UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSRS

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-09729

iShares Trust

(Exact name of registrant as specified in charter)

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: April 30, 2005

Date of reporting period: October 31, 2004

Item 1. Reports to Stockholders.

A copy of the semi-annual report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940 is attached.

2004 SEMI-ANNUAL REPORT TO SHAREHOLDERS  |  OCTOBER 31, 2004

iSHARES DOW JONES SERIES

Electronic delivery of this document may be

available to you. See inside for details.

iSHARES DOW JONES U.S. TOTAL MARKET INDEX FUND

iSHARES DOW JONES U.S. ENERGY SECTOR INDEX FUND

iSHARES DOW JONES U.S. HEALTHCARE SECTOR INDEX FUND

iSHARES DOW JONES U.S. TECHNOLOGY SECTOR INDEX FUND

iSHARES DOW JONES U.S. TELECOMMUNICATIONS SECTOR INDEX FUND

iSHARES DOW JONES U.S. UTILITIES SECTOR INDEX FUND

iSHARES DOW JONES SELECT DIVIDEND INDEX FUND

iSHARES DOW JONES TRANSPORTATION AVERAGE INDEX FUND

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Table of Contents

Management’s Discussion of Fund Performance	1
Shareholder Expenses	9
Schedules of Investments	11
iShares Dow Jones U.S. Total Market Index Fund	11
iShares Dow Jones U.S. Energy Sector Index Fund	36
iShares Dow Jones U.S. Healthcare Sector Index Fund	40
iShares Dow Jones U.S. Technology Sector Index Fund	46
iShares Dow Jones U.S. Telecommunications Sector Index Fund	53
iShares Dow Jones U.S. Utilities Sector Index Fund	57
iShares Dow Jones Select Dividend Index Fund	61
iShares Dow Jones Transportation Average Index Fund	63
Financial Statements	64
Financial Highlights	71
Notes to the Financial Statements	78
iShares Family of Funds	86

Management’s Discussion of Fund Performance

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

Performance as of 10/31/04

Average Annual Total Returns						Cumulative Total Returns
Year Ended 10/31/04			Inception to 10/31/04			Inception to 10/31/04
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
9.56%	9.49%	9.79%	(3.75)%	(3.76)%	(3.57)%	(15.44)%	(15.50)%	(14.70)%

Total returns for the periods since inception are calculated from the inception date of the Fund (6/12/00). “Average annual total returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative total returns” represent the total change in value of an investment over the periods indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the 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 shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (6/16/00), the NAV of the Fund is used as a proxy for the 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.

The iShares Dow Jones U.S. Total Market Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Total Market Index (the “Index”). The Index measures the performance of the U.S. equity broad market. The Fund invests in a representative sample of securities in the Index that have a similar investment profile as the entire Index. For the six-month period ended October 31, 2004 (the “reporting period”), the Fund returned 3.19%, while the Index returned 3.30%.

Broad equity markets, as measured by the Index, generally posted modest gains for the reporting period. On the economic front, data continued to provide positive, but somewhat inconsistent, signs of recovery. Annual gross domestic product (“GDP”) grew 3.0% during the second quarter of 2004, lagging many economists’ expectations. The annual GDP growth rate for the third quarter of 2004 was a more encouraging 3.7%, but still fell short of forecasts as increased consumer spending was offset by slower paces for both inventory building and exports. Oil prices soared during the reporting period, reaching $55 per barrel in late October. The Federal Reserve Board raised short-term interest rates three times during the reporting period, overall from 1.00% to 1.75%.

Although the Index’s overall performance was moderate, the performances of underlying sectors within the Index were more divided. In general, utilities and energy-related companies benefited largely from higher oil and gas prices, and increased economic activity tended to help the industrials and materials sectors. The healthcare and consumer staples sectors, on the other hand, did not perform as well for the reporting period. Both of these sectors are less sensitive to economic conditions, so they generally underperform more cyclically sensitive stocks in a recovering economic environment.

Accordingly, performance for the reporting period was mixed among the Fund’s ten largest holdings as of October 31, 2004. Diversified oil company Exxon Mobil Corp. was the top performer among the ten largest holdings in the Fund. General Electric Co., the Fund’s largest holding as of October 31, 2004, also performed well. Bank of America Corp. and healthcare company Johnson & Johnson both posted gains. On the negative side, pharmaceutical giant Pfizer Inc. declined for the reporting period, as did Citigroup Inc. and discount retailing company Wal-Mart Stores Inc.

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE 1

Management’s Discussion of Fund Performance

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

Performance as of 10/31/04

Average Annual Total Returns						Cumulative Total Returns
Year Ended 10/31/04			Inception to 10/31/04			Inception to 10/31/04
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
45.42%	45.29%	44.53%	6.20%	6.18%	6.54%	30.20%	30.12%	31.99%

Total returns for the periods since inception are calculated from the inception date of the Fund (6/12/00). “Average annual total returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative total returns” represent the total change in value of an investment over the periods indicated.

Certain sectors and markets performed exceptionally well based on market conditions during the one-year period. Investors should not expect that such exceptional returns will be repeated.

The Fund’s per share net asset value or “NAV” is the value of one share of the 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 shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (6/16/00), the NAV of the Fund is used as a proxy for the 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.

The iShares Dow Jones U.S. Energy Sector Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Energy Sector Index (the “Index”). The Index measures the performance of the energy sector of the U.S. equity market and includes companies in the oil drilling (equipment and services), oil companies (major and secondary), coal and pipelines industry sub-groups. The Fund invests in a representative sample of securities in the Index that have a similar investment profile as the entire Index. For the six-month period ended October 31, 2004 (the “reporting period”), the Fund returned 17.76%, while the Index returned 17.92%.

Broad equity markets, as measured by the Dow Jones U.S. Total Market Index, generally posted modest gains for the reporting period. On the economic front, data continued to provide positive, but somewhat inconsistent, signs of recovery. Annual gross domestic product (“GDP”) grew 3.0% during the second quarter of 2004, lagging many economists’ expectations. The annual GDP growth rate for the third quarter of 2004 was a more encouraging 3.7%, but still fell short of forecasts as increased consumer spending was offset by slower paces for both inventory building and exports. Oil prices soared during the reporting period, reaching $55 per barrel in late October. The Federal Reserve Board raised short-term interest rates three times during the reporting period, overall from 1.00% to 1.75%.

For energy-related stocks, the largest factor driving performance was the upswing in oil prices. The reporting period began with oil prices at around $38 per barrel, and increased to $55 in late October, which represented a jump of approximately 50% in only six months. The higher prices helped fuel revenues for virtually all types of companies held by the Fund, particularly service and exploration companies.

All of the Fund’s ten largest holdings as of October 31, 2004 posted gains for the reporting period, benefiting largely from higher oil prices. Oil service and exploration companies delivered some of the best performances, with Anadarko Petroleum Corp. and Apache Corp. both logging strong gains. Burlington Resources Inc. also performed well for the reporting period. Diversified oil company Exxon Mobil Corp., the Fund’s largest holding as of October 31, 2004, logged gains, as did ChevronTexaco Corp. and ConocoPhillips.

2 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance

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

Performance as of 10/31/04

Average Annual Total Returns						Cumulative Total Returns
Year Ended 10/31/04			Inception to 10/31/04			Inception to 10/31/04
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
3.31%	3.23%	3.95%	(1.35)%	(1.37)%	(0.74)%	(5.81)%	(5.89)%	(3.19)%

Total returns for the periods since inception are calculated from the inception date of the Fund (6/12/00). “Average annual total returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative total returns” represent the total change in value of an investment over the periods indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the 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 shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (6/16/00), the NAV of the Fund is used as a proxy for the 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.

The iShares Dow Jones U.S. Healthcare Sector Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Healthcare Sector Index (the “Index”). The Index measures the performance of the healthcare sector of the U.S. equity market and includes companies in the health care providers, biotechnology, medical supplies, advanced medical devices and pharmaceuticals industry sub-groups. The Fund invests in a representative sample of securities in the Index that have a similar investment profile as the entire Index. For the six-month period ended October 31, 2004 (the “reporting period”), the Fund declined 7.06%, while the Index declined 6.77%.

Broad equity markets, as measured by the Dow Jones U.S. Total Market Index, generally posted modest gains for the reporting period. On the economic front, data continued to provide positive, but somewhat inconsistent, signs of recovery. Annual gross domestic product (“GDP”) grew 3.0% during the second quarter of 2004, lagging many economists’ expectations. The annual GDP growth rate for the third quarter of 2004 was a more encouraging 3.7%, but still fell short of forecasts as increased consumer spending was offset by slower paces for both inventory building and exports. Oil prices soared during the reporting period, reaching $55 per barrel in late October. The Federal Reserve Board raised short-term interest rates three times during the reporting period, overall from 1.00% to 1.75%.

Although healthcare companies overall declined for the reporting period, performance was divided within the sector. In general, large pharmaceutical companies posted double-digit losses, generally due to competition by generic drug makers. Generic drug makers, biotechnology and medical technology companies, on the other hand, generally posted modest gains, continuing to benefit from renewed investor interest in growth-related stocks.

Among the Fund’s ten largest holdings as of October 31, 2004, performance was mixed for the reporting period. Pharmaceutical giants Merck & Co. Inc., Eli Lilly & Co., and Pfizer Inc. (the Fund’s largest holding as of October 31, 2004) all declined. Healthcare companies UnitedHealth Group Inc. and Johnson & Johnson, on the other hand, delivered gains. Generic drug company Wyeth also gained, as did Abbott Laboratories. Medical device company Medtronic Inc. posted a slight gain for the reporting period.

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE 3

Management’s Discussion of Fund Performance

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

Performance as of 10/31/04

Average Annual Total Returns						Cumulative Total Returns
Year Ended 10/31/04			Inception to 10/31/04			Inception to 10/31/04
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(3.60)%	(3.46)%	(3.03)%	(19.01)%	(18.99)%	(18.53)%	(60.99)%	(60.97)%	(59.90)%

Total returns for the periods since inception are calculated from the inception date of the Fund (5/15/00). “Average annual total returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative total returns” represent the total change in value of an investment over the periods indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the 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 shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (5/19/00), the NAV of the Fund is used as a proxy for the 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.

The iShares Dow Jones U.S. Technology Sector Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Technology Sector Index (the “Index”). The Index measures the performance of the technology sector of the U.S. equity market and includes companies in the diversified technology services, computer software, communications technology, office equipment, semiconductors and internet services industry sub-groups. The Fund invests in a representative sample of securities in the Index that have a similar investment profile as the entire Index. For the six-month period ended October 31, 2004 (the “reporting period”), the Fund returned 2.20%, while the Index returned 2.52%.

Broad equity markets, as measured by the Dow Jones U.S. Total Market Index, generally posted modest gains for the reporting period. On the economic front, data continued to provide positive, but somewhat inconsistent, signs of recovery. Annual gross domestic product (“GDP”) grew 3.0% during the second quarter of 2004, lagging many economists’ expectations. The annual GDP growth rate for the third quarter of 2004 was a more encouraging 3.7%, but still fell short of forecasts as increased consumer spending was offset by slower paces for both inventory building and exports. Oil prices soared during the reporting period, reaching $55 per barrel in late October. The Federal Reserve Board raised short-term interest rates three times during the reporting period, overall from 1.00% to 1.75%.

Technology stocks generally delivered lackluster performance for the reporting period. During the reporting period, businesses spent less on computers and related equipment than they had in recent reporting periods, hurting some companies in the technology sector. On the other hand, investor interest in growth-related areas such as technology appeared to increase as economic conditions improved, helping the share prices of some technology stocks.

Among the Fund’s ten largest holdings as of October 31, 2004, performance was divided. Internet services company Yahoo! Inc. led the way with strong gains for the reporting period. Wireless communications company QUALCOMM Inc. also performed well. The Fund’s top holding Microsoft Corp. and Oracle Systems Corp. both contributed positively to the Fund’s performance. On the negative side, technology giants Intel Corp. and Cisco Systems Inc. both declined. Computer peripherals manufacturer Hewlett-Packard Co. and semiconductor company Texas Instruments Inc. also posted losses for the reporting period.

4 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance

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

Performance as of 10/31/04

Average Annual Total Returns						Cumulative Total Returns
Year Ended 10/31/04			Inception to 10/31/04			Inception to 10/31/04
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
16.88%	16.50%	19.48%	(16.95)%	(16.98)%	(14.10)%	(56.21)%	(56.29)%	(49.07)%

Total returns for the periods since inception are calculated from the inception date of the Fund (5/22/00). “Average annual total returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative total returns” represent the total change in value of an investment over the periods indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the 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 shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (5/26/00), the NAV of the Fund is used as a proxy for the 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.

The iShares Dow Jones U.S. Telecommunications Sector Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Telecommunications Sector Index (the “Index”). The Index measures the performance of the telecommunications sector of the U.S. equity market and includes companies in the fixed-line communications and wireless communications industry sub-groups. The Fund invests in a representative sample of the securities in the Index that have a similar investment profile as the entire Index. For the six-month period ended October 31, 2004 (the “reporting period”), the Fund returned 7.54%, while the Index returned 6.90%.

Broad equity markets, as measured by the Dow Jones U.S. Total Market Index, generally posted modest gains for the reporting period. On the economic front, data continued to provide positive, but somewhat inconsistent, signs of recovery. Annual gross domestic product (“GDP”) grew 3.0% during the second quarter of 2004, lagging most economists’ expectations. The annual GDP growth rate for the third quarter of 2004 was a more encouraging 3.7%, but still fell short of forecasts as increased consumer spending was offset by slower paces for both inventory building and exports. Oil prices soared during the reporting period, reaching $55 per barrel in late October - a new high since the New York Mercantile Exchange began trading oil in 1983. The Federal Reserve Board raised short-term interest rates three times during the reporting period, overall from 1.00% to 1.75%.

The telecommunications sector generally benefited from the improving economic environment. Many wireless telecommunications companies that had suffered from overcapacity issues in recent years benefited from renewed demand during the reporting period. A renewed interest in investment activity also helped the sector, as investors generally appeared more willing to return to more growth-oriented securities.

Regulatory restraints, such as those imposed by the Securities and Exchange Commission and the Internal Revenue Service, can restrict the Fund’s ability to hold a given index constituent at its benchmark weight, resulting in differences between the Fund’s holdings and the securities in its underlying Index. One such constraint, the 5/50 Rule, precludes the sum of all the securities weighted over 5% in a fund’s portfolio from exceeding 50% of a fund’s total assets. As of October 31, 2004, approximately 81% of the Index was represented by securities each having a weighting of 5% or more of the Index. To comply with the 5/50 Rule, the Fund was obligated to underweight several of the Index’s largest weighted constituents and to overweight others. The combined effect of all the misweights in the Fund had a net positive impact on the Fund’s return relative to the Index’s return for the reporting period.

Among the Fund’s ten largest holdings as of October 31, 2004, performance leadership leaned toward wireless communications companies. Wireless carrier Sprint Corp. (FON Group) logged healthy gains, as did Telephone & Data Systems Inc. Wireless services company Nextel Communications Inc.’s Class A shares and Alltel Corp. also contributed positively to Fund performance. Wireless carrier Verizon Communications Inc., the Fund’s largest holding as of October 31, 2004, posted modest gains for the reporting period.

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE 5

Management’s Discussion of Fund Performance

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

Performance as of 10/31/04

Average Annual Total Returns						Cumulative Total Returns
Year Ended 10/31/04			Inception to 10/31/04			Inception to 10/31/04
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
22.83%	22.83%	23.60%	1.44%	1.43%	1.97%	6.45%	6.42%	8.93%

Total returns for the periods since inception are calculated from the inception date of the Fund (6/12/00). “Average annual total returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative total returns” represent the total change in value of an investment over the periods indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the 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 shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (6/19/00), the NAV of the Fund is used as a proxy for the 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.

The iShares Dow Jones U.S. Utilities Sector Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Utilities Sector Index (the “Index”). The Index measures the performance of the utilities sector of the U.S. equity market and includes companies in the electric utilities, gas utilities and water utilities industry sub-groups. The Fund invests in a representative sample of the securities in the Index that have a similar investment profile as the entire Index. For the six-month period ended October 31, 2004 (the “reporting period”), the Fund returned 13.91%, while the Index returned 14.26%.

Broad equity markets, as measured by the Dow Jones U.S. Total Market Index, generally posted modest gains for the reporting period. On the economic front, data continued to provide positive, but somewhat inconsistent, signs of recovery. Annual gross domestic product (“GDP”) grew 3.0% during the second quarter of 2004, lagging many economists’ expectations. The annual GDP growth rate for the third quarter of 2004 was a more encouraging 3.7%, but still fell short of forecasts as increased consumer spending was offset by slower paces for both inventory building and exports. Oil prices soared during the reporting period, reaching $55 per barrel in late October. The Federal Reserve Board raised short-term interest rates three times during the reporting period, overall from 1.00% to 1.75%.

The utilities sector generally performed well for the reporting period, responding positively to the signs of economic recovery. As economic conditions improved, so did the demand for industrial production, which in turn meant higher demand for power. Some utilities companies benefited from higher natural gas prices, which spiked after Hurricane Ivan caused the shutdown of several gas producing facilities in the Gulf of Mexico.

Among the Fund’s ten largest holdings as of October 31, 2004, performance was positive for the reporting period. Power producer TXU Corp. was by far the top performer among the Fund’s ten largest holdings. Duke Energy Corp. and PG&E Corp. both delivered double-digit gains. Exelon Corp., the Fund’s largest holding as of October 31, 2004, and Entergy Corp. also performed well. The weakest performer was Dominion Resources Inc., which posted a slight gain for the reporting period.

6 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance

iSHARES^® DOW JONES SELECT DIVIDEND INDEX FUND

Performance as of 10/31/04

Cumulative Total Returns
Inception to 10/31/04
NAV	MARKET	INDEX
19.01%	18.98%	19.41%

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

The Fund’s per share net asset value or “NAV” is the value of one share of the 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 shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (11/7/03), the NAV of the Fund is used as a proxy for the 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.

The iShares Dow Jones Select Dividend Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones Select Dividend Index (the “Index”). The Index measures the performance of a selected group of equity securities issued by companies that have provided relatively high dividend yields on a consistent basis over time. The Index is comprised of fifty of the highest dividend-yielding securities (excluding real estate investment trusts) in the Dow Jones U.S. Total Market Index, a broad-based index representative of the total market for U.S. equity securities. The Fund invests in a representative sample of securities in the Index that have a similar investment profile as the entire Index. For the six-month period ended October 31, 2004 (the “reporting period”), the Fund returned 10.50%, while the Index returned 10.66%.

Broad equity markets, as measured by the Dow Jones U.S. Total Market Index, generally posted modest gains for the reporting period. On the economic front, data continued to provide positive, but somewhat inconsistent, signs of recovery. Annual gross domestic product (“GDP”) grew 3.0% during the second quarter of 2004, lagging many economists’ expectations. The annual GDP growth rate for the third quarter of 2004 was a more encouraging 3.7%, but still fell short of forecasts as increased consumer spending was offset by slower paces for both inventory building and exports. Oil prices soared during the reporting period, reaching $55 per barrel in late October. The Federal Reserve Board raised short-term interest rates three times during the reporting period, overall from 1.00% to 1.75%.

Among the Fund’s ten largest holdings as of October 31, 2004, performance was mixed for the reporting period. Banks generally were strong performers, including the Fund’s top holding Bank of America Corp. and People’s Bank, contributing positively to Fund performance. DTE Energy Co. also performed well, benefiting from higher energy prices during the reporting period, and Unitrin Inc. posted gains. On the negative side, tobacco company Altria Group Inc. declined for the reporting period.

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE 7

Management’s Discussion of Fund Performance

iSHARES^® DOW JONES TRANSPORTATION AVERAGE INDEX FUND

Performance as of 10/30/04

Average Annual Total Returns						Cumulative Total Returns
Year Ended 10/31/04			Inception to 10/31/04			Inception to 10/31/04
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
21.73%	21.58%	21.46%	24.87%	24.81%	24.59%	26.86%	26.80%	26.52%

Total returns for the periods since inception are calculated from the inception date of the Fund (10/6/03). “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.

The Fund’s per share net asset value or “NAV” is the value of one share of the 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 shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (10/10/03), the NAV of the Fund is used as a proxy for the 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.

The iShares Dow Jones Transportation Average Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones Transportation Average Index (the “Index”). The Index measures the performance of the transportation sector of the U.S. equity market, and includes companies in the airlines, industrial transportation and industrial services industry sub-groups. The Fund invests in a representative sample of the securities in the Index that have a similar investment profile as the entire Index. For the six-month period ended October 31, 2004 (the “reporting period”), the Fund returned 21.76%, while the Index returned 21.87%.

Broad equity markets, as measured by the Dow Jones U.S. Total Market Index, generally posted modest gains for the reporting period. On the economic front, data continued to provide positive, but somewhat inconsistent, signs of recovery. Annual gross domestic product (“GDP”) grew 3.0% during the second quarter of 2004, lagging many economists’ expectations. The annual GDP growth rate for the third quarter of 2004 was a more encouraging 3.7%, but still fell short of forecasts as increased consumer spending was offset by slower paces for both inventory building and exports. Oil prices soared during the reporting period, reaching $55 per barrel in late October. The Federal Reserve Board raised short-term interest rates three times during the reporting period, overall from 1.00% to 1.75%.

Transportation-related companies generally performed well for the reporting period, benefiting from the improving economic environment. In particular, freight transportation shipping companies benefited from higher business activity levels.

Among the Fund’s ten largest holdings as of October 31, 2004, performance was positive. Freight companies Expeditors International Washington Inc. and Yellow Roadway Corp. were the two best performers for the reporting period, followed by Ryder System Inc. C.H. Robinson Worldwide Inc., which is a freight transportation and logistics company, posted strong gains. Railroad company Burlington Northern Santa Fe Corp. also performed well for the reporting period, as did the Fund’s largest holding as of October 31, 2004, FedEx Corp.

8 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

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 May 1, 2004 to October 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 (May 1, 2004)		Ending Account Value (October 31, 2004)		Annualized Expense Ratio		Expenses Paid During Period* (May 1 to October 31, 2004)
Dow Jones U.S. Total Market
Actual	$	1,000.00	$	1,031.90	0.20	%	$	1.02
Hypothetical (5% return before expenses)		1,000.00		1,024.20	0.20			1.02
Dow Jones U.S. Energy Sector
Actual		1,000.00		1,177.60	0.60			3.29
Hypothetical (5% return before expenses)		1,000.00		1,022.18	0.60			3.06
Dow Jones U.S. Healthcare Sector
Actual		1,000.00		929.40	0.60			2.92
Hypothetical (5% return before expenses)		1,000.00		1,022.18	0.60			3.06
Dow Jones U.S. Technology Sector
Actual		1,000.00		1,022.00	0.60			3.06
Hypothetical (5% return before expenses)		1,000.00		1,022.18	0.60			3.06

SHAREHOLDER EXPENSES 9

Shareholder Expenses (Continued)

iSHARES^® TRUST

iShares Index Fund	Beginning Account Value (May 1, 2004)		Ending Account Value (October 31, 2004)		Annualized Expense Ratio		Expenses Paid During Period* (May 1 to October 31, 2004)
Dow Jones U.S. Telecommunications Sector
Actual	$	1,000.00	$	1,075.40	0.60	%	$	3.14
Hypothetical (5% return before expenses)		1,000.00		1,022.18	0.60			3.06
Dow Jones U.S. Utilities Sector
Actual		1,000.00		1,139.10	0.60			3.24
Hypothetical (5% return before expenses)		1,000.00		1,022.18	0.60			3.06
Dow Jones Select Dividend
Actual		1,000.00		1,105.00	0.40			2.12
Hypothetical (5% return before expenses)		1,000.00		1,023.19	0.40			2.04
Dow Jones Transportation Average
Actual		1,000.00		1,217.60	0.60			3.35
Hypothetical (5% return before expenses)		1,000.00		1,022.18	0.60			3.06

* 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 (184 days), and divided by the number of days in the year (365 days).

10 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

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

October 31, 2004

Security	Shares	Value
COMMON STOCKS – 99.84%
ADVERTISING – 0.27%
ADVO Inc.1	1,056	$	33,739
Catalina Marketing Corp.	1,763		45,150
Donnelley (R.H.) Corp.2	1,015		55,064
Getty Images Inc.1,2	1,478		87,394
Harte-Hanks Inc.	1,773		45,637
Interpublic Group of Companies Inc.2	13,993		171,554
Lamar Advertising Co.1,2	2,717		112,538
Omnicom Group Inc.	6,145		484,840
ValueVision Media Inc. Class A1,2	995		10,388
			1,046,304
AEROSPACE & DEFENSE – 1.50%
AAR Corp.1,2	1,012		11,888
Alliant Techsystems Inc.1,2	1,159		66,631
Boeing Co. (The)	23,335		1,164,416
Curtiss-Wright Corp. Class B	277		14,473
Engineered Support Systems Inc.1	946		45,446
Esterline Technologies Corp.2	727		22,973
General Dynamics Corp.	5,455		557,065
Goodrich (B.F.) Co.	3,891		119,960
Kaman Corp. Class A	735		8,085
L-3 Communications Holdings Inc.	3,542		233,524
Lockheed Martin Corp.	11,518		634,527
Northrop Grumman Corp.	11,630		601,852
Raytheon Co.	14,625		533,520
Rockwell Collins Inc.	5,324		188,842
Titan Corp. (The)2	2,682		39,801
United Defense Industries Inc.2	1,516		60,852
United Technologies Corp.1	16,719		1,551,858
			5,855,713
AGRICULTURE – 1.11%
Altria Group Inc.	66,965		3,245,124
Bunge Ltd.	3,633		173,403
Delta & Pine Land Co.1	1,156		30,426
Loews Corp. - Carolina Group1	1,890		51,143
Monsanto Co.	8,704		372,096
Reynolds American Inc.	2,749		189,296
Universal Corp.1	853		39,050
UST Inc.	5,478		225,474
			4,326,012
AIRLINES – 0.16%
AirTran Holdings Inc.1,2	2,937		34,128
Alaska Air Group Inc.1,2	868		22,863
AMR Corp.1,2	5,086		39,264
Continental Airlines Inc. Class B1,2	2,024		18,783
Delta Air Lines Inc.1,2	3,623		19,745
FLYi Inc.1,2	1,303		1,824
JetBlue Airways Corp.1,2	2,772		61,123
Northwest Airlines Corp.1,2	1,853		16,399
SkyWest Inc.1	2,000		34,160
Southwest Airlines Co.	22,917		361,401
			609,690
APPAREL – 0.40%
Coach Inc.2	6,041		281,692
Jones Apparel Group Inc.	4,150		146,495
Kellwood Co.	843		26,521
Liz Claiborne Inc.	3,487		142,549
Nike Inc. Class B	5,687		462,410
Phillips-Van Heusen Corp.	856		19,508
Polo Ralph Lauren Corp.	1,986		73,343
Quiksilver Inc.2	1,986		54,118
Reebok International Ltd.1	1,601		59,237
Russell Corp.	854		14,766
Stride Rite Corp.	1,465		15,163
Timberland Co. Class A2	760		46,664
Tommy Hilfiger Corp.2	2,765		26,544
Unifi Inc.2	1,896		6,162
VF Corp.	2,779		149,594
Wolverine World Wide Inc.	1,282		39,024
			1,563,790
AUTO MANUFACTURERS – 0.48%
Ford Motor Co.	57,418		748,157
General Motors Corp.1	15,019		578,982
Navistar International Corp.2	2,049		70,793
Oshkosh Truck Corp.	1,160		68,324
PACCAR Inc.	5,653		391,809
Wabash National Corp.2	871		21,409
			1,879,474
AUTO PARTS & EQUIPMENT – 0.26%
American Axle & Manufacturing Holdings Inc.	1,361		39,061

SCHEDULES OF INVESTMENTS 11

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
ArvinMeritor Inc.1	2,193	$	40,921
BorgWarner Inc.	1,750		81,165
Cooper Tire & Rubber Co.	2,474		48,194
Dana Corp.	4,932		73,536
Delphi Corp.	16,053		135,006
Goodyear Tire & Rubber Co. (The)1,2	5,503		55,470
Johnson Controls Inc.	6,214		356,373
Lear Corp.	2,166		116,791
Modine Manufacturing Co.1	996		30,587
Superior Industries International Inc.1	713		19,444
Tower Automotive Inc.1,2	2,030		3,025
Visteon Corp.	4,359		30,992
			1,030,565
BANKS – 6.76%
AMCORE Financial Inc.	872		26,535
AmSouth Bancorp	11,551		304,831
Associated Bancorp1	3,216		111,563
Assurant Inc.	2,905		78,377
BancorpSouth Inc.	2,420		57,572
Bank of America Corp.	132,682		5,942,827
Bank of Hawaii Corp.	1,714		81,843
Bank of New York Co. Inc. (The)	25,243		819,388
Banknorth Group Inc.	5,487		193,526
BB&T Corp.	18,125		745,119
Cathay General Bancorp	1,632		64,301
Chittenden Corp.1	1,420		40,214
Citizens Banking Corp.1	1,314		43,033
City National Corp.	1,473		101,490
Colonial BancGroup Inc. (The)	4,530		98,074
Comerica Inc.	5,186		318,991
Commerce Bancorp Inc.1	2,593		153,609
Commerce Bancshares Inc.	2,137		104,927
Community First Bankshares Inc.	1,288		41,499
Compass Bancshares Inc.	4,033		192,656
Cullen/Frost Bankers Inc.	1,717		84,133
East West Bancorp Inc.	1,688		67,588
Fifth Third Bancorp	15,334		754,279
First BanCorp (Puerto Rico)	1,137		62,001
First Horizon National Corp.1	3,974		171,995
First Midwest Bancorp Inc.	1,597		55,751
First National Bankshares of Florida1	1,597		39,430
FirstMerit Corp.	2,483		64,881
FNB Corp. (Pennsylvania)1	1,551		31,842
Fremont General Corp.1	2,167		46,590
Fulton Financial Corp.1	3,924		84,209
Greater Bay Bancorp1	1,678		52,429
Hibernia Corp. Class A	5,117		148,393
Hudson United Bancorp	1,457		57,989
Huntington Bancshares Inc.	6,938		166,165
Investors Financial Services Corp.1	2,239		86,179
KeyCorp	13,315		447,251
M&T Bank Corp.	3,079		317,137
Marshall & Ilsley Corp.	6,737		282,752
Mellon Financial Corp.	13,868		400,785
Mercantile Bankshares Corp.	2,650		129,161
National City Corp.	19,046		742,223
North Fork Bancorp Inc.	9,629		424,639
Northern Trust Corp.	6,797		289,144
Old National Bancorp1	2,171		53,776
Pacific Capital Bancorp1	1,281		40,774
Park National Corp.1	389		50,531
PNC Financial Services Group	9,238		483,147
Popular Inc.	7,808		200,822
Provident Bankshares Corp.	959		33,306
Regions Financial Corp.	15,174		532,304
Republic Bancorp Inc.1	2,334		39,001
Silicon Valley Bancshares1,2	1,188		47,532
Sky Financial Group Inc.	3,588		96,445
South Financial Group Inc. (The)1	2,252		67,605
SouthTrust Corp.	10,869		473,562
Southwest Bancorp of Texas Inc.1	2,028		47,536
State Street Corp.	10,866		489,513
Sterling Bancshares Inc.1	1,462		20,717
SunTrust Banks Inc.	11,165		785,793
Susquehanna Bancshares Inc.1	1,609		40,016
Synovus Financial Corp.	8,325		226,357
TCF Financial Corp.1	4,366		137,616
Texas Regional Bancshares Inc. Class A1	1,476		47,129
TrustCo Bank Corp. NY1	2,277		30,489
Trustmark Corp.	1,729		54,515
U.S. Bancorp	61,397		1,756,568
UCBH Holdings Inc.1	1,414		60,929

12 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
UnionBanCal Corp.	1,603	$	97,382
United Bancshares Inc.	1,303		47,781
Valley National Bancorp1	3,349		94,978
W Holding Co. Inc.	2,707		54,113
Wachovia Corp.	42,763		2,104,367
Wells Fargo & Co.	55,076		3,289,139
Westamerica Bancorp1	1,049		59,992
Whitney Holding Corp.	1,297		56,562
Wilmington Trust Corp.	2,195		75,859
Zions Bancorporation	2,944		194,804
			26,418,281
BEVERAGES – 1.96%
Anheuser-Busch Companies Inc.	26,186		1,307,991
Brown-Forman Corp. Class B	1,283		57,607
Coca-Cola Co. (The)	73,194		2,976,068
Coca-Cola Enterprises Inc.	8,262		172,758
Constellation Brands Inc.2	3,135		122,986
Coors (Adolph) Co. Class B	877		58,496
Pepsi Bottling Group Inc.	5,438		152,482
PepsiAmericas Inc.	2,091		42,343
PepsiCo Inc.	55,153		2,734,486
Robert Mondavi Corp. (The) Class A1,2	288		15,693
			7,640,910
BIOTECHNOLOGY – 1.43%
Affymetrix Inc.1,2	1,870		57,035
Alexion Pharmaceuticals Inc.1,2	664		11,849
Amgen Inc.2	41,340		2,348,112
Applera Corp. - Celera Genomics Group2	2,307		29,576
Biogen Idec Inc.2	11,068		643,715
Bio-Rad Laboratories Inc. Class A2	474		24,657
Cambrex Corp.	861		19,261
Celgene Corp.1,2	5,478		162,258
Cell Genesys Inc.2	1,163		7,629
Charles River Laboratories International Inc.2	2,064		96,575
Chiron Corp.2	3,636		117,879
CuraGen Corp.1,2	1,303		6,424
Enzo Biochem Inc.1,2	799		14,135
Enzon Pharmaceuticals Inc.2	1,441		23,301
Gene Logic Inc.1,2	874		2,884
Genentech Inc.2	15,168		690,599
Genzyme Corp.2	7,398		388,173
Human Genome Sciences Inc.1,2	4,220		43,424
ICOS Corp.1,2	1,891		42,585
Immunomedics Inc.1,2	1,316		3,751
Incyte Corp.1,2	2,175		22,620
InterMune Inc.1,2	1,011		13,113
Invitrogen Corp.2	1,714		99,241
Lexicon Genetics Inc.1,2	1,850		12,043
Martek Biosciences Corp.1,2	932		43,856
Maxygen Inc.1,2	1,004		9,638
MedImmune Inc.2	8,256		234,636
Millennium Pharmaceuticals Inc.1,2	9,862		128,009
Millipore Corp.2	1,592		73,216
Myriad Genetics Inc.1,2	1,225		21,707
Nektar Therapeutics1,2	2,865		41,285
Praecis Pharmaceuticals Inc.1,2	1,883		3,295
Protein Design Labs Inc.2	3,183		60,954
Regeneron Pharmaceuticals Inc.1,2	1,139		8,281
Savient Pharmaceuticals Inc.1,2	1,875		3,694
Telik Inc.1,2	1,252		23,099
Transkaryotic Therapies Inc.1,2	1,002		17,345
Vertex Pharmaceuticals Inc.1,2	2,467		26,841
XOMA Ltd.1,2	2,329		4,774
			5,581,469
BUILDING MATERIALS – 0.30%
American Standard Companies Inc.2	5,817		212,728
Eagle Materials Inc.1	369		25,502
Eagle Materials Inc. Class B	303		20,246
ElkCorp	581		16,355
Florida Rock Industries Inc.	1,138		58,778
Lafarge North America Inc.	1,007		49,343
Martin Marietta Materials Inc.	1,596		72,666
Masco Corp.	14,456		495,263
Texas Industries Inc.	720		36,670
USG Corp.1,2	889		19,905
Vulcan Materials Co.	2,725		135,650
York International Corp.	1,296		41,265
			1,184,371
CHEMICALS – 1.60%
Air Products & Chemicals Inc.	6,997		372,100
Airgas Inc.	2,174		53,480

SCHEDULES OF INVESTMENTS 13

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
Albemarle Corp.	1,160	$	41,586
Ashland Inc.	2,342		134,946
Cabot Corp.	2,008		68,433
Cabot Microelectronics Corp.1,2	864		31,130
Crompton Corp.	3,906		36,326
Cytec Industries Inc.	1,145		53,254
Dow Chemical Co. (The)	30,543		1,372,602
Du Pont (E.I.) de Nemours and Co.	32,619		1,398,377
Eastman Chemical Co.1	2,481		117,773
Ecolab Inc.1	6,081		205,842
Engelhard Corp.	4,185		118,435
Ferro Corp.1	1,422		29,962
FMC Corp.1,2	1,037		45,472
Fuller (H.B.) Co.	886		23,833
Georgia Gulf Corp.	1,144		51,789
Great Lakes Chemical Corp.1	1,504		38,532
Hercules Inc.1,2	3,336		47,638
International Flavors & Fragrances Inc.	2,523		98,523
Lubrizol Corp.	2,238		77,726
Lyondell Chemical Co.1	5,382		123,678
MacDermid Inc.	707		22,313
Millennium Chemicals Inc.1,2	2,028		43,561
Minerals Technologies Inc.1	700		42,070
Mosaic Co. (The)2	4,365		65,650
Olin Corp.	2,492		46,600
OM Group Inc.2	881		29,064
PPG Industries Inc.	5,512		351,390
Praxair Inc.	10,503		443,227
Rohm & Haas Co.	4,734		200,674
RPM International Inc.	3,782		66,677
Schulman (A.) Inc.1	1,042		20,684
Sensient Technologies Corp.1	1,450		31,494
Sherwin-Williams Co. (The)	3,919		167,420
Sigma-Aldrich Corp.	1,874		104,269
Valspar Corp. (The)	1,591		74,236
Wellman Inc.1	1,154		8,517
			6,259,283
COAL – 0.09%
Arch Coal Inc.1	1,758		57,170
CONSOL Energy Inc.	2,827		100,076
Massey Energy Co.	2,468		66,463
Peabody Energy Corp.	2,068		131,897
			355,606
COMMERCIAL SERVICES – 1.37%
Accenture Ltd.2	14,574		352,837
ADESA Inc.2	3,332		67,140
Albany Molecular Research Inc.1,2	724		6,241
Alliance Data Systems Corp.2	1,465		61,940
Apollo Group Inc. Class A2	5,190		342,540
ARAMARK Corp. Class B	3,425		77,234
Arbitron Inc.2	1,010		36,532
Banta Corp.	864		35,148
BearingPoint Inc.2	5,960		51,852
Block (H & R) Inc.	5,067		240,936
Bowne & Co. Inc.	1,167		14,506
Career Education Corp.2	3,454		108,352
Cendant Corp.	33,105		681,632
Chemed Corp.	474		28,653
ChoicePoint Inc.2	2,873		119,603
Convergys Corp.2	4,657		60,588
Corinthian Colleges Inc.2	2,930		42,075
Corporate Executive Board Co. (The)1	1,336		85,036
Corrections Corp. of America2	1,054		36,626
Deluxe Corp.	1,712		65,210
DeVry Inc.1,2	2,017		29,448
Donnelley (R.R.) & Sons Co.	7,258		228,264
Education Management Corp.2	1,980		53,104
Equifax Inc.	4,629		121,048
First Health Group Corp.2	3,199		50,928
Forrester Research Inc.2	561		8,653
FTI Consulting Inc.1,2	1,433		26,883
Hewitt Associates Inc. Class A1,2	1,509		42,297
Hudson Highland Group Inc.1,2	268		7,655
Interactive Data Corp.1,2	1,162		22,926
Iron Mountain Inc.1,2	3,662		121,029
ITT Educational Services Inc.1,2	1,445		54,924
Laureate Education Inc.2	1,429		56,045
Manpower Inc.	2,946		133,306
McKesson Corp.	8,910		237,541
MoneyGram International Inc.	3,032		56,395
Moody’s Corp.	4,088		318,087

14 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
MPS Group Inc.2	3,346	$	35,233
Navigant Consulting Inc.2	1,710		42,528
NCO Group Inc.1,2	809		21,641
PAREXEL International Corp.2	876		16,863
Paychex Inc.	10,925		358,274
Pharmaceutical Product Development Inc.1,2	1,603		67,695
Pre-Paid Legal Services Inc.1,2	463		12,913
PRG-Schultz International Inc.2	2,034		10,536
Quanta Services Inc.2	3,690		24,797
Rent-A-Center Inc.2	2,652		63,622
Robert Half International Inc.	5,491		145,676
Service Corp. International2	11,300		74,693
ServiceMaster Co. (The)	9,696		124,497
Sotheby’s Holdings Inc. Class A1,2	1,449		27,082
Spherion Corp.2	1,875		13,481
Stewart Enterprises Inc. Class A2	3,050		21,716
Strayer Education Inc.	442		42,892
TeleTech Holdings Inc.1,2	1,177		11,770
United Rentals Inc.1,2	2,320		35,844
Valassis Communications Inc.2	1,602		55,077
Viad Corp.	758		16,320
Weight Watchers International Inc.1,2	1,450		52,084
			5,358,448
COMPUTERS – 3.93%
Advanced Digital Information Corp.2	2,045		18,303
Affiliated Computer Services Inc. Class A1,2	3,931		214,436
Agilysys Inc.	1,145		19,568
Apple Computer Inc.2	12,309		646,592
BISYS Group Inc. (The)2	3,926		57,320
Brocade Communications Systems Inc.2	8,570		58,190
CACI International Inc. Class A2	1,016		61,946
Cadence Design Systems Inc.1,2	8,868		110,318
Ceridian Corp.2	5,035		86,854
CIBER Inc.1,2	1,871		16,914
Cognizant Technology Solutions Corp.2	4,302		146,268
Computer Sciences Corp.2	6,130		304,477
Dell Inc.2	72,387		2,537,888
Diebold Inc.1	2,334		111,682
DST Systems Inc.2	2,266		101,630
Echelon Corp.1,2	1,164		8,218
Electronic Data Systems Corp.	16,459		350,083
Electronics For Imaging Inc.1,2	1,741		31,408
EMC Corp.2	79,197		1,019,265
FactSet Research Systems Inc.	693		34,539
Gateway Inc.2	7,636		44,671
Henry (Jack) & Associates Inc.	2,454		45,743
Hewlett-Packard Co.	89,067		1,661,990
Hutchinson Technology Inc.1,2	866		29,106
Imation Corp.1	1,180		36,899
InFocus Corp.1,2	1,303		8,391
Intergraph Corp.2	1,192		29,723
International Business Machines Corp.	56,124		5,037,129
Iomega Corp.2	1,584		7,286
Kronos Inc.1,2	1,056		51,797
Lexar Media Inc.1,2	2,229		15,068
Lexmark International Inc.2	4,138		343,909
Maxtor Corp.2	8,296		24,556
McDATA Corp. Class A2	2,758		17,320
McDATA Corp. Class B1,2	708		4,248
Mentor Graphics Corp.1,2	2,178		25,352
Mercury Computer Systems Inc.1,2	718		18,133
MICROS Systems Inc.2	589		34,822
M-Systems Flash Disk Pioneers Ltd.1,2	999		14,046
National Instruments Corp.1	1,681		46,278
NCR Corp.2	3,127		176,206
Network Appliance Inc.2	11,828		289,431
PalmOne Inc.1,2	1,289		37,342
Perot Systems Corp. Class A2	2,311		37,045
Quantum Corp.1,2	5,359		14,362
RadiSys Corp.2	566		7,516
Reynolds & Reynolds Co. (The) Class A	2,140		52,665
SanDisk Corp.1,2	5,228		109,108
Seagate Technology	7,156		90,452
Silicon Graphics Inc.1,2	5,959		7,687
Silicon Storage Technology Inc.2	2,752		20,502
Storage Technology Corp.2	3,476		93,922
Sun Microsystems Inc.2	108,874		493,199
SunGard Data Systems Inc.2	9,424		249,642
Synopsys Inc.2	5,118		83,116

SCHEDULES OF INVESTMENTS 15

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
Unisys Corp.2	10,716	$	113,804
Western Digital Corp.2	6,626		55,195
			15,363,560
COSMETICS & PERSONAL CARE – 2.09%
Alberto-Culver Co.	2,609		117,040
Avon Products Inc.	15,330		606,301
Colgate-Palmolive Co.	17,251		769,740
Estee Lauder Companies Inc. Class A	3,926		168,622
Gillette Co. (The)	29,656		1,230,131
Kimberly-Clark Corp.	16,184		965,699
Procter & Gamble Co.	83,868		4,292,364
			8,149,897
DISTRIBUTION & WHOLESALE – 0.24%
CDW Corp.	2,089		129,581
Fastenal Co.1	2,195		121,230
Genuine Parts Co.	5,573		222,307
Grainger (W.W.) Inc.1	2,652		155,381
Hughes Supply Inc.	2,100		59,661
Ingram Micro Inc. Class A2	4,161		71,777
SCP Pool Corp.1	1,599		46,675
Tech Data Corp.2	1,866		75,368
United Stationers Inc.1,2	1,154		51,353
			933,333
DIVERSIFIED FINANCIAL SERVICES – 7.42%
Affiliated Managers Group Inc.1,2	911		50,870
American Express Co.	36,702		1,947,775
AmeriCredit Corp.1,2	4,952		96,069
Ameritrade Holding Corp.2	9,310		121,216
Bear Stearns Companies Inc. (The)	3,390		321,202
Capital One Financial Corp.	7,829		577,467
CapitalSource Inc.1,2	2,202		49,325
Chicago Mercantile Exchange Holdings Inc.1	934		164,132
CIT Group Inc.1	6,956		281,022
Citigroup Inc.	168,668		7,483,799
Countrywide Financial Corp.	18,398		587,448
Doral Financial Corp.	3,018		126,696
E*TRADE Financial Corp.2	12,036		155,264
Eaton Vance Corp.	1,933		84,317
Edwards (A.G.) Inc.	2,625		95,182
Federal Home Loan Mortgage Corp.	22,420		1,493,172
Federal National Mortgage Association	31,492		2,209,164
Federated Investors Inc. Class B	3,087		89,492
Franklin Resources Inc.	4,499		272,729
Friedman, Billings, Ramsey Group Inc. Class A1	4,733		81,124
Goldman Sachs Group Inc. (The)	13,473		1,325,474
IndyMac Bancorp Inc.	1,924		62,068
Investment Technology Group Inc.1,2	1,614		24,856
Janus Capital Group Inc.	7,676		117,059
Jefferies Group Inc.	1,623		65,131
JP Morgan Chase & Co.	116,216		4,485,938
Knight Trading Group Inc.1,2	3,519		36,562
LaBranche & Co. Inc.1,2	1,135		8,047
Legg Mason Inc.1	3,223		205,337
Lehman Brothers Holdings Inc.	8,892		730,478
MBNA Corp.	36,977		947,721
Merrill Lynch & Co. Inc.	28,140		1,517,872
Morgan Stanley	32,734		1,672,380
Piper Jaffray Companies Inc.1,2	628		27,462
Providian Financial Corp.2	9,706		150,928
Raymond James Financial Inc.	1,969		51,391
Schwab (Charles) Corp. (The)	35,982		329,235
SLM Corp.	14,220		643,597
SWS Group Inc.1	583		11,194
T. Rowe Price Group Inc.	4,069		226,928
W.P. Stewart & Co. Ltd.1	880		17,776
Waddell & Reed Financial Inc. Class A1	2,597		54,563
			28,999,462
ELECTRIC – 2.92%
AES Corp. (The)2	19,985		217,836
Allegheny Energy Inc.1,2	4,206		77,012
ALLETE Inc.	867		29,461
Alliant Energy Corp.	3,839		101,273
Ameren Corp.	6,275		301,200
American Electric Power Co. Inc.	12,768		420,450
Aquila Inc.2	6,376		20,212
Avista Corp.	1,604		28,519
Black Hills Corp.1	1,011		29,784
Calpine Corp.1,2	13,636		33,954
CenterPoint Energy Inc.1	8,996		94,548
Cinergy Corp.1	5,391		213,052

16 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
Cleco Corp.	1,583	$	28,842
CMS Energy Corp.1,2	6,619		61,954
Consolidated Edison Inc.1	7,795		338,693
Constellation Energy Group Inc.	5,766		234,215
Dominion Resources Inc.	10,824		696,200
DPL Inc.	3,790		81,864
DTE Energy Co.	5,683		242,721
Duke Energy Corp.	30,571		749,907
Duquesne Light Holdings Inc.1	2,595		44,530
Edison International	9,882		301,401
El Paso Electric Co.2	1,741		28,988
Energy East Corp.1	4,799		120,935
Entergy Corp.	7,353		480,592
Exelon Corp.	21,499		851,790
FirstEnergy Corp.	10,649		440,123
FPL Group Inc.	5,513		379,846
Great Plains Energy Inc.1	2,541		72,393
Hawaiian Electric Industries Inc.1	2,751		77,138
IDACORP Inc.1	1,301		40,305
MDU Resources Group Inc.	3,691		94,674
NiSource Inc.	8,689		186,379
Northeast Utilities	4,320		83,506
NRG Energy Inc.2	2,590		71,847
NSTAR	1,741		86,127
OGE Energy Corp.1	2,872		72,863
Pepco Holdings Inc.1	5,813		119,806
PG&E Corp.2	12,740		408,190
Pinnacle West Capital Corp.	3,046		129,821
PNM Resources Inc.1	1,950		45,396
PPL Corp.	6,101		317,252
Progress Energy Inc.	7,948		328,252
Public Service Enterprise Group Inc.1	7,688		327,432
Puget Energy Inc.	3,070		71,408
Reliant Energy Inc.2	9,540		98,071
SCANA Corp.	3,345		124,099
Sierra Pacific Resources Corp.1,2	3,462		33,235
Southern Co. (The)	24,038		759,360
TECO Energy Inc.	6,082		85,148
Texas Genco Holdings Inc.1	442		20,641
TXU Corp.	9,737		596,099
UniSource Energy Corp.1	1,152		28,328
Westar Energy Inc.	2,922		61,216
Wisconsin Energy Corp.	3,915		127,786
WPS Resources Corp.1	1,141		54,197
Xcel Energy Inc.	13,042		223,018
			11,393,889
ELECTRICAL COMPONENTS & EQUIPMENT – 0.40%
American Power Conversion Corp.	5,907		113,887
AMETEK Inc.	2,304		75,848
Artesyn Technologies Inc.1,2	1,310		12,707
Belden CDT Inc.1	1,480		32,900
C&D Technologies Inc.	878		15,716
Emerson Electric Co.	13,760		881,328
Energizer Holdings Inc.1,2	2,451		113,800
General Cable Corp.1,2	1,022		12,571
GrafTech International Ltd.2	3,201		29,641
Hubbell Inc. Class B1	1,605		73,381
Littelfuse Inc.2	719		23,454
Molex Inc.	2,508		74,162
Molex Inc. Class A	2,790		71,759
Power-One Inc.2	2,321		16,293
			1,547,447
ELECTRONICS – 0.86%
Agilent Technologies Inc.2	14,321		358,884
Amphenol Corp. Class A2	2,975		102,132
Applera Corp. - Applied Biosystems Group	6,362		121,387
Arrow Electronics Inc.2	3,731		89,395
Avnet Inc.2	4,038		68,484
AVX Corp.1	1,882		22,584
Benchmark Electronics Inc.2	1,288		43,753
Checkpoint Systems Inc.1,2	1,149		19,648
Coherent Inc.1,2	1,009		24,347
CTS Corp.1	1,010		13,342
Cymer Inc.2	1,161		33,112
Dionex Corp.2	733		41,048
Electro Scientific Industries Inc.2	880		14,925
Fisher Scientific International Inc.2	3,680		211,085
Flextronics International Ltd.2	18,174		218,997
FLIR Systems Inc.1,2	1,037		55,179
Garmin Ltd.1	1,884		94,200
Gentex Corp.1	2,466		81,403

SCHEDULES OF INVESTMENTS 17

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
Jabil Circuit Inc.2	5,369	$	130,520
KEMET Corp.2	2,908		22,566
Methode Electronics Inc.1	1,181		15,861
Mettler Toledo International Inc.2	1,298		62,174
Molecular Devices Corp.2	578		11,569
Orbotech Ltd.2	1,020		17,248
Park Electrochemical Corp.1	581		12,207
Parker Hannifin Corp.	3,912		276,305
PerkinElmer Inc.	4,056		83,310
Photon Dynamics Inc.2	580		10,614
Plexus Corp.1,2	1,439		17,829
Sanmina-SCI Corp.2	17,481		139,848
Solectron Corp.2	32,062		167,364
Symbol Technologies Inc.	7,770		114,141
Taser International Inc.1,2	856		35,010
Technitrol Inc.2	1,161		18,948
Tektronix Inc.	3,037		92,112
Thermo Electron Corp.2	5,199		150,771
Thomas & Betts Corp.	1,886		53,449
Trimble Navigation Ltd.1,2	1,569		45,015
Varian Inc.2	1,157		42,207
Vishay Intertechnology Inc.1,2	4,793		61,973
Waters Corp.2	4,041		166,853
			3,361,799
ENERGY – ALTERNATE SOURCES – 0.00%
FuelCell Energy Inc.1,2	1,156		14,259
			14,259
ENGINEERING & CONSTRUCTION – 0.10%
Dycom Industries Inc.2	1,599		52,207
EMCOR Group Inc.2	561		22,199
Fluor Corp.1	2,741		127,292
Granite Construction Inc.	1,170		28,408
Insituform Technologies Inc. Class A1,2	869		17,224
Jacobs Engineering Group Inc.2	1,732		70,544
McDermott International Inc.2	2,036		27,791
Shaw Group Inc. (The)1,2	2,132		25,989
			371,654
ENTERTAINMENT – 0.17%
Alliance Gaming Corp.1,2	1,396		12,913
GTECH Holdings Corp.	3,742		88,573
International Game Technology Inc.	11,455		378,473
International Speedway Corp. Class A	857		40,313
Macrovision Corp.2	1,448		39,154
Metro-Goldwyn-Mayer Inc.	2,503		29,585
Pinnacle Entertainment Inc.1,2	889		13,068
Scientific Games Corp. Class A2	2,025		42,889
Six Flags Inc.2	3,182		16,037
			661,005
ENVIRONMENTAL CONTROL – 0.23%
Allied Waste Industries Inc.2	8,118		66,243
Casella Waste Systems Inc. Class A2	744		9,240
Ionics Inc.1,2	586		16,701
Republic Services Inc.	4,502		138,662
Stericycle Inc.2	1,454		65,910
Tetra Tech Inc.1,2	1,918		25,203
Waste Connections Inc.1,2	1,626		51,252
Waste Management Inc.	19,007		541,319
			914,530
FOOD – 1.66%
Albertson’s Inc.1	10,464		238,684
American Italian Pasta Co. Class A1	587		11,916
Archer-Daniels-Midland Co.	19,393		375,642
Campbell Soup Co.	8,349		224,087
Chiquita Brands International Inc.2	1,312		23,642
ConAgra Foods Inc.	17,065		450,516
Corn Products International Inc.1	1,150		56,580
Dean Foods Co.2	5,056		150,922
Del Monte Foods Co.2	6,064		64,764
Dreyer’s Grand Ice Cream Holdings Inc.	787		63,180
Flowers Foods Inc.1	1,168		29,620
General Mills Inc.	9,697		429,092
Hain Celestial Group Inc.1,2	999		16,164
Heinz (H.J.) Co.	11,364		413,081
Hershey Foods Corp.	5,506		279,099
Hormel Foods Corp.1	2,476		69,600
Kellogg Co.	7,609		327,187
Kraft Foods Inc.1	8,495		282,968
Kroger Co.2	22,403		338,509
McCormick & Co. Inc. NVS	3,970		140,657
Performance Food Group Co.1,2	1,468		34,146
Ralcorp Holdings Inc.	1,013		37,228
Safeway Inc.2	14,345		261,653

18 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
Sara Lee Corp.	25,860	$	602,021
Smithfield Foods Inc.2	2,930		70,994
Smucker (J.M.) Co. (The)	1,872		83,304
SUPERVALU Inc.	4,494		132,528
Sysco Corp.	20,906		674,637
Tootsie Roll Industries Inc.	760		23,043
Tyson Foods Inc. Class A	7,839		113,665
Whole Foods Market Inc.	2,019		164,407
Wild Oats Markets Inc.2	731		4,444
Winn-Dixie Stores Inc.1	2,645		9,099
Wrigley (William Jr.) Co.	4,527		296,066
			6,493,145
FOREST PRODUCTS & PAPER – 0.50%
Boise Cascade Corp.	2,898		85,549
Bowater Inc.1	1,882		69,333
Caraustar Industries Inc.1,2	1,015		15,093
Georgia-Pacific Corp.	7,530		260,463
International Paper Co.	15,818		609,151
Louisiana-Pacific Corp.	3,189		78,162
MeadWestvaco Corp.	6,667		210,210
Pope & Talbot Inc.	427		6,439
Potlatch Corp.1	1,005		47,325
Temple-Inland Inc.	1,746		103,224
Wausau-Mosinee Paper Corp.1	1,411		22,068
Weyerhaeuser Co.	7,245		453,827
			1,960,844
GAS – 0.29%
AGL Resources Inc.	1,898		59,218
Atmos Energy Corp.	1,990		51,362
Energen Corp.	1,016		54,640
KeySpan Corp.	5,208		208,060
New Jersey Resources Corp.	838		34,450
Nicor Inc.1	1,445		54,216
Northwest Natural Gas Co.1	872		27,642
NUI Corp.1	427		5,747
ONEOK Inc.1	3,138		84,161
Peoples Energy Corp.1	1,161		49,668
Piedmont Natural Gas Co.1	1,081		49,218
Sempra Energy	6,733		225,825
Southern Union Co.1,2	2,217		48,707
UGI Corp.	1,760		67,989
Vectren Corp.	2,602		67,314
WGL Holdings Inc.	1,591		45,264
			1,133,481
HAND & MACHINE TOOLS – 0.12%
Black & Decker Corp.	2,654		213,063
Kennametal Inc.	1,197		55,696
Regal-Beloit Corp.1	697		16,310
Snap-On Inc.	1,718		50,475
Stanley Works (The)	2,742		122,074
			457,618
HEALTH CARE - PRODUCTS – 3.64%
Advanced Medical Optics Inc.1,2	1,260		49,266
Alcon Inc.1	2,496		177,715
ArthroCare Corp.1,2	595		18,332
Bard (C.R.) Inc.	3,310		188,008
Bausch & Lomb Inc.	1,724		105,095
Baxter International Inc.	19,978		614,523
Beckman Coulter Inc.	2,041		121,439
Becton, Dickinson & Co.	7,754		407,085
Biomet Inc.	7,699		359,389
Biosite Inc.1,2	594		28,993
Bioveris Corp.2	709		4,570
Boston Scientific Corp.2	19,771		697,916
Cooper Companies Inc.1	1,123		79,003
Cyberonics Inc.1,2	587		11,018
Cytyc Corp.2	3,476		90,689
Dade Behring Holdings Inc.2	1,370		77,117
Datascope Corp.	443		14,380
DENTSPLY International Inc.	2,326		120,975
Diagnostic Products Corp.	774		34,172
Edwards Lifesciences Corp.1,2	2,023		69,146
Gen-Probe Inc.2	1,521		53,296
Guidant Corp.	10,312		686,985
Haemonetics Corp.2	870		28,579
Henry Schein Inc.2	1,451		91,747
Hillenbrand Industries Inc.	1,877		93,437
IDEXX Laboratories Inc.2	1,154		57,515
INAMED Corp.2	1,158		61,548
Invacare Corp.	1,007		46,503
Johnson & Johnson	96,820		5,652,352
Medtronic Inc.	39,500		2,018,845

SCHEDULES OF INVESTMENTS 19

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
Mentor Corp.	1,135	$	39,498
Oakley Inc.	864		10,973
Patterson Companies Inc.1,2	3,780		141,750
PolyMedica Corp.1	886		31,010
PSS World Medical Inc.2	2,315		26,078
ResMed Inc.1,2	1,054		49,538
Respironics Inc.2	1,184		60,491
St. Jude Medical Inc.2	5,749		440,201
Steris Corp.2	2,325		48,197
Stryker Corp.	8,958		386,000
Sybron Dental Specialties Inc.1,2	1,309		42,634
TECHNE Corp.2	1,194		43,008
Varian Medical Systems Inc.2	4,444		178,427
Viasys Healthcare Inc.2	873		14,920
VISX Inc.2	1,461		24,369
Zimmer Holdings Inc.2	7,971		618,470
			14,215,202
HEALTH CARE - SERVICES – 1.44%
Aetna Inc.	4,964		471,580
AMERIGROUP Corp.2	881		52,860
Anthem Inc.2	4,534		364,534
Apria Healthcare Group Inc.1,2	1,752		47,935
Beverly Enterprises Inc.1,2	3,339		29,016
Community Health Systems Inc.2	2,973		79,736
Covance Inc.2	1,943		77,176
Coventry Health Care Inc.2	2,394		97,915
DaVita Inc.2	3,336		98,812
HCA Inc.1	14,974		549,995
Health Management Associates Inc. Class A1	7,786		160,859
Health Net Inc.2	3,793		92,018
Humana Inc.2	5,361		102,663
Laboratory Corp. of America Holdings1,2	4,540		207,932
LifePoint Hospitals Inc.2	1,078		34,949
Lincare Holdings Inc.1,2	3,213		118,110
Manor Care Inc.	2,817		92,229
OCA Inc.1,2	1,444		5,964
Odyssey Healthcare Inc.1,2	1,127		8,700
PacifiCare Health Systems Inc.1,2	2,715		96,708
Pediatrix Medical Group Inc.2	727		40,894
Province Healthcare Co.2	1,577		33,811
Quest Diagnostics Inc.1	2,635		230,668
Renal Care Group Inc.2	2,088		65,897
Select Medical Corp.	3,268		56,177
Sunrise Senior Living Inc.2	579		22,066
Tenet Healthcare Corp.2	15,353		164,584
Triad Hospitals Inc.1,2	2,597		85,779
UnitedHealth Group Inc.	21,624		1,565,578
Universal Health Services Inc. Class B	1,844		76,637
WellPoint Health Networks Inc.2	5,162		504,121
			5,635,903
HOLDING COMPANIES - DIVERSIFIED – 0.02%
Leucadia National Corp.1	1,435		84,880
			84,880
HOME BUILDERS – 0.38%
Beazer Homes USA Inc.1	413		45,339
Centex Corp.	4,076		211,707
Champion Enterprises Inc.1,2	2,304		25,091
D.R. Horton Inc.	7,078		212,340
Fleetwood Enterprises Inc.1,2	1,856		23,367
Hovnanian Enterprises Inc. Class A1,2	1,144		42,946
KB Home	1,157		95,163
Lennar Corp. Class A1	4,066		182,889
Lennar Corp. Class B	310		12,797
M.D.C. Holdings Inc.	713		54,723
Monaco Coach Corp.	1,011		17,945
NVR Inc.2	187		117,249
Pulte Homes Inc.	3,352		183,958
Ryland Group Inc.1	807		76,980
Standard-Pacific Corp.	1,029		57,778
Thor Industries Inc.1	1,180		32,816
Toll Brothers Inc.1,2	1,549		71,796
Winnebago Industries Inc.1	1,142		35,859
			1,500,743
HOME FURNISHINGS – 0.18%
Ethan Allen Interiors Inc.1	1,171		44,603
Furniture Brands International Inc.	1,732		37,775
Harman International Industries Inc.	2,156		259,108
La-Z-Boy Inc.1	1,710		22,555
Leggett & Platt Inc.	6,278		176,600
Maytag Corp.1	2,502		43,535
Whirlpool Corp.	1,898		111,507
			695,683

20 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
HOUSEHOLD PRODUCTS & WARES – 0.29%
American Greetings Corp. Class A	2,035	$	53,826
Avery Dennison Corp.	3,182		193,593
Blyth Inc.	1,150		34,580
Church & Dwight Co. Inc.	1,959		53,324
Clorox Co.	4,995		272,727
Fortune Brands Inc.	4,656		339,050
Fossil Inc.2	1,320		39,283
Scotts Co. (The) Class A2	696		44,697
Tupperware Corp.1	1,748		29,174
WD-40 Co.1	566		15,998
Yankee Candle Co. Inc. (The)2	1,498		41,495
			1,117,747
HOUSEWARES – 0.06%
Newell Rubbermaid Inc.	9,034		194,773
Toro Co.	739		50,437
			245,210
INSURANCE – 4.38%
ACE Ltd.	9,154		348,401
AFLAC Inc.	16,474		591,087
Allmerica Financial Corp.2	1,743		52,464
Allstate Corp. (The)	22,670		1,090,200
Ambac Financial Group Inc.	3,482		271,805
American Financial Group Inc.	1,163		34,425
American International Group Inc.	74,670		4,533,216
American National Insurance Co.1	552		58,032
AmerUs Group Co.1	1,354		56,570
AON Corp.	8,345		170,321
Axis Capital Holdings Ltd.	3,803		95,303
Berkley (W.R.) Corp.	2,315		98,943
Brown & Brown Inc.1	1,869		78,049
Chubb Corp.	6,196		446,917
CIGNA Corp.	4,504		285,824
Cincinnati Financial Corp.	5,112		213,426
CNA Financial Corp.2	999		23,876
Commerce Group Inc.	1,018		51,521
Conseco Inc.1,2	5,081		85,158
Delphi Financial Group Inc. Class A	879		35,925
Endurance Specialty Holdings Ltd.	1,385		45,913
Erie Indemnity Co. Class A	886		44,406
Everest Re Group Ltd.	1,843		146,279
Fidelity National Financial Inc.	5,176		195,342
First American Corp.	2,670		83,277
Gallagher (Arthur J.) & Co.	3,046		85,593
Hartford Financial Services Group Inc.	9,427		551,291
HCC Insurance Holdings Inc.1	2,236		66,409
Hilb, Rogal & Hobbs Co.1	973		30,844
Horace Mann Educators Corp.	1,304		22,168
IPC Holdings Ltd.	1,180		47,743
Jefferson-Pilot Corp.	4,672		225,611
Lincoln National Corp.	5,781		253,208
Loews Corp.	4,102		245,710
Markel Corp.1,2	310		98,580
Marsh & McLennan Companies Inc.	15,983		442,090
MBIA Inc.	4,600		266,156
Mercury General Corp.	872		44,847
MetLife Inc.	13,574		520,563
MGIC Investment Corp.	3,227		207,528
Montpelier Re Holdings Ltd.	1,617		60,266
Nationwide Financial Services Inc.	1,907		65,982
Ohio Casualty Corp.1,2	1,885		39,359
Old Republic International Corp.	5,643		131,764
PartnerRe Ltd.	1,726		100,367
Philadelphia Consolidated Holding Corp.2	607		35,194
Phoenix Companies Inc.1	2,708		28,569
Platinum Underwriters Holdings Ltd.	986		28,840
PMI Group Inc. (The)	3,222		125,078
Presidential Life Corp.	726		11,601
Principal Financial Group Inc.	10,115		381,942
Progressive Corp. (The)	6,153		575,613
Protective Life Corp.	2,160		84,888
Prudential Financial Inc.	17,004		790,176
Radian Group Inc.	3,036		145,515
Reinsurance Group of America Inc.1	1,123		48,379
RenaissanceRe Holdings Ltd.1	2,166		101,412
SAFECO Corp.1	4,453		205,907
Selective Insurance Group Inc.1	864		33,765
St. Paul Travelers Companies Inc.	21,922		744,471
StanCorp Financial Group Inc.	887		66,862
Torchmark Corp.	3,574		193,067
Transatlantic Holdings Inc.1	893		52,017
Unitrin Inc.1	1,458		62,956

SCHEDULES OF INVESTMENTS 21

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
UNUMProvident Corp.1	8,817	$	120,440
White Mountains Insurance Group Ltd.1	235		119,897
Willis Group Holdings Ltd.	4,877		175,328
XL Capital Ltd. Class A	4,522		327,845
			17,102,521
INTERNET – 1.51%
Agile Software Corp.2	1,456		12,434
Akamai Technologies Inc.1,2	3,799		52,616
Amazon.com Inc.1,2	9,666		329,901
Ariba Inc.2	1,791		27,492
Ask Jeeves Inc.1,2	1,943		50,091
Avocent Corp.2	1,609		57,280
Check Point Software Technologies Ltd.1,2	5,825		131,767
CheckFree Corp.1,2	2,209		68,479
CNET Networks Inc.1,2	4,047		33,064
Digital River Inc.1,2	1,041		34,665
DoubleClick Inc.1,2	4,334		27,564
E.piphany Inc.2	2,462		10,784
EarthLink Inc.2	4,356		44,997
eBay Inc.2	16,095		1,571,033
Entrust Inc.2	1,611		5,316
eResearch Technology Inc.1,2	1,510		17,652
F5 Networks Inc.1,2	906		36,195
Google Inc. Class A1,2	713		135,973
IAC/InterActiveCorp2	16,346		353,401
Internet Security Systems Inc.2	1,582		34,424
Interwoven Inc.2	1,340		12,154
Keynote Systems Inc.2	266		3,741
Macromedia Inc.2	2,366		64,213
MatrixOne Inc.1,2	1,449		8,259
McAfee Inc.2	5,262		127,340
Monster Worldwide Inc.1,2	3,529		98,988
NetBank Inc.	1,592		14,774
NetFlix Inc.1,2	857		8,116
Openwave Systems Inc.1,2	2,087		24,564
PC-Tel Inc.2	579		4,464
Priceline.com Inc.1,2	688		13,719
RealNetworks Inc.2	3,635		17,630
RSA Security Inc.2	2,276		46,567
S1 Corp.2	2,168		20,358
SonicWALL Inc.2	1,751		8,755
Stamps.com Inc.	739		10,257
Symantec Corp.2	10,338		588,646
TIBCO Software Inc.2	5,778		56,162
United Online Inc.2	1,611		15,127
VeriSign Inc.2	8,155		218,799
Verity Inc.2	1,156		14,936
Vignette Corp.2	8,409		9,334
WatchGuard Technologies Inc.2	733		2,917
WebMD Corp.1,2	10,256		77,535
webMethods Inc.2	1,602		11,102
Yahoo! Inc.2	37,717		1,364,978
			5,878,563
IRON & STEEL – 0.16%
AK Steel Holding Corp.2	3,487		33,231
Allegheny Technologies Inc.	2,727		45,841
Carpenter Technology Corp.	599		28,429
Cleveland-Cliffs Inc.1,2	400		29,160
International Steel Group Inc.2	2,152		79,473
Nucor Corp.	4,684		197,805
Ryerson Tull Inc.1	876		14,296
Steel Dynamics Inc.1	1,524		50,597
United States Steel Corp.1	3,672		134,836
			613,668
LEISURE TIME – 0.46%
Bally Total Fitness Holding Corp.2	1,022		4,088
Brunswick Corp.	3,159		148,220
Callaway Golf Co.1	2,291		23,895
Carnival Corp.1	13,831		699,295
Harley-Davidson Inc.	9,560		550,369
Multimedia Games Inc.2	734		9,689
Nautilus Group Inc. (The)2	1,154		22,676
Polaris Industries Inc.1	1,482		87,957
Royal Caribbean Cruises Ltd.	3,166		147,536
Sabre Holdings Corp.	4,415		94,967
WMS Industries Inc.1,2	548		16,029
			1,804,721
LODGING – 0.46%
Aztar Corp.2	1,140		35,283
Caesars Entertainment Inc.2	8,529		152,669
Harrah’s Entertainment Inc.	3,660		214,183
Hilton Hotels Corp.	12,371		246,183

22 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
La Quinta Corp.2	4,919	$	39,598
Mandalay Resort Group	2,163		148,814
Marriott International Inc. Class A	6,085		331,572
MGM Mirage2	2,000		107,600
Starwood Hotels & Resorts Worldwide Inc.	6,694		319,505
Station Casinos Inc.1	1,482		75,508
Wynn Resorts Ltd.1,2	1,954		113,625
			1,784,540
MACHINERY – 0.62%
AGCO Corp.2	3,078		59,775
Albany International Corp. Class A	852		25,577
Astec Industries Inc.2	435		6,303
Briggs & Stratton Corp.	723		51,919
Caterpillar Inc.	11,220		903,659
Cognex Corp.	1,304		33,382
Cummins Inc.1	1,161		81,363
Deere & Co.	8,112		484,935
Flowserve Corp.2	1,748		37,722
Graco Inc.	2,214		76,162
IDEX Corp.	1,721		63,505
Joy Global Inc.	1,633		55,179
Kadant Inc.2	445		8,032
Manitowoc Co. Inc. (The)	862		30,429
Nordson Corp.	860		30,117
Presstek Inc.2	1,032		10,434
Rockwell Automation Inc.	5,451		227,252
Stewart & Stevenson Services Inc.1	875		14,875
Terex Corp.2	1,635		62,130
Unova Inc.2	1,403		21,536
Zebra Technologies Corp. Class A2	2,317		122,778
			2,407,064
MANUFACTURING – 5.31%
Actuant Corp. Class A1,2	848		33,640
Acuity Brands Inc.	1,306		34,648
AptarGroup Inc.	1,167		54,756
Brink’s Co. (The)	1,752		56,239
Carlisle Companies Inc.	1,007		58,537
CLARCOR Inc.	754		37,172
Cooper Industries Ltd.	3,026		193,361
Crane Co.	2,025		56,437
Danaher Corp.	8,289		456,973
Donaldson Co. Inc.1	2,562		76,091
Dover Corp.	6,648		261,067
Eastman Kodak Co.1	9,405		284,783
Eaton Corp.	4,986		318,855
General Electric Co.	344,291		11,747,209
Harsco Corp.	1,311		63,518
Honeywell International Inc.	25,640		863,555
Illinois Tool Works Inc.	8,506		784,934
Ingersoll-Rand Co. Class A	5,773		395,104
ITT Industries Inc.	3,052		247,639
Jacuzzi Brands Inc.2	2,587		22,378
Lancaster Colony Corp.	828		35,587
Matthews International Corp. Class A	1,056		35,381
Pall Corp.	4,190		108,353
Pentair Inc.	3,218		120,289
Roper Industries Inc.	1,131		69,737
SPX Corp.1	2,487		95,376
Teleflex Inc.	1,141		49,964
Textron Inc.	3,800		258,970
3M Co.	23,474		1,820,878
Tredegar Corp.1	865		14,489
Trinity Industries Inc.1	1,280		39,885
Tyco International Ltd.	65,360		2,035,964
			20,731,769
MEDIA – 3.69%
Belo (A.H.) Corp.	3,188		74,121
Cablevision Systems Corp.1,2	6,595		135,725
Charter Communications Inc. Class A1,2	8,288		20,886
Clear Channel Communications Inc.	17,655		589,677
Comcast Corp. Class A2	41,136		1,213,512
Comcast Corp. Class A Special1,2	28,392		824,504
Cox Communications Inc. Class A2	6,670		229,715
Cox Radio Inc. Class A1,2	1,151		18,301
Cumulus Media Inc. Class A1,2	1,741		28,291
DIRECTV Group Inc. (The)2	29,623		496,778
Dow Jones & Co. Inc.1	1,533		67,835
EchoStar Communications Corp.2	7,151		226,115
Emmis Communications Corp.2	1,583		29,602
Entercom Communications Corp.2	1,331		44,189
Fox Entertainment Group Inc. Class A2	5,661		167,905

SCHEDULES OF INVESTMENTS 23

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
Gannett Co. Inc.	8,848	$	733,942
Gemstar-TV Guide International Inc.2	7,400		42,550
Hearst-Argyle Television Inc.	851		22,177
Hollinger International Inc.	1,720		30,702
Insight Communications Co. Inc.1,2	1,732		14,653
Knight Ridder Inc.	2,662		182,427
Lee Enterprises Inc.	1,154		53,453
Liberty Media Corp. Class A	80,792		720,665
Liberty Media International Inc. Class A2	4,414		159,125
McClatchy Co. (The) Class A	688		47,816
McGraw-Hill Companies Inc. (The)	6,246		538,717
Media General Inc. Class A	717		41,801
Meredith Corp.	1,275		62,475
New York Times Co. Class A	4,669		186,993
Radio One Inc. Class D2	2,316		34,022
Readers Digest Association Inc. (The)	2,551		35,918
Scholastic Corp.1,2	815		24,711
Scripps (E.W.) Co. Class A	2,592		123,690
Sinclair Broadcast Group Inc. Class A	1,316		9,212
Sirius Satellite Radio Inc.1,2	39,247		153,063
Time Warner Inc.2	143,705		2,391,251
Tribune Co.	6,932		299,462
UnitedGlobalCom Inc. Class A2	11,338		84,808
Univision Communications Inc. Class A2	8,203		253,965
Viacom Inc. Class A1	1,198		44,398
Viacom Inc. Class B	48,749		1,778,851
Walt Disney Co. (The)	66,736		1,683,082
Washington Post Co. (The) Class B	195		178,425
Westwood One Inc.2	2,555		58,969
Wiley (John) & Sons Inc. Class A	1,254		40,692
XM Satellite Radio Holdings Inc. Class A1,2	6,577		212,569
Young Broadcasting Inc. Class A2	571		6,566
			14,418,306
METAL FABRICATE & HARDWARE – 0.08%
Kaydon Corp.1	1,015		30,044
Mueller Industries Inc.	1,056		28,153
Precision Castparts Corp.	2,050		123,000
Timken Co. (The)1	2,758		66,192
Worthington Industries Inc.1	2,449		48,613
			296,002
MINING – 0.57%
Alcoa Inc.	28,472		925,340
Coeur d’Alene Mines Corp.1,2	7,037		34,833
Freeport-McMoRan Copper & Gold Inc.1	5,594		202,615
Meridian Gold Inc.1,2	3,457		58,423
Newmont Mining Corp.	13,275		630,828
Owens & Minor Inc.	1,157		30,302
Owens-Illinois Inc.2	3,288		60,927
Phelps Dodge Corp.	3,016		264,021
RTI International Metals Inc.2	579		11,597
Stillwater Mining Co.2	1,309		16,179
			2,235,065
OFFICE & BUSINESS EQUIPMENT – 0.20%
IKON Office Solutions Inc.	4,207		44,173
Imagistics International Inc.1,2	462		15,902
Pitney Bowes Inc.	7,704		337,050
Xerox Corp.1,2	27,155		401,079
			798,204
OFFICE FURNISHINGS – 0.04%
Herman Miller Inc.	2,299		53,107
HNI Corp.	1,623		65,569
Interface Inc. Class A2	1,602		13,921
Steelcase Inc. Class A1	1,554		20,357
			152,954
OIL & GAS – 6.20%
Amerada Hess Corp.	2,718		219,370
Anadarko Petroleum Corp.	8,128		548,234
Apache Corp.	10,670		540,969
Atwood Oceanics Inc.2	502		24,071
Burlington Resources Inc.	12,870		534,105
Cabot Oil & Gas Corp.	1,018		43,072
Chesapeake Energy Corp.1	8,854		142,372
ChevronTexaco Corp.	69,833		3,705,339
Cimarex Energy Co.2	1,357		48,689
ConocoPhillips	20,338		1,714,697
Denbury Resources Inc.2	1,670		41,416
Devon Energy Corp.	7,484		553,591
Diamond Offshore Drilling Inc.1	2,101		71,014
ENSCO International Inc.	4,909		149,970
EOG Resources Inc.	3,899		259,517
Exxon Mobil Corp.	213,269		10,497,100

24 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
Forest Oil Corp.2	1,785	$	54,442
GlobalSantaFe Corp.	6,084		179,478
Grey Wolf Inc.1,2	6,222		32,230
Helmerich & Payne Inc.	1,466		41,854
Houston Exploration Co.1,2	631		36,977
Kerr-McGee Corp.	4,087		242,032
Marathon Oil Corp.	11,209		427,175
Murphy Oil Corp.	2,880		230,458
Nabors Industries Ltd.2	4,761		233,860
Newfield Exploration Co.2	1,957		113,897
Noble Corp.2	4,272		195,145
Noble Energy Inc.	1,926		111,708
Occidental Petroleum Corp.	12,776		713,284
Parker Drilling Co.2	3,333		12,999
Patina Oil & Gas Corp.	2,288		65,437
Patterson-UTI Energy Inc.	5,625		108,169
Pioneer Natural Resources Co.	5,041		163,328
Plains Exploration & Production Co.2	2,397		59,925
Pogo Producing Co.	1,809		82,943
Premcor Inc.2	2,620		102,285
Pride International Inc.2	3,905		72,164
Rowan Companies Inc.2	3,630		92,674
Stone Energy Corp.2	867		35,694
Sunoco Inc.	2,473		183,892
Tesoro Petroleum Corp.2	2,017		61,075
Transocean Inc.2	10,481		369,455
Unit Corp.1,2	1,307		48,477
Unocal Corp.	8,525		355,919
Valero Energy Corp.	8,322		357,596
Vintage Petroleum Inc.	1,727		36,267
XTO Energy Inc.1	8,548		285,332
			24,199,697
OIL & GAS SERVICES – 0.93%
Baker Hughes Inc.	10,778		461,622
BJ Services Co.	5,223		266,373
Cooper Cameron Corp.2	1,836		88,771
Core Laboratories NV2	1,025		25,420
FMC Technologies Inc.2	1,941		58,676
Global Industries Ltd.2	2,175		14,594
Grant Prideco Inc.2	3,581		73,625
Halliburton Co.	14,503		537,191
Hanover Compressor Co.1,2	1,881		24,491
Input/Output Inc.1,2	2,486		17,377
Key Energy Services Inc.2	4,046		46,529
Lone Star Technologies Inc.2	870		22,968
Maverick Tube Corp.2	1,313		34,624
National-Oilwell Inc.1,2	2,752		92,770
Newpark Resources Inc.1,2	2,328		12,641
Oceaneering International Inc.2	730		25,951
Schlumberger Ltd.	19,249		1,211,532
Seacor Holdings Inc.1,2	542		25,805
Smith International Inc.1,2	3,353		194,742
Superior Energy Services Inc.2	2,163		27,881
Tidewater Inc.	1,606		49,674
Varco International Inc.2	3,327		92,091
Veritas DGC Inc.2	1,019		21,501
Weatherford International Ltd.1,2	4,303		224,875
			3,651,724
PACKAGING & CONTAINERS – 0.21%
Ball Corp.	3,424		136,446
Bemis Co. Inc.	3,424		90,633
Chesapeake Corp.1	472		10,955
Crown Holdings Inc.2	5,013		56,898
Packaging Corp. of America	2,028		44,474
Pactiv Corp.2	5,283		125,154
Sealed Air Corp.2	2,773		137,374
Smurfit-Stone Container Corp.	8,053		139,800
Sonoco Products Co.	3,174		84,587
			826,321
PHARMACEUTICALS – 5.82%
Abbott Laboratories1	50,983		2,173,405
Abgenix Inc.2	2,474		22,538
Accelrys Inc.2	721		4,153
Accredo Health Inc.2	1,618		37,263
Alkermes Inc.1,2	2,754		34,067
Allergan Inc.	4,341		310,642
Alpharma Inc. Class A	1,446		24,510
American Pharmaceutical Partners Inc.1,2	1,188		33,169
AmerisourceBergen Corp.	3,663		201,612
Amylin Pharmaceuticals Inc.1,2	2,626		55,934
Andrx Corp.2	2,435		52,693
Barr Pharmaceuticals Inc.2	2,889		108,771

SCHEDULES OF INVESTMENTS 25

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
Bristol-Myers Squibb Co.	63,573	$	1,489,515
Cardinal Health Inc.	13,976		653,378
Caremark Rx Inc.2	15,073		451,738
Cell Therapeutics Inc.1,2	2,069		12,828
Cephalon Inc.1,2	1,871		89,191
Cubist Pharmaceuticals Inc.1,2	1,481		15,114
CV Therapeutics Inc.1,2	887		14,840
Express Scripts Inc.2	2,046		130,944
Forest Laboratories Inc.2	12,064		538,054
Gilead Sciences Inc.2	13,915		481,876
Hospira Inc.2	5,112		163,124
ImClone Systems Inc.1,2	2,212		96,886
Impax Laboratories Inc.2	1,404		20,723
IVAX Corp.1,2	6,905		124,981
King Pharmaceuticals Inc.2	7,836		85,491
Ligand Pharmaceuticals Inc. Class B1,2	2,284		20,362
Lilly (Eli) & Co.	31,536		1,731,642
Medarex Inc.1,2	2,311		17,587
Medco Health Solutions Inc.2	8,926		302,681
Medicines Co. (The)1,2	1,430		38,095
Medicis Pharmaceutical Corp. Class A	1,721		69,993
Merck & Co. Inc.	72,449		2,268,378
MGI Pharma Inc.1,2	2,362		62,995
Mylan Laboratories Inc.1	8,890		153,086
Nabi Biopharmaceuticals2	1,635		22,645
NBTY Inc.2	2,081		57,311
Neurocrine Biosciences Inc.2	1,119		52,089
Noven Pharmaceuticals Inc.2	739		16,664
NPS Pharmaceuticals Inc.1,2	1,283		21,914
Omnicare Inc.	3,324		91,709
Onyx Pharmaceuticals Inc.2	1,024		28,733
OSI Pharmaceuticals Inc.1,2	1,261		81,940
Par Pharmaceutical Companies Inc.2	1,132		44,657
Perrigo Co.1	2,041		37,105
Pfizer Inc.	246,275		7,129,661
Priority Healthcare Corp. Class B2	1,153		20,823
Schering-Plough Corp.	47,872		866,962
Sepracor Inc.1,2	2,879		132,232
Taro Pharmaceutical Industries Ltd.1,2	862		22,903
Trimeris Inc.2	553		6,365
United Therapeutics Inc.1,2	598		18,693
Valeant Pharmaceuticals International	2,751		66,024
VCA Antech Inc.1,2	2,758		61,834
Vicuron Pharmaceuticals Inc.2	1,935		27,129
Watson Pharmaceuticals Inc.2	3,612		101,244
Wyeth	43,581		1,727,987
			22,728,883
PIPELINES – 0.26%
Dynegy Inc. Class A2	9,024		44,488
El Paso Corp.	20,198		180,570
Equitable Resources Inc.	1,936		107,061
Kinder Morgan Inc.	3,201		206,048
National Fuel Gas Co.1	2,612		73,188
Questar Corp.	2,748		131,904
Western Gas Resources Inc.	1,838		53,835
Williams Companies Inc.	16,742		209,442
			1,006,536
REAL ESTATE – 0.04%
LNR Property Corp.	715		44,716
St. Joe Co. (The)	2,370		120,633
			165,349
REAL ESTATE INVESTMENT TRUSTS – 1.91%
Alexandria Real Estate Equities Inc.	579		38,243
AMB Property Corp.	2,766		103,725
American Financial Realty Trust	3,432		50,450
Annaly Mortgage Management Inc.1	3,858		69,367
Apartment Investment & Management Co. Class A	3,090		113,372
Archstone-Smith Trust	6,309		211,667
Arden Realty Group Inc.	2,035		69,353
AvalonBay Communities Inc.	2,290		149,926
Boston Properties Inc.	3,462		206,751
Brandywine Realty Trust	1,881		55,339
BRE Properties Inc. Class A	1,557		62,124
Camden Property Trust	1,334		60,564
Capital Automotive REIT	1,141		36,809
CarrAmerica Realty Corp.1	1,723		55,532
Catellus Development Corp.	2,717		78,358
CBL & Associates Properties Inc.1	977		64,042
CenterPoint Properties Trust	1,480		68,524
Colonial Properties Trust1	822		32,042
Cousins Properties Inc.	1,309		48,721

26 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
Crescent Real Estate Equities Co.	3,151	$	50,448
CRT Properties Inc.	854		18,925
Developers Diversified Realty Corp.1	3,432		143,458
Duke Realty Corp.	4,747		161,873
Equity Inns Inc.	1,299		12,340
Equity Office Properties Trust	12,998		365,504
Equity Residential	9,076		302,685
Essex Property Trust Inc.1	678		53,196
Federal Realty Investment Trust	1,640		77,818
FelCor Lodging Trust Inc.2	1,434		16,663
First Industrial Realty Trust Inc.1	1,342		51,801
Gables Residential Trust1	950		34,675
General Growth Properties Inc.	6,993		230,699
General Growth Properties Inc. Warrants (Expiring 11/9/04)3	699		—
Glenborough Realty Trust Inc.	994		20,874
Health Care Property Investors Inc.	4,418		122,953
Health Care REIT Inc.1	1,569		56,484
Healthcare Realty Trust Inc.	1,586		63,995
Highwoods Properties Inc.1	1,746		43,318
Home Properties Inc.1	1,164		47,899
Hospitality Properties Trust	2,107		90,285
Host Marriott Corp.2	10,260		149,283
HRPT Properties Trust	5,675		63,503
Impac Mortgage Holdings Inc.1	2,016		45,582
iStar Financial Inc.	3,590		148,698
Kilroy Realty Corp.1	836		33,231
Kimco Realty Corp.	3,073		167,632
Liberty Property Trust	2,852		115,649
Macerich Co. (The)1	1,999		119,440
Mack-Cali Realty Corp.	1,887		83,349
Manufactured Home Communities Inc.1	599		20,660
Meristar Hospitality Corp.2	2,928		17,100
Mills Corp.1	1,699		94,210
Nationwide Health Properties Inc.	2,020		45,591
New Century Financial Corp.1	1,614		89,012
New Plan Excel Realty Trust Inc.1	3,339		87,348
Novastar Financial Inc.1	816		35,316
Pan Pacific Retail Properties Inc.1	1,277		72,342
Pennsylvania Real Estate Investment Trust	998		40,469
Plum Creek Timber Co. Inc.	5,845		212,115
Post Properties Inc.	1,186		38,059
Prentiss Properties Trust	1,163		41,845
ProLogis	5,983		233,217
Public Storage Inc.	2,890		151,002
Rayonier Inc.	1,530		72,522
Realty Income Corp.	1,202		57,684
Reckson Associates Realty Corp.	2,175		66,011
Redwood Trust Inc.	771		46,383
Regency Centers Corp.	2,003		97,867
Rouse Co. (The)	3,333		222,311
Shurgard Storage Centers Inc. Class A	1,483		58,875
Simon Property Group Inc.	7,188		419,204
SL Green Realty Corp.	1,194		65,455
Taubman Centers Inc.1	1,640		47,068
Thornburg Mortgage Inc.1	2,613		74,653
Trizec Properties Inc.	3,170		50,561
United Dominion Realty Trust Inc.	4,017		84,678
Ventas Inc.	2,727		73,356
Vornado Realty Trust1	3,797		255,158
Washington Real Estate Investment Trust1	1,401		44,061
Weingarten Realty Investors	2,672		96,620
			7,477,922
RETAIL – 6.33%
Abercrombie & Fitch Co. Class A	3,155		123,613
Advance Auto Parts Inc.2	2,342		91,619
Aeropostale Inc.2	1,749		55,181
American Eagle Outfitters Inc.	1,574		64,345
AnnTaylor Stores Corp.2	2,199		49,390
Applebee’s International Inc.	2,800		64,036
AutoNation Inc.1,2	6,208		106,964
AutoZone Inc.2	2,115		173,028
Barnes & Noble Inc.2	1,758		58,489
Bed Bath & Beyond Inc.2	9,752		397,784
Best Buy Co. Inc.	8,695		514,918
Big Lots Inc.1,2	3,899		48,309
BJ’s Wholesale Club Inc.1,2	2,170		62,995
Bob Evans Farms Inc.1	1,171		27,917
Borders Group Inc.	2,623		59,778
Brinker International Inc.2	3,014		97,352

SCHEDULES OF INVESTMENTS 27

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
CarMax Inc.1,2	3,496	$	92,085
Casey’s General Store Inc.1	1,599		28,462
Cato Corp. Class A	574		13,179
CBRL Group Inc.	1,557		56,457
CEC Entertainment Inc.2	1,086		41,290
Charming Shoppes Inc.1,2	3,642		27,788
Cheesecake Factory (The)1,2	1,780		77,270
Chico’s FAS Inc.1,2	2,892		115,767
Children’s Place Retail Stores Inc. (The)2	476		14,694
Christopher & Banks Corp.1	1,151		18,704
Circuit City Stores Inc.	6,188		100,555
Claire’s Stores Inc.	2,600		67,652
Copart Inc.2	2,092		38,869
Cost Plus Inc.1,2	715		23,094
Costco Wholesale Corp.	15,035		720,778
CVS Corp.	12,850		558,461
Darden Restaurants Inc.	4,810		117,845
Dillard’s Inc. Class A	2,128		43,603
Dollar General Corp.	10,108		194,579
Dollar Tree Stores Inc.2	3,773		109,040
Dress Barn Inc.2	568		9,105
Family Dollar Stores Inc.	5,031		148,666
Federated Department Stores Inc.	5,877		296,495
Foot Locker Inc.	4,644		113,314
Fred’s Inc.1	998		17,495
Gap Inc. (The)	21,183		423,236
Genesco Inc.1,2	713		18,253
Guitar Center Inc.2	752		33,562
Hollywood Entertainment Corp.2	1,861		18,089
Home Depot Inc.	72,360		2,972,549
Hot Topic Inc.1,2	1,455		29,915
IHOP Corp.1	710		27,193
Insight Enterprises Inc.2	1,452		26,942
Jack in the Box Inc.1,2	1,308		43,648
Kenneth Cole Productions Inc. Class A	295		7,818
Kmart Holding Corp.2	1,183		108,883
Kohl’s Corp.2	9,860		500,494
Krispy Kreme Doughnuts Inc.1,2	1,981		20,999
Limited Brands Inc.	14,250		353,115
Linens ‘n Things Inc.1,2	1,358		32,701
Lone Star Steakhouse & Saloon Inc.	590		14,225
Longs Drug Stores Corp.1	1,115		27,541
Lowe’s Companies Inc.	23,221		1,306,878
May Department Stores Co. (The)	9,362		243,974
McDonald’s Corp.	41,187		1,200,601
Men’s Wearhouse Inc. (The)1,2	1,224		38,042
Michaels Stores Inc.	4,362		126,934
MSC Industrial Direct Co. Inc. Class A	1,287		43,938
Neiman-Marcus Group Inc. Class A1	972		59,127
99 Cents Only Stores1,2	1,617		24,918
Nordstrom Inc.	3,336		144,048
Nu Skin Enterprises Inc. Class A1	1,755		33,942
Office Depot Inc.2	10,308		166,887
O’Reilly Automotive Inc.1,2	1,724		74,235
Outback Steakhouse Inc.1	2,422		95,887
P.F. Chang’s China Bistro Inc.1,2	730		37,113
Pacific Sunwear of California Inc.2	2,598		60,897
Panera Bread Co. Class A1,2	912		31,856
Papa John’s International Inc.1,2	312		10,071
Payless ShoeSource Inc.1,2	2,190		20,827
Penney (J.C.) Co. Inc. (Holding Co.)	9,228		319,197
Pep Boys-Manny, Moe & Jack Inc.	2,049		29,137
PETCO Animal Supplies Inc.2	1,263		45,178
PETsMART Inc.1	4,803		153,600
Pier 1 Imports Inc.	2,408		43,224
RadioShack Corp.	5,272		157,791
Regis Corp.	1,470		62,916
Rite Aid Corp.2	14,310		53,233
Ross Stores Inc.1	5,022		131,928
Ruby Tuesday Inc.1	2,176		53,747
Ryan’s Restaurant Group Inc.2	1,593		22,286
Saks Inc.	4,041		49,381
Sears, Roebuck and Co.	6,334		221,690
ShopKo Stores Inc.1,2	873		15,051
Sonic Corp.2	1,963		53,453
Sports Authority Inc. (The)2	720		17,410
Staples Inc.	16,076		478,100
Starbucks Corp.2	12,941		684,320
Stein Mart Inc.2	877		14,576
Talbots Inc. (The)	703		18,552
Target Corp.	26,954		1,348,239
Tiffany & Co.	4,888		143,365

28 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
TJX Companies Inc.	16,288	$	390,586
Toys R Us Inc.2	6,966		125,458
Tractor Supply Co.1,2	1,229		44,588
Triarc Companies Inc. Class B1	900		10,287
Tuesday Morning Corp.1,2	826		26,961
Urban Outfitters Inc.1,2	1,860		76,260
Walgreen Co.	33,316		1,195,711
Wal-Mart Stores Inc.	86,026		4,638,522
Wendy’s International Inc.	3,393		113,224
Williams-Sonoma Inc.2	3,065		116,991
Yum! Brands Inc.	9,562		415,947
Zale Corp.1,2	1,774		50,594
			24,741,806
SAVINGS & LOANS – 0.75%
Anchor BanCorp Wisconsin Inc.	723		18,755
Astoria Financial Corp.	2,352		91,940
Commercial Federal Corp.	1,396		38,823
Dime Community Bancshares	1,051		16,879
Downey Financial Corp.	723		39,953
First Niagara Financial Group Inc.	2,249		31,351
FirstFed Financial Corp.2	571		29,349
Golden West Financial Corp.	4,954		579,222
Harbor Florida Bancshares Inc.1	709		22,716
Hudson City Bancorp Inc.	2,317		84,663
Independence Community Bank Corp.	2,565		96,521
MAF Bancorp Inc.1	1,150		49,301
New York Community Bancorp Inc.1	7,664		140,711
OceanFirst Financial Corp.1	436		10,394
People’s Bank1	3,036		113,820
PFF Bancorp Inc.	405		15,977
Provident Financial Services Inc.1	2,533		45,594
Sovereign Bancorp Inc.	11,195		242,372
Washington Federal Inc.1	2,667		68,062
Washington Mutual Inc.	28,408		1,099,674
Webster Financial Corp.	1,649		78,822
			2,914,899
SEMICONDUCTORS – 3.18%
Actel Corp.2	858		13,016
Advanced Micro Devices Inc.2	11,470		192,925
Agere Systems Inc. Class A2	27,525		33,305
Agere Systems Inc. Class B2	30,324		34,873
Altera Corp.2	12,518		284,534
Amkor Technology Inc.2	2,771		13,800
Analog Devices Inc.	12,083		486,462
Applied Materials Inc.2	55,474		893,131
Applied Micro Circuits Corp.2	10,140		36,910
Asyst Technologies Inc.2	1,178		6,308
Atmel Corp.2	14,642		46,562
ATMI Inc.2	1,010		23,584
Axcelis Technologies Inc.2	3,327		28,612
Broadcom Corp. Class A1,2	8,556		231,440
Brooks Automation Inc.1,2	1,444		21,487
Cirrus Logic Inc.2	2,467		12,458
Cohu Inc.	579		9,079
Conexant Systems Inc.2	15,427		26,689
Credence Systems Corp.1,2	2,780		20,989
Cree Inc.1,2	2,467		85,136
Cypress Semiconductor Corp.2	3,905		41,120
DSP Group Inc.2	871		17,272
DuPont Photomasks Inc.1,2	450		11,799
Emulex Corp.2	2,756		28,966
ESS Technology Inc.1,2	1,002		6,553
Exar Corp.2	1,308		19,646
Fairchild Semiconductor International Inc. Class A2	3,862		55,497
Helix Technology Corp.	883		12,397
Integrated Circuit Systems Inc.2	2,431		54,819
Integrated Device Technology Inc.2	3,495		41,311
Intel Corp.	209,293		4,658,862
International Rectifier Corp.2	2,243		89,159
Intersil Corp. Class A	4,512		73,636
KLA-Tencor Corp.2	6,386		290,755
Kopin Corp.2	2,187		8,004
Kulicke & Soffa Industries Inc.1,2	1,584		11,310
Lam Research Corp.2	4,191		109,092
Lattice Semiconductor Corp.2	3,336		16,580
Linear Technology Corp.	10,036		380,164
LSI Logic Corp.2	12,314		56,029
LTX Corp.2	2,213		14,385
Marvell Technology Group Ltd.2	6,218		177,648
Maxim Integrated Products Inc.	10,410		457,936
Micrel Inc.1,2	2,308		25,919

SCHEDULES OF INVESTMENTS 29

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
Microchip Technology Inc.	6,564	$	198,561
Micron Technology Inc.2	19,778		240,896
Mindspeed Technologies Inc.1,2	2,866		6,792
Mykrolis Corp.2	1,324		13,915
National Semiconductor Corp.2	11,768		196,526
Novellus Systems Inc.2	4,957		128,436
NVIDIA Corp.2	5,067		73,319
OmniVision Technologies Inc.1,2	1,688		26,839
Photronics Inc.1,2	880		15,444
PMC-Sierra Inc.2	5,879		60,319
Power Integrations Inc.2	999		21,379
QLogic Corp.2	3,086		100,295
Rambus Inc.2	3,243		55,715
Semtech Corp.2	2,361		49,298
Silicon Image Inc.2	2,160		29,592
Silicon Laboratories Inc.1,2	1,407		42,168
Siliconix Inc.2	149		6,170
Skyworks Solutions Inc.1,2	5,488		48,788
Teradyne Inc.2	6,387		105,769
Texas Instruments Inc.	56,597		1,383,797
Transmeta Corp.1,2	3,737		7,810
TriQuint Semiconductor Inc.1,2	4,055		14,436
Ultratech Inc.2	829		14,110
Varian Semiconductor Equipment Associates Inc.1,2	1,148		39,732
Veeco Instruments Inc.1,2	870		17,000
Vitesse Semiconductor Corp.2	6,654		18,099
Xilinx Inc.	11,291		345,505
Zoran Corp.2	1,289		13,006
			12,433,875
SOFTWARE – 4.59%
Activision Inc.2	4,362		63,162
Actuate Corp.2	2,027		5,017
Acxiom Corp.1	2,716		67,900
Adobe Systems Inc.	7,736		433,448
Advent Software Inc.2	1,023		21,340
Ascential Software Corp.2	1,919		27,039
Autodesk Inc.	3,649		192,485
Automatic Data Processing Inc.	19,186		832,481
Avid Technology Inc.1,2	1,012		53,616
BEA Systems Inc.2	12,770		103,692
BMC Software Inc.2	7,359		139,232
Borland Software Corp.2	2,616		26,788
Cerner Corp.1,2	880		39,732
Certegy Inc.	1,984		70,134
Citrix Systems Inc.2	5,381		129,844
Computer Associates International Inc.	15,215		421,608
Compuware Corp.2	10,905		63,140
CSG Systems International Inc.2	1,727		29,031
Dendrite International Inc.2	1,292		18,928
Dun & Bradstreet Corp.2	2,318		131,106
eFunds Corp.2	1,590		31,307
Electronic Arts Inc.2	9,666		434,197
Fair Isaac Corp.	2,213		66,833
FileNET Corp.2	1,168		32,505
First Data Corp.	28,048		1,157,821
Fiserv Inc.2	6,373		226,496
Global Payments Inc.	1,158		63,412
Hyperion Solutions Corp.2	1,169		46,912
IDX Systems Corp.2	597		20,020
IMS Health Inc.	7,922		167,788
Informatica Corp.2	2,886		22,540
Inter-Tel Inc.	706		19,062
Intuit Inc.2	5,665		256,964
JDA Software Group Inc.2	1,056		11,859
Keane Inc.2	1,887		29,833
Manugistics Group Inc.2	1,902		4,850
Mercury Interactive Corp.2	3,008		130,637
Micromuse Inc.2	2,297		9,854
Microsoft Corp.	334,361		9,358,764
MRO Software Inc.2	579		6,311
NDCHealth Corp.1	1,150		19,309
NetIQ Corp.1,2	1,749		22,177
Novell Inc.2	12,314		88,538
Oracle Corp.2	128,971		1,632,773
Packeteer Inc.2	1,012		12,488
Parametric Technology Corp.2	8,986		46,637
PeopleSoft Inc.2	10,738		223,028
Pixar Inc.1,2	757		60,878
Quest Software Inc.1,2	1,727		25,335
Red Hat Inc.1,2	5,501		70,633
Retek Inc.2	1,613		8,904

30 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
Safeguard Scientifics Inc.2	3,777	$	6,308
SEI Investments Co.1	2,312		83,209
SERENA Software Inc.1,2	1,167		20,703
Siebel Systems Inc.2	14,749		140,116
Sybase Inc.2	3,301		52,255
Take-Two Interactive Software Inc.1,2	1,411		46,507
THQ Inc.1,2	1,304		24,646
Total System Services Inc.	1,297		30,609
Veritas Software Corp.2	14,103		308,574
Wind River Systems Inc.2	2,334		31,252
			17,922,567
TELECOMMUNICATIONS – 5.95%
Adaptec Inc.1,2	3,495		27,261
ADC Telecommunications Inc.2	26,408		58,362
ADTRAN Inc.	1,450		31,320
Advanced Fibre Communications Inc.2	2,755		43,033
Aeroflex Inc.2	2,168		24,065
Alltel Corp.	10,074		553,365
Amdocs Ltd.2	5,189		130,503
American Tower Corp. Class A1,2	7,049		121,172
Anaren Inc.2	742		9,086
Andrew Corp.2	5,098		71,270
Arris Group Inc.1,2	1,750		8,138
Aspect Communications Corp.2	1,060		10,086
AT&T Corp.	25,473		435,843
Audiovox Corp. Class A1,2	579		8,338
Avaya Inc.2	13,647		196,517
BellSouth Corp.	59,821		1,595,426
Black Box Corp.1	595		23,372
C-COR Inc.2	1,652		12,423
CenturyTel Inc.	4,148		133,109
CIENA Corp.2	18,338		45,295
Cincinnati Bell Inc.2	8,118		27,682
Cisco Systems Inc.2	220,620		4,238,110
Citizens Communications Co.	9,564		128,158
CommScope Inc.1,2	1,298		23,377
Computer Network Technology Corp.1,2	1,008		4,163
Comverse Technology Inc.2	6,070		125,285
Corning Inc.2	45,652		522,715
Crown Castle International Corp.1,2	7,339		112,360
Extreme Networks Inc.2	3,901		22,821
Finisar Corp.1,2	4,787		7,037
Foundry Networks Inc.2	3,644		44,202
Harmonic Inc.2	2,019		16,798
Harris Corp.	2,205		135,674
IDT Corp.2	865		11,357
IDT Corp. Class B1,2	1,577		21,794
InterDigital Communications Corp.1,2	1,743		27,714
JDS Uniphase Corp.2	43,762		138,726
Juniper Networks Inc.2	15,995		425,627
Level 3 Communications Inc.1,2	20,308		68,235
Lucent Technologies Inc.1,2	139,943		496,798
MCI Inc.	8,112		139,932
Motorola Inc.	76,183		1,314,919
MRV Communications Inc.1,2	2,746		9,529
Newport Corp.2	1,300		14,677
Nextel Communications Inc. Class A2	35,286		934,726
Nextel Partners Inc. Class A1,2	1,072		18,052
NII Holdings Inc. Class B1,2	1,822		80,660
NTL Inc.2	2,281		151,709
Plantronics Inc.	1,472		64,032
Polycom Inc.2	3,307		68,290
Powerwave Technologies Inc.2	2,544		19,004
QUALCOMM Inc.	53,013		2,216,474
Qwest Communications International Inc.2	46,300		158,346
REMEC Inc.1,2	2,050		11,296
RF Micro Devices Inc.1,2	6,407		41,710
SBC Communications Inc.	107,815		2,723,407
Scientific-Atlanta Inc.	5,057		138,511
SpectraSite Inc.1,2	1,462		75,001
Sprint Corp. (FON Group)	40,928		857,442
Stratex Networks Inc.2	2,606		4,730
Sycamore Networks Inc.2	6,382		23,422
Tekelec2	2,000		44,640
Telephone & Data Systems Inc.	1,698		127,180
Tellabs Inc.1,2	12,600		100,800
3Com Corp.2	12,490		51,708
Tollgrade Communications Inc.2	436		4,146
United States Cellular Corp.2	589		24,532
UTStarcom Inc.1,2	3,393		58,088
Verizon Communications Inc.	90,343		3,532,411

SCHEDULES OF INVESTMENTS 31

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
Western Wireless Corp. Class A2	2,646	$	77,104
Wireless Facilities Inc.1,2	1,773		13,085
			23,236,180
TEXTILES – 0.09%
Cintas Corp.	4,478		193,181
G&K Services Inc. Class A1	710		27,896
Mohawk Industries Inc.1,2	1,732		147,359
			368,436
TOYS, GAMES & HOBBIES – 0.10%
Hasbro Inc.	5,182		91,670
Jakks Pacific Inc.1,2	733		11,552
Marvel Enterprises Inc.1,2	2,602		40,071
Mattel Inc.	13,273		232,410
			375,703
TRANSPORTATION – 1.34%
Alexander & Baldwin Inc.	1,305		47,835
Arkansas Best Corp.1	730		28,536
Burlington Northern Santa Fe Corp.	12,039		503,351
CH Robinson Worldwide Inc.1	2,586		139,489
CNF Inc.	1,600		70,048
CSX Corp.	6,976		254,624
EGL Inc.1,2	1,170		37,417
Expeditors International Washington Inc.1	3,486		199,051
FedEx Corp.	9,742		887,691
Hunt (J.B.) Transport Services Inc.	2,192		89,565
Kansas City Southern Industries Inc.1,2	2,155		36,527
Landstar System Inc.1,2	1,056		71,745
Norfolk Southern Corp.	12,888		437,548
Offshore Logistics Inc.2	746		26,975
Overseas Shipholding Group Inc.	936		53,305
Ryder System Inc.	2,055		102,956
SCS Transportation Inc.2	445		8,041
Swift Transportation Co. Inc.2	1,889		35,702
Union Pacific Corp.	8,424		530,459
United Parcel Service Inc. Class B	19,110		1,513,130
USF Corp.	879		31,503
Werner Enterprises Inc.	1,978		41,934
Yellow Roadway Corp.2	1,541		73,953
			5,221,385
Security	Shares or Principal	Value
TRUCKING & LEASING – 0.01%
GATX Corp.1	1,539	$	41,984
			41,984
WATER – 0.02%
Aqua America Inc.1	3,136		68,553
			68,553
TOTAL COMMON STOCKS (Cost: $351,385,868)			389,966,404
CORPORATE BONDS & NOTES – 0.00%
METAL FABRICATE & HARDWARE – 0.00%
Mueller Industries Inc.
6.00%, 11/01/143	8,976		8,797
			8,797
TOTAL CORPORATE BONDS & NOTES (Cost: $8,976)			8,797
SHORT-TERM INVESTMENTS – 6.53%
COMMERCIAL PAPER – 1.10%
Amsterdam Funding Corp.
1.79%, 11/08/044	125,824		125,780
Aspen Funding Corp.
1.85%, 11/01/044	481,485		481,485
Barton Capital Corp.
1.78%, 11/04/044	144,954		144,932
1.79%, 11/08/044	131,672		131,627
CRC Funding LLC
1.78%, 11/09/044	83,882		83,849
Delaware Funding Corp.
1.78%, 11/10/044	92,271		92,230
Edison Asset Securitization
1.45%, 11/09/044	167,765		167,711
1.59%, 12/02/044	167,765		167,535
Eureka Securitization Inc.
1.79%, 11/01/044	71,275		71,275
Ford Credit Auto Receivables
1.85%, 01/14/054	83,882		83,563
Grampian Funding LLC
1.59%, 11/30/044	83,882		83,775
Liberty Street Funding Corp.
1.80%, 11/12/044	41,941		41,918

32 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Principal		Value
Nationwide Building Society
1.63%, 12/09/044	$	139,245	$	139,005
Polonius Inc.
1.79%, 11/12/044		83,882		83,837
Prudential Funding LLC
1.60%, 12/01/044		83,882		83,771
1.85%, 11/01/044		419,412		419,412
Ranger Funding Co. LLC
1.79%, 11/01/044		96,176		96,176
Scaldis Capital LLC
1.78%, 11/08/044		377,471		377,340
Thames Asset Global Securitization No. 1 Inc.
1.81%, 11/12/044		98,134		98,080
UBS Finance (Delaware)
1.11%, 12/17/044		251,647		251,290
1.85%, 11/01/044		838,824		838,824
Windmill Funding Corp.
1.79%, 11/02/044		25,165		25,163
1.79%, 11/03/044		100,659		100,649
1.79%, 11/08/044		122,133		122,090
				4,311,317
FLOATING RATE NOTES – 1.96%
American Express Credit Corp.
1.95%, 10/26/054		167,765		167,854
Bank of Nova Scotia
1.85%, 09/26/054		41,941		41,924
Beta Finance Inc.
1.78%, 05/04/054,5		100,659		100,649
1.89%, 09/23/054,5		150,988		150,934
1.89%, 09/27/054,5		134,212		134,163
1.91%, 03/15/054,5		83,882		83,907
2.04%, 10/27/054,5		159,377		159,549
Canadian Imperial Bank of Commerce
1.79%, 09/13/054		251,647		251,577
1.90%, 10/31/054		167,765		167,722
CC USA Inc.
1.78%, 05/04/054,5		167,765		167,748
2.06%, 07/29/054,5		167,765		167,728
Den Danske Bank NY
1.79%, 08/12/054		167,765		167,726
1.87%, 08/26/054		167,765		167,724
2.00%, 10/17/054		167,765		167,717
Depfa Bank PLC
1.86%, 09/15/054		167,765		167,765
Dorada Finance Inc.
2.06%, 07/29/054,5		139,245		139,214
Five Finance Inc.
1.91%, 04/29/054,5		134,212		134,206
HBOS Treasury Services PLC
1.96%, 04/22/054		167,765		167,765
K2 USA LLC
1.81%, 09/12/054,5		167,765		167,736
1.82%, 06/10/054,5		167,765		167,752
1.89%, 10/20/054,5		167,765		167,770
2.05%, 07/25/054,5		83,882		83,870
Links Finance LLC
1.82%, 04/15/054,5		167,765		167,750
2.12%, 04/25/054		167,765		167,818
National City Bank (Ohio)
1.79%, 08/09/054		167,765		167,726
1.85%, 06/10/054		83,882		83,898
1.86%, 06/23/054		167,765		167,733
Nationwide Building Society
1.96%, 10/28/054,5		285,200		285,237
Norddeutsche Landesbank
2.04%, 07/27/054		167,765		167,722
Northern Rock PLC
1.90%, 10/25/054,5		335,530		335,530
2.02%, 01/13/054,5		159,377		159,377
Permanent Financing PLC
1.81%, 03/10/054		167,765		167,765
1.82%, 12/10/044		83,882		83,882
1.84%, 06/10/054		75,494		75,494
Sigma Finance Inc.
1.84%, 11/15/044		167,765		167,764
1.86%, 08/17/054		83,882		83,888
1.86%, 09/15/054		209,706		209,723
Tango Finance Corp.
1.66%, 05/17/054,5		139,245		139,241
1.70%, 02/25/054,5		93,948		93,942
1.80%, 04/07/054,5		61,570		61,567

SCHEDULES OF INVESTMENTS 33

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares or Principal		Value
1.83%, 01/18/054,5	$	73,817	$	73,815
1.84%, 09/15/054,5		147,633		147,613
1.90%, 07/25/054,5		167,765		167,753
WhistleJacket Capital LLC
1.83%, 07/15/054,5		125,824		125,806
1.83%, 09/15/054		125,824		125,802
1.83%, 10/14/054,5		83,882		83,874
1.84%, 06/15/054,5		83,882		83,871
White Pine Finance LLC
1.68%, 05/20/054		75,494		75,490
1.80%, 07/05/054		83,882		83,870
1.82%, 04/15/054,5		125,824		125,812
1.83%, 11/15/044,5		100,659		100,659
1.84%, 06/15/054,5		68,784		68,784
1.89%, 03/29/054		72,139		72,132
1.90%, 08/26/054,5		83,882		83,869
2.02%, 07/11/054		41,941		41,938
Winston Funding Ltd.
2.16%, 01/23/054,5		119,784		119,784
				7,659,929
MEDIUM-TERM NOTES – 0.13%
CC USA Inc.
1.29%, 04/15/054,5		167,765		167,757
1.51%, 02/15/054,5		109,047		109,096
Dorada Finance Inc.
1.48%, 01/18/054,5		125,824		125,822
K2 USA LLC
1.46%, 01/12/054,5		83,882		83,881
WhistleJacket Capital LLC
1.32%, 02/04/054,5		41,941		41,939
				528,495
MONEY MARKET FUNDS – 1.39%
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares4,6		671,059		671,059
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares4,6		2,789,660		2,789,660
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares4,6		1,845,414		1,845,414
BlackRock Temp Cash Money Market Fund4		37,601		37,601
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares4		68,468		68,468
				5,412,202
REPURCHASE AGREEMENTS – 1.03%
Banc of America Securities LLC
1.86%, 11/01/044,7		671,059		671,059
Bank of America N.A.
1.86%, 11/01/044,7		1,677,649		1,677,649
Goldman Sachs & Co.
1.86%, 11/01/044,7		1,677,649		1,677,649
				4,026,357
TIME DEPOSITS – 0.76%
Abbey National Treasury Services PLC
1.25%, 01/06/054		167,765		167,765
1.33%, 02/10/054		83,882		83,879
1.39%, 02/02/054		83,882		83,879
1.39%, 04/08/054		117,435		117,427
Bank of New York
1.39%, 11/01/044		167,765		167,765
1.60%, 12/03/044		41,941		41,939
Canadian Imperial Bank of Commerce
1.38%, 11/22/044		41,941		41,942
HBOS Treasury Services PLC
1.24%, 04/01/054		107,370		107,365
Key Bank N.A.
1.81%, 11/01/044		218,094		218,094
National City Bank (Ohio)
1.25%, 01/06/054		167,765		167,766
Nordea Bank PLC
2.11%, 06/07/054		167,765		167,745
Rabobank Nederland NV NY
1.85%, 11/01/044		335,530		335,530
Toronto-Dominion Bank
1.22%, 03/23/054		293,589		293,568
1.34%, 02/10/054		67,106		67,103
1.41%, 11/01/044		125,824		125,824
1.77%, 05/10/054		83,882		83,878
1.90%, 05/11/054		83,882		83,878

34 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Principal		Value
World Savings Bank FSB
1.76%, 11/12/044	$	595,565	$	595,562
				2,950,909
U.S. GOVERNMENT AGENCY NOTES – 0.16%
Federal Home Loan Mortgage Corp.
1.63%, 04/15/054		117,435		117,605
1.80%, 01/18/054		78,011		77,706
1.80%, 01/19/054		83,882		83,551
2.06%, 05/31/054		83,636		82,627
Federal National Mortgage Association
2.33%, 07/22/054		251,647		247,373
				608,862
TOTAL SHORT-TERM INVESTMENTS (Cost: $25,498,071)				25,498,071
TOTAL INVESTMENTS IN SECURITIES – 106.37% (Cost: $376,892,915)				415,473,272
Other Assets, Less Liabilities – (6.37%)				(24,887,912	)
NET ASSETS – 100.00%			$	390,585,360

NVS - Non-Voting Shares

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

² Non-income earning security.

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

⁴ All or a portion of this security represents an investment of securities lending collateral. See Note 5.

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 The Fund’s investment adviser is an affiliate of the issuer. See Note 2.

⁷ Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.57% to 8.00% and maturity dates ranging from 6/1/14 to 10/1/34.

SECTOR DIVERSIFICATION

Sector	Value		% of Net Assets
Financial	$	83,078,434	21.26	%
Consumer Non-Cyclical		81,247,616	20.81
Technology		46,518,206	11.90
Communications		44,579,353	11.42
Industrial		43,287,381	11.10
Consumer Cyclical		38,377,955	9.82
Energy		29,227,822	7.48
Utilities		12,595,923	3.23
Basic Materials		10,977,631	2.80
Diversified		84,880	0.02
Short-Term and Other Net Assets		610,159	0.16
TOTAL	$	390,585,360	100.00	%

See notes to financial statements.

SCHEDULES OF INVESTMENTS 35

Schedule of Investments (Unaudited)

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

October 31, 2004

Security	Shares	Value
COMMON STOCKS – 99.99%
COAL – 0.48%
Arch Coal Inc.1	15,122	$	491,767
Massey Energy Co.1	57,282		1,542,604
Peabody Energy Corp.	2,401		153,136
			2,187,507
OIL & GAS – 84.70%
Amerada Hess Corp.	65,816		5,312,009
Anadarko Petroleum Corp.1	170,791		11,519,853
Apache Corp.	221,868		11,248,708
Burlington Resources Inc.	342,394		14,209,351
Cabot Oil & Gas Corp.1	24,408		1,032,702
Chesapeake Energy Corp.1	33,777		543,134
ChevronTexaco Corp.	1,898,888		100,754,997
Cimarex Energy Co.1,2	20,738		744,079
ConocoPhillips	266,610		22,477,889
Devon Energy Corp.1	147,000		10,873,590
Diamond Offshore Drilling Inc.1	53,847		1,820,029
ENSCO International Inc.1	63,878		1,951,473
EOG Resources Inc.	93,297		6,209,848
Exxon Mobil Corp.	2,224,353		109,482,655
Forest Oil Corp.2	12,824		391,132
GlobalSantaFe Corp.1	92,803		2,737,689
Helmerich & Payne Inc.1	38,058		1,086,556
Kerr-McGee Corp.	94,817		5,615,063
Marathon Oil Corp.	203,645		7,760,911
Murphy Oil Corp.	125,973		10,080,359
Nabors Industries Ltd.1,2	95,520		4,691,942
Newfield Exploration Co.2	33,581		1,954,414
Noble Corp.1,2	74,550		3,405,444
Noble Energy Inc.1	46,019		2,669,102
Occidental Petroleum Corp.	378,143		21,111,724
Patterson-UTI Energy Inc.	3,952		75,997
Pioneer Natural Resources Co.	90,295		2,925,558
Rowan Companies Inc.2	3,946		100,741
Stone Energy Corp.1,2	15,255		628,048
Sunoco Inc.	40,701		3,026,526
Transocean Inc.1,2	190,049		6,699,227
Unocal Corp.	228,170		9,526,098
Valero Energy Corp.	94,475		4,059,591
Vintage Petroleum Inc.1	26,975		566,475
Security	Shares or Principal	Value
XTO Energy Inc.1	83,293	$	2,780,320
			390,073,234
OIL & GAS SERVICES – 12.50%
Baker Hughes Inc.	269,174		11,528,722
BJ Services Co.1	93,336		4,760,136
Cooper Cameron Corp.1,2	25,723		1,243,707
Grant Prideco Inc.1,2	50,846		1,045,394
Halliburton Co.	241,650		8,950,716
Hanover Compressor Co.1,2	34,686		451,612
Key Energy Services Inc.2	52,539		604,199
Lone Star Technologies Inc.1,2	15,567		410,969
National-Oilwell Inc.1,2	36,209		1,220,605
Schlumberger Ltd.	303,644		19,111,353
Seacor Holdings Inc.1,2	4,683		222,958
Smith International Inc.1,2	53,600		3,113,088
Tidewater Inc.1	24,090		745,104
Varco International Inc.2	26,632		737,174
Veritas DGC Inc.2	14,209		299,810
Weatherford International Ltd.1,2	59,957		3,133,353
			57,578,900
PIPELINES – 2.31%
El Paso Corp.	100,517		898,622
Kinder Morgan Inc.1	81,621		5,253,944
Williams Companies Inc.	356,550		4,460,441
			10,613,007
TOTAL COMMON STOCKS (Cost: $365,087,253)			460,452,648
SHORT-TERM INVESTMENTS – 5.97%
COMMERCIAL PAPER – 1.02%
Amsterdam Funding Corp.
1.79%, 11/08/043	136,789		136,741
Aspen Funding Corp.
1.85%, 11/01/043	523,445		523,445
Barton Capital Corp.
1.78%, 11/04/043	157,586		157,563
1.79%, 11/08/043	143,147		143,097
CRC Funding LLC
1.78%, 11/09/043	91,192		91,156
Delaware Funding Corp.
1.78%, 11/10/043	100,312		100,268

36 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Principal		Value
Edison Asset Securitization
1.45%, 11/09/043	$	182,385	$	182,326
1.59%, 12/02/043		182,385		182,135
Eureka Securitization Inc.
1.79%, 11/01/043		77,486		77,486
Ford Credit Auto Receivables
1.85%, 01/14/053		91,192		90,846
Grampian Funding LLC
1.59%, 11/30/043		91,192		91,076
Liberty Street Funding Corp.
1.80%, 11/12/043		45,596		45,571
Nationwide Building Society
1.63%, 12/09/043		151,380		151,119
Polonius Inc.
1.79%, 11/12/043		91,192		91,143
Prudential Funding LLC
1.60%, 12/01/043		91,192		91,071
1.85%, 11/01/043		455,962		455,962
Ranger Funding Co. LLC
1.79%, 11/01/043		104,558		104,558
Scaldis Capital LLC
1.78%, 11/08/043		410,366		410,224
Thames Asset Global Securitization No. 1 Inc.
1.81%, 11/12/043		106,686		106,627
UBS Finance (Delaware)
1.11%, 12/17/043		273,577		273,189
1.85%, 11/01/043		911,925		911,925
Windmill Funding Corp.
1.79%, 11/02/043		27,358		27,356
1.79%, 11/03/043		109,431		109,420
1.79%, 11/08/043		132,776		132,731
				4,687,035
FLOATING RATE NOTES – 1.81%
American Express Credit Corp.
1.95%, 10/26/053		182,385		182,482
Bank of Nova Scotia
1.85%, 09/26/053		45,596		45,578
Beta Finance Inc.
1.78%, 05/04/053,4		109,431		109,420
1.89%, 09/23/053,4		164,146		164,088
1.89%, 09/27/053,4		145,908		145,855
1.91%, 03/15/053,4		91,192		91,220
2.04%, 10/27/053,4		173,266		173,454
Canadian Imperial Bank of Commerce
1.79%, 09/13/053		273,577		273,500
1.90%, 10/31/053		182,385		182,338
CC USA Inc.
1.78%, 05/04/053,4		182,385		182,367
2.06%, 07/29/053,4		182,385		182,345
Den Danske Bank NY
1.79%, 08/12/053		182,385		182,342
1.87%, 08/26/053		182,385		182,340
2.00%, 10/17/053		182,385		182,333
Depfa Bank PLC
1.86%, 09/15/053		182,385		182,385
Dorada Finance Inc.
2.06%, 07/29/053,4		151,380		151,346
Five Finance Inc.
1.91%, 04/29/053,4		145,908		145,901
HBOS Treasury Services PLC
1.96%, 04/22/053		182,385		182,385
K2 USA LLC
1.81%, 09/12/053,4		182,385		182,354
1.82%, 06/10/053,4		182,385		182,371
1.89%, 10/20/053,4		182,385		182,391
2.05%, 07/25/053,4		91,192		91,179
Links Finance LLC
1.82%, 04/15/053,4		182,385		182,369
2.12%, 04/25/053		182,385		182,442
National City Bank (Ohio)
1.79%, 08/09/053		182,385		182,343
1.85%, 06/10/053		91,192		91,210
1.86%, 06/23/053		182,385		182,350
Nationwide Building Society
1.96%, 10/28/053,4		310,054		310,094
Norddeutsche Landesbank
2.04%, 07/27/053		182,385		182,338
Northern Rock PLC
1.90%, 10/25/053,4		364,770		364,770
2.02%, 01/13/053,4		173,266		173,266

SCHEDULES OF INVESTMENTS 37

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Principal		Value
Permanent Financing PLC
1.81%, 03/10/053	$	182,385	$	182,385
1.82%, 12/10/043		91,192		91,192
1.84%, 06/10/053		82,073		82,073
Sigma Finance Inc.
1.84%, 11/15/043		182,385		182,384
1.86%, 08/17/053		91,192		91,199
1.86%, 09/15/053		227,981		227,999
Tango Finance Corp.
1.66%, 05/17/053,4		151,380		151,375
1.70%, 02/25/053,4		102,136		102,129
1.80%, 04/07/053,4		66,935		66,932
1.83%, 01/18/053,4		80,249		80,248
1.84%, 09/15/053,4		160,499		160,477
1.90%, 07/25/053,4		182,385		182,372
WhistleJacket Capital LLC
1.83%, 07/15/053,4		136,789		136,769
1.83%, 09/15/053		136,789		136,765
1.83%, 10/14/053,4		91,192		91,184
1.84%, 06/15/053,4		91,192		91,180
White Pine Finance LLC
1.68%, 05/20/053		82,073		82,069
1.80%, 07/05/053		91,192		91,179
1.82%, 04/15/053,4		136,789		136,776
1.83%, 11/15/043,4		109,431		109,431
1.84%, 06/15/053,4		74,778		74,778
1.89%, 03/29/053		78,426		78,418
1.90%, 08/26/053,4		91,192		91,178
2.02%, 07/11/053		45,596		45,593
Winston Funding Ltd.
2.16%, 01/23/053,4		130,223		130,223
				8,327,464
MEDIUM-TERM NOTES – 0.12%
CC USA Inc.
1.29%, 04/15/053,4		182,385		182,377
1.51%, 02/15/053,4		118,550		118,604
Dorada Finance Inc.
1.48%, 01/18/053,4		136,789		136,787
K2 USA LLC
1.46%, 01/12/053,4		91,192		91,191
Security	Shares or Principal		Value
WhistleJacket Capital LLC
1.32%, 02/04/053,4	$	45,596	$	45,594
				574,553
MONEY MARKET FUNDS – 1.23%
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares3,5		729,540		729,540
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares3,5		2,814,216		2,814,216
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares3,5		2,006,235		2,006,235
BlackRock Temp Cash Money Market Fund3		40,877		40,877
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares3		74,434		74,434
				5,665,302
REPURCHASE AGREEMENTS – 0.95%
Banc of America Securities LLC
1.86%, 11/01/043,6	$	729,540		729,540
Bank of America N.A.
1.86%, 11/01/043,6		1,823,850		1,823,850
Goldman Sachs & Co.
1.86%, 11/01/043,6		1,823,850		1,823,850
				4,377,240
TIME DEPOSITS – 0.70%
Abbey National Treasury Services PLC
1.25%, 01/06/053		182,385		182,382
1.33%, 02/10/053		91,192		91,189
1.39%, 02/02/053		91,192		91,189
1.39%, 04/08/053		127,669		127,662
Bank of New York
1.39%, 11/01/043		182,385		182,385
1.60%, 12/03/043		45,596		45,594
Canadian Imperial Bank of Commerce
1.38%, 11/22/043		45,596		45,596
HBOS Treasury Services PLC
1.24%, 04/01/053		116,726		116,722
Key Bank N.A.
1.81%, 11/01/043		237,100		237,100

38 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Principal		Value
National City Bank (Ohio)
1.25%, 01/06/053	$	182,385	$	182,387
Nordea Bank PLC
2.11%, 06/07/053		182,385		182,363
Rabobank Nederland NV NY
1.85%, 11/01/043		364,770		364,770
Toronto-Dominion Bank
1.22%, 03/23/053		319,174		319,152
1.34%, 02/10/053		72,954		72,951
1.41%, 11/01/043		136,789		136,789
1.77%, 05/10/053		91,192		91,188
1.90%, 05/11/053		91,192		91,188
World Savings Bank FSB
1.76%, 11/12/043		647,467		647,463
				3,208,070
U.S. GOVERNMENT AGENCY NOTES – 0.14%
Federal Home Loan Mortgage Corp.
1.63%, 04/15/053		127,669		127,854
1.80%, 01/18/053		84,809		84,478
1.80%, 01/19/053		91,192		90,832
2.06%, 05/31/053		90,924		89,827
Federal National Mortgage Association
2.33%, 07/22/053		273,577		268,931
				661,922
TOTAL SHORT-TERM INVESTMENTS (Cost: $27,501,586)				27,501,586
TOTAL INVESTMENTS IN SECURITIES – 105.96% (Cost: $392,588,839)				487,954,234
Other Assets, Less Liabilities – (5.96%)				(27,426,434	)
NET ASSETS – 100.00%			$	460,527,800

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 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.

⁵ The Fund’s investment adviser is an affiliate of the issuer. See Note 2.

⁶ Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.57% to 8.00% and maturity dates ranging from 6/1/14 to 10/1/34.

INDUSTRY DIVERSIFICATION

Industry	Value		% of Net Assets
Oil & Gas	$	390,073,234	84.70	%
Oil & Gas Services		57,578,900	12.50
Pipelines		10,613,007	2.31
Coal		2,187,507	0.48
Short-Term and Other Net Assets		75,152	0.01
TOTAL	$	460,527,800	100.00	%

See notes to financial statements.

SCHEDULES OF INVESTMENTS 39

Schedule of Investments (Unaudited)

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

October 31, 2004

Security	Shares	Value
COMMON STOCKS – 100.00%
AGRICULTURE – 0.84%
Delta & Pine Land Co.1	17,574	$	462,548
Monsanto Co.	121,499		5,194,082
			5,656,630
BIOTECHNOLOGY – 11.40%
Affymetrix Inc.1,2	27,689		844,514
Alexion Pharmaceuticals Inc.1,2	12,317		219,797
Amgen Inc.2	578,884		32,880,611
Applera Corp. – Celera Genomics Group1,2	33,343		427,457
Biogen Idec Inc.2	154,837		9,005,320
Bio-Rad Laboratories Inc. Class A2	7,465		388,329
Celgene Corp.1,2	74,988		2,221,145
Cell Genesys Inc.1,2	20,255		132,873
Charles River Laboratories International Inc.2	27,834		1,302,353
Chiron Corp.2	50,015		1,621,486
CuraGen Corp.1,2	18,318		90,308
Enzo Biochem Inc.1,2	13,697		242,300
Enzon Pharmaceuticals Inc.1,2	19,948		322,559
Gene Logic Inc.2	14,025		46,282
Genentech Inc.2	213,518		9,721,475
Genzyme Corp.2	104,320		5,473,670
Human Genome Sciences Inc.1,2	59,568		612,955
ICOS Corp.1,2	26,604		599,122
Immunomedics Inc.1,2	17,947		51,149
Incyte Corp.1,2	33,486		348,254
InterMune Inc.1,2	12,851		166,677
Invitrogen Corp.2	24,119		1,396,490
Lexicon Genetics Inc.1,2	19,585		127,498
Martek Biosciences Corp.1,2	13,352		628,292
Maxygen Inc.2	13,207		126,787
MedImmune Inc.2	113,836		3,235,219
Millennium Pharmaceuticals Inc.1,2	139,731		1,813,708
Myriad Genetics Inc.1,2	13,960		247,371
Nektar Therapeutics2	38,264		551,384
Praecis Pharmaceuticals Inc.1,2	23,499		41,123
Protein Design Labs Inc.1,2	43,287		828,946
Regeneron Pharmaceuticals Inc.1,2	17,234		125,291
Savient Pharmaceuticals Inc.1,2	26,444		52,095
Telik Inc.1,2	18,629		343,705
Transkaryotic Therapies Inc.1,2	12,838		222,226
Vertex Pharmaceuticals Inc.1,2	36,169		393,519
XOMA Ltd.2	38,313		78,542
			76,930,832
COMMERCIAL SERVICES – 0.29%
Albany Molecular Research Inc.1,2	9,547		82,295
First Health Group Corp.1,2	42,041		669,293
PAREXEL International Corp.1,2	12,013		231,250
Pharmaceutical Product Development Inc.1,2	22,728		959,803
			1,942,641
ELECTRONICS – 0.73%
Applera Corp. - Applied Biosystems Group	92,494		1,764,786
Fisher Scientific International Inc.2	52,650		3,020,004
Molecular Devices Corp.1,2	6,726		134,621
			4,919,411
HEALTH CARE - PRODUCTS – 29.27%
Advanced Medical Optics Inc.1,2	16,309		637,682
Alcon Inc.1	35,721		2,543,335
ArthroCare Corp.1,2	9,854		303,602
Bard (C.R.) Inc.	47,522		2,699,250
Bausch & Lomb Inc.	24,204		1,475,476
Baxter International Inc.	281,306		8,652,973
Beckman Coulter Inc.1	28,048		1,668,856
Becton, Dickinson & Co.	107,774		5,658,135
Biomet Inc.	108,020		5,042,374
Biosite Inc.1,2	7,259		354,312
Boston Scientific Corp.2	275,984		9,742,235
Cooper Companies Inc.1	14,955		1,052,084
Cyberonics Inc.1,2	7,664		143,853
Cytyc Corp.2	50,853		1,326,755
Dade Behring Holdings Inc.2	19,688		1,108,238
Datascope Corp.1	5,713		185,444
DENTSPLY International Inc.	32,666		1,698,959
Diagnostic Products Corp.1	10,312		455,275
Edwards Lifesciences Corp.1,2	27,228		930,653
Gen-Probe Inc.2	22,702		795,478
Guidant Corp.	143,940		9,589,283
Haemonetics Corp.2	11,339		372,486

40 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
Hillenbrand Industries Inc.	26,676	$	1,327,931
IDEXX Laboratories Inc.1,2	15,674		781,192
INAMED Corp.2	16,240		863,156
Invacare Corp.1	13,818		638,115
Johnson & Johnson	1,357,315		79,240,050
Medtronic Inc.	552,984		28,263,012
Mentor Corp.1	16,954		589,999
Patterson Companies Inc.1,2	53,214		1,995,525
PolyMedica Corp.1	12,439		435,365
ResMed Inc.1,2	15,493		728,171
Respironics Inc.2	17,541		896,170
St. Jude Medical Inc.2	80,988		6,201,251
Steris Corp.1,2	31,593		654,923
Stryker Corp.	126,897		5,467,992
Sybron Dental Specialties Inc.2	17,795		579,583
TECHNE Corp.1,2	17,815		641,696
Varian Medical Systems Inc.2	62,679		2,516,562
Viasys Healthcare Inc.1,2	12,034		205,661
VISX Inc.2	22,623		377,352
Zimmer Holdings Inc.2	111,656		8,663,389
			197,503,833
HEALTH CARE - SERVICES – 11.71%
Aetna Inc.	70,265		6,675,175
AMERIGROUP Corp.1,2	11,340		680,400
Anthem Inc.2	63,882		5,136,113
Apria Healthcare Group Inc.1,2	22,908		626,763
Beverly Enterprises Inc.1,2	48,730		423,464
Community Health Systems Inc.2	39,868		1,069,260
Covance Inc.1,2	28,754		1,142,109
Coventry Health Care Inc.2	33,959		1,388,923
DaVita Inc.2	45,469		1,346,792
HCA Inc.1	211,239		7,758,808
Health Management Associates Inc. Class A	110,754		2,288,178
Health Net Inc.1,2	51,233		1,242,913
Humana Inc.2	72,931		1,396,629
Laboratory Corp. of America Holdings1,2	65,040		2,978,832
LifePoint Hospitals Inc.1,2	16,290		528,122
Lincare Holdings Inc.1,2	45,760		1,682,138
Manor Care Inc.	40,606		1,329,440
OCA Inc.1,2	21,803		90,046
Odyssey Healthcare Inc.1,2	16,566		127,889
PacifiCare Health Systems Inc.1,2	39,483		1,406,384
Pediatrix Medical Group Inc.2	10,975		617,344
Province Healthcare Co.2	20,105		431,051
Quest Diagnostics Inc.	36,455		3,191,271
Renal Care Group Inc.1,2	30,625		966,525
Select Medical Corp.	45,973		790,276
Sunrise Senior Living Inc.1,2	8,247		314,293
Tenet Healthcare Corp.2	212,670		2,279,822
Triad Hospitals Inc.1,2	35,159		1,161,302
UnitedHealth Group Inc.	302,526		21,902,882
Universal Health Services Inc. Class B	24,945		1,036,714
WellPoint Health Networks Inc.2	71,866		7,018,434
			79,028,292
INSURANCE – 0.59%
CIGNA Corp.	62,928		3,993,411
			3,993,411
PHARMACEUTICALS – 45.17%
Abbott Laboratories	713,819		30,430,104
Abgenix Inc.1,2	35,623		324,526
Accredo Health Inc.2	22,242		512,233
Alkermes Inc.1,2	40,722		503,731
Allergan Inc.	61,431		4,396,002
Alpharma Inc. Class A	18,590		315,100
American Pharmaceutical Partners Inc.1,2	18,498		516,464
Amylin Pharmaceuticals Inc.1,2	37,723		803,500
Andrx Corp.2	33,325		721,153
Barr Pharmaceuticals Inc.2	41,123		1,548,281
Bristol-Myers Squibb Co.	889,327		20,836,932
Caremark Rx Inc.2	213,221		6,390,234
Cell Therapeutics Inc.1,2	24,872		154,206
Cephalon Inc.1,2	25,948		1,236,941
Cubist Pharmaceuticals Inc.1,2	18,114		184,853
CV Therapeutics Inc.1,2	14,502		242,618
Express Scripts Inc.2	28,105		1,798,720
Forest Laboratories Inc.2	169,425		7,556,355
Gilead Sciences Inc.1,2	197,013		6,822,560
Hospira Inc.2	71,400		2,278,374

SCHEDULES OF INVESTMENTS 41

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares		Value
ImClone Systems Inc.2		30,341	$	1,328,936
Impax Laboratories Inc.1,2		22,347		329,842
IVAX Corp.2		96,744		1,751,066
King Pharmaceuticals Inc.2		110,635		1,207,028
Ligand Pharmaceuticals Inc. Class B1,2		33,639		299,892
Lilly (Eli) & Co.		441,282		24,230,795
Medarex Inc.1,2		36,296		276,213
Medco Health Solutions Inc.2		123,683		4,194,090
Medicines Co. (The)1,2		20,470		545,321
Medicis Pharmaceutical Corp. Class A1		25,648		1,043,104
Merck & Co. Inc.		1,014,489		31,763,651
MGI Pharma Inc.1,2		32,313		861,788
Mylan Laboratories Inc.1		122,885		2,116,080
Nabi Biopharmaceuticals1,2		26,502		367,053
Neurocrine Biosciences Inc.2		16,653		775,197
Noven Pharmaceuticals Inc.1,2		10,763		242,706
NPS Pharmaceuticals Inc.1,2		17,662		301,667
Omnicare Inc.1		47,598		1,313,229
Onyx Pharmaceuticals Inc.2		15,170		425,670
OSI Pharmaceuticals Inc.1,2		17,300		1,124,154
Par Pharmaceutical Companies Inc.1,2		15,534		612,816
Perrigo Co.1		27,977		508,622
Pfizer Inc.		3,453,037		99,965,421
Schering-Plough Corp.		672,989		12,187,831
Sepracor Inc.1,2		40,124		1,842,895
Taro Pharmaceutical Industries Ltd.1,2		11,057		293,784
Trimeris Inc.2		7,365		84,771
United Therapeutics Inc.1,2		9,716		303,722
Valeant Pharmaceuticals International1		38,384		921,216
Vicuron Pharmaceuticals Inc.2		25,074		351,537
Watson Pharmaceuticals Inc.2		50,118		1,404,808
Wyeth		609,826		24,179,601
				304,727,393
TOTAL COMMON STOCKS (Cost: $714,778,704)				674,702,443
Security	Principal		Value
SHORT-TERM INVESTMENTS – 7.50%
COMMERCIAL PAPER – 1.28%
Amsterdam Funding Corp.
1.79%, 11/08/043	$	251,519	$	251,431
Aspen Funding Corp.
1.85%, 11/01/043		962,478		962,478
Barton Capital Corp.
1.78%, 11/04/043		289,760		289,717
1.79%, 11/08/043		263,209		263,118
CRC Funding LLC
1.78%, 11/09/043		167,679		167,613
Delaware Funding Corp.
1.78%, 11/10/043		184,447		184,365
Edison Asset Securitization
1.45%, 11/09/043		335,358		335,250
1.59%, 12/02/043		335,358		334,899
Eureka Securitization Inc.
1.79%, 11/01/043		142,477		142,477
Ford Credit Auto Receivables
1.85%, 01/14/053		167,679		167,042
Grampian Funding LLC
1.59%, 11/30/043		167,679		167,464
Liberty Street Funding Corp.
1.80%, 11/12/043		83,840		83,793
Nationwide Building Society
1.63%, 12/09/043		278,347		277,868
Polonius Inc.
1.79%, 11/12/043		167,679		167,587
Prudential Funding LLC
1.60%, 12/01/043		167,679		167,456
1.85%, 11/01/043		838,396		838,396
Ranger Funding Co. LLC
1.79%, 11/01/043		192,254		192,255
Scaldis Capital LLC
1.78%, 11/08/043		754,556		754,295
Thames Asset Global Securitization No. 1 Inc.
1.81%, 11/12/043		196,168		196,059
UBS Finance (Delaware)
1.11%, 12/17/043		503,037		502,324
1.85%, 11/01/043		1,676,791		1,676,791

42 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Principal		Value
Windmill Funding Corp.
1.79%, 11/02/043	$	50,304	$	50,301
1.79%, 11/03/043		201,215		201,195
1.79%, 11/08/043		244,141		244,056
				8,618,230
FLOATING RATE NOTES – 2.27%
American Express Credit Corp.
1.95%, 10/26/053		335,358		335,536
Bank of Nova Scotia
1.85%, 09/26/053		83,840		83,806
Beta Finance Inc.
1.78%, 05/04/053,4		201,215		201,195
1.89%, 09/23/053,4		301,822		301,715
1.89%, 09/27/053,4		268,287		268,190
1.91%, 03/15/053,4		167,679		167,729
2.04%, 10/27/053,4		318,590		318,936
Canadian Imperial Bank of Commerce
1.79%, 09/13/053		503,037		502,895
1.90%, 10/31/053		335,358		335,272
CC USA Inc.
1.78%, 05/04/053,4		335,358		335,324
2.06%, 07/29/053,4		335,358		335,284
Den Danske Bank NY
1.79%, 08/12/053		335,358		335,280
1.87%, 08/26/053		335,358		335,276
2.00%, 10/17/053		335,358		335,262
Depfa Bank PLC
1.86%, 09/15/053		335,358		335,358
Dorada Finance Inc.
2.06%, 07/29/053,4		278,347		278,285
Five Finance Inc.
1.91%, 04/29/053,4		268,287		268,273
HBOS Treasury Services PLC
1.96%, 04/22/053		335,358		335,358
K2 USA LLC
1.81%, 09/12/053,4		335,358		335,301
1.82%, 06/10/053,4		335,358		335,333
1.89%, 10/20/053,4		335,358		335,369
2.05%, 07/25/053,4		167,679		167,655
Links Finance LLC
1.82%, 04/15/053,4		335,358		335,328
2.12%, 04/25/053		335,358		335,464
National City Bank (Ohio)
1.79%, 08/09/053		335,358		335,281
1.85%, 06/10/053		167,679		167,711
1.86%, 06/23/053		335,358		335,294
Nationwide Building Society
1.96%, 10/28/053,4		570,109		570,182
Norddeutsche Landesbank
2.04%, 07/27/053		335,358		335,272
Northern Rock PLC
1.90%, 10/25/053,4		670,717		670,717
2.02%, 01/13/053,4		318,590		318,590
Permanent Financing PLC
1.81%, 03/10/053		335,358		335,358
1.82%, 12/10/043		167,679		167,679
1.84%, 06/10/053		150,911		150,911
Sigma Finance Inc.
1.84%, 11/15/043		335,358		335,357
1.86%, 08/17/053		167,679		167,691
1.86%, 09/15/053		419,198		419,231
Tango Finance Corp.
1.66%, 05/17/053,4		278,347		278,340
1.70%, 02/25/053,4		187,801		187,789
1.80%, 04/07/053,4		123,076		123,072
1.83%, 01/18/053,4		147,558		147,554
1.84%, 09/15/053,4		295,115		295,075
1.90%, 07/25/053,4		335,358		335,334
WhistleJacket Capital LLC
1.83%, 07/15/053,4		251,519		251,483
1.83%, 09/15/053		251,519		251,475
1.83%, 10/14/053,4		167,679		167,664
1.84%, 06/15/053,4		167,679		167,655
White Pine Finance LLC
1.68%, 05/20/053		150,911		150,903
1.80%, 07/05/053		167,679		167,655
1.82%, 04/15/053,4		251,519		251,496
1.83%, 11/15/043,4		201,215		201,215
1.84%, 06/15/053,4		137,497		137,497
1.89%, 03/29/053		144,204		144,191

SCHEDULES OF INVESTMENTS 43

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares or Principal		Value
1.90%, 08/26/053,4	$	167,679	$	167,652
2.02%, 07/11/053		83,840		83,833
Winston Funding Ltd.
2.16%, 01/23/053,4		239,446		239,446
				15,312,027
MEDIUM-TERM NOTES – 0.16%
CC USA Inc.
1.29%, 04/15/053,4		335,358		335,343
1.51%, 02/15/053,4		217,983		218,081
Dorada Finance Inc.
1.48%, 01/18/053,4		251,519		251,516
K2 USA LLC
1.46%, 01/12/053,4		167,679		167,676
WhistleJacket Capital LLC
1.32%, 02/04/053,4		83,840		83,835
				1,056,451
MONEY MARKET FUNDS – 1.55%
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares3,5		1,341,433		1,341,433
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares3,5		5,249,835		5,249,835
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares3,5		3,688,941		3,688,941
BlackRock Temp Cash Money Market Fund3		75,163		75,163
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares3		136,865		136,865
				10,492,237
REPURCHASE AGREEMENTS – 1.19%
Banc of America Securities LLC
1.86%, 11/01/043,6		1,341,433		1,341,433
Bank of America N.A.
1.86%, 11/01/043,6		3,353,583		3,353,583
Goldman Sachs & Co.
1.86%, 11/01/043,6		3,353,583		3,353,583
				8,048,599
Security	Principal		Value
TIME DEPOSITS – 0.87%
Abbey National Treasury Services PLC
1.25%, 01/06/053	$	335,358	$	335,358
1.33%, 02/10/053		167,679		167,672
1.39%, 02/02/053		167,679		167,673
1.39%, 04/08/053		234,751		234,736
Bank of New York
1.39%, 11/01/043		335,358		335,359
1.60%, 12/03/043		83,840		83,836
Canadian Imperial Bank of Commerce
1.38%, 11/22/043		83,840		83,840
HBOS Treasury Services PLC
1.24%, 04/01/053		214,629		214,620
Key Bank N.A.
1.81%, 11/01/043		435,966		435,966
National City Bank (Ohio)
1.25%, 01/06/053		335,358		335,361
Nordea Bank PLC
2.11%, 06/07/053		335,358		335,319
Rabobank Nederland NV NY
1.85%, 11/01/043		670,717		670,717
Toronto-Dominion Bank
1.22%, 03/23/053		586,877		586,837
1.34%, 02/10/053		134,143		134,138
1.41%, 11/01/043		251,519		251,519
1.77%, 05/10/053		167,679		167,670
1.90%, 05/11/053		167,679		167,670
World Savings Bank FSB
1.76%, 11/12/043		1,190,522		1,190,514
				5,898,805
U.S. GOVERNMENT AGENCY NOTES – 0.18%
Federal Home Loan Mortgage Corp.
1.63%, 04/15/053		234,751		235,091
1.80%, 01/18/053		155,942		155,333
1.80%, 01/19/053		167,679		167,017
2.06%, 05/31/053		167,186		165,168
Federal National Mortgage Association
2.33%, 07/22/053		503,037		494,493
				1,217,102
TOTAL SHORT-TERM INVESTMENTS (Cost: $50,643,451)				50,643,451

44 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

	Value
TOTAL INVESTMENTS IN SECURITIES – 107.50% (Cost: $765,422,155)	$	725,345,894
Other Assets, Less Liabilities – (7.50%)		(50,629,214	)
NET ASSETS – 100.00%	$	674,716,680

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 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.

⁵ The Fund’s investment adviser is an affiliate of the issuer. See Note 2.

⁶ Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.57% to 8.00% and maturity dates ranging from 6/1/14 to 10/1/34.

INDUSTRY DIVERSIFICATION

Industry	Value		% of Net Assets
Pharmaceuticals	$	304,727,393	45.17	%
Health Care-Products		197,503,833	29.27
Health Care-Services		79,028,292	11.71
Biotechnology		76,930,832	11.40
Agriculture		5,656,630	0.84
Electronics		4,919,411	0.73
Insurance		3,993,411	0.59
Commercial Services		1,942,641	0.29
Short-Term and Other Net Assets		14,237	0.00
TOTAL	$	674,716,680	100.00	%

See notes to financial statements.

SCHEDULES OF INVESTMENTS 45

Schedule of Investments (Unaudited)

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

October 31, 2004

Security	Shares	Value
COMMON STOCKS – 100.01%
COMMERCIAL SERVICES – 0.08%
BearingPoint Inc.1	36,111	$	314,166
			314,166
COMPUTERS – 26.06%
Advanced Digital Information Corp.1	14,192		127,018
Affiliated Computer Services Inc. Class A1,2	26,489		1,444,975
Apple Computer Inc.1	81,764		4,295,063
Brocade Communications Systems Inc.1	55,933		379,785
CACI International Inc. Class A1,2	6,319		385,269
Cadence Design Systems Inc.1,2	58,926		733,039
CIBER Inc.1,2	12,156		109,890
Cognizant Technology Solutions Corp.1	28,180		958,120
Computer Sciences Corp.1	40,325		2,002,943
Dell Inc.1	478,134		16,763,378
DST Systems Inc.1	14,478		649,338
Echelon Corp.1,2	7,080		49,985
Electronic Data Systems Corp.	109,449		2,327,980
Electronics For Imaging Inc.1,2	11,421		206,035
EMC Corp.1	520,826		6,703,031
Gateway Inc.1	49,820		291,447
Henry (Jack) & Associates Inc.	16,402		305,733
Hewlett-Packard Co.	588,829		10,987,549
Hutchinson Technology Inc.1,2	5,693		191,342
Imation Corp.2	7,707		240,998
InFocus Corp.1	7,800		50,232
Intergraph Corp.1	7,840		195,490
International Business Machines Corp.	370,037		33,210,821
Iomega Corp.1,2	11,383		52,362
Kronos Inc.1,2	6,672		327,262
Lexmark International Inc.1	27,630		2,296,329
Maxtor Corp.1	53,478		158,295
McDATA Corp. Class A1	17,864		112,186
McDATA Corp. Class B1,2	5,350		32,100
Mentor Graphics Corp.1,2	15,243		177,429
Mercury Computer Systems Inc.1,2	4,500		113,648
MICROS Systems Inc.1,2	3,969		234,647
M-Systems Flash Disk Pioneers Ltd.1,2	6,845		96,241
NCR Corp.1	20,333		1,145,765
Network Appliance Inc.1	76,923		1,882,306
PalmOne Inc.1,2	8,897		257,746
Perot Systems Corp. Class A1,2	16,158		259,013
Quantum Corp.1,2	37,304		99,975
RadiSys Corp.1,2	3,840		50,995
Reynolds & Reynolds Co. (The) Class A	14,029		345,254
SanDisk Corp.1,2	34,847		727,257
Seagate Technology2	43,806		553,708
Silicon Graphics Inc.1,2	53,449		68,949
Silicon Storage Technology Inc.1	18,060		134,547
Storage Technology Corp.1	24,113		651,533
Sun Microsystems Inc.1	715,374		3,240,644
SunGard Data Systems Inc.1	62,185		1,647,281
Synopsys Inc.1	33,697		547,239
Unisys Corp.1	71,510		759,436
Western Digital Corp.1	44,821		373,359
			98,954,967
ELECTRICAL COMPONENTS & EQUIPMENT – 0.08%
Belden CDT Inc.2	9,738		216,476
General Cable Corp.1,2	8,239		101,340
			317,816
ELECTRONICS – 0.14%
Cymer Inc.1,2	8,018		228,673
Trimble Navigation Ltd.1	11,020		316,164
			544,837
ENTERTAINMENT – 0.08%
Macrovision Corp.1,2	10,494		283,758
			283,758
INTERNET – 5.88%
Agile Software Corp.1	10,073		86,023
Akamai Technologies Inc.1,2	25,216		349,242
Ariba Inc.1	13,331		204,631
Ask Jeeves Inc.1,2	12,215		314,903
Avocent Corp.1	10,664		379,638
Check Point Software Technologies Ltd.1,2	38,755		876,677
CNET Networks Inc.1,2	28,449		232,428
Digital River Inc.1,2	6,481		215,817
E.piphany Inc.1	16,308		71,429
EarthLink Inc.1,2	31,167		321,955
Entrust Inc.1	12,088		39,890

46 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
eResearch Technology Inc.1,2	10,204	$	119,285
F5 Networks Inc.1,2	6,310		252,085
Google Inc. Class A1,2	4,827		920,533
Internet Security Systems Inc.1	9,287		202,085
Interwoven Inc.1	7,861		71,299
Keynote Systems Inc.1	3,630		51,056
Macromedia Inc.1	15,024		407,751
MatrixOne Inc.1	10,323		58,841
McAfee Inc.1	33,739		816,484
Openwave Systems Inc.1,2	13,730		161,602
PC-Tel Inc.1	4,478		34,525
RealNetworks Inc.1,2	24,035		116,570
RSA Security Inc.1	13,522		276,660
S1 Corp.1	14,127		132,653
SonicWALL Inc.1	14,742		73,710
Symantec Corp.1	67,810		3,861,101
TIBCO Software Inc.1	36,519		354,965
United Online Inc.1	10,139		95,205
VeriSign Inc.1	54,837		1,471,277
Verity Inc.1	8,162		105,453
Vignette Corp.1	63,269		70,229
WatchGuard Technologies Inc.1	6,183		24,608
WebMD Corp.1,2	66,972		506,308
webMethods Inc.1	11,420		79,141
Yahoo! Inc.1	248,228		8,983,371
			22,339,430
MACHINERY – 0.22%
Zebra Technologies Corp. Class A1,2	15,430		817,636
			817,636
OFFICE & BUSINESS EQUIPMENT – 1.39%
IKON Office Solutions Inc.	26,853		281,957
Imagistics International Inc.1,2	3,548		122,122
Pitney Bowes Inc.	50,301		2,200,669
Xerox Corp.1,2	180,485		2,665,763
			5,270,511
PHARMACEUTICALS – 0.01%
Accelrys Inc.1,2	5,176		29,814
			29,814
SEMICONDUCTORS – 21.48%
Actel Corp.1	5,497		83,390
Advanced Micro Devices Inc.1,2	76,216		1,281,953
Agere Systems Inc. Class A1	173,727		210,210
Agere Systems Inc. Class B1	197,368		226,973
Altera Corp.1	81,388		1,849,949
Amkor Technology Inc.1	19,666		97,937
Analog Devices Inc.	80,385		3,236,300
Applied Materials Inc.1	364,675		5,871,268
Applied Micro Circuits Corp.1	66,769		243,039
Asyst Technologies Inc.1	9,158		49,041
Atmel Corp.1	95,162		302,615
ATMI Inc.1,2	6,696		156,352
Axcelis Technologies Inc.1	21,389		183,945
Broadcom Corp. Class A1	56,295		1,522,780
Brooks Automation Inc.1,2	9,473		140,958
Cirrus Logic Inc.1	18,521		93,531
Cohu Inc.	4,283		67,157
Conexant Systems Inc.1	100,804		174,391
Credence Systems Corp.1,2	20,199		152,502
Cree Inc.1,2	15,838		546,569
Cypress Semiconductor Corp.1	26,830		282,520
DSP Group Inc.1	6,212		123,184
DuPont Photomasks Inc.1,2	3,155		82,724
Emulex Corp.1	17,600		184,976
ESS Technology Inc.1,2	7,390		48,331
Exar Corp.1,2	8,838		132,747
Fairchild Semiconductor International Inc. Class A1	25,441		365,587
Integrated Device Technology Inc.1	23,001		271,872
Intel Corp.2	1,379,749		30,713,213
International Rectifier Corp.1	14,192		564,132
Intersil Corp. Class A2	30,283		494,219
KLA-Tencor Corp.1	42,202		1,921,457
Kopin Corp.1	15,536		56,862
Kulicke & Soffa Industries Inc.1,2	11,037		78,804
Lam Research Corp.1,2	28,915		752,657
Lattice Semiconductor Corp.1,2	23,361		116,104
Linear Technology Corp.	66,532		2,520,232
LSI Logic Corp.1	82,453		375,161
LTX Corp.1	12,856		83,564
Marvell Technology Group Ltd.1,2	41,019		1,171,913
Maxim Integrated Products Inc.	69,311		3,048,991

SCHEDULES OF INVESTMENTS 47

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
Micrel Inc.1	14,498	$	162,813
Microchip Technology Inc.	44,409		1,343,372
Micron Technology Inc.1	131,420		1,600,696
Mindspeed Technologies Inc.1,2	21,877		51,849
Mykrolis Corp.1	9,038		94,989
National Semiconductor Corp.1	76,946		1,284,998
Novellus Systems Inc.1	32,680		846,739
NVIDIA Corp.1	33,548		485,440
OmniVision Technologies Inc.1,2	12,294		195,475
Photronics Inc.1,2	6,112		107,266
PMC-Sierra Inc.1	38,375		393,728
Power Integrations Inc.1,2	6,551		140,191
QLogic Corp.1	20,310		660,075
Rambus Inc.1	20,562		353,255
Semtech Corp.1,2	16,088		335,917
Silicon Image Inc.1,2	15,307		209,706
Silicon Laboratories Inc.1,2	8,464		253,666
Siliconix Inc.1	1,339		55,448
Skyworks Solutions Inc.1,2	33,113		294,375
Teradyne Inc.1,2	41,705		690,635
Texas Instruments Inc.	372,209		9,100,510
Transmeta Corp.1,2	31,122		65,045
TriQuint Semiconductor Inc.1,2	27,256		97,031
Ultratech Inc.1	4,664		79,381
Varian Semiconductor Equipment Associates Inc.1,2	7,809		270,270
Vitesse Semiconductor Corp.1,2	46,303		125,944
Xilinx Inc.	74,628		2,283,617
Zoran Corp.1	9,251		93,343
			81,555,884
SOFTWARE – 24.80%
Actuate Corp.1	12,533		31,019
Adobe Systems Inc.	51,645		2,893,669
Advent Software Inc.1	6,698		139,720
Ascential Software Corp.1	12,831		180,789
Autodesk Inc.	24,339		1,283,882
BEA Systems Inc.1	83,111		674,861
BMC Software Inc.1	48,159		911,168
Borland Software Corp.1	17,261		176,753
Cerner Corp.1,2	6,059		273,564
Citrix Systems Inc.1	36,540		881,710
Computer Associates International Inc.	100,682		2,789,898
Compuware Corp.1	74,040		428,692
Dendrite International Inc.1	8,195		120,057
FileNET Corp.1,2	8,481		236,026
Hyperion Solutions Corp.1,2	8,484		340,463
IDX Systems Corp.1,2	4,573		153,356
Informatica Corp.1	18,239		142,447
Inter-Tel Inc.	4,316		116,532
Intuit Inc.1	37,709		1,710,480
JDA Software Group Inc.1	6,296		70,704
Keane Inc.1,2	11,738		185,578
Manugistics Group Inc.1	15,693		40,017
Mercury Interactive Corp.1,2	20,014		869,208
Micromuse Inc.1	16,925		72,608
Microsoft Corp.	2,205,367		61,728,222
MRO Software Inc.1	4,336		47,262
NetIQ Corp.1	12,424		157,536
Novell Inc.1,2	82,383		592,334
Oracle Corp.1	848,702		10,744,567
Packeteer Inc.1	6,711		82,814
Parametric Technology Corp.1	57,280		297,283
PeopleSoft Inc.1	71,685		1,488,897
Quest Software Inc.1,2	10,790		158,289
Red Hat Inc.1,2	37,207		477,738
Retek Inc.1	11,700		64,584
SERENA Software Inc.1,2	6,389		113,341
Siebel Systems Inc.1	97,722		928,359
Sybase Inc.1	20,668		327,174
Veritas Software Corp.1	93,047		2,035,868
Wind River Systems Inc.1	15,530		207,947
			94,175,416
TELECOMMUNICATIONS – 19.79%
Adaptec Inc.1,2	23,400		182,520
ADC Telecommunications Inc.1	173,782		384,058
ADTRAN Inc.	9,349		201,938
Advanced Fibre Communications Inc.1	19,005		296,858
Amdocs Ltd.1	35,541		893,856
American Tower Corp. Class A1,2	48,184		828,283
Andrew Corp.1	31,996		447,304
Arris Group Inc.1,2	13,577		63,133
Aspect Communications Corp.1	9,294		88,432

48 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares		Value
Avaya Inc.1		89,787	$	1,292,933
Black Box Corp.2		3,885		152,603
C-COR Inc.1		9,117		68,560
CIENA Corp.1		123,394		304,783
Cisco Systems Inc.1		1,454,252		27,936,181
CommScope Inc.1,2		9,811		176,696
Computer Network Technology Corp.1,2		5,778		23,863
Comverse Technology Inc.1		39,521		815,713
Corning Inc.1		299,830		3,433,054
Crown Castle International Corp.1,2		48,488		742,351
Extreme Networks Inc.1		24,238		141,792
Finisar Corp.1,2		37,193		54,674
Foundry Networks Inc.1		25,741		312,238
Harmonic Inc.1		14,004		116,513
Harris Corp.		14,371		884,248
InterDigital Communications Corp.1		11,966		190,259
JDS Uniphase Corp.1		297,310		942,473
Juniper Networks Inc.1		106,191		2,825,743
Lucent Technologies Inc.1,2		926,920		3,290,566
Motorola Inc.		504,039		8,699,713
MRV Communications Inc.1,2		22,221		77,107
Plantronics Inc.		10,359		450,617
Polycom Inc.1		21,504		444,058
Powerwave Technologies Inc.1		20,246		151,238
QUALCOMM Inc.		350,245		14,643,743
REMEC Inc.1,2		11,742		64,698
RF Micro Devices Inc.1,2		40,309		262,412
Scientific-Atlanta Inc.		32,909		901,378
SpectraSite Inc.1,2		9,804		502,945
Stratex Networks Inc.1		14,648		26,586
Sycamore Networks Inc.1		40,451		148,455
Tekelec1,2		13,589		303,306
Tellabs Inc.1,2		81,806		654,448
3Com Corp.1		84,788		351,023
UTStarcom Inc.1,2		21,602		369,826
				75,143,178
TOTAL COMMON STOCKS (Cost: $411,506,464)				379,747,413
Security	Principal		Value
SHORT-TERM INVESTMENTS – 6.77%
COMMERCIAL PAPER – 1.15%
Amsterdam Funding Corp.
1.79%, 11/08/043	$	127,716	$	127,671
Aspen Funding Corp.
1.85%, 11/01/043		488,725		488,725
Barton Capital Corp.
1.78%, 11/04/043		147,134		147,112
1.79%, 11/08/043		133,652		133,606
CRC Funding LLC
1.78%, 11/09/043		85,144		85,110
Delaware Funding Corp.
1.78%, 11/10/043		93,658		93,616
Edison Asset Securitization
1.45%, 11/09/043		170,288		170,233
1.59%, 12/02/043		170,288		170,054
Eureka Securitization Inc.
1.79%, 11/01/043		72,347		72,347
Ford Credit Auto Receivables
1.85%, 01/14/053		85,144		84,820
Grampian Funding LLC
1.59%, 11/30/043		85,144		85,035
Liberty Street Funding Corp.
1.80%, 11/12/043		42,572		42,548
Nationwide Building Society
1.63%, 12/09/043		141,339		141,096
Polonius Inc.
1.79%, 11/12/043		85,144		85,097
Prudential Funding LLC
1.60%, 12/01/043		85,144		85,030
1.85%, 11/01/043		425,719		425,719
Ranger Funding Co. LLC
1.79%, 11/01/043		97,622		97,622
Scaldis Capital LLC
1.78%, 11/08/043		383,147		383,014
Thames Asset Global Securitization No. 1 Inc.
1.81%, 11/12/043		99,610		99,555
UBS Finance (Delaware)
1.11%, 12/17/043		255,431		255,070
1.85%, 11/01/043		851,438		851,438

SCHEDULES OF INVESTMENTS 49

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Principal		Value
Windmill Funding Corp.
1.79%, 11/02/043	$	25,543	$	25,542
1.79%, 11/03/043		102,173		102,162
1.79%, 11/08/043		123,969		123,926
				4,376,148
FLOATING RATE NOTES – 2.05%
American Express Credit Corp.
1.95%, 10/26/053		170,288		170,378
Bank of Nova Scotia
1.85%, 09/26/053		42,572		42,555
Beta Finance Inc.
1.78%, 05/04/053,4		102,173		102,162
1.89%, 09/23/053,4		153,259		153,204
1.89%, 09/27/053,4		136,230		136,181
1.91%, 03/15/053,4		85,144		85,170
2.04%, 10/27/053,4		161,773		161,949
Canadian Imperial Bank of Commerce
1.79%, 09/13/053		255,431		255,359
1.90%, 10/31/053		170,288		170,244
CC USA Inc.
1.78%, 05/04/053,4		170,288		170,270
2.06%, 07/29/053,4		170,288		170,250
Den Danske Bank NY
1.79%, 08/12/053		170,288		170,248
1.87%, 08/26/053		170,288		170,246
2.00%, 10/17/053		170,288		170,239
Depfa Bank PLC
1.86%, 09/15/053		170,288		170,288
Dorada Finance Inc.
2.06%, 07/29/053,4		141,339		141,307
Five Finance Inc.
1.91%, 04/29/053,4		136,230		136,223
HBOS Treasury Services PLC
1.96%, 04/22/053		170,288		170,288
K2 USA LLC
1.81%, 09/12/053,4		170,288		170,258
1.82%, 06/10/053,4		170,288		170,275
1.89%, 10/20/053,4		170,288		170,293
2.05%, 07/25/053,4		85,144		85,131
Links Finance LLC
1.82%, 04/15/053,4		170,288		170,272
2.12%, 04/25/053		170,288		170,341
National City Bank (Ohio)
1.79%, 08/09/053		170,288		170,248
1.85%, 06/10/053		85,144		85,160
1.86%, 06/23/053		170,288		170,255
Nationwide Building Society
1.96%, 10/28/053,4		289,489		289,526
Norddeutsche Landesbank
2.04%, 07/27/053		170,288		170,244
Northern Rock PLC
1.90%, 10/25/053,4		340,575		340,575
2.02%, 01/13/053,4		161,773		161,773
Permanent Financing PLC
1.81%, 03/10/053		170,288		170,288
1.82%, 12/10/043		85,144		85,144
1.84%, 06/10/053		76,629		76,629
Sigma Finance Inc.
1.84%, 11/15/043		170,288		170,287
1.86%, 08/17/053		85,144		85,150
1.86%, 09/15/053		212,859		212,877
Tango Finance Corp.
1.66%, 05/17/053,4		141,339		141,335
1.70%, 02/25/053,4		95,361		95,356
1.80%, 04/07/053,4		62,496		62,493
1.83%, 01/18/053,4		74,927		74,925
1.84%, 09/15/053,4		149,853		149,832
1.90%, 07/25/053,4		170,288		170,275
WhistleJacket Capital LLC
1.83%, 07/15/053,4		127,716		127,697
1.83%, 09/15/053		127,716		127,693
1.83%, 10/14/053,4		85,144		85,136
1.84%, 06/15/053,4		85,144		85,132
White Pine Finance LLC
1.68%, 05/20/053		76,629		76,625
1.80%, 07/05/053		85,144		85,131
1.82%, 04/15/053,4		127,716		127,704
1.83%, 11/15/043,4		102,173		102,173
1.84%, 06/15/053,4		69,818		69,818
1.89%, 03/29/053		73,224		73,217
1.90%, 08/26/053,4		85,144		85,130
2.02%, 07/11/053		42,572		42,569
Winston Funding Ltd.
2.16%, 01/23/053,4		121,585		121,585
				7,775,113

50 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares or Principal		Value
MEDIUM-TERM NOTES – 0.14%
CC USA Inc.
1.29%, 04/15/053,4	$	170,288	$	170,280
1.51%, 02/15/053,4		110,687		110,737
Dorada Finance Inc.
1.48%, 01/18/053,4		127,716		127,714
K2 USA LLC
1.46%, 01/12/053,4		85,144		85,142
WhistleJacket Capital LLC
1.32%, 02/04/053,4		42,572		42,570
				536,443
MONEY MARKET FUNDS – 1.40%
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares3,5		681,150		681,150
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares3,5		2,657,950		2,657,950
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares3,5		1,873,164		1,873,164
BlackRock Temp Cash Money Market Fund3		38,166		38,166
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares3		69,497		69,497
				5,319,927
REPURCHASE AGREEMENTS – 1.08%
Banc of America Securities LLC
1.86%, 11/01/043,6		681,150		681,150
Bank of America N.A.
1.86%, 11/01/043,6		1,702,876		1,702,876
Goldman Sachs & Co.
1.86%, 11/01/043,6		1,702,876		1,702,876
				4,086,902
TIME DEPOSITS – 0.79%
Abbey National Treasury Services PLC
1.25%, 01/06/053		170,288		170,288
1.33%, 02/10/053		85,144		85,140
1.39%, 02/02/053		85,144		85,137
1.39%, 04/08/053		119,201		119,194
Security	Principal		Value
Bank of New York
1.39%, 11/01/043	$	170,288	$	170,288
1.60%, 12/03/043		42,572		42,571
Canadian Imperial Bank of Commerce
1.38%, 11/22/043		42,572		42,572
HBOS Treasury Services PLC
1.24%, 04/01/053		108,984		108,980
Key Bank N.A.
1.81%, 11/01/043		221,374		221,374
National City Bank (Ohio)
1.25%, 01/06/053		170,288		170,289
Nordea Bank PLC
2.11%, 06/07/053		170,288		170,268
Rabobank Nederland NV NY
1.85%, 11/01/043		340,575		340,575
Toronto-Dominion Bank
1.22%, 03/23/053		298,003		297,983
1.34%, 02/10/053		68,115		68,113
1.41%, 11/01/043		127,716		127,716
1.77%, 05/10/053		85,144		85,139
1.90%, 05/11/053		85,144		85,139
World Savings Bank FSB
1.76%, 11/12/043		604,521		604,517
				2,995,283
U.S. GOVERNMENT AGENCY NOTES – 0.16%
Federal Home Loan Mortgage Corp.
1.63%, 04/15/053		119,201		119,374
1.80%, 01/18/053		79,184		78,875
1.80%, 01/19/053		85,144		84,807
2.06%, 05/31/053		84,893		83,868
Federal National Mortgage Association
2.33%, 07/22/053		255,431		251,093
				618,017
TOTAL SHORT-TERM INVESTMENTS (Cost: $25,707,833)				25,707,833
TOTAL INVESTMENTS IN SECURITIES – 106.78% (Cost: $437,214,297)				405,455,246
Other Assets, Less Liabilities – (6.78%)				(25,760,976	)
NET ASSETS – 100.00%			$	379,694,270

SCHEDULES OF INVESTMENTS 51

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

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 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.

⁵ The Fund’s investment adviser is an affiliate of the issuer. See Note 2.

⁶ Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.57% to 8.00% and maturity dates ranging from 6/1/14 to 10/1/34.

INDUSTRY DIVERSIFICATION

Industry	Value			% of Net Assets
Computers	$	98,954,967		26.06	%
Software		94,175,416		24.80
Semiconductors		81,555,884		21.48
Telecommunications		75,143,178		19.79
Internet		22,339,430		5.88
Office & Business Equipment		5,270,511		1.39
Machinery		817,636		0.22
Electronics		544,837		0.14
Electrical Components & Equipment		317,816		0.08
Commercial Services		314,166		0.08
Entertainment		283,758		0.08
Pharmaceuticals		29,814		0.01
Short-Term and Other Net Assets		(53,143	)	(0.01	)
TOTAL	$	379,694,270		100.00	%

See notes to financial statements.

52 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

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

October 31, 2004

Security	Shares or Principal		Value
COMMON STOCKS – 100.03%
TELECOMMUNICATIONS – 100.03%
Alltel Corp.		287,855	$	15,811,875
AT&T Corp.		955,772		16,353,259
BCE Inc. (Canada)1		703,759		16,341,284
BellSouth Corp.		791,876		21,119,333
CenturyTel Inc.1		387,018		12,419,408
Cincinnati Bell Inc.1,2		616,896		2,103,615
Citizens Communications Co.1		596,763		7,996,624
IDT Corp.2		55,748		731,971
IDT Corp. Class B1,2		102,994		1,423,377
Level 3 Communications Inc.1,2		366,642		1,231,917
MCI Inc.		361,901		6,242,792
Nextel Communications Inc. Class A2		624,720		16,548,833
Nextel Partners Inc. Class A1,2		152,330		2,565,237
NII Holdings Inc. Class B1,2		90,512		4,006,966
Qwest Communications International Inc.2		1,603,989		5,485,643
SBC Communications Inc.		2,529,916		63,905,679
Sprint Corp. (FON Group)		783,533		16,415,016
Telephone & Data Systems Inc.		186,625		13,978,213
United States Cellular Corp.1,2		161,242		6,715,729
Verizon Communications Inc.		2,051,820		80,226,162
Vodafone Group PLC ADR1		635,430		16,387,740
Western Wireless Corp. Class A1,2		145,229		4,231,973
Wireless Facilities Inc.1,2		130,187		960,780
				333,203,426
TOTAL COMMON STOCKS (Cost: $335,749,394)				333,203,426
SHORT-TERM INVESTMENTS – 10.02%
COMMERCIAL PAPER – 1.72%
Amsterdam Funding Corp.
1.79%, 11/08/043		166,427		166,369
Aspen Funding Corp.
1.85%, 11/01/043		636,861		636,861
Barton Capital Corp.
1.78%, 11/04/043		191,731		191,702
1.79%, 11/08/043		174,162		174,102
Security	Principal		Value
CRC Funding LLC
1.78%, 11/09/043	$	110,951	$	110,907
Delaware Funding Corp.
1.78%, 11/10/043		122,046		121,992
Edison Asset Securitization
1.45%, 11/09/043		221,903		221,831
1.59%, 12/02/043		221,903		221,599
Eureka Securitization Inc.
1.79%, 11/01/043		94,275		94,275
Ford Credit Auto Receivables
1.85%, 01/14/053		110,951		110,529
Grampian Funding LLC
1.59%, 11/30/043		110,951		110,809
Liberty Street Funding Corp.
1.80%, 11/12/043		55,476		55,445
Nationwide Building Society
1.63%, 12/09/043		184,179		183,862
Polonius Inc.
1.79%, 11/12/043		110,951		110,891
Prudential Funding LLC
1.60%, 12/01/043		110,951		110,803
1.85%, 11/01/043		554,757		554,757
Ranger Funding Co. LLC
1.79%, 11/01/043		127,212		127,212
Scaldis Capital LLC
1.78%, 11/08/043		499,281		499,108
Thames Asset Global Securitization No. 1 Inc.
1.81%, 11/12/043		129,802		129,730
UBS Finance (Delaware)
1.11%, 12/17/043		332,854		332,382
1.85%, 11/01/043		1,109,513		1,109,513
Windmill Funding Corp.
1.79%, 11/02/043		33,285		33,284
1.79%, 11/03/043		133,142		133,128
1.79%, 11/08/043		161,545		161,489
				5,702,580
FLOATING RATE NOTES – 3.04%
American Express Credit Corp.
1.95%, 10/26/053		221,903		222,020

SCHEDULES OF INVESTMENTS 53

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Principal		Value
Bank of Nova Scotia
1.85%, 09/26/053	$	55,476	$	55,454
Beta Finance Inc.
1.78%, 05/04/053,4		133,142		133,128
1.89%, 09/23/053,4		199,712		199,642
1.89%, 09/27/053,4		177,522		177,458
1.91%, 03/15/053,4		110,951		110,984
2.04%, 10/27/053,4		210,807		211,036
Canadian Imperial Bank of Commerce
1.79%, 09/13/053		332,854		332,760
1.90%, 10/31/053		221,903		221,845
CC USA Inc.
1.78%, 05/04/053,4		221,903		221,880
2.06%, 07/29/053,4		221,903		221,853
Den Danske Bank NY
1.79%, 08/12/053		221,903		221,851
1.87%, 08/26/053		221,903		221,848
2.00%, 10/17/053		221,903		221,839
Depfa Bank PLC
1.86%, 09/15/053		221,903		221,903
Dorada Finance Inc.
2.06%, 07/29/053,4		184,179		184,138
Five Finance Inc.
1.91%, 04/29/053,4		177,522		177,513
HBOS Treasury Services PLC
1.96%, 04/22/053		221,903		221,903
K2 USA LLC
1.81%, 09/12/053,4		221,903		221,865
1.82%, 06/10/053,4		221,903		221,886
1.89%, 10/20/053,4		221,903		221,910
2.05%, 07/25/053,4		110,951		110,935
Links Finance LLC
1.82%, 04/15/053,4		221,903		221,883
2.12%, 04/25/053		221,903		221,972
National City Bank (Ohio)
1.79%, 08/09/053		221,903		221,851
1.85%, 06/10/053		110,951		110,973
1.86%, 06/23/053		221,903		221,860
Nationwide Building Society
1.96%, 10/28/053,4		377,234		377,283
Norddeutsche Landesbank
2.04%, 07/27/053		221,903		221,845
Northern Rock PLC
1.90%, 10/25/053,4		443,805		443,805
2.02%, 01/13/053,4		210,807		210,807
Permanent Financing PLC
1.81%, 03/10/053		221,903		221,903
1.82%, 12/10/043		110,951		110,952
1.84%, 06/10/053		99,856		99,856
Sigma Finance Inc.
1.84%, 11/15/043		221,903		221,902
1.86%, 08/17/053		110,951		110,960
1.86%, 09/15/053		277,378		277,400
Tango Finance Corp.
1.66%, 05/17/053,4		184,179		184,175
1.70%, 02/25/053,4		124,265		124,258
1.80%, 04/07/053,4		81,438		81,435
1.83%, 01/18/053,4		97,637		97,635
1.84%, 09/15/053,4		195,274		195,247
1.90%, 07/25/053,4		221,903		221,887
WhistleJacket Capital LLC
1.83%, 07/15/053,4		166,427		166,403
1.83%, 09/15/053		166,427		166,398
1.83%, 10/14/053,4		110,951		110,941
1.84%, 06/15/053,4		110,951		110,936
White Pine Finance LLC
1.68%, 05/20/053		99,856		99,851
1.80%, 07/05/053		110,951		110,935
1.82%, 04/15/053,4		166,427		166,412
1.83%, 11/15/043,4		133,142		133,142
1.84%, 06/15/053,4		90,980		90,980
1.89%, 03/29/053		95,418		95,409
1.90%, 08/26/053,4		110,951		110,933
2.02%, 07/11/053		55,476		55,471
Winston Funding Ltd.
2.16%, 01/23/053,4		158,438		158,438
				10,131,789
MEDIUM-TERM NOTES – 0.21%
CC USA Inc.
1.29%, 04/15/053,4		221,903		221,893
1.51%, 02/15/053,4		144,237		144,302

54 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares or Principal		Value
Dorada Finance Inc.
1.48%, 01/18/053,4	$	166,427	$	166,426
K2 USA LLC
1.46%, 01/12/053,4		110,951		110,949
WhistleJacket Capital LLC
1.32%, 02/04/053,4		55,476		55,473
				699,043
MONEY MARKET FUNDS – 2.04%
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares3,5		887,610		887,610
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares3,5		3,325,106		3,325,106
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares3,5		2,440,929		2,440,929
BlackRock Temp Cash Money Market Fund3		49,734		49,734
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares3		90,562		90,562
				6,793,941
REPURCHASE AGREEMENTS – 1.60%
Banc of America Securities LLC
1.86%, 11/01/043,6		887,610		887,610
Bank of America N.A.
1.86%, 11/01/043,6		2,219,026		2,219,026
Goldman Sachs & Co.
1.86%, 11/01/043,6		2,219,026		2,219,026
				5,325,662
TIME DEPOSITS – 1.17%
Abbey National Treasury Services PLC
1.25%, 01/06/053		221,903		221,900
1.33%, 02/10/053		110,951		110,947
1.39%, 02/02/053		110,951		110,947
1.39%, 04/08/053		155,332		155,322
Bank of New York
1.39%, 11/01/043		221,903		221,903
1.60%, 12/03/043		55,476		55,473
Security	Principal		Value
Canadian Imperial Bank of Commerce
1.38%, 11/22/043	$	55,476	$	55,476
HBOS Treasury Services PLC
1.24%, 04/01/053		142,018		142,012
Key Bank N.A.
1.81%, 11/01/043		288,473		288,474
National City Bank (Ohio)
1.25%, 01/06/053		221,903		221,905
Nordea Bank PLC
2.11%, 06/07/053		221,903		221,876
Rabobank Nederland NV NY
1.85%, 11/01/043		443,805		443,805
Toronto-Dominion Bank
1.22%, 03/23/053		388,330		388,304
1.34%, 02/10/053		88,761		88,757
1.41%, 11/01/043		166,427		166,427
1.77%, 05/10/053		110,951		110,946
1.90%, 05/11/053		110,951		110,946
World Savings Bank FSB
1.76%, 11/12/043		787,754		787,749
				3,903,169
U.S. GOVERNMENT AGENCY NOTES – 0.24%
Federal Home Loan Mortgage Corp.
1.63%, 04/15/053		155,332		155,557
1.80%, 01/18/053		103,185		102,782
1.80%, 01/19/053		110,951		110,513
2.06%, 05/31/053		110,625		109,289
Federal National Mortgage Association
2.33%, 07/22/053		332,854		327,200
				805,341
TOTAL SHORT-TERM INVESTMENTS (Cost: $33,361,525)				33,361,525
TOTAL INVESTMENTS IN SECURITIES – 110.05% (Cost: $369,110,919)				366,564,951
Other Assets, Less Liabilities – (10.05%)				(33,473,691	)
NET ASSETS – 100.00%			$	333,091,260

SCHEDULES OF INVESTMENTS 55

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

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 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.

⁵ The Fund’s investment adviser is an affiliate of the issuer. See Note 2.

⁶ Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.57% to 8.00% and maturity dates ranging from 6/1/14 to 10/1/34.

INDUSTRY DIVERSIFICATION

Industry	Value			% of Net Assets
Telecommunications	$	333,203,426		100.03	%
Short-Term and Other Net Assets		(112,166	)	(0.03	)
TOTAL	$	333,091,260		100.00	%

See notes to financial statements.

56 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

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

October 31, 2004

Security	Shares	Value
COMMON STOCKS – 99.89%
ELECTRIC – 87.74%
AES Corp. (The)1	841,628	$	9,173,745
Allegheny Energy Inc.1,2	174,385		3,192,989
Alliant Energy Corp.	155,513		4,102,433
Ameren Corp.	267,021		12,817,008
American Electric Power Co. Inc.	543,822		17,908,058
Aquila Inc.1,2	325,631		1,032,250
Avista Corp.	62,365		1,108,850
Black Hills Corp.2	44,793		1,319,602
Calpine Corp.1,2	612,057		1,524,022
CenterPoint Energy Inc.2	371,010		3,899,315
Cinergy Corp.	231,314		9,141,529
Cleco Corp.2	64,440		1,174,097
CMS Energy Corp.1,2	261,759		2,450,064
Consolidated Edison Inc.2	331,867		14,419,621
Constellation Energy Group Inc.	241,164		9,796,082
Dominion Resources Inc.	453,897		29,194,655
DPL Inc.2	164,871		3,561,214
DTE Energy Co.	238,779		10,198,251
Duke Energy Corp.	1,288,976		31,618,581
Duquesne Light Holdings Inc.2	105,160		1,804,546
Edison International	411,313		12,545,046
El Paso Electric Co.1	65,083		1,083,632
Energy East Corp.	201,960		5,089,392
Entergy Corp.	311,877		20,384,281
Exelon Corp.	907,373		35,950,118
FirstEnergy Corp.	453,354		18,737,121
FPL Group Inc.	234,162		16,133,762
Great Plains Energy Inc.2	101,998		2,905,923
Hawaiian Electric Industries Inc.2	110,384		3,095,167
IDACORP Inc.2	52,631		1,630,508
MDU Resources Group Inc.	149,277		3,828,955
NiSource Inc.	361,445		7,752,995
Northeast Utilities	176,123		3,404,458
NRG Energy Inc.1	115,436		3,202,195
NSTAR	72,841		3,603,444
OGE Energy Corp.2	120,349		3,053,254
Pepco Holdings Inc.	237,631		4,897,575
PG&E Corp.1	541,089		17,336,492
Pinnacle West Capital Corp.	125,708		5,357,675
PNM Resources Inc.2	75,331		1,753,706
PPL Corp.	259,644		13,501,488
Progress Energy Inc.	339,206		14,009,208
Public Service Enterprise Group Inc.	323,220		13,765,940
Puget Energy Inc.	136,641		3,178,270
Reliant Energy Inc.1,2	409,780		4,212,538
SCANA Corp.	138,889		5,152,782
Sierra Pacific Resources Corp.1,2	161,622		1,551,571
Southern Co. (The)	1,014,375		32,044,106
TECO Energy Inc.2	258,964		3,625,496
Texas Genco Holdings Inc.	20,856		973,975
TXU Corp.	407,959		24,975,250
UniSource Energy Corp.2	43,748		1,075,763
Westar Energy Inc.	117,443		2,460,431
Wisconsin Energy Corp.	161,901		5,284,449
WPS Resources Corp.2	51,160		2,430,100
Xcel Energy Inc.	549,527		9,396,912
			478,820,890
GAS – 8.90%
AGL Resources Inc.	81,907		2,555,498
Atmos Energy Corp.	103,609		2,674,148
Energen Corp.2	45,005		2,420,369
KeySpan Corp.	218,617		8,733,749
New Jersey Resources Corp.2	38,071		1,565,099
Nicor Inc.2	60,477		2,269,097
Northwest Natural Gas Co.2	37,527		1,189,606
NUI Corp.2	21,996		296,066
ONEOK Inc.2	132,217		3,546,060
Peoples Energy Corp.	51,553		2,205,437
Piedmont Natural Gas Co.2	49,427		2,250,411
Sempra Energy	280,137		9,395,795
Southern Union Co.1,2	99,020		2,175,470
UGI Corp.	69,727		2,693,554
Vectren Corp.	104,330		2,699,017
WGL Holdings Inc.2	66,797		1,900,375
			48,569,751
PIPELINES – 2.74%
Dynegy Inc. Class A1,2	389,620		1,920,827
Equitable Resources Inc.	80,574		4,455,742
National Fuel Gas Co.2	107,341		3,007,695
Questar Corp.	115,621		5,549,808
			14,934,072

SCHEDULES OF INVESTMENTS 57

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares or Principal		Value
WATER – 0.51%
Aqua America Inc.		126,939	$	2,774,887
				2,774,887
TOTAL COMMON STOCKS (Cost: $471,403,329)				545,099,600
SHORT-TERM INVESTMENTS – 9.62%
COMMERCIAL PAPER – 1.63%
Amsterdam Funding Corp.
1.79%, 11/08/043	$	260,443		260,353
Aspen Funding Corp.
1.85%, 11/01/043		996,629		996,629
Barton Capital Corp.
1.78%, 11/04/043		300,041		299,996
1.79%, 11/08/043		272,549		272,454
CRC Funding LLC
1.78%, 11/09/043		173,629		173,560
Delaware Funding Corp.
1.78%, 11/10/043		190,992		190,907
Edison Asset Securitization
1.45%, 11/09/043		347,258		347,146
1.59%, 12/02/043		347,258		346,782
Eureka Securitization Inc.
1.79%, 11/01/043		147,532		147,532
Ford Credit Auto Receivables
1.85%, 01/14/053		173,629		172,969
Grampian Funding LLC
1.59%, 11/30/043		173,629		173,406
Liberty Street Funding Corp.
1.80%, 11/12/043		86,814		86,767
Nationwide Building Society
1.63%, 12/09/043		288,224		287,728
Polonius Inc.
1.79%, 11/12/043		173,629		173,534
Prudential Funding LLC
1.60%, 12/01/043		173,629		173,397
1.85%, 11/01/043		868,144		868,144
Ranger Funding Co. LLC
1.79%, 11/01/043		199,076		199,076
Scaldis Capital LLC
1.78%, 11/08/043		781,330		781,059
Security	Principal		Value
Thames Asset Global Securitization No. 1 Inc.
1.81%, 11/12/043	$	203,128	$	203,016
UBS Finance (Delaware)
1.11%, 12/17/043		520,886		520,148
1.85%, 11/01/043		1,736,288		1,736,288
Windmill Funding Corp.
1.79%, 11/02/043		52,089		52,086
1.79%, 11/03/043		208,355		208,334
1.79%, 11/08/043		252,804		252,716
				8,924,027
FLOATING RATE NOTES – 2.91%
American Express Credit Corp.
1.95%, 10/26/053		347,258		347,442
Bank of Nova Scotia
1.85%, 09/26/053		86,814		86,780
Beta Finance Inc.
1.78%, 05/04/053,4		208,355		208,334
1.89%, 09/23/053,4		312,532		312,420
1.89%, 09/27/053,4		277,806		277,706
1.91%, 03/15/053,4		173,629		173,681
2.04%, 10/27/053,4		329,895		330,252
Canadian Imperial Bank of Commerce
1.79%, 09/13/053		520,886		520,739
1.90%, 10/31/053		347,258		347,168
CC USA Inc.
1.78%, 05/04/053,4		347,258		347,223
2.06%, 07/29/053,4		347,258		347,180
Den Danske Bank NY
1.79%, 08/12/053		347,258		347,177
1.87%, 08/26/053		347,258		347,173
2.00%, 10/17/053		347,258		347,158
Depfa Bank PLC
1.86%, 09/15/053		347,258		347,258
Dorada Finance Inc.
2.06%, 07/29/053,4		288,224		288,160
Five Finance Inc.
1.91%, 04/29/053,4		277,806		277,792
HBOS Treasury Services PLC
1.96%, 04/22/053		347,258		347,258

58 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Principal		Value
K2 USA LLC
1.81%, 09/12/053,4	$	347,258	$	347,198
1.82%, 06/10/053,4		347,258		347,232
1.89%, 10/20/053,4		347,258		347,269
2.05%, 07/25/053,4		173,629		173,603
Links Finance LLC
1.82%, 04/15/053,4		347,258		347,226
2.12%, 04/25/053		347,258		347,367
National City Bank (Ohio)
1.79%, 08/09/053		347,258		347,178
1.85%, 06/10/053		173,629		173,662
1.86%, 06/23/053		347,258		347,191
Nationwide Building Society
1.96%, 10/28/053,4		590,338		590,414
Norddeutsche Landesbank
2.04%, 07/27/053		347,258		347,168
Northern Rock PLC
1.90%, 10/25/053,4		694,515		694,515
2.02%, 01/13/053,4		329,895		329,895
Permanent Financing PLC
1.81%, 03/10/053		347,258		347,258
1.82%, 12/10/043		173,629		173,629
1.84%, 06/10/053		156,266		156,266
Sigma Finance Inc.
1.84%, 11/15/043		347,258		347,257
1.86%, 08/17/053		173,629		173,641
1.86%, 09/15/053		434,072		434,107
Tango Finance Corp.
1.66%, 05/17/053,4		288,224		288,216
1.70%, 02/25/053,4		194,464		194,452
1.80%, 04/07/053,4		127,444		127,438
1.83%, 01/18/053,4		152,793		152,790
1.84%, 09/15/053,4		305,587		305,545
1.90%, 07/25/053,4		347,258		347,232
WhistleJacket Capital LLC
1.83%, 07/15/053,4		260,443		260,406
1.83%, 09/15/053		260,443		260,398
1.83%, 10/14/053,4		173,629		173,612
1.84%, 06/15/053,4		173,629		173,604
Security	Shares or Principal		Value
White Pine Finance LLC
1.68%, 05/20/053	$	156,266	$	156,257
1.80%, 07/05/053		173,629		173,603
1.82%, 04/15/053,4		260,443		260,420
1.83%, 11/15/043,4		208,355		208,355
1.84%, 06/15/053,4		142,376		142,376
1.89%, 03/29/053		149,321		149,308
1.90%, 08/26/053,4		173,629		173,600
2.02%, 07/11/053		86,814		86,808
Winston Funding Ltd.
2.16%, 01/23/053,4		247,942		247,942
				15,855,339
MEDIUM-TERM NOTES – 0.20%
CC USA Inc.
1.29%, 04/15/053,4		347,258		347,242
1.51%, 02/15/053,4		225,717		225,819
Dorada Finance Inc.
1.48%, 01/18/053,4		260,443		260,440
K2 USA LLC
1.46%, 01/12/053,4		173,629		173,625
WhistleJacket Capital LLC
1.32%, 02/04/053,4		86,814		86,810
				1,093,936
MONEY MARKET FUNDS – 2.00%
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares3,5		1,389,030		1,389,030
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares3,5		5,510,088		5,510,088
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares3,5		3,819,834		3,819,834
BlackRock Temp Cash Money Market Fund3		77,830		77,830
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares3		141,722		141,722
				10,938,504

SCHEDULES OF INVESTMENTS 59

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Principal		Value
REPURCHASE AGREEMENTS – 1.53%
Banc of America Securities LLC
1.86%, 11/01/043,6	$	1,389,030	$	1,389,030
Bank of America N.A.
1.86%, 11/01/043,6		3,472,576		3,472,576
Goldman Sachs & Co.
1.86%, 11/01/043,6		3,472,576		3,472,576
				8,334,182
TIME DEPOSITS – 1.12%
Abbey National Treasury Services PLC
1.25%, 01/06/053		347,258		347,258
1.33%, 02/10/053		173,629		173,616
1.39%, 02/02/053		173,629		173,622
1.39%, 04/08/053		243,080		243,065
Bank of New York
1.39%, 11/01/043		347,258		347,258
1.60%, 12/03/043		86,814		86,811
Canadian Imperial Bank of Commerce
1.38%, 11/22/043		86,814		86,815
HBOS Treasury Services PLC
1.24%, 04/01/053		222,245		222,236
Key Bank N.A.
1.81%, 11/01/043		451,435		451,435
National City Bank (Ohio)
1.25%, 01/06/053		347,258		347,261
Nordea Bank PLC
2.11%, 06/07/053		347,258		347,216
Rabobank Nederland NV NY
1.85%, 11/01/043		694,515		694,515
Toronto-Dominion Bank
1.22%, 03/23/053		607,701		607,659
1.34%, 02/10/053		138,903		138,897
1.41%, 11/01/043		260,443		260,443
1.77%, 05/10/053		173,629		173,620
1.90%, 05/11/053		173,629		173,620
World Savings Bank FSB
1.76%, 11/12/043		1,232,765		1,232,758
				6,108,105
U.S. GOVERNMENT AGENCY NOTES – 0.23%
Federal Home Loan Mortgage Corp.
1.63%, 04/15/053		243,080		243,432
1.80%, 01/18/053		161,475		160,845
1.80%, 01/19/053		173,629		172,943
2.06%, 05/31/053		173,118		171,028
Federal National Mortgage Association
2.33%, 07/22/053		520,886		512,039
				1,260,287
TOTAL SHORT-TERM INVESTMENTS (Cost: $52,514,380)				52,514,380
TOTAL INVESTMENTS IN SECURITIES – 109.51% (Cost: $523,917,709)				597,613,980
Other Assets, Less Liabilities – (9.51%)				(51,906,487	)
NET ASSETS – 100.00%			$	545,707,493

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 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.

⁵ The Fund’s investment adviser is an affiliate of the issuer. See Note 2.

⁶ Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.57% to 8.00% and maturity dates ranging from 6/1/14 to 10/1/34.

INDUSTRY DIVERSIFICATION

Industry	Value		% of Net Assets
Electric	$	478,820,890	87.74	%
Gas		48,569,751	8.90
Pipelines		14,934,072	2.74
Water		2,774,887	0.51
Short-Term and Other Net Assets		607,893	0.11
TOTAL	$	545,707,493	100.00	%

See notes to financial statements.

60 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

iSHARES^® DOW JONES SELECT DIVIDEND INDEX FUND

October 31, 2004

Security	Shares	Value
COMMON STOCKS – 99.73%
AGRICULTURE – 5.41%
Altria Group Inc.	2,645,600	$	128,205,775
Universal Corp.	1,496,190		68,495,578
			196,701,353
AUTO MANUFACTURERS – 2.11%
General Motors Corp.	1,987,465		76,616,776
			76,616,776
BANKS – 33.02%
AmSouth Bancorp	1,995,259		52,654,885
Associated Bancorp	2,380,522		82,580,308
Bank of America Corp.	4,071,564		182,365,352
Citizens Banking Corp.	1,735,337		56,832,287
Colonial BancGroup Inc. (The)	1,622,731		35,132,126
Comerica Inc.	1,867,217		114,852,518
FirstMerit Corp.	1,987,315		51,928,541
FNB Corp. (Pennsylvania)	2,932,084		60,195,684
Hibernia Corp. Class A	1,547,096		44,865,784
Hudson United Bancorp	1,643,842		65,424,912
Huntington Bancshares Inc.	1,575,904		37,742,901
KeyCorp	2,135,985		71,747,736
National City Corp.	1,900,550		74,064,433
PNC Financial Services Group	1,858,477		97,198,347
Provident Bankshares Corp.	1,635,735		56,809,077
Sky Financial Group Inc.	1,639,950		44,081,856
Whitney Holding Corp.	1,673,995		73,002,922
			1,201,479,669
CHEMICALS – 11.73%
Dow Chemical Co. (The)	1,657,771		74,500,229
Eastman Chemical Co.	2,292,990		108,848,235
Lubrizol Corp.	1,693,418		58,812,407
Lyondell Chemical Co.	2,847,597		65,437,779
PPG Industries Inc.	1,379,142		87,920,302
RPM International Inc.	1,782,221		31,420,556
			426,939,508
COMMERCIAL SERVICES – 1.59%
Donnelley (R.R.) & Sons Co.	1,839,719		57,859,163
			57,859,163
DISTRIBUTION & WHOLESALE – 1.95%
Genuine Parts Co.	1,782,515		71,104,523
			71,104,523
DIVERSIFIED FINANCIAL SERVICES – 2.00%
JP Morgan Chase & Co.	1,889,653		72,940,606
			72,940,606
ELECTRIC – 19.38%
Black Hills Corp.	2,107,706		62,093,019
DTE Energy Co.	2,621,783		111,976,352
Duquesne Light Holdings Inc.	2,826,537		48,503,375
Energy East Corp.	2,176,051		54,836,485
FirstEnergy Corp.	2,113,782		87,362,610
FPL Group Inc.	1,865,573		128,537,980
NiSource Inc.	2,190,565		46,987,619
Pinnacle West Capital Corp.	2,289,132		97,562,806
PPL Corp.	1,297,009		67,444,468
			705,304,714
FOREST PRODUCTS & PAPER – 1.36%
MeadWestvaco Corp.	1,571,923		49,562,732
			49,562,732
GAS – 2.50%
Nicor Inc.	2,420,684		90,824,064
			90,824,064
INSURANCE – 4.71%
Lincoln National Corp.	1,748,159		76,569,364
Unitrin Inc.	2,192,709		94,681,175
			171,250,539
OIL & GAS – 3.61%
Marathon Oil Corp.	1,595,234		60,794,368
Occidental Petroleum Corp.	1,263,284		70,529,146
			131,323,514
PACKAGING & CONTAINERS – 1.29%
Sonoco Products Co.	1,763,628		47,000,686
			47,000,686
PHARMACEUTICALS – 1.33%
Bristol-Myers Squibb Co.	2,058,430		48,229,015
			48,229,015

SCHEDULES OF INVESTMENTS 61

Schedule of Investments (Unaudited) (Continued)

iSHARES^® DOW JONES SELECT DIVIDEND INDEX FUND

October 31, 2004

Security	Shares		Value
SAVINGS & LOANS – 4.87%
People’s Bank		3,550,943	$	133,124,853
Washington Federal Inc.		1,732,196		44,205,642
				177,330,495
TELECOMMUNICATIONS – 2.87%
BellSouth Corp.		1,807,054		48,194,130
SBC Communications Inc.		2,233,343		56,414,244
				104,608,374
TOTAL COMMON STOCKS (Cost: $3,428,890,877)				3,629,075,731
SHORT-TERM INVESTMENTS – 0.07%
MONEY MARKET FUNDS – 0.07%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares1		2,368,807		2,368,807
				2,368,807
TOTAL SHORT-TERM INVESTMENTS (Cost: $2,368,807)				2,368,807
TOTAL INVESTMENTS IN SECURITIES – 99.80% (Cost: $3,431,259,684)				3,631,444,538
Other Assets, Less Liabilities – 0.20%				7,430,621
NET ASSETS – 100.00%			$	3,638,875,159
1   The Fund’s investment adviser is an affiliate of the issuer. See Note 2.
SECTOR DIVERSIFICATION
Sector	Value		% of Net Assets
Financial	$	1,623,001,309		44.60	%
Utilities		796,128,778		21.88
Basic Materials		476,502,240		13.09
Consumer Non-Cyclical		302,789,531		8.33
Consumer Cyclical		147,721,299		4.06
Energy		131,323,514		3.61
Communications		104,608,374		2.87
Industrial		47,000,686		1.29
Short-Term and Other Net Assets		9,799,428		0.27
TOTAL	$	3,638,875,159		100.00	%

See notes to financial statements.

62 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

iSHARES^® DOW JONES TRANSPORTATION AVERAGE INDEX FUND

October 31, 2004

Security	Shares	Value
COMMON STOCKS – 99.99%
AIRLINES – 7.41%
Alaska Air Group Inc.1	19,374	$	510,311
AMR Corp.1	112,227		866,393
Continental Airlines Inc. Class B1	115,391		1,070,828
Delta Air Lines Inc.1	110,099		600,040
JetBlue Airways Corp.1	18,530		408,586
Northwest Airlines Corp.1	53,845		476,528
SkyWest Inc.	30,794		525,962
Southwest Airlines Co.	116,663		1,839,776
			6,298,424
TRANSPORTATION – 88.83%
Alexander & Baldwin Inc.	104,999		3,848,738
Burlington Northern Santa Fe Corp.	101,586		4,247,311
CH Robinson Worldwide Inc.	78,523		4,235,531
CNF Inc.	96,110		4,207,696
CSX Corp.	115,667		4,221,846
Expeditors International Washington Inc.	124,181		7,090,735
FedEx Corp.	113,063		10,302,301
Hunt (J.B.) Transport Services Inc.	100,491		4,106,062
Norfolk Southern Corp.	118,431		4,020,732
Ryder System Inc.	115,693		5,796,219
Union Pacific Corp.	98,223		6,185,102
United Parcel Service Inc. Class B	119,445		9,457,655
USF Corp.	101,362		3,632,814
Yellow Roadway Corp.1	87,691		4,208,291
			75,561,033
TRUCKING & LEASING – 3.75%
GATX Corp.	116,882		3,188,541
			3,188,541
TOTAL COMMON STOCKS (Cost: $78,365,566)			85,047,998
SHORT-TERM INVESTMENTS – 0.07%
MONEY MARKET FUNDS – 0.07%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares2	60,875		60,875
			60,875
TOTAL SHORT-TERM INVESTMENTS (Cost: $60,875)			60,875
TOTAL INVESTMENTS IN SECURITIES – 100.06% (Cost: $78,426,441)			85,108,873
Other Assets, Less Liabilities – (0.06%)			(50,321	)
NET ASSETS – 100.00%		$	85,058,552

¹ Non-income earning security.

² The Fund’s investment adviser is an affiliate of the issuer. See Note 2.

INDUSTRY DIVERSIFICATION

Industry	Value		% of Net Assets
Transportation	$	75,561,033	88.83	%
Airlines		6,298,424	7.41
Trucking & Leasing		3,188,541	3.75
Short-Term and Other Net Assets		10,554	0.01
TOTAL	$	85,058,552	100.00	%

See notes to financial statements.

SCHEDULES OF INVESTMENTS 63

Statements of Assets and Liabilities (Unaudited)

iSHARES^® TRUST

October 31, 2004

	iShares Dow Jones U.S.
	Total Market Index Fund			Energy Sector Index Fund			Healthcare Sector Index Fund			Technology Sector Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	371,586,782		$	387,038,848		$	755,141,946		$	432,002,033
Affiliated issuersa	$	5,306,133		$	5,549,991		$	10,280,209		$	5,212,264
Investments in securities, at value (including securities on loanb) (Note 1):
Unaffiliated issuers	$	410,167,139		$	482,404,243		$	715,065,685		$	400,242,982
Affiliated issuersa		5,306,133			5,549,991			10,280,209			5,212,264
Receivables:
Investment securities sold		—			195,364			—			146,984
Dividends and interest		463,292			248,207			475,611			17,260
Capital shares sold		—			—			230			—
Total Assets		415,936,564			488,397,805			725,821,735			405,619,490
LIABILITIES
Payables:
Collateral for securities on loan (Note 5)		25,222,288			27,420,323			50,418,802			25,601,563
Investment advisory fees (Note 2)		128,916			449,682			686,253			323,657
Total Liabilities		25,351,204			27,870,005			51,105,055			25,925,220
NET ASSETS	$	390,585,360		$	460,527,800		$	674,716,680		$	379,694,270
Net assets consist of:
Paid-in capital	$	366,383,692		$	367,290,665		$	725,339,370		$	454,392,086
Undistributed (distributions in excess of) net investment income (accumulated net investment loss)		651,654			(20,663	)		136,646			(321,874	)
Accumulated net realized loss		(15,030,343	)		(2,107,597	)		(10,683,075	)		(42,616,891	)
Net unrealized appreciation (depreciation)		38,580,357			95,365,395			(40,076,261	)		(31,759,051	)
NET ASSETS	$	390,585,360		$	460,527,800		$	674,716,680		$	379,694,270
Shares outstanding		7,250,000			7,400,000			12,350,000			8,350,000
Net asset value per share	$	53.87		$	62.23		$	54.63		$	45.47

^a The Funds’ investment adviser is an affiliate of the issuers.

^b Securities on loan with market values of $24,412,009, $26,562,550, $48,909,658 and $24,648,742, respectively. See Note 5.

See notes to financial statements.

64 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Assets and Liabilities (Unaudited) (Continued)

iSHARES^® TRUST

October 31, 2004

	iShares Dow Jones U.S.						iShares Dow Jones
	Telecommunications Sector Index Fund			Utilities Sector Index Fund			Select Dividend Index Fund			Transportation Average Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	362,457,274		$	513,198,757		$	3,428,890,877		$	78,365,566
Affiliated issuersa	$	6,653,645		$	10,718,952		$	2,368,807		$	60,875
Investments in securities, at value (including securities on loanb) (Note 1):
Unaffiliated issuers	$	359,911,306		$	586,895,028		$	3,629,075,731		$	85,047,998
Affiliated issuersa		6,653,645			10,718,952			2,368,807			60,875
Receivables:
Investment securities sold		5,824,989			—			7,449,426			—
Dividends and interest		1,880,633			1,311,480			9,552,377			87
Capital shares sold		—			—			66,325			—
Capital shares redeemed		—			—			—			12,867
Total Assets		374,270,573			598,925,460			3,648,512,666			85,121,827
LIABILITIES
Payables:
Investment securities purchased		7,330,398			507,150			7,430,870			—
Collateral for securities on loan (Note 5)		33,361,525			52,207,782			—			—
Due to bank		167,764			—			—			—
Investment advisory fees (Note 2)		319,626			503,035			2,206,637			63,275
Total Liabilities		41,179,313			53,217,967			9,637,507			63,275
NET ASSETS	$	333,091,260		$	545,707,493		$	3,638,875,159		$	85,058,552
Net assets consist of:
Paid-in capital	$	357,510,196		$	490,067,452		$	3,435,345,494		$	76,169,700
Undistributed (distributions in excess of) net investment income		1,675,374			890,806			(399,307	)		(49,119	)
Undistributed net realized gain (accumulated net realized loss)		(23,548,342	)		(18,947,036	)		3,744,118			2,255,539
Net unrealized appreciation (depreciation)		(2,545,968	)		73,696,271			200,184,854			6,682,432
NET ASSETS	$	333,091,260		$	545,707,493		$	3,638,875,159		$	85,058,552
Shares outstanding		14,550,000			8,450,000			62,450,000			1,350,000
Net asset value per share	$	22.89		$	64.58		$	58.27		$	63.01

^a The Funds’ investment adviser is an affiliate of the issuers.

^b Securities on loan with market values of $32,200,519, $50,644,932, $- and $-, respectively. See Note 5.

See notes to financial statements.

FINANCIAL STATEMENTS 65

Statements of Operations (Unaudited)

iSHARES^® TRUST

For the six months ended October 31, 2004

	iShares Dow Jones U.S.
	Total Market Index Fund			Energy Sector Index Fund		Healthcare Sector Index Fund			Technology Sector Index Fund
NET INVESTMENT INCOME
Dividendsa	$	3,273,309		$	4,004,604	$	4,492,098		$	652,862
Interestb		2,142			1,635		2,436			986
Securities lending incomeb		16,235			13,681		34,083			12,869
Total investment income		3,291,686			4,019,920		4,528,617			666,717
EXPENSES (Note 2)
Investment advisory fees		385,946			1,222,128		2,045,854			989,817
Total expenses		385,946			1,222,128		2,045,854			989,817
Net investment income (loss)		2,905,740			2,797,792		2,482,763			(323,100	)
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments		(1,439,740	)		602,864		(2,304,628	)		(6,368,995	)
In-kind redemptions		—			4,483,801		2,642,757			8,255,616
Net realized gain (loss)		(1,439,740	)		5,086,665		338,129			1,886,621
Net change in unrealized appreciation (depreciation)		10,666,036			57,266,195		(52,153,879	)		5,701,589
Net realized and unrealized gain (loss)		9,226,296			62,352,860		(51,815,750	)		7,588,210
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	12,132,036		$	65,150,652	$	(49,332,987	)	$	7,265,110

^a Net of foreign withholding tax of $281, $-, $45 and $-, respectively.

^b Includes income earned from issuers of which the Funds’ investment adviser is an affiliate. See Note 2.

See notes to financial statements.

66 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations (Unaudited) (Continued)

iSHARES^® TRUST

For the six months ended October 31, 2004

	iShares Dow Jones U.S.						iShares Dow Jones
	Telecommunications Sector Index Fund			Utilities Sector Index Fund			Select Dividend Index Fund			Transportation Average Index Fund
NET INVESTMENT INCOME
Dividendsa	$	5,455,869		$	8,934,791		$	51,868,688		$	171,306
Interestb		1,218			2,641			11,684			166
Securities lending incomeb		10,028			40,612			—			—
Total investment income		5,467,115			8,978,044			51,880,372			171,472
EXPENSES (Note 2)
Investment advisory fees		831,316			1,430,242			5,406,364			117,096
Total expenses		831,316			1,430,242			5,406,364			117,096
Net investment income		4,635,799			7,547,802			46,474,008			54,376
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments		(3,900,599	)		(2,074,062	)		(3,702,076	)		(165,469	)
In-kind redemptions		8,521,947			9,416,754			9,281,805			2,565,495
Net realized gain		4,621,348			7,342,692			5,579,729			2,400,026
Net change in unrealized appreciation (depreciation)		11,411,602			48,287,564			225,927,073			7,267,547
Net realized and unrealized gain		16,032,950			55,630,256			231,506,802			9,667,573
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	20,668,749		$	63,178,058		$	277,980,810		$	9,721,949

^a Net of foreign withholding tax of $53,273, $-, $- and $-, respectively.

^b Includes income earned from issuers of which the Funds’ investment adviser is an affiliate. See Note 2.

See notes to financial statements.

FINANCIAL STATEMENTS 67

Statements of Changes in Net Assets

iSHARES^® TRUST

	iShares Dow Jones U.S. Total Market Index Fund						iShares Dow Jones U.S. Energy Sector Index Fund						iShares Dow Jones U.S. Healthcare Sector Index Fund
	For the six months ended October 31, 2004 (Unaudited)			For the year ended April 30, 2004			For the six months ended October 31, 2004 (Unaudited)			For the year ended April 30, 2004			For the six months ended October 31, 2004 (Unaudited)			For the year ended April 30, 2004
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	2,905,740		$	4,345,347		$	2,797,792		$	2,744,411		$	2,482,763		$	3,383,432
Net realized gain (loss)		(1,439,740	)		(4,843,350	)		5,086,665			(637,683	)		338,129			8,044,713
Net change in unrealized appreciation (depreciation)		10,666,036			54,403,071			57,266,195			57,339,569			(52,153,879	)		58,562,480
Net increase (decrease) in net assets resulting from operations		12,132,036			53,905,068			65,150,652			59,446,297			(49,332,987	)		69,990,625
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(2,703,629	)		(4,143,218	)		(2,818,455	)		(2,776,640	)		(2,460,986	)		(3,327,668	)
Return of capital		—			—			—			(83,630	)		—			—
Total distributions to shareholders		(2,703,629	)		(4,143,218	)		(2,818,455	)		(2,860,270	)		(2,460,986	)		(3,327,668	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		—			155,798,668			63,299,917			180,253,831			85,964,230			264,504,795
Cost of shares redeemed		—			—			(13,627,870	)		—			(11,250,958	)		(57,859,030	)
Net increase in net assets from capital share transactions		—			155,798,668			49,672,047			180,253,831			74,713,272			206,645,765
INCREASE IN NET ASSETS		9,428,407			205,560,518			112,004,244			236,839,858			22,919,299			273,308,722
NET ASSETS:
Beginning of period		381,156,953			175,596,435			348,523,556			111,683,698			651,797,381			378,488,659
End of period	$	390,585,360		$	381,156,953		$	460,527,800		$	348,523,556		$	674,716,680		$	651,797,381
Undistributed (distributions in excess of) net investment income included in net assets at end of period	$	651,654		$	449,543		$	(20,663	)	$	—		$	136,646		$	114,869
SHARES ISSUED AND REDEEMED:
Shares sold		—			3,150,000			1,100,000			3,700,000			1,500,000			4,650,000
Shares redeemed		—			—			(250,000	)		—			(200,000	)		(1,050,000	)
Net increase in shares outstanding		—			3,150,000			850,000			3,700,000			1,300,000			3,600,000

See notes to financial statements.

68 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST

	iShares Dow Jones U.S. Technology Sector Index Fund						iShares Dow Jones U.S. Telecommunications Sector Index Fund						iShares Dow Jones U.S. Utilities Index Fund
	For the six months ended October 31, 2004 (Unaudited)			For the year ended April 30, 2004			For the six months ended October 31, 2004 (Unaudited)			For the year ended April 30, 2004			For the six months ended October 31, 2004 (Unaudited)			For the year ended April 30, 2004
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss)	$	(323,100	)	$	(752,929	)	$	4,635,799		$	3,616,438		$	7,547,802		$	15,193,934
Net realized gain		1,886,621			8,610,955			4,621,348			10,902,867			7,342,692			15,019,265
Net change in unrealized appreciation (depreciation)		5,701,589			59,914,428			11,411,602			8,420,637			48,287,564			48,099,210
Net increase in net assets resulting from operations		7,265,110			67,772,454			20,668,749			22,939,942			63,178,058			78,312,409
Undistributed net investment income included in the price of capital shares issued or redeemed		—			—			—			—			218,500			324,500
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		—			—			(4,014,255	)		(3,301,807	)		(7,499,875	)		(15,072,614	)
Total distributions to shareholders		—			—			(4,014,255	)		(3,301,807	)		(7,499,875	)		(15,072,614	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		88,286,707			108,361,174			161,563,061			165,926,674			93,477,450			171,615,651
Cost of shares redeemed		(38,393,651	)		(85,098,863	)		(60,883,153	)		(96,052,816	)		(44,156,372	)		(123,745,313	)
Net increase in net assets from capital share transactions		49,893,056			23,262,311			100,679,908			69,873,858			49,321,078			47,870,338
INCREASE IN NET ASSETS		57,158,166			91,034,765			117,334,402			89,511,993			105,217,761			111,434,633
NET ASSETS:
Beginning of period		322,536,104			231,501,339			215,756,858			126,244,865			440,489,732			329,055,099
End of period	$	379,694,270		$	322,536,104		$	333,091,260		$	215,756,858		$	545,707,493		$	440,489,732
Undistributed net investment income (accumulated net investment loss) included in net assets at end of period	$	(321,874	)	$	1,226		$	1,675,374		$	1,053,830		$	890,806		$	842,879
SHARES ISSUED AND REDEEMED:
Shares sold		2,000,000			2,550,000			7,400,000			7,700,000			1,550,000			3,200,000
Shares redeemed		(900,000	)		(1,850,000	)		(2,850,000	)		(4,550,000	)		(750,000	)		(2,250,000	)
Net increase in shares outstanding		1,100,000			700,000			4,550,000			3,150,000			800,000			950,000

See notes to financial statements.

FINANCIAL STATEMENTS 69

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST

	iShares Dow Jones Select Dividend Index Fund						iShares Dow Jones Transportation Average Index Fund
	For the six months ended October 31, 2004 (Unaudited)			For the period November 3, 2003a to April 30, 2004			For the six months ended October 31, 2004 (Unaudited)			For the period October 6, 2003a to April 30, 2004
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	46,474,008		$	15,828,660		$	54,376		$	49,356
Net realized gain		5,579,729			1,731,928			2,400,026			1,181,479
Net change in unrealized appreciation (depreciation)		225,927,073			(25,742,219	)		7,267,547			(585,115	)
Net increase (decrease) in net assets resulting from operations		277,980,810			(8,181,631	)		9,721,949			645,720
Undistributed net investment income included in the price of capital shares issued or redeemed		6,935,000			6,399,500			—			—
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(47,318,341	)		(15,383,634	)		(103,495	)		(49,356	)
Return of capital		—			—			—			(15,848	)
Total distributions to shareholders		(47,318,341	)		(15,383,634	)		(103,495	)		(65,204	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		1,486,123,503			1,958,966,883			80,079,649			46,511,904
Cost of shares redeemed		(24,022,797	)		(2,624,134	)		(27,993,602	)		(23,738,369	)
Net increase in net assets from capital share transactions		1,462,100,706			1,956,342,749			52,086,047			22,773,535
INCREASE IN NET ASSETS		1,699,698,175			1,939,176,984			61,704,501			23,354,051
NET ASSETS:
Beginning of period		1,939,176,984			—			23,354,051			—
End of period	$	3,638,875,159		$	1,939,176,984		$	85,058,552		$	23,354,051
Undistributed (distributions in excess of) net investment income included in net assets at end of period	$	(399,307	)	$	445,026		$	(49,119	)	$	—
SHARES ISSUED AND REDEEMED:
Shares sold		26,750,000			36,200,000			1,400,000			900,000
Shares redeemed		(450,000	)		(50,000	)		(500,000	)		(450,000	)
Net increase in shares outstanding		26,300,000			36,150,000			900,000			450,000

^a Commencement of operations.

See notes to financial statements.

70 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares Dow Jones U.S. Total Market Index Fund
	Six months ended Oct. 31, 2004 (Unaudited)			Year ended Apr. 30, 2004			Year ended Apr. 30, 2003			Year ended Apr. 30, 2002			Period from Jun. 12, 2000a to Apr. 30, 2001
Net asset value, beginning of period	$	52.57		$	42.83		$	50.47		$	57.93		$	67.15
Income from investment operations:
Net investment income		0.40			0.70			0.63			0.57			0.42
Net realized and unrealized gain (loss)		1.27			9.74			(7.66	)		(7.46	)		(9.27	)
Total from investment operations		1.67			10.44			(7.03	)		(6.89	)		(8.85	)
Less distributions from:
Net investment income		(0.37	)		(0.70	)		(0.61	)		(0.57	)		(0.36	)
Net realized gain		—			—			—			—			(0.01	)
Total distributions		(0.37	)		(0.70	)		(0.61	)		(0.57	)		(0.37	)
Net asset value, end of period	$	53.87		$	52.57		$	42.83		$	50.47		$	57.93
Total return		3.19	%b		24.50	%		(13.89	)%		(11.93	)%		(13.20	)%b
Ratios/Supplemental data:
Net assets, end of period (000s)	$	390,585		$	381,157		$	175,596		$	121,140		$	66,625
Ratio of expenses to average net assetsc		0.20	%		0.20	%		0.20	%		0.20	%		0.20	%
Ratio of net investment income to average net assetsc		1.51	%		1.49	%		1.57	%		1.15	%		0.98	%
Portfolio turnover rated		3	%		5	%		14	%		5	%		5	%

^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 71

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares Dow Jones U.S. Energy Sector Index Fund
	Six months ended Oct. 31, 2004 (Unaudited)			Year ended Apr. 30, 2004			Year ended Apr. 30, 2003			Year ended Apr. 30, 2002			Period from Jun. 12, 2000a to Apr. 30, 2001
Net asset value, beginning of period	$	53.21		$	39.19		$	48.74		$	57.01		$	50.79
Income from investment operations:
Net investment income		0.40			0.70			0.71			0.63			0.40
Net realized and unrealized gain (loss)		9.02			14.04			(9.56	)		(8.26	)		6.24
Total from investment operations		9.42			14.74			(8.85	)		(7.63	)		6.64
Less distributions from:
Net investment income		(0.40	)		(0.70	)		(0.70	)		(0.64	)		(0.42	)
Return of capital		—			(0.02	)		—			—			—
Total distributions		(0.40	)		(0.72	)		(0.70	)		(0.64	)		(0.42	)
Net asset value, end of period	$	62.23		$	53.21		$	39.19		$	48.74		$	57.01
Total return		17.76	%b		37.90	%		(18.22	)%		(13.34	)%		13.13	%b
Ratios/Supplemental data:
Net assets, end of period (000s)	$	460,528		$	348,524		$	111,684		$	104,797		$	54,156
Ratio of expenses to average net assetsc		0.60	%		0.60	%		0.60	%		0.60	%		0.60	%
Ratio of net investment income to average net assetsc		1.37	%		1.42	%		1.79	%		1.32	%		0.94	%
Portfolio turnover rated		1	%		2	%		9	%		18	%		20	%

^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.

72 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares Dow Jones U.S. Healthcare Sector Index Fund
	Six months ended Oct. 31, 2004 (Unaudited)			Year ended Apr. 30, 2004			Year ended Apr. 30, 2003			Year ended Apr. 30, 2002			Period from Jun. 12, 2000a to Apr. 30, 2001
Net asset value, beginning of period	$	58.99		$	50.80		$	56.92		$	61.87		$	59.53
Income from investment operations:
Net investment income		0.21			0.40			0.39			0.26			0.13
Net realized and unrealized gain (loss)		(4.36	)		8.19			(6.13	)		(4.94	)		2.44
Total from investment operations		(4.15	)		8.59			(5.74	)		(4.68	)		2.57
Less distributions from:
Net investment income		(0.21	)		(0.40	)		(0.38	)		(0.27	)		(0.14	)
Net realized gain		—			—			—			—			(0.09	)
Total distributions		(0.21	)		(0.40	)		(0.38	)		(0.27	)		(0.23	)
Net asset value, end of period	$	54.63		$	58.99		$	50.80		$	56.92		$	61.87
Total return		(7.06	)%b		16.96	%		(10.06	)%		(7.60	)%		4.29	%b
Ratios/Supplemental data:
Net assets, end of period (000s)	$	674,717		$	651,797		$	378,489		$	236,233		$	108,269
Ratio of expenses to average net assetsc		0.60	%		0.60	%		0.60	%		0.60	%		0.60	%
Ratio of net investment income to average net assetsc		0.73	%		0.71	%		0.80	%		0.45	%		0.29	%
Portfolio turnover rated		2	%		4	%		9	%		3	%		5	%

^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 73

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares Dow Jones U.S. Technology Sector Index Fund
	Six months ended Oct. 31, 2004 (Unaudited)			Year ended Apr. 30, 2004			Year ended Apr. 30, 2003			Year ended Apr. 30, 2002			Period from May 15, 2000a to Apr. 30, 2001
Net asset value, beginning of period	$	44.49		$	35.34		$	43.41		$	63.42		$	116.57
Income from investment operations:
Net investment loss		(0.04	)		(0.10	)		(0.05	)		(0.16	)		(0.29	)
Net realized and unrealized gain (loss)		1.02			9.25			(8.02	)		(19.85	)		(52.86	)
Total from investment operations		0.98			9.15			(8.07	)		(20.01	)		(53.15	)
Net asset value, end of period	$	45.47		$	44.49		$	35.34		$	43.41		$	63.42
Total return		2.20	%b		25.89	%		(18.59	)%		(31.55	)%		(45.60	)%b
Ratios/Supplemental data:
Net assets, end of period (000s)	$	379,694		$	322,536		$	231,501		$	141,073		$	110,990
Ratio of expenses to average net assetsc		0.60	%		0.60	%		0.60	%		0.60	%		0.60	%
Ratio of net investment loss to average net assetsc		(0.20	)%		(0.22	)%		(0.22	)%		(0.41	)%		(0.47	)%
Portfolio turnover rated		2	%		5	%		15	%		8	%		11	%

^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.

74 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares Dow Jones U.S. Telecommunications Sector Index Fund
	Six months ended Oct. 31, 2004 (Unaudited)			Year ended Apr. 30, 2004			Year ended Apr. 30, 2003			Year ended Apr. 30, 2002			Period from May. 22, 2000a to Apr. 30, 2001
Net asset value, beginning of period	$	21.58		$	18.43		$	22.38		$	38.35		$	56.81
Income from investment operations:
Net investment income		0.32			0.45			0.34			0.29			0.35
Net realized and unrealized gain (loss)		1.30			3.15			(3.98	)		(15.98	)		(17.95	)
Total from investment operations		1.62			3.60			(3.64	)		(15.69	)		(17.60	)
Less distributions from:
Net investment income		(0.31	)		(0.45	)		(0.31	)		(0.28	)		(0.27	)
Net realized gain		—			—			—			—			(0.59	)
Total distributions		(0.31	)		(0.45	)		(0.31	)		(0.28	)		(0.86	)
Net asset value, end of period	$	22.89		$	21.58		$	18.43		$	22.38		$	38.35
Total return		7.54	%b		19.71	%		(16.22	)%		(41.12	)%		(31.06	)%b
Ratios/Supplemental data:
Net assets, end of period (000s)	$	333,091		$	215,757		$	126,245		$	51,463		$	55,603
Ratio of expenses to average net assetsc		0.60	%		0.60	%		0.60	%		0.60	%		0.60	%
Ratio of net investment income to average net assetsc		3.35	%		2.27	%		2.27	%		1.05	%		0.80	%
Portfolio turnover rated		4	%		22	%		23	%		43	%		43	%

^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 75

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares Dow Jones U.S. Utilities Sector Index Fund
	Six months ended Oct. 31, 2004 (Unaudited)			Year ended Apr. 30, 2004			Year ended Apr. 30, 2003			Year ended Apr. 30, 2002			Period from Jun. 12, 2000a to Apr. 30, 2001
Net asset value, beginning of period	$	57.58		$	49.11		$	65.75		$	85.95		$	69.81
Income from investment operations:
Net investment income		0.94			1.87			2.04			1.89			1.82
Net realized and unrealized gain (loss)		7.00			8.47			(16.61	)		(20.25	)		16.19
Total from investment operations		7.94			10.34			(14.57	)		(18.36	)		18.01
Less distributions from:
Net investment income		(0.94	)		(1.87	)		(2.07	)		(1.84	)		(1.73	)
Net realized gain		—			—			—			—			(0.14	)
Total distributions		(0.94	)		(1.87	)		(2.07	)		(1.84	)		(1.87	)
Net asset value, end of period	$	64.58		$	57.58		$	49.11		$	65.75		$	85.95
Total return		13.91	%b		21.28	%		(22.16	)%		(21.38	)%		25.90	%b
Ratios/Supplemental data:
Net assets, end of period (000s)	$	545,707		$	440,490		$	329,055		$	180,818		$	42,976
Ratio of expenses to average net assetsc		0.60	%		0.60	%		0.60	%		0.60	%		0.60	%
Ratio of net investment income to average net assetsc		3.17	%		3.41	%		4.15	%		2.89	%		2.59	%
Portfolio turnover rated		3	%		7	%		15	%		8	%		11	%

^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.

76 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares Dow Jones Select Dividend Index Fund						iShares Dow Jones Transportation Average Index Fund
	Six months ended Oct. 31, 2004 (Unaudited)			Period from Nov. 3, 2003a to Apr. 30, 2004			Six months ended Oct. 31, 2004 (Unaudited)			Period from Oct. 6, 2003a to Apr. 30, 2004
Net asset value, beginning of period	$	53.64		$	50.51		$	51.90		$	50.22
Income from investment operations:
Net investment income		0.93			0.76			0.13			0.39
Net realized and unrealized gain		4.65			3.12			11.15			1.72
Total from investment operations		5.58			3.88			11.28			2.11
Less distributions from:
Net investment income		(0.95	)		(0.75	)		(0.17	)		(0.32	)
Return of capital		—			—			—			(0.11	)
Total distributions		(0.95	)		(0.75	)		(0.17	)		(0.43	)
Net asset value, end of period	$	58.27		$	53.64		$	63.01		$	51.90
Total return		10.50	%b		7.70	%b		21.76	%b		4.19	%b
Ratios/Supplemental data:
Net assets, end of period (000s)	$	3,638,875		$	1,939,177		$	85,059		$	23,354
Ratio of expenses to average net assetsc		0.40	%		0.40	%		0.60	%		0.60	%
Ratio of net investment income to average net assetsc		3.44	%		3.43	%		0.28	%		0.43	%
Portfolio turnover rated		3	%		2	%		3	%		4	%

^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 77

Notes to the Financial Statements (Unaudited)

iSHARES^® TRUST

1. SIGNIFICANT ACCOUNTING POLICIES

iShares Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust was established as a Delaware statutory trust pursuant to an Agreement and Declaration of Trust dated December 16, 1999. As of October 31, 2004, the Trust offered 73 investment portfolios or funds.

These financial statements relate only to the iShares Dow Jones U.S. Total Market, iShares Dow Jones U.S. Energy Sector, iShares Dow Jones U.S. Healthcare Sector, iShares Dow Jones U.S. Technology Sector, iShares Dow Jones U.S. Telecommunications Sector, iShares Dow Jones U.S. Utilities Sector, iShares Dow Jones Select Dividend and the iShares Dow Jones Transportation Average Index Funds (each a “Fund,” collectively the “Funds”).

The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index, as indicated in the name of each Fund. The investment 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 Dow Jones U.S. Total Market and iShares Dow Jones Select Dividend 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.

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 are valued at the last sale price on the principal exchange on which they are traded, or in the absence of any sale on the valuation date, at the latest quoted bid price. 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 the latest quoted bid price, which is 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 are valued at the latest quoted bid price, which are obtained from one or more reputable independent pricing services. If quoted prices are unavailable or inaccurate, market values are 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 are valued at amortized cost.

Securities held under a repurchase agreement are valued at a price equal to the amount of the cash investment at the time of valuation on the valuation date. The market values of the underlying securities are determined in accordance with the above discussed valuation methods, as appropriate, for the purpose of determining the adequacy of collateral.

Securities of investment companies, other than investment companies whose shares are traded on an exchange, are valued at the investment company’s published net asset value per share.

78 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^® TRUST

Any securities, including restricted securities or other assets for which market quotations are not readily available, or for which a significant event has occurred since the time of the most recent market quotation, are valued in accordance with fair value pricing policies approved by the Board of Trustees of the Trust (the “Board”).

SECURITY TRANSACTIONS AND INCOME RECOGNITION

Security transactions are accounted for on trade date. Dividend income is recognized on the ex-dividend date and interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method.

EQUALIZATION

The iShares Dow Jones U.S. Utilities Sector and iShares Dow Jones Select Dividend Index Funds use the accounting practice of equalization. This accounting method is used to keep the continuing shareholders’ per share equity in undistributed net investment income from being affected by the continuous sales and redemptions of capital stock. Equalization is calculated on a per share basis whereby a portion of the proceeds from sales and costs of repurchases of capital stock is applied to undistributed net investment income. The amount of equalization is disclosed in the Statements of Changes in Net Assets as undistributed net investment income included in the price of capital shares issued or redeemed.

DISTRIBUTIONS TO SHAREHOLDERS

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. Dividends and distributions cannot be automatically reinvested in additional shares of the Funds.

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

iShares Index Fund	Undistributed Ordinary Income		Unrealized Appreciation (Depreciation)			Capital and Other Losses			Total Distributable Earnings (Accumulated Losses)
Dow Jones U.S. Total Market	$	399,217	$	20,343,168		$	(5,969,124	)	$	14,773,261
Dow Jones U.S. Energy Sector		—		36,197,210			(5,292,272	)		30,904,938
Dow Jones U.S. Healthcare Sector		114,869		3,759,070			(2,702,656	)		1,171,283
Dow Jones U.S. Technology Sector		—		(65,038,047	)		(16,924,879	)		(81,962,926	)
Dow Jones U.S. Telecommunications Sector		1,053,830		(18,329,650	)		(23,797,610	)		(41,073,430	)
Dow Jones U.S. Utilities Sector		811,509		14,501,951			(15,351,602	)		(38,142	)
Dow Jones Select Dividend		445,026		(26,826,677	)		(751,153	)		(27,132,804	)
Dow Jones Transportation Average		—		(603,835	)		(125,767	)		(729,602	)

For the years ended April 30, 2004 and April 30, 2003, the tax characterization of distributions paid for each Fund was equal to the book characterization of distributions paid. The total distributions and distributions per share are disclosed in the accompanying Statements of Changes in Net Assets and the Financial Highlights for all Funds.

NOTES TO THE FINANCIAL STATEMENTS 79

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^® TRUST

FEDERAL INCOME TAXES

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

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

iShares Index Fund	Expiring 2009		Expiring 2010		Expiring 2011		Expiring 2012		Total
Dow Jones U.S. Total Market	$	—	$	2,220,191	$	2,507,100	$	728,202	$	5,455,493
Dow Jones U.S. Energy Sector		369		643,271		4,517,083		124,959		5,285,682
Dow Jones U.S. Healthcare Sector		—		154,330		1,118,085		1,430,241		2,702,656
Dow Jones U.S. Technology Sector		—		3,803,426		10,610,555		1,952,962		16,366,943
Dow Jones U.S. Telecommunications Sector		—		10,297,961		12,362,540		1,137,109		23,797,610
Dow Jones U.S. Utilities Sector		—		165,391		5,246,921		8,539,740		13,952,052

Net capital loss carryforwards may be applied against any net realized taxable gains in each succeeding year, or until their respective expiration dates, whichever occurs first.

For the six months ended October 31, 2004, certain Funds realized net capital gains or losses resulting from in-kind redemptions of large blocks of 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 six months ended October 31, 2004 are disclosed in the Funds’ Statements of Operations.

As of October 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)
Dow Jones U.S. Total Market	$	384,877,637	$	58,511,960	$	(27,916,325	)	$	30,595,635
Dow Jones U.S. Energy Sector		394,256,354		96,220,896		(2,523,016	)		93,697,880
Dow Jones U.S. Healthcare Sector		773,271,838		48,960,098		(96,886,042	)		(47,925,944	)
Dow Jones U.S. Technology Sector		467,314,891		23,846,606		(85,706,251	)		(61,859,645	)
Dow Jones U.S. Telecommunications Sector		375,505,730		4,195,646		(13,136,425	)		(8,940,779	)
Dow Jones U.S. Utilities Sector		534,747,807		79,021,912		(16,155,739	)		62,866,173
Dow Jones Select Dividend		3,435,939,834		238,661,026		(43,156,322	)		195,504,704
Dow Jones Transportation Average		78,447,879		7,152,626		(491,632	)		6,660,994

80 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^® TRUST

REPURCHASE AGREEMENTS

Each Fund may enter into repurchase agreements with banks and securities dealers. These transactions involve the purchase of securities with a simultaneous commitment to resell the securities to the bank or the dealer at an agreed-upon date and price. A repurchase agreement is accounted for as an investment by a Fund, collateralized by securities, which are delivered to the Fund’s 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. As of October 31, 2004, a portion of each Fund’s 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.

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
Dow Jones U.S. Total Market	0.20	%
Dow Jones U.S. Energy Sector	0.60
Dow Jones U.S. Healthcare Sector	0.60
Dow Jones U.S. Technology Sector	0.60
Dow Jones U.S. Telecommunications Sector	0.60
Dow Jones U.S. Utilities Sector	0.60
Dow Jones Select Dividend	0.40
Dow Jones Transportation Average	0.60

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 six months ended October 31, 2004, BGI earned securities lending agent fees as follows:

iShares Index Fund	Securities Lending Agent Fees
Dow Jones U.S. Total Market	$	16,158
Dow Jones U.S. Energy Sector		13,600
Dow Jones U.S. Healthcare Sector		34,002
Dow Jones U.S. Technology Sector		12,808
Dow Jones U.S. Telecommunications Sector		9,931
Dow Jones U.S. Utilities Sector		40,324

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

NOTES TO THE FINANCIAL STATEMENTS 81

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^® TRUST

Barclays Global Investors Services (“BGIS”), a subsidiary of BGI, may serve as a broker-dealer for the Funds. For the six months ended October 31, 2004, BGIS did not receive any brokerage commissions from the Funds.

Pursuant to Rule 17a-7 under the 1940 Act, certain Funds executed cross trades for the six months ended October 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 five months of the fiscal year and concluded that they were in compliance with the requirements and restrictions set forth by Rule 17a-7. The Board is scheduled at its next meeting to review all such transactions executed during the last month of the fiscal half-year.

Pursuant to an exemptive order issued by the U.S. Securities and Exchange Commission, each Fund may invest in the Institutional Shares of the Government Money Market Fund (“GMMF”), Institutional Money Market Fund (“IMMF”), and Prime Money Market Fund (“PMMF”) of Barclays Global Investors Funds. The GMMF, IMMF, and PMMF are feeder funds in a master/feeder fund structure that invest substantially all of their assets in the Government Money Market Master Portfolio, 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 GMMF, IMMF, and PMMF are open-end money market funds available to institutional and accredited investors, including other investment companies managed by BGFA. The GMMF, IMMF, and PMMF seek a high level of income consistent with liquidity and the preservation of capital. While the GMMF, 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 GMMF, 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 Fund in shares of issuers, of which BGFA is an affiliate, for the six months ended October 31, 2004, including income earned from these affiliated issuers.

iShares Index Fund and Name of Affiliated Issuer	Number of Shares Held Beginning of Period (in 000s)	Gross Additions (in 000s)	Gross Reductions (in 000s)	Number of Shares Held End of Period (in 000s)	Value at End of Period		Interest Income
Dow Jones U.S. Total Market
IMMF	314	6,502	6,540	276	$	275,783	$	2,134
Dow Jones U.S. Energy Sector
IMMF	336	3,860	4,115	81		81,263		1,635
Dow Jones U.S. Healthcare Sector
IMMF	268	5,525	5,568	225		224,649		2,436
Dow Jones U.S. Technology Sector
IMMF	44	1,060	998	106		106,270		986
Dow Jones U.S. Telecommunications Sector
IMMF	258	6,743	7,001	—		—		1,218
Dow Jones U.S. Utilities Sector
IMMF	182	11,480	11,355	307		306,597		2,641
Dow Jones Select Dividend
IMMF	1,715	65,266	64,612	2,369		2,368,807		11,684
Dow Jones Transportation Average
IMMF	20	252	211	61		60,875		166

82 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^® TRUST

Certain Funds invested cash collateral from securities on loan in the GMMF, 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 Fund’s holdings of the GMMF, IMMF, and PMMF in connection with the investment of collateral for securities on loan.

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

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the six months ended October 31, 2004, were as follows:

iShares Index Fund	Purchases		Sales
Dow Jones U.S. Total Market	$	10,833,832	$	10,631,664
Dow Jones U.S. Energy Sector		4,691,438		4,642,898
Dow Jones U.S. Healthcare Sector		10,904,046		10,777,824
Dow Jones U.S. Technology Sector		5,131,282		5,375,043
Dow Jones U.S. Telecommunications Sector		12,809,888		11,099,379
Dow Jones U.S. Utilities Sector		16,011,880		15,698,962
Dow Jones Select Dividend		90,997,366		71,328,646
Dow Jones Transportation Average		1,079,452		1,076,528

In-kind transactions (see Note 4) for the six months ended October 31, 2004, were as follows:

iShares Index Fund	In-kind Purchases		In-kind Sales
Dow Jones U.S. Energy Sector	$	63,265,210	$	13,624,961
Dow Jones U.S. Healthcare Sector		85,926,248		11,249,237
Dow Jones U.S. Technology Sector		88,316,101		38,386,617
Dow Jones U.S. Telecommunications Sector		176,721,277		75,852,783
Dow Jones U.S. Utilities Sector		93,628,955		44,150,870
Dow Jones Select Dividend		1,512,221,248		70,310,302
Dow Jones Transportation Average		80,012,793		27,995,600

4. CAPITAL SHARE TRANSACTIONS

As of October 31, 2004, there were an unlimited number of no par value capital shares of beneficial interest authorized. Capital shares are issued and redeemed by each Fund only in Creation Units or multiples thereof. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the Statements of Changes in Net Assets.

The consideration for the purchase of Creation Units of a Fund generally consists of the in-kind contribution of a designated portfolio of equity securities constituting a 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 83

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^® TRUST

5. LOANS OF PORTFOLIO SECURITIES

Each Fund may lend its investment securities to approved borrowers, such as brokers, dealers, and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received by each Fund is required to have a value of at least 102% of the market value of the loaned securities. The collateral is maintained thereafter, at a value equal to at least 100% of the current market value of the securities on loan. The risks to the Funds of securities lending are that the borrower may not provide additional collateral when required, or may not return the securities when due.

As of October 31, 2004, certain Funds had loaned securities which were collateralized by cash. The cash collateral received was invested in a joint account with other funds managed by BGFA, which invests in securities with remaining maturities of 397 days or less, repurchase agreements and money market mutual funds, including money market funds managed by BGFA. Repurchase agreements held in the joint account are fully collateralized by U.S. Government securities. Income from the joint account is allocated daily to each Fund, based on each Fund’s portion of the total cash collateral received. The market value of the securities on loan as of October 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.

84 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes:

NOTES 85

The iShares^® Family of Funds

The following is a list of iShares Funds being offered, along with their respective exchange trading symbols. Please call 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 FTSE/Xinhua China 25 (FXI)

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)

* On December 20, 2004, certain Dow Jones Indexes will undergo certain methodology changes that will impact the composition of the indexes. In order to reflect these changes the iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund will be renamed the iShares Dow Jones U.S. Consumer Goods Sector Index Fund and the iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund will be renamed the iShares Dow Jones U.S. Consumer Services Sector Index Fund. The investment objective, principal investment strategy and portfolio holdings of each of these Funds will also be modified to correspond to the name changes and constituent changes to the Funds’ corresponding indexes.

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., FTSE/Xinhua Index Limited, 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 Semi-Annual Report.

1485-iS-1204

86 2004 iSHARES SEMI-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, issued, sold, or promoted by Dow Jones & Company, Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds.

©2004 Barclays Global Investors. All rights reserved. iShares is a registered trademark of Barclays Global Investors, N.A. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.

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 charge, upon request, by calling toll-free 1-800-474-2737; on the Funds’ website at www.iShares.com; and on the Securities and Exchange Commission’s website at www.sec.gov.

The Funds file 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. The Funds’ Forms N-Q are available on the Commission’s website at www.sec.gov. 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.

BGI-F-012-10042

2004 SEMI-ANNUAL REPORT TO SHAREHOLDERS  |  OCTOBER 31, 2004

iSHARES DOW JONES SERIES

iSHARES COHEN & STEERS SERIES

Electronic delivery of this document may be

available to you. See inside for details.

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

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

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

iSHARES DOW JONES U.S. FINANCIAL SECTOR INDEX FUND

iSHARES DOW JONES U.S. INDUSTRIAL SECTOR INDEX FUND

iSHARES DOW JONES U.S. FINANCIAL SERVICES INDEX FUND

iSHARES DOW JONES U.S. REAL ESTATE INDEX FUND

iSHARES COHEN & STEERS REALTY MAJORS INDEX FUND

Dear iShares Shareholder:

Electronic delivery is the easiest, most convenient way to receive reporting on your iShares holdings. In addition, it’s a way we can all care for our environment. To that end, we are pleased to offer shareholder reports and prospectuses online.

To sign up for electronic delivery, please follow these simple steps:

1. Go to www.icsdelivery.com.

2. From the main page, select the first letter of your brokerage firm’s name.

3. Select your brokerage institution from the list that follows. If your brokerage firm is not listed, electronic delivery may not be available. Please contact your brokerage firm or financial adviser.

4. Fill out the appropriate information and provide the e-mail address where you would like your information sent.

Your information and email address will be kept confidential and only used to deliver documents to you. If at any time you are not satisfied, you can cancel electronic delivery at www.icsdelivery.com and once again receive physical delivery of your materials. If you have any questions, please contact your brokerage firm or financial adviser.

Once you have enrolled, you will no longer receive prospectuses and shareholder reports in the mail. Instead, you will receive e-mail notifications announcing that the shareholder report or prospectus has been posted on the iShares website at www.iShares.com.

Table of Contents

Management’s Discussion of Fund Performance	1
Shareholder Expenses	9
Schedules of Investments	11
iShares Dow Jones U.S. Basic Materials Sector Index Fund	11
iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund	15
iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund	23
iShares Dow Jones U.S. Financial Sector Index Fund	28
iShares Dow Jones U.S. Industrial Sector Index Fund	35
iShares Dow Jones U.S. Financial Services Index Fund	43
iShares Dow Jones U.S. Real Estate Index Fund	48
iShares Cohen & Steers Realty Majors Index Fund	53
Financial Statements	57
Financial Highlights	64
Notes to the Financial Statements	72
iShares Family of Funds	82

Management’s Discussion of Fund Performance

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

Performance as of 10/31/04

Average Annual Total Returns												Cumulative Total Returns
Year Ended 10/31/04						Inception to 10/31/04						Inception to 10/31/04
NAV		MARKET		INDEX		NAV		MARKET		INDEX		NAV		MARKET		INDEX
16.54	%	16.40	%	17.29	%	7.70	%	7.69	%	8.30	%	38.50	%	38.42	%	41.81	%

Total returns for the periods since inception are calculated from the inception date of the Fund (6/12/00). “Average annual total returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative total returns” represent the total change in value of an investment over the periods indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the 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 shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (6/19/00), the NAV of the Fund is used as a proxy for the 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.

The iShares Dow Jones U.S. Basic Materials Sector Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Basic Materials Sector Index (the “Index”). The Index measures the performance of the basic materials sector of the U.S. equity market, and includes companies in the aluminum, chemicals, forest products, non-ferrous metal, paper products, precious metals, mining and steel industry sub-groups. The Fund invests in a representative sample of securities in the Index that have a similar investment profile as the entire Index. For the six-month period ended October 31, 2004 (the “reporting period”), the Fund returned 10.44%, while the Index returned 10.81%.

Broad equity markets, as measured by the Dow Jones U.S. Total Market Index, generally posted modest gains for the reporting period. On the economic front, data continued to provide positive, but somewhat inconsistent, signs of recovery. Annual gross domestic product (“GDP”) grew 3.0% during the second quarter of 2004, lagging many economists’ expectations. The annual GDP growth rate for the third quarter of 2004 was a more encouraging 3.7%, but still fell short of forecasts as increased consumer spending was offset by slower paces for both inventory building and exports. Oil prices soared during the reporting period, reaching $55 per barrel in late October. The Federal Reserve Board raised short-term interest rates three times during the reporting period, overall from 1.00% to 1.75%.

Basic materials shares benefited from the improving economic environment during the reporting period. Because economic recovery tends to result in higher demand for commodities products, such as forest products and metals, companies related to the production or delivery of these products generally performed well. Companies that depend on oil and natural gas, however, were hindered by the rise in energy prices during the reporting period.

Among the Fund’s ten largest holdings as of October 31, 2004, performance was mostly positive for the reporting period. Phelps Dodge Corp. was the strongest performer among the ten largest holdings, followed by Newmont Mining Corp. Both companies are engaged in metal mining. Chemical companies Praxair Inc. and The Dow Chemical Co. also both performed well. International Paper Co., on the other hand, declined for the reporting period. The largest holding at almost 13% of the net assets of the Fund as of October 31, 2004, chemical company E. I. Du Pont de Nemours and Co. posted a slight decline for the reporting period.

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE 1

Management’s Discussion of Fund Performance

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

Performance as of 10/31/04

Average Annual Total Returns												Cumulative Total Returns
Year Ended 10/31/04						Inception to 10/31/04						Inception to 10/31/04
NAV		MARKET		INDEX		NAV		MARKET		INDEX		NAV		MARKET		INDEX
3.70	%	3.54	%	4.33	%	(1.13	)%	(1.14	)%	(0.58	)%	(4.85	)%	(4.92	)%	(2.53	)%

Total returns for the periods since inception are calculated from the inception date of the Fund (6/12/00). “Average annual total returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative total returns” represent the total change in value of an investment over the periods indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the 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 shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (6/20/00), the NAV of the Fund is used as a proxy for the 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.

The iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Consumer Cyclical Sector Index (the “Index”). The Index measures the performance of the consumer cyclical sector of the U.S. equity market, and includes companies in the advertising, airlines, auto (parts and manufacturers), broadcasting, casinos, clothing & fabrics, consumer electronics, entertainment, footwear, furnishings & appliances, home construction, lodging, publishing, recreational products & services, restaurants, retailers (apparel, broad line, drug-based and specialty), tires and toys industry sub-groups. The Fund invests in a representative sample of securities in the Index that have a similar investment profile as the entire Index. For the six-month period ended October 31, 2004 (the “reporting period”), the Fund returned 1.17%, while the Index returned 1.49%.

Broad equity markets, as measured by the Dow Jones U.S. Total Market Index, generally posted modest gains for the reporting period. On the economic front, data continued to provide positive, but somewhat inconsistent, signs of recovery. Annual gross domestic product (“GDP”) grew 3.0% during the second quarter of 2004, lagging many economists’ expectations. The annual GDP growth rate for the third quarter of 2004 was a more encouraging 3.7%, but still fell short of forecasts as increased consumer spending was offset by slower paces for both inventory building and exports. Oil prices soared during the reporting period, reaching $55 per barrel in late October. The Federal Reserve Board raised short-term interest rates three times during the reporting period, overall from 1.00% to 1.75%.

Consumer cyclical stocks responded to the uncertain signs of recovery with mixed results. The discount retailers generally performed well for the reporting period, although there were notable exceptions. The aftermath of the severe hurricane season during the reporting period translated into increased demand for home improvement stores. Entertainment companies delivered mixed results and the cable companies within the group generally were poorer performers.

Among the Fund’s ten largest holdings as of October 31, 2004, Home Depot Inc., which operates home improvement stores, was a strong performer for the reporting period. Retailer Target Corp. also posted gains, as did The Walt Disney Co. and home improvement company Lowe’s Companies Inc. The Fund’s largest holding as of October 31, 2004, discount retail giant Wal-Mart Stores Inc., declined for the reporting period. Entertainment-related companies Viacom Inc., Comcast Corp., and Time Warner Inc. also posted losses for the reporting period.

2 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance

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

Performance as of 10/31/04

Average Annual Total Returns												Cumulative Total Returns
Year Ended 10/31/04						Inception to 10/31/04						Inception to 10/31/04
NAV		MARKET		INDEX		NAV		MARKET		INDEX		NAV		MARKET		INDEX
6.8	2%	6.76	%	7.45	%	5.22	%	5.21	%	5.95	%	25.04	%	24.96	%	28.80	%

Total returns for the periods since inception are calculated from the inception date of the Fund (6/12/00). “Average annual total returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative total returns” represent the total change in value of an investment over the periods indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the 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 shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (6/16/00), the NAV of the Fund is used as a proxy for the 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.

The iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Consumer Non-Cyclical Sector Index (the “Index”). The Index measures the performance of the consumer non-cyclical sector of the U.S. equity market and includes companies in the distillers and brewers, soft drinks, consumer services, durable and non-durable household products, cosmetics, food retailers and wholesalers, food products, tobacco and agricultural industry sub-groups. The Fund invests in a representative sample of securities in the Index that have a similar investment profile as the entire Index. For the six-month period ended October 31, 2004 (the “reporting period”), the Fund declined 6.99%, while the Index declined 6.75%.

Broad equity markets, as measured by the Dow Jones U.S. Total Market Index (the “Total Market Index”), generally posted modest gains for the reporting period. On the economic front, data continued to provide positive, but somewhat inconsistent, signs of recovery. Annual gross domestic product (“GDP”) grew 3.0% during the second quarter of 2004, lagging many economists’ expectations. The annual GDP growth rate for the third quarter of 2004 was a more encouraging 3.7%, but still fell short of forecasts as increased consumer spending was offset by slower paces for both inventory building and exports. Oil prices soared during the reporting period, reaching $55 per barrel in late October. The Federal Reserve Board raised short-term interest rates three times during the reporting period, overall from 1.00% to 1.75%.

Consumer non-cyclical stocks, which generally tend to outperform other sectors during economic downturns and underperform other sectors during economic recovery, lagged the Total Market Index during the reporting period. As economic conditions improved during the reporting period, the sectors that tend to be more sensitive to the state of the economy outperformed many non-cyclical stocks.

Among the Fund’s ten largest holdings as of October 31, 2004, performance was mostly negative for the reporting period. Consumer products company Colgate-Palmolive Co. posted declines, as did tobacco company Altria Group Inc., as well as beverage companies The Coca Cola Co. and PepsiCo Inc. The Fund’s largest holding as of October 31, 2004, Procter & Gamble Co., posted a modest decline. On the other hand, internet-based retailer eBay Inc., logged healthy gains for the reporting period, and The Gillette Co. delivered a slight gain.

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE 3

Management’s Discussion of Fund Performance

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

Performance as of 10/31/04

Average Annual Total Returns												Cumulative Total Returns
Year Ended 10/31/04						Inception to 10/31/04						Inception to 10/31/04
NAV		MARKET		INDEX		NAV		MARKET		INDEX		NAV		MARKET		INDEX
9.70	%	9.49	%	10.33	%	7.53	%	7.50	%	8.20	%	38.11	%	37.94	%	41.87	%

Total returns for the periods since inception are calculated from the inception date of the Fund (5/22/00). “Average annual total returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative total returns” represent the total change in value of an investment over the periods indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the 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 shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (5/31/00), the NAV of the Fund is used as a proxy for the 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.

The iShares Dow Jones U.S. Financial Sector Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Financial Sector Index (the “Index”). The Index measures the performance of the financial sector of the U.S. equity market and includes companies in the banks (excluding savings and loans), diversified financial, insurance (full line, life and property and casualty), real estate, savings and loan, and investment services industry sub-groups. The Fund invests in a representative sample of securities in the Index that have a similar investment profile as the entire Index. For the six-month period ended October 31, 2004 (the “reporting period”), the Fund returned 5.19%, while the Index returned 5.48%.

Broad equity markets, as measured by the Dow Jones U.S. Total Market Index, generally posted modest gains for the reporting period. On the economic front, data continued to provide positive, but somewhat inconsistent, signs of recovery. Annual gross domestic product (“GDP”) grew 3.0% during the second quarter of 2004, lagging many economists’ expectations. The annual GDP growth rate for the third quarter of 2004 was a more encouraging 3.7%, but still fell short of forecasts as increased consumer spending was offset by slower paces for both inventory building and exports. Oil prices soared during the reporting period, reaching $55 per barrel in late October. The Federal Reserve Board raised short-term interest rates three times during the reporting period, overall from 1.00% to 1.75%.

Financial companies generally performed well as economic conditions continued to show signs of improvement during the reporting period. Consumer banks also responded positively to the signs of economic recovery. In addition, high levels of refinance activity continued to be a boon to lenders.

Performance among the Fund’s ten largest holdings as of October 31, 2004 was mostly positive. U.S. Bancorp and Bank of America Corp. posted gains for the reporting period. American Express Co., Wachovia Corp. and Wells Fargo & Co. also performed well. American International Group Inc. declined for the reporting period. The Fund’s largest holding as of October 31, 2004, Citigroup Inc., also posted a loss for the reporting period.

4 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance

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

Performance as of 10/31/04

Average Annual Total Returns												Cumulative Total Returns
Year Ended 10/31/04						Inception to 10/31/04						Inception to 10/31/04
NAV		MARKET		INDEX		NAV		MARKET		INDEX		NAV		MARKET		INDEX
17.05	%	16.87	%	17.57	%	(1.63	)%	(1.64	)%	(1.97	)%	(6.97	)%	(7.01	)%	(8.35	)%

Total returns for the periods since inception are calculated from the inception date of the Fund (6/12/00). “Average annual total returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative total returns” represent the total change in value of an investment over the periods indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the 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 shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (6/20/00), the NAV of the Fund is used as a proxy for the 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.

The iShares Dow Jones U.S. Industrial Sector Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Industrial Sector Index (the “Index”). The Index measures the performance of the industrial sector of the U.S. equity market and includes companies in the aerospace, advanced industrial equipment, air freight, building materials, electric components and equipment, heavy construction, heavy machinery, industrial services, industrial (diversified), marine transport, railroads, shipbuilding, containers and packaging, factory equipment, land transportation equipment, transportation services and trucking industry sub-groups. The Fund invests in a representative sample of securities in the Index that have a similar investment profile as the entire Index. For the six-month period ended October 31, 2004 (the “reporting period”), the Fund returned 8.09%, while the Index returned 8.44%.

Broad equity markets, as measured by the Dow Jones U.S. Total Market Index, generally posted modest gains for the reporting period. On the economic front, data continued to provide positive, but somewhat inconsistent, signs of recovery. Annual gross domestic product (“GDP”) grew 3.0% during the second quarter of 2004, lagging many economists’ expectations. The annual GDP growth rate for the third quarter of 2004 was a more encouraging 3.7%, but still fell short of forecasts as increased consumer spending was offset by slower paces for both inventory building and exports. Oil prices soared during the reporting period, reaching $55 per barrel in late October. The Federal Reserve Board raised short-term interest rates three times during the reporting period, overall from 1.00% to 1.75%.

Economic recovery during the reporting period translated into demand for industrial production. As a result, companies involved in industrial production, including construction, manufacturing, and transportation companies, tended to benefit from the improved economic climate.

Among the Fund’s ten largest holdings as of October 31, 2004, performance was largely positive for the reporting period. Aerospace giant The Boeing Co. delivered strong gains. Other contributors to positive Fund performance included Tyco International Ltd., a diversified manufacturing and services company, and conglomerate General Electric Co., the Fund’s largest holding as of October 31, 2004. United Parcel Service Inc. also posted gains for the reporting period. Some of the Fund’s ten largest holdings, including 3M Co., First Data Corp., and aerospace company Honeywell International Inc., posted declines for the reporting period.

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE 5

Management’s Discussion of Fund Performance

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

Performance as of 10/31/04

Average Annual Total Returns												Cumulative Total Returns
Year Ended 10/31/04						Inception to 10/31/04						Inception to 10/31/04
NAV		MARKET		INDEX		NAV		MARKET		INDEX		NAV		MARKET		INDEX
8.79	%	8.60	%	9.43	%	6.93	%	6.90	%	7.59	%	34.16	%	34.01	%	37.78	%

Total returns for the periods since inception are calculated from the inception date of the Fund (6/12/00). “Average annual total returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative total returns” represent the total change in value of an investment over the periods indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the 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 shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (6/19/00), the NAV of the Fund is used as a proxy for the 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.

The iShares Dow Jones U.S. Financial Services Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Financial Services Index (the “Index”). The Index measures the performance of the financial services sector of the U.S. equity market and includes companies in the banks (excluding savings and loans), diversified financial, insurance (full line, life and property and casualty), real estate, savings and loans, and investment services industry sub-groups. The Fund invests in a representative sample of the securities in the Index that have a similar investment profile as the entire Index. For the six-month period ended October 31, 2004 (the “reporting period”), the Fund returned 6.87%, while the Index returned 7.17%.

Broad equity markets, as measured by the Dow Jones U.S. Total Market Index, generally posted modest gains for the reporting period. On the economic front, data continued to provide positive, but somewhat inconsistent, signs of recovery. Annual gross domestic product (“GDP”) grew 3.0% during the second quarter of 2004, lagging many economists’ expectations. The annual GDP growth rate for the third quarter of 2004 was a more encouraging 3.7%, but still fell short of forecasts as increased consumer spending was offset by slower paces for both inventory building and exports. Oil prices soared during the reporting period, reaching $55 per barrel in late October. The Federal Reserve Board raised short-term interest rates three times during the reporting period, overall from 1.00% to 1.75%.

Financial services companies generally benefited from the improving economic environment during the reporting period. High levels of refinance activity continued to be a boon to lenders. Consumer banks also responded positively to the signs of economic recovery.

Among the Fund’s ten largest holdings as of October 31, 2004, performance was mostly positive. U.S. Bancorp and Bank of America Corp. both logged gains for the reporting period. American Express Co. and Wachovia Corp. also performed well, as did Wells Fargo & Co. The Fund’s largest holding as of October 31, 2004, Citigroup Inc., declined for the reporting period. Investment banks Morgan Stanley and Merrill Lynch & Co. Inc. posted slight declines for the reporting period.

6 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance

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

Performance as of 10/31/04

Average Annual Total Returns												Cumulative Total Returns
Year Ended 10/31/04						Inception to 10/31/04						Inception to 10/31/04
NAV		MARKET		INDEX		NAV		MARKET		INDEX		NAV		MARKET		INDEX
28.26	%	28.43	%	29.15	%	18.36	%	18.34	%	19.08	%	109.55	%	109.43	%	114.87	%

Total returns for the periods since inception are calculated from the inception date of the Fund (6/12/00). “Average annual total returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative total returns” represent the total change in value of an investment over the periods indicated.

Certain sectors and markets performed exceptionally well based on market conditions during the six-month period. Investors should not expect that such exceptional returns will be repeated.

The Fund’s per share net asset value or “NAV” is the value of one share of the 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 shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (6/19/00), the NAV of the Fund is used as a proxy for the 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.

The iShares Dow Jones U.S. Real Estate Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Real Estate Index (the “Index”). The Index measures the performance of the real estate sector of the U.S. equity market and includes companies in the hotel and resort companies and real estate investment trusts that invest in apartments, office and retail properties industry sub-groups. The Fund invests in a representative sample of securities in the Index that have a similar investment profile as the entire Index. For the six-month period ended October 31, 2004 (the “reporting period”), the Fund returned 24.86%, while the Index returned 25.39%.

Broad equity markets, as measured by the Dow Jones U.S. Total Market Index, generally posted modest gains for the reporting period. On the economic front, data continued to provide positive, but somewhat inconsistent, signs of recovery. Annual gross domestic product (“GDP”) grew 3.0% during the second quarter of 2004, lagging many economists’ expectations. The annual GDP growth rate for the third quarter of 2004 was a more encouraging 3.7%, but still fell short of forecasts as increased consumer spending was offset by slower paces for both inventory building and exports. Oil prices soared during the reporting period, reaching $55 per barrel in late October. The Federal Reserve Board raised short-term interest rates three times during the reporting period, overall from 1.00% to 1.75%.

The real estate sector was one of the strongest performers during the reporting period, continuing to benefit from a real estate boom. In addition, companies involved with properties such as shopping centers and public storage units, tended to respond well to the improving economic conditions.

All of the Fund’s ten largest holdings as of October 31, 2004 posted gains for the reporting period. The Rouse Co., which develops and manages commercial properties, was the strongest performer for the reporting period. Real estate investment trusts Vornado Realty Trust and ProLogis also delivered healthy gains. Plum Creek Timber Co. Inc. and Archstone-Smith Trust also performed well. The weakest performer among the Fund’s ten largest holdings was Equity Office Properties Trust, which logged double-digit gains for the reporting period.

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE 7

Management’s Discussion of Fund Performance

iSHARES^® COHEN & STEERS REALTY MAJORS INDEX FUND

Performance as of 10/31/04

Average Annual Total Returns												Cumulative Total Returns
Year Ended 10/31/04						Inception to 10/31/04						Inception to 10/31/04
NAV		MARKET		INDEX		NAV		MARKET		INDEX		NAV		MARKET		INDEX
32.25	%	32.36	%	32.99	%	19.18	%	19.18	%	19.70	%	93.30	%	93.32	%	96.25	%

Total returns for the periods since inception are calculated from the inception date of the Fund (1/29/01). “Average annual total returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative total returns” represent the total change in value of an investment over the periods indicated.

Certain sectors and markets performed exceptionally well based on market conditions during the six-month period. Investors should not expect that such exceptional returns will be repeated.

The Fund’s per share net asset value or “NAV” is the value of one share of the 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 shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (2/2/01), the NAV of the Fund is used as a proxy for the 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.

The iShares Cohen & Steers Realty Majors Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Cohen & Steers Realty Majors Index (the “Index”). The Index consists of selected real estate investment trusts (“REITs”). The objective of the Index is to represent relatively large and liquid REITs that may benefit from future consolidation and securitization of the U.S. real estate industry. The Fund invests in a representative sample of the securities in the Index that have a similar investment profile as the entire Index. For the six-month period ended October 31, 2004 (the “reporting period”), the Fund returned 28.16%, while the Index returned 28.64%.

Broad equity markets, as measured by the Dow Jones U.S. Total Market Index, generally posted modest gains for the reporting period. On the economic front, data continued to provide positive, but somewhat inconsistent, signs of recovery. Annual gross domestic product (“GDP”) grew 3.0% during the second quarter of 2004, lagging many economists’ expectations. The annual GDP growth rate for the third quarter of 2004 was a more encouraging 3.7%, but still fell short of forecasts as increased consumer spending was offset by slower paces for both inventory building and exports. Oil prices soared during the reporting period, reaching $55 per barrel in late. The Federal Reserve Board raised short-term interest rates three times during the reporting period, overall from 1.00% to 1.75%.

Real estate shares were generally some of the strongest performers for the reporting period, benefiting from high demand in a low-interest rate environment. In particular, the improving economic conditions translated into increased business for shopping malls, public storage facilities, and office complexes, in which REITs invest. Strong performance in these areas benefited individual constituents of the Fund, all of which are REITs.

Among the Fund’s ten largest holdings as of October 31, 2004, all posted gains for the reporting period. The Rouse Co., which develops and manages commercial properties, was the strongest performer for the reporting period. Vornado Realty Trust, ProLogis, and Boston Properties Inc. also posted healthy gains. Public Storage Inc. and Archstone-Smith Trust both performed well. The weakest performer among the Fund’s ten largest holdings was Equity Office Properties Trust, which logged double-digit gains for the reporting period.

8 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

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 May 1, 2004 to October 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 (May 1, 2004)		Ending Account Value (October 31, 2004)		Annualized Expense Ratio		Expenses Paid During Period* (May 1 to October 31, 2004)
Dow Jones U.S. Basic Materials Sector
Actual	$	1,000.00	$	1,104.40	0.60	%	$	3.18
Hypothetical (5% return before expenses)		1,000.00		1,022.18	0.60			3.06
Dow Jones U.S. Consumer Cyclical Sector
Actual		1,000.00		1,011.70	0.60			3.04
Hypothetical (5% return before expenses)		1,000.00		1,022.18	0.60			3.06
Dow Jones U.S. Consumer Non-Cyclical Sector
Actual		1,000.00		930.10	0.60			2.92
Hypothetical (5% return before expenses)		1,000.00		1,022.18	0.60			3.06
Dow Jones U.S. Financial Sector
Actual		1,000.00		1,051.90	0.60			3.10
Hypothetical (5% return before expenses)		1,000.00		1,022.18	0.60			3.06

SHAREHOLDER EXPENSES 9

Shareholder Expenses (Continued)

iSHARES^® TRUST

iShares Index Fund	Beginning Account Value (May 1, 2004)		Ending Account Value (October 31, 2004)		Annualized Expense Ratio		Expenses Paid During Period* (May 1 to October 31, 2004)
Dow Jones U.S. Industrial Sector
Actual	$	1,000.00	$	1,080.90	0.60	%	$	3.15
Hypothetical (5% return before expenses)		1,000.00		1,022.18	0.60			3.06
Dow Jones U.S. Financial Services
Actual		1,000.00		1,068.70	0.60			3.13
Hypothetical (5% return before expenses)		1,000.00		1,022.18	0.60			3.06
Dow Jones U.S. Real Estate
Actual		1,000.00		1,248.60	0.60			3.40
Hypothetical (5% return before expenses)		1,000.00		1,022.18	0.60			3.06
Cohen & Steers Realty Majors
Actual		1,000.00		1,281.60	0.35			2.01
Hypothetical (5% return before expenses)		1,000.00		1,023.44	0.35			1.79

* 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 (184 days), and divided by the number of days in the year (365 days).

10 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

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

October 31, 2004

Security	Shares	Value
COMMON STOCKS – 99.97%
BIOTECHNOLOGY – 0.17%
Cambrex Corp.1	25,737	$	575,737
			575,737
CHEMICALS – 54.84%
Air Products & Chemicals Inc.	220,693		11,736,454
Airgas Inc.	66,607		1,638,532
Albemarle Corp.1	34,175		1,225,174
Cabot Corp.	63,880		2,177,030
Cabot Microelectronics Corp.1,2	25,656		924,386
Crompton Corp.	118,624		1,103,203
Cytec Industries Inc.1	37,439		1,741,288
Dow Chemical Co. (The)	973,475		43,747,966
Du Pont (E.I.) de Nemours and Co.	1,034,060		44,330,152
Eastman Chemical Co.1	80,507		3,821,667
Ecolab Inc.	192,000		6,499,200
Engelhard Corp.	128,868		3,646,964
Ferro Corp.1	43,366		913,722
FMC Corp.1,2	35,661		1,563,735
Fuller (H.B.) Co.	29,442		791,990
Georgia Gulf Corp.	34,325		1,553,893
Great Lakes Chemical Corp.1	45,359		1,162,098
Hercules Inc.2	104,462		1,491,717
International Flavors & Fragrances Inc.	83,514		3,261,222
Lubrizol Corp.	67,757		2,353,201
Lyondell Chemical Co.1	174,931		4,019,914
MacDermid Inc.	23,240		733,454
Millennium Chemicals Inc.1,2	67,801		1,456,365
Minerals Technologies Inc.1	21,307		1,280,551
Mosaic Co. (The)1,2	130,656		1,965,066
Olin Corp.	72,405		1,353,973
OM Group Inc.2	29,351		968,289
PPG Industries Inc.	177,452		11,312,565
Praxair Inc.	336,982		14,220,640
Rohm & Haas Co.	149,426		6,334,168
RPM International Inc.1	119,994		2,115,494
Schulman (A.) Inc.	31,069		616,720
Sensient Technologies Corp.1	45,429		986,718
Sigma-Aldrich Corp.	61,356		3,413,848
Valspar Corp. (The)	49,269		2,298,891
Wellman Inc.1	33,486		247,127
			189,007,377
FOREST PRODUCTS & PAPER – 17.10%
Boise Cascade Corp.	90,710		2,677,759
Bowater Inc.1	57,527		2,119,295
Caraustar Industries Inc.1,2	29,660		441,044
Georgia-Pacific Corp.	236,102		8,166,768
International Paper Co.	503,911		19,405,613
Louisiana-Pacific Corp.	106,067		2,599,702
MeadWestvaco Corp.	209,161		6,594,846
Pope & Talbot Inc.1	15,560		234,645
Potlatch Corp.1	30,608		1,441,331
Wausau-Mosinee Paper Corp.1	50,187		784,925
Weyerhaeuser Co.	230,799		14,457,249
			58,923,177
HOUSEHOLD PRODUCTS & WARES – 1.92%
Avery Dennison Corp.	101,214		6,157,860
WD-40 Co.1	16,687		471,658
			6,629,518
IRON & STEEL – 5.63%
AK Steel Holding Corp.2	106,590		1,015,803
Allegheny Technologies Inc.	80,569		1,354,365
Carpenter Technology Corp.1	21,160		1,004,254
Cleveland-Cliffs Inc.1,2	11,072		807,149
International Steel Group Inc.1,2	70,804		2,614,792
Nucor Corp.	149,310		6,305,361
Ryerson Tull Inc.1	23,508		383,651
Steel Dynamics Inc.1	48,491		1,609,901
United States Steel Corp.1	117,469		4,313,462
			19,408,738
MANUFACTURING – 0.11%
Tredegar Corp.1	23,497		393,575
			393,575
METAL FABRICATE & HARDWARE – 0.42%
Worthington Industries Inc.	72,689		1,442,877
			1,442,877
MINING – 19.78%
Alcoa Inc.	901,370		29,294,525
Coeur d’Alene Mines Corp.1,2	220,624		1,092,089
Freeport-McMoRan Copper & Gold Inc.1	180,098		6,523,149
Meridian Gold Inc.1,2	102,890		1,738,841
Newmont Mining Corp.	420,797		19,996,273

SCHEDULES OF INVESTMENTS 11

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares or Principal		Value
Phelps Dodge Corp.		97,419	$	8,528,059
RTI International Metals Inc.1,2		21,996		440,580
Stillwater Mining Co.2		45,130		557,807
				68,171,323
TOTAL COMMON STOCKS (Cost: $326,333,610)				344,552,322
SHORT-TERM INVESTMENTS – 8.86%
COMMERCIAL PAPER – 1.50%
Amsterdam Funding Corp.
1.79%, 11/08/043	$	151,315		151,263
Aspen Funding Corp.
1.85%, 11/01/043		579,033		579,033
Barton Capital Corp.
1.78%, 11/04/043		174,321		174,295
1.79%, 11/08/043		158,348		158,293
CRC Funding LLC
1.78%, 11/09/043		100,877		100,837
Delaware Funding Corp.
1.78%, 11/10/043		110,965		110,915
Edison Asset Securitization
1.45%, 11/09/043		201,754		201,689
1.59%, 12/02/043		201,754		201,478
Eureka Securitization Inc.
1.79%, 11/01/043		85,715		85,715
Ford Credit Auto Receivables
1.85%, 01/14/053		100,877		100,493
Grampian Funding LLC
1.59%, 11/30/043		100,877		100,748
Liberty Street Funding Corp.
1.80%, 11/12/043		50,438		50,411
Nationwide Building Society
1.63%, 12/09/043		167,456		167,168
Polonius Inc.
1.79%, 11/12/043		100,877		100,822
Prudential Funding LLC
1.60%, 12/01/043		100,877		100,742
1.85%, 11/01/043		504,384		504,384
Ranger Funding Co. LLC
1.79%, 11/01/043		115,661		115,661
Security	Principal		Value
Scaldis Capital LLC
1.78%, 11/08/043	$	453,946	$	453,789
Thames Asset Global Securitization No. 1 Inc.
1.81%, 11/12/043		118,016		117,951
UBS Finance (Delaware)
1.11%, 12/17/043		302,631		302,202
1.85%, 11/01/043		1,008,769		1,008,769
Windmill Funding Corp.
1.79%, 11/02/043		30,263		30,262
1.79%, 11/03/043		121,052		121,040
1.79%, 11/08/043		146,877		146,826
				5,184,786
FLOATING RATE NOTES – 2.67%
American Express Credit Corp.
1.95%, 10/26/053		201,754		201,861
Bank of Nova Scotia
1.85%, 09/26/053		50,438		50,418
Beta Finance Inc.
1.78%, 05/04/053,4		121,052		121,040
1.89%, 09/23/053,4		181,578		181,514
1.89%, 09/27/053,4		161,403		161,345
1.91%, 03/15/053,4		100,877		100,907
2.04%, 10/27/053,4		191,666		191,874
Canadian Imperial Bank of Commerce
1.79%, 09/13/053		302,631		302,545
1.90%, 10/31/053		201,754		201,702
CC USA Inc.
1.78%, 05/04/053,4		201,754		201,733
2.06%, 07/29/053,4		201,754		201,709
Den Danske Bank NY
1.79%, 08/12/053		201,754		201,707
1.87%, 08/26/053		201,754		201,704
2.00%, 10/17/053		201,754		201,696
Depfa Bank PLC
1.86%, 09/15/053		201,754		201,754
Dorada Finance Inc.
2.06%, 07/29/053,4		167,456		167,418
Five Finance Inc.
1.91%, 04/29/053,4		161,403		161,395

12 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Principal		Value
HBOS Treasury Services PLC
1.96%, 04/22/053	$	201,754	$	201,754
K2 USA LLC
1.81%, 09/12/053,4		201,754		201,719
1.82%, 06/10/053,4		201,754		201,739
1.89%, 10/20/053,4		201,754		201,760
2.05%, 07/25/053,4		100,877		100,862
Links Finance LLC
1.82%, 04/15/053,4		201,754		201,736
2.12%, 04/25/053		201,754		201,817
National City Bank (Ohio)
1.79%, 08/09/053		201,754		201,707
1.85%, 06/10/053		100,877		100,896
1.86%, 06/23/053		201,754		201,715
Nationwide Building Society
1.96%, 10/28/053,4		342,981		343,026
Norddeutsche Landesbank
2.04%, 07/27/053		201,754		201,702
Northern Rock PLC
1.90%, 10/25/053,4		403,508		403,508
2.02%, 01/13/053,4		191,666		191,666
Permanent Financing PLC
1.81%, 03/10/053		201,754		201,754
1.82%, 12/10/043		100,877		100,877
1.84%, 06/10/053		90,789		90,789
Sigma Finance Inc.
1.84%, 11/15/043		201,754		201,753
1.86%, 08/17/053		100,877		100,884
1.86%, 09/15/053		252,192		252,212
Tango Finance Corp.
1.66%, 05/17/053,4		167,456		167,452
1.70%, 02/25/053,4		112,982		112,975
1.80%, 04/07/053,4		74,044		74,040
1.83%, 01/18/053,4		88,772		88,770
1.84%, 09/15/053,4		177,543		177,519
1.90%, 07/25/053,4		201,754		201,739
WhistleJacket Capital LLC
1.83%, 07/15/053,4		151,315		151,294
1.83%, 09/15/053		151,315		151,289
1.83%, 10/14/053,4		100,877		100,867
1.84%, 06/15/053,4		100,877		100,863
Security	Shares or Principal		Value
White Pine Finance LLC
1.68%, 05/20/053	$	90,789	$	90,784
1.80%, 07/05/053		100,877		100,862
1.82%, 04/15/053,4		151,315		151,302
1.83%, 11/15/043,4		121,052		121,052
1.84%, 06/15/053,4		82,719		82,719
1.89%, 03/29/053		86,754		86,746
1.90%, 08/26/053,4		100,877		100,860
2.02%, 07/11/053		50,438		50,435
Winston Funding Ltd.
2.16%, 01/23/053,4		144,052		144,052
				9,211,818
MEDIUM-TERM NOTES – 0.19%
CC USA Inc.
1.29%, 04/15/053,4		201,754		201,745
1.51%, 02/15/053,4		131,140		131,199
Dorada Finance Inc.
1.48%, 01/18/053,4		151,315		151,314
K2 USA LLC
1.46%, 01/12/053,4		100,877		100,875
WhistleJacket Capital LLC
1.32%, 02/04/053,4		50,438		50,436
				635,569
MONEY MARKET FUNDS – 1.85%
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares3,5		807,015		807,015
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares3,5		3,209,097		3,209,097
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares3,5		2,219,291		2,219,291
BlackRock Temp Cash Money Market Fund3		45,219		45,219
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares3		82,339		82,339
				6,362,961

SCHEDULES OF INVESTMENTS 13

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Principal		Value
REPURCHASE AGREEMENTS – 1.41%
Banc of America Securities LLC
1.86%, 11/01/043,6	$	807,015	$	807,015
Bank of America N.A.
1.86%, 11/01/043,6		2,017,538		2,017,538
Goldman Sachs & Co.
1.86%, 11/01/043,6		2,017,538		2,017,538
				4,842,091
TIME DEPOSITS – 1.03%
Abbey National Treasury Services PLC
1.25%, 01/06/053		201,754		201,745
1.33%, 02/10/053		100,877		100,873
1.39%, 02/02/053		100,877		100,873
1.39%, 04/08/053		141,228		141,218
Bank of New York
1.39%, 11/01/043		201,754		201,754
1.60%, 12/03/043		50,438		50,436
Canadian Imperial Bank of Commerce
1.38%, 11/22/043		50,438		50,439
HBOS Treasury Services PLC
1.24%, 04/01/053		129,122		129,117
Key Bank N.A
1.81%, 11/01/043		262,280		262,280
National City Bank (Ohio)
1.25%, 01/06/053		201,754		201,756
Nordea Bank PLC
2.11%, 06/07/053		201,754		201,730
Rabobank Nederland NV NY
1.85%, 11/01/043		403,508		403,508
Toronto-Dominion Bank
1.22%, 03/23/053		353,069		353,046
1.34%, 02/10/053		80,702		80,698
1.41%, 11/01/043		151,315		151,315
1.77%, 05/10/053		100,877		100,872
1.90%, 05/11/053		100,877		100,872
World Savings Bank FSB
1.76%, 11/12/043		716,226		716,222
				3,548,754
U.S. GOVERNMENT AGENCY NOTES – 0.21%
Federal Home Loan Mortgage Corp.
1.63%, 04/15/053		141,228		141,432
1.80%, 01/18/053		93,815		93,450
1.80%, 01/19/053		100,877		100,478
2.06%, 05/31/053		100,580		99,366
Federal National Mortgage Association
2.33%, 07/22/053		302,631		297,490
				732,216
TOTAL SHORT-TERM INVESTMENTS (Cost: $30,518,195)				30,518,195
TOTAL INVESTMENTS IN SECURITIES – 108.83% (Cost: $356,851,805)				375,070,517
Other Assets, Less Liabilities – (8.83%)				(30,431,286	)
NET ASSETS – 100.00%			$	344,639,231

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 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.

⁵ The Fund’s investment adviser is an affiliate of the issuer. See Note 2.

⁶ Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.57% to 8.00% and maturity dates ranging from 6/1/14 to 10/1/34.

INDUSTRY DIVERSIFICATION

Industry	Value		% of Net Assets
Chemicals	$	189,007,377	54.84	%
Mining		68,171,323	19.78
Forest Products & Paper		58,923,177	17.10
Iron & Steel		19,408,738	5.63
Household Products & Wares		6,629,518	1.92
Metal Fabricate & Hardware		1,442,877	0.42
Biotechnology		575,737	0.17
Manufacturing		393,575	0.11
Short-Term and Other Net Assets		86,909	0.03
TOTAL	$	344,639,231	100.00	%

See notes to financial statements.

14 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

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

October 31, 2004

Security	Shares	Value
COMMON STOCKS – 100.00%
ADVERTISING – 1.72%
ADVO Inc.	3,565	$	113,902
Catalina Marketing Corp.	5,658		144,901
Donnelley (R.H.) Corp.1	3,601		195,354
Harte-Hanks Inc.	5,818		149,755
Interpublic Group of Companies Inc.1	48,507		594,696
Lamar Advertising Co.1,2	9,512		393,987
Omnicom Group Inc.	21,524		1,698,244
ValueVision Media Inc. Class A1,2	2,962		30,923
			3,321,762
AIRLINES – 1.12%
AirTran Holdings Inc.1,2	9,724		112,993
Alaska Air Group Inc.1,2	3,219		84,788
AMR Corp.1,2	18,125		139,925
Continental Airlines Inc. Class B1,2	7,582		70,361
Delta Air Lines Inc.1,2	13,107		71,433
FLYi Inc.1,2	5,468		7,655
JetBlue Airways Corp.1,2	10,186		224,601
Northwest Airlines Corp.1,2	6,635		58,720
SkyWest Inc.2	6,701		114,453
Southwest Airlines Co.	81,613		1,287,037
			2,171,966
APPAREL – 2.84%
Coach Inc.1	21,563		1,005,483
Jones Apparel Group Inc.	14,507		512,097
Kellwood Co.	3,205		100,829
Liz Claiborne Inc.	12,415		507,525
Nike Inc. Class B	19,887		1,617,012
Phillips-Van Heusen Corp.2	2,816		64,177
Polo Ralph Lauren Corp.	6,665		246,138
Quiksilver Inc.1	6,771		184,510
Reebok International Ltd.	5,254		194,398
Russell Corp.	3,162		54,671
Stride Rite Corp.	4,417		45,716
Timberland Co. Class A1	2,633		161,666
Tommy Hilfiger Corp.1	10,469		100,502
Unifi Inc.1,2	5,719		18,587
VF Corp.	10,014		539,054
Wolverine World Wide Inc.	4,564		138,928
			5,491,293
AUTO MANUFACTURERS – 2.41%
Ford Motor Co.	201,684		2,627,943
General Motors Corp.2	53,045		2,044,885
			4,672,828
AUTO PARTS & EQUIPMENT – 1.89%
American Axle & Manufacturing Holdings Inc.	5,105		146,514
ArvinMeritor Inc.	8,041		150,045
BorgWarner Inc.	6,446		298,965
Cooper Tire & Rubber Co.	8,678		169,047
Dana Corp.	17,115		255,185
Delphi Corp.	56,718		476,998
Goodyear Tire & Rubber Co. (The)1,2	20,051		202,114
Johnson Controls Inc.	21,783		1,249,255
Lear Corp.	7,844		422,948
Modine Manufacturing Co.2	3,466		106,441
Superior Industries International Inc.2	2,547		69,457
Tower Automotive Inc.1,2	7,326		10,916
Visteon Corp.	14,229		101,168
			3,659,053
COMMERCIAL SERVICES – 0.84%
ADESA Inc.1	10,879		219,212
ARAMARK Corp. Class B	12,458		280,928
Interactive Data Corp.1	4,012		79,157
McKesson Corp.	31,539		840,830
Valassis Communications Inc.1	5,952		204,630
			1,624,757
COMPUTERS – 0.09%
FactSet Research Systems Inc.2	2,327		115,978
Lexar Media Inc.1,2	8,504		57,487
			173,465
DISTRIBUTION & WHOLESALE – 0.63%
Fastenal Co.2	7,522		415,440
Genuine Parts Co.	19,958		796,125
			1,211,565
ELECTRONICS – 0.15%
Gentex Corp.2	8,870		292,799
			292,799
ENTERTAINMENT – 1.14%
Alliance Gaming Corp.1,2	5,286		48,896

SCHEDULES OF INVESTMENTS 15

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
GTECH Holdings Corp.	13,466	$	318,740
International Game Technology Inc.	39,999		1,321,567
International Speedway Corp. Class A	3,055		143,707
Metro-Goldwyn-Mayer Inc.	8,874		104,891
Pinnacle Entertainment Inc.1	4,152		61,034
Scientific Games Corp. Class A1	7,398		156,690
Six Flags Inc.1	10,828		54,573
			2,210,098
HEALTH CARE - PRODUCTS – 0.22%
Henry Schein Inc.1	4,986		315,265
Oakley Inc.	2,821		35,827
PSS World Medical Inc.1	7,262		81,806
			432,898
HOME BUILDERS – 2.71%
Beazer Homes USA Inc.2	1,479		162,365
Centex Corp.	14,205		737,808
Champion Enterprises Inc.1,2	7,931		86,369
D.R. Horton Inc.	25,239		757,170
Fleetwood Enterprises Inc.1,2	6,422		80,853
Hovnanian Enterprises Inc. Class A1	3,861		144,942
KB Home	4,231		348,000
Lennar Corp. Class A2	14,212		639,256
Lennar Corp. Class B	1,254		51,765
M.D.C. Holdings Inc.	2,729		209,451
NVR Inc.1	669		419,463
Pulte Homes Inc.	12,005		658,834
Ryland Group Inc.	2,702		257,744
Standard-Pacific Corp.	3,455		193,998
Thor Industries Inc.2	4,509		125,395
Toll Brothers Inc.1,2	5,398		250,197
Winnebago Industries Inc.2	3,889		122,115
			5,245,725
HOME FURNISHINGS – 1.25%
Ethan Allen Interiors Inc.	4,304		163,939
Furniture Brands International Inc.	5,746		125,320
Harman International Industries Inc.	7,547		906,998
La-Z-Boy Inc.2	6,081		80,208
Leggett & Platt Inc.	21,968		617,960
Maytag Corp.2	8,303		144,472
Whirlpool Corp.	6,609		388,279
			2,427,176
HOUSEHOLD PRODUCTS & WARES – 0.17%
American Greetings Corp. Class A	7,225		191,101
Fossil Inc.1	4,429		131,807
			322,908
INTERNET – 0.65%
Amazon.com Inc.1,2	33,850		1,155,301
DoubleClick Inc.1,2	13,379		85,090
NetFlix Inc.1,2	2,994		28,353
			1,268,744
LEISURE TIME – 3.12%
Bally Total Fitness Holding Corp.1	3,874		15,496
Brunswick Corp.	10,995		515,885
Callaway Golf Co.2	7,441		77,610
Carnival Corp.	48,954		2,475,114
Harley-Davidson Inc.	33,823		1,947,190
Multimedia Games Inc.1	3,312		43,718
Nautilus Group Inc. (The)2	3,451		67,812
Polaris Industries Inc.2	5,014		297,581
Royal Caribbean Cruises Ltd.	11,457		533,896
WMS Industries Inc.1,2	2,348		68,679
			6,042,981
LODGING – 3.26%
Aztar Corp.1	3,864		119,591
Caesars Entertainment Inc.1	30,864		552,466
Harrah’s Entertainment Inc.	12,834		751,046
Hilton Hotels Corp.	44,275		881,073
La Quinta Corp.1	18,822		151,517
Mandalay Resort Group	7,764		534,163
Marriott International Inc. Class A	21,201		1,155,242
MGM Mirage1,2	6,817		366,755
Starwood Hotels & Resorts Worldwide Inc.	23,863		1,138,981
Station Casinos Inc.2	5,418		276,047
Wynn Resorts Ltd.1,2	6,613		384,546
			6,311,427
MANUFACTURING – 0.51%
Eastman Kodak Co.2	32,839		994,365
			994,365
MEDIA – 26.23%
Belo (A.H.) Corp.	11,265		261,911
Cablevision Systems Corp.1,2	23,714		488,034

16 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
Charter Communications Inc. Class A1,2	30,333	$	76,439
Clear Channel Communications Inc.	61,643		2,058,876
Comcast Corp. Class A1	144,252		4,255,434
Comcast Corp. Class A Special1,2	99,385		2,886,140
Cox Communications Inc. Class A1	23,459		807,928
Cox Radio Inc. Class A1,2	4,327		68,799
Cumulus Media Inc. Class A1	6,080		98,800
DIRECTV Group Inc. (The)1	104,987		1,760,632
Dow Jones & Co. Inc.	5,174		228,950
EchoStar Communications Corp.1	24,840		785,441
Emmis Communications Corp.1	5,964		111,527
Entercom Communications Corp.1	4,516		149,931
Fox Entertainment Group Inc. Class A1	20,002		593,259
Gannett Co. Inc.	31,244		2,591,690
Gemstar-TV Guide International Inc.1	28,711		165,088
Hearst-Argyle Television Inc.	3,115		81,177
Hollinger International Inc.	5,243		93,588
Insight Communications Co. Inc.1	6,054		51,217
Knight Ridder Inc.	9,201		630,545
Lee Enterprises Inc.2	4,170		193,154
Liberty Media Corp. Class A	282,633		2,521,086
Liberty Media International Inc. Class A1	15,596		562,236
McClatchy Co. (The) Class A	2,286		158,877
McGraw-Hill Companies Inc. (The)	21,973		1,895,171
Media General Inc. Class A	2,349		136,947
Meredith Corp.	4,620		226,380
New York Times Co. Class A	16,806		673,080
Radio One Inc. Class D1	7,321		107,546
Readers Digest Association Inc. (The)	9,782		137,731
Scholastic Corp.1	3,285		99,601
Scripps (E.W.) Co. Class A	9,321		444,798
Sinclair Broadcast Group Inc. Class A	5,411		37,877
Sirius Satellite Radio Inc.1,2	142,099		554,186
Time Warner Inc.1	504,879		8,401,187
Tribune Co.	24,232		1,046,822
UnitedGlobalCom Inc. Class A1	41,618		311,303
Univision Communications Inc. Class A1	29,209		904,311
Viacom Inc. Class A2	4,420		163,805
Viacom Inc. Class B	171,910		6,272,996
Walt Disney Co. (The)	235,384		5,936,384
Washington Post Co. (The) Class B	700		640,500
Westwood One Inc.1	8,832		203,843
Wiley (John) & Sons Inc. Class A	4,453		144,500
XM Satellite Radio Holdings Inc. Class A1,2	23,503		759,617
Young Broadcasting Inc. Class A1	1,980		22,770
			50,802,114
MINING – 0.06%
Owens & Minor Inc.	4,503		117,934
			117,934
OFFICE FURNISHINGS – 0.27%
Herman Miller Inc.	8,237		190,275
HNI Corp.	5,436		219,614
Interface Inc. Class A1	4,896		42,546
Steelcase Inc. Class A2	5,363		70,255
			522,690
PHARMACEUTICALS – 1.60%
AmerisourceBergen Corp.	12,852		707,374
Cardinal Health Inc.	49,336		2,306,458
Priority Healthcare Corp. Class B1	4,229		76,376
			3,090,208
RETAIL – 44.61%
Abercrombie & Fitch Co. Class A	10,871		425,925
Advance Auto Parts Inc.1	8,518		333,224
Aeropostale Inc.1	6,403		202,015
American Eagle Outfitters Inc.	5,857		239,434
AnnTaylor Stores Corp.1	7,854		176,401
Applebee’s International Inc.	9,498		217,219
AutoNation Inc.1	22,610		389,570
AutoZone Inc.1,2	7,426		607,521
Barnes & Noble Inc.1	6,275		208,769
Bed Bath & Beyond Inc.1	34,304		1,399,260
Best Buy Co. Inc.	30,356		1,797,682
Big Lots Inc.1,2	13,080		162,061
BJ’s Wholesale Club Inc.1,2	7,925		230,063
Bob Evans Farms Inc.	3,983		94,955
Borders Group Inc.	8,880		202,375
Brinker International Inc.1	11,104		358,659
CarMax Inc.1,2	11,852		312,182
Cato Corp. Class A	2,228		51,155
CBRL Group Inc.	5,540		200,880
CEC Entertainment Inc.1	4,255		161,775

SCHEDULES OF INVESTMENTS 17

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
Charming Shoppes Inc.1	12,947	$	98,786
Cheesecake Factory (The)1,2	5,973		259,288
Chico’s FAS Inc.1,2	10,184		407,666
Children’s Place Retail Stores Inc. (The)1	1,668		51,491
Christopher & Banks Corp.2	4,347		70,639
Circuit City Stores Inc.	22,039		358,134
Claire’s Stores Inc.	9,334		242,871
Cost Plus Inc.1,2	2,485		80,266
Costco Wholesale Corp.	52,965		2,539,142
CVS Corp.	45,636		1,983,341
Darden Restaurants Inc.	16,962		415,569
Dillard’s Inc. Class A	7,793		159,679
Dollar General Corp.	35,004		673,827
Dollar Tree Stores Inc.1	13,299		384,341
Dress Barn Inc.1	2,598		41,646
Family Dollar Stores Inc.	18,291		540,499
Federated Department Stores Inc.	20,715		1,045,072
Foot Locker Inc.	16,681		407,016
Fred’s Inc.2	3,618		63,424
Gap Inc. (The)	75,311		1,504,714
Genesco Inc.1,2	2,411		61,722
Guitar Center Inc.1	2,776		123,893
Hollywood Entertainment Corp.1	6,655		64,687
Home Depot Inc.	254,987		10,474,866
Hot Topic Inc.1,2	5,472		112,504
IHOP Corp.2	2,270		86,941
Jack in the Box Inc.1	4,202		140,221
Kenneth Cole Productions Inc. Class A	1,161		30,767
Kmart Holding Corp.1,2	4,303		396,048
Kohl’s Corp.1	34,847		1,768,834
Krispy Kreme Doughnuts Inc.1,2	6,548		69,409
Limited Brands Inc.	50,671		1,255,627
Linens ’n Things Inc.1	5,186		124,879
Lone Star Steakhouse & Saloon Inc.	2,247		54,175
Longs Drug Stores Corp.2	3,373		83,313
Lowe’s Companies Inc.	81,691		4,597,569
May Department Stores Co. (The)	33,203		865,270
McDonald’s Corp.	144,433		4,210,222
Men’s Wearhouse Inc. (The)1,2	3,917		121,740
Michaels Stores Inc.	15,610		454,251
Neiman-Marcus Group Inc. Class A2	3,335		202,868
99 Cents Only Stores1,2	5,475		84,370
Nordstrom Inc.	12,150		524,637
Office Depot Inc.1	35,654		577,238
O’Reilly Automotive Inc.1,2	6,356		273,689
Outback Steakhouse Inc.2	8,482		335,802
P.F. Chang’s China Bistro Inc.1,2	2,765		140,573
Pacific Sunwear of California Inc.1	8,760		205,334
Panera Bread Co. Class A1,2	3,240		113,173
Papa John’s International Inc.1,2	1,516		48,936
Payless ShoeSource Inc.1,2	7,942		75,528
Penney (J.C.) Co. Inc. (Holding Co.)2	32,415		1,121,235
Pep Boys-Manny, Moe & Jack Inc.	6,586		93,653
PETCO Animal Supplies Inc.1	4,755		170,086
PETsMART Inc.2	16,611		531,220
Pier 1 Imports Inc.	9,216		165,427
RadioShack Corp.	18,400		550,712
Rite Aid Corp.1	51,048		189,899
Ross Stores Inc.	17,414		457,466
Ruby Tuesday Inc.	7,267		179,495
Ryan’s Restaurant Group Inc.1	4,651		65,067
Saks Inc.	14,492		177,092
Sears, Roebuck and Co.	22,617		791,595
ShopKo Stores Inc.1,2	3,440		59,306
Sonic Corp.1,2	6,707		182,632
Sports Authority Inc. (The)1	2,642		63,884
Staples Inc.	57,109		1,698,422
Starbucks Corp.1	45,591		2,410,852
Stein Mart Inc.1	2,904		48,264
Talbots Inc. (The)	2,750		72,573
Target Corp.	94,915		4,747,648
Tiffany & Co.	16,777		492,069
TJX Companies Inc.	57,820		1,386,524
Toys R Us Inc.1	24,444		440,236
Tractor Supply Co.1	4,003		145,229
Triarc Companies Inc. Class B2	2,108		24,094
Tuesday Morning Corp.1	3,024		98,703
Urban Outfitters Inc.1,2	6,553		268,673
Walgreen Co.	117,506		4,217,290
Wal-Mart Stores Inc.	302,505		16,311,070
Wendy’s International Inc.	12,290		410,117
Williams-Sonoma Inc.1	10,720		409,182

18 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares or Principal		Value
Yum! Brands Inc.		33,794	$	1,470,039
Zale Corp.1		5,904		168,382
				86,395,758
SOFTWARE – 1.26%
Activision Inc.1		16,027		232,071
Avid Technology Inc.1,2		3,686		195,284
Electronic Arts Inc.1		34,299		1,540,711
Pixar Inc.1,2		2,815		226,382
Take-Two Interactive Software Inc.1,2		5,170		170,403
THQ Inc.1,2		4,484		84,748
				2,449,599
TELECOMMUNICATIONS – 0.28%
NTL Inc.1		8,087		537,866
				537,866
TEXTILES – 0.27%
Mohawk Industries Inc.1		6,197		527,241
				527,241
TOYS, GAMES & HOBBIES – 0.70%
Hasbro Inc.		18,083		319,888
Jakks Pacific Inc.1,2		3,085		48,620
Marvel Enterprises Inc.1,2		9,414		144,976
Mattel Inc.		47,646		834,281
				1,347,765
TOTAL COMMON STOCKS (Cost: $204,690,213)				193,666,985
SHORT-TERM INVESTMENTS – 10.22%
COMMERCIAL PAPER – 1.74%
Amsterdam Funding Corp.
1.79%, 11/08/043	$	98,128		98,093
Aspen Funding Corp.
1.85%, 11/01/043		375,501		375,501
Barton Capital Corp.
1.78%, 11/04/043		113,047		113,030
1.79%, 11/08/043		102,689		102,653
CRC Funding LLC
1.78%, 11/09/043		65,418		65,392
Delaware Funding Corp.
1.78%, 11/10/043		71,960		71,928
Security	Principal		Value
Edison Asset Securitization
1.45%, 11/09/043	$	130,837	$	130,795
1.59%, 12/02/043		130,837		130,658
Eureka Securitization Inc.
1.79%, 11/01/043		55,586		55,586
Ford Credit Auto Receivables
1.85%, 01/14/053		65,418		65,170
Grampian Funding LLC
1.59%, 11/30/043		65,418		65,335
Liberty Street Funding Corp.
1.80%, 11/12/043		32,709		32,691
Nationwide Building Society
1.63%, 12/09/043		108,595		108,408
Polonius Inc.
1.79%, 11/12/043		65,418		65,383
Prudential Funding LLC
1.60%, 12/01/043		65,418		65,331
1.85%, 11/01/043		327,092		327,092
Ranger Funding Co. LLC
1.79%, 11/01/043		75,006		75,006
Scaldis Capital LLC
1.78%, 11/08/043		294,383		294,281
Thames Asset Global Securitization No. 1 Inc.
1.81%, 11/12/043		76,533		76,491
UBS Finance (Delaware)
1.11%, 12/17/043		196,255		195,977
1.85%, 11/01/043		654,184		654,184
Windmill Funding Corp.
1.79%, 11/02/043		19,626		19,625
1.79%, 11/03/043		78,502		78,494
1.79%, 11/08/043		95,249		95,216
				3,362,320
FLOATING RATE NOTES – 3.08%
American Express Credit Corp.
1.95%, 10/26/053		130,837		130,906
Bank of Nova Scotia
1.85%, 09/26/053		32,709		32,696
Beta Finance Inc.
1.78%, 05/04/053,4		78,502		78,494

SCHEDULES OF INVESTMENTS 19

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Principal		Value
1.89%, 09/23/053,4	$	117,753	$	117,712
1.89%, 09/27/053,4		104,669		104,632
1.91%, 03/15/053,4		65,418		65,438
2.04%, 10/27/053,4		124,295		124,430
Canadian Imperial Bank of Commerce
1.79%, 09/13/053		196,255		196,200
1.90%, 10/31/053		130,837		130,803
CC USA Inc.
1.78%, 05/04/053,4		130,837		130,824
2.06%, 07/29/053,4		130,837		130,808
Den Danske Bank NY
1.79%, 08/12/053		130,837		130,806
1.87%, 08/26/053		130,837		130,805
2.00%, 10/17/053		130,837		130,799
Depfa Bank PLC
1.86%, 09/15/053		130,837		130,837
Dorada Finance Inc.
2.06%, 07/29/053,4		108,595		108,570
Five Finance Inc.
1.91%, 04/29/053,4		104,669		104,664
HBOS Treasury Services PLC
1.96%, 04/22/053		130,837		130,837
K2 USA LLC
1.81%, 09/12/053,4		130,837		130,814
1.82%, 06/10/053,4		130,837		130,827
1.89%, 10/20/053,4		130,837		130,841
2.05%, 07/25/053,4		65,418		65,409
Links Finance LLC
1.82%, 04/15/053,4		130,837		130,825
2.12%, 04/25/053		130,837		130,878
National City Bank (Ohio)
1.79%, 08/09/053		130,837		130,807
1.85%, 06/10/053		65,418		65,431
1.86%, 06/23/053		130,837		130,812
Nationwide Building Society
1.96%, 10/28/053,4		222,422		222,452
Norddeutsche Landesbank
2.04%, 07/27/053		130,837		130,803
Northern Rock PLC
1.90%, 10/25/053,4		261,674		261,674
2.02%, 01/13/053,4		124,295		124,295
Permanent Financing PLC
1.81%, 03/10/053		130,837		130,837
1.82%, 12/10/043		65,418		65,418
1.84%, 06/10/053		58,877		58,877
Sigma Finance Inc.
1.84%, 11/15/043		130,837		130,836
1.86%, 08/17/053		65,418		65,423
1.86%, 09/15/053		163,546		163,559
Tango Finance Corp.
1.66%, 05/17/053,4		108,595		108,592
1.70%, 02/25/053,4		73,269		73,264
1.80%, 04/07/053,4		48,017		48,015
1.83%, 01/18/053,4		57,568		57,567
1.84%, 09/15/053,4		115,136		115,121
1.90%, 07/25/053,4		130,837		130,827
WhistleJacket Capital LLC
1.83%, 07/15/053,4		98,128		98,114
1.83%, 09/15/053		98,128		98,110
1.83%, 10/14/053,4		65,418		65,412
1.84%, 06/15/053,4		65,418		65,410
White Pine Finance LLC
1.68%, 05/20/053		58,877		58,873
1.80%, 07/05/053		65,418		65,409
1.82%, 04/15/053,4		98,128		98,119
1.83%, 11/15/043,4		78,502		78,502
1.84%, 06/15/053,4		53,643		53,643
1.89%, 03/29/053		56,260		56,255
1.90%, 08/26/053,4		65,418		65,408
2.02%, 07/11/053		32,709		32,707
Winston Funding Ltd.
2.16%, 01/23/053,4		93,417		93,417
				5,973,844
MEDIUM-TERM NOTES – 0.21%
CC USA Inc.
1.29%, 04/15/053,4		130,837		130,831
1.51%, 02/15/053,4		85,044		85,082
Dorada Finance Inc.
1.48%, 01/18/053,4		98,128		98,127
K2 USA LLC
1.46%, 01/12/053,4		65,418		65,417

20 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares or Principal		Value
WhistleJacket Capital LLC
1.32%, 02/04/053,4	$	32,709	$	32,707
				412,164
MONEY MARKET FUNDS – 2.14%
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares3,5		523,348		523,348
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares3,5		2,090,676		2,090,676
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares3,5		1,439,204		1,439,204
BlackRock Temp Cash Money Market Fund3		29,324		29,324
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares3		53,397		53,397
				4,135,949
REPURCHASE AGREEMENTS – 1.62%
Banc of America Securities LLC
1.86%, 11/01/043,6		523,348		523,348
Bank of America N.A
1.86%, 11/01/043,6		1,308,368		1,308,368
Goldman Sachs & Co.
1.86%, 11/01/043,6		1,308,368		1,308,368
				3,140,084
TIME DEPOSITS – 1.19%
Abbey National Treasury Services PLC
1.25%, 01/06/053		130,837		130,837
1.33%, 02/10/053		65,418		65,416
1.39%, 02/02/053		65,418		65,416
1.39%, 04/08/053		91,586		91,564
Bank of New York
1.39%, 11/01/043		130,837		130,837
1.60%, 12/03/043		32,709		32,708
Canadian Imperial Bank of Commerce
1.38%, 11/22/043		32,709		32,709
Security	Principal		Value
HBOS Treasury Services PLC
1.24%, 04/01/053	$	83,736	$	83,732
Key Bank N.A.
1.81%, 11/01/043		170,088		170,088
National City Bank (Ohio)
1.25%, 01/06/053		130,837		130,838
Nordea Bank PLC
2.11%, 06/07/053		130,837		130,821
Rabobank Nederland NV NY
1.85%, 11/01/043		261,674		261,674
Toronto-Dominion Bank
1.22%, 03/23/053		228,964		228,949
1.34%, 02/10/053		52,335		52,333
1.41%, 11/01/043		98,128		98,128
1.77%, 05/10/053		65,418		65,415
1.90%, 05/11/053		65,418		65,415
World Savings Bank FSB
1.76%, 11/12/043		464,470		464,468
				2,301,348
U.S. GOVERNMENT AGENCY NOTES – 0.24%
Federal Home Loan Mortgage Corp.
1.63%, 04/15/053		91,586		91,718
1.80%, 01/18/053		60,839		60,602
1.80%, 01/19/053		65,418		65,160
2.06%, 05/31/053		65,226		64,439
Federal National Mortgage Association
2.33%, 07/22/053		196,255		192,922
				474,841
TOTAL SHORT-TERM INVESTMENTS (Cost: $19,800,550)				19,800,550
TOTAL INVESTMENTS IN SECURITIES – 110.22% (Cost: $224,490,763)				213,467,535
Other Assets, Less Liabilities – (10.22%)				(19,801,868	)
NET ASSETS – 100.00%			$	193,665,667

SCHEDULES OF INVESTMENTS 21

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

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 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.

⁵ The Fund’s investment adviser is an affiliate of the issuer. See Note 2.

⁶ Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.57% to 8.00% and maturity dates ranging from 6/1/14 to 10/1/34.

INDUSTRY DIVERSIFICATION

Industry	Value			% of Net Assets
Retail	$	86,395,758		44.61	%
Media		50,802,114		26.23
Lodging		6,311,427		3.26
Leisure Time		6,042,981		3.12
Apparel		5,491,293		2.84
Home Builders		5,245,725		2.71
Auto Manufacturers		4,672,828		2.41
Auto Parts & Equipment		3,659,053		1.89
Advertising		3,321,762		1.72
Pharmaceuticals		3,090,208		1.60
Software		2,449,599		1.26
Home Furnishings		2,427,176		1.25
Entertainment		2,210,098		1.14
Airlines		2,171,966		1.12
Commercial Services		1,624,757		0.84
Toys, Games & Hobbies		1,347,765		0.70
Internet		1,268,744		0.65
Distribution & Wholesale		1,211,565		0.63
Manufacturing		994,365		0.51
Telecommunications		537,866		0.28
Textiles		527,241		0.27
Office Furnishings		522,690		0.27
Health Care - Products		432,898		0.22
Household Products & Wares		322,908		0.17
Electronics		292,799		0.15
Computers		173,465		0.09
Mining		117,934		0.06
Short-Term and Other Net Assets		(1,318	)	0.00
TOTAL	$	193,665,667		100.00	%

See notes to financial statements.

22 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

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

October 31, 2004

Security	Shares	Value
COMMON STOCKS – 99.92%
AGRICULTURE – 12.19%
Altria Group Inc.	657,505	$	31,862,692
Bunge Ltd.1	35,268		1,683,342
Loews Corp. - Carolina Group	17,190		465,161
Reynolds American Inc.	27,552		1,897,231
Universal Corp.1	8,083		370,040
UST Inc.	53,123		2,186,543
			38,465,009
BEVERAGES – 23.82%
Anheuser-Busch Companies Inc.	256,720		12,823,164
Brown-Forman Corp. Class B	12,856		577,234
Coca-Cola Co. (The)	720,524		29,296,506
Coca-Cola Enterprises Inc.	79,476		1,661,843
Constellation Brands Inc.2	30,539		1,198,045
Coors (Adolph) Co. Class B	8,535		569,284
Pepsi Bottling Group Inc.	51,989		1,457,772
PepsiAmericas Inc.	22,107		447,667
PepsiCo Inc.	542,869		26,915,445
Robert Mondavi Corp. (The) Class A2	3,416		186,138
			75,133,098
COMMERCIAL SERVICES – 6.45%
Apollo Group Inc. Class A2	50,901		3,359,466
Block (H & R) Inc.	49,444		2,351,062
Career Education Corp.2	32,710		1,026,113
Cendant Corp.	326,232		6,717,117
Chemed Corp.	3,927		237,387
Corinthian Colleges Inc.1,2	28,528		409,662
DeVry Inc.1,2	19,402		283,269
Education Management Corp.2	19,022		510,170
ITT Educational Services Inc.1,2	14,700		558,747
Laureate Education Inc.2	13,480		528,686
Pre-Paid Legal Services Inc.1,2	4,930		137,498
Rent-A-Center Inc.2	25,147		603,277
Service Corp. International2	107,751		712,234
ServiceMaster Co. (The)	92,991		1,194,004
Sotheby’s Holdings Inc. Class A1,2	14,494		270,893
Stewart Enterprises Inc. Class A2	30,768		219,068
Strayer Education Inc.	4,431		429,984
United Rentals Inc.1,2	21,056		325,315
Weight Watchers International Inc.1,2	13,285		477,197
			20,351,149
COSMETICS & PERSONAL CARE – 25.42%
Alberto-Culver Co.	26,110		1,171,294
Avon Products Inc.	151,592		5,995,464
Colgate-Palmolive Co.	170,234		7,595,841
Estee Lauder Companies Inc. Class A	39,106		1,679,603
Gillette Co. (The)1	292,174		12,119,378
Kimberly-Clark Corp.	158,502		9,457,814
Procter & Gamble Co.	823,738		42,158,911
			80,178,305
ELECTRICAL COMPONENTS & EQUIPMENT – 0.37%
Energizer Holdings Inc.1,2	25,010		1,161,214
			1,161,214
FOOD – 20.29%
Albertson’s Inc.1	102,178		2,330,680
American Italian Pasta Co. Class A1	5,837		118,491
Archer-Daniels-Midland Co.	190,273		3,685,588
Campbell Soup Co.	81,629		2,190,922
Chiquita Brands International Inc.2	13,092		235,918
ConAgra Foods Inc.	169,437		4,473,137
Corn Products International Inc.1	11,092		545,726
Dean Foods Co.2	50,585		1,509,962
Del Monte Foods Co.2	63,245		675,457
Dreyer’s Grand Ice Cream Holdings Inc.1	7,275		584,037
Flowers Foods Inc.1	13,017		330,111
General Mills Inc.	96,066		4,250,920
Hain Celestial Group Inc.1,2	9,624		155,716
Heinz (H.J.) Co.	112,907		4,104,169
Hershey Foods Corp.	55,017		2,788,812
Hormel Foods Corp.	23,696		666,095
Kellogg Co.	75,820		3,260,260
Kraft Foods Inc.1	84,364		2,810,165
Kroger Co.2	217,521		3,286,742
McCormick & Co. Inc. NVS	39,141		1,386,766
Performance Food Group Co.1,2	14,889		346,318
Ralcorp Holdings Inc.1	9,258		340,232
Safeway Inc.2	143,164		2,611,311
Sara Lee Corp.	253,380		5,898,686
Smithfield Foods Inc.2	27,802		673,642
Smucker (J.M.) Co. (The)1	18,644		829,658

SCHEDULES OF INVESTMENTS 23

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares		Value
SUPERVALU Inc.		43,604	$	1,285,882
Sysco Corp.		204,992		6,615,092
Tootsie Roll Industries Inc.		7,195		218,152
Tyson Foods Inc. Class A		75,471		1,094,330
Whole Foods Market Inc.1		19,813		1,613,373
Wild Oats Markets Inc.1,2		7,772		47,254
Winn-Dixie Stores Inc.1		27,135		93,344
Wrigley (William Jr.) Co.		45,112		2,950,325
				64,007,273
HAND & MACHINE TOOLS – 1.18%
Black & Decker Corp.		25,721		2,064,882
Snap-On Inc.		16,945		497,844
Stanley Works (The)		26,126		1,163,130
				3,725,856
HOUSEHOLD PRODUCTS & WARES – 2.57%
Blyth Inc.		10,710		322,050
Church & Dwight Co. Inc.		19,635		534,465
Clorox Co.		49,897		2,724,376
Fortune Brands Inc.		46,195		3,363,920
Scotts Co. (The) Class A2		6,956		446,714
Tupperware Corp.1		16,483		275,101
Yankee Candle Co. Inc. (The)1,2		15,765		436,691
				8,103,317
HOUSEWARES – 0.60%
Newell Rubbermaid Inc.		88,078		1,898,962
				1,898,962
INTERNET – 6.07%
eBay Inc.2		158,633		15,484,167
IAC/InterActiveCorp1,2		160,350		3,466,767
Priceline.com Inc.1,2		6,798		135,552
Stamps.com Inc.		5,712		79,283
				19,165,769
MANUFACTURING – 0.23%
Lancaster Colony Corp.1		9,050		388,969
Matthews International Corp. Class A1		10,183		341,181
				730,150
PHARMACEUTICALS – 0.35%
NBTY Inc.2		19,279		530,944
VCA Antech Inc.1,2		26,096		585,072
				1,116,016
Security	Shares or Principal		Value
RETAIL – 0.38%
Casey’s General Store Inc.1		14,814	$	263,689
Nu Skin Enterprises Inc. Class A1		16,954		327,890
Regis Corp.		14,110		603,908
				1,195,487
TOTAL COMMON STOCKS (Cost: $325,992,196)				315,231,605
SHORT-TERM INVESTMENTS – 9.31%
COMMERCIAL PAPER – 1.58%
Amsterdam Funding Corp.
1.79%, 11/08/043	$	145,874		145,824
Aspen Funding Corp.
1.85%, 11/01/043		558,213		558,213
Barton Capital Corp.
1.78%, 11/04/043		168,053		168,028
1.79%, 11/08/043		152,655		152,602
CRC Funding LLC
1.78%, 11/09/043		97,250		97,211
Delaware Funding Corp.
1.78%, 11/10/043		106,975		106,927
Edison Asset Securitization
1.45%, 11/09/043		194,499		194,437
1.59%, 12/02/043		194,499		194,233
Eureka Securitization Inc.
1.79%, 11/01/043		82,633		82,634
Ford Credit Auto Receivables
1.85%, 01/14/053		97,250		96,880
Grampian Funding LLC
1.59%, 11/30/043		97,250		97,125
Liberty Street Funding Corp.
1.80%, 11/12/043		48,625		48,598
Nationwide Building Society
1.63%, 12/09/043		161,434		161,157
Polonius Inc.
1.79%, 11/12/043		97,250		97,196
Prudential Funding LLC
1.60%, 12/01/043		97,250		97,120
1.85%, 11/01/043		486,248		486,248
Ranger Funding Co. LLC
1.79%, 11/01/043		111,503		111,503

24 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Principal		Value
Scaldis Capital LLC
1.78%, 11/08/043	$	437,623	$	437,472
Thames Asset Global Securitization No. 1 Inc.
1.81%, 11/12/043		113,772		113,709
UBS Finance (Delaware)
1.11%, 12/17/043		291,749		291,335
1.85%, 11/01/043		972,496		972,496
Windmill Funding Corp.
1.79%, 11/02/043		29,175		29,173
1.79%, 11/03/043		116,700		116,688
1.79%, 11/08/043		141,596		141,546
				4,998,355
FLOATING RATE NOTES – 2.82%
American Express Credit Corp.
1.95%, 10/26/053		194,499		194,602
Bank of Nova Scotia
1.85%, 09/26/053		48,625		48,606
Beta Finance Inc.
1.78%, 05/04/053,4		116,700		116,688
1.89%, 09/23/053,4		175,049		174,987
1.89%, 09/27/053,4		155,599		155,543
1.91%, 03/15/053,4		97,250		97,279
2.04%, 10/27/053,4		184,774		184,975
Canadian Imperial Bank of Commerce
1.79%, 09/13/053		291,749		291,666
1.90%, 10/31/053		194,499		194,449
CC USA Inc.
1.78%, 05/04/053,4		194,499		194,480
2.06%, 07/29/053,4		194,499		194,456
Den Danske Bank NY
1.79%, 08/12/053		194,499		194,454
1.87%, 08/26/053		194,499		194,452
2.00%, 10/17/053		194,499		194,444
Depfa Bank PLC
1.86%, 09/15/053		194,499		194,499
Dorada Finance Inc.
2.06%, 07/29/053,4		161,434		161,398
Five Finance Inc.
1.91%, 04/29/053,4		155,599		155,592
HBOS Treasury Services PLC
1.96%, 04/22/053		194,499		194,499
K2 USA LLC
1.81%, 09/12/053,4		194,499		194,466
1.82%, 06/10/053,4		194,499		194,485
1.89%, 10/20/053,4		194,499		194,506
2.05%, 07/25/053,4		97,250		97,235
Links Finance LLC
1.82%, 04/15/053,4		194,499		194,482
2.12%, 04/25/053		194,499		194,560
National City Bank (Ohio)
1.79%, 08/09/053		194,499		194,454
1.85%, 06/10/053		97,250		97,268
1.86%, 06/23/053		194,499		194,462
Nationwide Building Society
1.96%, 10/28/053,4		330,649		330,691
Norddeutsche Landesbank
2.04%, 07/27/053		194,499		194,449
Northern Rock PLC
1.90%, 10/25/053,4		388,999		388,999
2.02%, 01/13/053,4		184,774		184,774
Permanent Financing PLC
1.81%, 03/10/053		194,499		194,499
1.82%, 12/10/043		97,250		97,250
1.84%, 06/10/053		87,525		87,525
Sigma Finance Inc.
1.84%, 11/15/043		194,499		194,499
1.86%, 08/17/053		97,250		97,256
1.86%, 09/15/053		243,124		243,143
Tango Finance Corp.
1.66%, 05/17/053,4		161,434		161,430
1.70%, 02/25/053,4		108,920		108,913
1.80%, 04/07/053,4		71,381		71,378
1.83%, 01/18/053,4		85,580		85,578
1.84%, 09/15/053,4		171,159		171,136
1.90%, 07/25/053,4		194,499		194,485
WhistleJacket Capital LLC
1.83%, 07/15/053,4		145,874		145,854
1.83%, 09/15/053		145,874		145,849
1.83%, 10/14/053,4		97,250		97,240
1.84%, 06/15/053,4		97,250		97,236

SCHEDULES OF INVESTMENTS 25

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares or Principal		Value
White Pine Finance LLC
1.68%, 05/20/053	$	87,525	$	87,520
1.80%, 07/05/053		97,250		97,235
1.82%, 04/15/053,4		145,874		145,861
1.83%, 11/15/043,4		116,700		116,700
1.84%, 06/15/053,4		79,745		79,745
1.89%, 03/29/053		83,635		83,627
1.90%, 08/26/053,4		97,250		97,234
2.02%, 07/11/053		48,625		48,621
Winston Funding Ltd.
2.16%, 01/23/053,4		138,872		138,872
				8,880,586
MEDIUM-TERM NOTES – 0.19%
CC USA Inc.
1.29%, 04/15/053,4		194,499		194,490
1.51%, 02/15/053,4		126,425		126,482
Dorada Finance Inc.
1.48%, 01/18/053,4		145,874		145,873
K2 USA LLC
1.46%, 01/12/053,4		97,250		97,248
WhistleJacket Capital LLC
1.32%, 02/04/053,4		48,625		48,622
				612,715
MONEY MARKET FUNDS – 1.93%
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares3,5		777,998		777,998
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares3,5		3,035,200		3,035,200
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares3,5		2,139,492		2,139,492
BlackRock Temp Cash Money Market Fund3		43,593		43,593
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares3		79,378		79,378
				6,075,661
Security	Principal		Value
REPURCHASE AGREEMENTS – 1.48%
Banc of America Securities LLC
1.86%, 11/01/043,6	$	777,998	$	777,998
Bank of America N.A.
1.86%, 11/01/043,6		1,944,993		1,944,993
Goldman Sachs & Co.
1.86%, 11/01/043,6		1,944,993		1,944,993
				4,667,984
TIME DEPOSITS – 1.09%
Abbey National Treasury Services PLC
1.25%, 01/06/053		194,499		194,499
1.33%, 02/10/053		97,250		97,246
1.39%, 02/02/053		97,250		97,246
1.39%, 04/08/053		136,149		136,135
Bank of New York
1.39%, 11/01/043		194,499		194,499
1.60%, 12/03/043		48,625		48,623
Canadian Imperial Bank of Commerce
1.38%, 11/22/043		48,625		48,625
HBOS Treasury Services PLC
1.24%, 04/01/053		124,480		124,474
Key Bank N.A.
1.81%, 11/01/043		252,849		252,849
National City Bank (Ohio)
1.25%, 01/06/053		194,499		194,501
Nordea Bank PLC
2.11%, 06/07/053		194,499		194,476
Rabobank Nederland NV NY
1.85%, 11/01/043		388,999		388,999
Toronto-Dominion Bank
1.22%, 03/23/053		340,374		340,350
1.34%, 02/10/053		77,800		77,796
1.41%, 11/01/043		145,874		145,874
1.77%, 05/10/053		97,250		97,245
1.90%, 05/11/053		97,250		97,245
World Savings Bank FSB
1.76%, 11/12/043		690,472		690,469
				3,421,151

26 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Principal		Value
U.S. GOVERNMENT AGENCY NOTES – 0.22%
Federal Home Loan Mortgage Corp.
1.63%, 04/15/053	$	136,149	$	136,347
1.80%, 01/18/053		90,442		90,089
1.80%, 01/19/053		97,250		96,865
2.06%, 05/31/053		96,964		95,793
Federal National Mortgage Association
2.33%, 07/22/053		291,749		286,793
				705,887
TOTAL SHORT-TERM INVESTMENTS (Cost: $29,362,339)				29,362,339
TOTAL INVESTMENTS IN SECURITIES – 109.23% (Cost: $355,354,535)				344,593,944
Other Assets, Less Liabilities – (9.23%)				(29,124,862	)
NET ASSETS – 100.00%			$	315,469,082

NVS - Non-Voting 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 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.

⁵ The Fund’s investment adviser is an affiliate of the issuer. See Note 2.

⁶ Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.57% to 8.00% and maturity dates ranging from 6/1/14 to 10/1/34.

INDUSTRY DIVERSIFICATION

Industry	Value		% of Net Assets
Cosmetics & Personal Care	$	80,178,305	25.42	%
Beverages		75,133,098	23.82
Food		64,007,273	20.29
Agriculture		38,465,009	12.19
Commercial Services		20,351,149	6.45
Internet		19,165,769	6.07
Household Products & Wares		8,103,317	2.57
Hand & Machine Tools		3,725,856	1.18
Housewares		1,898,962	0.60
Retail		1,195,487	0.38
Electrical Components & Equipment		1,161,214	0.37
Pharmaceuticals		1,116,016	0.35
Manufacturing		730,150	0.23
Short-Term and Other Net Assets		237,477	0.08
TOTAL	$	315,469,082	100.00	%

See notes to financial statements.

SCHEDULES OF INVESTMENTS 27

Schedule of Investments (Unaudited)

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

October 31, 2004

Security	Shares	Value
COMMON STOCKS – 99.83%
BANKS – 31.67%
AMCORE Financial Inc.	2,361	$	71,845
AmSouth Bancorp	37,779		996,988
Associated Bancorp1	12,895		447,328
Assurant Inc.	9,876		266,454
BancorpSouth Inc.1	7,594		180,661
Bank of America Corp.	435,543		19,507,971
Bank of Hawaii Corp.	5,689		271,650
Bank of New York Co. Inc. (The)	83,098		2,697,361
Banknorth Group Inc.	18,370		647,910
BB&T Corp.	59,390		2,441,523
Cathay General Bancorp	5,410		213,154
Chittenden Corp.1	4,957		140,382
Citizens Banking Corp.1	3,946		129,231
City National Corp.1	4,880		336,232
Colonial BancGroup Inc. (The)	14,339		310,439
Comerica Inc.	17,036		1,047,884
Commerce Bancorp Inc.1	8,462		501,289
Commerce Bancshares Inc.	7,131		350,132
Community First Bankshares Inc.	3,899		125,626
Compass Bancshares Inc.1	13,075		624,593
Cullen/Frost Bankers Inc.	5,475		268,275
East West Bancorp Inc.1	5,316		212,853
Fifth Third Bancorp	50,686		2,493,244
First BanCorp (Puerto Rico)1	3,935		214,576
First Horizon National Corp.1	13,164		569,738
First Midwest Bancorp Inc.1	5,036		175,807
First National Bankshares of Florida1	5,135		126,783
FirstMerit Corp.	7,745		202,377
FNB Corp. (Pennsylvania)1	4,524		92,878
Fremont General Corp.1	7,032		151,188
Fulton Financial Corp.1	13,153		282,263
Greater Bay Bancorp1	5,445		170,129
Hibernia Corp. Class A	16,535		479,515
Hudson United Bancorp	4,802		191,120
Huntington Bancshares Inc.1	23,150		554,442
Investors Financial Services Corp.1	7,041		271,008
KeyCorp	43,612		1,464,927
M&T Bank Corp.	10,016		1,031,648
Marshall & Ilsley Corp.	22,067		926,152
Mellon Financial Corp.	45,411		1,312,378
Mercantile Bankshares Corp.1	8,464		412,535
National City Corp.	62,252		2,425,960
North Fork Bancorp Inc.	31,123		1,372,524
Northern Trust Corp.	22,118		940,900
Old National Bancorp1	7,152		177,155
Pacific Capital Bancorp	4,665		148,487
Park National Corp.1	1,202		156,140
PNC Financial Services Group	30,262		1,582,703
Popular Inc.	26,065		670,392
Provident Bankshares Corp.1	3,454		119,957
Regions Financial Corp.	49,522		1,737,232
Republic Bancorp Inc.1	6,916		115,566
Silicon Valley Bancshares1,2	3,834		153,398
Sky Financial Group Inc.	11,266		302,830
South Financial Group Inc. (The)1	7,399		222,118
SouthTrust Corp.	35,677		1,554,447
Southwest Bancorp of Texas Inc.1	6,968		163,330
State Street Corp.	36,043		1,623,737
Sterling Bancshares Inc.1	4,848		68,696
SunTrust Banks Inc.	36,804		2,590,266
Susquehanna Bancshares Inc.1	5,039		125,320
Synovus Financial Corp.	27,546		748,976
TCF Financial Corp.1	14,137		445,598
Texas Regional Bancshares Inc. Class A1	4,806		153,456
TrustCo Bank Corp. NY1	7,958		106,558
Trustmark Corp.1	5,444		171,649
U.S. Bancorp	201,292		5,758,964
UCBH Holdings Inc.1	4,847		208,857
UnionBanCal Corp.	5,314		322,826
United Bancshares Inc.1	4,375		160,431
Valley National Bancorp1	10,668		302,545
W Holding Co. Inc.	8,640		172,714
Wachovia Corp.	140,240		6,901,210
Wells Fargo & Co.	180,716		10,792,360
Westamerica Bancorp1	3,372		192,845
Whitney Holding Corp.1	4,337		189,137
Wilmington Trust Corp.1	7,033		243,060
Zions Bancorporation	9,543		631,460
			86,666,293

28 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
COMMERCIAL SERVICES – 0.14%
Alliance Data Systems Corp.1,2	4,917	$	207,891
MoneyGram International Inc.1	9,497		176,644
			384,535
COMPUTERS – 0.07%
BISYS Group Inc. (The)1,2	12,972		189,391
			189,391
DIVERSIFIED FINANCIAL SERVICES – 34.77%
Affiliated Managers Group Inc.1,2	3,054		170,535
American Express Co.	120,350		6,386,975
AmeriCredit Corp.1,2	16,691		323,805
Ameritrade Holding Corp.2	30,712		399,870
Bear Stearns Companies Inc. (The)	11,063		1,048,219
Capital One Financial Corp.	25,691		1,894,968
CapitalSource Inc.1,2	7,037		157,629
Chicago Mercantile Exchange Holdings Inc.1	3,008		528,596
CIT Group Inc.1	22,638		914,575
Citigroup Inc.	553,726		24,568,823
Countrywide Financial Corp.	60,236		1,923,335
Doral Financial Corp.	9,898		415,518
E*TRADE Financial Corp.2	39,039		503,603
Eaton Vance Corp.	6,396		278,994
Edwards (A.G.) Inc.1	8,408		304,874
Federal Home Loan Mortgage Corp.	73,760		4,912,416
Federal National Mortgage Association	103,664		7,272,030
Federated Investors Inc. Class B	10,219		296,249
Franklin Resources Inc.	14,975		907,785
Friedman, Billings, Ramsey Group Inc. Class A1	15,147		259,620
Goldman Sachs Group Inc. (The)	44,145		4,342,985
IndyMac Bancorp Inc.	6,596		212,787
Investment Technology Group Inc.1,2	5,195		80,003
Janus Capital Group Inc.	25,657		391,269
Jefferies Group Inc.	5,194		208,435
JP Morgan Chase & Co.	381,424		14,722,966
Knight Trading Group Inc.1,2	12,747		132,441
LaBranche & Co. Inc.1,2	3,187		22,596
Legg Mason Inc.1	10,837		690,425
Lehman Brothers Holdings Inc.	29,065		2,387,690
MBNA Corp.	120,863		3,097,719
Merrill Lynch & Co. Inc.	92,231		4,974,940
Morgan Stanley	107,304		5,482,161
Piper Jaffray Companies Inc.1,2	2,100		91,833
Providian Financial Corp.2	31,225		485,549
Raymond James Financial Inc.1	6,276		163,804
Schwab (Charles) Corp. (The)	119,233		1,090,982
SLM Corp.	46,707		2,113,959
SWS Group Inc.	1,480		28,416
T. Rowe Price Group Inc.	13,620		759,587
W.P. Stewart & Co. Ltd.1	2,260		45,652
Waddell & Reed Financial Inc. Class A1	8,712		183,039
			95,177,657
HOLDING COMPANIES - DIVERSIFIED – 0.11%
Leucadia National Corp.1	4,956		293,147
			293,147
INSURANCE – 20.17%
ACE Ltd.	30,392		1,156,720
AFLAC Inc.	54,331		1,949,396
Allmerica Financial Corp.2	5,737		172,684
Allstate Corp. (The)	74,138		3,565,296
Ambac Financial Group Inc.	11,578		903,779
American Financial Group Inc.1	4,017		118,903
American International Group Inc.	245,064		14,877,835
American National Insurance Co.1	1,691		177,775
AmerUs Group Co.1	4,175		174,432
AON Corp.	27,804		567,480
Axis Capital Holdings Ltd.	12,905		323,399
Berkley (W.R.) Corp.	7,752		331,321
Brown & Brown Inc.1	5,966		249,140
Chubb Corp.	20,417		1,472,678
Cincinnati Financial Corp.1	16,836		702,903
CNA Financial Corp.2	3,543		84,678
Commerce Group Inc.	3,243		164,128
Conseco Inc.1,2	16,220		271,847
Delphi Financial Group Inc. Class A	2,869		117,256
Endurance Specialty Holdings Ltd.	4,661		154,512
Erie Indemnity Co. Class A	3,146		157,678
Everest Re Group Ltd.	5,966		473,521
Fidelity National Financial Inc.	17,155		647,430
First American Corp.	8,404		262,121
Gallagher (Arthur J.) & Co.	9,831		276,251
Hartford Financial Services Group Inc.	31,216		1,825,512
HCC Insurance Holdings Inc.	6,972		207,068

SCHEDULES OF INVESTMENTS 29

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
Hilb, Rogal & Hobbs Co.1	3,319	$	105,212
Horace Mann Educators Corp.	4,498		76,466
IPC Holdings Ltd.1	3,864		156,337
Jefferson-Pilot Corp.	15,158		731,980
Lincoln National Corp.	18,907		828,127
Loews Corp.	13,379		801,402
Markel Corp.1,2	981		311,958
Marsh & McLennan Companies Inc.	52,832		1,461,333
MBIA Inc.	15,365		889,019
Mercury General Corp.	2,870		147,604
MetLife Inc.	44,873		1,720,880
MGIC Investment Corp.	10,546		678,213
Montpelier Re Holdings Ltd.	5,186		193,282
Nationwide Financial Services Inc.	5,971		206,597
Ohio Casualty Corp.1,2	6,715		140,209
Old Republic International Corp.	18,319		427,749
PartnerRe Ltd.	5,756		334,711
Philadelphia Consolidated Holding Corp.2	1,954		113,293
Phoenix Companies Inc.1	9,589		101,164
Platinum Underwriters Holdings Ltd.	2,820		82,485
PMI Group Inc. (The)	10,273		398,798
Presidential Life Corp.1	2,166		34,613
Principal Financial Group Inc.	33,627		1,269,756
Progressive Corp. (The)	20,293		1,898,410
Protective Life Corp.	6,791		266,886
Prudential Financial Inc.	55,540		2,580,944
Radian Group Inc.	9,915		475,226
Reinsurance Group of America Inc.1	3,559		153,322
RenaissanceRe Holdings Ltd.1	7,157		335,091
SAFECO Corp.1	14,846		686,479
Selective Insurance Group Inc.1	3,015		117,826
St. Paul Travelers Companies Inc.	71,635		2,432,725
StanCorp Financial Group Inc.	3,074		231,718
Torchmark Corp.	11,799		637,382
Transatlantic Holdings Inc.1	2,845		165,721
Unitrin Inc.	4,751		205,148
UNUMProvident Corp.1	28,388		387,780
White Mountains Insurance Group Ltd.1	791		403,568
Willis Group Holdings Ltd.	15,764		566,716
XL Capital Ltd. Class A1	14,810		1,073,725
			55,215,598
INTERNET – 0.02%
NetBank Inc.1	5,017		46,558
			46,558
REAL ESTATE – 0.19%
LNR Property Corp.	2,173		135,899
St. Joe Co. (The)	7,530		383,277
			519,176
REAL ESTATE INVESTMENT TRUSTS – 9.06%
Alexandria Real Estate Equities Inc.1	2,035		134,412
AMB Property Corp.	8,778		329,175
American Financial Realty Trust1	11,617		170,770
Annaly Mortgage Management Inc.1	12,803		230,198
Apartment Investment & Management Co. Class A	10,086		370,055
Archstone-Smith Trust	20,981		703,913
Arden Realty Group Inc.	6,931		236,208
AvalonBay Communities Inc.1	7,742		506,869
Boston Properties Inc.1	11,642		695,260
Brandywine Realty Trust	5,761		169,489
BRE Properties Inc. Class A	5,385		214,862
Camden Property Trust	4,291		194,811
Capital Automotive REIT1	3,943		127,201
CarrAmerica Realty Corp.	5,800		186,934
Catellus Development Corp.	9,303		268,299
CBL & Associates Properties Inc.1	3,173		207,990
CenterPoint Properties Trust	5,234		242,334
Colonial Properties Trust1	2,931		114,250
Cousins Properties Inc.1	4,139		154,054
Crescent Real Estate Equities Co.	10,689		171,131
CRT Properties Inc.	2,774		61,472
Developers Diversified Realty Corp.	11,014		460,385
Duke Realty Corp.	15,251		520,059
Equity Inns Inc.	5,652		53,694
Equity Office Properties Trust	43,156		1,213,547
Equity Residential	30,012		1,000,900
Essex Property Trust Inc.	2,244		176,064
Federal Realty Investment Trust	5,566		264,107
FelCor Lodging Trust Inc.2	4,813		55,927
First Industrial Realty Trust Inc.1	4,345		167,717
Gables Residential Trust1	3,205		116,983
General Growth Properties Inc.	23,496		775,133

30 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
General Growth Properties Inc. Warrants (Expiring 11/9/04)3	2,350	$	—
Glenborough Realty Trust Inc.1	3,505		73,605
Health Care Property Investors Inc.	14,156		393,961
Health Care REIT Inc.	5,451		196,236
Healthcare Realty Trust Inc.1	5,058		204,090
Highwoods Properties Inc.1	5,749		142,633
Home Properties Inc.	3,583		147,440
Hospitality Properties Trust1	6,622		283,753
Host Marriott Corp.2	34,381		500,244
HRPT Properties Trust	18,951		212,062
Impac Mortgage Holdings Inc.	6,772		153,115
iStar Financial Inc.	11,977		496,087
Kilroy Realty Corp.1	3,040		120,840
Kimco Realty Corp.	10,072		549,428
Liberty Property Trust	9,085		368,397
Macerich Co. (The)	6,354		379,652
Mack-Cali Realty Corp.	6,421		283,616
Manufactured Home Communities Inc.1	2,214		76,361
Meristar Hospitality Corp.2	9,861		57,588
Mills Corp.1	5,758		319,281
Nationwide Health Properties Inc.	6,987		157,697
New Century Financial Corp.1	5,083		280,327
New Plan Excel Realty Trust Inc.1	11,060		289,330
Novastar Financial Inc.1	2,597		112,398
Pan Pacific Retail Properties Inc.	4,361		247,051
Pennsylvania Real Estate Investment Trust	3,655		148,210
Plum Creek Timber Co. Inc.	19,517		708,272
Post Properties Inc.	4,167		133,719
Prentiss Properties Trust	4,251		152,951
ProLogis	19,492		759,798
Public Storage Inc.	9,356		488,850
Rayonier Inc.	5,256		249,134
Realty Income Corp.1	4,181		200,646
Reckson Associates Realty Corp.	7,515		228,080
Redwood Trust Inc.	2,292		137,887
Regency Centers Corp.	6,535		319,300
Rouse Co. (The)	11,037		736,168
Shurgard Storage Centers Inc. Class A	4,852		192,624
Simon Property Group Inc.	23,699		1,382,126
SL Green Realty Corp.	4,136		226,736
Taubman Centers Inc.	5,104		146,485
Thornburg Mortgage Inc.1	8,985		256,701
Trizec Properties Inc.1	9,588		152,929
United Dominion Realty Trust Inc.1	13,692		288,627
Ventas Inc.	8,911		239,706
Vornado Realty Trust	12,622		848,198
Washington Real Estate Investment Trust1	4,536		142,657
Weingarten Realty Investors	8,506		307,577
			24,786,776
SAVINGS & LOANS – 3.49%
Anchor BanCorp Wisconsin Inc.1	2,260		58,624
Astoria Financial Corp.	7,373		288,211
Commercial Federal Corp.1	4,298		119,527
Dime Community Bancshares	3,699		59,406
Downey Financial Corp.	2,216		122,456
First Niagara Financial Group Inc.1	8,523		118,811
FirstFed Financial Corp.1,2	1,609		82,703
Golden West Financial Corp.	16,370		1,913,980
Harbor Florida Bancshares Inc.1	2,254		72,218
Hudson City Bancorp Inc.1	7,339		268,167
Independence Community Bank Corp.	8,480		319,102
MAF Bancorp Inc.1	3,508		150,388
New York Community Bancorp Inc.1	25,598		469,979
OceanFirst Financial Corp.1	1,032		24,603
People’s Bank1	10,064		377,299
PFF Bancorp Inc.	1,672		65,960
Provident Financial Services Inc.1	8,323		149,821
Sovereign Bancorp Inc.	36,641		793,278
Washington Federal Inc.	8,384		213,960
Washington Mutual Inc.	93,345		3,613,385
Webster Financial Corp.	5,635		269,353
			9,551,231
SOFTWARE – 0.14%
Safeguard Scientifics Inc.2	13,125		21,919
SEI Investments Co.1	7,359		264,850
Total System Services Inc.	4,025		94,990
			381,759
TOTAL COMMON STOCKS (Cost: $247,938,751)			273,212,121

SCHEDULES OF INVESTMENTS 31

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Principal		Value
SHORT-TERM INVESTMENTS – 7.34%
COMMERCIAL PAPER – 1.25%
Amsterdam Funding Corp.
1.79%, 11/08/044	$	99,558	$	99,524
Aspen Funding Corp.
1.85%, 11/01/044		380,976		380,976
Barton Capital Corp.
1.78%, 11/04/044		114,695		114,678
1.79%, 11/08/044		104,186		104,149
CRC Funding LLC
1.78%, 11/09/044		66,372		66,346
Delaware Funding Corp.
1.78%, 11/10/044		73,009		72,977
Edison Asset Securitization
1.45%, 11/09/044		132,744		132,701
1.59%, 12/02/044		132,744		132,562
Eureka Securitization Inc.
1.79%, 11/01/044		56,396		56,396
Ford Credit Auto Receivables
1.85%, 01/14/054		66,372		66,120
Grampian Funding LLC
1.59%, 11/30/044		66,372		66,287
Liberty Street Funding Corp.
1.80%, 11/12/044		33,186		33,168
Nationwide Building Society
1.63%, 12/09/044		110,178		109,988
Polonius Inc.
1.79%, 11/12/044		66,372		66,336
Prudential Funding LLC
1.60%, 12/01/044		66,372		66,284
1.85%, 11/01/044		331,861		331,861
Ranger Funding Co. LLC
1.79%, 11/01/044		76,100		76,100
Scaldis Capital LLC
1.78%, 11/08/044		298,675		298,571
Thames Asset Global Securitization No. 1 Inc.
1.81%, 11/12/044		77,649		77,606
UBS Finance (Delaware)
1.11%, 12/17/044		199,116		198,834
1.85%, 11/01/044		663,721		663,721
Windmill Funding Corp.
1.79%, 11/02/044		19,912		19,911
1.79%, 11/03/044		79,647		79,639
1.79%, 11/08/044		96,638		96,604
				3,411,339
FLOATING RATE NOTES – 2.22%
American Express Credit Corp.
1.95%, 10/26/054		132,744		132,815
Bank of Nova Scotia
1.85%, 09/26/054		33,186		33,173
Beta Finance Inc.
1.78%, 05/04/054,5		79,647		79,639
1.89%, 09/23/054,5		119,470		119,427
1.89%, 09/27/054,5		106,195		106,157
1.91%, 03/15/054,5		66,372		66,392
2.04%, 10/27/054,5		126,107		126,244
Canadian Imperial Bank of Commerce
1.79%, 09/13/054		199,116		199,060
1.90%, 10/31/054		132,744		132,710
CC USA Inc.
1.78%, 05/04/054,5		132,744		132,731
2.06%, 07/29/054,5		132,744		132,715
Den Danske Bank NY
1.79%, 08/12/054		132,744		132,713
1.87%, 08/26/054		132,744		132,712
2.00%, 10/17/054		132,744		132,706
Depfa Bank PLC
1.86%, 09/15/054		132,744		132,744
Dorada Finance Inc.
2.06%, 07/29/054,5		110,178		110,153
Five Finance Inc.
1.91%, 04/29/054,5		106,195		106,190
HBOS Treasury Services PLC
1.96%, 04/22/054		132,744		132,744
K2 USA LLC
1.81%, 09/12/054,5		132,744		132,721
1.82%, 06/10/054,5		132,744		132,734
1.89%, 10/20/054,5		132,744		132,749
2.05%, 07/25/054,5		66,372		66,362
Links Finance LLC
1.82%, 04/15/054,5		132,744		132,732

32 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Principal		Value
2.12%, 04/25/054	$	132,744	$	132,786
National City Bank (Ohio)
1.79%, 08/09/054		132,744		132,714
1.85%, 06/10/054		66,372		66,385
1.86%, 06/23/054		132,744		132,719
Nationwide Building Society
1.96%, 10/28/054,5		225,665		225,694
Norddeutsche Landesbank
2.04%, 07/27/054		132,744		132,710
Northern Rock PLC
1.90%, 10/25/054,5		265,488		265,488
2.02%, 01/13/054,5		126,107		126,107
Permanent Financing PLC
1.81%, 03/10/054		132,744		132,744
1.82%, 12/10/044		66,372		66,372
1.84%, 06/10/054		59,735		59,735
Sigma Finance Inc.
1.84%, 11/15/044		132,744		132,744
1.86%, 08/17/054		66,372		66,377
1.86%, 09/15/054		165,930		165,944
Tango Finance Corp.
1.66%, 05/17/054,5		110,178		110,175
1.70%, 02/25/054,5		74,337		74,332
1.80%, 04/07/054,5		48,717		48,715
1.83%, 01/18/054,5		58,407		58,406
1.84%, 09/15/054,5		116,815		116,799
1.90%, 07/25/054,5		132,744		132,735
WhistleJacket Capital LLC
1.83%, 07/15/054,5		99,558		99,544
1.83%, 09/15/054		99,558		99,541
1.83%, 10/14/054,5		66,372		66,366
1.84%, 06/15/054,5		66,372		66,363
White Pine Finance LLC
1.68%, 05/20/054		59,735		59,732
1.80%, 07/05/054		66,372		66,362
1.82%, 04/15/054,5		99,558		99,549
1.83%, 11/15/044,5		79,647		79,647
1.84%, 06/15/054,5		54,425		54,425
1.89%, 03/29/054		57,080		57,075
1.90%, 08/26/054,5		66,372		66,361
2.02%, 07/11/054		33,186		33,183
Security	Shares or Principal		Value
Winston Funding Ltd.
2.16%, 01/23/054,5	$	94,779	$	94,779
				6,060,931
MEDIUM-TERM NOTES – 0.15%
CC USA Inc.
1.29%, 04/15/054,5		132,744		132,738
1.51%, 02/15/054,5		86,284		86,323
Dorada Finance Inc.
1.48%, 01/18/054,5		99,558		99,557
K2 USA LLC
1.46%, 01/12/054,5		66,372		66,371
WhistleJacket Capital LLC
1.32%, 02/04/054,5		33,186		33,184
				418,173
MONEY MARKET FUNDS – 1.53%
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares4,6		530,977		530,977
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares4,6		2,123,325		2,123,325
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares4,6		1,460,186		1,460,186
BlackRock Temp Cash Money Market Fund4		29,752		29,752
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares4		54,175		54,175
				4,198,415
REPURCHASE AGREEMENTS – 1.16%
Banc of America Securities LLC
1.86%, 11/01/044,7		530,977		530,977
Bank of America N.A.
1.86%, 11/01/044,7		1,327,442		1,327,442
Goldman Sachs & Co.
1.86%, 11/01/044,7		1,327,442		1,327,442
				3,185,861

SCHEDULES OF INVESTMENTS 33

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Principal		Value
TIME DEPOSITS – 0.85%
Abbey National Treasury Services PLC
1.25%, 01/06/054	$	132,742	$	132,742
1.33%, 02/10/054		66,372		66,369
1.39%, 02/02/054		66,372		66,370
1.39%, 04/08/054		92,921		92,915
Bank of New York
1.39%, 11/01/044		132,744		132,744
1.60%, 12/03/044		33,186		33,185
Canadian Imperial Bank of Commerce
1.38%, 11/22/044		33,186		33,187
HBOS Treasury Services PLC
1.24%, 04/01/054		84,956		84,953
Key Bank N.A.
1.81%, 11/01/044		172,567		172,567
National City Bank (Ohio)
1.25%, 01/06/054		132,744		132,746
Nordea Bank PLC
2.11%, 06/07/054		132,744		132,728
Rabobank Nederland NV NY
1.85%, 11/01/044		265,488		265,488
Toronto-Dominion Bank
1.22%, 03/23/054		232,302		232,287
1.34%, 02/10/054		53,098		53,095
1.41%, 11/01/044		99,558		99,558
1.77%, 05/10/054		66,372		66,369
1.90%, 05/11/054		66,372		66,369
World Savings Bank FSB
1.76%, 11/12/044		471,242		471,239
				2,334,911
U.S. GOVERNMENT AGENCY NOTES – 0.18%
Federal Home Loan Mortgage Corp.
1.63%, 04/15/054		92,921		93,056
1.80%, 01/18/054		61,726		61,485
1.80%, 01/19/054		66,372		66,110
2.06%, 05/31/054		66,177		65,378
Federal National Mortgage Association
2.33%, 07/22/054		199,116		195,734
				481,763
TOTAL SHORT-TERM INVESTMENTS (Cost: $20,091,393)				20,091,393
TOTAL INVESTMENTS IN SECURITIES – 107.17% (Cost: $268,030,144)				293,303,514
Other Assets, Less Liabilities – (7.17%)				(19,621,977	)
NET ASSETS – 100.00%			$	273,681,537

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

² Non-income earning security.

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

⁴ All or a portion of this security represents an investment of securities lending collateral. See Note 5.

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 The Fund’s investment adviser is an affiliate of the issuer. See Note 2.

⁷ Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.57% to 8.00% and maturity dates ranging from 6/1/14 to 10/1/34.

INDUSTRY DIVERSIFICATION

Industry	Value		% of Net Assets
Diversified Financial Services	$	95,177,657	34.77	%
Banks		86,666,293	31.67
Insurance		55,215,598	20.17
Real Estate Investment Trusts		24,786,776	9.06
Savings & Loans		9,551,231	3.49
Real Estate		519,176	0.19
Commercial Services		384,535	0.14
Software		381,759	0.14
Holding Companies - Diversified		293,147	0.11
Computers		189,391	0.07
Internet		46,558	0.02
Short-Term and Other Net Assets		469,416	0.17
TOTAL	$	273,681,537	100.00	%

See notes to financial statements.

34 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

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

October 31, 2004

Security	Shares	Value
COMMON STOCKS – 99.97%
ADVERTISING – 0.18%
Getty Images Inc.1,2	7,128	$	421,479
			421,479
AEROSPACE & DEFENSE – 11.74%
AAR Corp.1,2	5,263		61,840
Alliant Techsystems Inc.1	6,455		371,098
Boeing Co. (The)	120,585		6,017,191
Curtiss-Wright Corp. Class B	105		5,486
Engineered Support Systems Inc.	2,872		137,971
Esterline Technologies Corp.1,2	3,450		109,020
General Dynamics Corp.	28,170		2,876,720
Goodrich (B.F.) Co.	15,529		478,759
L-3 Communications Holdings Inc.	14,974		987,236
Lockheed Martin Corp.	58,658		3,231,469
Northrop Grumman Corp.	54,089		2,799,106
Raytheon Co.	66,904		2,440,658
Rockwell Collins Inc.	17,490		620,370
Titan Corp. (The)1	14,212		210,906
United Technologies Corp.	81,300		7,546,266
			27,894,096
AUTO MANUFACTURERS – 1.07%
Navistar International Corp.1	10,016		346,053
Oshkosh Truck Corp.2	4,190		246,791
PACCAR Inc.	27,038		1,874,004
Wabash National Corp.1	3,302		81,163
			2,548,011
BIOTECHNOLOGY – 0.16%
Millipore Corp.1	8,177		376,060
			376,060
BUILDING MATERIALS – 2.41%
American Standard Companies Inc.1	30,089		1,100,355
Eagle Materials Inc. Class B	472		31,539
ElkCorp	2,379		66,969
Florida Rock Industries Inc.	2,616		135,116
Lafarge North America Inc.	4,813		235,837
Martin Marietta Materials Inc.	8,197		373,209
Masco Corp.	75,349		2,581,457
Texas Industries Inc.2	3,372		171,736
USG Corp.1,2	2,342		52,437
Vulcan Materials Co.	15,215		757,403
York International Corp.2	6,650		211,736
			5,717,794
CHEMICALS – 0.53%
Ashland Inc.	5,640		324,977
Sherwin-Williams Co. (The)2	21,858		933,774
			1,258,751
COMMERCIAL SERVICES – 4.95%
Accenture Ltd.1	61,745		1,494,846
Arbitron Inc.1,2	4,817		174,231
Banta Corp.	4,014		163,290
Bowne & Co. Inc.	5,193		64,549
ChoicePoint Inc.1	14,092		586,650
Convergys Corp.1	27,589		358,933
Corporate Executive Board Co. (The)2	6,291		400,422
Corrections Corp. of America1	4,421		153,630
Deluxe Corp.	10,721		408,363
Donnelley (R.R.) & Sons Co.	26,250		825,562
Equifax Inc.2	24,378		637,485
Forrester Research Inc.1	2,540		39,179
FTI Consulting Inc.1,2	1,729		32,436
Hewitt Associates Inc. Class A1	1,818		50,959
Hudson Highland Group Inc.1,2	1,578		45,076
Iron Mountain Inc.1,2	20,908		691,009
Manpower Inc.	12,779		578,250
Moody’s Corp.	22,011		1,712,676
MPS Group Inc.1,2	16,483		173,566
Navigant Consulting Inc.1	6,271		155,960
NCO Group Inc.1,2	3,932		105,181
Paychex Inc.	55,365		1,815,640
PRG-Schultz International Inc.1	6,822		35,338
Quanta Services Inc.1	8,815		59,237
Robert Half International Inc.2	29,303		777,409
Spherion Corp.1	9,432		67,816
TeleTech Holdings Inc.1,2	6,656		66,560
Viad Corp.2	3,714		79,962
			11,754,215
COMPUTERS – 0.56%
Agilysys Inc.2	5,271		90,081
Ceridian Corp.1	24,564		423,729
Diebold Inc.	12,092		578,602

SCHEDULES OF INVESTMENTS 35

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
National Instruments Corp.	8,309	$	228,747
			1,321,159
DISTRIBUTION & WHOLESALE – 1.09%
CDW Corp.2	8,952		555,293
Grainger (W.W.) Inc.	12,660		741,749
Hughes Supply Inc.	7,309		207,649
Ingram Micro Inc. Class A1	17,007		293,371
SCP Pool Corp.2	6,694		195,398
Tech Data Corp.1,2	8,944		361,248
United Stationers Inc.1,2	5,557		247,286
			2,601,994
ELECTRIC – 0.06%
ALLETE Inc.	4,190		142,376
			142,376
ELECTRICAL COMPONENTS & EQUIPMENT – 2.79%
American Power Conversion Corp.2	29,738		573,349
AMETEK Inc.	10,920		359,486
Artesyn Technologies Inc.1,2	7,428		72,052
C&D Technologies Inc.	4,381		78,420
Emerson Electric Co.	66,612		4,266,499
GrafTech International Ltd.1	11,320		104,823
Hubbell Inc. Class B2	8,274		378,287
Littelfuse Inc.1	3,719		121,314
Molex Inc.	9,218		272,576
Molex Inc. Class A	12,342		317,436
Power-One Inc.1	10,649		74,756
			6,618,998
ELECTRONICS – 5.60%
Agilent Technologies Inc.1	70,794		1,774,098
Amphenol Corp. Class A1	8,214		281,987
Arrow Electronics Inc.1	16,733		400,923
Avnet Inc.1	20,029		339,692
AVX Corp.2	9,087		109,044
Benchmark Electronics Inc.1	6,015		204,330
Checkpoint Systems Inc.1,2	5,266		90,049
Coherent Inc.1,2	4,654		112,301
CTS Corp.2	5,550		73,315
Dionex Corp.1,2	3,547		198,632
Electro Scientific Industries Inc.1	4,563		77,388
Flextronics International Ltd.1	78,001		939,912
FLIR Systems Inc.1,2	4,361		232,049
Garmin Ltd.2	7,685		384,250
Jabil Circuit Inc.1	27,102		658,850
KEMET Corp.1,2	14,828		115,065
Methode Electronics Inc.2	4,629		62,167
Mettler Toledo International Inc.1,2	1,006		48,187
Orbotech Ltd.1	5,200		87,932
Park Electrochemical Corp.2	2,830		59,458
Parker Hannifin Corp.	19,637		1,386,961
PerkinElmer Inc.	21,488		441,364
Photon Dynamics Inc.1,2	2,833		51,844
Plexus Corp.1,2	7,197		89,171
Sanmina-SCI Corp.1	88,009		704,072
Solectron Corp.1	138,975		725,449
Symbol Technologies Inc.	37,644		552,990
Technitrol Inc.1	6,285		102,571
Tektronix Inc.	15,462		468,962
Thermo Electron Corp.1	28,929		838,941
Thomas & Betts Corp.	9,828		278,526
Varian Inc.1	5,471		199,582
Vishay Intertechnology Inc.1,2	24,285		314,005
Waters Corp.1	21,929		905,448
			13,309,515
ENERGY - ALTERNATE SOURCES – 0.05%
FuelCell Energy Inc.1,2	10,430		128,654
			128,654
ENGINEERING & CONSTRUCTION – 0.68%
Dycom Industries Inc.1	8,181		267,110
EMCOR Group Inc.1,2	2,446		96,788
Fluor Corp.2	13,390		621,832
Granite Construction Inc.2	5,648		137,133
Insituform Technologies Inc. Class A1,2	4,266		84,552
Jacobs Engineering Group Inc.1	8,036		327,306
Shaw Group Inc. (The)1,2	6,545		79,784
			1,614,505
ENVIRONMENTAL CONTROL – 1.86%
Allied Waste Industries Inc.1	34,172		278,844
Ionics Inc.1,2	2,560		72,960
Republic Services Inc.	27,763		855,100
Stericycle Inc.1,2	6,026		273,159
Tetra Tech Inc.1,2	8,922		117,235

36 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
Waste Connections Inc.1,2	6,193	$	195,203
Waste Management Inc.	92,134		2,623,976
			4,416,477
FOREST PRODUCTS & PAPER – 0.21%
Temple-Inland Inc.	8,387		495,839
			495,839
HAND & MACHINE TOOLS – 0.14%
Kennametal Inc.2	5,122		238,327
Regal-Beloit Corp.2	4,093		95,776
			334,103
HEALTH CARE - PRODUCTS – 0.01%
Bioveris Corp.1,2	2,433		15,681
			15,681
HOME BUILDERS – 0.03%
Monaco Coach Corp.2	4,362		77,426
			77,426
HOUSEWARES – 0.08%
Toro Co.2	2,710		184,958
			184,958
INTERNET – 0.32%
CheckFree Corp.1,2	11,203		347,293
Monster Worldwide Inc.1,2	15,114		423,948
			771,241
LEISURE TIME – 0.22%
Sabre Holdings Corp.	24,310		522,908
			522,908
MACHINERY – 4.56%
AGCO Corp.1	12,688		246,401
Albany International Corp. Class A2	4,287		128,696
Astec Industries Inc.1	1,182		17,127
Briggs & Stratton Corp.	3,540		254,207
Caterpillar Inc.	55,134		4,440,492
Cognex Corp.2	6,542		167,475
Cummins Inc.2	5,630		394,550
Deere & Co.	39,901		2,385,282
Flowserve Corp.1	9,293		200,543
Graco Inc.	11,481		394,946
Joy Global Inc.	5,210		176,046
Manitowoc Co. Inc. (The)2	4,030		142,259
Nordson Corp.2	4,380		153,388
Presstek Inc.1	3,253		32,888
Rockwell Automation Inc.	29,674		1,237,109
Stewart & Stevenson Services Inc.	4,446		75,582
Terex Corp.1,2	7,586		288,268
Unova Inc.1,2	5,523		84,778
			10,820,037
MANUFACTURING – 41.14%
Actuant Corp. Class A1,2	1,601		63,512
Acuity Brands Inc.2	7,178		190,432
AptarGroup Inc.	5,833		273,684
Brink’s Co. (The)	9,188		294,935
Carlisle Companies Inc.	4,673		271,641
Cooper Industries Ltd.2	15,634		999,013
Crane Co.	8,877		247,402
Danaher Corp.	37,523		2,068,643
Donaldson Co. Inc.2	13,462		399,821
Dover Corp.	34,261		1,345,429
Eaton Corp.	23,410		1,497,070
General Electric Co.	1,632,114		55,687,730
Harsco Corp.	6,746		326,844
Honeywell International Inc.	125,642		4,231,623
Illinois Tool Works Inc.	43,253		3,991,387
Ingersoll-Rand Co. Class A	28,188		1,929,187
ITT Industries Inc.	15,182		1,231,867
Jacuzzi Brands Inc.1,2	12,744		110,236
Pall Corp.	20,735		536,207
Pentair Inc.	16,406		613,256
Roper Industries Inc.2	5,197		320,447
SPX Corp.2	13,540		519,259
Teleflex Inc.2	5,813		254,551
Textron Inc.	21,575		1,470,336
3M Co.	112,900		8,757,653
Trinity Industries Inc.2	7,454		232,267
Tyco International Ltd.	315,622		9,831,625
			97,696,057
METAL FABRICATE & HARDWARE – 0.42%
Kaydon Corp.2	4,924		145,750
Mueller Industries Inc.	5,552		148,016
Precision Castparts Corp.2	8,315		498,900
Timken Co. (The)	8,957		214,968
			1,007,634

SCHEDULES OF INVESTMENTS 37

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
MINING – 0.18%
Owens-Illinois Inc.1	22,554	$	417,926
			417,926
PACKAGING & CONTAINERS – 1.73%
Ball Corp.	19,138		762,649
Bemis Co. Inc.	17,834		472,066
Crown Holdings Inc.1	21,485		243,855
Packaging Corp. of America2	17,664		387,372
Pactiv Corp.1	26,565		629,325
Sealed Air Corp.1	14,020		694,551
Smurfit-Stone Container Corp.2	28,866		501,114
Sonoco Products Co.2	16,005		426,533
			4,117,465
RETAIL – 0.25%
Copart Inc.1	12,275		228,070
Insight Enterprises Inc.1,2	7,575		140,554
MSC Industrial Direct Co. Inc. Class A	6,395		218,325
			586,949
SEMICONDUCTORS – 0.15%
Helix Technology Corp.2	4,364		61,271
Integrated Circuit Systems Inc.1	9,514		214,541
Veeco Instruments Inc.1,2	4,094		79,997
			355,809
SOFTWARE – 5.82%
Acxiom Corp.	14,638		365,950
Automatic Data Processing Inc.	95,321		4,135,978
Certegy Inc.	10,816		382,346
CSG Systems International Inc.1	8,566		143,994
Dun & Bradstreet Corp.1	11,461		648,234
eFunds Corp.1	8,086		159,213
Fair Isaac Corp.	7,969		240,664
First Data Corp.	137,278		5,666,836
Fiserv Inc.1	32,033		1,138,453
Global Payments Inc.2	4,397		240,780
IMS Health Inc.	29,053		615,343
NDCHealth Corp.2	5,744		96,442
			13,834,233
TELECOMMUNICATIONS – 0.11%
Aeroflex Inc.1	10,224		113,486
Anaren Inc.1,2	2,899		35,498
Audiovox Corp. Class A1	2,831		40,766
Newport Corp.1,2	6,457		72,900
			262,650
TEXTILES – 0.43%
Cintas Corp.	20,843		899,167
G&K Services Inc. Class A2	3,178		124,864
			1,024,031
TRANSPORTATION – 10.37%
Alexander & Baldwin Inc.	6,450		236,425
Arkansas Best Corp.2	2,354		92,018
Burlington Northern Santa Fe Corp.	60,342		2,522,899
CH Robinson Worldwide Inc.2	13,121		707,747
CNF Inc.	8,201		359,040
CSX Corp.	35,349		1,290,239
EGL Inc.1,2	6,286		201,026
Expeditors International Washington Inc.2	17,393		993,140
FedEx Corp.	46,297		4,218,583
Hunt (J.B.) Transport Services Inc.	7,520		307,267
Kansas City Southern Industries Inc.1,2	9,593		162,601
Landstar System Inc.1,2	5,276		358,451
Norfolk Southern Corp.	63,935		2,170,593
Overseas Shipholding Group Inc.	4,099		233,438
Ryder System Inc.	9,773		489,627
SCS Transportation Inc.1	5,436		98,229
Swift Transportation Co. Inc.1	10,088		190,663
Union Pacific Corp.	40,217		2,532,464
United Parcel Service Inc. Class B	85,541		6,773,136
USF Corp.2	4,454		159,631
Werner Enterprises Inc.	9,705		205,746
Yellow Roadway Corp.1	6,846		328,540
			24,631,503
TRUCKING & LEASING – 0.07%
GATX Corp.2	5,837		159,233
			159,233
TOTAL COMMON STOCKS (Cost: $228,757,918)			237,439,767

38 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Principal		Value
CORPORATE BONDS & NOTES – 0.02%
METAL FABRICATE & HARDWARE – 0.02%
Mueller Industries Inc.
6.00%, 11/01/143	$	47,192	$	46,248
				46,248
TOTAL CORPORATE BONDS & NOTES (Cost: $47,192)				46,248
SHORT-TERM INVESTMENTS – 6.24%
COMMERCIAL PAPER – 1.06%
Amsterdam Funding Corp.
1.79%, 11/08/044		73,560		73,534
Aspen Funding Corp.
1.85%, 11/01/044		281,489		281,489
Barton Capital Corp.
1.78%, 11/04/044		84,744		84,731
1.79%, 11/08/044		76,979		76,952
CRC Funding LLC
1.78%, 11/09/044		49,040		49,020
Delaware Funding Corp.
1.78%, 11/10/044		53,944		53,920
Edison Asset Securitization
1.45%, 11/09/044		98,080		98,048
1.59%, 12/02/044		98,080		97,945
Eureka Securitization Inc.
1.79%, 11/01/044		41,669		41,669
Ford Credit Auto Receivables
1.85%, 01/14/054		49,040		48,853
Grampian Funding LLC
1.59%, 11/30/044		49,040		48,977
Liberty Street Funding Corp.
1.80%, 11/12/044		24,520		24,506
Nationwide Building Society
1.63%, 12/09/044		81,406		81,266
Polonius Inc.
1.79%, 11/12/044		49,040		49,013
Prudential Funding LLC
1.60%, 12/01/044		49,040		48,974
1.85%, 11/01/044		245,199		245,199
Ranger Funding Co. LLC
1.79%, 11/01/044		56,227		56,227
Scaldis Capital LLC
1.78%, 11/08/044		220,679		220,603
Thames Asset Global Securitization No. 1 Inc.
1.81%, 11/12/044		57,372		57,340
UBS Finance (Delaware)
1.11%, 12/17/044		147,120		146,911
1.85%, 11/01/044		490,399		490,399
Windmill Funding Corp.
1.79%, 11/02/044		14,712		14,711
1.79%, 11/03/044		58,848		58,842
1.79%, 11/08/044		71,402		71,377
				2,520,506
FLOATING RATE NOTES – 1.89%
American Express Credit Corp.
1.95%, 10/26/054		98,080		98,132
Bank of Nova Scotia
1.85%, 09/26/054		24,520		24,510
Beta Finance Inc.
1.78%, 05/04/054,5		58,848		58,842
1.89%, 09/23/054,5		88,272		88,240
1.89%, 09/27/054,5		78,464		78,435
1.91%, 03/15/054,5		49,040		49,054
2.04%, 10/27/054,5		93,176		93,277
Canadian Imperial Bank of Commerce
1.79%, 09/13/054		147,120		147,078
1.90%, 10/31/054		98,080		98,054
CC USA Inc.
1.78%, 05/04/054,5		98,080		98,070
2.06%, 07/29/054,5		98,080		98,058
Den Danske Bank NY
1.79%, 08/12/054		98,080		98,057
1.87%, 08/26/054		98,080		98,056
2.00%, 10/17/054		98,080		98,052
Depfa Bank PLC
1.86%, 09/15/054		98,080		98,080
Dorada Finance Inc.
2.06%, 07/29/054,5		81,406		81,388

SCHEDULES OF INVESTMENTS 39

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Principal		Value
Five Finance Inc.
1.91%, 04/29/054,5	$	78,464	$	78,460
HBOS Treasury Services PLC
1.96%, 04/22/054		98,080		98,080
K2 USA LLC
1.81%, 09/12/054,5		98,080		98,063
1.82%, 06/10/054,5		98,080		98,072
1.89%, 10/20/054,5		98,080		98,083
2.05%, 07/25/054,5		49,040		49,033
Links Finance LLC
1.82%, 04/15/054,5		98,080		98,071
2.12%, 04/25/054		98,080		98,110
National City Bank (Ohio)
1.79%, 08/09/054		98,080		98,057
1.85%, 06/10/054		49,040		49,049
1.86%, 06/23/054		98,080		98,061
Nationwide Building Society
1.96%, 10/28/054,5		166,735		166,757
Norddeutsche Landesbank
2.04%, 07/27/054		98,080		98,054
Northern Rock PLC
1.90%, 10/25/054,5		196,159		196,160
2.02%, 01/13/054,5		93,176		93,176
Permanent Financing PLC
1.81%, 03/10/054		98,080		98,080
1.82%, 12/10/044		49,040		49,040
1.84%, 06/10/054		44,136		44,136
Sigma Finance Inc.
1.84%, 11/15/044		98,080		98,079
1.86%, 08/17/054		49,040		49,043
1.86%, 09/15/054		122,600		122,609
Tango Finance Corp.
1.66%, 05/17/054,5		81,406		81,404
1.70%, 02/25/054,5		54,925		54,921
1.80%, 04/07/054,5		35,995		35,994
1.83%, 01/18/054,5		43,155		43,154
1.84%, 09/15/054,5		86,310		86,298
1.90%, 07/25/054,5		98,080		98,073
WhistleJacket Capital LLC
1.83%, 07/15/054,5		73,560		73,549
1.83%, 09/15/054		73,560		73,547
Security	Shares or Principal		Value
1.83%, 10/14/054,5	$	49,040	$	49,035
1.84%, 06/15/054,5		49,040		49,033
White Pine Finance LLC
1.68%, 05/20/054		44,136		44,133
1.80%, 07/05/054		49,040		49,033
1.82%, 04/15/054,5		73,560		73,553
1.83%, 11/15/044,5		58,848		58,848
1.84%, 06/15/054,5		40,213		40,213
1.89%, 03/29/054		42,174		42,170
1.90%, 08/26/054,5		49,040		49,032
2.02%, 07/11/054		24,520		24,518
Winston Funding Ltd.
2.16%, 01/23/054,5		70,029		70,029
				4,478,193
MEDIUM-TERM NOTES – 0.13%
CC USA Inc.
1.29%, 04/15/054,5		98,080		98,075
1.51%, 02/15/054,5		63,752		63,781
Dorada Finance Inc.
1.48%, 01/18/054,5		73,560		73,559
K2 USA LLC
1.46%, 01/12/054,5		49,040		49,039
WhistleJacket Capital LLC
1.32%, 02/04/054,5		24,520		24,519
				308,973
MONEY MARKET FUNDS – 1.29%
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares4,6		392,319		392,319
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares4,6		1,536,825		1,536,825
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares4,6		1,078,877		1,078,877
BlackRock Temp Cash Money Market Fund4		21,982		21,982
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares4		40,028		40,028
				3,070,031

40 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Principal		Value
REPURCHASE AGREEMENTS – 0.99%
Banc of America Securities LLC
1.86%, 11/01/044,7	$	392,319	$	392,319
Bank of America N.A.
1.86%, 11/01/044,7		980,797		980,797
Goldman Sachs & Co.
1.86%, 11/01/044,7		980,797		980,797
				2,353,913
TIME DEPOSITS – 0.73%
Abbey National Treasury Services PLC
1.25%, 01/06/054		98,080		98,080
1.33%, 02/10/054		49,040		49,038
1.39%, 02/02/054		49,040		49,038
1.39%, 04/08/054		68,656		68,651
Bank of New York
1.39%, 11/01/044		98,080		98,080
1.60%, 12/03/044		24,520		24,519
Canadian Imperial Bank of Commerce
1.38%, 11/22/044		24,520		24,520
HBOS Treasury Services PLC
1.24%, 04/01/054		62,771		62,768
Key Bank N.A.
1.81%, 11/01/044		127,504		127,504
National City Bank (Ohio)
1.25%, 01/06/054		98,080		98,081
Nordea Bank PLC
2.11%, 06/07/054		98,080		98,068
Rabobank Nederland NV NY
1.85%, 11/01/044		196,159		196,160
Toronto-Dominion Bank
1.22%, 03/23/054		171,639		171,628
1.34%, 02/10/054		39,232		39,230
1.41%, 11/01/044		73,560		73,560
1.77%, 05/10/054		49,040		49,038
1.90%, 05/11/054		49,040		49,037
World Savings Bank FSB
1.76%, 11/12/044		348,183		348,180
				1,725,180
U.S. GOVERNMENT AGENCY NOTES – 0.15%
Federal Home Loan Mortgage Corp.
1.63%, 04/15/054		68,656		68,755
1.80%, 01/18/054		45,607		45,429
1.80%, 01/19/054		49,040		48,846
2.06%, 05/31/054		48,896		48,305
Federal National Mortgage Association
2.33%, 07/22/054		147,120		144,621
				355,956
TOTAL SHORT-TERM INVESTMENTS (Cost: $14,812,752)				14,812,752
TOTAL INVESTMENTS IN SECURITIES – 106.23% (Cost: $243,617,862)				252,298,767
Other Assets, Less Liabilities – (6.23%)				(14,801,869	)
NET ASSETS – 100.00%			$	237,496,898

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

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 The Fund’s investment adviser is an affiliate of the issuer. See Note 2.

⁷ Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.57% to 8.00% and maturity dates ranging from 6/1/14 to 10/1/34.

SCHEDULES OF INVESTMENTS 41

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

INDUSTRY DIVERSIFICATION

Industry	Value		% of Net Assets
Manufacturing	$	97,696,057	41.14	%
Aerospace & Defense		27,894,096	11.74
Transportation		24,631,503	10.37
Software		13,834,233	5.82
Electronics		13,309,515	5.60
Commercial Services		11,754,215	4.95
Machinery		10,820,037	4.56
Electrical Components & Equipment		6,618,998	2.79
Building Materials		5,717,794	2.41
Environmental Control		4,416,477	1.86
Packaging & Containers		4,117,465	1.73
Distribution & Wholesale		2,601,994	1.09
Auto Manufacturers		2,548,011	1.07
Engineering & Construction		1,614,505	0.68
Computers		1,321,159	0.56
Chemicals		1,258,751	0.53
Metal Fabricate & Hardware		1,053,882	0.44
Textiles		1,024,031	0.43
Internet		771,241	0.32
Retail		586,949	0.25
Leisure Time		522,908	0.22
Forest Products & Paper		495,839	0.21
Advertising		421,479	0.18
Mining		417,926	0.18
Biotechnology		376,060	0.16
Semiconductors		355,809	0.15
Hand & Machine Tools		334,103	0.14
Telecommunications		262,650	0.11
Housewares		184,958	0.08
Trucking & Leasing		159,233	0.07
Electric		142,376	0.06
Energy - Alternate Sources		128,654	0.05
Home Builders		77,426	0.03
Health Care - Products		15,681	0.01
Short-Term and Other Net Assets		10,883	0.01
TOTAL	$	237,496,898	100.00	%

See notes to financial statements.

42 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

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

October 31, 2004

Security	Shares	Value
COMMON STOCKS – 99.82%
BANKS – 44.65%
AMCORE Financial Inc.	1,512	$	46,010
AmSouth Bancorp	24,011		633,650
Associated Bancorp1	8,159		283,036
BancorpSouth Inc.	4,901		116,595
Bank of America Corp.	275,443		12,337,092
Bank of Hawaii Corp.	3,535		168,796
Bank of New York Co. Inc. (The)	52,598		1,707,331
Banknorth Group Inc.1	11,610		409,485
BB&T Corp.	37,554		1,543,845
Cathay General Bancorp	3,342		131,675
Chittenden Corp.	3,123		88,443
Citizens Banking Corp.1	2,539		83,152
City National Corp.	3,062		210,972
Colonial BancGroup Inc. (The)	8,985		194,525
Comerica Inc.	10,761		661,909
Commerce Bancorp Inc.1	5,343		316,519
Commerce Bancshares Inc.	4,474		219,673
Community First Bankshares Inc.	2,473		79,680
Compass Bancshares Inc.	8,278		395,440
Cullen/Frost Bankers Inc.	3,463		169,687
East West Bancorp Inc.	3,375		135,135
Fifth Third Bancorp	32,084		1,578,212
First BanCorp (Puerto Rico)1	2,548		138,942
First Horizon National Corp.	8,335		360,739
First Midwest Bancorp Inc.	3,181		111,049
First National Bankshares of Florida1	3,212		79,304
FirstMerit Corp.1	4,882		127,567
FNB Corp. (Pennsylvania)1	2,897		59,475
Fremont General Corp.1	4,470		96,105
Fulton Financial Corp.1	8,265		177,367
Greater Bay Bancorp1	3,449		107,764
Hibernia Corp. Class A	10,474		303,746
Hudson United Bancorp	3,042		121,072
Huntington Bancshares Inc.	14,657		351,035
Investors Financial Services Corp.1	4,497		173,090
KeyCorp	27,571		926,110
M&T Bank Corp.	6,321		651,063
Marshall & Ilsley Corp.	14,029		588,797
Mellon Financial Corp.	28,740		830,586
Mercantile Bankshares Corp.	5,344		260,467
National City Corp.	39,364		1,534,015
North Fork Bancorp Inc.	19,738		870,446
Northern Trust Corp.	13,951		593,476
Old National Bancorp1	4,514		111,812
Pacific Capital Bancorp	2,947		93,803
Park National Corp.	737		95,736
PNC Financial Services Group	19,104		999,139
Popular Inc.	16,553		425,743
Provident Bankshares Corp.	2,218		77,031
Regions Financial Corp.	31,253		1,096,355
Republic Bancorp Inc.1	4,355		72,772
Silicon Valley Bancshares1,2	2,446		97,864
Sky Financial Group Inc.	7,134		191,762
South Financial Group Inc. (The)1	4,740		142,295
SouthTrust Corp.	22,515		980,979
Southwest Bancorp of Texas Inc.1	4,490		105,246
State Street Corp.1	22,786		1,026,509
Sterling Bancshares Inc.1	3,044		43,133
SunTrust Banks Inc.	23,294		1,639,432
Susquehanna Bancshares Inc.1	3,179		79,062
Synovus Financial Corp.	17,522		476,423
TCF Financial Corp.1	8,890		280,213
Texas Regional Bancshares Inc. Class A1	3,103		99,079
TrustCo Bank Corp. NY1	4,939		66,133
Trustmark Corp.	3,449		108,747
U.S. Bancorp	127,228		3,639,993
UCBH Holdings Inc.1	3,064		132,028
UnionBanCal Corp.	3,335		202,601
United Bancshares Inc.	2,773		101,686
Valley National Bancorp1	6,634		188,140
W Holding Co. Inc.1	5,371		107,366
Wachovia Corp.	88,733		4,366,551
Wells Fargo & Co.	114,266		6,823,966
Westamerica Bancorp1	2,135		122,101
Whitney Holding Corp.	2,794		121,846
Wilmington Trust Corp.	4,501		155,555
Zions Bancorporation	6,067		401,453
			54,645,631
COMMERCIAL SERVICES – 0.20%
Alliance Data Systems Corp.2	3,096		130,899

SCHEDULES OF INVESTMENTS 43

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares	Value
MoneyGram International Inc.	5,973	$	111,098
			241,997
COMPUTERS – 0.10%
BISYS Group Inc. (The)1,2	8,256		120,538
			120,538
DIVERSIFIED FINANCIAL SERVICES – 49.05%
Affiliated Managers Group Inc.1,2	1,983		110,731
American Express Co.	76,074		4,037,247
AmeriCredit Corp.2	10,646		206,532
Ameritrade Holding Corp.2	19,361		252,080
Bear Stearns Companies Inc. (The)	6,988		662,113
Capital One Financial Corp.1	16,243		1,198,084
CapitalSource Inc.1,2	4,489		100,554
Chicago Mercantile Exchange Holdings Inc.1	1,891		332,305
CIT Group Inc.1	14,243		575,417
Citigroup Inc.	350,200		15,538,374
Countrywide Financial Corp.	38,093		1,216,309
Doral Financial Corp.	6,302		264,558
E*TRADE Financial Corp.2	24,725		318,952
Eaton Vance Corp.	4,043		176,356
Edwards (A.G.) Inc.	5,331		193,302
Federal Home Loan Mortgage Corp.	46,667		3,108,022
Federal National Mortgage Association1	65,532		4,597,070
Federated Investors Inc. Class B	6,544		189,711
Franklin Resources Inc.	9,506		576,254
Goldman Sachs Group Inc. (The)	27,929		2,747,655
IndyMac Bancorp Inc.	4,102		132,331
Investment Technology Group Inc.2	3,234		49,804
Janus Capital Group Inc.	16,197		247,004
Jefferies Group Inc.	3,345		134,235
JP Morgan Chase & Co.	241,199		9,310,281
Knight Trading Group Inc.2	8,003		83,151
LaBranche & Co. Inc.1,2	1,864		13,216
Legg Mason Inc.1	6,844		436,031
Lehman Brothers Holdings Inc.	18,379		1,509,835
MBNA Corp.	76,574		1,962,592
Merrill Lynch & Co. Inc.	58,354		3,147,615
Morgan Stanley	67,819		3,464,873
Piper Jaffray Companies Inc.1,2	1,281		56,018
Providian Financial Corp.2	19,754		307,175
Raymond James Financial Inc.	4,087		106,671
Schwab (Charles) Corp. (The)	75,210		688,171
SLM Corp.	29,534		1,336,709
SWS Group Inc.	875		16,800
T. Rowe Price Group Inc.	8,643		482,020
W.P. Stewart & Co. Ltd.1	1,553		31,371
Waddell & Reed Financial Inc. Class A1	5,641		118,517
			60,036,046
INSURANCE – 0.66%
Principal Financial Group Inc.1	21,245		802,211
			802,211
INTERNET – 0.02%
NetBank Inc.	3,286		30,494
			30,494
SAVINGS & LOANS – 4.94%
Anchor BanCorp Wisconsin Inc.	1,500		38,910
Astoria Financial Corp.	4,724		184,661
Commercial Federal Corp.1	2,727		75,838
Dime Community Bancshares	2,269		36,440
Downey Financial Corp.	1,404		77,585
First Niagara Financial Group Inc.1	5,310		74,021
FirstFed Financial Corp.2	1,028		52,839
Golden West Financial Corp.	10,350		1,210,122
Harbor Florida Bancshares Inc.1	1,438		46,074
Hudson City Bancorp Inc.1	4,567		166,878
Independence Community Bank Corp.	5,349		201,283
MAF Bancorp Inc.1	2,207		94,614
New York Community Bancorp Inc.1	16,244		298,240
OceanFirst Financial Corp.1	622		14,828
People’s Bank	6,313		236,674
PFF Bancorp Inc.	1,022		40,318
Provident Financial Services Inc.1	5,406		97,308
Sovereign Bancorp Inc.	23,189		502,042
Washington Federal Inc.	5,348		136,481
Washington Mutual Inc.	59,145		2,289,503
Webster Financial Corp.	3,573		170,789
			6,045,448
SOFTWARE – 0.20%
Safeguard Scientifics Inc.2	8,342		13,931
SEI Investments Co.	4,667		167,965

44 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares or Principal		Value
Total System Services Inc.		2,583	$	60,959
				242,855
TOTAL COMMON STOCKS (Cost: $111,383,395)				122,165,220
SHORT-TERM INVESTMENTS – 8.05%
COMMERCIAL PAPER – 1.37%
Amsterdam Funding Corp.
1.79%, 11/08/043	$	48,696		48,679
Aspen Funding Corp.
1.85%, 11/01/043		186,344		186,344
Barton Capital Corp.
1.78%, 11/04/043		56,100		56,092
1.79%, 11/08/043		50,960		50,942
CRC Funding LLC
1.78%, 11/09/043		32,464		32,451
Delaware Funding Corp.
1.78%, 11/10/043		35,711		35,695
Edison Asset Securitization
1.45%, 11/09/043		64,928		64,907
1.59%, 12/02/043		64,928		64,839
Eureka Securitization Inc.
1.79%, 11/01/043		27,585		27,585
Ford Credit Auto Receivables
1.85%, 01/14/053		32,464		32,341
Grampian Funding LLC
1.59%, 11/30/043		32,464		32,423
Liberty Street Funding Corp.
1.80%, 11/12/043		16,232		16,223
Nationwide Building Society
1.63%, 12/09/043		53,891		53,798
Polonius Inc.
1.79%, 11/12/043		32,464		32,446
Prudential Funding LLC
1.60%, 12/01/043		32,464		32,421
1.85%, 11/01/043		162,321		162,321
Ranger Funding Co. LLC
1.79%, 11/01/043		37,222		37,222
Scaldis Capital LLC
1.78%, 11/08/043		146,089		146,038
Security	Principal		Value
Thames Asset Global Securitization No. 1 Inc.
1.81%, 11/12/043	$	37,980	$	37,959
UBS Finance (Delaware)
1.11%, 12/17/043		97,393		97,254
1.85%, 11/01/043		324,642		324,642
Windmill Funding Corp.
1.79%, 11/02/043		9,739		9,739
1.79%, 11/03/043		38,957		38,953
1.79%, 11/08/043		47,268		47,252
				1,668,566
FLOATING RATE NOTES – 2.42%
American Express Credit Corp.
1.95%, 10/26/053		64,928		64,963
Bank of Nova Scotia
1.85%, 09/26/053		16,232		16,226
Beta Finance Inc.
1.78%, 05/04/053,4		38,957		38,954
1.89%, 09/23/053,4		58,436		58,415
1.89%, 09/27/053,4		51,943		51,924
1.91%, 03/15/053,4		32,464		32,474
2.04%, 10/27/053,4		61,682		61,749
Canadian Imperial Bank of Commerce
1.79%, 09/13/053		97,393		97,365
1.90%, 10/31/053		64,928		64,912
CC USA Inc.
1.78%, 05/04/053,4		64,928		64,922
2.06%, 07/29/053,4		64,928		64,914
Den Danske Bank NY
1.79%, 08/12/053		64,928		64,913
1.87%, 08/26/053		64,928		64,912
2.00%, 10/17/053		64,928		64,910
Depfa Bank PLC
1.86%, 09/15/053		64,928		64,928
Dorada Finance Inc.
2.06%, 07/29/053,4		53,891		53,879
Five Finance Inc.
1.91%, 04/29/053,4		51,943		51,940
HBOS Treasury Services PLC
1.96%, 04/22/053		64,928		64,928

SCHEDULES OF INVESTMENTS 45

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Principal		Value
K2 USA LLC
1.81%, 09/12/053,4	$	64,928	$	64,917
1.82%, 06/10/053,4		64,928		64,924
1.89%, 10/20/053,4		64,928		64,931
2.05%, 07/25/053,4		32,464		32,459
Links Finance LLC
1.82%, 04/15/053,4		64,928		64,923
2.12%, 04/25/053		64,928		64,949
National City Bank (Ohio)
1.79%, 08/09/053		64,928		64,913
1.85%, 06/10/053		32,464		32,470
1.86%, 06/23/053		64,928		64,916
Nationwide Building Society
1.96%, 10/28/053,4		110,378		110,392
Norddeutsche Landesbank
2.04%, 07/27/053		64,928		64,912
Northern Rock PLC
1.90%, 10/25/053,4		129,857		129,857
2.02%, 01/13/053,4		61,682		61,682
Permanent Financing PLC
1.81%, 03/10/053		64,928		64,928
1.82%, 12/10/043		32,464		32,464
1.84%, 06/10/053		29,218		29,218
Sigma Finance Inc.
1.84%, 11/15/043		64,928		64,928
1.86%, 08/17/053		32,464		32,466
1.86%, 09/15/053		81,160		81,167
Tango Finance Corp.
1.66%, 05/17/053,4		53,891		53,890
1.70%, 02/25/053,4		36,360		36,358
1.80%, 04/07/053,4		23,829		23,828
1.83%, 01/18/053,4		28,568		28,568
1.84%, 09/15/053,4		57,137		57,129
1.90%, 07/25/053,4		64,928		64,924
WhistleJacket Capital LLC
1.83%, 07/15/053,4		48,696		48,689
1.83%, 09/15/053		48,696		48,688
1.83%, 10/14/053,4		32,464		32,462
1.84%, 06/15/053,4		32,464		32,460
White Pine Finance LLC
1.68%, 05/20/053		29,218		29,216
Security	Shares or Principal		Value
1.80%, 07/05/053	$	32,464	$	32,460
1.82%, 04/15/053,4		48,696		48,692
1.83%, 11/15/043,4		38,957		38,957
1.84%, 06/15/053,4		26,621		26,621
1.89%, 03/29/053		27,919		27,917
1.90%, 08/26/053,4		32,464		32,459
2.02%, 07/11/053		16,232		16,231
Winston Funding Ltd.
2.16%, 01/23/053,4		46,359		46,359
				2,964,552
MEDIUM-TERM NOTES – 0.17%
CC USA Inc.
1.29%, 04/15/053,4		64,928		64,925
1.51%, 02/15/053,4		42,203		42,223
Dorada Finance Inc.
1.48%, 01/18/053,4		48,696		48,696
K2 USA LLC
1.46%, 01/12/053,4		32,464		32,464
WhistleJacket Capital LLC
1.32%, 02/04/053,4		16,232		16,231
				204,539
MONEY MARKET FUNDS – 1.70%
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares3,5		259,714		259,714
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares3,5		1,063,022		1,063,022
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares3,5		714,212		714,212
BlackRock Temp Cash Money Market Fund3		14,552		14,552
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares3		26,498		26,498
				2,077,998
REPURCHASE AGREEMENTS – 1.27%
Banc of America Securities LLC
1.86%, 11/01/043,6		259,714		259,714

46 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Principal		Value
Bank of America N.A.
1.86%, 11/01/043,6	$	649,284	$	649,284
Goldman Sachs & Co.
1.86%, 11/01/043,6		649,284		649,284
				1,558,282
TIME DEPOSITS – 0.93%
Abbey National Treasury Services PLC
1.25%, 01/06/053		64,923		64,923
1.33%, 02/10/053		32,464		32,463
1.39%, 02/02/053		32,464		32,463
1.39%, 04/08/053		45,450		45,447
Bank of New York
1.39%, 11/01/043		64,928		64,928
1.60%, 12/03/043		16,232		16,231
Canadian Imperial Bank of Commerce
1.38%, 11/22/043		16,232		16,232
HBOS Treasury Services PLC
1.24%, 04/01/053		41,554		41,552
Key Bank N.A
1.81%, 11/01/043		84,407		84,407
National City Bank (Ohio)
1.25%, 01/06/053		64,928		64,929
Nordea Bank PLC
2.11%, 06/07/053		64,928		64,921
Rabobank Nederland NV NY
1.85%, 11/01/043		129,857		129,857
Toronto-Dominion Bank
1.22%, 03/23/053		113,625		113,617
1.34%, 02/10/053		25,971		25,970
1.41%, 11/01/043		48,696		48,696
1.77%, 05/10/053		32,464		32,463
1.90%, 05/11/053		32,464		32,463
World Savings Bank FSB
1.76%, 11/12/043		230,496		230,494
				1,142,056
U.S. GOVERNMENT AGENCY NOTES – 0.19%
Federal Home Loan Mortgage Corp.
1.63%, 04/15/053		45,450		45,516
1.80%, 01/18/053		30,192		30,074
1.80%, 01/19/053		32,464		32,336
2.06%, 05/31/053		32,369		31,978
Federal National Mortgage Association
2.33%, 07/22/053		97,393		95,738
				235,642
TOTAL SHORT-TERM INVESTMENTS (Cost: $9,851,635)				9,851,635
TOTAL INVESTMENTS IN SECURITIES – 107.87% (Cost: $121,235,030)				132,016,855
OTHER ASSETS, LESS LIABILITIES – (7.87%)				(9,628,230	)
NET ASSETS – 100.00%			$	122,388,625

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 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.

⁵ The Fund’s investment adviser is an affiliate of the issuer. See Note 2.

⁶ Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.57% to 8.00% and maturity dates ranging from 6/1/14 to 10/1/34.

INDUSTRY DIVERSIFICATION

Industry	Value		% of Net Assets
Diversified Financial Services	$	60,036,046	49.05	%
Banks		54,645,631	44.65
Savings & Loans		6,045,448	4.94
Insurance		802,211	0.66
Software		242,855	0.20
Commercial Services		241,997	0.20
Computers		120,538	0.10
Internet		30,494	0.02
Short-Term and Other Net Assets		223,405	0.18
TOTAL	$	122,388,625	100.00	%

See notes to financial statements.

SCHEDULES OF INVESTMENTS 47

Schedule of Investments (Unaudited)

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

October 31, 2004

Security	Shares	Value
COMMON STOCKS – 99.89%
DIVERSIFIED FINANCIAL SERVICES – 1.03%
Friedman, Billings, Ramsey Group Inc. Class A1	416,865	$	7,145,066
			7,145,066
REAL ESTATE – 2.02%
LNR Property Corp.	58,369		3,650,397
St. Joe Co. (The)1	205,730		10,471,657
			14,122,054
REAL ESTATE INVESTMENT TRUSTS – 96.84%
Alexandria Real Estate Equities Inc.	56,545		3,734,797
AMB Property Corp.	241,399		9,052,463
American Financial Realty Trust1	322,166		4,735,840
Annaly Mortgage Management Inc.1	351,547		6,320,815
Apartment Investment & Management Co. Class A	276,360		10,139,648
Archstone-Smith Trust	571,179		19,163,055
Arden Realty Group Inc.	191,304		6,519,640
AvalonBay Communities Inc.	210,044		13,751,581
Boston Properties Inc.1	315,919		18,866,683
Brandywine Realty Trust	156,425		4,602,024
BRE Properties Inc. Class A1	146,318		5,838,088
Camden Property Trust1	116,554		5,291,552
Capital Automotive REIT1	106,684		3,441,626
CarrAmerica Realty Corp.1	158,736		5,116,061
Catellus Development Corp.	256,392		7,394,345
CBL & Associates Properties Inc.1	85,299		5,591,350
CenterPoint Properties Trust	140,951		6,526,031
Colonial Properties Trust1	79,304		3,091,270
Cousins Properties Inc.1	114,089		4,246,393
Crescent Real Estate Equities Co.1	290,301		4,647,719
CRT Properties Inc.	78,669		1,743,305
Developers Diversified Realty Corp.	298,576		12,480,477
Duke Realty Corp.	415,165		14,157,127
Equity Inns Inc.	146,574		1,392,453
Equity Office Properties Trust	1,176,327		33,078,315
Equity Residential	818,003		27,280,400
Essex Property Trust Inc.1	61,175		4,799,791
Federal Realty Investment Trust1	151,219		7,175,342
FelCor Lodging Trust Inc.1,2	136,998		1,591,917
First Industrial Realty Trust Inc.1	120,426		4,648,444
Gables Residential Trust1	85,350		3,115,275
General Growth Properties Inc.1	638,054		21,049,402
General Growth Properties Inc. Warrants (Expiring 11/9/04)1,3	53,341		5
Glenborough Realty Trust Inc.1	93,471		1,962,891
Health Care Property Investors Inc.	387,462		10,783,068
Health Care REIT Inc.1	150,818		5,429,448
Healthcare Realty Trust Inc.1	137,458		5,546,430
Highwoods Properties Inc.1	156,324		3,878,398
Home Properties Inc.	97,003		3,991,673
Hospitality Properties Trust1	182,336		7,813,098
Host Marriott Corp.2	935,737		13,614,973
HRPT Properties Trust	517,723		5,793,320
Impac Mortgage Holdings Inc.1	187,044		4,229,065
iStar Financial Inc.	324,577		13,443,979
Kilroy Realty Corp.1	82,836		3,292,731
Kimco Realty Corp.	276,031		15,057,491
Liberty Property Trust	247,260		10,026,393
Macerich Co. (The)1	172,687		10,318,048
Mack-Cali Realty Corp.	176,794		7,808,991
Manufactured Home Communities Inc.1	61,566		2,123,411
Meristar Hospitality Corp.2	255,105		1,489,813
Mills Corp.1	156,638		8,685,577
Nationwide Health Properties Inc.1	193,819		4,374,495
New Century Financial Corp.1	138,933		7,662,155
New Plan Excel Realty Trust Inc.1	298,575		7,810,722
Novastar Financial Inc.1	72,263		3,127,543
Pan Pacific Retail Properties Inc.1	118,145		6,692,914
Pennsylvania Real Estate Investment Trust1	98,056		3,976,171
Plum Creek Timber Co. Inc.	534,153		19,384,412
Post Properties Inc.1	115,914		3,719,680
Prentiss Properties Trust1	113,558		4,085,817
ProLogis	530,681		20,685,945
Public Storage Inc.	256,516		13,402,961
Rayonier Inc.1	144,962		6,871,199
Realty Income Corp.1	115,687		5,551,819
Reckson Associates Realty Corp.1	204,241		6,198,714
Redwood Trust Inc.	63,283		3,807,105

48 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares or Principal		Value
Regency Centers Corp.1		177,758	$	8,685,256
Rouse Co. (The)		300,520		20,044,684
Shurgard Storage Centers Inc. Class A1		134,235		5,329,130
Simon Property Group Inc.		645,348		37,636,695
SL Green Realty Corp.		113,172		6,204,089
Taubman Centers Inc.		136,420		3,915,254
Thornburg Mortgage Inc.1		242,447		6,926,711
Trizec Properties Inc.1		266,028		4,243,147
United Dominion Realty Trust Inc.		373,550		7,874,434
Ventas Inc.		245,731		6,610,164
Vornado Realty Trust		343,691		23,096,035
Washington Real Estate Investment Trust1		121,738		3,828,660
Weingarten Realty Investors		232,014		8,389,626
				676,007,569
TOTAL COMMON STOCKS (Cost: $686,971,176)				697,274,689
SHORT-TERM INVESTMENTS – 16.94%
COMMERCIAL PAPER – 2.89%
Amsterdam Funding Corp.
1.79%, 11/08/044	$	587,910		587,705
Aspen Funding Corp.
1.85%, 11/01/044		2,249,734		2,249,734
Barton Capital Corp.
1.78%, 11/04/044		677,295		677,195
1.79%, 11/08/044		615,236		615,022
CRC Funding LLC
1.78%, 11/09/044		391,940		391,785
Delaware Funding Corp.
1.78%, 11/10/044		431,134		430,942
Edison Asset Securitization
1.45%, 11/09/044		783,879		783,627
1.59%, 12/02/044		783,879		782,806
Eureka Securitization Inc.
1.79%, 11/01/044		333,031		333,032
Ford Credit Auto Receivables
1.85%, 01/14/054		391,940		390,449
Grampian Funding LLC
1.59%, 11/30/044		391,940		391,438
Security	Principal		Value
Liberty Street Funding Corp.
1.80%, 11/12/044	$	195,970	$	195,862
Nationwide Building Society
1.63%, 12/09/044		650,620		649,501
Polonius Inc.
1.79%, 11/12/044		391,940		391,725
Prudential Funding LLC
1.60%, 12/01/044		391,940		391,417
1.85%, 11/01/044		1,959,699		1,959,699
Ranger Funding Co. LLC
1.79%, 11/01/044		449,382		449,382
Scaldis Capital LLC
1.78%, 11/08/044		1,763,729		1,763,118
Thames Asset Global Securitization No. 1 Inc.
1.81%, 11/12/044		458,530		458,277
UBS Finance (Delaware)
1.11%, 12/17/044		1,175,819		1,174,152
1.85%, 11/01/044		3,919,397		3,919,397
Windmill Funding Corp.
1.79%, 11/02/044		117,582		117,576
1.79%, 11/03/044		470,328		470,281
1.79%, 11/08/044		570,664		570,466
				20,144,588
FLOATING RATE NOTES – 5.13%
American Express Credit Corp.
1.95%, 10/26/054		783,879		784,295
Bank of Nova Scotia
1.85%, 09/26/054		195,970		195,892
Beta Finance Inc.
1.78%, 05/04/054,5		470,328		470,280
1.89%, 09/23/054,5		705,492		705,239
1.89%, 09/27/054,5		627,104		626,877
1.91%, 03/15/054,5		391,940		392,057
2.04%, 10/27/054,5		744,686		745,493
Canadian Imperial Bank of Commerce
1.79%, 09/13/054		1,175,819		1,175,487
1.90%, 10/31/054		783,879		783,677
CC USA Inc.
1.78%, 05/04/054,5		783,879		783,800
2.06%, 07/29/054,5		783,879		783,705

SCHEDULES OF INVESTMENTS 49

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Principal		Value
Den Danske Bank NY
1.79%, 08/12/054	$	783,879	$	783,697
1.87%, 08/26/054		783,879		783,687
2.00%, 10/17/054		783,879		783,655
Depfa Bank PLC
1.86%, 09/15/054		783,879		783,879
Dorada Finance Inc.
2.06%, 07/29/054,5		650,620		650,476
Five Finance Inc.
1.91%, 04/29/054,5		627,104		627,073
HBOS Treasury Services PLC
1.96%, 04/22/054		783,879		783,879
K2 USA LLC
1.81%, 09/12/054,5		783,879		783,745
1.82%, 06/10/054,5		783,879		783,821
1.89%, 10/20/054,5		783,879		783,905
2.05%, 07/25/054,5		391,940		391,882
Links Finance LLC
1.82%, 04/15/054,5		783,879		783,809
2.12%, 04/25/054		783,879		784,125
National City Bank (Ohio)
1.79%, 08/09/054		783,879		783,698
1.85%, 06/10/054		391,940		392,014
1.86%, 06/23/054		783,879		783,729
Nationwide Building Society
1.96%, 10/28/054,5		1,332,595		1,332,767
Norddeutsche Landesbank
2.04%, 07/27/054		783,879		783,677
Northern Rock PLC
1.90%, 10/25/054,5		1,567,759		1,567,759
2.02%, 01/13/054,5		744,686		744,686
Permanent Financing PLC
1.81%, 03/10/054		783,879		783,879
1.82%, 12/10/044		391,940		391,940
1.84%, 06/10/054		352,746		352,746
Sigma Finance Inc.
1.84%, 11/15/044		783,879		783,878
1.86%, 08/17/054		391,940		391,967
1.86%, 09/15/054		979,849		979,928
Tango Finance Corp.
1.66%, 05/17/054,5		650,620		650,602
Security	Shares or Principal		Value
1.70%, 02/25/054,5	$	438,973	$	438,945
1.80%, 04/07/054,5		287,684		287,671
1.83%, 01/18/054,5		344,907		344,900
1.84%, 09/15/054,5		689,814		689,720
1.90%, 07/25/054,5		783,879		783,823
WhistleJacket Capital LLC
1.83%, 07/15/054,5		587,910		587,826
1.83%, 09/15/054		587,910		587,807
1.83%, 10/14/054,5		391,940		391,902
1.84%, 06/15/054,5		391,940		391,884
White Pine Finance LLC
1.68%, 05/20/054		352,746		352,726
1.80%, 07/05/054		391,940		391,882
1.82%, 04/15/054,5		587,910		587,856
1.83%, 11/15/044,5		470,328		470,328
1.84%, 06/15/054,5		321,391		321,391
1.89%, 03/29/054		337,068		337,037
1.90%, 08/26/054,5		391,940		391,876
2.02%, 07/11/054		195,970		195,955
Winston Funding Ltd.
2.16%, 01/23/054,5		559,690		559,690
				35,790,924
MEDIUM-TERM NOTES – 0.35%
CC USA Inc.
1.29%, 04/15/054,5		783,879		783,844
1.51%, 02/15/054,5		509,522		509,752
Dorada Finance Inc.
1.48%, 01/18/054,5		587,910		587,904
K2 USA LLC
1.46%, 01/12/054,5		391,940		391,932
WhistleJacket Capital LLC
1.32%, 02/04/054,5		195,970		195,960
				2,469,392
MONEY MARKET FUNDS – 3.50%
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares4,6		3,135,518		3,135,518
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares4,6		12,179,972		12,179,972

50 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

Security	Shares or Principal		Value
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares4,6		8,622,674	$	8,622,674
BlackRock Temp Cash Money Market Fund4		175,689		175,689
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares4		319,915		319,915
				24,433,768
REPURCHASE AGREEMENTS – 2.69%
Banc of America Securities LLC
1.86%, 11/01/044,7	$	3,135,518		3,135,518
Bank of America N.A.
1.86%, 11/01/044,7		7,838,795		7,838,795
Goldman Sachs & Co.
1.86%, 11/01/044,7		7,838,795		7,838,795
				18,813,108
TIME DEPOSITS – 1.97%
Abbey National Treasury Services PLC
1.25%, 01/06/054		783,879		783,879
1.33%, 02/10/054		391,940		391,923
1.39%, 02/02/054		391,940		391,925
1.39%, 04/08/054		548,716		548,680
Bank of New York
1.39%, 11/01/044		783,879		783,880
1.60%, 12/03/044		195,970		195,961
Canadian Imperial Bank of Commerce
1.38%, 11/22/044		195,970		195,971
HBOS Treasury Services PLC
1.24%, 04/01/054		501,683		501,663
Key Bank N.A.
1.81%, 11/01/044		1,019,043		1,019,043
National City Bank (Ohio)
1.25%, 01/06/054		783,879		783,886
Nordea Bank PLC
2.11%, 06/07/054		783,879		783,787
Rabobank Nederland NV NY
1.85%, 11/01/044		1,567,759		1,567,759
Security	Principal		Value
Toronto-Dominion Bank
1.22%, 03/23/054	$	1,371,789	$	1,371,696
1.34%, 02/10/054		313,552		313,539
1.41%, 11/01/044		587,910		587,910
1.77%, 05/10/054		391,940		391,919
1.90%, 05/11/054		391,940		391,919
World Savings Bank FSB
1.76%, 11/12/044		2,782,772		2,782,752
				13,788,092
U.S. GOVERNMENT AGENCY NOTES – 0.41%
Federal Home Loan Mortgage Corp.
1.63%, 04/15/054		548,716		549,510
1.80%, 01/18/054		364,504		363,082
1.80%, 01/19/054		391,940		390,392
2.06%, 05/31/054		390,787		386,069
Federal National Mortgage Association
2.33%, 07/22/054		1,175,819		1,155,847
				2,844,900
TOTAL SHORT-TERM INVESTMENTS (Cost: $118,284,772)				118,284,772
TOTAL INVESTMENTS IN SECURITIES – 116.83% (Cost: $805,255,948)				815,559,461
Other Assets, Less Liabilities – (16.83%)				(117,499,805	)
NET ASSETS – 100.00%			$	698,059,656

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

² Non-income earning security.

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

⁴ All or a portion of this security represents an investment of securities lending collateral. See Note 5.

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 The Fund’s investment adviser is an affiliate of the issuer. See Note 2.

⁷ Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.57% to 8.00% and maturity dates ranging from 6/1/14 to 10/1/34.

SCHEDULES OF INVESTMENTS 51

Schedule of Investments (Unaudited) (Continued)

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

October 31, 2004

INDUSTRY DIVERSIFICATION

Industry	Value		% of Net Assets
Real Estate Investment Trusts	$	676,007,569	96.84	%
Real Estate		14,122,054	2.02
Diversified Financial Services		7,145,066	1.03
Short-Term and Other Net Assets		784,967	0.11
TOTAL	$	698,059,656	100.00	%

See notes to financial statements.

52 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

iSHARES^® COHEN & STEERS REALTY MAJORS INDEX FUND

October 31, 2004

Security	Shares		Value
COMMON STOCKS – 99.93%
REAL ESTATE INVESTMENT TRUSTS – 99.93%
AMB Property Corp.		616,620	$	23,123,250
Archstone-Smith Trust		1,461,268		49,025,541
Arden Realty Group Inc.1		488,470		16,647,058
AvalonBay Communities Inc.1		536,270		35,109,597
Boston Properties Inc.1		806,938		48,190,337
CarrAmerica Realty Corp.1		405,265		13,061,691
Catellus Development Corp.1		768,705		22,169,452
CenterPoint Properties Trust1		348,696		16,144,625
Cousins Properties Inc.1		365,392		13,599,890
Developers Diversified Realty Corp.1		762,604		31,876,847
Duke Realty Corp.1		1,060,761		36,171,950
Equity Office Properties Trust		2,927,521		82,321,891
Equity Residential		2,093,968		69,833,833
Essex Property Trust Inc.1		171,034		13,419,328
General Growth Properties Inc.1		1,630,714		53,797,255
General Growth Properties Inc. Warrants (Expiring 11/9/04)1,2		164,743		16
Health Care Property Investors Inc.		991,224		27,585,764
Host Marriott Corp.1,3		2,590,531		37,692,226
Kimco Realty Corp.1		829,735		45,262,044
Liberty Property Trust		631,793		25,619,206
Macerich Co. (The)1		437,245		26,125,389
Pan Pacific Retail Properties Inc.1		301,843		17,099,406
ProLogis		1,355,550		52,839,339
Public Storage Inc.1		958,994		50,107,437
Reckson Associates Realty Corp.1		535,465		16,251,363
Regency Centers Corp.1		453,317		22,149,069
Rouse Co. (The)		767,716		51,206,657
Simon Property Group Inc.		1,465,256		85,453,730
SL Green Realty Corp.		288,522		15,816,776
Vornado Realty Trust1		937,747		63,016,598
Weingarten Realty Investors1		638,683		23,094,777
				1,083,812,342
TOTAL COMMON STOCKS (Cost: $905,756,754)				1,083,812,342
Security	Principal		Value
SHORT-TERM INVESTMENTS – 13.94%
COMMERCIAL PAPER – 2.37%
Amsterdam Funding Corp.
1.79%, 11/08/044	$	751,017	$	750,756
Aspen Funding Corp.
1.85%, 11/01/044		2,873,892		2,873,892
Barton Capital Corp.
1.78%, 11/04/044		865,202		865,073
1.79%, 11/08/044		785,924		785,651
CRC Funding LLC
1.78%, 11/09/044		500,678		500,480
Delaware Funding Corp.
1.78%, 11/10/044		550,746		550,501
Edison Asset Securitization
1.45%, 11/09/044		1,001,356		1,001,034
1.59%, 12/02/044		1,001,356		999,985
Eureka Securitization Inc.
1.79%, 11/01/044		425,426		425,426
Ford Credit Auto Receivables
1.85%, 01/14/054		500,678		498,775
Grampian Funding LLC
1.59%, 11/30/044		500,678		500,037
Liberty Street Funding Corp.
1.80%, 11/12/044		250,339		250,202
Nationwide Building Society
1.63%, 12/09/044		831,125		829,695
Polonius Inc.
1.79%, 11/12/044		500,678		500,404
Prudential Funding LLC
1.60%, 12/01/044		500,678		500,010
1.85%, 11/01/044		2,503,390		2,503,390
Ranger Funding Co. LLC
1.79%, 11/01/044		574,057		574,057
Scaldis Capital LLC
1.78%, 11/08/044		2,253,051		2,252,271
Thames Asset Global Securitization No. 1 Inc.
1.81%, 11/12/044		585,743		585,419
UBS Finance (Delaware)
1.11%, 12/17/044		1,502,034		1,499,904
1.85%, 11/01/044		5,006,780		5,006,780

SCHEDULES OF INVESTMENTS 53

Schedule of Investments (Unaudited) (Continued)

iSHARES^® COHEN & STEERS REALTY MAJORS INDEX FUND

October 31, 2004

Security	Principal		Value
Windmill Funding Corp.
1.79%, 11/02/044	$	150,203	$	150,196
1.79%, 11/03/044		600,814		600,754
1.79%, 11/08/044		728,987		728,735
				25,733,427
FLOATING RATE NOTES – 4.22%
American Express Credit Corp.
1.95%, 10/26/054		1,001,356		1,001,886
Bank of Nova Scotia
1.85%, 09/26/054		250,339		250,239
Beta Finance Inc.
1.78%, 05/04/054,5		600,814		600,754
1.89%, 09/23/054,5		901,220		900,898
1.89%, 09/27/054,5		801,085		800,795
1.91%, 03/15/054,5		500,678		500,827
2.04%, 10/27/054,5		951,288		952,320
Canadian Imperial Bank of Commerce
1.79%, 09/13/054		1,502,034		1,501,610
1.90%, 10/31/054		1,001,356		1,001,097
CC USA Inc.
1.78%, 05/04/054,5		1,001,356		1,001,256
2.06%, 07/29/054,5		1,001,356		1,001,133
Den Danske Bank NY
1.79%, 08/12/054		1,001,356		1,001,122
1.87%, 08/26/054		1,001,356		1,001,111
2.00%, 10/17/054		1,001,356		1,001,069
Depfa Bank PLC
1.86%, 09/15/054		1,001,356		1,001,356
Dorada Finance Inc.
2.06%, 07/29/054,5		831,125		830,941
Five Finance Inc.
1.91%, 04/29/054,5		801,085		801,045
HBOS Treasury Services PLC
1.96%, 04/22/054		1,001,356		1,001,356
K2 USA LLC
1.81%, 09/12/054,5		1,001,356		1,001,184
1.82%, 06/10/054,5		1,001,356		1,001,282
1.89%, 10/20/054,5		1,001,356		1,001,389
2.05%, 07/25/054,5		500,678		500,605
Links Finance LLC
1.82%, 04/15/054,5		1,001,356		1,001,265
2.12%, 04/25/054		1,001,356		1,001,670
National City Bank (Ohio)
1.79%, 08/09/054		1,001,356		1,001,125
1.85%, 06/10/054		500,678		500,773
1.86%, 06/23/054		1,001,356		1,001,163
Nationwide Building Society
1.96%, 10/28/054,5		1,702,305		1,702,524
Norddeutsche Landesbank
2.04%, 07/27/054		1,001,356		1,001,097
Northern Rock PLC
1.90%, 10/25/054,5		2,002,712		2,002,712
2.02%, 01/13/054,5		951,288		951,288
Permanent Financing PLC
1.81%, 03/10/054		1,001,356		1,001,356
1.82%, 12/10/044		500,678		500,678
1.84%, 06/10/054		450,610		450,610
Sigma Finance Inc.
1.84%, 11/15/044		1,001,356		1,001,353
1.86%, 08/17/054		500,678		500,713
1.86%, 09/15/054		1,251,695		1,251,795
Tango Finance Corp.
1.66%, 05/17/054,5		831,125		831,103
1.70%, 02/25/054,5		560,759		560,724
1.80%, 04/07/054,5		367,498		367,482
1.83%, 01/18/054,5		440,597		440,588
1.84%, 09/15/054,5		881,193		881,073
1.90%, 07/25/054,5		1,001,356		1,001,283
WhistleJacket Capital LLC
1.83%, 07/15/054,5		751,017		750,910
1.83%, 09/15/054		751,017		750,886
1.83%, 10/14/054,5		500,678		500,630
1.84%, 06/15/054,5		500,678		500,607
White Pine Finance LLC
1.68%, 05/20/054		450,610		450,585
1.80%, 07/05/054		500,678		500,604
1.82%, 04/15/054,5		751,017		750,949
1.83%, 11/15/044,5		600,814		600,814
1.84%, 06/15/054,5		410,556		410,556
1.89%, 03/29/054		430,583		430,544
1.90%, 08/26/054,5		500,678		500,596
2.02%, 07/11/054		250,339		250,319

54 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® COHEN & STEERS REALTY MAJORS INDEX FUND

October 31, 2004

Security	Shares or Principal		Value
Winston Funding Ltd.
2.16%, 01/23/054,5	$	714,968	$	714,968
				45,720,618
MEDIUM-TERM NOTES – 0.29%
CC USA Inc.
1.29%, 04/15/054,5		1,001,356		1,001,311
1.51%, 02/15/054,5		650,881		651,175
Dorada Finance Inc.
1.48%, 01/18/054,5		751,017		751,009
K2 USA LLC
1.46%, 01/12/054,5		500,678		500,668
WhistleJacket Capital LLC
1.32%, 02/04/054,5		250,339		250,326
				3,154,489
MONEY MARKET FUNDS – 2.89%
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares4,6		4,005,424		4,005,424
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares4,6		15,672,934		15,672,934
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares4,6		11,014,916		11,014,916
BlackRock Temp Cash Money Market Fund4		224,431		224,431
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares4		408,670		408,670
				31,326,375
REPURCHASE AGREEMENTS – 2.22%
Banc of America Securities LLC
1.86%, 11/01/044,7		4,005,424		4,005,424
Bank of America N.A
1.86%, 11/01/044,7		10,013,560		10,013,560
Goldman Sachs & Co.
1.86%, 11/01/044,7		10,013,560		10,013,560
				24,032,544
Security	Principal		Value
TIME DEPOSITS – 1.62%
Abbey National Treasury Services PLC
1.25%, 01/06/054	$	1,001,356	$	1,001,356
1.33%, 02/10/054		500,678		500,657
1.39%, 02/02/054		500,678		500,659
1.39%, 04/08/054		700,949		700,904
Bank of New York
1.39%, 11/01/044		1,001,356		1,001,356
1.60%, 12/03/044		250,339		250,328
Canadian Imperial Bank of Commerce
1.38%, 11/22/044		250,339		250,340
HBOS Treasury Services PLC
1.24%, 04/01/054		640,868		640,841
Key Bank N.A
1.81%, 11/01/044		1,301,763		1,301,763
National City Bank (Ohio)
1.25%, 01/06/054		1,001,356		1,001,365
Nordea Bank PLC
2.11%, 06/07/054		1,001,356		1,001,237
Rabobank Nederland NV NY
1.85%, 11/01/044		2,002,712		2,002,712
Toronto-Dominion Bank
1.22%, 03/23/054		1,752,373		1,752,253
1.34%, 02/10/054		400,542		400,526
1.41%, 11/01/044		751,017		751,017
1.77%, 05/10/054		500,678		500,652
1.90%, 05/11/054		500,678		500,652
World Savings Bank FSB
1.76%, 11/12/044		3,554,814		3,554,786
				17,613,404
U.S. GOVERNMENT AGENCY NOTES – 0.33%
Federal Home Loan Mortgage Corp.
1.63%, 04/15/054		700,949		701,964
1.80%, 01/18/054		465,631		463,815
1.80%, 01/19/054		500,678		498,700
2.06%, 05/31/054		499,206		493,179

SCHEDULES OF INVESTMENTS 55

Schedule of Investments (Unaudited) (Continued)

iSHARES^® COHEN & STEERS REALTY MAJORS INDEX FUND

October 31, 2004

Security	Principal		Value
Federal National Mortgage Association
2.33%, 07/22/054	$	1,502,034	$	1,476,521
				3,634,179
TOTAL SHORT-TERM INVESTMENTS (Cost: $151,215,036)				151,215,036
TOTAL INVESTMENTS IN SECURITIES – 113.87% (Cost: $1,056,971,790)				1,235,027,378
Other Assets, Less Liabilities – (13.87%)				(150,412,873	)
NET ASSETS – 100.00%			$	1,084,614,505

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

² Security valued at fair value in accordance with procedures approved by the Board of Trustees. See Note 1.

³ Non-income earning security.

⁴ All or a portion of this security represents an investment of securities lending collateral. See Note 5.

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 The Fund’s investment adviser is an affiliate of the issuer. See Note 2.

⁷ Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.57% to 8.00% and maturity dates ranging from 6/1/14 to 10/1/34.

INDUSTRY DIVERSIFICATION

Industry	Value		% of Net Assets
Real Estate Investment Trusts	$	1,083,812,342	99.93	%
Short-Term and Other Net Assets		802,163	0.07
TOTAL	$	1,084,614,505	100.00	%

See notes to financial statements.

56 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Assets and Liabilities (Unaudited)

iSHARES^® TRUST

October 31, 2004

	iShares Dow Jones U.S.
	Basic Materials Sector Index Fund		Consumer Cyclical Sector Index Fund			Consumer Non-Cyclical Sector Index Fund			Financial Sector Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	350,616,402	$	220,437,535		$	349,401,845		$	263,915,656
Affiliated issuersa	$	6,235,403	$	4,053,228		$	5,952,690		$	4,114,488
Investments in securities, at value (including securities on loanb) (Note 1):
Unaffiliated issuers	$	368,835,114	$	209,414,307		$	338,641,254		$	289,189,026
Affiliated issuersa		6,235,403		4,053,228			5,952,690			4,114,488
Receivables:
Dividends and interest		234,757		55,233			441,226			666,429
Total Assets		375,305,274		213,522,768			345,035,170			293,969,943
LIABILITIES
Payables:
Investment securities purchased		—		—			—			66,497
Collateral for securities on loan (Note 5)		30,332,283		19,670,401			29,241,618			19,957,177
Investment advisory fees (Note 2)		333,760		186,700			324,470			264,732
Total Liabilities		30,666,043		19,857,101			29,566,088			20,288,406
NET ASSETS	$	344,639,231	$	193,665,667		$	315,469,082		$	273,681,537
Net assets consist of:
Paid-in capital	$	319,141,162	$	197,439,649		$	324,435,137		$	244,778,385
Undistributed (distributions in excess of) net investment income		385,316		(31,472	)		297,754			954,978
Undistributed net realized gain		6,894,041		7,280,718			1,496,782			2,674,804
Net unrealized appreciation (depreciation)		18,218,712		(11,023,228	)		(10,760,591	)		25,273,370
NET ASSETS	$	344,639,231	$	193,665,667		$	315,469,082		$	273,681,537
Shares outstanding		7,450,000		3,450,000			6,550,000			3,000,000
Net asset value per share	$	46.26	$	56.13		$	48.16		$	91.23

^a The Funds’ investment adviser is an affiliate of the issuers.

^b Securities on loan with market values of $29,294,227, $19,111,063, $28,380,656 and $19,365,518, respectively. See Note 5.

See notes to financial statements.

FINANCIAL STATEMENTS 57

Statements of Assets and Liabilities (Unaudited) (Continued)

iSHARES^® TRUST

October 31, 2004

	iShares Dow Jones U.S.									iShares Cohen & Steers
	Industrial Sector Index Fund			Financial Services Index Fund			Real Estate Index Fund			Realty Majors Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	240,609,841		$	119,198,082		$	781,317,784		$	1,026,278,516
Affiliated issuersa	$	3,008,021		$	2,036,948		$	23,938,164		$	30,693,274
Investments in securities, at value (including securities on loanb) (Note 1):
Unaffiliated issuers	$	249,290,746		$	129,979,907		$	791,621,297		$	1,204,334,104
Affiliated issuersa		3,008,021			2,036,948			23,938,164			30,693,274
Receivables:
Investment securities sold		76,004			41,439			—			—
Dividends and interest		92,453			375,683			1,122,664			749,672
Total Assets		252,467,224			132,433,977			816,682,125			1,235,777,050
LIABILITIES
Payables:
Investment securities purchased		—			163,968			—			—
Collateral for securities on loan (Note 5)		14,745,605			9,761,534			117,850,864			150,546,948
Capital shares redeemed		—			—			116,244			—
Investment advisory fees (Note 2)		224,721			119,850			655,361			615,597
Total Liabilities		14,970,326			10,045,352			118,622,469			151,162,545
NET ASSETS	$	237,496,898		$	122,388,625		$	698,059,656		$	1,084,614,505
Net assets consist of:
Paid-in capital	$	235,965,046		$	113,727,882		$	633,221,988		$	873,769,824
Undistributed (distributions in excess of) net investment income		362,790			379,376			(1,302,248	)		1,431,022
Undistributed net realized gain (accumulated net realized loss)		(7,511,843	)		(2,500,458	)		55,836,403			31,358,071
Net unrealized appreciation		8,680,905			10,781,825			10,303,513			178,055,588
NET ASSETS	$	237,496,898		$	122,388,625		$	698,059,656		$	1,084,614,505
Shares outstanding		4,550,000			1,150,000			6,150,000			8,600,000
Net asset value per share	$	52.20		$	106.42		$	113.51		$	126.12

^a The Funds’ investment adviser is an affiliate of the issuers.

^b Securities on loan with market values of $14,252,620, $9,488,813, $114,334,104 and $146,675,624, respectively. See Note 5.

See notes to financial statements.

58 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations (Unaudited)

iSHARES^® TRUST

For the six months ended October 31, 2004

	iShares Dow Jones U.S.
	Basic Materials Sector Index Fund			Consumer Cyclical Sector Index Fund			Consumer Non-Cyclical Sector Index Fund			Financial Sector Index Fund
NET INVESTMENT INCOME
Dividendsa	$	3,355,619		$	726,004		$	3,480,384		$	3,363,447
Interestb		1,215			630			1,201			1,489
Securities lending incomeb		12,167			11,533			16,688			8,909
Total investment income		3,369,001			738,167			3,498,273			3,373,845
EXPENSES (Note 2)
Investment advisory fees		908,949			573,344			982,318			758,682
Total expenses		908,949			573,344			982,318			758,682
Net investment income		2,460,052			164,823			2,515,955			2,615,163
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments		(1,038,787	)		(967,073	)		(1,070,335	)		(204,113	)
In-kind redemptions		10,215,713			11,479,483			5,090,223			7,209,743
Net realized gain		9,176,926			10,512,410			4,019,888			7,005,630
Net change in unrealized appreciation (depreciation) on investments		15,938,720			(7,657,915	)		(32,141,783	)		2,331,348
Net realized and unrealized gain (loss)		25,115,646			2,854,495			(28,121,895	)		9,336,978
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	27,575,698		$	3,019,318		$	(25,605,940	)	$	11,952,141

^a Net of foreign withholding tax of $-, $-, $- and $846, respectively.

^b Includes income earned from issuers of which the Funds’ investment adviser is an affiliate. See Note 2.

See notes to financial statements.

FINANCIAL STATEMENTS 59

Statements of Operations (Unaudited) (Continued)

iSHARES^® TRUST

For the six months ended October 31, 2004

	iShares Dow Jones U.S.								iShares Cohen & Steers
	Industrial Sector Index Fund			Financial Services Index Fund		Real Estate Index Fund			Realty Majors Index Fund
NET INVESTMENT INCOME
Dividendsa	$	1,556,070		$	1,589,650	$	15,985,028		$	22,103,040
Interestb		873			637		4,428			4,374
Securities lending incomeb		6,544			3,378		58,396			35,487
Total investment income		1,563,487			1,593,665		16,047,852			22,142,901
EXPENSES (Note 2)
Investment advisory fees		610,860			345,764		1,749,424			1,604,726
Total expenses		610,860			345,764		1,749,424			1,604,726
Net investment income		952,627			1,247,901		14,298,428			20,538,175
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments		(1,022,805	)		25,566		(1,715,999	)		(6,708,043	)
In-kind redemptions		2,246,205			—		59,236,763			40,066,244
Net realized gain		1,223,400			25,566		57,520,764			33,358,201
Net change in unrealized appreciation (depreciation) on investments		12,518,505			6,307,055		49,855,280			166,924,304
Net realized and unrealized gain		13,741,905			6,332,621		107,376,044			200,282,505
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	14,694,532		$	7,580,522	$	121,674,472		$	220,820,680

^a Net of foreign withholding tax of $-, $547, $- and $-, respectively.

^b Includes income earned from issuers of which the Funds’ investment adviser is an affiliate. See Note 2.

See notes to financial statements.

60 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets

iSHARES^® TRUST

	iShares Dow Jones U.S. Basic Materials Sector Index Fund						iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund						iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund
	For the six months ended October 31, 2004 (Unaudited)			For the year ended April 30, 2004			For the six months ended October 31, 2004 (Unaudited)			For the year ended April 30, 2004			For the six months ended October 31, 2004 (Unaudited)			For the year ended April 30, 2004
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	2,460,052		$	4,057,186		$	164,823		$	296,106		$	2,515,955		$	2,258,812
Net realized gain (loss)		9,176,926			18,339,983			10,512,410			699,258			4,019,888			(112,901	)
Net change in unrealized appreciation (depreciation)		15,938,720			12,741,111			(7,657,915	)		27,215,745			(32,141,783	)		38,413,496
Net increase (decrease) in net assets resulting from operations		27,575,698			35,138,280			3,019,318			28,211,109			(25,605,940	)		40,559,407
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(2,485,288	)		(3,869,236	)		(196,295	)		(296,106	)		(2,448,490	)		(2,371,901	)
Return of capital		—			—			—			(8,787	)		—			—
Total distributions to shareholders		(2,485,288	)		(3,869,236	)		(196,295	)		(304,893	)		(2,448,490	)		(2,371,901	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		91,323,200			275,384,412			55,324,134			132,602,989			88,065,798			170,050,256
Cost of shares redeemed		(88,613,137	)		(89,594,002	)		(83,868,276	)		(70,898,261	)		(34,111,744	)		(6,586,545	)
Net increase (decrease) in net assets from capital share transactions		2,710,063			185,790,410			(28,544,142	)		61,704,728			53,954,054			163,463,711
INCREASE (DECREASE) IN NET ASSETS		27,800,473			217,059,454			(25,721,119	)		89,610,944			25,899,624			201,651,217
NET ASSETS:
Beginning of period		316,838,758			99,779,304			219,386,786			129,775,842			289,569,458			87,918,241
End of period	$	344,639,231		$	316,838,758		$	193,665,667		$	219,386,786		$	315,469,082		$	289,569,458
Undistributed (distributions in excess of) net investment income included in net assets at end of period	$	385,316		$	410,552		$	(31,472	)	$	—		$	297,754		$	230,289
SHARES ISSUED AND REDEEMED:
Shares sold		2,050,000			6,650,000			1,000,000			2,500,000			1,700,000			3,500,000
Shares redeemed		(2,100,000	)		(2,050,000	)		(1,500,000	)		(1,400,000	)		(700,000	)		(150,000	)
Net increase (decrease) in shares outstanding		(50,000	)		4,600,000			(500,000	)		1,100,000			1,000,000			3,350,000

See notes to financial statements.

FINANCIAL STATEMENTS 61

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST

	iShares Dow Jones U.S. Financial Sector Index Fund						iShares Dow Jones U.S. Industrial Sector Index Fund						iShares Dow Jones U.S. Financial Services Index Fund
	For the six months ended October 31, 2004 (Unaudited)			For the year ended April 30, 2004			For the six months ended October 31, 2004 (Unaudited)			For the year ended April 30, 2004			For the six months ended October 31, 2004 (Unaudited)			For the year ended April 30, 2004
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	2,615,163		$	4,332,816		$	952,627		$	1,277,272		$	1,247,901		$	2,175,468
Net realized gain (loss)		7,005,630			(148,655	)		1,223,400			10,965,150			25,566			10,113,638
Net change in unrealized appreciation (depreciation)		2,331,348			32,124,797			12,518,505			15,562,180			6,307,055			5,539,065
Net increase in net assets resulting from operations		11,952,141			36,308,958			14,694,532			27,804,602			7,580,522			17,828,171
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(2,257,638	)		(3,894,471	)		(589,837	)		(1,283,480	)		(1,192,800	)		(2,073,172	)
Return of capital		—			—			—			(11,324	)		—			—
Total distributions to shareholders		(2,257,638	)		(3,894,471	)		(589,837	)		(1,294,804	)		(1,192,800	)		(2,073,172	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		32,296,052			81,532,850			78,605,510			111,708,255			5,330,035			45,865,363
Cost of shares redeemed		(26,389,735	)		(4,069,289	)		(12,597,479	)		(61,884,407	)		—			(67,906,919	)
Net increase (decrease) in net assets from capital share transactions		5,906,317			77,463,561			66,008,031			49,823,848			5,330,035			(22,041,556	)
INCREASE (DECREASE) IN NET ASSETS		15,600,820			109,878,048			80,112,726			76,333,646			11,717,757			(6,286,557	)
NET ASSETS:
Beginning of period		258,080,717			148,202,669			157,384,172			81,050,526			110,670,868			116,957,425
End of period	$	273,681,537		$	258,080,717		$	237,496,898		$	157,384,172		$	122,388,625		$	110,670,868
Undistributed net investment income included in net assets at end of period	$	954,978		$	597,453		$	362,790		$	—		$	379,376		$	324,275
SHARES ISSUED AND REDEEMED:
Shares sold		350,000			950,000			1,550,000			2,450,000			50,000			450,000
Shares redeemed		(300,000	)		(50,000	)		(250,000	)		(1,300,000	)		—			(750,000	)
Net increase (decrease) in shares outstanding		50,000			900,000			1,300,000			1,150,000			50,000			(300,000	)

See notes to financial statements.

62 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST

	iShares Dow Jones U.S. Real Estate Index Fund						iShares Cohen & Steers Realty Majors Index Fund
	For the six months ended October 31, 2004 (Unaudited)			For the year ended April 30, 2004			For the six months ended October 31, 2004 (Unaudited)			For the year ended April 30, 2004
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	14,298,428		$	19,345,350		$	20,538,175		$	28,273,224
Net realized gain		57,520,764			54,520,373			33,358,201			25,127,626
Net change in unrealized appreciation (depreciation)		49,855,280			(35,483,332	)		166,924,304			14,250,762
Net increase in net assets resulting from operations		121,674,472			38,382,391			220,820,680			67,651,612
Undistributed net investment income included in the price of capital shares issued or redeemed		1,939,500			2,549,000			597,500			4,088,000
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(15,890,677	)		(13,871,295	)		(20,736,886	)		(20,735,219	)
Return of capital		—			(6,619,829	)		—			(8,685,946	)
Total distributions to shareholders		(15,890,677	)		(20,491,124	)		(20,736,886	)		(29,421,165	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		1,802,286,853			697,487,703			289,458,408			537,632,626
Cost of shares redeemed		(1,631,039,654	)		(494,041,553	)		(129,971,433	)		(123,236,692	)
Net increase in net assets from capital share transactions		171,247,199			203,446,150			159,486,975			414,395,934
INCREASE IN NET ASSETS		278,970,494			223,886,417			360,168,269			456,714,381
NET ASSETS:
Beginning of period		419,089,162			195,202,745			724,446,236			267,731,855
End of period	$	698,059,656		$	419,089,162		$	1,084,614,505		$	724,446,236
Undistributed (distributions in excess of) net investment income included in net assets at end of period	$	(1,302,248	)	$	290,001		$	1,431,022		$	1,629,733
SHARES ISSUED AND REDEEMED:
Shares sold		17,250,000			7,150,000			2,550,000			5,250,000
Shares redeemed		(15,600,000	)		(5,100,000	)		(1,150,000	)		(1,200,000	)
Net increase in shares outstanding		1,650,000			2,050,000			1,400,000			4,050,000

See notes to financial statements.

FINANCIAL STATEMENTS 63

Financial Highlights

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares Dow Jones U.S. Basic Materials Sector Index Fund
	Six months ended Oct. 31, 2004 (Unaudited)			Year ended Apr. 30, 2004			Year ended Apr. 30, 2003			Year ended Apr. 30, 2002			Period from Jun. 12, 2000a to Apr. 30, 2001
Net asset value, beginning of period	$	42.25		$	34.41		$	39.99		$	39.24		$	36.04
Income from investment operations:
Net investment income		0.39			0.66			0.70			0.55			0.55
Net realized and unrealized gain (loss)		4.01			7.86			(5.62	)		0.73			3.25
Total from investment operations		4.40			8.52			(4.92	)		1.28			3.80
Less distributions from:
Net investment income		(0.39	)		(0.68	)		(0.66	)		(0.53	)		(0.53	)
Net realized gain		—			—			—			—			(0.07	)
Total distributions		(0.39	)		(0.68	)		(0.66	)		(0.53	)		(0.60	)
Net asset value, end of period	$	46.26		$	42.25		$	34.41		$	39.99		$	39.24
Total return		10.44	%b		24.85	%		(12.30	)%		3.38	%		10.80	%b
Ratios/Supplemental data:
Net assets, end of period (000s)	$	344,639		$	316,839		$	99,779		$	57,989		$	9,811
Ratio of expenses to average net assetsc		0.60	%		0.60	%		0.60	%		0.60	%		0.60	%
Ratio of net investment income to average net assetsc		1.62	%		1.70	%		2.10	%		1.42	%		1.77	%
Portfolio turnover rated		3	%		7	%		6	%		9	%		16	%

^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.

64 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund
	Six months ended Oct. 31, 2004 (Unaudited)			Year ended Apr. 30, 2004			Year ended Apr. 30, 2003			Year ended Apr. 30, 2002			Period from Jun. 12, 2000a to Apr. 30, 2001
Net asset value, beginning of period	$	55.54		$	45.54		$	55.05		$	59.88		$	59.63
Income from investment operations:
Net investment income		0.05			0.10			0.05			0.02			0.09
Net realized and unrealized gain (loss)		0.60			10.00			(9.50	)		(4.80	)		0.45
Total from investment operations		0.65			10.10			(9.45	)		(4.78	)		0.54
Less distributions from:
Net investment income		(0.06	)		(0.10	)		(0.05	)		—			(0.10	)
Net realized gain		—			—			—			—			(0.19	)
Return of capital		—			(0.00	)e		(0.01	)		(0.05	)		—
Total distributions		(0.06	)		(0.10	)		(0.06	)		(0.05	)		(0.29	)
Net asset value, end of period	$	56.13		$	55.54		$	45.54		$	55.05		$	59.88
Total return		1.17	%b		22.21	%		(17.17	)%		(7.98	)%		0.98	%b
Ratios/Supplemental data:
Net assets, end of period (000s)	$	193,666		$	219,387		$	129,776		$	129,362		$	29,940
Ratio of expenses to average net assetsc		0.60	%		0.60	%		0.60	%		0.60	%		0.60	%
Ratio of net investment income (loss) to average net assetsc		0.17	%		0.19	%		0.11	%		(0.05	)%		0.16	%
Portfolio turnover rated		2	%		6	%		10	%		4	%		25	%

^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 $0.01.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 65

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares Dow Jones U.S. Consumer Non-cyclical Sector Index Fund
	Six months ended Oct. 31, 2004 (Unaudited)			Year ended Apr. 30, 2004			Year ended Apr. 30, 2003			Year ended Apr. 30, 2002			Period from Jun. 12, 2000a to Apr. 30, 2001
Net asset value, beginning of period	$	52.17		$	39.96		$	47.91		$	40.55		$	40.83
Income from investment operations:
Net investment income		0.37			0.65			0.69			0.49			0.42
Net realized and unrealized gain (loss)		(4.01	)		12.32			(8.04	)		7.41			(0.39	)
Total from investment operations		(3.64	)		12.97			(7.35	)		7.90			0.03
Less distributions from:
Net investment income		(0.37	)		(0.76	)		(0.60	)		(0.54	)		(0.31	)
Total distributions		(0.37	)		(0.76	)		(0.60	)		(0.54	)		(0.31	)
Net asset value, end of period	$	48.16		$	52.17		$	39.96		$	47.91		$	40.55
Total return		(6.99	)%b		32.73	%		(15.40	)%		19.65	%		0.06	%b
Ratios/Supplemental data:
Net assets, end of period (000s)	$	315,469		$	289,569		$	87,918		$	114,974		$	14,192
Ratio of expenses to average net assetsc		0.60	%		0.60	%		0.60	%		0.60	%		0.60	%
Ratio of net investment income to average net assetsc		1.54	%		1.53	%		1.57	%		1.46	%		1.21	%
Portfolio turnover rated		3	%		5	%		28	%		8	%		38	%

^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.

66 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares Dow Jones U.S. Financial Sector Index Fund
	Six months ended Oct. 31, 2004 (Unaudited)			Year ended Apr. 30, 2004			Year ended Apr. 30, 2003			Year ended Apr. 30, 2002			Period from May 22, 2000a to Apr. 30, 2001
Net asset value, beginning of period	$	87.48		$	72.29		$	81.20		$	81.78		$	71.80
Income from investment operations:
Net investment income		0.90			1.65			1.31			1.11			1.77
Net realized and unrealized gain (loss)		3.63			15.09			(8.94	)		(0.61	)		10.17
Total from investment operations		4.53			16.74			(7.63	)		0.50			11.94
Less distributions from:
Net investment income		(0.78	)		(1.55	)		(1.28	)		(1.08	)		(1.57	)
Net realized gain		—			—			—			—			(0.39	)
Total distributions		(0.78	)		(1.55	)		(1.28	)		(1.08	)		(1.96	)
Net asset value, end of period	$	91.23		$	87.48		$	72.29		$	81.20		$	81.78
Total return		5.19	%b		23.29	%		(9.33	)%		0.66	%		16.69	%b
Ratios/Supplemental data:
Net assets, end of period (000s)	$	273,682		$	258,081		$	148,203		$	121,796		$	57,249
Ratio of expenses to average net assetsc		0.60	%		0.60	%		0.60	%		0.60	%		0.60	%
Ratio of net investment income to average net assetsc		2.07	%		2.08	%		1.94	%		1.49	%		1.46	%
Portfolio turnover rated		4	%		7	%		28	%		4	%		11	%

^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 STATEMENTS 67

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares Dow Jones U.S. Industrial Sector Index Fund
	Six months ended Oct. 31, 2004 (Unaudited)			Year ended Apr. 30, 2004			Year ended Apr. 30, 2003			Year ended Apr. 30, 2002			Period from Jun. 12, 2000a to Apr. 30, 2001
Net asset value, beginning of period	$	48.43		$	38.60		$	45.75		$	53.99		$	58.11
Income from investment operations:
Net investment income		0.22			0.39			0.38			0.29			0.22
Net realized and unrealized gain (loss)		3.69			9.84			(7.15	)		(8.23	)		(3.98	)
Total from investment operations		3.91			10.23			(6.77	)		(7.94	)		(3.76	)
Less distributions from:
Net investment income		(0.14	)		(0.40	)		(0.38	)		(0.30	)		(0.23	)
Net realized gain		—			—			—			—			(0.13	)
Return of capital		—			(0.00	)e		—			—			—
Total distributions		(0.14	)		(0.40	)		(0.38	)		(0.30	)		(0.36	)
Net asset value, end of period	$	52.20		$	48.43		$	38.60		$	45.75		$	53.99
Total return		8.09	%b		26.56	%		(14.75	)%		(14.72	)%		(6.46	)%b
Ratios/Supplemental data:
Net assets, end of period (000s)	$	237,497		$	157,384		$	81,051		$	84,634		$	45,891
Ratio of expenses to average net assetsc		0.60	%		0.60	%		0.60	%		0.60	%		0.60	%
Ratio of net investment income to average net assetsc		0.94	%		0.94	%		1.03	%		0.56	%		0.44	%
Portfolio turnover rated		3	%		3	%		12	%		27	%		23	%

^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 $0.01.

See notes to financial statements.

68 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares Dow Jones U.S. Financial Services Index Fund
	Six months ended Oct. 31, 2004 (Unaudited)			Year ended Apr. 30, 2004			Year ended Apr. 30, 2003			Year ended Apr. 30, 2002			Period from Jun. 12, 2000a to Apr. 30, 2001
Net asset value, beginning of period	$	100.61		$	83.54		$	92.45		$	93.67		$	85.58
Income from investment operations:
Net investment income		1.10			2.12			1.41			1.22			1.29
Net realized and unrealized gain (loss)		5.77			16.93			(8.90	)		(1.26	)		8.10
Total from investment operations		6.87			19.05			(7.49	)		(0.04	)		9.39
Less distributions from:
Net investment income		(1.06	)		(1.98	)		(1.42	)		(1.18	)		(1.17	)
Net realized gain		—			—			—			—			(0.13	)
Total distributions		(1.06	)		(1.98	)		(1.42	)		(1.18	)		(1.30	)
Net asset value, end of period	$	106.42		$	100.61		$	83.54		$	92.45		$	93.67
Total return		6.87	%b		22.91	%		(8.02	)%		0.00	%e		11.03	%b
Ratios/Supplemental data:
Net assets, end of period (000s)	$	122,389		$	110,671		$	116,957		$	60,092		$	37,467
Ratio of expenses to average net assetsc		0.60	%		0.60	%		0.60	%		0.60	%		0.60	%
Ratio of net investment income to average net assetsc		2.17	%		2.08	%		1.90	%		1.46	%		1.33	%
Portfolio turnover rated		4	%		7	%		41	%		3	%		5	%

^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 0.01%.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 69

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares Dow Jones U.S. Real Estate Index Fund
	Six months ended Oct. 31, 2004 (Unaudited)			Year ended Apr. 30, 2004			Year ended Apr. 30, 2003			Year ended Apr. 30, 2002			Period from Jun. 12, 2000a to Apr. 30, 2001
Net asset value, beginning of period	$	93.13		$	79.67		$	85.52		$	77.21		$	68.97
Income from investment operations:
Net investment income		2.25			4.98			5.04			4.56			3.51
Net realized and unrealized gain (loss)		20.66			13.84			(6.01	)		8.71			7.51
Total from investment operations		22.91			18.82			(0.97	)		13.27			11.02
Less distributions from:
Net investment income		(2.53	)		(3.63	)		(3.98	)		(4.54	)		(2.64	)
Net realized gain		—			—			—			—			(0.14	)
Return of capital		—			(1.73	)		(0.90	)		(0.42	)		—
Total distributions		(2.53	)		(5.36	)		(4.88	)		(4.96	)		(2.78	)
Net asset value, end of period	$	113.51		$	93.13		$	79.67		$	85.52		$	77.21
Total return		24.86	%b		23.66	%		(0.98	)%		17.83	%		16.32	%b
Ratios/Supplemental data:
Net assets, end of period (000s)	$	698,060		$	419,089		$	195,203		$	106,905		$	54,049
Ratio of expenses to average net assetsc		0.60	%		0.60	%		0.60	%		0.60	%		0.60	%
Ratio of net investment income to average net assetsc		4.90	%		5.58	%		6.40	%		5.97	%		6.37	%
Portfolio turnover rated		6	%		20	%		21	%		10	%		30	%

^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.

70 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares Cohen & Steers Realty Majors Index Fund
	Six months ended Oct. 31, 2004 (Unaudited)			Year ended Apr. 30, 2004			Year ended Apr. 30, 2003			Year ended Apr. 30, 2002			Period from Jan. 29, 2001a to Apr. 30, 2001
Net asset value, beginning of period	$	100.62		$	84.99		$	89.68		$	80.09		$	79.86
Income from investment operations:
Net investment income		2.49			5.26			4.59			4.79			1.11
Net realized and unrealized gain (loss)		25.56			15.87			(4.32	)		9.98			(0.39	)
Total from investment operations		28.05			21.13			0.27			14.77			0.72
Less distributions from:
Net investment income		(2.55	)		(3.88	)		(3.76	)		(4.77	)		(0.49	)
Return of capital		—			(1.62	)		(1.20	)		(0.41	)		—
Total distributions		(2.55	)		(5.50	)		(4.96	)		(5.18	)		(0.49	)
Net asset value, end of period	$	126.12		$	100.62		$	84.99		$	89.68		$	80.09
Total return		28.16	%b		24.97	%		0.46	%		19.05	%		0.91	%b
Ratios/Supplemental data:
Net assets, end of period (000s)	$	1,084,615		$	724,446		$	267,732		$	89,684		$	40,047
Ratio of expenses to average net assetsc		0.35	%		0.35	%		0.35	%e		0.35	%		0.35	%
Ratio of net investment income to average net assetsc		4.48	%		5.28	%		6.17	%e		5.80	%		6.01	%
Portfolio turnover rated		8	%		15	%		13	%		15	%		2	%

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

See notes to financial statements.

FINANCIAL HIGHLIGHTS 71

Notes to the Financial Statements (Unaudited)

iSHARES^® TRUST

1. SIGNIFICANT ACCOUNTING POLICIES

iShares Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust was established as a Delaware statutory trust pursuant to an Agreement and Declaration of Trust dated December 16, 1999. As of October 31, 2004, the Trust offered 73 investment portfolios or funds.

These financial statements relate only to the iShares Dow Jones U.S. Basic Materials Sector, iShares Dow Jones U.S. Consumer Cyclical Sector, iShares Dow Jones U.S. Consumer Non-Cyclical Sector, iShares Dow Jones U.S. Financial Sector, iShares Dow Jones U.S. Industrial Sector, iShares Dow Jones U.S. Financial Services, iShares Dow Jones U.S. Real Estate and the iShares Cohen & Steers Realty Majors Index Funds (each a “Fund,” collectively the “Funds”).

The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index, as indicated in the name of each Fund. The investment 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. Non-diversified funds generally hold stocks of fewer companies than diversified funds and may be more susceptible to the risks associated with these particular companies, or to a single economic, political or regulatory occurrence affecting these companies.

Under the Trust’s organizational documents, the Funds’ officers and trustees are indemnified against certain liabilities that may arise out of the performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred.

The following significant accounting policies are consistently followed by the Trust in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for investment companies. The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions 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 are valued at the last sale price on the principal exchange on which they are traded, or in the absence of any sale on the valuation date, at the latest quoted bid price. 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 the latest quoted bid price, which is 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 are valued at the latest quoted bid price, which are obtained from one or more reputable independent pricing services. If quoted prices are unavailable or inaccurate, market values are 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 are valued at amortized cost.

Securities held under a repurchase agreement are valued at a price equal to the amount of the cash investment at the time of valuation on the valuation date. The market values of the underlying securities are determined in accordance with the above discussed valuation methods, as appropriate, for the purpose of determining the adequacy of collateral.

72 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^® TRUST

Securities of investment companies, other than investment companies whose shares are traded on an exchange, are valued at the investment company’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.

EQUALIZATION

The iShares Dow Jones U.S. Real Estate Index Fund and the iShares Cohen & Steers Realty Majors Index Fund use the accounting practice of equalization. This accounting method is used to keep the continuing shareholders’ per share equity in undistributed net investment income from being affected by the continuous sales and redemptions of capital stock. Equalization is calculated on a per share basis whereby a portion of the proceeds from sales and costs of repurchases of capital stock is applied to undistributed net investment income. The amounts of equalization are disclosed in the Statements of Changes in Net Assets as undistributed net investment income included in the price of capital shares issued or redeemed.

DISTRIBUTIONS TO SHAREHOLDERS

Distributions to shareholders from net investment income, if any, are declared and distributed at least annually by each Fund. Distributions of net realized capital gains, if any, generally are declared and distributed once a year. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions cannot be automatically reinvested in additional shares of the Funds.

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

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

For the years ended April 30, 2004 and April 30, 2003, the tax characterization of distributions paid for each Fund was equal to the book characterization of distributions paid. The total distributions and distributions per share are disclosed in the accompanying Statements of Changes in Net Assets and the Financial Highlights for all Funds.

NOTES TO THE FINANCIAL STATEMENTS 73

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^® TRUST

FEDERAL INCOME TAXES

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

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

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

Net capital loss carryforwards may be applied against any net realized taxable gains in each succeeding year, or until their respective expiration dates, whichever occurs first.

For the six months ended October 31, 2004, certain Funds realized net capital gains or losses resulting from in-kind redemptions of large blocks of 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 six months ended October 31, 2004 are disclosed in the Funds’ Statements of Operations.

As of October 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)
Dow Jones U.S. Basic Materials Sector	$	358,734,126	$	26,824,223	$	(10,487,832	)	$	16,336,391
Dow Jones U.S. Consumer Cyclical Sector		225,613,675		10,691,390		(22,837,530	)		(12,146,140	)
Dow Jones U.S. Consumer Non-Cyclical Sector		356,653,574		13,841,937		(25,901,567	)		(12,059,630	)
Dow Jones U.S. Financial Sector		269,921,148		33,800,540		(10,418,174	)		23,382,366
Dow Jones U.S. Industrial Sector		246,352,371		15,689,612		(9,743,216	)		5,946,396
Dow Jones U.S. Financial Services		122,525,579		12,269,142		(2,777,866	)		9,491,276
Dow Jones U.S. Real Estate		805,438,121		17,339,092		(7,217,752	)		10,121,340
Cohen & Steers Realty Majors		1,062,808,799		172,218,579		—			172,218,579

74 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Unaudited) (Continued)

iShares^® TRUST

REPURCHASE AGREEMENTS

Each Fund may enter into repurchase agreements with banks and securities dealers. These transactions involve the purchase of securities with a simultaneous commitment to resell the securities to the bank or the dealer at an agreed-upon date and price. A repurchase agreement is accounted for as an investment by a Fund, collateralized by securities, which are delivered to the Fund’s 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. As of October 31, 2004, a portion of each Fund’s 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.

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

Investors Bank & Trust Company (“Investors Bank”) serves as administrator, custodian, and transfer agent for the Trust. As compensation for its services, Investors Bank receives certain out-of-pocket costs, transaction fees, and asset-based fees, which are accrued daily and paid monthly. These fees are Covered Expenses as defined above.

Barclays Global Investors, N.A. (“BGI”) serves as securities lending agent for the Trust. BGI is an affiliate of BGFA, the Funds’ investment 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 six months ended October 31, 2004, BGI earned securities lending agent fees as follows:

iShares Index Fund	Securities Lending Agent Fees
Dow Jones U.S. Basic Materials Sector	$	12,067
Dow Jones U.S. Consumer Cyclical Sector		11,531
Dow Jones U.S. Consumer Non-Cyclical Sector		16,667
Dow Jones U.S. Financial Sector		8,837
Dow Jones U.S. Industrial Sector		6,499
Dow Jones U.S. Financial Services		3,351
Dow Jones U.S Real Estate		58,788
Cohen & Steers Realty Majors		35,372

NOTES TO THE FINANCIAL STATEMENTS 75

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^® TRUST

SEI Investments Distribution Company (the “Distributor”) serves as each Fund’s underwriter and distributor of the shares of each Fund, pursuant to a Distribution Agreement with the Trust. The Distributor 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 six months ended October 31, 2004, BGIS did not receive any brokerage commissions from the Funds.

Pursuant to Rule 17a-7 under the 1940 Act, certain Funds executed cross trades for the six months ended October 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 five months of the fiscal year and concluded that they were in compliance with the requirements and restrictions set forth by Rule 17a-7. The Board is scheduled at its next meeting to review all such transactions executed during the last month of the fiscal half-year.

Pursuant to an exemptive order issued by the U.S. Securities and Exchange Commission, each Fund may invest in the Institutional Shares of the Government Money Market Fund (“GMMF”), Institutional Money Market Fund (“IMMF”), and Prime Money Market Fund (“PMMF”) of Barclays Global Investors Funds. The GMMF, IMMF, and PMMF are feeder funds in a master/feeder fund structure that invest substantially all of their assets in the Government Money Market Master Portfolio, 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 GMMF, IMMF, and PMMF are open-end money market funds available to institutional and accredited investors, including other investment companies managed by BGFA. The GMMF, IMMF, and PMMF seek a high level of income consistent with liquidity and the preservation of capital. While the GMMF, 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 GMMF, 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.

76 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^® TRUST

The following table provides information about the investment of each Fund in shares of issuers, of which BGFA is an affiliate, for the six months ended October 31, 2004, including income earned from these affiliated issuers.

iShares Index Fund and Name of Affiliated Issuer	Number of Shares Held Beginning of Period (in 000s)	Gross Additions (in 000s)	Gross Reductions (in 000s)	Number of Shares Held End of Period (in 000s)	Value at End of Period		Interest Income
Dow Jones U.S. Basic Materials Sector
IMMF	259	3,647	3,720	186	$	185,912	$	1,215
Dow Jones U.S. Consumer Cyclical Sector
IMMF	143	1,118	1,131	130		130,149		630
Dow Jones U.S. Consumer Non-Cyclical Sector
IMMF	68	4,359	4,306	121		120,721		1,201
Dow Jones U.S. Financial Sector
IMMF	277	5,263	5,406	134		134,215		1,489
Dow Jones U.S. Industrial Sector
IMMF	51	1,455	1,439	67		67,147		834
Dow Jones U.S. Financial Services
IMMF	80	2,752	2,742	90		90,101		637
Dow Jones U.S. Real Estate
IMMF	498	28,122	28,186	434		433,908		4,428
Cohen & Steers Realty Majors
IMMF	593	31,787	31,712	668		668,088		4,374

The Funds invested cash collateral from securities on loan in the GMMF, 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 Fund’s holdings of the GMMF, IMMF, and PMMF in connection with the investment of collateral for securities on loan.

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

NOTES TO THE FINANCIAL STATEMENTS 77

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^® TRUST

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the six months ended October 31, 2004, were as follows:

iShares Index Fund	Purchases		Sales
Dow Jones U.S. Basic Materials Sector	$	9,200,184	$	9,215,171
Dow Jones U.S. Consumer Cyclical Sector		4,088,037		4,183,433
Dow Jones U.S. Consumer Non-Cyclical Sector		8,157,201		8,145,742
Dow Jones U.S. Financial Sector		10,806,763		10,393,760
Dow Jones U.S. Industrial Sector		6,913,941		6,519,473
Dow Jones U.S. Financial Services		4,559,610		4,494,893
Dow Jones U.S. Real Estate		45,136,566		37,512,884
Cohen & Steers Realty Majors		86,752,229		75,660,143

In-kind transactions (see Note 4) for the six months ended October 31, 2004, were as follows:

iShares Index Fund	In-Kind Purchases		In-Kind Sales
Dow Jones U.S. Basic Materials Sector	$	91,197,106	$	88,456,062
Dow Jones U.S. Consumer Cyclical Sector		55,302,626		83,749,234
Dow Jones U.S. Consumer Non-Cyclical Sector		88,016,264		34,063,844
Dow Jones U.S. Financial Sector		32,226,234		26,361,654
Dow Jones U.S. Industrial Sector		78,556,881		12,587,155
Dow Jones U.S. Financial Services		5,319,293		—
Dow Jones U.S. Real Estate		1,823,310,753		1,659,483,632
Cohen & Steers Realty Majors		311,873,128		163,141,227

4. CAPITAL SHARE TRANSACTIONS

As of October 31, 2004, there were an unlimited number of no par value capital shares of beneficial interest authorized. Capital shares are issued and redeemed by each Fund only in Creation Units or multiples thereof. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the Statements of Changes in Net Assets.

The consideration for the purchase of Creation Units of a Fund generally consists of the in-kind contribution of a designated portfolio of equity securities constituting a 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.

78 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^® TRUST

5. LOANS OF PORTFOLIO SECURITIES

Each Fund may lend its investment securities to approved borrowers, such as brokers, dealers, and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received by each Fund is required to have a value of at least 102% of the market value of the loaned securities. The collateral is maintained thereafter, at a value equal to at least 100% of the current market value of the securities on loan. The risks to the Funds of securities lending are that the borrower may not provide additional collateral when required, or may not return the securities when due.

As of October 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 as of October 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.

NOTES TO THE FINANCIAL STATEMENTS 79

Notes:

80 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes:

NOTES 81

The iShares^® Family of Funds

The following is a list of iShares Funds being offered, along with their respective exchange trading symbols. Please call 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 FTSE/Xinhua China 25 (FXI)

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™ 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)

* On December 20, 2004, certain Dow Jones Indexes will undergo certain methodology changes that will impact the composition of the indexes. In order to reflect these changes the iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund will be renamed the iShares Dow Jones U.S. Consumer Goods Sector Index Fund and the iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund will be renamed the iShares Dow Jones U.S. Consumer Services Sector Index Fund. The investment objective, principal investment strategy and portfolio holdings of each of these Funds will also be modified to correspond to the name changes and constituent changes to the Funds’ corresponding indexes.

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., FTSE/Xinhua Index Limited, Morgan Stanley Capital International, Morningstar, Inc., The Nasdaq Stock Market, Inc., New York Stock Exchange, Inc., Frank Russell Company, or Standard & Poor’s. None of these companies make any representation regarding the advisability of investing in the iShares Funds. Neither SEI nor BGI, nor any of their affiliates, are affiliated with the companies listed above. “GS $ InvesTop^™” and “Goldman Sachs^®” are trademarks of Goldman, Sachs & Co.

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

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

1485-iS-1204

82 2004 iSHARES SEMI-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, sold, or promoted by Dow Jones & Company, Inc. or Cohen & Steers Capital Management, Inc., nor do these companies make any representation regarding the advisability of investing in the iShares Funds.

©2004 Barclays Global Investors. All rights reserved. iShares is a registered trademark of Barclays Global Investors, N.A. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.

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 charge, upon request, by calling toll-free 1-800-474-2737; on the Funds’ website at www.iShares.com; and on the Securities and Exchange Commission’s website at www.sec.gov.

The Funds file 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. The Funds’ Forms N-Q are available on the Commission’s website at www.sec.gov. 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.

BGI-F-012-10041

2004 SEMI-ANNUAL REPORT TO SHAREHOLDERS  |  OCTOBER 31, 2004

iSHARES MORNINGSTAR SERIES

iSHARES MORNINGSTAR LARGE CORE INDEX FUND

iSHARES MORNINGSTAR LARGE GROWTH INDEX FUND

iSHARES MORNINGSTAR LARGE VALUE INDEX FUND

iSHARES MORNINGSTAR MID CORE INDEX FUND

iSHARES MORNINGSTAR MID GROWTH INDEX FUND

iSHARES MORNINGSTAR MID VALUE INDEX FUND

iSHARES MORNINGSTAR SMALL CORE INDEX FUND

iSHARES MORNINGSTAR SMALL GROWTH INDEX FUND

iSHARES MORNINGSTAR SMALL VALUE INDEX FUND

Dear iShares Shareholder:

Electronic delivery is the easiest, most convenient way to receive reporting on your iShares holdings. In addition, it’s a way we can all care for our environment. To that end, we are pleased to offer shareholder reports and prospectuses online.

To sign up for electronic delivery, please follow these simple steps:

1. Go to www.icsdelivery.com.

2. From the main page, select the first letter of your brokerage firm’s name.

3. Select your brokerage institution from the list that follows. If your brokerage firm is not listed, electronic delivery may not be available. Please contact your brokerage firm or financial adviser.

4. Fill out the appropriate information and provide the e-mail address where you would like your information sent.

Your information and email address will be kept confidential and only used to deliver documents to you. If at any time you are not satisfied, you can cancel electronic delivery at www.icsdelivery.com and once again receive physical delivery of your materials. If you have any questions, please contact your brokerage firm or financial adviser.

Once you have enrolled, you will no longer receive prospectuses and shareholder reports in the mail. Instead, you will receive e-mail notifications announcing that the shareholder report or prospectus has been posted on the iShares website at www.iShares.com.

Table of Contents

Management’s Discussion of Fund Performance	1
Shareholder Expenses	7
Schedules of Investments	9
iShares Morningstar Large Core Index Fund	9
iShares Morningstar Large Growth Index Fund	14
iShares Morningstar Large Value Index Fund	19
iShares Morningstar Mid Core Index Fund	24
iShares Morningstar Mid Growth Index Fund	32
iShares Morningstar Mid Value Index Fund	40
iShares Morningstar Small Core Index Fund	47
iShares Morningstar Small Growth Index Fund	57
iShares Morningstar Small Value Index Fund	66
Financial Statements	75
Financial Highlights	81
Notes to the Financial Statements	83
iShares Family of Funds	90

Management’s Discussion of Fund Performance

iSHARES^® MORNINGSTAR LARGE CORE INDEX FUND

iSHARES^® MORNINGSTAR LARGE GROWTH INDEX FUND

iSHARES^® MORNINGSTAR LARGE VALUE INDEX FUND

Performance as of 10/31/04

	Cumulative Total Returns
	Inception to 10/31/04
iSHARES INDEX FUND	NAV		MARKET		INDEX
Morningstar Large Core	0.83	%	0.78	%	0.89	%
Morningstar Large Growth	(5.08	)%	(5.23	)%	(5.07	)%
Morningstar Large Value	3.52	%	3.43	%	3.57	%

“Cumulative total returns” represent the total change in value of an investment over the period indicated and is calculated from the inception date of each Fund (6/28/04).

Each Fund’s per share net asset value or “NAV” is the value of one share of such Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of each Fund, and the market return is based on the market price per share of each 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 shares of the Funds are listed for trading, as of the time that the Funds’ NAV is calculated. Since shares of each Fund did not trade in the secondary market until several days after each Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (7/2/04), the NAV of each Fund is used as a proxy for the secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in each Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike each Fund, each Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by each Fund. These expenses negatively impact the performance of each 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 tables 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 each Fund will vary with changes in market conditions. Shares of each Fund may be worth more or less than their original cost when they are redeemed or sold in the market. Each Fund’s past performance is no guarantee of future results.

The iShares Morningstar Large Core Index Fund (the “Core Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Morningstar Large Core Index (the “Core Index”). The Core Index measures the performance of large-capitalization U.S. stocks that have exhibited both “growth” and “value” characteristics without a pronounced bias toward either, as determined by Morningstar’s proprietary index methodology. The Core Fund invests in a representative sample of securities in the Core Index that have a similar investment profile as the entire Core Index. From its inception on June 28, 2004, through October 31, 2004 (the “reporting period”), the Core Fund returned 0.83%, while the Core Index returned 0.89%.

The iShares Morningstar Large Growth Index Fund (the “Growth Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Morningstar Large Growth Index (the “Growth Index”). The Growth Index measures the performance of large-capitalization U.S. stocks that have exhibited above-average “growth” characteristics as determined by Morningstar’s proprietary index methodology. The Growth Fund invests in a representative sample of securities in the Growth Index that have a similar investment profile as the entire Growth Index. For the reporting period, the Growth Fund declined 5.08%, while the Growth Index declined 5.07%.

The iShares Morningstar Large Value Index Fund (the “Value Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Morningstar Large Value Index (the “Value Index”). The Value Index measures the performance of large-capitalization U.S. stocks that have exhibited “value” characteristics as determined by Morningstar’s proprietary index methodology. The Value Fund invests in a representative sample of securities in the Value Index that have a similar investment profile as the entire Value Index. For the reporting period, the Value Fund returned 3.52%, while the Value Index returned 3.57%.

The values of U.S. stocks generally remained unchanged during the reporting period as conflicting influences kept the market in check. On the positive side, corporate profit growth was strong–second-quarter earnings for the companies in the Standard & Poor’s 500 Index grew 25%, marking the fourth consecutive quarter with earnings growth of at least 20% for companies in this index. However, the favorable earnings picture was offset by concerns ranging from moderating economic growth and rising interest rates to record-high oil prices and terrorism.

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE 1

Six of the Core Fund’s ten largest holdings as of October 31, 2004, gained ground for the reporting period. The top performer was home-improvement retailer Home Depot Inc., which reported strong earnings as same-store sales growth surged. Other positive performers included the Core Fund’s two largest holdings, industrial conglomerate General Electric Co. and health care company Johnson & Johnson, each of which benefited from a diversified stable of businesses. Among the declining stocks, insurance giant American International Group Inc. posted the worst results. The other three decliners were soft drink and snack company PepsiCo Inc., consumer products maker Procter & Gamble Co., and industrial conglomerate Tyco International Ltd.

The Value Fund also saw six of its top ten holdings as of October 31, 2004, post positive returns for the reporting period. The best results came from two energy stocks, ChevronTexaco Corp. and Exxon Mobil Corp. (the largest holding in the Value Fund), both of which benefited from strong demand and higher oil prices. Telecommunications provider Verizon Communications Inc. and money center bank Bank of America Corp. also posted solid gains. On the down side, pharmaceutical giant Merck & Co. Inc. fell sharply for the reporting period.

In the Growth Fund, just three of the ten largest holdings as of October 31, 2004, produced gains for the reporting period. Telecommunications equipment maker QUALCOMM Inc. was the best performer, posting strong results as more of the wireless industry adopted the company’s proprietary CDMA technology. The other two positive performers were biotechnology firm Amgen Inc. and discount retailer Wal-Mart Stores Inc. The leading decliner in the Growth Fund for the reporting period was The Coca-Cola Co., which reported disappointing sales growth. Two bellwether technology names–semiconductor manufacturer Intel Corp. and network equipment maker Cisco Systems Inc.–were also among the weakest performers for the reporting period.

2 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance

iSHARES^® MORNINGSTAR MID CORE INDEX FUND

iSHARES^® MORNINGSTAR MID GROWTH INDEX FUND

iSHARES^® MORNINGSTAR MID VALUE INDEX FUND

Performance as of 10/31/04

	Cumulative Total Returns
	Inception to 10/31/04
iSHARES INDEX FUND	NAV		MARKET		INDEX
Morningstar Mid Core	1.25	%	1.21	%	1.38	%
Morningstar Mid Growth	1.62	%	1.52	%	1.73	%
Morningstar Mid Value	4.52	%	4.48	%	4.64	%

“Cumulative total returns” represent the total change in value of an investment over the period indicated and is calculated from the inception date of each Fund (6/28/04).

Each Fund’s per share net asset value or “NAV” is the value of one share of such Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of each Fund, and the market return is based on the market price per share of each 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 shares of the Funds are listed for trading, as of the time that the Funds’ NAV is calculated. Since shares of each Fund did not trade in the secondary market until several days after each Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (7/2/04), the NAV of each Fund is used as a proxy for the secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in each Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike each Fund, each Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by each Fund. These expenses negatively impact the performance of each 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 tables 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 each Fund will vary with changes in market conditions. Shares of each Fund may be worth more or less than their original cost when they are redeemed or sold in the market. Each Fund’s past performance is no guarantee of future results.

The iShares Morningstar Mid Core Index Fund (the “Core Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Morningstar Mid Core Index (the “Core Index”). The Core Index measures the performance of mid-capitalization U.S. stocks that have exhibited both “growth” and “value” characteristics without a pronounced bias toward either, as determined by Morningstar’s proprietary index methodology. The Core Fund invests in a representative sample of securities in the Core Index that have a similar investment profile as the entire Core Index. From its inception on June 28, 2004, through October 31, 2004 (the “reporting period”), the Core Fund returned 1.25%, while the Core Index returned 1.38%.

The iShares Morningstar Mid Growth Index Fund (the “Growth Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Morningstar Mid Growth Index (the “Growth Index”). The Growth Index measures the performance of mid-capitalization U.S. stocks that have exhibited above-average “growth” characteristics as determined by Morningstar’s proprietary index methodology. The Growth Fund invests in a representative sample of securities in the Growth Index that have a similar investment profile as the entire Growth Index. For the reporting period, the Growth Fund returned 1.62%, while the Growth Index returned 1.73%.

The iShares Morningstar Mid Value Index Fund (the “Value Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Morningstar Mid Value Index (the “Value Index”). The Value Index measures the performance of mid-capitalization U.S. stocks that have exhibited “value” characteristics as determined by Morningstar’s proprietary index methodology. The Value Fund invests in a representative sample of securities in the Value Index that have a similar investment profile as the entire Value Index. For the reporting period, the Value Fund returned 4.52%, while the Value Index returned 4.64%.

The values of U.S. stocks generally remained unchanged during the reporting period as conflicting influences kept the market in check. On the positive side, corporate profit growth was strong–second-quarter earnings for the companies in the Standard & Poor’s 500 Index grew 25%, marking the fourth consecutive quarter with earnings growth of at least 20% for companies in this index. However, the favorable earnings picture was offset by concerns ranging from moderating economic growth and rising interest rates to record-high oil prices and terrorism.

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE 3

The Core Fund’s ten largest holdings as of October 31, 2004, posted mixed results, with six gaining and four declining for the reporting period. The best performer was mechanical parts manufacturer Parker Hannifin Corp., which raised its estimate of future company earnings substantially as industrial demand for its products soared. The Core Fund’s largest holding, agricultural products maker Monsanto Co., was another top performer that rallied after increasing its profit outlook. Among the decliners, semiconductor maker Micron Technology Inc. and department store chain J.C. Penney Co. Inc. suffered the largest losses for the reporting period.

The Value Fund saw just one of its top ten holdings as of October 31, 2004, decline for the reporting period–property insurer St. Paul Travelers Companies Inc., the Value Fund’s largest holding. Damage claims from an unusually devastating hurricane season weighed on the company’s earnings. On the positive side, the top performer among the Value Fund’s ten largest holdings was railroad company Norfolk Southern Corp., which benefited from increased traffic and exposure to the energy and industrial sectors of the economy. Oil refiner Valero Energy Corp. and electric utility PPL Corp. also posted solid gains as strong demand and rising energy prices boosted earnings.

In the Growth Fund, eight of the ten largest holdings as of October 31, 2004, gained ground for the reporting period. Computer maker and top holding Apple Computer Inc. produced the best results, benefiting from the success of its digital music division. Other positive performers included offshore oil driller Transocean Inc., which rose as global demand for oil soared, and credit research firm Moody’s Corp., which reported strong growth in its research business. The two decliners among the top ten holdings were pharmacy benefits manager Caremark Rx Inc., and semiconductor equipment maker KLA-Tencor Corp., which was hurt by weak demand for computer chips.

4 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance

iSHARES^® MORNINGSTAR SMALL CORE INDEX FUND

iSHARES^® MORNINGSTAR SMALL GROWTH INDEX FUND

iSHARES^® MORNINGSTAR SMALL VALUE INDEX FUND

Performance as of 10/31/04

	Cumulative Total Returns
	Inception to 10/31/04
iSHARES INDEX FUND	NAV		MARKET		INDEX
Morningstar Small Core	3.43	%	3.50	%	3.49	%
Morningstar Small Growth	(4.03	)%	(4.03	)%	(4.01	)%
Morningstar Small Value	4.03	%	4.11	%	4.13	%

“Cumulative total returns” represent the total change in value of an investment over the period indicated and is calculated from the inception date of each Fund (6/28/04).

Each Fund’s per share net asset value or “NAV” is the value of one share of such Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of each Fund, and the market return is based on the market price per share of each 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 shares of the Funds are listed for trading, as of the time that the Funds’ NAV is calculated. Since shares of each Fund did not trade in the secondary market until several days after each Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (7/2/04), the NAV of each Fund is used as a proxy for the secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in each Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike each Fund, each Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by each Fund. These expenses negatively impact the performance of each 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 tables 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 each Fund will vary with changes in market conditions. Shares of each Fund may be worth more or less than their original cost when they are redeemed or sold in the market. Each Fund’s past performance is no guarantee of future results.

The iShares Morningstar Small Core Index Fund (the “Core Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Morningstar Small Core Index (the “Core Index”). The Core Index measures the performance of small-capitalization U.S. stocks that have exhibited both “growth” and “value” characteristics without a pronounced bias toward either, as determined by Morningstar’s proprietary index methodology. The Core Fund invests in a representative sample of securities in the Core Index that have a similar investment profile as the entire Core Index. From its inception on June 28, 2004, through October 31, 2004 (the “reporting period”), the Core Fund returned 3.43%, while the Core Index returned 3.49%.

The iShares Morningstar Small Growth Index Fund (the “Growth Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Morningstar Small Growth Index (the “Growth Index”). The Growth Index measures the performance of small-capitalization U.S. stocks that have exhibited above-average “growth” characteristics as determined by Morningstar’s proprietary index methodology. The Growth Fund invests in a representative sample of securities in the Growth Index that have a similar investment profile as the entire Growth Index. For the reporting period, the Growth Fund declined 4.03%, while the Growth Index declined 4.01%.

The iShares Morningstar Small Value Index Fund (the “Value Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Morningstar Small Value Index (the “Value Index”). The Value Index measures the performance of small-capitalization U.S. stocks that have exhibited “value” characteristics as determined by Morningstar’s proprietary index methodology. The Value Fund invests in a representative sample of securities in the Value Index that have a similar investment profile as the entire Value Index. For the reporting period, the Value Fund returned 4.03%, while the Value Index returned 4.13%.

The values of U.S. stocks generally remained unchanged during the reporting period as conflicting influences kept the market in check. On the positive side, corporate profit growth was strong–second-quarter earnings for the companies in the Standard & Poor’s 500 Index grew 25%, marking the fourth consecutive quarter with earnings growth of at least 20% for companies in this index. However, the favorable earnings picture was offset by concerns ranging from moderating economic growth and rising interest rates to record-high oil prices and terrorism.

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE 5

Eight of the Core Fund’s ten largest holdings as of October 31, 2004, gained ground for the reporting period. The top performer was regional bank First BanCorp (Puerto Rico), which reported earnings above expectations. Industrial real estate investment trust CenterPoint Properties Trust, which benefited from higher occupancy rates, and regional bank Cathay General Bancorp, which reported solid earnings and raised its dividend, were also positive performers. The two decliners among the Core Fund’s top ten holdings were coal-mining company Arch Coal Inc. and security company The Brink’s Co.

Each of the Value Fund’s top ten holdings as of October 31, 2004, posted positive results for the reporting period. The two best performers–oil exploration company Plains Exploration & Production Co. and utility UGI Corp.–reported better-than-expected earnings thanks largely to strong demand and soaring energy prices. Trucking company Yellow Freight Corp., the Value Fund’s largest holding, benefited from increased freight volumes. Natural gas utility Atmos Energy Corp. and regional bank South Financial Group Inc. posted the lowest returns among the Value Fund’s ten largest holdings for the reporting period.

The Growth Fund saw just one of its ten largest holdings as of October 31, 2004, decline for the reporting period–imaging systems manufacturer FLIR Systems Inc., which reported disappointing earnings. On the positive side, the best performer among the Growth Fund’s top ten holdings was computer services provider CACI International Inc., which posted strong earnings and raised its estimate of future company earnings. Other solid performers in the top ten holdings were semiconductor maker Cree Inc. (the Growth Fund’s largest holding) and regional bank East West Bancorp Inc.

6 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

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 June 28, 2004 (inception date of the Funds) to October 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 (June 28, 2004)+		Ending Account Value (October 31, 2004)		Annualized Expense Ratio		Expenses Paid During Period* (June 28 to October 31, 2004)
Morningstar Large Core
Actual	$	1,000.00	$	1,008.30	0.20	%	$	0.69
Hypothetical (5% return before expenses)		1,000.00		1,016.44	0.20			0.69
Morningstar Large Growth
Actual		1,000.00		949.20	0.25			0.83
Hypothetical (5% return before expenses)		1,000.00		1,016.27	0.25			0.86
Morningstar Large Value
Actual		1,000.00		1,035.20	0.25			0.87
Hypothetical (5% return before expenses)		1,000.00		1,016.27	0.25			0.86
Morningstar Mid Core
Actual		1,000.00		1,012.50	0.25			0.86
Hypothetical (5% return before expenses)		1,000.00		1,016.27	0.25			0.86

SHAREHOLDER EXPENSES 7

Shareholder Expenses (Continued)

iSHARES^® TRUST

iShares Index Fund	Beginning Account Value (June 28, 2004)+		Ending Account Value (October 31, 2004)		Annualized Expense Ratio		Expenses Paid During Period* (June 28 to October 31, 2004)
Morningstar Mid Growth
Actual	$	1,000.00	$	1,016.20	0.30	%	$	1.04
Hypothetical (5% return before expenses)		1,000.00		1,016.10	0.30			1.04
Morningstar Mid Value
Actual		1,000.00		1,045.20	0.30			1.05
Hypothetical (5% return before expenses)		1,000.00		1,016.10	0.30			1.04
Morningstar Small Core
Actual		1,000.00		1,034.30	0.25			0.87
Hypothetical (5% return before expenses)		1,000.00		1,016.27	0.25			0.86
Morningstar Small Growth
Actual		1,000.00		959.70	0.30			1.01
Hypothetical (5% return before expenses)		1,000.00		1,016.10	0.30			1.04
Morningstar Small Value
Actual		1,000.00		1,040.30	0.30			1.05
Hypothetical (5% return before expenses)		1,000.00		1,016.10	0.30			1.04

* 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 (125 days), and divided by the number of days in the year (365 days).

⁺ Inception date of the Funds.

8 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

iSHARES^® MORNINGSTAR LARGE CORE INDEX FUND

October 31, 2004

Security	Shares	Value
COMMON STOCKS – 99.91%
ADVERTISING – 0.47%
Omnicom Group Inc.	1,602	$	126,398
			126,398
AEROSPACE & DEFENSE – 3.78%
Boeing Co. (The)	6,109		304,839
General Dynamics Corp.	1,430		146,032
Lockheed Martin Corp.	3,031		166,978
United Technologies Corp.1	4,381		406,644
			1,024,493
APPAREL – 0.44%
Nike Inc. Class B	1,481		120,420
			120,420
AUTO MANUFACTURERS – 0.38%
PACCAR Inc.	1,485		102,925
			102,925
BANKS – 5.38%
Fifth Third Bancorp	4,068		200,105
M&T Bank Corp.	798		82,194
Mellon Financial Corp.1	3,663		105,861
Northern Trust Corp.	1,765		75,083
State Street Corp.	2,898		130,555
Wells Fargo & Co.	14,477		864,566
			1,458,364
BEVERAGES – 4.09%
Anheuser-Busch Companies Inc.	6,858		342,557
Coca-Cola Enterprises Inc.	2,124		44,413
PepsiCo Inc.	14,534		720,596
			1,107,566
BUILDING MATERIALS – 0.48%
Masco Corp.1	3,800		130,188
			130,188
CHEMICALS – 0.43%
Praxair Inc.	2,782		117,400
			117,400
COMMERCIAL SERVICES – 1.24%
Accenture Ltd.2	3,839		92,942
Cendant Corp.	8,750		180,162
McKesson Corp.	2,352		62,704
			335,808
COMPUTERS – 5.23%
Electronic Data Systems Corp.	4,353		92,588
International Business Machines Corp.	14,754		1,324,171
			1,416,759
COSMETICS & PERSONAL CARE – 7.04%
Colgate-Palmolive Co.	4,546		202,843
Gillette Co. (The)1	7,805		323,751
Kimberly-Clark Corp.	4,250		253,598
Procter & Gamble Co.	22,047		1,128,365
			1,908,557
DIVERSIFIED FINANCIAL SERVICES – 5.48%
American Express Co.1	9,645		511,860
Capital One Financial Corp.	2,052		151,356
Countrywide Financial Corp.	4,820		153,903
Franklin Resources Inc.	1,199		72,683
Goldman Sachs Group Inc. (The)	3,528		347,085
MBNA Corp.	9,710		248,867
			1,485,754
ELECTRONICS – 0.35%
Agilent Technologies Inc.2	3,798		95,178
			95,178
ENVIRONMENTAL CONTROL – 0.53%
Waste Management Inc.	5,004		142,514
			142,514
FOOD – 1.02%
General Mills Inc.	2,563		113,413
Hershey Foods Corp.1	1,466		74,312
Kellogg Co.	2,043		87,849
			275,574
HEALTH CARE - PRODUCTS – 6.47%
Baxter International Inc.	5,262		161,859
Becton, Dickinson & Co.	2,015		105,788
Johnson & Johnson	25,453		1,485,946
			1,753,593
HEALTH CARE - SERVICES – 1.83%
Aetna Inc.	1,314		124,830
Anthem Inc.1,2	1,195		96,078
HCA Inc.1	3,951		145,120
WellPoint Health Networks Inc.2	1,344		131,255
			497,283

SCHEDULES OF INVESTMENTS 9

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR LARGE CORE INDEX FUND

October 31, 2004

Security	Shares	Value
HOUSEHOLD PRODUCTS & WARES – 0.60%
Clorox Co.	1,330	$	72,618
Fortune Brands Inc.	1,232		89,714
			162,332
INSURANCE – 5.97%
AFLAC Inc.	4,340		155,719
American International Group Inc.	19,629		1,191,677
Marsh & McLennan Companies Inc.	4,240		117,278
Progressive Corp. (The)	1,647		154,077
			1,618,751
LEISURE TIME – 0.68%
Carnival Corp.	3,648		184,443
			184,443
LODGING – 0.32%
Marriott International Inc. Class A	1,578		85,985
			85,985
MACHINERY – 1.34%
Caterpillar Inc.	2,934		236,304
Deere & Co.	2,130		127,331
			363,635
MANUFACTURING – 16.27%
General Electric Co.	90,525		3,088,713
Illinois Tool Works Inc.	2,232		205,969
Ingersoll-Rand Co. Class A	1,501		102,728
3M Co.	6,154		477,366
Tyco International Ltd.	17,202		535,842
			4,410,618
MEDIA – 5.27%
Comcast Corp. Class A2	10,770		317,715
Comcast Corp. Class A Special1,2	7,452		216,406
Gannett Co. Inc.	2,332		193,439
McGraw-Hill Companies Inc. (The)	1,638		141,278
Tribune Co.	1,801		77,803
Viacom Inc. Class A1	326		12,082
Viacom Inc. Class B	12,834		468,313
			1,427,036
MINING – 0.89%
Alcoa Inc.	7,446		241,995
			241,995
OFFICE & BUSINESS EQUIPMENT – 0.39%
Xerox Corp.1,2	7,179		106,034
			106,034
OIL & GAS – 1.04%
Apache Corp.	2,808		142,366
Burlington Resources Inc.	3,378		140,187
			282,553
OIL & GAS SERVICES – 0.52%
Halliburton Co.	3,778		139,937
			139,937
PHARMACEUTICALS – 4.07%
Abbott Laboratories	13,398		571,157
Medco Health Solutions Inc.2	2,340		79,349
Wyeth	11,421		452,843
			1,103,349
REAL ESTATE INVESTMENT TRUSTS – 0.41%
Simon Property Group Inc.	1,893		110,400
			110,400
RETAIL – 7.80%
Costco Wholesale Corp.	3,948		189,267
CVS Corp.	3,400		147,764
Gap Inc. (The)	5,622		112,328
Home Depot Inc.1	19,069		783,355
McDonald’s Corp.	10,783		314,324
Target Corp.	7,086		354,442
TJX Companies Inc.	4,305		103,234
Yum! Brands Inc.	2,517		109,490
			2,114,204
SAVINGS & LOANS – 0.57%
Golden West Financial Corp.	1,314		153,633
			153,633
SOFTWARE – 2.80%
Automatic Data Processing Inc.	5,055		219,336
Computer Associates International Inc.	3,999		110,812
Oracle Corp.2	33,797		427,870
			758,018
TELECOMMUNICATIONS – 4.00%
Corning Inc.2	11,924		136,530
Lucent Technologies Inc.1,2	36,875		130,906
Motorola Inc.	20,072		346,443

10 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR LARGE CORE INDEX FUND

October 31, 2004

Security	Shares or Principal		Value
Nextel Communications Inc. Class A2		9,227	$	244,423
Sprint Corp. (FON Group)		10,790		226,051
				1,084,353
TRANSPORTATION – 2.33%
FedEx Corp.		2,568		233,996
United Parcel Service Inc. Class B		5,033		398,513
				632,509
TOTAL COMMON STOCKS (Cost: $26,913,705)				27,078,559
SHORT-TERM INVESTMENTS – 6.23%
COMMERCIAL PAPER – 1.06%
Amsterdam Funding Corp.
1.79%, 11/08/043	$	8,371		8,368
Aspen Funding Corp.
1.85%, 11/01/043		32,031		32,031
Barton Capital Corp.
1.78%, 11/04/043		9,643		9,642
1.79%, 11/08/043		8,760		8,757
CRC Funding LLC
1.78%, 11/09/043		5,580		5,578
Delaware Funding Corp.
1.78%, 11/10/043		6,138		6,136
Edison Asset Securitization
1.45%, 11/09/043		11,161		11,157
1.59%, 12/02/043		11,161		11,145
Eureka Securitization Inc.
1.79%, 11/01/043		4,742		4,742
Ford Credit Auto Receivables
1.85%, 01/14/053		5,580		5,559
Grampian Funding LLC
1.59%, 11/30/043		5,580		5,573
Liberty Street Funding Corp.
1.80%, 11/12/043		2,790		2,789
Nationwide Building Society
1.63%, 12/09/043		9,263		9,247
Polonius Inc.
1.79%, 11/12/043		5,580		5,577
Prudential Funding LLC
1.60%, 12/01/043		5,580		5,573
1.85%, 11/01/043		27,902		27,902
Security	Principal		Value
Ranger Funding Co. LLC
1.79%, 11/01/043	$	6,398	$	6,398
Scaldis Capital LLC
1.78%, 11/08/043		25,112		25,103
Thames Asset Global Securitization No. 1 Inc.
1.81%, 11/12/043		6,528		6,525
UBS Finance (Delaware)
1.11%, 12/17/043		16,741		16,717
1.85%, 11/01/043		55,804		55,804
Windmill Funding Corp.
1.79%, 11/02/043		1,674		1,674
1.79%, 11/03/043		6,696		6,696
1.79%, 11/08/043		8,125		8,122
				286,815
FLOATING RATE NOTES – 1.88%
American Express Credit Corp.
1.95%, 10/26/053		11,161		11,167
Bank of Nova Scotia
1.85%, 09/26/053		2,790		2,789
Beta Finance Inc.
1.78%, 05/04/053,4		6,696		6,696
1.89%, 09/23/053,4		10,045		10,041
1.89%, 09/27/053,4		8,929		8,925
1.91%, 03/15/053,4		5,580		5,582
2.04%, 10/27/053,4		10,603		10,614
Canadian Imperial Bank of Commerce
1.79%, 09/13/053		16,741		16,737
1.90%, 10/31/053		11,161		11,158
CC USA Inc.
1.78%, 05/04/053,4		11,161		11,160
2.06%, 07/29/053,4		11,161		11,158
Den Danske Bank NY
1.79%, 08/12/053		11,161		11,158
1.87%, 08/26/053		11,161		11,158
2.00%, 10/17/053		11,161		11,158
Depfa Bank PLC
1.86%, 09/15/053		11,161		11,161
Dorada Finance Inc.
2.06%, 07/29/053,4		9,263		9,261

SCHEDULES OF INVESTMENTS 11

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR LARGE CORE INDEX FUND

October 31, 2004

Security	Principal		Value
Five Finance Inc.
1.91%, 04/29/053,4	$	8,929	$	8,928
HBOS Treasury Services PLC
1.96%, 04/22/053		11,161		11,161
K2 USA LLC
1.81%, 09/12/053,4		11,161		11,159
1.82%, 06/10/053,4		11,161		11,160
1.89%, 10/20/053,4		11,161		11,161
2.05%, 07/25/053,4		5,580		5,580
Links Finance LLC
1.82%, 04/15/053,4		11,161		11,160
2.12%, 04/25/053		11,161		11,164
National City Bank (Ohio)
1.79%, 08/09/053		11,161		11,158
1.85%, 06/10/053		5,580		5,581
1.86%, 06/23/053		11,161		11,159
Nationwide Building Society
1.96%, 10/28/053,4		18,973		18,976
Norddeutsche Landesbank
2.04%, 07/27/053		11,161		11,158
Northern Rock PLC
1.90%, 10/25/053,4		22,322		22,322
2.02%, 01/13/053,4		10,603		10,603
Permanent Financing PLC
1.81%, 03/10/053		11,161		11,161
1.82%, 12/10/043		5,580		5,580
1.84%, 06/10/053		5,022		5,022
Sigma Finance Inc.
1.84%, 11/15/043		11,161		11,161
1.86%, 08/17/053		5,580		5,581
1.86%, 09/15/053		13,951		13,952
Tango Finance Corp.
1.66%, 05/17/053,4		9,263		9,263
1.70%, 02/25/053,4		6,250		6,250
1.80%, 04/07/053,4		4,096		4,096
1.83%, 01/18/053,4		4,911		4,911
1.84%, 09/15/053,4		9,821		9,820
1.90%, 07/25/053,4		11,161		11,160
Security	Shares or Principal		Value
WhistleJacket Capital LLC
1.83%, 07/15/053,4	$	8,371	$	8,369
1.83%, 09/15/053		8,371		8,370
1.83%, 10/14/053,4		5,580		5,580
1.84%, 06/15/053,4		5,580		5,580
White Pine Finance LLC
1.68%, 05/20/053		5,022		5,022
1.80%, 07/05/053		5,580		5,580
1.82%, 04/15/053,4		8,371		8,370
1.83%, 11/15/043,4		6,696		6,696
1.84%, 06/15/053,4		4,576		4,576
1.89%, 03/29/053		4,799		4,799
1.90%, 08/26/053,4		5,580		5,579
2.02%, 07/11/053		2,790		2,790
Winston Funding Ltd.
2.16%, 01/23/053,4		7,969		7,969
				509,590
MEDIUM-TERM NOTES – 0.13%
CC USA Inc.
1.29%, 04/15/053,4		11,161		11,160
1.51%, 02/15/053,4		7,254		7,258
Dorada Finance Inc.
1.48%, 01/18/053,4		8,371		8,370
K2 USA LLC
1.46%, 01/12/053,4		5,580		5,580
WhistleJacket Capital LLC
1.32%, 02/04/053,4		2,790		2,790
				35,158
MONEY MARKET FUNDS – 1.30%
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares3,5		44,643		44,643
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares3,5		176,827		176,827
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares3,5		122,768		122,768
BlackRock Temp Cash Money Market Fund3		2,501		2,501

12 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR LARGE CORE INDEX FUND

October 31, 2004

Security	Shares or Principal		Value
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares3		4,555	$	4,555
				351,294
REPURCHASE AGREEMENTS – 0.99%
Banc of America Securities LLC
1.86%, 11/01/043,6	$	44,643		44,643
Bank of America N.A.
1.86%, 11/01/043,6		111,608		111,608
Goldman Sachs & Co.
1.86%, 11/01/043,6		111,608		111,608
				267,859
TIME DEPOSITS – 0.72%
Abbey National Treasury Services PLC
1.25%, 01/06/053		11,161		11,161
1.33%, 02/10/053		5,580		5,580
1.39%, 02/02/053		5,580		5,580
1.39%, 04/08/053		7,813		7,812
Bank of New York
1.39%, 11/01/043		11,161		11,161
1.60%, 12/03/043		2,790		2,790
Canadian Imperial Bank of Commerce
1.38%, 11/22/043		2,790		2,790
HBOS Treasury Services PLC
1.24%, 04/01/053		7,143		7,143
Key Bank N.A.
1.81%, 11/01/043		14,509		14,509
National City Bank (Ohio)
1.25%, 01/06/053		11,161		11,161
Nordea Bank PLC
2.11%, 06/07/053		11,161		11,159
Rabobank Nederland NV NY
1.85%, 11/01/043		22,322		22,322
Toronto-Dominion Bank
1.22%, 03/23/053		19,531		19,530
1.34%, 02/10/053		4,464		4,464
1.41%, 11/01/043		8,371		8,371
1.77%, 05/10/053		5,580		5,580
1.90%, 05/11/053		5,580		5,580
World Savings Bank FSB
1.76%, 11/12/043		39,621		39,621
				196,314
Security	Principal		Value
U.S. GOVERNMENT AGENCY NOTES – 0.15%
Federal Home Loan Mortgage Corp.
1.63%, 04/15/053	$	7,813	$	7,824
1.80%, 01/18/053		5,190		5,170
1.80%, 01/19/053		5,580		5,558
2.06%, 05/31/053		5,564		5,497
Federal National Mortgage Association
2.33%, 07/22/053		16,741		16,451
				40,500
TOTAL SHORT-TERM INVESTMENTS (Cost: $1,687,530)				1,687,530
TOTAL INVESTMENTS IN SECURITIES – 106.14% (Cost: $28,601,235)				28,766,089
Other Assets, Less Liabilities – (6.14%)				(1,663,843	)
NET ASSETS – 100.00%			$	27,102,246

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 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.

⁵ The Fund’s investment adviser is an affiliate of the issuer. See Note 2.

⁶ Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.57% to 8.00% and maturity dates ranging from 6/1/14 to 10/1/34.

SECTOR DIVERSIFICATION

Sector	Value		% of Net Assets
Consumer Non-Cyclical	$	7,144,062	26.36	%
Industrial		6,799,135	25.08
Financial		4,826,902	17.81
Communications		2,637,787	9.74
Consumer Cyclical		2,607,977	9.62
Technology		2,280,811	8.42
Energy		422,490	1.56
Basic Materials		359,395	1.32
Short-Term and Other Net Assets		23,687	0.09
TOTAL	$	27,102,246	100.00	%

See notes to financial statements.

SCHEDULES OF INVESTMENTS 13

Schedule of Investments (Unaudited)

iSHARES^® MORNINGSTAR LARGE GROWTH INDEX FUND

October 31, 2004

Security	Shares	Value
COMMON STOCKS – 100.00%
AIRLINES – 0.43%
Southwest Airlines Co.	6,208	$	97,900
			97,900
BEVERAGES – 3.53%
Coca-Cola Co. (The)	19,745		802,832
			802,832
BIOTECHNOLOGY – 4.96%
Amgen Inc.1	11,119		631,559
Biogen Idec Inc.1	2,974		172,968
Chiron Corp.1	960		31,123
Genentech Inc.1	4,105		186,901
Genzyme Corp.1,2	2,005		105,202
			1,127,753
COMMERCIAL SERVICES – 0.83%
Apollo Group Inc. Class A1	1,396		92,136
Paychex Inc.	2,936		96,283
			188,419
COMPUTERS – 4.63%
Dell Inc.1	19,525		684,546
EMC Corp.1	21,261		273,629
Lexmark International Inc.1	1,130		93,914
			1,052,089
COSMETICS & PERSONAL CARE – 0.92%
Avon Products Inc.	4,156		164,370
Estee Lauder Companies Inc. Class A	1,063		45,656
			210,026
DIVERSIFIED FINANCIAL SERVICES – 1.15%
Schwab (Charles) Corp. (The)	9,688		88,645
SLM Corp.	3,831		173,391
			262,036
ENTERTAINMENT – 0.44%
International Game Technology Inc.	3,040		100,442
			100,442
FOOD – 1.15%
Sysco Corp.	5,619		181,325
Wrigley (William Jr.) Co.	1,226		80,180
			261,505
HEALTH CARE - PRODUCTS – 6.37%
Alcon Inc.2	688		48,986
Biomet Inc.	2,056		95,974
Boston Scientific Corp.1	5,300		187,090
Guidant Corp.	2,764		184,138
Medtronic Inc.	10,622		542,890
St. Jude Medical Inc.1	1,556		119,143
Stryker Corp.	2,416		104,105
Zimmer Holdings Inc.1	2,145		166,431
			1,448,757
HEALTH CARE - SERVICES – 1.85%
UnitedHealth Group Inc.	5,812		420,789
			420,789
INTERNET – 5.15%
Amazon.com Inc.1,2	2,592		88,465
eBay Inc.1	4,348		424,408
Google Inc. Class A1,2	196		37,378
IAC/InterActiveCorp1	4,397		95,063
Symantec Corp.1	2,770		157,724
Yahoo! Inc.1	10,135		366,786
			1,169,824
LEISURE TIME – 0.66%
Harley-Davidson Inc.	2,594		149,337
			149,337
MANUFACTURING – 0.54%
Danaher Corp.2	2,250		124,042
			124,042
MEDIA – 8.00%
Clear Channel Communications Inc.	4,727		157,882
Cox Communications Inc. Class A1	1,776		61,165
DIRECTV Group Inc. (The)1,2	8,034		134,730
EchoStar Communications Corp.1	1,900		60,078
Fox Entertainment Group Inc. Class A1	1,520		45,083
Liberty Media Corp. Class A	21,662		193,225
Time Warner Inc.1,2	38,653		643,186
Univision Communications Inc. Class A1	2,212		68,484
Walt Disney Co. (The)	18,025		454,590
			1,818,423

14 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR LARGE GROWTH INDEX FUND

October 31, 2004

Security	Shares		Value
MINING – 0.75%
Newmont Mining Corp.		3,569	$	169,599
				169,599
OIL & GAS SERVICES – 1.99%
Baker Hughes Inc.		2,934		125,663
Schlumberger Ltd.		5,187		326,470
				452,133
PHARMACEUTICALS – 12.85%
Allergan Inc.		1,169		83,654
Cardinal Health Inc.		3,783		176,855
Forest Laboratories Inc.1		3,255		145,173
Gilead Sciences Inc.1		3,785		131,075
Lilly (Eli) & Co.		8,477		465,472
Pfizer Inc.		66,302		1,919,443
				2,921,672
RETAIL – 11.52%
Bed Bath & Beyond Inc.1		2,624		107,033
Best Buy Co. Inc.		2,327		137,805
Kohl’s Corp.1		2,666		135,326
Lowe’s Companies Inc.		6,257		352,144
Staples Inc.		4,373		130,053
Starbucks Corp.1		3,493		184,710
Walgreen Co.		9,000		323,010
Wal-Mart Stores Inc.2		23,154		1,248,464
				2,618,545
SEMICONDUCTORS – 10.46%
Analog Devices Inc.		3,286		132,294
Applied Materials Inc.1		14,887		239,681
Broadcom Corp. Class A1		2,269		61,376
Intel Corp.		56,331		1,253,928
Linear Technology Corp.		2,696		102,124
Maxim Integrated Products Inc.2		2,833		124,624
Texas Instruments Inc.2		15,206		371,787
Xilinx Inc.		3,024		92,534
				2,378,348
SOFTWARE – 14.17%
Adobe Systems Inc.		2,108		118,111
Electronic Arts Inc.1		2,628		118,050
First Data Corp.		7,533		310,962
Intuit Inc.1		1,546		70,127
Security	Shares or Principal		Value
Microsoft Corp.		90,027	$	2,519,856
Veritas Software Corp.1		3,808		83,319
				3,220,425
TELECOMMUNICATIONS – 7.65%
Cisco Systems Inc.1		59,375		1,140,594
QUALCOMM Inc.		14,296		597,716
				1,738,310
TOTAL COMMON STOCKS (Cost: $23,914,166)				22,733,206
SHORT-TERM INVESTMENTS – 7.94%
COMMERCIAL PAPER – 1.35%
Amsterdam Funding Corp.
1.79%, 11/08/043	$	8,963		8,959
Aspen Funding Corp.
1.85%, 11/01/043		34,297		34,297
Barton Capital Corp.
1.78%, 11/04/043		10,325		10,324
1.79%, 11/08/043		9,379		9,376
CRC Funding LLC
1.78%, 11/09/043		5,975		5,973
Delaware Funding Corp.
1.78%, 11/10/043		6,573		6,570
Edison Asset Securitization
1.45%, 11/09/043		11,950		11,946
1.59%, 12/02/043		11,950		11,934
Eureka Securitization Inc.
1.79%, 11/01/043		5,077		5,077
Ford Credit Auto Receivables
1.85%, 01/14/053		5,975		5,952
Grampian Funding LLC
1.59%, 11/30/043		5,975		5,967
Liberty Street Funding Corp.
1.80%, 11/12/043		2,988		2,986
Nationwide Building Society
1.63%, 12/09/043		9,919		9,901
Polonius Inc.
1.79%, 11/12/043		5,975		5,972
Prudential Funding LLC
1.60%, 12/01/043		5,975		5,967
1.85%, 11/01/043		29,875		29,875

SCHEDULES OF INVESTMENTS 15

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR LARGE GROWTH INDEX FUND

October 31, 2004

Security	Principal		Value
Ranger Funding Co. LLC
1.79%, 11/01/043	$	6,851	$	6,851
Scaldis Capital LLC
1.78%, 11/08/043		26,888		26,878
Thames Asset Global Securitization No. 1 Inc.
1.81%, 11/12/043		6,990		6,986
UBS Finance (Delaware)
1.11%, 12/17/043		17,925		17,900
1.85%, 11/01/043		59,750		59,750
Windmill Funding Corp.
1.79%, 11/02/043		1,793		1,792
1.79%, 11/03/043		7,170		7,169
1.79%, 11/08/043		8,700		8,697
				307,099
FLOATING RATE NOTES – 2.40%
American Express Credit Corp.
1.95%, 10/26/053		11,950		11,957
Bank of Nova Scotia
1.85%, 09/26/053		2,988		2,986
Beta Finance Inc.
1.78%, 05/04/053,4		7,170		7,169
1.89%, 09/23/053,4		10,755		10,751
1.89%, 09/27/053,4		9,560		9,557
1.91%, 03/15/053,4		5,975		5,977
2.04%, 10/27/053,4		11,353		11,365
Canadian Imperial Bank of Commerce
1.79%, 09/13/053		17,925		17,920
1.90%, 10/31/053		11,950		11,947
CC USA Inc.
1.78%, 05/04/053,4		11,950		11,949
2.06%, 07/29/053,4		11,950		11,947
Den Danske Bank NY
1.79%, 08/12/053		11,950		11,947
1.87%, 08/26/053		11,950		11,947
2.00%, 10/17/053		11,950		11,947
Depfa Bank PLC
1.86%, 09/15/053		11,950		11,950
Dorada Finance Inc.
2.06%, 07/29/053,4		9,919		9,916
Five Finance Inc.
1.91%, 04/29/053,4		9,560		9,560
HBOS Treasury Services PLC
1.96%, 04/22/053		11,950		11,950
K2 USA LLC
1.81%, 09/12/053,4		11,950		11,948
1.82%, 06/10/053,4		11,950		11,949
1.89%, 10/20/053,4		11,950		11,950
2.05%, 07/25/053,4		5,975		5,974
Links Finance LLC
1.82%, 04/15/053,4		11,950		11,949
2.12%, 04/25/053		11,950		11,954
National City Bank (Ohio)
1.79%, 08/09/053		11,950		11,947
1.85%, 06/10/053		5,975		5,976
1.86%, 06/23/053		11,950		11,948
Nationwide Building Society
1.96%, 10/28/053,4		20,315		20,318
Norddeutsche Landesbank
2.04%, 07/27/053		11,950		11,947
Northern Rock PLC
1.90%, 10/25/053,4		23,900		23,900
2.02%, 01/13/053,4		11,353		11,353
Permanent Financing PLC
1.81%, 03/10/053		11,950		11,950
1.82%, 12/10/043		5,975		5,975
1.84%, 06/10/053		5,378		5,378
Sigma Finance Inc.
1.84%, 11/15/043		11,950		11,950
1.86%, 08/17/053		5,975		5,975
1.86%, 09/15/053		14,938		14,939
Tango Finance Corp.
1.66%, 05/17/053,4		9,919		9,918
1.70%, 02/25/053,4		6,692		6,692
1.80%, 04/07/053,4		4,386		4,385
1.83%, 01/18/053,4		5,258		5,258
1.84%, 09/15/053,4		10,516		10,515
1.90%, 07/25/053,4		11,950		11,950
WhistleJacket Capital LLC
1.83%, 07/15/053,4		8,963		8,961
1.83%, 09/15/053		8,963		8,961
1.83%, 10/14/053,4		5,975		5,974
1.84%, 06/15/053,4		5,975		5,974

16 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR LARGE GROWTH INDEX FUND

October 31, 2004

Security	Shares or Principal		Value
White Pine Finance LLC
1.68%, 05/20/053	$	5,378	$	5,377
1.80%, 07/05/053		5,975		5,974
1.82%, 04/15/053,4		8,963		8,962
1.83%, 11/15/043,4		7,170		7,170
1.84%, 06/15/053,4		4,900		4,900
1.89%, 03/29/053		5,139		5,138
1.90%, 08/26/053,4		5,975		5,974
2.02%, 07/11/053		2,988		2,987
Winston Funding Ltd.
2.16%, 01/23/053,4		8,532		8,532
				545,624
MEDIUM-TERM NOTES – 0.17%
CC USA Inc.
1.29%, 04/15/053,4		11,950		11,950
1.51%, 02/15/053,4		7,768		7,771
Dorada Finance Inc.
1.48%, 01/18/053,4		8,963		8,962
K2 USA LLC
1.46%, 01/12/053,4		5,975		5,975
WhistleJacket Capital LLC
1.32%, 02/04/053,4		2,988		2,987
				37,645
MONEY MARKET FUNDS – 1.65%
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares3,5		47,800		47,800
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares3,5		187,993		187,993
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares3,5		131,451		131,451
BlackRock Temp Cash Money Market Fund3		2,678		2,678
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares3		4,877		4,877
				374,799
Security	Principal		Value
REPURCHASE AGREEMENTS – 1.26%
Banc of America Securities LLC
1.86%, 11/01/043,6	$	47,800	$	47,800
Bank of America N.A.
1.86%, 11/01/043,6		119,501		119,501
Goldman Sachs & Co.
1.86%, 11/01/043,6		119,501		119,501
				286,802
TIME DEPOSITS – 0.92%
Abbey National Treasury Services PLC
1.25%, 01/06/053		11,950		11,950
1.33%, 02/10/053		5,975		5,975
1.39%, 02/02/053		5,975		5,975
1.39%, 04/08/053		8,365		8,365
Bank of New York
1.39%, 11/01/043		11,950		11,950
1.60%, 12/03/043		2,988		2,987
Canadian Imperial Bank of Commerce
1.38%, 11/22/043		2,988		2,988
HBOS Treasury Services PLC
1.24%, 04/01/053		7,648		7,648
Key Bank N.A.
1.81%, 11/01/043		15,535		15,536
National City Bank (Ohio)
1.25%, 01/06/053		11,950		11,950
Nordea Bank PLC
2.11%, 06/07/053		11,950		11,949
Rabobank Nederland NV NY
1.85%, 11/01/043		23,900		23,900
Toronto-Dominion Bank
1.22%, 03/23/053		20,913		20,912
1.34%, 02/10/053		4,780		4,780
1.41%, 11/01/043		8,963		8,963
1.77%, 05/10/053		5,975		5,975
1.90%, 05/11/053		5,975		5,975
World Savings Bank FSB
1.76%, 11/12/043		42,423		42,422
				210,200

SCHEDULES OF INVESTMENTS 17

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR LARGE GROWTH INDEX FUND

October 31, 2004

Security	Principal		Value
U.S. GOVERNMENT AGENCY NOTES – 0.19%
Federal Home Loan Mortgage Corp.
1.63%, 04/15/053	$	8,365	$	8,377
1.80%, 01/18/053		5,557		5,535
1.80%, 01/19/053		5,975		5,951
2.06%, 05/31/053		5,957		5,886
Federal National Mortgage Association
2.33%, 07/22/053		17,925		17,621
				43,370
TOTAL SHORT-TERM INVESTMENTS (Cost: $1,805,539)				1,805,539
TOTAL INVESTMENTS IN SECURITIES – 107.94% (Cost: $25,719,705)				24,538,745
Other Assets, Less Liabilities – (7.94%)				(1,804,680	)
NET ASSETS – 100.00%			$	22,734,065

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 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.

⁵ The Fund’s investment adviser is an affiliate of the issuer. See Note 2.

⁶ Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.57% to 8.00% and maturity dates ranging from 6/1/14 to 10/1/34.

SECTOR DIVERSIFICATION

Sector	Value		% of Net Assets
Consumer Non-Cyclical	$	7,381,753	32.46	%
Technology		6,650,862	29.26
Communications		4,726,557	20.80
Consumer Cyclical		2,966,224	13.05
Energy		452,133	1.99
Financial		262,036	1.15
Basic Materials		169,599	0.75
Industrial		124,042	0.54
Short-Term and Other Net Assets		859	0.00
TOTAL	$	22,734,065	100.00	%

See notes to financial statements.

18 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

iSHARES^® MORNINGSTAR LARGE VALUE INDEX FUND

October 31, 2004

Security	Shares	Value
COMMON STOCKS – 99.83%
AEROSPACE & DEFENSE – 1.16%
Northrop Grumman Corp.	2,942	$	152,248
Raytheon Co.	3,700		134,976
			287,224
AGRICULTURE – 3.30%
Altria Group Inc.	16,857		816,890
			816,890
AUTO MANUFACTURERS – 1.35%
Ford Motor Co1	14,406		187,710
General Motors Corp.1	3,789		146,066
			333,776
AUTO PARTS & EQUIPMENT – 0.36%
Johnson Controls Inc.	1,568		89,925
			89,925
BANKS – 15.00%
Bank of America Corp.	33,412		1,496,523
Bank of New York Co. Inc. (The)	6,354		206,251
BB&T Corp.	4,541		186,680
Comerica Inc.	1,308		80,455
Genworth Financial Inc. Class A	1,176		28,059
KeyCorp	3,352		112,594
National City Corp.	4,759		185,458
PNC Financial Services Group	2,328		121,754
SouthTrust Corp.	2,745		119,600
SunTrust Banks Inc.	2,829		199,105
U.S. Bancorp	15,444		441,853
Wachovia Corp.	10,760		529,500
			3,707,832
CHEMICALS – 3.57%
Air Products & Chemicals Inc.	1,756		93,384
Dow Chemical Co. (The)	7,722		347,027
Du Pont (E.I.) de Nemours and Co.	8,203		351,663
PPG Industries Inc.	1,416		90,270
			882,344
COMPUTERS – 2.20%
Hewlett-Packard Co.	22,505		419,943
Sun Microsystems Inc.2	27,432		124,267
			544,210
DIVERSIFIED FINANCIAL SERVICES – 19.95%
Citigroup Inc.	42,477		1,884,704
Federal Home Loan Mortgage Corp.	5,659		376,889
Federal National Mortgage Association	7,953		557,903
JP Morgan Chase & Co.	29,261		1,129,475
Lehman Brothers Holdings Inc.	2,222		182,537
Merrill Lynch & Co. Inc.	7,077		381,733
Morgan Stanley	8,233		420,624
			4,933,865
ELECTRIC – 6.57%
American Electric Power Co. Inc.	3,264		107,484
Dominion Resources Inc.	2,712		174,436
Duke Energy Corp.1	7,699		188,856
Entergy Corp.	1,857		121,374
Exelon Corp.	5,407		214,225
FirstEnergy Corp.	2,720		112,418
FPL Group Inc.	1,403		96,667
PG&E Corp.2	3,221		103,201
Progress Energy Inc.	2,032		83,922
Public Service Enterprise Group Inc.1	1,923		81,901
Southern Co. (The)1	6,044		190,930
TXU Corp.	2,429		148,703
			1,624,117
ELECTRICAL COMPONENTS & EQUIPMENT – 0.89%
Emerson Electric Co.	3,456		221,357
			221,357
FOOD – 3.01%
Archer-Daniels-Midland Co.	4,896		94,836
Campbell Soup Co.	2,078		55,773
ConAgra Foods Inc.	4,360		115,104
Heinz (H.J.) Co.	2,881		104,724
Kraft Foods Inc.1	2,150		71,616
Kroger Co.2	5,571		84,178
Safeway Inc.2	3,659		66,740
Sara Lee Corp.	6,471		150,645
			743,616
FOREST PRODUCTS & PAPER – 1.08%
International Paper Co.	3,982		153,347
Weyerhaeuser Co.	1,822		114,130
			267,477

SCHEDULES OF INVESTMENTS 19

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR LARGE VALUE INDEX FUND

October 31, 2004

Security	Shares		Value
INSURANCE – 4.80%
ACE Ltd.		2,336	$	88,908
Allstate Corp. (The)		5,677		273,007
Chubb Corp.		1,566		112,956
Hartford Financial Services Group Inc.		2,385		139,475
Loews Corp.		1,035		61,996
MetLife Inc.		3,434		131,694
Principal Financial Group Inc.		2,589		97,761
Prudential Financial Inc.		4,251		197,544
XL Capital Ltd. Class A		1,140		82,650
				1,185,991
MANUFACTURING – 0.88%
Honeywell International Inc.		6,440		216,899
				216,899
OFFICE & BUSINESS EQUIPMENT – 0.34%
Pitney Bowes Inc.		1,911		83,606
				83,606
OIL & GAS – 18.50%
Anadarko Petroleum Corp.		2,063		139,149
ChevronTexaco Corp.		17,581		932,848
ConocoPhillips		5,135		432,932
Devon Energy Corp.		1,876		138,768
Exxon Mobil Corp.		53,716		2,643,902
Marathon Oil Corp.		2,848		108,537
Occidental Petroleum Corp.		3,208		179,103
				4,575,239
PHARMACEUTICALS – 4.71%
Bristol-Myers Squibb Co.		15,988		374,599
Merck & Co. Inc.		18,231		570,813
Schering-Plough Corp.		12,060		218,407
				1,163,819
REAL ESTATE INVESTMENT TRUSTS – 0.38%
Equity Office Properties Trust		3,328		93,583
				93,583
RETAIL – 0.59%
Limited Brands Inc.		3,602		89,258
Sears, Roebuck and Co.		1,613		56,455
				145,713
Security	Shares or Principal		Value
SAVINGS & LOANS – 1.12%
Washington Mutual Inc.		7,149	$	276,738
				276,738
TELECOMMUNICATIONS – 9.01%
Alltel Corp.		2,524		138,643
AT&T Corp.		6,463		110,582
BellSouth Corp.		15,047		401,303
SBC Communications Inc.		27,211		687,350
Verizon Communications Inc.		22,744		889,290
				2,227,168
TRANSPORTATION – 1.06%
Burlington Northern Santa Fe Corp.		3,062		128,022
Union Pacific Corp.		2,122		133,622
				261,644
TOTAL COMMON STOCKS (Cost: $24,060,181)				24,683,033
SHORT-TERM INVESTMENTS – 1.66%
COMMERCIAL PAPER – 0.27%
Amsterdam Funding Corp.
1.79%, 11/08/043	$	1,973		1,972
Aspen Funding Corp.
1.85%, 11/01/043		7,548		7,548
Barton Capital Corp.
1.78%, 11/04/043		2,272		2,272
1.79%, 11/08/043		2,064		2,063
CRC Funding LLC
1.78%, 11/09/043		1,315		1,314
Delaware Funding Corp.
1.78%, 11/10/043		1,447		1,446
Edison Asset Securitization
1.45%, 11/09/043		2,630		2,629
1.59%, 12/02/043		2,630		2,627
Eureka Securitization Inc.
1.79%, 11/01/043		1,117		1,117
Ford Credit Auto Receivables
1.85%, 01/14/053		1,315		1,311
Grampian Funding LLC
1.59%, 11/30/043		1,315		1,313

20 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR LARGE VALUE INDEX FUND

October 31, 2004

Security	Principal		Value
Liberty Street Funding Corp.
1.80%, 11/12/043	$	658	$	657
Nationwide Building Society
1.63%, 12/09/043		2,183		2,179
Polonius Inc.
1.79%, 11/12/043		1,315		1,314
Prudential Funding LLC
1.60%, 12/01/043		1,315		1,313
1.85%, 11/01/043		6,575		6,575
Ranger Funding Co. LLC
1.79%, 11/01/043		1,508		1,508
Scaldis Capital LLC
1.78%, 11/08/043		5,918		5,916
Thames Asset Global Securitization No. 1 Inc.
1.81%, 11/12/043		1,538		1,538
UBS Finance (Delaware)
1.11%, 12/17/043		3,945		3,939
1.85%, 11/01/043		13,150		13,150
Windmill Funding Corp.
1.79%, 11/02/043		395		394
1.79%, 11/03/043		1,578		1,578
1.79%, 11/08/043		1,915		1,914
				67,587
FLOATING RATE NOTES – 0.49%
American Express Credit Corp.
1.95%, 10/26/053		2,630		2,632
Bank of Nova Scotia
1.85%, 09/26/053		658		657
Beta Finance Inc.
1.78%, 05/04/053,4		1,578		1,578
1.89%, 09/23/053,4		2,367		2,366
1.89%, 09/27/053,4		2,104		2,103
1.91%, 03/15/053,4		1,315		1,315
2.04%, 10/27/053,4		2,499		2,501
Canadian Imperial Bank of Commerce
1.79%, 09/13/053		3,945		3,944
1.90%, 10/31/053		2,630		2,629
CC USA Inc.
1.78%, 05/04/053,4		2,630		2,630
2.06%, 07/29/053,4		2,630		2,629
Den Danske Bank NY
1.79%, 08/12/053		2,630		2,629
1.87%, 08/26/053		2,630		2,629
2.00%, 10/17/053		2,630		2,629
Depfa Bank PLC
1.86%, 09/15/053		2,630		2,631
Dorada Finance Inc.
2.06%, 07/29/053,4		2,183		2,182
Five Finance Inc.
1.91%, 04/29/053,4		2,104		2,104
HBOS Treasury Services PLC
1.96%, 04/22/053		2,630		2,631
K2 USA LLC
1.81%, 09/12/053,4		2,630		2,630
1.82%, 06/10/053,4		2,630		2,630
1.89%, 10/20/053,4		2,630		2,630
2.05%, 07/25/053,4		1,315		1,315
Links Finance LLC
1.82%, 04/15/053,4		2,630		2,630
2.12%, 04/25/053		2,630		2,631
National City Bank (Ohio)
1.79%, 08/09/053		2,630		2,630
1.85%, 06/10/053		1,315		1,315
1.86%, 06/23/053		2,630		2,630
Nationwide Building Society
1.96%, 10/28/053,4		4,471		4,472
Norddeutsche Landesbank
2.04%, 07/27/053		2,630		2,629
Northern Rock PLC
1.90%, 10/25/053,4		5,260		5,260
2.02%, 01/13/053,4		2,499		2,499
Permanent Financing PLC
1.81%, 03/10/053		2,630		2,631
1.82%, 12/10/043		1,315		1,316
1.84%, 06/10/053		1,184		1,184
Sigma Finance Inc.
1.84%, 11/15/043		2,630		2,631
1.86%, 08/17/053		1,315		1,315
1.86%, 09/15/053		3,288		3,288

SCHEDULES OF INVESTMENTS 21

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR LARGE VALUE INDEX FUND

October 31, 2004

Security	Shares or Principal		Value
Tango Finance Corp.
1.66%, 05/17/053,4	$	2,183	$	2,183
1.70%, 02/25/053,4		1,473		1,473
1.80%, 04/07/053,4		965		965
1.83%, 01/18/053,4		1,157		1,157
1.84%, 09/15/053,4		2,314		2,314
1.90%, 07/25/053,4		2,630		2,630
WhistleJacket Capital LLC
1.83%, 07/15/053,4		1,973		1,972
1.83%, 09/15/053		1,973		1,972
1.83%, 10/14/053,4		1,315		1,315
1.84%, 06/15/053,4		1,315		1,315
White Pine Finance LLC
1.68%, 05/20/053		1,184		1,183
1.80%, 07/05/053		1,315		1,315
1.82%, 04/15/053,4		1,973		1,972
1.83%, 11/15/043,4		1,578		1,579
1.84%, 06/15/053,4		1,078		1,079
1.89%, 03/29/053		1,131		1,131
1.90%, 08/26/053,4		1,315		1,315
2.02%, 07/11/053		658		657
Winston Funding Ltd.
2.16%, 01/23/053,4		1,878		1,878
				120,090
MEDIUM-TERM NOTES – 0.03%
CC USA Inc.
1.29%, 04/15/053,4		2,630		2,630
1.51%, 02/15/053,4		1,710		1,710
Dorada Finance Inc.
1.48%, 01/18/053,4		1,973		1,972
K2 USA LLC
1.46%, 01/12/053,4		1,315		1,315
WhistleJacket Capital LLC
1.32%, 02/04/053,4		658		657
				8,284
MONEY MARKET FUNDS – 0.39%
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares3,5		10,520		10,520
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares3,5		55,277		55,277
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares3,5		28,930		28,930
BlackRock Temp Cash Money Market Fund3		589		589
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares3		1,073		1,073
				96,389
REPURCHASE AGREEMENTS – 0.25%
Banc of America Securities LLC
1.86%, 11/01/043,6		10,520		10,520
Bank of America N.A.
1.86%, 11/01/043,6		26,300		26,300
Goldman Sachs & Co.
1.86%, 11/01/043,6		26,300		26,300
				63,120
TIME DEPOSITS – 0.19%
Abbey National Treasury Services PLC
1.25%, 01/06/053		2,630		2,631
1.33%, 02/10/053		1,315		1,315
1.39%, 02/02/053		1,315		1,315
1.39%, 04/08/053		1,841		1,841
Bank of New York
1.39%, 11/01/043		2,630		2,631
1.60%, 12/03/043		658		657
Canadian Imperial Bank of Commerce
1.38%, 11/22/043		658		658
HBOS Treasury Services PLC
1.24%, 04/01/053		1,683		1,683
Key Bank N.A.
1.81%, 11/01/043		3,419		3,419
National City Bank (Ohio)
1.25%, 01/06/053		2,630		2,630
Nordea Bank PLC
2.11%, 06/07/053		2,630		2,630
Rabobank Nederland NV NY
1.85%, 11/01/043		5,260		5,260

22 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR LARGE VALUE INDEX FUND

October 31, 2004

Security	Principal		Value
Toronto-Dominion Bank
1.22%, 03/23/053	$	4,603	$	4,602
1.34%, 02/10/053		1,052		1,052
1.41%, 11/01/043		1,973		1,973
1.77%, 05/10/053		1,315		1,315
1.90%, 05/11/053		1,315		1,315
World Savings Bank FSB
1.76%, 11/12/043		9,337		9,329
				46,256
U.S. GOVERNMENT AGENCY NOTES – 0.04%
Federal Home Loan Mortgage Corp.
1.63%, 04/15/053		1,841		1,844
1.80%, 01/18/053		1,223		1,218
1.80%, 01/19/053		1,315		1,310
2.06%, 05/31/053		1,311		1,296
Federal National Mortgage Association
2.33%, 07/22/053		3,945		3,879
				9,547
TOTAL SHORT-TERM INVESTMENTS (Cost: $411,273)				411,273
TOTAL INVESTMENTS IN SECURITIES – 101.49% (Cost: $24,471,454)				25,094,306
Other Assets, Less Liabilities – (1.49%)				(367,897	)
NET ASSETS – 100.00%			$	24,726,409

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 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.

⁵ The Fund’s investment adviser is an affiliate of the issuer. See Note 2.

⁶ Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.57% to 8.00% and maturity dates ranging from 6/1/14 to 10/1/34.

SECTOR DIVERSIFICATION

Sector	Value		% of Net Assets
Financial	$	10,198,009	41.25	%
Energy		4,575,239	18.50
Consumer Non-Cyclical		2,724,325	11.02
Communications		2,227,168	9.01
Utilities		1,624,117	6.57
Basic Materials		1,149,821	4.65
Industrial		987,124	3.99
Technology		627,816	2.54
Consumer Cyclical		569,414	2.30
Short-Term and Other Net Assets		43,376	0.17
TOTAL	$	24,726,409	100.00	%

See notes to financial statements.

SCHEDULES OF INVESTMENTS 23

Schedule of Investments (Unaudited)

iSHARES^® MORNINGSTAR MID CORE INDEX FUND

October 31, 2004

Security	Shares	Value
COMMON STOCKS – 99.96%
ADVERTISING – 0.76%
Harte-Hanks Inc.1	905	$	23,295
Interpublic Group of Companies Inc.2	7,474		91,631
			114,926
AEROSPACE & DEFENSE – 1.58%
Alliant Techsystems Inc.2	669		38,461
Goodrich (B.F.) Co.	2,065		63,664
Rockwell Collins Inc.	2,862		101,515
United Defense Industries Inc.2	863		34,641
			238,281
AGRICULTURE – 1.33%
Monsanto Co.	4,675		199,856
			199,856
APPAREL – 1.13%
Liz Claiborne Inc.1	1,892		77,345
Polo Ralph Lauren Corp.	1,030		38,038
Reebok International Ltd.1	822		30,414
Timberland Co. Class A2	404		24,806
			170,603
AUTO PARTS & EQUIPMENT – 0.30%
BorgWarner Inc.	990		45,916
			45,916
BANKS – 5.40%
Bank of Hawaii Corp.	935		44,646
BOK Financial Corp.2	375		17,066
City National Corp.	808		55,671
Cullen/Frost Bankers Inc.	917		44,933
International Bancshares Corp.	705		26,085
Marshall & Ilsley Corp.	3,636		152,603
Popular Inc.	4,300		110,596
Synovus Financial Corp.	4,543		123,524
TCF Financial Corp.	2,340		73,757
W Holding Co. Inc.1	1,415		28,286
Westamerica Bancorp	565		32,312
Zions Bancorporation	1,574		104,152
			813,631
BEVERAGES – 1.18%
Brown-Forman Corp. Class B	710		31,879
Constellation Brands Inc.2	1,672		65,593
Pepsi Bottling Group Inc.	2,857		80,110
			177,582
BUILDING MATERIALS – 1.50%
American Standard Companies Inc.2	3,174		116,073
Florida Rock Industries Inc.	648		33,469
Vulcan Materials Co.	1,521		75,715
			225,257
CHEMICALS – 2.16%
Airgas Inc.	1,118		27,503
Cabot Corp.	1,092		37,215
International Flavors & Fragrances Inc.	1,412		55,139
Rohm & Haas Co.	2,537		107,543
Sigma-Aldrich Corp.	1,038		57,754
Valspar Corp. (The)	845		39,428
			324,582
COAL – 1.09%
CONSOL Energy Inc.	1,597		56,534
Massey Energy Co.	1,347		36,275
Peabody Energy Corp.1	1,127		71,880
			164,689
COMMERCIAL SERVICES – 2.25%
ADESA Inc.2	1,695		34,154
ARAMARK Corp. Class B	1,925		43,409
BearingPoint Inc.2	3,031		26,370
Block (H & R) Inc.1	2,714		129,051
Equifax Inc.	2,460		64,329
Rent-A-Center Inc.2	1,406		33,730
Viad Corp.	391		8,418
			339,461
COMPUTERS – 2.51%
Cadence Design Systems Inc.2	4,855		60,396
Diebold Inc.	1,273		60,913
DST Systems Inc.2	1,191		53,416
Maxtor Corp.2	4,390		12,994
Reynolds & Reynolds Co. (The) Class A	1,150		28,301
Seagate Technology	3,717		46,983
Storage Technology Corp.2	1,977		53,419
Unisys Corp.2	5,822		61,830
			378,252

24 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR MID CORE INDEX FUND

October 31, 2004

Security	Shares	Value
COSMETICS & PERSONAL CARE – 0.43%
Alberto-Culver Co.	1,450	$	65,047
			65,047
DISTRIBUTION & WHOLESALE – 1.29%
Grainger (W.W.) Inc.	1,431		83,842
Hughes Supply Inc.	1,090		30,967
Ingram Micro Inc. Class A2	2,225		38,381
Tech Data Corp.2	1,030		41,602
			194,792
DIVERSIFIED FINANCIAL SERVICES – 3.92%
AmeriCredit Corp.1,2	2,782		53,971
E*TRADE Financial Corp.2	6,441		83,089
Federated Investors Inc. Class B	1,708		49,515
Friedman, Billings, Ramsey Group Inc. Class A1	2,530		43,364
IndyMac Bancorp Inc.	1,088		35,099
Instinet Group Inc.2	2,273		10,910
Janus Capital Group Inc.	4,228		64,477
Jefferies Group Inc.	875		35,114
Nuveen Investments Inc. Class A	310		9,796
Raymond James Financial Inc.	1,055		27,535
T. Rowe Price Group Inc.	2,240		124,925
Waddell & Reed Financial Inc. Class A	1,465		30,780
Westcorp Inc.	425		16,966
WFS Financial Inc.	122		5,375
			590,916
ELECTRIC – 0.64%
Allegheny Energy Inc.1,2	2,255		41,289
Reliant Energy Inc.2	5,304		54,525
			95,814
ELECTRICAL COMPONENTS & EQUIPMENT – 1.39%
American Power Conversion Corp.	3,335		64,299
AMETEK Inc.	1,215		39,998
Energizer Holdings Inc.2	1,368		63,516
Hubbell Inc. Class B	910		41,605
			209,418
ELECTRONICS – 3.88%
Applera Corp. - Applied Biosystems Group	3,544		67,620
Avnet Inc.2	2,140		36,294
AVX Corp.1	920		11,040
Fisher Scientific International Inc.2	2,023		116,039
Mettler Toledo International Inc.1,2	745		35,685
Parker Hannifin Corp.	2,106		148,747
PerkinElmer Inc.	2,240		46,010
Solectron Corp.2	16,908		88,260
Vishay Intertechnology Inc.2	2,700		34,911
			584,606
ENTERTAINMENT – 0.35%
International Speedway Corp. Class A	477		22,438
Metro-Goldwyn-Mayer Inc.	1,390		16,430
Regal Entertainment Group Class A1	678		13,499
			52,367
ENVIRONMENTAL CONTROL – 0.72%
Allied Waste Industries Inc.2	4,484		36,589
Republic Services Inc.	2,354		72,503
			109,092
FOOD – 1.94%
Dean Foods Co.2	2,774		82,804
Hormel Foods Corp.	1,324		37,218
McCormick & Co. Inc. NVS	2,166		76,741
Smithfield Foods Inc.2	1,552		37,605
Smucker (J.M.) Co. (The)	1,030		45,835
Tootsie Roll Industries Inc.1	395		11,976
			292,179
FOREST PRODUCTS & PAPER – 0.74%
MeadWestvaco Corp.	3,552		111,995
			111,995
HEALTH CARE - PRODUCTS – 1.39%
Bausch & Lomb Inc.1	927		56,510
Beckman Coulter Inc.	1,088		64,736
Edwards Lifesciences Corp.2	1,055		36,060
Hillenbrand Industries Inc.	1,031		51,323
			208,629
HEALTH CARE - SERVICES – 1.79%
Coventry Health Care Inc.2	1,316		53,824
Humana Inc.2	2,833		54,252
Manor Care Inc.	1,580		51,729
Triad Hospitals Inc.2	1,366		45,119

SCHEDULES OF INVESTMENTS 25

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR MID CORE INDEX FUND

October 31, 2004

Security	Shares	Value
Universal Health Services Inc. Class B	970	$	40,313
WellChoice Inc.2	569		23,761
			268,998
HOME BUILDERS – 4.42%
Centex Corp.1	2,177		113,073
D.R. Horton Inc.	3,865		115,950
Hovnanian Enterprises Inc. Class A2	605		22,712
Lennar Corp. Class A1	2,172		97,697
Lennar Corp. Class B	200		8,256
M.D.C. Holdings Inc.	420		32,235
NVR Inc.2	103		64,581
Pulte Homes Inc.	1,843		101,144
Ryland Group Inc.	420		40,064
Standard-Pacific Corp.	541		30,377
Toll Brothers Inc.1,2	844		39,119
			665,208
HOME FURNISHINGS – 0.63%
Leggett & Platt Inc.	3,376		94,967
			94,967
HOUSEHOLD PRODUCTS & WARES – 0.86%
Avery Dennison Corp.	1,719		104,584
Scotts Co. (The) Class A2	390		25,046
			129,630
INSURANCE – 7.71%
Alleghany Corp.2	87		25,134
Ambac Financial Group Inc.	1,920		149,875
Axis Capital Holdings Ltd.	2,138		53,578
Cincinnati Financial Corp.	2,764		115,397
Endurance Specialty Holdings Ltd.	792		26,255
Erie Indemnity Co. Class A	522		26,163
Everest Re Group Ltd.	985		78,179
Gallagher (Arthur J.) & Co.	1,631		45,831
HCC Insurance Holdings Inc.	1,153		34,244
Markel Corp.2	162		51,516
MBIA Inc.1	2,523		145,981
Mercury General Corp.	465		23,915
MGIC Investment Corp.	1,733		111,449
PMI Group Inc. (The)	1,706		66,227
Radian Group Inc.	1,646		78,893
Transatlantic Holdings Inc.	469		27,319
Unitrin Inc.	790		34,112
White Mountains Insurance Group Ltd.1	130		66,326
			1,160,394
INTERNET – 0.48%
Check Point Software Technologies Ltd.1,2	3,195		72,274
			72,274
LEISURE TIME – 1.72%
Brunswick Corp.	1,679		78,779
Polaris Industries Inc.1	770		45,699
Royal Caribbean Cruises Ltd.	1,763		82,156
Sabre Holdings Corp.	2,407		51,775
			258,409
LODGING – 3.41%
Caesars Entertainment Inc.2	4,731		84,685
Harrah’s Entertainment Inc.	1,970		115,284
Mandalay Resort Group	1,197		82,354
MGM Mirage2	1,039		55,898
Starwood Hotels & Resorts Worldwide Inc.	3,669		175,121
			513,342
MACHINERY – 1.10%
Graco Inc.	1,233		42,415
Rockwell Automation Inc.	2,941		122,610
			165,025
MANUFACTURING – 2.95%
Carlisle Companies Inc.	553		32,146
Crane Co.	1,055		29,403
Dover Corp.	3,578		140,508
ITT Industries Inc.	1,635		132,664
Pall Corp.	2,219		57,383
SPX Corp.1	1,353		51,888
			443,992
MEDIA – 3.36%
Belo (A.H.) Corp.	1,755		40,804
Cablevision Systems Corp.1,2	3,621		74,520
Gemstar-TV Guide International Inc.1,2	4,446		25,564
Hearst-Argyle Television Inc.	475		12,378
Hollinger International Inc.	815		14,548
Knight Ridder Inc.	1,405		96,285
Lee Enterprises Inc.	654		30,293

26 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR MID CORE INDEX FUND

October 31, 2004

Security	Shares	Value
McClatchy Co. (The) Class A1	355	$	24,672
Meredith Corp.	720		35,280
New York Times Co. Class A	2,579		103,289
UnitedGlobalCom Inc. Class A2	6,475		48,433
			506,066
METAL FABRICATE & HARDWARE – 0.69%
Precision Castparts Corp.	1,152		69,120
Timken Co. (The)	1,456		34,944
			104,064
MINING – 0.07%
Southern Peru Copper Corp.1	250		10,795
			10,795
OFFICE FURNISHINGS – 0.42%
Herman Miller Inc.	1,267		29,268
HNI Corp.	840		33,936
			63,204
OIL & GAS – 2.04%
Newfield Exploration Co.2	1,077		62,681
Noble Energy Inc.	1,031		59,798
Pioneer Natural Resources Co.	2,559		82,912
Pogo Producing Co.	1,034		47,409
Premcor Inc.2	1,391		54,305
			307,105
OIL & GAS SERVICES – 0.42%
FMC Technologies Inc.2	1,120		33,858
Tidewater Inc.	940		29,074
			62,932
PACKAGING & CONTAINERS – 2.09%
Ball Corp.	1,852		73,802
Packaging Corp. of America	1,090		23,904
Pactiv Corp.2	2,791		66,119
Sealed Air Corp.2	1,484		73,517
Smurfit-Stone Container Corp.1	4,459		77,408
			314,750
PHARMACEUTICALS – 1.63%
AmerisourceBergen Corp.	1,983		109,144
King Pharmaceuticals Inc.2	4,296		46,869
Valeant Pharmaceuticals International1	1,485		35,640
Watson Pharmaceuticals Inc.2	1,918		53,762
			245,415
PIPELINES – 2.08%
Equitable Resources Inc.	1,042		57,623
Kinder Morgan Inc.	1,714		110,330
Western Gas Resources Inc.	1,054		30,872
Williams Companies Inc.	9,186		114,917
			313,742
REAL ESTATE INVESTMENT TRUSTS – 5.43%
Archstone-Smith Trust	3,445		115,580
Catellus Development Corp.	1,536		44,298
Federal Realty Investment Trust1	915		43,417
General Growth Properties Inc.	3,868		127,605
General Growth Properties Inc. Warrants (Expiring 11/9/04)1,3	387		—
Mills Corp.1	953		52,844
Pan Pacific Retail Properties Inc.	715		40,505
Public Storage Inc.	1,554		81,196
Regency Centers Corp.1	1,082		52,867
Rouse Co. (The)	1,812		120,860
United Dominion Realty Trust Inc.	2,276		47,978
Ventas Inc.	1,490		40,081
Weingarten Realty Investors	1,413		51,094
			818,325
RETAIL – 7.22%
Abercrombie & Fitch Co. Class A	1,665		65,235
American Eagle Outfitters Inc.	914		37,364
AnnTaylor Stores Corp.2	1,225		27,514
Barnes & Noble Inc.2	980		32,605
Big Lots Inc.2	2,052		25,424
BJ’s Wholesale Club Inc.1,2	1,240		35,997
Brinker International Inc.2	1,713		55,330
CBRL Group Inc.	865		31,365
Circuit City Stores Inc.	3,354		54,503
Darden Restaurants Inc.	2,591		63,480
Foot Locker Inc.	2,583		63,025
Kmart Holding Corp.2	658		60,562
Nordstrom Inc.	1,852		79,969
Outback Steakhouse Inc.1	1,309		51,823
Penney (J.C.) Co. Inc. (Holding Co.)	4,968		171,843
Pier 1 Imports Inc.1	1,419		25,471
RadioShack Corp.	2,848		85,241
Regis Corp.	785		33,598

SCHEDULES OF INVESTMENTS 27

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR MID CORE INDEX FUND

October 31, 2004

Security	Shares		Value
7-Eleven Inc.2		545	$	11,483
Talbots Inc. (The)		420		11,084
Wendy’s International Inc.		1,907		63,637
				1,086,553
SAVINGS & LOANS – 1.36%
Capitol Federal Financial1		375		12,743
Independence Community Bank Corp.		1,396		52,531
New York Community Bancorp Inc.1		4,223		77,534
People’s Bank		1,657		62,121
				204,929
SEMICONDUCTORS – 2.55%
Advanced Micro Devices Inc.1,2		6,241		104,974
Agere Systems Inc. Class A2		14,636		17,710
Agere Systems Inc. Class B2		16,115		18,532
Cypress Semiconductor Corp.2		2,237		23,556
LSI Logic Corp.2		6,751		30,717
Micron Technology Inc.2		10,731		130,704
Teradyne Inc.2		3,450		57,132
				383,325
SOFTWARE – 1.38%
BMC Software Inc.2		3,917		74,110
Compuware Corp.2		6,145		35,580
Dun & Bradstreet Corp.2		1,248		70,587
Sybase Inc.2		1,712		27,101
				207,378
TELECOMMUNICATIONS – 4.39%
ADC Telecommunications Inc.2		14,330		31,669
American Tower Corp. Class A1,2		3,939		67,711
Avaya Inc.2		7,353		105,883
CIENA Corp.2		10,030		24,774
Citizens Communications Co.		5,118		68,581
NII Holdings Inc. Class B1,2		1,037		45,908
NTL Inc.2		1,233		82,007
Scientific-Atlanta Inc.		2,679		73,378
Telephone & Data Systems Inc.		901		67,485
Tellabs Inc.1,2		6,649		53,192
Western Wireless Corp. Class A2		1,363		39,718
				660,306
TEXTILES – 0.53%
Mohawk Industries Inc.2		946		80,486
				80,486
Security	Shares or Principal		Value
TOYS, GAMES & HOBBIES – 0.85%
Mattel Inc.		7,282	$	127,508
				127,508
TRANSPORTATION – 0.26%
CNF Inc.		906		39,665
				39,665
WATER – 0.24%
Aqua America Inc.1		1,642		35,894
				35,894
TOTAL COMMON STOCKS (Cost: $14,818,903)				15,052,572
SHORT-TERM INVESTMENTS – 7.44%
COMMERCIAL PAPER – 1.27%
Amsterdam Funding Corp.
1.79%, 11/08/044	$	5,564		5,562
Aspen Funding Corp.
1.85%, 11/01/044		21,290		21,290
Barton Capital Corp.
1.78%, 11/04/044		6,410		6,409
1.79%, 11/08/044		5,822		5,820
CRC Funding LLC
1.78%, 11/09/044		3,709		3,708
Delaware Funding Corp.
1.78%, 11/10/044		4,080		4,078
Edison Asset Securitization
1.45%, 11/09/044		7,418		7,416
1.59%, 12/02/044		7,418		7,408
Eureka Securitization Inc.
1.79%, 11/01/044		3,152		3,152
Ford Credit Auto Receivables
1.85%, 01/14/054		3,709		3,695
Grampian Funding LLC
1.59%, 11/30/044		3,709		3,704
Liberty Street Funding Corp.
1.80%, 11/12/044		1,855		1,854
Nationwide Building Society
1.63%, 12/09/044		6,157		6,147
Polonius Inc.
1.79%, 11/12/044		3,709		3,707

28 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR MID CORE INDEX FUND

October 31, 2004

Security	Principal		Value
Prudential Funding LLC
1.60%, 12/01/044	$	3,709	$	3,704
1.85%, 11/01/044		18,546		18,546
Ranger Funding Co. LLC
1.79%, 11/01/044		4,253		4,253
Scaldis Capital LLC
1.78%, 11/08/044		16,691		16,685
Thames Asset Global Securitization No. 1 Inc.
1.81%, 11/12/044		4,339		4,337
UBS Finance (Delaware)
1.11%, 12/17/044		11,127		11,112
1.85%, 11/01/044		37,091		37,091
Windmill Funding Corp.
1.79%, 11/02/044		1,113		1,113
1.79%, 11/03/044		4,451		4,451
1.79%, 11/08/044		5,400		5,399
				190,641
FLOATING RATE NOTES – 2.25%
American Express Credit Corp.
1.95%, 10/26/054		7,418		7,422
Bank of Nova Scotia
1.85%, 09/26/054		1,855		1,854
Beta Finance Inc.
1.78%, 05/04/054,5		4,451		4,450
1.89%, 09/23/054,5		6,676		6,674
1.89%, 09/27/054,5		5,935		5,932
1.91%, 03/15/054,5		3,709		3,710
2.04%, 10/27/054,5		7,047		7,055
Canadian Imperial Bank of Commerce
1.79%, 09/13/054		11,127		11,124
1.90%, 10/31/054		7,418		7,416
CC USA Inc.
1.78%, 05/04/054,5		7,418		7,417
2.06%, 07/29/054,5		7,418		7,417
Den Danske Bank NY
1.79%, 08/12/054		7,418		7,417
1.87%, 08/26/054		7,418		7,416
2.00%, 10/17/054		7,418		7,416
Depfa Bank PLC
1.86%, 09/15/054		7,418		7,418
Dorada Finance Inc.
2.06%, 07/29/054,5		6,157		6,156
Five Finance Inc.
1.91%, 04/29/054,5		5,935		5,935
HBOS Treasury Services PLC
1.96%, 04/22/054		7,418		7,418
K2 USA LLC
1.81%, 09/12/054,5		7,418		7,417
1.82%, 06/10/054,5		7,418		7,418
1.89%, 10/20/054,5		7,418		7,418
2.05%, 07/25/054,5		3,709		3,709
Links Finance LLC
1.82%, 04/15/054,5		7,418		7,418
2.12%, 04/25/054		7,418		7,421
National City Bank (Ohio)
1.79%, 08/09/054		7,418		7,417
1.85%, 06/10/054		3,709		3,710
1.86%, 06/23/054		7,418		7,417
Nationwide Building Society
1.96%, 10/28/054,5		12,611		12,613
Norddeutsche Landesbank
2.04%, 07/27/054		7,418		7,416
Northern Rock PLC
1.90%, 10/25/054,5		14,836		14,836
2.02%, 01/13/054,5		7,047		7,047
Permanent Financing PLC
1.81%, 03/10/054		7,418		7,418
1.82%, 12/10/044		3,709		3,709
1.84%, 06/10/054		3,338		3,338
Sigma Finance Inc.
1.84%, 11/15/044		7,418		7,418
1.86%, 08/17/054		3,709		3,709
1.86%, 09/15/054		9,273		9,274
Tango Finance Corp.
1.66%, 05/17/054,5		6,157		6,157
1.70%, 02/25/054,5		4,154		4,154
1.80%, 04/07/054,5		2,722		2,722
1.83%, 01/18/054,5		3,264		3,264
1.84%, 09/15/054,5		6,528		6,527
1.90%, 07/25/054,5		7,418		7,418

SCHEDULES OF INVESTMENTS 29

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR MID CORE INDEX FUND

October 31, 2004

Security	Shares or Principal		Value
WhistleJacket Capital LLC
1.83%, 07/15/054,5	$	5,564	$	5,563
1.83%, 09/15/054		5,564		5,563
1.83%, 10/14/054,5		3,709		3,709
1.84%, 06/15/054,5		3,709		3,709
White Pine Finance LLC
1.68%, 05/20/054		3,338		3,338
1.80%, 07/05/054		3,709		3,709
1.82%, 04/15/054,5		5,564		5,563
1.83%, 11/15/044,5		4,451		4,451
1.84%, 06/15/054,5		3,041		3,041
1.89%, 03/29/054		3,190		3,190
1.90%, 08/26/054,5		3,709		3,709
2.02%, 07/11/054		1,855		1,854
Winston Funding Ltd.
2.16%, 01/23/054,5		5,297		5,297
				338,708
MEDIUM-TERM NOTES – 0.15%
CC USA Inc.
1.29%, 04/15/054,5		7,418		7,418
1.51%, 02/15/054,5		4,822		4,824
Dorada Finance Inc.
1.48%, 01/18/054,5		5,564		5,564
K2 USA LLC
1.46%, 01/12/054,5		3,709		3,709
WhistleJacket Capital LLC
1.32%, 02/04/054,5		1,855		1,854
				23,369
MONEY MARKET FUNDS – 1.54%
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares4,6		29,673		29,673
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares4,6		115,852		115,852
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares4,6		81,601		81,601
BlackRock Temp Cash Money Market Fund4		1,663		1,663
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares4		3,028		3,028
				231,817
REPURCHASE AGREEMENTS – 1.18%
Banc of America Securities LLC
1.86%, 11/01/044,7		29,673		29,673
Bank of America N.A.
1.86%, 11/01/044,7		74,182		74,182
Goldman Sachs & Co.
1.86%, 11/01/044,7		74,182		74,182
				178,037
TIME DEPOSITS – 0.87%
Abbey National Treasury Services PLC
1.25%, 01/06/054		7,418		7,418
1.33%, 02/10/054		3,709		3,709
1.39%, 02/02/054		3,709		3,709
1.39%, 04/08/054		5,193		5,192
Bank of New York
1.39%, 11/01/044		7,418		7,418
1.60%, 12/03/044		1,855		1,854
Canadian Imperial Bank of Commerce
1.38%, 11/22/044		1,855		1,855
HBOS Treasury Services PLC
1.24%, 04/01/054		4,748		4,747
Key Bank N.A.
1.81%, 11/01/044		9,644		9,644
National City Bank (Ohio)
1.25%, 01/06/054		7,418		7,418
Nordea Bank PLC
2.11%, 06/07/054		7,418		7,417
Rabobank Nederland NV NY
1.85%, 11/01/044		14,836		14,836
Toronto-Dominion Bank
1.22%, 03/23/054		12,982		12,981
1.34%, 02/10/054		2,967		2,967
1.41%, 11/01/044		5,564		5,564
1.77%, 05/10/054		3,709		3,709
1.90%, 05/11/054		3,709		3,709

30 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR MID CORE INDEX FUND

October 31, 2004

Security	Principal		Value
World Savings Bank FSB
1.76%, 11/12/044	$	26,335	$	26,334
				130,481
U.S. GOVERNMENT AGENCY NOTES – 0.18%
Federal Home Loan Mortgage Corp.
1.63%, 04/15/054		5,193		5,200
1.80%, 01/18/054		3,449		3,436
1.80%, 01/19/054		3,709		3,694
2.06%, 05/31/054		3,698		3,654
Federal National Mortgage Association
2.33%, 07/22/054		11,127		10,938
				26,922
TOTAL SHORT-TERM INVESTMENTS (Cost: $1,119,975)				1,119,975
TOTAL INVESTMENTS IN SECURITIES – 107.40% (Cost: $15,938,878)				16,172,547
Other Assets, less Liabilities – (7.40%)				(1,113,983	)
NET ASSETS – 100.00%			$	15,058,564

NVS – Non-Voting Shares

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

² Non-income earning security.

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

⁴ All or a portion of this security represents an investment of securities lending collateral. See Note 5.

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 The Fund’s investment adviser is an affiliate of the issuer. See Note 2.

⁷ Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.57% to 8.00% and maturity dates ranging from 6/1/14 to 10/1/34.

SECTOR DIVERSIFICATION

Sector	Value		% of Net Assets
Financial	$	3,588,195	23.82	%
Consumer Cyclical		3,353,355	22.27
Industrial		2,434,150	16.16
Consumer Non-Cyclical		1,926,797	12.80
Communications		1,353,572	8.99
Technology		968,955	6.44
Energy		848,468	5.63
Basic Materials		447,372	2.97
Utilities		131,708	0.88
Short-Term and Other Net Assets		5,992	0.04
TOTAL	$	15,058,564	100.00	%

See notes to financial statements.

SCHEDULES OF INVESTMENTS 31

Schedule of Investments (Unaudited)

iSHARES^® MORNINGSTAR MID GROWTH INDEX FUND

October 31, 2004

Security	Shares	Value
COMMON STOCKS – 99.98%
ADVERTISING – 0.80%
Getty Images Inc.1,2	495	$	29,269
Lamar Advertising Co.1,2	882		36,532
West Corp.1,2	225		6,327
			72,128
AEROSPACE & DEFENSE – 0.96%
L-3 Communications Holdings Inc.	1,119		73,776
Titan Corp. (The)1	891		13,222
			86,998
AIRLINES – 0.23%
JetBlue Airways Corp.1,2	927		20,440
			20,440
APPAREL – 1.13%
Coach Inc.1	1,981		92,374
Columbia Sportswear Co.1	159		9,597
			101,971
AUTO MANUFACTURERS – 0.23%
Oshkosh Truck Corp.	352		20,733
			20,733
BANKS – 1.00%
Commerce Bancorp Inc.2	820		48,577
First Marblehead Corp. (The)1	269		14,418
Investors Financial Services Corp.2	702		27,020
			90,015
BIOTECHNOLOGY – 3.69%
Affymetrix Inc.1,2	642		19,581
Celgene Corp.1,2	1,732		51,302
Charles River Laboratories International Inc.1	640		29,946
Human Genome Sciences Inc.1	1,377		14,169
ICOS Corp.1,2	615		13,850
Invitrogen Corp.1	555		32,134
Martek Biosciences Corp.1,2	309		14,540
MedImmune Inc.1	2,612		74,233
Millennium Pharmaceuticals Inc.1	3,176		41,224
Millipore Corp.1	518		23,823
Protein Design Labs Inc.1	1,002		19,188
			333,990
CHEMICALS – 0.73%
Ecolab Inc.	1,956		66,211
			66,211
COMMERCIAL SERVICES – 5.16%
Alliance Data Systems Corp.1	477		20,168
Career Education Corp.1	1,073		33,660
ChoicePoint Inc.1	934		38,882
Corinthian Colleges Inc.1	900		12,924
Corporate Executive Board Co. (The)	416		26,478
DeVry Inc.1	648		9,461
Education Management Corp.1	636		17,058
Hewitt Associates Inc. Class A1	443		12,417
Interactive Data Corp.1	378		7,458
Iron Mountain Inc.1	1,147		37,908
ITT Educational Services Inc.1,2	486		18,473
Manpower Inc.	954		43,168
Moody’s Corp.	1,321		102,787
Pharmaceutical Product Development Inc.1	525		22,171
Robert Half International Inc.	1,802		47,807
Weight Watchers International Inc.1,2	444		15,948
			466,768
COMPUTERS – 7.67%
Affiliated Computer Services Inc. Class A1	1,292		70,479
Apple Computer Inc.1	3,999		210,067
BISYS Group Inc. (The)1	1,275		18,615
Ceridian Corp.1	1,575		27,169
Cognizant Technology Solutions Corp.1	1,378		46,852
Henry (Jack) & Associates Inc.	810		15,098
National Instruments Corp.	555		15,279
NCR Corp.1	984		55,448
Network Appliance Inc.1	3,761		92,032
SanDisk Corp.1,2	1,713		35,750
SunGard Data Systems Inc.1	3,034		80,371
Synopsys Inc.1	1,647		26,747
			693,907
DISTRIBUTION & WHOLESALE – 0.89%
CDW Corp.	684		42,429
Fastenal Co.2	689		38,053
			80,482

32 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR MID GROWTH INDEX FUND

October 31, 2004

Security	Shares	Value
DIVERSIFIED FINANCIAL SERVICES – 2.80%
Ameritrade Holding Corp.1	3,003	$	39,099
BlackRock Inc.	144		10,584
CapitalSource Inc.1,2	705		15,792
Chicago Mercantile Exchange Holdings Inc.	295		51,840
Doral Financial Corp.	968		40,637
Eaton Vance Corp.	636		27,742
Legg Mason Inc.	1,057		67,341
			253,035
ELECTRIC – 0.27%
NRG Energy Inc.1	891		24,716
			24,716
ELECTRICAL COMPONENTS & EQUIPMENT – 0.52%
Molex Inc.	837		24,750
Molex Inc. Class A	876		22,531
			47,281
ELECTRONICS – 3.79%
Amphenol Corp. Class A1	925		31,755
Garmin Ltd.2	615		30,750
Gentex Corp.	819		27,035
Jabil Circuit Inc.1	1,719		41,789
Sanmina-SCI Corp.1	5,523		44,184
Symbol Technologies Inc.	2,487		36,534
Tektronix Inc.	927		28,116
Thermo Electron Corp.1	1,715		49,735
Waters Corp.1	1,277		52,727
			342,625
ENGINEERING & CONSTRUCTION – 0.27%
Jacobs Engineering Group Inc.1	600		24,438
			24,438
ENTERTAINMENT – 0.32%
GTECH Holdings Corp.	1,237		29,280
			29,280
ENVIRONMENTAL CONTROL – 0.24%
Stericycle Inc.1	474		21,486
			21,486
FOOD – 0.93%
Dreyer’s Grand Ice Cream Holdings Inc.2	240		19,267
Performance Food Group Co.1	492		11,444
Whole Foods Market Inc.	651		53,011
			83,722
HEALTH CARE - PRODUCTS – 4.12%
Bard (C.R.) Inc.	1,092		62,026
Cooper Companies Inc.	345		24,271
Cytyc Corp.1	1,173		30,604
Dade Behring Holdings Inc.1	450		25,331
DENTSPLY International Inc.	754		39,216
Henry Schein Inc.1	459		29,023
IDEXX Laboratories Inc.1	358		17,843
INAMED Corp.1	375		19,931
Patterson Companies Inc.1,2	1,228		46,050
Respironics Inc.1	409		20,896
Varian Medical Systems Inc.1	1,437		57,696
			372,887
HEALTH CARE - SERVICES – 3.94%
Community Health Systems Inc.1	919		24,648
Covance Inc.1	666		26,454
DaVita Inc.1	1,041		30,834
Health Management Associates Inc. Class A	2,572		53,138
Laboratory Corp. of America Holdings1	1,498		68,608
Lincare Holdings Inc.1	1,056		38,819
Quest Diagnostics Inc.	836		73,183
Renal Care Group Inc.1	708		22,344
Select Medical Corp.	1,053		18,101
			356,129
HOLDING COMPANIES - DIVERSIFIED – 0.32%
Leucadia National Corp.	489		28,924
			28,924
HOME BUILDERS – 0.13%
Thor Industries Inc.	414		11,513
			11,513
HOME FURNISHINGS – 0.92%
Harman International Industries Inc.	689		82,804
			82,804
HOUSEHOLD PRODUCTS & WARES – 0.33%
Church & Dwight Co. Inc.	652		17,747
Fossil Inc.1	411		12,231
			29,978
INSURANCE – 0.27%
Brown & Brown Inc.	594		24,805
			24,805

SCHEDULES OF INVESTMENTS 33

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR MID GROWTH INDEX FUND

October 31, 2004

Security	Shares	Value
INTERNET – 2.09%
CheckFree Corp.1	699	$	21,669
McAfee Inc.1	1,624		39,301
Monster Worldwide Inc.1,2	1,109		31,107
VeriSign Inc.1	2,680		71,904
WebMD Corp.1	3,309		25,016
			188,997
LODGING – 1.57%
Hilton Hotels Corp.	4,064		80,874
Station Casinos Inc.	492		25,067
Wynn Resorts Ltd.1,2	612		35,588
			141,529
MACHINERY – 0.44%
Zebra Technologies Corp. Class A1	756		40,060
			40,060
MANUFACTURING – 0.53%
Donaldson Co. Inc.	804		23,879
Roper Industries Inc.	390		24,047
			47,926
MEDIA – 3.48%
Citadel Broadcasting Corp.1	597		8,686
Cox Radio Inc. Class A1	405		6,440
Dow Jones & Co. Inc.	480		21,240
Entercom Communications Corp.1	417		13,844
Radio One Inc.1	237		3,472
Radio One Inc. Class D1	687		10,092
Scripps (E.W.) Co. Class A	855		40,801
Sirius Satellite Radio Inc.1,2	12,905		50,330
Washington Post Co. (The) Class B	64		58,560
Westwood One Inc.1	819		18,903
Wiley, (John) & Sons Inc. Class A	417		13,532
XM Satellite Radio Holdings Inc. Class A1,2	2,137		69,068
			314,968
MINING – 0.73%
Freeport-McMoRan Copper & Gold Inc.	1,825		66,102
			66,102
OIL & GAS – 8.19%
Diamond Offshore Drilling Inc.2	648		21,902
ENSCO International Inc.	1,584		48,391
EOG Resources Inc.	1,243		82,734
GlobalSantaFe Corp.	2,007		59,207
Murphy Oil Corp.	913		73,058
Nabors Industries Ltd.1	1,557		76,480
Noble Corp.1	1,413		64,546
Patina Oil & Gas Corp.	699		19,991
Patterson-UTI Energy Inc.	1,728		33,229
Pride International Inc.1	1,227		22,675
Rowan Companies Inc.1	1,122		28,645
Transocean Inc.1	3,375		118,969
XTO Energy Inc.	2,728		91,061
			740,888
OIL & GAS SERVICES – 3.70%
BJ Services Co.	1,694		86,394
Cooper Cameron Corp.1	580		28,043
Grant Prideco Inc.1	1,159		23,829
National-Oilwell Inc.1	909		30,642
Smith International Inc.1	1,105		64,178
Varco International Inc.1	1,029		28,483
Weatherford International Ltd.1	1,402		73,269
			334,838
PHARMACEUTICALS – 6.69%
Accredo Health Inc.1	513		11,814
American Pharmaceutical Partners Inc.1,2	426		11,894
Amylin Pharmaceuticals Inc.1,2	876		18,659
Barr Pharmaceuticals Inc.1	933		35,127
Caremark Rx Inc.1	4,904		146,973
Cephalon Inc.1,2	594		28,316
Endo Pharmaceuticals Holdings Inc.1	348		7,586
Eon Labs Inc.1	250		6,153
Express Scripts Inc.1	645		41,280
ImClone Systems Inc.1	695		30,441
IVAX Corp.1	2,230		40,363
Medicis Pharmaceutical Corp. Class A	594		24,158
MGI Pharma Inc.1	747		19,922
Mylan Laboratories Inc.2	2,844		48,974
NBTY Inc.1	642		17,681
Neurocrine Biosciences Inc.1	384		17,875
Omnicare Inc.	1,101		30,377
OSI Pharmaceuticals Inc.1	391		25,407
Sepracor Inc.1	920		42,256
			605,256

34 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR MID GROWTH INDEX FUND

October 31, 2004

Security	Shares	Value
REAL ESTATE – 0.42%
St. Joe Co. (The)	743	$	37,819
			37,819
RETAIL – 7.81%
Advance Auto Parts Inc.1	786		30,748
Applebee’s International Inc.	876		20,034
AutoZone Inc.1	673		55,058
Cabela’s Inc. Class A1,2	92		2,324
CarMax Inc.1	1,101		29,000
Cheesecake Factory (The)1	552		23,962
Chico’s FAS Inc.1,2	945		37,828
Claire’s Stores Inc.	856		22,273
Dollar General Corp.	3,211		61,812
Dollar Tree Stores Inc.1	1,225		35,403
Family Dollar Stores Inc.	1,655		48,905
Krispy Kreme Doughnuts Inc.1,2	606		6,424
Michaels Stores Inc.	1,448		42,137
MSC Industrial Direct Co. Inc. Class A	444		15,158
O’Reilly Automotive Inc.1	582		25,061
Pacific Sunwear of California Inc.1	813		19,057
PETCO Animal Supplies Inc.1	438		15,667
PETsMART Inc.	1,527		48,833
Ross Stores Inc.	1,591		41,796
Ruby Tuesday Inc.	671		16,574
Tiffany & Co.	1,553		45,549
Urban Outfitters Inc.1	612		25,092
Williams-Sonoma Inc.1	993		37,903
			706,598
SAVINGS & LOANS – 0.29%
Hudson City Bancorp Inc.	714		26,090
			26,090
SEMICONDUCTORS – 7.27%
Altera Corp.1	3,994		90,784
Atmel Corp.1	4,677		14,873
Fairchild Semiconductor International Inc. Class A1	1,278		18,365
Integrated Circuit Systems Inc.1	771		17,386
International Rectifier Corp.1	702		27,905
Intersil Corp. Class A	1,485		24,235
KLA-Tencor Corp.1	2,069		94,202
Lam Research Corp.1	1,422		37,015
Marvell Technology Group Ltd.1	1,989		56,826
Microchip Technology Inc.	2,161		65,370
National Semiconductor Corp.1	3,796		63,393
Novellus Systems Inc.1	1,585		41,067
NVIDIA Corp.1	1,659		24,006
PMC-Sierra Inc.1	1,872		19,207
QLogic Corp.1	1,007		32,728
Rambus Inc.1	1,020		17,524
Silicon Laboratories Inc.1	426		12,767
			657,653
SOFTWARE – 7.15%
Activision Inc.1	1,469		21,271
Acxiom Corp.	906		22,650
Autodesk Inc.	1,189		62,720
BEA Systems Inc.1	4,098		33,276
Certegy Inc.	675		23,861
Citrix Systems Inc.1	1,777		42,879
Fair Isaac Corp.	747		22,559
Fiserv Inc.1	2,044		72,644
Global Payments Inc.2	402		22,014
IMS Health Inc.	2,509		53,141
Mercury Interactive Corp.1	978		42,475
Novell Inc.1	4,071		29,270
PeopleSoft Inc.1	3,511		72,923
Pixar Inc.1	261		20,990
Red Hat Inc.1,2	1,818		23,343
SEI Investments Co.	726		26,129
Siebel Systems Inc.1	4,776		45,372
Total System Services Inc.	399		9,416
			646,933
TELECOMMUNICATIONS – 5.54%
ADTRAN Inc.	456		9,850
Amdocs Ltd.1	1,713		43,082
Andrew Corp.1	1,584		22,144
Comverse Technology Inc.1	1,904		39,299
Crown Castle International Corp.1,2	2,370		36,285
Harris Corp.	705		43,379
JDS Uniphase Corp.1	14,473		45,879
Juniper Networks Inc.1	5,202		138,425
Level 3 Communications Inc.1,2	6,549		22,005
Nextel Partners Inc. Class A1	417		7,022

SCHEDULES OF INVESTMENTS 35

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR MID GROWTH INDEX FUND

October 31, 2004

Security	Shares or Principal		Value
Plantronics Inc.		507	$	22,055
Polycom Inc.1		1,059		21,868
SpectraSite Inc.1,2		477		24,470
United States Cellular Corp.1		162		6,747
UTStarcom Inc.1,2		1,056		18,079
				500,589
TEXTILES – 0.69%
Cintas Corp.		1,435		61,906
				61,906
TOYS, GAMES & HOBBIES – 0.15%
Marvel Enterprises Inc.1,2		873		13,444
				13,444
TRANSPORTATION – 1.58%
CH Robinson Worldwide Inc.		846		45,633
Expeditors International Washington Inc.		1,112		63,495
Hunt (J.B.) Transport Services Inc.		663		27,090
SIRVA Inc.1		264		6,336
				142,554
TOTAL COMMON STOCKS (Cost: $8,880,863)				9,041,416
SHORT-TERM INVESTMENTS – 9.41%
COMMERCIAL PAPER – 1.60%
Amsterdam Funding Corp.
1.79%, 11/08/043	$	4,222		4,220
Aspen Funding Corp.
1.85%, 11/01/043		16,156		16,156
Barton Capital Corp.
1.78%, 11/04/043		4,864		4,863
1.79%, 11/08/043		4,418		4,417
CRC Funding LLC
1.78%, 11/09/043		2,815		2,813
Delaware Funding Corp.
1.78%, 11/10/043		3,096		3,095
Edison Asset Securitization
1.45%, 11/09/043		5,629		5,627
1.59%, 12/02/043		5,629		5,621
Eureka Securitization Inc.
1.79%, 11/01/043		2,392		2,392
Security	Principal		Value
Ford Credit Auto Receivables
1.85%, 01/14/053	$	2,815	$	2,804
Grampian Funding LLC
1.59%, 11/30/043		2,815		2,811
Liberty Street Funding Corp.
1.80%, 11/12/043		1,407		1,407
Nationwide Building Society
1.63%, 12/09/043		4,672		4,664
Polonius Inc.
1.79%, 11/12/043		2,815		2,813
Prudential Funding LLC
1.60%, 12/01/043		2,815		2,811
1.85%, 11/01/043		14,073		14,073
Ranger Funding Co. LLC
1.79%, 11/01/043		3,227		3,227
Scaldis Capital LLC
1.78%, 11/08/043		12,666		12,662
Thames Asset Global Securitization No. 1 Inc.
1.81%, 11/12/043		3,293		3,291
UBS Finance (Delaware)
1.11%, 12/17/043		8,444		8,432
1.85%, 11/01/043		28,146		28,146
Windmill Funding Corp.
1.79%, 11/02/043		844		844
1.79%, 11/03/043		3,377		3,377
1.79%, 11/08/043		4,098		4,098
				144,664
FLOATING RATE NOTES – 2.84%
American Express Credit Corp.
1.95%, 10/26/053		5,629		5,632
Bank of Nova Scotia
1.85%, 09/26/053		1,407		1,407
Beta Finance Inc.
1.78%, 05/04/053,4		3,377		3,377
1.89%, 09/23/053,4		5,066		5,064
1.89%, 09/27/053,4		4,503		4,502
1.91%, 03/15/053,4		2,815		2,815
2.04%, 10/27/053,4		5,348		5,353
Canadian Imperial Bank of Commerce
1.79%, 09/13/053		8,444		8,441
1.90%, 10/31/053		5,629		5,628

36 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR MID GROWTH INDEX FUND

October 31, 2004

Security	Principal		Value
CC USA Inc.
1.78%, 05/04/053,4	$	5,629	$	5,629
2.06%, 07/29/053,4		5,629		5,628
Den Danske Bank NY
1.79%, 08/12/053		5,629		5,628
1.87%, 08/26/053		5,629		5,628
2.00%, 10/17/053		5,629		5,628
Depfa Bank PLC
1.86%, 09/15/053		5,629		5,629
Dorada Finance Inc.
2.06%, 07/29/053,4		4,672		4,671
Five Finance Inc.
1.91%, 04/29/053,4		4,503		4,504
HBOS Treasury Services PLC
1.96%, 04/22/053		5,629		5,629
K2 USA LLC
1.81%, 09/12/053,4		5,629		5,628
1.82%, 06/10/053,4		5,629		5,629
1.89%, 10/20/053,4		5,629		5,629
2.05%, 07/25/053,4		2,815		2,814
Links Finance LLC
1.82%, 04/15/053,4		5,629		5,629
2.12%, 04/25/053		5,629		5,631
National City Bank (Ohio)
1.79%, 08/09/053		5,629		5,628
1.85%, 06/10/053		2,815		2,815
1.86%, 06/23/053		5,629		5,628
Nationwide Building Society
1.96%, 10/28/053,4		9,570		9,571
Norddeutsche Landesbank
2.04%, 07/27/053		5,629		5,628
Northern Rock PLC
1.90%, 10/25/053,4		11,258		11,258
2.02%, 01/13/053,4		5,348		5,348
Permanent Financing PLC
1.81%, 03/10/053		5,629		5,629
1.82%, 12/10/043		2,815		2,815
1.84%, 06/10/053		2,533		2,533
Sigma Finance Inc.
1.84%, 11/15/043		5,629		5,629
1.86%, 08/17/053		2,815		2,815
1.86%, 09/15/053		7,036		7,038
Security	Shares or Principal		Value
Tango Finance Corp.
1.66%, 05/17/053,4	$	4,672	$	4,672
1.70%, 02/25/053,4		3,152		3,152
1.80%, 04/07/053,4		2,066		2,066
1.83%, 01/18/053,4		2,477		2,477
1.84%, 09/15/053,4		4,954		4,953
1.90%, 07/25/053,4		5,629		5,629
WhistleJacket Capital LLC
1.83%, 07/15/053,4		4,222		4,221
1.83%, 09/15/053		4,222		4,221
1.83%, 10/14/053,4		2,815		2,815
1.84%, 06/15/053,4		2,815		2,814
White Pine Finance LLC
1.68%, 05/20/053		2,533		2,533
1.80%, 07/05/053		2,815		2,814
1.82%, 04/15/053,4		4,222		4,221
1.83%, 11/15/043,4		3,377		3,377
1.84%, 06/15/053,4		2,308		2,308
1.89%, 03/29/053		2,421		2,420
1.90%, 08/26/053,4		2,815		2,814
2.02%, 07/11/053		1,407		1,407
Winston Funding Ltd.
2.16%, 01/23/053,4		4,019		4,019
				257,021
MEDIUM-TERM NOTES – 0.20%
CC USA Inc.
1.29%, 04/15/053,4		5,629		5,629
1.51%, 02/15/053,4		3,659		3,661
Dorada Finance Inc.
1.48%, 01/18/053,4		4,222		4,222
K2 USA LLC
1.46%, 01/12/053,4		2,815		2,815
WhistleJacket Capital LLC
1.32%, 02/04/053,4		1,407		1,407
				17,734
MONEY MARKET FUNDS – 1.96%
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares3,5		22,517		22,517

SCHEDULES OF INVESTMENTS 37

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR MID GROWTH INDEX FUND

October 31, 2004

Security	Shares or Principal		Value
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares3,5		88,869	$	88,869
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares3,5		61,921		61,921
BlackRock Temp Cash Money Market Fund3		1,262		1,262
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares3		2,297		2,297
				176,866
REPURCHASE AGREEMENTS – 1.49%
Banc of America Securities LLC
1.86%, 11/01/043,6	$	22,517		22,517
Bank of America N.A.
1.86%, 11/01/043,6		56,292		56,292
Goldman Sachs & Co.
1.86%, 11/01/043,6		56,292		56,292
				135,101
TIME DEPOSITS – 1.09%
Abbey National Treasury Services PLC
1.25%, 01/06/053		5,629		5,629
1.33%, 02/10/053		2,815		2,814
1.39%, 02/02/053		2,815		2,814
1.39%, 04/08/053		3,940		3,940
Bank of New York
1.39%, 11/01/043		5,629		5,629
1.60%, 12/03/043		1,407		1,407
Canadian Imperial Bank of Commerce
1.38%, 11/22/043		1,407		1,407
HBOS Treasury Services PLC
1.24%, 04/01/053		3,603		3,603
Key Bank N.A.
1.81%, 11/01/043		7,318		7,318
National City Bank (Ohio)
1.25%, 01/06/053		5,629		5,630
Nordea Bank PLC
2.11%, 06/07/053		5,629		5,628
Rabobank Nederland NV NY
1.85%, 11/01/043		11,258		11,258
Security	Principal		Value
Toronto-Dominion Bank
1.22%, 03/23/053	$	9,851	$	9,850
1.34%, 02/10/053		2,252		2,252
1.41%, 11/01/043		4,222		4,222
1.77%, 05/10/053		2,815		2,814
1.90%, 05/11/053		2,815		2,814
World Savings Bank FSB
1.76%, 11/12/043		19,984		19,981
				99,010
U.S. GOVERNMENT AGENCY NOTES – 0.23%
Federal Home Loan Mortgage Corp.
1.63%, 04/15/053		3,940		3,946
1.80%, 01/18/053		2,618		2,607
1.80%, 01/19/053		2,815		2,803
2.06%, 05/31/053		2,806		2,772
Federal National Mortgage Association
2.33%, 07/22/053		8,444		8,300
				20,428
TOTAL SHORT-TERM INVESTMENTS (Cost: $850,824)				850,824
TOTAL INVESTMENTS IN SECURITIES – 109.39% (Cost: $9,731,687)				9,892,240
Other Assets, Less Liabilities – (9.39%)				(849,353	)
NET ASSETS – 100.00%			$	9,042,887

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 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.

⁵ The Fund’s investment adviser is an affiliate of the issuer. See Note 2.

⁶ Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.57% to 8.00% and maturity dates ranging from 6/1/14 to 10/1/34.

38 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR MID GROWTH INDEX FUND

October 31, 2004

SECTOR DIVERSIFICATION

Sector	Value		% of Net Assets
Consumer Non-Cyclical	$	2,248,730	24.86	%
Technology		1,998,493	22.09
Consumer Cyclical		1,270,700	14.07
Communications		1,076,682	11.91
Energy		1,075,726	11.89
Industrial		753,368	8.33
Financial		431,764	4.78
Basic Materials		132,313	1.46
Diversified		28,924	0.32
Utilities		24,716	0.27
Short-Term and Other Net Assets		1,471	0.02
TOTAL	$	9,042,887	100.00	%

See notes to financial statements.

SCHEDULES OF INVESTMENTS 39

Schedule of Investments (Unaudited)

iSHARES^® MORNINGSTAR MID VALUE INDEX FUND

October 31, 2004

Security	Shares	Value
COMMON STOCKS – 99.91%
AGRICULTURE – 2.02%
Bunge Ltd.	1,915	$	91,403
Reynolds American Inc.	1,517		104,461
UST Inc.	2,884		118,705
			314,569
AIRLINES – 0.14%
AMR Corp.1,2	2,930		22,620
			22,620
APPAREL – 1.02%
Jones Apparel Group Inc.	2,201		77,695
VF Corp.	1,514		81,499
			159,194
AUTO MANUFACTURERS – 0.25%
Navistar International Corp.1	1,109		38,316
			38,316
AUTO PARTS & EQUIPMENT – 1.32%
American Axle & Manufacturing Holdings Inc.	771		22,128
Dana Corp.	2,605		38,841
Delphi Corp.	8,646		72,713
Lear Corp.	1,196		64,488
TRW Automotive Holdings Corp.1	422		7,748
			205,918
BANKS – 11.51%
AmSouth Bancorp	6,141		162,061
Associated Bancorp2	2,108		73,127
Assurant Inc.	1,612		43,492
BancorpSouth Inc.	1,264		30,071
Banknorth Group Inc.	3,034		107,009
Colonial BancGroup Inc. (The)	2,325		50,336
Commerce Bancshares Inc.	1,156		56,760
Compass Bancshares Inc.	2,135		101,989
First Horizon National Corp.2	2,149		93,009
FirstMerit Corp.	1,297		33,891
Fulton Financial Corp.	2,120		45,495
Hibernia Corp. Class A	2,710		78,590
Hudson United Bancorp	811		32,278
Huntington Bancshares Inc.	3,782		90,579
Mercantile Bankshares Corp.	1,379		67,212
North Fork Bancorp Inc.	5,076		223,852
Regions Financial Corp.	8,102		284,218
Sky Financial Group Inc.	1,843		49,540
Trustmark Corp.	894		28,188
UnionBanCal Corp.	866		52,609
Valley National Bancorp	1,728		49,006
Wilmington Trust Corp.	1,187		41,023
			1,794,335
BEVERAGES – 0.35%
Coors (Adolph) Co. Class B	464		30,949
PepsiAmericas Inc.	1,202		24,340
			55,289
BUILDING MATERIALS – 0.41%
Lafarge North America Inc.	524		25,676
Martin Marietta Materials Inc.	847		38,564
			64,240
CHEMICALS – 2.78%
Ashland Inc.	1,226		70,642
Eastman Chemical Co.2	1,380		65,509
Engelhard Corp.	2,172		61,468
Lubrizol Corp.	1,134		39,384
Lyondell Chemical Co.2	3,012		69,216
RPM International Inc.2	2,024		35,683
Sherwin-Williams Co. (The)	2,135		91,207
			433,109
COMMERCIAL SERVICES – 1.87%
Convergys Corp.1	2,562		33,332
Deluxe Corp.	876		33,367
Donnelley (R.R.) & Sons Co.	3,860		121,397
Service Corp. International1	5,882		38,880
ServiceMaster Co. (The)	5,078		65,201
			292,177
COMPUTERS – 1.25%
Computer Sciences Corp.1	3,303		164,060
Western Digital Corp.1	3,750		31,237
			195,297
DISTRIBUTION & WHOLESALE – 0.78%
Genuine Parts Co.	3,032		120,946
			120,946

40 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR MID VALUE INDEX FUND

October 31, 2004

Security	Shares	Value
DIVERSIFIED FINANCIAL SERVICES – 2.94%
Bear Stearns Companies Inc. (The)	1,792	$	169,792
CIT Group Inc.2	3,667		148,147
Edwards (A.G.) Inc.	1,413		51,235
Providian Financial Corp.1	5,103		79,352
Student Loan Corp.	70		10,255
			458,781
ELECTRIC – 14.36%
AES Corp. (The)1	10,797		117,687
ALLETE Inc.	464		15,767
Alliant Energy Corp.	1,973		52,048
Ameren Corp.	3,378		162,144
Calpine Corp.1,2	8,273		20,600
CenterPoint Energy Inc.2	4,729		49,702
Cinergy Corp.	2,926		115,636
Consolidated Edison Inc.2	4,199		182,447
Constellation Energy Group Inc.	3,051		123,932
DPL Inc.	2,090		45,144
DTE Energy Co.2	3,016		128,813
Edison International	5,205		158,752
Energy East Corp.	2,560		64,512
Great Plains Energy Inc.	1,302		37,094
Hawaiian Electric Industries Inc.2	1,412		39,592
MDU Resources Group Inc.	1,902		48,786
NiSource Inc.	4,570		98,026
Northeast Utilities	2,247		43,434
NSTAR	928		45,908
OGE Energy Corp.2	1,538		39,019
Pepco Holdings Inc.	3,015		62,139
Pinnacle West Capital Corp.	1,593		67,894
PPL Corp.	3,284		170,768
Puget Energy Inc.	1,735		40,356
SCANA Corp.	1,759		65,259
TECO Energy Inc.	3,304		46,256
Texas Genco Holdings Inc.	265		12,375
Wisconsin Energy Corp.	2,043		66,684
Xcel Energy Inc.	6,945		118,759
			2,239,533
ELECTRONICS – 0.32%
Arrow Electronics Inc.1	2,057		49,286
			49,286
ENGINEERING & CONSTRUCTION – 0.44%
Fluor Corp.2	1,488		69,103
			69,103
FOOD – 1.89%
Albertson’s Inc.2	5,614		128,055
Del Monte Foods Co.1	3,464		36,995
SUPERVALU Inc.	2,372		69,950
Tyson Foods Inc. Class A	4,120		59,740
			294,740
FOREST PRODUCTS & PAPER – 2.03%
Boise Cascade Corp.	1,533		45,254
Bowater Inc.2	1,000		36,840
Georgia-Pacific Corp.	3,963		137,080
Louisiana-Pacific Corp.	1,795		43,995
Temple-Inland Inc.	905		53,504
			316,673
GAS – 2.19%
AGL Resources Inc.	1,041		32,479
KeySpan Corp.	2,767		110,542
ONEOK Inc.	1,688		45,272
Sempra Energy	3,544		118,866
Vectren Corp.	1,326		34,304
			341,463
HAND & MACHINE TOOLS – 1.33%
Black & Decker Corp.	1,415		113,596
Snap-On Inc.	957		28,117
Stanley Works (The)	1,461		65,044
			206,757
HEALTH CARE - SERVICES – 1.22%
Health Net Inc.1	1,956		47,453
PacifiCare Health Systems Inc.1,2	1,503		53,537
Tenet Healthcare Corp.1	8,271		88,665
			189,655
HOME BUILDERS – 0.34%
KB Home	645		53,051
			53,051
HOME FURNISHINGS – 0.52%
Maytag Corp.2	1,336		23,246
Whirlpool Corp.	998		58,632
			81,878

SCHEDULES OF INVESTMENTS 41

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR MID VALUE INDEX FUND

October 31, 2004

Security	Shares	Value
HOUSEWARES – 0.67%
Newell Rubbermaid Inc.	4,849	$	104,544
			104,544
INSURANCE – 11.72%
Allmerica Financial Corp.1	934		28,113
American Financial Group Inc.	668		19,773
AON Corp.	4,526		92,376
Berkley (W.R.) Corp.	1,274		54,451
CIGNA Corp.	2,414		153,192
CNA Financial Corp.1	622		14,866
Conseco Inc.1	2,623		43,961
Fidelity National Financial Inc.	2,799		105,634
First American Corp.	1,372		42,793
IPC Holdings Ltd.	638		25,813
Jefferson-Pilot Corp.	2,451		118,359
Lincoln National Corp.	3,061		134,072
Nationwide Financial Services Inc.	985		34,081
Old Republic International Corp.	2,982		69,630
PartnerRe Ltd.	938		54,545
Protective Life Corp.	1,122		44,095
Reinsurance Group of America Inc.	577		24,857
RenaissanceRe Holdings Ltd.2	1,171		54,826
SAFECO Corp.2	2,421		111,947
St. Paul Travelers Companies Inc.	11,670		396,313
StanCorp Financial Group Inc.	497		37,464
Torchmark Corp.	1,908		103,070
UNUMProvident Corp.2	4,651		63,533
			1,827,764
IRON & STEEL – 1.42%
International Steel Group Inc.1	1,190		43,947
Nucor Corp.	2,504		105,744
United States Steel Corp.2	1,976		72,559
			222,250
MACHINERY – 0.27%
Cummins Inc.2	602		42,188
			42,188
MANUFACTURING – 4.46%
Cooper Industries Ltd.	1,620		103,518
Eastman Kodak Co.2	5,044		152,732
Eaton Corp.	2,667		170,555
Harsco Corp.	718		34,787
Pentair Inc.	1,782		66,611
Teleflex Inc.	669		29,295
Textron Inc.	2,023		137,867
			695,365
MINING – 1.14%
Owens-Illinois Inc.1	1,775		32,891
Phelps Dodge Corp.	1,649		144,353
			177,244
OFFICE FURNISHINGS – 0.07%
Steelcase Inc. Class A	808		10,585
			10,585
OIL & GAS – 5.19%
Amerada Hess Corp.	1,435		115,819
Chesapeake Energy Corp.2	4,744		76,284
Kerr-McGee Corp.	2,205		130,580
Sunoco Inc.	1,364		101,427
Unocal Corp.	4,644		193,887
Valero Energy Corp.	4,446		191,045
			809,042
PACKAGING & CONTAINERS – 0.61%
Bemis Co. Inc.	1,872		49,552
Sonoco Products Co.	1,718		45,785
			95,337
PIPELINES – 1.33%
El Paso Corp.	10,907		97,509
National Fuel Gas Co.	1,372		38,443
Questar Corp.	1,501		72,048
			208,000
REAL ESTATE – 0.17%
Forest City Enterprises Inc. Class A	488		26,816
			26,816
REAL ESTATE INVESTMENT TRUSTS – 11.36%
AMB Property Corp.	1,445		54,187
Annaly Mortgage Management Inc.2	2,096		37,686
Apartment Investment & Management Co. Class A	1,682		61,713
Arden Realty Group Inc.	1,150		39,192
AvalonBay Communities Inc.2	1,251		81,903
Boston Properties Inc.2	1,883		112,453

42 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR MID VALUE INDEX FUND

October 31, 2004

Security	Shares		Value
Developers Diversified Realty Corp.		1,783	$	74,529
Duke Realty Corp.2		2,474		84,363
Equity Residential		4,873		162,515
Health Care Property Investors Inc.		2,317		64,482
Hospitality Properties Trust		1,091		46,749
Host Marriott Corp.1		5,684		82,702
iStar Financial Inc.		1,935		80,148
Kimco Realty Corp.2		1,646		89,789
Liberty Property Trust		1,473		59,730
Macerich Co. (The)		1,029		61,483
Mack-Cali Realty Corp.		1,058		46,732
New Plan Excel Realty Trust Inc.		1,782		46,617
Plum Creek Timber Co. Inc.		3,184		115,547
ProLogis		3,162		123,255
Rayonier Inc.		869		41,191
Thornburg Mortgage Inc.2		1,447		41,341
Trizec Properties Inc.		1,591		25,376
Vornado Realty Trust2		2,047		137,558
				1,771,241
RETAIL – 4.23%
AutoNation Inc.1		3,520		60,650
Blockbuster Inc.		1,909		12,981
Borders Group Inc.		1,415		32,248
Federated Department Stores Inc.		3,180		160,431
May Department Stores Co. (The)		5,088		132,593
Neiman-Marcus Group Inc. Class A2		538		32,727
Neiman-Marcus Group Inc. Class B		245		13,867
Office Depot Inc.1		5,500		89,045
Rite Aid Corp.1		7,796		29,001
Saks Inc.		2,198		26,860
Toys R Us Inc.1		3,823		68,852
				659,255
SAVINGS & LOANS – 1.64%
Astoria Financial Corp.		1,212		47,377
Sovereign Bancorp Inc.		5,960		129,034
Washington Federal Inc.		1,369		34,937
Webster Financial Corp.		923		44,119
				255,467
SEMICONDUCTORS – 0.09%
MEMC Electronic Materials Inc.1		1,545		14,523
				14,523
Security	Shares or Principal		Value
TELECOMMUNICATIONS – 1.21%
CenturyTel Inc.		2,249	$	72,170
Qwest Communications International Inc.1		25,806		88,257
3Com Corp.1		6,889		28,520
				188,947
TOYS, GAMES & HOBBIES – 0.32%
Hasbro Inc.		2,826		49,992
				49,992
TRANSPORTATION – 2.73%
CSX Corp.		3,768		137,532
Norfolk Southern Corp.		6,814		231,335
Ryder System Inc.		1,122		56,212
				425,079
TOTAL COMMON STOCKS (Cost: $15,075,139)				15,580,569
SHORT-TERM INVESTMENTS – 9.33%
COMMERCIAL PAPER – 1.58%
Amsterdam Funding Corp.
1.79%, 11/08/043	$	7,204		7,201
Aspen Funding Corp.
1.85%, 11/01/043		27,566		27,566
Barton Capital Corp.
1.78%, 11/04/043		8,299		8,298
1.79%, 11/08/043		7,538		7,536
CRC Funding LLC
1.78%, 11/09/043		4,802		4,800
Delaware Funding Corp.
1.78%, 11/10/043		5,283		5,280
Edison Asset Securitization
1.45%, 11/09/043		9,605		9,602
1.59%, 12/02/043		9,605		9,592
Eureka Securitization Inc.
1.79%, 11/01/043		4,081		4,081
Ford Credit Auto Receivables
1.85%, 01/14/053		4,802		4,784
Grampian Funding LLC
1.59%, 11/30/043		4,802		4,796

SCHEDULES OF INVESTMENTS 43

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR MID VALUE INDEX FUND

October 31, 2004

Security	Principal		Value
Liberty Street Funding Corp.
1.80%, 11/12/043	$	2,401	$	2,400
Nationwide Building Society
1.63%, 12/09/043		7,972		7,958
Polonius Inc.
1.79%, 11/12/043		4,802		4,800
Prudential Funding LLC
1.60%, 12/01/043		4,802		4,796
1.85%, 11/01/043		24,012		24,012
Ranger Funding Co. LLC
1.79%, 11/01/043		5,506		5,506
Scaldis Capital LLC
1.78%, 11/08/043		21,611		21,604
Thames Asset Global Securitization No. 1 Inc.
1.81%, 11/12/043		5,618		5,615
UBS Finance (Delaware)
1.11%, 12/17/043		14,407		14,387
1.85%, 11/01/043		48,024		48,024
Windmill Funding Corp.
1.79%, 11/02/043		1,441		1,441
1.79%, 11/03/043		5,763		5,762
1.79%, 11/08/043		6,992		6,990
				246,831
FLOATING RATE NOTES – 2.81%
American Express Credit Corp.
1.95%, 10/26/053		9,605		9,610
Bank of Nova Scotia
1.85%, 09/26/053		2,401		2,400
Beta Finance Inc.
1.78%, 05/04/053,4		5,763		5,762
1.89%, 09/23/053,4		8,644		8,641
1.89%, 09/27/053,4		7,684		7,681
1.91%, 03/15/053,4		4,802		4,804
2.04%, 10/27/053,4		9,125		9,134
Canadian Imperial Bank of Commerce
1.79%, 09/13/053		14,407		14,403
1.90%, 10/31/053		9,605		9,602
CC USA Inc.
1.78%, 05/04/053,4		9,605		9,604
2.06%, 07/29/053,4		9,605		9,603
Den Danske Bank NY
1.79%, 08/12/053		9,605		9,603
1.87%, 08/26/053		9,605		9,603
2.00%, 10/17/053		9,605		9,602
Depfa Bank PLC
1.86%, 09/15/053		9,605		9,605
Dorada Finance Inc.
2.06%, 07/29/053,4		7,972		7,970
Five Finance Inc.
1.91%, 04/29/053,4		7,684		7,683
HBOS Treasury Services PLC
1.96%, 04/22/053		9,605		9,605
K2 USA LLC
1.81%, 09/12/053,4		9,605		9,603
1.82%, 06/10/053,4		9,605		9,604
1.89%, 10/20/053,4		9,605		9,605
2.05%, 07/25/053,4		4,802		4,802
Links Finance LLC
1.82%, 04/15/053,4		9,605		9,604
2.12%, 04/25/053		9,605		9,608
National City Bank (Ohio)
1.79%, 08/09/053		9,605		9,603
1.85%, 06/10/053		4,802		4,803
1.86%, 06/23/053		9,605		9,603
Nationwide Building Society
1.96%, 10/28/053,4		16,328		16,330
Norddeutsche Landesbank
2.04%, 07/27/053		9,605		9,602
Northern Rock PLC
1.90%, 10/25/053,4		19,210		19,210
2.02%, 01/13/053,4		9,125		9,125
Permanent Financing PLC
1.81%, 03/10/053		9,605		9,605
1.82%, 12/10/043		4,802		4,802
1.84%, 06/10/053		4,322		4,322
Sigma Finance Inc.
1.84%, 11/15/043		9,605		9,605
1.86%, 08/17/053		4,802		4,803
1.86%, 09/15/053		12,006		12,007

44 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR MID VALUE INDEX FUND

October 31, 2004

Security	Shares or Principal		Value
Tango Finance Corp.
1.66%, 05/17/053,4	$	7,972	$	7,972
1.70%, 02/25/053,4		5,379		5,378
1.80%, 04/07/053,4		3,525		3,525
1.83%, 01/18/053,4		4,226		4,227
1.84%, 09/15/053,4		8,452		8,451
1.90%, 07/25/053,4		9,605		9,604
WhistleJacket Capital LLC
1.83%, 07/15/053,4		7,204		7,203
1.83%, 09/15/053		7,204		7,202
1.83%, 10/14/053,4		4,802		4,802
1.84%, 06/15/053,4		4,802		4,802
White Pine Finance LLC
1.68%, 05/20/053		4,322		4,322
1.80%, 07/05/053		4,802		4,802
1.82%, 04/15/053,4		7,204		7,203
1.83%, 11/15/043,4		5,763		5,763
1.84%, 06/15/053,4		3,938		3,938
1.89%, 03/29/053		4,130		4,130
1.90%, 08/26/053,4		4,802		4,802
2.02%, 07/11/053		2,401		2,402
Winston Funding Ltd.
2.16%, 01/23/053,4		6,858		6,858
				438,547
MEDIUM-TERM NOTES – 0.20%
CC USA Inc.
1.29%, 04/15/053,4		9,605		9,604
1.51%, 02/15/053,4		6,243		6,246
Dorada Finance Inc.
1.48%, 01/18/053,4		7,204		7,203
K2 USA LLC
1.46%, 01/12/053,4		4,802		4,802
WhistleJacket Capital LLC
1.32%, 02/04/053,4		2,401		2,401
				30,256
MONEY MARKET FUNDS – 1.96%
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares3,5		38,419		38,419
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares3,5		154,763		154,763
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares3,5		105,652		105,652
BlackRock Temp Cash Money Market Fund3		2,153		2,153
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares3		3,920		3,920
				304,907
REPURCHASE AGREEMENTS – 1.48%
Banc of America Securities LLC
1.86%, 11/01/043,6	$	38,419		38,419
Bank of America N.A.
1.86%, 11/01/043,6		96,048		96,048
Goldman Sachs & Co.
1.86%, 11/01/043,6		96,048		96,048
				230,515
TIME DEPOSITS – 1.08%
Abbey National Treasury Services PLC
1.25%, 01/06/053		9,605		9,605
1.33%, 02/10/053		4,802		4,802
1.39%, 02/02/053		4,802		4,802
1.39%, 04/08/053		6,723		6,723
Bank of New York
1.39%, 11/01/043		9,605		9,605
1.60%, 12/03/043		2,401		2,401
Canadian Imperial Bank of Commerce
1.38%, 11/22/043		2,401		2,402
HBOS Treasury Services PLC
1.24%, 04/01/053		6,147		6,147
Key Bank N.A.
1.81%, 11/01/043		12,486		12,486
National City Bank (Ohio)
1.25%, 01/06/053		9,605		9,605
Nordea Bank PLC
2.11%, 06/07/053		9,605		9,604
Rabobank Nederland NV NY
1.85%, 11/01/043		19,210		19,210

SCHEDULES OF INVESTMENTS 45

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR MID VALUE INDEX FUND

October 31, 2004

Security	Principal		Value
Toronto-Dominion Bank
1.22%, 03/23/053	$	16,808	$	16,807
1.34%, 02/10/053		3,842		3,842
1.41%, 11/01/043		7,204		7,204
1.77%, 05/10/053		4,802		4,802
1.90%, 05/11/053		4,802		4,802
World Savings Bank FSB
1.76%, 11/12/043		34,097		34,088
				168,937
U.S. GOVERNMENT AGENCY NOTES – 0.22%
Federal Home Loan Mortgage Corp.
1.63%, 04/15/053		6,723		6,733
1.80%, 01/18/053		4,466		4,449
1.80%, 01/19/053		4,802		4,783
2.06%, 05/31/053		4,788		4,730
Federal National Mortgage Association
2.33%, 07/22/053		14,407		14,162
				34,857
TOTAL SHORT-TERM INVESTMENTS (Cost: $1,454,850)				1,454,850
TOTAL INVESTMENTS IN SECURITIES – 109.24% (Cost: $16,529,989)				17,035,419
Other Assets, Less Liabilities – (9.24%)				(1,440,364	)
NET ASSETS – 100.00%			$	15,595,055

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 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.

⁵ The Fund’s investment adviser is an affiliate of the issuer. See Note 2.

⁶ Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.57% to 8.00% and maturity dates ranging from 6/1/14 to 10/1/34.

SECTOR DIVERSIFICATION

Sector	Value		% of Net Assets
Financial	$	6,134,404	39.34	%
Utilities		2,580,996	16.55
Industrial		1,680,246	10.78
Consumer Cyclical		1,506,299	9.66
Consumer Non-Cyclical		1,146,430	7.35
Basic Materials		1,116,385	7.16
Energy		1,017,042	6.52
Technology		209,820	1.34
Communications		188,947	1.21
Short-Term and Other Net Assets		14,486	0.09
TOTAL	$	15,595,055	100.00	%

See notes to financial statements.

46 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

iSHARES^® MORNINGSTAR SMALL CORE INDEX FUND

October 31, 2004

Security	Shares	Value
COMMON STOCKS – 99.92%
ADVERTISING – 1.31%
ADVO Inc.	1,256	$	40,129
Catalina Marketing Corp.	2,020		51,732
Donnelley (R.H.) Corp.1	1,280		69,440
			161,301
AEROSPACE & DEFENSE – 1.40%
Curtiss-Wright Corp.	450		25,114
DRS Technologies Inc.1	1,026		37,162
EDO Corp.	644		18,019
Esterline Technologies Corp.1	864		27,302
Moog Inc. Class A1	940		35,278
Teledyne Technologies Inc.1	1,180		30,173
			173,048
AGRICULTURE – 0.42%
Delta & Pine Land Co.	1,583		41,665
Vector Group Ltd.	696		10,760
			52,425
AIRLINES – 0.33%
SkyWest Inc.	2,399		40,975
			40,975
APPAREL – 1.15%
Gymboree Corp.1	1,268		15,343
K-Swiss Inc. Class A	784		19,600
Oxford Industries Inc.	575		21,327
Warnaco Group Inc. (The)1	1,796		36,638
Wolverine World Wide Inc.	1,608		48,947
			141,855
AUTO MANUFACTURERS – 0.20%
Wabash National Corp.1	1,024		25,170
			25,170
AUTO PARTS & EQUIPMENT – 0.04%
Collins & Aikman Corp.1	1,430		5,563
			5,563
BANKS – 9.60%
Alabama National Bancorp	617		39,426
Boston Private Financial Holdings Inc.	1,132		27,779
Cathay General Bancorp	2,056		81,006
CVB Financial Corp.	1,571		38,961
First BanCorp (Puerto Rico)	1,534		83,649
First Community Bancorp	540		22,664
First National Bankshares of Florida	1,955		48,269
First Republic Bank	612		29,498
Fremont General Corp.	2,751		59,146
Frontier Financial Corp.2	768		29,564
Gold Bancorp Inc.	1,660		24,153
Greater Bay Bancorp	2,107		65,833
Harleysville National Corp.	1,027		26,260
Independent Bank Corp. (Michigan)	814		22,116
Main Street Banks Inc.2	608		17,851
MB Financial Inc.	1,122		47,954
Mid-State Bancshares	976		26,186
Oriental Financial Group Inc.	788		22,324
Pacific Capital Bancorp	1,778		56,594
Prosperity Bancshares Inc.	839		22,863
R&G Financial Corp. Class B	1,216		45,746
Riggs National Corp.	848		17,901
Sandy Spring Bancorp Inc.2	600		20,748
Santander BanCorp	220		6,138
Silicon Valley Bancshares1	1,466		58,655
Southwest Bancorp of Texas Inc.	2,692		63,100
Sterling Bancshares Inc.2	1,823		25,832
Sterling Financial Corp. (Pennsylvania)	776		20,564
Texas Regional Bancshares Inc. Class A	1,864		59,518
Umpqua Holdings Corp.	1,799		44,759
United Community Banks Inc.	1,282		30,871
			1,185,928
BEVERAGES – 0.26%
Coca-Cola Bottling Co. Consolidated	164		8,668
Robert Mondavi Corp. (The) Class A1	440		23,976
			32,644
BIOTECHNOLOGY – 0.78%
Applera Corp. - Celera Genomics Group1	2,996		38,409
Bio-Rad Laboratories Inc. Class A1	672		34,957
Cambrex Corp.	1,024		22,907
			96,273
BUILDING MATERIALS – 0.36%
ElkCorp	700		19,705
NCI Building Systems Inc.1	790		25,398
			45,103

SCHEDULES OF INVESTMENTS 47

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR SMALL CORE INDEX FUND

October 31, 2004

Security	Shares	Value
CHEMICALS – 2.28%
Arch Chemicals Inc.	964	$	27,329
Kronos Worldwide Inc.	128		5,107
MacDermid Inc.	917		28,941
Minerals Technologies Inc.	845		50,784
Mosaic Co. (The)1	5,169		77,742
Olin Corp.	2,875		53,762
OM Group Inc.1	1,166		38,466
			282,131
COAL – 0.63%
Arch Coal Inc.2	2,392		77,788
			77,788
COMMERCIAL SERVICES – 4.45%
Albany Molecular Research Inc.1	863		7,439
Alderwoods Group Inc.1	1,656		16,775
AMN Healthcare Services Inc.1	632		7,458
Bowne & Co. Inc.	1,448		17,999
CDI Corp.	520		8,580
Chemed Corp.	516		31,192
Consolidated Graphics Inc.1	491		20,966
Corrections Corp. of America1	1,327		46,113
Cross Country Healthcare Inc.1	1,036		15,364
First Health Group Corp.1	3,770		60,018
FTI Consulting Inc.1,2	1,754		32,905
Kelly Services Inc. Class A2	764		20,563
Magellan Health Services Inc.1	1,322		49,443
MAXIMUS Inc.1	775		21,064
MPS Group Inc.1	4,336		45,658
Pre-Paid Legal Services Inc.1,2	636		17,738
Quanta Services Inc.1	3,837		25,785
Sotheby’s Holdings Inc. Class A1	1,868		34,913
Spherion Corp.1	2,500		17,975
TeleTech Holdings Inc.1	1,584		15,840
Watson Wyatt & Co. Holdings	1,352		35,896
			549,684
COMPUTERS – 1.90%
CIBER Inc.1	2,298		20,774
Hutchinson Technology Inc.1	1,063		35,727
Intergraph Corp.1	1,502		37,452
MTS Systems Corp.	820		21,152
PalmOne Inc.1,2	1,723		49,915
Perot Systems Corp. Class A1	3,080		49,372
Quantum Corp.1	7,468		20,014
			234,406
COSMETICS & PERSONAL CARE – 0.36%
Chattem Inc.1,2	623		20,846
Elizabeth Arden Inc.1	997		23,908
			44,754
DISTRIBUTION & WHOLESALE – 0.82%
Aviall Inc.1	963		20,849
United Stationers Inc.1	1,366		60,787
WESCO International Inc.1	764		19,161
			100,797
DIVERSIFIED FINANCIAL SERVICES – 2.10%
Affiliated Managers Group Inc.1,2	1,189		66,394
CompuCredit Corp.1	693		13,188
Credit Acceptance Corp.1	236		5,232
Financial Federal Corp.1	772		28,803
Gabelli Asset Management Inc. Class A	274		12,631
Investment Technology Group Inc.1	1,930		29,722
Knight Trading Group Inc.1	4,792		49,789
Piper Jaffray Companies Inc.1,2	797		34,853
W.P. Stewart & Co. Ltd.2	912		18,422
			259,034
ELECTRICAL COMPONENTS & EQUIPMENT – 0.53%
Advanced Energy Industries Inc.1	876		8,637
Power-One Inc.1	3,016		21,172
Rayovac Corp.1	1,422		35,422
			65,231
ELECTRONICS – 3.44%
Benchmark Electronics Inc.1	1,690		57,409
Brady Corp. Class A	804		43,601
Checkpoint Systems Inc.1	1,556		26,608
Coherent Inc.1	1,241		29,945
Cubic Corp.	664		14,608
Electro Scientific Industries Inc.1	1,164		19,741
Itron Inc.1	864		18,092
KEMET Corp.1	3,333		25,864
Methode Electronics Inc.	1,472		19,769
Orbotech Ltd.1	1,307		22,101
Paxar Corp.1	1,474		32,502

48 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR SMALL CORE INDEX FUND

October 31, 2004

Security	Shares	Value
Plexus Corp.1,2	1,784	$	22,104
Thomas & Betts Corp.	2,423		68,668
Woodward Governor Co.	395		23,917
			424,929
ENGINEERING & CONSTRUCTION – 0.99%
Dycom Industries Inc.1	1,988		64,908
EMCOR Group Inc.1	619		24,494
McDermott International Inc.1	2,428		33,142
			122,544
ENTERTAINMENT – 0.90%
Isle of Capri Casinos Inc.1	688		15,583
Penn National Gaming Inc.1	1,407		58,433
Speedway Motorsports Inc.	560		18,536
Vail Resorts Inc.1	951		19,077
			111,629
ENVIRONMENTAL CONTROL – 1.31%
Ionics Inc.1	752		21,432
Mine Safety Appliances Co.	1,251		47,188
Tetra Tech Inc.1	2,313		30,393
Waste Connections Inc.1	1,976		62,283
			161,296
FOOD – 1.20%
American Italian Pasta Co. Class A	733		14,880
Flowers Foods Inc.	1,667		42,275
Hain Celestial Group Inc.1	1,232		19,934
Ralcorp Holdings Inc.	1,204		44,247
Sanderson Farms Inc.	820		26,642
			147,978
FOREST PRODUCTS & PAPER – 0.25%
Wausau-Mosinee Paper Corp.	1,981		30,983
			30,983
HAND & MACHINE TOOLS – 0.83%
Baldor Electric Co.	1,196		28,022
Franklin Electric Co. Inc.	654		25,101
Lincoln Electric Holdings Inc.	1,486		49,603
			102,726
HEALTH CARE - PRODUCTS – 3.51%
Advanced Medical Optics Inc.1	1,467		57,360
CONMED Corp.1	1,229		34,498
Datascope Corp.	516		16,749
Invacare Corp.	1,238		57,171
Oakley Inc.	1,084		13,767
Ocular Sciences Inc.1	823		40,204
PSS World Medical Inc.1	2,641		29,751
Sola International Inc.1	1,324		25,394
Steris Corp.1	2,841		58,894
Sybron Dental Specialties Inc.1	1,596		51,982
Viasys Healthcare Inc.1	1,108		18,936
West Pharmaceutical Services Inc.	1,248		28,592
			433,298
HEALTH CARE - SERVICES – 2.03%
AMERIGROUP Corp.1	1,023		61,380
Apria Healthcare Group Inc.1	2,056		56,252
Molina Healthcare Inc.1	465		17,121
Province Healthcare Co.1	1,808		38,763
Sierra Health Services Inc.1,2	1,033		49,295
Sunrise Senior Living Inc.1	747		28,468
			251,279
HOME BUILDERS – 1.69%
Brookfield Homes Corp.	640		16,576
Champion Enterprises Inc.1,2	2,916		31,755
Fleetwood Enterprises Inc.1,2	2,286		28,781
Meritage Homes Corp.1	423		37,520
Monaco Coach Corp.	1,125		19,969
Palm Harbor Homes Inc.1,2	444		6,656
Technical Olympic USA Inc.2	484		12,240
William Lyon Homes Inc.1	179		12,342
Winnebago Industries Inc.	1,385		43,489
			209,328
HOME FURNISHINGS – 0.62%
American Woodmark Corp.	477		17,735
Ethan Allen Interiors Inc.2	1,531		58,316
			76,051
HOUSEHOLD PRODUCTS & WARES – 0.99%
Central Garden & Pet Co.1	652		23,289
Helen of Troy Ltd.1	961		25,515
Jarden Corp.1	1,121		39,369
Russ Berrie & Co. Inc.	436		9,091
Standard Register Co. (The)	636		6,754
WD-40 Co.2	652		18,429
			122,447

SCHEDULES OF INVESTMENTS 49

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR SMALL CORE INDEX FUND

October 31, 2004

Security	Shares	Value
HOUSEWARES – 0.55%
Toro Co.	999	$	68,182
			68,182
INSURANCE – 2.68%
Arch Capital Group Ltd.1	1,291		48,503
Bristol West Holdings Inc.	776		13,347
Hilb, Rogal & Hobbs Co.	1,306		41,400
Philadelphia Consolidated Holding Corp.1	767		44,471
ProAssurance Corp.1	1,112		39,687
RLI Corp.	930		35,368
Scottish Re Group Ltd.	1,476		33,210
State Auto Financial Corp.	456		12,973
Triad Guaranty Inc.1	384		20,932
21st Century Insurance Group	1,072		14,204
U.S.I. Holdings Corp.1,2	1,614		15,680
Universal American Financial Corp.1	952		11,576
			331,351
INTERNET – 1.53%
Ariba Inc.1	2,556		39,235
CMGI Inc.1	14,046		19,243
EarthLink Inc.1	5,963		61,598
HomeStore Inc.1	4,530		11,076
Priceline.com Inc.1,2	891		17,767
ProQuest Co.1	1,064		27,728
Vignette Corp.1	11,716		13,005
			189,652
IRON & STEEL – 0.84%
Reliance Steel & Aluminum Co.	1,159		39,777
Steel Dynamics Inc.2	1,920		63,744
			103,521
LEISURE TIME – 0.25%
K2 Inc.1,2	1,928		31,272
			31,272
LODGING – 0.97%
Ameristar Casinos Inc.	456		15,835
Boyd Gaming Corp.	2,088		69,927
Kerzner International Ltd.1	681		34,540
			120,302
MACHINERY – 3.46%
Applied Industrial Technologies Inc.	718		26,710
Briggs & Stratton Corp.	922		66,209
Flowserve Corp.1	2,263		48,836
IDEX Corp.	2,032		74,981
JLG Industries Inc.2	1,796		29,957
Joy Global Inc.	1,907		64,438
Manitowoc Co. Inc. (The)	1,099		38,795
Nordson Corp.	1,077		37,717
Stewart & Stevenson Services Inc.	1,067		18,139
Thomas Industries Inc.	640		21,632
			427,414
MANUFACTURING – 2.38%
Actuant Corp. Class A1	968		38,401
AptarGroup Inc.	1,391		65,266
Brink’s Co. (The)	2,332		74,857
CLARCOR Inc.	1,043		51,420
ESCO Technologies Inc.1	532		37,134
Jacuzzi Brands Inc.1	3,065		26,512
			293,590
MEDIA – 1.16%
Insight Communications Co. Inc.1	2,099		17,758
Liberty Corp.	689		27,856
Martha Stewart Living Omnimedia Inc. Class A1,2	547		9,682
Media General Inc. Class A	851		49,613
Mediacom Communications Corp.1	2,548		16,689
Pulitzer Inc.	408		21,510
			143,108
METAL FABRICATE & HARDWARE – 1.02%
Kaydon Corp.	1,164		34,454
Mueller Industries Inc.	1,299		34,631
Worthington Industries Inc.	2,883		57,228
			126,313
MINING – 1.06%
AMCOL International Corp.	1,024		18,012
Coeur d’Alene Mines Corp.1,2	8,775		43,436
Meridian Gold Inc.1	4,084		69,020
			130,468
OFFICE & BUSINESS EQUIPMENT – 0.27%
Global Imaging Systems Inc.1	952		33,510
			33,510

50 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR SMALL CORE INDEX FUND

October 31, 2004

Security	Shares	Value
OIL & GAS – 3.69%
Cimarex Energy Co.1	1,615	$	57,946
Comstock Resources Inc.1	1,436		31,592
Denbury Resources Inc.1	2,242		55,602
Encore Acquisition Co.1	535		17,468
Frontier Oil Corp.	1,067		26,227
KCS Energy Inc.1	2,015		27,424
Magnum Hunter Resources Inc.1	2,884		34,896
Range Resources Corp.2	2,783		43,693
Remington Oil & Gas Corp.1	872		22,184
Southwestern Energy Co.1	1,488		68,359
Stone Energy Corp.1	1,032		42,487
Swift Energy Co.1	1,156		28,033
			455,911
OIL & GAS SERVICES – 3.00%
Core Laboratories NV1	1,096		27,181
Hanover Compressor Co.1	2,769		36,052
Hydril Co. LP1	674		29,649
Key Energy Services Inc.1	5,371		61,766
Lone Star Technologies Inc.1	1,193		31,495
Maverick Tube Corp.1	1,750		46,147
Oceaneering International Inc.1	1,029		36,581
Oil States International Inc.1	1,096		20,123
Universal Compression Holdings Inc.1	851		29,428
Veritas DGC Inc.1	1,377		29,055
W-H Energy Services Inc.1	1,132		23,036
			370,513
PHARMACEUTICALS – 2.14%
Alpharma Inc. Class A	1,676		28,408
Andrx Corp.1	2,992		64,747
Nabi Biopharmaceuticals1	2,384		33,018
NeighborCare Inc.1	1,485		38,061
Par Pharmaceutical Companies Inc.1	1,387		54,717
Perrigo Co.	2,531		46,014
			264,965
REAL ESTATE – 0.48%
Jones Lang LaSalle Inc.1	1,166		37,312
Trammell Crow Co.1	1,396		21,568
			58,880
REAL ESTATE INVESTMENT TRUSTS – 6.86%
CarrAmerica Realty Corp.2	2,235		72,034
CBL & Associates Properties Inc.	1,204		78,922
CenterPoint Properties Trust	1,979		91,628
Corporate Office Properties Trust	1,312		35,975
Cousins Properties Inc.	1,608		59,850
Entertainment Properties Trust2	1,009		40,259
Equity One Inc.	1,492		31,317
Essex Property Trust Inc.2	856		67,162
Heritage Property Investment Trust Inc.	1,094		33,465
LaSalle Hotel Properties	1,148		32,971
Maguire Properties Inc.	1,515		39,617
Manufactured Home Communities Inc.	863		29,765
New Century Financial Corp.2	1,950		107,542
Post Properties Inc.2	1,629		52,275
Shurgard Storage Centers Inc. Class A2	1,889		74,993
			847,775
RETAIL – 5.88%
Big 5 Sporting Goods Corp.1	632		16,046
Casey’s General Store Inc.2	1,933		34,407
Cash America International Inc.	1,154		29,196
CKE Restaurants Inc.1,2	1,984		23,947
CSK Auto Corp.1	1,923		28,153
Dress Barn Inc.1	876		14,042
Electronics Boutique Holdings Corp.1	541		18,470
Finish Line Inc. (The)	876		30,336
GameStop Corp.1	872		17,082
IHOP Corp.2	833		31,904
Insight Enterprises Inc.1	1,999		37,091
Landry’s Restaurants Inc.2	945		25,591
Linens ‘n Things Inc.1	1,860		44,789
Men’s Wearhouse Inc. (The)1	1,385		43,046
Movie Gallery Inc.	1,092		17,669
Nu Skin Enterprises Inc. Class A2	2,168		41,929
Papa John’s International Inc.1	524		16,915
Pep Boys-Manny, Moe & Jack Inc.	2,380		33,844
School Specialty Inc.1	753		30,813
Sharper Image Corp.1	456		9,337
Sports Authority Inc. (The)1	921		22,270
Steak n Shake Co. (The)1	1,064		17,535
Stein Mart Inc.1	1,092		18,149

SCHEDULES OF INVESTMENTS 51

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR SMALL CORE INDEX FUND

October 31, 2004

Security	Shares	Value
TBC Corp.1	828	$	18,406
Too Inc.1	1,424		31,356
West Marine Inc.1,2	556		13,639
Zale Corp.1	2,138		60,976
			726,938
SAVINGS & LOANS – 2.48%
Bank Mutual Corp.	3,252		39,935
BankAtlantic Bancorp Inc. Class A	1,903		33,283
BankUnited Financial Corp. Class A1	1,144		34,034
Brookline Bancorp Inc.2	2,423		37,532
First Niagara Financial Group Inc.2	3,208		44,720
Flagstar Bancorp Inc.	1,272		26,572
Harbor Florida Bancshares Inc.	892		28,580
Northwest Bancorp Inc.	512		12,186
Sterling Financial Corp. (Washington)1	923		34,677
TierOne Corp.	691		15,395
			306,914
SEMICONDUCTORS – 2.04%
AMIS Holdings Inc.1	1,372		20,854
Amkor Technology Inc.1	3,760		18,725
Brooks Automation Inc.1	1,812		26,963
ESS Technology Inc.1	1,452		9,496
Helix Technology Corp.	1,080		15,163
Integrated Device Technology Inc.1	4,361		51,547
Mattson Technology Inc.1	1,668		13,995
MKS Instruments Inc.1	1,480		23,414
Mykrolis Corp.1	1,708		17,951
ON Semiconductor Corp.1	4,204		15,134
Photronics Inc.1,2	1,160		20,358
TriQuint Semiconductor Inc.1	5,184		18,455
			252,055
SOFTWARE – 3.52%
CCC Information Services Group Inc.1	524		9,600
CSG Systems International Inc.1	2,012		33,822
eFunds Corp.1	1,983		39,045
Epicor Software Corp.1,2	1,630		25,053
infoUSA Inc.1	1,428		14,958
Inter-Tel Inc.	832		22,464
Keane Inc.1	2,221		35,114
ManTech International Corp. Class A1	708		15,307
MicroStrategy Inc. Class A1	516		30,950
NetIQ Corp.1	2,360		29,925
Parametric Technology Corp.1	11,027		57,230
SERENA Software Inc.1,2	1,212		21,501
Take-Two Interactive Software Inc.1,2	1,846		60,844
Wind River Systems Inc.1	2,955		39,567
			435,380
TELECOMMUNICATIONS – 3.61%
Adaptec Inc.1	4,524		35,287
Advanced Fibre Communications Inc.1	3,639		56,841
Anixter International Inc.	1,300		50,232
Arch Wireless Inc. Class A1	808		23,101
Aspect Communications Corp.1	1,716		16,328
Black Box Corp.	740		29,067
Centennial Communications Corp.1	992		6,190
Commonwealth Telephone Enterprises Inc.1,2	866		39,516
CommScope Inc.1,2	1,856		33,427
Dobson Communications Corp. Class A1	4,933		6,561
Enterasys Networks Inc.1	8,060		11,284
General Communication Inc. Class A1	1,780		16,305
Golden Telecom Inc.2	448		12,764
Infonet Services Corp. Class B1	2,459		4,475
Price Communications Corp.1	1,724		27,463
PTEK Holdings Inc.1	2,686		26,753
Sycamore Networks Inc.1	7,513		27,573
Time Warner Telecom Inc. Class A1	2,064		10,568
Westell Technologies Inc. Class A1	2,188		12,275
			446,010
TEXTILES – 0.25%
G&K Services Inc. Class A	797		31,314
			31,314
TRANSPORTATION – 3.12%
EGL Inc.1	1,406		44,964
Florida East Coast Industries Inc.	948		35,891
Genesee & Wyoming Inc. Class A1	1,000		25,320
Kansas City Southern Industries Inc.1,2	2,580		43,731
Kirby Corp.1	818		34,356
Old Dominion Freight Line Inc.1	779		21,831
OMI Corp.2	3,776		67,779
Pacer International Inc.1	1,180		20,945

52 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR SMALL CORE INDEX FUND

October 31, 2004

Security	Shares or Principal		Value
Swift Transportation Co. Inc.1		2,175	$	41,107
Werner Enterprises Inc.		2,330		49,396
				385,320
TOTAL COMMON STOCKS (Cost: $12,021,405)				12,349,256
CORPORATE BONDS & NOTES – 0.09%
METAL FABRICATE & HARDWARE – 0.09%
Mueller Industries Inc.
6.00%, 11/01/143	$	11,042		10,821
				10,821
TOTAL CORPORATE BONDS & NOTES (Cost: $11,041)				10,821
SHORT-TERM INVESTMENTS – 11.41%
COMMERCIAL PAPER – 1.93%
Amsterdam Funding Corp.
1.79%, 11/08/044		6,970		6,968
Aspen Funding Corp.
1.85%, 11/01/044		26,674		26,674
Barton Capital Corp.
1.78%, 11/04/044		8,030		8,029
1.79%, 11/08/044		7,294		7,292
CRC Funding LLC
1.78%, 11/09/044		4,647		4,645
Delaware Funding Corp.
1.78%, 11/10/044		5,112		5,109
Edison Asset Securitization
1.45%, 11/09/044		9,294		9,291
1.59%, 12/02/044		9,294		9,281
Eureka Securitization Inc.
1.79%, 11/01/044		3,949		3,949
Ford Credit Auto Receivables
1.85%, 01/14/054		4,647		4,630
Grampian Funding LLC
1.59%, 11/30/044		4,647		4,641
Liberty Street Funding Corp.
1.80%, 11/12/044		2,323		2,323
Nationwide Building Society
1.63%, 12/09/044		7,714		7,701
Security	Principal		Value
Polonius Inc.
1.79%, 11/12/044	$	4,647	$	4,644
Prudential Funding LLC
1.60%, 12/01/044		4,647		4,641
1.85%, 11/01/044		23,235		23,235
Ranger Funding Co. LLC
1.79%, 11/01/044		5,328		5,328
Scaldis Capital LLC
1.78%, 11/08/044		20,911		20,904
Thames Asset Global Securitization No. 1 Inc.
1.81%, 11/12/044		5,436		5,433
UBS Finance (Delaware)
1.11%, 12/17/044		13,941		13,921
1.85%, 11/01/044		46,470		46,470
Windmill Funding Corp.
1.79%, 11/02/044		1,394		1,394
1.79%, 11/03/044		5,576		5,576
1.79%, 11/08/044		6,763		6,763
				238,842
FLOATING RATE NOTES – 3.43%
American Express Credit Corp.
1.95%, 10/26/054		9,294		9,299
Bank of Nova Scotia
1.85%, 09/26/054		2,323		2,323
Beta Finance Inc.
1.78%, 05/04/054,5		5,576		5,576
1.89%, 09/23/054,5		8,365		8,362
1.89%, 09/27/054,5		7,435		7,432
1.91%, 03/15/054,5		4,647		4,648
2.04%, 10/27/054,5		8,829		8,839
Canadian Imperial Bank of Commerce
1.79%, 09/13/054		13,941		13,937
1.90%, 10/31/054		9,294		9,292
CC USA Inc.
1.78%, 05/04/054,5		9,294		9,293
2.06%, 07/29/054,5		9,294		9,292
Den Danske Bank NY
1.79%, 08/12/054		9,294		9,292
1.87%, 08/26/054		9,294		9,292
2.00%, 10/17/054		9,294		9,291

SCHEDULES OF INVESTMENTS 53

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR SMALL CORE INDEX FUND

October 31, 2004

Security	Principal		Value
Depfa Bank PLC
1.86%, 09/15/054	$	9,294	$	9,294
Dorada Finance Inc.
2.06%, 07/29/054,5		7,714		7,712
Five Finance Inc.
1.91%, 04/29/054,5		7,435		7,435
HBOS Treasury Services PLC
1.96%, 04/22/054		9,294		9,294
K2 USA LLC
1.81%, 09/12/054,5		9,294		9,292
1.82%, 06/10/054,5		9,294		9,293
1.89%, 10/20/054,5		9,294		9,294
2.05%, 07/25/054,5		4,647		4,646
Links Finance LLC
1.82%, 04/15/054,5		9,294		9,293
2.12%, 04/25/054		9,294		9,297
National City Bank (Ohio)
1.79%, 08/09/054		9,294		9,292
1.85%, 06/10/054		4,647		4,648
1.86%, 06/23/054		9,294		9,292
Nationwide Building Society
1.96%, 10/28/054,5		15,800		15,802
Norddeutsche Landesbank
2.04%, 07/27/054		9,294		9,292
Northern Rock PLC
1.90%, 10/25/054,5		18,588		18,588
2.02%, 01/13/054,5		8,829		8,829
Permanent Financing PLC
1.81%, 03/10/054		9,294		9,294
1.82%, 12/10/044		4,647		4,647
1.84%, 06/10/054		4,182		4,182
Sigma Finance Inc.
1.84%, 11/15/044		9,294		9,294
1.86%, 08/17/054		4,647		4,647
1.86%, 09/15/054		11,617		11,618
Tango Finance Corp.
1.66%, 05/17/054,5		7,714		7,714
1.70%, 02/25/054,5		5,205		5,204
1.80%, 04/07/054,5		3,411		3,411
1.83%, 01/18/054,5		4,089		4,089
1.84%, 09/15/054,5		8,179		8,178
1.90%, 07/25/054,5		9,294		9,293
Security	Shares or Principal		Value
WhistleJacket Capital LLC
1.83%, 07/15/054,5	$	6,970	$	6,969
1.83%, 09/15/054		6,970		6,969
1.83%, 10/14/054,5		4,647		4,647
1.84%, 06/15/054,5		4,647		4,646
White Pine Finance LLC
1.68%, 05/20/054		4,182		4,182
1.80%, 07/05/054		4,647		4,646
1.82%, 04/15/054,5		6,970		6,970
1.83%, 11/15/044,5		5,576		5,576
1.84%, 06/15/054,5		3,811		3,811
1.89%, 03/29/054		3,996		3,996
1.90%, 08/26/054,5		4,647		4,646
2.02%, 07/11/054		2,323		2,324
Winston Funding Ltd.
2.16%, 01/23/054,5		6,636		6,636
				424,350
MEDIUM-TERM NOTES – 0.24%
CC USA Inc.
1.29%, 04/15/054,5		9,294		9,294
1.51%, 02/15/054,5		6,041		6,044
Dorada Finance Inc.
1.48%, 01/18/054,5		6,970		6,970
K2 USA LLC
1.46%, 01/12/054,5		4,647		4,647
WhistleJacket Capital LLC
1.32%, 02/04/054,5		2,323		2,323
				29,278
MONEY MARKET FUNDS – 2.41%
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares4,6		37,176		37,176
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares4,6		152,301		152,301
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares4,6		102,233		102,233
BlackRock Temp Cash Money Market Fund4		2,083		2,083

54 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR SMALL CORE INDEX FUND

October 31, 2004

Security	Shares or Principal		Value
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares4		3,793	$	3,793
				297,586
REPURCHASE AGREEMENTS – 1.81%
Banc of America Securities LLC
1.86%, 11/01/044,7	$	37,176		37,176
Bank of America N.A.
1.86%, 11/01/044,7		92,940		92,940
Goldman Sachs & Co.
1.86%, 11/01/044,7		92,940		92,940
				223,056
TIME DEPOSITS – 1.32%
Abbey National Treasury Services PLC
1.25%, 01/06/054		9,294		9,294
1.33%, 02/10/054		4,647		4,647
1.39%, 02/02/054		4,646		4,646
1.39%, 04/08/054		6,506		6,505
Bank of New York
1.39%, 11/01/044		9,294		9,294
1.60%, 12/03/044		2,323		2,323
Canadian Imperial Bank of Commerce
1.38%, 11/22/044		2,323		2,323
HBOS Treasury Services PLC
1.24%, 04/01/054		5,948		5,948
Key Bank N.A.
1.81%, 11/01/044		12,082		12,082
National City Bank (Ohio)
1.25%, 01/06/054		9,294		9,294
Nordea Bank PLC
2.11%, 06/07/054		9,294		9,293
Rabobank Nederland NV NY
1.85%, 11/01/044		18,588		18,588
Toronto-Dominion Bank
1.22%, 03/23/054		16,264		16,264
1.34%, 02/10/054		3,718		3,717
1.41%, 11/01/044		6,970		6,970
1.77%, 05/10/054		4,647		4,647
1.90%, 05/11/054		4,647		4,647
Security	Principal		Value
World Savings Bank FSB
1.76%, 11/12/044	$	32,994	$	32,993
				163,475
U.S. GOVERNMENT AGENCY NOTES – 0.27%
Federal Home Loan Mortgage Corp.
1.63%, 04/15/054		6,506		6,515
1.80%, 01/18/054		4,322		4,305
1.80%, 01/19/054		4,647		4,629
2.06%, 05/31/054		4,633		4,577
Federal National Mortgage Association
2.33%, 07/22/054		13,941		13,704
				33,730
TOTAL SHORT-TERM INVESTMENTS (Cost: $1,410,317)				1,410,317
TOTAL INVESTMENTS IN SECURITIES – 111.42% (Cost: $13,442,763)				13,770,394
Other Assets, Less Liabilities – (11.42%)				(1,411,283	)
NET ASSETS – 100.00%			$	12,359,111

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

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 The Fund’s investment adviser is an affiliate of the issuer. See Note 2.

⁷ Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.57% to 8.00% and maturity dates ranging from 6/1/14 to 10/1/34.

SCHEDULES OF INVESTMENTS 55

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR SMALL CORE INDEX FUND

October 31, 2004

SECTOR DIVERSIFICATION

Sector	Value			% of Net Assets
Financial	$	2,989,882		24.20	%
Industrial		2,338,335		18.93
Consumer Non-Cyclical		1,995,747		16.14
Consumer Cyclical		1,689,376		13.65
Technology		955,351		7.73
Communications		940,071		7.61
Energy		904,212		7.32
Basic Materials		547,103		4.43
Short-Term and Other Net Assets		(966	)	(0.01	)
TOTAL	$	12,359,111		100.00	%

See notes to financial statements.

56 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

iSHARES^® MORNINGSTAR SMALL GROWTH INDEX FUND

October 31, 2004

Security	Shares	Value
COMMON STOCKS – 99.99%
ADVERTISING – 0.10%
ValueVision Media Inc. Class A1	1,092	$	11,400
			11,400
AEROSPACE & DEFENSE – 1.10%
Armor Holdings Inc.1	1,321		48,903
Engineered Support Systems Inc.	1,150		55,246
Orbital Sciences Corp.1	2,095		21,683
			125,832
AIRLINES – 0.37%
AirTran Holdings Inc.1	3,663		42,564
			42,564
APPAREL – 0.86%
Carter’s Inc.1	771		24,256
Guess? Inc.1	372		6,212
Quiksilver Inc.1	2,483		67,662
			98,130
BANKS – 2.16%
East West Bancorp Inc.	2,144		85,846
PrivateBancorp Inc.	871		28,177
UCBH Holdings Inc.	1,928		83,078
Wintrust Financial Corp.	881		50,217
			247,318
BIOTECHNOLOGY – 3.26%
Alexion Pharmaceuticals Inc.1	1,149		20,504
ARIAD Pharmaceuticals Inc.1	2,224		12,610
Digene Corp.1,2	673		16,926
Encysive Pharmaceuticals Inc.1	2,239		19,546
Enzo Biochem Inc.1	1,273		22,512
Enzon Pharmaceuticals Inc.1	1,866		30,173
Exelixis Inc.1	3,070		27,323
Genencor International Inc.1	372		5,775
Integra LifeSciences Holdings Corp.1	767		24,605
InterMune Inc.1	1,192		15,460
Nektar Therapeutics1	3,564		51,357
Regeneron Pharmaceuticals Inc.1	1,615		11,741
Serologicals Corp.1,2	1,065		25,187
Telik Inc.1	1,750		32,287
Transkaryotic Therapies Inc.1	1,172		20,287
Vertex Pharmaceuticals Inc.1	3,409		37,090
			373,383
BUILDING MATERIALS – 0.56%
Simpson Manufacturing Co. Inc.	789		50,717
Trex Co. Inc.1	324		12,999
			63,716
CHEMICALS – 0.62%
Cabot Microelectronics Corp.1,2	1,057		38,084
Symyx Technologies Inc.1	1,368		33,468
			71,552
COMMERCIAL SERVICES – 5.12%
Aaron Rents Inc.	1,667		36,174
Advisory Board Co. (The)1	690		22,480
Arbitron Inc.1	1,320		47,744
Bright Horizons Family Solutions Inc.1	568		35,954
CoStar Group Inc.1	707		28,542
Euronet Worldwide Inc.1	1,058		24,249
Gartner Inc. Class A1,2	1,889		22,479
Gartner Inc. Class B1,2	1,221		14,176
Korn/Ferry International1	1,475		25,665
Labor Ready Inc.1,2	1,612		23,132
Laureate Education Inc.1	1,806		70,831
Navigant Consulting Inc.1	2,038		50,685
PAREXEL International Corp.1	1,111		21,387
Resources Connection Inc.1	986		41,392
Rollins Inc.	1,004		26,455
StarTek Inc.	376		10,396
Strayer Education Inc.	595		57,739
Universal Technical Institute Inc.1	805		26,412
			585,892
COMPUTERS – 5.78%
Advanced Digital Information Corp.1	2,744		24,559
Anteon International Corp.1	1,204		47,317
Brocade Communications Systems Inc.1	11,149		75,702
CACI International Inc. Class A1	1,240		75,603
Cray Inc.1	3,608		12,069
Echelon Corp.1	1,431		10,103
Electronics For Imaging Inc.1	2,283		41,185
FactSet Research Systems Inc.	884		44,059
Kronos Inc.1	1,316		64,550
Lexar Media Inc.1	3,303		22,328
Magma Design Automation Inc.1	1,226		15,901
Manhattan Associates Inc.1	1,283		26,391

SCHEDULES OF INVESTMENTS 57

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR SMALL GROWTH INDEX FUND

October 31, 2004

Security	Shares	Value
McDATA Corp. Class A1	3,441	$	21,609
McDATA Corp. Class B1,2	1,146		6,876
Mentor Graphics Corp.1,2	3,084		35,898
Mercury Computer Systems Inc.1	911		23,007
MICROS Systems Inc.1	784		46,350
Silicon Storage Technology Inc.1	3,610		26,895
SRA International Inc. Class A1	660		35,482
Syntel Inc.	284		5,254
			661,138
DISTRIBUTION & WHOLESALE – 0.87%
ScanSource Inc.1	531		32,885
SCP Pool Corp.	2,270		66,261
			99,146
DIVERSIFIED FINANCIAL SERVICES – 0.86%
Asset Acceptance Capital Corp.1	547		9,969
eSpeed Inc.1	1,333		13,130
National Financial Partners Corp.	1,138		34,982
Nelnet Inc. Class A1	344		6,677
Ritchie Bros. Auctioneers Inc.	1,086		33,134
			97,892
ELECTRICAL COMPONENTS & EQUIPMENT – 0.43%
Littelfuse Inc.1	941		30,695
Vicor Corp.	400		3,716
Wilson Greatbatch Technologies Inc.1	900		15,255
			49,666
ELECTRONICS – 4.46%
Analogic Corp.	470		19,996
Cymer Inc.1	1,569		44,748
Dionex Corp.1	896		50,176
FEI Co.1	1,053		20,386
FLIR Systems Inc.1	1,438		76,516
Identix Inc.1	3,312		24,144
InVision Technologies Inc.1	667		30,802
Photon Dynamics Inc.1	707		12,938
Rogers Corp.1	690		29,615
Taser International Inc.1,2	1,195		48,876
Technitrol Inc.1	1,567		25,573
Trimble Navigation Ltd.1	2,192		62,888
TTM Technologies Inc.1	968		9,065
Varian Inc.1	1,487		54,246
			509,969
ENERGY - ALTERNATE SOURCES – 0.90%
FuelCell Energy Inc.1,2	1,868		23,042
Headwaters Inc.1,2	1,433		45,140
KFx Inc.1,2	2,240		20,922
Plug Power Inc.1,2	2,257		13,508
			102,612
ENTERTAINMENT – 2.07%
Alliance Gaming Corp.1,2	1,993		18,435
Gaylord Entertainment Co.1	1,686		56,498
Macrovision Corp.1	2,102		56,838
Scientific Games Corp. Class A1	2,825		59,834
Shuffle Master Inc.1,2	1,063		44,742
			236,347
FOOD – 0.33%
United Natural Foods Inc.1	1,398		38,012
			38,012
HEALTH CARE - PRODUCTS – 7.44%
Advanced Neuromodulation Systems Inc.1	853		27,151
Align Technology Inc.1	1,381		14,328
American Medical Systems Holdings Inc.1	985		36,544
Arrow International Inc.	940		26,851
ArthroCare Corp.1,2	925		28,499
Biosite Inc.1,2	684		33,386
CTI Molecular Imaging Inc.1	1,467		11,501
Cyberonics Inc.1,2	725		13,608
Diagnostic Products Corp.	970		42,826
EPIX Pharmaceuticals Inc.1	825		12,895
Gen-Probe Inc.1	2,112		74,004
Haemonetics Corp.1	1,061		34,854
ICU Medical Inc.1,2	532		11,943
Immucor Inc.1	1,269		39,149
Intuitive Surgical Inc.1	1,447		42,223
Kyphon Inc.1	1,196		30,044
Laserscope1,2	732		19,808
Mentor Corp.	1,585		55,158
Merit Medical Systems Inc.1	1,117		11,561
PolyMedica Corp.2	1,171		40,985
ResMed Inc.1	1,461		68,667
TECHNE Corp.1	1,669		60,117
Thoratec Corp.1,2	2,079		18,254
Ventana Medical Systems Inc.1	601		32,526

58 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR SMALL GROWTH INDEX FUND

October 31, 2004

Security	Shares	Value
VISX Inc.1	2,111	$	35,211
Wright Medical Group Inc.1	1,117		28,852
			850,945
HEALTH CARE - SERVICES – 2.57%
American Healthways Inc.1,2	1,313		39,626
AmSurg Corp.1	1,293		30,243
Centene Corp.1	876		41,549
LabOne Inc.1,2	728		21,840
LifePoint Hospitals Inc.1	1,539		49,894
Odyssey Healthcare Inc.1,2	1,557		12,020
Pediatrix Medical Group Inc.1	1,028		57,825
United Surgical Partners International Inc.1	1,004		35,150
VistaCare Inc. Class A1,2	345		5,348
			293,495
HOME FURNISHINGS – 0.36%
Tempur-Pedic International Inc.1	1,437		23,337
TiVo Inc.1,2	2,654		17,848
			41,185
HOUSEHOLD PRODUCTS & WARES – 0.51%
Yankee Candle Co. Inc. (The)1	2,114		58,558
			58,558
INSURANCE – 0.19%
Direct General Corp.	733		21,624
			21,624
INTERNET – 10.34%
Akamai Technologies Inc.1,2	5,034		69,721
aQuantive Inc.1	2,610		23,360
Ask Jeeves Inc.1,2	2,454		63,264
@Road Inc.1	1,590		10,017
Avocent Corp.1	2,097		74,653
CNET Networks Inc.1,2	5,673		46,348
Digital Insight Corp.1,2	1,320		20,671
Digital River Inc.1	1,304		43,423
Digitas Inc.1	3,032		27,288
DoubleClick Inc.1,2	5,182		32,958
eResearch Technology Inc.1,2	2,031		23,742
F5 Networks Inc.1	1,247		49,818
InfoSpace Inc.1	1,241		65,153
Internet Security Systems Inc.1	1,834		39,908
Ipass Inc.1	2,028		11,661
j2 Global Communications Inc.1,2	990		29,849
Macromedia Inc.1	2,947		79,982
NetFlix Inc.1,2	1,192		11,288
1-800-FLOWERS.COM Inc.1	1,108		8,947
Openwave Systems Inc.1	2,736		32,203
Opsware Inc.1,2	2,575		13,931
Overstock.com Inc.1,2	493		26,691
RealNetworks Inc.1	4,784		23,202
RSA Security Inc.1	2,754		56,347
S1 Corp.1	2,854		26,799
Sapient Corp.1	3,385		27,249
SonicWALL Inc.1	3,077		15,385
TIBCO Software Inc.1	7,317		71,121
United Online Inc.1	2,091		19,634
ValueClick Inc.1	3,411		31,688
Verity Inc.1	1,567		20,246
WebEx Communications Inc.1	1,349		29,678
webMethods Inc.1	2,353		16,306
Websense Inc.1	994		40,327
			1,182,858
LEISURE TIME – 0.36%
Multimedia Games Inc.1	1,205		15,906
WMS Industries Inc.1,2	865		25,301
			41,207
LODGING – 0.63%
Boca Resorts Inc. Class A1	1,405		33,299
Choice Hotels International Inc.	781		38,972
			72,271
MACHINERY – 0.98%
Cognex Corp.	1,703		43,597
Unova Inc.1	2,028		31,130
Wabtec Corp.	1,851		37,520
			112,247
MANUFACTURING – 0.77%
CUNO Inc.1	724		41,630
Matthews International Corp. Class A	1,372		45,969
			87,599
MEDIA – 1.86%
Central European Media Enterprises Ltd.1	659		23,322
Crown Media Holdings Inc.1	412		3,710

SCHEDULES OF INVESTMENTS 59

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR SMALL GROWTH INDEX FUND

October 31, 2004

Security	Shares	Value
Cumulus Media Inc. Class A1	2,243	$	36,449
Emmis Communications Corp.1	2,183		40,822
Entravision Communications Corp.1	2,016		16,229
Information Holdings Inc.1	540		14,791
Lin TV Corp. Class A1	1,143		20,780
Saga Communications Inc.1	783		13,170
Salem Communications Corp. Class A1	507		12,675
Sinclair Broadcast Group Inc. Class A	1,945		13,615
Spanish Broadcasting System Inc. Class A1	1,720		17,406
			212,969
MINING – 0.61%
Apex Silver Mines Ltd.1	1,895		35,550
Hecla Mining Co.1	5,039		33,963
			69,513
OFFICE & BUSINESS EQUIPMENT – 0.22%
Imagistics International Inc.1	724		24,920
			24,920
OIL & GAS – 2.53%
Atwood Oceanics Inc.1	558		26,756
Grey Wolf Inc.1,2	7,943		41,145
Helmerich & Payne Inc.	2,001		57,129
Penn Virginia Corp.	700		25,200
Quicksilver Resources Inc.1	1,318		41,688
Spinnaker Exploration Co.1	1,150		36,708
Unit Corp.1	1,646		61,050
			289,676
OIL & GAS SERVICES – 1.90%
Cal Dive International Inc.1,2	1,519		53,788
CARBO Ceramics Inc.	505		36,486
Global Industries Ltd.1	3,268		21,928
Seacor Holdings Inc.1	741		35,279
Superior Energy Services Inc.1	3,211		41,390
Tetra Technologies Inc.1	959		28,712
			217,583
PHARMACEUTICALS – 7.78%
Abgenix Inc.1	3,330		30,336
Adolor Corp.1	1,593		18,861
Alkermes Inc.1	3,825		47,315
AtheroGenics Inc.1,2	1,592		47,664
Atrix Laboratories Inc.1	942		29,183
Connetics Corp.1,2	1,504		40,428
CV Therapeutics Inc.1	1,342		22,452
Dendreon Corp.1,2	2,294		23,720
Discovery Laboratories Inc.1	1,887		12,850
First Horizon Pharmaceutical Corp.1,2	1,028		25,268
Genta Inc.1	2,121		5,303
ILEX Oncology Inc.1	1,574		39,744
Impax Laboratories Inc.1	2,092		30,878
Inspire Pharmaceuticals Inc.1	1,510		23,647
Kos Pharmaceuticals Inc.1	488		17,422
K-V Pharmaceuticals Co. Class A1	1,443		28,745
Ligand Pharmaceuticals Inc. Class B1	3,139		27,984
Medarex Inc.1,2	3,372		25,661
Medicines Co. (The)1	1,912		50,936
NPS Pharmaceuticals Inc.1,2	1,662		28,387
Onyx Pharmaceuticals Inc.1	1,422		39,901
Priority Healthcare Corp. Class B1	1,577		28,481
Salix Pharmaceuticals Ltd.1	1,534		24,590
Tanox Inc.1,2	1,022		16,045
Taro Pharmaceutical Industries Ltd.1	1,042		27,686
United Therapeutics Inc.1	914		28,572
USANA Health Sciences Inc.1	408		12,171
VCA Antech Inc.1,2	3,489		78,223
Vicuron Pharmaceuticals Inc.1	2,335		32,737
Zymogenetics Inc.1	1,338		25,275
			890,465
REAL ESTATE INVESTMENT TRUSTS – 0.75%
Affordable Residential Communities Inc.	1,279		16,653
American Financial Realty Trust	4,696		69,031
			85,684
RETAIL – 7.59%
AC Moore Arts & Crafts Inc.1	582		14,995
Aeropostale Inc.1	2,376		74,963
Bebe Stores Inc.2	316		9,755
CEC Entertainment Inc.1	1,585		60,262
Children’s Place Retail Stores Inc. (The)1	596		18,399
Christopher & Banks Corp.	1,610		26,163
Coldwater Creek Inc.1	903		20,787
Copart Inc.1	2,853		53,009
Cost Plus Inc.1,2	927		29,942
Dick’s Sporting Goods Inc.1,2	1,185		42,660

60 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR SMALL GROWTH INDEX FUND

October 31, 2004

Security	Shares	Value
Fred’s Inc.	1,386	$	24,297
Guitar Center Inc.1	1,024		45,701
Hibbet Sporting Goods Inc.1	868		19,408
Hot Topic Inc.1	2,076		42,683
Kenneth Cole Productions Inc. Class A	421		11,157
99 Cents Only Stores1	2,101		32,376
P.F. Chang’s China Bistro Inc.1,2	1,046		53,179
Panera Bread Co. Class A1,2	1,222		42,684
Rare Hospitality International Inc.1	1,445		40,041
Red Robin Gourmet Burgers Inc.1	544		22,690
Select Comfort Corp.1	1,363		23,335
Sonic Corp.1	2,516		68,511
Tractor Supply Co.1	1,500		54,420
Tuesday Morning Corp.1	1,128		36,818
			868,235
SAVINGS & LOANS – 1.25%
Commercial Capital Bancorp Inc.	2,096		47,013
Fidelity Bankshares Inc.	597		23,211
Ocwen Financial Corp.1,2	1,571		11,783
Provident Financial Services Inc.	3,411		61,398
			143,405
SEMICONDUCTORS – 9.01%
Actel Corp.1	1,124		17,051
Applied Micro Circuits Corp.1	13,250		48,230
Artisan Components Inc.1	865		27,974
ATMI Inc.1	1,336		31,196
Cirrus Logic Inc.1	3,585		18,104
Conexant Systems Inc.1	19,741		34,152
Credence Systems Corp.1,2	4,146		31,302
Cree Inc.1,2	3,125		107,844
DSP Group Inc.1	1,213		24,054
Emulex Corp.1	3,576		37,584
Entegris Inc.1	2,197		20,333
Exar Corp.1	1,756		26,375
Genesis Microchip Inc.1	1,410		19,980
Lattice Semiconductor Corp.1	4,574		22,733
LTX Corp.1	2,588		16,822
Micrel Inc.1	2,831		31,792
Microsemi Corp.1	2,541		39,487
OmniVision Technologies Inc.1,2	2,401		38,176
Pixelworks Inc.1	1,680		18,967
Power Integrations Inc.1	1,317		28,184
Semtech Corp.1	3,177		66,336
SigmaTel Inc.1	1,137		33,542
Silicon Image Inc.1	3,047		41,744
Siliconix Inc.1	248		10,270
Skyworks Solutions Inc.1	6,723		59,767
Standard Microsystems Corp.1	696		15,326
Tessera Technologies Inc.1	1,091		30,472
Transmeta Corp.1,2	6,380		13,334
Varian Semiconductor Equipment Associates Inc.1	1,553		53,749
Veeco Instruments Inc.1,2	1,099		21,474
Vitesse Semiconductor Corp.1	9,349		25,429
Zoran Corp.1	1,825		18,414
			1,030,197
SOFTWARE – 6.49%
Advent Software Inc.1	1,341		27,973
Altiris Inc.1	862		23,442
ANSYS Inc.1	1,298		35,825
Ascential Software Corp.1	2,501		35,239
Avid Technology Inc.1,2	1,355		71,788
Borland Software Corp.1	3,425		35,072
Cerner Corp.1,2	1,206		54,451
Dendrite International Inc.1	1,631		23,894
Eclipsys Corp.1	1,671		28,357
FileNET Corp.1	1,692		47,088
Hyperion Solutions Corp.1	1,665		66,816
IDX Systems Corp.1	911		30,550
Informatica Corp.1	3,734		29,163
Lawson Software Inc.1	2,521		14,420
Manugistics Group Inc.1	3,032		7,732
Micromuse Inc.1	3,330		14,286
NDCHealth Corp.	1,384		23,237
Pinnacle Systems Inc.1	3,088		14,390
Progress Software Corp.1	1,520		30,187
Quest Software Inc.1	2,217		32,523
Renaissance Learning Inc.	224		4,260
ScanSoft Inc.1	3,427		13,280
THQ Inc.1	1,685		31,847

SCHEDULES OF INVESTMENTS 61

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR SMALL GROWTH INDEX FUND

October 31, 2004

Security	Shares		Value
Transaction Systems Architects Inc. Class A1		1,627	$	26,675
Verint Systems Inc.1		500		19,440
				741,935
TELECOMMUNICATIONS – 4.07%
Aeroflex Inc.1		3,162		35,098
Alamosa Holdings Inc.1		2,941		29,513
Arris Group Inc.1		2,697		12,541
Atheros Communications Inc.1,2		1,272		15,264
Extreme Networks Inc.1		4,784		27,986
Foundry Networks Inc.1		5,054		61,305
Harmonic Inc.1		2,797		23,271
IDT Corp.1		813		10,675
IDT Corp. Class B1		1,910		26,396
InterDigital Communications Corp.1		2,366		37,619
Ixia1		1,167		14,903
Newport Corp.1		1,673		18,888
RF Micro Devices Inc.1,2		8,077		52,581
Tekelec1		2,699		60,242
Viasat Inc.1		1,061		20,042
Wireless Facilities Inc.1		2,545		18,782
				465,106
TOYS, GAMES & HOBBIES – 0.12%
LeapFrog Enterprises Inc.1,2		1,136		13,859
				13,859
TRANSPORTATION – 1.71%
Forward Air Corp.1		743		30,589
Heartland Express Inc.		1,952		39,938
Knight Transportation Inc.1		1,571		36,903
Landstar System Inc.1		1,291		87,711
				195,141
TRUCKING & LEASING – 0.10%
AMERCO1		280		11,306
				11,306
TOTAL COMMON STOCKS (Cost: $11,858,770)				11,436,552
Security	Principal		Value
SHORT-TERM INVESTMENTS – 15.72%
COMMERCIAL PAPER – 2.68%
Amsterdam Funding Corp.
1.79%, 11/08/043	$	8,938	$	8,936
Aspen Funding Corp.
1.85%, 11/01/043		34,203		34,203
Barton Capital Corp.
1.78%, 11/04/043		10,297		10,296
1.79%, 11/08/043		9,354		9,350
CRC Funding LLC
1.78%, 11/09/043		5,959		5,956
Delaware Funding Corp.
1.78%, 11/10/043		6,555		6,552
Edison Asset Securitization
1.45%, 11/09/043		11,917		11,914
1.59%, 12/02/043		11,917		11,901
Eureka Securitization Inc.
1.79%, 11/01/043		5,063		5,063
Ford Credit Auto Receivables
1.85%, 01/14/053		5,959		5,936
Grampian Funding LLC
1.59%, 11/30/043		5,959		5,952
Liberty Street Funding Corp.
1.80%, 11/12/043		2,979		2,978
Nationwide Building Society
1.63%, 12/09/043		9,892		9,874
Polonius Inc.
1.79%, 11/12/043		5,959		5,955
Prudential Funding LLC
1.60%, 12/01/043		5,959		5,951
1.85%, 11/01/043		29,794		29,794
Ranger Funding Co. LLC
1.79%, 11/01/043		6,832		6,832
Scaldis Capital LLC
1.78%, 11/08/043		26,814		26,805
Thames Asset Global Securitization No. 1 Inc.
1.81%, 11/12/043		6,971		6,967
UBS Finance (Delaware)
1.11%, 12/17/043		17,876		17,851
1.85%, 11/01/043		59,587		59,587

62 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR SMALL GROWTH INDEX FUND

October 31, 2004

Security	Principal		Value
Windmill Funding Corp.
1.79%, 11/02/043	$	1,788	$	1,788
1.79%, 11/03/043		7,150		7,150
1.79%, 11/08/043		8,673		8,673
				306,264
FLOATING RATE NOTES – 4.76%
American Express Credit Corp.
1.95%, 10/26/053		11,917		11,924
Bank of Nova Scotia
1.85%, 09/26/053		2,979		2,978
Beta Finance Inc.
1.78%, 05/04/053,4		7,150		7,150
1.89%, 09/23/053,4		10,726		10,722
1.89%, 09/27/053,4		9,534		9,531
1.91%, 03/15/053,4		5,959		5,961
2.04%, 10/27/053,4		11,322		11,334
Canadian Imperial Bank of Commerce
1.79%, 09/13/053		17,876		17,871
1.90%, 10/31/053		11,917		11,915
CC USA Inc.
1.78%, 05/04/053,4		11,917		11,916
2.06%, 07/29/053,4		11,917		11,915
Den Danske Bank NY
1.79%, 08/12/053		11,917		11,915
1.87%, 08/26/053		11,917		11,915
2.00%, 10/17/053		11,917		11,914
Depfa Bank PLC
1.86%, 09/15/053		11,917		11,917
Dorada Finance Inc.
2.06%, 07/29/053,4		9,892		9,890
Five Finance Inc.
1.91%, 04/29/053,4		9,534		9,534
HBOS Treasury Services PLC
1.96%, 04/22/053		11,917		11,917
K2 USA LLC
1.81%, 09/12/053,4		11,917		11,915
1.82%, 06/10/053,4		11,917		11,917
1.89%, 10/20/053,4		11,917		11,918
2.05%, 07/25/053,4		5,959		5,958
Links Finance LLC
1.82%, 04/15/053,4		11,917		11,917
2.12%, 04/25/053		11,917		11,921
National City Bank (Ohio)
1.79%, 08/09/053		11,917		11,915
1.85%, 06/10/053		5,959		5,960
1.86%, 06/23/053		11,917		11,915
Nationwide Building Society
1.96%, 10/28/053,4		20,260		20,262
Norddeutsche Landesbank
2.04%, 07/27/053		11,917		11,915
Northern Rock PLC
1.90%, 10/25/053,4		23,835		23,835
2.02%, 01/13/053,4		11,322		11,322
Permanent Financing PLC
1.81%, 03/10/053		11,917		11,917
1.82%, 12/10/043		5,959		5,959
1.84%, 06/10/053		5,363		5,363
Sigma Finance Inc.
1.84%, 11/15/043		11,917		11,917
1.86%, 08/17/053		5,959		5,959
1.86%, 09/15/053		14,897		14,898
Tango Finance Corp.
1.66%, 05/17/053,4		9,892		9,891
1.70%, 02/25/053,4		6,674		6,673
1.80%, 04/07/053,4		4,374		4,374
1.83%, 01/18/053,4		5,244		5,244
1.84%, 09/15/053,4		10,487		10,486
1.90%, 07/25/053,4		11,917		11,917
WhistleJacket Capital LLC
1.83%, 07/15/053,4		8,938		8,937
1.83%, 09/15/053		8,938		8,937
1.83%, 10/14/053,4		5,959		5,958
1.84%, 06/15/053,4		5,959		5,958
White Pine Finance LLC
1.68%, 05/20/053		5,363		5,363
1.80%, 07/05/053		5,959		5,958
1.82%, 04/15/053,4		8,938		8,938
1.83%, 11/15/043,4		7,150		7,150
1.84%, 06/15/053,4		4,886		4,886
1.89%, 03/29/053		5,125		5,124
1.90%, 08/26/053,4		5,959		5,958
2.02%, 07/11/053		2,979		2,979
Winston Funding Ltd.
2.16%, 01/23/053,4		8,509		8,509
				544,142

SCHEDULES OF INVESTMENTS 63

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR SMALL GROWTH INDEX FUND

October 31, 2004

Security	Shares or Principal		Value
MEDIUM-TERM NOTES – 0.33%
CC USA Inc.
1.29%, 04/15/053,4	$	11,917	$	11,917
1.51%, 02/15/053,4		7,746		7,750
Dorada Finance Inc.
1.48%, 01/18/053,4		8,938		8,938
K2 USA LLC
1.46%, 01/12/053,4		5,959		5,959
WhistleJacket Capital LLC
1.32%, 02/04/053,4		2,979		2,979
				37,543
MONEY MARKET FUNDS – 3.24%
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares3,5		47,670		47,670
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares3,5		184,449		184,449
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares3,5		131,093		131,093
BlackRock Temp Cash Money Market Fund3		2,671		2,671
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares3		4,864		4,864
				370,747
REPURCHASE AGREEMENTS – 2.50%
Banc of America Securities LLC
1.86%, 11/01/043,6		47,670		47,670
Bank of America N.A.
1.86%, 11/01/043,6		119,175		119,175
Goldman Sachs & Co.
1.86%, 11/01/043,6		119,175		119,175
				286,020
TIME DEPOSITS – 1.83%
Abbey National Treasury Services PLC
1.25%, 01/06/053		11,917		11,917
1.33%, 02/10/053		5,959		5,958
1.39%, 02/02/053		5,959		5,959
1.39%, 04/08/053		8,342		8,342
Security	Principal		Value
Bank of New York
1.39%, 11/01/043	$	11,917	$	11,917
1.60%, 12/03/043		2,979		2,979
Canadian Imperial Bank of Commerce
1.38%, 11/22/043		2,972		2,972
HBOS Treasury Services PLC
1.24%, 04/01/053		7,627		7,627
Key Bank N.A.
1.81%, 11/01/043		15,493		15,493
National City Bank (Ohio)
1.25%, 01/06/053		11,917		11,918
Nordea Bank PLC
2.11%, 06/07/053		11,917		11,916
Rabobank Nederland NV NY
1.85%, 11/01/043		23,835		23,835
Toronto-Dominion Bank
1.22%, 03/23/053		20,856		20,854
1.34%, 02/10/053		4,767		4,767
1.41%, 11/01/043		8,938		8,938
1.77%, 05/10/053		5,959		5,958
1.90%, 05/11/053		5,959		5,958
World Savings Bank FSB
1.76%, 11/12/043		42,307		42,306
				209,614
U.S. GOVERNMENT AGENCY NOTES – 0.38%
Federal Home Loan Mortgage Corp.
1.63%, 04/15/053		8,342		8,354
1.80%, 01/18/053		5,542		5,520
1.80%, 01/19/053		5,959		5,936
2.06%, 05/31/053		5,941		5,869
Federal National Mortgage Association
2.33%, 07/22/053		17,876		17,573
				43,252
TOTAL SHORT-TERM INVESTMENTS (Cost: $1,797,582)				1,797,582

64 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR SMALL GROWTH INDEX FUND

October 31, 2004

	Value
TOTAL INVESTMENTS IN SECURITIES – 115.71% (Cost: $13,656,352)	$	13,234,134
Other Assets, Less Liabilities – (15.71%)		(1,796,536	)
NET ASSETS – 100.00%	$	11,437,598

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 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.

⁵ The Fund’s investment adviser is an affiliate of the issuer. See Note 2.

⁶ Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.57% to 8.00% and maturity dates ranging from 6/1/14 to 10/1/34.

SECTOR DIVERSIFICATION

Sector	Value		% of Net Assets
Consumer Non-Cyclical	$	3,123,884	27.30	%
Technology		2,458,190	21.50
Communications		1,872,333	16.37
Consumer Cyclical		1,512,944	13.23
Industrial		1,155,476	10.11
Energy		609,871	5.33
Financial		562,789	4.92
Basic Materials		141,065	1.23
Short-Term and Other Net Assets		1,046	0.01
TOTAL	$	11,437,598	100.00	%

See notes to financial statements.

SCHEDULES OF INVESTMENTS 65

Schedule of Investments (Unaudited)

iSHARES^® MORNINGSTAR SMALL VALUE INDEX FUND

October 31, 2004

Security	Shares	Value
COMMON STOCKS – 100.25%
AEROSPACE & DEFENSE – 0.17%
Triumph Group Inc.1	604	$	20,753
			20,753
AGRICULTURE – 0.86%
Loews Corp. - Carolina Group	2,163		58,531
Universal Corp.	1,053		48,206
			106,737
AIRLINES – 0.97%
Alaska Air Group Inc.1	1,152		30,344
Continental Airlines Inc. Class B1	2,724		25,279
Delta Air Lines Inc.1,2	4,787		26,089
ExpressJet Holdings Inc.1	1,568		17,436
Northwest Airlines Corp.1,2	2,353		20,824
			119,972
APPAREL – 1.06%
Kellwood Co.	1,122		35,298
Phillips-Van Heusen Corp.	1,043		23,770
Russell Corp.	1,173		20,281
Stride Rite Corp.	1,638		16,953
Tommy Hilfiger Corp.1	3,697		35,491
			131,793
AUTO PARTS & EQUIPMENT – 2.55%
ArvinMeritor Inc.	2,810		52,435
Bandag Inc.	269		12,374
Cooper Tire & Rubber Co.	3,080		59,998
Goodyear Tire & Rubber Co. (The)1,2	7,118		71,749
Modine Manufacturing Co.	1,235		37,927
Superior Industries International Inc.2	891		24,298
Tenneco Automotive Inc.1	1,731		22,053
Visteon Corp.	5,078		36,105
			316,939
BANKS – 10.47%
AMCORE Financial Inc.	923		28,087
Central Pacific Financial Corp.	966		29,511
Chemical Financial Corp.	894		33,373
Chittenden Corp.2	1,864		52,788
Citizens Banking Corp.	1,496		48,994
City Holding Co.	689		23,874
Community Bank System Inc.	1,150		31,751
Community First Bankshares Inc.	1,494		48,137
Corus Bankshares Inc.	617		28,388
First Charter Corp.	1,194		30,483
First Commonwealth Financial Corp.	2,873		41,716
First Financial Bancorp	1,767		30,816
First Merchants Corp.	765		19,033
First Midwest Bancorp Inc.	1,886		65,840
1st Source Corp.	434		11,766
FNB Corp. (Pennsylvania)	1,724		35,394
Glacier Bancorp Inc.	1,000		31,650
Hancock Holding Co.	1,173		37,125
Irwin Financial Corp.2	716		17,850
National Penn Bancshares Inc.2	1,125		29,767
NBT Bancorp Inc.	1,318		30,499
Old National Bancorp	2,683		66,458
Provident Bankshares Corp.	1,336		46,399
Republic Bancorp Inc.	2,588		43,245
S&T Bancorp Inc.	961		34,634
South Financial Group Inc. (The)	2,848		85,497
Sterling Bancorp	592		17,085
Susquehanna Bancshares Inc.	1,917		47,676
TrustCo Bank Corp. NY	3,003		40,210
UMB Financial Corp.	609		31,333
United Bancshares Inc.	1,669		61,202
Unizan Financial Corp.	884		23,497
WesBanco Inc.	767		23,255
Whitney Holding Corp.	1,666		72,654
			1,299,987
BIOTECHNOLOGY – 0.34%
Cell Genesys Inc.1	1,848		12,123
Incyte Corp.1,2	2,946		30,638
			42,761
BUILDING MATERIALS – 2.19%
Eagle Materials Inc.	396		27,368
Eagle Materials Inc. Class B	347		23,187
Genlyte Group Inc. (The)1	500		36,780
Lennox International Inc.	2,124		30,713
Texas Industries Inc.	882		44,920
Universal Forest Products Inc.	692		25,379
USG Corp.1,2	1,343		30,070
York International Corp.	1,678		53,428
			271,845

66 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR SMALL VALUE INDEX FUND

October 31, 2004

Security	Shares	Value
CHEMICALS – 5.15%
Albemarle Corp.	1,336	$	47,896
Crompton Corp.	4,629		43,050
Cytec Industries Inc.	1,473		68,509
Ferro Corp.	1,692		35,650
FMC Corp.1	1,395		61,171
Fuller (H.B.) Co.	1,149		30,908
Georgia Gulf Corp.	1,341		60,707
Great Lakes Chemical Corp.	1,777		45,527
Hercules Inc.1	4,113		58,734
Millennium Chemicals Inc.1,2	2,670		57,352
NL Industries Inc.	318		6,344
PolyOne Corp.1	3,681		27,865
Schulman (A.) Inc.	1,210		24,018
Sensient Technologies Corp.	1,774		38,531
Spartech Corp.	1,295		32,634
			638,896
COMMERCIAL SERVICES – 2.30%
ABM Industries Inc.	1,589		32,972
Banta Corp.	1,056		42,958
Central Parking Corp.2	924		12,520
Dollar Thrifty Automotive Group Inc.1	965		23,276
NCO Group Inc.1	1,180		31,565
Stewart Enterprises Inc. Class A1	3,849		27,405
United Rentals Inc.1	2,730		42,178
Valassis Communications Inc.1	2,104		72,336
			285,210
COMPUTERS – 0.81%
Gateway Inc.1	9,462		55,353
Imation Corp.2	1,433		44,810
			100,163
DISTRIBUTION & WHOLESALE – 0.37%
Handleman Co.	1,000		21,510
Watsco Inc.	863		24,561
			46,071
DIVERSIFIED FINANCIAL SERVICES – 0.07%
LaBranche & Co. Inc.1	1,178		8,352
			8,352
ELECTRIC – 5.97%
Aquila Inc.1	9,457		29,979
Avista Corp.	1,830		32,537
Black Hills Corp.	1,311		38,622
CH Energy Group Inc.	644		28,742
Cleco Corp.	1,912		34,837
CMS Energy Corp.1,2	7,737		72,418
Duquesne Light Holdings Inc.	3,128		53,676
El Paso Electric Co.1	1,918		31,935
Empire District Electric Co. (The)2	1,052		21,924
IDACORP Inc.2	1,544		47,833
MGE Energy Inc.	775		24,560
Otter Tail Corp.	935		24,188
PNM Resources Inc.	2,242		52,194
Sierra Pacific Resources Corp.1,2	4,738		45,485
UIL Holdings Corp.	500		25,340
UniSource Energy Corp.	1,286		31,623
Westar Energy Inc.	3,470		72,696
WPS Resources Corp.	1,520		72,200
			740,789
ELECTRICAL COMPONENTS & EQUIPMENT – 0.29%
GrafTech International Ltd.1	3,944		36,521
			36,521
ELECTRONICS – 0.33%
Park Electrochemical Corp.	749		15,736
Watts Water Technologies Inc. Class A	984		25,525
			41,261
ENGINEERING & CONSTRUCTION – 1.09%
Granite Construction Inc.	1,303		31,637
Shaw Group Inc. (The)1	2,563		31,243
URS Corp.1	1,427		39,385
Washington Group International Inc.1	946		32,987
			135,252
ENTERTAINMENT – 0.84%
AMC Entertainment Inc.1	1,125		21,611
Argosy Gaming Co.1	1,122		44,420
Churchill Downs Inc.	367		13,942
Magna Entertainment Corp. Class A1	974		5,484
Six Flags Inc.1	3,792		19,112
			104,569
FOOD – 1.60%
Chiquita Brands International Inc.1	1,647		29,679

SCHEDULES OF INVESTMENTS 67

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR SMALL VALUE INDEX FUND

October 31, 2004

Security	Shares	Value
Corn Products International Inc.	1,426	$	70,159
Fresh Del Monte Produce Inc.2	1,031		27,084
Pilgrim’s Pride Corp.	757		20,469
Ruddick Corp.	1,402		28,222
Weis Markets Inc.	316		11,616
Winn-Dixie Stores Inc.2	3,424		11,779
			199,008
FOREST PRODUCTS & PAPER – 1.00%
Glatfelter Co.	1,555		19,329
Longview Fibre Co.	2,084		32,094
Potlatch Corp.	1,196		56,320
Rock-Tenn Co. Class A	1,052		16,359
			124,102
GAS – 5.79%
Atmos Energy Corp.	3,142		81,095
Energen Corp.	1,330		71,527
Laclede Group Inc. (The)	812		24,482
New Jersey Resources Corp.	1,120		46,043
Nicor Inc.2	1,786		67,011
Northwest Natural Gas Co.	1,102		34,933
Peoples Energy Corp.	1,525		65,239
Piedmont Natural Gas Co.	1,464		66,656
South Jersey Industries Inc.	567		26,762
Southern Union Co.1	2,959		65,009
Southwest Gas Corp.	1,419		34,666
UGI Corp.	2,061		79,616
WGL Holdings Inc.	1,973		56,132
			719,171
HAND & MACHINE TOOLS – 0.74%
Kennametal Inc.	1,488		69,237
Regal-Beloit Corp.	969		22,675
			91,912
HEALTH CARE - SERVICES – 0.52%
Beverly Enterprises Inc.1,2	4,361		37,897
Kindred Healthcare Inc.1	1,096		26,414
			64,311
HOLDING COMPANIES - DIVERSIFIED – 0.13%
Walter Industries Inc.	935		15,904
			15,904
HOME BUILDERS – 0.91%
Beazer Homes USA Inc.	524		57,525
M/I Homes Inc.	435		18,705
WCI Communities Inc.1	1,579		37,264
			113,494
HOME FURNISHINGS – 0.69%
Furniture Brands International Inc.	2,042		44,536
Kimball International Inc. Class B	1,015		13,753
La-Z-Boy Inc.	2,122		27,989
			86,278
HOUSEHOLD PRODUCTS & WARES – 1.45%
American Greetings Corp. Class A	2,579		68,215
Blyth Inc.	1,351		40,625
Harland (John H.) Co.	1,134		36,549
Tupperware Corp.	2,100		35,049
			180,438
INSURANCE – 5.23%
Alfa Corp.	1,516		21,072
AmerUs Group Co.2	1,589		66,388
Argonaut Group Inc.1	1,104		20,435
CNA Surety Corp.1	657		7,733
Commerce Group Inc.	1,220		61,744
Delphi Financial Group Inc. Class A	1,109		45,325
FBL Financial Group Inc. Class A	1,129		29,252
Harleysville Group Inc.	559		11,644
Horace Mann Educators Corp.	1,723		29,291
Infinity Property & Casualty Corp.	836		25,983
LandAmerica Financial Group Inc.	696		34,069
Max Reinsurance Capital Ltd.	796		15,021
Odyssey Re Holdings Corp.2	520		11,367
Ohio Casualty Corp.1	2,510		52,409
Phoenix Companies Inc.	3,634		38,339
Platinum Underwriters Holdings Ltd.	1,098		32,116
Presidential Life Corp.	891		14,238
Selective Insurance Group Inc.	1,121		43,809
Stewart Information Services Corp.	688		29,185
UICI	1,331		39,371
Zenith National Insurance Corp.	504		20,699
			649,490

68 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR SMALL VALUE INDEX FUND

October 31, 2004

Security	Shares	Value
INTERNET – 0.14%
NetBank Inc.	1,934	$	17,948
			17,948
INVESTMENT COMPANIES – 0.21%
MCG Capital Corp.	1,484		26,371
			26,371
IRON & STEEL – 1.44%
AK Steel Holding Corp.1	4,204		40,064
Allegheny Technologies Inc.	3,149		52,935
Carpenter Technology Corp.	826		39,202
Cleveland-Cliffs Inc.1	432		31,493
Schnitzer Steel Industries Inc. Class A2	526		14,859
			178,553
LEISURE TIME – 0.53%
Arctic Cat Inc.	558		14,011
Callaway Golf Co.2	2,631		27,441
Nautilus Group Inc. (The)	1,256		24,680
			66,132
LODGING – 0.93%
Aztar Corp.1	1,390		43,020
La Quinta Corp.1	6,745		54,297
Marcus Corp.	832		17,688
			115,005
MACHINERY – 1.82%
AGCO Corp.1	3,664		71,155
Albany International Corp. Class A	1,132		33,983
NACCO Industries Inc.	220		20,561
Tecumseh Products Co. Class A	548		23,717
Terex Corp.1	2,006		76,228
			225,644
MANUFACTURING – 2.07%
Acuity Brands Inc.	1,722		45,685
Barnes Group Inc.	716		18,616
Federal Signal Corp.2	1,937		32,193
Griffon Corp.1,2	1,092		24,297
Lancaster Colony Corp.	1,143		49,126
Smith (A.O.) Corp.	794		21,073
Tredegar Corp.	928		15,544
Trinity Industries Inc.2	1,625		50,635
			257,169
MEDIA – 1.22%
Charter Communications Inc. Class A1,2	10,785		27,178
Journal Register Co.1	1,541		28,971
Primedia Inc.1	4,342		11,072
Readers Digest Association Inc. (The)	3,495		49,210
Scholastic Corp.1	1,163		35,262
			151,693
METAL FABRICATE & HARDWARE – 0.74%
Commercial Metals Co.	1,175		42,476
Quanex Corp.	672		34,070
Valmont Industries Inc.	691		15,029
			91,575
MINING – 0.73%
Compass Minerals International Inc.	1,265		27,096
Owens & Minor Inc.	1,584		41,485
Stillwater Mining Co.1	1,788		22,100
			90,681
OFFICE & BUSINESS EQUIPMENT – 0.43%
IKON Office Solutions Inc.	5,111		53,665
			53,665
OIL & GAS – 3.96%
Berry Petroleum Co. Class A	737		28,117
Cabot Oil & Gas Corp.	1,350		57,119
Forest Oil Corp.1	2,083		63,532
Harvest Natural Resources Inc.1	1,417		21,425
Holly Corp.2	983		24,133
Houston Exploration Co.1	838		49,107
Plains Exploration & Production Co.1	3,163		79,075
St. Mary Land & Exploration Co.	1,030		40,613
Tesoro Petroleum Corp.1	2,716		82,240
Vintage Petroleum Inc.	2,197		46,137
			491,498
PACKAGING & CONTAINERS – 0.94%
Crown Holdings Inc.1	6,707		76,124
Greif Inc. Class A	440		18,282
Silgan Holdings Inc.	463		21,972
			116,378
PIPELINES – 0.46%
Dynegy Inc. Class A1,2	11,545		56,917
			56,917

SCHEDULES OF INVESTMENTS 69

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR SMALL VALUE INDEX FUND

October 31, 2004

Security	Shares	Value
REAL ESTATE – 0.41%
LNR Property Corp.	811	$	50,720
			50,720
REAL ESTATE INVESTMENT TRUSTS – 18.59%
Alexandria Real Estate Equities Inc.	786		51,915
AMLI Residential Properties Trust2	1,023		32,194
Anthracite Capital Inc.2	2,060		23,855
Bedford Property Investors Inc.	624		17,940
Brandywine Realty Trust	2,172		63,900
BRE Properties Inc. Class A	2,043		81,516
Camden Property Trust	1,628		73,911
Capital Automotive REIT2	1,496		48,261
Colonial Properties Trust2	1,124		43,814
Commercial Net Lease Realty Inc.2	2,145		41,248
Cornerstone Realty Income Trust Inc.	2,300		22,586
Crescent Real Estate Equities Co.	4,090		65,481
EastGroup Properties Inc.	844		29,903
FelCor Lodging Trust Inc.1	1,908		22,171
First Industrial Realty Trust Inc.2	1,673		64,578
Gables Residential Trust2	1,183		43,180
Getty Realty Corp.	788		22,159
Glenborough Realty Trust Inc.2	1,330		27,930
Glimcher Realty Trust2	1,470		37,955
Health Care REIT Inc.	2,121		76,356
Healthcare Realty Trust Inc.	1,933		77,997
Highwoods Properties Inc.	2,190		54,334
Home Properties Inc.	1,359		55,923
HRPT Properties Trust	7,196		80,523
Impac Mortgage Holdings Inc.2	2,604		58,876
Kilroy Realty Corp.	1,150		45,713
Lexington Corporate Properties Trust	1,996		44,790
MFA Mortgage Investments Inc.	3,126		26,383
Mid-America Apartment Communities Inc.	837		32,919
National Health Investors Inc.	1,024		29,297
Nationwide Health Properties Inc.	2,694		60,804
Newcastle Investment Corp.	1,433		43,864
Novastar Financial Inc.2	1,011		43,756
Parkway Properties Inc.	421		21,378
Pennsylvania Real Estate Investment Trust	1,374		55,716
Prentiss Properties Trust	1,605		57,748
PS Business Parks Inc.	674		29,602
RAIT Investment Trust	1,016		27,137
Realty Income Corp.	1,607		77,120
Reckson Associates Realty Corp.	2,870		87,105
Redwood Trust Inc.	886		53,302
Senior Housing Properties Trust	2,127		39,903
SL Green Realty Corp.	1,580		86,616
Sovran Self Storage Inc.	608		23,755
Summit Properties Inc.	1,270		38,519
Sun Communities Inc.	780		30,319
Tanger Factory Outlet Centers Inc.	563		26,602
Taubman Centers Inc.	1,895		54,387
Washington Real Estate Investment Trust2	1,692		53,213
			2,308,454
RETAIL – 4.27%
Asbury Automotive Group Inc.1	592		8,010
Bob Evans Farms Inc.	1,426		33,996
Brown Shoe Co. Inc.	700		19,110
Burlington Coat Factory Warehouse Corp.2	808		17,833
Cato Corp. Class A	832		19,103
Charming Shoppes Inc.1	4,641		35,411
Dillard’s Inc. Class A	2,784		57,044
Genesco Inc.1	888		22,733
Group1 Automotive Inc.1	820		23,198
Haverty Furniture Companies Inc.	758		12,795
Hollywood Entertainment Corp.1	2,335		22,696
Jack in the Box Inc.1	1,476		49,254
Jo-Ann Stores Inc.1	876		21,602
Lone Star Steakhouse & Saloon Inc.	801		19,312
Longs Drug Stores Corp.2	1,216		30,035
Payless ShoeSource Inc.1,2	2,739		26,048
Ryan’s Restaurant Group Inc.1	1,716		24,007
Sonic Automotive Inc.	1,204		24,357
Stage Stores Inc.1	772		27,800
Triarc Companies Inc.	489		5,555
Triarc Companies Inc. Class B	806		9,213
United Auto Group Inc.	802		21,654
			530,766
SAVINGS & LOANS – 2.74%
Anchor BanCorp Wisconsin Inc.	891		23,113
Commercial Federal Corp.	1,641		45,636

70 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR SMALL VALUE INDEX FUND

October 31, 2004

Security	Shares		Value
Dime Community Bancshares		1,389	$	22,307
Downey Financial Corp.		842		46,529
First Federal Capital Corp.		856		28,505
FirstFed Financial Corp.1		634		32,588
Hudson River Bancorp Inc.		1,140		22,355
MAF Bancorp Inc.		1,343		57,574
PFF Bancorp Inc.		615		24,262
Waypoint Financial Corp.		1,350		37,071
				339,940
SEMICONDUCTORS – 0.40%
Axcelis Technologies Inc.1		4,031		34,667
Kulicke & Soffa Industries Inc.1,2		2,072		14,794
				49,461
TELECOMMUNICATIONS – 0.39%
Broadwing Corp.1,2		1,559		8,871
Cincinnati Bell Inc.1		9,906		33,779
Primus Telecommunications Group Inc.1,2		3,106		5,932
				48,582
TEXTILES – 0.08%
UniFirst Corp.		368		9,781
				9,781
TRANSPORTATION – 3.30%
Alexander & Baldwin Inc.		1,663		60,957
Arkansas Best Corp.		906		35,416
General Maritime Corp.1		1,408		53,504
Offshore Logistics Inc.1		868		31,387
Overnite Corp.		1,131		36,599
Overseas Shipholding Group Inc.		1,111		63,271
USF Corp.		1,123		40,248
Yellow Roadway Corp.1		1,834		88,014
				409,396
TRUCKING & LEASING – 0.39%
GATX Corp.		1,792		48,886
				48,886
WATER – 0.17%
California Water Service Group2		702		20,702
				20,702
TOTAL COMMON STOCKS (Cost: $12,036,398)				12,447,896
Security	Principal		Value
SHORT-TERM INVESTMENTS – 11.16%
COMMERCIAL PAPER – 1.90%
Amsterdam Funding Corp.
1.79%, 11/08/043	$	6,887	$	6,885
Aspen Funding Corp.
1.85%, 11/01/043		26,356		26,356
Barton Capital Corp.
1.78%, 11/04/043		7,935		7,933
1.79%, 11/08/043		7,207		7,205
CRC Funding LLC
1.78%, 11/09/043		4,592		4,590
Delaware Funding Corp.
1.78%, 11/10/043		5,051		5,048
Edison Asset Securitization
1.45%, 11/09/043		9,183		9,180
1.59%, 12/02/043		9,183		9,171
Eureka Securitization Inc.
1.79%, 11/01/043		3,901		3,901
Ford Credit Auto Receivables
1.85%, 01/14/053		4,592		4,574
Grampian Funding LLC
1.59%, 11/30/043		4,592		4,586
Liberty Street Funding Corp.
1.80%, 11/12/043		2,296		2,295
Nationwide Building Society
1.63%, 12/09/043		7,622		7,609
Polonius Inc.
1.79%, 11/12/043		4,592		4,589
Prudential Funding LLC
1.60%, 12/01/043		4,592		4,585
1.85%, 11/01/043		22,958		22,958
Ranger Funding Co. LLC
1.79%, 11/01/043		5,265		5,265
Scaldis Capital LLC
1.78%, 11/08/043		20,662		20,655
Thames Asset Global Securitization No. 1 Inc.
1.81%, 11/12/043		5,372		5,369
UBS Finance (Delaware)
1.11%, 12/17/043		13,775		13,756
1.85%, 11/01/043		45,916		45,916

SCHEDULES OF INVESTMENTS 71

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR SMALL VALUE INDEX FUND

October 31, 2004

Security	Principal		Value
Windmill Funding Corp.
1.79%, 11/02/043	$	1,377	$	1,378
1.79%, 11/03/043		5,510		5,509
1.79%, 11/08/043		6,683		6,683
				235,996
FLOATING RATE NOTES – 3.38%
American Express Credit Corp.
1.95%, 10/26/053		9,183		9,188
Bank of Nova Scotia
1.85%, 09/26/053		2,296		2,295
Beta Finance Inc.
1.78%, 05/04/053,4		5,510		5,509
1.89%, 09/23/053,4		8,265		8,262
1.89%, 09/27/053,4		7,347		7,344
1.91%, 03/15/053,4		4,592		4,593
2.04%, 10/27/053,4		8,724		8,733
Canadian Imperial Bank of Commerce
1.79%, 09/13/053		13,775		13,771
1.90%, 10/31/053		9,183		9,181
CC USA Inc.
1.78%, 05/04/053,4		9,183		9,182
2.06%, 07/29/053,4		9,183		9,181
Den Danske Bank NY
1.79%, 08/12/053		9,183		9,181
1.87%, 08/26/053		9,183		9,181
2.00%, 10/17/053		9,183		9,181
Depfa Bank PLC
1.86%, 09/15/053		9,183		9,183
Dorada Finance Inc.
2.06%, 07/29/053,4		7,622		7,620
Five Finance Inc.
1.91%, 04/29/053,4		7,347		7,346
HBOS Treasury Services PLC
1.96%, 04/22/053		9,183		9,183
K2 USA LLC
1.81%, 09/12/053,4		9,183		9,182
1.82%, 06/10/053,4		9,183		9,182
1.89%, 10/20/053,4		9,183		9,183
2.05%, 07/25/053,4		4,592		4,591
Links Finance LLC
1.82%, 04/15/053,4		9,183		9,182
2.12%, 04/25/053		9,183		9,186
National City Bank (Ohio)
1.79%, 08/09/053		9,183		9,181
1.85%, 06/10/053		4,592		4,592
1.86%, 06/23/053		9,183		9,181
Nationwide Building Society
1.96%, 10/28/053,4		15,611		15,613
Norddeutsche Landesbank
2.04%, 07/27/053		9,183		9,181
Northern Rock PLC
1.90%, 10/25/053,4		18,366		18,366
2.02%, 01/13/053,4		8,724		8,725
Permanent Financing PLC
1.81%, 03/10/053		9,183		9,183
1.82%, 12/10/043		4,592		4,592
1.84%, 06/10/053		4,132		4,132
Sigma Finance Inc.
1.84%, 11/15/043		9,183		9,183
1.86%, 08/17/053		4,592		4,592
1.86%, 09/15/053		11,479		11,480
Tango Finance Corp.
1.66%, 05/17/053,4		7,622		7,622
1.70%, 02/25/053,4		5,143		5,142
1.80%, 04/07/053,4		3,370		3,370
1.83%, 01/18/053,4		4,041		4,041
1.84%, 09/15/053,4		8,081		8,080
1.90%, 07/25/053,4		9,183		9,182
WhistleJacket Capital LLC
1.83%, 07/15/053,4		6,887		6,886
1.83%, 09/15/053		6,887		6,886
1.83%, 10/14/053,4		4,592		4,591
1.84%, 06/15/053,4		4,592		4,591
White Pine Finance LLC
1.68%, 05/20/053		4,132		4,132
1.80%, 07/05/053		4,592		4,591
1.82%, 04/15/053,4		6,887		6,887
1.83%, 11/15/043,4		5,510		5,510
1.84%, 06/15/053,4		3,765		3,765
1.89%, 03/29/053		3,949		3,948
1.90%, 08/26/053,4		4,592		4,591
2.02%, 07/11/053		2,296		2,296

72 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR SMALL VALUE INDEX FUND

October 31, 2004

Security	Shares or Principal		Value
Winston Funding Ltd.
2.16%, 01/23/053,4	$	6,557	$	6,557
				419,289
MEDIUM-TERM NOTES – 0.23%
CC USA Inc.
1.29%, 04/15/053,4		9,183		9,183
1.51%, 02/15/053,4		5,969		5,972
Dorada Finance Inc.
1.48%, 01/18/053,4		6,887		6,887
K2 USA LLC
1.46%, 01/12/053,4		4,592		4,591
WhistleJacket Capital LLC
1.32%, 02/04/053,4		2,296		2,296
				28,929
MONEY MARKET FUNDS – 2.30%
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares3,5		36,733		36,733
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares3,5		141,886		141,886
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares3,5		101,015		101,015
BlackRock Temp Cash Money Market Fund3		2,058		2,058
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares3		3,748		3,748
				285,440
REPURCHASE AGREEMENTS – 1.78%
Banc of America Securities LLC
1.86%, 11/01/043,6	$	36,733		36,733
Bank of America N.A.
1.86%, 11/01/043,6		91,832		91,832
Goldman Sachs & Co.
1.86%, 11/01/043,6		91,832		91,832
				220,397
Security	Principal		Value
TIME DEPOSITS – 1.30%
Abbey National Treasury Services PLC
1.25%, 01/06/053	$	9,183	$	9,183
1.33%, 02/10/053		4,592		4,591
1.39%, 02/02/053		4,592		4,592
1.39%, 04/08/053		6,428		6,428
Bank of New York
1.39%, 11/01/043		9,183		9,183
1.60%, 12/03/043		2,296		2,296
Canadian Imperial Bank of Commerce
1.38%, 11/22/043		2,296		2,296
HBOS Treasury Services PLC
1.24%, 04/01/053		5,877		5,877
Key Bank N.A.
1.81%, 11/01/043		11,938		11,938
National City Bank (Ohio)
1.25%, 01/06/053		9,183		9,183
Nordea Bank PLC
2.11%, 06/07/053		9,183		9,182
Rabobank Nederland NV NY
1.85%, 11/01/043		18,366		18,366
Toronto-Dominion Bank
1.22%, 03/23/053		16,071		16,069
1.34%, 02/10/053		3,673		3,673
1.41%, 11/01/043		6,887		6,887
1.77%, 05/10/053		4,592		4,591
1.90%, 05/11/053		4,592		4,591
World Savings Bank FSB
1.76%, 11/12/043		32,600		32,600
				161,526
U.S. GOVERNMENT AGENCY NOTES – 0.27%
Federal Home Loan Mortgage Corp.
1.63%, 04/15/053		6,428		6,438
1.80%, 01/18/053		4,270		4,254
1.80%, 01/19/053		4,592		4,573
2.06%, 05/31/053		4,578		4,523

SCHEDULES OF INVESTMENTS 73

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MORNINGSTAR SMALL VALUE INDEX FUND

October 31, 2004

Security	Principal		Value
Federal National Mortgage Association
2.33%, 07/22/053	$	13,775	$	13,541
				33,329
TOTAL SHORT-TERM INVESTMENTS (Cost: $1,384,906)				1,384,906
TOTAL INVESTMENTS IN SECURITIES – 111.41% (Cost: $13,421,304)				13,832,802
Other Assets, Less Liabilities – (11.41%)				(1,416,250	)
NET ASSETS – 100.00%			$	12,416,552

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 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.

⁵ The Fund’s investment adviser is an affiliate of the issuer. See Note 2.

⁶ Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.57% to 8.00% and maturity dates ranging from 6/1/14 to 10/1/34.

SECTOR DIVERSIFICATION

Sector	Value			% of Net Assets
Financial	$	4,683,314		37.72	%
Industrial		1,746,592		14.07
Consumer Cyclical		1,682,285		13.53
Utilities		1,480,662		11.93
Basic Materials		990,747		7.99
Consumer Non-Cyclical		878,465		7.07
Energy		548,415		4.42
Communications		218,223		1.75
Technology		203,289		1.64
Diversified		15,904		0.13
Short-Term and Other Net Assets		(31,344	)	(0.25	)
TOTAL	$	12,416,552		100.00	%

See notes to financial statements.

74 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Assets and Liabilities (Unaudited)

iSHARES^® TRUST

October 31, 2004

	iShares Morningstar
	Large Core Index Fund			Large Growth Index Fund			Large Value Index Fund			Mid Core Index Fund			Mid Growth Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	28,256,997		$	25,352,461		$	24,376,727		$	15,711,752		$	9,558,380
Affiliated issuersa	$	344,238		$	367,244		$	94,727		$	227,126		$	173,307
Investments in securities, at value (including securities on loanb) (Note 1):
Unaffiliated issuers	$	28,421,851		$	24,171,501		$	24,999,579		$	15,945,421		$	9,718,933
Affiliated issuersa		344,238			367,244			94,727			227,126			173,307
Receivables:
Dividends and interest		19,711			1,331			77,176			6,889			1,291
Capital shares sold		2,408			—			—			—			—
Total Assets		28,788,208			24,540,076			25,171,482			16,179,436			9,893,531
LIABILITIES
Payables:
Investment securities purchased		—			—			39,359			—			—
Collateral for securities on loan (Note 5)		1,677,943			1,796,612			395,404			1,115,282			846,305
Investment advisory fees (Note 2)		8,019			9,399			10,310			5,590			4,339
Total Liabilities		1,685,962			1,806,011			445,073			1,120,872			850,644
NET ASSETS	$	27,102,246		$	22,734,065		$	24,726,409		$	15,058,564		$	9,042,887
Net assets consist of:
Paid-in capital	$	26,966,781		$	23,983,387		$	24,050,815		$	14,849,634		$	8,898,750
Undistributed (distributions in excess of) net investment income (accumulated net investment loss)		16,962			(1,145	)		82,636			8,892			(303	)
Accumulated net realized loss		(46,351	)		(67,217	)		(29,894	)		(33,631	)		(16,113	)
Net unrealized appreciation (depreciation)		164,854			(1,180,960	)		622,852			233,669			160,553
NET ASSETS	$	27,102,246		$	22,734,065		$	24,726,409		$	15,058,564		$	9,042,887
Shares outstanding		450,000			400,000			400,000			250,000			150,000
Net asset value per share	$	60.23		$	56.84		$	61.82		$	60.23		$	60.29

^a The Funds’ investment adviser is an affiliate of the issuers.

^b Securities on loan with market values of $1,637,457, $1,734,670, $380,719, $1,082,484 and $820,518, respectively. See Note 5.

See notes to financial statements.

FINANCIAL STATEMENTS 75

Statements of Assets and Liabilities (Unaudited) (Continued)

iSHARES^® TRUST

October 31, 2004

	iShares Morningstar
	Mid Value Index Fund			Small Core Index Fund		Small Growth Index Fund			Small Value Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	16,231,155		$	13,151,053	$	13,293,140		$	13,141,670
Affiliated issuersa	$	298,834		$	291,710	$	363,212		$	279,634
Investments in securities, at value (including securities on loanb) (Note 1):
Unaffiliated issuers	$	16,736,585		$	13,478,684	$	12,870,922		$	13,553,168
Affiliated issuersa		298,834			291,710		363,212			279,634
Receivables:
Investment securities sold		—			—		—			13,820
Dividends and interest		21,601			4,647		714			18,476
Total Assets		17,057,020			13,775,041		13,234,848			13,865,098
LIABILITIES
Payables:
Investment securities purchased		10,990			8,327		—			61,789
Collateral for securities on loan (Note 5)		1,444,009			1,397,281		1,791,711			1,380,625
Investment advisory fees (Note 2)		6,966			10,322		5,539			6,132
Total Liabilities		1,461,965			1,415,930		1,797,250			1,448,546
NET ASSETS	$	15,595,055		$	12,359,111	$	11,437,598		$	12,416,552
Net assets consist of:
Paid-in capital	$	15,083,457		$	11,721,376	$	11,917,508		$	11,994,810
Undistributed net investment income (accumulated net investment loss)		31,966			45,963		(3,625	)		32,377
Undistributed net realized gain (accumulated net realized loss)		(25,798	)		264,141		(54,067	)		(22,133	)
Net unrealized appreciation (depreciation)		505,430			327,631		(422,218	)		411,498
NET ASSETS	$	15,595,055		$	12,359,111	$	11,437,598		$	12,416,552
Shares outstanding		250,000			200,000		200,000			200,000
Net asset value per share	$	62.38		$	61.80	$	57.19		$	62.08

^a The Funds’ investment adviser is an affiliate of the issuers.

^b Securities on loan with market values of $1,401,004, $1,350,131, $1,725,154 and $1,320,954, respectively. See Note 5.

See notes to financial statements.

76 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations (Unaudited)

iSHARES^® TRUST

For the period ended October 31, 2004^a

	iShares Morningstar
	Large Core Index Fund			Large Growth Index Fund			Large Value Index Fund			Mid Core Index Fund			Mid Growth Index Fund
NET INVESTMENT INCOME
Dividendsb	$	105,213		$	45,784		$	269,733		$	47,715		$	7,966
Interestc		115			85			167			46			28
Securities lending incomec		91			42			33			99			407
Total investment income		105,419			45,911			269,933			47,860			8,401
EXPENSES (Note 2)
Investment advisory fees		16,212			19,352			20,794			9,368			8,704
Total expenses		16,212			19,352			20,794			9,368			8,704
Net investment income (loss)		89,207			26,559			249,139			38,492			(303	)
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized loss from investments		(46,351	)		(67,217	)		(29,894	)		(33,631	)		(16,113	)
Net change in unrealized appreciation (depreciation)		164,854			(1,180,960	)		622,852			233,669			160,553
Net realized and unrealized gain (loss)		118,503			(1,248,177	)		592,958			200,038			144,440
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	207,710		$	(1,221,618	)	$	842,097		$	238,530		$	144,137

^a For the period from June 28, 2004 (commencement of operations) to October 31, 2004.

^b Net of foreign withholding tax of $-, $-, $-, $8 and $15, respectively.

^c Includes income earned from issuers of which the Funds’ investment adviser is an affiliate. See Note 2.

See notes to financial statements.

FINANCIAL STATEMENTS 77

Statements of Operations (Unaudited) (Continued)

iSHARES^® TRUST

For the period ended October 31, 2004^a

	iShares Morningstar
	Mid Value Index Fund			Small Core Index Fund			Small Growth Index Fund			Small Value Index Fund
NET INVESTMENT INCOME
Dividendsb	$	99,910		$	105,668		$	6,478		$	102,710
Interestc		87			155			43			49
Securities lending incomec		269			1,372			1,037			968
Total investment income		100,266			107,195			7,558			103,727
EXPENSES (Note 2)
Investment advisory fees		11,628			22,922			11,183			12,305
Total expenses		11,628			22,922			11,183			12,305
Net investment income (loss)		88,638			84,273			(3,625	)		91,422
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments		(25,798	)		(18,288	)		(54,067	)		(22,133	)
In-kind redemptions		—			282,429			—			—
Net realized gain (loss)		(25,798	)		264,141			(54,067	)		(22,133	)
Net change in unrealized appreciation (depreciation)		505,430			327,631			(422,218	)		411,498
Net realized and unrealized gain (loss)		479,632			591,772			(476,285	)		389,365
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	568,270		$	676,045		$	(479,910	)	$	480,787

^a For the period from June 28, 2004 (commencement of operations) to October 31, 2004.

^b Net of foreign withholding tax of $-, $111, $20 and $-, respectively.

^c Includes income earned from issuers of which the Funds’ investment adviser is an affiliate. See Note 2.

See notes to financial statements.

78 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Unaudited)

iSHARES^® TRUST

For the period ended October 31, 2004^a

	iShares Morningstar
	Large Core Index Fund			Large Growth Index Fund			Large Value Index Fund			Mid Core Index Fund			Mid Growth Index Fund
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss)	$	89,207		$	26,559		$	249,139		$	38,492		$	(303	)
Net realized loss		(46,351	)		(67,217	)		(29,894	)		(33,631	)		(16,113	)
Net change in unrealized appreciation (depreciation)		164,854			(1,180,960	)		622,852			233,669			160,553
Net increase (decrease) in net assets resulting from operations		207,710			(1,221,618	)		842,097			238,530			144,137
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(72,245	)		(27,704	)		(166,503	)		(29,600	)		—
Total distributions to shareholders		(72,245	)		(27,704	)		(166,503	)		(29,600	)		—
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		26,966,781			23,983,387			24,050,815			14,849,634			8,898,750
Net increase in net assets from capital share transactions		26,966,781			23,983,387			24,050,815			14,849,634			8,898,750
INCREASE IN NET ASSETS		27,102,246			22,734,065			24,726,409			15,058,564			9,042,887
NET ASSETS:
Beginning of period		—			—			—			—			—
End of period	$	27,102,246		$	22,734,065		$	24,726,409		$	15,058,564		$	9,042,887
Undistributed (distributions in excess of) net investment income (accumulated net investment loss) included in net assets at end of period	$	16,962		$	(1,145	)	$	82,636		$	8,892		$	(303	)
SHARES ISSUED AND REDEEMED:
Shares sold		450,000			400,000			400,000			250,000			150,000
Net increase in shares outstanding		450,000			400,000			400,000			250,000			150,000

^a For the period from June 28, 2004 (commencement of operations) to October 31, 2004.

See notes to financial statements.

FINANCIAL STATEMENTS 79

Statements of Changes in Net Assets (Unaudited) (Continued)

iSHARES^® TRUST

For the period ended October 31, 2004^a

	iShares Morningstar
	Mid Value Index Fund			Small Core Index Fund			Small Growth Index Fund			Small Value Index Fund
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss)	$	88,638		$	84,273		$	(3,625	)	$	91,422
Net realized gain (loss)		(25,798	)		264,141			(54,067	)		(22,133	)
Net change in unrealized appreciation (depreciation)		505,430			327,631			(422,218	)		411,498
Net increase (decrease) in net assets resulting from operations		568,270			676,045			(479,910	)		480,787
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(56,672	)		(38,310	)		—			(59,045	)
Total distributions to shareholders		(56,672	)		(38,310	)		—			(59,045	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		15,083,457			29,916,281			11,917,508			11,994,810
Cost of shares redeemed		—			(18,194,905	)		—			—
Net increase in net assets from capital share transactions		15,083,457			11,721,376			11,917,508			11,994,810
INCREASE IN NET ASSETS		15,595,055			12,359,111			11,437,598			12,416,552
NET ASSETS:
Beginning of period		—			—			—			—
End of period	$	15,595,055		$	12,359,111		$	11,437,598		$	12,416,552
Undistributed net investment income (accumulated net investment loss) included in net assets at end of period	$	31,966		$	45,963		$	(3,625	)	$	32,377
SHARES ISSUED AND REDEEMED:
Shares sold		250,000			500,000			200,000			200,000
Shares redeemed		—			(300,000	)		—			—
Net increase in shares outstanding		250,000			200,000			200,000			200,000

^a For the period from June 28, 2004 (commencement of operations) to October 31, 2004.

See notes to financial statements.

80 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Unaudited)

iSHARES^® TRUST

(For a share outstanding throughout the period)

For the period ended October 31, 2004^a

	iShares Morningstar
	Large Core Index Fund			Large Growth Index Fund			Large Value Index Fund			Mid Core Index Fund			Mid Growth Index Fund
Net asset value, beginning of period	$	59.92		$	59.96		$	60.13		$	59.61		$	59.33
Income from investment operations:
Net investment income		0.22			0.07			0.63			0.16			—
Net realized and unrealized gain (loss)		0.27			(3.12	)		1.48			0.58			0.96
Total from investment operations		0.49			(3.05	)		2.11			0.74			0.96
Less distributions from:
Net investment income		(0.18	)		(0.07	)		(0.42	)		(0.12	)		—
Total distributions		(0.18	)		(0.07	)		(0.42	)		(0.12	)		—
Net asset value, end of period	$	60.23		$	56.84		$	61.82		$	60.23		$	60.29
Total returnb		0.83	%		(5.08	)%		3.52	%		1.25	%		1.62	%
Ratios/Supplemental data:
Net assets, end of period (000s)	$	27,102		$	22,734		$	24,726		$	15,059		$	9,043
Ratio of expenses to average net assetsc		0.20	%		0.25	%		0.25	%		0.25	%		0.30	%
Ratio of net investment income to average net assetsc		1.09	%		0.34	%		2.97	%		1.03	%		(0.01	)%
Portfolio turnover rated		2	%		3	%		2	%		4	%		2	%

^a For the period from June 28, 2004 (commencement of operations) to October 31, 2004.

^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 81

Financial Highlights (Unaudited) (Continued)

iSHARES^® TRUST

(For a share outstanding throughout the period)

For the period ended October 31, 2004^a

	iShares Morningstar
	Mid Value Index Fund			Small Core Index Fund			Small Growth Index Fund			Small Value Index Fund
Net asset value, beginning of period	$	59.91		$	59.83		$	59.59		$	59.97
Income from investment operations:
Net investment income (loss)		0.36			0.31			(0.02	)		0.46
Net realized and unrealized gain (loss)		2.34			1.74			(2.38	)		1.95
Total from investment operations		2.70			2.05			(2.40	)		2.41
Less Distributions From:
Net investment income		(0.23	)		(0.08	)		—			(0.30	)
Total distributions		(0.23	)		(0.08	)		—			(0.30	)
Net asset value, end of period	$	62.38		$	61.80		$	57.19		$	62.08
Total returnb		4.52	%		3.43	%		(4.03	)%		4.03	%
Ratios/Supplemental data:
Net assets, end of period (000s)	$	15,595		$	12,359		$	11,438		$	12,417
Ratio of expenses to average net assetsc		0.30	%		0.25	%		0.30	%		0.30	%
Ratio of net investment income to average net assetsc		2.29	%		0.92	%		(0.10	)%		2.21	%
Portfolio turnover rated		5	%		4	%		5	%		3	%

^a For the period from June 28, 2004 (commencement of operations) to October 31, 2004.

^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.

82 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Unaudited)

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 October 31, 2004, the Trust offered 73 investment portfolios or funds.

These financial statements relate only to the iShares Morningstar Large Core, iShares Morningstar Large Growth, iShares Morningstar Large Value, iShares Morningstar Mid Core, iShares Morningstar Mid Growth, iShares Morningstar Mid Value, iShares Morningstar Small Core, iShares Morningstar Small Growth and iShares Morningstar Small Value Index Funds (each a “Fund,” collectively the “Funds”). The Funds commenced operations on June 28, 2004.

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 diversified fund under the 1940 Act, except for the iShares Morningstar Large Core, iShares Morningstar Large Growth and iShares Morningstar Large Value Index Funds, which are classified as non-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.

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 are valued at the last sale price on the principal exchange on which they are traded, or in the absence of any sale on the valuation date, at the latest quoted bid price. 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 the latest quoted bid price, which is 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 are valued at the latest quoted bid price, which are obtained from one or more reputable independent pricing services. If quoted prices are unavailable or inaccurate, market values are 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 are valued at amortized cost.

Securities held under a repurchase agreement are valued at a price equal to the amount of the cash investment at the time of valuation on the valuation date. The market values of the underlying securities are determined in accordance with the above discussed valuation methods, as appropriate, for the purpose of determining the adequacy of collateral.

Securities of investment companies, other than investment companies whose shares are traded on an exchange, are valued at the investment company’s published net asset value per share.

NOTES TO THE FINANCIAL STATEMENTS 83

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^® TRUST

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.

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. Dividends and distributions cannot be automatically reinvested in additional shares of 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 period ended October 31, 2004.

For the period ended October 31, 2004, the iShares Morningstar Small Core Index Fund realized net capital gains or losses resulting from in-kind redemptions of large blocks of shares or multiples thereof (“Creation Units”). Because such gains or losses are not taxable to the Fund, 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 Fund’s tax year. This reclassification has no effect on net assets or net asset values per share. The in-kind gains or losses for the period ended October 31, 2004 are disclosed in the Fund’s Statement of Operations.

As of October 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)
Morningstar Large Core	$	28,607,888	$	983,979	$	(825,778	)	$	158,201
Morningstar Large Growth		25,732,807		672,260		(1,866,322	)		(1,194,062	)
Morningstar Large Value		24,476,128		1,309,252		(691,074	)		618,178
Morningstar Mid Core		15,951,440		673,721		(452,614	)		221,107
Morningstar Mid Growth		9,732,344		676,640		(516,744	)		159,896
Morningstar Mid Value		16,540,503		855,043		(360,127	)		494,916
Morningstar Small Core		13,442,970		963,012		(635,588	)		327,424
Morningstar Small Growth		13,672,445		818,922		(1,257,233	)		(438,311	)
Morningstar Small Value		13,424,557		876,416		(468,171	)		408,245

84 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^® TRUST

REPURCHASE AGREEMENTS

Each Fund may enter into repurchase agreements with banks and securities dealers. These transactions involve the purchase of securities with a simultaneous commitment to resell the securities to the bank or the dealer at an agreed-upon date and price. A repurchase agreement is accounted for as an investment by a Fund, collateralized by securities, which are delivered to the Fund’s 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. As of October 31, 2004, a portion of each 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.

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
Morningstar Large Core	0.20	%
Morningstar Large Growth	0.25
Morningstar Large Value	0.25
Morningstar Mid Core	0.25
Morningstar Mid Growth	0.30
Morningstar Mid Value	0.30
Morningstar Small Core	0.25
Morningstar Small Growth	0.30
Morningstar Small Value	0.30

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 period ended October 31, 2004, BGI earned securities lending agent fees as follows:

iShares Index Fund	Securities Lending Agent Fees
Morningstar Large Core	$	98
Morningstar Large Growth		49
Morningstar Large Value		34
Morningstar Mid Core		105
Morningstar Mid Growth		422
Morningstar Mid Value		274
Morningstar Small Core		1,388
Morningstar Small Growth		1,058
Morningstar Small Value		997

NOTES TO THE FINANCIAL STATEMENTS 85

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^® TRUST

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 period ended October 31, 2004, BGIS did not receive any brokerage commissions from the Funds.

Pursuant to an exemptive order issued by the U.S. Securities and Exchange Commission, each Fund invested in the Institutional Shares of the Government Money Market Fund (“GMMF”), Institutional Money Market Fund (“IMMF”), and Prime Money Market Fund (“PMMF”) of Barclays Global Investors Funds. The GMMF, IMMF, and PMMF are feeder funds in a master/feeder fund structure that invest substantially all of their assets in the Government Money Market Master Portfolio, 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 GMMF, IMMF, and PMMF are open-end money market funds available to institutional and accredited investors, including other investment companies managed by BGFA. The GMMF, IMMF, and PMMF seek a high level of income consistent with liquidity and the preservation of capital. While the GMMF, 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 GMMF, 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 Fund in shares of issuers, of which BGFA is an affiliate, for the period ended October 31, 2004, including income earned from these affiliated issuers.

iShares Index Fund and Name of Affiliated Issuer	Number of Shares Held Beginning of Period (in 000’s)	Gross Additions (in 000’s)	Gross Reductions (in 000’s)	Number of Shares Held End of Period (in 000’s)	Value at End of Period		Interest Income
Morningstar Large Core
IMMF	—	219	209	10	$	9,588	$	115
Morningstar Large Growth
IMMF	—	351	342	9		8,927		85
Morningstar Large Value
IMMF	—	306	290	16		15,868		167
Morningstar Mid Core
IMMF	—	121	116	5		4,693		46
Morningstar Mid Growth
IMMF	—	27	22	5		4,519		28
Morningstar Mid Value
IMMF	—	258	247	11		10,840		87
Morningstar Small Core
IMMF	—	347	334	13		13,036		155
Morningstar Small Growth
IMMF	—	175	169	6		5,871		43
Morningstar Small Value
IMMF	—	125	121	4		4,281		49

86 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^® TRUST

The Funds invested cash collateral from securities on loan in the GMMF, 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 GMMF, IMMF and PMMF in connection with the investment of collateral for securities on loan.

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

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the period ended October 31, 2004, were as follows:

iShares Index Fund	Purchases		Sales
Morningstar Large Core	$	705,119	$	443,266
Morningstar Large Growth		709,202		704,013
Morningstar Large Value		538,958		492,485
Morningstar Mid Core		485,628		474,232
Morningstar Mid Growth		174,834		173,940
Morningstar Mid Value		619,856		584,770
Morningstar Small Core		1,158,780		1,057,782
Morningstar Small Growth		606,180		584,368
Morningstar Small Value		451,618		384,301

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

iShares Index Fund	In-kind Purchases		In-kind Sales
Morningstar Large Core	$	26,698,203	$	—
Morningstar Large Growth		23,976,194		—
Morningstar Large Value		24,043,602		—
Morningstar Mid Core		14,841,138		—
Morningstar Mid Growth		8,896,082		—
Morningstar Mid Value		15,065,851		—
Morningstar Small Core		29,851,509		18,184,202
Morningstar Small Growth		11,891,025		—
Morningstar Small Value		11,991,214		—

4. CAPITAL SHARE TRANSACTIONS

As of October 31, 2004, there were an unlimited number of no par value capital shares of beneficial interest authorized. Capital shares are issued and redeemed by each Fund only in Creation Units or multiples thereof. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the Statements of Changes in Net Assets.

NOTES TO THE FINANCIAL STATEMENTS 87

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^® TRUST

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 portfolio sampling representation, of the stocks involved in the relevant Fund’s underlying index, and an amount of cash. A purchase transaction fee and a redemption transaction fee are charged to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units.

5. LOANS OF PORTFOLIO SECURITIES

Each Fund may lend its investment securities to approved borrowers, such as brokers, dealers, and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received by each Fund is required to have a value of at least 102% of the market value of the loaned securities. The collateral is maintained thereafter, at a value equal to at least 100% of the current market value of the securities on loan. The risks to the Funds of securities lending are that the borrower may not provide additional collateral when required, or may not return the securities when due.

As of October 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 October 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.

88 2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes:

NOTES 89

The iShares^® Family of Funds

The following is a list of iShares Funds being offered, along with their respective exchange trading symbols. Please call 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 FTSE/Xinhua China 25 (FXI)

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)

* On December 20, 2004, certain Dow Jones Indexes will undergo certain methodology changes that will impact the composition of the indexes. In order to reflect these changes the iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund will be renamed the iShares Dow Jones U.S. Consumer Goods Sector Index Fund and the iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund will be renamed the iShares Dow Jones U.S. Consumer Services Sector Index Fund. The investment objective, principal investment strategy and portfolio holdings of each of these Funds will also be modified to correspond to the name changes and constituent changes to the Funds’ corresponding indexes.

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., FTSE/Xinhua Index Limited, 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 Semi-Annual Report.

1485-iS-1204

90 2004 iSHARES SEMI-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, issued, sold or promoted by Morningstar, Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds.

^©2004 Barclays Global Investors. All rights reserved. iShares is a registered trademark of Barclays Global Investors, N.A. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.

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 charge, upon request, by calling toll-free 1-800-474-2737; on the Funds’ website at www.iShares.com; and on the Securities and Exchange Commission’s website at www.sec.gov.

The Funds file 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. The Funds’ Forms N-Q are available on the Commission’s website at www.sec.gov. 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.

BGI-F-018-10004

Item 2. Code of Ethics.

Not applicable to this semi-annual filing.

Item 3. Audit Committee Financial Expert.

Not applicable to this semi-annual filing.

Item 4. Principal Accountant Fees and Services.

Not applicable to this semi-annual filing.

Item 5. Audit Committee of Listed Registrants.

Not applicable to this semi-annual filing.

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 were 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) have been effective in achieving the purposes set forth in Section 4(a) of the certifications filed with this Form N-CSRS.

(b) There were no changes 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 quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 11. Exhibits.

(a) (1) Not applicable to this semi-annual filing.

(a) (2) Section 302 Certifications are attached.

(a) (3) Not applicable to the Registrant.

(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:	January 3, 2005

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:	January 3, 2005
By:	/s/ Michael A. Latham
	Michael A. Latham, Principal Financial Officer
Date:	January 3, 2005