Form N-CSR

Total Returns

Inception to 7/31/04

MARKET

INDEX

N-CSR 1 dncsr.htm FORM N-CSR Form N-CSR


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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)

c/o: Investors Bank & Trust Company

200 Clarendon Street; Boston, MA

02116

(Address of principal executive offices)

(Zip code)

The Corporation Trust Company

1209 Orange Street, Wilmington, 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: July 31, 2004

Date of reporting period: July 31, 2004

Item 1.

Reports to Stockholders.

iShares^®

2004 ANNUAL REPORT TO SHAREHOLDERS | JULY 31, 2004

LOGO

iSHARES GOLDMAN SACHS SERIES

iSHARES MSCI SERIES

iSHARES NYSE SERIES

iSHARES GOLDMAN SACHS TECHNOLOGY INDEX FUND

iSHARES GOLDMAN SACHS NETWORKING INDEX FUND

iSHARES GOLDMAN SACHS SEMICONDUCTOR INDEX FUND

iSHARES GOLDMAN SACHS SOFTWARE INDEX FUND

iSHARES GOLDMAN SACHS NATURAL RESOURCES INDEX FUND

iSHARES MSCI EAFE INDEX FUND

iSHARES NYSE COMPOSITE INDEX FUND

iSHARES NYSE 100 INDEX FUND

Table of Contents


Shareholder Letter		1
Managers’ Discussion & Analysis		2
Shareholder Expenses		16
Schedules of Investments		18
iShares Goldman Sachs Technology Index Fund		18
iShares Goldman Sachs Networking Index Fund		25
iShares Goldman Sachs Semiconductor Index Fund		29
iShares Goldman Sachs Software Index Fund		33
iShares Goldman Sachs Natural Resources Index Fund		37
iShares MSCI EAFE Index Fund		42
iShares NYSE Composite Index Fund		56
iShares NYSE 100 Index Fund		87
Financial Statements		93
Financial Highlights		100
Notes to the Financial Statements		107
Report of Independent Registered Public Accounting Firm		115
Tax Information (Unaudited)		116
Supplemental Information (Unaudited)		117
Trustee Information (Unaudited)		121
iShares Family of Funds		126

To Our Shareholders:

Stock markets generally delivered positive returns during the twelve months ended July 31, 2004. Supporting market strength, economic indicators continue to improve, suggesting economic recovery and expansion. Healthy quarterly gross domestic product (GDP) beginning in the third quarter of 2003 contributed to the performance trend, and declining unemployment rates in 2004 provided additional encouragement. Corporate earnings levels also reflected improving conditions. In response to the improving economic climate, the Federal Reserve Board (the “Fed”) increased its key short-term interest rate to 1.25% at its June 30 meeting. The increase, which was widely expected on Wall Street, was the first in four years, raising the rate from a 46-year low of 1.00%.

Not all news was positive, though. Surging oil prices and continuing geopolitical unrest gave some investors cause for wariness. Late in the reporting period, however, additional data, including a rise in the consumer confidence level, an increase in manufacturing activity and higher business investment levels provided additional signs of an economy in recovery. While these signs are encouraging, there is no guarantee that more challenging conditions will not return.

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 in March, both Funds are included in this report.

As market conditions change, we encourage you to talk with your financial adviser about what blend of investments or asset allocation can best help you meet your financial goals. One trait many successful investors share is the ability to stay focused on their personal financial goals while ignoring market swings. Regardless of market conditions, a sound, disciplined investment plan is essential.

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.

Lee T. Kranefuss

President and Chairman of the Board of Trustees

iShares Trust


SHAREHOLDER LETTER		1

Managers’ Discussion & Analysis

iSHARES^® GOLDMAN SACHS TECHNOLOGY INDEX FUND

Performance as of 7/31/04


Average Annual Total Returns											Cumulative Total Returns
*Year Ended 7/31/04*					*Inception to 7/31/04*						*Inception to 7/31/04*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
8.52%	8.55	%	9.15	%	(8.62	)%	(8.62	)%	(8.17	)%	(26.31	)%	(26.31	)%	(25.04	)%

Total returns for the periods since inception are calculated from the inception date of the Fund (3/13/01). “Average annual total returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative total returns” represent the total change in value of an investment over the periods indicated.

A fund’s per share net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the 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 (3/19/01), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.

GROWTH OF $10,000 INVESTMENT

SINCE INCEPTION AT NET ASSET VALUE

LOGO


	iShares Goldman Sachs Technology Index Fund		Goldman Sachs Technology Sector Index
3/13/2001	$	10,000	$	10,000
3/31/2001	$	9,053	$	9,054
4/30/2001	$	10,776	$	10,782
5/31/2001	$	10,344	$	10,353
6/30/2001	$	10,362	$	10,380
7/31/2001	$	9,624	$	9,641
8/31/2001	$	8,369	$	8,386
9/30/2001	$	6,674	$	6,689
10/31/2001	$	7,741	$	7,763
11/30/2001	$	9,057	$	9,086
12/31/2001	$	8,894	$	8,926
1/31/2002	$	8,879	$	8,916
2/28/2002	$	7,690	$	7,725
3/31/2002	$	8,235	$	8,275
4/30/2002	$	7,219	$	7,261
5/31/2002	$	6,925	$	6,965
6/30/2002	$	5,943	$	5,980
7/31/2002	$	5,339	$	5,375
8/31/2002	$	5,269	$	5,306
9/30/2002	$	4,327	$	4,359
10/31/2002	$	5,269	$	5,311
11/30/2002	$	6,189	$	6,240
12/31/2002	$	5,285	$	5,329
1/31/2003	$	5,234	$	5,284
2/28/2003	$	5,313	$	5,364
3/31/2003	$	5,251	$	5,304
4/30/2003	$	5,798	$	5,857
5/31/2003	$	6,436	$	6,511
6/30/2003	$	6,417	$	6,495
7/31/2003	$	6,791	$	6,867
8/31/2003	$	7,254	$	7,343
9/30/2003	$	7,140	$	7,235
10/31/2003	$	7,845	$	7,942
11/30/2003	$	7,984	$	8,095
12/31/2003	$	8,119	$	8,220
1/31/2004	$	8,485	$	8,606
2/29/2004	$	8,242	$	8,362
3/31/2004	$	8,013	$	8,132
4/30/2004	$	7,531	$	7,657
5/31/2004	$	7,951	$	8,082
6/30/2004	$	8,148	$	8,281
7/31/2004	$	7,369	$	7,496

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.

The iShares Goldman Sachs Technology Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Goldman Sachs Technology Sector Index (the “Index”). The Index has been developed by Goldman Sachs as an equity benchmark of U.S.-traded technology-related stocks. The Index includes companies in the following categories: producers of sophisticated computer-related devices; electronics networking and Internet services; producers of computer and Internet software; consultants for information technology; and providers of computer services. The Fund invests in a representative sample of securities in the Index that are selected by the investment adviser to have a similar investment profile as the Index. For the twelve months ended July 31, 2004 (the “reporting period”), the Fund returned 8.52%, and the Index returned 9.15%.


2		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

As encouraging news on both the economic and corporate fronts offered cause for optimism, equity markets got off to a strong start during the reporting period. Third quarter 2003 gross domestic product (“GDP”) annual growth was reported at 8.2%, considerably higher than previous quarters and exceeding most analyst expectations. Fourth quarter 2003 annual growth was a more moderate, yet sustainable, 4.0%, followed by a 4.5% annual pace for the first quarter of 2004. Corporate earnings growth was also strong and consistent during the reporting period.

During the final months of the reporting period, however, returns dampened in response to mixed economic signs and continued geopolitical strife. Although some economic indicators, including consumer sentiment and capital goods spending, were healthy, manufacturing production and employment levels were less encouraging. Continued geopolitical concerns such as the Madrid bombings also dampened investor sentiment. Concerns about growth were replaced with concerns about inflation during the course of the reporting period, and investors seemingly anticipated that the Federal Reserve Board (the “Fed”) would raise interest rates. The Fed did, indeed, raise its key short-term interest rate at its June 30 meeting to 1.25%, an increase from the 46-year low of 1.00%. Despite the increase, however, the Fed stressed that it would take “a measured approach” to further rate hikes. In late July, economic data released by the Commerce Department revealed further mixed signals in the form of a tepid 3.0% annual GDP rate for the second quarter and a doubling in U.S. business investment to 8.9% from 4.2%. The increase in business investment was welcomed by the markets as a positive sign of economic growth.

The top ten holdings in the Fund represented approximately 51% of the net assets of the Fund as of July 31, 2004. Performance during the reporting period was mostly positive among the Fund’s ten largest holdings. Internet and wireless-related companies tended to be the better performers during the reporting period, while some of the largest technology bellwether stocks logged declines. Internet service giant Yahoo! Inc. led the way, followed by Qualcomm Inc. and eBay Inc. On the negative side, enterprise software bellwether Oracle Corp. posted a loss for the reporting period, as did Hewlett-Packard Co. and Intel Corp.


MANAGERS’ DISCUSSION & ANALYSIS		3

Managers’ Discussion & Analysis

iSHARES^® GOLDMAN SACHS NETWORKING INDEX FUND

Performance as of 7/31/04


Average Annual Total Returns											Cumulative Total Returns
*Year Ended 7/31/04*					*Inception to 7/31/04*						*Inception to 7/31/04*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
29.98%	30.23	%	30.89	%	(9.27	)%	(9.27	)%	(8.69	)%	(25.74	)%	(25.74	)%	(24.27	)%

Total returns for the periods since inception are calculated from the inception date of the Fund (7/10/01). “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.

For purposes of calculating the total return of the Index, dividends and distributions made by companies included in the Index generally are assumed to be reinvested in the securities issued by those companies. However, prior to December 31, 2002, the total returns of the Index did not reflect reinvestment of dividends and distributions. The performance of the Index would have been higher for periods prior to that date had dividends and distributions been assumed to be reinvested.

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 (7/13/01), 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

LOGO


	iShares Goldman Sachs Networking Index Fund		Goldman Sachs Technology Industry Multimedia Networking Index
7/10/2001	$	10,000	$	10,000
7/31/2001	$	10,468	$	10,464
8/31/2001	$	8,563	$	8,698
9/30/2001	$	6,575	$	6,794
10/31/2001	$	7,833	$	7,911
11/30/2001	$	9,100	$	9,241
12/31/2001	$	8,428	$	8,511
1/31/2002	$	8,150	$	8,238
2/28/2002	$	6,253	$	6,324
3/31/2002	$	6,792	$	6,868
4/30/2002	$	5,939	$	6,002
5/31/2002	$	5,493	$	5,530
6/30/2002	$	4,086	$	4,117
7/31/2002	$	3,604	$	3,635
8/31/2002	$	3,502	$	3,534
9/30/2002	$	2,651	$	2,674
10/31/2002	$	3,205	$	3,235
11/30/2002	$	4,507	$	4,551
12/31/2002	$	3,709	$	3,749
1/31/2003	$	4,064	$	4,109
2/28/2003	$	4,012	$	4,060
3/31/2003	$	3,970	$	4,019
4/30/2003	$	4,455	$	4,510
5/31/2003	$	5,479	$	5,552
6/30/2003	$	5,407	$	5,485
7/31/2003	$	5,713	$	5,786
8/31/2003	$	6,316	$	6,402
9/30/2003	$	6,495	$	6,594
10/31/2003	$	7,415	$	7,527
11/30/2003	$	7,635	$	7,751
12/31/2003	$	7,588	$	7,706
1/31/2004	$	9,526	$	9,704
2/29/2004	$	9,449	$	9,620
3/31/2004	$	8,643	$	8,829
4/30/2004	$	7,478	$	7,645
5/31/2004	$	8,177	$	8,338
6/30/2004	$	8,711	$	8,911
7/31/2004	$	7,426	$	7,574

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. However, prior to December 31, 2002, the total returns of the Index did not reflect reinvestment of dividends and distributions. 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.

The iShares Goldman Sachs Networking Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Goldman Sachs Technology Industry Multimedia Networking Index (the “Index”). The Index has been developed by Goldman Sachs as an equity benchmark of U.S.-traded multimedia networking stocks. The Index includes companies that are producers of telecom equipment, data networking and wireless equipment. The Fund invests in a representative sample of securities in the


4		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Index that are selected by the investment adviser to have a similar investment profile as the Index. For the twelve months ended July 31, 2004 (the “reporting period”), the Fund returned 29.98%, and the Index returned 30.89%.

U.S. markets got off to a strong start for the reporting period, buoyed by encouraging news on both economic and corporate fronts. Third quarter 2003 gross domestic product (“GDP”) annual growth was reported at 8.2%, considerably higher than previous quarters and exceeding most analyst expectations. Fourth quarter 2003 annual growth was a more moderate, yet sustainable, 4.0%, followed by a 4.5% annual pace for the first quarter of 2004. Corporate earnings growth was also strong and consistent during the reporting period.

During the final months of the reporting period, however, market strength slowed in response to mixed economic signs and continued geopolitical strife. Although some economic indicators, including consumer sentiment and capital goods spending, were healthy, manufacturing production and employment levels were less encouraging. Continued geopolitical events such as the Madrid bombings also dampened investor sentiment. As GDP growth levels improved, earlier concerns about slow growth were replaced with concerns about inflation, and many investors anticipated that the Federal Reserve Board (the “Fed”) would raise interest rates. The Fed did, indeed, raise its key short-term interest rate at its June 30 meeting to 1.25%, an increase from the 46-year low of 1.00%. Despite the increase, however, the Fed stressed that it would take “a measured approach” to further rate hikes. In late July, economic data released by the Commerce Department revealed further mixed signals in the form of a tepid 3.0% annual GDP rate for the second quarter and a doubling in U.S. business investment to 8.9% from 4.2%. The increase in business investment was welcomed by the markets as a positive sign of economic growth.

As equity markets advanced during the reporting period, technology stocks were some of the leaders. PC sales and global chip sales both climbed through much of the reporting period. Networking stocks as a group delivered some of the strongest returns for the reporting period.

The top ten holdings in the Fund represented approximately 71% of the net assets of the Fund as of July 31, 2004. Among the Fund’s ten largest holdings, performance was positive during the reporting period. Research in Motion Ltd., which designs, manufactures and markets wireless solutions for the worldwide mobile communications market, logged triple-digit gains as the mobile telecommunications sector improved. Wireless giant Qualcomm Inc., the largest holding in the Fund, posted strong gains during the reporting period, as did Motorola Inc., Broadcom Corp., and Lucent Technologies Inc. The most modest gains among the ten largest Fund holdings came from technology bellwether Cisco Systems Inc.


MANAGERS’ DISCUSSION & ANALYSIS		5

Managers’ Discussion & Analysis

iSHARES^® GOLDMAN SACHS SEMICONDUCTOR INDEX FUND

Performance as of 7/31/04


Average Annual Total Returns											Cumulative Total Returns
*Year Ended 7/31/04*					*Inception to 7/31/04*						*Inception to 7/31/04*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
4.76%	4.77	%	5.37	%	(8.13	)%	(8.17	)%	(7.75	)%	(22.86	)%	(22.95	)%	(21.88	)%

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 (7/13/01), 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

LOGO


	iShares Goldman Sachs Semiconductor Index Fund		Goldman Sachs Technology Industry Semiconductor Index
7/10/2001	$	10,000	$	10,000
7/31/2001	$	11,261	$	11,263
8/31/2001	$	10,544	$	10,550
9/30/2001	$	7,296	$	7,300
10/31/2001	$	8,876	$	8,885
11/30/2001	$	10,349	$	10,361
12/31/2001	$	10,137	$	10,145
1/31/2002	$	10,571	$	10,590
2/28/2002	$	9,412	$	9,433
3/31/2002	$	10,891	$	10,916
4/30/2002	$	9,817	$	9,842
5/31/2002	$	9,097	$	9,123
6/30/2002	$	7,322	$	7,345
7/31/2002	$	6,341	$	6,363
8/31/2002	$	5,770	$	5,793
9/30/2002	$	4,504	$	4,522
10/31/2002	$	5,546	$	5,569
11/30/2002	$	6,923	$	6,955
12/31/2002	$	5,264	$	5,289
1/31/2003	$	5,051	$	5,079
2/28/2003	$	5,455	$	5,486
3/31/2003	$	5,327	$	5,360
4/30/2003	$	5,994	$	6,031
5/31/2003	$	6,923	$	6,972
6/30/2003	$	6,672	$	6,723
7/31/2003	$	7,363	$	7,414
8/31/2003	$	8,561	$	8,628
9/30/2003	$	7,940	$	8,011
10/31/2003	$	9,490	$	9,574
11/30/2003	$	9,996	$	10,094
12/31/2003	$	9,588	$	9,676
1/31/2004	$	9,893	$	9,986
2/29/2004	$	9,792	$	9,898
3/31/2004	$	9,413	$	9,512
4/30/2004	$	8,436	$	8,541
5/31/2004	$	9,300	$	9,413
6/30/2004	$	9,032	$	9,141
7/31/2004	$	7,714	$	7,813

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. However, prior to December 31, 2002, the total returns of the Index did not reflect reinvestment of dividends and distributions. 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.

The iShares Goldman Sachs Semiconductor Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Goldman Sachs Technology Industry Semiconductor Index (the “Index”). The Index has been developed by Goldman Sachs as an equity benchmark of U.S-traded semiconductor stocks. The Index includes companies that are producers of capital equipment or manufacturers of wafers and chips. The Fund invests in a representative sample of securities in the Index that are selected by the investment adviser to have a similar investment profile as the Index. For the twelve months ended July 31, 2004 (the “reporting period”), the Fund returned 4.76%, and the Index returned 5.37%.


6		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

During the final months of the reporting period, market strength slowed as investors seemingly attempted to interpret mixed economic signs and continued geopolitical strife. Although some economic indicators, including consumer sentiment and capital goods spending, were healthy, manufacturing production and employment levels were less encouraging. Continued geopolitical events such as the Madrid bombings also dampened investor sentiment. Concerns about growth were replaced with concerns about inflation, and investors seemingly anticipated that the Federal Reserve Board (the “Fed”) would raise interest rates. The Fed did, indeed, raise its key short-term interest rate at its June 30 meeting to 1.25%, an increase from the 46-year low of 1.00%. Despite the increase, however, the Fed stressed that it would take “a measured approach” to further rate hikes. In late July, economic data released by the Commerce Department revealed further mixed signals in the form of a tepid 3.0% annual GDP rate for the second quarter and a doubling in U.S. business investment to 8.9% from 4.2%. The increase in business investment was welcomed by the markets as a positive sign of economic growth.

The technology industry in general and the semiconductor industry in particular were relatively strong performers during the reporting period. However, the confusing economic conditions of the final months of the reporting period, as well as some cutbacks in capital spending, caused many semiconductor stocks to give back some of the robust gains they had made earlier in the period and posted more modest results.

The top ten holdings in the Fund represented approximately 61% of the net assets of the Fund as of July 31, 2004. Performance was mixed among the Fund’s ten largest holdings. Motorola Inc. and Broadcom Corp., which are involved in broadband and wireless-related technology solutions, delivered the most robust gains among the ten largest holdings for the reporting period. Maxim Integrated Products Inc., which designs and manufactures analog circuits, also posted healthy gains. Semiconductor company Applied Materials Inc., the largest weighting in the Fund, posted a decline during the reporting period, as did Italian-based STMicroelectronics NV.


MANAGERS’ DISCUSSION & ANALYSIS		7

Managers’ Discussion & Analysis

iSHARES^® GOLDMAN SACHS SOFTWARE INDEX FUND

Performance as of 7/31/04


Average Annual Total Returns											Cumulative Total Returns
*Year Ended 7/31/04*					*Inception to 7/31/04*						*Inception to 7/31/04*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
7.26%	7.29	%	7.80	%	(11.46	)%	(11.46	)%	(11.01	)%	(31.09	)%	(31.09	)%	(30.02	)%

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 (7/13/01), 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

LOGO


	iShares Goldman Sachs Software Index Fund		Goldman Sachs Technology Industry Software Index
7/10/2001	$	10,000	$	10,000
7/31/2001	$	9,829	$	9,832
8/31/2001	$	7,993	$	7,998
9/30/2001	$	6,069	$	6,077
10/31/2001	$	7,408	$	7,426
11/30/2001	$	8,795	$	8,819
12/31/2001	$	9,243	$	9,269
1/31/2002	$	9,367	$	9,396
2/28/2002	$	7,856	$	7,885
3/31/2002	$	8,390	$	8,424
4/30/2002	$	6,700	$	6,731
5/31/2002	$	6,112	$	6,144
6/30/2002	$	5,603	$	5,633
7/31/2002	$	4,807	$	4,833
8/31/2002	$	4,760	$	4,788
9/30/2002	$	4,190	$	4,216
10/31/2002	$	5,041	$	5,075
11/30/2002	$	5,922	$	5,964
12/31/2002	$	5,161	$	5,196
1/31/2003	$	5,297	$	5,338
2/28/2003	$	5,212	$	5,253
3/31/2003	$	5,041	$	5,084
4/30/2003	$	5,615	$	5,665
5/31/2003	$	6,307	$	6,366
6/30/2003	$	6,333	$	6,401
7/31/2003	$	6,425	$	6,490
8/31/2003	$	6,967	$	7,047
9/30/2003	$	6,859	$	6,944
10/31/2003	$	7,402	$	7,485
11/30/2003	$	7,386	$	7,473
12/31/2003	$	7,720	$	7,808
1/31/2004	$	7,868	$	7,974
2/29/2004	$	7,744	$	7,848
3/31/2004	$	7,730	$	7,827
4/30/2004	$	7,382	$	7,493
5/31/2004	$	7,557	$	7,663
6/30/2004	$	7,757	$	7,873
7/31/2004	$	6,891	$	6,997

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. However, prior to December 31, 2002, the total returns of the Index did not reflect reinvestment of dividends and distributions. 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.

The iShares Goldman Sachs Software Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Goldman Sachs Technology Industry Software Index (the “Index”). The Index has been developed by Goldman Sachs as an equity benchmark of U.S.-traded software-related stocks. The Index includes companies that are producers of client/server, enterprise software, Internet software, PC and entertainment software. The Fund invests in a representative sample of securities in the Index that are selected by the investment adviser to have a similar investment profile as the Index. For the twelve months ended July 31, 2004 (the “reporting period”), the Fund returned 7.26%, and the Index returned 7.80%.


8		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

For the technology sector, the improving conditions translated into increased demand. Software companies, in particular, benefited from the trend, with the group generally showing healthy gains.

The top ten holdings of the Fund represented approximately 61% of the net assets of the Fund as of July 31, 2004. Among the Fund’s ten largest holdings, performance was mixed. Symantec Corp. continued its upward trend, nearly doubling its share price during the reporting period. Adobe Systems Inc. rebounded during the reporting period. Electronic Arts Inc., which designs and produces interactive software games, also performed well. On the negative side, Veritas Software Corp., Intuit Inc., and Oracle Corp. all declined during the reporting period.


MANAGERS’ DISCUSSION & ANALYSIS		9

Managers’ Discussion & Analysis

iSHARES^® GOLDMAN SACHS NATURAL RESOURCES INDEX FUND

Performance as of 7/31/04


Average Annual Total Returns											Cumulative Total Returns
*Year Ended 7/31/04*					*Inception to 7/31/04*						*Inception to 7/31/04*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
36.34%	36.35	%	36.88	%	9.47	%	9.45	%	9.94	%	28.55	%	28.47	%	30.01	%

Total returns for the periods since inception are calculated from the inception date of the Fund (10/22/01). “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 (10/26/01), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

GROWTH OF $10,000 INVESTMENT

SINCE INCEPTION AT NET ASSET VALUE

LOGO


	iShares Goldman Sachs Natural Resources Index Fund		Goldman Sachs Natural Resources Sector Index
10/22/2001	$	10,000	$	10,000
10/31/2001	$	9,898	$	9,899
11/30/2001	$	9,594	$	9,594
12/31/2001	$	10,045	$	10,038
1/31/2002	$	9,825	$	9,822
2/28/2002	$	10,254	$	10,258
3/31/2002	$	11,002	$	11,009
4/30/2002	$	10,662	$	10,673
5/31/2002	$	10,606	$	10,621
6/30/2002	$	10,202	$	10,217
7/31/2002	$	8,871	$	8,888
8/31/2002	$	9,021	$	9,044
9/30/2002	$	8,147	$	8,168
10/31/2002	$	8,299	$	8,325
11/30/2002	$	8,698	$	8,730
12/31/2002	$	8,739	$	8,776
1/31/2003	$	8,524	$	8,564
2/28/2003	$	8,654	$	8,698
3/31/2003	$	8,577	$	8,624
4/30/2003	$	8,675	$	8,727
5/31/2003	$	9,621	$	9,685
6/30/2003	$	9,632	$	9,701
7/31/2003	$	9,428	$	9,498
8/31/2003	$	9,999	$	10,080
9/30/2003	$	9,830	$	9,913
10/31/2003	$	10,152	$	10,243
11/30/2003	$	10,382	$	10,479
12/31/2003	$	11,679	$	11,795
1/31/2004	$	11,446	$	11,564
2/29/2004	$	12,076	$	12,207
3/31/2004	$	12,070	$	12,206
4/30/2004	$	11,841	$	11,962
5/31/2004	$	11,942	$	12,068
6/30/2004	$	12,617	$	12,756
7/31/2004	$	12,855	$	13,002

The iShares Goldman Sachs Natural Resources Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Goldman Sachs Natural Resources Sector Index (the “Index”). The Index has been developed by Goldman Sachs as an equity benchmark of U.S.-traded natural resource-related stocks. The Index includes companies in the following categories: extractive industries, energy companies, owners and operators of timber tracts, forestry services, producers of pulp and paper, and owners of plantations. The Fund invests in a representative sample of securities in the Index that are selected by the investment adviser to have a similar investment profile as the Index. For the twelve months ended July 31, 2004 (the “reporting period”), the Fund returned 36.34%, and the Index returned 36.88%.


10		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

U.S. markets logged gains during the reporting period, buoyed by encouraging news on both economic and corporate fronts. Third quarter 2003 gross domestic product (“GDP”) annual growth was reported at 8.2%, considerably higher than previous quarters and exceeding most analyst expectations. Fourth quarter 2003 annual growth was a more moderate, yet sustainable, 4.0%, followed by a 4.5% annual pace for the first quarter of 2004. Corporate earnings growth was also strong and consistent during the reporting period.

During the reporting period, natural resources stocks benefited from the signs of economic expansion. As economic activity increased, so did the demand for commodities such as paper, metals, and forest products. As low oil supply drove the price of crude oil above $40 per barrel, oil stocks gained. In general, the smaller oil service and exploration companies were the strongest performers, because they tend to be more sensitive to changes in oil prices than do the larger, diversified oil companies.

The top ten holdings in the Fund represented approximately 47% of the net assets of the Fund as of July 31, 2004. All of the Fund’s ten largest holdings delivered solid gains during the reporting period. Strong returns came from oil service and exploration services companies Occidental Petroleum Corp., Schlumberger Ltd., and EnCana Corp., which benefited from high oil prices. Large integrated oil companies BP PLC, ChevronTexaco Corp., Exxon Mobil Corp., Royal Dutch Petroleum Co., and ConocoPhilips also delivered healthy gains during the reporting period.


MANAGERS’ DISCUSSION & ANALYSIS		11

Managers’ Discussion & Analysis

iSHARES^® MSCI EAFE INDEX FUND

Performance as of 7/31/04


Average Annual Total Returns											Cumulative Total Returns
*Year Ended 7/31/04*					*Inception to 7/31/04*						*Inception to 7/31/04*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
24.81%	25.87	%	25.05	%	3.44	%	3.49	%	3.50	%	10.53	%	10.70	%	10.72	%

Total returns for the periods since inception are calculated from the inception date of the Fund (8/14/01). “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 (8/17/01), 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

LOGO


	iShares MSCI EAFE Index Fund		MSCI EAFE Index
8/14/2001	$	10,000	$	10,000
8/31/2001	$	9,719	$	9,711
9/30/2001	$	8,777	$	8,767
10/31/2001	$	9,024	$	9,015
11/30/2001	$	9,301	$	9,299
12/31/2001	$	9,365	$	9,361
1/31/2002	$	8,877	$	8,871
2/28/2002	$	8,941	$	8,933
3/31/2002	$	9,464	$	9,456
4/30/2002	$	9,480	$	9,473
5/31/2002	$	9,632	$	9,625
6/30/2002	$	9,258	$	9,242
7/31/2002	$	8,342	$	8,330
8/31/2002	$	8,326	$	8,311
9/30/2002	$	7,435	$	7,418
10/31/2002	$	7,830	$	7,816
11/30/2002	$	8,181	$	8,171
12/31/2002	$	7,904	$	7,897
1/31/2003	$	7,572	$	7,567
2/28/2003	$	7,402	$	7,394
3/31/2003	$	7,257	$	7,249
4/30/2003	$	7,962	$	7,960
5/31/2003	$	8,439	$	8,442
6/30/2003	$	8,647	$	8,646
7/31/2003	$	8,856	$	8,856
8/31/2003	$	9,071	$	9,069
9/30/2003	$	9,348	$	9,348
10/31/2003	$	9,929	$	9,931
11/30/2003	$	10,148	$	10,151
12/31/2003	$	10,942	$	10,945
1/31/2004	$	11,096	$	11,099
2/29/2004	$	11,346	$	11,355
3/31/2004	$	11,403	$	11,419
4/30/2004	$	11,147	$	11,161
5/31/2004	$	11,169	$	11,185
6/30/2004	$	11,426	$	11,444
7/31/2004	$	11,053	$	11,073

The iShares MSCI EAFE Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI EAFE Index (the “Index”). The Index measures the performance of equities in developed European, Australian, and Far East markets. The Fund invests in a representative sample of securities in the Index that are selected by the investment adviser to have a similar investment profile as the Index. For the twelve months ended July 31, 2004 (the “reporting period”), the Fund returned 24.81%, and the Index returned 25.05%.


12		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

A global economic recovery strengthened equity markets during most of the reporting period. Integrated oil and gas companies, in particular, logged gains as oil prices surged. In Europe, corporate earnings growth was revived by the improving economic conditions both at home and in the U.S. In Asia, Japan’s economy continued to strengthen. While Japan’s export market continued to benefit from economic recovery in the U.S. during the reporting period, it also enjoyed strong demand from China. In December, the Japanese government announced an increase in exports due to high demand for Japanese products. Domestically, Japan’s consumer spending began to strengthen thanks largely to improving employment levels.

During the second half of the reporting period, global equity markets dampened amid fears that interest rates had remained too low given the improved growth rates of many global economies. Despite the pullback, however, international equities delivered healthy year-on-year gains, boosted for the U.S. dollar-based investor by the strength of most foreign currencies against the U.S. dollar.

All countries within the Index showed positive returns for the reporting period, except for Finland, which was held down by the negative return of its major constituent, Nokia OYJ. On average, Far East countries fared better than European countries.

Among the Fund’s ten largest holdings, performance was mostly positive over the reporting period. Japan’s Toyota Motor Corp. was the top performer among the Fund’s ten largest holdings, benefiting from strong export demand. Integrated oil and gas companies BP PLC (United Kingdom), Total SA (France), and Royal Dutch Petroleum Co. (The Netherlands) all delivered gains, thanks to the spike in oil prices. The only negative performer among the ten largest holdings for the reporting period was Royal Bank of Scotland (United Kingdom).


MANAGERS’ DISCUSSION & ANALYSIS		13

Managers’ Discussion & Analysis

iSHARES^® NYSE COMPOSITE INDEX FUND

Performance as of 7/31/04

“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 (3/30/04).

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 (4/2/04), 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 7/31/04, the Fund did not have six months of performance and therefore a line graph is not presented.

The iShares NYSE Composite Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the NYSE Composite Index (the “Index”). The Index measures the performance of all common stocks, American Depositary Receipts (“ADRs”), real estate investment trusts (“REITs”) and tracking stocks listed on the NYSE. The securities in the Index represent a broad spectrum of large, mid- and small-capitalization companies. The Fund invests in a representative sample of securities in the Index that are selected by the investment adviser to have a similar investment profile as the Index. From its inception on March 30, 2004 through July 31, 2004 (the “reporting period”), the Fund declined 2.10%, compared to a decline of 2.02% for the Index.

At the time of the Fund’s inception, investors were grappling with a series of mixed economic data. Although some economic indicators, including consumer sentiment and capital goods spending, were healthy, manufacturing production and employment levels were less encouraging. Continued geopolitical events such as the Madrid bombings also dampened sentiment. A surge in oil prices led to concerns about inflation, and investors seemingly anticipated that the Federal Reserve Board (the “Fed”) would raise interest rates. The Fed did, indeed, raise its key short-term interest rate at its June 30 meeting to 1.25%, an increase from the 46-year low of 1%. Despite the increase, however, the Fed stressed that it would take “a measured approach” to further rate hikes. In late July, economic data released by the Commerce Department revealed further mixed signals in the form of a tepid 3.0% annual GDP rate for the second quarter and a doubling in U.S. business investment to 8.9% from 4.2%. The increase in business investment was welcomed by the markets as a positive sign of economic growth.

Sector performance within the Index was mixed. On the positive side, the energy sector (10.37% of the Index as of July 31, 2004) logged the strongest gains with a return of 10.44%, mostly due to the run-up in oil prices over the course of the reporting period. The industrials sector (9.37% of the Index as of July 31, 2004) gained 4.58%, and the utilities sector (3.66% of the Index as of July 31, 2004) rose 1.56%, both benefiting from an improving economic climate. On the negative side, the information technology sector (7.16% of the Index as of July 31, 2004) declined 14.84% during the reporting period.

Among the Fund’s ten largest holdings at July 31, 2004, performance was mixed for the reporting period. Diversified oil companies Exxon Mobil Corp. and BP PLC delivered strong gains, thanks to surging oil prices during the reporting period. Healthcare company Johnson & Johnson also posted gains during the reporting period. The largest holding in the Fund, General Electric Co. benefited from an improving global economy and posted healthy gains. Financial stocks delivered mixed results during the reporting period, with Bank of America Corp. gaining ground and Citigroup Inc. declining.


14		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Managers’ Discussion & Analysis

iSHARES^® NYSE 100 INDEX FUND

Performance as of 7/31/04

“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 (3/29/04).

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 (4/2/04), 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 7/31/04, the Fund did not have six months of performance and therefore a line graph is not presented.

The iShares NYSE 100 Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the NYSE U.S.100 Index (the “Index”). The Index measures the performance of the largest 100 U.S. companies, based on market capitalization, listed on the NYSE. The Fund invests in a representative sample of securities in the Index that are selected by the investment adviser to have a similar investment profile as the Index. From its inception on March 29, 2004 through July 31, 2004 (the “reporting period”), the Fund declined 1.32%, compared to a decline of 1.26% for the Index.

At the time of the Fund’s inception, investors were grappling with a series of mixed economic data. Although some economic indicators, including consumer sentiment and capital goods spending, were healthy, manufacturing production and employment levels were less encouraging. Continued geopolitical events such as the Madrid bombings also dampened investor sentiment. A surge in oil prices led to concerns about inflation, and investors seemingly anticipated that the Federal Reserve Board (the “Fed”) would raise interest rates. The Fed did, indeed, raise its key short-term interest rate at its June 30 meeting to 1.25%, an increase from the 46-year low of 1.00%. Despite the increase, however, the Fed stressed that it would take “a measured approach” to further rate hikes. In late July, economic data released by the Commerce Department revealed further mixed signals in the form of a tepid 3.0% annual GDP rate for the second quarter and a doubling in U.S. business investment to 8.9% from 4.2%. The increase in business investment was welcomed by the markets as a positive sign of economic growth.

Within the Index, seven of the ten sectors suffered declines during the reporting period. Bucking this performance trend, the energy sector (7.99% of the Index as of July 31, 2004) was the best performing sector, with a gain of 13.08%. Energy stocks generally benefited during the reporting period from increasing oil prices. Industrials (12.60% of the Index as of July 31, 2004) gained 8.70%. Information technology (6.58% of the Index as of July 31, 2004) declined 9.58% during the reporting period. The largest sector in the Index, financials (25.01% of the Index as of July 31, 2004) fell 4.53%. The consumer staples sector (13.60% of the Index as of July 31, 2004) declined 5.51% and the consumer discretionary sector (8.89% of the Index as of July 31, 2004) fell 6.29% during the reporting period.

The top ten holdings in the Fund represented approximately 36% of the net assets of the Fund as of July 31, 2004. Among the Fund’s ten largest holdings, performance was mixed for the reporting period. As oil prices climbed during the reporting period, diversified oil company Exxon Mobil Corp. logged the strongest gains among the ten largest holdings. Healthcare company Johnson & Johnson also posted gains. The largest holding in the Fund, General Electric Co. gained ground, benefiting from an improving global economy. Financial stocks delivered mixed results during the reporting period, with Bank of America Corp. delivering positive returns and Citigroup Inc. declining.


MANAGERS’ DISCUSSION & ANALYSIS		15

Shareholder Expenses

iSHARES^® TRUST

As a shareholder of an iShares Fund, you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of fund shares; and (2) ongoing costs, including management fees and other fund expenses. The following Example is intended to help you understand your ongoing costs (in dollars and cents) of investing in a Fund and to compare these costs with the ongoing costs of investing in other funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from February 1, 2004 to July 31, 2004.

Actual Expenses

The first line under each Fund in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line for your Fund under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line under each Fund in the table below provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of fund shares. Therefore, the second line under each Fund in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.


iShares Index Fund	Beginning Account Value (February 1, 2004)		Ending Account Value (July 31, 2004)		Annualized Expense Ratio		Expenses Paid During Period^(a) (February 1 to July 31, 2004)
Goldman Sachs Technology
Actual	$	1,000.00	$	868.40	0.50	%	$	2.32
Hypothetical (5% return before expenses)		1,000.00		1,022.40	0.50			2.51
Goldman Sachs Networking
Actual		1,000.00		779.50	0.50			2.21
Hypothetical (5% return before expenses)		1,000.00		1,022.40	0.50			2.51
Goldman Sachs Semiconductor
Actual		1,000.00		779.80	0.50			2.21
Hypothetical (5% return before expenses)		1,000.00		1,022.40	0.50			2.51
Goldman Sachs Software
Actual		1,000.00		875.80	0.50			2.33
Hypothetical (5% return before expenses)		1,000.00		1,022.40	0.50			2.51


16		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Shareholder Expenses (Continued)

iSHARES^® TRUST


iShares Index Fund	Beginning Account Value (February 1, 2004)		Ending Account Value (July 31, 2004)		Annualized Expense Ratio		Expenses Paid During Period^(a) (February 1 to July 31, 2004)
Goldman Sachs Natural Resources
Actual	$	1,000.00	$	1,123.10	0.50	%	$	2.64
Hypothetical (5% return before expenses)		1,000.00		1,022.40	0.50			2.51
MSCI EAFE
Actual		1,000.00		996.20	0.35			1.74
Hypothetical (5% return before expenses)		1,000.00		1,023.10	0.35			1.76
NYSE Composite^(b)
Actual		1,000.00		979.00	0.25			0.84
Hypothetical (5% return before expenses)		1,000.00		1,015.96	0.25			0.85
NYSE 100^(b)
Actual		1,000.00		986.80	0.20			0.68
Hypothetical (5% return before expenses)		1,000.00		1,016.13	0.20			0.69

^(a)	Expenses are calculated using each Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (182 days), and divided by the number of days in the year (366 days).

^(b)

The information represented for the iShares NYSE Composite and iShares NYSE 100 Index Funds are calculated from the dates of their commencement of operations, March 30, 2004 and March 29, 2004, respectively. Expenses for the iShares NYSE Composite and iShares NYSE 100 Index Funds are calculated using each Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (124 and 125 days for the iShares NYSE Composite and iShares NYSE 100 Index Funds, respectively), and divided by the number of days in the year (366 days).


SHAREHOLDER EXPENSES		17

Schedule of Investments

iSHARES^® GOLDMAN SACHS TECHNOLOGY INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
COMMON STOCKS – 100.03%

ADVERTISING – 0.25%
Getty Images Inc.¹	5,493	$	300,028
West Corp.^1,²	6,312		158,242

			458,270

AEROSPACE & DEFENSE – 0.05%
Titan Corp. (The)¹	8,021		96,011

			96,011

COMMERCIAL SERVICES – 1.69%
Accenture Ltd.¹	55,061		1,356,152
BearingPoint Inc.¹	18,862		155,800
ChoicePoint Inc.¹	8,415		353,430
Convergys Corp.¹	13,648		180,700
Paychex Inc.	35,928		1,103,349

			3,149,431

COMPUTERS – 23.95%
Affiliated Computer Services Inc. Class A¹^,²	11,684		606,400
Anteon International Corp.¹	3,459		107,713
Apple Computer Inc.¹	36,055		1,166,019
BISYS Group Inc. (The)^1,²	11,409		155,733
Brocade Communications Systems Inc.¹	25,085		120,910
CACI International Inc. Class A^1,²	2,730		112,230
Cadence Design Systems Inc.^1,²	25,811		347,674
Ceridian Corp.¹	14,145		254,610
Cognizant Technology Solutions Corp.¹	12,343		340,050
Computer Sciences Corp.¹	17,848		843,318
Dell Inc.¹	240,696		8,537,487
DST Systems Inc.^1,²	8,034		366,029
Electronic Data Systems Corp.	48,166		890,108
Electronics For Imaging Inc.^1,²	5,150		103,361
EMC Corp.¹	230,202		2,525,316
Gateway Inc.¹	34,742		156,339
Henry (Jack) & Associates Inc.	8,633		166,185
Hewlett-Packard Co.	290,244		5,848,417
Imation Corp.²	3,366		111,583
Intergraph Corp.¹	3,483		91,916
International Business Machines Corp.	160,297		13,957,060
Kronos Inc.^1,²	2,944		129,300
Lexmark International Inc.¹	12,361		1,093,949
Maxtor Corp.¹	23,340		109,231
Mentor Graphics Corp.^1,²	6,608		77,974
National Instruments Corp.	7,589		220,460
Network Appliance Inc.¹	33,068		638,543
PalmOne Inc.¹^,2	4,434		178,335
Perot Systems Corp. Class A^1,²	10,755		135,728
Research in Motion Ltd.¹	17,529		1,081,013
Reynolds & Reynolds Co. (The) Class A	6,172		136,401
SanDisk Corp.^1,²	15,211		369,932
Seagate Technology²	43,721		501,480
Silicon Storage Technology Inc.^1,²	8,964		59,521
Storage Technology Corp.¹	10,698		266,915
Sun Microsystems Inc.¹	316,408		1,249,812
SunGard Data Systems Inc.¹	27,603		643,426
Synopsys Inc.¹	14,763		373,356
Unisys Corp.¹	31,721		324,823
Western Digital Corp.¹	20,133		141,132

			44,539,789

DISTRIBUTION & WHOLESALE – 0.39%
CDW Corp.	7,948		511,056
Ingram Micro Inc. Class A¹	14,883		212,083

			723,139

ELECTRICAL COMPONENTS & EQUIPMENT – 0.35%
ASM Lithography Holding NV NYS¹	45,910		652,381

			652,381

ELECTRONICS – 3.08%
Agilent Technologies Inc.¹	45,803		1,090,569
Amphenol Corp. Class A¹	8,393		263,792
Arrow Electronics Inc.¹	10,846		256,616
Avnet Inc.¹	11,577		224,825
AVX Corp.	16,474		205,431
Benchmark Electronics Inc.¹	3,888		111,119
Celestica Inc. (Canada)¹	17,513		300,348
Cymer Inc.^1,²	3,564		102,073
Flextronics International Ltd.¹	50,348		632,874
Jabil Circuit Inc.¹	19,103		415,490
KEMET Corp.^1,²	8,461		85,372
Nam Tai Electronics Inc.	4,059		78,745
PerkinElmer Inc.	12,130		213,245
Plexus Corp.^1,²	4,288		48,068
Sanmina-SCI Corp.¹	49,575		363,881


18		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® GOLDMAN SACHS TECHNOLOGY INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
Solectron Corp.¹	81,765	$	449,708
Symbol Technologies Inc.	22,322		292,195
Tektronix Inc.	8,124		246,970
Trimble Navigation Ltd.¹	4,709		130,769
Vishay Intertechnology Inc.^1,²	13,958		216,349

			5,728,439

ENTERTAINMENT – 0.06%
Macrovision Corp.¹	4,628		100,150

			100,150

INTERNET – 8.92%
Akamai Technologies Inc.^1,²	11,797		176,129
Amazon.com Inc.¹	38,528		1,499,510
Ariba Inc.¹	4,431		38,505
Ask Jeeves Inc.^1,²	4,463		129,784
Avocent Corp.¹	4,668		139,760
Check Point Software Technologies Ltd.^1,²	23,828		473,939
CheckFree Corp.^1,²	8,572		257,503
CNET Networks Inc.^1,²	13,317		121,584
DoubleClick Inc.¹	12,894		66,662
EarthLink Inc.¹	14,977		147,823
eBay Inc.¹	62,526		4,897,662
IAC/InterActiveCorp^1,²	60,577		1,653,752
InfoSpace Inc.¹	2,945		110,320
Internet Security Systems Inc.^1,²	4,546		69,645
Macromedia Inc.¹	6,368		128,634
McAfee Inc.¹	15,627		280,973
Monster Worldwide Inc.^1,²	10,737		237,180
RealNetworks Inc.¹	15,726		88,695
RSA Security Inc.^1,²	5,725		106,600
Symantec Corp.¹	29,609		1,384,517
TIBCO Software Inc.^1,²	18,905		133,658
VeriSign Inc.¹	23,509		411,643
WebEx Communications Inc.^1,²	4,178		85,733
Yahoo! Inc.¹	127,998		3,942,338

			16,582,549

LEISURE TIME – 0.18%
Sabre Holdings Corp.	13,236		337,915

			337,915

MACHINERY – 0.25%
Unova Inc.^1,²	5,667		95,829
Zebra Technologies Corp. Class A¹	4,497		371,587

			467,416

SEMICONDUCTORS – 20.45%
Advanced Micro Devices Inc.^1,²	33,648		420,264
Agere Systems Inc. Class A^1,²	77,634		96,266
Agere Systems Inc. Class B¹	87,496		98,870
Altera Corp.¹	35,617		741,546
AMIS Holdings Inc.¹	7,668		112,950
Amkor Technology Inc.¹	16,789		67,995
Analog Devices Inc.	35,704		1,417,449
Applied Materials Inc.¹	160,354		2,721,207
Applied Micro Circuits Corp.¹	29,908		107,669
ASE Test Ltd.¹	9,440		62,398
Atmel Corp.¹	45,582		195,091
Axcelis Technologies Inc.^1,²	9,343		87,170
Broadcom Corp. Class A¹	23,996		848,499
Conexant Systems Inc.¹	43,680		69,451
Cree Inc.^1,²	6,974		156,078
Cypress Semiconductor Corp.^1,²	11,858		134,470
Emulex Corp.¹	7,763		83,763
Entegris Inc.¹	7,204		64,116
Fairchild Semiconductor International Inc. Class A¹	11,363		166,922
Integrated Circuit Systems Inc.¹	6,905		165,168
Integrated Device Technology Inc.^1,²	10,141		115,912
Intel Corp.	601,719		14,669,909
International Rectifier Corp.¹	6,314		247,509
Intersil Corp. Class A	13,345		245,148
KLA-Tencor Corp.¹	18,702		770,709
Lam Research Corp.^1,2	12,706		303,038
Lattice Semiconductor Corp.^1,2	11,036		54,076
Linear Technology Corp.	29,437		1,150,987
LSI Logic Corp.¹	36,242		184,472
Marvell Technology Group Ltd.¹	25,029		581,173
Maxim Integrated Products Inc.	30,653		1,474,409
Micrel Inc.^1,2	8,995		92,379
Microchip Technology Inc.	19,678		570,072
Micron Technology Inc.¹	58,089		785,944
MKS Instruments Inc.¹	5,137		75,617


SCHEDULES OF INVESTMENTS		19

Schedule of Investments (Continued)

iSHARES^® GOLDMAN SACHS TECHNOLOGY INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
National Semiconductor Corp.¹	34,137	$	585,450
Novellus Systems Inc.¹	14,072		379,944
NVIDIA Corp.¹	15,672		241,349
OmniVision Technologies Inc.^1,2	5,146		60,620
PMC-Sierra Inc.¹	16,988		201,817
QLogic Corp.¹	8,879		217,092
Rambus Inc.¹	9,843		165,067
Semtech Corp.¹	7,049		139,923
Silicon Laboratories Inc.^1,2	4,898		172,850
Skyworks Solutions Inc.¹	14,125		118,368
STMicroelectronics NV NYS²	85,710		1,599,349
Teradyne Inc.¹	18,521		316,709
Texas Instruments Inc.	164,656		3,512,112
TriQuint Semiconductor Inc.^1,2	13,511		54,720
Varian Semiconductor Equipment Associates Inc.^1,2	3,444		102,872
Vitesse Semiconductor Corp.¹	20,268		56,750
Xilinx Inc.	33,022		971,837

			38,035,525

SOFTWARE – 22.60%
Activision Inc.¹	12,806		187,608
Acxiom Corp.	8,108		178,376
Adobe Systems Inc.	22,644		955,124
Advent Software Inc.¹	3,227		51,180
Ascential Software Corp.^1,2	5,553		68,191
ATI Technologies Inc.¹	22,774		366,661
Autodesk Inc.	10,763		432,673
Automatic Data Processing Inc.	56,165		2,357,807
Avid Technology Inc.^1,2	2,996		140,033
BEA Systems Inc.¹	39,226		254,577
BMC Software Inc.¹	21,430		336,022
Borland Software Corp.¹	7,856		64,969
Certegy Inc.²	6,057		229,621
Citrix Systems Inc.¹	16,040		282,625
Cognos Inc.¹	8,980		302,446
Computer Associates International Inc.	55,361		1,397,312
Compuware Corp.¹	36,596		180,784
CSG Systems International Inc.^1,2	5,182		84,985
Electronic Arts Inc.^1,2	28,796		1,443,543
Fair Isaac Corp.	6,717		191,972
FileNET Corp.¹	3,601		68,419
First Data Corp.	82,986		3,702,005
Fiserv Inc.¹	18,548		635,454
Global Payments Inc.²	3,562		162,605
Hyperion Solutions Corp.¹	3,691		151,405
Informatica Corp.¹	8,122		49,301
Intuit Inc.¹	18,729		701,214
Keane Inc.^1,2	6,024		88,974
Mercury Interactive Corp.¹	8,716		318,657
Microsoft Corp.	645,619		18,374,317
NetIQ Corp.^1,2	5,517		52,577
Novell Inc.¹	36,404		249,003
Open Text Corp.^1,2	4,963		125,911
Oracle Corp.¹	494,118		5,193,180
Parametric Technology Corp.¹	25,362		115,143
PeopleSoft Inc.¹	34,718		625,618
Quest Software Inc.^1,2	9,180		110,711
Red Hat Inc.^1,2	17,280		295,834
Siebel Systems Inc.¹	47,764		384,978
Sybase Inc.¹	9,351		136,244
Take-Two Interactive Software Inc.^1,2	4,165		130,448
THQ Inc.^1,2	3,585		68,294
Veritas Software Corp.¹	40,677		775,304

			42,022,105

TELECOMMUNICATIONS – 17.81%
Adaptec Inc.¹	10,041		75,207
ADC Telecommunications Inc.^1,2	76,780		184,272
ADTRAN Inc.	7,663		204,679
Advanced Fibre Communications Inc.¹	8,452		141,656
Amdocs Ltd.¹	20,561		446,174
Andrew Corp.¹	15,119		164,041
Aspect Communications Corp.¹	7,742		65,575
Avaya Inc.¹	42,007		615,403
Black Box Corp.²	1,669		63,422
CIENA Corp.¹	53,044		149,584
Cisco Systems Inc.¹	643,094		13,414,941
Comverse Technology Inc.¹	18,615		317,572
Corning Inc.¹	130,264		1,610,063
Extreme Networks Inc.¹	11,765		63,766
Foundry Networks Inc.¹	13,001		133,390
Harris Corp.	6,334		300,738
InterDigital Communications Corp.^1,2	5,151		99,105


20		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® GOLDMAN SACHS TECHNOLOGY INDEX FUND

July 31, 2004


*Security*	Shares or Principal		*Value*
JDS Uniphase Corp.¹		131,139	$	452,430
Juniper Networks Inc.¹		50,471		1,158,814
Lucent Technologies Inc.^1,2		407,706		1,243,503
Motorola Inc.		222,969		3,551,896
Newport Corp.¹		3,916		56,155
Nortel Networks Corp. (Canada)^1,2		406,009		1,485,993
Polycom Inc.¹		9,523		183,603
QUALCOMM Inc.		77,062		5,323,443
RF Micro Devices Inc.^1,2		17,953		106,282
Scientific-Atlanta Inc.		14,535		446,951
Sonus Networks Inc.¹		23,487		119,549
Sycamore Networks Inc.¹		26,527		99,211
Tekelec^1,2		5,975		116,094
Tellabs Inc.^1,2		39,582		352,676
3Com Corp.¹		36,742		181,138
UTStarcom Inc.^1,2		10,720		195,747

				33,123,073

TOTAL COMMON STOCKS (Cost: $191,308,122)				186,016,193

SHORT-TERM INVESTMENTS – 7.11%

MONEY MARKET FUNDS – 1.79%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^3,4		2,084,499		2,084,499
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^3,4		1,111,572		1,111,572
BlackRock Temp Cash Money Market Fund³		51,013		51,013
Short-Term Investment Co. - Prime Money Market Portfolio³		86,941		86,941

				3,334,025

FLOATING RATE NOTES – 1.72%
Beta Finance Inc.
1.30%, 05/04/05^3,5	$	60,631		60,622
1.31%, 10/12/04^3,5		50,526		50,525
1.34%, 09/15/04^3,5		101,052		101,051
1.42%, 03/15/05^3,5		50,526		50,551
1.48%, 08/23/04^3,5		50,526		50,528
*Security*	*Principal*		*Value*
Canadian Imperial Bank of Commerce
1.24%, 10/07/04³	$	75,789	$	75,787
1.38%, 11/22/04³		25,263		25,264
1.40%, 10/29/04³		101,052		101,052
CC USA Inc.
1.30%, 05/04/05^3,5		101,052		101,037
1.61%, 07/29/05^3,5		101,052		101,022
Depfa Bank PLC
1.27%, 06/15/05³		101,052		101,052
Dorada Finance Inc.
1.61%, 07/29/05^3,5		83,873		83,848
Five Finance Inc.
1.42%, 04/29/05^3,5		80,842		80,836
HBOS Treasury Services PLC
1.24%, 04/01/05³		64,673		64,669
1.58%, 04/22/05³		101,052		101,052
K2 USA LLC
1.34%, 08/16/04^3,5		25,263		25,263
1.41%, 09/27/04^3,5		109,136		109,134
1.49%, 06/10/05^3,5		101,052		101,041
1.61%, 07/25/05^3,5		50,526		50,516
Links Finance LLC
1.33%, 04/15/05³		101,052		101,038
1.68%, 04/25/05³		101,052		101,100
Nationwide Building Society
1.59%, 07/28/05^3,5		101,052		101,052
1.63%, 12/09/04³		83,873		83,383
Northern Rock PLC
1.56%, 01/13/05^3,5		95,999		95,999
Permanent Financing PLC
1.31%, 03/10/05³		101,052		101,052
1.32%, 12/10/04³		50,526		50,527
1.34%, 06/10/05³		45,473		45,474
Sigma Finance Inc.
1.35%, 11/15/04³		101,052		101,050
1.52%, 10/07/04³		101,052		101,048
Tango Finance Corp.
1.20%, 05/17/05^3,5		83,873		83,870
1.23%, 02/25/05^3,5		56,589		56,583
1.32%, 04/07/05^3,5		37,086		37,084
1.34%, 01/18/05^3,5		44,463		44,461
1.42%, 07/25/05^3,5		101,052		101,043


SCHEDULES OF INVESTMENTS		21

Schedule of Investments (Continued)

iSHARES^® GOLDMAN SACHS TECHNOLOGY INDEX FUND

July 31, 2004


*Security*	*Principal*		*Value*
WhistleJacket Capital LLC
1.26%, 10/20/04^3,5	$	25,031	$	24,961
1.34%, 09/15/04^3,5		50,526		50,525
1.38%, 07/15/05^3,5		75,789		75,774
1.48%, 06/15/05^3,5		50,526		50,516
White Pine Finance LLC
1.21%, 05/20/05^3,5		45,473		45,470
1.33%, 04/15/05^3,5		75,789		75,778
1.33%, 07/05/05^3,5		50,526		50,516
1.34%, 11/15/04^3,5		60,631		60,632
1.35%, 06/15/05^3,5		41,431		41,431
1.40%, 08/26/04^3,5		50,526		50,525
1.55%, 07/11/05^3,5		25,263		25,260

				3,191,002

COMMERCIAL PAPER – 1.30%
Alpine Securitization Corp.
1.31%, 08/12/04³		50,526		50,508
Amsterdam Funding Corp.
1.30%, 08/13/04³		75,789		75,759
1.33%, 08/16/04³		101,052		101,000
1.35%, 08/20/04³		30,316		30,295
1.37%, 08/24/04³		35,368		35,339
Barton Capital Corp.
1.29%, 08/10/04³		50,526		50,512
1.30%, 08/13/04³		41,534		41,518
1.35%, 08/18/04³		25,263		25,248
Blue Ridge Asset Funding Corp.
1.29%, 08/06/04³		50,526		50,519
Corporate Asset Funding
1.42%, 09/03/04³		30,316		30,277
CRC Funding LLC
1.42%, 09/03/04³		50,526		50,462
Edison Asset Securitization
1.07%, 09/21/04³		50,526		50,451
1.45%, 11/09/04³		101,052		100,649
1.59%, 12/02/04³		101,052		100,508
Falcon Asset Securitization Corp.
1.29%, 08/09/04³		95,999		95,975
1.30%, 08/03/04³		50,526		50,524
1.34%, 08/19/04³		50,526		50,494
1.37%, 08/24/04³		40,421		40,387
Ford Credit Auto Receivables
1.85%, 01/14/05³		50,526		50,098
GIRO Funding US Corp.
1.55%, 10/15/04³		66,265		66,054
Grampian Funding LLC
1.26%, 10/22/04³		101,052		100,767
1.44%, 10/27/04³		101,052		100,704
1.59%, 11/30/04³		50,526		50,258
Jupiter Securitization Corp.
1.30%, 08/12/04³		50,526		50,508
1.37%, 08/20/04³		67,605		67,558
Park Avenue Receivables Corp.
1.35%, 08/19/04³		50,526		50,494
Preferred Receivables Funding Corp.
1.29%, 08/05/04³		46,674		46,669
1.36%, 08/23/04³		50,526		50,486
Receivables Capital Corp.
1.30%, 08/12/04³		35,368		35,355
1.34%, 08/16/04³		6,043		6,040
1.35%, 08/18/04³		45,473		45,446
1.35%, 08/19/04³		17,179		17,168
Scaldis Capital LLC
1.34%, 08/16/04³		101,052		100,999
1.37%, 08/20/04³		15,158		15,147
1.40%, 08/25/04³		126,315		126,202
Sydney Capital Corp.
1.25%, 10/22/04³		33,630		33,536
1.31%, 08/12/04³		40,421		40,406
Thames Asset Global Securitization No. 1 Inc.
1.30%, 08/12/04³		53,329		53,310
1.34%, 08/16/04³		28,295		28,280
1.36%, 08/20/04³		75,789		75,737
1.37%, 08/19/04³		28,227		28,209
1.37%, 08/20/04³		13,137		13,128
Windmill Funding Corp.
1.29%, 08/06/04³		126,315		126,291

				2,409,275


22		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® GOLDMAN SACHS TECHNOLOGY INDEX FUND

July 31, 2004


*Security*	*Principal*		*Value*
TIME DEPOSITS – 1.13%
Abbey National Treasury Services PLC
1.25%, 01/06/05³	$	101,052	$	101,052
1.33%, 02/10/05³		50,526		50,522
1.39%, 02/02/05³		50,526		50,522
1.39%, 04/08/05³		70,736		70,729
1.40%, 10/25/04³		101,052		101,049
Bank of New York
1.39%, 11/01/04³		101,052		101,049
1.60%, 12/03/04³		25,263		25,259
Bank of Nova Scotia
1.13%, 10/06/04³		101,052		101,052
1.24%, 10/07/04³		75,789		75,788
1.42%, 10/29/04³		75,789		75,790
National City Bank (Cleveland, Ohio)
1.25%, 01/06/05³		101,052		101,054
1.35%, 06/10/05³		50,526		50,540
1.36%, 06/23/05³		101,052		101,025
Norddeutsche Landesbank
1.59%, 07/27/05³		101,052		101,017
Nordea Bank PLC
2.11%, 06/07/05³		101,052		101,035
Prudential Funding LLC
1.60%, 12/01/04³		50,526		50,254
Toronto-Dominion Bank
1.22%, 03/23/05³		176,841		176,821
1.34%, 02/10/05³		40,421		40,418
1.41%, 11/01/04³		75,789		75,787
1.77%, 05/10/05³		50,526		50,522
1.90%, 05/11/05³		50,526		50,522
UBS Finance (Delaware)
1.10%, 09/08/04³		101,052		100,938
1.11%, 12/17/04³		151,578		150,938
1.13%, 08/09/04³		101,052		101,030
1.14%, 09/29/04³		101,052		100,867

				2,105,580

REPURCHASE AGREEMENTS – 0.68%
Banc of America Securities LLC
1.34%, 08/02/04^3,6		262,735		262,735
Bank of America, N.A.
1.37%, 08/02/04^3,6		505,260		505,260
Goldman Sachs & Co.
1.37%, 08/02/04^3,6		505,260		505,260

				1,273,255

U.S. GOVERNMENT AGENCY NOTES – 0.29%
Federal Home Loan Mortgage Corp.
1.28%, 08/19/04³		40,421		40,396
1.63%, 04/15/05³		70,736		70,895
1.80%, 01/18/05³		46,989		46,592
1.80%, 01/19/05³		50,526		50,097
2.06%, 05/31/05³		50,377		49,507
Federal National Mortgage Association
1.28%, 08/20/04³		131,368		131,284
2.33%, 07/22/05³		151,578		148,113

				536,884

MEDIUM-TERM NOTES–0.20%
CC USA Inc.
1.29%, 04/15/05^3,5		101,052		101,045
1.51%, 02/15/05^3,5		65,684		65,739
Dorada Finance Inc.
1.24%, 08/09/04^3,5		25,263		25,263
1.48%, 01/18/05^3,5		75,789		75,787
K2 USA LLC
1.46%, 01/12/05^3,5		50,526		50,524
Sigma Finance Inc.
1.24%, 08/06/04³		25,263		25,263
WhistleJacket Capital LLC
1.32%, 02/04/05^3,5		25,263		25,260

				368,881

TOTAL SHORT-TERM INVESTMENTS (Cost: $13,218,902)				13,218,902

TOTAL INVESTMENTS IN SECURITIES – 107.14% (Cost: $204,527,024)				199,235,095

Other Assets, Less Liabilities – (7.14%)				(13,269,097	)

NET ASSETS – 100.00%			$	185,965,998

NYS - New York Registered Shares

¹	Non-income earning security.

²	All or a portion of this security represents a security on loan. See Note 5.

³	All or a portion of this security represents an investment of securities lending collateral. See Note 5.

⁴	Issuer is an affiliate of the Fund’s investment adviser. See Note 2.

⁵	Security exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

⁶	Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.61% to 7.00% and maturity dates ranging from 7/1/13 to 7/1/34.


SCHEDULES OF INVESTMENTS		23

Schedule of Investments (Continued)

iSHARES^® GOLDMAN SACHS TECHNOLOGY INDEX FUND

July 31, 2004

INDUSTRY DIVERSIFICATION


*Industry*	*% of* *Net Assets*		*Value*
Computers	23.95	%	$	44,539,789
Software	22.60			42,022,105
Semiconductors	20.45			38,035,525
Telecommunications	17.81			33,123,073
Internet	8.92			16,582,549
Electronics	3.08			5,728,439
Commercial Services	1.69			3,149,431
Distribution & Wholesale	0.39			723,139
Electrical Components & Equipment	0.35			652,381
Machinery	0.25			467,416
Advertising	0.25			458,270
Leisure Time	0.18			337,915
Entertainment	0.06			100,150
Aerospace & Defense	0.05			96,011
Short-Term and Other Net Assets	(0.03	)		(50,195	)

TOTAL	100.00	%	$	185,965,998

See notes to financial statements.


24		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® GOLDMAN SACHS NETWORKING INDEX FUND

July 31, 2004


*Security*	*Shares*		*Value*
COMMON STOCKS – 100.02%

COMPUTERS – 4.93%
Research in Motion Ltd.¹		117,510	$	7,246,842

				7,246,842

SEMICONDUCTORS – 13.03%
Agere Systems Inc. Class A^1,2		675,022		837,027
Agere Systems Inc. Class B¹		792,555		895,587
Applied Micro Circuits Corp.¹		252,366		908,518
Broadcom Corp. Class A¹		208,607		7,376,344
Conexant Systems Inc.^1,2		392,580		624,202
Marvell Technology Group Ltd.¹		224,666		5,216,745
PMC-Sierra Inc.¹		150,618		1,789,342
Skyworks Solutions Inc.¹		119,891		1,004,687
Vitesse Semiconductor Corp.¹		179,375		502,250

				19,154,702

TELECOMMUNICATIONS – 82.06%
ADC Telecommunications Inc.¹		700,000		1,680,000
ADTRAN Inc.²		72,818		1,944,969
Advanced Fibre Communications Inc.¹		73,880		1,238,229
Avaya Inc.¹		378,679		5,547,647
CIENA Corp.¹		402,067		1,133,829
Cisco Systems Inc.¹		351,084		7,323,612
Comverse Technology Inc.¹		176,452		3,010,271
Corning Inc.¹		1,145,838		14,162,558
Extreme Networks Inc.^1,2		111,903		606,514
Foundry Networks Inc.¹		125,888		1,291,611
InterDigital Communications Corp.^1,2		40,735		783,741
JDS Uniphase Corp.^1,2		1,191,594		4,110,999
Juniper Networks Inc.¹		319,793		7,342,447
Lucent Technologies Inc.^1,2		3,685,427		11,240,552
Motorola Inc.		938,968		14,957,760
Nortel Networks Corp. (Canada)¹		3,200,342		11,713,252
Polycom Inc.¹		90,170		1,738,478
QUALCOMM Inc.		259,280		17,911,062
Scientific-Atlanta Inc.		138,430		4,256,723
Sonus Networks Inc.^1,2		203,138		1,033,972
Sycamore Networks Inc.¹		218,796		818,297
Tellabs Inc.^1,2		368,729		3,285,375
3Com Corp.¹		369,612		1,822,187
UTStarcom Inc.^1,2		90,594		1,654,247

				120,608,332

TOTAL COMMON STOCKS (Cost: $169,981,003)				147,009,876

*Security*	Shares or Principal		*Value*
SHORT-TERM INVESTMENTS – 13.42%

MONEY MARKET FUNDS – 3.35%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^3,4		3,054,244	$	3,054,244
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^3,4		1,664,659		1,664,659
BlackRock Temp Cash Money Market Fund³		76,396		76,396
Short-Term Investment Co. - Prime Money Market Portfolio³		130,201		130,201

				4,925,500

FLOATING RATE NOTES – 3.25%
Beta Finance Inc.
1.30%, 05/04/05^3,5	$	90,800		90,786
1.31%, 10/12/04^3,5		75,666		75,665
1.34%, 09/15/04^3,5		151,333		151,331
1.42%, 03/15/05^3,5		75,666		75,704
1.48%, 08/23/04^3,5		75,666		75,670
Canadian Imperial Bank of Commerce
1.24%, 10/07/04³		113,500		113,496
1.38%, 11/22/04³		37,833		37,834
1.40%, 10/29/04³		151,333		151,332
CC USA Inc.
1.30%, 05/04/05^3,5		151,333		151,310
1.61%, 07/29/05^3,5		151,333		151,288
Depfa Bank PLC
1.27%, 06/15/05³		151,333		151,333
Dorada Finance Inc.
1.61%, 07/29/05^3,5		125,606		125,569
Five Finance Inc.
1.42%, 04/29/05^3,5		121,066		121,057
HBOS Treasury Services PLC
1.24%, 04/01/05³		96,853		96,846
1.58%, 04/22/05³		151,333		151,333
K2 USA LLC
1.34%, 08/16/04^3,5		37,833		37,833
1.41%, 09/27/04^3,5		163,439		163,436
1.49%, 06/10/05^3,5		151,333		151,317
1.61%, 07/25/05^3,5		75,666		75,651


SCHEDULES OF INVESTMENTS		25

Schedule of Investments (Continued)

iSHARES^® GOLDMAN SACHS NETWORKING INDEX FUND

July 31, 2004


*Security*	*Principal*		*Value*
Links Finance LLC
1.33%, 04/15/05³	$	151,333	$	151,311
1.68%, 04/25/05³		151,333		151,404
Nationwide Building Society
1.59%, 07/28/05^3,5		151,333		151,333
1.63%, 12/09/04³		125,606		124,872
Northern Rock PLC
1.56%, 01/13/05^3,5		143,766		143,766
Permanent Financing PLC
1.31%, 03/10/05³		151,333		151,333
1.32%, 12/10/04³		75,666		75,666
1.34%, 06/10/05³		68,100		68,100
Sigma Finance Inc.
1.35%, 11/15/04³		151,333		151,329
1.52%, 10/07/04³		151,333		151,327
Tango Finance Corp.
1.20%, 05/17/05^3,5		125,606		125,601
1.23%, 02/25/05^3,5		84,746		84,737
1.32%, 04/07/05^3,5		55,539		55,535
1.34%, 01/18/05^3,5		66,586		66,583
1.42%, 07/25/05^3,5		151,333		151,318
WhistleJacket Capital LLC
1.26%, 10/20/04^3,5		37,485		37,381
1.34%, 09/15/04^3,5		75,666		75,665
1.38%, 07/15/05^3,5		113,500		113,478
1.48%, 06/15/05^3,5		75,666		75,651
White Pine Finance LLC
1.21%, 05/20/05^3,5		68,100		68,094
1.33%, 04/15/05^3,5		113,500		113,484
1.33%, 07/05/05^3,5		75,666		75,651
1.34%, 11/15/04^3,5		90,800		90,800
1.35%, 06/15/05^3,5		62,046		62,046
1.40%, 08/26/04^3,5		75,666		75,666
1.55%, 07/11/05^3,5		37,833		37,829

				4,778,751

COMMERCIAL PAPER – 2.45%
Alpine Securitization Corp.
1.31%, 08/12/04³		75,666		75,639
Amsterdam Funding Corp.
1.30%, 08/13/04³		113,500		113,454
1.33%, 08/16/04³		151,333		151,255
1.35%, 08/20/04³		45,400		45,369
1.37%, 08/24/04³		52,966		52,922
Barton Capital Corp.
1.29%, 08/10/04³		75,666		75,645
1.30%, 08/13/04³		62,201		62,176
1.35%, 08/18/04³		37,833		37,810
Blue Ridge Asset Funding Corp.
1.29%, 08/06/04³		75,666		75,655
Corporate Asset Funding
1.42%, 09/03/04³		45,400		45,342
CRC Funding LLC
1.42%, 09/03/04³		75,666		75,571
Edison Asset Securitization
1.07%, 09/21/04³		75,666		75,554
1.45%, 11/09/04³		151,333		150,729
1.59%, 12/02/04³		151,333		150,517
Falcon Asset Securitization Corp.
1.29%, 08/09/04³		143,766		143,730
1.30%, 08/03/04³		75,666		75,664
1.34%, 08/19/04³		75,666		75,618
1.37%, 08/24/04³		60,533		60,482
Ford Credit Auto Receivables
1.85%, 01/14/05³		75,666		75,025
GIRO Funding US Corp.
1.55%, 10/15/04³		99,236		98,920
Grampian Funding LLC
1.26%, 10/22/04³		151,333		150,905
1.44%, 10/27/04³		151,333		150,812
1.59%, 11/30/04³		75,666		75,266
Jupiter Securitization Corp.
1.30%, 08/12/04³		75,666		75,639
1.37%, 08/20/04³		101,243		101,174
Park Avenue Receivables Corp.
1.35%, 08/19/04³		75,666		75,619
Preferred Receivables Funding Corp.
1.29%, 08/05/04³		69,898		69,890
1.36%, 08/23/04³		75,666		75,607
Receivables Capital Corp.
1.30%, 08/12/04³		52,966		52,947
1.34%, 08/16/04³		9,050		9,045
1.35%, 08/18/04³		68,100		68,059
1.35%, 08/19/04³		25,727		25,710


26		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® GOLDMAN SACHS NETWORKING INDEX FUND

July 31, 2004


*Security*	*Principal*		*Value*
Scaldis Capital LLC
1.34%, 08/16/04³	$	151,333	$	151,254
1.37%, 08/20/04³		22,700		22,684
1.40%, 08/25/04³		189,166		188,997
Sydney Capital Corp.
1.25%, 10/22/04³		50,364		50,222
1.31%, 08/12/04³		60,533		60,511
Thames Asset Global Securitization No. 1 Inc.
1.30%, 08/12/04³		79,864		79,835
1.34%, 08/16/04³		42,373		42,351
1.36%, 08/20/04³		113,500		113,422
1.37%, 08/19/04³		42,272		42,245
1.37%, 08/20/04³		19,673		19,660
Windmill Funding Corp.
1.29%, 08/06/04³		189,166		189,138

				3,608,069

TIME DEPOSITS – 2.14%
Abbey National Treasury Services PLC
1.25%, 01/06/05³		151,333		151,333
1.33%, 02/10/05³		75,666		75,660
1.39%, 02/02/05³		75,666		75,661
1.39%, 04/08/05³		105,933		105,922
1.40%, 10/25/04³		151,333		151,327
Bank of New York
1.39%, 11/01/04³		151,333		151,329
1.60%, 12/03/04³		37,833		37,827
Bank of Nova Scotia
1.13%, 10/06/04³		151,333		151,333
1.24%, 10/07/04³		113,500		113,497
1.42%, 10/29/04³		113,500		113,502
National City Bank (Cleveland, Ohio)
1.25%, 01/06/05³		151,333		151,336
1.35%, 06/10/05³		75,666		75,687
1.36%, 06/23/05³		151,333		151,292
Norddeutsche Landesbank
1.59%, 07/27/05³		151,333		151,280
Nordea Bank PLC
2.11%, 06/07/05³		151,333		151,307
Prudential Funding LLC
1.60%, 12/01/04³		75,666		75,259
Toronto-Dominion Bank
1.22%, 03/23/05³		264,832		264,803
1.34%, 02/10/05³		60,533		60,528
1.41%, 11/01/04³		113,500		113,497
1.77%, 05/10/05³		75,666		75,661
1.90%, 05/11/05³		75,666		75,661
UBS Finance (Delaware)
1.10%, 09/08/04³		151,333		151,162
1.11%, 12/17/04³		226,999		226,040
1.13%, 08/09/04³		151,333		151,299
1.14%, 09/29/04³		151,333		151,056

				3,153,259

REPURCHASE AGREEMENTS – 1.30%
Banc of America Securities LLC
1.34%, 08/02/04^3,6		393,465		393,465
Bank of America, N.A.
1.37%, 08/02/04^3,6		756,663		756,663
Goldman Sachs & Co.
1.37%, 08/02/04^3,6		756,663		756,663

				1,906,791

U.S. GOVERNMENT AGENCY NOTES – 0.55%
Federal Home Loan Mortgage Corp.
1.28%, 08/19/04³		60,533		60,496
1.63%, 04/15/05³		105,933		106,170
1.80%, 01/18/05³		70,370		69,775
1.80%, 01/19/05³		75,666		75,023
2.06%, 05/31/05³		75,444		74,140
Federal National Mortgage Association
1.28%, 08/20/04³		196,732		196,607
2.33%, 07/22/05³		226,999		221,809

				804,020

MEDIUM-TERM NOTES – 0.38%
CC USA Inc.
1.29%, 04/15/05^3,5		151,333		151,322
1.51%, 02/15/05^3,5		98,366		98,449
Dorada Finance Inc.
1.24%, 08/09/04^3,5		37,833		37,833
1.48%, 01/18/05^3,5		113,500		113,497
K2 USA LLC
1.46%, 01/12/05^3,5		75,666		75,663


SCHEDULES OF INVESTMENTS		27

Schedule of Investments (Continued)

iSHARES^® GOLDMAN SACHS NETWORKING INDEX FUND

July 31, 2004


*Security*	*Shares*		*Value*
Sigma Finance Inc.
1.24%, 08/06/04³	$	37,833	$	37,833
WhistleJacket Capital LLC
1.32%, 02/04/05^3,5		37,833		37,829

				552,426

TOTAL SHORT-TERM INVESTMENTS (Cost: $19,728,816)				19,728,816

TOTAL INVESTMENTS IN SECURITIES – 113.44% (Cost: $189,709,819)				166,738,692

Other Assets, Less Liabilities – (13.44%)				(19,753,121	)

NET ASSETS – 100.00%			$	146,985,571

¹	Non-income earning security.

²	All or a portion of this security represents a security on loan. See Note 5.

³	All or a portion of this security represents an investment of securities lending collateral. See Note 5.

⁴	Issuer is an affiliate of the Fund’s investment adviser. See Note 2.

⁵	Security exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

⁶	Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.61% to 7.00% and maturity dates ranging from 7/1/13 to 7/1/34.

INDUSTRY DIVERSIFICATION


*Industry*	*% of* *Net Assets*		*Value*
Telecommunications	82.06	%	$	120,608,332
Semiconductors	13.03			19,154,702
Computers	4.93			7,246,842
Short-Term and Other Net Assets	(0.02	)		(24,305	)

TOTAL	100.00	%	$	146,985,571

See notes to financial statements.


28		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® GOLDMAN SACHS SEMICONDUCTOR INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
COMMON STOCKS – 99.76%

COMPUTERS – 1.37%
SanDisk Corp.^1,2	69,964	$	1,701,524

			1,701,524

ELECTRICAL COMPONENTS & EQUIPMENT – 2.40%
ASM Lithography Holding NV NYS^1,2	209,147		2,971,979

			2,971,979

ELECTRONICS – 0.37%
Cymer Inc.^1,2	15,969		457,352

			457,352

SEMICONDUCTORS – 85.98%
Advanced Micro Devices Inc.^1,2	153,256		1,914,167
Agere Systems Inc. Class A^1,2	350,432		434,536
Altera Corp.¹	162,264		3,378,336
AMIS Holdings Inc.¹	35,772		526,922
Amkor Technology Inc.¹	75,890		307,354
Analog Devices Inc.	154,957		6,151,793
Applied Materials Inc.¹	656,131		11,134,543
Applied Micro Circuits Corp.¹	135,013		486,047
Atmel Corp.¹	206,503		883,833
Axcelis Technologies Inc.^1,2	43,193		402,991
Broadcom Corp. Class A¹	109,685		3,878,462
Conexant Systems Inc.¹	201,309		320,081
Cypress Semiconductor Corp.^1,2	53,611		607,949
Entegris Inc.^1,2	31,724		282,344
Fairchild Semiconductor International Inc. Class A¹	51,796		760,883
Integrated Circuit Systems Inc.¹	31,535		754,317
Integrated Device Technology Inc.^1,2	45,796		523,448
Intel Corp.	431,568		10,521,628
International Rectifier Corp.¹	28,591		1,120,767
Intersil Corp. Class A	60,634		1,113,847
KLA-Tencor Corp.¹	85,212		3,511,586
Lam Research Corp.^1,2	58,060		1,384,731
Lattice Semiconductor Corp.^1,2	49,152		240,845
Linear Technology Corp.	134,137		5,244,757
LSI Logic Corp.¹	165,293		841,341
Marvell Technology Group Ltd.¹	114,642		2,661,987
Maxim Integrated Products Inc.	139,710		6,720,051
Micrel Inc.^1,2	40,112		411,950
Microchip Technology Inc.	89,627		2,596,494
Micron Technology Inc.¹	264,647		3,580,674
MKS Instruments Inc.^1,2	23,249		342,225
National Semiconductor Corp.¹	155,504		2,666,894
Novellus Systems Inc.¹	64,077		1,730,079
NVIDIA Corp.¹	71,893		1,107,152
PMC-Sierra Inc.¹	76,735		911,612
Rambus Inc.¹	44,437		745,208
Semtech Corp.¹	32,301		641,175
Silicon Laboratories Inc.^1,2	22,317		787,567
Skyworks Solutions Inc.¹	65,037		545,010
STMicroelectronics NV NYS²	390,663		7,289,772
Teradyne Inc.^1,2	84,059		1,437,409
Texas Instruments Inc.	485,979		10,365,932
TriQuint Semiconductor Inc.^1,2	59,135		239,497
Varian Semiconductor Equipment Associates Inc.^1,2	15,772		471,110
Vitesse Semiconductor Corp.¹	94,304		264,051
Xilinx Inc.	150,476		4,428,509

			106,671,866

SOFTWARE – 1.34%
ATI Technologies Inc.¹	103,682		1,669,280

			1,669,280

TELECOMMUNICATIONS – 8.30%
Motorola Inc.	616,203		9,816,114
RF Micro Devices Inc.^1,2	80,731		477,928

			10,294,042

TOTAL COMMON STOCKS (Cost: $153,372,689)			123,766,043

SHORT-TERM INVESTMENTS – 11.86%

MONEY MARKET FUNDS – 2.98%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^3,4	2,300,074		2,300,074
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^3,4	1,239,756		1,239,756
BlackRock Temp Cash Money Market Fund³	56,896		56,896
Short-Term Investment Co. - Prime Money Market Portfolio³	96,967		96,967

			3,693,693


SCHEDULES OF INVESTMENTS		29

Schedule of Investments (Continued)

iSHARES^® GOLDMAN SACHS SEMICONDUCTOR INDEX FUND

July 31, 2004


*Security*	*Principal*		*Value*
FLOATING RATE NOTES – 2.87%
Beta Finance Inc.
1.30%, 05/04/05^3,5	$	67,623	$	67,613
1.31%, 10/12/04^3,5		56,353		56,351
1.34%, 09/15/04^3,5		112,705		112,704
1.42%, 03/15/05^3,5		56,353		56,381
1.48%, 08/23/04^3,5		56,353		56,355
Canadian Imperial Bank of Commerce
1.24%, 10/07/04³		84,529		84,527
1.38%, 11/22/04³		28,176		28,177
1.40%, 10/29/04³		112,705		112,704
CC USA Inc.
1.30%, 05/04/05^3,5		112,705		112,688
1.61%, 07/29/05^3,5		112,705		112,672
Depfa Bank PLC
1.27%, 06/15/05³		112,705		112,705
Dorada Finance Inc.
1.61%, 07/29/05^3,5		93,545		93,517
Five Finance Inc.
1.42%, 04/29/05^3,5		90,164		90,157
HBOS Treasury Services PLC
1.24%, 04/01/05³		72,131		72,126
1.58%, 04/22/05³		112,705		112,705
K2 USA LLC
1.34%, 08/16/04^3,5		28,176		28,176
1.41%, 09/27/04^3,5		121,722		121,719
1.49%, 06/10/05^3,5		112,705		112,693
1.61%, 07/25/05^3,5		56,353		56,342
Links Finance LLC
1.33%, 04/15/05³		112,705		112,690
1.68%, 04/25/05³		112,705		112,759
Nationwide Building Society
1.59%, 07/28/05^3,5		112,705		112,705
1.63%, 12/09/04³		93,545		92,999
Northern Rock PLC
1.56%, 01/13/05^3,5		107,070		107,070
Permanent Financing PLC
1.31%, 03/10/05³		112,705		112,705
1.32%, 12/10/04³		56,353		56,353
1.34%, 06/10/05³		50,717		50,718
Sigma Finance Inc.
1.35%, 11/15/04³		112,705		112,703
1.52%, 10/07/04³		112,705		112,701
Tango Finance Corp.
1.20%, 05/17/05^3,5		93,545		93,542
1.23%, 02/25/05^3,5		63,115		63,108
1.32%, 04/07/05^3,5		41,363		41,360
1.34%, 01/18/05^3,5		49,590		49,588
1.42%, 07/25/05^3,5		112,705		112,694
WhistleJacket Capital LLC
1.26%, 10/20/04^3,5		27,917		27,840
1.34%, 09/15/04^3,5		56,353		56,352
1.38%, 07/15/05^3,5		84,529		84,512
1.48%, 06/15/05^3,5		56,353		56,341
White Pine Finance LLC
1.21%, 05/20/05^3,5		50,717		50,713
1.33%, 04/15/05^3,5		84,529		84,517
1.33%, 07/05/05^3,5		56,353		56,341
1.34%, 11/15/04^3,5		67,623		67,623
1.35%, 06/15/05^3,5		46,209		46,209
1.40%, 08/26/04^3,5		56,343		56,343
1.55%, 07/11/05^3,5		28,176		28,173

				3,558,971

COMMERCIAL PAPER – 2.17%
Alpine Securitization Corp.
1.31%, 08/12/04³		56,353		56,332
Amsterdam Funding Corp.
1.30%, 08/13/04³		84,529		84,495
1.33%, 08/16/04³		112,705		112,647
1.35%, 08/20/04³		33,812		33,789
1.37%, 08/24/04³		39,447		39,414
Barton Capital Corp.
1.29%, 08/10/04³		56,353		56,337
1.30%, 08/13/04³		46,324		46,306
1.35%, 08/18/04³		28,176		28,159
Blue Ridge Asset Funding Corp.
1.29%, 08/06/04³		56,353		56,344
Corporate Asset Funding
1.42%, 09/03/04³		33,812		33,769
CRC Funding LLC
1.42%, 09/03/04³		56,353		56,281


30		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® GOLDMAN SACHS SEMICONDUCTOR INDEX FUND

July 31, 2004


*Security*	*Principal*		*Value*
Edison Asset Securitization
1.07%, 09/21/04³	$	56,353	$	56,269
1.45%, 11/09/04³		112,705		112,256
1.59%, 12/02/04³		112,705		112,098
Falcon Asset Securitization Corp.
1.29%, 08/09/04³		107,070		107,044
1.30%, 08/03/04³		56,353		56,351
1.34%, 08/19/04³		56,353		56,317
1.37%, 08/24/04³		45,082		45,045
Ford Credit Auto Receivables
1.85%, 01/14/05³		56,353		55,875
GIRO Funding US Corp.
1.55%, 10/15/04³		73,906		73,671
Grampian Funding LLC
1.26%, 10/22/04³		112,705		112,387
1.44%, 10/27/04³		112,705		112,317
1.59%, 11/30/04³		56,353		56,054
Jupiter Securitization Corp.
1.30%, 08/12/04³		56,353		56,333
1.37%, 08/20/04³		75,401		75,350
Park Avenue Receivables Corp.
1.35%, 08/19/04³		56,353		56,317
Preferred Receivables Funding Corp.
1.29%, 08/05/04³		52,056		52,051
1.36%, 08/23/04³		56,353		56,308
Receivables Capital Corp.
1.30%, 08/12/04³		39,447		39,433
1.34%, 08/16/04³		6,740		6,736
1.35%, 08/18/04³		50,717		50,687
1.35%, 08/19/04³		19,160		19,148
Scaldis Capital LLC
1.34%, 08/16/04³		112,705		112,646
1.37%, 08/20/04³		16,906		16,894
1.40%, 08/25/04³		140,881		140,755
Sydney Capital Corp.
1.25%, 10/22/04³		37,508		37,403
1.31%, 08/12/04³		45,082		45,066
Thames Asset Global Securitization No. 1 Inc.
1.30%, 08/12/04³		59,479		59,458
1.34%, 08/16/04³		31,557		31,541
1.36%, 08/20/04³		84,529		84,471
1.37%, 08/19/04³		31,482		31,462
1.37%, 08/20/04³		14,652		14,642
Windmill Funding Corp.
1.29%, 08/06/04³		140,881		140,862

				2,687,120

TIME DEPOSITS – 1.89%
Abbey National Treasury Services PLC
1.25%, 01/06/05³		112,705		112,705
1.33%, 02/10/05³		56,353		56,348
1.39%, 02/02/05³		56,353		56,348
1.39%, 04/08/05³		78,894		78,886
1.40%, 10/25/04³		112,705		112,701
Bank of New York
1.39%, 11/01/04³		112,705		112,702
1.60%, 12/03/04³		28,176		28,171
Bank of Nova Scotia
1.13%, 10/06/04³		112,705		112,705
1.24%, 10/07/04³		84,529		84,528
1.42%, 10/29/04³		84,529		84,530
National City Bank (Cleveland, Ohio)
1.25%, 01/06/05³		112,705		112,708
1.35%, 06/10/05³		56,353		56,368
1.36%, 06/23/05³		112,705		112,675
Norddeutsche Landesbank
1.59%, 07/27/05³		112,705		112,666
Nordea Bank PLC
2.11%, 06/07/05³		112,705		112,686
Prudential Funding LLC
1.60%, 12/01/04³		56,353		56,050
Toronto-Dominion Bank
1.22%, 03/23/05³		197,234		197,212
1.34%, 02/10/05³		45,082		45,078
1.41%, 11/01/04³		84,529		84,527
1.77%, 05/10/05³		56,353		56,348
1.90%, 05/11/05³		56,353		56,348
UBS Finance (Delaware)
1.10%, 09/08/04³		112,705		112,578
1.11%, 12/17/04³		169,058		168,344
1.13%, 08/09/04³		112,705		112,680
1.14%, 09/29/04³		112,705		112,499

				2,348,391

REPURCHASE AGREEMENTS – 1.14%
Banc of America Securities LLC
1.34%, 08/02/04^3,6		293,033		293,033
Bank of America, N.A.
1.37%, 08/02/04^3,6		563,526		563,526
Goldman Sachs & Co.
1.37%, 08/02/04^3,6		563,526		563,526

				1,420,085


SCHEDULES OF INVESTMENTS		31

Schedule of Investments (Continued)

iSHARES^® GOLDMAN SACHS SEMICONDUCTOR INDEX FUND

July 31, 2004


*Security*	*Shares or* *Principal*		*Value*
U.S. GOVERNMENT AGENCY NOTES – 0.48%
Federal Home Loan Mortgage Corp.
1.28%, 08/19/04³	$	45,082	$	45,055
1.63%, 04/15/05³		78,894		79,070
1.80%, 01/18/05³		52,408		51,965
1.80%, 01/19/05³		56,353		55,874
2.06%, 05/31/05³		56,187		55,216
Federal National Mortgage Association
1.28%, 08/20/04³		146,517		146,423
2.33%, 07/22/05³		169,058		165,193

				598,796

MEDIUM-TERM NOTES – 0.33%
CC USA Inc.
1.29%, 04/15/05^3,5		112,705		112,697
1.51%, 02/15/05^3,5		73,258		73,320
Dorada Finance Inc.
1.24%, 08/09/04^3,5		28,176		28,176
1.48%, 01/18/05^3,5		84,529		84,527
K2 USA LLC
1.46%, 01/12/05^3,5		56,353		56,350
Sigma Finance Inc.
1.24%, 08/06/04³		28,176		28,176
WhistleJacket Capital LLC
1.32%, 02/04/05^3,5		28,176		28,173

				411,419

TOTAL SHORT-TERM INVESTMENTS (Cost: $14,718,475)				14,718,475

TOTAL INVESTMENTS IN SECURITIES – 111.62% (Cost: $168,091,164)				138,484,518

Other Assets, Less Liabilities – (11.62%)				(14,418,473	)

NET ASSETS – 100.00%			$	124,066,045

NYS	- New York Registered Shares

¹	Non-income earning security.

²	All or a portion of this security represents a security on loan. See Note 5.

³	All or a portion of this security represents an investment of securities lending collateral. See Note 5.

⁴	Issuer is an affiliate of the Fund’s investment adviser. See Note 2.

⁵	Security exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

⁶	Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.61% to 7.00% and maturity dates ranging from 7/1/13 to 7/1/34.

INDUSTRY DIVERSIFICATION


*Industry*	*% of* *Net Assets*		*Value*
Semiconductors	85.98	%	$	106,671,866
Telecommunications	8.30			10,294,042
Electrical Components & Equipment	2.40			2,971,979
Computers	1.37			1,701,524
Software	1.34			1,669,280
Electronics	0.37			457,352
Short-Term and Other Net Assets	0.24			300,002

TOTAL	100.00	%	$	124,066,045

See notes to financial statements.


32		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® GOLDMAN SACHS SOFTWARE INDEX FUND

July 31, 2004


*Security*	*Shares*		*Value*
COMMON STOCKS – 100.02%

COMPUTERS – 5.13%
Cadence Design Systems Inc.^1,2		164,572	$	2,216,785
Kronos Inc.^1,2		18,725		822,402
Mentor Graphics Corp.^1,2		42,244		498,479
Synopsys Inc.¹		93,390		2,361,833

				5,899,499

INTERNET – 15.97%
Ariba Inc.¹		27,588		239,735
Check Point Software Technologies Ltd.^1,2		150,102		2,985,529
Internet Security Systems Inc.^1,2		29,198		447,313
McAfee Inc.¹		99,501		1,789,028
RSA Security Inc.^1,2		37,173		692,161
Symantec Corp.¹		187,342		8,760,112
TIBCO Software Inc.^1,2		119,662		846,010
VeriSign Inc.¹		149,307		2,614,366

				18,374,254

SOFTWARE – 76.10%
Activision Inc.¹		81,217		1,189,829
Adobe Systems Inc.		143,697		6,061,140
Advent Software Inc.^1,2		20,001		317,216
Autodesk Inc.		68,084		2,736,977
BEA Systems Inc.¹		247,166		1,604,107
BMC Software Inc.¹		135,539		2,125,252
Borland Software Corp.^1,2		48,714		402,865
Citrix Systems Inc.¹		102,450		1,805,169
Cognos Inc.¹		57,249		1,928,146
Computer Associates International Inc.		350,310		8,841,824
Compuware Corp.¹		231,179		1,142,024
Electronic Arts Inc.¹		182,205		9,133,937
Fair Isaac Corp.		42,431		1,212,678
FileNET Corp.^1,2		23,436		445,284
Hyperion Solutions Corp.¹		23,452		962,001
Informatica Corp.¹		51,733		314,019
Intuit Inc.¹		118,549		4,438,475
Mercury Interactive Corp.¹		55,509		2,029,409
Microsoft Corp.		407,461		11,596,340
NetIQ Corp.¹		34,412		327,946
Novell Inc.^1,2		231,024		1,580,204

*Security*	Shares or Principal		*Value*
Open Text Corp.¹		32,071	$	813,641
Oracle Corp.¹		934,601		9,822,657
Parametric Technology Corp.¹		161,685		734,050
PeopleSoft Inc.¹		219,717		3,959,300
Quest Software Inc.^1,2		57,092		688,530
Red Hat Inc.^1,2		110,321		1,888,696
Siebel Systems Inc.¹		302,616		2,439,085
Sybase Inc.¹		58,451		851,631
Take-Two Interactive Software Inc.^1,2		26,815		839,846
THQ Inc.^1,2		22,962		437,426
Veritas Software Corp.¹		257,348		4,905,053

				87,574,757

TELECOMMUNICATIONS – 2.82%
Amdocs Ltd.¹		130,092		2,822,996
Aspect Communications Corp.¹		50,434		427,176

				3,250,172

TOTAL COMMON STOCKS (Cost: $126,624,159)				115,098,682

SHORT-TERM INVESTMENTS – 10.19%

MONEY MARKET FUNDS – 2.56%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^3,4		1,840,590		1,840,590
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^3,4		987,334		987,334
BlackRock Temp Cash Money Market Fund³		45,311		45,311
Short-Term Investment Co. – Prime Money Market Portfolio³		77,224		77,224

				2,950,459

FLOATING RATE NOTES – 2.46%
Beta Finance Inc.
1.30%, 05/04/05^3,5	$	53,855		53,846
1.31%, 10/12/04^3,5		44,879		44,878
1.34%, 09/15/04^3,5		89,758		89,757
1.42%, 03/15/05^3,5		44,879		44,901
1.48%, 08/23/04^3,5		44,879		44,881


SCHEDULES OF INVESTMENTS		33

Schedule of Investments (Continued)

iSHARES^® GOLDMAN SACHS SOFTWARE INDEX FUND

July 31, 2004


*Security*	*Principal*		*Value*
Canadian Imperial Bank of Commerce
1.24%, 10/07/04³	$	67,318	$	67,316
1.38%, 11/22/04³		22,439		22,440
1.40%, 10/29/04³		89,758		89,757
CC USA Inc.
1.30%, 05/04/05^3,5		89,758		89,744
1.61%, 07/29/05^3,5		89,758		89,731
Depfa Bank PLC
1.27%, 06/15/05³		89,758		89,758
Dorada Finance Inc.
1.61%, 07/29/05^3,5		74,499		74,477
Five Finance Inc.
1.42%, 04/29/05^3,5		71,806		71,801
HBOS Treasury Services PLC
1.24%, 04/01/05³		57,445		57,441
1.58%, 04/22/05³		89,758		89,758
K2 USA LLC
1.34%, 08/16/04^3,5		22,439		22,439
1.41%, 09/27/04^3,5		96,938		96,936
1.49%, 06/10/05^3,5		89,758		89,748
1.61%, 07/25/05^3,5		44,879		44,870
Links Finance LLC
1.33%, 04/15/05³		89,758		89,745
1.68%, 04/25/05³		89,758		89,800
Nationwide Building Society
1.59%, 07/28/05^3,5		89,758		89,758
1.63%, 12/09/04³		74,499		74,064
Northern Rock PLC
1.56%, 01/13/05^3,5		85,270		85,270
Permanent Financing PLC
1.31%, 03/10/05³		89,758		89,758
1.32%, 12/10/04³		44,879		44,879
1.34%, 06/10/05³		40,391		40,391
Sigma Finance Inc.
1.35%, 11/15/04³		89,758		89,756
1.52%, 10/07/04³		89,758		89,754
Tango Finance Corp.
1.20%, 05/17/05^3,5		74,499		74,496
1.23%, 02/25/05^3,5		50,264		50,259
1.32%, 04/07/05^3,5		32,941		32,939
1.34%, 01/18/05^3,5		39,493		39,492
1.42%, 07/25/05^3,5		89,758		89,749
WhistleJacket Capital LLC
1.26%, 10/20/04^3,5		22,233		22,171
1.34%, 09/15/04^3,5		44,879		44,878
1.38%, 07/15/05^3,5		67,318		67,305
1.48%, 06/15/05^3,5		44,879		44,870
White Pine Finance LLC
1.21%, 05/20/05^3,5		40,391		40,388
1.33%, 04/15/05^3,5		67,318		67,309
1.33%, 07/05/05^3,5		44,879		44,870
1.34%, 11/15/04^3,5		53,855		53,855
1.35%, 06/15/05^3,5		36,801		36,801
1.40%, 08/26/04^3,5		44,879		44,878
1.55%, 07/11/05^3,5		22,439		22,437

				2,834,351

COMMERCIAL PAPER – 1.86%
Alpine Securitization Corp.
1.31%, 08/12/04³		44,879		44,862
Amsterdam Funding Corp.
1.30%, 08/13/04³		67,318		67,291
1.33%, 08/16/04³		89,758		89,711
1.35%, 08/20/04³		26,927		26,909
1.37%, 08/24/04³		31,415		31,389
Barton Capital Corp.
1.29%, 08/10/04³		44,879		44,866
1.30%, 08/13/04³		36,892		36,878
1.35%, 08/18/04³		22,439		22,426
Blue Ridge Asset Funding Corp.
1.29%, 08/06/04³		44,879		44,872
Corporate Asset Funding
1.42%, 09/03/04³		26,927		26,893
CRC Funding LLC
1.42%, 09/03/04³		44,879		44,822
Edison Asset Securitization
1.07%, 09/21/04³		44,879		44,812
1.45%, 11/09/04³		89,758		89,400
1.59%, 12/02/04³		89,758		89,274
Falcon Asset Securitization Corp.
1.29%, 08/09/04³		85,270		85,248
1.30%, 08/03/04³		44,879		44,878
1.34%, 08/19/04³		44,879		44,850
1.37%, 08/24/04³		35,903		35,873


34		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® GOLDMAN SACHS SOFTWARE INDEX FUND

July 31, 2004


*Security*	*Principal*		*Value*
Ford Credit Auto Receivables
1.85%, 01/14/05³	$	44,879	$	44,498
GIRO Funding US Corp.
1.55%, 10/15/04³		58,859		58,671
Grampian Funding LLC
1.26%, 10/22/04³		89,758		89,504
1.44%, 10/27/04³		89,758		89,449
1.59%, 11/30/04³		44,879		44,641
Jupiter Securitization Corp.
1.30%, 08/12/04³		44,879		44,863
1.37%, 08/20/04³		60,049		60,008
Park Avenue Receivables Corp.
1.35%, 08/19/04³		44,879		44,850
Preferred Receivables Funding Corp.
1.29%, 08/05/04³		41,457		41,453
1.36%, 08/23/04³		44,879		44,843
Receivables Capital Corp.
1.30%, 08/12/04³		31,415		31,404
1.34%, 08/16/04³		5,368		5,365
1.35%, 08/18/04³		40,391		40,367
1.35%, 08/19/04³		15,259		15,249
Scaldis Capital LLC
1.34%, 08/16/04³		89,758		89,711
1.37%, 08/20/04³		13,464		13,454
1.40%, 08/25/04³		112,197		112,097
Sydney Capital Corp.
1.25%, 10/22/04³		29,871		29,787
1.31%, 08/12/04³		35,903		35,890
Thames Asset Global Securitization No. 1 Inc.
1.30%, 08/12/04³		47,369		47,352
1.34%, 08/16/04³		25,132		25,119
1.36%, 08/20/04³		67,318		67,272
1.37%, 08/19/04³		25,072		25,056
1.37%, 08/20/04³		11,668		11,660
Windmill Funding Corp.
1.29%, 08/06/04³		112,197		112,178

				2,139,995

TIME DEPOSITS – 1.63%
Abbey National Treasury Services PLC
1.25%, 01/06/05³		89,758		89,758
1.33%, 02/10/05³		44,879		44,875
1.39%, 02/02/05³		44,879		44,875
1.39%, 04/08/05³		62,830		62,824
1.40%, 10/25/04³		89,758		89,755
Bank of New York
1.39%, 11/01/04³		89,758		89,755
1.60%, 12/03/04³		22,439		22,436
Bank of Nova Scotia
1.13%, 10/06/04³		89,758		89,758
1.24%, 10/07/04³		67,318		67,318
1.42%, 10/29/04³		67,318		67,319
National City Bank (Cleveland, Ohio)
1.25%, 01/06/05³		89,758		89,760
1.35%, 06/10/05³		44,879		44,891
1.36%, 06/23/05³		89,758		89,734
Norddeutsche Landesbank
1.59%, 07/27/05³		89,758		89,727
Nordea Bank PLC
2.11%, 06/07/05³		89,758		89,743
Prudential Funding LLC
1.60%, 12/01/04³		44,879		44,637
Toronto-Dominion Bank
1.22%, 03/23/05³		157,076		157,058
1.34%, 02/10/05³		35,903		35,900
1.41%, 11/01/04³		67,318		67,317
1.77%, 05/10/05³		44,879		44,875
1.90%, 05/11/05³		44,879		44,875
UBS Finance (Delaware)
1.10%, 09/08/04³		89,758		89,656
1.11%, 12/17/04³		134,636		134,068
1.13%, 08/09/04³		89,758		89,738
1.14%, 09/29/04³		89,758		89,594

				1,870,246

REPURCHASE AGREEMENTS – 0.98%
Banc of America Securities LLC
1.34%, 08/02/04^3,6		233,370		233,370
Bank of America, N.A.
1.37%, 08/02/04^3,6		448,788		448,788
Goldman Sachs & Co.
1.37%, 08/02/04^3,6		448,788		448,788

				1,130,946


SCHEDULES OF INVESTMENTS		35

Schedule of Investments (Continued)

iSHARES^® GOLDMAN SACHS SOFTWARE INDEX FUND

JULY 31, 2004


*Security*	*Shares*		*Value*
U.S. GOVERNMENT AGENCY NOTES – 0.41%
Federal Home Loan Mortgage Corp.
1.28%, 08/19/04³	$	35,903	$	35,881
1.63%, 04/15/05³		62,830		62,971
1.80%, 01/18/05³		41,737		41,385
1.80%, 01/19/05³		44,879		44,497
2.06%, 05/31/05³		44,747		43,974
Federal National Mortgage Association
1.28%, 08/20/04³		116,685		116,610
2.33%, 07/22/05³		134,636		131,558

				476,876

MEDIUM-TERM NOTES – 0.29%
CC USA Inc.
1.29%, 04/15/05^3,5		89,758		89,751
1.51%, 02/15/05^3,5		58,342		58,392
Dorada Finance Inc.
1.24%, 08/09/04^3,5		22,439		22,439
1.48%, 01/18/05^3,5		67,318		67,317
K2 USA LLC
1.46%, 01/12/05^3,5		44,879		44,877
Sigma Finance Inc.
1.24%, 08/06/04³		22,439		22,439
WhistleJacket Capital LLC
1.32%, 02/04/05^3,5		22,439		22,437

				327,652

TOTAL SHORT-TERM INVESTMENTS (Cost: $11,730,525)				11,730,525

TOTAL INVESTMENTS IN SECURITIES – 110.21% (Cost: $138,354,684)				126,829,207

Other Assets, Less Liabilities – (10.21%)				(11,752,491	)

NET ASSETS – 100.00%			$	115,076,716

¹	Non-income earning security.

²	All or a portion of this security represents a security on loan. See Note 5.

³	All or a portion of this security represents an investment of securities lending collateral. See Note 5.

⁴	Issuer is an affiliate of the Fund’s investment adviser. See Note 2.

⁵	Security exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

⁶	Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.61% to 7.00% and maturity dates ranging from 7/1/13 to 7/1/34.

INDUSTRY DIVERSIFICATION


*Industry*	*% of* *Net Assets*		*Value*
Software	76.10	%	$	87,574,757
Internet	15.97			18,374,254
Computers	5.13			5,899,499
Telecommunications	2.82			3,250,172
Short-Term and Other Net Assets	(0.02	)		(21,966	)

TOTAL	100.00	%	$	115,076,716

See notes to financial statements.


36		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® GOLDMAN SACHS NATURAL RESOURCES INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
COMMON STOCKS – 99.96%

CHEMICALS – 0.36%
Ashland Inc.	18,041	$	943,003

			943,003

COAL – 0.84%
Arch Coal Inc.	13,993		472,544
CONSOL Energy Inc.	23,002		824,392
Peabody Energy Corp.	16,392		920,903

			2,217,839

FOREST PRODUCTS & PAPER – 6.65%
Abitibi-Consolidated Inc. (Canada)	112,444		739,882
Boise Cascade Corp.	22,471		724,690
Bowater Inc.¹	14,267		532,159
Domtar Inc.	58,861		764,604
Georgia-Pacific Corp.	65,092		2,187,091
International Paper Co.	124,028		5,361,730
Louisiana-Pacific Corp.	27,883		660,269
MeadWestvaco Corp.	51,419		1,535,371
Potlatch Corp.¹	7,609		305,045
Temple-Inland Inc.	14,190		968,467
Wausau-Mosinee Paper Corp.¹	13,312		206,868
Weyerhaeuser Co.	56,882		3,526,684

			17,512,860

MINING – 11.53%
Aber Diamond Corp.^1,2	14,711		444,272
Agnico-Eagle Mines Ltd. (Canada)	21,771		288,030
Alcan Inc. (Canada)¹	94,005		3,724,478
Alcoa Inc.	222,138		7,115,080
Barrick Gold Corp. (Canada)¹	135,603		2,592,729
Bema Gold Corp.^1,2	92,647		215,868
Cameco Corp. (Canada)¹	14,479		861,500
Coeur d’Alene Mines Corp.^1,2	54,304		187,892
Freeport-McMoRan Copper & Gold Inc.	45,177		1,574,418
Glamis Gold Ltd. (Canada)²	33,249		522,009
Goldcorp Inc. (Canada)	48,567		559,006
IAMGOLD Corp. (Canada)¹	36,772		215,484
Inco Ltd. (Canada)²	47,829		1,596,054
Kinross Gold Corp.^1,2	88,619		470,567
Meridian Gold Inc.^1,2	25,560		338,926
Newmont Mining Corp.	102,760		4,158,697
Noranda Inc. (Canada)	73,185		1,236,827
Phelps Dodge Corp.²	23,864		1,859,960
Placer Dome Inc. (Canada)	105,550		1,690,911
Stillwater Mining Co.^1,2	23,066		335,610
Wheaton River Minerals Ltd.²	145,432		366,489

			30,354,807

OIL & GAS – 65.65%
Amerada Hess Corp.	22,975		1,914,966
Anadarko Petroleum Corp.	64,334		3,846,530
Apache Corp.	83,068		3,865,154
BP PLC ADR¹	348,430		19,637,515
Burlington Resources Inc.	101,332		3,867,842
Cabot Oil & Gas Corp.¹	8,374		368,205
Canadian Natural Resources Ltd. (Canada)	68,471		2,271,868
Chesapeake Energy Corp.	62,087		953,035
ChevronTexaco Corp.	203,747		19,488,401
Cimarex Energy Co.²	10,485		341,077
ConocoPhillips	175,262		13,805,388
Devon Energy Corp.	61,022		4,240,419
Diamond Offshore Drilling Inc.¹	32,946		805,200
EnCana Corp. (Canada)	116,492		5,162,925
ENSCO International Inc.	38,506		1,159,416
EOG Resources Inc.	29,751		1,890,676
Evergreen Resources Inc.²	10,984		449,465
Exxon Mobil Corp.	420,604		19,473,965
Forest Oil Corp.^1,2	13,644		385,989
GlobalSantaFe Corp.	59,879		1,640,685
Grey Wolf Inc.^1,2	48,623		218,317
Helmerich & Payne Inc.	12,913		326,957
Houston Exploration Co.^1,2	8,213		443,502
Kerr-McGee Corp.	38,195		2,005,238
Marathon Oil Corp.	88,218		3,323,172
Murphy Oil Corp.	23,548		1,821,202
Nabors Industries Ltd.²	37,905		1,762,583
Newfield Exploration Co.²	14,495		856,220
Nexen Inc. (Canada)	32,925		1,266,954
Noble Corp.²	34,572		1,338,628
Noble Energy Inc.	14,878		822,902
Occidental Petroleum Corp.	99,933		4,923,699
Patina Oil & Gas Corp.¹	18,071		532,914


SCHEDULES OF INVESTMENTS		37

Schedule of Investments (Continued)

iSHARES^® GOLDMAN SACHS NATURAL RESOURCES INDEX FUND

July 31, 2004


*Security*	*Shares*		*Value*
Patterson-UTI Energy Inc.		42,746	$	779,260
Petro-Canada (Canada)¹		67,913		3,185,799
PetroKazakhstan Inc. Class A (Canada)¹		20,649		653,541
Pioneer Natural Resources Co.		30,792		1,110,052
Plains Exploration & Production Co.²		19,716		411,079
Pogo Producing Co.		16,272		722,151
Precision Drilling Corp. (Canada)²		14,291		710,691
Premcor Inc.²		22,848		820,243
Pride International Inc.^1,2		34,929		628,722
Quicksilver Resources Inc.^1,2		12,726		403,032
Rowan Companies Inc.²		27,161		663,272
Royal Dutch Petroleum Co. NYS (Netherlands)¹		364,065		18,312,470
Spinnaker Exploration Co.^1,2		8,587		307,157
St. Mary Land & Exploration Co.¹		7,428		254,855
Stone Energy Corp.^1,2		6,799		307,587
Suncor Energy Inc. (Canada)¹		115,604		3,350,204
Sunoco Inc.		19,275		1,313,977
Talisman Energy Inc. (Canada)¹		98,053		2,337,584
Tesoro Petroleum Corp.^1,2		16,779		486,591
Transocean Inc.²		81,904		2,326,074
Ultra Petroleum Corp.²		19,166		859,978
Unit Corp.^1,2		11,700		377,325
Unocal Corp.		67,295		2,608,354
Valero Energy Corp.		32,868		2,462,471
Vintage Petroleum Inc.		16,569		283,330
XTO Energy Inc.		65,270		1,951,573

				172,838,381

OIL & GAS SERVICES – 9.93%
Baker Hughes Inc.		85,067		3,428,200
BJ Services Co.²		40,777		2,024,986
Cal Dive International Inc.^1,2		9,725		301,475
CARBO Ceramics Inc.		4,070		288,278
FMC Technologies Inc.²		17,327		519,810
Grant Prideco Inc.²		31,280		590,879
Halliburton Co.		112,413		3,569,113
Hanover Compressor Co.^1,2		21,908		257,200
Key Energy Services Inc.²		33,655		339,242
National-Oilwell Inc.²		21,915		733,057
Schlumberger Ltd.		150,546		9,683,119

*Security*	Shares or Principal		*Value*
Seacor Holdings Inc.^1,2		4,818	$	203,801
Smith International Inc.²		26,767		1,559,981
Tidewater Inc.¹		15,515		470,880
Varco International Inc.²		24,785		599,053
Weatherford International Ltd.^1,2		33,816		1,581,912

				26,150,986

PACKAGING & CONTAINERS – 0.70%
Packaging Corp. of America		27,170		634,691
Smurfit-Stone Container Corp.¹		64,786		1,205,667

				1,840,358

PIPELINES – 3.74%
El Paso Corp.¹		164,351		1,296,729
Enbridge Inc. (Canada)¹		43,943		1,662,803
Kinder Morgan Inc.		31,670		1,900,517
Questar Corp.		21,347		874,800
TransCanada Corp. (Canada)		123,558		2,482,280
Williams Companies Inc.		133,516		1,622,219

				9,839,348

REAL ESTATE INVESTMENT TRUSTS – 0.56%
Plum Creek Timber Co. Inc.		46,939		1,472,946

				1,472,946

TOTAL COMMON STOCKS (Cost: $226,375,475)				263,170,528

SHORT-TERM INVESTMENTS – 7.75%

MONEY MARKET FUNDS – 1.96%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^3,4		3,074,960		3,074,960
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^3,4		1,870,792		1,870,792
BlackRock Temp Cash Money Market Fund³		78,658		78,658
Short-Term Investment Co. – Prime Money Market Portfolio³		134,058		134,058

				5,158,468

FLOATING RATE NOTES – 1.87%
Beta Finance Inc.
1.30%, 05/04/05^3,5	$	93,490		93,476


38		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® GOLDMAN SACHS NATURAL RESOURCES INDEX FUND

July 31, 2004


*Security*	*Principal*		*Value*
1.31%, 10/12/04^3,5	$	77,908	$	77,907
1.34%, 09/15/04^3,5		155,816		155,814
1.42%, 03/15/05^3,5		77,908		77,947
1.48%, 08/23/04^3,5		77,908		77,912
Canadian Imperial Bank of Commerce
1.24%, 10/07/04³		116,862		116,859
1.38%, 11/22/04³		38,954		38,955
1.40%, 10/29/04³		155,816		155,816
CC USA Inc.
1.30%, 05/04/05^3,5		155,816		155,793
1.61%, 07/29/05^3,5		155,816		155,770
Depfa Bank PLC
1.27%, 06/15/05³		155,816		155,816
Dorada Finance Inc.
1.61%, 07/29/05^3,5		129,327		129,290
Five Finance Inc.
1.42%, 04/29/05^3,5		124,653		124,644
HBOS Treasury Services PLC
1.24%, 04/01/05³		99,722		99,716
1.58%, 04/22/05³		155,816		155,816
K2 USA LLC
1.34%, 08/16/04^3,5		38,954		38,954
1.41%, 09/27/04^3,5		168,282		168,278
1.49%, 06/10/05^3,5		155,816		155,800
1.61%, 07/25/05^3,5		77,908		77,893
Links Finance LLC
1.33%, 04/15/05³		155,816		155,794
1.68%, 04/25/05³		155,816		155,890
Nationwide Building Society
1.59%, 07/28/05^3,5		155,816		155,816
1.63%, 12/09/04³		129,327		128,573
Northern Rock PLC
1.56%, 01/13/05^3,5		148,025		148,025
Permanent Financing PLC
1.31%, 03/10/05³		155,816		155,816
1.32%, 12/10/04³		77,908		77,908
1.34%, 06/10/05³		70,117		70,117
Sigma Finance Inc.
1.35%, 11/15/04³		155,816		155,813
1.52%, 10/07/04³		155,816		155,811
Tango Finance Corp.
1.20%, 05/17/05^3,5		129,327		129,322
1.23%, 02/25/05^3,5		87,257		87,247
1.32%, 04/07/05^3,5		57,185		57,181
1.34%, 01/18/05^3,5		68,559		68,556
1.42%, 07/25/05^3,5		155,816		155,801
WhistleJacket Capital LLC
1.26%, 10/20/04^3,5		38,596		38,489
1.34%, 09/15/04^3,5		77,908		77,906
1.38%, 07/15/05^3,5		116,862		116,840
1.48%, 06/15/05^3,5		77,908		77,893
White Pine Finance LLC
1.21%, 05/20/05^3,5		70,117		70,112
1.33%, 04/15/05^3,5		116,862		116,846
1.33%, 07/05/05^3,5		77,908		77,892
1.34%, 11/15/04^3,5		93,490		93,490
1.35%, 06/15/05^3,5		63,885		63,885
1.40%, 08/26/04^3,5		77,908		77,907
1.55%, 07/11/05^3,5		38,954		38,950

				4,920,336

COMMERCIAL PAPER – 1.41%
Alpine Securitization Corp.
1.31%, 08/12/04³		77,908		77,880
Amsterdam Funding Corp.
1.30%, 08/13/04³		116,862		116,816
1.33%, 08/16/04³		155,816		155,736
1.35%, 08/20/04³		46,745		46,713
1.37%, 08/24/04³		54,536		54,490
Barton Capital Corp.
1.29%, 08/10/04³		77,908		77,886
1.30%, 08/13/04³		64,044		64,018
1.35%, 08/18/04³		38,954		38,931
Blue Ridge Asset Funding Corp.
1.29%, 08/06/04³		77,908		77,897
Corporate Asset Funding
1.42%, 09/03/04³		46,745		46,686
CRC Funding LLC
1.42%, 09/03/04³		77,908		77,810
Edison Asset Securitization
1.07%, 09/21/04³		77,908		77,792
1.45%, 11/09/04³		155,816		155,195
1.59%, 12/02/04³		155,816		154,977


SCHEDULES OF INVESTMENTS		39

Schedule of Investments (Continued)

iSHARES^® GOLDMAN SACHS NATURAL RESOURCES INDEX FUND

July 31, 2004


*Security*	*Principal*		*Value*
Falcon Asset Securitization Corp.
1.29%, 08/09/04³	$	148,025	$	147,989
1.30%, 08/03/04³		77,908		77,905
1.34%, 08/19/04³		77,908		77,859
1.37%, 08/24/04³		62,326		62,274
Ford Credit Auto Receivables
1.85%, 01/14/05³		77,908		77,248
GIRO Funding US Corp.
1.55%, 10/15/04³		102,177		101,851
Grampian Funding LLC
1.26%, 10/22/04³		155,816		155,376
1.44%, 10/27/04³		155,816		155,280
1.59%, 11/30/04³		77,908		77,496
Jupiter Securitization Corp.
1.30%, 08/12/04³		77,908		77,880
1.37%, 08/20/04³		104,243		104,171
Park Avenue Receivables Corp.
1.35%, 08/19/04³		77,908		77,858
Preferred Receivables Funding Corp.
1.29%, 08/05/04³		71,968		71,961
1.36%, 08/23/04³		77,908		77,846
Receivables Capital Corp.
1.30%, 08/12/04³		54,536		54,516
1.34%, 08/16/04³		9,318		9,313
1.35%, 08/18/04³		70,117		70,075
1.35%, 08/19/04³		26,489		26,472
Scaldis Capital LLC
1.34%, 08/16/04³		155,816		155,735
1.37%, 08/20/04³		23,372		23,356
1.40%, 08/25/04³		194,770		194,596
Sydney Capital Corp.
1.25%, 10/22/04³		51,856		51,710
1.31%, 08/12/04³		62,326		62,304
Thames Asset Global Securitization No. 1 Inc.
1.30%, 08/12/04³		82,230		82,201
1.34%, 08/16/04³		43,629		43,606
1.36%, 08/20/04³		116,862		116,783
1.37%, 08/19/04³		43,524		43,496
1.37%, 08/20/04³		20,256		20,242
Windmill Funding Corp.
1.29%, 08/06/04³		194,765		194,737

				3,714,963

TIME DEPOSITS – 1.23%
Abbey National Treasury Services PLC
1.25%, 01/06/05³		155,816		155,816
1.33%, 02/10/05³		77,908		77,902
1.39%, 02/02/05³		77,908		77,902
1.39%, 04/08/05³		109,071		109,060
1.40%, 10/25/04³		155,816		155,811
Bank of New York
1.39%, 11/01/04³		155,816		155,812
1.60%, 12/03/04³		38,954		38,947
Bank of Nova Scotia
1.13%, 10/06/04³		155,816		155,816
1.24%, 10/07/04³		116,862		116,860
1.42%, 10/29/04³		116,862		116,864
National City Bank (Cleveland, Ohio)
1.25%, 01/06/05³		155,816		155,820
1.35%, 06/10/05³		77,908		77,929
1.36%, 06/23/05³		155,816		155,775
Norddeutsche Landesbank
1.59%, 07/27/05³		155,816		155,762
Nordea Bank PLC
2.11%, 06/07/05³		155,816		155,790
Prudential Funding LLC
1.60%, 12/01/04³		77,908		77,489
Toronto-Dominion Bank
1.22%, 03/23/05³		272,678		272,648
1.34%, 02/10/05³		62,326		62,322
1.41%, 11/01/04³		116,862		116,859
1.77%, 05/10/05³		77,908		77,902
1.90%, 05/11/05³		77,908		77,902
UBS Finance (Delaware)
1.10%, 09/08/04³		155,816		155,640
1.11%, 12/17/04³		233,724		232,737
1.13%, 08/09/04³		155,816		155,783
1.14%, 09/29/04³		155,816		155,531

				3,246,679


40		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® GOLDMAN SACHS NATURAL RESOURCES INDEX FUND

July 31, 2004


*Security*	*Principal*		*Value*
REPURCHASE AGREEMENTS – 0.75%
Banc of America Securities LLC
1.34%, 08/02/04^3,6	$	405,122	$	405,122
Bank of America, N.A.
1.37%, 08/02/04^3,6		779,081		779,081
Goldman Sachs & Co.
1.37%, 08/02/04^3,6		779,081		779,081

				1,963,284

U.S. GOVERNMENT AGENCY NOTES – 0.31%
Federal Home Loan Mortgage Corp.
1.28%, 08/19/04³		62,326		62,289
1.63%, 04/15/05³		109,071		109,316
1.80%, 01/18/05³		72,455		71,842
1.80%, 01/19/05³		77,908		77,246
2.06%, 05/31/05³		77,679		76,337
Federal National Mortgage Association
1.28%, 08/20/04³		202,561		202,432
2.33%, 07/22/05³		233,724		228,381

				827,843

MEDIUM-TERM NOTES – 0.22%
CC USA Inc.
1.29%, 04/15/05^3,5		155,816		155,805
1.51%, 02/15/05^3,5		101,281		101,366
Dorada Finance Inc.
1.24%, 08/09/04^3,5		38,954		38,954
1.48%, 01/18/05^3,5		116,862		116,860
K2 USA LLC
1.46%, 01/12/05^3,5		77,908		77,905
Sigma Finance Inc.
1.24%, 08/06/04³		38,954		38,954
WhistleJacket Capital LLC
1.32%, 02/04/05^3,5		38,954		38,950

				568,794

TOTAL SHORT-TERM INVESTMENTS (Cost: $20,400,367)				20,400,367

TOTAL INVESTMENTS IN SECURITIES – 107.71% (Cost: $246,775,842)				283,570,895

Other Assets, Less Liabilities – (7.71%)				(20,300,617	)

NET ASSETS – 100.00%			$	263,270,278

ADR – American Depositary Receipts

NYS – New York Registered Shares

¹	All or a portion of this security represents a security on loan. See Note 5.

²	Non-income earning security.

³	All or a portion of this security represents an investment of securities lending collateral. See Note 5.

⁴	Issuer is an affiliate of the Fund’s investment adviser. See Note 2.

⁵	Security exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

⁶	Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.61% to 7.00% and maturity dates ranging from 7/1/13 to 7/1/34.

INDUSTRY DIVERSIFICATION


*Industry*	*% of* *Net Assets*		*Value*
Oil & Gas	65.65	%	$	172,838,381
Mining	11.53			30,354,807
Oil & Gas Services	9.93			26,150,986
Forest Products & Paper	6.65			17,512,860
Pipelines	3.74			9,839,348
Coal	0.84			2,217,839
Packaging & Containers	0.70			1,840,358
Real Estate Investment Trusts	0.56			1,472,946
Chemicals	0.36			943,003
Short-Term and Other Net Assets	0.04			99,750

TOTAL	100.00	%	$	263,270,278

See notes to financial statements.


SCHEDULES OF INVESTMENTS		41

Schedule of Investments

iSHARES^® MSCI EAFE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
COMMON STOCKS – 99.16%

AUSTRALIA – 4.97%
Alumina Ltd.	1,527,040	$	5,550,114
Amcor Ltd.	810,880		3,895,515
AMP Ltd.	2,100,160		9,221,553
Ansell Ltd.	493,449		2,716,120
Aristocrat Leisure Ltd.²	438,080		1,579,955
Australia and New Zealand Banking Group Ltd.	2,102,769		26,594,598
Australian Gas & Light Co. Ltd.	541,120		4,774,724
Australian Stock Exchange Ltd.	183,680		2,025,940
BHP Billiton Ltd.	4,525,120		41,766,650
BHP Steel	901,133		4,669,869
Boral Ltd.	931,520		4,729,490
Brambles Industries Ltd.²	1,507,200		6,290,733
Coca-Cola Amatil Ltd.	616,960		3,033,041
Coles Myer Ltd.	1,407,040		8,759,763
Commonwealth Bank of Australia	1,558,080		34,064,873
Commonwealth Property Office Fund	4,802,560		4,035,879
CSL Ltd.	346,675		6,188,373
CSR Ltd.	1,816,000		2,912,296
Deutsche Office Trust	4,830,246		4,295,929
Foster’s Group Ltd.	2,786,560		9,035,111
Futuris Corp. Ltd.²	1,769,149		2,081,411
General Property Trust	2,134,720		5,217,356
Harvey Normand Holdings Ltd.	1,221,120		2,599,657
Insurance Australia Group Ltd.	1,796,480		6,265,213
Investa Property Group	3,237,839		4,466,893
James Hardie Industries NV²	543,040		2,167,658
John Fairfax Holdings Ltd.	896,640		2,367,247
Leighton Holdings Ltd.²	376,000		2,467,241
Lend Lease Corp. Ltd.	522,240		3,803,537
Macquarie Bank Ltd.	203,840		4,713,577
Macquarie Infrastructure Group	2,601,920		6,304,551
Mirvac Group	1,653,120		5,267,444
National Australia Bank Ltd.	1,762,289		32,914,273
Newcrest Mining Ltd.	573,760		5,713,655
News Corp. Ltd.²	1,562,920		13,374,947
Orica Ltd.	227,200		2,482,087
Origin Energy Ltd.	1,460,160		6,217,104
PaperlinX Ltd.	614,400		2,164,230
Patrick Corp. Ltd.	1,102,080		4,244,826
QBE Insurance Group Ltd.²	739,840		6,466,012
Rinker Group Ltd.	1,257,280		7,255,099
Rio Tinto Ltd.²	401,359		10,649,807
Santos Ltd.	1,279,680		6,497,159
Stockland Trust Group	859,840		3,323,846
Suncorp-Metway Ltd.	524,800		5,108,493
TABCORP Holdings Ltd.²	696,744		6,816,379
Telstra Corp. Ltd.	2,398,400		8,280,426
Transurban Group	600,640		2,136,791
Wesfarmers Ltd.	394,560		8,145,630
Westfield Group^1,2	1,686,097		17,888,722
Westpac Banking Corp.	2,128,640		25,118,069
WMC Resources Ltd.	1,303,360		4,746,264
Woodside Petroleum Ltd.	736,000		9,272,420
Woolworths Ltd.	1,376,960		11,291,778

			433,970,328

BELGIUM – 1.37%
AGFA Gevaert NV²	159,406		3,819,145
Bekaert NV	33,705		2,026,928
Belgacom SA¹	186,369		5,723,907
Cofinimmo²	39,360		5,269,487
Colruyt NV	29,440		3,813,805
Delhaize-Le Lion SA²	98,297		4,704,201
Dexia Group²	808,878		13,517,020
Electrabel SA²	35,694		11,284,918
Fortis²	1,332,855		28,756,059
Groupe Bruxelles Lambert SA²	101,142		6,271,150
Interbrew SA	193,178		5,849,303
KBC Bankverzekeringsholding NV²	142,720		8,060,440
Mobistar SA^1,2	36,882		2,444,445
Omega Pharma SA	32,820		1,622,035
Solvay SA²	99,234		8,303,358
UCB SA²	105,920		4,877,731
Umicore Mines SA²	48,960		3,056,319

			119,400,251

DENMARK – 0.82%
AP Moller - Maersk A/S	1,600		11,140,618
Carlsberg A/S Class B²	55,040		2,771,786
Coloplast A/S	35,840		3,453,073
Danske Bank A/S²	678,481		15,628,266


42		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI EAFE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
Falck A/S¹	124,000	$	835,287
H. Lundbeck A/S²	96,000		1,919,813
ISS A/S	64,000		3,150,463
Novo Nordisk A/S Class B	308,160		15,668,476
Novozymes A/S Class B	80,320		3,641,686
TDC A/S	160,000		5,207,591
Topdanmark A/S^1,2	78,400		4,678,153
Vestas Wind Systems A/S^1,2	313,359		4,008,576

			72,103,788

FINLAND – 1.33%
Amer Group Ltd.²	59,840		3,105,112
Elisa OYJ Class A^1,2	193,280		2,489,884
Fortum OYJ²	459,666		6,336,600
Kone Corp. Class B²	91,200		5,358,252
Metso Corp.²	212,800		2,761,842
Nokia OYJ	5,664,224		64,989,287
Outokumpu OYJ²	135,680		2,123,575
Sampo OYJ Class A²	514,880		4,853,737
Stora Enso OYJ Class R²	725,006		10,072,931
TietoEnator OYJ²	107,637		2,993,519
UPM-Kymmene OYJ²	589,760		11,460,071

			116,544,810

FRANCE – 9.43%
Accor SA²	236,596		10,049,499
Air France^1,2	191,968		2,997,625
Alcatel SA^1,2	1,380,495		17,883,625
Alstom^1,2	5,578,386		3,022,244
Arcelor²	521,920		8,665,161
Atos Origin SA¹	48,640		2,870,032
Autoroutes du Sud de la France SA²	91,136		3,610,990
Aventis SA²	730,710		56,743,121
AXA²	1,582,362		32,519,796
BIC SA²	51,840		2,223,767
BNP Paribas SA²	970,609		56,535,160
Bouygues SA²	238,574		8,022,366
Business Objects SA^1,2	66,979		1,439,413
Cap Gemini SA^1,2	145,600		4,850,416
Carrefour SA²	667,385		31,842,633
Compagnie de Saint-Gobain SA²	358,490		17,523,124
Compagnie Generale des Etablissements Michelin Class B²	170,880		9,504,771
Credit Agricole SA²	810,306		19,121,131
Dassault Systemes SA²	64,320		2,884,568
Essilor International SA	109,628		6,737,918
European Aeronautic Defence and Space Co.²	335,123		9,239,494
France Telecom SA²	1,269,917		31,465,103
Groupe Danone²	268,800		22,168,091
Lafarge SA²	200,354		17,174,593
Lagardere S.C.A.²	154,769		9,419,191
L’Air Liquide SA²	123,743		20,037,862
L’Oreal SA²	384,171		27,543,225
LVMH Moet Hennessy Louis Vuitton SA²	263,822		18,009,536
Pernod-Ricard SA²	65,876		7,891,485
Pinault-Printemps-Redoute SA²	78,920		7,701,025
PSA Peugeot Citroen²	200,326		11,564,700
Publicis Groupe²	98,880		2,680,929
Renault SA²	206,737		16,315,461
Sagem SA²	27,330		2,678,382
Sanofi-Synthelabo SA²	407,630		27,041,214
Schneider Electric SA²	240,244		15,286,427
Societe Generale Class A²	376,640		30,925,681
Societe Television Francaise 1²	158,130		4,510,117
Sodexho Alliance SA²	159,360		4,334,151
STMicroelectronics NV²	694,218		12,904,810
Suez SA²	916,327		18,114,739
Technip-Coflexip SA²	37,227		5,185,610
Thales/Ex Thomson CSF²	117,864		4,105,235
Thomson SA²	302,824		5,643,775
Total SA²	687,823		133,573,256
Union du Credit Bail Immobilier²	60,326		6,326,028
Valeo SA²	87,863		3,569,107
Veolia Environment²	346,067		9,232,906
Vinci SA²	83,574		8,507,329
Vivendi Universal SA¹	1,142,671		28,573,678
Zodiac SA²	84,488		2,899,001

			823,669,501

GERMANY – 6.36%
Adidas-Salomon AG²	57,954		6,892,946
Allianz AG²	69,839		6,751,838
Altana AG²	98,410		5,331,633


SCHEDULES OF INVESTMENTS		43

Schedule of Investments (Continued)

iSHARES^® MSCI EAFE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
BASF AG²	623,555	$	33,242,282
Bayer AG²	802,669		21,434,161
Bayerische Hypo-Und Vereinsbank AG¹	683,479		11,026,519
Celesio AG²	63,040		4,022,542
Commerzbank AG^1,2	649,830		11,140,847
Continental AG²	179,419		8,465,491
DaimlerChrysler AG Registered	1,020,657		45,601,510
Deutsche Bank AG²	619,927		43,102,354
Deutsche Boerse AG²	151,360		7,376,665
Deutsche Lufthansa AG^1,2	377,920		4,463,519
Deutsche Post AG	515,520		10,346,407
Deutsche Telekom AG^1,2	2,901,809		48,631,371
Douglas Holding AG²	119,360		3,418,706
E.ON AG²	721,280		51,347,608
Fresenius Medical Care AG²	51,123		3,718,207
Heidelberger Zement AG²	71,873		3,258,776
Hypo Real Estate Holding AG^1,2	180,337		5,597,269
Infineon Technologies AG¹	747,520		8,180,788
Karstadtquelle AG²	104,804		2,146,301
Linde AG²	123,168		6,687,794
MAN AG²	134,242		4,982,765
Merck KGaA²	79,680		4,474,210
Metro AG²	186,560		8,564,338
Muenchener Rueckversicherungs-Gesellschaft AG²	208,925		20,067,483
Puma AG	21,944		5,177,954
RWE AG²	464,320		22,752,035
SAP AG²	233,502		37,445,814
Schering AG²	218,272		12,266,971
Siemens AG²	925,659		64,983,413
ThyssenKrupp AG²	390,080		6,960,018
TUI AG²	236,939		4,062,141
Volkswagen AG²	280,230		11,379,925

			555,302,601

GREECE – 0.34%
Hellenic Telecommunications Organization SA²	1,703,696		10,767,359
National Bank of Greece SA ADR²	4,323,202		19,195,017

			29,962,376

HONG KONG – 1.63%
Bank of East Asia Ltd.	1,792,000		5,077,431
BOC Hong Kong Holdings Ltd.²	4,320,000		7,393,988
Cathay Pacific Airways Ltd.	1,600,000		2,851,337
Cheung Kong (Holdings) Ltd.	1,920,000		14,215,658
Cheung Kong Infrastructure Holdings Ltd.	640,000		1,522,081
CLP Holdings Ltd.	1,760,000		9,883,267
Esprit Holdings Ltd.	1,449,000		6,446,316
Giordano International Ltd.	3,200,000		1,938,499
Hang Lung Properties Ltd.²	1,920,000		2,646,205
Hang Seng Bank Ltd.	956,900		12,237,514
Henderson Land Development Co. Ltd.	640,000		2,814,413
Hong Kong & China Gas Co. Ltd.	3,840,200		6,695,862
Hong Kong Exchanges & Clearing Ltd.	1,280,000		2,642,102
Hongkong Electric Holdings Ltd.	1,584,500		6,764,726
Hutchison Whampoa Ltd.	2,209,000		14,939,358
Johnson Electric Holdings Ltd.	2,080,000		2,106,707
Li & Fung Ltd.	1,920,000		2,658,513
MTR Corp. Ltd.	1,600,000		2,400,046
New World Development Co. Ltd.	3,081,599		2,489,032
PCCW Ltd.¹	3,901,800		2,676,286
Shangri-La Asia Ltd.²	1,280,000		1,197,972
Sun Hung Kai Properties Ltd.	1,600,000		13,538,722
Swire Pacific Ltd. Class A	1,280,000		8,533,498
Techtronic Industries Co.²	1,873,500		2,786,284
Television Broadcasts Ltd.	320,000		1,316,948
Wharf Holdings Ltd.	1,600,000		4,923,172

			142,695,937

IRELAND – 0.91%
Allied Irish Banks PLC	1,066,488		16,422,337
Bank of Ireland	1,298,240		16,849,313
CRH PLC	647,040		14,489,471
DCC PLC	159,040		2,766,831
Depfa Bank PLC	459,860		6,256,227
Elan Corp. PLC¹	457,997		9,291,182
Independent News & Media PLC	968,320		2,215,037
Irish Life & Permanent PLC	449,920		6,808,932
Kerry Group PLC Class A	186,560		3,858,781
Ryanair Holdings PLC¹	88,752		480,838

			79,438,949


44		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI EAFE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
ITALY – 3.85%
Alleanza Assicurazioni SpA²	603,212	$	6,463,510
Arnoldo Mondadori Editore SpA²	156,560		1,457,031
Assicurazioni Generali SpA²	1,091,323		28,866,346
Autogrill SpA^1,2	172,220		2,560,702
Autostrade SpA²	300,480		5,867,794
Banca Antonveneta SpA^1,2	253,120		5,113,601
Banca Fideuram SpA²	318,917		1,635,670
Banca Intesa SpA²	4,707,426		17,455,917
Banca Monte dei Paschi di Siena SpA²	1,347,257		4,030,745
Banca Nazionale del Lavoro SpA^1,2	1,288,320		3,016,837
Banca Popolare di Milano SCRL²	544,000		3,346,788
Banca Popolare di Verona e Novara SCRL²	404,800		6,754,795
Banche Popolari Unite SCRL²	491,306		8,020,847
Bulgari SpA²	185,376		1,821,177
Capitalia SpA²	1,824,320		5,534,903
Enel SpA²	2,461,121		19,408,086
Eni SpA²	3,093,218		63,681,765
Fiat SpA^1,2	617,076		4,858,753
FinecoGroup SpA^1,2	260,800		1,510,293
Finmeccanica SpA²	7,929,953		5,585,151
Gruppo Editoriale L’Espresso SpA²	289,650		1,569,259
Italcementi SpA²	158,848		2,090,308
Luxottica Group SpA²	160,000		2,714,185
Mediaset SpA²	720,200		7,682,371
Mediobanca SpA²	580,026		6,787,693
Mediolanum SpA²	221,358		1,356,505
Pirelli & Co. SpA²	1,944,915		1,917,754
Riunione Adriatica di Sicurta SpA²	371,364		6,697,613
Sanpaolo IMI SpA²	1,024,320		11,715,686
Seat Pagine Gaille SpA^1,2	4,225,118		1,663,394
Snam Rete Gas SpA²	626,280		2,691,815
Telecom Italia Media SpA^1,2	1,698,952		644,318
Telecom Italia Mobile SpA²	4,448,200		23,670,914
Telecom Italia SpA²	9,954,885		29,543,478
Telecom Italia SpA RNC²	6,554,958		14,086,937
Tiscali SpA^1,2	185,184		662,168
Unicredito Italiano SpA²	4,897,349		23,466,730

			335,951,839

JAPAN – 23.26%
Acom Co. Ltd.	86,400		5,558,189
Aderans Co. Ltd.²	64,000		1,306,357
Advantest Corp.²	96,000		5,615,899
AEON Co. Ltd.²	288,000		9,870,890
AEON Credit Service Co. Ltd.	33,030		2,024,089
AIFUL Corp.	48,000		4,513,391
Aisin Seiki Co., Ltd.	386,400		8,441,829
Ajinomoto Co. Inc.	640,000		7,436,185
All Nippon Airways Co. Ltd.²	640,000		1,952,357
Alps Electric Co. Ltd.²	320,000		4,303,800
Amada Co. Ltd.	320,000		1,814,544
Asahi Breweries Ltd.	540,500		5,741,797
Asahi Glass Co. Ltd.	960,000		8,630,568
Asahi Kasei Corp.	1,249,000		5,479,889
Bandai Co. Ltd.	105,600		2,572,374
Bank of Yokohama Ltd.	1,280,000		6,948,096
Bellsystem24 Inc.²	6,400		1,194,958
Benesse Corp.	64,000		1,894,935
Bridgestone Corp.	640,000		11,541,878
Canon Inc.	960,000		46,856,579
Casio Computer Co. Ltd.²	320,000		4,332,511
Central Japan Railway Co.²	1,280		10,278,588
Chiba Bank Ltd. (The)	960,000		5,133,552
Chubu Electric Power Co. Inc.	704,000		14,748,912
Chugai Pharmaceutical Co. Ltd.	320,000		5,021,578
Citizen Watch Co. Ltd.²	320,000		3,181,194
Coca Cola West Japan Co. Ltd.	64,000		1,670,988
Credit Saison Co. Ltd.	160,000		4,837,827
CSK Corp.²	60,900		2,562,658
Dai Nippon Printing Co. Ltd.	640,000		9,055,493
Daicel Chemical Industries Ltd.	320,000		1,507,335
Daiichi Pharmaceutical Co. Ltd.²	320,000		5,871,428
Daikin Industries Ltd.	320,000		7,881,208
Daimaru Inc. (The)²	320,000		2,466,287
Dainippon Ink & Chemical Inc.	960,000		2,205,015
Dainippon Screen Manufacturing Co. Ltd.²	320,000		1,607,824
Daito Trust Construction Co. Ltd.	128,000		4,766,049
Daiwa House Industry Co. Ltd.	640,000		6,649,500
Daiwa Securities Group Inc.	1,600,000		10,493,921


SCHEDULES OF INVESTMENTS		45

Schedule of Investments (Continued)

iSHARES^® MSCI EAFE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
Denso Corp.	640,000	$	15,676,282
DENTSU Inc.	2,254		5,743,448
Dowa Mining Co. Ltd.	320,000		1,932,260
East Japan Railway Co.	3,840		20,913,194
Ebara Corporation²	320,000		1,381,006
Eisai Co. Ltd.	288,000		8,449,688
FamilyMart Co. Ltd.	96,000		2,799,336
Fanuc Ltd.	160,000		9,216,276
Fast Retailing Co. Ltd.	64,000		4,507,649
Fuji Electric Holdings Co. Ltd.	640,000		1,567,628
Fuji Photo Film Co. Ltd.	640,000		19,179,041
Fuji Television Network Inc.	468		1,020,358
Fujikura Ltd.²	320,000		1,550,401
Fujisawa Pharmaceutical Co. Ltd.	320,000		7,752,007
Fujitsu Ltd.	1,889,000		11,694,496
Furukawa Electric Co. Ltd.¹	640,000		2,606,971
Gunma Bank Ltd.	640,000		3,129,514
Heavy Industries Co. Ltd.¹	1,600,000		2,368,669
Hino Motors Ltd.²	320,000		2,296,891
Hirose Electric Co. Ltd.	32,000		3,100,803
Hitachi Cable Ltd.	320,000		1,355,166
Hitachi Ltd.	3,522,000		21,488,134
Hitachi Software Engineering Co. Ltd.²	32,000		633,081
Hokugin Financial Group Inc.²	960,000		2,265,309
Honda Motor Co. Ltd.	892,900		43,421,273
Hoya Corp.	128,000		13,149,702
Ito En Ltd.²	32,000		1,492,979
Itochu Corp.¹	1,600,000		6,172,895
Itochu Techno-Science Corp.	32,000		1,177,157
Ito-Yokado Co. Ltd.	320,000		12,431,923
JAFCO Co. Ltd.²	32,000		1,949,486
Japan Airlines System Corp.^1,2	640,000		1,854,739
Japan Tobacco Inc.²	960		7,329,954
JFE Holdings Inc.	640,875		15,323,959
JGC Corp.²	320,000		2,985,958
Joyo Bank Ltd.	960,000		3,901,844
JSR Corp.²	220,900		3,656,727
Kajima Corp.	960,000		3,238,617
Kamigumi Co. Ltd.	320,000		2,193,531
Kanebo Ltd.^1,2	1,600,000		1,378,135
Kaneka Corp.	320,000		2,802,207
Kansai Electric Power Co. Inc.	832,000		15,153,739
Kao Corp.	640,000		15,848,549
Kawasaki Heavy Industries Ltd.²	1,600,000		2,339,958
Kawasaki Kisen Kaisha Ltd.²	640,000		3,204,163
Keihin Electric Express Railway Co. Ltd.²	320,000		1,883,451
Keio Electric Railway Co. Ltd.	640,000		3,405,141
Keyence Corp.	32,010		6,766,458
Kikkoman Corp.	320,000		2,756,269
Kinden Corp.²	320,000		1,952,357
Kintetsu Corp.²	1,920,000		6,597,820
Kirin Brewery Co. Ltd.	960,000		9,388,543
Kobe Steel, Ltd.	4,186,000		5,783,895
Komatsu Ltd.	960,000		5,658,965
Konami Co. Ltd.	96,000		2,080,122
Konica Minolta Holdings Inc.	480,000		6,274,819
Kubota Corp.	1,280,000		5,799,650
Kuraray Co. Ltd.	320,000		2,420,349
Kyocera Corp.	192,000		14,814,948
Kyowa Hakko Kogyo Co. Ltd.	320,000		2,227,984
Kyushu Electric Power Co. Inc.	448,000		8,380,781
Leopalace21 Corp.²	322,000		6,399,264
Mabuchi Motor Co. Ltd.²	32,000		2,259,567
Marubeni Corp.	1,600,000		3,617,603
Marui Co. Ltd.	352,000		4,247,813
Matsushita Electric Industrial Co. Ltd.	2,560,868		34,097,422
Meiji Dairies Corp.²	320,000		1,714,055
Meiji Seika Kaisha Ltd.	320,000		1,378,135
Meitec Corp.²	64,000		2,239,469
Millea Holdings Inc.	1,600		23,543,134
Minebea Co. Ltd.²	320,000		1,366,650
Mitsubishi Chemical Corp.	1,920,000		4,547,844
Mitsubishi Corp.	1,280,000		12,311,337
Mitsubishi Electric Corp.	1,920,000		8,751,155
Mitsubishi Estate Co. Ltd.	1,280,000		14,550,805
Mitsubishi Gas Chemical Co. Inc.	320,000		1,234,579
Mitsubishi Heavy Industries Ltd.	3,520,000		9,190,436
Mitsubishi Materials Corp.	1,280,000		2,629,940
Mitsubishi Rayon Co.	640,000		2,227,984
Mitsubishi Tokyo Financial Group Inc.	4,800		42,937,508


46		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI EAFE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
Mitsui & Co. Ltd.²	1,600,000	$	11,986,901
Mitsui Chemicals Inc.	640,000		2,842,403
Mitsui Engineering & Shipbuilding Co. Ltd.²	960,000		1,429,815
Mitsui Fudosan Co. Ltd.	960,000		10,663,317
Mitsui Mining & Smelting Co.	960,000		3,910,457
Mitsui O.S.K. Lines Ltd.	1,280,000		6,649,500
Mitsui Sumitomo Insurance Co. Ltd.	1,280,160		11,830,468
Mitsui Trust Holdings Inc.	640,000		4,478,938
Mitsukoshi Ltd.²	640,000		2,928,536
Mizuho Financial Group Inc.	8,648		32,743,762
Murata Manufacturing Co. Ltd.	288,000		14,289,534
Namco Ltd.²	64,000		1,613,566
NEC Corp.²	1,920,000		11,972,545
Net One Systems Co. Ltd.	966		3,128,850
NGK Insulators Ltd.	320,000		2,520,838
NGK Spark Plug Co. Ltd.²	320,000		3,120,901
Nichirei Corp.²	320,000		1,113,992
Nidec Corp.	64,200		5,961,778
Nikko Cordial Corp.	1,600,000		7,249,563
Nikon Corp.²	320,000		3,077,834
Nintendo Co. Ltd.	128,000		14,240,725
Nippon Express Co. Ltd.	960,000		5,073,258
Nippon Mining Holdings Inc.²	800,000		3,359,203
Nippon Oil Corp.	1,600,000		9,833,565
Nippon Sanso Corp.²	320,000		1,665,246
Nippon Sheet Glass Co. Ltd.	320,000		1,200,126
Nippon Steel Corp.	7,040,000		14,275,178
Nippon Telegraph & Telephone Corp.	6,080		30,275,896
Nippon Unipac Holding²	960		4,711,498
Nippon Yusen Kabushiki Kaisha	1,280,000		5,868,557
Nishimatsu Construction Co. Ltd.²	320,000		981,921
Nissan Motor Co. Ltd.	2,912,000		31,404,818
Nisshin Seifun Group Inc.	320,000		3,172,581
Nisshin Steel Co., Ltd.²	1,932,000		3,709,551
Nissin Food Products Co. Ltd.	96,000		2,428,962
Nitto Denko Corp.	192,200		8,035,997
NOK Corp.²	161,000		4,853,618
Nomura Holdings Inc.	2,240,000		30,709,434
NSK Ltd.	640,000		2,853,887
NTN Corp.²	640,000		3,324,750
NTT Data Corp.²	1,600		4,579,427
NTT DoCoMo Inc.	22,090		38,450,137
Obayashi Corp.	609,000		2,895,967
Oji Paper Co. Ltd.	960,000		6,149,926
Oki Electric Industry Co. Ltd.¹	640,000		2,296,891
Okumura Corp.	320,000		1,510,206
Olympus Corp.	320,000		6,187,251
Omron Corp.	284,900		6,096,510
Onward Kashiyama Co. Ltd.	322,000		4,385,591
Oracle Corp. Japan²	32,000		1,590,597
Oriental Land Co. Ltd.	64,000		3,990,848
ORIX Corp.	96,000		10,370,463
Osaka Gas Co. Ltd.	2,240,000		5,969,046
Pioneer Corp.	160,000		3,459,692
Promise Co. Ltd.	96,000		6,218,833
Rakuten, Inc.²	644		3,859,782
Resona Holdings Inc.^1,2	5,120,000		7,901,306
Ricoh Corp. Ltd.	640,000		12,460,634
Rohm Co. Ltd.	128,000		13,689,471
Sanden Corp.²	320,000		2,067,202
Sankyo Co. Ltd.	384,000		8,286,035
Sankyo Co. Ltd. Gunma	128,800		4,853,618
Sanyo Electric Co. Ltd.	1,920,000		7,321,340
Sapporo Breweries Ltd.²	640,000		2,394,509
Secom Co. Ltd.	320,000		12,920,013
Sega Corp.^1,2	160,000		2,088,735
Seiko Epson Corp.²	128,800		5,038,518
Seino Transportation Co. Ltd.	320,000		3,072,092
Sekisui Chemical Co. Ltd.	640,000		4,605,267
Sekisui House Ltd.²	640,000		6,437,037
Seven-Eleven Japan Co. Ltd.	320,000		9,819,210
Sharp Corp.	960,000		13,858,867
Shimano Inc.	128,000		3,100,803
Shimizu Corp.²	640,000		2,658,652
Shin-Etsu Chemical Co. Ltd.	416,000		14,108,654
Shinsei Bank, Ltd.²	966,000		5,269,642
Shionogi & Co. Ltd.²	320,000		5,710,646
Shiseido Co. Ltd.²	320,000		3,976,493
Shizuoka Bank Ltd.	640,000		5,202,458
Showa Denko K.K.²	1,280,000		2,859,629
Showa Shell Sekiyu K.K.	320,000		2,894,083


SCHEDULES OF INVESTMENTS		47

Schedule of Investments (Continued)

iSHARES^® MSCI EAFE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
Skylark Co.²	225,400	$	4,186,246
SMC Corp.	64,000		6,259,028
Softbank Corp.²	256,000		9,003,813
Sompo Japan Insurance Inc.	960,000		9,466,063
Sony Corp.	1,056,000		37,045,983
Stanley Electric Co. Ltd.²	220,900		3,365,378
Sumitomo Chemical Co. Ltd.	1,280,000		5,259,881
Sumitomo Corp.	1,284,000		8,962,828
Sumitomo Electric Industries Ltd.	962,000		9,149,163
Sumitomo Metal Industries Ltd.	4,480,000		4,823,471
Sumitomo Metal Mining Co. Ltd.²	640,000		3,818,581
Sumitomo Mitsui Financial Group Inc.²	4,480		26,971,244
Sumitomo Osaka Cement Co. Ltd.²	640,000		1,607,824
Sumitomo Realty & Development Co. Ltd.	640,000		7,286,887
Sumitomo Trust & Banking Co. Ltd. (The)	1,280,000		7,487,865
Suruga Bank Ltd. (The)²	320,000		2,210,758
Suzuken Co. Ltd.	74,440		2,170,652
T&D Holdings Inc.¹	170,950		7,929,761
Taiheiyo Cement Corp.	960,000		2,299,762
Taisei Corp.²	960,000		3,040,510
Taisho Pharmaceutical Co. Ltd.²	320,000		6,704,051
Takara Holdings Inc.²	320,000		2,334,216
Takashimaya Co. Ltd.²	320,000		2,974,474
Takeda Pharmaceutical Co. Ltd.	992,200		46,380,710
Takefuji Corp.²	86,030		6,175,048
TDK Corp.	128,000		8,843,031
Teijin Ltd.	960,000		3,333,363
Teikoku Oil Co. Ltd.²	640,000		3,319,008
Terumo Corp.	192,000		4,651,204
THK Co. Ltd.²	96,000		1,543,511
TIS Inc.	32,000		1,223,094
Tobu Railway Co. Ltd.²	960,000		3,789,870
Toda Corp.	320,000		1,269,032
Toho Co. Ltd.	256,000		3,709,479
Tohoku Electric Power Co. Inc.	512,000		8,406,621
Tokyo Broadcasting System	146,500		2,494,792
Tokyo Electric Power Co. Inc. (The)	1,280,000		28,998,250
Tokyo Electron Ltd.	224,400		10,972,859
Tokyo Gas Co. Ltd.²	3,200,000		11,427,033
Tokyu Corp.	1,280,000		5,868,557
TonenGeneral Sekiyu K.K.²	640,000		5,127,809
Toppan Printing Co. Ltd.	640,000		6,396,842
Toray Industries Inc.	1,280,000		6,063,793
Toshiba Corp.²	3,200,000		11,742,856
Tosoh Corporation	640,000		2,061,460
Tostem Inax Holding Corp.	320,480		6,512,828
TOTO Ltd.²	320,000		3,109,416
Toyo Seikan Kaisha Ltd.	320,000		5,053,161
Toyobo Co. Ltd.	640,000		1,613,566
Toyoda Gosei Co. Ltd.²	64,000		1,406,846
Toyota Industries Corp.	385,600		9,047,095
Toyota Motor Corp.	3,232,600		129,936,279
Trend Micro Inc.²	160,000		6,546,140
Ube Industries Ltd.^1,2	960,000		1,292,001
UFJ Holdings Inc.¹	4,482		17,975,452
Uni-Charm Corp.	64,000		3,353,461
Uny Co. Ltd.	322,000		3,697,995
USS Co. Ltd.²	54,740		4,420,259
West Japan Railway Co.	2,568		10,276,147
World Co. Ltd.	32,000		898,659
Yahoo! Japan Corp.¹	966		7,661,783
Yamada Denki Co. Ltd.²	96,000		3,316,137
Yamaha Corp.	188,700		2,861,271
Yamaha Motor Co. Ltd.²	322,000		4,925,845
Yamanouchi Pharmaceutical Co. Ltd.	352,000		12,064,421
Yamato Transport Co. Ltd.	640,000		10,180,970
Yokogawa Electric Corp.²	320,000		3,732,448

			2,031,179,018

NETHERLANDS – 4.82%
ABN AMRO Holding NV²	1,780,800		37,305,499
Aegon NV²	1,605,829		18,270,042
Akzo Nobel NV	299,037		9,871,902
ASML Holding NV^1,2	571,151		8,162,254
DSM NV²	109,440		5,494,404
Euronext NV²	128,960		3,437,487
Getronics NV^1,2	785,492		1,777,903
Hagemeyer NV^1,2	667,200		1,486,060
Heineken NV²	282,059		8,839,396
IHC Caland NV²	86,720		3,685,551
ING Groep NV²	2,004,394		46,526,306


48		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI EAFE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
Koninklijke Ahold NV¹	1,847,564	$	13,746,635
Koninklijke KPN NV²	2,360,721		17,451,047
Koninklijke Philips Electronics NV²	1,490,345		36,137,219
QIAGEN NV^1,2	173,440		1,664,240
Reed Elsevier NV²	795,200		10,167,387
Royal Dutch Petroleum Co.²	2,445,007		122,662,570
Royal Numico NV^1,2	169,942		5,301,229
TNT Post Group NV²	433,600		9,506,216
Unilever NV CVA²	655,368		40,358,900
Vedior NV	148,672		2,183,723
VNU NV²	270,850		7,157,672
Wereldhave NV²	53,760		4,414,201
Wolters Kluwer NV CVA²	338,474		5,696,931

			421,304,774

PORTUGAL – 0.48%
Banco Comercial Portugues SA Class R	2,825,997		5,852,058
Banco Espirito Santo e Comercial de Lisboa SA	384,640		6,274,833
Brisa-Auto Estradas de Portugal SA²	840,553		5,960,585
Electricidade de Portugal SA²	2,243,520		5,996,411
Portugal Telecom SGPS SA	1,425,125		14,618,439
PT Multimedia Servicos de Telecomunicacoes e Multimedia SGPS SA	70,118		1,510,248
Sonae SGPS SA	1,728,967		1,790,167

			42,002,741

SINGAPORE – 0.91%
Capitaland Ltd.²	3,520,000		3,211,623
Chartered Semiconductor Manufacturing Ltd.^1,2	1,600,000		948,424
City Developments Ltd.	960,000		3,403,167
ComfortDelGro Corp. Ltd.	2,240,000		1,627,197
Creative Technology Ltd.²	128,000		1,301,758
DBS Group Holdings Ltd.	1,169,000		10,530,001
Fraser & Neave Ltd.	320,030		2,640,957
Haw Par Corp. Ltd.	344,775		957,736
Keppel Corp. Ltd.	640,000		2,715,095
Neptune Orient Lines Ltd.	2,560,000		3,615,168
Oversea-Chinese Banking Corp. Ltd.	1,280,000		9,521,430
SembCorp Industries Ltd.	1,280,000		959,581
Singapore Airlines Ltd.²	609,000		3,928,461
Singapore Press Holdings, Ltd.	1,352,750		3,380,401
Singapore Technologies Engineering Ltd.	3,200,000		3,923,870
Singapore Telecommunications Ltd.	7,680,000		10,220,660
ST Assembly Test Services Ltd.^1,2	960,000		641,581
United Overseas Bank Ltd.	1,600,000		12,738,631
Venture Corp. Ltd.²	320,000		3,012,640

			79,278,381

SPAIN – 3.60%
Abertis Infraestructuras SA²	358,370		6,079,265
Acciona SA²	40,000		2,390,563
Acerinox SA²	256,000		3,547,511
Actividades de Construcciones y Servicios SA²	330,411		5,517,463
Altadis SA²	345,601		10,801,601
Amadeus Global Travel Distribution SA Class A²	442,560		2,807,962
Antena 3 Television SA¹	19,248		1,017,322
Banco Bilbao Vizcaya Argentaria SA²	3,850,242		51,268,617
Banco Popular Espanol SA²	175,040		9,428,481
Banco Santander Central Hispano SA²	5,240,640		49,844,801
Endesa SA²	1,097,600		19,980,407
Gas Natural SDG SA²	226,890		5,242,021
Grupo Ferrovial SA²	87,680		3,824,523
Iberdrola SA²	930,562		19,045,952
Industria de Diseno Textil SA²	269,440		6,169,941
Promotora de Informaciones SA²	211,200		3,407,275
Repsol YPF SA²	1,115,520		23,691,055
Sogecable SA^1,2	67,567		2,501,429
Telefonica SA²	5,516,556		80,430,473
Union Fenosa SA²	273,600		5,790,865
Zeltia SA Rights²	210,880		1,368,462

			314,155,989

SWEDEN – 2.37%
ASSA Abloy AB Class B²	385,124		4,566,946
Atlas Copco AB Class A²	137,431		4,924,944
Atlas Copco AB Class B	96,000		3,165,014
Electrolux AB Class B²	343,011		5,989,585
Eniro AB²	231,199		1,785,082
Hennes & Mauritz AB Class B²	560,093		14,414,883


SCHEDULES OF INVESTMENTS		49

Schedule of Investments (Continued)

iSHARES^® MSCI EAFE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
Hoganas AB Class B²	64,000	$	1,463,663
Holmen AB Class B	74,240		2,128,357
Lundin Petroleum AB^1,2	553,730		2,785,282
Modern Times Group AB Class B^1,2	64,000		1,080,025
Nobel Biocare AB^1,3	500		36,813
Nordea AB²	2,716,963		18,499,240
Sandvik AB²	282,240		9,691,323
Scania AB Class B	137,549		4,579,649
Securitas AB Class B	380,800		4,292,368
Skandia Forsakrings AB²	1,323,200		5,155,616
Skandinaviska Enskilda Banken AB Class A²	640,000		8,631,856
Skanska AB Class B²	576,000		4,953,935
SKF AB Class B²	96,000		3,646,646
SSAB Svenskt Stal AB Series A²	148,480		2,660,447
Svenska Cellulosa AB Class B²	212,003		7,845,926
Svenska Handelsbanken AB Class A²	673,280		12,546,298
Swedish Match AB²	602,560		5,889,053
Tele2 AB Class B²	97,280		3,866,404
Telefonaktiebolaget LM Ericsson Class B¹	16,868,955		45,063,602
Telia AB²	1,973,822		8,796,663
Trelleborg AB Class B²	232,960		3,582,179
Volvo AB Class A²	136,445		4,720,696
Volvo AB Class B²	276,160		9,896,402

			206,658,897

SWITZERLAND – 7.23%
ABB Ltd.¹	2,197,136		11,867,128
Adecco SA²	140,914		6,542,613
Ciba Specialty Chemicals AG¹	84,160		5,805,386
Clariant AG Registered	244,264		3,293,512
Compagnie Financiere Richemont AG	613,440		15,847,260
Credit Suisse Group¹	1,402,252		44,993,508
Geberit AG Registered	5,642		3,792,645
Givaudan SA Registered	9,920		5,683,636
Holcim Ltd.²	214,813		11,241,435
Kudelski SA Bearer^1,2	36,527		1,034,982
Kuoni Reisen Holding AG	5,926		2,422,557
Logitech International SA Registered¹	59,882		2,590,744
Lonza Group AG Registered²	61,440		2,715,779
Micronas Semiconductor Holdings AG^1,2	51,732		2,151,204
Nestle SA	476,006		121,666,441
Nobel Biocare Holding AG²	27,185		3,723,196
Novartis AG	2,743,300		122,760,718
Roche Holding AG Genusschein	804,160		79,514,003
Serono SA	7,714		4,775,462
Societe Generale de Surveillance Holding SA	4,976		2,679,848
Sulzer AG Registered	5,612		1,460,739
Swatch Group (The) AG Class B²	46,505		5,925,130
Swatch Group (The) AG Registered²	129,932		3,371,823
Swiss Re²	397,335		23,215,532
Swisscom AG²	33,236		10,807,188
Syngenta AG¹	129,600		10,712,627
Synthes Inc.	56,265		5,541,400
UBS AG Registered	1,337,670		89,502,132
Unaxis Holding AG Class R²	14,559		1,505,005
Zurich Financial Services AG¹	171,865		24,315,133

			631,458,766

UNITED KINGDOM – 25.48%
Aegis Group PLC	1,197,440		1,823,644
Aggreko PLC	280,960		790,636
AMEC PLC	324,480		1,606,413
AMVESCAP PLC	783,040		4,029,691
ARM Holdings PLC	1,324,480		2,534,947
Associated British Ports Holdings PLC	365,120		2,679,048
AstraZeneca PLC	1,928,017		86,282,722
Aviva PLC	2,585,976		26,333,821
BAA PLC	1,219,596		12,408,447
BAE Systems PLC	3,657,675		14,217,152
Balfour Beatty PLC	589,440		2,840,448
Barclays PLC⁴	7,504,676		62,775,639
Barratt Developments PLC	331,200		3,399,818
BBA Group PLC	503,680		2,399,702
Berkeley Group (The) PLC	184,640		3,911,588
BG Group PLC	4,249,645		26,486,921
BHP Billiton PLC	2,885,843		26,291,284
BOC Group PLC²	530,196		9,091,792
Boots Group PLC	918,080		11,402,566
BP PLC	25,382,981		238,173,638


50		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI EAFE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
BPB PLC	645,760	$	4,617,865
Brambles Industries PLC	890,880		3,446,594
British Airways PLC¹	719,360		3,018,487
British American Tobacco PLC	1,807,040		27,471,059
British Land Co. PLC²	615,830		7,872,588
British Sky Broadcasting Group PLC	1,437,120		15,797,585
BT Group PLC	10,026,240		34,413,308
Bunzl PLC	631,680		5,054,185
Cable & Wireless PLC	2,777,600		5,480,256
Cadbury Schweppes PLC	2,341,069		19,167,669
Capita Group PLC	827,520		4,604,699
Carnival PLC	197,315		9,651,921
Centrica PLC	4,773,440		20,528,820
Close Brothers Group PLC	166,080		2,014,395
Cobham PLC	254,203		6,356,012
Compass Group PLC	2,654,489		15,434,510
Corus Group PLC¹	4,435,200		3,669,661
Daily Mail and General Trust PLC Class A	408,000		4,982,044
De La Rue PLC	247,040		1,464,490
Diageo PLC	3,565,440		44,185,559
Dixons Group PLC	2,419,200		7,060,707
Electrocomponents PLC	552,640		3,293,718
EMAP PLC	302,720		4,001,998
EMI Group PLC	1,027,520		4,194,768
Enterprise Inns PLC	462,194		4,479,741
Exel PLC	281,280		3,703,214
FirstGroup PLC	611,200		3,170,373
FKI PLC	749,120		1,648,307
Friends Provident PLC	2,268,800		5,414,980
George Wimpey PLC	508,013		3,420,356
GKN PLC	890,880		3,726,048
GlaxoSmithKline PLC	6,739,064		136,884,451
Great Portland Estates PLC	380,928		1,953,410
Group 4 Securicor PLC¹	1,695,464		3,607,246
GUS PLC	1,159,360		18,151,931
Hammerson PLC	356,800		4,489,855
Hanson PLC	957,760		6,657,414
Hays PLC	2,160,000		4,791,979
HBOS PLC	4,483,722		58,093,148
Hilton Group PLC	1,968,640		9,334,520
HSBC Holdings PLC	12,298,138		180,585,659
ICAP PLC	861,395		3,328,608
IMI PLC	522,560		3,437,526
Imperial Chemical Industries PLC	1,475,840		6,092,093
Imperial Tobacco Group PLC	850,560		18,498,542
InterContinental Hotels Group PLC	920,737		9,786,366
International Power PLC¹	1,084,160		2,893,163
Invensys PLC¹	6,673,658		1,941,714
Invensys PLC Deferred^1,3	3,107,431		—
ITV PLC	4,906,352		9,323,444
J Sainsbury PLC²	1,660,955		8,147,431
Johnson Matthey PLC	302,400		4,982,087
Kelda Group PLC	464,000		4,353,806
Kesa Electricals PLC	660,821		3,376,692
Kidde PLC	879,040		1,902,203
Kingfisher PLC	2,705,925		13,974,474
Land Securities Group PLC	593,940		12,236,969
Legal & General Group PLC	7,990,255		14,093,983
Lloyds TSB Group PLC	6,718,720		50,367,289
LogicaCMG PLC	754,932		2,258,266
Man Group PLC	336,640		8,007,092
Marconi Corp. PLC¹	265,960		3,022,719
Marks & Spencer Group PLC²	2,569,234		16,211,922
MFI Furniture Group PLC	1,394,457		3,347,190
Misys PLC	609,280		2,033,079
Mitchells & Butlers PLC	639,800		3,138,391
National Express Group PLC	302,899		3,773,026
National Grid Transco PLC	3,479,438		27,539,069
Next PLC	304,739		8,295,665
Novar PLC	765,440		1,614,621
Pearson PLC	909,440		10,195,499
Persimmon PLC	304,960		3,241,371
Pilkington PLC	1,603,520		2,799,284
Provident Financial PLC	290,240		2,981,996
Prudential Corp. PLC	2,352,235		19,398,108
Punch Taverns PLC	562,055		4,870,158
Rank Group PLC	847,680		4,558,879
Reckitt Benckiser PLC	652,480		17,844,994
Reed International PLC	1,457,020		12,903,153
Rentokil Initial PLC	2,185,920		5,644,480
Reuters Group PLC	1,665,280		9,856,883


SCHEDULES OF INVESTMENTS		51

Schedule of Investments (Continued)

iSHARES^® MSCI EAFE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
Rexam PLC	668,260	$	5,182,817
Rio Tinto PLC	1,266,631		33,006,363
RMC Group PLC	365,760		3,980,721
Rolls-Royce Group PLC	1,804,357		7,915,733
Royal & Sun Alliance Insurance Group PLC	3,694,400		5,189,718
Royal Bank of Scotland Group PLC	3,411,150		95,898,468
SABMiller PLC	897,280		11,437,928
Sage Group PLC	1,564,800		4,915,620
Scottish & Newcastle PLC	1,099,200		7,975,373
Scottish & Southern Energy PLC	1,001,280		13,082,287
Scottish Power PLC	2,070,561		14,834,934
Serco Group PLC	584,960		2,138,078
Severn Trent PLC	396,092		5,740,580
Shell Transport & Trading Co. PLC	11,487,547		83,244,776
Signet Group PLC	2,062,720		4,069,784
Slough Estates PLC	604,480		4,913,498
Smith & Nephew PLC	1,066,668		10,765,237
Smiths Group PLC	678,400		9,005,546
SSL International PLC	386,560		2,091,246
Tate & Lyle PLC	568,320		3,389,754
Taylor Woodrow PLC	876,160		3,967,200
Tesco PLC	8,683,918		40,188,784
3i Group PLC	711,178		7,384,410
Tomkins PLC	972,800		4,462,273
Trinity Mirror PLC	533,368		6,032,797
Unilever PLC	3,293,760		29,079,206
United Business Media PLC	386,560		3,472,524
United Utilities PLC	690,240		6,470,385
Vodafone Group PLC	77,416,353		167,877,488
Whitebread PLC	402,880		6,000,134
William Hill PLC	509,760		4,783,181
Wolseley PLC	676,720		10,521,472
WPP Group PLC	1,339,200		12,383,339
Yell Group PLC	751,680		4,585,924

			2,225,635,260

TOTAL COMMON STOCKS (Cost: $8,179,444,849)			8,660,714,206


*Security*	Shares or Principal		*Value*
PREFERRED STOCKS – 0.57%

AUSTRALIA – 0.28%
News Corp. Ltd. (The)		3,033,600	$	24,367,213

				24,367,213

GERMANY – 0.26%
Fresenius Medical Care AG²		48,000		2,483,219
Henkel KGaA²		83,840		6,153,252
Porsche AG²		10,880		7,042,664
Prosieben Satellite Media AG²		128,176		2,211,370
Volkswagen AG²		155,640		4,334,164

				22,224,669

ITALY – 0.03%
Banca Intesa SpA²		991,495		2,817,156

				2,817,156

TOTAL PREFERRED STOCKS (Cost: $46,084,501)				49,409,038

SHORT-TERM INVESTMENTS – 21.64%

MONEY MARKET FUNDS – 5.38%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^4,5		290,506,337		290,506,337
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^4,5		159,652,283		159,652,283
BlackRock Temp Cash Money Market Fund⁵		7,326,816		7,326,816
Short-Term Investment Co. - Prime Money Market Portfolio⁵		12,487,128		12,487,128

				469,972,564

FLOATING RATE NOTES – 5.25%
Beta Finance Inc.
1.30%, 05/04/05^5,6	$	8,708,306		8,706,994
1.31%, 10/12/04^5,6		7,256,922		7,256,782
1.34%, 09/15/04^5,6		14,513,844		14,513,669
1.42%, 03/15/05^5,6		7,256,922		7,260,522
1.48%, 08/23/04^5,6		7,256,922		7,257,269


52		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI EAFE INDEX FUND

July 31, 2004


*Security*	*Principal*		*Value*
Canadian Imperial Bank of Commerce
1.24%, 10/07/04⁵	$	10,885,383	$	10,885,087
1.38%, 11/22/04⁵		3,628,461		3,628,546
1.40%, 10/29/04⁵		14,513,844		14,513,757
CC USA Inc.
1.30%, 05/04/05^5,6		14,513,844		14,511,657
1.61%, 07/29/05^5,6		14,513,844		14,509,526
Depfa Bank PLC
1.27%, 06/15/05⁵		14,513,844		14,513,844
Dorada Finance Inc.
1.61%, 07/29/05^5,6		12,046,490		12,042,906
Five Finance Inc.
1.42%, 04/29/05^5,6		11,611,075		11,610,216
HBOS Treasury Services PLC
1.24%, 04/01/05⁵		9,288,860		9,288,244
1.58%, 04/22/05⁵		14,513,844		14,513,844
K2 USA LLC
1.34%, 08/16/04^5,6		3,628,461		3,628,440
1.41%, 09/27/04^5,6		15,674,951		15,674,593
1.49%, 06/10/05^5,6		14,513,844		14,512,325
1.61%, 07/25/05^5,6		7,256,922		7,255,498
Links Finance LLC
1.33%, 04/15/05⁵		14,513,844		14,511,808
1.68%, 04/25/05⁵		14,513,844		14,520,728
Nationwide Building Society
1.59%, 07/28/05^5,6		14,513,844		14,513,844
1.63%, 12/09/04⁵		12,046,490		11,976,129
Northern Rock PLC
1.56%, 01/13/05⁵^,6		13,788,152		13,788,152
Permanent Financing PLC
1.31%, 03/10/05⁵		14,513,844		14,513,844
1.32%, 12/10/04⁵		7,256,922		7,256,922
1.34%, 06/10/05⁵		6,531,230		6,531,230
Sigma Finance Inc.
1.35%, 11/15/04⁵		14,513,844		14,513,525
1.52%, 10/07/04⁵		14,513,844		14,513,320
Tango Finance Corp.
1.20%, 05/17/05^5,6		12,046,490		12,046,015
1.23%, 02/25/05^5,6		8,127,753		8,126,834
1.32%, 04/07/05^5,6		5,326,581		5,326,219
1.34%, 01/18/05^5,6		6,386,091		6,385,792
1.42%, 07/25/05^5,6		14,513,844		14,512,420
WhistleJacket Capital LLC
1.26%, 10/20/04^5,6		3,595,079		3,585,139
1.34%, 09/15/04^5,6		7,256,922		7,256,747
1.38%, 07/15/05^5,6		10,885,383		10,883,279
1.48%, 06/15/05^5,6		7,256,922		7,255,479
White Pine Finance LLC
1.21%, 05/20/05^5,6		6,531,230		6,530,709
1.33%, 04/15/05^5,6		10,885,383		10,883,857
1.33%, 07/05/05^5,6		7,256,922		7,255,455
1.34%, 11/15/04^5,6		8,708,306		8,708,306
1.35%, 06/15/05^5,6		5,950,676		5,950,676
1.40%, 08/26/04^5,6		7,256,922		7,256,849
1.55%, 07/11/05^5,6		3,628,461		3,628,076

				458,315,073

COMMERCIAL PAPER – 3.96%
Alpine Securitization Corp.
1.31%, 08/12/04⁵		7,256,922		7,254,281
Amsterdam Funding Corp.
1.30%, 08/13/04⁵		10,885,383		10,881,059
1.33%, 08/16/04⁵		14,513,844		14,506,337
1.35%, 08/20/04⁵		4,354,153		4,351,214
1.37%, 08/24/04⁵		5,079,845		5,075,593
Barton Capital Corp.
1.29%, 08/10/04⁵		7,256,922		7,254,842
1.30%, 08/13/04⁵		5,965,480		5,963,110
1.35%, 08/18/04⁵		3,628,461		3,626,284
Blue Ridge Asset Funding Corp.
1.29%, 08/06/04⁵		7,256,922		7,255,882
Corporate Asset Funding
1.42%, 09/03/04⁵		4,354,153		4,348,657
CRC Funding LLC
1.42%, 09/03/04⁵		7,256,922		7,247,762
Edison Asset Securitization
1.07%, 09/21/04⁵		7,256,922		7,246,137
1.45%, 11/09/04⁵		14,513,844		14,455,970
1.59%, 12/02/04⁵		14,513,844		14,435,638
Falcon Asset Securitization Corp.
1.29%, 08/09/04⁵		13,788,152		13,784,693
1.30%, 08/03/04⁵		7,256,922		7,256,661


SCHEDULES OF INVESTMENTS		53

Schedule of Investments (Continued)

iSHARES^® MSCI EAFE INDEX FUND

July 31, 2004


*Security*	*Principal*		*Value*
1.34%, 08/19/04⁵	$	7,256,922	$	7,252,330
1.37%, 08/24/04⁵		5,805,538		5,800,677
Ford Credit Auto Receivables
1.85%, 01/14/05⁵		7,256,922		7,195,389
GIRO Funding US Corp.
1.55%, 10/15/04⁵		9,517,453		9,487,129
Grampian Funding LLC
1.26%, 10/22/04⁵		14,513,844		14,472,860
1.44%, 10/27/04⁵		14,513,844		14,463,916
1.59%, 11/30/04⁵		7,256,922		7,218,460
Jupiter Securitization Corp.
1.30%, 08/12/04⁵		7,256,922		7,254,301
1.37%, 08/20/04⁵		9,709,907		9,703,255
Park Avenue Receivables Corp.
1.35%, 08/19/04⁵		7,256,922		7,252,296
Preferred Receivables Funding Corp.
1.29%, 08/05/04⁵		6,703,654		6,702,934
1.36%, 08/23/04⁵		7,256,922		7,251,165
Receivables Capital Corp.
1.30%, 08/12/04⁵		5,079,845		5,078,011
1.34%, 08/16/04⁵		867,928		867,476
1.35%, 08/18/04⁵		6,531,230		6,527,326
1.35%, 08/19/04⁵		2,467,353		2,465,781
Scaldis Capital LLC
1.34%, 08/16/04⁵		14,513,844		14,506,281
1.37%, 08/20/04⁵		2,177,077		2,175,585
1.40%, 08/25/04⁵		18,142,305		18,126,078
Sydney Capital Corp.
1.25%, 10/22/04⁵		4,830,207		4,816,622
1.31%, 08/12/04⁵		5,805,538		5,803,425
Thames Asset Global Securitization No. 1 Inc.
1.30%, 08/12/04⁵		7,659,536		7,656,770
1.34%, 08/16/04⁵		4,063,876		4,061,759
1.36%, 08/20/04⁵		10,885,383		10,877,981
1.37%, 08/19/04⁵		4,054,152		4,051,529
1.37%, 08/20/04⁵		1,886,800		1,885,507
Windmill Funding Corp.
1.29%, 08/06/04⁵		18,142,305		18,139,704

				346,038,667

TIME DEPOSITS – 3.46%
Abbey National Treasury Services PLC
1.25%, 01/06/05⁵		14,513,844		14,513,844
1.33%, 02/10/05⁵		7,256,922		7,256,349
1.39%, 02/02/05⁵		7,256,922		7,256,373
1.39%, 04/08/05⁵		10,159,691		10,158,651
1.40%, 10/25/04⁵		14,513,844		14,513,343
Bank of New York
1.39%, 11/01/04⁵		14,513,844		14,513,482
1.60%, 12/03/04⁵		3,628,461		3,627,842
Bank of Nova Scotia
1.13%, 10/06/04⁵		14,513,844		14,513,844
1.24%, 10/07/04⁵		10,885,383		10,885,186
1.42%, 10/29/04⁵		10,885,383		10,885,580
National City Bank (Cleveland, Ohio)
1.25%, 01/06/05⁵		14,513,844		14,514,152
1.35%, 06/10/05⁵		7,256,922		7,258,862
1.36%, 06/23/05⁵		14,513,844		14,509,967
Norddeutsche Landesbank
1.59%, 07/27/05⁵		14,513,844		14,508,820
Nordea Bank PLC
2.11%, 06/07/05⁵		14,513,844		14,511,405
Prudential Funding LLC
1.60%, 12/01/04⁵		7,256,922		7,217,896
Toronto-Dominion Bank
1.22%, 03/23/05⁵		25,399,227		25,396,386
1.34%, 02/10/05⁵		5,805,538		5,805,079
1.41%, 11/01/04⁵		10,885,383		10,885,112
1.77%, 05/10/05⁵		7,256,922		7,256,366
1.90%, 05/11/05⁵		7,256,922		7,256,364
UBS Finance (Delaware)
1.10%, 09/08/04⁵		14,513,844		14,497,435
1.11%, 12/17/04⁵		21,770,766		21,678,802
1.13%, 08/09/04⁵		14,513,844		14,510,655
1.14%, 09/29/04⁵		14,513,844		14,487,304

				302,419,099

REPURCHASE AGREEMENTS – 2.10%
Banc of America Securities LLC
1.34%, 08/02/04^5,7		37,735,994		37,735,994


54		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI EAFE INDEX FUND

July 31, 2004


*Security*	*Principal*		*Value*
Bank of America, N.A.
1.37%, 08/02/04^5,7	$	72,569,219	$	72,569,219
Goldman Sachs & Co.
1.37%, 08/02/04^5,7		72,569,219		72,569,219

				182,874,432

U.S. GOVERNMENT AGENCY NOTES – 0.88%
Federal Home Loan Mortgage Corp.
1.28%, 08/19/04⁵		5,805,538		5,802,028
1.63%, 04/15/05⁵		10,159,691		10,182,450
1.80%, 01/18/05⁵		6,748,937		6,691,909
1.80%, 01/19/05⁵		7,256,922		7,195,238
2.06%, 05/31/05⁵		7,235,587		7,110,548
Federal National Mortgage Association
1.28%, 08/20/04⁵		18,867,997		18,855,921
2.33%, 07/22/05⁵		21,770,766		21,273,032

				77,111,126

MEDIUM-TERM NOTES – 0.61%
CC USA Inc.
1.29%, 04/15/05^5,6		14,513,844		14,512,826
1.51%, 02/15/05^5,6		9,433,999		9,441,939
Dorada Finance Inc.
1.24%, 08/09/04^5,6		3,628,461		3,628,451
1.48%, 01/18/05^5,6		10,885,383		10,885,134
K2 USA LLC
1.46%, 01/12/05^5,6		7,256,922		7,256,599
Sigma Finance Inc.
1.24%, 08/06/04⁵		3,628,461		3,628,457
WhistleJacket Capital LLC
1.32%, 02/04/05^5,6		3,628,461		3,628,090

				52,981,496

TOTAL SHORT-TERM INVESTMENTS (Cost: $1,889,712,457)				1,889,712,457

TOTAL INVESTMENTS IN SECURITIES - 121.37% (Cost: $10,115,241,807)				10,599,835,701
Other Assets, Less Liabilities – (21.37%)				(1,866,094,538	)

NET ASSETS - 100.00%			$	8,733,741,163

ADR - American Depositary Receipts

¹	Non-income earning security.

²	All or a portion of this security represents a security on loan. See Note 5.

³	Security valued at fair value in accordance with procedures approved by the Board of Trustees. See Note 1.

⁴	Issuer is an affiliate of the Fund’s investment adviser. See Note 2.

⁵	All or a portion of this security represents an investment of securities lending collateral. See Note 5.

⁶	Security exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

⁷	Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.61% to 7.00% and maturity dates ranging from 7/1/13 to 7/1/34.

SECTOR DIVERSIFICATION


*Sector*	% of Net Assets		*Value*
Financial	25.72	%	$	2,246,383,242
Consumer Non-Cyclical	17.53			1,530,776,455
Consumer Cyclical	11.79			1,029,751,049
Communications	11.71			1,022,790,924
Industrial	10.94			955,228,163
Energy	8.54			746,005,224
Basic Materials	5.38			470,136,677
Utilities	4.74			413,870,368
Technology	2.60			227,357,667
Diversified	0.78			67,823,475
Short-Term and Other Net Assets	0.27			23,617,919

TOTAL	100.00	%	$	8,733,741,163

See notes to financial statements.


SCHEDULES OF INVESTMENTS		55

Schedule of Investments

iSHARES^® NYSE COMPOSITE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
COMMON STOCKS – 99.90%

ADVERTISING – 0.21%
ADVO Inc.	30	$	930
Catalina Marketing Corp.^1,2	50		998
Donnelley (R.H.) Corp.¹	30		1,361
Getty Images Inc.¹	45		2,458
Harte-Hanks Inc.	55		1,329
Interpublic Group of Companies Inc.¹	430		5,500
Omnicom Group Inc.	195		14,044
Publicis Groupe ADR	130		3,531
SITEL Corp.¹	55		165

			30,316

AEROSPACE & DEFENSE – 1.26%
AAR Corp.^1,2	30		312
Alliant Techsystems Inc.¹	40		2,518
Armor Holdings Inc.¹	25		912
Boeing Co. (The)	735		37,301
CAE Inc. (Canada)	255		1,216
Curtiss-Wright Corp.	10		537
Curtiss-Wright Corp. Class B	5		257
DRS Technologies Inc.¹	25		893
Ducommun Inc.¹	10		195
EDO Corp.	15		355
Esterline Technologies Corp.¹	20		628
Fairchild Corp. (The) Class A¹	15		65
GenCorp. Inc.	40		472
General Dynamics Corp.	170		16,799
Goodrich (B.F.) Co.	120		3,880
HEICO Corp.²	5		88
HEICO Corp. Class A	10		134
L-3 Communications Holdings Inc.	100		6,115
Lockheed Martin Corp.	370		19,606
Moog Inc. Class A¹	20		727
Northrop Grumman Corp.	360		18,936
Orbital Sciences Corp.^1,2	50		572
Raytheon Co.	430		14,426
Rockwell Collins Inc.	170		5,817
Sequa Corp. Class A¹	5		261
Teledyne Technologies Inc.¹	30		650
Titan Corp. (The)¹	85		1,017
Triumph Group Inc.^1,2	15		495
United Defense Industries Inc.¹	25		866
United Industrial Corp.	10		245
United Technologies Corp.	530		49,555

			185,850

AGRICULTURE – 1.06%
Altria Group Inc.	2,095		99,722
Bunge Ltd.	105		4,214
Delta & Pine Land Co.	35		786
DIMON Inc.	45		243
Gallaher Group PLC ADR	170		8,107
Imperial Tobacco Group ADR	375		16,425
Loews Corp - Carolina Group	55		1,307
Monsanto Co.	275		9,971
R.J. Reynolds Tobacco Holdings Inc.²	85		6,116
Standard Commercial Corp.	15		234
Tejon Ranch Co.¹	10		333
Universal Corp.	25		1,206
UST Inc.	170		6,451
Vector Group Ltd.	20		316

			155,431

AIRLINES – 0.15%
Air France ADR¹	132		2,066
AirTran Holdings Inc.^1,2	85		948
Alaska Air Group Inc.¹	30		625
America West Holdings Corp. Class B^1,2	35		213
AMR Corp.^1,2	165		1,391
British Airways PLC ADR¹	55		2,310
China Southern Airlines Co. Ltd. ADR¹	25		430
Continental Airlines Inc. Class B^1,2	70		629
Delta Air Lines Inc.^1,2	115		597
ExpressJet Holdings Inc.¹	25		272
KLM Royal Dutch Airlines ADR^1,3	45		565
Lan Chile SA ADR	40		774
Midwest Air Group Inc.^1,2	20		74
Southwest Airlines Co.	735		10,635

			21,529

APPAREL – 0.33%
Benetton Group SpA ADR	30		653
Carter’s Inc.¹	5		136
Coach Inc.¹	190		8,130
Gildan Activewear Inc. (Canada)¹	20		528


56		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® NYSE COMPOSITE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
Guess? Inc.¹	10	$	162
Hartmarx Corp.¹	35		264
Jones Apparel Group Inc.	130		4,855
Kellwood Co.	30		1,204
Liz Claiborne Inc.²	115		4,162
Nike Inc. Class B	180		13,088
Oxford Industries Inc.²	15		594
Phillips-Van Heusen Corp.	25		474
Polo Ralph Lauren Corp.	55		1,813
Quiksilver Inc.¹	55		1,186
Reebok International Ltd.	50		1,703
Russell Corp.	30		531
Skechers U.S.A. Inc. Class A^1,2	20		275
Stride Rite Corp.	40		416
Tefron Ltd.¹	10		43
Timberland Co. Class A¹	20		1,161
Tommy Hilfiger Corp.¹	95		1,330
Unifi Inc.¹	55		157
VF Corp.	90		4,501
Wolverine World Wide Inc.	40		935

			48,301

AUTO MANUFACTURERS – 1.93%
Brilliance China Automotive Holdings Ltd. ADR	25		627
DaimlerChrysler AG (Germany)²	845		37,932
Fiat SpA ADR¹	575		4,548
Ford Motor Co.	1,815		26,717
General Motors Corp.²	475		20,491
Honda Motor Co. Ltd. ADR	2,010		48,783
Huffy Corp.¹	15		15
Navistar International Corp.¹	65		2,337
Oshkosh Truck Corp.	35		1,854
Titan International Inc.	15		150
Toyota Motor Corp. ADR²	1,738		139,040
Wabash National Corp.¹	25		722

			283,216

AUTO PARTS & EQUIPMENT – 0.33%
American Axle & Manufacturing Holdings Inc.	30		1,030
ArvinMeritor Inc.	70		1,391
Autoliv Inc. (Sweden)	100		4,209
Bandag Inc.²	5		223
Bandag Inc. Class A	5		207
BorgWarner Inc.	60		2,831
China Yuchai International Ltd. (China)	25		430
Collins & Aikman Corp.¹	20		102
Cooper Tire & Rubber Co.	75		1,759
Dana Corp.	155		2,990
Delphi Corp.	510		4,850
Goodyear Tire & Rubber Co. (The)^1,2	180		1,971
Johnson Controls Inc.	195		11,008
Lear Corp.	70		3,859
Magna International Inc. Class A (Canada)	100		8,050
Miller Industries Inc.¹	5		51
Raytech Corp.¹	5		7
Standard Motor Products Inc.	15		214
Superior Industries International Inc.²	20		654
Tenneco Automotive Inc.¹	40		556
Tower Automotive Inc.^1,2	55		173
TRW Automotive Holdings Corp.¹	25		520
Visteon Corp.	130		1,336

			48,421

BANKS – 10.54%
ABN AMRO Holding NV ADR²	1,716		35,788
Allied Irish Banks PLC ADR²	435		13,376
AmSouth Bancorp	360		8,831
Assurant Inc	95		2,318
Australia & New Zealand Banking Group Ltd. ADR	370		23,436
Banco Bilbao Vizcaya Argentaria Chile ADR	5		115
Banco Bilbao Vizcaya Argentaria SA ADR	3,500		46,130
Banco de Chile ADR	15		473
Banco Latinoamericano de Exportaciones SA	30		471
Banco Santander Central Hispano SA ADR²	4,920		46,543
Banco Santander Chile SA ADR	65		1,729
BancorpSouth Inc.	75		1,584
Bank of America Corp.	2,074		176,311


SCHEDULES OF INVESTMENTS		57

Schedule of Investments (Continued)

iSHARES^® NYSE COMPOSITE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
Bank of Hawaii Corp.	55	$	2,471
Bank of Ireland ADR	235		12,356
Bank of Montreal (Canada)	515		21,450
Bank of New York Co. Inc. (The)	800		22,984
Bank of Nova Scotia (Canada)	1,040		28,631
Banknorth Group Inc.	170		5,425
Barclays PLC ADR^2,4	1,695		57,325
BB&T Corp.	565		21,882
BBVA Banco Frances SA ADR¹	25		137
Canadian Imperial Bank of Commerce (Canada)	380		18,924
Capitol Bancorp Ltd.	10		258
Central Pacific Financial Corp.	15		406
Charter One Financial Inc.	230		10,214
Chittenden Corp.²	40		1,359
City National Corp.	45		2,902
Colonial BancGroup Inc. (The)	130		2,508
Comerica Inc.	165		9,648
Commerce Bancorp Inc.²	80		4,027
Community Bank System Inc.	30		675
Credicorp Ltd. (Peru)	35		444
Credit Suisse Group PLC ADR	1,235		39,681
Cullen/Frost Bankers Inc.	55		2,366
Deutsche Bank AG (Germany)	600		41,700
Espirito Santo Financial Group SA ADR	50		1,063
First Bancorp	40		1,698
First Commonwealth Financial Corp.	60		767
First Horizon National Corp.²	130		5,635
First Marblehead Corp. (The)¹	15		629
First National Bankshares of Florida²	46		818
First Republic Bank	15		649
FNB Corp.²	50		1,006
Fremont General Corp.²	70		1,315
Genworth Financial Inc. Class A¹	149		3,388
HDFC Bank Ltd. ADR	100		2,708
Hibernia Corp. Class A	160		4,048
Hong Kong & Shanghai Banking ADR²	2,270		167,617
Hudson United Bancorp	45		1,541
ICICI Bank Ltd. ADR	245		3,190
Irwin Financial Corp.²	20		535
KeyCorp	430		12,977
Kookmin Bank ADR²	315		8,688
Lloyds TSB Group PLC ADR	1,440		43,603
M&T Bank Corp.	95		8,857
Marshall & Ilsley Corp.	215		8,258
Mellon Financial Corp.	445		12,229
Mitsubishi Tokyo Financial Group Inc. ADR	6,655		60,294
National Australia Bank Ltd. ADR	310		29,196
National Bank of Greece SA ADR	1,579		7,011
National City Corp.	565		20,622
National Commerce Financial Corp.	210		6,825
North Fork Bancorp Inc.²	155		6,053
Old National Bancorp	70		1,666
Oriental Financial Group Inc.²	15		382
Petrobras Energia Participaciones SA ADR^1,2	90		891
PNC Financial Services Group	295		14,927
R&G Financial Corp. Class B	30		1,052
Regions Financial Corp.	478		14,192
Royal Bank of Canada (Canada)	675		31,259
Sanpaolo IMI SpA ADR	485		11,087
Santander BanCorp	6		126
State Street Corp.	345		14,769
Sterling Bancorp	15		404
SunTrust Banks Inc.	275		18,136
Synovus Financial Corp.	260		6,622
TCF Financial Corp.	70		4,228
Toronto-Dominion Bank	680		22,671
U.S. Bancorp	1,985		56,175
UBS AG (Switzerland)	1,105		73,781
UnionBanCal Corp.	50		2,902
USB Holding Co. Inc.	15		310
Valley National Bancorp	99		2,463
W Holding Co. Inc.	80		1,320
Wachovia Corp.	1,370		60,705
Wells Fargo & Co.	1,745		100,180
Westpac Banking Corp. ADR²	370		21,941
Wilmington Trust Corp.	70		2,443

			1,550,730

BEVERAGES – 2.10%
Allied Domecq PLC ADR	285		9,354


58		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® NYSE COMPOSITE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
Anheuser-Busch Companies Inc.	820	$	42,558
Boston Beer Co. Inc. Class A¹	10		230
Brown-Forman Corp. Class A	15		702
Brown-Forman Corp. Class B	40		1,860
Coca Cola Bottling Co. SA ADR	110		2,634
Coca-Cola Co. (The)	2,259		99,080
Coca-Cola Enterprises Inc.	245		4,998
Coca-Cola Femsa SA ADR	30		615
Companhia de Bebidas das Americas ADR	75		2,836
Compania Cervecerias Unidas ADR	50		1,038
Constellation Brands Inc.^1,2	95		3,599
Coors (Adolph) Co. Class B	25		1,719
Cott Corp. (Canada)¹	50		1,399
Diageo PLC ADR²	790		39,674
Embotelladora Andina SA Class A ADR	60		708
Embotelladora Andina SA Class B ADR	60		660
Pepsi Bottling Group Inc.	170		4,734
PepsiAmericas Inc.	85		1,595
PepsiCo Inc.	1,770		88,500
Quilmes Industrial SA Class A ADR	15		229
Vina Concha y Toro SA ADR	10		491
Weider Nutrition International¹	30		133

			309,346

BIOTECHNOLOGY – 0.19%
Applera Corp. – Celera Genomics Group¹	75		880
Cambrex Corp.	25		551
Charles River Laboratories International Inc.¹	45		2,028
CryoLife Inc.^1,2	20		96
Enzo Biochem Inc.^1,2	30		409
Genentech Inc.¹	450		21,906
Millipore Corp.¹	50		2,634

			28,504

BUILDING MATERIALS – 0.50%
American Standard Companies Inc.¹	180		6,820
Cemex SA de CV ADR	235		6,622
Comfort Systems USA Inc.¹	40		240
Drew Industries Inc.¹	5		191
Eagle Materials Inc.²	10		660
Eagle Materials Inc. Class B	10		650
ElkCorp.	15		327
Florida Rock Industries Inc.	40		1,717
Hanson PLC ADR	178		6,250
International Aluminium Corp.	5		148
Lafarge North America Inc.	30		1,257
Lafarge SA ADR	690		14,787
Lennox International Inc.	50		881
Martin Marietta Materials Inc.²	50		2,187
Masco Corp.	465		14,062
Masisa SA ADR	15		214
Masonite International Corp. (Canada)¹	55		1,267
Mestek Inc.¹	5		83
NCI Building Systems Inc.¹	20		616
Rinker Group Ltd. ADR	100		5,800
Royal Group Technologies Ltd. (Canada)¹	70		580
Simpson Manufacturing Co. Inc.	20		1,120
Tenon Ltd. ADR¹	6		74
Tenon Ltd. Class A ADR¹	9		111
Texas Industries Inc.	20		857
Trex Co. Inc.^1,2	10		446
USG Corp.^1,2	35		603
Vulcan Materials Co.²	80		3,810
York International Corp.	40		1,423

			73,803

CHEMICALS – 1.87%
Agrium Inc. (Canada)	130		1,877
Air Products & Chemicals Inc.	220		11,385
Airgas Inc.	65		1,414
Albemarle Corp.	35		1,078
Arch Chemicals Inc.	25		712
Ashland Inc.	70		3,659
BASF AG ADR	575		30,630
Bayer AG ADR	705		19,021
BOC Group PLC ADR	255		8,848
Cabot Corp.	65		2,475
Celanese AG (Germany)	35		1,893
Ciba Specialty Chemicals AG ADR	140		4,859
Crompton Corp.	115		687
Cytec Industries Inc.	35		1,631
Dow Chemical Co. (The)	950		37,895
Du Pont (E.I.) de Nemours and Co.²	1,030		44,156


SCHEDULES OF INVESTMENTS		59

Schedule of Investments (Continued)

iSHARES^® NYSE COMPOSITE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
Eastman Chemical Co.	80	$	3,574
Ecolab Inc.²	190		5,795
Engelhard Corp.	130		3,822
Ferro Corp.	40		796
FMC Corp.¹	35		1,538
Fuller (H.B.) Co.	30		802
Georgia Gulf Corp.	35		1,244
Grace (W.R.) & Co.¹	60		349
Great Lakes Chemical Corp.²	45		1,079
Hercules Inc.¹	105		1,240
IMC Global Inc.	105		1,433
Imperial Chemical Industries PLC ADR	305		5,051
International Flavors & Fragrances Inc.	85		3,106
Jilin Chemical Industrial Co. Ltd. ADR¹	10		196
Kronos Worldwide Inc.²	5		155
Lubrizol Corp.	55		1,905
Lyondell Chemical Co.²	180		3,272
MacDermid Inc.	25		731
Millennium Chemicals Inc.^1,2	65		1,147
Minerals Technologies Inc.²	20		1,117
NewMarket Corp.¹	15		297
NL Industries Inc.²	10		131
Nova Chemicals Corp. (Canada)	90		2,733
Octel Corp.	15		387
Olin Corp.	70		1,210
OM Group Inc.¹	30		961
OMNOVA Solutions Inc.¹	40		250
PolyOne Corp.¹	95		687
Potash Corp. of Saskatchewan (Canada)	55		5,318
PPG Industries Inc.	175		10,316
Praxair Inc.	335		13,216
Quaker Chemical Corp.	10		249
Rhodia SA ADR	140		204
Rohm & Haas Co.	150		5,880
RPM International Inc.²	120		1,806
Sensient Technologies Corp.	45		929
SGL Carbon AG ADR	170		588
Sherwin-Williams Co. (The)	125		5,047
Sinopec Beijing Yanhua Petrochemical Co. Ltd. ADR	20		363
Sinopec Shanghai Petrochemical Co. Ltd. ADR	25		896
Sociedad Quimica y Minera de Chile SA ADR	10		399
Spartech Corp.²	30		717
Stepan Co.	5		121
Syngenta AG ADR	525		8,715
Terra Industries Inc.¹	40		256
Valhi Inc.	10		115
Valspar Corp. (The)	50		2,450
Wellman Inc.	35		246

			275,059

COAL – 0.08%
Arch Coal Inc.	55		1,857
CONSOL Energy Inc.	95		3,405
Massey Energy Co.²	80		2,212
Peabody Energy Corp.	65		3,652
Yanzhou Coal Mining Co. Ltd. ADR	20		1,214

			12,340

COMMERCIAL SERVICES – 1.01%
Aaron Rents Inc.	25		803
ABM Industries Inc.	40		720
Accenture Ltd.¹	400		9,852
Adecco SA ADR²	540		6,259
Administaff Inc.^1,2	25		332
Alliance Data Systems Corp.¹	45		1,787
AMN Healthcare Services Inc.^1,2	15		193
ARAMARK Corp. Class B	100		2,682
Arbitron Inc.¹	30		1,033
Banta Corp.	25		993
BearingPoint Inc.¹	160		1,322
Block (H & R) Inc.	170		8,352
Bowne & Co. Inc.	35		521
Bunzl PLC ADR	95		3,895
Carriage Services Inc.^1,2	20		93
CDI Corp.	15		428
Cendant Corp.	1,060		24,253
Central Parking Corp.²	25		398
Cenveo Inc.¹	40		104
Chemed Corp.	10		468
ChoicePoint Inc.¹	90		3,780


60		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® NYSE COMPOSITE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
Clark Inc.¹	15	$	227
Consolidated Graphics Inc.¹	10		435
Convergys Corp.¹	145		1,920
Cornell Companies Inc.¹	15		201
Corrections Corp. of America¹	35		1,319
CPI Corp.	10		134
Deluxe Corp.	74		3,260
DeVry Inc.¹	65		1,511
Dollar Thrifty Automotive Group Inc.¹	25		602
Donnelley (R.R.) & Sons Co.	220		6,983
Equifax Inc.²	145		3,497
Franklin Covey Co.¹	20		47
FTI Consulting Inc.^1,2	45		777
Gartner Inc. Class A¹	55		690
Gartner Inc. Class B¹	30		374
Geo Group Inc. (The)¹	10		184
Hewitt Associates Inc. Class A¹	30		801
Integrated Electrical Services Inc.¹	30		254
Interactive Data Corp.¹	35		613
Iron Mountain Inc.¹	120		3,872
ITT Educational Services Inc.¹	45		1,433
Korn/Ferry International¹	35		624
Labor Ready Inc.^1,2	40		561
Landauer Inc.²	10		439
Mac-Gray Corp.¹	5		34
Manpower Inc.	90		3,919
MAXIMUS Inc.¹	20		639
McKesson Corp.	285		9,168
Medical Staffing Network Holdings Inc.¹	15		80
Midas Inc.^1,2	15		268
MoneyGram International Inc.¹	90		1,683
Moody’s Corp.	130		8,853
MPS Group Inc.¹	110		988
National Processing Inc.¹	10		263
Navigant Consulting Inc.¹	45		943
Pre-Paid Legal Services Inc.^1,2	15		347
Quanta Services Inc.^1,2	75		471
Quebecor World Inc. (Canada)	90		1,992
Rent-Way Inc.^1,2	25		188
Robert Half International Inc.²	175		4,868
Rollins Inc.	25		579
Service Corp. International¹	310		1,968
ServiceMaster Co. (The)²	305		3,562
Sotheby’s Holdings Inc. Class A¹	45		719
Spherion Corp.¹	60		519
StarTek Inc.	10		307
TNS Inc.¹	5		111
United Rentals Inc.¹	70		1,389
Universal Technical Institute Inc.¹	10		327
Valassis Communications Inc.¹	55		1,608
Viad Corp.	22		526
Volt Information Sciences Inc.¹	10		299
Watson Wyatt & Co. Holdings	35		915
Weight Watchers International Inc.^1,2	45		1,743

			148,302

COMPUTERS – 2.34%
Affiliated Computer Services Inc. Class A¹	125		6,487
Anteon International Corp.¹	30		934
BISYS Group Inc. (The)¹	125		1,706
CACI International Inc. Class A¹	30		1,233
Cadence Design Systems Inc.^1,2	270		3,637
Ceridian Corp.¹	155		2,790
CGI Group Inc. (Canada)¹	350		2,310
CIBER Inc.^1,2	55		412
Computer Sciences Corp.¹	195		9,214
Computer Task Group Inc.¹	20		67
Diebold Inc.	96		4,426
DST Systems Inc.^1,2	110		5,012
Electronic Data Systems Corp.	495		9,148
EMC Corp.¹	2,495		27,370
FactSet Research Systems Inc.²	25		1,079
Gateway Inc.¹	260		1,170
Hewlett-Packard Co.	2,825		56,924
Imation Corp.²	35		1,160
International Business Machines Corp.	1,775		154,549
Iomega Corp.	50		219
Lexmark International Inc.¹	130		11,505
Maxtor Corp.^1,2	255		1,193
NCR Corp.¹	100		4,643
PAR Technology Corp.¹	5		48
Perot Systems Corp. Class A¹	75		946
Quantum Corp.^1,2	160		390


SCHEDULES OF INVESTMENTS		61

Schedule of Investments (Continued)

iSHARES^® NYSE COMPOSITE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
Reynolds & Reynolds Co. (The) Class A	70	$	1,547
Seagate Technology	155		1,778
Silicon Graphics Inc.^1,2	205		314
SRA International Inc. Class A¹	15		638
Storage Technology Corp.¹	115		2,869
SunGard Data Systems Inc.¹	295		6,876
TDK Corp. ADR	135		9,369
Thomson Corp. (Canada)	195		6,665
Tyler Technologies Inc.¹	40		368
Unisys Corp.¹	340		3,482
Western Digital Corp.¹	215		1,507
Xanser Corp.¹	30		71

			344,056

COSMETICS & PERSONAL CARE – 1.81%
Alberto-Culver Co.	70		3,263
Avon Products Inc.	490		21,075
Colgate-Palmolive Co.	515		27,398
Estee Lauder Companies Inc. Class A	115		5,048
Gillette Co. (The)	945		36,836
Kimberly-Clark Corp.	515		32,996
Procter & Gamble Co.	2,668		139,136
Revlon Inc. Class A¹	15		34

			265,786

DISTRIBUTION & WHOLESALE – 0.19%
Advanced Marketing Services Inc.	15		170
Aviall Inc.¹	35		702
Buhrmann NV ADR	135		1,255
Genuine Parts Co.	180		6,791
Grainger (W.W.) Inc.	85		4,501
Handleman Co.	25		537
Hughes Supply Inc.	30		1,828
Huttig Building Products Inc.¹	10		83
Ingram Micro Inc. Class A¹	125		1,781
Watsco Inc.	20		585
WESCO International Inc.¹	15		308
Wolseley PLC ADR	300		9,555

			28,096

DIVERSIFIED FINANCIAL SERVICES – 6.20%
Affiliated Managers Group Inc.^1,2	35		1,607
American Express Co.	1,175		59,044
AmeriCredit Corp.^1,2	160		3,056
AMVESCAP PLC ADR	415		4,370
Bay View Capital Corp.	6		113
Bear Stearns Companies Inc. (The)	100		8,342
BKF Capital Group Inc.	5		135
BlackRock Inc.	15		929
Capital One Financial Corp.	240		16,637
Capital Trust Inc. Class A	5		122
CapitalSource Inc.^1,2	70		1,513
Chicago Mercantile Exchange Holdings Inc.²	22		2,761
CIT Group Inc.	220		7,647
Citigroup Inc.	5,376		237,028
Countrywide Financial Corp.	285		20,548
Doral Financial Corp.	95		3,729
E*TRADE Financial Corp.¹	380		4,207
Eaton Vance Corp.	60		2,276
Edwards (A.G.) Inc.	85		2,762
Federal Agricultural Mortgage Corp.¹	10		183
Federal Home Loan Mortgage Corp.	715		45,982
Federal National Mortgage Association	877		62,232
Federated Investors Inc. Class B	100		2,811
Financial Federal Corp.¹	20		643
Franklin Resources Inc.	145		6,996
Friedman, Billings, Ramsey Group Inc. Class A	145		2,385
Gabelli Asset Management Inc. Class A	5		194
Goldman Sachs Group Inc. (The)	441		38,892
IndyMac Bancorp Inc.	60		1,993
Investment Technology Group Inc.^1,2	50		657
Janus Capital Group Inc.	250		3,315
Jefferies Group Inc.	50		1,567
JP Morgan Chase & Co.	3,649		136,217
LaBranche & Co. Inc.¹	30		246
Legg Mason Inc.²	70		5,498
Lehman Brothers Holdings Inc.	285		19,978
MBNA Corp.	1,165		28,764
Merrill Lynch & Co. Inc.	895		44,499
Metris Companies Inc.¹	60		399
MicroFinancial Inc.¹	10		38
Morgan Stanley	1,020		50,317
National Financial Partners Corp.	35		1,179


62		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® NYSE COMPOSITE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
Nelnet Inc. Class A¹	10	$	222
Nissin Co. Ltd. ADR	90		805
Nomura Holdings Inc. ADR	2,025		27,945
Nuveen Investments Inc. Class A	20		508
Oppenheimer Holdings Inc. Class A (Canada)	10		236
ORIX Corp. ADR	130		6,987
Piper Jaffray Companies Inc.¹	20		815
Providian Financial Corp.¹	300		4,152
Raymond James Financial Inc.²	60		1,402
Ritchie Bros. Auctioneers Inc.	30		887
Schwab (Charles) Corp. (The)	1,065		9,351
Shinhan Financial Group Co. Ltd. ADR	135		3,970
SLM Corp.	465		17,633
Stifel Financial Corp.¹	5		121
Student Loan Corp.	5		701
SWS Group Inc.	15		205
Van der Moolen Holding NV ADR¹	40		256
W.P. Stewart & Co. Ltd.²	25		488
Waddell & Reed Financial Inc. Class A²	85		1,651
Westcorp Inc.	25		1,039
Westwood Holdings Group Inc.	5		90
Woori Finance Holdings Co. Ltd. ADR	35		592

			911,867

ELECTRIC – 3.24%
AES Corp. (The)¹	610		5,886
Allegheny Energy Inc.^1,2	130		1,929
ALLETE Inc.	80		2,218
Alliant Energy Corp.	115		2,980
Ameren Corp.	190		8,491
American Electric Power Co. Inc.	405		12,600
Aquila Inc.¹	200		656
Avista Corp.	45		785
Black Hills Corp.	35		967
British Energy PLC ADR¹	10		306
Calpine Corp.^1,2	425		1,640
CenterPoint Energy Inc.	280		3,251
Central Vermont Public Service Corp.	15		291
CH Energy Group Inc.	15		660
Cinergy Corp.	170		6,502
Cleco Corp.	50		862
CMS Energy Corp.^1,2	165		1,490
Companhia Paranaense de Energia ADR	105		378
Consolidated Edison Inc.²	235		9,628
Constellation Energy Group Inc.	175		6,746
Dominion Resources Inc.	335		21,259
DPL Inc.	100		1,995
DTE Energy Co.²	175		7,030
Duke Energy Corp.	935		20,102
Duquesne Light Holdings Inc.²	80		1,518
E.ON AG ADR	675		48,026
Edison International	335		8,978
El Paso Electric Co.¹	50		752
Electricidade de Portugal SA ADR	200		5,376
Empire District Electric Co. (The)	25		498
Empresa Nacional de Electricidad SA ADR²	115		1,515
Endesa SA ADR	985		18,075
Enel SpA ADR	490		19,414
Energy East Corp.	150		3,654
Enersis SA ADR	235		1,398
Entergy Corp.	235		13,512
Exelon Corp.	680		23,732
FirstEnergy Corp.	340		13,294
FPL Group Inc.²	175		11,783
Great Plains Energy Inc.	70		2,008
Green Mountain Power Corp.	5		128
Hawaiian Electric Industries Inc.²	80		2,042
Huaneng Power International Inc. ADR	80		2,552
IDACORP Inc.	40		1,100
International Power PLC ADR¹	115		3,141
Korea Electric Power Corp. ADR²	330		3,059
MDU Resources Group Inc.	110		2,689
National Grid Group PLC ADR	635		25,552
NiSource Inc.	270		5,589
Northeast Utilities²	130		2,431
NRG Energy Inc.¹	85		2,260
NSTAR	55		2,574
OGE Energy Corp.	90		2,240
Pepco Holdings Inc.²	175		3,150
PG&E Corp.¹	405		11,559
Pinnacle West Capital Corp.	95		3,847


SCHEDULES OF INVESTMENTS		63

Schedule of Investments (Continued)

iSHARES^® NYSE COMPOSITE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
PNM Resources Inc.	60	$	1,250
PPL Corp.	185		8,575
Progress Energy Inc.	255		10,746
Public Service Enterprise Group Inc.²	245		9,555
Puget Energy Inc.	100		2,160
Reliant Energy Inc.^1,2	285		2,816
SCANA Corp.	105		3,845
Scottish Power PLC ADR	480		13,920
Sierra Pacific Resources Corp.^1,2	120		986
Southern Co. (The)	760		22,253
TECO Energy Inc.	195		2,515
Texas Genco Holdings Inc.	15		696
TransAlta Corp. (Canada)	195		2,293
TXU Corp.	335		13,286
UIL Holdings Corp.	15		690
UniSource Energy Corp.²	35		864
Westar Energy Inc.	75		1,513
Wisconsin Energy Corp.	120		3,858
WPS Resources Corp.²	35		1,606
Xcel Energy Inc.²	410		7,011

			476,536

ELECTRICAL COMPONENTS & EQUIPMENT – 0.41%
AMETEK Inc.	70		2,159
Belden CDT Inc.¹	47		914
C&D Technologies Inc.	25		392
Emerson Electric Co.	435		26,404
Energizer Holdings Inc.¹	85		3,238
General Cable Corp.¹	40		381
GrafTech International Ltd.¹	90		993
Hitachi Ltd. ADR²	347		21,323
Hubbell Inc.	5		212
Hubbell Inc. Class B	50		2,260
Magnetek Inc.¹	25		164
Rayovac Corp.¹	35		936
Wilson Greatbatch Technologies Inc.¹	20		438

			59,814

ELECTRONICS – 0.89%
Agilent Technologies Inc.¹	455		10,834
Amphenol Corp. Class A¹	80		2,514
Applera Corp. - Applied Biosystems Group	215		4,448
Arrow Electronics Inc.¹	115		2,721
AU Optronics Corp. ADR²	351		4,124
Avnet Inc.¹	125		2,427
AVX Corp.	55		686
Bairnco Corp.	5		40
Benchmark Electronics Inc.¹	40		1,143
Brady Corp. Class A	20		904
Celestica Inc. (Canada)¹	190		3,258
Checkpoint Systems Inc.¹	35		602
CTS Corp.²	35		401
Epcos AG ADR¹	50		857
Fisher Scientific International Inc.^1,2	65		3,783
GP Strategies Corp.¹	15		106
Jabil Circuit Inc.¹	170		3,697
Keithley Instruments Inc.	15		311
KEMET Corp.¹	85		858
Koninklijke Philips Electronics NV (Netherlands)	1,355		32,832
Kyocera Corp. ADR	175		13,527
Lamson & Sessions Co.¹	10		73
Mettler Toledo International Inc.¹	45		1,876
Nam Tai Electronics Inc.	25		485
Park Electrochemical Corp.	20		460
Parker Hannifin Corp.	125		7,172
Paxar Corp.¹	35		675
PerkinElmer Inc.	120		2,110
Premier Farnell PLC ADR	170		1,334
Rogers Corp.¹	15		742
Solectron Corp.¹	865		4,757
Sparton Corp.¹	5		43
Stoneridge Inc.¹	10		147
Symbol Technologies Inc.	210		2,749
Technitrol Inc.¹	40		740
Tektronix Inc.	85		2,584
Thermo Electron Corp.¹	170		4,372
Thomas & Betts Corp.	60		1,578
Vishay Intertechnology Inc.¹	150		2,325
Waters Corp.¹	125		5,485
Watts Water Technologies Inc. Class A	25		632

			130,412


64		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® NYSE COMPOSITE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
ENERGY & RELATED – 0.00%
Smedvig ASA Class B ADR	25	$	226

			226

ENGINEERING & CONSTRUCTION – 0.16%
ABB Ltd. ADR	1,920		10,598
Chicago Bridge & Iron Co. NV (Netherlands)	50		1,459
Dycom Industries Inc.¹	50		1,347
EMCOR Group Inc.^1,2	15		649
Empressa ICA Sociedad Controladora SA ADR¹	185		324
Fluor Corp.²	85		3,872
Granite Construction Inc.	35		623
Grupo Aeroportuario del Sureste SA de CV ADR	25		532
Jacobs Engineering Group Inc.¹	55		2,199
McDermott International Inc.¹	60		640
Shaw Group Inc. (The)¹	65		645
URS Corp.¹	30		724

			23,612

ENTERTAINMENT – 0.14%
Argosy Gaming Co.¹	30		979
Dover Downs Gaming & Entertainment Inc.	10		98
Dover Motorsports Inc.	15		65
Gaylord Entertainment Co.^1,2	55		1,604
GTECH Holdings Corp.	60		2,542
International Game Technology Inc.	360		11,642
Intrawest Corp. (Canada)	45		729
Metro-Goldwyn-Mayer Inc.²	85		1,031
Pinnacle Entertainment Inc.¹	35		395
Regal Entertainment Group Class A	40		753
Six Flags Inc.¹	95		448
Speedway Motorsports Inc.	15		518
Steinway Musical Instruments Inc.¹	5		149
Vail Resorts Inc.¹	20		390

			21,343

ENVIRONMENTAL CONTROL – 0.37%
Allied Waste Industries Inc.¹	255		2,356
Calgon Carbon Corp.	35		222
IMCO Recycling Inc.¹	15		186
Ionics Inc.¹	20		541
Met-Pro Corp.	10		141
Republic Services Inc.	165		4,719
TRC Companies Inc.¹	10		153
Vivendi Universal SA ADR^1,2	1,105		27,492
Waste Connections Inc.¹	45		1,299
Waste Management Inc.	600		16,884

			53,993

FOOD – 2.16%
Albertson’s Inc.²	330		8,049
American Italian Pasta Co. Class A²	20		588
Archer-Daniels-Midland Co.	610		9,412
Blue Square Israel Ltd. ADR	10		104
Cadbury Schweppes PLC ADR²	530		17,511
Campbell Soup Co.	265		6,781
Chiquita Brands International Inc.¹	40		782
ConAgra Foods Inc.	555		14,430
Corn Products International Inc.	35		1,509
Dean Foods Co.¹	160		5,917
Del Monte Foods Co.¹	205		2,161
Distribucion y Servicio D&S SA ADR	35		528
Flowers Foods Inc.	45		1,174
Fresh Del Monte Produce Inc.²	25		664
General Mills Inc.	305		13,694
Great Atlantic & Pacific Tea Co.¹	15		103
Groupe Danone ADR	1,290		21,337
Gruma SA de CV ADR	35		234
Grupo Industrial Maseca SA de CV ADR	5		35
Heinz (H.J.) Co.	365		13,465
Hershey Foods Corp.	180		8,719
Hormel Foods Corp.	75		2,226
Industrias Bachoco SA de CV ADR	10		100
Interstate Bakeries Corp.²	45		442
Kellogg Co.	245		10,207
Koninklijke Ahold NV ADR²	1,600		12,096
Kraft Foods Inc.²	285		8,707
Kroger Co.¹	700		11,060
M&F Worldwide Corp.¹	10		131
McCormick & Co. Inc.	10		356
McCormick & Co. Inc. NVS	125		4,471
Pilgrim’s Pride Corp.	35		981
Ralcorp Holdings Inc.¹	30		1,094
Ruddick Corp.	40		782


SCHEDULES OF INVESTMENTS		65

Schedule of Investments (Continued)

iSHARES^® NYSE COMPOSITE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
Safeway Inc.¹	455	$	9,614
Sara Lee Corp.	815		17,897
Smithfield Foods Inc.¹	90		2,551
Smucker (J.M.) Co. (The)	58		2,425
SUPERVALU Inc.	140		3,998
Sysco Corp.	665		22,909
Tasty Baking Co.	10		82
Tootsie Roll Industries Inc.	25		732
Tyson Foods Inc. Class A	240		4,574
Unilever NV NYS²	590		36,185
Unilever PLC ADR	750		26,887
Weis Markets Inc.	10		319
Wimm-Bill-Dann Foods OJSC ADR¹	20		262
Winn-Dixie Stores Inc.	85		537
Wrigley (William Jr.) Co.	140		8,456

			317,278

FOOD SERVICE – 0.02%
Sodexho Alliance SA ADR	100		2,735

			2,735

FOREST PRODUCTS & PAPER – 0.64%
Abitibi-Consolidated Inc. (Canada)	350		2,303
Aracruz Celulose SA ADR	45		1,557
Boise Cascade Corp.	90		2,902
Bowater Inc.	55		2,051
Buckeye Technologies Inc.¹	35		376
Corporacion Durango SA de CV ADR¹	10		2
Deltic Timber Corp.	10		344
Domtar Inc.	165		2,143
Georgia-Pacific Corp.	230		7,728
Glatfelter Co.²	30		400
International Paper Co.	495		21,399
Longview Fibre Co.¹	55		710
Louisiana-Pacific Corp.	100		2,368
MeadWestvaco Corp.	210		6,271
Pope & Talbot Inc.²	15		294
Potlatch Corp.²	30		1,203
Rock-Tenn Co. Class A	25		354
Sappi Ltd. ADR	215		3,135
Schweitzer-Mauduit International Inc.	15		424
Stora Enso OYJ ADR	660		9,167
Temple-Inland Inc.	55		3,754
UPM-Kymmene OYJ ADR	540		10,503
Wausau-Mosinee Paper Corp.²	50		777
Weyerhaeuser Co.	230		14,260

			94,425

GAS – 0.24%
AGL Resources Inc.	60		1,773
Atmos Energy Corp.	55		1,384
Cascade Natural Gas Corp.	10		201
Chesapeake Utilities Corp.	5		118
Energen Corp.	35		1,657
KeySpan Corp.	165		5,938
Laclede Group Inc. (The)	20		538
MetroGas SA ADR¹	10		37
New Jersey Resources Corp.	30		1,219
Nicor Inc.²	45		1,490
Northwest Natural Gas Co.	25		734
NUI Corp.²	15		199
ONEOK Inc.	100		2,100
Peoples Energy Corp.	40		1,560
Piedmont Natural Gas Co.²	35		1,444
SEMCO Energy Inc.	30		160
Sempra Energy	205		7,329
South Jersey Industries Inc.	15		681
Southern Union Co.¹	55		1,095
Southwest Gas Corp.	35		828
UGI Corp.	50		1,619
Vectren Corp.	80		1,980
WGL Holdings Inc.	50		1,372

			35,456

HAND & MACHINE TOOLS – 0.12%
Baldor Electric Co.²	30		686
Black & Decker Corp.	80		5,593
Kennametal Inc.	35		1,540
Milacron Inc.^1,2	35		126
Nidec Corp. ADR	185		4,273
Snap-On Inc.	55		1,766
Stanley Works (The)	85		3,604
Starrett (LS) Co. Class A	5		78

			17,666


66		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® NYSE COMPOSITE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
HEALTH CARE-PRODUCTS – 2.79%
Advanced Medical Optics Inc.¹	30	$	1,141
Alcon Inc.	80		6,128
Apogent Technologies Inc.¹	90		2,925
Bard (C.R.) Inc.	110		6,072
Bausch & Lomb Inc.²	55		3,387
Baxter International Inc.	630		18,944
Beckman Coulter Inc.	65		3,586
Becton, Dickinson & Co.	260		12,280
Boston Scientific Corp.¹	605		23,147
Cantel Medical Corp.¹	10		257
Cooper Companies Inc.	35		2,081
De Rigo SpA ADR¹	10		64
Diagnostic Products Corp.	25		1,004
DJ Orthopedics Inc.¹	20		356
Edwards Lifesciences Corp.^1,2	60		2,110
Elscint Ltd.¹	5		23
Fresenius Medical Care AG ADR	105		2,560
Guidant Corp.	320		17,702
Haemonetics Corp.¹	25		750
Hanger Orthopedic Group Inc.^1,2	20		202
Hillenbrand Industries Inc.	60		3,407
Invacare Corp.	30		1,216
Johnson & Johnson	3,041		168,076
Luxottica Group SpA ADR	120		2,057
Medtronic Inc.	1,250		62,087
Mentor Corp.	40		1,260
Oakley Inc.	25		270
ResMed Inc.¹	35		1,715
Smith & Nephew PLC ADR	195		10,074
Sola International Inc.¹	35		569
St. Jude Medical Inc.¹	180		12,263
Steris Corp.¹	70		1,439
Stryker Corp.	290		13,827
Sybron Dental Specialties Inc.¹	40		1,076
Varian Medical Systems Inc.¹	70		4,831
Viasys Healthcare Inc.¹	25		379
VISX Inc.¹	45		963
West Pharmaceutical Services Inc.	15		571
Zimmer Holdings Inc.¹	250		19,078

			409,877

HEALTH CARE-SERVICES – 1.15%
Aetna Inc.	160		13,728
Alliance Imaging Inc.¹	15		74
American Medical Security Group Inc.¹	15		381
American Retirement Corp.¹	10		60
AMERIGROUP Corp.¹	25		1,199
Anthem Inc.¹	145		11,958
Apria Healthcare Group Inc.^1,2	55		1,614
Beverly Enterprises Inc.^1,2	110		867
Capital Senior Living Corp.¹	15		68
Centene Corp.¹	20		780
Community Health Systems Inc.¹	55		1,354
Covance Inc.¹	65		2,385
Coventry Health Care Inc.¹	75		3,833
DaVita Inc.¹	97		2,946
Extendicare Inc. Class A¹	60		657
HCA Inc.²	455		17,586
Health Management Associates Inc. Class A²	250		5,015
Health Net Inc.¹	115		2,775
Humana Inc.¹	165		2,988
Laboratory Corp. of America Holdings¹	145		5,678
Manor Care Inc.	90		2,813
MDS Inc. (Canada)	145		2,185
Molina Healthcare Inc.¹	15		498
Orthodontic Centers of America Inc.^1,2	40		270
PacifiCare Health Systems Inc.^1,2	85		2,598
Pediatrix Medical Group Inc.¹	25		1,581
Province Healthcare Co.¹	45		654
Quest Diagnostics Inc.	80		6,566
RehabCare Group Inc.^1,2	15		359
Renal Care Group Inc.¹	75		2,390
Select Medical Corp.	85		1,091
Sierra Health Services Inc.^1,2	25		1,105
Specialty Laboratories Inc.¹	10		101
Sunrise Senior Living Inc.^1,2	20		706
Tenet Healthcare Corp.¹	480		5,366
Triad Hospitals Inc.^1,2	80		2,725
UnitedHealth Group Inc.	696		43,769
Universal Health Services Inc. Class B	50		2,276
WellChoice Inc.¹	25		915


SCHEDULES OF INVESTMENTS		67

Schedule of Investments (Continued)

iSHARES^® NYSE COMPOSITE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
WellPoint Health Networks Inc.¹	155	$	15,671

			169,585

HOLDING COMPANIES - DIVERSIFIED – 0.75%
Berkshire Hathaway Inc. Class B¹	34		98,396
Brascan Corp. (Canada)	140		3,868
Desc SA de CV ADR¹	55		289
Enodis PLC ADR¹	80		544
Grupo IMSA SA de CV ADR	10		237
Leucadia National Corp.	45		2,317
Quinenco SA ADR	85		738
Tomkins PLC ADR	200		3,720
Walter Industries Inc.	25		349

			110,458

HOME BUILDERS – 0.29%
Beazer Homes USA Inc.²	15		1,401
Brookfield Homes Corp.	15		406
Centex Corp.	130		5,515
Champion Enterprises Inc.^1,2	60		584
Coachmen Industries Inc.	15		233
D.R. Horton Inc.	210		5,802
Fleetwood Enterprises Inc.^1,2	40		538
Hovnanian Enterprises Inc. Class A¹	35		1,086
KB Home	40		2,562
Lennar Corp. Class A²	125		5,335
Levitt Corp. Class A¹	15		311
M.D.C. Holdings Inc.	25		1,679
M/I Homes Inc.	10		380
Meritage Corp.¹	10		619
Monaco Coach Corp.	30		728
National RV Holdings Inc.¹	10		163
Pulte Homes Inc.	105		5,736
Ryland Group Inc.	25		1,936
Skyline Corp.	5		187
Standard-Pacific Corp.	30		1,392
Thor Industries Inc.²	40		1,252
Toll Brothers Inc.^1,2	50		1,987
WCI Communities Inc.^1,2	40		861
William Lyon Homes Inc.^1,2	5		382
Winnebago Industries Inc.	35		1,290

			42,365

HOME FURNISHINGS – 0.64%
Applica Inc.¹	25		129
Ethan Allen Interiors Inc.	40		1,486
Fedders Corp.	25		101
Furniture Brands International Inc.	55		1,264
Harman International Industries Inc.	70		6,001
La-Z-Boy Inc.	55		950
Leggett & Platt Inc.	200		5,410
Matsushita Electric Industrial Co. Ltd. ADR	2,330		31,362
Maytag Corp.	75		1,538
Natuzzi SpA ADR	30		306
Pioneer Corp. ADR	165		3,564
Salton Inc.^1,2	10		53
Sony Corp. ADR	955		33,091
Tempur-Pedic International Inc.¹	20		251
Thomson SA ADR	275		5,148
Whirlpool Corp.	60		3,746

			94,400

HOUSEHOLD PRODUCTS & WARES – 0.25%
American Greetings Corp. Class A^1,2	65		1,516
Avery Dennison Corp.	100		6,057
Blyth Inc.	35		1,219
Church & Dwight Co. Inc.	40		1,767
Clorox Co.	160		7,963
CSS Industries Inc.	10		318
Ennis Inc.	15		273
Fortune Brands Inc.	150		10,827
Global-Tech Appliances Inc.¹	5		43
Harland (John H.) Co.	30		849
Jarden Corp.¹	25		904
Nashua Corp.¹	5		49
Oil Dri Corp. of America	5		82
Playtex Products Inc.¹	40		283
Russ Berrie & Co. Inc.	10		190
Scotts Co. (The) Class A¹	20		1,220
Standard Register Co. (The)²	15		164
Tupperware Corp.	55		944
Water Pik Technologies Inc.¹	10		126
Yankee Candle Co. Inc. (The)¹	55		1,596

			36,390


68		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® NYSE COMPOSITE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
HOUSEWARES – 0.06%
Enesco Group Inc.¹	15	$	128
Libbey Inc.	15		337
National Presto Industries Inc.	5		201
Newell Rubbermaid Inc.	285		6,156
Toro Co.	25		1,638
Vitro SA de CV ADR	65		180

			8,640

INSURANCE – 5.15%
ACE Ltd.	290		11,771
Aegon NV ADR²	1,396		15,831
AFLAC Inc.	525		20,811
Alleghany Corp.¹	5		1,353
Allianz AG ADR	3,485		33,561
Allmerica Financial Corp.¹	55		1,640
Allstate Corp. (The)	725		34,133
Ambac Financial Group Inc.	110		7,822
American Equity Investment Life Holding Co.	20		180
American Financial Group Inc.	40		1,188
American International Group Inc.	2,365		167,087
AmerUs Group Co.²	40		1,540
Annuity & Life Re Holdings Ltd.¹	30		21
AON Corp.	285		7,535
Aspen Insurance Holdings Ltd.	10		236
AXA ADR²	1,460		29,930
Axis Capital Holdings Ltd.	125		3,213
Berkley (W.R.) Corp.	75		3,071
Bristol West Holdings Inc.	15		262
Brown & Brown Inc.²	60		2,551
China Life Insurance Co. Ltd. ADR¹	55		1,203
Chubb Corp.	195		13,412
CIGNA Corp.	145		8,991
Citizens Inc.^1,2	30		169
CNA Financial Corp.^1,2	30		791
CNA Surety Corp.¹	15		153
Commerce Group Inc.	30		1,452
Conseco Inc.¹	105		1,888
Converium Holding AG ADR	80		894
Crawford & Co. Class A	10		50
Crawford & Co. Class B	10		50
Delphi Financial Group Inc. Class A	30		1,217
Endurance Specialty Holdings Ltd.	45		1,487
Everest Re Group Ltd.	55		4,041
Fairfax Financial Holdings Ltd. (Canada)	15		2,267
FBL Financial Group Inc. Class A	30		797
Fidelity National Financial Inc.	155		5,619
First Acceptance Corp.¹	10		69
First American Corp.	70		1,880
Gallagher (Arthur J.) & Co.	95		2,942
Great American Financial Resources Inc.	10		152
Hartford Financial Services Group Inc.	300		19,530
HCC Insurance Holdings Inc.²	60		1,818
Hilb, Rogal & Hobbs Co.²	30		1,008
Horace Mann Educators Corp.	45		754
Hub International Ltd.	30		556
ING Groep NV ADR	1,895		43,793
Jefferson-Pilot Corp.	145		6,986
Kingsway Financial Services Inc. (Canada)¹	60		689
LandAmerica Financial Group Inc.	20		790
Lincoln National Corp.	185		8,085
Loews Corp.	130		7,362
Manulife Financial Corp. (Canada)	830		33,217
Markel Corp.¹	10		2,825
Marsh & McLennan Cos. Inc.	520		23,078
MBIA Inc.	150		8,097
Meadowbrook Insurance Group¹	25		120
Mercury General Corp.	25		1,178
MetLife Inc.	330		11,771
MGIC Investment Corp.	100		7,100
Montpelier Re Holdings Ltd.	40		1,415
Nationwide Financial Services Inc.	60		2,128
NYMAGIC Inc.	5		119
Odyssey Re Holdings Corp.²	15		350
Old Republic International Corp.	175		4,076
PartnerRe Ltd.	55		2,877
Penn Treaty American Corp.¹	25		44
Penn-America Group Inc.	10		130
Phoenix Companies Inc.	95		985
Platinum Underwriters Holdings Ltd.	30		835
PMI Group Inc. (The)	90		3,711


SCHEDULES OF INVESTMENTS		69

Schedule of Investments (Continued)

iSHARES^® NYSE COMPOSITE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
Principal Financial Group Inc.	335	$	11,387
ProAssurance Corp.^1,2	25		792
Progressive Corp. (The)	195		14,941
Protective Life Corp.	65		2,356
Prudential Financial Inc.	555		25,841
Prudential PLC ADR	1,035		17,274
PXRE Group Ltd.	15		345
Radian Group Inc.	95		4,372
Reinsurance Group of America Inc.	25		996
RenaissanceRe Holdings Ltd.	70		3,710
RLI Corp.	20		736
Royal & Sun Alliance Insurance Group ADR	595		4,296
SCOR ADR	685		980
Scottish Re Group Ltd.	30		612
SCPIE Holdings Inc.	10		97
St. Paul Travelers Companies Inc.	684		25,356
StanCorp Financial Group Inc.	30		2,109
Stewart Information Services Corp.	15		532
Sun Life Financial Services of Canada Inc. (Canada)	620		17,236
Torchmark Corp.	115		6,012
Transatlantic Holdings Inc.	25		1,416
21st Century Insurance Group	25		319
UICI¹	35		837
Unitrin Inc.	45		1,874
UNUMProvident Corp.²	275		4,386
Vesta Insurance Group	35		181
White Mountains Insurance Group Ltd.	7		3,539
Willis Group Holdings Ltd.	150		5,220
XL Capital Ltd. Class A	140		9,895
Zenith National Insurance Corp.²	10		429

			756,763

INTERNET – 0.03%
McAfee Inc.¹	165		2,967
ProQuest Co.^1,2	25		625
Safeguard Scientifics Inc.^1,2	125		238

			3,830

INVESTMENT COMPANIES – 0.00%
AFP Provida SA ADR	10		250
Koor Industries Ltd. ADR¹	50		401

			651

IRON & STEEL – 0.17%
AK Steel Holding Corp.¹	105		696
Allegheny Technologies Inc.	70		1,404
Carpenter Technology Corp.	20		860
Cleveland-Cliffs Inc.^1,2	10		655
Companhia Siderurgica Nacional SA ADR²	160		2,320
International Steel Group Inc.¹	20		655
IPSCO Inc. (Canada)	50		1,171
Ispat International NV Class A (Netherlands)¹	30		527
Material Sciences Corp.¹	10		121
Nucor Corp.	75		6,274
Oregon Steel Mills Inc.¹	97		1,504
POSCO ADR	90		3,265
Reliance Steel & Aluminum Co.	30		1,195
Ryerson Tull Inc.²	25		384
United States Steel Corp.²	110		4,195
WHX Corp.¹	5		5

			25,231

LEISURE TIME – 0.37%
Bally Total Fitness Holding Corp.¹	35		181
Brunswick Corp.	90		3,513
Callaway Golf Co.²	65		715
Carnival Corp.	395		18,411
Ducati Motor Holding SpA ADR¹	10		135
Harley-Davidson Inc.	315		18,859
Head NV (Netherlands)¹	20		62
K2 Inc.¹	35		499
Nautilus Group Inc. (The)	30		556
Polaris Industries Inc.²	45		2,151
Royal Caribbean Cruises Ltd.²	126		5,387
Sabre Holdings Corp.	145		3,702
WMS Industries Inc.¹	20		545

			54,716


70		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® NYSE COMPOSITE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
LODGING – 0.42%
Aztar Corp.¹	35	$	849
Boca Resorts Inc. Class A¹	35		683
Boyd Gaming Corp.	40		1,052
Caesars Entertainment Inc.¹	270		3,977
Choice Hotels International Inc.	20		1,052
Fairmont Hotels & Resorts Inc. (Canada)	80		2,060
Four Seasons Hotels Inc. (Canada)	20		1,214
Harrah’s Entertainment Inc.	115		5,346
Hilton Hotels Corp.	390		6,954
Intercontinental Hotels Group PLC ADR	760		8,254
Interstate Hotels & Resorts Inc.¹	30		156
Kerzner International Ltd.¹	15		704
La Quinta Corp.¹	170		1,302
Mandalay Resort Group	60		4,050
Marcus Corp.	20		352
Marriott International Inc. Class A	190		9,272
MGM Mirage¹	65		2,870
Orient-Express Hotels Ltd.	15		229
Prime Hospitality Corp.¹	45		413
Starwood Hotels & Resorts Worldwide Inc.	210		9,450
Station Casinos Inc.	35		1,512
Trump Hotels & Casino Resorts Inc.¹	15		30
Westcoast Hospitality Corp.¹	10		49

			61,830

MACHINERY – 0.53%
AGCO Corp.¹	80		1,674
Alamo Group Inc.	5		81
Albany International Corp. Class A	25		748
Alstom ADR	1,070		621
Applied Industrial Technologies Inc.	20		639
Briggs & Stratton Corp.	25		2,088
Cascade Corp. (Canada)	10		293
Caterpillar Inc.	350		25,722
CNH Global NV (Netherlands)	20		394
Cummins Inc.²	35		2,430
Deere & Co.	255		16,017
Flowserve Corp.¹	55		1,317
Gardner Denver Inc.¹	15		402
Gerber Scientific Inc.¹	20		130
Global Power Equipment Group Inc.¹	35		245
Graco Inc.	75		2,361
Idex Corp.²	45		1,444
JLG Industries Inc.²	45		630
Kadant Inc.¹	15		302
Katy Industries Inc.¹	5		26
Kubota Corp. ADR	255		5,817
Lindsay Manufacturing Co.	10		241
Manitowoc Co. Inc. (The)	30		1,017
Metso OYJ ADR	105		1,370
NACCO Industries Inc.	5		457
Orbital Engine Corp. Ltd. ADR¹	10		45
Pfeiffer Vacuum Technology AG ADR	10		389
Robbins & Myers Inc.²	10		189
Rockwell Automation Inc.	170		6,360
Sauer-Danfoss Inc.	10		170
Stewart & Stevenson Services Inc.	25		394
Tennant Co.	5		185
Terex Corp.¹	50		1,946
Thomas Industries Inc.	15		465
Unova Inc.¹	50		846
Wabtec Corp.	40		728

			78,183

MANUFACTURING – 4.81%
Actuant Corp. Class A^1,2	25		912
Acuity Brands Inc.	45		1,073
Ameron International Corp.	10		350
AptarGroup Inc.	35		1,481
AZZ Inc.¹	5		79
Barnes Group Inc.²	20		519
Blount International Inc.¹	30		359
Brink’s Co. (The)	55		1,779
Carlisle Companies Inc.	30		1,905
CLARCOR Inc.	25		1,100
Cooper Industries Ltd.	95		5,403
Crane Co.	60		1,669
Danaher Corp.	230		11,650
Donaldson Co. Inc.	80		2,130
Dover Corp.	210		8,333
Eastman Kodak Co.	295		7,815
Eaton Corp.	155		10,019
EnPro Industries Inc.¹	20		495


SCHEDULES OF INVESTMENTS		71

Schedule of Investments (Continued)

iSHARES^® NYSE COMPOSITE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
ESCO Technologies Inc.¹	15	$	790
Federal Signal Corp.	50		851
General Electric Co.	10,835		360,272
Griffon Corp.¹	30		629
Harsco Corp.	40		1,795
Hexcel Corp.¹	20		235
Honeywell International Inc.	815		30,652
Illinois Tool Works Inc.	275		24,893
Ingersoll-Rand Co. Class A	180		12,364
ITT Industries Inc.	95		7,595
Jacuzzi Brands Inc.¹	75		579
Lydall Inc.¹	15		146
Myers Industries Inc.	25		328
Pall Corp.	130		3,012
Pentair Inc.	100		3,132
Roper Industries Inc.	55		3,080
Siemens AG ADR	865		60,758
Smith (A.O.) Corp.	20		574
SPX Corp.²	80		3,276
Standex International Corp.	10		228
Sturm Ruger & Co. Inc.	25		260
Teleflex Inc.	35		1,556
Textron Inc.	120		7,356
3M Co.	740		60,946
Tredegar Corp.²	25		412
Trinity Industries Inc.	40		1,203
Tyco International Ltd.	2,065		64,015

			708,008

MEDIA - 2.88%
Belo (A.H.) Corp.	100		2,338
British Sky Broadcasting Group PLC ADR	325		14,459
Cablevision Systems Corp.¹	195		3,407
CanWest Global Communications Corp. (Canada)¹	30		238
Citadel Broadcasting Corp.¹	55		775
Clear Channel Communications Inc.	580		20,706
Corus Entertainment Inc. Class B (Canada)	40		731
Cox Communications Inc. Class A¹	205		5,654
Cox Radio Inc. Class A¹	40		693
DIRECTV Group Inc. (The)¹	940		15,237
Dow Jones & Co. Inc.	40		1,695
Entercom Communications Corp.¹	40		1,538
Entravision Communications Corp.¹	50		354
4Kids Entertainment Inc.^1,2	15		327
Fox Entertainment Group Inc. Class A¹	180		4,865
Gannett Co. Inc.	280		23,279
Gray Television Inc.	45		536
Grupo Radio Centro SA de CV ADR	10		57
Grupo Televisa SA ADR	115		5,405
Hearst-Argyle Television Inc.	30		679
Hollinger International Inc.	65		1,076
Information Holdings Inc.¹	15		410
Journal Communications Inc. Class A	20		357
Journal Register Co.¹	40		776
Knight Ridder Inc.	80		5,263
Lee Enterprises Inc.	35		1,629
Liberty Corp.	15		659
Liberty Media Corp. Class A	2,775		23,532
Liberty Media Corp. Class B¹	15		141
Lin TV Corp. Class A^1,2	25		454
Martha Stewart Living Omnimedia Inc. Class A^1,2	10		113
McClatchy Co. (The) Class A	20		1,379
McGraw-Hill Companies Inc. (The)	195		14,637
Media General Inc. Class A	35		2,092
Meredith Corp.	40		2,115
Nelson (Thomas) Inc.	10		216
New York Times Co. Class A	155		6,448
News Corp. Ltd. ADR²	335		11,357
Pearson PLC ADR	825		9,405
Playboy Enterprises Inc. Class B¹	15		167
Primedia Inc.¹	110		264
Pulitzer Inc.²	32		1,480
Readers Digest Association Inc. (The)	90		1,285
Reed Elsevier NV ADR²	340		8,690
Reed Elsevier PLC ADR	330		11,807
Rogers Communications Inc. Class B (Canada)	180		3,231
Saga Communications Inc.¹	20		356
Scripps (E.W.) Co. Class A	40		4,097
Shaw Communications Inc. Class B (Canada)	205		3,141


72		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® NYSE COMPOSITE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
Time Warner Inc.¹	4,500	$	74,925
Tribune Co.	225		9,551
TV Azteca SA de CV (Mexico)	105		918
Univision Communications Inc. Class A^1,2	235		6,808
Viacom Inc. Class A	45		1,532
Viacom Inc. Class B	1,560		52,400
Walt Disney Co. (The)	2,110		48,720
Washington Post Co. (The) Class B	6		5,207
Westwood One Inc.¹	80		1,904
Wiley, John & Sons Inc. Class A	40		1,294
Wiley, John & Sons Inc. Class B	5		164
World Wrestling Entertainment Inc.	10		127

			423,100

METAL FABRICATE & HARDWARE – 0.08%
Ampco-Pittsburgh Corp.	5		66
CIRCOR International Inc.	15		266
Commercial Metals Co.	25		866
Kaydon Corp.²	30		874
Madeco SA ADR¹	25		169
Mueller Industries Inc.	35		1,334
NS Group Inc.¹	20		341
Penn Engineering & Manufacturing Corp.	10		198
Precision Castparts Corp.	65		3,661
Quanex Corp.	15		683
Timken Co. (The)	70		1,739
TransTechnology Corp.¹	5		36
Valmont Industries Inc.	15		327
Wolverine Tube Inc.¹	10		127
Worthington Industries Inc.	70		1,434

			12,121

MINING – 1.64%
Agnico-Eagle Mines Ltd. (Canada)	85		1,125
Alcan Inc. (Canada)	380		15,056
Alcoa Inc.	895		28,667
Alumina Ltd. ADR	300		4,401
Aluminum Corp. of China Ltd. ADR	25		1,305
AMCOL International Corp.	25		503
AngloGold Ashanti Ltd. ADR	131		4,297
Barrick Gold Corp. (Canada)	550		10,516
BHP Billiton Ltd. ADR	1,935		35,759
BHP Billiton PLC ADR	1,275		23,269
Brush Engineered Materials Inc.¹	15		272
Cameco Corp. (Canada)	60		3,570
Coeur d’Alene Mines Corp.^1,2	220		761
Companhia Vale do Rio Doce ADR	105		5,660
Compania de Minas Buenaventura SA ADR	125		2,691
Compass Minerals International Inc.	15		306
Corus Group PLC (United Kingdom)¹	455		3,813
Freeport-McMoRan Copper & Gold Inc.	170		5,925
Glamis Gold Ltd. (Canada)¹	135		2,120
Gold Fields Ltd. ADR	370		3,796
Goldcorp Inc. (Canada)	190		2,187
Harmony Gold Mining Co. Ltd. ADR	265		2,904
Hecla Mining Co.^1,2	115		621
Inco Ltd. (Canada)¹	195		6,507
Kinross Gold Corp.^1,2	355		1,885
Meridian Gold Inc.¹	100		1,326
Newmont Mining Corp.	400		16,188
Noranda Inc. (Canada)	180		3,042
Owens & Minor Inc.	40		1,027
Owens-Illinois Inc.¹	115		1,691
Phelps Dodge Corp.¹	95		7,404
Placer Dome Inc. (Canada)	425		6,809
Rio Tinto PLC ADR	275		28,839
RTI International Metals Inc.¹	20		300
Southern Peru Copper Corp.	39		1,526
Stillwater Mining Co.¹	45		655
USEC Inc.	85		722
WMC Resources Ltd. ADR	295		4,372

			241,817

OFFICE & BUSINESS EQUIPMENT – 0.43%
Canon Inc. ADR	800		39,200
CompX International Inc.¹	5		70
Falcon Products Inc.¹	5		13
IKON Office Solutions Inc.²	150		1,781
Imagistics International Inc.¹	15		488
Pitney Bowes Inc.	240		10,128
Xerox Corp.^1,2	820		11,365

			63,045


SCHEDULES OF INVESTMENTS		73

Schedule of Investments (Continued)

iSHARES^® NYSE COMPOSITE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
OFFICE FURNISHINGS – 0.02%
HNI Corp.	50	$	2,023
Steelcase Inc. Class A²	45		587

			2,610

OIL & GAS – 9.88%
Amerada Hess Corp.	85		7,085
Anadarko Petroleum Corp.	260		15,545
Apache Corp.	335		15,588
Atwood Oceanics Inc.^1,2	10		387
Berry Petroleum Co. Class A	20		605
BG Group PLC ADR²	730		23,126
BP PLC ADR	3,800		214,168
Burlington Resources Inc.	410		15,650
Cabot Oil & Gas Corp.²	35		1,539
Callon Petroleum Co.¹	15		202
Canadian Natural Resources Ltd. (Canada)	280		9,290
Chesapeake Energy Corp.²	245		3,761
ChevronTexaco Corp.	1,100		105,215
China Petroleum & Chemical Corp. ADR	100		3,961
Cimarex Energy Co.¹	40		1,301
CNOOC Ltd. ADR	115		5,523
Comstock Resources Inc.¹	35		736
ConocoPhillips	645		50,807
Denbury Resources Inc.¹	55		1,202
Diamond Offshore Drilling Inc.²	65		1,589
EnCana Corp. (Canada)	480		21,274
Encore Acquisition Co.¹	10		295
Energy Partners Ltd.^1,2	30		469
ENI-Ente Nazionale Idrocarburi SpA ADR	530		54,442
ENSCO International Inc.	155		4,667
EOG Resources Inc.	120		7,626
Evergreen Resources Inc.¹	45		1,841
Exxon Mobil Corp.	6,758		312,895
Forest Oil Corp.^1,2	55		1,556
Frontier Oil Corp.	25		536
Giant Industries Inc.¹	10		242
GlobalSantaFe Corp.	195		5,343
Harvest Natural Resources Inc.¹	35		482
Helmerich & Payne Inc.	50		1,266
Houston Exploration Co.¹	15		810
KCS Energy Inc.¹	50		739
Kerr-McGee Corp.	129		6,773
Magnum Hunter Resources Inc.¹	55		590
Marathon Oil Corp.	320		12,054
McMoRan Exploration Co.^1,2	10		152
Meridian Resource Corp. (The)¹	50		418
Murphy Oil Corp.	90		6,961
Newfield Exploration Co.¹	50		2,954
Nexen Inc. (Canada)	110		4,233
Noble Corp.¹	140		5,421
Noble Energy Inc.	55		3,042
Norsk Hydro ASA ADR	155		9,781
Occidental Petroleum Corp.	400		19,708
Parker Drilling Co.¹	95		367
Patina Oil & Gas Corp.	65		1,917
Penn Virginia Corp.	20		754
Petro-Canada (Canada)	225		10,555
PetroChina Co. Ltd. ADR	155		7,741
PetroKazakhstan Inc. Class A (Canada)	60		1,899
Petroleo Brasileiro SA ADR	290		8,201
Pioneer Natural Resources Co.	125		4,506
Plains Exploration & Production Co.¹	70		1,460
Pogo Producing Co.	60		2,663
Precision Drilling Corp. (Canada)¹	55		2,735
Premcor Inc.¹	65		2,334
Pride International Inc.^1,2	120		2,160
Quicksilver Resources Inc.^1,2	30		950
Range Resources Corp.²	60		1,005
Remington Oil & Gas Corp.¹	20		473
Repsol YPF SA ADR	995		21,194
Rowan Companies Inc.¹	110		2,686
Royal Dutch Petroleum Co. NYS	2,150		108,145
Sasol Ltd. ADR	480		8,040
Shell Transport & Trading Co. PLC (United Kingdom)	1,660		72,708
Southwestern Energy Co.¹	35		1,127
Spinnaker Exploration Co.¹	25		894
St. Mary Land & Exploration Co.²	30		1,029
Statoil ASA ADR	415		5,188
Stone Energy Corp.¹	25		1,131
Suncor Energy Inc. (Canada)	465		13,476
Sunoco Inc.	80		5,454


74		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® NYSE COMPOSITE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
Swift Energy Co.^1,2	30	$	681
Talisman Energy Inc. (Canada)	390		9,298
Tatneft ADR²	55		1,199
Tesoro Petroleum Corp.¹	65		1,885
TODCO Class A^1,2	10		158
Total SA ADR²	1,335		129,962
Transocean Inc.¹	330		9,372
Unit Corp.¹	40		1,290
Unocal Corp.	265		10,271
Valero Energy Corp.	125		9,365
Vintage Petroleum Inc.	55		941
Whiting Petroleum Corp.¹	20		474
XTO Energy Inc.	240		7,176
Yacimientos Petroliferos Fiscales SA ADR²	405		16,358

			1,453,072

OIL & GAS SERVICES – 0.85%
Advantest Corp. ADR	325		4,765
Baker Hughes Inc.	345		13,904
BJ Services Co.¹	165		8,194
CARBO Ceramics Inc.	10		708
Compagnie Generale de Geophysique SA ADR¹	55		578
Cooper Cameron Corp.¹	55		2,810
Core Laboratories NV¹	30		660
Dril-Quip Inc.¹	10		189
FMC Technologies Inc.¹	65		1,950
Grant Prideco Inc.¹	115		2,172
Halliburton Co.	450		14,288
Hanover Compressor Co.¹	65		763
Hornbeck Offshore Services Inc.¹	5		64
Input/Output Inc.^1,2	45		433
Key Energy Services Inc.¹	135		1,361
Lone Star Technologies Inc.¹	30		1,000
Maverick Tube Corp.¹	45		1,298
NATCO Group Inc. Class A¹	15		125
National-Oilwell Inc.¹	90		3,011
Newpark Resources Inc.¹	85		519
Oceaneering International Inc.¹	25		827
Oil States International Inc.¹	25		412
RPC Inc.	10		154
Schlumberger Ltd.	605		38,914
Seacor Holdings Inc.¹	20		846
Smedvig ASA Class A ADR	35		368
Smith International Inc.¹	105		6,119
Superior Energy Services Inc.¹	55		615
Technip-Coflexip SA ADR	85		2,984
Tenaris SA ADR	55		1,956
Tetra Technologies Inc.¹	25		659
Tidewater Inc.	55		1,669
Universal Compression Holdings Inc.¹	15		492
Varco International Inc.¹	100		2,417
Veritas DGC Inc.¹	35		862
Weatherford International Ltd.¹	135		6,315
W-H Energy Services Inc.¹	30		603
Willbros Group Inc.¹	20		294

			125,298

PACKAGING & CONTAINERS – 0.16%
Ball Corp.	55		3,970
Bemis Co. Inc.	110		2,913
Chesapeake Corp.	20		464
Cristalerias de Chile SA ADR	10		276
Crown Holdings Inc.¹	170		1,724
Graphic Packaging Corp.¹	120		827
Greif Brothers Corp. Class B	5		191
Greif Inc. Class A	10		372
Intertape Polymer Group Inc. (Canada)¹	30		249
Packaging Corp. of America	65		1,518
Pactiv Corp.¹	160		3,773
Sealed Air Corp.¹	90		4,270
Sonoco Products Co.	100		2,591

			23,138

PHARMACEUTICALS – 7.85%
Abbott Laboratories	1,615		63,550
Allergan Inc.	140		10,590
Alpharma Inc. Class A	40		658
Altana AG ADR	70		3,817
AmerisourceBergen Corp.	115		6,217
AstraZeneca PLC ADR	1,655		74,343
Aventis SA ADR	715		56,163
Barr Pharmaceuticals Inc.¹	90		3,092
Biovail Corp. (Canada)¹	135		2,113


SCHEDULES OF INVESTMENTS		75

Schedule of Investments (Continued)

iSHARES^® NYSE COMPOSITE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
Bradley Pharmaceuticals Inc.¹	15	$	353
Bristol-Myers Squibb Co.	2,000		45,800
Cardinal Health Inc.	450		20,025
Caremark Rx Inc.¹	435		13,268
Dr.Reddy’s Laboratories Ltd. ADR	60		1,016
Elan Corp. PLC ADR^1,2	400		8,220
Forest Laboratories Inc.¹	380		19,110
GlaxoSmithKline PLC ADR	3,065		125,512
Grupo Casa Saba SA de CV ADR	5		57
Hospira Inc.¹	160		4,146
Kinetic Concepts Inc.¹	20		898
King Pharmaceuticals Inc.¹	250		2,823
K-V Pharmaceuticals Co. Class A¹	30		522
K-V Pharmaceuticals Co. Class B¹	10		185
Lilly (Eli) & Co.	990		63,083
Medco Health Solutions Inc.¹	280		8,484
Medicis Pharmaceutical Corp. Class A²	55		1,967
Merck & Co. Inc.	2,267		102,808
Mylan Laboratories Inc.	275		4,076
NBTY Inc.¹	65		1,414
Novartis AG ADR	2,605		116,339
Novo-Nordisk A/S ADR²	295		15,080
Omega Protein Corp.¹	10		90
Omnicare Inc.	105		2,968
Par Pharmaceutical Companies Inc.¹	35		1,317
Pfizer Inc.	7,904		252,612
Sanofi-Synthelabo SA ADR	745		24,622
Schering AG ADR	175		9,896
Schering-Plough Corp.	1,515		29,482
Serono SA ADR²	290		4,440
Theragenics Corp.¹	30		125
Valeant Pharmaceuticals International²	85		1,488
Watson Pharmaceuticals Inc.¹	110		2,773
Wyeth	1,375		48,675

			1,154,217

PIPELINES - 0.31%
Dynegy Inc. Class A^1,2	290		1,218
El Paso Corp.²	660		5,207
Enbridge Inc. (Canada)	160		6,054
Equitable Resources Inc.	65		3,333
Kinder Morgan Inc.	100		6,001
National Fuel Gas Co.²	80		2,043
Questar Corp.	85		3,483
TransCanada Corp. (Canada)	500		10,045
Transportadora de Gas del Sur SA ADR¹	60		254
Western Gas Resources Inc.	50		1,685
Williams Companies Inc.	535		6,500

			45,823

REAL ESTATE – 0.07%
Agree Realty Corp.	5		124
American Realty Investors Inc.¹	5		45
Bluegreen Corp.^1,2	15		176
Brookfield Properties Corp. (Canada)	85		2,605
Forest City Enterprises Inc. Class A	25		1,310
Forest City Enterprises Inc. Class B	5		261
Irsa Inversiones y Representaciones SA GDR¹	20		134
Jones Lang LaSalle Inc.¹	30		870
LNR Property Corp.²	20		1,080
Malan Realty Investors Inc.	5		25
MI Developments Inc. Class A	45		1,029
One Liberty Properties Inc.	5		92
Prime Group Realty Trust¹	15		77
St. Joe Company (The)	40		1,721
Trammell Crow Co.¹	35		469
Urstadt Biddle Properties Inc.	5		69

			10,087

REAL ESTATE INVESTMENT TRUSTS – 1.56%
Acadia Realty Trust	10		142
Affordable Residential Communities Inc.	25		383
Alexandria Real Estate Equities Inc.	20		1,202
AMB Property Corp.	85		2,987
American Financial Realty Trust	110		1,458
American Home Mortgage Investment Corp.	35		905
American Land Lease Inc.	5		95
AMLI Residential Properties Trust	20		577
Annaly Mortgage Management Inc.²	120		1,980
Anthracite Capital Inc.	45		494
Anworth Mortgage Asset Corp.	45		477
Apartment Investment & Management Co. Class A	85		2,717
Archstone-Smith Trust	185		5,445


76		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® NYSE COMPOSITE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
Arden Realty Group Inc.	65	$	1,976
Ashford Hospitality Trust Inc.	25		224
Associated Estates Realty Corp.	20		174
AvalonBay Communities Inc.	75		4,365
Bedford Property Investors Inc.²	15		420
Boston Properties Inc.	110		5,819
Boykin Lodging Co.¹	20		168
Brandywine Realty Trust	40		1,092
BRE Properties Inc. Class A²	50		1,733
BRT Realty Trust	5		100
Camden Property Trust	35		1,575
Capital Lease Funding Inc.¹	123		1,224
Capstead Mortgage Corp.²	15		194
CarrAmerica Realty Corp.	55		1,677
Catellus Development Corp.	130		3,250
CBL & Associates Properties Inc.	30		1,653
Cedar Shopping Centers Inc.	15		186
CenterPoint Properties Trust	50		1,919
Chelsea Property Group Inc.	45		2,930
Colonial Properties Trust²	25		950
Commercial Net Lease Realty Inc.²	50		850
Cornerstone Realty Income Trust Inc.	55		482
Corporate Office Properties Trust	30		760
Correctional Properties Trust	10		259
Cousins Properties Inc.	40		1,285
Crescent Real Estate Equities Co.	95		1,492
CRIIMI MAE Inc.¹	15		185
CRT Properties Inc.	20		432
Developers Diversified Realty Corp.	85		3,050
Duke Realty Corp.	130		3,999
Dynex Capital Inc.¹	10		67
EastGroup Properties Inc.	20		649
Entertainment Properties Trust	20		707
Equity Inns Inc.	45		408
Equity Office Properties Trust	415		10,769
Equity One Inc.	40		722
Equity Residential	285		8,422
Essex Property Trust Inc.²	20		1,318
Federal Realty Investment Trust²	50		2,110
FelCor Lodging Trust Inc.^1,2	50		570
First Industrial Realty Trust Inc.²	40		1,466
First Potomac Realty Trust	10		198
Gables Residential Trust	30		992
General Growth Properties Inc.	220		6,618
Getty Realty Corp.	20		467
Glenborough Realty Trust Inc.	30		548
Glimcher Realty Trust²	35		758
Government Properties Trust Inc.	20		199
Health Care Property Investors Inc.	135		3,370
Health Care REIT Inc.²	50		1,614
Healthcare Realty Trust Inc.	45		1,625
Heritage Property Investment Trust Inc.²	25		687
Highland Hospitality Corp.	30		312
Highwoods Properties Inc.²	55		1,276
Home Properties Inc.	30		1,128
Hospitality Properties Trust	65		2,592
Host Marriott Corp.¹	245		3,173
HRPT Properties Trust	180		1,813
Impac Mortgage Holdings Inc.	65		1,492
Innkeepers USA Trust	35		367
iStar Financial Inc.	105		3,990
Keystone Property Trust	71		1,687
Kilroy Realty Corp.²	30		1,062
Kimco Realty Corp.	95		4,570
Kramont Realty Trust	25		398
LaSalle Hotel Properties	25		644
Lexington Corporate Properties Trust	50		978
Liberty Property Trust	80		3,072
LTC Properties Inc.²	15		257
Luminent Mortgage Capital Inc.	25		268
Macerich Co. (The)	60		2,874
Mack-Cali Realty Corp.	60		2,454
Maguire Properties Inc.	40		990
Manufactured Home Communities Inc.²	20		634
Meristar Hospitality Corp.¹	60		348
MFA Mortgage Investments Inc.	75		608
Mid-America Apartment Communities Inc.	20		717
Mills Corp.	40		1,824
National Health Investors Inc.	25		686
Nationwide Health Properties Inc.	65		1,242
New Plan Excel Realty Trust Inc.²	100		2,375
Newcastle Investment Corp.	30		849


SCHEDULES OF INVESTMENTS		77

Schedule of Investments (Continued)

iSHARES^® NYSE COMPOSITE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
Novastar Financial Inc.²	25	$	1,003
Omega Healthcare Investors Inc.	45		439
Pan Pacific Retail Properties Inc.	40		2,024
Parkway Properties Inc.	10		439
Pennsylvania Real Estate Investment Trust	40		1,395
Plum Creek Timber Co. Inc.	190		5,962
Post Properties Inc.²	40		1,120
Prentiss Properties Trust	40		1,370
ProLogis	175		5,957
Public Storage Inc.	90		4,242
RAIT Investment Trust	20		485
Ramco-Gershenson Properties Trust	15		386
Rayonier Inc.	50		2,199
Realty Income Corp.	40		1,621
Reckson Associates Realty Corp.	60		1,663
Redwood Trust Inc.	20		1,135
Regency Centers Corp.	55		2,338
Rouse Co. (The)	90		4,392
Saul Centers Inc.	10		300
Senior Housing Properties Trust	50		835
Shurgard Storage Centers Inc. Class A	45		1,665
Simon Property Group Inc.	185		9,548
Sizeler Property Investors Inc.²	15		139
SL Green Realty Corp.	35		1,719
Sovran Self Storage Inc.	15		582
Summit Properties Inc.	35		903
Sun Communities Inc.	20		752
Sunset Financial Resources Inc.¹	15		156
Tanger Factory Outlet Centers Inc.	15		595
Taubman Centers Inc.	50		1,155
Thornburg Mortgage Inc.²	80		2,218
Town & Country Trust (The)²	15		366
Trizec Properties Inc.²	95		1,525
U.S. Restaurant Properties Inc.²	20		304
United Dominion Realty Trust Inc.	125		2,424
Universal Health Realty Income Trust	10		284
Urstadt Biddle Properties Inc. Class A	20		271
Ventas Inc.	85		2,169
Vornado Realty Trust	105		6,099
Washington Real Estate Investment Trust	45		1,257
Weingarten Realty Investors	75		2,310
Windrose Medical Properties Trust	10		122
Winston Hotels Inc.	25		275

			228,392

RETAIL – 4.49%
Abercrombie & Fitch Co. Class A	100		3,688
Advance Auto Parts Inc.¹	60		2,227
Aeropostale Inc.¹	51		1,554
AnnTaylor Stores Corp.¹	67		1,798
Asbury Automotive Group Inc.¹	15		204
AutoNation Inc.¹	210		3,385
AutoZone Inc.¹	70		5,404
Barnes & Noble Inc.¹	55		1,891
Best Buy Co. Inc.	275		13,244
Big Lots Inc.^1,2	120		1,469
BJ’s Wholesale Club Inc.^1,2	70		1,632
Blockbuster Inc.²	40		531
Bombay Co. Inc. (The)¹	35		207
Borders Group Inc.	80		1,830
Brinker International Inc.¹	100		3,581
Brown Shoe Co. Inc.	20		645
Buckle Inc. (The)	10		275
Burlington Coat Factory Warehouse Corp.	20		363
CarMax Inc.^1,2	105		2,184
Cash America International Inc.	30		674
Cato Corp. Class A	20		417
CEC Entertainment Inc.¹	40		1,454
Chico’s FAS Inc.^1,2	90		3,768
Christopher & Banks Corp.²	40		655
Circuit City Stores Inc.	195		2,750
CKE Restaurants Inc.¹	50		721
Claire’s Stores Inc.	85		1,959
Cole National Corp.¹	15		408
Coles Myer Ltd. ADR	155		7,759
CSK Auto Corp.¹	45		623
CVS Corp.	405		16,957
Darden Restaurants Inc.	155		3,306
Dave & Buster’s Inc.^1,2	15		256
Delhaize Le Lion SA ADR	95		4,529
Dick’s Sporting Goods Inc.¹	30		975
Dillard’s Inc. Class A²	70		1,595
Dollar General Corp.	315		6,080


78		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® NYSE COMPOSITE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
Duane Reade Inc.¹	25	$	412
Family Dollar Stores Inc.	170		4,736
Federated Department Stores Inc.	207		9,919
Foot Locker Inc.	150		3,375
GameStop Corp.¹	20		308
Gap Inc. (The)²	675		15,323
Genesco Inc.¹	20		429
Gottschalks Inc.¹	10		54
Group 1 Automotive Inc.¹	20		595
Grupo Elektra SA de CV ADR	20		474
Hancock Fabrics Inc.	20		231
Haverty Furniture Companies Inc.	20		372
Home Depot Inc.	2,345		79,073
IHOP Corp.	20		740
Jack in the Box Inc.¹	40		1,276
Jo-Ann Stores Inc.¹	20		530
Kenneth Cole Productions Inc. Class A	10		321
Kohl’s Corp.¹	315		14,414
Krispy Kreme Doughnuts Inc.^1,2	60		944
Landry’s Restaurants Inc.	25		756
Limited Brands Inc.	455		9,300
Linens `n Things Inc.¹	45		1,198
Lithia Motors Inc. Class A	15		350
Longs Drug Stores Corp.²	30		630
Lowe’s Companies Inc.	735		35,809
Luby’s Inc.^1,2	25		164
MarineMax Inc.¹	10		246
MayDepartment Stores Co. (The)	300		7,959
McDonald’s Corp.	1,310		36,025
Men’s Wearhouse Inc. (The)^1,2	35		927
Michaels Stores Inc.	70		3,782
Mitchells & Butlers PLC ADR	540		2,705
Movado Group Inc.	20		300
MSC Industrial Direct Co. Inc. Class A	40		1,252
Neiman-Marcus Group Inc. Class A²	30		1,637
Neiman-Marcus Group Inc. Class B	15		772
99 Cents Only Stores^1,2	50		717
Nordstrom Inc.	105		4,610
Nu Skin Enterprises Inc. Class A	55		1,502
Office Depot Inc.¹	320		5,248
Outback Steakhouse Inc.²	70		2,843
Payless ShoeSource Inc.^1,2	70		906
Penney (J.C.) Co. Inc. (Holding Co.)	280		11,200
Pep Boys-Manny, Moe & Jack Inc.²	55		1,139
Pier 1 Imports Inc.	90		1,614
RadioShack Corp.	170		4,752
Regis Corp.	45		1,852
Retail Ventures Inc.¹	35		281
Rex Stores Corp.¹	10		130
Rite Aid Corp.¹	460		2,259
Ruby Tuesday Inc.	70		2,022
Saks Inc.²	125		1,631
Sears, Roebuck and Co.	277		10,160
7-Eleven Inc.¹	30		515
ShopKo Stores Inc.^1,2	30		467
Smart & Final Inc.¹	10		150
Sonic Automotive Inc.	30		671
Sports Authority Inc. (The)¹	20		510
Steak n Shake Co. (The)¹	25		428
Syms Corp.¹	10		104
Systemax Inc.¹	10		63
Talbots Inc. (The)	25		770
Target Corp.	850		37,060
Tiffany & Co.	150		5,363
TJX Companies Inc.	520		12,204
Too Inc.¹	35		524
Toys R Us Inc.¹	220		3,621
Triarc Companies Inc.	15		147
Triarc Companies Inc. Class B²	30		293
United Auto Group Inc.	20		549
Walgreen Co.	1,055		38,402
Wal-Mart Stores Inc.	2,753		145,937
Wendy’s International Inc.	110		3,935
Whitehall Jewellers Inc.¹	15		113
Williams-Sonoma Inc.¹	100		3,249
World Fuel Services Corp.	10		380
Worldwide Restaurant Concepts Inc.¹	25		79
Yum! Brands Inc.	305		11,709
Zale Corp.¹	50		1,357

			659,802

SAVINGS & LOANS – 0.52%
Astoria Financial Corp.	75		2,562


SCHEDULES OF INVESTMENTS		79

Schedule of Investments (Continued)

iSHARES^® NYSE COMPOSITE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
BankAtlantic Bancorp Inc. Class A	50	$	912
Commercial Federal Corp.	45		1,185
Downey Financial Corp.	20		1,075
FirstFed Financial Corp.¹	15		680
Flagstar Bancorp Inc.	30		590
Golden West Financial Corp.	135		14,433
GreenPoint Financial Corp.	115		4,672
New York Community Bancorp Inc.²	255		4,906
Ocwen Financial Corp.¹	40		354
PFF Bancorp Inc.	15		551
Provident Financial Services Inc.	65		1,147
Sovereign Bancorp Inc.²	300		6,531
Washington Mutual Inc.	910		35,308
Webster Financial Corp.	50		2,346

			77,252

SEMICONDUCTORS – 1.00%
Advanced Micro Devices Inc.^1,2	428		5,346
Advanced Semiconductor Engineering Inc. ADR¹	555		1,843
Agere Systems Inc. Class B¹	935		1,057
Analog Devices Inc.	385		15,285
Cypress Semiconductor Corp.¹	125		1,418
Emulex Corp.¹	85		917
Fairchild Semiconductor International Inc. Class A¹	105		1,542
Infineon Technologies AG ADR¹	605		6,631
International Rectifier Corp.¹	70		2,744
LSI Logic Corp.¹	390		1,985
MEMC Electronic Materials Inc.¹	85		773
Micron Technology Inc.¹	630		8,524
Mykrolis Corp.¹	40		400
National Semiconductor Corp.¹	370		6,346
Semiconductor Manufacturing International Corp. ADR¹	305		3,306
STMicroelectronics NV NYS²	615		11,476
Taiwan Semiconductor Manufacturing Co. Ltd. ADR	3,576		25,461
Teradyne Inc.¹	200		3,420
Texas Instruments Inc.	1,785		38,074
Three-Five Systems Inc.¹	20		70
United Microelectronics Corp. ADR¹	2,700		9,990
Zarlink Semiconductor Inc. (Canada)¹	130		455

			147,063

SOFTWARE – 0.99%
Automatic Data Processing Inc.	610		25,608
BMC Software Inc.¹	230		3,606
Certegy Inc.²	65		2,464
Computer Associates International Inc.	480		12,115
Dun & Bradstreet Corp.¹	75		4,211
eFunds Corp.¹	50		818
Fair Isaac Corp.	75		2,144
First Data Corp.	915		40,818
Global Payments Inc.	30		1,370
IMS Health Inc.	245		5,939
Keane Inc.^1,2	60		886
Konami Corp. ADR	90		1,981
Midway Games Inc.^1,2	30		343
MSC.Software Corp.^1,2	30		221
NDCHealth Corp.²	35		735
SAP AG ADR	850		34,009
Satyam Computer Services Ltd. ADR	165		3,242
Schawk Inc.	5		72
Sybase Inc.¹	100		1,457
SYNNEX Corp.¹	25		376
Total System Services Inc.	40		910
Wipro Ltd. ADR²	120		1,861

			145,186

TELECOMMUNICATIONS – 7.81%
Alcatel SA ADR^1,2	1,185		15,334
Alltel Corp.	320		16,640
Amdocs Ltd.¹	221		4,796
America Movil SA de CV ADR Series L	380		13,577
American Tower Corp. Class A¹	220		3,181
Anixter International Inc.	35		1,172
APT Satellite Holdings Ltd. ADR¹	20		32
Asia Satellite Telecommunications Holdings Ltd. ADR	10		177
AT&T Corp.	815		12,307
AT&T Wireless Services Inc.¹	2,315		33,429
Avaya Inc.¹	455		6,666
BCE Inc. (Canada)	955		20,026


80		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® NYSE COMPOSITE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
BellSouth Corp.	1,890	$	51,200
British Telecom PLC ADR²	890		30,830
Cable & Wireless PLC ADR	820		4,781
CenturyTel Inc.	140		4,339
Chilesat Corp. SA ADR^1,3	5		12
China Eastern Airlines Corp. Ltd. ADR¹	15		309
China Mobile Hong Kong Ltd. ADR	850		12,342
China Telecom Corp. Ltd. ADR	85		2,831
China Unicom Ltd. ADR	290		2,166
Cincinnati Bell Inc.¹	250		1,010
Citizens Communications Co.¹	295		4,248
CommScope Inc.^1,2	50		1,030
Companhia Anonima Nacional Telefonos de Venezuela ADR	55		1,098
Compania de Telecomunicaciones de Chile SA ADR²	130		1,482
Corning Inc.¹	1,390		17,180
Crown Castle International Corp.^1,2	225		3,177
Deutsche Telekom AG ADR^1,2	2,480		41,342
Enterasys Networks Inc.¹	200		336
Equant NV (France)¹	135		641
France Telecom SA ADR	1,125		27,821
Harris Corp.	70		3,324
Hellenic Telecommunications Organization SA (Greece)²	580		3,666
Hypercom Corp.¹	35		238
IDT Corp.¹	20		310
IDT Corp. Class B¹	45		709
Infonet Services Corp. Class B¹	70		110
KT Corp. ADR²	290		5,159
Lucent Technologies Inc.^1,2	4,395		13,405
Mahanagar Telephone Nigam Ltd. ADR	110		751
MasTec Inc.¹	30		187
Matav Rt ADR	90		1,858
mmO2 PLC ADR¹	895		14,517
Mobile Telesystems ADR	25		2,926
Motorola Inc.	2,400		38,232
Network Equipment Technologies Inc.¹	25		178
New Skies Satellites NV ADR	105		810
Nippon Telegraph & Telephone Corp. ADR	1,085		26,713
Nokia OYJ ADR	4,940		57,403
Nortel Networks Corp. (Canada)¹	4,290		15,701
NTT DoCoMo Inc. ADR	1,985		34,162
PCCW Ltd. ADR¹	395		2,706
Philippine Long Distance Telephone Co. ADR¹	130		2,913
Plantronics Inc.¹	45		1,741
Portugal Telecom SGPS ADR	1,170		11,981
Price Communications Corp.¹	42		626
PT Indonesian Satellite Corp. Tbk ADR	45		1,031
PT Telekomunikasi Indonesia ADR¹	210		3,572
Qwest Communications International Inc.^1,2	1,490		5,796
Rogers Wireless Communications Inc. (Canada)¹	15		440
Rostelecom ADR	60		687
Royal KPN NV ADR	2,070		15,359
SBC Communications Inc.	3,415		86,536
Scientific-Atlanta Inc.	155		4,766
SK Telecom Co. Ltd. ADR²	555		9,801
SpectraSite Inc.¹	73		3,139
Spirent PLC ADR¹	185		753
Sprint Corp. (FON Group)	1,340		25,031
Swisscom AG ADR	255		8,323
TDC A/S ADR	260		4,277
Telecom Argentina SA ADR¹	80		757
Telecom Corp. of New Zealand Ltd. ADR²	250		7,783
Telecom Italia SpA ADR	880		26,268
Telefonica de Argentina SA ADR¹	5		36
Telefonica Moviles SA ADR	340		3,458
Telefonica SA ADR	1,610		70,309
Telefonos de Mexico ADR	345		10,654
Telekom Austria AG ADR	135		4,235
Telkom SA Ltd. ADR	45		2,318
Telstra Corp. Ltd. ADR	455		7,912
TELUS Corp. (Canada)	165		2,869
Triton PCS Holdings Inc. Class A¹	30		90
Turkcell Iletisim Hizmetleri AS ADR	55		1,640
Verizon Communications Inc.	2,833		109,184
Videsh Sanchar Nigam Ltd. ADR	40		315


SCHEDULES OF INVESTMENTS		81

Schedule of Investments (Continued)

iSHARES^® NYSE COMPOSITE INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
Vimpel-Communications ADR¹	30	$	2,624
Vodafone Group PLC ADR	7,030		152,762

			1,148,563

TEXTILES – 0.03%
Angelica Corp.	10		241
Culp Inc.¹	10		78
Mohawk Industries Inc.¹	55		4,045
UniFirst Corp.	10		297

			4,661

TOYS, GAMES & HOBBIES – 0.09%
Action Performance Companies Inc.²	15		162
Boyds Collection Ltd. (The)^1,2	25		68
Department 56 Inc.¹	15		231
Hasbro Inc.	160		2,907
LeapFrog Enterprises Inc.^1,2	30		594
Marvel Enterprises Inc.¹	70		914
Mattel Inc.	445		7,796

			12,672

TRANSPORTATION – 1.10%
Airnet Systems Inc.¹	10		42
Burlington Northern Santa Fe Corp.	385		13,660
Canadian National Railway Co. (Canada)	295		13,284
Canadian Pacific Railway Ltd. (Canada)	165		4,203
CHC Helicopter Corp. Class A (Canada)	15		506
CNF Inc.	50		2,063
CP Ships Ltd. (Canada)	90		1,499
CSX Corp.	220		6,886
FedEx Corp.	285		23,336
Florida East Coast Industries Inc.	15		558
Frontline Ltd.	45		1,726
General Maritime Corp.^1,2	67		1,987
Genesee & Wyoming Inc. Class A¹	20		464
Grupo TMM SA ADR¹	30		61
Guangshen Railway Co. Ltd. ADR	30		432
International Shipholding Corp.¹	5		75
Kansas City Southern Industries Inc.^1,2	65		950
Kirby Corp.¹	20		772
Laidlaw International Inc.¹	105		1,475
Maritrans Inc.	10		156
Norfolk Southern Corp.	405		10,809
Offshore Logistics Inc.¹	20		579
OMI Corp.	156		2,270
Overseas Shipholding Group Inc.	25		1,123
RailAmerica Inc.¹	30		338
Ryder System Inc.	65		2,789
Sea Containers Ltd. Class A	20		337
Ship Finance International Ltd.	11		187
SIRVA Inc.¹	75		1,754
Stelmar Shipping Ltd.	15		502
Teekay Shipping Corp.	81		3,222
Todd Shipyards Corp.	5		82
TPG NV ADR	325		7,215
Tsakos Energy Navigation Ltd. (Greece)	20		675
Union Pacific Corp.	265		14,930
United Parcel Service Inc. Class B	565		40,657

			161,604

TRUCKING & LEASING – 0.01%
GATX Corp.	40		1,019
Greenbrier Companies Inc. (The)	5		115

			1,134

WATER – 0.23%
American States Water Co.	15		346
Aqua America Inc.	95		1,848
California Water Service Group²	15		409
Companhia de Saneamento Basico do Estado de Sao Paulo ADR	35		406
Suez SA ADR	960		19,027
United Utilities PLC ADR	285		5,421
Veolia Environnement ADR	265		7,121

			34,578

TOTAL COMMON STOCKS (Cost: $14,858,998)			14,690,611

PREFERRED STOCKS – 0.00%

REAL ESTATE INVESTMENT TRUSTS – 0.00%
Public Storage Inc. Class A	10		269

			269

TOTAL PREFERRED STOCKS (Cost: $290)			269


82		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® NYSE COMPOSITE INDEX FUND

July 31, 2004


*Security*	Shares or Principal		*Value*
SHORT-TERM INVESTMENTS – 9.65%

MONEY MARKET FUNDS – 2.41%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^4,5		219,646	$	219,646
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^4,5		119,693		119,693
BlackRock Temp Cash Money Market Fund⁵		5,493		5,493
Short-Term Investment Co. - Prime Money Market Portfolio⁵		9,362		9,362

				354,194

FLOATING RATE NOTES – 2.34%
Beta Finance Inc.
1.30%, 05/04/05^5,6	$	6,529		6,528
1.31%, 10/12/04^5,6		5,441		5,440
1.34%, 09/15/04^5,6		10,881		10,881
1.42%, 03/15/05^5,6		5,441		5,443
1.48%, 08/23/04^5,6		5,441		5,441
Canadian Imperial Bank of Commerce
1.24%, 10/07/04⁵		8,161		8,161
1.38%, 11/22/04⁵		2,720		2,720
1.40%, 10/29/04⁵		10,881		10,881
CC USA Inc.
1.30%, 05/04/05^5,6		10,881		10,880
1.61%, 07/29/05^5,6		10,881		10,878
Depfa Bank PLC
1.27%, 06/15/05⁵		10,881		10,881
Dorada Finance Inc.
1.61%, 07/29/05^5,6		9,031		9,029
Five Finance Inc.
1.42%, 04/29/05^5,6		8,705		8,704
HBOS Treasury Services PLC
1.24%, 04/01/05⁵		6,964		6,963
1.58%, 04/22/05⁵		10,881		10,881
K2 USA LLC
1.34%, 08/16/04^5,6		2,720		2,720
1.41%, 09/27/04^5,6		11,752		11,751
1.49%, 06/10/05^5,6		10,881		10,880
1.61%, 07/25/05^5,6		5,441		5,440
*Security*	*Principal*		*Value*
Links Finance LLC
1.33%, 04/15/05⁵	$	10,881	$	10,880
1.68%, 04/25/05⁵		10,881		10,886
Nationwide Building Society
1.59%, 07/28/05^5,6		10,881		10,881
1.63%, 12/09/04⁵		9,031		8,979
Northern Rock PLC
1.56%, 01/13/05^5,6		10,337		10,338
Permanent Financing PLC
1.31%, 03/10/05⁵		10,881		10,881
1.32%, 12/10/04⁵		5,441		5,441
1.34%, 06/10/05⁵		4,897		4,897
Sigma Finance Inc.
1.35%, 11/15/04⁵		10,881		10,881
1.52%, 10/07/04⁵		10,881		10,881
Tango Finance Corp.
1.20%, 05/17/05^5,6		9,031		9,032
1.23%, 02/25/05^5,6		6,093		6,093
1.32%, 04/07/05^5,6		3,993		3,993
1.34%, 01/18/05^5,6		4,788		4,787
1.42%, 07/25/05^5,6		10,881		10,880
WhistleJacket Capital LLC
1.26%, 10/20/04^5,6		2,695		2,688
1.34%, 09/15/04^5,6		5,436		5,436
1.38%, 07/15/05^5,6		8,161		8,159
1.48%, 06/15/05^5,6		5,441		5,439
White Pine Finance LLC
1.21%, 05/20/05^5,6		4,897		4,896
1.33%, 04/15/05^5,6		8,161		8,160
1.33%, 07/05/05^5,6		5,441		5,439
1.34%, 11/15/04^5,6		6,529		6,529
1.35%, 06/15/05^5,6		4,461		4,461
1.40%, 08/26/04^5,6		5,441		5,441
1.55%, 07/11/05^5,6		2,720		2,721

				343,601

COMMERCIAL PAPER – 1.77%
Alpine Securitization Corp.
1.31%, 08/12/04⁵		5,441		5,439


SCHEDULES OF INVESTMENTS		83

Schedule of Investments (Continued)

iSHARES^® NYSE COMPOSITE INDEX FUND

July 31, 2004


*Security*	*Principal*		*Value*
Amsterdam Funding Corp.
1.30%, 08/13/04⁵	$	8,161	$	8,158
1.33%, 08/16/04⁵		10,881		10,876
1.35%, 08/20/04⁵		3,264		3,262
1.37%, 08/24/04⁵		3,808		3,805
Barton Capital Corp.
1.29%, 08/10/04⁵		5,441		5,439
1.30%, 08/13/04⁵		4,472		4,471
1.35%, 08/18/04⁵		2,720		2,719
Blue Ridge Asset Funding Corp.
1.29%, 08/06/04⁵		5,441		5,440
Corporate Asset Funding
1.42%, 09/03/04⁵		3,264		3,260
CRC Funding LLC
1.42%, 09/03/04⁵		5,441		5,434
Edison Asset Securitization
1.07%, 09/21/04⁵		5,441		5,432
1.45%, 11/09/04⁵		10,881		10,838
1.59%, 12/02/04⁵		10,881		10,823
Falcon Asset Securitization Corp.
1.29%, 08/09/04⁵		10,337		10,335
1.30%, 08/03/04⁵		5,441		5,440
1.34%, 08/19/04⁵		5,441		5,437
1.37%, 08/24/04⁵		4,352		4,349
Ford Credit Auto Receivables
1.85%, 01/14/05⁵		5,441		5,394
GIRO Funding US Corp.
1.55%, 10/15/04⁵		7,135		7,113
Grampian Funding LLC
1.26%, 10/22/04⁵		10,881		10,850
1.44%, 10/27/04⁵		10,881		10,844
1.59%, 11/30/04⁵		5,441		5,412
Jupiter Securitization Corp.
1.30%, 08/12/04⁵		5,441		5,439
1.37%, 08/20/04⁵		7,280		7,275
Park Avenue Receivables Corp.
1.35%, 08/19/04⁵		5,441		5,437
Preferred Receivables Funding Corp.
1.29%, 08/05/04⁵		5,026		5,025
1.36%, 08/23/04⁵		5,441		5,436
Receivables Capital Corp.
1.30%, 08/12/04⁵		3,808		3,807
1.34%, 08/16/04⁵		651		650
1.35%, 08/18/04⁵		4,897		4,894
1.35%, 08/19/04⁵		1,850		1,849
Scaldis Capital LLC
1.34%, 08/16/04⁵		10,881		10,875
1.37%, 08/20/04⁵		1,632		1,631
1.40%, 08/25/04⁵		13,601		13,589
Sydney Capital Corp.
1.25%, 10/22/04⁵		3,621		3,611
1.31%, 08/12/04⁵		4,352		4,351
Thames Asset Global Securitization No. 1 Inc.
1.30%, 08/12/04⁵		5,742		5,740
1.34%, 08/16/04⁵		3,047		3,045
1.36%, 08/20/04⁵		8,161		8,155
1.37%, 08/19/04⁵		3,039		3,037
1.37%, 08/20/04⁵		1,415		1,414
Windmill Funding Corp.
1.29%, 08/06/04⁵		13,601		13,600

				259,430

TIME DEPOSITS – 1.54%
Abbey National Treasury Services PLC
1.25%, 01/06/05⁵		10,881		10,881
1.33%, 02/10/05⁵		5,441		5,440
1.39%, 02/02/05⁵		5,441		5,440
1.39%, 04/08/05⁵		7,617		7,616
1.40%, 10/25/04⁵		10,881		10,881
Bank of New York
1.39%, 11/01/04⁵		10,881		10,881
1.60%, 12/03/04⁵		2,720		2,720
Bank of Nova Scotia
1.13%, 10/06/04⁵		10,881		10,881
1.24%, 10/07/04⁵		8,161		8,161
1.42%, 10/29/04⁵		8,161		8,161
National City Bank (Cleveland, Ohio)
1.25%, 01/06/05⁵		10,881		10,881
1.35%, 06/10/05⁵		5,441		5,442
1.36%, 06/23/05⁵		10,881		10,878


84		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® NYSE COMPOSITE INDEX FUND

July 31, 2004


*Security*	*Principal*		*Value*
Norddeutsche Landesbank
1.59%, 07/27/05⁵	$	10,881	$	10,877
Nordea Bank PLC
2.11%, 06/07/05⁵		10,881		10,879
Prudential Funding LLC
1.60%, 12/01/04⁵		5,441		5,411
Toronto-Dominion Bank
1.22%, 03/23/05⁵		19,042		19,040
1.34%, 02/10/05⁵		4,352		4,352
1.41%, 11/01/04⁵		8,161		8,161
1.77%, 05/10/05⁵		5,441		5,440
1.90%, 05/11/05⁵		5,441		5,440
UBS Finance (Delaware)
1.10%, 09/08/04⁵		10,881		10,869
1.11%, 12/17/04⁵		16,322		16,253
1.13%, 08/09/04⁵		10,881		10,879
1.14%, 09/29/04⁵		10,881		10,861

				226,725

REPURCHASE AGREEMENTS – 0.93%
Banc of America Securities LLC
1.34%, 08/02/04^5,7		28,291		28,291
Bank of America, N.A.
1.37%, 08/02/04^5,7		54,406		54,406
Goldman Sachs & Co.
1.37%, 08/02/04^5,7		54,406		54,406

				137,103

U.S. GOVERNMENT AGENCY NOTES – 0.39%
Federal Home Loan Mortgage Corp.
1.28%, 08/19/04⁵		4,352		4,350
1.63%, 04/15/05⁵		7,617		7,634
1.80%, 01/18/05⁵		5,060		5,017
1.80%, 01/19/05⁵		5,441		5,394
2.06%, 05/31/05⁵		5,425		5,331
Federal National Mortgage Association
1.28%, 08/20/04⁵		14,146		14,136
2.33%, 07/22/05⁵		16,322		15,949

				57,811

MEDIUM-TERM NOTES – 0.27%
CC USA Inc.
1.29%, 04/15/05^5,6		10,881		10,880
1.51%, 02/15/05^5,6		7,073		7,079
Dorada Finance Inc.
1.24%, 08/09/04^5,6		2,720		2,720
1.48%, 01/18/05^5,6		8,161		8,161
K2 USA LLC
1.46%, 01/12/05^5,6		5,441		5,440
Sigma Finance Inc.
1.24%, 08/06/04⁵		2,720		2,720
WhistleJacket Capital LLC
1.32%, 02/04/05^5,6		2,720		2,720

				39,720

TOTAL SHORT-TERM INVESTMENTS (Cost: $1,418,584)				1,418,584

TOTAL INVESTMENTS IN SECURITIES – 109.55% (Cost: $16,277,872)				16,109,464

Other Assets, Less Liabilities – (9.55%)				(1,404,243	)

NET ASSETS – 100.00%			$	14,705,221

ADR - American Depositary Receipts

GDR - Global Depositary Receipts

NVS - Non-Voting Shares

NYS - New York Registered Shares

¹	Non-income earning security.

²	All or a portion of this security represents a security on loan. See Note 5.

³	Security valued at fair value in accordance with procedures approved by the Board of Trustees. See Note 1.

⁴	Issuer is an affiliate of the Fund’s investment adviser. See Note 2.

⁵	All or a portion of this security represents an investment of securities lending collateral. See Note 5.

⁶	Security exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

⁷	Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.61% to 7.00% and maturity dates ranging from 7/1/13 to 7/1/34.


SCHEDULES OF INVESTMENTS		85

Schedule of Investments (Continued)

iSHARES^® NYSE COMPOSITE INDEX FUND

July 31, 2004

SECTOR DIVERSIFICATION


*Sector*	% of Net Assets		*Value*
Financial	24.71	%	$	3,633,344
Consumer Non-Cyclical	20.40			3,000,132
Communications	11.15			1,639,657
Energy	11.08			1,630,038
Industrial	10.26			1,508,302
Consumer Cyclical	9.47			1,392,403
Technology	4.71			692,602
Basic Materials	4.32			635,770
Utilities	3.72			546,570
Diversified	0.08			12,062
Short-Term and Other Net Assets	0.10			14,341

TOTAL	100.00	%	$	14,705,221

See notes to financial statements.


86		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® NYSE 100 INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
COMMON STOCKS – 99.89%

AEROSPACE & DEFENSE – 1.83%
Boeing Co. (The)	4,297	$	218,073
Lockheed Martin Corp.	2,048		108,523
United Technologies Corp.	2,943		275,170

			601,766

AGRICULTURE – 1.70%
Altria Group Inc.	11,760		559,776

			559,776

AUTO MANUFACTURERS – 0.80%
Ford Motor Co.	10,056		148,024
General Motors Corp.²	2,641		113,933

			261,957

BANKS – 7.74%
Bank of America Corp.	11,687		993,512
Bank of New York Co. Inc. (The)	4,472		128,481
National City Corp.	3,451		125,961
SunTrust Banks Inc.	1,540		101,563
U.S. Bancorp	10,846		306,942
Wachovia Corp.	7,525		333,433
Wells Fargo & Co.	9,677		555,557

			2,545,449

BEVERAGES – 3.93%
Anheuser-Busch Companies Inc.	4,591		238,273
Coca-Cola Co. (The)	12,843		563,294
PepsiCo Inc.	9,790		489,500

			1,291,067

BIOTECHNOLOGY – 0.37%
Genentech Inc.¹	2,527		123,014

			123,014

CHEMICALS – 1.40%
Dow Chemical Co. (The)	5,357		213,691
Du Pont (E.I.) de Nemours and Co.	5,726		245,474

			459,165

COMMERCIAL SERVICES – 0.41%
Cendant Corp.	5,853		133,917

			133,917

COMPUTERS – 3.98%
EMC Corp.¹	13,798		151,364
Hewlett-Packard Co.	15,700		316,355
International Business Machines Corp.	9,662		841,270

			1,308,989

COSMETICS & PERSONAL CARE – 3.99%
Colgate-Palmolive Co.	2,841		151,141
Gillette Co. (The)	5,205		202,891
Kimberly-Clark Corp.	2,875		184,201
Procter & Gamble Co.	14,819		772,811

			1,311,044

DIVERSIFIED FINANCIAL SERVICES – 11.88%
American Express Co.	6,482		325,720
Citigroup Inc.	29,642		1,306,916
Federal Home Loan Mortgage Corp.	3,952		254,153
Federal National Mortgage Association	5,005		355,155
Goldman Sachs Group Inc. (The)	2,366		208,658
JP Morgan Chase & Co.	20,430		762,652
MBNA Corp.	6,455		159,374
Merrill Lynch & Co. Inc.	5,056		251,384
Morgan Stanley	5,753		283,795

			3,907,807

ELECTRIC – 1.08%
Dominion Resources Inc.	1,860		118,036
Duke Energy Corp.²	5,208		111,972
Southern Co. (The)	4,235		124,001

			354,009

ELECTRICAL COMPONENTS & EQUIPMENT – 0.44%
Emerson Electric Co.	2,410		146,287

			146,287

FOOD – 0.38%
Sysco Corp.	3,669		126,397

			126,397

FOREST PRODUCTS & PAPER – 0.36%
International Paper Co.	2,771		119,790

			119,790

HEALTH CARE-PRODUCTS – 4.31%
Boston Scientific Corp.¹	3,416		130,696
Johnson & Johnson	17,018		940,585
Medtronic Inc.	6,944		344,908

			1,416,189


SCHEDULES OF INVESTMENTS		87

Schedule of Investments (Continued)

iSHARES^® NYSE 100 INDEX FUND

July 31, 2004


*Security*	*Shares*	*Value*
HEALTH CARE-SERVICES – 1.02%
HCA Inc.²	2,480	$	95,852
UnitedHealth Group Inc.	3,800		239,020

			334,872

INSURANCE – 4.84%
Allstate Corp. (The)	4,029		189,685
American International Group Inc.	13,134		927,917
Marsh & McLennan Cos. Inc.	2,844		126,217
MetLife Inc.	1,837		65,526
Prudential Financial Inc.	3,019		140,565
St. Paul Travelers Companies Inc.	3,835		142,163

			1,592,073

LEISURE TIME – 0.31%
Carnival Corp.	2,194		102,262

			102,262

MACHINERY – 0.44%
Caterpillar Inc.	1,954		143,599

			143,599

MANUFACTURING – 9.08%
General Electric Co.	59,733		1,986,122
Honeywell International Inc.	4,508		169,546
Illinois Tool Works Inc.	1,520		137,590
3M Co.	4,108		338,335
Tyco International Ltd.²	11,488		356,128

			2,987,721

MEDIA – 4.37%
Clear Channel Communications Inc.	3,212		114,668
Cox Communications Inc. Class A^1,2	1,155		31,855
DIRECTV Group Inc. (The)¹	3,667		59,442
Gannett Co. Inc.	1,556		129,366
Liberty Media Corp. Class A	14,779		125,326
Time Warner Inc.¹	25,132		418,448
Viacom Inc. Class B	8,564		287,665
Walt Disney Co. (The)	11,760		271,538

			1,438,308

MINING – 0.48%
Alcoa Inc.	4,958		158,805

			158,805

OIL & GAS – 7.92%
ChevronTexaco Corp.	6,136		586,908
ConocoPhillips	3,578		281,839
Exxon Mobil Corp.	37,483		1,735,463

			2,604,210

OIL & GAS SERVICES – 0.66%
Schlumberger Ltd.	3,372		216,887

			216,887

PHARMACEUTICALS – 10.68%
Abbott Laboratories	8,934		351,553
Bristol-Myers Squibb Co.	11,132		254,923
Cardinal Health Inc.	2,451		109,069
Forest Laboratories Inc.¹	695		34,952
Lilly (Eli) & Co.	5,528		352,244
Merck & Co. Inc.	12,742		577,850
Pfizer Inc.	43,736		1,397,803
Schering-Plough Corp.	8,409		163,639
Wyeth	7,635		270,279

			3,512,312

RETAIL – 6.25%
Home Depot Inc.	12,839		432,931
Lowe’s Companies Inc.	4,053		197,462
McDonald’s Corp.	7,222		198,605
Target Corp.	4,745		206,882
Walgreen Co.	5,863		213,413
Wal-Mart Stores Inc.	15,185		804,957

			2,054,250

SAVINGS & LOANS – 0.58%
Washington Mutual Inc.	4,934		191,439

			191,439

SEMICONDUCTORS – 0.64%
Texas Instruments Inc.	9,908		211,338

			211,338

SOFTWARE – 1.11%
Automatic Data Processing Inc.	3,366		141,305
First Data Corp.	5,010		223,496

			364,801

TELECOMMUNICATIONS – 5.79%
AT&T Wireless Services Inc.¹	12,896		186,218
BellSouth Corp.	10,502		284,499
Motorola Inc.	13,418		213,749
SBC Communications Inc.	18,964		480,548


88		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® NYSE 100 INDEX FUND

July 31, 2004


*Security*	Shares or Principal		*Value*
Sprint Corp. (FON Group)		6,787	$	126,781
Verizon Communications Inc.		15,885		612,208

				1,904,003

TRANSPORTATION – 1.12%
FedEx Corp.		1,595		130,599
United Parcel Service Inc. Class B		3,307		237,972

				368,571

TOTAL COMMON STOCKS (Cost: $33,217,978)				32,852,074

SHORT-TERM INVESTMENTS – 2.09%

MONEY MARKET FUNDS – 0.60%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^3,4		133,335		133,335
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^3,4		55,266		55,266
BlackRock Temp Cash Money Market Fund³		2,536		2,536
Short-Term Investment Co.- PrimeMoney Market Portfolio³		4,323		4,323

				195,460

FLOATING RATE NOTES – 0.48%
Beta Finance Inc.
1.30%, 05/04/05^3,5	$	3,015		3,014
1.31%, 10/12/04^3,5		2,512		2,512
1.34%, 09/15/04^3,5		5,024		5,024
1.42%, 03/15/05^3,5		2,512		2,513
1.48%, 08/23/04^3,5		2,512		2,512
Canadian Imperial Bank of Commerce
1.24%, 10/07/04³		3,768		3,768
1.38%, 11/22/04³		1,256		1,256
1.40%, 10/29/04³		5,024		5,024
CC USA Inc.
1.30%, 05/04/05^3,5		5,024		5,023
1.61%, 07/29/05^3,5		5,024		5,023
*Security*	*Principal*		*Value*
Depfa Bank PLC
1.27%, 06/15/05³	$	5,024	$	5,025
Dorada Finance Inc.
1.61%, 07/29/05^3,5		4,170		4,169
Five Finance Inc.
1.42%, 04/29/05^3,5		4,019		4,019
HBOS Treasury Services PLC
1.24%, 04/01/05³		3,215		3,215
1.58%, 04/22/05³		5,024		5,025
K2 USA LLC
1.34%, 08/16/04^3,5		1,256		1,256
1.41%, 09/27/04^3,5		5,426		5,426
1.49%, 06/10/05^3,5		5,024		5,024
1.61%, 07/25/05^3,5		2,512		2,512
Links Finance LLC
1.33%, 04/15/05³		5,024		5,024
1.68%, 04/25/05³		5,024		5,027
Nationwide Building Society
1.59%, 07/28/05^3,5		5,024		5,025
1.63%, 12/09/04³		4,170		4,146
Northern Rock PLC
1.56%, 01/13/05^3,5		4,773		4,773
Permanent Financing PLC
1.31%, 03/10/05³		5,024		5,025
1.32%, 12/10/04³		2,512		2,513
1.34%, 06/10/05³		2,261		2,261
Sigma Finance Inc.
1.35%, 11/15/04³		5,024		5,024
1.52%, 10/07/04³		5,024		5,024
Tango Finance Corp.
1.20%, 05/17/05^3,5		4,170		4,170
1.23%, 02/25/05^3,5		2,814		2,813
1.32%, 04/07/05^3,5		1,844		1,844
1.34%, 01/18/05^3,5		2,211		2,211
1.42%, 07/25/05^3,5		5,024		5,024
WhistleJacket Capital LLC
1.26%, 10/20/04^3,5		1,244		1,241
1.34%, 09/15/04^3,5		2,512		2,512
1.38%, 07/15/05^3,5		3,768		3,767
1.48%, 06/15/05^3,5		2,512		2,512


SCHEDULES OF INVESTMENTS		89

Schedule of Investments (Continued)

iSHARES^® NYSE 100 INDEX FUND

July 31, 2004


*Security*	*Principal*		*Value*
White Pine Finance LLC
1.21%, 05/20/05^3,5	$	2,261	$	2,261
1.33%, 04/15/05^3,5		3,768		3,768
1.33%, 07/05/05^3,5		2,512		2,512
1.34%, 11/15/04^3,5		3,015		3,015
1.35%, 06/15/05^3,5		2,060		2,060
1.40%, 08/26/04^3,5		2,512		2,512
1.55%, 07/11/05^3,5		1,256		1,256

				158,660

COMMERCIAL PAPER – 0.36%
Alpine Securitization Corp.
1.31%, 08/12/04³		2,512		2,511
Amsterdam Funding Corp.
1.30%, 08/13/04³		3,768		3,767
1.33%, 08/16/04³		5,024		5,022
1.35%, 08/20/04³		1,507		1,506
1.37%, 08/24/04³		1,758		1,757
Barton Capital Corp.
1.29%, 08/10/04³		2,512		2,511
1.30%, 08/13/04³		2,065		2,064
1.35%, 08/18/04³		1,256		1,255
Blue Ridge Asset Funding Corp.
1.29%, 08/06/04³		2,512		2,512
Corporate Asset Funding
1.42%, 09/03/04³		1,507		1,506
CRC Funding LLC
1.42%, 09/03/04³		2,512		2,509
Edison Asset Securitization
1.07%, 09/21/04³		2,512		2,508
1.45%, 11/09/04³		5,024		5,004
1.59%, 12/02/04³		5,024		4,997
Falcon Asset Securitization Corp.
1.29%, 08/09/04³		4,773		4,772
1.30%, 08/03/04³		2,512		2,512
1.34%, 08/19/04³		2,512		2,511
1.37%, 08/24/04³		2,010		2,008
Ford Credit Auto Receivables
1.85%, 01/14/05³		2,512		2,491
GIRO Funding US Corp.
1.55%, 10/15/04³		3,295		3,284
Grampian Funding LLC
1.26%, 10/22/04³		5,024		5,010
1.44%, 10/27/04³		5,024		5,007
1.59%, 11/30/04³		2,512		2,499
Jupiter Securitization Corp.
1.30%, 08/12/04³		2,512		2,511
1.37%, 08/20/04³		3,361		3,359
Park Avenue Receivables Corp.
1.35%, 08/19/04³		2,512		2,511
Preferred Receivables Funding Corp.
1.29%, 08/05/04³		2,321		2,320
1.36%, 08/23/04³		2,512		2,510
Receivables Capital Corp.
1.30%, 08/12/04³		1,758		1,758
1.34%, 08/16/04³		300		300
1.35%, 08/18/04³		2,261		2,260
1.35%, 08/19/04³		854		854
Scaldis Capital LLC
1.34%, 08/16/04³		5,024		5,022
1.37%, 08/20/04³		754		753
1.40%, 08/25/04³		6,280		6,275
Sydney Capital Corp.
1.25%, 10/22/04³		1,672		1,667
1.31%, 08/12/04³		2,010		2,009
Thames Asset Global Securitization No. 1 Inc.
1.30%, 08/12/04³		2,651		2,651
1.34%, 08/16/04³		1,407		1,406
1.36%, 08/20/04³		3,768		3,766
1.37%, 08/19/04³		1,403		1,403
1.37%, 08/20/04³		653		653
Windmill Funding Corp.
1.29%, 08/06/04³		6,280		6,279

				119,790

TIME DEPOSITS – 0.32%
Abbey National Treasury Services PLC
1.25%, 01/06/05³		5,024		5,025
1.33%, 02/10/05³		2,512		2,512
1.39%, 02/02/05³		2,512		2,512
1.39%, 04/08/05³		3,517		3,517
1.40%, 10/25/04³		5,024		5,024


90		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® NYSE 100 INDEX FUND

July 31, 2004


*Security*	*Principal*		*Value*
Bank of New York
1.39%, 11/01/04³	$	5,024	$	5,024
1.60%, 12/03/04³		1,256		1,256
Bank of Nova Scotia
1.13%, 10/06/04³		5,024		5,025
1.24%, 10/07/04³		3,768		3,768
1.42%, 10/29/04³		3,768		3,768
National City Bank (Cleveland, Ohio)
1.25%, 01/06/05³		5,024		5,024
1.35%, 06/10/05³		2,512		2,513
1.36%, 06/23/05³		5,024		5,023
Norddeutsche Landesbank
1.59%, 07/27/05³		5,024		5,022
Nordea Bank PLC
2.11%, 06/07/05³		5,024		5,023
Prudential Funding LLC
1.60%, 12/01/04³		2,512		2,499
Toronto-Dominion Bank
1.22%, 03/23/05³		8,792		8,791
1.34%, 02/10/05³		2,010		2,010
1.41%, 11/01/04³		3,768		3,768
1.77%, 05/10/05³		2,512		2,512
1.90%, 05/11/05³		2,512		2,512
UBS Finance (Delaware)
1.10%, 09/08/04³		5,024		5,019
1.11%, 12/17/04³		7,536		7,504
1.13%, 08/09/04³		5,024		5,024
1.14%, 09/29/04³		5,024		5,015

				104,690

REPURCHASE AGREEMENTS – 0.19%
Banc of America Securities LLC
1.34%, 08/02/04^3,6		13,063		13,063
Bank of America, N.A.
1.37%, 08/02/04^3,6		25,121		25,121
Goldman Sachs & Co.
1.37%, 08/02/04^3,6		25,121		25,121

				63,305

U.S. GOVERNMENT AGENCY NOTES – 0.08%
Federal Home Loan Mortgage Corp.
1.28%, 08/19/04³		2,010		2,008
1.63%, 04/15/05³		3,517		3,525
1.80%, 01/18/05³		2,336		2,317
1.80%, 01/19/05³		2,512		2,491
2.06%, 05/31/05³		2,505		2,461
Federal National Mortgage Association
1.28%, 08/20/04³		6,531		6,527
2.33%, 07/22/05³		7,536		7,364

				26,693

MEDIUM-TERM NOTES – 0.06%
CC USA Inc.
1.29%, 04/15/05³^,⁵		5,024		5,024
1.51%, 02/15/05^3,⁵		3,266		3,268
Dorada Finance Inc.
1.24%, 08/09/04^3,⁵		1,256		1,256
1.48%, 01/18/05^3,⁵		3,768		3,768
K2 USA LLC
1.46%, 01/12/05^3,⁵		2,512		2,512
Sigma Finance Inc.
1.24%, 08/06/04³		1,256		1,256
WhistleJacket Capital LLC
1.32%, 02/04/05^3,5		1,245		1,245

				18,329

TOTAL SHORT-TERM INVESTMENTS (Cost: $686,927)				686,927

TOTAL INVESTMENTS IN SECURITIES – 101.98% (Cost: $33,904,905)				33,539,001

Other Assets, Less Liabilities – (1.98%)				(650,610	)

NET ASSETS – 100.00%			$	32,888,391

¹	Non-income earning security.

²	All or a portion of this security represents a security on loan. See Note 5.

³	All or a portion of this security represents an investment of securities lending collateral. See Note 5.

⁴	Issuer is an affiliate of the Fund’s investment adviser. See Note 2.

⁵	Security exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

⁶	Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.61% to 7.00% and maturity dates ranging from 7/1/13 to 7/1/34.


SCHEDULES OF INVESTMENTS		91

Schedule of Investments (Continued)

iSHARES^® NYSE 100 INDEX FUND

July 31, 2004

SECTOR DIVERSIFICATION


*Sector*	*% of* *Net Assets*		*Value*
Consumer Non-Cyclical	26.78	%	$	8,808,588
Financial	25.05			8,236,768
Industrial	12.92			4,247,944
Communications	10.16			3,342,311
Energy	8.58			2,821,097
Consumer Cyclical	7.35			2,418,469
Technology	5.73			1,885,128
Basic Materials	2.24			737,760
Utilities	1.08			354,009
Short-Term and Other Net Assets	0.11			36,317

TOTAL	100.00	%	$	32,888,391

See notes to financial statements.


92		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Assets and Liabilities

iSHARES^® TRUST

July 31, 2004


	*iShares Goldman Sachs*
	Technology Index Fund			Networking Index Fund			Semiconductor Index Fund			Software Index Fund			Natural Resources Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	201,330,953		$	184,990,916		$	164,551,334		$	135,526,760		$	241,830,090

Affiliates of the investment adviser	$	3,196,071		$	4,718,903		$	3,539,830		$	2,827,924		$	4,945,752

Investments in securities, at value (including securities on loan^(a)) (Note 1):
Unaffiliated issuers	$	196,039,024		$	162,019,789		$	134,944,688		$	124,001,283		$	278,625,143
Affiliates of the investment adviser		3,196,071			4,718,903			3,539,830			2,827,924			4,945,752
Receivables:
Investment securities sold		—			2,134,745			317,453			—			—
Dividends and interest		15,420			7,451			27,779			1,408			156,480

Total Assets		199,250,515			168,880,888			138,829,750			126,830,615			283,727,375

LIABILITIES
Payables:
Investment securities purchased		—			2,115,805			—			—			—
Collateral for securities on loan (Note 5)		13,128,617			19,661,051			14,642,582			11,661,259			20,243,554
Investment advisory fees (Note 2)		155,900			118,461			121,123			92,640			213,543

Total Liabilities		13,284,517			21,895,317			14,763,705			11,753,899			20,457,097

NET ASSETS	$	185,965,998		$	146,985,571		$	124,066,045		$	115,076,716		$	263,270,278

Net assets consist of:
Paid-in capital	$	198,640,313		$	182,432,957		$	155,339,030		$	130,930,594		$	227,696,118
Undistributed net investment income		—			—			—			—			11,134
Accumulated net realized loss		(7,382,386	)		(12,476,259	)		(1,666,339	)		(4,328,401	)		(1,232,027	)
Net unrealized appreciation (depreciation)		(5,291,929	)		(22,971,127	)		(29,606,646	)		(11,525,477	)		36,795,053

NET ASSETS	$	185,965,998		$	146,985,571		$	124,066,045		$	115,076,716		$	263,270,278

Shares outstanding		4,450,000			5,450,000			2,450,000			3,400,000			2,250,000

Net asset value per share	$	41.79		$	26.97		$	50.64		$	33.85		$	117.01

^a	Securities on loan with market values of $12,592,745, $18,297,812, $13,748,172, $11,157,065 and $19,555,038, respectively. See Note 5.

See notes to financial statements.


FINANCIAL STATEMENTS		93

Statements of Assets and Liabilities (Continued)

iSHARES^® TRUST

July 31, 2004


	*iShares MSCI*			*iShares NYSE*
	EAFE Index Fund			Composite Index Fund			100 Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	9,600,505,081		$	15,877,599		$	33,716,304

Affiliates of the investment adviser	$	514,736,726		$	400,273		$	188,601

Foreign currency, at cost	$	21,395,609		$	—		$	—

Investments in securities, at value (including securities on loan^a) (Note 1):
Unaffiliated issuers	$	10,086,901,442		$	15,712,800		$	33,350,400
Affiliates of the investment adviser		512,934,259			396,664			188,601
Foreign currency, at value		20,943,823			—			—
Receivables:
Investment securities sold		30,390,226			5,563			84,030
Dividends and interest		11,528,782			20,210			59,011
Capital shares sold		2,249,605			—			—

Total Assets		10,664,948,137			16,135,237			33,682,042

LIABILITIES
Payables:
Investment securities purchased		40,672,761			10,120			129,796
Collateral for securities on loan (Note 5)		1,885,629,977			1,413,674			652,742
Investment advisory fees (Note 2)		4,904,236			6,222			11,113

Total Liabilities		1,931,206,974			1,430,016			793,651

NET ASSETS	$	8,733,741,163		$	14,705,221		$	32,888,391

Net assets consist of:
Paid-in capital	$	8,239,170,266		$	14,852,304		$	33,220,309
Undistributed net investment income		118,589,585			21,596			72,084
Accumulated net realized loss		(108,109,048	)		(271	)		(38,098	)
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies		484,090,360			(168,408	)		(365,904	)

NET ASSETS	$	8,733,741,163		$	14,705,221		$	32,888,391

Shares outstanding		64,000,000			250,000			550,000

Net asset value per share	$	136.46		$	58.82		$	59.80

^a	Securities on loan with market values of $1,793,462,412 and $1,367,445 and $634,116, respectively. See Note 5.

See notes to financial statements.


94		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations

iSHARES^® TRUST

Year Ended July 31, 2004


	*iShares Goldman Sachs*
	Technology Index Fund			Networking Index Fund			Semiconductor Index Fund			Software Index Fund			Natural Resources Index Fund
NET INVESTMENT INCOME
Dividends^a	$	429,045		$	204,350		$	503,694		$	118,726		$	2,684,270
Interest^b		496			647			509			393			828
Securities lending income^b		14,367			27,272			22,912			15,507			22,220

Total investment income		443,908			232,269			527,115			134,626			2,707,318

EXPENSES (Note 2)
Investment advisory fees		731,811			619,535			890,736			648,960			738,702

Total expenses		731,811			619,535			890,736			648,960			738,702

Net investment income (loss)		(287,903	)		(387,266	)		(363,621	)		(514,334	)		1,968,616

NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments		(2,227,949	)		(2,542,146	)		(190,284	)		(3,400,503	)		(285,351	)
In-kind redemptions		5,852,712			31,168,120			30,048,272			33,788,327			—

Net realized gain (loss)		3,624,763			28,625,974			29,857,988			30,387,824			(285,351	)

Net change in unrealized appreciation (depreciation)		(21,132	)		(22,441,267	)		(26,169,044	)		(12,372,561	)		36,823,886

Net realized and unrealized gain		3,603,631			6,184,707			3,688,944			18,015,263			36,538,535

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	3,315,728		$	5,797,441		$	3,325,323		$	17,500,929		$	38,507,151

^a	Net of foreign withholding tax of $1,188, $–, $7,094, $– and $135,970, respectively.

^b	Includes income earned from affiliates of the Funds’ investment adviser. See Note 2.

See notes to financial statements.


FINANCIAL STATEMENTS		95

Statements of Operations (Continued)

iSHARES^® TRUST

Year Ended July 31, 2004


	*iShares MSCI*			*iShares NYSE*
	EAFE Index Fund			Composite Index Fund^a			100 Index Fund^b
NET INVESTMENT INCOME
Dividends^c,d	$	154,582,251		$	95,164		$	201,871
Interest^d		22,356			38			68
Securities lending income^d		3,983,904			598			585

Total investment income		158,588,511			95,800			202,524

EXPENSES (Note 2)
Investment advisory fees		20,603,858			10,729			19,356

Total expenses		20,603,858			10,729			19,356

Net investment income		137,984,653			85,071			183,168

NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments		(27,997,882	)		680			(38,098	)
In-kind redemptions		42,008,674			—			—
Foreign currency transactions		1,207,980			—			—

Net realized gain (loss)		15,218,772			680			(38,098	)

Net change in unrealized appreciation (depreciation) on:
Investments		689,844,339			(168,408	)		(365,904	)
Translation of assets and liabilities in foreign currencies		(370,079	)		—			—

Net change in unrealized appreciation (depreciation)		689,474,260			(168,408	)		(365,904	)

Net realized and unrealized gain (loss)		704,693,032			(167,728	)		(404,002	)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	842,677,685		$	(82,657	)	$	(220,834	)

^a	For the period from March 30, 2004 (commencement of operations) through July 31, 2004.

^b	For the period from March 29, 2004 (commencement of operations) through July 31, 2004.

^c	Net of foreign withholding tax of $7,392,883, $5,587 and $–, respectively.

^d	Includes income earned from affiliates of the Funds’ investment adviser. See Note 2.

See notes to financial statements.


96		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets

iSHARES^® TRUST


	*iShares* *Goldman Sachs* *Technology* *Index Fund*						*iShares* *Goldman Sachs* *Networking* *Index Fund*						*iShares* *Goldman Sachs* *Semiconductor* *Index Fund*
	For the year ended July 31, 2004			For the year ended July 31, 2003			For the year ended July 31, 2004			For the year ended July 31, 2003			For the year ended July 31, 2004			For the year ended July 31, 2003
INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:
Net investment loss	$	(287,903	)	$	(98,761	)	$	(387,266	)	$	(45,668	)	$	(363,621	)	$	(125,706	)
Net realized gain (loss)		3,624,763			(2,212,428	)		28,625,974			(16,990,128	)		29,857,988			(8,081,409	)
Net change in unrealized appreciation (depreciation)		(21,132	)		19,307,985			(22,441,267	)		32,671,417			(26,169,044	)		25,211,542

Net increase in net assets resulting from operations		3,315,728			16,996,796			5,797,441			15,635,621			3,325,323			17,004,427

DISTRIBUTIONS TO SHAREHOLDERS:
Return of capital		—			—			—			—			(16,591	)		—

Total distributions to shareholders		—			—			—			—			(16,591	)		—

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		96,476,148			86,037,387			158,696,426			69,247,876			189,216,332			127,376,284
Cost of shares redeemed		(17,809,662	)		(20,244,859	)		(98,425,006	)		(28,185,614	)		(169,974,898	)		(107,386,390	)

Net increase in net assets from capital share transactions		78,666,486			65,792,528			60,271,420			41,062,262			19,241,434			19,989,894

INCREASE IN NET ASSETS		81,982,214			82,789,324			66,068,861			56,697,883			22,550,166			36,994,321

NET ASSETS:
Beginning of year		103,983,784			21,194,460			80,916,710			24,218,827			101,515,879			64,521,558

End of year	$	185,965,998		$	103,983,784		$	146,985,571		$	80,916,710		$	124,066,045		$	101,515,879

SHARES ISSUED AND REDEEMED:
Shares sold		2,150,000			2,650,000			5,150,000			3,950,000			3,300,000			3,250,000
Shares redeemed		(400,000	)		(650,000	)		(3,600,000	)		(1,900,000	)		(2,950,000	)		(2,700,000	)

Net increase in shares outstanding		1,750,000			2,000,000			1,550,000			2,050,000			350,000			550,000

See notes to financial statements.


FINANCIAL STATEMENTS		97

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST


	*iShares* *Goldman Sachs* *Software* *Index Fund*						*iShares* *Goldman Sachs* *Natural Resources* *Index Fund*						*iShares* *MSCI EAFE* *Index Fund*
	For the year ended July 31, 2004			For the year ended July 31, 2003			For the year ended July 31, 2004			For the year ended July 31, 2003			For the year ended July 31, 2004			For the year ended July 31, 2003
INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:
Net investment income (loss)	$	(514,334	)	$	(202,351	)	$	1,968,616		$	597,223		$	137,984,653		$	54,720,307
Net realized gain (loss)		30,387,824			(7,013,246	)		(285,351	)		(620,341	)		15,218,772			(392,716,913	)
Net change in unrealized appreciation (depreciation)		(12,372,561	)		21,140,911			36,823,886			3,257,961			689,474,260			339,476,484

Net increase in net assets resulting from operations		17,500,929			13,925,314			38,507,151			3,234,843			842,677,685			1,479,878

DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		—			—			(1,994,347	)		(526,412	)		(60,506,712	)		(41,788,985	)

Total distributions to shareholders		—			—			(1,994,347	)		(526,412	)		(60,506,712	)		(41,788,985	)

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		152,789,369			123,561,162			174,538,103			28,693,690			5,077,705,450			1,397,031,369
Cost of shares redeemed		(170,410,559	)		(60,058,684	)		—			—			(135,907,513	)		(2,150,388,129	)

Net increase (decrease) in net assets from capital share transactions		(17,621,190	)		63,502,478			174,538,103			28,693,690			4,941,797,937			(753,356,760	)

INCREASE (DECREASE) IN NET ASSETS		(120,261	)		77,427,792			211,050,907			31,402,121			5,723,968,910			(793,665,867	)

NET ASSETS:
Beginning of year		115,196,977			37,769,185			52,219,371			20,817,250			3,009,772,253			3,803,438,120

End of year	$	115,076,716		$	115,196,977		$	263,270,278		$	52,219,371		$	8,733,741,163		$	3,009,772,253

Undistributed net investment income included in net assets at end of year	$	—		$	—		$	11,134		$	69,217		$	118,589,585		$	39,689,896

SHARES ISSUED AND REDEEMED:
Shares sold		4,250,000			4,400,000			1,650,000			350,000			37,800,000			13,400,000
Shares redeemed		(4,500,000	)		(2,350,000	)		—			—			(1,000,000	)		(22,000,000	)

Net increase (decrease) in shares outstanding		(250,000	)		2,050,000			1,650,000			350,000			36,800,000			(8,600,000	)

See notes to financial statements.


98		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST


	*iShares* *NYSE* *Composite* *Index Fund*			*iShares* *NYSE* *100* *Index Fund*
	For the period March 30, 2004^a to July 31, 2004			For the period March 29, 2004^a to July 31, 2004
INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:
Net investment income	$	85,071		$	183,168
Net realized gain (loss)		680			(38,098	)
Net change in unrealized appreciation (depreciation)		(168,408	)		(365,904	)

Net decrease in net assets resulting from operations		(82,657	)		(220,834	)

DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(64,426	)		(111,084	)

Total distributions to shareholders		(64,426	)		(111,084	)

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		14,852,304			33,220,309

Net increase in net assets from capital share transactions		14,852,304			33,220,309

INCREASE IN NET ASSETS		14,705,221			32,888,391

NET ASSETS:
Beginning of period		—			—

End of period	$	14,705,221		$	32,888,391

Undistributed net investment income included in net assets at end of period	$	21,596		$	72,084

SHARES ISSUED AND REDEEMED:
Shares sold		250,000			550,000

Net increase in shares outstanding		250,000			550,000

^a	Commencement of operations.

See notes to financial statements.


FINANCIAL STATEMENTS		99

Financial Highlights

iSHARES^® TRUST

(For a share outstanding throughout each period)


	*iShares Goldman Sachs Technology Index Fund*
	Year ended Jul. 31, 2004			Year ended Jul. 31, 2003			Year ended Jul. 31, 2002			Period from Mar. 13, 2001^a to Jul. 31, 2001
Net asset value, beginning of period	$	38.51		$	30.28		$	54.58		$	56.71

Income from investment operations:
Net investment loss		(0.06	)		(0.04	)		(0.25	)		(0.08	)
Net realized and unrealized gain (loss)		3.34			8.27			(24.05	)		(2.05	)

Total from investment operations		3.28			8.23			(24.30	)		(2.13	)

Net asset value, end of period	$	41.79		$	38.51		$	30.28		$	54.58

Total return		8.52	%		27.18	%		(44.52	)%		(3.76	)%^b

Ratios/Supplemental data:
Net assets, end of period (000s)	$	185,966		$	103,984		$	21,194		$	79,142
Ratio of expenses to average net assets^c		0.50	%		0.50	%		0.50	%		0.50	%
Ratio of net investment loss to average net assets^c		(0.20	)%		(0.18	)%		(0.30	)%		(0.33	)%
Portfolio turnover rate^d		5	%		11	%		8	%		0	%^e

^a	Commencement of operations.

^b	Not annualized.

^c	Annualized for periods of less than one year.

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

^e	Rounds to less than 1%.

See notes to financial statements.


100		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	*iShares Goldman Sachs Networking Index Fund*
	Year ended Jul. 31, 2004			Year ended Jul. 31, 2003			Year ended Jul. 31, 2002			Period from Jul. 10, 2001^a to Jul. 31, 2001
Net asset value, beginning of period	$	20.75		$	13.09		$	38.02		$	36.32

Income from investment operations:
Net investment loss		(0.07	)		(0.01	)		(0.06	)		(0.01	)
Net realized and unrealized gain (loss)		6.29			7.67			(24.87	)		1.71

Total from investment operations		6.22			7.66			(24.93	)		1.70

Net asset value, end of period	$	26.97		$	20.75		$	13.09		$	38.02

Total return		29.98	%		58.52	%		(65.57	)%		4.68	%^b

Ratios/Supplemental data:
Net assets, end of period (000s)	$	146,986		$	80,917		$	24,219		$	24,716
Ratio of expenses to average net assets^c		0.50	%		0.50	%		0.50	%		0.50	%
Ratio of net investment loss to average net assets^c		(0.31	)%		(0.17	)%		(0.34	)%		(0.50	)%
Portfolio turnover rate^d		12	%		26	%		46	%		9	%

^a	Commencement of operations.

^b	Not annualized.

^c	Annualized for periods of less than one year.

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

See notes to financial statements.


FINANCIAL HIGHLIGHTS		101

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	*iShares Goldman Sachs Semiconductor Index Fund*
	Year ended Jul. 31, 2004			Year ended Jul. 31, 2003			Year ended Jul. 31, 2002			Period from Jul. 10, 2001^a to Jul. 31, 2001
Net asset value, beginning of period	$	48.34		$	41.63		$	73.93		$	65.65

Income from investment operations:
Net investment loss		(0.16	)		(0.06	)		(0.07	)		(0.01	)
Net realized and unrealized gain (loss)		2.46			6.77			(32.23	)		8.29

Total from investment operations		2.30			6.71			(32.30	)		8.28

Less distributions from:
Return of capital		(0.00	)^f		—			—			—

Total distributions		(0.00	)^f		—			—			—

Net asset value, end of period	$	50.64		$	48.34		$	41.63		$	73.93

Total return		4.76	%		16.12	%		(43.69	)%		12.61	%^b

Ratios/Supplemental data:
Net assets, end of period (000s)	$	124,066		$	101,516		$	64,522		$	33,268
Ratio of expenses to average net assets^c		0.50	%		0.50	%		0.50	%		0.50	%
Ratio of net investment loss to average net assets^c		(0.20	)%		(0.20	)%		(0.29	)%		(0.38	)%
Portfolio turnover rate^d		6	%		11	%		8	%		0	%^e

^a	Commencement of operations.

^b	Not annualized.

^c	Annualized for periods of less than one year.

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

^e	Rounds to less than 1%.

^f	Rounds to less than $0.01.

See notes to financial statements.


102		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	*iShares Goldman Sachs Software Index Fund*
	Year ended Jul. 31, 2004			Year ended Jul. 31, 2003			Year ended Jul. 31, 2002			Period from Jul. 10, 2001^a to Jul. 31, 2001
Net asset value, beginning of period	$	31.56		$	23.61		$	48.28		$	49.12

Income from investment operations:
Net investment loss		(0.15	)		(0.06	)		(0.07	)		(0.01	)
Net realized and unrealized gain (loss)		2.44			8.01			(24.60	)		(0.83	)

Total from investment operations		2.29			7.95			(24.67	)		(0.84	)

Net asset value, end of period	$	33.85		$	31.56		$	23.61		$	48.28

Total return		7.26	%		33.67	%		(51.10	)%		(1.71	)%^b

Ratios/Supplemental data:
Net assets, end of period (000s)	$	115,077		$	115,197		$	37,769		$	26,556
Ratio of expenses to average net assets^c		0.50	%		0.50	%		0.50	%		0.50	%
Ratio of net investment loss to average net assets^c		(0.40	)%		(0.43	)%		(0.42	)%		(0.50	)%
Portfolio turnover rate^d		11	%		9	%		14	%		0	%^e

^a	Commencement of operations.

^b	Not annualized.

^c	Annualized for periods of less than one year.

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

^e	Rounds to less than 1%.

See notes to financial statements.


FINANCIAL HIGHLIGHTS		103

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	*iShares Goldman Sachs Natural* *Resources Index Fund*
	Year ended Jul. 31, 2004			Year ended Jul. 31, 2003			Period from Oct. 22, 2001^a to Jul. 31, 2002
Net asset value, beginning of period	$	87.03		$	83.27		$	94.92

Income from investment operations:
Net investment income		1.34			1.51			1.10
Net realized and unrealized gain (loss)		30.08			3.66			(11.69	)

Total from investment operations		31.42			5.17			(10.59	)

Less distributions from:
Net investment income		(1.44	)		(1.41	)		(1.06	)

Total distributions		(1.44	)		(1.41	)		(1.06	)

Net asset value, end of period	$	117.01		$	87.03		$	83.27

Total return		36.34	%		6.27	%		(11.29	)%^b

Ratios/Supplemental data:
Net assets, end of period (000s)	$	263,270		$	52,219		$	20,817
Ratio of expenses to average net assets^c		0.50	%		0.50	%		0.50	%
Ratio of net investment income to average net assets^c		1.33	%		1.92	%		1.51	%
Portfolio turnover rate^d		7	%		7	%		12	%

^a	Commencement of operations.

^b	Not annualized.

^c	Annualized for periods of less than one year.

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

See notes to financial statements.


104		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	*iShares MSCI EAFE Index Fund*
	Year ended Jul. 31, 2004			Year ended Jul. 31, 2003			Period from Aug. 14, 2001^a to Jul. 31, 2002
Net asset value, beginning of period	$	110.65		$	106.24		$	127.63

Income from investment operations:
Net investment income		1.94			2.58			0.93
Net realized and unrealized gain (loss)		25.44			3.71			(22.07	)

Total from investment operations		27.38			6.29			(21.14	)

Less distributions from:
Net investment income		(1.57	)		(1.88	)		(0.25	)

Total distributions		(1.57	)		(1.88	)		(0.25	)

Net asset value, end of period	$	136.46		$	110.65		$	106.24

Total return		24.81	%		6.17	%		(16.57	)%^b

Ratios/Supplemental data:
Net assets, end of period (000s)	$	8,733,741		$	3,009,772		$	3,803,438
Ratio of expenses to average net assets^c		0.35	%		0.35	%		0.35	%
Ratio of net investment income to average net assets^c		2.34	%		2.31	%		1.87	%
Portfolio turnover rate^d		7	%		8	%		8	%

^a	Commencement of operations.

^b	Not annualized.

^c	Annualized for periods of less than one year.

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

See notes to financial statements.


FINANCIAL HIGHLIGHTS		105

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	*iShares NYSE*
	Composite Index Fund			*100* *Index Fund*
	Period from Mar. 30, 2004^a to Jul. 31, 2004			Period from Mar. 29, 2004^a to Jul. 31, 2004
Net asset value, beginning of period	$	60.34		$	60.80

Income from investment operations:
Net investment income		0.34			0.33
Net realized and unrealized loss		(1.60	)		(1.13	)

Total from investment operations		(1.26	)		(0.80	)

Less distributions from:
Net investment income		(0.26	)		(0.20	)

Total distributions		(0.26	)		(0.20	)

Net asset value, end of period	$	58.82		$	59.80

Total return		(2.10	)%^b		(1.32	)%^b

Ratios/Supplemental data:
Net assets, end of period (000s)	$	14,705		$	32,888
Ratio of expenses to average net assets^c		0.25	%		0.20	%
Ratio of net investment income to average net assets^c		1.98	%		1.89	%
Portfolio turnover rate^d		1	%		3	%

^a	Commencement of operations.

^b	Not annualized.

^c	Annualized for periods of less than one year.

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

See notes to financial statements.


106		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements

iSHARES^® TRUST

I. 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 July 31, 2004, the Trust offered 72 investment portfolios or funds.

These financial statements relate only to the iShares Goldman Sachs Technology, iShares Goldman Sachs Networking, iShares Goldman Sachs Semiconductor, iShares Goldman Sachs Software, iShares Goldman Sachs Natural Resources, iShares MSCI EAFE, iShares NYSE Composite and the iShares NYSE 100 Index Funds (each a “Fund”, collectively the “Funds”). The iShares NYSE Composite and iShares NYSE 100 Index Funds commenced operations on March 30, 2004 and March 29, 2004, respectively.

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 adviser 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 NYSE Composite and NYSE 100 Index Funds, which are classified as diversified funds. 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.

The iShares MSCI EAFE Index Fund invests in the securities of non-U.S. issuers that may trade in non-U.S. markets. This may involve certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: generally less liquid and less efficient securities markets; generally greater price volatility; exchange rate fluctuations and exchange controls; imposition of restrictions on the expatriation of funds or other assets of the Fund; less publicly available information about issuers; the imposition of withholding or other taxes; higher transaction and custody costs; settlement delays and risk of loss attendant in settlement procedures; difficulties in enforcing contractual obligations; lesser regulation of securities markets; different accounting, disclosure and reporting requirements; more substantial governmental involvement in the economy; higher inflation rates; greater social, economic and political uncertainties; the risk of nationalization or expropriation of assets; and the risk of war.

Under the 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 that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

SECURITY VALUATION

The securities of each Fund for which the primary market is a national securities or commodities exchange or a recognized foreign securities exchange or commodities exchange will be valued at last sale prices on the principal exchange on which they are traded, or in the absence of any sale on the valuation date, at latest quoted bid prices. 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 or, in the absence of any sale on the valuation date, at latest quoted bid prices, which will be obtained from a reputable independent pricing service. U.S. Government securities and all other securities for which current over-the-counter market quotations are readily available will be valued at latest quoted bid


NOTES TO THE FINANCIAL STATEMENTS		107

Notes to the Financial Statements (Continued)

iSHARES^® TRUST

prices, which will be obtained from one or more reputable independent pricing services. If quoted prices are unavailable or inaccurate, market values will be determined based on quotes obtained from brokers, dealers and/or based on averages of prices obtained from reputable independent pricing services. Short-term investments and debt securities maturing in 60 days or less will be valued at amortized cost. Securities of investment companies, other than investment companies whose shares are traded on an exchange, will be valued at the fund’s published net asset value per share. 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.

FOREIGN CURRENCY TRANSLATION

The accounting records of the iShares MSCI EAFE Index Fund are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in foreign currencies generally are translated into U.S. dollars at the prevailing rates of exchange at the end of each U.S. business day. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars at the prevailing exchange rate on the respective dates of such transactions.

The iShares MSCI EAFE Index Fund does not isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of securities. Such fluctuations are reflected by the Fund as a component of realized and unrealized gains and losses from investments for financial reporting purposes.

DISTRIBUTIONS TO SHAREHOLDERS

Distributions to shareholders from net investment income, if any, are declared and distributed at least annually by each Fund. Distributions of net realized capital gains, if any, generally are declared and distributed once a year. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes.

At July 31, 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)			Long-Term Capital and Other Losses			Total Distributable Earnings (Accumulated Losses)
Goldman Sachs Technology	$	—	$	(7,834,266	)	$	(4,840,049	)	$	(12,674,315	)
Goldman Sachs Networking		—		(25,684,363	)		(9,763,023	)		(35,447,386	)
Goldman Sachs Semiconductor		—		(30,114,575	)		(1,158,410	)		(31,272,985	)
Goldman Sachs Software		—		(13,318,968	)		(2,534,910	)		(15,853,878	)
Goldman Sachs Natural Resources		46,585		36,086,462			(558,887	)		35,574,160
MSCI EAFE		124,316,845		443,752,855			(72,995,269	)		495,074,431
NYSE Composite		21,596		(168,679	)		—			(147,083	)
NYSE 100		72,084		(374,855	)		(29,147	)		(331,918	)


108		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Continued)

iSHARES^® TRUST

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.

For the years ended July 31, 2004 and July 31, 2003, the tax characterization of distributions paid for each Fund was equal to the book characterization of distributions paid. The total distributions and distributions per share are disclosed in the accompanying Statements of Changes in Net Assets and the Financial Highlights for all the Funds.

FEDERAL INCOME TAXES

Each Fund is treated as a separate entity for federal income tax purposes. It is the policy of each Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its net income and any net gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes was required for the year ended July 31, 2004.

From November 1, 2003 to July 31, 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 July 31, 2005, as follows:


	Deferred Net Realized Capital Losses
Goldman Sachs Technology	$	97,770
Goldman Sachs Networking		591,990
Goldman Sachs Software		129,968

The Funds had tax basis net capital loss carryforwards at July 31, 2004, the tax year-end of the Funds, as follows:


*iShares Index Fund*	Expiring 2010		*Expiring* *2011*		*Expiring* *2012*		*Total*
Goldman Sachs Technology	$	638,692	$	1,579,887	$	2,523,700	$	4,742,279
Goldman Sachs Networking		130,370		5,798,354		3,242,309		9,171,033
Goldman Sachs Semiconductor		175,882		472,453		510,075		1,158,410
Goldman Sachs Software		177,253		1,465,904		761,567		2,404,724
Goldman Sachs Natural Resources		—		371,436		187,451		558,887
MSCI EAFE		55,269		37,219,384		35,720,616		72,995,269
NYSE 100		—		—		29,148		29,148

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.

The iShares MSCI EAFE Index Fund may own shares in certain foreign investment entities, referred to, under U.S. tax law code, as “passive foreign investment companies”. The iShares MSCI EAFE Index Fund may elect to mark-to-market annually the shares of each passive foreign investment company, and would be required to distribute to shareholders any such mark-to-market gains.


NOTES TO THE FINANCIAL STATEMENTS		109

Notes to the Financial Statements (Continued)

iSHARES^® TRUST

For the year ended July 31, 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 July 31, 2004 are disclosed in the Funds’ Statements of Operations.

At July 31, 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)
Goldman Sachs Technology	$	207,069,361	$	9,337,736	$	(17,172,002	)	$	(7,834,266	)
Goldman Sachs Networking		192,423,055		3,373,917		(29,058,280	)		(25,684,363	)
Goldman Sachs Semiconductor		168,599,093		2,470,262		(32,584,837	)		(30,114,575	)
Goldman Sachs Software		140,148,175		3,117,218		(16,436,186	)		(13,318,968	)
Goldman Sachs Natural Resources		247,484,433		37,299,902		(1,213,440	)		36,086,462
MSCI EAFE		10,156,082,846		672,126,465		(228,373,610	)		443,752,855
NYSE Composite		16,278,143		465,591		(634,270	)		(168,679	)
NYSE 100		33,913,856		946,643		(1,321,498	)		(374,855	)

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 Funds, 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. At July 31, 2004 a portion of the Funds’ cash collateral for securities on loan was invested in repurchase agreements as disclosed in the Funds’ Schedules of Investments. For further information, see Note 5, below.

2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES

Pursuant to an Investment Advisory Agreement with the Trust, Barclays Global Fund Advisors (“BGFA”) manages the investment of each Fund’s assets. BGFA is a California corporation indirectly owned by Barclays Bank PLC. Under the Investment Advisory Agreement, BGFA is responsible for all expenses (“Covered Expenses”) of the Trust, including the cost of transfer agency, custody, fund administration, legal, audit and other services, except interest, taxes, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution fees and extraordinary expenses. Expenses related to the organization and initial registration of the Trust were borne by BGFA.


110		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Continued)

iSHARES^® TRUST

For its investment advisory services to each Fund, BGFA is entitled to an annual investment advisory fee based on the average daily net assets of each Fund as follows:


*iShares Index Fund*	Investment Advisory Fee
Goldman Sachs Technology	0.50	%
Goldman Sachs Networking	0.50
Goldman Sachs Semiconductor	0.50
Goldman Sachs Software	0.50
Goldman Sachs Natural Resources	0.50	%
MSCI EAFE	0.35
NYSE Composite	0.25
NYSE 100	0.20

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 adviser. 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 July 31, 2004, BGI earned securities lending agent fees as follows:


*iShares Index Fund*	Securities Lending Agent Fees
Goldman Sachs Technology	$	14,419
Goldman Sachs Networking		27,327
Goldman Sachs Semiconductor		22,962
Goldman Sachs Software		15,554
Goldman Sachs Natural Resources		22,342
MSCI EAFE		3,998,489
NYSE Composite		609
NYSE 100		587

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 July 31, 2004, BGIS did not receive any brokerage commissions from the Funds.

As defined in 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 on 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 or on behalf of such Fund during the year ended July 31, 2004.

Pursuant to Rule 17a-7 under the 1940 Act, certain Funds executed cross trades for the year ended July 31, 2004. Cross trading is the buying or selling of portfolio securities between funds to which BGFA (or an affiliate) serves as investment adviser. 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 in 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.


NOTES TO THE FINANCIAL STATEMENTS		111

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 adviser. 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 investment advisory fee, the Master Portfolios in which they invest do charge an investment 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.

The following table provides information about the investment of each iShares Fund in shares of issuers affiliated with BGFA for the year ended July 31, 2004, including income earned from affiliated issuers and net realized gains from sales of affiliated issuers.


*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*		*Dividend* *and* Interest Income		Net Realized Gain
Goldman Sachs Technology
IMMF	39	7,587	7,536	90	$	90,285	$	493	$	—
Goldman Sachs Networking
IMMF	42	11,728	11,702	68		67,765		644		—
Goldman Sachs Semiconductor
IMMF	97	6,958	6,979	76		75,892		507		—
Goldman Sachs Software
IMMF	19	6,338	6,288	69		69,265		390		—
Goldman Sachs Natural Resources
IMMF	19	10,137	9,999	157		156,813		821		—
MSCI EAFE
IMMF	1,188	399,736	396,842	4,082		4,082,479		26,603		—
Barclays PLC	3,347	4,527	369	7,505		62,775,639		2,017,156		403,110
NYSE Composite
IMMF	—	136	131	5		4,910		38		—
Barclays PLC	—	2	—	2		57,325		—		—
NYSE 100
IMMF	—	270	236	34		34,185		67		—

The Funds invested cash collateral from securities on loan in the IMMF and PMMF. Due to the nature of the structure of the joint account used for the investment of the collateral for securities on loan, the information reported above for each Fund does not include the Funds’ holdings of the IMMF and PMMF in connection with the investment of collateral for securities on loan.

As of July 31, 2004, certain trustees and officers of the Trust are also officers of BGI.


112		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

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 July 31, 2004, were as follows:


*iShares Index Fund*	*Purchases*		*Sales*
Goldman Sachs Technology	$	7,864,957	$	8,113,946
Goldman Sachs Networking		14,755,974		15,086,982
Goldman Sachs Semiconductor		10,234,834		10,840,457
Goldman Sachs Software		14,511,608		15,048,645
Goldman Sachs Natural Resources		10,923,199		10,878,706
MSCI EAFE		547,794,491		403,320,448
NYSE Composite		106,634		83,597
NYSE 100		855,281		787,087

In-kind transactions (see Note 4) for the year ended July 31, 2004, were as follows:


*iShares Index Fund*	*In-kind* *Purchases*		*In-kind* *Sales*
Goldman Sachs Technology	$	96,467,792	$	17,809,915
Goldman Sachs Networking		158,694,969		98,408,462
Goldman Sachs Semiconductor		189,214,357		170,012,422
Goldman Sachs Software		152,852,310		170,466,176
Goldman Sachs Natural Resources		174,455,882		—
MSCI EAFE		4,993,014,091		131,659,499
NYSE Composite		14,836,363		—
NYSE 100		33,187,882		—

4. CAPITAL SHARE TRANSACTIONS

At July 31, 2004, there were an unlimited number of no par value capital shares of beneficial interest authorized by the Trust. 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.


NOTES TO THE FINANCIAL STATEMENTS		113

Notes to the Financial Statements (Continued)

iSHARES^® TRUST

5. LOANS OF PORTFOLIO SECURITIES

Each Fund may lend its investment securities to approved borrowers such as brokers, dealers, and other financial institutions. The borrower pledges and maintains with the Fund collateral, 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 traded on U.S. exchanges 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 may not return the securities when due.

As of July 31, 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 July 31, 2004 and the value of the related collateral are disclosed in the Statements of Assets and Liabilities. Securities lending income, which is disclosed in the Funds’ Statements of Operations, is presented net of rebates paid to, or fees paid by, borrowers.


114		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 Goldman Sachs Series Funds, the iShares MSCI EAFE Index Fund and the iShares NYSE Series Funds (the “Funds”), as listed on the table of contents, at July 31, 2004, the results of each of their operations for the period then ended, and the changes in each of their net assets and their 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). Those standards 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 July 31, 2004 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

September 17, 2004


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		115

Tax Information (Unaudited)

iSHARES^® TRUST

For the year ended July 31, 2004, the iShares MSCI EAFE Index Fund earned foreign source income of $161,975,135 and paid foreign taxes of $6,085,235 which it intends to pass through to its shareholders pursuant to Section 853 of the Internal Revenue Code.

For corporate shareholders, 88.23% of the income dividends paid by the iShares Goldman Sachs Natural Resources Index Fund, 62.86% of the income dividends paid by the iShares NYSE Composite Index Fund and 100% of the income dividends paid by the iShares NYSE 100 Index Fund during the year ended July 31, 2004 qualified for the dividends-received deduction.

Under Section 854(b)(2) of the Internal Revenue Code (the “Code”), the following Funds hereby designate the following maximum amounts as qualifed dividends for purposes of the maximum rate under Section 1(h)(11) of the Code for the year ended July 31, 2004:


*iShares Index Fund*	*Qualified* *Dividend* *Income*
Goldman Sachs Natural Resources	$	1,953,259
MSCI EAFE		71,376,085
NYSE Composite		85,071
NYSE 100		183,168

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 advisers for information on the treatment of these amounts on their individual income tax returns.


116		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

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. Except as noted in the following tables, the information shown for each Fund is for each full calendar quarter completed after the inception date of such Fund through June 30, 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 Goldman Sachs Technology Index Fund

Period Covered: April 1, 2001 through June 30, 2004


*Premium/Discount Range*	*Number* *of Days*	*Percentage of* *Total Days*
Greater than 1.0%	3	0.37	%
Greater than 0.5% and Less than 1.0%	18	2.22
Between 0.5% and – 0.5%	756	93.34
Less than – 0.5% and Greater than – 1.0%	23	2.84
Less than – 1.0% and Greater than – 1.5%	7	0.86
Less than – 1.5%	3	0.37

	810	100.00	%


SUPPLEMENTAL INFORMATION		117

Supplemental Information (Unaudited) (Continued)

iSHARES^® TRUST

iShares Goldman Sachs Networking Index Fund

Period Covered: October 1, 2001 through June 30, 2004


*Premium/Discount Range*	*Number* *of Days*	*Percentage of* *Total Days*
Greater than 1.0%	4	0.58	%
Greater than 0.5% and Less than 1.0%	42	6.11
Between 0.5% and – 0.5%	584	85.02
Less than – 0.5% and Greater than – 1.0%	44	6.40
Less than – 1.0% and Greater than – 1.5%	7	1.02
Less than – 1.5%	6	0.87

	687	100.00	%

iShares Goldman Sachs Semiconductor Index Fund

Period Covered: October 1, 2001 through June 30, 2004


*Premium/Discount Range*	*Number* *of Days*	*Percentage of* *Total Days*
Greater than 1.0%	3	0.44	%
Greater than 0.5% and Less than 1.0%	18	2.62
Between 0.5% and – 0.5%	633	92.14
Less than – 0.5% and Greater than – 1.0%	26	3.78
Less than – 1.0% and Greater than – 1.5%	4	0.58
Less than – 1.5%	3	0.44

	687	100.00	%

iShares Goldman Sachs Software Index Fund

Period Covered: October 1, 2001 through June 30, 2004


*Premium/Discount Range*	*Number* *of Days*	*Percentage of* *Total Days*
Greater than 1.0%	3	0.44	%
Greater than 0.5% and Less than 1.0%	17	2.47
Between 0.5% and – 0.5%	643	93.60
Less than – 0.5% and Greater than – 1.0%	20	2.91
Less than – 1.0%	4	0.58

	687	100.00	%


118		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited) (Continued)

iSHARES^® TRUST

iShares Goldman Sachs Natural Resources Index Fund

Period Covered: January 1, 2002 through June 30, 2004


*Premium/Discount Range*	Number of Days	Percentage of Total Days
Between 0.5% and – 0.5%	616	98.89	%
Less than – 0.5% and Greater than – 1.0%	5	0.79
Less than – 1.0%	2	0.32

	623	100.00	%

iShares MSCI EAFE Index Fund

Period Covered: October 1, 2001 through June 30, 2004


*Premium/Discount Range*	Number of Days	Percentage of Total Days
Greater than 2.0%	5	0.73	%
Greater than 1.5% and Less than 2.0%	11	1.60
Greater than 1.0% and Less than 1.5%	74	10.77
Greater than 0.5% and Less than 1.0%	189	27.51
Between 0.5% and – 0.5%	353	51.39
Less than – 0.5% and Greater than – 1.0%	40	5.82
Less than – 1.0% and Greater than – 1.5%	13	1.89
Less than – 1.5%	2	0.29

	687	100.00	%

iShares NYSE Composite Index Fund

Period Covered: April 2, 2004 through June 30, 2004*


*Premium/Discount Range*	Number of Days	Percentage of Total Days
Greater than 0.5%	1	1.64	%
Between 0.5% and – 0.5%	59	96.72
Less than – 0.5%	1	1.64

	61	100.00	%

*	April 2, 2004 is the first day of trading on the stock exchange on which the shares of the Fund are listed for trading.


SUPPLEMENTAL INFORMATION		119

Supplemental Information (Unaudited) (Continued)

iSHARES^® TRUST

iShares NYSE 100 Index Fund

Period Covered: April 2, 2004 through June 30, 2004*


*Premium/Discount Range*	Number of Days	Percentage of Total Days
Greater than 0.5%	2	3.28	%
Between 0.5% and – 0.5%	58	95.08
Less than – 0.5%	1	1.64

	61	100.00	%

*	April 2, 2004 is the first day of trading on the stock exchange on which the shares of the Fund are listed for trading.


120		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 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 121 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 adviser, and BGI, the parent company of BGFA. John E. Martinez is also deemed to be an “interested person” because of his affiliation with Barclays Global Investors Services, an affiliate of BGFA and BGI.


TRUSTEE INFORMATION		121

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.; Director (since 2003) of the BGI Cayman Prime Money Market Fund, Ltd.; 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) of 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.


122		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		123

Notes:


124		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes:


NOTES		125

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

iShares S&P 1500 (ISI)

iShares S&P 500 (IVV)

iShares S&P 500/BARRA Growth (IVW)

iShares S&P 500/BARRA Value (IVE)

iShares S&P MidCap 400 (IJH)

iShares S&P MidCap 400/BARRA Growth (IJK)

iShares S&P MidCap 400/BARRA Value (IJJ)

iShares S&P SmallCap 600 (IJR)

iShares S&P SmallCap 600/BARRA Growth (IJT)

iShares S&P SmallCap 600/BARRA Value (IJS)

iShares S&P 100 (OEF)

iShares Sector and Specialty Index Funds

iShares Cohen & Steers Realty Majors (ICF)

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

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

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

iShares Dow Jones U.S. Energy Sector (IYE)

iShares Dow Jones U.S. Financial Sector (IYF)

iShares Dow Jones U.S. Financial Services (IYG)

iShares Dow Jones U.S. Healthcare Sector (IYH)

iShares Dow Jones U.S. Industrial Sector (IYJ)

iShares Dow Jones U.S. Real Estate (IYR)

iShares Dow Jones Select Dividend (DVY)

iShares Dow Jones U.S. Technology Sector (IYW)

iShares Dow Jones U.S. Telecommunications Sector (IYZ)

iShares Dow Jones U.S. Total Market (IYY)

iShares Dow Jones Transportation Average (IYT)

iShares Dow Jones U.S. Utilities Sector (IDU)

iShares Goldman Sachs Natural Resources (IGE)

iShares Goldman Sachs Networking (IGN)

iShares Goldman Sachs Semiconductor (IGW)

iShares Goldman Sachs Software (IGV)

iShares Goldman Sachs Technology (IGM)

iShares Nasdaq Biotechnology (IBB)

iShares S&P Global Energy Sector (IXC)

iShares S&P Global Financials Sector (IXG)

iShares S&P Global Healthcare Sector (IXJ)

iShares S&P Global Technology Sector (IXN)

iShares S&P Global Telecommunications Sector (IXP)

iShares Russell Index Funds

iShares Russell 3000 (IWV)

iShares Russell 3000 Growth (IWZ)

iShares Russell 3000 Value (IWW)

iShares Russell 1000 (IWB)

iShares Russell 1000 Growth (IWF)

iShares Russell 1000 Value (IWD)

iShares Russell Midcap (IWR)

iShares Russell Midcap Growth (IWP)

iShares Russell Midcap Value (IWS)

iShares Russell 2000 (IWM)

iShares Russell 2000 Growth (IWO)

iShares Russell 2000 Value (IWN)

iShares International Index Funds

iShares MSCI Australia (EWA)

iShares MSCI Austria (EWO)

iShares MSCI Belgium (EWK)

iShares MSCI Brazil (EWZ)

iShares MSCI Canada (EWC)

iShares MSCI EAFE (EFA)

iShares MSCI Emerging Markets (EEM)

iShares MSCI EMU (EZU)

iShares MSCI France (EWQ)

iShares MSCI Germany (EWG)

iShares MSCI Hong Kong (EWH)

iShares MSCI Italy (EWI)

iShares MSCI Japan (EWJ)

iShares MSCI Malaysia (EWM)

iShares MSCI Mexico (EWW)

iShares MSCI Netherlands (EWN)

iShares MSCI Pacific ex-Japan (EPP)

iShares MSCI Singapore (EWS)

iShares MSCI South Africa (EZA)

iShares MSCI South Korea (EWY)

iShares MSCI Spain (EWP)

iShares MSCI Sweden (EWD)

iShares MSCI Switzerland (EWL)

iShares MSCI Taiwan (EWT)

iShares MSCI United Kingdom (EWU)

iShares S&P Europe 350 (IEV)

iShares S&P Global 100 (IOO)

iShares S&P Latin America 40 (ILF)

iShares S&P/TOPIX 150 (ITF)

iShares Bond Funds

iShares Lehman Aggregate (AGG)

iShares Lehman TIPS (TIP)

iShares Lehman 1-3 Year Treasury (SHY)

iShares Lehman 7-10 Year Treasury (IEF)

iShares Lehman 20+ Year Treasury (TLT)

iShares GS $ InvesTop^TM Corporate (LQD)

iShares NYSE Index Funds

iShares NYSE 100 (NY)

iShares NYSE Composite (NYC)

iShares Morningstar Index Funds

iShares Morningstar Large Core (JKD)

iShares Morningstar Large Growth (JKE)

iShares Morningstar Large Value (JKF)

iShares Morningstar Mid Core (JKG)

iShares Morningstar Mid Growth (JKH)

iShares Morningstar Mid Value (JKI)

iShares Morningstar Small Core (JKJ)

iShares Morningstar Small Growth (JKK)

iShares Morningstar Small Value (JKL)

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^TM” 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.


126		2004 iSHARES ANNUAL REPORT TO SHAREHOLDERS

The iShares Funds are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors (BGFA) serves as an adviser 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, or issued by Goldman, Sachs & Co., nor are they sponsored, endorsed, issued, sold or promoted by Morgan Stanley Capital International Inc., or New York Stock Exchange, Inc., nor do these companies make any representation regarding the availability of investing in the iShares Funds.

^© 2004 Barclays Global Investors. Al 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.

Investing involves risk, including possible loss of principal.

A description of the policies that the Funds use to determine how to vote proxies relating to portfolio securities and information about how the Funds voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, 2004 is available without change, upon request, by calling toll-free 1-800-474-2737; on the Fund’s website at www.iShares.com; and on the Securities and Exchange Commission’s web-site at www.sec.gov.

Beginning December 30, 2004, the Funds will be filing their complete schedules of portfolio holdings with the Securities and Exchange Commission for the first and third quarter of each fiscal year on Form N-Q, which when filed, will be available on the Commission’s web-site at www.sec.gov. When filed, the Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Funds also disclose their complete schedules of portfolio holdings on a daily and monthly basis on the Funds’ website at www.iShares.com.

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.


BARCLAYS GLOBAL INVESTORS		BARCLAYS

Item 2.

Code of Ethics.

As of July 31, 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 July 31, 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 eight series of the Registrant for which the fiscal year-end is July 31, 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 $54,000 and $77,000 for the fiscal years ended July 31, 2003 and July 31, 2004, respectively.

(b)

Audit-Related Fees – There were no fees billed for the fiscal years ended July 31, 2003 and July 31, 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 $32,400 and $43,200 for the fiscal years ended July 31, 2003 and July 31, 2004, respectively.

(d)

All Other Fees – There were no other fees billed for the fiscal years ended July 31, 2003 and July 31, 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 July 31, 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 July 31, 2003 and July 31, 2004 were $1,120,831 and $483,216 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.

The Registrant is a listed issuer as defined in Rule 10A-3 under the Exchange Act and has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Registrant’s audit committee members are John B. Carroll, Richard K. Lyons, George C. Parker and W. Allen Reed.

Item 6.

Schedule of Investments.

The Funds’ full schedules of investments are included as part of the report to shareholders filed under Item 1 of this Form.

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.

There are no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees.

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) There was no change in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the Registrant’s second fiscal half-year that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

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: September 30, 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: September 30, 2004



By:		/s/ Michael A. Latham
		Michael A. Latham, Principal Financial Officer

Date: September 30, 2004