485BPOS

As filed with the Securities and Exchange Commission on December 22, 2005

File Nos. 33-97598 and 811-09102

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT

UNDER
THE SECURITIES ACT OF 1933	x
Post-Effective Amendment No. 30	x
and/or REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940	x
Amendment No. 32	x
(Check appropriate box or boxes)

iShares,^® Inc.

(Exact Name of Registrant as Specified in Charter)

c/o Investors Bank & Trust Company

200 Clarendon Street

Boston, MA 02116

(Address of Principal Executive Office)(Zip Code)

Registrant’s Telephone Number, including Area Code: (415) 597-2000

The Corporation Trust Company

1209 Orange Street

Wilmington, DE 19801

(Name and Address of Agent for Service)

With Copies to:

W. JOHN MCGUIRE, ESQ.	DEEPA DAMRE, ESQ.
MORGAN, LEWIS & BOCKIUS LLP	BARCLAYS GLOBAL INVESTORS, N.A.
1111 PENNSYLVANIA AVE., NW	45 FREMONT STREET
WASHINGTON, DC 20004	SAN FRANCISCO, CA 94105

It is proposed that this filing will become effective (check appropriate box):

¨ Immediately upon filing pursuant to paragraph (b)

x On January 1, 2006 pursuant to paragraph (b)

¨ 60 days after filing pursuant to (a)(1)

¨ On (date) pursuant to paragraph paragraph (a)(1)

¨ 75 days after filing pursuant to paragraph (a)(2)

¨ On (date) pursuant to paragraph (a)(2) of Rule 485

If appropriate, check the following box:

¨ The post-effective amendment designates a new effective date for a previously filed post-effective amendment

iShares^®

iShares, Inc.

iShares, Inc. consists of 24 separate investment portfolios called “Funds.” Each Fund described in this Prospectus seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of a single stock market or all of the stock markets in a geographic region compiled by Morgan Stanley Capital International Inc. (the “Index Provider”). This Prospectus relates to the following Funds:

iShares MSCI Australia Index Fund

iShares MSCI Austria Index Fund

iShares MSCI Belgium Index Fund

iShares MSCI Brazil Index Fund

iShares MSCI Canada Index Fund

iShares MSCI Emerging Markets Index Fund

iShares MSCI EMU Index Fund

iShares MSCI France Index Fund

iShares MSCI Germany Index Fund

iShares MSCI Hong Kong Index Fund

iShares MSCI Italy Index Fund

iShares MSCI Japan Index Fund

iShares MSCI Malaysia Index Fund

iShares MSCI Mexico Index Fund

iShares MSCI Netherlands Index Fund

iShares MSCI Pacific ex-Japan Index Fund

iShares MSCI Singapore Index Fund

iShares MSCI South Africa Index Fund

iShares MSCI South Korea Index Fund

iShares MSCI Spain Index Fund

iShares MSCI Sweden Index Fund

iShares MSCI Switzerland Index Fund

iShares MSCI Taiwan Index Fund

iShares MSCI United Kingdom Index Fund

Barclays Global Fund Advisors (“BGFA”) is the investment adviser to each Fund.

iShares, Inc. (the “Company”) is a registered investment company. The shares of the Company are listed and traded at market prices on national securities exchanges, such as the New York Stock Exchange or the American Stock Exchange. Market prices for a Fund’s shares may be different from its net asset value per share (“NAV”). Each Fund has its own CUSIP number and exchange trading symbol.

Each Fund issues and redeems shares at NAV only in blocks that range from 40,000 to 600,000 shares or multiples thereof, depending on the Fund (“Creation Units”). These transactions are usually in exchange for a basket of securities and an amount of cash. As a practical matter, only institutions or large investors purchase or redeem Creation Units.

Except when aggregated in Creation Units, shares of each Fund are not redeemable securities.

The Securities and Exchange Commission (“SEC”) has not approved or disapproved these securities or passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.

Prospectus dated January 1, 2006

Table of Contents

Details on Investing	Overview	1
in the iShares Funds	Introduction	1
	Investment Objective	1
	Principal Investment Strategies	1
	Representative Sampling	2
	Correlation	2
	Industry Concentration Policy	2
Details on the Risks of	Principal Risk Factors Common to All Funds	4
Investing in the iShares	Market Risk	4
Funds	Foreign Security Risk	4
	Asset Class Risk	4
	Passive Investments	4
	Concentration	4
	Derivatives	4
	Tracking Error Risk	5
	Management Risk	5
	Currency Risk	5
	Emerging Market Risk	5
	Trading Risk	5
	Non-Diversification Risk	5
	Market Trading Risks	5
	Lack of Governmental Insurance or Guarantee	6
	Portfolio Holdings Information	6
Details on Each	Description of the iShares MSCI Index Funds	7
iShares Fund	iShares MSCI Index Funds	7
	iShares MSCI Australia Index Fund	8
	iShares MSCI Austria Index Fund	11
	iShares MSCI Belgium Index Fund	14
	iShares MSCI Brazil Index Fund	17
	iShares MSCI Canada Index Fund	20
	iShares MSCI Emerging Markets Index Fund	23
	iShares MSCI EMU Index Fund	26
	iShares MSCI France Index Fund	29
	iShares MSCI Germany Index Fund	32
	iShares MSCI Hong Kong Index Fund	35
	iShares MSCI Italy Index Fund	38
	iShares MSCI Japan Index Fund	41
	iShares MSCI Malaysia Index Fund	44
	iShares MSCI Mexico Index Fund	47
	iShares MSCI Netherlands Index Fund	50
	iShares MSCI Pacific ex-Japan Index Fund	53
	iShares MSCI Singapore Index Fund	56
	iShares MSCI South Africa Index Fund	59
	iShares MSCI South Korea Index Fund	62
	iShares MSCI Spain Index Fund	65
	iShares MSCI Sweden Index Fund	68
	iShares MSCI Switzerland Index Fund	71

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	iShares MSCI Taiwan Index Fund	74
	iShares MSCI United Kingdom Index Fund	77
Details on Management	Management	80
and Operations	Investment Adviser	80
	Portfolio Managers	81
	Administrator, Custodian and Transfer Agent	81
Details on Buying and	Shareholder Information	81
Selling Shares of the Funds	Buying and Selling Shares	81
	Book Entry	82
	Share Prices	82
	Determination of Net Asset Value	82
	Dividends and Distributions	83
	Taxes	83
	Taxes on Distributions	84
	Taxes When Shares are Sold	84
	Creations and Redemptions	85
	Transaction Fees	85
	Householding	86
	Distribution	87
	Financial Highlights	88
	Index Provider	112
	Disclaimers	113
	Supplemental Information	115
	Premium/Discount Information	115
	Total Return Information	124

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Overview

Introduction

This Prospectus provides the information you need to make an informed decision about investing in the iShares^® Funds. It contains important facts about the Company as a whole and each Fund in particular.

An index is a group of securities that the Index Provider selects as representative of a market, market segment or specific industry sector. The Index Provider determines the relative weightings of the securities in the index and publishes information regarding the market value of the index.

Each Fund is an “index fund” that seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of a particular index (its “Underlying Index”) developed by the following Index Provider:

Morgan Stanley Capital International, Inc. (“MSCI”) is a leading provider of global indices and benchmark-related products and services to investors worldwide. Morgan Stanley, a global financial services firm and a market leader in securities, asset management, and credit services, is the majority shareholder of MSCI.

BGFA, the investment adviser to each Fund, is a subsidiary of Barclays Global Investors, N.A. (“BGI”). BGFA and its affiliates are not affiliated with the Index Provider.

The Principal Investment Strategies and the Principal Risk Factors Common to All Funds sections discuss the principal strategies and risks applicable to the Funds, while the Description of the iShares MSCI Index Funds section provides important information about each Fund, including a brief description of each Fund’s Underlying Index and principal risks specific to that Fund.

Investment Objective

Each Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of its Underlying Index.

Principal Investment Strategies

BGFA uses a “passive” or indexing approach to try to achieve each Fund’s investment objective. Unlike many investment companies, the Funds do not try to “beat” the markets they track and do not seek temporary defensive positions when markets decline or appear overvalued.

Indexing may eliminate some of the risks of active management such as poor security selection. Indexing may also help increase after-tax performance by keeping portfolio turnover low in comparison to actively managed investment companies.

Each Fund, except the iShares MSCI Emerging Markets Index Fund, will normally invest at least 95% of its assets in the securities of its Underlying Index and in American Depositary Receipts (“ADRs”) based on the securities in its Underlying Index. Each Fund, except those listed below, will at all times invest at least 90% of its assets in the securities of its Underlying Index and ADRs. In order to provide a Fund additional flexibility to comply with the requirements of the U.S. Internal Revenue Code and other regulatory requirements and to manage future corporate actions and index changes in the smaller markets, each of the iShares MSCI Australia Index, iShares MSCI Austria Index, iShares MSCI Belgium Index, iShares MSCI Brazil Index, iShares MSCI Hong Kong Index, iShares MSCI Italy Index, iShares MSCI Mexico Index, iShares MSCI Netherlands Index, iShares MSCI Singapore Index, iShares MSCI South Korea Index, iShares MSCI Spain Index, iShares MSCI Sweden Index, iShares MSCI Switzerland Index and iShares MSCI Taiwan Index Funds will at all times invest at least 80% of its assets in the

^®iShares is a registered trademark of Barclays Global Investors, N.A.

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securities of its Underlying Index and ADRs based on securities of its Underlying Index, and at least 90% of its assets in the securities of its Underlying Index or in securities included in the relevant market, but not in its Underlying Index, or in ADRs based on the securities in its Underlying Index.

The iShares MSCI Emerging Markets Index Fund generally will invest at least 90% of its assets in the securities of its Underlying Index or in ADRs and Global Depositary Receipts (“GDRs”) representing such securities. In order to improve portfolio liquidity and give the Fund additional flexibility to comply with the requirements of the U.S. Internal Revenue Code and other regulatory requirements and to manage future corporate actions and index changes in smaller markets, the iShares MSCI Emerging Markets Index Fund may invest the remainder of its assets in securities that are not included in its Underlying Index or in ADRs and GDRs representing such securities. The iShares MSCI Emerging Markets Index Fund may invest up to 10% of its assets in other iShares Funds that seek to track the performance of equity securities of constituent countries of the MSCI Emerging Markets Index.

Each Fund also may invest its other assets in futures contracts, options on futures contracts, other types of options, and swaps related to its Underlying Index, as well as cash and cash equivalents, including shares of money market funds affiliated with BGFA.

Representative Sampling

“Representative Sampling” is investing in a representative sample of securities in the relevant Underlying Index, which have a similar investment profile as the relevant Underlying Index. Securities selected have aggregate investment characteristics (based on market capitalization and industry weightings), fundamental characteristics (such as return variability, earnings valuation and yield) and liquidity measures similar to those of the relevant Underlying Index. Funds that use Representative Sampling generally do not hold all of the securities that are included in the relevant Underlying Index.

Correlation

An index is a theoretical financial calculation, while a Fund is an actual investment portfolio. The performance of a Fund and its Underlying Index may vary somewhat due to transaction costs, foreign currency valuations, asset valuations, market impact, corporate actions (such as mergers and spin-offs) and timing variances.

BGFA expects that, over time, the correlation between each Fund’s performance and that of its Underlying Index, before fees and expenses, will be 95% or better. A figure of 100% would indicate perfect correlation. Any correlation of less than 100% is called “tracking error.” A Fund using a Representative Sampling can be expected to have a greater tracking error than a Fund using Replication. Replication is a strategy in which a Fund invests in substantially all of the securities in its Underlying Index in approximately the same proportions as in the Underlying Index.

Industry Concentration Policy

The iShares MSCI Singapore Index and iShares MSCI South Korea Index Funds have the following concentration policy: With respect to the two most heavily weighted industries or groups of industries in its Underlying Index, the Fund will invest in securities (consistent with its investment objective and other investment policies) so that the weighting of each such industry or group of industries in the Fund does not diverge by more than 10% from the respective weighting of such industry or group of industries in its Underlying Index. An exception to this policy is that if investment in the stock of a single issuer would account for more than 25% of the Fund, the Fund will invest less than 25% of its net assets in such stock and will reallocate the excess to stock(s) in the same industry or group of industries, and/or to stock(s) in another industry or group of industries, in its Underlying Index. Each Fund will evaluate these industry weightings at least weekly, and at the time of evaluation will adjust its portfolio composition to the extent necessary to maintain compliance with the above policy.

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Each of the iShares MSCI Austria Index, iShares MSCI Australia Index, iShares MSCI Belgium Index, iShares MSCI Brazil Index, iShares MSCI Canada Index, iShares MSCI Emerging Markets Index, iShares MSCI EMU Index, iShares MSCI France Index, iShares MSCI Germany Index, iShares MSCI Hong Kong Index, iShares MSCI Italy Index, iShares MSCI Japan Index, iShares MSCI Malaysia Index, iShares MSCI Mexico Index Fund, iShares MSCI Netherlands Index, iShares MSCI Pacific ex-Japan Index, iShares MSCI South Africa Index, iShares MSCI Spain Index, iShares MSCI Sweden Index, iShares MSCI Switzerland Index, iShares MSCI Taiwan Index and iShares MSCI United Kingdom Index Funds will not concentrate its investments (i.e., hold 25% or more of its total assets in the stocks of a particular industry or group of industries), except that, to the extent practicable, the Fund will concentrate to approximately the same extent that its Underlying Index concentrates in the stocks of such particular industry or group of industries.

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Principal Risk Factors Common to All Funds

Each Fund is subject to the principal risks described below. Additional principal risks associated with a Fund are discussed under the description of that Fund in the Description of the iShares MSCI Index Funds section. Some or all of these risks may adversely affect a Fund’s NAV, trading price, yield, total return and/or its ability to meet its objectives.

Market Risk

Each Fund’s NAV will react to securities markets movements. You could lose money over short periods due to fluctuation in a Fund’s NAV in response to market movements, and over longer periods during market downturns.

Foreign Security Risk

Each Fund invests entirely within the equity markets of a single country or region. These markets are subject to special risks associated with foreign investment including, but not limited to: generally less liquid and less efficient securities markets; generally greater price volatility; exchange rate fluctuations and exchange controls; imposition of restrictions on the expatriation of funds or other assets; less publicly available information about issuers; the imposition of taxes; higher transaction and custody costs; settlement delays and risk of loss; difficulties in enforcing contracts; less liquidity and smaller market capitalizations; lesser regulation of securities markets; different accounting and disclosure standards; governmental interference; higher inflation; social, economic and political uncertainties; the risk of expropriation of assets; and the risk of war.

Asset Class Risk

The returns from the types of securities in which a Fund invests may underperform returns from the various general securities markets or different asset classes. Different types of securities tend to go through cycles of out-performance and underperformance in comparison to the general securities markets.

Passive Investments

The Funds are not actively managed. Each Fund may be affected by a general decline in the U.S. or foreign market segments relating to its Underlying Index. Each Fund invests in the securities included in, or representative of, its Underlying Index regardless of their investment merit. BGFA does not attempt to take defensive positions in declining markets.

Concentration

If the Underlying Index of a Fund concentrates in a particular industry, group of industries or sector, that Fund may be adversely affected by the performance of those securities and may be subject to price volatility. In addition, a Fund that concentrates in a single industry or group of industries may be more susceptible to any single economic, market, political or regulatory occurrence affecting that industry or group of industries.

Derivatives

A derivative is a financial contract the value of which depends on, or is derived from, the value of an underlying asset such as a security or an index. Each Fund may invest in stock index futures contracts and other derivatives. Compared to conventional securities, derivatives can be more sensitive to changes in interest rates or to sudden fluctuations in market prices and thus a Fund’s losses may be greater if it invests in derivatives than if it invests only in conventional securities.

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Tracking Error Risk

Imperfect correlation between a Fund’s securities and those in its Underlying Index, rounding of prices, changes to the Underlying Indices and regulatory policies may cause a Fund’s performance to not match the performance of its Underlying Index. This is called “tracking error”. Tracking error may also result because the Fund incurs fees and expenses while its Underlying Index does not incur such expenses.

Management Risk

Because each Fund does not fully replicate its Underlying Index and may hold securities not included in its Underlying Index, a Fund is subject to management risk. This is the risk that BGFA’s investment strategy, the implementation of which is subject to a number of constraints, may not produce the intended results.

Currency Risk

Because each Fund’s NAV is determined on the basis of U.S. dollars, you may lose money if you invest in a Fund if the local currency of a foreign market depreciates against the U.S. dollar, even if the local currency value of the Fund’s holdings goes up.

Emerging Market Risk

Some foreign markets in which the Funds invest are considered to be emerging markets. Investment in these emerging markets subjects a Fund to a greater risk of loss than investments in a developed market. This is due to, among other things, greater market volatility, lower trading volume, political and economic instability, greater risk of market shut down and more governmental limitations on foreign investment policy than those typically found in a developed market. The following Funds invest in emerging markets: the iShares MSCI Brazil Index, iShares MSCI Emerging Markets Index, iShares MSCI Malaysia Index, iShares MSCI Mexico Index, iShares MSCI South Africa Index, iShares MSCI South Korea Index and iShares MSCI Taiwan Index Funds.

Trading Risk

While the creation/redemption feature of the Funds is designed to make it likely that shares of the Funds will trade close to their NAV, disruptions to creations and redemptions (as has occurred, for example, because of Malaysia’s capital controls) may result in trading prices that differ significantly from NAV.

Non-Diversification Risk

Each Fund is classified as “non-diversified.” This means that each Fund may invest most of its assets in securities issued by or representing a small number of companies. As a result, each Fund may be more susceptible to the risks associated with these particular companies, or to a single economic, political or regulatory occurrence affecting these companies.

Market Trading Risks

Absence of Prior Active Market

Although the shares of the Funds described in this Prospectus are listed for trading on national securities exchanges and certain foreign exchanges, there can be no assurance that an active trading market for such shares will develop or be maintained.

Lack of Market Liquidity

Secondary market trading in Fund shares may be halted by a national securities exchange because of market conditions or for other reasons. In addition, trading in Fund shares is subject

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to trading halts caused by extraordinary market volatility pursuant to “circuit breaker” rules. There can be no assurance that the requirements necessary to maintain the listing of the shares of any Fund will continue to be met or will remain unchanged.

Shares of the Funds May Trade at Prices Other Than NAV

Shares of the Funds may trade at, above or below their NAV. The per share NAV of each Fund will fluctuate with changes in the market value of such Fund’s holdings. The trading prices of a Fund’s shares will fluctuate in accordance with changes in its NAV as well as market supply and demand. However, given that shares can be created and redeemed only in Creation Units at NAV (unlike shares of many closed-end funds, which frequently trade at appreciable discounts from, and sometimes at premiums to, their NAVs), BGFA believes that large discounts or premiums to the NAV of a Fund’s shares should not be sustained.

Lack of Governmental Insurance or Guarantee

An investment in a Fund is not a bank deposit and it is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

Portfolio Holdings Information

A description of the Funds’ policies and procedures with respect to the disclosure of the Funds’ portfolio securities is available in the Funds’ Statement of Additional Information (“SAI”).

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Description of the iShares MSCI Index Funds

iShares MSCI Index Funds

n iShares MSCI Australia Index Fund

n iShares MSCI Austria Index Fund

n iShares MSCI Belgium Index Fund

n iShares MSCI Brazil Index Fund

n iShares MSCI Canada Index Fund

n iShares MSCI Emerging Markets Index Fund

n iShares MSCI EMU Index Fund

n iShares MSCI France Index Fund

n iShares MSCI Germany Index Fund

n iShares MSCI Hong Kong Index Fund

n iShares MSCI Italy Index Fund

n iShares MSCI Japan Index Fund

n iShares MSCI Malaysia Index Fund

n iShares MSCI Mexico Index Fund

n iShares MSCI Netherlands Index Fund

n iShares MSCI Pacific ex-Japan Index Fund

n iShares MSCI Singapore Index Fund

n iShares MSCI South Africa Index Fund

n iShares MSCI South Korea Index Fund

n iShares MSCI Spain Index Fund

n iShares MSCI Sweden Index Fund

n iShares MSCI Switzerland Index Fund

n iShares MSCI Taiwan Index Fund

n iShares MSCI United Kingdom Index Fund

“MSCI Australia Index^SM”, “MSCI Austria Index^SM”, “MSCI Belgium Index^SM”, “MSCI Brazil Index^SM”, “MSCI Canada Index^SM”, “MSCI Emerging Markets Index^SM”, “MSCI EMU Index^SM”, “MSCI France Index^SM”, “MSCI Germany Index^SM”, “MSCI Hong Kong Index^SM”, “MSCI Italy Index^SM”, “MSCI Japan Index^SM”, “MSCI Malaysia Index^SM”, “MSCI Mexico Index^SM”, “MSCI Netherlands Index^SM”, “MSCI Pacific ex-Japan Index^SM”, “MSCI Singapore Index^SM”, “MSCI South Africa Index^SM”, “MSCI South Korea Index^SM”, “MSCI Spain Index^SM”, “MSCI Sweden Index^SM”, “MSCI Switzerland Index^SM”, “MSCI Taiwan Index^SM” and “MSCI United Kingdom Index^SM” are servicemarks of Morgan Stanley Capital International and have been licensed for use for certain purposes by BGI. The Funds are not sponsored, endorsed, sold or promoted by MSCI, and MSCI makes no representations regarding the advisability of investing in shares of the Trust.

Description of the iShares MSCI Index Funds

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iShares MSCI Australia Index Fund

CUSIP: 464286103

Trading Symbol: EWA

Underlying Index: MSCI Australia Index

Investment Objective

The iShares MSCI Australia Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Australian market, as measured by the MSCI Australia Index (the “Index”).

Principal Investment Strategy

The Index consists of stocks traded primarily on the Australian Stock Exchange. As of September 30, 2005, the Index’s three largest stocks were BHP Billiton Ltd., National Australia Bank Ltd. and Commonwealth Bank of Australia and its three largest industries were banks, materials and real estate. The Fund uses a Representative Sampling strategy to try to track the Index.

The Fund’s top portfolio holdings can be found at www.iShares.com. Fund fact sheets provide information regarding the Fund’s top holdings and may be requested by calling 1-800-iShares.

Principal Risks Specific to Fund

Because foreign exchanges may be open on days when the Fund does not price its shares, the value of the securities in the Fund’s portfolio may change on days when shareholders will not be able to purchase or sell the Fund’s shares.

The Australian economy is dependent on the economies of Asia, Europe and the United States as key trading partners and, in particular, on the price and demand for agricultural products and natural resources. Asia includes countries in all stages of economic development, although most Asian economies are characterized by over-extension of credit, currency devaluations and restrictions, rising unemployment, high inflation, decreased exports and economic recessions. Currency devaluations in any one country can have a significant effect on the entire Asian region. Recently, the economies in the Asian region have suffered significant downturns as well as significant volatility. Increased political and social unrest in any Asian country could cause further economic and market uncertainty in the region. Europe includes both developed and emerging economies. Most developed countries in Western Europe are members of the European Union, and many are also members of European Monetary Union (the “EMU”). The EMU requires compliance with restrictions on inflation rates, deficits, and debt levels, and the tight fiscal and monetary controls necessary to join the EMU may significantly affect every country in Europe. The United States is Australia’s single largest trade and investment partner and is susceptible to sustained increases in energy prices, weakness in the labor market, and rising long-term interest rates.

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Performance Information

The bar chart and table that follow show how the Fund has performed in the past on a calendar year basis and provide an indication of the risks of investing in the Fund. Both assume that all dividends and distributions have been reinvested in the Fund. How the Fund has performed in the past (before and after taxes) does not necessarily show how it will perform in the future. Supplemental information about the Fund’s performance is shown under the heading Total Return Information in the Supplemental Information section at the end of this Prospectus.

Year-By-Year Returns

The Fund’s total return for the nine months ended September 30, 2005 was 17.35%. The best calendar quarter return during the period shown above was 19.81% in the 4th quarter of 2004; the worst was -15.81% in the 3rd quarter of 2001.

Average Annual Total Returns

(for the periods ended December 31, 2004)

	1 Year	5 Years	Since Fund Inception1
Fund:
Return Before Taxes	30.86%	12.10%	9.23%
Return After Taxes on Distributions2	29.90%	11.17%	8.34%
Return After Taxes on Distributions and Sale of Fund Shares2	20.63%	10.01%	7.56%
Index (Index returns do not reflect deductions for fees, expenses, or taxes)	30.34%	12.20%	9.49%

1 Inception date: 3/12/1996.

2 After-tax returns in the table above are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Fund’s returns after taxes on distributions and sale of fund shares are calculated assuming that an investor has sufficient capital gains of the same character from other investments to offset any capital losses from the sale of fund shares. As a result, the Fund’s returns after taxes on distributions and sale of fund shares may exceed the Fund’s returns before taxes and/or returns after taxes on distributions.

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Fees and Expenses

Most investors will buy and sell shares of the Fund through brokers.

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.*

Shareholder Fees	None
(fees paid directly from your investment, but see the Creation Transaction Fees and Redemption Transaction Fees section below)
Annual Fund Operating Expenses
(expenses that are deducted from the Fund’s assets)**
Management Fees	0.59%
Distribution and Service (12b-1) Fees	None
Other Expenses***	None
Total Annual Fund Operating Expenses	0.59%

* You will incur customary brokerage commissions when buying or selling shares of the Fund.

** Expressed as a percentage of average net assets.

*** The Company’s Investment Advisory Agreement provides that BGFA will pay all operating expenses of the Company, except interest expense and taxes (both expected to be de minimis), any brokerage expenses, distribution fees or expenses, and extraordinary expenses.

Example

This Example is intended to help you compare the cost of investing in shares of the Fund with the cost of investing in other funds.

The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then sell all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on the assumptions, your costs would be:

1 Year	3 Years	5 Years	10 Years
$60	$189	$329	$738

Creation Transaction Fees and Redemption Transaction Fees

The Fund issues and redeems shares at NAV only in large blocks of 200,000 shares or multiples thereof. As a practical matter, only institutions or large investors purchase or redeem these Creation Units. A standard creation transaction fee of $2,400 is charged to each purchaser of Creation Units. The fee is a single charge and will be the same regardless of the number of Creation Units purchased by an investor on the same day. The approximate value of a Creation Unit as of September 30, 2005 was $3,924,000. An investor who holds Creation Units and wishes to redeem them at NAV would also pay a standard redemption transaction fee of $2,400 on the date of such redemption(s), regardless of the number of Creation Units redeemed that day.* Investors who hold Creation Units will also pay the annual fund operating expenses described in the table above. Assuming an investment in a Creation Unit of $3,924,000 and a 5% return each year, and assuming that the Fund’s operating expenses remain the same, the total costs would be $28,448 if the Creation Unit is redeemed after one year, $78,917 if the Creation Unit is redeemed after three years, $133,937 if the Creation Unit is redeemed after five years, and $294,173 if the Creation Unit is redeemed after ten years.

* See the Transaction Fees section at the end of this Prospectus. If a Creation Unit is purchased or redeemed outside the usual process through the National Securities Clearing Corporation or for cash, a variable fee will be charged of up to four times the standard creation or redemption transaction fee.

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iShares MSCI Austria Index Fund

CUSIP: 464286202

Trading Symbol: EWO

Underlying Index: MSCI Austria Index

Investment Objective

The iShares MSCI Austria Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Austrian market, as represented by the MSCI Austria Index (the “Index”).

Principal Investment Strategy

The Index consists of stocks traded primarily on the Vienna Stock Exchange. As of September 30, 2005, the Index’s three largest stocks were OMV AG, Erste Bank der Oester. Sprk. AG and Telekom Austria AG and its three largest industries were banks, energy and telecommunication services. The Fund uses a Representative Sampling strategy to try to track the Index.

The Fund’s top portfolio holdings can be found at www.iShares.com. Fund fact sheets provide information regarding the Fund’s top holdings and may be requested by calling 1-800-iShares.

Principal Risks Specific to Fund

Because foreign exchanges may be open on days when the Fund does not price its shares, the value of the securities in the Fund’s portfolio may change on days when shareholders will not be able to purchase or sell the Fund’s shares.

The Austrian economy may be significantly affected by the economies of other European countries. Europe includes both developed and emerging economies. Most developed countries in Western Europe are members of the European Union and many are also members of the European Monetary Union (the “EMU”). The EMU requires compliance with restrictions on inflation rates, deficits, and debt levels, and the tight fiscal and monetary controls necessary to join the EMU, each of which may significantly affect every country in Europe. Many Eastern European countries continue to move toward market economies. However, Eastern European markets remain relatively undeveloped and can be particularly sensitive to political and economic developments.

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page 11

Performance Information

The bar chart and table that follow show how the Fund has performed in the past on a calendar year basis and provide an indication of the risks of investing in the Fund. Both assume that all dividends and distributions have been reinvested in the Fund. How the Fund has performed in the past (before and after taxes) does not necessarily show how it will perform in the future. Supplemental information about the Fund’s performance is shown under the heading Total Return Information in the Supplemental Information section at the end of this Prospectus.

Year-By-Year Returns

The Fund’s total return for the nine months ended September 30, 2005 was 18.95%. The best calendar quarter return during the period shown above was 28.95% in the 4th quarter of 2004; the worst was -23.45% in the 3rd quarter of 1998.

Average Annual Total Returns

(for the periods ended December 31, 2004)

	1 Year*	5 Years	Since Fund Inception1
Fund:
Return Before Taxes	70.93%	22.58%	10.42%
Return After Taxes on Distributions2	70.85%	22.39%	10.12%
Return After Taxes on Distributions and Sale of Fund Shares2	46.25%	20.04%	9.10%
Index (Index returns do not reflect deductions for fees, expenses, or taxes)	71.52%	22.28%	11.41%

1 Inception date: 3/12/1996.

2 After-tax returns in the table above are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Fund’s returns after taxes on distributions and sale of fund shares are calculated assuming that an investor has sufficient capital gains of the same character from other investments to offset any capital losses from the sale of fund shares. As a result, the Fund’s returns after taxes on distributions and sale of fund shares may exceed the Fund’s returns before taxes and/or returns after taxes on distributions.

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

i  Shares

page 12

Fees and Expenses

Most investors will buy and sell shares of the Fund through brokers.

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.*

Shareholder Fees	None
(fees paid directly from your investment, but see the Creation Transaction Fees and Redemption Transaction Fees section below)
Annual Fund Operating Expenses
(expenses that are deducted from the Fund’s assets)**
Management Fees	0.59%
Distribution and Service (12b-1) Fees	None
Other Expenses***	None
Total Annual Fund Operating Expenses	0.59%

* You will incur customary brokerage commissions when buying or selling shares of the Fund.

** Expressed as a percentage of average net assets.

*** The Company’s Investment Advisory Agreement provides that BGFA will pay all operating expenses of the Company, except interest expense and taxes (both expected to be de minimis), any brokerage expenses, distribution fees or expenses, and extraordinary expenses.

Example

This Example is intended to help you compare the cost of investing in shares of the Fund with the cost of investing in other funds.

The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then sell all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on the assumptions, your costs would be:

1 Year	3 Years	5 Years	10 Years
$60	$189	$329	$738

Creation Transaction Fees and Redemption Transaction Fees

The Fund issues and redeems shares at NAV only in large blocks of 100,000 shares or multiples thereof. As a practical matter, only institutions or large investors purchase or redeem these Creation Units. A standard creation transaction fee of $600 is charged to each purchaser of Creation Units. The fee is a single charge and will be the same regardless of the number of Creation Units purchased by an investor on the same day. The approximate value of a Creation Unit as of September 30, 2005 was $2,712,000. An investor who holds Creation Units and wishes to redeem them at NAV would also pay a standard redemption transaction fee of $600 on the date of such redemption(s), regardless of the number of Creation Units redeemed that day.* Investors who hold Creation Units will also pay the annual fund operating expenses described in the table above. Assuming an investment in a Creation Unit of $2,712,000 and a 5% return each year, and assuming that the Fund’s operating expenses remain the same, the total costs would be $17,550 if the Creation Unit is redeemed after one year, $52,445 if the Creation Unit is redeemed after three years, $90,485 if the Creation Unit is redeemed after five years, and $201,273 if the Creation Unit is redeemed after ten years.

* See the Transaction Fees section at the end of this Prospectus. If a Creation Unit is purchased or redeemed outside the usual process through the National Securities Clearing Corporation or for cash, a variable fee will be charged of up to four times the standard creation or redemption transaction fee.

iShares MSCI Austria Index Fund

page 13

iShares MSCI Belgium Index Fund

CUSIP: 464286301

Trading Symbol: EWK

Underlying Index: MSCI Belgium Index

Investment Objective

The iShares MSCI Belgium Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Belgian market, as measured by the MSCI Belgium Index (the “Index”). The Fund’s investment objective may be changed without shareholder approval.

Principal Investment Strategy

The Index consists of stocks traded primarily on the Brussels Stock Exchange. As of September 30, 2005, the Index’s three largest stocks were Fortis, KBC Groep NV, and Electrabel SA and its three largest industries were diversified financials, banks and utilities. The Fund uses a Representative Sampling strategy to try to track the Index.

The Fund’s top portfolio holdings can be found at www.iShares.com. Fund fact sheets provide information regarding the Fund’s top holdings and may be requested by calling 1-800-iShares.

Principal Risks Specific to Fund

Because foreign exchanges may be open on days when the Fund does not price its shares, the value of the securities in the Fund’s portfolio may change on days when shareholders will not be able to purchase or sell the Fund’s shares.

The Belgian economy may be significantly affected by the economies of other European countries. Europe includes both developed and emerging economies. Most developed countries in Western Europe are members of the European Union and many are also members of the European Monetary Union (the “EMU”). The EMU requires compliance with restrictions on inflation rates, deficits, and debt levels, and the tight fiscal and monetary controls necessary to join the EMU, each of which may significantly affect every country in Europe. Many Eastern European countries continue to move toward market economies. However, Eastern European markets remain relatively undeveloped and can be particularly sensitive to political and economic developments.

i  Shares

page 14

Performance Information

The bar chart and table that follow show how the Fund has performed in the past on a calendar year basis and provide an indication of the risks of investing in the Fund. Both assume that all dividends and distributions have been reinvested in the Fund. How the Fund has performed in the past (before and after taxes) does not necessarily show how it will perform in the future. Supplemental information about the Fund’s performance is shown under the heading Total Return Information in the Supplemental Information section at the end of this Prospectus.

Year-By-Year Returns

The Fund’s total return for the nine months ended September 30, 2005 was 3.90%. The best calendar quarter return during the period shown above was 30.06% in the 2nd quarter of 2003; the worst was -25.68% in the 3rd quarter of 2002.

Average Annual Total Returns

(for the periods ended December 31, 2004)

	1 Year*	5 Years	Since Fund Inception1
Fund:
Return Before Taxes	43.92%	6.08%	8.99%
Return After Taxes on Distributions2	43.35%	5.28%	7.38%
Return After Taxes on Distributions and Sale of Fund Shares2	28.74%	4.81%	6.97%
Index (Index returns do not reflect deductions for fees, expenses, or taxes)	43.53%	3.48%	9.12%

1 Inception date: 3/12/1996.

2 After-tax returns in the table above are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Fund’s returns after taxes on distributions and sale of fund shares are calculated assuming that an investor has sufficient capital gains of the same character from other investments to offset any capital losses from the sale of fund shares. As a result, the Fund’s returns after taxes on distributions and sale of fund shares may exceed the Fund’s returns before taxes and/or returns after taxes on distributions.

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

iShares MSCI Belgium Index Fund

page 15

Fees and Expenses

Most investors will buy and sell shares of the Fund through brokers.

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.*

Shareholder Fees	None
(fees paid directly from your investment, but see the Creation Transaction Fees and Redemption Transaction Fees section below)
Annual Fund Operating Expenses
(expenses that are deducted from the Fund’s assets)**
Management Fees	0.59%
Distribution and Service (12b-1) Fees	None
Other Expenses***	None
Total Annual Fund Operating Expenses	0.59%

* You will incur customary brokerage commissions when buying or selling shares of the Fund.

** Expressed as a percentage of average net assets.

*** The Company’s Investment Advisory Agreement provides that BGFA will pay all operating expenses of the Company, except interest expense and taxes (both expected to be de minimis), any brokerage expenses, distribution fees or expenses, and extraordinary expenses.

Example

This Example is intended to help you compare the cost of investing in shares of the Fund with the cost of investing in other funds.

The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then sell all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on the assumptions, your costs would be:

1 Year	3 Years	5 Years	10 Years
$60	$189	$329	$738

Creation Transaction Fees and Redemption Transaction Fees

The Fund issues and redeems shares at NAV only in large blocks of 40,000 shares or multiples thereof. As a practical matter, only institutions or large investors purchase or redeem these Creation Units. A standard creation transaction fee of $700 is charged to each purchaser of Creation Units. The fee is a single charge and will be the same regardless of the number of Creation Units purchased by an investor on the same day. The approximate value of a Creation Unit as of September 30, 2005 was $768,000. An investor who holds Creation Units and wishes to redeem them at NAV would also pay a standard redemption transaction fee of $700 on the date of such redemption(s), regardless of the number of Creation Units redeemed that day.* Investors who hold Creation Units will also pay the annual fund operating expenses described in the table above. Assuming an investment in a Creation Unit of $768,000 and a 5% return each year, and assuming that the Fund’s operating expenses remain the same, the total costs would be $6,027 if the Creation Unit is redeemed after one year, $15,902 if the Creation Unit is redeemed after three years, $26,667 if the Creation Unit is redeemed after five years, and $58,019 if the Creation Unit is redeemed after ten years.

* See the Transaction Fees section at the end of this Prospectus. If a Creation Unit is purchased or redeemed outside the usual process through the National Securities Clearing Corporation or for cash, a variable fee will be charged of up to four times the standard creation or redemption transaction fee.

i  Shares

page 16

iShares MSCI Brazil Index Fund

CUSIP: 464286400

Trading Symbol: EWZ

Underlying Index: MSCI Brazil Index

Investment Objective

The iShares MSCI Brazil Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Brazilian market, as measured by the MSCI Brazil Index (the “Index”).

Principal Investment Strategy

The Index consists of stocks traded primarily on the Bolsa de Valores de São Paulo. As of September 30, 2005, the Index’s three largest stocks were Petroleo Brasilerio SA—Pref., Petroleo Brasilerio SA and Companhia Vale do Rio Doce Preferred Class A and its three largest industries were materials, energy and banks. The Fund uses a Representative Sampling strategy to try to track the Index.

The Fund’s top portfolio holdings can be found at www.iShares.com. Fund fact sheets provide information regarding the Fund’s top holdings and may be requested by calling 1-800-iShares.

Principal Risks Specific to Fund

Because foreign exchanges may be open on days when the Fund does not price its shares, the value of the securities in the Fund’s portfolio may change on days when shareholders will not be able to purchase or sell the Fund’s shares.

Shares of the Fund may trade in the secondary market on days when the Fund does not accept orders to purchase or redeem shares. On such days, shares may trade in the secondary market with more significant premiums or discounts than might otherwise be experienced on days when the Fund accepts purchase and redemption orders.

Brazil has, in recent history, experienced substantial economic instability resulting from, among other things, periods of very high inflation and significant devaluations of the Brazilian currency. Brazil also has suffered from chronic structural public sector deficits. Such challenges have contributed to a high degree of price volatility in both the Brazilian equity and foreign currency markets. In addition, the Brazilian economy may be significantly affected by the economies of other Latin American countries. High interest, inflation, and unemployment rates generally characterize the economies in Latin American countries. Currency devaluations in any one Latin American country can have a significant affect on the entire Latin American region. Because commodities such as oil and gas, minerals, and metals represent a significant percentage of the region’s exports, the economies of Latin American countries are particularly sensitive to fluctuations in commodity prices. As a result, the economies in many Latin American countries can experience significant volatility.

iShares MSCI Brazil Index Fund

page 17

Performance Information

The bar chart and table that follow show how the Fund has performed in the past on a calendar year basis and provide an indication of the risks of investing in the Fund. Both assume that all dividends and distributions have been reinvested in the Fund. How the Fund has performed in the past (before and after taxes) does not necessarily show how it will perform in the future. Supplemental information about the Fund’s performance is shown under the heading Total Return Information in the Supplemental Information section at the end of this Prospectus.

Year-By-Year Returns

The Fund’s total return for the nine months ended September 30, 2005 was 50.61%. The best calendar quarter return during the period shown above was 40.50% in the 4th quarter of 2002; the worst was -40.27% in the 3rd quarter of 2002.

Average Annual Total Returns

(for the periods ended December 31, 2004)

	1 Year	Since Fund Inception1
Fund:
Return Before Taxes	34.16%	4.93%
Return After Taxes on Distributions2	33.48%	4.19%
Return After Taxes on Distributions and Sale of Fund Shares2	22.50%	3.79%
Index (Index returns do not reflect deductions for fees, expenses, or taxes)	35.85%	7.41%

1 Inception date: 7/10/2000.

2 After-tax returns in the table above are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Fund’s returns after taxes on distributions and sale of fund shares are calculated assuming that an investor has sufficient capital gains of the same character from other investments to offset any capital losses from the sale of fund shares. As a result, the Fund’s returns after taxes on distributions and sale of fund shares may exceed the Fund’s returns before taxes and/or returns after taxes on distributions.

i  Shares

page 18

Fees and Expenses

Most investors will buy and sell shares of the Fund through brokers.

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.*

Shareholder Fees	None
(fees paid directly from your investment, but see the Creation Transaction Fees and Redemption Transaction Fees section below)
Annual Fund Operating Expenses
(expenses that are deducted from the Fund’s assets)**
Management Fees	0.74%
Distribution and Service (12b-1) Fees	None
Other Expenses***	None
Total Annual Fund Operating Expenses	0.74%

* You will incur customary brokerage commissions when buying or selling shares of the Fund.

** Expressed as a percentage of average net assets.

*** The Company’s Investment Advisory Agreement provides that BGFA will pay all operating expenses of the Company, except interest expense and taxes (both expected to be de minimis), any brokerage expenses, distribution fees or expenses, and extraordinary expenses.

Example

This Example is intended to help you compare the cost of investing in shares of the Fund with the cost of investing in other funds.

The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then sell all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on the assumptions, your costs would be:

1 Year	3 Years	5 Years	10 Years
$76	$237	$411	$918

Creation Transaction Fees and Redemption Transaction Fees

The Fund issues and redeems shares at NAV only in large blocks of 50,000 shares or multiples thereof. As a practical matter, only institutions or large investors purchase or redeem these Creation Units. A standard creation transaction fee of $2,400 is charged to each purchaser of Creation Units. The fee is a single charge and will be the same regardless of the number of Creation Units purchased by an investor on the same day. The approximate value of a Creation Unit as of September 30, 2005 was $1,666,500. An investor who holds Creation Units and wishes to redeem them at NAV would also pay a standard redemption transaction fee of $2,400 on the date of such redemption(s), regardless of the number of Creation Units redeemed that day.* Investors who hold Creation Units will also pay the annual fund operating expenses described in the table above. Assuming an investment in a Creation Unit of $1,666,500 and a 5% return each year, and assuming that the Fund’s operating expenses remain the same, the total costs would be $17,377 if the Creation Unit is redeemed after one year, $44,160 if the Creation Unit is redeemed after three years, $73,274 if the Creation Unit is redeemed after five years, and $157,630 if the Creation Unit is redeemed after ten years.

* See the Transaction Fees section at the end of this Prospectus. If a Creation Unit is purchased or redeemed outside the usual process through the National Securities Clearing Corporation or for cash, a variable fee will be charged of up to four times the standard creation or redemption transaction fee.

iShares MSCI Brazil Index Fund

page 19

iShares MSCI Canada Index Fund

CUSIP: 464286509

Trading Symbol: EWC

Underlying Index: MSCI Canada Index

Investment Objective

The iShares MSCI Canada Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Canadian market, as measured by the MSCI Canada Index (the “Index”).

Principal Investment Strategy

The Index consists of stocks traded primarily on the Toronto Stock Exchange. As of September 30, 2005, the Index’s three largest stocks were EnCana Corp, Royal Bank of Canada and Manulife Financial Corp. and its three largest industries were energy, banks and materials. The Fund uses a Representative Sampling strategy to try to track the Index.

The Fund’s top portfolio holdings can be found at www.iShares.com. Fund fact sheets provide information regarding the Fund’s top holdings and may be requested by calling 1-800-iShares.

Principal Risks Specific to Fund

Because foreign exchanges may be open on days when the Fund does not price its shares, the value of the securities in the Fund’s portfolio may change on days when shareholders will not be able to purchase or sell the Fund’s shares.

The Canadian economy may be significantly affected by the U.S. economy, given that the U.S. is Canada’s largest trading partner and foreign investor. Canada is a major producer in forest products, mines and metals, agricultural products, and energy-related products, such as oil, gas, and hydroelectricity. As a result, the Canadian economy is very dependent on the demand for, and supply and price of, natural resources, and the Canadian market is relatively concentrated in issuers involved in the production and distribution of natural resources. In addition, past periodic demands by the Province of Quebec for sovereignty have significantly affected equity valuations and foreign currency movements in the Canadian market.

i  Shares

page 20

Performance Information

The bar chart and table that follow show how the Fund has performed in the past on a calendar year basis and provide an indication of the risks of investing in the Fund. Both assume that all dividends and distributions have been reinvested in the Fund. How the Fund has performed in the past (before and after taxes) does not necessarily show how it will perform in the future. Supplemental information about the Fund’s performance is shown under the heading Total Return Information in the Supplemental Information section at the end of this Prospectus.

Year-By-Year Returns

The Fund’s total return for the nine months ended September 30, 2005 was 25.34%. The best calendar quarter return during the period shown above was 21.44% in the 4th quarter of 1999; the worst was -24.40% in the 3rd quarter of 1998.

Average Annual Total Returns

(for the periods ended December 31, 2004)

	1 Year	5 Years	Since Fund Inception1
Fund:
Return Before Taxes	22.45%	7.59%	11.68%
Return After Taxes on Distributions2	22.52%	6.29%	10.63%
Return After Taxes on Distributions and Sale of Fund Shares2	15.16%	6.11%	10.00%
Index (Index returns do not reflect deductions for fees, expenses, or taxes)	22.20%	6.99%	12.33%

1 Inception date: 3/12/1996.

2 After-tax returns in the table above are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Fund’s returns after taxes on distributions and sale of fund shares are calculated assuming that an investor has sufficient capital gains of the same character from other investments to offset any capital losses from the sale of fund shares. As a result, the Fund’s returns after taxes on distributions and sale of fund shares may exceed the Fund’s returns before taxes and/or returns after taxes on distributions.

iShares MSCI Canada Index Fund

page 21

Fees and Expenses

Most investors will buy and sell shares of the Fund through brokers.

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.*

Shareholder Fees	None
(fees paid directly from your investment, but see the Creation Transaction Fees and Redemption Transaction Fees section below)
Annual Fund Operating Expenses
(expenses that are deducted from the Fund’s assets)**
Management Fees	0.59%
Distribution and Service (12b-1) Fees	None
Other Expenses***	None
Total Annual Fund Operating Expenses	0.59%

* You will incur customary brokerage commissions when buying or selling shares of the Fund.

** Expressed as a percentage of average net assets.

*** The Company’s Investment Advisory Agreement provides that BGFA will pay all operating expenses of the Company, except interest expense and taxes (both expected to be de minimis), any brokerage expenses, distribution fees or expenses, and extraordinary expenses.

Example

This Example is intended to help you compare the cost of investing in shares of the Fund with the cost of investing in other funds.

The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then sell all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on the assumptions, your costs would be:

1 Year	3 Years	5 Years	10 Years
$60	$189	$329	$738

Creation Transaction Fees and Redemption Transaction Fees

The Fund issues and redeems shares at NAV only in large blocks of 100,000 shares or multiples thereof. As a practical matter, only institutions or large investors purchase or redeem these Creation Units. A standard creation transaction fee of $1,900 is charged to each purchaser of Creation Units. The fee is a single charge and will be the same regardless of the number of Creation Units purchased by an investor on the same day. The approximate value of a Creation Unit as of September 30, 2005 was $2,152,000. An investor who holds Creation Units and wishes to redeem them at NAV would also pay a standard redemption transaction fee of $1,900 on the date of such redemption(s), regardless of the number of Creation Units redeemed that day.* Investors who hold Creation Units will also pay the annual fund operating expenses described in the table above. Assuming an investment in a Creation Unit of $2,152,000 and a 5% return each year, and assuming that the Fund’s operating expenses remain the same, the total costs would be $16,765 if the Creation Unit is redeemed after one year, $44,436 if the Creation Unit is redeemed after three years, $74,602 if the Creation Unit is redeemed after five years, and $162,455 if the Creation Unit is redeemed after ten years.

* See the Transaction Fees section at the end of this Prospectus. If a Creation Unit is purchased or redeemed outside the usual process through the National Securities Clearing Corporation or for cash, a variable fee will be charged of up to four times the standard creation or redemption transaction fee.

i  Shares

page 22

iShares MSCI Emerging Markets Index Fund

Cusip: 464287234

Trading Symbol: EEM

Underlying Index: MSCI Emerging Markets Index

Investment Objective

The iShares MSCI Emerging Markets Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Emerging Markets Index (the “Index”). The Fund’s investment objective may be changed without shareholder approval.

Principal Investment Strategy

The MSCI Emerging Markets Index was developed by MSCI as an equity benchmark for international stock performance. The Index is designed to measure equity market performance in the global emerging markets. As of September 30, 2005, the Index consisted of the following 26 emerging market country indices: Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Jordan, Malaysia, Mexico, Morocco, Pakistan, Peru, Philippines, Poland, Russia, South Africa, South Korea, Taiwan, Thailand, Turkey and Venezuela. As of September 30, 2005, the Index’s three largest stocks were Samsung Electronics Co. Ltd., Taiwan Semiconductors Manufacturing Co. Ltd. and LUKOIL and its three largest industries were banks, energy and materials. The Fund uses a Representative Sampling strategy to try to track the Index.

In order to improve its portfolio liquidity and its ability to track the Index, the Fund may invest up to 10% of its assets in shares of other iShares Funds that that seek to track the performance of equity securities of constituent countries of the MSCI Emerging Markets Index. BGFA will not charge portfolio management fees on that portion of the Fund’s assets invested in shares of other iShares Funds.

The Fund’s top portfolio holdings can be found at www.iShares.com. Fund fact sheets provide information regarding the Fund’s top holdings and may be requested by calling 1-800-iShares.

Principal Risks Specific to Fund

Because foreign exchanges may be open on days when the Fund does not price its shares, the value of the securities in the Fund’s portfolio may change on days when shareholders will not be able to purchase or sell the Fund’s shares.

Emerging market countries include Argentina, Brazil, Chile, China, Colombia, the Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Jordan, Malaysia, Mexico, Morocco, Pakistan, Peru, Philippines, Poland, Russia, South Africa, South Korea, Taiwan, Thailand, Turkey and Venezuela. Countries with emerging markets may have relatively unstable governments, may present the risks of nationalization of businesses, restrictions on foreign ownership and prohibitions on the repatriation of assets, and may have less protection of property rights than more developed countries. The economies of countries with emerging markets may be based on only a few industries, may be highly vulnerable to changes in local or global trade conditions, and may suffer from extreme and volatile debt burdens or inflation rates. Local securities markets may trade a small number of securities and may be unable to respond effectively to increases in trading volume, potentially making prompt liquidation of holdings difficult or impossible at times.

iShares MSCI Emerging Markets Index Fund

page 23

Performance Information

The bar chart and table that follow show how the Fund has performed in the past on a calendar year basis and provide an indication of the risks of investing in the Fund. Both assume that all dividends and distributions have been reinvested in the Fund. How the Fund has performed in the past (before and after taxes) does not necessarily show how it will perform in the future. Supplemental information about the Fund’s performance is shown under the heading Total Return Information in the Supplemental Information section at the end of this Prospectus.

Year-By-Year Returns

The Fund’s total return for the nine months ended September 30, 2005 was 26.30%. The best calendar quarter return during the period shown above was 18.49% in the 4th quarter of 2004; the worst was -7.92% in the 2nd quarter of 2004.

Average Annual Total Returns

(for the periods ended December 31, 2004)

	1 Year	Since Fund Inception1
Fund:
Return Before Taxes	25.54%	49.78%
Return After Taxes on Distributions2	25.46%	49.68%
Return After Taxes on Distributions and Sale of Fund Shares2	17.05%	43.26%
Index (Index returns do not reflect deductions for fees, expenses, or taxes)	25.55%	47.63%

1 Inception date: 4/7/2003.

2 After-tax returns in the table above are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Fund’s returns after taxes on distributions and sale of fund shares are calculated assuming that an investor has sufficient capital gains of the same character from other investments to offset any capital losses from the sale of fund shares. As a result, the Fund’s returns after taxes on distributions and sale of fund shares may exceed the Fund’s returns before taxes and/or returns after taxes on distributions.

i  Shares

page 24

Fees and Expenses

Most investors will buy and sell shares of the Fund through brokers.

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.*

Shareholder Fees	None
(fees paid directly from your investment, but see the Creation Transaction Fees and Redemption Transaction Fees section below)
Annual Fund Operating Expenses
(expenses that are deducted from the Fund’s assets)**
Management Fees	0.75%
Distribution and Service (12b-1) Fees	None
Other Expenses***	None
Total Annual Fund Operating Expenses	0.75%

* You will incur customary brokerage commissions when buying or selling shares of the Fund.

** Expressed as a percentage of average net assets.

*** The Company’s Investment Advisory Agreement provides that BGFA will pay all operating expenses of the Company, except interest expense and taxes (both expected to be de minimis), any brokerage expenses, distribution fees or expenses, and extraordinary expenses.

Example

This Example is intended to help you compare the cost of investing in shares of the Fund with the cost of investing in other funds.

The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then sell all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on the assumptions, your costs would be:

1 Year	3 Years	5 Years	10 Years
$77	$240	$417	$930

Creation Transaction Fees and Redemption Transaction Fees

The Fund issues and redeems iShares at NAV only in large blocks of 150,000 shares or multiples thereof. As a practical matter, only institutions or large investors purchase or redeem these Creation Units. A standard creation transaction fee of $7,700 is charged to each purchaser of Creation Units. The fee is a single charge and will be the same regardless of the number of Creation Units purchased by an investor on the same day. The approximate value of a Creation Unit as of September 30, 2005 was $12,676,500. An investor who holds Creation Units and wishes to redeem them at NAV would also pay a standard redemption transaction fee of $7,700 on the date of such redemption(s), regardless of the number of Creation Units redeemed that day.* Investors who hold Creation Units will also pay the annual fund operating expenses described in the table above. Assuming an investment in a Creation Unit of $12,676,500 and a 5% return each year, and assuming that the Fund’s operating expenses remain the same, the total costs would be $112,435 if the Creation Unit is redeemed after one year, $319,053 if the Creation Unit is redeemed after three years, $543,606 if the Creation Unit is redeemed after five years, and $1,194,010 if the Creation Unit is redeemed after ten years.

* See the Transaction Fees section at the end of this Prospectus. If a Creation Unit is purchased or redeemed outside the usual process through the National Securities Clearing Corporation or for cash, a variable fee will be charged of up to four times the standard creation or redemption transaction fee.

iShares MSCI Emerging Markets Index Fund

page 25

iShares MSCI EMU Index Fund

CUSIP: 464286608

Trading Symbol: EZU

Underlying Index: MSCI EMU Index

Investment Objective

The iShares MSCI EMU Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the European Monetary Union (“EMU”) markets, as measured by the MSCI EMU Index (the “Index”).

Principal Investment Strategy

The Index consists of stocks from the following eleven countries: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Portugal and Spain. As of September 30, 2005, the Index’s three largest stocks were Total SA, Sanofi-Aventis and Banco Santander Central Hispano SA and its three largest industries were banks, energy and telecommunication services. The Fund uses a Representative Sampling strategy to try to track the Index.

The Fund’s top portfolio holdings can be found at www.iShares.com. Fund fact sheets provide information regarding the Fund’s top holdings and may be requested by calling 1-800-iShares.

Principal Risks Specific to Fund

Because foreign exchanges may be open on days when the Fund does not price its shares, the value of the securities in the Fund’s portfolio may change on days when shareholders will not be able to purchase or sell the Fund’s shares.

EMU countries include Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. The EMU was implemented on January 1, 1999, and it is anticipated that additional countries will join the system over time. Also, it is possible that those countries may withdraw from the EMU or that the EMU may be abandoned at some future time. If the EMU were to be abandoned, the Board of Directors would propose a change in the investment objective of the Fund or cause its liquidation.

The economies of EMU countries may be significantly affected by the economies of other European countries. Europe includes both developed and emerging economies. Most developed countries in Western Europe are members of the European Union and many are also members of the EMU. The EMU requires compliance with restrictions on inflation rates, deficits, and debt levels, and the tight fiscal and monetary controls necessary to join the EMU may significantly affect every country in Europe. Many Eastern European countries continue to move toward market economies. However, Eastern European markets remain relatively undeveloped and can be particularly sensitive to political and economic developments.

i  Shares

page 26

Performance Information

The bar chart and table that follow show how the Fund has performed in the past on a calendar year basis and provide an indication of the risks of investing in the Fund. Both assume that all dividends and distributions have been reinvested in the Fund. How the Fund has performed in the past (before and after taxes) does not necessarily show how it will perform in the future. Supplemental information about the Fund’s performance is shown under the heading Total Return Information in the Supplemental Information section at the end of this Prospectus.

Year-By-Year Returns

The Fund’s total return for the nine months ended September 30, 2005 was 6.41% The best calendar quarter return during the period shown above was 26.00% in the 2nd quarter of 2003; the worst was -28.17% in the 3rd quarter of 2002.

Average Annual Total Returns

(for the periods ended December 31, 2004)

	1 Year	Since Fund Inception1
Fund:
Return Before Taxes	21.07%	-1.28%
Return After Taxes on Distributions2	20.55%	-1.53%
Return After Taxes on Distributions and Sale of Fund Shares2	13.92%	-1.20%
Index (Index returns do not reflect deductions for fees, expenses, or taxes)	21.41%	-0.91%

1 Inception date: 7/25/2000.

2 After-tax returns in the table above are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Fund’s returns after taxes on distributions and sale of fund shares are calculated assuming that an investor has sufficient capital gains of the same character from other investments to offset any capital losses from the sale of fund shares. As a result, the Fund’s returns after taxes on distributions and sale of fund shares may exceed the Fund’s returns before taxes and/or returns after taxes on distributions.

iShares MSCI EMU Index Fund

page 27

Fees and Expenses

Most investors will buy and sell shares of the Fund through brokers.

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.*

Shareholder Fees	None
(fees paid directly from your investment, but see the Creation Transaction Fees and Redemption Transaction Fees section below)
Annual Fund Operating Expenses
(expenses that are deducted from the Fund’s assets)**
Management Fees	0.59%
Distribution and Service (12b-1) Fees	None
Other Expenses***	None
Total Annual Fund Operating Expenses	0.59%

* You will incur customary brokerage commissions when buying or selling shares of the Fund.

** Expressed as a percentage of average net assets.

*** The Company’s Investment Advisory Agreement provides that BGFA will pay all operating expenses of the Company, except interest expense and taxes (both expected to be de minimis), any brokerage expenses, distribution fees or expenses, and extraordinary expenses.

Example

This Example is intended to help you compare the cost of investing in shares of the Fund with the cost of investing in other funds.

The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then sell all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on the assumptions, your costs would be:

1 Year	3 Years	5 Years	10 Years
$60	$189	$329	$738

Creation Transaction Fees and Redemption Transaction Fees

The Fund issues and redeems shares at NAV only in large blocks of 50,000 shares or multiples thereof. As a practical matter, only institutions or large investors purchase or redeem these Creation Units. A standard creation transaction fee of $8,000 is charged to each purchaser of Creation Units. The fee is a single charge and will be the same regardless of the number of Creation Units purchased by an investor on the same day. The approximate value of a Creation Unit as of September 30, 2005 was $3,847,500. An investor who holds Creation Units and wishes to redeem them at NAV would also pay a standard redemption transaction fee of $8,000 on the date of such redemption(s), regardless of the number of Creation Units redeemed that day.* Investors who hold Creation Units will also pay the annual fund operating expenses described in the table above. Assuming an investment in a Creation Unit of $3,847,500 and a 5% return each year, and assuming that the Fund’s operating expenses remain the same, the total costs would be $39,153 if the Creation Unit is redeemed after one year, $88,566 if the Creation Unit is redeemed after three years, $142,433 if the Creation Unit is redeemed after five years, and $299,315 if the Creation Unit is redeemed after ten years.

* See the Transaction Fees section at the end of this Prospectus. If a Creation Unit is purchased or redeemed outside the usual process through the National Securities Clearing Corporation or for cash, a variable fee will be charged of up to four times the standard creation or redemption transaction fee.

i  Shares

page 28

iShares MSCI France Index Fund

CUSIP: 464286707

Trading Symbol: EWQ

Underlying Index: MSCI France Index

Investment Objective

The iShares MSCI France Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the French market, as measured by the MSCI France Index (the “Index”).

Principal Investment Strategy

The Index consists of stocks traded primarily on the Paris Stock Exchange. As of September 30, 2005, the Index’s three largest stocks were Total SA, Sanofi-Aventis and BNP Paribas SA and its three largest industries were energy, banks and pharmaceuticals and biotechnology. The Fund uses a Representative Sampling strategy to try to track the Index.

The Fund’s top portfolio holdings can be found at www.iShares.com. Fund fact sheets provide information regarding the Fund’s top holdings and may be requested by calling 1-800-iShares.

Principal Risks Specific to Fund

Because foreign exchanges may be open on days when the Fund does not price its shares, the value of the securities in the Fund’s portfolio may change on days when shareholders will not be able to purchase or sell the Fund’s shares.

The French economy may be significantly affected by the economies of other European countries. Europe includes both developed and emerging economies. Most developed countries in Western Europe are members of the European Union and many are also members of the European Monetary Union (the “EMU”). The EMU requires compliance with restrictions on inflation rates, deficits, and debt levels, and the tight fiscal and monetary controls necessary to join the EMU may significantly affect every country in Europe. Many Eastern European countries continue to move toward market economies. However, Eastern European markets remain relatively undeveloped and can be particularly sensitive to political and economic developments.

iShares MSCI France Index Fund

page 29

Performance Information

The bar chart and table that follow show how the Fund has performed in the past on a calendar year basis and provide an indication of the risks of investing in the Fund. Both assume that all dividends and distributions have been reinvested in the Fund. How the Fund has performed in the past (before and after taxes) does not necessarily show how it will perform in the future. Supplemental information about the Fund’s performance is shown under the heading Total Return Information in the Supplemental Information section at the end of this Prospectus.

Year-By-Year Returns

The Fund’s total return for the nine months ended September 30, 2005 was 8.91%. The best calendar quarter return during the period shown above was 26.03% in the 2nd quarter of 2003; the worst was -27.88% in the 3rd quarter of 2002.

Average Annual Total Returns

(for the periods ended December 31, 2004)

	1 Year	5 Years	Since Fund Inception1
Fund:
Return Before Taxes	18.46%	-0.92%	10.05%
Return After Taxes on Distributions2	18.19%	-1.27%	9.59%
Return After Taxes on Distributions and Sale of Fund Shares2	12.24%	-0.89%	8.73%
Index (Index returns do not reflect deductions for fees, expenses, or taxes)	18.48%	-0.53%	10.28%

1 Inception date: 3/12/1996.

2 After-tax returns in the table above are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Fund’s returns after taxes on distributions and sale of fund shares are calculated assuming that an investor has sufficient capital gains of the same character from other investments to offset any capital losses from the sale of fund shares. As a result, the Fund’s returns after taxes on distributions and sale of fund shares may exceed the Fund’s returns before taxes and/or returns after taxes on distributions.

i  Shares

page 30

Fees and Expenses

Most investors will buy and sell shares of the Fund through brokers.

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.*

Shareholder Fees	None
(fees paid directly from your investment, but see the Creation Transaction Fees and Redemption Transaction Fees section below)
Annual Fund Operating Expenses
(expenses that are deducted from the Fund’s assets)**
Management Fees	0.59%
Distribution and Service (12b-1) Fees	None
Other Expenses***	None
Total Annual Fund Operating Expenses	0.59%

* You will incur customary brokerage commissions when buying or selling shares of the Fund.

** Expressed as a percentage of average net assets.

*** The Company’s Investment Advisory Agreement provides that BGFA will pay all operating expenses of the Company, except interest expense and taxes (both expected to be de minimis), any brokerage expenses, distribution fees or expenses, and extraordinary expenses.

Example

This Example is intended to help you compare the cost of investing in shares of the Fund with the cost of investing in other funds.

The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then sell all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on the assumptions, your costs would be:

1 Year	3 Years	5 Years	10 Years
$60	$189	$329	$738

Creation Transaction Fees and Redemption Transaction Fees

The Fund issues and redeems shares at NAV only in large blocks of 200,000 shares or multiples thereof. As a practical matter, only institutions or large investors purchase or redeem these Creation Units. A standard creation transaction fee of $2,900 is charged to each purchaser of Creation Units. The fee is a single charge and will be the same regardless of the number of Creation Units purchased by an investor on the same day. The approximate value of a Creation Unit as of September 30, 2005 was $5,208,000. An investor who holds Creation Units and wishes to redeem them at NAV would also pay a standard redemption transaction fee of $2,900 on the date of such redemption(s), regardless of the number of Creation Units redeemed that day.* Investors who hold Creation Units will also pay the annual fund operating expenses described in the table above. Assuming an investment in a Creation Unit of $5,208,000 and a 5% return each year, and assuming that the Fund’s operating expenses remain the same, the total costs would be $37,187 if the Creation Unit is redeemed after one year, $104,175 if the Creation Unit is redeemed after three years, $177,202 if the Creation Unit is redeemed after five years, and $389,882 if the Creation Unit is redeemed after ten years.

* See the Transaction Fees section at the end of this Prospectus. If a Creation Unit is purchased or redeemed outside the usual process through the National Securities Clearing Corporation or for cash, a variable fee will be charged of up to four times the standard creation or redemption transaction fee.

iShares MSCI France Index Fund

page 31

iShares MSCI Germany Index Fund

CUSIP: 464286806

Trading Symbol: EWG

Underlying Index: MSCI Germany Index

Investment Objective

The iShares MSCI Germany Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the German market, as measured by the MSCI Germany Index (the “Index”).

Principal Investment Strategy

The Index consists of stocks traded primarily on the Frankfurt Stock Exchange. As of September 30, 2005, the Index’s three largest stocks were Siemens AG Registered, E.ON AG and Allianz AG Registered and its three largest industries were utilities, automobiles and components and materials. The Fund uses a Representative Sampling strategy to try to track the Index.

The Fund’s top portfolio holdings can be found at www.iShares.com. Fund fact sheets provide information regarding the Fund’s top holdings and may be requested by calling 1-800-iShares.

Principal Risks Specific to Fund

Because foreign exchanges may be open on days when the Fund does not price its shares, the value of the securities in the Fund’s portfolio may change on days when shareholders will not be able to purchase or sell the Fund’s shares.

The German economy may be significantly affected by the economies of other European countries. Europe includes both developed and emerging economies. Most developed countries in Western Europe are members of the European Union and many are also members of the European Monetary Union (the “EMU”). The EMU requires compliance with restrictions on inflation rates, deficits, and debt levels, and the tight fiscal and monetary controls necessary to join the EMU may significantly affect every country in Europe. Many Eastern European countries continue to move toward market economies. However, Eastern European markets remain relatively undeveloped and can be particularly sensitive to political and economic developments. Germany continues with is efforts to integrate the area that was formerly known as East Germany, battling the costs of building infrastructure and higher unemployment rates.

i  Shares

page 32

Performance Information

The bar chart and table that follow show how the Fund has performed in the past on a calendar year basis and provide an indication of the risks of investing in the Fund. Both assume that all dividends and distributions have been reinvested in the Fund. How the Fund has performed in the past (before and after taxes) does not necessarily show how it will perform in the future. Supplemental information about the Fund’s performance is shown under the heading Total Return Information in the Supplemental Information section at the end of this Prospectus.

Year-By-Year Returns

The Fund’s total return for the nine months ended September 30, 2005 was 5.30%. The best calendar quarter return during the period shown above was 38.44% in the 2nd quarter of 2003; the worst was -36.46% in the 3rd quarter of 2002.

Average Annual Total Returns

(for the periods ended December 31, 2004)

	1 Year	5 Years	Since Fund Inception1
Fund:
Return Before Taxes	15.82%	-3.61%	6.45%
Return After Taxes on Distributions2	15.54%	-4.41%	5.83%
Return After Taxes on Distributions and Sale of Fund Shares2	10.42%	-3.38%	5.37%
Index (Index returns do not reflect deductions for fees, expenses, or taxes)	16.17%	-3.36%	6.93%

1 Inception date: 3/12/1996.

2 After-tax returns in the table above are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Fund’s returns after taxes on distributions and sale of fund shares are calculated assuming that an investor has sufficient capital gains of the same character from other investments to offset any capital losses from the sale of fund shares. As a result, the Fund’s returns after taxes on distributions and sale of fund shares may exceed the Fund’s returns before taxes and/or returns after taxes on distributions.

iShares MSCI Germany Index Fund

page 33

Fees and Expenses

Most investors will buy and sell shares of the Fund through brokers.

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.*

Shareholder Fees	None
(fees paid directly from your investment, but see the Creation Transaction Fees and Redemption Transaction Fees section below)
Annual Fund Operating Expenses
(expenses that are deducted from the Fund’s assets)**
Management Fees	0.59%
Distribution and Service (12b-1) Fees	None
Other Expenses***	None
Total Annual Fund Operating Expenses	0.59%

* You will incur customary brokerage commissions when buying or selling shares of the Fund.

** Expressed as a percentage of average net assets.

*** The Company’s Investment Advisory Agreement provides that BGFA will pay all operating expenses of the Company, except interest expense and taxes (both expected to be de minimis), any brokerage expenses, distribution fees or expenses, and extraordinary expenses.

Example

This Example is intended to help you compare the cost of investing in shares of the Fund with the cost of investing in other funds.

The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then sell all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on the assumptions, your costs would be:

1 Year	3 Years	5 Years	10 Years
$60	$189	$329	$738

Creation Transaction Fees and Redemption Transaction Fees

The Fund issues and redeems shares at NAV only in large blocks of 300,000 shares or multiples thereof. As a practical matter, only institutions or large investors purchase or redeem these Creation Units. A standard creation transaction fee of $1,500 is charged to each purchaser of Creation Units. The fee is a single charge and will be the same regardless of the number of Creation Units purchased by an investor on the same day. The approximate value of a Creation Unit as of September 30, 2005 was $5,847,000. An investor who holds Creation Units and wishes to redeem them at NAV would also pay a standard redemption transaction fee of $1,500 on the date of such redemption(s), regardless of the number of Creation Units redeemed that day.* Investors who hold Creation Units will also pay the annual fund operating expenses described in the table above. Assuming an investment in a Creation Unit of $5,847,000 and a 5% return each year, and assuming that the Fund’s operating expenses remain the same, the total costs would be $38,249 if the Creation Unit is redeemed after one year, $113,479 if the Creation Unit is redeemed after three years, $195,490 if the Creation Unit is redeemed after five years, and $434,337 if the Creation Unit is redeemed after ten years.

* See the Transaction Fees section at the end of this Prospectus. If a Creation Unit is purchased or redeemed outside the usual process through the National Securities Clearing Corporation or for cash, a variable fee will be charged of up to four times the standard creation or redemption transaction fee.

i  Shares

page 34

iShares MSCI Hong Kong Index Fund

CUSIP: 464286871

Trading Symbol: EWH

Underlying Index: MSCI Hong Kong Index

Investment Objective

The iShares MSCI Hong Kong Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Hong Kong market, as measured by the MSCI Hong Kong Index (the “Index”).

Principal Investment Strategy

The Index consists of stocks traded primarily on the Stock Exchange of Hong Kong Limited (SEHK). As of September 30, 2005, the Index’s three largest stocks were Hutchison Whampoa Ltd., Cheung Kong (Holdings) Ltd. and Sun Hung Kai Properties Ltd. and its three largest industries were real estate, utilities and capital goods. The Fund uses a Representative Sampling strategy to try to track the Index.

The Fund’s top portfolio holdings can be found at www.iShares.com. Fund fact sheets provide information regarding the Fund’s top holdings and may be requested by calling 1-800-iShares.

Principal Risks Specific to Fund

Because foreign exchanges may be open on days when the Fund does not price its shares, the value of the securities in the Fund’s portfolio may change on days when shareholders will not be able to purchase or sell the Fund’s shares.

The Hong Kong economy is dependent on the U.S. economy and the economies of other Asian countries and can be significantly affected by currency fluctuations and increasing competition from Asia’s other emerging economies. The willingness and ability of the Chinese government to support the Hong Kong economy and market is uncertain, and changes in the Chinese government’s position could significantly affect Hong Kong’s economy. Asia includes countries in all stages of economic development, although most Asian economies are characterized by over-extension of credit, currency devaluations and restrictions, rising unemployment, high inflation, decreased exports, and economic recessions. Currency devaluations in any one country can have a significant effect on the entire Asian region. In the late 1990s, the economies in the Asian region suffered significant downturns and significant volatility increased. Heightened political and social unrest in any Asian country could cause further economic and market uncertainty in the region.

Hong Kong reverted to Chinese sovereignty on July 1, 1997 as a Special Administrative Region (SAR) of China under the principle of “one country, two systems.” There is uncertainty whether China will continue to respect the relative independence of Hong Kong and not exert a tighter grip in the country’s political, economic, and social concerns.

iShares MSCI Hong Kong Index Fund

page 35

Performance Information

The bar chart and table that follow show how the Fund has performed in the past on a calendar year basis and provide an indication of the risks of investing in the Fund. Both assume that all dividends and distributions have been reinvested in the Fund. How the Fund has performed in the past (before and after taxes) does not necessarily show how it will perform in the future. Supplemental information about the Fund’s performance is shown under the heading Total Return Information in the Supplemental Information section at the end of this Prospectus.

Year-By-Year Returns

The Fund’s total return for the nine months ended September 30, 2005 was 11.38%. The best calendar quarter return during the period shown above was 26.95% in the 4th quarter of 1998; the worst was -30.12% in the 4th quarter of 1997.

Average Annual Total Returns

(for the periods ended December 31, 2004)

	1 Year	5 Years	Since Fund Inception1
Fund:
Return Before Taxes	24.01%	-0.87%	2.16%
Return After Taxes on Distributions2	23.04%	-1.61%	1.21%
Return After Taxes on Distributions and Sale of Fund Shares2	15.60%	-1.21%	1.24%
Index (Index returns do not reflect deductions for fees, expenses, or taxes)	24.98%	-0.54%	4.23%

1 Inception date: 3/12/1996.

2 After-tax returns in the table above are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Fund’s returns after taxes on distributions and sale of fund shares are calculated assuming that an investor has sufficient capital gains of the same character from other investments to offset any capital losses from the sale of fund shares. As a result, the Fund’s returns after taxes on distributions and sale of fund shares may exceed the Fund’s returns before taxes and/or returns after taxes on distributions.

i  Shares

page 36

Fees and Expenses

Most investors will buy and sell shares of the Fund through brokers.

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.*

Shareholder Fees	None
(fees paid directly from your investment, but see the Creation Transaction Fees and Redemption Transaction Fees section below)
Annual Fund Operating Expenses
(expenses that are deducted from the Fund’s assets)**
Management Fees	0.59%
Distribution and Service (12b-1) Fees	None
Other Expenses***	None
Total Annual Fund Operating Expenses	0.59%

* You will incur customary brokerage commissions when buying or selling shares of the Fund.

** Expressed as a percentage of average net assets.

*** The Company’s Investment Advisory Agreement provides that BGFA will pay all operating expenses of the Company, except interest expense and taxes (both expected to be de minimis), any brokerage expenses, distribution fees or expenses, and extraordinary expenses.

Example

This Example is intended to help you compare the cost of investing in shares of the Fund with the cost of investing in other funds.

The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then sell all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on the assumptions, your costs would be:

1 Year	3 Years	5 Years	10 Years
$60	$189	$329	$738

Creation Transaction Fees and Redemption Transaction Fees

The Fund issues and redeems shares at NAV only in large blocks of 75,000 shares or multiples thereof. As a practical matter, only institutions or large investors purchase or redeem these Creation Units. A standard creation transaction fee of $2,000 is charged to each purchaser of Creation Units. The fee is a single charge and will be the same regardless of the number of Creation Units purchased by an investor on the same day. The approximate value of a Creation Unit as of September 30, 2005 was $1,005,750. An investor who holds Creation Units and wishes to redeem them at NAV would also pay a standard redemption transaction fee of $2,000 on the date of such redemption(s), regardless of the number of Creation Units redeemed that day.* Investors who hold Creation Units will also pay the annual fund operating expenses described in the table above. Assuming an investment in a Creation Unit of $1,005,750 and a 5% return each year, and assuming that the Fund’s operating expenses remain the same, the total costs would be $10,053 if the Creation Unit is redeemed after one year, $22,971 if the Creation Unit is redeemed after three years, $37,053 if the Creation Unit is redeemed after five years, and $78,066 if the Creation Unit is redeemed after ten years.

* See the Transaction Fees section at the end of this Prospectus. If a Creation Unit is purchased or redeemed outside the usual process through the National Securities Clearing Corporation or for cash, a variable fee will be charged of up to four times the standard creation or redemption transaction fee.

iShares MSCI Hong Kong Index Fund

page 37

iShares MSCI Italy Index Fund

CUSIP: 464286855

Trading Symbol: EWI

Underlying Index: MSCI Italy Index

Investment Objective

The iShares MSCI Italy Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Italian market, as measured by the MSCI Italy Index (the “Index”). The Fund’s investment objective may be changed without shareholder approval.

Principal Investment Strategy

The Index consists of stocks traded primarily on the Milan Stock Exchange. As of September 30, 2005, the Index’s three largest stocks were ENI SpA, Enel SpA and Telecom Italia SpA and its three largest industries were banks, energy and telecommunication services. The Fund uses a Representative Sampling strategy to try to track the Index.

The Fund’s top portfolio holdings can be found at www.iShares.com. Fund fact sheets provide information regarding the Fund’s top holdings and may be requested by calling 1-800-iShares.

Principal Risks Specific to Fund

Because foreign exchanges may be open on days when the Fund does not price its shares, the value of the securities in the Fund’s portfolio may change on days when shareholders will not be able to purchase or sell the Fund’s shares.

The Italian economy may be significantly affected by the economies of other European countries. Europe includes both developed and emerging economies. Most developed countries in Western Europe are members of the European Union and many are also members of the European Monetary Union (the “EMU”). The EMU requires compliance with restrictions on inflation rates, deficits, and debt levels, and the tight fiscal and monetary controls necessary to join the EMU, each of which may significantly affect every country in Europe. Many Eastern European countries continue to move toward market economies. However, Eastern European markets remain relatively undeveloped and can be particularly sensitive to political and economic developments.

i  Shares

page 38

Performance Information

The bar chart and table that follow show how the Fund has performed in the past on a calendar year basis and provide an indication of the risks of investing in the Fund. Both assume that all dividends and distributions have been reinvested in the Fund. How the Fund has performed in the past (before and after taxes) does not necessarily show how it will perform in the future. Supplemental information about the Fund’s performance is shown under the heading Total Return Information in the Supplemental Information section at the end of this Prospectus.

Year-By-Year Returns

The Fund’s total return for the nine months ended September 30, 2005 was 2.89%. The best calendar quarter return during the period shown above was 34.44% in the 1st quarter of 1998; the worst was -21.58% in the 3rd quarter of 2002.

Average Annual Total Returns

(for the periods ended December 31, 2004)

	1 Year	5 Years	Since Fund Inception1
Fund:
Return Before Taxes	32.17%	4.39%	12.72%
Return After Taxes on Distributions2	31.30%	3.66%	11.57%
Return After Taxes on Distributions and Sale of Fund Shares2	21.17%	3.49%	10.79%
Index (Index returns do not reflect deductions for fees, expenses, or taxes)	32.49%	4.24%	12.60%

1 Inception date: 3/12/1996.

2 After-tax returns in the table above are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Fund’s returns after taxes on distributions and sale of fund shares are calculated assuming that an investor has sufficient capital gains of the same character from other investments to offset any capital losses from the sale of fund shares. As a result, the Fund’s returns after taxes on distributions and sale of fund shares may exceed the Fund’s returns before taxes and/or returns after taxes on distributions.

iShares MSCI Italy Index Fund

page 39

Fees and Expenses

Most investors will buy and sell shares of the Fund through brokers.

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.*

Shareholder Fees	None
(fees paid directly from your investment, but see the Creation Transaction Fees and Redemption Transaction Fees section below)
Annual Fund Operating Expenses
(expenses that are deducted from the Fund’s assets)**
Management Fees	0.59%
Distribution and Service (12b-1) Fees	None
Other Expenses***	None
Total Annual Fund Operating Expenses	0.59%

* You will incur customary brokerage commissions when buying or selling shares of the Fund.

** Expressed as a percentage of average net assets.

*** The Company’s Investment Advisory Agreement provides that BGFA will pay all operating expenses of the Company, except interest expense and taxes (both expected to be de minimis), any brokerage expenses, distribution fees or expenses, and extraordinary expenses.

Example

This Example is intended to help you compare the cost of investing in shares of the Fund with the cost of investing in other funds.

The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then sell all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on the assumptions, your costs would be:

1 Year	3 Years	5 Years	10 Years
$60	$189	$329	$738

Creation Transaction Fees and Redemption Transaction Fees

The Fund issues and redeems shares at NAV only in large blocks of 150,000 shares or multiples thereof. As a practical matter, only institutions or large investors purchase or redeem these Creation Units. A standard creation transaction fee of $1,400 is charged to each purchaser of Creation Units. The fee is a single charge and will be the same regardless of the number of Creation Units purchased by an investor on the same day. The approximate value of a Creation Unit as of September 30, 2005 was $3,951,000. An investor who holds Creation Units and wishes to redeem them at NAV would also pay a standard redemption transaction fee of $1,400 on the date of such redemption(s), regardless of the number of Creation Units redeemed that day.* Investors who hold Creation Units will also pay the annual fund operating expenses described in the table above. Assuming an investment in a Creation Unit of $3,951,000 and a 5% return each year, and assuming that the Fund’s operating expenses remain the same, the total costs would be $26,616 if the Creation Unit is redeemed after one year, $77,447 if the Creation Unit is redeemed after three years, $132,859 if the Creation Unit is redeemed after five years, and $294,239 if the Creation Unit is redeemed after ten years.

* See the Transaction Fees section at the end of this Prospectus. If a Creation Unit is purchased or redeemed outside the usual process through the National Securities Clearing Corporation or for cash, a variable fee will be charged of up to four times the standard creation or redemption transaction fee.

i  Shares

page 40

iShares MSCI Japan Index Fund

CUSIP: 464286848

Trading Symbol: EWJ

Underlying Index: MSCI Japan Index

Investment Objective

The iShares MSCI Japan Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Japanese market, as measured by the MSCI Japan Index (the “Index”).

Principal Investment Strategy

The Index consists of stocks traded primarily on the Tokyo Stock Exchange. As of September 30, 2005, the Index’s three largest stocks were Toyota Motor Corp., Mitsubishi Tokyo Financial Group, Inc. and Mizuho Financial Group, Inc. and its three largest industries were banks, automobiles and components and capital goods. The Fund uses a Representative Sampling strategy to try to track the Index.

The Fund’s top portfolio holdings can be found at www.iShares.com. Fund fact sheets provide information regarding the Fund’s top holdings and may be requested by calling 1-800-iShares.

Principal Risks Specific to Fund

Because foreign exchanges may be open on days when the Fund does not price its shares, the value of the securities in the Fund’s portfolio may change on days when shareholders will not be able to purchase or sell the Fund’s shares.

The Japanese economy faces several concerns, including a financial system with large levels of nonperforming loans; over-leveraged corporate balance sheets; an aging workforce; a labor market undergoing fundamental structural changes, as traditional lifetime employment clashes with the need for increased labor mobility; extensive cross-ownership by major corporations; a changing corporate governance structure; and large government deficits. Japan’s economy is heavily dependent on international trade and has been adversely affected by trade tariffs and other protectionist measures.

iShares MSCI Japan Index Fund

page 41

Performance Information

The bar chart and table that follow show how the Fund has performed in the past on a calendar year basis and provide an indication of the risks of investing in the Fund. Both assume that all dividends and distributions have been reinvested in the Fund. How the Fund has performed in the past (before and after taxes) does not necessarily show how it will perform in the future. Supplemental information about the Fund’s performance is shown under the heading Total Return Information in the Supplemental Information section at the end of this Prospectus.

Year-By-Year Returns

The Fund’s total return for the nine months ended September 30, 2005 was 11.60%. The best calendar quarter return during the period shown above was 26.25% in the 4th quarter of 1998; the worst was -19.80% in the 4th quarter of 1997.

Average Annual Total Returns

(for the periods ended December 31, 2004)

	1 Year	5 Years	Since Fund Inception1
Fund:
Return Before Taxes	14.78%	-6.95%	-2.91%
Return After Taxes on Distributions2	14.75%	-7.04%	-2.97%
Return After Taxes on Distributions and Sale of Fund Shares2	9.73%	-5.75%	-2.40%
Index (Index returns do not reflect deductions for fees, expenses, or taxes)	15.86%	-6.48%	-2.17%

1 Inception date: 3/12/1996.

2 After-tax returns in the table above are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Fund’s returns after taxes on distributions and sale of fund shares are calculated assuming that an investor has sufficient capital gains of the same character from other investments to offset any capital losses from the sale of fund shares. As a result, the Fund’s returns after taxes on distributions and sale of fund shares may exceed the Fund’s returns before taxes and/or returns after taxes on distributions.

i  Shares

page 42

Fees and Expenses

Most investors will buy and sell shares of the Fund through brokers.

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.*

Shareholder Fees	None
(fees paid directly from your investment, but see the Creation Transaction Fees and Redemption Transaction Fees section below)
Annual Fund Operating Expenses
(expenses that are deducted from the Fund’s assets)**
Management Fees	0.59%
Distribution and Service (12b-1) Fees	None
Other Expenses***	None
Total Annual Fund Operating Expenses	0.59%

* You will incur customary brokerage commissions when buying or selling shares of the Fund.

** Expressed as a percentage of average net assets.

*** The Company’s Investment Advisory Agreement provides that BGFA will pay all operating expenses of the Company, except interest expense and taxes (both expected to be de minimis), any brokerage expenses, distribution fees or expenses, and extraordinary expenses.

Example

This Example is intended to help you compare the cost of investing in shares of the Fund with the cost of investing in other funds.

The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then sell all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on the assumptions, your costs would be:

1 Year	3 Years	5 Years	10 Years
$60	$189	$329	$738

Creation Transaction Fees and Redemption Transaction Fees

The Fund issues and redeems shares at NAV only in large blocks of 600,000 shares or multiples thereof. As a practical matter, only institutions or large investors purchase or redeem these Creation Units. A standard creation transaction fee of $5,000 is charged to each purchaser of Creation Units. The fee is a single charge and will be the same regardless of the number of Creation Units purchased by an investor on the same day. The approximate value of a Creation Unit as of September 30, 2005 was $7,272,000. An investor who holds Creation Units and wishes to redeem them at NAV would also pay a standard redemption transaction fee of $5,000 on the date of such redemption(s), regardless of the number of Creation Units redeemed that day.* Investors who hold Creation Units will also pay the annual fund operating expenses described in the table above. Assuming an investment in a Creation Unit of $7,272,000 and a 5% return each year, and assuming that the Fund’s operating expenses remain the same, the total costs would be $53,821 if the Creation Unit is redeemed after one year, $147,345 if the Creation Unit is redeemed after three years, $249,300 if the Creation Unit is redeemed after five years, and $546,229 if the Creation Unit is redeemed after ten years.

* See the Transaction Fees section at the end of this Prospectus. If a Creation Unit is purchased or redeemed outside the usual process through the National Securities Clearing Corporation or for cash, a variable fee will be charged of up to four times the standard creation or redemption transaction fee.

iShares MSCI Japan Index Fund

page 43

iShares MSCI Malaysia Index Fund

CUSIP: 464286830

Trading Symbol: EWM

Underlying Index: MSCI Malaysia Index

Investment Objective

The iShares MSCI Malaysia Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Malaysian market, as measured by the MSCI Malaysia Index (the “Index”).

Principal Investment Strategy

The Index consists of stocks traded primarily on the Kuala Lumpur Stock Exchange. As of September 30, 2005, the Index’s three largest stocks were Malayan Banking Bhd, Commerce Asset Holding Bhd and Telekom Malaysia Bhd and its three largest industries were banks, consumer services and food beverages and tobacco. The Fund uses a Representative Sampling strategy to try to track the Index.

The Fund’s top portfolio holdings can be found at www.iShares.com. Fund fact sheets provide information regarding the Fund’s top holdings and may be requested by calling 1-800-iShares.

Principal Risks Specific to Fund

Because foreign exchanges may be open on days when the Fund does not price its shares, the value of the securities in the Fund’s portfolio may change on days when shareholders will not be able to purchase or sell the Fund’s shares.

Shares of the Fund may trade in the secondary market on days when the Fund does not accept orders to purchase or redeem shares. On such days, shares may trade in the secondary market with more significant premiums or discounts than might otherwise be experienced on days when the Fund accepts purchase and redemption orders.

Malaysian currency volatility and general economic deterioration led to the imposition of stringent capital controls in September 1998, including a one-year prohibition on repatriation of capital and an indefinite prohibition on free transfers of securities. The capital controls were subsequently amended and reversed. At the time the capital controls were imposed, the Company suspended creations of the Fund’s shares and advised investors that it would, to the extent possible under the applicable Malaysian regulations, deliver Malaysian Ringgits in satisfaction of redemption requests received. The disruption of the creation/redemption mechanism for the Fund adversely affected the trading market for iShares of the Fund, resulting in their trading at prices that differed materially from their NAV on many days.

In May 2000, the Company commenced offers and redemptions of Creation Units of the Fund for U.S. dollars. There can be no assurance that the Company will be able to offer and redeem such Creation Units on an in-kind basis at any time in the future.

Effective May 2, 2001, the Finance Ministry of Malaysia abolished the exit levy of 10% that had previously applied to profits repatriated by foreign entities such as the Fund. There can be no assurance that this or some other levy will not be reinstated by Malaysian authorities in the future, to the possible detriment of the Fund and its shareholders.

The Malaysian capital controls have been changed in significant ways since they were first adopted and without prior 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. Since the capital controls were imposed, the iShares of the Fund have often traded at discounts or premiums to their NAV. Since the Company’s decision to permit offers and redemptions of Creation Units of the Fund’s iShares for U.S. dollars, iShares of the Fund have traded at prices that have generally been close to their NAV. However, there can be no assurance that this will continue to be the case.

The Malaysian economy may be significantly affected by the economies of other Southeast Asian countries. Many Southeast Asian economies are characterized by high inflation, undeveloped financial services sectors, and heavy reliance on international trade. In addition, currency devaluations or restrictions, political and social instability, and current economic conditions can result in significant downturns and volatility in the economies of Southeast Asian countries.

i  Shares

page 44

Performance Information

The bar chart and table that follow show how the Fund has performed in the past on a calendar year basis and provide an indication of the risks of investing in the Fund. Both assume that all dividends and distributions have been reinvested in the Fund. How the Fund has performed in the past (before and after taxes) does not necessarily show how it will perform in the future. Supplemental information about the Fund’s performance is shown under the heading Total Return Information in the Supplemental Information section at the end of this Prospectus.

Year-By-Year Returns

The Fund’s total return for the nine months ended September 30, 2005 was 4.11%. The best calendar quarter return during the period shown above was 122.01% in the 2nd quarter of 1999; the worst was -46.01% in the 2nd quarter of 1998.

Average Annual Total Returns

(for the periods ended December 31, 2004)

	1 Year	5 Years	Since Fund Inception1
Fund:
Return Before Taxes	14.38%	4.84%	-4.82%
Return After Taxes on Distributions2	14.08%	4.37%	-5.12%
Return After Taxes on Distributions and Sale of Fund Shares2	9.92%	3.92%	-4.11%
Index (Index returns do not reflect deductions for fees, expenses, or taxes)	15.17%	5.79%	-3.65%

1 Inception date: 3/12/1996.

2 After-tax returns in the table above are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Fund’s returns after taxes on distributions and sale of fund shares are calculated assuming that an investor has sufficient capital gains of the same character from other investments to offset any capital losses from the sale of fund shares. As a result, the Fund’s returns after taxes on distributions and sale of fund shares may exceed the Fund’s returns before taxes and/or returns after taxes on distributions.

iShares MSCI Malaysia Index Fund

page 45

Fees and Expenses

Most investors will buy and sell shares of the Fund through brokers.

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.*

Shareholder Fees	None
(fees paid directly from your investment, but see the Creation Transaction Fees and Redemption Transaction Fees section below)
Annual Fund Operating Expenses
(expenses that are deducted from the Fund’s assets)**
Management Fees	0.59%
Distribution and Service (12b-1) Fees	None
Other Expenses***	None
Total Annual Fund Operating Expenses	0.59%

* You will incur customary brokerage commissions when buying or selling shares of the Fund.

** Expressed as a percentage of average net assets.

*** The Company’s Investment Advisory Agreement provides that BGFA will pay all operating expenses of the Company, except interest expense and taxes (both expected to be de minimis), any brokerage expenses, distribution fees or expenses, and extraordinary expenses.

Example

This Example is intended to help you compare the cost of investing in shares of the Fund with the cost of investing in other funds.

The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then sell all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on the assumptions, your costs would be:

1 Year	3 Years	5 Years	10 Years
$60	$189	$329	$738

Creation Transaction Fees and Redemption Transaction Fees

The Fund issues and redeems shares at NAV only in large blocks of 75,000 shares or multiples thereof. As a practical matter, only institutions or large investors purchase or redeem these Creation Units. A standard creation transaction fee of $5,000 is charged to each purchaser of Creation Units. The fee is a single charge and will be the same regardless of the number of Creation Units purchased by an investor on the same day. The approximate value of a Creation Unit as of September 30, 2005 was $551,250. An investor who holds Creation Units and wishes to redeem them at NAV would also pay a standard redemption transaction fee of $5,000 on the date of such redemption(s), regardless of the number of Creation Units redeemed that day.* Investors who hold Creation Units will also pay the annual fund operating expenses described in the table above. Assuming an investment in a Creation Unit of $551,250 and a 5% return each year, and assuming that the Fund’s operating expenses remain the same, the total costs would be $13,294 if the Creation Unit is redeemed after one year, $20,324 if the Creation Unit is redeemed after three years, $27,988 if the Creation Unit is redeemed after five years, and $50,308 if the Creation Unit is redeemed after ten years.

* See the Transaction Fees section at the end of this Prospectus. If a Creation Unit is purchased or redeemed outside the usual process through the National Securities Clearing Corporation or for cash, a variable fee will be charged of up to four times the standard creation or redemption transaction fee.

i  Shares

page 46

iShares MSCI Mexico Index Fund

CUSIP: 464286822

Trading Symbol: EWW

Underlying Index: MSCI Mexico Index

Investment Objective

The iShares MSCI Mexico Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Mexican market, as measured by the MSCI Mexico Index (the “Index”). The Fund’s investment objective may be changed without shareholder approval.

Principal Investment Strategy

The Index consists of stocks traded primarily on the Mexican Stock Exchange. As of September 30, 2005, the Index’s three largest stocks were America Movil SA de CV Series L, Cemex SA de CV Series CPO and Telefonos de Mexico SA de CV Series L and its three largest industries were telecommunication services, materials and food and staples retailing. The Fund uses a Representative Sampling strategy to try to track the Index.

The Fund’s top portfolio holdings can be found at www.iShares.com. Fund fact sheets provide information regarding the Fund’s top holdings and may be requested by calling 1-800-iShares.

Principal Risks Specific to Fund

Because foreign exchanges may be open on days when the Fund does not price its shares, the value of the securities in the Fund’s portfolio may change on days when shareholders will not be able to purchase or sell the Fund’s shares.

The Mexican economy is heavily dependent on the health of the U.S. economy, because the U.S. is Mexico’s largest trading partner and purchases most of Mexico’s exports. Mexico has suffered from severe currency devaluations in the past, and has been destabilized by local insurrections in certain regions, particularly the State of Chiapas. In addition, the Mexican economy may be significantly affected by the economies of other Latin American countries. High interest, inflation, and unemployment rates generally characterize the economies in Latin American countries. Currency devaluations in any one Latin American country can have a significant effect on the entire Latin American region, including Mexico. Because commodities such as oil and gas, minerals, and metals represent a significant percentage of the region’s exports, the economies of Latin American countries are particularly sensitive to fluctuations in commodity prices. As a result, the economies in many Latin American countries can experience significant volatility.

iShares MSCI Mexico Index Fund

page 47

Performance Information

The bar chart and table that follow show how the Fund has performed in the past on a calendar year basis and provide an indication of the risks of investing in the Fund. Both assume that all dividends and distributions have been reinvested in the Fund. How the Fund has performed in the past (before and after taxes) does not necessarily show how it will perform in the future. Supplemental information about the Fund’s performance is shown under the heading Total Return Information in the Supplemental Information section at the end of this Prospectus.

Year-By-Year Returns

The Fund’s total return for the nine months ended September 30, 2005 was 31.53%. The best calendar quarter return during the period shown above was 35.92% in the 4th quarter of 1999; the worst was -24.30% in the 3rd quarter of 1998.

Average Annual Total Returns

(for the periods ended December 31, 2004)

	1 Year*	5 Years	Since Fund Inception1
Fund:
Return Before Taxes	48.29%	8.99%	13.37%
Return After Taxes on Distributions2	48.04%	8.34%	12.72%
Return After Taxes on Distributions and Sale of Fund Shares2	31.71%	7.41%	11.56%
Index (Index returns do not reflect deductions for fees, expenses, or taxes)	48.32%	9.88%	15.20%

1 Inception date: 3/12/1996.

2 After-tax returns in the table above are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Fund’s returns after taxes on distributions and sale of fund shares are calculated assuming that an investor has sufficient capital gains of the same character from other investments to offset any capital losses from the sale of fund shares. As a result, the Fund’s returns after taxes on distributions and sale of fund shares may exceed the Fund’s returns before taxes and/or returns after taxes on distributions.

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

i  Shares

page 48

Fees and Expenses

Most investors will buy and sell shares of the Fund through brokers.

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.*

Shareholder Fees	None
(fees paid directly from your investment, but see the Creation Transaction Fees and Redemption Transaction Fees section below)
Annual Fund Operating Expenses
(expenses that are deducted from the Fund’s assets)**
Management Fees	0.59%
Distribution and Service (12b-1) Fees	None
Other Expenses***	None
Total Annual Fund Operating Expenses	0.59%

* You will incur customary brokerage commissions when buying or selling shares of the Fund.

** Expressed as a percentage of average net assets.

*** The Company’s Investment Advisory Agreement provides that BGFA will pay all operating expenses of the Company, except interest expense and taxes (both expected to be de minimis), any brokerage expenses, distribution fees or expenses, and extraordinary expenses.

Example

This Example is intended to help you compare the cost of investing in shares of the Fund with the cost of investing in other funds.

The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then sell all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on the assumptions, your costs would be:

1 Year	3 Years	5 Years	10 Years
$60	$189	$329	$738

Creation Transaction Fees and Redemption Transaction Fees

The Fund issues and redeems shares at NAV only in large blocks of 100,000 shares or multiples thereof. As a practical matter, only institutions or large investors purchase or redeem these Creation Units. A standard creation transaction fee of $1,400 is charged to each purchaser of Creation Units. The fee is a single charge and will be the same regardless of the number of Creation Units purchased by an investor on the same day. The approximate value of a Creation Unit as of September 30, 2005 was $3,275,000. An investor who holds Creation Units and wishes to redeem them at NAV would also pay a standard redemption transaction fee of $1,400 on the date of such redemption(s), regardless of the number of Creation Units redeemed that day.* Investors who hold Creation Units will also pay the annual fund operating expenses described in the table above. Assuming an investment in a Creation Unit of $3,275,000 and a 5% return each year, and assuming that the Fund’s operating expenses remain the same, the total costs would be $22,540 if the Creation Unit is redeemed after one year, $64,670 if the Creation Unit is redeemed after three years, $110,598 if the Creation Unit is redeemed after five years, and $244,357 if the Creation Unit is redeemed after ten years.

* See the Transaction Fees section at the end of this Prospectus. If a Creation Unit is purchased or redeemed outside the usual process through the National Securities Clearing Corporation or for cash, a variable fee will be charged of up to four times the standard creation or redemption transaction fee.

iShares MSCI Mexico Index Fund

page 49

iShares MSCI Netherlands Index Fund

CUSIP: 464286814

Trading Symbol: EWN

Underlying Index: MSCI Netherlands Index

Investment Objective

The iShares MSCI Netherlands Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Dutch market, as measured by the MSCI Netherlands Index (the “Index”).

Principal Investment Strategy

The Index consists of stocks traded primarily on the Amsterdam Stock Exchange. As of September 30, 2005, the Index’s three largest stocks were ING Groep NV, ABN AMRO Holding NV and Unilever NV CVA and its three largest industries were diversified financials, food beverages and tobacco and banks. The Fund uses a Representative Sampling strategy to try to track the Index.

The Fund’s top portfolio holdings can be found at www.iShares.com. Fund fact sheets provide information regarding the Fund’s top holdings and may be requested by calling 1-800-iShares.

Principal Risks Specific to Fund

Because foreign exchanges may be open on days when the Fund does not price its shares, the value of the securities in the Fund’s portfolio may change on days when shareholders will not be able to purchase or sell the Fund’s shares.

The Dutch economy may be significantly affected by the economies of other European countries. Europe includes both developed and emerging economies. Most developed countries in Western Europe are members of the European Union and many are also members of the European Monetary Union (the “EMU”). The EMU requires compliance with restrictions on inflation rates, deficits, and debt levels, and the tight fiscal and monetary controls necessary to join the EMU may significantly affect every country in Europe. Many Eastern European countries continue to move toward market economies. However, Eastern European markets remain relatively undeveloped and can be particularly sensitive to political and economic developments.

i  Shares

page 50

Performance Information

The bar chart and table that follow show how the Fund has performed in the past on a calendar year basis and provide an indication of the risks of investing in the Fund. Both assume that all dividends and distributions have been reinvested in the Fund. How the Fund has performed in the past (before and after taxes) does not necessarily show how it will perform in the future. Supplemental information about the Fund’s performance is shown under the heading Total Return Information in the Supplemental Information section at the end of this Prospectus.

Year-By-Year Returns

The Fund’s total return for the nine months ended September 30, 2005 was 5.23%. The best calendar quarter return during the period shown above was 22.23% in the 2nd quarter of 2003; the worst was -30.27% in the 3rd quarter of 2002.

Average Annual Total Returns

(for the periods ended December 31, 2004)

	1 Year	5 Years	Since Fund Inception1
Fund:
Return Before Taxes	13.49%	-4.48%	5.09%
Return After Taxes on Distributions2	13.22%	-4.75%	4.42%
Return After Taxes on Distributions and Sale of Fund Shares2	9.05%	-3.81%	4.27%
Index (Index returns do not reflect deductions for fees, expenses, or taxes)	12.24%	-3.21%	6.45%

1 Inception date: 3/12/1996.

2 After-tax returns in the table above are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Fund’s returns after taxes on distributions and sale of fund shares are calculated assuming that an investor has sufficient capital gains of the same character from other investments to offset any capital losses from the sale of fund shares. As a result, the Fund’s returns after taxes on distributions and sale of fund shares may exceed the Fund’s returns before taxes and/or returns after taxes on distributions.

iShares MSCI Netherlands Index Fund

page 51

Fees and Expenses

Most investors will buy and sell shares of the Fund through brokers.

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.*

Shareholder Fees	None
(fees paid directly from your investment, but see the Creation Transaction Fees and Redemption Transaction Fees section below)
Annual Fund Operating Expenses
(expenses that are deducted from the Fund’s assets)**
Management Fees	0.59%
Distribution and Service (12b-1) Fees	None
Other Expenses***	None
Total Annual Fund Operating Expenses	0.59%

* You will incur customary brokerage commissions when buying or selling shares of the Fund.

** Expressed as a percentage of average net assets.

*** The Company’s Investment Advisory Agreement provides that BGFA will pay all operating expenses of the Company, except interest expense and taxes (both expected to be de minimis), any brokerage expenses, distribution fees or expenses, and extraordinary expenses.

Example

This Example is intended to help you compare the cost of investing in shares of the Fund with the cost of investing in other funds.

The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then sell all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on the assumptions, your costs would be:

1 Year	3 Years	5 Years	10 Years
$60	$189	$329	$738

Creation Transaction Fees and Redemption Transaction Fees

The Fund issues and redeems shares at NAV only in large blocks of 50,000 shares or multiples thereof. As a practical matter, only institutions or large investors purchase or redeem these Creation Units. A standard creation transaction fee of $1,000 is charged to each purchaser of Creation Units. The fee is a single charge and will be the same regardless of the number of Creation Units purchased by an investor on the same day. The approximate value of a Creation Unit as of September 30, 2005 was $966,000. An investor who holds Creation Units and wishes to redeem them at NAV would also pay a standard redemption transaction fee of $1,000 on the date of such redemption(s), regardless of the number of Creation Units redeemed that day.* Investors who hold Creation Units will also pay the annual fund operating expenses described in the table above. Assuming an investment in a Creation Unit of $966,000 and a 5% return each year, and assuming that the Fund’s operating expenses remain the same, the total costs would be $7,819 if the Creation Unit is redeemed after one year, $20,238 if the Creation Unit is redeemed after three years, $33,777 if the Creation Unit is redeemed after five years, and $73,207 if the Creation Unit is redeemed after ten years.

* See the Transaction Fees section at the end of this Prospectus. If a Creation Unit is purchased or redeemed outside the usual process through the National Securities Clearing Corporation or for cash, a variable fee will be charged of up to four times the standard creation or redemption transaction fee.

i  Shares

page 52

iShares MSCI Pacific ex-Japan Index Fund

CUSIP: 464286665

Trading Symbol: EPP

Underlying Index: Pacific ex-Japan Index

Investment Objective

The iShares MSCI Pacific ex-Japan Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Australia, Hong Kong, New Zealand and Singapore markets, as measured by the MSCI Pacific ex-Japan Index (the “Index”).

Principal Investment Strategy

The Index consists of stocks from the following four countries: Australia, Hong Kong, New Zealand and Singapore. As of September 30, 2005, the Index’s three largest stocks were BHP Billiton Ltd., National Australia Bank Ltd. and Commonwealth Bank of Australia and its three largest industries were banks, materials and real estate. The Fund uses a Representative Sampling strategy to try to track the Index.

The Fund’s top portfolio holdings can be found at www.iShares.com. Fund fact sheets provide information regarding the Fund’s top holdings and may be requested by calling 1-800-iShares.

Principal Risks Specific to Fund

Because foreign exchanges may be open on days when the Fund does not price its shares, the value of the securities in the Fund’s portfolio may change on days when shareholders will not be able to purchase or sell the Fund’s shares.

The economies represented by the Index are in varying stages of economic development. The majority of the economies in the Pacific region can be characterized as either developing or newly industrialized. Many of the Pacific region economies are intertwined, and it is not uncommon for many of the countries to be in recessions at the same time. For example, Hong Kong’s economy has been adversely affected by the Asian economic crisis in the late 1990s, contributing to its recession during that period. As a small open economy, Singapore is particularly vulnerable to external economic influences, including, in the late 1990s, the Asian economic crisis. While Singapore has been a leading manufacturer of electronic goods, the extent to which other countries can successfully compete with Singapore in this and related industries, and adverse Asian economic influences generally, may adversely affect Singapore’s economy. In addition, many of the Pacific region economies can be exposed to high inflation rates, undeveloped financial services sectors, and heavy reliance on international trade. The region’s four economies are also dependent on the economies of Asia, Europe and the United States and, in particular, on the price and demand for agricultural products and natural resources. Currency devaluations or restrictions, political and social instability, and deteriorating economic conditions may result in significant downturns and increased volatility in the economies of countries of the Pacific region as it has in the past.

iShares MSCI Pacific ex-Japan Index Fund

page 53

Performance Information

The bar chart and table that follow show how the Fund has performed in the past on a calendar year basis and provide an indication of the risks of investing in the Fund. Both assume that all dividends and distributions have been reinvested in the Fund. How the Fund has performed in the past (before and after taxes) does not necessarily show how it will perform in the future. Supplemental information about the Fund’s performance is shown under the heading Total Return Information in the Supplemental Information section at the end of this Prospectus.

Year-By-Year Returns

The Fund’s total return for the nine months ended September 30, 2005 was 14.85%. The best calendar quarter return during the period shown above was 16.33% in the 4th quarter of 2004; the worst was -11.75% in the 3rd quarter of 2002.

Average Annual Total Returns

(for the periods ended December 31, 2004)

	1 Year	Since Fund Inception1
Fund:
Return Before Taxes	28.68%	23.06%
Return After Taxes on Distributions2	27.57%	22.25%
Return After Taxes on Distributions and Sale of Fund Shares2	19.00%	19.73%
Index (Index returns do not reflect deductions for fees, expenses, or taxes)	28.46%	23.01%

1 Inception date: 10/25/2001.

2 After-tax returns in the table above are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Fund’s returns after taxes on distributions and sale of fund shares are calculated assuming that an investor has sufficient capital gains of the same character from other investments to offset any capital losses from the sale of fund shares. As a result, the Fund’s returns after taxes on distributions and sale of fund shares may exceed the Fund’s returns before taxes and/or returns after taxes on distributions.

i  Shares

page 54

Fees and Expenses

Most investors will buy and sell shares of the Fund through brokers.

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.*

Shareholder Fees	None
(fees paid directly from your investment, but see the Creation Transaction Fees and Redemption Transaction Fees section below)
Annual Fund Operating Expenses
(expenses that are deducted from the Fund’s assets)**
Management Fees	0.50%
Distribution and Service (12b-1) Fees	None
Other Expenses***	None
Total Annual Fund Operating Expenses	0.50%

* You will incur customary brokerage commissions when buying or selling shares of the Fund.

** Expressed as a percentage of average net assets.

*** The Company’s Investment Advisory Agreement provides that BGFA will pay all operating expenses of the Company, except interest expense and taxes (both expected to be de minimis), any brokerage expenses, distribution fees or expenses, and extraordinary expenses.

Example

This Example is intended to help you compare the cost of investing in shares of the Fund with the cost of investing in other funds.

The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then sell all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on the assumptions, your costs would be:

1 Year	3 Years	5 Years	10 Years
$51	$160	$280	$628

Creation Transaction Fees and Redemption Transaction Fees

The Fund issues and redeems shares at NAV only in large blocks of 100,000 shares or multiples thereof. As a practical matter, only institutions or large investors purchase or redeem these Creation Units. A standard creation transaction fee of $6,000 is charged to each purchaser of Creation Units. The fee is a single charge and will be the same regardless of the number of Creation Units purchased by an investor on the same day. The approximate value of a Creation Unit as of September 30, 2005 was $10,302,000. An investor who holds Creation Units and wishes to redeem them at NAV would also pay a standard redemption transaction fee of $6,000 on the date of such redemption(s), regardless of the number of Creation Units redeemed that day.* Investors who hold Creation Units will also pay the annual fund operating expenses described in the table above. Assuming an investment in a Creation Unit of $10,302,000 and a 5% return each year, and assuming that the Fund’s operating expenses remain the same, the total costs would be $64,638 if the Creation Unit is redeemed after one year, $177,128 if the Creation Unit is redeemed after three years, $299,969 if the Creation Unit is redeemed after five years, and $658,830 if the Creation Unit is redeemed after ten years.

* See the Transaction Fees section at the end of this Prospectus. If a Creation Unit is purchased or redeemed outside the usual process through the National Securities Clearing Corporation or for cash, a variable fee will be charged of up to four times the standard creation or redemption transaction fee.

iShares MSCI Pacific ex-Japan Index Fund

page 55

iShares MSCI Singapore Index Fund

CUSIP: 464286673

Trading Symbol: EWS

Underlying Index: MSCI Singapore Index

Investment Objective

The iShares MSCI Singapore Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Singaporean markets, as measured by the MSCI Singapore Index (the “Index”).

Principal Investment Strategy

The Index consists of stocks traded primarily on the Singapore Stock Exchange. As of September 30, 2005, the Index’s three largest stocks were DBS Group Holdings Ltd., Singapore Telecommunications Ltd. and United Overseas Bank Ltd. and its three largest industries were banks, capital goods and telecommunication services. The Fund uses a Representative Sampling strategy to try to track the Index.

The Fund’s top portfolio holdings can be found at www.iShares.com. Fund fact sheets provide information regarding the Fund’s top holdings and may be requested by calling 1-800-iShares.

Principal Risks Specific to Fund

Because foreign exchanges may be open on days when the Fund does not price its shares, the value of the securities in the Fund’s portfolio may change on days when shareholders will not be able to purchase or sell the Fund’s shares.

As a small open economy, Singapore is particularly vulnerable to external economic influences, including, in the late 1990s, the Asian economic crisis. Although Singapore has been a leading manufacturer of electronics goods, the extent to which other countries can successfully compete with Singapore in this and related industries, and adverse Asian economic influences generally, may adversely affect Singapore’s economy.

i  Shares

page 56

Performance Information

The bar chart and table that follow show how the Fund has performed in the past on a calendar year basis and provide an indication of the risks of investing in the Fund. Both assume that all dividends and distributions have been reinvested in the Fund. How the Fund has performed in the past (before and after taxes) does not necessarily show how it will perform in the future. Supplemental information about the Fund’s performance is shown under the heading Total Return Information in the Supplemental Information section at the end of this Prospectus.

Year-By-Year Returns

The Fund’s total return for the nine months ended September 30, 2005 was 10.72%. The best calendar quarter return during the period shown above was 55.99% in the 4th quarter of 1998; the worst was -36.28% in the 2nd quarter of 1998.

Average Annual Total Returns

(for the periods ended December 31, 2004)

	1 Year	5 Years	Since Fund Inception1
Fund:
Return Before Taxes	22.62%	-2.82%	-4.05%
Return After Taxes on Distributions2	21.48%	-3.45%	-4.60%
Return After Taxes on Distributions and Sale of Fund Shares2	15.17%	-2.68%	-3.64%
Index (Index returns do not reflect deductions for fees, expenses, or taxes)	22.27%	-3.72%	-3.53%

1 Inception date: 3/12/1996.

2 After-tax returns in the table above are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Fund’s returns after taxes on distributions and sale of fund shares are calculated assuming that an investor has sufficient capital gains of the same character from other investments to offset any capital losses from the sale of fund shares. As a result, the Fund’s returns after taxes on distributions and sale of fund shares may exceed the Fund’s returns before taxes and/or returns after taxes on distributions.

iShares MSCI Singapore Index Fund

page 57

Fees and Expenses

Most investors will buy and sell shares of the Fund through brokers.

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.*

Shareholder Fees	None
(fees paid directly from your investment, but see the Creation Transaction Fees and Redemption Transaction Fees section below)
Annual Fund Operating Expenses
(expenses that are deducted from the Fund’s assets)**
Management Fees	0.59%
Distribution and Service (12b-1) Fees	None
Other Expenses***	None
Total Annual Fund Operating Expenses	0.59%

* You will incur customary brokerage commissions when buying or selling shares of the Fund.

** Expressed as a percentage of average net assets.

*** The Company’s Investment Advisory Agreement provides that BGFA will pay all operating expenses of the Trust, except interest expense and taxes (both expected to be de minimis), any brokerage expenses, future distribution fees or expenses, and extraordinary expenses.

Example

This Example is intended to help you compare the cost of investing in shares of the Fund with the cost of investing in other funds.

The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then sell all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on the assumptions, your costs would be:

1 Year	3 Years	5 Years	10 Years
$60	$189	$329	$738

Creation Transaction Fees and Redemption Transaction Fees

The Fund issues and redeems shares at NAV only in large blocks of 100,000 shares or multiples thereof. As a practical matter, only institutions or large investors purchase or redeem these Creation Units. A standard creation transaction fee of $2,000 is charged to each purchaser of Creation Units. The fee is a single charge and will be the same regardless of the number of Creation Units purchased by an investor on the same day. The approximate value of a Creation Unit as of September 30, 2005 was $785,000. An investor who holds Creation Units and wishes to redeem them at NAV would also pay a standard redemption transaction fee of $2,000 on the date of such redemption(s), regardless of the number of Creation Units redeemed that day.* Investors who hold Creation Units will also pay the annual fund operating expenses described in the table above. Assuming an investment in a Creation Unit of $785,000 and a 5% return each year, and assuming that the Fund’s operating expenses remain the same, the total costs would be $8,722 if the Creation Unit is redeemed after one year, $18,799 if the Creation Unit is redeemed after three years, $29,784 if the Creation Unit is redeemed after five years, and $61,777 if the Creation Unit is redeemed after ten years.

* See the Transaction Fees section at the end of this Prospectus. If a Creation Unit is purchased or redeemed outside the usual process through the National Securities Clearing Corporation or for cash, a variable fee will be charged of up to four times the standard creation or redemption transaction fee.

i  Shares

page 58

iShares MSCI South Africa Index Fund

CUSIP: 464286780

Trading Symbol: EZA

Underlying Index: MSCI South Africa Index

Investment Objective

The iShares MSCI South Africa Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the South African market, as measured by the MSCI South Africa Index (the “Index”). The Fund’s investment objective may be changed without shareholder approval.

Principal Investment Strategy

The Index consists of stocks traded primarily on the Johannesburg Stock Exchange. As of September 30, 2005, the Index’s three largest stocks were Sasol Ltd., Standard Bank Group Ltd. and MTN Group Ltd. and its three largest industries were materials, banks and energy. The Fund uses a Representative Sampling strategy to try to track the Index.

The Fund’s top portfolio holdings can be found at www.iShares.com. Fund fact sheets provide information regarding the Fund’s top holdings and may be requested by calling 1-800-iShares.

Principal Risks Specific to Fund

Because foreign exchanges may be open on days when the Fund does not price its shares, the value of the securities in the Fund’s portfolio may change on days when shareholders will not be able to purchase or sell the Fund’s shares.

In recent times, various domestic and geopolitical factors have affected South Africa’s economic performance. While South Africa is a developing country with a strong supply of natural resources, unemployment and income disparity continue to cause economic concerns. Although economic reforms have been enacted to promote growth and foreign investments, there can be no assurance that these programs will achieve the desired results. In addition, South Africa’s currency reserves have presented local problems in the past, leaving its currency vulnerable at times to devaluation. There is also the risk that ethnic and civil conflict could result in the abandonment of many of South Africa’s free market reforms.

iShares MSCI South Africa Index Fund

page 59

Performance Information

The bar chart and table that follow show how the Fund has performed in the past on a calendar year basis and provide an indication of the risks of investing in the Fund. Both assume that all dividends and distributions have been reinvested in the Fund. How the Fund has performed in the past (before and after taxes) does not necessarily show how it will perform in the future. Supplemental information about the Fund’s performance is shown under the heading Total Return Information in the Supplemental Information section at the end of this Prospectus.

Year-By-Year Returns

The Fund’s total return for the nine months ended September 30, 2005 was 16.20%. The best calendar quarter return during the period shown above was 23.86% in the 4th quarter of 2004; the worst was -5.78% in the 2nd quarter of 2004.

Average Annual Total Returns

(for the periods ended December 31, 2004)

	1 Year*	Since Fund Inception1
Fund:
Return Before Taxes	43.64%	48.38%
Return After Taxes on Distributions2	43.33%	47.92%
Return After Taxes on Distributions and Sale of Fund Shares2	28.82%	42.01%
Index (Index returns do not reflect deductions for fees, expenses, or taxes)	44.91%	50.27%

1 Inception date: 2/3/2003.

2 After-tax returns in the table above are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Fund’s returns after taxes on distributions and sale of fund shares are calculated assuming that an investor has sufficient capital gains of the same character from other investments to offset any capital losses from the sale of fund shares. As a result, the Fund’s returns after taxes on distributions and sale of fund shares may exceed the Fund’s returns before taxes and/or returns after taxes on distributions.

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

i  Shares

page 60

Fees and Expenses

Most investors will buy and sell shares of the Fund through brokers.

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.*

Shareholder Fees	None
(fees paid directly from your investment, but see the Creation Transaction Fees and Redemption Transaction Fees section below)
Annual Fund Operating Expenses
(expenses that are deducted from the Fund’s assets)**
Management Fees	0.74%
Distribution and Service (12b-1) Fees	None
Other Expenses***	None
Total Annual Fund Operating Expenses	0.74%

* You will incur customary brokerage commissions when buying or selling shares of the Fund.

** Expressed as a percentage of average net assets.

*** The Company’s Investment Advisory Agreement provides that BGFA will pay all operating expenses of the Company, except interest expense and taxes (both expected to be de minimis), any brokerage expenses, distribution fees or expenses, and extraordinary expenses.

Example

This Example is intended to help you compare the cost of investing in shares of the Fund with the cost of investing in other funds.

The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then sell all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on the assumptions, your costs would be:

1 Year	3 Years	5 Years	10 Years
$76	$237	$411	$918

Creation Transaction Fees and Redemption Transaction Fees

The Fund issues and redeems shares at NAV only in large blocks of 50,000 shares or multiples thereof. As a practical matter, only institutions or large investors purchase or redeem these Creation Units. A standard creation transaction fee of $1,200 is charged to each purchaser of Creation Units. The fee is a single charge and will be the same regardless of the number of Creation Units purchased by an investor on the same day. The approximate value of a Creation Unit as of September 30, 2005 was $4,590,000. An investor who holds Creation Units and wishes to redeem them at NAV would also pay a standard redemption transaction fee of $1,200 on the date of such redemption(s), regardless of the number of Creation Units redeemed that day.* Investors who hold Creation Units will also pay the annual fund operating expenses described in the table above. Assuming an investment in a Creation Unit of $4,590,000 and a 5% return each year, and assuming that the Fund’s operating expenses remain the same, the total costs would be $37,080 if the Creation Unit is redeemed after one year, $110,936 if the Creation Unit is redeemed after three years, $191,219 if the Creation Unit is redeemed after five years, and $423,832 if the Creation Unit is redeemed after ten years.

* See the Transaction Fees section at the end of this Prospectus. If a Creation Unit is purchased or redeemed outside the usual process through the National Securities Clearing Corporation or for cash, a variable fee will be charged of up to four times the standard creation or redemption transaction fee.

iShares MSCI South Africa Index Fund

page 61

iShares MSCI South Korea Index Fund

CUSIP: 464286772

Trading Symbol: EWY

Underlying Index: MSCI Korea Index

Investment Objective

The iShares MSCI South Korea Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the South Korean market, as measured by the MSCI Korea Index (the “Index”).

Principal Investment Strategy

The Index consists of stocks traded primarily on the South Korean Stock Exchange. As of September 30, 2005, the Index’s three largest stocks were Samsung Electronics Co. Ltd. Pref., Kookmin Bank and POSCO and its three largest industries were semiconductors and semiconductor equipment, banks, and automobiles and components. The Fund uses a Representative Sampling strategy to try to track the Index.

The Fund’s top portfolio holdings can be found at www.iShares.com. Fund fact sheets provide information regarding the Fund’s top holdings and may be requested by calling 1-800-iShares.

Principal Risks Specific to Fund

Because foreign exchanges may be open on days when the Fund does not price its shares, the value of the securities in the Fund’s portfolio may change on days when shareholders will not be able to purchase or sell the Fund’s shares.

Shares of the Fund may trade in the secondary market on days when the Fund does not accept orders to purchase or redeem shares. On such days, shares may trade in the secondary market with more significant premiums or discounts than might otherwise be experienced on days when the Fund accepts purchase and redemption orders.

North and South Korea each have substantial military capabilities, and historical local tensions between the two present the risk of war. Any outbreak of hostilities between the two countries could have a severe adverse effect on the South Korean economy and securities markets. In addition, the South Korean economy may be significantly affected by the U.S. economy and the economies of China and Southeast Asian countries. Many Asian economies are characterized by high inflation, undeveloped financial services sectors, and heavy reliance on international trade. In addition, currency devaluations or restrictions, political and social instability, and current economic conditions can result in significant volatility in a number of Asian economies.

i  Shares

page 62

Performance Information

The bar chart and table that follow show how the Fund has performed in the past on a calendar year basis and provide an indication of the risks of investing in the Fund. Both assume that all dividends and distributions have been reinvested in the Fund. How the Fund has performed in the past (before and after taxes) does not necessarily show how it will perform in the future. Supplemental information about the Fund’s performance is shown under the heading Total Return Information in the Supplemental Information section at the end of this Prospectus.

Year-By-Year Returns

The Fund’s total return for the nine months ended September 30, 2005 was 34.15%. The best calendar quarter return during the period shown above was 58.55% in the 4th quarter of 2001; the worst was -21.37% in the 3rd quarter of 2001.

Average Annual Total Returns

(for the periods ended December 31, 2004)

	1 Year	Since Fund Inception1
Fund:
Return Before Taxes	18.22%	8.38%
Return After Taxes on Distributions2	18.25%	8.37%
Return After Taxes on Distributions and Sale of Fund Shares2	12.02%	7.31%
Index (Index returns do not reflect deductions for fees, expenses, or taxes)	22.06%	8.78%

1 Inception date: 5/9/2000.

2 After-tax returns in the table above are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Fund’s returns after taxes on distributions and sale of fund shares are calculated assuming that an investor has sufficient capital gains of the same character from other investments to offset any capital losses from the sale of fund shares. As a result, the Fund’s returns after taxes on distributions and sale of fund shares may exceed the Fund’s returns before taxes and/or returns after taxes on distributions.

iShares MSCI South Korea Index Fund

page 63

Fees and Expenses

Most investors will buy and sell shares of the Fund through brokers.

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.*

Shareholder Fees	None
(fees paid directly from your investment, but see the Creation Transaction Fees and Redemption Transaction Fees section below)
Annual Fund Operating Expenses
(expenses that are deducted from the Fund’s assets)**
Management Fees	0.74%
Distribution and Service (12b-1) Fees	None
Other Expenses***	None
Total Annual Fund Operating Expenses	0.74%

* You will incur customary brokerage commissions when buying or selling shares of the Fund.

** Expressed as a percentage of average net assets.

*** The Company’s Investment Advisory Agreement provides that BGFA will pay all operating expenses of the Company, except interest expense and taxes (both expected to be de minimis), any brokerage expenses, distribution fees or expenses, and extraordinary expenses.

Example

This Example is intended to help you compare the cost of investing in shares of the Fund with the cost of investing in other funds.

The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then sell all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on the assumptions, your costs would be:

1 Year	3 Years	5 Years	10 Years
$76	$237	$411	$918

Creation Transaction Fees and Redemption Transaction Fees

The Fund issues and redeems shares at NAV only in large blocks of 50,000 shares or multiples thereof. As a practical matter, only institutions or large investors purchase or redeem these Creation Units. A standard creation transaction fee of $4,000 is charged to each purchaser of Creation Units. The fee is a single charge and will be the same regardless of the number of Creation Units purchased by an investor on the same day. The approximate value of a Creation Unit as of September 30, 2005 was $1,944,500. An investor who holds Creation Units and wishes to redeem them at NAV would also pay a standard redemption transaction fee of $4,000 on the date of such redemption(s), regardless of the number of Creation Units redeemed that day.* Investors who hold Creation Units will also pay the annual fund operating expenses described in the table above. Assuming an investment in a Creation Unit of $1,944,500 and a 5% return each year, and assuming that the Fund’s operating expenses remain the same, the total costs would be $22,666 if the Creation Unit is redeemed after one year, $53,898 if the Creation Unit is redeemed after three years, $87,847 if the Creation Unit is redeemed after five years, and $186,214 if the Creation Unit is redeemed after ten years.

* See the Transaction Fees section at the end of this Prospectus. If a Creation Unit is purchased or redeemed outside the usual process through the National Securities Clearing Corporation or for cash, a variable fee will be charged of up to four times the standard creation or redemption transaction fee.

i  Shares

page 64

iShares MSCI Spain Index Fund

CUSIP: 464286764

Trading Symbol: EWP

Underlying Index: MSCI Spain Index

Investment Objective

The iShares MSCI Spain Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Spanish market, as measured by the MSCI Spain Index (the “Index”).

Principal Investment Strategy

The Index consists of stocks traded primarily on the Madrid Stock Exchange. As of September 30, 2005, the Index’s three largest stocks were Banco Santander Central Hispano SA, Telefonica SA, and BBVA SA and its three largest industries were banks, telecommunication services and utilities. The Fund uses a Representative Sampling strategy to try to track the Index.

The Fund’s top portfolio holdings can be found at www.iShares.com. Fund fact sheets provide information regarding the Fund’s top holdings and may be requested by calling 1-800-iShares.

Principal Risks Specific to Fund

Because foreign exchanges may be open on days when the Fund does not price its shares, the value of the securities in the Fund’s portfolio may change on days when shareholders will not be able to purchase or sell the Fund’s shares.

The Spanish economy may be significantly affected by the economies of other European countries. Europe includes both developed and emerging economies. Most developed countries in Western Europe are members of the European Union and many are also members of the European Monetary Union (the “EMU”). The EMU requires compliance with restrictions on inflation rates, deficits, and debt levels, and the tight fiscal and monetary controls necessary to join the EMU, each of which may significantly affect every country in Europe. Many Eastern European countries continue to move toward market economies. However, Eastern European markets remain relatively undeveloped and can be particularly sensitive to political and economic developments. Continuing challenges for Spain include Basque Fatherland and Liberty (a.k.a. Euzkadi Ta Askatasuna) terrorism and further reductions in unemployment.

iShares MSCI Spain Index Fund

page 65

Performance Information

The bar chart and table that follow show how the Fund has performed in the past on a calendar year basis and provide an indication of the risks of investing in the Fund. Both assume that all dividends and distributions have been reinvested in the Fund. How the Fund has performed in the past (before and after taxes) does not necessarily show how it will perform in the future. Supplemental information about the Fund’s performance is shown under the heading Total Return Information in the Supplemental Information section at the end of this Prospectus.

Year-By-Year Returns

The Fund’s total return for the nine months ended September 30, 2005 was 7.16%. The best calendar quarter return during the period shown above was 38.58% in the 1st quarter of 1998; the worst was -21.78% in the 3rd quarter of 2002.

Average Annual Total Returns

(for the periods ended December 31, 2004)

	1 Year	5 Years	Since Fund Inception1
Fund:
Return Before Taxes	29.45%	6.32%	14.84%
Return After Taxes on Distributions2	29.03%	6.03%	14.20%
Return After Taxes on Distributions and Sale of Fund Shares2	19.50%	5.36%	13.03%
Index (Index returns do not reflect deductions for fees, expenses, or taxes)	28.93%	5.14%	15.22%

1 Inception date: 3/12/1996.

2 After-tax returns in the table above are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Fund’s returns after taxes on distributions and sale of fund shares are calculated assuming that an investor has sufficient capital gains of the same character from other investments to offset any capital losses from the sale of fund shares. As a result, the Fund’s returns after taxes on distributions and sale of fund shares may exceed the Fund’s returns before taxes and/or returns after taxes on distributions.

i  Shares

page 66

Fees and Expenses

Most investors will buy and sell shares of the Fund through brokers.

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.*

Shareholder Fees	None
(fees paid directly from your investment, but see the Creation Transaction Fees and Redemption Transaction Fees section below)
Annual Fund Operating Expenses
(expenses that are deducted from the Fund’s assets)**
Management Fees	0.59%
Distribution and Service (12b-1) Fees	None
Other Expenses***	None
Total Annual Fund Operating Expenses	0.59%

* You will incur customary brokerage commissions when buying or selling shares of the Fund.

** Expressed as a percentage of average net assets.

*** The Company’s Investment Advisory Agreement provides that BGFA will pay all operating expenses of the Company, except interest expense and taxes (both expected to be de minimis), any brokerage expenses, distribution fees or expenses, and extraordinary expenses.

Example

This Example is intended to help you compare the cost of investing in shares of the Fund with the cost of investing in other funds.

The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then sell all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on the assumptions, your costs would be:

1 Year	3 Years	5 Years	10 Years
$60	$189	$329	$738

Creation Transaction Fees and Redemption Transaction Fees

The Fund issues and redeems shares at NAV only in large blocks of 75,000 shares or multiples thereof. As a practical matter, only institutions or large investors purchase or redeem these Creation Units. A standard creation transaction fee of $1,500 is charged to each purchaser of Creation Units. The fee is a single charge and will be the same regardless of the number of Creation Units purchased by an investor on the same day. The approximate value of a Creation Unit as of September 30, 2005 was $2,828,250. An investor who holds Creation Units and wishes to redeem them at NAV would also pay a standard redemption transaction fee of $1,500 on the date of such redemption(s), regardless of the number of Creation Units redeemed that day.* Investors who hold Creation Units will also pay the annual fund operating expenses described in the table above. Assuming an investment in a Creation Unit of $2,828,250 and a 5% return each year, and assuming that the Fund’s operating expenses remain the same, the total costs would be $20,046 if the Creation Unit is redeemed after one year, $56,425 if the Creation Unit is redeemed after three years, $96,084 if the Creation Unit is redeemed after five years, and $211,585 if the Creation Unit is redeemed after ten years.

* See the Transaction Fees section at the end of this Prospectus. If a Creation Unit is purchased or redeemed outside the usual process through the National Securities Clearing Corporation or for cash, a variable fee will be charged of up to four times the standard creation or redemption transaction fee.

iShares MSCI Spain Index Fund

page 67

iShares MSCI Sweden Index Fund

CUSIP: 464286756

Trading Symbol: EWD

Underlying Index: MSCI Sweden Index

Investment Objective

The iShares MSCI Sweden Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Swedish market, as measured by the MSCI Sweden Index (the “Index”). The Fund’s investment objective may be changed without shareholder approval.

Principal Investment Strategy

The Index consists of stocks traded primarily on the Stockholm Stock Exchange. As of September 30, 2005, the Index’s three largest stocks were Telefonaktiebolaget LM Ericsson Class B, Nordea AB and Hennes & Mauritz AB Class B and its three largest industries were capital goods, technology hardware and equipment and banks. The Fund uses a Representative Sampling strategy to try to track the Index.

The Fund’s top portfolio holdings can be found at www.iShares.com. Fund fact sheets provide information regarding the Fund’s top holdings and may be requested by calling 1-800-iShares.

Principal Risks Specific to Fund

Because foreign exchanges may be open on days when the Fund does not price its shares, the value of the securities in the Fund’s portfolio may change on days when shareholders will not be able to purchase or sell the Fund’s shares.

The Swedish economy is dependent on the export of natural resources and natural resource products. Sweden’s efforts to comply with the European Monetary Union (the “EMU”) restrictions have resulted in reduced government spending and higher unemployment. The Swedish economy may be significantly affected by the economies of other European countries. Europe includes both developed and emerging economies. Most developed countries in Western Europe are members of the European Union, and many are also members of the EMU. The EMU requires compliance with restrictions on inflation rates, deficits, and debt levels, and the tight fiscal and monetary controls necessary to join the EMU, each of which may significantly affect every country in Europe. Many Eastern European countries continue to move toward market economies. However, Eastern European markets remain relatively undeveloped and can be particularly sensitive to political and economic developments.

i  Shares

page 68

Performance Information

The bar chart and table that follow show how the Fund has performed in the past on a calendar year basis and provide an indication of the risks of investing in the Fund. Both assume that all dividends and distributions have been reinvested in the Fund. How the Fund has performed in the past (before and after taxes) does not necessarily show how it will perform in the future. Supplemental information about the Fund’s performance is shown under the heading Total Return Information in the Supplemental Information section at the end of this Prospectus.

Year-By-Year Returns

The Fund’s total return for the nine months ended September 30, 2005 was 7.70%. The best calendar quarter return during the period shown above was 36.63% in the 4th quarter of 1999; the worst was -29.67% in the 3rd quarter of 2002.

Average Annual Total Returns

(for the periods ended December 31, 2004)

	1 Year*	5 Years	Since Fund Inception1
Fund:
Return Before Taxes	35.71%	-1.89%	10.61%
Return After Taxes on Distributions2	35.54%	-2.82%	9.51%
Return After Taxes on Distributions and Sale of Fund Shares2	23.37%	-1.85%	9.03%
Index (Index returns do not reflect deductions for fees, expenses, or taxes)	36.28%	-2.22%	11.96%

1 Inception date: 3/12/1996.

2 After-tax returns in the table above are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Fund’s returns after taxes on distributions and sale of fund shares are calculated assuming that an investor has sufficient capital gains of the same character from other investments to offset any capital losses from the sale of fund shares. As a result, the Fund’s returns after taxes on distributions and sale of fund shares may exceed the Fund’s returns before taxes and/or returns after taxes on distributions.

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

iShares MSCI Sweden Index Fund

page 69

Fees and Expenses

Most investors will buy and sell shares of the Fund through brokers.

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.*

Shareholder Fees	None
(fees paid directly from your investment, but see the Creation Transaction Fees and Redemption Transaction Fees section below)
Annual Fund Operating Expenses
(expenses that are deducted from the Fund’s assets)**
Management Fees	0.59%
Distribution and Service (12b-1) Fees	None
Other Expenses***	None
Total Annual Fund Operating Expenses	0.59%

* You will incur customary brokerage commissions when buying or selling shares of the Fund.

** Expressed as a percentage of average net assets.

*** The Company’s Investment Advisory Agreement provides that BGFA will pay all operating expenses of the Company, except interest expense and taxes (both expected to be de minimis), any brokerage expenses, distribution fees or expenses, and extraordinary expenses.

Example

This Example is intended to help you compare the cost of investing in shares of the Fund with the cost of investing in other funds.

The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then sell all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on the assumptions, your costs would be:

1 Year	3 Years	5 Years	10 Years
$60	$189	$329	$738

Creation Transaction Fees and Redemption Transaction Fees

The Fund issues and redeems shares at NAV only in large blocks of 75,000 shares or multiples thereof. As a practical matter, only institutions or large investors purchase or redeem these Creation Units. A standard creation transaction fee of $1,300 is charged to each purchaser of Creation Units. The fee is a single charge and will be the same regardless of the number of Creation Units purchased by an investor on the same day. The approximate value of a Creation Unit as of September 30, 2005 was $1,688,250. An investor who holds Creation Units and wishes to redeem them at NAV would also pay a standard redemption transaction fee of $1,300 on the date of such redemption(s), regardless of the number of Creation Units redeemed that day.* Investors who hold Creation Units will also pay the annual fund operating expenses described in the table above. Assuming an investment in a Creation Unit of $1,688,250 and a 5% return each year, and assuming that the Fund’s operating expenses remain the same, the total costs would be $12,772 if the Creation Unit is redeemed after one year, $34,483 if the Creation Unit is redeemed after three years, $58,151 if the Creation Unit is redeemed after five years, and $127,079 if the Creation Unit is redeemed after ten years.

* See the Transaction Fees section at the end of this Prospectus. If a Creation Unit is purchased or redeemed outside the usual process through the National Securities Clearing Corporation or for cash, a variable fee will be charged of up to four times the standard creation or redemption transaction fee.

i  Shares

page 70

iShares MSCI Switzerland Index Fund

CUSIP: 464286749

Trading Symbol: EWL

Underlying Index: MSCI Switzerland Index

Investment Objective

The iShares MSCI Switzerland Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Swiss market, as measured by the MSCI Switzerland Index (the “Index”).

Principal Investment Strategy

The Index consists of stocks traded primarily on the Zurich Stock Exchange. As of September 30, 2005, the Index’s three largest stocks were Novartis AG, Nestle SA Registered and Roche Holding AG and its three largest industries were pharmaceuticals and biotechnology, diversified financials and food beverages and tobacco. The Fund uses a Representative Sampling strategy to try to track the Index.

The Fund’s top portfolio holdings can be found at www.iShares.com. Fund fact sheets provide information regarding the Fund’s top holdings and may be requested by calling 1-800-iShares.

Principal Risks Specific to Fund

Because foreign exchanges may be open on days when the Fund does not price its shares, the value of the securities in the Fund’s portfolio may change on days when shareholders will not be able to purchase or sell the Fund’s shares.

The Swiss economy may be significantly affected by the economies of other European countries. Europe includes both developed and emerging economies. Most developed countries in Western Europe are members of the European Union, and many are also members of the European Monetary Union (the “EMU”). The EMU requires compliance with restrictions on inflation rates, deficits, and debt levels, and the tight fiscal and monetary controls necessary to join the EMU, each of which may significantly affect every country in Europe. The political and economic integration of Europe over the past half-century, as well as Switzerland’s role in many UN and international organizations, has strengthened Switzerland’s ties with its neighbors. Many Eastern European countries continue to move toward market economies. However, Eastern European markets remain relatively undeveloped and can be particularly sensitive to political and economic developments.

iShares MSCI Switzerland Index Fund

page 71

Performance Information

The bar chart and table that follow show how the Fund has performed in the past on a calendar year basis and provide an indication of the risks of investing in the Fund. Both assume that all dividends and distributions have been reinvested in the Fund. How the Fund has performed in the past (before and after taxes) does not necessarily show how it will perform in the future. Supplemental information about the Fund’s performance is shown under the heading Total Return Information in the Supplemental Information section at the end of this Prospectus.

Year-By-Year Returns

The Fund’s total return for the nine months ended September 30, 2005 was 7.26%. The best calendar quarter return during the period shown above was 24.63% in the 4th quarter of 1998; the worst was -22.09% in the 3rd quarter of 1998.

Average Annual Total Returns

(for the periods ended December 31, 2004)

	1 Year	5 Years	Since Fund Inception1
Fund:
Return Before Taxes	15.66%	1.63%	5.99%
Return After Taxes on Distributions2	15.48%	1.55%	5.55%
Return After Taxes on Distributions and Sale of Fund Shares2	10.20%	1.38%	5.06%
Index (Index returns do not reflect deductions for fees, expenses, or taxes)	14.96%	2.75%	7.44%

1 Inception date: 3/12/1996.

2 After-tax returns in the table above are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Fund’s returns after taxes on distributions and sale of fund shares are calculated assuming that an investor has sufficient capital gains of the same character from other investments to offset any capital losses from the sale of fund shares. As a result, the Fund’s returns after taxes on distributions and sale of fund shares may exceed the Fund’s returns before taxes and/or returns after taxes on distributions.

i  Shares

page 72

Fees and Expenses

Most investors will buy and sell shares of the Fund through brokers.

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.*

Shareholder Fees	None
(fees paid directly from your investment, but see the Creation Transaction Fees and Redemption Transaction Fees section below)
Annual Fund Operating Expenses
(expenses that are deducted from the Fund’s assets)**
Management Fees	0.59%
Distribution and Service (12b-1) Fees	None
Other Expenses***	None
Total Annual Fund Operating Expenses	0.59%

* You will incur customary brokerage commissions when buying or selling shares of the Fund.

** Expressed as a percentage of average net assets.

*** The Company’s Investment Advisory Agreement provides that BGFA will pay all operating expenses of the Company, except interest expense and taxes (both expected to be de minimis), any brokerage expenses, distribution fees or expenses, and extraordinary expenses.

Example

This Example is intended to help you compare the cost of investing in shares of the Fund with the cost of investing in other funds.

The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then sell all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on the assumptions, your costs would be:

1 Year	3 Years	5 Years	10 Years
$60	$189	$329	$738

Creation Transaction Fees and Redemption Transaction Fees

The Fund issues and redeems shares at NAV only in large blocks of 125,000 shares or multiples thereof. As a practical matter, only institutions or large investors purchase or redeem these Creation Units. A standard creation transaction fee of $1,500 is charged to each purchaser of Creation Units. The fee is a single charge and will be the same regardless of the number of Creation Units purchased by an investor on the same day. The approximate value of a Creation Unit as of September 30, 2005 was $2,272,500. An investor who holds Creation Units and wishes to redeem them at NAV would also pay a standard redemption transaction fee of $1,500 on the date of such redemption(s), regardless of the number of Creation Units redeemed that day.* Investors who hold Creation Units will also pay the annual fund operating expenses described in the table above. Assuming an investment in a Creation Unit of $2,272,500 and a 5% return each year, and assuming that the Fund’s operating expenses remain the same, the total costs would be $16,694 if the Creation Unit is redeemed after one year, $45,921 if the Creation Unit is redeemed after three years, $77,783 if the Creation Unit is redeemed after five years, and $170,576 if the Creation Unit is redeemed after ten years.

* See the Transaction Fees section at the end of this Prospectus. If a Creation Unit is purchased or redeemed outside the usual process through the National Securities Clearing Corporation or for cash, a variable fee will be charged of up to four times the standard creation or redemption transaction fee.

iShares MSCI Switzerland Index Fund

page 73

iShares MSCI Taiwan Index Fund

CUSIP: 464286731

Trading Symbol: EWT

Underlying Index: MSCI Taiwan Index

Investment Objective

The iShares MSCI Taiwan Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Taiwanese market, as measured by the MSCI Taiwan Index (the “Index”).

Principal Investment Strategy

The Index consists of stocks traded primarily on the Taiwan Stock Exchange. As of September 30, 2005, the Index’s three largest stocks were Taiwan Semiconductors Mfg. Co. Ltd., Hon Hai Precision Industry Co. Ltd. and United Microelectronics Corp. and its three largest industries were technology hardware and equipment, semiconductors and semiconductor equipment and banks. The Fund uses a Representative Sampling strategy to try to track the Index.

The Fund’s top portfolio holdings can be found at www.iShares.com. Fund fact sheets provide information regarding the Fund’s top holdings and may be requested by calling 1-800-iShares.

Principal Risks Specific to Fund

Because foreign exchanges may be open on days when the Fund does not price its shares, the value of the securities in the Fund’s portfolio may change on days when shareholders will not be able to purchase or sell the Fund’s shares.

Shares of the Fund may trade in the secondary market on days when the Fund does not accept orders to purchase or redeem shares. On such days, shares may trade in the secondary market with more significant premiums or discounts than might otherwise be experienced on days when the Fund accepts purchase and redemption orders.

Taiwan’s size and geographic proximity to the People’s Republic of China, and its history of political contention with China, which regards Taiwan as a renegade province, have resulted in ongoing tensions with China, including the continual risk of invasion by, or war with, China and other factors, which may materially impact the Taiwanese economy and securities markets. In addition to the Chinese economy, Taiwanese exports are largely dependent on the U.S. economy in addition to a number of other Asian economies, and can be significantly affected by currency fluctuations and increasing competition from Asia’s other emerging economies. Asia includes countries in all stages of economic development, although most Asian economies have at times been characterized by over-extension of credit, currency devaluations and restrictions, rising unemployment, high inflation, and/or economic recessions. Currency devaluations in any one country can have a significant effect on the entire Asian region. In the late 1990s, the economies in the Asian region have suffered significant downturns and significant volatility increases. Heightened political and social unrest in any Asian country could cause further economic and market uncertainty in the region.

i  Shares

page 74

Performance Information

The bar chart and table that follow show how the Fund has performed in the past on a calendar year basis and provide an indication of the risks of investing in the Fund. Both assume that all dividends and distributions have been reinvested in the Fund. How the Fund has performed in the past (before and after taxes) does not necessarily show how it will perform in the future. Supplemental information about the Fund’s performance is shown under the heading Total Return Information in the Supplemental Information section at the end of this Prospectus.

Year-By-Year Returns

The Fund’s total return for the nine months ended September 30, 2005 was -2.92%. The best calendar quarter return during the period shown above was 52.27% in the 4th quarter of 2001; the worst was -29.25% in the 3rd quarter of 2001.

Average Annual Total Returns

(for the periods ended December 31, 2004)

	1 Year	Since Fund Inception1
Fund:
Return Before Taxes	8.56%	-9.11%
Return After Taxes on Distributions2	8.65%	-9.15%
Return After Taxes on Distributions and Sale of Fund Shares2	5.90%	-7.46%
Index (Index returns do not reflect deductions for fees, expenses, or taxes)	8.99%	-8.27%

1 Inception date: 6/20/2000.

2 After-tax returns in the table above are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Fund’s returns after taxes on distributions and sale of fund shares are calculated assuming that an investor has sufficient capital gains of the same character from other investments to offset any capital losses from the sale of fund shares. As a result, the Fund’s returns after taxes on distributions and sale of fund shares may exceed the Fund’s returns before taxes and/or returns after taxes on distributions.

iShares MSCI Taiwan Index Fund

page 75

Fees and Expenses

Most investors will buy and sell shares of the Fund through brokers.

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.*

Shareholder Fees	None
(fees paid directly from your investment, but see the Creation Transaction Fees and Redemption Transaction Fees section below)
Annual Fund Operating Expenses
(expenses that are deducted from the Fund’s assets)**
Management Fees	0.74%
Distribution and Service (12b-1) Fees	None
Other Expenses***	None
Total Annual Fund Operating Expenses	0.74%

* You will incur customary brokerage commissions when buying or selling shares of the Fund.

** Expressed as a percentage of average net assets.

*** The Company’s Investment Advisory Agreement provides that BGFA will pay all operating expenses of the Company, except interest expense and taxes (both expected to be de minimis), any brokerage expenses, distribution fees or expenses, and extraordinary expenses.

Example

This Example is intended to help you compare the cost of investing in shares of the Fund with the cost of investing in other funds.

The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then sell all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on the assumptions, your costs would be:

1 Year	3 Years	5 Years	10 Years
$76	$237	$411	$918

Creation Transaction Fees and Redemption Transaction Fees

The Fund issues and redeems shares at NAV only in large blocks of 50,000 shares or multiples thereof. As a practical matter, only institutions or large investors purchase or redeem these Creation Units. A standard creation transaction fee of $4,500 is charged to each purchaser of Creation Units. The fee is a single charge and will be the same regardless of the number of Creation Units purchased by an investor on the same day. The approximate value of a Creation Unit as of September 30, 2005 was $582,500. An investor who holds Creation Units and wishes to redeem them at NAV would also pay a standard redemption transaction fee of $4,500 on the date of such redemption(s), regardless of the number of Creation Units redeemed that day.* Investors who hold Creation Units will also pay the annual fund operating expenses described in the table above. Assuming an investment in a Creation Unit of $582,500 and a 5% return each year, and assuming that the Fund’s operating expenses remain the same, the total costs would be $13,368 if the Creation Unit is redeemed after one year, $22,671 if the Creation Unit is redeemed after three years, $32,783 if the Creation Unit is redeemed after five years, and $62,083 if the Creation Unit is redeemed after ten years.

* See the Transaction Fees section at the end of this Prospectus. If a Creation Unit is purchased or redeemed outside the usual process through the National Securities Clearing Corporation or for cash, a variable fee will be charged of up to four times the standard creation or redemption transaction fee.

i  Shares

page 76

iShares MSCI United Kingdom Index Fund

CUSIP: 464286699

Trading Symbol: EWU

Underlying Index: MSCI United Kingdom Index

Investment Objective

The iShares MSCI United Kingdom Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the British market, as measured by the MSCI United Kingdom Index (the “Index”).

Principal Investment Strategy

The Index consists of stocks traded primarily on the London Stock Exchange. As of September 30, 2005, the Index’s three largest stocks were BP PLC, HSBC Holdings PLC and Vodafone Group PLC and its three largest industries were energy, banks and pharmaceuticals and biotechnology. The Fund uses a Representative Sampling strategy to try to track the Index.

The Fund’s top portfolio holdings can be found at www.iShares.com. Fund fact sheets provide information regarding the Fund’s top holdings and may be requested by calling 1-800-iShares.

Principal Risks Specific to Fund

Because foreign exchanges may be open on days when the Fund does not price its shares, the value of the securities in the Fund’s portfolio may change on days when shareholders will not be able to purchase or sell the Fund’s shares.

The economies of the United Kingdom may be significantly affected by the economies of other European countries. Europe includes both developed and emerging economies. Most developed countries in Western Europe are members of the European Union and many are also members of the European Monetary Union (the “EMU”). The EMU requires compliance with restrictions on inflation rates, deficits, and debt levels, and the tight fiscal and monetary controls necessary to join the EMU, each of which may significantly affect every country in Europe. Many Eastern European countries continue to move toward market economies. However, Eastern European markets remain relatively undeveloped and can be particularly sensitive to political and economic developments.

iShares MSCI United Kingdom Index Fund

page 77

Performance Information

The bar chart and table that follow show how the Fund has performed in the past on a calendar year basis and provide an indication of the risks of investing in the Fund. Both assume that all dividends and distributions have been reinvested in the Fund. How the Fund has performed in the past (before and after taxes) does not necessarily show how it will perform in the future. Supplemental information about the Fund’s performance is shown under the heading Total Return Information in the Supplemental Information section at the end of this Prospectus.

Year-By-Year Returns

The Fund’s total return for the nine months ended September 30, 2005 was 6.60%. The best calendar quarter return during the period shown above was 18.43% in the 1st quarter of 1998; the worst was -17.32% in the 3rd quarter of 2002.

Average Annual Total Returns

(for the periods ended December 31, 2004)

	1 Year	5 Years	Since Fund Inception1
Fund:
Return Before Taxes	18.59%	-0.49%	8.24%
Return After Taxes on Distributions2	18.27%	-1.17%	7.42%
Return After Taxes on Distributions and Sale of Fund Shares2	12.55%	-0.70%	6.91%
Index (Index returns do not reflect deductions for fees, expenses, or taxes)	19.57%	0.18%	8.93%

1 Inception date: 3/12/1996.

2 After-tax returns in the table above are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Fund’s returns after taxes on distributions and sale of fund shares are calculated assuming that an investor has sufficient capital gains of the same character from other investments to offset any capital losses from the sale of fund shares. As a result, the Fund’s returns after taxes on distributions and sale of fund shares may exceed the Fund’s returns before taxes and/or returns after taxes on distributions.

i  Shares

page 78

Fees and Expenses

Most investors will buy and sell shares of the Fund through brokers.

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.*

Shareholder Fees	None
(fees paid directly from your investment, but see the Creation Transaction Fees and Redemption Transaction Fees section below)
Annual Fund Operating Expenses
(expenses that are deducted from the Fund’s assets)**
Management Fees	0.59%
Distribution and Service (12b-1) Fees	None
Other Expenses***	None
Total Annual Fund Operating Expenses	0.59%

* You will incur customary brokerage commissions when buying or selling shares of the Fund.

** Expressed as a percentage of average net assets.

*** The Company’s Investment Advisory Agreement provides that BGFA will pay all operating expenses of the Company, except interest expense and taxes (both expected to be de minimis), any brokerage expenses, distribution fees or expenses, and extraordinary expenses.

Example

This Example is intended to help you compare the cost of investing in shares of the Fund with the cost of investing in other funds.

The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then sell all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on the assumptions, your costs would be:

1 Year	3 Years	5 Years	10 Years
$60	$189	$329	$738

Creation Transaction Fees and Redemption Transaction Fees

The Fund issues and redeems shares at NAV only in large blocks of 200,000 shares or multiples thereof. As a practical matter, only institutions or large investors purchase or redeem these Creation Units. A standard creation transaction fee of $3,500 is charged to each purchaser of Creation Units. The fee is a single charge and will be the same regardless of the number of Creation Units purchased by an investor on the same day. The approximate value of a Creation Unit as of September 30, 2005 was $3,812,000. An investor who holds Creation Units and wishes to redeem them at NAV would also pay a standard redemption transaction fee of $3,500 on the date of such redemption(s), regardless of the number of Creation Units redeemed that day.* Investors who hold Creation Units will also pay the annual fund operating expenses described in the table above. Assuming an investment in a Creation Unit of $3,812,000 and a 5% return each year, and assuming that the Fund’s operating expenses remain the same, the total costs would be $29,966 if the Creation Unit is redeemed after one year, $78,980 if the Creation Unit is redeemed after three years, $132,412 if the Creation Unit is redeemed after five years, and $288,027 if the Creation Unit is redeemed after ten years.

* See the Transaction Fees section at the end of this Prospectus. If a Creation Unit is purchased or redeemed outside the usual process through the National Securities Clearing Corporation or for cash, a variable fee will be charged of up to four times the standard creation or redemption transaction fee.

iShares MSCI United Kingdom Index Fund

page 79

Management

Investment Adviser

As investment adviser, BGFA has overall responsibility for the general management and administration of the Company. BGFA provides an investment program for each Fund and manages the investment of each Fund’s assets. BGFA uses teams of portfolio managers, investment strategists and other investment specialists. This team approach brings together many disciplines and leverages BGFA’s extensive resources. BGFA also arranges for transfer agency, custody, fund administration and all other non-distribution related services necessary for the Funds to operate.

For its investment management services to the iShares MSCI Brazil Index, iShares MSCI South Africa Index, iShares MSCI South Korea Index and iShares MSCI Taiwan Index Funds, BGFA is paid management fees equal to each of those Fund’s allocable portion of: 0.74% per year of the aggregate net assets of those Funds less than or equal to $2 billion, plus 0.69% per year of the aggregate net assets of those Funds between $2 billion and $4 billion, plus 0.64% per year of the aggregate net assets of those Funds greater than $4 billion; for its investment management services to the iShares MSCI Pacific ex-Japan Index Fund, BGFA is paid management fees equal to 0.50% per year of the net assets of that Fund; for its investment management services to the iShares MSCI Emerging Markets Index Fund, BGFA is paid management fees equal to 0.75% per year of the net assets of that Fund; for its investment management services to each of the other Funds included in this Prospectus, BGFA is paid a fee equal to each of those Fund’s allocable portion of: 0.59% per year of the aggregate net assets of those Funds less than or equal to $7 billion, plus 0.54% per year of the aggregate net assets of those Funds between $7 billion and $11 billion, plus 0.49% per year of the aggregate net assets of those Funds in excess of $11 billion.

For the fiscal year ended August 31, 2005, BGFA received management fees from each Fund based on a percentage of the Fund’s average daily net assets, as shown in the following table.

iShares MSCI Index Fund	Percentage of Average Daily Net Assets	iShares MSCI Index Fund	Percentage of Average Daily Net Assets
Australia	0.59%	Malaysia	0.59%
Austria	0.59%	Mexico	0.59%
Belgium	0.59%	Netherlands	0.59%
Brazil	0.74%	Pacific ex-Japan	0.50%
Canada	0.59%	Singapore	0.48%	*
Emerging Market	0.75%	South Africa	0.74%
EMU	0.59%	South Korea	0.74%
France	0.59%	Spain	0.59%
Germany	0.59%	Sweden	0.59%
Hong Kong	0.59%	Switzerland	0.59%
Italy	0.59%	Taiwan	0.74%
Japan	0.59%	United Kingdom	0.59%

* Pursuant to the Fund’s previous Investment Advisory Agreement, this rate reflects the amounts retained by BGFA after reduction by the amounts of the Fund’s other fees and expenses (except interest expense and taxes, any brokerage expenses, distribution fees or expenses, and extraordinary expenses). At a special meeting held on August 11, 2005, shareholders of the iShares MSCI Singapore Index Fund approved a new Investment Advisory Agreement, which took effect on September 1, 2005. The terms of which are described above.

A discussion regarding the basis for the Board of Directors’ approval of the investment advisory agreement with BGFA is available in the Funds’ annual report for the fiscal year ended August 31, 2005.

BGFA is located at 45 Fremont Street, San Francisco, CA 94105. It is a wholly-owned subsidiary of BGI, which in turn is an indirect subsidiary of Barclays Bank PLC. As of September 30, 2005, BGI and its

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affiliates, including BGFA, provided investment advisory services for assets in excess of $1.4 trillion. BGI, BGFA, Barclays Global Investor Services, Barclays Bank PLC and their affiliates deal, trade and invest for their own accounts in the types of securities in which the Funds may also invest.

Portfolio Managers

Lisa Chen and Carl Gilchrist (the “Portfolio Managers”) are primarily responsible for the day-to-day management of the iShares MSCI Index Funds. Each Portfolio Manager is responsible for various functions related to portfolio management, including, but not limited to, investing cash inflows, coordinating with members of their team to focus on certain asset classes, implementing investment strategy, researching and reviewing investment strategy, and overseeing members of his or her portfolio management team with more limited responsibilities, but each Portfolio Manager has appropriate limitations on his or her authority for risk management and compliance purposes.

Lisa Chen is an employee of BGFA and BGI and has been primarily responsible for the day-to-day management of the iShares MSCI Index Funds since 1999. Ms. Chen has been a portfolio manager for BGFA and BGI since 1999.

Carl Gilchrist is an employee of BGFA and BGI and has been primarily responsible for the day-to-day management of the iShares MSCI Index Funds since such Funds respective inception dates. Mr. Gilchrist has been a senior portfolio manager for BGFA and BGI since 1995.

The Funds’ SAI provides additional information about the Portfolio Managers’ compensation, other accounts managed by the Portfolio Managers, and the Portfolio Managers’ ownership of shares in the Funds for which they are Portfolio Managers.

Administrator, Custodian and Transfer Agent

Investors Bank & Trust Company (“Investors Bank”) is the administrator, custodian and transfer agent for each Fund.

Shareholder Information

Additional shareholder information, including how to buy and sell shares of any Fund, is available free of charge by calling toll-free: 1-800-iShares or visiting our website www.iShares.com.

Buying and Selling Shares

Shares of the Funds trade on national securities exchanges or elsewhere during the trading day. Shares can be bought and sold throughout the trading day like other shares of publicly traded securities. There is no minimum investment. When buying or selling shares through a broker, you will incur customary brokerage commissions and charges.

Shares of the Funds may be acquired or redeemed directly from a Fund only in Creation Units or multiples thereof, as discussed in the Creations and Redemptions section. Once created, shares of the Funds generally trade in the secondary market in amounts less than a Creation Unit.

Shares of the Funds trade under the trading symbols listed for each Fund in the Description of the iShares MSCI Index Funds section.

The Board of Directors has adopted a policy of not monitoring for frequent purchases and redemptions of Fund shares (“frequent trading”) that appear to attempt to take advantage of a potential arbitrage opportunity presented by a lag between a change in the value of a Fund’s portfolio securities after the

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close of the primary markets for the Fund’s portfolio securities and the reflection of that change in the Fund’s NAV (“market timing”), because each Fund sells and redeems its shares directly through transactions that are in-kind and/or for cash, with a deadline for placing cash-related transactions no later than the close of the primary markets for the Fund’s portfolio securities. The Board of Directors has not adopted a policy of monitoring for other frequent trading activity because shares of the Funds are listed and traded on national securities exchanges.

The Funds are listed on a national securities exchange, such as the New York Stock Exchange (“NYSE”) or the American Stock Exchange (“AMEX”). Each national securities exchange on which Fund shares are listed is open Monday through Friday and is closed on weekends and the following holidays, as observed: New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

Section 12(d)(1) of the Investment Company Act of 1940 restricts investments by registered investment companies in the securities of other investment companies, including shares of each Fund. Registered investment companies are permitted to invest in the Funds beyond the limits set forth in section 12(d)(1), subject to certain terms and conditions set forth in an SEC exemptive order issued to the iShares Funds, including that such investment companies enter into an agreement with the Funds.

Book Entry

Shares of the Funds are held in book-entry form, which means that no stock certificates are issued. The Depository Trust Company (“DTC”) or its nominee, is the record owner of all outstanding shares of each Fund and is recognized as the owner of all shares for all purposes.

Investors owning shares of the Funds are beneficial owners as shown on the records of DTC or its participants. DTC serves as the securities depository for all shares of the Funds. Participants include DTC, securities brokers and dealers, banks, trust companies, clearing corporations and other institutions that directly or indirectly maintain a custodial relationship with DTC. As a beneficial owner of shares, you are not entitled to receive physical delivery of stock certificates or to have shares registered in your name, and you are not considered a registered owner of shares. Therefore, to exercise any rights as an owner of shares, you must rely upon the procedures of DTC and its participants. These procedures are the same as those that apply to any securities that you hold in book entry or “street name” form.

Share Prices

The trading prices of shares in the secondary market may differ in varying degrees from their daily NAVs and can be affected by market forces such as supply and demand, economic conditions and other factors.

The approximate value of shares of each Fund is disseminated every fifteen seconds throughout the trading day by the national securities exchange on which the Fund is listed or by other information providers or market data vendors. This approximate value should not be viewed as a “real-time” update of the NAV, because the approximate value may not be calculated in the same manner as the NAV, which is computed once a day. The approximate value generally is determined by using current market quotations and/or price quotations obtained from broker-dealers that may trade in the portfolio securities held by the Funds. The Funds are not involved in, or responsible for, the calculation or dissemination of the approximate value and make no warranty as to its accuracy.

Determination of Net Asset Value

Investors Bank calculates the NAV for each Fund generally once daily Monday through Friday generally as of the regularly scheduled close of business of the NYSE (normally 4:00 p.m. Eastern time) on each day that the NYSE is open for trading, based on prices at the time of closing, provided that (a) any assets

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or liabilities denominated in currencies other than the U.S. dollar shall be translated into U.S. dollars at the prevailing market rates on the date of valuation as quoted by one or more major banks or dealers that makes a two-way market in such currencies (or a data service provider based on quotations received from such banks or dealers); and (b) U.S. fixed-income assets may be valued as of the announced closing time for trading in fixed-income instruments on any day that the Bond Market Association announces an early closing time. The NAV of each Fund is calculated by dividing the value of the net assets of such Fund (i.e., the value of its total assets less total liabilities) by the total number of outstanding shares of the Fund, generally rounded to the nearest cent. In calculating the Fund’s NAV, a Fund’s investments are generally valued using market valuations. In the event that current market valuations are not readily available or such valuations do not reflect current market values, the affected investments will be valued using fair value pricing pursuant to the pricing policy and procedures approved by the Board of Directors. The frequency with which a Fund’s investments are valued using fair value pricing is primarily a function of the types of securities and other assets in which the Fund invests pursuant to its investment objective, strategies and limitations.

Investments that may be valued using fair value pricing include, but are not limited to: (i) an unlisted security related to corporate actions; (ii) a restricted security (i.e., one that may not be publicly sold without registration under the Securities Act of 1933 (the “Securities Act”)); (iii) a security whose trading has been suspended or which has been de-listed from its primary trading exchange; (iv) a security that is thinly traded; (v) a security in default or bankruptcy proceedings for which there is no current market quotation; (vi) a security affected by currency controls or restrictions; and (vii) a security affected by a significant event (i.e., an event that occurs after the close of the markets on which the security is traded but before the time as of which the Fund’s NAV is computed and that may materially affect the value of the Fund’s investments). Examples of events that may be “significant events” are government actions, natural disasters, armed conflict, acts of terrorism, and significant market fluctuations.

Valuing a Fund’s investments using fair value pricing will result in using prices for those investments that may differ from current market valuations. Accordingly, fair value pricing could result in a difference between the prices used to calculate a Fund’s net asset value and the prices used by the Fund’s benchmark index, which, in turn, could result in a difference between the Fund’s performance and the performance of the Fund’s benchmark index.

Because foreign markets may be open on different days than the days during which a shareholder may purchase a Fund’s shares, the value of the Fund’s investments may change on days when shareholders are not able to purchase the Fund’s shares.

The value of assets denominated in foreign currencies is converted into U.S. dollars using exchange rates deemed appropriate by BGFA as investment adviser. Any use of a different rate from the rates used by MSCI may adversely affect a Fund’s ability to track its Underlying Index.

Dividends and Distributions

Dividends from net investment income, including any net foreign currency gains, are declared and paid at least annually and any net realized securities gains are distributed at least annually. In order to improve tracking error or comply with the distribution requirements of the Internal Revenue Code of 1986, dividends may be declared and paid more frequently than annually for certain Funds. Dividends and securities gains distributions are distributed in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds.

Taxes

As with any investment, you should consider how your investment in shares of the Funds will be taxed. The tax information in this Prospectus is provided as general information. You should consult your own tax professional about the tax consequences of an investment in shares of the Funds.

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Unless your investment in shares is through a tax-exempt entity or taxed-deferred retirement account, such as an IRA plan, you need to be aware of the possible tax consequences when:

n A Fund makes distributions, and

n You sell your shares.

Taxes on Distributions

Distributions paid out of a Fund’s net investment income (other than qualified dividend income), including distributions out of the Fund’s net short-term capital gains, if any, and distributions of income from securities lending, are taxable to you as ordinary income. Distributions by the Fund of net long-term capital gains in excess of net short-term capital losses (capital gain dividends) are taxable to you as long-term capital gains, regardless of how long you have held a Fund’s shares. Distributions by the Fund that qualify as qualified dividend income are taxable to you at long-term capital gain rates. In order for a distribution by the Fund to be treated as qualified dividend income, a Fund must meet holding period and other requirements with respect to its dividend paying stocks and you must meet holding period requirements and other requirements with respect to the Fund’s shares. In general, your distributions are subject to federal income tax for the year when they are paid. Certain distributions paid in January, however, may be treated as paid on December 31 of the prior year.

Dividends and interest received by a Fund with respect to foreign securities may give rise to withholding and other taxes imposed by foreign countries. Tax conventions between certain countries and the United States may reduce or eliminate such taxes. Since more than 50% of each Fund’s total assets at the end of its taxable year will consist of foreign stocks or securities, each Fund will “pass through” to you certain foreign income taxes (including withholding taxes) paid by the Fund. This means that you will be considered to have received as an additional dividend your share of such foreign taxes, but you may be entitled to either a corresponding tax deduction in calculating your taxable income, or, subject to certain limitations, a credit in calculating your federal income tax.

If you are neither a resident nor a citizen of the United States or if you are a foreign entity, the Fund’s ordinary income dividends (which include distributions of net short-term capital gains) will generally be subject to a 30% U.S. withholding tax, unless a lower treaty rate applies; provided, however, that for taxable years of the Fund beginning after December 31, 2004, but not beginning after December 31, 2007, interest related dividends and short-term capital gain dividends generally will not be subject to such U.S. withholding tax.

If you are a resident or a citizen of the United States, by law, back-up withholding will apply to your distributions and proceeds if you have not provided a taxpayer identification number or social security number and made other required certifications.

Taxes When Shares are Sold

Currently, any capital gain or loss realized upon a sale of shares is generally treated as long-term gain or loss if the shares have been held for more than one year. Any capital gain or loss realized upon a sale of shares held for one year or less is generally treated as short-term gain or loss, except that any capital loss on the sale of shares held for six months or less is treated as long-term capital loss to the extent that capital gain dividends were paid with respect to such shares.

The foregoing discussion summarizes some of the consequences under current federal tax law of an investment in a Fund. It is not a substitute for personal tax advice. You also may be subject to state and local taxation on Fund distributions and sales of shares. Consult your personal tax adviser about the potential tax consequences of an investment in shares of a Fund under all applicable tax laws.

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Creations and Redemptions

The shares that trade in the secondary market are “created” at NAV by market makers, large investors and institutions only in block-size Creation Units, generally ranging from 40,000 to 600,000 shares or multiples thereof. Each “creator” enters into an authorized participant agreement with SEI Investments Distribution Co. (“SEI”), the Fund’s distributor, which is subject to acceptance by the transfer agent, and then deposits into the applicable Fund a portfolio of securities closely approximating the holdings of the Fund and a specified amount of cash in exchange for a specified number of Creation Units.

Similarly, shares can only be redeemed in a specified number of Creation Units, principally in-kind for a portfolio of securities held by the Fund and a specified amount of cash. Except when aggregated in Creation Units, shares are not redeemable. The prices at which creations and redemptions occur are based on the next calculation of NAV after an order is received in a form described in the authorized participant agreement.

Creations and redemptions must be made through a firm that is either a member of the Continuous Net Settlement System of the National Securities Clearing Corporation or a DTC participant, and in each case, must have executed an agreement with SEI with respect to creations and redemptions of Creation Unit aggregations. Information about the procedures regarding creation and redemption of Creation Units (including the cut-off times for receipt of creation and redemption orders) is included in the SAI.

Because new shares may be created and issued on an ongoing basis, at any point during the life of a Fund a “distribution,” as such term is used in the Securities Act, may be occurring. Broker-dealers and other persons are cautioned that some activities on their part may, depending on the circumstances, result in their being deemed participants in a distribution in a manner that could render them statutory underwriters and subject to the prospectus delivery and liability provisions of the Securities Act. Nonetheless, any determination of whether one is an underwriter must take into account all the relevant facts and circumstances of each particular case.

Broker-dealers should also note that dealers who are not “underwriters,” but are participating in a distribution (as contrasted to ordinary secondary transactions), and thus dealing with shares that are part of an “unsold allotment” within the meaning of section 4(3)(C) of the Securities Act, would be unable to take advantage of the prospectus delivery exemption provided by section 4(3) of the Securities Act. For delivery of prospectuses to exchange members, the prospectus delivery mechanism of Rule 153 under the Securities Act is only available with respect to transactions on a national securities exchange.

Transaction Fees

Each Fund will impose a purchase transaction fee and a redemption transaction fee to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units of shares. Purchasers and redeemers of Creation Units of shares for cash are required to pay an additional variable charge to compensate for brokerage and market impact expenses. The standard creation and redemption transaction fees for creations and redemptions in kind for each Fund are discussed below. The standard creation transaction fee is charged to each purchaser on the day such purchaser creates a Creation Unit. The fee is a single charge and will be the amount indicated below regardless of the number of Creation Units purchased by an investor on the same day. BGFA may, from time to time, at its own expense, compensate purchasers of Creation Units who have purchased substantial amounts of Creation Units, and other financial institutions for administrative or marketing services. Similarly, the standard redemption transaction fee will be the amount indicated regardless of the number of Creation Units redeemed that day. The standard creation and redemption transaction fees for creations and redemptions through DTC for cash (when cash creations and redemptions are available or specified) will also be subject to an additional variable charge of up to a maximum of four times the amount shown below under “Maximum Creation/Redemption Transaction Fee.” In addition, purchasers of shares in Creation Units are responsible for payment of the costs of transferring the securities to the Fund. Redeemers of shares in Creation Units are responsible for the costs of transferring the securities from the Fund.

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Investors who use the services of a broker or other such intermediary may pay fees for such services. The following table also shows, as of September 30, 2005, the approximate value of one Creation Unit per Fund, including the standard creation and redemption transaction fee and the number of shares per Creation Unit.

iShares MSCI Funds	Approximate Value of Creation Unit		Fee for In-kind and Cash Purchases and Redemptions		Maximum Additional Variable Charge for Cash Purchases*		Maximum Additional Variable Charge for Cash Redemptions*		Number of Shares Per Creation Unit
Australia	$	3,924,000	$	2,400	0.60	%	0.60	%	200,000
Austria	$	2,712,000	$	600	0.67	%	0.67	%	100,000
Belgium	$	768,000	$	700	0.30	%	0.30	%	40,000
Brazil	$	1,666,500	$	2,400	**		***		50,000
Canada	$	2,152,000	$	1,900	0.30	%	0.30	%	100,000
Emerging Markets	$	12,676,500	$	7,700	**		***		150,000
EMU	$	3,847,500	$	8,000	1.05	%	1.05	%	50,000
France	$	5,208,000	$	2,900	0.25	%	0.25	%	200,000
Germany	$	5,847,000	$	1,500	0.25	%	0.25	%	300,000
Hong Kong	$	1,005,750	$	2,000	0.60	%	0.60	%	75,000
Italy	$	3,951,000	$	1,400	0.30	%	0.30	%	150,000
Japan	$	7,272,000	$	5,000	0.15	%	0.40	%	600,000
Malaysia	$	551,250	$	5,000	**		***		75,000
Mexico	$	3,275,000	$	1,400	0.50	%	0.50	%	100,000
Netherlands	$	966,000	$	1,000	0.25	%	0.25	%	50,000
Pacific ex-Japan	$	10,302,000	$	6,000	1.80	%	1.50	%	100,000
Singapore	$	785,000	$	2,000	1.60	%	1.30	%	100,000
South Africa	$	4,590,000	$	1,200	0.75	%	0.75	%	50,000
South Korea	$	1,944,500	$	4,000	**		***		50,000
Spain	$	2,828,250	$	1,500	0.25	%	0.45	%	75,000
Sweden	$	1,688,250	$	1,300	0.30	%	0.30	%	75,000
Switzerland	$	2,272,500	$	1,500	0.40	%	0.40	%	125,000
Taiwan	$	582,500	$	4,500	**		***		50,000
United Kingdom	$	3,812,000	$	3,500	0.25	%	0.75	%	200,000

* As a percentage of amount invested.

** The maximum additional variable charge for cash purchases will be a percentage of the value of the Deposit Securities, which will not exceed 3.00%.

*** The maximum additional variable charge for cash redemptions will be a percentage of the value of the Deposit Securities, which will not exceed 2.00%.

Householding

Householding is an option available to certain investors of the iShares Funds. Householding is a method of delivery, based on the preference of the individual investor, in which a single copy of certain shareholder documents can be delivered to investors who share the same address, even if their accounts are registered under different names. Householding for the iShares Funds is available through certain broker-dealers. If you are interested in enrolling in householding and receiving a single copy of prospectuses and other shareholder documents, please contact your broker-dealer. If you are currently enrolled in householding and wish to change your householding status, please contact your broker-dealer.

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Distribution

SEI (the “Distributor”) serves as the distributor of Creation Units for each Fund on an agency basis. The Distributor does not maintain a secondary market in shares of the Funds. The Distributor’s principal address is 1 Freedom Valley Drive, Oaks, PA 19456.

The Distributor has no role in determining the policies of any Fund or the securities that are purchased or sold by any Fund.

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Financial Highlights

The financial highlights tables are intended to help investors understand each Fund’s financial performance. Certain information reflects financial results for a single share of a Fund. The total returns in the tables represent the rate that an investor would have earned (or lost) on an investment in a given Fund, assuming reinvestment of all dividends and distributions. The information has been audited by PricewaterhouseCoopers LLP, whose report is included along with the Funds’ financial statements in the Annual Report (available upon request).

Financial Highlights

(For a share outstanding throughout each period)

	iShares MSCI Australia Index Fund
	Year ended Aug. 31, 2005			Year ended Aug. 31, 2004			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001
Net asset value, beginning of year	$	13.56		$	11.22		$	9.36		$	9.24		$	9.93
Income from investment operations:
Net investment incomea		0.70			0.45			0.32			0.23			0.24
Net realized and unrealized gain (loss)		4.60			2.32			1.81			(0.07	)		(0.71	)
Total from investment operations		5.30			2.77			2.13			0.16			(0.47	)
Less distributions from:
Net investment income		(0.58	)		(0.43	)		(0.27	)		(0.04	)		(0.20	)
Return of capital		–			–			–			–			(0.02	)
Total distributions		(0.58	)		(0.43	)		(0.27	)		(0.04	)		(0.22	)
Net asset value, end of year	$	18.28		$	13.56		$	11.22		$	9.36		$	9.24
Total return		39.58	%		24.95	%		23.33	%		1.74	%		(4.77	)%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	369,355		$	178,998		$	87,541		$	76,731		$	57,312
Ratio of expenses to average net assets		0.57	%		0.79	%		0.84	%		0.84	%		0.84	%
Ratio of net investment income to average net assets		4.13	%		3.37	%		3.21	%		2.47	%		2.54	%
Portfolio turnover rateb		17	%		9	%		8	%		5	%		23	%

^a Based on average shares outstanding throughout each period.

^b Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

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Financial Highlights

(For a share outstanding throughout each period)

	iShares MSCI Austria Index Fund
	Year ended Aug. 31, 2005			Year ended Aug. 31, 2004			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001
Net asset value, beginning of year	$	17.04		$	10.61		$	8.19		$	8.18		$	7.67
Income from investment operations:
Net investment incomea		0.29			0.21			0.09			0.13			0.13
Net realized and unrealized gain (loss)		9.38			6.39			2.43			(0.12	)		0.52
Total from investment operations		9.67			6.60			2.52			0.01			0.65
Less distributions from:
Net investment income		(0.09	)		(0.17	)		(0.10	)		–			(0.14	)
Return of capital		–			–			–			–			(0.00	)c
Total distributions		(0.09	)		(0.17	)		(0.10	)		–			(0.14	)
Net asset value, end of year	$	26.62		$	17.04		$	10.61		$	8.19		$	8.18
Total return		56.82	%		62.70	%		31.15	%		0.12	%		8.41	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	196,952		$	57,920		$	22,288		$	14,740		$	11,447
Ratio of expenses to average net assets		0.57	%		0.77	%		0.84	%		0.84	%		0.84	%d
Ratio of net investment income to average net assets		1.26	%		1.37	%		0.98	%		1.57	%		1.69	%e
Portfolio turnover rateb		21	%		11	%		26	%		32	%		66	%

^a Based on average shares outstanding throughout each period.

^b Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

^c Rounds to less than $0.01.

^d Ratio of expenses to average net assets prior to waived fees and reimbursed expenses for the year ended August 31, 2001 was 0.97%.

^e Ratio of net investment income to average net assets prior to waived fees and reimbursed expenses for the year ended August 31, 2001 was 1.55%.

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Financial Highlights

(For a share outstanding throughout each period)

	iShares MSCI Belgium Index Fund
	Year ended Aug. 31, 2005			Year ended Aug. 31, 2004			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001
Net asset value, beginning of year	$	14.77		$	11.16		$	10.43		$	11.81		$	13.23
Income from investment operations:
Net investment incomea		0.71			0.37			0.41			0.25			0.19
Net realized and unrealized gain (loss)		3.75			4.25			0.43			(1.56	)		(1.34	)
Total from investment operations		4.46			4.62			0.84			(1.31	)		(1.15	)
Less distributions from:
Net investment income		(0.29	)		(1.01	)		(0.11	)		(0.07	)		(0.27	)
Total distributions		(0.29	)		(1.01	)		(0.11	)		(0.07	)		(0.27	)
Net asset value, end of year	$	18.94		$	14.77		$	11.16		$	10.43		$	11.81
Total return		30.22	%		42.88	%		8.25	%		(11.10	)%		(8.72	)%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	46,960		$	24,813		$	21,871		$	10,427		$	9,918
Ratio of expenses to average net assets		0.57	%		0.78	%		0.84	%		0.84	%		0.84	%c
Ratio of net investment income to average net assets		3.89	%		2.79	%		4.10	%		2.26	%		1.60	%d
Portfolio turnover rateb		10	%		21	%		8	%		18	%		36	%

^a Based on average shares outstanding throughout each period.

^b Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

^c Ratio of expenses to average net assets prior to waived fees and reimbursed expenses for the year ended August 31, 2001 was 0.87%.

^d Ratio of net investment income to average net assets prior to waived fees and reimbursed expenses for the year ended August 31, 2001 was 1.57%.

i  Shares

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Financial Highlights

(For a share outstanding throughout each period)

	iShares MSCI Brazil Index Fund
	Year ended Aug. 31, 2005			Year ended Aug. 31, 2004			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001
Net asset value, beginning of year	$	16.96		$	12.19		$	8.30		$	11.20		$	19.25
Income from investment operations:
Net investment incomea		0.89			0.55			0.32			0.38			0.68
Net realized and unrealized gain (loss)		10.79			4.49			3.68			(3.28	)		(8.09	)
Total from investment operations		11.68			5.04			4.00			(2.90	)		(7.41	)
Less distributions from:
Net investment income		(0.46	)		(0.27	)		(0.11	)		–			(0.56	)
Return of capital		–			–			–			–			(0.08	)
Total distributions		(0.46	)		(0.27	)		(0.11	)		–			(0.64	)
Net asset value, end of year	$	28.18		$	16.96		$	12.19		$	8.30		$	11.20
Total return		69.72	%		41.42	%		48.85	%		(25.89	)%		(38.52	)%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	552,285		$	209,504		$	103,035		$	83,788		$	14,004
Ratio of expenses to average net assets		0.74	%		0.96	%		0.99	%		0.99	%		0.99	%
Ratio of net investment income to average net assets		3.94	%		3.59	%		3.59	%		3.50	%		4.44	%
Portfolio turnover rateb		48	%		106	%		85	%		103	%		43	%

^a Based on average shares outstanding throughout each period.

^b Portfolio turnover rates include portfolio transactions that are executed as a result of the Fund processing capital share transactions in Creation Units solely for cash in U.S. dollars. Excluding such transactions, the portfolio turnover rate for the year ended August 31, 2005 would have been 9%.

Financial Highlights

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Financial Highlights

(For a share outstanding throughout each period)

	iShares MSCI Canada Index Fund
	Year ended Aug. 31, 2005			Year ended Aug. 31, 2004			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001
Net asset value, beginning of year	$	14.33		$	12.25		$	9.49		$	10.70		$	16.94
Income from investment operations:
Net investment incomea		0.17			0.11			0.10			0.07			0.05
Net realized and unrealized gain (loss)		6.00			2.17			2.69			(1.27	)		(5.92	)
Total from investment operations		6.17			2.28			2.79			(1.20	)		(5.87	)
Less distributions from:
Net investment income		(0.20	)		(0.20	)		(0.03	)		(0.01	)		(0.02	)
Net realized gain		–			–			–			–			(0.31	)
Return of capital		–			–			–			–			(0.04	)
Total distributions		(0.20	)		(0.20	)		(0.03	)		(0.01	)		(0.37	)
Net asset value, end of year	$	20.30		$	14.33		$	12.25		$	9.49		$	10.70
Total return		43.35	%		18.70	%		29.47	%		(11.23	)%		(34.95	)%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	420,301		$	325,298		$	503,407		$	66,420		$	28,889
Ratio of expenses to average net assets		0.57	%		0.70	%c		0.84	%		0.84	%		0.84	%
Ratio of net investment income to average net assets		1.00	%		0.81	%d		0.98	%		0.70	%		0.44	%
Portfolio turnover rateb		9	%		10	%		10	%		5	%		63	%

^a Based on average shares outstanding throughout each period.

^b Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

^c Ratio of expenses to average net assets prior to voluntary reimbursed distribution fees for the year ended August 31, 2004 was 0.80%.

^d Ratio of net investment income to average net assets prior to voluntary reimbursed distribution fees for the year ended August 31, 2004 was 0.71%.

i  Shares

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Financial Highlights

(For a share outstanding throughout each period)

	iShares MSCI Emerging Markets Index Fund
	Year ended Aug. 31, 2005b			Year ended Aug. 31, 2004b			Period from Apr. 7, 2003a to Aug. 31, 2003b
Net asset value, beginning of period	$	53.96		$	45.13		$	33.75
Income from investment operations:
Net investment incomec		1.65			1.13			0.26
Net realized and unrealized gain		24.72			7.97			11.12
Total from investment operations		26.37			9.10			11.38
Less distributions from:
Net investment income		(2.41	)		(0.27	)		–
Total distributions		(2.41	)		(0.27	)		–
Net asset value, end of period	$	77.92		$	53.96		$	45.13
Total return		46.17	%		20.21	%		33.72	%f
Ratios/Supplemental data:
Net assets, end of period (000s)	$	7,000,858		$	1,958,596		$	297,846
Ratio of expenses to average net assets prior to waived feesd		0.78	%		0.77	%		0.78	%
Ratio of expenses to average net assets after waived feesd		0.77	%		0.76	%		0.78	%
Ratio of expenses to average net assets after waived fees and exclusive of foreign taxesd		0.74	%		0.74	%		0.72	%
Ratio of net investment income to average net assetsd		2.40	%		2.10	%		1.58	%
Portfolio turnover ratee		9	%		8	%		10	%

^a Commencement of operations.

^b Per share amounts were adjusted to reflect a three-for-one stock split effective June 9, 2005.

^c Based on average shares outstanding throughout each period.

^d Annualized for periods of less than one year.

^e Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

^f Not annualized.

Financial Highlights

page 93

Financial Highlights

(For a share outstanding throughout each period)

	iShares MSCI EMU Index Fund
	Year ended Aug. 31, 2005			Year ended Aug. 31, 2004			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001
Net asset value, beginning of year	$	59.38		$	50.12		$	46.02		$	56.74		$	76.02
Income from investment operations:
Net investment incomea		1.76			1.36			0.93			0.75			0.72
Net realized and unrealized gain (loss)		15.13			8.69			3.62			(11.47	)		(19.32	)
Total from investment operations		16.89			10.05			4.55			(10.72	)		(18.60	)
Less distributions from:
Net investment income		(1.30	)		(0.79	)		(0.45	)		–			(0.42	)
Return of capital		–			–			–			–			(0.26	)
Total distributions		(1.30	)		(0.79	)		(0.45	)		–			(0.68	)
Net asset value, end of year	$	74.97		$	59.38		$	50.12		$	46.02		$	56.74
Total return		28.54	%		20.07	%		10.05	%		(18.89	)%		(24.51	)%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	547,284		$	326,606		$	165,388		$	131,168		$	90,779
Ratio of expenses to average net assets		0.58	%		0.79	%		0.84	%		0.84	%		0.84	%
Ratio of expenses to average net assets exclusive of foreign taxes		0.57	%		0.79	%		n/a			n/a			n/a
Ratio of net investment income to average net assets		2.50	%		2.29	%		2.08	%		1.44	%		1.13	%
Portfolio turnover rateb		8	%		11	%		7	%		3	%		24	%

^a Based on average shares outstanding throughout each period.

^b Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

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Financial Highlights

(For a share outstanding throughout each period)

	iShares MSCI France Index Fund
	Year ended Aug. 31, 2005			Year ended Aug. 31, 2004			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001
Net asset value, beginning of year	$	20.40		$	16.90		$	15.52		$	19.53		$	26.41
Income from investment operations:
Net investment incomea		0.47			0.24			0.23			0.18			0.06
Net realized and unrealized gain (loss)		4.84			3.54			1.33			(4.19	)		(6.89	)
Total from investment operations		5.31			3.78			1.56			(4.01	)		(6.83	)
Less distributions from:
Net investment income		(0.30	)		(0.28	)		(0.18	)		–			(0.04	)
Net realized gain		–			–			–			–			(0.00	)c
Return of capital		–			–			–			–			(0.01	)
Total distributions		(0.30	)		(0.28	)		(0.18	)		–			(0.05	)
Net asset value, end of year	$	25.41		$	20.40		$	16.90		$	15.52		$	19.53
Total return		26.13	%		22.44	%		10.22	%		(20.53	)%		(25.86	)%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	81,326		$	61,201		$	54,075		$	49,674		$	58,602
Ratio of expenses to average net assets		0.57	%		0.79	%		0.84	%		0.84	%		0.84	%
Ratio of net investment income to average net assets		1.98	%		1.23	%		1.56	%		1.00	%		0.28	%
Portfolio turnover rateb		7	%		9	%		9	%		3	%		14	%

^a Based on average shares outstanding throughout each period.

^b Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

^c Rounds to less than $0.01.

Financial Highlights

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Financial Highlights

(For a share outstanding throughout each period)

	iShares MSCI Germany Index Fund
	Year ended Aug. 31, 2005			Year ended Aug. 31, 2004			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001
Net asset value, beginning of year	$	14.96		$	12.57		$	12.07		$	15.19		$	20.46
Income from investment operations:
Net investment incomea		0.28			0.19			0.21			0.11			0.18
Net realized and unrealized gain (loss)		4.03			2.40			0.41			(3.23	)		(5.26	)
Total from investment operations		4.31			2.59			0.62			(3.12	)		(5.08	)
Less distributions from:
Net investment income		(0.19	)		(0.20	)		(0.12	)		–			(0.19	)
Return of capital		–			–			–			–			(0.00	)c
Total distributions		(0.19	)		(0.20	)		(0.12	)		–			(0.19	)
Net asset value, end of year	$	19.08		$	14.96		$	12.57		$	12.07		$	15.19
Total return		28.89	%		20.55	%		5.39	%		(20.54	)%		(24.87	)%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	314,793		$	98,764		$	101,800		$	94,160		$	118,525
Ratio of expenses to average net assets		0.57	%		0.80	%		0.84	%		0.84	%		0.84	%
Ratio of net investment income to average net assets		1.54	%		1.27	%		1.98	%		0.77	%		0.99	%
Portfolio turnover rateb		9	%		9	%		11	%		9	%		20	%

^a Based on average shares outstanding throughout each period.

^b Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

^c Rounds to less than $0.01.

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Financial Highlights

(For a share outstanding throughout each period)

	iShares MSCI Hong Kong Index Fund
	Year ended Aug. 31, 2005			Year ended Aug. 31, 2004			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001
Net asset value, beginning of year	$	10.91		$	9.03		$	7.99		$	8.93		$	13.24
Income from investment operations:
Net investment incomea		0.33			0.28			0.23			0.23			0.23
Net realized and unrealized gain (loss)		2.04			1.75			0.95			(1.11	)		(4.30	)
Total from investment operations		2.37			2.03			1.18			(0.88	)		(4.07	)
Less distributions from:
Net investment income		(0.27	)		(0.15	)		(0.14	)		(0.06	)		(0.23	)
Return of capital		–			–			–			–			(0.01	)
Total distributions		(0.27	)		(0.15	)		(0.14	)		(0.06	)		(0.24	)
Net asset value, end of year	$	13.01		$	10.91		$	9.03		$	7.99		$	8.93
Total return		21.96	%		22.69	%		15.14	%		(9.94	)%		(30.88	)%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	637,985		$	449,923		$	250,627		$	99,502		$	52,946
Ratio of expenses to average net assets		0.57	%		0.80	%		0.84	%		0.84	%		0.84	%
Ratio of net investment income to average net assets		2.75	%		2.78	%		3.06	%		2.56	%		2.11	%
Portfolio turnover rateb		6	%		5	%		10	%		15	%		43	%

^a Based on average shares outstanding throughout each period.

^b Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

Financial Highlights

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Financial Highlights

(For a share outstanding throughout each period)

	iShares MSCI Italy Index Fund
	Year ended Aug. 31, 2005			Year ended Aug. 31, 2004			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001
Net asset value, beginning of year	$	20.21		$	16.67		$	15.15		$	17.79		$	22.23
Income from investment operations:
Net investment incomea		0.78			0.56			0.43			0.37			0.24
Net realized and unrealized gain (loss)		5.42			3.59			1.47			(3.01	)		(4.37	)
Total from investment operations		6.20			4.15			1.90			(2.64	)		(4.13	)
Less distributions from:
Net investment income		(0.64	)		(0.61	)		(0.38	)		–			(0.24	)
Net realized gain		–			–			–			–			(0.07	)
Return of capital		–			–			–			–			(0.00	)c
Total distributions		(0.64	)		(0.61	)		(0.38	)		–			(0.31	)
Net asset value, end of year	$	25.77		$	20.21		$	16.67		$	15.15		$	17.79
Total return		30.74	%		25.09	%		12.79	%		(14.84	)%		(18.61	)%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	42,526		$	27,279		$	29,997		$	29,538		$	34,682
Ratio of expenses to average net assets		0.57	%		0.83	%		0.84	%		0.84	%		0.84	%
Ratio of expenses to average net assets exclusive of foreign taxes		n/a			0.79	%		n/a			n/a			n/a
Ratio of net investment income to average net assets		3.18	%		2.85	%		2.84	%		2.34	%		1.16	%
Portfolio turnover rateb		18	%		9	%		22	%		10	%		20	%

^a Based on average shares outstanding throughout each period.

^b Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

^c Rounds to less than $0.01.

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Financial Highlights

(For a share outstanding throughout each period)

	iShares MSCI Japan Index Fund
	Year ended Aug. 31, 2005			Year ended Aug. 31, 2004			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001
Net asset value, beginning of year	$	9.89		$	8.29		$	7.77		$	9.07		$	13.82
Income from investment operations:
Net investment income (loss)a		0.06			0.03			0.00c			(0.01	)		(0.01	)
Net realized and unrealized gain (loss)		1.08			1.57			0.52			(1.29	)		(4.74	)
Total from investment operations		1.14			1.60			0.52			(1.30	)		(4.75	)
Less distributions from:
Net investment income		(0.04	)		(0.00	)c		–			–			–
Total distributions		(0.04	)		(0.00	)c		–			–			–
Net asset value, end of year	$	10.99		$	9.89		$	8.29		$	7.77		$	9.07
Total return		11.58	%		19.32	%		6.69	%		(14.33	)%		(34.37	)%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	7,248,107		$	5,863,332		$	1,726,855		$	666,376		$	527,899
Ratio of expenses to average net assets		0.57	%		0.64	%d		0.84	%		0.84	%		0.84	%
Ratio of net investment income (loss) to average net assets		0.59	%		0.28	%e		0.03	%		(0.12	)%		(0.11	)%
Portfolio turnover rateb		6	%		5	%		2	%		2	%		21	%

^a Based on average shares outstanding throughout each period.

^b Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

^c Rounds to less than $0.01.

^d Ratio of expenses to average net assets prior to voluntary reimbursed distribution fees for the year ended August 31, 2004 was 0.78%.

^e Ratio of net investment income to average net assets prior to voluntary reimbursed distribution fees for the year ended August 31, 2004 was 0.14%.

Financial Highlights

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Financial Highlights

(For a share outstanding throughout each period)

	iShares MSCI Malaysia Index Fund
	Year ended Aug. 31, 2005			Year ended Aug. 31, 2004			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001
Net asset value, beginning of year	$	6.54		$	5.99		$	5.68		$	5.11		$	5.96
Income from investment operations:
Net investment incomea		0.20			0.13			0.10			0.08			0.06
Net realized and unrealized gain (loss)		0.61			0.52			0.30			0.52			(0.85	)
Total from investment operations		0.81			0.65			0.40			0.60			(0.79	)
Less distributions from:
Net investment income		(0.16	)		(0.10	)		(0.09	)		(0.03	)		(0.06	)
Return of capital		–			–			–			–			(0.00	)c
Total distributions		(0.16	)		(0.10	)		(0.09	)		(0.03	)		(0.06	)
Net asset value, end of year	$	7.19		$	6.54		$	5.99		$	5.68		$	5.11
Total return		12.39	%		11.01	%		7.39	%		11.82	%		(13.22	)%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	387,575		$	224,218		$	99,730		$	93,262		$	80,877
Ratio of expenses to average net assets		0.57	%		0.79	%		0.84	%		0.84	%		0.84	%
Ratio of net investment income to average net assets		2.85	%		1.97	%		1.91	%		1.53	%		1.19	%
Portfolio turnover rateb		15	%		39	%		35	%		37	%		37	%

^a Based on average shares outstanding throughout each period.

^b Portfolio turnover rates include portfolio transactions that are executed as a result of the Fund processing capital share transactions in Creation Units solely for cash in U.S. dollars. Excluding such transactions, the portfolio turnover rate for the year ended August 31, 2005 would have been 9%.

^c Rounds to less than $0.01.

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Financial Highlights

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	iShares MSCI Mexico Index Fund
	Year ended Aug. 31, 2005			Year ended Aug. 31, 2004			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001
Net asset value, beginning of year	$	19.35		$	15.04		$	13.65		$	15.35		$	16.72
Income from investment operations:
Net investment incomea		0.42			0.26			0.19			0.32			0.17
Net realized and unrealized gain (loss)		9.55			4.26			1.72			(1.95	)		(1.36	)
Total from investment operations		9.97			4.52			1.91			(1.63	)		(1.19	)
Less distributions from:
Net investment income		(0.28	)		(0.21	)		(0.52	)		(0.07	)		(0.15	)
Net realized gain		–			–			–			–			(0.03	)
Total distributions		(0.28	)		(0.21	)		(0.52	)		(0.07	)		(0.18	)
Net asset value, end of year	$	29.04		$	19.35		$	15.04		$	13.65		$	15.35
Total return		51.77	%		30.28	%		14.60	%		(10.67	)%		(7.02	)%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	255,557		$	129,623		$	60,155		$	70,994		$	46,056
Ratio of expenses to average net assets		0.57	%		0.78	%		0.84	%		0.84	%		0.84	%
Ratio of net investment income to average net assets		1.70	%		1.40	%		1.43	%		2.05	%		1.12	%
Portfolio turnover rateb		9	%		12	%		13	%		8	%		34	%

^a Based on average shares outstanding throughout each period.

^b Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

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Financial Highlights

(For a share outstanding throughout each period)

	iShares MSCI Netherlands Index Fund
	Year ended Aug. 31, 2005			Year ended Aug. 31, 2004			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001
Net asset value, beginning of year	$	15.70		$	14.31		$	14.69		$	18.59		$	23.53
Income from investment operations:
Net investment incomea		0.57			0.39			0.30			0.25			0.28
Net realized and unrealized gain (loss)		3.09			1.37			(0.43	)		(4.11	)		(4.94	)
Total from investment operations		3.66			1.76			(0.13	)		(3.86	)		(4.66	)
Less distributions from:
Net investment income		(0.26	)		(0.37	)		(0.25	)		(0.04	)		(0.28	)
Total distributions		(0.26	)		(0.37	)		(0.25	)		(0.04	)		(0.28	)
Net asset value, end of year	$	19.10		$	15.70		$	14.31		$	14.69		$	18.59
Total return		23.40	%		12.28	%		(0.78	)%		(20.79	)%		(19.83	)%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	63,974		$	28,265		$	18,599		$	19,103		$	24,184
Ratio of expenses to average net assets		0.57	%		0.78	%		0.84	%		0.84	%		0.84	%
Ratio of net investment income to average net assets		3.13	%		2.45	%		2.37	%		1.48	%		1.34	%
Portfolio turnover rateb		6	%		9	%		18	%		15	%		35	%

^a Based on average shares outstanding throughout each period.

^b Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

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Financial Highlights

(For a share outstanding throughout each period)

	iShares MSCI Pacific ex-Japan Index Fund
	Year ended Aug. 31, 2005			Year ended Aug. 31, 2004			Year ended Aug. 31, 2003			Period from Oct. 25, 2001a to Aug. 31, 2002
Net asset value, beginning of period	$	75.73		$	62.03		$	52.51		$	50.03
Income from investment operations:
Net investment incomeb		3.70			2.68			1.87			1.35
Net realized and unrealized gain		21.15			12.53			8.53			1.40
Total from investment operations		24.85			15.21			10.40			2.75
Less distributions from:
Net investment income		(3.01	)		(1.51	)		(0.88	)		(0.27	)
Total distributions		(3.01	)		(1.51	)		(0.88	)		(0.27	)
Net asset value, end of period	$	97.57		$	75.73		$	62.03		$	52.51
Total return		33.27	%		24.74	%		20.15	%		5.51	%e
Ratios/Supplemental data:
Net assets, end of period (000s)	$	1,522,107		$	651,250		$	223,298		$	105,029
Ratio of expenses to average net assetsc		0.50	%		0.50	%		0.50	%		0.50	%
Ratio of net investment income to average net assetsc		4.09	%		3.68	%		3.47	%		2.87	%
Portfolio turnover rated		16	%		8	%		8	%		5	%

^a Commencement of operations.

^b Based on average shares outstanding throughout each period.

^c Annualized for periods of less than one year.

^d Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

^e Not annualized.

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Financial Highlights

(For a share outstanding throughout each period)

	iShares MSCI Singapore Index Fund
	Year ended Aug. 31, 2005			Year ended Aug. 31, 2004			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001
Net asset value, beginning of year	$	6.52		$	5.38		$	5.01		$	5.34		$	7.58
Income from investment operations:
Net investment incomea		0.38			0.22			0.12			0.07			0.07
Net realized and unrealized gain (loss)		1.15			1.04			0.33			(0.36	)		(2.16	)
Total from investment operations		1.53			1.26			0.45			(0.29	)		(2.09	)
Less distributions from:
Net investment income		(0.28	)		(0.12	)		(0.08	)		(0.04	)		(0.07	)
Net realized gain		–			–			–			–			(0.06	)
Return of capital		–			–			–			–			(0.02	)
Total distributions		(0.28	)		(0.12	)		(0.08	)		(0.04	)		(0.15	)
Net asset value, end of year	$	7.77		$	6.52		$	5.38		$	5.01		$	5.34
Total return		24.06	%		23.47	%		9.30	%		(5.42	)%		(27.89	)%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	341,137		$	170,047		$	108,202		$	88,126		$	73,704
Ratio of expenses to average net assets		0.57	%		0.79	%		0.84	%		0.84	%		0.84	%
Ratio of net investment income to average net assets		5.19	%		3.50	%		2.67	%		1.44	%		1.15	%
Portfolio turnover rateb		8	%		9	%		14	%		9	%		32	%

^a Based on average shares outstanding throughout each period.

^b Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

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Financial Highlights

(For a share outstanding throughout each period)

	iShares MSCI South Africa Index Fund
	Year ended Aug. 31, 2005			Year ended Aug. 31, 2004			Period from Feb. 3, 2003a to Aug. 31, 2003
Net asset value, beginning of period	$	59.92		$	46.81		$	38.72
Income from investment operations:
Net investment incomeb		1.92			1.23			0.89
Net realized and unrealized gain		22.36			13.24			7.20
Total from investment operations		24.28			14.47			8.09
Less distributions from:
Net investment income		(1.21	)		(1.36	)		–
Total distributions		(1.21	)		(1.36	)		–
Net asset value, end of period	$	82.99		$	59.92		$	46.81
Total return		40.62	%		31.30	%		20.89	%e
Ratios/Supplemental data:
Net assets, end of period (000s)	$	153,530		$	92,882		$	81,914
Ratio of expenses to average net assetsc		0.74	%		0.95	%		0.99	%
Ratio of net investment income to average net assetsc		2.62	%		2.23	%		3.86	%
Portfolio turnover rated		32	%		13	%		17	%

^a Commencement of operations.

^b Based on average shares outstanding throughout each period.

^c Annualized for periods of less than one year.

^d Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

^e Not annualized.

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Financial Highlights

(For a share outstanding throughout each period)

	iShares MSCI South Korea Index Fund
	Year ended Aug. 31, 2005			Year ended Aug. 31, 2004			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001
Net asset value, beginning of year	$	24.17		$	23.06		$	21.17		$	13.25		$	18.16
Income from investment operations:
Net investment income (loss)a		0.46			0.22			0.19			(0.00	)c		0.09
Net realized and unrealized gain (loss)		10.22			1.13			1.70			7.92			(4.90	)
Total from investment operations		10.68			1.35			1.89			7.92			(4.81	)
Less distributions from:
Net investment income		(0.10	)		(0.24	)		–			–			(0.03	)
Return of capital		–			–			–			–			(0.07	)
Total distributions		(0.10	)		(0.24	)		–			–			(0.10	)
Net asset value, end of year	$	34.75		$	24.17		$	23.06		$	21.17		$	13.25
Total return		44.29	%		5.83	%		8.93	%		59.77	%		(26.49	)%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	698,455		$	315,464		$	154,486		$	96,336		$	37,767
Ratio of expenses to average net assets		0.74	%		0.94	%		0.99	%		1.00	%		1.01	%
Ratio of expenses to average net assets exclusive of foreign taxes		0.74	%		0.94	%		0.99	%		0.99	%		0.99	%
Ratio of net investment income (loss) to average net assets		1.49	%		0.87	%		0.98	%		(0.01	)%		0.64	%
Portfolio turnover rateb		30	%		29	%		39	%		25	%		39	%

^a Based on average shares outstanding throughout each period.

^b Portfolio turnover rates include portfolio transactions that are executed as a result of the Fund processing capital share transactions in Creation Units solely for cash in U.S. dollars. Excluding such transactions, the portfolio turnover rate for the year ended August 31, 2005 would have been 9%.

^c Rounds to less than $0.01.

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Financial Highlights

(For a share outstanding throughout each period)

	iShares MSCI Spain Index Fund
	Year ended Aug. 31, 2005			Year ended Aug. 31, 2004			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001
Net asset value, beginning of year	$	27.55		$	22.39		$	17.95		$	21.33		$	24.19
Income from investment operations:
Net investment incomea		0.79			0.44			0.24			0.17			0.19
Net realized and unrealized gain (loss)		7.97			4.99			4.36			(3.55	)		(2.89	)
Total from investment operations		8.76			5.43			4.60			(3.38	)		(2.70	)
Less distributions from:
Net investment income		(0.61	)		(0.27	)		(0.16	)		–			(0.16	)
Return of capital		–			–			–			–			(0.00	)c
Total distributions		(0.61	)		(0.27	)		(0.16	)		–			(0.16	)
Net asset value, end of year	$	35.70		$	27.55		$	22.39		$	17.95		$	21.33
Total return		31.85	%		24.28	%		25.81	%		(15.85	)%		(11.17	)%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	66,945		$	45,456		$	50,372		$	18,850		$	27,198
Ratio of expenses to average net assets		0.57	%		0.80	%		0.84	%		0.84	%		0.84	%
Ratio of net investment income to average net assets		2.33	%		1.64	%		1.22	%		0.85	%		0.82	%
Portfolio turnover rateb		8	%		6	%		17	%		14	%		26	%

^a Based on average shares outstanding throughout each period.

^b Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

^c Rounds to less than $0.01.

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Financial Highlights

(For a share outstanding throughout each period)

	iShares MSCI Sweden Index Fund
	Year ended Aug. 31, 2005			Year ended Aug. 31, 2004			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001
Net asset value, beginning of year	$	16.82		$	12.59		$	9.88		$	12.88		$	24.38
Income from investment operations:
Net investment incomea		0.46			0.28			0.25			0.12			0.07
Net realized and unrealized gain (loss)		4.45			4.20			2.58			(3.12	)		(11.52	)
Total from investment operations		4.91			4.48			2.83			(3.00	)		(11.45	)
Less distributions from:
Net investment income		(0.15	)		(0.25	)		(0.12	)		–			(0.05	)
Return of capital		–			–			–			–			(0.00	)c
Total distributions		(0.15	)		(0.25	)		(0.12	)		–			(0.05	)
Net asset value, end of year	$	21.58		$	16.82		$	12.59		$	9.88		$	12.88
Total return		29.21	%		35.81	%		29.04	%		(23.29	)%		(46.99	)%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	61,513		$	27,758		$	16,992		$	8,154		$	10,630
Ratio of expenses to average net assets		0.58	%		0.92	%		0.84	%		0.84	%		0.84	%
Ratio of expenses to average net assets exclusive of foreign taxes		0.57	%		0.79	%		n/a			n/a			n/a
Ratio of net investment income to average net assets		2.28	%		1.74	%		2.44	%		0.98	%		0.40	%
Portfolio turnover rateb		6	%		9	%		12	%		31	%		43	%

^a Based on average shares outstanding throughout each period.

^b Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

^c Rounds to less than $0.01.

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Financial Highlights

(For a share outstanding throughout each period)

	iShares MSCI Switzerland Index Fund
	Year ended Aug. 31, 2005			Year ended Aug. 31, 2004			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001
Net asset value, beginning of year	$	14.58		$	12.23		$	11.59		$	12.95		$	15.54
Income from investment operations:
Net investment incomea		0.22			0.09			0.05			0.03			0.04
Net realized and unrealized gain (loss)		2.92			2.31			0.62			(1.38	)		(2.54	)
Total from investment operations		3.14			2.40			0.67			(1.35	)		(2.50	)
Less distributions from:
Net investment income		(0.09	)		(0.05	)		(0.03	)		(0.01	)		(0.05	)
Net realized gain		–			–			–			–			(0.04	)
Total distributions		(0.09	)		(0.05	)		(0.03	)		(0.01	)		(0.09	)
Net asset value, end of year	$	17.63		$	14.58		$	12.23		$	11.59		$	12.95
Total return		21.54	%		19.56	%		5.89	%		(10.47	)%		(16.08	)%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	79,324		$	41,920		$	33,643		$	31,883		$	32,384
Ratio of expenses to average net assets		0.57	%		0.79	%		0.84	%		0.84	%		0.84	%
Ratio of net investment income to average net assets		1.34	%		0.64	%		0.43	%		0.20	%		0.29	%
Portfolio turnover rateb		5	%		4	%		10	%		12	%		34	%

^a Based on average shares outstanding throughout each period.

^b Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

Financial Highlights

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Financial Highlights

(For a share outstanding throughout each period)

	iShares MSCI Taiwan Index Fund
	Year ended Aug. 31, 2005			Year ended Aug. 31, 2004			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001
Net asset value, beginning of year	$	10.66		$	10.79		$	8.82		$	9.01		$	16.41
Income from investment operations:
Net investment income (loss)a		0.27			0.14			0.04			(0.03	)		(0.03	)
Net realized and unrealized gain (loss)		0.72			(0.25	)		1.93			(0.16	)		(7.37	)
Total from investment operations		0.99			(0.11	)		1.97			(0.19	)		(7.40	)
Less distributions from:
Net investment income		(0.08	)		(0.02	)		–			–			–
Total distributions		(0.08	)		(0.02	)		–			–			–
Net asset value, end of year	$	11.57		$	10.66		$	10.79		$	8.82		$	9.01
Total return		9.28	%		(1.10	)%		22.45	%		(2.11	)%		(45.09	)%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	752,640		$	390,228		$	234,727		$	142,043		$	110,786
Ratio of expenses to average net assets		1.03	%		1.19	%c		1.31	%		1.33	%		1.60	%
Ratio of expenses to average net assets exclusive of foreign taxes		0.74	%		0.92	%		0.99	%		0.99	%		0.99	%
Ratio of net investment income (loss) to average net assets		2.34	%		1.23	%d		0.43	%		(0.28	)%		(0.23	)%
Portfolio turnover rateb		20	%		19	%		15	%		11	%		30	%

^a Based on average shares outstanding throughout each period.

^b Portfolio turnover rates include portfolio transactions that are executed as a result of the Fund processing capital share transactions in Creation Units solely for cash in U.S. dollars. Excluding such transactions, the portfolio turnover rate for the year ended August 31, 2005 would have been 10%.

^c Ratio of expenses to average net assets prior to voluntary reimbursed distribution fees for the year ended August 31, 2004 was 1.22%.

^d Ratio of net investment income to average net assets prior to voluntary reimbursed distribution fees for the year ended August 31, 2004 was 1.21%.

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Financial Highlights

(For a share outstanding throughout each period)

	iShares MSCI United Kingdom Index Fund
	Year ended Aug. 31, 2005			Year ended Aug. 31, 2004			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001
Net asset value, beginning of year	$	15.72		$	13.00		$	12.77		$	15.11		$	18.35
Income from investment operations:
Net investment incomea		0.60			0.48			0.39			0.48			0.26
Net realized and unrealized gain (loss)		2.76			2.72			0.12			(2.60	)		(3.23	)
Total from investment operations		3.36			3.20			0.51			(2.12	)		(2.97	)
Less distributions from:
Net investment income		(0.34	)		(0.48	)		(0.28	)		(0.22	)		(0.25	)
Net realized gain		–			–			–			–			(0.02	)
Total distributions		(0.34	)		(0.48	)		(0.28	)		(0.22	)		(0.27	)
Net asset value, end of year	$	18.74		$	15.72		$	13.00		$	12.77		$	15.11
Total return		21.53	%		24.77	%		4.20	%		(14.19	)%		(16.20	)%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	464,850		$	452,870		$	150,809		$	120,067		$	117,883
Ratio of expenses to average net assets		0.57	%		0.77	%		0.84	%		0.84	%		0.84	%
Ratio of net investment income to average net assets		3.39	%		3.11	%		3.23	%		3.39	%		1.57	%
Portfolio turnover rateb		11	%		6	%		6	%		14	%		30	%

^a Based on average shares outstanding throughout each period.

^b Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

Financial Highlights

page 111

Index Provider

MSCI is a leading provider of global indices and benchmark-related products and services to investors worldwide. It is headquartered in New York, and conducts business worldwide with operations in Geneva, London, Hong Kong, Tokyo, Singapore, Sydney, Frankfurt, Milan, Paris, Princeton and San Francisco. Morgan Stanley, a global financial services firm and a market leader in securities, asset management, and credit services, is the majority shareholder of MSCI, and The Capital Group Companies, Inc., a global investment management group, is the minority shareholder. MSCI is not affiliated with the Company, BGI, BGFA, Investors Bank, the Distributor, AMEX, or the NYSE.

BGI has entered into a license agreement with MSCI to use the Underlying Indices. BGI is sub-licensing rights in the Underlying Indices to the Company at no charge.

i  Shares

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Disclaimers

The iShares MSCI Index Funds (“iShares Funds”) are not sponsored, endorsed, sold or promoted by MSCI or any affiliate of MSCI. Neither MSCI, any of its affiliates nor any other party involved in making or compiling the MSCI Indices makes any representation or warranty, express or implied, to the owners of the iShares Funds or any member of the public regarding the advisability of investing in securities generally or in the iShares Funds particularly or the ability of the MSCI Indices to track general stock market performance. MSCI is the licensor of certain trademarks, service marks and trade names of MSCI and of the MSCI Indices, which are determined, composed and calculated by MSCI without regard to BGI, BGFA or the iShares Funds. MSCI has no obligation to take the needs of BGI, BGFA or the owners of the iShares Funds into consideration in determining, composing or calculating the MSCI Indices. MSCI is not responsible for and has not participated in the determination of the prices and amount of shares of the iShares Funds or the timing of the issuance or sale of such shares. Neither MSCI, any of its affiliates nor any other party involved in making or compiling the MSCI Indices has any obligation or liability to owners of the iShares Funds in connection with the administration of the iShares Funds, or the marketing or trading of shares of the iShares Funds. Although MSCI obtains information for inclusion in or for use in the calculation of the MSCI Indices from sources which MSCI considers reliable, neither MSCI, any of its affiliates nor any other party involved in making or compiling the MSCI Indices guarantees the accuracy and or the completeness of the MSCI Indices or any data included therein. Neither MSCI, any of its affiliates nor any other party involved in making or compiling the MSCI Indices makes any warranty, express or implied, as to results to be obtained by BGI, BGFA, the owners of the iShares Funds, or any other person or entity from the use of the MSCI indices or any data included therein in connection with the rights licensed hereunder or for any other use. Neither MSCI, any of its affiliates nor any other party involved in making or compiling the MSCI Indices shall have any liability for any errors, omissions or interruptions of or in connection with the MSCI Indices or any data included therein. Neither MSCI, any of its affiliates nor any other party involved in making or compiling the MSCI Indices makes any express or implied warranties, and MSCI hereby expressly disclaims all warranties of merchantability or fitness for a particular purpose with respect to the MSCI Indices or any data included therein. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any other party involved in making or compiling the MSCI Indices have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.

No purchaser, seller or holder of the iShares Funds, or any other person or entity, should use or refer to any MSCI trade name, trademark or service mark to sponsor, endorse, market or promote iShares without first contacting MSCI to determine whether MSCI’s permission is required. Under no circumstances may any person or entity claim any affiliation with MSCI without the prior written permission of MSCI.

Shares of the Company are not sponsored, endorsed or promoted by the AMEX. The AMEX makes no representation or warranty, express or implied, to the owners of the shares of any iShares Fund or any member of the public regarding the ability of any iShares Fund to track the total return performance of any MSCI Index or the ability of any MSCI Index identified herein to track stock market performance. The MSCI Indices identified herein are determined, composed and calculated by MSCI without regard to any iShares Fund. The AMEX is not responsible for, nor has it participated in, the determination of the compilation or the calculation of any MSCI Index, nor in the determination of the timing of, prices of, or quantities of the shares of any iShares Fund to be issued, nor in the determination or calculation of the equation by which the shares are redeemable. The AMEX has no obligation or liability to owners of the shares of any iShares Fund in connection with the administration, marketing or trading of the shares of the Fund.

Disclaimers

page 113

The AMEX does not guarantee the accuracy and/or the completeness of any MSCI Index or any data included therein. The AMEX makes no warranty, express or implied, as to results to be obtained by the Company on behalf of its iShares Funds as licensee, licensee’s customers and counterparties, owners of the shares of the Company, or any other person or entity from the use of the subject indices or any data included therein in connection with the rights licensed as described herein or for any other use. The AMEX makes no express or implied warranties, and hereby expressly disclaims all warranties of merchantability or fitness for a particular purpose with respect to any MSCI Index or any data included therein. Without limiting any of the foregoing, in no event shall the AMEX have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.

Shares of the Company are not sponsored, endorsed or promoted by the NYSE. The NYSE makes no representation or warranty, express or implied, to the owners of the shares of any Fund or any member of the public regarding the ability of a Fund to track the total return performance of any Underlying Index or the ability of any Underlying Index identified herein to track stock market performance. The MSCI Indices identified herein are determined, composed and calculated by MSCI without regard to the shares of any Fund. The NYSE is not responsible for, nor has it participated in, the determination of the compilation or the calculation of the MCSI Indices, nor in the determination of the timing of, prices of, or quantities of the shares of any Fund to be issued, nor in the determination or calculation of the equation by which the shares are redeemable. The NYSE has no obligation or liability to owners of the shares of any Fund in connection with the administration, marketing or trading of the shares of the Fund.

The NYSE does not guarantee the accuracy and/or the completeness of any Underlying Index or any data included therein. The NYSE makes no warranty, express or implied, as to results to be obtained by the Company on behalf of its Funds as licensee, licensee’s customers and counterparties, owners of the shares, or any other person or entity from the use of the subject indices or any data included therein in connection with the rights licensed as described herein or for any other use. The NYSE makes no express or implied warranties, and hereby expressly disclaims all warranties of merchantability or fitness for a particular purpose with respect to any Underlying Index or any data included therein. Without limiting any of the foregoing, in no event shall the NYSE have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.

BGFA does not guarantee the accuracy and/or the completeness of the MSCI Indexes or any data included therein and BGFA shall have no liability for any errors, omissions, or interruptions therein.

BGFA makes no warranty, express or implied, as to results to be obtained by the iShares Funds, to the owners of the shares of any iShares Fund, or to any other person or entity, from the use of any MSCI Index or any data included therein. BGFA makes no express or implied warranties, and expressly disclaims all warranties of merchantability or fitness for a particular purpose or use with respect to any MSCI Index or any data included therein. Without limiting any of the foregoing, in no event shall BGFA have any liability for any special, punitive, direct, indirect, or consequential damages (including lost profits), even if notified of the possibility of such damages.

i  Shares

page 114

iShares, Inc.

Supplemental Information

I. Premium/Discount Information

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

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

The following information shows the frequency distributions of premiums and discounts for each of the iShares Funds.

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

iShares Supplemental Information

page 115

iShares MSCI Australia Index Fund

Period Covered: January 1, 2004 Through September 30, 2005

	Number of Days	% of Total Days
Greater than 1.5%	5	1.13	%
Greater than 1.0% and Less than 1.5%	39	8.84
Greater than 0.5% and Less than 1.0%	115	26.08
Between 0.5% and -0.5%	239	54.20
Less than -0.5% and Greater than -1.0%	30	6.80
Less than -1.0% and Greater than -1.5%	9	2.04
Less than -1.5%	4	0.91
	441	100.00	%

iShares MSCI Austria Index Fund

Period Covered: January 1, 2004 Through September 30, 2005

	Number of Days	% of Total Days
Greater than 2.0%	1	0.23	%
Greater than 1.5% and Less than 2.0%	15	3.40
Greater than 1.0% and Less than 1.5%	33	7.48
Greater than 0.5% and Less than 1.0%	98	22.22
Between 0.5% and -0.5%	239	54.20
Less than -0.5% and Greater than -1.0%	39	8.84
Less than -1.0% and Greater than -1.5%	13	2.95
Less than -1.5%	3	0.68
	441	100.00	%

iShares MSCI Belgium Index Fund

Period Covered: January 1, 2004 Through September 30, 2005

	Number of Days	% of Total Days
Greater than 2.5%	3	0.68	%
Greater than 2.0% and Less than 2.5%	7	1.59
Greater than 1.5% and Less than 2.0%	10	2.27
Greater than 1.0% and Less than 1.5%	30	6.80
Greater than 0.5% and Less than 1.0%	80	18.14
Between 0.5% and -0.5%	261	59.18
Less than -0.5% and Greater than -1.0%	42	9.52
Less than -1.0% and Greater than -1.5%	7	1.59
Less than -1.5%	1	0.23
	441	100.00	%

i  Shares

page 116

iShares MSCI Brazil Index Fund

Period Covered: January 1, 2004 Through September 30, 2005

	Number of Days	% of Total Days
Greater than 1.5%	1	0.23	%
Greater than 1.0% and Less than 1.5%	9	2.04
Greater than 0.5% and Less than 1.0%	28	6.35
Between 0.5% and -0.5%	340	77.10
Less than -0.5% and Greater than -1.0%	51	11.56
Less than -1.0% and Greater than -1.5%	6	1.36
Less than -1.5% and Greater than -2.0%	5	1.13
Less than -2.0%	1	0.23
	441	100.00	%

iShares MSCI Canada Index Fund

Period Covered: January 1, 2004 Through September 30, 2005

	Number of Days	% of Total Days
Greater than 1.5%	1	0.23	%
Greater than 1.0% and Less than 1.5%	5	1.13
Greater than 0.5% and Less than 1.0%	77	17.46
Between 0.5% and -0.5%	345	78.23
Less than -0.5%	13	2.95
	441	100.00	%

iShares MSCI Emerging Markets Index Fund

Period Covered: January 1, 2004 Through September 30, 2005

	Number of Days	% of Total Days
Greater than 1.5%	7	1.59	%
Greater than 1.0% and Less than 1.5%	19	4.31
Greater than 0.5% and Less than 1.0%	117	26.53
Between 0.5% and -0.5%	238	53.97
Less than -0.5% and Greater than -1.0%	43	9.75
Less than -1.0% and Greater than -1.5%	11	2.49
Less than -1.5%	6	1.36
	441	100.00	%

iShares Supplemental Information

page 117

iShares MSCI EMU Index Fund

Period Covered: January 1, 2004 Through September 30, 2005

	Number of Days	% of Total Days
Greater than 2.0%	1	0.23	%
Greater than 1.5% and Less than 2.0%	5	1.13
Greater than 1.0% and Less than 1.5%	13	2.95
Greater than 0.5% and Less than 1.0%	84	19.05
Between 0.5% and -0.5%	291	65.98
Less than -0.5% and Greater than -1.0%	35	7.94
Less than -1.0% and Greater than -1.5%	9	2.04
Less than -1.5%	3	0.68
	441	100.00	%

iShares MSCI France Index Fund

Period Covered: January 1, 2004 Through September 30, 2005

	Number of Days	% of Total Days
Greater than 1.0%	8	1.81	%
Greater than 0.5% and Less than 1.0%	51	11.56
Between 0.5% and -0.5%	338	76.66
Less than -0.5% and Greater than -1.0%	33	7.48
Less than -1.0% and Greater than -1.5%	9	2.04
Less than -1.5%	2	0.45
	441	100.00	%

iShares MSCI Germany Index Fund

Period Covered: January 1, 2004 Through September 30, 2005

	Number of Days	% of Total Days
Greater than 1.5%	3	0.68	%
Greater than 1.0% and Less than 1.5%	12	2.72
Greater than 0.5% and Less than 1.0%	66	14.97
Between 0.5% and -0.5%	310	70.30
Less than -0.5% and Greater than -1.0%	33	7.48
Less than -1.0% and Greater than -1.5%	14	3.17
Less than -1.5%	3	0.68
	441	100.00	%

i  Shares

page 118

iShares MSCI Hong Kong Index Fund

Period Covered: January 1, 2004 Through September 30, 2005

	Number of Days	% of Total Days
Greater than 2.0%	3	0.68	%
Greater than 1.5% and Less than 2.0%	12	2.72
Greater than 1.0% and Less than 1.5%	32	7.26
Greater than 0.5% and Less than 1.0%	87	19.73
Between 0.5% and -0.5%	223	50.56
Less than -0.5% and Greater than -1.0%	47	10.66
Less than -1.0% and Greater than -1.5%	20	4.54
Less than -1.5% and Greater than -2.0%	11	2.49
Less than -2.0%	6	1.36
	441	100.00	%

iShares MSCI Italy Index Fund

Period Covered: January 1, 2004 Through September 30, 2005

	Number of Days	% of Total Days
Greater than 1.0%	7	1.59	%
Greater than 0.5% and Less than 1.0%	37	8.39
Between 0.5% and -0.5%	350	79.36
Less than -0.5% and Greater than -1.0%	34	7.71
Less than -1.0% and Greater than -2.0%	9	2.04
Less than -2.0%	4	0.91
	441	100.00	%

iShares MSCI Japan Index Fund

Period Covered: January 1, 2004 Through September 30, 2005

	Number of Days	% of Total Days
Greater than 2.0%	2	0.45	%
Greater than 1.5% and Less than 2.0%	17	3.85
Greater than 1.0% and Less than 1.5%	40	9.07
Greater than 0.5% and Less than 1.0%	85	19.27
Between 0.5% and -0.5%	221	50.14
Less than -0.5% and Greater than -1.0%	54	12.24
Less than -1.0% and Greater than -1.5%	11	2.49
Less than -1.5% and Greater than -2.0%	8	1.81
Less than -2.0%	3	0.68
	441	100.00	%

iShares Supplemental Information

page 119

iShares MSCI Malaysia Index Fund

Period Covered: January 1, 2004 Through September 30, 2005

	Number of Days	% of Total Days
Greater than 2.5%	5	1.13	%
Greater than 2.0% and Less than 2.5%	20	4.54
Greater than 1.5% and Less than 2.0%	36	8.16
Greater than 1.0% and Less than 1.5%	72	16.33
Greater than 0.5% and Less than 1.0%	84	19.05
Between 0.5% and -0.5%	109	24.72
Less than -0.5% and Greater than -1.0%	36	8.16
Less than -1.0% and Greater than -1.5%	49	11.11
Less than -1.5% and Greater than -2.0%	15	3.40
Less than -2.0% and Greater than -2.5%	11	2.49
Less than -2.5%	4	0.91
	441	100.00	%

iShares MSCI Mexico Index Fund

Period Covered: January 1, 2004 Through September 30, 2005

	Number of Days	% of Total Days
Greater than 1.5%	1	0.23	%
Greater than 1.0% and Less than 1.5%	8	1.81
Greater than 0.5% and Less than 1.0%	67	15.19
Between 0.5% and -0.5%	300	68.03
Less than -0.5% and Greater than -1.0%	50	11.34
Less than -1.0% and Greater than -1.5%	13	2.95
Less than -1.5%	2	0.45
	441	100.00	%

iShares MSCI Netherlands Index Fund

Period Covered: January 1, 2004 Through September 30, 2005

	Number of Days	% of Total Days
Greater than 1.5%	3	0.68	%
Greater than 1.0% and Less than 1.5%	20	4.54
Greater than 0.5% and Less than 1.0%	97	22.00
Between 0.5% and -0.5%	279	63.26
Less than -0.5% and Greater than -1.0%	33	7.48
Less than -1.0% and Greater than -1.5%	7	1.59
Less than -1.5%	2	0.45
	441	100.00	%

i  Shares

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iShares MSCI Pacific Ex-Japan Index Fund

Period Covered: January 1, 2004 Through September 30, 2005

	Number of Days	% of Total Days
Greater than 2.0%	1	0.23	%
Greater than 1.5% and Less than 2.0%	10	2.27
Greater than 1.0% and Less than 1.5%	45	10.20
Greater than 0.5% and Less than 1.0%	110	24.95
Between 0.5% and -0.5%	243	55.1
Less than -0.5% and Greater than -1.0%	25	5.67
Less than -1.0% and Greater than -1.5%	5	1.13
Less than -1.5%	2	0.45
	441	100.00	%

iShares MSCI Singapore Index Fund

Period Covered: January 1, 2004 Through September 30, 2005

	Number of Days	% of Total Days
Greater than 2.5%	2	0.45	%
Greater than 2.0% and Less than 2.5%	11	2.49
Greater than 1.5% and Less than 2.0%	26	5.90
Greater than 1.0% and Less than 1.5%	70	15.87
Greater than 0.5% and Less than 1.0%	99	22.45
Between 0.5% and -0.5%	162	36.74
Less than -0.5% and Greater than -1.0%	36	8.16
Less than -1.0% and Greater than -1.5%	22	4.99
Less than -1.5% and Greater than -2.0%	7	1.59
Less than -2.0% and Greater than -2.5%	5	1.13
Less than -2.5%	1	0.23
	441	100.00	%

iShares MSCI South Africa Index Fund

Period Covered: January 1, 2004 Through September 30, 2005

	Number of Days	% of Total Days
Greater than 2.0%	3	0.68	%
Greater than 1.5% and Less than 2.0%	7	1.59
Greater than 1.0% and Less than 1.5%	33	7.48
Greater than 0.5% and Less than 1.0%	90	20.41
Between 0.5% and -0.5%	258	58.50
Less than -0.5% and Greater than -1.0%	29	6.58
Less than -1.0% and Greater than -1.5%	13	2.95
Less than -1.5% and Greater than -2.0%	5	1.13
Less than -2.0%	3	0.68
	441	100.00	%

iShares Supplemental Information

page 121

iShares MSCI South Korea Index Fund

Period Covered: January 1, 2004 Through September 30, 2005

	Number of Days	% of Total Days
Greater than 2.5%	4	0.91	%
Greater than 2.0% and Less than 2.5%	9	2.04
Greater than 1.5% and Less than 2.0%	20	4.54
Greater than 1.0% and Less than 1.5%	59	13.38
Greater than 0.5% and Less than 1.0%	92	20.86
Between 0.5% and -0.5%	171	38.80
Less than -0.5% and Greater than -1.0%	47	10.63
Less than -1.0% and Greater than -1.5%	27	6.12
Less than -1.5% and Greater than -2.0%	7	1.59
Less than -2.0%	5	1.13
	441	100.00	%

iShares MSCI Spain Index Fund

Period Covered: January 1, 2004 Through September 30, 2005

	Number of Days	% of Total Days
Greater than 1.5%	4	0.91	%
Greater than 1.0% and Less than 1.5%	9	2.04
Greater than 0.5% and Less than 1.0%	66	14.97
Between 0.5% and -0.5%	311	70.52
Less than -0.5% and Greater than -1.0%	39	8.84
Less than -1.0% and Greater than -1.5%	10	2.27
Less than -1.5%	2	0.45
	441	100.00	%

iShares MSCI Sweden Index Fund

Period Covered: January 1, 2004 Through September 30, 2005

	Number of Days	% of Total Days
Greater than 2.5%	3	0.68	%
Greater than 2.0% and Less than 2.5%	7	1.58
Greater than 1.5% and Less than 2.0%	10	2.27
Greater than 1.0% and Less than 1.5%	24	5.44
Greater than 0.5% and Less than 1.0%	86	19.50
Between 0.5% and -0.5%	241	54.55
Less than -0.5% and Greater than -1.0%	50	11.34
Less than -1.0% and Greater than -1.5%	16	3.83
Less than -1.5%	4	0.81
	441	100.00	%

i  Shares

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iShares MSCI Switzerland Index Fund

Period Covered: January 1, 2004 Through September 30, 2005

	Number of Days	% of Total Days
Greater than 2.0%	4	0.91
Greater than 1.5% and Less than 2.0%	14	3.17
Greater than 1.0% and Less than 1.5%	35	7.94
Greater than 0.5% and Less than 1.0%	86	19.50
Between 0.5% and -0.5%	263	59.65
Less than -0.5% and Greater than -1.0%	31	7.03
Less than -1.0% and Greater than -1.5%	6	1.38
Less than -1.5%	2	0.45
	441	100.00	%

iShares MSCI Taiwan Index Fund

Period Covered: January 1, 2004 Through September 30, 2005

	Number of Days	% of Total Days
Greater than 3.5%	2	0.45	%
Greater than 2.5% and Less than 3.5%	5	1.13
Greater than 2.0% and Less than 2.5%	10	2.27
Greater than 1.5% and Less than 2.0%	33	7.48
Greater than 1.0% and Less than 1.5%	34	7.71
Greater than 0.5% and Less than 1.0%	60	13.61
Between 0.5% and -0.5%	144	32.64
Less than -0.5% and Greater than -1.0%	69	15.65
Less than -1.0% and Greater than -1.5%	38	8.62
Less than -1.5% and Greater than -2.0%	26	5.90
Less than -2.0% and Greater than -2.5%	7	1.59
Less than -2.5% and Greater than -3.0%	9	2.04
Less than -3.0%	4	0.91
	441	100.00	%

iShares MSCI United Kingdom Index Fund

Period Covered: January 1, 2004 Through September 30, 2005

	Number of Days	% of Total Days
Greater than 2.0%	2	0.45
Greater than 1.5% and Less than 2.0%	15	3.40
Greater than 1.0% and Less than 1.5%	73	16.55
Greater than 0.5% and Less than 1.0%	135	30.61
Between 0.5% and -0.5%	188	42.65
Less than -0.5% and Greater than -1.0%	21	4.76
Less than -1.0% and Greater than -1.5%	5	1.13
Less than -1.5%	2	0.45
	441	100.00	%

iShares Supplemental Information

page 123

II. Total Return Information

The tables on the following pages present information about the total return of each Fund’s Underlying Index and the total return of each Fund. The information presented for each Fund is for the applicable period ended August 31, 2005.

“Average annual total returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative total returns” represent the total change in value of an investment over the periods indicated.

Each Fund’s per share NAV is the value of one share of each Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of each Fund, and the market return is based on the market price per share of each Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the national securities exchange on which the shares of the Funds are listed for trading, as of the time that the Funds’ NAV is calculated. Since shares of each Fund did not trade in the secondary market until several days after each Fund’s inception, for the period from inception to the first day of secondary market trading in shares of each Fund, the NAV of each Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in each Fund at Market Price and NAV, respectively.

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

	Average Annual Total Returns
	Year Ended 8/31/05						5 Years Ended 8/31/05						Inception to 8/31/05*
iShares MSCI Index Fund	NAV		Market		Index		NAV		Market		Index		NAV		Market		Index
Australia	39.58	%	41.19	%	38.98	%	15.82	%	15.89	%	15.29	%	9.58	%	9.68	%	9.78	%
Austria	56.82	%	56.49	%	61.52	%	29.43	%	29.29	%	29.98	%	11.46	%	11.56	%	12.64	%
Belgium	30.22	%	29.79	%	31.24	%	10.32	%	10.33	%	7.98	%	8.61	%	8.66	%	8.82	%
Canada	43.35	%	43.23	%	43.69	%	4.93	%	5.04	%	3.78	%	12.80	%	12.87	%	13.43	%
France	26.13	%	25.94	%	26.49	%	0.06	%	0.10	%	0.37	%	10.02	%	10.06	%	10.25	%
Germany	28.89	%	29.56	%	29.31	%	(0.45	)%	(0.33	)%	(0.27	)%	6.32	%	6.43	%	6.75	%
Hong Kong	21.96	%	22.17	%	22.59	%	1.41	%	1.15	%	2.39	%	2.85	%	2.90	%	4.81	%
Italy	30.74	%	30.50	%	30.53	%	5.04	%	5.05	%	4.65	%	11.85	%	11.90	%	11.69	%
Japan	11.58	%	12.50	%	12.32	%	(4.40	)%	(4.23	)%	(3.98	)%	(2.58	)%	(2.43	)%	(1.84	)%
Malaysia	12.39	%	15.10	%	13.02	%	5.39	%	5.48	%	6.57	%	(4.31	)%	(4.34	)%	(3.17	)%
Mexico	51.77	%	52.20	%	54.08	%	13.48	%	13.66	%	14.61	%	14.22	%	14.30	%	16.14	%
Netherlands	23.40	%	24.00	%	23.66	%	(2.68	)%	(2.71	)%	(1.75	)%	5.16	%	5.22	%	6.42	%
Singapore	24.06	%	24.21	%	22.19	%	2.69	%	2.60	%	2.34	%	(2.84	)%	(2.77	)%	(2.44	)%
Spain	31.85	%	31.70	%	31.47	%	9.04	%	9.05	%	7.72	%	13.90	%	13.96	%	14.18	%
Sweden	29.21	%	29.64	%	29.32	%	(1.64	)%	(1.51	)%	(2.45	)%	10.20	%	10.29	%	11.44	%
Switzerland	21.54	%	22.09	%	22.98	%	2.95	%	2.84	%	4.24	%	6.00	%	6.04	%	7.44	%
United Kingdom	21.53	%	20.73	%	22.38	%	2.59	%	2.58	%	3.42	%	8.17	%	8.22	%	8.86	%

* Total returns for the period since inception are calculated from the inception date of the Funds (3/12/96). The first day of secondary market trading for the Funds was 3/18/96.

** Rounds to less than 0.01

i  Shares

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	Cumulative Total Returns
	Year Ended 8/31/05						5 Years Ended 8/31/05						Inception to 8/31/05*
iShares MSCI Index Fund	NAV		Market		Index		NAV		Market		Index		NAV		Market		Index
Australia	39.58	%	41.19	%	38.98	%	108.40	%	109.01	%	103.69	%	137.88	%	139.90	%	142.09	%
Austria	56.82	%	56.49	%	61.52	%	263.19	%	261.21	%	270.99	%	179.47	%	181.83	%	209.07	%
Belgium	30.22	%	29.79	%	31.24	%	63.43	%	63.52	%	46.80	%	118.70	%	119.60	%	122.89	%
Canada	43.35	%	43.23	%	43.69	%	27.22	%	27.87	%	20.39	%	212.94	%	214.94	%	230.15	%
France	26.13	%	25.94	%	26.49	%	0.28	%	0.50	%	1.88	%	147.07	%	148.07	%	152.13	%
Germany	28.89	%	29.56	%	29.31	%	(2.25	)%	(1.62	)%	(1.36	)%	78.74	%	80.46	%	85.75	%
Hong Kong	21.96	%	22.17	%	22.59	%	7.25	%	5.88	%	12.53	%	30.49	%	31.17	%	56.05	%
Italy	30.74	%	30.50	%	30.53	%	27.87	%	27.91	%	25.53	%	189.02	%	190.18	%	185.24	%
Japan	11.58	%	12.50	%	12.32	%	(20.14	)%	(19.43	)%	(18.38	)%	(21.96	)%	(20.77	)%	(16.15	)%
Malaysia	12.39	%	15.10	%	13.02	%	30.02	%	30.57	%	37.49	%	(34.12	)%	(34.29	)%	(26.32	)%
Mexico	51.77	%	52.20	%	54.08	%	88.21	%	89.72	%	97.74	%	252.37	%	254.70	%	313.11	%
Netherlands	23.40	%	24.00	%	23.66	%	(12.70	)%	(12.82	)%	(8.44	)%	61.07	%	61.96	%	80.42	%
Singapore	24.06	%	24.21	%	22.19	%	14.18	%	13.68	%	12.29	%	(23.86	)%	(23.40	)%	(20.87	)%
Spain	31.85	%	31.70	%	31.47	%	54.11	%	54.23	%	45.07	%	243.28	%	244.95	%	251.65	%
Sweden	29.21	%	29.64	%	29.32	%	(7.91	)%	(7.32	)%	(11.68	)%	151.03	%	153.00	%	179.11	%
Switzerland	21.54	%	22.09	%	22.98	%	15.62	%	15.03	%	23.09	%	73.63	%	74.23	%	97.39	%
United Kingdom	21.53	%	20.73	%	22.38	%	13.61	%	13.58	%	18.30	%	110.50	%	111.35	%	123.68	%

* Total returns for the period since inception are calculated from the inception date of the Funds (3/12/96). The first day of secondary market trading for the Funds was 3/18/96.

	Average Annual Total Returns												Cumulative Total Returns
	Year Ended 8/31/05						Inception to 8/31/05						Inception to 8/31/05
iShares MSCI Index Fund	NAV		Market		Index		NAV		Market		Index		NAV		Market		Index
Brazil*	69.72	%	68.54	%	74.70	%	9.29	%	9.22	%	11.91	%	57.95	%	57.44	%	78.52	%
EMU**	28.54	%	28.47	%	28.75	%	(0.41	)%	(0.25	)%	(0.09	)%	(2.07	)%	(1.26	)%	(0.46	)%
Pacific ex-Japan***	33.27	%	34.82	%	33.13	%	21.35	%	21.71	%	21.30	%	110.71	%	113.16	%	110.29	%
South Korea****	44.29	%	42.65	%	45.83	%	11.02	%	10.80	%	11.62	%	74.26	%	72.48	%	79.43	%
Taiwan*****	9.28	%	10.15	%	10.10	%	(8.64	)%	(8.74	)%	(7.78	)%	(37.48	)%	(37.84	)%	(34.36	)%

* Total returns for the period since inception are calculated from the inception date of the Fund (7/10/00). The first day of secondary market trading of the Fund was 7/14/00.

** Total returns for the period since inception are calculated from the inception date of the Fund (7/25/00). The first day of secondary market trading of the Fund was 7/31/00.

*** Total returns for the period since inception are calculated from the inception date of the Fund (10/25/01). The first day of secondary market trading of the Fund was 10/26/01.

**** Total returns for the period since inception are calculated from the inception date of the Fund (5/9/00). The first day of secondary market trading of the Fund was 5/12/00.

***** Total returns for the period since inception are calculated from the inception date of the Fund (6/20/00). The first day of secondary market trading of the Fund was 6/23/00.

	Average Annual Total Returns												Cumulative Total Returns
	Year Ended 8/31/05						Inception to 8/31/05						Inception to 8/31/05
iShares MSCI Index Fund	NAV		Market		Index		NAV		Market		Index		NAV		Market		Index
South Africa*	40.62	%	42.19	%	42.25	%	36.58	%	37.61	%	38.15	%	123.19	%	127.54	%	130.21	%
Emerging Markets**	46.17	%	47.06	%	41.83	%	42.68	%	42.85	%	40.27	%	134.91	%	135.58	%	125.27	%

* Total returns for the period since inception are calculated from the inception date of the Fund (2/3/03). The first day of secondary market trading of the Fund was 2/7/03.

** Total returns for the period since inception are calculated from the inception date of the Fund (4/7/03). The first day of secondary market trading of the Fund was 4/11/03.

iShares Supplemental Information

page 125

Copies of the Prospectus, SAI, and recent shareholder reports can be found on our website at www.iShares.com. For more detailed information about the Company and shares of the Funds, you may request a copy of the SAI. The SAI provides detailed information about the Funds, and is incorporated by reference into this Prospectus. This means that the SAI, for legal purposes, is a part of this Prospectus.

Additional information about a Fund’s investments is available in the Company’s annual and semi-annual reports to shareholders. In the Company’s annual report, you will find a discussion of the market conditions and investment strategies that significantly affected a Fund’s performance during its last fiscal year.

If you have questions about the Funds or shares of the Company or you wish to obtain the SAI, semi-annual or annual report free of charge, please:

Call: 1-800-iShares

Monday through Friday

8:00 am to 8:00 pm (Eastern time)

Write: iShares, Inc.

c/o SEI Investments Distribution Co.

1 Freedom Valley Drive

Oaks, PA 19456

Information about the Funds (including the SAI) can be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C., and information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-202-942-8090. Reports and other information about the Funds are available on the EDGAR Database on the SEC’s Internet site at www.sec.gov, and copies of this information may be obtained, after paying a duplicating fee, by electronic request at the following E-mail address: publicinfo@sec.gov, or by writing the SEC’s Public Reference Section, Washington, D.C. 20549-0102.

No person is authorized to give any information or to make any representations about any Fund and its shares not contained in this Prospectus and you should not rely on any other information. Read and keep the Prospectus for future reference.

Investment Company Act File No. 811-09102

i  Shares

page 126

iShares^®, Inc.

Statement of Additional Information

Dated January 1, 2006

This Statement of Additional Information (“SAI”) is not a Prospectus. It should be read in conjunction with the current Prospectus (the “Prospectus”) for the following Funds of iShares, Inc. (the “Company”) as such Prospectus may be revised or supplemented from time to time:

iShares MSCI Australia Index Fund	iShares MSCI Malaysia Index Fund
iShares MSCI Austria Index Fund	iShares MSCI Mexico Index Fund
iShares MSCI Belgium Index Fund	iShares MSCI Netherlands Index Fund
iShares MSCI Brazil Index Fund	iShares MSCI Pacific ex-Japan Index Fund
iShares MSCI Canada Index Fund	iShares MSCI Singapore Index Fund
iShares MSCI Emerging Markets Index Fund	iShares MSCI South Africa Index Fund
iShares MSCI EMU Index Fund	iShares MSCI South Korea Index Fund
iShares MSCI France Index Fund	iShares MSCI Spain Index Fund
iShares MSCI Germany Index Fund	iShares MSCI Sweden Index Fund
iShares MSCI Hong Kong Index Fund	iShares MSCI Switzerland Index Fund
iShares MSCI Italy Index Fund	iShares MSCI Taiwan Index Fund
iShares MSCI Japan Index Fund	iShares MSCI United Kingdom Index Fund

The current Prospectus for the iShares, Inc. Funds is dated January 1, 2006. Capitalized terms used herein that are not defined have the same meaning as in the Prospectus, unless otherwise noted. The Financial Statements and Notes contained in the Annual Reports for the above listed Funds for the fiscal year ended August 31, 2005 are incorporated by reference into and are deemed to be part of this SAI. A copy of the Prospectus may be obtained without charge by writing to the Company’s distributor, SEI Investments Distribution Co. (“SEI” or the “Distributor”), at 1 Freedom Valley Drive, Oaks, PA 19456, calling 1-800-iShares or visiting www.iShares.com. ^®iShares is a registered trademark of Barclays Global Investors, N.A.

TABLE OF CONTENTS

	PAGE
GENERAL DESCRIPTION OF THE COMPANIES AND ITS FUNDS	1
EXCHANGE LISTING AND TRADING	1
INVESTMENT STRATEGIES AND RISKS	2
Concentration and Lack of Diversification of Certain Funds	2
Lending Portfolio Securities	3
Repurchase Agreements	3
Reverse Repurchase Agreements	3
Currency Transactions	4
Money Market Instruments	4
Foreign Securities	4
Investment Companies, REITs	5
Illiquid Securities	5
Short-Term Instruments and Temporary Investments	5
Futures and Options	5
Options on Futures Contracts	5
Swap Agreements	6
Non-U.S. Equity Portfolios	6
PROXY VOTING POLICY	6
PORTFOLIO HOLDINGS INFORMATION	7
INVESTMENTS IN SUBJECT EQUITY MARKETS	8
Country Specific Information	8
THE MSCI EQUITY INDICES	25
In General	25
Selection Criteria	25
Price and Exchange Rates	26
INVESTMENT LIMITATIONS	27
CONTINUOUS OFFERING	30
MANAGEMENT OF THE COMPANY	31
Directors and Officers	31
Committees of the Board of Directors	35
Remuneration of Directors and Officers	35
Code of Ethics	36
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES	36
INVESTMENT ADVISORY, ADMINISTRATIVE AND DISTRIBUTION SERVICES	39
Investment Adviser	39

i

Portfolio Managers	40
Administrator, Custodian and Transfer Agent	43
Sub-Administrator	43
Distributor	44
BROKERAGE TRANSACTIONS	45
ADDITIONAL INFORMATION CONCERNING THE COMPANY	49
Capital Stock	49
Termination of the Company or a Fund	50
Book Entry Only System	50
DTC Acts as Securities Depository for the Shares of the Company	50
PURCHASE AND REDEMPTION OF CREATION AND REDEMPTIONS	51
Creation Unit Aggregations	51
Purchase and Issuance of Creation Unit Aggregations	52
General	52
Portfolio Deposit	52
Role of the Authorized Participant	53
Purchase Order	53
Acceptance of Purchase Order	54
Issuance of a Creation Unit	54
Cash Purchase Method	54
Purchase Transaction Fee	55
Redemption of Creation Units	56
TAXES	59
RIC Qualifications	59
Taxation of RICs	59
Excise Tax	59
Back-Up Withholding	60
Section 351	60
Qualified Dividend Income	60
Corporate Dividends Received Deduction	60
Net Capital Loss Carryforwards (Unaudited)	60
Funds Holding Foreign Investments	61
Federal Tax Treatment of Complex Securities	61
DETERMINATION OF NAV	62
DIVIDENDS AND DISTRIBUTIONS	62
General Policies	62
Dividend Reinvestment Service	63

ii

FINANCIAL STATEMENTS	63
MISCELLANEOUS INFORMATION	63
Counsel	63
Independent Registered Accounting Firm	63
APPENDIX A	64

iii

GENERAL DESCRIPTION OF THE COMPANY AND ITS FUNDS

iShares, Inc. (the “Company”) currently consists of 24 investment portfolios. The Company was organized as a Maryland corporation on August 31, 1994 and is authorized to have multiple series or portfolios. The Company is an open-end management investment company, registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The offering of the Company’s shares is registered under the Securities Act of 1933, as amended (the “Securities Act”). The following series of the Company (each, a “Fund” and collectively, the “Funds”) have an inception date of March 12, 1996: the iShares MSCI Australia Index Fund, the iShares MSCI Austria Index Fund, the iShares MSCI Belgium Index Fund, the iShares MSCI Canada Index Fund, the iShares MSCI France Index Fund, the iShares MSCI Germany Index Fund, the iShares MSCI Hong Kong Index Fund, the iShares MSCI Italy Index Fund, the iShares MSCI Japan Index Fund, the iShares MSCI Malaysia Index Fund, the iShares MSCI Mexico Index Fund, the iShares MSCI Netherlands Index Fund, the iShares MSCI Singapore Index Fund, the iShares MSCI Spain Index Fund, the iShares MSCI Sweden Index Fund, the iShares MSCI Switzerland Index Fund and the iShares MSCI United Kingdom Index Fund. The iShares MSCI Brazil Index Fund, iShares MSCI Emerging Markets Index Fund, the iShares MSCI EMU Index Fund, the iShares MSCI Pacific ex-Japan Index Fund, the iShares MSCI South Africa Index Fund, the iShares MSCI South Korea Index Fund and the iShares MSCI Taiwan Index Fund have inception dates of July 10, 2000, April 7, 2003, July 25, 2000, October 25, 2001, February 3, 2003, May 9, 2000, June 20, 2000, respectively. The Board of Directors (the “Board” or the “Directors”) of the Company may authorize additional Funds in the future.

The investment objective of each Fund is to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of a specified benchmark index (each an “Underlying Index”). Each Fund is managed by Barclays Global Fund Advisors (“BGFA”), a subsidiary of Barclays Global Investors, N.A. (“BGI”).

Unless otherwise specified, all references in this SAI to “dollars,” “USD,” “US$” or “$” are to U.S. Dollars, all references to “AUD,” or “A$” are to Australian Dollars, all references to “ATS” are to Austrian Schillings, all references to “BEF” are to Belgian Francs, all references to “BRL” are to Brazilian Reals, all references to “CAD” or “CA$” are to Canadian Dollars, all references to “EUR” are to Euros, all references to “FRF” or “FF” are to French Francs, all references to “DEM” or “DM” are to the German Deutsche Mark, all references to “HKD” or “HK$” are to Hong Kong Dollars, all references to “ITL” or “LL” are to Italian Lira, all references to “JPY” or “Y” are to Japanese Yen, all references to “KRW” are to Korean Wons, all references to “MYR” are to Malaysian Ringgits, all references to “MXN” are to Mexican Pesos, all references to “NLG” are to Netherlands Guilders, all references to “SGD” are to Singapore Dollars, all references to “ESP” are to Spanish Pesetas, all references to “SEK” are to Swedish Krona, all references to “CHF” are to Swiss Francs, all references to “TWD” are to New Taiwan Dollars, all references to “GBP,” “(pound)” or “L” are to British Pounds Sterling and all references to “ZAR” are to South African Rand. Some numbers in this SAI have been rounded. All U.S. Dollar equivalents provided in this SAI are calculated at the exchange rate prevailing on the date to which the corresponding foreign currency amount refers.

EXCHANGE LISTING AND TRADING

A discussion of exchange listing and trading matters associated with an investment in each Fund is contained in the applicable Prospectus in the Shareholder Information section. The discussion below supplements, and should be read in conjunction with, that section of the Prospectus.

Shares of each Fund are listed for trading on the American Stock Exchange (“AMEX”) or the New York Stock Exchange (“NYSE”) (each, a “Listing Exchange”) and trade throughout the day on these Listing Exchanges and other secondary markets. In addition, certain Funds may be traded on certain foreign exchanges. There can be no assurance that the requirements of a Listing Exchange necessary to maintain the listing of shares of any Fund will continue to be met. A Listing Exchange may, but is not required to, remove the shares of a Fund from listing if (1) following the initial 12-month period beginning upon the commencement of trading of a Fund, there are fewer than 50 beneficial holders of the shares for 30 or more consecutive trading days, (2) the value of the Underlying Index on which that Fund is based is no longer calculated or available, or (3) any other event shall occur or condition exist that, in the opinion of the Listing Exchange, makes further dealings on the Listing Exchange inadvisable. A Listing Exchange will remove the shares of a Fund from listing and trading upon termination of the Fund. As in the case of other publicly-traded securities, brokers’ commissions on transactions will be based on negotiated commission rates at customary levels.

1

In order to provide current share pricing information, a Listing Exchange disseminates through the facilities of the Consolidated Tape Association an updated “indicative optimized portfolio value” (“IOPV”) for each Fund as calculated by an information provider or market data vendors. The Company is not involved in or responsible for any aspect of the calculation or dissemination of the IOPVs, and makes no warranty as to the accuracy of the IOPVs. An IOPV for each Fund is disseminated every 15 seconds during regular Listing Exchange trading hours.

The Company reserves the right to adjust the share prices of Funds in the future to maintain convenient trading ranges for investors. Any adjustments would be accomplished through stock splits or reverse stock splits, which would have no effect on the net assets of the applicable Fund.

An IOPV has an equity securities value component and a cash component. The equity securities values included in an IOPV are the values of the Deposit Securities for the applicable Fund. While the IOPV reflects the current market value of the Deposit Securities required to be deposited in connection with the purchase of a Creation Unit Aggregation, it does not necessarily reflect the precise composition of the current portfolio of securities held by the applicable Fund at a particular point in time, because the current portfolio of the Fund may include securities that are not a part of the current Deposit Securities. Therefore, a Fund’s IOPV disseminated during the Listing Exchange trading hours should not be viewed as a real time update of the Fund’s NAV, which is calculated only once a day. It is possible that the value of the portfolio of securities held by a particular Fund may diverge from the applicable IOPV during any trading day. In such a case, the IOPV would not precisely reflect the value of the Fund’s portfolio. In addition, the foreign exchange rate used in computing NAV of a Fund may differ materially from that used by the IOPV provider.

The equity securities included in the IOPV for a Fund reflect the same market capitalization weighting as the Deposit Securities of the particular Fund. In addition to the equity component described in the preceding paragraph, the IOPV for each Fund includes a cash component consisting of estimated accrued dividend and other income, less expenses. Each IOPV also reflects changes in currency exchange rates between the U.S. Dollar and the applicable home foreign currency. For the iShares MSCI Australia Index, iShares MSCI Hong Kong Index, iShares MSCI Japan Index, iShares MSCI Malaysia Index, iShares MSCI Pacific ex-Japan, iShares MSCI Singapore Index, iShares MSCI South Korea Index and iShares MSCI Taiwan Index Funds, there is no overlap in trading hours between the foreign market and the Listing Exchange. Therefore, for each of those Funds, Bloomberg utilizes market prices (in the applicable foreign currency) in the foreign market for securities in the Fund’s portfolio, and converts the price to U.S. Dollars. This value is updated every 15 seconds during Listing Exchange trading hours to reflect changes in currency exchange rates between the U.S. Dollar and the applicable foreign currency. For Funds that have trading hours overlapping regular Listing Exchange trading hours, Bloomberg updates the applicable IOPV every 15 seconds to reflect price changes in the principal foreign market, and converts those prices into U.S. Dollars based on the current currency exchange rate. When the foreign market is closed but the Listing Exchange is open, the IOPV is updated every 15 seconds to reflect changes in currency exchange rates after the foreign market closes.

INVESTMENT STRATEGIES AND RISKS

Each Fund seeks to achieve its objective by investing primarily in securities issued by companies that comprise the relevant Underlying Index. Each Fund operates as an index fund and will not be actively managed. Adverse performance of a security in a Fund’s portfolio will ordinarily not result in the elimination of the security from a Fund’s portfolio.

Each Fund engages in Representative Sampling, which is investing in a representative sample of securities in the Underlying Index, selected by BGFA to have a similar investment profile as the Underlying Index. Securities selected have aggregate investment characteristics (based on market capitalization and industry weightings), fundamental characteristics (such as return variability, earnings valuation and yield) and liquidity measures similar to those of the relevant Underlying Index. Funds that use Representative Sampling generally do not hold all of the securities that are included in the relevant Underlying Index.

The following supplements the information contained in the Prospectus concerning the investment objectives and policies of the Funds.

Concentration and Lack of Diversification of Certain Funds. Each Fund is classified as “non-diversified” for purposes of the 1940 Act. A “non-diversified” classification means that a Fund is not limited by the 1940 Act with regard to the percentage of its assets that may be invested in the securities of a single issuer. The securities of a particular issuer may dominate the Underlying Index of such a Fund and, consequently, the Fund’s investment portfolio. This may adversely affect the Fund’s performance or subject its shares to greater price volatility than that experienced by more diversified investment companies.

In addition, the Funds may concentrate their investments in a particular industry or group of industries, as noted in the description of such Fund. The securities of issuers in particular industries may dominate the Underlying Index of such a Fund and consequently the Fund’s investment portfolio. This may adversely affect the Fund’s performance or subject its shares to greater price volatility than that experienced by less concentrated investment companies.

2

Each Fund, however, intends to maintain the required level of diversification and otherwise conduct its operations so as to qualify as a “regulated investment company” for purposes of the Internal Revenue Code (“IRC”), and to relieve the Fund of any liability for federal income tax to the extent that its earnings are distributed to shareholders. Compliance with the diversification requirements of the IRC severely limits the investment flexibility of certain Funds and makes it less likely that such Funds will meet their investment objectives.

Lending Portfolio Securities. Each Fund may lend portfolio securities to certain creditworthy borrowers, including borrowers affiliated with BGFA. The borrowers provide collateral that is maintained in an amount at least equal to the current market value of the securities loaned. A Fund may terminate a loan at any time and obtain the return of the securities loaned. Each Fund receives the value of any interest or cash or non-cash distributions paid on the loaned securities.

With respect to loans that are collateralized by cash, the borrower will be entitled to receive a fee based on the amount of cash collateral. The Fund is compensated by the difference between the amount earned on the reinvestment of cash collateral and the fee paid to the borrower. In the case of collateral other than cash, the Fund is compensated by a fee paid by the borrower equal to a percentage of the market value of the loaned securities. Any cash collateral may be reinvested in certain short-term instruments either directly on behalf of each lending Fund or through one or more joint accounts or money market funds, including those managed by BGFA.

Securities lending involves exposure to certain risks, including operational risk (i.e., the risk of losses resulting from problems in the settlement and accounting process), “gap” risk (i.e., the risk of a mismatch between the return on cash collateral reinvestments and the fees the Fund has agreed to pay a borrower), and credit, legal, counterparty and market risk. In the event a borrower does not return a Fund’s securities as agreed, the Fund may experience losses if the proceeds received from liquidating the collateral does not at least equal the value of the loaned security at the time the collateral is liquidated plus the transaction costs incurred in purchasing replacement securities.

A Fund may pay a portion of the interest or fees earned from securities lending to a borrower as described above, and to a securities lending agent who administers the lending program in accordance with guidelines approved by the Fund’s Board of Directors. BGI acts as securities lending agent for the Fund subject to the overall supervision of BGFA. BGI receives a portion of the revenues generated by securities lending activities as compensation for its services in this regard.

Repurchase Agreements. Each Fund may enter into repurchase agreements with certain counterparties. Repurchase agreements involve an agreement to purchase financial instruments and to resell those instruments back to the same counterparty at an agreed-upon date and price, which price reflects a rate of interest unrelated to a coupon rate or maturity of the purchased instruments. The value of the instruments purchased may be more or less than the price at which the counterparty has agreed to repurchase them. As protection against the risk that the counterparty will not fulfill its obligation, the instruments are marked to market daily and are maintained at a value at least equal to the sale price plus the accrued incremental amount. Delays or losses could result if the counterparty to the repurchase agreement defaults or becomes insolvent. The Funds will only engage in repurchase agreements with counterparties whose creditworthiness has been reviewed and found satisfactory by BGFA.

Reverse Repurchase Agreements. Each Fund may enter into reverse repurchase agreements, which involve the sale of securities with an agreement to repurchase the securities at an agreed-upon price, date and interest payment and have the characteristics of borrowing. The securities purchased with the funds obtained from the agreement and securities collateralizing the agreement will have maturity dates no later than the repayment date. Generally the effect of such transactions is that the Fund can recover all or most of the cash invested in the portfolio securities involved during the term of the reverse repurchase agreement, while in many cases the Fund is able to keep some of the interest income associated with those securities. Such transactions are only advantageous if the Fund has an opportunity to earn a greater rate of interest on the cash derived from these transactions than the interest cost of obtaining the same amount of cash. Opportunities to realize earnings from the use of the proceeds equal to or greater than the interest required to be paid may not always be available and each Fund intends to use the reverse repurchase technique only when BGFA believes it will be advantageous to the Fund. The use of reverse repurchase agreements may exaggerate any interim increase or decrease in the value of each Fund’s assets. The Fund’s exposure to reverse repurchase agreements will be covered by securities having a value equal to or greater than such commitments. Under the 1940 Act, reverse repurchase agreements are considered borrowings.

3

Currency Transactions. No Fund expects to engage in currency transactions for the purpose of hedging against declines in the value of the Fund’s assets that are denominated in a foreign currency. A Fund may enter into foreign currency forward and foreign currency futures contracts to facilitate local securities settlements or to protect against currency exposure in connection with its distributions to shareholders, but may not enter into such contracts for speculative purposes.

A forward currency contract is an obligation to purchase or sell a specific currency at a future date, which may be any fixed number of days from the date of the contract agreed upon by the parties, at a price set at the time of the contract. A currency futures contract is a contract involving an obligation to deliver or acquire the specified amount of a specific currency, at a specified price and at a specified future time. Futures contracts may be settled on a net cash payment basis rather than by the sale and delivery of the underlying currency.

Foreign exchange transactions involve a significant degree of risk and the markets in which foreign exchange transactions are effected are highly volatile, highly specialized and highly technical. Significant changes, including changes in liquidity prices, can occur in such markets within very short periods of time, often within minutes. Foreign exchange trading risks include, but are not limited to, exchange rate risk, maturity gap, interest rate risk, and potential interference by foreign governments through regulation of local exchange markets, foreign investment or particular transactions in foreign currency. If BGFA utilizes foreign exchange transactions at an inappropriate time or judges market conditions, trends or correlations incorrectly, foreign exchange transactions may not serve their intended purpose of improving the correlation of a Fund’s return with the performance of the Underlying Index and may lower the Fund’s return. The Fund could experience losses if the value of its currency forwards, options and futures positions were poorly correlated with its other investments or if it could not close out its positions because of an illiquid market. In addition, each Fund could incur transaction costs, including trading commissions, in connection with certain foreign currency transactions.

Money Market Instruments. Each Fund may invest a portion of its assets in high-quality money market instruments on an ongoing basis to provide liquidity or for other reasons. The instruments in which the Fund may invest include: (i) short-term obligations issued by the U.S. Government; (ii) negotiable certificates of deposit (“CDs”), fixed time deposits and bankers’ acceptances of U.S. and foreign banks and similar institutions; (iii) commercial paper rated at the date of purchase “Prime-1” by Moody’s or “A-1+” or “A-1” by S&P or, if unrated, of comparable quality is determined by BGFA; and (iv) repurchase agreements. CDs are short-term negotiable obligations of commercial banks. Time deposits are non-negotiable deposits maintained in banking institutions for specified periods of time at stated interest rates. Banker’s acceptances are time drafts drawn on commercial banks by borrowers, usually in connection with international transactions.

BGFA received an exemptive order from the SEC that permits the funds it manages, including the Funds of the Company, to invest in shares of money market funds affiliated with BGFA. Pursuant to this order, the Funds are permitted to invest in shares of money market funds affiliated with BGFA for cash management purposes.

Foreign Securities. Each Fund may purchase publicly traded common stocks of foreign corporations. Each Fund’s investment in common stock of foreign corporations represented in the Underlying Indices may also be in the form of American Depositary Receipts (“ADRs”) and Global Depositary Receipts (“GDRs”). ADRs and GDRs are receipts, typically issued by a bank or trust company, which evidence ownership of underlying securities issued by a foreign corporation. For ADRs, the depository is typically a U.S. financial institution and the underlying securities are issued by a foreign issuer. For other Depositary Receipts, the depository may be a foreign or a U.S. entity, and the underlying securities may have a foreign or a U.S. issuer. Depositary Receipts will not necessarily be denominated in the same currency as their underlying securities. Generally, ADRs, in registered form, are designed for use in the U.S. securities, and European Depositary Receipts, in bearer form, are designated for use in European securities markets. GDRs are tradable both in the United States and in Europe and are designed for use throughout the world. A Fund may invest in unsponsored Depositary Receipts. The issuers of unsponsored Depositary Receipts are not obligated to disclose material information in the Untied States, and, therefore, there may be less information available regarding such issuers and there may not be a correlation between such information and the market value of the Depositary Receipts.

To the extent a Fund invests in ADRs, such ADRs will be listed on a national securities exchange or the Nasdaq Stock Market, Inc. (“Nasdaq”), and to the extent a Fund invests in GDRs or EDRs, such GDRs and EDRs will be listed on a foreign exchange. A Fund will not invest in any unlisted Depositary Receipt or any Depository Receipt that BGFA deems to be illiquid or for which pricing information is not readily available. In addition, all Depository Receipts generally must be sponsored, however a Fund may invest in unsponsored Depositary Receipts under certain limited circumstances. The issuers of unsponsored Depositary Receipts are not obligated to disclose material information in the United States, and, therefore, there may be less information available regarding such issuers and there may not be a correlation between such information and the market value of the Depositary Receipts.

Investing in the securities of foreign companies involves special risks and considerations not typically associated with investing in U.S. companies. These include differences in accounting, auditing and financial reporting standards, the possibility of expropriation or confiscatory taxation, adverse changes in investment or exchange control regulations, political

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instability which could affect U.S. investments in foreign countries, and potential restrictions of the flow of international capital. Foreign companies may be subject to less governmental regulation than U.S. companies. Moreover, individual foreign economies may differ favorably or unfavorably from the U.S. economy in such respects as growth of gross domestic product, rate of inflation, capital reinvestment, resource self-sufficiency and balance of payment positions.

Investment Companies, REITs. Each Fund may invest in the securities of other investment companies (including money market funds) and real estate investment trusts to the extent allowed by law. Under the 1940 Act, a Fund’s investment in investment companies is limited to, subject to certain exceptions, (i) 3% of the total outstanding voting stock of any one investment company, (ii) 5% of the Fund’s total assets with respect to any one investment company and (iii) 10% of the Fund’s total assets of investment companies in the aggregate. Each Fund may invest its assets in securities of money market funds advised by BGFA or otherwise affiliated with such Fund. The iShares MSCI Emerging Markets Index Fund, in order to improve its portfolio liquidity and its ability to track the MSCI Emerging Markets Index, may invest up to 10% of its assets in shares of other iShares Funds that invest in securities in the MSCI Emerging Markets Index. BGFA will not charge advisory fees on that portion of the iShares MSCI Emerging Market Index Fund’s assets invested in shares of other iShares Funds.

Illiquid Securities. Each Fund may invest up to an aggregate amount of 15% of its net assets in illiquid securities. Illiquid securities include securities subject to contractual or other restrictions on resale and other instruments that lack readily available markets.

Short-term Instruments and Temporary Investments. The Fund may invest in various money market instruments. Money market instruments are generally short-term investments that may include but are not limited to: (i) obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities (including government-sponsored enterprises); (ii) negotiable certificates of deposit (“CDs”), bankers’ acceptances, fixed time deposits and other obligations of domestic banks (including foreign branches); (iii) commercial paper; (iv) non-convertible corporate debt securities (e.g., bonds and debentures); (v) repurchase agreements; and (vi) U.S. dollar-denominated obligations of foreign banks (including U.S. branches) that, in the opinion of BGFA, are of comparable quality to obligations of U.S. banks which may be purchased by the Fund. Any of these instruments may be purchased on a current or a forward-settled basis. Money market instruments also include shares of money market mutual funds, including those managed by BGFA.

Futures and Options. Each Fund may enter into U.S. or foreign futures contracts, options and options on futures contracts. These futures contracts, options and options on futures contracts will be used to simulate full investment in the respective Underlying Index, to facilitate trading or to reduce transaction costs. Each Fund will only enter into futures contracts and options on futures contracts that are traded on a U.S. or foreign exchange. No Fund will use futures or options for speculative purposes. The Funds intend to use futures and options in accordance with Rule 4.5 of the Commodity Exchange Act (“CEA”). The Company, on behalf of each Fund, has filed a notice of eligibility for exclusion from the definition of the term “commodity pool operator” in accordance with Rule 4.5 and therefore, the Funds are not subject to registration or regulation as a commodity pool operator under the CEA.

A call option gives a holder the right to purchase a specific security at a specified price (“exercise price”) within a specified period of time. A put option gives a holder the right to sell a specific security at a specified price within a specified period of time. The initial purchaser of a call option pays the “writer” a premium, which is paid at the time of purchase and is retained by the writer whether or not such option is exercised. Each Fund may purchase put options to hedge its portfolio against the risk of a decline in the market value of securities held and may purchase call options to hedge against an increase in the price of securities it is committed to purchase. Each Fund may write put and call options along with a long position in options to increase its ability to hedge against a change in the market value of the securities it holds or is committed to purchase.

Futures contracts provide for the future sale by one party and purchase by another party of a specified amount of a specific instrument or index at a specified future time and at a specified price. Stock index contracts are based on indices that reflect the market value of common stock of the firms included in the indices. Each Fund may enter into futures contracts to purchase security indices when BGFA anticipates purchasing the underlying securities and believes prices will rise before the purchase will be made. Assets committed to futures contracts will be segregated to the extent required by law.

Options on Futures Contracts. An option on a futures contract, as contrasted with the direct investment in such a contract, gives the purchaser the right, in return for the premium paid, to assume a position in the underlying futures contract at a specified exercise price at any time prior to the expiration date of the option. Upon exercise of an option, the delivery of the futures position by the writer of the option to the holder of the option will be accompanied by delivery of the accumulated balance in the writer’s futures margin account that represents the amount by which the market price of the futures contract exceeds (in the case of a call) or is less than (in the case of a put) the exercise price of the option on the futures contract. The

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potential for loss related to the purchase of an option on a futures contract is limited to the premium paid for the option plus transaction costs. Because the value of the option is fixed at the point of sale, there are no daily cash payments by the purchaser to reflect changes in the value of the underlying contract; however, the value of the option changes daily and that change would be reflected in the NAV of each Fund. The potential for loss related to writing options is unlimited.

Each Fund may purchase and write put and call options on futures contracts that are traded on a U.S. or foreign exchange as a hedge against changes in value of its portfolio securities, or in anticipation of the purchase of securities, and may enter into closing transactions with respect to such options to terminate existing positions. There is no guarantee that such closing transactions can be effected.

Upon entering into a futures contract, a Fund will be required to deposit with the broker an amount of cash or cash equivalents known as “initial margin,” which is in the nature of a performance bond or good faith deposit on the contract and is returned to each Fund upon termination of the futures contract, assuming all contractual obligations have been satisfied. Subsequent payments, known as “variation margin,” to and from the broker will be made daily as the price of the index underlying the futures contract fluctuates, making the long and short positions in the futures contract more or less valuable, a process known as “marking-to-market.” At any time prior to expiration of a futures contract, each Fund may elect to close the position by taking an opposite position, which will operate to terminate the Fund’s existing position in the contract.

Swap Agreements. Swap agreements are contracts between parties in which one party agrees to make periodic payments to the other party based on the change in market value or level of a specified rate, index or asset. In return, the other party agrees to make periodic payments to the first party based on the return of a different specified rate, index or asset. Swap agreements will usually be done on a net basis, the Fund receiving or paying only the net amount of the two payments. The net amount of the excess, if any, of a Fund’s obligations over its entitlements with respect to each swap is accrued on a daily basis and an amount of cash or high liquid securities having an aggregate value at least equal to the accrued excess will be maintained.

The use of interest-rate and index swaps is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio security transactions. These transactions generally do not involve the delivery of securities or other underlying assets or principal.

Non-U.S. Equity Portfolios. An investment in iShares involves risks similar to those of investing in a broad-based portfolio of equity securities traded on exchanges in the respective countries covered by the individual Fund. These risks include market fluctuations caused by such factors as economic and political developments, changes in interest rates and perceived trends in stock prices. Investing in securities issued by companies domiciled in countries other than the domicile of the investor and denominated in currencies other than an investor’s local currency entails certain considerations and risks not typically encountered by the investor in making investments in its home country and in that country’s currency. These considerations include favorable or unfavorable changes in interest rates, currency exchange rates, exchange control regulations and the costs that may be incurred in connection with conversions between various currencies. Investing in a Fund whose portfolio contains non-U.S. issuers involves certain risks and considerations not typically associated with investing in the securities of U.S. issuers. These risks include generally less liquid and less efficient securities markets; generally greater price volatility; less publicly available information about issuers; the imposition of withholding or other taxes; the imposition of restrictions on the expatriation of funds or other assets of a Fund; higher transaction and custody costs; delays and risks attendant in settlement procedures; difficulties in enforcing contractual obligations; lesser liquidity and significantly smaller market capitalization of most non-U.S. securities markets; different accounting and disclosure standards; lesser levels of regulation of the securities markets; more substantial government interference with the economy; higher rates of inflation; greater social, economic, and political uncertainty; and the risk of nationalization or expropriation of assets and risk of war.

PROXY VOTING POLICY

The Company has adopted as its proxy voting policies for each Fund the proxy voting guidelines of BGFA, the investment adviser to each Fund. The Company has delegated to BGFA the responsibility for voting proxies on the portfolio securities held by each Fund. The remainder of this section discusses each Fund’s proxy voting guidelines and BGFA’s role in implementing such guidelines.

BGFA votes (or refrains from voting) proxies for each Fund in a manner that BGFA, in the exercise of its independent business judgment, concludes is in the best economic interests of such Fund. In some cases, BGFA may determine that it is in the best interests of a Fund to refrain from exercising the Fund’s proxy voting rights (such as, for example, proxies on certain non-U.S. securities that might impose costly or time-consuming in-person voting requirements). BGFA may also determine that it is not in a Fund’s best economic interest to refrain from exercising the Fund’s proxy voting rights in connection with securities on loan. The evaluation of the economic desirability of recalling a securities loan involves

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balancing the revenue producing value of the loan against the likely economic value of casting a vote. In the case of many routine votes, the likely economic value of casting a vote may be less than the securities lending income, either because the votes do not involve issues with significant economic consequences or because the outcome of the vote would not be affected by recalling loaned securities in order to ensure they are voted. BGFA will normally vote on specific proxy issues in accordance with its proxy voting guidelines. BGFA’s proxy voting guidelines provide detailed guidance as to how to vote proxies on certain important or commonly raised issues. BGFA may, in the exercise of its business judgment, conclude that the proxy voting guidelines do not cover the specific matter upon which a proxy vote is requested, or that an exception to the proxy voting guidelines would be in the best economic interests of a Fund. BGFA votes (or refrains from voting) proxies without regard to the relationship of the issuer of the proxy (or any shareholder of such issuer) to the Fund, the Fund’s affiliates (if any), BGFA or BGFA’s affiliates, or SEI or SEI’s affiliates. When voting proxies, BGFA attempts to ensure that companies follow practices that advance their economic value and allow the market to place a proper value on their assets. With respect to certain specific issues:

• Each Fund generally supports management in the election of directors and generally supports proposals that strengthen the independence of boards of directors;

• Each Fund generally does not support proposals on social issues that lack a demonstrable economic benefit to the issuer and the Fund investing in such issuer; and

• Each Fund generally votes against anti-takeover proposals and proposals which would create additional barriers or costs to corporate transactions.

BGFA maintains institutional policies and procedures which are designed to prevent any relationship between the issuer of the proxy (or any shareholder of the issuer) and a Fund, a Fund’s affiliates (if any), BGFA or BGFA’s affiliates, or SEI or SEI’s affiliates, from having any influence on BGFA’s proxy voting activity. In this way, BGFA seeks to prevent conflicts of interest that might influence BGFA’s independent business judgment on how to vote on specific proxy issues (or to refrain from voting). In certain instances, BGFA may determine to engage an independent fiduciary to vote proxies as a further safeguard to avoid the influence of a potential conflict of interest or as otherwise required by applicable law. Such independent fiduciary may either (i) vote such proxy, or (ii) provide BGFA with instructions as to how to vote such proxy. In the latter case, BGFA would vote the proxy in accordance with the independent fiduciary’s instructions.

Information with respect to how BGFA voted Fund proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available: (i) without charge, upon request, by calling 1-800-iShares or through the Fund’s website at www.iShares.com: and (ii) on the SEC’s website at www.sec.gov.

PORTFOLIO HOLDINGS INFORMATION

The Funds’ Board of Directors has adopted a policy regarding the disclosure of the Funds’ portfolio holdings information that requires that such information be disclosed in a manner that: (a) is consistent with applicable legal requirements and in the best interests of each Fund’s respective shareholders; (b) does not put the interests of the Funds’ investment adviser (the “BGFA” or “Investment Adviser”), the Funds’ distributor (the “Distributor”), or any affiliated person of the Funds, the Investment Adviser or the Distributor, above those of Fund shareholders; (c) does not advantage any current or prospective Fund shareholders over any other current or prospective Fund shareholders, except to the extent that certain Entities (as described below) may receive portfolio holdings information not available to other current or prospective Fund shareholders in connection with the dissemination of information necessary for transactions in Creation Units, as contemplated by the iShares Exemptive Orders and discussed below; and (d) does not provide selective access to portfolio holdings information except pursuant to the procedures outlined below and to the extent appropriate confidentiality arrangements limiting the use of such information are in effect. The “Entities” referred to in sub-section (c) above are generally limited to National Securities Clearing Corporation (“NSCC”) members and subscribers to various fee-based subscription services, including those large institutional investors (known as “Authorized Participants”) that have been authorized by the Distributor to purchase and redeem large blocks of shares (known as “Creation Units”) pursuant to legal requirements, including exemptive orders granted by the SEC pursuant to which the Funds offer and redeem their shares (“iShares Exemptive Orders”), and other institutional market participants and entities that provide information services.

Each business day, Fund portfolio holdings information will be provided to the Distributor or other agent for dissemination through the facilities of the NSCC and/or other fee-based subscription services to NSCC members and/or subscribers to those other fee-based subscription services, including Authorized Participants, and to entities that publish and/or analyze such information in connection with the process of purchasing or redeeming Creation Units or trading shares of Funds in the secondary market. This information typically reflects each Fund’s anticipated holdings on the following business day.

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Daily access to information concerning the Funds’ portfolio holdings is permitted (i) to certain personnel of those service providers that are involved in portfolio management and providing administrative, operational, risk management, or other support to portfolio management, including affiliated broker-dealers and/or Authorized Participants, and (ii) to other personnel of the Investment Adviser and the Funds’ distributor, administrator, custodian and fund accountant, who deal directly with, or assist in, functions related to investment management, administration, custody and fund accounting, as may be necessary to conduct business in the ordinary course in a manner consistent with the iShares Exemptive Orders, agreements with the Funds, and the terms of the iShares Funds’ current registration statements.

From time to time, information concerning Fund portfolio holdings, other than portfolio holdings information made available in connection with the creation/redemption process, as discussed above, may also be provided to other entities that provide additional services to the Funds, including, among others, rating or ranking organizations, in the ordinary course of business, no earlier than one business day following the date of the information. Portfolio holdings information made available in connection with the creation/redemption process may be provided to other entities that provide additional services to the Funds in the ordinary course of business after it has been disseminated to the NSCC.

Each Fund will disclose its complete portfolio holdings schedule in public filings with the SEC on a quarterly basis, based on the Fund’s fiscal year, within 60 days of the end of the quarter, and will provide that information to shareholders, as required by federal securities laws and regulations thereunder. A Fund, however, may voluntarily disclose all or part of its portfolio holdings other than in connection with the creation/redemption process, as discussed above, in advance of required filings with the SEC, provided that such information is made generally available to all shareholders and other interested parties in a manner that is consistent with the above policy for disclosure of portfolio holdings information. Such information may be made available through a publicly-available website or other means that make the information available to all likely interested parties in a contemporaneous manner.

The Funds’ Chief Compliance Officer may authorize disclosure of portfolio holdings information pursuant to the above policy and procedures.

The Funds’ Board of Directors reviews the policy and procedures for disclosure of portfolio holdings information at least annually.

INVESTMENTS IN SUBJECT EQUITY MARKETS

Brief descriptions of the equity markets in which the respective Fund are invested are provided below.

Country Specific Information

The Australian Equity Markets

General Background. Trading shares has taken place in Australia since 1828, but did not become significant until the latter half of the nineteenth century when there was strong demand for equity capital to support the growth of mining activities. A stock market was first formed in Melbourne in 1861. In 1884, the Melbourne market became The Stock Exchange of Melbourne, in which form it has remained until recently. Other stock exchanges were also established in Sydney (1872), Brisbane (1884), Adelaide (1887), Hobart (1882) and Perth (1889). In 1937, the six capital city stock exchanges established the Australian Associated Stock Exchanges (the “AASE”) to represent them at a national level. In 1987, the regional exchanges merged to create the single entity—The Australian Stock Exchange (the “ASX”). Trading is done via a computer link-up called “SEATS.” SEATS enables all exchanges to quote uniform prices. All the exchanges are members of the ASX and are subject to complementary oversight by the Australian Stock Exchange and the Australian Securities and Investments Commission, which work together to regulate the major aspects of stock exchange operations.

Reporting, Accounting and Auditing. Australian reporting, accounting and auditing standards differ substantially from U.S. standards. In general, Australian corporations do not provide all of the disclosure required by U.S. law and accounting practice, and such disclosure may be less timely and less frequent than that required of U.S. corporations.

Size of Equity Markets. The total market capitalization of the Australian equity markets was approximately US$537 billion as of September 30, 2005.

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Chief Industries. Australia’s chief industries are mining, industrial and transportation equipment, food processing, chemicals, and steel.

Chief Imports. Australia’s chief imports consist of machinery and transport equipment, computers and office machines, telecommunication equipment and parts, crude oil, and petroleum products.

Chief Exports. Australia’s chief exports consist of coal, gold, meat, wool, aluminum, iron ore, wheat, machinery, and transport equipment.

Gross Domestic Product (“GDP”). Australia’s GDP annual percent change was 2.6% for the year ended June 30, 2005.

Consumer Price Inflation (“CPI”). Australia’s CPI annual percent change was 3.0% for the year ended September 30, 2005.

Unemployment Rate. Australia’s unemployment rate was 5.1% for the year ended September 30, 2005.

The Austrian Equity Markets

General Background. Relative to international standards, the Vienna stock market is small in terms of total capitalization and yearly turnover. The Vienna Stock Exchange (the “VSE”) is one of the oldest in the world and was founded in 1771 as a state institution to provide a market for state-issued bonds, as well as for exchange transactions. The Stock Exchange Act of 1875 (the “Act”) established the VSE as an autonomous institution. The Act is still in force, placing control and administration of the exchange in the hands of the Borsekammer (Board of Governors), chosen from among the members of the exchange. The Borsekammer consists of 25 individuals with the title of Borserat (stock exchange councillor). Some are elected by members and some are designated by organizations of the securities industry for a period of five years. The councillors must be members of the exchange and they elect from amongst themselves a President and three Vice Presidents. Shares account for about 80% and investment fund certificates for about 20% of total listed securities on the VSE. Business of the exchange can be transacted only by members. Almost all the credit institutions in Vienna, some in the Austrian provinces and the joint stock banks are represented on the stock exchange, as well as the private banks, savings banks and other credit institutions. Certain securities which do not have an official listing may be dealt in on the floor of the stock exchange with permission of the management. This unlisted trading is the main activity of the free brokers (Frei Makeler).

Reporting, Accounting and Auditing. Austrian reporting, accounting and auditing standards differ from U.S. standards. In general, Austrian corporations do not provide all of the disclosure required by U.S. law and accounting practice, and such disclosure may be less timely and less frequent than that required of U.S. corporations.

Size of Equity Markets. The total market capitalization of the Austrian equity markets was approximately US$44 billion as of September 30, 2005.

Chief Industries. Austria’s chief industries are construction, machinery, vehicles and parts, food, chemicals, lumber and wood processing, paper and paperboard, communications equipment, and tourism.

Chief Imports. Austria’s chief imports consist of machinery and equipment, motor vehicles, chemicals, metal goods, oil and oil products, and foodstuffs.

Chief Exports. Austria’s chief exports consist of machinery and equipment, motor vehicles and parts, paper and paperboard, metal goods, chemicals, iron and steel, textiles, and foodstuffs.

Gross Domestic Product. Austria’s GDP annual percent change was 2.0% for the year ended March 30, 2005.

Consumer Price Inflation. Austria’s CPI annual percent change was 2.4% for the year ended September 30, 2005.

Unemployment Rate. Austria’s unemployment rate was 4.6% for the year ended May 31, 2005.

The Belgian Equity Markets

General Background. The Brussels Stock Exchange (the “BSE”) was founded by Napoleonic decree in 1801. Since January 1, 1991 the BSE has been officially organized as the “Societe de la Bourse de Valeurs Mobileres de Bruxelles” (the “SBVM”) the shareholders of which are Belgian securities houses. The law of December 4, 1990 on financial operations and markets terminated the monopoly of the individual brokers. Now only securities houses are allowed to carry out stock exchange orders. Brokers, banks, brokerage firms and insurance companies can participate in the capital of a securities house. Its management is composed of a majority of qualified people bearing the title of stockbroker. The Banking and Finance Commission was granted the power to approve securities houses by this law. The Board of Directors of the SBVM, the Stock

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Exchange Committee organizes and supervises the different markets and ensures market transparency. The Stock Exchange Committee also admits or dismisses brokerage firms and ensures compliance with all regulations. The Stock Exchange Committee is also in charge of the admission to listing and suspension of listing. On the Brussels Stock Exchange equities are traded on three different markets: the Official Market, which includes a Cash and a Forward Market, the Second Market and an “Over the Counter Market.”

Reporting, Accounting and Auditing. Belgian reporting, accounting and auditing standards differ substantially from U.S. standards. In general Belgian corporations do not provide all of the disclosure required by U.S. law and accounting practice, and such disclosure may be less timely and less frequent than that required of U.S. corporations.

Size of Equity Markets. The total market capitalization of the Belgian equity markets was approximately US$126 billion as of September 30, 2005.

Chief Industries. Belgium’s chief industries are engineering and metal products, motor vehicle assembly, processed food and beverages, chemicals, basic metals, textiles, glass and petroleum.

Chief Imports. Belgium’s chief imports consist of machinery and equipment, chemicals, diamonds, pharmaceuticals, foodstuffs, transportation equipment and oil products.

Chief Exports. Belgium’s chief exports consist of machinery and equipment, chemicals, diamonds, and metals and metal products.

Gross Domestic Product. Belgium’s GDP annual percent change was 1.1% for the year ended September 30, 2005.

Consumer Price Inflation. Belgium’s CPI annual percent change was 3.2% for the year ended September 30, 2005.

Unemployment Rate. Belgium’s unemployment rate was 8.4% for the year ended September 30, 2005.

The Brazilian Equity Markets

General Background. Formally established in 1845, the Rio de Janeiro exchange, or BVRJ (Bolsa de Valores de Rio de Janeiro) is the oldest exchange in Brazil, but is overshadowed by the Sao Paulo exchange, called Bolsa de Valores de Sao Paulo (“BOVESPA”), which is the largest and accounts for about 90% of trading activity. The BOVESPA was founded in 1890 and today acts as the center of integration for the nine regional stock exchanges: São Paulo, Rio de Janeiro, Minas-Espírito Santo-Brasília, Extremo Sul, Santos, Bahia-Sergipe-Alagoas, Pernambuco and Paraíba, Paraná and the Bolsa. All are linked with one another making it possible to settle transactions done on one exchange using the services of the other. The SOMA (Sociedade Operadora do Mercado de Ativos) manages the over-the-counter market organized in Brazil through an electronic system of negotiation. Government securities, corporate bonds, and money market instruments are traded in the open market. The Bolsa de Mercdorias & de Futuros (the “BM&F”), in Sao Paulo, is Brazil’s futures exchange. Options on the futures also are traded, but are less liquid. BM&F is the clearinghouse for all transactions. The financial market is regulated by three main bodies: the National Monetary Council, or CMN (Conselho Monetario Nacional); the Central Bank (Banco Central do Brasil), and the Securities Commission, or CVM (Comissao de Valores Mobiliarios).

Reporting, Accounting and Auditing. Brazilian reporting, auditing and accounting standards differ from U.S. standards. In general, Brazilian corporations do not provide all of the disclosure required by U.S. law and accounting practice, and such disclosure may be less timely and less frequent than that required of U.S. corporations.

Size of Equity Markets. The total market capitalization of the Brazilian equity markets was approximately US$167 billion as of September 30, 2005.

Chief Industries. Brazil’s chief industries are textiles, shoes, chemicals, cement, lumber, iron ore, tin, steel, aircraft, motor vehicles and parts, other machinery, and equipment.

Chief Imports. Brazil’s chief imports consist of machinery, electrical and transport equipment, chemical products and oil.

Chief Exports. Brazil’s chief exports consist of transport equipment, iron ore, soybeans, footwear, coffee, and autos.

Gross Domestic Product. Brazil’s GDP annual percent change was 1.0% for the year ended September 30, 2005.

Consumer Price Inflation. Brazil’s CPI annual percent change was 6.0% for the year ended September 30, 2005.

Unemployment Rate. Brazil’s unemployment rate was 9.6% for the year ended September 30, 2005.

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The Canadian Equity Markets

General Background. Canadian stock transactions took place prior to the establishment of any official exchanges. In 1861, the first Canadian stock exchange, the Toronto Stock Exchange, was officially established after nearly a decade of informal trading. Likewise, the Montreal Stock Exchange formally appeared in 1874, after more than 40 years of informal trading, primarily in railroad and bank securities. In 1982, the Montreal Stock Exchange changed its name to the Montreal Exchange to reflect the growing importance of financial instruments other than stocks, primarily options and futures, on its trading floor. In 1999, the Vancouver, Alberta, Toronto and Montreal exchanges reached an agreement to restructure the Canadian capital markets along the lines of market specialization. Under the agreement, the Toronto Stock Exchange became Canada’s sole exchange for trading larger equity securities. The Montreal Exchange assumed responsibility for the trading of derivatives and the Vancouver Stock Exchange and Alberta Stock Exchange merged to form the Canadian Venture Exchange (the “CDNX”), handling trading in smaller equities. The Canadian Dealing Network, Winnipeg Stock Exchange, and equities portion of the Montreal Exchange later merged with CDNX. In 2001, the Toronto Stock Exchange acquired the Canadian Venture Exchange, which was renamed the TSX Venture Exchange in 2002. The Market Regulation Services Inc. (RS) was created in March 2002 as the independent regulation services provider for the Canadian equity markets.

Today, there are three stock exchanges across Canada: the Toronto Stock Exchange (the “TSX”), the TSX Venture Exchange and the Montreal Exchange. Of these, the Toronto Stock Exchange is the largest, accounting for almost 80% of Canadian trading volumes. Measured by the value of shares traded, the Toronto Stock Exchange is the second largest organized securities exchange in North America and among the ten largest in the world. Canada is the world’s fifth largest public equity market by market capitalization.

Reporting, Accounting and Auditing. According to the SEC in one of the proposing releases relating to the Multijurisdictional Disclosure System, Canadian reporting, accounting and auditing practices are closer to U.S. standards than those of any other foreign jurisdiction. Every issuer that qualifies an offering of securities for distribution in Canada becomes subject to periodic disclosure requirements. The Canadian Institute of Chartered Accountants (the “CICA”) is responsible for developing authoritative accounting and auditing standards, which are uniform across Canada. Although promulgated auditing standards in Canada differ from U.S. standards in some respects, generally accepted practices in Canada routinely encompass all significant auditing procedures required by U.S. standards. Further, CICA periodically evaluates new auditing standards adopted by the American Institute of Certified Public Accountants, CICA’s U.S. counterpart, to determine whether similar guidelines may be appropriate for Canadian auditors. Canadian GAAP are similar to their U.S. counterparts, although there are some differences in measurement and disclosure.

Size of Equity Markets. The total market capitalization of the Canadian markets was approximately US$767 billion as of September 30, 2005.

Chief Industries. Canada’s chief industries are transportation equipment, chemicals, processed and unprocessed minerals, food products, wood and paper products, fish products, petroleum, and natural gas.

Chief Imports. Canada’s chief imports consist of machinery and equipment, motor vehicles and parts, crude oil, chemicals, electricity, and durable consumer goods.

Chief Exports. Canada’s chief exports consist of motor vehicles and parts, industrial machinery, aircraft, telecommunications equipment, chemicals, plastics, fertilizers, wood pulp, timber, crude petroleum, natural gas, electricity, and aluminum.

Gross Domestic Product. Canada’s GDP annual percent change was 2.8% for the year ended September 30, 2005.

Consumer Price Inflation. Canada’s CPI annual percent change was 3.4 % for the year ended September 30, 2005.

Unemployment Rate. Canada’s unemployment rate was 6.7% for the year ended September 30, 2005.

Emerging Markets Countries

The iShares MSCI Emerging Markets Index Fund invests in equity securities from the following 26 emerging market countries: Argentina, Brazil, Chile, China, Colombia, the Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Jordan, South Korea, Malaysia, Mexico, Morocco, Pakistan, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, Turkey and Venezuela. Currently, South Korea, South Africa, Taiwan, Brazil and China are the largest countries, in terms of capitalization weight in the Index. The equity markets for South Korea, South Africa, Taiwan, Mexico and Brazil are described herein.

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General Background. Following is a general background description of the equities market of each country included in the MSCI Emerging Markets Index for which there is no iShares MSCI Index Fund.

Size of Equity Markets. The total market capitalization of the combined equity markets of Argentina, Brazil, Chile, China, Colombia, the Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Jordan, South Korea, Malaysia, Mexico, Morocco, Pakistan, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, Turkey and Venezuela was approximately US $4.0 trillion as of September 30, 2005.

China. Mainland China’s economy has been transitioning from a centrally planned economy to a more market based economy. While the government continues to play a dominant role in the economy, the economic influence of individual citizens has been steadily increasing. Private enterprise continues to grow in place of the large state-owned enterprises, and foreign investment continues to contribute to economic growth. Accession to the World Trade Organization in 2001 helps strengthen China’s ability to maintain strong growth rates, but challenges the hybrid system of strong political controls and growing market influences. The index consists of two types of shares: “H” shares and (to a very limited extent) “B” Shares. The former are incorporated in China and nominated by the Central Government for listing and trading on the Hong Kong Exchange and are quoted in Hong Kong dollars. Like other securities trading on the Hong Kong Exchange, there are no restrictions on who can trade “H” shares. The latter are incorporated in China and trade either on the Shanghai or Shenzhen stock exchanges. They are quoted in U.S. Dollars on the Shanghai stock exchange and in Hong Kong Dollars on the Shenzhen stock exchange. They can be traded by non-residents of the People’s Republic of China and also residents of the People’s Republic of China with appropriate foreign currency dealing accounts.

Chief Industries. China’s chief industries are telecommunication services, integrated oil & gas, insurance, oil & gas exploration & production, and electric utilities.

Chief Imports. China’s chief imports consist of machinery and equipment, mineral fuels, plastics, iron and steel, chemicals.

Chief Exports. China’s chief exports consist of machinery and equipment, textiles and clothing, footwear, toys and sporting goods, mineral fuels

Gross Domestic Product. China’s GDP annual percent change was 9.4% for the year ended September 30, 2005.

Consumer Price Inflation. China’s CPI annual percent change was 0.9% for the year ended September 30, 2005.

Unemployment Rate. China’s unemployment rate was 4.2% for the year ended September 30, 2005.

The EMU Equity Markets

The EMU equity markets are comprised of the equity markets from the following twelve countries, which are participating in the European Economic and Monetary Union, or “EMU”: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. The MSCI EMU Index is currently comprised of companies from eleven of these EMU countries (i.e., all of the EMU countries except Luxembourg).

General Background. Following is a general background description of the equities market of each country included in the MSCI EMU Index for which there is no iShares MSCI Index Fund.

Reporting, Accounting and Auditing. Reporting, accounting and auditing standards in the nations of the Emerging Markets differ from U.S. standards. In general, corporations in the EMU do not provide all of the disclosure required by U.S. law and accounting practice, and such disclosure may be less timely and less frequent than that required of U.S. corporations.

Size of Equity Markets. The total market capitalization of the combined equity markets of Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Portugal and Spain was approximately US $3.2 trillion as of September 30, 2005.

Finland. Organized securities trading has existed in Finland since the 1860s, but it was 1912 before a formal exchange, the Helsinki Arvopaperiporssi, was founded. Since then there have been few changes in the rules governing trading in Finland. In October 1984, the management of the stock exchange in Helsinki was vested in a newly formed co-operative. That form of corporation was chosen because Finnish legislation covering cooperatives does not limit the number of members or the amount of capital. As a result, alone among the world’s stock exchanges, the Arvopaperiporssi accepts as members all companies listed on its trading board and business organizations in addition to the bankers and brokers. Decision-making and administration with the organization are vested in the annual general meeting of the co-operative, which elects the board of administration and the board of directors to manage the daily running of the exchange.

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The OTC List established in 1984 acquired an organized form in September 1985, when the Association of Securities Brokers approved the listing and regulations for the information requirements of listed companies. The brokers and brokerage firms have undertaken to act as market makers. Mainly medium-sized companies are traded on the OTC List. The OTC Market is based on an agreement between a company seeking access to the share market and a brokerage firm; both are subject to certain obligations.

Chief Industries. Finland’s chief industries are communications equipment, pulp and paper, products, industrial machinery, metals, chemicals, textiles, and shipbuilding.

Chief Imports. Finland’s chief imports consist of foodstuffs, petroleum and petroleum products, chemicals, transport equipment, iron and steel, machinery, textile yarn and fabrics, and grains.

Chief Exports. Finland’s chief exports consist of machinery and equipment, chemicals, metals, timber, paper, and pulp.

Gross Domestic Product. Finland’s GDP annual percent change was 1.9% for the year ended September 30, 2005.

Consumer Price Inflation. Finland’s CPI annual percent change was 1.2% for the year ended September 30, 2005.

Unemployment Rate. Finland’s unemployment rate was 7.1% for the year ended September 30, 2005.

Greece. The Athens Stock Exchange (the “ASE”) is a self-managed public institution, regulated by law. It is financed chiefly by annual listing fees paid by both equity and fixed-income issuers. Until 1987, the ASE had a relatively low activity market with occasional peaks. Activity exploded that year, with foreign purchases contributing to a 1,224% rise in traded share value.

Chief Industries. Greece’s chief industries are tourism, food and tobacco processing, textiles, chemicals, metal products; mining, and petroleum.

Chief Imports. Greece’s chief imports consist of machinery, transport equipment, fuels, and chemicals.

Chief Exports. Greece’s chief exports consist of food and beverages, manufactured goods, petroleum products, chemicals, and textiles.

Gross Domestic Product. Greece’s GDP annual percent change was 3.7% for the year ended September 30, 2005.

Consumer Price Inflation. Greece’s CPI annual percent change was 3.9% for the year ended September 30, 2005.

Unemployment Rate. Greece’s unemployment rate was 9.6% for the year ended June 30, 2005.

Ireland. The Irish Stock Exchange, founded in the 18th century, is the second oldest in the world. Previously it operated as part of the International Stock Exchange of the United Kingdom and Republic of Ireland. On December 8, 1995, it split from the U.K. Stock Exchange to form the Irish Stock Exchange (the “ISE”). The new exchange is committed to maintaining standards equivalent to those of the London Stock Exchange (the “LSE”), subject to adjustments dictated by Irish Law. The ISE will sign a listing protocol with the LSE, under which the ISE will maintain equivalence with the LSE rules. Companies that were listed on both the Dublin and London exchanges may apply for dual primary listing, under which they will be regulated to the same standard by both exchanges. A set of procedures has been agreed with the LSE that will streamline companies’ dealing with the two exchanges.

Chief Industries. Ireland’s chief industries are food products, brewing, textiles, clothing; chemicals, pharmaceuticals, machinery, transportation equipment, glass and crystal, and software.

Chief Imports. Ireland’s chief imports consist of data processing equipment, other machinery and equipment, chemicals, petroleum and petroleum products, textiles, and clothing.

Chief Exports. Ireland’s chief exports consist of machinery and equipment, computers, chemicals, pharmaceuticals, live animals, and animal products.

Gross Domestic Product. Ireland’s GDP annual percent change was 4.9% for the year ended December 31, 2004.

Consumer Price Inflation. Ireland’s CPI annual percent change was 2.8% for the year ended September 30, 2005

Unemployment Rate. Ireland’s unemployment rate was 4.6% for the year ended June 30, 2005.

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Portugal. EU membership marked the start of a period that has seen dramatic growth in the scope and activity of the Portuguese stock market. The Lisbon Stock Exchange is divided into three markets, each with specific requirements regarding admission to listing and trading: (1) the official market, which was created on July 23, 1991; (2) the second market, created in January 1992, which is intended for trading securities that do not meet all the requirements for admission to the official market. The main purpose of this market is to allow access to the stock exchange for small and medium-sized companies; and (3) the unofficial market, created on October 22, 1991, is intended for trading securities that do not meet the requirements for the other two markets. Securities can be admitted to this market for a limited period of time.

In 1992, the Lisbon Stock Exchange was privatized. It is now under the management of the Lisbon Stock Exchange Association. Further, the Oporto Derivatives Exchange was established in June 1996, where five futures contracts are traded.

Chief Industries. Portugal’s chief industries are textiles and footwear, wood pulp, paper, and cork; metalworking, oil refining, chemicals, fish canning, wine, and tourism.

Chief Imports. Portugal’s chief imports consist of machinery and transport equipment, chemicals, petroleum, textiles, and agricultural products.

Chief Exports. Portugal’s chief exports consist of clothing and footwear, machinery, chemicals, cork and paper products, and hides.

Gross Domestic Product. Portugal’s GDP annual percent change was 0.2% for the year ended September 30, 2005.

Consumer Price Inflation. Portugal’s CPI annual percent change was 2.8% for the year ended September 30, 2005.

Unemployment Rate. Portugal’s unemployment rate was 7.7% for the year ended September 30, 2005.

The French Equity Markets

General Background. Trading of securities in France is subject to the monopoly of the Societe de Bourse, which replaced the individual agents de change in 1991 in order to increase the cohesion of the French equity market. All purchases or sales of equity securities in listed companies on any one of the French exchanges must be executed through the Societe de Bourse. There are three different markets on which French securities may be listed: (1) the official list (La Cote Officielle), comprised of equity securities of large French and foreign companies and most bond issues; (2) the second market (Le Second Marche), designed for the trading of equity securities of smaller companies; and (3) the “Hors-Cote” Market. Securities may only be traded on the official list and the second market after they have been admitted for the listing by the Conseil des Bourses de Valeurs (the “CBV”). By contrast, the Hors-Cote Market has no prerequisites to listing, and shares of otherwise unlisted companies may be freely traded there, once they have been introduced on the market by the Societe de Bourse. Although the Hors-Cote Market is frequently referred to as an over-the-counter market, this term is inaccurate in that, like the official list and the second market, it is supervised by Societes des Bourses Francaises and regulated by the CBV.

Although there are seven stock exchanges in France (located in Paris, Bordeaux, Lille, Lyon, Marseille, Nancy and Nantes), the Paris Stock Exchange handles more than 95% of transactions in the country. All bonds and shares, whether listed or unlisted, must be traded on one of the seven exchanges. Trading in most of the Paris exchange-listed stocks takes place through the computer order-driven trading system CAC, launched in 1988. Exchange securities are denominated in the Euro. Unless otherwise provided by a double tax treaty, dividends on French shares are subject to a withholding tax of 25%.

Reporting, Accounting and Auditing. Although French reporting, accounting and auditing standards are considered rather rigorous by European standards, they differ from U.S. standards in certain material respects. In general, French corporations are not required to provide all of the disclosure required by U.S. law and accounting practice, and such disclosure may be less timely and less frequent than that required of U.S. corporations.

Size of Equity Markets. The total market capitalization of the French equity markets was approximately US$940 billion as of September 30, 2005.

Chief Industries. France’s chief industries are machinery, chemicals, automobiles, metallurgy, aircraft, electronics, textiles, food processing, and tourism.

Chief Imports. France’s chief imports consist of machinery and equipment, vehicles, crude oil, aircraft, plastics, and chemicals.

Chief Exports. France’s chief exports consist of machinery and transportation equipment, aircraft, plastics, chemicals, pharmaceutical products, iron and steel, and beverages.

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Gross Domestic Product. France’s GDP annual percent change was 1.8% for the year ended September 30, 2005.

Consumer Price Inflation. Frances’s CPI annual percent change was 2.4% for the year ended September 30, 2005.

Unemployment Rate. France’s unemployment rate was 9.8% for the year ended September 30, 2005.

The German Equity Markets

General Background. The history of Frankfurt as a financial center can be traced back to the early Middle Ages. Frankfurt had the right to issue coins as early as 1180; the first exchange office was opened in 1402. Germany has been without a central stock exchange, the position formerly held by the Berlin exchange, since 1945. Today there are eight independent stock exchanges, of which Dusseldorf and Frankfurt account for over three-quarters of the total volume. Frankfurt is the main exchange in Germany. Exchange securities are denominated in the Euro. Equities may be traded in Germany in one of three markets: (i) the official market, comprised of trading in shares which have been formally admitted to official listing by the admissions committee of the relevant stock exchange, based on disclosure in the listing application; (ii) the “semi-official” unlisted market, comprised of trading in shares not in the official listing; and (iii) the unofficial, over-the-counter market, which is governed by the provisions of the Civil Code and the Merchant Code and not by the provisions of any stock exchange. There is no stamp duty in Germany, but a nonresident capital gains tax may apply in certain circumstances.

Reporting, Accounting and Auditing. German reporting, accounting and auditing standards differ substantially from U.S. standards. In general, German corporations do not provide all of the disclosure required by U.S. law and accounting practice, and such disclosure may be less timely and less frequent than that required of U.S. corporations.

Size of Equity Markets. The total market capitalization of the Germany equity markets was approximately US$676 billion as of September 30, 2005.

Chief Industries. Germany’s chief industries are among the world’s largest and most technologically advanced producers of iron, steel, coal, cement, chemicals, machinery, vehicles, machine tools, electronics, food and beverages, shipbuilding, and textiles.

Chief Imports. Germany’s chief imports consist of machinery, vehicles, chemicals, foodstuffs, textiles, and metals.

Chief Exports. Germany’s chief exports consist of machinery, vehicles, chemicals, metals and manufactures, foodstuffs, and textiles.

Gross Domestic Product. Germany’s GDP annual percent change was 1.4% for the year ended September 30, 2005.

Consumer Price Inflation. Germany’s CPI annual percent change was 2.5% for the year ended September 30, 2005.

Unemployment Rate. Germany’s unemployment rate was 11.7% for the year ended September 30, 2005.

The Hong Kong Equity Markets

General Background. Trading in equity securities in Hong Kong began in 1891 with the formation of the Association of Stockbrokers, which was renamed in 1914 to the Hong Kong Stock Exchange. In 1921, a second stock exchange, The Hong Kong Stockbrokers’ Association, was established. In 1947, these two exchanges were merged under the name The Hong Kong Stock Exchange Limited. Three additional exchanges, the Far East Exchange Limited (1969), The Kam Ngan Stock Exchange (1971) and The Kowloon Stock Exchange (1972) also commenced trading activities to reestablish the stock market after the Second World War. Pressure to strengthen market regulation and to unify the four exchanges led to the incorporation of the Stock Exchange of Hong Kong Limited (the “SEHK”) in 1980. The four exchanges ceased business in March of 1986 and the new exchange commenced trading through a computer-assisted system about one week later. In March 2000, The Stock Exchange of Hong Kong Limited, Hong Kong Futures Exchange Limited demutualised and together with Hong Kong Securities Clearing Limited, merged under a single holding company, HKEx. Trading on the HKEx is conducted in the post trading method, matching buyers and sellers through public outcry. Securities are denominated in the official unit of currency, the Hong Kong Dollar. Foreign investment in Hong Kong is generally unrestricted and proper regulatory oversight is administered by the Hong Kong Securities and Futures Commission. All investors are subject to a small stamp duty and a stock exchange levy, but capital gains are tax-exempt.

Reporting, Accounting and Auditing. Hong Kong has significantly upgraded the required presentation of financial information in the past decade. Nevertheless, reporting, accounting and auditing practices remain significantly less rigorous than U.S. standards. In general, Hong Kong corporations are not required to provide all of the disclosure required by U.S. law and accounting practice, and such disclosure may be less timely and less frequent than that required of U.S. corporations.

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Size of Equity Markets. The total market capitalization of the Hong Kong equity markets was approximately US$174 billion as of September 30, 2005.

Chief Industries. Hong Kong’s chief industries are textiles, clothing, tourism, banking, shipping, electronics, plastics, toys, watches, and clocks.

Chief Imports. Hong Kong’s chief imports consist of electrical machinery and appliances, textiles, foodstuffs, transport equipment, raw materials, semi manufactures, petroleum and plastics.

Chief Exports. Hong Kong’s chief exports consist of electrical machinery and appliances , textiles, apparel footwear, watches and clocks, toys, plastics, and precious stones.

Gross Domestic Product. Hong Kong’s GDP annual percent change was 8.2% for the year ended September 30, 2005.

Consumer Price Inflation. Hong Kong’s CPI annual percent change was 1.6% for the year ended September 30, 2005.

Unemployment Rate. Hong Kong’s unemployment rate was 5.5% for the year ended September 30, 2005.

The Italian Equity Markets

General Background. The regulatory structure of the Italian Stock Exchange changed radically in February 1997, when the Italian Stock Exchange Council set up a new private company, “Borsa Italiana Spa”, which is now responsible for the regulation, promotion and management of the Stock Exchange, the unlisted securities market and the Italian Derivatives Market (the “IDEM”).

In 1991, the Parliament passed legislation creating Societa de intermediazone mobiliare (SIMs). SIMS were created to regulate brokerage activities in the securities market and are allowed to trade on their own and for customers’ accounts.

In November 1994, the IDEM started trading its first exchange-listed derivatives product, the Mib 30 index futures contract (Fib 30). In November 1995, the MIB30 Index option (MIBO30) began trading on the IDEM. In February 1996, options were introduced on single stocks, together with the transfer of all shares to a rolling settlement basis. In March 1998, the MIDEX Index contract, the futures contract on the 25 Mid-Cap Stock Index, was launched. In September 2004, the MIB 30 index futures contract was discontinued and replaced with the S&P/MIB index futures contract.

Access to the Italian trading system can be obtained directly through the terminals provided to users or indirectly through users’ own front office systems (using Application Programming Interfaces). The latter allows the use of information, analytical and trading functions developed by the users.

Reporting, Accounting and Auditing. Italian reporting, accounting and auditing practices are regulated by Italy’s National Control Commission (Consob). These practices bear some similarities to United States standards. However, in general, Italian corporations do not provide all of the disclosure required by U.S. law and accounting practice, and such disclosure may be less timely, less frequent and less consistent than that required of U.S. corporations. Italy is, however, moving toward more transparency: from 2000, for example, the law will require quarterly disclosure.

Size of Equity Markets. The total market capitalization of the Italian equity markets was approximately US$378 billion as of September 30, 2005.

Chief Industries. Italy’s chief industries are tourism, machinery, iron and steel, chemicals, food processing, textiles, motor vehicles, clothing, footwear, and ceramics.

Chief Imports. Italy’s chief imports consist of engineering products, chemicals, transport equipment, energy products, minerals and nonferrous metals, textiles and clothing, food, beverages, and tobacco.

Chief Exports. Italy’s chief exports consist of engineering products, textiles and clothing, production machinery, motor vehicles, transport equipment, chemicals; food, beverages and tobacco, minerals, and nonferrous metals.

Gross Domestic Product. Italy’s GDP annual percent change was 0.0% for the year ended September 30, 2005.

Consumer Price Inflation. Italy’s CPI annual percent change was 2.2% for the year ended September 30, 2005.

Unemployment Rate. Italy’s unemployment rate was 7.7% for the year ended June 30, 2005.

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The Japanese Equity Markets

General Background. The Japanese stock market has a history of over 100 years beginning with the establishment of the Tokyo Stock Exchange Company Ltd. in 1878. The securities market was forced to suspend trading sessions on all securities markets in 1945. With the end of the Second World War and the enactment of the Securities and Exchange Law in 1947, Japan opened eight additional stock exchanges during 1949 in Tokyo, Osaka, Nagoya, Kyoto, Kobe, Hiroshima, Fukuoka and Niigata. The Sapporo Securities Exchange was later established in 1950. Kobe was dissolved in October 1967, Hiroshima and Niigata merged into the Tokyo Stock Exchange in March 2000, and Kyoto merged into Osaka Securities Exchange in March 2001. Consequently, Japan now has five stock exchanges (Tokyo, Osaka, Nagoya, Fukuokaand Sapporo). There is also an over-the-counter market. There are four distinct sections on the main Japanese stock exchanges. The First Section trades in over 1,500 of the largest and most active stocks, which account for over 95% of total market capitalization. The Second Section consists of over 500 issues with lower turnover than the First Section, which are newly quoted on the exchange or which are not listed and would otherwise be traded over-the-counter. The third section, known as Mothers (“Market of the high-growth and emerging stocks”) was established in November 1999 in order to provide venture companies access to funds at an early stage of their development and to provide investors with more diversified investment product. The fourth section of the Japanese market consists of foreign stocks that are traded over-the-counter. The main activity of the regular exchange members is the buying and selling of securities on the floor of an exchange, both for their customers and for their own account. Japan is second only to the United States in aggregate stock market capitalization. Securities are denominated in the official unit of currency, the Japanese Yen. Takeover activity is negligible in Tokyo, and although foreign investors play a significant role, the trend of the market is set by the domestic investor. The Securities and Exchange Surveillance Commission (SESC) was established in July 1992 within the ambit of the Ministry of Finance in order to ensure compliance with rules set within the securities and financial futures markets.

Reporting, Accounting and Auditing. Although some Japanese reporting, accounting and auditing practices are based substantially on U.S. principles, they are not identical to U.S. standards in some important respects, particularly with regard to unconsolidated subsidiaries and related structures. In general, Japanese corporations are not required to provide all of the disclosure required by U.S. law and accounting practice, and such disclosure may be less timely and less frequent than that required of U.S. corporations.

Size of Equity Markets. The total market capitalization of the Japanese equity markets was approximately US$2.3 trillion as of September 30, 2005.

Chief Industries. Japan’s chief industries are among world’s largest and technologically advanced producers of motor vehicles, electronic equipment, machine tools, steel and nonferrous metals, ships, chemicals, textiles, and processed foods.

Chief Imports. Japan’s chief imports consist of machinery and equipment, fuels, foodstuffs, chemicals, textiles, and raw materials.

Chief Exports. Japan’s chief exports consist of motor vehicles, semiconductors, office machinery, and chemicals.

Gross Domestic Product. Japan’s GDP annual percent change was 3.0% for the year ended September 30, 2005.

Consumer Price Inflation. Japan’s CPI annual percent change was -0.3% for the year ended September 30, 2005.

Unemployment Rate. Japan’s unemployment rate was 4.2% for the year ended September 30, 2005.

The Malaysian Equity Markets

General Background. The securities industry in Malaysia dates back to the early 1930’s. Kuala Lumpur and Singapore were a single exchange until 1973 when they separated and the Kuala Lumpur Stock Exchange (the “KLSE”) was formed. The KLSE operated under a provisional set of rules until 1983 when a new Securities Industry Act came into force. As of September 30, 2005, 642 companies were listed on the KLSE main board. A Second Board, established in 1988, allows smaller companies to tap additional capital. There were 265 companies listed on the Second Board as of September 30, 2005. On June 11th of 2001 the Malaysia Derivatives Exchange (MDEX) was launched offering a wide range of derivative products. In March of 2002 a third stock market was launched in Malaysia, the MESDAQ. Over the years, the KLSE’s close links with the Stock Exchange of Singapore (the “SES”) has rendered it very vulnerable to developments in Singapore. Consequently, the Government decided, as a matter of national policy, on a delisting of Malaysian incorporated companies from the SES. This was effected on January 1, 1990. A similar move was made by Singapore, resulting in the delisting of all Singapore companies on the KLSE on January 1, 1990. There are two main stock indices in Malaysia. The wider ranging KLSE Composite represents 80 companies. The New Straits Times Industrial Index is an average of 30 industrial stocks.

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Malaysian currency volatility and general economic deterioration led to the imposition of stringent capital controls in September 1998, including a one year prohibition on repatriation of capital and an indefinite prohibition on free transfers of securities. The prohibition on repatriation of capital was removed in February 1999 but the controls have adversely impacted foreign investors, including the Fund, which suspended creations in response to the controls. This adversely affected the trading market for the shares of the iShares MSCI Malaysia Index Fund.

Reporting, Accounting and Auditing. Malaysian reporting, accounting and auditing standards differ substantially from U.S. standards. In general, Malaysian corporations do not provide all of the disclosure required by U.S. law and accounting practice, and such disclosure may be less timely and less frequent than that required of U.S. corporations.

Size of Equity Markets. The total market capitalization of the Malaysian equity markets was approximately US$49 billion as of September 30, 2005.

Chief Industries. Peninsular Malaysia’s main industries are rubber and oil palm processing and manufacturing, light manufacturing industry, electronics, tin mining and smelting, logging and processing timber. Sabah’s main industries are logging, and petroleum production. Sarawak’s main industries are agriculture processing, petroleum production and refining, and logging.

Chief Imports. Malaysia’s chief imports consist of electronics, machinery, petroleum products, plastics, vehicles, iron and steel and iron and steel products, and chemicals.

Chief Exports. Malaysia’s chief exports consist of electronic equipment, petroleum and liquefied natural gas, wood and wood products, palm oil, rubber, textiles, and chemicals.

Gross Domestic Product. Malaysia’s GDP annual percent change was 5.3% for the year ended September 30, 2005.

Consumer Price Inflation. Malaysia’s CPI annual percent change was 3.4% for the year ended September 30, 2005.

Unemployment Rate. Malaysia’s unemployment rate was 3.5% for the year ended December 31, 2004.

The Mexican Equity Markets

General Background. There is only one stock exchange in Mexico, the Bolsa Mexicana de Valores (the “BMV”), which was established in 1894 and is located in Mexico City. The stock exchange is a private institution legally incorporated as a limited company with variable capital that operates under a concession from the Ministry of Finance and Public Credit and it governed by the Mexican Securities Market Act. The National Banking and Securities Commission (the “CNV”) supervises the stock exchange. The Mexican exchange operates primarily via the open outcry method. However, firm orders in writing can supersede this system, provided there is a perfect match of the details of a buy and sell order. Executions on the exchange can be done by members only. Membership of the stock exchange is restricted to Casas de Bolsa brokerage houses and Especialistas Bursatiles (stock exchange specialists).

Reporting, Accounting and Auditing. Mexican reporting, accounting and auditing standards differ substantially from U.S. standards. In general, Mexican corporations do not provide all of the disclosure required by U.S. law and accounting practice, and such disclosure may be less timely and less frequent than that required of U.S. corporations.

Size of Equity Markets. The total market capitalization of the Mexican equity markets was approximately US$94 billion as of September 30, 2005.

Chief Industries. Mexico’s chief industries are food and beverages, tobacco, chemicals, iron and steel, petroleum, mining, textiles, clothing, motor vehicles, consumer durables, and tourism.

Chief Imports. Mexico’s chief imports consist of metalworking machines, steel mill products, agricultural machinery, electrical equipment, car parts for assembly, repair parts for motor vehicles, aircraft, and aircraft parts.

Chief Exports. Mexico’s chief exports consist of manufactured goods, oil and oil products, silver, fruits, vegetables, coffee, and cotton.

Gross Domestic Product. Mexico’s GDP annual percent change was 3.3% for the year ended September 30, 2005.

Consumer Price Inflation. Mexico’s CPI annual percent change was 3.5 % for the year ended September 30, 2005.

Unemployment Rate. Mexico’s unemployment rate was 3.7% for the year ended September 30, 2005.

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The Netherlands Equity Markets

General Background. Trading securities on the AEX Stock Exchange (the “AEX”) (formerly the Amsterdam Stock Exchange) started at the beginning of the seventeenth century. The United East India Company was the first company in the world financed by an issue of shares, and such issue was effected through the exchange. The Netherlands claims the honor of having the oldest established stock exchange in existence. In 1611 a stock market began trading in the coffee houses along the Dam Square. A more formal establishment, the Amsterdam Stock Exchange Association, began trading industrial stocks in 1876, and until World War II, Amsterdam ranked after New York and London as the third most important stock market in the world. After the war, the Amsterdam Stock Exchange only gradually began to resume its activities, as members felt threatened by what they saw as an impending socialist order which would leave little of the stock market intact. Since the end of the war, the Dutch market has remained relatively neglected, as local companies have found it more favorable to use bank financing to meet their capital requirements. Trading in shares on the AEX may take place on the official market or on the parallel market, which is available to medium-sized and smaller companies that cannot yet meet the requirements demanded for the official market.

Reporting, Accounting and Auditing. Dutch reporting, accounting and auditing standards differ substantially from U.S. standards. In general, Dutch corporations do not provide all of the disclosure required by U.S. law and accounting practice, and such disclosure may be less timely and less frequent than that required of U.S. corporations.

Size of Equity Markets. The total market capitalization of the Dutch equity markets was approximately US$319 billion as of September 30, 2005.

Chief Industries. The Netherlands’ chief industries are predominantly in petroleum refining, chemicals, financial services, packaged goods, and consumer electronics.

Chief Imports. The Netherlands’ chief imports consist of metal and engineering products, machinery and transport equipment, chemicals, petroleum, and food processing.

Chief Exports. The Netherlands’ chief exports consist of machinery and equipment, chemicals, fuels, and foodstuffs.

Gross Domestic Product. The Netherlands’ GDP annual percent change was 0.8% for the year ended September 30, 2005.

Consumer Price Inflation. The Netherlands’ CPI annual percent change was 1.8% for the year ended September 30, 2005.

Unemployment Rate. The Netherlands’ unemployment rate was 6.4% for the year ended September 30, 2005.

The Pacific Ex-Japan Equity Markets

The Pacific ex-Japan equity markets are comprised of the equity markets from Australia, Hong Kong, New Zealand and Singapore.

General Background. Following is a general background description of the New Zealand equity market for which there is no iShares MSCI Index Fund.

Reporting, Accounting and Auditing. Reporting, accounting and auditing standards in the nations that make up the Pacific ex Japan equity markets differ substantially from U.S. standards. In general, these countries’ corporations do not provide all of the disclosure required by U.S. law and accounting practice, and such disclosure may be less timely and less frequent than that required of U.S. corporations.

Size of Equity Markets. The total market capitalization of the combined equity markets of Australia, Hong Kong, New Zealand and Singapore was approximately US$8.15 billion as of September 30, 2005.

New Zealand. The New Zealand Stock Exchange (the “NZSE”) was originated in the 1870’s in four regions: Auckland, Thames, Dunedin and Reefton. In 1915, the Stock Exchange Association of New Zealand was formed. The Sharebrokers Act Amendment 1981governs the operations of the NZSE. During 1989, the Exchange changed from four separate entities to one. Additionally, a Board of Directors was appointed to replace the traditional council. The NZSE also appointed an independent Market Surveillance Panel and adopted revised Listing Rules. On June 24, 1991, they also eliminated the open outcry market and on August 1, 1992, introduced its FASTER system of electronic transfer and moved to fully automated clearing and settlement of trades.

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Chief Industries. New Zealand’s chief industries are integrated telecommunication services, construction materials, casinos and gaming, airport services, food processing, wood and paper products, textiles, machinery, transportation equipment, banking and insurance, tourism, and mining.

Chief Imports. New Zealand’s chief imports consist of machinery and equipment, vehicles and aircraft, petroleum, electronics, textiles, and plastics.

Chief Exports. New Zealand’s chief exports consist of dairy products, meat, wood and wood products, fish, and machinery.

Gross Domestic Product. New Zealand’s GDP annual percent change was 2.6% for the year ended June 30, 2005.

Consumer Price Inflation. New Zealand’s CPI annual percent change was 3.4% for the year ended September 30, 2005.

Unemployment Rate. New Zealand’s unemployment rate was 3.4% for the year ended September 30, 2005.

The Singaporean Equity Markets

General Background. The Stock Exchange of Singapore (the “SES”) was formed in 1973 with the separation of the joint stock exchange with Malaysia, which had been in existence since 1930. The linkage between the SES and the KLSEB (Kuala Lumpur Stock Exchange Bhd) remained strong as many companies in Singapore and Malaysia jointly listed on both exchanges, until January 1, 1990 when the dual listing was terminated. SES has a tiered market, with the formation of the second securities market, SESDAQ (Stock Exchange of Singapore Dealing and Automated Quotation System) in 1987. SESDAQ was designed to provide an avenue for small and medium-sized companies to raise funds for expansion. In 1990, SES introduced an over-the-counter (“OTC”) market known as CLOB (Central Limit Order Book), to allow investors access to international securities listed on foreign exchanges. SES also has a direct link with the National Association of Securities Dealers Automated Quotation (“NASDAQ”) system, which was set up in March 1988 to allow traders in the Asian time zone access to selected securities on the U.S. OTC markets. This is made possible through a daily exchange of trading prices and volumes of the stocks quoted on NASDAQ. The Singapore Stock Exchange is one of the most developed in Asia and has a strong international orientation.

Reporting, Accounting and Auditing. Singaporean reporting, accounting and auditing standards differ substantially from U.S. standards. In general, Singaporean corporations do not provide all of the disclosure required by U.S. law and accounting practice, and such disclosure may be less timely and less frequent than that required of U.S. corporations.

Size of Equity Markets. The total market capitalization of the Singaporean markets was approximately US$82 billion as of September 30, 2005.

Chief Industries. Singapore’s chief industries are electronics, chemicals, financial services, oil drilling equipment, petroleum refining, rubber processing and rubber products, processed food and beverages, ship repair, offshore platform construction, life sciences, and entrepot trade.

Chief Imports. Singapore’s chief imports consist of machinery and equipment, mineral fuels, chemicals, and foodstuffs.

Chief Exports. Singapore’s chief exports consist of machinery and equipment (including electronics), consumer goods, chemicals, and mineral fuels.

Gross Domestic Product. Singapore’s GDP annual percent change was 7.0% for the year ended September 30, 2005.

Consumer Price Inflation. Singapore’s CPI annual percent change was 0.6% for the year ended September 30, 2005.

Unemployment Rate. Singapore’s unemployment rate was 3.3% for the year ended September 30, 2005.

The South African Equity Markets

General Background. The Johannesburg Stock Exchange (the “JSE”), the only stock exchange in South Africa, was initially founded in 1887. The JSE operates an equities market. However, many of the members of the JSE also participate in the trading of bonds and financial futures, with traditional options traded on an OTC basis. Introduced in November 1995, corporate limited liability membership with ownership by non-stockbrokers was established to supplement the present membership of partnerships, unlimited liability corporate members or sole traders. Foreigners are allowed by the JSE to operate as member firms.

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Reporting, Accounting and Auditing. South African reporting, accounting and auditing standards differ substantially from U.S. standards. In general, South African corporations do not provide all of the disclosure required by U.S. law and accounting practice, and such disclosure may be less timely and less frequent than that required of U.S. corporations.

Size of Equity Markets. The total market capitalization of the South African equity markets was approximately US$162 billion as of September 30, 2005.

Chief Industries. South Africa’s chief industries consist of mining (it is the world’s largest producer of platinum, gold, chromium), automobile assembly, metal working, machinery, textile, iron and steel, chemicals, fertilizer and foodstuffs.

Chief Imports. South Africa’s chief imports consist of machinery, foodstuffs and equipment, chemicals, petroleum products and scientific instruments.

Chief Exports. South Africa’s chief exports consist of gold, diamonds, platinum, other metals, minerals, machinery and equipment.

Gross Domestic Product. South Africa’s GDP annual percent change was 4.9% for the year ended September 30, 2005.

Consumer Price Inflation. South Africa’s CPI annual percent change was 4.4% for the year ended September 30, 2005.

Unemployment Rate. South Africa’s unemployment rate was 26.5% for the year ended March 31, 2005.

The South Korean Equity Markets

General Background. After the formation of South Korea in 1948, the government issued Farmland Compensation Bonds to landowners in exchange for their farmland, and Kunkuk Bonds to cover their financial debt. The Daehan Stock Exchange was established in 1956 to enable trading of these bonds. The South Korea Stock Exchange was established several years later. The government enacted the Securities and Exchange Law in January 1962 as part of the First Five Year Economic Plan. The law was intended to help South Korean companies arrange funds for economic development by using the stock market. Within a year the market boomed and crashed.

The Securities and Exchange Law was amended in April 1962 to impose stricter regulatory measures on the operation of the securities market. The stock exchange became a non-profit, government-owned corporation called the South Korea Stock Exchange. However, the securities market was unable to overcome the aftermath of the crash and entered a period of inactivity.

In 1967, as part of the Second Five Year Economic Plan, the government encouraged the public to invest in the stock market by increasing the number of listed companies and the acceptability of equity shares. Tax advantages were given to companies that went public. Further legislation was passed in 1972 to encourage share flotation in the belief that corporations would reduce their high financing costs by converting bank loans into share capital.

As a result of these market measures, the number of listed companies started to increase. The Securities and Exchange Commission and its executive body, the Securities Supervisory Board, were established to strengthen investor protection.

The South Korea Securities Settlement Corporation, since renamed the South Korea Depository Corporation (KSD), was set up in 1974 to act as the clearing agent for the stock exchange and as the central depository. In 1977, the South Korea Securities Computer Corporation was established as an electronic data processing center for the securities industry to enable members to transmit orders directly to the trading floor.

In 1981, the government announced its long-term plans for opening the South Korean securities market to foreigners. International investment trusts were established and the South Korea Fund and the South Korea Europe Fund were incorporated overseas. In 1985, the government began to allow some domestic corporations to issue convertible bonds, bonds with warrants and depository receipts overseas. The government also eased controls to allow domestic institutional investors to invest in foreign securities. In December 1988, a new, detailed plan was put forward for the internationalization of the capital market from 1989 to 1992. A more open capital market was proposed to improve the financial structure of domestic firms and to strengthen their international competitiveness. The firms would be given access to an expanded and revitalized domestic capital market and cheaper sources of financing in the international markets. The stock market began to be opened to foreign investors in January 1992.

Reporting, Accounting and Auditing. South Korean reporting, accounting and auditing standards differ substantially from U.S. standards. In general, South Korean corporations do not provide all of the disclosure required by U.S. law and accounting practice, and such disclosure may be less timely and less frequent than that required of U.S. corporations.

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Size of Equity Markets. The total market capitalization of the South Korean equity markets was approximately US$268 billion as of September 30, 2005.

Chief Industries. South Korea’s chief industries are electronics, financial services, telecommunications, automobile production, chemicals, shipbuilding and repair and steel.

Chief Imports. South Korea’s chief imports consist of machinery and equipment, oil, organic chemicals, plastics and transport equipment.

Chief Exports. South Korea’s chief exports consist of semiconductors, wireless telecommunications equipment, motor vehicles, computer equipment, steel, ships, and petrochemicals.

Gross Domestic Product. South Korea’s GDP annual percent change was 4.5% for the year ended September 30, 2005.

Consumer Price Inflation. South Korea’s CPI annual percent change was 2.7% for the year ended September 30, 2005.

Unemployment Rate. South Korea’s unemployment rate was 4.0% for the year ended September 30, 2005.

The Spanish Equity Markets

General Background. The Securities Market Act (the “LMV”) recognizes the following as official secondary markets: stock exchanges; the public debt market organized by the Bank of Spain; and futures and options markets. Stock exchanges in Spain (Madrid, Bilbao, Barcelona and Valencia) are the official secondary markets which trade shares and convertible bonds or those which grant the right of purchase or subscription. Issuers of shares go to the stock market as the primary market, where they formalize transactions or capital increases. Fixed-income securities (both governmental and private sector debt) are also traded on the stock market.

The organization and functioning of each stock exchange is the responsibility of each respective governing body (Sociedad Rectora), each of which is a limited company whose sole shareholders are the dealer-brokers and brokers and the stock exchanges themselves. The Sociedad de Bolsa, established by the four stock exchanges, is responsible for the technical management of the computerized trading system, which operates at a national level. Under the LMV, the National Securities Market Commission (the “CNMV”) is responsible for supervising and inspecting the securities markets as well as the activity of all individuals and companies who deal with the markets. It has the power to punish and other functions.

These Spanish futures and options markets are organized by the holding company MEFF (Mercado Espanol de Futuros Financieros) Sociedad Holding and two subsidiaries: MEFF Renta Variable (equities), based in Madrid, and MEFF Renta Fija (fixed-income securities), based in Barcelona. MEFF Renta Variable manages the trading of options and futures on the Ibex-35 stock index, and individual options on certain shares. MEFF Renta Fija manages the trading of futures and options on interest rates and bonds.

Bonds, Treasury bills and debt issued by other public administrations and organizations are traded in the public debt market. These securities are also traded at the same time on the stock market, which has a specific trading system for them. The Bank of Spain’s Book-Entry Office is responsible for supervising the public debt market.

Reporting, Accounting and Auditing. Spanish reporting, accounting and auditing standards differ substantially from U.S. standards. In general, Spanish corporations do not provide all of the disclosure required by U.S. law and accounting practice, and such disclosure may be less timely and less frequent than that required of U.S. corporations.

Size of Equity Markets. The total market capitalization of the Spanish equity markets was approximately US$389 billion as of September 30, 2005.

Chief Industries. Spain’s chief industries are textiles and apparel (including footwear), food and beverages, metals and metal manufactures, chemicals, shipbuilding, automobiles, machine tools, and tourism.

Chief Imports. Spain’s chief imports consist of machinery and equipment, fuels, chemicals, semi finished goods, foodstuffs, consumer goods.

Chief Exports. Spain’s chief exports consist of machinery, motor vehicles; foodstuffs, other consumer goods.

Gross Domestic Product. Spain’s GDP annual percent change was 3.5% for the year ended September 30, 2005.

Consumer Price Inflation. Spain’s CPI annual percent change was 3.7% for the year ended September 30, 2005.

Unemployment Rate. Spain’s unemployment rate was 8.4% for the year ended September 30, 2005.

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The Swedish Equity Markets

General Background. Organized trading of securities in Sweden can be traced back to 1776. Although the Stockholm Stock Exchange was founded in 1864, the real formation of a stock exchange in an international sense took place in 1901. The statutes of the Stock Exchange were modified in 1906 and, from the beginning of 1907, commercial banks were admitted as members. During the 1970s, the Stockholm market had low turnover and dull trading conditions. The market started to climb in 1980 and for several years Stockholm was one of the best performing stock markets, in terms of both price and volume growth. This regeneration of a market for risk capital was reflected in the large number of companies introduced in the early 1980s. The Stockholm Stock Exchange is structured on a membership basis, under the supervision of the Bank Inspection Board. The Board consists of 11 directors and one chief executive. The directors of the Board are elected by the Swedish government, the Association of the Swedish Chamber of Commerce, the Federation of Swedish Industries and the member companies of the Stock Exchange. There are three different markets for trading shares in Sweden. The dominant market is the A-1 list, for the largest and most heavily traded companies. The second market is the over-the-counter market, which is more loosely regulated than the official market and caters to small- and medium-sized companies. The third market is the unofficial parallel market, which deals in unlisted shares, both on and off the exchange floor. The shares most frequently traded on this market are those which have been de-listed from other markets and those that are only occasionally available for trading.

On July 1, 1999, the Stockholm Stock Exchange and OM Stockholm merged to create the OM Stockholm Exchange—OM Stockholmsborsen AB. In addition, the Stockholm Stock Exchange and the Copenhagen Stock Exchange have signed an agreement covering a common Nordic securities market, (“NOREX”).

There are also two independent markets for options—the Swedish Options Market (the “OM”) and the Swedish Options and Futures Exchange (the “SOFE”), which offer calls, puts and forwards on Swedish stocks and stock market indices.

Reporting, Accounting and Auditing. Swedish reporting, accounting and auditing standards differ substantially from U.S. standards. In general, Swedish corporations do not provide all of the disclosure required by U.S. law and accounting practice, and such disclosure may be less timely and less frequent than that required of U.S. corporations. The basic concepts used are historical cost, going concern, accrual basis, consistency and prudence.

Size of Equity Markets. The total market capitalization of the Swedish equity markets was approximately US$237 billion as of September 30, 2005.

Chief Industries. Sweden’s chief industries are communications equipment, diversified financial services, wood pulp and paper products, processed foods and industrial & construction machinery.

Chief Imports. Sweden’s chief imports consist of machinery, petroleum and petroleum products, chemicals, motor vehicles, iron and steel; foodstuffs, and clothing.

Chief Exports. Sweden’s chief exports consist of machinery, motor vehicles, paper products, pulp and wood, iron and steel products, and chemicals.

Gross Domestic Product. Sweden’s GDP annual percent change was 2.8% for the year ended September 30, 2005.

Consumer Price Inflation. Sweden’s CPI annual percent change was 0.6% for the year ended September 30, 2005.

Unemployment Rate. Sweden’s unemployment rate was 5.4% for the year ended September 30, 2005.

The Swiss Equity Markets

General Background. There are three principal stock exchanges in Switzerland, the largest of which is Zurich, followed by Geneva and Basle. The Geneva exchange is the oldest and was formally organized in 1850. The Basle and the Zurich exchanges were founded in 1876 and 1877, respectively. The Geneva Exchange is a corporation under public law and in Zurich and Basle the exchanges are institutions under public law. There are three different market segments for the trading of equities in Switzerland. The first is the official market, the second is the semi-official market, and the third is the unofficial market. On the official market, trading takes place among members of the exchange on the official trading floors. Trading in the semi-official market also takes place on the floors of the exchanges, but this market has traditionally been reserved for smaller companies not yet officially accepted on the exchange. Unofficial market trades are conducted by members and non-members alike. Typical trading on this market involves shares with small turnover. Both listed and unlisted securities can, however, be traded on this market.

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Since July 1998, SWX has provided facilities for electronic trading in Eurobonds. Repo SWX, the first electronic market for repos with integrated clearing and settlement, was inaugurated in June 1999. In addition, SWX launched a new market segment for emerging-growth companies in July 1999, under the name SWX New Market. Eurex, the first trans-national derivatives market, is a co-operative venture between the SWX Swiss Exchange and Deutsche Borse Ag, each of which holds a 50% stake. Eurex is the largest derivative exchange in the world.

Reporting, Accounting and Auditing. Swiss reporting, accounting and auditing standards differ substantially from U.S. standards. In general, Swiss corporations do not provide all of the disclosure required by U.S. law and accounting practice, and such disclosure may be less timely and less frequent than that required of U.S. corporations.

Size of Equity Markets. The total market capitalization of the Swiss equity markets was approximately US$661 billion as of September 30, 2005.

Chief Industries. Switzerland’s chief industries are machinery, chemicals, watches, textiles, and precision instruments.

Chief Imports. Switzerland’s chief imports consist of machinery, chemicals, vehicles, metals, agricultural products, and textiles.

Chief Exports. Switzerland’s chief exports consist of machinery, chemicals, metals, watches, and agricultural products.

Gross Domestic Product. Switzerland’s GDP annual percent change was 2.2% for the year ended September 30, 2005.

Consumer Price Inflation. Switzerland’s CPI annual percent change was 1.4% for the year ended September 30, 2005.

Unemployment Rate. Switzerland’s unemployment rate was 3.8% for the year ended September 30, 2005.

The Taiwanese Equity Markets

General Background. The Taiwan Stock Exchange, located in Taipei, is the only stock exchange in Taiwan. Its roots can be traced to the Land Reform Movement of 1953. The government bought tracts of land from large landowners and paid for them with bonds and shares in government-owned companies. The need to trade those shares and bonds gradually bred the formation of a fledging over-the-counter market. As the economy prospered, the importance of a securities market was recognized. The government established the Securities Market Research Committee to study the feasibility of a formal stock market. Consequently, the Securities and Exchange Commission was established on September 1, 1960, as a department of the Ministry of Finance. The Taiwan Stock Exchange (the “TSE”) was founded a year later and officially commenced operation in February 1962.

In the exchange’s first year, there were 18 listed companies with an average trading volume of TWD 1,647,760. By 1963, there were 23 listed companies; by 1980, there were 100; and by 2004 there were 669. As listings steadily increased, the market remained stable for several years. Since then, the number of brokerage firms has multiplied and limitations on foreign investors have recently been relaxed.

Reporting, Accounting and Auditing. Taiwanese reporting, accounting and auditing standards differ substantially from U.S. standards. In general, Taiwanese corporations do not provide all of the disclosure required by U.S. law and accounting practice, and such disclosure may be less timely and less frequent than that required of U.S. corporations.

Size of Equity Markets. The total market capitalization of the Taiwanese equity markets was approximately US$218 billion as of September 30, 2005.

Chief Industries. Taiwan’s chief industries are electronics, petroleum refining, chemicals, textiles, iron and steel, machinery, cement, and food processing.

Chief Imports. Taiwan’s chief imports consist of machinery and electrical equipment, minerals, and precision instruments.

Chief Exports. Taiwan’s chief exports consist of machinery and electrical equipment, metals, textiles, plastics, and chemicals.

Gross Domestic Product. Taiwan’s GDP annual percent change was 2.4% for the year ended September 30, 2005.

Consumer Price Inflation. Taiwan’s CPI annual percent change was 3.2 % for the year ended September 30, 2005.

Unemployment Rate. Taiwan’s unemployment rate was 4.0% for the year ended September 30, 2005.

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The United Kingdom Equity Markets

General Background. The UK is Europe’s largest equity market in terms of aggregate market capitalization. Trading is fully computerized under the SETS System for FTSE-100 (and 83 other) stocks and the Stock Exchange Automated Quotation System (the “SEAQ”) operates for international equities. The London Stock Exchange exists alongside Tradepoint, while there is also a network of regional offices. The London Stock Exchange has the largest volume of trading in international equities in the world.

Reporting, Accounting and Auditing. Despite having a great deal of common purpose and common concepts, the accounting principles in the UK and the U.S. can lead to markedly different financial statements. In the global market for capital, investors may want to know about a company’s results and financial position under their own principles. This is particularly so in the U.S. capital markets. The overriding requirement for a UK company’s financial statements is that they give a ‘true and fair’ view. Accounting standards are an authoritative source as to what is and is not a true and fair view, but do not define it unequivocally. Ad hoc adaptations to specific circumstances may be required. In the U.S., financial statements are more conformed because they must be prepared in accordance with Generally Accepted Accounting Principles (“GAAP”).

Size of Equity Markets. The total market capitalization of the United Kingdom equity markets was approximately US$2.5 trillion as of September 30, 2005.

Chief Industries. United Kingdom’s chief industries are machine tools, electric power equipment, automation equipment, railroad equipment, shipbuilding, aircraft, motor vehicles and parts, electronics and communications equipment, metals, chemicals, coal, petroleum, paper and paper products, food processing, textiles, clothing, and other consumer goods.

Chief Imports. United Kingdom’s chief imports consist of manufactured goods, machinery, fuels, and foodstuffs.

Chief Exports. United Kingdom’s chief exports consist of manufactured goods, fuels, chemicals, food, beverages, and tobacco.

Gross Domestic Product. United Kingdom’s GDP annual percent change was 1.7% for the year ended September 30, 2005.

Consumer Price Inflation. United Kingdom’s CPI annual percent change was 2.5% for the year ended September 30, 2005.

Unemployment Rate. United Kingdom’s unemployment rate was 2.8% for the year ended September 30, 2005.

THE MSCI EQUITY INDICES

In General. The MSCI Indices were founded in 1969 by Capital International S.A. as the first international performance benchmarks constructed to facilitate accurate comparison of world markets. Morgan Stanley acquired rights to the Indices in 1986. In November 1998, Morgan Stanley transferred all rights to the MSCI Indices to Morgan Stanley Capital International Inc. (“MSCI”), a Delaware corporation of which Morgan Stanley is the majority owner and The Capital Group of Companies, Inc. is the minority shareholder. The MSCI single country standard equity indices have covered the world’s developed markets since 1969, and in 1988, MSCI commenced coverage of the emerging markets.

Local stock exchanges traditionally calculated their own indices that were generally not comparable with one another due to differences in the representation of the local market, mathematical formulas, base dates and methods of adjusting for capital changes. MSCI, however, applies the same criteria and calculation methodology across all markets for all single country standard equity indices, developed and emerging.

MSCI single country standard equity indices are notable for the depth and breadth of their coverage. MSCI’s single country standard equity indices generally seek to have 85% of the free float-adjusted market capitalization of a country’s stock market reflected in the MSCI Index for that country. The MSCI single country standard equity indices seek to balance the inclusiveness of an “all share” index against the replicability of a “blue chip” index.

The MSCI value and growth indices are subsets of the MSCI single country standard equity indices and seek to target approximately 50% of the market capitalization represented by the underlying standard equity index for each country.

MSCI Single Country Standard Equity Indices

Weighting. Effective May 31, 2002, all single-country MSCI equity indices are free-float weighted, i.e., companies are included in the indices at the value of their free public float (free float, multiplied by price). MSCI defines “free float” as total shares excluding shares held by strategic investors such as governments, corporations, controlling shareholders and management, and shares subject to foreign ownership restrictions. MSCI’s single country standard equity indices generally seek to have 85% of the free float-adjusted market capitalization of a country’s stock market represented within each industry group, within each country.

Regional Weights. Market capitalization weighting, combined with a consistent target of 85% of free float-adjusted market capitalization, helps ensure that each country’s weight in regional and international indices approximates its weight in the total universe of developing and emerging markets. Maintaining consistent policies among MSCI developed and emerging market indices is critical to the calculation of certain combined developed and emerging market indices published by MSCI.

Selection Criteria. To construct relevant and accurate equity indices for the global institutional investor, MSCI undertakes an index construction process that involves: (i) defining the equity universe; (ii) adjusting the total market capitalization of all securities in the

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universe for free float available to foreign investors; (iii) classifying the universe of securities under the Global Industry Classification Standard (the “GICS”); and (iv) selecting securities for inclusion according to MSCI’s index construction rules and guidelines.

Defining the Universe. The index construction process starts at the country level, with the identification of all listed securities for that country. Currently, MSCI creates equity indices for 50 global country markets. MSCI classifies each company and its securities in only one country. This allows securities to be sorted distinctly by their respective countries. In general, companies and their respective securities are classified as belonging to the country in which they are incorporated. All listed equity securities, or listed securities that exhibit characteristics of equity securities, except investment trusts, mutual funds and equity derivatives, are eligible for inclusion in the universe. Shares of non-domiciled companies generally are not eligible for inclusion in the universe.

Adjusting the Total Market Capitalization of Securities in the Universe for Free Float. After identifying the universe of securities, MSCI calculates the free float-adjusted market capitalization of each security in that universe using publicly available information. The process of free float adjusting market capitalization involves: (i) defining and estimating the free float available to foreign investors for each security, using MSCI’s definition of free float; (ii) assigning a free float-adjustment factor to each security; and (iii) calculating the free float-adjusted market capitalization of each security.

Classifying Securities Under the GICS. In addition to the free float-adjustment of market capitalization, all securities in the universe are assigned to an industry-based hierarchy that describes their business activities. To this end, MSCI has designed, in conjunction with Standard & Poor’s, the GICS. This comprehensive classification scheme provides a universal approach to industries worldwide and forms the basis for achieving MSCI’s objective of reflecting broad and fair industry representation in its indices.

Selecting Securities for Index Inclusion. In order to ensure a broad and fair representation in the indices of the diversity of business activities in the universe, MSCI follows a “bottom-up” approach to index construction, building indices up to the industry group level. The bottom-up approach to index construction requires a thorough analysis and understanding of the characteristics of the universe. This analysis drives the individual security selection decisions, which aim to reflect the overall features of the universe in the country index. MSCI targets an 85% free float-adjusted market representation level within each industry group, within each country. The security selection process within each industry group is based on the careful analysis of: (i) each company’s business activities and the diversification that its securities would bring to the index; (ii) the size (based on free float-adjusted market capitalization) and liquidity of the securities of the company; and (iii) the estimated free float for the company and its individual share classes. MSCI targets for inclusion the most sizable and liquid securities in an industry group. MSCI generally does not consider securities with inadequate liquidity, and/or securities that do not have an estimated free float greater than 15%. Exceptions to this general rule are made only in significant cases, where exclusion of a security of a large company would compromise the index’s ability to fully and fairly represent the characteristics of the underlying market.

Free Float. MSCI defines the free float of a security as the proportion of shares outstanding that are deemed to be available for purchase in the public equity markets by international investors. In practice, limitations on free float available to international investors include: (i) strategic and other shareholdings not considered part of available free float; and (ii) limits on share ownership for foreigners.

Under MSCI’s free float-adjustment methodology, a constituent’s inclusion factor is equal to its estimated free float rounded-up to the closest 5% for constituents with free float equal to or exceeding 15%. For example, a constituent security with a free float of 23.2% will be included in the index at 25% of its market capitalization. For securities with an a free float of less than 15% that are included on an exceptional basis, the Estimated free float is adjusted to the nearest 1%.

Price and Exchange Rates

Prices. The prices used to calculate the MSCI Indices are the official exchange closing prices or those figures accepted as such. MSCI reserves the right to use an alternative pricing source on any given day.

Exchange Rates. MSCI uses the FX rates published by WM Reuters at 4:00 p.m. London time. MSCI uses WM Reuters rates for all developed and emerging markets. Exchange rates are taken daily at 4:00 p.m. London time by the WM Company and are sourced whenever possible from multi-contributor quotes on Reuters. Representative rates are selected for each currency based on a number of “snapshots” of the latest contributed quotations taken from the Reuters service at short intervals around 4:00 p.m. WM Reuters provides closing bid and offer rates. MSCI uses these rates to calculate the mid-point to 5 decimal places.

MSCI continues to monitor exchange rates independently and may, under exceptional circumstances, elect to use an alternative exchange rate if the WM Reuters rate is believed not to be representative for a given currency on a particular day.

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Changes to the Indices. The MSCI Indices are maintained with the objective of reflecting, on a timely basis, the evolution of the underlying equity markets. In maintaining the MSCI Indices, emphasis is also placed on continuity, replicability and minimizing turnover in the Indices. Maintaining the MSCI Indices involves many aspects, including: (i) additions to, and deletions from, the Indices; (ii) and changes in number of shares; and (iii) changes in Foreign Inclusion Factors (“FIFs”) as a result of updated free float estimates.

Potential additions are analyzed not only with respect to their industry group, but also with respect to their industry or sub-industry group, in order to represent a wide range of economic and business activities. All additions are considered in the context of MSCI’s methodology, including the index constituent eligibility rules and guidelines.

In assessing deletions, it is important to emphasize that indices must represent the full-investment cycle, including both bull and bear markets. Out-of-favor industries and their securities may exhibit declining prices, declining market capitalization, and/or declining liquidity, and yet are not deleted because they continue to be good representatives of their industry group. As a general policy, changes in number of shares are coordinated with changes in FIFs to accurately reflect the investability of the underlying securities. In addition, MSCI continuously strives to improve the quality of its free float estimates and the related FIFs. Additional shareholder information may come from better disclosure by companies or more stringent disclosure requirements by a country’s authorities. It may also come from MSCI’s ongoing examination of new information sources for the purpose of further enhancing free float estimates and better understanding shareholder structures. When MSCI identifies useful additional sources of information, it seeks to incorporate them into its free float analysis.

Overall, index maintenance can be described by three broad categories of implementation of changes:

• Annual full country index reviews, conducted on a fixed annual timetable, that systematically re-assess the various dimensions of the equity universe for all countries;

• Quarterly index reviews, aimed at promptly reflecting other significant market events;

• Ongoing event-related changes, such as mergers and acquisitions, which generally are rapidly implemented in the indices as they occur.

Potential changes in the status of countries (stand-alone, emerging, developed) follow their own separate timetables. These changes are normally implemented in one or more phases at the regular annual full country index review and quarterly index review dates.

The annual full country index review for all the MSCI single country standard equity indices is carried out once every 12 months and implemented as of the close of the last business day of May. The implementation of changes resulting from a quarterly index review occurs only on three dates throughout the year: as of the close of the last business day of February, August and November. Any single country indices may be impacted at the quarterly index review. MSCI Index additions and deletions due to quarterly index rebalancings are announced at least two weeks in advance.

INVESTMENT LIMITATIONS

The Board has adopted as fundamental policies each Fund’s investment limitations, numbered one through nine below. The Board has also adopted as fundamental the investment objectives of each Fund, other than the iShares MSCI Belgium Index Fund, iShares MSCI Italy Index Fund, iShares MSCI Mexico Index Fund, iShares MSCI Sweden Index Fund, iShares MSCI South Africa Index Fund and the iShares MSCI Emerging Markets Index Fund. Each of the iShares MSCI Belgium Index Fund, iShares MSCI Italy Index Fund, iShares MSCI Mexico Index Fund, iShares MSCI Sweden Index Fund, iShares MSCI South Africa Index Fund and iShares MSCI Emerging Markets Index Fund may change its investment objective and its Underlying Index without a shareholder vote. The investment objectives of each Fund, other than the iShares MSCI Belgium Index Fund, iShares MSCI Italy Index Fund, iShares MSCI Mexico Index Fund, iShares MSCI Sweden Index Fund, iShares MSCI South Africa Index Fund and iShares MSCI Emerging Markets Index Fund, and the investment limitations for each Fund cannot be changed without the approval of the holders of a majority of that Fund’s outstanding voting securities. A vote of a majority of the outstanding voting securities is defined in the 1940 Act as the lesser of (a) 67% or more of the voting securities present at a fund meeting, if the holders of more than 50% of the outstanding voting securities are present or represented by proxy, or (b) more than 50% of outstanding voting securities.

No Fund (other than the iShares MSCI France Index Fund, iShares MSCI United Kingdom Index Fund, iShares MSCI Spain Index Fund, iShares MSCI Japan Index Fund, iShares MSCI Austria Index Fund, iShares MSCI EMU Index Fund, iShares MSCI Italy Index Fund, iShares MSCI Mexico Index Fund, iShares MSCI Belgium Index Fund, iShares MSCI Emerging Markets Index Fund and the iShares MSCI Sweden Index Fund) will:

1. Lend any funds or other assets except through the purchase of all or a portion of an issue of securities or obligations of the type in which it is permitted to invest (including participation interests in such securities or obligations) and except that a Fund may lend its portfolio securities in an amount not to exceed 33 ¹/3% of the value of its total assets;

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2. Issue senior securities or borrow money, except borrowings from banks for temporary or emergency purposes in an amount up to 33 ¹/3% of the value of the Fund’s total assets (including the amount borrowed), valued at the lesser of cost or market, less liabilities (not including the amount borrowed) valued at the time the borrowing is made, and the Fund will not purchase securities while borrowings in excess of 5% of the Fund’s total assets are outstanding, provided, that for purposes of this restriction, short-term credits necessary for the clearance of transactions are not considered borrowings;

3. Pledge, hypothecate, mortgage or otherwise encumber its assets, except to secure permitted borrowings. (The deposit of underlying securities and other assets in escrow and collateral arrangements with respect to initial or variation margin for currency transactions and futures contracts will not be deemed to be pledges of the Fund’s assets);

4. Purchase a security (other than obligations of the U.S. Government, its agencies or instrumentalities) if as a result 25% or more of its total assets would be invested in a single issuer. (This restriction applies to each of the iShares MSCI Singapore Index and iShares MSCI South Korea Index Funds only);

5. Purchase, hold or deal in real estate, or oil, gas or mineral interests or leases, but a Fund may purchase and sell securities that are issued by companies that invest or deal in such assets;

6. Act as an underwriter of securities of other issuers, except to the extent the Fund may be deemed an underwriter in connection with the sale of securities in its portfolio;

7. Purchase securities on margin, except for such short-term credits as are necessary for the clearance of transactions, except that a Fund may make margin deposits in connection with transactions in currencies, options, futures and options on futures;

8. Sell securities short; or

9. Invest in commodities or commodity contracts, except that a Fund may buy and sell currencies and forward contracts with respect thereto, and may transact in futures contracts on securities, stock indices and currencies and options on such futures contracts and make margin deposits in connection with such contracts.

The iShares MSCI France Index Fund, iShares MSCI United Kingdom Index Fund, iShares MSCI Spain Index Fund, iShares MSCI Japan Index Fund, iShares MSCI Austria Index Fund, iShares MSCI EMU Index Fund, iShares MSCI Italy Index Fund, iShares MSCI Mexico Index Fund, iShares MSCI Belgium Index Fund, iShares MSCI Emerging Markets Index Fund and the iShares MSCI Sweden Index Fund will not:

1. Make loans, except as permitted under the 1940 Act, as amended, and as interpreted, modified or otherwise permitted by regulatory authority having jurisdiction, from time to time;

2. Issue any senior security, except as permitted under the 1940 Act, as amended, and as interpreted, modified or otherwise permitted by regulatory authority having jurisdiction, from time to time;

3. Pledge, hypothecate, mortgage or otherwise encumber its assets, except to secure permitted borrowings. (The deposit of underlying securities and other assets in escrow and collateral arrangements with respect to initial or variation margin for currency transactions and futures contracts will not be deemed to be pledges of the Fund’s assets);

4. Purchase, hold or deal in real estate, or oil, gas or mineral interests or leases, but a Fund may purchase and sell securities that are issued by companies that invest or deal in such assets;

5. Act as an underwriter of securities of other issuers, except to the extent the Fund may be deemed an underwriter in connection with the sale of securities in its portfolio;

6. Purchase securities on margin, except for such short-term credits as are necessary for the clearance of transactions, except that a Fund may make margin deposits in connection with transactions in currencies, options, futures and options on futures;

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7. Sell securities short; or

8. Invest in commodities or commodity contracts, except that a Fund may buy and sell currencies and forward contracts with respect thereto, and may transact in futures contracts on securities, stock indices and currencies and options on such futures contracts and make margin deposits in connection with such contracts.

Industry concentration. Each of the iShares MSCI Singapore Index and iShares MSCI South Korea Index Funds has the following concentration policy: With respect to the two most heavily weighted industries or groups of industries in its benchmark MSCI Index, a Fund will invest in securities (consistent with its investment objective and other investment policies) so that the weighting of each such industry or group of industries in the Fund does not diverge by more than 10% from the respective weighting of such industry or group of industries in its benchmark MSCI Index. An exception to this policy is that if investment in the stock of a single issuer would account for more than 25% of the Fund, the Fund will invest less than 25% of its net assets in such stock and will reallocate the excess to stock(s) in the same industry or group of industries, and/or to stock(s) in another industry or group of industries, in its benchmark MSCI Index. Each Fund will evaluate these industry weightings at least weekly, and at the time of evaluation will adjust its portfolio composition to the extent necessary to maintain compliance with the above policy. A Fund may not concentrate its investments except as discussed above. The Board has adopted this policy as fundamental, which means that it may not be changed with respect to a Fund without the approval of the holders of a majority of that Fund’s outstanding voting securities.

As of September 30, 2005, as a result of this policy with respect to industry concentration, each of the following Funds was concentrated (that is, invested 25% or more of its total assets) in the specified industries:

iShares MSCI Index Fund	Industry or Industries
Singapore	Banks

Each of the iShares MSCI Australia Index, iShares MSCI Austria Index, iShares MSCI Belgium Index, iShares MSCI Brazil Index, iShares MSCI Canada Index, iShares MSCI Emerging Markets Index, iShares MSCI EMU Index, iShares MSCI France Index, iShares MSCI Germany Index, iShares MSCI Hong Kong Index, iShares MSCI Italy Index, iShares MSCI Japan Index, iShares MSCI Malaysia Index, iShares MSCI Mexico Index Fund, iShares MSCI Netherlands Index, iShares MSCI Pacific ex-Japan Index, iShares MSCI South Africa Index, iShares MSCI Spain Index, iShares MSCI Sweden Index, iShares MSCI Switzerland Index, iShares MSCI Taiwan Index and iShares MSCI United Kingdom Index Funds will not concentrate its investments (i.e., hold 25% or more of its total assets in the stocks of a particular industry or group of industries), except that, to the extent practicable, the Fund will concentrate to approximately the same extent that its benchmark MSCI Index concentrates in the stocks of such particular industry or group of industries, provided that the Fund will comply with the diversification requirements applicable to regulated investment companies of the IRC, any underlying Treasury regulations or any successor provision.

As of September 30, 2005, as a result of this policy with respect to industry concentration, each of the following Funds was concentrated (that is, held 25% or more of its total assets) in the specified industries:

iShares MSCI Index Fund	Industry or Industries
Australia	Banks
Belgium	Banks
Hong Kong	Real Estate
Italy	Banks
Mexico	Telecommunications
Spain	Banks
Sweden	Telecommunications
Switzerland	Pharmaceuticals
Taiwan	Semiconductors

In addition to the investment limitations adopted as fundamental as set forth above, each Fund observes the following restrictions, which may be changed by the Board without a shareholder vote. A Fund will not:

1. Invest in the securities of a company for the purpose of exercising management or control, or in any event purchase and hold more than 10% of the securities of a single issuer, provided that the Company may vote the investment securities owned by each Fund in accordance with its views; or

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2. Hold illiquid assets in excess of 15% of its net assets. An illiquid asset is any asset which may not be sold or disposed of in the ordinary course of business within seven days at approximately the value at which the Fund has valued the investment.

For purposes of the percentage limitation on each Fund’s investments in illiquid securities, foreign equity securities, though not registered under the Securities Act, are not deemed illiquid with respect to each Fund if they are otherwise readily marketable. Such securities ordinarily are considered to be “readily marketable” if they are traded on an exchange or other organized market and are not legally restricted from sale by the Fund. BGFA monitors the liquidity of restricted securities in each Fund’s portfolio. In reaching liquidity decisions, BGFA considers the following factors:

1. The frequency of trades and quotes for the security;

2. The number of dealers wishing to purchase or sell the security and the number of other potential purchasers;

3. Dealer undertakings to make a market in the security; and

4. The nature of the security and the nature of the marketplace in which it trades (e.g., the time needed to dispose of the security, the method of soliciting offers and the mechanics of transfer).

If a percentage limitation is adhered to at the time of investment, a later increase or decrease in percentage resulting from any change in value or total or net assets will not result in a violation of such restriction, except that certain percentage limitations will be observed continuously in accordance with applicable law.

Each Fund has adopted a non-fundamental investment policy in accordance with Rule 35d-1 under the 1940 Act to invest, under normal circumstances, at least 80% of the value of its net assets, plus the amount of any borrowings for investment purposes, in securities in the fund’s Underlying Index and in American Depositary Receipts based on securities in the Underlying Index. Each Fund also has adopted a policy to provide its shareholders with at least 60 days’ prior written notice of any change in such policy. If, subsequent to an investment, the 80% requirement is no longer met, a Fund’s future investments will be made in a manner that will bring the Fund into compliance with this policy.

CONTINUOUS OFFERING

The method by which Creation Unit Aggregations of shares are created and traded may raise certain issues under applicable securities laws. Because new Creation Unit Aggregations of shares are issued and sold by the Funds on an ongoing basis, at any point a “distribution,” as such term is used in the Securities Act, may occur. Broker-dealers and other persons are cautioned that some activities on their part may, depending on the circumstances, result in their being deemed participants in a distribution in a manner which could render them statutory underwriters and subject them to the prospectus delivery requirement and liability provisions of the Securities Act.

For example, a broker-dealer firm or its client may be deemed a statutory underwriter if it takes Creation Unit Aggregations after placing an order with the Distributor, breaks them down into constituent shares, and sells such shares directly to customers, or if it chooses to couple the creation of a supply of new shares with an active selling effort involving solicitation of secondary market demand for shares of the Funds. A determination of whether one is an underwriter for purposes of the Securities Act must take into account all the facts and circumstances pertaining to the activities of the broker-dealer or its client in the particular case, and the examples mentioned above should not be considered a complete description of all the activities that could lead to a categorization as an underwriter.

Broker-dealer firms should also note that dealers who are not “underwriters” but are effecting transactions in shares, whether or not participating in the distribution of shares, are generally required to deliver a prospectus. This is because the prospectus delivery exemption in Section 4(3) of the Securities Act is not available in respect of such transactions as a result of Section 24(d) of the 1940 Act. Firms that incur a prospectus delivery obligation with respect to shares of the Trust are reminded that, pursuant to Rule 153 under the Securities Act, a prospectus delivery obligation under Section 5(b)(2) of the Securities Act owed to an exchange member in connection with a sale on the Listing Exchange is satisfied by the fact that the prospectus is available at the Listing Exchange upon request. The prospectus delivery mechanism provided in Rule 153 is only available with respect to transactions on an exchange.

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MANAGEMENT OF THE COMPANY

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

iShares, Inc., iShares Trust, Master Investment Portfolio and Barclays Global Investors Funds, each an open-end management investment company registered under the 1940 Act, are considered to be members of the same fund complex, as defined in Form N-1A under the 1940 Act. Each Director also serves as a Trustee for iShares Trust and, as a result, oversees a total of 101 funds within the fund complex. In addition, Richard K. Lyons and Lee T. Kranefuss each serves as a Trustee for Barclays Global Investors Funds and Master Investment Portfolio and, as a result, oversees an additional 27 portfolios within the fund complex. The address of each Director and Officer, unless otherwise indicated, is 45 Fremont Street, San Francisco, CA 94105.

Directors and Officers

Name and Year of Birth Interested Directors	Position	Principal Occupation(s) During the Past 5 Years	Other Directorships Held by Directors and Officers
*Lee T. Kranefuss, 1961	Interested Director, Chairman, and President (since June 18, 2003)	Chief Executive Officer of Intermediary Investors and Exchange Traded Products Business of BGI (since 2003) and Chief Executive Officer of the Individual Investor Business of BGI (1997-2003).	Trustee (since June 18, 2003) of iShares Trust; Board of Trustees (since 2001) for Barclays Global Investors Funds and Master Investment Portfolio; Director (since 2003) of BGI Cayman Prime Money Market Fund, Ltd.; Director (since 2003) of iShares PLC and EETF PLC (Dublin).
*John E. Martinez, 1961	Interested Director (since December 5, 2003)	Co-CEO of Global Index and Markets Group of BGI (2001-2003); Chairman of Barclays Global Investors Services (2000-2003); CEO of Capital Markets Group of BGI (1996-2001).	Trustee (since December 5, 2003) of iShares Trust; Director (since 2005) of Real Estate Equity Exchange; Director (since 2003) of Larkin Street Youth Services; Director (since November 2003) of Barclays Global Investors UK Holdings.

* Lee Kranefuss and John Martinez are deemed to be “interested persons” (as defined in the 1940 Act) of the Company due to their affiliations with BGFA, the Funds’ investment adviser, and BGI, the parent company of BGFA. John E. Martinez is also deemed to be an “interested person” because of his affiliation with Barclays Global Investors Services, an affiliate of BGFA and BGI.

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Name and Year of Birth Independent Directors	Position	Principal Occupation(s) During the Past 5 Years	Other Directorships Held by Directors and Officers
Richard K. Lyons, 1961	Independent Director (since February 28, 2002)	Executive Associate Dean (since 2005) Sylvan Coleman Professor of Finance (since 1993) and Acting Dean (2004-2005, University of California, Berkeley: Haas School of Business (since 2005); Consultant for IMF World Bank, Federal Reserve Bank, and Citibank N.A. (since 2000).	Trustee (since 2000) of iShares Trust; Director (since 2003) of the BGI Cayman Prime Money Market Fund, LTD.; Trustee (since 2001) of Master Investment Portfolio and Barclays Global Investors Funds; Trustee and Chairman of Matthews Asian Funds since 1995 (oversees 6 portfolios).
George G. C. Parker, 1939	Independent Director (since February 28, 2002)	Dean Witter Distinguished Professor of Finance (since 1994); Associate Dean for Academic Affairs, Director of MBA Program, and Professor, Stanford University: Graduate School of Business (1993-2001).	Trustee (since 2000) of iShares Trust; Director (since 1998) of Affinity Group; Director (since 1985) of Bailard, Biehl and Kaiser, Inc.; Director (since 1978) of California Casualty Group of Insurance Companies; Director (since 1996) of Continental Airlines, Inc.; Director (since 1995) of Community First Financial Group; Director (since 1999) of Tejon Ranch Company; Director (since 2003) of First Republic Bank; Director (since 2000) of Converium Re-Insurance; Director (since 2004) of Threshold Pharmaceuticals.
W. Allen Reed, 1947	Independent Director (since December 16, 1996)	President and Chief Executive Officer (since 1994) of General Motors Investment Management Corporation; Chief Executive Officer (since 2003) of General Motors Trust Bank; Chief Executive Officer (since 1999) of General Motors Trust.	Trustee (since 2002) of iShares Trust; Director (since 1994) of General Motors Investment Management Corporation; Director and chairman (since 2003) of General Motors Trust Bank; Director and chairman (since 1999) of General Motors Trust; Director (since 2002) of GMAM ARS Fund I; Director (since 1994) of General Motors Acceptance Corporation; Director (since 1994) of GMAC Insurance Holdings, Inc.; Director (since 1995) of Global Emerging Markets Fund; Director (since 2000) of Temple Inland Industries; Member (since 2004) of Board of Executives of New York Stock Exchange;

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			Member (since 1995) of New York State Retirement System Advisory Board; Member (since 2004) of the Auburn University Foundation Fund Investment Committee.
Cecilia H. Herbert, 1949	Independent Director (since August 11, 2005)	Member of Finance Council, Archdiocese of San Francisco (since 1991); Chair of Investment Committee, Archdiocese of San Francisco (since 1994).	Trustee (since 2005) of iShares Trust; Trustee (since 2004) of Pacific Select Funds (31 portfolios); Trustee (1992-2003) of the Montgomery Funds (20 portfolios); Trustee (since 2005) of the Thatcher School; Director (since 1998) of Catholic Charities CYO; Trustee (1998-2000) of the Groton School; Director (since 2005) of Women’s Forum West (professional association).
Charles A. Hurty, 1944	Independent Director (since August 11, 2005)	Partner, KPMG, LLP (1968-2001).	Trustee (since 2005) of iShares Trust; Director (since 2002) of GMAM Absolute Return Strategy Fund (1 portfolio); Director (since 2002) of Citigroup Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (2 portfolios); Director (since 2005) of CSFB Alternative Investments Fund (15 portfolios).
John E. Kerrigan, 1956	Independent Director (since August 11, 2005)	Chief Investment Officer, Santa Clara University (since 2002); Managing Director, Merrill Lynch (1994-2002).	Trustee (since 2005) of iShares Trust; Member (since 2004) of Advisory Council for Commonfund Distressed Debt Partners II.
Officer
Michael Latham, 1965	Secretary, Treasurer and Principal Financial Officer (since February 28, 2002)	Chief Operating Officer of the Intermediary Investors and Exchange Traded Products Business of BGI (since 2003); Director of Mutual Fund Delivery in the U.S. Individual Investor Business of BGI (2000-2003); Head of Operations, BGI Europe (1997-2000).	None.

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The following table sets forth, as of December 31, 2004, the dollar range of equity securities beneficially owned by each Director in the Funds and in other registered investment companies overseen by the Director within the same family of investment companies as the Company.

NAME OF DIRECTOR1	NAME OF INDEX FUND	DOLLAR RANGE OF EQUITY SECURITIES IN THE FUND	AGGREGATE DOLLAR RANGE OF EQUITY SECURITIES IN ALL REGISTERED INVESTMENT COMPANIES OVERSEEN BY DIRECTOR IN FAMILY OF INVESTMENT COMPANIES
Richard K. Lyons	iShares S&P 500	$10,001 - $50,000	Over $100,000
	iShares Lehman 1-3 Year Treasury Bond	Over $100,000
Lee T. Kranefuss	iShares Lehman 1-3 Year Treasury Bond	$50,001-$100,000	Over $100,000
	iShares Russell 3000	Over $100,000
	iShares GS $ InvesTop™ Corporate Bond	$10,001 - $50,000
	iShares Dow Jones Select Dividend	$10,001 - $50,000
John E. Martinez	iShares MSCI EAFE	Over $100,000	Over $100,000
	iShares Russell 1000	Over $100,000
	iShares Russell 1000 Value	Over $100,000
	iShares S&P 500	Over $100,000
George G.C. Parker	iShares S&P 500	Over $100,000	Over $100,000
	iShares S&P 500 Value	Over $100,000
	iShares S&P 400	$10,001 - $50,000
	iShares S&P 400 Value	Over $100,000
	iShares S&P 600	$10,001 - $50,000
	iShares S&P Global 100	$10,001 - $50,000
	iShares S&P 100	Over $100,000
	iShares Dow Jones U.S. Healthcare Sector	$50,001 - $100,000
	iShares Dow Jones Select Dividend	Over $100,000
	iShares Russell 2000 Value	Over $100,000
	iShares Russell 2000	$50,001 - $100,000
	iShares Russell 1000 Value	Over $100,000
	iShares MSCI EAFE	Over $100,000
	iShares MSCI Emerging Markets	$50,001 - $100,000
	iShares MSCI France	$50,001 - $100,000
	iShares MSCI South Korea	$10,001 - $50,000
	iShares MSCI Mexico	$10,001 - $50,000
	iShares MSCI Singapore	$10,001 - $50,000
	iShares MSCI United Kingdom	$10,001 - $50,000
	iShares Nasdaq Biotechnology	$10,001 - $50,000
	iShares FTSE/Xinhua China 25	$50,001 - $100,000
	iShares GS $ InvesTop™ Corporate Bond	$10,001 - $50,000
	iShares Lehman TIPS Bond	$10,001 - $50,000
W. Allen Reed	None	Not Applicable	Not Applicable

¹ The dollar range of equity securities beneficially owned by Cecilia H. Herbert, Charles A. Hurty and John E. Kerrigan is not reflected in the table because they were elected to serve as Independent Directors of the Company effective August 11, 2005.

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As of December 31, 2004, none of the directors who are not interested persons (as defined in the 1940 Act) of the Company (“Independent Directors”) or their immediate family members owned beneficially or of record any securities of BGFA (the Fund’s investment adviser), SEI (the Fund’s distributor) or any person controlling, controlled by or under common control with BGFA or SEI.

Committees of the Board of Directors. Each Independent Director serves on the Audit and Nominating Committees of the Board of Directors. The purposes of the Audit Committee are to assist the Board of Directors (1) in its oversight of the Company’s accounting and financial reporting principles and policies and related controls and procedures maintained by or on behalf of the Company; (2) in its oversight of the Company’s financial statements and the independent audit thereof; (3) in selecting, evaluating and, where deemed appropriate, replacing the independent accountants (or nominating the independent accountants to be proposed for shareholder approval in any proxy statement); and (4) in evaluating the independence of the independent accountants. The Audit Committee of the Company met four times during the year ended August 31, 2005.

The Nominating Committee nominates individuals for Independent Director membership on the Board. The Nominating Committee evaluates candidates’ qualifications for board membership, including their independence from the Fund’s investment adviser and other principal service providers and the potential effects of any other relationship that might impair the independence of a candidate. In addition, the Nominating Committee periodically reviews the composition of the Board to determine whether it may be appropriate to add individuals with different backgrounds or skills from those already on the Board. The Nominating Committee considers nominees recommended by shareholders, if such nominees are submitted in accordance with Rule 14a-8 of the Securities Exchange Act of 1934 (the “Exchange Act”), in conjunction with shareholder meeting to consider the election of Directors. The Nominating Committee met once during the fiscal year ended August 31, 2005.

Remuneration of Directors. As of June 14, 2005, the Company pays each Independent Director and John Martinez, an Interested Director, an annual fee of $45,000 for meetings of the Board attended by the Director. The Company also pays each Independent Director who served as a chairperson of a Board committee an annual fee of $2,500. Prior to June 14, 2005, the Company paid each Independent Director and Nathan Most and John Martinez, both interested Directors, an annual fee of $32,500 for meetings of the Board attended by each Director. The Company also reimburses each Director for travel and other out-of-pocket expenses incurred by him/her in connection with attending such meetings.

The table below sets forth the total compensation paid to each Interested Director for the calendar year ended December 31, 2004.

Name of Interested Director	Aggregate Compensation from the Company		Pension or Retirement Benefits Accrued As Part of Company Expenses*	Estimated Annual Benefits Upon Retirement*	Total Compensation From the Funds and Fund Complex**
Lee T. Kranefuss***	$	0	Not Applicable	Not Applicable	$	0
John E. Martinez	$	32,500	Not Applicable	Not Applicable	$	65,000
Nathan Most****	$	32,500	Not Applicable	Not Applicable	$	65,000

* No Director or Officer is entitled to any pension or retirement benefits from the Company.

**  Includes compensation for service on the Board of Trustees of iShares Trust.

***  Lee T. Kranefuss was not compensated by the Funds due to his employment with BGI during the time period reflected in the table.

****  Served as Director through December 3, 2004.

The table below sets forth the total compensation paid to each Independent Director for the calendar year ended December 31, 2004.

Name of Independent Director1	Aggregate Compensation from the Company		Pension or Retirement Benefits Accrued As Part of Company Expenses*	Estimated Annual Benefits Upon Retirement*	Total Compensation From the Funds and Fund Complex**
John B. Carroll***	$	32,500	Not Applicable	Not Applicable	$	65,000
Richard K. Lyons	$	32,500	Not Applicable	Not Applicable	$	91,000	****
George G.C. Parker	$	32,500	Not Applicable	Not Applicable	$	65,000
W. Allen Reed	$	32,500	Not Applicable	Not Applicable	$	65,000

¹ Compensation is not shown for Cecilia H. Herbert, Charles A. Hurty and John E. Kerrigan because they were elected to serve as Independent Directors of the Company effective August 11, 2005.

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* No Director or Officer is entitled to any pension or retirement benefits from the Company.

**  Includes compensation for service on the Board of Trustees of iShares Trust.

***  Served as Director through March 1, 2005.

****  Includes compensation as Trustee for Barclays Global Investors Funds and Master Investment Portfolio, investment companies with 24 funds also advised by BGFA and/or for which BGFA provides administration services, and as a Director of the BGI Cayman Prime Money Market Fund, LTD.

Directors and officers of the Company collectively owned less than 1% of each of the Company’s outstanding shares as of November 30, 2005.

Code of Ethics. The Company, BGFA and SEI have adopted Codes of Ethics pursuant to Rule 17j-1 under the 1940 Act. The Codes of Ethics permit personnel subject to the Codes of Ethics to invest in securities, subject to certain limitations, including securities that may be purchased or held by the Funds. The Codes are on public file with, and are available from, the SEC.

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES. Although the Company does not have information concerning the beneficial ownership of shares held in the names of DTC participants, as of November 30, 2005, the name and percentage ownership of each DTC participant that owned of record 5% or more of the outstanding shares of a Fund were as follows:

iShares MSCI Index Fund	Name	Percentage of Ownership
Australia	Charles Schwab & Co., Inc.	11.20	%
	National Financial Services Corporation - Fidelity	11.16	%
	Pershing (DLJ Securities)	7.26	%
	Brown Brothers Harriman & Co.	6.41	%
Austria	Salomon Smith Barney Inc.	12.09	%
	National Financial Services Corporation - Fidelity	11.57	%
	Charles Schwab & Co., Inc.	10.89	%
	Pershing (DLJ Securities)	5.64	%
	Merrill Lynch, Pierce, Fenner & Smith Incorporated	5.09	%
Belgium	Salomon Smith Barney Inc.	29.90	%
	National Financial Services Corporation - Fidelity	6.49	%
	Charles Schwab & Co., Inc.	6.24	%
Brazil	Brown Brothers Harriman & Co.	10.10	%
	National Financial Services Corporation - Fidelity	7.81	%
	Charles Schwab & Co., Inc.	7.31	%
	Salomon Smith Barney Inc.	6.91	%
	State Street Bank and Trust Company	6.24	%
	Pershing (DLJ Securities)	5.33	%
Canada	Brown Brothers Harriman & Co.	10.50	%
	National Financial Services Corporation - Fidelity	8.92	%
	Charles Schwab & Co., Inc.	8.25	%
	Pershing (DLJ Securities)	5.48	%
	Chase Manhattan Bank	5.21	%
Emerging Markets	Charles Schwab & Co., Inc.	8.73	%
	The Northern Trust Company	7.39	%
	Brown Brothers Harriman & Co.	5.43	%
	National Financial Services Corporation - Fidelity	5.41	%

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iShares MSCI Index Fund	Name	Percentage of Ownership
EMU	Brown Brothers Harriman & Co.	18.27	%
	Charles Schwab & Co., Inc.	10.47	%
	The Bank of New York	7.05	%
	Pershing (DLJ Securities)	6.26	%
	Salomon Smith Barney Inc.	5.02	%
France	Bear, Stearns Securities Corp.	7.71	%
	The Bank of New York	6.51	%
	Brown Brothers Harriman & Co.	6.23	%
	Salomon Smith Barney Inc.	6.18	%
	Citibank, N.A.	6.05	%
	Morgan Stanley & Co. Incorporated	5.42	%
Germany	Goldman, Sachs & Co.	31.14	%
	Chase Manhattan Bank	6.68	%
	Charles Schwab & Co., Inc.	5.28	%
Hong Kong	Charles Schwab & Co., Inc.	12.98	%
	Brown Brothers Harriman & Co.	8.06	%
	Wachovia First Clearing Corporation	7.77	%
	Salomon Smith Barney Inc.	6.08	%
	National Financial Services Corporation - Fidelity	5.92	%
Italy	Salomon Smith Barney Inc.	21.42	%
	Timber Hill LLC	8.58	%
	Brown Brothers Harriman & Co.	7.87	%
	Spear, Leeds & Kellogg	5.55	%
	Charles Schwab & Co., Inc.	5.31	%
Japan	Goldman, Sachs & Co.	11.51	%
	Charles Schwab & Co., Inc.	8.99	%
	Salomon Smith Barney Inc.	6.50	%
	UBS PaineWebber Incorporated	6.29	%
	State Street Bank and Trust Company	6.02	%
	Merrill Lynch, Pierce Fenner & Smith Safekeeping	5.68	%
	Brown Brothers Harriman & Co.	5.31	%
Malaysia	Brown Brothers Harriman & Co.	11.92	%
	Merrill Lynch, Pierce Fenner & Smith Safekeeping	9.12	%
	State Street Bank and Trust Company	7.66	%
	Salomon Smith Barney Inc.	6.53	%
	Citibank, N.A.	5.87	%
	Mellon Trust of New England	5.04	%
Mexico	Salomon Smith Barney Inc.	12.36	%
	National Financial Services Corporation - Fidelity	9.41	%
	Pershing (DLJ Securities)	9.01	%
	Charles Schwab & Co., Inc.	8.43	%
Netherlands	Brown Brothers Harriman & Co.	12.40	%
	First National Bank of Omaha	12.21	%
	Morgan Stanley & Co. Incorporated	10.16	%
	National Financial Services Corporation - Fidelity	8.28	%
	The Bank of New York	5.27	%

37

iShares MSCI Index Fund	Name	Percentage of Ownership
Pacific ex-Japan	Brown Brothers Harriman & Co.	11.78	%
	Charles Schwab & Co., Inc.	8.72	%
	National Financial Services Corporation - Fidelity	5.93	%
	The Bank of New York	5.92	%
	Citibank, N.A.	5.17	%
Singapore	Morgan Stanley & Co. Incorporated	10.53	%
	Wachovia First Clearing Corporation	9.90	%
	Merrill Lynch, Pierce Fenner & Smith Safekeeping	9.33	%
	Brown Brothers Harriman & Co.	8.79	%
	Mellon Trust of New England	6.81	%
	Charles Schwab & Co., Inc.	5.91	%
	Citibank, N.A.	5.23	%
	National Financial Services Corporation - Fidelity	5.17	%
South Africa	State Street Bank and Trust Company	21.27	%
	Salomon Smith Barney Inc.	15.63	%
	Bear, Stearns Securities Corp.	11.91	%
	Brown Brothers Harriman & Co.	10.47	%
	Charles Schwab & Co., Inc.	5.71	%
	National Financial Services Corporation - Fidelity	5.52	%
South Korea	Brown Brothers Harriman & Co.	10.98	%
	Salomon Smith Barney Inc.	7.68	%
	Citibank, N.A.	7.17	%
	National Financial Services Corporation - Fidelity	6.79	%
	Charles Schwab & Co., Inc.	6.31	%
	The Bank of New York	6.12	%
Spain	Salomon Smith Barney Inc.	20.11	%
	National Financial Services Corporation - Fidelity	10.32	%
	First National Bank of Omaha	9.87	%
	Brown Brothers Harriman & Co.	6.94	%
	Charles Schwab & Co., Inc.	5.79	%
Sweden	National Financial Services Corporation - Fidelity	11.02	%
	Salomon Smith Barney Inc.	8.78	%
	Brown Brothers Harriman & Co.	6.19	%
	Pershing (DLJ Securities)	5.84	%
	Charles Schwab & Co., Inc.	5.41	%
Switzerland	Brown Brothers Harriman & Co.	19.20	%
	Timber Hill LLC	6.62	%
	Charles Schwab & Co., Inc.	6.43	%
	Chase Manhattan Bank	5.67	%
	The Bank of New York	5.65	%
	Salomon Smith Barney Inc.	5.57	%
Taiwan	The Bank of New York	16.56	%
	Brown Brothers Harriman & Co.	16.41	%
	Citibank, N.A.	11.10	%
	State Street Bank and Trust Company	8.58	%
	Mellon Trust of New England	5.83	%
	Morgan Stanley & Co. Incorporated	5.67	%
United Kingdom	Brown Brothers Harriman & Co.	15.68	%
	Chase Manhattan Bank	8.65	%
	Pershing (DLJ Securities)	5.61	%
	Charles Schwab & Co., Inc.	5.09	%

38

INVESTMENT ADVISORY, ADMINISTRATIVE AND DISTRIBUTION SERVICES

Investment Adviser. BGFA acts as investment adviser to the Company and, subject to the supervision of the Board, is responsible for the investment management of each Fund. BGFA is a California corporation indirectly owned by Barclays Bank PLC, and is registered as an investment adviser under the Investment Advisers Act of 1940, as amended. BGFA and its parent, Barclays Global Investors, N.A., manage, administer or advise assets aggregating in excess of $1.4 trillion as of September 30, 2005.

BGFA has entered into an investment advisory contract with the Company, dated December 19, 2001, (the Investment Advisory Agreement”). Under the Investment Advisory Agreement, BGFA, subject to the supervision of the Company’s Board and in conformity with the stated investment policies of each Fund, manages the investment of each Fund’s assets. BGFA may enter into subadvisory agreements with additional investment advisers to act as subadvisers with respect to particular Fund. BGFA will pay subadvisers, if any, out of the fees received by BGFA. BGFA is responsible for (i) placing purchase and sale orders, (ii) providing continuous supervision of the investment portfolio of each Fund, and (iii) the general management of the Company’s affairs.

For its investment management services to the iShares MSCI Brazil Index, iShares MSCI South Africa Index, iShares MSCI South Korea Index and iShares MSCI Taiwan Index Funds, BGFA is paid management fees equal to each of those Fund’s allocable portion of: 0.74% per year of the aggregate net assets of those Funds less than or equal to $2 billion, plus 0.69% per year of the aggregate net assets of those Funds between $2 billion and $4 billion, plus 0.64% per year of the aggregate net assets of those Funds greater than $4 billion; for its investment management services to the iShares MSCI Pacific ex-Japan Index Fund, BGFA is paid management fees equal to 0.50% per year of the net assets of that Fund; for its investment management services to the iShares MSCI Emerging Markets Index Fund, BGFA is paid management fees equal to 0.75% per year of the net assets of that Fund; for its investment management services to each of the other Funds included in this SAI, BGFA is paid a fee equal to each of those Fund’s allocable portion of: 0.59% per year of the aggregate net assets of those Funds less than or equal to $7 billion, plus 0.54% per year of the aggregate net assets of those Funds between $7 billion and $11 billion, plus 0.49% per year of the aggregate net assets of those Funds in excess of $11 billion.

Pursuant to the Investment Advisory Agreement, BGFA is responsible for the payment of all expenses of the Fund, including the cost of transfer agency, custody, fund administration, legal, audit and other services, except interest, taxes, any brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution fees and extraordinary expenses. The following table sets forth the management fees paid by each Fund for the periods noted below.

iShares MSCI Index Fund	Fiscal Year Ended August 31, 2003		Fiscal Year Ended August 31, 2004		Fiscal Year Ended August 31, 2005
Australia	$	484,058	$	915,983	$	1,684,365
Austria	$	100,716	$	213,811	$	891,196
Belgium	$	116,502	$	110,619	$	298,236
Brazil	$	453,177	$	1,782,540	$	2,897,738
Canada	$	2,434,382	$	2,058,670	$	1,934,001
Emerging Markets	$	322,206	$	10,195,674	$	31,573,428
EMU	$	836,046	$	1,687,063	$	2,700,971
France	$	283,982	$	333,419	$	360,949
Germany	$	498,846	$	731,209	$	966,395
Hong Kong	$	792,826	$	2,474,937	$	3,327,704
Italy	$	171,764	$	160,439	$	211,190
Japan	$	4,549,589	$	22,799,645	$	36,714,546
Malaysia	$	458,706	$	1,177,810	$	1,738,119
Mexico	$	327,547	$	598,057	$	1,265,701
Netherlands	$	114,891	$	131,004	$	269,795
Pacific ex-Japan	$	784,366	$	2,664,892	$	5,536,961
Singapore	$	311,428	$	751,097	$	1,132,585
South Africa	$	292,742	$	647,324	$	959,383
South Korea	$	850,510	$	1,851,713	$	3,815,173
Spain	$	209,475	$	279,745	$	343,145
Sweden	$	76,324	$	142,121	$	315,269
Switzerland	$	171,116	$	244,345	$	330,809
Taiwan	$	1,100,203	$	2,810,061	$	5,030,229
United Kingdom	$	863,775	$	1,454,776	$	2,930,931

39

Prior to September 1, 2005, the iShares MSCI Singapore Index Fund was subject to an investment advisory agreement whereby the iShares MSCI Singapore Index Fund paid its own expenses and BGFA received fees equal to the difference between such expenses and specified rates (subject to the exceptions noted above) or reimbursed expenses to the extent necessary to cause such Fund’s expenses to be at such specified rates (again, subject to the same exceptions). Effective September 1, 2005, the iShares MSCI Singapore Index Fund is subject to the Investment Advisory Agreement discussed above.

For the fiscal years ended August 31, 2003, August 31, 2004 and August 31, 2005, BGFA did not reimburse any of the Funds included in this SAI.

The Investment Advisory Agreements with respect to each Fund continues in effect for two years from its effective date, and thereafter is subject to annual approval by (i) the Board or (ii) vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Fund, provided that in either event such continuance also is approved by a majority of the Board who are not interested persons (as defined in the 1940 Act) of the Fund, by a vote cast in person at a meeting called for the purpose of voting on such approval.

The Investment Advisory Agreements with respect to each Fund are terminable without penalty, on 60 days’ notice, by the Board or by a vote of the holders of a majority (as defined in the 1940 Act) of the applicable Fund’s outstanding voting securities. Each Investment Advisory Agreement is also terminable upon 60 days’ notice by BGFA and will terminate automatically in the event of its assignment (as defined in the 1940 Act).

Current interpretations of federal banking laws and regulations (i) may prohibit Barclays Bank PLC, BGI and BGFA from controlling or underwriting the shares of the Company, but (ii) would not prohibit Barclays Bank PLC or BGFA generally from acting as an investment adviser, administrator, transfer agent or custodian to the Funds or from purchasing iShares as agent for and upon the order of a customer.

BGFA believes that it may perform advisory and related services for the Company without violating applicable banking laws or regulations. However, the legal requirements and interpretations about the permissible activities of banks and their affiliates may change in the future. These changes could prevent BGFA from continuing to perform services for the Company. If this happens, the Board would consider selecting other qualified firms. Any new investment advisory agreement would be subject to shareholder approval.

If current restrictions on bank activities with mutual funds were relaxed, BGFA, or its affiliates, would consider performing additional services for the Company. BGFA cannot predict whether these changes will be enacted, or the terms under which BGFA, or its affiliates, might offer to provide additional services.

Portfolio Managers. Lisa Chen and Carl Gilchrist (the “Portfolio Managers”) are primarily responsible for the day-to-day management of the iShares MSCI Australia Index, iShares MSCI Austria Index, iShares MSCI Belgium Index, iShares MSCI Brazil Index, iShares MSCI Canada Index, iShares MSCI Emerging Markets Index, iShares MSCI EMU Index, iShares MSCI France Index, iShares MSCI Germany Index, iShares MSCI Hong Kong Index, iShares MSCI Italy Index, iShares MSCI Japan Index, iShares MSCI Malaysia Index, iShares MSCI Mexico Index Fund, iShares MSCI Netherlands Index, iShares MSCI Pacific ex-Japan Index, iShares MSCI Singapore Index, iShares MSCI South Africa Index , iShares MSCI South Korea Index Fund, iShares MSCI Spain Index, iShares MSCI Sweden Index, iShares MSCI Switzerland Index, iShares MSCI Taiwan Index and the iShares MSCI United Kingdom Index Funds (the “iShares MSCI Index Funds”) as of the inception date of the Funds. As of August 31, 2005, the Portfolio Managers were also primarily responsible for the day-to-day management of certain types of other iShares Funds and certain other portfolios and/or accounts, as indicated in the tables below:

Lisa Chen

Types of Accounts	Number	Total Assets
Registered Investment Companies	37	$	45,600,000,000
Other Pooled Investment Vehicles	N/A		N/A
Other Accounts	7	$	6,724,900,000

40

Carl Gilchrist

Types of Accounts	Number	Total Assets
Registered Investment Companies	39	$	46,000,000,000
Other Pooled Investment Vehicles	75	$	76,600,000,000
Other Accounts	6	$	10,800,000,000

Each of the portfolios or accounts for which the Portfolio Managers are primarily responsible for the day-to-day management seeks to track the rate of return, risk profile and other characteristics of independent third-party indexes by either replicating the same combination of securities that compose those indexes or through a representative sampling of the securities that compose those indexes based on objective criteria and data. The Portfolio Managers are required to manage each portfolio or account to meet those objectives. Pursuant to BGI and BGFA policy, investment opportunities are allocated equitably among the iShares MSCI Index Funds and other portfolios and accounts. For example, under certain circumstances, an investment opportunity may be restricted due to limited supply on the market, legal constraints or other factors, in which event the investment opportunity will be allocated equitably among those portfolios and accounts, including the iShares MSCI Index Funds seeking such investment opportunity. As a consequence, from time to time the iShares MSCI Index Funds may receive a smaller allocation of an investment opportunity than they would have if the Portfolio Managers and BGFA and its affiliates did not manage other portfolios or accounts.

Like the iShares MSCI Index Funds, the other portfolios or accounts managed by the Portfolio Managers generally pay an asset-based fee to BGFA or BGI, as applicable, for its advisory services. One or more of those other portfolios or accounts, however, may pay BGI an incentive-based fee in lieu of, or in addition to, an asset-based fee for its advisory services. A portfolio or account with an incentive-based fee would pay BGI a portion of that portfolio’s or account’s gains, or would pay BGI more for its services than would otherwise be the case if BGI meets or exceeds specified performance targets. By their very nature, incentive-based fee arrangements could present an incentive for BGI to devote greater resources, and allocate more investment opportunities, to the portfolios or accounts that have those fee arrangements, relative to other portfolios or accounts, in order to earn larger fees. Although BGI has an obligation to allocate resources and opportunities equitably among portfolios and accounts and intends to do so, shareholders of the iShares MSCI Index Funds should be aware that, as with any group of portfolios and accounts managed by an investment adviser and/or its affiliates pursuant to varying fee arrangements, including incentive-based fee arrangements, there is the potential for a conflict-of-interest that may result in the Portfolio Manager’s favoring those portfolios or accounts with incentive-based fee arrangements.

As of August 31, 2005, with respect to all iShares Funds and other portfolios and/or accounts managed by the Portfolio Managers, on behalf of BGFA, the Portfolio Managers receive a salary and are eligible to receive an annual bonus. Each Portfolio Manager’s salary is a fixed amount generally determined annually based on a number of factors, including, but not limited to, the Portfolio Manager’s title, scope of responsibilities, experience and knowledge. The Portfolio Manager’s bonus is a discretionary amount determined annually based on the overall profitability of the various BGI companies worldwide, the performance of the Portfolio Manager’s business unit, and an assessment of the Portfolio Manager’s individual performance. The Portfolio Manager’s salary and annual bonus are paid in cash. In addition, a Portfolio Manager may be paid a signing bonus or other amounts in connection with initiation of employment with BGFA. If a Portfolio Manager satisfied the requirements for being part of a “select group of management or highly compensated employees (within the meaning of ERISA section 401(a))” as so specified under the terms of BGI’s Compensation Deferral Plan, the Portfolio Manager may elect to defer a portion of his or her bonus under that Plan.

Portfolio Managers may be selected, on a fully discretionary basis, for awards under BGI’s Compensation Enhancement Plan (“CEP”). Under the CEP, these awards are determined annually, and vest after two years. At the option of the CEP administrators, the award may be “notionally invested” in funds managed by BGI, which means that the final award amount may be increased or decreased according to the performance of the BGI-managed funds over the two-year period. If the award is not notionally invested, the original award amount is paid once vested.

A Portfolio Manager may be granted options to purchase shares in Barclays Global Investors UK Holdings Limited (“BGI UK Holdings”), a company organized under the laws of England and Wales that directly or indirectly owns all of the Barclays Global Investors companies worldwide, which options vest in three equal installments over three years and are generally exercisable during prescribed exercise windows. Shares purchased must generally be held 355 days prior to sale. For such purposes, the value of BGI UK Holdings is based on its fair value as determined by an independent public accounting firm.

41

As of August 31, 2005, the Portfolio Managers beneficially owned shares of the Funds for which they are primarily responsible for the day-to-day management in the amounts reflected in the following tables:

Lisa Chen

	Dollar Range
iShares MSCI Index Fund	None	$1 to $10k	$10,001 to $50k	$50,001 to $100k	$100,001 to $500k	$500,001 to $1m	over $1m
Australia	X
Austria	X
Belgium	X
Brazil	X
Canada	X
Emerging Markets	X
EMU	X
France	X
Germany	X
Hong Kong	X
Italy	X
Japan	X
Malaysia	X
Mexico	X
Netherlands	X
Pacific ex-Japan	X
Singapore	X
South Africa	X
South Korea	X
Spain	X
Sweden	X
Switzerland	X
Taiwan	X
United Kingdom	X

Carl Gilchrist

	Dollar Range
iShares MSCI Index Fund	None	$1 to $10k	$10,001 to $50k	$50,001 to $100k	$100,001 to $500k	$500,001 to $1m	over $1m
Australia	X
Austria	X
Belgium	X
Brazil	X
Canada	X
Emerging Markets	X
EMU	X
France	X
Germany	X
Hong Kong	X
Italy	X
Japan	X
Malaysia	X
Mexico	X
Netherlands	X
Pacific ex-Japan	X
Singapore	X
South Africa	X
South Korea	X
Spain	X
Sweden	X
Switzerland	X
Taiwan	X
United Kingdom	X

42

Administrator, Custodian and Transfer Agent. Investors Bank & Trust Company (“Investors Bank”) serves as administrator, custodian and transfer agent for the Funds. Investors Bank’s principal address is 200 Clarendon Street, Boston, MA 02116. Under the Administration Agreement with the Company, Investors Bank provides necessary administrative, legal, tax accounting services and financial reporting for the maintenance and operations of the Company and each Fund. In addition, Investors Bank makes available the office space, equipment, personnel and facilities required to provide such services. Under the Custodian Agreement with the Company, Investors Bank maintains in separate accounts cash, securities and other assets of the Company and each Fund, keeps all necessary accounts and records, and provides accounting and other services. Investors Bank is required, upon the order of the Company, to deliver securities held by Investors Bank and to make payments for securities purchased by the Company for each Fund. Also, under a Delegation Agreement, Investors Bank is authorized to appoint certain foreign custodians or foreign custody managers for Fund investments outside the United States. Pursuant to a Transfer Agency and Service Agreement with the Company, Investors Bank acts as a transfer agent for each Fund’s authorized and issued shares of beneficial interest, and as dividend disbursing agent of the Company. As compensation for the foregoing services, Investors Bank receives certain out-of-pocket costs, transaction fees and asset-based fees which are accrued daily and paid monthly by the iShares MSCI Singapore Index Fund directly and by BGFA from its management fee for all Funds other than iShares MSCI Singapore Index Fund.

The following table sets forth the administration, custodian and transfer agency expenses of each Fund for the periods noted.

iShares MSCI Index Fund	Fiscal Year Ended August 31, 2003		Fiscal Year Ended August 31, 2004		Fiscal Year Ended August 31, 2005
Australia	$	82,896	$	104,378	$	124,478
Austria	$	20,993	$	28,909	$	69,922
Belgium	$	24,614	$	19,339	$	23,452
Brazil	$	173,063	$	573,717	$	701,615
Canada	$	266,635	$	166,601	$	75,004
Emerging Markets	$	45,592	$	954,552	$	2,182,043
EMU	$	126,876	$	183,003	$	174,024
France	$	51,176	$	42,859	$	35,604
Germany	$	59,357	$	63,497	$	43,872
Hong Kong	$	99,598	$	210,784	$	153,483
Italy	$	32,696	$	26,022	$	17,473
Japan	$	417,366	$	1,436,044	$	1,065,863
Malaysia	$	119,353	$	235,826	$	272,377
Mexico	$	61,375	$	91,810	$	144,004
Netherlands	$	24,098	$	19,662	$	18,363
Pacific ex-Japan	$	152,096	$	298,018	$	381,149
Singapore	$	85,342	$	133,589	$	156,637
South Africa	$	50,173	$	75,097	$	87,883
South Korea	$	147,270	$	276,817	$	481,920
Spain	$	43,484	$	36,023	$	22,805
Sweden	$	25,892	$	23,869	$	27,529
Switzerland	$	30,710	$	28,939	$	22,281
Taiwan	$	257,512	$	525,372	$	833,718
United Kingdom	$	103,442	$	106,660	$	96,550

⁽¹⁾ Prior to May 20, 2002 PFPC, Inc. (“PFPC”) was paid for administrative services it provided to each Fund pursuant to an Administrator and Accounting Services Agreement with the Company. From May 20, 2002 to August 31, 2002, Investors Bank was paid for administrative services it provided to each Fund. All such fees were paid by the Company prior to December 28, 2001. Effective December 28, 2001, BGFA pays the administration fees for each Fund other than the iShares MSCI Singapore Index Fund.

Sub-Administrator. Prior to August 31, 2003, Morgan Stanley & Co. Incorporated provided certain sub-administrative services relating to the Company pursuant to a Sub-Administration Agreement and received a fee equal to 0.05% of the Company’s average daily net assets, for providing such services. Morgan Stanley & Co. Incorporated, as sub-administrator, had no role in determining the investment policies of the Company or which securities were to be purchased or sold by the Company. The principal business address of Morgan Stanley & Co. Incorporated is 1585 Broadway, New York, New York, 10036.

43

For sub-administrative services, PFPC and BGFA paid or accrued the following fees to Morgan Stanley & Co. Incorporated and its affiliates:

iShares MSCI Index Fund	Fiscal Year Ended August 31, 2003
Australia	$	33,179
Austria	$	9,804
Belgium	$	8,315
Brazil	$	26,906
Canada	$	180,604
Emerging Markets	$	30,476
EMU	$	58,881
France	$	19,623
Germany	$	34,395
Hong Kong	$	58,991
Italy	$	11,723
Japan	$	350,671
Malaysia	$	31,103
Mexico	$	21,945
Netherlands	$	7,857
Pacific ex-Japan	$	68,221
Singapore	$	41,335
South Africa	$	18,733
South Korea	$	48,208
Spain	$	15,251
Sweden	$	5,541
Switzerland	$	11,692
Taiwan	$	63,489
United Kingdom	$	59,647

⁽¹⁾ PFPC paid fees accrued September 1, 2001 through May 19, 2002; BGI paid fees accrued May 20, 2002 through August 31, 2002.

Distributor. SEI Investments Distribution Co. (the “Distributor”) is the principal underwriter and distributor of shares of the Company. Its address is 1 Freedom Valley Drive, Oaks, PA 19456. The Distributor has entered into a Distribution Agreement with the Company pursuant to which it distributes shares of each Fund. The Distribution Agreement will continue for two years from its effective date and is renewable annually thereafter shares are continuously offered for sale by the Funds through the Distributor only in Creation Unit Aggregations, as described in the Prospectus and in the Creation and Redemption of Creation Units Aggregations section of this SAI. Shares in less than Creation Unit Aggregations are not distributed by the Distributor. The Distributor will deliver the Prospectus and, upon request, the SAI to persons purchasing Creation Unit Aggregations and will maintain records of both orders placed with it and confirmations of acceptance furnished by it. The Distributor is a broker-dealer registered under the 1934 Act and a member of the National Association of Securities Dealers, Inc. (“NASD”).

The Distribution Agreement provides that it may be terminated at any time, without the payment of any penalty, (i) by vote of a majority of the Directors who are not interested persons of the Company (as defined under the 1940 Act) or (ii) by vote of a majority (as defined in the 1940 Act) of the outstanding voting securities of the relevant Fund, on at least 60 days’ written notice to the Distributor. The Distribution Agreement is also terminable upon 60 days’ prior notice by the Distributor and will terminate automatically in the event of its assignment (as defined in the 1940 Act).

The Distributor may also enter into agreements with securities dealers (“Soliciting Dealers”) who will solicit purchases of Creation Unit Aggregations of shares. Such Soliciting Dealers may also be Authorized Participants (as defined below), DTC Participants (as defined below) and/or Investor Services Organizations.

BGFA or BGI may, from time to time and from its own resources, pay, defray or absorb costs relating to distribution, including payments out of its own resources to the Distributor, or to otherwise promote the sale of shares.

44

The following table sets forth the compensation paid by BGFA to the Distributor for certain services, not primarily intended to result in the sale of shares, provided to each Fund during the periods noted below.

iShares MSCI Index Fund	Fiscal Year Ended August 31, 2003(1)			Fiscal Year Ended August 31, 2004(1)		Fiscal Year Ended August 31, 2005
Australia	$	205,125		$	314,500	$	37,659
Austria	$	42,674		$	67,990	$	37,659
Belgium	$	49,363		$	36,909	$	37,659
Brazil	$	153,103		$	518,712	$	37,659
Canada	$	1,031,688		$	739,090	$	37,659
Emerging Markets	$	N/A		$	N/A	$	37,659
EMU	$	354,255		$	576,486	$	37,659
France	$	120,331		$	116,817	$	37,659
Germany	$	211,378		$	267,711	$	37,659
Hong Kong	$	335,992		$	876,350	$	37,659
Italy	$	72,779		$	56,600	$	37,659
Japan	$	1,928,163		$	7,356,615	$	37,659
Malaysia	$	194,363		$	399,705	$	37,659
Mexico	$	138,789		$	194,535	$	37,659
Netherlands	$	48,682		$	43,809	$	37,659
Pacific ex-Japan	$	N/A		$	N/A	$	37,659
Singapore	$	206,649		$	328,530	$	37,659
South Africa	$	98,906	(2)	$	180,540	$	37,659
South Korea	$	287,347		$	507,357	$	37,659
Spain	$	88,759		$	99,673	$	37,659
Sweden	$	32,343		$	48,845	$	37,659
Switzerland	$	72,503		$	86,032	$	37,659
Taiwan	$	371,788		$	787,666	$	37,659
United Kingdom	$	365,957		$	446,553	$	37,659

⁽¹⁾ Effective July 1, 2004, the Company does not have a distribution plan (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act. Prior to July 1, 2004, the Company had in place a Plan which pertained to each Fund, other than the iShares MSCI Emerging Markets Index Fund and the iShares MSCI Pacific ex-Japan Index Fund. Under the Plan, the Distributor was entitled to receive a distribution fee, accrued daily and paid monthly, calculated with respect to each Fund at a rate set from time to time, by the Board, provided that the annual rate may not exceed 0.25% of the average daily net assets of such Fund. From time to time, the Distributor may waive all or a portion of these fees.

⁽²⁾ For the period February 3, 2003 (inception date) through August 31, 2003.

BROKERAGE TRANSACTIONS

BGFA assumes general supervision over placing orders on behalf of each Fund for the purchase and sale of portfolio securities. In selecting brokers or dealers for any transaction in portfolio securities, BGFA’s policy is to make such selection based on factors deemed relevant, including but not limited to, the breadth of the market in the security, the price of the security, the reasonableness of the commission or mark-up or mark-down, if any, execution capability, settlement capability, back office efficiency and the financial condition of the broker or dealer, both for the specific transaction and on a continuing basis. The overall reasonableness of brokerage commissions paid is evaluated by BGFA based upon its knowledge of available information as to the general level of commissions paid by other institutional investors for comparable services. Brokers may also be selected because of their ability to handle special or difficult executions, such as may be involved in large block trades, less liquid securities, broad distributions, or other circumstances. BGFA does not consider the provision or value of research, products or services a broker or dealer may provide, if any, as a factor in the selection of a broker or dealer or the determination of the reasonableness of commissions paid in connection with portfolio transactions. The Company has adopted policies and procedures that prohibit the consideration of sales of a Fund’s shares as a factor in the selection of a broker or a dealer to execute its portfolio transactions.

45

The table below sets forth the brokerage commissions paid by each Fund for the periods noted. Any differences in brokerage commissions paid by a Fund from year to year are due to increases or decreases in that Fund’s assets over those periods.

iShares MSCI Index Fund	Commissions Paid During Fiscal Year Ended August 31, 2003			Commissions Paid During Fiscal Year Ended August 31, 2004		Commissions Paid During Fiscal Year Ended August 31, 2005
Australia	$	12,331		$	18,507	$	50,149
Austria	$	4,855		$	6,847	$	42,998
Belgium	$	3,783		$	8,301	$	13,256
Brazil	$	11,701		$	31,544	$	115,463
Canada	$	66,855		$	94,309	$	52,554
Emerging Markets	$	83,882	(1)	$	457,832	$	893,470
EMU	$	12,357		$	19,740	$	24,066
France	$	3,806		$	1,961	$	2,487
Germany	$	9,369		$	6,480	$	7,753
Hong Kong	$	23,354		$	15,500	$	23,840
Italy	$	5,668		$	1,489	$	4,837
Japan	$	6,489		$	25,730	$	118,468
Malaysia	$	24,962		$	57,232	$	41,354
Mexico	$	16,139		$	20,285	$	41,173
Netherlands	$	4,911		$	1,625	$	4,875
Pacific ex-Japan	$	27,869		$	66,731	$	209,879
Singapore	$	24,085		$	39,289	$	33,920
South Africa	$	46,333	(2)	$	34,976	$	43,582
South Korea	$	84,653		$	102,750	$	66,985
Spain	$	9,631		$	4,806	$	7,477
Sweden	$	3,302		$	1,870	$	4,724
Switzerland	$	3,529		$	1,551	$	5,080
Taiwan	$	71,166		$	89,556	$	100,258
United Kingdom	$	25,471		$	9,608	$	27,149

⁽¹⁾ For the period April 7, 2003 (inception date) through August 31, 2003.

⁽²⁾ For the period February 3, 2003 (inception date) through August 31, 2003.

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For the fiscal year ended August 31, 2005, the following Funds invested in the securities of “regular broker dealers,” as defined under the 1940 Act, which derive more than 15% of their gross revenues from securities-related activities:

iShares MSCI Index Fund	Fiscal Year End	Issuer	Market Value of Investment
MSCI Australia Index Fund	8/31	Bank of America NA	$	1,701,098
		Credit Suisse First Boston	$	1,190,769
		JP Morgan Chase Bank NA	$	449,149
		UBS AG	$	272,175
MSCI Austria Index Fund	8/31	Bank of America NA	$	585,465
		Credit Suisse First Boston	$	409,826
		JP Morgan Chase Bank NA	$	154,583
		UBS AG	$	93,674
MSCI Belgium Index Fund	8/31	Credit Suisse First Boston	$	279,427
		JP Morgan Chase Bank NA	$	105,398
		UBS AG	$	63,869
MSCI Brazil Index Fund	8/31	Credit Suisse First Boston	$	167,784
		UBS AG	$	38,351
MSCI Canada Index Fund	8/31	Royal Bank of Canada	$	25,253,660
MSCI Emerging Markets Index Fund	8/31	Credit Suisse First Boston	$	13,685,658
MSCI EMU Index Fund	8/31	Deutsche Bank AG	$	7,590,359
		Bank of America NA	$	4,174,614
		Credit Suisse First Boston	$	2,922,230
		UBS AG	$	667,937
MSCI France Index Fund	8/31	Societe Generale Class A	$	3,316,340
		Bank of America NA	$	660,803
		Credit Suisse First Boston	$	462,561
		Societe Generale	$	204,813
MSCI Germany Index Fund	8/31	Deutsche Bank AG	$	20,433,656
		Credit Suisse First Boston	$	841,140
		UBS AG	$	192,260
MSCI Hong Kong Index Fund	8/31	Bank of America NA	$	2,252,320
		Royal Bank of Scotland	$	1,728,284
		Credit Suisse First Boston	$	1,576,624
		HSBC Bank USA NA	$	383,054
MSCI Italy Index Fund	8/31	Bank of America NA	$	408,074
		Credit Suisse First Boston	$	285,652
		UBS AG	$	65,291
MSCI Japan Index Fund	8/31	Nomura Holdings Inc	$	84,831,705
		Credit Suisse First Boston	$	23,906,590
		JP Morgan Chase Bank NA	$	9,017,381
		UBS AG	$	5,464,352
MSCI Mexico Index Fund	8/31	Royal Bank of Scotland	$	44,600
		Credit Suisse First Boston	$	40,685
		Societe Generale	$	18,015
		UBS AG	$	9,300
MSCI Netherlands Index Fund	8/31	Bank of America NA	$	219,279
		Credit Suisse First Boston	$	153,496
		JP Morgan Chase Bank NA	$	57,897
		HSBC Bank USA NA	$	37,293
		UBS AG	$	35,085

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MSCI Pacific ex-Japan Index Fund	8/31	Bank of America NA	$	6,940,353
		Credit Suisse First Boston	$	4,858,247
		HSBC Bank USA NA	$	1,180,352
		UBS AG	$	1,110,454
MSCI Singapore Index Fund	8/31	Royal Bank of Scotland	$	733,122
		Credit Suisse First Boston	$	668,788
		JP Morgan Chase Bank NA	$	252,262
		HSBC Bank USA NA	$	162,487
MSCI South Korea Index Fund	8/31	Credit Suisse First Boston	$	668,489
MSCI Spain Index Fund	8/31	Credit Suisse First Boston	$	195,483
		JP Morgan Chase Bank NA	$	73,735
MSCI Sweden Index Fund	8/31	Credit Suisse First Boston	$	302,121
		JP Morgan Chase Bank NA	$	113,958
		UBS AG	$	69,056
MSCI Switzerland Index Fund	8/31	Bank of America NA	$	26,370
		Credit Suisse First Boston	$	18,459
		JP Morgan Chase Bank NA	$	6,963
		UBS AG	$	4,220
MSCI United Kingdom Index Fund	8/31	Bank of America NA	$	17,256
		Credit Suisse First Boston	$	12,079
		UBS AG	$	2,761

The Company will not deal with affiliates in principal transactions unless permitted by applicable SEC rule or regulation or by SEC exemptive order.

None of the Funds paid any brokerage commissions to Barclays Global Investor Services (“BGIS”), an affiliate of BGFA, and a subsidiary of BGI, during the fiscal year ended August 31, 2005.

BGFA assumes general supervision over placing orders on behalf of the Funds for the purchase or sale of portfolio securities. If purchases or sales of portfolio securities of the Funds and one or more other investment companies or clients supervised by BGFA are considered at or about the same time, transactions in such securities are allocated among the several investment companies and clients in a manner deemed equitable to all by BGFA. In some cases, this procedure could have a detrimental effect on the price or volume of the security as far as the Funds are concerned. However, in other cases, it is possible that the ability to participate in volume transactions and to negotiate lower brokerage commissions will be beneficial to the Funds. The primary consideration is prompt execution of orders at the most favorable net price.

Portfolio turnover may vary from year to year, as well as within a year. High turnover rates are likely to result in comparatively greater brokerage expenses. The portfolio turnover rate for each Fund is expected to be under 50%. The overall reasonableness of brokerage commissions is evaluated by BGFA based upon its knowledge of available information as to the general level of commissions paid by the other institutional investors for comparable services.

The table below sets forth the portfolio turnover rates of each Fund for the periods noted.

iShares MSCI Index Fund	Fiscal Year Ended August 31, 2004		Fiscal Year Ended August 31, 2005
Australia	9	%	17	%
Austria	11	%	21	%
Belgium	21	%	10	%
Brazil	106	%	48	%
Canada	10	%	9	%
Emerging Markets	8	%	9	%
EMU	11	%	8	%
France	9	%	7	%
Germany	9	%	9	%
Hong Kong	5	%	6	%
Italy	9	%	18	%
Japan	5	%	6	%
Malaysia	39	%	15	%

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iShares MSCI Index Fund	Fiscal Year Ended August 31, 2004		Fiscal Year Ended August 31, 2005
Mexico	12	%	9	%
Netherlands	9	%	6	%
Pacific ex-Japan	8	%	16	%
Singapore	9	%	8	%
South Africa	13	%	32	%
South Korea	29	%	30	%
Spain	6	%	8	%
Sweden	9	%	6	%
Switzerland	4	%	5	%
Taiwan	19	%	20	%
United Kingdom	6	%	11	%

ADDITIONAL INFORMATION CONCERNING THE COMPANY

Capital Stock. The Company currently is comprised of 24 series that issue shares of common stock, par value $0.001 per share, referred to herein as the following Funds: the iShares MSCI Australia Index Fund, the iShares MSCI Austria Index Fund, the iShares MSCI Belgium Index Fund, the iShares MSCI Brazil Index Fund, the iShares MSCI Canada Index Fund, the iShares MSCI Emerging Markets Index Fund, the iShares MSCI EMU Index Fund, the iShares MSCI France Index Fund, the iShares MSCI Germany Index Fund, the iShares MSCI Hong Kong Index Fund, the iShares MSCI Italy Index Fund, the iShares MSCI Japan Index Fund, the iShares MSCI Malaysia Index Fund, the iShares MSCI Mexico Index Fund, the iShares MSCI Netherlands Index Fund, the iShares MSCI Pacific ex-Japan Index Fund, the iShares MSCI Singapore Index Fund, the iShares MSCI South Africa Index Fund, the iShares MSCI South Korea Index Fund, the iShares MSCI Spain Index Fund, the iShares MSCI Sweden Index Fund, the iShares MSCI Switzerland Index Fund, the iShares MSCI Taiwan Index Fund, and the iShares MSCI United Kingdom Index Fund. Each Fund has been issued as a separate class of capital stock. In addition to the 24 Funds listed above, the Company has authorized for issuance, but is not currently offering for sale to the public, six additional series of shares of common stock. The Board may designate additional series of common stock and classify shares of a particular series into one or more classes of that series. The Amended and Restated Articles of Incorporation confers upon the Board of Directors the power to establish the number of shares which constitute a Creation Unit Aggregation or by resolution, restrict the redemption right to Creation Unit Aggregations.

Each share issued by a Fund has a pro rata interest in the assets of that Fund. The Company is currently authorized to issue 10.9 billion shares of common stock. The following number of shares is currently authorized for each Fund: the iShares MSCI Australia Index Fund, 127.8 million shares; the iShares MSCI Austria Index Fund, 19.8 million shares; the iShares MSCI Belgium Index Fund, 136.2 million shares; the iShares MSCI Brazil Index Fund, 500 million shares; the iShares MSCI Canada Index Fund, 340.2 million shares; the iShares MSCI Emerging Markets Index Fund, 500 million shares; the iShares MSCI EMU Index Fund, 500 million shares; the iShares MSCI France Index Fund, 340.2 million shares; the iShares MSCI Germany Index Fund, 382.2 million shares; the iShares

MSCI Hong Kong Index Fund, 191.4 million shares; the iShares MSCI Italy Index Fund, 63.6 million shares; the iShares MSCI Japan Index Fund, 2,124.6 million shares; the iShares MSCI Malaysia Index Fund, 127.8 million shares; the iShares MSCI Mexico Index Fund, 255 million shares; the iShares MSCI Netherlands Index Fund, 255 million shares, iShares MSCI Pacific ex-Japan Index Fund, 500 million shares; the iShares MSCI Singapore Index Fund, 191.4 million shares; the iShares MSCI South Africa Index Fund, 200 million shares; the iShares MSCI South Korea Index Fund, 200 million shares; the iShares MSCI Spain Index Fund, 127.8 million shares; the iShares MSCI Sweden Index Fund, 63.6 million shares; the iShares MSCI Switzerland Index Fund, 318.625 million shares; the iShares MSCI Taiwan Index Fund, 200 million shares; and the iShares MSCI United Kingdom Index Fund, 943.2 million shares. Fractional shares will not be issued. Shares have no preemptive, exchange, subscription or conversion rights and are freely transferable. Each share is entitled to participate equally in dividends and distributions declared by the Board with respect to the relevant Fund, and in the net distributable assets of such Fund on liquidation. Shareholders are entitled to require the Company to redeem Creation Unit Aggregations of their shares. The Articles of Incorporation confers upon the Board the power, by resolution, to alter the number of shares constituting a Creation Unit or to specify that shares of common stock of the Company may be individually redeemable.

Each share has one vote with respect to matters upon which a stockholder vote is required consistent with the requirements of the 1940 Act and the rules promulgated thereunder and the Maryland General Corporation Law; stockholders have no

49

cumulative voting rights with respect to their shares. Shares of all Funds vote together as a single class except that, if the matter being voted on affects only a particular Fund, and, if a matter affects a particular Fund differently from other Funds, that Fund will vote separately on such matter.

Under Maryland law, the Company is not required to hold an annual meeting of stockholders unless required to do so under the 1940 Act. The policy of the Company is not to hold an annual meeting of stockholders unless required to do so under the 1940 Act. All shares of the Company (regardless of Fund) have noncumulative voting rights for the election of Directors. Under Maryland law, Directors of the Company may be removed by vote of the stockholders.

Following the creation of the initial Creation Unit Aggregation(s) of a Fund and immediately prior to the commencement of trading in such Fund’s shares, a holder of shares may be a “control person” of the Fund, as defined in the 1940 Act. A Fund cannot predict the length of time for which one or more shareholders may remain a control person of the Fund.

Shareholders may make inquiries by writing to the Company, c/o the Distributor, SEI Investments Distribution Co., 1 Freedom Valley Drive, Oaks, PA 19456.

Absent an applicable exemption or other relief from the SEC or its staff, beneficial owners of more than 5% of the shares of a Fund may be subject to the reporting provisions of Section 13 of the 1934 Act and the SEC’s rules promulgated thereunder. In addition, absent an applicable exemption or other relief from the SEC or its staff, officers and Directors of the Company and beneficial owners of 10% of the shares of a Fund (“Insiders”) may be subject to the insider reporting, short-swing profit and short sale provisions of Section 16 of the 1934 Act and the SEC’s rules promulgated thereunder. Beneficial owners and Insiders should consult with their own legal counsel concerning their obligations under Sections 13 and 16 of the 1934 Act.

Termination of the Company or a Fund. The Company or a Fund may be terminated by a majority vote of the Board or the affirmative vote of a super majority of the holders of the Company or such Fund entitled to vote on termination. Although the shares are not automatically redeemable upon the occurrence of any specific event, the Company’s organizational documents provide that the Board will have the unrestricted power to alter the number of shares in a Creation Unit Aggregation. In the event of a termination of the Company or a Fund, the Board, in its sole discretion, could determine to permit the shares to be redeemable in aggregations smaller than Creation Unit Aggregations or to be individually redeemable. In such circumstance, the Company may make redemptions in-kind, for cash, or for a combination of cash or securities.

Book-Entry Only System. The following information supplements and should be read in conjunction with the Shareholder Information section in the Prospectus.

DTC Acts as Securities Depository for the Shares of the Company. Shares of each Fund are represented by securities registered in the name of DTC or its nominee and deposited with, or on behalf of, DTC.

DTC, a limited-purpose trust company, was created to hold securities of its participants (the “DTC Participants”) and to facilitate the clearance and settlement of securities transactions among the DTC Participants in such securities through electronic book-entry changes in accounts of the DTC Participants, thereby eliminating the need for physical movement of securities’ certificates. DTC Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations, some of whom (and/or their representatives) own DTC. More specifically, DTC is owned by a number of its DTC Participants and by the NYSE, the AMEX and the NASD. Access to the DTC system is also available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a DTC Participant, either directly or indirectly (the “Indirect Participants”).

Beneficial ownership of shares is limited to DTC Participants, Indirect Participants and persons holding interests through DTC Participants and Indirect Participants. Ownership of beneficial interests in iShares (owners of such beneficial interests are referred to herein as “Beneficial Owners”) is shown on, and the transfer of ownership is effected only through, records maintained by DTC (with respect to DTC Participants) and on the records of DTC Participants (with respect to Indirect Participants and Beneficial Owners that are not DTC Participants). Beneficial Owners will receive from or through the DTC Participant a written confirmation relating to their purchase of shares. The laws of some jurisdictions may require that certain purchasers of securities take physical delivery of such securities in definitive form. Such laws may impair the ability of certain investors to acquire beneficial interests in shares.

Beneficial Owners of shares are not entitled to have shares registered in their names, will not receive or be entitled to receive physical delivery of certificates in definitive form and are not considered the registered holder thereof. Accordingly, each Beneficial Owner must rely on the procedures of DTC, the DTC Participant and any Indirect Participant through which such Beneficial Owner holds its interests, to exercise any rights of a holder of shares. The Company understands that under existing industry practice, in the event the Company requests any action of holders of shares, or a Beneficial Owner desires to take any action that DTC, as the record owner of all outstanding shares, is entitled to take, DTC would authorize the DTC

50

Participants to take such action and that the DTC Participants would authorize the Indirect Participants and Beneficial Owners acting through such DTC Participants to take such action and would otherwise act upon the instructions of Beneficial Owners owning through them. As described above, the Company recognizes DTC or its nominee as the owner of all shares for all purposes.

Conveyance of all notices, statements and other communications to Beneficial Owners is effected as follows. Pursuant to the Depositary Agreement between the Company and DTC, DTC is required to make available to the Company upon request and for a fee to be charged to the Company a listing of the share holdings of each DTC Participant. The Company shall inquire of each such DTC Participant as to the number of Beneficial Owners holding shares of the Funds, directly or indirectly, through such DTC Participant. The Company shall provide each such DTC Participant with copies of such notice, statement or other communication, in such form, number and at such place as such DTC Participant may reasonably request, in order that such notice, statement or communication may be transmitted by such DTC Participant, directly or indirectly, to such Beneficial Owners. In addition, the Company shall pay to each such DTC Participant a fair and reasonable amount as reimbursement for the expenses attendant to such transmittal, all subject to applicable statutory and regulatory requirements.

Share distributions shall be made to DTC or its nominee, Cede & Co., as the registered holder of all shares of the Company. DTC or its nominee, upon receipt of any such distributions, shall credit immediately DTC Participants’ accounts with payments in amounts proportionate to their respective beneficial interests in shares as shown on the records of DTC or its nominee. Payments by DTC Participants to Indirect Participants and Beneficial Owners of shares held through such DTC Participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in a “street name,” and will be the responsibility of such DTC Participants. The Company has no responsibility or liability for any aspects of the records relating to or notices to Beneficial Owners, or payments made on account of beneficial ownership interests in such shares, or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests or for any other aspect of the relationship between DTC and the DTC Participants or the relationship between such DTC Participants and the Indirect Participants and Beneficial Owners owning through such DTC Participants.

DTC may determine to discontinue providing its service with respect to shares of the Company at any time by giving reasonable notice to the Company and discharging its responsibilities with respect thereto under applicable law. Under such circumstances, the Company shall take action either to find a replacement for DTC to perform its functions at a comparable cost or, if such a replacement is unavailable, to issue and deliver printed certificates representing ownership of shares, unless the Company makes other arrangements with respect thereto satisfactory to the Listing Exchange on which shares are listed.

PURCHASE AND REDEMPTION OF CREATION AND REDEMPTIONS

Creation Unit Aggregations. The Company issues and redeems shares of each Fund only in creation unit aggregations. The following table sets forth the number of iShares of a Fund that constitute a Creation Unit Aggregation for such Fund and the value of such Creation Unit Aggregation as of September 30, 2005:

iShares MSCI Index Fund	Shares Per Creation Unit	Value Per Creation Unit ($U.S.)
Australia	200,000	$	3,924,000
Austria	100,000	$	2,712,000
Belgium	40,000	$	768,000
Brazil	50,000	$	1,666,500
Canada	100,000	$	2,152,000
Emerging Markets	150,000	$	12,676,500
EMU	50,000	$	3,847,500
France	200,000	$	5,208,000
Germany	300,000	$	5,847,000
Hong Kong	75,000	$	1,005,750
Italy	150,000	$	3,951,000
Japan	600,000	$	7,272,000
Malaysia	75,000	$	551,250
Mexico	100,000	$	3,275,000
Netherlands	50,000	$	966,000
Pacific ex-Japan	100,000	$	10,302,000
Singapore	100,000	$	785,000
South Africa	50,000	$	4,590,000
South Korea	50,000	$	1,944,500
Spain	75,000	$	2,828,250
Sweden	75,000	$	1,688,250
Switzerland	125,000	$	2,272,500
Taiwan	50,000	$	582,500
United Kingdom	200,000	$	3,812,000

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The Board reserves the right to declare a split or a consolidation in the number of shares outstanding of any Fund of the Company, and to make a corresponding change in the number of shares constituting a Creation Unit, in the event that the per share price in the secondary market rises (or declines) to an amount that falls outside the range deemed desirable by the Board.

Purchase and Issuance of Creation Unit Aggregations

General. The Company issues and sells shares of each Fund only in Creation Units on a continuous basis through the Distributor, without a sales load, at the Fund’s NAV next determined after receipt, on any Business Day (as defined herein), of an order in proper form.

A “Business Day” with respect to each Fund is any day on which the Listing Exchange is open for business. As of the date of this SAI, each Listing Exchange observes the following holidays, as observed: New Year’s Day, Dr. Martin Luther King, Jr. Day, Presidents’ Day, Good Friday, Memorial Day (observed), Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

Portfolio Deposit. The consideration for purchase of a Creation Unit of shares of a Fund (except for the iShares MSCI Brazil Index, iShares MSCI Malaysia Index, iShares MSCI South Korea Index and iShares MSCI Taiwan Index Funds, which are currently offered, in their iShares Creation Units solely for cash) generally consists of the in-kind deposit of a designated portfolio of equity securities (the “Deposit Securities”) constituting an optimized representation of the Fund’s benchmark foreign securities index and an amount of cash computed as described below (the “Cash Component”). Together, the Deposit Securities and the Cash Component constitute the “Portfolio Deposit,” which represents the minimum initial and subsequent investment amount for shares of any Fund of the Company. The Cash Component is an amount equal to the Balancing Amount (as defined below). The “Balancing Amount” is an amount equal to the difference between (x) the net asset value (per Creation Unit) of the Fund and (y) the “Deposit Amount” which is the market value (per Creation Unit) of the securities deposited with the Company. The Balancing Amount serves the function of compensating for any differences between the net asset value per Creation Unit and the Deposit Amount. Payment of any stamp duty or other similar fees and expenses payable upon transfer of beneficial ownership of the Deposit Securities shall be the sole responsibility of the Authorized Participant that purchased the Creation Unit.

BGFA makes available through the National Securities Clearing Corporation (“NSCC”) on each Business Day, prior to the opening of business on the Listing Exchange, the list of the names and the required number of shares of each Deposit Security to be included in the current Portfolio Deposit (based on information at the end of the previous Business Day) for each Fund. Such Portfolio Deposit is applicable, subject to any adjustments as described below, in order to effect purchases of Creation Units of iShares of a given Fund until such time as the next-announced Portfolio Deposit composition is made available.

The identity and number of shares of the Deposit Securities required for a Portfolio Deposit for each Fund changes as rebalancing adjustments and corporate action events are reflected from time to time by BGFA with a view to the investment objective of the Fund. The composition of the Deposit Securities may also change in response to adjustments to the weighting or composition of the securities constituting the relevant securities index.

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In addition, the Company reserves the right to permit or require the substitution of an amount of cash (i.e., a “cash in lieu” amount) to be added to the Cash Component to replace any Deposit Security which may not be available in sufficient quantity for delivery or for other similar reasons. The adjustments described above will reflect changes, known to BGFA on the date of announcement to be in effect by the time of delivery of the Portfolio Deposit, in the composition of the subject index being tracked by the relevant Fund, or resulting from stock splits and other corporate actions.

In addition to the list of names and numbers of securities constituting the current Deposit Securities of a Portfolio Deposit, on each Business Day, the Cash Component effective through and including the previous Business Day, per outstanding Creation Unit of each Fund, will be made available.

Role of The Authorized Participant. Creation Units of shares may be purchased only by or through a DTC Participant that has entered into an Authorized Participant Agreement with the Distributor (“Authorized Participant”). Such Authorized Participant will agree pursuant to the terms of such Authorized Participant Agreement on behalf of itself or any investor on whose behalf it will act, as the case may be, to certain conditions, including that such Authorized Participant will make available in advance of each purchase of iShares an amount of cash sufficient to pay the Cash Component, once the net asset value of a Creation Unit is next determined after receipt of the purchase order in proper form, together with the transaction fee described below. The Authorized Participant may require the investor to enter into an agreement with such Authorized Participant with respect to certain matters, including payment of the Cash Component. Investors who are not Authorized Participants must make appropriate arrangements with an Authorized Participant. Investors should be aware that their particular broker may not be a DTC Participant or may not have executed an Authorized Participant Agreement, and that therefore orders to purchase Creation Units may have to be placed by the investor’s broker through an Authorized Participant. As a result, purchase orders placed through an Authorized Participant may result in additional charges to such investor. The Company does not expect to enter into an Authorized Participant Agreement with more than a small number of DTC Participants that have international capabilities. A list of the current Authorized Participants may be obtained from the Distributor.

Purchase Order. To initiate an order for a Creation Unit of shares, the Authorized Participant must submit to the Distributor an irrevocable order to purchase shares of the Funds. The Distributor will notify BGFA and the Custodian of such order. The Custodian will then provide such information to the appropriate subcustodian. For each Fund, the Custodian shall cause the subcustodian of the Fund to maintain an account into which the Authorized Participant shall deliver, on behalf of itself or the party on whose behalf it is acting, the securities included in the designated Portfolio Deposit (or the cash value of all or a part of such securities, in the case of a permitted or required cash purchase or “cash in lieu” amount), with any appropriate adjustments as advised by the Company. Deposit Securities must be delivered to an account maintained at the applicable local subcustodian. Those placing orders to purchase Creation Units through an Authorized Participant should allow sufficient time to permit proper submission of the purchase order to the Distributor by the cut-off time on such Business Day.

The Authorized Participant must also make available on or before the contractual settlement date, by means satisfactory to the Company, immediately available or same day funds estimated by the Company to be sufficient to pay the Cash Component next determined after acceptance of the purchase order, together with the applicable purchase transaction fee. Any excess funds will be returned following settlement of the issue of the Creation Unit. Those placing orders should ascertain the applicable deadline for cash transfers by contacting the operations department of the broker or depositary institution effectuating the transfer of the Cash Component. This deadline is likely to be significantly earlier than the closing time of the regular trading session on the Listing Exchange.

Investors should be aware that an Authorized Participant may require orders for purchases of shares placed with it to be in the particular form required by the individual Authorized Participant.

Timing of Submission of Purchase Orders. For most Funds, an Authorized Participant must submit an irrevocable purchase before 4:00 p.m. (Eastern time) on any Business Day in order to receive that Business Day’s NAV. An Authorized Participant must submit an irrevocable order to purchase shares of the iShares MSCI Malaysia, iShares MCSI South Korea and iShares MSCI Taiwan Index Funds by 11:59 p.m. (Eastern time) on any Business Day in order to receive the next Business Day’s NAV. Orders to purchase shares of the iShares MSCI Malaysia, iShares MSCI South Korea or MSCI Taiwan Index Fund that are submitted on the Business Day immediately preceding a holiday or a day (other than a weekend) that the equity markets in the relevant foreign market are closed will not be accepted. An Authorized Participant must submit an irrevocable order to purchase shares of the iShares MSCI Brazil Index Fund before 3:00 p.m. (Eastern time) in order to receive that Business Day’s NAV. In addition, orders to purchase shares of the MSCI Brazil Index Fund will not be accepted on any day when the Brazilian markets are closed. The Distributor in its discretion may permit the submission of such orders and requests by or through an Authorized Participant at any time (including on days on which the Listing Exchange is not open for business) via communication through the facilities of the Distributor’s proprietary website maintained for this purpose. Purchase orders and redemption requests, if accepted by the Company, will be processed based on the NAV next determined

53

after such acceptance, in accordance with the Company’s standard cut-off times as provided in the Authorized Participant Agreement and disclosed in this Statement of Additional Information.

Acceptance of Purchase Order. Subject to the conditions that (i) an irrevocable purchase order has been submitted by the Authorized Participant (either on its own or another investor’s behalf) and (ii) arrangements satisfactory to the Company are in place for payment of the Cash Component and any other cash amounts which may be due, the Company will accept the order, subject to its right (and the right of the Distributor and BGFA) to reject any order until acceptance.

Once the Company has accepted an order, upon next determination of the NAV of the shares, the Company will confirm the issuance of a Creation Unit of the Fund, against receipt of payment, at such NAV. The Distributor will then transmit a confirmation of acceptance to the Authorized Participant that placed the order.

The Company reserves the absolute right to reject or revoke acceptance of a purchase order transmitted to it by the Distributor in respect of any Fund if (a) the purchaser or group of purchasers, upon obtaining the shares ordered, would own 80% or more of the currently outstanding shares of any Fund; (b) the Deposit Securities delivered are not as specified by BGFA, as described above; (c) acceptance of the Deposit Securities would have certain adverse tax consequences to the Fund; (d) the acceptance of the Portfolio Deposit would, in the opinion of counsel, be unlawful; (e) the acceptance of the Portfolio Deposit would otherwise, in the discretion of the Company or BGFA, have an adverse effect on the Company or the rights of beneficial owners; or (f) in the event that circumstances outside the control of the Company, the Distributor and BGFA make it for all practical purposes impossible to process purchase orders. The Company shall notify a prospective purchaser of its rejection of the order of such person. The Company and the Distributor are under no duty, however, to give notification of any defects or irregularities in the delivery of Portfolio Deposits nor shall either of them incur any liability for the failure to give any such notification.

Issuance of a Creation Unit. Except as provided herein, a Creation Unit of shares of a Fund will not be issued until the transfer of good title to the Company of the Deposit Securities and the payment of the Cash Component have been completed. When the subcustodian has confirmed to the Custodian that the required securities included in the Portfolio Deposit (or the cash value thereof) have been delivered to the account of the relevant subcustodian or subcustodians, the Distributor and the Adviser shall be notified of such delivery, and the Company will issue and cause the delivery of the Creation Unit. Creation Units typically are issued on a “T+3 basis” (i.e., three Business Days after trade date). However, as discussed in Appendix A, each Fund reserves the right to settle Creation Unit transactions on a basis other than T+3 in order to accommodate foreign market holiday schedules, to account for different treatment among foreign and U.S. markets of dividend record dates and ex-dividend dates (i.e., the last day the holder of a security can sell the security and still receive dividends payable on the security), and in certain other circumstances.

To the extent contemplated by an Authorized Participant’s agreement with the Distributor, the Company will issue Creation Units to such Authorized Participant notwithstanding the fact that the corresponding Portfolio Deposits have not been received in part or in whole, in reliance on the undertaking of the Authorized Participant to deliver the missing Deposit Securities as soon as possible, which undertaking shall be secured by such Authorized Participant’s delivery and maintenance of collateral having a value at least equal to 110%, which BGFA may change from time to time, of the value of the missing Deposit Securities in accordance with the Company’s then-effective procedures. The only collateral that is acceptable to the Company is cash in U.S. Dollars or an irrevocable letter of credit in form, and drawn on a bank, that is satisfactory to the Company. The cash collateral posted by the Authorized Participant may be invested at the risk of the Authorized Participant, and income, if any, on invested cash collateral will be paid to that Authorized Participant. Information concerning the Company’s current procedures for collateralization of missing Deposit Securities is available from the Distributor. The Authorized Participant Agreement will permit the Company to buy the missing Deposit Securities at any time and will subject the Authorized Participant to liability for any shortfall between the cost to the Company of purchasing such securities and the cash collateral or the amount that may be drawn under any letter of credit.

In certain cases, Authorized Participants will create and redeem Creation Units of the same trade date. In these instances, the Company reserves the right to settle these transactions on a net basis. All questions as to the number of shares of each security in the Deposit Securities and the validity, form, eligibility and acceptance for deposit of any securities to be delivered shall be determined by the Company, and the Company’s determination shall be final and binding.

Cash Purchase Method. Although the Company does not ordinarily permit cash purchases of Creation Units, when cash purchases of Creation Units are available or specified for a Fund (Creation Units of the iShares MSCI Brazil Index, iShares MSCI Malaysia Index, iShares MSCI South Korea Index and iShares MSCI Taiwan Index Funds are currently offered only for cash), they will be effected in essentially the same manner as in-kind purchases thereof. In the case of a cash purchase, the investor must pay the cash equivalent of the Deposit Securities it would otherwise be required to provide through an in-kind purchase, plus the same Cash Component required to be paid by an in-kind purchaser. In addition, to offset the Company’s brokerage and other transaction costs associated with using the cash to purchase the requisite Deposit Securities, the investor

54

will be required to pay a fixed purchase transaction fee, plus an additional variable charge for cash purchases, which is expressed as a percentage of the value of the Deposit Securities. The transaction fees for in-kind and cash purchases of Creation Units are described below.

Purchase Transaction Fee. A purchase transaction fee payable to the Company is imposed to compensate the Company for the transfer and other transaction costs of a Fund associated with the issuance of Creation Units. Purchasers of Creation Units for cash are required to pay an additional variable charge to compensate the relevant Fund for brokerage and market impact expenses relating to investing in portfolios securities. Where the Company permits an in-kind purchaser to substitute cash in lieu of depositing a portion of the Deposit Securities, the purchaser will be assessed the additional variable charge for cash purchases on the “cash in lieu” portion of its investment. Purchasers of Creation Units are responsible for the costs of transferring the securities constituting the Deposit Securities to the account of the Company. The purchase transaction fees for in-kind purchases and cash purchases (when available) are listed in the table below. This table is subject to revision from time to time. Investors are also responsible for payment of the costs of transferring the Deposit Securities to the Company.

55

iShares MSCI Index Fund	In-kind and cash purchases		Maximum Additional Variable Charge for Cash Purchases*
Australia	$	2,400	0.60	%
Austria	$	600	0.67	%
Belgium	$	700	0.30	%
Brazil	$	2,400	*	*
Canada	$	1,900	0.30	%
Emerging Markets	$	7,700	*	*
EMU	$	8,000	1.05	%
France	$	2,900	0.25	%
Germany	$	1,500	0.25	%
Hong Kong	$	2,000	0.60	%
Italy	$	1,400	0.30	%
Japan	$	5,000	0.15	%
Malaysia	$	5,000	*	*
Mexico	$	1,400	0.50	%
Netherlands	$	1,000	0.25	%
Pacific ex-Japan	$	6,000	1.80	%
Singapore	$	2,000	1.60	%
South Africa	$	1,200	0.75	%
South Korea	$	4,000	*	*
Spain	$	1,500	0.25	%
Sweden	$	1,300	0.30	%
Switzerland	$	1,500	0.40	%
Taiwan	$	4,500	*	*
United Kingdom	$	3,500	0.25	%

* As a percentage of the value of amount invested.

** The maximum additional variable charge for cash purchases will be a percentage of the value of the Deposit Securities, which will not exceed 3.00%.

Redemption of Creation Units. Shares of a Fund may be redeemed only in Creation Units at their NAV next determined after receipt of a redemption request in proper form by the Distributor. The Company will not redeem shares in amounts less than Creation Units. Beneficial owners also may sell shares in the secondary market, but must accumulate enough iShares to constitute a Creation Unit in order to have such shares redeemed by the Company. There can be no assurance, however, that there will be sufficient liquidity in the public trading market at any time to permit assembly of a Creation Unit of iShares. Investors should expect to incur brokerage and other costs in connection with assembling a sufficient number of iShares to constitute a redeemable Creation Unit.

With respect to each Fund (other than the iShares MSCI Brazil Index, iShares MSCI Malaysia Index, iShares MSCI South Korea Index and iShares MSCI Taiwan Index Funds, which currently redeem Creation Units of iShares solely for cash) BGFA makes available through the NSCC prior to the opening of business on the Listing Exchange on each Business Day, the Portfolio Securities that will be applicable (subject to possible amendment or correction) to redemption requests received in proper form (as defined below) on that day. Unless cash redemptions are available or specified for a Fund, the redemption proceeds for a Creation Unit generally consist of Deposit Securities as announced by BGFA through the NSCC on the Business Day of the request for redemption, plus cash in an amount equal to the difference between the NAV of the shares being redeemed, as next determined after a receipt of a request in proper form, and the value of the Deposit Securities, less the redemption transaction fee described below. The redemption transaction fee described below is deducted from such redemption proceeds. In the case of a resident Australian or New Zealand holder, notwithstanding the foregoing, such holder is only entitled to receive cash upon its redemption of Creation Units of iShares.

A redemption transaction fee payable to the Company is imposed to offset transfer and other transaction costs that may be incurred by the relevant Fund, including market impact expenses relating to disposing of portfolio securities. The redemption transaction fee for redemptions in kind and for cash and the additional variable charge for cash redemptions (when cash redemptions are available or specified) are listed in the table below. Investors will also bear the costs of transferring the Portfolio Deposit from the Company to their account or on their order. Investors who use the services of a broker or other such intermediary may be charged a fee for such services.

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iShares MSCI Index Fund	In-kind and cash Redemptions		Maximum Additional Variable Charge for Cash Redemptions*
Australia	$	2,400	0.60	%
Austria	$	600	0.67	%
Belgium	$	700	0.30	%
Brazil	$	2,400	*	*
Canada	$	1,900	0.30	%
Emerging Markets	$	7,700	*	*
EMU	$	8,000	1.05	%
France	$	2,900	0.25	%
Germany	$	1,500	0.25	%
Hong Kong	$	2,000	0.60	%
Italy	$	1,400	0.30	%
Japan	$	5,000	0.40	%
Malaysia	$	5,000	*	*
Mexico	$	1,400	0.50	%
Netherlands	$	1,000	0.25	%
Pacific ex-Japan	$	6,000	1.50	%
Singapore	$	2,000	1.30	%
South Africa	$	1,200	0.75	%
South Korea	$	4,000	*	*
Spain	$	1,500	0.45	%
Sweden	$	1,300	0.30	%
Switzerland	$	1,500	0.40	%
Taiwan	$	4,500	*	*
United Kingdom	$	3,500	0.75	%

* As a percentage of the value of amount invested.

** The maximum additional variable charge for cash redemptions will be a percentage of the value of the Deposit Securities, which will not exceed 2.00%.

Redemption requests in respect of Creation Units of any Fund must be submitted to the Distributor by or through an Authorized Participant. For most Funds, an Authorized Participant must submit an irrevocable redemption request before 4:00 p.m. (Eastern time) on any Business Day in order to receive that Business Day’s NAV. An Authorized Participant must submit an irrevocable request to redeem shares of the iShares MSCI Malaysia, iShares MCSI South Korea and iShares MSCI Taiwan Index Funds by 11:59 p.m. (Eastern time) on any Business Day in order to receive the next Business Day’s NAV. Orders to redeem shares of the iShares MSCI Malaysia, iShares MSCI South Korea or iShares MSCI Taiwan Index Fund that are submitted the Business Day immediately preceding a holiday or a day (other than a weekend) that the equity markets in the relevant foreign market are closed will not be accepted. An Authorized Participant must submit an irrevocable request to redeem shares of the iShares MSCI Brazil Index Fund before 3:00 p.m. (Eastern time) in order to receive that Business Day’s NAV. In addition, orders to redeem shares of the MSCI Brazil Index Fund will not be accepted on any day when the Brazilian markets are closed. Investors other than through Authorized Participants are responsible for making arrangements for a redemption request to be made through an Authorized Participant. The Distributor will provide a list of current Authorized Participants upon request.

The Authorized Participant must transmit the request for redemption, in the form required by the Company, to the Distributor in accordance with procedures set forth in the Authorized Participant Agreement. Investors should be aware that their particular broker may not have executed an Authorized Participant Agreement, and that, therefore, requests to redeem Creation Units may have to be placed by the investor’s broker through an Authorized Participant who has executed an Authorized Participant Agreement. At any given time there will be only a limited number of broker-dealers that have executed an Authorized Participant Agreement. Investors making a redemption request should be aware that such request must be in the form specified by such Authorized Participant. Investors making a request to redeem Creation Units should allow sufficient time to permit proper submission of the request by an Authorized Participant and transfer of the shares to the Company’s Transfer Agent; such investors should allow for the additional time that may be required to effect redemptions through their banks, brokers or other financial intermediaries if such intermediaries are not Authorized Participants.

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A redemption request is considered to be in “proper form” if (i) an Authorized Participant has transferred or caused to be transferred to the Company’s Transfer Agent the Creation Unit of shares being redeemed through the book-entry system of DTC so as to be effective by the Listing Exchange closing time on any Business Day and (ii) a request in form satisfactory to the Company is received by the Distributor from the Authorized Participant on behalf of itself or another redeeming investor within the time periods specified above. If the Transfer Agent does not receive the investor’s shares through DTC’s facilities by 10:00 a.m., Eastern time, on the Business Day next following the day that the redemption request is received, the redemption request shall be rejected. Investors should be aware that the deadline for such transfers of shares through the DTC system may be significantly earlier than the close of business on the Listing Exchange. Those making redemption requests should ascertain the deadline applicable to transfers of shares through the DTC system by contacting the operations department of the broker or depositary institution effecting the transfer of the shares.

Upon receiving a redemption request, the Distributor shall notify the Company and the Company’s Transfer Agent of such redemption request. The tender of an investor’s shares for redemption and the distribution of the cash redemption payment in respect of Creation Units redeemed will be effected through DTC and the relevant Authorized Participant to the beneficial owner thereof as recorded on the book-entry system of DTC or the DTC Participant through which such investor holds, as the case may be, or by such other means specified by the Authorized Participant submitting the redemption request.

In connection with taking delivery of shares of Deposit Securities upon redemption of shares of the Fund, a redeeming Beneficial Owner or Authorized Participant acting on behalf of such Beneficial Owner must maintain appropriate security arrangements with a qualified broker-dealer, bank or other custody providers in each jurisdiction in which any of the Portfolio Securities are customarily traded, to which account such Portfolio Securities will be delivered.

Deliveries of redemption proceeds by the Funds generally will be made within three Business Days (i.e., “T+3”). However, as discussed in Appendix A, each Fund reserves the right to settle redemption transactions and deliver redemption proceeds on a basis other than T+3 to accommodate foreign market holiday schedules, to account for different treatment among foreign and U.S. markets of dividend record dates and dividend ex-dates (i.e., the last date the holder of a security can sell the security and still receive dividends payable on the security sold), and in certain other circumstances. For each country relating to a Fund, Appendix A hereto identifies the instances where more than seven days would be needed to deliver redemption proceeds. Pursuant to an order of the SEC, in respect of each Fund, the Company will make delivery of in-kind redemption proceeds within the number of days stated in Appendix A to be the maximum number of days necessary to deliver redemption proceeds.

If neither the redeeming Beneficial Owner nor the Authorized Participant acting on behalf of such redeeming Beneficial Owner has appropriate arrangements to take delivery of the Portfolio Securities in the applicable foreign jurisdiction and it is not possible to make other such arrangements, or if it is not possible to effect deliveries of the Portfolio Securities in such jurisdiction, the Company may in its discretion exercise its option to redeem such shares in cash, and the redeeming Beneficial Owner will be required to receive its redemption proceeds in cash. In such case, the investor will receive a cash payment equal to the net asset value of its shares based on the NAV of shares of the relevant Fund next determined after the redemption request is received in proper form (minus a redemption transaction fee and additional variable charge for cash redemptions specified above, to offset the Company’s brokerage and other transaction costs associated with the disposition of Portfolio Securities of the Fund). Redemptions of shares for Deposit Securities will be subject to compliance with applicable U.S. federal and state securities laws and each Fund (whether or not it otherwise permits cash redemptions) reserves the right to redeem Creation Units for cash to the extent that the Fund could not lawfully deliver specific Deposit Securities upon redemptions or could not do so without first registering the Deposit Securities under such laws.

Although the Company does not ordinarily permit cash redemptions of Creation Units (except that, as noted above, Creation Units of the iShares MSCI Brazil Index, iShares MSCI Malaysia Index, iShares MSCI South Korea Index and iShares MSCI Taiwan Index Funds may be redeemed only for cash, and resident Australian and New Zealand holders may redeem solely for cash), in the event that cash redemptions are permitted or required by the Company, proceeds will be paid to the Authorized Participant redeeming shares on behalf of the redeeming investor as soon as practicable after the date of redemption (within seven calendar days thereafter, except for the instances listed in Appendix A hereto where more than seven calendar days would be needed).

To the extent contemplated by an Authorized Participant’s agreement with the Distributor, in the event the Authorized Participant that has submitted a redemption request in proper form is unable to transfer all or part of the Creation Units of shares to be redeemed to the Company, at or prior to 10:00 a.m., Eastern time, on the Listing Exchange business day after the date of submission of such redemption request, the Distributor will nonetheless accept the redemption request in reliance on the undertaking by the Authorized Participant to deliver the missing shares as soon as possible, which undertaking shall be secured by the Authorized Participant’s delivery and maintenance of collateral consisting of cash having a value at least equal

58

to 110%, which BGFA may change from time to time, of the value of the missing iShares in accordance with the Company’s then-effective procedures. The only collateral that is acceptable to the Company is cash in U.S. Dollars or an irrevocable letter of credit in form, and drawn on a bank, that is satisfactory to the Company. The Company’s current procedures for collateralization of missing shares require, among other things, that any cash collateral shall be in the form of U.S. Dollars in immediately available funds and shall be held by the Company’s Custodian and marked to market daily, and that the fees of the Custodian and any subcustodians in respect of the delivery, maintenance and redelivery of the cash collateral shall be payable by the Authorized Participant. The cash collateral posted by the Authorized Participant may be invested at the risk of the Authorized Participant, and income, if any, on invested cash collateral will be paid to that Authorized Participant. The Authorized Participant Agreement permits the Company to purchase the missing shares or acquire the Portfolio Securities and the Cash Component underlying such shares at any time and subjects the Authorized Participant to liability for any shortfall between the cost to the Company of purchasing such shares, Portfolio Securities or Cash Component and the cash collateral or the amount that may be drawn under any letter of credit.

Because the Portfolio Securities of a Fund may trade on the relevant exchange(s) on days that the Listing Exchange is closed or are otherwise not Business Days for such Fund, shareholders may not be able to redeem their shares of such Fund, or to purchase or sell shares of such Fund on the Listing Exchange, on days when the NAV of such Fund could be significantly affected by events in the relevant foreign markets.

The right of redemption may be suspended or the date of payment postponed with respect to any Fund (1) for any period during which the New York Stock Exchange is closed (other than customary weekend and holiday closings); (2) for any period during which trading on the New York Stock Exchange is suspended or restricted; (3) for any period during which an emergency exists as a result of which disposal of the shares of the Fund’s portfolio securities or determination of its net asset value is not reasonably practicable; or (4) in such other circumstance as is permitted by the SEC.

TAXES

RIC Qualifications. Each Fund intends to qualify for and to elect treatment as a separate Regulated Investment Company (“RIC”) under Subchapter M of the IRC. To qualify for treatment as a RIC, a company must annually distribute at least 90% of its net investment company taxable income (which includes dividends, interest and net short-term capital gains) and meet several other requirements. Among such other requirements are the following: (i) at least 90% of the Fund’s annual gross income must be derived from dividends, interest, payments with respect to securities loans, gains from the sale or other disposition of stock or securities or foreign currencies, or other income (including gains from options, futures or forward contracts) derived with respect to its business of investing in such stock, securities or currencies net income derived from an interest in a qualified publicly traded partnership; and (ii) at the close of each quarter of the company’s taxable year, (a) at least 50% of the market value of the Fund’s total assets must be represented by cash and cash items, U.S. Government securities, securities of other RICs and other securities, with such other securities limited for purposes of this calculation in respect of any one issuer to an amount not greater than 5% of the value of the Fund’s assets and not greater than 10% of the outstanding voting securities of such issuer, and (b) not more than 25% of the value of the Fund’s total assets may be invested in the securities of any one issuer or of two or more issuers that are controlled by the Fund (within the meaning of Section 851(c) of the IRC) and that are engaged in the same or similar trades or businesses or related trades or businesses (other than U.S. Government securities or the securities of other regulated investment companies) or the securities of one or more qualified publicly traded partnerships.

Taxation of RICs. If a Fund fails to qualify for any taxable year as a RIC, all of its taxable income will be subject to tax at regular corporate income tax rates without any deduction for distributions to shareholders, and such distributions generally will be taxable to shareholders as ordinary dividends to the extent of the Fund’s current and accumulated earnings and profits. In such event, distributions to individuals should qualify as qualified dividend income and distributions to corporate shareholders generally should be eligible for the dividends-received deduction. Although the Fund intends to distribute substantially all of its net investment income and its capital gains for each taxable year, the Fund will be subject to federal income taxation to the extent any such income or gains are not distributed. If the Fund’s distributions exceed its taxable income and capital gains realized during a taxable year, all or a portion of the distributions made in the taxable year may be recharacterized as a return of capital to shareholders. A return of capital distribution generally will not be taxable but will reduce the shareholder’s cost basis and result in a higher capital gain or lower capital loss when those shares on which the distribution was received are sold.

Excise Tax. A Fund will be subject to a 4% excise tax on certain undistributed income if it does not distribute to its shareholders in each calendar year at least 98% of its ordinary income for the calendar year (taking into account any net capital loss carryforwards) plus 98% of its capital gain net income for the twelve months ended October 31 of such year.

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Each Fund intends to declare and distribute dividends and distributions in the amounts and at the times necessary to avoid the application of this 4% excise tax.

Back-Up Withholding. In certain cases, a Fund will be required to withhold at the applicable withholding rate, and remit to the U.S. Treasury such amounts withheld from any distributions paid to a shareholder who: (1) has failed to provide a correct taxpayer identification number; (2) is subject to backup withholding by the Internal Revenue Service; (3) has failed to certify to a Fund that such shareholder is not subject to backup withholding; or (4) has not certified that such shareholder is a U.S. person (including a U.S. resident alien).

Section 351. The Company on behalf of each Fund has the right to reject an order for a purchase of shares of the Fund if the purchaser (or group of purchasers) would, upon obtaining the shares so ordered, own 80% or more of the outstanding shares of a given Fund and if, pursuant to Section 351 of the Internal Revenue Code, that Fund would have a basis in the securities different from the market value of such securities on the date of deposit. If the Fund’s basis in such securities on the date of deposit was less than market value on such date, the Fund, upon disposition of the securities, would recognize more taxable gain or less taxable loss than if its basis in the securities had been equal to market value. It is not anticipated that the Company will exercise the right of rejection except in a case where the Company determines that accepting the order could result in material adverse tax consequences to the Fund or its shareholders. The Company also has the right to require information necessary to determine beneficial share ownership for purposes of the 80% determination.

Qualified Dividend Income. Distributions by the Fund of investment company taxable income (excluding any short-term capital gains) whether received in cash or shares will be taxable either as ordinary income or as qualified dividend income, eligible for the reduced maximum rate to individuals of 15% (5% for individuals in lower tax brackets) to the extent that the Fund receives qualified dividend income on the securities it holds and the Fund designates the distribution as qualified dividend income. Qualified dividend income is, in general, dividend income from taxable domestic corporations and certain foreign corporations (e.g., foreign corporations incorporated in a possession of the United States or in certain countries with a comprehensive tax treaty with the United States, or the stock of which is readily tradable on an established securities market in the United States). A dividend will not be treated as qualified dividend income to the extent that (i) the shareholder has not held the shares on which the dividend was paid for more than 60 days during the 121-day period that begins on the date that is 60 days before the date on which the shares become ex dividend with respect to such dividend (and the Fund also satisfies those holding period requirements with respect to the securities it holds that paid the dividends distributed to the shareholder), (ii) the shareholder is under an obligation (whether pursuant to a short sale or otherwise) to make related payments with respect to substantially similar or related property, or (iii) the shareholder elects to treat such dividend as investment income under section 163(d)(4)(B) of the IRC. Absent further legislation, the maximum 15% rate on qualified dividend income will not apply to dividends received in taxable years beginning after December 31, 2008. Distributions by the Fund of its net short-term capital gains will be taxable as ordinary income. Capital gain distributions consisting of the Fund’s net capital gains will be taxable as long-term capital gains.

Corporate Dividends Received Deduction. A Fund’s dividends that are paid to their corporate shareholders and are attributable to qualifying dividends it received from U.S. domestic corporations may be eligible, in the hands of such shareholders, for the corporate dividends received deduction, subject to certain holding period requirements and debt financing limitations.

Net Capital Loss Carryforwards. Net capital loss carryforwards may be applied against any net realized capital gains in each succeeding year, or until their respective expiration dates, whichever occurs first. The following Funds had tax basis net capital loss carryforwards as of August 31, 2005, the tax year end for the Funds listed.

iShares MSCI Index Fund	Expiring in 2008		Expiring in 2009		Expiring in 2010		Expiring in 2011		Expiring in 2012		Expiring in 2013		Total
Austria	$	548,653	$	336,553	$	1,291,324	$	370,948	$	855,364	$	—	$	3,402,842
Belgium		94,675		450,543		1,677,678		117,767		175,781		33,969		2,550,413
EMU		—		443		1,923,552		1,144,756		4,757,907		1,873,963		9,700,621
France		—		—		3,807,513		236,944		2,400,550		—		6,445,007
Germany		—		86,860		13,573,336		5,469,732		8,656,712		2,241,687		30,028,327
Italy		—		—		3,355,772		848,408		541,980		527,327		5,273,487
Japan		—		2,959,030		62,572,173		3,621,148		5,594,562		8,733,802		83,480,715
Netherlands		—		60,885		3,222,792		1,497,810		2,481,175		129,137		7,391,799
Spain		—		—		1,695,618		678,910		1,582,094		—		3,956,622
Sweden		—		89,443		3,350,244		1,577,551		1,149,514		—		6,166,752
Switzerland		—		—		2,855,879		1,018,305		2,149,171		354,252		6,377,607
United Kingdom		—		—		9,945,254		6,448,554		4,272,059		1,517,783		22,183,650

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iShares MSCI Index Fund	Expiring 2007		Expiring 2008		Expiring 2009		Expiring 2010		Expiring 2011		Expiring 2012		Expiring 2013		Total
Australia	$	674,889	$	630,985	$	1,971,994	$	3,625,203	$	650,082	$	596,240	$	384,424	$	8,533,817
Brazil		—		—		—		—		48,085,016		—		—		48,085,016
Canada		—		—		—		780,114		21,276		2,463,817		5,786,217		9,051,424
Emerging Markets		—		—		—		—		—		840,778		20,296,564		21,137,342
Hong Kong		4,085,707		—		—		4,971,970		2,870,602		2,330,414		468,716		14,727,409
Malaysia		8,654,333		—		—		9,819,029		2,898,105		775,477		6,820,474		28,967,418
Mexico		—		—		—		1,319,032		2,329,290		3,136,170		12,913		6,797,405
Pacific ex-Japan		—		—		—		—		329,461		2,563,114		1,853,572		4,746,147
Singapore		—		—		—		4,810,766		4,428,316		4,256,421		2,558,348		16,053,851
South Africa		—		—		—		—		—		527,613		—		527,613
South Korea		—		—		556,540		666,642		504,041		3,363,449		11,590,303		16,680,975
Taiwan		—		—		—		12,532,361		8,689,663		9,129,874		12,022,719		42,374,617

Funds Holding Foreign Investments. Each Fund may be subject to foreign income taxes withheld at the source. Each Fund that is permitted to do so will elect to “pass through” to its investors the amount of foreign income taxes paid by the Fund provided that the investor held the shares of the Fund, and the Fund held the security, on the dividend settlement date and for at least fifteen additional days immediately before and/or thereafter, with the result that each investor will (i) include in gross income, even though not actually received, the investor’s pro rata share of the Fund’s foreign income taxes, and (ii) either deduct (in calculating U.S. taxable income) or credit (in calculating U.S. federal income tax) the investor’s pro rata share of the Fund’s foreign income taxes. A foreign person who invests in a Fund that elects to “pass through” its foreign taxes may be treated as receiving additional dividend income subject to U.S. withholding tax. A foreign tax credit may not exceed the investor’s U.S. federal income tax otherwise payable with respect to the investor’s foreign source income. For this purpose, each shareholder must treat as foreign source gross income (i) his proportionate share of foreign taxes paid by the Fund and (ii) the portion of any dividend paid by the Fund that represents income derived from foreign sources; the Fund’s gain from the sale of securities will generally be treated as U.S. source income. This foreign tax credit limitation is applied separately to separate categories of income; dividends from the Fund will be treated as “passive” or “financial services” income for this purpose. The effect of this limitation may be to prevent investors from claiming as a credit the full amount of their pro rata share of the Fund’s foreign income taxes. Taxes other than foreign income taxes are not passed through to you in this way. Recent tax legislation could change the characterization of Fund distributions in applying the foreign tax credit limitation in taxable years beginning after December 31, 2006.

If any Fund owns shares in certain foreign investment entities, referred to as “passive foreign investment companies,” the Fund will be subject to one of the following special tax regimes: (i) the Fund is liable for U.S. federal income tax, and an additional charge in the nature of interest, on a portion of any “excess distribution” from such foreign entity or any gain from the disposition of such shares, even if the entire distribution or gain is paid out by the Fund as a dividend to its shareholders; (ii) if the Fund were able and elected to treat a passive foreign investment company as a “qualified electing fund,” the Fund would be required each year to include in income, and distribute to shareholders in accordance with the distribution requirements set forth above, the Fund’s pro rata share of the ordinary earnings and net capital gains of the passive foreign investment company, whether or not such earnings or gains are distributed to the Fund; or (iii) the Fund may be entitled to mark-to-market annually the shares of the passive foreign investment company, and in such event would be required to distribute to shareholders any such mark-to-market gains in accordance with the distribution requirements set forth above.

Federal Tax Treatment of Complex Securities. A Fund may invest in complex securities. These investments may be subject to numerous special and complex tax rules. These rules could affect whether gains and losses recognized by a Fund are treated as ordinary income or capital gain, accelerate the recognition of income to a Fund and/or defer a Fund’s ability to recognize losses. In turn, these rules may affect the amount, timing or character of the income distributed to you by a Fund.

Each Fund is required, for federal income tax purposes, to mark-to-market and recognize as income for each taxable year its net unrealized gains and losses on certain futures and options contracts as of the end of the year as well as those actually realized during the year. Gain or loss from futures and options contracts on broad-based indices required to be marked-to-market will be 60% long-term and 40% short-term capital gain or loss. Application of this rule may alter the timing and character of distributions to shareholders. A Fund may be required to defer the recognition of losses on futures contracts, option contracts and swaps to the extent of any unrecognized gains on offsetting positions held by the Fund.

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It is anticipated that any net gain realized from the closing out of futures or options contracts will be considered qualifying income for purposes of the 90% requirement for a Fund to qualify as a RIC.

Each Fund intends to distribute to shareholders annually any net capital gains that have been recognized for federal income tax purposes (including unrealized gains at the end of the Fund’s fiscal year) on futures or options transactions. Such distributions are combined with distributions of capital gains realized on the Fund’s other investments and shareholders are advised on the nature of the distributions.

The foregoing discussion is a summary only and is not intended as a substitute for careful tax planning. Purchasers of iShares should consult their own tax advisers as to the tax consequences of investing in such shares, including under state, local and foreign tax laws. Finally, the foregoing discussion is based on applicable provisions of the Internal Revenue Code, regulations, judicial authority and administrative interpretations in effect on the date of this Statement of Additional Information. Changes in applicable authority could materially affect the conclusions discussed above, and such changes often occur.

DETERMINATION OF NAV

The NAV for each Fund is calculated by deducting all of a Fund’s liabilities (including accrued expenses) from the total value of its assets (including the securities held by the Fund plus any cash or other assets, including interest and dividends accrued but not yet received) and dividing the result by the number of shares outstanding, and generally rounded to the nearest cent, although each Fund reserves the right to calculate its NAV to more than two decimal places. Expenses and fees, including without limitation, the management, administration and distribution fees, are accrued daily and taken into account for purposes of determining NAV. The NAV for each Fund will generally be determined once daily Monday through Friday generally as of the regularly scheduled close of business of the NYSE (normally 4:00 p.m. Eastern time) on each day that the NYSE is open for trading, based on prices at the time of closing, provided that (a) any assets or liabilities denominated in currencies other than the U.S. dollar shall be translated into U.S. dollars at the prevailing market rates on the date of valuation as quoted by one or more major banks or dealers that makes a two-way market in such currencies (or a data service provider based on quotations received from such banks or dealers); and (b) U.S. fixed-income assets may be valued as of the announced closing time for trading in fixed-income instruments on any day that the Bond Market Association announces an early closing time.

In calculating a Fund’s NAV, the Fund’s investments are generally valued using market valuations. In the event that current market valuations are not readily available or such valuations do not reflect current market values, the affected investments will be valued using fair value pricing pursuant to the pricing policy and procedures approved by the Board of Directors. A market valuation generally means a valuation (i) obtained from an exchange, a pricing service, or a major market maker (or dealer), (ii) based on a price quotation or other equivalent indication of value supplied by an exchange, a pricing service, or a major market maker (or dealer) or (iii) based on amortized cost. In the case of shares of funds that are not traded on an exchange, a market valuation means such fund’s published net asset value per share. BGFA may use various pricing services or discontinue the use of any pricing service. A price obtained from a pricing service based on such pricing service’s valuation matrix may be considered a market valuation.

The value of assets denominated in foreign currencies is converted into U.S. dollars using exchange rates deemed appropriate by BGFA as investment adviser. Any use of a different rate from the rate used by MSCI may adversely affect a Fund’s ability to track its Underlying Index.

DIVIDENDS AND DISTRIBUTIONS

The following information supplements and should be read in conjunction with the section in the Prospectus entitled Shareholder Information.

General Policies. Dividends from net investment income, including any net foreign currency gains, are declared and paid at least annually and any net realized securities gains are distributed at least annually. In order to improve tracking error or comply with the distribution requirements of the Internal Revenue Code of 1986, dividends may be declared and paid more frequently than annually for certain Funds. Dividends and securities gains distributions are distributed in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds. The Company reserves the right to declare special distributions if, in its reasonable discretion, such action is necessary or advisable to preserve the status of each Fund as a RIC or to avoid imposition of income or excise taxes on undistributed income.

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Dividends and other distributions of shares are distributed on a pro rata basis to Beneficial Owners of such shares. Dividend payments are made through DTC Participants and Indirect Participants to Beneficial Owners then of record with proceeds received from the Funds.

Dividend Reinvestment Service. No reinvestment service is provided by the Company. Broker-dealers may make available the DTC book-entry Dividend Reinvestment Service for use by Beneficial Owners of Funds for reinvestment of their dividend distributions. Beneficial Owners should contact their broker to determine the availability and costs of the service and the details of participation therein. Brokers may require Beneficial Owners to adhere to specific procedures and timetables.

FINANCIAL STATEMENTS

The Funds’ audited Financial Statements and Notes, including the Financial Highlights, appearing in the Annual Report to Shareholders and the reports therein of PricewaterhouseCoopers LLP, a registered public accounting firm, for the fiscal year ended August 31, 2005 are hereby incorporated by reference in this SAI. The Annual Report to Shareholders is delivered with this SAI to shareholders requesting this SAI.

MISCELLANEOUS INFORMATION

Counsel. Morgan, Lewis & Bockius LLP, 1111 Pennsylvania Avenue N.W., Washington, D.C., 20004 is counsel to the Company.

Independent Registered Public Accounting Firm. PricewaterhouseCoopers, located at Three Embarcadero Center, San Francisco, CA 94111, serves as the independent registered public accounting firm of the Company. They audit the Funds’ financial statements and may perform other services.

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APPENDIX A

Each Fund (except the iShares MSCI South Africa Index Fund) generally intends to effect deliveries of Creation Units and Portfolio Securities on a basis of “T” plus three Business Days (i.e., days on which the American Stock Exchange is open). The iShares MSCI South Africa Index Fund generally intends to effect delivery of Creation Units and Portfolio Securities on a basis of “T” plus five Johannesburg Stock Exchange (“JSE”) business days, since the normal settlement cycle for local securities trading in South Africa is T plus five JSE business days. Each Fund may effect deliveries of Creation Units and Portfolio Securities on a basis other than T plus three or T plus five in order to accommodate local holiday schedules, to account for different treatment among foreign and U.S. markets of dividend record dates and ex-dividend dates, or under certain other circumstances. The ability of the Company to effect in-kind creations and redemptions within three Business Days (or five JSE business days in the case of the iShares MSCI South Africa Index Fund) of receipt of an order in good form is subject, among other things, to the condition that, within the time period from the date of the order to the date of delivery of the securities, there are no days that are holidays in the applicable foreign market. For every occurrence of one or more intervening holidays in the applicable foreign market that are not holidays observed in the U.S. equity market, the redemption settlement cycle will be extended by the number of such intervening holidays. In addition to holidays, other unforeseeable closings in a foreign market due to emergencies may also prevent the Company from delivering securities within normal settlement period.

The securities delivery cycles currently practicable for transferring Portfolio Securities to redeeming investors, coupled with foreign market holiday schedules, will require a delivery process longer than seven calendar days for some Funds, in certain circumstances. The holidays applicable to each Fund during such periods are listed below, as are instances where more than seven days will be needed to deliver redemption proceeds. Although certain holidays may occur on different dates in subsequent years, the number of days required to deliver redemption proceeds in any given year is not expected to exceed the maximum number of days listed below for each Fund. The proclamation of new holidays, the treatment by market participants of certain days as “informal holidays” (e.g., days on which no or limited securities transactions occur, as a result of substantially shortened trading hours), the elimination of existing holidays, or changes in local securities delivery practices, could affect the information set forth herein at some time in the future.

iSHARES MSCI AUSTRALIA INDEX FUND

Regular Holidays. The dates of the regular Australian holidays in the calendar year 2006 are as follows:

Jan 2	Apr 17	Oct 2
Jan 26	Apr 25	Nov 7
Mar 13	Jun 12	Dec 25
Apr 14	Aug 7	Dec 26

Redemption. The Company is not aware of a redemption request over any Australian holiday that would result in a settlement period exceeding 7 calendar days during the calendar year 2006.

iSHARES MSCI AUSTRIA INDEX FUND

Regular Holidays. The dates of the regular Austrian in the calendar year 2006 are as follows:

Jan 6	May 25	Oct 26	Dec 26
Apr 14	Jun 5	Nov 1	Dec 29
Apr 17	Jun 15	Dec 8
May 1	Aug 15	Dec 25

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Redemption. The Company is not aware of a redemption request over any Austrian holiday that would result in a settlement period exceeding 7 calendar days during the calendar year 2006.

iSHARES MSCI BELGIUM INDEX FUND

Regular Holidays. The dates of the regular Belgian holidays in the calendar year 2006 are as follows:

Apr 14

Apr 17

May 1

Dec 25

Redemption. The Company is not aware of a redemption request over any Belgian holiday that would result in a settlement period exceeding 7 calendar days during the calendar year 2006.

iSHARES MSCI BRAZIL INDEX FUND

Regular Holidays. The dates of the regular Brazilian holidays in the calendar year 2005 are as follows:

Jan 25	Apr 21	Oct 12	Dec 29
Feb 27	May 1	Nov 2
Feb 28	Jun 15	Nov 15
Apr 14	Sep 7	Dec 25

Redemption. The Company is not aware of a redemption request over any Brazilian holiday that would result in a settlement period exceeding 7 calendar days during the calendar year 2006.

iSHARES MSCI CANADA INDEX FUND

Regular Holidays. The dates of the regular Canadian holidays in the calendar year 2006 are as follows:

Jan 2	Aug 7	Dec 25
Apr 14	Sep 4	Dec 26
May 22	Oct 9
Jul 3	Nov 13

Redemption. The Company is not aware of a redemption request over any Canadian holiday that would result in a settlement period exceeding 7 calendar days during the calendar year 2006.

iSHARES MSCI EMERGING MARKETS INDEX FUND

Regular Holidays. The dates of the regular holidays in the calendar year 2006 in Argentina, Brazil, Chile, China, Colombia, the Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Jordan, Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, Turkey and Venezuela are as follows:

Argentina				Malaysia
Apr 13	Jun 19	Dec 8		Jan 2	Feb 1	Aug 31	Dec 25
Apr 14	Aug 21	Dec 25		Jan 10	Feb 2	Oct 23
May 1	Oct 16			Jan 30	Apr 11	Oct 24
May 25	Nov 6			Jan 31	May 1	Oct 25
Brazil				Mexico
Jan 25	Apr 21	Oct 12	Dec 29	Mar 21	Nov 20
Feb 27	May 1	Nov 2		Apr 13	Dec 1
Feb 28	Jun 15	Nov 15		Apr 14	Dec 12
Apr 14	Sep 7	Dec 25		May 1	Dec 25
Chile				Morocco
Apr 14	Aug 15	Nov 1		Jan 11	Apr 12	Oct 24
May 1	Sep 18	Dec 8		Jan 12	May 1	Oct 25
Jun 12	Sep 19	Dec 25		Jan 31	Aug 14	Nov 6
Jun 26	Oct 9			Apr 11	Aug 21

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China						Peru
Jan 2	Jan 31					Apr 13	Jul 28	Dec 25
Jan 26	Feb 1-3					Apr 14	Aug 30
Jan 27	May 1-5					May 1	Nov 1
Jan 30						Jun 29	Dec 8
Colombia						Philippines
Jan 9	May 1	July 3	Oct 16	Dec 25		Apr 13	Oct 24	Dec 25
Mar 20	May 29	July 20	Nov 6	Dec 29		Apr 14	Nov 1
Apr 13	Jun 19	Aug 7	Nov 13			May 1	Nov 2
Apr 14	Jun 26	Aug 21	Dec 8			Jun 12	Nov 30
The Czech Republic						Poland
Apr 17	July 6	Dec 26				Apr 14	Jun 15	Dec 26
May 1	Sept 28					Apr 17	Aug 15
May 8	Nov 17					May 1	Nov 1
July 5	Dec 25					May 3	Dec 25
Egypt						Russia
Jan 1	Jan 31	Apr 25	Oct 25			Jan 2	Mar 8	May 9	Dec 11
Jan 9	Apr 10	May 1	Oct 26			Jan 3	May 1	Jun 12	Dec 12
Jan 10	Apr 23	July 23	Dec 31			Jan 9	May 2	Nov 6
Jan 11	Apr 24	Oct 24				Feb 23	May 8	Nov 7
Hungary						South Africa
Mar 15	Oct 23					Jan 2	Apr 27	Sep 25
Apr 17	Nov 1					Mar 21	May 1	Dec 25
May 1	Dec 25					Apr 14	Jun 16	Dec 26
Jun 5	Dec 26					Apr 17	Aug 9
India						Taiwan
Jan 26	Oct 2					Jan 26	Feb 1	May 1
Apr 14	Dec 25					Jan 27	Feb 2	May 31
May 1						Jan 30	Feb 28	Oct 6
Aug 15						Jan 31	Apr 5	Oct 10
Indonesia						Thailand
Jan 10	Apr 14	Oct 23	Dec 25			Jan 2	Apr 13	May 5	Oct 23
Jan 30	May 25	Oct 24	Dec 26			Feb 13	Apr 14	May 15	Dec 5
Mar 30	Aug 17	Oct 25				Apr 6	Apr 15	Jul 10	Dec 11
Apr 10	Aug 21	Oct 26				Apr 6	May 1	Aug 14
Israel						Turkey
Mar 14	Apr 19	Aug 3				Jan 9	Jan 13	Oct 24
Apr 12	May 2	Sept 24				Jan 10	May 19	Oct 25
Apr 13	May 3	Oct 1				Jan 11	Aug 30
Apr 18	Jun 1	Oct 2				Jan 12	Oct 23
Jordan						Venezuela
Jan 1	Jan 11	Apr 11	Oct 22	Oct 26	Dec 31	Jan 9	Apr 14	Jun 19	Aug 14	Dec 25
Jan 8	Jan 12	May 1	Oct 23	Nov 14		Feb 27	Apr 19	Jun 26	Oct 12
Jan 9	Jan 30	May 25	Oct 24	Dec 25		Feb 28	May 1	Jul 5	Oct 30
Jan 10	Jan 31	Aug 22	Oct 25	Dec 28		Apr 13	May 29	Jul 24	Dec 11

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South Korea
Jan 30	Jun 1	Oct 3
Mar 1	Jun 6	Oct 5
May 1	Jul 17	Dec 25
May 5	Aug 15

Redemption. The longest redemption cycle for the iShares MSCI Emerging Markets Index Fund is a function of the longest redemption cycles among the countries whose stocks comprise this Fund. In the calendar year 2005, the dates of the regular holidays affecting the following securities Markets present the worst-case redemption cycle for the iShares MSCI Emerging Markets Index Fund as follows:

	Redemption Request Date	Redemption Settlement Date(R)	Settlement Period
China	1/23/2006	2/6/2006	14
	1/24/2006	2/7/2006	14
	1/25/2006	2/8/2006	14
	4/26/2006	5/8/2006	12
	4/27/2006	5/9/2006	12
	4/28/2006	5/10/2006	12
Indonesia	10/18/2006	10/29/2006	11
	10/19/2006	10/30/2006	11
	10/22/2006	10/31/2006	9
Jordan	1/5/2006	1/13/2006	8
	1/6/2006	1/16/2006	10
	10/19/2006	10/27/2006	8
	10/20/2006	10/30/2006	10
Malaysia	1/25/2006	5/3/2006	9
	1/26/2006	5/6/2006	11
	1/27/2006	5/7/2006	11
Turkey
	1/5/2006	1/16/2006	11
	1/6/2006	1/17/2006	11
South Africa	4/7/2006	4/18/2006	11
	4/10/2006	4/19/2006	9
	4/11/2006	4/20/2006	9
	4/12/2006	4/21/2006	9
	4/13/2006	4/24/2006	11
	12/18/2006	12/27/2006	9
	12/19/2006	12/28/2006	9
	12/20/2006	12/31/2006	11
	12/21/2006	1/2/2007	12
	12/24/2006	1/3/2007	12

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In the calendar year 2006, 12 calendar days would be the maximum number of calendar days necessary to satisfy a redemption request made on the iShares MSCI Emerging Markets Index Fund.

iSHARES MSCI EMU INDEX FUND

Regular Holidays. The dates in the calendar year 2006 on which the regular Austrian, Belgian, Finnish, French, German, Greek, Irish, Italian, Dutch, Portuguese and Spanish holidays affecting the relevant securities markets fall are as follows:

Austria				Greece
Jan 6	May 25	Oct 26	Dec 26	Jan 6	Apr 21	Aug 15
Apr 14	Jun 5	Nov 1	Dec 29	Mar 6	Apr 24	Dec 25
Apr 17	Jun 15	Dec 8		Apr 14	May 1	Dec 26
May 1	Aug 15	Dec 25		Apr 17	Jun 12
Belgium				Italy
Apr 14				Apr 14	Dec 25
Apr 17				Apr 17	Dec 26
May 1				May 1
Dec 25				Aug 15
Finland				Netherlands
Jan 6	May 25	Dec 26		Apr 14	Dec 26
Apr 14	Jun 23			Apr 17
Apr 17	Dec 6			May 1
May 1	Dec 25			Dec 25
France				Portugal
Apr 14	Dec 26			Apr 14	Dec 26
Apr 17				Apr 17
May 1				May 1
Dec 25				Dec 25
Germany				Spain
Apr 14	Dec 26			Jan 6	Aug 15	Dec 8
Apr 17				Apr 14	Oct 12	Dec 25
May 1				Apr 17	Nov 1	Dec 26
Dec 25				May 1	Dec 6

Redemption. The longest redemption cycle for the iShares MSCI EMU Index Fund is a function of the longest redemption cycles among the countries whose stocks comprise this Index Fund. The Company is not aware of a redemption request over any holiday that would result in a settlement period exceeding 7 calendar days during the calendar year 2006.

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iSHARES MSCI FRANCE INDEX FUND

Regular Holidays. The dates of the regular French holidays in the calendar year 2006 are as follows:

Apr 14	Dec 26
Apr 17
May 1
Dec 25

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Redemption. The Company is not aware of a redemption request over any French holiday that would result in a settlement period exceeding 7 calendar days during the calendar year 2006.

iSHARES MSCI GERMANY INDEX FUND

Regular Holidays. The dates of the regular German holidays in the calendar year 2006 are as follows:

Apr 14	Dec 26
Apr 17
May 1
Dec 25

Redemption. The Company is not aware of a redemption request over any German holiday that would result in a settlement period exceeding 7 calendar days during the calendar year 2006.

iSHARES MSCI HONG KONG INDEX FUND

Regular Holidays. The dates of the regular Hong Kong holidays in the calendar year 2006 are as follows:

Jan 2	Apr 14	May 31	Dec 26
Jan 30	Apr 17	Oct 2
Jan 31	May 1	Oct 30
Apr 5	May 5	Dec 25

Redemption. The Company is not aware of a redemption request over any Hong Kong holiday that would result in a settlement period exceeding 7 calendar days during the calendar year 2006.

iSHARES MSCI ITALY INDEX FUND

Regular Holidays. The dates of the regular Italian holidays in the calendar year 2006 are as follows:

Apr 14	Dec 25
Apr 17	Dec 26
May 1
Aug 15

Redemption. The Company is not aware of a redemption request over any Italian holiday that would result in a settlement period exceeding 7 calendar days during the calendar year 2006.

iSHARES MSCI JAPAN INDEX FUND

Regular Holidays. The dates of the regular Japanese holidays in the calendar year 2006 are as follows:

Jan 2	May 3	Sep 18
Jan 3	May 4	Oct 9
Jan 9	May 5	Nov 3
Mar 21	Jul 17	Nov 23

Redemption. A redemption request over the following dates would result in a settlement period exceeding 7 calendar days (examples are based on the day particular holidays fall in the calendar year 2005):

Redemption Request Date	Redemption Settlement Date(R)	Settlement   Period
4/28/2006	5/8/2006	10
5/1/2006	5/9/2006	8
5/2/2006	5/10/2006	8

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In the calendar year 2006, 11 calendar days would be the maximum number of calendar days necessary to satisfy a redemption request made on the iShares MSCI Japan Index Fund.

iSHARES MSCI MALAYSIA INDEX FUND

Regular Holidays. The dates of the regular Malaysian holidays in the calendar year 2006 are as follows:

Jan 2	Feb 1	Aug 31	Dec 25
Jan 10	Feb 2	Oct 23
Jan 30	Apr 11	Oct 24
Jan 31	May 1	Oct 25

Redemption. A redemption request over the following dates would result in a settlement period exceeding 7 calendar days (examples are based on the day particular holidays fall in the calendar year 2003):

Redemption Request Date	Redemption Settlement Date(R)	Settlement Period
1/25/2006	5/3/2006	9
1/26/2006	5/6/2006	11
1/27/2006	5/7/2006	11

In the calendar year 2006, 10 calendar days would be the maximum number of calendar days necessary to satisfy a redemption request made on the iShares MSCI Malaysia Index Fund.

iSHARES MSCI MEXICO INDEX FUND

Regular Holidays. The dates of the regular Mexican holidays in the calendar year 2006 are as follows:

Mar 21	Nov 20
Apr 13	Dec 1
Apr 14	Dec 12
May 1	Dec 25

Redemption. The Company is not aware of a redemption request over any Mexican holiday that would result in a settlement period exceeding 7 calendar days during the calendar year 2006.

iSHARES MSCI NETHERLANDS INDEX FUND

Regular Holidays. The dates of the regular Netherlands holidays in the calendar year 2006 are as follows:

Apr 14	Dec 26
Apr 17
May 1
Dec 25

Redemption. The Company is not aware of a redemption request over any Dutch holiday that would result in a settlement period exceeding 7 calendar days during the calendar year 2006.

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iSHARES MSCI PACIFIC EX JAPAN INDEX FUND

Regular Holidays. The dates of the regular Australian, Hong Kong, New Zealand and Singaporean holidays in the calendar year 2005 are as follows:

Australia				New Zealand
Jan 2	Apr 17	Oct 2		Jan 2	Apr 17	Dec 25
Jan 26	Apr 25	Nov 7		Jan 3	Apr 25	Dec 26
Mar 13	Jun 12	Dec 25		Feb 6	Jun 5
Apr 14	Aug 7	Dec 26		Apr 14	Oct 23
Hong Kong				Singapore
Jan 2	Apr 14	May 31	Dec 26	Jan 2	Apr 14	Dec 25
Jan 30	Apr 17	Oct 2		Jan 10	May 1
Jan 31	May 1	Oct 30		Jan 30	Aug 9
Apr 5	May 5	Dec 25		Jan 31	Oct 24

Redemption. The Company is not aware of a redemption request over any Australian, Hong Kong, New Zealand or Singaporean holiday that would result in a settlement period exceeding 7 calendar days during the calendar year 2006.

iSHARES MSCI SINGAPORE INDEX FUND

Regular Holidays. The dates of the regular Singaporean holidays in the calendar year 2006 are as follows:

Jan 2	Apr 14	Dec 25
Jan 10	May 1
Jan 30	Aug 9
Jan 31	Oct 24

Redemption. The Company is not aware of a redemption request over any Singaporean holiday that would result in a settlement period exceeding 7 calendar days during the calendar year 2006.

iSHARES MSCI SOUTH AFRICA INDEX FUND

Regular Holidays. The dates of the regular South African holidays in the calendar year 2006 are as follows:

Jan 2	Apr 27	Sep 25
Mar 21	May 1	Dec 25
Apr 14	Jun 16	Dec 26
Apr 17	Aug 9

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Redemption. A redemption request over the following dates would result in a settlement period exceeding 7 calendar days (examples are based on the day particular holidays fall in the calendar year 2004):

Redemption Request Date	Redemption Settlement Date(R)	Settlement Period
4/7/2006	4/18/2006	11
4/10/2006	4/19/2006	9
4/11/2006	4/20/2006	9
4/12/2006	4/21/2006	9
4/13/2006	4/24/2006	11
12/18/2006	12/27/2006	9
12/19/2006	12/28/2006	9
12/20/2006	12/31/2006	11
12/21/2006	1/2/2007	12
12/24/2006	1/3/2007	12

In the calendar year 2006, 12 calendar days would be the maximum number of calendar days necessary to satisfy a redemption request made on the iShares MSCI South Africa Index Fund.

iSHARES MSCI SOUTH KOREA INDEX FUND

Regular Holidays. The dates of the regular South Korean holidays in the calendar year 2006 are as follows:

Jan 30	Jun 1	Oct 3
Mar 1	Jun 6	Oct 5
May 1	Jul 17	Dec 25
May 5	Aug 15

Redemption. The Company is not aware of a redemption request over any South Korean holiday that would result in a settlement period exceeding 7 calendar days during the calendar year 2006.

iSHARES MSCI SPAIN INDEX FUND

Regular Holidays. The dates of the regular Spanish holidays in the calendar year 2006 are as follows:

Jan 6	Aug 15	Dec 8
Apr 14	Oct 12	Dec 25
Apr 17	Nov 1	Dec 26
May 1	Dec 6

Redemption. The Company is not aware of a redemption request over any Spanish holiday that would result in a settlement period exceeding 7 calendar days during the calendar year 2006.

iSHARES MSCI SWEDEN INDEX FUND

Regular Holidays. The dates of the regular Swedish holidays in the calendar year 2006 are as follows:

Jan 6	May 25	Dec 26
Apr 14	Jun 5
Apr 17	Jun 23
May 1	Dec 25

Redemption. The Company is not aware of a redemption request over any Swedish holiday that would result in a settlement period exceeding 7 calendar days during the calendar year 2006.

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iSHARES MSCI SWITZERLAND INDEX FUND

Regular Holidays. The dates of the regular Swiss holidays in the calendar year 2006 are as follows:

Jan 2	May 25	Dec 26
Apr 14	Jun 5
Apr 17	Aug 1
May 1	Dec 25

Redemption. The Company is not aware of a redemption request over any Swiss holiday that would result in a settlement period exceeding 7 calendar days during the calendar year 2006.

iSHARES MSCI TAIWAN INDEX FUND

Regular Holidays. The dates of the regular Taiwanese holidays in the calendar year 2006 are as follows:

Jan 26	Feb 1	May 1
Jan 27	Feb 2	May 31
Jan 30	Feb 28	Oct 6
Jan 31	Apr 5	Oct 10

Redemption. The Company is not aware of a redemption request over any Taiwanese holiday that would result in a settlement period exceeding 7 calendar days during the calendar year 2006.

iSHARES MSCI UNITED KINGDOM INDEX FUND

Regular Holidays. The dates of the regular United Kingdom holidays in the calendar year 2006 are as follows:

Jan 2	May 29
Apr 14	Aug 28
Apr 17	Dec 25
May 1	Dec 26

Redemption. The Company is not aware of a redemption request over any United Kingdom holiday that would result in a settlement period exceeding 7 calendar days during the calendar year 2006.

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Other Information

Item 23. Exhibits

Exhibit Number	Description
(a.1)	Registrant’s Amended and Restated Articles of Incorporation. (1)
(a.2)	Registrant’s Articles of Amendment dated October 18, 1996. (4)
(a.3)	Registrant’s Articles Supplementary dated December 9, 1999. (8)
(a.4)	Registrant’s Articles of Amendment dated May 15, 2000. (9)
(a.5)	Registrant’s Form of Articles Supplementary. (11)
(b.1)	Registrant’s Amended By-Laws. (1)
(b.2)	Registrant’s Amendment No. 1 to Amended By-Laws. (5)
(b.3)	Registrant’s Amended and Restated By-Laws dated April 22, 2005. (18)
(c.)	None.
(d.1)	Form of Investment Management Agreement between Registrant and Barclays Global Fund Advisors dated December 19, 2001. (18)
(d.2)	Form of Amended Schedule A to Investment Management Agreement. (11)
(e.1)	Distribution Agreement between Registrant and SEI Investments Distribution Co. dated March 27, 2000. (10)
(e.2)	Amended Exhibit A to Distribution Agreement. (11)
(e.3)	Form of Authorized Participant Agreement. (16)
(e.4)	Authorized Participant Agreement for Merrill Lynch. (3)
(e.5)	Form of Sales and Investor Services Agreement. (10)
(f.)	None.
(g.1)	Custody Agreement between Registrant and The Chase Manhattan Bank dated January 30, 2001. (11)
(g.2)	Amended Appendix 2 to Custody Agreement. (11)
(g.3)	Custodian Agreement between Registrant and Investors Bank & Trust Company dated May 21, 2002. (15)
(h.1)	Amended Administration and Accounting Services Agreement between Registrant and PFPC Inc. (6)
(h.2)	Amended Exhibit A to Amended Administration and Accounting Services Agreement between Registrant and PFPC Inc. (11)
(h.3)	Administration Agreement between Registrant and Investors Bank & Trust Company dated May 21, 2002. (15)
(h.4)	Transfer Agency Services Agreement between Registrant and PNC Bank, National Association. (3)
(h.5)	Amendment to Transfer Agency Services Agreement between Registrant and PNC Bank, National Association. (5)
(h.6)	Amended Exhibit A to Transfer Agency Services Agreement between Registrant and PNC Bank, National Association. (11)
(h.7)	Transfer Agency and Service Agreement between Registrant and Investors Bank & Trust Company dated May 21, 2002. (15)
(h.8)	Sub-License Agreement between Registrant and Barclays Global Investors with respect to the use of the MSCI Indices dated May 8, 2000. (10)
(h.9)	Sub-Administration Agreement between Registrant and Morgan Stanley Trust Company. (6)
(h.10)	Assignment Letter among Morgan Stanley Trust Company, Morgan Stanley & Co. Incorporated and PFPC Inc. (7)
(h.11)	Amended Exhibit A to Sub-Administration Agreement. (11)
(h.12)	Securities Lending Agreement between Registrant and The Chase Manhattan Bank. (11)
(h.13)	Amended Schedule A to Securities Lending Agreement between Registrant and The Chase Manhattan Bank. (11)
(h.14)	Securities Lending Agreement between Registrant and Investors Bank & Trust Company dated May 21, 2002. (15)
(h.15)	Securities Lending Agency Agreement between Registrant and Barclay’s Global Investors. (18)
(i.)	Legal Opinion and Consent of Counsel. (18)
(j.)	Consent of Independent Auditors (18)

(k.)	None.
(l.1)	Subscription Agreement between the Registrant and Funds Distributor, Inc. (2)
(l.2)	Letter of Representations among the Registrant, Depository Trust Company (“DTC”) and Morgan Stanley Trust Company. (1)
(l.3)	Letter of Representations between the Registrant and DTC dated May 5, 2000. (10)
(l.4)	Letter of Representations between the Registrant and DTC dated October 15, 2001. (12)
(m.)	Amended Plan of Distribution pursuant to Rule 12b-1. (14)
(n.)	None.
(o.)	Not applicable.
(p.1)	Code of Ethics of the Registrant. (18)
(p.2)	Code of Ethics of Barclays Global Fund Advisors. (18)
(q.1)	Powers of Attorney. (14)
(q.2)	Power of Attorney for W. Allen Reed dated October 23, 2001. (14)
(q.3)	Power of Attorney for John E. Martinez dated December 22, 2003. (16)
(q.4)	Power of Attorney for Lee T. Kranefuss dated July 19, 2004. (17)
(q.5)	Power of Attorney for Cecilia H. Herbert dated November 15, 2005. (18)
(q.6)	Power of Attorney for Charles A. Hurty dated November 15, 2005. (18)
(q.7)	Power of Attorney for John. E. Kerrigan dated November 15, 2005. (18)

(1) Exhibit is incorporated herein by reference to Pre-Effective Amendment No. 2, filed March 1, 1996, to the Company’s initial registration statement on Form N-1A filed on September 29, 1995 (the “Registration Statement”).

(2) Exhibit is incorporated herein by reference to Pre-Effective Amendment No. 3 to the Registration Statement, filed on March 6, 1999.

(3) Exhibit is incorporated herein by reference to Post-Effective Amendment (“PEA”) No. 1 to the Registration Statement, filed on October 30, 1996.

(4) Exhibit is incorporated herein by reference to PEA No. 2 to the Registration Statement, filed on December 27, 1996.

(5) Exhibit is incorporated herein by reference to PEA No. 8 to the Registration Statement, filed on August 27, 1997.

(6) Exhibit is incorporated herein by reference to PEA No. 10 to the Registration Statement, filed on October 29, 1997.

(7) Exhibit is incorporated herein by reference to PEA No. 12 to the Registration Statement, filed on November 25, 1998.

(8) Exhibit is incorporated herein by reference to PEA No. 16 to the Registration Statement, filed on December 22, 1999.

(9) Exhibit is incorporated herein by reference to PEA No. 17 to the Registration Statement, filed on November 3, 2000.

(10) Exhibit is incorporated herein by reference to PEA No. 18 to the Registration Statement, filed on December 30, 2000.

(11) Exhibit is incorporated herein by reference to PEA No. 19 to the Registration Statement, filed on July 16, 2001.

(12) Exhibit is incorporated herein by reference to PEA 21 to the Registration Statement, filed on October 22, 2001.

(13) Exhibit is incorporated herein by reference to PEA 22 to the Registration Statement, filed on November 1, 2001.

(14) Exhibit is incorporated herein by reference to PEA 24 to the Registration Statement, filed on September 19, 2002.

(15) Exhibit is incorporated herein by reference to PEA 26 to the Registration Statement, filed on December 30, 2002.

(16) Exhibit is incorporated herein by reference to PEA 27 to the Registration Statement, filed on December 30, 2003.

(17) Exhibit is incorporated herein by reference to PEA 28 to the Registration Statement, filed on December 29, 2004.

(18) Filed herein.

Item 24. Persons Controlled By or Under Common Control with Registrant.

iShares MSCI Index Fund	Name	Percentage of Ownership
Belgium	Salomon Smith Barney Inc.	29.90%
Germany	Goldman, Sachs & Co.	31.14%

Item 25. Indemnification.

Incorporated herein by reference to Post-Effective Amendment No. 7 to the Registration Statement, filed on January 15, 1997.

Item 26. Business and Other Connections of Investment Adviser.

The Fund is advised by Barclays Global Fund Advisors (“BGFA”), a wholly owned subsidiary of Barclays Global Investors, N.A. (“BGI”), 45 Fremont Street, San Francisco, CA 94105. BGFA’s business is that of a registered investment adviser to certain open-end, management investment companies and various other institutional investors.

The directors and officers of BGFA consist primarily of persons who during the past two years have been active in the investment management business. Each of the directors and executive officers of BGFA will also have substantial responsibilities as directors and/or officers of BGI. To the knowledge of the Registrant, except as set forth below, none of the directors or executive officers of BGFA is or has been at any time during the past two fiscal years engaged in any other business, profession, vocation or employment of a substantial nature.

Name and Position	Principal Business(es) During the Last Two Fiscal Years
Blake Grossman Chairman	Director and Chairman of the Board of Directors of BGFA and Chief Executive Officer and Director of BGI 45 Fremont Street, San Francisco, CA 94105
Frank Ryan Officer	Chief Financial Officer of BGFA and Chief Financial Officer and Cashier of BGI 45 Fremont Street, San Francisco, CA 94105
Richard Ricci Director	Director and Chief Operating Officer of BGFA and BGI 45 Fremont Street, San Francisco, CA 94105

Item 27. Principal Underwriters

(a) Furnish the name of each investment company (other than the Registrant) for which each principal underwriter currently distributing the securities of the Registrant also acts as a principal underwriter, distributor or investment adviser.

Registrant’s distributor, SEI Investments Distribution Co. (the “Distributor”), acts as distributor for:

SEI Daily Income Trust	July 15, 1982
SEI Liquid Asset Trust	November 29, 1982
SEI Tax Exempt Trust	December 3, 1982
SEI Index Funds	July 10, 1985

SEI Institutional Managed Trust	January 22, 1987
SEI Institutional International Trust	August 30, 1988
The Advisors’ Inner Circle Fund	November 14, 1991
The Advisors’ Inner Circle Fund II	January 28, 1993
Bishop Street Funds	January 27, 1995
SEI Asset Allocation Trust	April 1, 1996
SEI Institutional Investments Trust	June 14, 1996
HighMark Funds	February 15, 1997
Oak Associates Funds	February 27, 1998
The Nevis Fund, Inc.	June 29, 1998
CNI Charter Funds	April 1, 1999
iShares Inc.	January 28, 2000
iShares Trust	April 25, 2000
JohnsonFamily Funds, Inc.	November 1, 2000
Causeway Capital Management Trust	September 20, 2001
The Japan Fund, Inc.	October 7, 2002
Barclays Global Investors Funds	March 31, 2003
The Arbitrage Funds	May 17, 2005

The Distributor provides numerous financial services to investment managers, pension plan sponsors, and bank trust departments. These services include portfolio evaluation, performance measurement and consulting services (“Funds Evaluation”) and automated execution, clearing and settlement of securities transactions (“MarketLink”).

(b) Furnish the Information required by the following table with respect to each director, officer or partner of each principal underwriter named in the answer to Item 20 of Part B. Unless otherwise noted, the business address of each director or officer is Oaks, PA 19456.

Name	Position and Office with Underwriter	Positions and Offices with Registrant
William M. Doran	Director	—
Carl A. Guarino	Director	—
Edward D. Loughlin	Director	—
Wayne M. Withrow	Director	—
Kevin Barr	President & Chief Executive Officer	—
Maxine Chou	Chief Financial Officer & Treasurer	—
Mark Greco	Chief Operations Officer	—
John Munch	General Counsel & Secretary	—
Karen LaTourette	Chief Compliance Officer, Anti-Money Laundering Officer & Assistant Secretary	—
Mark J. Held	Senior Vice President	—
Lori L. White	Vice President & Assistant Secretary	—
Robert Silvestri	Vice President	—
John Coary	Vice President	—
Michael Farrell	Vice President	—
Joanne Nelson	Vice President	—
Al DelPizzo	Vice President	—

(c) Not applicable.

Item 28. Location of Accounts and Records

(a) The Fund maintains accounts, books and other documents required by Section 31(a) of the Investment Company Act of 1940 and the rules thereunder (collectively, the “Records”) at the offices of Investors Bank & Trust, 200 Clarendon Street, Boston, MA 02116.

(b) BGFA maintains all Records relating to its services as advisor at 45 Fremont Street, San Francisco, CA, 94105.

(c) SEI Investments Distribution Company maintains all Records relating to its services as distributor at 1 Freedom Valley Drive, Oaks, PA 19456.

(d) IBT maintains all Records relating to its services as transfer agent, fund accountant and custodian at 200 Clarendon Street, Boston, MA 02116.

Item 29. Management Services.

Not applicable.

Item 30. Undertakings.

(a) The Company hereby undertakes to call a meeting of the shareholders for the purpose of voting upon the question of removal of any Director when requested in writing to do so by the holders of at least 10% of the Company’s outstanding shares of common stock and, in connection with such meeting to comply with the provisions of Section 16(c) of the 1940 Act relating to shareholder communications.

(b) Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the “Act”) may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, and the Investment Company Act of 1940, as amended, the Registrant certifies that it meets all the requirements for the effectiveness of this Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Post-Effective Amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Francisco and the State of California on the day of December, 2005.

By:
	Lee T. Kranefuss*
	President

Pursuant to the requirements of the Securities Act, this Post-Effective Amendment to the Registration Statement has been signed below by the following persons in the capacity and on the dates indicated.

By:
	Lee T. Kranefuss*
	Director and President
	Date: December 22, 2005
	John B. Carroll*
	Director
	Date: December 22, 2005
	Cecilia H. Herbert*
	Director
	Date: December 22, 2005
	Charles A. Hurty*
	Director
	Date: December 22, 2005
	John E. Kerrigan*
	Trustee
	Date: December 22, 2005
	/s/ Michael Latham
	Michael Latham
	Secretary, Treasurer and Principal
	Financial Officer
	Date: December 22, 2005

	Richard K. Lyons*
	Director
	Date: December 22, 2005
	John E. Martinez*
	Director
	Date: December 22, 2005
	George G. C. Parker*
	Director
	Date: December 22, 2005
	W. Allen Reed*
	Director
	Date: December 22, 2005
*By:	/s/ Michael Latham
	Michael Latham
	Attorney in fact
	Date: December 22, 2005

Exhibit Index

(b.3)	Registrant’s Amended and Restated By-Laws dated April 22, 2005.
(d.1)	Form of Advisory Agreement between Registrant and Barclays Global Fund Advisors dated December 19, 2001.
(h.15)	Securities Lending Agency Agreement between Registrant and Barclay’s Global Investors.
(i)	Legal Opinion and Consent of Counsel.
(j)	Consent of PricewaterhouseCoopers LLC.
(p.1)	Code of Ethics of the Registrant.
(p.2)	Code of Ethics of Barclays Global Fund Advisors.
(q.5)	Power of Attorney for Cecilia H. Herbert dated November 15, 2005.
(q.6)	Power of Attorney for Charles A. Hurty dated November 15, 2005.
(q.7)	Power of Attorney for John. E. Kerrigan dated November 15, 2005.

EX-99.(B.3)

Exhibit 99.(b.3)

AMENDED AND RESTATED

BYLAWS OF iSHARES, INC.

ARTICLE I

Fiscal Year and Offices

Section 1. Fiscal Year. Unless otherwise provided by resolution of the Board of Directors the fiscal year of iShares, Inc. (the “Corporation”) shall begin on November 1 and end on the last day of October.

Section 2. Registered Office. The registered office of the Corporation in Maryland shall be located at 32 South Street, Baltimore, Maryland 21202, and the name and address of its Resident Agent is The Corporation Trust Incorporated, 32 South Street, Baltimore, Maryland 21202.

Section 3. Other Offices. The Corporation shall have additional places of business, either within or outside the State of Maryland as the Board of Directors may from time to time designate.

ARTICLE II

Meetings of Stockholders

Section 1. Place of Meeting. Meetings of the Stockholders for the election of Directors shall be held in such place as shall be fixed by resolution of the Board of Directors and stated in the notice of the Meeting.

Section 2. Annual Meetings. Annual Meetings of Stockholders shall be held at such time and on such dates as may be fixed by the Board of Directors by resolution; provided, that Annual Meetings of Stockholders will not be held if none of the following is required to be acted on by Stockholders under the Investment Company Act of 1940:

(a) election of directors,

(b) approval of the investment advisory agreement;

(c) ratification of selection of independent accountants; and

(d) approval of a distribution agreement.

Section 3. Special Meetings. Special Meetings of the Stockholders may be called at any time by the Chairman of the Board or the President, or by a majority of the Board of Directors, and shall be called by the Chairman of the Board, President or Secretary upon written request of the holders of shares entitled to cast not less than twenty-five percent of all the votes entitled to be cast at such meeting provided that (a) such request shall state the purposes of such meeting and the matters proposed to be acted on, and (b) the Stockholders requesting such meeting shall have paid to the Corporation the reasonably estimated cost of preparing and mailing the notice thereof, which the

Secretary shall determine and specify to such Stockholders. No Special Meeting need be called upon the request of holders of common stock entitled to cast less than a majority of all votes entitled to be cast at such meeting to consider any matter which is substantially the same as a matter voted on at any meeting of the Stockholders held during the preceding twelve months.

Section 4. Notice. Not less than ten nor more than ninety days before the date of every Annual or Special Stockholders’ Meeting, the Secretary shall cause to be mailed to each Stockholder entitled to vote at such meeting at his (her) address (as it appears on the records of the Corporation at the time of mailing) written notice stating the time and place of the meeting and, in the case of a Special Meeting of Stockholders, shall be limited to the purposes stated in the notice. Notice of adjournment of a Stockholders’ meeting to another time or place need not be given, if such time and place are announced at the meeting.

Section 5. Record Date for Meetings. Subject to the provisions of Maryland law, the Board of Directors may fix in advance a date not more than ninety days, nor less than ten days, prior to the date of any Annual or Special Meeting of the Stockholders as a record date for the determination of the Stockholders entitled to receive notice of, and to vote at any meeting and any adjournment thereof; and in such case such Stockholders and only such Stockholders as shall be Stockholders of record on the date so fixed shall be entitled to receive notice of and to vote at such meeting and any adjournment thereof as the case may be, notwithstanding any transfer of any stock on the books of the Corporation after any such record date fixed as aforesaid.

Section 6. Quorum. At any meeting of Stockholders, the presence in person or by proxy of the holders of one-third of all the votes entitled to be cast without regard to series at the meeting shall constitute a quorum for the transaction of business at the meeting, except that where any provision of law or the Articles of Incorporation require that the holders of any class or series of shares shall vote as a class or series, then one-third of the aggregate number of shares of such class or series, as the case may be, at the time outstanding shall be necessary to constitute a quorum for the transaction of such business. If, however, such quorum shall not be present or represented at any meeting of the Stockholders, the holders of a majority of the stock present or in person or by proxy shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented to a date not more than 120 days after the original record date. At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally notified.

Section 7. Voting. Each Stockholder shall have one vote for each full share and a fractional vote for each fractional share of stock having voting power held by such Stockholder on the record date set pursuant to Section 5 on each matter submitted to a vote at a meeting of Stockholders. Such vote may be made in person or by proxy. At all meetings of the Stockholders, a quorum being present, all matters shall be decided by majority vote of the shares of stock entitled to vote held by Stockholders present in

2

person or by proxy, unless the question is one which by express provision of the laws of the State of Maryland, the Investment Company Act of 1940, as from time to time amended, or the Articles of Incorporation. a different vote is required, in which case such express provision shall control the decision of such question. At all meetings of Stockholders, unless the voting is conducted by inspectors, all questions relating to the qualification of voters and the validity of proxies and the acceptance or rejection of votes shall be decided by the Chairman of the meeting.

Section 8. Voting - Proxies. Shareholders may vote by proxy and the form of such proxy may be prescribed from time to time by the Directors. Proxies may be collected by any means that are reasonably calculated to provide a fair and accurate tabulation of such proxies, including but not limited to, through the Internet, through facsimile transmission or over the telephone. No proxy shall be voted on after eleven months from its date unless it provides for a longer period.

Section 9. Inspectors. At any election of Directors, the Board of Directors prior thereto may, or, if they have not so acted, the Chairman of the meeting may, appoint one or more inspectors of election who shall first subscribe an oath of affirmation to execute faithfully the duties of inspectors at such election with strict impartiality and according to the best of their ability, and shall after the election make a certificate of the result of the vote taken.

Section 10. Stock Ledger and List of Stockholders. It shall be the duty of the Secretary or Assistant Secretary of the Corporation to cause an original or duplicate stock ledger to be maintained at the office of the Corporation’s transfer agent. Such stock ledger may be in written form or any other form capable of being converted into written form within a reasonable time for visual inspection.

Section 11. Action Without Meeting. Any action to be taken by Stockholders may be taken without a meeting if (a) all Stockholders entitled to vote on the matter consent to the action in writing, and (b) all Stockholders entitled to notice of the meeting but not entitled to vote at it sign a written waiver of any right to dissent and (c) the written consents are filed with the records of the meetings of Stockholders. Such consent shall be treated for all purposes as a vote at a meeting.

ARTICLE III

Directors

Section 1. General Powers. The business of the Corporation shall be under the direction of its Board of Directors, which may exercise all powers of the Corporation, except such as are by statute, or the Articles of Incorporation, or by these ByLaws conferred upon or reserved to the Stockholders.

Section 2. Number and Term of Office. The number of Directors which shall constitute the whole Board shall be determined from time to time by the Board of

3

Directors, but shall not be fewer than three nor more than fifteen; provided that the number of Directors shall not be fewer than one for so long as there is only one or fewer Stockholders. Each Director elected shall hold office until his successor is elected and qualified. Directors need not be Stockholders.

Section 3. Election. Initially the Directors shall be those persons named as such in the Articles of Incorporation. The Directors shall be elected by the vote of a majority of the shares present in person or by proxy at a meeting of the Stockholders called for such purpose, except that any vacancy in the Board of Directors may be filled by a majority vote of the Board of Directors, although less than a quorum, except that a newly-created directorship may be filled only by a vote of the entire Board of Directors.

Section 4. Chairman of the Board. The Chairman of the Board, if one shall be chosen, shall perform and execute such executive duties and administrative powers as the Board of Directors shall from time to time prescribe. The Chairman of the Board shall not be considered an officer of the Corporation.

Section 5. Place of Meeting. Meetings of the Board of Directors, regular or special, may be held at any place in or out of the State of Maryland as the Board may from time to time determine.

Section 6. Quorum. At all meetings of the Board of Directors one-third of the entire Board of Directors shall constitute a quorum for the transaction of business provided that in no case may a quorum be less than two persons. The action of a majority of the Directors present at any meeting at which a quorum is present shall be the action of the Board of Directors unless the concurrence of a greater proportion is required for such action by the laws of Maryland, the Investment Company Act of 1940, these ByLaws or the Articles of Incorporation. If a quorum shall not be present at any meeting of Directors, the Directors present thereat may by a majority vote adjourn the meeting from time to time without notice other than announcement at the meeting, until a quorum shall be present.

Section 7. Regular Meetings. Regular meetings of the Board of Directors may be held without additional notice at such time and place as shall from time to time be determined by the Board of Directors provided that notice of any change in the time or place of such meetings shall be sent promptly to each Director not present at the meeting at which such change was made in the manner provided for notice of special meetings.

Section 8. Special Meetings. Special Meetings of the Board of Directors may be called by the Chairman of the Board or the President on one day’s notice to each Director. Special Meetings shall be called by the Chairman of the Board, President or Secretary in like manner and on like notice on the written request of two Directors.

Section 9. Telephone Meetings. Members of the Board of Directors or a committee of the Board of Directors may participate in a meeting by means of a conference telephone or similar communications equipment if all persons participating in

4

the meeting can hear each other at the same time. Participation in a meeting by these means constitutes, subject to the provisions of the Investment Company Act of 1940, presence in person at the meeting.

Section 10. Informal Actions. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if a written consent to such action is signed by all members of the Board or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board or committee.

Section 11. Committees. The Board of Directors may by resolution passed by a majority of the entire Board appoint from among its members an Executive Committee and other committees composed of two or more Directors, and may delegate to such committees, in the intervals between meetings of the Board of Directors, any or all of the powers of the Board of Directors in the management of the business and affairs of the Corporation.

Section 12. Action of Committees. In the absence of an appropriate resolution of the Board of Directors each committee may adopt such rules and regulations governing its proceedings, quorum and manner of acting as it shall deem proper and desirable, provided that the quorum shall not be less than two Directors. The committees shall keep minutes of their proceedings and shall report the same to the Board of Directors at the meeting next succeeding, and any action by the committee shall be subject to revision and alteration by the Board of Directors, provided that no rights of third persons shall be affected by any such revision or alteration. In the absence of any member of such committee the members thereof present at any meeting, whether or not they constitute a quorum, may appoint a member of the Board of Directors to act in the place of such absent member.

Section 13. Compensation. Any Director, whether or not he is a salaried officer or employee of the Corporation, may be compensated for his services as Director or as a member of a committee of Directors, or as Chairman of the Board or chairman of a committee by fixed periodic payments or by fees for attendance at meetings or by both, and in addition may be reimbursed for transportation and other expenses, and in such manner and amounts as the Board of Directors may from time to time determine.

ARTICLE IV

Notices

Section 1. Form. Notices to Stockholders shall be in writing and delivered personally or mailed to the Stockholders at their addresses appearing on the books of the Corporation. Notices to Directors shall be oral or by telephone or telegram or in writing delivered personally or mailed to the Directors at their addresses appearing on the books of the Corporation. Notice by mail shall be deemed to be given at the time when the same

5

shall be mailed. Subject to the provisions of the Investment Company Act of 1940, notice to Directors need not state the purpose of a Regular or Special Meeting.

Section 2. Waiver. Whenever any notice of the time, place or purpose of any meeting of Stockholders, Directors or a committee is required to be given under the provisions of Maryland law or under the provisions of the Articles of Incorporation or these ByLaws, a waiver thereof in writing, signed by the person or persons entitled to such notice and filed with the records of the meeting, whether before or after the holding thereof or actual attendance at the meeting of Stockholders in person or by proxy, or at the meeting of Directors of committee in person, shall be deemed equivalent to the giving of such notice to such persons.

ARTICLE V

Officers

Section 1. Executive Officers. The officers of the Corporation shall be chosen by the Board of Directors and shall include a President, a Secretary and a Treasurer. The Board of Directors may, from time to time, elect or appoint a Controller, one or more Vice Presidents, Assistant Secretaries and Assistant Treasurers. The same person may hold two or more offices, except that no person shall be both President and Vice-President and no officer shall execute, acknowledge or verify any investment in more than one capacity, if such instrument is required by law, the Articles of Incorporation or these Bylaws to be executed, acknowledged or verified by two or more officers.

Section 2. Election. The Board of Directors shall choose a President, a Secretary and a Treasurer at its first meeting or by unanimous consent pursuant to Section 2-408(c) of the Maryland General Corporation Law.

Section 3. Other Officers. The Board of Directors from time to time may appoint such other officers and agents as it shall deem advisable, who shall hold their offices for such terms and shall exercise powers and perform such duties as shall be determined from time to time by the Board. The Board of Directors from time to time may delegate to one or more officers or agents the power to appoint any such subordinate officers or agents and to prescribe their respective rights, terms of office, authorities and duties.

Section 4. Compensation. The salaries or other compensation of all officers and agents of the Corporation shall be fixed by the Board of Directors, except that the Board of Directors may delegate to any person or group of persons the power to fix the salary or other compensation of any subordinate officers or agents appointed pursuant to Section 3 of this Article V.

Section 5. Tenure. The officers of the Corporation shall serve for one year and until their successors are chosen and qualify. Any officer or agent may be removed by the affirmative vote of a majority of the Board of Directors whenever, in its judgment, the best interests of the Corporation will be served thereby. In addition, any officer or agent

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appointed pursuant to Section 3 may be removed, either with or without cause, by any officer upon whom such power of removal shall have been conferred by the Board of Directors. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise shall be filled by the Board of Directors, unless pursuant to Section 3 the power of appointment has been conferred by the Board of Directors on any other officer.

Section 6. President. The President shall be the Chief Executive Officer of the Corporation; shall see that all orders and resolutions of the Board are carried into effect. The President shall also be the chief administrative officer of the Corporation and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.

Section 7. Vice-President. The Vice-Presidents, in order of their seniority, shall, in the absence or disability of the President, perform the duties and exercise the powers of the President and shall perform such other duties as the Board of Directors or the Chief Executive Officer may from time to time prescribe.

Section 8. Secretary. The Secretary shall attend all meetings of the Board of Directors and all meetings of the Stockholders and record all the proceedings thereof and shall perform like duties for any committee when required. He (she) shall give, or cause to be given, notice of meetings of the Stockholders and of the Board of Directors, shall have charge of the records of the Corporation, including the stock books, and shall perform such other duties as may be prescribed by the Board of Directors or Chief Executive Officer, under whose supervision he (she) shall be. He (she) shall keep in safe custody the seal of the Corporation and, when authorized by the Board of Directors, shall affix and attest the same to any instrument requiring it. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest to the affixing by his (her) signature.

Section 9. Assistant Secretaries. The Assistant Secretaries in order of their seniority, shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary and shall perform such other duties as the Board of Directors shall prescribe.

Section 10. Treasurer. The Treasurer, unless another officer has been so designated, shall be e Chief Financial Officer of the Corporation. He (she) shall have general charge of the finances and books of account of the Corporation. Except as otherwise provided by the Board of Directors, he (she) shall have general supervision of the funds and property of the Corporation and of the funds and property of the Corporation and of the performance by the custodian of its duties with respect thereto. He (she) shall render to the Board of Directors, whenever directed by the Board, an account of the financial condition of the Corporation and of all his (her) transactions as Treasurer, and as soon as possible after the close of each financial year he (she) shall make and submit to the Board of Directors a like report for such financial year. He (she) shall cause to be prepared annually a full and correct statement of the affairs of the Corporation,

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including a balance sheet and a financial statement of operations for the preceding fiscal year, which shall be submitted at the Annual Meeting of Stockholders and filed within twenty days thereafter at the principal office of the Corporation. He (she) shall perform all the acts incidental to the office of Treasurer, subject to the control of the Board of Directors.

Section 11. Assistant Treasurer. The Assistant Treasurers, in the order of their seniority, shall in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer and shall perform such other duties as the Board of Directors may from time to time presume.

Section 12. Surety Bonds. The Board of Directors may require any officer or agent of the Corporation to execute a bond (including, without limitation, any bond required by the Investment Company Act of 1940, as amended, and the rules and regulations of the Securities and Exchange Commission) to the Corporation in such sum and with such surety or sureties as the Board of Directors may determine, conditioned upon the faithful performance of his (her) duties of the Corporation, including responsibility for negligence and for the accounting of any Corporation’s property, funds or securities that may come into his (her) hands.

ARTICLE VI

Insurance

Subject to the provisions of the Investment Company Act of 1940, the Corporation, directly, through third parties or through affiliates of the Corporation, may purchase, or provide through a trust fund, letter of credit or surety bond insurance on behalf of any person who is or was a Director, officer, employee or agent of the Corporation, or who, while a Director, officer, employee or agent of the Corporation, is or was serving at the request of the Corporation as a Director, officer, employee, partner, trustee or agent of another foreign or domestic corporation, partnership, joint venture, trust or other enterprise against any liability asserted against and incurred by such person in any such capacity or arising out of such person’s position, whether or not the Corporation would have the power to indemnify such person against such liability.

ARTICLE VIII

Stock

Section 1. Certificates. Stockholders are not entitled to receive certificates evidencing their share ownership unless the Directors shall, by resolution, otherwise determine.

Section 2. Transfer of Capital Stock. Transfers of shares of the stock of the Corporation shall be made on the books of the Corporation by the holder of record thereof (in person or by his attorney thereunto duly authorized by a power of attorney

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duly executed in writing and filed with the Secretary of the Corporation) (i) if a certificate or certificates have been issued, upon the surrender of the certificate or certificates, properly endorsed or accompanied by proper instruments of transfer, representing such shares, or (ii) as otherwise prescribed by the Board of Directors. Every certificate exchanged, surrendered for redemption or otherwise returned to the Corporation shall be marked “Canceled” with the date of cancellation.

Section 3. Registered Stockholders. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such shares or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the General Laws of the State of Maryland.

Section 4. Transfer Agents and Registrars. The Board of Directors may, from time to time, appoint or remove transfer agents and/or registrars of transfers of shares of stock of the Corporation, and it may appoint the same person as both transfer agent and registrar. Upon any such appointment being made all certificates representing shares of stock thereafter issued shall be countersigned by one of such transfer agents or by one of such registrars of transfers or by both and shall not be valid unless so countersigned. If the same person shall be both transfer agent and registrar, only one countersignature by such person shall be required.

Section 5. Stock Ledger. The Corporation shall maintain an original stock ledger containing the names and addresses of all Stockholders and the number and class or series of shares held by each Stockholder. Such stock ledger may be in written form or any other form capable of being converted into written form within a reasonable time for visual inspection.

ARTICLE VIII

General Provisions

Section 1. Custodianship.

(a) The Corporation shall place and at all times maintain in the custody of a custodian (including any subcustodian for the custodian) all funds, securities and similar investments owned by the Corporation. Subject to the approval of the Board of Directors the custodian may enter into arrangements with securities depositories, as long as such arrangements comply with the provisions of the Investment Company Act of 1940 and the rules and regulations promulgated thereunder.

Section 2. Seal. The corporate seal shall have inscribed thereon the name of the Corporation and the year of its organization. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

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Section 3. Execution of Instruments. All deeds, documents, transfers, contracts, agreements and other instruments requiring execution by the Corporation shall be signed by any officer thereof.

ARTICLE IX

Amendments

The Board of Directors shall have the power to make, alter and repeal the bylaws of the Corporation.

Approved by the Board of Directors of iShares, Inc. on April 22, 2005

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EX-99.(D.1)

Exhibit 99.(d.1)

[FORM OF]

INVESTMENT ADVISORY AGREEMENT

AGREEMENT made as of the          day of                          between Barclays Global Fund Advisors, a corporation organized under the laws of the State of California (the “Advisor”), and iShares, Inc., a Maryland corporation (the “Company”).

WHEREAS, the Advisor is engaged principally in the business of rendering investment management services and is registered as an investment advisor under the Investment Advisers Act of 1940, as amended; and

WHEREAS, the Company engages in the business of an open-end management investment company and is registered as such under the Investment Company Act of 1940, as amended (the “1940 Act”); and

WHEREAS, the Company is authorized to issue shares of beneficial interest in separate series with each such series representing interests in a separate portfolio of securities and other assets; and

WHEREAS, the Company intends to offer shares representing interests in each of the separate portfolios identified on Schedule A hereto (each, a “Fund”); and

WHEREAS, the Company desires to appoint the Advisor to serve as the investment advisor with respect to each Fund; and

WHEREAS, the Company may, from time to time, offer shares representing interests in one or more additional portfolios (each, an “Additional Fund”); and

WHEREAS, the Company may desire to appoint the Advisor as the investment advisor with respect to one or more Additional Fund;

NOW THEREFORE, the parties hereto hereby agree as follows:

1. APPOINTMENT OF ADVISOR

a. Fund. The Company hereby appoints the Advisor to act as investment advisor for the Fund listed on Schedule A for the period and on the terms herein set forth. The Advisor accepts such appointment and agrees to render the services herein set forth, for the compensation herein provided.

b. Additional Fund. In the event the Company desires to retain the Advisor to render investment advisory services hereunder with respect to any Additional Fund, it shall so notify the Advisor in writing, indicating the advisory fee to be payable with respect to the Additional Fund. If the Advisor is willing to render such services for such fee and on the terms provided for herein, it shall so notify the Company in writing, whereupon such Additional Fund shall become a Fund hereunder.

2. DUTIES OF THE ADVISOR

The Advisor shall be responsible for the general management of the Company’s affairs. The Advisor, at its own expense (subject to the overall supervision and review of the Board of Directors of the Company), shall (1) furnish continuously an investment program for each Fund in compliance with that Fund’s investment objective and policies, as set forth in the then-current prospectus and statement of additional information for such Fund contained in the Company’s Registration Statement on Form N-IA, as such prospectus and statement of additional information is amended or supplemented from time to time, (ii) determine what investments shall be purchased, held, sold or exchanged for each Fund and what portion, if any, of the assets of each Fund shall be held uninvested, (iii) make changes on behalf of the Company in the investments for each Fund and (iv) provide the Company with records concerning the Advisor’s activities that the Company is required to maintain and render reports to the Company’s officers and Board of

Directors concerning the Advisor’s discharge of the foregoing responsibilities. The Advisor shall furnish to the Company all office facilities, equipment, services and executive and administrative personnel necessary for managing the investment program of the Company for each Fund.

3. ALLOCATION OF EXPENSES

Subject to Section 4 below, the Company shall be responsible for and pay all expenses for Company operations and activities.

4. ADVISORY FEE

For the services to be provided by the Advisor hereunder with respect to each Fund, the Company shall pay to the Advisor an annual gross investment advisory fee equal to the amount set forth on Schedule A attached hereto. The Advisor agrees to pay all expenses incurred by the Company except for (i) expenses of the Fund incurred in connection with the execution of portfolio securities transactions on behalf of such Fund, (ii) expenses incurred in connection with any distribution plan adopted by the Company in compliance with Rule 12b-l under the 1940 Act, (iii) litigation expenses, (iv) taxes (including, but not limited to, income, excise, transfer and withholding taxes), (v) any cost or expense that a majority of the Directors of the Company who are not “interested persons” (as defined in the 1940 Act) deems to be an extraordinary expense and (vi) the advisory fee payable to the Advisor hereunder.

Schedule A shall be amended from time to time to reflect the addition and/or termination of any Fund as a Fund hereunder and to reflect any change in the advisory fees payable with respect to any Fund duly approved in accordance with Section 7(b) hereunder. All fees payable hereunder shall be accrued daily and paid as soon as practicable after the last day of each calendar quarter.

In the case of commencement or termination of this Agreement with respect to any Fund during any calendar quarter, the fee with respect to such Fund for that quarter shall be reduced proportionately based upon the number of calendar days during which it is in effect, and the fee shall be computed upon the average daily net assets of such Fund for the days during which it is in effect.

5. PORTFOLIO TRANSACTIONS

In connection with the management of the investment and reinvestment of the assets of the Company, the Advisor, acting by its own officers, directors or employees, is authorized to select the brokers or dealers that will execute purchase and sale transactions for the Company. In executing portfolio transactions and selecting brokers or dealers, if any, the Advisor will use its best efforts to seek on behalf of a Fund the best overall terms available. In assessing the best overall terms available for any transaction, the Advisor shall consider all factors it deems relevant, including the breadth of the market in and the price of the security, the financial condition and execution capability of the broker or dealer, and the reasonableness of the commission, if any (for the specific transaction and on a continuing basis). In evaluating the best overall terms available, and in selecting the broker or dealer, if any, to execute a particular transaction, the Advisor may also consider the brokerage and research services (as those terms are defined in Section 28(e) of the 1934 Act) provided to any Fund of the Company. The Advisor may pay to a broker or dealer who provides such brokerage and research services a commission for executing a portfolio transaction which is in excess of the amount of commission another broker or dealer would have charged for effecting that transaction if, but only if, the Advisor determines in good faith that such commission was reasonable in relation to the value of the brokerage and research services provided. The Company acknowledges that any such research may be useful to the Advisor in connection with other accounts managed by it.

6. LIABILITY OF ADVISOR

Neither the Advisor nor its officers, directors, employees, agents or controlling persons or assigns shall be liable for any error of judgment or mistake of law or for any loss suffered by the Company or its shareholders in connection with the matters to which this Agreement relates;

provided, however, that no provision of this Agreement shall be deemed to protect the Advisor against any liability to the Company or its shareholders to which it might otherwise be subject by reason of any willful misfeasance, bad faith or gross negligence in the performance of its duties or the reckless disregard of its obligations and duties under this Agreement.

7. DURATION AND TERMINATION OF THIS AGREEMENT

a. Duration. This Agreement shall become effective with respect to each Fund on the date hereof and, with respect to any Additional Fund, on the date specified in the written notice received by the Company from the Advisor in accordance with paragraph 1(b) hereof that the Advisor is willing to serve as Advisor with respect to such Fund. Unless terminated as herein provided, this Agreement shall remain in full force and effect for two years from the date hereof with respect to each Fund and, with respect to each Additional Fund, for two years from the date on which such Fund becomes a fund hereunder. Subsequent to such initial periods of effectiveness, this Agreement shall continue in full force and effect for periods of one year thereafter with respect to each Fund so long as such continuance with respect to such Fund is approved at least annually (i) by either the Directors of the Company or by vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of such Fund, and (ii), in either event, by the vote of a majority of the Directors of the Company who are not parties to this Agreement or “interested persons” (as defined in the 1940 Act) of any such party, cast in person at a meeting called for the purpose of voting on such approval.

b. Amendment. Any amendment to this Agreement shall become effective with respect to a Fund upon approval of the Advisor and of a majority of Directors who are not parties to this Agreement or “interested persons” (as defined in the 1940 Act) of any such party, cast in person at a meeting called for the purpose of voting such approval and of a majority of the outstanding voting securities (as defined in the 1940 Act) of that Fund.

c. Termination. This Agreement may be terminated with respect to any Fund at any time, without payment of any penalty, by vote of the Directors or by vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of that Fund, or by the Advisor, in each case on sixty (60) days’ prior written notice to the other party; provided, that a shorter notice period shall be permitted for a Fund in the event its shares are no longer listed on a national securities exchange.

d. Automatic Termination. This Agreement shall automatically and immediately terminate in the event of its “assignment” (as defined in the 1940 Act).

e. Approval, Amendment or Termination by a Fund. Any approval, amendment or termination of this Agreement by the holders of a “majority of the outstanding voting securities” (as defined in the 1940 Act) of any Fund shall be effective to continue, amend or terminate this Agreement with respect to any such Fund notwithstanding (i) that such action has not been approved by the holders of a majority of the outstanding voting securities of any other Fund affected thereby, and (ii) that such action has not been approved by the vote of a majority of the outstanding voting securities of the Company, unless such action shall be required by any applicable law or otherwise.

8. SERVICES NOT EXCLUSIVE

The services of the Advisor to the Company hereunder are not to be deemed exclusive, and the Advisor shall be free to render similar services to others so long as its services hereunder are not impaired thereby.

9. MISCELLANEOUS

a. “iShares” Name. The Company shall, at the request of the Advisor, stop all use of the “iShares” name in the event that the Advisor or its affiliates is no longer the Company’s investment advisor.

b. Notice. Any notice under this Agreement shall be in writing, addressed and delivered or mailed, postage prepaid, to the other party at such address as such other party may designate in writing for the receipt of such notices.

c. Severability. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder shall not be thereby affected.

d. Applicable Law. This Agreement shall be construed in accordance with and governed by the laws of New York.

e. Execution by Counterpart. This Agreement may be executed in any number of counterparts, all of which together shall constitute one agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first set forth above.

[SIGNATURE LINES OMITTED]

Schedule A (Effective as of December 21, 2001)

Advisory Fee for the Category I Funds:

0.59% per annum of the aggregate net assets of the Category I Funds less than or equal to $7.0 billion plus 0.54% per annum of the aggregate net assets of the Category I Funds between $7.0 billion and $11.0 billion plus 0.49% per annum of the aggregate net assets of the Category I Funds in excess of $11.0 billion

Category I Funds:

iShares MSCI Australia Index Fund

iShares MSCI Austria Index Fund

iShares MSCI Belgium Index Fund

iShares MSCI Canada Index Fund

iShares MSCI EMU Index Fund

iShares MSCI France Index Fund

iShares MSCI Germany Index Fund

iShares MSCI Hong Kong Index Fund

iShares MSCI Italy Index Fund

iShares MSCI Japan Index Fund

iShares MSCI Malaysia Index Fund

iShares MSCI Mexico Index Fund

iShares MSCI Netherlands Index Fund

iShares MSCI Singapore Index Fund**

iShares MSCI Spain Index Fund

iShares MSCI Sweden Index Fund

iShares MSCI Switzerland Index Fund

iShares MSCI United Kingdom Index Fund

iShares MSCI USA Index Fund*

Advisory Fee for Category II Funds:

0.74% per annum of the aggregate net assets of the Category II Funds less than or equal to $2 billion plus

0.69% per annum of the aggregate net assets of the Category II Funds between $2 billion and $4 billion

plus 0.64% per annum of the aggregate net assets of the Category II Funds greater than $4 billion

Category II Funds:

iShares MSCI Brazil Index Fund

iShares MSCI Greece Index Fund*

iShares MSCI Indonesia Index Fund*

iShares MSCI Portugal Index Fund*

iShares MSCI South Africa Index Fund

iShares MSCI South Korea Index Fund

iShares MSCI Taiwan Index Fund

iShares MSCI Thailand Index Fund*

iShares MSCI Turkey Index Fund*

Advisory Fee for Category III Funds:

0.50% per annum of the aggregate net assets of the Category III Funds

Category III Funds

iShares MSCI Pacific Ex-Japan Index Fund

Advisory Fee for Category IV Funds:

0.75% per annum of the aggregate net assets of the Category IV Funds

Category IV Funds

iShares MSCI Emerging Markets Index Fund

* Fund has not yet been launched.

** Agreement was approved for iShares MSCI Singapore Index Fund by the Board on April 22, 2005 and by the shareholders of the fund at a special meeting held on August 11, 2005.

Approved by the Board of Directors of iShares, Inc. on June 14, 2005.

EX-99.(H.15)

Exhibit 99.(h.15)

SECURITIES LENDING AGENCY AGREEMENT

BETWEEN

BARCLAYS GLOBAL INVESTORS, N.A.

AND

iSHARES, INC. AND iSHARES TRUST

SECURITIES LENDING AGENCY AGREEMENT

AGREEMENT, dated as of February 28, 2003, between iShares, Inc., a Maryland Corporation, and iShares Trust, a Delaware statutory trust (both singly and together, the “Client”), acting on behalf of the funds listed on Schedule A hereto and any future series or portfolio of the Client (each fund, a “Lender”), and Barclays Global Investors, N.A., a national banking association (“BGT”).

WHEREAS, the Client is registered as an open-end investment company under the Investment Company Act of 1940, as amended (the “1940 Act”);

WHEREAS, the Client desires to appoint BGI as its agent for the purpose of lending securities in the Account (as defined below) as more fully set forth below; and

WHEREAS, BGI has agreed to act as the Client’s agent for such purpose pursuant to the terms hereof;

NOW, THEREFORE, for and in consideration of the mutual promises set forth herein, the parties hereto agree as follows:

1. Definitions.

Whenever used in this Agreement, unless the context otherwise requires, the following words shall have the meanings set forth below. Capitalized terms used but not defined herein shall have the meaning assigned to them in the applicable Securities Lending Agreement.

1.1 “Account” shall mean the custodial account or accounts established and maintained by the Custodian on behalf of each Lender for the safekeeping of securities and monies of the Lender from time to time.

1.2 “Approved Investment” shall mean any type of investment permitted under the Joint Account Procedures attached as Schedule I hereto (the “Procedures”) (which may be amended from time to time to add additional Approved Investments with the consent of BGI and the Client, or to delete any Approved Investment at the written direction of the Client).

1.3 “Authorized Person” shall be any officer of the Client and any other person, whether or not any such person is an officer or employee of the Client, duly authorized by corporate resolutions of the Board of Trustees of the Client to give Oral and/or Written Instructions on behalf of the Client, such persons to be designated in a Certificate which contains a specimen signature of such person.

1.4 “Book-Entry System” shall mean the Federal Reserve/Treasury book-entry system for receiving and delivering Government Securities (as defined herein), its successors and nominees.

1.5 “Borrower” shall mean any entity named on Schedule II hereto (as such Schedule may be amended form time to time with the consent of BGI and the Client, or to delete any Borrower at the direction of the Client). Each Borrower that is an “affiliated person,” as defined in the 1940 Act, of any Lender, or an affiliated person of such affiliated person (each, an “Affiliated Borrower”) shall be identified as such on Schedule II hereto. BGI shall only lend securities on behalf of the Lenders to such Affiliated Borrowers in accordance with Section 4.12 of this Agreement.

BGI shall be responsible for monitoring whether a Borrower that was not previously designated as an Affiliated Borrower becomes an Affiliated Borrower and shall promptly notify the Client of such Affiliated Borrower and take appropriate action to either prevent the applicable Lenders from engaging in a Loan with the Affiliated Borrower, or continue to lend securities to the Affiliated Borrower in accordance with Section 4.12 of this Agreement.

1.6 “Cash Collateral” shall mean either fed funds or New York Clearing House funds, as applicable for a particular loan of Securities.

1.7 “Certificate” shall mean any notice, instruction, schedule or other instrument in writing, authorized or required by this Agreement to be given to BGI, which is actually received by BGI and signed on behalf of the Client by an Authorized Person or a person reasonably believed by BGI to be an Authorized Person.

1.8 “Collateral” shall mean Cash Collateral unless BGI and the Client have agreed in writing to additional collateral, including Government Securities and Letters of Credit.

1.9 “Collateral Account” shall mean a segregated account or accounts established and maintained by the Custodian for the purpose of holding Collateral and Approved Investments, and interest, dividends and other payments and distributions received with respect to Collateral and Approved Investments (“Distributions”). A Collateral Account may include a joint account as defined in the Procedures.

1.10 “Custodian” shall mean Investors Bank & Trust Company, a trust company organized and existing under the laws of the Commonwealth of Massachusetts.

1.11 “Depository” shall mean the Depository Trust Company, Participant’s Trust Company, Euroclear, and any other securities depository of clearing agency (and their respective successors and nominees) authorized under applicable law or regulation to act as a securities depository or clearing agency, including any foreign securities depository approved by the Client.

1.12 “Government Security” shall mean book-entry Treasury securities (as defined in Subpart 0 of Treasury Department Circular No. 300, 31 C.F.R. 306) and any other securities issued or fully guaranteed by the United States government or any agency or instrumentality of the United States government.

1.13 “Earnings Account” shall mean a segregated account established and maintained by the Custodian for the purpose of receiving any Securities Loan Fee paid by Borrowers in connection with securities loans hereunder.

1.14 “Letter of Credit” shall mean a clean, unconditional and irrevocable letter of credit in favor of BOI as agent for the Lender issued by a bank from a list as may be amended by the parties from time to time, or to delete any bank at the written direction of the Client.

1.15 “Oral Instructions” shall mean verbal instructions actually received by BGI from an Authorized Person or from a person reasonably believed by BOI to be an Authorized Person.

1.16 “Rebate” shall mean the amount payable by the Lender to a Borrower (as set forth in a Receipt) in connection with Securities loans at any time collateralized by Cash Collateral.

1.17 “Receipt” shall mean an advice or confirmation setting forth the terms of a particular loan of Securities hereunder, including, without limitation, the Collateral with respect to such loan.

1.18 “Securities Lending Agreement” shall mean with respect to any Borrower, the agreement pursuant to which BGI lends securities on behalf of its customers (including the Lender) to such Borrower as may be amended from time to time. Attached hereto as Exhibit A are the forms of Securities Lending Agreements in effect between BOI and the Borrowers as of the date hereof.

1.19 “Securities Loan Fee” shall mean the amount payable by a Borrower to BGI, as agent for the Lender, pursuant to the applicable Securities Lending Agreement in connection with Securities loans, if any, collateralized by Collateral other than Cash Collateral.

1.20 “Security” shall mean any Government Securities, non-U.S. securities, U.S. common stock and other equity securities, bonds, debentures, corporate debt securities, notes, mortgages or other obligations, and any certificates, warrants or other instruments representing right:; to receive, purchase, or subscribe for the same, or

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evidencing or representing any other rights or interests therein, which are available for lending pursuant to Section 2.2 of this Agreement.

1.21 “Written Instructions” shall mean written communications actually received by BGI from an Authorized Person or from a person reasonably believed by BGI to be an Authorized Person by letter, memorandum, telegram, cable, telex, telecopy facsimile, computer, video (CRT) terminal or other on-line system, or any other method whereby BGI is able to verify with a reasonable degree of certainty the identity of the sender of such communications or the sender is required to provide a password or other identification code.

2. Appointment: Scope of Agency Authority.

2.1 Appointment. The Client hereby appoints BGI as its agent to lend Securities in the Account to Borrowers from time to time as hereinafter set forth, and BGI hereby accepts appointment as such agent and agrees to so act.

2.2 Securities Subject to Lending. Unless the Client provides otherwise in a written list given to BGI, all Securities maintained in the Account shall be available for lending pursuant to this Agreement.

2.3 Securities Lending Agreement. The Lender hereby acknowledges receipt of a form of Securities Lending Agreement for use with respect to each Borrower. BGI is hereby authorized to lend Securities in the Account to Borrowers pursuant to such agreements. BGI shall provide the Client with any proposed material amendments or changes to such agreements prior to their effectiveness. The Client may elect, without penalty, to terminate any Borrower from Schedule II if it opposes the change.

2.4 Loan Opportunities. The Client on behalf of each Lender acknowledges and agrees that BGI shall have the right to decline to make any loans of Securities under any Securities Lending Agreement and to discontinue lending under any Securities Lending Agreement in its sole discretion and without notice to the Client The Client on behalf of each Lender agrees that it shall have no claim against BGI based on, or relating to, loans made for other customers or for BGI’s own account, or loan opportunities refused hereunder, whether or not BOI has made fewer or more loans for any other customer or for BGI’s own account than for the Lender, and whether or not any loan for another customer or for BGI’s own account or the opportunity refused, could have resulted in loans made hereunder.

2.5 Use of Book-Entry System and Depositories. The Client on behalf of each Lender hereby authorizes BGI on a continuous and on-going basis, to deposit in the Book-Entry System and any Depositories all Securities eligible for deposit therein and to utilize the Book-Entry System and Depositories to the extent possible in connection with its receipt and delivery of Securities, Collateral, Approved Investments and monies under this Agreement. Where Securities, Collateral (other than Cash Collateral) and Approved Investments eligible for deposit in the Book-Entry System or a Depository are transferred to the Account, BGI shall identify as belonging to the Lender a quantity of securities in a fungible bulk of securities shown on BGI’s account on the books of the Book-Entry System or the applicable Depository. Securities, Collateral and Approved Investments deposited in the Book-Entry System or a Depository will be commingled in accounts which include assets held by BGI for customers, including but not limited to accounts in which BGI acts in a fiduciary or agency capacity, as well as assets held by or on behalf of other clients or participants of the Book-Entry System or Depository.

3. Representations and Warranties.

3.1 Client’s Representations The Client hereby represents and warrants to BGI, which representations and warranties shall be deemed to be continuing and to be reaffirmed on any day that a Securities loan hereunder is outstanding, that:

(a) This Agreement has been approved by the Board of Trustees of the Client and the Approved Investments have been and will be annually determined to be in the best interests of shareholders of each Lender; this Agreement is, and each Securities loan and Approved Investment will be, legally and validly entered into by the Client on behalf of each Lender, does not, and will not, violate any statute, regulation, rule, order or, judgment binding on the Lender, or any provision of the Client’s charter or by-laws, or any agreement binding on the Client or

3

affecting its property, and is enforceable against the Client and each Lender in accordance with its terms, except as may be limited by bankruptcy, insolvency or similar laws, or by equitable principles relating to or limiting creditors rights generally;

(b) The person executing this Agreement and all Authorized Persons acting on behalf of the Client or any Lender has and have been duly and properly authorized to do so;

(c) Each Lender is lending Securities as principal for its own account and it will not transfer, assign or encumber its interest in, or rights with respect to, any securities loans;

(d) All Securities subject to lending pursuant to Section 2.2 of this Agreement are free and clear of all liens, claims, security interests and encumbrances, no such Security subject to lending has been sold and the Client on behalf of each Lender has no present intention to sell any of the Securities subject to lending. The Client shall promptly add to the list referenced in Section 2.2 hereof any and all Securities which are no longer subject to the representations contained in this sub-paragraph (d).

3.2 BGI’s Representations BGI hereby represents and warrants to the Client, which representations and warranties shall be deemed to be continuing and to be reaffirmed on any day that a Securities loan hereunder is outstanding, that:

(a) This Agreement is legally and validly entered into by BGI, does not and will not, violate any statute, regulation, rule, order or, judgment binding on BGI, or any provision of BGI’s charter or by-laws, or any agreement binding on BGI or affecting its property, and is enforceable against BGI in accordance with its terms, except as may be limited by bankruptcy, insolvency or similar laws, or by equitable principles relating to or limiting creditors rights generally; and

(b) The person executing this Agreement on behalf of BGI and all persons acting on BGI’s behalf pursuant to this Agreement have been duly and properly authorized to do so.

(c) It will comply with all laws, rules and regulations applicable to the securities lending transactions contemplated by this Agreement.

4. Securities Lending Transactions.

4.1 Compliance with Securities Lending Guidelines. BGI hereby acknowledges receipt of the current Securities Lending Guidelines as approved by the Client’s Board of Trustees. The Client will notify BGI of any changes to the Securities Lending Guidelines. BGI acknowledges and agrees that it shall only lend Securities on behalf of the Lenders in accordance with the conditions of the Securities Lending Guidelines applicable to the Lenders’ lending agent.

4.2 Loan Initiation. From time to time BGI may lend Securities to Borrowers and deliver such Securities against receipt of Collateral in accordance with the applicable Securities Lending Agreement. If instructed by the Client in writing, BGI will refrain from lending a particular security or from making loans to a particular Borrower.

4.3 Receipt of Collateral; Approved Investments.

(a) For each loan hereunder BGI shall (i) initially receive Cash Collateral equivalent to no less than 102% (105% in the case of loans of foreign securities denominated in non-U.S. dollars) of the market value of the securities lent and (ii) thereafter shall request on a daily basis as necessary additional Collateral, which for Cash Collateral shall be an amount such that the value of the Cash Collateral in no event be equivalent to less than 100% of the market value of the Securities lent (as determined in accordance with the applicable Securities Lending Agreement), and BGI is hereby authorized and directed, without obtaining any further approval from the Lender, to invest and reinvest all or substantially all of the Cash Collateral received in any Approved Investments. BGI shall instruct the Custodian to credit all Collateral, Approved Investments and Distributions received with respect to

4

Collateral and Approved Investments to the Collateral Account and mark its books and records to identify the Lender’s ownership thereof as appropriate.

(b) All Approved Investments shall be for the account and risk of the Lender. To the extent any loss arising out of Approved Investments results in a deficiency in the amount of Collateral available for return to a Borrower pursuant to the Securities Lending Agreement, the Lender agrees to pay BGI on demand cash in an amount equal to such deficiency.

(c) Except as otherwise provided herein, all Collateral, Approved Investments and Distributions credited to the Collateral Account shall be controlled by, and subject only to the instructions of, BGI, and BGI shall not be required to comply with any instructions of the Lender with respect to the same.

4.4 Distributions on Loaned Securities. Except as provided in the next sentence, all interests, dividends, and other distributions paid with respect to loaned Securities shall be credited to the Lender’s Account on the date such amounts are delivered by the Borrower to the Custodian. Any non-cash distribution on loaned Securities which is in the nature of a stock split or a stock dividend shall be added to the applicable loan (and shall be considered to constitute loaned Securities) as of the date such non-cash distribution is declared payable whether or not it has been received by the Borrower, provided that any such addition shall be conditional upon the actual receipt of such non-cash distribution and may be reversed by the Custodian to the extent that such non-cash distribution is not received.

4.5 Mark to Market. BGI shall on each Business Day mark to market in U.S. dollars the value of all Securities loaned hereunder and accordingly receive and release Collateral in accordance with the applicable Securities Lending Agreement.

4.6 Collateral Substitutions. BGI shall accept substitutions of Collateral in accordance with the applicable Securities Lending Agreement and shall credit all such substitutions to the Collateral Account, provided however that unless other Collateral has been mutually agreed upon in writing by BGI and the Client, no other Collateral may be substituted for Cash Collateral. BGI will not accept Letters of Credit as Collateral hereunder from any Borrower unless the Securities Lending Agreement with such Borrower provides that in the event of a material adverse change in the financial condition of any bank issuing a Letter of Credit that serves as Collateral thereunder, the Borrower will be required to immediately substitute Cash Collateral or appropriate securities Collateral for such Letter of Credit.

4.7 Termination of Loans. BGI shall terminate any Securities loan to a Borrower in accordance with the applicable Securities Lending Agreement as soon as practicable after:

(a) receipt by BGI of a notice of termination pursuant to the Securities lending Agreement;

(b) receipt by BGI of Written Instructions instructing it to terminate a Securities loan; provided that the Client may require that each Security must be returned to the Lender by no later than the date which is the standard settlement date for trades of such Security entered into on the date of such Written Instruction;

(c) receipt by BGI of Written Instructions deleting the Borrower to whom such loan was made from Schedule II hereto;

(d) BGI’s becoming aware of the occurrence of any default pursuant to the applicable Securities Lending Agreement requiring termination of such loan; or

(e) whenever BGI, in its sole discretion, elects to terminate such loan.

4.8 Securities Loan Fee. BGI shall receive any applicable Securities Loan Fee paid by Borrowers pursuant to the Securities Lending Agreement and credit all such amounts received to the Earnings Account.

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4.9 The Borrower’s Financial Condition. Upon request, BGI will make available to the Lender each of the Borrower’s most recent statements that have been made available to BGI pursuant to the Securities Lending Agreements.

4.10 Transfer Taxes and Necessary Costs. All transfer taxes and necessary costs with respect to the transfer of the loaned Securities by the Lender to the Borrower and the Borrower to the Lender upon the termination of the loan shall be paid by the Borrower in accordance with the applicable Securities Lending Agreement.

4.11 BGI’s Obligation. Except as specifically set forth herein, or in any applicable Securities Lending Agreement, BOI shall have no duty or obligation to take action to effect payment by a Borrower of any amounts owed by such Borrower pursuant to the Securities Lending Agreement.

4.12 Loans to Affiliated Borrowers. The Client and BGI have obtained an exemptive order from the Securities and Exchange Commission that permits BOI to lend securities on behalf of the Lenders to Affiliated Borrowers, provided that such loans are made in accordance with the conditions and procedures outlined in the exemptive order. BOI shall only make loans to Affiliated Borrowers in accordance with such conditions and procedures.

5. Concerning BGI.

5.1 Standard of Care: Indemnification.

(a) It is expressly understood and agreed that in exercising its rights and performing its obligations hereunder, BOI owes no fiduciary duty to the Lender. BGI shall not be liable for any costs, expenses, damages, liabilities or claims (including reasonable attorneys and accountants fees) incurred by the Lender, except to the extent those costs, expenses, damages, liabilities or claims result from BGI’s material breach of this Agreement or BGI’s negligence, willful misconduct, bad faith, or reckless disregard of its obligations and duties hereunder.

Neither the Client nor BGI shall have any obligation hereunder for costs, expenses, damages, liabilities or claims (including reasonable attorneys and accountants fees), which are sustained or incurred by reason of any action or inaction by the Book-Entry System or any Depository or their respective successors or nominees. In no event shall either party be liable to the other for special, punitive or consequential damages, arising under or in connection with this Agreement, even if previously informed of the possibility of such damages.

(b) The Client on behalf of each Lender agrees to indemnify BGI and to hold it harmless from and against any and all costs, expenses, damages, liabilities or claims (including reasonable fees and expenses of counsel) which BGI may sustain or incur or which may be asserted against BGI by reason of or as a result of any action taken or omitted by BGI in connection with or arising out of BGI’s operating under and in compliance with this Agreement, except those costs, expenses, damages, liabilities or claims arising out of BGI’s negligence, bad faith, willful misconduct, or reckless disregard of its obligations and duties hereunder. Actions taken or omitted in reasonable reliance upon Oral or Written Instructions, any Certificate, or upon any information, order, indenture, stock certificate, power of attorney, assignment, affidavit or other instrument reasonably believed by BGI to be genuine or bearing the signature of a person or persons reasonably believed by BOI to be genuine or bearing the signature of a person or person~ reasonably believed to be authorized to sign, countersign or execute the same, shall be presumed to have been taken or omitted in good faith.

(c) BGI shall indemnify and hold harmless each client, Lender, its Board of Trustees and its agents and Barclays Global Fund Advisors from any and all loss, liability, costs, damages, actions, and claims (“Loss”) to the extent that any such Loss arises out of the material breach of this Agreement by or negligent acts or omissions or willful misconduct of BGI, its officers, directors or employees or any of its agents or subcustodians in connection with the securities lending activities undertaken pursuant to this Agreement, provided that BGI’s indemnification obligation with respect to the acts or omissions of its subcustodians shall not exceed the indemnification provided by the applicable subcustodian to BGI. The Lender and/or client may obtain indemnification against losses due to a borrower default from a third party, including from an affiliate of BGI. BGI is not a party to any such arrangement.

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5.2 No Obligation to Inquire. Without limiting the generality of the foregoing, BGI shall be under no obligation to inquire into, and shall not be liable for, the validity of the issue of any Securities at any time held in the Account or Approved Investments held in the Collateral Account.

5.3 Advice of Counsel. BGI may, with respect to questions of law, apply for and obtain the advice and opinion of counsel which may be counsel to the Client, provided that the foregoing shall not be deemed to be a waiver by the Client of any conflict of such counsel.

5.4 No Collection Obligations. BGI shall be under no obligation or duty to take action to effect collection of any amounts payable in respect of Securities or Approved Investments if such Securities or Approved Investments are in default, or if payment is refused after due demand and presentation.

5.5 Pricing Methods. BGI is authorized to utilize any recognized pricing information service or any other means of valuation specified in the applicable Securities Lending Agreement (“Pricing Methods”) in order to perform its valuation responsibilities with respect to loaned Securities, Collateral and Approved Investments, and the Lender agrees to hold 001 harmless from and against any loss or damage suffered or incurred as a result of errors or omissions of any such Pricing Methods.

5.6 Agent’s Fee.

(a) In connection with each Securities loan hereunder, the Lender shall pay to BGI fifty percent of the net amount earned from securities lending activities, consisting of income earned on the investment and reinvestment of cash collateral plus any fees otherwise paid by Borrowers. The net amount to be credited shall be computed after deducting the rebate paid to the Borrowers per agreement with the Borrowers. BGI will be responsible for all transaction fees and all other operational costs relating to securities lending activities.

(b) BGI is authorized on a monthly basis to charge the fee owed by the Lender under this paragraph against the applicable Collateral Account. Such fee shall be charged and paid at the end of each month.

5.7 Reliance On Certificates and Instructions. BGI shall be entitled to rely upon any Certificate, any information contained on any Schedule hereto as may be amended in accordance with the terms hereof, and Written or Oral Instruction actually received by BGI and reasonably believed by BGI to be duly authorized and delivered. The Client agrees to forward to BGI Written Instructions confirming Oral Instructions in such manner so that such Written Instructions are received by BGI by the close of business of the same day that such Oral Instructions are given to BGI. The Client agrees that the fact that such confirming Written Instructions are not received on a timely basis or that contrary instructions are received by BGI shall in no way affect the validity or enforceability of the transactions authorized by the Client. BGI will use reasonable efforts to report any subsequently received contrary instructions. In this regard, the records of BGI shall be presumed to reflect accurately any Oral Instructions given by an Authorized Person or a person reasonably believed by BGI to be an Authorized Person.

5.8 Disclosure of Account Information. BGI may not disclose or supply any information regarding the Account unless required by any law or governmental regulation now or hereafter in effect or requested to do so by Client; provided that BGI may disclose or supply information regarding the Account as necessary in the sole discretion of BGI in order to facilitate, effect or continue any loans hereunder.

5.9 Reports. BGI will furnish the Client and the Lender with reports relating to loans hereunder and other information requested by the Client and shall provide such reports to the Client’s Board of Trustees upon request or as required by the Securities Lending Guidelines.

5.10 Force Majeure. Notwithstanding anything to the contrary in this Agreement, in no event shall a party to this Agreement be liable to the other party or any third party for losses resulting from (i) any acts of God, fires, floods, or other disturbances of nature, epidemics, strikes, riots, nationalization, expropriation, currency restrictions, or insurrection, or (ii) other happenings or events beyond the reasonable control or anticipation of the party affected,

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provided that (A) the affected party has in place appropriate business resumption procedures, systems and facilities and (B) the affected party uses its best efforts to avoid or remove the cause of such losses.

5.11 No Implied Duties.

(a) BGI shall have no duties or responsibilities whatsoever except such duties and responsibilities as are specifically set forth in this Agreement and in the applicable Securities Lending Agreement, and no covenant or obligation shall be implied against BGI in connection with this Agreement.

(b) Neither the Client nor any Lender shall have any duties or responsibilities whatsoever except such duties and responsibilities as are specifically set forth in this Agreement, and no covenant or obligation shall be implied against the Client or any Lender in connection with this Agreement.

6. Termination. This Agreement may be terminated at any time by either party upon delivery to the other party of a written notice specifying the date of such termination, which shall be not less than 60 days after the date of receipt of such notice. Notwithstanding any such notice, this Agreement shall continue’ in full force and effect with respect to all loans of Securities outstanding on the date of termination.

7. Miscellaneous.

7.1 Exclusivity. The Client agrees that it shall not enter into any other agreement with any third party whereby such third party is permitted to make loans on behalf of any Lender of any securities held by BGI in the Account from time to time. The parties agree that this provision does not prohibit the Client maintaining an agreement with its existing securities lending agent during an initial transition period to BGI.

7.2 Certificates. The Client agrees to furnish to BGI a new Certificate in the event that any then present Authorized Person ceases to be an Authorized Person or in the event that any other Authorized Persons are appointed and authorized. Until such new Certificate is received, BGI shall be fully protected in acting upon Oral Instructions or signatures of the present Authorized Persons.

7.3 Notices.

(a) Any notice or other instrument in writing, authorized or required by this Agreement to be given to BGI, shall be sufficiently given if addressed to BGI and received by it at its offices at 45 Fremont Street, San Francisco, CA 94105, Attention: Securities Lending Department, with a copy to: Joanne Medero, General Counsel or at such other place as BGI may from time to time designate in writing.

(b) Any notice or other instrument in writing, authorized or required by this Agreement to be given to the Client shall be sufficiently given if addressed to the Lender and mailed or delivered to Master Investment Portfolio or the Barclays Global Investors Funds, Fund Administration, c/o Barclays Global Fund Advisors, 45 Fremont Street, San Francisco, California 94105, with a copy to: Legal Department, or at such other place as the Client may from time to time designate in writing.

7.4 Cumulative Rights and No Waiver. Each and every right granted to a party hereunder or under any other document delivered hereunder or in connection herewith, or allowed it by law or equity, shall be cumulative and may be exercised from time to time. No failure on the part of a party to exercise, and no delay in exercising, any right will operate as a waiver thereof, nor will any single or partial exercise by a party of any right preclude any other or future exercise thereof or the exercise of any other right.

7.5 Severability. In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations shall not in any way be affected or impaired thereby, and if any provision is inapplicable to any person or circumstances, it shall nevertheless remain applicable to all other persons and circumstances.

7.6 Amendments. This Agreement may not be amended or modified in any manner except by a written agreement executed by both parties.

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7.7 Successors and Assigns. This Agreement shall extend to and shall be binding upon the parties hereto, and their respective successors and assigns; provided, however, that this Agreement shall not be assignable by either party without the written consent of the other.

7.8 Governing Law: Consent to Jurisdiction. This Agreement shall be construed in accordance with the laws of the State of New York without regard to conflict of laws principles thereof.

7.9 No Third Party Beneficiaries. In performing hereunder, BGI is acting solely on behalf of the Client and, except as specifically provided herein, no contractual or service relationship shall be deemed to be established hereby between BGI and any ocher person.

7.10 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute only one instrument.

7.11 SIPA Notice. THE PROVISIONS OF THE SECURITIES INVESTOR PROTECTION ACT OF 1970 MAY NOT PROTECT ‘PHE LENDER WITH RESPECT TO LOANS HEREUNDER A.J.’ID. THEREFORE, THE COLLATERAL DELIVERED TO BGI AS AGENT FOR THE LENDER MAY CONSTITUTE THE ONLY SOURCE OF SATISFACTION OF A BORROWER’S OBLIGATION THE EVENT SUCH BORROWER FAILS TO RETURN THE LOANED SECURITIES.

7.12 Survival of Indemnification. The indemnifications provided by a party hereunder shall be a continuing obligation of such party, its successors and assigns, notwithstanding the termination of any loans hereunder or of this Agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective corporate officers thereunto duly authorized and their respective corporate seals to be hereunto affixed, as of the day and year first above written.

iSHARES, INC.
By:	/s/ Michael Latham
	Title:	Secretary/Treasurer iShares Trust & Inc.
iSHARES TRUST
By:	/s/ Michael Latham
	Title:	Secretary/Treasurer iShares Trust & Inc.
BARCLAY’S GLOBAL INVESTORS, N.A.
By:	/s/ Michael Williams
	Title:	Managing Director
By:	/s/ David Castellanos
	Title:	Principal

9

Schedule A

Lenders

iShares, Inc.

iShares MSCI Austria Index Fund

iShares MSCI Australia Index Fund

iShares MSCI Belgium Index Fund

iShares MSCI Brazil Index Fund

iShares MSCI Canada Index Fund

iShares MSCI Emerging Markets Index Fund

iShares MSCI EMU Index Fund

iShares MSCI France Index Fund

iShares MSCI Germany Index Fund

iShares MSCI Hong Kong Index Fund

iShares MSCI Italy Index Fund

iShares MSCI Japan Index Fund

iShares MSCI Malaysia Index Fund

iShares MSCI Mexico Index Fund

iShares MSCI Netherlands Index Fund

iShares MSCI Pacific ex-Japan Index Fund

iShares MSCI Singapore Index Fund

iShares MSCI South Africa Index Fund

iShares MSCI South Korea Index Fund

iShares MSCI Spain Index Fund

iShares MSCI Sweden Index Fund

iShares MSCI Switzerland Index Fund

iShares MSCI Taiwan Index Fund

iShares MSCI United Kingdom Index Fund

iShares Trust

iShares Cohen & Steers Realty Majors Index Fund

iShares CSFB Callable Bond Index Fund*

iShares Dow Jones Select Dividend Index Fund

iShares Dow Jones Transportation Average Index Fund

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

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

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

iShares Dow Jones U.S. Energy Sector Index Fund

iShares Dow Jones U.S. Financial Sector Index Fund

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

iShares Dow Jones U.S. Healthcare Sector Index Fund

iShares Dow Jones U.S. Industrial Average Index Fund*

iShares Dow Jones U.S. Industrial Sector Index Fund

iShares Dow Jones U.S. Real Estate Index Fund

iShares Dow Jones U.S. Technology Sector Index Fund

iShares Dow Jones U.S. Telecommunications Sector Index Fund

iShares Dow Jones U.S. Total Market Index Fund

iShares FTSE/Xinhua HK China 25 Index Fund

iShares Dow Jones U.S. Utilities Sector Index Fund

iShares Goldman Sachs Consumer Industries Index Fund*

iShares Goldman Sachs Cyclical Industries Index Fund*

iShares Goldman Sachs Financials Index Fund*

iShares Goldman Sachs Hardware Index*

iShares Goldman Sachs Health Care Index Fund*

Schedule A (continued)

Lenders

iShares Goldman Sachs Natural Resources Index Fund

iShares Goldman Sachs Networking Index

iShares Goldman Sachs Semiconductor Index

iShares Goldman Sachs Software Index

iShares Goldman Sachs Technology Index Fund

iShares Goldman Sachs Utilities Index Fund*

iShares GS $ InvesTop Bond Fund

iShares Lehman 1-3 Year Treasury Bond Fund

iShares Lehman 7-10 Year Treasury Bond Fund

iShares Lehman 20+ Year Treasury Bond Fund

iShares Lehman Government/Credit Bond Fund*

iShares Lehman Liquid Corporate Bond Fund*

iShares Lehman Treasury Bond Fund*

iShares U.S. Treasury Inflation Protected Securities Fund

iShares Lehman Aggregate Bond Fund

iShares MSCI EAFE Index Fund

iShares MSCI EAFE Value Index Fund

iShares MSCI EAFE Growth Index Fund

iShares Morningstar Large Core Index Fund

iShares Morningstar Large Growth Index Fund

iShares Morningstar Large Value Index Fund

iShares Morningstar Mid Core Index Fund

iShares Morningstar Mid Growth Index Fund

iShares Morningstar Mid Value Index Fund

iShares Morningstar Small Core Index Fund

iShares Morningstar Small Growth Index Fund

iShares Morningstar Small Value Index Fund

iShares Nasdaq Biotechnology Index Fund

iShares KLD Nasdaq Social Index Fund*

iShares KLD Select Social Index Fund

iShares NYSE 100 Index Fund

iShares NYSE Composite Index Fund

iShares Russell 1000 Growth Index Fund

iShares Russell 1000 Index Fund

iShares Russell 1000 Value Index Fund

iShares Russell 2000 Growth Index Fund

iShares Russell 2000 Index Fund

iShares Russell 2000 Value Index Fund

iShares Russell 3000 Growth Index Fund

iShares Russell 3000 Index Fund

iShares Russell 3000 Value Index Fund

iShares Russell Microcap Index Fund

iShares Russell Midcap Index Fund

iShares Russell Midcap Growth Index Fund

iShares Russell Midcap Value Index Fund

iShares S&P 100 Index Fund

iShares S&P 500 Index Fund

iShares S&P 500/BARRA Growth Index Fund

iShares S&P 500/BARRA Value Index Fund

iShares S&P 1500 Index Fund

iShares S&P ADR International Index Fund*

iShares S&P Asia Pacific 100 Index Fund*

iShares S&P Europe 350 Index Fund

iShares S&P Global 100 Index Fund

iShares S&P Global 1200 Index Fund*

Schedule A (continued)

Lenders

iShares S&P Global Consumer Discretionary Index Fund*

iShares S&P Global Consumer Staples Index Fund*

iShares S&P Global Energy Index Fund

iShares S&P Global Financials Index Fund

iShares S&P Global Health Care Index Fund

iShares S&P Global Industrials Index Fund*

iShares S&P Global Information Technology Index Fund

iShares S&P Global Materials Index Fund*

iShares S&P Global Telecommunications Services Index Fund

iShares S&P Global Utilities Index Fund*

iShares S&P Latin America 40 Index Fund

iShares S&P MidCap 400 Index Fund

iShares S&P MidCap 400/BARRA Growth Index Fund

iShares S&P MidCap 400/BARRA Value Index Fund

iShares S&P SmallCap 600 Index Fund

iShares S&P SmallCap 600/BARRA Growth Index Fund

iShares S&P SmallCap 600/BARRA Value Index Fund

iShares S&P/TOPIX 150 Index Fund

* Fund has not yet been launched.

Approved by the Board of Directors/Trustees of iShares, Inc. and iShares Trust on June 14, 2005.

EX-99.(I)

Exhibit 99.(i)

Morgan, Lewis & Bockius LLP

1111 Pennsylvania Avenue, NW

Washington, DC 20004

December 21, 2005

iShares, Inc.

c/o Barclays Global Fund Advisors

45 Fremont Street

San Francisco, CA 94105

Re: Opinion of Counsel regarding Post-Effective Amendment No. 30 to the Registration

Statement filed on Form N-1A under the Securities Act of 1933 (File Nos. 33-97598 and 811-09102)

Ladies and Gentlemen:

We have acted as counsel to iShares, Inc., a Maryland corporation (the “Company”), in connection with the above-referenced registration statement (as amended, the “Registration Statement”), which relates to the Company’s shares of common stock, par value $0.001 per share (collectively, the “Shares”). This opinion is being delivered to you in connection with the Company’s filing of Post-Effective Amendment No. 30 to the Registration Statement (the “Amendment”) to be filed with the U.S. Securities and Exchange Commission pursuant to Rule 485(b) of the Securities Act of 1933 (the “1933 Act”). With your permission, all assumptions and statements of reliance herein have been made without any independent investigation or verification on our part except to the extent otherwise expressly stated, and we express no opinion with respect to the subject matter or accuracy of such assumptions or items relied upon.

In connection with this opinion, we have reviewed, among other things, executed copies of the following documents:

(a) a certificate of the State of Maryland as to the existence and good standing of the Company;

(b) the Articles of Incorporation for the Company and any amendments or supplements thereto (the “Articles of Incorporation”) and the Amended and Restated By-Laws for the Company, (the “By-Laws”);

(c) a certificate executed by Peter W. Kronberg, the Assistant Secretary of the Company, certifying as to, and attaching copies of, the Company’s Articles of Incorporation and By-Laws; certain actions of the Board of Directors of the Company authorizing the issuance of

iShares, Inc.

December 21, 2005

Page 2

the Shares; and

(d) a printer’s proof of the Amendment dated December 21, 2005.

In our capacity as counsel to the Company, we have examined the originals, or certified, conformed or reproduced copies, of all records, agreements, instruments and documents as we have deemed relevant or necessary as the basis for the opinion hereinafter expressed. In all such examinations, we have assumed the legal capacity of all natural persons executing documents, the genuineness of all signatures, the authenticity of all original or certified copies, and the conformity to original or certified copies of all copies submitted to us as conformed or reproduced copies. As to various questions of fact relevant to such opinion, we have relied upon, and assume the accuracy of, certificates and oral or written statements of public officials and officers or representatives of the Company. We have assumed that the Amendment, as filed with the U.S. Securities and Exchange Commission, will be in substantially the form of the printer’s proof referred to in paragraph (d) above.

Based upon, and subject to, the limitations set forth herein, we are of the opinion that the Shares, when issued and sold in accordance with the Articles of Incorporation and By-Laws, and for the consideration described in the Registration Statement, will be legally issued, fully paid and non-assessable under the General Corporation Laws of the State of Maryland.

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving this consent, we do not concede that we are in the category of persons whose consent is required under Section 7 of the 1933 Act.

Very truly yours,

/s/ Morgan, Lewis & Bockius LLP

EX-99.(J)

Exhibit 99.(j)

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in this Post-Effective Amendment No. 30 to the Registration Statement on Form N-1A (“Registration Statement”) of our report, dated October 18, 2005, relating to the financial statements and financial highlights which appear in the August 31, 2005 Annual Report to Shareholders of the iShares MSCI Austria Index Fund, iShares MSCI Belgium Index Fund, iShares MSCI EMU Index Fund, iShares MSCI France Index Fund, iShares MSCI Germany Index Fund, iShares MSCI Italy Index Fund, iShares MSCI Netherlands Index Fund, iShares MSCI Spain Index Fund, iShares MSCI Sweden Index Fund, iShares MSCI Switzerland Index Fund, iShares MSCI United Kingdom Index Fund, iShares MSCI Japan Index Fund, iShares MSCI Australia Index Fund, iShares MSCI Brazil Index Fund, iShares MSCI Canada Index Fund, iShares MSCI Emerging Markets Index Fund, iShares MSCI Hong Kong Index Fund, iShares MSCI Malaysia Index Fund, iShares MSCI Mexico Index Fund, iShares MSCI Pacific ex-Japan Index Fund, iShares MSCI Singapore Index Fund, iShares MSCI South Africa Index Fund, iShares MSCI South Korea Index Fund, and iShares MSCI Taiwan Index Fund which is also incorporated by reference into the Registration Statement. We also consent to the references to us under the headings “Financial Highlights”, “Financial Statements” and “Independent Registered Public Accounting Firm” in such Registration Statement.

/s/ PricewaterhouseCoopers LLP

San Francisco, California

November 28, 2005

EX-99.(P.1)

Exhibit 99.(p.1)

iSHARES, INC.

iSHARES TRUST

JOINT CODE OF ETHICS

Adopted Under Rule 17j-1

As Amended and Restated June 14, 2005

In accordance with Rule 17j-1 under the Investment Company Act of 1940, as amended (the “1940 Act”), the Board of Directors and the Board of Trustees, respectively (together, the “Boards”) (Directors or Trustees, hereinafter defined as “Trustees”) of iShares, Inc. and iShares Trust (each a “Trust” and together, the “Trusts”) have adopted this Joint Code of Ethics (the “Code”) to prohibit certain transactions and conduct, and to establish reporting requirements and enforcement procedures. (Definitions of underlined terms are included in Appendix A). Although the Trusts have adopted the Code jointly, each Trust is responsible for implementing the Code on behalf of, and for compliance therewith by, its own access persons.

I. About the Trusts and the Advisor.

The Trusts are registered investment companies that consist of multiple investment portfolios, each of which is hereinafter referred to as a “Fund.” Barclays Global Fund Advisors (the “Advisor”) is the investment advisor for the Funds.

II. About this Code of Ethics.

A. Who is covered by the Code?

• All Trustees of the Trusts, both Interested and Independent Trustees;

• All Trust officers; and

• Natural persons in a control relationship to a Fund who obtain information concerning recommendations made to the Fund with regard to the purchase or sale of any covered securities by the Fund (“Natural Control Persons”).

B. Which rules apply to whom?

This Code sets forth specific prohibitions regarding transactions in covered securities and sets out certain reporting requirements. For the reporting requirements that apply to Independent Trustees, please refer to Part A, and for the reporting requirements that apply to all other persons, please refer to Part B.

III. Prohibition Against Fraud, Deceit and Manipulation.

Persons covered by this Code cannot, in connection with the direct or indirect purchase or sale of a security held or to be acquired by a Fund:

A. employ any device, scheme or artifice to defraud the Fund;

B. make any untrue statement of a material fact to the Fund or omit to state a material fact necessary in order to make the statements made to the Fund, in light of the circumstances under which they are made, not misleading;

C. engage in any act, practice or course of business that operates or would operate as a fraud or deceit upon the Fund; or

D. engage in any manipulative practice with respect to the Fund.

IV. Review and Enforcement of the Code.

A. Appointment of a Review Officer.

A review officer (the “Review Officer”) will be appointed by the Chairperson of the Board of Trustees of each Trust (“Chairperson”) to perform the duties described in this Section IV.

B. The Review Officer’s Duties and Responsibilities.

(1) The Review Officer shall identify all access persons of a Trust and inform them of their reporting obligations promptly.

(2) The Review Officer will, on a quarterly basis, compare all reported personal securities transactions with the Funds’ completed portfolio transactions and a list of securities being considered for purchase (i.e., trade lists) by the Advisor during the quarter to determine whether a Code violation may have occurred. The Review Officer may request additional information or take any other appropriate measure that the Review Officer decides is necessary to aid in this determination. Other than for violations involving failure to submit a report required under this Code, before determining that a person has violated the Code, the Review Officer must give the person an opportunity to supply explanatory material.

(3) If the Review Officer finds that a Code violation may have occurred, the Review Officer must create and submit a written report regarding the possible violation, together with the confidential quarterly report and any explanatory material provided by the person, to the Chairperson and counsel to the Independent Trustees (“Counsel”) for the relevant Trust. The Chairperson, with advice of Counsel, will determine, in his or her sole discretion, whether the person violated the Code. If the person involved in the alleged violation is the Chairperson, then Counsel will make the determination.

(4) No person is required to submit explanatory material or otherwise to participate in a determination of whether he or she has committed a Code violation or discuss the imposition of any sanction against himself or herself.

(5) If required, the Review Officer will submit his or her own reports (as required) to an alternate Review Officer who will fulfill the duties of the Review Officer with respect to such reports. If a securities transaction of the Review Officer is under review for a possible violation, a Trust officer designated by the Chairperson will act as the alternate Review Officer for purposes of this Section IV.

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C. Sanctions.

If it is determined pursuant to paragraph B.(3) above that a person violated the Code, disciplinary action may be taken and sanctions may be imposed.

V. Recordkeeping.

The Trusts will maintain records as set forth below. These records will be maintained in accordance with Rule 17j-1 under the 1940 Act and the following requirements. They will be available for examination by representatives of the Securities and Exchange Commission and other regulatory agencies.

A. A copy of this Code and any other code adopted by a Trust which is, or at any time within the past five years has been, in effect will be preserved in an easily accessible place.

B. A record of any Code violation and of any action taken as a result of the violation will be preserved in an easily accessible place for a period of at least five years following the end of the fiscal year in which the violation occurred.

C. A copy of each report submitted by an access person under this Code, including any information provided in lieu of such report as permitted by this Code, will be preserved for a period of at least five years from the end of the fiscal year in which the report is made or the information is provided, for the first two years in an easily accessible place.

D. A record of all persons, currently or within the past five years, who are or were required to submit reports under this Code, and a list of those who are or were responsible for reviewing these reports, will be maintained in an easily accessible place.

E. A copy of each annual issues report and accompanying certification, as required by Section VII.C of this Code, must be maintained for at least five years from the end of the fiscal year in which it is made, for the first two years in any easily accessible place.

VI. Interrelationship with Other Codes of Ethics.

A. General Principle.

A person who is both an access person of a Trust and an access person of the Advisor or principal underwriter is only required to report under and otherwise comply with the Advisor’s or principal underwriter’s Rule 17j-1 Code of Ethics, as applicable, provided that such Code of Ethics has been adopted pursuant to and in compliance with Rule 17j-1. Such persons, however, are still subject to the prohibitions contained in Section III hereof.

B. Procedures.

Each Board of Trustees must:

(1) approve the Code of Ethics of an investment adviser and that of a principal underwriter that is an affiliated person of the Trust or the Advisor before initially retaining their services; and

(2) approve a material change to the Code of Ethics of an investment adviser or that of a principal underwriter that is an affiliated person of the Trust or the Advisor no later than six months after adoption of the material change.

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The Advisor must:

(1) submit to the Boards of Trustees a copy of its Code of Ethics adopted pursuant to Rule 17j-1; and

(2) report to the Trusts in writing any material change to its Code of Ethics within six months of its adoption.

VII. Miscellaneous.

A. Confidentiality.

The Trusts will endeavor to maintain the confidentiality of all personal securities transactions reports and any other information filed with the Trusts under this Code. Such reports and related information, however, may be produced to the Securities and Exchange Commission and other regulatory agencies.

B. Interpretation of Provisions.

The Trusts’ Boards of Trustees may from time to time adopt such interpretations of this Code of Ethics as they deem appropriate.

C. Annual Issues Report and Accompanying Certification.

At least annually, each Trust and the Advisor must furnish to the Trust’s Board of Trustees, and the Board of Trustees must consider, a written report that:

(1) describes any issues arising under the applicable Code of Ethics or procedures since the previous report, including, but not limited to, information about material violations of the applicable Code of Ethics or procedures and sanctions imposed in response to the material violations; and

(2) certifies that the Trust or Advisor, as applicable, has adopted procedures reasonably necessary to prevent access persons from violating the Code of Ethics.

The Trusts may report to the Boards more frequently as they deem necessary or appropriate and shall do so as requested by the Boards.

D. Initial and Annual Acknowledgment.

The Review Officer shall promptly provide all persons covered by this Code of Ethics with a copy of the Code of Ethics. In addition, all persons covered by this Code of Ethics must complete the Acknowledgment included as Appendix D within 10 days of becoming subject to this Code of Ethics and must submit an Acknowledgment to the Review Officer each year thereafter.

Amended and approved by the Board of Directors/Trustees of iShares, Inc. and iShares Trust on June 14, 2005.

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PART A

Independent Trustees

I. Initial and Annual Reports Are Not Required

An Independent Trustee need not make an initial or annual report of holdings or of transactions.

II. Quarterly Reports

An Independent Trustee generally does not need to submit a quarterly report of reportable transactions. However, if an Independent Trustee satisfies both (A) and (B) below, he or she must submit the report to the Review Officer no later than 30 days after the end of the relevant calendar quarter. A Quarterly Report form is included as Appendix B.

An Independent Trustee must submit a report of his or her securities transactions only if:

(A) he or she knew or, in the ordinary course of fulfilling his or her official duties as a Trustee, should have known, that during the 15-day period immediately preceding or following the date of the relevant transaction, the same security was purchased or sold, or was being considered for purchase or sale, by a Fund; and

(B) he or she directly or indirectly beneficially owns the securities, or because of the transaction, he or she acquires direct or indirect beneficial ownership.

Note: The “should have known” standard does not:

• imply a duty of inquiry;

• presume that the Independent Trustee should have deduced or extrapolated from discussions or memoranda dealing with a Fund’s investment strategies; or

• impute knowledge from the Independent Trustee’s awareness of a Fund’s portfolio holdings, market considerations, benchmark index, or investment policies, objectives and restrictions.

III. What May be Excluded from a Quarterly Report?

If a Quarterly Report is otherwise required, an Independent Trustee may exclude the following transactions on Quarterly Reports:

(A) Purchases or sales effected for any account over which he or she has no direct or indirect influence or control.

(B) Purchases or sales of direct obligations of the Government of the United States, bankers’ acceptances, bank certificates of deposit, commercial paper and high quality short-term debt instruments, including repurchase agreements, and shares issued by registered, open-end investment companies, including shares of funds advised by the Advisor.

(C) Purchases or sales pursuant to an Automatic Investment Plan.

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PART B

Interested Trustees; Trust Officers or Employees;

and Natural Control Persons (“Other Persons”)

I. Initial and Annual Report of Securities Holdings and Accounts.

Each Other Person must provide the Review Officer with a complete listing of his or her securities accounts and any securities in which he or she has a direct or indirect beneficial ownership. The Other Person must submit the initial list within 10 days of the date he or she first became subject to the Code’s reporting requirements, and the information must be as of a date no more than 45 days prior to the date he or she became subject to the Code’s reporting requirements. Each following year, he or she must submit a revised list to the Review Officer showing his or her securities accounts and any securities he or she beneficially owns as of a date no more than 45 days before he or she submits the list. An Initial Report form and an Annual Report form are included as Appendix C.

II. Quarterly Reports.

Each quarter, Other Persons must report any transactions in covered securities, as well as any securities accounts established during the quarter. The report must be submitted to the Review Officer no later than 30 days after the end of each calendar quarter. A Quarterly Report is included as Appendix B.

Other Persons are not required to submit a Quarterly Report if the report would duplicate information contained in broker trade confirmations or account statements received by the Trust, provided that all required information is contained in the broker trade confirmations or account statements and is received by the Review Officer no later than 30 days after the end of the calendar quarter. Please see the Review Officer for more information.

III. What Must be Included in Reports?

Other Persons must report all transactions in covered securities that: (i) he or she directly or indirectly beneficially owns; or (ii) because of the transaction, in which he or she acquires direct or indirect beneficial ownership. He or she also must list on the report each account in which any securities were held for his or her direct or indirect benefit (for initial reports, as of the date he or she becomes subject to the Code).

IV. What May be Excluded from Reports?

A report need not include the following securities, transactions or accounts:

(A) Purchases or sales effected for any account over which the Other Person has no direct or indirect influence or control.

(B) Purchases or sales of direct obligations of the Government of the United States, bankers’ acceptances, bank certificates of deposit, commercial paper, high quality short-term debt instruments, including repurchase agreements, and shares issued

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by registered, open-end investment companies, including shares of funds advised by the Advisor.

(C) Purchases or sales pursuant to an Automatic Investment Plan.

V. Pre-Approval of Investments in IPOs or Limited Offerings.

A natural control person who controls a Fund and who obtains information concerning recommendations made to that Fund regarding the purchase or sale of securities by the Trust may not directly or indirectly acquire beneficial ownership in any securities in an IPO or limited offering without obtaining prior approval from the Review Officer. The Review Officer must review each request for approval and record the decision regarding the request. Each such record must include the Review Officer’s reasons supporting the decision. The Trusts must maintain a record of any decision, and the reasons supporting the decision, to approve these investments for at least five years after the end of the fiscal year in which the approval is granted.

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APPENDIX A

Definitions

General Note

The definitions and terms used in this Code of Ethics are intended to mean the same as they do under the 1940 Act and the other federal securities laws. If a definition hereunder conflicts with the definition in the 1940 Act or other federal securities laws, or if a term used in this Code is not defined, the definitions and meanings in the 1940 Act or other federal securities laws, as applicable should be followed.

Access person means (i) any advisory person of a Fund or of a Fund’s investment adviser. All of a Fund’s directors, officers, and general partners are presumed to be Access Persons of the Fund. (ii) Any director, officer or general partner of a principal underwriter who, in the ordinary course of business, makes, participates in or obtains information regarding, the purchase or sale of covered securities by the Fund for which the principal underwriter acts, or whose functions or duties in the ordinary course of business relate to the making of any recommendation to the Fund regarding the purchase or sale of covered securities.

Advisory person means (i) any director, officer, general partner or employee of the Fund or investment adviser (or of any company in a control relationship to the Fund or investment adviser) who, in connection with his or her regular functions or duties, makes, participates in, or obtains information regarding, the purchase or sale of covered securities by a Fund, or whose functions relate to the making of any recommendations with respect to such purchases or sales; and (ii) any natural person in a control relationship to the Fund or investment adviser (a “Natural Control Person”) who obtains information concerning recommendations made to the Fund with regard to the purchase or sale of Covered Securities by the Fund.

Automatic Investment Plan means a program in which regular periodic purchases (or withdrawals) are made automatically in (or from) investment accounts in accordance with a predetermined schedule and allocation. An Automatic Investment Plan includes a dividend reinvestment plan. However, any transaction that overrides the pre-set schedule or allocations of the automatic investment plan is not under the Automatic Investment Plan.

Beneficial ownership or beneficially owns means the same as it does under Section 16 of the Securities Exchange Act of 1934 and Rule 16a-1(a)(2) thereunder. A person is the “beneficial owner” of any securities in which he or she has a direct or indirect pecuniary (monetary) interest. In addition, a person is the beneficial owner of securities held by a spouse, minor children, a relative who shares the same home, or other persons by reason of any contract, arrangement, understanding or relationship that provides the person with sole or shared voting or investment power.

Control means the power to exercise a controlling influence over the management or policies of a Fund, unless such power is solely the result of an official position with such Fund. Any person who owns beneficially, either directly or through one or more controlled companies, more than 25 per centum of the voting securities of a Fund shall be presumed to control such Fund. Any person who does not so own more than 25 per centum of the voting securities of any Fund shall

be presumed not to control such Fund. A natural person shall be presumed not to be a controlled person within the meaning of this title. Any such presumption may be rebutted by evidence, but except as hereinafter provided, shall continue until a determination to the contrary made by the Securities and Exchange Commission by order either on its own motion or on application by an interested person.

High quality short-term debt instrument means any instrument that has a maturity at issuance of less than 366 days and that is rated in one of the two highest rating categories by a nationally recognized statistical rating organization (e.g., Moody’s Investors Service).

Independent Trustee means a Trustee of a Trust who is not an “interested person” of the Trust within the meaning of Section 2(a)(19) of the 1940 Act.

Interested Trustee means a Trustee of a Trust who is an “interested person” of the Trust within the meaning of Section 2(a)(19) of the 1940 Act.

IPO (i.e., initial public offering) means an offering of securities registered under the Securities Act of 1933 the issuer of which, immediately before the registration, was not subject to the reporting requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934.

Limited offering means an offering that is exempt from registration under the Securities Act of 1933 pursuant to Section 4(2), Section 4(6), Rule 504, Rule 505 or Rule 506 (e.g., private placements).

Purchase or sale of a security includes, among other things, the writing of an option to purchase or sell a security.

Security means the same as it does under Section 2(a)(36) of the 1940 Act, except that it does not include direct obligations of the U.S. Government, bankers’ acceptances, bank certificates of deposit, commercial paper, high quality short-term debt instruments, including repurchase agreements, or shares issued by registered open-end investment companies.

A security held or to be acquired by a Fund means: (i) any security that within the most recent 15 days is or has been held by the Fund or is being or has been considered by the Advisor for purchase by the Fund and (ii) any option to purchase or sell, and any security convertible into or exchangeable for, a security.

A security is being considered for purchase by a Fund when the Advisor identifies a security as such. For purposes of this Code of Ethics, the Advisor considers securities on its “trade lists” as those “being considered for purchase.”

APPENDIX B

Quarterly Report

Name of Reporting Person:

Calendar Quarter Ended:

Date Report Submitted:

Securities Transactions

Please provide the following information for any reportable transactions during the quarter:

Date of Transaction Title of
Security
Ticker
Symbol
Number
of
Shares
Price
Principal Amount,
Maturity Date
and Interest Rate
(if applicable)
Type of
Transaction
Name of Broker,
Dealer or Bank
Effecting
Transaction

Securities Accounts

Please provide the following information for any reportable Securities Accounts:

(Note: Not applicable to Independent Trustees)

Name of Broker, Dealer or Bank Date Account
was
Established
Name(s) on and Type of Account

I certify that I have included on this report all securities transactions and accounts required to be reported pursuant to the Code of Ethics.

Signature: Date: _________________

APPENDIX C

NOTE : Not Applicable to Independent Trustees

Initial and Annual Reports of Securities and Accounts

Name of Reporting Person:

If Initial Report, Date Person Became Subject to the Code:

Information in Report Dated as of:

Date Report Submitted:

Securities Holdings

Title of Security Ticker
Symbol
# of Shares
Principal Amount,
Maturity Date
and Interest Rate
(if applicable)

Securities Accounts

Name of Broker, Dealer or Bank Name(s) on and Type of Account

I certify that I have included on this report all securities holdings and accounts required to be reported pursuant to the Code of Ethics.

Signature: Date: _________________

APPENDIX D

Acknowledgment

To: Review Officer

Re: Acknowledgment of Code of Ethics

Initial Acknowledgment: Please check here if this is an initial acknowledgment. ¨

I certify that (1) I have received, read and understand the Code of Ethics, (2) I am aware that I am subject to the provisions of this Code, (3) I will comply with this Code, (4) I will report all holdings, transactions and accounts that I am required to report pursuant to this Code.

Annual Acknowledgment: Please check here if this is an annual acknowledgment. ¨

I certify that (1) I have received, read and understand the Code of Ethics, (2) I am aware that I am subject to the provisions of this Code, (3) I have complied with this Code at all times during the previous calendar year, and (4) I have, during the previous calendar year, reported all holdings, transactions and accounts that I am required to report pursuant to this Code.

Name (print):

Position:

Signature:

Date Submitted:

EX-99.(P.2)

Exhibit 99.(p.2)

Barclays Global Investors, N.A.

And its Subsidiaries:

Barclays Global Investors USA

Barclays Global Funds Advisors

Barclays Global Investors Services

CODE OF ETHICS

Barclays Global Investors, N.A. and its subsidiaries Barclays Global Funds Advisors (BGFA), Barclays Global Investors USA (BGIUSA), and Barclays Global Investors Services (BGIS), collectively referred to as “BGI”, have adopted the following Code of Ethics, intended to prevent their officers, directors, and employees from engaging in any fraudulent or manipulative acts with respect to accounts managed or advised by BGI as set forth in SEC 17 CFR 270 Rule 17j-1, SEC 17 CFR 275 Rule 204-2 and OCC Regulation 12 CFR 12.7.

I. Introduction

The continued success of BGI depends on its relationships with its customers and on its well-deserved reputation as an institution grounded in a tradition of integrity and ethical conduct in all of its dealings. Maintaining this high standard and BGI’s reputation in today’s regulatory and business climate requires strict observance of ethical behavior, fiduciary duty to clients, legal obligations created by federal securities laws, and specific contractual undertakings by BGI, such as confidentiality agreements. This Code of Ethics emphasizes the overall importance of adhering to professional and ethical conduct and provides specific policies and, in certain instances, procedures to help employees meet BGI’s contractual, ethical, and statutory obligations.

This Code of Ethics is provided to every BGI employee upon beginning employment, and is freely available to employees via BGI’s internal communications website. All BGI employees are required to report known violations of the Code of Ethics to the Chief Compliance Officer. The US Compliance Group (USCG) reports violations of the Code to the US Risk and Compliance Committee.

BGI employees who violate these policies and procedures may be subject to disciplinary action up to and including dismissal.

II. Confidentiality and Information Barrier Policy

Beyond simply complying with the letter of the law, employees are expected to understand and observe the highest professional and ethical standards in conducting BGI’s business. All BGI employees have a duty to respect the confidential nature of information received from customers and to use that information only for the purpose for which it is provided, whether or not that information is inside information and regardless of the basis on which confidentiality is required, whether statutory requirements, ethical considerations, or contractual obligations.

Maintaining strict standards with respect to the confidentiality of information enables BGI to (a) preserve its reputation for corporate integrity, (b) maintain compliance with federal securities laws, and (c) reduce the occurrence of conflicts of interest between BGI offices or groups, and between separate operating entities of Barclays plc.

In certain areas Information Barriers have been established to ensure that employees have adopted procedures to safeguard the confidentiality of information. An Information Barrier is a barrier that

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controls or restricts the flow of confidential information; it is essentially a system or set of procedures designed to segregate information and to prevent the communication of that information between certain people or operating areas. An Information Barrier may need to be in place constantly or only at certain times. An Information Barrier may be located between various operating areas, between divisions, between teams within a division and even, temporarily, between staff who are on the same team but assigned to different accounts. The existence and proper maintenance of Information Barriers allows BGI to serve the needs of customers who have competing interests and reduces the occurrence of conflicts of interest within BGI as well as the possibility of abuse of inside information.

To maintain confidentiality, the following procedures should be observed by all employees at all times:

1. Never communicate confidential information to anyone outside BGI except for communications with auditors, approved counsel, or other experts who have been specifically engaged for certain matters. Communicate confidential information inside BGI only on a need-to-know basis.

2. Do not communicate confidential information through an Information Barrier unless permission is obtained from the appropriate manager or the US Compliance Officer.

3. Never discuss confidential information in a public place such as an elevator, a restaurant, or a hallway.

4. Always log off your computer before leaving the area for any length of time and at the end of the day.

5. Use systems and information solely for authorized activities.

6. Notify a supervisor of any unauthorized use or misuse of the system or information or any activity that appears questionable.

7. Maintain the secrecy of passwords and other system access identification.

8. Prevent others from using a terminal to which another employee has logged on until that employee has logged off.

9. Keep documents and papers containing confidential information in locked file cabinets or other secured facilities. Do not leave papers and documents containing confidential information exposed on desks or cabinets.

III. Definitions

The following definitions apply to the IV. Insider Trading and V. Trading Activities sections.

• “Access Person” means:

(i) Any supervised person:

(A) Who has access to nonpublic information regarding any clients’ purchase or sale of securities, or nonpublic information regarding the portfolio holdings of any reportable fund, or

(B) Who is involved in making securities recommendations to clients, or who has access to such recommendations that are nonpublic.

(ii) All directors, officers and partners of BGI are considered Access Persons.

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• “Automatic investment plan” means a program in which regular period purchases (or withdrawals) are made automatically in (or from) investment accounts in accordance with a predetermined schedule and allocation. An automatic investment plan includes a dividend reinvestment plan.

• “Discretionary transaction” is a transaction in a reportable fund that is made voluntarily by an employee. It includes voluntary purchases and sales; it does not include automatic contributions to retirement accounts, changes to allocation instructions for future contributions, or changes to an automatic contribution amount.

• “Employee” includes any US director, officer, and employee of BGI, his/her spouse, domestic partner, minor children, a relative who shares the employee’s home, and other persons by reason of any contract, arrangement, understanding, or relationship that provides the employee with sole or shared voting or investment powers.

• “Federal securities laws” means the Securities Act of 1933 (15 USC 77a-aa), the Securities Exchange Act of 1934 (15 USC 78a-mm), the Sarbanes-Oxley Act of 2002 (Pub.L. 107-204, 116 Stat. 745 (2002)), the Investment Company Act of 1940 (15 USC 80a), the Investment Advisers Act of 1940 (15 USC 80b), Title V of the Gramm-Leach-Bliley Act (Pub.L. No. 106-102, 113 Stat. 1338 (1999)), any rules adopted by the Securities and Exchange Commission (the “Commission”) under any of these statutes, the Bank Secrecy Act (31 USC 5311-5314; 5316-5332) as it applies to funds and investment advisers, any rules adopted thereunder by the Commission or the Department of the Treasury.

• “Fund” means an investment company registered under the Investment Company Act, and also includes commingled funds and private placement funds.

• “Initial public offering” or “IPO” means an offering of securities registered under the Securities Act of 1933 (15 USC 77a), the issuer of which, immediately before the registration, was not subject to the reporting requirements of sections 13 or 15(d) of the Securities Exchange Act of 1934 (15 USC 78m or 78o(d)).

• “Limited offering” or “private placement” means an offering that is exempt from registration under the Securities Act of 1933 pursuant to section 4(2) or section 4(6) (15 USC 77d(2) or 77d(6)) or pursuant to §§230.504, 230.505, or 230.506 of this chapter.

• “Personal Account” includes any securities account or portfolio in which securities are held for the employee, in which the employee has a direct or indirect monetary interest. The term encompasses benefit accounts, including IRA and 401(k) accounts, in which individual securities or reportable funds can be purchased or sold.

• “Purchase or sale of a security” includes, among other things, the writing of an option to purchase or sell a security.

• “Reportable fund” means:

(i) Any fund for which BGI serves as an investment adviser as defined in section 2(a)(20) of the Investment Company Act of 1940 (15 USC 80a-2(a)(20)); or

(ii) Any fund whose investment adviser or principal underwriter controls BGI, is controlled by BGI, or is under common control with BGI. For purposes of this section, control has the same meaning as it does in section 2(a)(9) of the Investment Company Act of 1940 (15 USC 80a-2(0a)(9)).

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• “Reportable security” includes securities and units of commingled funds. It does not include:

(i) Direct obligations of the Government of the United States;

(ii) Bankers’ acceptances, bank certificates of deposit, commercial paper and high quality short-term debt instruments, include repurchase agreements;

(iii) Shares issued by money market funds;

(iv) Shares issued by open-end ‘40 Act funds other than reportable funds; and

(v) Shares issued by unit investment trusts that invested exclusively in one or more open-end funds, none of which is a reportable fund.

• “Security” means any note, stock, treasury stock, security future, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option or privilege on any security (including a certificate of deposit) or on any group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a “security” or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guaranty of, or warrant or right to subscribe to or purchase any of the foregoing.

• “Supervised person” means any partner, officer, director (or other person occupying a similar status or performing similar functions), or employee of an investment adviser, or other person who provides investment advice on behalf of the investment adviser and is subject to the supervision and control of the investment adviser.

IV. Insider Trading

All employees must comply strictly with federal and state securities laws, both in transactions on behalf of BGI and in their own personal transactions. Such securities laws prohibit trading on material non-public information (“insider trading”) and communicating such information to others who may trade on it (“tipping”).

What constitutes material non-public information (“inside information”) is determined on the basis of all pertinent circumstances. First, the information must be material. Material information is generally defined as (i) information for which there is a substantial likelihood that a reasonable investor would consider it important in making his or her investment decisions, or (ii) information that is reasonably certain to have a substantial effect on the price of a company’s securities. Second, the information must be non-public. Information that has been communicated to the marketplace is generally public and therefore not inside information. For example, information found in a filing or a report made with the Securities and Exchange Commission or appearing in newspapers, industry journals, financial newsletters, or other publications would be considered public. Information obtained by word-of-mouth or through rumors would not necessarily be public. Information that is known only inside a company or to a limited number of outsiders such as accountants, bankers, financial advisors, or attorneys, is not public.

The following information will generally be inside information if not publicly known: (a) information concerning a company’s business, financial matters, and management, such as changes in earnings or dividends, significant technical achievements, important discoveries of natural resources, the obtaining or losing of major contracts, or changes in management; and (b) information concerning a company’s securities, including the market for a security or its terms, such as a prospective tender offer, merger or acquisition, prospective block trade, prospective private placement or public offering, impending stock dividend or stock split, or proposed recapitalization.

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A BGI employee possessing any of the types of inside information described above would be guilty of tipping if he or she communicated the Information, or even a simple recommendation to buy or sell the securities of the company, to another person and the other person did indeed purchase such securities as a result of such tipping. Similarly, an employee possessing inside information would be guilty of insider trading if he or she bought or sold securities for his or her personal account, or for a BGI fund or client account, based on that inside information.

V. Trading Activities

A. Prohibited Trading Activities for All Employees

1. Insider Trading

All employees are prohibited from engaging in insider trading or tipping, as described in Section IV.

2. Parallel Trading, Front Running and Shadowing Restrictions

All employees are prohibited from parallel trading, front running, and shadowing in their personal securities transactions. Shadowing and parallel trading occur when an employee observes a BGI trade or trading pattern and places the same (or similar) trade in his/her account, or passes the information to others inside or outside of the company. Front running occurs when an employee uses, or passes to others who use, advance knowledge of a BGI trade in order to enter into a personal transaction in the same security ahead of or behind BGI’s order and thereby capitalize on the impact of the BGI order.

B. Restricted Trading Activities for Certain Employees

1. Trading in Barclays plc Securities and Securities Underwritten by Barclays’ Affiliates

All members of the Board of Directors of BGI, employees reporting directly to BGI’s Chief Financial Officer, and all employees within the U.S. and Global Finance Groups are prohibited from trading in the securities of Barclays plc during the period from the end of the accounting year or half year until the relevant results are announced, i.e., from January 1 to the preliminary results announcement in February, and from July 1 to the interim results announcement in August. During other times, these individuals must pre-clear trades in Barclays plc securities in accordance with the Barclays plc policy.

C. Personal Trading Requirements for All Employees

1. Initial Certification

Upon joining BGI, new employees must certify in writing that that they acknowledge receipt of this Code of Ethics, and understand and agree to abide by BGI’s personal trading requirements, restrictions, and prohibitions.

2. Periodic Certification

Annually, and in the event of any amendment to the Code of Ethics, all employees must certify in writing that that they acknowledge receipt of this Code of Ethics, and understand and are in compliance with BGI’s personal trading requirements, restrictions, and prohibitions.

Annually, all employees must provide a list of their personal accounts and securities holdings that is no more than 45 days old at the time the certificate is provided, containing the information described in Appendix A.

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3. Designated Brokers

Employees may hold brokerage accounts only at broker-dealers that have been identified by BGI as Designated Brokers. New employees are required to move all non-conforming accounts to accounts at one or more Designated Brokers. The list of Designated Brokers is reviewed from time to time.

Employees may apply to the USCG for an exemption to the Designated Brokers requirement. Employees receiving exemptions must request their broker-dealers to provide duplicate confirmations and statements to the USCG on an ongoing basis.

The Designated Brokers requirement does not apply to (1) automatic investment plan accounts or (2) accounts holding only proprietary mutual funds or reportable funds that cannot be used to purchase or sell securities.

4. 60-Day Holding Period

All employees are required to hold securities, including options and futures, for a minimum of 60 days, to avoid short-term trading practices. The USCG may approve exceptions to the 60-day holding period in certain limited circumstances.

5. Pre-Clearance Prior to Transactions in IPOs, Private Placements, Options, Futures, and Short Sales

All employees must obtain pre-clearance for transactions in IPOs, private placements, options, futures, and short sales. Pre-clearance requires approval from both the USCG and a designated approving manager. The manager will verify that there are no pending trades in the particular security. Pre-clearance authorization for options, futures, or short sales is valid until the next day’s closing of the relevant market.

6. Blackout Periods

Some or all employees may be restricted from trading securities in selected indexes during a designated “blackout” period while the specific index is undergoing a major scheduled reconstitution. The USCG notifies employees of the blackout periods.

D. Personal Trading Requirements for Access Persons and Non-Access Persons

Access Persons are employees who have material and timely access to BGI’s trading and holdings data. Non-Access Persons do not have any such access, and are not considered Access Persons. If one person in a Management Reporting Center (MRC) is an Access Person by nature of his or her position, the other people in the MRC will also be designated as Access Persons.

The USCG is responsible for identifying BGI’s Access Persons and notifying them of their status when they join BGI and when MRC and other status changes are made.

Temporary employees, including contractors, temps, and interns (collectively “contractors”), become subject to the Code of Ethics on their 91^st day of association with BGI, calculated on a rolling 12-month basis. Contractors are considered Non-Access Persons. They are not required to move their accounts to a Designated Broker, but are subject to all other personal trading and reporting requirements for Non-Access Persons.

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1. Requirements for Access Persons

Access Persons must provide to the USCG a report of accounts and holdings in securities and reportable funds within 10 days of becoming an Access Person. The information in the report must be current as of no more than 45 days prior to the date of becoming an Access Person, and must contain the information listed in Appendix A to this Code of Ethics. An Access Person who receives an exemption to open a new account at a non-Designated Broker (as set forth in Section V.C.3), must provide the same information within 30 days of opening the account.

Access Persons must also report to the USCG all transactions in securities, and discretionary transactions in reportable funds, within 30 days of the end of each calendar quarter. The report must be in the form described in Appendix A to the Code of Ethics.

Access Persons are not required to report holdings or transactions in securities or reportable funds held in accounts of which they do not have direct or indirect influence or control, transactions effected pursuant to an automatic investment plan, or transactions reported in brokerage trade confirmations or account statements that are provided to the USCG no later than 30 days after the end of the applicable calendar quarter.

In addition to the requirement that all employees pre-clear transactions in IPOs, private placements, options, futures, and short sales, Access Persons must pre-clear transactions in equities and bonds. Pre-clearance for reportable funds is not required.

2. Requirements for Non-Access Persons

Non-Access Persons must provide to the USCG a report of accounts and holdings in securities within 20 days of becoming a Non-Access Person. The information in the report must be current as of no more than 45 days prior to the date of becoming a Non-Access Person, and must contain the information listed in Appendix A to this Code of Ethics. A Non-Access Person who receives an exemption to open a new account at a non-Designated Broker (as set forth in Section V.C.3), must provide the same information within 30 days of opening the account.

Non-Access Persons must also report to the USCG all transactions in securities within 30 days of the end of each calendar quarter. The report must contain the information listed in Appendix A to the Code of Ethics.

Non-Access Persons are not required to report holdings or transactions in securities held in accounts of which they do not have direct or indirect influence or control, transactions effected pursuant to an automatic investment plan, or transactions reported in brokerage trade confirmations or account statements that are provided to the USCG no later than 30 days after the end of the applicable calendar quarter.

Non-Access Persons are not required to report holdings or transactions in reportable funds.

E. Monitoring of Personal Securities Transactions

The USCG reviews personal securities transactions to identify possible violations of the Code of Ethics. Violations to this policy will be reported to and reviewed by management and disciplinary action may be taken, up to and including dismissal.

F. Oversight Committee

The BGI Code of Ethics Oversight Committee addresses Code of Ethics violations and other issues. Violations may be considered material and recorded as such on employees’ records.

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VI. Adoption and Approval of BGI Code of Ethics

The USCG presents the BGI Code of Ethics for approval to the US Risk and Compliance Committee.

In addition, the BGI Code of Ethics is presented to the Board of Directors or Trustees of all funds for which BGFA is the investment advisor. This is done at the initiation of investment advisory services provided by BGFA to the fund, and no later than six months after a material change to the Code of Ethics has been adopted. In connection with each approval, BGFA certifies to the board that it has adopted procedures reasonably necessary to prevent Access Persons from materially violating the BGI Code of Ethics.

BGFA provides to each such fund’s board a written report describing issues, material violations, and sanctions, and certifies to the board that procedures have been adopted that are intended to prevent Access Persons from violating the BGI Code of Ethics. This report and certification are submitted at least annually.

VII. Recordkeeping Requirements

BGI follows the recordkeeping practices outlined below:

• A copy of the current Code of Ethics, as well as copies of all Codes of Ethics that were in effect at any time within the past five years, is maintained in an easily accessible place.

• A record of any violation of the Code of Ethics, and of any action taken as a result of the violation, is maintained in an easily accessible place for at least five years after the end of the fiscal year in which the violation occurs.

• A copy of all written acknowledgements and certifications received pursuant to section V.C.1 and 2 above.

• A copy of each personal account statement, trade confirmation and any information provided in lieu of a report is retained for five years, the latest two years in an easily accessible location.

• A record of all persons, currently or within the past five years, who are or were required to make reports, and who are or were responsible for reviewing these reports is retained in an easily accessible location.

• A copy of each report submitted to a fund board pursuant to the Code of Ethics is maintained for at least five years after the end of the fiscal year in which it is made, the latest two years in an easily accessible location.

• A record of any decision to approve and the reasons supporting the decision to approve the acquisition by employees of IPOs and private placements is maintained for at least five years after the end of the fiscal year in which the approval is granted.

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APPENDIX A

Reporting Requirements

The reports required from Access Persons and Non-Access Persons described in Section V.D of the Code of Ethics must include:

Holdings reports:

• Name of broker-dealer or other financial institution with which the Access Person maintains an account in which any securities are held for the Access Person’s direct or indirect benefit

• Title of security

• Type of security

• Exchange ticker symbol or CUSIP number (if applicable)

• Number of shares

• Principal amount of each reportable security in which the Access Person has any direct or indirect beneficial ownership

• Date of submission of list to the USCG

Transaction reports:

• Date of each transaction

• Name of broker-dealer or other financial institution with or through which the transaction was effected

• Title of security

• Exchange ticker symbol or CUSIP number (if applicable)

• Interest rate or maturity date (if applicable)

• Nature of transaction (purchase, sale or other type of acquisition or disposition)

• Number of shares

• Price of security at which transaction was effected

• Principal amount of each reportable security involved

• Date of submission of report to the USCG

• For reportable funds, only discretionary transactions need be reported

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EX-99.(Q.5)

Exhibit 99.(q.5)

POWER OF ATTORNEY

WITH RESPECT TO

iSHARES TRUST AND iSHARES, INC.

Know all men by these presents that each of the Trustees of iShares Trust (the “Trust”) and Directors of iShares, Inc. (the “Company”) whose names and signatures appear below, constitutes and appoints Lee T. Kranefuss, Michael Latham and W. John McGuire, his attorneys-in-fact, with power of substitution, and each of them in any and all capacities, to sign any registration statements and amendments thereto for the Trust and the Company and to file the same with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.

November 15, 2005

/s/ Cecilia Herbert

Name: Cecilia H. Herbert

EX-99.(Q.6)

Exhibit 99.(q.6)

POWER OF ATTORNEY

WITH RESPECT TO

iSHARES TRUST AND iSHARES, INC.

Know all men by these presents that each of the Trustees of iShares Trust (the “Trust”) and Directors of iShares, Inc. (the “Company”) whose names and signatures appear below, constitutes and appoints Lee T. Kranefuss, Michael Latham and W. John McGuire, his attorneys-in-fact, with power of substitution, and each of them in any and all capacities, to sign any registration statements and amendments thereto for the Trust and the Company and to file the same with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.

November 15, 2005

/s/ Charles A. Hurty

Name: Charles A. Hurty

EX-99.(Q.7)

Exhibit 99.(q.7)

POWER OF ATTORNEY

WITH RESPECT TO

iSHARES TRUST AND iSHARES, INC.

Know all men by these presents that each of the Trustees of iShares Trust (the “Trust”) and Directors of iShares, Inc. (the “Company”) whose names and signatures appear below, constitutes and appoints Lee T. Kranefuss, Michael Latham and W. John McGuire, his attorneys-in-fact, with power of substitution, and each of them in any and all capacities, to sign any registration statements and amendments thereto for the Trust and the Company and to file the same with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.

November 15, 2005

/s/ John E. Kerrigan

Name: John E. Kerrigan