SUPPLEMENT DATED JULY 30, 2001

                                      TO

                                 iSHARES, INC.

                                  PROSPECTUS

                             DATED JANUARY 2, 2001

The information in this Supplement updates the information in, and should be
read in conjunction with, the Prospectus of iShares, Inc., dated January 2,
2001.

Changes in the MSCI Indices

     Morgan Stanley Capital International Inc. (MSCI), the compiler of the
benchmark indices utilized by each of the Index Funds, has announced significant
methodology changes to all of its equity indices.  According to MSCI, the
methodology will change as follows:

     .  Index constituents with free-float (generally, shares not held by
        affiliates) greater than 15% will be included at their actual float
        level, rounded up to the nearest 5%.

     .  Target market coverage will be increased from the current 60% of the
        total market capitalization to 85% of the float-adjusted market
        capitalization within each industry group and within each country.

     The changes to the MSCI Indices will occur in two stages, on November 30,
2001 and May 31, 2002.  MSCI has commenced publishing index constituents and
their inclusion factors based on the new methodology and has announced that it
will calculate and disseminate the indices that utilize the new methodology,
called "Provisional Indices" beginning May 31, 2001.  MSCI advises that the
Provisional Indices will be calculated alongside MSCI's existing indices until
May 31, 2002, on which the Provisional Indices will replace the existing indices
and become the definitive MSCI Indices.

     Based on the recommendation of the Investment Adviser, the Board of
Directors of iShares, Inc. determined that it was in the best interests of each
Index Fund to implement the Provisional Indices as the new benchmark indices of
the Index Funds during a transition period commencing June 1, 2001.  All of the
transitions have now been completed  and each Index Fund has been using the
appropriate Provisional Index as its benchmark for purposes of its investment
objective since the date transition was completed

Changes in the Malaysian Capital Controls

     The Company understands, based on publicly available information, that the
Finance Ministry of Malaysia has abolished, effective May 2, 2001, the exit levy
of 10% that had applied to profits repatriated by foreign entities.
Accordingly, the iShares MSCI Malaysia (Free) Index Fund no longer will be
required under the Malaysian capital controls to pay a profits levy when it
sells Malaysian securities in its portfolio and repatriates the proceeds (e.g.,
in connection with redemptions).

     The Malaysian capital controls have been changed in significant ways since
they were first adopted without warning on September 1, 1998.  There can be no
assurance that the Malaysian capital controls will not be changed in the future
in ways that adversely affect the Fund and its shareholders.