-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AmvH0D76JUIHw5aBA1ONNBeByemfaKFesVWlpA0VEajDXMPI934vNU8PE/EuLdQo FfV2x2gQrneu5HUjsFhDYw== 0000950135-05-006831.txt : 20051206 0000950135-05-006831.hdr.sgml : 20051206 20051206160558 ACCESSION NUMBER: 0000950135-05-006831 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20050930 FILED AS OF DATE: 20051206 DATE AS OF CHANGE: 20051206 EFFECTIVENESS DATE: 20051206 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STREETTRACKS INDEX SHARES FUNDS (Formerly Fresco Index Shares Funds) CENTRAL INDEX KEY: 0001168164 IRS NUMBER: 421537593 STATE OF INCORPORATION: MA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-21145 FILM NUMBER: 051247229 BUSINESS ADDRESS: STREET 1: 225 FRANKLIN STREET CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: 866-787-2257 MAIL ADDRESS: STREET 1: C/O STATE STREET BANK AND TRUST STREET 2: 225 FRANKLIN STREET CITY: BOSTON STATE: MA ZIP: 02110 FORMER COMPANY: FORMER CONFORMED NAME: FRESCO INDEX SHARES FUNDS DATE OF NAME CHANGE: 20020225 N-CSR 1 b57369kanvcsr.txt STREETTRACKS INDEX SHARES FUND UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number: 811-21145 ---------- STREETTRACKS(R) INDEX SHARES FUNDS (Exact name of registrant as specified in charter) One Lincoln Street, Boston, Massachusetts 02111 (Address of principal executive offices) (zip code) Scott M. Zoltowski State Street Bank and Trust Company One Lincoln Street Boston, Massachusetts 02111 (Name and address of agent for service) Copy to: Stuart M. Strauss, Esq. Clifford Chance US LLP 31 West 52nd Street New York NY 10019 Registrant's telephone number, including area code: (866) 787-2257 Date of fiscal year end: September 30 Date of reporting period: September 30, 2005 ITEM 1. REPORTS TO SHAREHOLDERS. streetTRACKS (R) Index Shares Funds ANNUAL REPORT SEPTEMBER 30, 2005 (COVER GRAPHIC) (streetTRACKS annual report) PRESIDENT'S LETTER TO SHAREHOLDERS Dear Shareholders, As president of the streetTRACKS Index Shares Funds, I am pleased to provide you with the streetTRACKS Index Shares Funds annual report for the fiscal year ended September 30, 2005. This report includes discussion about the management of the streetTRACKS Dow Jones STOXX 50 Fund and the streetTRACKS Dow Jones EURO STOXX 50 Fund, as well as performance and financial statements for each portfolio. Overall, investor interest in exchange traded funds continued this year. Assets of ETFs listed and traded on U.S. exchanges topped $263.6 billion as of fiscal year ending September 30, 2005, representing an increase of approximately 45.6% over last year. The streetTRACKS Index Shares Funds continue to share in the success of ETFs as well. Total assets invested in the streetTRACKS Index Shares Funds reached over $211.3 million as of September 30, 2005, growing 78.6% over the course of the fiscal year.* As the ETF industry continues to grow, we are firmly committed to developing new and more innovative ETF products -- and applications for those products--to help you meet your investment objectives. We deeply appreciate your support and confidence and wish to thank you for choosing streetTRACKS Index Shares Funds. We look forward to an enduring relationship with our shareholders, built on trust and dedicated to best serving the needs of a growing and increasingly sophisticated investment community. Sincerely, (Signature of James Ross) James Ross President, streetTRACKS Index Shares Funds *Source: Bloomberg; SSgA Advisor Consulting Services as of 9/30/2005 1 (streetTRACKS annual report) MANAGEMENT'S DISCUSSION AND ANALYSIS STREETTRACKS DOW JONES STOXX 50 FUND The streetTRACKS Dow Jones STOXX 50 Fund (the "Fund") seeks to replicate the total return of the Dow Jones STOXX 50 Index (the "Index"). To accomplish this, the Fund utilizes a "passive" or indexing approach and attempts to approximate the investment performance of its benchmark index, before expenses, by investing in a portfolio of stocks to replicate the Index. The Fund performance for the one year period ending September 30, 2005 was 21.60% versus the Index return of 22.01%. The performance was strong during the fourth quarter 2004, up 14.05%. The first two quarters of 2005 were down only slightly, 0.54% and 0.08% respectively, then rebounded during the third quarter 2005, returning 7.30%. All of the constituents in the index added value during the period. Strong corporate earnings (59% of reporting companies beat earnings estimates), positive economic news out of the U.S., increasing merger and acquisition activity thanks to low corporate bond yields, and the revaluation of China's currency, all helped European markets overcome the London terror attacks. Energy companies benefited from oil price increases during the period. The three European oil giants, United Kingdom's BP PLC and Royal Dutch Shell PLC and France's Total SA all provided significant returns for the sector. These three companies together represent over 14% of the index. Financial companies, which represent almost 34% of the index was the second best contributor. The top three contributors in the period were Banco Santander Central Hispano SA, UBS AG, and Credit Suisse Group. These companies are domiciled in Spain and Switzerland, respectively. The strength across borders of these stocks exemplifies the strength of financial stocks during the period. Health Care also had a very good period, led by Roche Holding AG in Switzerland and GlaxoSmithKline PLC in the United Kingdom. These two stocks make up almost 7.0% of the index. The sector constitutes 12.4% of the entire index as of September 2005. Structural changes to the benchmark over the period included: In June 2005, STOXX announced a number of share and free float factor changes. AstraZeneca PLC and ABN AMRO Holding NV were the biggest weight increases, while Nokia Oyj and Vodafone Group PLC were the largest decliners. In July, the Royal Dutch Petroleum take over of Shell Transport & Trading, and the addition of France Telecom SA were the major changes during the month. In September, the replacement of Swiss Reinsurance by Rio Tinto PLC was a sizable change that was included in the annual blue-chip review. The Fund consisted of 50 companies as of September 30, 2005. COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT streetTRACKS DOW JONES STOXX 50 FUND (LINE GRAPH)
STREETTRACKS DOW JONES DOW JONES STOXX 50 INDEX - US STOXX 50 FUND DOLLAR DENOMINATED ---------------------- ----------------------------- 10/15/02 10000 10000 12/31/02 10059 9978 3/31/03 9129 9132 6/30/03 11098 11096 9/30/03 11279 11287 12/31/03 13631 13660 3/31/04 13384 13423 6/30/04 13524 13552 9/30/04 13776 13815 12/31/04 15710 15814 3/31/05 15626 15695 6/30/05 15612 15682 9/30/05 16751 16856
(Fund's performance does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemption of Fund Shares. The Fund's past performance is no guarantee of future results.) 2 STREETTRACKS INDEX SHARES FUNDS ANNUAL REPORT MANAGEMENT'S DISCUSSION AND ANALYSIS STREETTRACKS DOW JONES STOXX 50 FUND The following performance chart is provided to compare the Fund's total return at NAV to the total return based on market price and its benchmark Index. The following chart is for comparative purposes only and represents the period noted. Performance quoted represents past performance and past performance does not guarantee future results. Current performance may be higher or lower than the performance quoted. For the most recent month end performance information visit www.streettracks.com. Investment in the Fund poses investment risk including the possible loss of principal. The investment return and principal value of an investment will fluctuate, in that shares, when redeemed, may be worth more or less than their original cost. The returns do not reflect the deductions of taxes that a shareholder would pay on Fund distributions or on redemption of Fund shares. PERFORMANCE AS OF SEPTEMBER 30, 2005
--------------------------------------------------------------------------------------------------------------------- CUMULATIVE TOTAL RETURN --------------------------------------------------------------------------------- NET ASSET MARKET DOW JONES STOXX 50 INDEX VALUE VALUE (Broad-Based Comparative Index) ------------------------------------------------------------------------------------------------------------------ ONE YEAR ENDED 9/30/05 21.60% 21.14% 22.01% ------------------------------------------------------------------------------------------------------------------ SINCE INCEPTION OF TRADING (1) 67.65% 63.41% 68.49% ------------------------------------------------------------------------------------------------------------------
(1) For the period October 21, 2002 (commencement of trading) to September 30, 2005.
--------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN --------------------------------------------------------------------------------- NET ASSET MARKET DOW JONES STOXX 50 INDEX VALUE VALUE (Broad-Based Comparative Index) ------------------------------------------------------------------------------------------------------------------ ONE YEAR ENDED 9/30/05 21.60% 21.14% 22.01% ------------------------------------------------------------------------------------------------------------------ SINCE INCEPTION OF TRADING (1) 19.20% 18.16% 19.40% ------------------------------------------------------------------------------------------------------------------
(1) For the period October 21, 2002 (commencement of trading) to September 30, 2005. TOP FIVE HOLDINGS AS OF SEPTEMBER 30, 2005 ----------------------------------------------------------------------------------------------------- DESCRIPTION HSBC HOLDINGS VODAFONE GLAXOSMITHKLINE BP PLC PLC GROUP PLC TOTAL SA PLC ----------------------------------------------------------------------------------------------------- MARKET VALUE 1,627,002 1,474,037 1,426,241 1,358,481 $2,352,739 ----------------------------------------------------------------------------------------------------- % OF 7.48% 5.17 4.69 4.54 4.32 NET ASSETS -----------------------------------------------------------------------------------------------------
INDUSTRY BREAKDOWN AS OF SEPTEMBER 30, 2005* (PIE CHART IN %)
CYCLICAL GOODS FOOD & & FINANCIAL AUTOMOBILES BANKS CHEMICALS SERVICES ENERGY BEVERAGES SERVICES HEALTHCARE INDUSTRIALS INSURANCE - ----------- ----- --------- -------- ------ --------- --------- ---------- ----------- --------- 1.3 26.4 1.1 1.0 18.0 5.7 1.1 12.8 1.8 6.1 NON- CYCLICAL GOODS & AUTOMOBILES OTHER MINING SERVICES RETAIL SOFTWARE TECHNOLOGY TELECOMMUNICATIONS UTILITIES - ----------- ----- ------ -------- ------ -------- ---------- ------------------ --------- 1.3 0.7 2.5 1.9 0.8 1.1 2.1 13.0 2.6
* The Fund's industry breakdown is expressed as a percentage of net assets and may change over time. 3 STREETTRACKS INDEX SHARES FUNDS ANNUAL REPORT MANAGEMENT'S DISCUSSION AND ANALYSIS STREETTRACKS DOW JONES EURO STOXX 50 FUND The streetTRACKS Dow Jones EURO STOXX 50 Fund (the "Fund") seeks to replicate the total return of the Dow Jones EURO STOXX 50 Index (the "Index"). To accomplish this, the Fund utilizes a "passive" or indexing approach and attempts to approximate the investment performance of its benchmark index, before expenses, by investing in a portfolio of stocks to replicate the Index. The Fund performance for the one year period ending September 30, 2005 was 24.82% versus the Index return of 25.06%. The performance was strong during the fourth quarter 2004, up 18.64%. Returns declined over the first half of 2005, down 0.76% in Q1 and 1.28% in Q2, and then rebounded during the third quarter returning 7.39%. All of the constituents in the index added value during the period. Strong corporate earnings (59% of reporting companies beat earnings estimates,) positive economic news out of the U.S., increasing merger and acquisition activity thanks to low corporate bond yields, and the revaluation of China's currency all helped European markets overcome the London Terror attacks. Energy companies benefited from oil price increases during the period. The sector, which represents over 16.0% of the index, returned 38.5% for the year ending September 2005. The three giant Euroland oil companies, France's Total SA, Eni SpA of Italy and Royal Dutch Petroleum in the Netherlands, led the way within the sector and provided solid returns. These stocks are over 15% of the index. Financial companies, which represent 29.9% of the index also posted strong returns during the period. The sector was up 28.0%. The top three contributors in the period were posted by two Spanish banks, Banco Santander Central Hispano SA and Banco Bilbao Vizcaya Argentaria SA and by Societe Genarale in France. Structural changes to the benchmark over the period included: In June 2005, STOXX announced a number of share and free float factor changes. France Telecom SA and ABN AMRO Holding NV were the biggest weight increases, while Nokia Oyj and Deutsche Bank AG were the largest decliners. Also Telecom Italia's take over of Telecom Italia Mobile resulted in the addition of Allied Irish Bank PLC. In July 2005, the Royal Dutch Petroleum's take over of Shell Transport & Trading, and the addition of Renault SA were the major changes during the month. The Fund consisted of 50 companies as of September 30, 2005. COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT streetTRACKS DOW JONES EURO STOXX 50 FUND (LINE GRAPH)
STREETTRACKS DOW JONES EURO DOW JONES EURO STOXX 50 STOXX 50 FUND INDEX - US DOLLAR DENOMINATED --------------------------- ----------------------------- 10/15/02 10000.00 10000.00 12/31/02 10343.00 10283.00 3/31/03 9148.00 9156.00 6/30/30 11657.00 11641.00 9/30/03 11746.00 11732.00 12/31/03 14658.00 14657.00 3/31/04 14443.00 14452.00 6/30/04 14685.00 14664.00 9/30/04 14590.00 14562.00 12/31/04 17299.00 17325.00 3/31/05 17161.00 17147.00 6/30/05 16958.00 16927.00 9/30/05 18212.00 18211.00
(Fund's performance does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemption of Fund Shares. The Fund's past performance is no guarantee of future results.) 4 STREETTRACKS INDEX SHARES FUNDS ANNUAL REPORT MANAGEMENT'S DISCUSSION AND ANALYSIS STREETTRACKS DOW JONES EURO STOXX 50 FUND The following performance chart is provided to compare the Fund's total return at NAV to the total return based on market price and its benchmark Index. The following chart is for comparative purposes only and represents the period noted. Performance quoted represents past performance and past performance does not guarantee future results. Current performance may be higher or lower than the performance quoted. For the most recent month end performance information visit www.streettracks.com. Investment in the Fund poses investment risk including the possible loss of principal. The investment return and principal value of an investment will fluctuate, in that shares, when redeemed, may be worth more or less than their original cost. The returns do not reflect the deductions of taxes that a shareholder would pay on Fund distributions or on redemption of Fund shares. PERFORMANCE AS OF SEPTEMBER 30, 2005
----------------------------------------------------------------------------------------------------------------------------- CUMULATIVE TOTAL RETURN --------------------------------------------------------------------------------- NET ASSET MARKET VALUE VALUE DOW JONES EURO STOXX 50 INDEX ------------------------------------------------------------------------------------------------------------------ ONE YEAR ENDED 9/30/05 24.82% 24.57% 25.06% ------------------------------------------------------------------------------------------------------------------ SINCE INCEPTION OF TRADING (1) 78.77% 74.57% 78.64% ------------------------------------------------------------------------------------------------------------------
(1) For the period October 21, 2002 (commencement of trading) to September 30, 2005.
----------------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN --------------------------------------------------------------------------------- NET ASSET MARKET VALUE VALUE DOW JONES EURO STOXX 50 INDEX ----------------------------------------------------------------------------------------------------------------------------- ONE YEAR ENDED 9/30/05 24.82% 24.57% 25.06% ----------------------------------------------------------------------------------------------------------------------------- SINCE INCEPTION OF TRADING (1) 21.83% 20.85% 21.80% ------------------------------------------------------------------------------------------------------------------
(1) For the period October 21, 2002 (commencement of trading) to September 30, 2005. TOP FIVE HOLDINGS AS OF SEPTEMBER 30, 2005 ----------------------------------------------------------------------------------------------------------------------- DESCRIPTION SANOFI- BANCO SANTANDER TOTAL SA AVENTIS CENTRAL HISPANO SA ENI SPA NOKIA OYJ ----------------------------------------------------------------------------------------------------------------------- MARKET VALUE $13,853,618 7,186,926 7,151,726 6,581,117 6,466,268 ----------------------------------------------------------------------------------------------------------------------- % OF 7.71% 4.00 3.98 3.66 3.60 NET ASSETS -----------------------------------------------------------------------------------------------------------------------
INDUSTRY BREAKDOWN AS OF SEPTEMBER 30, 2005* (PIE CHART IN %) Automobiles 3.1 Banks 20.8 Chemicals 4.2 Construction 1.7 Cyclical Goods & Services 2.7 Energy 12.9 Food & Beverages 3.2 Financial Services 1.8 Healthcare 4.0 Industrials 3.1 Insurance 11.2 Media 1.7 Other 0.3 Non-cyclical Goods & Services 1.7 Retail 1.3 Software 1.8 Technology 4.4 Telecommunications 10.0 Utilities 10.1
* The Fund's industry breakdown is expressed as a percentage of net assets and may change over time. 5 STREETTRACKS DOW JONES STOXX 50 FUND PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 2005 - --------------------------------------------------------------------------------
SECURITY DESCRIPTION SHARES VALUE - -------------------- ------ ----- COMMON STOCKS -- 99.37% BELGIUM -- 1.07% FINANCIAL SERVICES -- 1.07% Fortis................................ 11,575 $ 335,627 ----------- FINLAND -- 2.13% TECHNOLOGY -- 2.13% Nokia Oyj............................. 39,830 669,413 ----------- FRANCE -- 12.60% BANKS -- 3.23% BNP Paribas SA........................ 7,375 562,398 Societe Generale...................... 3,954 452,640 ----------- 1,015,038 ----------- ENERGY -- 4.53% Total SA.............................. 5,209 1,426,241 ----------- INSURANCE -- 1.19% AXA................................... 13,538 372,797 ----------- NON-CYCLICAL GOODS & SERVICES -- 0.65% L'Oreal SA............................ 2,647 205,683 ----------- RETAIL -- 0.77% Carrefour SA.......................... 5,273 243,361 ----------- TELECOMMUNICATIONS -- 1.41% France Telecom SA..................... 15,375 442,660 ----------- UTILITIES -- 0.82% Suez SA............................... 8,866 257,077 ----------- TOTAL FRANCE COMMON STOCKS............ 3,962,857 ----------- GERMANY -- 11.44% AUTOMOBILES -- 1.32% DaimlerChrysler AG.................... 7,816 415,947 ----------- BANKS -- 1.38% Deutsche Bank AG...................... 4,607 432,246 ----------- CHEMICALS -- 1.13% BASF AG............................... 4,708 354,763 ----------- INDUSTRIALS -- 1.83% Siemens AG............................ 7,459 576,448 ----------- INSURANCE -- 1.53% Allianz AG............................ 3,556 481,634 ----------- SOFTWARE -- 1.05% SAP AG................................ 1,901 329,581 ----------- TELECOMMUNICATIONS -- 1.38% Deutsche Telekom AG................... 23,760 433,704 ----------- UTILITIES -- 1.82% E.ON AG............................... 6,216 572,791 ----------- TOTAL GERMANY COMMON STOCKS........... 3,597,114 ----------- ITALY -- 4.17% ENERGY -- 2.17% Eni SpA............................... 22,868 681,275 ----------- INSURANCE -- 0.98% Assicurazioni Generali SpA............ 9,744 308,264 ----------- TELECOMMUNICATIONS -- 1.02% Telecom Italia SpA.................... 98,449 321,070 ----------- TOTAL ITALY COMMON STOCKS............. 1,310,609 -----------
SECURITY DESCRIPTION SHARES VALUE - -------------------- ------ ----- NETHERLANDS -- 5.09% BANKS -- 1.26% ABN AMRO Holding NV................... 16,433 $ 394,862 ----------- CYCLICAL GOODS & SERVICES -- 1.00% Koninklijke (Royal) Philips Electronics NV...................... 11,819 315,058 ----------- FOOD & BEVERAGES -- 1.15% Unilever NV........................... 5,083 362,490 ----------- INSURANCE -- 1.68% ING Groep NV.......................... 17,680 528,208 ----------- TOTAL NETHERLANDS COMMON STOCKS....... 1,600,618 ----------- SPAIN -- 6.08% BANKS -- 4.03% Banco Bilbao Vizcaya Argentaria SA.... 30,212 531,442 Banco Santander Central Hispano SA.... 55,772 734,950 ----------- 1,266,392 ----------- TELECOMMUNICATIONS -- 2.05% Telefonica SA......................... 39,345 646,083 ----------- TOTAL SPAIN COMMON STOCKS............. 1,912,475 ----------- SWEDEN -- 1.54% TELECOMMUNICATIONS -- 1.54% Telefonaktiebolaget LM Ericsson (Class B).................................. 132,020 483,361 ----------- SWITZERLAND -- 13.62% BANKS -- 3.89% Credit Suisse Group................... 10,814 480,622 UBS AG................................ 8,706 742,804 ----------- 1,223,426 ----------- FOOD & BEVERAGES -- 3.37% Nestle SA............................. 3,603 1,059,172 ----------- HEALTHCARE -- 6.36% Novartis AG........................... 22,153 1,128,055 Roche Holding AG...................... 6,268 874,141 ----------- 2,002,196 ----------- TOTAL SWITZERLAND COMMON STOCKS....... 4,284,794 ----------- UNITED KINGDOM -- 41.63% BANKS -- 12.58% Barclays PLC.......................... 57,602 583,908 HBOS PLC.............................. 34,763 524,896 HSBC Holdings PLC..................... 100,292 1,627,002 Lloyds TSB Group PLC.................. 49,853 411,871 Royal Bank of Scotland Group PLC...... 28,391 808,145 ----------- 3,955,822 ----------- ENERGY -- 11.30% BP PLC................................ 197,462 2,352,739 Royal Dutch Shell PLC (Class A)....... 36,199 1,200,744 ----------- 3,553,483 ----------- FOOD & BEVERAGES -- 1.22% Diageo PLC............................ 26,535 382,586 -----------
See accompanying notes to financial statements. 6 STREETTRACKS DOW JONES STOXX 50 FUND PORTFOLIO OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 2005 - --------------------------------------------------------------------------------
SECURITY DESCRIPTION SHARES VALUE - -------------------- ------ ----- HEALTHCARE -- 6.46% AstraZeneca PLC....................... 14,459 $ 674,018 GlaxoSmithKline PLC................... 53,252 1,358,481 ----------- 2,032,499 ----------- INSURANCE -- 0.70% Aviva PLC............................. 19,921 219,383 ----------- MINING -- 2.51% Anglo American Capital PLC............ 13,281 397,073 Rio Tinto PLC......................... 9,605 393,879 ----------- 790,952 ----------- NON-CYCLICAL GOODS & SERVICES -- 1.22% Tesco PLC............................. 69,818 382,279 ----------- TELECOMMUNICATIONS -- 5.64% BT Group PLC.......................... 76,560 301,021 Vodafone Group PLC.................... 564,890 1,474,037 ----------- 1,775,058 ----------- TOTAL UNITED KINGDOM COMMON STOCKS.... 13,092,062 ----------- TOTAL COMMON STOCKS -- (Cost $24,847,050).................. 31,248,930 -----------
SECURITY DESCRIPTION SHARES VALUE - -------------------- ------ ----- SHORT TERM INVESTMENT -- 0.67% UNITED STATES -- 0.67% MONEY MARKET FUND -- 0.67% AIM Short Term Investment Class Prime Fund (Cost -- $209,540)............. 209,540 $ 209,540 ----------- TOTAL INVESTMENTS -- 100.04% (Cost -- $25,056,590)............... 31,458,470 LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.04)%................... (11,048) ----------- NET ASSETS -- 100.00%................. $31,447,422 ===========
See accompanying notes to financial statements. 7 STREETTRACKS DOW JONES EURO STOXX 50 FUND PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 2005 - --------------------------------------------------------------------------------
SECURITY DESCRIPTION SHARES VALUE - -------------------- --------- ------------ COMMON STOCKS -- 99.75% BELGIUM -- 1.82% FINANCIAL SERVICES -- 1.82% Fortis.............................. 112,774 $ 3,269,982 ------------ FINLAND -- 3.60% TECHNOLOGY -- 3.60% Nokia Oyj........................... 384,742 6,466,268 ------------ FRANCE -- 34.84% AUTOMOBILES -- 0.91% Renault SA.......................... 17,151 1,629,435 ------------ BANKS -- 6.45% BNP Paribas SA...................... 71,790 5,474,517 Credit Agricole SA.................. 59,687 1,755,864 Societe Generale.................... 38,133 4,365,331 ------------ 11,595,712 ------------ CHEMICALS -- 0.97% L'Air Liquide SA.................... 9,459 1,744,849 ------------ CONSTRUCTION -- 1.71% Compagnie de Saint-Gobain........... 29,990 1,730,495 Lafarge SA.......................... 15,287 1,349,133 ------------ 3,079,628 ------------ CYCLICAL GOODS & SERVICES -- 1.03% LVMH Moet Hennessy Louis Vuitton SA................................ 22,316 1,845,703 ------------ ENERGY -- 7.71% Total SA............................ 50,597 13,853,618 ------------ FOOD & BEVERAGES -- 1.27% Groupe Danone....................... 21,122 2,283,004 ------------ HEALTHCARE -- 4.00% Sanofi-Aventis...................... 86,706 7,186,926 ------------ INSURANCE -- 2.02% AXA................................. 132,082 3,637,148 ------------ MEDIA -- 1.70% Vivendi Universal SA................ 93,105 3,048,766 ------------ NON-CYCLICAL GOODS & SERVICES -- 1.11% L'Oreal SA.......................... 25,581 1,987,750 ------------ RETAIL -- 1.31% Carrefour SA........................ 50,961 2,351,967 ------------ TECHNOLOGY -- 0.84% Alcatel SA*......................... 113,331 1,513,944 ------------ TELECOMMUNICATIONS -- 2.42% France Telecom SA................... 150,800 4,341,672 ------------ UTILITIES -- 1.39% Suez SA............................. 86,511 2,508,463 ------------ TOTAL FRANCE COMMON STOCKS.......... 62,608,585 ------------ GERMANY -- 23.24% AUTOMOBILES -- 2.24% DaimlerChrysler AG.................. 75,751 4,031,271 ------------ BANKS -- 2.34% Deutsche Bank AG.................... 44,853 4,208,274 ------------
SECURITY DESCRIPTION SHARES VALUE - -------------------- --------- ------------ CHEMICALS -- 3.21% BASF AG............................. 45,627 $ 3,438,137 Bayer AG............................ 63,389 2,330,197 ------------ 5,768,334 ------------ INDUSTRIALS -- 3.12% Siemens AG.......................... 72,582 5,609,295 ------------ INSURANCE -- 3.62% Allianz AG.......................... 34,428 4,663,023 Muenchener Rueckversicherungs- Gesellschaft AG................... 15,987 1,831,099 ------------ 6,494,122 ------------ SOFTWARE -- 1.78% SAP AG.............................. 18,427 3,194,735 ------------ TELECOMMUNICATIONS -- 2.34% Deutsche Telekom AG................. 230,227 4,202,459 ------------ UTILITIES -- 4.59% E.ON AG............................. 60,061 5,534,492 RWE AG.............................. 40,885 2,713,580 ------------ 8,248,072 ------------ TOTAL GERMANY COMMON STOCKS......... 41,756,562 ------------ IRELAND -- 0.95% BANKS -- 0.95% Allied Irish Banks PLC.............. 79,927 1,705,643 ------------ ITALY -- 10.88% BANKS -- 2.07% SanPaolo IMI SpA.................... 85,759 1,335,868 UniCredito Italiano SpA............. 421,170 2,381,505 ------------ 3,717,373 ------------ ENERGY -- 3.66% Eni SpA............................. 220,905 6,581,117 ------------ INSURANCE -- 1.68% Assicurazioni Generali SpA.......... 95,362 3,016,897 ------------ TELECOMMUNICATIONS -- 1.73% Telecom Italia SpA.................. 951,378 3,102,714 ------------ UTILITIES -- 1.74% Enel SpA............................ 362,801 3,136,237 ------------ TOTAL ITALY COMMON STOCKS........... 19,554,338 ------------ NETHERLANDS -- 10.22% BANKS -- 2.14% ABN AMRO Holding NV................. 160,265 3,850,945 ------------ CYCLICAL GOODS & SERVICES -- 1.69% Koninklijke (Royal) Philips Electronics NV.................... 114,226 3,044,914 ------------ FOOD & BEVERAGES -- 1.97% Unilever NV (1)..................... 49,609 3,537,826 ------------ INSURANCE -- 3.84% Aegon NV............................ 121,419 1,807,902 ING Groep NV (1).................... 170,354 5,089,498 ------------ 6,897,400 ------------
See accompanying notes to financial statements. 8 STREETTRACKS DOW JONES EURO STOXX 50 FUND PORTFOLIO OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 2005 - --------------------------------------------------------------------------------
SECURITY DESCRIPTION SHARES VALUE - -------------------- --------- ------------ NON-CYCLICAL GOODS & SERVICES -- 0.58% Koninklijke Ahold NV*............... 136,733 $ 1,036,920 ------------ TOTAL NETHERLANDS COMMON STOCKS..... 18,368,005 ------------ SPAIN -- 14.20% BANKS -- 6.86% Banco Bilbao Vizcaya Argentaria SA................................ 293,874 5,169,372 Banco Santander Central Hispano SA................................ 542,712 7,151,726 ------------ 12,321,098 ------------ ENERGY -- 1.55% Repsol YPF SA....................... 85,858 2,790,757 ------------ TELECOMMUNICATIONS -- 3.47% Telefonica SA....................... 380,059 6,240,932 ------------ UTILITIES -- 2.32% Endesa SA........................... 83,848 2,251,304 Iberdrola SA........................ 68,068 1,908,039 ------------ 4,159,343 ------------ TOTAL SPAIN COMMON STOCKS........... 25,512,130 ------------ TOTAL COMMON STOCKS -- (Cost $174,386,464)............... 179,241,513 ------------ RIGHTS -- 0.02% FRANCE -- 0.02% UTILITIES -- 0.02% Suez SA, expires 9/27/05 (1)* (Cost -- $0)...................... 78,000 29,958 ------------
SECURITY DESCRIPTION SHARES VALUE - -------------------- --------- ------------ SHORT TERM INVESTMENTS -- 1.86% UNITED STATES -- 1.86% MONEY MARKET FUNDS -- 1.86% AIM Short Term Investment Class Prime Fund (Cost -- $942,297)................ 942,297 $ 942,297 UBS Private Money Market Fund, LLC (Cost -- $2,405,900) (2)...... 2,405,900 2,405,900 ------------ 3,348,197 ------------ TOTAL SHORT TERM INVESTMENTS -- (Cost -- $3,348,197).............. 3,348,197 ------------ TOTAL INVESTMENTS -- 101.63% (Cost $177,734,661)............... 182,619,668 LIABILITIES IN EXCESS OF OTHER ASSETS -- (1.63)%................. (2,932,053) ------------ NET ASSETS -- 100.00%............... $179,687,615 ============ * Non-income producing security (1) Security, or portion thereof, was on loan at September 30, 2005 (2) Investments of cash collateral for securities loaned
See accompanying notes to financial statements. 9 STREETTRACKS INDEX SHARES FUNDS STATEMENTS OF ASSETS AND LIABILITIES SEPTEMBER 30, 2005 - --------------------------------------------------------------------------------
STREETTRACKS STREETTRACKS DOW JONES DOW JONES STOXX 50 EURO STOXX 50 FUND FUND ------------ ------------- ASSETS Investments in securities at value (cost -- $25,056,590 and $175,328,761, respectively)*........................ $31,458,470 $180,213,768 Investments of cash collateral received for securities loaned, at value (cost -- $0 and $2,405,900, respectively)........................................... -- 2,405,900 Cash...................................................... -- 44,096 Foreign currency, at value (cost -- $58,505 and $159,612, respectively)........................................... 58,401 160,188 Dividends receivable...................................... 100,029 124,651 ----------- ------------ TOTAL ASSETS....................................... 31,616,900 182,948,603 ----------- ------------ LIABILITIES Cash collateral for securities loaned..................... -- 2,405,900 Distributions payable..................................... 156,324 804,408 Accrued trustees fees..................................... 2,546 12,004 Accrued advisory fee...................................... 7,494 38,676 Payable to Sub-Custodian.................................. 3,114 -- ----------- ------------ TOTAL LIABILITIES.................................. 169,478 3,260,988 ----------- ------------ NET ASSETS......................................... $31,447,422 $179,687,615 =========== ============ NET ASSETS REPRESENTED BY: Paid in capital........................................... $25,037,075 $175,739,756 Distributions in excess of net investment income.......... (61,610) (700,644) Accumulated net realized gain (loss) on investments and foreign currency transactions........................... 71,912 (234,604) Net unrealized appreciation on investments and foreign currency................................................ 6,400,045 4,883,107 ----------- ------------ NET ASSETS......................................... $31,447,422 $179,687,615 =========== ============ NET ASSET VALUE PER SHARE Net asset value per share................................. $ 39.31 $ 41.31 =========== ============ Shares outstanding (unlimited amount authorized, $0.01 par value).................................................. 800,019 4,350,032 =========== ============
* Includes $0 and $2,289,217, respectively, of investments in securities on loan, at value. See accompanying notes to financial statements. 10 STREETTRACKS INDEX SHARES FUNDS STATEMENTS OF OPERATIONS FOR THE YEAR ENDED SEPTEMBER 30, 2005 - --------------------------------------------------------------------------------
STREETTRACKS STREETTRACKS DOW JONES DOW JONES STOXX 50 EURO STOXX 50 FUND FUND ------------ ------------- INVESTMENT INCOME: Dividends (net of foreign withholding taxes, $80,535 and $708,716, respectively)................................. $ 887,038 $ 4,062,892 Securities lending -- Net................................. 11,754 197,834 ---------- ------------ TOTAL INVESTMENT INCOME................................... 898,792 4,260,726 ---------- ------------ EXPENSES: Advisory fee.............................................. 84,662 397,634 Trustees fees and expenses................................ 10,089 43,668 ---------- ------------ TOTAL EXPENSES............................................ 94,751 441,302 ---------- ------------ NET INVESTMENT INCOME..................................... 804,041 3,819,424 ---------- ------------ REALIZED AND UNREALIZED GAIN (LOSS) IN INVESTMENTS: Net realized gain on investments and foreign currency transactions............................................ 174,316 34,046,899 Net change in unrealized appreciation (depreciation) on investments and foreign currency................................................ 4,562,075 (10,072,382) ---------- ------------ NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY..................................... 4,736,391 23,974,517 ---------- ------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $5,540,432 $ 27,793,941 ========== ============
See accompanying notes to financial statements. 11 STREETTRACKS INDEX SHARES FUNDS STATEMENTS OF CHANGE IN NET ASSETS - --------------------------------------------------------------------------------
STREETTRACKS DOW JONES STREETTRACKS DOW JONES STOXX 50 FUND EURO STOXX 50 FUND ----------------------------- ----------------------------- FOR THE FOR THE FOR THE FOR THE YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, 2005 2004 2005 2004 ------------- ------------- ------------- ------------- FROM OPERATIONS: Net investment income................................. $ 804,041 $ 582,689 $ 3,819,424 $ 1,652,194 Net realized gain (loss) on investments and foreign currency transactions............................... 174,316 (121,105) 34,046,899 12,867,239 Net change in unrealized appreciation (depreciation) on investments and foreign currency................. 4,562,075 1,164,330 (10,072,382) 6,731,659 ----------- ----------- ------------- ------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......................................... 5,540,432 1,625,914 27,793,941 21,251,092 ----------- ----------- ------------- ------------ Undistributed net investment income included in price of shares issued and redeemed....................... 138 4,367 67,904 16,527 ----------- ----------- ------------- ------------ DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income................................. (796,093) (601,360) (3,960,144) (1,760,293) ----------- ----------- ------------- ------------ FROM BENEFICIAL INTEREST TRANSACTIONS: Net proceeds from the sale of shares.................. 1,805,862 15,509,127 181,521,597 27,470,917 Net proceeds from dividend reinvestment shares issued.............................................. 702 -- 1,227 -- Cost of shares redeemed............................... -- (62,983) (119,061,998) (39,019,051) ----------- ----------- ------------- ------------ NET INCREASE (DECREASE) IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS................................. 1,806,564 15,446,144 62,460,826 (11,548,134) ----------- ----------- ------------- ------------ Net increase in net assets during period.............. 6,551,041 16,475,065 86,362,527 7,959,192 Net assets at beginning of period..................... 24,896,381 8,421,316 93,325,088 85,365,896 ----------- ----------- ------------- ------------ NET ASSETS AT END OF PERIOD (1)......................... $31,447,422 $24,896,381 $179,687,615 $ 93,325,088 =========== =========== ============= ============ SHARES OF BENEFICIAL INTEREST: Shares sold........................................... 50,000 450,000 4,550,000 800,000 Shares issued to shareholders from reinvestment of distributions....................................... 19 -- 32 -- Shares redeemed....................................... -- (1,971) (2,950,000) (1,102,046) ----------- ----------- ------------- ------------ NET INCREASE (DECREASE)................................. 50,019 448,029 1,600,032 (302,046) =========== =========== ============= ============ (1) Including undistributed (distributions in excess of) net investment income:................................ $ (61,610) $ 129,109 $ (700,644) $ 863,352 =========== =========== ============= ============
See accompanying notes to financial statements. 12 STREETTRACKS INDEX SHARES FUNDS FINANCIAL HIGHLIGHTS SELECTED DATA FOR A STREETTRACKS SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS PRESENTED BELOW: - --------------------------------------------------------------------------------
STREETTRACKS DOW JONES STREETTRACKS DOW JONES STOXX 50 FUND EURO STOXX 50 FUND --------------------------------------------- --------------------------------------------- FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE YEAR ENDED YEAR ENDED PERIOD ENDED YEAR ENDED YEAR ENDED PERIOD ENDED SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, 2005 2004+ 2003* 2005 2004+ 2003* ------------- ------------- ------------- ------------- ------------- ------------- NET ASSET VALUE, BEGINNING OF PERIOD........................ $ 33.20 $ 27.89 $25.34(4) $ 33.94 $ 27.97 $ 24.35(4) ------- ------- ------ -------- ------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment income........... 1.01 0.99 1.20 0.94 0.64 0.97 Net realized and unrealized gain.......................... 6.10 5.16 2.50 7.39 6.14 3.59 ------- ------- ------ -------- ------- ------- Total from investment operations.................... 7.11 6.15 3.70 8.33 6.78 4.56 ------- ------- ------ -------- ------- ------- Undistributed net investment income included in price of units issued and redeemed..... 0.00(5) 0.01 (0.49) 0.02 0.01 (0.30) ------- ------- ------ -------- ------- ------- DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income........... (1.00) (0.85) (0.66) (0.98) (0.82) (0.64) ------- ------- ------ -------- ------- ------- NET ASSET VALUE, END OF PERIOD........................ $ 39.31 $ 33.20 $27.89 $ 41.31 $ 33.94 $ 27.97 ======= ======= ====== ======== ======= ======= TOTAL RETURN (1)................ 21.60% 22.13% 12.79% 24.82% 24.21% 17.46% Net assets, end of period (in 000's)........................ $31,447 $24,896 $8,421 $179,688 $93,325 $85,366 Ratio of expenses to average net assets........................ 0.32% 0.33% 0.35%(2) 0.32% 0.33% 0.35%(2) Ratio of net investment income to average net assets............ 2.75% 2.98% 2.96%(2) 2.79% 1.92% 2.78%(2) Portfolio turnover rate (3)..... 9% 7% 6% 15% 11% 6%
- --------------- * For the period October 15, 2002 (commencement of operations) through September 30, 2003. (1) Total return is calculated assuming a purchase of shares at net asset value on the first day and a sale at net asset value on the last day of each period reported. Distributions are assumed, for the purpose of this calculation, to be reinvested at net asset value per share on the respective payment dates of each Fund. Total return for periods of less than one year is not annualized. Broker commission charges are not included in this calculation. (2) Annualized (3) Portfolio turnover rate excludes securities received or delivered from processing of creations or redemptions. (4) The beginning net asset values above have been adjusted to reflect reverse stock splits which were effective October 15, 2002, in order to adjust the net asset value per share of each Fund to be approximately 1/100th of the value of its respective index. The ratio of the reverse stock split for the streetTRACKS Dow Jones STOXX 50 Fund and the streetTRACKS Dow Jones EURO STOXX 50 Fund was 1:2.536 and 1:2.444, respectively. (5) Amount is less than $0.005 per share + Effective on July 1, 2004, SSgA Funds Management, Inc. succeeded UBS Global Asset Management (US) Inc. as the Fund's Adviser. See accompanying notes to financial statements. 13 STREETTRACKS INDEX SHARES FUNDS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2005 - -------------------------------------------------------------------------------- 1. ORGANIZATION The streetTRACKS Index Shares Funds (the "Trust"), is registered under the Investment Company Act of 1940, as amended, and is an open-end investment management company that was organized as a Massachusetts business trust on February 14, 2002. The Trust currently consists of two separate exchange-traded "index funds", (each referred to as a "Fund" and, collectively, as the "Funds") streetTRACKS Dow Jones STOXX 50 Fund and streetTRACKS Dow Jones EURO STOXX 50 Fund, each of which represents a separate series of beneficial interests in the Trust. Each Fund operates as a non-diversified investment company. The investment objective of each fund is to replicate as closely as possible, before expenses, the price and yield of a specified market index. 2. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements: The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. INDEMNIFICATIONS Under the Trust's organizational documents, its officers and trustees are indemnified against certain liability arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust enters into contracts with service providers that contain general indemnification clauses. The Trust's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. However, based on experience the Trust expects the risk of loss to be remote. SECURITY VALUATION Portfolio securities are valued based on the last sale price on the exchange which is deemed to be the principal market for the security. Securities regularly traded in an over-the-counter market are valued at the latest quoted sale price in such market. Other portfolio securities and assets for which market quotations are not readily available are valued based on fair value as determined in good faith by the Trust's Pricing Committee in accordance with procedures adopted by the Board of Trustees. INVESTMENT INCOME Dividend income is recorded on the ex-dividend date. Interest income is recorded on the accrual basis. INVESTMENT TRANSACTIONS Investment transactions are recorded on the trade date. Realized gains and losses from the sale or disposition of securities and foreign exchange transactions are recorded on the identified cost basis. Corporate actions (including cash dividends) are recorded net of non-reclaimable foreign tax withholdings. FOREIGN CURRENCY TRANSLATION AND FOREIGN INVESTMENTS The accounting records of the Funds are maintained in U.S. dollars. Portfolio securities and other assets and liabilities denominated in a foreign currency are translated to U.S. dollars at the prevailing rates of exchange at period end. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars at the prevailing exchange rate on the respective dates of transactions. The effects of changes in foreign currency exchange rates on portfolio investments are included in the net realized and unrealized gains and losses on investments. Net gains and losses on foreign currency transactions include disposition of foreign currencies, and currency gains and losses between the accrual and receipt dates of portfolio investment income and between the trade and settlement dates of portfolio investment transactions. Investing in securities of foreign companies and foreign governments involves special risks and considerations not typically associated with investing in U.S. companies and securities of the U.S. government. These risks include revaluation of currencies and the risk of appropriation. Moreover, the markets for securities of many foreign 14 STREETTRACKS INDEX SHARES FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2005 - -------------------------------------------------------------------------------- companies and foreign governments may be less liquid and the prices of such securities may be more volatile than those of comparable U.S. companies and the U.S. government. EXPENSES Advisory fees, which are directly identifiable to a specific Fund, are applied to that Fund. Certain fees are allocated in such a manner as deemed equitable, taking into consideration the relative net assets of the Funds. FEDERAL INCOME TAX Each Fund intends to qualify for and elect treatment as a "regulated investment company" under Subchapter M of the Internal Revenue Code of 1986, as amended. By so qualifying and electing, each Fund will not be subject to federal income taxes to the extent it distributes its taxable income, including any net realized capital gains, for each fiscal year. In addition, by distributing during each calendar year substantially all their net investment income and capital gains, if any, the Funds will not be subject to federal excise tax. Income and capital gain distributions are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. These book-tax differences are primarily due to differing treatments for income equalization, in-kind transactions and losses deferred due to wash sales. At September 30 2005, the Funds had no capital loss carryforwards. For the year ended September 30, 2005, the Funds reclassified non-taxable security gains and losses realized on the in-kind redemption of Creation Units (Note 4) as an increase or decrease to paid in capital in the Statements of Assets and Liabilities as follows:
NET GAIN RECLASS AMOUNT - ---------------------------------------------------------------------------- streetTRACKS Dow Jones STOXX 50 Fund $ -- streetTRACKS Dow Jones EURO STOXX 50 Fund 32,748,428
The Funds use the accounting practice of equalization. This accounting method was 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. The Funds incurred the following losses during the period November 1, 2004 through September 30, 2005 that are deferred for tax purposes until fiscal 2006:
DEFERRED LOSSES - ----------------------------------------------------------------------------- streetTRACKS Dow Jones STOXX 50 Fund $ -- streetTRACKS Dow Jones EURO STOXX 50 Fund --
For the year ended September 30, 2005, there were no significant differences between the book basis and the tax basis character of distributions to shareholders. Additionally, there were no significant differences between the book basis and tax basis of components of net assets other than differences in the net unrealized appreciation (depreciation) in value of investments attributable to the tax deferral of losses on wash sales. The tax character of distributions paid during the year ended September 30, 2005, was as follows:
ORDINARY INCOME LONG-TERM CAPITAL GAIN - ------------------------------------------------------------------------------------------------------ streetTRACKS Dow Jones STOXX 50 Fund $ 796,093 $ -- streetTRACKS Dow Jones EURO STOXX 50 Fund 3,960,144 --
The tax character of distributions paid during the year ended September 30, 2004, was as follows:
ORDINARY INCOME LONG-TERM CAPITAL GAIN - ------------------------------------------------------------------------------------------------------ streetTRACKS Dow Jones STOXX 50 Fund $ 600,656 $ 704 streetTRACKS Dow Jones EURO STOXX 50 Fund 1,760,293 --
15 STREETTRACKS INDEX SHARES FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2005 - -------------------------------------------------------------------------------- As of September 30, 2005 the components of distributable earnings (excluding unrealized appreciation (depreciation)) on a tax basis were as follows:
UNDISTRIBUTED UNDISTRIBUTED ORDINARY INCOME LONG-TERM CAPITAL GAIN - ------------------------------------------------------------------------------------------------------ streetTRACKS Dow Jones STOXX 50 Fund $ 94,714 $117,420 streetTRACKS Dow Jones EURO STOXX 50 Fund 103,764 --
DISTRIBUTIONS The Trust declares and distributes dividends from net investment income, if any to its shareholders quarterly. The Trust distributes net realized capital gains, if any, at least annually. Distributions are recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from accounting principles generally accepted in the United States. EQUALIZATION The Funds follow the accounting practice known as "Equalization" by which a portion of the proceeds from sales and costs of reacquiring streetTRACKS Index Shares, equivalent on a per share basis to the amount of distributable net investment income on the date of the transaction, is credited or charged to undistributed net investment income. As a result, undistributed net investment income per share is unaffected by sales or reacquisitions of streetTRACKS Index Shares. 3. FEES AND COMPENSATION PAID TO AFFILIATES AND OTHER RELATED PARTY TRANSACTIONS ADVISORY FEE Effective July 1, 2004, each Fund entered into an Investment Advisory Agreement with SSgA Funds Management, Inc. (the Trust on behalf of "Adviser"). As compensation for the services rendered, facilities furnished, and expenses borne by the Adviser, each Fund pays the Adviser a fee accrued daily and paid monthly, based on a percentage of each Fund's average daily net assets as shown in the following table:
ANNUAL RATE - ------------------------------------------------------------------------- streetTRACKS Dow Jones STOXX 50 Fund 0.29% streetTRACKS Dow Jones EURO STOXX 50 Fund 0.29%
The Adviser pays the operating expenses of each Fund other than the advisory fee, brokerage, taxes, interest, fees and expenses of the Independent Trustees (including any Trustee's counsel fees), litigation expenses and other extraordinary expenses. DISTRIBUTOR State Street Global Markets, LLC (the "Distributor") acts as the principal underwriter of each Fund pursuant to a principal underwriting contract with the Trust (the "Principal Underwriting Agreement") which requires the Distributor to use its best efforts, consistent with its other businesses, to sell Shares of the Funds. Shares of the Funds are offered continuously. The Distributor may enter into dealer agreements with other broker-dealers (affiliated and non-affiliated) and with other financial institutions to authorize them to sell the Shares. Management has not implemented a 12b-1 fee on either of the Funds. TRUSTEES' FEES The Trust pays fees and expenses of the Independent Trustees, including Trustee's legal counsel fees. The Trust pays each Independent Trustee an annual fee of $15,000, and a meeting fee of $300 per fund per board meeting attended. An Independent Trustee will receive $500 for each meeting attended via telephone or video conference. The Funds will reimburse the Trustees for any out of pocket expenses related to attending meetings of the Board of Trustees. The Board of Trustees has an Audit Committee consisting of all Trustees who are not "interested persons" (as 16 STREETTRACKS INDEX SHARES FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2005 - -------------------------------------------------------------------------------- defined in the 1940 Act) of the Trust. The Trustees who are members of the Audit Committee do not receive additional compensation from the Trust as a result of their position on the Audit Committee. 4. SHAREHOLDER TRANSACTIONS Except under the Trust's dividend reinvestment plan, Shares are issued and redeemed by a Fund only in Creation Unit size aggregations of 50,000. Such transactions are only permitted on an in-kind basis, with a separate cash payment, which is (cash component) used to equate the transaction to the net asset value per Share of a Fund on the transaction date. Transaction fees at scheduled amounts ranging from $1,500 to $6,000 per Creation Unit are charged to those persons creating or redeeming Creation Units. Transaction fees are received by the custodian and used to offset the expense of processing orders. 5. AGGREGATE UNREALIZED APPRECIATION AND DEPRECIATION At September 30, 2005, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes.
GROSS GROSS NET UNREALIZED IDENTIFIED UNREALIZED UNREALIZED APPRECIATION COST APPRECIATION DEPRECIATION (DEPRECIATION) - --------------------------------------------------------------------------------------------------------------------- streetTRACKS Dow Jones STOXX 50 Fund $ 25,102,098 $6,452,428 $ 96,056 $6,356,372 streetTRACKS Dow Jones EURO STOXX 50 Fund 177,969,266 5,875,191 1,224,790 4,650,401
6. INVESTMENT TRANSACTIONS For the year ended September 30, 2005, the Trust had in-kind contributions and in-kind redemptions as follows:
SUBSCRIPTIONS REDEMPTIONS - ------------------------------------------------------------------------------------------ streetTRACKS Dow Jones STOXX 50 Fund $ 1,805,862 $ -- streetTRACKS Dow Jones EURO STOXX 50 Fund 181,452,653 119,061,998
For the year ended September 30, 2005, the Trust had purchases and sales of investment securities as follows:
PURCHASES SALES - ---------------------------------------------------------------------------------------- streetTRACKS Dow Jones STOXX 50 Fund $ 2,536,827 $ 2,610,179 streetTRACKS Dow Jones EURO STOXX 50 Fund 20,371,421 20,788,763
For the year ended September 30, 2005, the Trust did not pay any commissions to an affiliate of the Adviser for Investment Transactions. 7. INITIAL CAPITALIZATION AND OFFERING OF SHARES On the commencement of operations for each Fund, October 15, 2002, the Board of Trustees declared reverse stock splits, which were effective on the date of commencement of operations for each Fund. The reverse stock splits were executed in order to align the net asset value per share of each Fund to an established proportion of its benchmark index. The ratio of the reverse stock splits were as follows:
RATIO - ----------------------------------------------------------------------- streetTRACKS Dow Jones STOXX 50 Fund 1: 2.536 streetTRACKS Dow Jones EURO STOXX 50 Fund 1: 2.444
17 STREETTRACKS INDEX SHARES FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2005 - -------------------------------------------------------------------------------- 8. SECURITIES LENDING Each Fund may lend securities up to 33 1/3% of its total assets to qualified broker-dealers or institutional investors. The loans are secured at all times by cash, cash equivalents or U.S. government securities in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. The Funds will regain record ownership of loaned securities to exercise certain beneficial rights; however, the Funds may bear the risk of delay in recovery of, or even loss of rights in, the securities loaned should the borrower fail financially. Each Fund receives compensation for lending its securities from interest or dividends earned on the cash, cash equivalents or U.S. government securities held as collateral, net of fee rebates paid to the borrower plus reasonable administrative and custody fees. 18 STREETTRACKS INDEX SHARES FUNDS REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM - -------------------------------------------------------------------------------- TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF STREETTRACKS INDEX SHARES FUNDS In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of streetTRACKS Index Shares Funds (the "Funds") at September 30, 2005, and the results of their operations, the changes in their net assets and the financial highlights for the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Trust's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by the management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at September 30, 2005 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP Boston, Massachusetts November 14, 2005 19 STREETTRACKS INDEX SHARES FUNDS OTHER INFORMATION SEPTEMBER 30, 2005 (UNAUDITED) - -------------------------------------------------------------------------------- FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS CLOSING BID/ASK MIDPOINT PRICE VS. NAV AS OF SEPTEMBER 30, 2005 The following Frequency Distribution of Discounts and Premiums charts are provided to show the frequency at which the closing bid/ask midpoint price for each of the Funds was at a discount or premium to the daily net asset value (NAV). The following charts are for comparative purposes only and represent the periods noted. streetTRACKS Dow Jones STOXX 50 Fund
----------------------------------------------------------------------------- Bid/Ask Midpoint Price Above NAV ----------------------------------------------------------------------------- 50 - 99 100 - 199 >200 BASIS POINTS BASIS POINTS BASIS POINTS ----------------------------------------------------------------------------- 2005 QUARTER ENDING: 9/30/05 11 2 0 6/30/05 14 9 1 3/31/05 4 0 0 ----------------------------------------------------------------------------- 2004 QUARTER ENDING: 12/31/04 30 7 0 9/30/04 19 7 0 6/30/04 19 3 0 3/31/04 13 3 0 ----------------------------------------------------------------------------- 2003 QUARTER ENDING: 12/31/03 14 1 0 9/30/03 8 2 0 6/30/03 13 2 0 3/31/03 10 10 1 ----------------------------------------------------------------------------- 2002 PERIOD ENDING: 12/31/02* 9 7 0 ----------------------------------------------------------------------------- ----------------------- ----------------------------------------------------- Bid/Ask Midpoint Price Below NAV ----------------------- ----------------------------------------------------- 50 - 99 100 - 199 >200 BASIS POINTS BASIS POINTS BASIS POINTS ----------------------- ----------------------------------------------------- 2005 QUARTER ENDING: 9/30/05 0 2 3 6/30/05 4 2 0 3/31/05 5 3 6 ----------------------------------------------------------------------------- 2004 QUARTER ENDING: 12/31/04 1 0 1 9/30/04 1 1 0 6/30/04 1 2 0 3/31/04 6 2 0 ----------------------------------------------------------------------------- 2003 QUARTER ENDING: 12/31/03 2 0 0 9/30/03 6 0 0 6/30/03 8 3 0 3/31/03 6 2 0 ----------------------------------------------------------------------------- 2002 PERIOD ENDING: 12/31/02* 7 3 0 -----------------------------------------------------------------------------
* Commencement of trading October 21, 2002 20 STREETTRACKS INDEX SHARES FUNDS OTHER INFORMATION (CONTINUED) SEPTEMBER 30, 2005 (UNAUDITED) - -------------------------------------------------------------------------------- streetTRACKS Dow Jones EURO STOXX 50 Fund
----------------------------------------------------------------------------- Bid/Offer Midpoint Price Above NAV ----------------------------------------------------------------------------- 50 - 99 100 - 199 >200 BASIS POINTS BASIS POINTS BASIS POINTS ----------------------------------------------------------------------------- 2005 QUARTER ENDING: 9/30/05 7 2 0 6/30/05 6 1 0 3/31/05 13 4 0 ----------------------------------------------------------------------------- 2004 QUARTER ENDING: 12/31/04 12 1 0 9/30/04 8 4 0 6/30/04 10 3 0 3/31/04............. 9 1 0 ----------------------------------------------------------------------------- 2003 QUARTER ENDING: 12/31/03 11 1 0 9/30/03 8 1 0 6/30/03 6 3 0 3/31/03 12 6 1 ----------------------------------------------------------------------------- 2002 PERIOD ENDING: 12/31/02* 5 7 1 ----------------------------------------------------------------------------- ----------------------- ----------------------------------------------------- Bid/Offer Midpoint Price Below NAV ----------------------- ----------------------------------------------------- 50 - 99 100 - 199 >200 BASIS POINTS BASIS POINTS BASIS POINTS ----------------------- ----------------------------------------------------- 2005 QUARTER ENDING: 9/30/05 6 1 4 6/30/05 10 4 0 3/31/05 4 8 1 ----------------------------------------------------------------------------- 2004 QUARTER ENDING: 12/31/04 4 0 1 9/30/04 7 1 1 6/30/04 5 2 1 3/31/04............. 3 8 0 ----------------------------------------------------------------------------- 2003 QUARTER ENDING: 12/31/03 4 0 0 9/30/03 6 3 0 6/30/03 11 4 0 3/31/03 11 4 0 ----------------------------------------------------------------------------- 2002 PERIOD ENDING: 12/31/02* 9 5 0 -----------------------------------------------------------------------------
* Commencement of trading October 21, 2002 21 STREETTRACKS INDEX SHARES FUNDS OTHER INFORMATION (CONTINUED) SEPTEMBER 30, 2005 (UNAUDITED) - -------------------------------------------------------------------------------- SHAREHOLDER EXPENSE EXAMPLE As a shareholder of a Fund, you incur two types of costs: (1) transaction costs which may include creation and redemption fees on brokerage charges and (2) ongoing costs, including management fees, distribution (12b-1) fees, administration, custodian and transfer agent fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds. It is based on an investment of $1,000 invested at April 1, 2005 and held for the six months ended September 30, 2005. ACTUAL EXPENSES The first table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you incurred 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 table under the heading entitled "Expenses Paid During Period" to estimate the expenses attributable to your investment during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second table below provides information about hypothetical account values and hypothetical expenses based on a Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not a Fund's actual return. Thus, you should not use the hypothetical account values and expenses to estimate the actual ending account balance or your expenses for the period. Rather, these figures are provided to enable you to compare the ongoing costs of investing in a 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. The Funds charge transaction fees of $3,000 per Creation Unit to those persons creating or redeeming Creation Units. If you buy or sell streetTRACKS Index Fund Shares in the secondary market, you will incur customary brokerage commissions and charges. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as creation and redemption fees on brokerage charges. Therefore, the second 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 transaction costs were included, your costs would have been higher.
BEGINNING ACCOUNT ENDING ACCOUNT EXPENSES PAID VALUE VALUE DURING PERIOD* 4/01/05 9/30/05 4/01/05 TO 9/30/05 ----------------- -------------- ------------------ ACTUAL streetTRACKS Dow Jones STOXX 50 Fund................... $1,000 $1,072.03 $1.82 streetTRACKS Dow Jones EURO STOXX 50 Fund.............. $1,000 $1,061.19 $1.76 HYPOTHETICAL (ASSUMING A 5% RETURN BEFORE EXPENSES) streetTRACKS Dow Jones STOXX 50 Fund................... $1,000 $1,023.31 $1.78 streetTRACKS Dow Jones EURO STOXX 50 Fund.............. $1,000 $1,023.36 $1.72
* Expenses are equal to the Fund's annualized expense ratio of 0.35% and 0.34%, respectively, multiplied by the average account value of the period, multiplied by 183/365. TAX INFORMATION (UNAUDITED) QUALIFIED DIVIDEND INCOME For the fiscal year ended September 30, 2005, the funds will designate up to the maximum amount allowable pursuant to the Internal Revenue Code, as qualified dividend income eligible for reduced tax rates. These lower rates range from 5% to 15% depending on the individual's tax bracket. Complete information will be reported in conjunction with form 1099-DIV. 22 STREETTRACKS INDEX SHARES FUNDS OTHER INFORMATION (CONTINUED) SEPTEMBER 30, 2005 (UNAUDITED) - -------------------------------------------------------------------------------- CAPITAL GAINS DISTRIBUTIONS Pursuant to Internal Revenue Section 852(b), the following Funds paid distributions, which have been designated as capital gains distributions for the fiscal year ended September 30, 2005.
AMOUNT ---------- streetTRACKS Dow Jones STOXX 50 Fund........................ $ -- streetTRACKS Dow Jones EURO STOXX 50 Fund................... 1,406,551
FOREIGN TAX CREDIT The Trust has made an election under Internal Revenue Code Section 853 to pass through foreign taxes paid by the Fund to its shareholders. For the year ended September 30, 2005, the total amount of foreign taxes will be passed through are:
AMOUNT ---------- streetTRACKS Dow Jones STOXX 50 Fund........................ $ 80,535 streetTRACKS Dow Jones EURO STOXX 50 Fund................... 708,716
PROXY VOTING POLICIES You may obtain a description of the Fund's proxy voting policies and procedures, without charge, upon request by contacting the Funds directly at 1-866-STRACKS (1-866-787-2257) (toll-free), on the website of the Securities and Exchange Commission, at www.sec.gov, or on the Funds' website at www.streetTRACKS.com. Information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is also available without charge, upon request by calling 1-866-787-2257 (toll-free), on the website of the Securities and Exchange Commission, at www.sec.gov, and on the Funds' website at www.streetTRACKS.com. QUARTERLY PORTFOLIO SCHEDULE The Funds file a complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on the Form N-Q. The Funds' Forms N-Q are available on the Securities and Exchange Commission's website at www.sec.gov and may be reviewed and copied at the Securities and Exchange Commission's Public Reference Room in Washington, DC. Information on the form N-Q will be available upon request, without charge, by calling 1-866-787-2257 (toll-free), and on the Funds' website www.streetTRACKS.com. INVESTMENT ADVISORY CONTRACT RENEWAL At an in-person meeting held on August 22, 2005, the Board of Trustees of the Trust (the "Board") considered renewal of the Investment Advisory Agreement (the "Agreement") between the Trust and SSgA Funds Management, Inc. (the "Adviser") with respect to the series portfolios of the Trust (each a "Fund", collectively, the "Funds"). The Trustees who are not "interested persons" of the Trust within the meaning of the Investment Company Act of 1940, as amended (the "Independent Trustees") also met separately with their counsel to consider the Agreement. In evaluating the Agreement, the Board drew on materials provided to them by the Adviser and on other materials provided by State Street Bank and Trust Company, the Trust's Administrator, Transfer Agent and Custodian ("State Street"). In deciding whether to renew the Agreement, the Board considered various factors, including (i) the nature, extent and quality of the services provided by the Adviser under the Agreement, (ii) the investment performance of the Funds, (iii) the costs to the Adviser of its services and the profits realized by the Adviser from its relationship with the Trust, and (iv) the extent to which economies of scale would be realized if and as the Funds grow and whether the fee levels in the Agreement reflect these economies of scale. First, the Board considered the nature, extent and quality of the services provided by the Adviser. In doing so, they relied on their prior experience with the Trust, the Adviser and State Street, as well as materials provided prior to and at the meeting. The Board reviewed the Advisory Agreements and the Adviser's responsibilities for managing the investment operations of each Fund in accordance with each Fund's investment objective and policies, 23 STREETTRACKS INDEX SHARES FUNDS OTHER INFORMATION (CONTINUED) SEPTEMBER 30, 2005 (UNAUDITED) - -------------------------------------------------------------------------------- and the applicable legal and regulatory requirements. They appreciated the relatively unique nature of the Funds, as ETFs, and the experience and expertise of the Adviser with ETFs. The Board considered the background and experience of the Adviser's senior management, including those individuals responsible for the portfolio management and compliance. They also considered the resources, structures and practices of the Adviser in managing the Funds' portfolios and in monitoring and securing each Fund's compliance with its investment objectives and policies and with applicable laws and regulations. The Board also considered information about the Adviser's best execution procedures and overall investment management business, noting that the Adviser serves a wide range of clients across a broad spectrum of asset classes. The Board looked at the Adviser's general knowledge of the investment business and that of its parent, State Street Global Advisers, with which the Adviser shares all of its senior personnel. The Board considered that the Adviser and its affiliates constitute one of the world's largest investment management enterprises for indexed products generally and ETFs in particular. The Independent Trustees then determined that the nature, extent and quality of the services provided by the Adviser to the Trust were necessary and appropriate. The Independent Trustees' reviewed the Funds' performance. They noted that the distinctive indexed investment objective of each of the Funds made the analysis of investment performance, in absolute terms, less of a priority than that which normally attaches to the performance of actively-managed funds. The Board was more concerned with the extent to which each Fund achieved its objective of replicating the total return of the applicable index (index tracking and tracking error). The Board considered that the Funds did not generate any taxable gain during the most recent fiscal year, and that the Funds were unlikely to distribute any material taxable gains in the current fiscal year. The Independent Trustees then determined that the performance of each Fund was satisfactory. The Board considered the profitability of the advisory arrangement with the Funds to the Adviser including data on the Funds' historical profitability to the Adviser. The Independent Trustees, through their counsel, had the opportunity to discuss with representatives of the Adviser and State Street the methodologies used in computing the costs that formed the bases of the profitability calculations and determined that these methodologies were reasonable. The Independent Trustees concluded that, to the extent that the Adviser's relationship with the Trust had been profitable, the profitability was not excessive. The Board considered whether the Adviser benefited in other ways from its relationship with the Trust, noting that Adviser maintains no soft-dollar arrangements in connection with the Trust's brokerage transactions. The Independent Trustees concluded that, to the extent that the Adviser derives other benefits from its relationship with the Trust, those benefits are not so significant as to cause the Adviser's fee to be excessive. The Independent Trustees determined that the Adviser is likely to realize economies of scale in managing the Funds as assets grow in size. The Independent Trustees further determined that such economies of scale are currently shared with the Funds by way of the low advisory fee and unitary fee structure of the Trust. The Board evaluated the Funds' unitary fee through the review of comparative information with respect to fees paid by similar funds -- i.e., ETFs tracking sector indexes. The Board also reviewed the expense ratios of the Funds and the unitary fee structure. The Independent Trustees concluded, based on the information presented, that each Fund's fees were fair and reasonable in light those of their direct competitors. The Board reviewed the universe of similar ETFs for each Fund based upon Lipper Analytical Services and related comparative information. The Board used a Fund by Fund analysis of the data to determine that each Fund's expense ratio was reasonable in light of its peers. The Independent Trustees' conclusions regarding the Agreement were as follows: (a) the nature and extent of the services provided by the Adviser were appropriate; (b) the performance, and more importantly, the index tracking, of each Fund had been satisfactory; (c) the Adviser's fees for each Fund and the unitary fee, considered in relation to the services provided, were fair and reasonable; (d) the profitability of the Trust's relationship with the Adviser was not excessive; (e) any additional benefits to the Adviser were not of a magnitude materially to affect the Independent Trustees' conclusions; and (f) the fees paid to the Adviser adequately shared the economies of scale with the Funds. 24 STREETTRACKS INDEX SHARES FUNDS OTHER INFORMATION SEPTEMBER 30, 2005 (UNAUDITED) - -------------------------------------------------------------------------------- TRUSTEES AND OFFICERS
NUMBER OF TERM OF OFFICE PORTFOLIOS IN NAME, ADDRESS AND POSITION(S) AND LENGTH OF PRINCIPAL OCCUPATION(S) FUND COMPLEX OTHER DIRECTORSHIPS DATE OF BIRTH WITH FUNDS TIME SERVED DURING PAST 5 YEARS OVERSEEN BY TRUSTEE HELD BY TRUSTEE - ----------------- ----------- -------------- ----------------------- ------------------- ------------------- David M. Kelly Independent Unlimited President and CEO, NSCC 19 Trustee, streetTRACKS 420 Sabal Palm Lane Trustee Elected: (1983-February 2000) (a Series Trust Vero Beach, FL 32963 September 2000 clearing org.); Vice Chicago Stock Exchange 10/10/38 Chairman, DTCC (Public Governor/ (1999-February 2000)(a Director); Penson depository in US); Vice Worldwide Inc. Chairman and CEO, (Director); Thomas Government Securities Murray Ltd. Clearing Corp. (1990- (Director); Custodial February 2000) (a Trust Co. (Director). government securities clearing company). Frank Nesvet Independent Unlimited Chief Executive 19 Trustee, streetTRACKS c/o streetTRACKS Trustee Elected: Officer, Libra Group, Series Trust Series Trust September 2000 Inc. (1998- present) (a Jefferson Pilot State Street Financial financial services Variable Fund, Inc., Center consulting company); (Director); The One Lincoln Street Managing Director, Massachusetts Health & Boston, MA 02111-2900 Senior Vice President Education Tax Exempt 9/24/43 and Fund Treasurer, New Trust (Trustee). England Funds (1993-1998). Helen F. Peters Independent Unlimited Professor of Finance, 19 Trustee, streetTRACKS 133 South Street Trustee Elected: Carroll School of Series Trust Needham, Massachusetts September 2000 Management, Boston Tradeware Global 02492 College (2003-present); (Director); BJ's 3/22/48 Dean, Boston College Wholesale Clubs (August 2000-2003); (Director). Partner Samuelson Peters, LLC (1999- September 3000). James E. Ross President Unlimited President, SSgA Funds N/A N/A SSgA Funds Elected: Management, Inc. Management, Inc. August 2005 (2005-present); State Street Financial Principal, SSgA Funds Center Management, Inc. One Lincoln Street (2001-present); Boston, MA 02111-2900 Principal, State Street 6/24/65 Global Advisors (March 2000 to present); Vice President, State Street Bank and Trust Company (1998-March 2000). Michael P. Riley Vice Unlimited Principal, State Street N/A N/A SSgA Funds Management, President Elected: Global Advisors (2005 Inc. February 2005 to present); Assistant State Street Financial Vice President, State Center Street Bank and Trust One Lincoln Street Company (2000-2004). Boston, MA 02111-2900 3/22/69
25 STREETTRACKS INDEX SHARES FUNDS OTHER INFORMATION (CONTINUED) SEPTEMBER 30, 2005 (UNAUDITED) - --------------------------------------------------------------------------------
NUMBER OF TERM OF OFFICE PORTFOLIOS IN NAME, ADDRESS AND POSITION(S) AND LENGTH OF PRINCIPAL OCCUPATION(S) FUND COMPLEX OTHER DIRECTORSHIPS DATE OF BIRTH WITH FUNDS TIME SERVED DURING PAST 5 YEARS OVERSEEN BY TRUSTEE HELD BY TRUSTEE - ----------------- ----------- -------------- ----------------------- ------------------- ------------------- Gary L. French Treasurer Unlimited Senior Vice President, N/A N/A State Street Bank and Elected: State Street Bank and Trust Company May 2005 Trust Company 2 Avenue de Lafayette (2002-present); Boston, MA 02111 Managing Director, 07/04/51 Deutsche Bank (2001-2002); President, UAM Fund Services (1995-2001); Mary Moran Zeven Secretary Unlimited Senior Vice President N/A N/A State Street Bank and Elected: and Senior Managing Trust Company August 2001 Counsel, State Street One Lincoln Street Bank and Trust Company Boston, Massachusetts (2002- present); Vice 02111 President and Counsel, 2/27/61 State Street Bank and Trust Company (2000-2002). Scott M. Zoltowski Assistant Unlimited Vice President and N/A N/A State Street Bank and Secretary Elected: Counsel, State Street Trust Company November 2004 Bank and Trust Company One Lincoln Street (2004- present); Senior Boston, MA 02111 Counsel, BISYS, Inc. 1/30/69 (2001-2004); Associate, Dechert LLP (1999- 2001). John W. Clark Assistant Unlimited Vice President, State N/A N/A State Street Bank and Treasurer Elected: Street Bank & Trust Trust Company August 2005 Company (2001- One Lincoln Street present); Director, Boston, MA 02111 Investors Bank & Trust 03/24/67 Company (1998-2000); Assistant Vice President, Investors Bank & Trust Company (1996-1998). Matthew Flaherty Assistant Unlimited Assistant Director, N/A N/A State Street Bank and Treasurer Elected: State Street Bank and Trust Company May 2005 Trust (1994-present). One Lincoln Street Boston, MA 02111 2/19/71 Peter A. Ambrosini Chief Unlimited Senior Principal and N/A N/A SSgA Funds Compliance Elected: Chief Compliance and Management, Inc. Officer May 2004 Risk Management State Street Financial Officer, SSgA Funds Center Management, Inc. One Lincoln Street (2001-present); Boston, MA 02111 Managing Director, 12/17/43 PricewaterhouseCoopers (1986-2001).
26 streetTRACKS (R) INDEX SHARES FUNDS TRUSTEES David M. Kelly Frank Nesvet Helen F. Peters OFFICERS James E. Ross, President Michael P. Riley, Vice President Gary French, Treasurer Mary Moran Zeven, Secretary Scott M. Zoltowski, Assistant Secretary John W. Clark, Assistant Treasurer Matthew Flaherty, Assistant Treasurer Peter A. Ambrosini, Chief Compliance Officer INVESTMENT MANAGER SSgA Funds Management, Inc. State Street Financial Center One Lincoln Center Boston, MA 02111 DISTRIBUTOR State Street Global Markets, LLC State Street Financial Center One Lincoln Street Boston, MA 02110 CUSTODIAN, ADMINISTRATOR AND TRANSFER AGENT State Street Bank and Trust Company State Street Financial Center One Lincoln Street Boston, MA 02110 LEGAL COUNSEL Clifford Chance US LLP 31 West 52nd Street New York, New York 10019 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PricewaterhouseCoopers LLP 125 High Street Boston, MA 02110 streetTRACKS are distributed by State Street Global Markets, LLC, a wholly-owned subsidiary of State Street Corporation. State Street Global Markets, LLC is a member of NASD, SIPC, and the Boston Stock Exchange. The information contained in this report is intended for the general information of shareholders of the Trust. This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current Trust prospectus which contains important information concerning the Trust. You may obtain a current prospectus from the Distributor by calling 1-866-S-TRACKS or visiting www.streettracks.com. Please read the prospectus carefully before you invest. The investment return and principal value of an investment in the streetTRACKS funds will fluctuate in value, so that when shares are sold or redeemed they may be worth more or less than when they were purchased. International investments may involve risk of capital loss from unfavorable fluctuations in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. In general, streetTRACKS shares can be expected to move up or down in value with the value of the applicable index. Although streetTRACKS shares may be bought and sold on the exchange through any brokerage account, streetTRACKS shares are not individually redeemable from the Fund. Investors may acquire streetTRACKS and tender them for redemption through the Fund in Creation Unit Aggregations only. Please see the prospectus for more details. streetTRACKS are not sponsored, endorsed, sold, or promoted by Dow Jones & Company, Time Inc., ("Dow Jones"). Dow Jones does not make any representation regarding the advisability of investing in streetTRACKS. streetTRACKS are distributed by State Street Global Markets, LLC, a wholly-owned subsidiary of State Street Corporation. State Street Global Markets, LLC is a member of NASD, SIPC, and the Boston Stock Exchange. References to State Street may include State Street Corporation and its affiliates. Shares of the streetTRACKS funds are not insured by the FDIC or by another governmental agency; they are not obligations of the FDIC nor are they deposits or obligations of or guaranteed by State Street Bank and Trust Company. streetTRACKS shares are subject to investment risks, including possible loss of the principal invested. The streetTRACKS funds pay State Street for its services as investment advisor, custodian, transfer agent and shareholder servicing agent. For more information on streetTRACKS, or to obtain a prospectus, call: 1-866-S-TRACKS or visit WWW.STREETTRACKS.COM Please read the prospectus carefully before you invest or send money. (STATE STREET GLOBAL ADVISORS SSGA (R) LOGO) (STATE STREET LOGO) ITEM 2. CODE OF ETHICS. As of the end of the period covered by this report, the registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party (the "Code of Ethics"). During the period covered by this report, no substantive amendments were made to the Code of Ethics. During the period covered by this report, the registrant did not grant any waivers, including any implicit waivers, from any provision of the Code of Ethics. The Code of Ethics is attached hereto as Exhibit 12(a)(1). ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. (a)(1) The Board of Trustees of the registrant has determined that the registrant has one Board member serving on the Audit Committee that possess the attributes identified in Instructions 2(b) of Item 3 to Form N-CSR to qualify as an "audit committee financial expert." (2) Frank Nesvet is the registrant's audit committee financial expert. The Board also determined that Mr. Nesvet is not an "interested person(s)" of the registrant as that term is defined in Section 2(a)(19) of the Investment Company Act. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. (a) Audit Fees. For the fiscal years ending September 30, 2005 and September 30, 2004, the aggregate audit fees billed for professional services rendered by the principal accountant were $34,800 and $31,400, respectively. The nature of the services are (1) auditing of the statements of assets and liabilities, related statements of operations and changes in net assets, and the financial highlights of each series of the registrant; (2) auditing and reporting on the financial statements to be included in the amendment to the registrant's registration statement on Form N-1A to be filed with the Securities and Exchange Commission; (3) review of the amendment to the registration statement; and (4) issuance of a Report on Internal Control for inclusion in the registrant's Form N-SAR. (b) Audit-Related Fees. For the fiscal years ending September 30, 2005 and September 30, 2004, the principal accountant did not bill the registrant any fees for assurances and related services that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of this Item. (c) Tax Fees. For the fiscal years ending September 30, 2005 and September 30, 2004, the aggregate tax fees billed for professional services rendered by the principal accountant were $13,000 and $12,400, respectively. Services included the review of the registrant's federal, state and local income, franchise and other tax returns. (d) All Other Fees. There were no other fees billed by the principal accountant for the fiscal years ending September 30, 2005 and September 30, 2004. (e)(1) Audit Committee Pre-Approval Policies and Procedures. The registrant's Audit Committee Charter states the following with respect to pre-approval procedures: Before the independent auditors are engaged by the Trust to render audit or non-audit services, either: a. The Audit Committee shall pre-approve all auditing services and permissible non-audit services (e.g., tax services) provided to the Trust. The Audit Committee may delegate to one or more of its members the authority to grant pre-approvals. Any decision of any member to whom authority is delegated under this section shall be presented to the full Audit Committee at its next regularly scheduled meeting; or b. The engagement to render the auditing service or permissible non-audit service is entered into pursuant to pre-approval policies and procedures established by the Audit Committee. Any such policies and procedures must (1) be detailed as to the particular service and (2) not involve any delegation of the Audit Committee's responsibilities to the investment adviser. The Audit Committee must be informed of each service entered into pursuant to the policies and procedures. A copy of any such policies and procedures shall be attached as an exhibit to the Audit Committee Charter. c. De Minimis Exceptions to Pre-Approval Requirements. Pre-Approval for a service provided to the Trust other than audit, review or attest services is not required if: (1) the aggregate amount of all such non-audit services provided to the Trust constitutes not more than 5 percent of the total amount of revenues paid by the Trust to the independent auditors during the fiscal year in which the non-audit services are provided; (2) such services were not recognized by the Trust at the time of the engagement to be non-audit services; and (3) such services are promptly brought to the attention of the Audit Committee and are approved by the Audit Committee or by one or more members of the Audit Committee to whom authority to grant such approvals has been delegated by the Audit Committee prior to the completion of the audit. d. Pre-Approval of Non-Audit Services Provided to the investment adviser and Certain Control Persons. The Audit Committee shall pre-approve any non-audit services proposed to be provided by the independent auditors to (a) the investment adviser and (b) any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Trust, if the independent auditors' engagement with the investment adviser or any such control persons relates directly to the operations and financial reporting of the Trust. It shall be the responsibility of the independent auditors to notify the Audit Committee of any non-audit services that need to be pre-approved. e. Application of De Minimis Exception: The De Minimis exception set forth above applies to pre-approvals under this Section as well, except that the "total amount of revenues" calculation is based on the total amount of revenues paid to the independent auditors by the Trust and any other entity that has its services approved under this Section (i.e., the investment adviser or any control person). (e)(2) Percentage of Services. One hundred percent of the services described in each of paragraphs (b) through (d) of this Item were approved by the registrant's Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. (f) Not applicable. (g) For the fiscal years ending September 30, 2005 and September 30, 2004, the aggregate non-audit fees billed by PwC for services rendered to the Trust and SSgA Funds Management, Inc. (the "Adviser") and any entity controlling, controlled by, or under common control with the Adviser that provided ongoing services to the Trust were $4,578,000 and $2,904,000, respectively. (h) Not applicable. ITEM 5. DISCLOSURE OF AUDIT COMMITTEES FOR LISTED COMPANIES. The registrant has an audit committee which was established by the Board of Trustees of the Trust in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended. The members of the registrant's audit committee are Frank Nesvet, David Kelly and Helen Peters. ITEM 6. SCHEDULE OF INVESTMENTS. The schedule of investments is 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. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable to the registrant. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable to the registrant. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Registrant has not adopted any material changes to the procedures by which shareholders may recommend nominees to the registrant's Board. ITEM 11. CONTROLS AND PROCEDURES. (a) Within 90 days of the filing date of this Form N-CSR, James Ross, the registrant's President and Principal Executive Officer, and Gary L. French, the registrant's Treasurer and Principal Financial Officer, reviewed the registrant's disclosure controls and procedures and evaluated their effectiveness. Based on their review, Messrs. Ross and French determined that the disclosure controls and procedures adequately ensure that information required to be disclosed by the registrant in its periodic reports is recorded, processed, summarized and reported within the time periods required by the Securities and Exchange Commission. (b) There were no significant changes in the registrant's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. ITEM 12. EXHIBITS. (a)(1) Code of Ethics referred to in Item 2. (a)(2) Separate certifications required by Rule 30a-2 under the Investment Company Act of 1940 for each principal executive officer and principal financial officer of the registrant are attached. (b) A single certification required by Rule 30a-2(b) under the Investment Company Act of 1940, Rule 13a-14(b) or Rule 15d-14(b) under the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code for the principal executive officer and principal financial officer of the registrant is attached. SIGNATURES 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. streetTRACKS(R) Index Shares By: /s/ James Ross ----------------------------------------- James Ross President and Principal Executive Officer Date: November 28, 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/ James Ross ----------------------------------------- James Ross President and Principal Executive Officer Date: November 28, 2005 By: /s/ Gary L. French ----------------------------------------- Gary L. French Treasurer and Principal Financial Officer Date: November 22, 2005 EX-99.CODE ETH 2 b57369kaexv99wcodeeth.txt CODE OF ETHICS Exhibit 12(a)(1) STREETTRACKS(R) INDEX SHARES FUNDS CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS I. COVERED OFFICERS/PURPOSE OF THE CODE This Code of Ethics (the "Code") shall apply to streetTRACKS(R) Index Shares Funds (the "Trust") Principal Executive Officer, Principal Financial Officer, Controller, Principal Accounting Officer and persons performing similar functions (the "Covered Officers," each of whom is named in Exhibit A attached hereto) for the purpose of promoting: - - honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; - - full, fair, accurate, timely and understandable disclosure in reports and documents that the Trust files with, or submits to, the Securities and Exchange Commission ("SEC") and in other public communications made by the Trust; - - compliance with applicable laws and governmental rules and regulations; - - the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and - - accountability for adherence to the Code. Each Covered Officer should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest. II. COVERED OFFICERS SHOULD HANDLE ETHICALLY ACTUAL AND APPARENT CONFLICTS OF INTEREST OVERVIEW. A "conflict of interest" occurs when a Covered Officer's private interest interferes with the interests of, or his service to, the Trust. For example, a conflict of interest would arise if a Covered Officer, or a member of his family, receives improper personal benefits as a result of his position with the Trust. Covered Officers must avoid conduct that conflicts, or appears to conflict, with their duties to the Trust. All Covered Officers should conduct themselves such that a reasonable observer would have no grounds for belief that a conflict of interest exists. Covered Officers are not permitted to self-deal or otherwise to use their positions with the Trust to further their own or any other related person's business opportunities. This Code does not, and is not intended to, repeat or replace the programs and procedures or codes of ethics of the Trust's investment adviser or distributor. Although typically not presenting an opportunity for improper personal benefit, conflicts may arise from, or as a result of, the contractual relationship between the Trust and its service 1 providers, including investment adviser, of which the Covered Officers may be officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for the Trust, the investment adviser, or other service providers), be involved in establishing policies and implementing decisions that will have different effects on the service providers and the Trust. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the Trust and its service providers and is consistent with the performance by the Covered Officers of their duties as officers of the Trust. Thus, if performed in conformity with the provisions of the Investment Company Act of 1940, as amended ("Investment Company Act") and the Investment Advisers Act of 1940, as amended ("Investment Advisers Act"), such activities will be deemed to have been handled ethically. In addition, it is recognized by the Trust's Board of Trustees (the "Board") that the Covered Officers may also be officers or employees of one or more other investment companies covered by this or other codes. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of the Trust. * * * * Each Covered Officer must not: - - use his personal influence or personal relationship improperly to influence investment decisions or financial reporting by the Trust whereby the Covered Officer would benefit personally to the detriment of the Trust; - - cause the Trust to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than the benefit of the Trust; or - - retaliate against any other Covered Officer or any employee of the Trust or its affiliated persons for reports of potential violations by the Trust of applicable rules and regulations that are made in good faith. Each Covered Officer must discuss certain material conflict of interest situations with the Trust's Audit Committee. Examples of such situations include: - - service as a director, trustee, general partner, or officer of any unaffiliated business organization. This rule does not apply to charitable, civic, religious, public, political, or social organizations, the activities of which do not conflict with the interests of the Trust; - - the receipt of any non-nominal gifts (valued over $100.00); - - the receipt of any entertainment from any company with which the Trust has current or prospective business dealings unless such entertainment is business-related, reasonable in cost, appropriate as to time and place, and not so frequent as raise any question of impropriety; 2 - - any ownership interest in, or any consulting or employment relationship with, any of the Trust's service providers, other than its investment adviser, principal underwriter, administrator, transfer agent, custodian or any affiliated person thereof; and - - a direct or indirect financial interest in commissions, transaction charges or spreads paid by the Trust for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer's employment, such as compensation or equity ownership. III. DISCLOSURE AND COMPLIANCE - - Each Covered Officer will monitor the compliance of the Trust and the Trust's service providers with federal or state statutes, regulations or administrative procedures that affect the operation of the Trust. - - Each Covered Officer should not knowingly misrepresent, or cause others to misrepresent, facts about the Trust to others, whether within or outside the Trust, including to the Trust's Board, Trust's Audit Committee and the Trust's independent auditors, and to governmental regulators and self-regulators and self-regulatory organizations. - - Each Covered Officer should, to the extent appropriate within his or her area of responsibility, consult with other officers and employees of the Trust and its service providers with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Trust files with, or submits to, the SEC and in other public communications made by the Trust. - - Each Covered Officer will exhibit and promote the highest standards of honest and ethical conduct through the establishment and operation of policies and procedures that encourage professional integrity in all aspects of the Trust's operations. IV. REPORTING AND ACCOUNTABILITY Each Covered Officer must: - - upon adoption of this Code (or thereafter as applicable, upon becoming a Covered Officer), sign and return a report in the form of Exhibit B to the Trust's compliance officer affirming that he or she has received, read, and understands the Code; - - annually sign and return a report in the form of Exhibit C to the Trust's compliance officer as an affirmation that he or she has complied with the requirements of the Code; and - - notify the Trust's Audit Committee promptly if he or she knows of any violation of this Code. Failure to do so is itself a violation of this Code. 3 The Trust's Audit Committee is responsible for applying this Code to specific situations in which questions are presented under it and has the authority to interpret this Code in any particular situation including any approvals or waivers sought by the Covered Persons. The Audit Committee will follow these procedures in investigating and enforcing this Code: - - The Audit Committee will take all appropriate actions to investigate any potential violations reported to the Committee. - - If, after such investigation, the Audit Committee believes that no violation has occurred, the Audit Committee is not required to take any further action. - - Any matter that the Audit Committee believes is a violation of this Code will be reported to the full Board. - - If the Board concurs that a violation has occurred, it will notify the appropriate personnel of the applicable service provider and may dismiss the Covered Officer as an officer of the Trust. - - The Audit Committee will be responsible for granting waivers of provisions of this Code, as appropriate. - - Any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules. V. OTHER POLICIES AND PROCEDURES This Code shall be the sole code of ethics adopted by the Trust for purposes of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the Trust, the Fund's investment adviser, principal underwriter, or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superseded by this Code to the extend that they overlap or conflict with the provisions of this Code. The Trust's, investment adviser's and principal underwriter's codes of ethics under Rule 17j-1 under the Investment Company Act and the investment adviser's more detailed policies and procedures are separate requirements applying to the Covered Officers and others, and are not part of this Code. VI. AMENDMENTS Any amendments to this Code, other than amendments to Exhibit A, must be approved or ratified by a majority vote of the Board, including a majority of Independent Trustees. 4 VII. CONFIDENTIALITY All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Trust's Board or Audit Committee. VIII. INTERNAL USE The Code is intended solely for the internal use by the Trust and does not constitute an admission, by or on behalf of Trust, as to any fact, circumstance, or legal conclusion. 5 EXHIBIT A Persons Covered by this Code of Ethics as of August 22, 2005:
TITLE NAME ----- ---- President and Principal Executive Officer James Ross Vice President Michael P. Riley Treasurer and Principal Financial Officer Gary French Assistant Treasurer Jack Clark Assistant Treasurer Matthew W. Flaherty
6 EXHIBIT B INITIAL CERTIFICATION FORM This is to certify that I have read and understand the Code of Ethics for Principal Executive and Senior Financial Officers of streetTRACKS(R) Index Shares Funds, dated July 1, 2004, and that I recognize that I am subject to the provisions thereof and will comply with the policy and procedures stated therein. Please sign your name here: _______________________________ Please print your name here: ______________________________ Please date here: ________________________________________ 7 EXHIBIT C ANNUAL CERTIFICATION FORM This is to certify that I have read and understand the Code of Ethics for Principal Executive and Senior Financial Officers of the streetTRACKS(R) Index Shares Funds dated July 1, 2004, (the "Code") and that I recognize that I am subject to the provisions thereof and will comply with the policy and procedures stated therein. This is to further certify that I have complied with the requirements of the Code during the period of _____________ through ______________. Please sign your name here: _______________________________ Please print your name here: ______________________________ Please date here: _________________________________________ 8 EX-99.CERT 3 b57369kaexv99wcert.txt CERTIFICATIONS EXHIBIT 12(A)(2) CERTIFICATIONS I, James Ross, President and Principal Executive Officer of streetTRACKS(R) Index Shares Funds, certify that: 1. I have reviewed this report on Form N-CSR of streetTRACKS(R) Index Shares Funds; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 28, 2005 By: /s/ James Ross ----------------------------------------- James Ross President and Principal Executive Officer I, Gary L. French, Treasurer and Principal Financial Officer of streetTRACKS(R) Index Shares Funds, certify that: 1. I have reviewed this report on Form N-CSR of streetTRACKS(R) Index Shares Funds; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 22, 2005 By: /s/ Gary L. French ----------------------------------------- Gary L. French Treasurer and Principal Financial Officer EX-99.906CERT 4 b57369kaexv99w906cert.txt 906 CERTIFICATIONS EXHIBIT 12(B) I, James Ross, President and Principal Executive Officer, and I, Gary L. French, Treasurer and Principal Financial Officer, of streetTRACKS(R) Index Shares Funds (the "Trust") each certify that: 1. This Form N-CSR filing for the Trust (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust. By: /s/ James Ross ----------------------------------------- James Ross President and Principal Executive Officer Date: November 28, 2005 By: /s/ Gary L. French ----------------------------------------- Gary L. French Treasurer and Principal Financial Officer Date: November 22, 2005 -----END PRIVACY-ENHANCED MESSAGE-----