than –1.0%	6	0.64

	937	100.00	%

iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund

Period Covered: July 1, 2000 through March 31, 2004


Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 0.5%	9	0.96	%
Between 0.5% and – 0.5%	920	98.19
Less than – 0.5%	8	0.85

	937	100.00	%


84		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited) (Continued)

iSHARES^® TRUST

iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund

Period Covered: July 1, 2000 through March 31, 2004


Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 0.5%	9	0.96	%
Between 0.5% and – 0.5%	923	98.51
Less than – 0.5%	5	0.53

	937	100.00	%

iShares Dow Jones U.S. Financial Sector Index Fund

Period Covered: July 1, 2000 through March 31, 2004


Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 0.5%	5	0.53	%
Between 0.5% and – 0.5%	920	98.19
Less than – 0.5% and Greater than – 1.0%	8	0.85
Less than – 1.0%	4	0.43

	937	100.00	%

iShares Dow Jones U.S. Industrial Sector Index Fund

Period Covered: July 1, 2000 through March 31, 2004


Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 0.5%	6	0.64	%
Between 0.5% and – 0.5%	920	98.18
Less than – 0.5% and Greater than – 1.0%	7	0.75
Less than – 1.0%	4	0.43

	937	100.00	%

iShares Dow Jones U.S. Financial Services Index Fund

Period Covered: July 1, 2000 through March 31, 2004


Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 0.5%	6	0.64	%
Between 0.5% and – 0.5%	921	98.29
Less than – 0.5% and Greater than – 1.0%	10	1.07

	937	100.00	%


SUPPLEMENTAL INFORMATION		85

Supplemental Information (Unaudited) (Continued)

iSHARES^® TRUST

iShares Dow Jones U.S. Real Estate Index Fund

Period Covered: July 1, 2000 through March 31, 2004


Premium/Discount Range	Number of Days	Percentage of Total Days
Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 0.5%	5	0.53	%
Between 0.5% and – 0.5%	925	98.72
Less than – 0.5%	7	0.75

	937	100.00	%

iShares Cohen & Steers Realty Majors Index Fund

Period Covered: April 1, 2001 through March 31, 2004


Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 0.5%	5	0.67	%
Between 0.5% and – 0.5%	739	98.66
Less than – 0.5%	5	0.67

	749	100.00	%


86		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Trustee Information (Unaudited)

iSHARES^® TRUST

The Board of Trustees has responsibility for the overall management and operations of the Trust, including general supervision of the duties performed by BGFA and other service providers. Each Trustee serves until his or her successor is duly elected or appointed and qualified.

iShares Trust, iShares, Inc., Barclays Global Investors Funds and Master Investment Portfolio are considered to be members of the same fund complex, as defined in Form N-1A under the 1940 Act. Each Trustee of iShares Trust also serves as a Director for iShares, Inc. and oversees 96 portfolios within the fund complex. In addition, Lee T. Kranefuss and Richard K. Lyons each serves as a Trustee for Barclays Global Investors Funds and Master Investment Portfolio and oversees 119 portfolios within the fund complex.

Unless otherwise noted in the tables below, the address for each Trustee is 45 Fremont Street, San Francisco, California 94105. Additional information about the Funds’ Trustees may be found in the Funds’ Statement of Additional Information, which is available without charge upon request by calling toll-free 1-800-474-2737.

Interested Trustees


Name and Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
*Lee T. Kranefuss (42)	Trustee, Chairman, and President (since June 18, 2003)	Chief Executive Officer of Intermediary Investor and Exchange Traded Products Business of BGI (since 2003); Chief Executive Officer of the individual Investor Business of BGI (1997-2003).	Director (since June 18, 2003) of iShares, Inc.; Board of Trustees for Barclays Global Investors Funds and Master Investment Portfolio (since 2001).

*Nathan Most (90)	Trustee (since December 16, 1999)	Consultant to BGI (1998-2002), American Stock Exchange (1996-2000) and the Hong Kong Stock Exchange (1998 to present); Consultant to the Amsterdam Stock Exchange (1997-1998);Consultant to the Pacific Stock Exchange (1997-1998).	Director (since 1996) and President (1996-2002) of iShares, Inc.

*John E. Martinez (42)	Trustee (since December 5, 2003)	Co-CEO of Global Index and Markets Group of BGI (2001-2003); Chairman of Barclays Global Investors Services (2000-2003); CEO of Capital Markets Group of BGI (1996-2001).	Director (since December 5, 2003) of iShares, Inc.; Director (1998-2003) of Barclays Global Investors UK Holdings.

Lee T. Kranefuss, Nathan Most and John E. Martinez are deemed to be “interested persons” (as defined in the 1940 Act) of the Trust due to their affiliations with BGFA, the Funds’ investment advisor and BGI, the parent company of BGFA.


TRUSTEE INFORMATION		87

Trustee Information (Unaudited) (Continued)

iSHARES^® TRUST

Independent Trustees


Name and Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
John B. Carroll (68)	Trustee (since January 1, 2002)	Retired Vice President of Investment Management (1984-2000) of Verizon Corporation; Advisory Board member of Ibbotson Associates (1992-1998); former Vice Chairman and Executive Committee Member (1994-1998) of the Committee on Investment of Employee Benefit Assets of the Financial Executive Institute.	Director (since 1996) of iShares, Inc.; Trustee and member of the Executive Committee (since 1991) of The Common Fund Institutional Funds, a non-profit organization; Member of the Board of Managers of JP Morgan Private Equity Funds.

Richard K. Lyons (43)	Trustee (since February 15, 2000)	Professor, University of California, Berkeley: Haas School of Business (since 1993); Consultant for IMF World Bank, Federal Reserve Bank, and Citibank N.A. (since 2000).	Director (since 2001) of iShares, Inc.; Trustee of Master Investment Portfolio and Barclays Global Investors Funds (since 2001); Board of Trustees: Trustee (Chairman) Matthews Asian Funds since 1995 (oversees 6 portfolios).

George C. Parker (65)	Trustee (since February 15, 2000)	Dean Witter Distinguished Professor of Finance (since 1994); Associate Dean for Academic Affairs, Director of MBA Program, and Professor, Stanford University: Graduate School of Business (1993-2001).	Director (since 2001) of iShares, Inc.; Director (since 1985) of Bailard, Biehl and Kaiser, Inc.; Director (since 1978) of California Casualty Group of Insurance Companies; Director (since 1996) of Continental Airlines, Inc.; Director (since 1995) of Community First Financial Group; Director (1994-2002) of Dresdner/RCM Mutual Funds; Director (since 1999) Tyon Ranch Company.

W. Allen Reed (57)	Trustee (since January 1, 2002)	President and Chief Executive Officer (since 1994) of General Motors Investment Management Corporation.	Director (since 1996) of iShares, Inc.; Director (since 1994) of General Motors Investment Management Corporation; Director (1995-1998) of Taubman Centers, Inc. (a real estate investment trust); Director (since 1992) of FLIR Systems (an imaging technology company); Director (since 1994) of General Motors Acceptance Corporation; Director (since 1994) of GMAC Insurance Holdings, Inc.; Director (since 1995) of Global Emerging Markets Fund; Director (since 2000) of Temple Inland Industries; Chairman (since 1995) of the Investment Advisory Committee of Howard Hughes Medical Institute.


88		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Trustee Information (Unaudited) (Continued)

iSHARES^® TRUST

Officer

Name and Age

Position(s),

Length of Service

Principal Occupation(s)
During Past 5 Years

Other Directorships Held

Michael A. Latham (38)

Secretary, Treasurer and Principal Financial Officer (since February 28, 2002)

Chief Operating Officer of the Intermediary Investor and Exchange Traded Products Business of BGI (since 2003), Director of Mutual Fund Delivery in the U.S. Individual Investor Business of BGI (2000-2003); Head of Operations, BGI Europe (1997-2000).

None.


TRUSTEE INFORMATION		89

The iShares^® Family of Funds

The following is a list of iShares Funds being offered, along with their respective exchange trading symbols. Please call iShares at 1-800-iShares (1-800-474-2737) to obtain a prospectus for any ishares fund. The prospectus contains more complete information, including charges, expenses, investment objectives and risk factors that should be carefully considered to determine if the Fund(s) are an appropriate investment for you. read the prospectus(es) carefully before investing. Investing involves risk, including possible loss of principal.

iShares S&P Domestic Index Funds

S&P 1500 (ISI)

S&P 500 (IVV)

S&P 500/BARRA Growth (IVW)

S&P 500/BARRA Value (IVE)

S&P MidCap 400 (IJH)

S&P MidCap 400/BARRA Growth (IJK)

S&P MidCap 400/BARRA Value (IJJ)

S&P SmallCap 600 (IJR)

S&P SmallCap 600/BARRA Growth (IJT)

S&P SmallCap 600/BARRA Value (IJS)

S&P 100 (OEF)

iShares Sector and Specialty Index Funds

Cohen & Steers Realty Majors (ICF)

Dow Jones U.S. Basic Materials Sector (IYM)

Dow Jones U.S. Consumer Cyclical Sector (IYC)

Dow Jones U.S. Consumer Non-Cyclical Sector (IYK)

Dow Jones U.S. Energy Sector (IYE)

Dow Jones U.S. Financial Sector (IYF)

Dow Jones U.S. Financial Services (IYG)

Dow Jones U.S. Healthcare Sector (IYH)

Dow Jones U.S. Industrial Sector (IYJ)

Dow Jones U.S. Real Estate (IYR)

Dow Jones Select Dividend (DVY)

Dow Jones U.S. Technology Sector (IYW)

Dow Jones U.S. Telecommunications Sector (IYZ)

Dow Jones U.S. Total Market (IYY)

Dow Jones Transportation Average (IYT)

Dow Jones U.S. Utilities Sector (IDU)

Goldman Sachs Natural Resources (IGE)

Goldman Sachs Networking (IGN)

Goldman Sachs Semiconductor (IGW)

Goldman Sachs Software (IGV)

Goldman Sachs Technology (IGM)

Nasdaq Biotechnology (IBB)

S&P Global Energy Sector (IXC)

S&P Global Financials Sector (IXG)

S&P Global Healthcare Sector (IXJ)

S&P Global Technology Sector (IXN)

S&P Global Telecommunications Sector (IXP)

iShares Russell Index Funds

Russell 3000 (IWV)

Russell 3000 Growth (IWZ)

Russell 3000 Value (IWW)

Russell 1000 (IWB)

Russell 1000 Growth (IWF)

Russell 1000 Value (IWD)

Russell Midcap (IWR)

Russell Midcap Growth (IWP)

Russell Midcap Value (IWS)

Russell 2000 (IWM)

Russell 2000 Growth (IWO)

Russell 2000 Value (IWN)

iShares International Index Funds

MSCI Australia (EWA)

MSCI Austria (EWO)

MSCI Belgium (EWK)

MSCI Brazil (EWZ)

MSCI Canada (EWC)

MSCI EAFE (EFA)

MSCI Emerging Markets (EEM)

MSCI EMU (EZU)

MSCI France (EWQ)

MSCI Germany (EWG)

MSCI Hong Kong (EWH)

MSCI Italy (EWI)

MSCI Japan (EWJ)

MSCI Malaysia (EWM)

MSCI Mexico (EWW)

MSCI Netherlands (EWN)

MSCI Pacific ex-Japan (EPP)

MSCI Singapore (EWS)

MSCI South Africa (EZA)

MSCI South Korea (EWY)

MSCI Spain (EWP)

MSCI Sweden (EWD)

MSCI Switzerland (EWL)

MSCI Taiwan (EWT)

MSCI United Kingdom (EWU)

S&P Europe 350 (IEV)

S&P Global 100 (IOO)

S&P Latin America 40 (ILF)

S&P/TOPIX 150 (ITF)

iShares Bond Funds

Lehman Aggregate (AGG)

Lehman TIPS (TIP)

Lehman 1-3 Year Treasury (SHY)

Lehman 7-10 Year Treasury (IEF)

Lehman 20+ Year Treasury (TLT)

GS $InvesTop^™ Corporate (LQD)

iShares NYSE Index Funds

NYSE 100 (NY)

NYSE Composite (NYC)

iShares Morningstar Index Funds*

Large Core (JKD)

Large Growth (JKE)

Large Value (JKF)

Mid Core (JKG)

Mid Growth (JKH)

Mid Value (JKI)

Small Core (JKJ)

Small Growth (JKK)

Small Value (JKL)

Public offering expected on or about July 2, 2004.

iShares is a registered trademark of Barclays Global Investors, N.A. The iShares Funds are not sponsored, endorsed or issued by Goldman, Sachs & Co. or Lehman Brothers, nor are they sponsored, endorsed, issued, sold or promoted by Cohen & Steers Capital Management, Inc., Dow Jones & Company, Inc., Morgan Stanley Capital International, Morningstar, Inc., The Nasdaq Stock Market, Inc., New York Stock Exchange, Inc., Frank Russell Company, or Standard & Poor’s. None of these companies make any representation regarding the advisability of investing in the iShares Funds. Neither SEI nor BGI, nor any of their affiliates, are affiliated with the companies listed above. “GS $ InvesTop^™” and “Goldman Sachs^®” are trademarks of Goldman, Sachs & Co.

An investment in the Fund(s) is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

This advertising section does not constitute part of the 2004 Annual Report.


90		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

The iShares Funds are not sponsored, endorsed, sold or promoted by Dow Jones & Company, Inc. or Cohen & Steers Capital Management. Inc., nor do these companies make any representation regarding the advisability of investing in the iShares Funds.

Investing involves risk, including possible loss of principal.

©2004 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.

A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling toll-free 1 800 474 2737; on the Funds’ website at www.iShares.com; and on the Securities and Exchange Commission’s website at www.sec.gov.

This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.

[GRAPHIC APPEARS HERE]

iShares^® Industrial strength investment tools from BARCLAYS GLOBAL INVESTORS

1 800 iSHARES (1 800 474 2737) WWW.iSHARES.COM

iShares^®

ITEM 1. Report to Stockholders

2004 ANNUAL REPORT TO SHAREHOLDERS

APRIL 30, 2004

iSHARES DOW JONES U.S. TOTAL MARKET INDEX FUND

iSHARES DOW JONES U.S. ENERGY SECTOR INDEX FUND

iSHARES DOW JONES U.S. HEALTHCARE SECTOR INDEX FUND

iSHARES DOW JONES U.S. TECHNOLOGY SECTOR INDEX FUND

iSHARES DOW JONES U.S. TELECOMMUNICATIONS SECTOR INDEX FUND

iSHARES DOW JONES U.S. UTILITIES SECTOR INDEX FUND

iSHARES DOW JONES SELECT DIVIDEND INDEX FUND

iSHARES DOW JONES TRANSPORTATION AVERAGE INDEX FUND

Table of Contents


Shareholder Letter		1

Managers’ Discussion & Analysis		4

Schedules of Investments		20

iShares Dow Jones U.S. Total Market Index Fund		20

iShares Dow Jones U.S. Energy Sector Index Fund		43

iShares Dow Jones U.S. Healthcare Sector Index Fund		47

iShares Dow Jones U.S. Technology Sector Index Fund		52

iShares Dow Jones U.S. Telecommunications Sector Index Fund		58

iShares Dow Jones U.S. Utilities Sector Index Fund		61

iShares Dow Jones Select Dividend Index Fund		65

iShares Dow Jones Transportation Average Index Fund		66

Financial Statements		67

Financial Highlights		74

Notes to the Financial Statements		82

Report of Independent Registered Public Accounting Firm		89

Tax Information (Unaudited)		90

Supplemental Information (Unaudited)		91

Trustee Information (Unaudited)		94

iShares Family of Funds		98

THIS PAGE INTENTIONALLY LEFT BLANK.

To Our Shareholders:

With the addition of these iShares Funds, investors can achieve even more diversity in their portfolios - and at lower cost, since iShares Fund fees are, on average, about half those of actively managed funds.¹ With more than 85 different funds in the iShares family of funds to choose from, investors have the ability to build a diverse portfolio that covers a wide range of market segments with various capitalizations and sectors, as well as value and growth, international and fixed income securities. That is important because market segments do not tend to move in tandem, particularly in volatile markets. Economic factors, including 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.

On behalf of the iShares family of funds, we thank you for making the iShares Funds 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

iShares Trust

Morningstar Principia, BGI analysis 3/04.


SHAREHOLDER LETTER		1

To determine if the Fund(s) are an appropriate investment for you, carefully consider the funds’ investment objectives, risk factors and charges and expenses before investing. This and other information can be found in the Funds’ prospectuses, which may be obtained by calling 1-800-iShares or by visiting www.iShares.com. Read the prospectus carefully before investing.

There are risks involved with investing, including possible loss of principal. Diversification may not protect against market risk. An investment in the Funds is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The annual management fees of the iShares Funds may be substantially less than those of most mutual funds. iShares transactions will result in brokerage commissions, but the savings from lower annual fees may help offset these costs.

This advertising section does not constitute part of the 2004 Annual Report.


2		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

THIS PAGE INTENTIONALLY LEFT BLANK.


		3

Managers’ Discussion & Analysis

iSHARES^® DOW JONES U.S. TOTAL MARKET INDEX FUND

Performance as of 4/30/04


Average Annual Total Returns											Cumulative Total Returns
Year Ended 4/30/04					Inception to 4/30/04						Inception to 4/30/04
NAV	MARKET		INDEX		NAV		MARKET		INDEX		NAV		MARKET		INDEX
24.50%	24.87	%	24.80	%	(4.99	)%	(4.99	)%	(4.82	)%	(18.05	)%	(18.03	)%	(17.43	)%

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 stock exchange on which the shares 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 (6/16/00), 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.

GROWTH OF $10,000 INVESTMENT

SINCE INCEPTION AT NET ASSET VALUE

[GRAPHIC APPEARS HERE]


	iSHARES DOW JONES U.S. TOTAL MARKET INDEX FUND		DOW JONES U.S. TOTAL MARKET INDEX
6/12/2000	$	10,000	$	10,000
6/30/2000	$	10,104	$	10,108
7/31/2000	$	9,920	$	9,925
8/31/2000	$	10,644	$	10,652
9/30/2000	$	10,145	$	10,154
10/31/2000	$	9,993	$	10,003
11/30/2000	$	9,041	$	9,047
12/31/2000	$	9,184	$	9,193
1/31/2001	$	9,516	$	9,522
2/28/2001	$	8,607	$	8,615
3/31/2001	$	8,013	$	8,022
4/30/2001	$	8,680	$	8,694
5/31/2001	$	8,750	$	8,764
6/30/2001	$	8,564	$	8,580
7/31/2001	$	8,426	$	8,441
8/31/2001	$	7,920	$	7,934
9/30/2001	$	7,215	$	7,228
10/31/2001	$	7,383	$	7,403
11/30/2001	$	7,963	$	7,987
12/31/2001	$	8,070	$	8,094
1/31/2002	$	7,932	$	7,958
2/28/2002	$	7,766	$	7,790
3/31/2002	$	8,099	$	8,127
4/30/2002	$	7,645	$	7,674
5/31/2002	$	7,568	$	7,597
6/30/2002	$	7,000	$	7,028
7/31/2002	$	6,461	$	6,486
8/31/2002	$	6,494	$	6,520
9/30/2002	$	5,806	$	5,829
10/31/2002	$	6,278	$	6,304
11/30/2002	$	6,660	$	6,689
12/31/2002	$	6,280	$	6,307
1/31/2003	$	6,126	$	6,152
2/28/2003	$	6,028	$	6,055
3/31/2003	$	6,086	$	6,116
4/30/2003	$	6,583	$	6,615
5/31/2003	$	6,978	$	7,015
6/30/2003	$	7,067	$	7,106
7/31/2003	$	7,214	$	7,254
8/31/2003	$	7,373	$	7,416
9/30/2003	$	7,291	$	7,333
10/31/2003	$	7,719	$	7,767
11/30/2003	$	7,820	$	7,870
12/31/2003	$	8,191	$	8,245
1/31/2004	$	8,359	$	8,415
2/29/2004	$	8,475	$	8,534
3/31/2004	$	8,367	$	8,426
4/30/2004	$	8,195	$	8,255


4		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

FUND ALLOCATION BY SECTOR

(% of Net Assets)

[GRAPHIC APPEARS HERE]


Basic Materials	2.56	%
Consumer, Cyclical	14.34	%
Consumer, Noncyclical	9.10	%
Energy	6.45	%
Financial	20.77	%
Healthcare	13.65	%
Industrial	12.12	%
Short-Term and Other Net Assets	0.16	%
Technology	14.71	%
Telecommunications	3.16	%
Utilities	2.98	%

The iShares Dow Jones U.S. Total Market Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Total Market Index (the “Index”). For the 12-month period ended April 30, 2004 (the “reporting period”) the Fund returned 24.50%, while the Index returned 24.80%.

Equity markets generally delivered solid gains during the reporting period. Early in the reporting period, the Federal Reserve Board (the “Fed”) cut short-term interest rates to 1.00%, the lowest level in 45 years, in a continued effort to stimulate the economy. Increasingly, signs pointed toward economic expansion. Quarterly gross domestic product (GDP) figures released throughout the reporting period were encouraging. Corporate earnings announcements also provided cause for optimism, revealing both higher earnings levels and stabilizing earnings expectations. Jobless claims, which had been the last holdout in the turn toward economic expansion, finally declined late in the reporting period, dipping to a three-year low in April. Also in April, Fed chairman Alan Greenspan announced that the risk of deflation was no longer an issue, leaving the door open for short-term interest rate increases in the future.

Among the Fund’s ten largest holdings, performance was largely positive during the reporting period. Technology bellwether Intel Corp. (1.44% of the net assets of the Fund as of April 30, 2004) led the way with a 40.07% gain during the reporting period. Insurer American International Group Inc. (1.41% of the net assets of the Fund as of April 30, 2004) climbed 23.64%, and Citigroup Inc. (2.14% of the net assets of the Fund as of April 30, 2004) rose 22.52%. Exxon Mobil Corp. (2.40% of the net assets of the Fund as of April 30, 2004) gained 20.88%. The sole negative performer among the ten largest holdings was Johnson & Johnson (1.38% of the net assets of the Fund as of April 30, 2004), which declined 4.13% during the reporting period.


MANAGERS’ DISCUSSION & ANALYSIS		5

Manager’s Discussion & Analysis

iSHARES^® DOW JONES U.S. ENERGY SECTOR INDEX FUND

Performance as of 4/30/04

Average Annual Total Returns

Cumulative Total Returns

Year Ended 4/30/04

Inception to 4/30/04

NAV

MARKET

INDEX

NAV

MARKET

INDEX

NAV

MARKET

INDEX

37.90%

38.32%

34.46%

2.62%

2.67%

2.95%

10.57%

10.80%

11.94%

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 stock exchange on which the shares 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 (6/16/00), 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.

GROWTH OF $10,000 INVESTMENT

SINCE INCEPTION AT NET ASSET VALUE

[GRAPHIC APPEARS HERE]


	iSHARES DOW JONES U.S. ENERGY SECTOR INDEX FUND		DOW JONES U.S. ENERGY SECTOR INDEX
6/12/2000	$	10,000	$	10,000
6/30/2000	$	9,587	$	9,646
7/31/2000	$	9,270	$	9,409
8/31/2000	$	10,341	$	10,343
9/30/2000	$	10,555	$	10,694
10/31/2000	$	10,103	$	10,333
11/30/2000	$	9,620	$	9,868
12/31/2000	$	10,811	$	10,839
1/31/2001	$	10,370	$	10,448
2/28/2001	$	10,412	$	10,415
3/31/2001	$	10,269	$	10,264
4/30/2001	$	11,313	$	11,327
5/31/2001	$	11,186	$	11,232
6/30/2001	$	10,047	$	10,206
7/31/2001	$	9,957	$	9,973
8/31/2001	$	9,534	$	9,553
9/30/2001	$	8,726	$	8,852
10/31/2001	$	9,300	$	9,373
11/30/2001	$	8,949	$	8,992
12/31/2001	$	9,532	$	9,574
1/31/2002	$	9,059	$	9,205
2/28/2002	$	9,402	$	9,619
3/31/2002	$	10,194	$	10,415
4/30/2002	$	9,804	$	9,945
5/31/2002	$	9,553	$	9,716
6/30/2002	$	9,280	$	9,476
7/31/2002	$	8,141	$	8,340
8/31/2002	$	8,288	$	8,390
9/30/2002	$	7,651	$	7,689
10/31/2002	$	7,785	$	7,953
11/30/2002	$	8,045	$	8,246
12/31/2002	$	8,057	$	8,280
1/31/2003	$	7,833	$	8,048
2/28/2003	$	8,047	$	8,261
3/31/2003	$	8,067	$	8,323
4/30/2003	$	8,018	$	8,323
5/31/2003	$	8,910	$	9,119
6/30/2003	$	8,825	$	8,985
7/31/2003	$	8,521	$	8,695
8/31/2003	$	9,041	$	9,266
9/30/2003	$	8,846	$	9,037
10/31/2003	$	8,953	$	9,130
11/30/2003	$	9,017	$	9,166
12/31/2003	$	10,242	$	10,410
1/31/2004	$	10,406	$	10,556
2/29/2004	$	10,870	$	11,047
3/31/2004	$	10,840	$	10,987
4/30/2004	$	11,056	$	11,190


6		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

FUND ALLOCATION BY INDUSTRY

(% of Net Assets)

[GRAPHIC APPEARS HERE]


Coal	0.34	%
Mining	0.14	%
Oil & Gas Producers	85.60	%
Oil & Gas Services	12.78	%
Pipelines	1.11	%
Short-Term and Other Net Assets	0.03	%

The iShares Dow Jones U.S. Energy Sector Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Energy Sector Index (the “Index”). For the 12-month period ended April 30, 2004 (the “reporting period”), the Fund returned 37.90%, while the Index returned 34.46%.

Regulatory constraints, such as those imposed by the Securities and Exchange Commission and Internal Revenue Service, can restrict the Fund’s ability to hold a given index component at its benchmark weight, resulting in differences between a fund’s holdings and the securities in its underlying index. One such constraint, the “Single Issuer Rule”, generally prohibits a fund from investing more than 25% of the value of a fund’s total assets in the securities of a single issuer. To comply with this rule, the Fund was obligated to underweight its investment in the Index’s largest constituent, Exxon Mobil Corp., and to overweight its investment in ChevronTexaco Corp., the Index’s second largest constituent. Exxon Mobil under-performed the benchmark and ChevronTexaco over-performed the benchmark during the reporting period. This had a positive impact on the Fund’s performance relative to the Index’s, and was a major factor in the Fund’s out-performance of the Index by 3.44 percentage points.

Although oil prices finished the reporting period at roughly the same level that they had begun, they experienced considerable volatility during the reporting period. Early in the reporting period, the war in Iraq elevated oil prices to nearly $40 a barrel as it created instability in the region. By summer, however, oil prices had begun to drift 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. By August, the price of crude oil dipped 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%, beginning in November. Driven up by output constraints and a cold winter in the Northeastern United States, oil prices topped $38 per barrel in March.

Among the Fund’s ten largest holdings, performance was generally strong over the reporting period. Oil service and exploration companies Occidental Petroleum Corp. (4.60% of the net assets of the Fund as of April 30, 2004) and Apache Corp. (2.38% of the net assets of the Fund as of April 30, 2004) gained 58.12% and 46.27%, respectively. Diversified oil companies ChevronTexaco Corp. (22.35% of the net assets of the Fund as of April 30, 2004) and ConocoPhillips (4.93% of the net assets of the Fund as of April 30, 2004) climbed 45.68% and 41.75%, respectively, and Burlington Resources Inc. (2.95% of the net assets of the Fund as of April 30, 2004) rose 45.26%. Anadarko Petroleum Corp. (2.35% of the net assets of the Fund as of April 30, 2004) gained 20.68% during the reporting period.


MANAGERS’ DISCUSSION & ANALYSIS		7

Managers’ Discussion & Analysis

iSHARES^® DOW JONES U.S. HEALTHCARE SECTOR INDEX FUND

Performance as of 4/30/04

Average Annual Total Returns

Cumulative Total Returns

Year Ended 4/30/04

Inception to 4/30/04

NAV

MARKET

INDEX

NAV

MARKET

INDEX

NAV

MARKET

INDEX

16.96%

17.41%

17.66%

0.35%

0.42%

0.98%

1.35%

1.64%

3.84%

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 stock exchange on which the shares 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 (6/16/00), 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.

GROWTH OF $10,000 INVESTMENT

SINCE INCEPTION AT NET ASSET VALUE

[GRAPHIC APPEARS HERE]


	iSHARES DOW JONES U.S. HEALTHCARE SECTOR INDEX FUND		DOW JONES U.S. HEALTHCARE SECTOR INDEX
6/12/2000	$	10,000	$	10,000
6/30/2000	$	11,099	$	11,121
7/31/2000	$	10,481	$	10,506
8/31/2000	$	10,709	$	10,756
9/30/2000	$	11,178	$	11,233
10/31/2000	$	11,480	$	11,541
11/30/2000	$	11,697	$	11,756
12/31/2000	$	12,084	$	12,148
1/31/2001	$	11,043	$	11,105
2/28/2001	$	10,958	$	11,023
3/31/2001	$	10,034	$	10,099
4/30/2001	$	10,429	$	10,501
5/31/2001	$	10,585	$	10,666
6/30/2001	$	10,248	$	10,331
7/31/2001	$	10,569	$	10,660
8/31/2001	$	10,225	$	10,317
9/30/2001	$	10,198	$	10,295
10/31/2001	$	10,255	$	10,357
11/30/2001	$	10,781	$	10,895
12/31/2001	$	10,471	$	10,587
1/31/2002	$	10,245	$	10,364
2/28/2002	$	10,221	$	10,343
3/31/2002	$	10,283	$	10,411
4/30/2002	$	9,636	$	9,761
5/31/2002	$	9,431	$	9,557
6/30/2002	$	8,566	$	8,685
7/31/2002	$	8,359	$	8,473
8/31/2002	$	8,410	$	8,528
9/30/2002	$	7,911	$	8,027
10/31/2002	$	8,326	$	8,451
11/30/2002	$	8,558	$	8,693
12/31/2002	$	8,251	$	8,384
1/31/2003	$	8,223	$	8,359
2/28/2003	$	8,051	$	8,189
3/31/2003	$	8,358	$	8,506
4/30/2003	$	8,667	$	8,825
5/31/2003	$	8,945	$	9,113
6/30/2003	$	9,296	$	9,476
7/31/2003	$	9,310	$	9,494
8/31/2003	$	8,995	$	9,178
9/30/2003	$	9,013	$	9,201
10/31/2003	$	9,119	$	9,314
11/30/2003	$	9,290	$	9,495
12/31/2003	$	9,795	$	10,014
1/31/2004	$	10,093	$	10,327
2/29/2004	$	10,199	$	10,439
3/31/2004	$	9,860	$	10,096
4/30/2004	$	10,136	$	10,385


8		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

FUND ALLOCATION BY INDUSTRY

(% of Net Assets)

[GRAPHIC APPEARS HERE]


Biotechnology	15.31	%
Healthcare Providers	12.62	%
Medical Products	20.65	%
Pharmaceuticals	51.41	%
Short-Term and Other Net Assets	0.01	%

The iShares Dow Jones U.S. Healthcare Sector Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Healthcare Sector Index (the “Index”). For the 12-month period ended April 30, 2004 (the “reporting period”) the Fund returned 16.96%, while the Index returned 17.66%.

Healthcare companies posted mixed results for the reporting period. Biotechnology and medical technology companies generally performed well, continuing to benefit from renewed investor interest in growth-related stocks. Performance for pharmaceutical company shares was divided: several pharmaceutical companies faced expirations on their patents and in turn, the threat of competition from generic drug makers. Others, however, received positive news related to drugs in their pipelines.

Among the Fund’s ten largest holdings, performance was mixed during the reporting period. Pharmaceutical giant Pfizer Inc., the largest holding at 17.19% of the Fund’s net assets as of April 30, 2004, gained 16.29% and pharmaceutical company Eli Lilly & Co. (4.46% of the net assets of the Fund as of April 30, 2004) rose 15.65% during the reporting period. Abbott Laboratories (4.33% of the net assets of the Fund as of April 30, 2004) returned 8.34%, and medical device company Medtronic Inc. (3.85% of the net assets of the Fund as of April 30, 2004) gained 5.70%. On the negative side, pharmaceutical company Merck & Co. Inc. (6.58% of the net assets of the Fund as of April 30, 2004) declined 14.65%, and Wyeth (3.19% of the net assets of the Fund as of April 30, 2004) fell 12.54%. Amgen Inc. (4.57% of the net assets of the Fund as of April 30, 2004) declined 7.98% during the reporting period.


MANAGERS’ DISCUSSION & ANALYSIS		9

Managers’ Discussion & Analysis

iSHARES^® DOW JONES U.S. TECHNOLOGY SECTOR INDEX FUND

Performance as of 4/30/04


Average Annual Total Returns									Cumulative Total Returns
Year Ended 4/30/04			Inception to 4/30/04						Inception to 4/30/04
NAV	MARKET	INDEX	NAV		MARKET		INDEX		NAV		MARKET		INDEX
25.89%	26.20%	26.63%	(21.58	)%	(21.51	)%	(21.11	)%	(61.83	)%	(61.70	)%	(60.89	)%

Total returns for the periods since inception are calculated from the inception date of the Fund (5/15/00). “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 stock exchange on which the shares 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), 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.

GROWTH OF $10,000 INVESTMENT

SINCE INCEPTION AT NET ASSET VALUE

[GRAPHIC APPEARS HERE]


	iSHARES DOW JONES U.S. TECHNOLOGY SECTOR INDEX FUND		DOW JONES U.S. TECHNOLOGY SECTOR INDEX
5/15/2000	$	10,000	$	10,000
5/31/2000	$	9,593	$	9,595
6/30/2000	$	11,009	$	11,018
7/31/2000	$	10,342	$	10,362
8/31/2000	$	11,723	$	11,751
9/30/2000	$	9,833	$	9,863
10/31/2000	$	9,152	$	9,186
11/30/2000	$	7,013	$	7,045
12/31/2000	$	6,397	$	6,430
1/31/2001	$	7,427	$	7,468
2/28/2001	$	5,315	$	5,347
3/31/2001	$	4,587	$	4,618
4/30/2001	$	5,440	$	5,480
5/31/2001	$	5,196	$	5,235
6/30/2001	$	5,239	$	5,282
7/31/2001	$	4,868	$	4,911
8/31/2001	$	4,252	$	4,291
9/30/2001	$	3,328	$	3,360
10/31/2001	$	3,953	$	3,992
11/30/2001	$	4,629	$	4,677
12/31/2001	$	4,559	$	4,608
1/31/2002	$	4,611	$	4,664
2/28/2002	$	3,947	$	3,994
3/31/2002	$	4,247	$	4,300
4/30/2002	$	3,724	$	3,772
5/31/2002	$	3,563	$	3,611
6/30/2002	$	3,090	$	3,134
7/31/2002	$	2,815	$	2,855
8/31/2002	$	2,765	$	2,807
9/30/2002	$	2,266	$	2,301
10/31/2002	$	2,765	$	2,808
11/30/2002	$	3,256	$	3,311
12/31/2002	$	2,780	$	2,827
1/31/2003	$	2,754	$	2,801
2/28/2003	$	2,812	$	2,862
3/31/2003	$	2,772	$	2,822
4/30/2003	$	3,032	$	3,089
5/31/2003	$	3,323	$	3,387
6/30/2003	$	3,314	$	3,379
7/31/2003	$	3,507	$	3,578
8/31/2003	$	3,730	$	3,807
9/30/2003	$	3,691	$	3,770
10/31/2003	$	4,046	$	4,135
11/30/2003	$	4,114	$	4,206
12/31/2003	$	4,174	$	4,270
1/31/2004	$	4,336	$	4,438
2/29/2004	$	4,193	$	4,293
3/31/2004	$	4,064	$	4,163
4/30/2004	$	3,817	$	3,911


10		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

FUND ALLOCATION BY INDUSTRY

(% of Net Assets)

[GRAPHIC APPEARS HERE]


Communications Technology	19.75	%
Semiconductors	24.76	%
Short-Term and Other Net Assets	0.02	%
Software	27.58	%
Technology Hardware & Equipment	23.73	%
Technology Services	4.16	%

The iShares Dow Jones U.S. Technology Sector Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Technology Sector Index (the “Index”). For the 12-month period ended April 30, 2004 (the “reporting period”), the Fund returned 25.89%, while the Index returned 26.63%.

Equity markets generally delivered solid gains during the reporting period. Early in the reporting period, the Federal Reserve Board cut short-term interest rates to 1.00%, the lowest level in 45 years, in a continued effort to stimulate the economy. Increasingly, signs pointed toward economic expansion. Quarterly gross domestic product (GDP) figures throughout the reporting period were encouraging. Corporate earnings announcements also provided cause for optimism, revealing both higher earnings levels and stabilizing earnings expectations. Jobless claims, which had been the last holdout in the turn toward economic expansion, finally declined late in the reporting period, dipping to a three-year low in April.

Technology stocks performed well during the reporting period. Both global PC sales and global chip sales levels climbed throughout the reporting period, spurring a rally in the previously depressed technology sector. According to the Semiconductor Industry Association, chip sales in February 2004 were 30.8% higher than sales in February 2003. Adding to the sector’s gains, improving economic conditions led to renewed investor interest in technology shares.

Nine of the Fund’s ten largest holdings posted gains during the reporting period. Motorola Inc. (2.48% of the net assets of the Fund as of April 30, 2004) led the way with a 130.72% gain. Wireless telecommunications maker QUALCOMM Inc. (2.94% of the net assets of the Fund as of April 30, 2004) climbed 95.92%. Technology bellwethers Intel Corp. (9.75% of the net assets of the Fund as of April 30, 2004) and Cisco Systems Inc. (8.38% of the net assets of the Fund as of April 30, 2004) rose 40.07% and 39.40%, respectively, during the reporting period. Semiconductor company Texas Instruments Inc. (2.54% of the net assets of the Fund as of April 30, 2004) gained 35.75%. The sole negative performer among the Fund’s ten largest holdings was Oracle Corp. (2.62% of the net assets of the Fund as of April 30, 2004), which declined 5.30% during the reporting period.


MANAGERS’ DISCUSSION & ANALYSIS		11

Managers’ Discussion & Analysis

iSHARES^® DOW JONES U.S. TELECOMMUNICATIONS SECTOR INDEX FUND

Performance as of 4/30/04


Average Annual Total Returns									Cumulative Total Returns
Year Ended 4/30/04			Inception to 4/30/04						Inception to 4/30/04
NAV	MARKET	INDEX	NAV		MARKET		INDEX		NAV		MARKET		INDEX
19.71%	18.91%	19.08%	(20.38	)%	(20.35	)%	(17.75	)%	(59.28	)%	(59.23	)%	(52.36	)%

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 stock exchange on which the shares 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), 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.

GROWTH OF $10,000 INVESTMENT

SINCE INCEPTION AT NET ASSET VALUE

[GRAPHIC APPEARS HERE]


	iSHARES DOW JONES U.S. TELECOMMUNICATIONS SECTOR INDEX FUND		DOW JONES U.S. TELECOMMUNICATIONS SECTOR INDEX
5/22/2000	$	10,000	$	10,000
5/31/2000	$	10,125	$	10,208
6/30/2000	$	10,516	$	10,537
7/31/2000	$	9,755	$	9,768
8/31/2000	$	9,502	$	9,482
9/30/2000	$	9,017	$	9,209
10/31/2000	$	9,168	$	9,498
11/30/2000	$	7,448	$	8,103
12/31/2000	$	6,968	$	7,464
1/31/2001	$	8,231	$	8,629
2/28/2001	$	7,195	$	7,768
3/31/2001	$	6,666	$	7,328
4/30/2001	$	6,894	$	7,657
5/31/2001	$	6,788	$	7,487
6/30/2001	$	6,577	$	7,191
7/31/2001	$	6,728	$	7,522
8/31/2001	$	6,100	$	6,828
9/30/2001	$	6,100	$	7,208
10/31/2001	$	5,399	$	6,285
11/30/2001	$	5,541	$	6,393
12/31/2001	$	5,668	$	6,511
1/31/2002	$	5,149	$	6,003
2/28/2002	$	4,759	$	5,628
3/31/2002	$	4,749	$	5,516
4/30/2002	$	4,060	$	4,658
5/31/2002	$	4,065	$	4,822
6/30/2002	$	3,459	$	4,223
7/31/2002	$	2,985	$	3,702
8/31/2002	$	3,049	$	3,631
9/30/2002	$	2,605	$	3,129
10/31/2002	$	3,354	$	4,126
11/30/2002	$	3,760	$	4,599
12/31/2002	$	3,507	$	4,262
1/31/2003	$	3,364	$	3,983
2/28/2003	$	3,136	$	3,650
3/31/2003	$	3,126	$	3,636
4/30/2003	$	3,401	$	4,002
5/31/2003	$	3,669	$	4,270
6/30/2003	$	3,826	$	4,425
7/31/2003	$	3,654	$	4,193
8/31/2003	$	3,661	$	4,198
9/30/2003	$	3,546	$	4,029
10/31/2003	$	3,746	$	4,264
11/30/2003	$	3,690	$	4,207
12/31/2003	$	3,958	$	4,575
1/31/2004	$	4,076	$	4,763
2/29/2004	$	4,185	$	4,844
3/31/2004	$	4,090	$	4,769
4/30/2004	$	4,071	$	4,766


12		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

FUND ALLOCATION BY INDUSTRY

(% of Net Assets)

[GRAPHIC APPEARS HERE]


Fixed-Line Communications	72.89	%
Short-Term and Other Net Assets	0.54	%
Wireless Communications	26.57	%

The iShares Dow Jones U.S. Telecommunications Sector Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Telecommunications Sector Index (the “Index”). For the 12-month period ended April 30, 2004 (the “reporting period”), the Fund returned 19.71%, while the Index returned 19.08%.

Equity markets generally delivered solid gains during the reporting period. Early in the reporting period, the Federal Reserve Board cut short-term interest rates to 1.00%, the lowest level in 45 years, in a continued effort to stimulate the economy. Increasingly, signs pointed toward economic expansion. Quarterly gross domestic product (GDP) figures throughout the reporting period were encouraging. Corporate earnings announcements also provided cause for optimism, revealing both higher earnings levels and stabilizing earnings expectations. Jobless claims, which had been the last holdout in the turn toward economic expansion, finally declined late in the reporting period, dipping to a three-year low in April.

Telecommunications stocks generally responded to the improved economic conditions. In some cases, the growth came from a renewed interest in investment activity. Investors generally appeared more willing to return to more growth-oriented securities again, and, for many, the depressed share prices provided additional incentive. In addition, many telecommunications companies that had suffered from overcapacity issues following the bursting of the technology bubble benefited from renewed demand during the reporting period.

Among the Fund’s ten largest holdings, AT&T Wireless Services Inc. (4.70% of the net assets of the Fund as of April 30, 2004) was the top performer during the reporting period with a 113.78% gain. In February, Cingular Wireless, the United States’ second-largest wireless carrier, announced plans to acquire AT&T Wireless, currently the nation’s third-largest wireless carrier, which would transform the two companies into the largest wireless carrier in the U.S. with a subscriber base of 46 million. Wireless services companies Nextel Communications Inc. (its Class A shares constituted 4.53% of the net assets of the Fund as of April 30, 2004) and Sprint Corp.’s FON Group (4.58% of the net assets of the Fund as of April 30, 2004) climbed 61.59% and 55.43%, respectively. Verizon Communications Inc., the largest holding at 22.15% of the Fund’s net assets as of April 30, 2004, gained 0.96% during the reporting period.


MANAGERS’ DISCUSSION & ANALYSIS		13

Managers’ Discussion & Analysis

iSHARES^® DOW JONES U.S. UTILITIES SECTOR INDEX FUND

Performance as of 4/30/04


Average Annual Total Returns									Cumulative Total Returns
Year Ended 4/30/04			Inception to 4/30/04						Inception to 4/30/04
NAV	MARKET	INDEX	NAV		MARKET		INDEX		NAV		MARKET		INDEX
21.28%	21.22%	22.05%	(1.73	)%	(1.73	)%	(1.22	)%	(6.55	)%	(6.55	)%	(4.67	)%

GROWTH OF $10,000 INVESTMENT

SINCE INCEPTION AT NET ASSET VALUE

[GRAPHIC APPEARS HERE]


	iSHARES DOW JONES U.S. UTILITIES SECTOR INDEX FUND		DOW JONES U.S. UTILITIES SECTOR INDEX
6/12/2000	$	10,000	$	10,000
6/30/2000	$	9,377	$	9,374
7/31/2000	$	10,033	$	10,040
8/31/2000	$	11,390	$	11,406
9/30/2000	$	12,498	$	12,525
10/31/2000	$	11,932	$	11,965
11/30/2000	$	11,963	$	11,996
12/31/2000	$	12,928	$	12,963
1/31/2001	$	11,634	$	11,672
2/28/2001	$	11,952	$	11,992
3/31/2001	$	11,943	$	11,983
4/30/2001	$	12,590	$	12,636
5/31/2001	$	12,379	$	12,417
6/30/2001	$	11,576	$	11,616
7/31/2001	$	10,996	$	11,036
8/31/2001	$	10,800	$	10,840
9/30/2001	$	9,767	$	9,805
10/31/2001	$	9,576	$	9,625
11/30/2001	$	9,200	$	9,249
12/31/2001	$	9,513	$	9,568
1/31/2002	$	9,181	$	9,238
2/28/2002	$	9,068	$	9,129
3/31/2002	$	9,944	$	10,021
4/30/2002	$	9,899	$	9,980
5/31/2002	$	9,386	$	9,465
6/30/2002	$	8,930	$	9,006
7/31/2002	$	7,790	$	7,860
8/31/2002	$	8,056	$	8,134
9/30/2002	$	7,140	$	7,210
10/31/2002	$	7,074	$	7,147
11/30/2002	$	7,182	$	7,260
12/31/2002	$	7,456	$	7,541
1/31/2003	$	7,196	$	7,284
2/28/2003	$	6,870	$	6,955
3/31/2003	$	7,182	$	7,274
4/30/2003	$	7,706	$	7,810
5/31/2003	$	8,489	$	8,611
6/30/2003	$	8,570	$	8,698
7/31/2003	$	8,095	$	8,215
8/31/2003	$	8,212	$	8,338
9/30/2003	$	8,549	$	8,687
10/31/2003	$	8,668	$	8,812
11/30/2003	$	8,754	$	8,904
12/31/2003	$	9,254	$	9,419
1/31/2004	$	9,437	$	9,611
2/29/2004	$	9,634	$	9,816
3/31/2004	$	9,717	$	9,907
4/30/2004	$	9,346	$	9,532


14		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

FUND ALLOCATION BY INDUSTRY

(% of Net Assets)

[GRAPHIC APPEARS HERE]


Electric Utilities	90.56	%
Gas Utilities	8.72	%
Short-Term and Other Net Assets	0.18	%
Water Utilities	0.54	%

The iShares Dow Jones U.S. Utilities Sector Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Utilities Sector Index (the “Index”). For the 12-month period ended April 30, 2004 (the “reporting period”) the Fund returned 21.28%, while the Index returned 22.05%.

Equity markets generally delivered solid gains during the reporting period. Early in the reporting period, the Federal Reserve Board cut short-term interest rates to 1.00%, the lowest level in 45 years, in a continued effort to stimulate the economy. Increasingly, signs pointed toward economic expansion. Quarterly gross domestic product (GDP) figures throughout the reporting period were encouraging. Corporate earnings announcements also provided cause for optimism, revealing both higher earnings levels and stabilizing earnings expectations. Jobless claims, which had been the last holdout in the turn toward economic expansion, finally declined late in the reporting period, dipping to a three-year low in April.

The utilities sector generally performed well during the reporting period, responding largely to the signs of economic recovery. As economic conditions improved, so did the demand for industrial production, which in turn meant higher demand for power. For a few utilities companies, the gains represented recovery from the scandals that had plagued the sector in previous reporting periods.

Nine of the Fund’s ten largest holdings posted gains during the reporting period. PG&E Corp. (3.11% of the net assets of the Fund as of April 30, 2004) gained 83.71%, as the once-troubled utility rebounded from lows hit in the wake of California’s energy crisis. Power producer TXU Corp. (3.18% of the net assets of the Fund as of April 30, 2004) climbed 71.39%. Exelon, the largest holding at 6.33% of the Fund’s net assets as of April 30, 2004, rose 26.21%, and Duke Energy Corp. (5.49% of the net assets of the Fund as of April 30, 2004) gained 19.73%. The only negative performance among the Fund’s ten largest holdings came from Southern Company (6.08% of the net assets of the Fund as of April 30, 2004), which declined 1.13% during the reporting period.


MANAGERS’ DISCUSSION & ANALYSIS		15

Managers’ Discussion & Analysis

iSHARES^® DOW JONES SELECT DIVIDEND INDEX FUND

Performance as of 4/30/04


Total Returns
Inception to 4/30/04
NAV	MARKET	INDEX
7.70%	7.80%	7.91%

“Total returns” represent the total change in value of an investment over the period indicated and is calculated from the inception date of the Fund (11/3/03).

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 stock exchange on which the shares 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 (11/7/03), 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.

As of the fiscal year ended 4/30/04, the Fund did not have six months of performance and therefore a line graph is not presented.

FUND ALLOCATION BY INDUSTRY

(% of Net Assets)

[GRAPHIC APPEARS HERE]


Auto Parts & Tires	1.90	%
Automobile Manufacturers	2.81	%
Banks	37.99	%
Chemicals	11.09	%
Containers & Packaging	1.31	%
Electric Utilities	19.69	%
Energy	3.37	%
Fixed-Line Communications	3.04	%
Forest Products & Paper	1.22	%
Gas Utilities	2.76	%
General Industrial Services	1.61	%
Insurance	4.92	%
Pharmaceuticals	1.54	%
Short-Term and Other Net Assets	0.17	%
Tobacco	6.58	%

The iShares Dow Jones Select Dividend Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones Select Dividend Index (the “Index”). From its inception on November 3, 2003 through April 30, 2004 (the “reporting period”) the Fund returned 7.70%, while the Index returned 7.91%.


16		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Equities generally trended upward during the reporting period in the face of encouraging economic news. Quarterly gross domestic product (GDP) figures throughout the reporting period pointed to economic recovery. Corporate earnings announcements also provided cause for optimism, revealing both higher earnings levels and stabilizing earnings expectations. Jobless claims, which had been the last holdout in the turn toward economic expansion, finally declined late in the reporting period, dipping to a three-year low in April. Throughout the reporting period, the Federal Reserve Board left rates unchanged at 1.00% and in April indicated that it may begin to raise rates in the future.

Among the Fund’s ten largest holdings, performance was mixed during the reporting period. Altria Group Inc. (4.11% of the net assets of the Fund as of April 30, 2004) gained 18.94%, and General Motors Corp. (2.81% of the net assets of the Fund as of April 30, 2004) climbed 10.54% during the reporting period. The largest holding at 4.88% of the Fund’s net assets as of April 30, 2004, Bank of America Corp. rose 5.92%. On the negative side, PNC Financial Services Group (2.94% of the net assets of the Fund as of April 30, 2004) and utility company FPL Group Inc. (3.53% of the net assets of the Fund as of April 30, 2004) declined 1.94% and 1.03%, respectively, during the reporting period.


MANAGERS’ DISCUSSION & ANALYSIS		17

Managers’ Discussion & Analysis

iSHARES^® DOW JONES TRANSPORTATION AVERAGE INDEX FUND

Performance as of 4/30/04


Total Returns
Inception to 4/30/04
NAV	MARKET	INDEX
4.19%	4.35%	3.81%

“Total returns” represent the total change in value of an investment over the period indicated and is calculated from the inception date of the Fund (10/6/03).

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 stock exchange on which the shares 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 (10/10/03), 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.

GROWTH OF $10,000 INVESTMENT

SINCE INCEPTION AT NET ASSET VALUE

[GRAPHIC APPEARS HERE]


	iSHARES DOW JONES TRANSPORTATION AVERAGE INDEX FUND		DOW JONES TRANSPORTATION AVERAGE INDEX
10/6/2003	$	10,000	$	10,000
10/31/2003	$	10,422	$	10,416
11/30/2003	$	10,462	$	10,462
12/31/2003	$	10,779	$	10,784
1/31/2004	$	10,338	$	10,350
2/29/2004	$	10,406	$	10,423
3/31/2004	$	10,415	$	10,414
4/30/2004	$	10,419	$	10,381


18		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

FUND ALLOCATION BY INDUSTRY

(% of Net Assets)

[GRAPHIC APPEARS HERE]


Airlines	8.64	%
General Industrial Services	4.06	%
Industrial Transportation*	87.30	%

Includes Short-Term and Other Net Liabilities of -0.03%.

The iShares Dow Jones Transportation Average Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones Transportation Average Index (the “Index”). For the period from the Fund’s inception on October 6, 2003 through April 30, 2004 (the “reporting period”), the Fund returned 4.19%, while the Index returned 3.81%.

Equities generally trended upward during the reporting period in the face of encouraging economic news. Quarterly gross domestic product (GDP) figures throughout the reporting period pointed to economic recovery. Corporate earnings announcements also provided cause for optimism, revealing both higher earnings levels and stabilizing earnings expectations. Jobless claims, which had been the last holdout in the turn toward economic expansion, finally declined late in the reporting period, dipping to a three-year low in April. Throughout the reporting period, the Federal Reserve Board left short-term interest rates unchanged at 1.00% and in April indicated that it may begin to raise interest rates in the future.

Transportation stocks benefited from the improving economic environment, which generally translated into increased demand for transportation-related companies. In particular, airfreight and express shipping companies benefited from higher business activity levels.

Among the Fund’s ten largest holdings, the best performer during the reporting period was Norfolk Southern Corp. (4.71% of the net assets of the Fund as of April 30, 2004), which gained 24.58%. Ryder System Inc. (5.87% of the net assets of the Fund as of April 30, 2004) rose 21.70% during the reporting period. Freight companies Expeditors International Washington Inc. (6.91% of the net assets of the Fund as of April 30, 2004) and CNF Inc. (6.05% of the net assets of the Fund as of April 30, 2004) climbed 13.84% and 12.67%, respectively. Railroad companies Burlington Northern Santa Fe Corp. (4.89% of the net assets of the Fund as of April 30, 2004) and Union Pacific Corp. (7.97% of the net assets of the Fund as of April 30, 2004) gained 10.77% and 0.15%, respectively.


MANAGERS’ DISCUSSION & ANALYSIS		19

Schedule of Investments

iSHARES^® DOW JONES U.S. TOTAL MARKET INDEX FUND

April 30, 2004


Security	Shares	Value
COMMON STOCKS – 99.84%

General Electric Co.	344,525	$	10,318,524
Exxon Mobil Corp.	215,400		9,165,270
Pfizer Inc.	250,282		8,950,084
Microsoft Corp.	333,833		8,669,643
Citigroup Inc.	169,423		8,147,552
Bank of America Corp.	68,203		5,489,659
Intel Corp.	212,703		5,472,848
American International Group Inc.	75,151		5,384,569
Johnson & Johnson	97,373		5,261,063
Wal-Mart Stores Inc.	87,687		4,998,159
International Business Machines Corp.	56,441		4,976,403
Cisco Systems Inc.¹	225,472		4,705,601
Procter & Gamble Co.	42,404		4,484,223
Coca-Cola Co. (The)	73,784		3,731,257
Altria Group Inc.	66,655		3,691,354
Merck & Co. Inc.	73,022		3,432,034
Verizon Communications Inc.	90,910		3,430,943
ChevronTexaco Corp.	35,084		3,210,186
Wells Fargo & Company	55,536		3,135,563
PepsiCo Inc.	56,349		3,070,457
SBC Communications Inc.	108,683		2,706,207
Home Depot Inc.	74,693		2,628,447
Dell Inc.¹	74,072		2,571,039
JP Morgan Chase & Co.	67,322		2,531,307
Time Warner Inc.¹	142,745		2,400,971
Amgen Inc.¹	42,352		2,383,147
Lilly (Eli) & Co.	31,508		2,325,605
Abbott Laboratories	51,121		2,250,346
3M Co.	23,600		2,040,928
Medtronic Inc.	39,620		1,999,225
Wachovia Corp.	43,550		1,992,413
Fannie Mae	28,649		1,968,759
Viacom Inc. Class B	49,488		1,912,711
American Express Co.	37,202		1,821,038
Bank One Corp.	36,546		1,804,276
Tyco International Ltd.	65,368		1,794,352
Hewlett-Packard Co.	89,560		1,764,332
Morgan Stanley	32,484		1,669,353
Wyeth	43,521		1,656,844
QUALCOMM Inc.	26,310		1,643,323
U.S. Bancorp	62,845		1,611,346
Bristol-Myers Squibb Co.	63,365		1,590,461
Walt Disney Co. (The)	67,171		1,546,948
BellSouth Corp.	59,850		1,544,728
Merrill Lynch & Co. Inc.	28,312		1,535,360
Oracle Corp.¹	130,352		1,462,549
ConocoPhillips	20,470		1,459,511
United Technologies Corp.	16,843		1,452,877
Texas Instruments Inc.	56,607		1,420,836
Du Pont (E.I.) de Nemours and Co.	32,652		1,402,403
Motorola Inc.	76,257		1,391,690
Anheuser-Busch Companies Inc.	26,761		1,371,234
Freddie Mac	22,762		1,329,301
First Data Corp.	28,983		1,315,538
UnitedHealth Group Inc.	20,578		1,265,135
United Parcel Service Inc. Class B	17,961		1,259,964
Comcast Corp. Class A¹	41,168		1,239,157
Gillette Co. (The)	29,883		1,222,812
Lowe’s Companies Inc.	23,406		1,218,516
Dow Chemical Co. (The)	30,226		1,199,670
Target Corp.	26,964		1,169,429
Walgreen Co.	33,609		1,158,838
Washington Mutual Inc.	28,766		1,133,093
McDonald’s Corp.	41,599		1,132,741
eBay Inc.¹	14,124		1,127,378
Schlumberger Ltd.	19,249		1,126,644
Kimberly-Clark Corp.	16,367		1,071,220
Allstate Corp. (The)	23,041		1,057,582
Cardinal Health Inc.	14,191		1,039,491
AT&T Wireless Services Inc.¹	73,661		1,017,258
Applied Materials Inc.¹	55,381		1,009,596
Boeing Co. (The)	23,377		997,964
Goldman Sachs Group Inc. (The)	10,101		977,272
Liberty Media Corp.Class A¹	88,298		965,980
Colgate-Palmolive Co.	16,351		946,396
Yahoo! Inc.¹	18,521		934,570
MBNA Corp.	36,982		901,621
Honeywell International Inc.	25,878		894,861
EMC Corp.¹	79,344		885,479
Genentech Inc.¹	7,206		884,897


20		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. TOTAL MARKET INDEX FUND

April 30, 2004


Security	Shares	Value
Ford Motor Company	57,367	$	881,157
St. Paul Travelers Companies Inc.	21,630		879,692
Alcoa Inc.	28,420		873,915
Comcast Corp. Special Class A¹	30,099		872,570
Caterpillar Inc.	11,135		865,524
Automatic Data Processing Inc.	19,232		842,554
Fifth Third Bancorp	15,550		834,413
Nextel Communications Inc. Class A¹	34,868		831,950
Emerson Electric Co.	13,749		827,965
Sysco Corp.	21,170		809,753
Schering-Plough Corp.	48,394		809,632
Cendant Corp.	33,580		795,174
Boston Scientific Corp.¹	19,178		789,942
Forest Laboratories Inc.¹	12,064		777,887
Prudential Financial Inc.	17,634		774,838
Gannett Co. Inc.	8,861		768,071
Sprint Corp. (FON Group)	42,874		767,007
Clear Channel Communications Inc.	18,337		760,802
Illinois Tool Works Inc.	8,703		750,286
Marsh & McLennan Companies Inc.	16,432		741,083
Bank of New York Co. Inc. (The)	25,275		736,513
Exelon Corp.	10,773		721,145
General Motors Corp.	15,013		711,916
AFLAC Inc.	16,724		706,255
Southern Company	24,038		691,333
Dominion Resources Inc.	10,693		682,320
Lehman Brothers Holdings Inc.	9,097		667,720
Avon Products Inc.	7,784		653,856
FedEx Corp.	9,064		651,792
Guidant Corp.	10,173		641,001
International Paper Co.	15,818		637,782
Zimmer Holdings Inc.¹	7,971		636,484
Baxter International Inc.	19,978		632,304
Biogen Idec Inc.¹	10,699		631,241
National City Corp.	18,043		625,551
Duke Energy Corp.	29,620		623,797
BB&T Corp.	17,851		615,681
Occidental Petroleum Corp.	12,776		603,027
SunTrust Banks Inc.	8,794		598,432
Sara Lee Corp.	25,860		596,849
HCA Inc.	14,421		585,925
Hartford Financial Services Group Inc.	9,571		584,597
Northrop Grumman Corp.	5,690		564,733
Costco Wholesale Corp.¹	15,035		563,061
Harley-Davidson Inc.	9,996		562,975
SLM Corp.	14,674		562,161
Lockheed Martin Corp.	11,704		558,281
WellPoint Health Networks Inc.¹	4,967		554,764
Deere & Co.	8,112		551,940
InterActiveCorp¹	17,307		551,574
Progressive Corp. (The)	6,264		548,225
Carnival Corp.	12,653		539,904
Waste Management Inc.	19,007		539,799
Countrywide Financial Corp.	9,085		538,741
DIRECTV Group Inc. (The)¹	29,755		532,615
State Street Corp.	10,875		530,700
Analog Devices Inc.	12,162		518,101
Alltel Corp.	10,274		517,193
ConAgra Foods Inc.	17,729		512,191
General Dynamics Corp.	5,455		510,697
Capital One Financial Corp.	7,688		503,795
Starbucks Corp.¹	12,941		502,887
PNC Financial Services Group	9,424		500,414
Electronic Arts Inc.¹	9,862		499,214
Omnicom Group Inc.	6,270		498,528
CVS Corp.	12,874		497,323
Union Pacific Corp.	8,416		495,955
McGraw-Hill Companies Inc. (The)	6,246		492,560
Maxim Integrated Products Inc.	10,664		490,437
Corning Inc.¹	43,924		484,482
Newmont Mining Corp.	12,753		476,962
General Mills Inc.	9,697		472,729
Caremark Rx Inc.¹	13,949		472,174
Lucent Technologies Inc.¹	139,943		471,608
Best Buy Co. Inc.	8,688		471,324
Gap Inc. (The)	21,208		466,788
Symantec Corp.¹	10,166		457,978
AT&T Corp.	26,127		448,078
Apache Corp.	10,670		446,753
Stryker Corp.	4,499		445,086
Golden West Financial Corp.	4,230		444,615


SCHEDULES OF INVESTMENTS		21

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. TOTAL MARKET INDEX FUND

April 30, 2004


Security	Shares	Value
Anadarko Petroleum Corp.	8,290	$	444,178
Raytheon Co.	13,748		443,510
Heinz (H.J.) Co.	11,588		442,546
Devon Energy Corp.	7,227		442,292
Burlington Resources Inc.	6,435		432,882
International Game Technology Inc.	11,455		432,312
Weyerhaeuser Co.	7,245		428,904
St. Jude Medical Inc.¹	5,619		428,505
Chubb Corp.	6,196		427,524
FirstEnergy Corp.	10,884		425,564
Halliburton Co.	14,275		425,395
Mellon Financial Corp.	14,212		421,244
Amazon.com Inc.¹	9,666		420,084
Apollo Group Inc. Class A¹	4,605		418,502
Sun Microsystems Inc.¹	106,718		416,200
Becton, Dickinson & Co.	8,221		415,572
Paychex Inc.	11,132		415,001
Staples Inc.	16,065		413,834
Kohls Corp.¹	9,858		411,966
Aetna Inc.	4,978		411,929
Masco Corp.	14,693		411,551
Entergy Corp.	7,518		410,483
Computer Associates International Inc.	15,215		407,914
Nike Inc. Class B	5,661		407,309
Baker Hughes Inc.	11,053		405,424
KeyCorp	13,628		404,752
Gilead Sciences Inc.¹	6,652		404,641
Anthem Inc.¹	4,534		401,622
Burlington Northern Santa Fe Corp.	12,282		401,621
TJX Companies Inc.	16,328		401,179
ACE Ltd.	9,149		401,092
Praxair Inc.	10,756		393,132
Kroger Co.¹	22,386		391,755
American Electric Power Co. Inc.	12,825		390,393
Agilent Technologies Inc.¹	14,321		386,810
Lexmark International Inc.¹	4,238		383,369
Allergan Inc.	4,353		383,282
Xilinx Inc.¹	11,291		379,716
Principal Financial Group Inc.	10,679		376,969
Veritas Software Corp.¹	14,103		376,127
Yum! Brands Inc.¹	9,562		370,910
Ingersoll-Rand Co. Class A	5,744		370,775
Linear Technology Corp.	10,276		366,134
TXU Corp.	10,720		365,981
Fortune Brands Inc.	4,792		365,390
MetLife Inc.	10,552		364,044
Bed Bath & Beyond Inc.¹	9,752		361,994
PG&E Corp.¹	12,897		354,925
Schwab (Charles) Corp. (The)	34,187		351,784
FPL Group Inc.	5,513		350,737
Xerox Corp.¹	25,973		348,817
Air Products & Chemicals Inc.	6,997		348,521
Danaher Corp.	3,748		346,765
XL Capital Ltd. Class A	4,522		345,255
Tribune Co.	7,181		343,826
Marathon Oil Corp.	10,166		341,171
Johnson Controls Inc.	6,214		340,900
Progress Energy Inc.	7,970		340,877
Archer-Daniels-Midland Co.	19,393		340,541
Pitney Bowes Inc.	7,698		336,788
Southwest Airlines Co.	23,506		335,666
Kellogg Co.	7,822		335,564
PPG Industries Inc.	5,654		335,339
SouthTrust Corp.	10,736		333,675
Public Service Enterprise Group Inc.	7,688		329,815
Safeway Inc.¹	14,342		329,149
Equity Office Properties Trust	13,024		327,814
Juniper Networks Inc.¹	14,948		327,062
Sears, Roebuck and Co.	8,077		323,484
Genzyme Corp.¹	7,398		322,257
PACCAR Inc.	5,679		320,636
Adobe Systems Inc.	7,714		318,897
Medco Health Solutions Inc.¹	8,928		316,051
Norfolk Southern Corp.	13,031		310,398
Unocal Corp.	8,508		306,628
Consolidated Edison Inc.	7,398		304,872
Accenture Ltd.¹	12,819		304,708
Penney (J.C.) Co. Inc. (Holding Co.)	8,992		304,469
Biomet Inc.	7,699		304,110
Limited Brands Inc.	14,641		302,190
Monsanto Co.	8,704		301,071


22		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. TOTAL MARKET INDEX FUND

April 30, 2004


Security	Shares	Value
Kraft Foods Inc.	9,134	$	300,600
CIGNA Corp.	4,649		299,907
Eaton Corp.	4,986		296,069
McKesson Corp.	8,906		292,651
Electronic Data Systems Corp.	15,954		291,799
Transocean Inc.¹	10,481		291,057
Apple Computer Inc.¹	11,291		290,517
May Department Stores Co. (The)	9,363		288,380
Federated Department Stores Inc.	5,877		287,973
Marriott International Inc. Class A	6,095		287,440
Northern Trust Corp.	6,797		287,377
Broadcom Corp. Class A¹	7,608		287,278
Simon Property Group Inc.	5,840		281,546
Flextronics International Ltd.¹	17,384		279,882
Wrigley (William Jr.) Co.	4,527		279,316
MBIA Inc.	4,738		279,021
Comerica Inc.	5,337		275,549
Micron Technology Inc.¹	19,778		269,376
Dover Corp.	6,648		266,119
KLA-Tencor Corp.¹	6,386		266,105
Starwood Hotels & Resorts Worldwide Inc.	6,669		265,360
EchoStar Communications Corp.¹	7,975		264,690
Moody’s Corp.	4,099		264,426
M&T Bank Corp.	3,091		262,735
Lincoln National Corp.	5,781		259,451
Coach Inc.¹	6,058		258,071
Clorox Co.	4,981		257,916
Ameren Corp.	5,895		257,729
Bear Stearns Companies Inc. (The)	3,211		257,330
Marshall & Ilsley Corp.	6,992		257,096
Georgia-Pacific Corp.	7,300		256,230
Franklin Resources Inc.	4,649		254,905
AmSouth Bancorp	11,551		254,353
Hershey Foods Corp.	2,851		253,425
Altera Corp.¹	12,585		251,826
Univision Communications Inc. Class A¹	7,430		251,506
Computer Sciences Corp.¹	6,130		250,778
Edison International	10,705		250,497
Intuit Inc.¹	5,891		250,191
Regions Financial Corp.	7,187		249,461
Equity Residential	9,076		249,227
PPL Corp.	5,789		248,059
Block (H & R) Inc.	5,490		247,654
Valero Energy Corp.	3,884		247,644
SunGard Data Systems Inc.¹	9,424		245,684
Charter One Financial Inc.	7,344		245,069
Albertson’s Inc.	10,464		244,439
Mattel Inc.	14,318		242,833
Eastman Kodak Co.	9,405		242,555
ITT Industries Inc.	3,052		241,993
National Semiconductor Corp.¹	5,884		240,008
CIT Group Inc.	6,956		239,078
AON Corp.	9,167		238,892
Ambac Financial Group Inc.	3,459		238,671
Loews Corp.	4,102		237,957
MGIC Investment Corp.	3,227		237,572
Fiserv Inc.¹	6,373		232,997
BJ Services Co.¹	5,223		232,423
Jefferson-Pilot Corp.	4,666		231,387
Campbell Soup Co.	8,349		230,683
New York Times Co. Class A	4,915		225,156
Quest Diagnostics Inc.	2,635		222,262
Xcel Energy Inc.	13,042		218,193
Cox Communications Inc. Class A¹	6,670		218,042
Hilton Hotels Corp.	12,371		216,369
Parker Hannifin Corp.	3,912		216,294
Coca-Cola Enterprises Inc.	7,957		214,839
CSX Corp.	6,976		214,582
Newell Rubbermaid Inc.	9,034		213,564
Network Appliance Inc.¹	11,429		212,808
Constellation Energy Group Inc.	5,514		212,179
DTE Energy Co.	5,435		212,074
AmerisourceBergen Corp.	3,663		212,051
Nabors Industries Ltd.¹	4,767		211,464
Interpublic Group of Companies Inc.¹	13,425		210,638
Textron Inc.	3,800		209,684
T. Rowe Price Group Inc.	4,062		208,299
Genuine Parts Co.	5,800		207,640
XTO Energy Inc.	7,702		205,643
Donnelley (R.R.) & Sons Co.	6,989		205,616


SCHEDULES OF INVESTMENTS		23

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. TOTAL MARKET INDEX FUND

April 30, 2004


Security	Shares	Value
Knight Ridder Inc.	2,652	$	205,371
Sempra Energy	6,466		205,296
Cinergy Corp.	5,391		204,535
Avery Dennison Corp.	3,182		204,380
American Standard Companies Inc.¹	1,939		203,963
UST Inc.	5,478		203,836
Mylan Laboratories Inc.	8,890		203,670
New York Community Bancorp Inc.	8,071		202,340
Cintas Corp.	4,478		201,331
IMS Health Inc.	7,962		201,041
MedImmune Inc.¹	8,256		200,125
Cincinnati Financial Corp.	4,866		199,445
Synovus Financial Corp.	8,325		198,718
L-3 Communications Holdings Inc.	3,217		198,618
Legg Mason Inc.	2,149		197,837
Affiliated Computer Services Inc. Class A¹	4,074		197,589
Career Education Corp.¹	3,083		197,312
Murphy Oil Corp.	2,880		197,280
Avaya Inc.¹	14,408		197,101
Phelps Dodge Corp.¹	2,983		196,371
Torchmark Corp.	3,760		195,670
SAFECO Corp.	4,464		195,479
Centex Corp.	4,076		195,444
AutoZone Inc.¹	2,228		195,106
Harrah’s Entertainment Inc.	3,660		194,639
Kinder Morgan Inc.	3,201		192,732
Microchip Technology Inc.	6,848		191,881
Sovereign Bancorp Inc.	9,555		190,909
D.R. Horton Inc.	6,625		190,800
Varian Medical Systems Inc.¹	2,222		190,736
Tiffany & Co.	4,888		190,632
PeopleSoft Inc.¹	11,289		190,558
Lennar Corp. Class A	4,066		190,492
Dollar General Corp.	10,141		190,245
General Growth Properties Inc.	6,990		189,499
Laboratory Corp. of America Holdings¹	4,739		188,328
KeySpan Corp.	5,208		188,269
Qwest Communications International Inc.¹	46,582		187,260
Weatherford International Ltd.¹	4,303		187,094
Amerada Hess Corp.	2,615		186,005
Alcon Inc.	2,498		185,476
EOG Resources Inc.	3,759		185,131
First Horizon National Corp.	4,195		184,412
Bard (C.R.) Inc.	1,731		183,953
Rohm & Haas Co.	4,734		183,585
Smith International Inc.¹	3,353		183,577
North Fork Bancorp Inc.	4,890		181,517
Ecolab Inc.	6,081		181,214
Tenet Healthcare Corp.¹	15,353		180,551
Office Depot Inc.¹	10,308		180,493
Plum Creek Timber Co. Inc.	6,099		180,286
Health Management Associates Inc. Class A	7,786		180,090
Washington Post Company (The) Class B	195		179,400
Fidelity National Financial Inc.	4,899		179,303
Williams Companies Inc.	17,404		179,261
Rockwell Automation Inc.	5,451		178,193
National Commerce Financial Corp.	6,679		177,595
R.J. Reynolds Tobacco Holdings Inc.	2,717		175,980
NiSource Inc.	8,689		175,170
Union Planters Corp.	6,290		174,862
MeadWestvaco Corp.	6,667		174,342
Waters Corp.¹	4,011		173,075
Rockwell Collins Inc.	5,324		171,699
Family Dollar Stores Inc.	5,330		171,306
Popular Inc.	4,075		171,150
Dean Foods Co.¹	5,056		169,780
Chiron Corp.¹	3,636		168,710
Freeport-McMoRan Copper & Gold Inc.	5,487		167,354
Noble Corp.¹	4,492		166,923
Sanmina-SCI Corp.¹	16,647		166,803
Zions Bancorporation	2,944		166,395
Estee Lauder Companies Inc. Class A	3,638		166,293
Cooper Industries Ltd.	3,026		166,158
Vornado Realty Trust	3,293		166,132
AES Corp. (The)¹	18,938		164,192
Archstone-Smith Trust	5,981		164,059
Pulte Homes Inc.	3,336		164,031


24		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. TOTAL MARKET INDEX FUND

April 30, 2004


Security	Shares	Value
Kerr-McGee Corp.	3,352	$	164,013
Scientific-Atlanta Inc.	5,057		163,796
Delphi Corp.	16,053		163,741
Harman International Industries Inc.	2,156		163,533
Banknorth Group Inc.	5,331		163,289
Advanced Micro Devices Inc.¹	11,470		163,103
Boston Properties Inc.	3,462		162,714
RadioShack Corp.	5,272		162,167
Whole Foods Market Inc.	2,019		161,500
GlobalSantaFe Corp.	6,097		160,778
ProLogis	5,450		160,339
Express Scripts Inc.¹	2,046		158,238
Robert Half International Inc.¹	5,784		157,730
Fox Entertainment Group Inc. Class A¹	5,661		157,659
Pepsi Bottling Group Inc.	5,386		157,648
Everest Re Group Ltd.	1,843		156,987
Sunoco Inc.	2,473		155,552
Compass Bancshares Inc.	4,033		154,706
Thermo Electron Corp.¹	5,257		153,504
Ross Stores Inc.	5,022		153,171
Jones Apparel Group Inc.	4,150		151,890
Siebel Systems Inc.¹	14,749		151,620
Republic Services Inc.	5,232		150,786
DST Systems Inc.¹	3,415		150,772
El Paso Corp.	21,414		150,112
Amdocs Ltd.¹	5,623		149,291
Sherwin-Williams Co. (The)	3,919		149,118
Huntington Bancshares Inc.	6,938		148,473
GreenPoint Financial Corp.	3,774		147,186
Tyson Foods Inc. Class A	7,839		146,903
BEA Systems Inc.¹	12,770		145,706
Novellus Systems Inc.¹	4,957		143,555
Black & Decker Corp.	2,481		143,526
Leggett & Platt Inc.	6,278		141,883
Jabil Circuit Inc.¹	5,369		141,688
Celgene Corp.¹	2,739		141,579
Radian Group Inc.	3,036		141,204
Wendy’s International Inc.	3,617		141,063
JDS Uniphase Corp.¹	46,119		140,202
Expeditors International Washington Inc.	3,486		140,102
NCR Corp.¹	3,127		139,746
Unisys Corp.¹	10,716		139,629
Patterson Dental Co.¹	1,890		139,293
Nucor Corp.	2,342		139,115
NTL Inc.¹	2,450		139,087
Grainger (W.W.) Inc.	2,652		138,965
Commerce Bancorp Inc.	2,432		138,648
SUPERVALU Inc.	4,494		138,370
Manpower Inc.	2,946		138,167
Omnicare Inc.	3,324		137,880
UNUMProvident Corp.	8,817		137,104
Smurfit-Stone Container Corp.	7,972		137,039
Synopsys Inc.¹	5,118		136,804
Scripps (E.W.) Co. Class A	1,296		136,793
E*TRADE Financial Corp.¹	12,036		136,729
Check Point Software Technologies Ltd.¹	5,825		136,480
Millennium Pharmaceuticals Inc.¹	9,095		136,334
Sealed Air Corp.¹	2,773		136,099
McCormick & Co. Inc.	3,970		135,615
ImClone Systems Inc.¹	2,025		135,432
King Pharmaceuticals Inc.¹	7,836		135,171
Solectron Corp.¹	27,514		134,819
ENSCO International Inc.	4,909		134,359
Mohawk Industries Inc.¹	1,732		133,606
PETsMART Inc.	4,803		133,043
Cablevision Systems Corp.¹	6,083		132,792
Oxford Health Plans Inc.	2,434		132,507
VeriSign Inc.¹	8,155		131,540
Kimco Realty Corp.	3,073		131,340
Old Republic International Corp.	5,643		131,030
Lear Corp.	2,160		130,939
XM Satellite Radio Holdings Inc. Class A¹	5,457		130,750
Teradyne Inc.¹	6,387		130,167
PMI Group Inc. (The)	3,015		129,735
CenturyTel Inc.	4,490		129,671
Sepracor Inc.¹	2,707		129,422
Watson Pharmaceuticals Inc.¹	3,612		128,623
Rouse Co. (The)	2,967		128,471
VF Corp.	2,779		128,279
Mercury Interactive Corp.¹	3,008		127,990


SCHEDULES OF INVESTMENTS		25

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. TOTAL MARKET INDEX FUND

April 30, 2004


Security	Shares	Value
BMC Software Inc.¹	7,359	$	127,311
Royal Caribbean Cruises Ltd.	3,127		126,737
Hillenbrand Industries Inc.	1,877		126,698
Applera Corp. - Applied Biosystems Group	6,799		126,257
ChoicePoint Inc.¹	2,873		126,182
Pioneer Natural Resources Co.	3,853		126,032
Citizens Communications Co.¹	9,564		124,715
Whirlpool Corp.	1,898		124,338
Bunge Ltd.	3,355		124,303
Invitrogen Corp.¹	1,714		123,802
Liz Claiborne Inc.	3,520		123,552
Wisconsin Energy Corp.	3,915		122,931
Duke Realty Corp.	4,215		122,909
Pactiv Corp.¹	5,338		122,507
Autodesk Inc.	3,649		122,241
Engelhard Corp.	4,185		121,532
Dun & Bradstreet Corp.¹	2,318		121,116
American Power Conversion Corp.	6,481		120,935
CDW Corp.	1,934		120,856
SanDisk Corp.¹	5,228		120,819
Public Storage Inc.	2,890		120,773
Fastenal Co.	2,195		120,440
Brunswick Corp.	2,918		119,959
Barr Pharmaceuticals¹	2,889		119,662
Pinnacle West Capital Corp.	3,046		118,977
Nordstrom Inc.	3,336		118,862
Novell Inc.¹	12,314		118,707
iStar Financial Inc.	3,334		118,490
Sirius Satellite Radio Inc.¹	35,858		118,331
Chico’s FAS Inc.¹	2,892		117,791
Providian Financial Corp.¹	9,706		117,734
IVAX Corp.¹	5,524		117,661
ServiceMaster Co. (The)	9,696		117,612
Fisher Scientific International Inc.¹	2,002		117,217
Brinker International Inc.¹	3,043		117,034
Janus Capital Group Inc.	7,676		116,675
Stanley Works (The)	2,742		116,562
AutoNation Inc.¹	6,797		115,685
SCANA Corp.	3,345		115,068
Energizer Holdings Inc.¹	2,645		114,529
Sigma-Aldrich Corp.	2,015		114,130
RenaissanceRe Holdings Ltd.	2,166		114,127
GTECH Holdings Corp.	1,871		113,981
Beckman Coulter Inc.	2,041		113,969
Ameritrade Holding Corp.¹	9,310		113,954
Mercantile Bankshares Corp.	2,650		113,738
Cadence Design Systems Inc.¹	8,868		113,688
AvalonBay Communities Inc.	2,290		113,653
Equifax Inc.	4,629		113,457
Vulcan Materials Co.	2,451		113,334
Zebra Technologies Corp. Class A¹	1,545		113,233
Energy East Corp.	4,799		113,016
Ball Corp.	1,712		112,992
DENTSPLY International Inc.	2,326		112,718
Marvell Technology Group Ltd.¹	2,908		112,627
Ashland Inc.	2,342		112,182
Sabre Holdings Corp.	4,755		112,170
Iron Mountain Inc.¹	2,464		112,137
Goodrich (B.F.) Co.	3,891		112,022
Telephone & Data Systems Inc.	1,698		112,000
Lincare Holdings Inc.¹	3,213		111,587
Lamar Advertising Co.¹	2,717		111,560
Hibernia Corp. Class A	5,117		111,499
Foot Locker Inc.	4,644		111,456
Caesars Entertainment Inc.¹	8,358		110,744
SPX Corp.	2,487		110,298
Pepco Holdings Inc.	5,813		110,098
Tellabs Inc.¹	12,600		109,998
Alberto-Culver Co.	2,329		109,836
Michaels Stores Inc.	2,181		109,115
Darden Restaurants Inc.	4,810		108,995
DaVita Inc.¹	2,130		108,843
Bausch & Lomb Inc.	1,724		108,319
Red Hat Inc.¹	4,768		108,281
TCF Financial Corp.	2,183		108,168
Temple-Inland Inc.	1,746		107,850
Ceridian Corp.¹	5,035		107,648
Toys R Us Inc.¹	6,966		107,625
Diebold Inc.	2,334		107,574
Mandalay Resort Group	1,854		106,512
Cephalon Inc.¹	1,871		106,479


26		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. TOTAL MARKET INDEX FUND

April 30, 2004


Security	Shares	Value
CH Robinson Worldwide Inc.	2,586	$	106,129
Eastman Chemical Co.	2,481		105,616
Health Care Property Investors Inc.	4,418		105,590
Fluor Corp.	2,741		104,597
NVIDIA Corp.¹	5,067		104,076
Constellation Brands Inc.¹	3,135		103,863
Chesapeake Energy Corp.	7,485		102,919
Citrix Systems Inc.¹	5,381		102,508
Crown Castle International Corp.¹	7,339		102,379
Henry Schein Inc.¹	1,451		102,252
Allied Waste Industries Inc.¹	8,118		102,206
Dollar Tree Stores Inc.¹	3,773		101,682
Coventry Health Care Inc.¹	2,394		100,165
Comverse Technology Inc.¹	6,122		100,156
White Mountains Insurance Group Ltd.	194		99,910
Pall Corp.	4,190		99,638
Williams-Sonoma Inc.¹	3,065		99,551
Monster Worldwide Inc.¹	3,885		99,495
Dana Corp.	4,932		99,429
Harris Corp.	2,205		99,335
Abercrombie & Fitch Co. Class A	3,155		99,225
Precision Castparts Corp.	2,204		99,202
Doral Financial Corp.	3,018		98,960
PartnerRe Ltd.	1,726		98,900
Lyondell Chemical Co.	6,046		98,852
Gallagher (Arthur J.) & Co.	3,046		98,173
Hasbro Inc.	5,182		97,888
Boise Cascade Corp.	2,898		97,750
Apogent Technologies Inc.¹	3,015		97,746
Pogo Producing Co.	1,981		97,703
Questar Corp.	2,748		97,472
PacifiCare Health Systems Inc.¹	2,715		97,088
CenterPoint Energy Inc.	8,996		97,067
Gentex Corp.	2,466		96,988
Peabody Energy Corp.	2,068		96,969
Liberty Property Trust	2,653		96,967
Host Marriott Corp.¹	8,119		96,616
Health Net Inc.¹	3,793		96,494
Edwards (A.G.) Inc.	2,625		96,049
Commerce Bancshares Inc.	2,137		95,951
Pentair Inc.	1,609		95,880
United States Steel Corp.	3,343		95,710
Outback Steakhouse Inc.	2,174		95,504
Associated Bancorp	2,317		94,881
Arrow Electronics Inc.¹	3,731		94,320
Berkley (W.R.) Corp.	2,315		93,758
Independence Community Bank Corp.	2,565		93,443
Lam Research Corp.¹	4,213		93,276
Patterson-UTI Energy Inc.¹	2,574		93,153
Cognizant Technology Solutions Corp.¹	2,151		93,052
OSI Pharmaceuticals Inc.¹	1,261		93,049
Navistar International Corp.¹	2,049		92,512
Bemis Co.	3,424		92,482
ARAMARK Corp. Class B	3,230		92,378
Storage Technology Corp.¹	3,499		91,919
MGM Mirage¹	2,000		91,620
LSI Logic Corp.¹	12,314		91,616
International Flavors & Fragrances Inc.	2,525		91,531
Manor Care Inc.	2,817		91,383
Equitable Resources Inc.	1,935		90,926
Federated Investors Inc. Class B	3,087		90,758
Belo (A.H.) Corp.	3,188		90,730
CarMax Inc.¹	3,496		90,616
Premcor Inc.¹	2,620		90,207
WebMD Corp.¹	10,256		90,150
ALLETE Inc.	2,603		89,934
Corinthian Colleges Inc.¹	2,930		89,717
Intersil Corp. Class A	4,512		89,112
International Rectifier Corp.¹	2,243		88,913
Cooper Cameron Corp.¹	1,836		88,771
Triad Hospitals Inc.¹	2,597		88,324
KB Home	1,278		88,093
Friedman, Billings, Ramsey Group, Inc. Class A	4,733		87,561
Avnet Inc.¹	4,038		87,382
Alliant Energy Corp.	3,513		87,333
Humana Inc.¹	5,361		87,331
American Tower Corp. Class A¹	6,999		87,138
Developers Diversified Realty Corp.	2,654		86,919
Valley National Bancorp	3,350		86,585


SCHEDULES OF INVESTMENTS		27

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. TOTAL MARKET INDEX FUND

April 30, 2004


Security	Shares	Value
Fulton Financial Corp.	4,176	$	86,026
Smucker (J.M.) Co. (The)	1,640		85,772
UnionBanCal Corp.	1,603		85,648
Atmel Corp.¹	14,642		85,509
People’s Bank	2,024		85,433
Network Associates Inc.¹	5,389		84,500
NSTAR	1,741		84,264
AMB Property Corp.	2,766		83,810
UnitedGlobalCom Inc. Class A¹	11,203		83,798
Newfield Exploration Co.¹	1,588		83,656
Millipore Corp.¹	1,592		83,469
Compuware Corp.¹	10,905		83,423
Vishay Intertechnology Inc.¹	4,793		83,398
QLogic Corp.¹	3,086		83,291
MDU Resources Group Inc.	3,717		83,261
Hospitality Properties Trust	2,107		82,342
Markel Corp.¹	280		82,043
City National Corp.	1,326		81,748
UTStarcom Inc.¹	3,101		81,711
Astoria Financial Corp.	2,352		80,956
Tektronix Inc.	2,728		80,749
Getty Images Inc.¹	1,478		80,699
Investors Financial Services Corp.	2,076		80,694
AmeriCredit Corp.¹	4,952		80,272
Noble Energy Inc.	1,741		80,260
Northeast Utilities	4,320		79,272
Certegy Inc.	2,215		79,253
Renal Care Group Inc.¹	1,598		79,069
Valspar Corp. (The)	1,591		78,993
Bowater Inc.	1,882		78,950
Amphenol Corp. Class A¹	2,497		78,930
Sonoco Products Co.	3,174		78,906
Andrew Corp.¹	4,646		78,750
Hudson City Bancorp Inc.	2,317		78,315
Smithfield Foods Inc.¹	2,930		77,938
Protein Design Labs Inc.¹	3,183		77,920
Protective Life Corp.	2,160		77,674
Apartment Investment & Management Co. Class A	2,756		77,637
Rent-A-Center Inc.¹	2,652		77,624
TECO Energy Inc.	6,082		77,424
O’Reilly Automotive Inc.¹	1,724		77,390
NBTY Inc.¹	2,081		77,330
Advance Auto Parts Inc.¹	1,790		77,238
Macerich Co. (The)	1,843		77,166
Symbol Technologies Inc.	6,413		76,956
3Com Corp.¹	12,490		76,938
National-Oilwell Inc.¹	2,752		76,836
JetBlue Airways Corp.¹	2,772		76,729
Wilmington Trust Corp.	2,195		76,320
Alliant Techsystems Inc.¹	1,282		76,010
NVR Inc.¹	168		75,768
Viad Corp.	3,032		75,679
Ryder System Inc.	2,055		75,603
Hormel Foods Corp.	2,476		75,493
Westwood One Inc.¹	2,555		75,475
Del Monte Foods Co.¹	6,811		75,330
Bank of Hawaii Corp.	1,714		74,936
New Plan Excel Realty Trust	3,339		74,927
Molex Inc.	2,508		74,688
Fair Isaac Corp.	2,213		74,622
Medicis Pharmaceutical Corp. Class A	1,738		74,595
Cytyc Corp.¹	3,476		74,386
Chelsea Property Group Inc.	1,458		74,358
Cullen/Frost Bankers Inc.	1,717		74,346
Louisiana-Pacific Corp.	3,150		74,309
Neurocrine Biosciences Inc.¹	1,119		73,440
Sky Financial Group Inc.	3,060		73,134
MGI Pharma Inc.¹	1,181		73,009
Brown & Brown Inc.	1,869		72,910
Rowan Companies Inc.¹	3,256		72,609
Applebee’s International Inc.	1,867		72,402
Reliant Energy Inc.¹	8,700		72,297
Circuit City Stores Inc.	6,188		72,276
Jacobs Engineering Group Inc.¹	1,732		72,242
Hubbell Inc. Class B	1,605		72,129
United Dominion Realty Trust Inc.	4,017		72,105
Molex Inc. Class A	2,790		71,870
Service Corp. International¹	9,717		71,809
BorgWarner Inc.	875		71,697
PMC-Sierra Inc.¹	5,879		71,430
Universal Health Services Inc. Class B	1,614		70,855


28		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. TOTAL MARKET INDEX FUND

April 30, 2004


Security	Shares	Value
Deluxe Corp.	1,712	$	70,723
Leucadia National Corp.	1,435		70,702
IDEXX Laboratories Inc.¹	1,154		70,694
Eaton Vance Corp.	1,933		70,574
Mack-Cali Realty Corp.	1,887		70,479
Donaldson Co. Inc.	2,562		70,276
Education Management Corp.¹	1,980		70,211
PerkinElmer Inc.	3,643		70,128
Rite Aid Corp.¹	14,310		70,119
Maytag Corp.	2,502		69,806
Edwards Lifesciences Corp.¹	2,023		69,713
Colonial BancGroup Inc. (The)	4,040		69,609
Stericycle Inc.¹	1,454		69,530
Cummins Inc.	1,161		69,439
OGE Energy Corp.	2,872		69,072
Martin Marietta Materials Inc.	1,596		69,027
Varco International Inc.¹	3,327		68,836
Great Plains Energy Inc.	2,205		68,818
SEI Investment Co.	2,312		68,250
INAMED Corp.¹	1,158		68,137
Weingarten Realty Investors	2,349		67,910
Cabot Corp.	2,008		67,870
Thornburg Mortgage Inc.	2,613		67,624
Convergys Corp.¹	4,657		67,620
Community Health Systems Inc.¹	2,621		67,596
Regency Centers Corp.	1,780		67,480
Charles River Laboratories International Inc.¹	1,460		67,160
Conexant Systems Inc.¹	15,427		67,107
Puget Energy Inc.	3,055		67,088
Annaly Mortgage Management Inc.	3,858		66,743
Cheesecake Factory (The)¹	1,572		66,574
CheckFree Corp.¹	2,209		66,358
ADC Telecommunications Inc.¹	26,408		66,020
Pride International Inc.¹	3,905		65,877
Agere Systems Inc. Class B¹	30,324		65,803
ONEOK Inc.	3,138		65,741
Activision Inc.¹	4,362		65,692
Nationwide Financial Services Inc.	1,907		65,601
Conseco Inc.¹	3,289		65,122
Ruby Tuesday Inc.	2,176		65,106
Meredith Corp.	1,275		64,949
Covance Inc.¹	1,912		64,511
Krispy Kreme Doughnuts Inc.¹	1,981		64,402
Aqua America Inc.	3,136		64,131
Transatlantic Holdings Inc.	715		63,993
National Fuel Gas Co.	2,612		63,968
Regis Corp.	1,470		63,827
Webster Financial Corp.	1,467		63,815
Ryland Group Inc.	807		63,713
Polaris Industries Inc.	1,482		63,578
Valeant Pharmaceuticals International	2,751		63,548
Tech Data Corp.¹	1,866		63,444
CIENA Corp.¹	15,251		63,139
Polycom Inc.¹	3,307		63,098
Seagate Technology	5,043		63,088
Dade Behring Holdings Inc.¹	1,370		63,020
Borders Group Inc.	2,623		62,873
Acxiom Corp.	2,716		62,848
Vectren Corp.	2,602		62,838
StanCorp Financial Group Inc.	1,014		62,736
Accredo Health Inc.¹	1,618		62,536
Graco Inc.	2,214		62,435
Cooper Companies Inc.	1,156		62,424
Crane Co.	2,025		62,390
Washington Federal Inc.	2,667		62,301
Agere Systems Inc. Class A¹	27,525		62,206
Respironics Inc.¹	1,184		62,053
IndyMac Bancorp Inc.	1,924		61,876
HCC Insurance Holdings Inc.	1,930		61,799
First American Corp.	2,277		61,752
Corporate Executive Board Co. (The)	1,191		61,515
Toll Brothers Inc.¹	1,549		61,294
Hunt (J.B.) Transport Services Inc.¹	1,935		61,262
Reynolds & Reynolds Co. (The) Class A	2,140		61,118
AMETEK Inc.	2,304		61,056
American Pharmaceutical Partners Inc.¹	1,439		60,870
Federal Realty Investment Trust	1,640		60,811


SCHEDULES OF INVESTMENTS		29

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. TOTAL MARKET INDEX FUND

April 30, 2004


Security	Shares	Value
Fairchild Semiconductor International Inc. Class A¹	3,119	$	60,727
Dow Jones & Co. Inc.	1,317		60,701
Entercom Communications Corp.¹	1,331		60,694
Pier 1 Imports Inc.	2,935		60,637
Garmin Ltd.	1,884		60,589
Allmerica Financial Corp.¹	1,743		60,587
ICOS Corp.¹	1,891		60,493
Herman Miller Inc.	2,299		60,418
Rambus Inc.¹	3,243		60,417
Ventas Inc.	2,727		60,239
Brown-Forman Corp. Class B	1,283		60,121
HON Industries Inc.	1,623		60,067
Carlisle Companies Inc.	1,007		59,665
Westar Energy Inc.	2,922		59,638
Polo Ralph Lauren Corp.	1,719		59,477
AnnTaylor Stores Corp.¹	1,466		59,417
Oshkosh Truck Corp.	1,160		59,392
AGCO Corp.¹	3,078		59,251
Calpine Corp.¹	13,636		59,180
Martek Biosciences Corp.¹	932		59,173
Rayonier Inc.	1,515		59,085
Amylin Pharmaceuticals Inc.¹	2,626		58,822
Church & Dwight Co. Inc.	1,306		58,705
Hughes Supply Inc.	1,050		58,685
Hawaiian Electric Industries Inc.	1,176		58,518
FirstMerit Corp.	2,483		58,499
CNF Inc.	1,600		58,496
CBRL Group Inc.	1,557		58,465
ITT Educational Services Inc.¹	1,445		58,277
Reebok International Ltd.	1,601		58,244
Saks Inc.	4,041		58,190
DeVry Inc.¹	2,017		58,090
Snap-On Inc.	1,718		58,034
Allegheny Energy Inc.¹	4,206		57,959
Unitrin Inc.	1,458		57,810
Massey Energy Co.	2,468		57,801
Waddell & Reed Financial Inc. Class A	2,597		57,731
AMR Corp.¹	5,086		57,726
Coors (Adolf) Company Class B	877		57,628
Integrated Circuit Systems Inc.¹	2,431		57,590
Level 3 Communications Inc.¹	20,308		57,472
Arden Realty Inc.	2,035		57,428
Viacom Inc. Class A	1,465		57,369
Affymetrix Inc.¹	1,870		57,147
Harsco Corp.	1,311		57,068
RPM International Inc.	3,782		57,033
Gen-Probe Inc.¹	1,710		57,011
Evergreen Resources Inc.¹	1,419		56,944
BISYS Group Inc. (The)¹	3,926		56,927
Catellus Development Corp.	2,633		56,741
Weight Watchers International Inc.¹	1,450		56,550
Sybase Inc.¹	3,301		56,447
Tom Brown Inc.¹	1,178		56,403
TECHNE Corp.¹	1,442		56,180
IKON Office Solutions Inc.	5,046		56,162
Pan Pacific Retail Properties Inc.	1,277		56,099
Plantronics Inc.¹	1,472		55,862
Pacific Sunwear of California Inc.¹	2,598		55,779
Andrx Group¹	2,435		55,713
UGI Corp.	1,760		55,440
Jefferies Group Inc.	1,623		55,344
Strayer Education Inc.	442		55,237
Big Lots Inc.¹	3,899		55,210
Lee Enterprises Inc.	1,154		55,138
Ask Jeeves Inc.¹	1,546		54,837
Owens-Illinois Inc.¹	3,916		54,667
SpectraSite Inc.¹	1,462		54,635
Grant Prideco Inc.¹	3,581		54,610
Cypress Semiconductor Corp.¹	3,905		54,553
Silicon Laboratories Inc.¹	1,153		54,364
Dreyer’s Grand Ice Cream Holdings Inc.	688		54,345
AGL Resources Inc.	1,898		54,283
HRPT Properties Trust	5,675		54,196
Patina Oil & Gas Corp.	1,946		54,099
DPL Inc.	3,069		54,076
Lubrizol Corp.	1,700		54,060
Affiliated Managers Group Inc.¹	1,110		54,057
Maxtor Corp.¹	8,296		54,007
First Midwest Bancorp Inc.	1,597		53,899
Arch Coal Inc.	1,758		53,812


30		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. TOTAL MARKET INDEX FUND

April 30, 2004


Security	Shares	Value
Terex Corp.¹	1,635	$	53,710
Extended Stay America Inc.	2,757		53,624
Roper Industries Inc.	1,103		53,551
Western Digital Corp.¹	6,626		53,538
First Health Group Corp.¹	3,199		53,423
CenterPoint Properties Corp.	740		53,354
NII Holdings Inc. Class B¹	1,524		53,340
Whitney Holding Corp.	1,297		53,177
Cathay General Bancorp	816		53,122
Claire’s Stores Inc.	2,600		52,988
Cooper Tire & Rubber Co.	2,474		52,919
Mills Corp.	1,301		52,821
Metro-Goldwyn-Mayer Inc.¹	2,503		52,613
BJ’s Wholesale Club Inc.¹	2,170		52,579
Florida Rock Industries Inc.	1,320		52,523
Barnes & Noble Inc.¹	1,758		52,511
Station Casinos Inc.	1,164		52,473
Tidewater Inc.	1,856		52,358
UCBH Holdings Inc.	1,414		52,346
WPS Resources Corp.	1,141		52,269
AmerUs Group Co.	1,354		52,264
PepsiAmericas Inc.	2,605		52,178
Teleflex Inc.	1,141		52,087
Hudson United Bancorp	1,457		52,059
ResMed Inc.¹	1,054		51,941
Standard-Pacific Corp.	1,029		51,903
Old National Bancorp	2,171		51,887
FMC Technologies Inc.¹	1,899		51,748
Kennametal Inc.	1,197		51,663
Avocent Corp.¹	1,609		51,633
Timken Co. (The)	2,339		51,598
Performance Food Group Co.¹	1,468		51,571
Media General Inc. Class A	717		51,538
Steris Corp.¹	2,325		51,522
Titan Corp. (The)¹	2,682		51,494
Human Genome Sciences Inc.¹	4,220		51,484
National Instruments Corp.	1,681		51,371
M.D.C. Holdings Inc.	831		51,348
Toro Co.	882		51,288
Pixar Inc.¹	749		51,157
Piedmont Natural Gas Co.	1,263		51,152
St. Joe Company (The)	1,304		51,117
South Financial Group Inc. (The)	1,844		51,079
Westamerica Bancorp	1,049		50,981
Alliance Data Systems Corp.¹	1,465		50,938
York International Corp.	1,296		50,803
American Financial Realty Trust	3,432		50,794
Pediatrix Medical Group Inc.¹	708		50,622
Briggs & Stratton Corp.	723		50,610
Apria Healthcare Group Inc.¹	1,752		50,528
Kmart Holding Corp.¹	1,129		50,511
Sylvan Learning Systems Inc.¹	1,429		50,372
Ingram Micro Inc. Class A¹	4,161		49,724
MONY Group Inc. (The)¹	1,605		49,675
Semtech Corp.¹	2,361		49,628
Zale Corp.¹	887		49,601
Loews Corporation - Carolina Group	1,890		49,594
Valassis Communications Inc.¹	1,602		49,502
Raymond James Financial Inc.	1,969		49,461
Forest Oil Corp.¹	1,884		49,455
Shurgard Storage Centers Inc. Class A	1,483		49,384
Health Care REIT Inc.	1,546		49,379
BRE Properties Inc. Class A	1,557		49,357
CarrAmerica Realty Corp.	1,723		49,123
Nicor Inc.	1,445		49,116
CBL & Associates Properties Inc.	977		49,094
BearingPoint Inc.¹	4,891		49,008
BancorpSouth Inc.	2,420		48,957
Ligand Pharmaceuticals Inc. Class B¹	2,284		48,900
Corn Products International Inc.	1,150		48,875
McClatchy Co. (The) Class A	688		48,848
Crescent Real Estate Equities Co.	3,151		48,746
Furniture Brands International Inc.	1,732		48,738
Crown Holdings Inc.¹	5,772		48,716
SL Green Realty Corp.	1,194		48,715
Duquesne Light Holdings Inc.	2,595		48,708
Ethan Allen Interiors Inc.	1,171		48,678
Erie Indemnity Co. Class A	1,052		48,623
Brink’s Co. (The)	1,752		48,583
Avid Technology Inc.¹	1,012		48,546
Peoples Energy Corp.	1,161		48,530
Airgas Inc.	2,174		48,154


SCHEDULES OF INVESTMENTS		31

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. TOTAL MARKET INDEX FUND

April 30, 2004


Security	Shares	Value
Western Wireless Corp. Class A¹	2,303	$	47,948
Goodyear Tire & Rubber Co. (The)¹	5,503		47,931
Greater Bay Bancorp	1,678		47,605
East West Bancorp Inc.	844		47,543
Varian Inc.¹	1,157		47,483
Healthcare Realty Trust Inc.	1,324		47,465
Select Medical Corp.	2,504		47,451
Pep Boys-Manny, Moe & Jack Inc.	1,726		47,413
Pharmaceutical Product Development Inc.¹	1,603		47,401
Visteon Corp.	4,359		47,339
Neiman-Marcus Group Inc. Class A	972		47,278
RF Micro Devices Inc.¹	6,407		47,156
Camden Property Trust	1,114		47,144
EarthLink Inc.¹	5,109		47,054
Chicago Mercantile Exchange Holdings Inc.	401		47,037
Integrated Device Technology Inc.¹	3,495		47,008
Commerce Group Inc.	1,018		46,981
Nektar Therapeutics¹	2,318		46,940
Flir Systems Inc.¹	999		46,863
Medicines Co. (The)¹	1,430		46,775
Fremont General Corp.	2,167		46,699
CapitalSource Inc.¹	2,202		46,374
CACI International Inc. Class A¹	1,016		46,228
W Holding Co. Inc.	2,707		46,127
Idex Corp.	976		46,116
Trustmark Corp.	1,729		46,026
Advanced Fibre Communications Inc.¹	2,755		46,008
Imation Corp.	1,180		45,985
Donnelley (R.H.) Corp.¹	1,015		45,969
Emulex Corp.¹	2,756		45,943
Scotts Co. (The) Class A¹	696		45,901
AptarGroup Inc.	1,167		45,863
Brocade Communications Systems Inc.¹	8,570		45,850
Cree Inc.¹	2,467		45,763
New Century Financial Corp.	1,077		45,697
Pharmaceutical Resources Inc.¹	1,132		45,620
Montpelier Re Holdings Ltd	1,332		45,554
Trizec Properties Inc.	3,170		45,394
ArvinMeritor Inc.	2,193		45,373
Thomas & Betts Corp.	1,886		45,339
First Industrial Realty Trust Inc.	1,342		45,158
Realty Income Corp.	1,180		45,135
CEC Entertainment Inc.¹	1,320		45,104
Cytec Industries Inc.	1,145		45,021
Yellow Roadway Corp.¹	1,322		45,014
WGL Holdings Inc.	1,591		44,993
Engineered Support Systems Inc.	925		44,983
Park National Corp.	389		44,910
CMS Energy Corp.¹	5,382		44,724
Applied Micro Circuits Corp.¹	10,140		44,717
Henry (Jack) & Associates Inc.	2,454		44,638
Packaging Corporation of America	2,028		44,575
Lafarge North America Inc.	1,007		44,560
Mercury General Corp.	872		44,463
Hyperion Solutions Corp.¹	1,154		44,291
Worthington Industries Inc.	2,449		44,204
Electronics For Imaging Inc.¹	1,741		44,187
Vicuron Pharmaceuticals Inc.¹	1,935		44,137
Linens ‘n Things Inc.¹	1,358		44,054
Readers Digest Association Inc. (The)	3,074		44,050
Perrigo Co.	2,041		44,024
Radio One Inc. Class D¹	2,316		43,911
Joy Global Inc.	1,672		43,890
United Stationers Inc.¹	1,154		43,852
IMC Global Inc.	3,488		43,844
FMC Corp.¹	1,019		43,705
IPC Holdings Ltd.	1,180		43,424
Tommy Hilfiger Corp.¹	2,765		43,134
Key Energy Services Inc.¹	4,046		43,130
American Axle & Manufacturing Holdings Inc.¹	1,121		43,125
Olin Corp.	2,492		43,037
SCP Pool Corp.¹	1,068		42,944
Urban Outfitters Inc.¹	930		42,938
Universal Corp.	853		42,855
Stone Energy Corp.¹	867		42,656
Harte-Hanks Inc.	1,773		42,481
Reckson Associates Realty Corp.	1,781		42,334
Sonic Corp.¹	1,309		42,241


32		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. TOTAL MARKET INDEX FUND

April 30, 2004


Security	Shares	Value
Alkermes Inc.¹	2,754	$	42,219
American National Insurance Co.	448		42,215
Diamond Offshore Drilling Inc.	1,864		42,052
Energen Corp.	1,016		42,012
First Bancorp	1,137		41,910
Lancaster Colony Corp.	1,014		41,878
American Greetings Corp. Class A¹	2,035		41,717
Global Payments Inc.	869		41,695
Macromedia Inc.¹	2,021		41,633
Texas Regional Bancshares Inc. Class A	984		41,544
Nu Skin Enterprises Inc. Class A	1,755		41,541
US Oncology Inc.¹	2,782		41,452
Community First Bankshares Inc.	1,288		41,448
Cognex Corp.	1,304		41,441
Gemstar-TV Guide International Inc.¹	7,400		41,366
Essex Property Trust Inc.	678		41,324
Southwest Bancorp of Texas Inc.	1,014		41,239
Alexander & Baldwin Inc.	1,305		41,225
Foundry Networks Inc.¹	3,644		41,177
Wynn Resorts Ltd.¹	1,031		41,168
Parametric Technology Corp.¹	8,986		41,156
Hovnanian Enterprises Inc. Class A¹	1,144		41,150
Minerals Technologies Inc.	700		41,055
Pennsylvania Real Estate Investment Trust	1,268		41,020
Landstar System Inc.¹	912		41,004
Tesoro Petroleum Corp.¹	2,017		40,965
Knight Trading Group Inc.¹	3,519		40,891
Silicon Valley Bancshares¹	1,188		40,820
Take-Two Interactive Software Inc.¹	1,411		40,764
Tularik Inc.¹	1,651		40,730
Beazer Homes USA Inc.	413		40,660
Abgenix Inc.¹	2,474		40,252
Citizens Banking Corp.	1,314		40,248
Provident Financial Group Inc.	1,019		40,128
Invacare Corp.	1,007		40,109
Intergraph Corp.¹	1,586		39,983
United Rentals Inc.¹	2,320		39,904
Copart Inc.¹	2,092		39,664
Helmerich & Payne Inc.	1,466		39,567
Marvel Enterprises Inc.¹	2,083		39,556
Werner Enterprises Inc.	1,978		39,540
Western Gas Resources Inc.	726		39,531
American Eagle Outfitters Inc.¹	1,536		39,460
MAF Bancorp Inc.	965		39,420
Highwoods Properties Inc.	1,746		39,372
Trimble Navigation Ltd.¹	1,569		39,303
Atmos Energy Corp.	1,589		39,153
United Bancshares Inc.	1,303		39,103
Callaway Golf Co.	2,291		38,878
Trinity Industries Inc.	1,280		38,771
IDACORP Inc.	1,301		38,575
LifePoint Hospitals Inc.¹	1,078		38,549
Kronos Inc.¹	1,056		38,523
Aeropostale Inc.¹	1,749		38,461
Banta Corp.	864		38,431
Corrections Corp. of America¹	1,054		38,408
Wiley (John) & Sons Inc. Class A	1,254		38,372
Skyworks Solutions Inc.¹	4,480		38,349
Sybron Dental Specialties Inc.¹	1,309		38,288
University of Phoenix Online¹	438		38,132
Washington Real Estate Investment Trust	1,401		38,107
Akamai Technologies Inc.¹	3,223		38,096
Potlatch Corp.	1,005		38,069
PNM Resources Inc.	1,300		37,934
Impac Mortgage Holdings Inc.	2,016		37,921
Timberland Co. Class A¹	603		37,820
Tractor Supply Co.¹	968		37,810
Great Lakes Chemical Corp.	1,504		37,780
Dycom Industries Inc.¹	1,599		37,704
Cerner Corp.¹	880		37,682
OmniVision Technologies Inc.¹	1,688		37,646
Arbitron Inc.¹	1,010		37,622
Kroll Inc.¹	1,264		37,465
Cimarex Energy Co.¹	1,357		37,440
Dionex Corp.¹	733		37,405
Blyth Inc.	1,150		37,386
Varian Semiconductor Equipment Associates Inc.¹	1,148		37,379
Flowserve Corp.¹	1,748		37,355


SCHEDULES OF INVESTMENTS		33

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. TOTAL MARKET INDEX FUND

April 30, 2004


Security	Shares	Value
Hollinger International Inc.	1,869	$	37,287
Taro Pharmaceutical Industries Ltd.¹	862		37,282
Panera Bread Co. Class A¹	912		37,273
Prentiss Properties Trust	1,163		37,263
Cymer Inc.¹	1,161		37,129
PETCO Animal Supplies Inc.¹	1,263		37,082
Hercules Inc.¹	3,336		37,063
Emmis Communications Corp.¹	1,583		37,042
Ohio Casualty Corp.¹	1,885		36,984
Unit Corporation¹	1,307		36,923
MSC Industrial Direct Co. Inc. Class A	1,287		36,885
Ferro Corp.	1,422		36,816
Cousins Properties Inc.	1,309		36,809
Gateway Inc.¹	7,636		36,806
Nationwide Health Properties Inc.	2,020		36,623
MPS Group Inc.¹	3,346		36,605
Cumulus Media Inc. Class A¹	1,741		36,596
Flowers Foods Inc.	1,492		36,539
Scientific Games Corp. Class A¹	2,025		36,531
Silicon Storage Technology Inc.¹	2,752		36,464
Georgia Gulf Corp.	1,144		36,448
SkyWest Inc.	2,000		36,400
Cabot Oil & Gas Corp.	1,018		36,343
TIBCO Software Inc.¹	4,837		36,278
Mentor Graphics Corp.¹	2,178		36,133
International Speedway Corp. Class A	857		36,105
KEMET Corp.¹	2,908		36,001
Mentor Corp.	1,135		35,980
LNR Property Corp.	715		35,907
Bob Evans Farms Inc.	1,171		35,903
Airtran Holdings Inc.¹	2,937		35,861
Commercial Federal Corp.	1,396		35,821
Dillards Inc. Class A	2,128		35,814
First Niagara Financial Group Inc.	2,840		35,784
Dynegy Inc. Class A¹	9,024		35,735
American Financial Group Inc.	1,163		35,704
P.F. Chang’s China Bistro Inc.¹	730		35,668
La-Z-Boy Inc.	1,710		35,636
Quiksilver Inc.¹	1,647		35,625
ADTRAN Inc.	1,450		35,539
La Quinta Corp.¹	4,934		35,475
Westport Resources Corp.¹	1,036		35,462
Mueller Industries Inc.	1,056		35,429
Jack in the Box Inc.¹	1,308		35,421
Delphi Financial Group Inc. Class A	879		35,301
Ralcorp Holdings Inc.¹	1,013		35,263
Pacific Capital Bancorp	961		35,249
Philadelphia Consolidated Holding Corp.¹	607		35,048
DoubleClick Inc.¹	4,334		34,975
Axcelis Technologies Inc.¹	3,327		34,967
Downey Financial Corp.	723		34,885
Hilb, Rogal & Hobbs Co.	973		34,882
Alliance Gaming Corp.¹	1,396		34,858
Benchmark Electronics Inc.¹	1,288		34,815
Waste Connections Inc.¹	863		34,753
Chittenden Corp.	1,136		34,557
CNET Networks Inc.¹	4,047		34,480
Wolverine World Wide Inc.	1,282		34,460
Tuesday Morning Corp.¹	1,168		34,444
Phoenix Companies Inc.	2,708		34,310
Meridian Gold Inc.¹	3,457		34,293
Home Properties Inc.	913		34,091
Reinsurance Group of America Inc.	875		33,968
Albemarle Corp.	1,160		33,930
Provident Financial Services Inc.	1,883		33,894
Tekelec¹	2,000		33,340
Kellwood Co.	843		33,256
Millennium Chemicals Inc.	2,028		33,198
CLARCOR Inc.	754		33,191
ADVO Inc.	1,056		33,158
Charter Communications Inc. Class A¹	8,288		33,152
Diagnostic Products Corp.	774		33,019
Scholastic Corp.¹	1,164		33,011
Winnebago Industries Inc.	1,142		32,924
Alexandria Real Estate Equities Inc.	579		32,899
Thor Industries Inc.	1,180		32,875
Tupperware Corp.	1,748		32,740
Ascential Software Corp.¹	1,919		32,623
Couer d’Alene Mines Corp.¹	7,037		32,581
Hot Topic Inc.¹	1,455		32,388
Fossil Inc.¹	1,320		32,327


34		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. TOTAL MARKET INDEX FUND

April 30, 2004


Security	Shares	Value
Matthews International Corp. Class A	1,056	$	32,208
NPS Pharmaceuticals Inc.¹	1,283		32,139
Capital Automotive	1,141		32,096
FileNET Corp.¹	1,168		32,073
Cincinnati Bell Inc.¹	8,118		32,066
VISX Inc.¹	1,461		31,981
Taubman Centers Inc.	1,640		31,980
Swift Transportation Co. Inc.¹	1,889		31,962
Acuity Brands Inc.	1,306		31,958
99 Cents Only Stores¹	1,617		31,952
New Jersey Resources Corp.	838		31,936
Post Properties Inc.	1,186		31,892
Tetra Tech Inc.¹	1,918		31,858
Advanced Medical Optics Inc.¹	1,007		31,761
eResearch Technology Inc.¹	1,007		31,700
Platinum Underwriters Holdings Ltd.	986		31,532
Alpharma Inc. Class A	1,446		31,422
Southern Union Co.¹	1,597		31,397
Guitar Center Inc.¹	752		31,223
Payless ShoeSource Inc.¹	2,190		30,989
Hewitt Associates Inc. Class A¹	1,001		30,941
Black Hills Corp.	1,011		30,926
Selective Insurance Group Inc.	864		30,897
Perot Systems Corp. Class A¹	2,311		30,783
CommScope Inc.¹	1,756		30,748
Piper Jaffray Companies Inc.¹	628		30,408
FNB Corp. (Florida)	1,551		30,400
InterDigital Communications Corp.¹	1,743		30,380
Republic Bancorp Inc.	2,334		30,365
AMERIGROUP Corp.¹	731		30,344
Black Box Corp.	595		30,315
Gables Residential Trust	950		30,210
Brandywine Realty Trust	1,182		29,952
Sonus Networks Inc.¹	7,879		29,940
RSA Security Inc.¹	1,867		29,909
Kansas City Southern Industries Inc.¹	2,155		29,847
Nordson Corp.	860		29,722
Maverick Tube Corp.¹	1,313		29,713
Sensient Technologies Corp.	1,450		29,667
Aztar Corp.¹	1,140		29,526
IDT Corp. Class B¹	1,577		29,364
USF Corp.	879		29,227
Colonial Properties Trust	822		29,000
CSG Systems International Inc.¹	1,727		28,996
Actuant Corp. Class A¹	848		28,985
Ryan’s Family Steak Houses Inc.¹	1,593		28,897
Total System Services Inc.	1,297		28,793
TrustCo Bank Corp. NY	2,277		28,713
First National Bankshares of Florida	1,551		28,554
Vitesse Semiconductor Corp.¹	6,654		28,479
United Defense Industries Inc.¹	821		28,448
Cleco Corp.	1,583		28,415
GrafTech International Ltd.¹	3,201		28,393
Kaydon Corp.	1,015		28,390
Micrel Inc.¹	2,308		28,204
UniSource Energy Corp.	1,152		28,143
Susquehanna Bancshares Inc.	1,202		28,127
Owens & Minor Inc.	1,157		28,115
Delta & Pine Land Co.	1,156		28,045
Bio-Rad Laboratories Inc. Class A¹	474		27,776
Littelfuse Inc.¹	719		27,610
Sports Authority Inc. (The)¹	720		27,605
FactSet Research Systems Inc.	693		27,554
Modine Manufacturing Co.	996		27,390
CNA Financial Corp.¹	999		27,383
Adaptec Inc.¹	3,495		27,331
GATX Corp.	1,161		27,284
Aeroflex Inc.¹	2,168		27,273
Applera Corp. - Celera Genomics Group¹	2,307		27,200
Avista Corp.	1,604		27,108
G&K Services Inc. Class A	710		26,909
Redwood Trust Inc.	618		26,852
Digital River Inc.¹	1,041		26,806
Keane Inc.¹	1,887		26,795
United Online Inc.¹	1,611		26,743
Nabi Biopharmaceuticals¹	1,635		26,732
AVX Corp.	1,882		26,706
Novastar Financial Inc.	816		26,487
Casey’s General Store Inc.	1,599		26,479
Tootsie Roll Industries Inc.	760		26,478
IHOP Corp.	710		26,377


SCHEDULES OF INVESTMENTS		35

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. TOTAL MARKET INDEX FUND

April 30, 2004


Security	Shares	Value
Monaco Coach Corp.	1,011	$	26,357
NDCHealth Corp.	1,150		26,301
Manitowoc Co. Inc. (The)	862		26,213
Kilroy Realty Corp.	836		26,209
Vintage Petroleum Inc.	1,727		26,026
Albany International Corp. Class A	852		25,986
PSS World Medical Inc.¹	2,315		25,905
Cost Plus Inc.¹	715		25,883
MICROS Systems Inc.¹	589		25,839
Charming Shoppes Inc.¹	3,642		25,713
Northwest Natural Gas Co.	872		25,637
Shaw Group Inc. (The)¹	2,132		25,584
eFunds Corp.¹	1,590		25,535
Cabot Microelectronics Corp.¹	864		25,514
Province Healthcare Co.¹	1,577		25,216
Aquila Inc.¹	5,922		25,168
Champion Enterprises Inc.¹	2,304		25,091
Hollywood Entertainment Corp.¹	1,861		25,049
Grey Wolf Inc.¹	6,222		24,764
AMCORE Financial Inc.	872		24,712
Technitrol Inc.¹	1,161		24,694
Coherent Inc.¹	1,009		24,670
PolyMedica Corp.	886		24,666
Eagle Materials Inc.	375		24,637
El Paso Electric Co.¹	1,741		24,635
Power Integrations Inc.¹	999		24,605
Talbots Inc. (The)	703		24,570
Haemonetics Corp.¹	870		24,560
Unova Inc.¹	1,403		24,553
Sierra Pacific Resources¹	3,462		24,511
Men’s Wearhouse Inc. (The)¹	958		24,419
Macrovision Corp.¹	1,448		24,384
Insight Enterprises Inc.¹	1,452		24,306
Superior Industries International Inc.	713		24,299
Crompton Corp.	3,906		24,295
Provident Bankshares Corp.	862		24,283
Fuller (H.B.) Co.	886		24,276
Texas Industries Inc.	720		24,271
LTX Corp.¹	2,213		24,188
THQ Inc.¹	1,304		24,176
Brooks Automation Inc.¹	1,444		24,028
Overseas Shipholding Group Inc.	729		23,889
Cox Radio Inc. Class A¹	1,151		23,837
Lattice Semiconductor Corp.¹	3,336		23,752
Allegheny Technologies Inc.	2,319		23,700
Six Flags Inc.¹	3,182		23,642
Chiquita Brands International Inc.¹	1,312		23,629
Sycamore Networks Inc.¹	6,382		23,613
FTI Consulting Inc.¹	1,433		23,573
Catalina Marketing Corp.¹	1,419		23,527
Core Laboratories NV¹	1,025		23,309
Granite Construction Inc.	1,170		23,225
Navigant Consulting Co.¹	1,322		23,175
Investment Technology Group Inc.¹	1,614		23,129
Priority Healthcare Corp. Class B¹	1,153		23,118
FirstFed Financial Corp.¹	571		23,080
F5 Networks Inc.¹	906		23,012
EMCOR Group Inc.¹	561		22,945
MacDermid Inc.	707		22,893
Jacuzzi Brands Inc.¹	2,587		22,610
Delta Air Lines Inc.	3,623		22,535
Credence Systems Corp.¹	2,019		22,492
NetIQ Corp.¹	1,749		22,492
Seacor Holdings Inc.¹	542		22,482
Superior Energy Services Inc.¹	2,163		22,474
OM Group Inc.¹	881		22,421
Amkor Technology Inc.¹	2,771		22,390
Hearst-Argyle Television Inc.	851		22,339
ATMI Inc.¹	1,010		22,301
Stewart Enterprises Inc. Class A¹	3,050		22,265
TriQuint Semiconductor Inc.¹	4,055		22,262
Dendrite International Inc.¹	1,292		22,145
Wabash National Corp.¹	871		22,132
Medarex Inc.¹	2,311		22,024
Silicon Image Inc.¹	2,160		22,010
Longs Drug Stores Corp.	1,115		21,854
Wind River Systems Inc.¹	2,334		21,846
Hanover Compressor Co.¹	1,773		21,808
EGL Inc.¹	1,170		21,692
NetFlix Inc.¹	857		21,674
Advanced Digital Information Corp.¹	2,045		21,595
DSP Group Inc.¹	871		21,583


36		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. TOTAL MARKET INDEX FUND

April 30, 2004


Security	Shares	Value
Borland Software Corp.¹	2,616	$	21,582
Continental Airlines Inc. Class B¹	2,024		21,576
Extreme Networks Inc.¹	3,901		21,573
Orbotech Ltd.¹	1,020		21,542
Vertex Pharmaceuticals Inc.¹	2,467		21,315
Zoran Corp.¹	1,289		21,307
Hutchinson Technology Inc.¹	866		21,295
Cambrex Corp.	861		21,284
Aspect Communications Corp.¹	1,782		21,081
Internet Security Systems Inc.¹	1,582		21,025
First Sentinel Bancorp Inc.	1,018		20,971
Enzon Pharmaceuticals Inc.¹	1,441		20,909
RealNetworks Inc.¹	3,635		20,901
Informatica Corp.¹	2,886		20,895
Schulman (A.) Inc.	1,042		20,840
Veritas DGC Inc.¹	1,019		20,818
Lexar Media Inc.¹	2,229		20,730
Plexus Corp.¹	1,439		20,693
Christopher & Banks Corp.	1,151		20,591
Oceaneering International Inc.¹	730		20,440
Horace Mann Educators Corp.	1,304		20,355
Winn-Dixie Stores Inc.	2,645		20,155
Power-One Inc.¹	2,321		19,961
Exar Corp.¹	1,308		19,960
Beverly Enterprises Inc.¹	3,339		19,867
Wausau-Mosinee Paper Corp.	1,411		19,796
Veeco Instruments Inc.¹	870		19,793
Hain Celestial Group Inc.¹	999		19,780
Bowne & Co. Inc.	1,167		19,757
Harbor Florida Bancshares Inc.	709		19,653
Interactive Data Corp.¹	1,162		19,429
Quest Software Inc.¹	1,727		19,429
Eagle Materials Inc.	303		19,362
Newport Corp.¹	1,300		19,292
Mykrolis Corp.¹	1,324		19,264
Alaska Air Group Inc.¹	868		19,209
Advent Software Inc.¹	1,023		19,110
Steelcase Inc. Class A	1,554		19,099
FuelCell Energy Inc.¹	1,156		19,051
Arkansas Best Corp.	730		18,973
Odyssey Healthcare Inc.¹	1,127		18,945
IDX Systems Corp.¹	597		18,925
Sotheby’s Holdings Inc. Class A¹	1,449		18,823
Manufactured Home Communities Inc.	599		18,749
Imagistics International Inc.¹	462		18,706
Glenborough Realty Trust Inc.	994		18,677
Sterling Bancshares Inc.	1,462		18,582
Nautilus Group Inc. (The)	1,154		18,556
Fred’s Inc.	998		18,533
Spherion Corp.¹	1,875		18,469
Checkpoint Systems Inc.¹	1,149		18,464
Sunrise Senior Living Inc.¹	579		18,296
American Italian Pasta Co. Class A	587		18,174
Lone Star Steakhouse & Saloon Inc.	590		18,143
Esterline Technologies Corp.¹	727		17,993
Electro Scientific Industries Inc.¹	880		17,987
Photon Dynamics Inc.¹	580		17,980
Dime Community Bancshares	1,051		17,972
Koger Equity Inc.	854		17,891
Lone Star Technologies Inc.¹	870		17,835
Openwave Systems Inc.¹	2,087		17,781
W.P. Stewart & Co. Ltd.	880		17,662
Stillwater Mining Co.¹	1,309		17,580
Anchor BanCorp Wisconsin Inc.	723		17,554
S1 Corp.¹	2,168		17,474
M-Systems Flash Disk Pioneers Ltd.¹	999		17,433
Northwest Airlines Corp.¹	1,853		17,418
Biosite Inc.¹	439		17,393
Ariba Inc.¹	7,834		17,313
Incyte Corp.¹	2,175		17,270
NetBank Inc.	1,592		17,178
WD-40 Co.	566		17,178
PAREXEL International Corp.¹	876		17,117
Actel Corp.¹	858		17,091
Wireless Facilities Inc.¹	1,773		17,003
Viasys Healthcare Inc.¹	873		16,936
Inter-Tel Inc.	706		16,902
McDermott International Inc.¹	2,036		16,817
Fleetwood Enterprises Inc.¹	1,159		16,806
Quantum Corp.¹	5,359		16,774
Priceline.com Inc.¹	688		16,670
Interstate Bakeries Corp.	1,459		16,487


SCHEDULES OF INVESTMENTS		37

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. TOTAL MARKET INDEX FUND

April 30, 2004


Security	Shares	Value
NCO Group Inc.¹	723	$	16,412
PanAmSat Corp.¹	711		16,410
AK Steel Holding Corp.¹	3,487		16,389
Offshore Logistics Inc.¹	746		16,375
CIBER Inc.¹	1,871		16,371
Carpenter Technology Corp.	599		16,359
Sinclair Broadcast Group Inc. Class A¹	1,316		16,266
ElkCorp	581		16,105
Mercury Computer Systems Inc.¹	718		16,083
Genesco Inc.¹	713		15,864
Insight Communications Co. Inc.¹	1,732		15,779
Kulicke & Soffa Industries Inc.¹	1,584		15,729
Stride Rite Corp.	1,465		15,719
Texas Genco Holdings Inc.	442		15,638
IDT Corp.¹	839		15,589
Helix Technology Corp.	883		15,541
WMS Industries Inc.¹	548		15,476
Phillips-Van Heusen Corp.	856		15,468
Micromuse Inc.¹	2,297		15,413
Cirrus Logic Inc.¹	2,467		15,369
PFF Bancorp Inc.	405		15,167
C-COR.net Corp.¹	1,652		15,000
InterMune Inc.¹	1,011		14,912
Mindspeed Technologies Inc.¹	2,866		14,731
United Therapeutics Inc.¹	598		14,723
Cubist Pharmaceuticals Inc.¹	1,481		14,721
McDATA Corp. Class A¹	2,758		14,700
Powerwave Technologies Inc.¹	2,171		14,698
Datascope Corp.	443		14,672
Vignette Corp.¹	8,409		14,632
Transkaryotic Therapies Inc.¹	1,002		14,559
Noven Pharmaceuticals Inc.¹	739		14,514
FelCor Lodging Trust Inc.¹	1,434		14,340
Verity Inc.¹	1,156		14,334
Nextel Partners Inc. Class A¹	1,072		14,311
Regeneron Pharmaceuticals Inc.¹	1,139		14,272
Russell Corp.	854		14,202
Insituform Technologies Inc. Class A¹	869		14,113
International Multifoods Corp.¹	566		14,065
ArthroCare Corp.¹	595		13,988
Stewart & Stevenson Services Inc.	875		13,983
ValueVision Media Inc. Class A¹	995		13,970
Regal-Beloit Corp.	697		13,947
Roto-Rooter Inc.	288		13,939
United States Cellular Corp.¹	406		13,914
Cyberonics Inc.¹	587		13,906
JDA Software Group Inc.¹	1,056		13,865
Cleveland-Cliffs Inc.¹	291		13,788
webMethods Inc.¹	1,602		13,777
Park Electrochemical Corp.	581		13,694
Interface Inc. Class A¹	1,602		13,665
C&D Technologies Inc.	878		13,609
Lennar Corp. Class B	310		13,609
Ionics Inc.¹	586		13,519
Agilysys Inc.	1,145		13,431
Methode Electronics Inc.	1,181		13,393
Ultratech Inc.¹	829		13,355
Harmonic Inc.¹	2,019		13,346
Newpark Resources Inc.¹	2,328		13,339
Alexion Pharmaceuticals Inc.¹	586		13,197
CTS Corp.	1,010		13,181
Photronics Inc.¹	880		13,103
Curtiss-Wright Corp.	292		13,085
Lexicon Genetics Inc.¹	1,850		13,061
Global Industries Ltd.¹	2,175		13,050
Pharmacopeia Inc.¹	721		12,928
REMEC Inc.¹	2,050		12,895
Cell Genesys Inc.¹	1,163		12,851
Caraustar Industries Inc.¹	1,015		12,840
CV Therapeutics Inc.¹	887		12,782
Jakks Pacific Inc.¹	733		12,732
SERENA Software Inc.¹	716		12,723
Echelon Corp.¹	1,164		12,688
USG Corp.¹	889		12,650
Input/Output Inc.¹	1,602		12,640
Children’s Place Retail Stores Inc. (The)¹	476		12,538
SonicWALL Inc.¹	1,751		12,537
Cable Design Technologies Corp.¹	1,468		12,522
Myriad Genetics Inc.¹	724		12,475
Packeteer Inc.¹	1,012		12,195
Artesyn Technologies Inc.¹	1,310		12,065


38		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. TOTAL MARKET INDEX FUND

April 30, 2004


Security	Shares	Value
Oakley Inc.	864	$	11,958
Quanta Services Inc.¹	2,152		11,771
Albany Molecular Research Inc.¹	724		11,743
Presidential Life Corp.	726		11,681
ShopKo Stores Inc.¹	873		11,576
Pre-Paid Legal Services Inc.¹	463		11,575
Silicon Graphics Inc.¹	5,959		11,501
Tredegar Corp.	865		11,496
Cato Corp. Class A	574		11,491
Molecular Devices Corp.¹	578		11,329
Retek Inc.¹	1,613		11,259
Interwoven Inc¹	1,340		11,243
Stein Mart Inc.¹	877		11,155
LaBranche & Co. Inc.	1,135		11,089
Enzo Biochem Inc.¹	761		11,073
Atwood Oceanics Inc.¹	301		11,032
Praecis Pharmaceuticals Inc.¹	1,883		10,997
Agile Software Corp.¹	1,456		10,993
Presstek Inc.¹	1,032		10,991
Anaren Inc.¹	742		10,944
Maxygen Inc.¹	1,004		10,934
Kopin Corp.¹	2,187		10,891
BSB Bancorp Inc.	288		10,800
Casella Waste Systems Inc. Class A¹	744		10,788
E.piphany Inc.¹	2,462		10,784
ESS Technology Inc.¹	1,002		10,741
Equity Inns Inc.	1,299		10,652
InFocus Corp.¹	1,303		10,646
RadiSys Corp.¹	566		10,567
Parker Drilling Co.¹	3,333		10,466
Arris Group Inc.¹	1,750		10,465
Papa John’s International Inc.¹	312		10,436
Transmeta Corp.¹	3,737		10,426
Tower Automotive Inc.¹	2,030		10,394
Robert Mondavi Corp. (The) Class A¹	288		10,368
Orthodontic Centers of America Inc.¹	1,444		10,353
Prime Hospitality Corp.¹	1,025		10,301
Manugistics Group Inc.¹	1,902		10,290
Ryerson Tull Inc.	876		10,284
AAR Corp.¹	1,012		10,272
Kenneth Cole Productions Class A	295		10,204
SCS Transportation Inc.¹	445		10,182
Pinnacle Entertainment Inc.¹	889		10,152
Cohu Inc.	579		10,133
Wild Oats Markets Inc.¹	731		10,088
Young Broadcasting Inc. Class A¹	571		10,084
Stamps.com Inc.	1,478		10,080
XOMA Ltd.¹	2,329		9,991
Duane Reade Inc.¹	592		9,880
Chesapeake Corp.	435		9,879
Safeguard Scientifics Inc.¹	3,777		9,820
Forrester Research Inc.¹	561		9,728
PRG-Schultz International Inc.¹	2,034		9,560
Dress Barn Inc.¹	568		9,554
OceanFirst Financial Corp.	436		9,527
SWS Group Inc.	583		9,468
Triarc Companies Inc. Class B	900		9,405
Wellman Inc.	1,154		9,336
DuPont Photomasks Inc.¹	450		9,306
Kaman Corp. Class A	735		9,136
FreeMarkets Inc.¹	1,297		9,014
BioVeris Corp.¹	709		8,792
Audiovox Corp. Class A¹	579		8,743
MatrixOne Inc.¹	1,449		8,708
Atlantic Coast Airlines Holdings Inc.¹	1,303		8,535
Stratex Networks Inc.¹	2,606		8,522
Cell Therapeutics Inc.¹	1,001		8,519
RTI International Metals Inc.¹	579		8,482
Finisar Corp.¹	4,787		8,473
Meristar Hospitality Corp.¹	1,455		8,439
Hudson Highland Group Inc.¹	268		8,198
Kadant Inc.¹	445		8,188
Trimeris Inc.¹	553		8,129
Iomega Corp.	1,584		8,063
General Cable Corp.¹	1,022		7,869
Asyst Technologies Inc.¹	1,178		7,787
Astec Industries Inc.¹	435		7,760
MRO Software Inc.¹	579		7,718
CuraGen Corp.¹	1,303		7,557
Entrust Inc.¹	1,611		7,362
TeleTech Holdings Inc.¹	1,177		7,191
NUI Corp.	427		7,114


SCHEDULES OF INVESTMENTS		39

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. TOTAL MARKET INDEX FUND

April 30, 2004


Security	Shares		Value
Pope & Talbot Inc.		427	$	7,088
Savient Pharmaceuticals Inc.¹		1,875		7,031
Learning Tree International Inc.¹		437		6,878
Actuate Corp.¹		2,027		6,628
Computer Network Technology Corp.¹		1,008		6,602
MRV Communications Inc.¹		2,746		6,453
PC-Tel Inc.¹		579		6,415
Immunomedics Inc.¹		1,316		6,369
MedQuist Inc.¹		431		5,866
Siliconix Inc.¹		149		5,768
Theragenics Corp.¹		1,029		5,392
Tollgrade Communications Inc.¹		436		5,310
WatchGuard Technologies Inc.¹		733		5,102
Triarc Companies Inc.		450		4,950
Unifi Inc.¹		1,896		4,740
Bally Total Fitness Holding Corp.¹		1,022		4,211
Concurrent Computer Corp.¹		2,013		4,127
Bay View Capital Corp.		1,870		4,058
Gene Logic Inc.¹		874		3,697
McDATA Corp. Class B¹		708		3,632
Three-Five Systems Inc.¹		710		3,614
Keynote Systems Inc.¹		266		3,155

TOTAL COMMON STOCKS (Cost: $352,623,440)				380,537,761

SHORT-TERM INVESTMENTS – 7.91%

MONEY MARKET FUNDS – 2.90%

Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^2,3		7,537,677		7,537,677
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^2,3		2,694,829		2,694,829
BlackRock Temp Cash Money Market Fund²		124,300		124,300
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares²		696,470		696,470

				11,053,276

Security	Principal		Value
FLOATING RATE NOTES - 1.98%

Beta Finance Inc.
1.06%, 05/20/04^2,4	$	122,492	$	122,491
1.06%, 09/15/04^2,4		244,984		244,975
1.06%, 10/12/04^2,4		122,492		122,487
1.14%, 03/15/05^2,4		122,492		122,577
1.15%, 08/23/04^2,4		122,492		122,524
Canadian Imperial Bank of Commerce
1.24%, 10/07/04²		183,738		183,726
1.38%, 11/22/04²		61,246		61,249
1.40%, 10/29/04²		244,984		244,981
CC USA Inc.
1.06%, 05/24/04^2,4		244,984		244,983
1.07%, 07/16/04²		61,246		61,111
1.10%, 07/15/04^2,4		122,492		122,501
1.29%, 04/15/05^2,4		244,984		244,961
1.51%, 02/15/05^2,4		159,240		159,439
Dorada Finance Inc.
1.04%, 07/01/04²		85,745		85,598
1.06%, 05/20/04^2,4		244,984		244,983
1.24%, 08/09/04²		61,246		61,244
1.48%, 01/18/05^2,4		183,738		183,732
Five Finance Inc.
1.05%, 04/29/05^2,4		195,988		195,968
HBOS Treasury Services PLC
1.10%, 04/22/05²		244,984		244,984
1.24%, 04/01/05²		156,790		156,776
K2 USA LLC
1.06%, 08/16/04^2,4		61,246		61,243
1.06%, 09/27/04^2,4		264,583		264,567
1.07%, 05/17/04²		122,492		122,492
1.46%, 01/12/05^2,4		122,492		122,484
Links Finance LLC
1.05%, 04/15/05^2,4		244,984		244,938
1.06%, 05/04/04²		122,492		122,492
1.06%, 06/28/04²		122,492		122,488
1.09%, 07/20/04²		97,994		97,990
1.19%, 04/25/05²		244,984		245,140
Nationwide Building Society
1.11%, 04/28/05^2,4		244,984		244,984
1.14%, 07/23/04^2,4		183,738		183,738


40		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. TOTAL MARKET INDEX FUND

April 30, 2004


Security	Principal		Value
Northern Rock PLC
1.11%, 01/13/05^2,⁴	$	232,735	$	232,735
Permanent Financing PLC
1.05%, 03/10/05²		244,984		244,984
1.06%, 12/10/04²		122,492		122,493
Sigma Finance Inc.
1.05%, 07/01/04²		122,492		122,487
1.08%, 10/07/04²		244,984		244,963
1.09%, 07/20/04²		122,492		122,487
1.24%, 08/06/04²		61,246		61,245
Tango Finance Corp.
1.06%, 07/06/04^2,⁴		73,495		73,495
1.06%, 01/18/05^2,⁴		107,793		107,785
1.06%, 04/07/05^2,⁴		89,909		89,901
1.07%, 02/25/05^2,⁴		137,191		137,169
1.08%, 07/15/04^2,⁴		73,495		73,490
WhistleJacket Capital LLC
1.06%, 09/15/04^2,⁴		122,492		122,483
1.26%, 10/20/04^2,⁴		60,683		60,322
1.32%, 02/04/05^2,⁴		61,246		61,237
White Pine Finance LLC
1.05%, 07/06/04²		146,991		146,988
1.05%, 04/15/05^2,⁴		183,738		183,703
1.06%, 08/26/04^2,⁴		122,492		122,486
1.06%, 11/15/04^2,⁴		146,991		146,991

				7,541,290
COMMERCIAL PAPER – 1.64%

Alpine Securitization Corp.
1.04%, 05/20/04²		122,492		122,432
Amsterdam Funding Corp.
1.03%, 05/05/04²		99,219		99,213
1.04%, 05/21/04²		146,991		146,914
Barton Capital Corp.
1.03%, 05/03/04²		61,305		61,305
1.03%, 05/06/04²		61,246		61,241
Blue Ridge Asset Funding Corp.
1.03%, 05/21/04²		122,492		122,429
Cantabric Finance LLC
1.09%, 07/22/04²		183,738		183,293
Corporate Asset Funding
1.05%, 05/21/04²		127,392		127,325
CRC Funding LLC
1.04%, 06/03/04²		244,984		244,765
1.10%, 07/07/04²		95,544		95,354
Delaware Funding Corp.
1.03%, 05/05/04²		183,942		183,931
1.03%, 05/21/04²		61,246		61,215
Edison Asset Securitization
1.03%, 05/06/04²		183,738		183,723
1.04%, 06/17/04²		244,984		244,666
1.05%, 06/22/04²		122,492		122,314
1.07%, 09/21/04²		122,492		121,979
Eureka Securitization Inc.
1.03%, 05/25/04²		48,997		48,966
Falcon Asset Securitization Corp.
1.03%, 05/05/04²		122,492		122,485
1.04%, 05/25/04²		183,738		183,622
1.04%, 05/26/04²		244,984		244,822
Ford Credit Auto Receivables
1.04%, 05/14/04²		61,246		61,227
Galaxy Funding Inc.
1.05%, 05/17/04²		122,492		122,442
1.07%, 07/20/04²		110,243		109,988
Gemini Securitization Corp.
1.03%, 05/24/04²		61,246		61,210
GIRO Funding US Corp.
1.05%, 05/19/04²		61,246		61,218
Grampian Funding LLC
1.26%, 10/22/04²		244,984		243,515
Jupiter Securitization Corp.
1.04%, 05/20/04²		183,738		183,649
1.04%, 05/24/04²		122,492		122,418
1.04%, 05/26/04²		167,942		167,831
1.04%, 05/27/04²		220,486		220,334
New Center Asset Trust
1.06%, 05/03/04²		306,231		306,231
Park Avenue Receivables Corp.
1.03%, 05/07/04²		122,492		122,478
Polonius Inc.
1.04%, 05/21/04²		141,723		141,650
Preferred Receivables Funding Corp.
1.04%, 05/20/04²		61,246		61,216


SCHEDULES OF INVESTMENTS		41

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. TOTAL MARKET INDEX FUND

April 30, 2004


Security	Principal		Value
Scaldis Capital LLC
1.04%, 05/07/04²	$	122,492	$	122,478
1.04%, 05/20/04²		331,106		330,944
1.04%, 05/25/04²		122,492		122,414
1.05%, 06/30/04²		87,704		87,556
Sydney Capital Corp.
1.25%, 10/22/04²		81,531		81,044
Thames Asset Global Securitization No. 1 Inc.
1.04%, 05/20/04²		122,492		122,432
Thunder Bay Funding Inc.
1.03%, 05/03/04²		88,327		88,327
Windmill Funding Corp.
1.03%, 05/05/04²		183,738		183,728
1.03%, 05/06/04²		122,492		122,482
1.03%, 05/10/04²		244,984		244,935

				6,273,741
TIME DEPOSITS – 1.05%

Abbey National Treasury Services PLC
1.25%, 01/06/05²		244,984		244,984
1.33%, 02/10/05²		122,492		122,478
1.39%, 02/02/05²		122,492		122,478
1.39%, 04/08/05²		171,489		171,465
1.40%, 10/25/04²		244,984		244,967
Bank of New York
1.39%, 11/01/04²		244,984		244,973
Bank of Novia Scotia
1.13%, 10/06/04²		244,984		244,984
1.24%, 10/07/04²		183,738		183,730
1.42%, 10/29/04²		183,738		183,745
National City Bank (Cleveland, Ohio)
1.25%, 01/06/05²		244,984		244,993
Prudential Funding LLC
1.06%, 05/03/04²		367,477		367,477
Toronto-Dominion Bank
1.04%, 06/22/04²		61,246		61,247
1.22%, 03/23/05²		428,723		428,656
1.34%, 02/10/05²		97,994		97,982
1.41%, 11/01/04²		183,738		183,729
UBS Finance (Delaware)
1.10%, 09/08/04²		244,984		244,026
1.11%, 12/17/04²		367,477		364,893
1.14%, 09/29/04²		244,984		243,834

				4,000,641
U.S. GOVERNMENT AGENCY NOTES – 0.20%

Federal Home Loan Mortgage Corp.
1.15%, 05/12/04²		183,738		183,685
1.28%, 08/19/04²		97,994		97,617
1.63%, 04/15/05²		171,489		172,009
Federal National Mortgage Association
1.28%, 08/20/04²		318,480		317,245

				770,556
REPURCHASE AGREEMENTS – 0.14%

Merrill Lynch Government Securities Inc.
1.07%, 05/03/04²		526,716		526,716

				526,716

TOTAL SHORT-TERM INVESTMENTS (Cost: $30,166,220)				30,166,220

TOTAL INVESTMENTS IN SECURITIES – 107.75% (Cost: $382,789,660)				410,703,981

Other Assets, Less Liabilities – (7.75%)				(29,547,028	)

NET ASSETS – 100.00%			$	381,156,953

Non-income earning securities.

All or a portion of this security represents investments of securities lending collateral.

Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

⁴

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

See notes to financial statements.


42		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® DOW JONES U.S. ENERGY SECTOR INDEX FUND

April 30, 2004


Security	Shares		Value
COMMON STOCKS – 99.97%

Exxon Mobil Corp.		1,903,531	$	80,995,244
ChevronTexaco Corp.		851,371		77,900,446
ConocoPhillips		240,775		17,167,257
Occidental Petroleum Corp.		339,792		16,038,182
Schlumberger Ltd.		262,700		15,375,831
Burlington Resources Inc.		152,852		10,282,354
Baker Hughes Inc.		239,879		8,798,762
Apache Corp.		197,980		8,289,423
Anadarko Petroleum Corp.		152,732		8,183,381
Devon Energy Corp.		131,661		8,057,653
Murphy Oil Corp.		112,550		7,709,675
Unocal Corp.		203,072		7,318,715
Halliburton Co.		214,042		6,378,452
Marathon Oil Corp.		180,379		6,053,519
Transocean Inc.¹		168,338		4,674,746
Kinder Morgan Inc.		72,294		4,352,822
Amerada Hess Corp.		58,297		4,146,666
Kerr-McGee Corp.		84,471		4,133,166
EOG Resources Inc.		82,636		4,069,823
Nabors Industries Ltd.¹		84,606		3,753,122
BJ Services Co.¹		82,675		3,679,037
Williams Companies Inc.		315,814		3,252,884
Valero Energy Corp.		40,868		2,605,744
Smith International Inc.¹		46,373		2,538,922
Noble Corp.¹		66,034		2,453,823
Weatherford International Ltd.¹		51,872		2,255,395
Sunoco Inc.		35,240		2,216,596
GlobalSantaFe Corp.		80,289		2,117,221
Pioneer Natural Resources Co.		60,535		1,980,100
XTO Energy Inc.		72,063		1,924,082
Noble Energy Inc.		40,765		1,879,266
Newfield Exploration Co.¹		29,746		1,567,019
ENSCO International Inc.		55,264		1,512,576
Massey Energy Co.		50,703		1,187,464
Tom Brown Inc.¹		24,358		1,166,261
Diamond Offshore Drilling Inc.		47,697		1,076,044
Cooper Cameron Corp.¹		22,253		1,075,933
Evergreen Resources Inc.¹		23,700		951,081
Helmerich & Payne Inc.		33,689		909,266
National-Oilwell Inc.¹		31,327		874,650

Security	Shares or Principal		Value
Cabot Oil & Gas Corp.		21,603	$	771,227
Grant Prideco Inc.¹		43,986		670,786
Stone Energy Corp.¹		13,504		664,397
El Paso Corp.		86,961		609,597
Tidewater Inc.		20,844		588,009
Cimarex Energy Co.¹		17,939		494,937
Key Energy Services Inc.¹		45,453		484,529
Varco International Inc.¹		23,042		476,739
Chesapeake Energy Corp.		29,221		401,789
Arch Coal Inc.		13,080		400,379
Hanover Compressor Co.¹		30,007		369,086
Vintage Petroleum Inc.		23,339		351,719
Forest Oil Corp.¹		11,123		291,979
Lone Star Technologies Inc.¹		13,505		276,852
Veritas DGC Inc.¹		12,328		251,861
Seacor Holdings Inc.¹		4,061		168,450
Peabody Energy Corp.		2,084		97,719
Rowan Companies Inc.¹		3,422		76,311
Patterson-UTI Energy Inc.¹		1,714		62,030

TOTAL COMMON STOCKS (Cost: $310,311,799)				348,410,999

SHORT-TERM INVESTMENTS – 7.05%

MONEY MARKET FUNDS – 2.60%

Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares²^,³		6,202,282		6,202,282
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares²^,³		2,188,629		2,188,629
BlackRock Temp Cash Money Market Fund²		100,951		100,951
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares²		565,644		565,644

				9,057,506

FLOATING RATE NOTES – 1.76%

Beta Finance Inc.
1.06%, 05/20/04^2,⁴	$	99,483		99,482
1.06%, 09/15/04^2,⁴		198,966		198,959
1.06%, 10/12/04^2,⁴		99,483		99,479


SCHEDULES OF INVESTMENTS		43

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. ENERGY SECTOR INDEX FUND

April 30, 2004


Security	Principal		Value
1.14%, 03/15/05^2,⁴	$	99,483	$	99,552
1.15%, 08/23/04^2,⁴		99,483		99,510
Canadian Imperial Bank of Commerce
1.24%, 10/07/04²		149,225		149,215
1.38%, 11/22/04²		49,742		49,744
1.40%, 10/29/04²		198,966		198,964
CC USA Inc.
1.06%, 05/24/04^2,⁴		198,966		198,965
1.07%, 07/16/04²		49,742		49,632
1.10%, 07/15/04^2,⁴		99,483		99,490
1.29%, 04/15/05^2,⁴		198,966		198,947
1.51%, 02/15/05^2,⁴		129,328		129,490
Dorada Finance Inc.
1.04%, 07/01/04²		69,638		69,519
1.06%, 05/20/04^2,⁴		198,966		198,965
1.24%, 08/09/04²		49,742		49,740
1.48%, 01/18/05^2,⁴		149,225		149,219
Five Finance Inc.
1.05%, 04/29/05^2,⁴		159,173		159,157
HBOS Treasury Services PLC
1.10%, 04/22/05²		198,966		198,966
1.24%, 04/01/05²		127,338		127,327
K2 USA LLC
1.06%, 08/16/04^2,⁴		49,742		49,739
1.06%, 09/27/04^2,⁴		214,884		214,871
1.07%, 05/17/04²		99,483		99,483
1.46%, 01/12/05^2,⁴		99,483		99,476
Links Finance LLC
1.05%, 04/15/05^2,⁴		198,966		198,928
1.06%, 05/04/04²		99,483		99,483
1.06%, 06/28/04²		99,483		99,480
1.09%, 07/20/04²		79,587		79,584
1.19%, 04/25/05²		198,966		199,093
Nationwide Building Society
1.11%, 04/28/05^2,⁴		198,966		198,966
1.14%, 07/23/04^2,⁴		149,225		149,225
Northern Rock PLC
1.11%, 01/13/05^2,⁴		189,018		189,018
Permanent Financing PLC
1.05%, 03/10/05²		198,966		198,966
1.06%, 12/10/04²		99,483		99,483
Sigma Finance Inc.
1.05%, 07/01/04²		99,483		99,479
1.08%, 10/07/04²		198,966		198,949
1.09%, 07/20/04²		99,483		99,479
1.24%, 08/06/04²		49,742		49,740
Tango Finance Corp.
1.06%, 07/06/04^2,⁴		59,690		59,689
1.06%, 01/18/05^2,⁴		87,545		87,539
1.06%, 04/07/05^2,⁴		73,021		73,014
1.07%, 02/25/05^2,⁴		111,421		111,403
1.08%, 07/15/04^2,⁴		59,690		59,686
WhistleJacket Capital LLC
1.06%, 09/15/04^2,⁴		99,483		99,476
1.26%, 10/20/04^2,⁴		49,284		48,991
1.32%, 02/04/05^2,⁴		49,742		49,734
White Pine Finance LLC
1.05%, 07/06/04²		119,380		119,378
1.05%, 04/15/05^2,⁴		149,225		149,196
1.06%, 08/26/04^2,⁴		99,483		99,479
1.06%, 11/15/04^2,⁴		119,380		119,380

				6,124,729

COMMERCIAL PAPER – 1.46%

Alpine Securitization Corp.
1.04%, 05/20/04²		99,483		99,434
Amsterdam Funding Corp.
1.03%, 05/05/04²		80,581		80,577
1.04%, 05/21/04²		119,380		119,318
Barton Capital Corp.
1.03%, 05/03/04²		49,789		49,789
1.03%, 05/06/04²		49,742		49,737
Blue Ridge Asset Funding Corp.
1.03%, 05/21/04²		99,483		99,432
Cantabric Finance LLC
1.09%, 07/22/04²		149,225		148,863
Corporate Asset Funding
1.05%, 05/21/04²		103,462		103,408
CRC Funding LLC
1.04%, 06/03/04²		198,966		198,788
1.10%, 07/07/04²		77,597		77,443
Delaware Funding Corp.
1.03%, 05/05/04²		149,390		149,381
1.03%, 05/21/04²		49,742		49,716


44		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. ENERGY SECTOR INDEX FUND

April 30, 2004


Security	Principal		Value
Edison Asset Securitization
1.03%, 05/06/04²	$	149,225	$	149,212
1.04%, 06/17/04²		198,966		198,708
1.05%, 06/22/04²		99,483		99,338
1.07%, 09/21/04²		99,483		99,067
Eureka Securitization Inc.
1.03%, 05/25/04²		39,793		39,769
Falcon Asset Securitization Corp.
1.03%, 05/05/04²		99,483		99,477
1.04%, 05/25/04²		149,225		149,130
1.04%, 05/26/04²		198,966		198,835
Ford Credit Auto Receivables
1.04%, 05/14/04²		49,742		49,726
Galaxy Funding Inc.
1.05%, 05/17/04²		99,483		99,443
1.07%, 07/20/04²		89,535		89,327
Gemini Securitization Corp.
1.03%, 05/24/04²		49,742		49,712
GIRO Funding US Corp.
1.05%, 05/19/04²		49,742		49,718
Grampian Funding LLC
1.26%, 10/22/04²		198,966		197,773
Jupiter Securitization Corp.
1.04%, 05/20/04²		149,225		149,152
1.04%, 05/24/04²		99,483		99,423
1.04%, 05/26/04²		136,395		136,305
1.04%, 05/27/04²		179,070		178,946
New Center Asset Trust
1.06%, 05/03/04²		248,708		248,708
Park Avenue Receivables Corp.
1.03%, 05/07/04²		99,483		99,472
Polonius Inc.
1.04%, 05/21/04²		115,102		115,042
Preferred Receivables Funding Corp.
1.04%, 05/20/04²		49,742		49,717
Scaldis Capital LLC
1.04%, 05/07/04²		99,483		99,472
1.04%, 05/20/04²		268,911		268,778
1.04%, 05/25/04²		99,483		99,420
1.05%, 06/30/04²		71,230		71,109
Sydney Capital Corp.
1.25%, 10/22/04²		66,216		65,821
Thames Asset Global Securitization No. 1 Inc.
1.04%, 05/20/04²		99,483		99,434
Thunder Bay Funding Inc.
1.03%, 05/03/04²		71,735		71,735
Windmill Funding Corp.
1.03%, 05/05/04²		149,225		149,216
1.03%, 05/06/04²		99,483		99,475
1.03%, 05/10/04²		198,966		198,927

				5,095,273

TIME DEPOSITS – 0.93%

Abbey National Treasury Services PLC
1.25%, 01/06/05²		198,966		198,966
1.33%, 02/10/05²		99,483		99,472
1.39%, 02/02/05²		99,483		99,472
1.39%, 04/08/05²		139,276		139,257
1.40%, 10/25/04²		198,966		198,952
Bank of New York
1.39%, 11/01/04²		198,966		198,956
Bank of Novia Scotia
1.13%, 10/06/04²		198,966		198,966
1.24%, 10/07/04²		149,225		149,218
1.42%, 10/29/04²		149,225		149,230
National City Bank (Cleveland, Ohio)
1.25%, 01/06/05²		198,966		198,973
Prudential Funding LLC
1.06%, 05/03/04²		298,449		298,449
Toronto-Dominion Bank
1.04%, 06/22/04²		49,742		49,742
1.22%, 03/23/05²		348,191		348,137
1.34%, 02/10/05²		79,587		79,577
1.41%, 11/01/04²		149,225		149,217
UBS Finance (Delaware)
1.10%, 09/08/04²		198,966		198,188
1.11%, 12/17/04²		298,449		296,351
1.14%, 09/29/04²		198,966		198,032

				3,249,155


SCHEDULES OF INVESTMENTS		45

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. ENERGY SECTOR INDEX FUND

April 30, 2004


Security	Principal		Value
U.S. GOVERNMENT AGENCY NOTES – 0.18%

Federal Home Loan
Mortgage Corp.
1.15%, 05/12/04²	$	149,225	$	149,182
1.28%, 08/19/04²		79,587		79,281
1.63%, 04/15/05²		139,276		139,698
Federal National
Mortgage Association
1.28%, 08/20/04²		258,656		257,653

				625,814
REPURCHASE AGREEMENTS – 0.12%

Merrill Lynch Government
Securities Inc.
1.07%, 05/03/04²		427,777		427,777

				427,777

TOTAL SHORT-TERM INVESTMENTS (Cost: $24,580,254)				24,580,254

TOTAL INVESTMENTS IN SECURITIES – 107.02% (Cost: $334,892,053)				372,991,253

Other Assets, Less Liabilities – (7.02%)				(24,467,697	)

NET ASSETS – 100.00%			$	348,523,556

Non-income earning securities.

All or a portion of this security represents investments of securities lending collateral.

Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

⁴

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

See notes to financial statements.


46		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® DOW JONES U.S. HEALTHCARE SECTOR INDEX FUND

April 30, 2004


Security	Shares	Value
COMMON STOCKS – 99.99%

Pfizer Inc.	3,133,056	$	112,038,083
Johnson & Johnson	1,218,759		65,849,549
Merck & Co. Inc.	912,995		42,910,765
Amgen Inc.¹	529,741		29,808,526
Lilly (Eli) & Co.	393,715		29,060,104
Abbott Laboratories	641,375		28,233,328
Medtronic Inc.	497,287		25,093,102
Wyeth	546,951		20,822,425
Bristol-Myers Squibb Co.	796,440		19,990,644
UnitedHealth Group Inc.	257,234		15,814,746
Genentech Inc.¹	90,041		11,057,035
Schering-Plough Corp.	604,246		10,109,036
Boston Scientific Corp.¹	240,955		9,924,936
Forest Laboratories Inc.¹	151,069		9,740,929
Guidant Corp.	127,946		8,061,877
Biogen Idec Inc.¹	134,561		7,939,099
Baxter International Inc.	250,673		7,933,800
Zimmer Holdings Inc.¹	99,322		7,930,862
HCA Inc.	181,000		7,354,030
WellPoint Health Networks Inc.¹	62,201		6,947,230
Caremark Rx Inc.¹	173,765		5,881,946
Stryker Corp.	56,772		5,616,454
St. Jude Medical Inc.¹	70,857		5,403,555
Becton, Dickinson & Co.	103,618		5,237,890
Aetna Inc.	62,858		5,201,500
Gilead Sciences Inc.¹	83,115		5,055,885
Anthem Inc.¹	56,528		5,007,250
Allergan Inc.	55,044		4,846,624
Genzyme Corp.¹	92,546		4,031,304
Medco Health Solutions Inc.¹	111,003		3,929,506
Biomet Inc.	97,302		3,843,429
Monsanto Co.	108,863		3,765,571
CIGNA Corp.	57,857		3,732,355
Quest Diagnostics Inc.	32,733		2,761,029
Mylan Laboratories Inc.	109,889		2,517,557
MedImmune Inc.¹	101,635		2,463,632
Varian Medical Systems Inc.¹	28,083		2,410,645
Alcon Inc.	31,781		2,359,739
Laboratory Corp. of America Holdings¹	58,763		2,335,242
Health Management Associates Inc. Class A	100,044		2,314,018
Bard (C.R.) Inc.	21,296		2,263,126
Tenet Healthcare Corp.¹	190,924		2,245,266
Chiron Corp.¹	44,941		2,085,262
Express Scripts Inc.¹	25,162		1,946,029
Patterson Dental Co.¹	23,730		1,748,901
Omnicare Inc.	42,077		1,745,354
Celgene Corp.¹	33,384		1,725,619
Millennium Pharmaceuticals Inc.¹	114,772		1,720,432
Oxford Health Plans Inc.	31,369		1,707,728
King Pharmaceuticals Inc.¹	98,933		1,706,594
Sepracor Inc.¹	34,756		1,661,684
ImClone Systems Inc.¹	24,731		1,654,009
Hillenbrand Industries Inc.	23,841		1,609,268
Watson Pharmaceuticals Inc.¹	44,355		1,579,482
Applera Corp. - Applied Biosystems Group	84,913		1,576,834
Invitrogen Corp.¹	20,994		1,516,397
Fisher Scientific International Inc.¹	25,789		1,509,946
Barr Pharmaceuticals¹	35,722		1,479,605
IVAX Corp.¹	68,141		1,451,403
Beckman Coulter Inc.	25,940		1,448,490
Lincare Holdings Inc.¹	40,622		1,410,802
DENTSPLY International Inc.	28,667		1,389,203
DaVita Inc.¹	26,980		1,378,678
Bausch & Lomb Inc.	21,331		1,340,227
Cephalon Inc.¹	22,861		1,301,020
Coventry Health Care Inc.¹	30,625		1,281,350
PacifiCare Health Systems Inc.¹	34,337		1,227,891
OSI Pharmaceuticals Inc.¹	16,139		1,190,897
Manor Care Inc.	36,638		1,188,537
Health Net Inc.¹	46,705		1,188,175
Apogent Technologies Inc.¹	36,230		1,174,577
Humana Inc.¹	66,122		1,077,127
Triad Hospitals Inc.¹	30,918		1,051,521
Renal Care Group Inc.¹	19,869		983,118
Medicis Pharmaceutical Corp. Class A	22,635		971,494
Cytyc Corp.¹	45,019		963,407
Neurocrine Biosciences Inc.¹	14,415		946,056
Protein Design Labs Inc.¹	38,473		941,819


SCHEDULES OF INVESTMENTS		47

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. HEALTHCARE SECTOR INDEX FUND

April 30, 2004


Security	Shares	Value
Universal Health Services Inc. Class B	20,513	$	900,521
MGI Pharma Inc.¹	14,459		893,855
IDEXX Laboratories Inc.¹	14,223		871,301
Charles River Laboratories International Inc.¹	18,920		870,320
Covance Inc.¹	25,391		856,692
INAMED Corp.¹	14,350		844,354
Edwards Lifesciences Corp.¹	24,368		839,721
Community Health Systems Inc.¹	30,931		797,711
Dade Behring Holdings Inc.¹	17,249		793,454
Valeant Pharmaceuticals International	34,087		787,410
Accredo Health Inc.¹	19,902		769,212
Martek Biosciences Corp.¹	12,074		766,578
American Pharmaceutical Partners Inc.¹	18,094		765,376
ICOS Corp.¹	23,796		761,234
Amylin Pharmaceuticals Inc.¹	33,745		755,888
Respironics Inc.¹	14,267		747,733
Cooper Companies Inc.	13,635		736,290
Affymetrix Inc.¹	24,093		736,282
Pediatrix Medical Group Inc.¹	9,641		689,332
Andrx Group¹	29,815		682,167
ResMed Inc.¹	13,578		669,124
Gen-Probe Inc.¹	19,865		662,299
TECHNE Corp.¹	16,845		656,281
Select Medical Corp.	34,499		653,756
First Health Group Corp.¹	38,710		646,457
Human Genome Sciences Inc.¹	52,870		645,014
Steris Corp.¹	28,859		639,515
Apria Healthcare Group Inc.¹	20,955		604,342
Pharmaceutical Product Development Inc.¹	20,336		601,336
Ligand Pharmaceuticals Inc. Class B¹	27,858		596,440
Medicines Co. (The)¹	18,122		592,771
Nektar Therapeutics¹	29,188		591,057
Pharmaceutical Resources Inc.¹	13,916		560,815
Alkermes Inc.¹	36,432		558,503
Perrigo Co.	24,797		534,871
Tularik Inc.¹	21,261		524,509
US Oncology Inc.¹	35,162		523,914
Abgenix Inc.¹	31,879		518,671
LifePoint Hospitals Inc.¹	14,387		514,479
Mentor Corp.	15,987		506,788
Vicuron Pharmaceuticals Inc.¹	22,130		504,785
Invacare Corp.	12,226		486,962
Taro Pharmaceutical Industries Ltd.¹	11,064		478,518
Sybron Dental Specialties Inc.¹	15,711		459,547
AMERIGROUP Corp.¹	9,999		415,059
Diagnostic Products Corp.	9,220		393,325
Nabi Biopharmaceuticals¹	23,720		387,822
VISX Inc.¹	17,631		385,943
Bio-Rad Laboratories Inc. Class A¹	6,566		384,768
Advanced Medical Optics Inc.¹	12,120		382,265
NPS Pharmaceuticals Inc.¹	15,067		377,428
Alpharma Inc. Class A	16,293		354,047
Delta & Pine Land Co.	14,552		353,032
Applera Corp. – Celera Genomics Group¹	29,833		351,731
Medarex Inc.¹	32,474		309,477
PolyMedica Corp.	10,920		304,013
Haemonetics Corp.¹	10,354		292,293
Province Healthcare Co.¹	17,752		283,854
Vertex Pharmaceuticals Inc.¹	31,770		274,493
Beverly Enterprises Inc.¹	43,608		259,468
Enzon Pharmaceuticals Inc.¹	17,842		258,887
Odyssey Healthcare Inc.¹	14,824		249,191
Biosite Inc.¹	6,256		247,863
Incyte Corp.¹	29,362		233,134
Sunrise Senior Living Inc.¹	7,357		232,481
United Therapeutics Inc.¹	8,702		214,243
PAREXEL International Corp.¹	10,739		209,840
Viasys Healthcare Inc.¹	10,760		208,744
ArthroCare Corp.¹	8,634		202,985
Cell Genesys Inc.¹	18,123		200,259
Alexion Pharmaceuticals Inc.¹	8,877		199,910
Regeneron Pharmaceuticals Inc.¹	15,414		193,137
Myriad Genetics Inc.¹	11,048		190,357
Noven Pharmaceuticals Inc.¹	9,297		182,593
Pharmacopeia Inc.¹	9,906		177,615
Cyberonics Inc.¹	7,367		174,524
InterMune Inc.¹	11,806		174,139
CV Therapeutics Inc.¹	11,863		170,946
Enzo Biochem Inc.¹	11,668		169,769


48		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. HEALTHCARE SECTOR INDEX FUND

April 30, 2004


Security	Shares or Principal		Value
Datascope Corp.		5,115	$	169,409
Transkaryotic Therapies Inc.¹		11,486		166,892
Albany Molecular Research Inc.¹		10,182		165,152
Cubist Pharmaceuticals Inc.¹		16,216		161,187
XOMA Ltd.¹		34,283		147,074
Lexicon Genetics Inc.¹		17,531		123,769
Orthodontic Centers of America Inc.¹		17,261		123,761
Maxygen Inc.¹		11,279		122,828
Praecis Pharmaceuticals Inc.¹		21,029		122,809
Molecular Devices Corp.¹		6,024		118,070
Trimeris Inc.¹		6,585		96,800
CuraGen Corp.¹		16,394		95,085
Cell Therapeutics Inc.¹		11,096		94,427
Savient Pharmaceuticals Inc.¹		23,662		88,733
Immunomedics Inc.¹		17,276		83,616
Theragenics Corp.¹		12,196		63,907
Gene Logic Inc.¹		12,543		53,056

TOTAL COMMON STOCKS (Cost: $639,637,342)				651,714,960

SHORT-TERM INVESTMENTS – 8.28%

MONEY MARKET FUNDS – 3.01%

Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^2,3		13,260,458		13,260,458
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^2,3		4,847,246		4,847,246
BlackRock Temp Cash Money Market Fund²		223,581		223,581
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares²		1,252,755		1,252,755

				19,584,040
FLOATING RATE NOTES – 2.08%

Beta Finance Inc.
1.06%, 05/20/04^2,4	$	220,329		220,328
1.06%, 09/15/04^2,4		440,659		440,642
1.06%, 10/12/04^2,4		220,329		220,320
1.14%, 03/15/05^2,4		220,329		220,482
1.15%, 08/23/04^2,4		220,329		220,387


Security	Principal		Value
Canadian Imperial Bank of Commerce
1.24%, 10/07/04²	$	330,494	$	330,473
1.38%, 11/22/04²		110,165		110,169
1.40%, 10/29/04²		440,659		440,653
CC USA Inc.
1.06%, 05/24/04^2,4		440,659		440,656
1.07%, 07/16/04²		110,165		109,922
1.10%, 07/15/04^2,4		220,329		220,345
1.29%, 04/15/05^2,4		440,659		440,617
1.51%, 02/15/05^2,4		286,428		286,786
Dorada Finance Inc.
1.04%, 07/01/04²		154,231		153,968
1.06%, 05/20/04^2,4		440,659		440,656
1.24%, 08/09/04²		110,165		110,160
1.48%, 01/18/05^2,4		330,494		330,483
Five Finance Inc.
1.05%, 04/29/05^2,4		352,527		352,492
HBOS Treasury Services PLC
1.10%, 04/22/05²		440,659		440,659
1.24%, 04/01/05²		282,022		281,996
K2 USA LLC
1.06%, 08/16/04^2,4		110,165		110,160
1.06%, 09/27/04^2,4		475,911		475,883
1.07%, 05/17/04²		220,329		220,329
1.46%, 01/12/05^2,4		220,329		220,314
Links Finance LLC
1.05%, 04/15/05^2,4		440,659		440,575
1.06%, 05/04/04²		220,329		220,329
1.06%, 06/28/04²		220,329		220,323
1.09%, 07/20/04²		176,263		176,256
1.19%, 04/25/05²		440,659		440,939
Nationwide Building Society
1.11%, 04/28/05^2,4		440,659		440,659
1.14%, 07/23/04^2,4		330,494		330,494
Northern Rock PLC
1.11%, 01/13/05^2,4		418,626		418,626
Permanent Financing PLC
1.05%, 03/10/05²		440,659		440,659
1.06%, 12/10/04²		220,329		220,329


SCHEDULES OF INVESTMENTS		49

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. HEALTHCARE SECTOR INDEX FUND

April 30, 2004


Security	Principal		Value
Sigma Finance Inc.
1.05%, 07/01/04²	$	220,329	$	220,320
1.08%, 10/07/04²		440,659		440,621
1.09%, 07/20/04²		220,329		220,320
1.24%, 08/06/04²		110,165		110,162
Tango Finance Corp.
1.06%, 07/06/04^2,4		132,198		132,195
1.06%, 01/18/05^2,4		193,890		193,876
1.06%, 04/07/05^2,4		161,722		161,707
1.07%, 02/25/05^2,4		246,769		246,729
1.08%, 07/15/04^2,4		132,198		132,189
WhistleJacket Capital LLC
1.06%, 09/15/04^2,4		220,329		220,313
1.26%, 10/20/04^2,4		109,151		108,502
1.32%, 02/04/05^2,4		110,165		110,149
White Pine Finance LLC
1.05%, 07/06/04²		264,395		264,391
1.05%, 04/15/05^2,4		330,494		330,431
1.06%, 08/26/04^2,4		220,329		220,319
1.06%, 11/15/04^2,4		264,395		264,395

				13,564,688
COMMERCIAL PAPER – 1.73%

Alpine Securitization Corp.
1.04%, 05/20/04²		220,329		220,221
Amsterdam Funding Corp.
1.03%, 05/05/04²		178,467		178,457
1.04%, 05/21/04²		264,395		264,258
Barton Capital Corp.
1.03%, 05/03/04²		110,270		110,270
1.03%, 05/06/04²		110,165		110,155
Blue Ridge Asset Funding Corp.
1.03%, 05/21/04²		220,329		220,216
Cantabric Finance LLC
1.09%, 07/22/04²		330,494		329,694
Corporate Asset Funding
1.05%, 05/21/04²		229,143		229,023
CRC Funding LLC
1.04%, 06/03/04²		440,659		440,265
1.10%, 07/07/04²		171,857		171,516
Delaware Funding Corp.
1.03%, 05/05/04²		330,860		330,841
1.03%, 05/21/04²		110,165		110,108
Edison Asset Securitization
1.03%, 05/06/04²		330,494		330,466
1.04%, 06/17/04²		440,659		440,086
1.05%, 06/22/04²		220,329		220,008
1.07%, 09/21/04²		220,329		219,407
Eureka Securitization Inc.
1.03%, 05/25/04²		88,132		88,076
Falcon Asset Securitization Corp.
1.03%, 05/05/04²		220,329		220,317
1.04%, 05/25/04²		330,494		330,285
1.04%, 05/26/04²		440,659		440,367
Ford Credit Auto Receivables
1.04%, 05/14/04²		110,165		110,130
Galaxy Funding Inc.
1.05%, 05/17/04²		220,329		220,240
1.07%, 07/20/04²		198,296		197,837
Gemini Securitization Corp.
1.03%, 05/24/04²		110,165		110,098
GIRO Funding US Corp.
1.05%, 05/19/04²		110,165		110,113
Grampian Funding LLC
1.26%, 10/22/04²		440,659		438,016
Jupiter Securitization Corp.
1.04%, 05/20/04²		330,494		330,333
1.04%, 05/24/04²		220,329		220,196
1.04%, 05/26/04²		302,080		301,881
1.04%, 05/27/04²		396,593		396,319
New Center Asset Trust
1.06%, 05/03/04²		550,823		550,823
Park Avenue Receivables Corp.
1.03%, 05/07/04²		220,329		220,304
Polonius Inc.
1.04%, 05/21/04²		254,921		254,789
Preferred Receivables Funding Corp.
1.04%, 05/20/04²		110,165		110,111
Scaldis Capital LLC
1.04%, 05/07/04²		220,329		220,304
1.04%, 05/20/04²		595,568		595,275
1.04%, 05/25/04²		220,329		220,189
1.05%, 06/30/04²		157,756		157,489


50		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. HEALTHCARE SECTOR INDEX FUND

April 30, 2004


Security	Principal		Value
Sydney Capital Corp.
1.25%, 10/22/04²	$	146,651	$	145,775
Thames Asset Global Securitization No. 1 Inc.
1.04%, 05/20/04²		220,329		220,221
Thunder Bay Funding Inc.
1.03%, 05/03/04²		158,875		158,876
Windmill Funding Corp.
1.03%, 05/05/04²		330,494		330,475
1.03%, 05/06/04²		220,329		220,310
1.03%, 05/10/04²		440,659		440,570

				11,284,710
TIME DEPOSITS – 1.10%

Abbey National Treasury Services PLC
1.25%, 01/06/05²		440,659		440,659
1.33%, 02/10/05²		220,329		220,304
1.39%, 02/02/05²		220,329		220,304
1.39%, 04/08/05²		308,461		308,418
1.40%, 10/25/04²		440,659		440,627
Bank of New York
1.39%, 11/01/04²		440,659		440,637
Bank of Novia Scotia
1.13%, 10/06/04²		440,659		440,659
1.24%, 10/07/04²		330,494		330,480
1.42%, 10/29/04²		330,494		330,506
National City Bank (Cleveland, Ohio)
1.25%, 01/06/05²		440,659		440,673
Prudential Funding LLC
1.06%, 05/03/04²		660,988		660,989
Toronto-Dominion Bank
1.04%, 06/22/04²		110,165		110,165
1.22%, 03/23/05²		771,153		771,033
1.34%, 02/10/05²		176,263		176,243
1.41%, 11/01/04²		330,494		330,478
UBS Finance (Delaware)
1.10%, 09/08/04²		440,659		438,935
1.11%, 12/17/04²		660,988		656,341
1.14%, 09/29/04²		440,659		438,589

				7,196,040
U.S. GOVERNMENT AGENCY NOTES – 0.21%

Federal Home Loan Mortgage Corp.
1.15%, 05/12/04²		330,494		330,399
1.28%, 08/19/04²		176,263		175,587
1.63%, 04/15/05²		308,461		309,396
Federal National Mortgage Association
1.28%, 08/20/04²		570,630		570,630

				1,386,012
REPURCHASE AGREEMENTS – 0.15%

Merrill Lynch Government Securities Inc.
1.07%, 05/03/04²		947,416		947,416

				947,416

TOTAL SHORT-TERM INVESTMENTS (Cost: $53,962,906)				53,962,906

TOTAL INVESTMENTS IN SECURITIES – 108.27% (Cost: $693,600,248)				705,677,866

Other Assets, Less Liabilities – (8.27%)				(53,880,485	)

NET ASSETS – 100.00%			$	651,797,381

Non-income earning securities.

All or a portion of this security represents investments of securities lending collateral.

Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

⁴

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		51

Schedule of Investments

iSHARES^® DOW JONES U.S. TECHNOLOGY SECTOR INDEX FUND

April 30, 2004


Security	Shares	Value
COMMON STOCKS – 99.98%

Microsoft Corp.	1,917,956	$	49,809,317
Intel Corp.	1,221,703		31,434,418
International Business Machines Corp.	324,158		28,581,011
Cisco Systems Inc.¹	1,294,948		27,025,565
Dell Inc.¹	425,100		14,755,221
Hewlett-Packard Co.	516,139		10,167,938
QUALCOMM Inc.	151,685		9,474,245
Oracle Corp.¹	751,756		8,434,702
Texas Instruments Inc.	326,379		8,192,113
Motorola Inc.	438,550		8,003,538
Applied Materials Inc.¹	317,588		5,789,629
Yahoo! Inc.¹	106,261		5,361,930
EMC Corp.¹	455,592		5,084,407
Analog Devices Inc.	70,470		3,002,022
Maxim Integrated Products Inc.	61,823		2,843,240
Corning Inc.¹	254,113		2,802,866
Lucent Technologies Inc.¹	803,142		2,706,589
Symantec Corp.¹	58,673		2,643,219
Sun Microsystems Inc.¹	619,335		2,415,407
Computer Associates International Inc.	87,183		2,337,376
Lexmark International Inc.¹	24,243		2,193,022
Xilinx Inc.¹	64,926		2,183,461
Veritas Software Corp.¹	80,523		2,147,548
Linear Technology Corp.	58,806		2,095,258
Xerox Corp.¹	149,473		2,007,422
Pitney Bowes Inc.	44,030		1,926,313
Adobe Systems Inc.	44,948		1,858,150
Juniper Networks Inc.¹	84,771		1,854,789
Apple Computer Inc.¹	65,613		1,688,222
Broadcom Corp. Class A¹	44,327		1,673,788
Electronic Data Systems Corp.	90,556		1,656,269
Micron Technology Inc.¹	114,755		1,562,963
KLA-Tencor Corp.¹	36,961		1,540,165
Intuit Inc.¹	34,269		1,455,404
Computer Sciences Corp.¹	35,314		1,444,696
Altera Corp.¹	71,296		1,426,633
SunGard Data Systems Inc.¹	53,695		1,399,829
National Semiconductor Corp.¹	33,519		1,367,240
Network Appliance Inc.¹	64,994		1,210,188
Avaya Inc.¹	82,665		1,130,857
Affiliated Computer Services Inc. Class A¹	22,989		1,114,966
Microchip Technology Inc.	39,305		1,101,326
PeopleSoft Inc.¹	64,007		1,080,438
Advanced Micro Devices Inc.¹	65,516		931,638
Scientific-Atlanta Inc.	28,756		931,407
Amdocs Ltd.¹	33,043		877,292
Siebel Systems Inc.¹	84,184		865,412
Novellus Systems Inc.¹	28,620		828,835
JDS Uniphase Corp.¹	270,603		822,633
BEA Systems Inc.¹	71,872		820,060
Unisys Corp.¹	62,575		815,352
Check Point Software Technologies Ltd.¹	33,904		794,371
NCR Corp.¹	17,760		793,694
Synopsys Inc.¹	29,074		777,148
VeriSign Inc.¹	45,422		732,657
Teradyne Inc.¹	35,935		732,355
BMC Software Inc.¹	42,277		731,392
Mercury Interactive Corp.¹	17,049		725,435
Autodesk Inc.	21,307		713,784
Novell Inc.¹	72,249		696,480
SanDisk Corp.¹	29,979		692,815
Marvell Technology Group Ltd.¹	17,202		666,233
Zebra Technologies Corp. Class A¹	8,943		655,433
Cadence Design Systems Inc.¹	49,415		633,500
Tellabs Inc.¹	71,654		625,539
Red Hat Inc.¹	26,555		603,064
Comverse Technology Inc.¹	36,397		595,455
NVIDIA Corp.¹	28,964		594,921
Citrix Systems Inc.¹	30,802		586,778
Crown Castle International Corp.¹	41,398		577,502
Harris Corp.	12,595		567,405
Lam Research Corp.¹	25,109		555,913
Storage Technology Corp.¹	20,980		551,145
LSI Logic Corp.¹	71,585		532,592
Cognizant Technology Solutions Corp.¹	12,117		524,181
Intersil Corp. Class A	26,301		519,445
WebMD Corp.¹	58,057		510,321
American Tower Corp. Class A¹	40,046		498,573
International Rectifier Corp.¹	12,462		493,994
Compuware Corp.¹	64,349		492,270


52		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. TECHNOLOGY SECTOR INDEX FUND

April 30, 2004.


Security	Shares	Value
QLogic Corp.¹	17,940	$	484,201
Atmel Corp.¹	82,622		482,512
Network Associates Inc.¹	30,526		478,648
Andrew Corp.¹	27,734		470,091
UTStarcom Inc.¹	17,093		450,401
3Com Corp.¹	72,031		443,711
PMC-Sierra Inc.¹	32,703		397,341
ADC Telecommunications Inc.¹	153,265		383,162
Conexant Systems Inc.¹	86,287		375,348
Agere Systems Inc. Class B¹	171,364		371,860
CIENA Corp.¹	89,333		369,839
Fairchild Semiconductor International Inc. Class A¹	18,961		369,171
Seagate Technology	28,677		358,749
Polycom Inc.¹	18,647		355,785
Reynolds & Reynolds Co. (The) Class A	12,345		352,573
Agere Systems Inc. Class A¹	150,847		340,914
Rambus Inc.¹	17,804		331,689
Level 3 Communications Inc.¹	116,534		329,791
Plantronics Inc.¹	8,637		327,774
Cypress Semiconductor Corp.¹	22,748		317,790
Western Digital Corp.¹	38,932		314,571
Ask Jeeves Inc.¹	8,839		313,519
SpectraSite Inc.¹	8,371		312,824
Sybase Inc.¹	18,287		312,708
IKON Office Solutions Inc.	27,771		309,091
Maxtor Corp.¹	46,438		302,311
Silicon Laboratories Inc.¹	6,352		299,497
BearingPoint Inc.¹	29,378		294,368
Semtech Corp.¹	13,881		291,779
Avocent Corp.¹	8,803		282,488
Advanced Fibre Communications Inc.¹	16,497		275,500
Hyperion Solutions Corp.¹	7,156		274,647
Integrated Device Technology Inc.¹	19,965		268,529
Macromedia Inc.¹	12,753		262,712
Applied Micro Circuits Corp.¹	59,182		260,993
Brocade Communications Systems Inc.¹	48,563		259,812
Henry (Jack) & Associates Inc.	14,246		259,135
Electonics For Imaging Inc.¹	10,193		258,698
Cree Inc.¹	13,924		258,290
EarthLink Inc.¹	27,990		257,788
RF Micro Devices Inc.¹	35,007		257,652
Imation Corp.	6,574		256,189
Emulex Corp.¹	15,290		254,884
CACI International Inc. Class A¹	5,483		249,476
Foundry Networks Inc.¹	21,625		244,363
Trimble Navigation Ltd.¹	9,458		236,923
Akamai Technologies Inc.¹	19,967		236,010
Parametric Technology Corp.¹	50,707		232,238
TIBCO Software Inc.¹	30,802		231,015
Cerner Corp.¹	5,372		230,029
Skyworks Solutions Inc.¹	26,815		229,536
OmniVision Technologies Inc.¹	10,256		228,729
Gateway Inc.¹	47,352		228,237
Varian Semiconductor Equipment Associates Inc.¹	6,775		220,594
Intergraph Corp.¹	8,656		218,218
Cymer Inc.¹	6,812		217,848
Kronos Inc.¹	5,783		210,964
CNET Networks Inc.¹	24,709		210,521
Mentor Graphics Corp.¹	12,659		210,013
Silicon Storage Technology Inc.¹	15,684		207,813
FileNET Corp.¹	7,140		196,064
Axcelis Technologies Inc.¹	18,573		195,202
ADTRAN Inc.	7,938		194,560
Tekelec¹	11,492		191,572
Ascential Software Corp.¹	11,137		189,329
Perot Systems Corp. Class A¹	14,024		186,800
RSA Security Inc.¹	11,482		183,942
eResearch Technology Inc.¹	5,749		180,979
InterDigital Communications Corp.¹	10,382		180,958
Sonus Networks Inc.¹	46,197		175,549
Black Box Corp.	3,379		172,160
Vitesse Semiconductor Corp.¹	40,209		172,095
CommScope Inc.¹	9,138		160,006
Adaptec Inc.¹	20,320		158,902
Micrel Inc.¹	12,584		153,776
United Online Inc.¹	9,145		151,807
MICROS Systems Inc.¹	3,441		150,957
Keane Inc.¹	10,563		149,995
Digital River Inc.¹	5,623		144,792
Lattice Semiconductor Corp.¹	20,281		144,401


SCHEDULES OF INVESTMENTS		53

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. TECHNOLOGY SECTOR INDEX FUND

April 30, 2004


Security	Shares	Value
Brooks Automation Inc.¹	8,560	$	142,438
Power Integrations Inc.¹	5,693		140,219
F5 Networks Inc.¹	5,474		139,040
Amkor Technology Inc.¹	17,070		137,926
Credence Systems Corp.¹	12,045		134,181
DSP Group Inc.¹	5,398		133,762
Zoran Corp.¹	8,041		132,918
Macrovision Corp.¹	7,872		132,564
Silicon Image Inc.¹	12,757		129,994
Sycamore Networks Inc.¹	35,127		129,970
TriQuint Semiconductor Inc.¹	23,670		129,948
NetIQ Corp.¹	10,014		128,780
ATMI Inc.¹	5,816		128,417
Wind River Systems Inc.¹	13,484		126,210
IDX Systems Corp.¹	3,979		126,134
Imagistics International Inc.¹	3,086		124,952
Advanced Digital Information Corp.¹	11,780		124,397
Borland Software Corp.¹	14,995		123,709
LTX Corp.¹	11,162		122,001
Dendrite International Inc.¹	7,117		121,985
Hutchinson Technology Inc.¹	4,945		121,598
Aspect Communications Corp.¹	10,177		120,394
RealNetworks Inc.¹	20,867		119,985
Exar Corp.¹	7,672		117,075
Extreme Networks Inc.¹	21,048		116,395
Informatica Corp.¹	15,841		114,689
Internet Security Systems Inc.¹	8,378		111,344
Mykrolis Corp.¹	7,548		109,823
Advent Software Inc.¹	5,818		108,680
Ariba Inc.¹	47,249		104,420
M-Systems Flash Disk Pioneers Ltd.¹	5,943		103,705
S1 Corp.¹	12,855		103,611
Openwave Systems Inc.¹	11,926		101,610
Cirrus Logic Inc.¹	16,079		100,172
Micromuse Inc.¹	14,703		98,657
Mindspeed Technologies Inc.¹	19,011		97,717
Kulicke & Soffa Industries Inc.¹	9,585		95,179
Actel Corp.¹	4,771		95,038
Quest Software Inc.¹	8,429		94,826
Quantum Corp.¹	29,599		92,645
CIBER Inc.¹	10,467		91,586
Mercury Computer Systems Inc.¹	4,083		91,459
Inter-Tel Inc.	3,744		89,631
Verity Inc.¹	7,084		87,842
webMethods Inc.¹	9,924		85,346
Vignette Corp.¹	48,601		84,566
McDATA Corp. Class A¹	15,510		82,668
Harmonic Inc.¹	12,156		80,351
PanAmSat Corp.¹	3,443		79,464
Photronics Inc.¹	5,298		78,887
SERENA Software Inc.¹	4,302		76,447
Transmeta Corp.¹	27,030		75,414
SonicWALL Inc.¹	10,457		74,872
Silicon Graphics Inc.¹	38,793		74,870
Powerwave Technologies Inc.¹	10,925		73,962
C-COR.net Corp.¹	7,907		71,796
JDA Software Group Inc.¹	5,460		71,690
Retek Inc.¹	10,160		70,917
Packeteer Inc.¹	5,831		70,264
Kopin Corp.¹	13,490		67,180
Echelon Corp.¹	6,156		67,100
Agile Software Corp.¹	8,753		66,085
Manugistics Group Inc.¹	12,080		65,353
Ultratech Inc.¹	4,048		65,213
Cohu Inc.	3,711		64,943
Cable Design Technologies Corp.¹	7,581		64,666
REMEC Inc.¹	10,202		64,171
Finisar Corp.¹	35,180		62,269
RadiSys Corp.¹	3,334		62,246
E.piphany Inc.¹	14,152		61,986
Arris Group Inc.¹	10,310		61,654
ESS Technology Inc.¹	5,723		61,351
Interwoven Inc¹	6,827		57,279
DuPont Photomasks Inc.¹	2,737		56,601
InFocus Corp.¹	6,766		55,278
General Cable Corp.¹	7,084		54,547
MatrixOne Inc.¹	8,959		53,844
Asyst Technologies Inc.¹	7,948		52,536
MRO Software Inc.¹	3,764		50,174
Entrust Inc.¹	10,504		48,003
MRV Communications Inc.¹	19,295		45,343
Siliconix Inc.¹	1,163		45,020


54		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. TECHNOLOGY SECTOR INDEX FUND

April 30, 2004


Security	Shares or Principal		Value
Iomega Corp.		8,573	$	43,637
PC-Tel Inc.¹		3,884		43,035
Stratex Networks Inc.¹		12,712		41,568
WatchGuard Technologies Inc.¹		5,369		37,368
Actuate Corp.¹		10,883		35,587
Keynote Systems Inc.¹		2,775		32,912
Computer Network Technology Corp.¹		5,008		32,802
Concurrent Computer Corp.¹		11,865		24,323
McDATA Corp. Class B¹		4,646		23,834

TOTAL COMMON STOCKS (Cost: $359,934,120)				322,473,480

SHORT-TERM INVESTMENTS – 8.81%

MONEY MARKET FUNDS – 3.18%

Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^2,3		6,912,420		6,912,420
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^2,3		2,562,391		2,562,391
BlackRock Temp Cash Money Market Fund²		118,191		118,191
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares²		662,242		662,242

				10,255,244
FLOATING RATE NOTES – 2.22%

Beta Finance Inc.
1.06%, 05/20/04^2,4	$	116,472		116,471
1.06%, 09/15/04^2,4		232,945		232,936
1.06%, 10/12/04^2,4		116,472		116,467
1.14%, 03/15/05^2,4		116,472		116,553
1.15%, 08/23/04^2,4		116,472		116,503
Canadian Imperial Bank of Commerce
1.24%, 10/07/04²		174,708		174,697
1.38%, 11/22/04²		58,236		58,239
1.40%, 10/29/04²		232,945		232,942

Security	Principal		Value
CC USA Inc.
1.06%, 05/24/04^2,4	$	232,945	$	232,943
1.07%, 07/16/04²		58,236		58,108
1.10%, 07/15/04^2,4		116,472		116,481
1.29%, 04/15/05^2,4		232,945		232,922
1.51%, 02/15/05^2,4		151,414		151,603
Dorada Finance Inc.
1.04%, 07/01/04²		81,531		81,392
1.06%, 05/20/04^2,4		232,945		232,943
1.24%, 08/09/04²		58,236		58,234
1.48%, 01/18/05^2,4		174,708		174,702
Five Finance Inc.
1.05%, 04/29/05^2,4		186,356		186,337
HBOS Treasury Services PLC
1.10%, 04/22/05²		232,945		232,945
1.24%, 04/01/05²		149,085		149,071
K2 USA LLC
1.06%, 08/16/04^2,4		58,236		58,234
1.06%, 09/27/04^2,⁴		251,580		251,565
1.07%, 05/17/04²		116,472		116,472
1.46%, 01/12/05^2,4		116,472		116,464
Links Finance LLC
1.05%, 04/15/05^2,4		232,945		232,900
1.06%, 05/04/04²		116,472		116,472
1.06%, 06/28/04²		116,472		116,469
1.09%, 07/20/04²		93,178		93,174
1.19%, 04/25/05²		232,945		233,093
Nationwide Building Society
1.11%, 04/28/05^2,4		232,945		232,945
1.14%, 07/23/04^2,4		174,708		174,708
Northern Rock PLC
1.11%, 01/13/05^2,4		221,297		221,297
Permanent Financing PLC
1.05%, 03/10/05²		232,945		232,945
1.06%, 12/10/04²		116,472		116,472
Sigma Finance Inc.
1.05%, 07/01/04²		116,472		116,468
1.08%, 10/07/04²		232,945		232,925
1.09%, 07/20/04²		116,472		116,467
1.24%, 08/06/04²		58,236		58,235


SCHEDULES OF INVESTMENTS		55

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. TECHNOLOGY SECTOR INDEX FUND

April 30, 2004


Security	Principal		Value
Tango Finance Corp.
1.06%, 07/06/04^2,4	$	69,883	$	69,882
1.06%, 01/18/05^2,4		102,496		102,488
1.06%, 04/07/05^2,4		85,491		85,483
1.07%, 02/25/05^2,4		130,449		130,428
1.08%, 07/15/04^2,4		69,883		69,879
WhistleJacket Capital LLC
1.06%, 09/15/04^2,4		116,472		116,464
1.26%, 10/20/04^2,4		57,700		57,357
1.32%, 02/04/05^2,4		58,236		58,227
White Pine Finance LLC
1.05%, 07/06/04²		139,767		139,764
1.05%, 04/15/05^2,4		174,708		174,675
1.06%, 08/26/04^2,4		116,472		116,467
1.06%, 11/15/04^2,4		139,767		139,767

				7,170,675
COMMERCIAL PAPER – 1.85%

Alpine Securitization Corp.
1.04%, 05/20/04²		116,472		116,415
Amsterdam Funding Corp.
1.03%, 05/05/04²		94,343		94,337
1.04%, 05/21/04²		139,767		139,694
Barton Capital Corp.
1.03%, 05/03/04²		58,292		58,292
1.03%, 05/06/04²		58,236		58,231
Blue Ridge Asset Funding Corp.
1.03%, 05/21/04²		116,472		116,412
Cantabric Finance LLC
1.09%, 07/22/04²		174,708		174,285
Corporate Asset Funding
1.05%, 05/21/04²		121,131		121,068
CRC Funding LLC
1.04%, 06/03/04²		232,945		232,737
1.10%, 07/07/04²		90,848		90,668
Delaware Funding Corp.
1.03%, 05/05/04²		174,902		174,892
1.03%, 05/21/04²		58,236		58,206
Edison Asset Securitization
1.03%, 05/06/04²		174,708		174,693
1.04%, 06/17/04²		232,945		232,642
1.05%, 06/22/04²		116,472		116,302
1.07%, 09/21/04²		116,472		115,984
Eureka Securitization Inc.
1.03%, 05/25/04²		46,589		46,560
Falcon Asset Securitization Corp.
1.03%, 05/05/04²		116,472		116,466
1.04%, 05/25/04²		174,708		174,598
1.04%, 05/26/04²		232,945		232,791
Ford Credit Auto Receivables
1.04%, 05/14/04²		58,236		58,218
Galaxy Funding Inc.
1.05%, 05/17/04²		116,472		116,425
1.07%, 07/20/04²		104,825		104,582
Gemini Securitization Corp.
1.03%, 05/24/04²		58,236		58,201
GIRO Funding US Corp.
1.05%, 05/19/04²		58,236		58,209
Grampian Funding LLC
1.26%, 10/22/04²		232,945		231,548
Jupiter Securitization Corp.
1.04%, 05/20/04²		174,708		174,623
1.04%, 05/24/04²		116,472		116,402
1.04%, 05/26/04²		159,688		159,583
1.04%, 05/27/04²		209,650		209,506
New Center Asset Trust
1.06%, 05/03/04²		291,181		291,181
Park Avenue Receivables Corp.
1.03%, 05/07/04²		116,472		116,459
Polonius Inc.
1.04%, 05/21/04²		134,758		134,688
Preferred Receivables Funding Corp.
1.04%, 05/20/04²		58,236		58,208
Scaldis Capital LLC
1.04%, 05/07/04²		116,472		116,459
1.04%, 05/20/04²		314,834		314,680
1.04%, 05/25/04²		116,472		116,398
1.05%, 06/30/04²		83,394		83,254
Sydney Capital Corp.
1.25%, 10/22/04²		77,524		77,061
Thames Asset Global Securitization No. 1 Inc.
1.04%, 05/20/04²		116,472		116,415


56		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. TECHNOLOGY SECTOR INDEX FUND

April 30, 2004


Security	Principal		Value
Thunder Bay Funding Inc.
1.03%, 05/03/04²	$	83,986	$	83,986
Windmill Funding Corp.
1.03%, 05/05/04²		174,708		174,698
1.03%, 05/06/04²		116,472		116,462
1.03%, 05/10/04²		232,945		232,898

				5,965,417
TIME DEPOSITS – 1.18%

Abbey National Treasury Services PLC
1.25%, 01/06/05²		232,945		232,945
1.33%, 02/10/05²		116,472		116,459
1.39%, 02/02/05²		116,472		116,459
1.39%, 04/08/05²		163,061		163,038
1.40%, 10/25/04²		232,945		232,928
Bank of New York
1.39%, 11/01/04²		232,945		232,933
Bank of Novia Scotia
1.13%, 10/06/04²		232,945		232,945
1.24%, 10/07/04²		174,708		174,701
1.42%, 10/29/04²		174,708		174,715
National City Bank (Cleveland, Ohio)
1.25%, 01/06/05²		232,945		232,952
Prudential Funding LLC
1.06%, 05/03/04²		349,417		349,417
Toronto-Dominion Bank
1.04%, 06/22/04²		58,236		58,236
1.22%, 03/23/05²		407,653		407,590
1.34%, 02/10/05²		93,178		93,167
1.41%, 11/01/04²		174,708		174,700
UBS Finance (Delaware)
1.10%, 09/08/04²		232,945		232,034
1.11%, 12/17/04²		349,417		346,961
1.14%, 09/29/04²		232,945		231,850

				3,804,030
U.S. GOVERNMENT AGENCY NOTES – 0.23%

Federal Home Loan Mortgage Corp.
1.15%, 05/12/04²		174,708		174,658
1.28%, 08/19/04²		93,178		92,820
1.63%, 04/15/05²		163,061		163,555
Federal National Mortgage Association
1.28%, 08/20/04²		302,828		301,651

				732,684
REPURCHASE AGREEMENTS – 0.15%

Merrill Lynch Government Securities Inc.
1.07%, 05/03/04²		500,831		500,831

				500,831

TOTAL SHORT-TERM INVESTMENTS (Cost: $28,428,881)				28,428,881

TOTAL INVESTMENTS IN SECURITIES – 108.79% (Cost: $388,363,001)				350,902,361

Other Assets, Less Liabilities – (8.79%)				(28,366,257	)

NET ASSETS – 100.00%			$	322,536,104

Non-income earning securities.

All or a portion of this security represents investments of securities lending collateral.

Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

⁴

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		57

Schedule of Investments

iSHARES^® DOW JONES U.S. TELECOMMUNICATIONS SECTOR INDEX FUND

April 30, 2004


Security	Shares		Value
COMMON STOCKS – 99.46%

Verizon Communications Inc.		1,266,276	$	47,789,256
SBC Communications Inc.		1,698,766		42,299,273
BellSouth Corp.		636,319		16,423,393
BCE Inc.		513,425		10,237,695
AT&T Wireless Services Inc.¹		734,989		10,150,198
Alltel Corp.		197,974		9,966,011
Sprint Corp. (FON Group)		551,836		9,872,337
Nextel Communications Inc. Class A¹		409,632		9,773,820
AT&T Corp.		565,220		9,693,523
Vodafone Group PLC ADR		346,130		8,494,030
Telephone & Data Systems Inc.		127,179		8,388,727
CenturyTel Inc.		252,299		7,286,395
Citizens Communications Co.¹		420,238		5,479,904
Qwest Communications International Inc.¹		1,129,532		4,540,719
United States Cellular Corp.¹		113,536		3,890,879
NII Holdings Inc. Class B¹		63,736		2,230,760
Western Wireless Corp. Class A¹		102,295		2,129,782
Cincinnati Bell Inc.¹		393,741		1,555,277
Nextel Partners Inc. Class A¹		107,283		1,432,228
IDT Corp. Class B¹		72,512		1,350,173
Wireless Facilities Inc.¹		91,590		878,348
IDT Corp.¹		39,222		728,745

TOTAL COMMON STOCKS (Cost: $228,549,043)				214,591,473

SHORT-TERM INVESTMENTS – 11.90%

MONEY MARKET FUNDS – 4.36%

Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^2,3		6,410,068		6,410,068
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^2,3		2,295,292		2,295,292
BlackRock Temp Cash Money Market Fund²		105,871		105,871
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares²		593,211		593,211

				9,404,442

Security	Principal		Value
FLOATING RATE NOTES – 2.98%

Beta Finance Inc.
1.06%, 05/20/04^2,4	$	104,331	$	104,331
1.06%, 09/15/04^2,4		208,663		208,656
1.06%, 10/12/04^2,4		104,331		104,327
1.14%, 03/15/05^2,4		104,331		104,404
1.15%, 08/23/04^2,4		104,331		104,359
Canadian Imperial Bank of Commerce
1.24%, 10/07/04²		156,497		156,487
1.38%, 11/22/04²		52,166		52,168
1.40%, 10/29/04²		208,663		208,660
CC USA Inc.
1.06%, 05/24/04^2,4		208,663		208,662
1.07%, 07/16/04²		52,166		52,051
1.10%, 07/15/04^2,4		104,331		104,339
1.29%, 04/15/05^2,4		208,663		208,643
1.51%, 02/15/05^2,4		135,631		135,800
Dorada Finance Inc.
1.04%, 07/01/04²		73,032		72,908
1.06%, 05/20/04^2,4		208,663		208,661
1.24%, 08/09/04²		52,166		52,164
1.48%, 01/18/05^2,4		156,497		156,492
Five Finance Inc.
1.05%, 04/29/05^2,4		166,930		166,914
HBOS Treasury Services PLC
1.10%, 04/22/05²		208,663		208,663
1.24%, 04/01/05²		133,544		133,532
K2 USA LLC
1.06%, 08/16/04^2,4		52,166		52,163
1.06%, 09/27/04^2,4		225,356		225,342
1.07%, 05/17/04²		104,331		104,331
1.46%, 01/12/05^2,4		104,331		104,324
Links Finance LLC
1.05%, 04/15/05^2,4		208,663		208,623
1.06%, 05/04/04²		104,331		104,331
1.06%, 06/28/04²		104,331		104,328
1.09%, 07/20/04²		83,465		83,462
1.19%, 04/25/05²		208,663		208,796
Nationwide Building Society
1.11%, 04/28/05^2,4		208,663		208,663
1.14%, 07/23/04^2,4		156,497		156,497


58		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. TELECOMMUNICATIONS SECTOR INDEX FUND

April 30, 2004


Security	Principal		Value
Northern Rock PLC
1.11%, 01/13/05^2,4	$	198,230	$	198,230
Permanent Financing PLC
1.05%, 03/10/05²		208,663		208,663
1.06%, 12/10/04²		104,331		104,331
Sigma Finance Inc.
1.05%, 07/01/04²		104,331		104,327
1.08%, 10/07/04²		208,663		208,646
1.09%, 07/20/04²		104,331		104,327
1.24%, 08/06/04²		52,166		52,164
Tango Finance Corp.
1.06%, 07/06/04^2,4		62,599		62,598
1.06%, 01/18/05^2,4		91,812		91,805
1.06%, 04/07/05^2,4		76,579		76,572
1.07%, 02/25/05^2,4		116,851		116,832
1.08%, 07/15/04^2,4		62,599		62,595
WhistleJacket Capital LLC
1.06%, 09/15/04^2,4		104,331		104,324
1.26%, 10/20/04^2,4		51,686		51,378
1.32%, 02/04/05^2,4		52,166		52,158
White Pine Finance LLC
1.05%, 07/06/04²		125,198		125,196
1.05%, 04/15/05^2,4		156,497		156,467
1.06%, 08/26/04^2,4		104,331		104,326
1.06%, 11/15/04^2,4		125,198		125,198

				6,423,218
COMMERCIAL PAPER – 2.47%

Alpine Securitization Corp.
1.04%, 05/20/04²		104,331		104,280
Amsterdam Funding Corp.
1.03%, 05/05/04²		84,508		84,504
1.04%, 05/21/04²		125,198		125,133
Barton Capital Corp.
1.03%, 05/03/04²		52,216		52,216
1.03%, 05/06/04²		52,166		52,161
Blue Ridge Asset Funding Corp.
1.03%, 05/21/04²		104,331		104,278
Cantabric Finance LLC
1.09%, 07/22/04²		156,497		156,119
Corporate Asset Funding
1.05%, 05/21/04²		108,505		108,448
CRC Funding LLC
1.04%, 06/03/04²		208,663		208,476
1.10%, 07/07/04²		81,379		81,217
Delaware Funding Corp.
1.03%, 05/05/04²		156,670		156,662
1.03%, 05/21/04²		52,166		52,139
Edison Asset Securitization
1.03%, 05/06/04²		156,497		156,484
1.04%, 06/17/04²		208,663		208,392
1.05%, 06/22/04²		104,331		104,180
1.07%, 09/21/04²		104,331		103,894
Eureka Securitization Inc.
1.03%, 05/25/04²		41,733		41,706
Falcon Asset Securitization Corp.
1.03%, 05/05/04²		104,331		104,325
1.04%, 05/25/04²		156,497		156,398
1.04%, 05/26/04²		208,663		208,525
Ford Credit Auto Receivables
1.04%, 05/14/04²		52,166		52,149
Galaxy Funding Inc.
1.05%, 05/17/04²		104,331		104,289
1.07%, 07/20/04²		93,898		93,681
Gemini Securitization Corp.
1.03%, 05/24/04²		52,166		52,134
GIRO Funding US Corp.
1.05%, 05/19/04²		52,166		52,141
Grampian Funding LLC
1.26%, 10/22/04²		208,663		207,412
Jupiter Securitization Corp.
1.04%, 05/20/04²		156,497		156,421
1.04%, 05/24/04²		104,331		104,268
1.04%, 05/26/04²		143,043		142,949
1.04%, 05/27/04²		187,797		187,667
New Center Asset Trust
1.06%, 05/03/04²		260,829		260,829
Park Avenue Receivables Corp.
1.03%, 05/07/04²		104,331		104,320
Polonius Inc.
1.04%, 05/21/04²		120,711		120,649
Preferred Receivables Funding Corp.
1.04%, 05/20/04²		52,166		52,140


SCHEDULES OF INVESTMENTS		59

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. TELECOMMUNICATIONS SECTOR INDEX FUND

April 30, 2004


Security	Principal		Value
Scaldis Capital LLC
1.04%, 05/07/04²	$	104,331	$	104,319
1.04%, 05/20/04²		282,016		281,877
1.04%, 05/25/04²		104,331		104,265
1.05%, 06/30/04²		74,701		74,575
Sydney Capital Corp.
1.25%, 10/22/04²		69,443		69,028
Thames Asset Global Securitization No. 1 Inc.
1.04%, 05/20/04²		104,331		104,280
Thunder Bay Funding Inc.
1.03%, 05/03/04²		75,231		75,231
Windmill Funding Corp.
1.03%, 05/05/04²		156,497		156,488
1.03%, 05/06/04²		104,331		104,322
1.03%, 05/10/04²		208,663		208,621

				5,343,592
TIME DEPOSITS – 1.58%

Abbey National Treasury Services PLC
1.25%, 01/06/05²		208,663		208,663
1.33%, 02/10/05²		104,331		104,319
1.39%, 02/02/05²		104,331		104,320
1.39%, 04/08/05²		146,064		146,044
1.40%, 10/25/04²		208,663		208,648
Bank of New York
1.39%, 11/01/04²		208,663		208,653
Bank of Novia Scotia
1.13%, 10/06/04²		208,663		208,663
1.24%, 10/07/04²		156,497		156,490
1.42%, 10/29/04²		156,497		156,503
National City Bank (Cleveland, Ohio)
1.25%, 01/06/05²		208,663		208,670
Prudential Funding LLC
1.06%, 05/03/04²		312,994		312,994
Toronto-Dominion Bank
1.04%, 06/22/04²		52,166		52,166
1.22%, 03/23/05²		365,160		365,103
1.34%, 02/10/05²		83,465		83,455
1.41%, 11/01/04²		156,497		156,489
UBS Finance (Delaware)
1.10%, 09/08/04²		208,663		207,847
1.11%, 12/17/04²		312,994		310,795
1.14%, 09/29/04²		208,663		207,683

				3,407,505
U.S. GOVERNMENT AGENCY NOTES – 0.30%

Federal Home Loan Mortgage Corp.
1.15%, 05/12/04²		156,497		156,452
1.28%, 08/19/04²		83,465		83,145
1.63%, 04/15/05²		146,064		146,507
Federal National Mortgage Association
1.28%, 08/20/04²		271,262		270,206

				656,310
REPURCHASE AGREEMENTS – 0.21%

Merrill Lynch Government Securities Inc.
1.07%, 05/03/04²		448,625		448,625

				448,625

TOTAL SHORT-TERM INVESTMENTS (Cost: $25,683,692)				25,683,692

TOTAL INVESTMENTS IN SECURITIES – 111.36% (Cost: $254,232,735)				240,275,165

Other Assets, Less Liabilities – (11.36%)				(24,518,307	)

NET ASSETS – 100.00%			$	215,756,858

Non-income earning securities.

All or a portion of this security represents investments of securities lending collateral.

Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

⁴

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

See notes to financial statements.


60		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® DOW JONES U.S. UTILITIES SECTOR INDEX FUND

April 30, 2004


Security	Shares	Value
COMMON STOCKS – 99.82%

Exelon Corp.	416,692	$	27,893,362
Southern Company	930,904		26,772,799
Dominion Resources Inc.	411,659		26,267,961
Duke Energy Corp.	1,147,977		24,176,396
FirstEnergy Corp.	417,493		16,323,976
Entergy Corp.	289,729		15,819,203
American Electric Power Co. Inc.	499,992		15,219,757
TXU Corp.	410,002		13,997,468
PG&E Corp.¹	498,309		13,713,464
FPL Group Inc.	214,600		13,652,852
Progress Energy Inc.	310,215		13,267,896
Public Service Enterprise Group Inc.	297,664		12,769,786
Consolidated Edison Inc.	285,404		11,761,499
Ameren Corp.	230,309		10,069,110
Edison International	412,461		9,651,587
PPL Corp.	224,709		9,628,781
Xcel Energy Inc.	504,414		8,438,846
DTE Energy Co.	212,869		8,306,148
Constellation Energy Group Inc.	212,235		8,166,803
Sempra Energy	252,716		8,023,733
Cinergy Corp.	210,106		7,971,422
KeySpan Corp.	201,189		7,272,982
NiSource Inc.	332,210		6,697,354
AES Corp. (The)¹	746,193		6,469,493
Wisconsin Energy Corp.	149,986		4,709,560
Pinnacle West Capital Corp.	115,609		4,515,688
SCANA Corp.	127,001		4,368,834
Energy East Corp.	184,958		4,355,761
Pepco Holdings Inc.	217,060		4,111,116
Questar Corp.	105,195		3,731,267
CenterPoint Energy Inc.	342,149		3,691,788
Equitable Resources Inc.	78,102		3,670,013
Alliant Energy Corp.	140,244		3,486,466
NSTAR	67,188		3,251,899
MDU Resources Group Inc.	136,822		3,064,813
TECO Energy Inc.	237,901		3,028,480
Northeast Utilities	161,376		2,961,250
Reliant Energy Inc.¹	351,853		2,923,898
Great Plains Energy Inc.	87,742		2,738,428
Puget Energy Inc.	122,920		2,699,323
OGE Energy Corp.	110,135		2,648,747
ONEOK Inc.	120,991		2,534,761
National Fuel Gas Co.	97,719		2,393,138
Aqua America Inc.	116,698		2,386,474
Hawaiian Electric Industries Inc.	47,659		2,371,512
Vectren Corp.	95,705		2,311,276
Calpine Corp.¹	521,636		2,263,900
Allegheny Energy Inc.¹	160,312		2,209,099
Westar Energy Inc.	105,857		2,160,541
AGL Resources Inc.	74,891		2,141,883
DPL Inc.	119,949		2,113,501
WPS Resources Corp.	45,684		2,092,784
UGI Corp.	63,478		1,999,557
Peoples Energy Corp.	46,699		1,952,018
Nicor Inc.	55,608		1,890,116
Piedmont Natural Gas Co.	45,106		1,826,793
Duquesne Light Holdings Inc.	95,077		1,784,595
WGL Holdings Inc.	61,417		1,736,873
Energen Corp.	41,098		1,699,402
CMS Energy Corp.¹	203,421		1,690,429
Atmos Energy Corp.	65,453		1,612,762
PNM Resources Inc.	51,029		1,489,026
IDACORP Inc.	48,236		1,430,197
Dynegy Inc. ClassA¹	353,274		1,398,965
Southern Union Co.¹	68,568		1,348,047
New Jersey Resources Corp.	34,564		1,317,234
Black Hills Corp.	40,604		1,242,076
Cleco Corp.	60,134		1,079,405
Aquila Inc.¹	248,060		1,054,255
Sierra Pacific Resources¹	147,908		1,047,189
UniSource Energy Corp.	40,439		987,925
Avista Corp.	57,567		972,882
Northwest Natural Gas Co.	32,490		955,206
El Paso Electric Co.¹	61,292		867,282
Texas Genco Holdings Inc.	19,324		683,683
NUI Corp.	20,621		343,546

TOTAL COMMON STOCKS (Cost: $414,269,634)			439,678,341


SCHEDULES OF INVESTMENTS		61

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. UTILITIES SECTOR INDEX FUND

April 30, 2004


Security	Shares or Principal		Value
SHORT-TERM INVESTMENTS – 14.91%

MONEY MARKET FUNDS – 5.39%

Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^2,3		16,032,000	$	16,032,000
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^2,3		5,913,285		5,913,285
BlackRock Temp Cash Money Market Fund²		272,753		272,753
Short-Term Investment Co.- Prime Money Market Portfolio, Institutional Shares²		1,528,270		1,528,270

				23,746,308
FLOATING RATE NOTES – 3.76%

Beta Finance Inc.
1.06%, 05/20/04^2,4	$	268,786		268,784
1.06%, 09/15/04^2,4		537,571		537,552
1.06%, 10/12/04^2,4		268,786		268,774
1.14%, 03/15/05^2,4		268,786		268,972
1.15%, 08/23/04^2,4		268,786		268,856
Canadian Imperial Bank of Commerce
1.24%, 10/07/04²		403,179		403,153
1.38%, 11/22/04²		134,393		134,399
1.40%, 10/29/04²		537,571		537,565
CC USA Inc.
1.06%, 05/24/04^2,4		537,571		537,568
1.07%, 07/16/04²		134,393		134,097
1.10%, 07/15/04^2,4		268,786		268,805
1.29%, 04/15/05^2,4		537,571		537,520
1.51%, 02/15/05^2,4		349,421		349,858
Dorada Finance Inc.
1.04%, 07/01/04²		188,150		187,829
1.06%, 05/20/04^2,4		537,571		537,568
1.24%, 08/09/04²		134,393		134,387
1.48%, 01/18/05^2,4		403,179		403,164
Five Finance Inc.
1.05%, 04/29/05^2,4		430,057		430,015
HBOS Treasury Services PLC
1.10%, 04/22/05²		537,571		537,571
1.24%, 04/01/05²		344,046		344,014
K2 USA LLC
1.06%, 08/16/04^2,4		134,393		134,387
1.06%, 09/27/04^2,4		580,577		580,542
1.07%, 05/17/04²		268,786		268,785
1.46%, 01/12/05^2,4		268,786		268,767
Links Finance LLC
1.05%, 04/15/05^2,4		537,571		537,469
1.06%, 05/04/04²		268,786		268,786
1.06%, 06/28/04²		268,786		268,777
1.09%, 07/20/04²		215,029		215,019
1.19%, 04/25/05²		537,571		537,913
Nationwide Building Society
1.11%, 04/28/05^2,4		537,571		537,571
1.14%, 07/23/04^2,4		403,179		403,179
Northern Rock PLC
1.11%, 01/13/05^2,4		510,693		510,693
Permanent Financing PLC
1.05%, 03/10/05²		537,571		537,571
1.06%, 12/10/04²		268,786		268,786
Sigma Finance Inc.
1.05%, 07/01/04²		268,786		268,775
1.08%, 10/07/04²		537,571		537,525
1.09%, 07/20/04²		268,786		268,774
1.24%, 08/06/04²		134,393		134,389
Tango Finance Corp.
1.06%, 07/06/04^2,4		161,271		161,269
1.06%, 01/18/05^2,4		236,531		236,514
1.06%, 04/07/05^2,4		197,289		197,270
1.07%, 02/25/05^2,4		301,040		300,991
1.08%, 07/15/04^2,4		161,271		161,261
WhistleJacket Capital LLC
1.06%, 09/15/04^2,4		268,786		268,766
1.26%, 10/20/04^2,4		133,156		132,364
1.32%, 02/04/05^2,4		134,393		134,373
White Pine Finance LLC
1.05%, 07/06/04²		322,543		322,537
1.05%, 04/15/05^2,4		403,179		403,102
1.06%, 08/26/04^2,4		268,786		268,773
1.06%, 11/15/04^2,4		322,543		322,543

				16,547,922


62		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. UTILITIES SECTOR INDEX FUND

April 30, 2004


Security	Principal		Value
COMMERCIAL PAPER – 3.13%

Alpine Securitization Corp.
1.04%, 05/20/04²	$	268,786	$	268,654
Amsterdam Funding Corp.
1.03%, 05/05/04²		217,716		217,704
1.04%, 05/21/04²		322,543		322,375
Barton Capital Corp.
1.03%, 05/03/04²		134,522		134,522
1.03%, 05/06/04²		134,393		134,381
Blue Ridge Asset Funding Corp.
1.03%, 05/21/04²		268,786		268,647
Cantabric Finance LLC
1.09%, 07/22/04²		403,179		402,202
Corporate Asset Funding
1.05%, 05/21/04²		279,537		279,391
CRC Funding LLC
1.04%, 06/03/04²		537,571		537,090
1.10%, 07/07/04²		209,653		209,236
Delaware Funding Corp.
1.03%, 05/05/04²		403,625		403,602
1.03%, 05/21/04²		134,393		134,324
Edison Asset Securitization
1.03%, 05/06/04²		403,179		403,144
1.04%, 06/17/04²		537,571		536,873
1.05%, 06/22/04²		268,786		268,394
1.07%, 09/21/04²		268,786		267,659
Eureka Securitization Inc.
1.03%, 05/25/04²		107,514		107,447
Falcon Asset Securitization Corp.
1.03%, 05/05/04²		268,786		268,770
1.04%, 05/25/04²		403,179		402,924
1.04%, 05/26/04²		537,571		537,216
Ford Credit Auto Receivables
1.04%, 05/14/04²		134,393		134,350
Galaxy Funding Inc.
1.05%, 05/17/04²		268,786		268,676
1.07%, 07/20/04²		241,907		241,347
Gemini Securitization Corp.
1.03%, 05/24/04²		134,393		134,313
GIRO Funding US Corp.
1.05%, 05/19/04²		134,393		134,330
Grampian Funding LLC
1.26%, 10/22/04²		537,571		534,348
Jupiter Securitization Corp.
1.04%, 05/20/04²		403,179		402,981
1.04%, 05/24/04²		268,786		268,623
1.04%, 05/26/04²		368,516		368,272
1.04%, 05/27/04²		483,814		483,480
New Center Asset Trust
1.06%, 05/03/04²		671,964		671,964
Park Avenue Receivables Corp.
1.03%, 05/07/04²		268,786		268,755
Polonius Inc.
1.04%, 05/21/04²		310,985		310,823
Preferred Receivables Funding Corp.
1.04%, 05/20/04²		134,393		134,327
Scaldis Capital LLC
1.04%, 05/07/04²		268,786		268,755
1.04%, 05/20/04²		726,549		726,193
1.04%, 05/25/04²		268,786		268,615
1.05%, 06/30/04²		192,451		192,125
Sydney Capital Corp.
1.25%, 10/22/04²		178,904		177,836
Thames Asset Global Securitization No. 1 Inc.
1.04%, 05/20/04²		268,786		268,654
Thunder Bay Funding Inc.
1.03%, 05/03/04²		193,816		193,816
Windmill Funding Corp.
1.03%, 05/05/04²		403,179		403,155
1.03%, 05/06/04²		268,786		268,763
1.03%, 05/10/04²		537,571		537,464

				13,766,520
TIME DEPOSITS – 1.99%

Abbey National Treasury Services PLC
1.25%, 01/06/05²		537,571		537,571
1.33%, 02/10/05²		268,786		268,754
1.39%, 02/02/05²		268,786		268,755
1.39%, 04/08/05²		376,300		376,247
1.40%, 10/25/04²		537,571		537,533


SCHEDULES OF INVESTMENTS		63

Schedule of Investments (Continued)

iSHARES^® DOW JONES U.S. UTILITIES SECTOR INDEX FUND

April 30, 2004


Security	Principal		Value
Bank of New York
1.39%, 11/01/04²	$	537,571	$	537,545
Bank of Novia Scotia
1.13%, 10/06/04²		537,571		537,571
1.24%, 10/07/04²		403,179		403,161
1.42%, 10/29/04²		403,179		403,193
National City Bank (Cleveland, Ohio)
1.25%, 01/06/05²		537,571		537,590
Prudential Funding LLC
1.06%, 05/03/04²		806,357		806,357
Toronto-Dominion Bank
1.04%, 06/22/04²		134,393		134,393
1.22%, 03/23/05²		940,750		940,604
1.34%, 02/10/05²		215,029		215,004
1.41%, 11/01/04²		403,179		403,158
UBS Finance (Delaware)
1.10%, 09/08/04²		537,571		535,469
1.11%, 12/17/04²		806,357		800,689
1.14%, 09/29/04²		537,571		535,046

				8,778,640
U.S. GOVERNMENT AGENCY NOTES – 0.38%

Federal Home Loan Mortgage Corp.
1.15%, 05/12/04²		403,179		403,063
1.28%, 08/19/04²		215,029		214,203
1.63%, 04/15/05²		376,300		377,440
Federal National Mortgage Association
1.28%, 08/20/04²		698,843		696,132

				1,690,838
REPURCHASE AGREEMENTS – 0.26%

Merrill Lynch Government Securities Inc.
1.07%, 05/03/04²		1,155,779		1,155,779

				1,155,779


TOTAL SHORT-TERM INVESTMENTS (Cost: $65,686,007)			$	65,686,007


TOTAL INVESTMENTS IN SECURITIES – 114.73% (Cost: $479,955,641)				505,364,348

Other Assets, Less Liabilities – (14.73%)				(64,874,616	)


NET ASSETS – 100.00%			$	440,489,732

Non-income earning securities.

All or a portion of this security represents investments of securities lending collateral.

Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

⁴

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

See notes to financial statements.


64		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® DOW JONES SELECT DIVIDEND INDEX FUND

April 30, 2004


Security	Shares	Value
COMMON STOCKS – 99.83%

Bank of America Corp.	1,175,132	$	94,586,375
Altria Group Inc.	1,437,652		79,617,168
FPL Group Inc.	1,076,866		68,510,215
DTE Energy Co.	1,513,376		59,051,931
People’s Bank	1,366,488		57,679,458
PNC Financial Services Group	1,072,768		56,963,981
Eastman Chemical Co.	1,323,586		56,345,056
Comerica Inc.	1,077,821		55,647,898
General Motors Corp.	1,147,212		54,400,793
Nicor Inc.	1,576,644		53,590,130
Pinnacle West Capital Corp.	1,321,356		51,612,165
Unitrin Inc.	1,265,690		50,184,608
Universal Corp.	955,983		48,028,586
FirstEnergy Corp.	1,220,138		47,707,396
PPG Industries Inc.	796,075		47,215,208
Lincoln National Corp.	1,009,073		45,287,196
JP Morgan Chase & Co.	1,090,747		41,012,087
Whitney Holding Corp.	966,258		39,616,578
National City Corp.	1,097,027		38,033,926
Dow Chemical Co. (The)	956,907		37,979,639
Associated Bancorp	916,059		37,512,616
Black Hills Corp.	1,216,591		37,215,519
Genuine Parts Co.	1,028,900		36,834,620
KeyCorp	1,232,928		36,617,962
Provident Financial Group Inc.	874,949		34,455,492
Occidental Petroleum Corp.	729,203		34,418,382
Hudson United Bancorp	948,847		33,902,303
SBC Communications Inc.	1,289,108		32,098,789
PPL Corp.	748,654		32,079,824
Donnelley (R.R.) & Sons Co.	1,061,907		31,241,304
Lubrizol Corp.	977,456		31,083,101
Marathon Oil Corp.	920,801		30,902,082
Citizens Banking Corp.	1,001,652		30,680,601
Duquesne Light Holdings Inc.	1,631,492		30,623,105
Bristol-Myers Squibb Co.	1,188,126		29,821,963
Energy East Corp.	1,256,034		29,579,601
FirstMerit Corp.	1,147,092		27,025,487
BellSouth Corp.	1,043,037		26,920,785
Lyondell Chemical Co.	1,643,673		26,874,053
Provident Bankshares Corp.	944,155		26,596,846
NiSource Inc.	1,264,393		25,490,163
AmSouth Bancorp	1,151,679		25,359,972
Sonoco Products Co.	1,017,966		25,306,635
MeadWestvaco Corp.	907,311		23,726,183
Washington Federal Inc.	999,815		23,355,678
Sky Financial Group Inc.	946,569		22,622,999
Huntington Bancshares Inc.	909,586		19,465,140
Hibernia Corp. Class A	892,974		19,457,903
Colonial BancGroup Inc. (The)	936,605		16,137,704
RPM International Inc.	1,028,651		15,512,057

TOTAL COMMON STOCKS (Cost: $1,961,731,482)			1,935,989,263

SHORT-TERM INVESTMENTS – 0.09%

MONEY MARKET FUNDS – 0.09%

Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares¹	1,714,593		1,714,593

			1,714,593

TOTAL SHORT-TERM INVESTMENTS (Cost: $1,714,593)			1,714,593


TOTAL INVESTMENTS IN SECURITIES – 99.92% (Cost: $1,963,446,075)			1,937,703,856

Other Assets, Less Liabilities – 0.08%			1,473,128


NET ASSETS – 100.00%		$	1,939,176,984

Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		65

Schedule of Investments

iSHARES^® DOW JONES TRANSPORTATION AVERAGE INDEX FUND

April 30, 2004


Security	Shares	Value
COMMON STOCKS – 100.03%

United Parcel Service Inc. Class B	38,463	$	2,698,179
FedEx Corp.	36,407		2,618,027
Union Pacific Corp.	31,571		1,860,479
Expeditors International Washington Inc.	40,133		1,612,945
CNF Inc.	38,634		1,412,459
Ryder System Inc.	37,256		1,370,648
CSX Corp.	37,249		1,145,779
Burlington Northern Santa Fe Corp.	34,904		1,141,361
CH Robinson Worldwide Inc.	27,102		1,112,266
Norfolk Southern Corp.	46,211		1,100,746
Hunt (J.B.) Transport Services Inc.¹	34,374		1,088,281
USF Corp.	32,582		1,083,352
Yellow Roadway Corp.¹	31,812		1,083,199
Alexander & Baldwin Inc.	33,749		1,066,131
GATX Corp.	40,331		947,779
Southwest Airlines Co.	46,234		660,222
AMR Corp.¹	36,077		409,474
Continental Airlines Inc. Class B¹	37,094		395,422
Northwest Airlines Corp.¹	35,471		333,427
Delta Air Lines Inc.	35,391		220,132

TOTAL COMMON STOCKS (COST: $23,945,423)			23,360,308

SHORT-TERM INVESTMENTS – 0.08%

MONEY MARKET FUNDS – 0.08%

Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares²	19,611		19,611

			19,611

TOTAL SHORT-TERM INVESTMENTS (Cost: $19,611)			19,611

TOTAL INVESTMENTS IN SECURITIES – 100.11% (Cost: $23,965,034)		$	23,379,919

Other Assets, Less Liabilities – (0.11%)			(25,868	)

NET ASSETS – 100.00%		$	23,354,051

Non-income earning securities.

Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

See notes to financial statements.


66		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Assets and Liabilities

iSHARES^® TRUST

April 30, 2004


	iShares Dow Jones U.S.
	Total Market Index Fund			Energy Sector Index Fund			Healthcare Sector Index Fund			Technology Sector Index Fund
ASSETS

Investments, at cost:
Unaffiliated issuers	$	372,557,154		$	326,501,142		$	675,492,544		$	378,888,190

Affiliates of the investment advisor	$	10,232,506		$	8,390,911		$	18,107,704		$	9,474,811

Investments in securities, at value (including securities on loan^a) (Note 1):
Unaffiliated issuers	$	400,471,475		$	364,600,342		$	687,570,162		$	341,427,550
Affiliates of the investment advisor		10,232,506			8,390,911			18,107,704			9,474,811
Receivables:
Investment securities sold		447,361			—			—			352,717
Dividends and interest		404,838			99,963			421,349			15,711

Total Assets		411,556,180			373,091,216			706,099,215			351,270,789

LIABILITIES

Payables:
Investment securities purchased		419,613			—			—			—
Collateral for securities on loan (Note 5)		29,851,794			24,244,398			53,695,063			28,384,723
Advisory fees (Note 2)		127,820			323,262			606,771			349,962

Total Liabilities		30,399,227			24,567,660			54,301,834			28,734,685

NET ASSETS	$	381,156,953		$	348,523,556		$	651,797,381		$	322,536,104

Net assets consist of:

Paid-in capital	$	366,383,692		$	317,618,618		$	650,626,098		$	404,499,030
Undistributed net investment income		449,543			—			114,869			1,226
Accumulated net realized loss		(13,590,603	)		(7,194,262	)		(11,021,204	)		(44,503,512	)
Net unrealized appreciation (depreciation)		27,914,321			38,099,200			12,077,618			(37,460,640	)

NET ASSETS	$	381,156,953		$	348,523,556		$	651,797,381		$	322,536,104

Shares outstanding		7,250,000			6,550,000			11,050,000			7,250,000

Net asset value per share	$	52.57		$	53.21		$	58.99		$	44.49

Securities on loan with market values of $28,815,996, $23,518,638, $52,202,157 and $27,148,957, respectively. See Note 5.

See notes to financial statements.


FINANCIAL STATEMENTS		67

Statements of Assets and Liabilities (Continued)

iSHARES^® TRUST

April 30, 2004


	iShares Dow Jones U.S.						iShares Dow Jones
	Telecommunications Sector Index Fund			Utilities Sector Index Fund			Select Dividend Index Fund			Transportation Average Index Fund
ASSETS

Investments, at cost:
Unaffiliated issuers	$	245,527,375		$	458,010,356		$	1,961,731,482		$	23,945,423

Affiliates of the investment advisor	$	8,705,360		$	21,945,285		$	1,714,593		$	19,611

Investments in securities, at value (including securities on loan^a) (Note 1):
Unaffiliated issuers	$	231,569,805		$	483,419,063		$	1,935,989,263		$	23,360,308
Affiliates of the investment advisor		8,705,360			21,945,285			1,714,593			19,611
Receivables:
Investment securities sold		17,514,755			—			—			—
Dividends and interest		1,184,024			1,132,641			5,040,853			15
Capital shares sold		—			—			52,835			—

Total Assets		258,973,944			506,496,989			1,942,797,544			23,379,934

LIABILITIES

Payables:
Investment securities purchased		17,570,742			—			2,489,404			—
Collateral for securities on loan (Note 5)		25,425,952			65,504,046			—			—
Capital shares redeemed		—			—			—			1,932
Advisory fees (Note 2)		220,392			503,211			1,131,156			23,951

Total Liabilities		43,217,086			66,007,257			3,620,560			25,883

NET ASSETS	$	215,756,858		$	440,489,732		$	1,939,176,984		$	23,354,051

Net assets consist of:

Paid-in capital	$	256,830,288		$	440,527,874		$	1,966,309,788		$	24,083,653
Undistributed net investment income		1,053,830			842,879			445,026			—
Accumulated net realized loss		(28,169,690	)		(26,289,728	)		(1,835,611	)		(144,487	)
Net unrealized appreciation (depreciation)		(13,957,570	)		25,408,707			(25,742,219	)		(585,115	)

NET ASSETS	$	215,756,858		$	440,489,732		$	1,939,176,984		$	23,354,051

Shares outstanding		10,000,000			7,650,000			36,150,000			450,000

Net asset value per share	$	21.58		$	57.58		$	53.64		$	51.90

Securities on loan with market values of $24,424,450, $63,479,243, $- and $-, respectively. See Note 5.

See notes to financial statements.


68		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations

iSHARES^® TRUST

Year Ended April 30, 2004


	iShares Dow Jones U.S.
	Total Market Index Fund			Energy Sector Index Fund			Healthcare Sector Index Fund			Technology Sector Index Fund
NET INVESTMENT INCOME

Dividends^a	$	4,905,391		$	3,888,447		$	6,206,448		$	1,247,360
Interest^b		2,275			1,698			2,358			793
Securities lending income^b		20,901			12,202			37,127			26,846

Total investment income		4,928,567			3,902,347			6,245,933			1,274,999

EXPENSES (Note 2)

Advisory fees		583,220			1,157,936			2,862,501			2,027,928

Total expenses		583,220			1,157,936			2,862,501			2,027,928

Net investment income (loss)		4,345,347			2,744,411			3,383,432			(752,929	)

NET REALIZED AND UNREALIZED GAIN (LOSS)

Net realized gain (loss) from:
Investments		(4,843,350	)		(637,683	)		(4,320,012	)		(18,805,199	)
In-kind redemptions		—			—			12,364,725			27,416,154

Net realized gain (loss)		(4,843,350	)		(637,683	)		8,044,713			8,610,955

Net change in unrealized appreciation (depreciation) on investments		54,403,071			57,339,569			58,562,480			59,914,428

Net realized and unrealized gain		49,559,721			56,701,886			66,607,193			68,525,383

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	53,905,068		$	59,446,297		$	69,990,625		$	67,772,454

Net of foreign withholding tax of $723, $-, $3,745 and $-, respectively.

Includes income earned from affiliates of the Funds’ investment advisor. See Note 2.

See notes to financial statements.


FINANCIAL STATEMENTS		69

Statements of Operations (Continued)

iSHARES^® TRUST

Year Ended April 30, 2004


	iShares Dow Jones U.S.						iShares Dow Jones
	Telecommunications Sector Index Fund			Utilities Sector Index Fund			Select Dividend Index Fund^b			Transportation Average Index Fund^c
NET INVESTMENT INCOME

Dividends^a	$	4,555,521		$	17,794,796		$	17,658,449		$	118,887
Interest^d		1,479			4,426			3,134			83
Securities lending income^d		13,641			70,151			10,665			—

Total investment income		4,570,641			17,869,373			17,672,248			118,970

EXPENSES (Note 2)

Advisory fees		954,203			2,675,439			1,843,588			69,614

Total expenses		954,203			2,675,439			1,843,588			69,614

Net investment income		3,616,438			15,193,934			15,828,660			49,356

NET REALIZED AND UNREALIZED GAIN (LOSS)

Net realized gain (loss) from:
Investments		(1,460,223	)		(11,139,599	)		(1,880,888	)		(146,194	)
In-kind redemptions		12,363,090			26,158,864			3,612,816			1,327,673

Net realized gain		10,902,867			15,019,265			1,731,928			1,181,479

Net change in unrealized appreciation (depreciation) on investments		8,420,637			48,099,210			(25,742,219	)		(585,115	)

Net realized and unrealized gain (loss)		19,323,504			63,118,475			(24,010,291	)		596,364

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	22,939,942		$	78,312,409		$	(8,181,631	)	$	645,720

Net of foreign withholding tax of $30,678, $-, $- and $-, respectively.

For the period November 3, 2003 (commencement of operations) through April 30, 2004.

For the period October 6, 2003 (commencement of operations) through April 30, 2004.

Includes income earned from affiliates of the Funds’ investment advisor. See Note 2.

See notes to financial statements.


70		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets

iSHARES^® TRUST


	iShares Dow Jones U.S. Total Market Index Fund						iShares Dow Jones U.S. Energy Sector Index Fund						iShares Dow Jones U.S. Healthcare Sector Index Fund
	For the year ended April 30, 2004			For the year ended April 30, 2003			For the year ended April 30, 2004			For the year ended April 30, 2003			For the year ended April 30, 2004			For the year ended April 30, 2003
INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:

Net investment income	$	4,345,347		$	2,033,117		$	2,744,411		$	1,730,881		$	3,383,432		$	2,446,357
Net realized gain (loss)		(4,843,350	)		(4,764,162	)		(637,683	)		(4,347,194	)		8,044,713			49,388
Net change in unrealized appreciation (depreciation)		54,403,071			(11,117,659	)		57,339,569			(14,935,932	)		58,562,480			(23,178,321	)

Net increase (decrease) in net assets resulting from operations		53,905,068			(13,848,704	)		59,446,297			(17,552,245	)		69,990,625			(20,682,576	)

DISTRIBUTIONS TO SHAREHOLDERS:

From net investment income		(4,143,218	)		(1,865,031	)		(2,776,640	)		(1,698,652	)		(3,327,668	)		(2,387,252	)
Return of capital		—			—			(83,630	)		—			—			—

Total distributions to shareholders		(4,143,218	)		(1,865,031	)		(2,860,270	)		(1,698,652	)		(3,327,668	)		(2,387,252	)

CAPITAL SHARE TRANSACTIONS:

Proceeds from shares sold		155,798,668			70,170,247			180,253,831			47,945,821			264,504,795			215,725,164
Cost of shares redeemed		—			—			—			(21,808,012	)		(57,859,030	)		(50,399,249	)

Net increase in net assets from capital share transactions		155,798,668			70,170,247			180,253,831			26,137,809			206,645,765			165,325,915

INCREASE IN NET ASSETS		205,560,518			54,456,512			236,839,858			6,886,912			273,308,722			142,256,087

NET ASSETS:

Beginning of year		175,596,435			121,139,923			111,683,698			104,796,786			378,488,659			236,232,572

End of year	$	381,156,953		$	175,596,435		$	348,523,556		$	111,683,698		$	651,797,381		$	378,488,659

Undistributed net investment income included in net assets at end of year	$	449,543		$	291,194		$	—		$	32,229		$	114,869		$	59,105

SHARES ISSUED AND REDEEMED:

Shares sold		3,150,000			1,700,000			3,700,000			1,200,000			4,650,000			4,350,000
Shares redeemed		—			—			—			(500,000	)		(1,050,000	)		(1,050,000	)

Net increase in shares outstanding		3,150,000			1,700,000			3,700,000			700,000			3,600,000			3,300,000

See notes to financial statements.


FINANCIAL STATEMENTS		71

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST


	iShares Dow Jones U.S. Technology Sector Index Fund						iShares Dow Jones U.S. Telecommunications Sector Index Fund						iShares Dow Jones U.S. Utilities Index Fund
	For the year ended April 30, 2004			For the year ended April 30, 2003			For the year ended April 30, 2004			For the year ended April 30, 2003			For the year ended April 30, 2004			For the year ended April 30, 2003
INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:

Net investment income (loss)	$	(752,929	)	$	(316,297	)	$	3,616,438		$	1,790,331		$	15,193,934		$	8,839,492
Net realized gain (loss)		8,610,955			(14,351,281	)		10,902,867			(14,273,766	)		15,019,265			(11,474,209	)
Net change in unrealized appreciation (depreciation)		59,914,428			(7,135,685	)		8,420,637			(130,475	)		48,099,210			(21,418,153	)

Net increase (decrease) in net assets resulting from operations		67,772,454			(21,803,263	)		22,939,942			(12,613,910	)		78,312,409			(24,052,870	)

Undistributed net investment income included in the price of capital shares issued or redeemed		—			—			—			—			324,500			341,000

DISTRIBUTIONS TO SHAREHOLDERS:

From net investment income		—			—			(3,301,807	)		(1,239,523	)		(15,072,614	)		(8,496,398	)

Total distributions to shareholders		—			—			(3,301,807	)		(1,239,523	)		(15,072,614	)		(8,496,398	)

CAPITAL SHARE TRANSACTIONS:

Proceeds from shares sold		108,361,174			138,437,600			165,926,674			178,652,909			171,615,651			285,349,753
Cost of shares redeemed		(85,098,863	)		(26,205,874	)		(96,052,816	)		(90,017,741	)		(123,745,313	)		(104,904,252	)

Net increase in net assets from capital share transactions		23,262,311			112,231,726			69,873,858			88,635,168			47,872,838			180,445,501

INCREASE IN NET ASSETS		91,034,765			90,428,463			89,511,993			74,781,735			111,434,633			148,237,233

NET ASSETS:

Beginning of year		231,501,339			141,072,876			126,244,865			51,463,130			329,055,099			180,817,866

End of year	$	322,536,104		$	231,501,339		$	215,756,858		$	126,244,865		$	440,489,732		$	329,055,099

Undistributed net investment income included in net assets at end of year	$	1,226		$	—		$	1,053,830		$	739,199		$	842,879		$	724,149

SHARES ISSUED AND REDEEMED:

Shares sold		2,550,000			4,100,000			7,700,000			9,300,000			3,200,000			5,950,000
Shares redeemed		(1,850,000	)		(800,000	)		(4,550,000	)		(4,750,000	)		(2,250,000	)		(2,000,000	)

Net increase in shares outstanding		700,000			3,300,000			3,150,000			4,550,000			950,000			3,950,000

See notes to financial statements.


72		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST


	iShares Dow Jones Select Dividend Index Fund			iShares Dow Jones Transportation Average Index Fund
	For the period November 3, 2003¹ to April 30, 2004			For the period October 6, 2003¹ to April 30, 2004
INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:

Net investment income	$	15,828,660		$	49,356
Net realized gain		1,731,928			1,181,479
Net change in unrealized appreciation (depreciation)		(25,742,219	)		(585,115	)

Net increase (decrease) in net assets resulting from operations		(8,181,631	)		645,720

Undistributed net investment income included in the price of capital shares issued or redeemed		6,399,500			—

DISTRIBUTIONS TO SHAREHOLDERS:

From net investment income		(15,383,634	)		(49,356	)
Return of capital		—			(15,848	)

Total distributions to shareholders		(15,383,634	)		(65,204	)

CAPITAL SHARE TRANSACTIONS:

Proceeds from shares sold		1,958,966,883			46,511,904
Cost of shares redeemed		(2,624,134	)		(23,738,369	)

Net increase in net assets from capital share transactions		1,956,342,749			22,773,535

INCREASE IN NET ASSETS		1,939,176,984			23,354,051

NET ASSETS:

Beginning of period		—			—

End of period	$	1,939,176,984		$	23,354,051

Undistributed net investment income included in net assets at end of period	$	445,026		$	—

SHARES ISSUED AND REDEEMED:

Shares sold		36,200,000			900,000
Shares redeemed		(50,000	)		(450,000	)

Net increase in shares outstanding		36,150,000			450,000

Commencement of operations.

See notes to financial statements.


FINANCIAL STATEMENTS		73

Financial Highlights

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares Dow Jones U.S. Total Market Index Fund
	Year ended Apr. 30, 2004			Year ended Apr. 30, 2003			Year ended Apr. 30, 2002			Period from Jun. 12, 2000¹ to Apr. 30, 2001
Net asset value, beginning of period	$	42.83		$	50.47		$	57.93		$	67.15

Income from investment operations:

Net investment income		0.70			0.63			0.57			0.42
Net realized and unrealized gain (loss)		9.74			(7.66	)		(7.46	)		(9.27	)

Total from investment operations		10.44			(7.03	)		(6.89	)		(8.85	)

Less distributions from:

Net investment income		(0.70	)		(0.61	)		(0.57	)		(0.36	)
Net realized gain		—			—			—			(0.01	)

Total distributions		(0.70	)		(0.61	)		(0.57	)		(0.37	)

Net asset value, end of period	$	52.57		$	42.83		$	50.47		$	57.93

Total return		24.50	%		(13.89	)%		(11.93	)%		(13.20	)%²

Ratios/Supplemental data:

Net assets, end of period (000s)	$	381,157		$	175,596		$	121,140		$	66,625
Ratio of expenses to average net assets³		0.20	%		0.20	%		0.20	%		0.20	%
Ratio of net investment income to average net assets³		1.49	%		1.57	%		1.15	%		0.98	%
Portfolio turnover rate⁴		5	%		14	%		5	%		5	%

Commencement of operations.

Not annualized.

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.


74		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares Dow Jones U.S. Energy Sector Index Fund
	Year ended Apr. 30, 2004			Year ended Apr. 30, 2003			Year ended Apr. 30, 2002			Period from Jun. 12, 2000¹ to Apr. 30, 2001
Net asset value, beginning of period	$	39.19		$	48.74		$	57.01		$	50.79

Income from investment operations:

Net investment income		0.70			0.71			0.63			0.40
Net realized and unrealized gain (loss)		14.04			(9.56	)		(8.26	)		6.24

Total from investment operations		14.74			(8.85	)		(7.63	)		6.64

Less distributions from:

Net investment income		(0.70	)		(0.70	)		(0.64	)		(0.42	)
Return of capital		(0.02	)		—			—			—

Total distributions		(0.72	)		(0.70	)		(0.64	)		(0.42	)

Net asset value, end of period	$	53.21		$	39.19		$	48.74		$	57.01

Total return		37.90	%		(18.22	)%		(13.34	)%		13.13	%²

Ratios/Supplemental data:

Net assets, end of period (000s)	$	348,524		$	111,684		$	104,797		$	54,156
Ratio of expenses to average net assets³		0.60	%		0.60	%		0.60	%		0.60	%
Ratio of net investment income to average net assets³		1.42	%		1.79	%		1.32	%		0.94	%
Portfolio turnover rate⁴		2	%		9	%		18	%		20	%

Commencement of operations.

Not annualized.

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 Dow Jones U.S. Healthcare Sector Index Fund
	Year ended Apr. 30, 2004			Year ended Apr. 30, 2003			Year ended Apr. 30, 2002			Period from Jun. 12, 2000¹ to Apr. 30, 2001
Net asset value, beginning of period	$	50.80		$	56.92		$	61.87		$	59.53

Income from investment operations:

Net investment income		0.40			0.39			0.26			0.13
Net realized and unrealized gain (loss)		8.19			(6.13	)		(4.94	)		2.44

Total from investment operations		8.59			(5.74	)		(4.68	)		2.57

Less distributions from:

Net investment income		(0.40	)		(0.38	)		(0.27	)		(0.14	)
Net realized gain		—			—			—			(0.09	)

Total distributions		(0.40	)		(0.38	)		(0.27	)		(0.23	)

Net asset value, end of period	$	58.99		$	50.80		$	56.92		$	61.87

Total return		16.96	%		(10.06	)%		(7.60	)%		4.29	%²

Ratios/Supplemental data:

Net assets, end of period (000s)	$	651,797		$	378,489		$	236,233		$	108,269
Ratio of expenses to average net assets³		0.60	%		0.60	%		0.60	%		0.60	%
Ratio of net investment income to average net assets³		0.71	%		0.80	%		0.45	%		0.29	%
Portfolio turnover rate⁴		4	%		9	%		3	%		5	%

Commencement of operations.

Not annualized.

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		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares Dow Jones U.S. Technology Sector Index Fund
	Year ended Apr. 30, 2004			Year ended Apr. 30, 2003			Year ended Apr. 30, 2002			Period From May 15, 2000¹ to Apr. 30, 2001
Net asset value, beginning of period	$	35.34		$	43.41		$	63.42		$	116.57

Income from investment operations:

Net investment loss		(0.10	)		(0.05	)		(0.16	)		(0.29	)
Net realized and unrealized gain (loss)		9.25			(8.02	)		(19.85	)		(52.86	)

Total from investment operations		9.15			(8.07	)		(20.01	)		(53.15	)

Net asset value, end of period	$	44.49		$	35.34		$	43.41		$	63.42

Total return		25.89	%		(18.59	)%		(31.55	)%		(45.60	)%²

Ratios/Supplemental data:

Net assets, end of period (000s)	$	322,536		$	231,501		$	141,073		$	110,990
Ratio of expenses to average net assets³		0.60	%		0.60	%		0.60	%		0.60	%
Ratio of net investment loss to average net assets³		(0.22	)%		(0.22	)%		(0.41	)%		(0.47	)%
Portfolio turnover rate⁴		5	%		15	%		8	%		11	%

Commencement of operations.

Not annualized.

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 Dow Jones U.S. Telecommunications Sector Index Fund
	Year ended Apr. 30, 2004			Year ended Apr. 30, 2003			Year ended Apr. 30, 2002			Period from May 22, 2000¹ to Apr. 30, 2001
Net asset value, beginning of period	$	18.43		$	22.38		$	38.35		$	56.81

Income from investment operations:

Net investment income		0.45			0.34			0.29			0.35
Net realized and unrealized gain (loss)		3.15			(3.98	)		(15.98	)		(17.95	)

Total from investment operations		3.60			(3.64	)		(15.69	)		(17.60	)

Less distributions from:

Net investment income		(0.45	)		(0.31	)		(0.28	)		(0.27	)
Net realized gain		—			—			—			(0.59	)

Total distributions		(0.45	)		(0.31	)		(0.28	)		(0.86	)

Net asset value, end of period	$	21.58		$	18.43		$	22.38		$	38.35

Total return		19.71	%		(16.22	)%		(41.12	)%		(31.06	)%²

Ratios/Supplemental data:

Net assets, end of period (000s)	$	215,757		$	126,245		$	51,463		$	55,603
Ratio of expenses to average net assets³		0.60	%		0.60	%		0.60	%		0.60	%
Ratio of net investment income to average net assets³		2.27	%		2.27	%		1.05	%		0.80	%
Portfolio turnover rate⁴		22	%		23	%		43	%		43	%

Commencement of operations.

Not annualized.

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		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares Dow Jones U.S. Utilities Sector Index Fund
	Year ended Apr. 30, 2004			Year ended Apr. 30, 2003			Year ended Apr. 30, 2002			Period from Jun. 12, 2000¹ to Apr. 30, 2001
Net asset value, beginning of period	$	49.11		$	65.75		$	85.95		$	69.81

Income from investment operations:

Net investment income		1.87			2.04			1.89			1.82
Net realized and unrealized gain (loss)		8.47			(16.61	)		(20.25	)		16.19

Total from investment operations		10.34			(14.57	)		(18.36	)		18.01

Less distributions from:

Net investment income		(1.87	)		(2.07	)		(1.84	)		(1.73	)
Net realized gain		—			—			—			(0.14	)

Total distributions		(1.87	)		(2.07	)		(1.84	)		(1.87	)

Net asset value, end of period	$	57.58		$	49.11		$	65.75		$	85.95

Total return		21.28	%		(22.16	)%		(21.38	)%		25.90	%²

Ratios/Supplemental data:

Net assets, end of period (000s)	$	440,490		$	329,055		$	180,818		$	42,976
Ratio of expenses to average net assets³		0.60	%		0.60	%		0.60	%		0.60	%
Ratio of net investment income to average net assets³		3.41	%		4.15	%		2.89	%		2.59	%
Portfolio turnover rate⁴		7	%		15	%		8	%		11	%

Commencement of operations.

Not annualized.

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 Dow Jones Select Dividend Index Fund
	Period from Nov. 3, 2003¹ to Apr. 30, 2004
Net asset value, beginning of period	$	50.51

Income from investment operations:

Net investment income		0.76
Net realized and unrealized gain		3.12

Total from investment operations		3.88

Less distributions from:
Net investment income		(0.75	)

Total distributions		(0.75	)

Net asset value, end of period	$	53.64

Total return		7.70	%²

Ratios/Supplemental data:

Net assets, end of period (000s)	$	1,939,177
Ratio of expenses to average net assets³		0.40	%
Ratio of net investment income to average net assets³		3.43	%
Portfolio turnover rate⁴		2	%

Commencement of operations.

Not annualized.

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		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout the period)


	iShares Dow Jones Transportation Average Index Fund
	Period from Oct. 6, 2003¹ to Apr. 30, 2004
Net asset value, beginning of period	$	50.22

Income from investment operations:

Net investment income		0.39
Net realized and unrealized gain		1.72

Total from investment operations		2.11

Less distributions from:

Net investment income		(0.32	)
Return of capital		(0.11	)

Total distributions		(0.43	)

Net asset value, end of period	$	51.90

Total return		4.19	%²

Ratios/Supplemental data:

Net assets, end of period (000s)	$	23,354
Ratio of expenses to average net assets³		0.60	%
Ratio of net investment income to average net assets³		0.43	%
Portfolio turnover rate⁴		4	%

Commencement of operations.

Not annualized.

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

Notes to the Financial Statements

iSHARES^® TRUST

1. SIGNIFICANT ACCOUNTING POLICIES

These financial statements relate only to the iShares Dow Jones U.S. Total Market, iShares Dow Jones U.S. Energy Sector, iShares Dow Jones U.S. Healthcare Sector, iShares Dow Jones U.S. Technology Sector, iShares Dow Jones U.S. Telecommunications Sector, iShares Dow Jones U.S. Utilities Sector, iShares Dow Jones Select Dividend and the iShares Dow Jones Transportation Average 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 Dow Jones U.S. Total Market 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 affecting these companies.

Under the Trust’s organizational documents, the Funds’ 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.

SECURITY VALUATION

SECURITY TRANSACTIONS AND INCOME RECOGNITION


82		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Continued)

iSHARES^® TRUST

EQUALIZATION

The iShares Dow Jones U.S. Utilities Sector Index Fund and the iShares Dow Jones Select Dividend Index Fund use the accounting practice of equalization. This accounting method is used to keep the continuing shareholders’ per share equity in undistributed net investment income from being affected by the continuous sales and redemptions of capital stock. Equalization is calculated on a per share basis whereby a portion of the proceeds from sales and costs of repurchases of capital stock is applied to undistributed net investment income. The amount of equalization is disclosed in the Statements of Changes in Net Assets as undistributed net investment income included in the price of capital shares issued or redeemed.

DISTRIBUTIONS TO SHAREHOLDERS

At April 30, 2004, the tax year-end of the Funds, the components of distributable earnings (accumulated losses) on a tax basis were as follows:


iShares Index Fund	Undistributed Ordinary Income		Unrealized Appreciation (Depreciation)			Capital and Other Losses			Total Distributable Earnings (Accumulated Losses)
Dow Jones U.S. Total Market	$	399,217	$	20,343,168		$	(5,969,124	)	$	14,773,261
Dow Jones U.S. Energy Sector		—		36,197,210			(5,292,272	)		30,904,938
Dow Jones U.S. Healthcare Sector		114,869		3,759,070			(2,702,656	)		1,171,283
Dow Jones U.S. Technology Sector		—		(65,038,047	)		(16,924,879	)		(81,962,926	)
Dow Jones U.S. Telecommunications Sector		1,053,830		(18,329,650	)		(23,797,610	)		(41,073,430	)
Dow Jones U.S. Utilities Sector		811,509		14,501,951			(15,351,602	)		(38,142	)
Dow Jones Select Dividend		445,026		(26,826,677	)		(751,153	)		(27,132,804	)
Dow Jones Transportation Average		—		(603,835	)		(125,767	)		(729,602	)

FEDERAL INCOME TAXES


NOTES TO THE FINIANCIAL STATEMENTS		83

Notes to the Financial Statements (Continued)

iSHARES^® TRUST


iShares Index Fund	Deferred Net Realized Capital Losses
Dow Jones U.S. Total Market	$	513,631
Dow Jones U.S. Energy Sector		6,590
Dow Jones U.S. Technology Sector		557,936
Dow Jones U.S. Utilities Sector		1,399,550
Dow Jones Select Dividend		751,153
Dow Jones Transportation Average		125,767

The Funds had tax basis net capital loss carryforwards at April 30, 2004, the tax year-end of the Funds, as follows:


iShares Index Fund	Expiring 2009		Expiring 2010		Expiring 2011		Expiring 2012		Total
Dow Jones U.S. Total Market	$	—	$	2,220,191	$	2,507,100	$	728,202	$	5,455,493
Dow Jones U.S. Energy Sector		369		643,271		4,517,083		124,959		5,285,682
Dow Jones U.S. Healthcare Sector		—		154,330		1,118,085		1,430,241		2,702,656
Dow Jones U.S. Technology Sector		—		3,803,426		10,610,555		1,952,962		16,366,943
Dow Jones U.S. Telecommunications Sector		—		10,297,961		12,362,540		1,137,109		23,797,610
Dow Jones U.S. Utilities Sector		—		165,391		5,246,921		8,539,740		13,952,052

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 year ended April 30, 2004, certain Funds realized net capital gains or losses resulting from in-kind redemptions of large blocks of 50,000 or more shares 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 year ended April 30, 2004 are disclosed in the Funds’ Statements of Operations.

REPURCHASE AGREEMENTS


84		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Continued)

iSHARES^® TRUST

2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES

For its investment advisory services to each Fund, BGFA is entitled to an annual advisory fee based on the average daily net assets of each Fund as follows:


iShares Index Fund	Advisory Fee
Dow Jones U.S. Total Market	0.20	%
Dow Jones U.S. Energy Sector	0.60
Dow Jones U.S. Healthcare Sector	0.60
Dow Jones U.S. Technology Sector	0.60
Dow Jones U.S. Telecommunications Sector	0.60
Dow Jones U.S. Utilities Sector	0.60
Dow Jones Select Dividend	0.40
Dow Jones Transportation Average	0.60


iShares Index Fund	Securities Lending Agent Fees
Dow Jones U.S. Total Market	$	21,061
Dow Jones U.S. Energy Sector		12,341
Dow Jones U.S. Healthcare Sector		37,429
Dow Jones U.S. Technology Sector		26,962
Dow Jones U.S. Telecommunications Sector		13,781
Dow Jones U.S. Utilities Sector		70,047
Dow Jones Select Dividend		10,666

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 investment transactions with such Fund during the year ended April 30, 2004.


NOTES TO THE FINIANCIAL STATEMENTS		85

Notes to the Financial Statements (Continued)

iSHARES^® TRUST

Transactions in shares of issuers affiliated with BGFA for the year ended April 30, 2004, including interest income, were as follows:


iShares Index Fund and Name of Issuer	Number of Shares Held Beginning of Year (in 000s)	Gross Additions (in 000s)	Gross Reductions (in 000s)	Number of Shares Held End of Year (in 000s)	Value at End of Year		Interest Income
Dow Jones U.S. Total Market
IMMF	180	47,635	47,501	314	$	314,427	$	2,275

Dow Jones U.S. Energy Sector
IMMF	113	34,085	33,862	336		335,856		1,698

Dow Jones U.S. Healthcare Sector
IMMF	284	50,979	50,995	268		267,843		2,358

iShares Dow Jones U.S. Technology Sector
IMMF	43	16,488	16,487	44		44,158		793

Dow Jones U.S. Telecommunications Sector
IMMF	102	32,752	32,596	258		257,740		1,479

Dow Jones U.S. Utilities Sector
IMMF	290	102,787	102,895	182		181,961		4,426

Dow Jones Select Dividend
IMMF	—	53,888	52,173	1,715		1,714,593		3,134

Dow Jones Transportation Average
IMMF	—	1,453	1,433	20		19,611		83


86		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Continued)

iSHARES^® TRUST

As of April 30, 2004, certain trustees and officers of the Trust are also officers of BGI.

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended April 30, 2004, were as follows:


iShares Index Fund	Purchases		Sales
Dow Jones U.S. Total Market	$	13,578,729	$	13,637,154
Dow Jones U.S. Energy Sector		3,933,316		3,795,808
Dow Jones U.S. Healthcare Sector		18,655,796		18,331,653
Dow Jones U.S. Technology Sector		16,026,422		16,914,925
Dow Jones U.S. Telecommunications Sector		35,647,207		36,232,224
Dow Jones U.S. Utilities Sector		29,445,666		29,607,325
Dow Jones Select Dividend		23,242,774		32,120,258
Dow Jones Transportation Average		779,708		762,962

In-kind transactions (see Note 4) for the year ended April 30, 2004, were as follows:


iShares Index Fund	In-kind Purchases		In-kind Sales
Dow Jones U.S. Total Market	$	155,618,559	$	—
Dow Jones U.S. Energy Sector		179,970,173		—
Dow Jones U.S. Healthcare Sector		264,392,509		57,820,844
Dow Jones U.S. Technology Sector		108,382,725		85,093,119
Dow Jones U.S. Telecommunications Sector		165,440,637		95,852,798
Dow Jones U.S. Utilities Sector		171,815,178		123,871,429
Dow Jones Select Dividend		2,026,727,991		57,850,953
Dow Jones Transportation Average		47,253,225		24,506,027


NOTES TO THE FINANCIAL STATEMENTS		87

Notes to the Financial Statements (Continued)

iSHARES^® TRUST

At April 30, 2004, the aggregate unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:


iShares Index Fund	Tax Cost		Unrealized Appreciation		Unrealized Depreciation			Net Unrealized Appreciation (Depreciation)
Dow Jones U.S. Total Market	$	390,360,813	$	36,327,251	$	(15,984,083	)	$	20,343,168
Dow Jones U.S. Energy Sector		336,794,043		38,488,708		(2,291,498	)		36,197,210
Dow Jones U.S. Healthcare Sector		701,918,796		51,036,548		(47,277,478	)		3,759,070
Dow Jones U.S. Technology Sector		415,940,408		—		(65,038,047	)		(65,038,047	)
Dow Jones U.S. Telecommunications Sector		258,604,815		1,621,442		(19,951,092	)		(18,329,650	)
Dow Jones U.S. Utilities Sector		490,862,397		26,118,283		(11,616,332	)		14,501,951
Dow Jones Select Dividend		1,964,530,533		23,488,594		(50,315,271	)		(26,826,677	)
Dow Jones Transportation Average		23,983,754		678,539		(1,282,374	)		(603,835	)

4. CAPITAL SHARE TRANSACTIONS

5. LOANS OF PORTFOLIO SECURITIES

As of April 30, 2004, certain Funds had loaned securities which were collateralized by cash. The cash collateral received was invested in a joint account with other funds managed by BGFA, which invests in securities with remaining maturities of 397 days or less, repurchase agreements and money market mutual funds including money market funds managed by BGFA. Repurchase agreements held in the joint account are fully collateralized by U.S. Government securities. 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 April 30, 2004 and the value of the related collateral are disclosed in the Statements of Assets and Liabilities. Securities lending income is presented net of broker rebates and fees paid to BGI.


88		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees

of iShares Trust:

In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the funds comprising the iShares Dow Jones Index Funds (the “Funds”), as listed on the table of contents, at April 30, 2004, the results of each of their operations for the period then ended, and the changes in each of their net assets and financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards of the Public Company Accounting Oversight Board (United States), which require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at April 30, 2004 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

June 21, 2004


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		89

Tax Information (Unaudited)

iSHARES^® TRUST

For corporate shareholders, a portion of the income dividends paid by the Funds during the year ended April 30, 2004 qualified for the dividends-received deduction, as follows:


iShares Index Fund	Dividends- Received Deduction
Dow Jones U.S. Total Market	100.00	%
Dow Jones U.S. Energy Sector	100.00
Dow Jones U.S. Healthcare Sector	100.00
Dow Jones U.S. Technology Sector	—
Dow Jones U.S. Telecommunications Sector	100.00
Dow Jones U.S. Utilities Sector	100.00
Dow Jones Select Dividend	100.00
Dow Jones Transportation Average	100.00


iShares Index Fund	Amount
Dow Jones U.S. Total Market	$	4,269,701
Dow Jones U.S. Energy Sector		2,776,640
Dow Jones U.S. Healthcare Sector		3,383,432
Dow Jones U.S. Technology Sector		—
Dow Jones U.S. Telecommunications Sector		3,616,438
Dow Jones U.S. Utilities Sector		15,000,415
Dow Jones Select Dividend		15,828,660
Dow Jones Transportation Average		49,356


90		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited)

iSHARES^® TRUST

iShares Dow Jones U.S. Total Market Index Fund

Period Covered: July 1, 2000 through March 31, 2004


Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 0.5% and Less than 1.0%	12	1.28	%
Between 0.5% and – 0.5%	906	96.68
Less than – 0.5% and Greater than – 1.0%	15	1.61
Less than – 1.0%	4	0.43

	937	100.00	%

iShares Dow Jones U.S. Energy Sector Index Fund

Period Covered: July 1, 2000 through March 31, 2004


Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 0.5% and Less than 1.0%	10	1.07	%
Between 0.5% and – 0.5%	917	97.86
Less than – 0.5% and Greater than – 1.0%	10	1.07

	937	100.00	%


SUPPLEMENTAL INFORMATION		91

Supplemental Information (Unaudited) (Continued)

iSHARES^® TRUST

iShares Dow Jones U.S. Healthcare Sector Index Fund

Period Covered: July 1, 2000 through March 31, 2004


Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 0.5%	9	0.96	%
Between 0.5% and – 0.5%	916	97.76
Less than – 0.5% and Greater than – 1.0%	6	0.64
Less than – 1.0%	6	0.64

	937	100.00	%

iShares Dow Jones U.S. Technology Sector Index Fund

Period Covered: July 1, 2000 through March 31, 2004


Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 1.0%	6	0.64	%
Greater than 0.5% and Less than 1.0%	37	3.95
Between 0.5% and – 0.5%	849	90.62
Less than – 0.5% and Greater than – 1.0%	27	2.87
Less than – 1.0% and Greater than – 1.5%	8	0.85
Less than – 1.5% and Greater than – 2.0%	4	0.43
Less than – 2.0%	6	0.64

	937	100.00	%

iShares Dow Jones U.S. Telecommunications Sector Index Fund

Period Covered: July 1, 2000 through March 31, 2004


Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 1.0%	1	0.11	%
Greater than 0.5% and Less than 1.0%	49	5.23
Between 0.5% and – 0.5%	850	90.71
Less than – 0.5% and Greater than – 1.0%	27	2.88
Less than – 1.0% and Greater than – 1.5%	10	1.07

	937	100.00	%


92		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited) (Continued)

iSHARES^® TRUST

iShares Dow Jones U.S. Utilities Sector Index Fund

Period Covered: July 1, 2000 through March 31, 2004


Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 0.5% and Less than 1.0%	15	1.60	%
Between 0.5% and – 0.5%	913	97.44
Less than – 0.5%	9	0.96

	937	100.00	%

iShares Dow Jones Select Dividend Index Fund

Period Covered: January 1, 2004 through March 31, 2004


Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 0.5% and Less than 1.0%	3	4.84	%
Between 0.5% and – 0.5%	59	95.16

	62	100.00	%

iShares Dow Jones Transportation Average Index Fund

Period Covered: January 1, 2004 through March 31, 2004


Premium/Discount Range	Number of Days	Percentage of Total Days
Between 0.5% and – 0.5%	62	100.00	%

	62	100.00	%


SUPPLEMENTAL INFORMATION		93

Trustee Information (Unaudited)

iSHARES^® TRUST

Interested Trustees


Name and Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
*Lee T. Kranefuss (42)	Trustee, Chairman, and President (since June 18, (2003)	Chief Executive Officer of Intermediary Investor and Exchange Traded Products Business of BGI (since 2003); Chief Executive Officer of the individual Investor Business of BGI (1997-2003).	Director (since June 18, 2003) of iShares, Inc.; Board of Trustees for Barclays Global Investors Funds and Master Investment Portfolio (since 2001).

*Nathan Most (90)	Trustee (since December 16, 1999)	Consultant to BGI (1998-2002), American Stock Exchange (1996-2000) and the Hong Kong Stock Exchange (1998 to present); Consultant to the Amsterdam Stock Exchange (1997-1998); Consultant to the Pacific Stock Exchange (1997-1998).	Director (since 1996) and President(1996-2002) of iShares, Inc.

*John E. Martinez (42)	Trustee (since December 5, 2003)	Co-CEO of Global Index and Markets Group of BGI (2001-2003); Chairman of Barclays Global Investors Services (2000-2003); CEO of Capital Markets Group of BGI (1996-2001).	Director (since December 5, 2003) of iShares, Inc.; Director (1998-2003) of Barclays Global Investors UK Holdings.


94		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Trustee Information (Unaudited) (Continued)

iSHARES^® TRUST

Independent Trustees


Name and Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
John B. Carroll (68)	Trustee (since January 1, 2002)	Retired Vice President of Investment Management (1984-2000) of Verizon Corporation; Advisory Board member of Ibbotson Associates (1992-1998); former Vice Chairman and Executive Committee Member (1994-1998) of the Committee on Investment of Employee Benefit Assets of the Financial Executive Institute.	Director (since 1996) of iShares, Inc.; Trustee and member of the Executive Committee (since 1991) of The Common Fund Institutional Funds, a non-profit organization; Member of the Board of Managers of JP Morgan Private Equity Funds.

Richard K. Lyons (43)	Trustee (since February 15, 2000)	Professor, University of California, Berkeley: Haas School of Business (since 1993); Consultant for IMF World Bank, Federal Reserve Bank, and Citibank N.A. (since 2000).	Director (since 2001) of iShares, Inc.; Trustee of Master Investment Portfolio and Barclays Global Investors Funds (since 2001); Board of Trustees: Trustee (Chairman) Matthews Asian Funds since 1995 (oversees 6 portfolios).

George C. Parker (65)	Trustee (since February 15, 2000)	Dean Witter Distinguished Professor of Finance (since 1994); Associate Dean for Academic Affairs, Director of MBA Program, and Professor, Stanford University: Graduate School of Business (1993-2001).	Director (since 2001) of iShares, Inc.; Director (since 1985) of Bailard, Biehl and Kaiser, Inc.; Director (since 1978) of California Casualty Group of Insurance Companies; Director (since 1996) of Continental Airlines, Inc.; Director (since 1995) of Community First Financial Group; Director (1994-2002) of Dresdner/RCM Mutual Funds; Director (since 1999) Tyon Ranch Company.

W. Allen Reed (57)	Trustee (since January 1, 2002)	President and Chief Executive Officer (since 1994) of General Motors Investment Management Corporation.	Director (since 1996) of iShares, Inc.; Director (since 1994) of General Motors Investment Management Corporation; Director (1995-1998) of Taubman Centers, Inc. (a real estate investment trust); Director (since 1992) of FLIR Systems (an imaging technology company); Director (since 1994) of General Motors Acceptance Corporation; Director (since 1994) of GMAC Insurance Holdings, Inc.; Director (since 1995) of Global Emerging Markets Fund; Director (since 2000) of Temple Inland Industries; Chairman (since 1995) of the Investment Advisory Committee of Howard Hughes Medical Institute.


TRUSTEE INFORMATION		95

Trustee Information (Unaudited) (Continued)

iSHARES ^® TRUST

Officer


Name and Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
Michael A. Latham (38)	Secretary, Treasurer and Principal Financial Officer (since February 28, 2002)	Chief Operating Officer of the Intermediary Investor and Exchange Traded Products Business of BGI (since 2003), Director of Mutual Fund Delivery in the U.S. Individual Investor Business of BGI (2000-2003); Head of Operations, BGI Europe (1997-2000).	None.


96		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

NOTES:


NOTES		97

The iShares^® Family of Funds

The following is a list of iShares Funds being offered, along with their respective exchange trading symbols. Please call iShares at 1-800-iShares (1-800-474-2737) to obtain a prospectus for any ishares fund. The prospectus contains more complete information, including charges, expenses, investment objectives and risk factors that should be carefully considered to determine if the fund(s) are an appropriate investment for you. Read the prospectus(es) carefully before investing. Investing involves risk, including possible loss of principal.

iShares S&P Domestic Index Funds

S&P 1500 (ISI) S&P 500 (IVV)

S&P 500/BARRA Growth (IVW)

S&P 500/BARRA Value (IVE)

S&P MidCap 400 (IJH)

S&P MidCap 400/BARRA Growth (IJK)

S&P MidCap 400/BARRA Value (IJJ)

S&P SmallCap 600 (IJR)

S&P SmallCap 600/BARRA Growth (IJT)

S&P SmallCap 600/BARRA Value (IJS)

S&P 100 (OEF)

iShares Sector and Specialty Index Funds

Cohen & Steers Realty Majors (ICF)

Dow Jones U.S. Basic Materials Sector (IYM)

Dow Jones U.S. Consumer Cyclical Sector (IYC)

Dow Jones U.S. Consumer Non-Cyclical Sector (IYK)

Dow Jones U.S. Energy Sector (IYE)

Dow Jones U.S. Financial Sector (IYF)

Dow Jones U.S. Financial Services (IYG)

Dow Jones U.S. Healthcare Sector (IYH)

Dow Jones U.S. Industrial Sector (IYJ)

Dow Jones U.S. Real Estate (IYR)

Dow Jones Select Dividend (DVY)

Dow Jones U.S. Technology Sector (IYW)

Dow Jones U.S. Telecommunications Sector (IYZ)

Dow Jones U.S. Total Market (IYY)

Dow Jones Transportation Average (IYT)

Dow Jones U.S. Utilities Sector (IDU)

Goldman Sachs Natural Resources (IGE)

Goldman Sachs Networking (IGN)

Goldman Sachs Semiconductor (IGW)

Goldman Sachs Software (IGV)

Goldman Sachs Technology (IGM)

Nasdaq Biotechnology (IBB)

S&P Global Energy Sector (IXC)

S&P Global Financials Sector (IXG)

S&P Global Healthcare Sector (IXJ)

S&P Global Technology Sector (IXN)

S&P Global Telecommunications Sector (IXP)

iShares Russell Index Funds

Russell 3000 (IWV)

Russell 3000 Growth (IWZ)

Russell 3000 Value (IWW)

Russell 1000 (IWB)

Russell 1000 Growth (IWF)

Russell 1000 Value (IWD)

Russell Midcap (IWR)

Russell Midcap Growth (IWP)

Russell Midcap Value (IWS)

Russell 2000 (IWM)

Russell 2000 Growth (IWO)

Russell 2000 Value (IWN)

iShares International Index Funds

MSCI Australia (EWA)

MSCI Austria (EWO)

MSCI Belgium (EWK)

MSCI Brazil (EWZ)

MSCI Canada (EWC)

MSCI EAFE (EFA)

MSCI Emerging Markets (EEM)

MSCI EMU (EZU)

MSCI France (EWQ)

MSCI Germany (EWG)

MSCI Hong Kong (EWH)

MSCI Italy (EWI)

MSCI Japan (EWJ)

MSCI Malaysia (EWM)

MSCI Mexico (EWW)

MSCI Netherlands (EWN)

MSCI Pacific ex-Japan (EPP)

MSCI Singapore (EWS)

MSCI South Africa (EZA)

MSCI South Korea (EWY)

MSCI Spain (EWP)

MSCI Sweden (EWD)

MSCI Switzerland (EWL)

MSCI Taiwan (EWT)

MSCI United Kingdom (EWU)

S&P Europe 350 (IEV)

S&P Global 100 (IOO)

S&P Latin America 40 (ILF)

S&P/TOPIX 150 (ITF)

iShares Bond Funds

Lehman Aggregate (AGG)

Lehman TIPS (TIP)

Lehman 1-3 Year Treasury (SHY)

Lehman 7-10 Year Treasury (IEF)

Lehman 20+ Year Treasury (TLT)

GS $InvesTop^™ Corporate (LQD)

iShares NYSE Index Funds

NYSE 100 (NY)

NYSE Composite (NYC)

iShares Morningstar Index Funds*

Large Core (JKD)

Large Growth (JKE)

Large Value (JKF)

Mid Core (JKG)

Mid Growth (JKH)

Mid Value (JKI)

Small Core (JKJ)

Small Growth (JKK)

Small Value (JKL)

Public offering expected on or about July 2, 2004.

An investment in the Fund(s) is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

This advertising section does not constitute part of the 2004 Annual Report.


98		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

The iShares Funds are distributed by SEI Investment Distribution Co, (SEI).Barclays Global Fund Advisors (BGFA) serves as an advisor to the iShares Funds. Barclays Global Investors Services (BGIS) assists in the marketing of the iShares Funds. 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.

The iShares Funds are not sponsored, endorsed, issued, sold or promoted by Dow Jones & Company, Inc. nor does this company make any representation regarding the advisability of investing in the iShares Funds.

Investing involves risk, including possible loss of principal.

©2004 Barclays Global Investors. All rights reserved. iShares is a registered trade-mark of Barclays Global Investors, N.A. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.

This report is intended of the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.

[GRAPHIC APPEARS HERE]

iShares^® Industrial strength investment tools from BARCLAYS GLOBAL INVESTORS

1 800 i SHARES (1 800 474 2737) www.iSHARES.COM

Item 1. Reports to Stockholders.

Copies of the annual reports transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940 are attached.

Item 2. Code of Ethics.

As of April 30, 2004, iShares Trust (the “Registrant”) had adopted a code of ethics that applies to persons appointed by the Registrant’s Board of Trustees as the Chief Executive Officer, President, Chief Financial Officer, Treasurer and/or Chief Accounting Officer, and any persons performing similar functions. For the fiscal year ended April 30, 2004, there were no amendments to any provision of this code of ethics, nor were there any waivers granted from any provision of this code of ethics. A copy of this code of ethics is filed with this Form N-CSR under Item 11(a)(1).

Item 3. Audit Committee Financial Expert.

The Registrant’s Board of Trustees has determined that the Registrant has more than one audit committee financial expert, as that term is defined under Item 3(b) and 3(c), serving on its audit committee. The audit committee financial experts serving on the Registrant’s audit committee are John B. Carroll, Richard K. Lyons, George C. Parker and W. Allen Reed, all of whom are independent, as that term is defined under Item 3(a)(2). Richard K. Lyons holds a PhD in Economics and qualifies as an audit committee financial expert through his many years of university-level (graduate) teaching of accounting and finance-related subjects, his many years of research in the same subjects (including mutual funds), and his extensive experience serving as independent director and as a member of various mutual fund audit committees.

Item 4. Principal Accountant Fees and Services.

The principal accountant fees disclosed in items 4(a), 4(b), 4(c), and 4(d) relate to the sixteen series of the Registrant for which the fiscal year-end is April 30, 2004 (the “Funds”), and whose annual financial statements are reported in Item 1.

(a)

Audit Fees – The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the Funds’ annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years, were $126,000 and $176,000 for the fiscal years ended April 30, 2003 and April 30, 2004, respectively.

(b)

Audit-Related Fees – There were no fees billed for the fiscal years ended April 30, 2003 and April 30, 2004 for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the Funds’ financial statements and are not reported under (a) of this Item.

(c)

Tax Fees – The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for the review of the Funds’ tax returns and excise tax calculations, were $78,236 and $86,400 for the fiscal years ended April 30, 2003 and April 30, 2004, respectively. A small portion of the aggregate fees billed for the fiscal year ended April 30, 2003 were for services rendered in relation to the dissolution of the iShares Dow Jones U.S. Chemicals Index Fund and iShares Dow Jones U.S. Internet Index Fund, two series of the Registrant, which were dissolved in December 2002.

(d)

All Other Fees – There were no other fees billed for the fiscal years ended April 30, 2003 and April 30, 2004 for products and services provided by the principal accountant, other than the services reported in (a) through (c) of this Item.

(e)

(1) The Registrant’s audit committee charter, as most recently amended in June 2004, provides that the audit committee is responsible for the approval, prior to appointment, of the engagement of the principal accountant to annually audit and provide their opinion on the Registrant’s financial statements. The audit committee must also approve, prior to appointment, the engagement of the principal accountant to provide non-audit services to the Registrant or to any entity controlling, controlled by or under common control with the Registrant’s investment adviser (“Adviser Affiliate”) that provides services to the Registrant, if the engagement relates directly to the operations and financial reporting of the Registrant.

(2) There were no services described in (b) through (d) above (including services required to be approved by the audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X) that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f)

None of the hours expended on the principal accountant’s engagement to audit the Funds’ financial statements for the fiscal year ended April 30, 2004 were attributable to work performed by persons other than the principal accountant’s full-time, permanent employees.

(g)

The aggregate non-audit fees billed by the Registrant’s principal accountant for services rendered to the Funds, and rendered to the Registrant’s investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Registrant for the fiscal years ended April 30, 2003 and April 30, 2004 were $1,620,214 and $436,865, respectively.

(h)

The Registrant’s audit committee has considered whether the provision of non-audit services rendered to the Registrant’s investment adviser and any Adviser Affiliate that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, if any, are compatible with maintaining the principal accountant’s independence, and has determined that the provision of these services do not compromise the principal accountant’s independence.

Item 5. Audit Committee of Listed Registrants.

Not applicable to this filing.

Item 6. Schedule of Investments.

Not applicable to this filing.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable to the Registrant.

Item 8. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable to the Registrant.

Item 9. Submission of Matters to a Vote of Security Holders.

Not applicable.

Item 10. 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 the Registrant (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are reasonably designed to achieve the purposes described in the attached certification, Section 4 (a).

(b) Not applicable.

Item 11. Exhibits.

(a) (1) Code of Ethics for Senior Officers that is the subject of Item 2 is attached.

(a) (2) Section 302 Certifications are attached.

(b) 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: July 8, 2004

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: July 8, 2004

By: /s/ Michael A. Latham

Michael A. Latham, Principal Financial Officer

Date: July 8, 2004